Item 8. Financial Statements and Supplementary Data

Index to Financial Statements

CMS Energy Consolidated Financial Statements						94
Consolidated Statements of Income						94
Consolidated Statements of Comprehensive Income						95
Consolidated Statements of Cash Flows						96
Consolidated Balance Sheets						98
Consolidated Statements of Changes in Equity						100
Consumers Consolidated Financial Statements						101
Consolidated Statements of Income						101
Consolidated Statements of Comprehensive Income						102
Consolidated Statements of Cash Flows						104
Consolidated Balance Sheets						106
Consolidated Statements of Changes in Equity						108
Notes to the Consolidated Financial Statements						109
1:			Significant Accounting Policies			109
2:			New Accounting Standards			111
3:			Regulatory Matters			112
4:			Contingencies and Commitments			119
5:			Financings and Capitalization			125
6:			Fair Value Measurements			134
7:			Financial Instruments			136
8:			Plant, Property, and Equipment			138
9:			Leases			142
10:			Asset Retirement Obligations			146
11:			Retirement Benefits			148
12:			Stock-based Compensation			159
13:			Income Taxes			162
14:			Earnings Per Share—CMS Energy			168
15:			Revenue			170
16:			Other Income and Other Expense			174
17:			Reportable Segments			175
18:			Related-party Transactions—Consumers			182
19:			Variable Interest Entities			183
20:			Exit Activities and Asset Sales			186
Reports of Independent Registered Public Accounting Firm (PCAOB ID 238)						188
CMS Energy						188
Consumers						192

CMS Energy Corporation

Consolidated Statements of Income

In Millions, Except Per Share Amounts
Years Ended December 31												2025						2024						2023
Operating Revenue																					$	8,539					$	7,515					$	7,462
Operating Expenses
Fuel for electric generation																					657						624						561
Purchased and interchange power																					1,706						1,333						1,375
Purchased power – related parties																					94						71						75
Cost of gas sold																					809						640						902
Maintenance and other operating expenses																					1,727						1,638						1,687
Depreciation and amortization																					1,306						1,240						1,180
General taxes																					513						482						447
Total operating expenses																					6,812						6,028						6,227
Operating Income																					1,727						1,487						1,235
Other Income (Expense)
Non-operating retirement benefits, net																					186						169						180
Other income																					151						207						195
Other expense																					(27)						(32)						(13)
Total other income																					310						344						362
Interest Charges
Interest on long-term debt																					798						700						616
Interest expense – related parties																					11						12						12
Other interest expense																					(9)						14						18
Allowance for borrowed funds used during construction																					(11)						(18)						(3)
Total interest charges																					789						708						643
Income Before Income Taxes																					1,248						1,123						954
Income Tax Expense																					246						176						147
Income From Continuing Operations																					1,002						947						807
Income From Discontinued Operations, Net of Tax of $— for all periods																					—						—						1
Net Income																					1,002						947						808
Loss Attributable to Noncontrolling Interests																					(69)						(56)						(79)
Net Income Attributable to CMS Energy																					1,071						1,003						887
Preferred Stock Dividends																					10						10						10
Net Income Available to Common Stockholders																					$	1,061					$	993					$	877
Basic Earnings Per Average Common Share																					$	3.53					$	3.34					$	3.01
Diluted Earnings Per Average Common Share																					$	3.53					$	3.33					$	3.01

The accompanying notes are an integral part of these statements.

CMS Energy Corporation

Consolidated Statements of Comprehensive Income

In Millions
Years Ended December 31												2025						2024						2023
Net Income																					$	1,002					$	947					$	808
Retirement Benefits Liability
Net gain arising during the period, net of tax of $2, $1, and $2																					4						2						5
Prior service credit adjustment, net of tax of $— for all periods																					—						1						—
Amortization of net actuarial loss, net of tax of $— for all periods																					2						2						2
Amortization of prior service credit, net of tax of $— for all periods																					(1)						—						(1)
Other Comprehensive Income																					5						5						6
Comprehensive Income																					1,007						952						814
Comprehensive Loss Attributable to Noncontrolling Interests																					(69)						(56)						(79)
Comprehensive Income Attributable to CMS Energy																					$	1,076					$	1,008					$	893

The accompanying notes are an integral part of these statements.

CMS Energy Corporation

Consolidated Statements of Cash Flows

In Millions
Years Ended December 31			2025						2024						2023
Cash Flows from Operating Activities
Net income						$	1,002					$	947					$	808
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization						1,306						1,240						1,180
Deferred income taxes and investment tax credits						202						142						157
Bad debt expense						40						33						34
Postretirement benefits contributions						(16)						(13)						(12)
Other non‑cash operating activities and reconciling adjustments						(238)						(241)						(274)
Changes in assets and liabilities
Accounts receivable and accrued revenue						(251)						(155)						241
Inventories						(28)						164						185
Accounts payable and accrued rate refunds						196						15						(136)
Other current assets and liabilities						78						42						(21)
Other non‑current assets and liabilities						(56)						196						147
Net cash provided by operating activities						2,235						2,370						2,309
Cash Flows from Investing Activities
Capital expenditures (excludes assets placed under finance lease)						(3,824)						(3,018)						(2,407)
Covert Generating Station acquisition						—						—						(812)
Proceeds from sale of ASP business						—						124						—
Cost to retire property and other investing activities						(214)						(160)						(167)
Net cash used in investing activities						(4,038)						(3,054)						(3,386)
Cash Flows from Financing Activities
Proceeds from issuance of debt						3,609						1,962						3,551
Retirement of debt						(1,150)						(952)						(2,132)
Increase (decrease) in notes payable						(65)						(28)						73
Issuance of common stock						525						286						192
Payment of dividends on common and preferred stock						(663)						(626)						(579)
Proceeds from the sale of membership interests in VIEs						44						—						—
Proceeds from the sale of membership interest in VIE to tax equity investor						15						—						86
Contributions from noncontrolling interests						4						5						6
Distributions to noncontrolling interests						(14)						(12)						(12)
Other financing costs						(65)						(21)						(42)
Net cash provided by financing activities						2,240						614						1,143
Net Increase (Decrease) in Cash and Cash Equivalents, Including Restricted Amounts						437						(70)						66
Cash and Cash Equivalents, Including Restricted Amounts, Beginning of Period						178						248						182
Cash and Cash Equivalents, Including Restricted Amounts, End of Period						$	615					$	178					$	248

In Millions
Years Ended December 31			2025						2024						2023
Other Cash Flow Activities and Non‑cash Investing and Financing Activities
Cash transactions
Interest paid (net of amounts capitalized)						$	741					$	677					$	607
Income taxes paid (proceeds from sale of renewable energy tax credits), net						(20)						(69)						15
Non‑cash transactions
Capital expenditures not paid						$	662					$	517					$	265
Deemed contribution from sale of membership interest						35						—						—

The accompanying notes are an integral part of these statements.

CMS Energy Corporation

Consolidated Balance Sheets

ASSETS
In Millions
December 31			2025						2024
Current Assets
Cash and cash equivalents						$	509					$	103
Restricted cash and cash equivalents						106						75
Accounts receivable and accrued revenue, less allowance of $27 in 2025 and $23 in 2024						1,306						1,049
Accounts receivable – related parties						17						14
Inventories at average cost
Gas in underground storage						427						435
Materials and supplies						329						299
Generating plant fuel stock						35						35
Deferred property taxes						479						448
Regulatory assets						104						229
Prepayments and other current assets						160						103
Total current assets						3,472						2,790
Plant, Property, and Equipment
Plant, property, and equipment, gross						37,763						34,932
Less accumulated depreciation and amortization						10,135						9,569
Plant, property, and equipment, net						27,628						25,363
Construction work in progress						3,052						2,098
Total plant, property, and equipment						30,680						27,461
Other Non‑current Assets
Regulatory assets						3,355						3,569
Accounts receivable						18						20
Investments						61						69
Postretirement benefits						1,957						1,627
Other						398						384
Total other non‑current assets						5,789						5,669
Total Assets						$	39,941					$	35,920

LIABILITIES AND EQUITY
In Millions
December 31			2025						2024
Current Liabilities
Current portion of long-term debt and finance leases						$	956					$	1,195
Notes payable						—						65
Accounts payable						1,395						1,085
Accounts payable – related parties						9						8
Accrued rate refunds						28						38
Accrued interest						182						156
Accrued taxes						708						654
Regulatory liabilities						85						111
Other current liabilities						185						209
Total current liabilities						3,548						3,521
Non‑current Liabilities
Long-term debt						17,807						15,194
Non-current portion of finance leases						135						112
Regulatory liabilities						4,091						4,067
Postretirement benefits						95						96
AROs						792						728
Deferred investment tax credit						118						122
Deferred income taxes						3,252						2,925
Other non‑current liabilities						392						407
Total non‑current liabilities						26,682						23,651
Commitments and Contingencies (Notes 3 and 4)
Equity
Common stockholders’ equity
Common stock, authorized 350.0 shares in both periods; outstanding 306.4 shares in 2025 and 298.8 shares in 2024						3						3
Other paid-in capital						6,510						6,009
Accumulated other comprehensive loss						(36)						(41)
Retained earnings						2,443						2,035
Total common stockholders’ equity						8,920						8,006
Cumulative redeemable perpetual preferred stock, Series C, authorized 9.2 depositary shares; outstanding 9.2 depositary shares in both periods						224						224
Total stockholders’ equity						9,144						8,230
Noncontrolling interests						567						518
Total equity						9,711						8,748
Total Liabilities and Equity						$	39,941					$	35,920

The accompanying notes are an integral part of these statements.

CMS Energy Corporation

Consolidated Statements of Changes in Equity

In Millions, Except Number of Shares in Thousands and Per Share Amounts
			Number of Shares
Years Ended December 31			2025			2024			2023												2025						2024						2023
Total Equity at Beginning of Period																														$	8,748					$	8,125					$	7,595
Common Stock
At beginning and end of period																														3						3						3
Other Paid-in Capital
At beginning of period			298,790			294,440			291,268																					6,009						5,705						5,490
Common stock issued			7,839			4,673			3,355																					548						315						222
Common stock repurchased			(181)			(181)			(119)																					(13)						(11)						(7)
Common stock reacquired			(39)			(142)			(64)																					—						—						—
Adjustment for sale of membership interests in VIEs																														(34)						—						—
At end of period			306,409			298,790			294,440																					6,510						6,009						5,705
Accumulated Other Comprehensive Loss
Retirement benefits liability
At beginning of period																														(41)						(46)						(52)
Net gain arising during the period																														4						2						5
Prior service credit adjustment																														—						1						—
Amortization of net actuarial loss																														2						2						2
Amortization of prior service credit																														(1)						—						(1)
At end of period																														(36)						(41)						(46)
Retained Earnings
At beginning of period																														2,035						1,658						1,350
Net income attributable to CMS Energy																														1,071						1,003						887
Dividends declared on common stock																														(653)						(616)						(569)
Dividends declared on preferred stock																														(10)						(10)						(10)
At end of period																														2,443						2,035						1,658
Cumulative Redeemable Perpetual Preferred Stock, Series C
At beginning and end of period																														224						224						224
Noncontrolling Interests
At beginning of period																														518						581						580
Sale of membership interests in VIEs																														78						—						—
Sale of membership interest in VIE to tax equity investor																														50						—						86
Contributions from noncontrolling interests																														4						5						6
Distributions to noncontrolling interests																														(14)						(12)						(12)
Loss attributable to noncontrolling interests																														(69)						(56)						(79)
At end of period																														567						518						581
Total Equity at End of Period																														$	9,711					$	8,748					$	8,125
Dividends declared per common share																														$	2.170					$	2.060					$	1.950
Dividends declared per preferred stock Series C depositary share																														$	1.050					$	1.050					$	1.050

The accompanying notes are an integral part of these statements.

Consumers Energy Company

Consolidated Statements of Income

In Millions
Years Ended December 31												2025						2024						2023
Operating Revenue																					$	8,132					$	7,200					$	7,166
Operating Expenses
Fuel for electric generation																					535						511						435
Purchased and interchange power																					1,564						1,285						1,331
Purchased power – related parties																					94						71						75
Cost of gas sold																					803						637						897
Maintenance and other operating expenses																					1,614						1,520						1,586
Depreciation and amortization																					1,254						1,191						1,137
General taxes																					499						470						437
Total operating expenses																					6,363						5,685						5,898
Operating Income																					1,769						1,515						1,268
Other Income (Expense)
Non-operating retirement benefits, net																					175						157						171
Other income																					55						85						49
Other expense																					(22)						(30)						(12)
Total other income																					208						212						208
Interest Charges
Interest on long-term debt																					521						488						415
Interest expense – related parties																					41						31						20
Other interest expense																					8						12						16
Allowance for borrowed funds used during construction																					(10)						(13)						(3)
Total interest charges																					560						518						448
Income Before Income Taxes																					1,417						1,209						1,028
Income Tax Expense																					288						200						161
Net Income																					1,129						1,009						867
Preferred Stock Dividends																					2						2						2
Net Income Available to Common Stockholder																					$	1,127					$	1,007					$	865

The accompanying notes are an integral part of these statements.

Consumers Energy Company

Consolidated Statements of Comprehensive Income

In Millions
Years Ended December 31												2025						2024						2023
Net Income																					$	1,129					$	1,009					$	867
Retirement Benefits Liability
Net gain (loss) arising during the period, net of tax of $(1), $1, and $—																					(2)						3						(1)
Amortization of net actuarial loss, net of tax of $— for all periods																					—						1						1
Other Comprehensive Income (Loss)																					(2)						4						—
Comprehensive Income																					$	1,127					$	1,013					$	867

The accompanying notes are an integral part of these statements.

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Consumers Energy Company

Consolidated Statements of Cash Flows

In Millions
Years Ended December 31			2025						2024						2023
Cash Flows from Operating Activities
Net income						$	1,129					$	1,009					$	867
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization						1,254						1,191						1,137
Deferred income taxes and investment tax credits						48						115						156
Bad debt expense						40						33						34
Postretirement benefits contributions						(10)						(9)						(9)
Other non‑cash operating activities and reconciling adjustments						(165)						(137)						(123)
Changes in assets and liabilities
Accounts and notes receivable and accrued revenue						(235)						(153)						219
Inventories						(24)						164						186
Accounts payable and accrued rate refunds						187						19						(127)
Other current assets and liabilities						104						75						(35)
Other non-current assets and liabilities						(90)						139						125
Net cash provided by operating activities						2,238						2,446						2,430
Cash Flows from Investing Activities
Capital expenditures (excludes assets placed under finance lease)						(3,314)						(2,842)						(2,248)
Covert Generating Station acquisition						—						—						(812)
Proceeds from sale of ASP business						—						124						—
Cost to retire property and other investing activities						(221)						(154)						(141)
Net cash used in investing activities						(3,535)						(2,872)						(3,201)
Cash Flows from Financing Activities
Proceeds from issuance of debt						1,123						1,297						2,666
Retirement of debt						(115)						(389)						(1,654)
Increase (decrease) in notes payable						(65)						(28)						73
Increase (decrease) in notes payable – related parties						340						—						(75)
Stockholder contribution						920						735						475
Return of stockholder contribution						—						(320)						—
Payment of dividends on common and preferred stock						(900)						(797)						(697)
Other financing costs						(14)						(9)						(21)
Net cash provided by financing activities						1,289						489						767
Net Increase (Decrease) in Cash and Cash Equivalents, Including Restricted Amounts						(8)						63						(4)
Cash and Cash Equivalents, Including Restricted Amounts, Beginning of Period						119						56						60
Cash and Cash Equivalents, Including Restricted Amounts, End of Period						$	111					$	119					$	56

In Millions
Years Ended December 31			2025						2024						2023
Other Cash Flow Activities and Non‑cash Investing and Financing Activities
Cash transactions
Interest paid (net of amounts capitalized)						$	526					$	484					$	417
Income taxes paid (proceeds from sale of renewable energy tax credits), net						161						(19)						31
Non‑cash transactions
Capital expenditures not paid						$	533					$	395					$	264

The accompanying notes are an integral part of these statements.

Consumers Energy Company

Consolidated Balance Sheets

ASSETS
In Millions
December 31			2025						2024
Current Assets
Cash and cash equivalents						$	25					$	44
Restricted cash and cash equivalents						86						75
Accounts receivable and accrued revenue, less allowance of $27 in 2025 and $23 in 2024						1,210						1,019
Accounts and notes receivable – related parties						15						17
Inventories at average cost
Gas in underground storage						427						435
Materials and supplies						316						291
Generating plant fuel stock						31						30
Deferred property taxes						479						448
Regulatory assets						104						229
Prepayments and other current assets						132						86
Total current assets						2,825						2,674
Plant, Property, and Equipment
Plant, property, and equipment, gross						36,120						33,434
Less accumulated depreciation and amortization						9,842						9,310
Plant, property, and equipment, net						26,278						24,124
Construction work in progress						2,354						1,766
Total plant, property, and equipment						28,632						25,890
Other Non-current Assets
Regulatory assets						3,355						3,569
Accounts receivable						24						26
Accounts and notes receivable – related parties						88						92
Postretirement benefits						1,821						1,514
Other						346						323
Total other non-current assets						5,634						5,524
Total Assets						$	37,091					$	34,088

LIABILITIES AND EQUITY
In Millions
December 31			2025						2024
Current Liabilities
Current portion of long-term debt and finance leases						$	579					$	456
Notes payable						—						65
Notes payable – related parties						340						—
Accounts payable						1,229						917
Accounts payable – related parties						14						12
Accrued rate refunds						28						38
Accrued interest						149						130
Accrued taxes						747						678
Regulatory liabilities						85						111
Other current liabilities						163						185
Total current liabilities						3,334						2,592
Non-current Liabilities
Long-term debt						11,524						10,818
Long-term debt – related parties						1,005						823
Non-current portion of finance leases						81						69
Regulatory liabilities						4,091						4,067
Postretirement benefits						70						70
AROs						753						694
Deferred investment tax credit						118						122
Deferred income taxes						3,201						3,053
Other non-current liabilities						336						349
Total non-current liabilities						21,179						20,065
Commitments and Contingencies (Notes 3 and 4)
Equity
Common stockholder’s equity
Common stock, authorized 125.0 shares; outstanding 84.1 shares in both periods						841						841
Other paid-in capital						9,094						8,174
Accumulated other comprehensive loss						(13)						(11)
Retained earnings						2,619						2,390
Total common stockholder’s equity						12,541						11,394
Cumulative preferred stock, $4.50 series, authorized 7.5 shares; outstanding 0.4 shares in both periods						37						37
Total equity						12,578						11,431
Total Liabilities and Equity						$	37,091					$	34,088

The accompanying notes are an integral part of these statements.

Consumers Energy Company

Consolidated Statements of Changes in Equity

In Millions
Years Ended December 31												2025						2024						2023
Total Equity at Beginning of Period																					$	11,431					$	10,800					$	10,155
Common Stock
At beginning and end of period																					841						841						841
Other Paid-in Capital
At beginning of period																					8,174						7,759						7,284
Stockholder contribution																					920						735						475
Return of stockholder contribution																					—						(320)						—
At end of period																					9,094						8,174						7,759
Accumulated Other Comprehensive Loss
Retirement benefits liability
At beginning of period																					(11)						(15)						(15)
Net gain (loss) arising during the period																					(2)						3						(1)
Amortization of net actuarial loss																					—						1						1
At end of period																					(13)						(11)						(15)
Retained Earnings
At beginning of period																					2,390						2,178						2,008
Net income																					1,129						1,009						867
Dividends declared on common stock																					(898)						(795)						(695)
Dividends declared on preferred stock																					(2)						(2)						(2)
At end of period																					2,619						2,390						2,178
Cumulative Preferred Stock
At beginning and end of period																					37						37						37
Total Equity at End of Period																					$	12,578					$	11,431					$	10,800

The accompanying notes are an integral part of these statements.

CMS Energy Corporation

Consumers Energy Company

Notes to the Consolidated Financial Statements

1: Significant Accounting Policies

Principles of Consolidation: CMS Energy and Consumers prepare their consolidated financial statements in conformity with GAAP. CMS Energy’s consolidated financial statements comprise CMS Energy, Consumers, NorthStar Clean Energy, and all other entities in which CMS Energy has a controlling financial interest or is the primary beneficiary. Consumers’ consolidated financial statements comprise Consumers and all other entities in which it has a controlling financial interest. CMS Energy uses the equity method of accounting for investments in companies and partnerships that are not consolidated, where they have significant influence over operations and financial policies but are not the primary beneficiary. CMS Energy and Consumers eliminate intercompany transactions and balances.

Use of Estimates: CMS Energy and Consumers are required to make estimates using assumptions that may affect reported amounts and disclosures. Actual results could differ from those estimates.

Cash and Cash Equivalents and Restricted Cash and Cash Equivalents: Cash and cash equivalents include short-term, highly liquid investments with original maturities of three months or less. Restricted cash and cash equivalents are held primarily for the repayment of securitization bonds and funds held in escrow. These amounts are classified as current assets since they relate to payments that could or will occur within one year.

Contingencies: CMS Energy and Consumers record estimated loss contingencies on their consolidated financial statements when it is probable that a loss has been incurred and when the amount of loss can be reasonably estimated. For environmental remediation projects in which the timing of estimated expenditures is considered reliably determinable, CMS Energy and Consumers record the liability at its net present value, using a discount rate equal to the interest rate on monetary assets that are essentially risk-free and have maturities comparable to that of the environmental liability. Unless regulatory accounting applies, CMS Energy and Consumers expense legal fees as incurred; fees incurred but not yet billed are accrued based on estimates of work performed.

Debt Issuance Costs, Discounts, Premiums, and Refinancing Costs: Upon the issuance of long-term debt, CMS Energy and Consumers defer issuance costs, discounts, and premiums and amortize those amounts over the terms of the associated debt. Debt issuance costs are presented as a direct deduction from the carrying amount of long-term debt on the balance sheet. Upon the refinancing of long-term debt, Consumers, as a regulated entity, defers any remaining unamortized issuance costs, discounts, and premiums associated with the refinanced debt and amortizes those amounts over the term of the newly issued debt. For the non‑regulated portions of CMS Energy’s business, any remaining unamortized issuance costs, discounts, and premiums associated with extinguished debt are charged to earnings.

Derivative Instruments: In order to support ongoing operations, CMS Energy and Consumers may enter into contracts for the future purchase and sale of various commodities, such as electricity, natural gas, and coal. These forward contracts are generally long-term in nature and result in physical delivery of the

commodity at a contracted price. Most of these contracts are not subject to derivative accounting for one or more of the following reasons:

• they do not have a notional amount (that is, a number of units specified in a derivative instrument, such as MWh of electricity or Bcf of natural gas)

• they qualify for the normal purchases and sales exception

• they cannot be net settled due in part to the absence of an active market for the commodity

Consumers also uses FTRs to manage price risk related to electricity transmission congestion. An FTR is a financial instrument that entitles its holder to receive compensation or requires its holder to remit payment for congestion-related transmission charges. Consumers accounts for FTRs as derivatives and changes in the fair value of FTRs are deferred as regulatory assets or liabilities. For details regarding CMS Energy’s and Consumers’ derivative instruments recorded at fair value, see Note 6, Fair Value Measurements.

Electricity Market Transactions: Wholesale electricity market operators require the submission of hourly day-ahead and real-time bids and offers for energy at locations across each region. CMS Energy and Consumers account for such transactions on a net hourly basis in each of the real-time and day-ahead markets, netted across all locations in the energy market. CMS Energy and Consumers record net hourly purchases in purchased and interchange power and net hourly sales in operating revenue on their consolidated statements of income. They record net billing adjustments upon receipt of settlement statements, record accruals for future net purchases and sales adjustments based on historical experience, and reconcile accruals to actual expenses and sales upon receipt of settlement statements.

EPS: CMS Energy calculates basic and diluted EPS using the weighted-average number of shares of common stock and dilutive potential common stock outstanding during the period. Potential common stock, for purposes of determining diluted EPS, includes the effects of nonvested stock awards, forward equity sales, and convertible securities. CMS Energy computes the effect on potential common stock using the treasury stock method. Potentially dilutive common shares issuable upon conversion of the convertible senior notes are determined using the if-converted method for calculating diluted EPS. Diluted EPS excludes the impact of antidilutive securities, which are those securities resulting in an increase in EPS or a decrease in loss per share. For EPS computations, see Note 14, Earnings Per Share—CMS Energy.

Impairment of Long-lived Assets and Equity Method Investments: CMS Energy and Consumers perform tests of impairment if certain triggering events occur that indicate the carrying amount of an asset may not be recoverable or that there has been a decline in value that may be other than temporary.

CMS Energy and Consumers evaluate long-lived assets held in use for impairment by calculating the undiscounted future cash flows expected to result from the use of the asset and its eventual disposition. If the undiscounted future cash flows are less than the carrying amount, CMS Energy and Consumers recognize an impairment loss equal to the amount by which the carrying amount exceeds the fair value. CMS Energy and Consumers estimate the fair value of the asset using quoted market prices, market prices of similar assets, or discounted future cash flow analyses.

CMS Energy also assesses equity method investments for impairment whenever there has been a decline in value that is other than temporary. This assessment requires CMS Energy to determine the fair value of the equity method investment. CMS Energy determines fair value using valuation methodologies, including discounted cash flows, and assesses the ability of the investee to sustain an earnings capacity that justifies the carrying amount of the investment. CMS Energy records an impairment if the fair value is less than the carrying amount and the decline in value is considered to be other than temporary.

Investment Tax Credits: CMS Energy and its subsidiaries use the flow-through method of accounting for investment tax credits. Under the flow-through method, the credit is recognized as a reduction to income tax expense when the related plant, property, and equipment is placed into service. For its regulated utility assets, Consumers amortizes its investment tax credits over the life of the related property in accordance with regulatory treatment.

Inventory: CMS Energy and Consumers use the weighted-average cost method for valuing working gas, recoverable base gas in underground storage facilities, and materials and supplies inventory. CMS Energy and Consumers also use this method for valuing coal inventory, and they classify these amounts as generating plant fuel stock on their consolidated balance sheets.

CMS Energy and Consumers account for RECs and other environmental credits as inventory and use the weighted-average cost method to remove amounts from inventory. RECs and other environmental credits are used to satisfy compliance obligations related to the generation of power and in support of sustainability commitments. CMS Energy and Consumers classify these amounts within other assets on their consolidated balance sheets.

CMS Energy and Consumers evaluate inventory for impairment as required to ensure that its carrying value does not exceed the lower of cost or net realizable value.

Property Taxes: Property taxes are based on the taxable value of CMS Energy’s and Consumers’ real and personal property assessed by local taxing authorities. CMS Energy and Consumers record property tax expense over the fiscal year of the taxing authority for which the taxes are levied. The deferred property tax balance represents the amount of CMS Energy’s and Consumers’ accrued property tax that will be recognized over future governmental fiscal periods.

Other: For additional accounting policies, see:

• Note 3, Regulatory Matters

• Note 8, Plant, Property, and Equipment

• Note 9, Leases

• Note 10, Asset Retirement Obligations

• Note 11, Retirement Benefits

• Note 12, Stock-based Compensation

• Note 13, Income Taxes

• Note 14, Earnings Per Share—CMS Energy

• Note 15, Revenue

• Note 19, Variable Interest Entities

2: New Accounting Standards

Implementation of New Accounting Standards

ASU 2023‑09, Incomes Taxes (Topic 740): Improvements to Income Tax Disclosures: This standard, which was effective on January 1, 2025 for CMS Energy and Consumers, requires expanded annual disclosures of the income taxes, including a more detailed reconciliation of the effective tax rate and disaggregated information on federal and state income taxes. The standard also requires disclosure of significant reconciling items and qualitative information about state and local jurisdictions contributing to income tax expense. The adoption of the new standard did not impact CMS Energy’s or Consumers’ liquidity, financial condition, or results of operations. The expanded disclosures required by this standard are included in Note 13, Income Taxes.

New Accounting Standards Not Yet Effective

ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses: This standard requires public companies to provide disaggregated information about certain expense categories presented on the income statement. The guidance calls for annual and interim disclosures that separate specified components, such as employee compensation, depreciation, and amortization, within relevant expense line items in the notes to the financial statements. The standard is effective for annual reporting periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with early adoption permitted. CMS Energy and Consumers will adopt the guidance upon the effective date. The standard will not have an impact on CMS Energy’s or Consumers’ consolidated net income, cash flows, or financial position.

ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software: This standard updates guidance for capitalizing costs related to internal-use software development. The amendments remove references to the previous “project stage” model and clarify the threshold for when capitalization should begin, focusing on whether completion of the project is probable. The amendments are effective for annual and interim reporting periods beginning after December 15, 2027. The guidance may be applied on a prospective, retrospective, or modified transition basis. Early adoption is permitted. CMS Energy and Consumers are currently evaluating the new standard.

3: Regulatory Matters

Regulatory matters are critical to Consumers. The Michigan Attorney General, ABATE, the MPSC Staff, residential customer advocacy groups, environmental organizations, and certain other parties typically participate in MPSC proceedings concerning Consumers, such as Consumers’ rate cases and PSCR and GCR processes. Intervenors also participate in certain FERC matters, including FERC’s regulation of certain wholesale rates that affect Consumers’ power supply costs. These parties often challenge various aspects of those proceedings, including the prudence of Consumers’ policies and practices, and seek cost disallowances and other relief. The parties also have appealed significant MPSC and FERC orders. Depending upon the specific issues, the outcomes of rate cases and proceedings, including judicial proceedings challenging MPSC and FERC orders or other actions, could negatively affect CMS Energy’s and Consumers’ liquidity, financial condition, and results of operations. Consumers cannot predict the outcome of these proceedings.

Regulatory Assets and Liabilities

Consumers is subject to the actions of the MPSC and FERC and therefore prepares its consolidated financial statements in accordance with the provisions of regulatory accounting. A utility must apply regulatory accounting when its rates are designed to recover specific costs of providing regulated services. Under regulatory accounting, Consumers records regulatory assets or liabilities for certain transactions that would have been treated as expense or revenue by non‑regulated businesses.

Presented in the following table are the regulatory assets and liabilities on Consumers’ consolidated balance sheets:

In Millions
December 31			2025						2024
Regulatory assets
Current
Energy waste reduction plan incentive1						$	66					$	60
Retention incentive program2						10						18
2022 PSCR underrecovery3						—						126
Other						28						25
Total current regulatory assets						$	104					$	229
Non-current
Costs of coal-fueled electric generating units to be retired3						$	1,179					$	1,266
Postretirement benefits2						589						747
Securitized costs3						549						666
ARO4						379						366
Decommissioning costs2						197						158
Unamortized loss on reacquired debt3						89						92
MGP sites3						82						90
Energy waste reduction plan incentive1						64						64
Ludington overhaul contract dispute2						60						31
Service restoration cost deferral4						52						—
Energy waste reduction plan3						26						31
Postretirement benefits expense deferral mechanism2						22						21
Renewable Energy Plan3						7						—
Retention incentive program2						6						12
Other						54						25
Total non-current regulatory assets						$	3,355					$	3,569
Total regulatory assets						$	3,459					$	3,798
Regulatory liabilities
Current
Income taxes, net						$	47					$	53
ASP gain						28						47
Other						10						11
Total current regulatory liabilities						$	85					$	111
Non-current
Cost of removal						$	2,727					$	2,665
Income taxes, net						1,118						1,163
Energy waste reduction plan						68						41
Green giving program						41						—
Postretirement benefits expense deferral mechanism						40						37
Renewable energy grant						38						40
ASP gain						19						46
Renewable Energy Plan						—						51
Other						40						24
Total non-current regulatory liabilities						$	4,091					$	4,067
Total regulatory liabilities						$	4,176					$	4,178

1These regulatory assets have arisen from an alternative-revenue program and are not associated with incurred costs or capital investments. Therefore, the MPSC has provided for recovery without a return.

2This regulatory asset is included in rate base, thereby providing a return.

3The MPSC has provided a specific return on these regulatory assets.

4These regulatory assets represent incurred costs for which the MPSC has provided recovery without a return on investment.

Regulatory Assets

Energy Waste Reduction Plan Incentive: The energy waste reduction incentive mechanism provides a financial incentive if the energy savings of Consumers’ customers exceed annual targets established by the MPSC. Consumers accounts for this program as an alternative-revenue program that meets the criteria for recognizing revenue related to the incentive as soon as energy savings exceed the annual targets established by the MPSC.

In January 2026, the MPSC approved a settlement agreement authorizing Consumers to collect $64 million during 2026 as an incentive for exceeding its statutory savings targets in 2024. Consumers recognized incentive revenue under this program of $64 million in 2024.

Consumers also exceeded its statutory savings targets in 2025, achieved certain other goals, and will request the MPSC’s approval to collect $64 million in the energy waste reduction reconciliation to be filed in May 2026. Consumers recognized incentive revenue under this program of $64 million in 2025.

Retention Incentive Program: To ensure necessary staffing at the D.E. Karn and J.H. Campbell coal‑fueled generating units through their retirement, Consumers established retention incentive programs. The MPSC has approved deferred accounting treatment for the retention and severance costs incurred under these programs and has allowed for recovery over three years. These MPSC-approved retention plans concluded in November 2025. For additional details regarding retention incentive programs, see Note 20, Exit Activities and Asset Sales.

2022 PSCR Underrecovery: As a result of rising fuel prices during 2022, Consumers’ power supply costs for 2022 were significantly higher than those projected in its 2022 PSCR plan. At the end of 2022, Consumers had recorded $401 million of under-recovered power supply costs. In 2023, the MPSC authorized Consumers to recover the 2022 underrecovery amount over three years, providing immediate relief to electric customers.

Costs of Coal-fueled Electric Generating Units to be Retired: In 2022, the MPSC approved Consumers’ plans to retire the J.H. Campbell coal-fueled generating units in 2025. The MPSC authorized regulatory asset treatment for Consumers to recover the remaining book value of the units upon their retirement, as well as a 9.0‑percent return on equity, through 2040, the units’ original retirement date. Accordingly, in 2022, Consumers removed from total plant, property, and equipment an amount of $1.3 billion, representing the projected remaining book value of the electric generating units upon their retirement, and recorded it as a non‑current regulatory asset on its consolidated balance sheets.

As discussed further below, the retirement of J.H. Campbell is subject to temporary extensions under emergency orders issued by the U.S. Secretary of Energy. Such orders authorize Consumers to obtain cost recovery at FERC; thus, Consumers has deferred the costs of complying with these orders as a regulatory asset.

Postretirement Benefits: As part of the ratemaking process, the MPSC allows Consumers to recover the costs of postretirement benefits. Accordingly, Consumers defers the net impact of actuarial losses and gains, prior service costs and credits, and settlements associated with postretirement benefits as a regulatory asset or liability. The asset or liability will decrease as the deferred items are amortized and recognized as components of net periodic benefit cost. For details about the amortization periods, see Note 11, Retirement Benefits.

Securitized Costs: The MPSC has issued securitization financing orders authorizing Consumers to issue securitization bonds in order to finance the recovery of the remaining book value of three smaller natural gas-fueled electric generating units that Consumers retired in 2015, seven smaller coal-fueled electric generating units that Consumers retired in 2016, and the D.E. Karn coal-fueled electric generating units that Consumers retired in 2023. Consumers has removed from plant, property, and equipment and recorded as a regulatory asset the book value of these units. Consumers is amortizing the regulatory asset over the life of the related securitization bonds, which it issued through subsidiaries in 2014 and 2023. For additional details regarding the securitization bonds, see Note 5, Financings and Capitalization—Securitization Bonds.

ARO: The recovery of the underlying asset investments and related removal and monitoring costs of recorded AROs is approved by the MPSC in depreciation rate cases. Consumers records a regulatory asset and a regulatory liability for timing differences between the recognition of AROs for financial reporting purposes and the recovery of these costs from customers. The recovery period approximates the useful life of the assets to be removed.

Decommissioning Costs: In Consumers’ electric depreciation and general rate cases, the MPSC has authorized Consumers to remove from depreciation rates the costs of decommissioning the D.E. Karn coal-fueled electric generating units, and instead defer those costs as a regulatory asset to be recovered through 2031. Additionally, ash disposal costs related to Consumers’ retired coal-fueled generating units may be deferred as a regulatory asset and collected over a ten‑year period. In its 2022 order approving Consumers’ integrated resource plan, the MPSC authorized similar treatment for the decommissioning and ash disposal costs associated with the J.H. Campbell coal-fueled generating units that were planned for retirement in 2025.

Unamortized Loss on Reacquired Debt: Under regulatory accounting, any unamortized discount, premium, or expense related to debt redeemed with the proceeds of new debt is deferred and amortized over the life of the new debt.

MGP Sites: Consumers is incurring environmental remediation and other response activity costs at 23 former MGP facilities. The MPSC allows Consumers to recover from its natural gas customers over a ten‑year period the costs incurred to remediate the MGP sites. For additional information, see Note 4, Contingencies and Commitments—Consumers Gas Utility Contingencies.

Ludington Overhaul Contract Dispute: The MPSC has authorized Consumers to defer as a regulatory asset costs associated with correcting incomplete, nonconforming, and defective work performed by TAES during a major overhaul and upgrade of Ludington. Consumers will defer such costs while post‑verdict proceedings and any appeals in the litigation with TAES and Toshiba continue; such costs will be offset, in part or in whole, by future litigation proceeds received from TAES or Toshiba. Consumers has also deferred replacement power costs due to outages resulting from correcting this work. Consumers will have the opportunity to seek appropriate recovery and ratemaking treatment for amounts recorded as a regulatory asset following resolution of the litigation. During 2025, cash expenditures associated with the Ludington overhaul contract dispute were $30 million. For additional details on the contract dispute, see Note 4, Contingencies and Commitments—Consumers Electric Utility Contingencies.

Service Restoration Cost Deferral: As a result of catastrophic storms in Consumers’ electric service territory, Consumers incurred significant service restoration costs during March and April 2025. In April 2025, Consumers filed with the MPSC an ex parte application requesting approval to defer, as a regulatory asset, operating and maintenance expenses associated with the storms. In June 2025, the MPSC approved the application, authorizing the deferral of these expenses for accounting purposes. Recovery of this regulatory asset will be requested in a future case.

Energy Waste Reduction Plan: Michigan law requires electric and gas utilities to implement programs that reduce energy consumption through energy efficiency and demand-side energy conservation. Utilities may recover the cost of achieving specified reductions in customers’ electricity and gas use through surcharges. The amount of spending incurred in excess of surcharges collected is recorded as a regulatory asset and amortized as surcharges are collected from customers over the plan period. The amount of surcharges collected in excess of spending incurred is recorded as a regulatory liability and amortized as costs are incurred.

Postretirement Benefits Expense Deferral Mechanism: In Consumers’ general rate cases, the MPSC approved a mechanism allowing Consumers to defer for future recovery or refund pension and OPEB expenses above or below the amounts used to set existing rates. Amounts deferred will be collected from or refunded to customers over ten years.

Renewable Energy Plan: Under Michigan law, renewable energy standards specify how much electricity must come from renewable sources and which technologies, such as wind, solar, and certain biomass, qualify. Utilities may recover compliance costs, including renewable power purchases (and related financial mechanisms), depreciation, property taxes, interest, and other operating and maintenance expenses for company-owned renewable assets, along with a return on those assets. The MPSC allows Consumers to transfer and collect a portion of these costs through its PSCR process. Incremental costs may be collected through surcharges. If spending exceeds amounts collected, the difference is recorded as a regulatory asset and amortized as recovered from customers; this excludes amounts related to return on equity. If collections exceed spending, the excess is recorded as a regulatory liability and amortized as future costs are incurred for operating renewable facilities and purchasing RECs under renewable energy agreements.

Regulatory Liabilities

Income Taxes, Net: Consumers records regulatory assets and liabilities to reflect the difference between deferred income taxes recognized for financial reporting purposes and amounts previously reflected in Consumers’ rates. This net balance will decrease over the remaining life of the related temporary differences and flow through income tax expense. The majority of the net regulatory liability recorded related to income taxes is associated with plant assets that are subject to normalization, which is governed by the Internal Revenue Code, and will be returned to customers over the remaining book life of the related plant assets. For additional details on deferred income taxes, see Note 13, Income Taxes.

ASP Gain: In April 2024, Consumers sold its unregulated ASP business to a non-affiliated company, resulting in a $110 million gain. In July 2024, the MPSC approved the utilization of $27.5 million, or one‑fourth, of the gain on the sale as an offset to the revenue deficiency in lieu of additional rate relief during the 12‑month period beginning October 1, 2024, with the remaining three-fourths of the gain, or $82.5 million, to be credited to customers as a bill credit over a three-year period beginning October 1, 2024.

Cost of Removal: The MPSC allows Consumers to collect amounts from customers to fund future asset removal activities. This regulatory liability is reduced as costs are incurred to remove the assets at the end of their useful lives.

Green Giving Program: In conjunction with Consumers’ voluntary green pricing program, the MPSC has directed Consumers to use surplus program funds to support renewable-energy participation by low‑income customers.

Renewable Energy Grant: In 2013, Consumers received a $69 million renewable energy grant for Lake Winds® Energy Park, which began operations in 2012. This grant reduces Consumers’ cost of complying with Michigan’s renewable portfolio standard and, accordingly, reduces the overall renewable energy surcharge to be collected from customers. The regulatory liability recorded for the grant will be amortized over the life of Lake Winds® Energy Park. Consumers presents the amortization as a reduction to maintenance and other operating expenses on its consolidated statements of income.

Consumers Electric Utility

2024 Electric Rate Case: In May 2024, Consumers filed an application with the MPSC seeking a rate increase of $325 million, made up of two components. First, Consumers requested a $303 million annual rate increase, based on a 10.25‑percent authorized return on equity for the projected 12‑month period ending February 28, 2026. The filing requested authority to recover costs related to new infrastructure investment primarily in distribution system reliability and cleaner energy resources. Second, Consumers requested approval of a $22 million surcharge for the recovery of distribution investments made in 2023 that exceeded the rates authorized in accordance with previous electric rate orders.

In October 2024, Consumers revised its requested increase to $277 million, primarily to reflect the removal of projected capital investments associated with certain solar facilities that Consumers incorporated into its amended Renewable Energy Plan.

In March 2025, the MPSC issued an order authorizing an annual rate increase of $176 million, which is inclusive of a $22 million surcharge for the recovery of distribution investments made in 2023 that exceeded the rate amounts authorized in accordance with previous electric rate orders. The approved rate increase is based on a 9.90‑percent authorized return on equity. The new rates became effective in April 2025

J.H. Campbell Emergency Order: In May 2025, before the planned closure of J.H. Campbell, the U.S. Secretary of Energy issued an emergency order under section 202(c) of the Federal Power Act requiring J.H. Campbell to continue operating for 90 days, through August 20, 2025. Subsequently, the U.S. Secretary of Energy issued two additional emergency orders for 90 days each, ultimately requiring continued operation of J.H. Campbell through February 17, 2026. These orders stated that continued operation of J.H. Campbell was required to meet an energy emergency across MISO’s North and Central regions. Consistent with the Federal Power Act and DOE regulations, the orders authorize Consumers to obtain cost recovery at FERC.

As directed, Consumers has continued to make J.H. Campbell available in the MISO market and, in June 2025, filed a complaint at FERC seeking a modification of the MISO Tariff that would enable Consumers to recover the costs of complying with the emergency orders. Consumers’ complaint sought a mechanism in the MISO Tariff that would allow allocation of those compliance costs across the MISO North and Central regions, consistent with the nature of the energy emergency declared in the U.S. Secretary of Energy orders. In August 2025, FERC granted Consumers’ complaint and ordered MISO to revise its tariff accordingly. MISO submitted a compliance filing with FERC in September 2025, and FERC approval of the compliance filing remains pending.

In January 2026, Consumers filed a request at FERC seeking recovery of the net financial impact of complying with the May 2025 emergency order, which was $42 million after applying MISO revenues of $78 million. This filing encompasses recovery sought by the joint owners of J.H. Campbell.

For the second emergency order period through December 31, 2025, the net financial impact of compliance was $93 million after applying MISO revenues of $77 million. Consumers will seek recovery of these compliance costs at a later date, consistent with rate recovery sought for the May 2025 emergency order. The ultimate financial impact remains subject to the outcome of the FERC proceeding and any future guidance or interpretation.

Consumers Gas Utility

2024 Gas Rate Case: In December 2024, Consumers filed an application with the MPSC seeking an annual rate increase of $248 million based on a 10.25‑percent authorized return on equity for the projected 12‑month period ending October 31, 2026. In July 2025, Consumers revised its requested increase to $217 million. In September 2025, the MPSC issued an order authorizing an annual rate increase of $157.5 million, based on a 9.80‑percent authorized return on equity. The new rates became effective in November 2025.

PSCR and GCR

The PSCR and GCR ratemaking processes are designed to allow Consumers to recover all of its power supply and purchased natural gas costs if incurred under reasonable and prudent policies and practices. The MPSC reviews these costs, policies, and practices in annual plan and reconciliation proceedings. Consumers adjusts its PSCR and GCR billing charges monthly, subject to ceiling factor limitations, in order to minimize the underrecovery or overrecovery amount in the annual reconciliations. Underrecoveries represent power supply and purchased natural gas costs that will be recovered from customers; overrecoveries represent previously collected revenues that will be refunded to customers.

