Cms Energy Corporation · NYSE:CMS
Cms Energy — Investor Presentation (February 2018)
80 slides from Cms Energy's investor presentation, Feb 20, 2018
Slide 1: Investor Meetings February/March 2018
Investor Meetings February/March 2018 15 YEARS OF CONSISTENT PERFORMANCE
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: Overview
Overview
Slide 4: CMS Energy Overview
CMS Energy Overview Corporate Structure Key Information CMS Energy 2017 Financial Statistics (NYSE: CMS) Based in Jackson, MI Employees (40% unionized) Consumers Energy Enterprises EnerBank Revenue 2017 Adjusted net income a Avg. Rate Base 94% of Operating Dividend payout ratio a Income Gas $4.6 B b
Slide 5: The Triple Bottom Line: People, Planet, Profit
The Triple Bottom Line . . . PEOPLE • PLANET • PROFIT PEOPLE PLANET PROFIT PERFORMANCE . . . world class performance delivering hometown service. 4
Slide 6: Consumers Energy
Consumers Energy . . . Overview • 4th largest combination utility (electric and gas) in the country • 2017 revenue = $6.2 billion • 2017 earnings = $630 million Our Service Territory • Electric Utility 1.8 million electric customers 8,455 MW of capacity • Gas Utility 1.8 million gas customers 309 bc
Slide 7: Michigan Offers
Michigan Offers . . . • Economic growth (taxes, skilled labor, balanced budget) • Forward-looking test year (10-month rate case) • Energy efficiency incentive (20% of spend) • Attractive renewable investment framework • Constructive ROEs . . . economic and energy policies that support our business.
Slide 8: Best-in-Class Commission
Best-in-Class Commission . . . MPSC Commissioners Tier 1 Ranking Tier Sally Talberg (I), Chairman Michigan Term Ends: July 2, 2021 2013 - Present 1 6 2 9 2012 2008 Norm Saari (R) 3 19 Term Ends: July 2, 2019 4 8 Rachael Eubanks (I) Term Ends: July 2, 2023 5 6 Barclays Research, 2017 state rankings .
Slide 9: DIG (750 MW) & Peakers (200 MW)
“DIG” (750 MW) & Peakers (200 MW) . . . Pre-Tax Income Opportunities (MM) $ 80 $75 70 Contracts (layering in over time) 60 $55 +$40 50 $45 Better +$20 40 Performance $35 $30 30 Better Performance 20 $12 10 Outage pull-ahead 0 2015 2016 2017 2018 Future Capacity ($/kw-mth) ≈ $1.00 ≈ $2.00 ≈ $3.00 ≈ $
Slide 10: Simple, Perhaps Unique Model
Simple, Perhaps Unique Model . . . Plan EPS Growth a 6% - 8% Self Funding: - Cost reductions 2 - 3 pts - Sales growth (continued economic development) 1 - Other (Enterprises, tax planning, etc.) 2 INVESTMENT SELF-FUNDED 5 - 6 pts Customer Prices “at or below inflation” <2% _____ a Adjusted EPS (non-
Slide 11: Needed Customer Investment
Needed Customer Investment . . . Large and Aging System Rate Base Growth >$50 Bn Electric Gas 10-Yr 7% $21 Bn CAGR $15 Bn 60% $10 Bn 5-Yr Plan 70% 40% 30% >$18 Bn System Need 2017 2022 . . . potentially pulled forward by tax reform. 10
Slide 12: Cost Reduction Strategy
Cost Reduction Strategy . . . Capital-Enabled Gas Replacements Pole-top Hardening Clean & Lean Structural/ Technology-Enabled Process Changes Smart Grid Mobility CE Way PPAs Customer Benefits • Safety Digital • Reliability Retirements • Better Service • Affordable Bills . . . largely funds customer
Slide 13: Our Entire Cost Structure
Our Entire Cost Structure . . . Cost Components Above Market Costs 100% 100% 90% PPA PPA 80% Down Fuel and Power Costs Fuel $162 MM or 5% Fuel 70% annually 2011 2017 60% ~70% _____ Source: 2011 - FERC Form 1; 2017 - Internal 50% O&M Reductions in Rates O&M Costs 40% $659 Down 30% Taxes $87 MM $572 o
Slide 14: Operating Cash Flow Generation
Operating Cash Flow Generation . . . Amount (Bn) a Gross operating cash flow $ 2.9 2.7 2.6 2.5 2.4 2.2 2.3 Interest, working capital 2.0 and taxes 1.9 1.7 1.65 1.65 1.4 Operating cash flow 0.9 ~$9 billion in aggregate Investment 0.4 (0.1) (0.6) _____ a Non-GAAP Cash flow before dividend (1.1) 2017 2
Slide 15: Consistent Growth Through Adversity
Consistent Growth Through . . . b 7% CAGR a EPS +6% to 8% Dividend +7% Weather Recession Recession Help _____ _____ Hurt a Adjusted EPS (non-GAAP) b Non-GAAP Cold 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Feb. Cold Mild Hot Warm Mild Cold Summer- Hot Hot Warm Mi
Slide 16: Sustainable Future
Sustainable Future . . . 7% CAGR Opportunities More Gas Renewables Grid Infra. Modernization PPA b Replacements TSR LAW Plan Ops • Customer Investment (Bn) $10 >$50 NEW ENERGY a EPS • Cost Reductions (10)% (15)% • Coal Energy 26% 0% Recession Recession People Planet Profit Dividend 2003 2004 2005 20
Slide 17: Compelling Investment Thesis
Compelling Investment Thesis Aging Infrastructure Strong Cash Flow & Healthy Balance Sheet Diversified Service Territory _____ Cost Controls Constructive Regulation a Case U-16191 _____ b Case U-17990, 2016 Order 16
Slide 18: Top of Mind
CMS ENERGY Top of Mind
Slide 19: Top of Mind
Top of Mind . . . • Federal Tax Reform • New Clean Energy Goal • Energy Law Implementation (IRP & SRM) • Pending Rate Cases • Economic Development . . . for Utility Week. 18
Slide 20: Tax Reform Impact
Tax Reform Impact . . . Impacts Takeaway Utility • Lower customer rates create Facilitates self-funding capex headroom (up to 4%) strategy Enterprises & • Lower tax rate improves Offers modest EnerBank earnings diversification Parent interest • Largely offset by EnerBank Unique tax shield inte
Slide 21: CMS Supply Mix
CMS Supply Mix . . . 2017 Energy by Fuel Type Net Interchange Power & Other, 8% Pumped Storage, 2% Renewables 9% Gas 38% Nuclear 17% Coal 26% . . . shifting away from coal. 20
Slide 22: Reducing Coal Intensity
Reducing Coal Intensity . . . a a Coal Energy Renewable Energy 49% Demand Shut down from coal customers 26% Meets RPS 15% 10% b 0% 3% 2005 2017 2040 2005 2017 2021 Future _____ _____ a_CMS Energy, includes PPA contracts a Consumers Energy, includes PPA Contracts b Based on Clean Energy Goal Plan ann
Slide 23: Clean Energy Goal
Clean Energy Goal . . . By 2040 Over the Next 5 Years . . . we take care of the communities we serve. 22
Slide 24: Long-Term Regulatory Planning
Long-Term Regulatory Planning . . . 2018 Regulatory/Policy 1/19: Impact of 6/15: File long-term 2H: Renewable 11/6: TBD: Tax tax reform filing generation plan (IRP) Reform Order Energy Plan Gubernatorial U-18494 U-18461 U-18231 elections Electric 3/1: File By 3/30: April/May: File 5-yr electric Fina
Slide 25: Gas Rate Case
Gas Rate Case . . . Primarily for Investment $(MM) Within the Request $20 $178 • 12-month test year ending June 2019 $158 • Rate base of $5.5 billion; 10.5% ROE ~90% for • Investment Recovery Mechanism investment effective July 1, 2019 • Non-fuel revenue decoupling mechanism Order by August 31st, 20
Slide 26: Economic Development
Economic Development is . . . Our Service Territory Outperforms Examples of New Business a Electric Grand Gas ~2% Industrial Rapids Michigan U.S. Combination Growth in 2017! Building permits b +330% +181% +112% GDP 29 19 14 2010 2016 Population 6 ½ 4 Duro-Last Roofing 2010 2016 Unemployment 3.8 4.7
Slide 27: Customer Investment
CMS ENERGY Customer Investment ll
Slide 28: Large and Aging System
Large and Aging System . . . Electric Gas distribution distribution system replacement system is plan: 25 years, older than peers 27,000 miles Age of coal fleet is more 1,670 miles of gas than transmission pipeline; most 50 years built in the WWII era . . . requires significant customer investment.
