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Selected Unaudited Proportionate Data
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In Millions |
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Years Ended December 31 |
1998 |
1997 |
1996 |
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Operating revenue |
$6,358 |
$5,672 |
$4,809 |
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Operating expenses |
5,238 |
4,746 |
4,005 |
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Pretax operating income |
1,120 |
926 |
804 |
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Fixed charges (a) |
638 |
538 |
427 |
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Other income (expenses), net |
(24) |
(7) |
1 |
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Income before income taxes |
458 |
381 |
378 |
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Income taxes |
173 |
137 |
154 |
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Net income |
$285 |
$244 |
$224 |
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Operating cash flow (b) |
$1,724 |
$1,505 |
$1,319 |
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(a) Fixed charges include interest on long-term debt, preferred dividends, and Trust Preferred Securities' distributions less capitalized interest.
(b) Pretax operating income plus depreciation and amortization.
Because significant 50 percent or less owned investments of CMS Energy are not consolidated, CMS Energy believes that the discussion below of certain proportionate data enhances an understanding and assessment of its results of operations. The table above sets forth the major components of CMS Energy's net income for each of the last three years on a proportionate accounting basis. Proportionate accounting reflects CMS Energy's pro rata ownership interest in its energy projects and investments. Except for certain industries, proportionate accounting is not in accordance with generally accepted accounting principles.
Of the $686 million increase in 1998 operating revenue, $169 million (25 percent) is attributable to operating revenue from 1998 investments by the international energy distribution segment, and an increase of $161 million (23 percent) in revenue associated with investments made in 1997 (CMS Generation's Loy Yang and Jorf Lasfar projects, and CMS MST's Texon acquisition). The $492 million increase in operating expenses includes $123 million (25 percent) related to 1998 international energy investments and $100 million (20 percent) associated with increases in cost related to the 1997 investments previously described. The $100 million increase in fixed charges includes $33 million (33 percent) of interest charges associated with new international energy investments and an increase of $45 million (45 percent) in interest charges relating to Loy Yang and Jorf Lasfar.
Of the $863 million increase in 1997 operating revenue, $350 million (40 percent) is attributable to operating revenue from investments in 1997 (Loy Yang, Jorf Lasfar and Texon). The $741 million increase in operating expenses includes a $271 million (36 percent) increase in expenses for these same three 1997 investments. The $111 million increase in fixed charges includes $60 million (54 percent) of interest charges associated with Loy Yang and Jorf Lasfar.
For further information, refer to the Management's Discussion and Analysis.
Return to the CMS Energy 1998 Financial Report Table of Contents