Cms Energy Corporation · NYSE:CMS
Cms Energy — Investor Presentation (March 2021)
26 slides from Cms Energy's investor presentation, March 2021
Slide 1: Investor Meetings: Leading the Clean Energy Transition
Investor Meetings Leading the Clean Energy Transition March 2021
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 2020 Financial Statistics (NYSE: CMS) Based in Jackson, MI a ~8,200 Employees (41% unionized) Consumers Energy Enterprises EnerBank $6.7 Bn Revenue b 2020 $764 MM Adjusted net income Avg. Rate Base $6.8 Bn 7% adj. EPSc Growth for pas
Slide 4: 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 Aging Excellence through the Infrastructure b Top-tier regulatory jurisdiction Strong Cash Flow Constructive & Balance Sheet
Slide 5: Consumers Energy Positioned Well
Consumers Energy Positioned Well . . . 4th Largest Combination Utility • Electric Utility 1.9 MM electric customers 7,927 MW of capacity • Gas Utility 1.8 MM gas customers 309 Bcf gas storage (#1 in the U.S.) Attracted • Serving 6.8 MM Michigan residents >400 MW of new or Consumers Energy Planet Goa
Slide 6: Investing in the Clean Energy Transition
Investing in the Clean Energy Transition . . . Customer Investment Clean Energy Mixc Clean Energy Generation (Estimated Clean Energy % Adjusted EPS) Electric Gas +$1 Bn Delivers: $3 - $6 Bn ~$13¼ Bn Solar Investment ~$12¼ 40% investment in Clean Energy Transition a PLUS Bn 18% Incentives on PPAs &
Slide 7: Electric System Investment
Electric System Investment . . . Capital Generation Capital Investment (Bn): Plan Clean Energy Generation $ 2.4 Clean Energy $2.4 Bn Electric Utility 5.5 Gas Utility 5.3 AND Total $13.2 Other Fleet ~$¾ Bn System Reliability & Maintenance New Business & Support a ~$3 Bn ~$1¾ Bn Presentation endnotes
Slide 8: Clean and Lean
Clean and Lean . . . Old Utility Model Clean and Lean Big Build Supply Fully utilize Modular Supply assets Retirement Excess supply Big Excess Build supply Demand Modular Actual Modular Demand EE & DR O&M O&M Excess Economic supply Expected Fuel incentives for Fuel Demand demand side Big Bets resour
Slide 9: Declining Exposure to Coal
Declining Exposure to Coal . . . Coal % of Rate Basea Clean Energy Mixb 2016 (Estimated Clean Energy % Adjusted EPS) 20% Classic 7 retirement $3 - $6 Bn Solar Investment PLUS <15% 2023 Incentives on PPAs Karn 1&2 and Demand retirement Response ~12% <10% <10% 2031 Campbell Campbell (4)% 1&2 1&2 2039
Slide 10: Large and Aging Electric Distribution System
Large and Aging Electric Distribution System . . . Largest Relative Offers Significant Distribution System in Country Capex Opportunity a (Distribution Assets Per Customer ) (LVD Line Replacement in Miles) $1.4K ~1,100/yr $1.3K Consumers Energy ~490/yr ~290/yr 2019 2022 Maintenance Level Presentatio
Slide 11: Gas System Investment
Gas System Investment . . . Capital Capital Investment (Bn): Plan #1 Compression & Storage Underground storage ~$¾ Bn Clean Energy Generation $ 2.4 Compressor Electric Utility 5.5 Storage field station Gas Utility 5.3 Total $13.2 City gate Pipelines Medium pressure regulator station ~$1 Bn #5 #5 Dis
Slide 12: Natural Gas is Critical
Natural Gas is Critical . . . Michigan’s Weather and Size… …Make Electrification Challenging a (Population of 10 Coldest States ) CE Electric Peak Capacity ~10 MM Summer Winter Avg. Winter Weathera (Fahrenheit) MI 23° Today 3x annual CA 45° load TX 49° 1 Bcf = ~300 GWh London 37° Consumers Energy 6.
Slide 13: Decarbonization of Gas Infrastructure
Decarbonization of Gas Infrastructure . . . Net Zero Methane by 2030... …with Additional Opportunities • ~250 miles/yr main • Largest LDC underground storage in U.S. replacement (309 bcf) ~$400 MM/yr • 15 gas storage fields, 8 compressor • ~14½K/yr vintage service in leak reduction stations and 167K
Slide 14: Top-Tier Michigan Regulatory Environment
Top-Tier Michigan Regulatory Environment . . . Legislative Strong Top Tier Framework Leadership Regulatory Environmenta Timely investment recovery Michigan − Forward-looking test years 1 7 2013-present − 10-month rate cases Dan Scripps (D), Chair 2 9 Supportive Incentives − Constructive ROEs 3 18 −
Slide 15: 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 ~$19 Bn 2025 MCV contract change $50 MM Customer in
Slide 16: Credit Metrics Maintained
Credit Metrics Maintained . . . Consumers Energy S&P Moody’s Fitch Ratings Drivers Senior Secured A Aa3 A+ • Strong financial Commercial Paper A-2 P-1 F-2 position Outlook Stable Negative Stable • Growing operating cash flow CMS Energy Senior Unsecured BBB Baa1 BBB • Return on regulated investment J
Slide 17: Consistent Growth Through Changing Circumstances
Consistent Growth Through . . . 7% Adjusted EPS CAGR Adjusted EPS +6% to +8% +7% Dividend Weather Recession Recession Help 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 18: CMS Performance
CMS Performance . . . Total Shareholder Returna Adjusted EPSc Performance b Guidance Actual YoY Adj. EPS Growth Dividend Yield ~8½% to 11½% 2020 $2.64 - $2.68 $2.67 +7% 2019 $2.46 - $2.50 $2.49 +7% >10% 6% to 8% 2018 $2.29 - $2.33 $2.33 +7% 2017 $2.13 - $2.17 $2.17 +7% 2016 $1.97 - $2.01 $2.
Slide 19: CMS' Trading Performance
CMS’ Trading Performance . . . Stock Performancea Total Shareowner Returnb 300% CMS CMS UTY UTY 250% S&P S&P 228% 200% 199% 358% 150% 100% 95% 95% 50% 40% 0% -50% '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 3-yr 5-yr 10-yr Presentation endnotes are included after the appendix. . . . has exceeded tho
Slide 20: Appendix
CMS EVERGY > Appendix
Slide 21: Clean Energy Future
Clean Energy Future . . . Elimination of coal More renewable energy Innovative energy solutions Earn incentive Consumers Energy Capacity Mix mechanisms 11% 20% 22% 8% 12% 6% 8% 12% 11% 10% 14% Rate based or 10% earn FCM 28% 56% 56% 20% 42% 10% Today 2030 2040 a Renewables Coal Natural Gas Storage
Slide 22: Endnotes
CMS EVERGY > Endnotes
Slide 23: Presentation Endnotes (pg 1)
Presentation Endnotes (pg 1) a b Slide 3: Excludes seasonal and contract workers Adjusted, (non-GAAP) a b Slide 4: Methane emissions from our natural gas delivery system and carbon emissions company-wide UBS Research, 2020 state rankings and D.C. a b Slide 6: Includes electric clean generation, dist
Slide 24: GAAP Reconciliation
CMS EVERGY > GAAP Reconciliation
Slide 25: 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 12/31/20 12/31/19 12/31/20 12/31/19 Net Income Available to Common Stockholders $ 158 $ 167 $ 755 $ 680 Reconciling items:
Slide 26: 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.