Good morning, everyone and welcome to the CMS Energy 2011 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 5th. This presentation is also being webcast and is available on CMS Energy’s website in the Investor Relations section. At this time, I would like to turn the call over to Ms. Laura Mountcastle, Vice President and Treasurer. Please go ahead.

Thank you. Good morning and thank you for joining us today. With me are John Russell, President and Chief Executive Officer; and Tom Webb, Executive Vice President and Chief Financial Officer. Our earnings press release issued earlier today and the presentation used in this webcast are available on our website. 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-Qs. The forward-looking statements and information and risk factors sections discuss important factors that could cause results to differ materially from those anticipated in such statements. This presentation also includes non-GAAP measures. A reconciliation of each of these measures to the most directly comparable GAAP measure is included in the appendix and posted in the investor section of our website. Reported earnings could vary because of several factors, such as legacy issues associated with prior asset sales. Because of those uncertainties, the company isn’t providing reported earnings guidance. Now I’ll turn the call over to John.

Thanks, Laura and good morning everyone. I appreciate you joining us today for our second quarter earnings call. I’ll begin the presentation with a few brief comments about the quarter before turning the call over to Tom for a more detailed discussion on the financial results and the outlook for the remainder of the year. Then we will close with Q&A. Second quarter adjusted earnings per share was $0.26, the same as last year. The benefit from electric and gas rate relief was offset by higher rate base investment cost, storm restoration cost and accelerated investments in system reliability. The first half adjusted earnings per share was $0.77, up $0.13 or 20% over last year, primarily reflecting a rate relief and favorable first quarter weather. Tom will review the details with you in a few minutes. We remain on track to achieve our adjusted earnings per share guidance of a $1.44 a share. Let me give you an update on the Michigan Public Service Commission before I talk about our regulatory agenda. Commissioner Monica Martinez’s term officially ended July 2. However, she has agreed to remain a Commissioner for a while. The governor has been interviewing several candidates, but I can’t comment on the timing of the appointment, it’s his decision. Moving to the Regulatory Agenda. There are several important orders and filings during the second quarter. In June, we filed a new electric rate case requesting a $195 million increase based on a 10.7% return on equity. I’ll review the details of this filing on the next slide. The Commission approved the reconciliation of our energy optimization plan cost for 2009 and approved a $6 million incentive for exceeding the plan targets. We also requested approval to collect an $8 million incentive for exceeding the 2010 targets. More than…

Thanks, John. I’m delighted to add my welcome to everyone on the call this morning. I know it’s a very busy morning and some of you are just now dialing in, so thank you for that. Second quarter results were solid with reported GAAP earnings at $0.38 a share up $0.06 from last year, primarily for a one-time non-cash state income tax benefit of $0.12 offset partly by a one-time insurance benefit in 2010. Excluding the one-time favorable news in both years, adjusted EPS was $0.26 in each year. For the first half, as John mentioned, earnings were up 20% from last year and this is our best first half result in almost a decade. In May, Governor Schneider signed in to a new Michigan Corporate Income Tax in the law to improve the attractiveness of Michigan business. The overall future implications to us were minimal, the new law did not however continue our provision in the old Michigan business tax, that permitted the tax impacts of timing differences between cumulative book expenses and tax deductions to be recorded on balance sheet. Specifically for us, this results in a utility liability of $134 million that will be recorded as a regulatory asset for recovery later. Outside the utility, this tax results in a $32 million tax benefit, again we recognized in this quarter. As you can see on this slide, adjusted earnings were equivalent to last year despite unusually severe storms that John just described to you. Recall that in the first quarter results were substantially better than planned. We used some of this space to increase our efforts to further improve customer reliability, we’re still on course to do this, but with a little bit smaller step up in order to address the severity of the recent storms. Now…

Thank you very much, Mr. Webb. (Operator Instructions) Our first question comes from the line of Daniel Eggers with Credit Suisse. Please proceed. Daniel Eggers – Credit Suisse: Hi, good morning, guys, this is Kevin.

