(CMS ENERGY LOGO) NEWS RELEASE
EXHIBIT 99
CMS ENERGY REPORTS 2006 FINANCIAL RESULTS
AND ANNOUNCES 2007 AND 2008 ADJUSTED EARNINGS GUIDANCE
JACKSON, Mich., Feb. 22, 2007 - CMS Energy announced today a reported
net loss of $90 million, or $0.41 per share, for 2006, compared to a reported
net loss of $94 million, or $0.44 per share, for 2005.
CMS Energy's adjusted 2006 net income, which excludes impairment
charges and other items, was $142 million, or $0.57 per share, compared to $295
million, or $1.39 per share for 2005. Adjusted 2006 net income without the
expected reversal of previous mark-to-market gains was $254 million, or $1.08
per share, up from $204 million, or $0.96 per share, for 2005.
The 2006 reported net loss includes the effects of two previously
announced non-cash, after-tax charges:
-- A third-quarter impairment charge of $169 million, or $0.76 per
share, related to CMS Energy's 50 percent interest in the Atacama
power plant and pipeline in Chile and Argentina.
-- A fourth-quarter charge of $80 million, or $0.36 per share,
linked to a preliminary agreement to settle shareholder class
action lawsuits linked to round-trip energy trading.
For the fourth quarter of 2006, CMS Energy announced a reported net
loss of $32 million, or $0.15 per share, compared to a reported net loss of $6
million, or $0.03 per share, for the same period in 2005.
Adjusted net income for the fourth quarter of 2006 was $73 million, or
$0.33 per share, up from $1 million, or less than $0.01 per share, for the
fourth quarter of 2005. Adjusted fourth quarter net income, without
mark-to-market effects, was $60 million, or $0.27 per share, compared to $41
million, or $0.19 per share, for the fourth quarter of 2005.
CMS Energy recently announced plans to sell the bulk of its
international businesses and its non-utility natural gas assets in northern
Michigan. Those sales are expected to be completed in 2007. The sales are
contingent upon meeting deal-related closing conditions and receiving necessary
regulatory and other approvals, and the successful execution of a bid sale of
CMS Energy's remaining businesses in Latin America and in Jamaica.
Proceeds from the sales are expected to be used to retire part of the
parent company debt and for general corporate purposes, including investments in
CMS Energy's Michigan utility, Consumers Energy.
As the businesses are sold, 2007 net income is expected to drop, with
an expected earnings reduction of about $0.30 per share, including interest
savings. That led CMS Energy to set its 2007 adjusted earnings guidance at about
$0.80 per share. The company expects 2008 adjusted earnings of about $1.20 per
share as increased earnings from investments in Consumers Energy and lower
interest costs are anticipated to offset the earnings lost from the sales. CMS
Energy anticipates that its 2007, and possibly 2008, reported (Generally
Accepted Accounting Principles) earnings will be lower than its adjusted
earnings, primarily due to the expected effect of asset sales. CMS Energy isn't
providing reported earnings guidance because of the uncertainties associated
with those factors.
"We will be in transition in 2007 as we lose earnings from the
businesses being sold and realize the benefits of our increased investments in
Consumers Energy later. The asset sales should allow us to accelerate our
financial improvement plan, and our adjusted earnings trend should be back on
track in 2008," said David Joos, president and chief executive officer of CMS
Energy.
CMS Energy (NYSE: CMS) 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 both a reported (Generally Accepted
Accounting Principles) and adjusted (non-GAAP) basis. Management views adjusted
earnings as 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 market value of certain natural gas contracts. Earnings guidance
is provided on an adjusted basis including 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 quarter ended Sept. 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
SUMMARIZED STATEMENTS OF INCOME (LOSS)
Condensed Consolidated Income Statements
(In Millions, Except Per Share Amounts)
Fourth Quarter
(Unaudited) Twelve Months
--------------- ---------------
2006 2005 2006 2005
------ ------ ------ ------
Operating Revenue $1,920 $1,906 $6,810 $6,288
Earnings from Equity Method Investees 26 33 89 125
Operating Expenses 1,847 1,955 6,473 5,503
Asset Impairment Charges 220 -- 459 1,184
------ ------ ------ ------
Operating Loss $ (121) $ (16) $ (33) $ (274)
Other Income (Deductions) 108 (20) 201 57
Fixed Charges 124 93 511 489
------ ------ ------ ------
Loss before Minority Interests $ (137) $ (129) $ (343) $ (706)
