[CMS ENERGY LOGO]
NEWS RELEASE
CMS ENERGY ANNOUNCES THIRD QUARTER LOSS
OF $0.51 PER SHARE; REAFFIRMS EARNINGS GUIDANCE
JACKSON, Mich., Nov. 11, 2003 -- CMS Energy (NYSE: CMS) announced a
reported net loss of $77 million, or $0.51 per share, for the third quarter of
2003, compared to reported net income of $37 million, or $0.26 per share, for
the same quarter of 2002. The reported loss includes $0.52 per share for charges
and costs that were anticipated as a result of the Company's continuing
strategic and financial restructuring plan.
Ongoing (non-Generally Accepted Accounting Principles) net income for
the third quarter was $1 million, or $0.01 per share, compared to ongoing net
income of $65 million or $0.46 per share in the same period of 2002. Ongoing
earnings provide a key measure of the Company's present operating financial
performance, unaffected by discontinued operations, asset sales or other items
detailed in the attached summary financial statements.
Compared with the third quarter of 2002, the lower 2003 third quarter
ongoing results reflect lower electric sales, partly because of cooler summer
weather. Temperatures during the quarter averaged 2.5 degrees cooler than the
similar period last year. The lower summer temperatures, a slow economic
recovery in Michigan, and more customers taking power from alternate suppliers
reduced electric deliveries at CMS Energy's principal subsidiary, Consumers
Energy, by 6.4 percent during the quarter, compared to the same quarter last
year. In addition, the lower results reflect the absence of earnings from
businesses sold, and expenses associated with refinancings to extend debt
maturities and lower interest rates.
For the first nine months of 2003, CMS Energy had a reported net loss
of $43 million, or $0.29 per share, compared to reported net income of $5
million, or $0.04 per share, for the same period in 2002. Ongoing net income for
the period was $80 million, or $0.55 per share, compared to $161 million, or
$1.18 per share, for the first three quarters of 2002.
The Company reaffirmed its full-year ongoing earnings guidance of $0.80
to $0.90 per share, noting results likely will be at the lower end of the
guidance. The Company also reaffirmed its guidance for full-year reported
results as a loss of about $1 per share.
During the quarter, CMS Energy continued to make progress on its asset
sales program. It signed an agreement to sell its 6,000-acre Arcadia parcel on
Lake Michigan to the Grand Traverse Regional Land Conservancy. The Company also
signed an agreement to sell its 51 percent interest in the Marysville
underground storage terminal near Port Huron, Mich. Both sales are expected to
close before the end of the year.
CMS Energy is working to realize $900 million in net proceeds from
asset sales in 2003, although several potential transactions that require
regulatory approvals may not occur until 2004.
The successful asset sales program is helping CMS Energy to continue to
reduce its debt, dropping it from $7.3 billion at the end of 2002 to a projected
$6.2 billion at the end of 2003.
A recent CMS Energy highlight was a J.D. Power and Associates study
that found Consumers Energy's natural gas utility ranked highest for customer
satisfaction in the Midwest for the second year in a row.
Ken Whipple, CMS Energy's chairman and chief executive officer, said
the J.D. Power award reflects the Company's underlying operational strength.
"That strength comes from our employees, who are among the best in the energy
business and are committed to superior customer service," he said.
Whipple added: "Our business plan is solid, although our financial
results are down this quarter as we continue the transition to a smaller,
utility-based company. We are continuing to increase our financial flexibility,
reduce debt, and meet commitments."
