Financings

12 Months Ended

Dec. 31, 2011

7: FINANCINGS AND CAPITALIZATION

Presented in the following table is CMS Energy's long-term debt at December 31:


In Millions
	Interest Rate (%)			Maturity		2011			2010
CMS ENERGY
Senior notes		8.500			2011	$	-		$	146
		6.300			2012		-			50
		Variable	¹		2013		150			150
		2.750			2014		250			-
		6.875			2015		125			125
		4.250			2015		250			250
		6.550			2017		250			250
		5.050			2018		250			250
		8.750			2019		300			300
		6.250			2020		300			300
		3.375	²		2023		-			4
		2.875	²		2024		226			288
		5.500	²		2029		172			172
Total – CMS Energy						$	2,273		$	2,285
CONSUMERS						$	4,329		$	4,529
OTHER CMS ENERGY SUBSIDIARIES
EnerBank certificates of deposit		1.328	³		2012-2018	$	462		$	363
Trust preferred securities		7.750			2027		29			29
Total – other CMS Energy subsidiaries						$	491		$	392
Total CMS Energy principal amount outstanding						$	7,093		$	7,206
Current amounts							(1,033	)		(726	)
Net unamortized discount							(20	)		(32	)
Total CMS Energy long-term debt						$	6,040		$	6,448

¹	CMS Energy's variable-rate senior notes bear interest at three-month LIBOR plus 95 basis points (1.353 percent at December 31, 2011 and 1.239 percent at December 31, 2010).

²	CMS Energy's contingently convertible notes. See the "Contingently Convertible Securities" section in this Note for further discussion of the conversion features.

The weighted-average interest rate for EnerBank's certificates of deposit was 1.328 percent at December 31, 2011 and 1.707 percent at December 31, 2010. EnerBank's primary deposit product consists of brokered certificates of deposit with varying maturities. EnerBank sells these deposits through investment brokers in large pools, with each certificate within the pool having a face value of $1,000. They cannot be withdrawn until maturity, except in the case of death or incompetence of the holder.

Presented in the following table is Consumers' long-term debt at December 31:


In Millions
	Interest Rate (%)			Maturity		2011			2010
CONSUMERS
FMBs¹		5.000			2012	$	300		$	300
		5.375			2013		375			375
		6.000			2014		200			200
		5.000			2015		225			225
		2.600			2015		50			50
		5.500			2016		350			350
		5.150			2017		250			250
		3.210			2017		100			100
		5.650			2018		250			250
		6.125			2019		350			350
		6.700			2019		500			500
		5.650			2020		300			300
		3.770			2020		100			100
		5.300			2022		250			250
		5.800			2035		175			175
		6.170			2040		50			50
		4.970			2040		50			50
						$	3,875		$	3,875
Senior notes		6.875			2018		180			180
Securitization bonds		5.652	²		2012-2015		171			208
Nuclear fuel disposal liability to DOE		0.132	³				-			163
Tax-exempt pollution control revenue bonds		Various			2018-2035		103			103
Total Consumers principal amount outstanding						$	4,329		$	4,529
Current amounts							(339	)		(37	)
Net unamortized discount							(3	)		(4	)
Total Consumers long-term debt						$	3,987		$	4,488

¹	The weighted-average interest rate for Consumers' FMBs was 5.5 percent at December 31, 2011 and 2010.

²	The weighted-average interest rate for Consumers' Securitization bonds was 5.652 percent at December 31, 2011 and 5.613 percent at December 31, 2010.

³	The interest rate for Consumers' nuclear fuel disposal liability was 0.132 percent at December 31, 2010. For additional details, see the "Consumers' Electric Utility Contingencies – Nuclear Matters" section included in Note 5, Contingencies and Commitments.

