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United States Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the quarter ended September 30, 2002
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from __________ to __________
Commission File Registrant; State of Incorporation; IRS Employer
Number Address and Telephone Number Identification No.
-------------------- ---------------------------------------- ------------------
333-47938 Consumers Funding LLC 38-3575109
(Exact name of Registrant as
specified in its charter)
(Delaware)
212 W. Michigan
Jackson, Michigan 49201
(517) 788-0250
Securities registered pursuant to Section 12 (b) of the Act: None.
Securities registered pursuant to Section 12 (g) of the Act: None.
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the Registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
YES [X]* NO [ ]
Consumers Funding LLC meets the conditions set forth in General
Instruction H(1)(a) and (b) of the Form 10-Q and is, therefore filing
this Form 10-Q with the reduced disclosure format. In accordance with
Instruction H, Part I, Item 2 has been reduced and Parts III, Items 2,
3 and 4 have been omitted.
The aggregate market value of the voting and non-voting common equity
held by non-affiliates of the Registrant: None.
Documents incorporated by reference:
Not applicable.
* While this Form 10-Q has been filed on the specified due date, it does not
contain the certification required by the Sarbanes-Oxley Act of 2002 and
Rule 13a-14. The Securities and Exchange Commission thus will not consider
this Form 10-Q to be timely.
1
CONSUMERS FUNDING, LLC
FORM 10-Q QUARTERLY REPORT TO
THE SECURITIES AND EXCHANGE COMMISSION
FOR THE QUARTER ENDED SEPTEMBER 30, 2002
TABLE OF CONTENTS
PAGE
PART I: Financial Information
Management Narrative Analysis 3
Financial Statements 5
Part II: Other Information
Item 1: Legal Proceedings 14
Item 5: Other Information 14
Item 6: Exhibit and Report on Form 8-K 14
Signatures 15
2
CONSUMERS FUNDING LLC
MANAGEMENT'S NARRATIVE ANALYSIS OF RESULTS OF OPERATION
This Management's Narrative Analysis (MNA) of the results of operation of
Consumers Funding LLC (Consumers Funding) is an abbreviated format pursuant to
Instruction H of Form 10-Q. The MNA refers to Consumers Funding's Notes to
Financial Statements and should be read in conjunction with such Financial
Statements and Notes.
This Form 10-Q and other written and oral statements from Consumers Funding may
contain forward-looking statements as defined by the Private Securities
Litigation Reform Act of 1995. These forward-looking statements are subject to
various factors that could cause Consumers Funding's actual results to differ
materially from the results anticipated in such statements. Consumers Funding
has no obligation to update or revise forward-looking statements regardless of
whether new information, future events or any other factors affect the
information contained in such statements. Consumers Funding does, however,
discuss certain risk factors, uncertainties and assumptions in this MNA, and in
various public filings it periodically makes with the Securities and Exchange
Commission. Consumers Funding designed this discussion of potential risks and
uncertainties, which is by no means comprehensive, to highlight important
factors that may impact Consumers Funding's outlook.
Consumers Funding, a Delaware limited liability company, whose sole member is
Consumers Energy Company (Consumers), was formed by Consumers on October 11,
2000. Consumers is an electric and gas utility and is a wholly owned subsidiary
of CMS Energy Corporation. Consumers Funding was organized for the sole purpose
of purchasing and owning securitization property (see below), issuing
securitization bonds, pledging its interest in securitization property and other
collateral to the trustee to collateralize the securitization bonds, and
performing activities that are necessary, suitable or convenient to accomplish
these purposes.
On November 8, 2001, Consumers Funding issued $468.6 million of securitization
bonds. Consumers Funding used the proceeds from the securitization bond issuance
to purchase securitization property from Consumers. As discussed in Note 1 to
the Financial Statements, securitization property represents the irrevocable
right of Consumers to collect a nonbypassable Securitization Charge
(Securitization Charge) from customers in accordance with a financing order
issued by the Michigan Public Service Commission (MPSC). The securitization
property, which is classified as a securitization receivable, along with
earnings on cash deposited with the trustee, resulted in the recording of $5.7
million of interest income for the three months ended September 30, 2002.
