CMS ENERGY CORPORATION Table of Contents
CMS EN ERGY & C ONSU MERS ENERGY
ANNUAL
REPORT
2023
Table of Contents
Table of Contents
Shareowners:
Thank you for your investment in CMS Energy.
Our commitment to our customers, communities, co-workers and investors is rooted in our purpose - World Class Performance Delivering Hometown Service. We have a great story and our strategy continues to deliver industry-leading performance.
2023 was remarkable. As we have for 137 years, the CMS Energy team rose to every occasion, caring for all stakeholders and ensuring the company's short and long-term success.
Our commitment to running a world class energy company continues, and we delivered strong performance in both operational and financial measures and remain focused on company-wide efforts for reliability and competitive rates. I'm proud of the work on our recently filed Reliability Roadmap, which is our plan for important customer investments required to deliver the electric service our customers expect and deserve.
We continue to be leaders in the Clean Energy Transformation and have made progress in our shift from coal to clean with the retirement of legacy fossil plants and the acquisition of a natural gas plant, wind and solar plants, bolstering supply adequacy. The recent passage of Michigan's clean legislation supports and accelerates our plans and ensures a robust and clean portfolio for our customers.
Financially, I'm happy to report we delivered our 21st year of industry-leading performance, at the high end of our adjusted earnings per share (EPS) guidance range and successfully counter-measured nearly $300 million of weather-driven financial headwinds.
Outlined below are highlights of 2023 accomplishments delivered by the CMS Energy team, exemplifying our impact on the triple bottom line - People, Planet and Profit.
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Taablble of Coonteentnts
PEOPLE
- Department of Defense Freedom Award - the highest honor for supporting co- workers in the Guard and Reserves
- Top US Utility - Corporate Religious Equity, Diversity & Inclusion (REDI) index
- Top Utility for Economic Development awarded from Site Selection Magazine
- Filed our five-year $7 billion electric Reliability Roadmap - a pathway to improved electric system reliability for our customers
- Secured more than $125 million of customer assistance in partnership with state and federal agencies to help keep customer bills affordable
- Attracted ~360 megawatts (MW) of new or expanding load, creating ~5,000 jobs and bringing ~$6 billion of investment to Michigan
- Saved customers ~$161 million in supply costs through efficient plant performance
PLANET
- Ensured solid energy policy for Michigan that reflects current clean energy goals, more renewable energy, flexibility and financial upside
- Successfully retired Karn 1&2 - reducing coal & carbon emissions
- Executed 185 MW of contracts (with customers) for renewables - 365 MW to date
- Recognized with the Pacesetter Award for 95% of residential electric vehicles charging off-peak
- Tier 1 ESG Scores - all four Tier 1 ratings agencies are listed in the top quartile
- Included in MSCI ESG Leaders Index - the only vertically integrated utility
- Eliminated >530 metric tons of methane through pipe replacement and operational procedures
PROFIT
- Delivered adjusted EPS of $3.11 - toward the high end of the EPS guidance range
- Increased annual dividend to $2.06 - 18th increase in as many years
- Recognized as TRENDSETTER company by CPA-Zicklin Index for corporate political disclosure and accountability
- Achieved $79 million in operations and maintenance savings and $172 million in capital cost savings through the CE Way
I am extremely proud of the CMS Energy Team for yet another outstanding year of operational and financial performance and I would like to thank you for your continued support. I look forward to another year of strong performance in 2024.
Sincerely,
Garrick Rochow
President and CEO
This letter includes non-GAAP measures. Reconciliations to the most directly comparable GAAP measures are found immediately following this letter and on our website at cmsenergy.com.
