CMS Energy Corporation

Schedule I – Condensed Financial Information of Registrant

CMS Energy – Parent Company

Condensed Statements of Income



In Millions
Years Ended December 31	2014			2013			2012

Operating Expenses
Other operating expenses		$	(6)		$	(6)		$	(8)
Total operating expenses			(6)			(6)			(8)

Operating Loss			(6)			(6)			(8)

Other Income (Expense)
Equity earnings of subsidiaries			585			566			477
Interest income			1			1			1
Other expense			(20)			(8)			(5)
Total other income			566			559			473

Interest Charges
Interest on long-term debt			150			148			140
Intercompany interest expense and other			2			3			5
Total interest charges			152			151			145

Income Before Income Taxes			408			402			320
Income Tax Benefit			(69)			(50)			(62)

Income From Continuing Operations			477			452			382

Net Income Available to Common Stockholders		$	477		$	452		$	382

The accompanying notes are an integral part of these statements.

CMS Energy Corporation

Schedule I – Condensed Financial Information of Registrant

CMS Energy – Parent Company

Condensed Statements of Cash Flows



In Millions
Years Ended December 31	2014			2013			2012

Cash Flows from Operating Activities
Net income		$	477		$	452		$	382
Adjustments to reconcile net income to net cash provided by operating activities
Equity earnings of subsidiaries			(585)			(566)			(477)
Dividends received from subsidiaries			544			435			401
Deferred income taxes			30			48			(25)
Cash provided by (used in) changes in assets and liabilities
Accounts and notes receivable			(3)			(3)			2
Accounts payable			(2)			2			-
Accrued taxes			97			48			9
Other current and non-current assets and liabilities			31			18			(14)
Net cash provided by operating activities			589			434			278

Cash Flows from Investing Activities
Investment in subsidiaries			(495)			(150)			(151)
Return of capital			178			-			-
Net cash used in investing activities			(317)			(150)			(151)

Cash Flows from Financing Activities
Proceeds from issuance of long-term debt			550			275			575
Issuance of common stock			43			36			30
Retirement of long-term debt			(547)			(275)			(463)
Payment of common stock dividends			(293)			(271)			(252)
Debt issuance costs and financing fees			(6)			(4)			(4)
Decrease in notes payable			(19)			(47)			(11)
Net cash used in financing activities			(272)			(286)			(125)

Net Increase (Decrease) in Cash and Cash Equivalents			-			(2)			2
Cash and Cash Equivalents, Beginning of Period			-			2			-

Cash and Cash Equivalents, End of Period		$	-		$	-		$	2

The accompanying notes are an integral part of these statements.

CMS Energy Corporation

Schedule I – Condensed Financial Information of Registrant

CMS Energy – Parent Company

Condensed Balance Sheets



ASSETS
In Millions
December 31	2014			2013

Current Assets
Notes and accrued interest receivable		$	2		$	1
Accounts receivable, including intercompany and related parties			9			7
Deferred income taxes			3			2
Total current assets			14			10

Plant, Property, and Equipment
Plant, property, and equipment, gross			16			16
Less accumulated depreciation and amortization			16			16
Total plant, property, and equipment			-			-

Other Non-current Assets
Deferred income taxes			314			345
Investments in subsidiaries			5,961			5,626
Other investments – DB SERP			22			23
Other			23			23
Total other non-current assets			6,320			6,017

Total Assets		$	6,334		$	6,027



LIABILITIES AND EQUITY
In Millions
December 31	2014			2013

Current Liabilities
Current portion of long-term debt		$	-		$	172
Accounts and notes payable, including intercompany and related parties			86			107
Accrued interest, including intercompany			37			32
Accrued taxes			138			41
Other current liabilities			4			4
Total current liabilities			265			356

Non-current Liabilities
Long-term debt			2,380			2,205
Unamortized discount			(7)			(9)
Postretirement benefits			24			19
Other non-current liabilities			2			2
Total non-current liabilities			2,399			2,217

Equity
Common stockholders’ equity			3,670			3,454

Total Liabilities and Equity		$	6,334		$	6,027

The accompanying notes are an integral part of these statements.

CMS Energy Corporation

Schedule I – Condensed Financial Information of Registrant

CMS Energy – Parent Company

Notes to the Condensed Financial Statements

1:Basis of Presentation

CMS Energy’s condensed financial statements have been prepared on a parent-only basis. In accordance with Rule 12‑04 of Regulation S‑X, these parent-only financial statements do not include all of the information and notes required by GAAP for annual financial statements, and therefore these parent-only financial statements and other information included should be read in conjunction with CMS Energy’s audited consolidated financial statements contained within Item 8. Financial Statements and Supplementary Data.

2:Guarantees

CMS Energy has issued guarantees with a maximum potential obligation of $302 million on behalf of some of its wholly owned subsidiaries and related parties. CMS Energy’s maximum potential obligation consists primarily of potential payments:

to third parties under certain commodity purchase and swap agreements entered into with CMS ERM;

to third parties in support of non‑recourse revenue bonds issued by Genesee;

to the MDEQ on behalf of CMS Land and CMS Capital, for environmental remediation obligations at Bay Harbor; and

to the DOE on behalf of Consumers, in relation to Consumers’ 2011 settlement agreement with the DOE regarding damages resulting from the DOE’s failure to accept spent nuclear fuel from Palisades and Big Rock.

The expiry dates of these guarantees vary, depending upon contractual provisions or upon the statute of limitations under the relevant governing law.