Cms Energy Corporation · NYSE:CMS
Cms Energy — Investor Presentation (September 2013)
33 slides from Cms Energy's investor presentation, Sep 20, 2013
Slide 1: Investor Meetings September 23-26, 2013
Exhibit 99.1 Investor September Cross Gas Consumers Combined Winds® Meetings 23-26, Smart Energy Cycle 2013 Energy Plant Park Program
Slide 2: Forward-looking statements and non-GAAP information
Thispresentation relevant from STATEMENTS 10-Qs. important obligation The comparable CMS adjusted regulatory able 1 to presentation time Energy estimate CMS legal basis. factors to items GAAP time Energy’s update provides decisions. Management AND the from also that is inmeasure impact made any CMS
Slide 3: Adjusted EPS and dividend growth
EPS $1.66 $1.21 Int’b $0.84 a2003 b 6% 7% Dividend 66¢ 39% 0 20¢ .Payout 2 .006 Adjusted $1.25 . .$1.02 CAGR 32% aprovide 50¢ l2007 2004 5% $1.08 and Sale 0% excluding 36¢ $1.55 5% Dividend EPS 2005 2008 25% $0.81 $0.96 for 80% 14%(non-GAAP) $1.63 30% strong 2006 2009 discontinued $0.90 96Growth 40%
Slide 4: Consistent Results: CMS Energy model
CMSYear—$15 Consistent RESULTS Self-Imposed Base O&M Ten “Needed Constructive Visible Michigan Strong Credit Growth working 3 Rates Energy Down Rating Customer Capital Self-funded well. Not Economy Predictable < 2% Regulation Wanted” 2% MODEL Limits Upgrade Investment Billion Next Focus Inflation Fi
Slide 5: Model delivers attractive total shareholder return
Model Above Future Attractive 62% EPS Driven Shareowner EPSa 7% 4% 5% 6% CMS aTen-Year good, 4 Adjusted 5%-7% 4% growth payout Peers Growth future Average Return Delivers byGrowth dividend $7 EPS CMS return ratio rate return billion vsReturn (non-GAAP) . 5-7 Peers .Peers Future .9%-11% opportunity.
Slide 6: Consumers Energy overview
Consumers Fourth Overview Territory 1.8 8,600 312 .Premium 5 . . .million TBtu one MW largest of regulatory ofof electric Energy largest gas owned combination storage investors and . environment .and . .1.7 capacity purchased million utility and employers ingas generation thecustomers United in Mich
Slide 7: Near-Term Catalysts
Near-Term 1. Catalysts 2. 3. 4. 5. 6. Governor Progress Ten-year Michigan Leader Parent NOLs progress 6 Constructive Capital Michigan Strong Credit Growth and upgraded inmade, rating visibility customer cost supportive GDP investment self-funded tax Catalysts economy credits control; up more upgrade
Slide 8: Constructive regulation in Michigan
CATALYST John Commission Sally Greg “Appendix Seven 2013 Jan-Apr May-Jun answers Sep-Nov Nov feedback Future strong recommendations 7 Final Quackenbush White Talberg public law Governor Company Analyze Draft reports on A” (I) #1 forums, (I) the Timeline Term reports, –Term makes Constructive books d
Slide 9: Capital investment plan drives EPS growth
CATALYST Major Karn/Weadock Environmental Ludington Cross Thetford Campbell Gas & Reliability Capital New $7.3 $8.0 (bils) Amount Average Plant Base .Increases 8 . .Storage . Transmission drives Gas Rate Winds® Projects Investment 2013-2017 Natural <2% Generating Pumped & EPS #2 Automation Capacity
Slide 10: Michigan economy and GDP growth
CATALYST Gross WA 8.1 SD WI 2.1 NY (3.5) 7.4 NV CO 7.3 5.0 GA LA HI U.S. Highest Source: among 9 AK WY Best 7.9 1.0 NC 2.7 5.0 11% 5.9 7.6 8.2 RI 5th Total NE Domestic 5.9 6.9 the IL 6.2 ID 5.7 AL NJ DC IA MT U.S. 5.9 quintile 6.7 6.6 PA = 4.7 6.1 OH best 1.2 MO 2.9 4.6 3.2 4.7 ME 6.7% #3 MA Departm
Slide 11: Cost control and O&M reductions
CATALYST Electric Annual Peer -0.5% Source: Examples Three Pension Health Labor SAP Productivity outstanding 10 Average efficiencies voluntary agreements Consumers care Change SNL Non-fuel prefunding ofsharing cost #4 up Cost data up–41% 2012 separation performance 7% Strong O&M service Reductions o
Slide 12: O&M cost trend
Trend Percent P 0 Cost -21% Inflation 25% Accelerated -9% Reductions New 2006 -25% -15% Lines accelerated 11rior Plan Plan 2007 smoothed ofChange O&M 2008 funding -6% Cost Cost for 2009 illustrative investment Savings 2010 2011 purposes and 2012 reducing 2013 2014 risk. 2015
Slide 13: Electric prices competitive nationally
Electric 7% National UT Source: MS competitive 12 CO 2011CA eia.gov Prices average Residential WY nationally .&.MA 3.7% . census.gov, . WA Bill andMN asimproving. Percent DC disposable RIof NHDisposable NJ income IL ME 70% Income AKofNM household VT WI NDincome IA ID NE MT MD MI SD OR NY VA CT NV KS
Slide 14: Cost reductions and savings reinvested
Strong Average Inflation 7% Avg. 2% -2% Utilities 2006-2012 -6% Reinvested -0.5% Annual Examples Past Amount Western Workforce and SAP Future Classic Productivity Benefit Consumers Total holds 13 benefit -1% (annual 40 -8% Future down (est. Customer 7Average plans coal O&M 2% mothballed -3% of restr
Slide 15: Cost reductions and Cross Winds savings
Strong Average Inflation 7% Avg. 2% -0.5% -2% Utilities 2006-2012 -8% -6% Reinvested Examples Future Classic Productivity Benefit Consumers Additional Retiree Tax Cross Low Annual has 14 been benefits cost -10% Winds® -2% (mils) Customer health 7Average plans Reductions O&M 2% enhanced mothballed fi
Slide 16: Structural benefit cost changes
6 Structural Benefit 2012 2009 -4% 2008 2007 2006 +5% -2 -2% -6% 2013 CMS -8 over CAGR Source: Timeline – better 15 Costs Peers Increased Healthy Preferred New Union Retiree 2009 2011 2012 2010 2013 Benefit impact salaried union Changes SNL, 2005 employees, Changes prescription health living and cos
Slide 17: Cost savings to avoid rate cases
New Gas $49 2013 aTax/Other Electric ?$100 Cross Tax fund 2014 $0 16Until Benefits Rate elimination Cost 2014 Winds® Benefits 2015 Rate Case Savings test Case Avoideda of year Avoideda next gas and electric cases!
Slide 18: Credit rating upgrade
CATALYST S&P Scale A A- BBB+ BBB BBB- BB+ BB BB- Present B+ Prior B 2002 B- Outlook Impact 2013 Financing (mils) Revolvers Total Annual Future adds 17A2 B2 A3 B3 B1 Ba2 Ba3 to /Ba1 Baa2 Company 2013 Baa3 Fitch Consumers Baa1 by New cost Savings Stable Unsecured 2017 $1$CMS Moody’s savings. 1Secured
Slide 19: Operating cash flow and investment
Operating $ (bils) Amount Gross up 2.0 $1.6 $1.8 1.5 $1.3 Base 1.0 0.5 C 0 2011 (0.5) aNOLs 18 ash Non-GAAP 2.5 $0.1 $1.9 Interest Investment $1.7 taxes Investment 2012 flow operating &billion Credits Cash before 2013E $1.4per choices Flow cash $1.5 $0.8 dividend 2014E year flowa king Growth $0.7 $2
Slide 20: NOLs and equity needs
CATALYST Net $0.7 $0.8 $0.4 2011 $0.1 $0.2 Gross a“Block” 19 self-funded. Maintain NOLs $0.7 $0.4 2012 NOLs Equity and 2013E existing #6 (bils) Tax –a 0EPS 2014E $1.5 Credits 0DRIP 0Growth 0$1.2 02015E and 0 0$1.1 continuous . .2016E .$0.3 . $0.2 2017E equity $0 $0program
Slide 21: Key takeaways: EPS growth track record
Five EPS $1.70 +4% +12% +8% +7% +11% Target Actual 2003 5%-7% Growth Dividend Gross Ten-year Transparent Constructive On aPredictable distinguish 20 Adjusted track aKey Target 5% 2004 7% Actual operating Growth 6%—8% =real for 8% investment Takeaways growth EPS 2005 CMS 5%—7% growth 11th regulatory
Slide 22: Appendix
APPENDIX
Slide 23: 2013 annual sensitivities
•22 2013 Annual Status Sales (mils) Gas a•ROE Electric Sensitivities aSensitivity Impact prices (36,343 (291.3 (authorized) Gas reflect Reflect (NYMEX) +EPS Bcf) (10.3%) (10.3%) strong 2013 risk sales Gwh) 25+++5OCF + + 1% 0.07 250.01 $1.00 mitigation.bps forecast; +30$0.05 5+0.03 +–+ 0.01 +weather
Slide 24: Capital investment plan
Capital 2013 < Faster Pipe Pole More Opportunity $10 Customer at 23 $7.0 sustainable Billion replacements –gas Consumers Billion 2017 Investment generation base Level Plan customer rates Smart <2% “base Energy >4%rate” increases.
