Cms Energy Corporation · NYSE:CMS
Cms Energy — EEI 48th Annual Financial Conference 2013
40 slides from Cms Energy's conference presentation, Nov 8, 2013
Slide 1: EEI 48th Annual Financial Conference, November 2013
Exhibit 99.1 EEI 48th November Cross Gas Combined Winds® Annual 2013Energy Cycle Financial Plant ParkConference Consumers Smart Energy Program
Slide 2: Forward-looking statements and information
Thispresentation Securities statements Forward-looking INFORMATION” December STATEMENTS results events The comparable CMS adjusted regulatory able 1 to presentation Energy or to estimate basis. circumstances differ Exchange 31, items should GAAP provides 2012 Management materially AND the from also
Slide 3: CMS Energy strategy
CMS Raised Capital Competitive financial Consistent Base Fair regulation Utility .Safe, 2 . . . and dynamic, rates excellent Energy Customer 2013 investment timely • Constructive at Continuous payout guidance, or Strategy data operations inflation” investment in driven, ratio utility .cost introduce
Slide 4: CMS consistent results
CMS Consistent RESULTS Self-Imposed None Investment Plan Enablers O&M Constructive Strong Credit .Growth 3 . . . benefits Sales Energy “bet Down Rating Customer Self-funded the Growth Predictable “Needed 2%/Year Law customers MODEL Limits Upgraded company” Focus &Conservatively Regulation Not • Ten
Slide 5: Sustainable financial model and capital plan
Sustainable What 10 Capital Gas -2% O&M Strong 5 “Less Customer Michigan 5%-7% Annual .+$100M 4 .best .year, . infrastructure annually, designed We than over Costs customer Investment Growth EPS $15 Operating Say Economy Energy Base the past Financial “Continuous billion How next to rate Rates two R
Slide 6: Visible investment: $15 billion plan
Visible Clean $3 Environmental Renewable .Gas 5 . .Billion . conversions small Power Investment: $2 and energy Capacity Billion incremental New Pipeline Ludington Customer-Driven gas $3.5 Reliability generation replacements Billion with Pumped no $4 Infrastructure big Consumers Billion . Storage .El
Slide 7: Visible investment: 10-year plan and opportunity
Visible 2013-2022 10-Year New PPA $15 Post-2015 More Faster .Customer X 6 . . .Billion replacement needed generation gas pole Investment: Plan storage base renewables Opportunity & •wanted. ROA pipe rates capacity More replacement customer 10-Year <2%gas Level >3% conversions Plan return. .$18 . . B
Slide 8: Visible investment: generation portfolio capacity
Visible 2016 10,000 MW 8,000 operations 9,000 Shortfall Classic 7,000 Palisades MCV 6,000 terminates Termination 2013 .CE 7 . . .Portfolio PPA Classic 2015 Capacity Suspended PPA Investment: 7 added replacements PPA 2017 •Smart 72025 •coal •2022 2019 2017 Energy, MCV Future plants Palisades 2021 Gas
Slide 9: Visible investment: electric generation
Visible $1 (bils) Amount 1.6 1.4 New Environmental 1.2 0.8 Gas 1.0 2 0 0.2 Maintenance 0.4 .0.6 8 .008-2012 ..8.Smart PPA’s for Generation: Generation $5Investment: next $7Expire Energy 2013-2017 $8tenGas years Electric Supports 2018-2022 – needed, Reliability Growth not just . . . wanted. .
