investor meetings march 2020 · pdf file 2020-03-25 · . . . is a world class...

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  • FOCUSED ON WORLD CLASS PERFORMANCE

    Investor Meetings March 2020

  • 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 forward-looking statements should be considered in the context of the risk and other factors

    detailed from time to time in CMS Energy’s and Consumers Energy’s Securities and Exchange Commission filings. Forward-looking

    statements should be read in conjunction with “FORWARD-LOOKING STATEMENTS AND INFORMATION” and “RISK

    FACTORS” sections of CMS Energy’s and Consumers Energy’s most recent Form 10-K and as updated in reports CMS Energy and

    Consumers Energy file with the Securities and Exchange Commission. CMS Energy’s and Consumers Energy’s “FORWARD-

    LOOKING STATEMENTS AND INFORMATION” and “RISK FACTORS” sections are incorporated herein by reference and discuss

    important factors that could cause CMS Energy’s and Consumers Energy’s results to differ materially from those anticipated in such

    statements. CMS Energy and Consumers Energy undertake no obligation to update any of the information presented herein to reflect

    facts, events or circumstances after the date hereof.

    The presentation also includes non-GAAP measures when describing CMS Energy’s results of operations and financial

    performance. A reconciliation of each of these measures to the most directly comparable GAAP measure is included in the appendix

    and posted on our website at www.cmsenergy.com.

    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 available to common stockholders and references to earnings per share are on a diluted basis.

    Adjustments could include items such as discontinued operations, asset sales, impairments, restructuring costs, regulatory items from

    prior years, or other items. Management views adjusted earnings as a key measure of the company’s present operating financial

    performance and uses adjusted earnings for external communications with analysts and investors. Internally, the company uses

    adjusted earnings to measure and assess performance. Because the company is not able to estimate the impact of specific line items,

    which have the potential to significantly impact, favorably or unfavorably, the company's reported earnings in future periods, the

    company is not providing reported earnings guidance nor is it providing a reconciliation for the comparable future period

    earnings. The adjusted earnings should be considered supplemental information to assist in understanding our business results, rather

    than as a substitute for the reported earnings. References to earnings guidance refer to such guidance as provided by the company on

    January 30, 2020.

    Investors and others should note that CMS Energy routinely posts important information on its website and considers the Investor

    Relations section, www.cmsenergy.com/investor-relations, a channel of distribution.

    2

    http://www.cmsenergy.com/ http://www.cmsenergy.com/investor-relations

  • CMS Overview

  • CMS Energy

    (NYSE: CMS)

    EnerBank Consumers

    Energy

    Gas

    Electric

    Enterprises

    4

    CMS Energy Overview Corporate Structure

    Senior Management Team

    Patti Poppe

    CEO

    Rejji Hayes

    CFO

    Brandon Hofmeister

    Gov’t & Regulatory Affairs

    DV Rao

    Strategy & Planning

    Shaun Johnson

    General Counsel

    Cathy Hendrian

    People & Culture

    Garrick Rochow

    Operations

    Brian Rich

    Customer Experience & Tech

    JF Brossoit

    Engineering

    91% of Operating

    Income

    _ b Non-GAAP

    2019

    Avg. Rate Base

    $11.5 Bn

    $6.1 Bn

    Key Information 2019 Financial Statistics

    Based in Jackson, MI

    Employees (37% unionized)

    Revenue

    Dividend per share growth

    Growth for past 17 years

    Adjusted net income b

    a

    _ _ _ _ _ c Non-GAAP CAGR

    c

    _ _ _ _ _ a Excludes seasonal workers

  • . . . is a world class utility.

    4th Largest Combination Utility • Electric Utility

    1.8 million electric customers

    8,241 MW of capacity

    • Gas Utility

    1.8 million gas customers

    309 bcf gas storage (#1 in the U.S.)

    • Serving 6.7 million Michigan residents

    Consumers Energy Planet Goals

    gallons of H2O saved

    reduction of waste to landfills

    acres of MI land enhanced,

    restored or protected

    carbon emissions

    of capacity from renewable

    sources

    used to generate electricity

    Near-Term By 2040

    5

    Consumers Energy . . .

  • CMS’ 2019 Performance Exemplifies . . .

    . . . world class performance delivering hometown service.

    PROFITPLANETPEOPLE

    6

    • Ranked #1 for customer

    satisfaction in Midwest

    residential gas by JD

    Power

    • Ranked top tercile for

    customer satisfaction

    in Midwest residential

    electric by JD Power

    • Attracted 75 MWs of

    new electric load to

    Michigan

    • Ranked 1st quartile for

    employee engagement

    • Approval of

    Integrated Resource

    Plan

    • Announced net zero

    methane emissions

    goal by 2030 for our

    gas delivery system

    • Expanded Utility wind

    portfolio by 30%

    • Enhanced, restored

    or protected ~1,500

    acres of land

    • Reduced water use by

    286 million gallons

    • Achieved 473 MWs of

    Demand Response

    • 17 years of +7% EPS

    growth

    • Raised dividend +7%

    YoY, 14th increase in as

    many years

    • Generated ~$1.8 Bn of

    operating cash flow

    • Issued tax-exempt

    financing to restore

    coal ash sites

    • IRP order approved

    5.88% incentive on

    PPAs

    a

    PERFORMANCE

    _ _ _ _ _ a Adjusted EPS (non-GAAP) CAGR

    • Constructive regulatory

    outcomes with electric

    settlement and gas order

    • Realized >$20 MM of

    waste elimination

    through the CE Way

    • Best performance ever

    for customer on-time

    delivery (COTD)

    • Finished #1 overall

    (2nd year consecutively)

    in the sector for cyber

    security testing

    • Reduced 600k calls

    to contact centers

  • Compelling Investment Thesis . . .

    . . . adaptive to changing conditions.

    Aging Infrastructure

    Constructive Regulation

    Strong Cash Flow & Balance Sheet

    Diversified Service Territory

    Affordable Prices

    Clean Energy Leader

    7

  • Large and Aging System . . .

    . . . requires significant customer investment.

    Electric

    distribution

    system is

    older than peers

    >2,400 miles of gas transmission pipeline; most

    built in the WWII era

    25 years of

    main replacement through our

    Enhanced Infrastructure

    Replacement Program

    Age of coal

    fleet is more

    than

    50 years

    8

  • Electric System Investment . . .

    . . . includes $1¾ Bn in renewables in the next five years.

    New Business & Support $1¾ Bn

    Capital Investment (Bn):

    Electric Utility

    New Utility Renewables

    Gas Utility

    Total

    $ 5½

    5

    $12¼

    Existing Fleet $1 Bn

    New Renewables $1¾ Bn

    System Reliability & Maintenance

    ~$2¾ Bn

    Generation Current

    Plan

    a

    a Support includes IT, Fleet & Facilities, Customer Experience, Asset Relocation and Cost of Removal

    9

  • Gas System Investment . . .

    Compression and Storage

    $½ Bn

    . . . focuses on new pipes and increased reliability of the system.

    Distribution & Support $3½ Bn

    Capital Investment (Bn):

    Electric Utility

    New Utility Renewables

    Gas Utility

    Total

    Current

    Plan

    $ 5½

    5

    $12¼

    Pipelines $1 Bn

    #1 Underground

    storage

    #5 Transmission

    miles #5 Distribution

    miles

    U.S. LDC Rank, Source: DOT a

    Support includes IT, Fleet & Facilities, Customer Experience, Asset Relocation and Cost of Removal

    a

    10

  • Utility Customer Investment Plan . . .

    . . . includes increased renewables and maintains focus on safety & reliability.

    Rate Base GrowthInvestment Plan

    Prior ‘19-‘23 PlanCapital Investment (Bn):

    Renewables

    Electric Utility

    Gas Utility

    T