6: EARNINGS PER SHARE — CMS ENERGY

Presented in the following table are CMS Energy's basic and diluted EPS computations based on income from continuing operations:


In Millions, Except Per Share Amounts
	Three Months Ended				Six Months Ended
June 30	2011		2010		2011		2010

Income Available to Common Stockholders
Income from continuing operations	$	101	$	100	$	234	$	189
Less income attributable to noncontrolling interest		1		2		1		2
Less preferred stock dividends		—		2		—		5

Income from Continuing Operations Available to Common Stockholders — Basic and Diluted	$	100	$	96	$	233	$	182

Average Common Shares Outstanding
Weighted average shares — basic		250.3		228.2		250.2		228.1
Add dilutive contingently convertible securities		11.3		19.3		11.0		19.5
Add dilutive non-vested stock awards and options		0.3		0.1		0.3		0.1

Weighted average shares — diluted		261.9		247.6		261.5		247.7

Income from Continuing Operations per Average Common Share Available to Common Stockholders
Basic	$	0.40	$	0.42	$	0.93	$	0.80
Diluted		0.38		0.39		0.89		0.74

Contingently Convertible Securities

When CMS Energy has earnings from continuing operations, its contingently convertible securities dilute EPS to the extent that the conversion value of a security, which is based on the average market price of CMS Energy common stock, exceeds the principal value of that security.

Stock Options and Warrants

For the three months and six months ended June 30, 2011, outstanding options to purchase 0.1 million shares of CMS Energy common stock had no impact on diluted EPS, since the exercise price was greater than the average market price of CMS Energy common stock. These stock options have the potential to dilute EPS in the future.

Non-vested Stock Awards

CMS Energy's non-vested stock awards are composed of participating and non-participating securities. The participating securities accrue cash dividends when common stockholders receive dividends. Since the recipient is not required to return the dividends to CMS Energy if the recipient forfeits the award, the non-vested stock awards are considered participating securities. As such, the participating non-vested stock awards were included in the computation of basic EPS. The non-participating securities accrue stock dividends that vest concurrently with the stock award. If the recipient forfeits the award, the stock dividends accrued on the non-participating securities are also forfeited. Accordingly, the non-participating awards and stock dividends were included in the computation of diluted EPS, but not basic EPS.

Convertible Debentures

For each of the three and six months ended June 30, 2011 and 2010, CMS Energy's 7.75 percent convertible subordinated debentures would have increased diluted earnings per share had they been included in the calculation. Using the if-converted method, the debentures would have had the following impacts on the calculation of diluted EPS: