Investor Meetings June 8-9, 2017

Transcription

1 Investor Meetings June 8-9, 2017

2 This presenttion is mde s of the dte hereof nd contins forwrd-looking sttements s defined in Rule 3b-6 of the Securities Exchnge Act of 1934, Rule 175 of the Securities Act of 1933, nd relevnt legl decisions. The forwrd-looking sttements re subject to risks nd uncertinties. All forwrd-looking sttements should be considered in the context of the risk nd other fctors detiled from time to time in CMS Energy s nd Consumers Energy s Securities nd Exchnge Commission filings. Forwrd-looking sttements should be red in conjunction with FORWARD-LOOKING STATEMENTS AND INFORMATION nd RISK FACTORS sections of CMS Energy s nd Consumers Energy s Form 10-K for the yer ended December 31, 2016 nd s updted in subsequent 10-Qs. CMS Energy s nd Consumers Energy s FORWARD-LOOKING STATEMENTS AND INFORMATION nd RISK FACTORS sections re incorported herein by reference nd discuss importnt fctors tht could cuse CMS Energy s nd Consumers Energy s results to differ mterilly from those nticipted in such sttements. CMS Energy nd Consumers Energy undertke no obligtion to updte ny of the informtion presented herein to reflect fcts, events or circumstnces fter the dte hereof. The presenttion lso includes non-gaap mesures when describing CMS Energy s results of opertions nd finncil performnce. A reconcilition of ech of these mesures to the most directly comprble GAAP mesure is included in the ppendix nd posted on our website t CMS Energy provides historicl finncil results on both reported (GAAP) nd djusted (non-gaap) bsis nd provides forwrd-looking guidnce on n djusted bsis. Adjustments could include items such s discontinued opertions, sset sles, impirments, restructuring costs, regultory items from prior yers, or other items. Mngement views djusted ernings s key mesure of the compny s present operting finncil performnce nd uses djusted ernings for externl communictions with nlysts nd investors. Internlly, the compny uses djusted ernings to mesure nd ssess performnce. Becuse the compny is not ble to estimte the impct of specific line items, which hve the potentil to significntly impct, fvorbly or unfvorbly, the compny's reported ernings in future periods, the compny is not providing reported ernings guidnce nor is it providing reconcilition for the comprble future period ernings. The djusted ernings should be considered supplementl informtion to ssist in understnding our business results, rther thn s substitute for the reported ernings. References to ernings guidnce refer to such guidnce s provided by the compny on My 1, Investors nd others should note tht CMS Energy routinely posts importnt informtion on its website nd considers the Investor Reltions section, chnnel of distribution. 1

3 Model: Simple, Perhps Unique Model.... Customer investment (relibility, costs, enviro mndtes) Self Funding: - O&M cost reductions - Sles growth - No block equity dilution & other INVESTMENT SELF-FUNDED Rte increse t or below infltion Pln 6% - 8% 2-3 pts pts < 2%.... continues to drive sustinble growth, with upside opportunities. 2

4 Model: Ten-yer Customer Investment Pln.... Electric Distribution $18 billion Gs Infrstructure & Mintennce Supply.... with opportunities to expnd to $21 - $25 billion. 3

5 Model: O&M Cost Performnce Helps to Fund.... Actul Cost Reduction New Annul Cost Svings Peer Averge ~5% (Peers 2015 over 2006) Consumers -3% yer (thru 2016) Source: SNL, Form 1, Electric Non-fuel O&M Good Business Decisions Attrition $ - 16 $ - 16 Productivity (Col Gs) Enhnced cpitliztion Smrt Meters Consumers Energy Wy Work Mngement & Eliminte Wste Increses Mortlity, Disc. Rtes, & Other Service Upgr./Infltion Net svings $ - 35 $ - 20 Percent svings Three-Yer Avg (mils) > 3% yer! (mils) 2% yer!.... needed customer investments. 4

6 Model: Mnging Work Every Yer EPS $2.20 $2.00 $1.80 $1.60 $1.40 $1.20 $1.000 Cost Productivity Mild Summer Summerless Summer Cost Cost productivity productivity _ Adjusted EPS (non-gaap) Reinvestment Hot Summer Cost productivity Reinvestment Hot Summer Storms Mild Winter Hot Summer Cost productivity bove pln +7 Reinvestment Cost productivity bove pln +17 RECORD WARM Mild Summer -13 Offsets Customer O&M Reinvestment = $340 million (Source: ½ cost; ½ wether) Cost productivity bove pln Storms.... mximizes benefits for customers AND investors. 5

