Good morning, everyone, and welcome to the CMS Energy Second Quarter 2013 Results and Outlook Call. This call is being recorded. Just a reminder, there will be a rebroadcast of this conference call today beginning at noon, Eastern Time, running through August 1. 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. Glenn Barba, Vice President, Controller and Chief Accounting Officer. Please go ahead.

Good morning, and thank you for joining us today. With me are John Russell, President and Chief Executive Officer; and Tom Webb, Executive Vice President and Chief Financial Officer. Our earnings news release issued earlier today and the presentation used in this webcast are available on our website. 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 CMS Energy's and Consumers Energy's Securities and Exchange Commission filings. Forward-looking statements should be read in conjunction with the Forward-looking Statements and Information and Risk Factors sections of CMS Energy's and Consumers Energy's Form 10-K for the year ended December 31, 2012, and as updated in subsequent 10-Qs. CMS Energy's and Consumers Energy's Forward-looking Statements and Information and Risk Factors sections are incorporated herein by a reference and discuss important factors that could cause CMS Energy's and Consumers Energy's results to differ materially from those anticipated in such statements. CMS Energy and Consumers Energy undertake no obligation to update any of the information presented herein to reflect facts, events or circumstances after the date hereof. This presentation also includes non-GAAP measures when describing CMS Energy's results of operations and financial performance. A reconciliation of these measures to the most directly comparable GAAP measure is included in the Appendix and posted in the Investors section of our website. CMS Energy provides historical financial results on both the reported Generally Accepted Accounting Principles and adjusted or non-GAAP basis, and provides forward-looking guidance on an adjusted basis. Management views adjusted earnings as a key measure of the company's present operating financial performance, unaffected by discontinued operations, asset sales, impairments, regulatory items from prior years or other items. These items have the potential to impact favorably or unfavorably the company's reported earnings in future periods. Because the company is not able to estimate the impact of these matters, the company is not providing a reconciliation to the comparable future period reported earnings. Now I will turn the call over to John.

Thanks, Glenn, and good morning, everyone. Thank you for joining us on our second quarter earnings call. We have several announcements to share with you this morning, which Tom and I will cover in detail throughout the call. I'll begin the presentation with a few brief comments about the quarter before I turn the call over to Tom to discuss the financial results and the outlook for 2013. Then we'll close, as we typically do, with Q&A. In the first half of the year, adjusted earnings were $0.83. That's up $0.06 from last year or 8%. The strong first half keeps us on track for our full year plan and we're reaffirming guidance of $1.63 to $1.66 per share. Sally Talberg was appointed to the MPSC earlier this month, replacing Commissioner Isiogu, and we look forward to working with her. Cost cutting and holding base rate increases below 2% continues to be a strategic focus for us. Today, I am announcing a number of new cost-reduction initiatives that will allow us to avoid our next planned electric and gas base rate increases. These self-initiated cost reductions allow us to dedicate more resources to improving customer service and reliability, while maintaining our current capital investment plan and our long-term EPS growth rate of 5% to 7%. More on this in just a minute. As you know, we have filed a certificate of necessity seeking approval for the full recovery of our new base load gas plant. In June, MISO approved our application to delay the mothballing of our 7 small coal plants until April of 2016. After these plants are mothballed, market purchases will fill the capacity gap in the short term. We believe that the right decision is to build a new combined cycle baseload natural gas plant to come…

Thanks, John. The investments that you just described deliver important services for our customers and predictable, continued growth for our investors. Our planned cost reductions are working even better than we anticipated just a few months ago. These savings have permitted us to avoid our present gas rate case and our next planned electric rate case. This provides for improved customer rates and reduced investor risk. Now for the first half, our earnings were $0.83 a share on both a reported and an adjusted basis. This is $0.06 or 8% better than last year. Cooler-than-normal weather in the winter and accelerated cost performance in the first quarter provided us with an opportunity to invest in incremental customer reliability and service already in the second quarter. Actual and projected costs are better than planned. While recent sales are stronger, we continue to forecast a little conservatively. We're maintaining EPS guidance at 5% to 7% growth or $1.63 to $1.66 a share. As is our past practice, we're reinvesting that stronger-than-planned performance in customer reliability improvements. So despite some onetime benefits a year ago that did not repeat this year, including recovery of coal plant investments, we've been able to continue our healthy pace of earnings growth. Now please recall our work last year when we offset fully the adverse implications of unusually mild weather in 2012. Otherwise, this would've reduced 2012 earnings by $0.13 a share. Later in the year, we benefited from a hotter-than-normal summer and put this upside to use by investing substantially more in tree trimming, generating plant maintenance and system hardening. The benefits are showing up in our present reliability performance during prolonged hot and humid weather. We also were able to make important contributions to low income funds and our charitable foundation at the end of…

[Operator Instructions] The first question comes from the line of Kevin Cole, Crédit Suisse. Kevin Cole - Crédit Suisse AG, Research Division: Just to dig into, I guess, the moving pieces a little bit. So on Slide 20, am I reading it correctly that you expect O&M to fall through 2017? And so the 2015 rate case would just be capital-driven?

