CMS Energy Corporation

Schedule I – Condensed Financial Information of Registrant

CMS Energy—Parent Company

Condensed Statements of Income



In Millions
Years Ended December 31	2016			2015			2014

Operating Expenses
Other operating expenses		$	(15)		$	(9)		$	(6)
Total operating expenses			(15)			(9)			(6)

Operating Loss			(15)			(9)			(6)

Other Income (Expense)
Equity earnings of subsidiaries			660			625			585
Interest income			1			1			1
Other expense			(19)			(9)			(20)
Total other income			642			617			566

Interest Charges
Interest on long-term debt			150			134			150
Intercompany interest expense and other			1			3			2
Total interest charges			151			137			152

Income Before Income Taxes			476			471			408
Income Tax Benefit			(75)			(52)			(69)

Net Income Available to Common Stockholders		$	551		$	523		$	477

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	2016			2015			2014

Cash Flows from Operating Activities
Net income		$	551		$	523		$	477
Adjustments to reconcile net income to net cash provided by operating activities
Equity earnings of subsidiaries			(660)			(625)			(585)
Dividends received from subsidiaries			499			499			544
Deferred income taxes			(26)			(24)			30
Other non-cash operating activities and reconciling adjustments			18			-			20
Cash provided by (used in) changes in assets and liabilities
Accounts and notes receivable			85			(86)			(3)
Accounts payable			(9)			16			(2)
Accrued taxes			(74)			(115)			97
Other current and non-current assets and liabilities			38			21			31
Net cash provided by operating activities			422			209			609

Cash Flows from Investing Activities
Investment in subsidiaries			(275)			(150)			(495)
Return of capital			-			-			178
Net cash used in investing activities			(275)			(150)			(317)

Cash Flows from Financing Activities
Proceeds from issuance of long-term debt			603			349			550
Issuance of common stock			72			43			43
Retirement of long-term debt			(530)			(100)			(547)
Debt prepayment costs			(18)			-			(20)
Payment of dividends on common stock			(345)			(320)			(293)
Debt issuance costs and financing fees			(5)			(3)			(6)
Change in notes payable			76			(28)			(19)
Net cash used in financing activities			(147)			(59)			(292)

Net Increase in Cash and Cash Equivalents, Including Restricted Amounts			-			-			-
Cash and Cash Equivalents, Including Restricted Amounts, Beginning of Period			-			-			-

Cash and Cash Equivalents, Including Restricted Amounts, 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	2016			2015

Current Assets
Notes and accrued interest receivable		$	2		$	88
Accounts receivable, including intercompany and related parties			7			9
Accrued taxes			51			-
Prepayments and other current assets			1			-
Total current assets			61			97

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

Other Non-current Assets
Notes receivable			3			-
Deferred income taxes			366			340
Investments in subsidiaries			6,674			6,240
Other investments – DB SERP			26			26
Other			4			5
Total other non-current assets			7,073			6,611

Total Assets		$	7,134		$	6,708



LIABILITIES AND EQUITY
In Millions
December 31	2016			2015

Current Liabilities
Accounts and notes payable, including intercompany and related parties		$	141		$	74
Accrued interest, including intercompany			28			38
Accrued taxes			-			23
Other current liabilities			10			5
Total current liabilities			179			140

Non-current Liabilities
Long-term debt			2,678			2,605
Postretirement benefits			21			22
Other non-current liabilities			3			3
Total non-current liabilities			2,702			2,630

Equity
Common stockholders’ equity			4,253			3,938

Total Liabilities and Equity		$	7,134		$	6,708

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 $324 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 U.S. Department of Energy on behalf of Consumers, in connection with Consumers’ 2011 settlement agreement with the U.S. Department of Energy regarding damages resulting from the department’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.