Rejji P. Hayes
Executive Vice President and Chief Financial Officer at CMS Energy
Thank you, Garrick, and good morning, everyone. As Garrick highlighted, we delivered strong financial performance in 2021 with adjusted net income of $767 million or $2.65 per share, up 7% year-over-year of our 2020 results. I'll note that our adjusted EPS excludes select non-recurring items most notably financial performance of EnerBank, the gain on the sale and related transaction costs, all of which are disclosed in the reconciliation schedule in the appendix of this presentation and posted on our website. The key drivers of our full year financial performance in 2021 will rate relief net of investments coupled with strong volumetric sales in our electric businesses. These sources of positive variance were partially offset by increased operating and maintenance expenses in support of key customer initiatives related to safety, reliability and decarbonization and higher service restoration costs and storm activity.
To this last point on storms, we saw a record level of storms across Michigan in 2021, particularly in the final five months of the year, including December and we still managed to deliver at the high end of our EPS guidance range. Our ability to withstand such headwinds quite literally in the case of 2021 and deliver the financial results we come to expect highlights our track record of planning conservatively, managing the work and relying on the perennial will of our dedicated coworkers. We deliver on the Triple Bottom Line irrespective of the condition.
Moving beyond EPS, on Slide 8, you'll note that we met or exceeded the vast majority of our key financial objectives for the year. It is worth noting that even with the aforementioned headwinds, we still managed to deliver of a $1.8 billion operating cash flow which exceeded our plan by over $80 million due to strong working capital management. The only financial target missed in 2021 is related to our customer investment plan do utility which was budgeted for roughly $2.5 billion and we ended the year just shy of that at $2.3 billion primarily due to the timing of select renewable projects, which were largely into 2022 and 2023. To close the books on 2021, we successfully completed our financing plan ahead of schedule as noted during our third quarter earnings call, issuing no equity during the year given the EnerBank sale, while maintaining solid investment grade credit metrics.
Moving to our 2022 guidance on Slide 9, we are raising our 2022 adjusted earnings guidance to $2.85 to $2.89 per share from $2.85 to $2.87 per share, which implies premium annual growth off our 2021 results, as Garrick highlighted. As you can see in the segment details, our EPS growth will primarily be driven by the utility as it has the past several years and we also anticipate a return to normal operations at enterprises this financial performance in 2021 was largely impacted by an extended outage at DIG late in the fourth quarter.
To elaborate on the glide path to achieve our 2022 adjusted EPS guidance range as you'll note on the waterfall chart on Slide 10, we'll plan for normal weather which in this case amounts to a penny per share of positive year-over-year variance. Additionally, we anticipate $0.05 of EPS pickup attributable to rate relief net of investment costs largely driven by our recent electric rate order and the expectation of a constructive outcome in our pending gas case later this year. As a reminder, we also continue to see the residual effects of tax benefits from our 2020 gas rate settlement.
As we look at our cost structure in 2022 you'll note approximately $0.21 per share of positive variance attributable to continued cost savings from productivity, driven by the CE Way and other cost reduction initiatives, as well as a return to more normalized levels of service restoration expense. As noted earlier, we're also assuming a resumption of normalized operating conditions in enterprises in the penultimate bar on the right hand side of the chart, coupled with usual conservative assumptions around weather normalized sales. As always, we'll adapt to changing conditions and circumstances throughout the year, mitigate risk and increase the likelihood of meeting our operational and financial objectives.
Moving to Slide 11 which denotes our near and long-term financial objectives, in addition to the adjusted earnings and dividend per square target, as Garrick noted earlier, 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. To that end, given the attractive valuation achieved in the EnerBank sale and our successful closing of the transaction in the fourth quarter, we do not anticipate issuing any equity through 2024 despite the increase in our five-year customer investment plan for $14.3 billion. Beyond '24, we expect to issue up to $250 million of equity per year in 2025 and 2026.
As for 2022 financings, our mains are limited debt issuances at the utility and the settlement of existing equity forward contracts, the details of which you can find in the appendix of our presentation. Our model is served and will continue to serve all stakeholders well. Our customers receive safe, reliable and clean energy at affordable prices, while our coworkers remain engaged, well trained and then outward in our purpose-driven organization and our investors benefit from consistent industry-leading financial performance. We're often asked whether we can sustain our consistent industry-leading growth in the long-term given the widespread concerns about inflation, supply chain and natural gas prices, among other risks. And our answer remains the same, irrespective of the circumstances we view it as our job do the warring for you. Sustainable and agile cost management has been one of the key pillars of success over the past several years.
And as you can see in the breakout of our cost structure on Slide 12, there remain ample opportunities to reduce costs across the business. As you'll note on the right hand side of the slide, we estimate over $200 million of episodic cost savings opportunities with coal facility retirements and the exploration high priced power purchase agreements or PPAs. In fact, our PPA with the Palisade move their facility will expire in April this year, which will provide approximately $90 million on savings to our customers. These cost savings are above and beyond what we will aim to achieve annually largely through the CE Way, our lean operating system, which as Garrick noted earlier, was a key driver in our achievement of $55 million in cost savings in 2021 and $100 million worth in 2020. Given our track record of reducing costs, we're highly confident that we'll be able to execute our capital plan delivering substantial value for customers and investors.
To conclude my remarks, on Slide 13, we have refreshed our sensitivity analysis on key variables for your modeling assumption. As you'll note, with reasonable planning assumptions and our track record of risk mitigation, the probability of large variances from our plan are minimum. And with that, I'll hand it back to Garrick for his final remarks before Q&A.