Table of Contents Table of Contents CMS Energy Corporation Consumers Energy Company Annual Reports on Form 10‑K to the Securities and Exchange Commission for the Year Ended December 31, 2025 Table of Contents | Glossary | 2 | Filing | Format | 13 | | | | | | | | | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | Forward-looking | Statements | and | Information | 13 | Part | I | 17 | | | | | | | | | | | | | | Item | 1. | ...

Investment Plans - The parent company of Consumers Energy plans to invest over $17 billion in generation, distribution, and other assets over the next five years, with generation investment increasing more than 25% compared to the previous five-year plan [1] Load Growth Projections - The utility expects robust and sustained load growth, projecting 3% weather-normalized load growth in 2026 and a run rate of 2% to 3% through 2030, primarily driven by data centers and industrial loads [2][3] Renewable Energy Investments - Consumers Energy plans to spend approximately $14 billion on renewable energy through 2045, which includes 8 GW of solar and 2.8 GW of wind [4] - The planned investment in electric generation through 2030 is around $8.8 billion, which is an increase of $2.5 billion from the prior five-year plan, focusing on renewable generation to comply with state law for 100% carbon-free electricity by 2040 [5] Data Center Developments - Ongoing negotiations for data centers are crucial, with a 1-GW data center agreement announced last July, and the company is close to finalizing a rate contract for this customer [6][7] - There are indications of more data center interests, with two proposed data centers and two new industrial loads expressing interest in Consumers' territory recently, alongside 9 GW of large-load interconnection requests in the pipeline [9]

Core Viewpoint - CMS Energy is optimistic about its regulatory outcomes and growth prospects, particularly in renewable energy and large-load opportunities, while maintaining a focus on customer affordability and long-term investments [4][6][19]. Regulatory Developments - The company anticipates a favorable outcome from its pending electric rate case, expecting a return on equity (ROE) of 9.9% or better, supported by constructive positions from the Michigan Public Service Commission [1][6]. - CMS Energy received approval for a 20-year renewable energy plan, representing approximately $14 billion in customer investment opportunities over the next decade [2][6]. Financial Performance and Guidance - CMS Energy reported adjusted earnings per share (EPS) of $3.61 for 2025, exceeding guidance and reflecting over 8% growth from 2024 [8]. - The company raised its 2026 adjusted EPS guidance to a range of $3.83 to $3.90, indicating 6% to 8% growth from 2025 results [6][8]. Capital Investment Plan - The five-year utility capital investment plan has been expanded to $24 billion, up $4 billion, supporting approximately 10.5% rate base growth through 2030 [6][11]. - Major drivers of the updated plan include an integrated resource plan to be filed in mid-2026, which will address capacity needs and incorporate renewable energy sources [11]. Large-Load Opportunities - The company's large-load pipeline, particularly for data centers, is expanding, with potential projects requiring $2.5 billion to $5 billion of investment per additional gigawatt [5][14]. - The Large Load Tariff has been approved to facilitate data center growth while ensuring existing customers are not burdened with the costs [3][12]. Customer Affordability and Cost Savings - CMS Energy emphasizes customer affordability, noting that utility bills represent about 3% of total expenses, down 150 basis points from a decade ago [19]. - The company achieved over $100 million in savings in 2025 through efficiency efforts and estimates that energy waste reduction programs will save customers about $1.2 billion [20]. Financing Strategy - In 2025, CMS Energy invested $3.8 billion, funded through operating cash flow, bond and equity financings, while maintaining investment-grade credit metrics [21]. - For 2026, the company plans to issue over $1.7 billion at the utility level and approximately $700 million of equity at the parent level [21]. Dividend Policy - CMS Energy aims to continue dividend growth, targeting a payout ratio of about 60% in 2026 and approximately 55% over time [22].