7 The Triple Bottom Line.... PEOPLE PLANET PROFIT PEOPLE PLANET PROFIT PERFORMANCE.... world clss performnce delivering hometown service. 6

8 Customer Stisfction.... PEOPLE J.D. Power Customer Stisfction Index Residentil Customers Business Customers % 24% stedily improving. 7

9 Reduce Col Intensity.... PLANET Col Cpcity Col Energy Renewbles 41% Shut down col 49% Optimize gs Wind for MCV PPA 30% c 21% b 22% b 15% c 15% c 10% 15% RPS 3% Future Future Future _ Includes Clssic 7, includes PPA contrcts _ b Excludes Clssic 7, includes PPA contrcts _ c Bsed on ten-yer pln with opportunities.... with Clen nd Len lterntives. 8

10 +6% to +8% Consistent Growth Through.... 7% CAGR PROFIT EPS Dividend Recession Cold winter _ Adjusted EPS (non-gaap) Mild summer Hot summer Wrm winter Commission (D) Mild summer Governor (D) Cold winter Recession Summer- less Hot summer Commission (D) Hot summer Wrm winter Mild summer Whipple Joos Russell Wether Polr vortex Help Hurt Governor (R) Commission (R) Cold Feb. Wrm Dec. Wrm Winter Wrm Winter Commission (I) Poppe.... recessions, dverse wether, nd ledership chnges. Cold Feb. 9

11 The Consumers Energy Wy.... The CE Wy Sfety. Qulity. Cost. Delivery. Morle CUSTOMER FOCUS ENABLED EMPLOYEES Sfety: Every dy is sfe dy Qulity: We get it right the first time BUSINESS RESULTS Cost: We see nd eliminte wste Delivery: We get it done on time Morle: We re proud to serve CONTINUOUS IMPROVEMENT STANDARDIZED PROCESSES.... culture of continuous improvement

12 NEW ENERGY LAW Fifteen Yers of Growth.... 7% CAGR Opportunities PPA Replcements Grid Moderniztion Gs Infr. Future +6% to +8% Wind for MCV EPS Customer Investment (bils) O&M Reductions Col Cpcity Pln $18 (10)% 21 % Ops $25 (15)% 15 % Recession Recession People Plnet Profit _ Adjusted EPS (non-gaap) with sustinble future. 11

13 Rejji P. Hyes 12 CMS Energy 2017 EVP nd CFO ITC Holdings Corp CFO ( ) - VP, Finnce & Tresurer ( ) Exelon Corportion Asst. Tresurer & Dir. Corp. Finnce & Finncil Strtegy Lzrd Frères & Co. LLC VP, M&A Bnc of Americ Securities VP, Globl Investment Bnking ( ) - Associte, Globl Investment Bnking ( ) Hrvrd Business School, MBA Amherst College, BA

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15 Customer Investment: Ten-yer Customer Investment Pln.... Electric Distribution $18 billion Gs Infrstructure & Mintennce Supply.... with opportunities to expnd to $21 - $25 billion. 14

16 Customer Investment: Customer-Driven Investment ($18 billion).... Clen Power $1.4 Billion Infrstructure $3.4 Billion Relibility $2.8 Billion Mintennce $10.4 Billion Clen energy Gs expnsion Grid Moderniztion Grid Ludington Pumped Storge Gs distribution Electric distribution New gs cpcity Solr Gs storge Electric relibility Genertion.... remins smll nd incrementl, with no big bets nd opportunity to grow. 15

17 Customer Investment: Gs Expnsion.... Sginw Tril Pipeline Gs Min Replcement Propne to Gs $0.6 billion $1 billion $0.4 billion 94 miles, 24 dimeter Multi-yer project Reduce system risk nd increse cpcity 25 yers remining t current levels ~2,000 customers per yer 250,000 propne users in our service territory.... investing $8 bil over the next 10 yers. 16

18 Customer Investment: Growing the Gs Business.... Amount (bils) $ 8 Cpitl Investment 2015 $3.74/mcf 2016 $2.95/mcf 21% decrese Gs Prices +100% $8 Gs Service Territory million customers - 29,590 miles of distribution nd trnsmission Bcf gs storge cpcity Gs service re Trnsmission line Compressor sttions Storge fields Interconnects $4 0 Lst 10 Yers _ Consumers Energy GCR price Next 10 Yers.... expnding one of the lrgest systems in the country.

