Cms Energy Corporation · NYSE:CMS
Cms Energy — Investor Presentation (March 2025)
53 slides from Cms Energy's investor presentation, March 2025
Slide 1: Investor Meetings March 2025
Investor Meetings March 2025
Slide 2: Forward-looking statements and non-GAAP 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: CMS Energy Overview
CMS Energy Overview Corporate Structure Key Information CMS Energy 2024 Financial Statistics (NYSE: CMS) Based in Jackson, MI >8,300 Employees (44% unionized)a Consumers Energy NorthStar Clean Energy $7.5B Revenue b 2024 $998M Adjusted net income >95% regulated Avg. Rate Base 22 years Industry-leadi
Slide 4: Consumers Energy Positioned Well
Consumers Energy Positioned Well . . . Service Territory Electric Gas Combined • Electric Utility 1.9M electric customers 9,853 MW of capacity • Gas Utility 1.8M gas customers >1,300 309 Bcf gas storage • Serving 6.8M Michigan residents MW a cumulative Planet Goals contracted load since • Exiting co
Slide 5: NorthStar Clean Energy Provides Flexible Solutions
a NorthStar Clean Energy Provides Flexible Solutions . . . Renewable Platform • 368 MW of wind (OH, TX) • 64 MW of biomass (MI, NC) • 210 MW of solar (AR, MI, WI) Dearborn Industrial Generation (DIG) & Other • >1,000 MW in MI (including DIG & Peakers) • Upside: tightening capacity markets with futur
Slide 6: Near- and Long-Term Financial Objectives
Near- and Long-Term Financial Objectives . . . 2025 Long-Term Plan Adjusted EPS guidance $3.54 – $3.60 +6% to +8% Toward the high end Toward the high end Dividend Payout Ratio ~60% ~60% over time Target credit ratings Solid Solid investment grade investment grade FFO/Debt target: Mid-teensa FFO/Debt
Slide 7: ESG Disclosures are Transparent
ESG Disclosures are Transparent . . . • CMS Energy & • SASB Index (Gas Utilities & Consumers Energy Websites Distributors) • SEC Filings (10-K & Proxy) • TCFD Index • CDP Corporate Questionnaire • Global Reporting Initiative (GRI) Index • Biodiversity Report • Global Reporting Initiative • Sustainab
Slide 8: Investment Thesis
INVESTMENT THESIS
Slide 9: Investment Thesis
Investment Thesis . . . Clean Energy Industry-leading net zero commitments Leader s Co or Strong Infrastructure Cash Flow & Renewal st -w Balance Sheet Inve orkers Excellence through the Cu Customers sto m ers Attractive & Constructive Top-tier regulatory jurisdictiona Diversified Legislation & Terr
Slide 10: Infrastructure Renewal is Necessary
Infrastructure Renewal is Necessary . . . 10-yr Electric Reliability Roadmap New Energy Legislation Includes up to 400 miles of Provides capital opportunity to meet 60% undergrounding and Renewable Portfolio Standard by 2035 and 20k pole 100% Clean Energy Standard by 2040 replacements per year 25 ye
Slide 11: Updated Customer Investment Plan
Updated Customer Investment Plan . . . New Utility Investment Plan Rate Base Growth Non-Rate Base Earningsb Up $3B from prior plan ✓ ~$20M pre-tax for ~8½%/yr a $39.4B FCM by 2029 68% 26% Electric utility investment $26.2B ✓ ~$60M/yr pre-tax ’25 – ’29 for Energy $20B 32% Efficiency incentive 42% ✓ N
Slide 12: Long-Term Opportunities
Long-Term Opportunities . . . Electric Distribution Electric Supply Long-term Plan/ Reliability Roadmap Renewable Energy Plan (REP) Integrated Resource Plan (IRP) Reference Filing 2025 – 2035 2025 – 2045 2027 – 2045+ Key • 20K poles replaced each year • 9,000 MW solar • >850 MW of battery storage In
Slide 13: Michigan's Strong Regulatory Environment
Michigan’s Strong Regulatory Environment . . . 2024 2025 Supportive Energy Policy Electric • Timely recovery of investments ✓ Forward-looking test Oct. 18th: By Mar. 31st: Q2: years/earn authorized Revised Expected Order File New ROEs $277Ma, 10.25% ROE U-21585 Rate Case U-21585 ✓ 10-month rate case
Slide 14: Needed Customer Investments
