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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2013

Schedule Of Effective Income Tax Rate Reconciliation



In Millions, Except Tax Rate
Years Ended December 31	2013				2012				2011
CMS Energy, including Consumers
Income from continuing operations before income taxes		$	754			$	620			$	604

Income tax expense at statutory rate			264				217				211
Increase (decrease) in income taxes from:
MCIT law change, net of federal effect1			-				-				(32)
State and local income taxes, net of federal effect			37				27				21
Other, net			1				1				(9)
Income tax expense		$	302			$	245			$	191
Effective tax rate			40.1	%			39.5	%			31.6	%
Consumers
Income from continuing operations before income taxes		$	880			$	736			$	734

Income tax expense at statutory rate			308				258				257
Increase (decrease) in income taxes from:
State and local income taxes, net of federal effect			43				36				24
Other, net			(5)				3				(14)
Income tax expense		$	346			$	297			$	267
Effective tax rate			39.3	%			40.4	%			36.4	%

For the year ended December 31, 2011, CMS Energy and Consumers remeasured their Michigan deferred income tax assets and liabilities due to the enactment in May 2011 of the MCIT, which became effective January 1, 2012. The MCIT, a simplified six percent corporate income tax, replaced the MBT, a complex multi-part tax. CMS Energy recognized a one-time non-cash deferred tax benefit of $32 million as a result of this remeasurement. Consumers recognized a $128 million regulatory asset (not including the effects of income tax gross-ups) related to this change in tax law.

Significant Components Of Income Tax Expense Table



In Millions
Years Ended December 31	2013			2012			2011
CMS Energy, including Consumers
Current income taxes
Federal		$	-		$	1		$	2
State and local			34			21			24
		$	34		$	22		$	26
Deferred income taxes
Federal		$	248		$	205		$	207
State and local			23			21			11
MCIT law change			-			-			(49)
		$	271		$	226		$	169
Deferred income tax credit			(3)			(3)			(4)
Tax expense		$	302		$	245		$	191
Consumers
Current income taxes
Federal		$	137		$	110		$	74
State and local			45			37			32
		$	182		$	147		$	106
Deferred income taxes
Federal		$	147		$	134		$	159
State and local			20			19			6
		$	167		$	153		$	165
Deferred income tax credit			(3)			(3)			(4)
Tax expense		$	346		$	297		$	267

Principal Components Of Deferred Income Tax Assets Table



In Millions
December 31	2013			2012
CMS Energy, including Consumers
Employee benefits		$	(99)		$	3
Gas inventory			(130)			(147)
Plant, property, and equipment			(1,856)			(1,783)
Net regulatory tax liability			86			131
Reserves and accruals			57			71
Securitized costs			(190)			(73)
Tax loss and credit carryforwards			629			733
Other			15			(15)
		$	(1,488)		$	(1,080)
Less valuation allowance			(2)			(3)
Total net deferred income tax liabilities		$	(1,490)		$	(1,083)
Deferred tax assets, net of valuation reserves		$	785		$	935
Deferred tax liabilities			(2,275)			(2,018)
Total net deferred income tax liabilities		$	(1,490)		$	(1,083)
Consumers
Employee benefits		$	(119)		$	(36)
Gas inventory			(130)			(147)
Plant, property, and equipment			(1,911)			(1,848)
Net regulatory tax liability			86			131
Reserves and accruals			31			41
Securitized costs			(190)			(73)
Tax loss and credit carryforwards			48			61
Other			16			(13)
		$	(2,169)		$	(1,884)
Less valuation allowance			(1)			(1)
Total net deferred income tax liabilities		$	(2,170)		$	(1,885)
Deferred tax assets, net of valuation reserves		$	180		$	232
Deferred tax liabilities			(2,350)			(2,117)
Total net deferred income tax liabilities		$	(2,170)		$	(1,885)

Loss And Credit Carryforwards Table



In Millions
	Gross Amount			Tax Attribute			Expiration
CMS Energy, including Consumers
Federal net operating loss carryforward		$	900		$	315	2026 – 2031
Local net operating loss carryforwards			420			4	2023 – 2031
State capital loss carryforward			18			1	2014
Alternative minimum tax credits			270			270	No expiration
Charitable contribution carryover			5			2	2016
General business credits			37			37	2018 – 2033
Total tax attributes					$	629
Consumers
Federal net operating loss carryforward		$	129		$	45	2026 – 2031
State capital loss carryforward			10			1	2014
Charitable contribution carryover			5			2	2016
Total tax attributes					$	48

Reconciliation Of Beginning And Ending Uncertain Tax Benefits Table



In Millions
Years Ended December 31	2013			2012			2011
CMS Energy, including Consumers
Balance at beginning of period		$	1		$	4		$	4
Reductions for prior-year tax positions			-			(4)			(1)
Additions for prior-year tax positions			3			1			1
Balance at end of period		$	4		$	1		$	4
Consumers
Balance at beginning of period		$	1		$	4		$	3
Reductions for prior-year tax positions			-			(4)			-
Additions for prior-year tax positions			3			1			1
Balance at end of period		$	4		$	1		$	4

Consumers Energy Company [Member]

Schedule Of Effective Income Tax Rate Reconciliation



In Millions, Except Tax Rate
Years Ended December 31	2013				2012				2011
CMS Energy, including Consumers
Income from continuing operations before income taxes		$	754			$	620			$	604