Good morning.

Good morning. Daniel Eggers – Credit Suisse: Good morning. And so with your – with the rate case filing, what is your expected volumes for 2012?

Sales volumes delivery? Daniel Eggers – Credit Suisse: Correct, correct, yeah.

We are planning on something that’s really just (inaudible) kind of in the ball park of what we’re talking to you about now, let’s see if we can get you some of that volume number here hold on just a second. So we are looking in that case it’s something that would show about 2% growth year-over-year if you think of that as ‘11 over ‘10 and that will apply that towards next year. Daniel Eggers – Credit Suisse: Okay. And then what are you think about the change in decoupling? When we will greater insight from the commission and the staff with regards to moving rate from the 10% cap in choice? I mean –

I think that’s a great question. And the first answer will come when we get sort of what I call the second part of the gas rate case after this settlement. The commissions do some time within this next month to talk to us a little bit about how they would handle decoupling. I think there we will see a signal when that direction comes out as to whether they want to modify the process a little bit going forward and we’ll just wait and see. I know there are different views in the States about how the decoupling should be handled, some people feel that it will be better just to make it energy efficiency and others like us feel that we like the more full decoupling approach for the economy, as well as the weather, but let’s all wait and see what happens. Daniel Eggers – Credit Suisse: Okay. And then my last question with regards to your dividend. It still looks like you are below your target dividend average of 65% to 70%, how – would you like to step that up an one big increase at the end of this year, beginning of the next year or would you like to do it till several years?

Okay, let me take that one. We’ve not given guidance on our payout ratio. We know we’re below the peers in that, we grow a little bit faster than our peers and our payout ratio are better a little bit than last. But that’s something we look at on an annual basis compared to the industry and say we need to be competitive with our peers and satisfy our shareholders. Daniel Eggers – Credit Suisse: Okay. Thank you. Take care.

Thank you.

Thanks, Kevin.

Your next question comes from the line of Greg Gordon with ISI Group. Please proceed. Greg Gordon – ISI Group: Good morning, gentlemen.

Hi, Greg.

Good morning. Greg Gordon – ISI Group: So can you – you might have touched on this and I missed it in your scripted comments, but you clearly had a lot more expenses related to storms than you’ve had planned for, but you are still on track to hit your targeted earnings for the year. So what’s – what have you done to modify your operating budget to afford just to stay on track?

Yeah, a couple of things. (Inaudible) is common on both – what we’ve done is we’ve accelerated expenses above and beyond the rate case levels this year. One of the key areas is forestry expense. Our focus is to improve the reliability to our customers, so what we’ve been able to do because of the success in the first half of this year continue to accelerate investment. Some of those investments so we will slow down a little bit based on the storms that we’ve had and paying for the storms and the recovery of those storms. So we’re in position pretty well to do that and as I mentioned earlier, we did have some favorable weather early in the year in the gas business to offset some of those storm cost. And what’s not in there now, but Tom covered is how hard it is in July.

And let me give you a little color on the tree trimming to help everybody because I know that’s one area that we’re able to do things effectively in short-term. So our plans for this year at nearly $10 million increase in tree trimming. After the first quarter we’re so good, we moved that up substantially by around another $10 million and we pulled that back just a little bit, not a lot and with this very hot July that John just mentioned we may not need to pull that back much at all. So the important message here I think is not only through tree trimming but through their entire business, we manage our cost to fit what our business needs. And so we work with reliability and we work the results as well. Greg Gordon – ISI Group: Okay. So the storm costs are really, functionally been offset by a strong first quarter and what looks like a strong third quarter in terms of top line. And then you’ve been able to sort of flux your reliability spending as well?

(Inaudible) wouldn’t even think too much about the third quarter. We’ve been able to flux through the first year, first year-to-date to handle it. Greg Gordon – ISI Group: Great. At a $1.44 share for the year, if we isolate just the electric utility, are you earning at your authorized return or below your authorized return? Where do you think that puts you?

When you look at the data you’re going to see us up a little bit for the trailing 13 months. And don’t let that coming get in the way, little bit of that may be a weather adjustment, but over the year we anticipate to be fairly close to those authorized levels, both electric and gas. And I can’t predict it could be a tenth or so above or tenth so under, but in that range. Greg Gordon – ISI Group: Great. Thank you guys.

Thank you.

Your next question comes from the line of Ali Agha with SunTrust. Please proceed. Ali Agha – SunTrust: Thank you, good morning.

Good morning. Ali Agha – SunTrust: I wanted to get, John, a sense from you. There were some rumblings in Michigan about a bill that was going to be introduced to support more retail open access for schools and you continue to have marketers and others talk about a push towards retail open access beyond the current limit. Can you just provide us the latest of what you’re gathering in terms of focus on that issue?

Yeah, sure. There has been a bill that has been introduced, but it’s not going anywhere and it’s to provide in exception to the 10% cap for schools only. There is – what we see is no traction in the bill, very little interest in the bill. But you said it right, Ali, it was promoted by out of states third-party marketers and there seems to be little interest in the legislature to move forward with that. Ali Agha – SunTrust: Okay. And nothing else from the Governor’s office any other anecdotal data point that gives you added comfort on this issue recently?

Yeah, I mean we’ve met with the Governor several times and he’s made some public statement, he is very supportive of the law, he likes the law the way it is. He doesn’t have any plans to change the law, we’ve – I don’t think the Senate or the House Energy Committee Chairman’s have mentioned it, but they’ve talked to us about it, they like the fact that we’re into a couple of years in the law as you know it only started in 2008. We’ve been making significant investments or partnering with the state the latest one that we combined with the DTE and Huntington bank to do the pure Michigan connect. The administration – this administration see us more as an economic development partner to help grow Michigan, make investments and move the state and business forward. So I’m very pleased to help and it’s what we want to do. Ali Agha – SunTrust: And secondly, I think, I heard you, John, say that the plan would be to file the next gas rate case in the third quarter. You also pointed out on a trailing 13-month average gas auto of 12.6% was obviously significantly above authorized. Are you comfortable that looking at the future plans that you get back to or below authorized levels or would that third-quarter filing be potentially push back a bit?

Ali, that’s a good question and I would answer get to the end and say, no. We think the timing is right for the filing, but the 12.6 % that you see from the trail through June 30th, if you whether adjust that right away you get to 11.5%. But then when you look at our full-year plans for the next six months, we’re in that pretty close to the zone of the authorized level of the 10.5%. So we feel really comfortable that what we’re doing is bringing our investment programs forward and then asking to get the recovery of those and rates in working too hard to keep our O&M down. So those are things that are received pretty well up in lancing.

And I’ll take a look at what I mentioned in the electric business. I mean that case that we filed there all capital spent with a reduction in O&M and that’s a good way to look at. We talked before about we’re trying to keep our base rates, we anticipate to keep our base rates at or below the rate of inflation going forward. And the way to do that is to go in to rate cases where you actually have reduction or very small increase in your O&M. Ali Agha – SunTrust: Okay. And last question. Tom, I think you mentioned no financial major block of equity, but fair to say for planning purposes between drift and perhaps more periodic equity about around 15 million a year or so is that a good rule of thumb to think about?

No, I tell you should look at our cash flow schedule we show you and if you put those together, I would – you think between $25 million and $30 million a year. The continuous equity being around $15 million and then the drift in the rest there, so that’s about the number to use $25 million to $30 million, you see $29 million forecast for this year. Ali Agha – SunTrust: Got it. Thank you.

You’re welcome.

Your next question comes from the line of Mark Barnett with Morningstar. Please proceed. Mark Barnett – Morningstar: Hey, good morning, guys.

