10-QPeriod: Q3 FY2016

CMS ENERGY CORP Quarterly Report for Q3 Ended Sep 30, 2016

Filed October 27, 2016For Securities:CMSCMS-PCCMSACMSCCMSD

Summary

CMS Energy Corporation (CMS) reported solid financial performance for the nine months ended September 30, 2016. Net income available to common stockholders increased to $474 million, or $1.70 per diluted share, compared to $417 million, or $1.51 per diluted share, in the prior year period. This growth was primarily driven by beneficial electric and gas rate increases and higher electric sales due to favorable weather conditions. The company continues to execute its strategic capital investment plan, with Consumers Energy expecting to invest approximately $17 billion from 2016 through 2025 to enhance reliability, safety, and efficiency. Regulatory matters remain a key focus, with ongoing proceedings for both electric and gas rate increases. Consumers Energy has self-implemented rate increases for both electric and gas services, subject to refund, to recover ongoing investments. The company is also navigating evolving energy policies in Michigan, particularly concerning clean energy initiatives and evolving environmental regulations. Despite these complexities, CMS Energy maintains a strong liquidity position and expects sufficient cash flows to fund its ongoing operations and capital expenditures.

Financial Highlights

45 data points
Beta

Revenue

$1.59B

Net Income

$186.00M

11.7% Net Margin

EPS (Diluted)

$0.67

Total Assets

$20.84B

Cash & Equivalents

$339.00M

Free Cash Flow

-$267.00M

Financial Statements
Beta
Revenue$1.59B
Operating Expenses$1.21B
Operating Income$375.00M
Interest Expense$110.00M
Net Income$186.00M
EPS (Basic)$0.67
EPS (Diluted)$0.67
Shares Outstanding (Diluted)279.20M

Key Highlights

  • 1Net income available to common stockholders increased by $57 million to $474 million for the nine months ended September 30, 2016, compared to the same period in 2015.
  • 2Diluted Earnings Per Share (EPS) rose to $1.70 for the nine months ended September 30, 2016, from $1.51 in the prior year.
  • 3CMS Energy is undertaking a significant capital investment program, with Consumers Energy planning approximately $17 billion in investments from 2016 through 2025.
  • 4Consumers Energy filed for electric and gas rate increases, with self-implementation of rate adjustments already in effect for both, subject to refund.
  • 5The company is actively managing environmental compliance, with significant planned capital expenditures for emissions control and other environmental regulations.
  • 6CMS Energy reported strong liquidity, with $549 million available under its secured revolving credit facility at September 30, 2016.
  • 7The company continues to modernize its infrastructure, including the deployment of smart meters through its "Smart Energy" program and Gas AMR technology.

Frequently Asked Questions

The primary drivers of CMS Energy's earnings growth for the nine months ended September 30, 2016, were increased net income attributable to electric and gas rate increases and higher electric sales, largely influenced by warmer-than-normal summer weather. These factors were partially offset by increased depreciation and property taxes on higher plant in service and lower gas deliveries due to a mild winter.

CMS Energy, through its subsidiary Consumers Energy, has a substantial capital investment plan. Consumers Energy expects to invest approximately $17 billion from 2016 through 2025, primarily focused on enhancing system reliability, safety, and efficiency, including investments in electric and gas infrastructure, smart energy technology, and environmental compliance.

Key regulatory matters include ongoing electric and gas rate cases before the Michigan Public Service Commission (MPSC). Consumers Energy has filed for rate increases and has self-implemented interim rate adjustments, subject to refund, to recover investments. The company is also monitoring evolving state energy policies and environmental regulations that could impact operations and require further capital expenditures.

CMS Energy is committed to environmental quality and is undertaking significant capital investments to comply with increasingly stringent state and federal environmental laws and regulations. This includes efforts related to air quality, greenhouse gas emissions (such as the Clean Power Plan), coal combustion residuals (CCRs), and water quality. The company expects to recover these costs through customer rates.