Financings

6 Months Ended

Jun. 30, 2011

Financings

5: FINANCINGS

Presented in the following table is a summary of major long-term debt transactions during the six months ended June 30, 2011:

	Principal					Issue/Retirement
	(In Millions)		Interest Rate			Date	Maturity Date
Debt Issuances
CMS Energy
Senior Notes	$	250		2.75	%	May 2011	May 2014
Consumers
Tax-exempt bonds1		68	Variable			May 2011	April 2018
Tax-exempt bonds1		35	Variable			May 2011	April 2035
Total	$	353
Debt Retirements
Consumers
Tax-exempt bonds1	$	68	Variable			May 2011	April 2018
Tax-exempt bonds1		35	Variable			May 2011	April 2035
Total	$	103

¹ 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.

Revolving Credit Facilities: The following secured revolving credit facilities with banks were available at June 30, 2011:

In Millions
	Amount of		Amount		Letters of Credit		Amount
Expiration Date	Facility		Borrowed		Outstanding		Available
CMS Energy
March 31, 20161	$	550	$	—	$	3	$	547
Consumers
March 31, 20162, 3	$	500	$	—	$	189	$	311
August 9, 20133		150		—		—		150
September 21, 20114		30		—		30		—

1	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 replaces 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 six months ended June 30, 2011 totaled $11 million, with a weighted-average annual interest rate of 2.22 percent, representing LIBOR plus 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 replaces Consumers' revolving credit facility that was set to expire in 2012.
3	Obligations under this facility are secured by FMBs of Consumers.
4	Secured revolving letter of credit facility.

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, 2011, $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, 2011, Consumers had no borrowings under this program.

Contingently Convertible Securities: Presented in the following table are the significant terms of CMS Energy's contingently convertible securities at June 30, 2011:

			Outstanding		Adjusted		Adjusted
Security	Maturity		(In Millions)		Conversion Price		Trigger Price
2.875% senior notes		2024	$	288	$	12.81	$	15.37
5.50% senior notes		2029		172		14.26		18.54

During 20 of the last 30 trading days ended June 30, 2011, the adjusted 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 September 30, 2011.

Presented in the following table are details about conversions of contingently convertible securities during the six months ended June 30, 2011:

3.375% contingently		Principal		Conversion Value		Common		Cash Paid on
convertible senior notes	Conversion	Converted		per $1,000 of		Stock Issued		Settlement
due 2023	Date	(In Millions)		principal		on Settlement		(In Millions)
Voluntary conversion	January 2011	$	4	$	1,994.21		197,472	$	4

Dividend Restrictions: Under provisions of CMS Energy's senior notes indenture, at June 30, 2011, payment of common stock dividends by CMS Energy was limited to $1.1 billion.

Under the provisions of its articles of incorporation, at June 30, 2011, Consumers had $452 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 2011, CMS Energy received $196 million of common stock dividends from Consumers.

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.

Consumers Energy Company [Member]

Financings

5: FINANCINGS

Presented in the following table is a summary of major long-term debt transactions during the six months ended June 30, 2011:

	Principal					Issue/Retirement
	(In Millions)		Interest Rate			Date	Maturity Date
Debt Issuances
CMS Energy
Senior Notes	$	250		2.75	%	May 2011	May 2014
Consumers
Tax-exempt bonds1		68	Variable			May 2011	April 2018
Tax-exempt bonds1		35	Variable			May 2011	April 2035
Total	$	353
Debt Retirements
Consumers
Tax-exempt bonds1	$	68	Variable			May 2011	April 2018
Tax-exempt bonds1		35	Variable			May 2011	April 2035
Total	$	103

¹ 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.

Revolving Credit Facilities: The following secured revolving credit facilities with banks were available at June 30, 2011:

In Millions
	Amount of		Amount		Letters of Credit		Amount
Expiration Date	Facility		Borrowed		Outstanding		Available
CMS Energy
March 31, 20161	$	550	$	—	$	3	$	547
Consumers
March 31, 20162, 3	$	500	$	—	$	189	$	311
August 9, 20133		150		—		—		150
September 21, 20114		30		—		30		—

1	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 replaces 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 six months ended June 30, 2011 totaled $11 million, with a weighted-average annual interest rate of 2.22 percent, representing LIBOR plus 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 replaces Consumers' revolving credit facility that was set to expire in 2012.
3	Obligations under this facility are secured by FMBs of Consumers.
4	Secured revolving letter of credit facility.

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, 2011, $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, 2011, Consumers had no borrowings under this program.

Contingently Convertible Securities: Presented in the following table are the significant terms of CMS Energy's contingently convertible securities at June 30, 2011:

			Outstanding		Adjusted		Adjusted
Security	Maturity		(In Millions)		Conversion Price		Trigger Price
2.875% senior notes		2024	$	288	$	12.81	$	15.37
5.50% senior notes		2029		172		14.26		18.54

During 20 of the last 30 trading days ended June 30, 2011, the adjusted 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 September 30, 2011.

Presented in the following table are details about conversions of contingently convertible securities during the six months ended June 30, 2011:

3.375% contingently		Principal		Conversion Value		Common		Cash Paid on
convertible senior notes	Conversion	Converted		per $1,000 of		Stock Issued		Settlement
due 2023	Date	(In Millions)		principal		on Settlement		(In Millions)
Voluntary conversion	January 2011	$	4	$	1,994.21		197,472	$	4

Dividend Restrictions: Under provisions of CMS Energy's senior notes indenture, at June 30, 2011, payment of common stock dividends by CMS Energy was limited to $1.1 billion.

Under the provisions of its articles of incorporation, at June 30, 2011, Consumers had $452 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 2011, CMS Energy received $196 million of common stock dividends from Consumers.

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.