FORM 11-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from _____________ to _______________
Commission file number 1-9513
EMPLOYEES' SAVINGS & INCENTIVE PLAN OF
CONSUMERS ENERGY COMPANY
212 West Michigan Avenue
Jackson, Michigan 49201
(Full title of the Plan and address of the Plan, if
different from that of the issuer named below)
CMS ENERGY CORPORATION
Fairlane Plaza South, Suite 1100
330 Town Center Drive
Dearborn, Michigan 48126
(Name of Issuer of the Securities held
pursuant to the Plan and the address
of its principal executive office)<PAGE>
EMPLOYEES' SAVINGS & INCENTIVE PLAN OF
CONSUMERS ENERGY COMPANY
FINANCIAL STATEMENTS AS OF DECEMBER 31, 1997 AND 1996
TOGETHER WITH AUDITORS' REPORT
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Employees' Savings & Incentive Plan of Consumers Energy Company:
We have audited the accompanying statements of financial position
of the EMPLOYEES' SAVINGS & INCENTIVE PLAN OF CONSUMERS ENERGY
COMPANY (the "Plan") as of December 31, 1997 and 1996, and the
related statements of changes in members' equity for each of the
three years in the period ended December 31, 1997. These
financial statements and the schedules referred to below are the
responsibility of the Plan administrator. Our responsibility is
to express an opinion on these financial statements and schedules
based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by the Plan administrator, as well as
evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of the Plan as of December 31, 1997 and 1996, and the changes in
members' equity for each of the three years in the period ended
December 31, 1997, in conformity with generally accepted
accounting principles.
Our audits were made for the purpose of forming an opinion on the
basic financial statements taken as a whole. The supplemental
schedules of assets held for investment purposes as of December
31, 1997 and reportable transactions for the year ended December
31, 1997 are presented for purposes of additional analysis and
are not a required part of the basic financial statements but are
supplementary information required by the Department of Labor's
Rules and Regulations for Reporting and Disclosure under the
Employee Retirement Income Security Act of 1974. The fund
information in the statement of financial position and the
statement of changes in members' equity is presented for purposes
of additional analysis rather than to present the statement of
financial position and statement of changes in members' equity of
each fund. The supplemental schedules and fund information have
been subjected to the auditing procedures applied in the audit of
the basic financial statements and, in our opinion, are fairly
stated in all material respects in relation to the basic
financial statements taken as a whole.
ARTHUR ANDERSEN LLP
Detroit, Michigan,
June 23, 1998.
EMPLOYEES' SAVINGS & INCENTIVE PLAN OF
CONSUMERS ENERGY COMPANY
INDEX TO FINANCIAL
STATEMENTS AND SCHEDULES
STATEMENTS OF CHANGES IN MEMBERS' EQUITY FOR EACH OF THE THREE
YEARS IN THE
PERIOD ENDED DECEMBER 31, 1997
STATEMENTS OF FINANCIAL POSITION AS OF DECEMBER 31, 1997 AND 1996
NOTES TO FINANCIAL STATEMENTS
SCHEDULE I - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AS
OF
DECEMBER 31, 1997
SCHEDULE II - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
EXHIBIT A - CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
<TABLE>
EMPLOYEES' SAVINGS & INCENTIVE PLAN OF
CONSUMERS ENERGY COMPANY
STATEMENTS OF CHANGES IN MEMBERS' EQUITY
(Continued on Following Page)
<CAPTION>
For the Year Ended December 31, 1997
---------------------------------------------------------------------
Total Fund A Fund B Fund C
------------- ------------- ------------- ------------
<S> <C> <C> <C> <C>
MEMBERS' EQUITY -
BEGINNING OF PERIOD $479,029,108 $103,161,653 $130,874,122 $182,697,354
------------ ------------ ------------ ------------
CHANGES DURING PERIOD:
Members' contributions
(Note 1) 36,441,668 8,691,695 17,300,176 2,706,251
Employers' contributions
(Note 1) 18,658,274 - - 18,658,274
Reallocation of Members'
contributions (Note 1) - (4,588,693) 9,854,306 (5,956,210)
Interfund transfers - (1,039,844) 46,735 (1,729,320)
------------- ------------- ------------- -------------
55,099,942 3,063,158 27,201,217 13,678,995
------------- ------------- ------------- -------------
Investment income 22,030,770 6,517,272 3,144,374 6,218,927
Interest income 1,570,189 - - -
Income from short-term
investments 867,306 562,281 248,254 31,236
Gain (loss) on securities
sold or distributed
(Note 2) 27,746,407 - 24,106,588 3,609,663
Change in unrealized
appreciation (depreciation)
of investments (Note 2) 69,522,533 - 16,010,288 54,445,827
------------- ------------- ------------- -------------
121,737,205 7,079,553 43,509,504 64,305,653
------------- ------------- ------------- -------------
Distribution to Members (28,411,275) (8,208,714) (8,581,832) (9,700,793)
------------- ------------- ------------- -------------
Net change during period 148,425,872 1,933,997 62,128,889 68,283,855
------------- ------------- ------------- -------------
MEMBERS' EQUITY -
END OF PERIOD $627,454,980 $105,095,650 $193,003,011 $250,981,209
============= ============= ============= =============
Value per unit $12.6736 $26.7185 $9.0128
============ ============ ============
<FN>
The accompanying notes are an integral part of these statements.
</TABLE>
<TABLE>
EMPLOYEES' SAVINGS & INCENTIVE PLAN OF
CONSUMERS ENERGY COMPANY
STATEMENTS OF CHANGES IN MEMBERS' EQUITY
(Continued from Preceding Page)
<CAPTION>
For the Year Ended December 31, 1997
----------------------------------------------------------------------
Fund D Fund E Fund F Fund G
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
MEMBERS' EQUITY -
BEGINNING OF PERIOD $ 24,286,037 $ 22,092,493 $ 13,566,347 $ 2,351,102
------------- ------------- ------------- -------------
CHANGES DURING PERIOD:
Members' contributions
(Note 1) - 4,547,027 2,696,067 500,452
Employers' contributions
(Note 1) - - - -
Reallocation of Members'
contributions (Note 1) - 196,159 (109,925) 604,363
Interfund transfers 2,059,905 366,374 225,170 70,980
------------- ------------- ------------- -------------
2,059,905 5,109,560 2,811,312 1,175,795
------------ ------------ ------------- -------------
Investment income - - 419 147,794
Interest income 1,570,189 - - -
Income from short-term
investments - 11,756 9,814 3,965
Gain (loss) on securities
sold or distributed
(Note 2) - 12,969 - 17,187
Change in unrealized
appreciation (depreciation)
of investments (Note 2) - 4,000,783 (149,281) 1,216,900
------------- ------------- ------------- -------------
1,570,189 4,025,508 (139,048) 1,385,846
------------- ------------- ------------- -------------
Distribution to Members - (1,130,615) (702,542) (86,779)
------------- ------------- ------------- -------------
Net change during period 3,630,094 8,004,453 1,969,722 2,474,862
------------- ------------- ------------- -------------
MEMBERS' EQUITY -
END OF PERIOD $ 27,916,131 $ 30,096,946 $ 15,536,069 $ 4,825,964
============= ============= ============= =============
Value per unit $1.7541 $1.3012 $1.6731
============ ============ ============
<FN>
The accompanying notes are an integral part of these statements.
