Cms Energy Corporation · NYSE:CMS
Cms Energy — Q3 2017 Earnings Presentation
23 slides from Cms Energy's earnings presentation, Oct 26, 2017
Slide 1: 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 2: Agenda
2 Agenda Business Update Patti Poppe President & CEO Performance -- The Consumers Energy Way Financial Results & Outlook Rejji Hayes Executive VP & CFO People, Planet, Profit Third Quarter; Full Year PEOPLE PLANET PROFIT
Slide 3: EPS Results and Guidance raised
3 EPS Results and Guidance . . . . . . raised! a _ _ _ _ _ a Adjusted EPS (non-GAAP) Results and Guidance PROFIT First Nine Months 2017 at $1.66: up 8% from 2016 weather-normalized 2017 Full-Year guidance raised: to $2.15 - $2.18, up 6% to 8% 2018 Full-Year guidance introduced: at $2.29 - $2.33, up
Slide 4: The Triple Bottom Line
4 The Triple Bottom Line . . . . . . world class performance delivering hometown service. PERFORMANCE PEOPLE PLANET PEOPLE • PLANET • PROFIT PROFIT
Slide 5: Long-Term Regulatory Planning provides significant customer value
5 Long-Term Regulatory Planning . . . . . . provides significant customer value and investment certainty. Gas Electric Energy Law 12/1: Capacity charge determined (SRM) Q2: File long-term generation plan (IRP) By 3/30: Final order Customer Benefits Transparency Safety Reliability Second Half 2017 20
Slide 6: Story of the Month: operational excellence despite major storm activity
6 Story of the Month . . . . . . operational excellence despite major storm activity. SAIDI Performance 69.3 CE Way Driven: Quality Prioritized customer investment Targeted circuits for tree-trimming Reduced animal interference Minutes Lower = Better Down 40%! (Q3 Storm Season) 41.5 Best performance
Slide 7: First Nine Months of 2017 substantially stronger than plan
7 First Nine Months of 2017 . . . . . . substantially stronger than plan. By Business Segment Results $1.70 2016 2017 $1.76 0.10 (0.20) $1.66 $1.71 $1.84 $1.65 Better than Plan $0.12 0.03 0.01 EPS Actual Third Quarter EPS – (GAAP) Adjustment Adjusted (non-GAAP) 67¢ 3 70¢ 61¢ 1 62¢ EPS – (GAAP) Weath
Slide 8: 2017 EPS: First Nine Months, Three Months To Go
8 2017 EPS . . . First Nine Months Three Months To Go $2.02 . . . on track. YTD $1.66 $2.15 - $2.18 YTD $1.73 6% - 8% 3¢ a _ _ _ _ _ a Adjusted EPS (non-GAAP) 8¢ 8¢ 9¢ - 12¢ Managing Work Our Model customer rates <2% Q4 2016 Discretionary Activities: Debt Pre-funding Foundation & Low Income Other To
Slide 9: 2017 Outlook on track to deliver 6% to 8% growth
2017 Outlook . . . . . . on track to deliver 6% to 8% growth despite early challenges. Adjusted EPS (non-GAAP) January March 31 June 30 September 30 Today December 31 Recovery Guidance Benefits Property taxes Total 4¢ 4 8¢ 9 2016 _ _ _ _ _ a Adjusted EPS (non-GAAP) Weather & Storms Mild October a Ac
Slide 10: Simple, Perhaps Unique Model
Simple, Perhaps Unique Model . . . Customer investment (reliability, costs, enviro mandates) - O&M cost reductions - Sales growth - No “block” equity dilution & other INVESTMENT SELF-FUNDED Rate increase “at or below inflation” 2017+ Plan 6% - 8% . . . continues to drive sustainable growth. 2 - 3 pt
Slide 11: Customer Investment improves reliability and safety
11 Customer Investment . . . . . . improves reliability and safety. Gas Distribution: 25 years of replacements Gas Meter Installations (2019): 1.1 MM Electric HVD System: 1/3 past useful life Capex $ (Bn) Gas Electric Total Plan Opportunities Plan With Ops 8 10 18 7 $25 Detail Electric LVD System: O
