EX-99.1 2 k09664exv99w1.txt NEWS RELEASE, DATED NOVEMBER 2, 2006 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)
Page 1 of 3 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 ===== =====
Page 2 of 3 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. Page 3 of 3