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CMS ENERGY CORPORATION
Reconciliation of GAAP Net Income to Non-GAAP Adjusted Net Income
(Unaudited) | |||
In Millions, Except Per Share Amounts | |||
Twelve Months Ended December 31, 2023 | |||
Net Income Available to Common Stockholders | $ | 877 | |
Reconciling items: | |||
Disposal of discontinued operations (gain) loss | (1) | ||
Tax impact | * | ||
Other exclusions from adjusted earnings** | 9 | ||
Tax impact | (3) | ||
Voluntary separation program | 33 | ||
Tax impact | (8) | ||
Adjusted net income - non-GAAP | $ | 907 | |
Average Common Shares Outstanding - Diluted | |||
291.7 | |||
Diluted Earnings Per Average Common Share | |||
Reported net income per share | $ | 3.01 | |
Reconciling items: | |||
Disposal of discontinued operations (gain) loss | (*) | ||
Tax impact | * | ||
Other exclusions from adjusted earnings** | 0.03 | ||
Tax impact | (0.01) | ||
Voluntary separation program | 0.11 | ||
Tax impact | (0.03) | ||
Adjusted net income per share - non-GAAP | $ | 3.11 | |
- Less than $0.5 million or $0.01 per share.
- Includes restructuring costs, business optimization initiative, and unrealized gains or losses from mark-to-market adjustments, recognized in net income related to NorthStar Clean Energy's 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, business optimization initiative, changes in accounting principles, voluntary separation program, changes in federal tax policy, regulatory items from prior years, unrealized gains or losses from mark-to-market adjustments, recognized in net income related to NorthStar Clean Energy's 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.
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2023
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____to_____
Commission File Number | Registrant; State of Incorporation; Address; and Telephone Number | IRS Employer Identification No. | |||||
1-9513 | CMS ENERGY CORPORATION | 38-2726431 | |||||
(A Michigan Corporation) | |||||||
One Energy Plaza, Jackson, Michigan 49201 | |||||||
(517) 788-0550 | |||||||
1-5611 | CONSUMERS ENERGY COMPANY | 38-0442310 | |||||
(A Michigan Corporation) | |||||||
One Energy Plaza, Jackson, Michigan 49201 | |||||||
(517) 788-0550 | |||||||
Securities registered pursuant to Section 12(b) of the Act: | |||||||
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | |||||
CMS Energy Corporation Common Stock, $0.01 par value | CMS | New York Stock Exchange | |||||
CMS Energy Corporation 5.625% Junior Subordinated Notes due 2078 | CMSA | New York Stock Exchange | |||||
CMS Energy Corporation 5.875% Junior Subordinated Notes due 2078 | CMSC | New York Stock Exchange | |||||
CMS Energy Corporation 5.875% Junior Subordinated Notes due 2079 | CMSD | New York Stock Exchange | |||||
CMS Energy Corporation Depositary Shares, each representing a 1/1,000th interest in a share | |||||||
of 4.200% Cumulative Redeemable Perpetual Preferred Stock, Series C | CMS PRC | New York Stock Exchange | |||||
Consumers Energy Company Cumulative Preferred Stock, $100 par value: $4.50 Series | CMS-PB | New York Stock Exchange | |||||
Securities registered pursuant to Section 12(g) of the Act: | None |
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
CMS Energy Corporation: | Yes ☒ No ☐ | Consumers Energy Company: Yes ☒ No ☐ |
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
CMS Energy Corporation: | Yes ☐ No ☒ | Consumers Energy Company: Yes ☐ No ☒ |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
CMS Energy Corporation: | Yes ☒ No ☐ | Consumers Energy Company: Yes ☒ No ☐ |
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
CMS Energy Corporation: | Yes ☒ No ☐ | Consumers Energy Company: Yes ☒ No ☐ |
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
CMS Energy Corporation: | Consumers Energy Company: | ||
Large accelerated filer | ☒ | Large accelerated filer | ☐ |
Non-accelerated filer | ☐ | Non-accelerated filer | ☒ |
Accelerated filer | ☐ | Accelerated filer | ☐ |
Smaller reporting company | ☐ | Smaller reporting company | ☐ |
Emerging growth company | ☐ | Emerging growth company | ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
CMS Energy Corporation: | ☐ | Consumers Energy Company: | ☐ |
Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
CMS Energy Corporation: | ☒ | Consumers Energy Company: | ☒ |
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.
CMS Energy Corporation: | ☐ | Consumers Energy Company: | ☐ |
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b).
