Exhibit 99
(CMS ENERGY LOGO) NEWS RELEASE
- --------------------------------------------------------------------------------
CMS ENERGY REPORTS SECOND QUARTER NET INCOME
OF $72 MILLION, OR $0.31 PER SHARE
JACKSON, Mich., Aug. 3, 2006 -- CMS Energy (NYSE: CMS) announced today
net income of $72 million, or $0.31 per share, for the second quarter of 2006
compared to net income of $27 million, or $0.12 per share, in the same quarter
of 2005.
On an adjusted (non-GAAP) basis, the Company had net income of $55
million, or $0.23 per share, for the quarter, compared to $27 million, or $0.12
per share, for the same quarter of 2005. Adjusted results exclude the effects of
asset sales and other items (as discussed in the note below).
The Company's adjusted results for the second quarter, excluding
mark-to-market effects, were net income of $76 million, or $0.33 per share,
compared to $46 million, or $0.20 per share, in the comparable period of 2005.
Increased revenues from a December electric rate order for Consumers
Energy, CMS Energy's principal subsidiary, and the positive earnings impact of
an Internal Revenue Service settlement more than offset the costs associated
with the refueling of the Palisades nuclear plant and the effect of milder
weather in the second quarter of 2006 compared to the second quarter of 2005.
For the first six months of 2006, CMS Energy had reported net income of
$45 million, or $0.20 per share, compared to $177 million, or $0.82 per share,
for the first half of 2005. The 2006 six-month results include a net income
reduction of $108 million, or $0.47 per share, from the expected reversal of
previous mark-to-market gains on long-term natural gas contracts and financial
hedges.
On an adjusted basis, the Company had net income of $29 million, or
$0.13 per share, for the first half of 2006, compared to income of $175 million,
or $0.81 per share for the first six months of 2005. The adjusted results,
excluding mark-to-market effects, for the first half of 2006 were net income of
$124 million, or $0.54 per share, compared to $119 million, or $0.55 per share,
for the same period of 2005.
CMS Energy maintained its guidance for 2006 adjusted (non-GAAP)
earnings, excluding mark-to-market impacts, of about $1 per share. The Company
reiterated that its 2006 reported (GAAP) earnings are likely to be substantially
lower than its adjusted earnings because of the expected reversal of
mark-to-market gains and potential losses from asset sales. CMS Energy isn't
providing specific reported (GAAP) earnings guidance because of the
uncertainties associated with those factors.
Recent CMS Energy highlights:
o Consumers Energy signed an agreement to sell its Palisades
nuclear power plant to Entergy for $380 million.
o The Michigan utility also reached an agreement to sell its
interests in the Midland Cogeneration Venture to two buyers
for $60.5 million.
David Joos, CMS Energy's president and chief executive officer, said
the Company's performance in the first half of 2006 and the recent asset sales
announcements demonstrate continued progress on the "building on the basics"
strategy.
"We recently reached several important milestones as we continue to
implement our 'building on the basics' strategy. The sale of the Palisades plant
and our interests in the Midland Cogeneration Venture, when completed, will
improve cash flow, reduce financial risk, and help to stabilize future earnings.
The proceeds from those sales also will allow us to reduce debt at a time when
interest rates are rising," he said.
CMS Energy is a Michigan-based company that has as its primary business
operations an electric and natural gas utility, natural gas pipeline systems,
and independent power generation.
# # #
CMS Energy provides financial results on a reported (Generally Accepted
Accounting Principles or GAAP) and adjusted (non-GAAP) basis. Adjusted earnings
provide a key measure of the Company's present operating financial performance,
unaffected by discontinued operations, asset sales, impairments, or other items
detailed in the attached summary financial statements. Mark-to-market is a
non-cash accounting adjustment that primarily reflects changes in the value of
certain natural gas contracts. Earnings guidance is provided on an adjusted
basis without mark-to-market impacts.
This news release contains "forward-looking statements" as defined in Rule 3b-6
of the Securities Exchange Act of 1934, as amended, Rule 175 of the Securities
Act of 1933, as amended, and relevant legal decisions. The forward-looking
statements are subject to risks and uncertainties. They should be read in
conjunction with "Forward-Looking Statements and Risk Factors" found in the
Management Discussion and Analysis sections of CMS Energy's and Consumers
Energy's Forms 10-Q for the fiscal quarter ended March 31, 2006 (CMS Energy's
and Consumers Energy's "Forward-Looking Statements and Risk Factors" sections
are both incorporated herein by reference), that discuss important factors that
could cause CMS Energy's and Consumers Energy's results to differ materially
from those anticipated in such statements.