</TABLE>
<TABLE>
EMPLOYEES' SAVINGS & INCENTIVE PLAN OF
CONSUMERS ENERGY COMPANY
STATEMENTS OF CHANGES IN MEMBERS' EQUITY
(Continued on Following Page)
<CAPTION>
For the Year Ended December 31, 1996
----------------------------------------------------------------------
Total Fund A Fund B Fund C
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
MEMBERS' EQUITY -
BEGINNING OF PERIOD $392,990,758 $ 97,817,526 $100,622,058 $157,707,920
------------- ------------- ------------- -------------
CHANGES DURING PERIOD:
Members' contributions
(Note 1) 34,758,408 10,122,157 16,170,021 2,518,449
Employers' contributions
(Note 1) 17,070,684 - - 17,070,684
Reallocation of Members'
contributions (Note 1) - (2,320,711) (563,626) (9,658,589)
Interfund transfers - (1,498,849) (254,103) (1,942,153)
------------- ------------- ------------- ------------
51,829,092 6,302,597 15,352,292 7,988,391
------------- ------------- ------------- -------------
Investment income 14,306,964 6,249,786 2,699,058 5,346,122
Interest income 1,464,552 - - -
Income from short-term
investments 649,794 359,066 113,244 37,599
Gain (loss) on securities
sold or distributed
(Note 2) 17,273,666 (67,895) 14,303,154 1,679,666
Change in unrealized
appreciation (depreciation)
of investments (Note 2) 23,818,783 527 4,009,484 18,199,135
------------- ------------- ------------- -------------
57,513,759 6,541,484 21,124,940 25,262,522
------------- ------------- ------------- ------------
Distribution to Members (23,304,501) (7,499,954) (6,225,168) (8,261,479)
------------- ------------- ------------- -------------
Net change during period 86,038,350 5,344,127 30,252,064 24,989,434
------------- ------------- ------------- -------------
MEMBERS' EQUITY -
END OF PERIOD $479,029,108 $103,161,653 $130,874,122 $182,697,354
============= ============= ============= =============
Value per unit $11.8445 $20.3259 $6.6609
============ ============ ============
<FN>
The accompanying notes are an integral part of these statements.
</TABLE>
<TABLE>
EMPLOYEES' SAVINGS & INCENTIVE PLAN OF
CONSUMERS ENERGY COMPANY
STATEMENTS OF CHANGES IN MEMBERS' EQUITY
(Continued from Preceding Page)
<CAPTION>
For the Year Ended December 31, 1996
----------------------------------------------------------------------
Fund D Fund E Fund F Fund G
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
MEMBERS' EQUITY -
BEGINNING OF PERIOD $ 19,934,467 $ 9,757,131 $ 5,564,128 $ 1,587,528
------------- ------------- ------------- -------------
CHANGES DURING PERIOD:
Members' contributions
(Note 1) - 3,467,787 1,991,215 488,779
Employers' contributions
(Note 1) - - - -
Reallocation of Members'
contributions (Note 1) - 7,188,580 5,103,638 250,708
Interfund transfers 2,887,018 455,419 267,389 85,279
------------- ------------ ------------- -------------
2,887,018 11,111,786 7,362,242 824,766
------------- ------------- ------------- -------------
Investment income - - 9,720 2,278
Interest income 1,464,552 - - -
Income from short-term
investments - 10,239 6,760 122,886
Gain (loss) on securities
sold or distributed
(Note 2) - 1,358,737 - 4
Change in unrealized
appreciation (depreciation)
of investments (Note 2) - 636,810 1,013,605 (40,778)
------------- ------------- ------------- -------------
1,464,552 2,005,786 1,030,085 84,390
------------- ------------- ------------- -------------
Distribution to Members - (782,210) (390,108) (145,582)
------------- ------------- ------------- -------------
Net change during period 4,351,570 12,335,362 8,002,219 763,574
------------- ------------- ------------- -------------
MEMBERS' EQUITY -
END OF PERIOD $ 24,286,037 $ 22,092,493 $ 13,566,347 $ 2,351,102
============= ============= ============= =============
Value per unit $1.5014 $1.3027 $1.0921
============ ============ ============
<FN>
The accompanying notes are an integral part of these statements.
</TABLE>
<TABLE>
EMPLOYEES' SAVINGS & INCENTIVE PLAN OF
CONSUMERS ENERGY COMPANY
STATEMENTS OF CHANGES IN MEMBERS' EQUITY
(Continued on Following Page)
<CAPTION>
For the Year Ended December 31, 1995
----------------------------------------------------------------------
Total Fund A Fund B Fund C
------------- ------------ ------------- -------------
<S> <C> <C> <C> <C>
MEMBERS' EQUITY -
BEGINNING OF PERIOD $278,895,087 $87,616,045 $ 64,543,489 $110,588,248
------------- ----------- ------------ ------------
CHANGES DURING PERIOD:
Members' contributions
(Note 1) 34,525,422 12,475,089 15,387,333 3,265,244
Employers' contributions
(Note 1) 17,499,632 - - 17,499,632
Reallocation of Members'
contributions (Note 1) - (2,847,126) (1,826,916) (7,155,652)
Interfund transfers - (1,583,281) (68,487) (1,151,219)
------------- ------------ ------------- -------------
52,025,054 8,044,682 13,491,930 12,458,005
------------- ------------ ------------- -------------
Investment income 12,147,348 5,681,022 2,109,719 4,338,195
Interest income 1,132,930 - - -
Income from short-term
investments 630,798 443,781 115,202 54,142
Gain (loss) on securities
sold or distributed
(Note 2) 7,572,294 - 7,150,555 18,576
Change in unrealized
appreciation (depreciation)
of investments (Note 2) 52,276,848 159,946 16,181,758 34,627,256
------------- ------------ ------------- -------------
73,760,218 6,284,749 25,557,234 39,038,169
------------- ------------ ------------- -------------
Distribution to Members (11,689,601) (4,127,950) (2,970,595) (4,376,502)
------------- ------------ ------------- -------------
Net change during period 114,095,671 10,201,481 36,078,569 47,119,672
------------- ------------ ------------- -------------
MEMBERS' EQUITY -
END OF PERIOD $392,990,758 $97,817,526 $100,622,058 $157,707,920
============= ============ ============= =============
Value per unit $11.0822 $16.9345 $5.7191
=========== ============ ============
<FN>
The accompanying notes are an integral part of these statements.
