Good morning, everyone and welcome to the CMS Energy 2009 Second Quarter Results and Outlook Call. This call is being recorded. Just a reminder, there will be a rebroadcast of this conference call today, beginning at noon Eastern Time, running through August 6. This presentation is also being webcast and is available on CMS Energy's website, in the Investor Relations section. And at this time, I would like to turn the call over to Ms. Laura Mountcastle, Vice President and Treasurer. Please go ahead.

Thank you. This presentation contains forward-looking statements. These statements are subject to risks and uncertainties and should be read in conjunction with our Form 10-Ks and 10-Q. The forward-looking statements and information and Risk Factors section discuss important factors that could cause results to differ materially from those anticipated in such statements. This presentation also includes non-GAAP measures when describing the company's results of operations and financial performance. A reconciliation of each of these measures to the most directly comparable GAAP measures is included in the appendix and posted in the Investor section of our website. We expect 2009 reported earnings to be about the same as adjusted earnings. Reported earnings could vary because of several factors. We are not providing reported earnings guidance reconciliation because of the uncertainties associated with those factors. Dave?

Thanks, Laura and good morning to those who are on the call. Thanks for joining us today for our second quarter earning call. I'll start the presentation with a brief update on the business and then I will turn the call over to Tom for a more detailed discussion on the financial results and outlook and then we'll close with questions and answers. Second quarter 2009 adjusted earning were on plan, at $0.26 a share. This is up $0.08 from last year, due in large part to increased rates and a gain from financing activities, and partially offset by decline in sales and higher operating cost at the utility. Tom will discuss second quarter variances in more detail in a few minutes. For full year, we continue to expect adjusted earning of $1 in quarter a share, unchanged from our original guidance introduced in February. Frankly stating our targets has been challenging with the softer economy and record mild summer here in Michigan. But we've been able to take down costs and implement other measures to offset those impact so far. Candidly we certainly could use some summer weather in August to help the cause we didn't have much in July. The Michigan economy has been in news frequently over the past six months. In the second quarter, Chrysler and General Motors filed for bankruptcy protection and quickly reorganized. General Motors is more significant to our company, and the good news is that Michigan will continue to be the location for many of GM's ongoing operations. In fact, they recently announced that Michigan was chosen over two other states as a site for a new small car assembly plant. And it showed support by General Motors for its long-term commitment to the state. Consumer Energy filed its Balanced Energy Initiatives…

Thanks Dave. Let me add my welcome to everyone on the call this morning. Glad to have you with us. Our second quarter earnings at $0.32 a share; were up $0.14 from last year. Excluding good news from the reserve that no longer is required for special identification associated with prior asset sales and the increase of the reserve associated with our environmental projected that they harbor. Adjusted earnings were $0.26 a share and that's up $0.08 from last year. The year-to-year improvement of $0.08 included improvements of the utility of $0.04 and enterprises plus the parent of another $0.04. Utility costs were inline with plan as was rate relief largely from full year impacts of prior orders. Outside of utility, we benefited from a gain associated with early retirement of debt. Now on this next slide; you can see our progress in the first half of the year toward a full year guidance that Dave mentioned at $1.25 a share, as well as what's left to go. And please note that the gain associated with the early retirement of debt in the second quarter is part of a total refinancing plan. In July, we retired $233 million of parent debt coming due a year from now and $87 million coming due in 2011. This is shown in the tender offer borrowing that costs us a nickel. With one exception, the cost and rate relief shown in the six months to go portion of the slide, largely are consistent with our plan. The adverse weather was $0.05 is not, weather in July has been abnormally mild. So far the weather in July has been one of the coolest on record. Even weather in Fairbanks was a bit warmer. We've offset this $0.05 deterioration with specific cost reductions, and were able…

Thank you very much, Mr. Webb. (Operator Instructions). Our first question comes from the line of Greg Gordon, Morgan Stanley. Please proceed.