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Financial Data and Key Metrics Changes - For 2025, the company exceeded its adjusted earnings per share guidance, delivering $3.61 per share, which is an increase of over 8% from 2024's actual result [10] - The company raised its annual guidance for 2026 by $0.03, now expecting earnings per share between $3.83 and $3.90, representing 6%-8% growth from 2025 actual results [11][22] - The company has a target dividend payout ratio of approximately 55% over time, continuing its practice of growing dividends for over 20 years [12] Business Line Data and Key Metrics Changes - The utility segment is expected to provide $4.28-$4.33 of adjusted earnings per share, driven by normal weather and constructive regulatory outcomes [23] - Northstar is anticipated to contribute $0.25-$0.30 to earnings per share, benefiting from favorable capacity contracts and renewable projects [23] Market Data and Key Metrics Changes - The company reported that its residential natural gas rate is 28% below the national average, reflecting its commitment to affordability [10] - The company has seen a 3% load growth in Michigan, with expectations of 2%-3% growth over the five-year plan [56] Company Strategy and Development Direction - The company has received approval for a 20-year renewable energy plan, providing approximately $14 billion of customer investment opportunity over the next decade [5][8] - The company is focused on maintaining affordability while making significant investments in infrastructure, with a five-year $24 billion utility customer investment plan [12][15] - The company is actively pursuing data center opportunities, with a large load tariff designed to protect existing customers while attracting new business [4][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving a constructive outcome in the pending electric and gas rate cases, expecting a return on equity (ROE) of 9.9% or better [9][53] - The management highlighted the importance of a constructive regulatory environment in Michigan, which supports long-term investments and customer benefits [7][8] Other Important Information - The company has invested over $1 billion in gas infrastructure to ensure reliable service during cold weather [6] - The company has achieved significant savings for customers through its energy efficiency programs, amounting to approximately $1.2 billion [17] Q&A Session Summary Question: Update on data center opportunities - Management reported progress in discussions with data centers and highlighted the importance of the large load tariff in attracting these customers [35][36] Question: Clarification on the growth plan and its components - Management explained that the data center investments are not included in the current plan, but they expect a low double-digit compound annual growth rate (CAGR) when considering additional opportunities [38][41] Question: Concerns about authorized returns and regulatory feedback - Management expressed confidence in achieving a ROE of 9.9% or better, dismissing concerns about the recent Proposal for Decision as an outlier [50][53] Question: Impact of Integrated Resource Plan on capacity needs - Management clarified that the Integrated Resource Plan will address capacity gaps and that additional load growth will require significant investment [54][56]

Financial Data and Key Metrics Changes - For 2025, the company exceeded its adjusted earnings per share guidance, delivering $3.61 per share, which is an increase of over 8% from 2024's actual result [10] - The company raised its annual guidance for 2026 by $0.03, now expecting earnings per share between $3.83 and $3.90, representing 6%-8% growth from 2025 actual results [11][22] - The company has a target dividend payout ratio of approximately 55% over time, continuing a trend of dividend growth for over 20 years [12] Business Line Data and Key Metrics Changes - The utility segment is expected to provide $4.28-$4.33 of adjusted earnings per share, driven by normal weather and constructive regulatory outcomes [23] - Northstar is projected to contribute $0.25-$0.30 to earnings per share, benefiting from favorable capacity contracts and renewable projects [23] Market Data and Key Metrics Changes - The company reported that its residential natural gas rate is 28% below the national average, reflecting a balance between system investment and customer affordability [10] - The company aims to keep residential bills below the national average and Midwest average, with recent electric bill increases among the lowest in the country [17][18] Company Strategy and Development Direction - The company has received approval for a 20-year renewable energy plan, providing approximately $14 billion of customer investment opportunities over the next decade [5][8] - A five-year $24 billion utility customer investment plan has been outlined, with increased investments in electric generation and gas delivery systems [12][15] - The company is focusing on customer affordability while making significant infrastructure investments, leveraging operational efficiencies to save customers money [17][66] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving a constructive outcome in the pending electric and gas rate cases, expecting a return on equity (ROE) of 9.9% or better [9][53] - The management highlighted a strong regulatory environment in Michigan, which supports long-term investments and customer benefits [8][9] - The company is optimistic about the growth potential from data centers and manufacturing customers, with ongoing discussions and agreements in place [19][20] Other Important Information - The company has invested over $1 billion in gas infrastructure improvements to ensure reliability and safety for customers [6] - The company has a strong focus on energy efficiency, with programs expected to save customers approximately $1.2 billion [17] Q&A Session Summary Question: Update on data center opportunities - Management reported progress in discussions with data centers, with a growing pipeline and positive indicators for the Large Load Tariff [36][75] Question: Clarification on the financial plan and growth expectations - Management explained that the data center investments are not included in the current financial plan, but they expect a low double-digit CAGR when considering additional opportunities [42][45] Question: Concerns about authorized returns and regulatory feedback - Management expressed confidence in achieving a constructive outcome in the rate case, emphasizing the strong justification for capital investments and operational needs [50][53] Question: Capacity needs and Integrated Resource Plan (IRP) - Management clarified that the IRP will address capacity gaps and that additional load from data centers would lead to increased rate base growth [56][58]

