Cms Energy Corporation · NYSE:CMS
Cms Energy — Deutsche Bank Conference 2008
19 slides from Cms Energy's conference presentation, May 28, 2008
Slide 1: Growing Forward
Growing Forward Deutsche Bank Conference May 29, 2008 Thomas J. Webb Executive Vice President and CFO
Slide 2: Forward-looking statements
This presentation contains “forward-looking statements” as defined in Rule 3b-6 of the Securities Exchange Act of 1934, as amended, Rule 175 of the Securities Act of 1933, as amended, and relevant legal decisions. The forward-looking statements are subject to risks and uncertainties. They should be
Slide 3: Consumers Energy Overview
Consumers Energy Overview Territory Focus Electric • Excellent operations Gas • Combination Customer value • Investment Mio Alcona • Responsible rate increases Cooke Loud Hodenpyl 5 Channels Foote • Healthy capital structure Tippy New coal plant • EPS growth 6% — 8% Ludington Pumped Storage Rogers •
Slide 4: Customer Value – Capacity and Fuel Mix
Customer Value Capacity Fuel Mix — 2008 Consumers Energy MISO 9,600 MW 125,000 MW Pumped Pumped Storage Oil Storage Renewables Renewables 10% 5% 2% 1% Oil 3% Purchases Nuclear 6% Purchases 6% 8% 5% Nuclear (PPA) 8% Gas 26% Gas Coal Coal 23% 52% 45% Diversified fuel mix minimizes risk and optimizes c
Slide 5: Customer Value – Prices
Customer Value – Prices $/MWh 2007 Electric Prices vs. MISO $75 CE Price 12% below MISO Average @ $48 $50 MISO (Mo Avg) CE Mo Avg Average @ $42 $25 Jan Apr Jul Oct $/Mcf 2007 Average Residential Rates — Gas 30 CE Price 25% below National Average 20 National Average Rate CE State Averages 10 0 Custom
Slide 6: Customer Value – Commodities
Customer Value – Commodities • Natural gas • 80% contracted for 2008-2009 heating season • 66% fixed price • Coal • 99% of 2008 and 78% of 2009 contracted or hedged • Multi-year transportation contracts in place • Electric • 100% of 2008 supply requirement in place • 98% of 2009 contracted or hedged
Slide 7: Investment Approach
Investment Approach • Utility investment provides customer benefits: • O&M cost reductions • Fuel cost reduction • Reliability improvement • Efficiency increases • Reductions provide headroom for rate base and equity growth • Fair and timely rate relief key to achieving plan $6.4 billion investment
Slide 8: Utility Investment Plan
Utility Investment Plan Rate Base with Coal Plant Coal Plant Alternative Bils $13 Coal plant Capital Spending AMI 2008-12 12 Renewables/energy efficiency (mils) Zeeland plant Electric reliability and other 11 Gas compression/pipelines 2015 Coal plant $ 575 Environmental 10 Customer growth Alternativ
Slide 9: Average Electric Rate Impacts
Average Electric Rate Impacts ¢ / kWh CAGR 12.00 11.00 Fuel? Carbon? Legislation-Related 3.2% 2.7% 10.00 9.00 Investment 8.00 2007 2008 2009 2010 2011 2012 2013 Including $6.4 billion of capital spending — average annual rate increases about three percent. 8
Slide 10: Regulatory Update
Regulatory Update • Electric Rate Case – U-15245 • ALJ recommended $210 million vs. our $265 million • Primary differences: • ROE — $27 million • Palisades transaction costs — $15 million • Anticipate final order mid-year • MCV regulatory out proceeding – U-15320 • Gas Rate Case – U-15506 · Seeking
Slide 11: Energy Legislation
Energy Legislation • Michigan House approved package on strong bipartisan vote • Package now under consideration in Michigan Senate • Major provisions • Reform of state’s electric deregulation law (PA 141) • Limit retail open access to 10 percent • File and implement ratemaking • Certificate of nece
Slide 12: Consumers Energy Electric Mix
Consumers Energy Electric Mix Sales Profit Industrial Residential Industrial Residential Commercial Commercial Auto-related sales represent about six percent of sales and three percent of gross margin. 11
Slide 13: Enterprises Assets
Enterprises Assets Livingston Grayling Filer City Genesee DIG Exeter Kalamazoo River Craven Renewables – 939 Gross MWs Other – 224 Gross MWs Investments focused on U.S. renewables. 12
Slide 14: Adjusted (non-GAAP) EPS Guidance
Adjusted (non-GAAP) EPS Guidance Utility Enterprises + Parent $0.34 To Go $(0.04) $0.06 $0.05 $1.20 $(0.11) $0.04 $0.05 $0.28 $0.84 $0 To Go $0.03 To Go Completed First Quarter $0.42 $0.44 2007 Equity & Return MCV “Reg Out” Assets Sold DIG Restructuring Cost & Other 2008 13
Slide 15: CMS Adjusted (non-GAAP) Earnings
CMS Adjusted (non-GAAP) Earnings* 6% – 8% Growth $1.08 $1.20target $0.96 $0.90 $0.84 $0.81 2003 2004 2005 2006 2007 2008 Future ___* Adjusted (non-GAAP) EPS excluding MTM in 2004 – 2006 2007 restructuring set stage for utility growth. 14
Slide 16: Consistent financial performance
Consistent financial performance Fair and timely regulation Utility Customer investment value Safe, excellent operations
Slide 17: Appendix
Appendix
Slide 18: 2008 Cash Flow Forecast
a 2008 Cash Flow Forecast CMS Energy Parent Consumers Energy Amount Amount (mils) (mils) Cash at year end 2007 $ 136 Cash at year end 2007 $ 195 Sources Sources Consumers Energy dividends/tax sharing $ 395 Operating (depreciation $566) $ 1,325 Enterprises 15 Other working capital [decom refund ($250
Slide 19: CMS Energy
CMS ENERGY Blue paper