With a combined revenue of $21 trillion and $2.1 trillion in profits, the 2026 Fortune 500 is the definitive list of America's largest companies.

Fortune 500

Almost $20 trillion in revenue—and a record-breaking $1.87 trillion in profits. Introducing the 2025 Fortune 500, the definitive list of the biggest companies in America.

The Fortune 500, in its 70th year in 2024, ranks the biggest U.S. companies by revenue.

The Fortune 500, in its 69th year in 2023, ranks the biggest U.S. companies by revenue.

This year’s Fortune 500 marks the 68th running of the list.

This year’s Fortune 500 marks the 67th running of the list.

Based out of Jackson, Mich., the electric power provider supplies electric energy and natural gas to around 60% of Michigan's residences.

This year's Fortune 500 marks the 66th running of the list.

F500-2020-443-CMS-Energy

Michigan-based CMS Energy owns electric and natural gas utility Consumers Energy, as well as independent power generation businesses.

This year's Fortune 500 marks the 65th running of the list.

This year's Fortune 500 marks the 64th running of the list.

This year's Fortune 500 marks the 63rd running of the list.

This year's Fortune 500 marks the 62nd running of the list.

This year's Fortune 500 marks the 61st running of the list. Wal-Mart claims the top spot again. See who made the list.

Wal-Mart stayed on top as its sales crept closer to half-a-trillion dollars. Apple moved into the top five. And UnitedHealth Group continued its steady climb. 

Fortune Global 500

Key Financials (last Fiscal Year)

Revenues ($M)

Profits ($M)

Assets ($M)

Total Stockholder Equity ($M)

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Profit as % of Revenues

Profits as % of Assets

Profits as % of Stockholder Equity

Earnings Per Share (last Fiscal Year)

Earnings Per Share ($)

EPS % Change (from prior fiscal year)

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EPS % Change (10 year annual rate)

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Total Return to Investors (last year)

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CMS Energy is the parent to Consumers Energy, Michigan’s largest electric and natural gas utility that serves 6.8 million of the state’s 10 million residents. The company’s other arm, North Star Clean Energy, produces electricity, including solar power, in Michigan, Ohio, and Arkansas; owns natural gas and cogeneration plants in Michigan; and manages biomass operations in Michigan and North Carolina. It also partners with other companies on clean energy projects, such as a solar installation in Arkansas with General Motors. The CMS Energy holding company was created in 1987, but its history dates back to 1886, when the utility’s forerunner opened for business.

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CMS Energy (CMS): Company Profile, Stock Price, News, Rankings

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CMS Energy

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Good morning, everyone, and welcome to the CMS Energy twenty twenty four year end results. The earnings news release issued earlier today and the presentation used in this webcast are available on CMS Energy website in the Investor Relations section. This call is being recorded. After the presentation, we will conduct a question and answer session. Instructions will be provided at that time.

Just a reminder, there will be a rebroadcast of this conference call today beginning at twelve p. M. Eastern Time running through February 13. This presentation is also being webcast and is available on CMS Energy's website in the Investor Relations section. At this time, I would like to turn the call over to Mr.

Jason Shaw, Treasurer and Vice President of Investor Relations.

Thank you, Harry. Good morning, everyone, and thank you for joining us today. With me are Derek Rochow, President and Chief Executive Officer and Reggie Hayes, Executive Vice President and Chief Financial Officer. This presentation contains forward looking statements, which are subject to risks and uncertainties. Please refer to our SEC filings for more information regarding the risks and other factors that could cause our actual results to differ materially.

This presentation also includes non GAAP measures. Reconciliations of these measures to the most directly comparable GAAP measures are included in the appendix and posted on our website. And now, I'll turn the call over to Garrett.

Thank you, Jason, and thank you everyone for joining us today. In the words of James Brown,

CMS Energy, twenty two years of consistent industry leading financial performance every year for over two decades. You can count on us to deliver. We do that through our simple but powerful investment thesis coupled with disciplined execution across our electric and gas businesses. We take our legacy of service and excellence seriously at CMS Energy. We play to win every day.

