Financings And Capitalization

12 Months Ended

Dec. 31, 2013

4:FINANCINGS AND CAPITALIZATION

Presented in the following table is CMS Energy’s long-term debt at December 31:



In Millions
	Interest Rate (%)		Maturity	2013			2012
CMS Energy
Senior notes	2.750	1	2014		$	-		$	250
	6.875		2015			125			125
	4.250		2015			250			250
	6.550		2017			250			250
	5.050		2018			250			250
	8.750		2019			300			300
	6.250		2020			300			300
	5.050		2022			300			300
	5.500	2	2029			172			172
	4.700		2043			250			-
Total CMS Energy senior notes					$	2,197		$	2,197
Term loan facility	variable	3	2016			180			180
Total CMS Energy parent					$	2,377		$	2,377
Consumers					$	4,625		$	4,341
Other CMS Energy subsidiaries
EnerBank certificates of deposits	1.095	4	2014-2021		$	652		$	527
Total other CMS Energy subsidiaries					$	652		$	527
Total CMS Energy principal amount outstanding					$	7,654		$	7,245
Current amounts						(541)			(519)
Net unamortized discounts						(12)			(16)
Total CMS Energy long-term debt					$	7,101		$	6,710

In September 2013, CMS Energy retired its 2.75 percent senior notes.

CMS Energy’s contingently convertible notes. See the “Contingently Convertible Securities” section in this Note for further discussion of the conversion features.

Outstanding borrowings bear interest at an annual interest rate of LIBOR plus 1.75 percent (1.92 percent at December 31, 2013).

⁴

The weighted-average interest rate for EnerBank’s certificates of deposit was 1.09 percent at December 31, 2013 and 1.16 percent at December 31, 2012. EnerBank’s primary deposit product consists of brokered certificates of deposit with varying maturities and having a face value of $1,000.

Presented in the following table is Consumers’ long-term debt at December 31:



In Millions
	Interest Rate (%)		Maturity	2013			2012
Consumers
FMBs1	6.000	2	2014		$	-		$	200
	5.000	2	2015			-			225
	2.600		2015			50			50
	5.500		2016			350			350
	5.150		2017			250			250
	3.210		2017			100			100
	5.650		2018			250			250
	6.125		2019			350			350
	6.700		2019			500			500
	5.650		2020			300			300
	3.770		2020			100			100
	5.300		2022			250			250
	2.850		2022			375			375
	3.375		2023			325			-
	3.190		2024			52			52
	3.390		2027			35			35
	5.800		2035			175			175
	6.170		2040			50			50
	4.970		2040			50			50
	4.310		2042			263			263
	3.950		2043			425			-
					$	4,250		$	3,925
Senior notes	6.875		2018			180			180
Securitization bonds	5.760	3	2015			92			133
Tax-exempt pollution control revenue bonds	various		2018-2035			103			103
Total Consumers principal amount outstanding					$	4,625		$	4,341
Current amounts						(43)			(41)
Net unamortized discounts						(3)			(3)
Total Consumers long-term debt					$	4,579		$	4,297

The weighted-average interest rate for Consumers’ FMBs was 4.90 percent at December 31, 2013 and 5.19 percent at December 31, 2012.

In June 2013, Consumers retired its 6.00 percent and 5.00 percent FMBs.

The weighted-average interest rate for Consumers’ Securitization bonds was 5.76 percent at December 31, 2013 and 5.72 percent at December 31, 2012.

Financings: Presented in the following table is a summary of major long-term debt transactions during the year ended December 31, 2013:



	Principal					Issue/Retirement
	(In Millions)			Interest Rate		Date	Maturity Date
Debt issuances
CMS Energy
Senior notes		$	250	4.700	%	March 2013	March 2043
Total CMS Energy parent		$	250
Consumers
FMBs		$	425	3.950	%	May 2013	May 2043
FMBs			325	3.375	%	August 2013	August 2023
Total Consumers		$	750
Total debt issuances		$	1,000
Debt retirements
CMS Energy
Senior notes		$	250	2.750	%	September 2013	May 2014
Total CMS Energy parent		$	250
Consumers
FMBs		$	200	6.000	%	June 2013	February 2014
FMBs			225	5.000	%	June 2013	March 2015
Total Consumers		$	425
Total debt retirements		$	675

FMBs: Consumers secures its FMBs by a mortgage and lien on substantially all of its property. Consumers’ ability to issue FMBs is restricted by certain provisions in the First Mortgage Bond Indenture and the need for regulatory approvals under federal law. Restrictive issuance provisions in the First Mortgage Bond Indenture include achieving a two-times interest coverage ratio and having sufficient unfunded net property additions.

