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, 1998
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)
EMPLOYEES' SAVINGS & INCENTIVE PLAN OF
CONSUMERS ENERGY COMPANY
FINANCIAL STATEMENTS AS OF DECEMBER 31, 1998 AND 1997
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, 1998 and 1997, and the related statements of changes in
members' equity for each of the three years in the period ended
December 31, 1998. 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 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, 1998 and 1997, and the changes in member equity for each
of the three years in the period ended December 31, 1998 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, 1998 and
reportable transactions for the year ended December 31, 1998 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 statements of financial position and the
statements of changes in members' equity is presented for purposes of
additional analysis rather than to present the financial position and
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 4, 1999.
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, 1998
STATEMENTS OF FINANCIAL POSITION AS OF DECEMBER 31, 1998 AND 1997
NOTES TO FINANCIAL STATEMENTS
SCHEDULE I - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AS OF
DECEMBER 31, 1998
SCHEDULE II - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
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, 1998
----------------------------------------------------------------------
Total Fund A Fund B Fund C
------------ ------------ ------------ -------------
<S> <C> <C> <C> <C>
MEMBERS' EQUITY -
BEGINNING OF PERIOD $627,454,980 $105,095,650 $193,003,011 $250,981,209
------------ ------------ ------------ ------------
CHANGES DURING PERIOD:
Members' contributions
(Note 1) 38,766,501 7,659,570 20,542,378 2,263,959
Employers' contributions
(Note 1) 17,970,163 - - 17,970,163
Reallocation of Members'
contributions (Note 1) - 6,798,017 (1,511,145) (2,189,960)
Interfund transfers - (1,013,789) 376,706 (263,702)
------------ ------------ ------------ -------------
56,736,664 13,443,798 19,407,939 17,780,460
------------ ------------ ------------ -------------
Investment income 18,247,589 6,382,955 3,200,270 7,099,930
Interest income 1,775,146 - - -
Income from short-term
investments 1,269,491 968,203 196,952 71,427
Gain (loss) on securities
sold or distributed
(Note 2) 31,251,257 - 25,832,847 5,354,851
Change in unrealized
appreciation (depreciation)
of investments (Note 2) 51,107,042 - 27,373,851 19,580,610
------------ ------------ ------------ -------------
103,650,525 7,351,158 56,603,920 32,106,818
------------ ------------ ------------ -------------
Distribution to Members (40,607,937) (10,163,743) (13,355,113) (14,512,770)
------------ ------------ ------------ -------------
Net change during period 119,779,252 10,631,213 62,656,746 35,374,508
------------ ------------ ------------ -------------
MEMBERS' EQUITY -
END OF PERIOD $747,234,232 $115,726,863 $255,659,757 $286,355,717
============ ============ ============ =============
Value per unit $13.5640 $34.4776 $10.1928
=========== ============ =============
<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, 1998
----------------------------------------------------------------------
Fund D Fund E Fund F Fund G
----------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
MEMBERS' EQUITY -
BEGINNING OF PERIOD $27,916,131 $30,096,946 $15,536,069 $4,825,964
----------- ----------- ------------ ----------
CHANGES DURING PERIOD:
Members' contributions
(Note 1) - 4,740,434 2,559,592 1,000,568
Employers' contributions
(Note 1) - - - -
Reallocation of Members'
contributions (Note 1) - (2,465,901) (940,534) 309,523
Interfund transfers 26,400 500,143 288,471 85,771
----------- ----------- ------------ ------------
26,400 2,774,676 1,907,529 1,395,862
