CMS Energy Corporation

Good morning, everyone, and welcome to the CMS Energy 2020 third quarter results. The earnings news release issued earlier today and the presentation used in this webcast are available on CMS Energy's website in the investor relations section. This call is being recorded. After the presentation, we will conduct a question and answer session. Instructions will be provided at that time. If at any time during the conference you need to reach an operator, please press the star key followed by zero. Just a reminder, there will be a rebroadcast of this conference call today beginning at 12 p.m. Eastern Time, running through November 5th. This presentation is also being webcast and is available on CMS Energy's website in the Investor Relations section. At this time, I would like to turn the call over to Mr. Sri Matipati, Vice President of Treasury and Investor Relations, Please go ahead.

Thank you, Rocco. Good morning, everyone, and thank you for joining us today. With me are Patty Poppe, President and Chief Executive Officer, and Reggie Hayes, Executive Vice President and Chief Financial Officer. This presentation contains forward-looking statements which are subject to risks and uncertainties. Please refer to our SEC filings for more information regarding the risks and other factors that could cause our actual results to differ materially. This presentation also includes non-GAAP measures, Our conciliations of these measures to the most directly comparable GAAP measures are included in the appendix and posted on our website. Now, I'll turn the call over to Patty.

Thank you, Sri, and good morning, everyone. We hope you're all doing well, and thanks for joining us today for our third quarter earnings call. This morning, I'll share our financial results and outlook for the first nine months of the year. I'll also introduce our 2021 guidance, review our capital plan, which supports our decarbonization efforts, and I'll touch briefly on our regulatory calendar. Reggie will add more details on our financial results, and as always, we'll close with Q&A. We are happy to report that for the first nine months of the year, we delivered adjusted earnings per share of $2.11, up 17% from the same period in 2019. Our year-to-date results were driven by our team's best-in-class cost management through the CE way. Given the risk mitigation in place for this year and our visibility into next year, we're pleased to reaffirm our adjusted guidance for the year of $2.64 to $2.68, with a bias to the midpoint. and introduced our adjusted guidance for 2021 of $2.82 to $2.86, up, you guessed it, 6% to 8% from the midpoint of our current guidance range. We continue to target long-term annual earnings and dividend per share growth of 6% to 8%, again, with a bias to the midpoint, which I will remind you reflects both consistent and industry-leading growth. We remain grounded in our commitment to the triple bottom line of people, planet, and profit. We're committed to diversity, equity, and inclusion and are doubling our spend on diverse suppliers over the next five years after having tripled our spend over the last seven. Just last month, the governor of Michigan announced the state's goal to reach carbon neutrality by 2050, which supports our clean energy plan and all the actions we've already taken to protect our planet and reduce our carbon footprint. And before moving on, I want to highlight the over $100 million in cost reductions realized year-to-date through the CE Way. This is a true testament to the maturity of our CE Way mindset and just what this team is capable of when called to action. My quick story of the month is from our team at Filer City Generating Station, who identified a shorter route throughout the building to perform operator rounds. This team eliminated over one hour or 2,500 steps on each shift. The annual mileage savings are equivalent to the distance from the southern border of our state all the way to the Mackinac Bridge. Now, that's something to write home about. Step by step, minute by minute, dollar by dollar. It all adds up to the CE way. Our team has proven that we can put the pedal to the metal on cost performance to deliver the required results now and in the future. Our commitment to the triple bottom line shines through in our capital investment plan that focuses on enhancing the safety and reliability of our system while keeping customer bills affordable, protecting our planet, and delivering for our customers and investors as we move toward net zero. We benefit from a regulatory construct in Michigan and a statute that allows for the financial incentives above and beyond our current authorized ROE. These include a 20% return on our energy efficiency spend as we help customers reduce energy waste and lower their monthly bills, a financial mechanism equal to our weighted average cost of capital on new renewable PPAs, and a premium ROE of 10.7% on renewable investments to meet our 15% renewable portfolio standard in Michigan, all of which illustrate that we can deliver reliably on the triple bottom line. What's good for our people and the planet can also deliver top-tier profits. It's no wonder we are considered a leader in ESG. By 2024, we will have added 1,100 megawatts of solar to our system, on top of 1 gigawatt of RPS renewables since 2011. Our Clean Energy Plan calls for a total of 6 gigawatts of solar additions to our system, or $3 to $6 billion of investment opportunity through 2040. As we move forward and file our next IRP in 2021, we'll look to realize some of this opportunity and pull it into our plan as utility-scale renewables continue to make triple bottom line sense. Our commitment to serving all our stakeholders has not gone unnoticed. We have been recognized nationwide for our good efforts, and Slide 7 celebrates that recognition, including that, as of 2019, CMS Energy received an MSCI ESG rating of AA. Moving on to our regulatory calendar, we settled our gas rate case last month and agreed not to file another gas rate case before December of 2021. We expect an order in our electric rate case and an outcome on our securitization filing by the end of this year. Following that, we will not have any general rate case decisions impacting our 2021 earnings, which provides further visibility and economic certainty throughout next year. Turning to my favorite slide, slide nine reminds you of how we manage the work intra-year to mitigate risk in future years and deliver the financial results you've come to expect. So in a year like this year, when we have seen an enormous amount of headwinds, our team hunkered down and exercised our lean operations to find and eliminate waste at every level. To date, we've realized over $100 million in savings through these efforts. And I am so very proud of all my coworkers for demonstrating world-class cost performance and enabling us to deliver savings through the CE way so that we can continue to deliver a world-class customer experience and consistent industry-leading financial performance. Now, you might be wondering if that $100 million of savings would make us deviate from our bias toward the midpoint of the guidance range. It does not. We're sitting in the driver's seat as we put the pile of savings to work for 2021 and 2022 and begin to de-risk those years It is precisely this cost discipline which prevents a roller coaster for you and instead delivers the consistent top tier annual growth rate every year, not just the easy ones. Seven percent year after year after year. We wrote the book on adapting to changing conditions and delivering results in the current year that enable next year's success and the year after that. We ride the roller coaster so that you can count on the predictable EPS and dividend growth you expect. And now I'll hand the call over to Reggie.