Needed Customer Investments . . . Customer Investments Key Affordability Drivers Clean Energy Transformation ✓ CE Way cost savings (REP & IRP)a • ~$50M/yr savings through the CE Way • ~$350M since 2020 ✓ Large episodic savings (PPAs/coal exit) • >$200M savings through 2025 ✓ Energy Waste Reduction p
Slide 15: Expansive Economic Development Efforts
Expansive Economic Development Efforts . . . Economic Development Electric Gas Combined 2022 New Load 2023 New Load 2024 New Load (MW) ~9,000 additional opportunity Benteler Automotive Corning Inc. Battery component production Solar production facility $105M investment $900M investment Manufacturing
Slide 16: Strong Balance Sheet
Strong Balance Sheet . . . Consumers Energy S&P Moody’s Fitch Key Strengths Senior Secured A A1 A+ ✓ Forward-looking recovery ✓ Constructive rate construct Commercial Paper A-2 P-2 F-2 ✓ Strong operating cash flow Outlook Stable Stable Stable generation CMS Energy Senior Unsecured BBB Baa2 BBB ✓ 100
Slide 17: Our Clean Energy Transformation
Our Clean Energy Transformation . . . Exit Coal in 2025… …While Ensuring Reliability a (Coal % PP&E ) • Purchase ~1.2 GW of existing gas <20% capacity (Covert) Classic 7 retirement and • Maintain ~1.2 GW of peaking capacity Karn 1&2 retirement through 2031 (Karn 3&4) • Ongoing Energy Efficiency Camp
Slide 18: Industry-Leading Financial Performance
Industry-Leading Financial Performance . . . Adjusted EPS +6% to +8% Dividend Weather Help Recession Recession Recession / Hurt Pandemic 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025+ Cold Mild Hot Warm Mild Cold Summer- Hot Hot Wa
Slide 19: Environmental
» ENVIRONMENTAL
Slide 20: Executing on the Clean Energy Transformation
Executing on the Clean Energy Transformation . . . Planet Goals Proof Points ✓ Retired Karn 1 & 2 coal units, 515 MW 2030 Today ✓ Acquired existing ~1.2 GW CCGT Net zero methane emissions for our b ✓ Grew VGP Program to >690 MW gas delivery system 2040 2025 • Retire Campbell 1-3 coal units (exit coa
Slide 21: A Just Transition Out of Coal
A Just Transition Out of Coal . . . We Have Done This Before Proven Examples ✓ Nine coal units retired to date ✓ Coal plant decommissioning included: ✓ Clear and ongoing communication with affected ✓Environmental abatement communities and stakeholders through stakeholder events, ✓Dismantlement and d
Slide 22: Our Energy Supply Will Be Cleaner
a Our Energy Supply Will Be Cleaner . . . Current Mix Mix by 2040 3% 14% Michigan Energy Law 40% ✓≥60% Renewables 21% ✓ 100% Clean Energy 62% ≥60% Coal Renewables Natural Gas Storage Clean Energy (incl. nuclear, storage, gas w/ CCS & other potential renewables) Presentation endnotes are included aft
Slide 23: Our VGP Renewable Programs
a Our VGP Renewable Programs . . . Large Customer Program Residential and Commercial Programs b • >690 MW subscribed MI Clean Air • >770 residential and business customers enrolled • Planned expansion as demand grows, uncapped • Open to natural gas and combination customers • Allows customers to pay
Slide 24: Decarbonization of Gas Infrastructure
Decarbonization of Gas Infrastructure . . . Net zero methane by 2030... …with additional opportunities. • >100 miles/yr main replacement • 15 gas storage fields, 8 compressor stations and ~150K horsepower for system • ~5.5K/yr vintage services replacement reliability/resiliency and mitigate gas pric
Slide 25: Emissions Reduction
Emissions Reduction . . . 100% Clean Energy by 2040 Net Zero by 2030 a b (Carbon Emissions Reduction ) (Methane Emissions Reduction ) 2015 2024 2025 2040 2015 2024 2028 2030 Retire Fully ~(15)% Karn exit 3&4 coal ~(22)% ~(30)% ~(30)% Emissions Reduction RNG • Exceeds scientific targets/policy goals
Slide 26: Energy Waste Reduction Program
