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FORM 8-K
CURRENT REPORT
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) June 23, 1998
Commission Registrant; State of Incorporation; IRS Employer
File Number Address; and Telephone Number Identification No
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1-9513 CMS ENERGY CORPORATION 38-2726431
(A Michigan Corporation)
Fairlane Plaza South, Suite 1100
330 Town Center Drive
Dearborn, Michigan 48126
(313) 436-9261
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ITEM 5. OTHER EVENTS.
On June 23, 1998, CMS Energy Corporation issued a press release announcing that
its oil and gas exploration and production subsidiary, CMS NOMECO Oil & Gas
Company, has elected to change from full cost accounting to the successful
efforts method. As a result of the change, CMS Energy Corporation will record a
one-time, non-cash reduction of shareholders' equity on the balance sheet of
about $175 million, after tax. A copy of the press release is included as an
exhibit to this report. The press release may include "forward-looking
statements" as defined by the Private Securities Litigation Reform Act of 1995.
Any matters that are not historical facts are forward-looking and, accordingly,
involve assumptions, estimates and uncertainties which could cause actual
results or outcomes to differ materially from those expressed in the
forward-looking statements. Some important factors that could cause such
material differences are disclosed under the heading "Forward-Looking
Information" in the Management's Discussion and Analysis section of the CMS
Energy Corporation Form 10-Q for the quarterly period ended March 31, 1998 on
file with the Securities and Exchange Commission.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(99) Press Release of CMS Energy Corporation dated June 23, 1998
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CMS ENERGY CORPORATION
Dated: June 23, 1998 By: /s/ A. M. Wright
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Alan M. Wright
Senior Vice President and Chief
Financial Officer
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EXHIBIT INDEX
EXHIBIT
NUMBER
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(99) Press Release of CMS Energy Corporation dated June 23, 1998
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EXHIBIT 99
DEARBORN, Mich., June 23, 1998-- CMS Energy Corporation (NYSE:CMS)
today announced that its oil and gas exploration and production subsidiary, CMS
NOMECO Oil & Gas Company, has elected to change from full cost accounting to the
more conservative successful efforts method, effective January 1, 1998. The
change will conform CMS NOMECO's accounting practices to those of most
comparable companies in the industry and the method preferred by the Securities
and Exchange Commission and Financial Accounting Standards.
As a result of the change, CMS Energy Corporation will record a one-time
non-cash reduction of Shareholders' equity on the balance sheet of about $175
million, after tax. The change is expected to have a positive impact on the
company's 1998 earnings.
This change will help reduce the variability of CMS NOMECO's future
earnings caused by temporary downward swings in oil markets by eliminating
potential future "ceiling test" write-downs and will materially reduce CMS
NOMECO's depreciation, depletion and amortization expense in future periods.
This change will also improve quality of earnings and present a balance sheet
which more accurately reflects the value of CMS NOMECO's reserves.
As a result of the change, CMS Energy Corporation financial statements
for prior years will be retroactively restated as if CMS NOMECO had always used
the successful efforts method, which requires that costs associated with
unsuccessful exploratory drilling efforts be expensed as incurred, rather than
capitalized. The $175 million one-time reduction in equity represents the sum of
changes to prior years' earnings.
CMS Energy Corporation is a $5 billion (sales), $10 billion (assets)
international energy company operating throughout the U.S. and in 18 countries
around the world with businesses in electric and natural gas utility operations;
independent power production; natural gas pipelines and storage; oil and gas
exploration and production; and energy marketing, services and trading. CMS
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Energy Corporation's principal subsidiary is Consumers Energy, Michigan's
largest utility and America's fourth largest combination gas and electric
utility.
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Information on CMS Energy is accessible on the Internet through the World Wide
Web at the following address: http://www.cmsenergy.com/
