CMS Energy Corporation

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 in the conference call you need to reach an operator, please press star followed by zero. Just a reminder, there will be a rebroadcast of this conference call beginning today at 12 p.m. Eastern Time and running through February 10th. This presentation is also being webcast and is available on CMS Energy's website in the Investor Relations section. At this time, I'd like to turn the call over to Mr. Sri Matipati, Treasurer and Vice President of Finance in Investor Relations. Please go ahead, sir.

Thank you, Rocco. Good morning, everyone, and thank you for joining us today. With me are Garrick Rochow, 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. reconciliations of these measures to the most directly comparable gap measures included in the appendix and posted on our website. Now I'll turn the call over to Derek.

Thank you, Sri, and thank you, everyone, for joining us today. I'm pleased to report that the team continued to deliver strong performance in 2021, demonstrating consistent results across the triple bottom line for our coworkers, customers, communities, and you, our investors. Allow me to take a few minutes to share the big wins this team accomplished in 2021. It is a point of pride that CMS was named the number one utility in the U.S. by Forbes for women and for workplace diversity. It starts with our coworkers. And we know that companies that value and practice diversity, equity, and inclusion deliver stronger performance. Our commitment to people, our coworkers, and customers was in high gear all year. For our coworkers, we delivered the 11th straight year of first quartile employee engagement. For our customers, we delivered first quartile customer experience and launched several programs which support our most vulnerable and prepare all for a cleaner future with EVs and renewable energy generation. This year's highlights include the expansion of our voluntary green pricing program, which allows for an incremental 1,000 megawatts of owned renewables and our Power My Fleet EV program to meet the demand of Michigan businesses, governments, and schools as they electrify their fleet. And just this week, we announced, along with General Motors, a plan to power three existing auto plants with 100% clean energy through our voluntary green pricing program. And I know, yes, yes, I know, all of you want to hear about our IRP. Our Clean Energy Plan, also known as our IRP, places us in a solid leadership position on the transformation to clean energy. It has us out of coal by 2025, which achieves a 60% carbon emissions reduction. I am pleased with the progress we are seeing in the regulatory process I look forward to landing the IRP in 2022. I also want to share the progress we have made with our gas system. Our commitment to be net zero methane by 2030 is industry leading. We are making our gas system safer and cleaner by replacing old mains and services with modern materials. This year, we reduced fugitive methane emissions by more than 445 metric tons. and executed on our best year ever for main replacement. This stand to reduce methane extends beyond our system with exciting new programs, which will make a positive impact on the planet. We recently announced a plan to build and own our first renewable natural gas facility with a Michigan dairy farm, which is included in our pending gas rate case. This facility would be a regulated asset and the emissions reduction will remove the equivalent of 4,000 gasoline-fueled vehicles from the road annually. Clearly, we are on our way to a safe and clean gas system. Finally, I want to talk a little bit about Michigan, our home state, our service territory. In both our gas and electric business, we are seeing new service connections up over 2020 and 2019 above three pandemic levels in fact we have not seen this level of new electric service connections in the last 10 years we also attracted 105 megawatts of new industrial load to our service territory which brings with it 4 000 new jobs and more than 1 billion dollars of investment and we are expecting even more new load growth in the state The work we did at the end of the year on two important growth mechanisms further enhanced Michigan's competitive position. We filed an economic development rate in November, which was quickly approved by the Michigan Public Service Commission in December. We also worked closely with the legislature, business groups, and the governor's office on a package of economic development incentive bills that passed with bipartisan support signed by our governor in December. With these improvements, I expect further announcements this year on several new projects. For you, our investors, I'm pleased to share we delivered our financial targets with another year of 7% adjusted EPS growth. We continued our long track record of managing costs and keeping prices affordable through the CE way. $55 million of cost savings were realized in 2021. When I step back and reflect on 2021, it is this strong execution and result that you and we expect. And it meets our commitment, the triple bottom line, positioning our business for sustainable long-term growth. Strong execution leads to strong results. And 2021 marks another year of premium growth. We delivered adjusted earnings per share of $2.65 in 2021 at the high end of our guidance range and up 7% from 2020. And in January, the Board approved an annual dividend increase to $1.84 per share. In addition to raising our annual dividend in 2022, I'm pleased to share that we are raising our 2022 adjusted full-year guidance to $2.85 to $2.89 from $2.85 to $2.87 per share. I have confidence in our plan for 2022 and our longstanding ability to manage the work and deliver industry-leading growth. Longer term, we remain committed to growing adjusted EPS for the high end of our sixth to eighth Looking forward, we continue to see long-term dividend growth of 6% to 8% with a targeted payout ratio of about 60% over time. And finally, I'm pleased to share that we have rolled forward our five-year utility customer investment plan, increasing our prior plan by over $1 billion to $14.3 billion through 2026. On slide five, we've highlighted our new five-year $14.3 billion customer investment plan. This translates to 7% annual rate-based growth and supports the two key focus areas of our strategy, making our electric and gas systems safer and more reliable and paving the way to a clean energy future with net zero carbon and methane emissions. You will know that about 40% of our investment mix is aimed at renewable generation, grid modernization, and main and service replacements on our gas system that support the clean energy transformation. Furthermore, we continue to increase our investments in what our customers count on us for every single day, safe and reliable electric and natural gas systems. You will also see that we continue to plan conservatively We have ample upside in projects not factored in this plan, such as our IRP and voluntary green pricing program. We remain focused on the regulatory process as we make investments on behalf of our customers. In December, we received an order in our electric rate case. It offered several opportunities for us to improve our case process, and we are hard at work as we prepare our next case. This order did support our plan by maintaining our existing 9.9% ROE, increasing our regulatory equity ratio by 34 basis points, and approving $54 million in revenue requirements, exclusive of $27 million of lower depreciation approved prior to the order. We expect to file our next electric rate case early this year and anticipate an initial order on our IRP in April and a final order in our gas rate case expected by October. With that, I'll turn the call over to Reggie.