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JACKSON, Mich., Aug 04, 2005 /PRNewswire-FirstCall via COMTEX/ -- CMS Energy (CMS, Trade) announced today second quarter net income of $27 million, or $0.12 per share, compared to net income of $16 million, or $0.10 per share, in the same quarter of 2004.

The second quarter 2005 results include income tax benefits of $24 million available this year under the American Jobs Creation Act and higher electric deliveries at CMS Energy's principal subsidiary, Consumers Energy, because of warmer than normal summer temperatures. Those were offset partially by mark- to-market adjustments related to interest rate and gas price hedging derivative instruments.

For the first half of 2005, CMS Energy reported net income of $177 million, or $0.82 per share, up from $7 million, or $0.04 per share, for the comparable period of 2004. Major differences in net income between the two periods are higher mark-to-market gains in 2005 of $43 million, or $0.26 per share, and impairment and other charges in 2004 of $85 million, or $0.53 per share. (All per share figures are on a diluted basis.)

CMS Energy said it is increasing both its reported and adjusted 2005 earnings guidance from about $0.90 per share to about $0.95 per share, based on results for the first two quarters and a stronger second-half forecast.

"Our utility-plus strategy and focus on our core business, Consumers Energy, continue to show positive results, assisted by good performance from our CMS Enterprises businesses," said CMS Energy's Chief Executive Officer David Joos.

The Company's recent highlights include:

* An International Centre for the Settlement of Investment Disputes tribunal found in favor of CMS Energy's subsidiary, CMS Gas Transmission, in its claim against Argentina. The tribunal, which operated under the auspices of the World Bank, awarded $133 million in compensation, plus interest, which could increase the total to $150 million. However, the government of Argentina is contesting the claim and award.

* The unions representing operations, maintenance, and construction employees and call center employees have ratified new five-year contracts with Consumers Energy.

* Settlement of a shareholder derivative lawsuit linked to round-trip energy trading. The settlement, which remains subject to court approval, eliminates a major legal uncertainty for the Company.

* The Jubail Cogeneration Plant, of which CMS Energy holds a 25 percent interest, began commercial operation on June 23. The plant -- the first independent power plant in Saudi Arabia -- can produce up to 250 megawatts of power and 510 tons of industrial steam per hour. The entire output of the plant is under a long-term contract.

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.

CMS Energy provides financial results and earnings guidance on both a reported (Generally Accepted Accounting Principles) 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 or other items detailed in the attached summary financial statements.

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 March 31, 2005 (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: http://www.cmsenergy.com


CMS Energy Corporation
SUMMARY OF CONSOLIDATED EARNINGS
Condensed Consolidated Income Statements
(Millions, Except Per Share Amounts)
Second Quarter First Half
(Unaudited) (Unaudited)
2005 2004 2005 2004
Operating Revenue $1,241 $1,093 $3,086 $2,847
Earnings from Equity Method
Investees 21 41 52 60
Operating Expenses 1,167 986 2,592 2,489
Asset Impairment Charges - - - 125
Operating Income $95 $148 $546 $293
Other Income (Deductions) 29 12 53 22
Fixed Charges 133 147 269 296
Income (Loss) before Minority
Interests $(9) $13 $330 $19
Minority Interests (14) 1 99 12
Income before Income Taxes $5 $12 $231 $7
Income Tax Expense (Benefit) (25) (7) 49 (10)
Income from Continuing Operations $30 $19 $182 $17
Loss from Discontinued Operations - - - (2)
Cumulative Effect of Accounting
Changes - - - (2)
Net Income $30 $19 $182 $13
Preferred Dividends 3 3 5 6
Net Income Available to Common Stock $27 $16 $177 $7
Earnings Per Share
Basic $0.12 $0.10 $0.86 $0.04
Diluted 0.12 0.10 0.82 0.04
CMS Energy Corporation
SUMMARIZED COMPARATIVE BALANCE SHEETS
(Millions of Dollars)
June 30 December 31
2005 2004
(Unaudited)
Assets
Cash and cash equivalents $1,013 $669
Restricted cash 67 56
Short-term investments - 109
Other current assets 2,213 2,165
Total current assets $3,293 $2,999
Net plant and property 8,834 8,742
Investments 711 752
Non-current assets 3,623 3,379
Total assets $16,461 $15,872
Stockholders' Investment
and Liabilities
Capitalization
Debt, capital and finance and
leases (*)
Long-term debt and capital
leases (excluding
FIN 46 debt, finance leases
and securitization debt) $6,093 $5,960
FIN 46 debt and finance leases 1,004 1,381
Total debt, capital and finance
leases $7,097 $7,341
Preferred stock and securities 305 305
Minority interest 844 733
Common stockholders' equity 2,534 2,072
Total capitalization $10,780 $10,451
Securitization debt 384 398
Current liabilities 1,278 1,279
Non-current liabilities 4,019 3,744
Total Stockholders' Investment and
Liabilities $16,461 $15,872
(*) Current and long-term
CMS Energy Corporation
SUMMARIZED STATEMENTS OF CASH FLOWS
(Millions of Dollars)
First Half
(Unaudited)
2005 2004
Beginning of Period Cash $669 $532
Cash and Cash Equivalents from FIN 46
Implementation $- $174
Cash provided by operating activities $506 $478
Cash used in investing activities (136) (403)
Cash flow from operating and
investing activities $370 $75
Cash used in financing activities (27) (276)
Currency Translation Adjustment 1 (1)
Total Cash Flow $344 $(202)
End of Period Cash $1,013 $504
CMS Energy Corporation
SUMMARY OF CONSOLIDATED EARNINGS
Reconciliations of GAAP Net Income to Non-GAAP Adjusted Net Income
(Millions, Except Per Share Amounts)
Second Quarter First Half
(Unaudited) (Unaudited)
2005 2004 2005 2004
Net Income Available to Common Stock $27 $16 $177 $7
Reconciling Items:
Discontinued Operations Loss - - - 2
Cumulative Effect of Change in
Accounting for Retirement
Benefits - - - 2
Net Asset Sales (Gains) Losses,
Writedowns and Other - - (2) 81
Adjusted Net Income - Non-GAAP Basis $27 $16 $175 $92
Average Number of Common Shares
Outstanding
Basic 218 161 207 161
Diluted 229 164 216 162
Basic Earnings Per Average Common
Share
Earnings Per Share as Reported $0.12 $0.10 $0.86 $0.04
Reconciling Items:
Discontinued Operations Loss - - - 0.01
Cumulative Effect of Change in
Accounting for Retirement
Benefits - - - 0.01
Net Asset Sales (Gains) Losses,
Writedowns and Other - - (0.01) 0.51
Adjusted Net Income - Non-GAAP Basis $0.12 $0.10 $0.85 $0.57
Diluted Earnings Per Average Common
Share
Earnings Per Share as Reported $0.12 $0.10 $0.82 $0.04
Reconciling Items:
Discontinued Operations Loss - - - 0.01
Cumulative Effect of Change in
Accounting for Retirement
Benefits - - - 0.01
Net Asset Sales (Gains) Losses,
Writedowns and Other - - (0.01) 0.51
Adjusted Net Income - Non-GAAP Basis $0.12 $0.10 $0.81 $0.57

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 or other items detailed in these summary financial statements.

SOURCE CMS Energy


Media Contacts: Jeff Holyfield, +1-517-788-2394, or Dan Bishop, +1-517-788-2395, both
of CMS Energy, or Investment Analyst Contact: CMS Energy Investor Relations,
+1-517-788-2590

http://www.prnewswire.com

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