Slide 29: Electric System Investment
Electric System Investment . . . Electric Supply Dist. Gas $1½ Bn $3½ Bn Infra. & Maint. $5 Bn Supply $1½ Bn HVD System $½ Bn LVD System $2½ Bn Substations $½ Bn . . . consists of needed and modular projects. 28
Slide 30: Age of Electric Distribution
Age of Electric Distribution . . . Electric Dist. Gas $3½ Bn Infra. & Replacements needed to renew our system Maint. $5 Bn Supply $1½ Bn 1st Quartile 2nd Quartile 3rd Quartile 4th Quartile Consumers Energy Source: FERC Form 1, remaining book value divided by original cost . . . requires substantial
Slide 31: Electric Distribution Investment Opportunities
Electric Distribution Investment Opportunities . . . LVD System Electric $200,000 to rebuild one mile Dist. Gas $2½ Bn $3½ Bn Infra. & Maint. ~5,000 per year in plan $5 Bn Supply $3,500 per pole replacement $1½ Bn Substations $1 MM avg per upgrade $½ Bn ($7 - $8 MM to replace) HVD System ~33% are pa
Slide 32: Electric Supply Investments
Electric Supply Investments . . . Current Clean & Lean Renewables in Plan Supply Opportunities Electric Dist. Gas Palisades $3½ Bn Infra. & expires 2022 Maint. PPAs $5 Bn MCV expires Supply 2025 $1½ Bn In the Plan Average age of coal plants >50 Owned years; potential Clean Energy ~$1 Bn future shut
Slide 33: Clean and Lean
Clean and Lean . . . Old Utility Model Clean And Lean Big Build Supply Supply Fully utilize Modular Retirement assets Excess supply Big Excess Build supply Modular Actual Modular Demand Demand EE & DR Excess O&M O&M supply Expected Demand Fuel Fuel Big Bets Lower Risk Results in excess capacity, hig
Slide 34: Electric Customer Prices
Electric Customer Prices . . . a Residential Bills Industrial Rates 20 20% 30 % 26% Industrial rates improving rapidly Worse 20Worse Rates & 10 Fuel Rates & Act 169 10 8% National Avg Midwest Avg 0 0 Residential bills below U.S. average Better -10 Better -10 (12)% Rates (13)% -20 Rates & Rates & Fue
Slide 35: Gas System Investment
Gas System Investment . . . Compression and Storage Electric $½ Bn Dist. Gas $3½ Bn Infra. & Maint. $5 Bn #1 Underground Supply storage $1½ Bn Transmission #5 Transmission $2 Bn #5 Distribution miles miles Distribution $2½ Bn U.S. LDC Rank, Source: DOT . . . up 40% from the last 10 years. 34
Slide 36: Gas Transmission
Gas Transmission . . . Projects in Plan Electric Dist. Gas Saginaw Trail (2800) $3½ Bn Infra. & Maint. 94 miles, 24” $5 Bn $636 MM Supply $1½ Bn Mid-Michigan (100A) 54 miles, 36” $385 MM South Oakland (3100) 22 miles PIC TURE 1,670 miles of transmission pipelines . . . significant investment over ti
Slide 37: Gas Distribution
Gas Distribution . . . Main Replacement Electric Dist. Gas $3½ Bn Infra. & • Started in 2012 Maint. $5 Bn • 25-year program Supply $1½ Bn • $75 MM capex per year Benefits Service Line Replacement Customer safety Reduced leaks • 185,000 replacements needed Lower future O&M • Only 2% complete • 20,
