UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
-------------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
April 1, 2003
Date of Report (Date of earliest event reported)
Commission Registrant; State of Incorporation; IRS Employer
File Number Address; and Telephone Number Identification No.
1-9513 CMS ENERGY CORPORATION 38-2726431
(A Michigan Corporation)
Fairlane Plaza South, Suite 1100
330 Town Center Drive
Dearborn, Michigan 48126
(313) 436-9261
1-5611 CONSUMERS ENERGY COMPANY 38-0442310
(A Michigan Corporation)
212 West Michigan Avenue
Jackson, Michigan
(517) 788-1030
1-2921 PANHANDLE EASTERN PIPE LINE 44-0382470
COMPANY
(A Delaware Corporation)
5444 Westheimer Road, P.O. Box 4967
Houston, Texas 77210-4967
(713) 989-7000
ITEM 7. EXHIBITS
(c) Exhibits:
99 - CMS Energy Corporation Press Release dated April 1, 2003.
ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION
On April 1, 2003, CMS Energy Corporation issued a Press Release in which it
announced 2002 results, reaffirmed 2003 earnings guidance, provided an update on
its financial improvement plan, and announced the completion of its 2000 and
2001 reaudit. Attached as Exhibit 99 to this report and incorporated herein by
reference is a copy of the CMS Energy Press Release.
The Press 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.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrants have duly caused this report to be signed on their behalf by the
undersigned hereunto duly authorized.
CMS ENERGY CORPORATION
Dated: April 1, 2003
/s/ Thomas J. Webb
By: --------------------------------------------
Thomas J. Webb
Executive Vice President and Chief
Financial Officer
CONSUMERS ENERGY COMPANY
Dated: April 1, 2003
/s/ Thomas J. Webb
By: --------------------------------------------
Thomas J. Webb
Executive Vice President and Chief
Financial Officer
PANHANDLE EASTERN PIPE LINE COMPANY
Dated: April 1, 2003
/s/ Thomas J. Webb
By: --------------------------------------------
Thomas J. Webb
Executive Vice President and Chief
Financial Officer
EXHIBIT 99
[CMS ENERGY LOGO] NEWS RELEASE
- --------------------------------------------------------------------------------
CMS ENERGY ANNOUNCES 2002 EARNINGS
IN LINE WITH PREVIOUS GUIDANCE
Reaffirms 2003 Outlook
Improves Liquidity by $1.4 Billion
Completes Reaudit
DEARBORN, Mich., April 1, 2003 - CMS Energy (NYSE: CMS) today announced 2002
results, reaffirmed 2003 earnings guidance, provided an update on its financial
improvement plan, and announced the completion of its 2000 and 2001 reaudit.
CMS Energy announced its 2002 results were in line with previous guidance and
include:
o A reported net loss of $620 million, or $4.46 per share, under Generally
Accepted Accounting Principles (GAAP), compared to a reported 2001
consolidated net loss of $448 million, or $3.42 per share.
o Ongoing(1) net income (non-GAAP) of $213 million or $1.53 per share
compared to $9 million or $0.08 per share for 2001.
CMS Energy reaffirmed its earnings guidance for 2003 and:
o Expects reported net income will be roughly break even, dependent largely
on the timing and proceeds from planned asset sales.
o Expects ongoing net income will be in the range of $0.80 to $0.90 per
share.
CMS Energy continues to make steady progress on its financial improvement plan
in four major areas - financings, liquidity, asset sales, and cost control.
o The Company has secured $1.4 billion in recent weeks to address debt
maturities at CMS Energy through the third quarter of 2004 and at Consumers
Energy through June 2004.
o As previously announced, the Company is maintaining a consolidated cash
balance goal of about $400 million, split between CMS Energy and Consumers
Energy. Presently, the Company expects to have cash flows that would permit
it to exceed the cash balance goal, which would provide additional
financial flexibility.
o CMS Energy also noted progress on the sale of the CMS Panhandle Companies.
The sale has been approved by the Massachusetts Department of
Telecommunications and Energy and the Missouri Public Service Commission.
CMS Energy and the buyers are continuing their efforts to gain approval
from the Federal Trade Commission. The Company remains confident that the
$1.8 billion Panhandle sale will close in the near term.