Interest expense associated with the securitization bonds totaled $5.7 million
for the same three-month period. For the nine months ended September 30, 2002,
interest income totaled $17.2 million and interest expense totaled $17.2
million.
Consumers, as servicer, began billing a Securitization Charge to electric
customers beginning with its December 2001 billing cycle. The surcharge
currently totals $.001427 per kilowatt-hour. In the servicing agreement between
Consumers Funding and Consumers, Consumers is required to remit its
Securitization Charge collections to the trustee each business day. Through
September 30, 2002, Consumers had remitted approximately $40.4 million of
Securitization Charge collections to the trustee, which was sufficient for the
first and second payments of securitization bond principal, interest and related
expenses, which were completed July 20, 2002, in the amount of $25.4 million. An
additional payment was made on October 20, 2002, in the amount of $13.4 million
which was recorded in the fourth quarter.
Under the servicing agreement, Consumers is required to request periodic
Securitization Charge adjustments from the MPSC. The request for an adjustment
must be submitted at least 45 days before the
3
adjustment may take place. Adjustments will be made annually, and then quarterly
beginning approximately one year before the expected final payment date of the
last maturing class of securitization bonds. Adjustments to the Securitization
Charge are based, among other things, on actual Securitization Charge revenue
collections and updated assumptions by Consumers as to projected future
deliveries of electricity to customers.
A request for adjustment was submitted on October 15, 2002 and approval by the
MPSC was granted on November 7, 2002. The new surcharge becomes effective with
the December 2002 billing cycle and will be $0.001328 per kilowatt-hour.
CHANGE IN AUDITORS
On April 22, 2002 the Board of Directors of Consumers, upon the recommendation
of the Audit Committee of the Board, voted to discontinue using Arthur Andersen,
LLP to audit Consumers' financial statements, including the financial statements
for Consumers Funding, for the year ending December 31, 2002. Consumers Funding
previously retained Arthur Andersen to review its financial statements for the
quarter ended March 31, 2002. On May 23, 2002, Consumers' Board of Directors
engaged Ernst & Young to audit its financial statements, including the financial
statements of Consumers Funding, for the year ending December 31, 2002. Ernst &
Young has hired some of Arthur Andersen's Detroit office employees, including
some of the former auditors from the Consumers Funding audit engagement team.
As a result of certain financial reporting issues surrounding round trip trading
transactions at CMS MST, Arthur Andersen notified CMS Energy that Arthur
Andersen's historical opinions on CMS Energy's financial statements for the
fiscal years ended December 31, 2001 and December 31, 2000 cannot be relied
upon. However, this is not the case for Consumers Funding. Arthur Andersen's
reports on Consumers Funding's financial statements for the fiscal year ended
December 31, 2001 contained no adverse or disclaimer of opinion. Nor were the
reports qualified or modified regarding uncertainty, audit scope or accounting
principles.
During the fiscal year ended December 31, 2001 and through the date of their
opinion for the quarter ended March 31, 2002, Consumers Funding and Arthur
Andersen did not disagree on any matter of accounting principle or practice,
financial statement disclosure, or auditing scope or procedure. If Arthur
Andersen and Consumers Funding had disagreed on these matters and they were not
resolved to Arthur Andersen's satisfaction, Arthur Andersen would have noted
this in its report on Consumers Funding's financial statements.
During Consumers Funding's most recent fiscal year ended December 31, 2001 and
the subsequent interim period through June 10, 2002, Consumers did not consult
with Ernst & Young regarding any matter or event identified by SEC laws and
regulations. However, as a result of certain financial reporting issues
surrounding "round trip" trading transactions at CMS MST, Ernst & Young is in
the process of re-auditing CMS Energy's consolidated financial statements for
each of the fiscal years ended December 31, 2001 and December 31, 2000, and
includes audit work at Consumers Funding for the year ended 2001.
In light of the foregoing circumstances, we cannot issue a certification to
accompany the Report pursuant to 18 U.S.C 1350, as adopted pursuant to Sections
302 and 906 of the Sarbanes-Oxley Act of 2002.
