CMS Energy 1998 Annual Report : Financial Report

Consolidated Statements of Income

In Millions, Except Per Share Amounts
Years Ended December 31			1998	1997	1996

Operating Revenue	Electric utility		$2,606	$2,515	$2,446
	Gas utility		1,051	1,204	1,282
	Independent power production^(a)		277	168	140
	Natural gas transmission, storage and processing^(a)		160	96	53
	Oil and gas exploration and production		63	93	130
	Marketing, services and trading^(a)		939	692	258
	Other^(a)		45	13	15

			5,141	4,781	4,324

Operating Expenses	Operation
	Fuel for electric generation		359	319	312
	Purchased power-related parties		573	599	589
	Purchased and interchange power		584	265	202
	Cost of gas sold		1,212	1,311	997
	Other		763	719	742

			3,491	3,213	2,842
	Maintenance		176	174	178
	Depreciation, depletion and amortization		484	467	427
	General taxes		215	211	201

			4,366	4,065	3,648

Pretax Operating Income (Loss)	Electric utility		475	432	411
	Gas utility		126	153	158
	Independent power production		144	96	68
	Natural gas transmission, storage and processing		33	27	17
	Oil and gas exploration and production		6	26	33
	Marketing, services and trading		4	(5)	2
	Other		(13)	(13)	(13)

			775	716	676

Other Income (Deductions)	Loss on MCV power purchases		(37)	--	--
	Accretion income		6	8	10
	Accretion expense		(16)	(17)	(22)
	Other, net		1	(3)	1

			(46)	(12)	(11)

Fixed Charges	Interest on long-term debt		318	273	230
	Other interest		47	49	43
	Capitalized interest		(29)	(13)	(5)
	Preferred dividends		19	25	28
	Trust Preferred Securities distributions		32	18	8

			387	352	304

Income Before Income Taxes			342	352	361
Income Taxes			100	108	137

Consolidated Net Income before Cumulative Effect of Change in Accounting Principle			242	244	224
Cumulative Effect of Change in Accounting for Property Taxes, Net of $23 Tax			43	--	--

Consolidated Net Income			$285	$244	$224

Net Income Attributable to Common Stocks		CMS Energy	$272	$229	$210
Net Income Attributable to Common Stocks		Class G	$13	$15	$14

Basic Earnings Per Average Common Share		CMS Energy	$2.65	$2.39	$2.27
Basic Earnings Per Average Common Share		Class G	$1.56	$1.84	$1.82

Diluted Earnings Per Average Common Share		CMS Energy	$2.62	$2.37	$2.26
Diluted Earnings Per Average Common Share		Class G	$1.56	$1.84	$1.82

Dividends Declared Per Common Share		CMS Energy	$1.26	$1.14	$1.02
Dividends Declared Per Common Share		Class G	$1.27	$1.21	$1.15

^{(a) Does not include revenue associated with CMS' interests in unconsolidated partnerships. For 1998, 1997 and 1996, that revenue totaled $761 million, $621 million and $493 million, respectively, for independent power production; and $67 million, $51 million and $42 million, respectively, for natural gas transmission, storage and processing; and $198 million, $39 million and $22 million, respectively, for international energy distribution, which is reported in Other. For 1998 and 1997, that revenue totaled $291 million and $202 million, respectively, for marketing, services and trading.} The accompanying notes are an integral part of these statements.

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