EX-99.1 3 k76912exv99w1.txt NEWS RELEASE DATED MAY 8, 2003 [CMS ENERGY LOGO] NEWS RELEASE -------------------------------------------------------------------------------- CMS ENERGY ANNOUNCES FIRST QUARTER EARNINGS OF 51 CENTS PER SHARE, REAFFIRMS 2003 GUIDANCE OF 80 TO 90 CENTS PER SHARE DEARBORN, Mich., May 8, 2003 - CMS Energy (NYSE: CMS) announced today first-quarter net income of $79 million or $0.51 per share, compared to net income of $42 million or $0.32 per share in the first quarter of 2002. Ongoing net income (under non-Generally Accepted Accounting Principles) was $78 million or $0.50 per share, compared to ongoing net income of $79 million or $0.60 per share in the first quarter of 2002. Management believes that ongoing earnings provide a key measure of the Company's present operating financial performance, unaffected by discontinued operations, accounting changes, net asset gains or losses, or other items detailed in the attached summary financial statements. The $0.10 decrease in ongoing earnings compared with 2002 came despite stronger utility earnings of $0.30 and a $0.25 gain from favorable foreign exchange rates. These improvements were, however, more than offset by $0.33 per share of 2002 savings not repeated in 2003 and share dilution, as well as the absence of earnings of $0.32 from businesses that have been sold. Favorable weather and excellent power cost management improved first-quarter results at CMS Energy's principal subsidiary, Consumers Energy. The utility delivered 16.4 percent more gas and 5.6 percent more electricity in the first quarter than a year earlier Based on the first quarter results and the current outlook for the year, the Company is reaffirming its earnings guidance for 2003 and expects: - Reported net income will be roughly break even, dependent largely on the timing and proceeds from planned asset sales. - Ongoing net income will be in the range of $0.80 to $0.90 per share. Ken Whipple, CMS Energy's chairman and chief executive officer, said CMS Energy has made good progress in executing its back-to-basics strategy over the past year. He noted: - CMS Energy and Consumers Energy completed $2.1 billion in financings in recent weeks, boosting liquidity and financial flexibility, cutting interest costs, and addressing debt maturities through 2004 at the parent and well into 2004 at the utility. - Liquidity remains strong, in excess of the Company's cash balance goal of about $400 million, split between the parent and the utility. - The Company is continuing its efforts to significantly reduce operating expenses. The capital expenditure budget was cut nearly 40 percent from 2001 to 2002 and will go down another 35 percent to 40 percent this year. - The asset sales program remains on track, with about $3.7 billion in asset sales, including assumed debt, completed or announced in 2002 and so far in 2003. "The focus over the past year has been to increase our financial flexibility and liquidity and implement our back-to-basics strategy. We're selling underperforming and non-core assets. Our goal is to be a smaller, stronger company with less business risk and more predictable earnings," Whipple said. "The record shows we're making good progress, but there are still many challenges ahead." Looking ahead, Whipple noted that Consumers Energy has an important regulatory agenda, with several key items before the Michigan Public Service Commission. Those items include a request to securitize Clean Air Act expenses and other costs, a gas rate increase case, and recovery of stranded costs linked to the state's electric restructuring law. CMS Energy is an integrated energy company, which has as its primary business operations an electric and natural gas utility, natural gas pipeline systems, and independent power generation. # # # For more information on CMS Energy, please visit our web site at: www.cmsenergy.com Media Contacts: Jeff Holyfield, 313/436-9253 or Dan Bishop, 517/788-2395 Investment Analyst Contact: CMS Energy Investor Relations, 517/788-2590 This news release contains "forward-looking statements" within the meaning of the safe harbor provisions of the federal securities laws. It should be read in conjunction with the forward-looking statements cautionary factors in CMS Energy's Securities and Exchange Commission filings that identify important factors that could cause CMS Energy's results to differ materially from those anticipated in such statements. CMS ENERGY CORPORATION Summary of Consolidated Earnings Condensed Consolidated Income Statements (Millions, Except Per Share Amounts)
