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MUFG SPRING UTILITY DAY 2015 – Cms Energy

Cms Energy · Apr 1, 2015 · 39 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. MUFG SPRING UTILITY DAY 2015 – Cms Energy – slide 1
    Top of Mind Why invest Whats in the Plan; Whats not How do we do it What makes us different MUFG Spring Utility Day 2015 April 1, 2015 Ludington Pumped Storage Cross Winds Energy Park Fourth largest in the world Unmatched…
  2. MUFG SPRING UTILITY DAY 2015 – Cms Energy – slide 2
    Whats Changed Since Last Year DELIVERED ON 2014 COMMITMENTS . . . . Commitment Results Delivered a a A. Exceed industry EPS and dividend growth A. +7% EPS ; +7.4% dividend B. Exceed industry ORGANIC CAPITAL B. 1.7 bil -- 16% of market…
  3. MUFG SPRING UTILITY DAY 2015 – Cms Energy – slide 3
    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…
  4. MUFG SPRING UTILITY DAY 2015 – Cms Energy – slide 4
    Why Invest in CMS Energy UNMATCHED EPS PERFORMANCE . . . . Premier, Real EPS Growth a Upsides Future = 5% to 7% / yr 20 bil (vs 15.5 bil) capex growth, CMS = 7% / yr O&M reductions; 6% 14 & 15; 4% 16 18 -- more to go, % sales…
  5. MUFG SPRING UTILITY DAY 2015 – Cms Energy – slide 5
    Whats in the Plan 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…
  6. MUFG SPRING UTILITY DAY 2015 – Cms Energy – slide 6
    Whats in the Plan VISIBLE CAPEX . . . . 2005-2014 2015-2024 10.7B 15.5B Up +94% Gas Infrastructure Electric Gas Maintenance Infrastructure Electric Maintenance Electric Reliability New New & Distribution Generation…
  7. MUFG SPRING UTILITY DAY 2015 – Cms Energy – slide 7
    Whats NOT in the Plan UPSIDE INVESTMENT OPPORTUNITIES . . . . 2015-2024 Opportunity Level 10-Year Plan Amount (bils) Generation capacity 3 Gas conversions & expansion 1 Grid modernization 1 20+ Billion 15.5 Billion Total…
  8. MUFG SPRING UTILITY DAY 2015 – Cms Energy – slide 8
    Whats NOT in the Plan 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…
  9. MUFG SPRING UTILITY DAY 2015 – Cms Energy – slide 9
    Whats NOT in the Plan UPSIDE CAPACITY PRICE INCREASES . . . . Was Now Future Scenarios (mils) (mils) (mils) +40 55 +20 35 15 5 Capacity price < 0.50 2.00 4.50 7.50 ( kW per (Market) (Market) (CONE) month) . . . .…
  10. MUFG SPRING UTILITY DAY 2015 – Cms Energy – slide 10
    Whats NOT in the Plan SALES GROWTH . . . . In the News Annual Electric Salesa Industrial Total Kent County [Grand Rapids] leads nations 8.7% largest counties in post-recession employment gains -- Grand Rapids Press 5.0%…
  11. MUFG SPRING UTILITY DAY 2015 – Cms Energy – slide 11
    How Do We Do It 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…
  12. MUFG SPRING UTILITY DAY 2015 – Cms Energy – slide 12
    How Do We Do It O&M COST REDUCTIONS . . . . -3% -3% Amount 1,080 +5% (mils) 1,060 1060 1,040 +9% 1,020 1,000 980 -8% 960 940 920 -12% 900 880 860 840 2013 Cost Reinvestment 2014 Benefits Cost 2015 Reductions…
  13. MUFG SPRING UTILITY DAY 2015 – Cms Energy – slide 13
    How Do We Do It REINVESTMENT HELPS CUSTOMERS . . . . a Annual EPS Growth Adjusted EPS 2012 2013 2014 (non-GAAP) 14% CMS EPS Growth Before Reinvestment CMS 2014 CMS 7% CMS 7% 7% 3% 2015 1.45 Peers _____ a Adjusted EPS…
  14. MUFG SPRING UTILITY DAY 2015 – Cms Energy – slide 14
    How Do We Do It 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…
  15. MUFG SPRING UTILITY DAY 2015 – Cms Energy – slide 15
    How Do We Do It 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…
  16. MUFG SPRING UTILITY DAY 2015 – Cms Energy – slide 16
    How Do We Do It GOVERNOR SNYDERS SPECIAL MESSAGE ON ENERGY . . . . Governor Snyders Four Pillars of Energy How We Could Get There Adaptability 15% more energy efficiency next 10 years Reduce coal and replace it with newer, (Encourage…
  17. MUFG SPRING UTILITY DAY 2015 – Cms Energy – slide 17
    How Do We Do It MICHIGANS ENERGY FUTURE . . . . Michigans Electricity Mix a 2015 2025 Michigan Potential Mix Consumers Energy Michigan Gas Cheaper Wind Cheaper Renewables 10% 9% 9% 19% Energy Optimization 2009 2015 6 7 6 6 Energy…
