[CMS ENERGY LOGO]
NEWS RELEASE
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CMS ENERGY ANNOUNCES FIRST QUARTER EARNINGS OF 51 CENTS PER
SHARE, REAFFIRMS 2003 GUIDANCE OF 80 TO 90 CENTS PER SHARE
DEARBORN, Mich., May 8, 2003 - CMS Energy (NYSE: CMS) announced today
first-quarter net income of $79 million or $0.51 per share, compared to net
income of $42 million or $0.32 per share in the first quarter of 2002.
Ongoing net income (under non-Generally Accepted Accounting Principles) was $78
million or $0.50 per share, compared to ongoing net income of $79 million or
$0.60 per share in the first quarter of 2002. Management believes that ongoing
earnings provide a key measure of the Company's present operating financial
performance, unaffected by discontinued operations, accounting changes, net
asset gains or losses, or other items detailed in the attached summary financial
statements.
The $0.10 decrease in ongoing earnings compared with 2002 came despite stronger
utility earnings of $0.30 and a $0.25 gain from favorable foreign exchange
rates. These improvements were, however, more than offset by $0.33 per share of
2002 savings not repeated in 2003 and share dilution, as well as the absence of
earnings of $0.32 from businesses that have been sold.
Favorable weather and excellent power cost management improved first-quarter
results at CMS Energy's principal subsidiary, Consumers Energy. The utility
delivered 16.4 percent more gas and 5.6 percent more electricity in the first
quarter than a year earlier
Based on the first quarter results and the current outlook for the year, the
Company is reaffirming its earnings guidance for 2003 and expects:
- Reported net income will be roughly break even, dependent
largely on the timing and proceeds from planned asset sales.
- Ongoing net income will be in the range of $0.80 to $0.90 per
share.
Ken Whipple, CMS Energy's chairman and chief executive officer, said CMS Energy
has made good progress in executing its back-to-basics strategy over the past
year. He noted:
- CMS Energy and Consumers Energy completed $2.1 billion in
financings in recent weeks, boosting liquidity and financial
flexibility, cutting interest costs, and addressing debt
maturities through 2004 at the parent and well into 2004 at
the utility.
- Liquidity remains strong, in excess of the Company's cash
balance goal of about $400 million, split between the parent
and the utility.
- The Company is continuing its efforts to significantly reduce
operating expenses. The capital expenditure budget was cut
nearly 40 percent from 2001 to 2002 and will go down another
35 percent to 40 percent this year.
- The asset sales program remains on track, with about $3.7
billion in asset sales, including assumed debt, completed or
announced in 2002 and so far in 2003.
"The focus over the past year has been to increase our financial flexibility and
liquidity and implement our back-to-basics strategy. We're selling
underperforming and non-core assets. Our goal is to be a smaller, stronger
company with less business risk and more predictable earnings," Whipple said.
"The record shows we're making good progress, but there are still many
challenges ahead."
Looking ahead, Whipple noted that Consumers Energy has an important regulatory
agenda, with several key items before the Michigan Public Service Commission.
Those items include a request to securitize Clean Air Act expenses and other
costs, a gas rate increase case, and recovery of stranded costs linked to the
state's electric restructuring law.
CMS Energy is an integrated energy company, which has as its primary business
operations an electric and natural gas utility, natural gas pipeline systems,
and independent power generation.
# # #
For more information on CMS Energy, please visit our web site at:
www.cmsenergy.com
Media Contacts: Jeff Holyfield, 313/436-9253 or Dan Bishop, 517/788-2395
Investment Analyst Contact: CMS Energy Investor Relations, 517/788-2590
This news release contains "forward-looking statements" within the meaning of
the safe harbor provisions of the federal securities laws. It should be read in
conjunction with the forward-looking statements cautionary factors in CMS
Energy's Securities and Exchange Commission filings that identify important
factors that could cause CMS Energy's results to differ materially from those
anticipated in such statements.
