Cms Energy Corporation · NYSE:CMS
Cms Energy — Non-Deal Roadshow (June 2015)
37 slides from Cms Energy's roadshow presentation, Jun 9, 2015
Slide 1: CMS Energy Investor Meetings June 9 & 10, 2015
Exhibit 99.1 Exhibit 99.1 renewable sales Cmsinenergy the Great cmsLakes listedarea nyse Investor Meetings June 9 & 10, 2015 Ludington Pumped Storage Fourth largest in the world Ray Compressor Station #1 LDC in gas storage Cross Winds ® Energy Park #2 in
Slide 2: Forward-Looking Statements and Non-GAAP Information
Cms relevant in INFORMATION” Energy’s Consumers events measures Accepted operating the website, CMS company’s energy orEnergy’s legal www.cmsenergy.com “FORWARD-LOOKING circumstances Accounting to financial Energy’s the This decisions. reported most presentation and and performance, results directly
Slide 3: CMS Energy Future Shines Bright
CMS Energy Energy GAAP) Consistent Policy Past Next 52008 Growth .Years . . CMS Improved Performance LawEnergy Law Investmenta(2010-2014) Future . . . . Shines Bright even(bils) easier,Sustainable $6.4 lotsFuture withCapacity $7.6 ofOp! Growth upsides. $3.50 2 +5% to O&M Reductions +7% / year(10)% (
Slide 4: Investment cap and catch-up opportunity
Investment 15% cap Source: 14% 15%“Catch-up” 10K; 12%actual 2003 . amounts . .2004 . Amount 2005 through (billions) 20062014 2007$1.8 smoothed 2008Cms 2009 energy for2010 illustration Peers 2011 CMS 2012 . creating Restructuring 2013 2014 an opportunity 2015 Catch-up 2016for 2017 >the $1.5 2018 next
Slide 5: Capex maintenance with no big bets
Capex Maintenance with noup “big 45%bets” Gas . . .Infrastructure over Cms ten energy years! 2005-2014 New 4 Generation $10.7 Environ. bil Organic smart growth Energy +45% electric Electric Reliability Maintenance Opportunity Gas Infrastructure $20 + bil +30% Environ. Opportunity electric Reliabilit
Slide 6: Growing the Gas Business
Growing the Gas 2015—2024 Interconnects expanding Service Business one Territory Capital of theInvestment —1.7 largestmillion systems Amount customers in the (bils) country. —28,854 $ 7 +93% 5 miles $5.6of $2.9 distribution 0 2005—2014 and transmission New Customers —309 Infrastructure Bcf gas stora
Slide 7: Gas infrastructure investment
Gas gates, city Infrastructure 7 regulation . . . CMS stations, ENERGY 24 relief Main valves Replacements More Conversions 800 miles 70,000 $1 billion customers WHAT’S Replace IN Compression Transmission35,000 Mains hp 275$300 miles million investing New$5.6 Connections billion over 100,000 the next
Slide 8: Upside Today: MCV PPA expires
UpsideToday 6,000 MCV PPA Capacity Expires 410 Opportunities MW2025 Shortfall Future.540 2015 . . . MW CMS 201X ~800 ENERGY 2022 MW2025 780 Capacity emerging MW Ppa’s Growth incrementally expire Over1,240 Next with MW Tenreplacements ~9,400 Years MW MW11,000 not PPAyet 580 NOT in Owned plan! IN PLAN
Slide 9: Capacity and energy upside scenarios
Capacity (Forecast) and energy &$4.50 contracts Energy $7.50 Price layered (CONE) Increases in over New. .time Business . Cms . adding energy •Long-term value Was to (mils) our Energy “DIG” Now• 250 (mils) plant. MW Upside 8 at $4.00 Scenarios per kWm (mils) (6/14) Energy • 250Capacity MW at $6.02 +
Slide 10: Sales Growth and economic indicators
Sales Growth . . 2016—2019 . Cms thru energy Economic Indicators Grand Rapids Michigan 1/22013 % -2.5% 8-5.0% 2008-2009 2011 2014 3Recession 2010-2013 Recovery 5.4 5.4 2014 2015 Future *Annualized numbers April a Weather 2015 Annual Electric normalized Salesa Industrial vs. U.S Total Building prior
Slide 11: Examples of new business and economic growth
•Manufacturing Economic Investments Growth thru 2015 . . Cms 21 Metal Dicastal 20energy Durolast Examples Petroleum Roofing of New 19 Plastics Continental 19Business Other 19Electric Dairyup Total Betz Gas 155Combination Plasan 2 1/Announcement 2% of sales Magna-Cosma . another growth. Enbridge Dens
Slide 12: O&M cost reductions
