Cms Energy Corporation · NYSE:CMS
Cms Energy — Investor Presentation (May 2024)
26 slides from Cms Energy's investor presentation, May 7, 2024
Slide 1: Investor Meetings May 2024
Investor Meetings May 2024
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: CMS Energy Overview
CMS Energy Overview Corporate Structure Key Information CMS Energy 2023 Financial Statistics (NYSE: CMS) Based in Jackson, MI >8,300 Employees (44% unionized)a Consumers Energy NorthStar Clean Energy $7.5B Revenue 2023 $907M Adjusted net incomeb >95% regulated Avg. Rate Base 21 years Industry-leadin
Slide 4: Consumers Energy Positioned Well
Consumers Energy Positioned Well . . . Service Territory Electric Gas Combined • Electric Utility 1.9M electric customers 9,260 MW of capacity • Gas Utility 1.8M gas customers 309 Bcf gas storage • Serving 6.8M Michigan residents >1,300 Planet Goalsa MW cumulative • Exit coal in 2025 contracted load
Slide 5: NorthStar Clean Energy Provides Flexible Solutions
a NorthStar Clean Energy Provides Flexible Solutions . . . Renewable Platform • 368 MW of wind (OH, TX) • 64 MW of biomass (MI, NC) • 210 MW of solar (AR, MI, WI) Dearborn Industrial Generation (DIG) & Other • >1,000 MW in MI (including DIG & Peakers) • Upside: tightening capacity markets with futur
Slide 6: Industry-Leading Financial Performance
Industry-Leading Financial Performance . . . Adjusted a EPS +6% to +8% Dividend Weather Help Recession Recession Recession / Hurt Pandemic 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024+ Cold Mild Hot Warm Mild Cold Summer- Hot Hot Warm
Slide 7: Investment Thesis
INVESTMENT THESIS
Slide 8: Investment Thesis
Investment Thesis . . . Clean Energy Industry-leading net zero commitments Leader s Co or Strong Infrastructure Cash Flow & Renewal st -w Balance Sheet Inve orkers Excellence through the Cu Customers st o m e rs Attractive & Constructive Top-tier regulatory jurisdictiona Diversified Legislation & Te
Slide 9: Infrastructure Renewal is Necessary
Infrastructure Renewal is Necessary . . . $7B Electric Reliability New Energy Legislation Roadmap Provides capital opportunity to meet 60% 5-yr plan Renewable Portfolio Standard by 2035 and Including up to 400 100% Clean Energy Standard by 2040 miles per year of undergrounding 25 years of main repla
Slide 10: Updated Customer Investment Plan
Updated Customer Investment Plan . . . New Utility Investment Plan Rate Base Growth Other Growth Driversb ~7½%/yra $35.2B ✓ EE incentive moving 63% 20% from 20% to 22.5% Electric utility investment $24.6B (at 2% YoY load ’24 – ’28 reduction) $17B 37% 43% ✓ ~9% FCM on new PPAs for clean energy contra
Slide 11: Reliability and Decarbonization Opportunities
Reliability and Decarbonization Opportunities . . . Electric Reliability Roadmap Clean Energy Law • Supports and accelerates decarbonization +$3B ~$7B • Ensures continued resource adequacy • Maintains customer affordability Benefits • Enhanced Financial Compensation ~$4B • More reliable and resilien
Slide 12: Michigan's Strong Regulatory Environment
Michigan’s Strong Regulatory Environment . . . 2023 2024 Supportive Energy Policy Renewable Energy Plan (REP) • Timely recovery of investments H2 2024: File updated REP ✓ Forward-looking test to meet 60% renewable energy by 2035 years/earn authorized ROEs ✓ 10-month rate cases Electric ✓ Monthly fue
Slide 13: De-risking Inflationary Pressures