Presented in the following table are the liabilities for PSCR and GCR underrecoveries and overrecoveries reflected on Consumers’ consolidated balance sheets:

In Millions
December 31			2025						2024
Assets
PSCR underrecoveries						$	38					$	—
Accounts receivable and accrued revenue						$	38					$	—
Liabilities
PSCR overrecoveries						$	—					$	13
GCR overrecoveries						28						25
Accrued rate refunds						$	28					$	38

4: Contingencies and Commitments

CMS Energy and Consumers are involved in various matters that give rise to contingent liabilities. Depending on the specific issues, the resolution of these contingencies could negatively affect CMS Energy’s and Consumers’ liquidity, financial condition, and results of operations. In their disclosures of these matters, CMS Energy and Consumers provide an estimate of the possible loss or range of loss when such an estimate can be made. Disclosures stating that CMS Energy or Consumers cannot predict the outcome of a matter indicate that they are unable to estimate a possible loss or range of loss for the matter.

CMS Energy Contingencies

CMS Land retained environmental remediation obligations for the collection and treatment of leachate at Bay Harbor after selling its interests in the development in 2002. Leachate is produced when water enters into cement kiln dust piles left over from former cement plant operations at the site. In 2012, CMS Land and EGLE finalized an agreement establishing the final remedies and the future water quality criteria at the site. CMS Land completed all construction necessary to implement the remedies required by the agreement and will continue to maintain and operate a system to discharge treated leachate into Little Traverse Bay under an NPDES permit, which was valid through 2025. CMS Land submitted a renewal request in March 2025, and will continue to operate under the existing permit until a renewal is issued.

At December 31, 2025, CMS Energy had a recorded liability of $48 million for its remaining obligations for environmental remediation. CMS Energy calculated this liability based on discounted projected costs, using a discount rate of 4.34 percent and an inflation rate of 1 percent on annual operating and maintenance costs. The undiscounted amount of the remaining obligation is $62 million. CMS Energy expects to pay the following amounts for long-term leachate disposal and operating and maintenance costs in each of the next five years:

In Millions
						2026						2027						2028						2029						2030
Long-term leachate disposal and operating and maintenance costs												$	4					$	4					$	4					$	4					$	4

CMS Energy’s estimate of response activity costs and the timing of expenditures could change if there are changes in circumstances or assumptions used in calculating the liability. Although a liability for its present estimate of remaining response activity costs has been recorded, CMS Energy cannot predict the ultimate financial impact or outcome of this matter.

Consumers Electric Utility Contingencies

Electric Environmental Matters: Consumers’ operations are subject to environmental laws and regulations. Historically, Consumers has generally been able to recover, in customer rates, the costs to operate its facilities in compliance with these laws and regulations.

Cleanup and Solid Waste: Consumers expects to incur remediation and other response activity costs at a number of sites under NREPA. Consumers believes that these costs should be recoverable in rates, but cannot guarantee that outcome. Consumers estimates its liability for NREPA sites for which it can estimate a range of loss to be between $2 million and $3 million. At December 31, 2025, Consumers had a recorded liability of $2 million, the minimum amount in the range of its estimated probable NREPA liability, as no amount in the range was considered a better estimate than any other amount.

Consumers is a potentially responsible party at a number of contaminated sites administered under CERCLA. CERCLA liability is joint and several. In 2010, Consumers received official notification from the EPA that identified Consumers as a potentially responsible party for cleanup of PCBs at the Kalamazoo River CERCLA site. The notification claimed that the EPA had reason to believe that Consumers disposed of PCBs and arranged for the disposal and treatment of PCB-containing materials at portions of the site. In 2011, Consumers received a follow-up letter from the EPA requesting that Consumers agree to participate in a removal action plan along with several other companies for an area of lower Portage Creek, which is connected to the Kalamazoo River. All parties asked to participate in the removal action plan, including Consumers, declined to accept liability. Until further information is received from the EPA, Consumers is unable to estimate a range of potential liability for cleanup of the river.

Based on its experience, Consumers estimates its share of the total liability for known CERCLA sites to be between $3 million and $8 million. Various factors, including the number and creditworthiness of potentially responsible parties involved with each site, affect Consumers’ share of the total liability. At December 31, 2025, Consumers had a recorded liability of $3 million for its share of the total liability at these sites, the minimum amount in the range of its estimated probable CERCLA liability, as no amount in the range was considered a better estimate than any other amount.

The timing of payments related to Consumers’ remediation and other response activities at its CERCLA and NREPA sites is uncertain. Consumers periodically reviews these cost estimates. A change in the underlying assumptions, such as an increase in the number of sites, different remediation techniques, the nature and extent of contamination, and legal and regulatory requirements, could affect its estimates of NREPA and CERCLA liability.

Ludington Overhaul Contract Dispute: Consumers and DTE Electric, co-owners of Ludington, entered into a 2010 engineering, procurement, and construction agreement with Toshiba International, under which Toshiba International contracted to perform a major overhaul and upgrade of Ludington. Toshiba International later assigned the contract and all of its obligations to TAES. TAES’ work under the contract was incomplete, defective, and non‑conforming. Consumers and DTE Electric repeatedly documented TAES’ failure to perform under the contract and demanded that TAES provide a comprehensive plan to resolve those matters, including adherence to its warranty commitments and other contractual obligations. Consumers and DTE Electric engaged in extensive efforts to resolve these issues with TAES, including a formal demand to TAES’ parent, Toshiba, under a parent guaranty it provided. TAES did not provide a comprehensive plan or otherwise meet its performance obligations. As a result of TAES’ defaults, Consumers and DTE Electric terminated the contract.

In order to enforce their rights under the contract and parent guaranty, and to pursue appropriate damages, Consumers and DTE Electric filed a complaint against TAES and Toshiba in the U.S. District Court for the Eastern District of Michigan in 2022. TAES and Toshiba filed a motion to dismiss the complaint, along with an answer and counterclaims seeking approximately $15 million in damages related to payments allegedly owed under the parties’ contract. The court denied the motion to dismiss filed by TAES and Toshiba.

The case against TAES went to trial before a jury and, in December 2025, the jury rendered a verdict in Consumers’ and DTE Electric’s favor. The jury found that TAES breached the parties’ contract and awarded damages of $383 million. The parties separately stipulated to $11 million in additional liquidated damages for late performance by TAES. These amounts are subject to pre- and post-judgment interest. In addition, the jury rejected TAES’ counterclaim, determining that Consumers and DTE Electric did not breach the contract. The parent guaranty provided by Toshiba allows Consumers and DTE Electric to recover legal costs in addition to damages. The parties are still engaged in post-verdict proceedings at the District Court and the jury verdict may be appealed; these processes could take two years or more to

conclude with finality. The jury verdict was a favorable outcome for Consumers but an unfavorable outcome in these additional proceedings could have a material adverse effect on CMS Energy’s and Consumers’ financial condition, results of operations, or liquidity. Consumers and DTE Electric must still also resolve their claim against Toshiba under the parent guaranty, which is still pending but which was bifurcated by the Court from the claims against TAES.

Previously, Toshiba announced that TBJH became the majority shareholder and new parent company of Toshiba through a common stock purchase. TBJH is a subsidiary of a Japanese private equity firm. Consumers and DTE Electric do not believe that this affects their rights under the parent guaranty provided by Toshiba.

With MPSC approval, Consumers and DTE Electric were authorized to defer as a regulatory asset the costs associated with repairing or replacing the defective work performed by TAES while the litigation with TAES and Toshiba remains pending. Consumers currently estimates that its share of repair, replacement, and other damages resulting from TAES’ defective work is approximately $350 million, which is expected to be offset in part or entirely by future litigation proceeds received from TAES or Toshiba. Consumers and DTE Electric will have the opportunity to seek appropriate recovery and ratemaking treatment for amounts recorded as a regulatory asset following resolution of the litigation, including any amounts not recovered from TAES or Toshiba. Consumers cannot predict the financial impact or outcome of such proceedings.

Consumers Gas Utility Contingencies

Consumers expects to incur remediation and other response activity costs at a number of sites under NREPA. These sites include 23 former MGP facilities. Consumers operated the facilities on these sites for some part of their operating lives. For some of these sites, Consumers has no present ownership interest or may own only a portion of the original site.

At December 31, 2025, Consumers had a recorded liability of $59 million for its remaining obligations for these sites. Consumers expects to pay the following amounts for remediation and other response activity costs in each of the next five years:

In Millions
						2026						2027						2028						2029						2030
Remediation and other response activity costs												$	3					$	8					$	25					$	11					$	3

Consumers periodically reviews these cost estimates. Any significant change in the underlying assumptions, such as an increase in the number of sites, changes in remediation techniques, or legal and regulatory requirements, could affect Consumers’ estimates of annual response activity costs and the MGP liability.

Pursuant to orders issued by the MPSC, Consumers defers its MGP-related remediation costs and recovers them from its customers over a ten‑year period. At December 31, 2025, Consumers had a regulatory asset of $82 million related to the MGP sites.

Guarantees

Presented in the following table are CMS Energy’s and Consumers’ guarantees at December 31, 2025:

In Millions
Guarantee Description			Issue Date			Expiration Date			Maximum Obligation						Carrying Amount
CMS Energy, including Consumers
Indemnity obligations from sale of membership interests in VIEs1			various			various						$	230					$	—
Indemnity obligations from stock and asset sale agreements2			various			indefinite						152						—
Guarantee3			2011			indefinite						30						—
Consumers
Guarantee3			2011			indefinite						$	30					$	—

1These obligations arose from the sale of membership interests in Aviator Wind, BG Solar Holdings, Newport Solar Holdings, and NWO Holdco to tax equity investors. NorthStar Clean Energy provided certain indemnity obligations that protect the tax equity investors against losses incurred as a result of breaches of representations and warranties under the associated limited liability company agreements. These obligations are generally capped at an amount equal to the tax equity investor’s capital contributions plus a specified return, less any distributions and tax benefits it receives, in connection with its membership interest. For any indemnity obligations related to Aviator Wind, NorthStar Clean Energy would recover 49 percent of any amounts paid to the tax equity investor from the other owner of Aviator Wind Equity Holdings. Additionally, Aviator Wind holds insurance coverage that would partially protect against losses incurred as a result of certain failures to qualify for production tax credits. For further details on NorthStar Clean Energy’s ownership interest in these entities, see Note 19, Variable Interest Entities.

2These obligations arose from stock and asset sale agreements under which CMS Energy or a subsidiary of CMS Energy indemnified the purchaser for losses resulting from various matters, including claims related to taxes. The maximum obligation amount is mostly related to an Equatorial Guinea tax claim.

3This obligation comprises a guarantee provided by Consumers to the DOE in connection with a settlement agreement regarding damages resulting from the department’s failure to accept spent nuclear fuel from nuclear power plants formerly owned by Consumers.

Additionally, in the normal course of business, CMS Energy, Consumers, and certain other subsidiaries of CMS Energy have entered into various agreements containing tax and other indemnity provisions for which they are unable to estimate the maximum potential obligation. CMS Energy and Consumers consider the likelihood that they would be required to perform or incur substantial losses related to these indemnities and those disclosed in the table to be remote.

Other Contingencies

In addition to the matters disclosed in this Note and Note 3, Regulatory Matters, there are certain other lawsuits and administrative proceedings before various courts and governmental agencies, as well as unasserted claims that may result in such proceedings, arising in the ordinary course of business to which CMS Energy, Consumers, and certain other subsidiaries of CMS Energy are parties. These other lawsuits, proceedings, and unasserted claims may involve personal injury, property damage, contracts, environmental matters, federal and state taxes, rates, licensing, employment, and other matters. Certain of these matters, while potentially substantial, are covered by insurance and the insurer or insurers are involved in the relevant proceedings. Further, CMS Energy and Consumers occasionally self-report

certain regulatory non‑compliance matters that may or may not eventually result in administrative proceedings. CMS Energy and Consumers believe that the outcome of any one of these proceedings and potential claims will not have a material negative effect on their consolidated results of operations, financial condition, or liquidity.

Contractual Commitments

Purchase Obligations: Purchase obligations arise from long-term contracts for the purchase of commodities and related services, primarily long-term PPAs, and construction and service agreements. Related-party PPAs are between Consumers and certain affiliates of NorthStar Clean Energy. Presented in the following table are CMS Energy’s and Consumers’ contractual purchase obligations at December 31, 2025 for each of the periods shown:

In Millions
			Payments Due
			Total						2026						2027						2028						2029						2030						Beyond 2030
CMS Energy, including Consumers
Total PPAs						$	16,983					$	873					$	904					$	930					$	942					$	1,011					$	12,323
Other						3,582						1,511						762						468						391						303						147
Total purchase obligations						20,565						2,384						1,666						1,398						1,333						1,314						12,470
Consumers
PPAs
MCV PPA						$	5,539					$	339					$	312					$	316					$	308					$	395					$	3,869
Related-party PPAs						62						32						30						—						—						—						—
Other PPAs						11,382						502						562						614						634						616						8,454
Total PPAs						$	16,983					$	873					$	904					$	930					$	942					$	1,011					$	12,323
Other						2,700						1,185						599						363						266						232						55
Total purchase obligations						19,683						2,058						1,503						1,293						1,208						1,243						12,378

MCV PPA: Consumers has a PPA with the MCV Partnership giving Consumers the right to purchase up to 1,240 MW of capacity and energy produced by the MCV Facility through May 2030. The MCV PPA provides for:

• a capacity charge of $10.14 per MWh of available capacity through March 2025 and $5.00 per MWh of available capacity from March 2025 through the termination date of the PPA

• a fixed energy charge of $6.30 per MWh for on-peak hours and $6.00 for off-peak hours

• a variable energy charge based on the MCV Partnership’s cost of production for energy delivered to Consumers

• a $5 million annual contribution by the MCV Partnership to a renewable resources program through March 2025

Capacity and energy charges under the MCV PPA were $360 million in 2025, $358 million in 2024, and $340 million in 2023.

In September 2025, Consumers entered into a new ten‑year PPA with the MCV Partnership for the purchase of up to 1,240 MW of capacity and associated energy from the MCV Facility, effective June 1, 2030. Under the terms of the new agreement, Consumers will pay a monthly capacity charge of $5.00 per MWh of available capacity. Energy payments include a fixed component designed to recover non-fuel operating costs and a variable component based on the MCV Partnership’s cost of production for

energy delivered to Consumers. The agreement, which is subject to MPSC approval, supports Consumers’ ongoing resource adequacy and energy supply planning efforts.

Other PPAs: Consumers has PPAs expiring through 2060 with various counterparties. The majority of the PPAs have capacity and energy charges for delivered energy. Capacity and energy charges under these PPAs were $603 million in 2025, $565 million in 2024, and $498 million in 2023. In addition, CMS Energy and Consumers account for several of their PPAs as leases. See Note 9, Leases for more information about CMS Energy’s and Consumers’ lease obligations.

5: Financings and Capitalization

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

In Millions, Except Interest Rate and Maturity
			Interest Rate (%)						Maturity						2025						2024
CMS Energy, including Consumers
CMS Energy, parent only
Senior notes			3.600						2025									$	—					$	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
																		$	1,475					$	1,725
Convertible senior notes**1			3.375			2			2028									$	800					$	800
			3.125			3			2031									1,000						—
																		$	1,800					$	800
Junior subordinated notes**4			4.750			5			2050									$	500					$	500
			3.750			6			2050									400						400
			6.500			7			2055									1,000						—
			5.625						2078									200						200
			5.875						2078									280						280
			5.875						2079									630						630
																		$	3,010					$	2,010
Term loan facilities			variable						2025									$	—					$	90
			variable						2025									—						400
																		$	—					$	490
Total CMS Energy, parent only																		$	6,285					$	5,025
CMS Energy subsidiaries
Consumers																		$	12,196					$	11,370
NorthStar Clean Energy
Revolving credit facility			variable			8			2028									235						150
Construction financing agreement9			variable						Five years after conversion date									223						—
Total principal amount outstanding																		$	18,939					$	16,545
Current amounts																		(950)						(1,192)
Unamortized discounts																		(28)						(29)
Unamortized issuance costs																		(154)						(130)
Total CMS Energy long-term debt																		$	17,807					$	15,194

1Holders of the convertible senior notes may convert their notes at their option in accordance with the conditions outlined in the related indentures. CMS Energy will settle conversions of the notes in accordance with the terms outlined in the related indentures. The conversion rate will be subject to adjustment for

anti‑dilutive events and fundamental change and redemption provisions as described in the related indentures. There are no sinking fund requirements for the notes.

2At December 31, 2025, the conversion price for the notes was $73.61 per share of common stock. Unamortized debt costs associated with this issuance were $6 million at December 31, 2025 and $9 million at December 31, 2024.

3At December 31, 2025, the conversion price for the notes was $90.61 per share of common stock. Unamortized debt costs associated with this issuance were $12 million at December 31, 2025.

4These unsecured obligations rank subordinate and junior in right of payment to all of CMS Energy’s existing and future senior indebtedness.

5On 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.

6On 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.

7On June 1, 2035, and every five years thereafter, the notes will reset to an interest rate equal to the five‑year treasury rate plus 1.961 percent.

8Loans under this facility have an interest rate of one-month Term SOFR plus 1.750 percent less an adjustment of 0.050 percent for green credit advances. At December 31, 2025, the weighted-average interest rate for the loans issued under this facility was 5.436 percent.

9Loans under this facility have an interest rate of one-month Term SOFR plus 2.250 percent. At December 31, 2025, the weighted-average interest rate for the loans issued under this facility was 6.476 percent. At completion of project construction, scheduled for the first half of 2026, a portion of this financing will convert into a term loan that will mature five years after the conversion date.

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

In Millions, Except Interest Rate and Maturity
			Interest Rate (%)						Maturity									2025						2024
Consumers
First mortgage bonds						5.240						2026									$	115					$	115
						3.680						2027									100						100
						3.390						2027									35						35
						4.650						2028									425						425
						3.800						2028									300						300
						4.900						2029									500						500
						5.070						2029									50						50
						4.600						2029									600						600
						4.700						2030									700						700
						4.500						2031									500						—
						5.170						2032									95						95
						3.600						2032									350						350
						3.180						2032									100						100
						4.625						2033									700						700
						5.050						2035									625						—
						5.800						2035									175						175
						5.380						2037									140						140
						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						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
																					$	12,520					$	11,395

In Millions, Except Interest Rate and Maturity
			Interest Rate (%)						Maturity									2025						2024
Tax-exempt revenue bonds						0.875			2			2035									$	35					$	35
						3.350			3			2049									75						75
																					$	110					$	110
2014 Securitization bonds						3.528			4			2029			5						$	81					$	112
2023 Securitization bonds						5.281			6			2028-2031			5						504						588
																					$	585					$	700
Total principal amount outstanding																					$	13,215					$	12,205
Current amounts																					(573)						(452)
Long-term debt – related parties7 principal amount outstanding												2043-2060									(1,019)						(835)
Unamortized discounts																					(26)						(27)
Unamortized issuance costs																					(73)						(73)
Total long-term debt																					$	11,524					$	10,818

1The variable-rate bonds bear interest quarterly at a rate of three‑month SOFR minus 0.038 percent, subject to a zero‑percent floor. At December 31, 2025, the interest rates were 3.685 percent for bonds due September 2069, 3.851 percent for bonds due May 2070, and 3.897 percent for bonds due October 2070. The interest rate for the variable-rate bonds at December 31, 2024 were 4.320 percent, 4.483 percent, and 4.551 percent, respectively. 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, 2025.

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, 2027.

4The weighted-average interest rate for Consumers’ securitization bonds issued through its subsidiary, Consumers 2014 Securitization Funding, was 3.528 percent at December 31, 2025 and 2024.

5Principal and interest payments are made semiannually.

6The weighted-average interest rate for Consumers’ securitization bonds issued through its subsidiary, Consumers 2023 Securitization Funding, was 5.281 percent at December 31, 2025 and 5.322 percent at December 31, 2024.

7Long-term debt – related parties reflects Consumers’ outstanding debt held by its parent as a result of CMS Energy’s repurchase of Consumers’ first mortgage bonds. Unamortized discounts associated with the repurchase of Consumers’ first mortgage bonds were $5 million at December 31, 2025 and 2024. Unamortized issuance costs were $9 million at December 31, 2025 and $7 million at December 31, 2024.

Financings: Presented in the following table is a summary of major long-term debt issuances during 2025:

			Principal (In Millions)						Interest Rate (%)			Issuance Date			Maturity Date
CMS Energy, parent only
Junior subordinated notes						$	1,000		6.500			February 2025			June 2055
Term loan credit agreement						110			variable			February 2025			December 2025
Convertible senior notes						1,000			3.125			November 2025			May 2031
Total CMS Energy, parent only						$	2,110
NorthStar Clean Energy
Construction financing agreement						$	223		variable			February 2025			Five years after conversion date
Total NorthStar Clean Energy						$	223
Consumers
First mortgage bonds						$	500		4.500			May 2025			January 2031
First mortgage bonds						625			5.050			May 2025			May 2035
Total Consumers						$	1,125
Total CMS Energy						$	3,458

Retirements: Presented in the following table is a summary of major long-term debt retirements during 2025:

			Principal (In Millions)						Interest Rate (%)			Retirement Date			Maturity Date
CMS Energy, parent only
Term loan credit agreement						$	400		variable			February 2025			September 2025
Term loan credit agreement						200			variable			February 2025			December 2025
Senior notes						250			3.600			November 2025			November 2025
Total CMS Energy, parent only						$	850
Total CMS Energy						$	850

CMS Energy’s Purchase of Consumers’ First Mortgage Bonds: CMS Energy purchased Consumers’ first mortgage bonds with a principal balance of $184 million during 2025 in exchange for cash of $109 million. On a consolidated basis, CMS Energy’s repurchase of Consumers’ first mortgage bonds was accounted for as a debt extinguishment and resulted in a pre-tax gain of $72 million during 2025, which was recorded in other income on CMS Energy’s consolidated statements of income. Interest expense related to the repurchased bonds was $28 million for the year ended December 31, 2025, which was recorded in interest expense – related parties on Consumers’ consolidated statements of income.

In 2024, CMS Energy purchased Consumers’ first mortgage bonds with a principal balance of $404 million in exchange for cash of $289 million. On a consolidated basis, CMS Energy’s repurchase of Consumers’ first mortgage bonds resulted in a pre-tax gain of $110 million for the year ended December 31, 2024. Interest expense related to the repurchased bonds was $19 million for the year ended December 31, 2024.

In 2023, CMS Energy purchased Consumers’ first mortgage bonds with a principal balance of $431 million in exchange for cash of $293 million. On a consolidated basis, CMS Energy’s repurchase of Consumers’ first mortgage bonds resulted in a pre-tax gain of $131 million for the year ended

December 31, 2023. Interest expense related to the repurchased bonds was $5 million for the year ended December 31, 2023.

Regulatory Authorization for Financings: Consumers is required to maintain FERC authorization for financings. Any long-term issuances during the authorization period are exempt from FERC’s competitive bidding and negotiated placement requirements. Its short-term authorization ends on May 2, 2026. In January 2026, Consumers filed an application with FERC for authority to issue long-term and short-term debt securities between May 1, 2026 and April 30, 2028.

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.

Securitization Bonds: Certain regulatory assets held by Consumers’ subsidiaries, Consumers 2014 Securitization Funding and Consumers 2023 Securitization Funding, collateralize Consumers’ securitization bonds. Consumers 2014 Securitization Funding and Consumers 2023 Securitization Funding are distinct subsidiaries. The bondholders of each entity have no recourse to the other’s assets or the assets of Consumers. Consumers collects securitization surcharges to cover the principal and interest on the bonds as well as certain other qualified costs. The surcharges collected by Consumers on behalf of each entity are remitted to that subsidiary’s account 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, 2025, the aggregate annual maturities for long-term debt for the next five years, based on stated maturities or earlier put dates, were:

In Millions
			2026						2027						2028						2029						2030
CMS Energy, including Consumers
Long-term debt
CMS Energy, parent only						$	300					$	625					$	800					$	—					$	—
NorthStar Clean Energy						77						—						235						—						—
Consumers						573						263						843						1,256						812
Total CMS Energy						$	950					$	888					$	1,878					$	1,256					$	812
Consumers
Long-term debt						$	573					$	263					$	843					$	1,256					$	812

Credit Facilities: The following credit facilities with banks were available at December 31, 2025:

In Millions
Expiration Date			Amount of Facility						Amount Borrowed						Letters of Credit Outstanding						Amount Available
CMS Energy, parent only
Unsecured revolving credit facility, expiring November 20301						$	750					$	—					$	35					$	715
Unsecured letter of credit facility, expiring September 2026						50						—						50						—
NorthStar Clean Energy
Secured revolving credit facility, expiring May 20282						$	250					$	235					$	10					$	5
Secured letter of credit facility, expiring September 20283						37						—						37						—
Secured letter of credit facility4						19						—						12						7
Consumers
Secured revolving credit facility, expiring November 20305,6						$	1,100					$	—					$	6					$	1,094
Secured revolving credit facility, expiring November 20285,6						300						—						—						300
Secured letter of credit facility, expiring May 20275						100						—						100						—
Unsecured letter of credit facility, expiring March 2028						50						—						43						7
Unsecured letter of credit facility7						100						—						97						3
Unsecured letter of credit facility7						100						—						100						—

1There were no borrowings under this facility during the year ended December 31, 2025.

2Obligations under this facility are secured by certain pledged equity interests in subsidiaries of NorthStar Clean Energy; under the terms of this facility, the interests may not be sold by NorthStar Clean Energy unless there is an agreed-upon substitution for the pledged equity interests. At December 31, 2025, the net book value of the pledged equity interests was $514 million. Also under the terms of this facility, NorthStar Clean Energy may be restricted from remitting cash dividends to CMS Energy in the event of default.

3This letter of credit facility is available to a subsidiary of Aviator Wind Equity Holdings and is secured by assets of Aviator Wind. For more information regarding Aviator Wind Equity Holdings and Aviator Wind, see Note 19, Variable Interest Entities.

4The letter of credit facility is available to certain subsidiaries of NorthStar Clean Energy. The letter of credit facility is secured under a construction-to-term financing agreement and will expire five years after the term conversion date.

5Obligations under these facilities are secured by first mortgage bonds of Consumers.

6There were no borrowings under these facilities during the year ended December 31, 2025.

7Uncommitted letter of credit facility with automatic renewal provisions and therefore no expiration.

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, 2025, there were no commercial paper notes outstanding under this program.

In December 2025, Consumers renewed a short-term credit agreement with CMS Energy, permitting Consumers to borrow up to $500 million at an interest rate of the prior month’s average one‑month Term SOFR minus 0.100 percent. At December 31, 2025, outstanding borrowings under the agreement were $340 million bearing interest at 3.859 percent, recorded as current notes payable – related parties on Consumers’ consolidated balance sheets.

NorthStar Clean Energy’s Supplier Financing Program: Under a supplier financing program, NorthStar Clean Energy agrees to pay a bank that is acting as its payment agent the stated amount of confirmed invoices from participating suppliers on the original maturity dates of the invoices. The bank is required to pay the supplier invoices that have been confirmed as valid under the program in full within 135 days of the invoice date. NorthStar Clean Energy does not provide collateral or a guarantee to the bank in support of its payment obligations under the agreement, nor does it pay a fee for the service. NorthStar Clean Energy or the bank may terminate the supplier financing program agreement upon 30 days prior written notice to the other party. Obligations under this program are accounted for in accounts payable on CMS Energy’s consolidated balance sheets.

Presented in the following table is the activity under NorthStar Clean Energy’s supplier financing program during the year ended December 31, 2025

In Millions
Year Ended December 31			2025						2024
Balance of payables under suppler financing program at beginning of period						$	22					$	—
Payables confirmed						158						22
Payments and other adjustments						(102)						—
Balance of payables under suppler financing program at end of period						$	78					$	22

Dividend Restrictions: At December 31, 2025, payment of dividends by CMS Energy on its common stock was limited to $8.9 billion under provisions of the Michigan Business Corporation Act of 1972.

Under the provisions of its articles of incorporation, at December 31, 2025, Consumers had $2.5 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, 2025, Consumers paid $898 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: In 2023, CMS Energy entered into an equity offering program under which it may sell shares of its common stock having an aggregate sales price of up to $1 billion in privately negotiated transactions, in “at the market” offerings, or through forward sales transactions.

Under the forward sales transactions, CMS Energy may either settle physically by issuing shares of its common stock at the then-applicable forward sale price specified by the agreement or settle net by delivering or receiving 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.

As of December 31, 2024, CMS Energy had 0.4 million shares contracted under forward sale agreements at a weighted average initial forward price of $69.43 per share. During the year ended December 31, 2025, CMS Energy entered into forward sale agreements for approximately 6.7 million shares at a weighted average initial forward price of $71.08 per share. During the same period, CMS Energy settled forward sale contracts under this program by issuing approximately 7.0 million shares at a weighted average price of $71.16 per share, resulting in net proceeds of $497 million. Following these transactions, outstanding forward contracts under the program have an aggregate sales price of $8 million, maturing November 30, 2026.

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, 2025, it 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, 2025 and 2024:

			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, 2025 and 2024:

			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

6: Fair Value Measurements

Accounting standards define fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. When measuring fair value, CMS Energy and Consumers are required to incorporate all assumptions that market participants would use in pricing an asset or liability, including assumptions about risk. A fair value hierarchy prioritizes inputs used to measure fair value according to their observability in the market. The three levels of the fair value hierarchy are as follows:

• Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities.

• Level 2 inputs are observable, market-based inputs, other than Level 1 prices. Level 2 inputs may include quoted prices for similar assets or liabilities in active markets, quoted prices in inactive markets, and inputs derived from or corroborated by observable market data.

• Level 3 inputs are unobservable inputs that reflect CMS Energy’s or Consumers’ own assumptions about how market participants would value their assets and liabilities.

CMS Energy and Consumers classify fair value measurements within the fair value hierarchy based on the lowest level of input that is significant to the fair value measurement in its entirety.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

Presented in the following table are CMS Energy’s and Consumers’ assets and liabilities recorded at fair value on a recurring basis:

In Millions
			CMS Energy, including Consumers															Consumers
December 31			2025						2024									2025						2024
Assets1
Cash equivalents						$	154					$	27								$	—					$	—
Restricted cash equivalents						106						75									86						75
Nonqualified deferred compensation plan assets						36						34									27						25
Derivative instruments						2						2									2						2
Total assets						$	298					$	138								$	115					$	102
Liabilities1
Nonqualified deferred compensation plan liabilities						$	36					$	34								$	27					$	25
Derivative instruments						3						—									—						—
Total liabilities						$	39					$	34								$	27					$	25

1All assets and liabilities were classified as Level 1 with the exception of derivative contracts, which were classified as Level 2 and 3.

Cash Equivalents: Cash equivalents and restricted cash equivalents consist of money market funds with daily liquidity.

Nonqualified Deferred Compensation Plan Assets and Liabilities: The nonqualified deferred compensation plan assets consist of mutual funds, which are bought and sold only at the discretion of plan participants. The assets are valued using the daily quoted net asset values. CMS Energy and Consumers value their nonqualified deferred compensation plan liabilities based on the fair values of the plan assets, as they reflect the amount owed to the plan participants in accordance with their investment elections. CMS Energy and Consumers report the assets in other non‑current assets and the liabilities in other non‑current liabilities on their consolidated balance sheets.

Derivative Instruments: CMS Energy and Consumers value their derivative instruments using either a market approach that incorporates information from market transactions, or an income approach that discounts future expected cash flows to a present value amount. CMS Energy’s and Consumers’ derivatives are classified as Level 2 and 3.

The derivatives classified as Level 2 are interest rate swaps at NorthStar Clean Energy, which are valued using market-based inputs.

In February 2025, a subsidiary of NorthStar Clean Energy entered into floating-to-fixed interest rate swaps to reduce the impact of interest rate fluctuations associated with interest payments on certain future long‑term variable-rate debt. The interest rate swaps economically hedge the future variability of interest payments on debt with a notional amount of $109 million. Gains or losses on these swaps are reported in other expense on CMS Energy’s consolidated statements of income. The amount recorded in other expense was $3 million for the year ended December 31, 2025. The fair value of these swaps recorded in

other non-current liabilities on CMS Energy’s consolidated balance sheets totaled $3 million at December 31, 2025.

The majority of derivatives classified as Level 3 are FTRs held by Consumers. Due to the lack of quoted pricing information, Consumers determines the fair value of its FTRs based on Consumers’ average historical settlements. Consumers reports derivatives associated with FTRs in other current assets on its consolidated balance sheets.There was no material activity within the Level 3 category of derivatives during the periods presented.

7: Financial Instruments

Presented in the following table are the carrying amounts and fair values, by level within the fair value hierarchy, of CMS Energy’s and Consumers’ financial instruments that are not recorded at fair value. The table excludes cash, cash equivalents, short-term financial instruments, and trade accounts receivable and payable whose carrying amounts approximate their fair values. For information about assets and liabilities recorded at fair value and for additional details regarding the fair value hierarchy, see Note 6, Fair Value Measurements.

In Millions
			December 31, 2025																																	December 31, 2024
			Carrying Amount						Fair Value																											Carrying Amount						Fair Value
			Total						Level																					Total						Level
			1						2						3									1						2						3
CMS Energy, including Consumers
Assets
Long-term receivables1						$	7					$	6					$	—					$	—					$	6								$	9					$	8					$	—					$	—					$	8
Liabilities
Long-term debt2						18,757						17,645						2,042						13,663						1,940									16,386						14,876						1,018						11,952						1,906
Long-term payables3						7						7						—						—						7									9						9						—						—						9
Consumers
Assets
Long-term receivables1						$	7					$	6					$	—					$	—					$	6								$	9					$	8					$	—					$	—					$	8
Notes receivable – related party4						90						90						—						—						90									94						94						—						—						94
Liabilities
Long-term debt5						12,097						11,031						—						9,091						1,940									11,270						9,940						—						8,034						1,906
Long-term debt – related party6						1,005						657						—						657						—									823						549						—						549						—
Long-term payables						2						2						—						—						2									4						4						—						—						4

1Includes current portion of long-term accounts receivable and notes receivable of $3 million at December 31, 2025 and $4 million at December 31, 2024.

2Includes current portion of long-term debt of $950 million at December 31, 2025 and $1.2 billion at December 31, 2024.

3Includes current portion of long-term payables of $2 million at December 31, 2025 and 2024.

4Includes current portion of notes receivable – related party of $7 million at December 31, 2025 and 2024. For more information on notes receivable – related party, see Note 18, Related-party Transactions—Consumers

5Includes current portion of long-term debt of $573 million at December 31, 2025 and $452 million at December 31, 2024.

6For more information on CMS Energy’s repurchases of Consumers’ first mortgage bonds, see Note 5, Financings and Capitalization—CMS Energy’s Purchase of Consumers’ First Mortgage Bonds.

Notes receivable – related party represents Consumers’ portion of the DB SERP demand note payable issued by CMS Energy to the DB SERP rabbi trust. The demand note bears interest at an annual rate of 4.10 percent and has a maturity date of 2028.

8: Plant, Property, and Equipment

Presented in the following table are details of CMS Energy’s and Consumers’ plant, property, and equipment:

In Millions, Except as Noted
December 31			Estimated Depreciable Life in Years			2025						2024
CMS Energy, including Consumers
Plant, property, and equipment, gross
Consumers			3 – 125						$	36,120					$	33,434
NorthStar Clean Energy
Independent power production1			3 – 40						1,585						1,452
Assets under finance leases2									55						45
Other			3 – 5						3						1
Plant, property, and equipment, gross									$	37,763					$	34,932
Construction work in progress									3,052						2,098
Accumulated depreciation and amortization									(10,135)						(9,569)
Total plant, property, and equipment3									$	30,680					$	27,461
Consumers
Plant, property, and equipment, gross
Electric
Generation4			15 – 125						$	7,171					$	6,576
Distribution			15 – 75						13,360						12,135
Other			5 – 55						1,209						1,307
Assets under finance leases2									131						119
Gas
Distribution			20 – 85						8,553						7,942
Transmission			17 – 75						3,236						3,081
Underground storage facilities5			29 – 75						1,535						1,405
Other			5 – 55						886						828
Assets under finance leases2									8						12
Other non-utility property			3 – 51						31						29
Plant, property, and equipment, gross									$	36,120					$	33,434
Construction work in progress6									2,354						1,766
Accumulated depreciation and amortization									(9,842)						(9,310)
Total plant, property, and equipment3									$	28,632					$	25,890

1A portion of independent power production assets are leased to others under operating leases. For information regarding CMS Energy’s operating leases of owned assets, see Note 9, Leases.

2For information regarding the amortization terms of CMS Energy’s and Consumers’ assets under finance leases, see Note 9, Leases.

3Consumers’ plant additions were $3.1 billion for the year ended December 31, 2025 and $2.1 billion for the year ended December 31, 2024. Consumers’ plant retirements were $387 million for the year ended December 31, 2025 and $390 million for the year ended December 31, 2024.

4Includes 13 hydroelectric dams that Consumers has agreed to sell, contingent upon MPSC and FERC approval. For more information, see Note 20, Exit Activities and Asset Sales.

5Underground storage includes base natural gas of $24 million at December 31, 2025 and $26 million for the year ended December 31, 2024. Base natural gas is not subject to depreciation.

6For the year ended December 31, 2025, Consumers fully impaired certain development assets totaling $20 million. Of this amount, $15 million relates to two early-phase renewable natural gas development projects that have been paused indefinitely. The remaining impairment charge was deferred as a regulatory asset and will be recovered through the Renewable Energy Plan.

Intangible Assets: Included in net plant, property, and equipment are intangible assets. Presented in the following table are details about Consumers’ intangible assets:

In Millions, Except as Noted
Description			Amortization Life in Years			December 31, 2025															December 31, 2024
Gross Cost1						Accumulated Amortization									Gross Cost1						Accumulated Amortization
Consumers
Software development			3 – 15						$	649					$	492								$	679					$	481
Rights of way			50 – 85						274						72									253						68
Franchises and consents			5 – 50						16						12									16						11
Leasehold improvements			various2						15						9									13						7
Other intangibles			various						33						17									28						16
Total									$	987					$	602								$	989					$	583

1Consumers’ intangible asset additions were $62 million for the year ended December 31, 2025 and $90 million for the year ended December 31, 2024. Consumers’ intangible asset retirements were $64 million for the year ended December 31, 2025 and $153 million for the year ended December 31, 2024.

2Leasehold improvements are amortized over the life of the lease, which may change whenever the lease is renewed or extended.

Capitalization: CMS Energy and Consumers record plant, property, and equipment at original cost when placed into service. The cost includes labor, material, applicable taxes, overhead such as pension and other benefits, and AFUDC, if applicable. Consumers’ plant, property, and equipment is generally recoverable through its general ratemaking process.

With the exception of utility property for which the remaining book value has been securitized, mothballed utility property stays in rate base and continues to be depreciated at the same rate as before the mothball period. When utility property is retired or otherwise disposed of in the ordinary course of business, Consumers records the original cost to accumulated depreciation, along with associated cost of removal, net of salvage. CMS Energy and Consumers recognize gains or losses on the retirement or disposal of non‑regulated assets in income. Consumers records cost of removal collected from customers, but not spent, as a regulatory liability.

Software: CMS Energy and Consumers capitalize the costs to purchase and develop internal-use computer software. These costs are expensed evenly over the estimated useful life of the internal-use computer software. If computer software is integral to computer hardware, then its cost is capitalized and depreciated with the hardware.

AFUDC: Consumers capitalizes AFUDC on regulated major construction projects. AFUDC represents the estimated cost of debt and authorized return-on-equity funds used to finance construction additions. Consumers records the offsetting credit as a reduction of interest for the amount representing the borrowed funds component and as other income for the equity funds component on the consolidated statements of income. When construction is completed and the property is placed in service, Consumers depreciates and recovers the capitalized AFUDC from customers over the life of the related asset. Presented in the following table are Consumers’ average AFUDC capitalization rates:

Years Ended December 31			2025			2024			2023
Electric			6.9		%	6.9		%	6.5		%
Gas			5.9			5.8			5.8

Assets Under Finance Leases: Presented in the following table are further details about changes in CMS Energy’s and Consumers’ assets under finance leases:

In Millions
Years Ended December 31			2025						2024
CMS Energy, including Consumers
Balance at beginning of period						$	176					$	136
Additions						53						55
Net retirements and other adjustments						(36)						(15)
Balance at end of period						$	193					$	176
Consumers
Balance at beginning of period						$	131					$	112
Additions						22						34
Net retirements and other adjustments						(15)						(15)
Balance at end of period						$	138					$	131

Assets under finance leases are presented as gross amounts. CMS Energy’s, including Consumers’, accumulated amortization of assets under finance leases was $53 million at December 31, 2025 and $57 million at December 31, 2024. Consumers’ accumulated amortization of assets under finance leases was $48 million at December 31, 2025 and $55 million at December 31, 2024.

Depreciation and Amortization: Presented in the following table are further details about CMS Energy’s and Consumers’ accumulated depreciation and amortization:

In Millions
Years Ended December 31			2025						2024
CMS Energy, including Consumers
Utility plant assets						$	9,838					$	9,307
Non-utility plant assets						297						262
Consumers
Utility plant assets						$	9,838					$	9,307
Non-utility plant assets						4						3

Consumers depreciates utility property on an asset-group basis, in which it applies a single MPSC-approved depreciation rate to the gross investment in a particular class of property within the electric and

gas segments. Consumers performs depreciation studies periodically to determine appropriate group lives. Presented in the following table are the composite depreciation rates for Consumers’ segment properties:

Years Ended December 31			2025			2024			2023
Electric utility property			3.6		%	3.6		%	3.8		%
Gas utility property			2.5			2.5			2.8
Other property			7.0			7.1			7.8

CMS Energy and Consumers record property repairs and minor property replacement as maintenance expense. CMS Energy and Consumers record planned major maintenance activities as operating expense unless the cost represents the acquisition of additional long-lived assets or the replacement of an existing long-lived asset.

Presented in the following table are the components of CMS Energy’s and Consumers’ depreciation and amortization expense:

In Millions
Years Ended December 31			2025						2024						2023
CMS Energy, including Consumers
Depreciation expense – plant, property, and equipment						$	1,099					$	1,041					$	1,050
Amortization expense
Software						75						81						92
Other intangible assets						7						5						5
Other regulatory assets						8						2						—
Securitized regulatory assets						117						111						33
Total depreciation and amortization expense						$	1,306					$	1,240					$	1,180
Consumers
Depreciation expense – plant, property, and equipment						$	1,047					$	992					$	1,007
Amortization expense
Software						75						81						92
Other intangible assets						7						5						5
Other regulatory assets						8						2						—
Securitized regulatory assets						117						111						33
Total depreciation and amortization expense						$	1,254					$	1,191					$	1,137

Presented in the following table is Consumers’ estimated amortization expense on intangible assets for each of the next five years:

In Millions
			2026						2027						2028						2029						2030
Consumers
Intangible asset amortization expense						$	77					$	66					$	55					$	50					$	49

Jointly Owned Regulated Utility Facilities

Presented in the following table are Consumers’ investments in jointly owned regulated utility facilities at December 31, 2025:

In Millions, Except Ownership Share
			J.H. Campbell Unit 3						Ludington						Other
Ownership share						93.3		%				51.0		%				various
Utility plant in service						$	1,726					$	620					$	481
Accumulated provision for depreciation						(916)						(253)						(97)
Plant under construction						—						37						17
Net investment						$	810					$	404					$	401

Consumers includes its share of the direct expenses of the jointly owned plants in operating expenses. Consumers shares operation, maintenance, and other expenses of these jointly owned utility facilities in proportion to each participant’s undivided ownership interest. Consumers is required to provide only its share of financing for the jointly owned utility facilities.

Consumers plans to retire J.H. Campbell and, in 2022, removed an amount representing the projected remaining book value of the electric generating units upon their retirement from total plant, property, and equipment and recorded it as a regulatory asset on its consolidated balance sheets. The retirement of J.H. Campbell is subject to temporary extensions under emergency orders issued by the U.S. Secretary of Energy. For additional details, see Note 3, Regulatory Matters.

Consumers and DTE Electric engaged in litigation with TAES and Toshiba related to TAES’ incomplete, defective, and nonconforming work during a major overhaul and upgrade of Ludington. For additional details on this dispute, see Note 4, Contingencies and Commitments—Ludington Overhaul Contract Dispute.

9: Leases

Lessee

CMS Energy and Consumers lease various assets from third parties, including coal-carrying railcars, real estate, service vehicles, and gas pipeline capacity. In addition, CMS Energy and Consumers account for several of their PPAs as leases.

CMS Energy and Consumers do not record right-of-use assets or lease liabilities on their consolidated balance sheets for rentals with lease terms of 12 months or less, most of which are for the lease of real estate and service vehicles. Lease expense for these rentals is recognized on a straight-line basis over the lease term.

CMS Energy and Consumers include future payments for all renewal options, fair market value extensions, and buyout provisions reasonably certain of exercise in their measurement of lease right-of-use assets and lease liabilities. In addition, certain leases for service vehicles contain end-of-lease adjustment clauses based on proceeds received from the sale or disposition of the vehicles. CMS Energy and Consumers also include executory costs in the measurement of their right-of-use assets and lease liabilities, except for maintenance costs related to their coal-carrying railcar leases.

Most of Consumers’ PPAs contain provisions at the end of the initial contract terms to renew the agreements annually under mutually agreed‑upon terms at the time of renewal. Energy and capacity payments that vary depending on quantities delivered are recognized as variable lease costs when incurred. Consumers accounts for a PPA with one of CMS Energy’s equity method subsidiaries as a finance lease.

Presented in the following table is information about CMS Energy’s and Consumers’ lease right-of-use assets and lease liabilities:

In Millions, Except as Noted
			CMS Energy, including Consumers															Consumers
December 31			2025						2024									2025						2024
Operating leases
Right-of-use assets1						$	22					$	24								$	18					$	20
Lease liabilities
Current lease liabilities2						3						3									3						3
Non-current lease liabilities3						19						21									15						17
Finance leases
Right-of-use assets						140						119									90						76
Lease liabilities4
Current lease liabilities						6						4									6						4
Non-current lease liabilities						135						112									81						69
Weighted-average remaining lease term (in years)
Operating leases						20						20									20						19
Finance leases						24						26									19						22
Weighted-average discount rate
Operating leases						5.3		%				5.3		%							5.4		%				5.4		%
Finance leases5						5.9		%				5.8		%							4.9		%				4.8		%

1CMS Energy’s and Consumers’ operating right-of-use lease assets are reported as other non‑current assets on their consolidated balance sheets.

2The current portion of CMS Energy’s and Consumers’ operating lease liabilities are reported as other current liabilities on their consolidated balance sheets.

3The non‑current portion of CMS Energy’s and Consumers’ operating lease liabilities are reported as other non‑current liabilities on their consolidated balance sheets.

4Includes related-party lease liabilities of $22 million, of which $1 million was current, at December 31, 2025 and 2024.

5This rate excludes the impact of Consumers’ pipeline agreements and long-term PPAs accounted for as finance leases. The required capacity payments under these agreements, when compared to the underlying fair value of the leased assets, result in effective interest rates that exceed market rates for leases with similar terms.

CMS Energy and Consumers report operating, variable, and short-term lease costs as operating expenses on their consolidated statements of income, except for certain amounts that may be capitalized to other assets. Presented in the following table is a summary of CMS Energy’s and Consumers’ total lease costs:

In Millions
Years Ended December 31			2025						2024
CMS Energy, including Consumers
Operating lease costs						$	4					$	6
Finance lease costs
Amortization of right-of-use assets						8						6
Interest on lease liabilities						18						16
Variable lease costs						115						107
Short-term lease costs						25						13
Total lease costs						$	170					$	148
Consumers
Operating lease costs						$	4					$	5
Finance lease costs
Amortization of right-of-use assets						6						5
Interest on lease liabilities						14						13
Variable lease costs						115						107
Short-term lease costs						24						12
Total lease costs						$	163					$	142

Presented in the following table is supplemental cash flow information related to CMS Energy’s and Consumers’ lease liabilities:

In Millions
Years Ended December 31			2025						2024
CMS Energy, including Consumers
Cash paid for amounts included in the measurement of lease liabilities
Cash used in operating activities for operating leases						$	4					$	6
Cash used in operating activities for finance leases						17						15
Cash used in financing activities for finance leases						5						6
Lease liabilities arising from obtaining right-of-use assets
Operating leases						1						3
Finance leases						22						55
Consumers
Cash paid for amounts included in the measurement of lease liabilities
Cash used in operating activities for operating leases						$	4					$	5
Cash used in operating activities for finance leases						14						13
Cash used in financing activities for finance leases						6						5
Lease liabilities arising from obtaining right-of-use assets
Operating leases						1						1
Finance leases						22						34

Presented in the following table are the minimum rental commitments under CMS Energy’s and Consumers’ non‑cancelable leases:

In Millions
									Finance Leases
December 31, 2025			Operating Leases						Pipelines and PPAs						Land and Other						Total
CMS Energy, including Consumers
2026						$	4					$	17					$	6					$	23
2027						2						17						6						23
2028						2						17						5						22
2029						2						17						6						23
2030						1						17						6						23
2031 and thereafter						27						2						200						202
Total minimum lease payments						$	38					$	87					$	229					$	316
Less discount						16						42						133						175
Present value of minimum lease payments						$	22					$	45					$	96					$	141
Consumers
2026						$	4					$	17					$	3					$	20
2027						2						17						3						20
2028						1						17						2						19
2029						1						17						2						19
2030						1						17						2						19
2031 and thereafter						22						2						72						74
Total minimum lease payments						$	31					$	87					$	84					$	171
Less discount						13						42						42						84
Present value of minimum lease payments						$	18					$	45					$	42					$	87

Lessor

CMS Energy and Consumers are the lessor under power sales and natural gas delivery agreements that are accounted for as leases.

CMS Energy has power sales agreements that are accounted for as operating leases. In addition to fixed payments, these agreements have variable payments based on energy delivered. For the year ended December 31, 2025, lease revenue from these power sales agreements was $149 million, which included variable lease payments of $105 million. For the year ended December 31, 2024, lease revenue from these power sales agreements was $105 million, which included variable lease payments of $61 million. These non-cancelable operating leases expire in 2026; remaining minimum rental payments amount to $18 million.

Consumers has a natural gas transportation agreement with a subsidiary of CMS Energy that extends through 2038, related to a pipeline owned by Consumers. This agreement is accounted for as a direct finance lease and will automatically extend annually unless terminated by either party. The effects of the lease are eliminated on CMS Energy’s consolidated financial statements.

Minimum rental payments to be received under Consumers’ direct financing lease are $1 million for each of the next five years and $6 million for the years thereafter. The lease receivable was $5 million as of December 31, 2025, which does not include unearned income of $5 million.

10: Asset Retirement Obligations

CMS Energy and Consumers record the fair value of the cost to remove assets at the end of their useful lives, if there is a legal obligation to remove them. If a reasonable estimate of fair value cannot be made in the period in which the ARO is incurred, such as for assets with indeterminate lives, the liability is recognized when a reasonable estimate of fair value can be made. CMS Energy and Consumers have not recorded liabilities associated with the closure of their hydroelectric facilities and certain gas wells that have an indeterminate life or for assets that have immaterial cumulative disposal costs, such as substation batteries.

CMS Energy and Consumers calculate the fair value of ARO liabilities using an expected present-value technique that reflects assumptions about costs and inflation, and uses a credit-adjusted risk-free rate to discount the expected cash flows. CMS Energy’s ARO liabilities are primarily at Consumers.

Presented below are the categories of assets that CMS Energy and Consumers have legal obligations to remove at the end of their useful lives and for which they have an ARO liability recorded:

ARO Description			Long-lived Assets
Closure of coal ash disposal areas			Generating plants coal ash areas
Gas distribution cut, purge, and cap			Gas distribution mains and services
Asbestos abatement			Electric and gas utility plant
Closure of renewable generation assets			Wind and solar generation facilities
Capping and partial filling of water intake line			Generating plant water intake line
Gas wells plug and abandon			Gas transmission and storage

In May 2024, the EPA finalized a rule regulating CCR impoundments at electric generating facilities that became inactive prior to the effective date of a rule published in 2015 regulating CCRs under RCRA. Additionally, the EPA established groundwater monitoring, corrective action, closure, and post-closure care requirements for CCR surface impoundments and landfills closed prior to the effective date of the 2015 CCR rule, but that do not meet the closure technical and performance standards of the May 2024 rule. These include inactive CCR landfills that were previously exempted from regulation but that are now considered CCR management units.

In response to the new rule, Consumers has been performing its review of legacy impoundments and of other aspects of the 2024 rule in accordance with the timelines prescribed by the rule, including the requirement to determine and report the presence of any CCR management units to the EPA by February 2027. Consumers has been recording incremental AROs for legacy impoundments and CCR management units when a reasonable estimate of the fair value of the associated costs can be made, and the ultimate amount of any resulting ARO could be material. In February 2026, the EPA issued a final rule extending the compliance milestone schedule for CCR management units. This extension does not have a material impact on Consumers’ compliance strategy. Consumers has historically been authorized to recover in electric rates costs related to coal ash disposal sites.

Presented in the following tables are the changes in CMS Energy’s and Consumers’ ARO liabilities:

In Millions
Company and ARO Description			ARO Liability 12/31/2024						Incurred						Settled						Accretion						Cash Flow Revisions						ARO Liability 12/31/2025
CMS Energy, including Consumers
Consumers						$	694					$	27					$	(73)					$	32					$	73					$	753
Renewable generation assets						34						4						—						1						—						39
Total CMS Energy						$	728					$	31					$	(73)					$	33					$	73					$	792
Consumers
Coal ash disposal areas						$	230					$	—					$	(37)					$	10					$	60		1			$	263
Gas distribution cut, purge, and cap						295						10						(13)						15						—						307
Asbestos abatement						37						—						(2)						2						—						37
Renewable generation assets						105						17						—						3						—						125
Generating plant water intake line						—						—						—						1						18			2			19
Gas wells plug and abandon						27						—						(21)						1						(5)						2
Total Consumers						$	694					$	27					$	(73)					$	32					$	73					$	753

1 The increase in the AROs associated with coal ash disposal areas was primarily the result of incremental remedies required by EGLE for certain ash disposal ponds and incremental AROs recorded in response to reviews of legacy CCR impoundments.

2 The increase in AROs associated with water intake lines, which were previously immaterial, was primarily the result of changes in the expected scope of required capping following the finalization of decommissioning plans with the local jurisdiction.

In Millions
Company and ARO Description			ARO Liability 12/31/2023						Incurred						Settled						Accretion						Cash Flow Revisions						ARO Liability 12/31/2024
CMS Energy, including Consumers
Consumers						$	739					$	1					$	(69)					$	33					$	(10)					$	694
Renewable generation assets						32						—						—						2						—						34
Total CMS Energy						$	771					$	1					$	(69)					$	35					$	(10)					$	728
Consumers
Coal ash disposal areas						$	268					$	1					$	(51)					$	12					$	—					$	230
Gas distribution cut, purge, and cap						290						—						(9)						15						(1)						295
Asbestos abatement						51						—						(7)						2						(9)						37
Renewable generation assets						102						—						—						3						—						105
Gas wells plug and abandon						28						—						(2)						1						—						27
Total Consumers						$	739					$	1					$	(69)					$	33					$	(10)					$	694

11: Retirement Benefits

Benefit Plans: CMS Energy and Consumers provide pension, OPEB, and other retirement benefits to eligible employees under a number of different plans. These plans include:

• non‑contributory, qualified DB Pension Plans (closed to new non‑union participants as of July 1, 2003 and closed to new union participants as of September 1, 2005)

• a non‑contributory, qualified DCCP for employees hired on or after July 1, 2003

• benefits to certain management employees under a non‑contributory, nonqualified DB SERP (closed to new participants as of March 31, 2006)

• a non‑contributory, nonqualified DC SERP for certain management employees hired or promoted on or after April 1, 2006

• a contributory, qualified defined contribution 401(k) plan

• health care and life insurance benefits under an OPEB Plan

DB Pension Plans: Participants in the pension plans include present and former employees of CMS Energy and Consumers, including certain present and former affiliates and subsidiaries. Pension plan trust assets are not distinguishable by company. Effective December 31, 2017, CMS Energy’s and Consumers’ then-existing pension plan was amended to include only retired and former employees already covered; this amended plan is referred to as DB Pension Plan B. Also effective December 31, 2017, active employees were moved to a newly created pension plan, referred to as DB Pension Plan A, whose benefits mirror those provided under DB Pension Plan B. Maintaining separate plans for the two groups allows CMS Energy and Consumers to employ a more targeted investment strategy and provides additional opportunities to mitigate risk and volatility.

DCCP: CMS Energy and Consumers provide an employer contribution to the DCCP 401(k) plan for employees hired on or after July 1, 2003. The contribution ranges from 5 percent to 10 percent of base pay, depending on years of service and employee class. Employees are not required to contribute in order to receive the plan’s employer contribution. DCCP expense for CMS Energy, including Consumers, was $57 million for the year ended December 31, 2025, $53 million for the year ended December 31, 2024, and $51 million for the year ended December 31, 2023. DCCP expense for Consumers was $55 million for the year ended December 31, 2025, $52 million for the year ended December 31, 2024, and $50 million for the year ended December 31, 2023.

DB SERP: The DB SERP is a nonqualified plan as defined by the Internal Revenue Code. DB SERP benefits are paid from a rabbi trust. The trust assets are not considered plan assets under ASC 715. DB SERP rabbi trust earnings are taxable. Presented in the following table are the fair values of trust assets and ABO for CMS Energy’s and Consumers’ DB SERP:

In Millions
Years Ended December 31			2025						2024
CMS Energy, including Consumers
Trust assets						$	122					$	127
ABO						104						105
Consumers
Trust assets						$	92					$	95
ABO						76						76

Neither CMS Energy nor Consumers made any contributions to the DB SERP in 2025 or 2024.

DC SERP: On April 1, 2006, CMS Energy and Consumers implemented a DC SERP and froze further new participation in the DB SERP. The DC SERP provides participants benefits ranging from 5 percent to 15 percent of total compensation. The DC SERP requires a minimum of five years of participation before vesting. CMS Energy’s and Consumers’ contributions to the plan, if any, are placed in a grantor trust. For CMS Energy and Consumers, trust assets were $18 million at December 31, 2025 and $17 million at December 31, 2024. DC SERP assets are included in other non‑current assets on CMS Energy’s and Consumers’ consolidated balance sheets. CMS Energy’s and Consumers’ DC SERP expense was $1 million for the years ended December 31, 2025, 2024, and 2023.

401(k) Plan: The 401(k) plan employer match equals 4 to 6 percent of employee eligible contributions based on an employee’s wages and class. The total 401(k) plan cost for CMS Energy, including Consumers, was $46 million for the year ended December 31, 2025, and $41 million for the years ended December 31, 2024 and 2023. The total 401(k) plan cost for Consumers was $44 million for the year ended December 31, 2025, $39 million for the year ended December 31, 2024, and $40 million for the year ended December 31, 2023.

Health-related OPEB Plan: Participants in the health-related OPEB Plan include regular full-time employees covered by the employee health care plan on the day before retirement from either CMS Energy or Consumers at age 55 or older with at least ten full years of applicable continuous service and hired before January 1, 2007 for non-union participants and hired before September 1, 2010 for union participants. Regular full-time employees who qualify for disability retirement under the DB Pension Plans or are disabled and covered by the DCCP and who have 15 years of applicable continuous service may also participate in the health-related OPEB Plan if hired before January 1, 2007 for non-union participants and hired before September 1, 2010 for union participants. Retiree health care costs were based on the assumption that costs would increase 8.00 percent in 2026 and 8.50 percent in 2025 for those under 65 and would increase 9.75 percent in 2026 and 10.25 percent in 2025 for those over 65. The rate of increase was assumed to decline to 4.75 percent by 2034 and thereafter for all retirees.

Assumptions: Presented in the following table are the weighted-average assumptions used in CMS Energy’s, including Consumers’, retirement benefit plans to determine benefit obligations and net periodic benefit cost:

December 31			2025			2024			2023
Weighted average for benefit obligations1
Discount rate2
DB Pension Plan A			5.58		%	5.73		%	5.05		%
DB Pension Plan B			5.28			5.59			4.95
DB SERP			5.22			5.56			4.94
OPEB Plan			5.50			5.69			5.02
Rate of compensation increase
DB Pension Plan A			3.70			3.70			3.60
Weighted average for net periodic benefit cost1
Service cost discount rate2,3
DB Pension Plan A			5.77		%	5.08		%	5.27		%
DB SERP4			—			—			5.18
OPEB Plan			5.85			5.12			5.31
Interest cost discount rate2,3
DB Pension Plan A			5.43			4.93			5.12
DB Pension Plan B			5.30			4.87			5.06
DB SERP			5.29			4.87			5.06
OPEB Plan			5.39			4.91			5.10
Expected long-term rate of return on plan assets5
DB Pension Plans			7.30			7.50			7.20
OPEB Plan			7.15			7.50			7.20
Rate of compensation increase
DB Pension Plan A			3.70			3.60			3.60
DB SERP4			—			—			5.50

1The mortality assumption for benefit obligations and net periodic benefit cost was based on the Pri-2012 Mortality Table, with improvement scale MP-2021.

2The discount rate reflects the rate at which benefits could be effectively settled and is equal to the equivalent single rate resulting from a yield-curve analysis. This analysis incorporated the projected benefit payments specific to CMS Energy’s and Consumers’ DB Pension Plans and OPEB Plan and the yields on high-quality corporate bonds rated Aa or better.

3CMS Energy and Consumers have elected to use a full-yield-curve approach in the estimation of service cost and interest cost; this approach applies individual spot rates along the yield curve to future projected benefit payments based on the time of payment.

4The last active participant in the DB SERP retired in 2023. Thus, the determination of the associated net periodic benefit cost no longer assumes a service cost discount rate nor a rate of compensation increase.

5CMS Energy and Consumers determined the long-term rate of return using historical market returns, the present and expected future economic environment, the capital market principles of risk and return, and the expert opinions of individuals and firms with financial market knowledge. CMS Energy and Consumers considered the asset allocation of the portfolio in forecasting the future expected total return of the portfolio. The goal was to determine a long-term rate of return that could be incorporated into the planning

of future cash flow requirements in conjunction with the change in the liability. Annually, CMS Energy and Consumers review for reasonableness and appropriateness the forecasted returns for various classes of assets used to construct an expected return model. CMS Energy’s and Consumers’ expected long-term rate of return on the assets of the DB Pension Plans was 7.30 percent in 2025. The actual return on the assets of the DB Pension Plans was 12.7 percent in 2025, 3.6 percent in 2024, and 12.6 percent in 2023.

Costs: Presented in the following table are the costs (credits) and other changes in plan assets and benefit obligations incurred in CMS Energy’s and Consumers’ retirement benefit plans:

In Millions
																		DB Pension Plans and DB SERP																																				OPEB Plan
Years Ended December 31												2025						2024						2023																		2025						2024						2023
CMS Energy, including Consumers
Net periodic credit
Service cost																					$	25					$	28					$	29																							$	8					$	11					$	12
Interest cost																					114						109						112																								43						43						44
Expected return on plan assets																					(229)						(234)						(220)																								(111)						(115)						(103)
Amortization of:
Net loss																					11						12						12																								3						4						12
Prior service cost (credit)																					4						4						4																								(34)						(31)						(41)
Settlement loss																					11						11						11																								—						—						—
Net periodic credit																					$	(64)					$	(70)					$	(52)																							$	(91)					$	(88)					$	(76)
Consumers
Net periodic credit
Service cost																					$	24					$	27					$	28																							$	8					$	11					$	11
Interest cost																					106						102						105																								42						41						42
Expected return on plan assets																					(215)						(221)						(208)																								(104)						(107)						(95)
Amortization of:
Net loss																					10						11						11																								3						4						12
Prior service cost (credit)																					4						4						4																								(33)						(30)						(40)
Settlement loss																					11						11						11																								—						—						—
Net periodic credit																					$	(60)					$	(66)					$	(49)																							$	(84)					$	(81)					$	(70)

In Consumers’ electric and gas rate cases, the MPSC approved a mechanism allowing Consumers to defer for future recovery or refund pension and OPEB expenses above or below the amounts used to set existing rates. Amounts deferred will be collected from or refunded to customers over ten years. At December 31, 2025, CMS Energy, including Consumers, had deferred $3 million of pension costs and $6 million of OPEB credits under this mechanism related to 2025 expense. At December 31, 2024, CMS Energy, including Consumers, had deferred $15 million of pension credits and $11 million of OPEB credits under this mechanism related to 2024 expense. At December 31, 2023, CMS Energy, including Consumers, had deferred $11 million of pension credits and $23 million of OPEB costs under this mechanism related to 2023 expense.

CMS Energy and Consumers amortize net gains and losses in excess of 10 percent of the greater of the PBO or the MRV over the average remaining service period for DB Pension Plan A and the OPEB Plan and over the average remaining life expectancy of participants for DB Pension Plan B. For DB Pension Plan A, the estimated period of amortization of gains and losses was seven years for the year ended December 31, 2025, and eight years for the years ended December 31, 2024 and 2023. For DB Pension Plan B, the estimated period of amortization of gains and losses was 17 years for the years ended

December 31, 2025, 2024, and 2023. For the OPEB Plan, the estimated amortization period was nine years for the years ended December 31, 2025, 2024, and 2023.

Prior service cost (credit) amortization is established in the year in which the prior service cost (credit) first occurred, and is based on the same amortization period for all future years until the prior service cost (credit) is fully amortized. CMS Energy and Consumers had new prior service costs for OPEB in 2024. The estimated period of amortization of these new prior service costs is seven years.

CMS Energy and Consumers determine the MRV for the assets of the DB Pension Plans as the fair value of plan assets on the measurement date, adjusted by the gains or losses that will not be admitted into the MRV until future years. CMS Energy and Consumers reflect each year’s gain or loss in the MRV in equal amounts over a five‑year period beginning on the date the original amount was determined. CMS Energy and Consumers determine the MRV for OPEB Plan assets as the fair value of assets on the measurement date.

Reconciliations: Presented in the following table are reconciliations of the funded status of CMS Energy’s and Consumers’ retirement benefit plans with their retirement benefit plans’ liabilities:

In Millions
			DB Pension Plans															DB SERP															OPEB Plan
Years Ended December 31			2025						2024									2025						2024									2025						2024
CMS Energy, including Consumers
Benefit obligation at beginning of period						$	2,094					$	2,195								$	105					$	114								$	831					$	900
Service cost						25						28									—						—									8						11
Interest cost						109						104									5						5									43						43
Plan amendments						—						—									—						—									—						(25)
Actuarial loss (gain)						53			1			(91)			1						4						(4)									2			1			(40)			1
Benefits paid						(158)						(142)									(10)						(10)									(54)						(58)
Benefit obligation at end of period						$	2,123					$	2,094								$	104					$	105								$	830					$	831
Plan assets at fair value at beginning of period						$	2,964					$	3,004								$	—					$	—								$	1,588					$	1,559
Actual return on plan assets						371						102									—						—									197						86
Company contribution						—						—									10						10									—						—
Actual benefits paid						(158)						(142)									(10)						(10)									(52)						(57)
Plan assets at fair value at end of period						$	3,177					$	2,964								$	—					$	—								$	1,733					$	1,588
Funded status						$	1,054		2			$	870		2						$	(104)					$	(105)								$	903					$	757
Consumers
Benefit obligation at beginning of period																					$	76					$	83								$	801					$	867
Service cost																					—						—									8						11
Interest cost																					4						4									42						41
Plan amendments																					—						—									—						(24)
Actuarial loss (gain)																					3						(4)									1			1			(38)			1
Benefits paid																					(7)						(7)									(51)						(56)
Benefit obligation at end of period																					$	76					$	76								$	801					$	801
Plan assets at fair value at beginning of period																					$	—					$	—								$	1,479					$	1,453
Actual return on plan assets																					—						—									184						80
Company contribution																					7						7									—						—
Actual benefits paid																					(7)						(7)									(50)						(54)
Plan assets at fair value at end of period																					$	—					$	—								$	1,613					$	1,479
Funded status																					$	(76)					$	(76)								$	812					$	678

1The actuarial losses for 2025 for the DB Pension Plans and OPEB Plans were primarily the result of lower discount rates. The actuarial gains for 2024 for the DB Pension Plans and OPEB Plan were primarily the result of higher discount rates.