</TABLE>
<TABLE>
EMPLOYEES' SAVINGS & INCENTIVE PLAN OF
CONSUMERS ENERGY COMPANY
STATEMENTS OF CHANGES IN MEMBERS' EQUITY
(Continued from Preceding Page)
<CAPTION>
For the Year Ended December 31, 1995
-------------------------------------------------------------------
Fund D Fund E Fund F Fund G
------------- ------------ ------------- -------------
<S> <C> <C> <C> <C>
MEMBERS' EQUITY -
BEGINNING OF PERIOD $16,147,305 $ - $ - $ -
------------ ------------ ------------- -------------
CHANGES DURING PERIOD:
Members' contributions
(Note 1) 189,603 1,841,146 1,266,831 100,176
Employers' contributions
(Note 1) - - - -
Reallocation of Members'
contributions (Note 1) - 6,618,912 3,807,805 1,402,977
Interfund transfers 2,464,629 161,329 160,438 16,591
------------- ------------ ------------- -------------
2,654,232 8,621,387 5,235,074 1,519,744
------------ ------------ ------------- -------------
Investment income - - 1,668 16,744
Interest income 1,132,930 - - -
Income from short-term
investments - 9,154 7,780 739
Gain (loss) on securities
sold or distributed
(Note 2) - 403,163 - -
Change in unrealized
appreciation (depreciation)
of investments (Note 2) - 856,566 400,992 50,330
------------ ------------ ------------- ------------
1,132,930 1,268,883 410,440 67,813
------------ ------------ ------------- -------------
Distribution to Members - (133,139) (81,386) (29)
------------ ------------ ------------- -------------
Net change during period 3,787,162 9,757,131 5,564,128 1,587,528
------------ ------------ ------------- -------------
MEMBERS' EQUITY -
END OF PERIOD $19,934,467 $ 9,757,131 $ 5,564,128 $ 1,587,528
============ ============ ============= =============
Value per unit $1.2912 $1.1463 $1.0477
============ ============ ============
<FN>
The accompanying notes are an integral part of these statements.
</TABLE>
<TABLE>
EMPLOYEES' SAVINGS & INCENTIVE PLAN OF
CONSUMERS ENERGY COMPANY
STATEMENTS OF FINANCIAL POSITION
(Continued on Following Page)
<CAPTION>
December 31, 1997
---------------------------------------------------------------------
Total Fund A Fund B Fund C
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
ASSETS:
Investments (Note 1) -
Guaranteed investment
contracts (at cost
plus interest earned
thereon) $ 87,037,067 $ 87,037,067 $ - $ -
Common stock of corpora-
tions other than CMS
Energy (cost $147,146,418
in 1997 and $106,350,560
in 1996) 185,885,268 - 185,885,268 -
Common stock of CMS Energy
(cost $120,962,483 in
1997 and $107,248,940
in 1996) 244,062,001 - - 244,062,001
Loans to Members (at cost
which approximates
market) 27,768,757 - - -
Nicholas-Applegate Core
Growth Institutional
Portfolio (cost $30,351,854
in 1997 and $20,066,900
in 1996) 29,843,750 - - -
Smith Barney International
Equity Collective Trust
(cost $14,612,341 in 1997
and $11,350,503 in 1996) 15,954,547 - - -
Class G Common Stock of CMS
Energy (cost $3,219,391
in 1997 and $2,298,662
in 1996) 4,445,842 - - -
Short-term investments (at
cost which approximates
market) 22,263,934 16,998,600 4,732,260 312,442
------------- ------------- ------------- -------------
Total Investments 617,261,166 104,035,667 190,617,528 244,374,443
------------- ------------- ------------- -------------
Other Assets -
Current receivables from
Employers 6,551,277 - - 6,551,277
Current receivables from
Members 3,251,085 1,047,327 2,138,288 123,194
Interest and dividends
receivable 391,452 80,741 305,013 3,027
------------- ------------- ------------- -------------
Total Other Assets 10,193,814 1,128,068 2,443,301 6,677,498
------------- ------------- ------------- -------------
Total Assets 627,454,980 105,163,735 193,060,829 251,051,941
------------- ------------- ------------- -------------
Accrued interfund
transfers, net - (68,085) (57,818) (70,732)
------------- ------------- ------------- -------------
MEMBERS' EQUITY $627,454,980 $105,095,650 $193,003,011 $250,981,209
============= ============= ============= =============
<FN>
The accompanying notes are an integral part of these statements.
</TABLE>
<TABLE>
EMPLOYEES' SAVINGS & INCENTIVE PLAN OF
CONSUMERS ENERGY COMPANY
STATEMENTS OF FINANCIAL POSITION
(Continued from Preceding Page)
<CAPTION>
December 31, 1997
----------------------------------------------------------------------
Fund D Fund E Fund F Fund G
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
ASSETS:
Investments (Note 1) -
Guaranteed investment
contracts (at cost
plus interest earned
thereon) $ - $ - $ - $ -
Common stock of corpora-
tions other than CMS
Energy (cost $147,146,418
in 1997 and $106,350,560
in 1996) - - - -
Common stock of CMS Energy
(cost $120,962,483 in
1997 and $107,248,940
in 1996) - - - -
Loans to Members (at cost
which approximates
market) 27,768,757 - - -
Nicholas-Applegate Core
Growth Institutional
Portfolio (cost $30,351,854
in 1997 and $20,066,900
in 1996) - 29,843,750 - -
Smith Barney International
Equity Collective Trust
(cost $14,612,341 in 1997
and $11,350,503 in 1996) - - 15,954,547 -
Class G Common Stock of CMS
Energy (cost $3,219,391
in 1997 and $2,298,662
in 1996) - - - 4,445,842
Short-term investments (at
cost which approximates
market) - 50,301 94,965 75,366
------------- ------------- ------------- -------------
Total Investments 27,768,757 29,894,051 16,049,512 4,521,208
------------- ------------- ------------- -------------
Other Assets -
Current receivables from
Employers - - - -
Current receivables from
Members - 159,226 (521,881) 304,931
Interest and dividends
receivable - 1,323 894 454
------------- ------------- ------------- -------------
Total Other Assets - 160,549 (520,987) 305,385
------------- ------------- ------------- -------------
Total Assets 27,768,757 30,054,600 15,528,525 4,826,593
------------- ------------- ------------- -------------
Accrued interfund
transfers, net 147,374 42,346 7,544 (629)
------------- ------------- ------------ -------------
MEMBERS' EQUITY $ 27,916,131 $ 30,096,946 $ 15,536,069 $ 4,825,964
============= ============= ============= =============
<FN>
The accompanying notes are an integral part of these statements.
