Cms Energy Corporation · NYSE:CMS
Cms Energy — Q1 2021 Earnings Presentation
26 slides from Cms Energy's earnings presentation, Apr 29, 2021
Slide 1: First Quarter 2021 Results and Outlook
First Quarter 2021 Results and Outlook Leading the Clean Energy Transformation April 29, 2021
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: A Simple Investment Thesis
A Simple Investment Thesis . . . Industry-leading clean energy commitment a Net Zero Carbon (2040) & Net Zero Methane (2030) Clean Energy Leader Diversified Service Territory Infrastructure Excellence through the Renewal Top-tier regulatory jurisdictionb Strong Cash Flow Constructive & Balance Sheet
Slide 4: Solid First Quarter
Solid First Quarter . . . Q1 2021 Results Amount Commentary Adjusted EPS $1.21 Executing on plan Dividend Per Share (DPS) Paid 43.5¢ Consistent growth 2021 Outlook Adjusted EPS Guidance $2.83 – $2.87 Up 6% to 8% Annual DPS $1.74 In-line with earnings Long-term Outlook Adjusted EPS and DPS growth +6%
Slide 5: Compelling ESG Story
Compelling ESG Story . . . ESG Focus ESG Recognition • Industry-leading net zero methane emissions by a 2030 and net zero carbon emissions by 2040 • Track record of decarbonization with equitable transitions for co-workers and communities • Safety and climate goals tied to incentive compensation – r
Slide 6: Growing Utility Renewable Portfolio
Growing Utility Renewable Portfolio . . . Recent Updates 2021 Pending IRP Objectives • 15% Renewable Portfolio Standard (RPS): • Deliver across the Triple Bottom Line • Heartland Wind, 201 MW approved in March (COD 2022), $326 MM, 10.7% ROE • Accelerate decarbonization • Current Integrated Resource
Slide 7: Aggressive Decarbonization Efforts
Aggressive Decarbonization Efforts . . . Coal Retirements Fugitive Methane Emissions Rate 2018 2024 Future CO2 Net Methane Emissions a (38)% (45)% >(90)% Emissions b (16)% ~(40)% (100)% Reduction Reduction 2.7 0.9 Additional 0.19% Decarbonization Efforts Timing per c % Fugitve Emissions • Energy eff
Slide 8: Consistent Growth Through Changing Circumstances
Consistent Growth Through . . . 7% Adjusted EPS CAGR Adjusted EPS +6% to +8% +7% Dividend Weather Help Recession Recession Hurt 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Cold Mild Warm Warm Mild Cold Summer- Hot Hot Warm Mild Polar Cold Feb Warm W
Slide 9: 2021 First Quarter EPS Results
2021 First Quarter EPS Results . . . Results By Business Segment 2020 2021 Adjusted EPS - (GAAP) $0.85 $1.21 EPS Adjustmentsa 0.01 -- Utility $1.16 Adjusted (non-GAAP) $0.86 $1.21 Enterprises 0.05 EnerBank 0.11 Parent & Other (0.11) CMS Energy $1.21 Presentation endnotes are included after the appen
Slide 10: 2021 Adjusted EPS
2021 Adjusted EPS . . . First Three Months Nine Months To-Go 35¢ (15)¢ – (19)¢ 3¢ 22¢ $2.83 – $2.87 26¢ 8¢ +6% to +8% $2.67 (2)¢ (12)¢ (18)¢ (7)¢ – (11)¢ First First Quarter Quarter $0.86 $1.21 2020 Weather Rates & Customer Usage, Normal Rates & Customer Usage, 2021 Investment Initiatives & Enterpri
Slide 11: Investing in the Clean Energy Transformation
Investing in the Clean Energy Transformation . . . Utility Investment Plan Electric Rate Case Clean Energy Generation Electric Delivers: • Filed Mar. 1 for $225 MM Gas ~$13¼ Bn ✓40% investment in clean energy transformationa • Test year ending Dec. 2022 18% ✓>7% annual rate base • Seeking recovery f