2The total funded status of the DB Pension Plans attributable to Consumers, based on an allocation of expenses, was $1.0 billion at December 31, 2025 and $836 million at December 31, 2024.

Presented in the following table is the classification of CMS Energy’s and Consumers’ retirement benefit plans’ assets and liabilities:

In Millions
December 31			2025						2024
CMS Energy, including Consumers
Non-current assets
DB Pension Plans						$	1,054					$	870
OPEB Plan						903						757
Current liabilities
DB SERP						10						10
Non-current liabilities
DB SERP						94						95
Consumers
Non-current assets
DB Pension Plans						$	1,009					$	836
OPEB Plan						812						678
Current liabilities
DB SERP						7						7
Non-current liabilities
DB SERP						69						69

The ABO for the DB Pension Plans was $1.9 billion at December 31, 2025 and $1.9 billion at December 31, 2024. At December 31, 2025 and 2024, the PBO and ABO did not exceed plan assets for any of the defined benefit pension plans.

Items Not Yet Recognized as a Component of Net Periodic Benefit Cost: Presented in the following table are the amounts recognized in regulatory assets and AOCI that have not been recognized as components of net periodic benefit cost. For additional details on regulatory assets see Note 3, Regulatory Matters.

In Millions
			DB Pension Plans and DB SERP															OPEB Plan
December 31			2025						2024									2025						2024
CMS Energy, including Consumers
Regulatory assets
Net loss						$	548					$	653								$	93					$	176
Prior service cost (credit)						9						12									(61)						(94)
Regulatory assets						$	557					$	665								$	32					$	82
AOCI
Net loss (gain)						57						60									(7)						(3)
Prior service credit						—						—									(2)						(2)
Total amounts recognized in regulatory assets and AOCI						$	614					$	725								$	23					$	77
Consumers
Regulatory assets
Net loss						$	548					$	653								$	93					$	176
Prior service cost (credit)						9						12									(61)						(94)
Regulatory assets						$	557					$	665								$	32					$	82
AOCI
Net loss						18						15									—						—
Total amounts recognized in regulatory assets and AOCI						$	575					$	680								$	32					$	82

Plan Assets: Presented in the following tables are the fair values of the assets of CMS Energy’s, including Consumers’, DB Pension Plans and OPEB Plan, by asset category and by level within the fair value hierarchy. For additional details regarding the fair value hierarchy, see Note 6, Fair Value Measurements.

In Millions
			DB Pension Plans
			December 31, 2025																					December 31, 2024
			Total						Level 1						Level 2									Total						Level 1						Level 2
Cash and short-term investments						$	162					$	162					$	—								$	148					$	148					$	—
Mutual funds						—						—						—									—						—						—
						$	162					$	162					$	—								$	148					$	148					$	—
Pooled funds						3,015																					2,816
Total						$	3,177																				$	2,964

In Millions
			OPEB Plan
			December 31, 2025																					December 31, 2024
			Total						Level 1						Level 2									Total						Level 1						Level 2
Cash and short-term investments						$	72					$	72					$	—								$	35					$	35					$	—
U.S. government and agencies securities						15						—						15									13						—						13
Corporate debt						69						—						69									68						—						68
State and municipal bonds						4						—						4									2						—						2
Foreign bonds						16						—						16									15						—						15
Common stocks						215						215						—									170						170						—
Mutual funds						75						75						—									53						53						—
						$	466					$	362					$	104								$	356					$	258					$	98
Pooled funds						1,267																					1,232
Total						$	1,733																				$	1,588

Cash and Short-term Investments: Cash and short-term investments consist of money market funds with daily liquidity.

U.S. Government and Agencies Securities: U.S. government and agencies securities consist of U.S. Treasury notes and other debt securities backed by the U.S. government and related agencies. These securities are valued based on quoted market prices.

Corporate Debt: Corporate debt investments consist of investment grade bonds of U.S. issuers from diverse industries. These securities are valued based on quoted market prices, when available, or yields available on comparable securities of issuers with similar credit ratings.

State and Municipal Bonds: State and municipal bonds are valued using a matrix-pricing model that incorporates Level 2 market-based information. The fair value of the bonds is derived from various observable inputs, including benchmark yields, reported securities trades, broker/dealer quotes, bond ratings, and general information on market movements for investment grade state and municipal securities normally considered by market participants when pricing such debt securities.

Foreign Bonds: Foreign corporate and government debt securities are valued based on quoted market prices, when available, or on yields available on comparable securities of issuers with similar credit ratings.

Common Stocks: Common stocks in the OPEB Plan consist of equity securities that are actively managed and tracked to the S&P 500 Index and MSCI All Country World ex‑US. These securities are valued at their quoted closing prices.

Mutual Funds: Mutual funds represent shares in registered investment companies that are priced based on the daily quoted net asset values that are publicly available and are the basis for transactions to buy or sell shares in the funds.

Pooled Funds: Pooled funds include both common and collective trust funds as well as special funds that contain only employee benefit plan assets from two or more unrelated benefit plans. These funds primarily consist of U.S. and foreign equity securities, but also include U.S. and foreign fixed-income securities and multi-asset investments. Since these investments are valued at their net asset value as a practical expedient, they are not classified in the fair value hierarchy.

Asset Allocations: Presented in the following table are the investment components of the assets of CMS Energy’s DB Pension Plans and OPEB Plan as of December 31, 2025:

			DB Pension Plans						OPEB Plan
Fixed-income securities						39.2		%				37.6		%
Equity securities						38.7						42.4
Real asset investments						9.3						8.8
Return-seeking fixed income						7.1						5.6
Liquid alternative investments						4.3						3.7
Cash and cash equivalents						1.4						1.9
						100.0		%				100.0		%

CMS Energy’s target 2025 asset allocation for the assets of the DB Pension Plans was 40‑percent fixed income, 38‑percent equity, 11‑percent real assets, 7‑percent return-seeking fixed income, and 4‑percent liquid alternatives.

CMS Energy established union and non‑union VEBA trusts to fund future retiree health and life insurance benefits known as OPEB. These trusts are funded through the ratemaking process for Consumers and through direct contributions from the non‑utility subsidiaries. CMS Energy’s target 2025 asset allocation for OPEB trusts was 40‑percent fixed income, 38‑percent equity, 11‑percent real assets, 7‑percent return-seeking fixed income, and 4‑percent liquid alternatives.

The goal of these target allocations was to maximize the long-term return on plan assets, while maintaining a prudent level of risk. The level of acceptable risk is a function of the liabilities of the plans. Equity investments are diversified mostly across the S&P 500 Index, with lesser allocations to the S&P MidCap and SmallCap Indexes and Foreign Equity Funds. Fixed-income investments are diversified across investment grade instruments of government and corporate issuers, as well as high-yield and global bond funds. Return-seeking fixed-income investments are diversified exposure to high-yield bonds, emerging market debt, and bank loans. Real asset investments are diversified across core real estate and real estate investment trusts. Liquid alternatives are investments in private funds comprised of different and independent hedge funds with various investment strategies. CMS Energy uses annual liability measurements, quarterly portfolio reviews, and periodic asset/liability studies to evaluate the need for adjustments to the portfolio allocations.

Contributions: Contributions comprise required amounts and discretionary contributions. Neither CMS Energy nor Consumers made any contributions in 2025 or 2024, or plans to contribute to the DB Pension Plans or OPEB Plan in 2026. Actual future contributions will depend on future investment performance, discount rates, and various factors related to the participants of the DB Pension Plans and OPEB Plan. CMS Energy and Consumers will, at a minimum, contribute to the plans as needed to comply with federal funding requirements.

Benefit Payments: Presented in the following table are the expected benefit payments for each of the next five years and the five‑year period thereafter:

In Millions
			DB Pension Plans						DB SERP						OPEB Plan
CMS Energy, including Consumers
2026						$	164					$	10					$	59
2027						165						10						61
2028						164						10						62
2029						164						9						62
2030						164						9						62
2031-2035						801						41						305
Consumers
2026						$	154					$	7					$	57
2027						155						7						58
2028						154						7						59
2029						155						6						59
2030						154						6						60
2031-2035						756						29						292

Collective Bargaining Agreements: At December 31, 2025, unions represented 44 percent of CMS Energy’s employees and 45 percent of Consumers’ employees. The UWUA represents Consumers’ and NorthStar Clean Energy’s operating, maintenance, construction employees and Consumers’ customer contact center employees. The USW represents Consumers’ Zeeland plant employees. Consumers’ union agreements expire in 2030 and the majority of NorthStar Clean Energy’s represented employees have an agreement that expires in 2029.

12: Stock-based Compensation

CMS Energy and Consumers provide a PISP to officers, employees, and non‑employee directors based on their contributions to the successful management of the company. The PISP has a ten‑year term, expiring in May 2030.

In 2025, all awards were in the form of restricted stock or restricted stock units. The PISP also allows for unrestricted common stock, stock options, stock appreciation rights, phantom shares, performance units, and incentive options, none of which was granted in 2025, 2024, or 2023.

Shares awarded or subject to stock options, phantom shares, or performance units may not exceed 6.5 million shares from June 2020 through May 2030. CMS Energy and Consumers may issue awards of up to 3,965,601 shares of common stock under the PISP as of December 31, 2025. Shares for which payment or exercise is in cash, as well as shares that expire, terminate, or are canceled or forfeited, may be awarded or granted again under the PISP.

All awards under the PISP vest fully upon death. Upon a change of control of CMS Energy or termination under an officer separation agreement, the awards will vest in accordance with specific officer agreements. If stated in the award, for restricted stock recipients who terminate employment due to retirement or disability, a pro-rata portion of the award will vest upon termination, with any market-based award also contingent upon the outcome of the market condition and any performance-based award contingent upon the outcome of the performance condition. The pro-rata portion is equal to the portion of the service period served between the award grant date and the employee’s termination date. The remaining portion of the awards will be forfeited. All awards for directors vest fully upon retirement. Restricted shares may be forfeited if employment terminates for any other reason or if the minimum service requirements are not met, as described in the award document.

Restricted Stock Awards: Restricted stock awards for employees under the PISP are in the form of performance-based, market-based, and time-lapse restricted stock. Award recipients receive shares of CMS Energy common stock that have dividend and voting rights. The dividends on time-lapse restricted stock are paid in cash or in CMS Energy common stock. The dividends on performance-based and market-based restricted stock are paid in restricted shares equal to the value of the dividends. These additional restricted shares are subject to the same vesting conditions as the underlying restricted stock shares.

Performance-based restricted stock vesting is contingent on meeting at least a 36‑month service requirement and a performance condition. The performance condition is based on an adjusted measure of CMS Energy’s EPS growth relative to a peer group over a three‑year period. The awards granted in 2025, 2024, and 2023 require a 38‑month service period. Market-based restricted stock vesting is generally contingent on meeting a three‑year service requirement and a market condition. The market condition is based on a comparison of CMS Energy’s total shareholder return with the median total shareholder return of a peer group over the same three‑year period. Depending on the outcome of the performance condition or the market condition, a recipient may earn a total award ranging from zero to 200 percent of the initial grant. Time-lapse restricted stock generally vests after a service period of three years.

Restricted Stock Units: In 2025, 2024, and 2023, CMS Energy and Consumers granted restricted stock units to certain non‑employee directors who elected to defer their restricted stock awards. The restricted stock units generally vest after a service period of one year or, if earlier, at the next annual meeting. The restricted stock units will be distributed to the recipients as shares in accordance with the directors’ deferral agreements. Restricted stock units do not have voting rights, but do have dividend rights. In lieu of cash dividend payments, the dividends on restricted stock units are paid in additional units equal to the value of the dividends. These additional restricted stock units are subject to the same vesting and

distribution conditions as the underlying restricted stock units. No restricted stock units were forfeited during 2025.

Presented in the following tables is the activity for restricted stock and restricted stock units under the PISP:

			CMS Energy, including Consumers												Consumers
Year Ended December 31, 2025			Number of Shares			Weighted-average Grant Date Fair Value Per Share									Number of Shares			Weighted-average Grant Date Fair Value Per Share
Nonvested at beginning of period			1,162,787						$	59.34					1,081,573						$	59.35
Granted
Restricted stock			523,663						50.19						480,258						49.86
Restricted stock units			18,491						56.80						17,713						56.80
Vested
Restricted stock			(450,699)						46.30						(424,830)						46.33
Restricted stock units			(27,035)						51.79						(25,994)						51.82
Forfeited – restricted stock			(38,364)						60.19						(36,119)						60.01
Nonvested at end of period			1,188,843						$	60.36					1,092,601						$	60.36

Year Ended December 31, 2025			CMS Energy, including Consumers			Consumers
Granted
Time-lapse awards			118,842			109,242
Market-based awards			139,248			126,302
Performance-based awards			147,982			134,540
Restricted stock units			14,406			13,800
Dividends on market-based awards			13,484			12,472
Dividends on performance-based awards			14,458			13,389
Dividends on restricted stock units			4,085			3,913
Additional market-based shares based on achievement of condition			5,982			5,624
Additional performance-based shares based on achievement of condition			83,667			78,689
Total granted			542,154			497,971

CMS Energy and Consumers charge the fair value of the restricted stock awards to expense over the required service period and charge the fair value of the restricted stock units to expense immediately. For performance-based awards, CMS Energy and Consumers estimate the number of shares expected to vest at the end of the performance period based on the probable achievement of the performance objective. Performance-based and market-based restricted stock awards have graded vesting features for retirement-eligible employees, and CMS Energy and Consumers recognize expense for those awards on a graded vesting schedule over the required service period. Expense for performance-based and market-based restricted stock awards for non‑retirement-eligible employees and time-lapse awards is recognized on a straight-line basis over the required service period.

The fair value of performance-based and time-lapse restricted stock and restricted stock units is based on the price of CMS Energy’s common stock on the grant date. The fair value of market-based restricted stock awards is calculated on the grant date using a Monte Carlo simulation. CMS Energy and Consumers

base expected volatilities on the historical volatility of the price of CMS Energy common stock. The risk‑free rate for valuation of the market-based restricted stock awards was based on the three‑year U.S. Treasury yield at the award grant date.

Presented in the following table are the most significant assumptions used to estimate the fair value of the market-based restricted stock awards:

Years Ended December 31			2025			2024			2023
Expected volatility			20.7		%	20.2		%	30.3		%
Expected dividend yield			3.1			3.5			2.9
Risk-free rate			4.2			4.1			3.9

Presented in the following table is the weighted-average grant-date fair value of all awards under the PISP:

In Millions
Years Ended December 31			2025						2024						2023
CMS Energy, including Consumers
Weighted-average grant-date fair value per share
Restricted stock granted						$	50.19					$	44.76					$	52.62
Restricted stock units granted						56.80						52.43						50.32
Consumers
Weighted-average grant-date fair value per share
Restricted stock granted						$	49.86					$	44.49					$	52.42
Restricted stock units granted						56.80						52.46						50.34

Presented in the following table are amounts related to restricted stock awards and restricted stock units:

In Millions
Years Ended December 31			2025						2024						2023
CMS Energy, including Consumers
Fair value of shares that vested during the year						$	33					$	28					$	20
Compensation expense recognized						25						27						28
Income tax benefit recognized						2						3						3
Consumers
Fair value of shares that vested during the year						$	32					$	27					$	19
Compensation expense recognized						23						25						26
Income tax benefit recognized						2						3						2

At December 31, 2025, $28 million of total unrecognized compensation cost was related to restricted stock for CMS Energy, including Consumers, and $26 million of total unrecognized compensation cost was related to restricted stock for Consumers. CMS Energy and Consumers expect to recognize this cost over a weighted-average period of two years.

13: Income Taxes

CMS Energy and its subsidiaries file a consolidated U.S. federal income tax return as well as a Michigan Corporate Income Tax return for the unitary business group and various other state unitary group combined income tax returns. Income taxes are allocated based on each company’s separate taxable income in accordance with the CMS Energy tax sharing agreement.

Presented in the following table is the difference between actual income tax expense on continuing operations and income tax expense computed by applying the statutory U.S. federal income tax rate:

In Millions, Except Tax Rate
															Amount									Percent									Amount									Percent									Amount									Percent
Years Ended December 31												2025																		2024																		2023
CMS Energy, including Consumers
Income from continuing operations before income taxes																					$	1,248																	$	1,123																	$	954
Income tax expense at statutory rate																					262									21.0		%							236									21.0		%							200									21.0		%
Increase (decrease) in income taxes from:
State and local income taxes, net of federal income tax effect1																					77									6.2									58									5.1									40									4.2
Tax credits
Renewable energy tax credits																					(68)									(5.4)									(71)									(6.4)									(55)									(5.8)
Other																					(6)									(0.5)									(6)									(0.5)									(7)									(0.7)
Nontaxable or nondeductible items																					3									0.2									4									0.4									3									0.3
Changes in unrecognized tax benefits																					9									0.7									2									0.2									(11)									(1.2)
Other adjustments
TCJA excess deferred taxes																					(42)									(3.4)									(43)									(3.8)									(40)									(4.2)
Deferred tax adjustment2																					—									—									(16)									(1.4)									—									—
Taxes attributable to noncontrolling interests																					15									1.2									12									1.1									17									1.8
Other, net																					(4)									(0.3)									—									—									—									—
Income tax expense																					$	246																	$	176																	$	147
Effective tax rate																														19.7		%																15.7		%																15.4		%

In Millions, Except Tax Rate
															Amount									Percent									Amount									Percent									Amount									Percent
Years Ended December 31												2025																		2024																		2023
Consumers
Income from continuing operations before income taxes																					$	1,417																	$	1,209																	$	1,028
Income tax expense at statutory rate																					298									21.0		%							254									21.0		%							216									21.0		%
Increase (decrease) in income taxes from:
State and local income taxes, net of federal income tax effect1																					80									5.7									60									5.0									47									4.6
Tax credits
Renewable energy tax credits																					(46)									(3.2)									(51)									(4.2)									(43)									(4.2)
Other																					(6)									(0.4)									(6)									(0.5)									(7)									(0.7)
Nontaxable or nondeductible items																					3									0.2									3									0.2									3									0.3
Changes in unrecognized tax benefits																					9									0.6									1									0.1									(12)									(1.2)
Other adjustments
TCJA excess deferred taxes																					(42)									(3.0)									(43)									(3.6)									(40)									(3.9)
Deferred tax adjustment2																					—									—									(16)									(1.3)									—									—
Other, net																					(8)									(0.6)									(2)									(0.2)									(3)									(0.2)
Income tax expense																					$	288																	$	200																	$	161
Effective tax rate																														20.3		%																16.5		%																15.7		%

1In June 2025, state deferred tax balances were increased by $12 million to reflect a change in Illinois tax policy that establishes nexus for Consumers. The policy change is effective for tax years beginning January 1, 2026. During 2023, CMS Energy initiated a plan to divest immaterial business activities in a non-Michigan jurisdiction and will no longer have a taxable presence within that jurisdiction. As a result of these actions, CMS Energy reversed a $13 million non-Michigan reserve, all of which was recognized at Consumers.

2During 2024, Consumers recognized a $16 million tax benefit resulting from the expiration of the statute of limitations associated with audit points for the 2018 and 2019 tax years.

State Income Tax Claim: In February 2025, CMS Energy received an adverse ruling from the Michigan Tax Tribunal in regards to the methodology of state apportionment for Consumers’ electricity sales to MISO. In March 2025, CMS Energy filed an appeal with the Michigan Court of Appeals and a hearing was held in February 2026. CMS Energy and Consumers have evaluated and concluded their uncertain tax positions associated with this matter to be sufficient as of December 31, 2025. While CMS Energy and Consumers expect the appeal to prevail, if it were to fail, the companies would be required to revise the estimated value of their state deferred tax liabilities, which could result in a material impact to their results of operations.

Tax Legislation: CMS Energy and Consumers are subject to changing tax laws. In July 2025, President Trump signed into law the OBBBA. The legislation allows for the immediate expensing of domestic research and development costs and includes changes to clean energy tax credits enacted by the Inflation Reduction Act of 2022. While the OBBBA restores, and makes permanent, the 100‑percent

bonus depreciation deduction, it also retains a provision that allows utilities to take a full deduction of interest expense in lieu of 100‑percent bonus depreciation. CMS Energy and Consumers evaluated the provisions of the OBBBA and concluded that the legislation is not expected to have a material impact on their respective financial statements. This conclusion is subject to change as additional guidance or interpretations become available.

Renewable Energy Tax Credits: Under the Inflation Reduction Act of 2022, renewable energy tax credits produced after 2022 are eligible to be transferred to third parties. These sales are accounted for under ASC 740 with the discount from the sale of the tax credits included as a component of income tax expense. Renewable energy tax credits that have been generated and sold are presented as accounts receivable on CMS Energy’s and Consumers’ consolidated balance sheets until proceeds from the sale are received. Proceeds from the sale of tax credits are presented as operating activities on their consolidated statements of cash flows, consistent with the presentation of cash taxes paid.

During 2025, CMS Energy sold renewable energy tax credits generated in 2025 and received proceeds of $36 million, all of which was recognized at Consumers. CMS Energy also received proceeds of $13 million during 2025 from the 2024 sale of renewable energy tax credits, all of which was recognized at Consumers. CMS Energy will receive an additional $32 million in 2026 from the renewable energy tax credits generated and sold in 2025, of which $10 million will be recognized at Consumers.

Presented in the following table are the significant components of income tax expense on continuing operations:

In Millions
Years Ended December 31			2025						2024						2023
CMS Energy, including Consumers
Current income taxes
Federal						$	34					$	34					$	5
State and local						9						—						1
						$	43					$	34					$	6
Deferred income taxes
Federal						107						70						107
State and local						100						76						38
						$	207					$	146					$	145
Deferred income tax credit						(4)						(4)						(4)
Tax expense						$	246					$	176					$	147
Consumers
Current income taxes
Federal						$	207					$	78					$	3
State and local						33						7						2
						$	240					$	85					$	5
Deferred income taxes
Federal						(27)						51						117
State and local						79						68						43
						$	52					$	119					$	160
Deferred income tax credit						(4)						(4)						(4)
Tax expense						$	288					$	200					$	161

Presented in the following table are income taxes paid:

In Millions
Years Ended December 31			2025						2024						2023
CMS Energy, including Consumers
Federal						$	28					$	27					$	15
State						1						1						—
Total						$	29					$	28					$	15
Consumers
Federal						$	189					$	57					$	23
State						21						—						8
Total						$	210					$	57					$	31

CMS Energy and Consumers are domiciled in the U.S. and are not subject to taxes in any foreign jurisdiction. State income taxes paid (net of refunds) are primarily attributable to the state of Michigan.