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, 517-788-2394, 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)
Third Quarter Nine Months
(Unaudited) (Unaudited)
---------------------- ----------------------
2003 2002 2003 2002
--------- --------- --------- ---------
Operating Revenue $ 1,016 $ 2,534 $ 4,059 $ 6,843
Earnings from Equity
Method Investees 20 41 120 126
Operating Expenses 907 2,385 3,629 6,353
--------- --------- --------- ---------
Operating Income $ 129 $ 190 $ 550 $ 616
Other Income (Deductions) - 2 (3) 34
Fixed Charges 179 127 451 381
Income Tax Expense (Benefit) (16) 54 58 128
Minority Interests - - 1 1
--------- --------- --------- ---------
Income (Loss) from Continuing Operations $ (34) $ 11 $ 37 $ 140
Income (Loss) from Discontinued Operations (43) 25 (56) (153)
Cumulative Effect of Accounting Changes - 1 (24) 18
--------- --------- --------- ---------
Net Income (Loss) $ (77) $ 37 $ (43) $ 5
========= ========= ========= =========
Earnings (Loss) Per Share
Basic $ (0.51) $ 0.26 $ (0.29) $ 0.04
Diluted (0.51) 0.26 (0.29) 0.04
CMS Energy Corporation
SUMMARIZED COMPARATIVE BALANCE SHEETS
(Millions of Dollars)
As of September 30 (Unaudited)
----------------------------- December 31
2003 2002 2002
----------- ----------- -----------
ASSETS
Cash and cash equivalents $ 664 $ 332 $ 359
Restricted cash 205 18 38
Other current assets 1,806 1,940 2,351
----------- ----------- -----------
Total current assets $ 2,675 $ 2,290 $ 2,748
Net plant and property 5,742 5,630 5,230
Investments 1,425 1,567 1,393
Non-current assets 2,469 4,910 4,544
----------- ----------- -----------
Total assets $ 12,311 $ 14,397 $ 13,915
=========== =========== ===========
STOCKHOLDERS' INVESTMENT
AND LIABILITIES
Capitalization
Debt
Long-term debt (excluding
Securitization) $ 5,885 $ 5,215 $ 4,930
Capital leases 116 110 116
Notes Payable 4 235 458
Current portion of long-term
debt and capital leases
(excluding securitization) 156 574 613
----------- ----------- -----------
Total debt $ 6,161 $ 6,134 $ 6,117
Preferred stock and securities 707 927 927
Minority interest 23 12 21
Common stockholders' equity 1,353 1,829 1,133
----------- ----------- -----------
Total capitalization $ 8,244 $ 8,902 $ 8,198
Securitization debt 434 460 453
Current liabilities 1,009 1,711 1,800
Non-current liabilities 2,624 3,324 3,464
----------- ----------- -----------
Total Stockholders' Investment and Liabilities $ 12,311 $ 14,397 $ 13,915
=========== =========== ===========
CMS Energy Corporation
SUMMARIZED STATEMENTS OF CASH FLOWS
(Millions of Dollars)
Nine Months
(Unaudited)
----------------------
2003 2002
--------- ---------
Beginning of Period Cash $ 359 $ 123
--------- ---------
Cash (used in) provided by
operating activities $ (14) $ 333
Cash provided by investing activites 501 884
Cash used in financing activities (184) (1,008)
Currency Translation Adjustment 2 -
--------- ---------
Total Cash Flow $ 305 $ 209
--------- ---------
End of Period Cash $ 664 $ 332
========= =========
CMS Energy Corporation
SUMMARY OF CONSOLIDATED EARNINGS
Reconciliations of GAAP Net Income (Loss) to Non-GAAP Ongoing Net Income (Loss)
(Millions, Except Per Share Amounts)
Third Quarter Nine Months
(Unaudited) (Unaudited)
-------------------- --------------------
2003 2002 2003 2002
--------- --------- --------- ---------
NET INCOME (LOSS) $ (77) $ 37 $ (43) $ 5
Reconciling Items:
Discontinued Operations (Income) Loss 43 (25) 56 153
Cumulative Effect of Accounting Changes:
EITF #02-03 MTM Accounting - - 23 -
SFAS No. 143 Asset Retirement Obligation - - 1 -
SFAS No. 133 Derivative Accounting - (1) - (18)
Net Asset (Gain)/Loss and Other 35 54 43 21
--------- --------- --------- ---------
Ongoing Net Income - Non-GAAP Basis $ 1 $ 65 $ 80 $ 161
========= ========= ========= =========
Average Number of Common Shares Outstanding
Basic 152 144 147 137
Diluted 157 148 151 142
BASIC EARNINGS (LOSS) PER AVERAGE COMMON SHARE
Earnings (Loss) Per Share as Reported $ (0.51) $ 0.26 $ (0.29) $ 0.04
Reconciling Items:
Discontinued Operations (Income) Loss 0.29 (0.17) 0.38 1.11
Cumulative Effect of Accounting Changes:
EITF #02-03 MTM Accounting - - 0.15 -
SFAS No. 143 Asset Retirement Obligations - - 0.01 -
SFAS No. 133 Derivative Accounting - (0.01) - (0.13)
Net Asset (Gain)/Loss and Other 0.23 0.38 0.30 0.16
--------- --------- --------- ---------
Ongoing Net Income - Non-GAAP Basis $ 0.01 $ 0.46 $ 0.55 $ 1.18
========= ========= ========= =========
DILUTED EARNINGS (LOSS) PER AVERAGE COMMON SHARE
Earnings (Loss) Per Share as Reported $ (0.51) $ 0.26 $ (0.29) $ 0.04
Reconciling Items:
Discontinued Operations (Income) Loss 0.29 (0.17) 0.38 1.11
Cumulative Effect of Accounting Changes:
EITF #02-03 MTM Accounting - - 0.15 -
SFAS No. 143 Asset Retirement Obligations - - 0.01 -
SFAS No. 133 Derivative Accounting - (0.01) - (0.13)
Net Asset (Gain)/Loss and Other 0.23 0.38 0.30 0.16
--------- --------- --------- ---------
Ongoing Net Income - Non-GAAP Basis $ 0.01 $ 0.46 $ 0.55 $ 1.18
========= ========= ========= =========