----------- ----------- ------------ ------------
Investment income - 1,302,376 2,104 259,954
Interest income 1,775,146 - - -
Income from short-term
investments - 13,705 14,276 4,928
Gain (loss) on securities
sold or distributed
(Note 2) - (3,431) 66,887 103
Change in unrealized
appreciation (depreciation)
of investments (Note 2) - 3,176,639 1,243,980 (268,038)
----------- ----------- ------------ -------------
1,775,146 4,489,289 1,327,247 (3,053)
----------- ----------- ------------ -------------
Distribution to Members (276) (1,792,211) (602,056) (181,768)
----------- ----------- ------------ -------------
Net change during period 1,801,270 5,471,754 2,632,720 1,211,041
----------- ----------- ------------ -------------
MEMBERS' EQUITY -
END OF PERIOD $29,717,401 $35,568,700 $ 18,168,789 $ 6,037,005
=========== =========== ============ ============
Value per unit $2.0077 $1.4147 $1.6478
=========== ============ ============
<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, 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 FINANCIAL POSITION
(Continued on Following Page)
<CAPTION>
December 31, 1998
----------------------------------------------------------------------
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) $ 93,420,022 $ 93,420,022 $ - $ -
Common stock of corpora-
tions other than CMS
Energy (cost $183,200,306
in 1998 and $147,146,418
in 1997) 251,579,928 - 251,579,928 -
Common stock of CMS Energy
(cost $134,068,835 in
1998 and $120,962,483
in 1997) 276,748,963 - - 276,748,963
Loans to Members (at cost
which approximates
market) 29,963,181 - - -
Nicholas-Applegate Core
Growth Institutional
Portfolio (cost $32,575,798
in 1998 and $30,351,854 in
1997) 35,244,333 - - -
Smith Barney International
Equity Collective Trust
(cost $15,331,478 in 1998
and $14,612,341 in 1997) 17,842,780 - - -
Class G Common Stock of CMS
Energy (cost $4,933,539
in 1998 and $3,219,391
in 1997) 5,891,950 - - -
Short-term investments (at
cost which approximates
market) 26,242,843 21,285,112 2,292,557 2,389,813
------------ ------------ ------------ -------------
Total Investments 736,934,000 114,705,134 253,872,485 279,138,776
------------ ------------ ------------ -------------
Other Assets -
Current receivables from
Employers 6,858,416 - - 6,858,416
Current receivables from
Members 3,061,098 941,407 1,408,863 277,145
Interest and dividends
receivable 380,718 88,572 279,409 10,834
------------ ------------ ------------ -------------
Total Other Assets 10,300,232 1,029,979 1,688,272 7,146,395
------------ ------------ ------------ -------------
Total Assets 747,234,232 115,735,113 255,560,757 286,285,171
------------ ------------ ------------ -------------
Accrued interfund transfers, net - (8,250) 99,000 70,546
------------ ------------ ------------ -------------
MEMBERS' EQUITY $747,234,232 $115,726,863 $255,659,757 $286,355,717
============ ============ ============ ============
<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, 1998
----------------------------------------------------------------------
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 $183,200,306
in 1998 and $147,146,418
in 1997) - - - -
Common stock of CMS Energy
(cost $134,068,835 in
1998 and $120,962,483
in 1997) - - - -
Loans to Members (at cost
which approximates
market) 29,963,181 - - -
Nicholas-Applegate Core
Growth Institutional
Portfolio (cost $32,575,798
in 1998 and $30,351,854 in
1997) - 35,244,333 - -
Smith Barney International
Equity Collective Trust
(cost $15,331,478 in 1998
and $14,612,341 in 1997) - - 17,842,780 -
Class G Common Stock of CMS
Energy (cost $4,933,539
in 1998 and $3,219,391
in 1997) - - - 5,891,950
Short-term investments (at
cost which approximates
market) 4,050 54,313 172,087 44,911
------------ ------------ ------------ -------------
Total Investments 29,967,231 35,298,646 18,014,867 5,936,861
------------ ------------ ------------ -------------
Other Assets -
Current receivables from
Employers - - - -
Current receivables from
Members - 211,969 120,180 101,534
Interest and dividends
receivable 13 565 897 428
------------ ------------ ------------ -------------
Total Other Assets 13 212,534 121,077 101,962
------------ ------------ ------------ -------------
Total Assets 29,967,244 35,511,180 18,135,944 6,038,823
------------ ------------ ------------ -------------
Accrued interfund transfers, net (249,843) 57,520 32,845 (1,818)
------------ ------------ ------------ -------------
MEMBERS' EQUITY $ 29,717,401 $ 35,568,700 $ 18,168,789 $ 6,037,005
============ ============ ============ =============
<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>
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 1998 was 6.75 percent to 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,
Salomon 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 $286,997.41 in 1998 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 31,1998, 1997 and
1996 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 7.331% and 7.60% in 1998 and 1997,
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 1998:
<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 $747,234,232 $115,726,863 $255,659,757 $286,355,717 $29,717,401 $35,568,700 $18,168,789 $6,037,005
Benefits payable
to members
1998 (3,637,187) (1,008,844) (1,309,374) (1,039,020) 0 (188,867) (54,316) (36,766)
------------- ------------- ------------- ------------- ----------- ----------- ----------- -----------
Members' Equity
per Form 5500
$743,597,045 $114,718,019 $254,350,383 $285,316,697 $29,717,401 $35,379,833 $18,114,473 $6,000,239
============ ============ ============ ============ =========== =========== =========== ===========
Distributions
paid to members
per Financial
Statements 40,607,937 10,163,743 13,355,113 14,512,770 276 1,792,211 602,056 181,768
Benefits payable
to members
1997 (4,012,496) (1,097,193) (1,043,105) (1,450,887) 0 (352,708) (51,853) (16,750)
Benefits payable
to members
1998 3,637,187 1,008,844 1,309,374 1,039,020 0 188,867 54,316 36,766
------------ ------------ ------------ ------------ ------------ ----------- ------------ -------
Distributions
paid per
Form 5500 $ 40,232,628 $ 10,075,394 $ 13,621,382 $ 14,100,903 $ 276 $ 1,628,370 $ 604,519 $ 201,784
============ ============ ============ ============ =========== ============ ============= =========
</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, 1998
Current
Identity of Issuer and Title of Issue Cost Value
- ------------------------------------- ----------- ----------
GUARANTEED INVESTMENT CONTRACTS
(Fund A) -
Allstate Life Insurance Company
(6.71%, matures 07/28/2000) $ 4,998,129 $ 4,998,129
Allstate Life Insurance Company
(7.22%, matures 06/14/99) 6,865,350 6,865,350
Allstate Life Insurance Company
(7.33%, matures 06/21/99) 6,889,426 6,889,426
Allstate Life Insurance Company
(7.65%, matures 03/27/2000) 6,600,409 6,600,409
New York Life Insurance Company
(7.45%, matures 03/31/2000) 6,549,173 6,549,173
New York Life Insurance Company
(7.73%, matures 05/11/99) 21,196,170 21,196,170
Principal Mutual Life Insurance
Company (7.20%, matures 04/01/03) 6,784,364 6,784,364
Principal Mutual Life Insurance
Company (6.55%, matures 06/01/2000) 5,021,107 5,021,107
The Prudential Asset Management Company
(6.50%, matures 11/30/2001) 14,626,030 14,626,030
The Prudential Asset Management Company
(8.05%, matures 10/02/2000) 13,889,864 13,889,864
------------ ------------
Total Guaranteed Investment Contracts $93,420,022 $93,420,022
----------- -----------
COMMON STOCK OF CORPORATIONS OTHER THAN
CMS ENERGY CORPORATION (Fund B) -
ABBOTT LABORATORIES CORP $ 1,105,540 $ 2,744,000
AIR PRODUCTS AND CHEMICALS INC 1,711,471 1,816,000
AIRBORNE FREIGHT CORP 394,555 645,519