We have a lot to celebrate about 2024. And today, I will highlight a few key successes among many to demonstrate how we deliver for all of our stakeholders year in and year out. First, our work to improve customer reliability. Our five year reliability roadmap, which we filed in 2023, set bold commitments to improve service to our customers to never have more than 100,000 customers disrupted per event and have service restored within twenty four hours. And we are making progress.

In 2024, we restored power to over 93% of customers within twenty four hours compared with 87% in 2023. And the average customer experienced 21 fewer power outage minutes. And although there is still more work to do, it is clear the investments are making a meaningful difference. I'm also pleased with the work on the electric supply side. In November, we filed our twenty year renewable energy plan.

This critical long term filing highlights the thoughtful changes we will make to our generation portfolio as we transform our system for more renewables in a diversified mix that includes nine gigawatts of solar and four gigawatts of wind over the next two decades. This filing details to the commission our commitment to leading the clean energy transformation and achieving the targets established in Michigan's twenty twenty three Energy Law. Most importantly, it demonstrates our commitment to diversify the energy portfolio and invest in supply infrastructure to serve our customers with reliable and clean energy in the most affordable manner. And of course, our gas business continues to grow. I'm extremely proud of our coworkers' efforts to build and replace infrastructure that ensures a safe, reliable and clean natural gas system.

The system has proven invaluable to customers throughout the year and even more recently in the extreme cold experienced in January. I could give many more examples and some are listed on this slide, which speak to the winning program at CMS Energy and are further proof points of our investment thesis in action, ensuring you can count on us to deliver value for all stakeholders every year. On slide five, we've highlighted our five year twenty billion dollars utility customer investment plan, up $3,000,000,000 from our prior plan, a significant and needed increase designed to deliver better customer service through improved reliability, both in distribution and supply. Driven largely by our reliability roadmap, as we bolster our electric distribution system and by investments in our supply portfolio as we expand our renewable pipeline to meet the energy law. This plan supports 8.5% rate base growth through 2029.

In addition to the robust customer investment plan, we have growth drivers outside traditional rate base. These are important and sometimes overlooked. So let me spend a moment here. The financial compensation mechanism, which allows us to earn on PPAs, grows during the five year period, offering approximately $20,000,000 of incentives by the end of the decade and continues to grow thereafter as we secure additional PPAs. There's more than $60,000,000 per year of incentives through our energy efficiency programs, enhanced by the energy law.

We also expect incremental earnings from our non utility business, Northstar Clean Energy, as we continue to see attractive pricing from capacity and energy sold at Dearborn Industrial Generation or DIG. I want to take a moment to highlight the long runway of customer investments, which are incremental to our five year plan and give us confidence in our financial performance and continued growth of our company. Slide six shows the detailed filings we expect over the next ten years and beyond, which will be incorporated into future five year updates. On the slide, you can see key investments in the electric distribution system to improve reliability for our customers through rebuilds, undergrounding, hardening and technology. Dollars 10,000,000,000 of opportunity not in the five year plan.

In the middle of the slide, the Renewable Energy Plan, an ambitious and thoughtful plan to achieve 60% renewables by 02/1935 as required by the Energy Law and in response to significant low growth in our service area, providing for additional wind and solar resources, dollars 10,000,000,000 of opportunity not in the five year plan. And finally, the 2026 Integrated Resource Plan filing, which will shore up the intermittency of renewables, build out battery storage and deploy clean energy required under the Energy Law. The modeling for this filing is underway and will provide additional customer investment opportunities. Altogether, well over $20,000,000,000 that is not in the five year plan. Now let's talk about our formula to keep rates affordable for our customers to accommodate these needed investments.

You know our track record. You've heard me share in the past about our deliberate and sharp focus on taking costs out. Whether it is episodic cost savings through plant closures or renegotiating PPAs, operating our plants better than the markets, leveraging the CEway for process improvement, the use of digital technologies to improve efficiency or strong economic development. I'm confident in our ability to keep those affordable while delivering on the needed customer investments, ensuring every dollar is maximized and adds value. Speaking of economic development, I've said it before, Michigan is in a renaissance of growth.

