Slide 1: Environmental, Social & Governance 2019
Environmental, Social & Governance 2019
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: ESG Disclosures
ESG Disclosures . . . • CMS Energy & Consumers Energy Websites • SEC Filings (10-K & Proxy) • 2019 Sustainability Report • 2017 Carbon Disclosure Project (2018 update to be filed in November) - Report Scope 1, 2 & 3 Emissions - Water • 2018 Climate Assessment Report - Considers TCFD Guidelines • 201
Slide 4: World Class Performance in 2018
World Class Performance in 2018 . . . People • Attracted 101 MWs of new electric load to Michigan • 1st quartile for employee engagement • Best place to work for LGBTQ Equality - Human Rights Campaign Foundation • Donated $10 MM to assist vulnerable customers with bill payments • Gold Level Certifie
Slide 5: People • Planet • Profit Performance
PEOPLE • PLANET • PROFIT PLANET PROFIT PEOPLE PERFORMANCE 4
Slide 6: Safety in the Workplace
Safety in the Workplace . . . 2018 Successes Safety Performance (Recordable OSHA Incidents) Safety Culture Training completed by 100% of employees. 355 More than 90% of employees Includes CPR completed Health, Safety, and & First Aid! Down (71)% Environmental (HSE) training. AEDs installed in
Slide 7: Safety in the Community
Safety in the Community . . . Proactive Replacement of Prevention / Rapid Infrastructure Response • Accelerated replacement of • “Good-catch” vintage and distribution • <30 minute gas odor mains (~100 miles/ yr) response • Replaced 13,000 vintage gas • Rapid storm response services in 2018 • >1,400
Slide 8: Data & Cyber Security Program
Data & Cyber Security Program . . . Ex. Director of Cyber Program Approach: Security meets w/ Audit Committee 2x /yr Integrated security program and organization − Covers both physical and cyber security Dedicated team focused on detecting and responding to threats with close coordination with s
Slide 9: Lower Customer Bills
Lower Customer Bills . . . Residential Weather-Normalized Bills Residential Bills as % of Wallet b a a (Electric & Gas) 2013A 2019E 5-yr Plan Utility Bill Down Utility Bill Electric $106 $106 Flat bills with additional $6 Bn ~ 4% 50 bps! ~ 3½% of capital Flat TV & Phone ~ 4% TV & Phone ~ 4% Healthca
Slide 10: Proactively Targeting New Businesses
Proactively Targeting New Businesses . . . Customer Committed Load Great State to Do Business $1.5 Bn Economic Indicators on diverse suppliers! Grand U.S. investment in 2010 thru 2017 Rapids 32 % 17 % Michigan businesses over 10 years. GDP Growth Population Growth 7% 5% Target • >5,500 jobs and attr
Slide 11: Community Engagement Team
Community Engagement Team . . . Community Affairs Managers in the community Boards served on . . . uniquely positioned across the state. 10
Slide 12: Corporate Giving
Corporate Giving . . . 2018 Donations Community Support $18½ $17 MM Low Income Families $10MM MM United Way >$600K Early Childhood $400K Economic Development $300K $3 Women Entrepreneurs MM $200K 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 . . . positively impacts our communities. 11
Slide 13: Diversity and Inclusion
Diversity and Inclusion . . . Working hard to create inclusive workplaces, reach diverse customers and have strong supplier diversity. utilities. Ranked #5 on the DiversityInc 2018 list of top Leading by example – Board comprised of 45% female leaders. Recognized nationally by Professional Woman’s
Slide 14: Employee Wellness Programs