Slide 10: Visible investment: gas infrastructure
Visible Gas #4 50,000 1,700 300 3.5% Amount Investment $ 1.5 2.0 $2.2 2 0 0.5 .1.0 2018-2022 2013-2017 9 .008-2012 2.5 .largest .$1.4 bcf System provides $2.4 of miles miles Investment: gas all (bils) gas gas storage ofof investment utility transmission storage mainGas &inpipe Infrastructure opportu
Slide 11: Visible investment: gas infrastructure projects
Visible Compression West St. $88 White $76 Completed Southwest Transmission $120 Jackson 24.1 Existing Public adding 10 Clair Million miles, Oakland million Pigeon Service customer Investment: Freedom second Michigan Completed 36” &Pipeline Commission diameter Transmission line value. Proposed Gas r
Slide 12: Visible investment: transmission opportunity
.Visible Exited Opportunity Approximately Notified 2016 2015 2014 2013 opportunity; 11 . transmission Investment: ReliabilityFirst to better reclassify $100for Transmission inmillion our 2002 Corporation and customers. in register potential Plan as transmission transmission to file reclassification
Slide 13: Michigan economic recovery and examples
Examples Eco-Bio Combination Gas Electric 3 Betz 8 28 Enbridge Dart Magna-Cosma 4 5 Secant 7 Economic Rapids Grand Unemployment Industrial CMS 2008-2009 -6% -5% <1% even 12MW MWContainer Industries better, 6% 6Norplas MACI Michigan MW Plastics U.S. Sales of Growth Indicators 2010-2012 but New Utilit
Slide 14: Constructive regulation: Michigan commission
Constructive Commission John Michigan Sally 1 5 Barclays strong 132 318 10 Quackenbush 4Talberg law 510 Research on 6 Tier Regulation (I) theGreg books 1 (R), State White Chairman supported Ranking (I) Term Term by aEnds: quality Ends: July July commission. 2, 2, 2019 2017 Term Ends: July 2, 2015
Slide 15: Continuous improvement: O&M cost trend
Trend Percent -21% Inflation 25% P 0 Accelerated -9% New Reductions -6% 2006 -25% -15% Lines accelerated; 14rior Plan Plan 2007 Cost smoothed ofChange O&M Reductions 2008 funding CostCost for 2009 illustrative investment Savings 2010 2011 purposes and 2012 reducing 2013 2014 risk.2015
Slide 16: Continuous improvement: future cost savings
Continuous Future 2017 (mils) Fuel Benefits Less Hires Consumers Inflation 2002-2012 Performance a2013 15 waymix Expensive vs EGWP, & of Fuel Savings 2012 Lower 75 life (100) $25 Actions Mix Smart Total Cost at Excellence OPEB 2016 CMS. How Headcount New MW Reduction -200 Meter Retire completed & –7
Slide 17: 2012 adjusted EPS (non-GAAP)
CMS Hot Adjusted Guidance (non-GAAP) +13¢ -13¢ deliver 2012 +7% 16 2012 Mindset forEPS Summer customers Warm CostAND Winter investors. Saving
Slide 18: 2013 adjusted EPS guidance (non-GAAP)
CMS 2012 Adjusted (non-GAAP) 2013 2012 Guidance deliver -13¢ 17 +13¢ Hot Cold Mindset forEPS Summer customers +7% WarmWinter CostAND Winter & Reinvested investors. Saving Cost Savings earlier
Slide 19: Core fundamentals: EPS and dividend growth
CoreDividend EPS 5%-7% Beyond 2014 $2.00 visible 18 Fundamentals 2014 $1.30 investment, 5%-7% Beyond 2014 $2.0 Cash +$100M Beyond 2013 (bils) cost Flow 2013 controls, 2013 plan 2012conservatively, 2012 2012 2011 supportive 2011 2011regulatory. 2010 2010 2010
Slide 20: Mindset: 10-year adjusted EPS growth
