CMS Energy Corporation


FORWARD-LOOKING STATEMENTS AND RISK FACTORS

The MD&A of this Form 10-Q should be read along with the MD&A and other parts of
CMS Energy's 2001 Form 10-K. This MD&A refers to, and in some sections
specifically incorporates by reference, CMS Energy's Condensed Notes to
Consolidated Financial Statements and should be read in conjunction with such
Consolidated Financial Statements and Notes. This Form 10-Q and other written
and oral statements that CMS Energy may make contain forward-looking statements
as defined by the Private Securities Litigation Reform Act of 1995. CMS Energy's
intentions with the use of the words "anticipates," "believes," "estimates,"
"expects," "intends," and "plans," and variations of such words and similar
expressions, are solely to identify forward-looking statements that involve risk
and uncertainty. These forward-looking statements are subject to various factors
that could cause CMS Energy's actual results to differ materially from the
results anticipated in such statements. CMS Energy has no obligation to update
or revise forward-looking statements regardless of whether new information,
future events or any other factors affect the information contained in such
statements. CMS Energy does, however, discuss certain risk factors,
uncertainties and assumptions in this MD&A and in Item 1 of the 2001 Form 10-K
in the section entitled "CMS Energy, Consumers, and Panhandle Forward-Looking
Statements Cautionary Factors and Uncertainties" and in various public filings
it periodically makes with the SEC. In addition to any assumptions and other
factors referred to specifically in connection with such forward-looking
statements, there are numerous factors that could cause our actual results to
differ materially from those contemplated in any forward-looking statements.
Such factors include our inability to predict and/or control:

-        Results of the re-audit of CMS Energy, Consumers, Panhandle and certain
         of their subsidiaries by Ernst & Young and the subsequent restatement
         of CMS Energy's, Consumers', Panhandle's and certain of their
         subsidiaries' financial statements;
-        The efficient sale of non-strategic and under-performing international
         assets and discontinuation of our international energy distribution
         systems;
-        Achievement of operating synergies and revenue enhancements;
-        Capital and financial market conditions, including current price of CMS
         Energy's Common Stock, interest rates and availability of financing to
         CMS Energy, Consumers, Panhandle or any of their affiliates and the
         energy industry;
-        CMS Energy, Consumers, Panhandle or any of their affiliates' securities
         ratings;
-        Market perception of the energy industry, CMS Energy, Consumers,
         Panhandle or any of their affiliates;
-        Ability to successfully access the capital markets;
-        Currency fluctuations and exchange controls;
-        Factors affecting utility and diversified energy operations such as
         unusual weather conditions, catastrophic weather-related damage,
         unscheduled generation outages, maintenance or repairs, unanticipated
         changes to fossil fuel, nuclear fuel or gas supply costs or
         availability due to higher demand, shortages, transportation problems
         or other developments, environmental incidents, or electric
         transmissions or gas pipeline system constraints;
-        International, national, regional and local economic, competitive and
         regulatory conditions and developments;



                                     CMS-1

                                                          CMS Energy Corporation


-        Adverse regulatory or legal decisions, including environmental laws and
         regulations;
-        Federal regulation of electric sales and transmission of electricity
         including re-examination by Federal regulators of the market-based
         sales authorizations by which our subsidiaries participate in wholesale
         power markets without price restrictions and proposals by FERC to
         change the way it currently lets our subsidiaries and other public
         utilities and natural gas companies interact with each other;
-        Energy markets, including the timing and extent of unanticipated
         changes in commodity prices for oil, coal, natural gas liquids,
         electricity and certain related products due to lower or higher demand,
         shortages, transportation problems or other developments;
-        The increased competition of new pipeline and pipeline expansion
         projects that transport large additional volumes of natural gas to the
         Midwestern United States from Canada, which could reduce the volumes of
         gas transported by our natural gas transmission business or cause them
         to lower rates in order to meet competition;
-        Potential disruption, expropriation or interruption of facilities or
         operations due to accidents, war and terrorism or political events and
         the ability to get or maintain insurance coverage for such events;
-        Nuclear power plant performance, decommissioning, policies, procedures,
         incidents, and regulation, including the availability of spent nuclear
         fuel storage;
-        Technological developments in energy production, delivery and usage;
-        Changes in financial or regulatory accounting principles or policies;
-        Outcome, cost and other effects of legal and administrative
         proceedings, settlements, investigations and claims, including
         particularly claims, damages and fines resulting from those involving
         round-trip trading;
-        Limitations on our ability to control the development or operation of
         projects in which our subsidiaries have a minority interest;
-        Disruptions in the normal commercial insurance and surety bond markets
         that may increase costs or reduce traditional insurance coverage,
         particularly terrorism and sabotage insurance and performance bonds;
-        Other business or investment considerations that may be disclosed from
         time to time in CMS Energy's, Consumers' or Panhandle's SEC filings or
         in other publicly disseminated written documents; and
-        Other uncertainties, which are difficult to predict and many of which
         are beyond our control.

CMS Energy designed this discussion of potential risks and uncertainties, which
is by no means comprehensive, to highlight important factors that may impact CMS
Energy's business and financial outlook.




                                     CMS-2