Slide 38: Affordable Gas Bills
Affordable Gas Bills . . . a Capex Provides Avg. Res. Bill ($/ month) -36% Safety 100 $89 Reliability Economic Growth $57 0 2010 2017E _____ Source: Internal July Forecast a Information pre-tax reform NYMEX Henry Hub $/ MCF ~$4.40 <$3.00 Flat Source: EIA.gov (Historical Annual Average & Curren
Slide 39: Year-End 2017 Earnings Call
CMS ENERGY Year-End 2017 Earnings Call
Slide 40: Agenda
Agenda Business Update Patti Poppe 2017 Results President & CEO 2018 Outlook & Priorities PEOPLE PLANET PROFIT Performance -- The Consumers Energy Way Financial Results & Outlook Rejji Hayes Executive VP & CFO Federal Tax Reform Update 39
Slide 41: Financial Results & Outlook
Financial Results & Outlook . . . Vs. 2017 Results Amount Prior Year • EPS a $2.17 +7% • Operating cash flow (OCF, MM) $1,705 Up $76 2018 Updates • EPS guidance raised a $2.30 to $2.34 +6% to +8% • Annual dividend $1.43 +7% Long-Term Outlook • EPS & DPS growth a +6% to +8% _____ a Adjusted EPS (
Slide 42: CMS' Performance Exemplifies People, Planet, Profit
CMS’ Performance Exemplifies . . . PEOPLE PLANET PROFIT a • Safest year on record • #1 Company in Michigan in • 15 years of +7% EPS Newsweek’s ‘Green growth • #1 Diverse Utility in the Rankings’ Nation and #1 Employer for • Raised dividend 7% YOY, Diversity in Michigan by • Highest U.S. utilit
Slide 43: Story of the Year
Story of the Year . . . Capital-Enabled SMART METERS Translates to > $10 MM in savings Process-Enabled 2.4 MM Installed Technology-Enabled UA REDUCTIONS INVOICE REVERSALS Amount Amount (MM) Down 54%; (MM) $ 80 $34 MM in Down 3 2.9 savings 90% $63 2 40 $29 1 0.3 0 0 2013 2017 2013 2017 . . . smart me
Slide 44: 2018 Priorities
2018 Priorities . . . • Safety of our employees & the public • Support Michigan policies & MPSC priorities • Continue expansion of renewables and commitment to sustainability • Meet our financial objectives • World class operating performance . . . will enable a 16th year of strong operational and f
Slide 45: Simple, Perhaps Unique Model
Simple, Perhaps Unique Model . . . Plan EPS Growth a 6% - 8% Self Funding: - Cost reductions 2 - 3 pts - Sales growth (continued economic development) 1 - Other (Enterprises, tax planning, etc.) 2 INVESTMENT SELF-FUNDED 5 - 6 pts Customer Prices “at or below inflation” <2% _____ a Adjusted EPS (non-
Slide 46: Large and Aging System
Large and Aging System . . . Electric Gas distribution distribution system replacement system is plan: 25 years, older than peers 27,000 miles Age of coal fleet is more 1,670 miles of gas than transmission pipeline; most 50 years built in the WWII era . . . requires significant customer investment.