Our five year plan now incorporates the significant economic development we are seeing with upwards of 2% to 3% annual load growth. We feel really good about the quality of growth we see materializing across our service area and the state, both data centers and manufacturing load. While we see a nice mix coming to the state, the manufacturing growth brings with it jobs, supply chains, commercial activity, housing starts and residential growth, which allows us to couple customer investments with affordability as we spread fixed costs over a larger customer base. We are committed to growing Michigan and we are pleased with what we've contracted and the now nine gigawatt pipeline of opportunities not yet in the plan. We work hard every day to win our customers' business and we are honored when businesses see the value in investing in our state and our service area.

Jumping to Michigan's regulatory environment, we continue to see a strong and supportive energy policy that ensures timely recovery of investments and incentives above and beyond stated ROEs as well as constructive regulatory planning mechanisms like renewable energy plants, integrated resource plans and investment recovery mechanisms that streamline the rate case process. In 2024, we delivered successful outcomes in our electric rate case, settled our fourth consecutive gas rate case and saw support for our distribution investments through the Liberty audit. For 2025, we expect a constructive outcome in our electric rate case with an order by the March. Our gas rate case is in the early innings, but we expect good support for the needed investments to keep our system safe. And as I shared earlier, our renewable energy plan with an expected outcome in late Q3 of twenty twenty five is something to look forward to given the large amount of renewables needed to meet the energy law and the growing demand we're seeing across our service area.

Now, on to the financials. We delivered adjusted earnings per share of $3.34 toward the high end of our guidance range. For 2025, as you might expect, we are raising our 2025 guidance off 2024 actuals from $3.52 to $3.58 to $3.54 to $3.6 which represents 6% to 8% growth and we continue to guide toward the high end. We also continue our long standing tradition of compounding off actuals, providing our investors with a higher quality of earnings. Longer term, we continue to guide toward the high end of our adjusted EPS growth range of 6% to 8%, which implies and includes 7% up to 8%.

Our dividend policy remains unchanged. We continue to target a dividend payout ratio of about 60% over time. With that, I'll hand the call over to Reggie.

Thank you, Garrick, and good morning, everyone. As Garrick highlighted, we delivered strong financial performance in 2024 with adjusted net income of $998,000,000 which translates to $3.34 per share and towards the high end of our guidance range. The key drivers of our 2024 financial performance included constructive regulatory outcomes, a solid beat at Northstar, cost performance fueled by the CE Way and a variety of non operational countermeasures, which more than offset the many challenges we saw throughout the year. For the second year in a row, we experienced significant weather related financial headwinds, primarily in the form of mild winter temperatures in the first and fourth quarters. In fact, per our records in 2024, we had the warmest winter in the last twenty five years based on heating degree days.

Yet despite these challenges, we managed to offset the weather driven headwinds without compromising our commitments to our customers, communities or coworkers. To elaborate on the strength of our financial performance in 2024, on Slide 11, you'll note that we met or exceeded all of our key financial objectives for the year. To avoid being repetitive, I'll just note that we successfully invested $3,300,000,000 as per our original guidance to make our electric and gas systems safer, more reliable and cleaner on behalf of our 3,000,000 customers at the utility. We managed to do this while funding the business in a cost efficient manner largely through operating cash flow, well priced bonds at the utility and tax credit transfers in the inaugural year of this new financing vehicle. This funding strategy enabled us to maintain our solid investment grade credit metrics and associated ratings as affirmed by each of the rating agencies over the course of the year, most recently by S and P in December.

Moving to our 2025 EPS guidance. On slide 12, you'll note the rebasing of our 2025 adjusted EPS guidance off of actuals. For additional clarity, our 2025 adjusted EPS guidance increased by $0.02 per share on the low and high end of the range commensurate with the amount by which our 2024 adjusted EPS of $3.34 exceeded the midpoint of last year's EPS guidance range. Our increased 2025 EPS guidance implies

to 8% growth with continued confidence toward the high end of the range as Garrick noted. As you can see in the segment details, our EPS growth will primarily be driven by the Utility providing $4.01 to $4.05 of adjusted earnings as we plan for normal weather, constructive rate case outcomes and earned returns at or near authorized levels. At NorthStar, we're assuming an EPS contribution of $0.18 to $0.22 which incorporates a planned maintenance outage at DIG, offset by ongoing contributions from Northstar's clean energy business. Lastly, our financing assumptions remain conservative at the parent segment with the expectation of approximately $1,300,000,000 of new HoldCo long term debt and up to $500,000,000 of equity to support the increased capital plan at the utility. Our 2025 guidance also assumes the absence of liability management transactions.