(1) Ongoing net income (non-GAAP) excludes the effects of reconciling items
identified on the attached Digest of Consolidated Earnings.
o CMS has signed agreements for or closed $3.7 billion in asset sales,
including assumed debt, over the past 15 months. The Company is in the
process of selling additional non-core assets, including the Guardian
pipeline, CMS Field Services, CMS Marketing, Services, and Trading (MST)
businesses, international distribution companies and selected power plants.
o CMS's plan includes $900 million of asset sale proceeds in 2003, including
Panhandle, and approximately $400 million of additional proceeds in 2004.
o CMS reduced its debt by $800 million in 2002.
o The Company has reduced its 2003 capital expenditures budget by $350
million, or 39 percent, from 2002. This follows a $540 million reduction in
2002 from 2001 levels.
o The Company is continuing its efforts to significantly reduce operating
expenses.
CMS Energy also announced that the reaudit of its consolidated financial results
for 2000 and 2001 has been completed and the appropriate amended forms have been
filed with the U.S. Securities Exchange Commission. CMS Energy expects the
review of the 2001 quarterly results to be completed, and updated financial
statements for those periods filed, by mid-summer.
Overall Results
The Company said 2002 reported results were a loss of $4.46 per share, largely
due to a goodwill impairment charge for Panhandle, non-cash write downs
associated with CMS Field Services, and impairments of the Dearborn Industrial
Generation project and other independent power projects.
The ongoing earnings per share were $1.53, including CMS Panhandle operating
earnings. Management believes that ongoing earnings provide a key measure of the
Company's current operating financial performance, unaffected by losses or gains
caused by net asset writedowns, impairments, sales and other items detailed in
the attached chart.
"The 2002 results and our projections for 2003 are in line with our previous
guidance. Our core businesses are operating well and we're working hard to
improve our financial results and to continue to deliver on our commitments,"
said Ken Whipple, CMS Energy's chairman and chief executive officer.
CMS Energy Corporation 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, 517/788-2394 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's 2002 And 2003
Earnings Per Share Results and Guidance
2002 2003
Actual Guidance
Reported Net Income - GAAP Basis $ (4.46) $0.00 - 0.10
Net Asset Writedowns 3.27 0.00
Discontinued Operations 1.60 (0.15)
Businesses Sold (Panhandle and Field Services) 0.46 0.00
Loss of Tax Benefits 0.80 0.00
Net Asset (Gain)/Loss and Other (0.14) 0.95
----- -----
Ongoing Net Income - Non-GAAP Basis $ 1.53 $0.80 - 0.90
CMS ENERGY CORPORATION
Digest of Consolidated Earnings
(Millions, Except Per Share Amounts)
As Restated
Year Ended December 31 2002 2001
- ---------------------- ---- ----
Operating Revenue $ 8,687 $ 8,063
Income (Loss) From Continuing Operations $ (416) $ (236)
Discontinued Operations $ (222) $ (210)
Consolidated Net Income (Loss) $ (620) $ (448)
Reconciling Items:
Asset Impairments 455 206
Discontinued Operations (Gain)/Loss 222 210
Addback Panhandle and Field Services, net 64 39
Tax Strategy Changes 111 -
Net Asset Sales (Gain) and Other (19) 2
-------- ------
Ongoing Net Income Before Reconciling Items $ 213 $ 9
======== ======
Average Number of Common Shares Outstanding
Basic 139 131
Diluted 143 135
Basic Earnings Per Average Common Share of CMS Energy:
Earnings (Loss) Per Share As Reported $ (4.46) $ (3.42)
Reconciling Items:
Asset Impairments 3.27 1.57
Discontinued Operations (Gain)/Loss 1.60 1.61
Addback Panhandle and Field Services, net 0.46 0.30
Tax Strategy Changes 0.80 -
Net Asset Sales (Gain) and Other (0.14) 0.02
-------- ------
Earnings Per Share Before Reconciling Items $ 1.53 $ 0.08
========= =========
Diluted Earnings Per Average
Common Share of CMS Energy:
2003 Guidance
-------------
Earnings (Loss) Per Share As Reported $0.00 - $0.10 $ (4.46) $ (3.42)
Reconciling Items:
Asset Impairments - 3.27 1.57
Discontinued Operations (Gain)/Loss (0.15) 1.60 1.61
Addback Panhandle and Field Services, net 0.46 0.30
Tax Strategy Changes 0.80 -
Net Asset Sales (Gain) and Other 0.95 (0.14) 0.02
------ ---------
Earnings Per Share Before Reconciling Items $0.80 - $0.90 $ 1.53 $ 0.08
============= ======== =========
Dividends Declared Per Common Share $ 1.09 $ 1.46