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EXHIBIT 99(a)
CMS ENERGY REPORTS FIRST QUARTER EARNINGS
DEARBORN, Mich., May l, 2000 -- CMS Energy Corporation (NYSE:CMS) today
announced first quarter consolidated net income of $80 million, compared to $98
million in the same quarter of 1999. Earnings per diluted share were 70 cents,
compared to 80 cents per diluted share earned in the first quarter of 1999.
First quarter results, which do not include any net gains from major asset
sales, are on track for CMS Energy to meet its sustainable earnings target for
the year.
Strong operating performance of CMS Energy's diversified energy businesses,
including gas transmission and storage, oil and gas exploration and production,
and international energy distribution, was more than offset by lower natural gas
utility sales as a result of warmer than normal winter weather, increased
electric utility operating costs due to a plant outage, and increased interest
charges.
The Company also announced today that it has decided not to proceed on a
previously announced stock tracking the performance of its Michigan utility,
Consumers Energy. As an alternative, the Company will continue to improve its
balance sheet, utilizing an additional $700 million of proceeds and debt
reduction from sales of non-strategic assets by year end. This is in addition to
the approximately $665 million of proceeds and balance sheet debt reductions
from asset sales completed or announced so far this year.
The Company also announced that since it is not going to issue a
yield-oriented tracking stock, it intends to maintain the CMS Energy common
dividend at its current annual level of $1.46 per share.
With respect to the decision to pursue additional asset sales, William T.
McCormick, Jr., chairman and CEO said, "it is clear that sale of non-strategic
assets to interested industry buyers will bring considerably more value to our
shareholders than issuance of equity in today's financial market, given the
recent low stock market valuations attributed to the utility industry.
Furthermore, continuing our asset optimization program is consistent with our
efforts to achieve more geographic and business focus that will allow CMS to
concentrate on its most profitable and growing energy businesses." McCormick
also said, "the Company continues to be committed to enhancing shareholder value
and strengthening further its balance sheet."
First quarter operating revenue totaled $1.83 billion, up from $1.54
billion in the first quarter of 1999. These results reflect ownership of the CMS
Panhandle Companies for the entire first quarter this year versus 1999 and
continued revenue growth in CMS Energy's diversified energy businesses.
Operating earnings of CMS Energy's non-utility, diversified energy
businesses during the first quarter totaled $114 million, an increase from $33
million in 1999. The CMS Panhandle Companies contributed $70 million of
operating earnings during the first quarter.
Operating earnings of the natural gas transmission, storage and processing
business were $78 million in the first quarter. This compares with $3 million in
the first quarter last year. Independent power production operating earnings in
the first quarter were $17 million, down from $27 million
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in the first quarter of 1999, due to lower domestic plant earnings and reduced
operating fees. Oil and gas exploration and production operating earnings for
the quarter increased to $5 million from $2 million last year, due to higher oil
and gas prices and increased production. Operating earnings of the international
energy distribution business were $6 million in the first quarter, its first
profitable quarter, versus an operating loss of $6 million in the first quarter
of 1999. The international energy distribution business is expected to continue
profitable operations into the future.
Operating earnings of the electric and natural gas utility businesses of
CMS Energy's principal subsidiary, Consumers Energy, decreased from $212 million
in the first quarter last year to $179 million in the same period this year.
Natural gas deliveries were 161 billion cubic feet, down three percent from the
first quarter last year, due to winter weather that was 13 percent warmer than
the first quarter of 1999 and 18 percent warmer than normal. First quarter total
electric sales were 10 billion kilowatt-hours, down three percent from 1999,
while operating costs were adversely affected due to increased purchased power
costs caused by a generating plant outage.
Other significant developments for CMS Energy in the first quarter
included:
-- repurchasing five million CMS Energy common shares through the first
quarter, with subsequent buy-backs through April bringing the total to 6.6
million shares repurchased;
-- acquiring the 445-mile Sea Robin Pipeline, a one billion cubic feet per
day natural gas and condensate pipeline in the Gulf of Mexico offshore
Louisiana, providing additional gas supply gathering resources to the CMS
Trunkline pipeline system;
-- bringing into commercial operation the first of two 110-megawatt
combustion turbine generators comprising the second phase of the Takoradi
Thermal Power Plant near Aboadze, Republic of Ghana;
-- completing a third successful natural gas development well outside
Midland, Texas, the Lela 1801H, which flowed at 12 million cubic feet and an
estimated 1,000 barrels of condensate per day;
-- signing a 15-year agreement to provide natural gas service to CMS
Panhandle Pipe Line Company's seventh power plant customer, a 390-megawatt
gas-fueled "peaking" plant being built by FirstEnergy Corp. at Defiance, Ohio.
CMS Energy Corporation has annual sales of more than $6 billion and assets
of $15 billion throughout the U.S. and around the world with businesses in
electric and natural gas utility operations; independent power production;
natural gas pipelines, gathering, processing and storage; oil and gas
exploration and production; and energy marketing, services and trading.
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For more information on CMS Energy, please visit our website at:
www.cmsenergy.com/ Media Contacts: Kelly M. Farr, 313/436-9253 or John P.
Barnett, 713/989-7556 Investment Analyst Contact: CMS Energy Investor Relations,
517/788-2590
This news release contains "forward-looking statements" that are subject to
risks and uncertainties. The words "anticipates", "believes", "estimates",
"expects", "intends", and "plans", and variations of such words and similar
expressions, are intended to identify forward looking statements. They should be
read in conjunction with the "Forward-Looking Statements Cautionary Factors" in
CMS Energy's and Consumers' Form 10-K, Item 1 (incorporated by reference herein)
that discusses important factors that could cause CMS Energy's and Consumers'
results to differ materially from those anticipated in such statements.
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CMS ENERGY CORPORATION
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Digest of Consolidated Earnings
(Millions, Except Per Share Amounts)
2000 1999
---- ----
Three Months Ended March 31 (unaudited)
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Operating Revenue $ 1,827 $ 1,537
Consolidated Net Income (a) $ 80 $ 98
Average Number of Common Shares
Basic 113 108
Diluted 118 113
Earnings per Average Common Share (a)
Basic $ .71 $ .82
Diluted $ .70 $ .80
Dividends Declared per Common Share $ .365 $ .33
In the opinion of Management, the above unaudited amounts reflect all
adjustments necessary to assure the fair presentation of the results of
operations for the periods presented.
(a) In October 1999, CMS Energy exchanged CMS Energy Common Stock for all of
the outstanding shares of Class G Common Stock. For the three months
ended March 31, 1999, net income attributable to Class G Common Stock,
and basic and diluted earnings per share of Class G Common Stock were $10
million, $1.19 and $1.19, respectively.