19 Customer Investment: Evolution of Cpex Growth (Next 10 Yers).... Cpex (bils) $ 25 More Ops $21 - $ $15.5 $17 $ Feb Dec Future Ops.... supports high-end djusted EPS growth. 18

20 Customer Investment: Future Cpex Opportunities.... 1,240 MW MCV PPA Expires 2025 Add ~$3 billion renewbles Replcement Opportunities Renewbles Storge Energy efficiency Demnd response.... Clen nd Len. 19

21 Clen nd Len: Mtching Supply with Demnd.... Old Utility Model Clen And Len Big Build O&M Big Build Excess supply Supply Excess supply Retirement Expected Demnd Excess supply O&M Fuel Actul Demnd Modulr Fuel Modulr Investments Modulr EE & DR Fully utilize ssets Supply Modulr Demnd Big Bets Results in excess cpcity, higher cost Mtches supply with demnd.... benefits customers AND investors. 20

22 Clen nd Len: Reduce Col Intensity.... Col Cpcity Col Energy Renewbles 41% Shut down col 49% Optimize gs Wind for MCV PPA 30% c 21% b 22% b 15% c 15% c 10% 15% RPS 3% Future Future Future _ Includes Clssic 7, includes PPA contrcts _ b Excludes Clssic 7, includes PPA contrcts _ c Bsed on ten-yer pln with opportunities.... with Clen nd Len lterntives. 21

23 Zeelnd Cross Winds Big 5 Plisdes Clen nd Len: Genertion Strtegy: New Supply Sources.... Levelized cost of new build ( /kwh) New Build Consumers Energy Sources Combined Cycle Gs Plnt Wind Col Gs price= $3.00 $4.50 $6.00 w/ tx w/o tx w/ emission credit credit controls 6 6 Bck -up Bck -up Nucler Residentil Solr Tody Future $3.00 per $2.00 per wtt wtt.... combined cycle gs nd wind re the most ttrctive new source of supply

24 Clen nd Len: Reducing Crbon Impct.... Tons CO 2 (mils) 20 Consumers Energy 2012 Emissions Retire 950 MW col Stte of Michign Trget (Consumers Energy s shre) Positioned well for complince becuse we live here too. 23

25 Clen nd Len: Clener Energy Portfolio.... Apple Blossom Wind Frm Community Solr Grdens Competitive price 100 MW Commercil opertion by 2018 Utility Scle Solr Grnd Vlley Stte University, 3 MW Western Michign University, 1 MW Cpcity, energy, nd renewble credits PPA with option to purchse Digitl rendering of Grnd Vlley s cmpus.... demonstrtes bility to grow green genertion. 24

26 Clen nd Len: Cpcity Diversity.... Oil 10% Nucler 8% Purchses 3% Col 21% Renewbles 3% Oil 6% Nucler 8% Renewbles 10% Pumped Storge 12% 2017 Gs 36% Potentil Future Cpcity Mix Purchses 2% Oil 9% Col 15% Pumped Storge 11% 2005 Col 41% Renewbles 30% Renewbles 30% Future Gs 31% Pumped Storge 13% Gs 31%.... evolving to clener genertion nd becoming more cost competitive. 25

27 Clen nd Len: Energy Diversity.... Totl Compny Supply Future Col 41% 24% 22% Gs Renewbles 4 4 Pumped Storge (1) (1) FLAT b PPA (Nucler nd Gs) _ Excludes Clssic 7 col plnts (shutdown April 2016) b Includes mrket purchses.... significnt shift wy from col. 26

28 Clen nd Len: Sustinbility.... A Sustinble Strtegy Retired 950 MW of col Found positions for ffected employees Worked with locl communities erly on Reduced our environmentl impct Positioned well for crbon reduction Col Cpcity Mix % Lrgest reduction of ny investor-owned utility 21% % Col % Non-col.... trnsition to clener fuels. 27

29 Top of Mind: New Energy Lw.... Subsidies ddressed ROA reform Net metering Customer Wht s New? Incresed energy efficiency & demnd response incentive RPS -- 15% by end of 2021 Improved Regultory Process 10 month rte cse Integrted Resources Pln (IRP) Investor Wht is the Impct? Price competitiveness Secure cpcity Improved incentives Additionl rte bse opportunity Stremlined process Relibility plnning Pre-pprovl of projects.... strengthens our Pln AND benefits our customers. 28

30 Top of Mind: Another Step Towrds Clen & Len.... Plisdes PPA Contrct Cost (mils) $ Contrct price-to- Consumers $172 mil Approch 1 Replce bove mrket PPA contrct (customer svings) 2 Fully utilize existing ssets Replcement Cost 3 Mtch cpcity with demnd Energy Efficiency, Demnd Response, nd Renewble wind 4 Avoid lrge cpcity needs (no big bets ) 5 Future col-to-gs opportunities _ Contrct expires April 11, Amounts shown on the chrt on nnulized bsis. 6 RESULT: world clss performnce.... svings beneficil to customers AND investors. 29

31 Top of Mind: DIG (750 MW) & Pekers (200 MW).... Pre-Tx Income (mils) $ $12 Outge pull-hed Contrcts (lyering in over time) $30 Better Performnce $ $20 Opportunities Future +$40 Cpcity ($/kw-mth) $1.00 $2.00 $3.00 $4.50 $7.50 Avilble: Energy 0% 0% 0% 25% Cpcity % - 90% $55 $ cpcity contrcted for

32 Top of Mind: Tx Reform Possible.... Developments Affordble Cre Act ( ACA ) reform legisltion filed to grner enough Republicn support Confirmtion herings for Presidentil ppointees remined slow Syri, North Kore Discussion resuming; timing still uncertin One Possibility Utility Cpex bckfill for bonus deprecition (sset expensing) Enterprises -- rte reduction > Deduction chnges Loss of interest expense nnully Prent debt EnerBnk EnerBnk CMS Impct.... nd we re prepred to mitigte. 31

33 Top of Mind: Regultory Updte.... Jn. 1 Energy Lw Gs Rte Cse 4/20: Energy Lw effective 12/1: SRM cpcity chrge finlized Spring: AES Cpcity chrge effective 1/29: Self-implement $20 mil Electric Rte Cse 7/31: Finl Order 2/28: Finl order; $113 mil; 10.1% ROE 3/31: File; $173 mil; 10.5% ROE 10/1: Selfimplement 3/30: Finl order Plisdes 2/10: Filed securitiztion; $172 mil August: Gs RFP Results 8/31: Finl order My: Terminte PPA contrct.... smooth progression through significnt dtes. 32

34 Top of Mind: Strong Commission.... Commission: Updted Terms Slly Tlberg (I), Chirmn Term Ends: July 2, 2021 Prior: July 2, 2019 Tier 1 Tier 1 Stte Rnking 6 Michign Switched term-end dtes 2 9 Norm Sri (R) Term Ends: July 2, 2019 Prior: July 2, Rchel Eubnks (I) Term Ends: July 2, 2023 Prior: July 2, Reppointed Brclys Reserch, 2016 stte rnkings.... constructive regultion. 33

35 Top of Mind: Economic Development Growth.... Our Service Territory Outperforms Grnd Rpids Michign U.S. b Building Permits +320% +243% +106% GDP Popultion Unemployment (3/17) ½ ½ Grnd Rpids rnked third best in USA for job cretion & economic development by Are Development Mgzine Exmples of New Business Electric Gs Combintion Continentl Diry Knuf Announcement Royl Technologies Ottw Mnufctures plstic injection components for multiple industries 66 new jobs $34 mil investment GM Assembly Mgn-Cosm Betz Post Dicstl Switch Aruco C3 Ventures Enbridge MACI Announcement Zeelnd Frm Services Ithc Products nd services to the griculture nd trnsporttion industries 74 new jobs $123 mil investment Durolst Roofing Drt MSU FRIB GM Assembly _ Grnd Rpids b Annulized numbers Mrch 2010 Mrch 2017 Denso Brembo Intev.... opportunities to improve even more. 34

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37 Finncil: First Qurter Results.... First Qurter EPS t 71 Up 12 from 2016; up 14 or 20% wether-normlized Mild wether nd storm fully mitigted Reffirm Full Yer EPS guidnce: $2.14 to $ % to +8% Long-term Growth: 6% to 8% _ Adjusted EPS (non-gaap).... on trck for 6% to 8% EPS growth. 36

