10-QPeriod: Q2 FY2015

CMS ENERGY CORP Quarterly Report for Q2 Ended Jun 30, 2015

Filed July 23, 2015For Securities:CMSCMS-PCCMSACMSCCMSD

Summary

CMS Energy Corporation (CMS) reported its financial results for the quarter and six months ended June 30, 2015. For the six-month period, net income available to common stockholders decreased to $269 million, or $0.98 per diluted share, compared to $287 million, or $1.05 per diluted share, in the prior year. This decline was primarily driven by higher depreciation and property taxes related to capital investments, and lower electric and gas sales due to milder weather. Despite these headwinds, the company benefited from electric and gas rate increases. The company continues to focus on its long-term capital investment program, with Consumers Energy planning approximately $15.5 billion in investments from 2015 through 2024. Key areas of investment include maintaining and enhancing the electric and gas utility infrastructure, environmental compliance, and the Smart Energy program. Regulatory matters remain a significant factor, with Consumers Energy actively engaged in rate cases for both its electric and gas businesses. The company also highlighted its ongoing efforts in customer value, operational safety, and compliance with environmental regulations.

Financial Highlights

45 data points
Beta

Revenue

$1.35B

Net Income

$68.00M

5.0% Net Margin

EPS (Diluted)

$0.25

Total Assets

$19.24B

Cash & Equivalents

$477.00M

Free Cash Flow

$175.00M

Financial Statements
Beta
Revenue$1.35B
Operating Expenses$1.15B
Operating Income$204.00M
Interest Expense$103.00M
Net Income$68.00M
EPS (Basic)$0.25
EPS (Diluted)$0.25
Shares Outstanding (Diluted)276.20M

Key Highlights

  • 1Net income available to common stockholders for the six months ended June 30, 2015, was $269 million, a decrease from $287 million in the prior year.
  • 2Diluted EPS for the six months ended June 30, 2015, was $0.98, down from $1.05 in the prior year.
  • 3Consumers Energy plans significant capital investments of approximately $15.5 billion from 2015 through 2024 to maintain and improve its electric and gas infrastructure.
  • 4The company is actively managing regulatory matters, with ongoing electric and gas rate cases before the Michigan Public Service Commission (MPSC).
  • 5Consumers Energy self-implemented an $110 million annual electric rate increase in June 2015.
  • 6The company's Smart Energy program, involving the installation of smart meters, is progressing with a total of 1.8 million smart meters planned by the end of 2017.
  • 7Operating cash flow for the six months ended June 30, 2015, increased significantly due to lower natural gas prices and the absence of large under-recoveries from the prior year's severe winter weather.

Frequently Asked Questions

The decrease in net income and EPS was primarily due to higher depreciation and property taxes resulting from recent capital investments, coupled with lower electric and gas sales attributable to milder weather conditions experienced during the period. These factors were partially offset by the benefits realized from electric and gas rate increases.

CMS Energy, through its subsidiary Consumers Energy, has outlined a substantial capital investment program of approximately $15.5 billion from 2015 through 2024. Key priorities include investments in maintaining and enhancing the electric and gas utility infrastructure for reliability and safety, compliance with environmental regulations, and the continued deployment of its Smart Energy program, which involves installing advanced metering infrastructure.

Consumers Energy is actively engaged in regulatory proceedings. For its electric business, it filed a general rate case in December 2014 seeking a $163 million increase and self-implemented an $110 million increase in June 2015, subject to refund. For its gas business, it filed a rate case in July 2015 seeking an $85 million increase. The company also highlighted ongoing efforts related to energy optimization plans and environmental compliance.

CMS Energy and Consumers Energy maintain significant liquidity through available revolving credit facilities and other sources. For the first six months of 2015, net cash provided by operating activities increased substantially, primarily due to lower gas purchase costs and the absence of significant under-recoveries seen in the prior year. The company expects its liquidity sources to remain sufficient to meet its obligations.