  18. MUFG SPRING UTILITY DAY 2015 – Cms Energy – slide 18
    What Makes Us Different ELECTRIC CUSTOMER PRICES . . . . Residential Bills Industrial Rates Worse Worse 20 % 30 % 26% 21% 20 Rates & 10 Fuel 13% Rates & 10 Design 7% 3% National Avg Midwest Avg 0 0 (5)% -10 Policy or…
  19. MUFG SPRING UTILITY DAY 2015 – Cms Energy – slide 19
    What Makes Us Different CUSTOMER SATISFACTION . . . . Electric Gas 2 1st Quartile 3 1st Quartile 2nd Quartile 2nd Quartile 6 9 3rd Quartile 3rd Quartile 4th Quartile 4th Quartile Present Present 2010 2012 2014 Rank 2016…
  20. MUFG SPRING UTILITY DAY 2015 – Cms Energy – slide 20
    What Makes Us Different A Passion for Customers AND Investors . . . . Future Shines Bright Sustainable Future Growth 3.50 EPS a Past Next 5 Dividend +5% to +7% Performance Years Investment (bils) 6.4 7.6 (2010-2014) Capacity Op…
  21. MUFG SPRING UTILITY DAY 2015 – Cms Energy – slide 21
    Appendix
  22. MUFG SPRING UTILITY DAY 2015 – Cms Energy – slide 22
    2015 Sensitivities . . . . 2015 Impact Status Sensitivity EPS OCF (mils) Sales a Electric (37,847 GWh) + 1% + 0.05 + 20 Gas (294.1 Bcf) + 5 + 0.07 + 30 Gas prices (NYMEX) + 50 0 55 + + ROE (authorized) Electric (10.3%) + 10…
  23. MUFG SPRING UTILITY DAY 2015 – Cms Energy – slide 23
    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 1.55 1.5 Pct of Market Cap (as of Dec.…
  24. MUFG SPRING UTILITY DAY 2015 – Cms Energy – slide 24
    2014 Cash Flow (non-GAAP) CMS Energy Parent Consumers Energy Amount Amount (mils) (mils) Cash at year end 2013 116 Cash at year end 2013 18 Sources Sources Consumers Energy dividend and tax sharing 687 Operating (depreciation &…
  25. MUFG SPRING UTILITY DAY 2015 – Cms Energy – slide 25
    2015 Cash Flow Forecast (non-GAAP) CMS Energy Parent Consumers Energy Amount Amount (mils) (mils) Cash at year end 2014 95 Cash at year end 2014 71 Sources Sources Consumers Energy dividend and tax sharing 315 Operating…
  26. MUFG SPRING UTILITY DAY 2015 – Cms Energy – slide 26
    Credit Ratings . . . . Scale Reflects S&P / S&P Moodys Fitch Fitch Moodys (Dec. 14) (Jan. 14) (Feb. 15) A+ A1 Consistent A A2 Consumers Performance Secured A- BBB+ A3 Baa1 Less Risk BBB Baa2 BBB- Baa3 Customer Focus BB+…
  27. MUFG SPRING UTILITY DAY 2015 – Cms Energy – slide 27
    Economic Growth . . . . Examples of New Business Industries Electric Gas Combination MW Announcement Announcement Auto 50 Plasan Carbon Composites Dicastal North America, Inc. Food 7 High performance auto Worlds largest maker of…
  28. MUFG SPRING UTILITY DAY 2015 – Cms Energy – slide 28
    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…
  29. MUFG SPRING UTILITY DAY 2015 – Cms Energy – slide 29
    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%…
  30. MUFG SPRING UTILITY DAY 2015 – Cms Energy – slide 30
    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…
  31. MUFG SPRING UTILITY DAY 2015 – Cms Energy – slide 31
    GAAP Reconciliation
  32. MUFG SPRING UTILITY DAY 2015 – Cms Energy – slide 32
    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…
  33. MUFG SPRING UTILITY DAY 2015 – Cms Energy – slide 33
    Consumers Energy 2014 Cash Flow GAAP Reconciliation (in millions) (unaudited) Reclassifications From Sources and Uses to Statement of Cash Flows Interest/ Capital Common Presentation Sources and Uses Tax Other Financing Other…
  34. MUFG SPRING UTILITY DAY 2015 – Cms Energy – slide 34
    CMS Energy Parent 2014 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 Flows…
  35. MUFG SPRING UTILITY DAY 2015 – Cms Energy – slide 35
    Consolidated CMS Energy 2014 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…
  36. MUFG SPRING UTILITY DAY 2015 – Cms Energy – slide 36
    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 1,885 1,955 2,081 2,194 2,358…
  37. MUFG SPRING UTILITY DAY 2015 – 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. MUFG SPRING UTILITY DAY 2015 – 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. MUFG SPRING UTILITY DAY 2015 – 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…

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