CMS Energy Corporation

Schedule I – Condensed Financial Information of Registrant

CMS Energy—Parent Company

Condensed Statements of Income



In Millions
Years Ended December 31	2015			2014			2013

Operating Expenses
Other operating expenses		$	(9)		$	(6)		$	(6)
Total operating expenses			(9)			(6)			(6)

Operating Loss			(9)			(6)			(6)

Other Income (Expense)
Equity earnings of subsidiaries			625			585			566
Interest income			1			1			1
Other expense			(9)			(20)			(8)
Total other income			617			566			559

Interest Charges
Interest on long-term debt			134			150			148
Intercompany interest expense and other			3			2			3
Total interest charges			137			152			151

Income Before Income Taxes			471			408			402
Income Tax Benefit			(52)			(69)			(50)

Net Income Available to Common Stockholders		$	523		$	477		$	452

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	2015			2014			2013

Cash Flows from Operating Activities
Net income		$	523		$	477		$	452
Adjustments to reconcile net income to net cash provided by operating activities
Equity earnings of subsidiaries			(625)			(585)			(566)
Dividends received from subsidiaries			499			544			435
Deferred income taxes			(24)			30			48
Cash provided by (used in) changes in assets and liabilities
Accounts and notes receivable			(86)			(3)			(3)
Accounts payable			16			(2)			2
Accrued taxes			(115)			97			48
Other current and non‑current assets and liabilities			21			31			18
Net cash provided by operating activities			209			589			434

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

Cash Flows from Financing Activities
Proceeds from issuance of long-term debt			349			550			275
Issuance of common stock			43			43			36
Retirement of long-term debt			(100)			(547)			(275)
Payment of dividends on common stock			(320)			(293)			(271)
Debt issuance costs and financing fees			(3)			(6)			(4)
Decrease in notes payable			(28)			(19)			(47)
Net cash used in financing activities			(59)			(272)			(286)

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

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

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	2015			2014

Current Assets
Notes and accrued interest receivable		$	88		$	2
Accounts receivable, including intercompany and related parties			9			9
Total current assets			97			11

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			340			317
Investments in subsidiaries			6,240			5,961
Other investments – DB SERP			26			22
Other			23			23
Total other non‑current assets			6,629			6,323

Total Assets		$	6,726		$	6,334



LIABILITIES AND EQUITY
In Millions
December 31	2015			2014

Current Liabilities
Accounts and notes payable, including intercompany and related parties		$	74		$	86
Accrued interest, including intercompany			38			37
Accrued taxes			23			138
Other current liabilities			5			4
Total current liabilities			140			265

Non-current Liabilities
Long-term debt			2,630			2,380
Unamortized discount			(7)			(7)
Postretirement benefits			22			24
Other non‑current liabilities			3			2
Total non‑current liabilities			2,648			2,399

Equity
Common stockholders’ equity			3,938			3,670

Total Liabilities and Equity		$	6,726		$	6,334

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 $328 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

to the DOE on behalf of Consumers, in connection with Consumers’ 2011 settlement agreement with the DOE regarding damages resulting from the DOE’s failure to accept spent nuclear fuel from nuclear power plants formerly owned by Consumers

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