Mindset 10-Year 7% $1.78 $1.45 6% $1.21b $1.26 $1.36 $1.08 $0.96 $0.81 $0.84 $0.90 2003 20¢ Adjusted drives 19 CAGR $1.02 2004 5%-7% $1.55 80% 14% Int’l consistent Actual . EPS ..5%-7% Sale 2005 39% . . Peers (non-GAAP) $1.65-$1.66 32% 2006 “real” 4%27% 2007 growth. $1.73 36¢ 2008 excluding 50¢ 2009
Slide 21: Appendix
APPENDIX
Slide 22: Need for capacity: Thetford plant purchase
Need Customers Capacity Seek Build Thetford Air CON July Alternative RFP .September Today 21 . . .permit 12 issued purchase best New filed orJuly buy Build needed deal CON Gas 30 Investors –26 Asset ifFlexible April Plant better granted Unaffected: Purchase .8.for 10-year, . granted . customers; $15
Slide 23: Michigan gross domestic product performance
Michigan Gross AK WA MT 8.1 6.7 8.2 SD OR 13.8 2.1 MI (3.5) 7.4 6.6 11.0 NV 5.9 UT 2.9 12.3 7.3 4.3 8.7 CA 5.0 4.7 4.2 4.6 0.7 GA TX 3.2 13.0 HI FL 6.9 U.S. Lowest .Source: 22 . .AK -AR NY WY WV 31.0 MN ME 7.9 IN KS 6.2 KY 6.1 8.4 SC MS .1.2 11% CO LA 8.6 WI 7.6 RI -ND 5th 6.9 VT 7.3 4.6 among Total
Slide 24: Continuous improvement: O&M cost and headcount
Continuous 2012 O&M $100k 7,200 7,600 Peer 600 1,000 $60k Consumers -0.4% _ .Source: 23 ._. ._Average ._over Each part Cost Each _SNL People 2006 ofHeadcount 2010 Cost CMS data upElectric Productivity 6% Reduction 2012 service mindset. Non-fuel . .=. $64 . How Million – One Example
Slide 25: Cross Winds energy park customer benefits
New Gas $100 $49 Cross Tax/Other Benefits $0 .2013 24 . .$0 .Tax Base fund Cost Benefits 2014 Winds Rate elimination Savings 2014Increase . . .of . Avoided gas and Electric electric base Baserate Rateincreases! Increase Avoided
Slide 26: Credit ratings and financing savings
Credit Scale Fitch A Consumers Financing Unsecured BB Prior B 2002 .Outlook 25 . A2 B2 . .Ba2 adds •Moody’s B- S&P Rating Future Present Stable B3 to $1 /BB+ 2013 cost BBB- Upgrade by S&P Stable Annual Ba1 A- 2017 savings. Baa3 A3 Moody’s Positive $8 . Secured Savings . .BB+ B+ . B1 Fitch Ba1 Total
Slide 27: 2013 annual sales and sensitivities
2013 Annual Status Sales (mils) ROE Electric Gas ._ 26._. ._(10.3%) (291.4 prices reflect Sensitivities _(authorized) aSensitivity _Impact (36,414 (10.3%) a (NYMEX) Reflect Bcf) strong + 25+5 Gwh) +EPS +risk 2013 25 +0.07 0.01 bps +$1.00 OCF +1% mitigation. sales ++30 +5+$0.05 0.03 forecast; +0.01 +
Slide 28: Liquidity and recent financing activities
Liquidity $1.7 Availability 5-year AR Recent Consumers $250 4.7% Issued .Filed 27 . . .Facility-2014 Billion strong Million prospectus issued revolver-2017 remaining Financing (asand Energy issued CMS inof Parent March conservative. 9/30/13). for $20 Activities 150 Energy $425 another prefunding $52
Slide 29: Debt maturity schedule
MATURITY Reflects Maturity F/V LONG-TERM FMBs to 6.70% (CMS) F 09/15/35 (CECo) Various 160,740 575,168 (3,031) Status 28 U S replace 12/16/24 SHORT-TERM 09/30/15 S/U Codes: (CECo) FMBs FCECo Maturity V FEnerBank CECo early or Amount 175,000 SPCRBs SU05/15/22 Call 05/15/43 12/15/16 SCHEDULE 51,500 $(
Slide 30: Operating cash flow
Operating Gross (bils) Amount Up $ 2012 NOLs $1.6 aInterest .Investment 29 .Non-GAAP 2.5 . $0.5 . credit $1.7 2.0 2013 operating &$1.3 Billion Credits 1.5 $1.8 Cash 2014 ratings $1.4 1.0 Cash $1.9 Flow cash 0.5 2015 $0.7 $1.5 upgraded. flow $2.0 .0flowa Grows $0.7 2016 Working (0.5) $2.1 before $0.4