Slide 47: Our Entire Cost Structure
Our Entire Cost Structure . . . Cost Components Above Market Costs 100% 100% 90% PPA PPA 80% Down Fuel and Power Costs Fuel $162 MM or 5% Fuel 70% annually 2011 2017 60% ~70% _____ Source: 2011 - FERC Form 1; 2017 - Internal 50% O&M Reductions in Rates O&M Costs 40% $659 Down 30% Taxes $87 MM $572 o
Slide 48: Economic Development
Economic Development is . . . Our Service Territory Outperforms Examples of New Business a Electric Grand Gas ~2% Industrial Rapids Michigan U.S. Combination Growth in 2017! Building permits b +330% +181% +112% GDP 29 19 14 2010 2016 Population 6 ½ 4 Duro-Last Roofing 2010 2016 Unemployment 3.8 4.7
Slide 49: Long-Term Regulatory Planning
Long-Term Regulatory Planning . . . 2018 Regulatory/Policy 1/19: Impact of 6/15: File long-term 2H: Renewable 11/6: TBD: Tax tax reform filing generation plan (IRP) Reform Order Energy Plan Gubernatorial U-18494 U-18461 U-18231 elections Electric 3/1: File By 3/30: April/May: File 5-yr electric Fina
Slide 50: Consistent Growth Through Adversity
Consistent Growth Through . . . b 7% CAGR a EPS +6% to 8% Dividend +7% Weather Recession Recession Help _____ _____ Hurt a Adjusted EPS (non-GAAP) b Non-GAAP Cold 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Feb. Cold Mild Hot Warm Mild Cold Summer- Hot Hot Warm Mi
Slide 51: 2017 Results
2017 Results . . . Results By Business Segment 2016 2017 EPS -- (GAAP) $1.98 $1.64 EPS Initial Adjusted a Guidance a Voluntary separation 0.03 -- $2.30 – $2.34 Consumers $2.36 Legacy settlement 0.01 0.01 Enterprises 0.11 0.09 Federal tax reform -- 0.52 Interest & other (0.30) (0.25) Adjusted (non-GA
Slide 52: Managing Work Every Year
Managing Work Every Year . . . a 2010 2011 2012 2013 2014 2015 2016 2017 EPS $2.20 Weather & Storms +7% Mild Summer +7% $2.00 Cost +7% productivity above plan Cost Cost productivity productivity $1.80 +7% above plan Reinvestment Storms Hot Mild Reinvestment Summer Winter +7% $1.60 RECORD Hot WARM Of
Slide 53: 2017 Financial Targets Achieved
2017 Financial Targets Achieved . . . Target Actual Adjusted EPS (non-GAAP) $2.14 to $2.18 +6% to +8% $2.17 +7% Operating cash flow (MM) $1,650 $1,705 Dividend payout ratio (non-GAAP) Customer price (excl. fuel) > 62% 62% Electric ~2% 1.9% Gas ~2% 1.2% FFO/average debt (non-GAAP) ~18% ~19¾%
Slide 54: 2018 EPS Guidance Raised
2018 EPS Guidance Raised . . . a Adjusted EPS (non-GAAP) Utility Electric $1.65 - $1.67 Gas 0.75 - 0.77 Total Utility $2.40 - $2.44 Enterprises 0.13 Parent and other (0.23) Total EPS $2.30 - $2.34 +6% to +8% a _____ a Adjusted EPS (non-GAAP) . . . building on a strong 2017 performance. 53
Slide 55: 2018 EPS
2018 EPS . . . a $2.30 - 16¢ 3¢ 6¢ $2.34 $2.17 (8) - (12)¢ Managing Work Our Model (customer rates <2%) 2017 2016 Absence of 2017 Cost Savings Rates & Economy, 2018 2017 Weather Investment Enterprises, Tax & Other _____ a Adjusted EPS (non-GAAP) . . . illustrates another year of 6% to 8% growth. 5
Slide 56: Tax Reform Impact
Tax Reform Impact . . . Impacts Takeaway Utility • Lower customer rates create Facilitates self-funding capex headroom (up to 4%) strategy Enterprises & • Lower tax rate improves Offers modest EnerBank earnings diversification Parent interest • Largely offset by EnerBank Unique tax shield inte
Slide 57: Needed Customer Investment
Needed Customer Investment . . . Large and Aging System Rate Base Growth >$50 Bn Electric Gas 10-Yr 7% $21 Bn CAGR $15 Bn 60% $10 Bn 5-Yr Plan 70% 40% 30% >$18 Bn System Need 2017 2022 . . . potentially pulled forward by tax reform. 56
Slide 58: Operating Cash Flow Generation
