Exhibit 99.1
(CMS ENERGY LOGO) News Release
CMS ENERGY REPORTS STRONG THIRD QUARTER OPERATING PERFORMANCE; WRITEDOWN OF
SOUTH AMERICAN ASSET RESULTS IN REPORTED NET LOSS
JACKSON, Mich., Nov. 2, 2006 -- CMS Energy (NYSE: CMS) announced today a
reported net loss of $103 million, or $0.47 per share, for the third quarter of
2006, compared to a reported net loss of $265 million, or $1.21 per share, for
the same quarter of 2005.
The 2006 third quarter loss stemmed primarily from an after-tax impairment
charge of $169 million, or $0.76 per share, for CMS Energy's 50 percent interest
in the GasAtacama power plant and pipeline. The non-cash charge reflects
increased uncertainty about the availability of natural gas to fuel the
720-megawatt plant in Chile.
CMS Energy's adjusted third quarter net income, which excludes the
GasAtacama impairment and other items, was $40 million, or $0.18 per share, down
from $119 million, or $0.54 per share, for the same period of 2005. Adjusted
third quarter 2006 net income, without the expected reversal of previous
mark-to-market gains, was $70 million, or $0.31 per share, compared to $44
million, or $0.20 per share, for the same quarter of 2005.
For the first nine months of 2006, CMS Energy had a reported net loss of
$58 million, or $0.26 per share, compared to a reported net loss of $88 million,
or $0.42 per share, for the first nine months of 2005.
CMS Energy's adjusted nine-month net income, which excludes the GasAtacama
impairment charge and other items, was $69 million, or $0.31 per share, down
from $294 million, or $1.39 per share, for the same period of 2005.
Adjusted nine-month 2006 net income, without mark-to-market impacts, was
$194 million, or $0.88 per share, compared to $163 million, or $0.77 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 noted that
its 2006 reported (GAAP) earnings will be substantially lower than its adjusted
earnings because of the expected reversal of mark-to-market gains and the
GasAtacama impairment charge. CMS Energy isn't providing specific reported
(GAAP) earnings guidance because of the uncertainties associated with the
reversal of mark-to-market gains.
"Operational performance was strong during the quarter, especially in
meeting record high electric demand in Michigan in early August. Unfortunately,
the size of the GasAtacama impairment charge overshadows that fundamental
strength of our businesses and the outstanding efforts of our employees to serve
customers," said David Joos, CMS Energy's president and chief executive officer.
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 June 30, 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)
Third Quarter First Nine Months
(Unaudited) (Unaudited)
--------------- -----------------
2006 2005 2006 2005
------ ------ ------ ------
Operating Revenue $1,462 $1,307 $4,890 $4,382
Earnings from Equity Method Investees 19 40 63 92
Operating Expenses 1,243 967 4,626 3,548
Asset Impairment Charges 239 1,184 239 1,184
------ ------ ------ ------
Operating Income (Loss) $ (1) $ (804) $ 88 $ (258)
Other Income 35 24 93 77
Fixed Charges 126 127 387 396
------ ------ ------ ------
Loss before Minority Interests $ (92) $ (907) $ (206) $ (577)
Minority Interests (Obligations) 41 (479) (27) (380)
------ ------ ------ ------
Loss before Income Taxes $ (133) $ (428) $ (179) $ (197)
Income Tax Benefit (31) (165) (125) (116)
------ ------ ------ ------
Loss from Continuing Operations $ (102) $ (263) $ (54) $ (81)
Income from Discontinued Operations 1 -- 4 --
------ ------ ------ ------
Net Loss $ (101) $ (263) $ (50) $ (81)
Preferred Dividends 2 2 8 7
------ ------ ------ ------
Net Loss Available to Common Stockholders $ (103) $ (265) $ (58) $ (88)
====== ====== ====== ======