Financings: Presented in the following table is a summary of major long-term debt transactions during the year ended December 31, 2011:

Principal
(In Millions)

Interest Rate

Issue/Retirement
Date

Maturity Date

Debt Issuances

CMS ENERGY

Senior notes

250

2.75

May 2011

May 2014

CONSUMERS

Tax-exempt bonds¹

Variable

May 2011

April 2018

Tax-exempt bonds¹

Variable

May 2011

April 2035

Total

353

Debt Retirements

CMS ENERGY

Senior notes

146

8.5

April 2011

Senior notes

6.3

October 2011

February 2012

Contingently convertible senior notes²

2.875

December 2011

December 2024

CONSUMERS

Nuclear fuel disposal liability³

163

Variable

July 2011

Tax-exempt bonds¹

Variable

May 2011

April 2018

Tax-exempt bonds¹

Variable

May 2011

April 2035

Total

524

In May 2011, Consumers utilized the Michigan Strategic Fund for the issuance of $68 million and $35 million of tax-exempt Michigan Strategic Fund Variable Rate Limited Obligation Revenue Bonds. The initial interest rate, which resets weekly, was 0.26 percent for the $68 million bond issuance and 0.28 percent for the $35 million bond issuance. The bonds, which are backed by letters of credit and collateralized by FMBs, are subject to optional tender by the holders that would result in remarketing. Consumers used the proceeds to redeem $103 million of tax-exempt bonds in May 2011.

²	CMS Energy's contingently convertible notes. See the "Contingently Convertible Securities" section in this Note for further discussion of the conversions.

³	In July 2011, Consumers settled its nuclear fuel disposal liability with the DOE. For additional details, see the "Consumers' Electric Utility Contingencies – Nuclear Matters" section in Note 5, Contingencies and Commitments.

In December 2011, CMS Energy entered into a $180 million term loan credit agreement that provides for delayed draws through July 20, 2012. Outstanding borrowings will bear interest at an annual interest rate of LIBOR plus 2.5 percent and will mature in December 2016.

In January 2012, CMS Energy called all of its outstanding 7.75 percent Trust Preferred Securities, to be redeemed in late February 2012.

FMBs: Consumers secures its FMBs by a mortgage and lien on substantially all of its property. Consumers' ability to issue FMBs is restricted by certain provisions in the First Mortgage Bond Indenture and the need for regulatory approvals under federal law. Restrictive issuance provisions in the First Mortgage Bond Indenture include achieving a two-times interest coverage ratio and having sufficient unfunded net property additions.

Regulatory Authorization for Financings: FERC has authorized Consumers to have outstanding at any one time, up to $1.0 billion of secured and unsecured short-term securities for general corporate purposes. The remaining availability is $700 million at December 31, 2011. FERC has also authorized Consumers to issue and sell up to $2.5 billion of secured and unsecured long-term securities for general corporate purposes. The remaining availability is $1.4 billion at December 31, 2011. The authorizations are for the period ending June 30, 2012. Any long-term issuances during the authorization period are exempt from FERC's competitive bidding and negotiated placement requirements.

Securitization Bonds: Certain regulatory assets owned by Consumers' subsidiary, Consumers Funding, collateralize Consumers' Securitization bonds. The bondholders have no recourse to Consumers' other assets. Through its rate structure, Consumers bills customers for Securitization surcharges to fund the payment of principal, interest, and other related expenses. The surcharges collected are remitted to a trustee and are not available to creditors of Consumers or creditors of Consumers' affiliates other than Consumers Funding.

Debt Maturities: At December 31, 2011, the aggregate annual contractual maturities for long-term debt for the next five years were:


In Millions
	Payments Due
	2012		2013		2014		2015		2016
CMS ENERGY, INCLUDING CONSUMERS
Long-term debt	$	635	$	631	$	527	$	725	$	369
CONSUMERS
Long-term debt	$	339	$	416	$	243	$	323	$	350

Revolving Credit Facilities: The following secured revolving credit facilities with banks were available at December 31, 2011:


In Millions
Expiration Date	Amount of Facility		Amount Borrowed		Letters of Credit Outstanding		Amount Available
CMS ENERGY
March 31, 2016¹		$ 550		$ -		$ 3		$ 547
CONSUMERS
March 31, 2016^{2, 3}		$ 500		$ -		$ 1		$ 499
August 9, 2013³		150		-		-		150
September 9, 2014³		30		-		30		-

On March 31, 2011, CMS Energy entered into a $550 million secured revolving credit facility with a consortium of banks. This facility has a five-year term and replaced CMS Energy's revolving credit facility that was set to expire in 2012. Obligations under this facility are secured by Consumers common stock. CMS Energy's average borrowings during the year ended December 31, 2011 totaled $11 million, with a weighted-average annual interest rate of 2.22 percent, representing LIBOR 2.00 percent.