4
CONSUMERS FUNDING LLC
STATEMENTS OF INCOME
(UNAUDITED)
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30 2002 2001 2002 2001
- ----------------------------------------------------------------------------------------------------------------
In Thousands
OPERATING REVENUES
Interest Income - Consumers Energy $ 5,678 $0 $ 17,072 $0
Interest Income 40 0 177 0
Other Operating Revenue - Consumers Energy 308 0 1,055 0
Other Operating Revenue 2 0 8 0
-------------------------------------------------
Total Operating Revenues 6,028 0 18,312 0
- ----------------------------------------------------------------------------------------------------------------
OPERATING EXPENSES
Interest Expense 5,711 0 17,220 0
Service Fee - Consumers Energy 288 0 991 0
Administration Fee - Consumers Energy 20 0 64 0
Other 2 0 19 0
-------------------------------------------------
Total Operating Expenses 6,021 0 18,294 0
- ----------------------------------------------------------------------------------------------------------------
NET INCOME (LOSS) $ 7 $0 $ 18 $0
- ----------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these statements.
5
CONSUMERS FUNDING LLC
STATEMENTS OF CASH FLOWS
(UNAUDITED)
NINE MONTHS ENDED
SEPTEMBER 30 2002 2001
- ----------------------------------------------------------------------------------------------------------------
In Thousands
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 18 $0
Changes in Current Assets and Liabilities:
Interest Receivable - Consumers Energy 2,257 0
Interest Payable 1,107 0
Accounts Payable - Consumers Energy 179 0
Accounts Payable - Other 2 0
----------------------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 3,563 0
- ----------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Reduction of Securitization Receivable 18,600 0
----------------------------
NET CASH PROVIDED BY INVESTING ACTIVITIES 18,600 0
- ----------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Securitization Bonds Payable (8,345) 0
Member's Investment 0 1
----------------------------
NET CASH PROVIDED BY/(USED IN) FINANCING ACTIVITIES (8,345) 1
- ----------------------------------------------------------------------------------------------------------------
NET INCREASE IN CASH AND CASH EQUIVALENTS 13,818 0
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 3,604 0
----------------------------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 17,422 $ 1
================================================================================================================
The accompanying notes are an integral part of these statements.
6
CONSUMERS FUNDING LLC
BALANCE SHEETS
ASSETS
SEPT. 30 DEC. 31 SEPT. 30
2002 2001 2001
(UNAUDITED) (UNAUDITED)
- ----------------------------------------------------------------------------------------------------------------
In Thousands
CURRENT ASSETS
Restricted Cash $ 17,422 $ 3,604 $1
Securitization Receivable - Consumers Energy 26,231 15,650 0
Interest Receivable - Consumers Energy 0 2,257 0
----------------------------------------------
Total Current Assets 43,653 21,511 1
NON-CURRENT ASSETS
Securitization Receivable - Consumers Energy 423,761 452,942 0
----------------------------------------------
Total Non-current Assets 423,761 452,942 0
- ----------------------------------------------------------------------------------------------------------------
TOTAL ASSETS $ 467,414 $ 474,453 $1
================================================================================================================
LIABILITIES AND MEMBER'S EQUITY
CURRENT LIABILITIES
Securitization Bonds Payable $ 26,694 $ 15,650 0
Accounts Payable - Consumers Energy 308 129 0
Accounts Payable - Other 2 0 0
Interest Payable 4,496 3,389 0
----------------------------------------------
Total Current Liabilities 31,500 19,168 0
- ----------------------------------------------------------------------------------------------------------------
NON-CURRENT LIABILITIES
Securitization Bonds Payable 433,553 452,942 0
----------------------------------------------
Total Non-current Liabilities 433,553 452,942 0
- ----------------------------------------------------------------------------------------------------------------
MEMBER'S EQUITY
Total Member's Equity 2,361 2,343 1
----------------------------------------------
TOTAL LIABILITIES AND MEMBER'S EQUITY $ 467,414 $ 474,453 $1
================================================================================================================
The accompanying notes are an integral part of these Balance Sheets.