Slide 25: Installed capacity and peak demand
Installed Capacity Peak 8,500 9,500 10,500 MW 2013 4,500 5,500 6,500 7,500 Purchases .to 24 meet Demand 2014 Market reserve Capacity 2015 with requirements. 2016 Excl Reserve 2017 Classic 2018 Margin 7 New Gas Plant Classic 7
Slide 26: New gas plant permit status
NewPermit CON Expected Reliability Capacity 2012 Air Submitted July Necessity of Certificate Award Project Contracts Investment progress 25 25 Gas 2013 filed Major continues needed Plant decision to Filed Approved July to 2014 inProceed (mils) be Full Michigan CON 12th 7/12 maintained 2015 to$6 Noti
Slide 27: Consumers electric financial statistics
1 2for Consumers Financial Years Miscellaneous Fuel Purchased DEPRECIATION OPERATING NET DELIVERIES System Wholesale Intersystem AVERAGE Commerical Industrial ELECTRIC Residential Commercial Indu Retail Other Total AUTHORIZED EARNED RATE COOLING Normal Actual Warmer Increase Electric HEADCOUNT trial
Slide 28: Consumers electric generation statistics
Consumers Financial Years Weighted FUEL Nox Gas Purchased POWER Non-utility Coal Oil Combustion Nuclear Renew Pumped NET P&I Total Peak Reserve Net Load 1 2 19.08 61.5 and 3demonstrated pumped interchange 3.16 13.6 3,003 power allow 2.98 14,027 2,846 DEMONSTRATED load 7owned net factor Ended COST ab
Slide 29: Consumers gas financial statistics
Consumers Financial Years Miscellaneous Cost DEPRECIATION, OPERATING NET SALES Other Residential Commercial Industrial Transportation GAS Total WORKING AVERAGE AUTHORIZED EARNED RATE HEATING Normal Actual Colder Increase Gas 1 4 deliveries 2 3 CMS 28 utility transportation Cost Customer of INCOME RE
Slide 30: Independent power production and investor relations
As of Independent Primary Capacity Plant Genesee Grayling MI Total (Livingston) Filer EnerBank Michigan DIG (Kalamazoo Renewables Craven CMS Power Natural City MW Fuel Energy December Wood Ownership Wood Wood Power Coal Genesee HQ Natural Interest 1,035 Other River) Power Grayling Gas Investor 50% 5
Slide 31: GAAP Reconciliation
GAAP Reconciliation
Slide 32: Earnings per share by year GAAP reconciliation
CMS ENERGY CORPORATION Earnings Per Share By Year GAAP Reconciliation (Unaudited) 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Reported earnings (loss) per share - GAAP ($ 0.30) $ 0.64 ($ 0.44) ($ 0.41) ($ 1.02) $ 1.20 $ 0.91 $ 1.28 $ 1.58 $ 1.42 After-tax items: Electric and gas utility 0.21 (
Slide 33: Gross operating cash flow reconciliation
CMS Energy Reconciliation of Gross Operating Cash Flow to GAAP Operating Activities (unaudited) (mils) 2011 2012 2013 2014 2015 2016 2017 Consumers Operating Income + Depreciation & Amortization $1,527 $1,635 $1,735 $1,821 $1,948 $2,011 $2,113 Enterprises Project Cash Flows 24 17 20 29 37 44 56 Gros