Financings And Capitalization

3 Months Ended

Mar. 31, 2014

Financings And Capitalization

3:FINANCINGS AND CAPITALIZATION

Presented in the following table is a summary of major long-term debt transactions during the three months ended March 31, 2014:

	Principal
	(In Millions)			Interest Rate		Issue Date	Maturity Date
Debt issuances
CMS Energy
Senior notes1		$	250	3.875	%	February 2014	March 2024
Senior notes1			300	4.875		February 2014	March 2044
Total CMS Energy parent		$	550

¹ In April2014, CMSEnergy used a portion of these proceeds to retire its $125million 6.875 percent Senior Notes due December 2015.  CMSEnergy intends to use the remaining proceeds to retire existing debt and for general corporate purposes.

Revolving Credit Facilities:  The following secured revolving credit facilities with banks were available at March 31, 2014:

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			-

¹ Obligations under this facility are secured by Consumers common stock.

² 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 March 31, 2014, $250million of accounts receivable were eligible for transfer.  During the three months ended March 31, 2014, Consumers’ average short-term borrowings totaled $44 million, with a weighted-average annual interest rate of 0.85 percent.

Contingently Convertible Securities:  Presented in the following table are the significant terms of CMS Energy’s contingently convertible securities at March 31, 2014:

		Outstanding			Adjusted			Adjusted
Security	Maturity	(In Millions)			Conversion Price			Trigger Price
5.50% senior notes	2029		$	155		$	13.55		$	17.61

During 20 of the last 30 trading days ended March 31, 2014, 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 June 30, 2014.  The senior notes, 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.

Presented in the following table are details about conversions of contingently convertible securities during the three months ended March 31, 2014:

					Weighted-Average			Shares
		Principal			Conversion			of Common	Cash Paid on
	Conversion	Converted			Value per $1,000			Stock Issued	Settlement
	Date	(In Millions)			of Principal			on Settlement	(In Millions)
5.50% senior notes due 2029	February 2014		$	17		$	1,968	605,531		$	17

Dividend Restrictions:Under provisions of the Michigan Business Corporation Act of 1972, as amended, at March 31, 2014, payment of common stock dividends by CMS Energy was limited to $3.6 billion.

Under the provisions of its articles of incorporation, at March 31, 2014, Consumers had $747 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 three months ended March 31, 2014, CMS Energy received $135 million of common stock dividends from Consumers.

Issuance of Common Stock:  In April2013, CMS Energy entered into a continuous equity offering program 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 program:

	Number of	Average			Proceeds
	Shares Issued	Price per Share			(In Millions)
March 2014	1,070,080		$	28.04		$	30

Consumers Energy Company [Member]

Financings And Capitalization

3:FINANCINGS AND CAPITALIZATION

Presented in the following table is a summary of major long-term debt transactions during the three months ended March 31, 2014:

	Principal
	(In Millions)			Interest Rate		Issue Date	Maturity Date
Debt issuances
CMS Energy
Senior notes1		$	250	3.875	%	February 2014	March 2024
Senior notes1			300	4.875		February 2014	March 2044
Total CMS Energy parent		$	550

¹ In April2014, CMSEnergy used a portion of these proceeds to retire its $125million 6.875 percent Senior Notes due December 2015.  CMSEnergy intends to use the remaining proceeds to retire existing debt and for general corporate purposes.

Revolving Credit Facilities:  The following secured revolving credit facilities with banks were available at March 31, 2014:

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			-

¹ Obligations under this facility are secured by Consumers common stock.

² 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 March 31, 2014, $250million of accounts receivable were eligible for transfer.  During the three months ended March 31, 2014, Consumers’ average short-term borrowings totaled $44 million, with a weighted-average annual interest rate of 0.85 percent.

Contingently Convertible Securities:  Presented in the following table are the significant terms of CMS Energy’s contingently convertible securities at March 31, 2014:

		Outstanding			Adjusted			Adjusted
Security	Maturity	(In Millions)			Conversion Price			Trigger Price
5.50% senior notes	2029		$	155		$	13.55		$	17.61

During 20 of the last 30 trading days ended March 31, 2014, 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 June 30, 2014.  The senior notes, 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.

Presented in the following table are details about conversions of contingently convertible securities during the three months ended March 31, 2014:

					Weighted-Average			Shares
		Principal			Conversion			of Common	Cash Paid on
	Conversion	Converted			Value per $1,000			Stock Issued	Settlement
	Date	(In Millions)			of Principal			on Settlement	(In Millions)
5.50% senior notes due 2029	February 2014		$	17		$	1,968	605,531		$	17

Dividend Restrictions:Under provisions of the Michigan Business Corporation Act of 1972, as amended, at March 31, 2014, payment of common stock dividends by CMS Energy was limited to $3.6 billion.

Under the provisions of its articles of incorporation, at March 31, 2014, Consumers had $747 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 three months ended March 31, 2014, CMS Energy received $135 million of common stock dividends from Consumers.

Issuance of Common Stock:  In April2013, CMS Energy entered into a continuous equity offering program 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 program:

	Number of	Average			Proceeds
	Shares Issued	Price per Share			(In Millions)
March 2014	1,070,080		$	28.04		$	30