Financings and Capitalization

6 Months Ended

Jun. 30, 2012

Financings and Capitalization

5:     FINANCINGS AND CAPITALIZATION

Presented in the following table is a summary of major long-term debt transactions during the six months ended June 30, 2012:

	Principal (In Millions)		Interest Rate			Issue/Retirement Date		Maturity Date
Debt Issuances
CMS Energy
Senior notes		$      300		5.05	%		March 2012		March 2022
Term loan facility1,2		30		variable			February 2012		December 2016
Consumers
FMB		375		2.85	%		May 2012		May 2022
Total		$      705
Debt Retirements
CMS Energy
Contingently convertible senior notes3		$      226		2.88	%		January 2012 and April 2012		December 2024
Trust Preferred Securities		29		7.75	%		February 2012		July 2027
Consumers
FMB		300		5.00	%		February 2012		February 2012
FMB		375		5.38	%		May 2012		April 2013
Total		$      930

¹  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 bear interest at an annual interest rate of LIBOR plus 2.5 percent. 

²  CMS Energy used these proceeds to retire the 7.75 percent Trust Preferred Securities.

³  CMS Energy's contingently convertible notes. See the "Contingently Convertible Securities" section in this Note for further discussion of the conversions.

In May 2012, CMS Energy called for redemption its $150 million floating-rate senior notes due January 2013. The notes were redeemed in July 2012 using proceeds from the $180 million term loan facility entered into in December 2011.

In June 2012, Consumers entered into a short-term credit agreement permitting Consumers to borrow up to $375 million. Consumers borrowed $350 million under this agreement in July 2012. This facility will mature in March 2013.

In July 2012, Consumers executed a bond purchase agreement under which it will issue, in a December 2012 private placement, $52 million of 3.19 percent FMBs due 2024, $35 million of 3.39 percent FMBs due 2027, and $263 million of 4.31 percent FMBs due 2042.

Revolving Credit Facilities: The following secured revolving credit facilities with banks were available at June 30, 2012:

In Millions
Expiration Date	Amount of Facility		Amount Borrowed		Letters of Credit Outstanding		Amount Available
CMS Energy
March 31, 20161		$    550		$    25		$      2		$    523
Consumers
March 31, 20162		$    500		$       -		$      3		$    497
April 18, 20172		150		-		-		150
September 9, 20142		30		-		30		-

¹  Obligations under this facility are secured by Consumers common stock. CMS Energy's average borrowings during the six months ended June 30, 2012 totaled $13 million, with a weighted-average annual interest rate of 2.27 percent, representing LIBOR plus 2.00 percent.

²  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 June 30, 2012, $250 million of accounts receivable were eligible for transfer, and no accounts receivable had been transferred under the program. During the six months ended June 30, 2012, Consumers' average short-term borrowings totaled $16 million, with a weighted average annual interest rate of 0.9 percent.

Contingently Convertible Securities: Presented in the following table are the significant terms of CMS Energy's contingently convertible securities at June 30, 2012:

Security	Maturity		Outstanding (In Millions)			Adjusted Conversion Price		Adjusted Trigger Price
5.50% senior notes		2029		$	172		13.94		18.12

During 20 of the last 30 trading days ended June 30, 2012, the adjusted trigger-price contingencies were met for the contingently convertible senior notes, and as a result, the senior notes are convertible at the option of the note holders for the three months ending September 30, 2012.

Presented in the following table are details about conversions of contingently convertible securities during the six months ended June 30, 2012:

	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)
2.875% senior notes due 2024		January 2012		$        73		$    1,738.99		2,464,138		$        73
		April 2012		153		1,774.98		5,381,349		153

Dividend Restrictions: Under provisions of CMS Energy's senior notes indenture, at June 30, 2012, payment of common stock dividends by CMS Energy was limited to $1.3 billion.

Under the provisions of its articles of incorporation, at June 30, 2012, Consumers had $532 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 six months ended June 30, 2012, CMS Energy received $158 million of common stock dividends from Consumers.

Issuance of Common Stock: In June 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 2012, under this program, CMS Energy issued 650,235 shares of common stock at an average price of $23.07 per share, resulting in net proceeds of $15 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.

Consumers Energy Company [Member]

Financings and Capitalization

5:     FINANCINGS AND CAPITALIZATION

Presented in the following table is a summary of major long-term debt transactions during the six months ended June 30, 2012:

	Principal (In Millions)		Interest Rate			Issue/Retirement Date		Maturity Date
Debt Issuances
CMS Energy
Senior notes		$      300		5.05	%		March 2012		March 2022
Term loan facility1,2		30		variable			February 2012		December 2016
Consumers
FMB		375		2.85	%		May 2012		May 2022
Total		$      705
Debt Retirements
CMS Energy
Contingently convertible senior notes3		$      226		2.88	%		January 2012 and April 2012		December 2024
Trust Preferred Securities		29		7.75	%		February 2012		July 2027
Consumers
FMB		300		5.00	%		February 2012		February 2012
FMB		375		5.38	%		May 2012		April 2013
Total		$      930

¹  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 bear interest at an annual interest rate of LIBOR plus 2.5 percent.

²  CMS Energy used these proceeds to retire the 7.75 percent Trust Preferred Securities.

³  CMS Energy's contingently convertible notes. See the "Contingently Convertible Securities" section in this Note for further discussion of the conversions.

In May 2012, CMS Energy called for redemption its $150 million floating-rate senior notes due January 2013. The notes were redeemed in July 2012 using proceeds from the $180 million term loan facility entered into in December 2011.

In June 2012, Consumers entered into a short-term credit agreement permitting Consumers to borrow up to $375 million. Consumers borrowed $350 million under this agreement in July 2012. This facility will mature in March 2013.

In July 2012, Consumers executed a bond purchase agreement under which it will issue, in a December 2012 private placement, $52 million of 3.19 percent FMBs due 2024, $35 million of 3.39 percent FMBs due 2027, and $263 million of 4.31 percent FMBs due 2042.

Revolving Credit Facilities: The following secured revolving credit facilities with banks were available at June 30, 2012:

In Millions
Expiration Date	Amount of Facility		Amount Borrowed		Letters of Credit Outstanding		Amount Available
CMS Energy
March 31, 20161		$    550		$    25		$      2		$    523
Consumers
March 31, 20162		$    500		$       -		$      3		$    497
April 18, 20172		150		-		-		150
September 9, 20142		30		-		30		-

¹  Obligations under this facility are secured by Consumers common stock. CMS Energy's average borrowings during the six months ended June 30, 2012 totaled $13 million, with a weighted-average annual interest rate of 2.27 percent, representing LIBOR plus 2.00 percent.

²  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 June 30, 2012, $250 million of accounts receivable were eligible for transfer, and no accounts receivable had been transferred under the program. During the six months ended June 30, 2012, Consumers' average short-term borrowings totaled $16 million, with a weighted average annual interest rate of 0.9 percent.

Contingently Convertible Securities: Presented in the following table are the significant terms of CMS Energy's contingently convertible securities at June 30, 2012:

Security	Maturity		Outstanding (In Millions)			Adjusted Conversion Price		Adjusted Trigger Price
5.50% senior notes		2029		$	172		13.94		18.12

During 20 of the last 30 trading days ended June 30, 2012, the adjusted trigger-price contingencies were met for the contingently convertible senior notes, and as a result, the senior notes are convertible at the option of the note holders for the three months ending September 30, 2012.

Presented in the following table are details about conversions of contingently convertible securities during the six months ended June 30, 2012:

	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)
2.875% senior notes due 2024		January 2012		$        73		$    1,738.99		2,464,138		$        73
		April 2012		153		1,774.98		5,381,349		153

Dividend Restrictions: Under provisions of CMS Energy's senior notes indenture, at June 30, 2012, payment of common stock dividends by CMS Energy was limited to $1.3 billion.

Under the provisions of its articles of incorporation, at June 30, 2012, Consumers had $532 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 six months ended June 30, 2012, CMS Energy received $158 million of common stock dividends from Consumers.

Issuance of Common Stock: In June 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 2012, under this program, CMS Energy issued 650,235 shares of common stock at an average price of $23.07 per share, resulting in net proceeds of $15 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.