Operating Cash Flow Generation . . . Amount (Bn) a Gross operating cash flow $ 2.9 2.7 2.6 2.5 2.4 2.2 2.3 Interest, working capital 2.0 and taxes 1.9 1.7 1.65 1.65 1.4 Operating cash flow 0.9 ~$9 billion in aggregate Investment 0.4 (0.1) (0.6) _____ a Non-GAAP Cash flow before dividend (1.1) 2017 2
Slide 59: Credit Metrics Maintained
Credit Metrics Maintained . . . S&P / S&P Moody’s Fitch a Fitch Moody’s (Dec. ‘16) (Apr. ‘17) (Jul. ‘17) FFO / Average Debt AA- Aa3 A+ A1 19% Consumers A A2 Secured ~18% A- A3 BBB+ Baa1 BBB Baa2 17% BBB- Baa3 < 30% BB+ Ba1 HoldCo Debt BBB+ Baa1 BBB Baa2 CMS Unsecured BBB- Baa3 BB+ Ba1 BB Ba2 Present
Slide 60: 2018 Financial Targets
2018 Financial Targets . . . 2018 Long-Term Plan Adjusted EPS (non-GAAP) $2.30 to $2.34 +6% to +8% +6% to +8% Operating cash flow (MM) a $1,650 Up $100/yr Dividend payout ratio (non-GAAP) ~ 62% ~ 62% Customer price Electric (1)% ~ 2% Gas (3)% ~ 2% FFO/average debt (non-GAAP) ~18% ~17% - 19% Customer
Slide 61: 2018 Sensitivities
2018 Sensitivities . . . Full Year Impact Sensitivity EPS OCF (MM) Sales a • Electric (37,477 GWh) + 1% + 6¢ + $ 20 • Gas (303 Bcf) + 5 + 9 + 40 – – 55 Gas prices (NYMEX) + 50¢ + 0 + ROE (planned) • Electric (10.1%) + 10 bps + 1½ + 6 • Gas (10.1%) + 10 + ½ + 3 Interest rates +100 bps – < 1 – 7 + + _
Slide 62: Compelling Investment Thesis
Compelling Investment Thesis Aging Infrastructure Strong Cash Flow & Healthy Balance Sheet Diversified Service Territory _____ Cost Controls Constructive Regulation a Case U-16191 _____ b Case U-17990, 2016 Order 61
Slide 63: 2017 EPS
2017 EPS . . . a $2.17 10¢ $2.02 8¢ 12¢ (15)¢ Managing Work Our Model (customer rates < 2%) 2016 2016 Weather & Cost Savings Rates & Economy, 2017 2017 Storms Investment Enterprises, & Other _____ a Adjusted EPS (non-GAAP) . . . delivered a strong 7%. 62
Slide 64: DIG (750 MW) & Peakers (200 MW)
“DIG” (750 MW) & Peakers (200 MW) . . . Pre-Tax Income Opportunities (MM) $ 80 $75 70 Contracts (layering in over time) 60 $55 +$40 50 $45 Better +$20 40 Performance $35 $30 30 Better Performance 20 $12 10 Outage pull-ahead 0 2015 2016 2017 2018 Future Capacity ($/kw-mth) ≈ $1.00 ≈ $2.00 ≈ $3.00 ≈ $
Slide 65: 2017 Cash Flow (non-GAAP)
2017 Cash Flow (non-GAAP) CMS Energy Parent Consumers Energy Amount Amount (MM) (MM) Cash at year end 2016 $ 43 b Cash at year end 2016 $ 152 Sources Sources Consumers Energy dividend and tax sharing $ 523 Operating (depreciation & amortization $872) $ 2,122 Enterprises & other 85 Other working capi
Slide 66: 2018 Cash Flow Forecast (non-GAAP)
2018 Cash Flow Forecast (non-GAAP) CMS Energy Parent Consumers Energy Amount Amount (MM) (MM) b Cash at year end 2017 $ 75 Cash at year end 2017 $ 65 Sources Sources Consumers Energy dividend and tax sharing $ 821 Operating (depreciation & amortization $922) $ 1,982 Enterprises 76 Other working capi
Slide 67: GAAP Reconciliation
GAAP Reconciliation
Slide 68: Earnings Per Share By Year GAAP Reconciliation
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 2017 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 $1.64 Pre
Slide 69: Reconciliation of GAAP Net Income to Non-GAAP 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 2017 1Q 2Q 3Q 4Q YTD Dec (1) Net Income Available to Common Stockholders $ 199 $ 92 $ 172 $ (3) $ 460 Reconciling items: Electric utility and gas util
Slide 70: 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 Twelve Months Ended 12/31/17 12/31/16 12/31/17 12/31/16 Electric Utility Reported net income per share $ 0.22 $ 0.23 $ 1.62 $ 1.64 Reconciling it
Slide 71: Reconciliation of Gross Operating Cash Flow to GAAP Operating Activities
