10-QPeriod: Q1 FY2023

CMS ENERGY CORP Quarterly Report for Q1 Ended Mar 31, 2023

Filed April 27, 2023For Securities:CMSCMS-PCCMSACMSCCMSD

Summary

CMS Energy Corporation (CMS) reported its first-quarter 2023 financial results, showing a decrease in net income available to common stockholders to $202 million from $351 million in the prior year. This decline was primarily attributed to lower electric and gas sales, largely due to unfavorable weather conditions, and increased service restoration costs. These factors were partially offset by the benefits of gas and electric rate increases. The company continues to advance its "Triple Bottom Line" strategy focusing on people, planet, and profit, with significant investments planned in infrastructure upgrades and clean energy generation over the next five years, totaling $15.5 billion. This includes a substantial commitment to enhancing gas and electric infrastructure to improve safety and reliability, as well as expanding renewable energy capacity. CMS Energy is actively managing its transition to cleaner energy sources, with plans to phase out coal-fueled generation by 2025 and setting ambitious net-zero emissions goals for its electric business by 2040 and its entire operations by 2050. The company's strategic investments and regulatory approvals, such as the recent electric rate case settlement, are expected to support its long-term financial performance and sustainability objectives.

Financial Statements
Beta
Revenue$2.28B
Operating Expenses$1.97B
Operating Income$314.00M
Interest Expense$144.00M
Net Income$204.00M
EPS (Basic)$0.69
EPS (Diluted)$0.69
Shares Outstanding (Basic)290.70M
Shares Outstanding (Diluted)291.20M

Key Highlights

  • 1Net income available to common stockholders decreased to $202 million in Q1 2023 from $351 million in Q1 2022, primarily due to unfavorable weather impacting sales and higher service restoration costs.
  • 2CMS Energy plans to invest approximately $15.5 billion over the next five years (2023-2027) in infrastructure upgrades, replacements, and clean generation.
  • 3The company is on track to phase out coal-fueled generation by 2025 and is committed to net-zero carbon emissions from its electric business by 2040 and net-zero greenhouse gas emissions for its entire business by 2050.
  • 4An electric rate increase of $155 million was approved and became effective in January 2023.
  • 5A gas rate increase application seeking $212 million was filed in December 2022.
  • 6Capital expenditures for the first quarter of 2023 were $651 million, an increase from $539 million in the prior year's period.
  • 7The company has $598 million in consolidated cash and cash equivalents at March 31, 2023, and significant availability under its revolving credit facilities.

Frequently Asked Questions

The primary reasons for the decrease in net income available to common stockholders to $202 million in Q1 2023 from $351 million in Q1 2022 were lower electric and gas sales, largely due to unfavorable weather conditions, and higher service restoration costs. These were partially offset by increases in gas and electric rates.

CMS Energy plans to invest approximately $15.5 billion over the next five years (2023-2027). This investment will focus on maintaining and upgrading gas and electric infrastructure ($12.4 billion) to enhance safety, reliability, and reduce energy waste, as well as investing in clean generation resources ($3.1 billion), including solar, wind, and hydroelectric power.

CMS Energy is making significant strides in its clean energy transition. The company plans to retire all coal-fueled generation by 2025 and has set net-zero carbon emissions goals for its electric business by 2040 and for its entire business by 2050. Key initiatives include expanding renewable energy capacity, particularly solar generation, and investing in energy storage solutions.

The regulatory environment is critical, with the Michigan Public Service Commission (MPSC) playing a key role. In January 2023, an electric rate increase of $155 million was approved. Additionally, Consumers filed for a gas rate increase of $212 million in December 2022. The company is working through regulatory processes for its Clean Energy Plan, which includes significant investments in cleaner energy sources and infrastructure.