God morning, guys.

Good morning, Greg.

Good morning, Greg.

So, can you just walk us through the refinancing activities and what the change in sort of net interest cost are from that? Are you saving money on interest expense net of the cost of the transaction? What were the relative rates of debt that you replaced?

Yeah, that's a good question Greg. Thanks. First what we've done is really pretty simple; we issued some new parent debt earlier in the year; issued some new utility debt. And we've taken that parent debt as the opportunity to tender for some of those maturities that we do in 2010 and 2011. Now, in doing that, we're keeping our interest rates roughly where they are. I wouldn't say that we've made any substantial improvement to them. But the market was good for us and the real benefit comes from taking those near-term maturities and pushing them out about 10 years. So that's the main benefit that you'd see.

Right. And what's the driving factor in your expectation of the modest industrial sales being less bad this year than what you had expected decline over the last quarter?

Yup. In the second quarter, it's certainly when we saw the depth of the problem with the auto side, even though there are small part of our business, they’re an important part, where clearly as people were headed into bankruptcy filings, they had a lot of their plans down for a good portion of the quarter. ... We are going to see that picking back up now as GM has announced its plants to reopen and it's beginning to schedule to run some plants. As our venue associated components suppliers and even in this case, I think some of the commercial impact will change favorably just a little bit as we see there. The little bit turn that we're seeing in the economy is allowing some of our other customers, whether they are food or furniture or pharmaceuticals or whatever to begin to pick up their schedules just a little bit, to begin to normalize. So it's kind of across the board, but the most visible part is the auto piece.

What if anything is in the public domain with regard to commentary around the self implementation of the rates you did in May, from either the staff of the Commission or the Commission themselves? I mean, what are the risks around getting that interim rate approved at a level you've implemented it?

Well, let me just say there's not a lot in the public domain other than the fact that the Public Service Commission did indeed hold a hearing. It was a fairly an eventful hearing. In fact, I justified personally I think very -- maybe two questions, and there were fairly white toast kind of questions. I'll just remind you what the process was. The new legislation allows for self implementation after six months. It does not require that the Public Service Commission take any action to improve that self implementation, though they have the opportunity to consider and potentially ask the utilities to self implement something less. They did a hearing for that purpose, chose not to really intervene in the process. They did issue in order, however in our case it was a bit unique. And that a lot of the concerns that some of our customer groups had, was that the legislation last year also requires a correction of this rates skewing or interclass rate subsidy that existed in Michigan for a long, long time. And as a result of that the rate adjustment that was going to take place with the final order in our view would have had different impacts on different classes of customers. And that created some concern, the commission therefore jumped and so go ahead and self implement your increase. But offset part of it by a refund of part of Palisades nuclear plant sale proceeds that were still being held in advance, and we did that, that limited the impact on the industrial class that would otherwise have had a reduction in the final order. That's a fair amount of detail, but all I'll say is the commission did issue an order in that regard. And we thought it made a lot of sense. We self implemented that increase. And of course we'll have to wait till the commission issues its final order in the November. I'll remind you that the way the process works is not unlike how it works at foot now, is when the commission comes out with the final order. If we have over collective in their view, we'll have to refund the difference with interest and net interest rate is established that LIBOR plus 5% for the first 25% of over collection and an equity level interest rate after that. So that's how the process works. We'll just have to see what the commission does in their November order. I will just tell you that we have very specifically adjusted the amount that we self implemented to be consistent with near-term very specific changes in capital spending and capital structure and issues of that nature. And we continue to believe that the number that we self implemented is very justifiable.

Thank you.

You're welcome.

Thanks, Greg. Good luck on the new assignment.

We have a question from the line of Dan Eggers, Credit Suisse. Please proceed.

Hey. Good morning. Can you talk a little bit more about the cost cutting that you guys are seeing to offset of the lower demand particularly in July? Where you're seeing the magnitude of the cuts brought on sustainability? And is there more room if August shows off bad?

