Cms Energy Corporation · NYSE:CMS
Cms Energy — Investor Presentation (October 2013)
32 slides from Cms Energy's investor presentation, Oct 2, 2013
Slide 1: Investor Meetings October 2-3, 2013
Exhibit 99.1 Investor October Cross Gas Consumers Combined Winds® 2-3, Meetings Smart 2013 Energy Cycle Energy Plant Park Program
Slide 2: Forward-looking statements and information
This presentation relevant from STATEMENTS 10-Qs. important obligation Energy’s website forward-looking operations, periods. 1 time CMS at Because legal results factors to www.cmsenergy.com.CMS asset time Energy’s update decisions. AND of guidance sales, the that is inoperations made any CMS company
Slide 3: EPS and dividend growth
EPS Dividend B Int’l $0.84 2003 changes 7% 66¢ 39% 0 2006 $1.21 5% 6% 32% Sale a50¢ 2004 and 2007 $1.55 $1.02 $1.08 related 36¢ $0.81 7% Dividend 2005 2008 CAGR 80% $1.36 5% $0.96 to2006 14% convertible 2009 20¢ $1.45 Growth $0.90 2007 96 2010 84 $1.26 2008 EPS 27% 2011 debt2009 and 20122010 restric
Slide 4: CMS Energy consistent, predictable model
CMS Rates Consistent RESULTS Self-Imposed Base O&M Credit 3 Energy Down Rating Predictable < 2% 2% MODEL Limits Upgrade Next Inflation Five .Growth . . . YearsInvestment Self-funded working Ten Year—$15 well. Billion “Needed Not Wanted” Catalysts Constructive Regulation Visible Capital Investment Mi
Slide 5: Model delivers above-average shareowner return
Model Above Future Attractive 62% EPS Driven Shareowner EPSa 7% 6% 4 5%-7% 5% growth payout Growth Average Return Delivers by 4%dividend $7 4% return ratio rate billion vsCMS Return . 5-7 Peers . .9%-11% yield . investment Peers 4%CMSinPeers regulated Ten-Year Utility Growth over next Future fivea A
Slide 6: Consumers Energy overview
Consumers Lake Territory Cross Fourth Overview 1.8 8,600 312 .Premium 5 . . .million TBtu one Winds MW Winds® largest of regulatory ofof electric Energy largest ® gas owned combination Energy storage investors and . environment .and . Park .1.7 capacity purchased million utility and employers ingas
Slide 7: Near-term catalysts
Near-Term 1. Catalysts 3. 6. Governor Progress Ten-year Michigan Leader Parent .upgraded 6 . .Growth Constructive Michigan . progress upgraded invisibility as cost supportive GDP self-funded Catalysts well economy made, control; up regulation to NOLs 11% — investment more .of $15 4. .base .2010 2008
Slide 8: Catalyst 1: Constructive regulation
CATALYST John Commission Sally Greg “Appendix 2013 strong 7 Quackenbush White Jan-Apr Talberg law on A” (I) #1 (I) the Seven Timeline Term –Term Constructive books (R), public Ends: Ends: Chairman supported July forums, July Regulation 2,2,Term 2015 by Company 2019 a quality Ends: . . . submitted .J
Slide 9: Catalyst 2: Visible capital investment
CATALYST Major Karn/Weadock Environmental Ludington Cross Consumers Campbell Thetford Reliability (bils) <2% 8 drives $7.3 Winds® Projects Natural Generating $7.0 Pumped &Smart EPS #2 Automation Capacity Energy Compliance, Generating New –and Gas-Fired Capital Energy Storage Gas cash Plant, Park Inv
Slide 10: Catalyst 3: Michigan economy
CATALYST Gross WA 8.1 6.7 OR 13.8 MI (3.5) 11.0 IL 5.9 UT 2.9 4.3 8.7 CA 5.0 4.7 AZ 4.6 0.7 AL TX 13.0 HI 6.9 Third U.S. Lowest .Source: 9 . ..PA AK AR NY 31.0 MN IN KS 6.2 KY 6.1 8.4 4.2 MS 1.2 3.2 CO NM LA 8.6 WI .5th 6.6 VT 4.6 Total NE among quintile NV Domestic OH 3.6 MO 7.5 NC SC Fourth 2.4 1.