38 Finncil: 2016 EPS.... Adjusted EPS (non-gaap) Wrm Summer Wether 14 Nonwether 6 Reinvestment $2.02 Wether & Storms Recovery Pension Yield Curve Enhnced Cpitliztion 15 Pension Contribution Improved UAs & Other Offsets Mild Wether Debt Pre-funding Foundtion & Low Income Cust. Improvements & other Reinvestment (13) Jnury Mrch 31 June 30 September 30 December high end, t $

39 Finncil: 2017 EPS.... Adjusted EPS (non-gaap) Benefits Property txes Totl Guidnce +6% to +8% Recovery Wether & Storms Recovery Accelerted Finncing Enterprises EE incentives Sles Mix & Other Totl Jnury Mrch 31 June 30 September 30 December includes 6% to 8% growth despite erly chllenges. 38

40 Finncil: Mnging Work Every Yer EPS $2.20 $2.00 $1.80 $1.60 $1.40 $1.20 $1.000 Cost Productivity Mild Summer Summerless Summer Cost Cost productivity productivity _ Adjusted EPS (non-gaap) Reinvestment Hot Summer Cost productivity Reinvestment Hot Summer Storms Mild Winter Hot Summer Cost productivity bove pln +7 Reinvestment Cost productivity bove pln +17 RECORD WARM Mild Summer -13 Offsets Customer O&M Reinvestment = $340 million (Source: ½ cost; ½ wether).... mximizes benefits for customers AND investors. Cost productivity bove pln Storms 39

41 Finncil: EPS % EPS $2.10 Averge growth per yer $ % +6% $1.26 $1.36 $1.35 $1.45 $1.44 $1.55 $1.55 $1.52 $1.89 $1.77 $1.87 $1.85 $1.66 $1.78 $1.73 $1.66 $1.63 Originl guidnce $2.02 $2.01 $1.97 $ % $2.17 $2.13 Not Yet in Pln Customer investment opportunities More cost performnce Future _ Adjusted EPS (non-gaap).... trck record of consistent growth. 40

42 Finncil: Credit Rtings.... Scle S&P / Fitch Moody s AA- A3 A+ A1 A A2 A- A3 BBB+ B1 BBB BBB- BB+ BBB+ BBB BBB- BB+ BB BB- B2 B3 B1 B1 B2 B3 B1 B2 B3 B+ B1 B B2 B- B3 S&P (Dec. 15) Moody s (Apr. 17) Fitch (Mr. 16) Consumers Secured CMS Unsecured Present Prior 2002 Rtings Drivers Strong finncil position Growing operting csh flow Return on regulted investment Supportive regultory environment Outlook Stble Stble Stble.... upgrded by Moody s. 41

43 Finncil: Operting Csh Flow Funds.... Up $1.8 billion since 2004! Amount (bils) $ $1.9 $2.1 $1.63 Gross operting csh flow up > $0.1 billion per yer $2.2 $1.65 $2.4 $2.6 $2.7 Interest, working cpitl nd txes Up $0.8 billion $2.9 NOLs void need for block equity (0.1) _ Investment Csh flow before dividend (0.6) Non-GAAP Operting csh flow NOLs & Credits $0.7 $0.9 $0.9 $0.8 $0.6 $0.2 $0.... investments with no block equity. 42

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45 GAAP Reconcilition

46 CMS ENERGY CORPORATION Ernings Per Shre By Yer GAAP Reconcilition (Unudited) Reported ernings (loss) per shre - GAAP ($0.30) $0.64 ($0.44) ($0.41) ($1.02) $1.20 $0.91 $1.28 $1.58 $1.42 $1.66 $1.74 $1.89 $1.98 Pretx items: Electric nd gs utility 0.32 (0.60) - - (0.06) Tx impct (0.11) (0.01) (0.03) (0.22) (0.02) - (0.10) (0.01) Enterprises (0.12) 1.67 (0.02) 0.14 (0.05) * (0.01) * 0.05 * * Tx impct (0.19) (0.35) (0.02) 0.10 (0.42) * (0.05) 0.02 (0.11) * (*) (0.02) (*) (*) Corporte interest nd other 0.25 (0.06) * - * * * * 0.02 Tx impct (0.09) 0.03 (0.02) (0.18) (0.49) (0.03) (*) (*) (0.01) (*) (*) (*) (*) (0.01) Discontinued opertions (income) loss, net (0.16) 0.02 (0.07) (0.03) 0.40 (*) (0.08) 0.08 (0.01) (0.03) * (*) (*) * Asset impirment chrges Tx impct - - (0.98) (0.31) (0.33) Cumultive ccounting chnges Tx impct (0.09) (0.01) Adjusted ernings per shre, including MTM - non-gaap $0.81 $0.87 $1.39 $0.57 $0.84 $1.21 () $1.26 $1.36 $1.45 $1.55 $1.66 $1.77 $1.89 $2.02 Mrk-to-mrket 0.04 (0.65) 0.80 Tx impct (0.01) 0.22 (0.29) Adjusted ernings per shre, excluding MTM - non-gaap NA $0.90 $0.96 $1.08 NA NA NA NA NA NA NA NA NA NA * Less thn $0.01 per shre. () $1.25 excluding discontinued Exeter opertions nd ccounting chnges relted to convertible debt nd restricted stock. 45