Dan, that's a great question. A couple of thoughts; one thing we're doing is we are taking a look at any discretionary cost. And I think all companies are doing that in this environment. And there are still some small windows here and there that we are able to take advantage of to benefit our customers. Though there's another specific area, you recall that in July, we just launched our new -- July, a year ago, our SAP systems. And only now, are we beginning to be able to back off some of the additions of folks we put in, particularly around collections to do the introduction correctly. And so, we're seeing some productivity coming out of their boat. But what we have to add in -- and also productivity around the areas that give us some benefits of putting in an integrated software system. So that's given us a little bit of help. We're doing things, then again a lot of people are doing, were looking at some grants that may be of use for us as there's a lot more opportunities with the stimulus work that's going on today. And the other thing as I already mentioned, the UAs; those are down a little bit. Now, we don't completely control that of course. But there has been some benefit. We probably have got a little conservative in the last quarter as we were protecting for what we were concerned, would be a very difficult situation. But we've been able to back off, because the real numbers are a little bit better than that. So that gives us a little bit of benefit going into the second half. Even though the weather has been cool, which is not helpful to us here in the summer. The storms have been a little bit lighter. So the experience that we would expect here to have through this portion of the year, is a little bit lighter, may continue for a bit. So, there is a variety of cost cutting areas including just the tough hard nose stuff that anything that's discretionary right on through the productivity work that you do with new systems we're putting in place, and benefiting from those as best we can. That gives us enough all together that we can offset the nickel we showed you about soft weather in July. If that happens again in August, we will do everything in our power to offset that, but it's too soon to say that we ran into something that is adverse, we can deal with it. So let's see how it turns out.

How are you guys tracking on storm expenses or storm costs this year versus generally would be in plan and what we saw last year?

Yeah. A little bit better, because this mild weather where you don't see really hot days that typically bring on a thunder storm, used to traveling from New York into the Midwest; we know all about that. We haven't seen as much of that. But the way we planned for it, we got our average plans for storms for the rest of the year, just the way we look at normal weather for the rest of the year. So that will be in the end, better or worst depending on how mother nature treats us.

Okay. And then on bad debt expense, to clarify, you broadened the expectations for bad debt was going to be for the year; that 3.5, $3.6 million of auto bad debt that you incurred so far. Do you assume that it gets returned to you this year and is that netted against your full year bad debt expense or could that offer upside of GM and those guys actually pay you before year-end?

Yeah. You know our policy that we've talked about that we follow religiously from the accounting standpoint is, when some one goes into Chapter 11, have taken the the write-offs. So we have taken the write-off for the companies that we've shown you here that recently had gone through bankruptcy including GM, Chrysler, Metaldyne and so on. Once we have collected that money back, that's when we'll do a reversal. So our reserve reflects exactly what we know today. We are hopeful, I will say. That on General Motors, that maybe in August, maybe it's later, but sometime in the near-terms that we may actually get payment for -- not all, but most of the portion of what we had written off, because it will only be associated with the new GM that continues. Anything associated with the old GM, we won't get recovery on. So we factored that in, but we can't change our reserves till we see how that plays out.

Do you expect to get repayment on any other bankrupt parties or is it just some kind of GM a situation?

I think GM is a little bit unusual. But again, the way we do it, you really can't tell until you get through the court process on how that will play out. Our expectation is generally that we do not get paid. Obviously, there are some people that are able to do that in the end. But I'd say it's less of the majority to do that. So, the way I think you should look at it is that what we've written off will probably won't recoup. If we do it, it will be a nice little piece of upside.

How much of the drag in the second quarter was auto related, bankruptcy related bad debt expense?

We have a lot of that laid out in the $3.6 million that we showed on the slide. But the total bankruptcies so far this year have been about $6 million.

All right. Thank you very much. I appreciate it.

You're welcome. Thanks for the questions.