CMS Energy Corporation: | ☐ | Consumers Energy Company: | ☐ |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
CMS Energy Corporation: | Yes ☐ No ☒ | Consumers Energy Company: Yes ☐ No ☒ |
The aggregate market value of CMS Energy voting and non-voting common equity held by non-affiliates was $17.063 billion for the 290,440,980 CMS Energy Corporation Common Stock shares outstanding on June 30, 2023 based on the closing sale price of $58.75 for CMS Energy Corporation Common Stock, as reported by the New York Stock Exchange on such date. There were no shares of Consumers common equity held by non-affiliates as of June 30, 2023.
There were 294,443,620 shares of CMS Energy Corporation Common Stock outstanding on January 12, 2024. On January 12, 2024, CMS Energy held all 84,108,789 outstanding shares of common stock of Consumers.
Documents incorporated by reference in Part III: CMS Energy's and Consumers' proxy statement relating to their 2024 Annual Meetings of Shareholders to be held May 3, 2024.
CMS Energy Corporation
Consumers Energy Company
Annual Reports on Form 10-K to the Securities and Exchange Commission for the Year Ended December 31, 2023
Table of Contents
Filing Format | 13 | |
Forward-lookingStatements and Information | 13 | |
Part I | 17 | |
Item 1. | Business | 17 |
Item 1A. | Risk Factors | 40 |
Item 1B. | Unresolved Staff Comments | 50 |
Item 1C. | Cybersecurity | 50 |
Item 2. | Properties | 52 |
Item 3. | Legal Proceedings | 52 |
Item 4. | Mine Safety Disclosures | 52 |
Part II | 52 | |
Item 5. | Market For Registrant's Common Equity, Related Stockholder Matters and Issuer | |
Purchases of Equity Securities | 52 | |
Item 6. | Reserved | 54 |
Item 7. | Management's Discussion and Analysis of Financial Condition and Results of | |
Operations | 54 | |
Item 7A. | Quantitative and Qualitative Disclosures About Market Risk | 89 |
Item 8. | Financial Statements and Supplementary Data | 91 |
Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial | |
Disclosure | 187 | |
Item 9A. | Controls and Procedures | 187 |
Item 9B. | Other Information | 189 |
Item 9C. | Disclosure Regarding Foreign Jurisdictions that Prevent Inspections | 189 |
Part III | 189 | |
Item 10. | Directors, Executive Officers and Corporate Governance | 189 |
Item 11. | Executive Compensation | 190 |
Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related | |
Stockholder Matters | 191 | |
Item 13. | Certain Relationships and Related Transactions, and Director Independence | 191 |
Item 14. | Principal Accountant Fees and Services | 191 |
Part IV | 193 | |
Item 15. | Exhibits and Financial Statement Schedules | 193 |
Item 16. | Form 10-KSummary | 206 |
Signatures | 207 |
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Glossary
Certain terms used in the text and financial statements are defined below.
2022 Form 10-K
Each of CMS Energy's and Consumers' Annual Report on Form 10-K for the year ended December 31, 2022
2023 Energy Law
Michigan's Public Acts 229, 230, 231, 233, 234, and 235 of 2023
3G
Third generation technology
4G
Fourth generation technology
ABATE
Association of Businesses Advocating Tariff Equity
ABO
Accumulated benefit obligation; the liabilities of a pension plan based on service and pay to date, which differs from the PBO in that it does not reflect expected future salary increases
AFUDC
Allowance for borrowed and equity funds used during construction
AOCI
Accumulated other comprehensive income (loss)
ARO
Asset retirement obligation
ASC 715
Financial Accounting Standards Board Accounting Standards Codification Topic 715, Retirement Benefits
Audit Committee
The Audit Committee of the Board, which is composed entirely of independent directors.
Aviator Wind
Aviator Wind Holdings, LLC, a VIE in which Aviator Wind Equity Holdings holds a Class B membership interest
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CMS Energy Corporation published this content on 14 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 21 March 2024 19:31:01 UTC.