Employee Wellness Programs . . . Live Well Program • Implemented in 2018 (>70% participation)! • Year-round engagement in employee wellness with focuses on: 1) Physical Activities: 2) Emotional 3) Financial 4) Professional 5) Social 6) Community • Employee participation incentivized with $75 in Amaz
Slide 15: Building the Next Generation
Building the Next Generation . . . STEM & Robotics • Hometown, Statewide and National focus • Focus is in middle & high school levels Consumers Energy Foundation has provided over $450,000 in STEM and FIRST® support in 2018! School-to-Work (STW) for electric line workers • Collaboration with two com
Slide 16: Working with Our Communities
Working with Our Communities . . . Gas Boot Camp • 3-week training including physical assessment and Safety Culture course Training Trust Agreement w/ • Successful candidates offered full-time positions Power for America • Entry-level natural gas training, service, • 73% pass rate, 100% retained rat
Slide 17: Union Relationships at the Utility
Union Relationships at the Utility . . . Consumers Energy Unions: • Michigan State Utility Workers Council (MSUWC) • ~3,500 employees; represents O&M and Construction Employee Engagement Favorability Score • >250 employees; represents call center Employee Engagement Favorability Score • Sub of Utili
Slide 18: People • Planet • Profit Performance
PEOPLE • PLANET • PROFIT PEOPLE PLANET PROFIT PERFORMANCE 17
Slide 19: Recognizing our Neighbors
Recognizing our Neighbors . . . Consumers Energy Foundation Planet Awards: In 2019: • Michigan Nature Association • “Protecting Habitat Today for People and Wildlife Tomorrow” project • Works to protect, restore and enhance 575 acres of critical habitat for rare, threatened and endangered plants a
Slide 20: Planet Goals
Planet Goals . . . Next 5 Years By 2040 gallons of H2O saved used to generate electricity reduction of waste to reduction of carbon landfills emissions acres of Michigan land of electricity from enhanced, restored or renewable sources protected . . . focus on both near-term and long-term targets. 19
Slide 21: Land & Water Usage
Land & Water Usage . . . Total Landfill Space Avoided Water Intensity (31)% +69% 32,102 Gal/MWh 1,210,012 Cubic Yds 22,007 Gal/MWh 717,992 Cubic Yds 1992 - 2015 2018 2012 2015 2018 2014 . . . being dramatically reduced. 20
Slide 22: Cleaner Supply Mix
Cleaner Supply Mix . . . 2018 CMS Energy by Fuel Type Consumers Energy Future Zero Coal by 2040! 16% Nuclear 40% 43% 24% Coal Gas Renewables 9% >90% Carbon 2% Pumped Renewables 9% Net Interchange emissions reduction! Storage Power & Other . . . supported by our Integrated Resource Plan. 21
Slide 23: Mix of Coal
Mix of Coal . . . Revenue Keep in Mind… (MM) Electric $ 4,561 Our electric Utility is just one Gas 1,903 Electric portion of Consumers Energy... Total Revenue $6,464 Electric Assets (MM) Generation $ 6,305 …generation makes up just a Transmission, Dist. & Other 9,722 Generation portion of the electr
Slide 24: Protecting Michigan's Environment
Protecting Michigan’s Environment . . . Reducing Carbon Emissions Adding Renewable Energy (Since 2005) 50% 43% Today 2024 2032 2040 Renewables 0 Karn 1&2 Retirement Campbell 1&2 Retirement Campbell 3 Retirement (2023) (2031) (2039) 38% cv 25% 15% RPS -50 ~45% by 2022 ~70% > 90% 0% -100 % '21 '24 '
Slide 25: Breathing Easier
Breathing Easier . . . Air Emissions Reduction Since 2005 94% 87% 94% 96% 38% Added emission control equipment! Shut down Classic 7 & added Jackson Gas Plant! Sulfur Nitrogen Mercury* Particulate Carbon Dioxide Oxide Matter Dioxide Tracking began 2007 * . . . doing our part to clean Michigan’s air.