7
CONSUMERS FUNDING LLC
STATEMENTS OF MEMBER'S EQUITY
(UNAUDITED)
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30 2002 2001 2002 2001
- ----------------------------------------------------------------------------------------------------------------
In Thousands
BALANCE AT BEGINNING OF PERIOD $ 2,354 $ 0 $ 2,343 $ 0
Add:
Net Income 7 0 18 0
Member's Investment 0 0 0 1
--------------------------------------------------
BALANCE AT END OF PERIOD $ 2,361 $ 0 $ 2,361 $ 1
==================================================
The accompanying notes are an integral part of these statements.
8
CONSUMERS FUNDING LLC
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
These interim Financial Statements have been prepared by Consumers Funding
LLC (Consumers Funding) In management's opinion, the unaudited information
contained in this report reflects all adjustments necessary to assure the
fair presentation of financial position, results of operations and cash
flows for the periods presented. These Notes to Financial Statements and
the related Financial Statements should be read in conjunction with the
Financial Statements and Notes to Financial Statements contained in
Consumers Funding's Form 10-K for the year ended December 31, 2001, which
includes the Report of Independent Public Accountants.
1. ORGANIZATION AND NATURE OF OPERATIONS
Consumers Funding, a Delaware limited liability company, whose sole member
is Consumers Energy Company (Consumers), was formed by Consumers on October
11, 2000. On January 22, 2001, Consumers completed a $1,000 equity
contribution to Consumers Funding. Consumers is an electric and gas utility
and is a wholly owned subsidiary of CMS Energy Corporation. Consumers
Funding was organized for the sole purpose of purchasing and owning
securitization property (see below), issuing securitization bonds, pledging
its interest in securitization property and other collateral to the trustee
to collateralize the securitization bonds, and performing activities that
are necessary, suitable or convenient to accomplish these purposes.
Securitization property represents the irrevocable right of Consumers, or
its successor or assignee, to collect a nonbypassable Securitization Charge
(Securitization Charge) from customers in accordance with the October 24,
2000 MPSC Financing Order (MPSC Financing Order). As modified by rehearing
on January 4, 2001, the MPSC Financing Order authorizes the Securitization
Charge to be sufficient to recover $468.6 million aggregate principal
amount of securitization bonds, plus an amount sufficient to provide for
any credit enhancement, to fund any reserves and to pay interest,
redemption premiums, if any, servicing fees and other expenses relating to
the securitization bonds. For financial reporting purposes, the purchase of
the securitization property has been accounted for as a financing activity
by Consumers Funding in the amount of $468.6 million. Accordingly,
Consumers Funding has classified the purchase of securitization property as
a securitization receivable from Consumers in the financial statements.
Consumers Funding's organizational documents require it to operate in a
manner so that it would not be consolidated into the bankruptcy estate of
Consumers in the event Consumers becomes subject to a bankruptcy
proceeding. Consumers and Consumers Funding have agreed that in the event
of Consumers' bankruptcy, the parties will treat the transfer of the
securitization property to Consumers Funding as a true sale. The
securitization bonds are treated as debt obligations of Consumers Funding.
For financial reporting, Federal income tax and State of Michigan income
and franchise tax purposes, the transfer of securitization property to
Consumers Funding is treated as part of a financing arrangement and not as
a sale. Furthermore, the results of operations of Consumers Funding are
consolidated with Consumers for financial and income tax reporting
purposes.
Consumers Funding is legally separate from Consumers. The assets and income
of Consumers Funding, including without limitation, the securitization
property, are not available to creditors of Consumers or CMS Energy
Corporation.
9
On November 8, 2001, Consumers Funding issued $468.6 million of
securitization bonds, Series 2001-1, in six different classes. Consumers
Funding used the proceeds to fund the purchase of securitization property
from Consumers. The principal amount of the securitization bonds, interest,
fees and required overcollateralization for the securitization bonds, will
be recovered through Securitization Charges collected from electric retail
customers taking delivery of electricity from Consumers or its successor
based on MPSC approved rate schedules and as permitted by contracts between
Consumers and certain specific customers.
Consumers, as servicer, collects Securitization Charges from its customers
and deposits collections daily into the General Subaccount held by the
trustee (The Bank of New York). The trustee is required to use these funds
to make principal and interest payments on the securitization bonds and to
pay certain fees and expenses of Consumers Funding.