De-risking Inflationary Pressures . . . Near-term Risk Mitigation Episodic Cost Savings Global Risks Countermeasures Year Event Savings ✓ Manageable wage inflation Labor (>40% unionized) a 2022 Palisades retirement >$90M ✓ ~95% non-union retention rate ✓ Manageable supply chain risk 2023 Karn 1&2
Slide 14: Expansive Economic Development Efforts
Expansive Economic Development Efforts . . . Electric Gas Combined Contracted Load 2022 New Load 2023 New Load 2024 New Load Hemlock Semiconductor (MW) Leading provider of polysilicon for chips and solar panels ~$375M investment >1,300 MW ~175 jobs cumulative contracted load since 2015a 326 Ford Blu
Slide 15: Strong Balance Sheet
Strong Balance Sheet . . . Consumers Energy S&P Moody’s Fitch Key Strengths Senior Secured A A1 A+ ✓ Forward-looking recovery ✓ Constructive rate construct Commercial Paper A-2 P-2 F-2 ✓ Strong operating cash flow Outlook Stable Stable Stable generation CMS Energy Senior Unsecured BBB Baa2 BBB ✓ 100
Slide 16: Executing on the Clean Energy Transformation
Executing on the Clean Energy Transformation . . . Net Zero Targets Proof Points ✓ Retired Karn 1 & 2 coal units, 515 MW 2030 Today ✓ Acquired existing ~1.2 GW CCGT Net zero methane emissions for our ✓ Grew VGPa Program to ~365 MW gas delivery system ✓ Approved for ~$11M in low-carbon energy infrast
Slide 17: Our Clean Energy Transformation
Our Clean Energy Transformation . . . Exit Coal in 2025… …While Ensuring Reliability a (Coal % PP&E ) <20% • Purchase ~1.2 GW of existing gas Classic 7 retirement and capacity (Covert) Karn 1&2 retirement • Maintain ~1.2 GW of peaking capacity Campbell 1–3 through 2031 (Karn 3&4) retirement; <10% Re
Slide 18: Decarbonization of Gas Infrastructure
Decarbonization of Gas Infrastructure . . . Net zero methane by 2030... …with additional opportunities. • >100 miles/yr main replacement • New Michigan Energy Legislation – 100% Clean Energy (renewables, gas w/ CCS and • ~5.5K/yr vintage services replacement nuclear) by 2040 • Renewable natural gas
Slide 19: Our Commitment to Sustainability
Our Commitment to Sustainability . . . Named TRENDSETTER company by CPA-Zicklin Index for corporate political disclosure and accountability DOUBLE A RATED . . . continues to be recognized globally. 19
Slide 20: ESG Disclosures are Transparent
ESG Disclosures are Transparent . . . • CMS Energy & Consumers Energy Websites • SASB Index (Electric Utilities & Power Generation) • SEC Filings (10-K & Proxy) • SASB Index (Gas Utilities & • Carbon Disclosure Project Distributors) • Report Scope 1, 2 & 3 • TCFD Index Emissions • Water • Global Rep
Slide 21: Appendix
APPENDIX 21 21
Slide 22: Risks are Carefully Considered
Risks are Carefully Considered . . . Risks Mitigation Efforts Regulatory Environment • Participation in legislative and regulatory policy development Climate Adaptation/ • Geographically located in a desirable area, state surrounded by fresh water Increased investment in infrastructure and smart ele
Slide 23: Endnotes
ENDNOTES 23 23
Slide 24: Presentation Endnotes
Presentation Endnotes Slide 3: aExcludes seasonal and contract workers bAdjusted, (non-GAAP) cDividend Policy: Payout Ratio of ~60% overtime Slide 4: aNet zero methane emissions for our gas delivery system, net zero carbon emissions for our electric business (includes PPAs and MISO market purchases)
Slide 25: 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 26: 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 Twelve Months Ended 12/31/23 12/31/22 12/31/23 12/31/22 Net Income Available to Common Stockholders $ 306 $ 168 $ 877 $ 827 Reconciling items: