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June 2015 Investor Presentation – Cms Energy

Cms Energy · Jun 1, 2015 · 40 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. June 2015 Investor Presentation – Cms Energy – slide 1
    Investor Meetings June 1 & 2, 2015 Ludington Pumped Storage Ray Compressor Station Cross Winds Energy Park Fourth largest in the world 1 LDC in gas storage 2 in renewable sales in the Great Lakes area
  2. June 2015 Investor Presentation – Cms Energy – slide 2
    Who Has the . . . . Best track record of consistent, high-end EPS growth Biggest O&M cost reduction track record Highest capital investment growth No need for block equity (dilution) over five years World-class regulation and…
  3. June 2015 Investor Presentation – Cms Energy – slide 3
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  4. June 2015 Investor Presentation – Cms Energy – slide 4
    CMS Energy Consistent Growth . . . . Future Shines Bright Sustainable Future Growth a 3.50 +5% to +7% / Past Next 5 year Performance Years Investment (bils) 6.4 7.6 (2010-2014) Capacity Op +7% /year O&M Reductions (10)% (7)%…
  5. June 2015 Investor Presentation – Cms Energy – slide 5
    Investment Catch-up . . . . Amount (billions) 1.8 1.5 per year Peers Peer Performance a Consumers Energy Peer Average CMS Capex Liquidity Cash Flow (oper) 20% 16% 15% 14% 15% 12% 2003 2004 2005 2006 2007 2008 2009…
  6. June 2015 Investor Presentation – Cms Energy – slide 6
    Capex Up 45% . . . . 2005-2014 2015-2024 10.7 bil 15.5 bil +45% Gas Electric Gas Electric Infrastructure Maintenance Infrastructure Maintenance Electric Environ. Reliability New Smart Generation Environ. Energy New…
  7. June 2015 Investor Presentation – Cms Energy – slide 7
    Opportunity for Another 30% . . . . 2005-2014 2015-2024 Opportunity 10.7 bil 15.5 bil 20 + bil Opportunity +30% +45% Gas Electric Gas Electric Infrastructure Maintenance Infrastructure Maintenance Electric Environ.…
  8. June 2015 Investor Presentation – Cms Energy – slide 8
    Growing the Gas Business . . . . Capital Investment Gas Service Territory Amount - 1.7 million customers (bils) - 28,854 miles of distribution and transmission 7 - 309 Bcf gas storage capacity Gas service area Transmission line 6…
  9. June 2015 Investor Presentation – Cms Energy – slide 9
    Gas Infrastructure . . . . WHATS IN Main Replacements Compression New Connections 800 miles 35,000 hp 100,000 customers 1 billion 300 million 550 million Modernization WHATS NOT 6 city gates, 7 regulation stations, 24…
  10. June 2015 Investor Presentation – Cms Energy – slide 10
    Upside Capacity Opportunities . . . . Capacity Growth Over Next Ten Years MW 11,000 10,000 PPAs Expire 9,400 MW PPA 8,600 MW 1,240 MW 580 PPA 2,600 780 MW 7,500 capacity Owned 30% 8,820 800 MW 410 MW Lower customer…
  11. June 2015 Investor Presentation – Cms Energy – slide 11
    Capacity & Energy Price Increases . . . . Was Now Upside Scenarios (mils) (mils) (mils) New Business + 25 50 65 Long-term Energy Energy more 250 MW at 4.00 per kWm (6/14) 55 250 MW at 6.02 per kWm (4/15) Capacity 40 Recent…
  12. June 2015 Investor Presentation – Cms Energy – slide 12
    Sales Growth . . . . Economic Indicators Annual Electric Salesa Industrial Total Grand 8.7% Rapids Michigan U.S Building Permits* +29% +12% +7% 5.0% Conservative 2.8% 3% GDP 2010 2013 15 11 8 2% 1.0% 1% % Population 2011 2014…
  13. June 2015 Investor Presentation – Cms Energy – slide 13
    Economic Growth . . . . Examples of New Business Michigan 1 Electric Gas Combination Midwest Job Creation Announcement Denso North America -Michigan.gov Hub for all thermal 2 production in N. America 100 new jobs in U.S.…
  14. June 2015 Investor Presentation – Cms Energy – slide 14
    O&M Cost Reductions . . . . 2006 2014 2019 Down 10% Down 7% 1.1 bil 1.0 bil 0.9 bil Inflation Inflation 2% 2% Coal to Gas Switching (Zeeland) Coal to Gas Switching (Jackson) Smarter Benefit Plans Pole Top Hardening…
  15. June 2015 Investor Presentation – Cms Energy – slide 15
    O&M Cost Savings . . . . O&M Trend vs Peers O&M Cost Savings 2014 2014 0 50% & 2015 2018 (mils) (mils) 6% per year 0 Peers Attrition - 35 - 75 0 2% per year Productivity (Coal Gas) - 35 - 50 0 Pole Top Hardening - 30 - 30…
  16. June 2015 Investor Presentation – Cms Energy – slide 16
    Reinvestment Helps Customers . . . . Adjusted EPS Increase forestry (non-GAAP) Accelerate DIG Outage to 2015 8 mil cost in 2015; 10 mil benefit in 2016 17 Capacity increase 38 MW 2015 Weather 14 2014 Natural Offsets (1)…
  17. June 2015 Investor Presentation – Cms Energy – slide 17
    Electric Customer Prices . . . . Residential Bills Industrial Rates Worse Worse 20 % 30 % 26% 21% 20 Rates & 10 Fuel 13% Rates & 10 7% Improving fast Design 3% National Avg Midwest Avg 0 0 Outstanding (5)% -10 Policy or…
  18. June 2015 Investor Presentation – Cms Energy – slide 18
    Customer Satisfaction . . . . Electric Gas 2 1st Quartile 3 1st Quartile 2nd Quartile 2nd Quartile 9 6 3rd Quartile 3rd Quartile 4th Quartile 4th Quartile Present Present 2010 2012 2014 Rank 2016 2010 2012 2014 Rank…
  19. June 2015 Investor Presentation – Cms Energy – slide 19
    Governor Snyders Leadership On Energy . . . . Governor Snyders Four Pillars How We Could Get There Adaptability IRP process to determine generation mix Reliability Ensure adequate supply -15% waste Resource planning…
  20. June 2015 Investor Presentation – Cms Energy – slide 20
    Michigan Energy Law Update . . . . Adaptability Reliability Update Affordability Environmental protection 10% renewables by 2015 Present: 10% cap Energy efficiency w/o subsidy standards Governor Snyder File-and-implement…
  21. June 2015 Investor Presentation – Cms Energy – slide 21
    Experienced Policy Makers . . . . Governor Rick Snyder Commission Powering Michigans John Quackenbush (R), Comeback Chairman Term Ends: July 2, 2017 Consistent Sally Talberg (I) Term Ends: Energy Committee Chairs Leadership…
  22. June 2015 Investor Presentation – Cms Energy – slide 22
    Why Invest in CMS Energy Our Growth Engine Supported By (2015-2024 Capex) UPSIDES create headroom (Investment, Sales, Cost, & DIG) PARTNERS in progress 15.5 Billion (Customers, Regulators, & Policy Makers) a 5% - 7% EPS growth…
  23. June 2015 Investor Presentation – Cms Energy – slide 23
    Appendix
  24. June 2015 Investor Presentation – Cms Energy – slide 24
  25. June 2015 Investor Presentation – Cms Energy – slide 25
    Consumers Appears . . . . Carbon Tonnage Reduction Million Tons of CO2 (Preliminary) 25 2005 Baseline 23 21 Clean Power Plan 19 Implied EPA Target 17 Consumers Energy Projected 15 emission level 13 2014 2020 2025 2029…
  26. June 2015 Investor Presentation – Cms Energy – slide 26
    Generation Strategy: New Supply Sources . . . . Levelized cost of new build (/kWh) New Build 25 Consumers Energy Sources 22 20 15 15 12 11 Back 10 10 -up 8 7 6 Back 7 6 -up 6 9 5.5 5 5 5 Cross Winds 6 Big 5…
  27. June 2015 Investor Presentation – Cms Energy – slide 27
    Capital Expenditures 2015-2019 2020-2024 2015-2024 2015 2016 2017 2018 2019 Subtotal Subtotal Total (mils) (mils) (mils) (mils) (mils) (mils) (mils) (mils) New Generation (includes Renewables) 70 224 52 64 134 544 612 1,156…
  28. June 2015 Investor Presentation – Cms Energy – slide 28
    Capacity Diversity . . . . Nuclear Oil 8% 6% Renewables 9% Coal 34% Pumped Storage 2014 11% Nuclear Gas Nuclear Oil 6% 32% 8% 8% Oil 6% Renewables Purchases 3% 3% Coal 24% Pumped Coal Renewables Storage 41% 10%…
  29. June 2015 Investor Presentation – Cms Energy – slide 29
    Operating Cash Flow Growth . . . . Amount Up 0.5 Billion (bils) Gross operating cash flowa 2.5 up 0.1 billion per year 2.4 2.2 2.1 2.0 2.0 1.9 Interest, working 1.8 capital and taxes 1.68 1.5 Pct of Market Cap (as of Dec.…
  30. June 2015 Investor Presentation – Cms Energy – slide 30
    2015 Cash Flow Forecast (non-GAAP) CMS Energy Parent Consumers Energy Cash at year end 2014 95 Amount (mils) Sources Consumers Energy dividend and tax sharing 355 Cash at year end 2014 71 Enterprises 20 Sources Sources 375…
  31. June 2015 Investor Presentation – Cms Energy – slide 31
    Credit Ratings . . . . Scale Reflects S&P Moodys S&P Moodys (Dec. 14) (Mar. 15) A+ A1 Consistent A A2 Consumers Performance Secured A- A3 BBB+ Baa1 Less Risk BBB Baa2 BBB- Baa3 Customer Focus BB+ Ba1 CMS Constructive…
  32. June 2015 Investor Presentation – Cms Energy – slide 32
    2015 Sensitivities . . . . 2015 Impact Status Sensitivity EPS OCF (mils) Sales a Electric (38,093 GWh) + 1% + 0.05 + 20 Gas (302.6 Bcf) + 5 + 0.07 + 30 Gas prices (NYMEX) + 50 0 55 + + ROE (authorized) Electric (10.3%) + 10…
  33. June 2015 Investor Presentation – Cms Energy – slide 33
    Electric Customer Base Diversified . . . . Top Ten Customers 2014 Electric Gross Margin (2014 Ranked by Deliveries) Hemlock Semiconductor General Motors Nexteer Automotive Corporation Commercial Gerdau MacSteel 33% Denso…
  34. June 2015 Investor Presentation – Cms Energy – slide 34
    2015 Gas And Electric Rate Cases . . . . 2014 2015 2016 Our View GAS Filed 88 M 7/01 Settled 45 M A) Settled 45 million B) 10.3% ROE A) A) Jackson Plant in Jackson Plant Classic 7 Decommissioned rate base B) Final…
  35. June 2015 Investor Presentation – Cms Energy – slide 35
    GAAP Reconciliation
  36. June 2015 Investor Presentation – Cms Energy – slide 36
    CMS ENERGY CORPORATION Earnings Per Share By Year GAAP Reconciliation (Unaudited) 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Reported earnings (loss) per share - GAAP (0.30) 0.64 (0.44) (0.41) (1.02) 1.20 0.91 1.28…
  37. June 2015 Investor Presentation – Cms Energy – slide 37
    Consumers Energy 2015 Forecasted Cash Flow GAAP Reconciliation (in millions) (unaudited) Reclassifications From Sources and Uses to Statement of Cash Flows Interest/ Capital Presentation Sources and Uses Tax Other Financing Other…
  38. June 2015 Investor Presentation – Cms Energy – slide 38
    CMS Energy Parent 2015 Forecasted Cash Flow GAAP Reconciliation (in millions) (unaudited) Reclassifications From Sources and Uses to Statement of Cash Flows Presentation Sources and Uses Non Equity Consolidated Statements of Cash…
  39. June 2015 Investor Presentation – Cms Energy – slide 39
    Consolidated CMS Energy 2015 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…
  40. June 2015 Investor Presentation – Cms Energy – slide 40
    CMS Energy Reconciliation of Gross Operating Cash Flow to GAAP Operating Activities (unaudited) (mils) 2014 2015 2016 2017 2018 2019 Consumers Operating Income + Depreciation & Amortization 1,813 1,940 1,955 2,081 2,194 2,358…

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