To elaborate on the glide path to achieve our 2025 adjusted EPS guidance range, you'll see the usual waterfall chart on slide 13. For clarification purposes, all of the variance analyses herein are measured on a full year basis and are relative to 2024. From left to right, we'll plan for normal weather, which in this case amounts to $0.39 per share of positive variance given the expected absence of the atypically mild winter temperatures experienced in 2024. Additionally, we anticipate $0.21 of EPS pickup attributable to rate relief by the residual benefits of last year's successful gas rate case settlement and the expectation of constructive outcomes in our pending electric and gas rate cases. Outside of the general rate cases, we also expect see earnings contributions from our renewable investments as construction of these projects progress.

As always, our rate relief figures are stated net of investment related costs, such as depreciation, property taxes and utility interest expense. As we turn to the cost structure in 2025, you'll note $0.03 per share of positive variance due to the anticipation of continued productivity driven by the CE Way. We also expect a healthy reduction in operating expenses attributable to the closure of our remaining coal units mid year, which will be largely offset by increases to vegetation management and other electric reliability related cost categories, all of which align with our pending electric rate case. Lastly, in the penultimate bar on the right hand side, you'll note a significant negative variance, which largely consists of the reversal of select countermeasures in 2024 and expected capital costs associated with the aforementioned parent financings. We're also including the usual conservative assumptions around weather normalized sales and taxes among other items.

In aggregate, these assumptions equate to $0.37 to $0.43 per share of negative variance. As always, we'll adapt to changing conditions throughout the year to mitigate risks and deliver our operational and financial objectives to the benefit of customers and investors. On slide 14, we have a summary of our near and long term financial objectives. As Garrick noted, from a dividend policy perspective, we're targeting a payout ratio of about 60% and anticipate remaining in that area over the course of our five year plan. Given the elevated cost of capital environment and the breadth and depth of customer investment opportunities before us, we continue to believe that it is prudent to retain more earnings to fund growth.

From a balance sheet perspective, we continue to target solid investment grade credit ratings and we'll continue to manage our key credit metrics accordingly as we balance the needs of the business. As such, we intend to resume our at the money at the market or ATM equity issuance program in the amount of up to $500,000,000 in 2025 as mentioned earlier. We expect this level of equity issuance to trend down in the outer years of our plan as we increase the size of our tax credit transfer program given the substantial renewable build out underway in accordance with Michigan's Energy Law. Lastly, we also expect select large multi year economic development projects to begin coming online in 2025, yielding approximately 1% weather normalized load growth for the year with run rate assumptions of 2% to 3% in the outer years of our plan as other large projects come online. Slide 15 provides a look into the historical performance and estimated growth of NeuroStar's big facility with upside potential beyond 2026 as capacity prices in Zone 7 continue to increase.

Given the rising cost of new entry, we have updated the potential range of outcomes accordingly as you can see in the bars on the far right hand side of the chart. We remain bullish on the opportunities in the bilateral market for DIG and will continue our strategy of layering in contracts over time. Slide 16 offers more specificity on the funding needs in 2025 at the utility and the parent. The only additional financings I'd mentioned for the year are the planned debt issuances at the utility, which we anticipate being a little over $1,100,000,000 It is also worth noting that we have not assumed the issuance of any junior subordinated notes also known as hybrids in our 2025 financing plan or in our five year plan, which offers a potential opportunity if we see attractive price points in the market. Needless to say, we'll remain opportunistic throughout the year.

On slide 17, we have refreshed our sensitivity analysis on key variables for your modeling assumptions. As you'll note with reasonable planning assumptions and our track record of risk mitigation, the probability of large variances from our plan is minimized. Our model has served and will continue to serve all stakeholders well. Our customers receive safe, reliable and clean energy at affordable prices. Our diverse and battle tested workforce remains committed to our purpose driven organization and our investors benefit from consistent industry leading financial performance.