Consolidated CMS Energy Corporation Reconciliation of Gross Operating Cash Flow to GAAP Operating Activities (unaudited) (mils) 2017 2018 2019 2020 2021 2022 Net cash provided by operating activities $ 1,705 $ 1,650 $ 1,650 $ 1,750 $ 1,850 $ 1,950 Other operating activities including taxes, interest
Slide 72: Consumers Energy 2017 Cash Flow GAAP Reconciliation
Consumers Energy Company 2017 Cash Flow GAAP Reconciliation (in millions) (unaudited) Reclassifications From Sources and Uses to Statement of Cash Flows to Sources and Uses Interest/ Capital Consolidated Statements of Cash Flows Tax Other Financing Lease Pymts Securitization Common Presentation Sour
Slide 73: CMS Energy Parent Company 2017 Cash Flow GAAP Reconciliation
CMS Energy - Parent Company 2017 Cash Flow GAAP Reconciliation (in millions) (unaudited) Reclassifications From Statement of Cash Flows to Sources and Uses Consolidated Statements of Cash Flows Non Equity Presentation Sources and Uses GAAP Uses non-GAAP Description Amount as Operating Other Amount D
Slide 74: Consolidated CMS Energy 2017 Statements of Cash Flow
Consolidated CMS Energy 2017 Consolidation of Consumers Energy and CMS Energy Parent Statements of Cash Flow (in millions) (unaudited) Eliminations/Reclassifications/Consolidation to Arrive at the Consolidated Statement of Cash Flows Statements of Cash Flows Other Consumers Equity Consumers CMS Pare
Slide 75: Consumers Energy 2018 Cash Flow Forecast GAAP Reconciliation
Consumers Energy Company 2018 Cash Flow Forecast GAAP Reconciliation (in millions) (unaudited) Reclassifications From Sources and Uses to Statement of Cash Flows to Sources and Uses Interest/ Capital Consolidated Statements of Cash Flows Tax Other Financing Lease Pymts Securitization Common Presenta
Slide 76: CMS Energy Parent Company 2018 Cash Flow Forecast GAAP Reconciliation
CMS Energy - Parent Company 2018 Cash Flow Forecast GAAP Reconciliation (in millions) (unaudited) Reclassifications From Statement of Cash Flows to Sources and Uses Consolidated Statements of Cash Flows Non Equity Presentation Sources and Uses GAAP Uses non-GAAP Description Amount as Operating Other
Slide 77: Consolidated CMS Energy 2018 Forecasted Statements of Cash Flow
Consolidated CMS Energy 2018 Forecasted Consolidation of Consumers Energy and CMS Energy Parent Statements of Cash Flow (in millions) (unaudited) Eliminations/Reclassifications/Consolidation to Arrive at the Consolidated Statement of Cash Flows Statements of Cash Flows Other Consumers Equity Consume
Slide 78: Reconciliation of Non-GAAP FFO to Average Debt Ratio
CMS ENERGY CORPORATION Reconciliation of Non-GAAP FFO to Average Debt Ratio (Unaudited) FUNDS FROM OPERATIONS In Millions Year Ended 12/31/17 Net Cash Provided by Operating Activities $ 1,705 Reconciling item: Securitization amortization and other 10 Funds From Operations (FFO) – Non-GAAP $ 1,715 AV
Slide 79: 2018 Guidance Raised: $2.30 - $2.34
Top of Mind Tax Reform Impact . . . Clean Energy Goal . . . Impacts Takeaway By 2040 2018 Guidance Raised: $2.30 - $2.34 Utility • Lower customer rates create Facilitates self-funding capex headroom (up to 4%) strategy Enterprises & • Lower tax rate improves Offers modest EnerBank earnings diver
Slide 80: Simple, Perhaps Unique Model / Our Entire Cost Structure
Simple, Perhaps Unique Model . . . Our Entire Cost Structure . . . Cost Components Above Market Costs 100% 100% Plan 90% PPA PPA EPS Growth a 6% - 8% 80% Down Fuel and Power Costs Fuel $162 MM Self Funding: 70% or 5% Fuel annually 2011 2017 - Cost reductions 2 - 3 pts 60% ~70% _____ Source: 2011 - F