Cms Energy Corporation · NYSE:CMS
Cms Energy — Investor Presentation (July 2015)
27 slides from Cms Energy's investor presentation, Jul 29, 2015
Slide 1: CMS Energy Investor Handout, July 29, 2015
Exhibit 99.1 Hilliard Ludington Fourth Ray #1 Cross #2 LDC inCompressor renewable Winds largest Lyons in Pumped gas âEnergy in July storage sales the Station Storage 29, world in Park 2015 the Great Lakes area
Slide 2: Forward-Looking Statements and Non-GAAP Information
This Securities statements Forward-looking INFORMATION” December STATEMENTS results events The comparable CMS adjusted regulatory Investors of 1 distribution. presentation presentation Energy or tobasis. circumstances differ and Exchange 31, items should GAAP provides others 2014 Management material
Slide 3: CMS Energy Overview
CMS Generating #4 Overview #383 #2 Our Electric .1.8 Headquarters 2 . .Investor Combination .million Service recently Fortune Energy service Utility electric facility in Territory named ..500 Michigan .territory utility . .company customers “top (electric Natural pick”8,900 by and gas Fortune. gas)
Slide 4: Electric Utility Customers and Gross Margin
Electric 2014 Top (2014 Hemlock Nexteer Percentage Residential 33% Commercial Auto 4% Other $2.3 8% .Industrial 3 . . .Ten Billion “autos” Electric 5% Ranked Customer Automotive Customers Semiconductor of 50% only Gross electric by Deliveries) 5% Base Margin Corporation of gross Diversified gross Ge
Slide 5: EPS and Dividend Growth Track Record
Our EPS 10-Year $ $1.89 Peers $1.77 b Int’l $0.84 $0.81 $0.90 $0.96 $1.08 $1.21 $1.02 7% 5%—7% $1.16 96¢ 6% 66¢ 14% 32% 80% 20¢ 36¢ 2003 .Dividend 4 .$1.26 1.86 . .CAGR 84¢ 50¢ Mindset Sale aprovides 27% 39% 2004 4% $1.66 $1.08 Dividend Actual Payout 2005 $1.55 . consistent . . 2006 .0% $1.36 25% 20
Slide 6: Growing Dividend with Faster Growth than Peers
Growing CMS “Average” +5 +7 12 Amount + E 0 +3 .+4 5 .PS 79.% . Dividend with +4 Energy +11 +8 Faster ten Utility years TSR thanworth Peersof. .sustainable, .. organic growth.
Slide 7: Total Shareowner Return
Total S&P -500 0 100 200 300 400 2003 .Source: 6100 . . .% CMS 500 2004 Shareowner Bloomberg Utilities outperforms 2005 2006 Return +188% 2007 peers. .S&P . 2008 . . 500 2009 +141% 2010 2011 2012 2013 2014 July 22, 2015
Slide 8: Investment Business Model
CMS Invest Investment 5% Results Cost Reduce Keep .Customer 7 . . .tosimple, Reductions prices Energy 7% $15.5 costs annual low, perhaps billion Business ~2%increase EPS per over unique. and year Model next satisfaction dividend ten . . . years . & reliability
Slide 9: Electric Capex Opportunity Criteria
Electric Capex Add Reduce Balance Mandated No Opportunity Organic $ $15.5 $10.7 .2005 8 .20 . “big . customer +—Criteria with Up O&M Gas bets” growth fuel 2014 more by 45%+30% regulations 2015 value opportunity .+45% . . .— 2024and Opportunity no “big bets” over ten years!
Slide 10: Investment Catch-up Opportunity versus Peers
Investment Amount One > “Catch-up” year Capex 2005—2014 CMS Peers .a2003 9 .Based $1.5 . . of creating 2004 Energy 10% 11as per first on (bils) 15 a 16% 2005 Percent December “Catch-up” with 2015—2024 an Peers $1.8 opportunity 2006 a ten of Market 31, 2007 year . . 2014 . .plan 2008 for Cap informat
Slide 11: Customer-Driven Investment Opportunities
Customer Clean $1.5 Environmental Renewable .Ludington 10 . . . remains Billion Power Driven Pumped energy $2.2 Capacity small Jackson Billion Investment Gas and Storage Reliability expansion incremental, gas $2.4 plant New .Billion . . .gas Consumers Infrastructure Gaswith capacity $4.1 storage no
Slide 12: O&M Cost Reductions Offset Inflation
O&M 2006 Down $1.1 Inflation ?2% Coal Smarter “Pole Productivity/Smart .Productivity/Attrition 11 . . . provide bil ?2% to 2014 Top” Cost 7% 10% Gas $1.0 benefit Inflation 2018 Hardening Reductions or Switching more bil 2%/yr plans $0.9 “headroom” Energy bil(Jackson) (Zeeland) .... for more capital
Slide 13: Electric O&M Productivity and Savings
Electric (2014 O&M Source: Peer Productivity Attrition Consumers—2.7% “Pole Smart Eliminate 2014 & (mils) — +50 +10 $— Net Percent -6% FAST .2% 12 . .2015 35 530 15 .Savings 35 60 +-10% Average — better 2014 Top” — over START! 50 Meters (mils) Cost $Savings 25 2018 Annual SNL, — 50 30 20 —100 Waste
