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Investor Meetings – Cms Oil and Gas Company

Cms Oil and Gas Company · Aug 28, 2014 · 32 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. Investor Meetings – Cms Oil and Gas Company – slide 1
    Content Investor Meetings How it Works Investment August 28, 2014 Upsides Partners Passion to Improve Cross Winds Energy Park Consumers Smart Energy Program Jackson Gas Plant
  2. Investor Meetings – Cms Oil and Gas Company – slide 2
    HOW IT WORKS -- Mindset . . . . 10-Year Actual Dividend EPS 7% CAGR 1.78 1.66 Peers 4% 1.55 1.76 1.45 1.36 b 1.26 6% 1.21 1.08 6% 5% - 7% 1.08 14% 1.02 0.96 96 0.90 27% 84 0.84 32% 0.81 Intl Sale 66 39% 50 80% 36…
  3. Investor Meetings – Cms Oil and Gas Company – slide 3
    HOW IT WORKS -- Model . . . . RESULTS Consistent Predictable Investment Self-Imposed Limits Ten year - 15 billion Small, bite size projects Sustainable base rates < 2% inflation None Bet The Company Investment Needed Not Wanted…
  4. Investor Meetings – Cms Oil and Gas Company – slide 4
    HOW IT WORKS -- Near Term . . . . A A Competitive Rates B Elections B C C Energy Law Update D Investment & EPS Growth Ten-year Conservative Plan D Big Upsides, not in plan . . . . steps ahead. 4
  5. Investor Meetings – Cms Oil and Gas Company – slide 5
    INVESTMENT --Catch-Up . . . . Amount (billions) 1.8 1.5 / year Peers CMS Investment Criteria: Reduces fuel cost Lowers O&M Adds customer value Meets state & federal mandates 2003 2004 2005 2006 2007 2008 2009 2010…
  6. Investor Meetings – Cms Oil and Gas Company – slide 6
    INVESTMENT -- Ten-Year Plan Expanding . . . . 2013-2022 Opportunity Level 10-Year Plan Amount (bils) Generation capacity PPA replacement 1.7 20+ Billion ROA return 15Billion 15 Billion Higher renewables Gas conversions &…
  7. Investor Meetings – Cms Oil and Gas Company – slide 7
    INVESTMENT -- Customer-Driven . . . . Clean Power Capacity Reliability Infrastructure Opportunity 2.3 Billion 1.6 Billion 4.2 Billion 5.4 Billion 5 Billion Environmental Jackson gas plant Consumers Smart Energy Gas distribution Gas…
  8. Investor Meetings – Cms Oil and Gas Company – slide 8
    INVESTMENT -- Capacity Opportunities . . . . Ten-year Capacity Growth Further MW 11,000 Not in plan Upside 10,000 900 PPAs Expire 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…
  9. Investor Meetings – Cms Oil and Gas Company – slide 9
    INVESTMENT -- MISO Zone 7 Capacity . . . . As of June 2, 2014 MISO Zones (in GW) 24.8 2.0 22.8 Reserves 3.2 7 Demand 21.6 2016 Resources 2016 Resource Expected Shortfall _____ Requirement Source: MISO . . . . shortfall…
  10. Investor Meetings – Cms Oil and Gas Company – slide 10
    INVESTMENT -- New Capacity Ops . . . . Full Year Impact Replace PPA With New Build Customer Bill Investor (mils) (EPS) Upside: 1,000 MW of Capacity Options PPAs expire - 325 0 Add 1,000 MW + 325 +5 Build - Thetford owned capacity…
  11. Investor Meetings – Cms Oil and Gas Company – slide 11
    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…
  12. Investor Meetings – Cms Oil and Gas Company – slide 12
    UPSIDES -- Capacity Price Increases . . . . Today Future Scenarios Recent Contracts (mils) (mils) 55 DIG energy contract +50 9 years 250 MW 4.06 kW per month 35 +30 Upside: Capacity and energy contracts layered 5 in over…
  13. Investor Meetings – Cms Oil and Gas Company – slide 13
    UPSIDES -- Michigans Recovery . . . . Gross Domestic Product 2010 through 2013 WA ND Top MT 8.8 11.6 54.9 MN 10 11.5 ME OR ID SD WI 11.4% 1.7 11.3 VT 17.3 7.4 NH 5.5 WY NY 9.8 MI 6.2 4.3 IA NE 11.4 6.5 MA 10.3 13.1 9.8…
  14. Investor Meetings – Cms Oil and Gas Company – slide 14
    UPSIDES -- Economic Growth . . . . Examples of New Business Top Ten (MW) Electric Gas Combination Brembo 24 MW Enbridge Energy 19 Automotive customer 10 Durolast Roofing 4 MW MSU FRIB 9 Betz Industries 8 MW Enbridge 19 MW WKW…
  15. Investor Meetings – Cms Oil and Gas Company – slide 15
    UPSIDES -- Sales Growth . . . . Economic Indicators Annual Electric Salesa Grand Rapids Michigan U.S Growth 2.5% Upside Building Permits* +38% +17% +10% 1.7% GDP (real) 2010 thru 2012 14 11 7 1.3% Population 2010 Census 3 0 2 thru…
  16. Investor Meetings – Cms Oil and Gas Company – slide 16
