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Well, now I have a real distinct pleasure here at the beginning is just to introduce a few people and I'd like to ask them, just standup and just wave the hand, so you can see who they are, because one of the highlights of today is to get a chance to see the Executive Management team of the company. And so for some of you, when you hear me and I sort of look good and sound like I know what I am talking about, all I do is just try as best I can as to repeat everybody, but Jack, I do very much try to repeat what they know and things that they are experts on that I am not, but I at least can share with you a transparency into the company. You are going to meet the people that really do it and know how it works.So, let me go down through the agenda that you have and I first introduce these folks. Dan Malone is the Senior Vice President for Distribution & Customer Operations and Patti Poppe works for Dan. She is the Vice President for Customer Experience & Operations, a new position for us and you are going to hear more about that and you've asked me many of you what's new today watch that spot, because there are some nice new things that I think are important to us. Jack Hanson is my favorite team member, Senior Vice President, Generation & Energy Supply, really one of the sharper folks we have in the company and I have learned a lot from him, just don't use it all. And then Ronn Rasmussen is the Vice President for Rates & Regulation and everybody knows that's an important post in any regulated company, and so you are going to I think learn some very interesting things from him today as well.
I would like to introduce some other people just briefly here, because they are here and I'd like you to take the chance when we break to pick out those that you like to know more things about. And so Jim Brunner in the back there is our Senior Vice President and Chief Counsel, the very back; John Butler, Senior Vice President, HR and Shared Services, right over here, key player in our company; Bill Garrity, Senior Vice President, Energy Initiatives & Strategy, right over here, Bill, thank you, Bill; Glenn Barba, our Vice President, Controller, and Chief Accounting Officer, right over there near Bill; Laura Mountcastle, you all know is the Vice President of Investor Relations and Treasurer of the company, she must be in the ladies room; John Murphy, Executive Director, Corporate Finance in the back and then the bankers all know John; Bev Burger, Assistant Treasurer, bankers love Bev; and Phil McAndrews, (hitting the Poppe's head) in here just for a minute, Director of Investor Relations, a good friend, (he is knocking the Poppe's head in), but a really help to all of you, I know; Travis Uphaus, the Senior Financial Analyst in the back here in the Investor Relations side for us and in the Treasury side, some work there; and DV Rao, Executive Director for Financial Forecasting and Planning. Sometimes, when it looks like I really know about the numbers, I am just trying to remember what he told me, so that's the main event for guys like DV in helping me out a lot.And on that note, it's a real pleasure to turn the show over now to our Chief Executive Officer, John Russell. John? John Russell – Chief Executive Officer Thanks, Tom. Good afternoon everybody. I really do appreciate you making the time to come and see us here today, particularly in this beautiful setting. It is absolutely gorgeous to be here in the thrill for all of us. We have the opportunity this afternoon to ring the bell in closing of the exchange today, which is a great honor for us at 125 years of the company. You saw the video before we started here today. I want to start with another video that we had much shorter, but talks a little bit about the company and something we are going to use as we go through the 125th year celebration. So, queue it up, we'll start with that and then we'll give you the presentation today.
(Video Presentation)(That's the way) give up after launch gives you a good perspective of the company, Tom Webb and Dave Mengebier put that together for us. I wanted to start out with something that was kind of our history, to have the proud moment of what we have actually done through the years and what we deliver for you as investors. What we want to do today and what I'll start out with is to give you an overview of our strategy, the way our strategy works, they way we have accomplished the strategy and what we'll be looking at our priorities going forward. I also agree with what Tom said we want you to have an interaction and time to talk to our executives, because it isn’t me that makes this happen, it’s them. And this is a chance for them to come see you, they'll answer your questions, they'll all be here to talk to you, and these are the people that really make it happen, which I do want to give them credit for. Let's start with our strategy. I think, most of you are familiar with it. This is our growing forward strategy. It served us well through time and supports our vision, the vision to be best-in-class provide the best value to our shareholders and our customers and to ensure that our employees are proud to wear the colors. The foundation, as you can see here, is built on safe and excellent operations. If we do that well we can make the utility investments, which drive customer value, which in the end will get fair and timely regulation, which drives the consistent performance. The thing what about this strategy that served us so well is that it's durable, it's flexible, and it's balanced. And as you can see in the video, it served us well for 10 years and that will serve us the same for the next 5 to 10 years going forward, but the key to success of any strategy is its execution. And this is something I haven’t talked to you much about is how did we get to where we are today and we had a chance over launch to talk to some of you about, some of the history we've had at CMS. And there were some legacy issues that we had overcome, but the key to any successful strategy, I believe is to ensure that the company focuses on the execution of the strategy in everything that we do. And I want to show you how we have done that over the past several years.