</TABLE>
<TABLE>
EMPLOYEES' SAVINGS & INCENTIVE PLAN OF
CONSUMERS ENERGY COMPANY
STATEMENTS OF FINANCIAL POSITION
(Continued on Following Page)
<CAPTION>
December 31, 1996
---------------------------------------------------------------------
Total Fund A Fund B Fund C
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
ASSETS:
Investments (Note 1) -
Guaranteed investment
contracts (at cost
plus interest earned
thereon) $ 91,044,886 $ 91,044,886 $ - $ -
Common stock of corpora-
tions other than CMS
Energy (cost $106,350,560
in 1996 and $80,208,320
in 1995) 129,079,125 - 129,079,125 -
Common stock of CMS Energy
(cost $107,248,940 in
1996 and $100,690,825
in 1995) 175,902,631 - - 175,902,631
Loans to Members (at cost
which approximates
market) 24,218,458 - - -
Nicholas-Applegate Core
Growth Institutional
Portfolio (cost $20,066,900
in 1996 and $8,353,163 in
1995) 21,559,997 - - -
Smith Barney International
Equity Collective Trust
(cost $11,350,503 in 1996
and $4,426,633 in 1995) 12,767,104 - - -
Class G Common Stock of CMS
Energy (cost $2,298,662
in 1996 and $1,446,458
in 1995) 2,308,212 - - -
Short-term investments (at
cost which approximates
market) 12,171,604 10,652,397 684,724 486,759
------------- ------------- ------------- -------------
Total Investments 469,052,017 101,697,283 129,763,849 176,389,390
------------- ------------- ------------- -------------
Other Assets -
Current receivables from
Employers 6,582,570 - - 6,582,570
Current receivables from
Members 2,912,458 1,431,367 769,906 (231,310)
Interest and dividends
receivable 482,063 48,367 296,977 2,575
------------- ------------- ------------- -------------
Total Other Assets 9,977,091 1,479,734 1,066,883 6,353,835
------------- ------------- ------------- -------------
Total Assets 479,029,108 103,177,017 130,830,732 182,743,225
------------- ------------- ------------- ------------
Accrued interfund
transfers, net - (15,364) 43,390 (45,871)
------------- ------------- ------------- -------------
MEMBERS' EQUITY $479,029,108 $103,161,653 $130,874,122 $182,697,354
============= ============= ============= =============
<FN>
The accompanying notes are an integral part of these statements.
</TABLE>
<TABLE>
EMPLOYEES' SAVINGS & INCENTIVE PLAN OF
CONSUMERS ENERGY COMPANY
STATEMENTS OF FINANCIAL POSITION
(Continued from Preceding Page)
<CAPTION>
December 31, 1996
----------------------------------------------------------------------
Fund D Fund E Fund F Fund G
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
ASSETS:
Investments (Note 1) -
Guaranteed investment
contracts (at cost
plus interest earned
thereon) $ - $ - $ - $ -
Common stock of corpora-
tions other than CMS
Energy (cost $106,350,559
in 1996 and $80,208,320
in 1995) - - - -
Common stock of CMS Energy
(cost $107,248,940 in
1996 and $100,690,825
in 1995) - - - -
Loans to Members (at cost
which approximates
market) 24,218,458 - - -
Nicholas-Applegate Core
Growth Institutional
Portfolio (cost $20,066,900
in 1996 and $8,353,163 in
1995) - 21,559,997 - -
Smith Barney International
Equity Collective Trust
(cost $11,350,503 in 1996
and $4,426,633 in 1995) - - 12,767,104 -
Class G Common Stock of CMS
Energy (cost $2,298,662
in 1996 and $1,446,458
in 1995) - - - 2,308,212
Short-term investments (at
cost which approximates
market) - 32,071 300,131 15,522
------------- ------------- ------------- -------------
Total Investments 24,218,458 21,592,068 13,067,235 2,323,734
------------- ------------- ------------- -------------
Other Assets -
Current receivables from
Employers - - - -
Current receivables from
Members - 454,214 467,187 21,094
Interest and dividends
receivable 132,505 1,002 493 144
------------- ------------ ------------- ------------
Total Other Assets 132,505 455,216 467,680 21,238
------------- ------------- ------------- -------------
Total Assets 24,350,963 22,047,284 13,534,915 2,344,972
------------- ------------- ------------- -------------
Accrued interfund
transfers, net (64,926) 45,209 31,432 6,130
------------- ------------- ------------- -------------
MEMBERS' EQUITY $ 24,286,037 $ 22,092,493 $ 13,566,347 $ 2,351,102
============= ============= ============= =============
<FN>
The accompanying notes are an integral part of these statements.
</TABLE>
EMPLOYEES' SAVINGS & INCENTIVE PLAN OF
CONSUMERS ENERGY COMPANY
NOTES TO FINANCIAL STATEMENTS
(1) PLAN DESCRIPTION
General
The Employees' Savings & Incentive Plan of Consumers Energy
Company (the "Plan") is an employee benefit plan in which
participant contributions are supplemented by contributions from
the Company/Employer (Consumers and CMS Energy and their
subsidiaries which are at least 80% owned and have adopted the
Plan). Mr. T. A. McNish, Vice-President, Secretary and Assistant
Treasurer of Consumers Energy Company, is the Plan Administrator.
The information provided below is only a summary of the Plan's
provisions. Reference should be made to the Plan documents for
more complete information.
Trustee
The Plan's funds are held in trust for the benefit of members
covered by the Plan under the Trust Agreement with State Street
Bank and Trust (the "Trustee"), effective April 1997. NBD Bank
was the Trustee during 1996 through March 1997.
Eligibility
To be eligible to participate in the Plan, an employee must be a
regular employee.
Contributions
Each employee electing to participate in the Plan ("Member")
contributes by payroll deductions not less than 1% nor more than
16% of his compensation. Each Member may change the amount of his
contributions at any time by giving his Employer advance notice
in writing. The change will be effective as soon as feasible. A
Member may discontinue contributions as of any pay date upon
notice to his Employer. However, if he discontinues
contributions without simultaneously making an election for
Elective Employer Contributions, he may not resume making
contributions for three months.
