Financings and Capitalization

12 Months Ended

Dec. 31, 2022

Debt Instrument [Line Items]

Financings and Capitalization

Financings and Capitalization

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

In Millions
	Interest Rate (%)		Maturity	2022			2021
CMS Energy, including Consumers
CMS Energy, parent only
Senior notes	3.875		2024		$	250		$	250
	3.600		2025		250			250
	3.000		2026		300			300
	2.950		2027		275			275
	3.450		2027		350			350
	4.700		2043		250			250
	4.875		2044		300			300
					$	1,975		$	1,975
Junior subordinated notes1	4.750	2	2050		500			500
	3.750	3	2050		400			400
	5.625		2078		200			200
	5.875		2078		280			280
	5.875		2079		630			630
					$	2,010		$	2,010
Total CMS Energy, parent only					$	3,985		$	3,985
Consumers					10,277			8,505
NorthStar Clean Energy, including subsidiaries
Term loan facility	variable		2025		—			78
Term loan facility	variable	4	2023		100			—
Total principal amount outstanding					$	14,362		$	12,568
Current amounts					(1,090)			(373)
Unamortized discounts					(30)			(31)
Unamortized issuance costs					(120)			(118)
Total long-term debt					$	13,122		$	12,046

1These unsecured obligations rank subordinate and junior in right of payment to all of CMS Energy’s existing and future senior indebtedness.

2On June 1, 2030, and every five years thereafter, the notes will reset to an interest rate equal to the five-year treasury rate plus 4.116 percent.

3On December 1, 2030, and every five years thereafter, the notes will reset to an interest rate equal to the five-year treasury rate plus 2.900 percent

4Funds borrowed under this facility have an interest rate of one-month Term SOFR plus a spread of one percent. At December 31, 2022, the interest rate for the loan issued under this facility was 5.423 percent.

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

In Millions
	Interest Rate (%)		Maturity		2022			2021
Consumers
First mortgage bonds
	0.350		2023			$	300		$	300
	3.375		2023			325			325
	3.125		2024			250			250
	3.190		2024			52			52
	3.680		2027			100			100
	3.390		2027			35			35
	3.800		2028			300			300
	3.600		2032			350			—
	3.180		2032			100			100
	5.800		2035			175			175
	3.520		2037			335			335
	4.010		2038			215			215
	6.170		2040			50			50
	4.970		2040			50			50
	4.310		2042			263			263
	3.950		2043			425			425
	4.100		2045			250			250
	3.250		2046			450			450
	3.950		2047			350			350
	4.050		2048			550			550
	4.350		2049			550			550
	3.750		2050			300			300
	3.100		2050			550			550
	3.500		2051			575			575
	2.650		2052			300			300
	4.200		2052			450			—
	3.860		2052			50			50
	4.280		2057			185			185
	2.500		2060			525			525
	4.350		2064			250			250
	variable	1	2069			76			76
	variable	1	2070			134			134
	variable	1	2070			127			127
						$	8,997		$	8,197
Tax-exempt revenue bonds	0.875	2	2035			35			35
	1.800	3	2049			75			75
						$	110		$	110
Securitization bonds	3.343	4	2025-2029	5		170			198
Term loan facility	variable	6	2024			1,000			—
Total principal amount outstanding						$	10,277		$	8,505
Current amounts						(991)			(365)
Unamortized discounts						(27)			(28)
Unamortized issuance costs						(67)			(62)
Total long-term debt						$	9,192		$	8,050

1The variable-rate bonds bear interest quarterly at a rate of three-month LIBOR minus 0.300 percent, subject to a zero-percent floor. At December 31, 2022, the interest rates were 4.469 percent for bonds due

September 2069, 4.375 percent for bonds due May 2070, and 3.484 percent for bonds due October 2070. The interest rate for all variable-rate bonds at December 31, 2021 was zero percent. The holders of these variable-rate bonds may put them to Consumers for redemption on certain dates prior to their stated maturity, including dates within one year of December 31, 2022.

2The interest rate on these tax-exempt revenue bonds will reset on October 8, 2026.