Slide 14: Electric Rates Compared to National and Midwest
Electric 20 Worse National 4% Residential Flat could Better eliminate Fuel -20 2013 Rates .Industrial 13 . .% .-30 affordable (17)% 2014 30 (8)% & Rates (13)% Worse Customer Act % Avg gap Rates rates 2015 26% Bills bills & 169 (13)% Midwest Fuel improving for well 2016 Prices residential Rates Bette
Slide 15: Customer Satisfaction Rankings
Customer 1st #3 Gas Electric 2nd 3rd #6 #9 4th Present 2010 .Residential 14 . . Quartile .Quartile Quartile continues 2012 Present Satisfaction 2014 Business #4 4th 3rd 2nd to 1st Quartile Quartile Rank Quartile improve Quartile Residential .2016 . . .rapidly. 2010Business 2012 2014 Rank 2016
Slide 16: Electric and Gas Business Growth Examples
Our Examples Electric Bayer Announcement One Durolast Dicastal Continental GM Plasan Magna-Cosma Post WKW Grand .Annualized 15 . . . Service Assembly of MSU Grand CropScience Rapids MACI Enbridge the Denso Gas Roofing of FRIB world’s Rapids numbers Dairy Territory Combination New Brembo DartBusiness
Slide 17: Constructive Regulation and Commission
Constructive Commission John Sally Norm Term Newly 1 .Barclays 16 .2. .3is Quackenbush 4Talberg Ends: Saari appointed! supported 5 Research, 6 8July (R) 20 Tier Regulation (I)9Term 2,by 16 2021 (R), 2015 State Michigal a quality Ends: Chairman .state Ranking . . .July ranked Commission rankings 2,Te
Slide 18: Michigan Energy Law
Michigan Sen. Gov. Rep. Renewables Efficiency Access” Open “Retail 3-year 1%/yr Keep 5-year End Repeal .IRP 17 . . .process “ROA” Nofs builds Nesbitt Snyder “cap” waste capacity present Energy off Fully reduction the program requirement Law regu;ated 2008.through .law, . . “Fair “one adding 2018 way
Slide 19: CMS Energy Helps Through Recession and Weather
CMS 7% +5% Help Recession We 2003 Cold winter Governor .Commission 18 . . .work CAGR consistent to Hurt Mild 2004 Energy summer +7% with (D) Hot 2005 (D) /year ..Governor anyone Warm .growth summer .2006 Commission . Mild 2007 and through winter (R)in Cold 2008 any New summer recession, Summer- cond
Slide 20: Analyst Ratings and Top Utility Pick
Analyst Top CMS Ratings Buy Hold Sell Total Fortune top 500 June “Analyst for management growth years, .average -Fortune 19 . . example, .utility stock Pick — 9by 26, 716 Energy Peers a56% 44 — of nine ‘higher Percent utility.’” Magazine Recommendations 100% 2015 David to 5% and 81557 7buy. analysts
Slide 21: Wrap-up
Wrap-up Sustainable Opportunities Improves Top-tier Supporting .Ludington 20 . . . more regulation: .customer ..than Pumped economic business . .toa invest: decade satisfaction Storage model: growth of consistent Gas Predictable &Infrastructure reliability; growth futuregrows and Investing growth fu
Slide 22: Appendix
Appendix
Slide 23: Generation Capacity Mix Diversity
Capacity 9% 6% 34% Nuclear 11% Oil Renewables 3% 24% Storage Gas Pumped 2005 .31% 22 . . .6% 8% Coal 3% Storage evolving 12%8% Coal 11% Gas Storage Coal Diversity 37% 32% Purchases Gas Nuclear 41% Renewables to Oil cleaner 2014 10% . .8% . .6% 2017 generation while becoming more cost competitive.
Slide 24: Operating Cash Flow Growth
Operating Amount (bils) Billion up $ $1.8 2.1 1.6 0.6 1.1 Cash 0.1 (0.9) (0.4) 2014 Interest, $2.6 $2.3 $2.1 .NOLs 23 .2.6 .$0.1 $1.55 .Investment $1.9 up a2015 $2.5 flow Gross &Non-GAAP billion $0.6 working Up Credits Cash before 2016 operating $0.6 billion per Flow 2017 $0.7 capital dividend year
Slide 25: GAAP Reconciliation
GAAP Reconciliation
Slide 26: CMS Energy Earnings Reconciliation by Year
CMS Earnings 2003 Reported After-tax Electric Enterprises Corporate Discontinued Asset Cumulative Mark-to-market Adjusted * (a) 25Less $1.25 2004 ENERGY impairment than and Per excluding earnings items: interest 2005 0.74 $500 accounting gas Share operations CORPORATION utility impacts 0.62 2006 tho
Slide 27: CMS Cash Flow Reconciliation
CMScash Reconciliation 2014 (mils) (unaudited) Consumers Enterprises Gross Other working Net 26 2015 Energy operating Operating capital provided 2016 Project Operating of(386) activities 2017 Cash Gross by Cash operating (390) Income 2018 Flow Operating Flows including 2019 (567) $ 1,833 +20 activit