O&M to Gas Cost Switching Reductions (Jackson) . . . .“Pole Cms energy Top” Hardening 2006 2014Productivity/Smart 2019 $1.1 bil DownEnergy 10% $1.0 . provide bil Down more 7% headroom $0.9 bilfor inflation more capital ?2% Inflation investment. ?2%11 Coal to Gas Switching (Zeeland) Smarter Benefit P
Slide 13: O&M cost savings versus peers
O&M2015 2014 Meters funding Cost —investment 52018 Savings — 25Lines Eliminate and . . .smoothed .reducing CmsWaste energy for risk. (UA’s) illustrative O&M 12 —15 Trend purposes —vs20Peers Mortality O&M 50%Cost Tables 0 -25Savings ~6% & +50 per 2014 +year 502014 Discount Peers&~2% 2015 Rates per 20
Slide 14: Adjusted EPS guidance and reinvestment
“Reinvestment” 2014 $1.77 +7%Helps Weather Customers 14¢ Natural . . Cms Offsets energy (1)Adjusted Cost & Other EPS (non-GAAP) 4 Total 17¢ Guidance Increase January forestry March Accelerate 31 June “DIG” 30 September Outage to 2015 30 December — $8 mil. AND cost inprovides 2015; $10 sustainable, m
Slide 15: Electric rates improving
Electric 30 improving % 26% Customer Rates for industrial 21% Prices Rates customers. Cms& energy 13% 14 Fuel Residential Rates & Bills 7% Improving Worse 20 % fastNational Design Avg 3% Midwest Outstanding avg (12)% (5)% Policy (14)%orRates market (13)% might Rates eliminate & Rates gap &-30 (19)%
Slide 16: Customer satisfaction rank
Customer2010 Quartile Satisfaction 2012 2014. . Cms Present energy RankElectric 2016 Residential 1st QuartileBusiness 2nd Quartile continues #3 #6to3rd improve Quartile rapidly. 4th Quartile 15 2010 2012 2014 Present Rank 2016 Residential Business Gas 1st Quartile 2nd Quartile #2 #9 3rd Quartile 4th
Slide 17: Governor Snyder's energy leadership
Governor waste Michigan by 15% Snyder’s customers Environmentally Leadership and investors. On protective Energy 16 •. .Consider . . CMS ENERGY environment Governor in energy Snyder’s decisions Four How Pillars We Could Adaptability Get There • IRP-15% process waste to RENEWABLES determine generatio
Slide 18: Michigan energy law builds on 2008 Law
Michigan .Adaptability builds onEnergy 2008 Reliability Law! Law 17Update Affordability . . . . CMS Environmental ENERGY Historical protectiontest Update year 12-18 Present: months 10% cap regulatory w/o subsidy lag No Governor cap on ROA Snyder • 10% SB0247 by 2015 SB0235 renewables > 10% Energy CA
Slide 19: Experienced policy makers
Experienced Policy Commission John Quackenbush Makers . . . . (R), CMSChairman ENERGY Term Governor Ends: Rick July 2, Snyder 2017 Sally Powering Talberg Michigan’s (I) TermComeback Ends: July Energy 2, 2019Committee Greg WhiteChairs (I) Term CONSISTENT Ends: July 2,LEADERSHIP 2015 . . . provide Sen
Slide 20: Why Invest in CMS Energy?
Why Invest headroom CMS ENERGY (Investment, in CMS .. . next Energy? Sales, 10 years Our Cost, even Growth & DIG) brighter Engine PARTNERS than (2015-2024 last 10 inyear progress Capex) record! (Customers, $15.5 19 Billion Regulators, 5%—7% EPS & Policy a growth Makers) MorePASSION “upside” to $5imp
Slide 21: Appendix
Appendix
Slide 22: Customer focus: excellent operations
Customer U.S. Nonfarm Focus: CMSExcellent ENERGY Operations . enhance. . productivity $10 million in andsavings reduceper costs. year21+54% 56% +15% 71% 2% U.S. Productivity 11% a 2007 2014 Target 2017 a Source: United State Dept. of Labor Bureau of Labor Statistics;
Slide 23: Customer focus: engagement scores
Customer Focus: Engagement scores Excellent at levelsOperations higher than. .most . . Employee admired Engagement companies Target MosttoAdmired maintain Companies high levelBest of engagement Places to Work CMSFirst ENERGY Quartile! . include 63% 75% actively 78%engaged Peers High employees. Perfo
Slide 24: Carbon reduction and Clean Power Plan
Consumers 2020 2025 2029 Appears 2030. .CMS . . Carbon ENERGY Tonnage . to Reduction be in a good Million carbonTons position. of CO223 (Preliminary) 2005 Baseline Clean Power Plan Consumers Energy “Implied” EPA Target Projected emission level 25 23 21 19 17 15 2014
Slide 25: Generation strategy: new supply sources