Slide 11: Catalyst 4: Strong customer focus and cost performance
CATALYST Electric Annual Peer -0.5% Source: Examples 9 outstanding 10Three Pension Health Labor SAP Productivity Average Consumers efficiencies Change SNL voluntary Non-fuel agreements care prefunding ofcost #4 Cost data up sharing up –2012 performance 7% Strong 41% O&M service Reductions separation
Slide 12: O&M cost trend and plan
TrendPlan Percent -21% Inflation Prior Accelerated New Reductions -15% 2006 Lines accelerated; 11 Plan 2007 Cost -25% smoothed ofChange O&M -9% 2008 0funding Cost Cost 25% for 2009 -6%illustrative investment Savings 2010 2011 . .purposes .and .2012 reducing 2013 2014 risk.2015
Slide 13: Electric prices and residential bill as percent of income
Electric 7% National UT Source: MS 12 CO 2011CA eia.gov Prices average Residential WY &MA 3.7% census.gov, WA Bill MN as Percent DC disposable RIof NHDisposable NJ income IL ME 70% Income AKofNM household VT WI NDincome IA ID competitive NE MT MD nationally MI SD ORand NY improving. VA CT NV KS IN D
Slide 14: Strong cost reductions reinvested
Strong Average 7% 2% Reinvested 2006-2012 Examples Amount Western Workforce Future Classic Productivity Benefit Consumers holds 13 Avg. Inflation down (est. Customer 7plans coal Past O&M Utilities mothballed of restructuring 2012 -6% -2% Smart annual rates 50 10 2% Cost $250 (annual 30Annual -6% -1%
Slide 15: Cost reductions and utilities average
Strong Average 2% Utilities -0.5% Reinvested 2006-2012 -8% Examples Annual Classic Productivity Benefit Consumers Additional Retiree Tax Cross Low has 14 Inflation been benefits cost Winds® -2% Customer health 7plans Future O&M enhanced mothballed financing ofcost 2012 -6% -2% Smart (COR) 10 2% Cost
Slide 16: Structural benefit cost changes versus peers
Structural Peers -2% Source: CMS Benefit 2005 Timeline 2006 2007 2008 2009 2010 2011 2012 2013 15 2013 –over 6 Union Increased Healthy Preferred New Retiree +5% Costs Changes SNL, —6% Benefit 2009 salaried union -4% Form employees, prescription health living CAGR 6% and cost -2 Changes hires 12012 -
Slide 17: Cost savings and rate case impact
New Gas $49 aTax/Other Electric ?$100 Cross fund 16Until Benefits Rate elimination Cost Winds® Benefits 2015 Rate Case Savings $0test Case 2013 Avoideda $0 Tax of year 2014 Avoideda .2014 next . . . gas and electric cases!
Slide 18: Catalyst 5: Credit rating upgrade
CATALYST Scale Fitch A Consumers BBB- BB BB- B Outlook Impact Financing Total 17A2 B2Ba2 Ba3 Company 2013 Moody’s B- S&P Baa3 New Present Stable B3 Prior $1 /$2 A- CMS #5– Cost Revolvers Annual A3 B+ S&P Stable Savings Credit Savings BB+ Secured B1Moody’s 2002 Savings Positive Ba1 Rating 1(mils) 201
Slide 19: Gross operating cash flow and investment
Operating Amount Gross up $1.7 $1.8 1.5 $1.3 Base 0.5 Cash 2011 NOLs 18 $0.1 Interest Investment $1.6 and Investment 2012 flow operating &billion (bils) taxes Credits Cash before 2013E $1.5 $2.5 1.0 per choices Flow cash king $0.8 dividend 2014E year flowa capital Growth $0.7 02.0 2015E $0.7 (0.5) $
Slide 20: Catalyst 6: Self-funded equity and NOLs
CATALYST Net $0.7 $0.4 2011 Gross a“Block” 19 self-funded. Maintain NOLs $0.7 $0.4 2012 NOLs Equity $0.2 and 2013E existing #6 (bils) $0.1 Tax –a 0EPS 2014E $1.5 Credits 0DRIP 0Growth 0$1.2 02015E and 0$0.8 0$1.1 continuous . .2016E .$0.3 . $0.2 2017E equity $0 $0program
Slide 21: Five key takeaways and EPS target