    UPSIDES -- O&M Cost Control . . . . Average Annual O&M Change Continuous Cost Reductions +6% Peers -3%a Actual/Plan (exc Amount 2013 major storms) (mils) -2%a 1,050 +2% +2% +5% Peers Peers Peers +6% +5% CMS CMS CMS CMS CMS…
  17. Investor Meetings – Cms Oil and Gas Company – slide 17
    UPSIDES -- O&M Cost Control . . . . Average Annual O&M Change Future Examples +6% Peers Fuel Mix MW Employees Actual/Plan (exc 2013 major storms) 2016 Retire Coal - 950 - 300 2016 Add GCC + 540 + 20 +2% +2% Total -410 - 280…
  18. Investor Meetings – Cms Oil and Gas Company – slide 18
    UPSIDES -- Customer-Focused Reinvestment . . . . Icy Late December Adjusted EPS (non-GAAP) O&M B/(W) Than Forecast (mils) 2013 +13 Storm(total 50 M) Insurance (37) 16 Lower contributions 9 2012 Hot Sales-weather 12 Summer…
  19. Investor Meetings – Cms Oil and Gas Company – slide 19
    UPSIDES -- Customer-Focused O&M Reinvestment . . . . Sales & other 2 Adjusted EPS O&M Reinvestment: (non-GAAP) (3) Reliability (3) Parent debt prefunding (2) 2014 +18 +15 +14 +9 +9 Good choices ahead Weather 22 Cost…
  20. Investor Meetings – Cms Oil and Gas Company – slide 20
    PARTNERS -- Michigan Energy Law . . . . Adaptability Reliability Update Affordability Environmental protection Gov. signed new 10% renewables rate design bill by 2015 Senate workgroup Energy efficiency formed to study standards…
  21. Investor Meetings – Cms Oil and Gas Company – slide 21
    PARTNERS -- Michigan Governors Race . . . . Rick Snyder Republican, Incumbent Mark Schauer Democrat, Challenger On Energy... Campaign Issues On ROA Education As Senate Democratic Leader, Jobs Choice creates a lot of Mark…
  22. Investor Meetings – Cms Oil and Gas Company – slide 22
    PARTNERS -- Constructive Regulation . . . . Commission Tier 1 State Ranking John Quackenbush (R), 1 5 Michigan Chairman Term Ends: July 2, 2017 2 10 Sally Talberg (I) 3 18 Term Ends: July 2, 2019 4 10 Greg White (I)…
  23. Investor Meetings – Cms Oil and Gas Company – slide 23
    PASSION TO IMPROVE -- Regulation & Self-Initiated Steps . . . . Industrial Electric Rate House Bill 5476 (vs Midwest Average) Consumers higher than Signed into law on June 17th,2014 Midwest peer avg 30% Directs MPSC to develop…
  24. Investor Meetings – Cms Oil and Gas Company – slide 24
    PASSION TO IMPROVE -- 2015 Gas Rate Case . . . . Overview Residential Gas Customer Cost Amount Amount (per day) (Mils) 3.00 Projected 9% Capital Investment 144 decrease Cost & Other (56) 2.44 Request 88 2.24 2016-2017 Investment…
  25. Investor Meetings – Cms Oil and Gas Company – slide 25
    PASSION TO IMPROVE -- Includes . . . . Cost Control Customer Satisfaction Employee Engagement Utility O&M Electric 1st 1st 1st Quartile Quartile Quartile 1st Quartile 2nd Quartile 2nd Quartile Down 8% since 2011 3rd…
  26. Investor Meetings – Cms Oil and Gas Company – slide 26
    Key Takeaways . . . . EPS a Real Growth (No Resets) 2.00 7% Core Fundamentals 7% 5% +7% +7% 5% Ten-Year Visible Investment (Self-funded) +7% +8% Strong Cost Control +12% (Among best) +12% +4% Target 5% - 7% Conservative…
  27. Investor Meetings – Cms Oil and Gas Company – slide 27
    Appendix
  28. Investor Meetings – Cms Oil and Gas Company – slide 28
    Capital Expenditures 2013-2017 2018-2022 Total 2013 2014 2015 2016 2017 Subtotal Subtotal 2013-2022 (mils) (mils) (mils) (mils) (mils) (mils) (mils) (mils) New Generation (includes Renewables) 136 222 61 213 44 676 1,105 1,781…
  29. Investor Meetings – Cms Oil and Gas Company – slide 29
    Capacity Diversity . . . . Nuclear Oil 8% 6% Renewables 9% Coal 34% Pumped Storage 2014 11% Nuclear Gas Nuclear Oil 6% 10% 32% 8% Oil 6% Renewables Purchases 3% 3% Coal 24% Coal Renewables Pumped 41% 10% Storage…
  30. Investor Meetings – Cms Oil and Gas Company – slide 30
    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…
  31. Investor Meetings – Cms Oil and Gas Company – slide 31
    GAAP Reconciliation
  32. Investor Meetings – Cms Oil and Gas Company – slide 32
    Earnings Per Share By Year GAAP Reconciliation (Unaudited) 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Reported earnings (loss) per share - GAAP (0.30) 0.64 (0.44) (0.41) (1.02) 1.20 0.91 1.28 1.58 1.42 1.66 After-tax…

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