ALBERTSON'S INC 455,780 611,400
ALLIED WASTE INDUSTRIES INC 739,449 737,100
ALLSTATE CORP 1,539,292 1,247,400
AMEREN CORP 1,783,117 1,814,219
AMERICAN INTL GROUP INC 1,770,006 2,732,072
AMERITECH CORP 1,120,805 1,419,600
AMGEN INC 1,823,073 2,446,763
AMR CORP 2,528,842 2,315,625
ASSOCIATES FIRST CAP CORP 776,305 1,117,429
AT&T CORP 3,171,462 3,870,825
AVERY DENNISON CORP 194,275 310,931
AVON PRODUCTS INC 2,058,570 3,124,050
BANK ONE CORP 1,468,823 1,381,445
BANKAMERICA CORPORATION 2,819,501 2,302,785
SCHEDULE I
EMPLOYEES' SAVINGS & INCENTIVE PLAN OF
CONSUMERS ENERGY COMPANY
ITEM 27(a) - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1998
(Continued)
Current
Identity of Issuer and Title of Issue Cost Value
----------- ----------
BECTON DICKINSON & COMPANY $ 606,888 $1,229,400
BELL ATLANTIC CORP 2,156,129 2,921,400
BELLSOUTH CORPORATION 642,788 1,446,375
BRISTOL MYERS SQUIBB CO 1,706,589 4,951,063
BRITISH PETROLEUM AMOCO PLC 1,447,782 1,706,100
BURLINGTON NORTHERN SANTA FE CORP 3,153,246 3,277,725
CADENCE DESIGN SYS INC 943,715 886,550
CARDINAL HEALTH INC 3,139,723 4,818,063
CIGNA CORP 1,074,035 1,175,150
CISCO SYS INC 424,096 918,844
CITIGROUP INC 5,390,075 5,299,172
COLGATE PALMOLIVE CO 3,453,161 3,807,875
COMERICA INC 2,001,529 2,304,738
COMPAQ COMPUTER CORP 3,556,104 4,678,800
COMPUTER ASSOC INTL INC 1,846,120 2,199,450
CONSOLIDATED NATURAL GAS CO 2,169,999 2,149,200
DANA CORPORATION 455,599 666,263
DEERE & CO 872,995 591,750
DELL COMPUTER CORP 1,004,866 1,222,231
DIAL CORP 1,846,812 2,757,563
DOMINION RESOURCES INC 1,062,943 1,257,575
EL PASO ENERGY CORP 587,187 738,025
EQUITABLE COMPANIES INC 134,343 196,775
EXXON CORP 868,452 899,438
FEDERAL MOGUL CORP 1,153,787 1,273,300
FEDERAL NATL MTG ASSN 3,136,049 4,218,000
FIRST UNION CORP 1,764,748 2,219,656
FLORIDA PROGRESS CORP 1,560,081 1,801,463
FLOWERS INDUSTRY INC 226,738 263,313
FORD MOTOR COMPANY 1,270,191 1,836,919
FORT JAMES CORP 473,795 552,000
FPL GROUP INC 1,515,940 1,670,038
GENERAL DYNAMICS CORP 459,251 448,400
GENERAL ELECTRIC COMPANY 2,662,942 9,261,600
GENERAL MILLS INC 1,336,560 1,430,600
GLAXO WELLCOME 397,045 771,450
GOODRICH, B F CO 566,179 634,988
GUIDANT CORP 1,482,156 2,354,000
HALLIBURTON CO 2,232,162 1,581,975
HARTFORD FINANCIAL SERVICES GROUP 1,264,066 2,249,875
HARTFORD LIFE INC 1,329,734 1,398,000
HEALTH MGMT ASSOC 152,621 262,744
HEALTHSOUTH CORP 3,906,695 3,155,425
HEINZ, H J CO 877,928 894,675
HOME DEPOT INC 1,415,038 5,323,313
HONEYWELL INC 1,057,242 1,137,219
SCHEDULE I
EMPLOYEES' SAVINGS & INCENTIVE PLAN OF
CONSUMERS ENERGY COMPANY
ITEM 27(a) - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1998
(Continued)
Current
Identity of Issuer and Title of Issue Cost Value
---------- ----------
HOUSEHOLD INTL INC $ 211,780 $ 221,900
HOUSTON INDUSTRIES INC 1,333,818 1,753,819
INGERSOLL-RAND COMPANY 517,129 807,975
INTEL CORPORATION 2,941,562 5,264,175
INTERNATIONAL BUSINESS MACHINES CORP 2,146,582 4,056,250
JONES APPAREL GROUP INC 351,116 322,113
KANSAS CITY SOUTHERN INDS INC 1,374,169 1,701,888
LEAR CORP 1,559,019 1,166,550
LILLY, ELI & CO 803,331 924,300
LINCARE HLDGS INC 701,896 831,531
LOCKHEED MARTIN CORPORATION 639,032 525,450
LOWE'S COMPANIES INC 930,417 2,723,175
LUCENT TECHNOLOGIES INC 1,516,121 4,441,475
MARSH & MCLENNAN COMPANIES 1,956,517 3,839,344
MASCO CORP 900,703 1,132,750
MCI WORLDCOM INC 4,115,131 6,249,425
MCKESSON CORP 1,303,797 1,257,094
MERCK & COMPANY INC 1,120,993 2,301,000
MERITOR AUTOMOTIVE INC 251,762 238,006
MICROSOFT CORP 3,971,219 10,207,400
MOBIL CORP 959,025 1,123,913
MONTANA POWER CO 919,009 2,007,969
MORGAN STANLEY DEAN WITTER 332,447 958,500
MYLAN LABS INC 394,517 355,950
NATIONAL SERVICE INDUSTRIES INC 566,811 425,600
NEW CENTURY ENERGIES INC 1,102,412 1,145,625
NORTHERN TELECOM LTD 2,341,543 2,655,000
NORTHERN TRUST CORP 561,760 689,769
OGDEN CORP 539,618 466,163