Slide 26: Energy Efficiency
Energy Efficiency . . . Residential Programs: Saved customers over $2 billion on their energy bills since 2009 Recycling 25,000 appliances each year Providing more than 85,000 rebates each year Completing more than 19,000 in home energy audits per year Selling more than 2.7 million LEDs in stor
Slide 27: Consumers Energy EV Program
Consumers Energy EV Program . . . Five Components INVESTMENT: $10 MM over a 3-year period Residential Charging 1 Rebate up to $500; no limit on number of rebates REBATES: Residential and commercial chargers Public / Workplace Charging RATES: Time-of-use that encourages at-home charging during off-pe
Slide 28: People • Planet • Profit Performance
PEOPLE • PLANET • PROFIT PEOPLE PLANET PROFIT PERFORMANCE 27
Slide 29: Board Composition
Board Composition . . . PROFIT JOHN G. RUSSELL PATRICIA K. POPPE JON E. BARFIELD DEBORAH H. BUTLER Board of Directors with Diverse Backgrounds KURT L. DARROW STEPHEN E. EWING WILLIAM D. HARVEY MYRNA M. SOTO By the Numbers • Members JOHN G. SZNEWAJS LAURA H. WRIGHT SUZANNE F. SHANK • Year average ten
Slide 30: Committee Membership Makeup
Committee Membership Makeup . . . >$10K needs 100% Board Approval Member Independent! PROFIT Chairperson Governance, Compensation & Sustainability, & Name Audit Human Resources Executive Finance Public Responsibility Jon E. Barfield Deborah H. Butler Kurt L. Darrow Stephen E. Ewi
Slide 31: Board Experience and Diversity
Board Experience and Diversity . . . PROFIT “Core Competencies have an impact on our purpose which is measured by our Triple Bottom Line of People, Planet, and Profit, underpinned by Performance” Diversity Experience Average Age Senior Leadership 100% yrs. old Finance Accounting or Fin. Reporting 91
Slide 32: Committee Responsibilities
Committee Responsibilities PROFIT • Oversees: Audit Integrity of financial statements & information 7 meetings in 2018 Compliance with legal & regulatory requirements Risk management policies, controls & exposures • Reviews: Performance of internal audit function • Review & Approve: Compensation & E
Slide 33: Compensation
Compensation . . . PROFIT Compensation Mix for CEO 2019 Operational Goals 84% variable • Digital Customer Experience at-risk pay Index (CXi) • Generation Customer Value Base Salary • Employee Safety 16% • Public Safety Gas Infrastructure Annual Long-term • Distribution Reliability Incentive Incentiv
Slide 34: Risks are Carefully Considered
Risks are Carefully Considered . . . Risks Mitigation Efforts • Participation in legislative and regulatory policy Regulatory Environment development Climate Carbon Emissions (Regulation) • Retired 7 coal plants, and plans to retire remaining 5 plants in fleet • Energy Efficiency, Demand Response, a
Slide 35: Managing Work Every Year
Managing Work Every Year . . . a 2011 2012 2013 2014 2015 2016 2017 2018 2019 EPS $2.60 Reinvestment $2.40 +7% Weather & Storms $2.20 Mild +7% Summer Hot Cost +7% Summer $2.00 productivity above plan +7% Cost productivity $1.80 Reinvestment +7% above plan Cost productivity Hot Mild Storms Summer Win
Slide 36: Simple, Perhaps Unique Model
Simple, Perhaps Unique Model . . . Plan a EPS Growth 6% - 8% Self-Funding: - Cost management (O&M, fuel, purchased power) 2 - 3 pts - Sales (economic development, energy efficiency) 1 - Other (Enterprises, tax planning, etc.) 2 INVESTMENT SELF-FUNDED 5 - 6 pts Customer Prices “at or below inflation”
Slide 37: Consistent Growth Through Changing Circumstances
Consistent Growth Through . . . PROFIT b 7% CAGR a EPS +6% to +8% Dividend +7% Weather Recession Recession Help _____ _____ Hurt a Adjusted EPS (non-GAAP) b Non-GAAP Cold 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Feb. Cold Mild Hot Warm Mild Cold Summer- Ho
Slide 38: CMS' Trading Performance
CMS’ Trading Performance . . . Stock Performance Total Shareowner Return a b CMS CMS UTY UTY PROFIT S&P 500 S&P 500 500% 400% 604% 391% 300% 117% 200% 178% 100% 51% 69% 8% 0% -100% '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 1 Year 3 Year 5 Year 10 Year _____ _____ a 10-year stock performance as of
Slide 39: GAAP Reconciliation
CMS ENERGY GAAP Reconciliation
Slide 40: Earnings Per Share By Year GAAP Reconciliation
CMS ENERGY CORPORATION Earnings Per Share By Year GAAP Reconciliation (Unaudited) GAAP GAAP 2018 over 2018 over 2003 2017 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 CAGR Growth Reported earnings (loss) per share - GAAP ($0.30) $0.64 ($0.44) ($0.41) ($1.02) $1.20