Cms Energy Corporation · NYSE:CMS
Cms Energy — UBS Midwest Utilities Conference 2020
19 slides from Cms Energy's conference presentation, August 2020
Slide 1: UBS Midwest Utilities Conference
UBS Midwest Utilities Conference August 2020
Slide 2: Forward-looking statements and non-GAAP measures
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: Investment Thesis
Investment Thesis . . . Investment Thesis Takeaways Prudent Liquidity Management • 2020 financings largely completed • No pension contributions required in 2020 Aging Operational Excellence and Track Record Infrastructure • Increased productivity driven by the CE Way Clean Energy Constructive Lead
Slide 4: Utility Customer Investment Plan
Utility Customer Investment Plan . . . Investment Plan Rate Base Growth Gas Electric Renewables $24½ 2020 ‘20-’24 +7% Capital Investment (Bn): Plan Plan Renewables $0.4 $ 1¾ $17½ Electric Utility 0.9 5½ Gas Utility 0.9 5 Total $2.2 On Track $12¼ $25 Bn 10-Yr Plana with $3 - $4 Bn of Opportunities 20
Slide 5: Michigan Regulatory Environment
Michigan Regulatory Environment . . . • Bipartisan Energy Law (2016 enhanced 2008 law) • Forward-looking test year (10-month rate case) • Energy efficiency incentive (20% of spend) • Renewable Portfolio Standard (RPS) • Constructive ROEs • Appointed Commissioners with staggered terms Michigan Public
Slide 6: Our Entire Cost Structure
Our Entire Cost Structure . . . Cost Components Residential Bills as % of Walleta 100% (Electric & Gas) Utility Bill Down Utility Bill ~4% 50 bps ~3½% Fuel and Power Costs TV & Phone 4% TV & Phone 4% Healthcare 5% Healthcare 8% ~70% Food 12% Non-capital Food 13% related Transportation 15% ~$17 Bn Tr
Slide 7: Financing Plan Largely Completed
Financing Plan Largely Completed . . . Planned 2020 Financing Existing Facilities Plan YTD (MM) (MM) Consumers Energy: $525 MM $250 MM “lowest ever” (Nov-2021) $3.1Bna of First Mortgage Bonds $650 $1,234 40-yr at net liquidity Term Loan $300 $300 2.50% position with no CP outstanding (as of 6/30/20)
Slide 8: Triple Bottom Line Focus
Triple Bottom Line Focus . . . People Planet Profit • COVID-19 update: • <15% rate base mix attributable to • 2020 guidancec reaffirmed • Focus on employee safety coala • Supports all customers in creative • Industry-leading Net Zero Plan • 6% to 8% long-term EPSc and DPS and agile ways • Net zero m
Slide 9: Clean and Lean
Clean and Lean . . . Old Utility Model Clean and Lean Big Build Supply Fully utilize Modular Supply assets Retirement Excess supply Big Excess Build supply Demand Modular Actual Modular Demand EE & DR O&M O&M Excess supply Expected Demand Fuel Fuel Big Bets Lower Risk Results in excess capacity, hig
Slide 10: Net Zero Plans
Net Zero Plans . . . Carbon Emissionsa Methane Emissionsb (Electric System) (Gas Delivery System) 2018 2024 2032 2040 2018 2025 2030 Classic Karn Campbell Campbell VSR c Continued Asset 7 retirement 1&2 retirement 1&2 retirement 3 retirement (17)% EIRP VSRc & EIRP retirements Methane Emissions R
Slide 11: Consistent Growth Through Changing Circumstances
Consistent Growth Through . . . a 7% CAGR +6% to +8% EPSa +7% Dividend Weather Recession Recession Help Hurt 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Cold Mild Warm Warm Mild Cold Summer- Hot Hot Warm Mild Polar Cold Feb Warm Warm Hot Storms winter su
Slide 12: Appendix
Appendix 12
Slide 13: Utility Sales Are Recovering
Utility Sales Are Recovering . . . a b Weather-Normalized Electric Deliveries 2019 Electric & Gas Rate Mix YTD Sales by Class (vs. 2019) Auto Other 4% Other 2% 2% c Industrial (7)% (18)% (5)%c 11% Res. Com. Ind. Total Residential Full Year Forecast (vs. 2019) Electric Commercial 39% ~5% 23% (7)%-(12
Slide 14: 2020 EPS
a 2020 EPS . . . First Half Six Months To Go 27¢ (12)¢ - (8)¢ $2.64 - $2.68 16¢ 2¢ 6% to 8% 14¢ $2.49 4¢ (7)¢ (7)¢ - (3)¢ (7)¢ Cost Savings Risks & Opps Benefits 4¢ COVID-19 impacts: Flex (OT, training, etc.) 4 • Sales Flat - (7)¢ Work optimization 5 • Expense (2) Other 6 Total 19¢ Cost offsets: ~10
Slide 15: Managing Work Every Year
Managing Work Every Year . . . EPSa 2012 2013 2014 2015 2016 2017 2018 2019 $2.60 Reinvestment Cold January +23¢ +7% Weather Cost offsets & storms +7% (9)¢ +7% Storms Hot summer Mild +17¢ summer +7% +18¢ +7% Cost Cost productivity (16)¢ productivity above plan above plan +7% Cost +13¢ (13)¢ Storms p
Slide 16: Regulatory Outlook
Regulatory Outlook . . . 2019 2020 Regulatory / Policy 2016 Energy 4/15: U-20757 Law fully COVID-19 order implemented for deferred accounting Electric 2/27: U-20697 a Dec. Expected Filed $244 MM a final order Updated $230 MM 10.5% ROE Gas Gas 9/26: b U-20322 12/16: U-20650 Oct. Expected Dec.
Slide 17: GAAP Reconciliation
GAAP Reconciliation 17
Slide 18: Earnings Per Share By Year GAAP Reconciliation
CMS ENERGY CORPORATION Earnings Per Share By Year GAAP Reconciliation (Unaudited) GAAP GAA 2019 over 2019 o 2003 201 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 CAGR Grow Reported earnings (loss) per share - GAAP ($0.30) $0.64 ($0.44) ($0.41) ($1.02) $1.20 $0
Slide 19: Reconciliation of GAAP EPS to Non-GAAP Adjusted EPS by Segment
CMS ENERGY CORPORATION Reconciliation of GAAP EPS to Non-GAAP Adjusted EPS by Segment (Unaudited) In Millions, Except Per Share Amounts Three Months Ended Six Months Ended 6/30/20 6/30/19 6/30/20 6/30/19 Electric Utility Reported net income per share $ 0.42 $ 0.32 $ 0.83 $ 0.69 Reconciling items: Ot