A Member can choose an "Elective Employer Contribution" option,
which allows the Member to reduce his salary by as much as 12%
and have this amount contributed by the Employer to the Plan. If
a Member's regular annual salary is equal to or more than
$70,000, the most that can be contributed by the Employer on
behalf of the Member to the Plan is 9%. Members' earnings
related to such contributions are not currently taxable.
Each Employer contributes a Matching Employer Contribution equal
to 50% of certain contributions by each of its participating
employees. Such Employer
EMPLOYEES' SAVINGS & INCENTIVE PLAN OF
CONSUMERS ENERGY COMPANY
NOTES TO FINANCIAL STATEMENTS
(Continued)
(1) PLAN DESCRIPTION (Continued)
contributions are limited to not more than 3% of each Member's
compensation. The contributions of Members and the Employers are
transferred monthly to the Trustee.
Each Employer may contribute an Incentive Contribution which is
determined at the end of each year based on (1) earnings and (2)
comparison of the Company's gas and electric rates with those of
other major investor-owned utilities. The overall goal will be
based 70% on earnings and 30% on energy rates.
The Incentive Contribution will be based on the Member's net
Elective Employer and Participant Contributions of up to 6% of
each Member's compensation.
The Plan Administrator may exclude Incentive Contributions to the
accounts of certain officers of Employers.
Matching Employer and Incentive Contributions vest as follows:
10% for each of the first four years of service with the
Employer, and 20% for each of the next three years of service.
Member contributions are fully vested at all times.
Member Loans
Members may borrow from the Plan up to 50% of their account
balance, not exceeding $50,000, including the vested portion of
the Matching Employer Contributions, for extraordinary or
emergency needs as defined in the Plan and at the discretion of
the Plan Administrator. Loan transactions are treated as a
transfer to (from) the investment fund from (to) the
Participant's loan fund (Fund D). Loan terms range from one to
five years* and are secured by the balance in the Participant's
account.** Repayments of principal and interest are made
primarily through payroll deduction.
Plan-Related Expenses
The Company pays expenses relating to the administration of the
Plan. Brokerage fees, commissions, stock transfer taxes and
other expenses in connection with the purchases, sales and
distributions of securities for each investment fund are charged
to the fund that incurred the cost.
*(Up to ten years for purchase of a principal residence.)
**A new loan rate is determined by subtracting one full percentage
point from the current major New York bank prime rate. The rate
on new loans taken during 1997 was 7.50 percent.
EMPLOYEES' SAVINGS & INCENTIVE PLAN OF
CONSUMERS ENERGY COMPANY
NOTES TO FINANCIAL STATEMENTS
(Continued)
(1) PLAN DESCRIPTION (Continued)
Fund Investments
Fund A - The investments in this fund consist of guaranteed
investment contracts with the Allstate Life Insurance
Company, Chicago, Illinois; New York Life Insurance Company,
New York, New York; Principal Mutual Life Insurance Co, Des
Moines, Iowa; and Prudential Asset Management Company,
Chicago, Illinois; and cash, temporary investments of any
type or cash equivalents as the Trustee shall deem necessary
or advisable to maintain as part of this fund within the
limitations specified in the Trust Agreement.
Fund B - The investments in this fund may consist of common
stocks and securities convertible into common stock (other
than securities of CMS Energy Corporation) selected by the
Investment Manager, Independence Investment Associates,
Inc., Boston, Massachusetts, in its sole discretion, and
such amounts of cash, temporary investments of any type or
cash equivalents as the Investment Manager shall deem
necessary or advisable to maintain as part of the fund
within the limitations specified in the Trust Agreement.
Fund C - The investments in this fund may consist of common
stock of CMS Energy Corporation and such amounts of cash,
temporary investments of any type or cash equivalents as the
Trustee shall deem necessary or advisable to maintain as
part of this fund within the limitations specified in the
Trust Agreement; subject to the limitation that the total
number of shares held at any time by this fund, shall not
exceed 10% of the outstanding voting shares of CMS Energy
Corporation. Employers' contributions must be invested in
this fund.
Fund D - The investments in this fund consist of the
promissory notes of Plan Members.
Fund E - The investments in this fund may consist of mid-cap growth-
oriented common stock (other than securities of CMS Energy
Corporation) selected by the Investment Manager, Nicholas-
Applegate Capital Management, San Diego, California, in its
sole discretion, and such amounts of cash, temporary
investments of any type or cash equivalents as the
Investment Manager shall deem necessary or advisable to
maintain as part of the fund within the limitations
specified in the Trust Agreement.
EMPLOYEES' SAVINGS & INCENTIVE PLAN OF
CONSUMERS ENERGY COMPANY
NOTES TO FINANCIAL STATEMENTS
(Continued)
(1) PLAN DESCRIPTION (Continued)
Fund F - The investments in this fund may consist of international
common stock selected by the Investment Manager, Smith
Barney Capital Management, New York, New York, in its sole
discretion, and such amounts of cash, temporary investments
of any type or cash equivalents as the Investment Manager
shall deem necessary or advisable to maintain as part of the
fund within the limitations specified in the Trust
Agreement.
Fund G - The investments in this fund may consist of Class G common
stock of CMS Energy Corporation and such amounts of cash,
temporary investments of any type or cash equivalents as the
Trustee shall deem necessary or advisable to maintain as
part of this fund within the limitations specified in the
Trust Agreement; subject to the limitation that the total
number of shares held at any time by this fund shall not
exceed 10% of the outstanding Class G voting shares of CMS
Energy Corporation.
Reallocations
All or part of a Member's past contributions which are in the
Member's account on a Valuation Date may be reallocated among
Fund A, Fund B, Fund C, Fund E, Fund F or Fund G on a Valuation
Date by giving his employer advance notice in writing of such
change. Any such reallocations of contributions will be done on
the basis of the value of the contributions on such Valuation
Date.
Forfeitures
The Plan provides that Members who receive a distribution, under
certain conditions, forfeit all or a portion of the value of any
Matching Employer and Incentive Contributions credited to their
accounts. Such amounts forfeited totalled $260,318 in 1997 and
are treated as a reduction of the Employers' contribution
liability.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Valuations
The accompanying financial statements reflect the accrual basis
of accounting. Investments, other than short-term, in Funds B,
C, E, F and G are stated at current market value. Market value
for most Fund B, C, E, F and G common stock is defined as the
closing price of such stock as shown in a composite report of one
or more generally recognized exchanges, including the New York
Stock Exchange. There are also some securities which are traded
in the over-the-counter ("OTC") market. OTC issues are priced at
the bid price or "last" price furnished by the NASDAQ National
Market. Short-term investments
EMPLOYEES' SAVINGS & INCENTIVE PLAN OF
CONSUMERS ENERGY COMPANY
NOTES TO FINANCIAL STATEMENTS
(Continued)
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
held in Funds A, B, C, E, F and G are stated at cost which
approximates market.
