CMS Energy Corporation

Good morning, everyone, and welcome to the CMS Energy 2026 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 out to an operator, please press the star followed by zero. Just a reminder that there will be a rebroadcast of this conference call today, beginning at 12pm Eastern Time, running through November 3rd. 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 Shore, Treasurer and Vice President of Investor Relations.

Thank you, Piercy. Good morning, everyone, and thank you for joining us today. With me are Garrick Rochow, President and Chief Executive Officer, and Sri Maddipati, 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 Garrick.

Thank you, Jason, and thank you everyone for joining us today. I always start with our investment thesis because it is a durable and proven model that has delivered for more than 20 years of consistent industry-leading performance for all stakeholders. For our customers, it enables important investments in safe, reliable, and clean energy across our electric and gas systems while maintaining affordable bills. For our investors, it delivers a premium total shareholder return made up of 6% to 8% adjusted EPS growth toward the high end, which reflects 7% or better compounded annually and paired with an approximately 3% dividend yield. And as shared on our Q2 earnings call, with the restructuring of North Star Clean Energy, our model is further simplified as we exit non-utilities renewable development and deliver approximately 100% regulated utility earnings growth after 2027. Let's start with Northstar. As of today, we have more than 35% of the assets at signed agreements or closed. There continues to be strong interest across the remaining assets with the majority of these assets in exclusivity with buyers. In summary, good progress. We are on track to complete the restructuring by year end. As a reminder, as part of this restructuring, we retain Dearborn Industrial Generation, or DIG, several small gas peakers, and four commercial solar projects, all of which generate strong cash flows and support our long-term growth strategy. This restructuring strengthens our balance sheet and allows us to reduce over $500 million of funding within our current five-year plan for use at the utility, supporting important and needed customer investments in our systems. Simply put, nearly 100% regulated utility earnings growth after 2027, reduced parent funding requirements improved earnings quality. This restructuring strengthens our business model and positions the company to make the long-term utility investments our customers need. Speaking of customer-focused utility investments, in September, we filed our long-term integrated resource plan, or IRP, outlining how we will meet Michigan's clean energy targets, while ensuring reliable electric service through 2040. The IRP details in all of the above resource strategy that combines natural gas, solar, wind, pump storage, and battery storage to deliver reliable, affordable, and cleaner energy for Michigan customers. We've foreshadowed a portion of these customer investment opportunities in previous earnings calls, but as noted on the slide, the plan includes to replace the aging oil and gas-fired peakers at our CARN 3 and 4 plans and to ensure reliability of the electric grid. The plan further reflects energy waste reduction and virtual power plant options that help customers save money while providing additional earning opportunities. In summary, our IRP provides significant capital investment opportunity of roughly $27 billion in new clean energy resources, Battery Storage, and Gas Generation. Another important aspect of the plan is the ability to earn on power purchase agreements. Frankly, it's a differentiator in our sector. The IRP assumes a financial compensation mechanism, or FCM, of approximately $125 million beginning in 2031, growing to approximately $195 million by 2040. Assuming a 50-50 ownership split. On the right side of the slide, we've offered visibility into how the value of the FCM has progressed over the last few financial plans and the path to achieve those earnings. The ability to earn in a capital light way has grown as we have signed more PPAs for renewables, batteries, and clean energy. Of note, The filed IRP includes a recently signed large clean energy PPA of 680 megawatts. This PPA de-risks new renewables development, supports Michigan's clean energy targets, delivers the energy and capacity our customers need while ensuring the continued strength of our balance sheet. I look forward to sharing more details at the EEI conference in November. I'm also pleased to share we continue to deliver on the approximately 900 megawatts of growth that supports the two to three percent annual low growth we've highlighted within our five-year plan period. As noted on the slide, we've added approximately 745 megawatts of new contracts in our service territory and we've energized more than half of that load or approximately 450 megawatts. Essentially, we are adding the equivalent of a large data center. through primarily the manufacturing and semiconductor industries. And it comes with more jobs and other tertiary benefits such as supply chain, housing starts, and potentially higher margin commercial and residential growth. And keep in mind, this does not include the large load agreement, a large data center signed earlier this year. That project continues to progress through zoning in multiple locations, and I expect further movement after the elections. I continue to be proud with what the CMS energy team has delivered and know that the benefit of growth flows to our customers as we spread fixed costs across a larger customer base, driving affordability while these opportunities create jobs and strengthen our communities and our state. As we turn to the regulatory calendar, I'll highlight the constructive order from the Commission in our gas rate case approving $139 million or approximately 60% of our final ask, a 9.8% ROE and 50% equity ratio. The Commission's order delivers another proof point of the constructive regulatory environment in Michigan and supports the important and needed investments in our gas distribution system. In October, we filed our revised or updated electric rate case requesting a $443 million revenue increase, a 10.25% ROE and a 51.75% equity ratio. Staff also filed their position in October recommending a $265 million revenue increase or 60% of our revised ask, a 9.85% ROE in 50% equity ratio. Additionally, staff supported our storm deferral recovery for the 2025 storms within the electric rate case, and the Commission approved the deferral of 2026 Q1 storms in August, furthering our confidence in recovery and evidence of a constructive regulatory environment in Michigan. If I pull up from the details and reflect on the entire electric rate case, staff's position is constructive, a good starting point, and there are opportunities we'll pursue in the rebuttal process to ensure we support the important and needed investments to improve reliability. And that the record further reflects our reasonable sales forecast for both residential and commercial growth. We expect the PFD position in late January in a final order by early April of next year. Now, on to the financials. Year-to-date, we reported adjusted earnings per share of $2.95. We are reaffirming our full-year 2026 guidance of $3.83 to $3.90 per share with continued confidence toward the high end. Our financial performance has positioned us to reinvest in the business, de-risking future years and further enhancing service for our customers. We are also reaffirming our 2027 guidance of $4.08 to $4.17 per share, which incorporates the North Star restructuring. Longer term, we continue to guide toward the high end of our adjusted EPS growth range of 6% to 8%. Finally, as we've done in previous years, we'll provide an update on our year-end call regarding the roll forward of our five-year utility capital plan and broader financial plan. With that, I'll hand the call over to Sri.