3The interest rate on these tax‑exempt revenue bonds will reset on October 1, 2024.

4The weighted-average interest rate for Consumers’ securitization bonds issued through its subsidiary, Consumers 2014 Securitization Funding, was 3.343 percent at December 31, 2022 and 3.290 percent at December 31, 2021.

5Principal and interest payments are made semiannually.

6Loans under this facility have an interest rate of one-month Term SOFR plus 0.650 percent. At December 31, 2022, the weighted-average interest rate for the loans issued under this facility was 4.975 percent at December 31, 2022.

Financings: Presented in the following table is a summary of major long-term debt issuances during 2022:

	Principal (In Millions)			Interest Rate		Issuance Date	Maturity Date
NorthStar Clean Energy, including subsidiaries
Term loan facility1		$	100	variable		December 2022	September 2023
Total NorthStar Clean Energy, including subsidiaries		$	100
Consumers
Term loan facility2		$	1,000	variable		July 2022	January 2024
First mortgage bonds		350		3.600	%	August 2022	August 2032
First mortgage bonds		450		4.200	%	August 2022	September 2052
Total Consumers		$	1,800
Total CMS Energy		$	1,900

1    In December 2022, a subsidiary of NorthStar Clean Energy entered into a $185 million unsecured term loan credit agreement. Under this credit agreement, $100 million of loans have been issued as of December 31, 2022. In January 2023, an additional $30 million was borrowed under the unsecured term loan credit agreement.

2    In July 2022, Consumers entered into a delayed-draw $1.0 billion unsecured term loan credit agreement. Under this credit agreement, Consumers issued loans of $550 million in September 2022 and $450 million in November 2022. In January 2023, Consumers repaid $500 million of the term loan credit agreement.

In January 2023, Consumers entered into a bond purchase agreement to issue an aggregate principal amount of $400 million of first mortgage bonds through a private placement offering. The bonds, which were priced in November 2022, carry a weighted average interest rate of 5.251 percent and mature at varying dates between 2026 and 2037. The bonds are expected to be issued in May 2023. The proceeds of the bonds will be used to finance a portion of the purchase price of the New Covert Generating Facility and for general corporate purposes.

Also in January 2023, Consumers issued $425 million of first mortgage bonds that mature in March 2028 and bear interest at a rate of 4.650 percent. The proceeds of the bonds have been used to repay a portion of the $1.0 billion aggregate principal amount outstanding under Consumers’ term loan credit agreement and for general corporate purposes.

Presented in the following table is a summary of major long-term debt retirements during 2022:

	Principal (In Millions)			Interest Rate	Retirement Date	Maturity Date
NorthStar Clean Energy, including subsidiaries
Term loan facility		$	76	variable	June 2022	October 2025

In June 2022, NorthStar Clean Energy sold a Class A membership interest in NWO Holdco to a tax equity investor for $49 million. Proceeds from the sale were used to retire the non-recourse debt held by a subsidiary of NorthStar Clean Energy. For more information, see Note 18, Variable Interest Entities.

First Mortgage Bonds: Consumers secures its first mortgage bonds by a mortgage and lien on substantially all of its property. Consumers’ ability to issue first mortgage bonds 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: Consumers is required to maintain FERC authorization for financings. Its current authorization expires on March 31, 2024. Any long-term issuances during the authorization period are exempt from FERC’s competitive bidding and negotiated placement requirements. In December 2022, Consumers filed an application for authority to issue securities between April 1, 2023 and March 31 2025. Securitization Bonds: Certain regulatory assets held by Consumers’ subsidiary, Consumers 2014 Securitization Funding, collateralize Consumers’ securitization bonds. The bondholders have no recourse to Consumers’ assets except for those held by the subsidiary that issued the bonds. Consumers collects securitization surcharges to cover the principal and interest on the bonds as well as certain other qualified costs. The surcharges collected are remitted to a trustee and are not available to creditors of Consumers or creditors of Consumers’ affiliates other than the subsidiary that issued the bonds.