²	On March 31, 2011, Consumers entered into a $500 million secured revolving credit facility with a consortium of banks. This facility has a five-year term and replaced Consumers' revolving credit facility that was set to expire in 2012.

³	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 December 31, 2011, $250 million of accounts receivable were eligible for transfer, and no accounts receivable had been transferred under the program. During the year ended December 31, 2011, Consumers had no borrowings under this program.

During the year ended December 31, 2010, Consumers' maximum short-term borrowings totaled $50 million, and its average short-term borrowings totaled $1 million, with a weighted-average annual interest rate of 0.2 percent.

Contingently Convertible Securities: Presented in the following table are the significant terms of CMS Energy's contingently convertible securities at December 31, 2011:


Security	Maturity		Outstanding (In Millions)		Adjusted Conversion Price		Adjusted Trigger Price
2.875% senior notes		2024		$ 226		$ 12.54		$ 15.04
5.50% senior notes		2029		172		14.08		18.31

The holders of the 2.875 percent senior notes have the right to require CMS Energy to purchase the notes at par on December 1, 2014 and December 1, 2019.

The securities become convertible for a calendar quarter if the price of CMS Energy's common stock remains at or above the trigger price for 20 of 30 consecutive trading days ending on the last trading day of the previous quarter. The trigger price at which these securities become convertible is 120 percent of the conversion price for the 2.875 percent senior notes and 130 percent for the 5.5 percent senior notes. The conversion and trigger prices are subject to adjustment in certain circumstances, including payments or distributions to CMS Energy's common stockholders. The conversion and trigger price adjustment is made when the cumulative change in conversion and trigger prices is one percent or more. During December 2011, trigger price contingencies were met for both series of the contingently convertible senior notes, and as a result, the senior notes are convertible at the option of the security holders for the three months ending March 31, 2012.

All of CMS Energy's contingently convertible securities, if converted, require CMS Energy to pay cash up to the principal amount of the securities. For the 2.875 percent senior notes, any conversion value in excess of the principal amount is paid in shares of CMS Energy's common stock. For the 5.50 percent senior notes, 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 year ended December 31, 2011:


Series	Conversion Date		Principal Converted (In Millions)		Conversion Value per $1,000 of principal		Shares of Common Stock Issued on Settlement		Cash Paid on Settlement (In Millions)
3.375% contingently convertible senior notes due 2023		January 2011	$	4	$	1,994.21		197,472	$	4
2.875% contingently convertible senior notes due 2024		December 2011	$	62	$	1,654.13		1,954,542	$	62

In January 2012, holders tendered for conversion $73 million principal amount of the 2.875 percent contingently convertible senior notes. The conversion value per $1,000 principal amount of convertible note was $1,738.99. CMS Energy issued 2,464,138 shares of its common stock and paid $73 million cash on settlement of these conversions in January and February 2012.

Dividend Restrictions: Under provisions of CMS Energy's senior notes indenture, at December 31, 2011, payment of common stock dividends by CMS Energy was limited to $1.2 billion.

Under the provisions of its articles of incorporation, at December 31, 2011, Consumers had $493 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 year ended December 31, 2011, CMS Energy received $374 million of common stock dividends from Consumers.

Capitalization: The authorized capital stock of CMS Energy consists of:

—

350 million shares of CMS Energy Common Stock, par value $0.01 per share, and

—

10 million shares of CMS Energy Preferred Stock, par value $0.01 per share.

Issuance of Common Stock: On June 15, 2011, CMS Energy entered into a continuous equity offering program under which CMS Energy may sell, from time to time in "at the market" offerings, common stock having an aggregate sales price of up to $50 million. In June 2011, under this program, CMS Energy issued 762,925 shares of common stock at an average price of $19.66 per share, resulting in net proceeds of $15 million.

