PR Newswire | Jul 29, 2021 08:01AM EDT

the High End of 2021 EPS Guidance

07/29 07:00 CDT

CMS Energy Announces Strong Second Quarter Performance with Confidence Toward the High End of 2021 EPS Guidance JACKSON, Mich., July 29, 2021

JACKSON, Mich., July 29, 2021 /PRNewswire/ -- CMS Energy announced today reported earnings per share of $0.61 for the second quarter of 2021, compared to $0.48 per share for the same quarter in 2020. The company's reported earnings per share from continuing operations were $0.55 for the second quarter of 2021, compared to $0.45 per share for the same quarter in 2020, which exclude the discontinued operations of EnerBank given the pending sale. The company's adjusted earnings per share from continuing operations were $0.55 for the second quarter of 2021, compared to $0.46 per share for the same quarter in 2020, which exclude the discontinued operations of EnerBank given the pending sale.

2021 Financial Results

Q2 YTD

Reported Total EPS (GAAP) $0.61 $1.82

Plus: Disposal of Disc. Ops. 0.01 0.01

Less: EnerBank Disc. Ops. (0.07) (0.19)

Reported (GAAP) and Adj. Continuing Ops. EPS (non-GAAP) $0.55 $1.64

"CMS Energy is in a solid position to deliver on our commitments to our customers, co-workers, communities, the planet and our investors with a focus on being a world class energy company," said Garrick Rochow, President and CEO of CMS Energy and Consumers Energy. "With our recent Integrated Resource Plan filing and pending sale of EnerBank, we are well positioned to fund and implement key initiatives related to our clean energy transformation while also expecting to be toward the high end of our 2021 guidance range."

CMS Energy reaffirmed its full-year 2021 adjusted earnings from continuing operations guidance of $2.61 - $2.65 per share* (*See below for important information about non-GAAP measures). CMS Energy also reaffirmed 2022 adjusted earnings guidance of $2.85 - $2.87 per share and long-term adjusted EPS growth of 6 to 8 percent.

CMS Energy (NYSE: CMS) is a Michigan-based energy company featuring Consumers Energy as its primary business. It also owns and operates independent power generation businesses.

CMS Energy will hold a webcast to discuss its 2021 second quarter results and provide a business and financial outlook on July 29 at 9:30 a.m. (EDT). To participate in the webcast, go to CMS Energy's homepage (cmsenergy.com) and select "Events and Presentations."

Important information for investors about non-GAAP measures and other disclosures.

*This news release contains non-Generally Accepted Accounting Principles (non-GAAP) measures, such as adjusted earnings. All references to net income refer to net income available to common stockholders and references to earnings per share are on a diluted basis. Adjustments could include items such as discontinued operations, asset sales, impairments, restructuring costs, changes in accounting principles, changes in federal tax policy, regulatory items from prior years, unrealized gains or losses, recognized in net income, from mark-to-market adjustments related to CMS Enterprises' interest expense, or other items. Management views adjusted earnings as a key measure of the company's present operating financial performance and uses adjusted earnings for external communications with analysts and investors. Internally, the company uses adjusted earnings to measure and assess performance. Because the company is not able to estimate the impact of specific line items, which have the potential to significantly impact, favorably or unfavorably, the company's reported earnings in future periods, the company is not providing reported earnings guidance nor is it providing a reconciliation for the comparable future period earnings. The company's adjusted earnings should be considered supplemental information to assist in understanding our business results, rather than as a substitute for the reported earnings.

This news release contains "forward-looking statements." The forward-looking statements are subject to risks and uncertainties that could cause CMS Energy's and Consumers Energy's results to differ materially. All forward-looking statements should be considered in the context of the risk and other factors detailed from time to time in CMS Energy's and Consumers Energy's Securities and Exchange Commission filings.

Investors and others should note that CMS Energy routinely posts important information on its website and considers the Investor Relations section, www.cmsenergy.com/investor-relations, a channel of distribution.

For more information on CMS Energy, please visit our website atcmsenergy.com. To sign up for emailalert notifications, please visit the Investor Relations section of our website.

CMS ENERGY CORPORATIONConsolidated Statements of Income(Unaudited)

In Millions, Except Per Share Amounts

Three Months Six Months Ended Ended

6/30/21 6/30/20 6/30/21 6/30/20

Operating revenue $ 1,558 $ 1,382 $ 3,571 $ 3,184

Operating expenses 1,306 1,134 2,889 2,601

Operating Income 252 248 682 583

Other income 48 32 92 71

Interest charges 125 127 249 248

Income Before Income Taxes 175 153 525 406

Income tax expense 22 24 64 48

Income From Continuing Operations 153 129 461 358

Income from discontinued operations, net of tax 18 8 52 22

Net Income 171 137 513 380

Income (loss) attributable to noncontrolling interests (5) 1 (12) 1

Net Income Available to Common Stockholders $ 176 $ 136 $ 525 $ 379

Basic Earnings Per Average Common Share

Income from continuing operations per average common share available to common stockholders $ 0.55 $ 0.45 $ 1.64 $ 1.25

Income from discontinued operations per average common share available to common stockholders 0.06 0.03 0.18 0.08

Basic earnings per average common share $ 0.61 $ 0.48 $ 1.82 $ 1.33

Diluted Earnings Per Average Common Share

Income from continuing operations per average common share available to common stockholders $ 0.55 $ 0.45 $ 1.64 $ 1.25

Income from discontinued operations per average common share available to common stockholders 0.06 0.03 0.18 0.08

Diluted earnings per average common share $ 0.61 $ 0.48 $ 1.82 $ 1.33

CMS ENERGY CORPORATIONSummarized Consolidated Balance Sheets(Unaudited)

In Millions

As of

6/30/21 12/31/20

Assets

Current assets

Cash and cash equivalents $ 153 $ 32

Restricted cash and cash equivalents 18 17

Assets held for sale 448 429

Other current assets 1,703 1,926

Total current assets 2,322 2,404

Non-current assets

Plant, property, and equipment 21,533 21,017

Assets held for sale 2,584 2,680

Other non-current assets 3,514 3,565

Total Assets $ 29,953 $ 29,666

Liabilities and Equity

Current liabilities ^(1)

Liabilities held for sale $ 990 $ 953

Other current liabilities 1,535 1,530

Total current liabilities 2,525 2,483

Non-current liabilities ^(1)

Liabilities held for sale 1,717 1,894

Other non-current liabilities 6,978 6,821

Total non-current liabilities 8,695 8,715

Capitalization

Debt, finance leases, and other financing (excluding securitization debt) ^(2) 12,077 12,083

Non-recourse debt 79 83

Total debt, finance leases, and other financing (excluding securitization debt) 12,156 12,166

Noncontrolling interests 569 581

Common stockholders' equity 5,797 5,496

Total capitalization (excluding securitization debt) 18,522 18,243

Securitization debt ^(2) 211 225

Total Liabilities and Equity $ 29,953 $ 29,666

^(1) Excludes debt, finance leases, and other financing.

^(2) Includes current and non-current portions.

CMS ENERGY CORPORATION

Summarized Consolidated Statements of Cash Flows

(Unaudited)

In Millions

Six Months Ended

6/30/21 6/30/20

Beginning of Period Cash and Cash Equivalents, Including Restricted Amounts $ 185 $ 157

Net cash provided by operating activities ^(3) 1,367 796

Net cash used in investing activities (851) (1,168)

Cash flows from operating and investing activities 516 (372)

Net cash provided by (used in) financing activities (409) 1,819

Total Cash Flows $ 107 $ 1,447

End of Period Cash and Cash Equivalents, Including Restricted Amounts ^(4) $ 292 $ 1,604

^(3) Includes the impact of a $531 million pension contribution in 2020.

^(4) In June 2021, CMS Energy entered into an agreement for EnerBank to merge with Regions Bank. As a result, EnerBank's cash and cash equivalents are presented as assets held for sale on CMS Energy's consolidated balance sheets at June 30, 2021 and June 30, 2020.

CMS ENERGY CORPORATIONReconciliation of GAAP to Non-GAAP Adjusted Net Income(Unaudited)

In Millions, Except Per Share Amounts

Three Months Ended Six Months Ended

6/30/21 6/30/20 6/30/21 6/30/20

Net Income Available to $ 176 $ 136 $ 525 $ 379Common Stockholders

Reconciling items:

Disposal of discontinued operations (gain) 5 - 5 -loss

Tax impact (1) - (1) -

Other exclusions from * 4 (1) 7adjusted earnings**

Tax impact (*) (1) * (1)

Tax reform - - - (9)

Voluntary separation - (*) - 11program

Tax impact - * - (3)

Adjusted net income - $ 180 $ 139 $ 528 $ 384non-GAAP

Additional reconcilingitems:

Adjusted discontinuedoperations income - (30) (11) (73) (28)non-GAAP

Tax impact 8 3 17 6

Adjusted continuingoperations net income - $ 158 $ 131 $ 472 $ 362non-GAAP

Average Common SharesOutstanding

Basic 289.0 285.5 288.8 284.4

Diluted 289.4 286.5 289.3 285.8

Basic Earnings Per AverageCommon Share

Reported net income per $ 0.61 $ 0.48 $ 1.82 $ 1.33share

Reconciling items:

Disposal of discontinued operations (gain) 0.02 - 0.02 -loss

Tax impact (0.01) - (0.01) -

Other exclusions from * 0.02 (*) 0.03adjusted earnings**

Tax impact (*) (0.01) * (0.01)

Tax reform - - - (0.03)

Voluntary separation - (*) - 0.04program

Tax impact - * - (0.01)

Adjusted net income per $ 0.62 $ 0.49 $ 1.83 $ 1.35share - non-GAAP

Additional reconcilingitems:

Adjusted discontinuedoperations income - (0.10) (0.04) (0.25) (0.10)non-GAAP

Tax impact 0.03 0.01 0.06 0.02

Adjusted continuingoperations net income per $ 0.55 $ 0.46 $ 1.64 $ 1.27share - non-GAAP

Diluted Earnings PerAverage Common Share

Reported net income per $ 0.61 $ 0.48 $ 1.82 $ 1.33share

Reconciling items:

Disposal of discontinued operations (gain) 0.02 - 0.02 -loss

Tax impact (0.01) - (0.01) -

Other exclusions from * 0.02 (*) 0.03adjusted earnings**

Tax impact (*) (0.01) * (0.01)

Tax reform - - - (0.03)

Voluntary separation - (*) - 0.04program

Tax impact - * - (0.01)

Adjusted net income per $ 0.62 $ 0.49 $ 1.83 $ 1.35share - non-GAAP

Additional reconcilingitems:

Adjusted discontinuedoperations income - (0.10) (0.04) (0.25) (0.10)non-GAAP

Tax impact 0.03 0.01 0.06 0.02

Adjusted continuingoperations net income per $ 0.55 $ 0.46 $ 1.64 $ 1.27share - non-GAAP

* Less than $0.5 million or $0.01 per share.

** Includes restructuring costs and unrealized gains or losses, recognized innet income, from mark-to-market adjustments related to CMS Enterprises'interest expense.

Management views adjusted (non-Generally Accepted Accounting Principles)earnings as a key measure of the Company's present operating financialperformance and uses adjusted earnings for external communications withanalysts and investors. Internally, the Company uses adjusted earnings tomeasure and assess performance. Adjustments could include items such asdiscontinued operations, asset sales, impairments, restructuring costs,changes in accounting principles, changes in federal tax policy, regulatoryitems from prior years, unrealized gains or losses, recognized in net income,from mark-to-market adjustments related to CMS Enterprises' interest expense,or other items. The adjusted earnings should be considered supplementalinformation to assist in understanding our business results, rather than as asubstitute for reported earnings.

CMS ENERGY CORPORATIONReconciliation of GAAP to Non-GAAP Adjusted Net Income from Continuing andDiscontinued Operations(Unaudited)

In Millions, Except Per Share Amounts

Three Months Ended Six Months Ended

6/30/21 6/30/20 6/30/21 6/30/20

Net Income Available to CommonStockholders

Reported net income fromcontinuing operations available $ 158 $ 128 $ 473 $ 357to common stockholders

Reconciling items:

Other exclusions from adjusted * 4 (1) 7earnings**

Tax impact (*) (1) * (1)

Tax reform - - - (9)

Voluntary separation program - (*) - 11

Tax impact - * - (3)

Adjusted net income from $ 158 $ 131 $ 472 $ 362continuing operations - non-GAAP

Reported net income fromdiscontinued operations available $ 18 $ 8 $ 52 $ 22to common stockholders

Reconciling items:

Disposal of discontinued 5 - 5 -operations (gain) loss

Tax impact (1) - (1) -

Adjusted net income fromdiscontinued operations - $ 22 $ 8 $ 56 $ 22non-GAAP

Average Common Shares Outstanding

Basic 289.0 285.5 288.8 284.4

Diluted 289.4 286.5 289.3 285.8

Basic Earnings Per Average CommonShare

Reported net income fromcontinuing operations per averagecommon share available to common $ 0.55 $ 0.45 $ 1.64 $ 1.25stockholders

Reconciling items:

Other exclusions from adjusted * 0.02 (*) 0.03earnings**

Tax impact (*) (0.01) * (0.01)

Tax reform - - - (0.03)

Voluntary separation program - (*) - 0.04

Tax impact - * - (0.01)

Adjusted net income fromcontinuing operations per average $ 0.55 $ 0.46 $ 1.64 $ 1.27common share - non-GAAP

Reported net income fromdiscontinued operations peraverage common share available to commonstockholders $ 0.06 $ 0.03 $ 0.18 $ 0.08

Reconciling items:

Disposal of discontinued operations (gain) 0.02 - 0.02 -loss

Tax impact (0.01) - (0.01) -

Adjusted net income fromdiscontinued operations per $ 0.07 $ 0.03 $ 0.19 $ 0.08average common share - non-GAAP

Diluted Earnings Per AverageCommon Share

Reported net income fromcontinuing operations per averagecommon share available to commonstockholders $ 0.55 $ 0.45 $ 1.64 $ 1.25

Reconciling items:

Other exclusions from adjusted * 0.02 (*) 0.03earnings**

Tax impact (*) (0.01) * (0.01)

Tax reform - - - (0.03)

Voluntary separation program - (*) - 0.04

Tax impact - * - (0.01)

Adjusted net income fromcontinuing operations per average $ 0.55 $ 0.46 $ 1.64 $ 1.27common share - non-GAAP

Reported net income fromdiscontinued operations peraverage common share available to commonstockholders $ 0.06 $ 0.03 $ 0.18 $ 0.08

Reconciling items:

Disposal of discontinued operations (gain) 0.02 - 0.02 -loss

Tax impact (0.01) - (0.01) -

Adjusted net income fromdiscontinued operations per $ 0.07 $ 0.03 $ 0.19 $ 0.08average common share - non-GAAP

* Less than $0.5 million or $0.01 per share.

** Includes restructuring costs and unrealized gains or losses, recognized innet income, from mark-to-market adjustments related to CMS Enterprises'interest expense.

Management views adjusted (non-Generally Accepted Accounting Principles)earnings as a key measure of the Company's present operating financialperformance and uses adjusted earnings for external communications withanalysts and investors. Internally, the Company uses adjusted earnings tomeasure and assess performance. Adjustments could include items such asdiscontinued operations, asset sales, impairments, restructuring costs, changesin accounting principles, changes in federal tax policy, regulatory items fromprior years, unrealized gains or losses, recognized in net income, frommark-to-market adjustments related to CMS Enterprises' interest expense, orother items. The adjusted earnings should be considered supplementalinformation to assist in understanding our business results, rather than as asubstitute for reported earnings.

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SOURCE CMS Energy