Slide 12: Our Entire Cost Structure
Our Entire Cost Structure . . . 12 Cost Components Fuel and Power Costs Taxes Above Market Costs O&M Reductions in Rates $659 $572 Down $87 MM or 3% annually 100% Capital Investments O&M Operating Costs a b _ _ _ _ _ b Case U-17990 _ _ _ _ _ a Case U-16191 Cost of Capital . . . provides opportunitie
Slide 13: Operating Cash Flow Funds investments without block equity
Operating Cash Flow Funds . . . . . . investments without block equity. Amount (Bn) $ Investment Cash flow before dividend _ _ _ _ _ a Non-GAAP NOLs & Credits $0.7 $0.9 $0.9 $0.9 $0.6 $0.5 $0.2 $2.6 Interest, working capital and taxes $1.9 $2.9 $1.63 $2.3 $2.7 Up $0.8 billion Operating cash flow Gro
Slide 14: EPS Guidance Reflects 6% to 8% annual growth
14 EPS Guidance Reflects . . . . . . 6% to 8% annual growth. _ _ _ _ _ a Adjusted EPS (non-GAAP) EPS a +8% $2.29 a +6% 0 $2.60 Actual Guidance $2.15 $2.14 +7% +7% $1.89 $2.02 $2.18 $ 2.33 2015 2016 2017 2018 Future
Slide 15: Sustainable Future
Sustainable Future . . . Recession 7% CAGR EPS Recession Opportunities Gas Infra. Future +6% to +8% 2016 Customer Investment (Bn) O&M Reductions Coal Capacity Plan $18 (10)% 21 % _ _ _ _ _ a Adjusted EPS (non-GAAP) a Future 2003 Ops $25 (15)% 15 % LAW NEW ENERGY Grid Modernization PPA Replacements P
Slide 16: Q & A Thank you!
Q & A 16 Thank you! See you at EEI.
Slide 17: Q&A Thank you!
Q&A Thank you! See you at EEl.
Slide 18: Earnings Per Share By Year GAAP Reconciliation
18 CMS ENERGY CORPORATION Earnings Per Share By Year GAAP Reconciliation (Unaudited) 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 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 $1.66 $1.74 $1.89 $1.98 Pretax item
Slide 19: Earnings By Quarter and Year GAAP Reconciliation
19 CMS ENERGY CORPORATION Earnings By Quarter and Year GAAP Reconciliation (Unaudited) (In Millions, Except Per Share Amounts) 2016 1Q 2Q 3Q 4Q YTD Dec Net Income Available to Common Stockholders Reported - GAAP $164 $124 $186 $77 $551 Pretax items: Electric and gas utility - - 11 * 11 Tax impact -
Slide 20: Reconciliation of Gross Operating Cash Flow to GAAP Operating Activities
20 CMS Energy Reconciliation of Gross Operating Cash Flow to GAAP Operating Activities (unaudited) (mils) 2015 2016 2017 2018 2019 2020 2021 Consumers Operating Income + Depreciation & Amortization $ 1,866 $ 2,037 $ 2,134 $ 2,246 $ 2,547 $ 2,678 $ 2,816 Enterprises Project Cash Flows 20 46 58 58 53
Slide 21: Summary of Consolidated Earnings Reconciliations
21 CMS ENERGY CORPORATION Summary of Consolidated Earnings Reconciliations of GAAP Net Income to Non-GAAP Adjusted Net Income (In Millions, Except Per Share Amounts) Third Quarter Nine Months (Unaudited) (Unaudited) 2017 2016 2017 2016 Net Income Available to Common Stockholders $ 172 $ 186 $ 463 $
Slide 22: Segment Earnings Per Share GAAP Reconciliation
CMS ENERGY CORPORATION Segment Earnings Per Share GAAP Reconciliation (Unaudited) September 30 Three Months Ended Nine Months Ended 2017 2016 2017 2016 Electric Utility Reported $0.63 $4.69 $1.40 $1.42 Voluntary Separation Program - 4.03 - 0.43 Tax Impact (101 ) - (0.01 Adjusted $0.63 $431 $1.44 $1.
Slide 23: Segment Earnings Per Share GAAP Reconciliation
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