Consumers Funding has no employees. Under the servicing agreement with
Consumers, Consumers is required to manage and administer the
securitization property and to collect Securitization Charges on Consumers
Funding's behalf. Consumers receives a monthly servicing fee of one twelfth
times 0.25 percent of the principal amount of securitization bonds
outstanding as of the payment date. The servicing agreement also requires
Consumers to file annual Securitization Charge adjustment requests with the
MPSC. These Securitization Charge adjustment requests will be based on
actual Securitization Charge revenue collections and Consumers' updated
assumptions as to projected future deliveries of electricity to customers,
expected delinquencies and write-offs, future payments and expenses
relating to securitization property and the securitization bonds, any
deficiency in the Capital or Overcollateralization Subaccounts and any
amounts on deposit in the Reserve Subaccount.
2. SIGNIFICANT ACCOUNTING POLICIES
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to
make estimates and assumptions. These estimates and assumptions affect the
reported amount of revenues, expenses, assets, and liabilities and
disclosure of contingencies. Actual results could differ from these
estimates.
INCOME TAXES
Consumers Funding has elected not to be taxed as a corporation for Federal
income tax purposes. Consumers Funding is treated as a division of
Consumers, and accordingly, will not be treated as a separate taxable
entity.
RESTRICTED CASH
The trustee has established the following subaccounts for the
securitization bonds.
GENERAL SUBACCOUNT: The General Subaccount is comprised of Securitization
Charge collections and interest earned from short-term investments. These
amounts accumulate until the trustee pays principal, interest, service and
administration fees and other expenses. At September 30, 2002, the General
Subaccount totaled $14.6 million. These funds are used by the trustee for
the scheduled payments of principal and interest to bondholders and to pay
expenses of Consumers Funding.
10
RESERVE SUBACCOUNT: The Reserve Subaccount includes any Securitization
Charge collections in excess of the amounts required in the General,
Overcollateralization and Capital Subaccounts. The trustee will draw funds
from this subaccount if the General Subaccount is insufficient to make
scheduled payments. At September 30, 2002, the Reserve Subaccount totaled
approximately $463,000.
OVERCOLLATERALIZATION SUBACCOUNT: On each payment date, the trustee will
deposit in the Overcollateralization Subaccount a predetermined, specified
amount so that the account balance reaches the required amount of $2.3
million, which represents 0.5 percent of the initial outstanding principal
balance of the securitization bonds. If amounts available in the General
Subaccount and the Reserve Subaccount are not sufficient on any payment
date to make scheduled payments to the securitization bondholders and to
pay the required expenses, fees and charges, the trustee will draw on the
amounts in the Overcollateralization Subaccount to make those payments. At
September 30, 2002, the Overcollateralization Subaccount totaled
approximately $126,000.
CAPITAL SUBACCOUNT: The Capital Subaccount was established on November 8,
2001. Consumers deposited $2.3 million into the Capital Subaccount, an
amount equal to 0.5 percent of the initial principal balance of the
securitization bonds. If amounts available in the General Subaccount, the
Reserve Subaccount and the Overcollateralization Subaccount are not
sufficient on any payment date to make scheduled payments of principal and
interest to the securitization bondholders and to pay the expenses, fees
and charges of Consumers Funding, the trustee will draw on amounts in the
Capital Subaccount to make those payments. At September 30, 2002, the
Capital Subaccount contained a balance of $2.3 million.
3. LONG-TERM DEBT
On November 8, 2001, Consumers Funding issued $468.6 million of
securitization bonds, in six classes at interest rates ranging from 2.59
percent to 5.76 percent. Consumers Funding used the proceeds from the
securitization bonds to purchase securitization property from Consumers.
11
Scheduled maturities and interest rates for the securitization bonds at
September 30, 2002 are as follows:
Expected
Principal Final Final
Bond Balance Payment Maturity
Class Rate (in thousands) Date Date
------------------------------------------------------------------------------------
A-1 2.59% $ 17,655 4/20/2003 4/20/2005
A-2 3.80% 84,000 4/20/2006 4/20/2008
A-3 4.55% 31,000 4/20/2007 4/20/2009
A-4 4.98% 95,000 4/20/2010 4/20/2012
A-5 5.43% 117,000 4/20/2013 4/20/2015
A-6 5.76% 115,592 10/20/2015 10/20/2016
-------
Total $460,247
Current Maturities (26,694)
--------
Long-Term Debt $433,553
========
Current maturities are based on the expected final payment dates indicated
above.