Preferred Stock of Subsidiary: Presented in the following table are details about Consumers' preferred stock outstanding:


December 31, 2011 and 2010	Series		Optional Redemption Price		Number of Shares		In Millions
Cumulative, $100 par value, authorized 7,500,000 shares, with no mandatory redemption		$ 4.16		$ 103.25		68,451		$ 7
		$ 4.50		$ 110.00		373,148		37
Total preferred stock of Consumers								$ 44

Consumers Energy Company [Member]

Financings

7: FINANCINGS AND CAPITALIZATION

Presented in the following table is CMS Energy's long-term debt at December 31:


In Millions
	Interest Rate (%)			Maturity		2011			2010
CMS ENERGY
Senior notes		8.500			2011	$	-		$	146
		6.300			2012		-			50
		Variable	¹		2013		150			150
		2.750			2014		250			-
		6.875			2015		125			125
		4.250			2015		250			250
		6.550			2017		250			250
		5.050			2018		250			250
		8.750			2019		300			300
		6.250			2020		300			300
		3.375	²		2023		-			4
		2.875	²		2024		226			288
		5.500	²		2029		172			172
Total – CMS Energy						$	2,273		$	2,285
CONSUMERS						$	4,329		$	4,529
OTHER CMS ENERGY SUBSIDIARIES
EnerBank certificates of deposit		1.328	³		2012-2018	$	462		$	363
Trust preferred securities		7.750			2027		29			29
Total – other CMS Energy subsidiaries						$	491		$	392
Total CMS Energy principal amount outstanding						$	7,093		$	7,206
Current amounts							(1,033	)		(726	)
Net unamortized discount							(20	)		(32	)
Total CMS Energy long-term debt						$	6,040		$	6,448

¹	CMS Energy's variable-rate senior notes bear interest at three-month LIBOR plus 95 basis points (1.353 percent at December 31, 2011 and 1.239 percent at December 31, 2010).

²	CMS Energy's contingently convertible notes. See the "Contingently Convertible Securities" section in this Note for further discussion of the conversion features.

Presented in the following table is Consumers' long-term debt at December 31:


In Millions
	Interest Rate (%)			Maturity		2011			2010
CONSUMERS
FMBs¹		5.000			2012	$	300		$	300
		5.375			2013		375			375
		6.000			2014		200			200
		5.000			2015		225			225
		2.600			2015		50			50
		5.500			2016		350			350
		5.150			2017		250			250
		3.210			2017		100			100
		5.650			2018		250			250
		6.125			2019		350			350
		6.700			2019		500			500
		5.650			2020		300			300
		3.770			2020		100			100
		5.300			2022		250			250
		5.800			2035		175			175
		6.170			2040		50			50
		4.970			2040		50			50
						$	3,875		$	3,875
Senior notes		6.875			2018		180			180
Securitization bonds		5.652	²		2012-2015		171			208
Nuclear fuel disposal liability to DOE		0.132	³				-			163
Tax-exempt pollution control revenue bonds		Various			2018-2035		103			103
Total Consumers principal amount outstanding						$	4,329		$	4,529
Current amounts							(339	)		(37	)
Net unamortized discount							(3	)		(4	)
Total Consumers long-term debt						$	3,987		$	4,488

¹	The weighted-average interest rate for Consumers' FMBs was 5.5 percent at December 31, 2011 and 2010.

²	The weighted-average interest rate for Consumers' Securitization bonds was 5.652 percent at December 31, 2011 and 5.613 percent at December 31, 2010.

³	The interest rate for Consumers' nuclear fuel disposal liability was 0.132 percent at December 31, 2010. For additional details, see the "Consumers' Electric Utility Contingencies – Nuclear Matters" section included in Note 5, Contingencies and Commitments.