Good morning. Mark Barnett – Morningstar: Couple of quick questions. You gave a lot of detail on the OpEx impact from those storms. Could you maybe talk a little bit about the internal CapEx from your plan that you may have incurred? And how those expenses are going to be recovered?

Yeah, the capital when you think of storms like that, we’ve shown you there is the impact on earnings. Usually a storm is split, but depends on the type of storm. Ice storm will be majority of capital, a little bit of less in O&M, most of the recovery outages based on wind and others will be the majority of O&M. So for planning purposes think of the split. The capital that we spent for restoration for the customers is in the plan. We’ve got the capital for that, it was the O&M that exceeded what our targets were for the first half of the year. Mark Barnett – Morningstar: Okay. That’s good. And then second, I guess more of a general economic question. Through the first six months given adjusted for weather you had a 2% increase in residential usage, permitting as far as correctly. Would you think is a similar factors that are driving that improvement?

Yeah, I’d tell you the way to look at that and what you’re seeing on that slide is full-year, just to relate that a little bit to help you on your questions that the residential side for the first half is up about 1% compared to our two-year and trending up. Commercials been down and flat and the industrial is what continues to grow for us. So what we’ve seen for the last year and half is the industrial recovery is driving substantially the rest of the state for us, the rest of our service territory. We’re watching the first quarter with good growth particularly on top of the 12% increase a year ago, the second quarter with good growth compared to the 12% a year ago increase. And so we see the industrial side leaning the way out where consumer confidence comes back and the residential is already turning around. So we see that being up about 2% for the year following that industrial up about 5% for the year, but the commercial side is lagging. And candidly that simply confidence people going back to the commercial sector for things that they need whether its haircuts or whatever it maybe and that part is coming around slower than the rest, I suspect we’ll see that turn up a little bit next year, not this year.

And one thing to just to add to that Michigan has got a reputation for the high-end employment, but if you think about two years ago, we were at 14.5% unemployment rate, we’re down to 10.5% which is the significant reduction. We’re still about a point above the national average, but we’re starting to see the employment at Michigan comeback and some of the autos comeback and start to hire different shares, and particularly when you think about the bolt on and some other things that are being produced here. We’re starting to see that unemployment number come down, which I also think maybe having a little impact on residential sales account. Mark Barnett – Morningstar: Okay. That’s a good detail. And just one more quick question, if I can. Yesterday on a call I had a mention of another legal challenge to your casper or even that have snapped back in the D. C. Circuit Court sometime this year. I was wondering if you heard anything about that, and how that might proceed if that – what are going to happen.

Yeah, I’ve not heard about it, it’s not unexpected though, I expect that. Everything that comes out of the EPA recently and probably in the near future will be challenged by somebody. So we’re looking at, we are – our planning purposes looks that what the order says, what the regulation requires and then we look at what the reality is, that what we expect through lawsuits and through fights to get this through. Our point is as we think at the end of the day that regulation will probably be delayed about a year, that’s where we’re looking at. Mark Barnett – Morningstar: Okay. Thanks. I appreciate it, guys.

Your next question comes from the line of Paul Ridzon with KeyBanc. Please proceed. Paul Ridzon – KeyBanc: Which regulation that we’re talking about being delayed a year?

That was casper. Paul Ridzon – KeyBanc: And what about (inaudible)?

No. Paul Ridzon – KeyBanc: No to that?

No, I mean that will be fought in courts, but the one that we are looking at right now that affects us most is casper. Paul Ridzon – KeyBanc: And then just take you back in all these questions? Schools, except for the schools, there is really nothing effort that could change the ROE?

No, that doesn’t seem to be much interest, Paul. I mean, people – I hear it from analysts and I hear it from outside energy providers, but they’re just doesn’t seem to be the interest here. And the reason is the administration looks it up with being the second largest investor in the state, the seventh largest employer in the state, we spent $2 billion a year on goods and services with the state that support 2700 companies in Michigan. So when they looked us, they would think, wow, this is a pretty important company to the success for the state of Michigan. Paul Ridzon – KeyBanc: Sounds good. Thank you.

