CMS Energy to sell off some overseas assets; predicts net loss

DEARBORN, Mich., Oct. 26, 2001 – CMS Energy Corp. on Friday said it would have a third-quarter net loss of $569 million and would be selling off some overseas assets to help get the business back on track.

The company plans to sell its non-strategic international power generation assets, its two South American electric distribution businesses, and its entire interest in its Equatorial Guinea oil and gas fields and methanol plant.

These planned asset sales are expected to raise about $2.4 billion in cash which, together with the utility securitization proceeds expected yet this year, will result in a total of about $2.9 billion of cash proceeds, of which about $2.1 billion is expected to be received by January 2002.

Because of the asset sales, CMS took a non-cash write-down of $613 million after taxes in the third quarter, leaving it with a net loss of $569 million, or $4.29 a share, Reuters News Service reported.

The Company also said it is committed to maintaining its common dividend at the current annual level of $1.46 per share.

CMS Energy said that it is currently negotiating definitive agreements on the sale of its interest in the Loy Yang Power facility in Australia and its interests in Equatorial Guinea for a total of about $1.2 billion. In addition, the company has executed an agreement this week to sell its Michigan electric transmission system for $290 million.

The company estimates that, as a result of proceeds from the asset sales and securitization, its total debt by year-end 2002 will be reduced to about 58 percent of capital, and will fall to about 55 percent in 2003. Consequently, the company does not expect to require any further block sales of common equity.

With respect to 2002 earnings, excluding net gains associated with the previously mentioned asset sales which are expected to be approximately $0.85 per share, the company forecasts earnings per share from operations to be in the range of $2.00 to $2.05. The forecast for earnings per share from operations reflects the substantially lower current oil and gas commodity prices, a reduction in earnings due to the sale of assets to strengthen the balance sheet, and forecasted lower utility sales to commercial and industrial users due to the weak economy.

With respect to earnings beyond 2002, the company expects to be able to grow earnings per share (excluding any gains on asset sales) by seven percent to nine percent with growth principally in electric and gas marketing, exploration and production, pipelines, midstream and liquefied natural gas receiving and processing.

CMS Energy Corporation has annual sales of $15 billion and assets of $16 billion throughout the U.S. and in selected foreign markets with businesses in electric and natural gas utility operations; independent power production; natural gas pipelines, gathering, processing and storage; LNG importation; oil and gas exploration and production; and energy marketing, services and trading.

For more information on CMS Energy, please visit the web site at: .

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