Cms Energy Corporation · NYSE:CMS
Cms Energy — BMO Combined Utility Conference 2013
30 slides from Cms Energy's conference presentation, Dec 3, 2013
Slide 1: CMS Energy BMO Combined Utility Conference, December 4, 2013
Exhibit 99.1 CMSCombined BMO December Cross Gas Consumers ENERGY Winds Utility 4,Smart Energy 2013 Conference Cycle Energy Park PlantProgram
Slide 2: Forward-Looking Statements and Non-GAAP Information
This relevant from STATEMENTS INFORMATION” and could of The comparable CMS adjusted regulatory able 1 the Consumers presentation to presentation time ENERGY Energy cause information estimate legal basis. to items GAAP CMS time provides decisions. Management Energy’s AND the from also is in Energy’s
Slide 3: CMS Energy Strategy: Consistent Performance
CMS Raised Capital Competitive Continuous Base Constructive Fair performance financial Consistent Utility regulation Customer .Safe, 2 . . . and dynamic, rates excellent Energy investment 2013 investment timely value atcost payout guidance, or regulatory Strategy data operations below improvement in
Slide 4: Consistent Results Model
CMS Consistent RESULTS Self-Imposed Sustainable Ten Investment Small, None Capex Catalysts PPA’s Sales .Capacity 3 . . .Year benefits <1% Energy “bet expire >$15 bite -price the $15 Predictable size “Needed Base billion =customers MODEL Limits company” increases 2,000 Billion projects Rates Not MW.<
Slide 5: Catalysts
Catalysts Capex Catalyst PPA’s Credit Sales Capacity ROA Potential Opportunities capital Build base; On Conservative DIG headroom 700 earnings .million 4 . . review .MW provide becomes customer Elimination <or Expire Ratings >investment industrial 1% buy $15 Prices Outcomes capacity ..for . .future
Slide 6: Catalyst: 10-Year Opportunity
CATALYST: 10-Year 2013-2022 Opportunity $15 New PPA ROA $18 .Customer X >3% 5 . . .Billion replacement needed generation customer Plan base not Level Visible, rates return capacity wanted. <2% 10-Year Post-2015 Investment renewables Plan More . . . gas . CMS storage ENERGY More gas conversions Trans
Slide 7: Investment Plan Amount
Investment $1.8 (bils) Amount 1.4 1.6 1.2 1.0 0.8 0.6 0.2 0.4 2 .0 6 .008 . .Maintenance Renewables New Environmental Gas Smart $5 for - 2012 $7 next Generation Energy $8 Supports 2013 tenNew years Electric -Gas 2017 PPA’s Growth Generation: - needed, 2018 Reliability Expire . .- .2022 not . CMS jus
Slide 8: Gas Infrastructure Investment
Gas #4 50,000 1,700 300 3.5% $ (bils) Amount Investment 1.5 2.0 $2.2 2 0 0.5 .1.0 7 .008 2.5 .largest .$1.4 bcf Infrastructure System provides -$2.4 of miles 2012 miles gas allgas gas storage of 2013 of investment utility transmission storage main -. 2017 . .& . in CMS pipe 2018 opportunities. U.S.