Presented in the following table are the principal components of deferred income tax assets (liabilities) recognized:

In Millions
December 31			2025						2024
CMS Energy, including Consumers
Deferred income tax assets
Net regulatory tax liability						$	294					$	307
Tax loss and credit carryforwards						139						258
Reserves and accruals						16						27
Total deferred income tax assets						$	449					$	592
Valuation allowance						(2)						(1)
Total deferred income tax assets, net of valuation allowance						$	447					$	591
Deferred income tax liabilities
Plant, property, and equipment						$	(2,833)					$	(2,682)
Employee benefits						(558)						(507)
Gas inventory						(24)						(38)
Securitized costs						(137)						(167)
Other						(147)						(122)
Total deferred income tax liabilities						$	(3,699)					$	(3,516)
Total net deferred income tax liabilities						$	(3,252)					$	(2,925)
Consumers
Deferred income tax assets
Net regulatory tax liability						$	294					$	307
Tax loss and credit carryforwards						18						37
Reserves and accruals						13						24
Total deferred income tax assets						$	325					$	368
Deferred income tax liabilities
Plant, property, and equipment						$	(2,808)					$	(2,658)
Employee benefits						(534)						(489)
Gas inventory						(24)						(38)
Securitized costs						(137)						(167)
Other						(23)						(69)
Total deferred income tax liabilities						$	(3,526)					$	(3,421)
Total net deferred income tax liabilities						$	(3,201)					$	(3,053)

Deferred tax assets and liabilities are recognized for the estimated future tax effect of temporary differences between the tax basis of assets or liabilities and the reported amounts on CMS Energy’s and Consumers’ consolidated financial statements.

Presented in the following table are the tax loss and credit carryforwards at December 31, 2025:

In Millions
						Tax Attribute						Expiration
CMS Energy, including Consumers
Michigan net operating loss carryforwards												$	15		2030 – 2033
Arkansas net operating loss carryforwards												2			2033 - 2035
Local net operating loss carryforwards												2			2025 – 2040
General business credits1												120			2038 – 2045
Total tax attributes												$	139
Consumers
Michigan net operating loss carryforwards												$	10		2030 – 2033
General business credits1												8			2038 – 2045
Total tax attributes												$	18

1General business credits comprise research and development tax credits and renewable energy tax credits that are not expected to be transferred to third parties.

CMS Energy has provided a valuation allowance of $2 million for state and local tax loss carryforwards. CMS Energy and Consumers expect to utilize fully their tax loss and credit carryforwards for which no valuation allowance has been provided. It is reasonably possible that further adjustments will be made to the valuation allowances within one year.

Presented in the following table is a reconciliation of the beginning and ending amount of uncertain tax benefits:

In Millions
Years Ended December 31			2025						2024						2023
CMS Energy, including Consumers
Balance at beginning of period						$	24					$	26					$	28
Additions for current-year tax positions						2						1						1
Additions for prior-year tax positions						7						2						—
Reductions for lapse of statute of limitations						(4)						(5)						(3)
Balance at end of period						$	29					$	24					$	26
Consumers
Balance at beginning of period						$	32					$	36					$	36
Additions for current-year tax positions						1						6						1
Additions for prior-year tax positions						7						1						2
Reductions for lapse of statute of limitations						(4)						(11)						(3)
Balance at end of period						$	36					$	32					$	36

If recognized, all of these uncertain tax benefits would affect CMS Energy’s and Consumers’ annual effective tax rates in future years. One uncertain tax benefit relates to the methodology of state apportionment for Consumers’ electricity sales to MISO. CMS Energy has filed an appeal on an adverse ruling received from the Michigan Tax Tribunal on this methodology and a hearing was held in February 2026.

CMS Energy and Consumers recognize accrued interest and penalties, where applicable, as part of income tax expense. CMS Energy, including Consumers, recognized immaterial interest and penalties for each of the years ended December 31, 2025, 2024, and 2023.

The amount of income taxes paid is subject to ongoing audits by federal, state, local, and foreign tax authorities, which can result in proposed assessments. CMS Energy’s federal income tax returns for 2022 and subsequent years remain subject to examination by the IRS. CMS Energy’s Michigan Corporate Income Tax returns for 2013 through 2016 and 2021 and subsequent years remain subject to examination by the State of Michigan. CMS Energy’s and Consumers’ estimate of the potential outcome for any uncertain tax issue is highly judgmental. CMS Energy and Consumers believe that their accrued tax liabilities at December 31, 2025 were adequate for all years.

14: Earnings Per Share—CMS Energy

Presented in the following table are CMS Energy’s basic and diluted EPS computations based on income from continuing operations:

In Millions, Except Per Share Amounts
Years Ended December 31												2025						2024						2023
Income available to common stockholders
Income from continuing operations																					$	1,002					$	947					$	807
Less loss attributable to noncontrolling interests																					(69)						(56)						(79)
Less preferred stock dividends																					10						10						10
Income from continuing operations available to common stockholders – basic and diluted																					$	1,061					$	993					$	876
Average common shares outstanding
Weighted-average shares – basic																					300.4						297.6						291.2
Add dilutive nonvested stock awards																					0.5						0.7						0.5
Add dilutive forward equity sale contracts																					0.1						—						—
Weighted-average shares – diluted																					301.0						298.3						291.7
Income from continuing operations per average common share available to common stockholders
Basic																					$	3.53					$	3.34					$	3.01
Diluted																					3.53						3.33						3.01

Nonvested Stock Awards

CMS Energy’s nonvested stock awards are composed of participating and non‑participating securities. The participating securities accrue cash dividends when common stockholders receive dividends. Since the recipient is not required to return the dividends to CMS Energy if the recipient forfeits the award, the nonvested stock awards are considered participating securities. As such, the participating nonvested stock awards were included in the computation of basic EPS. The non‑participating securities accrue stock dividends that vest concurrently with the stock award. If the recipient forfeits the award, the stock dividends accrued on the non‑participating securities are also forfeited. Accordingly, the non‑participating awards and stock dividends were included in the computation of diluted EPS, but not in the computation of basic EPS.

Forward Equity Sale Contracts

CMS Energy has entered into forward equity sale contracts. These forward equity sale contracts are non-participating securities. While the forward sale price in the forward equity sale contract is decreased on certain dates by certain predetermined amounts to reflect expected dividend payments, these price adjustments were set upon inception of the agreement and the forward contract does not give the owner the right to participate in undistributed earnings. Accordingly, the forward equity sale contracts were included in the computation of diluted EPS, but not in the computation of basic EPS.

The potentially dilutive impact from these forward equity sale contracts is reflected in diluted EPS using the treasury stock method. There will be a dilutive effect on EPS when the average market price of common stock shares is above the applicable adjusted forward sale price. Additionally, any physical settlement or net share settlement of the agreements would dilute EPS. For further details on the forward equity sale contracts, see Note 5, Financings and Capitalization.

Convertible Securities

CMS Energy has issued convertible senior notes. Potentially dilutive common shares issuable upon conversion of the convertible senior notes are determined using the if-converted method for calculating diluted EPS. Upon conversion, the convertible senior notes are required to be paid in cash with only amounts exceeding the principal permitted to be settled in shares. Accordingly, the convertible senior notes were included in the computation of diluted EPS, but not in the computation of basic EPS. The impact to diluted EPS was de minimis.

15: Revenue

Presented in the following tables are the components of operating revenue:

In Millions
Year Ended December 31, 2025			Electric Utility						Gas Utility						NorthStar Clean Energy1									Consolidated
CMS Energy, including Consumers
Consumers utility revenue						$	5,578					$	2,468					$	—											$	8,046
Other						—						—						259												259
Revenue recognized from contracts with customers						$	5,578					$	2,468					$	259											$	8,305
Leasing income						—						—						149												149
Financing income						10						6						—												16
Consumers alternative-revenue programs						50						19						—												69
Total operating revenue – CMS Energy						$	5,638					$	2,493					$	408											$	8,539
Consumers
Consumers utility revenue
Residential						$	2,661					$	1,701																	$	4,362
Commercial						1,888						538																		2,426
Industrial						762						62																		824
Other						267						167																		434
Revenue recognized from contracts with customers						$	5,578					$	2,468																	$	8,046
Financing income						10						6																		16
Alternative-revenue programs						50						19																		69
Other non-segment revenue						—						—																		1
Total operating revenue – Consumers						$	5,638					$	2,493																	$	8,132

1Amounts represent NorthStar Clean Energy’s operating revenue from independent power production and its sales of energy commodities.

In Millions
Year Ended December 31, 2024			Electric Utility						Gas Utility						NorthStar Clean Energy1									Consolidated
CMS Energy, including Consumers
Consumers utility revenue						$	4,995					$	2,114					$	—											$	7,109
Other						—						—						211												211
Revenue recognized from contracts with customers						$	4,995					$	2,114					$	211											$	7,320
Leasing income						—						—						105												105
Financing income						10						5						—												15
Consumers alternative-revenue programs						56						19						—												75
Total operating revenue – CMS Energy						$	5,061					$	2,138					$	316											$	7,515
Consumers
Consumers utility revenue
Residential						$	2,318					$	1,429																	$	3,747
Commercial						1,674						440																		2,114
Industrial						670						50																		720
Other						333						195																		528
Revenue recognized from contracts with customers						$	4,995					$	2,114																	$	7,109
Financing income						10						5																		15
Alternative-revenue programs						56						19																		75
Other non-segment revenue						—						—																		1
Total operating revenue – Consumers						$	5,061					$	2,138																	$	7,200

1Amounts represent NorthStar Clean Energy’s operating revenue from independent power production and its sales of energy commodities.

In Millions
Year Ended December 31, 2023			Electric Utility						Gas Utility						NorthStar Clean Energy1												Consolidated
CMS Energy, including Consumers
Consumers utility revenue						$	4,686					$	2,394					$	—																	$	7,080
Other						—						—						181																		181
Revenue recognized from contracts with customers						$	4,686					$	2,394					$	181																	$	7,261
Leasing income						—						—						116																		116
Financing income						10						6						—																		16
Consumers alternative-revenue programs						49						20						—																		69
Total operating revenue – CMS Energy						$	4,745					$	2,420					$	297																	$	7,462
Consumers
Consumers utility revenue
Residential						$	2,236					$	1,619																							$	3,855
Commercial						1,550						489																								2,039
Industrial						660						60																								720
Other						240						226																								466
Revenue recognized from contracts with customers						$	4,686					$	2,394																							$	7,080
Financing income						10						6																								16
Alternative-revenue programs						49						20																								69
Other non-segment revenue						—						—																								1
Total operating revenue – Consumers						$	4,745					$	2,420																							$	7,166

1Amounts represent NorthStar Clean Energy’s operating revenue from independent power production and its sales of energy commodities.

Electric and Gas Utilities

Consumers Utility Revenue: Consumers recognizes revenue primarily from the sale of electric and gas utility services at tariff-based rates regulated by the MPSC. Consumers’ customer base consists of a mix of residential, commercial, and diversified industrial customers. Consumers’ tariff-based sales performance obligations are described below.

• Consumers has performance obligations for the service of standing ready to deliver electricity or natural gas to customers, and it satisfies these performance obligations over time. Consumers recognizes revenue at a fixed rate as it provides these services. These arrangements generally do not have fixed terms and remain in effect as long as the customer consumes the utility service. The rates are set by the MPSC through the rate-making process and represent the stand-alone selling price of Consumers’ service to stand ready to deliver.

• Consumers has performance obligations for the service of delivering the commodity of electricity or natural gas to customers, and it satisfies these performance obligations upon delivery. Consumers recognizes revenue at a price per unit of electricity or natural gas delivered, based on the tariffs established by the MPSC. These arrangements generally do not have fixed terms and remain in effect as long as the customer consumes the utility service. The rates are set by the MPSC through the rate-making process and represent the stand-alone selling price of a bundled product comprising the commodity, electricity or natural gas, and the service of delivering such commodity.

In some instances, Consumers has specific fixed-term contracts with large commercial and industrial customers to provide electricity or gas at certain tariff rates or to provide gas transportation services at contracted rates. The amount of electricity and gas to be delivered under these contracts and the associated future revenue to be received are generally dependent on the customers’ needs. Accordingly, Consumers recognizes revenues at the tariff or contracted rate as electricity or gas is delivered to the customer. Consumers also has other miscellaneous contracts with customers related to pole and other property rentals and utility contract work. Generally, these contracts are short term or evergreen in nature.

Accounts Receivable and Unbilled Revenues: Accounts receivable comprise trade receivables and unbilled receivables. CMS Energy and Consumers record their accounts receivable at cost less an allowance for uncollectible accounts. The allowance is increased for uncollectible accounts expense and decreased for account write-offs net of recoveries. CMS Energy and Consumers establish the allowance based on historical losses, management’s assessment of existing economic conditions, customer payment trends, and reasonable and supported forecast information. CMS Energy and Consumers assess late payment fees on trade receivables based on contractual past-due terms established with customers. Accounts are written off when deemed uncollectible, which is generally when they become six months past due.

CMS Energy and Consumers recorded uncollectible accounts expense of $40 million for the year ended December 31, 2025, $33 million for the year ended December 31, 2024, and $34 million for the year ended December 31, 2023.

Consumers’ customers are billed monthly in cycles having billing dates that do not generally coincide with the end of a calendar month. This results in customers having received electricity or natural gas that they have not been billed for as of the month-end. Consumers estimates its unbilled revenues by applying an average billed rate to total unbilled deliveries for each customer class. Unbilled revenues, which are recorded as accounts receivable and accrued revenue on CMS Energy’s and Consumers’ consolidated balance sheets, were $659 million at December 31, 2025 and $584 million at December 31, 2024.

Alternative‑revenue Programs: Consumers accounts for its energy waste reduction incentive mechanism, financial compensation mechanism, and demand response incentive mechanism as alternative-revenue programs.

Consumers recognizes revenue related to the energy waste reduction incentive as soon as energy savings exceed the annual targets established by the MPSC. Revenue related to the financial compensation mechanism is recognized as payments are made on MPSC-approved PPAs. Under a demand response incentive mechanism, Consumers earns a financial incentive when it meets demand response targets set by the MPSC. Consumers recognizes revenue related to this program once demand response incentive objectives are complete, the incentive amount is calculable, and the incentive revenue will be collected within a 24‑month period. For additional information on these mechanisms, see Note 3, Regulatory Matters.

Consumers does not reclassify revenue from its alternative-revenue program to revenue from contracts with customers at the time the amounts are collected from customers.

16: Other Income and Other Expense

Presented in the following table are the components of other income and other expense at CMS Energy and Consumers:

In Millions
Years Ended December 31			2025						2024									2023
CMS Energy, including Consumers
Other income
Gain on extinguishment of debt1						$	72					$	110					$	131
Interest income						37						50						37
Interest income – related parties						1						—						—
Allowance for equity funds used during construction						23						29						7
Income from equity method investees						5						7						7
All other						13						11						13
Total other income – CMS Energy						$	151					$	207					$	195
Consumers
Other income
Interest income						$	22					$	42					$	25
Interest income – related parties						4						5						5
Allowance for equity funds used during construction						23						29						7
All other						6						9						12
Total other income – Consumers						$	55					$	85					$	49
CMS Energy, including Consumers
Other expense
Donations						$	(10)					$	(18)					$	(1)
Civic and political expenditures						(7)						(5)						(5)
All other						(10)						(9)						(7)
Total other expense – CMS Energy						$	(27)					$	(32)					$	(13)
Consumers
Other expense
Donations						$	(10)					$	(18)					$	(1)
Civic and political expenditures						(5)						(5)						(5)
All other						(7)						(7)						(6)
Total other expense – Consumers						$	(22)					$	(30)					$	(12)

1For information regarding the gain on extinguishment of debt, see Note 5, Financings and Capitalization—CMS Energy’s Purchase of Consumers’ First Mortgage Bonds.

17: Reportable Segments

Reportable segments consist of business units defined by the products and services they offer. CMS Energy’s and Consumers’ chief operating decision-maker is the CEO. The chief operating decision-maker evaluates segment performance and profitability using net income available to CMS Energy’s common stockholders. This metric provides a clear, consistent basis for analyzing the financial results of each segment and supports decision-making regarding the allocation of resources.

Resource allocation to CMS Energy’s and Consumers’ segments begins with the annual budgeting process, which establishes initial funding and resource levels for each segment. The budget incorporates key financial and operational inputs, including anticipated revenues, expenses, and capital requirements, aligning with CMS Energy’s and Consumers’ strategic objectives and regulatory obligations. The chief operating decision-maker reviews budget-to-actual variances on a monthly basis and makes interim decisions to reallocate resources among segments as needed, ensuring a timely and effective response to changing conditions. For the electric utility and gas utility segments, the chief operating decision-maker uses this assessment to determine whether the segments are achieving their regulatory authorized return on equity.

Accounting policies for CMS Energy’s and Consumers’ segments are as described in Note 1, Significant Accounting Policies. The consolidated financial statements reflect the assets, liabilities, revenues, and expenses of the individual segments when appropriate. Accounts are allocated among the segments when common accounts are attributable to more than one segment. The allocations are based on certain measures of business activities, such as revenue, labor dollars, customers, other operating and maintenance expense, construction expense, leased property, taxes, or functional surveys. For example, customer receivables are allocated based on revenue, and pension provisions are allocated based on labor dollars.

Inter-segment sales and transfers are accounted for at current market prices and are eliminated in consolidated net income available to common stockholders by segment. Inter-segment sales and transfers were immaterial for all periods presented.

CMS Energy

The segments reported for CMS Energy are:

• electric utility, consisting of regulated activities associated with the generation, purchase, distribution, and sale of electricity in Michigan

• gas utility, consisting of regulated activities associated with the purchase, transmission, storage, distribution, and sale of natural gas in Michigan

• NorthStar Clean Energy, consisting of various subsidiaries engaging in domestic independent power production, including the development and operation of renewable generation, and the marketing of independent power production

CMS Energy presents corporate interest and other expenses, discontinued operations, and Consumers’ other consolidated entities within other reconciling items.

Consumers

The segments reported for Consumers are:

• electric utility, consisting of regulated activities associated with the generation, purchase, distribution, and sale of electricity in Michigan

• gas utility, consisting of regulated activities associated with the purchase, transmission, storage, distribution, and sale of natural gas in Michigan

Consumers’ other consolidated entities are presented within other reconciling items.

Presented in the following tables is financial information by segment:

In Millions
Year Ended December 31, 2025			Electric Utility						Gas Utility						NorthStar Clean Energy						Segments Total						Other Reconciling Items						Consolidated
CMS Energy, including Consumers
Operating revenue						$	5,638					$	2,493					$	408					$	8,539					$	—					$	8,539
Operating expenses
Power supply cost1						2,193						—						264						2,457						—						2,457
Cost of gas sold						—						803						6						809						—						809
Maintenance and other operating expenses						1,146						468						100						1,714						13						1,727
Depreciation and amortization						903						350						52						1,305						1						1,306
General taxes						297						201						14						512						1						513
Total operating expenses						4,539						1,822						436						6,797						15						6,812
Operating Income (Loss)						1,099						671						(28)						1,742						(15)						1,727
Other income2						124						83						17						224						86						310
Interest charges						353						206						(7)						552						237						789
Income (Loss) Before Income Taxes						870						548						(4)						1,414						(166)						1,248
Income tax expense (benefit)						150						138						(4)						284						(38)						246
Income (Loss) From Continuing Operations						720						410						—						1,130						(128)						1,002
Other segment items3						(1)						(1)						71						69						(10)						59
Net Income (Loss) Available to Common Stockholders						$	719					$	409					$	71					$	1,199					$	(138)					$	1,061
Property, plant, and equipment, gross						$	21,871		4			$	14,218		4			$	1,649					$	37,738					$	25					$	37,763
Investments in equity method investees						—						—						61						61						—						61
Total assets						22,760			4			14,188			4			2,496						39,444						497						39,941
Capital expenditures5						2,408			6			1,064			6			498						3,970						—						3,970

1Power supply costs comprise fuel for electric generation, purchased and interchange power, and purchased power – related parties.

2Includes income from equity method investees of $5 million attributable to NorthStar Clean Energy. See Note 16, Other Income and Other Expense

3Other segment items comprise loss attributable to noncontrolling interests and preferred stock dividends.

4Amounts include a portion of Consumers’ other common assets attributable to both the electric and gas utility businesses.

5Amounts include assets placed under finance lease.

6Amounts include a portion of Consumers’ capital expenditures for plant and equipment attributable to both the electric and gas utility businesses.

In Millions
Year Ended December 31, 2025			Electric Utility						Gas Utility						Segments Total						Other Reconciling Items						Consolidated
Consumers
Operating revenue						$	5,638					$	2,493					$	8,131					$	1					$	8,132
Operating expenses
Power supply cost1						2,193						—						2,193						—						2,193
Cost of gas sold						—						803						803						—						803
Maintenance and other operating expenses						1,146						468						1,614						—						1,614
Depreciation and amortization						903						350						1,253						1						1,254
General taxes						297						201						498						1						499
Total operating expenses						4,539						1,822						6,361						2						6,363
Operating Income (Loss)						1,099						671						1,770						(1)						1,769
Other income						124						83						207						1						208
Interest charges						353						206						559						1						560
Income (Loss) Before Income Taxes						870						548						1,418						(1)						1,417
Income tax expense						150						138						288						—						288
Net Income (Loss)						720						410						1,130						(1)						1,129
Other segment items2						(1)						(1)						(2)						—						(2)
Net Income (Loss) Available to Common Stockholder						$	719					$	409					$	1,128					$	(1)					$	1,127
Property, plant, and equipment, gross						$	21,871		3			$	14,218		3			$	36,089					$	31					$	36,120
Total assets						22,814			3			14,229			3			37,043						48						37,091
Capital expenditures4						2,408			5			1,064			5			3,472						—						3,472

1Power supply costs comprise fuel for electric generation, purchased and interchange power, and purchased power – related parties.

2Other segment items comprise preferred stock dividends.

3Amounts include a portion of Consumers’ other common assets attributable to both the electric and gas utility businesses.

4Amounts include assets placed under finance lease.

5Amounts include a portion of Consumers’ capital expenditures for plant and equipment attributable to both the electric and gas utility businesses.