I think the simple answer to that is yes. In fact, there's other pieces. Obviously, there's revenue pieces to the rate case. There could be ROE pieces to the rate case, although we don't expect that. But as we drive our O&M down, we will have our new capital investment requirements, and we suspect that whatever they are, we'll be able to offset that a little bit in our request for rate relief. Kevin Cole - Crédit Suisse AG, Research Division: And then, Tom, is it possible during the stay-out between now and 2015 or during the 2015 U.S. legislature review that you can seek either capital trackers on environmental CapEx or on the new gas plant that could enable you to stay out even further?

Well, to get a tracker mechanism in place, as you've described it, would require a rate case. So that's the sort of thing that we'll talk about with the next rate case. But I'm sure there'll be lots of dialogue around things like that over the course of the next year as people look at what's the right legislative model and what's the right regulatory model. So there'll be lots of discussion, lots of progress, but the implementation would be through a rate case. Kevin Cole - Crédit Suisse AG, Research Division: Okay, then last question just so I have the timing right, so with the stay-out are you expecting to file in mid-'14 with self-implementation 1115 or to file in '15?

Now, we haven't actually announced what those dates would be, but if you'd let me characterize it just a little loosely, and gas and electric could be slightly different, but I would expect we do something in the summer of '14, self-implementation would certainly be towards the very back-end of 2014, if not the early part of 2015. But I must say, the progress that we're making on the cost side of the ledger is so strong we'll be looking at that carefully, but we wouldn't want to tell you that we could wait beyond the 2015 test year. Kevin Cole - Crédit Suisse AG, Research Division: Okay. So one last question. What are your volumes assumptions for 2014?

We -- what we show is our growth kind of at a modest level. We'll plan over the period about 0.5% to 1% for electric weather-adjusted rate growth. And I think if you see something like that in '14, you shouldn't be surprised.

The next question comes from Jonathan Arnold, Deutsche Bank.

Quick question on the cost saving. John, you mentioned that you had -- that some of this was kind of outperformance on -- when you talked to Slide 10 this is where you showed the kind of 9% reduction on the prior plan, and now you think it's more like 15%. You said some of this is outperformance on existing programs, and some of it is new initiatives. I was wondering if you could just give a bit more color on how much you've -- how much of this -- how much you're counting on for the new reductions, and how much of those are things that actually basically in the bag and how much do you still have to implement?

Yes. I think Tom showed you in his slide the detail behind it, Jonathan. One of the things that, I guess, surprised us -- pleasantly surprised us a little bit is we've been aggressively cutting costs for many years now. And many of these legacy costs changes that we made, particularly with the union in 2 contracts ago are paying dividends today. I mean, we're seeing the benefit of that. But also several years ago, we started initiative, which -- and just if you can bear with me a minute, I'll tell you how we've really gotten here. We're focused on improving safety, which we thought safety was the root of getting to the end and making us a successful company. We can't do it safe, we shouldn't be doing it. We've been able to move from fourth to first quartile in safety. After we did safety, the other focus we had is to ensure we have higher productivity. So we've been able to move from productivity of about, when we started measuring it up, about 40% or 50% over the past 5 years. And as Tom mentioned in his comments, which I think is important, our employee engagement is also now first quartile. So what we've been able to do is reduce cost, capture the productivity, the safety and the performance of our employees with the engagement. And what it's helping us do is reduce cost and serve customers better than what we expected by this time frame. So that's what's really driving this piece of it. But I tell you the one thing that surprised us most is how the continuation of the employees who are retiring with the legacy benefits compared to the new hires that we have that have some of the pay-as-you-go benefits, which has helped us substantially.

