EXHIBIT 99
(CMS ENERGY LETTERHEAD)
CMS ENERGY REPORTS FIRST QUARTER RESULTS
AND AFFIRMS ADJUSTED EARNINGS GUIDANCE
JACKSON, Mich., May 3, 2007 -- CMS Energy announced today a net
loss of $215 million, or $0.97 per share, for the first quarter of 2007 compared
to a net loss of $27 million, or $0.12 per share, in the same quarter of 2006.
CMS Energy's adjusted first quarter net income, which excludes
impairment charges and other items, was $94 million, or $0.43 per share,
compared to a net loss of $33 million, or $0.15 per share for the first quarter
of 2006.
The first quarter reported net loss was caused largely by charges
linked to CMS Energy's plan to sell all of its international businesses. Those
charges included a non-cash loss from discontinued operations of $180 million,
or $0.81 per share, and an impairment charge of $157 million, or $0.71 per
share. Those were offset partially by $28 million, or $0.12 per share, of net
benefits related primarily to the asset sales.
So far this year, CMS Energy has signed asset sales agreements
worth nearly $1.8 billion in gross cash proceeds. The company estimates it will
have an overall after-tax loss of about $225 million this year on these
transactions.
Proceeds from the sales are expected to be used to retire part of
the parent company debt and for general corporate purposes, primarily
investments in CMS Energy's Michigan utility, Consumers Energy.
CMS Energy maintained its guidance for 2007 adjusted
(non-Generally Accepted Accounting Principles) earnings of about $0.80 per share
and 2008 adjusted earnings of about $1.20 per share. CMS Energy anticipates that
its 2007, and possibly 2008, reported (GAAP) earnings will be lower than its
adjusted earnings, primarily because of the loss of earnings from the businesses
sold. CMS Energy isn't providing reported earnings guidance because of the
uncertainties associated with those factors.
"Our first quarter operating results were solid and reflect the
fact that we are in a transition. We are transforming CMS Energy as we sell
non-strategic businesses, eliminate overhead, continue significant investments
in the utility, and reduce parent company debt. We continue to make good
progress implementing this strategy and expect that the benefits of our
accelerated financial improvement plan will be seen in our earnings 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-K for the quarter ended Dec. 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
SUMMARIZED CONSOLIDATED STATEMENTS OF LOSS
(In Millions, Except Per Share Amounts)
First Quarter
(Unaudited)
---------------------------
2007 2006
---------- ----------
Operating Revenue $ 2,237 $ 1,937
Earnings from Equity Method Investees 19 36
Operating Expenses 2,284 1,992
---------- ----------
Operating Loss $ (28) $ (19)
Other Income 37 16
Fixed Charges 108 126
---------- ----------
Loss before Minority Interests $ (99) $ (129)
Minority Interests (Obligations) 2 (69)
---------- ----------
Loss before Income Taxes $ (101) $ (60)
Income Tax Benefit (70) (28)
---------- ----------
Loss from Continuing Operations $ (31) $ (32)
Income (Loss) from Discontinued Operations (180) 8
---------- ----------
Net Loss $ (211) $ (24)
Preferred Dividends 3 3
Redemption Premium on Preferred Stock 1 --
---------- ----------
Net Loss Available to Common Stockholders $ (215) $ (27)
========== ==========
Loss Per Share
Basic $ (0.97) $ (0.12)
Diluted (0.97) (0.12)
Memo: Continuing Operations Effective Income Tax Rate (*) 69% 47%
</Table>
(*) Reflects release of $81 million deferred tax asset valuation allowance in
2007.
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CMS Energy Corporation
SUMMARIZED CONSOLIDATED BALANCE SHEETS
(In Millions)
March 31 December 31
2007 2006
------------ ------------
(Unaudited)
ASSETS
Cash and cash equivalents $ 577 $ 263
Restricted cash 65 71
Other current assets 2,573 2,809
------------ ------------
Total current assets $ 3,215 $ 3,143
Net plant and property 7,903 7,773
Investments 521 598
Non-current assets 3,638 3,857
------------ ------------
Total assets $ 15,277 $ 15,371
============ ============
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) $ 6,384 $ 6,373
FIN 46 debt and finance leases 269 275
------------ ------------
Total debt and capital and finance leases $ 6,653 $ 6,648
Preferred stock and securities 294 305
Minority interest 85 77
Common stockholders' equity 2,110 2,234
------------ ------------
Total capitalization $ 9,142 $ 9,264
Securitization debt 332 340
Current liabilities 1,461 1,590
Non-current liabilities 4,342 4,177
------------ ------------
Total Stockholders' Investment and Liabilities $ 15,277 $ 15,371
============ ============
(*) Current and long-term
CMS Energy Corporation
SUMMARIZED STATEMENTS OF CASH FLOWS
(In Millions)
First Quarter
(Unaudited)
--------------------------
2007 2006
---------- ----------
Beginning of Period Cash (**) $ 351 $ 847
Cash provided by operating activities $ 315 $ 171
Cash provided by (used in) investing activities 6 (36)
---------- ----------
Cash flow from operating and investing activities $ 321 $ 135
Cash used in financing activities (57) (225)
Currency Translation Adjustment 1 1
---------- ----------
Total Cash Flow $ 265 $ (89)
---------- ----------
End of Period Cash (**) $ 616 $ 758
========== ==========
(**) Includes cash associated with discontinued operations.
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CMS Energy Corporation
SUMMARY OF CONSOLIDATED EARNINGS
Reconciliations of GAAP Net Loss to Non-GAAP
Adjusted Net Income
(In Millions, Except Per Share Amounts)
First Quarter
(Unaudited)
------------------------------
2007 2006
------------ ------------
NET LOSS AVAILABLE TO COMMON STOCKHOLDERS $ (215) $ (27)
Reconciling Items:
Discontinued Operations (Income) Loss 180 (8)
Asset Impairment Charges 157 --
Asset Sales (Gain) Losses and Other (28) 2
------------ ------------
Adjusted Net Income (Loss) - Non-GAAP Basis, Including MTM
of $1 in 2007 and $(74) in 2006 $ 94 $ (33)
============ ============
Average Number of Common Shares Outstanding
Basic 221 219
Diluted 221 219
BASIC EARNINGS PER AVERAGE COMMON SHARE
Loss Per Share as Reported $ (0.97) $ (0.12)
Reconciling Items:
Discontinued Operations (Income) Loss 0.81 (0.04)
Asset Impairment Charges 0.71 --
Asset Sales (Gains) Losses and Other (0.12) 0.01
------------ ------------
Adjusted Net Income (Loss) - Non-GAAP Basis, Including MTM
of $0.01 in 2007 and $(0.34) in 2006 $ 0.43 $ (0.15)
============ ============
DILUTED EARNINGS PER AVERAGE COMMON SHARE
Loss Per Share as Reported $ (0.97) $ (0.12)
Reconciling Items:
Discontinued Operations (Income) Loss 0.81 (0.04)
Asset Impairment Charges 0.71 --
Asset Sales (Gains) Losses and Other (0.12) 0.01
------------ ------------
Adjusted Net Income (Loss) - Non-GAAP Basis, Including MTM
of $0.01 in 2007 and $(0.34) in 2006 $ 0.43 $ (0.15)
============ ============
</Table>
Note: Management views adjusted (non-Generally Accepted Accounting
Principles) 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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