In Millions
Year Ended December 31, 2024			Electric Utility						Gas Utility						NorthStar Clean Energy						Segments Total						Other Reconciling Items						Consolidated
CMS Energy, including Consumers
Operating revenue						$	5,061					$	2,138					$	316					$	7,515					$	—					$	7,515
Operating expenses
Power supply cost1						1,867						—						161						2,028						—						2,028
Cost of gas sold						—						637						3						640						—						640
Maintenance and other operating expenses						1,066						454						101						1,621						17						1,638
Depreciation and amortization						865						325						49						1,239						1						1,240
General taxes						281						188						12						481						1						482
Total operating expenses						4,079						1,604						326						6,009						19						6,028
Operating Income (Loss)						982						534						(10)						1,506						(19)						1,487
Other income2						126						86						14						226						118						344
Interest charges						324						192						4						520						188						708
Income (Loss) Before Income Taxes						784						428						—						1,212						(89)						1,123
Income tax expense (benefit)						102						99						(5)						196						(20)						176
Income (Loss) From Continuing Operations						682						329						5						1,016						(69)						947
Other segment items3						(1)						(1)						58						56						(10)						46
Net Income (Loss) Available to Common Stockholders						$	681					$	328					$	63					$	1,072					$	(79)					$	993
Property, plant, and equipment, gross						$	20,137		4			$	13,268		4			$	1,506					$	34,911					$	21					$	34,932
Investments in equity method investees						—						—						64						64						—						64
Total assets						20,710			4			13,247			4			1,893						35,850						70						35,920
Capital expenditures5						1,871			6			1,141			6			288						$	3,300					1						3,301

1Power supply costs comprise fuel for electric generation, purchased and interchange power, and purchased power – related parties.

2Includes income from equity method investees of $7 million attributable to NorthStar Clean Energy. See Note 16, Other Income and Other Expense.

3Other segment items comprise loss attributable to noncontrolling interests and preferred stock dividends.

4Amounts include a portion of Consumers’ other common assets attributable to both the electric and gas utility businesses.

5Amounts include assets placed under finance lease.

6Amounts include a portion of Consumers’ capital expenditures for plant and equipment attributable to both the electric and gas utility businesses.

In Millions
Year Ended December 31, 2024			Electric Utility						Gas Utility						Segments Total						Other Reconciling Items						Consolidated
Consumers
Operating revenue						$	5,061					$	2,138					$	7,199					$	1					$	7,200
Operating expenses
Power supply cost1						1,867						—						1,867						—						1,867
Cost of gas sold						—						637						637						—						637
Maintenance and other operating expenses						1,066						454						1,520						—						1,520
Depreciation and amortization						865						325						1,190						1						1,191
General taxes						281						188						469						1						470
Total operating expenses						4,079						1,604						5,683						2						5,685
Operating Income (Loss)						982						534						1,516						(1)						1,515
Other income						126						86						212						—						212
Interest charges						324						192						516						2						518
Income (Loss) Before Income Taxes						784						428						1,212						(3)						1,209
Income tax expense (benefit)						102						99						201						(1)						200
Net Income (Loss)						682						329						1,011						(2)						1,009
Other segment items2						(1)						(1)						(2)						—						(2)
Net Income (Loss) Available to Common Stockholder						$	681					$	328					$	1,009					$	(2)					$	1,007
Property, plant, and equipment, gross						$	20,137		3			$	13,268		3			$	33,405					$	29					$	33,434
Total assets						20,767			3			13,289			3			34,056						32						34,088
Capital expenditures4						1,871			5			1,141			5			3,012						—						3,012

1Power supply costs comprise fuel for electric generation, purchased and interchange power, and purchased power – related parties.

2Other segment items comprise preferred stock dividends.

3Amounts include a portion of Consumers’ other common assets attributable to both the electric and gas utility businesses.

4Amounts include assets placed under finance lease.

5Amounts include a portion of Consumers’ capital expenditures for plant and equipment attributable to both the electric and gas utility businesses.

In Millions
Year Ended December 31, 2023			Electric Utility						Gas Utility						NorthStar Clean Energy						Segments Total						Other Reconciling Items						Consolidated
CMS Energy, including Consumers
Operating revenue						$	4,745					$	2,420					$	297					$	7,462					$	—					$	7,462
Operating expenses
Power supply cost1						1,841						—						170						2,011						—						2,011
Cost of gas sold						—						897						5						902						—						902
Maintenance and other operating expenses						1,075						511						88						1,674						13						1,687
Depreciation and amortization						797						338						43						1,178						2						1,180
General taxes						260						176						10						446						1						447
Total operating expenses						3,973						1,922						316						6,211						16						6,227
Operating Income (Loss)						772						498						(19)						1,251						(16)						1,235
Other income2						131						77						12						220						142						362
Interest charges						285						161						2						448						195						643
Income (Loss) Before Income Taxes						618						414						(9)						1,023						(69)						954
Income tax expense (benefit)						67						98						4						169						(22)						147
Income (Loss) From Continuing Operations						551						316						(13)						854						(47)						807
Other segment items3						(1)						(1)						80						78						(8)						70
Net Income (Loss) Available to Common Stockholders						$	550					$	315					$	67					$	932					$	(55)					$	877

1Power supply costs comprise fuel for electric generation, purchased and interchange power, and purchased power – related parties.

2Includes income from equity method investees of $7 million attributable to NorthStar Clean Energy. See Note 16, Other Income and Other Expense.

3Other segment items comprise income from discontinued operations, net of tax, loss attributable to noncontrolling interests, and preferred stock dividends.

In Millions
Year Ended December 31, 2023			Electric Utility						Gas Utility						Segments Total						Other Reconciling Items						Consolidated
Consumers
Operating revenue						$	4,745					$	2,420					$	7,165					$	1					$	7,166
Operating expenses
Power supply cost1						1,841						—						1,841						—						1,841
Cost of gas sold						—						897						897						—						897
Maintenance and other operating expenses						1,075						511						1,586						—						1,586
Depreciation and amortization						797						338						1,135						2						1,137
General taxes						260						176						436						1						437
Total operating expenses						3,973						1,922						5,895						3						5,898
Operating Income (Loss)						772						498						1,270						(2)						1,268
Other income						131						77						208						—						208
Interest charges						285						161						446						2						448
Income (Loss) Before Income Taxes						618						414						1,032						(4)						1,028
Income tax expense (benefit)						67						98						165						(4)						161
Net Income						551						316						867						—						867
Other segment items2						(1)						(1)						(2)						—						(2)
Net Income Available to Common Stockholder						$	550					$	315					$	865					$	—					$	865

1Power supply costs comprise fuel for electric generation, purchased and interchange power, and purchased power – related parties.

2Other segment items comprise preferred stock dividends.

18: Related-party Transactions—Consumers

Consumers enters into a number of transactions with related parties in the normal course of business. These transactions include but are not limited to:

• purchases of electricity from affiliates of NorthStar Clean Energy

• payments to and from CMS Energy related to parent company overhead costs

• payments of principal and interest when due to CMS Energy related to borrowings under certain credit agreements and CMS Energy’s repurchase of Consumers’ first mortgage bonds

Transactions involving power supply purchases from certain affiliates of NorthStar Clean Energy are based on state law and competitive bidding. The payment of parent company overhead costs is based on the use of accepted industry allocation methodologies. These payments are for costs that occur in the normal course of business. Purchases of power and capacity from affiliates of NorthStar Clean Energy totaled $94 million in 2025, $71 million in 2024, and $75 million in 2023.

Amounts payable to related parties for purchased power and other services were $19 million at December 31, 2025 and $20 million at December 31, 2024. Accounts receivable from related parties were $13 million at December 31, 2025 and $15 million at December 31, 2024.

CMS Energy has a demand note payable to the DB SERP rabbi trust. The demand note bears interest at an annual rate of 4.10 percent and has a maturity date of 2028. The portion of the demand note attributable to Consumers was recorded as a note receivable – related party on Consumers’ consolidated balance sheets at December 31, 2025 and 2024. For more information about Consumers’ note receivable – related party, see Note 7, Financial Instruments.

Consumers has a natural gas transportation agreement with a subsidiary of CMS Energy that extends through 2038, related to a pipeline owned by Consumers. For additional details about the agreement, see Note 9, Leases.

CMS Energy has repurchased certain of Consumers’ first mortgage bonds. Interest payable to related parties was $9 million at December 31, 2025 and $7 million at December 31, 2024. For more information about these repurchases, see Note 5, Financings and Capitalization—CMS Energy’s Purchase of Consumers’ First Mortgage Bonds.

In December 2025, Consumers renewed a short-term credit agreement with CMS Energy, permitting Consumers to borrow up to $500 million. For additional details about the agreement, see Note 5, Financings and Capitalization—Short-term Borrowings.

19: Variable Interest Entities

Consolidated VIEs: In March 2025, NorthStar Clean Energy sold a 50‑percent interest in NWO Wind Equity Holdings for net proceeds of $36 million. NWO Wind Equity Holdings holds the Class B membership interest in NWO Holdco, the holding company of a 100‑MW wind project located in Paulding County, Ohio. Additionally in March 2025, NorthStar Clean Energy sold a 50‑percent interest in Delta Solar Equity Holdings for net proceeds of $8 million. Delta Solar Equity Holdings is the holding company of a 24‑MW solar project located in Delta Township, Michigan.

In December 2025, NorthStar Clean Energy sold a Class A membership interest in BG Solar Holdings to a tax equity investor. BG Solar Holdings is the holding company of a 200‑MW solar generation project being constructed in Branch County, Michigan. All of the project’s nameplate capacity has been committed under a 15‑year renewable energy purchase agreement. The tax equity investor contributed $15 million and recognized a deemed contribution of $35 million associated with BG Solar Holdings’ sale of investment tax credits related to a portion of the project placed into service for tax purposes in 2025. The tax equity investor will contribute additional amounts upon commercial operation of the project in 2026.

NorthStar Clean Energy consolidates these and other entities that it does not wholly own, but for which it manages and controls the entities’ operating activities. NorthStar Clean Energy is the primary beneficiary of these entities because it has the power to direct the activities that most significantly impact the economic performance of the companies, as well as the obligation to absorb losses or the right to receive benefits from the companies. Presented in the following table is information about the VIEs NorthStar Clean Energy consolidates:

Consolidated VIE			NorthStar Clean Energy’s ownership interest			Description of VIE
Aviator Wind Equity Holdings			51-percent ownership interest1			Holds a Class B membership interest in Aviator Wind
Aviator Wind			Class B membership interest2			Holding company of a 525-MW wind generation project in Coke County, Texas
BG Solar Holdings			Class B membership interest2			Holding company of a 200-MW solar generation project in Branch County, Michigan
Delta Solar Equity Holdings			50-percent ownership interest1			Holding company of a 24-MW solar generation project in Delta Township, Michigan
Newport Solar Holdings			Class B membership interest2			Holding company of a 180‑MW solar generation project in Jackson County, Arkansas
NWO Wind Equity Holdings			50‑percent ownership interest1			Holds a Class B membership interest in NWO Holdco
NWO Holdco			Class B membership interest2			Holding company of a 100-MW wind generation project in Paulding County, Ohio

1The remaining ownership interest is presented as noncontrolling interest on CMS Energy’s consolidated balance sheets.

2The Class A membership interest in the entity is held by a tax equity investor and is presented as noncontrolling interest on CMS Energy’s consolidated balance sheets. Under the associated limited liability company agreement, the tax equity investor is guaranteed preferred returns from the entity.

Earnings, tax attributes, and cash flows generated by the entities in which NorthStar Clean Energy holds a Class B membership are allocated among and distributed to the membership classes in accordance with

the ratios specified in the associated limited liability company agreements; these ratios change over time and are not representative of the ownership interest percentages of each membership class. Since these entities’ income and cash flows are not distributed among their investors based on ownership interest percentages, NorthStar Clean Energy allocates the entities’ income (loss) among the investors by applying the hypothetical liquidation at book value method. This method calculates each investor’s earnings based on a hypothetical liquidation of the entities at the net book value of underlying assets as of the balance sheet date. The liquidation tax gain (loss) is allocated to each investor’s capital account, resulting in income (loss) equal to the period change in the investor’s capital account balance.

Presented in the following table are the carrying values of the VIEs’ assets and liabilities included on CMS Energy’s consolidated balance sheets:

In Millions
December 31			2025						2024
Current
Cash and cash equivalents						$	20					$	18
Restricted cash						19						—
Accounts receivable						42						4
Prepayments and other current assets						5						3
Non-current
Plant, property, and equipment, net						1,037						1,024
Construction work in progress						357						—
Other non-current assets						5						3
Total assets1						$	1,485					$	1,052
Current
Current portion of long-term debt and finance leases						$	65					$	—
Accounts payable						29						8
Non-current
Long-term debt						118						—
Non-current portion of finance leases						39						23
AROs						38						33
Other non-current liabilities						3						—
Total liabilities						$	292					$	64

1Assets may be used only to meet VIEs’ obligations and commitments.

NorthStar Clean Energy is obligated under certain indemnities that protect the tax equity investors against losses incurred as a result of breaches of representations and warranties under the associated limited liability company agreements. For additional details on these indemnity obligations, see Note 4, Contingencies and Commitments—Guarantees.

Consumers’ wholly-owned subsidiaries, Consumers 2014 Securitization Funding and Consumers 2023 Securitization Funding, are VIEs designed to collateralize Consumers’ securitization bonds. These entities are considered VIEs primarily because their equity capitalization is insufficient to support their operations. Consumers is the primary beneficiary of and consolidates these VIEs, as it has the power to direct the activities that most significantly impact the economic performance of the companies, as well as the obligation to absorb losses or the right to receive benefits from the companies. The VIEs’ primary assets and liabilities comprise non-current regulatory assets and long-term debt. For more information on

these assets and liabilities, see Note 3, Regulatory Matters—Securitized Costs and Note 5, Financings and Capitalization—Securitization Bonds

Non-consolidated VIEs: NorthStar Clean Energy has variable interests in T.E.S. Filer City, Grayling, Genesee, and Craven. While NorthStar Clean Energy owns 50 percent of each partnership, it is not the primary beneficiary of any of these partnerships because decision making is shared among unrelated parties, and no one party has the ability to direct the activities that most significantly impact the entities’ economic performance, such as operations and maintenance, plant dispatch, and fuel strategy. The partners must agree on all major decisions for each of the partnerships.

Presented in the following table is information about these partnerships, which are accounted for using the equity method:

Name			Nature of the Entity			Nature of NorthStar Clean Energy’s Involvement
T.E.S. Filer City			Coal-fueled power generator			Long-term PPA between partnership and Consumers
Employee assignment agreement
Grayling			Wood waste-fueled power generator			Long-term PPA between partnership and Consumers
Reduced dispatch agreement with Consumers1
Operating and management contract
Genesee			Wood waste-fueled power generator			Long-term PPA between partnership and Consumers
Reduced dispatch agreement with Consumers1
Operating and management contract
Craven			Wood waste-fueled power generator			Operating and management contract

1Reduced dispatch agreements allow the facilities to be dispatched based on the market price of power compared with the cost of production of the plants. This results in fuel cost savings that each partnership shares with Consumers’ customers.

The creditors of these partnerships do not have recourse to the general credit of CMS Energy, NorthStar Clean Energy, or Consumers. NorthStar Clean Energy’s maximum risk exposure to these partnerships is generally limited to its investment in the partnerships, which is included in investments on CMS Energy’s consolidated balance sheets in the amount of $54 million at December 31, 2025 and $64 million at December 31, 2024.

20: Exit Activities and Asset Sales

J.H. Campbell Retirement: Under its integrated resource plan, Consumers had planned to retire J.H. Campbell in 2025. In order to ensure necessary staffing at J.H. Campbell through the planned retirement, Consumers implemented a retention incentive program. Consumers made final payments under this retention plan in November 2025. The aggregate cost of this program was $48 million, which has been deferred as a regulatory asset. The MPSC has approved recovery of these retention costs over three years.

The retirement of J.H. Campbell is subject to temporary extensions under emergency orders issued by the U.S. Secretary of Energy. As a result, Consumers has implemented retention measures to ensure appropriate staffing levels and expects to incur up to $4 million during each 90‑day emergency order period. Consumers will seek recovery of these retention costs from FERC, consistent with rate recovery sought for other costs of complying with the emergency orders. For additional information on the emergency orders associated with J.H. Campbell, see Note 3, Regulatory Matters.

Presented in the following table is a reconciliation of the retention benefit liability recorded in other current liabilities on Consumers’ consolidated balance sheets:

In Millions
Year Ended December 31												2025						2024
Retention benefit liability at beginning of period																					$	14					$	16
Costs deferred as a regulatory asset																					7						8
Costs paid or settled																					(19)						(10)
Retention benefit liability at the end of the period																					$	2					$	14

Sale of Hydroelectric Facilities: In September 2025, Consumers signed an agreement to sell its 13 river hydroelectric dams, which are located throughout Michigan, to a non-affiliated company. Additionally, Consumers signed an agreement to purchase power generated by the facilities for 30 years, at a price that reflects the counterparty’s acceptance of the risks and rewards of ownership of the facilities, including FERC licensing obligations. The agreements are contingent upon MPSC and FERC approval, for which Consumers filed in October 2025. Timing of the regulatory review process is uncertain and could extend 12 to 18 months or longer. In Consumers’ most recent electric rate case, the MPSC approved deferred accounting treatment for costs of owning and operating the hydroelectric dams pending and until completion of the transaction. At December 31, 2025, the net book value of the hydroelectric facilities was immaterial.

To ensure necessary staffing at the hydroelectric facilities through the anticipated sale, Consumers has provided current employees at the facilities with a retention incentive program. Subsequently, to ensure continued safe operation of the facilities after the sale, the buyer will offer employment to the current hydroelectric employees for a period of at least a year. The retention incentive benefits are contingent upon MPSC and FERC approval of the sale transaction.

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Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of CMS Energy Corporation

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of CMS Energy Corporation and its subsidiaries (the “Company”) as of December 31, 2025 and 2024, and the related consolidated statements of income, of comprehensive income, of changes in equity and of cash flows for each of the three years in the period ended December 31, 2025, including the related notes and financial statement schedules listed in the index appearing under Item 15 (collectively referred to as the “consolidated financial statements”). We also have audited the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

Basis for Opinions

The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Annual Report on Internal Control Over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Accounting for the Effects of New Regulatory Matters

As described in Note 3 to the consolidated financial statements, the Company is a utility and must apply regulatory accounting when its rates are designed to recover specific costs of providing regulated services. Under regulatory accounting, the Company records regulatory assets or liabilities for certain transactions that would have been treated as expense or revenue by a non‑regulated business. As of December 31, 2025 the Company has recognized a total of $3,459 million of regulatory assets, $4,176 million of regulatory liabilities, $38 million of accrued revenues, and $28 million of accrued rate refunds. As described by management, there are multiple participants to rate case proceedings who often challenge various aspects of those proceedings, including the prudence of the Company’s policies and practices. These participants often seek cost disallowances and other relief and have appealed significant decisions reached by the regulators. The recovery of regulatory assets and the settlement of regulatory liabilities are contingent upon the outcomes of rate cases and regulatory proceedings. The principal considerations for our determination that performing procedures relating to accounting for the effects of new regulatory matters is a critical audit matter are (i) the high degree of auditor judgment and subjectivity applied to evaluate management’s assessment of the potential outcomes and related accounting impacts associated with pending rate case proceedings; (ii) in some cases, the significant audit effort necessary to assess contrary evidence from various parties involved in rate case proceedings; and (iii) the significant audit effort necessary to evaluate audit evidence related to the recovery of regulatory assets and the settlement of regulatory liabilities. Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to

management’s assessment of regulatory proceedings, including the probability of recovering incurred costs and the related accounting and disclosure impacts. These procedures also included, among others, (i) evaluating the Company’s correspondence with regulators; (ii) evaluating the reasonableness of management’s assessment regarding whether recovery of regulatory assets and settlement of regulatory liabilities is probable; (iii) evaluating the sufficiency of the disclosures in the consolidated financial statements; and (iv) testing, on a sample basis, the regulatory assets and liabilities, including those subject to pending rate cases and regulatory proceedings, based on (a) provisions and formulas outlined in rate orders; (b) other regulatory correspondence; and (c) application of relevant regulatory precedents.

/s/ PricewaterhouseCoopers LLP

Detroit, Michigan

February 10, 2026

We have served as the Company’s auditor since 2007.

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Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of Consumers Energy Company

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of Consumers Energy Company and its subsidiaries (the “Company”) as of December 31, 2025 and 2024, and the related consolidated statements of income, of comprehensive income, of changes in equity and of cash flows for each of the three years in the period ended December 31, 2025, including the related notes and financial statement schedule listed in the index appearing under Item 15 (collectively referred to as the “consolidated financial statements”). We also have audited the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

Basis for Opinions

The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Annual Report on Internal Control Over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Accounting for the Effects of New Regulatory Matters

As described in Note 3 to the consolidated financial statements, the Company is a utility and must apply regulatory accounting when its rates are designed to recover specific costs of providing regulated services. Under regulatory accounting, the Company records regulatory assets or liabilities for certain transactions that would have been treated as expense or revenue by a non‑regulated business. As of December 31, 2025 the Company has recognized a total of $3,459 million of regulatory assets, $4,176 million of regulatory liabilities, $38 million of accrued revenues, and $28 million of accrued rate refunds. As described by management, there are multiple participants to rate case proceedings who often challenge various aspects of those proceedings, including the prudence of the Company’s policies and practices. These participants often seek cost disallowances and other relief and have appealed significant decisions reached by the regulators. The recovery of regulatory assets and the settlement of regulatory liabilities are contingent upon the outcomes of rate cases and regulatory proceedings. The principal considerations for our determination that performing procedures relating to accounting for the effects of new regulatory matters is a critical audit matter are (i) the high degree of auditor judgment and subjectivity applied to evaluate management’s assessment of the potential outcomes and related accounting impacts associated with pending rate case proceedings; (ii) in some cases, the significant audit effort necessary to assess contrary evidence from various parties involved in rate case proceedings; and (iii) the significant audit effort necessary to evaluate audit evidence related to the recovery of regulatory assets and the settlement of regulatory liabilities. Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to

management’s assessment of regulatory proceedings, including the probability of recovering incurred costs and the related accounting and disclosure impacts. These procedures also included, among others, (i) evaluating the Company’s correspondence with regulators; (ii) evaluating the reasonableness of management’s assessment regarding whether recovery of regulatory assets and settlement of regulatory liabilities is probable; (iii) evaluating the sufficiency of the disclosures in the consolidated financial statements; and (iv) testing, on a sample basis, the regulatory assets and liabilities, including those subject to pending rate cases and regulatory proceedings, based on (a) provisions and formulas outlined in rate orders; (b) other regulatory correspondence; and (c) application of relevant regulatory precedents.

/s/ PricewaterhouseCoopers LLP

Detroit, Michigan

February 10, 2026

We have served as the Company’s auditor since 2007.