Cms Energy Corporation · NYSE:CMS
Cms Energy — Investor Presentation (June 2023)
29 slides from Cms Energy's investor presentation, Jun 9, 2023
Slide 1: Leading the Clean Energy Transformation: Investor Meetings June 2023
Leading the CLEAN ENERGY TRANSFORMATION Investor Meetings June 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: CMS Energy Overview
CMS Energy Overview Corporate Structure Key Information CMS Energy 2022 Financial Statistics (NYSE: CMS) Based in Jackson, MI ~8,500 Employees (41% unionized)a Consumers Energy NorthStar Clean Energy $8.6B Revenue 2022 $838M Adjusted net incomeb >95% regulated Avg. Rate Base 20 years Industry-leadin
Slide 4: Consumers Energy Positioned Well
Consumers Energy Positioned Well . . . 4th Largest Combination Utility Electric Gas Combined • Electric Utility 1.9M electric customers 7,526 MW of capacity • Gas Utility 1.8M gas customers 309 Bcf gas storage • Serving 6.7M Michigan residents Attracted Planet Goalsa >750 MW of new or expanding • Ex
Slide 5: NorthStar Clean Energy Provides Clean Solutions
a NorthStar Clean Energy Provides Clean Solutions . . . Renewable Platform • 368 MW of wind (OH, TX) • 64 MW of biomass (MI, NC) • 30 MW of solar (MI, WI) DIG & Other • >1,000 MW in MI (including DIG & Peakers) • Upside: tightening supply with future retirements Presentation endnotes are included af
Slide 6: Over 135 years of Sustainable Business Practices
Over 135 years of Sustainable Business Practices . . . Founded by the Exiting Coal in 2025 and Foote Brothers in 1886 adding 8 GW of solar by 2040 Solar Gardens Cross Winds Energy Park Karn Coal Plant Ludington Pumped Storage . . . cleaner and leaner than ever before. 6
Slide 7: Our Commitment to Sustainability
Our Commitment to Sustainability . . . TOP QUARTILE FOR GLOBAL UTILITIES DOUBLE A RATED Received U.S. Environmental Protection Agency 2023 Energy Star® Partner of the Year Sustained Excellence Award . . . continues to be recognized globally. 7
Slide 8: ESG Disclosures are Transparent
ESG Disclosures are Transparent . . . • CMS Energy & • DE&I Website Consumers Energy Websites • EEO1 Report • SEC Filings (10-K & Proxy) • SASB Index (Electric Utilities & • Carbon Disclosure Project Power Generation) • Report Scope 1, 2 & 3 Emissions • SASB Index (Gas Utilities & Distributors) • Wa
Slide 9: Investment Thesis
INVESTMENT THESIS
Slide 10: Investment Thesis
Investment Thesis . . . Industry-leading net zero commitments Clean Energy Leader Diversified Service Territory Infrastructure Excellence through the Renewal Constructive regulatory jurisdiction Strong Cash Flow Constructive & Balance Sheet Legislation Affordable Prices Premium total shareholder ret
Slide 11: Infrastructure Renewal is Necessary
Infrastructure Renewal is Necessary . . . Electric distribution system is older than Exiting coal in 2025 and peers adding 8 GW of solar by 2040 Goal to improve ≥1K miles annually 25 years of main replacement through our >$500M of vegetation management spend over Enhanced Infrastructure 5 years to i
Slide 12: 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/
Slide 13: De-risking Inflationary Pressures
De-risking Inflationary Pressures . . . Near-term Risk Mitigation Episodic Cost Savings Global Risks Countermeasures Year Event Savings ✓ Executed 5-yr union contracts in 2020 (>40% unionized) 2022 Palisades retirement >$90M Labor a ✓ ~95% non-union retention rate 2023 Karn 1&2 coal unit retirements
Slide 14: 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 CMS Energy • Constructive return on regulated Senior Unsecured BBB Baa2 BBB in
Slide 15: Expansive Economic Development Efforts
Expansive Economic Development Efforts . . . Electric Gas Combined 2022 New Load 2023 New Load Attracted Gotion >750 MW Global EV Battery Manufacturer of new or expanding load ~$2,400M investment since 2015a >2,000 jobs FlavorSum Fastest-Growing North Hemlock Semiconductor American Flavor Company Le
Slide 16: Net Zero Commitments Drive Decarbonization
Net Zero Commitments Drive Decarbonization . . . 2025 Zero coal ~60% carbon emissions reduction a Net zero methane emissions for our gas delivery system and 20% 2030 b gas customer emissions reduction Accelerating vintage main and service replacements Zero coal Renewable natural gas Net zero carbon
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: 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+ Cold Mild Hot Warm Mild Cold Summer- Hot Hot Warm Mild
Slide 19: Appendix
Appendix 19 19
Slide 20: Approved 2021 IRP
Approved 2021 IRP . . . Key Objectives 2021 IRP 2018 IRP One of the 1st in • Exit Coal Operations the nation In 2025 By 2040 Retire: Karn 1&2 ~60% carbon 2023 2023 emission reduction Campbell 1&2/3 in 2025a 2025 2031/39 • Reliable, Affordable, Capital Upside Covert $815M / >1 GW No new dispatchable
Slide 21: 2022 Asset Mix
2022 Asset Mix . . . Total PP&E ($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 22: Financial Results & Outlook
Financial Results & Outlook . . . Q1 2023 Results Amount Commentary Adjusted EPS $0.70 Managing through weather 2023 Outlook Adjusted EPS Guidance $3.06 – $3.12 Toward the high end Annual Dividend Per Share $1.95 Up 11¢ Long-Term Outlook Adjusted EPS Growth +6% to +8% Toward the high end Dividend Pe
Slide 23: Utility Customer Investment Plan
Utility Customer Investment Plan 5-Year Plan ($B) 2023 2024 2025 2026 2027 Total Clean Energy Generation $0.7 $0.6 $0.8 $0.5 $0.5 $3.1 59% Electric utility investment Electric Distribution, Covert & Other 1.8 1.0 1.1 1.1 1.1 6.1 Gas Utility 1.2 1.3 1.3 1.3 1.2 6.3 Total $3.7 $2.9 $3.2 $2.9 $2.8 $15.
Slide 24: Endnotes
ENDNOTES 24 24
Slide 25: Presentation Endnotes
Presentation Endnotes Slide 3: aExcludes seasonal and contract workers bAdjusted, (non-GAAP) cDividend per share 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), net zero GHG emissions for
Slide 26: 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 27: 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 3/31/23 3/31/22 Net Income Available to Common Stockholders $ 202 $ 351 Reconciling items: Disposal of discontinued operations gain - (5) Tax
Slide 28: Reconciliation of GAAP Cash Flows to Non-GAAP Funds from Operations
CMS ENERGY CORPORATION Reconciliation of GAAP Cash Flows from Operating Activities to Non-GAAP Funds from Operations Reconciliation of GAAP Indebtedness to Non-GAAP Adjusted Debt (Unaudited) FUNDS FROM OPERATIONS In millions Year Ended 12/31/2022 Net Cash Provided by Operating Activities $ 855 Recon
Slide 29: 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 12/31/22 12/31/21 12/31/22 12/31/21 Net Income Available to Common Stockholders $ 168 $ 637 $ 827 $ 1,348 Reconciling item