Slide 9: Transmission Opportunity
Transmission Exited 2013 Notified Plan .Opportunity 8 . . . better to 2014 transmission file Reliability 2015 for reclassification toOpportunity. our reclassify register 2016 customers. First in 2002 asCorporation and owner .cases . .register CMS /atoperator MPSC ENERGY as of transmission plans andt
Slide 10: Visible MW Capacity Needs
Visible 10,000 MW 2013 Capacity Classic Palisades MCV 2016 2017 2022 2025 CE Smart Total .Net 9 . . .Portfolio Peak PPA 2015 Classic Gas Palisades MCV Peak PPA Energy, 9,000 Investment: 7 Shortfall Demand Suspended replacements PPA plant Termination Demand 2017 PPA 78,000 Termination EO, coal PPA to
Slide 11: Catalyst: Power Benefits
CATALYST: Power Benefits (bils) $1.2 2021 Palisades $1.0 MCV $0.6 Replace Opportunities .Provides 10 . . . will 1.0 $0.8 $0.4 2022 expiration Supply PPA 0.8 incremental provide MCV expiration $0.6 $0.3 2023 0.6 contracts Expiring Cost $0.4 $0.3 All 0.4 2024 investment Other 0.2 rate 2025 PPAs. with
Slide 12: Catalyst: S&P Scale
CATALYST: S&P Scale A A- BBB+ BBB CMS BBB- BB+ BB BB- B+ B B- Review Stable Outlook 2002 Prior Present Impact Positive 2013 Financing (mils) Revolvers Total Annual .Future 11 . A2 B2 .B3 A3 B1 .Ba2 Ba3 under /Ba1 Savings Baa2 Company 2013 Unsecured Baa3 Fitch Consumers Baa1 by New Savings for2017 $1
Slide 13: Catalyst: Examples Electric Sales Growth
CATALYST: Examples Electric Eco-Bio Betz Enbridge Dart Magna-Cosma Norplas Secant MACI Economic Grand Unemployment GDP Population Industrial CMS 6% 2008-2009 2010-2012 .2013-17 12 . . .2% in Container Industries (real) U.S. Rapids 67Consumers <1% Gas 5Plastics Plan MW 28 Sales MW of Indicators Utili
Slide 14: Catalyst: Today and Future Capacity Price
CATALYST: Today Future +$50 $5 Capacity $0.50 .($1 13 . .$35 .kw could +$30 $4.50 (mils) Scenarios $55 per price add month) $7.50 Capacity value (mils) toPrice the 700 Increases. MW “DIG”. . . CMS plant.ENERGY
Slide 15: Catalyst: Customers Could Shift
CATALYST: 310 1.8 Customers $150 Could rates customers 700 capacity Creates opportunities .in 14 . .generation .Million Alternate MW elimination by million lower additional 10% needed ofby =Consumers additional industrial 99.98% cost Retail or to 4% Electric all invest allows shift Open 0.02% Energy
Slide 16: Cost Trend and Inflation Plan
Trend Percent P 0 Cost -21% Inflation 25% Accelerated -9% Reductions New 2006 -25% .Lines 15 .rior . . ..Plan Plan 2007 smoothed of accelerated; Change O&M -15% 2008 -6% Cost Cost for 2009 funding illustrative Savings. 2010 investment 2011 . purposes . . 2012 CMS2013 and ENERGY reducing 2014 2015 ri
Slide 17: Continuous Cost Savings and Performance
Continuous Less Hires Consumers Inflation Performance 2017 How Fuel 2016 Total Benefits 2002-2012 (mils) 2013 Future .Opportunity: 16 . . . aMix mix Expensive -Add vs Retire EGWP, -200 &way Two Savings savings 2012 Lower 75 Future (100) $25 MW GCC -Actions of Smart Examples Cost Coal 280 Excellence
Slide 18: CMS Adjusted EPS Guidance
CMS Adjusted +13¢ (non-GAAP) Guidance Summer Warm .Winter -13¢ 2012 17 . . . deliver Hot 2012 Mindset. Cost Saving EPS +7%for. customers . . CMS ENERGY AND investors.
Slide 19: CMS Adjusted EPS 2013 Guidance
CMS Adjusted (non-GAAP) 2013 Summer Cost 2012 Guidance Warm .Winter -13¢ 18 . . . deliver Savings +13¢ Hot Cold 2012 Mindset. Cost & EPS Saving Reinvested +7% 2012 for earlier . customers . . CMS ENERGY AND investors.
