Cms Energy Corporation · NYSE:CMS
Cms Energy — Q2 2023 Earnings Presentation
20 slides from Cms Energy's earnings presentation, Jul 27, 2023
Slide 1: Second Quarter 2023 Results & Outlook
Leading the CLEAN ENERGY TRANSFORMATION Second Quarter 2023 Results & Outlook July 27, 2023
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: Investment Thesis
Investment Thesis . . . Industry-leading net zero commitments Clean Energy Leader Diversified Service Territory Infrastructure Excellence through the Renewal Top-Tier regulatory jurisdictiona Strong Cash Flow Constructive & Balance Sheet Legislation Affordable Prices Premium total shareholder return
Slide 4: 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 a Net zero methane emissions for our ✓ Adding 341 MW to VGP Program gas delivery system ✓ Approved for ~$11M in low-carbon energy infra
Slide 5: Michigan's Strong Regulatory Environment
Michigan’s Strong Regulatory Environment . . . 2022 2023 Supportive Energy Law Integrated Resource Plan (IRP) • Timely recovery of investments ✓ Forward-looking test years ✓Jun. 23 :rd Settlement Approved ✓ 10-month rate cases U-21090 ✓ Earn authorized ROEs ✓ Monthly fuel adjustment trackers (PSCR/G
Slide 6: Financial Results & Outlook
Financial Results & Outlook . . . Q2 2023 Results Amount Commentary Strong results keep the Adjusted EPS $0.75 full year on track 2023 Outlook Adjusted EPS Guidance $3.06 – $3.12 Toward the high end Annual Dividend Per Share $1.95 Up 11¢ Long-Term Outlook Adjusted EPS Growth +6% to +8% Toward the hi
Slide 7: 2023 Adjusted EPS
2023 Adjusted EPS . . . First Half Six Months To-Go (28)¢ 45¢ – 51¢ 17¢ – 23¢ $3.06 – $3.12 $2.89 26¢ 6¢ 18¢ 8¢ (37)¢ (6)¢ (15)¢ First Half EPS Results First 2022 2023 First Half Reported EPS $1.71 $1.36 Half $1.73 $1.45 Adjustmentsa 0.02 0.09 Adjusted EPSa $1.73 $1.45 2022 Weather Rates & Cost Savi
Slide 8: Credit Metrics Maintained
Credit Metrics Maintained . . . Consumers Energy S&P Moody’s Fitch Ratings Drivers Senior Secured • Strong financial A A1 A+ position Commercial Paper A-2 P-2 F-2 • Growing operating cash flow Outlook Stable Stable Stable • Constructive return CMS Energy on regulated investment Senior Unsecured BBB
Slide 9: 2023 Planned Financings
2023 Planned Financings . . . Financings Existing Facilities Plan YTD a ($M) ($M) ~$2.2B of net liquidity Consumers Energy: $250M First Mortgage Bonds $1,970 $1,525 (Nov-2024) Securitization 688 -- CMS Energy: Contracted Equity (issued) 441 -- $1,100M 3.375% (Dec-2027) Convertible Debt -- 800 due in
Slide 10: Industry-Leading Financial Performance
Industry-Leading Financial Performance . . . Adjusted EPSa +6% to +8% Dividend Weather Help Recession Recession Recession / Hurt Pandemic 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023+ Cold Mild Hot Warm Mild Cold Summer- Hot Hot Warm Mild P
Slide 11: Appendix
Appendix 1111
Slide 12: 2023 Sensitivities
2023 Sensitivities . . . Full-Year Impact Sensitivity Adj. EPS OCF 2023 Adj. EPS Sensitivities (1% Full Year in Volume) Salesa (¢) ($M) Electric Gas Electric (~37,000 GWh) + 1% + 7 + 27 Residential 4¢ 3¢ Gas (~311 Bcf) + 1 + 4 + 16 Commercial 2½ ~½ Industrial ½ ~½ Gas Prices + 50¢ + 0 + 60 Electri
Slide 13: Updated Customer Investment Plan
Updated Customer Investment Plan . . . New Utility Investment Plan Rate Base Growth Other Growth Driversb a >7%/yr ~$32B ✓ EWR incentives 20% ~$22½B ✓ FCM on PPAs 59% Electric utility ’23 – ’27 investment $15.5B 41% ✓ 10.7% wind RPS 39% ✓ NorthStar 2022 2027 Clean Energy Generation Electric Distribu
Slide 14: 2022 Asset Mix
2022 Asset Mix . . . Total PP&E ($M) (%) Electric Generation $3,277 14% Coal 477 ~2% Wind, solar, hydro 2,013 9 Gas & other 787 3 Distribution 8,294 37 Other 781 3 Total electric $12,352 ~54% Gas Distribution $5,473 24% Transmission 2,230 10 Underground storage facilities 1,067 4½ Other 396 1½ Total
Slide 15: Endnotes
ENDNOTES 15 15
Slide 16: Presentation Endnotes
Presentation Endnotes Slide 3: aRRA state regulatory energy rankings, May 2023. Regulatory Research Associates, a group within S&P Global Commodity Insights. Slide 4: aVoluntary Green Pricing bNet zero carbon emissions for our electric business (includes PPAs and MISO market purchases) from 2005 bas
Slide 17: 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 18: 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 6/30/23 6/30/22 6/30/23 6/30/22 Electric Utility Reported net income per share $ 0.50 $ 0.48 $ 0.74 $ 1.06 Reconciling items: Ot
Slide 19: 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 Six Months Ended 6/30/23 6/30/22 6/30/23 6/30/22 Net Income Available to Common Stockholders $ 195 $ 145 $ 397 $ 496 Reconciling items: Dispos
Slide 20: Reconciliation of GAAP Net Income to 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 2023 1Q 2Q Net Income Available to Common Stockholders $ 202 $ 195 Reconciling items: Electric utility and gas utility 3 30 Tax impact (1) (7) NorthSt