Gains and Losses
Amounts relating to gain (loss) on securities sold or distributed
and change in unrealized appreciation (depreciation) as reported
in the statement of changes in members' equity for the years
ended December 31, 1997, 1996 and
1995 have been presented in conformity with the Department of
Labor reporting requirements. Department of Labor rules require
that realized gains (losses) and unrealized appreciation
(depreciation) be based on the market value of the assets at the
beginning of the Plan year or at the time of purchase during the
year.
Guaranteed Investment Contracts
The Plan has entered into several fully benefit-responsive
investment contracts with various insurance companies. All of
these contracts are held in Fund A and are credited with interest
and charged for Plan withdrawals and administrative expenses.
The contracts are included in the financial statements at
contract value (cost plus accrued interest less withdrawals)
which approximates fair value. The contracts earn interest at
fixed rates ranging from 6.50% to 8.05% and mature between May
1999 and April 2003. The average aggregate yield for these
contracts was 7.60% and 7.11% in 1997 and 1996, respectively.
Estimates
The preparation of financial statements in accordance with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts
of assets and liabilities at the date of the financial statements
and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those
estimates.
(3) FEDERAL INCOME TAX ASPECTS OF THE PLAN
The last determination letter received by the Company from the
Internal Revenue Service was dated November 20, 1996. The
determination letter states that the Plan qualifies under Section
401(a) of the Internal Revenue Code (the "Code") of 1954 as
amended by the "Employee Retirement Income Security Act of 1974"
("ERISA") and is exempt from taxation under Section 501(a) of the
Code. Under existing Federal income tax laws, (a) the Company
is entitled to deduct its contributions to the Plan in computing
its Federal income tax; (b) the income of the trust funds
accumulated under the Plan is exempt from Federal
income tax; and (c) Members are not subject to tax on amounts
contributed by
EMPLOYEES' SAVINGS & INCENTIVE PLAN OF
CONSUMERS ENERGY COMPANY
NOTES TO FINANCIAL STATEMENTS
(Continued)
(3) FEDERAL INCOME TAX ASPECTS OF THE PLAN (Continued)
the Company for their benefit until such time as such amounts are
distributed to them, at which time they are taxable as ordinary
income unless distributed as an "eligible rollover distribution."
(4) RECONCILIATION OF THE FINANCIAL STATEMENTS TO FORM 5500
The following is a reconciliation of members' equity and
distributions paid to members per the financial statements to
members' equity and distributions paid to members per the Form
5500 for the Plan year 1997:
<TABLE>
<CAPTION>
Total Fund A Fund B Fund C Fund D Fund E Fund F Fund G
------------ ------------- ------------ ------------- ----------- ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Members' Equity
per Financial
Statements $627,454,980 $105,095,650 $193,003,011 $250,981,209 $27,916,131 $30,096,946 $15,536,069 $4,825,964
Benefits payable
to members 1997 (4,012,496) (1,097,193) (1,043,105) (1,450,887) - (352,708) (51,853) (16,750)
------------ ------------- ------------- ------------- ----------- ----------- ------------ -----------
Members' Equity
per Form 5500 $623,442,484 $103,998,457 $191,959,906 $249,530,322 $27,916,131 $29,744,238 $15,484,216 $4,809,214
============= ============= ============ ============= =========== =========== =========== ==========
Distributions
paid to members
per financial
statements 28,411,275 8,208,714 8,581,832 9,700,793 - 1,130,615 702,542 86,779
Benefits payable
to members 1996 (1,025,239) (215,428) (380,161) (386,482) - (22,144) (20,213) (811)
Benefits payable
to members 1997 4,012,496 1,097,193 1,043,105 1,450,887 - 352,708 51,853 16,750
------------- ------------ ------------ ------------- -------- --------- ----------- ---------
Distributions
paid per
Form 5500 $ 31,398,532 $ 9,090,479 $ 9,244,776 $ 10,765,198 $ - $ 1,461,179 $ 734,182 $ 102,718
============= ============= ============ ============= ======== ========= ============ ===========
</TABLE>
(5) PLAN TERMINATION
The Employers expect the Plan to be permanent, but since future
conditions affecting the Plan cannot be anticipated or foreseen,
the Employers reserve the right, by action of the Board of
Directors of Consumers Energy Company, to terminate or amend the
Plan in whole or in part.
Upon termination or partial termination of the Plan, or upon a
complete discontinuance of contributions, the interest of each
person in the Plan shall be segregated and set aside by the
Trustee and one hundred percent (100%) of the value of the
Matching Employer contribution credited to the account of a
person having an interest in the Plan shall be vested in such
person.
(6) GENDER
Any masculine terminology used herein shall also include the
feminine.
