Cms Energy Corporation · NYSE:CMS
Cms Energy — Investor Presentation (November 2014)
16 slides from Cms Energy's investor presentation, Nov 5, 2014
Slide 1: Investor Meeting
Top of Mind • Why Invest? • Elections • Capex Plan • Upsides • O&M • Regulatory Investor Meeting November 5, 2014 Ludington Pumped Storage Ray Compressor Jackson Gas PlantStation Cross Winds Energy Park Fourth largest in the world #1 LDC in gas storage #2 in renewable sales in the Great Lakes area
Slide 2: Forward-looking statements and non-GAAP measures
This presentation is made as of the date hereof and contains “forward-looking statements” as defined in Rule 3b-6 of the Securities Exchange Act of 1934, Rule 175 of the Securities Act of 1933, and relevant legal decisions. The forward-looking statements are subject to risks and uncertainties. All f
Slide 3: Why Invest?
Why Invest? Our Growth Engine Supported By (2015-2024 Capex) ● UPSIDES create headroom (Investment, Sales, Cost, & DIG) ● PARTNERS support good regulation $15.5 Billion (Customers, Regulators, & Policy Makers) 5% - 7% EPS growth ● PASSION to improve for customers and owners (Value, Reliability, & En
Slide 4: Elections -- Michigan Governor's Race
ELECTIONS -- Michigan Governor’s Race . . . . Rick Snyder Republican, Incumbent Mark Schauer Democrat, Challenger On Energy... Campaign Issues On ROA … • Education As Senate Democratic Leader, • Jobs “Choice creates a lot of Mark played a key role in the challenges and problems, successful passage o
Slide 5: Partners -- Michigan Energy Law Update
PARTNERS -- Michigan Energy Law Update . . . . • Adaptability • Reliability Update • Affordability • Environmental protection • 10% renewables by 2015 • Energy efficiency standards • File-and-implement • Historical test • 10% ROA cap year • 12-18 months regulatory lag • No cap on ROA Before 2008 TOD
Slide 6: Investment -- "Catch-Up"
INVESTMENT -- “Catch-Up” . . . . Amount (billions) $1.8 > $1.5 per year Peers Peer Performance a Consumers Energy Peer Average CMS Capex Liquidity Cash Flow (oper) 21% 19% 18% 16% 16% 14% 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 __
Slide 7: Investment -- Ten-Year Capex Plan Expanded
INVESTMENT -- Ten-Year Capex Plan Expanded . . . . 2015-2024 Opportunity Level 10-Year Plan Amount (bils) Generation capacity • PPA replacement $3.0 • ROA return • Higher renewables $20+ Billion $15.5 Billion Gas conversions & expansion 1.0 Grid modernization 1.0 Total Opportunities $5.0 Upside? Rat
Slide 8: Investment -- Capacity Opportunities
INVESTMENT -- Capacity Opportunities . . . . Further Capacity Growth Over Next Ten Years Upside MW 11,000 Not in plan 10,000 1,200 MW PPA’s Expire PPA ~8,600 MW 1,240 MW 580 PPA 2,600 780 MW 7,500 capacity Owned ~30% 8,820 ~800 MW 410 MW Lower customer bills Owned Shortfall 6,000 540 MW 5,000 Today
Slide 9: Upsides -- Capacity Price Increases
UPSIDES -- Capacity Price Increases . . . . Today Future Scenarios Recent Contracts (mils) (mils) +$50 $55 • Nine-year 250 MW “energy” contract at $4.06 • Capacity to Consumers $35 • 25 MW/2015 at $2.32 +$30 • 50 MW/2016 at $4.36 Upside: Capacity and energy $5 contracts layered in over time Capacity
Slide 10: Upsides -- 2014 Reinvestment Helps Customers
UPSIDES -- 2014 Reinvestment Helps Customers . . . . Adjusted EPS (non-GAAP) 2014 +18¢ Third Quarter EPS Weather (Electric) (6)¢ +15¢ Reinvestment (5) Total Change (11)¢ +9¢ Good First Nine Months EPS Choices Weather (Gas) 16¢ +4¢ Cost savings 4 Reinvest & other (16) $1.78 +7%- Total Change + 4¢ $1.
Slide 11: Upsides -- Trend of O&M Cost Savings
UPSIDES -- Trend of O&M Cost Savings . . . . O&M Trend vs Peers Future Savings 2018 vs 2013 0 50% (mils) ~6% per year 0 Peers • Fuel mix $ - 25 0 ~2% per year • Benefits - 75 0 • Less Expensive New - 75 0 Inflation -25% Hires & Lower Headcount 00 • Smart Meters - 25 0 -7% -7% • Inflation +100 0 CMS
Slide 12: New Electric Rate Design
New Electric Rate Design . . . . Residential Commercial Industrial Energy Intensive 2.5% -0.7% -1.3% -3.2% -3.4% -4.7% -5.0% -4.8% -4.8% -9.8% -15.0% -20.0% Base Rate Fuel Recovery Net Reduction . . . . and lower fuel cost have positive impact on average electric rates. 11
Slide 13: Gas and Electric Rate Cases
Gas and Electric Rate Cases . . . . 2013 2014 2015 Main Features GAS A) Investment recovery Avoided Filed File annual $88 M Self- Final & cost reductions rate case implement Order 7/01 B) Simple, small case Securitization A) Rate design Surcharge Ends $80 M B) Jackson plant File annual Avoided Plan
Slide 14: Passion to Improve -- Mindset
PASSION TO IMPROVE -- Mindset . . . . 10-Year Actual $1.76-$1.78 7% CAGR $1.89 a EPS $1.66 $1.85 Dividend $1.55 $1.45 $1.36 b $1.26 $1.21 6% $1.08 $1.08 6% 14% $1.02 $0.96 96¢ $0.90 27% 84¢ $0.84 32% $0.81 Int’l Sale 66¢ 39% 50¢ 80% 36¢ 20¢ 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Slide 15: GAAP Reconciliation
GAAP Reconciliation CMS ENERGY 14
Slide 16: Earnings Per Share By Year GAAP Reconciliation
Earnings Per Share By Year GAAP Reconciliation (Unaudited) 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Reported earnings (loss) per share - GAAP ($0.30) $0.64 ($0.44) ($0.41) ($1.02) $1.20 $0.91 $1.28 $1.58 $1.42 $1.66 After-tax items: Electric and gas utility 0.21 (0.39) - - (0.07) 0.05