Loss Per Share
Basic $(0.47) $(1.21) $(0.26) $(0.42)
Diluted (0.47) (1.21) (0.26) (0.42)
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CMS Energy Corporation
SUMMARIZED COMPARATIVE BALANCE SHEETS
(Millions of Dollars)
September 30 December 31
2006 2005
------------ -----------
(Unaudited)
ASSETS
Cash and cash equivalents $ 459 $ 847
Restricted cash 70 198
Other current assets 2,517 2,854
------- -------
Total current assets $ 3,046 $ 3,899
Net plant and property 8,081 7,845
Investments 564 725
Non-current assets 3,287 3,551
------- -------
Total Assets $14,978 $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) $ 6,390 $ 6,464
FIN 46 debt and finance leases 695 897
------- -------
Total debt and capital and finance leases $ 7,085 $ 7,361
Preferred stock and securities 305 305
Minority interest 344 333
Common stockholders' equity 2,276 2,322
------- -------
Total capitalization $10,010 $10,321
Securitization debt 348 370
Current liabilities 1,270 1,668
Non-current liabilities 3,350 3,661
------- -------
Total Stockholders' Investment and Liabilities $14,978 $16,020
======= =======
(*) Current and long-term
CMS Energy Corporation
SUMMARIZED STATEMENTS OF CASH FLOWS
(Millions of Dollars)
First Nine Months
(Unaudited)
-----------------
2006 2005
----- -----
Beginning of Period Cash $ 847 $ 669
Cash provided by operating activities $ 436 $ 567
Cash used in investing activities (436) (362)
----- -----
Cash flow from operating and investing
activities $ -- $ 205
Cash used in financing activities (389) (82)
Currency Translation Adjustment 1 1
----- -----
Total Cash Flow $(388) $ 124
----- -----
End of Period Cash $ 459 $ 793
===== =====
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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)
Third Quarter First Nine Months
(Unaudited) (Unaudited)
--------------- -----------------
2006 2005 2006 2005
------ ------ ------ ------
NET LOSS AVAILABLE TO COMMON STOCKHOLDERS $ (103) $ (265) $ (58) $ (88)
Reconciling Items:
Discontinued Operations Income (1) -- (4) --
Net Asset Sales Gains and Other (25) (1) (38) (3)
Asset Impairment Charges 169 385 169 385
------ ------ ------ ------
Adjusted Net Income - Non-GAAP Basis, Including MTM $ 40 $ 119 $ 69 $ 294
Mark-to-market (Gains) Losses 30 (75) 125 (131)
------ ------ ------ ------
Adjusted Net Income - Non-GAAP Basis, Excluding MTM $ 70 $ 44 $ 194 $ 163
====== ====== ====== ======
Average Number of Common Shares Outstanding
Basic 220 220 220 211
Diluted 220 220 220 211
BASIC EARNINGS (LOSS) PER AVERAGE COMMON SHARE
Loss Per Share as Reported $(0.47) $(1.21) $(0.26) $(0.42)
Reconciling Items:
Discontinued Operations Income -- -- (0.02) --
Net Asset Sales Gains and Other (0.11) -- (0.17) (0.02)
Asset Impairment Charges 0.76 1.75 0.76 1.83
------ ------ ------ ------
Adjusted Net Income - Non-GAAP Basis, Including MTM $ 0.18 $ 0.54 $ 0.31 $ 1.39
Mark-to-market (Gains) Losses 0.13 (0.34) 0.57 (0.62)
------ ------ ------ ------
Adjusted Net Income - Non-GAAP Basis, Excluding MTM $ 0.31 $ 0.20 $ 0.88 $ 0.77
====== ====== ====== ======
DILUTED EARNINGS (LOSS) PER AVERAGE COMMON SHARE
Loss Per Share as Reported $(0.47) $(1.21) $(0.26) $(0.42)
Reconciling Items:
Discontinued Operations Income -- -- (0.02) --
Net Asset Sales Gains and Other (0.11) -- (0.17) (0.02)
Asset Impairment Charges 0.76 1.75 0.76 1.83
------ ------ ------ ------
Adjusted Net Income - Non-GAAP Basis, Including MTM $ 0.18 $ 0.54 $ 0.31 $ 1.39
Mark-to-market (Gains) Losses 0.13 (0.34) 0.57 (0.62)
------ ------ ------ ------
Adjusted Net Income - Non-GAAP Basis, Excluding MTM $ 0.31 $ 0.20 $ 0.88 $ 0.77
====== ====== ====== ======
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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