Cms Energy Corporation · NYSE:CMS
Cms Energy — Beaver Creek Mini-Conference 2015
22 slides from Cms Energy's conference presentation, Dec 14, 2015
Slide 1: Beaver Creek Mini-Conference December 14 - 16, 2015
Beaver Creek Mini-Conference December 14 - 16, 2015 Ludington Pumped Storage Ray Compressor Station 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 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: Looking Back -- CMS Energy Consistent Growth
Looking Back -- CMS Energy Consistent Growth . . . . 7% CAGR a EPS Weather Recession Recession Help Hurt 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 We work Cold Mild Hot Warm Mild Cold Summer- Hot Hot Warm Mild Polar Cold with anyone winter summer summer winter summer winter “l
Slide 4: Looking Back -- Sustainable Performance
Looking Back -- Sustainable Performance . . . . Excellent Operations Total Shareowner Return b Improvement (since 2006) 237% Breakthrough Performance Safety Incidents DOWN 80% Outage Minutes DOWN 39 Productivity UP 56 127% Cleaner Generation Portfolio Coal REDUCED 40% S&P 105% S&P 90% Renewables ADD
Slide 5: Looking Ahead -- Simple, Perhaps Unique Model
Looking Ahead -- Simple, Perhaps Unique Model . . . . 5-Year Upside Plan Opportunity Capital investment (reliability, costs, enviro mandates) 5% - 7% 6% - 8% - O&M cost reductions 2 pts Short-term - Sales growth ½ ROA return - No “block” equity dilution 1 and/or - Surcharges and other 1½ Long-term I
Slide 6: Capex Up 45%
Capex Up 45% . . . . 2005-2014 2015-2024 Opportunity $10.7 bil $15.5 bil $20 + bil Opportunity +45% +30% Gas Infrastructure Electric Gas Electric 27% Maintenance Infrastructure Maintenance 37% Electric Environ. Reliability Smart Energy New Generation New Infra Generation Smart Electric Environmental
Slide 7: O&M Cost Performance
O&M Cost Performance . . . . Actual Cost Reduction Future Cost Savings (2014 over 2006) 2014 2014 & 2015 2018 (mils) (mils) • Attrition $ - 35 $ - 75 • Productivity (Coal Gas) - 35 - 50 • “Pole Top” Hardening - 30 - 30 • Smart Meters - 5 - 25 Peer Average >5% • Eliminate Waste (UA’s) - 15 - 20 • Mor
Slide 8: Michigan's Structural Changes
Michigan’s Structural Changes . . . . Changes Announcements Impact Brembo MW Auto 80 Fair Labor • Produce brake rotor castings • 254 new jobs; $115 mil • 24 MW Food 15 Tax Policy Arauco Manufacturing 25 • Largest particleboard press in North America Metal 20 • 250 new jobs; $325 mil Competitiv
Slide 9: Looking Ahead -- DIG (750 MW) & Peakers (200 MW)
Looking Ahead --“DIG” (750 MW) & Peakers (200 MW) . . . . Pre-Tax Income Opportunities (mils) $ 80 $75 70 Signed Contracts (layering in over time) 60 $55 +$40 50 +$20 40 $35 30 New contracts $20 20 $15 Outage 10 pull ahead 0 2015 2016 2017 Future Capacity ($/kw-mth) ≈ $1.00 ≈ $2.00 ≈ $3.00 $4.50 $7.
