Cms Energy Corporation · NYSE:CMS
Cms Energy — Investor Presentation (March 2009)
27 slides from Cms Energy's investor presentation, Mar 10, 2009
Slide 1: Growing Forward Investor Meeting March 2009
Growing Forward Investor Meeting March 2009 Thomas J. Webb Executive Vice President and Chief Financial Officer
Slide 2: Forward-looking statements
1 This presentation contains "forward-looking statements" as defined in Rule 3b-6 of the Securities Exchange Act of 1934, as amended, Rule 175 of the Securities Act of 1933, as amended, and relevant legal decisions. The forward-looking statements are subject to risks and uncertainties. They should b
Slide 3: 2008 - Year in Review
2 2008 - "Year in Review" Energy legislation Michigan economy Improved safety and operational performance Common dividend increase Foundation established for long-term growth.
Slide 4: Regulatory Timeline
3 Oct-07 Nov-07 Dec-07 Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun-08 Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 Jan-09 Feb- 09 Mar-09 Regulatory Timeline November December April May June September November Electric Rate Case U-15645 Filed Staff and intervenors file Rebuttals Self implement Cross examinat
Slide 5: Renewables and Energy Optimization
4 Renewables and Energy Optimization Renewable Energy Plan 10% by 2015, currently 4% Primarily invest in wind 200 Mw by 2013, 500 Mw by 2015, 900 Mw by 2017 50% build, 50% PPA Over $1 billion capital investment Levelized surcharge of $85 - $90 million annually over plan life Energy Optimization Plan
Slide 6: BEI - Electric Resource Plan (Peak Load)
5 BEI - Electric Resource Plan (Peak Load) 0 Generation gap needs to be addressed. Existing generation and long-term purchases
Slide 7: Renewable Energy Today
6 Renewable Energy Today 2008 Energy Generation Mix 40,100 Mwh Wind Hydro Biomass Solid waste Anaerobic digester Landfill gas Nuclear (PPA) Renewables Coal MISO Purchase Natural Gas 17 5 45 19 14 382 MW of renewable resources; 4% of peak supply. a _ _ _ _ _ a Based on generation needed to serve tota
Slide 8: Wind Growth (2008-2018)
7 Wind Growth - (2008-2018) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 71 71 71 71 71 271 271 571 571 971 971 Projected 200 MW 300 MW 400 MW
Slide 9: BEI Summary
8 BEI Summary Extensive analysis of alternatives and risks Diverse and balanced plan Meets 10% renewable portfolio standard by 2015 Meets energy efficiency target of 5.5% by 2015 Includes demand management programs Purchase of natural gas plant Build new clean coal facility Build new clean coal faci
Slide 10: 7% Utility Growth Rate Base
9 2008 2009 2010 2011 2012 2031 Depreciation 7.851 8.729 8.486 7.922 7.592 7.123 6.597 Maintenance 0.574 1.132 1.644 2.117 2.616 Customer growth 0.077 0.156 0.244 0.337 0.431 Environmental 0.057 0.19 0.341 0.501 0.797 Zeeland plant 0.481 0.481 0.481 0.481 0.481 Gas compression and pipelines 0.064 0.
Slide 11: 2009 Major Priorities
10 2009 Major Priorities Achieve financial objectives in challenging economic environment Balanced Energy Initiative Renewable and Energy Optimization Plans Implementation of Energy Legislation No change in strategy; focus on execution of plan.
