10-QPeriod: Q3 FY2022

CMS ENERGY CORP Quarterly Report for Q3 Ended Sep 30, 2022

Filed October 27, 2022For Securities:CMSCMS-PCCMSACMSCCMSD

Summary

CMS Energy Corporation (CMS) reported financial results for the nine months and third quarter ended September 30, 2022. For the nine months, Net Income Available to Common Stockholders was $659 million, a decrease from $711 million in the prior year period, resulting in Diluted EPS of $2.27, down from $2.46. This decline was primarily attributed to the absence of earnings from discontinued operations and higher maintenance and operating expenses, partially offset by favorable gas sales due to weather. The company continues to advance its "CE Way" operating model and "Triple Bottom Line" philosophy, focusing on people, planet, and profit. Significant progress is being made on environmental initiatives, including a commitment to retire coal-fueled generation by 2025 and ambitious net-zero emissions goals for its electric and gas businesses. CMS Energy is also undertaking a substantial capital investment plan of $25 billion over the next ten years, primarily focused on infrastructure upgrades, reliability, and clean energy projects. Regulatory matters, including ongoing rate case filings for both electric and gas utilities, are critical to cost recovery and future investment. Despite a decrease in year-over-year earnings, the company remains focused on its long-term strategic objectives and financial stability.

Financial Highlights

46 data points
Beta

Revenue

$2.02B

Net Income

$165.00M

8.2% Net Margin

EPS (Diluted)

$0.56

Total Assets

$30.37B

Cash & Equivalents

$168.00M

Free Cash Flow

-$1.04B

Financial Statements
Beta
Revenue$2.02B
Operating Expenses$1.77B
Operating Income$258.00M
Interest Expense$127.00M
Net Income$165.00M
EPS (Basic)$0.56
EPS (Diluted)$0.56
Shares Outstanding (Basic)289.60M
Shares Outstanding (Diluted)290.10M

Key Highlights

  • 1For the nine months ended September 30, 2022, Net Income Available to Common Stockholders decreased to $659 million from $711 million in the same period last year, with Diluted EPS falling to $2.27 from $2.46.
  • 2The company is progressing with its Clean Energy Plan, aiming to retire all coal-fueled generation by 2025 and setting net-zero carbon emissions goals for its electric business by 2040 and its entire natural gas system by 2050.
  • 3CMS Energy plans significant capital investments of $25 billion over the next ten years, with a focus on infrastructure upgrades, safety, reliability, and clean energy transformation.
  • 4The 2021 Electric Rate Case resulted in a revised requested rate increase of $292 million, with a decision anticipated by March 2023. The 2021 Gas Rate Case settlement authorized an annual rate increase of $170 million, effective October 1, 2022.
  • 5Cash flow from operating activities for CMS Energy decreased to $667 million for the nine months ended September 30, 2022, compared to $1,483 million in the prior year, largely due to unfavorable changes in working capital.
  • 6CMS Energy has substantial available liquidity, with $536 million under its revolving credit facility and Consumers having $1.0 billion available under its facilities, supporting its capital expenditures and operational needs.

Frequently Asked Questions

The decrease in net income available to common stockholders to $659 million from $711 million and a corresponding drop in diluted EPS to $2.27 from $2.46 were primarily due to the absence of earnings from discontinued operations (EnerBank sale in 2021) and higher maintenance and other operating expenses. This was partially offset by higher gas sales driven by favorable weather conditions.

CMS Energy is committed to environmental stewardship and has ambitious goals. Key initiatives include retiring all coal-fueled generation by 2025, reducing carbon dioxide emissions by over 30% since 2005, and achieving net-zero carbon emissions from its electric business by 2040 and net-zero greenhouse gas emissions for its entire natural gas system by 2050. They are also expanding renewable energy generation, particularly solar, and investing in energy waste reduction programs.

CMS Energy and its subsidiary Consumers rely on capital markets for funding, with plans to invest $25 billion over the next ten years. They expect to have continued access to financial and capital markets. As of September 30, 2022, CMS Energy had $536 million available under its revolving credit facility, and Consumers had $1.0 billion available under its credit facilities, in addition to other financing arrangements.

For the electric utility, Consumers filed for a rate increase of $292 million in September 2022, with a decision expected by March 2023. For the gas utility, a settlement agreement was approved by the MPSC in July 2022, authorizing an annual rate increase of $170 million, effective October 1, 2022. These rate cases are crucial for cost recovery and supporting investment plans.