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CMS ENERGY CORP Annual Report, Year Ended Dec 31, 1996

Filing Date
Filed March 14, 1997
Period End
December 31, 1996
In the record · 2016–202610-K1110-Q328-K151

CMS filed 11 annual reports (10-K), 32 quarterly reports (10-Q) and 151 current reports (8-K) between 2016 and 2026.

  1. Material agreement8-K · Aug ’17Aug ’17
  2. Restructuring8-K · Oct ’19Oct ’19
  3. Material agreement8-K · Jul ’21Jul ’21
  4. Leadership change8-K · Jun ’25Jun ’25

01—Abstract

Summary

Summary of the 10-K filed March 14, 1997. Cited figures are marked; the original filing is the authoritative source.

CMS Energy Corporation and its principal subsidiary Consumers Energy Company filed a combined 10-K for fiscal 1996.

CMS Energy reported 1996 consolidated net income of $240 milliona, up from $204 million in 1995, and earnings per average CMS Energy common share of $2.45 (vs. $2.27). Operating revenue rose to $4.33 billion (vs. $3.89 billion), with roughly 57% from electric utility operations. Growth was driven by an electric rate increase, higher electric sales, gas deliveries, and contributions from non-utility businesses such as independent power production, oil and gas, and gas transmission.

Consumers, the regulated utility, reported net income of $296 millionb and net income available to common of $260 million, and it remains the core of the business. The filing highlights a balance-sheet and regulatory agenda for investors. CMS Energy must redeem or retire $1.9 billion of long-term debt through 1999, and Consumers' common dividends were suspended from mid-1995 until early 1996 to improve the capital structure.

Management also outlines a $2.7 billionc capital expenditure plan over 1997-1999, with heavy investment in international energy distribution, independent power, and oil and gas. Key uncertainties include the MPSC's electric industry restructuring proposal (direct access, transition cost recovery, and possible securitization of about $4 billion in rate reduction bonds), the MCV Partnership power purchase obligation with its associated cash underrecoveries, the DOE's delayed acceptance of spent nuclear fuel, and ongoing PUHCA exemption challenges.

For investors, the 1996 results show a healthier earnings trajectory and a rising dividend, with CMS Energy's annualized dividend increased to $1.08d per common share. Offsetting these positives are a leveraged capital structure, rapid expansion into riskier international and merchant power projects, and regulatory and legislative risk in Michigan's utility market.

02—Key points

Key Highlights

  1. Consolidated net income rose 18% to $240 million in 1996 from $204 million in 1995; CMS Energy common EPS was $2.45 versus $2.27.
  2. Operating revenue reached $4.33 billion, up 11% from $3.89 billion, with electric utility operations contributing about 57% of revenue.
  3. The annualized dividend on CMS Energy Common Stock was raised 12.5% to $1.08 per share in July 1996 after a mid-1995 suspension at Consumers.
  4. CMS Energy must retire or redeem $1.9 billion of long-term debt over 1997-1999, with operating cash flow expected to fund much of it.
  5. Planned 1997-1999 capital expenditures total $2.7 billion, weighted toward independent power, oil and gas, and international energy distribution.
  6. Michigan electric restructuring (MPSC staff report) could introduce direct access and about $4 billion in securitized rate reduction bonds, a major structural change for Consumers.
  7. Balance-sheet cash underrecoveries from the MCV Partnership PPA (about $20-28 million per year after tax through 2001) and the DOE's failure to accept spent fuel by 1998 are ongoing risks.

03—Questions

Frequently Asked Questions

  1. How did CMS Energy perform financially in 1996?

    Consolidated net income increased to $240 million from $204 million, and CMS Energy common EPS rose to $2.45 from $2.27. Operating revenue grew to $4.33 billion from $3.89 billion. Results were driven mainly by an electric rate increase, higher electric sales and gas deliveries, and improved results at non-utility subsidiaries.

  2. What is the relationship between CMS Energy and Consumers Energy?

    CMS Energy is the parent holding company. Consumers Energy, its principal subsidiary, is a combination electric and gas utility serving most of Michigan's Lower Peninsula and accounts for the majority of CMS Energy's assets, revenue, and income. Enterprises, the other major subsidiary, houses CMS Energy's non-utility businesses, including oil and gas, independent power, and international energy distribution.

  3. What are the major risks to investors in this filing?

    Key risks include regulatory and legislative uncertainty in Michigan electric restructuring, including the transition-cost and securitization outcome; the MCV Partnership power purchase commitment, which generates cash underrecoveries and could require additional losses if the facility performs above management's estimates; the DOE's delay in accepting spent nuclear fuel; a $1.9 billion debt retirement schedule through 1999; and the expansion into riskier international and independent power projects.

  4. Is CMS Energy's dividend growing, and is it covered by earnings?

    The Board raised the annualized dividend on CMS Energy Common Stock to $1.08 per share from $0.96 in 1996, a 12.5% increase, and declared a $0.27 quarterly dividend in January 1997. With 1996 CMS Energy net income of $226 million attributable to common stock, earnings coverage appears adequate, though the filing notes that dividend levels depend on earnings and financial condition.

04—Continue

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