Debt Maturities: At December 31, 2022, the aggregate annual maturities for long-term debt for the next five years, based on stated maturities or earlier put dates, were:

In Millions
	2023			2024			2025			2026			2027
CMS Energy, including Consumers
Long-term debt
CMS Energy, parent only		$	—		$	250		$	250		$	300		$	625
Consumers		991			1,332			31			32			168
NorthStar Clean Energy, including subsidiaries		100			—			—			—			—
Total CMS Energy1		$	1,091		$	1,582		$	281		$	332		$	793
Consumers
Long-term debt		$	991		$	1,332		$	31		$	32		$	168

1    This amount excludes debt issuance costs, related to the term loan agreement of a subsidiary of NorthStar Clean Energy, of less than $1 million

Credit Facilities: The following credit facilities with banks were available at December 31, 2022:

In Millions
Expiration Date	Amount of Facility			Amount Borrowed			Letters of Credit Outstanding			Amount Available
CMS Energy, parent only
December 14, 20271		$	550		$	—		$	18		$	532
September 22, 2024		50			—			50			—
NorthStar Clean Energy, including subsidiaries
September 25, 20252		$	37		$	—		$	37		$	—
Consumers3
December 14, 2027		$	1,100		$	—		$	29		$	1,071
November 18, 2024		250			—			27			223

1There were no borrowings under this facility during the year ended December 31, 2022.

2This letter of credit facility is available to Aviator Wind Equity Holdings. For more information regarding Aviator Wind Equity Holdings, see Note 18, Variable Interest Entities.

3Obligations under these facilities are secured by first mortgage bonds of Consumers. There were no borrowings under these facilities during the year ended December 31, 2022.

Short-term Borrowings: Under Consumers’ commercial paper program, Consumers may issue, in one or more placements, investment-grade commercial paper notes with maturities of up to 365 days at market interest rates. These issuances are supported by Consumers’ revolving credit facilities and may have an aggregate principal amount outstanding of up to $500 million. While the amount of outstanding commercial paper does not reduce the available capacity of the revolving credit facilities, Consumers does not intend to issue commercial paper in an amount exceeding the available capacity of the facilities. At December 31, 2022, there were $20 million of commercial paper notes outstanding under this program at an annual interest rate of 4.710 percent, recorded as current notes payable on the consolidated balance sheets of CMS Energy and Consumers.

In December 2022, Consumers renewed a short-term credit agreement with CMS Energy, permitting Consumers to borrow up to $500 million. At December 31, 2022, outstanding borrowings under the agreement were $75 million bearing the maximum interest rate authorized by FERC for this short-term credit agreement of 3.500 percent.

Dividend Restrictions: At December 31, 2022, payment of dividends by CMS Energy on its common stock was limited to $6.8 billion under provisions of the Michigan Business Corporation Act of 1972.

Under the provisions of its articles of incorporation, at December 31, 2022, Consumers had $1.9 billion of unrestricted retained earnings available to pay dividends on its common stock 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, dividends from Consumers on its common stock would not be limited to amounts in Consumers’ retained earnings. Any decision by Consumers to pay dividends on its common stock in excess of retained earnings would be based on specific facts and circumstances and would be subject to a formal regulatory filing process.

During the year ended December 31, 2022, Consumers paid $769 million in dividends on its common stock to CMS Energy.

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

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

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

Issuance of Common Stock: Under an existing equity offering program, CMS Energy may sell shares of its common stock having an aggregate sales price of up to $500 million in privately negotiated transactions, in “at the market” offerings, through forward sales transactions, or otherwise. In 2022, CMS Energy settled forward contracts under this program by issuing 962,354 shares of common stock at a weighted-average price of $57.36 per share, resulting in net proceeds of $55 million.

Presented in the following table are details of CMS Energy’s forward sales contracts under this program at December 31, 2022:

			Forward Price Per Share
Contract Date	Maturity Date	Number of Shares	Initial		December 31, 2022
August 3, 2022	February 1, 2024	2,944,207		67.59		67.83
August 24, 2022	February 26, 2024	1,677,938		69.46		69.69
August 29, 2022	February 26, 2024	1,783,388		68.18		68.38

These contracts allow CMS Energy to either physically settle the contracts by issuing shares of its common stock at the then-applicable forward sale price specified by the agreement or net settle the contracts through the delivery or receipt of cash or shares. CMS Energy may settle the contracts at any time through their maturity dates, and presently intends to physically settle the contracts by delivering shares of its common stock.