CMS ENERGY CORPORATION
Summary of Consolidated Earnings
Condensed Consolidated Income Statements
(Millions, Except Per Share Amounts)
First Quarter
(Unaudited)
------------------------
2003 2002
------- -------
OPERATING REVENUE $ 1,992 $ 2,263
Operating Expenses 1,753 1,988
------- -------
OPERATING INCOME 239 275
Other Income (Deductions) (2) 14
Fixed Charges 119 128
Income Taxes 41 68
Minority Interests 1 -
------- -------
INCOME FROM CONTINUING OPERATIONS 76 93
INCOME (LOSS) FROM DISCONTINUED OPERATIONS 27 (51)
CUMULATIVE EFFECT OF ACCOUNTING CHANGES (24) -
------- -------
NET INCOME $ 79 $ 42
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BASIC EARNINGS PER SHARE $ 0.55 $ 0.32
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DILUTED EARNINGS PER SHARE $ 0.51 $ 0.32
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CMS ENERGY CORPORATION
Summary of Consolidated Earnings
Reconciliations of GAAP Net Income to Non-GAAP Ongoing Net Income
(Millions, Except Per Share Amounts)
First Quarter
(Unaudited)
--------------------------
2003 2002
-------- --------
NET INCOME $ 79 $ 42
Reconciling Items:
Discontinued Operations (Income)/Loss (27) 51
Cumulative Effect of Accounting Changes:
EITF #02-03 MTM Accounting 23 -
SFAS No. 143 Asset Retirement Obligations 1 -
Net Asset (Gain)/Loss and Other 2 (14)
-------- --------
Ongoing Net Income - Non-GAAP Basis $ 78 $ 79
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Average Number of Common Shares Outstanding
Basic 144 133
Diluted 165 138
BASIC EARNINGS PER AVERAGE COMMON SHARE OF CMS ENERGY:
Earnings Per Share As Reported $ 0.55 $ 0.32
Reconciling Items:
Discontinued Operations (0.18) 0.38
Cumulative Effect of Accounting Changes:
EITF #02-03 MTM Accounting 0.15 0.00
SFAS No. 143 Asset Retirement Obligations 0.01 0.00
Net Asset (Gain)/Loss and Other 0.01 (0.10)
-------- --------
Ongoing Net Income - Non-GAAP Basis $ 0.54 $ 0.60
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DILUTED EARNINGS PER AVERAGE COMMON SHARE OF CMS ENERGY:
Earnings Per Share As Reported $ 0.51 $ 0.32
Reconciling Items:
Discontinued Operations (0.16) 0.38
Cumulative Effect of Accounting Changes:
EITF #02-03 MTM Accounting 0.13 0.00
SFAS No. 143 Asset Retirement Obligations 0.01 0.00
Net Asset (Gain)/Loss and Other 0.01 (0.10)
-------- --------
Ongoing Net Income - Non-GAAP Basis $ 0.50 $ 0.60
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CMS ENERGY CORPORATION
Summarized Comparative Balance Sheets
(Millions of Dollars)
(Unaudited) (Unaudited)
March 31 March 31 December 31
2003 2002 2002
-------- -------- --------
ASSETS
Cash and cash equivalents $ 675 $ 129 $ 377
Other current assets 1,916 2,134 2,371
-------- -------- --------
Total current assets 2,591 2,263 2,748
Net plant and property 5,756 5,912 5,234
Investments 1,447 1,741 1,398
Non-current assets 4,509 5,688 4,535
-------- -------- --------
Total Assets $ 14,303 $ 15,604 $ 13,915
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STOCKHOLDERS' INVESTMENT
AND LIABILITIES
Capitalization
Debt
Long-term debt (excluding
Securitization) $ 4,786 $ 5,032 $ 4,930
Capital leases 121 84 116
Short-term 253 164 458
Current portion of long-term
debt and capital leases 907 710 613
-------- -------- --------
Total debt 6,067 5,990 6,117
Preferred stock and securities 927 1,228 927
Minority interest 22 24 21
Common stockholders' equity 1,228 2,080 1,133
-------- -------- --------
Total capitalization 8,244 9,322 8,198
Securitization debt 446 469 453
Current liabilities 1,589 2,085 1,800
Non-current liabilities 4,024 3,728 3,464
-------- -------- --------
Total Stockholders' Investment and Liabilities $ 14,303 $ 15,604 $ 13,915
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Memo Only: Total Debt, excluding securitization,
and including Panhandle $ 7,266 $ 7,294 $ 7,317
CMS ENERGY CORPORATION
Summarized Statements of Cash Flows
(Millions of Dollars)
First Quarter
(Unaudited)
--------------------------
2003 2002
-------- --------
Beginning of Period Cash $ 377 $ 127
-------- --------
Cash provided by operating activities $ 400 $ 249
Cash provided by (used in) investing activities (53) 794
Cash used in financing activities (50) (1,040)
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Total Cash Flow $ 297 $ 3
-------- --------
Currency Translation Adjustment $ 1 $ (1)
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End of Period Cash $ 675 $ 129
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