Income Taxes

3 Months Ended

Mar. 31, 2017

Income Taxes

9:Income Taxes

Presented in the following table is a reconciliation of the statutory U.S. federal income tax rate to the effective income tax rate from continuing operations:

Three Months Ended March 31	2017			2016
CMS Energy, including Consumers
U.S. federal income tax rate		35.0	%		35.0	%
Increase (decrease) in income taxes from:
State and local income taxes, net of federal effect		4.7			4.1
Accelerated flow-through of regulatory tax benefits1		(4.3)			(4.7)
Employee share-based awards		(1.9)			(2.2)
Other, net		(1.0)			(1.1)
Effective tax rate		32.5	%		31.1	%
Consumers
U.S. federal income tax rate		35.0	%		35.0	%
Increase (decrease) in income taxes from:
State and local income taxes, net of federal effect		4.5			4.4
Accelerated flow-through of regulatory tax benefits1		(4.2)			(4.2)
Employee share-based awards		(1.7)			(2.0)
Other, net		(1.2)			(0.9)
Effective tax rate		32.4	%		32.3	%

¹ Since 2014, Consumers has followed a regulatory treatment ordered by the MPSC that accelerates the return of certain income tax benefits to customers. This change, which also accelerates Consumers’ recognition of the income tax benefits, reduced Consumers’ income tax expense by $13 million for the three months ended March 31, 2017 and by $11 million for the three months ended March 31, 2016.

Consumers Energy Company [Member]

Income Taxes

9:Income Taxes

Presented in the following table is a reconciliation of the statutory U.S. federal income tax rate to the effective income tax rate from continuing operations:

Three Months Ended March 31	2017			2016
CMS Energy, including Consumers
U.S. federal income tax rate		35.0	%		35.0	%
Increase (decrease) in income taxes from:
State and local income taxes, net of federal effect		4.7			4.1
Accelerated flow-through of regulatory tax benefits1		(4.3)			(4.7)
Employee share-based awards		(1.9)			(2.2)
Other, net		(1.0)			(1.1)
Effective tax rate		32.5	%		31.1	%
Consumers
U.S. federal income tax rate		35.0	%		35.0	%
Increase (decrease) in income taxes from:
State and local income taxes, net of federal effect		4.5			4.4
Accelerated flow-through of regulatory tax benefits1		(4.2)			(4.2)
Employee share-based awards		(1.7)			(2.0)
Other, net		(1.2)			(0.9)
Effective tax rate		32.4	%		32.3	%

¹ Since 2014, Consumers has followed a regulatory treatment ordered by the MPSC that accelerates the return of certain income tax benefits to customers. This change, which also accelerates Consumers’ recognition of the income tax benefits, reduced Consumers’ income tax expense by $13 million for the three months ended March 31, 2017 and by $11 million for the three months ended March 31, 2016.