And with that, I'll hand it back to Garrick for his final remarks before the Q and A session.

Thank you, Reggie. I'll finish where I started and with James Brown. I feel good. But I can't hold a tune. So instead, I'll pitch like this.

Twenty two years, twenty two proof points of consistent industry leading financial performance, providing you with predictability and strong growth, compounding off actuals, which very few do in our sector, providing you with a higher quality of earnings. We had a great 2024. We remain confident in our strong outlook for 2025 and beyond as we continue to execute on our simple investment thesis and make the necessary and important investments in our system while maintaining customer affordability. With that, Harry, please open the lines for Q and A.

Thank you very much, Carrick. The question and answer session will be conducted electronically. Our first question today will be from the line of Julien Dumoulin Smith with Jefferies. Please go ahead. Your line is open.

Hey, good morning, Steve. Nicely done. Thanks again for the time. Appreciate it.

Let me kick it off here. Hey, good morning. Thank you. Look, let me just kick it off on something a little bit more timely here. Just with respect to the permitting, you guys have a lot going on the renewable front.

I'd love to hear your thoughts, about the ability to execute in this environment. You guys specifically have wind in your outlook. I'm just curious to get your thoughts here, just given some of the backdrop here on the ability to execute, and especially given the permitting regime has been something of a conversation in recent times in your geography? Then I'll pivot back to some of the financials.

Well, the team is doing some amazing work from a pipeline perspective, both on wind and solar. And I'll just give you some context of that before I jump into kind of the administration, kind of federal administration piece. We just finished up a wind project in late last year, which was very successful. We got two large solar projects underway. Our Muskegon solar project's two fifty megawatts.

We just announced this last week, another three sixty megawatts we're building in Southwest Michigan. And this team's got a long pipeline. So this whole permitting thing, here's the secret to it. And it's not much of a secret. It's being on the ground, right?

It's working with the locals and the local townships, local communities to get acceptance for the projects and the tax dollars that come with those projects. It's working with landowners. That's been our success. And so, when it comes to specifically wind in this administration, that's particularly aimed at Federal lands. We're not doing anything offshore and we're not doing anything on Federal lands.

It's all private. And that's where our point of success is. And so, we do see an opportunity for future wind projects. In many cases, it's been repowering. It's expansion within existing parks.

And there's a couple of new projects that are underway and under consideration. But I feel good about our ability to build out these renewables. And then remember always that this renewable energy plan is an iteration. So if I got to make an adjustment in a year, we'll do that. And so that's what gives me a lot of confidence about our future and ability to continue to deliver on this important customer investment agenda.

Awesome. Excellent. Thank you for that. I know that a lot of folks are kind of curious to understand exactly how that gets implemented, if you will. But pivoting back to the finish, I mean, obviously, very nicely done here.

Thank you for the updates on the low growth front.

bit to what the legislation, you know, does and especially could do prospectively? You kind of alluded it in broader terms. Can you speak a little bit more specifically in terms of what the contribution is in the 2% to 3% and what the big moving factors could be, especially subsequent to this legislation, which is fairly recent, right, in terms of the, what's reflected in that 2% to 3%?

You're assuming are you talking about state legislation just to clarify your question, Julian?

Yeah. I'm thinking about the sort of the data center avenue and to what extent is that reflected in that two to three? Again, is it just a little bit too nascent given how recently some of the stuff materialized?

So I want to be really clear about our sales growth. And this is exciting piece because it's evident in our renewable energy plan that we filed in November. It's part of our five year plan that we're talking about today. This 2% to 3% load growth is not a pipeline. It's not hypothetical.

This is stuff that's contracted. We have a high confidence and we're building substations to support. Some of this load starts to come on in 2025 and then continues out throughout 2029 in this five year plan. So there's a high degree of confidence about this 2% to 3%. That's the important piece.

And then if you look forward, there's a nine gigawatt pipeline. And Several quarters ago, I talked about that pipeline. It was smaller. It's grown and it's shifted a little bit to more data centers. It's about 65 ish percent data centers now.

The rest is manufacturing. That's in part due to this legislation passing, the sales and use tax. So that passed at the end of the year. The governor just signed it mid January. And so we're starting to see a nice uplift there.