Slide 31: Capital expenditures plan 2013-2022
Capital New 82 Total $7 30 52Generation Billion $2013 691,452 Expenditures 103 $8 2014 95 Billion $ 1,664 120 2015 68 189 -$2016 - 1,661 -396 5902017 288 Electric $ 1,408 21 2018 130 $Reliability 2019 1,092 250 2020 365 $ 1,300 143 305 2021 110 355 $ 1,650 2022 120 2,367 2013-2022 $117 1,670 Environ
Slide 32: Consumers electric utility statistics
Consumers Financial Years $3,832 electric DEPRECIATION 1,449 OPERATING DELIVERIES System Total 1,711 AVERAGE 10.72 ELECTRIC Residential Open AUTHORIZED RATE COOLING Normal in: HEADCOUNT 1 2 CMS 319.1% CDD Electric sales Access/Direct Energy 1,349 Ended 9.66 BASE $3,698 excluding base utility sales d
Slide 33: Consumers electric generation statistics
Consumers Financial Years 2.47 FUEL allowances pumped 11,538 35,864 POWER 52.1 Coal 176 and NET Total 8,190 1 2 3 CMS 32Consumers’ Includes P&I 77 2.07 52.8 2.98 84.9 14,027 2,846 DEMONSTRATED net owned Energy Ended 7,756 COST 13,643 36,946 74storage 8,607 GENERATED generation & 48.8 2.94 83.5 74 Re
Slide 34: Consumers gas utility statistics
Consumers Financial Years $2,698 2,079 DEPRECIATION, OPERATING SALES 93 Transportation AVERAGE Residential GAS WORKING Gas AUTHORIZED RATE HEATING Normal Increase 1 2 3 4 CMS 33Average Includes HDD 98Cost REVENUE CUSTOMERS SUPPLY Energy Ended 1,918 107 BASE $2,494 base AND degree (decrease) Recovery
Slide 35: Enterprises independent power assets
Enterprises As Independent Capacity Plant Natural Total (Livingston) Filer EnerBank Michigan CMS Craven River) 34 ofcity MW Fuel Energy December Wood Gas Primary Genesee PHQ Power Interest 1,035 &100 Power Grayling Investor 50% EnerBank 31, 224 (net DIG Ownership Capacity 50 Production 2012 1999 own
Slide 36: GAAP Reconciliation
GAAP RECONCILIATION
Slide 37: CMS Energy earnings by year reconciliation
CMS Earnings 2003 After-tax Electric (0.02) changes Adjusted * (a) 36Less $1.25 2004 ENERGY 0.01 than and 0.16 Per excluding earnings items: 2005 *$500 gas Share (0.01) 0.01 CORPORATION utility 2006 thousand -per By discontinued -* -Discontinued 2007 share, -0.21 Year - - or -2008 (0.39) GAAP -exclu
Slide 38: CMS Energy earnings by quarter reconciliation
CMS Earnings (In 1Q Average Reported Electric Adjusted Note: *Less 37 Millions, 2QENERGY Year-to-date than 3Q and shares By income-non-GAAP earnings net 4Q $500 gas Quarter Except income-GAAP YTD outstanding, CORPORATION utility thousand per (YTD) Dec Per and share-non-GAAP share-GAAP 36-Share -0.14
Slide 39: CMS Energy earnings three and nine months reconciliation
CMS Earnings Three Electric Gas Enterprises Corporate Discontinued Reported Totals (*) Average * 38Less Adjusted Utility Energy Months than Utility Common Segment $Interest 0.57 (0.01) (0.09) (*) 0.46 $0.01 $Corporation Operations Ended 0.46 $ $(*) per $0.55 0.61 and Shares Results $(0.07) (0.01) 0.
Slide 40: CMS 2013 operating cash flow reconciliation
CMS 2013 Reconciliation 2012 (mils) (unaudited) Consumers Enterprises Other 1,250 39 Energy $operating 1,350 2014 Project Operating $of1,450 activities 2015 Gross CashIncome 2016 Operating Flows including 2017 +17 Depreciation 2018 Cash 20 taxes, 29Flow 36interest 31& to39 Amortization GAAP payments
CMS Energy — EEI 48th Annual Financial Conference 2013 on 6ix