Five EPS 7% +12% +11% Target a2003 Growth Dividend Gross Ten-year Constructive Targeting 20 Adjusted +7% aKey 2004 Actual operating +4% Growth 5%—7% 6%—8% 5%-7% 5% investment Takeaways growth 11th EPS 2005 +12% +7% regulatory =$1.70 consecutive 7% (non-GAAP) real cash Actual +7% 2006 in+8% line grow
Slide 22: Appendix
APPENDIX
Slide 23: Capital investment plan opportunity
Capital 2013 Faster Smart < Pole More Customer at 22 $7.0 sustainable replacements –gas Energy Consumers Billion 2017 Investment generation base Plan customer Pipe rates Opportunity .replacements <2% . . .“base >4%rate” Level × $10increases. Billion
Slide 24: Installed capacity and reserve margin
Installed Capacity MW 10,500 8,500 7,500 Purchases 2013 to 23 meet New 2014 Market 6,500 9,500 reserve Capacity Gas 2015 5,500 Plant requirements. 2016 Excl 4,500 Peak 2017 Classic Demand 20187 Classic with Reserve 7 Margin
Slide 25: New gas plant milestones
New25 CON Expected Reliability July support Michigan 24 Gas filed customers future Plant decision toJuly toprovide be Necessity CON 12th AirCapacity 2012 Permit Contracts Filed 2013 energy .maintained to . .2014 Certificate .toneeds Proceed 2015 Investment for2016 needed Operation Submitted 2017 ofi
Slide 26: Consumers electric financial statistics
Consumers Financial Years Miscellaneous Fuel Purchased DEPRECIATION OPERATING NET DELIVERIES Wholesale Intersystem AVERAGE Commercials ELECTRIC Residential Commercial Industrial Retail Other Total AUTHORIZED EARNED RATE COOLING Normal Actual Warmer Increase Electric HEADCOUNT 1 CMSfor 2 25 INCOME re
Slide 27: Consumers electric generation and power supply
Consumers Financial Years Weighted FUEL Nox Gas Purchased POWER Non-utility Coal Oil Combustion Nuclear Renew Pumped NET P&I Total Peak Reserve Net Load 1 2 3 CMS 26 19.08 61.5 and pumped interchange demonstrated 3.16 13.6 3,003 power allow 2.98 84.9 14,027 2,846 DEMONSTRATED load 7owned net factor
Slide 28: Consumers gas financial statistics
Consumers Financial Years Miscellaneous Cost DEPRECIATION, OPERATING NET SALES Other Residential Commercial Industrial Transportation GAS Total WORKING AVERAGE AUTHORIZED EARNED RATE HEATING Normal Actual Colder Increase Gas 1 3 deliveries 2 4 utility transportation Cost Customer of INCOME REVENUE C
Slide 29: CMS Enterprises
CMS Enterprises As Independent Primary Capacity Plant Craven DIG Filer Genesee City 27 www.cmsenergy.com ofGenesee Natural City Fuel Energy December Wood Ownership Wood Coal Interest &Power Gas EnerBank 50% EnerBank 5031, 100 40 73 Capacity 50 Production Gross 2012 1996 1990 710 1990 HQ2001 In-Servi
Slide 30: GAAP Reconciliation
GAAP Reconciliation
Slide 31: Earnings per share by year GAAP reconciliation
CMS ENERGY CORPORATION Earnings Per Share By Year GAAP Reconciliation (Unaudited) 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Reported earnings (loss) per share - GAAP ($ 0.30) $ 0.64 ($ 0.44) ($ 0.41) ($ 1.02) $ 1.20 $ 0.91 $ 1.28 $ 1.58 $ 1.42 After-tax items: Electric and gas utility 0.21 (
Slide 32: Reconciliation of gross operating cash flow to GAAP
CMS Energy Reconciliation of Gross Operating Cash Flow to GAAP Operating Activities (unaudited) (mils) 2011 2012 2013 2014 2015 2016 2017 Consumers Operating Income + Depreciation & Amortization $1,527 $1,635 $1,735 $1,821 $1,948 $2,011 $2,113 Enterprises Project Cash Flows 24 17 20 29 37 44 56 Gros