And you hear, like, you've heard Microsoft acquiring land. We're working with other hyperscalers as well. And so, and you've also heard about a semiconductor project in Genesee County. There's a lot of energy here, no pun intended, a lot of excitement about the sales growth here, both what we've secured in that pipeline. And so I'm excited about Michigan.

Yes. Julian, all I would add to Garrick's comments is, when you think about the 2% to 3%, just to give you additional specificity, we've got multiple projects embedded in that. I'd say, six or seven larger ones and it's well diversified. So data centers are represented in that mix but again there's a lot of non data center activity as we've talked about for some time. Just given the attractiveness of Michigan remember it's not just competitive rates, we've also got obviously good fiber network.

We've got really good access to fresh water which is attractive for a lot of these manufacturing businesses because they do include water in their processes. And we've got a lot of energy ready sites because we've been doing the hard work for many years now, not just over the past couple of years. So we are well prepared to welcome these opportunities into Michigan and the opportunities embedded in that 2% to 3% in in our five year plan, those are either signed or imminently signed. So again, there's not a whole lot of beta around those opportunities. The one thing I would circle back to on your question about the permitting is that as Garrick noted, all of the projects that we're executing on are on private lands.

And as I understand it, private lands are also to some extent in the crosshairs a bit. But I think that that's also centered on wetlands, associated with private property. Again, none of our projects are situated in wetlands that could be subject to federal regulations. So again, to Gerrick's comments, we feel very good about our fact panel with respect to permitting and the associated build out of renewables over time.

All right. Excellent guys. I'll leave it there. See you guys soon. All right.

The next question will be from the line of Jeremy Tonet with JPMorgan. Please go ahead. Your line is open.

Just wanted to dive in a little bit if I could with regards to, I guess, how you feel about the regulatory environment in Michigan. There's been some concern in the marketplace with recent orders and figured that it would be good just to hear from you guys how you think about things at these days?

Jeremy, you like sausage? I mean, I love breakfast sausage. I got to tell you this. I got to tell you this. Like, a breakfast burrito, an egg scramble, I love seasoned sausage.

But the reality is, like, I don't like how sausage is made. No one wants to see how sausage is made. Right? And I think that's the that's the challenge. Everybody's getting wrapped around the ax about the Michigan regulatory environment.

And that's just the nuances of the environment. You've got the pluses and deltas. Everybody's paying attention to it. But the bottom line is we get constructive outcomes. 2022, '20 '20 '3, remind you of 2024, like successful electric outcome.

A consistent our fourth consecutive gas settlement. We'll get a constructive outcome in this electric rate case. And so

yeah, there's this push and pull that goes on within the regulatory environment, but I'm not here ringing my hands. Like, I'm we like our job is to sweat the small stuff. That's what we do. We sweat the small stuff. We work through the commission process and we get constructive outcomes.

And so when we're out there talking about 6% to 8% toward the high end and this consistency and predictability that our investors can count on, it's because we sweat it day in and day out. So, bottom line, we work through all that at the commission and we get the good outcomes. And I think that's the bottom line, Jeremy.

I just wanted to go, if I could pivot to dig for a second here. It seems like I think you mentioned outage. I'm just wondering how much of

a headwind that is for EPS this year, if you could quantify that?

Well, first of all, I'll let Reddy walk through the numbers on that. But the teams did this were just like any major outage, we do these every seven, eight years. Teams prepared, ready to execute, materials are all there. And so we've talked about this last year and this is part of the plan this year and it's, there's some renewables that are part of the mix that help with the EPS numbers and contribution from Northstar.

Yes. I think Geric summarized it well, Jeremy. So, yes, we'll probably lose about a little less or rather a little more than 50% of DIG's contribution in prior years, but that will be offset by contributions from existing operating assets. Remember, we do have a thermal generation fleet beyond DIG. We also have existing renewable projects such as the Aviator project and others.

And then we also do have some multi year projects that are underway that we expect to achieve, commercial operation data or COD in the second half of this year. And so it's a combination of additional contributions from new and existing operating assets and so that should offset DIG's contribution this year.