And if I might just add, I'd say that to your question about what's in the bag, we never like to say that the hard work we're doing is all in the bag. I mean, the operating guys would hang me if I said that. But I am going to go ahead and say it anyhow because what we're doing, a lot of it is already behind us, the way John just described it. And a lot of what's in front of us, we control it. It's things that we do. So from that sense, they're in the bag. There are a couple of things we do need help on, so one of the savings will be the securitization, so we will request the commission's help on the securitization, and we'll make that request in September. So we need their support on that. And we do have the CON in place, which is good economics for our customers, so we need their support on that. And then lastly, we do need an accounting order. It's almost a technicality, but it saves money for customers, so we're hopeful that they'll see that as a very positive thing as well. So there's a few things that we need some support on that aren't completely in our control, but most of this, we control it, we're doing it, so a CFO calls it in the bag even though there's a lot of work to do.

Can you just -- can you put a number around the securitization, perhaps?

Yes. That savings will be about $20 million to customers, and that won't kick in until probably around 2015. And the reason for that is, this is all provided for in laws put in place 10 years ago. And it takes about 90 days for the commission to review if they think it's the right thing to do, and then we provide time for appeal. So all parties can participate in something like this and ask questions. We assume that process could take as long as into 2014. And if it does, therefore, we plan the benefits for our customers in 2015. If it happens earlier, that's great. But that's our plan.

The $20 million would be the savings, then how much would you have be securitizing?

We'd be securitizing in round numbers. $400 million, and the annual savings would be about $20 million.

The next question comes from Greg Gordon, ISI Group.

A question on your nonregulated businesses. I know you still have an ownership interest in the DIG gas plant. Can you talk about some of the actions you took over the course of the first half to try to increase profitability of that plant? My understanding is that you actually bid some of that plant into the PJM auction?

Yes, it's a good question. We're actually being very patient with our operation at the Dearborn Industrial Generation facility. They run well, they do a good job. But as you know in the capacity market that we have in MISO, if you want to call it that, the capacity prices are very low. We believe they will come back up. Lots of debate over the pace and the magnitude, but what we don't want to do is lock in for the long-term lower prices. So what we are doing is short-term contracts. And we're looking at things like, to your point, PJM. We looked at taking one of our units there and bidding that into PJM. And I think that most people were disappointed with the prices that came out of that bid for 3 years from now for everybody. But they're still better than what we are getting in MISO today. So we'll have some decisions ahead as to whether we stay with that market for 3 years from now or whether we sell that off to a counter party. We'll have opportunities on that decision. But the way to think about our plant there, short-term contracts, well run, as prices start to come back up, we'll start to layer in, like a cake, different contracts to take this us out over a period of time. And we'll do longer periods, as the prices are a little bit better. DIG's been a good contributor to us in the past. It's still a small but good contributor today. I think it'll be a larger contributor in the future.

Great. One last question. I know it's not your service territory, but do you see any knock-on effects in terms of economic impacts of the Detroit bankruptcy in your service territory?

No, I don't, Greg. I mean, that's something -- we don't serve that area, but it's a very important for Michigan as the state to have Detroit issues settled. So from that standpoint alone, certainly been a lot of media attention related to it. But I think they're on the path, albeit difficult, for success to move through some of the difficult things. So I see it in the long-term as a benefit. In the short term, it doesn't affect us.

I think you'll get some good insights tomorrow, I believe, when DTE does their call. They clearly are closer to it and do a lot of good work there.

The next question comes from Paul Patterson, Glenrock.

Just to circle back on Page 20. I mean, were all these -- I mean, how much of this had to do with any new initiatives that you actually took in place, versus, I mean, they were just better-than-expected?

Well, Page 20 is a good one to look at. If you look at what's up in the top of that page, those are all things we'd plan to do, and they either are well underway or you could consider them like good plans. If you look at what's called additional cost controls, that's where you'll see some of the things that we're able to do to avoid our rate cases coming up, and therefore, keep our base rates flat. And so when you look at that, I'll just quickly highlight them, the low-cost financing I talked about, well it was kind of in the plan, but we didn't expect it to bear as much fruit. The Cross Winds was -- and the way you should think about that, there's a lot of advantages in what we did here. But the simple one is we moved quicker to make sure we get the PTC. If we'd gone a little slower, we might have risked getting the PTC. So that's a little extra plus that we picked up in our plan. Tax benefits, those are just simply doing some things that we hadn't intended to do before to pass on some tax benefits to our customers and we didn't have them in our plan before. So that's where we're going to add...

Can you give me -- is that the $70 million? Could you give me an idea what kind of stuff that would be?