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
CMS Energy Corporation
SUMMARY OF CONSOLIDATED EARNINGS
--------------------------------
Condensed Consolidated Income Statements
(Millions, Except Per Share Amounts)
Second Quarter First Half
(Unaudited) (Unaudited)
---------------------- ----------------------
2006 2005 2006 2005
------- ------- ------- -------
Operating Revenue $ 1,396 $ 1,230 $ 3,428 $ 3,075
Earnings from Equity Method Investees 8 21 44 52
Operating Expenses 1,307 1,156 3,383 2,581
------- ------- ------- -------
Operating Income $ 97 $ 95 $ 89 $ 546
Other Income 42 29 58 53
Fixed Charges 132 133 261 269
------- ------- ------- -------
Income (Loss) before Minority Interests $ 7 $ (9) $ (114) $ 330
Minority Interests (Obligations) -- (14) (68) 99
------- ------- ------- -------
Income (Loss) before Income Taxes $ 7 $ 5 $ (46) $ 231
Income Tax (Benefit) Expense (66) (25) (94) 49
------- ------- ------- -------
Income from Continuing Operations $ 73 $ 30 $ 48 $ 182
Gain from Discontinued Operations 2 -- 3 --
------- ------- ------- -------
Net Income $ 75 $ 30 $ 51 $ 182
Preferred Dividends 3 3 6 5
------- ------- ------- -------
Net Income Available to Common Stockholders $ 72 $ 27 $ 45 $ 177
======= ======= ======= =======
Earnings Per Share
Basic $ 0.33 $ 0.12 $ 0.21 $ 0.86
Diluted 0.31 0.12 0.20 0.82
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CMS Energy Corporation
SUMMARIZED COMPARATIVE BALANCE SHEETS
-------------------------------------
(Millions of Dollars)
June 30 December 31
2006 2005
----------- -----------
(Unaudited)
ASSETS
Cash and cash equivalents $ 851 $ 847
Restricted cash 67 198
Other current assets 2,475 2,854
--------- ---------
Total current assets $ 3,393 $ 3,899
Net plant and property 8,028 7,845
Investments 748 725
Non-current assets 3,497 3,551
--------- ---------
Total Assets $ 15,666 $ 16,020
========= =========
STOCKHOLDERS' INVESTMENT
AND LIABILITIES
Capitalization
Debt and capital and finance leases (*)
Long-term debt and capital leases (excluding
FIN 46 debt, finance leases and securitization debt) $ 6,391 $ 6,464
FIN 46 debt and finance leases 767 897
--------- ---------
Total debt and capital and finance leases $ 7,158 $ 7,361
Preferred stock and securities 305 305
Minority interest 362 333
Common stockholders' equity 2,389 2,322
--------- ---------
Total capitalization $ 10,214 $ 10,321
Securitization debt 355 370
Current liabilities 1,504 1,668
Non-current liabilities 3,593 3,661
--------- ---------
Total Stockholders' Investment and Liabilities $ 15,666 $ 16,020
========= =========
(*) Current and long-term
CMS Energy Corporation
SUMMARIZED STATEMENTS OF CASH FLOWS
-----------------------------------
(Millions of Dollars)
First Half
(Unaudited)
----------------------
2006 2005
------- -------
Beginning of Period Cash $ 847 $ 669
Cash provided by operating activities $ 507 $ 506
Cash used in investing activities (268) (136)
------- -------
Cash flow from operating and investing activities $ 239 $ 370
Cash used in financing activities (236) (27)
Currency Translation Adjustment 1 1
------- -------
Total Cash Flow $ 4 $ 344
------- -------
End of Period Cash $ 851 $ 1,013
======= =======
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CMS Energy Corporation
SUMMARY OF CONSOLIDATED EARNINGS
--------------------------------
Reconciliations of GAAP Net Income to Non-GAAP Adjusted Net Income
(Millions, Except Per Share Amounts)
Second Quarter First Half
(Unaudited) (Unaudited)
----------------------- -----------------------
2006 2005 2006 2005
------- ------- ------- -------
NET INCOME AVAILABLE TO COMMON STOCK $ 72 $ 27 $ 45 $ 177
Reconciling Items:
Discontinued Operations (Income) Loss (2) -- (3) --
Net Asset Sales (Gains) Losses and Other (15) -- (13) (2)
------- ------- ------- -------
Adjusted Net Income - Non-GAAP Basis, Including MTM $ 55 $ 27 $ 29 $ 175
Mark-to-market (Gains) Losses 21 19 95 (56)
------- ------- ------- -------
Adjusted Net Income - Non-GAAP Basis, Excluding MTM $ 76 $ 46 $ 124 $ 119
======= ======= ======= =======
Average Number of Common Shares Outstanding
Basic 220 218 219 207
Diluted 230 229 230 216
BASIC EARNINGS PER AVERAGE COMMON SHARE
Earnings Per Share as Reported $ 0.33 $ 0.12 $ 0.21 $ 0.86
Reconciling Items:
Discontinued Operations (Income) Loss (0.01) -- (0.02) --
Net Asset Sales (Gains) Losses and Other (0.07) -- (0.06) (0.01)
------- ------- ------- -------
Adjusted Net Income - Non-GAAP Basis, Including MTM $ 0.25 $ 0.12 $ 0.13 $ 0.85
Mark-to-market (Gains) Losses 0.10 0.09 0.44 (0.27)
------- ------- ------- -------
Adjusted Net Income - Non-GAAP Basis, Excluding MTM $ 0.35 $ 0.21 $ 0.57 $ 0.58
======= ======= ======= =======
DILUTED EARNINGS PER AVERAGE COMMON SHARE
Earnings Per Share as Reported $ 0.31 $ 0.12 $ 0.20 $ 0.82
Reconciling Items:
Discontinued Operations (Income) Loss (0.01) -- (0.01) --
Net Asset Sales (Gains) Losses and Other (0.07) -- (0.06) (0.01)
------- ------- ------- -------
Adjusted Net Income - Non-GAAP Basis, Including MTM $ 0.23 $ 0.12 $ 0.13 $ 0.81
Mark-to-market (Gains) Losses 0.10 0.08 0.41 (0.26)
------- ------- ------- -------
Adjusted Net Income - Non-GAAP Basis, Excluding MTM $ 0.33 $ 0.20 $ 0.54 $ 0.55
======= ======= ======= =======
Note: Adjusted (non-Generally Accepted Accounting Principles) earnings
provide a key measure of the Company's present operating financial
performance, unaffected by discontinued operations, asset sales,
impairments, or other items detailed in these summary financial
statements. Mark-to-market is a non-cash accounting adjustment that
primarily reflects changes in the value of certain natural gas
contracts.
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