The initial forward price in the forward equity sale contracts includes a deduction for commissions and will be adjusted on a daily basis over the term based on an interest rate factor and decreased on certain dates by certain predetermined amounts to reflect expected dividend payments. No amounts are recorded on CMS Energy’s consolidated balance sheets until settlements of the forward equity sale contracts occur.

If CMS Energy had elected to net share settle or net cash settle the contracts as of December 31, 2022, CMS Energy would not have been required to deliver shares or pay cash.

Preferred Stock: CMS Energy’s Series C preferred stock is traded on the New York Stock Exchange under the symbol CMS PRC. Depositary shares represent a 1/1000th interest in a share of its Series C preferred stock. The Series C preferred stock has no maturity or mandatory redemption date and is not redeemable at the option of the holders. CMS Energy may, at its option, redeem the Series C preferred stock, in whole or in part, at any time on or after July 15, 2026. The Series C preferred stock ranks senior to CMS Energy’s common stock with respect to dividend rights and distribution rights upon liquidation. Presented in the following table are details of CMS Energy’s Series C preferred stock at December 31, 2022 and 2021:

	Depositary Share Par Value			Depositary Share Optional Redemption Price			Number of Depositary Shares Authorized	Number of Depositary Shares Outstanding
Cumulative, redeemable perpetual		$	25		$	25	9,200,000	9,200,000

Preferred Stock of Subsidiary: Consumers’ preferred stock is traded on the New York Stock Exchange under the symbol CMS-PB. Presented in the following table are details of Consumers’ preferred stock at December 31, 2022 and 2021:

	Par Value			Optional Redemption Price			Number of Shares Authorized	Number of Shares Outstanding
Cumulative, with no mandatory redemption		$	100		$	110	7,500,000	373,148

Consumers Energy Company

Debt Instrument [Line Items]

Financings and Capitalization

Financings and Capitalization

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

In Millions
	Interest Rate (%)		Maturity	2022			2021
CMS Energy, including Consumers
CMS Energy, parent only
Senior notes	3.875		2024		$	250		$	250
	3.600		2025		250			250
	3.000		2026		300			300
	2.950		2027		275			275
	3.450		2027		350			350
	4.700		2043		250			250
	4.875		2044		300			300
					$	1,975		$	1,975
Junior subordinated notes1	4.750	2	2050		500			500
	3.750	3	2050		400			400
	5.625		2078		200			200
	5.875		2078		280			280
	5.875		2079		630			630
					$	2,010		$	2,010
Total CMS Energy, parent only					$	3,985		$	3,985
Consumers					10,277			8,505
NorthStar Clean Energy, including subsidiaries
Term loan facility	variable		2025		—			78
Term loan facility	variable	4	2023		100			—
Total principal amount outstanding					$	14,362		$	12,568
Current amounts					(1,090)			(373)
Unamortized discounts					(30)			(31)
Unamortized issuance costs					(120)			(118)
Total long-term debt					$	13,122		$	12,046

1These unsecured obligations rank subordinate and junior in right of payment to all of CMS Energy’s existing and future senior indebtedness.

2On June 1, 2030, and every five years thereafter, the notes will reset to an interest rate equal to the five-year treasury rate plus 4.116 percent.

3On December 1, 2030, and every five years thereafter, the notes will reset to an interest rate equal to the five-year treasury rate plus 2.900 percent

4Funds borrowed under this facility have an interest rate of one-month Term SOFR plus a spread of one percent. At December 31, 2022, the interest rate for the loan issued under this facility was 5.423 percent.