Yes. It's really -- well, it's actually extremely complicated. And I'll make it very simple. It has to do with cost of removal. And since 1993, we've been doing a form of accounting that just flowed all of the benefits through to our customers. Prior to that, so all the plants that were in place prior to that have cost of removal being collected overtime, which we still collect, the tax benefit hasn't been flowing through to our customers, and we're proposing to do that. That's just doing the accounting a little bit differently and helping our customers out for what we call those vintage plants. So that's a really good idea. Probably...

So you're collecting the money now, but you're passing the tax benefit on to customers, does that have an impact on earnings? Or I mean...

Well, no. Technically, that gives us an earnings benefit that was hung up on the balance sheet, which helps you offset the earnings impact of giving this money back to customers on a faster pace. And then on a cash flow standpoint, it's a negative cash flow for the company. It's positive for the customers, but we have other cash flow items that have offset all of that. So they neatly tuck together. And then the last one which is -- no, go ahead, I'm sorry.

The health care benefits?

Yes. I was going to go to that. The retiree health -- go ahead.

Well, is that one of the things where you're going to be changing the health care benefits that are currently -- in the current plan, you're going to be changing them, and therefore, there's going to be an accounting benefit recognizing the net present value benefit of the long-term impact?

Exactly. But what I will add to that, because you described it quite well, we have a nice program today that we've been doing over a decade of sharing our active premiums between employees pay a little bit and the company pays a little bit. We were not fully doing that kind of thing for our retiree health care. So we're just easing into that in a very gradual way. But you described it, by thinking about the benefit to the company of that into our customers of that over the long period of retirement, it adds up to quite a big number that you see here. So you described it correctly. I just want to color it to understand it. We're just sort of feathering that in slowly in a way that, just like our active employees' share in the premiums today, they'll share in the retiree health care wraparound of Medicare.

The next question comes from Ali Agha, SunTrust.

I wanted to be clear on a point you made about the delay in the rate case and the help that you need from the regulators or securitization, tax benefit sharing, et cetera. Just to be clear, if for whatever reason, that does not come through, does that cause you to accelerate the timing of the rate case? Or I just want to understand the link between that and the timing.

Let me take the 3 pieces individually so that -- because they're not all the same. On securitization, we assume the benefits in 2015, so we think that is a pretty standard process and that will work fine. If it didn't, that would not impact what we've just told you about rate cases for 2014. It would not. And then on the certificate of need for our new plant, the way you should think about that, we're very optimistic that we have the right proposal that it will be approved. But let's assume it weren't. If for some reason we're turned down, then we wouldn't build that plant. But as you know, John described it pretty well this morning, we have so much investment that's sitting out beyond this period, we'll be able to pull some of that customer investment in and replace that. So what I would say is that from an earnings and cash flow standpoint, that wouldn't really have a big impact, but it would be disappointing because it wouldn't provide the best operations for our customers. Then I would say on the tax case, if on that one -- we believe that's a pretty easy one to do, but I don't want to speak for the commission. It's an opportunity to reduce rates as we go forward for our customers. So to get that accounting order should be fairly simple to do, but if for some reason it was concluded that it would not be done, then we would relook at our rate cases, and we probably would file an electric and a gas rate case sooner than we described today. I don't anticipate that. I've kind of gone way over to the negative weeds to describe to you what would happen. I think we're on a good course. I believe the commission will, I don't want to speak for them, but I believe they will see the large benefits of these things and support the company's proposal. We'll see how that plays out. We'll know that one over the next month or 2 at most. And if we do fail, we'll revise our plan to file for rate cases, but I'm optimistic that we won't fail.

Okay, and also related to that, I believe you have -- you mentioned electric load growth weather normalized 0.5% to 1% is what you would look at. For some reason, if it again slowed down, was flat to even perhaps negative, will that also cause you to rethink the timing?

No.

Okay. And then last question on the CON. Some folks have suggested that there may be excessive [indiscernible] out there, IBP [ph] capacity that would be used. Any sense on how strong of a case that is?

Yes, Ali, I think what you're going to see is that there'll be people that'll intervene in the case, and there's some excess capacity in Michigan that you know of today. And I think what you're going to see is other people will try to make a case that their plants are better to be purchased by us or are a long-term contract from us than what the Thetford plant that we're proposing is. I tell you, from my standpoint, right now, the plant that we're proposing has the best technology, has the best site. It currently has all the infrastructure in place to move forward. It creates the jobs in a rather depressed area. I think that's a benefit for everybody from that standpoint. But I will tell you the one thing that we will not do, if the CON is not approved, we will not go forward. And the second issue is we will not move forward with a long-term power purchase agreement. I mean, that's not in the best interest of our customers. Our customers are paying for those long-term PPAs that we have today. And the reason they're paying for it is that we don't have any flexibility with these long-term contracts, while market prices decline or capacity prices are low. So you may -- I expect this to be a pretty hotly-debated CON process, and what we'll end up at the end of the day is doing what's best for our customers. And I think that I'm glad you asked the question. That's something that we -- I want to make sure everybody understood.