Minority Interests (Obligations) (73) (60) (100) (440)
------ ------ ------ ------
Loss before Income Taxes $ (64) $ (69) $ (243) $ (266)
Income Tax Benefit (33) (52) (158) (168)
------ ------ ------ ------
Loss from Continuing Operations $ (31) $ (17) $ (85) $ (98)
Income from Discontinued Operations 2 14 6 14
------ ------ ------ ------
Net Loss $ (29) $ (3) $ (79) $ (84)
Preferred Dividends 3 3 11 10
------ ------ ------ ------
Net Loss Available to Common Stockholders $ (32) $ (6) $ (90) $ (94)
====== ====== ====== ======
Loss Per Share
Basic $(0.15) $(0.03) $(0.41) $(0.44)
Diluted (0.15) (0.03) (0.41) (0.44)
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CMS Energy Corporation
SUMMARIZED COMPARATIVE BALANCE SHEETS
(In Millions)
December 31 December 31
2006 2005
----------- -----------
ASSETS
Cash and cash equivalents $ 351 $ 847
Restricted cash 71 198
Other current assets 2,721 2,875
------- -------
Total current assets $ 3,143 $ 3,920
Net plant and property 7,976 7,845
Investments 598 725
Non-current assets 3,654 3,551
------- -------
Total Assets $15,371 $16,041
======= =======
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) $ 6,373 $ 6,464
FIN 46 debt and finance leases 275 897
------- -------
Total debt and capital and finance leases $ 6,648 $ 7,361
Preferred stock and securities 305 305
Minority interest 91 333
Common stockholders' equity 2,234 2,322
------- -------
Total capitalization $ 9,278 $10,321
Securitization debt 340 370
Current liabilities 1,590 1,689
Non-current liabilities 4,163 3,661
------- -------
Total Stockholders' Investment and Liabilities $15,371 $16,041
======= =======
(*) Current and long-term
CMS Energy Corporation
SUMMARIZED STATEMENTS OF CASH FLOWS
(In Millions)
Twelve Months
-------------
2006 2005
----- -----
Beginning of Period Cash $ 847 $ 669
Cash provided by operating activities $ 688 $ 599
Cash used in investing activities (751) (494)
----- -----
Cash flow from operating and investing activities $ (63) $ 105
Cash provided by (used in) financing activities (434) 74
Currency Translation Adjustment 1 (1)
----- -----
Total Cash Flow $(496) $ 178
----- -----
End of Period Cash $ 351 $ 847
===== =====
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CMS Energy Corporation
SUMMARY OF CONSOLIDATED EARNINGS
Reconciliations of GAAP Net Income (Loss) to Non-GAAP Adjusted Net Income
(In Millions, Except Per Share Amounts)
Fourth Quarter
(Unaudited) Twelve Months
--------------- ---------------
2006 2005 2006 2005
------ ------ ------ ------
NET LOSS AVAILABLE TO COMMON STOCKHOLDERS $ (32) $ (6) $ (90) $ (94)
Reconciling Items:
Discontinued Operations Income (2) (14) (6) (14)
Net Asset Sales (Gains) Losses and Other 27 21 (11) 18
Shareholder Class Action Settlement 80 -- 80 --
Asset Impairment Charges -- -- 169 385
------ ------ ------ ------
Adjusted Net Income - Non-GAAP Basis, Including MTM $ 73 $ 1 $ 142 $ 295
Mark-to-market (Gains) Losses (13) 40 112 (91)
------ ------ ------ ------
Adjusted Net Income - Non-GAAP Basis, Excluding MTM $ 60 $ 41 $ 254 $ 204
====== ====== ====== ======
Average Number of Common Shares Outstanding
Basic 221 219 220 212
Diluted 221 219 220 212
BASIC EARNINGS (LOSS) PER AVERAGE COMMON SHARE
Loss Per Share as Reported $(0.15) $(0.03) $(0.41) $(0.44)
Reconciling Items:
Discontinued Operations Income (0.01) (0.06) (0.03) (0.07)
Net Asset Sales (Gains) Losses and Other 0.13 0.09 (0.04) 0.08
Shareholder Class Action Settlement 0.36 -- 0.36 --
Asset Impairment Charges -- -- 0.76 1.82
------ ------ ------ ------
Adjusted Net Income - Non-GAAP Basis, Including MTM $ 0.33 $ -- $ 0.64 $ 1.39
Mark-to-market (Gains) Losses (0.06) 0.19 0.51 (0.43)
------ ------ ------ ------
Adjusted Net Income - Non-GAAP Basis, Excluding MTM $ 0.27 $ 0.19 $ 1.15 $ 0.96
====== ====== ====== ======
DILUTED EARNINGS (LOSS) PER AVERAGE COMMON SHARE
Loss Per Share as Reported $(0.15) $(0.03) $(0.41) $(0.44)
Reconciling Items:
Discontinued Operations Income (0.01) (0.06) (0.03) (0.07)
Net Asset Sales (Gains) Losses and Other 0.13 0.09 (0.11) 0.08
Shareholder Class Action Settlement 0.36 -- 0.36 --
Asset Impairment Charges -- -- 0.76 1.82
------ ------ ------ ------
Adjusted Net Income - Non-GAAP Basis, Including MTM $ 0.33 $ -- $ 0.57 $ 1.39
Mark-to-market (Gains) Losses (0.06) 0.19 0.51 (0.43)
------ ------ ------ ------
Adjusted Net Income - Non-GAAP Basis, Excluding MTM $ 0.27 $ 0.19 $ 1.08 $ 0.96
====== ====== ====== ======
Note: Management views adjusted earnings as 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 market value of certain
natural gas contracts.
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