47 CMS ENERGY CORPORATION Ernings By Qurter nd Yer GAAP Reconcilition (Unudited) (In Millions, Except Per Shre Amounts) Q 2Q 3Q 4Q YTD Dec Reported net income - GAAP $164 $124 $186 $77 $551 Pretx items: Electric nd gs utility * 11 Tx impct - - (4) (*) (4) Enterprises * * * 1 1 Tx impct (*) (*) (*) (*) (*) Corporte interest nd other * * Tx impct (*) (*) (1) (2) (3) Discontinued opertions (income) loss * * (*) (*) * Adjusted income - non-gaap $164 $124 $194 $81 $563 Averge shres outstnding, bsic Averge shres outstnding, diluted Reported ernings per shre - GAAP $0.59 $0.45 $0.67 $0.28 $1.98 Pretx items: Electric nd gs utility * 0.04 Tx impct - - (0.01) (*) (0.01) Enterprises * * * * * Corporte interest nd other * * * Tx impct (*) (*) (*) (0.01) (0.01) Discontinued opertions (income) loss * * (*) (*) * Adjusted ernings per shre - non-gaap $0.59 $0.45 $0.70 $0.29 $2.02 (In Millions, Except Per Shre Amounts) Q Reported net income - GAAP $199 Pretx items: Electric nd gs utility - Enterprises * Tx impct (*) Corporte interest nd other 1 Tx impct (*) Discontinued opertions loss * Adjusted income - non-gaap $200 Averge shres outstnding, bsic Averge shres outstnding, diluted Reported ernings per shre - GAAP $0.71 Pretx items: Electric nd gs utility - Enterprises * Corporte interest nd other * Tx impct (*) Discontinued opertions loss * Adjusted ernings per shre - non-gaap $0.71 Note: Yer-to-dte (YTD) EPS my not equl sum of qurters due to shre count differences. * Represents net (fter-tx) impct of less thn $500 thousnd or $0.01 per shre (unless segment is specificlly referenced by tx impcts). 46

48 CMS Energy Reconcilition of Gross Operting Csh Flow to GAAP Operting Activities (unudited) (mils) Consumers Operting Income + Deprecition & Amortiztion $ 1,866 $ 2,037 $ 2,135 $ 2,292 $ 2,547 $ 2,678 $ 2,816 Enterprises Project Csh Flows Gross Operting Csh Flow $ 1,886 $ 2,083 $ 2,191 $ 2,346 $ 2,600 $ 2,731 $ 2,870 Other operting ctivities including txes, interest pyments nd working cpitl (246) (454) (541) (596) (750) (781) (820) Net csh provided by operting ctivities $ 1,640 $ 1,629 $ 1,650 $ 1,750 $ 1,850 $ 1,950 $ 2,050 47