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 $90 MM 2023 Karn 1&2 coal unit $30 MM ~70% b Non-capital retirements (adj. O&M savings ) related O&M Costs 2025 MCV contract change ✓>$60 MM Taxes 2031 & Camp
Slide 13: Q&A Thank You
Q&A Thank You 1313
Slide 14: Appendix
Appendix 1414
Slide 15: Utility Sales Continue to Recover
Utility Sales Continue to Recover . . . a Weather-Normalized Electric Deliveries 2021 Adjusted EPS Sensitivities (Q1 2021 vs. Q1 2020) (1% Full Year in Volume) Electric Gas Residential 4¢ 2¢ 2% Commercial 2½ ½ (1)%b b (2)% Industrial ½ ½ (4)% Res. Com. Ind. Total Presentation endnotes are included
Slide 16: 2021 Sensitivities
2021 Sensitivities . . . Full-Year Impact Sensitivity Adj. EPS OCF Salesa (¢) ($MM) Electric (~35,200 GWh) + 1% +7 + 27 Gas (~303 Bcf) +1 +3 + 13 Gas Prices + 50¢ +0 + 60 Utility Earned ROE Electric + 10 bps +2 +7 Gas + 10 +1 +4 Interest Rates + 25 bps + <1 + 1 Effective Tax Rate (12%) + 100 bps + 3
Slide 17: Credit Metrics Maintained
Credit Metrics Maintained . . . Consumers Energy S&P Moody’s Fitch Ratings Drivers Senior Secured • Strong financial A Aa3 A+ position Commercial Paper A-2 P-1 F-2 • Growing operating Outlook Stable Negative Stable cash flow CMS Energy • Return on regulated investment Senior Unsecured BBB Baa1 BBB J
Slide 18: Operating Cash Flow Generation
Operating Cash Flow Generation . . . Amount ~$10¼ Bn in aggregate (Bn) $2.3 $2.15 $2.25 Adj. a $2.05 $1.95 $1.98 $1.85 Investment Cash flow before dividend (1.1) 2020 2021 2022 2023 2024 2025 NOLsb & Credits $0.6 $0.5 $0.6 $0.6 $0.5 $0.4 Presentation endnotes are included after the appendix. . . . r
Slide 19: Endnotes
Endnotes “cus evens?
Slide 20: Presentation Endnotes (pg 1)
Presentation Endnotes (pg 1) Slide 3: aMethane emissions from our natural gas delivery system and carbon emissions company-wide bUBS Research, 2020 state rankings and D.C. Slide 5: aMethane emissions from our natural gas delivery system and carbon emissions company-wide bRanked top quartile by EEI u
Slide 21: GAAP Reconciliation
GAAP Reconciliation 2121
Slide 22: 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 3/31/21 3/31/20 Electric Utility Reported net income per share $ 0.54 $ 0.41 Reconciling items: Other exclusions from adjusted earnings - 0.01 Ta
Slide 23: Reconciliation of GAAP Net Income to Non-GAAP 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 Net Income Available to Common Stockholders $ 349 Reconciling items: Electric utility and gas utility - Tax impact - Enterprises (1) Tax impac
Slide 24: 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 3/31/21 3/31/20 Net Income Available to Common Stockholders $ 349 $ 243 Reconciling items: Other exclusions from adjusted earnings** (1) 3 Tax
Slide 25: Earnings Per Share By Year GAAP Reconciliation
CMS ENERGY CORPORATION Earnings Per Share By Year GAAP Reconciliation (Unaudited) GAAP GAAP 2020 over 2020 over 2003 2019 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 CAGR Growth Reported earnings (loss) per share - GAAP ($0.30) $0.64 ($0.44) ($0.41) ($1.
Slide 26: Reconciliation of GAAP Operating Activities to Non-GAAP
CMS ENERGY CORPORATION Reconciliation of GAAP Operating Activities to Non-GAAP Operating Activities (Unaudited) (MM) 2020 GAAP Net cash provided by operating activities $ 1,276 Add back discretionary pension contribution 700 Non-GAAP Net cash provided by operating activities $ 1,976 26