CMS Energy Corporation

Good morning everyone and welcome to the CMS Energy 2024 first 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 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 May 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. Jason Shaw, Treasurer and Vice President of Investor Relations.

Thank you, Drew. 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 measures are included in the appendix and posted on our website. And now I'll turn the call over to Garrett.

Thank you, Jason, and thank you, everyone, for joining us today. CMS Energy, 21 years of consistent industry leading results. And what sets us apart is our performance. And it starts with our investment thesis. It is how we prioritize and focus our work to deliver the service our customers deserve and the financial outcomes you expect. As we look ahead, we see ample investment opportunity over the long term as we lead the clean energy transformation and deliver the critical work needed to improve the reliability and resiliency of our electric and gas systems. This important work is supported by legislation and a constructive regulatory environment, which provides confidence in making required investments to strengthen our system and prepare for a clean energy future. We plan ahead through our electric reliability roadmap, natural gas delivery plan, and our upcoming renewable energy plan, which all provide visibility and transparency and the work we'll deliver to keep our systems safe, sound, and clean. At CMS Energy, we work both sides of the equation. We make important investments in our systems, and we work to keep bills affordable. Our CE Way lean operating system helps us improve our performance, increase productivity, and take costs out of the business. And we are hard at work to grow Michigan through economic development. ensuring Michigan thrives well into the future. These efforts are important and help us keep customers' bills affordable. At CMS Energy, we make our investment thesis work year after year, and it continues to set us apart in the industry, delivering results for all our stakeholders. Today, I'm going to share three focus areas that have me excited about our future and give us confidence in our outlook. First, our electric distribution system. As our world becomes more dependent on electricity for business growth, technology advancements, devices and vehicles, our system needs to be stronger, smarter and more resilient for our customers. But our vast electric distribution system is aging. It needs to be modernized and strengthened for increasingly severe weather. Over the past five years, we have seen some of the highest wind speeds on record in more frequent storm activity. We have responded to this need through our electric reliability roadmap. Currently, a five-year, $7 billion plan to improve performance and harden our system for the future. The plan utilizes best practices from across the industry, including designing the system with stronger poles, undergrounding, sectionalizing, and further automation. And given the size of our distribution system, 90,000 miles of line, nearly 1,200 substations, and a historically lower investment per mile compared to peers, we see a long runway of needed investment. We've incorporated roughly half of the incremental $3 billion you see on slide four into our current capital plan. You'll start to see this investment show up in our next electric rate case, which will file in the second quarter. These important investments will mean fewer and shorter outages for our customers. And we are already seeing meaningful improvements in the investments made over the last few years. The second focus area I want to share is our continued leadership of the transformation to clean energy in the industry. In the past, I have shared our approved plans to eliminate coal in 2025, reduce carbon, grow energy efficiency, and build out renewables in pursuit of our net zero target and cleaner air for our customers and our planet. In late 2023, much of our clean energy targets were bolstered by Michigan's new clean energy law. This law is unique in the industry and is good for all stakeholders. It provides us with the opportunity to further reduce our carbon footprint while maintaining resource adequacy, affordable customer bills, and delivering for our investors. On the right side of the slide, you'll see the opportunities ahead as we prepare to meet Michigan's new clean energy law. It supports an accelerated plan with a decarbonization of our system with an enhanced financial compensation mechanism which provides a roughly 9% return on clean purchased power agreements. In addition, there's an increased incentive on energy efficiency as we target 60% renewables by 2035 and 100% clean energy by 2040. And it gives us important flexibility as we think through how to best meet our customers' needs with renewables across the broad MISO footprint. This mechanism and the flexibility in the law helps us balance customer affordability as we work through this transition. For our customers, all this means stronger, more resilient, and cleaner energy. For our investors, an exciting and robust investment runway well into the future. Now, let's work the other side of this investment equation. The third focus area that I want to share today how we are helping Michigan grow and thrive, which is good for our company and our customers. Growth across our service territory is good for Michigan, helps keep bills affordable for our customers, and provides headroom for the investments I just referenced. And I couldn't be more excited about the growth we are seeing in our state. Michigan has a strong fiber network, access to fresh water, temperate climate, energy-ready sites, an attractive energy rate. In February, we secured a contract with a large data center in the heart of our service territory. The majority of the 230 megawatts of new load is expected to be online by 2026. This is nice load growth. And I'm even more excited about the manufacturing load growth we are seeing in Michigan, which is a differentiator for us. Our statewide leadership of projects such as Goshen, Hemlock Semiconductor, Ford, and many others continues to drive new and expanding load in our service territory. These projects bring significant jobs, supply chains, commercial growth, housing starts, and broad Michigan investment. The ancillary benefits of manufacturing growth are good for all customers and bolster our confidence in our plan for 2024 and beyond. Our customers thrive when Michigan thrives. And I'm proud of the diversity and quality of new load our leadership is working to bring to the state. Now, let's get into the numbers. In the first quarter, we reported adjusted earnings per share of 97 cents. Although we experienced a warmer than normal winter, the healthy set of countermeasures we deployed in 2023 as well as our active use of the CE way, continue to benefit us in 2024. We remain confident in this year's guidance and long-term outlook and are reaffirming all our financial objectives. Our full-year guidance remains at $3.29 to $3.35 per share with continued confidence toward the high end. Longer term, we continue to guide toward the high end of our adjusted EPS growth range of 6% to 8%, which implies and includes 7% up to 8%. With that, I'll hand the call over to Reggie.