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

In Millions
	Interest Rate (%)		Maturity		2022			2021
Consumers
First mortgage bonds
	0.350		2023			$	300		$	300
	3.375		2023			325			325
	3.125		2024			250			250
	3.190		2024			52			52
	3.680		2027			100			100
	3.390		2027			35			35
	3.800		2028			300			300
	3.600		2032			350			—
	3.180		2032			100			100
	5.800		2035			175			175
	3.520		2037			335			335
	4.010		2038			215			215
	6.170		2040			50			50
	4.970		2040			50			50
	4.310		2042			263			263
	3.950		2043			425			425
	4.100		2045			250			250
	3.250		2046			450			450
	3.950		2047			350			350
	4.050		2048			550			550
	4.350		2049			550			550
	3.750		2050			300			300
	3.100		2050			550			550
	3.500		2051			575			575
	2.650		2052			300			300
	4.200		2052			450			—
	3.860		2052			50			50
	4.280		2057			185			185
	2.500		2060			525			525
	4.350		2064			250			250
	variable	1	2069			76			76
	variable	1	2070			134			134
	variable	1	2070			127			127
						$	8,997		$	8,197
Tax-exempt revenue bonds	0.875	2	2035			35			35
	1.800	3	2049			75			75
						$	110		$	110
Securitization bonds	3.343	4	2025-2029	5		170			198
Term loan facility	variable	6	2024			1,000			—
Total principal amount outstanding						$	10,277		$	8,505
Current amounts						(991)			(365)
Unamortized discounts						(27)			(28)
Unamortized issuance costs						(67)			(62)
Total long-term debt						$	9,192		$	8,050

1The variable-rate bonds bear interest quarterly at a rate of three-month LIBOR minus 0.300 percent, subject to a zero-percent floor. At December 31, 2022, the interest rates were 4.469 percent for bonds due

September 2069, 4.375 percent for bonds due May 2070, and 3.484 percent for bonds due October 2070. The interest rate for all variable-rate bonds at December 31, 2021 was zero percent. The holders of these variable-rate bonds may put them to Consumers for redemption on certain dates prior to their stated maturity, including dates within one year of December 31, 2022.

2The interest rate on these tax-exempt revenue bonds will reset on October 8, 2026.

3The interest rate on these tax‑exempt revenue bonds will reset on October 1, 2024.

4The weighted-average interest rate for Consumers’ securitization bonds issued through its subsidiary, Consumers 2014 Securitization Funding, was 3.343 percent at December 31, 2022 and 3.290 percent at December 31, 2021.

5Principal and interest payments are made semiannually.

6Loans under this facility have an interest rate of one-month Term SOFR plus 0.650 percent. At December 31, 2022, the weighted-average interest rate for the loans issued under this facility was 4.975 percent at December 31, 2022.

Financings: Presented in the following table is a summary of major long-term debt issuances during 2022:

	Principal (In Millions)			Interest Rate		Issuance Date	Maturity Date
NorthStar Clean Energy, including subsidiaries
Term loan facility1		$	100	variable		December 2022	September 2023
Total NorthStar Clean Energy, including subsidiaries		$	100
Consumers
Term loan facility2		$	1,000	variable		July 2022	January 2024
First mortgage bonds		350		3.600	%	August 2022	August 2032
First mortgage bonds		450		4.200	%	August 2022	September 2052
Total Consumers		$	1,800
Total CMS Energy		$	1,900

1    In December 2022, a subsidiary of NorthStar Clean Energy entered into a $185 million unsecured term loan credit agreement. Under this credit agreement, $100 million of loans have been issued as of December 31, 2022. In January 2023, an additional $30 million was borrowed under the unsecured term loan credit agreement.

2    In July 2022, Consumers entered into a delayed-draw $1.0 billion unsecured term loan credit agreement. Under this credit agreement, Consumers issued loans of $550 million in September 2022 and $450 million in November 2022. In January 2023, Consumers repaid $500 million of the term loan credit agreement.

In January 2023, Consumers entered into a bond purchase agreement to issue an aggregate principal amount of $400 million of first mortgage bonds through a private placement offering. The bonds, which were priced in November 2022, carry a weighted average interest rate of 5.251 percent and mature at varying dates between 2026 and 2037. The bonds are expected to be issued in May 2023. The proceeds of the bonds will be used to finance a portion of the purchase price of the New Covert Generating Facility and for general corporate purposes.