Financings: Presented in the following table is a summary of major long-term debt transactions during the year ended December 31, 2011:

Principal
(In Millions)

Interest Rate

Issue/Retirement
Date

Maturity Date

Debt Issuances

CMS ENERGY

Senior notes

250

2.75

May 2011

May 2014

CONSUMERS

Tax-exempt bonds¹

Variable

May 2011

April 2018

Tax-exempt bonds¹

Variable

May 2011

April 2035

Total

353

Debt Retirements

CMS ENERGY

Senior notes

146

8.5

April 2011

Senior notes

6.3

October 2011

February 2012

Contingently convertible senior notes²

2.875

December 2011

December 2024

CONSUMERS

Nuclear fuel disposal liability³

163

Variable

July 2011

Tax-exempt bonds¹

Variable

May 2011

April 2018

Tax-exempt bonds¹

Variable

May 2011

April 2035

Total

524

²	CMS Energy's contingently convertible notes. See the "Contingently Convertible Securities" section in this Note for further discussion of the conversions.

³	In July 2011, Consumers settled its nuclear fuel disposal liability with the DOE. For additional details, see the "Consumers' Electric Utility Contingencies – Nuclear Matters" section in Note 5, Contingencies and Commitments.

In January 2012, CMS Energy called all of its outstanding 7.75 percent Trust Preferred Securities, to be redeemed in late February 2012.

Debt Maturities: At December 31, 2011, the aggregate annual contractual maturities for long-term debt for the next five years were:


In Millions
	Payments Due
	2012		2013		2014		2015		2016
CMS ENERGY, INCLUDING CONSUMERS
Long-term debt	$	635	$	631	$	527	$	725	$	369
CONSUMERS
Long-term debt	$	339	$	416	$	243	$	323	$	350

Revolving Credit Facilities: The following secured revolving credit facilities with banks were available at December 31, 2011:


In Millions
Expiration Date	Amount of Facility		Amount Borrowed		Letters of Credit Outstanding		Amount Available
CMS ENERGY
March 31, 2016¹		$ 550		$ -		$ 3		$ 547
CONSUMERS
March 31, 2016^{2, 3}		$ 500		$ -		$ 1		$ 499
August 9, 2013³		150		-		-		150
September 9, 2014³		30		-		30		-

²	On March 31, 2011, Consumers entered into a $500 million secured revolving credit facility with a consortium of banks. This facility has a five-year term and replaced Consumers' revolving credit facility that was set to expire in 2012.

³	Obligations under this facility are secured by FMBs of Consumers.

Contingently Convertible Securities: Presented in the following table are the significant terms of CMS Energy's contingently convertible securities at December 31, 2011:


Security	Maturity		Outstanding (In Millions)		Adjusted Conversion Price		Adjusted Trigger Price
2.875% senior notes		2024		$ 226		$ 12.54		$ 15.04
5.50% senior notes		2029		172		14.08		18.31

The holders of the 2.875 percent senior notes have the right to require CMS Energy to purchase the notes at par on December 1, 2014 and December 1, 2019.

Presented in the following table are details about conversions of contingently convertible securities during the year ended December 31, 2011:


Series	Conversion Date		Principal Converted (In Millions)		Conversion Value per $1,000 of principal		Shares of Common Stock Issued on Settlement		Cash Paid on Settlement (In Millions)
3.375% contingently convertible senior notes due 2023		January 2011	$	4	$	1,994.21		197,472	$	4
2.875% contingently convertible senior notes due 2024		December 2011	$	62	$	1,654.13		1,954,542	$	62

Dividend Restrictions: Under provisions of CMS Energy's senior notes indenture, at December 31, 2011, payment of common stock dividends by CMS Energy was limited to $1.2 billion.

For the year ended December 31, 2011, CMS Energy received $374 million of common stock dividends from Consumers.

Capitalization: The authorized capital stock of CMS Energy consists of:

—

350 million shares of CMS Energy Common Stock, par value $0.01 per share, and

—

10 million shares of CMS Energy Preferred Stock, par value $0.01 per share.

Preferred Stock of Subsidiary: Presented in the following table are details about Consumers' preferred stock outstanding:


December 31, 2011 and 2010	Series		Optional Redemption Price		Number of Shares		In Millions
Cumulative, $100 par value, authorized 7,500,000 shares, with no mandatory redemption		$ 4.16		$ 103.25		68,451		$ 7
		$ 4.50		$ 110.00		373,148		37
Total preferred stock of Consumers								$ 44

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

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