The amortization schedule for the securitization bonds provides for an
initial payment to bondholders on July 20, 2002 and then quarterly
thereafter. The following table provides the expected principal retirement
of the securitization bonds over the next five calendar years (in
thousands).
Principal
Year Retirement
---- ----------
2002 $ 15,650
2003 26,905
2004 27,786
2005 28,646
2006 29,591
As scheduled, on July 20, and October 20, 2002, approximately $8.3 million
and $7.3 million of the Class A-1 securitization bonds were retired,
respectively.
4. FAIR VALUE OF FINANCIAL INSTRUMENTS
Restricted cash is on deposit with the trustee and, by definition, is
carried at its fair value. At September 30, 2002, Consumers Funding had a
financial asset (representing its securitization receivable from Consumers)
of approximately $450 million, and financial liabilities (representing the
securitization bonds) with a cost basis of approximately $460 million. The
securitization receivable and securitization bonds are carried at cost,
which approximates fair value. Fair value is estimated based on quoted
market prices, or, in the absence of specific market prices, on quoted
market prices of similar investments or other valuation techniques.
12
5. SIGNIFICANT AGREEMENTS AND RELATED PARTY TRANSACTIONS
Consumers Funding has a securitization receivable with Consumers Energy in
the amount of approximately $450 million as of September 30, 2002.
Accordingly, Consumers Funding recognized interest income totaling $6
million and $17 million for the three and nine-month periods ended
September 30, 2002, respectively. In addition, Consumers Funding recognized
other operating income from Consumers Energy totaling $308,000 and
$1,055,000 for the three and nine-month periods ended September 30, 2002,
respectively.
Under the servicing and administration agreements, Consumers is required to
manage and administer the securitization property of Consumers Funding, and
to collect the Securitization Charge on Consumers Funding's behalf.
Consumers Funding pays Consumers a servicing fee (see Note 1) and an annual
administrative fee. These fees are payable to Consumers on each scheduled
quarterly payment date beginning July 20, 2002. For the three-month and
nine month periods ending September 30, 2002, Consumers Funding has
recorded total expenses associated with these fees of $308,000 and
$1,055,000, respectively.
13
CONSUMERS FUNDING LLC
PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
NONE
ITEM 4. OTHER INFORMATION
NONE
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
See Exhibit Index that appears following the Signature page to this
report.
(b) Reports on Form 8-K:
None
14
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
CONSUMERS FUNDING LLC
By: /s/ Laura L. Mountcastle
----------------------------------------
Laura L. Mountcastle
President, Chief Executive Officer,
Chief Financial Officer and Treasurer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this Quarterly Report has been signed below by the following persons on
behalf of Consumers Funding LLC and in the capacities and on the 14th
day of November 2002.
SIGNATURE TITLE
--------------------------- -----------------------------------
By /s/ Laura L. Mountcastle President, Chief Executive Officer,
--------------------------- Chief Financial Officer and
Laura L. Mountcastle Treasurer
By /s/ Glenn P. Barba Chief Accounting Officer and
--------------------------- Controller
Glenn P. Barba
CERTIFICATIONS
The Certifications of the principal executive officer and principal
financial officer will not be provided as a result of the ongoing
re-auditing of CMS Energy's financial statements for each of the fiscal
years ended December 31, 2001 and December 2000, which includes audit
work at Consumers Funding LLC for the year ended December 31, 2001. See
Management's Narrative "Analysis of Results of Operation- Change in
Auditors." These certifications will be filed by amendment to this Form
10-Q when the reaudit is complete.
15
INDEX TO EXHIBITS
EXHIBIT
NO. DESCRIPTION
------- --------------------------------------------------------
10(a) Monthly Servicer's Certificate dated August 20, 2002
10(b) Monthly Servicer's Certificate dated September 19, 2002
10(c) Monthly Servicer's Certificate dated October 18, 2002
10(d) Quarterly Servicer's Certificate dated October 18, 2002
16