Slide 1: 2021 Results and Outlook
2021 Results and Outlook Leading the Clean Energy Transformation February 3, 2022
Slide 2: Forward-looking statements disclaimer
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: 2021 Successes
2021 Successes . . . People Planet Profit • #1 utility in the U.S. for America’s Best • Transformational Clean Energy Plan (IRP) • 7% adjusted EPS growth Employers for Women and America’s filed – exit coal & achieve ~60% carbon Best Employers for Diversity by Forbes® emissions reduction by 2025 • An
Slide 4: 2021 Financial Results & Outlook
2021 Financial Results & Outlook . . . 2021 Results Amount Commentary Adjusted EPS $2.65 High end of guidance a Adjusted OCF ($M) $1,843 Up >$80M vs. Plan 2022 Full-Year Adjusted EPS Guidance $2.85 – $2.89 Raised guidance Annual Dividend Per Share $1.84 Up 10¢ Long-Term Adjusted EPS Growth +6% to +8
Slide 5: Updated Customer Investment Plan
Updated Customer Investment Plan . . . New Utility Investment Plan Rate Base Growth Upside Potential Opps: Amount ($B) 7%/yr a ~$29½B 19% IRP ~$1.3 VGP ~ 1.0 55% Electric utility Electric ~ 1 – 1½ ~$21B investment ’22 – ’26 Gas ~ 1 – 1½ 45% $14.3B ~$4B - $5B 36% 2021 2026 Clean Energy Generation Ele
Slide 6: Michigan's Strong Regulatory Construct
Michigan’s Strong Regulatory Construct . . . 2021 2022 Integrated Resource Plan Jun. 30 : th Filed Integrated Apr.: Jun.: Initial order Final order Resource Plan (IRP) U-21090 Electric Dec. 22 : nd Final order $54M a Early Q2: Q1 2023: File next Expected U-20963 rate case final order 9.9% ROE Gas
Slide 7: 2021 Results
2021 Results . . . Full Year Adj. EPS by Segment 2020 2021 2021 Reported EPS $2.64 $4.66 Utility $3.07 Adjustmentsa (0.17) (2.01) Enterprises 0.08 Adjusted EPSa $2.47 [5XX5 $2.65 EnerBank Disc. Ops. Fourth Quarter 2020 2021 Parent and Other (0.50) Reported EPS $0.55 $2.20 Total Adjusted EPS $2.65 a
Slide 8: 2021 Objectives Achieved
2021 Objectives Achieved . . . Objectives Actual Adjusted EPS $2.61 – $2.65 $2.65 DPS growth In-line w/ earnings $1.84 Adjusted OCF ($M) $1,760 $1,843 Target credit ratings Solid investment grade Solid investment grade FFO/Debt Target: Mid-teensa FFO/Debt Target: Mid-teensa Utility investment
Slide 9: 2022 Guidance Offers Continued Growth
2022 Guidance Offers Continued Growth . . . Adjusted EPS Utility $3.29 – $3.32 Enterprises 0.12 – 0.14 Parent and Other (0.56) – (0.57) Consolidated EPS $2.85 – $2.89 Premium Growth . . . off 2021’s actual performance. 9
Slide 10: 2022 Adjusted EPS
2022 Adjusted EPS . . . $2.85 – $2.89 21¢ $2.65 1¢ 5¢ (3)¢ – (7)¢ 2021 Normal Rates & Cost Savings & Usage, 2022 Weather Investment Normalized Enterprises, Storms Tax & Other . . . managing through COVID-19 risks. . . . reflects another year of premium growth. 10
Slide 11: Near- and Long-Term Objectives
Near- and Long-Term Objectives . . . 2022 Long-Term Plan Adjusted EPS guidance $2.85 – $2.89 +6% to +8% Toward the high end DPS growth guidance +6% to +8% +6% to +8% Target credit ratings Solid Solid investment grade investment grade FFO/Debt Target: Mid-teensa FFO/Debt Target: Mid-teensa Utility in
Slide 12: Our Entire Cost Structure
Our Entire Cost Structure . . . Cost Components Estimated Cost Savings 100% Year Event Savings Fuel and Power Costs 2022 Palisades retirement >$90M 2023 Karn 1&2 coal unit $30M ~70% b Non-capital retirements (adj. O&M savings ) related O&M Costs 2025 MCV contract change >$60M Taxes 2025 Campbell coa
Slide 13: 2022 Sensitivities
2022 Sensitivities . . . Full-Year Impact Sensitivity Adj. EPS OCF 2022 Adj. EPS Sensitivities (1% Full Year in Volume) Salesa (¢) ($M) Electric Gas Electric (~37,000 GWh) + 1% +7 + 27 Residential 4¢ 2½¢ Gas (~304 Bcf) +1 +3 + 13 Commercial 2½ ½ Industrial ½ ½ Gas Prices + 50¢ +0 + 60 Utility Earn
Slide 14: Simple Investment Thesis
Simple Investment Thesis . . . Industry-leading clean energy commitment Net Zero Carbon (2040) & Net Zero Methane (2030)a Clean Energy Leader Diversified Service Infrastructure Excellence through the Territory Renewal Top-tier regulatory jurisdictionb Strong Cash Flow Constructive & Balance Sheet Le
Slide 15: Q&A Thank You!
