Cms Energy Corporation · NYSE:CMS
Cms Energy — Boston Meetings March 2008
20 slides from Cms Energy's conference presentation, Mar 14, 2008
Slide 1: Growing Forward
Growing Forward Dave Joos, President and CEO Tom Webb, Executive VP and CFO Boston Meetings - March 2008
Slide 2: Forward-looking statements and non-GAAP measures
This presentation contains forward-looking statements. Actual results may differ materially from those anticipated in such statements as a result of various factors discussed in our SEC filings. The presentation also includes non-GAAP measures when describing CMS Energy's results of operations and f
Slide 3: 2007 Year in Review
2007 - "Year in Review" Restored common dividend Completed divesture of international businesses Received supportive regulatory decisions Began implementation of Balanced Energy Initiative Announced new clean coal plant Purchased Zeeland power plant Completed Dearborn Industrial Generation (DIG) res
Slide 4: 2007 Financial Report Card
2007 Financial Report Card Targets Actual Adjusted EPS (non-GAAP) 80¢ 84¢ ? Free cash flow before capex & dividends (mils) $2,090 $2,461 ? Capital structure (year-end) FFO/Average debt 12% 12% ? Parent debt (bils) $1.7 $1.7 ? Utility equity ratio 46% 49% ? ? On target _ _ _ _ _ a Financial, excludin
Slide 5: 2007 Operational Highlights
2007 Operational Highlights $400 million investment to upgrade boiler and add SCR to Campbell Plant 84% NOx reduction 41% SO2 reduction 100% western coal Set 3 monthly peak load records in 2007 Electric distribution reliability (minutes) improved 20% Green Generation enrollment record Consumers cont
Slide 6: Regulatory Review and Update
Regulatory Review and Update Amount (mils) 2007 Approved Palisades sale $380 Gross proceeds Settled gas rate case 50 Annual revenue Exercised MCV regulatory out 55 Reduced payment Approved Zeeland power plant acquisition 70 Annual revenue Filed Balanced Energy Initiative Plan NA 2008 Filed gas rate
Slide 7: Michigan Legislative Reform
Michigan Legislative Reform Reform bills introduced in Michigan House of Representatives address: Revised retail open access provisions of PA141 File and implement ratemaking Energy efficiency Renewable portfolio standard of 10% by 2015 Cost of service rates Certificate of need Ongoing discussions i
Slide 8: 2008 Major Priorities
2008 Major Priorities Achieve financial objectives Reform Michigan Energy Policy Achieve fair and timely rate relief Address Bay Harbor environmental issues Continue implementing Balanced Energy Initiative Maintain safe, excellent operations
Slide 9: Growing Forward
Growing Forward Consistent financial performance Fair and timely regulation Utility investment Customer value Safe, excellent operations
Slide 10: 2007 Financial Accomplishments
2007 Financial Accomplishments Met commitments Exceeded EPS and cash flow targets Improved balance sheet Received rating agency upgrades Restored dividend Divested international businesses Invested $650 million in Utility Reduced Parent debt Reduced business risk profile Promises made, kept.
Slide 11: 2008 Adjusted EPS Guidance
2008 Adjusted EPS Guidance International Enterprises sales in 2007 facilitate redeployment of capital into core Utility investments for earnings growth in 2008 and beyond. 2003 2004 2005 2006 2007 2008 Future 0.81 0.9 0.96 1.08 0.84 1.2 CMS Earnings Potential _ _ _ _ _ a Adjusted (non-GAAP) EPS excl
Slide 12: Overhead and Debt Reduction
Overhead and Debt Reduction 2005 2008 Utility 28.4 27.4 Enterprises 52 22 Parent 20 5 Substantial reduction in Parent and Enterprises overhead on plan with Enterprises downsizing. EPS (22)¢ (7)¢ $45 Parent Enterprises 2005 2008 Debt 2.5 1.7 Int exp (63)¢ (38)¢ $0.8 Overhead (mils) Parent Debt (bils)
Slide 13: Consolidated and Parent Debt, Credit Metrics
2001 2005 2006 2007 2008 2009 2008 Budget 5.6 2.5 2.3 1.7 1.7 1.7 Consolidated Debt $8.3 $7.4 $6.6 $6.2 $6.1 FFO/Debt 8% 8% 12% 12% 16% Amount (Billions) $ ^ Parent Debt Credit metrics in strong BB range (15% - 20%) driven by reinvestment of restructuring proceeds in Utility and Parent debt reductio
Slide 14: Tax Benefits
Tax Benefits Year-End Actual Estimate 2007 2008 2009 (mils) (mils) (mils) Gross NOL carry forwards $1,000 $1,000 $700 Net NOL cash benefit at 35% $ 350 $ 350 $245 Credit carry forwards 282 282 282 Remaining cash benefit $ 632 $ 632 $527 New "Economic Stimulus Act of 2008" bonus depreciation extends
Slide 15: 2008 Cash Flow Forecast
2008 Cash Flow Forecast CMS Energy Parent Consumers Energy
Slide 16: Utility Growth: Investment Plan and Rate Base
Utility Growth 2007 2008 2009 2010 2011 2012 Depreciation 7.534 7.173 6.785 6.366 5.918 5.436 4.926 Maintenance 0.429 0.86 1.371 1.802 2.229 2.638 Customer growth 0.091 0.171 0.254 0.355 0.472 0.594 Environmental 0.107 0.215 0.339 0.453 0.585 0.849 Enhanced distribution and other 0 0.033 0.118 0.221
Slide 17: Investment Drives Earnings Growth
Investment Drives Earnings Growth Utility investment provides customer benefits: Operational performance PSCR cost reduction Reliability Efficiency Reduced O&M and PSCR costs allow room for rate increases, rate base, and equity growth Fair and timely rate relief key to achieving plan Investment bala
Slide 18: 2008 Financial Targets
2008 Financial Targets Target Adjusted EPS (non-GAAP) $1.20 Free cash flow before capex and dividends (mils) 400 Capital structure (year-end) FFO/Average debt 16% Parent debt (bils) $1.7 Utility equity ratio 49% Dividend (30% payout) 36¢ _ _ _ _ _ a Financial, excluding securitization and Palisades
Slide 19: Appendix
Appendix
Slide 20: 2007 to 2008 Adjusted EPS
2007 to 2008 Adjusted EPS 2007 Equity & Return MCV "Reg Out" Assets Sold DIG Restructuring Cost & Other 2008 Grey 0.84 1.2 no fill 0.84 1.15 1.11 1.1 1.15 Red 0.15 Green 0.31 0.11 0.04 0.05 Utility Enterprises + Parent $0.42 $(0.06) Interest expense $0.11 Overhead 0.08 Taxes (0.05) Interest income (