Slide 20: CMS Mindset: 10-Year Adjusted EPS and Dividend Payout
CMS Mindset.... 10-Year 7% Peers $1.78 Int’l $0.81 $0.90 27% 14% $0.96 5%-7% $1.02 6% $1.08 $1.21b $1.26 $1.45 $1.36 $1.55 $1.73 2003 80% 39% 32% $0.84 Dividend Future 25% Adjusted ....drives 20 19 36 CAGR Sale 30% 2004 ENERGY 4% 50Actual consistent 66 EPS Payout 40% 2005 84(non-GAAP) 49% 96 $1.65-$
Slide 21: Appendix
APPENDIX
Slide 22: Need for Capacity
Need CMS Capacity Investors Customers Seek Unaffected: Flexible Build Thetford Air CON July April Alternative RFP .September Today 21 . . .permit 12 26 issued purchase best New 8granted filed ENERGY or 10-year, buy Build needed deal Gas 30 – Asset ifPlant.... better $15 Purchase billion for customer
Slide 23: Michigan Economic Performance
Michigan Gross WA MN 5th OR ID SD WI ME 11% (3.5) IA MI NY NE 6.6 NV OH 8.7 3.1 VA 1.4 NC AZ SC TX FL 6.9 Third U.S. Second Lowest .Source: 22 . .6.6 2.1 HI 11.0 MS 7.9 6.2 1.0 OK .1.2 7.5 5.9 Best 4.7 7.4 NM LA 13.8 DC 8.2 UT 5.9 8.1 2.7 8.2 among Total WY quintile Domestic AK IL KS 2.4 Fourth DE 3
Slide 24: Continuous Cost Reduction
Continuous CMS 2012 Peer -0.4% Source: How 1,000 $60k 600 Each $100k 7,200 7,600 Headcount 2010 .People 23 . . . Average .–2012 over ENERGY Each part Consumers One Productivity SNL2006 ofExample Cost CMS data upElectric 6% Reduction. service mindset. = $64 Non-fuel Million . . . O&M Cost
Slide 25: Debt Maturity Schedule
MATURITY Reflects Maturity F/V SHORT-TERM $172,498 LONG-TERM $425,000 $530,000 $625,000 $747,700 V F $6,935,198 $4,435,000 Various Discount Status 24SS UU05/15/43 10/15/15 08/15/16 02/15/17 10/15/17 03/01/18 09/15/18 03/15/19 09/15/19 04/15/20 10/15/20 05/15/22 09/01/22 08/15/23 12/16/24 12/15/27 09
Slide 26: Operating Cash Flow and Credit Ratings
Operating CMS Gross (bils) Amount Up $2.5 1.5 Working a1.0 Cash 2012 NOLs .$0.7 25 .Non-GAAP . $0.5 Interest .0.5 2.0 $0.7 credit 2013 flow ENERGY operating &Investment Billion $1.6 Credits capital $0.4 Cash before 2014 ratings $1.3 $1.7 $0.5 Flow cash and $1.4 2015 dividend upgraded. $1.8 .0$0.3 ta
Slide 27: Capital Expenditures
Capital 2013 (mils) Renewables New Environmental Gas Smart Electric Maintenance Total $7 26 Billion 172 Generation 2014 $Energy (mils) 1,452 Expenditures Reliability 244 $8 2015 $(mils) 254 601 Billion $69 85 314 1,664 2016 68 82 214 $636 143 164 (mils) 239 189 52 CMS $113 661 2017 69 1,661 110 $169
Slide 28: GAAP Reconciliation
GAAP RECONCILIATION
Slide 29: CMS Reported to Adjusted Earnings Per Share
CMS 2003 Reported After-tax Electric Enterprises Corporate Discontinued Asset Cumulative Mark-to-market Adjusted * (a) 28Less $1.25 2004 ENERGY impairment than and excluding earnings items: interest 2005 0.74 $500 accounting gas operations CORPORATION utility impacts 0.62 2006 thousand charges, and
Slide 30: CMS Cash Reconciliation
CMScash Reconciliation 2012 (mils) (unaudited) Consumers Enterprises Gross Other Net 29 2013 Energy operating Operating provided 2014 Project Operating ofactivities 2015 Cash Gross by Cash operating Income 2016 Flow Operating Flows including 2017 $1,652 +17 activities Depreciation 2018 Cash 20 $1,74