Got it. And so if not long-term PPAs, then you'd look for short-term options in that scenario?

Exactly. Yes, short-term would be the case or a purchase if somebody if the plants out there that's potentially better than our plant, which I can't imagine that. But if it is, we would certainly look at that from a purchase standpoint.

The next question comes from Leslie Wit [ph], JPMorgan.

I wondered if you could just comment on the decline in residential and commercial sales on a weather-adjusted basis. What you're seeing there?

Yes, I think we are still seeing what I would call the recovery pattern. So the industrials had a nice resurgence, and now is building on really tough comps because they have completely recovered from the recession. And so -- and they're doing pretty well. And we follow that carefully because that, to us, is our leading indicator for residential and commercial. So just like they followed industrial down into the recession, they still are following slowly the industrial growth out of the recession. So there's 2 things to consider there. I think the residential will come back first and then the commercial will follow. We're seeing lots of seeds of people who are living together, either families, kids with their families, or adult kids or whatever. We're seeing them begin to branch out, and you see that through the housing stock. People are now moving into homes that were vacant, and people are now building and people are now moving upmarket a little bit. All those are good signs. So I think we're going to see residential do better as we go through time. And then commercial will follow. The commercial folks are very sensitive to the recession, and they're even more cautious than industrial in doubling down. The second point that I want to make sure is clear is that to see the real economic difference, take on an annual basis, those numbers, and add just a touch over 1% for energy optimization. We're tracking that information very carefully because we're actually helping people get there. And so both the residential and the commercial are doing a pretty good job. So if you add that back, you see the real economic growth, even though you do need to look at the net number, obviously. So that's pretty much…

The last question in the queue at the moment comes from Ashok Khan [ph], VCM.

Tom, if I -- based on your comments in terms of certainty through an accounting order in a month or 2 months, and without now having rate cases next year, can we expect that when we come down to Grand Rapids in the fall that we could get guidance for next year?

Well, I wouldn't project what we're going to say on October 24 at this point. But I'll tell you what I can do today. I can tell you that our long-term guidance continues to be 5% to 7%. But yes, I don't want to tell you we're going to give new guidance for '14. But I can tell you I think you're going to see a lot of nice eye-opener things about the sorts of investments we're doing for our customers and how the team manages that. And why we're so confident in what we're doing. You're also going to see a lot about our O&M programs, the new ones we just did. And you can see again there -- judge for yourselves, why we're so confident that we can offset these rate cases and actually limit the size of future rate cases because our O&M is funding a lot of the capital side. So you'll get to see a lot of the detail there, and I hope a lot of people can make it because those that haven't seen a big pump storage station, I think will be tickled to see the size and the beauty of the operation that's there, as well as the major upgrade that's underway. So that'd be pretty exciting. And the other nice thing when you come to this, and I hope everyone does, we hope to have all 3 commissioners there so that you can independently ask them of us, your questions, about Appendix A and about our ability to push off these rate cases and why that makes sense or not to them. And they'll give you their own opinions and their own views, which, I think, is a really healthy thing to do. So there'll be a lot going on, and I hope you can make it.

There are no further questions. I would now like to hand the call over to Mr. Russell for closing remarks.

All right, thank you. Let me close today by saying the first half of the year has us on track to deliver our 11th year of consecutive financial performance. And as Tom was just mentioning, we appreciate your interest in CMS Energy, and we really hope you can join us in Grand Rapids. A couple of comments, just in addition to what Tom said. The Ludington Pumped Storage facility, as we know it right now, is the fourth largest in the world. So it is something to really see if you have the opportunity. And one of the questions came up about the city of Detroit and the bankruptcy, if you've never been to Grand Rapids, which is the largest city we serve, it'll be good opportunity to see that city and kind of the vibrant nature of that city compared to the east side of the state. Seeing the commissioners, I think, would be a great opportunity for you. And I also want you to be able to interact with the management team, which we'll have the full management team there. So a good opportunity to ask questions of us, ask questions to the regulators and see how we make this operation run. So with that, I appreciate your interest, and thank you for joining us today.

This concludes today's conference. We thank everyone for your participation.