Energy Waste Reduction Program . . . Energy Efficiency Programs Electric ✓ ~$7.3B of customer savings on energy bills since • ~2% annually 2009 • Next 5 years: ✓ ~7,300 GWh of reduced usage since 2009 • Spend ~$180M/yr – equivalent to ~1 power planta • Pre-tax incentive ~$41M/yr ✓ ~34K/yr appliances
Slide 27: Electric Vehicle Programs
Electric Vehicle Programs . . . PowerMIDrive PowerMIDrive PowerMIFleet Residential Public Charging Goal to power 1M EVs by 2030 – could add ~5% to ~10% growth • ~40K EVs in Consumers Energy territory today – ~4x the to today’s electric load that of 2020 • >10K EVs served in the program • >90% of all
Slide 28: Social
SOCIAL
Slide 29: Committed to Physical Safety
Committed to Physical Safety . . . Safety Performance 2024 Highlights (Recordable Safety Incidents) • ~60% reduction in high-risk injuries vs. 2021 558 • Safety performance awarded for executive Down and employee compensation for 3rd year in (75)% a row • Proactive, risk-based injury program in part
Slide 30: Cyber and Physical Security Program
Cyber and Physical Security Program . . . Program Focus & Approach Robust Corporate Governance • Protect critical infrastructure, customer data and • Board oversight of security risks including cyber and employee safety physical security, compliance and data privacy • Dedicated team monitors environ
Slide 31: DE&I Strategy
DE&I Strategy . . . Leadership Diversity Innovating at Every Level ✓ 7 business employee resource groups PoC Board of 20% ✓ 25% co-worker participation Female Directors Male 40% White 60% 80% Our commitment to our Co-workers, our Customers, and our Communities begins Consumers PoC with our leaders.
Slide 32: Our Supplier Diversity Initiatives
Our Supplier Diversity Initiatives . . . 2024 Key Wins Increased annual spend with diverse suppliers by 3x since the inception of the program Improved supplier engagement by hosting Electric Connections event and attending over 20 external supplier events around the country Required that all larg
Slide 33: Continued Corporate Giving
Continued Corporate Giving . . . Charitable Organizationsa 2024 Highlights $15M in total charitable donations in 2024 $195M • ~$7½M in grants from the CE Foundation since 2009 $200M • $5M donated to help vulnerable customers with heating bills • >$1M in corporate contributions supporting Cumulative
Slide 34: Our Community Engagement Teams
Our Community Engagement Teams . . . 21 Active Community Affairs Managers in the community >350 local community events are attended each year >100 boards served on . . . are positioned across the state. 34
Slide 35: We're Helping Michigan Thrive
We’re Helping Michigan Thrive . . . Competitive Advantages in the State New and Expanding Load ✓ $1B of state incentives ✓ Energy intensive economic development 2024 rate >1,300 MWa since 2015 ✓ 2024 (7th consecutive year in a row) + Editor’s Choice Top Utility 2023 ~9,000 MW - Business Facilities a
Slide 36: Governance
GOVERNANCE
Slide 37: Exceptional Board Governance
Exceptional Board Governance . . . JOHN RUSSELL GARRICK ROCHOW DEBORAH BUTLER MYRNA SOTO Independent Chair KURT DARROW RALPH IZZO SUZANNE SHANK RONALD TANSKI JOHN SZNEWAJS LAURA WRIGHT 10 Members 90% Independent . . . led by an independent Chair and highly skilled, diverse Board. 37
Slide 38: Diverse, Engaged and Experienced Board
Diverse, Engaged and Experienced Board . . . Demographics Experience 63 Average age Senior Leadership Finance, Accounting or Fin. Reporting 100% 100% (49-71 yrs. old) Regulatory Environment & Governmental Affairs 100% Risk Management 100% Customer Experience 70% 40% Female Info. Tech. / Safety & Sec
Slide 39: Committee Membership
Committee Membership . . . Political contributions >$10K need Member 100% Board approval Chairperson Independent Governance, Compensation & Sustainability, & Name Audit Human Resources Executive Finance Public Responsibility Deborah H. Butler Kurt L. Darrow Ralph Izzo John G. Russell