Slide 10: Looking Ahead -- Capacity Diversity
Looking Ahead -- Capacity Diversity . . . . Nuclear Oil 8% 6% Coal reduced Renewables by over 40%! 9% Coal 2nd best in U.S. 34% Pumped Storage 2014 11% Nuclear Gas Nuclear Oil 6% 32% 8% 8% Oil Renewables 9% 3% Purchases Coal 1% < 24% Pumped Coal Storage 41% Renewables 11% 2005 11% 2017 Pumped Gas St
Slide 11: Looking Ahead -- Clean Power Plan
Looking Ahead -- Clean Power Plan . . . . Tons CO2 (mils) 20 Consumers Energy 2012 Emissions 19 18 Retire State of Michigan Target 17 950 MW (Consumers Energy’s share) coal 16 15 14 13 12 Potential Outlook -- More Renewables Needed -- 11 Not in Plan 100 2015 2016 2017 2018 2019 2020 2021 2022 2023 2
Slide 12: Looking Ahead -- Michigan Energy Law
Looking Ahead -- Michigan Energy Law . . . . November December January February House House Senate committee committee vote full vote and full vote Sen. Nofs Rep. Nesbitt Gov. Snyder Senate and House bills closely align Opportunities ROA -- Fair choice; no subsidy Efficiency -- Eliminate waste
Slide 13: Looking Ahead -- CMS Energy
Looking Ahead -- CMS Energy . . . . 7% CAGR Long-Term Upside Opportunities PPAs Gas Expire Infra. More Renewables Replace Capacity Future LAW +5% to +7% a Plan Ops EPS • Capex (bils) $15.5 $20 NEW • O&M (10)% (15)% • Sales Growth ½ 1 Recession Recession b New Energy Law Fair Choice IRP Renewables/En
Slide 14: Appendix
Appendix
Slide 15: O&M Reinvestment Helps Customers
O&M “Reinvestment” Helps CUSTOMERS . . . . Adjusted EPS 2015 O&M 2016 (non-GAAP) Reinvestment Savings (mils) (mils) DIG outage $ (8) $10 2014 Reliability (10) -- 17¢ Donations & other (5) 5 Total $(23) $15 13¢ 2015 Weather 12¢ 11¢ Natural Offsets (4) Cost & Other 3 Total 11¢ +6% - +7% Guidance Janua
Slide 16: Operating Cash Flow Growth
Operating Cash Flow Growth . . . . Amount Up $0.6 Billion (bils) Gross operating cash flowa up $0.1 billion per year $2.6 $ 2.6 $2.5 $2.3 $2.2 $2.1 Interest, working 2.1 $2.0 $1.8 capital and taxes 1.6 $1.55 1.1 0.6 Investment 0.1 (0.4) Cash flow before dividend _____ a Non-GAAP (0.9) 2014 2015 2016
Slide 17: GAAP Reconciliation
GAAP Reconciliation
Slide 18: Earnings Per Share By Year GAAP Reconciliation
CMS ENERGY CORPORATION Earnings Per Share By Year GAAP Reconciliation (Unaudited) 2008 2009 2010 2011 2012 2013 2014 Reported earnings per share - GAAP $1.20 $0.91 $1.28 $1.58 $1.42 $1.66 $1.74 After-tax items: Electric and gas utility 0.05 0.33 0.03 - 0.17 - - Enterprises (0.02) 0.09 (0.03) (0.11)
Slide 19: Consumers Energy 2015 Forecasted Cash Flow GAAP Reconciliation
Consumers Energy 2015 Forecasted Cash Flow GAAP Reconciliation (in millions) (unaudited) Reclassifications From Sources and Uses to Statement of Cash Flows Interest/ Capital Presentation Sources and Uses Tax Other Financing Other Working Lease Pymts Securitization Common Consolidated Statements of C
Slide 20: CMS Energy Parent 2015 Forecasted Cash Flow GAAP Reconciliation
CMS Energy Parent 2015 Forecasted Cash Flow GAAP Reconciliation (in millions) (unaudited) Reclassifications From Sources and Uses to Statement of Cash Flows Presentation Sources and Uses Non Equity Consolidated Statements of Cash Flows non-GAAP Uses GAAP Description Amount as Operating Other Amount
Slide 21: Consolidated CMS Energy 2015 Forecasted Cash Flow
Consolidated CMS Energy 2015 Forecasted Consolidation of Consumers Energy and CMS Energy Parent Statements of Cash Flow (in millions) (unaudited) Eliminations/Reclassifications/Consolidation to Arrive at the Consolidated Statement of Cash Flows Statements of Cash Flows Other Consumers Equity Consume
Slide 22: Reconciliation of Gross Operating Cash Flow to GAAP Operating Activities
CMS Energy Reconciliation of Gross Operating Cash Flow to GAAP Operating Activities (unaudited) (mils) 2014 2015 2016 2017 2018 2019 2020 Consumers Operating Income + Depreciation & Amortization $ 1,813 $ 1,930 $ 2,027 $ 2,145 $ 2,266 $ 2,401 $ 2,515 Enterprises Project Cash Flows 20 20 40 58 62 67