Regulatory Authorization for Financings: FERC has authorized Consumers to have outstanding at any one time, up to $500 million of secured and unsecured short-term securities for general corporate purposes. The remaining availability was $200 million at December 31, 2013. FERC has also authorized Consumers to issue and sell up to $1.9 billion of secured and unsecured long-term securities for general corporate purposes. The remaining availability was $800 million at December 31, 2013. The authorizations are for the period ending June 30, 2014. Any long-term issuances during the authorization period are exempt from FERC’s competitive bidding and negotiated placement requirements.

Securitization Bonds: Certain regulatory assets owned by Consumers’ subsidiary Consumers Funding collateralize Consumers’ Securitization bonds. The bondholders have no recourse to Consumers’ other assets. Through its rate structure, Consumers bills customers for Securitization surcharges to fund the payment of principal, interest, and other related expenses. The surcharges collected are remitted to a trustee and are not available to creditors of Consumers or creditors of Consumers’ affiliates other than Consumers Funding.

Debt Maturities: At December 31, 2013, the aggregate annual contractual maturities for long-term debt for the next five years were:



In Millions
	2014			2015			2016			2017			2018
CMS Energy, including Consumers
Long-term debt		$	368		$	599		$	608		$	657		$	786
Consumers
Long-term debt		$	43		$	99		$	350		$	350		$	498

Revolving Credit Facilities: The following secured revolving credit facilities with banks were available at December 31, 2013:



In Millions
							Letters of Credit
Expiration Date	Amount of Facility			Amount Borrowed			Outstanding			Amount Available
CMS Energy
December 20, 20181		$	550		$	-		$	2		$	548
Consumers
December 20, 20182		$	650		$	-		$	-		$	650
September 9, 20142			30			-			30			-

Obligations under this facility are secured by Consumers common stock. CMS Energy’s average borrowings during the year ended December 31, 2013 were $4 million, with a weighted-average annual interest rate of 1.67 percent, representing LIBOR plus 1.50 percent.

Obligations under this facility are secured by FMBs of Consumers.

Short-term Borrowings: Under Consumers’ revolving accounts receivable sales program, Consumers may transfer up to $250 million of accounts receivable, subject to certain eligibility requirements. These transactions are accounted for as short-term secured borrowings. At December 31, 2013, $170 million had been transferred under the program. During the year ended December 31, 2013, Consumers’ average short-term borrowings totaled $10 million, with a weighted-average annual interest rate of 0.9 percent.

Contingently Convertible Securities: Presented in the following table are the significant terms of CMS Energy’s contingently convertible securities at December 31, 2013:



		Outstanding			Adjusted			Adjusted
Security	Maturity	(In Millions)			Conversion Price			Trigger Price
5.50% senior notes	2029		$	172		$	13.55		$	17.61

The securities become convertible for a calendar quarter if the price of CMS Energy’s common stock remains at or above the trigger price for 20 of 30 consecutive trading days ending on the last trading day of the previous quarter. The trigger price at which these securities become convertible is 130 percent of the conversion price. The conversion and trigger prices are subject to adjustments in certain circumstances, including payments or distributions to CMS Energy’s common stockholders. The conversion and trigger price adjustment is made when the cumulative change in conversion and trigger prices is one percent or more. During 20 of the last 30 trading days ended December 31, 2013, the adjusted trigger-price contingencies were met for the contingently convertible senior notes, and as a result, the senior notes are convertible at the option of the note holders for the three months ending March 31, 2014.

CMS Energy’s contingently convertible securities, if converted, require CMS Energy to pay cash up to the principal amount of the securities. Any conversion value in excess of the principal amount can be paid in cash or in shares of CMS Energy’s common stock, at the election of CMS Energy.

In December 2013, a holder tendered for conversion $17 million principal amount of the 5.50 percent contingently convertible senior notes. The conversion value per $1,000 principal amount of the convertible note was $1,968. CMS Energy issued 605,531 shares of its common stock and paid $17 million cash on settlement of conversion in February 2014.

Dividend Restrictions: Under provisions of the Michigan Business Corporation Act of 1972, as amended, at December 31, 2013, payment of common stock dividends by CMS Energy was limited to $3.5 billion.

Under the provisions of its articles of incorporation, at December 31, 2013, Consumers had $662 million of unrestricted retained earnings available to pay common stock dividends to CMS Energy. Provisions of the Federal Power Act and the Natural Gas Act appear to restrict dividends payable by Consumers to the amount of Consumers’ retained earnings. Several decisions from FERC suggest that under a variety of circumstances common stock dividends from Consumers would not be limited to amounts in Consumers’ retained earnings. Any decision by Consumers to pay common stock dividends in excess of retained earnings would be based on specific facts and circumstances and would result only after a formal regulatory filing process.

For the year ended December 31, 2013, CMS Energy received $406 million of common stock dividends from Consumers.

Capitalization: The authorized capital stock of CMS Energy consists of:

350 million shares of CMS Energy Common Stock, par value $0.01 per share, and

10 million shares of CMS Energy Preferred Stock, par value $0.01 per share.

Issuance of Common Stock: CMS Energy has entered into two continuous equity offering programs permitting it to sell, from time to time in “at the market” offerings, common stock having an aggregate sales price of up to $50 million per program.

Presented in the following table are the transactions that CMS Energy entered into under the first program:



	Number of	Average			Proceeds
	Shares Issued	Price per Share			(In Millions)
June 2011	762,925		$	19.66		$	15
June 2012	650,235			23.07			15
March 2013	735,873			27.18			20
Total	2,149,033		$	23.27		$	50

In April 2013, CMS Energy entered into the second continuous equity offering program, but has not yet issued any equity under this program.

Preferred Stock of Subsidiary: In July 2013, Consumers redeemed all of its $4.16 preferred stock at a redemption price of $103.25 per share, which represented an aggregate redemption price of $7 million paid to redeem 68,451 outstanding shares.

Presented in the following table are details about Consumers’ preferred stock outstanding:



				Optional			Number of	Balance
				Redemption			Shares	Outstanding
	Series			Price			Outstanding	(In Millions)
December 31								2013			2012
Cumulative, $100 par value, authorized 7,500,000 shares, with no mandatory redemption		$	4.50		$	110.00	373,148		$	37		$	37
			4.16			103.25	68,451			-			7
Total preferred stock of Consumers									$	37		$	44

Consumers Energy Company [Member]

Financings And Capitalization

4:FINANCINGS AND CAPITALIZATION

Presented in the following table is CMS Energy’s long-term debt at December 31:



In Millions
	Interest Rate (%)		Maturity	2013			2012
CMS Energy
Senior notes	2.750	1	2014		$	-		$	250
	6.875		2015			125			125
	4.250		2015			250			250
	6.550		2017			250			250
	5.050		2018			250			250
	8.750		2019			300			300
	6.250		2020			300			300
	5.050		2022			300			300
	5.500	2	2029			172			172
	4.700		2043			250			-
Total CMS Energy senior notes					$	2,197		$	2,197
Term loan facility	variable	3	2016			180			180
Total CMS Energy parent					$	2,377		$	2,377
Consumers					$	4,625		$	4,341
Other CMS Energy subsidiaries
EnerBank certificates of deposits	1.095	4	2014-2021		$	652		$	527
Total other CMS Energy subsidiaries					$	652		$	527
Total CMS Energy principal amount outstanding					$	7,654		$	7,245
Current amounts						(541)			(519)
Net unamortized discounts						(12)			(16)
Total CMS Energy long-term debt					$	7,101		$	6,710

In September 2013, CMS Energy retired its 2.75 percent senior notes.

CMS Energy’s contingently convertible notes. See the “Contingently Convertible Securities” section in this Note for further discussion of the conversion features.

Outstanding borrowings bear interest at an annual interest rate of LIBOR plus 1.75 percent (1.92 percent at December 31, 2013).