Income tax expense at statutory rate			264				217				211
Increase (decrease) in income taxes from:
MCIT law change, net of federal effect1			-				-				(32)
State and local income taxes, net of federal effect			37				27				21
Other, net			1				1				(9)
Income tax expense		$	302			$	245			$	191
Effective tax rate			40.1	%			39.5	%			31.6	%
Consumers
Income from continuing operations before income taxes		$	880			$	736			$	734

Income tax expense at statutory rate			308				258				257
Increase (decrease) in income taxes from:
State and local income taxes, net of federal effect			43				36				24
Other, net			(5)				3				(14)
Income tax expense		$	346			$	297			$	267
Effective tax rate			39.3	%			40.4	%			36.4	%

Significant Components Of Income Tax Expense Table



In Millions
Years Ended December 31	2013			2012			2011
CMS Energy, including Consumers
Current income taxes
Federal		$	-		$	1		$	2
State and local			34			21			24
		$	34		$	22		$	26
Deferred income taxes
Federal		$	248		$	205		$	207
State and local			23			21			11
MCIT law change			-			-			(49)
		$	271		$	226		$	169
Deferred income tax credit			(3)			(3)			(4)
Tax expense		$	302		$	245		$	191
Consumers
Current income taxes
Federal		$	137		$	110		$	74
State and local			45			37			32
		$	182		$	147		$	106
Deferred income taxes
Federal		$	147		$	134		$	159
State and local			20			19			6
		$	167		$	153		$	165
Deferred income tax credit			(3)			(3)			(4)
Tax expense		$	346		$	297		$	267

Principal Components Of Deferred Income Tax Assets Table



In Millions
December 31	2013			2012
CMS Energy, including Consumers
Employee benefits		$	(99)		$	3
Gas inventory			(130)			(147)
Plant, property, and equipment			(1,856)			(1,783)
Net regulatory tax liability			86			131
Reserves and accruals			57			71
Securitized costs			(190)			(73)
Tax loss and credit carryforwards			629			733
Other			15			(15)
		$	(1,488)		$	(1,080)
Less valuation allowance			(2)			(3)
Total net deferred income tax liabilities		$	(1,490)		$	(1,083)
Deferred tax assets, net of valuation reserves		$	785		$	935
Deferred tax liabilities			(2,275)			(2,018)
Total net deferred income tax liabilities		$	(1,490)		$	(1,083)
Consumers
Employee benefits		$	(119)		$	(36)
Gas inventory			(130)			(147)
Plant, property, and equipment			(1,911)			(1,848)
Net regulatory tax liability			86			131
Reserves and accruals			31			41
Securitized costs			(190)			(73)
Tax loss and credit carryforwards			48			61
Other			16			(13)
		$	(2,169)		$	(1,884)
Less valuation allowance			(1)			(1)
Total net deferred income tax liabilities		$	(2,170)		$	(1,885)
Deferred tax assets, net of valuation reserves		$	180		$	232
Deferred tax liabilities			(2,350)			(2,117)
Total net deferred income tax liabilities		$	(2,170)		$	(1,885)

Loss And Credit Carryforwards Table



In Millions
	Gross Amount			Tax Attribute			Expiration
CMS Energy, including Consumers
Federal net operating loss carryforward		$	900		$	315	2026 – 2031
Local net operating loss carryforwards			420			4	2023 – 2031
State capital loss carryforward			18			1	2014
Alternative minimum tax credits			270			270	No expiration
Charitable contribution carryover			5			2	2016
General business credits			37			37	2018 – 2033
Total tax attributes					$	629
Consumers
Federal net operating loss carryforward		$	129		$	45	2026 – 2031
State capital loss carryforward			10			1	2014
Charitable contribution carryover			5			2	2016
Total tax attributes					$	48

Reconciliation Of Beginning And Ending Uncertain Tax Benefits Table



In Millions
Years Ended December 31	2013			2012			2011
CMS Energy, including Consumers
Balance at beginning of period		$	1		$	4		$	4
Reductions for prior-year tax positions			-			(4)			(1)
Additions for prior-year tax positions			3			1			1
Balance at end of period		$	4		$	1		$	4
Consumers
Balance at beginning of period		$	1		$	4		$	3
Reductions for prior-year tax positions			-			(4)			-
Additions for prior-year tax positions			3			1			1
Balance at end of period		$	4		$	1		$	4

- Definition

Tabular disclosure of tax positions taken in the tax returns filed or to be filed for which it is more likely than not that the tax position will not be sustained upon examination by taxing authorities (i.e., uncertain tax positions) and other types of income tax contingencies, including: (1) the policy on classification of interest and penalties; (2) a tabular reconciliation of the total amounts of unrecognized tax benefits at the beginning and end of the period; the total amount(s) of: (3) unrecognized tax benefits that, if recognized, would affect the effective tax rate, and (4) interest and penalties recognized in each of the income statement and balance sheet; (5) for positions for which it is reasonably possible that the total amounts unrecognized will significantly change within 12 months of the reporting date the: (i) nature of the uncertainty, (ii) nature of the event that could occur that would cause the change, and (iii) an estimate of the range of the reasonably possible change or a statement that an estimate of the range cannot be made; and (6) a description of tax years that remain subject to examination by major tax jurisdictions.

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