Slide 12: Financial Accomplishments
11 Financial Accomplishments Achieved EPS and capital structure targets Increased dividend Exited exposure to monoline insurance companies Added $150 million, 364-day revolver at Utility Issued $500 million, 6.7% FMB due 2019 Accelerated and increased our planned FMBs at Utility Reshaped capital spe
Slide 13: 2009 Adjusted EPS Guidance
12 2009 Adjusted EPS Guidance 2009 adjusted EPS guidance at $1.25 continues growth in an uncertain global economy; future growth still planned at 6% - 8%. 2003 2004 2005 2006 2007 2008 2009 Future 0.81 0.9 0.96 1.08 0.84 1.25 0.8 0.85 0.9 1 0.8 1.2 1.25 CMS Earnings Potential By Business Segment a 8
Slide 14: Sales and Uncollectible Accounts
13 Sales and Uncollectible Accounts Electric Sales (weather adjusted) Sales decline similar to recession in early 1980s; uncollectible accounts climbing, but below peers. Electric and Gas Uncollectibles 2009 1975 1986 1997 2008 2007 2008 2009 CMS 32 46 48 Peers 0.8 0.9 0.9 Millions $ Percent of Reve
Slide 15: 2009 (vs 2008) Adjusted EPS
14 2009 (vs 2008) Adjusted EPS Lower Utility sales partially offset by rate relief. Utility 2008 Sales RCP Cost & Other Rate Relief 2008 Benefits Not Repeated Energy Legislation DIG + Other 2009 Guidance grey bars 1.18 1.25 spacer 1.14 1.09 0.6 0.6 1.2 1.2 1.2 red 0.07 0.11 0.05 0.25 0.26 0.06 green
Slide 16: 2009 Sensitivities
15 2009 Sensitivities Annual Impact Sensitivity EPS FCF (mils) Sales (weather-adjusted) Electric (34,845 GWh) a + 1% + $.04 + $18 Gas (289.4 bcf) + 1 + .02 + 7 Uncollectible accounts $(5) million (.02) (5) Auto-sector-wide bankruptcy (15) - (30) (.04) - (.08) (15) - (30) Gas prices + .50 + .01 + 60
Slide 17: 2008 - 2013 Cash Flow
16 2008 - 2013 Cash Flow 2008 2009 2010 2011 2012 2013 CF after Capex -517 -300 -49 146 -313 -622 81 182 265 323 707 877 CF after working capital 748 669 870 633 818 960 CF after interest 711 477 41 70 41 96 Operating cash flow 335 357 367 394 424 454 Billions $ Cash flow before dividend Operating c
Slide 18: Capital Spending
17 Capital Spending 2008 Budget Outlook Contingency Maintenance including customer growth 706 600 674 611.3 Environmental 45 69 197 197.1 Choices 75 181 264 125.1 120 186 Capital spending dialed back with some choices delayed temporarily. Average depreciation $410 million Equity contributions to Uti
Slide 19: Tax Benefits
18 Tax Benefits Year-End Actual Estimate 2008 2009 2010 (mils) (mils) (mils) Gross NOL carry forwards $1,300 $900 $400 Net NOL cash benefit at 35% $ 455 $315 $140 Credit carry forwards 292 292 292 Remaining cash benefit $ 747 $607 $432 New American Recovery and Reinvestment Act of 2009 bonus depreci
Slide 20: Liquidity Outlook
19 Liquidity Outlook Liquidity position sound. Good coverage for operational risks. Plans in place to address Parent maturity in 2010, if capital markets closed. Oct Dec Mar Jun Sep Dec Mar Jun Sep Dec Blank Liquidity 1505 1150 1337 1917 1057 915 1460 1252 960 1020 Cash 670 950 1137 1717 857 715 126
Slide 21: What Makes CMS Different?
20 What Makes CMS Different? Recent State legislation provides framework for growth Diversified investment opportunities boost rate base and EPS Solid liquidity position, no need to issue equity in near term NOL and AMT credits add value Track record of predictability
Slide 22: Appendix
Appendix
Slide 23: Liquidity Components
Liquidity Components At 12-31-08 Facility Available Renewal Date (mils) (mils) A/R program $ 250 $ 80 May 2009 Bank of Nova Scotia LOC 192 0 November 2009 Consumers revolvers UBOC 150 150 September 2009 JPMorgan 500 325 March 2012 Energy Parent revolver 550 420 April 2012 Subtotal $1,642 $975 Cash b
Slide 24: 2008 (vs 2007) Adjusted EPS
2008 (vs 2007) Adjusted EPS 2007 Equity & Return MCV "Reg Out" Assets Sold DIG Restructuring Overhead & Other 2008 Grey 0.84 1.18 no fill 0.84 1.05 1.03 1.03 1.06 Red 0 0.17 0.07 Green 0.21 0.15 0.03 0.19 Utility Enterprises + Parent $0.36 $0.05 Interest expense $0.13 Overhead 0.10 Other (0.04) Tota
Slide 25: 2009 Cash Flow (non-GAAP) Forecast
2009 Cash Flow (non-GAAP) Forecast CMS Energy Parent Consumers Energy Appendix _ _ _ _ _ a Includes other _ _ _ _ _ b Includes cost of removal and capital leases $240
Slide 26: Projected Consumers Capital Expenditures 2009-2013
2Projected Consumers Capital Expenditures 2009 2013 -2009 2010 2011 2012 2013 Total (mils) (mils) (mils) (mils) (mils) (mils) Electric Distribution $ 176 $ 195 $ 169 $ 205 $ 170 $ 915 Generation 152 151 70 110 91 574 Environmental 69 197 105 215 378 964 New customers/other 100 130 129 127 127 613 $
Slide 27: GAAP Reconciliation
GAAP Reconciliation