You’re welcome.

Thanks, Paul.

Your next question comes from the line of Brian Russo with Ladenburg. Please proceed. Brian Russo – Ladenburg: Hi, good morning.

Good morning.

Good morning. Brian Russo – Ladenburg: Can you just maybe elaborate a little bit on the coal plant air permit expansion, remind us of the decision to delay that initially and is there a new kind of a time line for new base load needs and is there a greater amount of appetite for a clean coal plant in Michigan.

Yeah, great question. I will say just publicly, it was much easier to get the extension than it was the original air permit. But now that we have it at the end of the day the fundamental principles of why – why we went? Why we delayed it in the first place still whole through. The gas price is continue to be low, we believe that shale gas is real, it’s going to keep prices, gas prices low in the future. Despite the fact that we’re seeing an increase in customer demand, it’s not enough to justify a new plant and there is still uncertainty of what we’re going to do about our older small coal-fired unit. I mean those plants despite the fact that they are old they are dispatched at a high rate, nearly 70 % capacity factors. So nothing has really changed from that standpoint, but we thought it was in our best interest to request the extension just to provide an option for us in the future. Brian Russo – Ladenburg: Okay. And also just can you remind us how the decoupling mechanism works on the electric side, I thought it was a full decoupling and therefore a favorable margin variance is relative to favorable weathers somewhat mitigated. So how does that play out with strong expectations for the third quarter given the July weather?

That’s a very good question. On the electric side, you’re exactly right. It is full decoupling which includes the economy, includes the weather and energy efficiency. On the gas side we don’t have the weather offsets and decoupling. However, remember the mechanism reverses the levels in a rate case and it’s not really perfect. So when you get a very hot summer, you will get a little believe through of that good news and if you had a very mild summer by the way, you’ll get a believe through of that news the other way. So it’s not a 100% in the method that the decoupling is done when it’s done by average customers. So you’ll see pretty good coverage on that with decoupling, but you’ll see depending on the amount of heat in the summer month, some of that will flow through. But remember if it was very mild it can also go the other way. So it’s not a perfect mechanism. Brian Russo – Ladenburg: Understood. Thank you.

Thank you.

Your next question comes from the line of Mr. Mark Segal with Canaccord Genuity. Please proceed. Mark Segal – Canaccord Genuity: Hi, good morning. I was just wondering if you could provide an update on your activities surrounding smart metering.

Yeah. We’re moving forward with it albeit slowly. We have a plan in place to move forward with smart grid when the pilots are complete. We’re looking at a very incremental approach to this beginning with the electric business, beginning on the west side of the state near Grand Rapids. And then working its way around the state. We’ve eliminated the gas business, we don’t see a positive business case for changing for gas customers except those that are combination customers. But the business case today is sound with our operational cost reductions and with the investments that we make in smart grid we should be able to see or we will see a payoff for customers on a net present value basis. Mark Segal – Canaccord Genuity: Okay. And have you guys come to a determination yet over how long the project might stand from a commercial roll out standpoint?

It’s a pretty long roll out about six or seven years as I recall. Starts in at about 12 and should be done around 16 and something like that. So it’s scheduled, it’s done by geographic territory, so we can get the benefits of those areas, evaluate the customer profiles, are they actually reacting to smart grid and then move around to the other areas. So since we first proposed the if you followed us for a while we first proposed it, we’ve reduced the amount of investment about $125 million in that range, we’ve extended the timeframe for the implementation of it, and we’ve eliminated the gas only customers in the plan. Mark Segal – Canaccord Genuity: Okay. And has the technology validation from the pilot has that all been successfully concluded? And it’s just to go now in the 12 timeframe?