Generation ZEELAND $2.00 per watt Strategy: Cross watt? Winds .New . . .® combined Supply BIG 5 Sources Palisades cycle gas . .0. is Combined Levelized the mostcost Cycle attractive of Gas newnew Plant build source Wind (¢/kWh) of Coal supply. New Nuclear Build 24 Residential ConsumersSolar Energy G
Slide 26: Capital expenditures 2015-2024
$Capital Distribution 1,116 64 $$134 Expenditures 911$$196 544 983198 $$612 1,073 208 2015-2019 $ 1,156 262 $ 5,171 255 Environmental 2020-2024 1,119 $ 4,704 1,575 $ 2015-2024 9,875 2,694 254Gas 98Maintenance 136 513 2015 153 497 2016 212 499 (Electric 2017 853 472139 2018 474&992 2,455 2019 Gas) Ga
Slide 27: Capacity diversity
CMS37% 12% ENERGY Nuclear Capacity Oil 6%Diversity 8% Renewables . . . . Nuclear 3% Pumped 6% OilStorage 8% Renewables Coal 41%9% 11% Coal 2005 34% 31% Pumped Gas . evolving Storage 2014 to cleaner 11% 32% generation Gas Nuclear while becoming 8% 6% Oil more Purchases cost competitive. 3% Coal 24%26
Slide 28: Operating cash flow and investment
taxes CMS Up ENERGY $0.7 $0.5 $0.5 $0.4Billion Operating $0.3 Investment $0.2 .. .Cash $ 1/2ofGrowth . . upFlow Pct billion or Market. .Cap 30% . Gross (as of over five operating Dec. 2014) years! cashCap flowa 27 Invup OCF $0.1CMS billion 13%16% per year 15% Amount Peers(bils) 14 12$a2.5 Non-GAAP 2
Slide 29: Credit ratings outlook
Credit Ratings Outlook continuous Stable improvement. .Stable . . Scale Consumers S&P 28 Moody’s Secured S&PCMS Moody’s ENERGY (Dec.CMS ‘14) (Mar. Unsecured ‘15) A+ Present A1 APrior A2 A-2002 A3 BBB+ Reflects Baa1 Consistent BBB Baa2Performance BBB- Baa3 Less BB+Risk Ba1 Customer BBB Baa2 Focus BBB
Slide 30: 2015 sensitivities
2015 (authorized) ROE Reflect Sensitivities 2015 sales •.forecast; CMS Electric ENERGY weather (10.3%)2015 adjusted + 10 Impact bps.+. reflect 0.01 Status + strong 5Sensitivity • Gasrisk (10.3%) mitigation. EPS +OCF 20 +29 (mils) 0.01 +Sales 4 Interest a • Electric Rates (38,093 +100 bps GWh) + – <+
Slide 31: Diversified customer base
Electric Corporation $2.3 BILLIION Customer of America . “autos” Base Diversified Meijer only 5% State of. Top of gross Michigan Ten margin. Customers Spectrum 30 CMS (2014 Health ENERGY Ranked AT&T by Percentage Deliveries)of Hemlock electric Semiconductor gross margin is General 2.4% 2014 Motors E
Slide 32: Rate cases and securitization
2015 2015 Decommissioned 2014 Gas And 2016 Electric Our Filed View Rate implement . primarily Cases .Securitization . . for CMS customer ENERGY B)improvement Final 2014B)2015 Investment with 2016large Our recovery O&M View GAS $163 offsets. Filed M 31 $110 Se M A)Surcharge Settled $45 Ends million O
Slide 33: GAAP Reconciliation
GAAP Reconciliation
Slide 34: GAAP reconciliation of earnings per share
CMSNA —GAAP 1.25 (0.03) $0.87 NA (0.02) ENERGY $1.39 * NA (*) ($0.30) 0.09 Asset *$0.57 Less CORPORATION (0.03) $0.64 impairment $0.84 than(0.11) ($0.44) $500 $1.21(0.01) thousand charges, (a) ($0.41) $1.26 Earnings * 0.03 net or ($1.02) $1.36 $0.01 —— Corporate Per$1.45 $1.20 Share 1.82 per share.
Slide 35: Gross operating cash flow to GAAP reconciliation
CMS Energy 1,940 payments $ 1,955 andReconciliation $working 2,081 $capital 2,194of$(386) Gross 2,358 (280) Operating Enterprises (583) Cash (631) Project Flow (646) Cash to(713) GAAP Flows NetOperating 20 cash 20provided 28 50 Activities 52by 55operating Gross (unaudited) Operating activities (mils
Slide 36: Investor information and contact
CMS ENERGY organic Customer Present Capacity provides Energy Plaza, 2010 (no sustainable, increase Satisfaction “big 2012 Jackson, OUR bets”) 38 2014 MW premium MODEL; . Self-funded MI . Rank . Adjusted . 49201 Electric 2016 growth OUR www.cmsenergy.com — EPS 1st Residential PLAN for No Quartile (no
Slide 37: Summary of plan and non-GAAP notes
CMS $0.96 + Electric $0.5ENERGY $1.08 $1.8 Recovery Maintenance Affordabilit Bills combined contains materially. website 15 < 2%20% +$1.21 $0.6 Actual .36 $2.4 2005—2014 $1.45 Plan $1.3 at“forward-looking Down 2014 cycle National $1.26 Upsides 2009 www.cmsenergy.com It7% Environmen also2015 — 3% con