⁴

Presented in the following table is Consumers’ long-term debt at December 31:



In Millions
	Interest Rate (%)		Maturity	2013			2012
Consumers
FMBs1	6.000	2	2014		$	-		$	200
	5.000	2	2015			-			225
	2.600		2015			50			50
	5.500		2016			350			350
	5.150		2017			250			250
	3.210		2017			100			100
	5.650		2018			250			250
	6.125		2019			350			350
	6.700		2019			500			500
	5.650		2020			300			300
	3.770		2020			100			100
	5.300		2022			250			250
	2.850		2022			375			375
	3.375		2023			325			-
	3.190		2024			52			52
	3.390		2027			35			35
	5.800		2035			175			175
	6.170		2040			50			50
	4.970		2040			50			50
	4.310		2042			263			263
	3.950		2043			425			-
					$	4,250		$	3,925
Senior notes	6.875		2018			180			180
Securitization bonds	5.760	3	2015			92			133
Tax-exempt pollution control revenue bonds	various		2018-2035			103			103
Total Consumers principal amount outstanding					$	4,625		$	4,341
Current amounts						(43)			(41)
Net unamortized discounts						(3)			(3)
Total Consumers long-term debt					$	4,579		$	4,297

The weighted-average interest rate for Consumers’ FMBs was 4.90 percent at December 31, 2013 and 5.19 percent at December 31, 2012.

In June 2013, Consumers retired its 6.00 percent and 5.00 percent FMBs.

The weighted-average interest rate for Consumers’ Securitization bonds was 5.76 percent at December 31, 2013 and 5.72 percent at December 31, 2012.

Financings: Presented in the following table is a summary of major long-term debt transactions during the year ended December 31, 2013:



	Principal					Issue/Retirement
	(In Millions)			Interest Rate		Date	Maturity Date
Debt issuances
CMS Energy
Senior notes		$	250	4.700	%	March 2013	March 2043
Total CMS Energy parent		$	250
Consumers
FMBs		$	425	3.950	%	May 2013	May 2043
FMBs			325	3.375	%	August 2013	August 2023
Total Consumers		$	750
Total debt issuances		$	1,000
Debt retirements
CMS Energy
Senior notes		$	250	2.750	%	September 2013	May 2014
Total CMS Energy parent		$	250
Consumers
FMBs		$	200	6.000	%	June 2013	February 2014
FMBs			225	5.000	%	June 2013	March 2015
Total Consumers		$	425
Total debt retirements		$	675

Debt Maturities: At December 31, 2013, the aggregate annual contractual maturities for long-term debt for the next five years were:



In Millions
	2014			2015			2016			2017			2018
CMS Energy, including Consumers
Long-term debt		$	368		$	599		$	608		$	657		$	786
Consumers
Long-term debt		$	43		$	99		$	350		$	350		$	498

Revolving Credit Facilities: The following secured revolving credit facilities with banks were available at December 31, 2013:



In Millions
							Letters of Credit
Expiration Date	Amount of Facility			Amount Borrowed			Outstanding			Amount Available
CMS Energy
December 20, 20181		$	550		$	-		$	2		$	548
Consumers
December 20, 20182		$	650		$	-		$	-		$	650
September 9, 20142			30			-			30			-

Obligations under this facility are secured by FMBs of Consumers.

Contingently Convertible Securities: Presented in the following table are the significant terms of CMS Energy’s contingently convertible securities at December 31, 2013:



		Outstanding			Adjusted			Adjusted
Security	Maturity	(In Millions)			Conversion Price			Trigger Price
5.50% senior notes	2029		$	172		$	13.55		$	17.61

For the year ended December 31, 2013, CMS Energy received $406 million of common stock dividends from Consumers.

Capitalization: The authorized capital stock of CMS Energy consists of:

350 million shares of CMS Energy Common Stock, par value $0.01 per share, and

10 million shares of CMS Energy Preferred Stock, par value $0.01 per share.

Presented in the following table are the transactions that CMS Energy entered into under the first program:



	Number of	Average			Proceeds
	Shares Issued	Price per Share			(In Millions)
June 2011	762,925		$	19.66		$	15
June 2012	650,235			23.07			15
March 2013	735,873			27.18			20
Total	2,149,033		$	23.27		$	50

In April 2013, CMS Energy entered into the second continuous equity offering program, but has not yet issued any equity under this program.

Presented in the following table are details about Consumers’ preferred stock outstanding:



				Optional			Number of	Balance
				Redemption			Shares	Outstanding
	Series			Price			Outstanding	(In Millions)
December 31								2013			2012
Cumulative, $100 par value, authorized 7,500,000 shares, with no mandatory redemption		$	4.50		$	110.00	373,148		$	37		$	37
			4.16			103.25	68,451			-			7
Total preferred stock of Consumers									$	37		$	44

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

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