OMNICOM GROUP 299,304 377,000
PECO ENERGY CO 1,636,171 1,786,900
PEPSICO INC 1,300,849 1,504,200
PFIZER INC 1,840,701 2,600,000
PHILIP MORRIS COMPANIES INC 1,579,328 3,295,600
PITNEY BOWES INC 2,837,092 4,432,794
PRECISION CASTPARTS CORP 668,116 477,900
PROCTER & GAMBLE CO 2,654,646 3,049,838
QUAKER OATS CO 488,717 583,100
REVLON INC, CLASS A 424,262 189,950
REYNOLDS & REYNOLDS CO 793,724 846,394
SBC COMMUNICATIONS INC 1,026,347 1,362,075
SCHERING PLOUGH CORP 330,579 1,878,500
SEARS ROEBUCK & CO 440,471 395,250
SEPRACOR INC 413,610 625,688
SERVICE CORP INTL 1,186,866 1,412,119
SMURFIT STONE CONTAINER CORP 542,913 660,963
SCHEDULE I
EMPLOYEES' SAVINGS & INCENTIVE PLAN OF
CONSUMERS ENERGY COMPANY
ITEM 27(a) - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1998
(Continued)
Current
Identity of Issuer and Title of Issue Cost Value
----------- -----------
SOLUTIA INC $ 1,060,994 $ 845,775
SOUTHERN CO 329,560 325,500
SOUTHWEST AIRLINES CO 340,083 505,931
SUN MICROSYSTEMS INC 343,521 702,125
SUNDSTRAND CORP 501,217 446,125
SUNOCO INC 1,115,734 962,869
TANDY CORP 3,324,829 3,303,238
TELLABS INC 490,315 534,788
THOMAS & BETTS CORP 361,494 281,531
TJX COS INC 834,717 1,757,400
TOMMY HILFIGER CORP 340,629 468,000
TRICON GLOBAL RESTAURANTS INC 1,225,585 1,268,163
TYCO INTL LTD 3,776,717 5,175,013
UAL CORP 1,732,115 1,205,688
UNITED TECHNOLOGIES CORP 2,961,067 5,046,000
UNIVERSAL HEALTH SVS INC 551,508 498,000
UST INC 320,670 408,038
USX MARATHON GROUP 2,152,446 2,289,500
VIACOM INC, CLASS B 2,288,248 3,256,000
WAL MART STORES INC 325,066 684,075
WARNER LAMBERT CO 2,145,011 2,646,600
WASTE MGMT INC 1,334,537 1,473,350
WELLS FARGO & CO 4,115,714 4,465,013
XEROX CORPORATION 154,606 283,200
----------- ------------
TOTAL COMMON STOCK OF CORPORATIONS OTHER
THAN CMS ENERGY CORPORATION (Fund B) $183,200,306 $251,579,928
------------ -----------
*COMMON STOCK OF CMS ENERGY CORPORATION
(Fund C) $134,068,835 $276,748,963
------------ ------------
LOANS TO MEMBERS (Fund D) (Loans mature
during periods ranging from 0-10
years and at interest rates from
5.25% to 8.50% $ 29,963,181 $ 29,963,181
------------ -----------
NICHOLAS-APPLEGATE CORE GROWTH
INSTITUTIONAL PORTFOLIO (Fund E) $ 32,575,798 $ 35,244,333
------------ ------------
SMITH BARNEY INTERNATIONAL EQUITY
COLLECTIVE TRUST (Fund F) $ 15,331,478 $ 17,842,780
------------ ------------
SCHEDULE I
EMPLOYEES' SAVINGS & INCENTIVE PLAN OF
CONSUMERS ENERGY COMPANY
ITEM 27(a) - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1998
(Continued)
Current
Identity of Issuer and Title of Issue Cost Value
- ------------------------------------- ----------- ------------
*CLASS G COMMON STOCK OF CMS ENERGY
CORPORATION (Fund G) $ 4,933,539 $ 5,891,950
------------ ------------
Total All Funds $493,493,159 $710,691,157
============ ============
*SHORT-TERM INVESTMENTS - STATE STREET $ 26,242,843 $ 26,242,843
(Funds A, B, C, E, F and G) ------------ ------------
Total Investments $519,736,002 $736,934,000
============ ============
*Represents Party-in-Interest
<TABLE>
SCHEDULE II
EMPLOYEES' SAVINGS & INCENTIVE PLAN OF CONSUMERS ENERGY COMPANY
ITEM 27(d) SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
<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>
*State Street Bank
& Trust Short-Term
Investment Fund
- Purchases 384 100,133,160 100,133,160 N/A 100,133,160 100,133,160 N/A
- Sales 168 96,083,380 N/A 96,083,380 96,083,380 96,083,380 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 4, 1999 included in the Employees'
Savings & Incentive Plan of Consumers Energy Company's Annual Report
on Form 11-K for the year ended December 31, 1998 into CMS Energy Corporation's
previously filed Registration Statement Files No. 33-29681, No. 33-61595 and
No. 333-76347.
ARTHUR ANDERSEN LLP
Detroit, Michigan,
June 4, 1999
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, 1999.