49 Len Oil 6% Renewbles 3% Pumped Storge 11% Reduced Col Dependency Nucler 8% Gs 31% Col 41% Retired 950 MW of col cpcity Purchses 3% Renewbles 10% Pumped Storge 12% Nucler Oil 8% 10% Col 21% Gs 36% OUR MODEL; OUR PLAN OUTPERFORMED FOR A DECADE: NEXT DECADE EVEN BRIGHTER Clen AND INVESTOR INFORMATION Optimized Assets Gs Jckson, 540 MW & Renewbles Wind, 704 MW Solr, 4 MW Now: Mtching Cpcity with Demnd Terminte PPA Renewbles replce MCV Add energy efficiency nd demnd response with incentives Future: Wind for PPA $1 bil renewbles in Pln Why? People Plnet Profit Underscored by Performnce 15 yer trck record ( EPS, OCF, nd dividend growth) Cpex -- $18 billion, 100% orgnic ($3 - $7 billion cpex opportunities) Self-funded -- No block equity dilution! Best cost performnce in sector (Down 3%/yer since 2006) The Consumers Energy Wy Sfety: Every dy is sfe dy Qulity: We get it right the first time Cost: We see nd eliminte wste Delivery: We get it done on time Morle: We re proud to serve.... culture of continuous improvement. CMS Energy Corportion Phil McAndrews (517) Investor Reltions Deprtment Trvis Uphus (517) One Energy Plz, Jckson, MI June 2017

50 Adjusted EPS Dividend Gross OCF (bils) Customer Investment O&M Cost (bils) ~$0.9 Gs Supply Electric Distribution 2017 Energy Lw $0.81 $0.90 $0.96 Int l Sle + $1.2 Actul Pln Simple, Perhps Unique Model Future $13 bil $ $13 $1.08 Up 40% 29% 41% $2.1 Customer Benefits Fewer outges, reduce minutes Smrt meters Better work mngement, 1 st time qulity Reduce col nd crbon Down 15% Down 2% / yr $1.1 $0.95 $0.9 Customer $ Up 100% ROA Reform Subsidy ddressed Incresed EE & DR incentive RPS -- 15% by end of 2021 Integrted Resources Pln Improve Regultory Process EPS Mild $2.20 Summer Cost productivity bove pln $2.00 Cost productivity bove pln Reinvestment +13 Storms +7 Hot Mild -13 $1.80 Reinvestment Summer Winter RECORD Hot WARM Offsets Cost Summer -9 productivity $1.60 Reinvestment bove pln $1.40 $1.20 $1.000 Cost Productivity Mild Summer Summerless Summer Cost Cost productivity productivity _ Adjusted EPS (non-gaap) Cost productivity Storms -13 Hot Summer Customer O&M Reinvestment = $340 million (Source: ½ cost; ½ wether) This plcemt contins forwrd-looking sttements ; plese refer to our SEC filings for informtion regrding the risks nd uncertinties tht could cuse our results to differ mterilly. It lso contins non-gaap mesures. Reconcilitions to most directly comprble GAAP mesures re found in the ccompnying hndout nd on our website t References to ernings guidnce refer to such guidnce s provided by the compny on My 1, Adjusted Non-GAAP $1.77 $ $3 to $7 bil Upside $18 bil $21 - $25 bil Improve gs infrstructure Grid moderniztion More renewbles PPA replcements $ $18 / yer $1.21 $1.26 $1.36 $1.45 $1.55 $ $1.02 $ $0.8 $1.89 $2.02 $2.18 $2.14 $1.24 $ Self-funded (No block equity dilution) Investor $2.9 Opportunity! Improving Service Reducing Cost Enhncing Productivity Clener Energy Price competitiveness; secure cpcity Improved incentives Additionl rte bse opportunity Relibility plnning; pre-pprovl of projects Stremlined process (10 month rte cse) 6% - 8% Customer investment - O&M cost reductions - Sles growth - No block equity dilution & other INVESTMENT (SELF-FUNDED) Rte increse Cost Reduction (2015 over 2006) Peer Avg ~5% Consumers -3%/yr! Source: SNL, Form 1, Electric Nonfuel O&M; Consumers thru 2016 OCF Up > $0.1 bil + per yer! Amount (bils) Pln 6% - 8% New Cost Svings (mils) Good Business Decisions Attrition $ - 16 $ - 16 Productivity (Col to Gs) Enhnced Cpitliztion Smrt Meters Consumers Energy Wy Work Mngement Increses Discount Rtes Plus Service Upgr./Infltion Net Svings $ - 35 $ - 20 Percent Svings Operting Csh Flow Up $0.8! 2-3 pts pts < 2 % $ $1.9 $2.2 $2.4 $2.6 $2.7 $2.9 $2.1 $ Investment 0.00 (0.5) (1.0) Csh Flow Before Dividend NOLs & Credits $0.7 $0.9 $0.9 $0.7 $0.5 $0.2 $0 Three-Yer Averge >3%/ yr 2%/ yr