You have a question from the line of Edward Heyn of Catapult Capital Management. Please proceed.

Good morning.

Good morning.

Good morning.

I had a quick question on the sales forecast. Looking at the figures that the industrial sales, you guys have mentioned that the forecast has improved slightly since the last quarter call. But I'm also comparing the slide, just on the electric sales, on the page before; that's now 3.5% down versus I think in the first quarter it was 3% down. So I guess, is there some additional weakness that you're seeing I guess in the other sales sectors like the residential and the commercial, that's making that total volumes actually go down for the year?

Yes, there is. We had anticipated in our planning base that the industrial sales would be a little bit worse than what we see now today. So you see that favorable adjustment. On the residential side, we had anticipated that the sales would be soft off a little bit, but not as much as they are now that to about 1%, a little less than 1% off, is what we expect. So that's a little bit worse than we had originally anticipated. And then commercial, probably goes right along with that, just the similar piece of drop for the full year. But most of that was the hit that we took in the second quarter. So, I'd say it for the outlook for the rest of the year, industrials are little bit better as you see, residential is a little bit worse, came down about 1% instead closer to flat, and commercial pretty close to what we thought when I look at the numbers here, which is just flat.

Okay. And, but, just given the restructuring and the potential that I think the commercial, the industrial pay a large part of their rates in demands charges. Is that shift where the softness in residential versus industrial is actually a net headwind for you, or is it a help?

Yes. No question, when you see the hurt on the residential side, that's a little bit more of a hurt overall. But we've been able to factor that into our guidance in our forecast. So we're still comfortable with that

Got you. Okay. And then just a question. What is the bay harbor environmental project that you guys took a charge for this quarter?

Well, that could long, long story. I'm sure we run out of time on the call. Let me just say that the companies at the parent company level, not through the utility, was involved in redevelopment of the piece of property up north, in Lower Peninsula Michigan. And it was the reclamation of an abandoned cement plant. That project was actually completed almost a decade ago. Our involvement in it actually ended about 2001 or 2002; some things like that. But rules changed on mercury around the Great Lakes and there were some concerns with regard to let's call it (inaudible), from abandoned tailings from that cement plant operation that in some areas were more problematic than originally envisioned. And as a result of that, the EPA and the Michigan Department of Environmental Quality came to us, and ultimately that site became a reclamation project if you will. We had the obligations to other partners frankly, to deal with that. And so, we have been. That project is well along now, that's been going on for a close to five years. We were getting to the point now where we're very close to the filing what called remedial investigation alternate evaluation with the EPA. So to close out the scope of the works that needs to be done there. But specifically, the increase in the reserve is associated with the fact that in some of the areas, we had to implement additional water collection measures during the shoreline that prevents certain Ph accidences from occurring. And the disposal over that water to forecast long-term cost of continuing to operate those disposal facility, which simply had to be increase because of the increased volumes. And so that's where the charge is associated, quarter charges largely associated with the present value of long-term operating cost forecast for water disposal.

Got you. Thank you for -- sorry for making such a long explanation. But thank you for the time.

You're welcome.

Thanks for the question.

And sir, there are no more question in the queue at this time.

Well, thank you for joining us again today. Frankly, we thought that this call would be a bit uneventful. We haven't changed a whole lot in terms of our plan. And I guess that I would say that we seem to be comfortable with riding through the bumps in the economic and certainly some less than favorable summer weather. And we'll continue to work hard to deliver on our expectations, to deliver on our targets this year. A lot continues to go on, but I would just summarize by saying; we're on our plan for capital investment. We're pleased with the changes that occurred through the Michigan Energy Legislation last call. And so far we think they are working in the way we expected them to, to support our plan. A lot going on at both the State and really at the Federal level on issues like environmental regulations. We're very much involved in that process and factoring them into our plan. Again, thank you for joining us and we look forward to talking to you in the next quarter. Bye now.