Also in January 2023, Consumers issued $425 million of first mortgage bonds that mature in March 2028 and bear interest at a rate of 4.650 percent. The proceeds of the bonds have been used to repay a portion of the $1.0 billion aggregate principal amount outstanding under Consumers’ term loan credit agreement and for general corporate purposes.

Presented in the following table is a summary of major long-term debt retirements during 2022:

	Principal (In Millions)			Interest Rate	Retirement Date	Maturity Date
NorthStar Clean Energy, including subsidiaries
Term loan facility		$	76	variable	June 2022	October 2025

In June 2022, NorthStar Clean Energy sold a Class A membership interest in NWO Holdco to a tax equity investor for $49 million. Proceeds from the sale were used to retire the non-recourse debt held by a subsidiary of NorthStar Clean Energy. For more information, see Note 18, Variable Interest Entities.

First Mortgage Bonds: Consumers secures its first mortgage bonds by a mortgage and lien on substantially all of its property. Consumers’ ability to issue first mortgage bonds 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: Consumers is required to maintain FERC authorization for financings. Its current authorization expires on March 31, 2024. Any long-term issuances during the authorization period are exempt from FERC’s competitive bidding and negotiated placement requirements. In December 2022, Consumers filed an application for authority to issue securities between April 1, 2023 and March 31 2025. Securitization Bonds: Certain regulatory assets held by Consumers’ subsidiary, Consumers 2014 Securitization Funding, collateralize Consumers’ securitization bonds. The bondholders have no recourse to Consumers’ assets except for those held by the subsidiary that issued the bonds. Consumers collects securitization surcharges to cover the principal and interest on the bonds as well as certain other qualified costs. The surcharges collected are remitted to a trustee and are not available to creditors of Consumers or creditors of Consumers’ affiliates other than the subsidiary that issued the bonds.

Debt Maturities: At December 31, 2022, the aggregate annual maturities for long-term debt for the next five years, based on stated maturities or earlier put dates, were:

In Millions
	2023			2024			2025			2026			2027
CMS Energy, including Consumers
Long-term debt
CMS Energy, parent only		$	—		$	250		$	250		$	300		$	625
Consumers		991			1,332			31			32			168
NorthStar Clean Energy, including subsidiaries		100			—			—			—			—
Total CMS Energy1		$	1,091		$	1,582		$	281		$	332		$	793
Consumers
Long-term debt		$	991		$	1,332		$	31		$	32		$	168

1    This amount excludes debt issuance costs, related to the term loan agreement of a subsidiary of NorthStar Clean Energy, of less than $1 million

Credit Facilities: The following credit facilities with banks were available at December 31, 2022:

In Millions
Expiration Date	Amount of Facility			Amount Borrowed			Letters of Credit Outstanding			Amount Available
CMS Energy, parent only
December 14, 20271		$	550		$	—		$	18		$	532
September 22, 2024		50			—			50			—
NorthStar Clean Energy, including subsidiaries
September 25, 20252		$	37		$	—		$	37		$	—
Consumers3
December 14, 2027		$	1,100		$	—		$	29		$	1,071
November 18, 2024		250			—			27			223

1There were no borrowings under this facility during the year ended December 31, 2022.

2This letter of credit facility is available to Aviator Wind Equity Holdings. For more information regarding Aviator Wind Equity Holdings, see Note 18, Variable Interest Entities.

3Obligations under these facilities are secured by first mortgage bonds of Consumers. There were no borrowings under these facilities during the year ended December 31, 2022.

Short-term Borrowings: Under Consumers’ commercial paper program, Consumers may issue, in one or more placements, investment-grade commercial paper notes with maturities of up to 365 days at market interest rates. These issuances are supported by Consumers’ revolving credit facilities and may have an aggregate principal amount outstanding of up to $500 million. While the amount of outstanding commercial paper does not reduce the available capacity of the revolving credit facilities, Consumers does not intend to issue commercial paper in an amount exceeding the available capacity of the facilities. At December 31, 2022, there were $20 million of commercial paper notes outstanding under this program at an annual interest rate of 4.710 percent, recorded as current notes payable on the consolidated balance sheets of CMS Energy and Consumers.

