CMS Energy Corporation

good morning everyone and welcome to the cms energy 2023 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 star 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 2nd. 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 Madipati, Treasurer and Vice President of Finance and Investor Relations.

Thank you, Harry. Good morning, everyone, and thank you for joining us today. With me are Garrick Rochelle, 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 GAAP measure are included in the appendix and posted on our website. Now I'll turn the call over to Garrick.

Thank you, Sri, and thank you, everyone. for joining us today. What sets us apart in this industry is clear, and it's been proven for over two decades, our simple, cleaner, and leaner investment thesis. We've talked about this in many calls and many investor meetings, and it works. A long and robust capital runway, a best-in-class ability to take cost out of the business, to create headroom for needed investments, and keep bills affordable for customers. Couple that with a constructive top-tier regulatory environment, and that is our recipe for premium total shareholder return. Today, I want to highlight one part of our investment thesis, infrastructure renewal. It starts with our five-year, $15.5 billion capital plan, which supports a long runway for important customer investment. This allows us to do what is most important for our customers, deliver safe, reliable, affordable energy, and lead the industry in the clean energy transformation. We are one of the first vertically integrated utilities to switch from coal to clean by 2025, leading the industry with net zero carbon by 2040, aligned with customers, policymakers, and our strategic plan, positioning us for the future. In our gas business, we're on pace to net zero methane by 2030, and with a 20% reduction in Scope 3 emissions, one of the few in the industry, making the gas system safer and cleaner. And in our electric distribution system, we are hardening the grid to make it more reliable today while preparing for the resiliency that will be required for EVs, connected devices, and to mitigate impacts of climate change. Our electric distribution system is vast, covering much of the lower peninsula of Michigan, but it's aging. and we are seeing more frequent and severe weather, which proves the future will require something different because our customers count on us for reliable service. Last month, we filed our Electric Reliability Roadmap with the Michigan Public Service Commission, which outlines our plan to improve reliability and prepare the system for greater resiliency. Over the last 20 years, we've seen an increase in both the frequency of storms and higher wind speeds with some of the most extreme winds within the last four years. We're clearly seeing the effects of climate change. Given this, in the increasing dependency on the electric distribution system, we have set forward a plan that bolsters the system now and builds for the future. We worked with the leading industry research institute, EPRI, benchmarking companies, as well as advancing technology to build a robust and comprehensive plan. This five year electric reliability roadmap calls for $7 billion of capital investment to harden the system, expand undergrounding, update infrastructure, increase capacity, and advance automation. To give you a small snapshot, Our plan includes roughly 1,000 miles of system undergrounding in the near term. In longer term, significantly more undergrounding to ensure our system is prepared to withstand severe weather. Originally, our design standard was for 40 mile per hour wind. With the wind speeds we are seeing today, our new standard is for 80 mile per hour wind and half an inch of ice loading. This plan also includes further automation in machine modeling. adding technology to more precisely locate and isolate damage, reroute power, and better predict problem areas, keeping more customers online, and responding to outages faster. We've put our stake in the ground. We've identified the steps to improve reliability, a step change, and build an electric grid that can better withstand extreme weather and better serve our customers in the future. With Commission support, this plan will reduce the frequency and duration of outages while moving us into second quartile for reliability. Coupled with additional customer investments, the longer-term vision delivers a grid where no outage will affect more than 100,000 customers and no customer will be without power for more than 24 hours. We expect these investments to be part of our upcoming electric rate case filings and will be implemented upon Commission approval. And let me be clear, we are already making progress. We've doubled our investment in vegetation management over the last three years, shortening our trim cycles. We've seen greater than 60% benefit where we've done the work. We've increased the amount of customer investments and upgrades, fusing and hardening, installing nearly 15,000 fused devices in the last two years, more than we've ever done, reducing the number of customers impacted per interruption. We've increased our maintenance inspection frequency finding potential failures before they occur. And just last week, we were notified that of the nearly 300 companies who applied for grants from the Department of Energy, we were one of seven companies who were awarded $100 million for sectionalizing and improving circuits in disadvantaged communities. This is great for our company and our customers. First, it accelerates investments. which were already part of our $7 billion electric reliability roadmap. Second, it strikes the important balance of reliability improvement and affordability. And finally, because these are matching grants, it provides greater line of sight and certainty for recovery of these needed customer investments. We take our commitment to serve seriously. What our customers deserve, what we wake up every day to deliver. That's why we construct it. our electric reliability roadmap. On slide five, I want to take a moment to provide an update on our regulatory calendar. In September, we revised our position in our electric rate case to $169 million and maintained our position for a 10.25% ROE and a 51.5% equity ratio. We're requesting approval of a 10-mile undergrounding pilot with plans to underground over 400 miles annually beginning in 2027, which aligns with our electric reliability roadmap. A small but important step in building out a program that can be supported by the Michigan Public Service Commission and will deliver significant improvement for our customers. We also requested a recovery mechanism for investment in our electric distribution system to improve reliability. Similar to the mechanism we've utilized in our gas business, which creates greater clarity on the investment and customer benefit while improving certainty of recovery. We expect a final order by March of next year. We also recently received approval from the Michigan Public Service Commission on our gas rate case settlement, providing continued value for our customers and investors. These rates became effective October 1st. We plan to follow our next gas rate case in December of this year. This case brings a continued focus on a safe, reliable, affordable, and clean natural gas system that will support a needed customer investment. As we've shared in previous calls and in investor meetings, we continue to see the Michigan regulatory jurisdiction as constructive in providing a good balance for all stakeholders, living up to its ranking as top tier. Moving on to the financials for the third quarter, we reported adjusted earnings per share of 61 cents and $2.06 per share year to date. Reggie will provide additional details, but despite a significant storm in the third quarter, we remain on track to deliver on our full year guidance of $3.06 to $3.12 per share and expect to deliver toward the high end. Given that confidence, We are initiating our full-year guidance for 2024 at $3.27 to $3.33 per share, reflecting 6% to 8% growth off the midpoint of this year's range. And we are well-positioned, just like 2023, to be toward the high end of that range. It is also important to remember that we always re-base guidance off our actuals on the Q4 call, compounding our growth. This brings you a higher quality of earnings and differentiates us from others in the sector. We're also reaffirming our long-term adjusted earnings growth of 6% to 8% per year with continued confidence toward the high end and remain committed to dividend per share growth of 6% to 8%. Like we've done in previous years, we'll provide you with an update on our 2024 guidance based off of actuals as well as a refresh of our five-year capital plans on the Q4 call. We continue to be confident in our ability to deliver the year and in our longer-term outlook, providing exceptional value for all stakeholders. With that, I'll hand it over to Reggie to offer some additional details.