Cms Energy Corporation · NYSE:CMS
Cms Energy — Q1 2022 Earnings Presentation
21 slides from Cms Energy's earnings presentation, May 3, 2022
Slide 1: Leading the Clean Energy Transformation: First Quarter 2022 Results and Outlook
Leading the CLEAN ENERGY TRANSFORMATION First Quarter 2022 Results and Outlook May 3, 2022
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: Simple Investment Thesis
Simple Investment Thesis . . . Industry-leading net zero commitments Clean Energy Leader Diversified Service Infrastructure Excellence through the Territory Renewal a Top-tier regulatory jurisdiction Strong Cash Flow Constructive & Balance Sheet Legislation Affordable Prices Premium total shareholde
Slide 4: Settled 2021 IRP vs. Prior Plan
Settled 2021 IRP vs. Prior Plan . . . Key Objectives 2021 IRP 2018 IRP One of the 1st in • Exit Coal Operations the nation By 2025 By 2040 Retire: Karn 1&2 ~60% carbon 2023 2023 emission reduction Campbell 1&2/3 by 2025 a 2025 2031/39 • Reliable, Affordable, Capital Upside Covert $815M / >1 GW No ne
Slide 5: Net Zero Commitments Drive Decarbonization
Net Zero Commitments Drive Decarbonization . . . 2025 Zero coal ~60% carbon emissions reduction a Net zero methane emissions for our gas delivery system and 20% 2030 gas customer emissions reductionb Accelerating vintage main and service replacements Zero coal Renewable natural gas Net zero carbon e
Slide 6: Solid First Quarter
Solid First Quarter . . . Q1 2022 Results Amount Commentary Adjusted EPS $1.20 Ahead of plan Dividend Per Share (DPS) Paid 46¢ Consistent growth 2022 Outlook Adjusted EPS Guidance $2.85 – $2.89 Premium growth Annual DPS $1.84 Up 10¢ vs. 2021 Long-term Outlook IRP strengthens and lengthens Plan Adjus
Slide 7: 2022 Adjusted EPS
2022 Adjusted EPS . . . First Three Months Nine Months To-Go 11¢ 9¢ – 13¢ 29¢ 16¢ 3¢ 10¢ $2.85 – $2.89 $2.65 (6)¢ (17)¢ – (21)¢ (2)¢ (9)¢ First Quarter EPS Results 2021 2022 Reported EPS $1.21 $1.21 First Adjustments a (0.12) (0.01) First Quarter Adjusted EPS a $1.09 $1.20 Quarter $1.09 $1.20 2021 W
Slide 8: Michigan's Strong Regulatory Construct
Michigan’s Strong Regulatory Construct . . . 2021 2022 Integrated Resource Plan (IRP) ✓Jun. 30 : Filed IRP th ✓ Apr. 20 : th Late June: Filed Settlement Expected MPSC Order U-21090 Agreement IRP U-21090 IRP U-21090 Electric ✓ Dec. 22 : Final Order $59M nd a ✓Apr. 28 : th b Q1 2023: Filed $272M Expec
Slide 9: 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 2022 Palisades retirement >$90M (>40% unionized) Labor ✓ 95% non-union retention ratea 2023 Karn 1&2 coal unit $30M b retire
Slide 10: Q&A Thank You!
Q&A Thank You! 10 10
Slide 11: Appendix
Appendix 11 11
Slide 12: Utility Sales Continue to Recover
Utility Sales Continue to Recover . . . a Weather-Normalized Electric Deliveries (Q1 2022 vs. Q1 2021) 7.8% 2.1% b 2.7%b (1.3)% Residential Commercial Industrial Total Residential Customer Growth Economic Development (5-Yr Avg. Customer Count) Legislative Support • $1B of state incentives 105 MW • N
Slide 13: 2022 Sensitivities
2022 Sensitivities . . . Full-Year Impact Sensitivity Adj. EPS OCF 2022 Adj. EPS Sensitivities (1% Full Year in Volume) Salesa (¢) ($M) Electric Gas Electric (~37,000 GWh) + 1% + 7 + 27 Residential 4¢ 2½¢ Gas (~304 Bcf) + 1 + 3 + 13 Commercial 2½ ½ Industrial ½ ½ Gas Prices + 50¢ + 0 + 60 Electric
Slide 14: 2022 Planned Financings
2022 Planned Financings . . . Financings Existing Facilities 2022 Plan ($M) $250M Consumers Energy: (Nov-2023) a First Mortgage Bonds $800 $2.0B of net liquidity position with no CMS Energy: commercial paper outstanding Hybrid / Continuous Preferred None (as of 3/31/22) Planned Equity -- $56M contra
Slide 15: Credit Metrics Maintained
Credit Metrics Maintained . . . Consumers Energy S&P Moody’s Fitch Ratings Drivers Senior Secured • Strong financial A A1 A+ position Commercial Paper A-2 P-2 F-2 • Growing operating cash flow Outlook Stable Stable Stable CMS Energy • Constructive return on regulated Senior Unsecured BBB Baa2 BBB in
Slide 16: Key IRP Components
a Key IRP Components . . . Renewables & Storage Delivering Across the Solar 4.5 GW by 2030, ~8.0 GW by 2040 Triple Bottom Line Battery >0.5 GW by 2040 (75 MW beginning in 2024) Wind ~0.8 GW pre-2025 (approved via RPS) ✓ Accelerate Customer Programs By 2030 decarbonization Energy Efficiency ~1.1 GW D
Slide 17: Endnotes
Endnotes “severe?
Slide 18: Presentation Endnotes
Presentation Endnotes a Slide 3: UBS Research, 2022 state rankings and D.C. a b Slide 4: From 2005 baseline including utility-owned generation, PPAs and MISO purchases, post coal retirements 2021 IRP vs. prior plan a b Slide 5: From 2005 baseline including utility-owned generation, PPAs and MISO pur
Slide 19: 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 20: Reconciliation of GAAP Net Income to Non-GAAP Adjusted Net Income
CMS ENERGY CORPORATION Reconciliation of GAAP Net Income to Non-GAAP Adjusted Net Income (Unaudited) In Millions, Except Per Share Amounts Three Months Ended 3/31/22 3/31/21 Net Income Available to Common Stockholders $ 351 $ 349 Reconciling items: Disposal of discontinued operations gain (5) - Tax
Slide 21: Reconciliation of GAAP Net Income to Non-GAAP Adjusted Net Income by Quarter
CMS ENERGY CORPORATION Reconciliation of GAAP Net Income to Non-GAAP Adjusted Net Income by Quarter (Unaudited) In Millions, Except Per Share Amounts 2022 1Q Net Income Available to Common Stockholders $ 351 Reconciling items: Electric utility and gas utility - Tax impact - Enterprises (1) Tax impac