In December 2022, Consumers renewed a short-term credit agreement with CMS Energy, permitting Consumers to borrow up to $500 million. At December 31, 2022, outstanding borrowings under the agreement were $75 million bearing the maximum interest rate authorized by FERC for this short-term credit agreement of 3.500 percent.

Dividend Restrictions: At December 31, 2022, payment of dividends by CMS Energy on its common stock was limited to $6.8 billion under provisions of the Michigan Business Corporation Act of 1972.

Under the provisions of its articles of incorporation, at December 31, 2022, Consumers had $1.9 billion of unrestricted retained earnings available to pay dividends on its common stock 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, dividends from Consumers on its common stock would not be limited to amounts in Consumers’ retained earnings. Any decision by Consumers to pay dividends on its common stock in excess of retained earnings would be based on specific facts and circumstances and would be subject to a formal regulatory filing process.

During the year ended December 31, 2022, Consumers paid $769 million in dividends on its common stock to CMS Energy.

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

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

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

Issuance of Common Stock: Under an existing equity offering program, CMS Energy may sell shares of its common stock having an aggregate sales price of up to $500 million in privately negotiated transactions, in “at the market” offerings, through forward sales transactions, or otherwise. In 2022, CMS Energy settled forward contracts under this program by issuing 962,354 shares of common stock at a weighted-average price of $57.36 per share, resulting in net proceeds of $55 million.

Presented in the following table are details of CMS Energy’s forward sales contracts under this program at December 31, 2022:

			Forward Price Per Share
Contract Date	Maturity Date	Number of Shares	Initial		December 31, 2022
August 3, 2022	February 1, 2024	2,944,207		67.59		67.83
August 24, 2022	February 26, 2024	1,677,938		69.46		69.69
August 29, 2022	February 26, 2024	1,783,388		68.18		68.38

These contracts allow CMS Energy to either physically settle the contracts by issuing shares of its common stock at the then-applicable forward sale price specified by the agreement or net settle the contracts through the delivery or receipt of cash or shares. CMS Energy may settle the contracts at any time through their maturity dates, and presently intends to physically settle the contracts by delivering shares of its common stock.

The initial forward price in the forward equity sale contracts includes a deduction for commissions and will be adjusted on a daily basis over the term based on an interest rate factor and decreased on certain dates by certain predetermined amounts to reflect expected dividend payments. No amounts are recorded on CMS Energy’s consolidated balance sheets until settlements of the forward equity sale contracts occur.

If CMS Energy had elected to net share settle or net cash settle the contracts as of December 31, 2022, CMS Energy would not have been required to deliver shares or pay cash.

Preferred Stock: CMS Energy’s Series C preferred stock is traded on the New York Stock Exchange under the symbol CMS PRC. Depositary shares represent a 1/1000th interest in a share of its Series C preferred stock. The Series C preferred stock has no maturity or mandatory redemption date and is not redeemable at the option of the holders. CMS Energy may, at its option, redeem the Series C preferred stock, in whole or in part, at any time on or after July 15, 2026. The Series C preferred stock ranks senior to CMS Energy’s common stock with respect to dividend rights and distribution rights upon liquidation. Presented in the following table are details of CMS Energy’s Series C preferred stock at December 31, 2022 and 2021:

	Depositary Share Par Value			Depositary Share Optional Redemption Price			Number of Depositary Shares Authorized	Number of Depositary Shares Outstanding
Cumulative, redeemable perpetual		$	25		$	25	9,200,000	9,200,000

Preferred Stock of Subsidiary: Consumers’ preferred stock is traded on the New York Stock Exchange under the symbol CMS-PB. Presented in the following table are details of Consumers’ preferred stock at December 31, 2022 and 2021:

	Par Value			Optional Redemption Price			Number of Shares Authorized	Number of Shares Outstanding
Cumulative, with no mandatory redemption		$	100		$	110	7,500,000	373,148