CMS Energy Corporation - 5.875% NT REDEEM 01/03/2079 USD 25

Guidance affirmed + new 2027 outlook (key “how much can investors expect”) - 1H 2026 adjusted EPS: $1.50 (adjusted net income $464M). - Full-year 2026 guidance reaffirmed: $3.83–$3.90 adjusted EPS, with confidence toward the high end. - New full-year 2027 guidance introduced: $4.08–$4.17 adjusted EPS, maintaining the company’s long-term target of 6%–8% annual EPS growth (off 2025 actuals). - Surprising/important nuance: Management framed the 2027 guide as “no rebase” and explicitly ties it to the NorthStar simplification/repositioning, implying earnings quality shifts rather than growth slowdown.

NorthStar restructuring: simplification, capital reallocation, and earnings quality shift - Plan: Exit nonutility renewables development (i.e., move away from the development platform), while retaining Michigan-based assets: - DIG (Dearborn Industrial Generation), - several small gas peakers (mentioned: Kalamazoo and Livingston), - 4 commercial solar projects in Michigan. - Capital reallocation: Current 5-year plan has ~$1.7B dedicated primarily to nonutility renewables; shifting away reduces parent funding needs. - Funding optimization: Company expects a > $500M reduction of funding through 2030 (stated as reducing parent needs, including equity). - Earnings mix change: After 2027, management expects nearly 100% of earnings and future growth to be rate-based within the utility—aiming for higher-quality, more predictable earnings.

1H 2026 performance: storms + weather were the key drag; offset by rates and modeling discipline - YOY adjusted EPS variance: -$0.23 (unfavorable), but management says a meaningful portion reflects timing/benefits already contemplated in the 2026 plan (e.g., 1H 2025 liability management benefits). - Main operating headwind: storms (including a pending storm deferral filed with the commission as an offset lever). - Weather: Slight cooling/heating degree day differences led to ~-$0.08 YTD impact. - Positive drivers: new rates net of investment costs (notably from gas/electric orders) plus some continuing support from renewable investments at the utility.