First Quarter (Unaudited) ------------------------ 2003 2002 ------- ------- OPERATING REVENUE $ 1,992 $ 2,263 Operating Expenses 1,753 1,988 ------- ------- OPERATING INCOME 239 275 Other Income (Deductions) (2) 14 Fixed Charges 119 128 Income Taxes 41 68 Minority Interests 1 - ------- ------- INCOME FROM CONTINUING OPERATIONS 76 93 INCOME (LOSS) FROM DISCONTINUED OPERATIONS 27 (51) CUMULATIVE EFFECT OF ACCOUNTING CHANGES (24) - ------- ------- NET INCOME $ 79 $ 42 ======= ======= BASIC EARNINGS PER SHARE $ 0.55 $ 0.32 ======= ======= DILUTED EARNINGS PER SHARE $ 0.51 $ 0.32 ======= =======
CMS ENERGY CORPORATION Summary of Consolidated Earnings Reconciliations of GAAP Net Income to Non-GAAP Ongoing Net Income (Millions, Except Per Share Amounts)
First Quarter (Unaudited) -------------------------- 2003 2002 -------- -------- NET INCOME $ 79 $ 42 Reconciling Items: Discontinued Operations (Income)/Loss (27) 51 Cumulative Effect of Accounting Changes: EITF #02-03 MTM Accounting 23 - SFAS No. 143 Asset Retirement Obligations 1 - Net Asset (Gain)/Loss and Other 2 (14) -------- -------- Ongoing Net Income - Non-GAAP Basis $ 78 $ 79 ======== ======== Average Number of Common Shares Outstanding Basic 144 133 Diluted 165 138 BASIC EARNINGS PER AVERAGE COMMON SHARE OF CMS ENERGY: Earnings Per Share As Reported $ 0.55 $ 0.32 Reconciling Items: Discontinued Operations (0.18) 0.38 Cumulative Effect of Accounting Changes: EITF #02-03 MTM Accounting 0.15 0.00 SFAS No. 143 Asset Retirement Obligations 0.01 0.00 Net Asset (Gain)/Loss and Other 0.01 (0.10) -------- -------- Ongoing Net Income - Non-GAAP Basis $ 0.54 $ 0.60 ======== ======== DILUTED EARNINGS PER AVERAGE COMMON SHARE OF CMS ENERGY: Earnings Per Share As Reported $ 0.51 $ 0.32 Reconciling Items: Discontinued Operations (0.16) 0.38 Cumulative Effect of Accounting Changes: EITF #02-03 MTM Accounting 0.13 0.00 SFAS No. 143 Asset Retirement Obligations 0.01 0.00 Net Asset (Gain)/Loss and Other 0.01 (0.10) -------- -------- Ongoing Net Income - Non-GAAP Basis $ 0.50 $ 0.60 ======== ========
CMS ENERGY CORPORATION Summarized Comparative Balance Sheets (Millions of Dollars)
(Unaudited) (Unaudited) March 31 March 31 December 31 2003 2002 2002 -------- -------- -------- ASSETS Cash and cash equivalents $ 675 $ 129 $ 377 Other current assets 1,916 2,134 2,371 -------- -------- -------- Total current assets 2,591 2,263 2,748 Net plant and property 5,756 5,912 5,234 Investments 1,447 1,741 1,398 Non-current assets 4,509 5,688 4,535 -------- -------- -------- Total Assets $ 14,303 $ 15,604 $ 13,915 ======== ======== ======== STOCKHOLDERS' INVESTMENT AND LIABILITIES Capitalization Debt Long-term debt (excluding Securitization) $ 4,786 $ 5,032 $ 4,930 Capital leases 121 84 116 Short-term 253 164 458 Current portion of long-term debt and capital leases 907 710 613 -------- -------- -------- Total debt 6,067 5,990 6,117 Preferred stock and securities 927 1,228 927 Minority interest 22 24 21 Common stockholders' equity 1,228 2,080 1,133 -------- -------- -------- Total capitalization 8,244 9,322 8,198 Securitization debt 446 469 453 Current liabilities 1,589 2,085 1,800 Non-current liabilities 4,024 3,728 3,464 -------- -------- -------- Total Stockholders' Investment and Liabilities $ 14,303 $ 15,604 $ 13,915 ======== ======== ======== Memo Only: Total Debt, excluding securitization, and including Panhandle $ 7,266 $ 7,294 $ 7,317
CMS ENERGY CORPORATION Summarized Statements of Cash Flows (Millions of Dollars)
First Quarter (Unaudited) -------------------------- 2003 2002 -------- -------- Beginning of Period Cash $ 377 $ 127 -------- -------- Cash provided by operating activities $ 400 $ 249 Cash provided by (used in) investing activities (53) 794 Cash used in financing activities (50) (1,040) -------- -------- Total Cash Flow $ 297 $ 3 -------- -------- Currency Translation Adjustment $ 1 $ (1) -------- -------- End of Period Cash $ 675 $ 129 ======== ========