SCHEDULE I
EMPLOYEES' SAVINGS & INCENTIVE PLAN OF
CONSUMERS ENERGY COMPANY
ITEM 27(a) - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1997
Identity of Issuer and Title Current
of Issue Cost Value
- ------------------------------- ---------- -----------
GUARANTEED INVESTMENT CONTRACTS
(Fund A) -
Allstate Life Insurance Company
(6.71%, matures 07/28/2000) $ 4,683,843 $ 4,683,843
Allstate Life Insurance Company
(7.22%, matures 06/14/99) 6,403,050 6,403,050
Allstate Life Insurance Company
(7.33%, matures 06/21/99) 6,418,919 6,418,919
Allstate Life Insurance Company
(7.65%, matures 03/27/2000) 6,131,360 6,131,360
New York Life Insurance Company
(7.45%, matures 03/31/2000) 6,095,089 6,095,089
New York Life Insurance Company
(7.73%, matures 05/11/99) 19,675,271 19,675,271
Principal Mutual Life Insurance
Company (7.20%,
matures 04/01/03) 6,328,698 6,328,698
Principal Mutual Life Insurance
Company (6.55%,
matures 06/01/2000) 4,712,442 4,712,442
The Prudential Asset Management
Company
(6.50%, matures 11/30/2001) 13,733,361 13,733,361
The Prudential Asset Management
Company
(8.05%, matures 10/02/2000) 12,855,034 12,855,034
----------- -----------
Total Guaranteed Investment
Contracts $87,037,067 $87,037,067
----------- -----------
COMMON STOCK OF CORPORATIONS OTHER THAN
CMS ENERGY CORPORATION (Fund B) -
ABBOTT LABORATORIES CORP $ 1,105,540 $ 1,834,000
AIR PRODUCTS AND CHEMICALS INC 2,261,856 2,467,500
ALLEGIANCE CORP 325,310 467,775
ALLIED SIGNAL INC 829,052 865,519
AMERICAN EXPRESS CO 511,564 1,517,250
AMERICAN INTL GROUP INC 1,391,045 1,669,313
ANADARKO PETROLEUM CORP 329,152 327,713
ASHLAND INC 836,405 934,163
ATLANTIC RICHFIELD COMPANY 1,375,406 1,426,225
AUTODESK INCORPORATED 621,080 595,700
AVERY DENNISON CORP 450,605 733,900
AVON PRODUCTS INC 484,670 521,688
BAKER HUGHES INC 926,078 1,129,888
BANKAMERICA CORPORATION 2,764,664 3,730,300
BANKERS TRUST NEW YORK CORP 568,840 685,869
BECTON DICKINSON + CO 606,888 720,000
SCHEDULE I
EMPLOYEES' SAVINGS & INCENTIVE PLAN OF
CONSUMERS ENERGY COMPANY
ITEM 27(a) - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1997
(Continued)
Identity of Issuer and Title Current
of Issue Cost Value
- ------------------------------ ------------ --------------
BELL ATLANTIC CORP $4,376,025 $4,995,900
BELLSOUTH CORPORATION 625,005 962,944
BORG WARNER AUTOMOTIVE INC 222,747 239,200
BOSTON SCIENTIFIC CORP 357,818 371,588
BRISTOL MYERS SQUIBB CO 1,706,589 3,501,125
BRITISH PETROLEUM PLC 1,131,462 1,243,125
BRITISH STEEL PLC 364,539 310,844
BROWNING FERRIS INDS INC 706,070 728,900
BURLINGTON NORTHERN SANTA FE CORP 1,203,863 1,180,306
CARDINAL HEALTH INC 1,719,889 2,163,600
CATERPILLAR INC 447,122 436,500
CENDANT CORP 1,395,922 1,875,169
CHEVRON CORP 2,681,631 2,646,650
CITICORP 3,510,609 3,603,469
COMERICA INC 3,855,016 3,916,850
COMPAQ COMPUTER CORP 540,753 1,291,025
COMPUTER ASSOC INTL INC 952,909 1,518,450
CONAGRA INC 884,500 1,212,375
CONSOLIDATED NATURAL GAS CO 2,169,999 2,407,900
COOPER INDUSTRIES INC 425,584 470,400
CORNING INC 1,622,289 1,236,263
COSTCO COS INC 129,695 178,500
DANA CORPORATION 455,599 774,250
DANKA BUSINESS SYSTEMS 255,572 106,781
DAYTON HUDSON CORPORATION 682,392 648,000
DIAL CORPNEW 1,846,812 1,987,594
DOMINION RESOURCES INC 1,062,943 1,144,931
DU PONT, E I DE NEMOURS & CO 1,306,454 1,579,644
EL PASO NAT GAS CO 587,187 704,900
ENTERGY CORPORATION 798,588 880,163
EQUITABLE COMPANIES INC 134,343 169,150
FPL GROUP INC 1,341,599 1,426,419
FEDERAL NATL MTG ASSN 1,207,375 1,483,625
FIRST UNION CORP 609,237 732,875
FLORIDA PROGRESS CORP 580,256 639,775
FLOWSERVE CORP 184,040 192,769
FORD MOTOR COMPANY 2,319,781 3,069,150
FORT JAMES CORP 473,795 527,850
GTE CORP 974,453 1,052,925
GENERAL ELECTRIC COMPANY 2,662,942 6,662,450
GENERAL MOTORS CORPORATION 1,694,680 2,077,650
GENERAL RE CORPORATION 4,560,776 5,914,800
GLAXO WELLCOME 475,739 636,738
HALLIBURTON CO 102,298 160,813
HARRIS CORP 701,936 665,188
HARTFORD FINANCIAL SERVICES GROUP 1,264,066 1,918,031
SCHEDULE I
EMPLOYEES' SAVINGS & INCENTIVE PLAN OF
CONSUMERS ENERGY COMPANY
ITEM 27(a) - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1997
(Continued)
Identity of Issuer and Title Current
of Issue Cost Value
- ------------------------------ ----------- -------------
HEALTHSOUTH CORP $ 1,067,444 $ 1,445,775
HEALTH MGMT ASSOC 152,621 204,525
HEWLETT PACKARD CORP 937,167 1,060,375
HOME DEPOT INC 2,613,754 4,730,606
HONEYWELL INC 2,217,391 2,233,100
HOUSEHOLD INTL INC 272,289 306,300
HOUSTON INDUSTRIES INC 1,172,432 1,356,225
IMPERIAL OIL LTD 501,205 952,669
INGERSOLL-RAND COMPANY 517,129 692,550
INTEL CORPORATION 475,844 934,325
INTL BUSINESS MACHINES CORP 774,159 1,203,188
INTERNATIONAL PAPER CO 1,221,433 944,438
JOHNSON & JOHNSON 1,204,285 3,089,538
JONES APPAREL GROUP INC 351,116 313,900
KOMAG INC 322,275 160,650
LIZ CLAIBORNE INC 534,238 589,556
LOCKHEED MARTIN CORPORATION 252,493 256,100
LOWE'S COMPANIES INC 1,245,220 1,697,675
LUCENT TECHNOLOGY INC 3,301,691 3,513,701
MARSH & MCLENNAN COMPANIES 1,956,517 3,265,838
MASCO CORP 900,703 1,002,238
MERCK & COMPANY INC 3,894,733 5,745,200
MICROSOFT CORP 3,058,169 4,097,225
MOBIL CORP 959,025 931,219
MONTANA POWER CO 919,009 1,127,125
MORGAN STANLEY DEAN WITTER 1,036,741 2,489,163
MYLAN LABS INC 535,959 544,375
NATIONAL SERVICE INDUSTRIES INC 566,811 555,100
NORFOLK SOUTHERN CORP 439,213 457,500
