Aug. 7, 2002 – CMS Energy Corp. recently announced a second quarter consolidated net loss of $75 million, or $0.56 per share, compared to second quarter 2001 consolidated net income of $53 million, or $0.40 per share.

Operating net income for the second quarter was $59 million, or $0.44 per share, compared to $35 million, or $0.27 per share, in the second quarter of 2001.

Operating net income excludes the effects of non-recurring events such as gains on asset sales ($21 million or $0.16 per share), losses on discontinued operations of CMS Oil and Gas and CMS Viron ($141 million or $1.05 per share), restructuring costs ($0.06 per share) and expenses related to early debt retirement ($0.05 per share).

Operating net income reflects strong results from Consumers Energy’s electric and gas utility businesses including reduced power supply costs due to an extended refueling outage in 2001 at the Palisades nuclear plant, favorable weather effects on natural gas and electric deliveries, improved earnings at CMS Energy’s independent power plants and the benefits from mark- to-market accounting of long-term natural gas fuel supply contracts at the Midland Cogeneration Venture.

“Based on the second quarter results and the current outlook for the remainder of year, we are reaffirming our $1.50 to $1.55 per share guidance for operating net income for the full year,” said Ken Whipple, CMS Energy chairman and chief executive officer.

Second quarter operating revenue totaled $2.4 billion, versus $2.2 billion in the second quarter of 2001.

For the first six months of 2002, consolidated net income was $314 million, or $2.30 per share, compared to $162 million, or $1.25 per share in 2001. Operating net income for the same period was $134 million, or $0.99 per share, compared to $143 million, or $1.12 per share, respectively.

Operating net income excludes the effects of non-recurring events such as gains on asset sales ($35 million or $0.26 per share), income from discontinued operations ($169 million or $1.22 per share), restructuring costs ($7 million or $0.05 per share), expenses related to early debt retirement ($8 million or $0.05 per share) and a goodwill accounting change write-off ($9 million or $0.07 per share). Operating revenue for the first six months of 2002 totaled $4.8 billion compared to $5.0 billion in the first half of 2001.

Operating net income of CMS Energy’s utility business, Consumers Energy, was $58 million for the second quarter, up 100 percent from $29 million in the second quarter of 2001. Cool temperatures in May, the tenth coldest May on record in Michigan, helped to increase natural gas deliveries by 8.3 billion cubic feet during the quarter versus the second quarter of 2001.

Natural gas deliveries were 65.3 billion cubic feet, up 14.7 percent from the same period last year. Warmer-than-normal temperatures during June helped total electric deliveries for the quarter to increase by 133 gigawatt-hours versus the second quarter of last year. Electric deliveries were 9,410 gigawatt-hours, up 1.4 percent from the second quarter of 2001.

Second quarter operating net income of the natural gas transmission business was $13 million, down seven percent from $14 million in the same period last year, due to lower earnings from liquefied natural gas operations reflecting fixed contract rates compared to higher spot rates in the second quarter last year, as well as expropriation and devaluation issues in Argentina. These were partially offset by lower fixed costs reflecting debt retirement and lower operating costs.

Independent power production operating net income in the second quarter totaled $48 million, up 167 percent from $18 million in the same period last year, due to improved plant performance and increased earnings from the Midland Cogeneration Venture reflecting mark-to-market accounting for long- term natural gas fuel supply contracts, lower steam costs at the Dearborn Industrial Generation plant and higher earnings from international plants. These were partially offset by expropriation and devaluation issues in Argentina.

Marketing, services and trading reported an operating net loss in the second quarter of $18 million, as compared to operating net income of $33 million in the same period last year, primarily reflecting credit constraints which adversely affected sales contract origination and power and gas trading margins.

Significant second quarter developments in the CMS Energy asset sale program included:

* Closing of the sale of Consumers Energy’s electric transmission system for approximately $290 million to Washington, D.C.-based Trans-Elect, the first transaction of its kind in the U.S.;

* Closing of the sale of CMS Oil and Gas Company’s coal bed methane holdings in the Powder River Basin of Wyoming and Montana for $101 million to XTO Energy of Fort Worth, TX,;

* Closing of the sale of CMS Generation’s 47.5 percent equity interest in Toledo Power Co. in the Philippines for $10 million to Mirant, and;

* Announcement of a definitive agreement and letter of intent, which together provide for the sale of CMS Oil and Gas for approximately $232 million.

CMS Energy also announced it is exploring the sale of its domestic pipeline and field services businesses in order to accelerate balance sheet improvement and enhance financial flexibility.

The assets being considered for sale include the Panhandle and Trunkline interstate natural gas pipelines, the LNG receiving terminal at Lake Charles, La., CMS Field Services’ gas gathering and processing assets and CMS Energy’s one-third ownership interest in Guardian Pipeline. These are in addition to CMS Energy’s previously announced plans to sell its one-third ownership interest in Centennial Pipeline LLP, an interstate refined petroleum products pipeline.

CMS Energy Corp. is an integrated energy company, which has as its primary business operations an electric and natural gas utility, natural gas pipeline systems, independent power generation, and energy marketing, services and trading.

For more information on CMS Energy, please visit our web site at: www.cmsenergy.com.

In the opinion of Management, the above unaudited amounts reflect all adjustments necessary to assure the fair presentation of the results of operations for the periods presented.

In the opinion of Management, the above unaudited amounts reflect all adjustments necessary to assure the fair presentation of the results of operations for the periods presented.