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CMS Energy Announces 2012 Earnings

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CMS Energy-Consumers Energy headquarters in Jackson.

CMS Energy-Consumers Energy headquarters in Jackson.

(credit: istock) Technology Report
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JACKSON — CMS Energy Thursday reported net income of $67 million, or 25 cents a share, for the fourth quarter of 2012, up from net income of $41 million, or 15 cents a share, for the same quarter of 2011. 

So-called “adjusted” net income, which excludes the effects of one-time items, also was $67 million, 25 cents a share, up from $42 million, 15 cents a share, for the same quarter in 2011.

Adjusted net income excludes gains or losses from discontinued operations, the effects of one-time court orders, the costs of a downsizing program, benefits from tax changes and restructuring costs.

For 2012, CMS Energy had reported net income of $382 million, or $1.42 per share, down from $415 million, or $1.58 per share, in 2011.  On an adjusted basis, the company had net income of $417 million, or $1.55 per share, for 2012 compared to $382 million, or $1.45 per share, for the same period in 2011.

The company’s reported net income for 2012 includes a one-time charge of $36 million, or 14 cents a share, reflecting the write-off of an electric decoupling regulatory asset at the company’s Michigan utility, Consumers Energy. The company’s 2011 reported net income included a one-time non-cash gain of $32 million, or 12 cents a share, related to the company’s non-utility operations.

Operating revenue for the quarter was $1.67 billion, up from $1.62 billion a year earlier. Operating revenue for the full year was $6.25 billion, down from $6.5 billion a year earlier.

CMS Energy provided guidance for 2013 adjusted earnings of $1.63 to $1.66 per share, consistent with the company’s long-term plan of 5 percent to 7 percent annual earnings per share growth.  The company’s reported earnings could vary from adjusted earnings because of several factors, such as legacy issues associated with prior asset sales and regulatory items from prior years.  Because of those uncertainties, the company isn’t providing reported earnings guidance.

John Russell, CMS Energy’s president and CEO, said the company’s strong financial performance in 2012 marked 10 straight years that it has met or exceeded its adjusted earnings guidance.

Russell also noted the CMS Energy Board of Directors has increased the company’s common stock dividend seven times in as many years, most recently a 6 percent increase to 25.5 cents per share or $1.02 per share on an annualized basis. The dividend increases reflect the underlying strength and successful execution of the company’s business strategy, he said, adding: “Our long-term plan calls for 5 percent to 7 percent annual earnings growth and we expect to continue to increase our dividend as we execute our successful investment strategy.”

Russell said that CMS Energy’s principal subsidiary, Consumers Energy, an electric and natural gas utility with three million customers, plans to invest about $7 billion in its operations through 2017, making it the second-largest investor in Michigan.

“We’re investing in areas that are important to our customers: reliability, renewable energy, a natural gas-fired power plant, environmental quality programs, and energy efficiency. Part of our promise to Michigan is to make investments that create jobs and boost the state’s economy. Another part of our promise to Michigan is to work hard every day to provide our customers with a good energy value,” Russell said, adding the company’s rigorous cost controls support that effort.

“In 2012, we reduced our operating costs by 2 percent and plan to cut them another 6 percent this year. Our overhead costs are the third lowest in the utility industry. There’s also good news for our gas customers. Our natural gas prices this winter dropped 10 percent from last winter’s prices and we expect to cut them another 15 percent in April.”

Russell said the company also takes seriously its responsibility to be a good corporate citizen and help strengthen Michigan.

“Consumers Energy is helping other businesses in our state grow through its $500 million commitment to the Pure Michigan Business Connect Initiative, which encourages Michigan companies to do more business with each other. That $500 million is in addition to the $2 billion a year the company already spends with Michigan companies,” he said.

The company also delivered on its promise to be a good corporate neighbor in 2012, contributing $10 million to Michigan nonprofit organizations, Russell said.  That included $1.25 million in matching grants from the Consumers Energy Foundation to support priority projects in 10 Michigan communities. The grants, which generated $2.5 million to support the projects, were part of the utility’s year-long celebration of 125 years of serving Michigan families and businesses.

In reviewing recent major events, Russell noted:
* Consumers Energy announced plans to build a major new natural gas-fired power plant. The company estimates it will invest about $750 million in the 700 megawatt plant.
* The utility’s first wind farm, the 100-megawatt Lake Winds Energy Park, has started serving customers. With Lake Winds and power from other renewable energy sources, about 8 percent of the electricity that Consumers Energy provides its customers comes from renewable sources, making it the largest renewable energy supplier in the state.

For more information on CMS Energy, visit www.cmsenergy.com.

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