10-QPeriod: Q2 FY2023

CMS ENERGY CORP Quarterly Report for Q2 Ended Jun 30, 2023

Filed July 27, 2023For Securities:CMSCMS-PCCMSACMSCCMSD

Summary

CMS Energy Corporation (CMS) reported a decrease in net income available to common stockholders for the six months ended June 30, 2023, to $397 million from $496 million in the same period of 2022. This decline was primarily attributed to lower gas and electric sales due to unfavorable weather conditions and increased service restoration costs, partially offset by gains from rate increases and debt extinguishment. The company is actively executing its long-term Clean Energy Plan, which includes significant investments in renewable generation and infrastructure upgrades, alongside a commitment to environmental sustainability with net-zero emission goals. Despite the year-over-year earnings decline, the company's strategic initiatives, including approved rate increases and a robust capital expenditure plan of $15.5 billion over the next five years, are designed to support future growth and maintain reliable service. Management is focused on balancing customer affordability with necessary investments and regulatory recovery, highlighting the constructive nature of the Michigan regulatory environment.

Financial Highlights

42 data points
Beta

Revenue

$1.55B

Net Income

$198.00M

12.7% Net Margin

EPS (Diluted)

$0.67

Total Assets

$32.27B

Cash & Equivalents

$389.00M

Free Cash Flow

$665.00M

Financial Statements
Beta
Revenue$1.55B
Operating Expenses$1.31B
Operating Income$244.00M
Interest Expense$152.00M
Net Income$198.00M
EPS (Basic)$0.67
EPS (Diluted)$0.67
Shares Outstanding (Basic)290.90M
Shares Outstanding (Diluted)291.30M

Key Highlights

  • 1Net income available to common stockholders for the six months ended June 30, 2023, decreased to $397 million, compared to $496 million in the prior year period.
  • 2Diluted Earnings Per Share (EPS) for the six months ended June 30, 2023, was $1.36, down from $1.71 in the same period of 2022.
  • 3Consumers expects to spend $15.5 billion on capital expenditures from 2023 through 2027, with a significant portion allocated to gas and electric infrastructure upgrades and clean generation.
  • 4The company continues to advance its Clean Energy Plan, which includes phasing out coal-fueled generation by 2025 and significant investments in renewable energy sources like solar.
  • 5CMS Energy purchased the Covert Generating Facility, a natural gas-fueled unit, for $810 million in May 2023 as part of its Clean Energy Plan.
  • 6Despite lower sales due to unfavorable weather, Consumers electric utility saw an increase in net income due to rate increases, which were partially offset by higher service restoration costs.
  • 7The company has set ambitious net-zero emission goals: net-zero methane emissions from its natural gas delivery system by 2030, net-zero carbon emissions from its electric business by 2040, and net-zero greenhouse gas emissions for the entire business by 2050.

Frequently Asked Questions

The decrease in net income available to common stockholders for the six months ended June 30, 2023, was primarily due to lower gas and electric sales, largely influenced by unfavorable weather conditions. Additionally, higher service restoration costs contributed to the decline. These factors were partially offset by the positive impact of gas and electric rate increases and a gain on the extinguishment of debt.

CMS Energy, through its subsidiary Consumers, plans to invest $15.5 billion in capital expenditures from 2023 through 2027. A significant portion, $12.4 billion, will be directed towards maintaining and upgrading gas infrastructure and electric distribution systems to enhance safety, reliability, and customer satisfaction. An additional $3.1 billion is planned for investments in clean generation, including solar, wind, and hydroelectric resources.

CMS Energy is making substantial progress with its Clean Energy Plan. Key initiatives include the planned retirement of all coal-fueled generation by 2025, the acquisition of the Covert Generating Facility (a natural gas unit), and plans to add nearly 8,000 MW of solar generation by 2040. The company has also set ambitious goals for net-zero emissions across its operations by 2040 and 2050, underscoring its commitment to environmental sustainability.

Regulatory matters are critical to Consumers' business, particularly rate cases before the Michigan Public Service Commission (MPSC). These proceedings are essential for recovering investments in infrastructure and clean energy initiatives, while also aiming to ensure fair and affordable customer rates. Recent approvals of rate increases and ongoing rate case filings demonstrate the company's focus on navigating the regulatory landscape to support its investment plans and financial stability.