CMS ENERGY > Q&A Thank You!
Slide 16: Appendix
CMS ENERGY > Appendix
Slide 17: 2021 Adjusted EPS
2021 Adjusted EPS . . . 54¢ $2.65 $2.47 5¢ (39)¢ (2)¢ 2020 Weather Rates & Customer Usage, 2021 Investment Initiatives, Cost Enterprises, Savings & Storms Tax & Other . . . managing through COVID-19 risks. . . . up 7% vs. prior year. 17
Slide 18: Utility Sales Continue to Recover
Utility Sales Continue to Recover . . . a Weather-Normalized Electric Deliveries Economic Development Legislative Support (2021 vs. 2020) • $1B of state incentives 105 MW b • New energy intensive 5.7% 126 MW economic development 3.3% rate 75 MW b 1.2% 101 MW 69 MW Attracted >500 MW of new 45 MW or e
Slide 19: Credit Metrics Maintained
Credit Metrics Maintained . . . Consumers Energy S&P Moody’s Fitch Ratings Drivers Senior Secured • Strong financial A A1 A+ position Commercial Paper A-2 P-2 F-2 • Growing operating Outlook Stable Stable Stable cash flow CMS Energy • Return on regulated investment Senior Unsecured BBB Baa2 BBB Juni
Slide 20: 2022 Planned Financings
2022 Planned Financings . . . Financings Existing Facilities 2022 Plan ($M) $250M Consumers Energy: (Nov-2023) First Mortgage Bonds $800 a $2.0B of net liquidity CMS Energy: position with no CP outstanding Hybrid / Continuous Preferred None (as of 12/31/21) Planned Equity -- $56M contracted $850M (J
Slide 21: Operating Cash Flow
Operating Cash Flow . . . Adjusted Operating Cash Flow NOLsa & Credits Year Amount ~$2.1B ($B) ~$1.8B 2021 $0.4 2022 $0.4 ~$9.0B in ~$10.7B in aggregate aggregate 2023 $0.5 2024 $0.6 2025 $0.5 2026 $0.5 2017 - 2021 2022 - 2026 Plan Average Average Presentation endnotes are included after the appendi
Slide 22: Utility Customer Investment Plan
Utility Customer Investment Plan 5-Year Plan ($B) 2022 2023 2024 2025 2026 Total Clean Energy Generation $0.7 $0.6 $0.6 $0.5 $0.4 $2.8 Electric Distribution & Other 0.8 1.1 1.1 1.0 1.1 5.1 Gas Utility 1.1 1.2 1.3 1.4 1.4 6.4 Total $2.6 $2.9 $3.0 $2.9 $2.9 $14.3 Depreciation & Amortization $1.1 $1.1
Slide 23: Endnotes
CMS ENERGY > Endnotes
Slide 24: Presentation Endnotes
Presentation Endnotes a b Slide 3: By CultureIQ, top quartile for U.S. utilities Source: Data from CXi Forrester Index, top quartile across all industries a Slide 4: Reflects increase from 2021 OCF guidance from continuing operations of $1,760M a Slide 5: Assumes $21B rate base in 2021, $29½B in 202
Slide 25: GAAP Reconciliation
CMS Energy provides historical financial results on both a reported (GAAP) and adjusted (non-GAAP) basis and provides forward-looking guidance on an adjusted basis. During an oral presentation, references to “earnings” are on an adjusted basis. All references to net income refer to net income availa
Slide 26: Reconciliation of GAAP Cash Flows from Operating Activities
CMS ENERGY CORPORATION Reconciliation of GAAP Cash Flows from Operating Activities to Non-GAAP Adjusted Cash Flows from Operating Activities (Unaudited) In Millions 2017 2018 2019 2020 2021 Cash Flows from Operating Activities $ 1,705 $ 1,703 $ 1,790 $ 1,276 $ 1,819 Adjustments - Discretionary Pensi
Slide 27: Reconciliation of GAAP EPS to Non-GAAP Adjusted EPS by Segment
CMS ENERGY CORPORATION Reconciliation of GAAP EPS to Non-GAAP Adjusted EPS by Segment (Unaudited) In Millions, Except Per Share Amounts Three Months Ended Twelve Months Ended 12/31/21 12/31/20 12/31/21 12/31/20 Electric Utility Reported net income per share available to common stockholders $ 0.21 $
Slide 28: Reconciliation of GAAP Net Income to Non-GAAP Adjusted Net Income
CMS ENERGY CORPORATION Reconciliation of GAAP Net Income to Non-GAAP Adjusted Net Income (Unaudited) In Millions, Except Per Share Amounts Three Months Ended Twelve Months Ended 12/31/21 12/31/20 12/31/21 12/31/20 Net Income Available to Common Stockholders $ 637 $ 158 $ 1,348 $ 755 Reconciling item
Slide 29: Reconciliation of GAAP Net Income to Adjusted Net Income by Quarter
CMS ENERGY CORPORATION Reconciliation of GAAP Net Income to Non-GAAP Adjusted Net Income by Quarter (Unaudited) In Millions, Except Per Share Amounts 2021 1Q 2Q 3Q 4Q Net Income Available to Common Stockholders $ 349 $ 176 $ 186 $ 637 Reconciling items: Electric utility and gas utility - - - 29 Tax