Yeah. Actually we made the affect that we’re kind of the followers of the pack, may be good for us as far as vendors and who we can secure for this. Mark Segal – Canaccord Genuity: Understood. Thanks for the great detail.

Thank you.

Your next question comes from the line of Jonathan Arnold with Deutsche Bank. Please proceed. Jonathan Arnold – Deutsche Bank: Good morning, guys.

Good morning.

Good morning. Jonathan Arnold – Deutsche Bank: I would ask a quick question on the cash per rule and – he said, John I think that your assumption is – that it’s going to be delayed a year?

Yeah. Jonathan Arnold – Deutsche Bank: What would happen if it is not? And I guess, even if it is you can have to make some interim changes in your dispatch practices, what might be the rate impacts on the fewer side of doing that giving the time line, and I guess the slight delay the time line on some of your complaints effort?

To the big five it really will have limited impact. We may have to accelerate slightly some investments, but I don’t have the exact number right now what we do. If it moves to 2012, so that on that too concerned about the impact it would be what happens with the smaller coal-fired units. But I think as we talked before those units we think our most impacted by the Mercury rule already established in Michigan. So that would be – when the mercury rule goes into effect in 2015 in Michigan that would determine the fate, if you will, of those smaller plants. And as for us what happens to the viability of the customers and so forth, if the rule goes force in 2012, I do believe that you’re going to see a quicker closure of some of the coal plants then probably what people are anticipating, which in turn of those plants are competitive could raise rates for customers. And I know that’s the case with our seven smaller units which are competitive today, but based on the rules that the EPA has come up with, I don’t think it’s likely that we would put the controls into those plants because of their age and the ultimate cost that’s required. Jonathan Arnold – Deutsche Bank: Since we are clear that’s a rule content question rather than the timing?

Yeah. Jonathan Arnold – Deutsche Bank: So based on that you’re saying, you’re likelihood is that though you don’t comply on those units unless something changes in the content of the rule?

Exactly. And the smaller units can just to make clear those smaller units can run right now till about 2015 not for say round purposes. Then we have a couple of options, one is to put the controls in and run them though we need to make to those decisions later this year or next year so that we are prepared for the 2015 target date. If we don’t put controls on them we could retire them or third option which is most likely right now but we haven’t looked at the rule in detail yet is to mothball. I mean, we can mothball them up for three years. Jonathan Arnold – Deutsche Bank: And does (inaudible) affect those units?

That’s what we’re evaluating right now Jonathan. I want to make sure I fully understand what though the impact is of (inaudible). Jonathan Arnold – Deutsche Bank: Okay. It sounds like your anticipating giving clarity little later this year.

Later this year or early next year, between those. Because, look we need to make a decision on what we’re going to do on so you know, probably at the end of this year or early next year. Jonathan Arnold – Deutsche Bank: And how would you view in the even to that you do involve (inaudible) or after procure (inaudible) otherwise? Any recent indications what that might do versus your plan of keeping these rates within the rate of inflation?

Shouldn’t affect it. And end of the day if we close them down, we want have any (inaudible) associated with those plants. So that would keep our rates lower. If we do invest in it, that would bring some capital but the only reason we had invest the capital in the smaller plants is if those plans would be competitive in the market which overall would save customers money. Jonathan Arnold – Deutsche Bank: All right. That’s taken enough time. Thank you John.

Thanks Jonathan. I appreciate it.

We have no further questions in the queue.

All right let me wrap up today if we can. First of all, as Tom said I know it’s a busy day some of you are flying between calls, so let me thank you for joining us again. We had another good quarter both operationally and financially. First half earnings were up 20% and that’s really a lot as we talked about to accelerate reliability spending and cover our storm restoration expense. One thing I want to highlight too we’ve eliminated all nuclear fuel risk with a DoE settlement. Jim Pruner and his team did a great job getting that one done and we remain committed to provide value to our customers and our shareholders. So thanks for joining us today and good luck with the rest of your calls.

This concludes today’s conference. We thank everyone for your participation.