NORTHROP GRUMMAN CORP 988,582 1,460,500
NORWEST CORP 128,529 189,875
PARAMETRIC TECHNOLOGY CORP 312,538 312,675
PARKER HANNIFIN CORP 386,801 405,994
PEOPLESOFT INC 167,444 218,400
PEPSICO INC 3,892,537 4,005,625
PERKIN ELMER CORPORATION 713,027 909,600
PHILIP MORRIS COMPANIES INC 1,173,596 2,669,750
PHILLIPS PETROLEUM COMPANY 2,343,911 3,180,075
PITNEY BOWES INC 1,716,130 1,942,650
PRAXAIR INC 385,671 328,500
PROCTER & GAMBLE CO 873,656 1,005,638
QUAKER OATS CO 2,174,294 2,299,900
RAYCHEM CORPORATION 819,204 1,007,663
RAYTHEON CO 95,387 107,684
REVLON INC, CLASS A 351,956 335,469
SCHEDULE I
EMPLOYEES' SAVINGS & INCENTIVE PLAN OF
CONSUMERS ENERGY COMPANY
ITEM 27(a) - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1997
(Continued)
Identity of Issuer and Title Current
of Issue Cost Value
- ---------------------------- --------- -------------
SCHERING PLOUGH CORPORATION 277,637 1,018,850
SCHLUMBERGER LTD 1,842,255 1,835,400
SERVICE CORP INTL 1,186,866 1,363,425
SOUTHWEST AIRLINES CO 1,175,803 1,265,725
STAPLES INC 483,320 663,225
*STATE STREET CORPORATION 357,097 384,006
STRATUS COMPUTER INC 192,971 192,844
TJX COS INC 944,911 1,179,063
TEXACO INC 1,219,714 1,400,650
TEXAS INSTRUMENTS INC 581,855 594,000
TEXAS UTILITIES COMPANY 926,689 950,350
TEXTRON INCORPORATED 2,346,764 2,562,500
THOMAS & BETTS CORP 361,494 307,125
TRAVELERS GROUP INC 3,141,323 3,402,206
TRICON GLOBAL RESTAURANTS INC 272,094 273,188
USX MARATHON GROUP 952,408 1,096,875
UNIFI INC 269,120 260,400
UNITED TECHNOLOGIES CORP 2,870,379 3,305,688
WAL MART STORES INC 376,224 638,888
WARNER LAMBERT CO 441,020 670,613
WHITMAN CORP 269,246 458,700
XEROX CORPORATION 3,691,216 4,233,038
TOMMY HILFIGER CORP 340,629 273,975
------------ ------------
TOTAL COMMON STOCK OF
CORPORATIONS OTHER THAN
CMS ENERGY CORPORATION (Fund B) $147,146,418 $185,885,268
------------ ------------
*COMMON STOCK OF CMS ENERGY
CORPORATION (Fund C) $120,962,483 $244,062,001
------------ ------------
LOANS TO MEMBERS (Fund D) (Loans
mature during periods ranging
from 0-10 years and at interest
rates from 5.25% to 8.50% $ 27,768,757 $ 27,768,757
------------ ------------
NICHOLAS-APPLEGATE CORE GROWTH
INSTITUTIONAL PORTFOLIO (Fund E) $ 30,351,854 $ 29,843,750
------------ ------------
SMITH BARNEY INTERNATIONAL EQUITY
COLLECTIVE TRUST (Fund F) $ 14,612,341 $ 15,954,547
------------ ------------
SCHEDULE I
EMPLOYEES' SAVINGS & INCENTIVE PLAN OF
CONSUMERS ENERGY COMPANY
ITEM 27(a) - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1997
(Continued)
Identity of Issuer and Title Current
of Issue Cost Value
- ------------------------------------- ------------- --------------
*CLASS G COMMON STOCK OF CMS ENERGY
CORPORATION (Fund G) $ 3,219,391 $ 4,445,842
------------ ------------
*SHORT-TERM INVESTMENTS - STATE STREET $ 22,263,934 $ 22,263,934
------------ ------------
(Funds A, B, C, E, F and G)
Total Investments $453,362,245 $617,261,166
============ ============
*Represents Party-in-Interest
SCHEDULE II
<TABLE>
EMPLOYEES' SAVINGS & INCENTIVE PLAN OF CONSUMERS ENERGY COMPANY
ITEM 27(d) SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
<CAPTION>
Current Value
Identity of Party of Asset on
and Number of Purchase Selling Cost of Transaction Net Gain
Description of Asset Transactions Shares Price Price Asset Date (Loss)
- --------------------- ----------- ----------- ------------ ------------ ------------ ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
*CMS Energy Corp
- Purchases 21 554,962 $ 19,001,210 N/A $ 19,001,210 $ 19,001,210 N/A
- Sales 34 247,271 N/A $ 8,897,330 5,299,846 8,897,330 $3,597,484
Nicholas-Applegate
Mutual Funds
- Purchases 10 670,240 10,371,984 N/A 10,371,984 10,371,984 N/A
- Sales 2 5,556 N/A 100,000 87,031 100,000 12,969
NBD Money Market for
Personal Trusts
- Purchases 50 24,494,527 24,494,527 N/A 24,494,527 24,494,527 N/A
- Sales 24 24,494,527 N/A 24,494,527 24,494,527 24,494,527 0
State Street Bank
& Trust Short-Term
Investment Fund
- Purchases 339 127,191,184 127,191,184 N/A 127,191,184 127,191,184 N/A
- Sales 219 104,889,444 N/A 104,889,444 104,889,444 104,889,444 0
</TABLE>
*Represents Party-in-Interest
EXHIBIT A
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference of our report dated June 23, 1998
included in the Employees' Savings & Incentive Plan of Consumers
Energy Company's Annual Report on Form 11-K for the year ended
December 31, 1997, into CMS Energy Corporation's previously filed
Registration Statement File No. 33-29681.
ARTHUR ANDERSEN
LLP
Detroit, Michigan,
June 23, 1998
SIGNATURE
Pursuant to the requirements of the Securities and
Exchange Act of 1934, CMS Energy Corporation has duly caused this
annual report to be signed by the undersigned thereunto duly
authorized.
EMPLOYEES' SAVINGS & INCENTIVE PLAN OF CONSUMERS ENERGY
COMPANY
By Thomas A McNish
-----------------------------------------------------------
Thomas A McNish
Vice-President and Secretary
Dated: June 23, 1998.
SIGNATURE
Pursuant to the requirements of the Securities and
Exchange Act of 1934, CMS Energy Corporation has duly caused this
annual report to be signed by the undersigned thereunto duly
authorized.
EMPLOYEES' SAVINGS & INCENTIVE PLAN OF CONSUMERS ENERGY
COMPANY
By
-----------------------------------------------------------
Thomas A McNish
Vice-President and Secretary
Dated: June 23, 1998.