Right. I guess I was just thinking, I mean guidance might have been even higher if not for this turnaround, but understood your points there. That's it. Thank you.

yes, outages are a reality of the business. So unfortunately, this year, we'll have a modest dig, David. But in the subsequent years, we expect to see additional growth, which we highlighted on Slide 15 in the materials.

The next question today will be from the line of Michael Sullivan with Wolfe Research. Please go ahead. Your line is open.

Hey, Derek. I didn't eat breakfast, so you're making me a little hungry. I have sausage. Sorry.

I usually eat before the weekend. I got to like, I can't treat myself all the time. I got to wait for the weekend.

There you go. Actually wanted to start with Reggie just on the financing side. So do you mind just maybe bridging us a little bit from the $3,000,000,000 CapEx increase to what you increased on the equity side? Because it seems like maybe a little bit less than what we would have otherwise expected in terms of equity need. How much is maybe tied to tax credit transferability?

Any additional color there would be helpful.

Yes. Happy to provide some information on that, Michael, and appreciate the question as always. So as you may recall in the past we've talked about this sensitivity between every dollar of capital investment funded by about $0.35 to $0.4 of common equity at the HoldCo And that's about where we are if you just think about the glide path from this vintage we've just rolled out today of a five year plan versus the prior. And so to give you specific numbers, we're up $3,000,000,000 vintage over vintage of aggregate CapEx. And so that implies about another $120,000,000 or so of equity.

The prior plan had up to $350,000,000 of equity starting this year. And so you add $120,000,000 on top of that, you start to get in that $500,000,000 range. And that's what we expect from an equity issuance perspective over the next two to three years. And then as we get to the outer years of this plan, it does step down. And that's why I said on a long term basis, the average will be about $450,000,000 And what you see is, we do have we're expecting about $85,000,000 or so roughly of tax credit monetizations this year, but that will step up over the course of this five year plan as we execute on more renewable projects to comply with the energy law.

And so we expect over $700,000,000 of tax credit transfers in aggregate over the course of this five year plan and that compares favorably versus the expectations in the prior five year plan, which was closer to over a little over $500,000,000 So that tax credit ramp up or that tax credit transfer ramp up is really what's driving down the equity needs in the outer years of plan. And I would say in the front of the plan, pretty directly consistent with our historical sensitivity between CapEx and equity needs.

Okay. That's really helpful. And my second question, I'm going to stick with you here, Reggie. In terms of the liability management side, how do you think about if there's more to potentially do if necessary? And I know you didn't bake it into the plan, but if weather is mild again for the second or third year in a row, are there more levers to pull on that front?

And then maybe if I could also tie in like again where you were conservative without baking in any hybrid issuances like is that available to you currently you think? And just wanted to be really conservative. Yes, just trying to think about where you have some of the flex.

Absolutely. And so I would say with respect to liability management, certainly that was a very helpful tool in the toolkit over the course of 2024 and 2023, I'd remind you. And so we did lean into those. I think the benefits are several fold. I mean obviously we want to peg them to weather, and so we'd have to see what weather does over the course of the year if we were going to go down that path because we view opportunities like that as transitory like weather.

So we would want to peg them to weather, but I'd say given our utilization of those over the past couple of years, I'd say there's certainly more opportunities there. But we'd have to see where interest rates go. I mean right now it certainly makes the environment hospitable because rates have remained range bound and fairly high, which creates the discounts on extinguishments that drive the gains. But again, we have to see where weather trends and needless to say going on year eight here at CMS and as we've said before, we don't discriminate when it comes to the cost structure and so we look broadly whether that's tax planning, whether that's operational O and M related flex, whether that's the CE way. We will continue to look throughout the cost structure and execute on levers wherever we find them.

And that's why we've been successful for so many years now, just staying paranoid, identifying risk, quantifying risk and making sure we have opportunities that exceed the risk. And so that's what we'll do going forward. That's the playbook and I don't see us deviating from that. Transitioning to the question around hybrid, certainly that's an opportunity as I think we may have talked about in the past. The real limitations there is obviously we'll see where market conditions are, but it seems like there's pretty good depth and appetite for junior subordinated note paper in the market.

CMS Energy (CMS) Q4 2024 Earnings Call Transcript

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