Financial Data and Key Metrics Changes - For 2025, the company exceeded its adjusted earnings per share guidance, delivering $3.61 per share, which is an increase of over 8% from 2024's actual result [9][10]. - The company raised its annual guidance for 2026 by $0.03, now expecting earnings per share in the range of $3.83-$3.90, representing 6%-8% growth from 2025 actual results [10][20]. Business Line Data and Key Metrics Changes - The utility segment is expected to provide $4.28-$4.33 of adjusted earnings per share, driven by normal weather and constructive regulatory outcomes [22]. - Northstar is projected to contribute $0.25-$0.30 to earnings per share, benefiting from favorable capacity contracts and renewable projects [22]. Market Data and Key Metrics Changes - The residential natural gas rate is reported to be 28% below the national average, reflecting the company's commitment to affordability [9]. - The company anticipates a 3% weather-normalized load growth for 2026, with expectations of 2%-3% growth in subsequent years [27]. Company Strategy and Development Direction - The company has a five-year $24 billion utility customer investment plan, which is up $4 billion from the previous plan, aimed at improving reliability and customer service [11][14]. - The approval of a 20-year renewable energy plan highlights the constructive regulatory environment in Michigan, providing visibility for long-term investments in solar and wind [4][7]. Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving a constructive outcome for the ongoing electric rate case, expecting a return on equity (ROE) of 9.9% or better [8][41]. - The management emphasized the importance of maintaining affordability for customers, noting that utility bills remain approximately 3% of total expenses, down from 4.5% a decade ago [16][52]. Other Important Information - The company has invested over $1 billion in gas storage and delivery infrastructure to ensure reliability and affordability for customers [5][11]. - The company is actively working on securing data center opportunities, with significant progress made in finalizing agreements and tariffs [17][30]. Q&A Session Summary Question: Update on data center opportunities in Michigan - Management reported positive progress with data centers, noting an increase in interest and advanced talks with potential customers [30][31]. Question: Clarification on the 6%-8% growth guidance - Management explained that the growth guidance accounts for funding costs and refinancing pressures, with a focus on maintaining a high-quality earnings trajectory [36][38]. Question: Concerns regarding authorized returns and regulatory feedback - Management expressed confidence in achieving a constructive outcome in the rate case, emphasizing the strong justification for capital investments and operational needs [41][43]. Question: Impact of zoning on data center development - Management indicated that zoning issues are not seen as impediments, highlighting successful navigation of local regulations to facilitate data center growth [59][60].

Core Insights - CMS Energy Corporation (CMS) reported fourth-quarter 2025 earnings per share (EPS) of 95 cents, exceeding the Zacks Consensus Estimate of 94 cents by 1.3% and reflecting a 9.2% increase from 87 cents in the prior-year quarter [1][7] - For the full year 2025, CMS reported adjusted earnings of $3.61 per share, up from $3.34 in 2024, driven by strong performance at NorthStar Clean Energy [1][7] CMS' Revenues - Operating revenues for the fourth quarter totaled $2.23 billion, surpassing the Zacks Consensus Estimate of $2.11 billion by 5.9% and increasing 12.3% from $1.99 billion in the prior-year quarter [2] - Total revenues for 2025 reached $8.54 billion, higher than $7.52 billion in 2024 [2] Operational Performance of CMS - Operating expenses amounted to $1.8 billion, reflecting a 14.4% increase from the year-ago quarter [3] - Operating income was reported at $435 million, slightly up from $425 million in the prior-year quarter [3] - Interest charges totaled $201 million, an increase of 11.7% from the previous year [3] Financial Condition of CMS - As of December 31, 2025, CMS had cash and cash equivalents of $509 million, compared to $103 million as of December 31, 2024 [4] - Total debt and financial leases (excluding securitization debt) were $18.31 billion as of December 31, 2025, up from $15.87 billion a year earlier [4] - Net cash flow from operating activities was $2.24 billion in 2025, down from $2.37 billion in 2024 [4] CMS' 2026 Guidance - The company raised its 2026 adjusted earnings guidance to a range of $3.83-$3.90 per share, up from the previous range of $3.80-$3.87 per share [5] - The current Zacks Consensus Estimate for 2026 earnings is $3.85, which is lower than the midpoint of the company's newly guided range [5] - CMS reaffirmed its long-term adjusted EPS growth target of 6-8% [5]

LEADING THE CLEAN ENERGY TRANSFORMATION 2025 Year-End Results & Outlook February 5, 2026 This presentation is made as of the date hereof and contains "forward-looking statements" as defined in Rule 3b-6 of the Securities Exchange Act of 1934, Rule 175 of the Securities Act of 1933, and relevant legal decisions. The forward-looking statements are subject to risks and uncertainties. All forward-looking statements should be considered in the context of the risk and other factors detailed from time to time in C ...

Core Insights - CMS Energy reported quarterly earnings of $0.95 per share, exceeding the Zacks Consensus Estimate of $0.94 per share, and showing an increase from $0.87 per share a year ago, resulting in an earnings surprise of +1.28% [1] - The company achieved revenues of $2.23 billion for the quarter ended December 2025, surpassing the Zacks Consensus Estimate by 5.92%, compared to $1.99 billion in the same quarter last year [2] - CMS Energy has outperformed the S&P 500 with a share price increase of about 2.4% since the beginning of the year, while the S&P 500 gained 0.5% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $1.16 on revenues of $2.49 billion, and for the current fiscal year, it is $3.85 on revenues of $8.81 billion [7] - The estimate revisions trend for CMS Energy was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Industry Context - The Utility - Electric Power industry, to which CMS Energy belongs, is currently ranked in the top 35% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]