Back in 2006, we set a benchmark this is at the utility, when I was running the utility to set breakthrough goals, and what breakthrough goals are our long-term broad-based goals which are aspirational in nature. And for the utility business that’s a little different, because utility business tends to be incremental in nature, and so there were some doubts about could you set goals out to 2012 on performance and achieve those targets. And I will be honest with you we had skeptics. We have skeptics on my management team. We had skeptics in the company that didn’t believe we could set goals in 2006 through 2012 and achieve those goals. And I want to give you little bit of a recap on what we have done and the targets that we have the categories, there is 12 of these goals and they fall into the categories you can see on the left side of the slide up there.The first goal we set, which was the hardest goal that we had to achieve, but the one that I set -- think set the platform for us in the future and the ones that we have the most skepticism for our employees was safety. We set a goal in 2006 to reduce the incidents of our employees and employee safety by 50% by 2012. The reaction from most employees is that's unattainable. In 2010, we achieved that target of 50% reduction and we have raised the bar to 70%. We have gone from fourth quartile in incidents back in 2006 to first quartile in 2011. And the reason I use safety is that could not have been done without a complete team effort of our management team, our union employees, and the leadership of our union. One other thing that illustrates to that I believe personally if you get safety right, it brings a sense of rigor and discipline to the business that carries through all phases of the business. And we know in this industry we operate a very dangerous business both on the electric and gas side. So, this is one of the ways that permeates as we go through and a key here is we are not done yet. And I think you know how we set goals at CMS Energy and Consumers Energy. The target we have for 2012, which is not there is a 20% improvement on where we achieved in 2011.
And I think you're familiar with our investment side of the strategy. We set goals aggressively and work very hard to achieve those targets. We won't rush, but I will tell you this is primarily for employees until we get to zero. And that's going to be harder as we move forward, but this is one of the things over the past five or six years I am most proud of. I'll show you another one in a minute.The other area that we had to improve on is our generation reliability. Back in 2006, our generation reliability was not where we wanted it to be. We set a goal to improve it by 50%. This is in time also when there were a lot of changes as far as environmental controls on the plants, major investments in plants. And for those of you that are familiar with generating units, as you take a unit down and put a lot of controls on it, it tends to operate sometimes not better than when you made the investments in the plant. And I'll tell you across the board, the areas that Jack Hanson and his team have worked on, he has the same that we leave it better than we found it. After the environmental controls go in place, the plant runs better than it did before. And it comes out of the shoot running better. Now, I didn't put the target here, but our Campbell Complex, which was one of the top – one of the five units that we're going to control, there is three units on that site. In 2011, the reliability of their EFOR rate was 2.7%. So, the $600 million of emission controls that we've put on those plants paid off very strongly in reliability, which paid the benefit to our customers and to the environment. And it makes me gratified when I think of shareholders that the investments payoff in performance.
Here is an area we need to improve on. And then I didn't want to just show you the good and the bad. This is our distribution reliability. We set a goal to improve it by 50%. We were able to improve it by 23% and we were hit with several storms, which Dan Malone will talk about in 2011, which caused us not to achieve our target, but like we normally do, we set the target in 2012 based on 2010 performance, not the anomaly that occurred in 2011. We set the bar back to continue those aggressive aspirational goals to achieve that target. This is an area we need to improve on.Read the rest of this transcript for free on seekingalpha.com