Slide 40: CEO Compensation
CEO Compensation . . . Compensation Mix for CEO Operational Goals PEOPLE PLANET mance-Bas rfor ed ~25% • Employee Safety Pe tenure- based • Culture Index 18% % • Customer Experience 86 Annual Index incentive 68% Long-term Based on 14% incentive • Electric Reliability • Methane Emission EPS (70%) & B
Slide 41: Risks are Carefully Considered
Risks are Carefully Considered . . . Risks Mitigation Efforts Regulatory Environment • Participation in legislative and regulatory policy development Climate • Michigan Energy Law – 60% renewable portfolio mandate by 2035 and Carbon Emissions 100% clean energy (incl. renewables, gas with CCS and nuc
Slide 42: Political Giving
Political Giving . . . Political Giving Focus Enhanced Disclosures • Meeting Michigan’s energy needs • Publishing annually on the company’s website: • Expenditures made to influence the outcome • Helping the state’s communities thrive of ballot initiatives • Providing safe, reliable, affordable and
Slide 43: Appendix
APPENDIX 43 43
Slide 44: Financial Results & Outlook
Financial Results & Outlook . . . 2024 Full-Year Results Amount Commentary Delivered toward the Adjusted EPS $3.34 high end 2025 Full-Year Outlook Adjusted EPS Guidance $3.06 $3.54 – $3.12 $3.60 Toward the high end Annual Dividend Per Share (DPS) $2.17 Up 11¢ Long-Term Outlook Adjusted EPS Growth +6
Slide 45: DIG (750 MW) & Peakers (200 MW)
DIG (750 MW) & Peakers (200 MW) . . . Pre-Tax Income Opportunities (M) $80 ~$75 70 ~$65 ~$60 60 50 $43 40 ~$30 30 20 10 0 Historic 2024 2026 -2029 Avg. 2026+ 2026+ Capacity Price ($kw-mon) ~$3.00 ~$3.25 ~$4.50 ~$7.50 ~$10.00 Capacity Available 0% 0% ~25% ~25% ~25% . . . supports the Plan with future
Slide 46: 2024 Asset Mix
2024 Asset Mix . . . Total PP&E ($M) (%) Electric Generation $4,659 17% Coal 208 ~1% Wind, solar, hydro 2,883 10 Gas & other 1,568 6 Distribution 9,610 35 Other 753 3 Total electric $15,022 ~55% Gas Distribution $6,453 23% Transmission 2,715 10 Underground storage facilities 1,267 5 Other 407 1 Tota
Slide 47: Michigan Energy Law
Michigan Energy Law . . . Key Items Notable Changes Benefits • Renewable Portfolio Standard 60% by 2035 ✓Ability to own AND contract throughout MISO • Next Renewable Energy Plan (REP) filing (50% by 2030) (Nov. 2024) • Clean Energy Standard (incl. renewables, gas w/ CCS, or nuclear) 100% by 2040 ✓En
Slide 48: 2025 Planned Financings
2025 Planned Financings . . . Financings Existing Facilities Plan YTD a ($M) ($M) ~$1.8B of net liquidity Consumers Energy: First Mortgage Bonds $1,125 -- $250M (Nov-2025) CMS Energy: $1B, 6.5% 30-yr Jr. Sub. Notes Senior Unsecured $1,270 -- provides downward pressure on Parent Planned Equity Up to
Slide 49: Endnotes
ENDNOTES 49 49
Slide 50: Presentation Endnotes (pg 1 of 2)
Presentation Endnotes (pg 1 of 2) Slide 3: aExcludes seasonal and contract workers bAdjusted, (non-GAAP) cDividend Policy: Payout Ratio of ~60% over time Slide 4: aNet zero methane emissions for our gas delivery system, net zero GHG emissions for our entire business – incorporates greenhouse gas emi
Slide 51: Presentation Endnotes (pg 2 of 2)
Presentation Endnotes (pg 2 of 2) Slide 23: aVoluntary Green Pricing bAs of December 31, 2024 Slide 24: aMethane emissions for our gas delivery system from 2012 baseline Slide 25: aCarbon emissions reduction for our electric business (includes PPAs and MISO market purchases) from 2005 baseline, esti
Slide 52: 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 53: 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 12/31/24 12/31/23 12/31/24 12/31/23 Net Income Available to Common Stockholders $ 262 $ 306 $ 993 $ 877 Reconciling items: