CMS Energy Announces Strong Second Quarter Performance with Confidence Toward the High End of 2021 EPS Guidance

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.

(0.19)

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

$0.55

$1.64

CMS ENERGY CORPORATION
Summarized 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

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 CORPORATION
Reconciliation 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 Common Stockholders

$

176

$

136

$

525

$

379

Reconciling items:

Disposal of discontinued operations (gain) loss

5

-

5

-

Tax impact

(1)

-

(1)

-

Other exclusions from adjusted earnings**

* 

4

(1)

7

Tax impact

(*)

(1)

 * 

(1)

Tax reform

-

-

-

(9)

Voluntary separation program

-

(*)

-

11

Tax impact

-

* 

-

(3)

Adjusted net income – non-GAAP

$

180

$

139

$

528

$

384

Additional reconciling items:

Adjusted discontinued operations income - non-GAAP

(30)

(11)

(73)

(28)

Tax impact

8

3

17

6

Adjusted continuing operations net income – non-GAAP

$

158

$

131

$

472

$

362

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 Common Share

Reported net income per share

$

0.61

$

0.48

$

1.82

$

1.33

Reconciling items:

Disposal of discontinued operations (gain) loss

0.02

-

0.02

-

Tax impact

(0.01)

-

(0.01)

-

Other exclusions from adjusted earnings**

* 

0.02

(*)

0.03

Tax impact

(*)

(0.01)

 * 

(0.01)

Tax reform

-

-

-

(0.03)

Voluntary separation program

-

(*)

-

0.04

Tax impact

-

 * 

-

(0.01)

Adjusted net income per share – non-GAAP

$

0.62

$

0.49

$

1.83

$

1.35

Additional reconciling items:

Adjusted discontinued operations income - non-GAAP

(0.10)

(0.04)

(0.25)

(0.10)

Tax impact

0.03

0.01

0.06

0.02

Adjusted continuing operations net income per share – non-GAAP

$

0.55

$

0.46

$

1.64

$

1.27

Diluted Earnings Per Average Common Share

Reported net income per share

$

0.61

$

0.48

$

1.82

$

1.33

Reconciling items:

Disposal of discontinued operations (gain) loss

0.02

-

0.02

-

Tax impact

(0.01)

-

(0.01)

-

Other exclusions from adjusted earnings**

* 

0.02

(*)

0.03

Tax impact

(*)

(0.01)

* 

(0.01)

Tax reform

-

-

-

(0.03)

Voluntary separation program

-

(*)

-

0.04

Tax impact

-

 * 

-

(0.01)

Adjusted net income per share – non-GAAP

$

0.62

$

0.49

$

1.83

$

1.35

Additional reconciling items:

Adjusted discontinued operations income - non-GAAP

(0.10)

(0.04)

(0.25)

(0.10)

Tax impact

0.03

0.01

0.06

0.02

Adjusted continuing operations net income per share – non-GAAP

$

0.55

$

0.46

$

1.64

$

1.27

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

** Includes restructuring costs and unrealized gains or losses, recognized in net 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 financial performance and uses adjusted earnings for external communications with analysts and investors.  Internally, the Company uses adjusted earnings to measure and assess performance.  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.  The adjusted earnings should be considered supplemental information to assist in understanding our business results, rather than as a substitute for reported earnings.  

CMS ENERGY CORPORATION
Reconciliation of GAAP to Non-GAAP Adjusted Net Income from Continuing and Discontinued 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 Common Stockholders

Reported net income from continuing operations available to common stockholders

$

158

$

128

$

473

$

357

Reconciling items:

Other exclusions from adjusted earnings**

* 

4

(1)

7

Tax impact

(*)

(1)

 * 

(1)

Tax reform

-

-

-

(9)

Voluntary separation program

-

(*)

-

11

Tax impact

-

* 

-

(3)

Adjusted net income from continuing operations – non-GAAP

$

158

$

131

$

472

$

362

Reported net income from discontinued operations available to common stockholders

$

18

$

8

$

52

$

22

Reconciling items:

Disposal of discontinued operations (gain) loss

5

-

5

-

Tax impact

(1)

-

(1)

-

Adjusted net income from discontinued operations – non-GAAP

$

22

$

8

$

56

$

22

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 Common Share

Reported net income from continuing operations per average common share available to common stockholders

$

0.55

$

0.45

$

1.64

$

1.25

Reconciling items:

Other exclusions from adjusted earnings**

* 

0.02

(*)

0.03

Tax impact

(*)

(0.01)

 * 

(0.01)

Tax reform

-

-

-

(0.03)

Voluntary separation program

-

(*)

-

0.04

Tax impact

-

 * 

-

(0.01)

Adjusted net income from continuing operations per average common share – non-GAAP

$

0.55

$

0.46

$

1.64

$

1.27

Reported net income from discontinued operations per average common share
    available to common stockholders

$

0.06

$

0.03

$

0.18

$

0.08

Reconciling items:

Disposal of discontinued operations (gain) loss

0.02

-

0.02

-

Tax impact

(0.01)

-

(0.01)

-

Adjusted net income from discontinued operations per average common share – non-GAAP

$

0.07

$

0.03

$

0.19

$

0.08

Diluted Earnings Per Average Common Share

Reported net income from continuing operations per average common share
    available to common stockholders

$

0.55

$

0.45

$

1.64

$

1.25

Reconciling items:

Other exclusions from adjusted earnings**

* 

0.02

(*)

0.03

Tax impact

(*)

(0.01)

 * 

(0.01)

Tax reform

-

-

-

(0.03)

Voluntary separation program

-

(*)

-

0.04

Tax impact

-

 * 

-

(0.01)

Adjusted net income from continuing operations per average common share – non-GAAP

$

0.55

$

0.46

$

1.64

$

1.27

Reported net income from discontinued operations per average common share
    available to common stockholders

$

0.06

$

0.03

$

0.18

$

0.08

Reconciling items:

Disposal of discontinued operations (gain) loss

0.02

-

0.02

-

Tax impact

(0.01)

-

(0.01)

-

Adjusted net income from discontinued operations per average common share – non-GAAP

$

0.07

$

0.03

$

0.19

$

0.08

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

** Includes restructuring costs and unrealized gains or losses, recognized in net 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 financial performance and uses adjusted earnings for external communications with analysts and investors.  Internally, the Company uses adjusted earnings to measure and assess performance.  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.  The adjusted earnings should be considered supplemental information to assist in understanding our business results, rather than as a substitute for reported earnings.