Cms Energy Corporation · NYSE:CMS
Cms Energy — Investor Presentation (November 2023)
24 slides from Cms Energy's investor presentation, Nov 10, 2023
Slide 1: Leading the Clean Energy Transformation
Leading the CLEAN ENERGY TRANSFORMATION Investor Meetings November 2023
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: Top of Mind
TOP OF MIND
Slide 4: Top of Mind
Top of Mind • Confidence in 2023 and 2024 guidance • Electric reliability roadmap, $3B opportunity • Sustained cost reductions through CE Way and VSP • Pending electric rate case (IRM and underground pilot) • Limited Parent financing needs with 2024 pre-funded • Recently passed Michigan energy legis
Slide 5: New Michigan Energy Legislation
New Michigan Energy Legislation . . . Plan Opportunities Key Items 2016 2023 Benefits • Clean Energy Standard ✓Maintains customer 100% by 2040 (incl. renewables, gas w/ CCS, or nuclear) NA (80% by 2035) affordability • Next Integrated Resource filing by 2027 15% by 2021 60% by 2035 ✓Ensures continue
Slide 6: Electric Reliability Roadmap
Electric Reliability Roadmap . . . Capital Investment Opportunity Actions & Customer Benefits (5-year) Actions: ~$7B • Vegetation management to a 7-year trim cycle +$3B • Up to 400 miles of annual undergrounding • Replace >20K poles per year • Rebuild ~10% of substations within 5 years ~$4B • Update
Slide 7: Financial Results & Outlook
Financial Results & Outlook . . . 2023 Results Amount Commentary Q3 Adjusted EPS 61¢ On track; managing unfavorable weather & YTD Adjusted EPS $2.06 severe storms 2023 Outlook Adjusted EPS Guidance $3.06 – $3.12 Toward the high end Annual DPS $1.95 Up 11¢ 2024 Outlook Adjusted EPS Guidance $3.27 – $
Slide 8: 2023 Planned Financings
2023 Planned Financings . . . Financings Existing Facilities Plan YTD a ($M) ($M) ~$1.7B of net liquidity Consumers Energy: First Mortgage Bonds $1,970 $2,025 ✓ $250M (Nov-2024) Securitization 688 -- CMS Energy: Contracted Equity (issued) 444 -- $1,100M Convertible Debt -- 800 ✓ Funds 2024 financing
Slide 9: Investment Thesis
INVESTMENT THESIS
Slide 10: Investment Thesis
Investment Thesis . . . Industry-leading net zero commitments Clean Energy Leader Strong Cash Flow Infrastructure Excellence through the & Balance Sheet Renewal Top-tier regulatory jurisdictiona Diversified Service Constructive Territory Legislation Affordable Prices Premium total shareholder return
Slide 11: Executing on the Clean Energy Transformation
Executing on the Clean Energy Transformation . . . Net Zero Targets Proof Points ✓ Retired Karn 1 & 2 coal units, 515 MW 2030 Today ✓ Acquired existing ~1.2 GW CCGT a Net zero methane emissions for our ✓ Adding 341 MW to VGP Program gas delivery system ✓ Approved for ~$11M in low-carbon energy infra
Slide 12: Our Clean Energy Transformation
Our Clean Energy Transformation . . . Exit Coal in 2025… …While Ensuring Reliability a (Coal % PP&E ) <20% • Purchase ~1.2 GW of existing gas Classic 7 retirement and capacity (Covert) Karn 1&2 retirement • Maintain ~1.2 GW of peaking capacity Campbell 1–3 through 2031 (Karn 3&4) retirement; <10% Re
Slide 13: Infrastructure Renewal is Necessary
Infrastructure Renewal is Necessary . . . Electric distribution system is older than Exiting coal in 2025 and peers adding 8 GW of solar by 2040 Goal to improve ≥1K miles annually 25 years of main replacement through our >$500M of vegetation management spend over Enhanced Infrastructure 5 years to i
Slide 14: Michigan's Strong Regulatory Environment
Michigan’s Strong Regulatory Environment . . . 2022 2023 Supportive Energy Policy Integrated Resource Plan (IRP) • Timely recovery of investments ✓ Forward-looking test years ✓ 10-month rate cases ✓Jun. 23 :rd Settlement Approved ✓ Earn authorized ROEs U-21090 ✓ Monthly fuel adjustment trackers (PSC
Slide 15: De-risking Inflationary Pressures
De-risking Inflationary Pressures . . . Near-term Risk Mitigation Episodic Cost Savings Global Risks Countermeasures Year Event Savings ✓ Executed 5-yr union contracts in 2020 (>40% unionized) 2022 Palisades retirement >$90M Labor ✓ ~95% non-union retention ratea 2023 Karn 1&2 coal unit retirementsb
Slide 16: Expansive Economic Development Efforts
Expansive Economic Development Efforts . . . Electric Gas Combined 2022 New Load 2023 New Load Attracted Gotion >1,150 MW Global EV Battery Manufacturer of new or expanding load ~$2,400M investment since 2015a >2,000 jobs FlavorSum Fastest-Growing North Hemlock Semiconductor American Flavor Company
Slide 17: Strong Balance Sheet
Strong Balance Sheet . . . Consumers Energy S&P Moody’s Fitch Key Strengths Senior Secured A A1 A+ ✓ Forward-looking recovery ✓ Constructive rate construct Commercial Paper A-2 P-2 F-2 ✓ Strong operating cash flow Outlook Stable Stable Stable generation CMS Energy Senior Unsecured BBB Baa2 BBB ✓ 100
Slide 18: Industry-Leading Financial Performance
Industry-Leading Financial Performance . . . Adjusted EPSa +6% to +8% Dividend Weather Help Recession Recession Recession / Hurt Pandemic 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023+ Cold Mild Hot Warm Mild Cold Summer- Hot Hot Warm Mild P
Slide 19: Appendix
Appendix 19 19
Slide 20: 2023 Adjusted EPS
2023 Adjusted EPS . . . First Nine Months Three Months To-Go (23)¢ 40¢ – 46¢ 23¢ – 29¢ $3.06 – $3.12 $2.89 17¢ 20¢ 27¢ Flat Flat (49)¢ (21)¢ Key Drivers ✓ Absence of 2022 voluntary refund et al. YTD EPS Results YTD ✓ NorthStar financial 2022 2023 YTD performance on $2.29 Reported EPS $2.27 $1.96 tra
Slide 21: Endnotes
Endnotes “cus evens?
Slide 22: Presentation Endnotes
Presentation Endnotes Slide 6: a134 minutes for IEEE benchmark year 2023 results for 2022 data in 2029 Slide 8: a$1,538M in unreserved revolvers + $118M of unrestricted cash Slide 10: aRRA state regulatory energy rankings, May 2023. Regulatory Research Associates, a group within S&P Global Commodity
Slide 23: GAAP Reconciliation
CMS Energy provides historical financial results on both a reported (GAAP) and adjusted (non-GAAP) basis and provides forward-looking guidance on an adjusted basis. During an oral presentation, references to “earnings” are on an adjusted basis. All references to net income refer to net income availa
Slide 24: 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 Nine Months Ended 9/30/23 9/30/22 9/30/23 9/30/22 Electric Utility Reported net income per share $ 0.65 $ 0.67 $ 1.39 $ 1.73 Reconciling items: O