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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 10-Q

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

CMS Energy Corporation:  Yes Tx     No o   Consumers Energy Company:  Yes Tx     No o

Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data file required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such files).

CMS Energy Corporation:  Yes Tx     No o   Consumers Energy Company:  Yes Tx     No o

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

CMS Energy Corporation:

Large accelerated filer Tx   Accelerated filer o   Non-Accelerated filer o   Smaller reporting company o

(Do not check if a smaller reporting company)

Consumers Energy Company:

Large accelerated filer o   Accelerated filer o   Non-Accelerated filer Tx   Smaller reporting company o

(Do not check if a smaller reporting company)

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

CMS Energy Corporation:  Yes o    No Tx   Consumers Energy Company:  Yes o    No Tx

Indicate the number of shares outstanding of each of the issuer’s classes of common stock at October 4, 2013:7, 2014:

CMS Energy Corporation:

Consumers Energy Company:

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FILING FORMAT

This combined Form 10-Q is separately filed by CMS Energy and Consumers.  Information in this combined Form 10-Q relating to each individual registrant is filed by such registrant on its own behalf.  Consumers makes no representation regarding information relating to any other companies affiliated with CMS Energy other than its own subsidiaries.  None of CMS Energy, CMS Enterprises, nor any of CMS Energy’s other subsidiaries (other than Consumers) has any obligation in respect of Consumers’ debt securities and holders of such debt securities should not consider the financial resources or results of operations of CMS Energy, CMS Enterprises, nor any of CMS Energy’s other subsidiaries (other than Consumers and its own subsidiaries (in relevant circumstances)) in making a decision with respect to Consumers’ debt securities.  Similarly, none ofneither Consumers nor any other subsidiary of CMS Energy has any obligation in respect of debt securities of CMS Energy.

This report should be read in its entirety.  No one section of this report deals with all aspects of the subject matter of this report.  This report should be read in conjunction with the consolidated financial statements and related notes and with MD&A included in the 20122013 Form 10-K.

FORWARD-LOOKING STATEMENTS AND INFORMATION

This Form 10-Q and other written and oral statements that CMS Energy and Consumers make may contain forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995.  The use of “might,” “may,” “could,” “should,” “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “projects,” “forecasts,” “predicts,” “assumes,” and other similar words is intended to identify forward-looking statements that involve risk and uncertainty.  This discussion of potential risks and uncertainties is designed to highlight important factors that may impact CMS Energy’s and Consumers’ businesses and financial outlook.  CMS Energy and Consumers have no obligation to update or revise forward-looking statements regardless of whether new information, future events, or any other factors affect the information contained in the statements.  These forward-looking statements are subject to various factors that could cause CMS Energy’s and Consumers’ actual results to differ materially from the results anticipated in these statements.  These factors include, but are not limited to, the following, all of which are potentially significant:

·                 the impact of new regulation by the MPSC or FERC and other applicable governmental proceedings and regulations, including any associated impact on electric or gas rates or rate structures;

·                 potentially adverse regulatory treatment or failure to receive timely regulatory orders affecting Consumers that are or could come before the MPSC, FERC, or other governmental authorities;

·                 changes in the performance of or regulations applicable to MISO, Michigan Electric Transmission Company, pipelines, railroads, vessels, or other service providers that CMS Energy, Consumers, or any of their affiliates rely on to serve their customers;

·                 the adoption of federal or state laws or regulations or changes in applicable laws, rules, regulations, principles, or practices, or in their interpretation, including those related to energy policy and ROA, gas pipeline safety, the environment, regulation or deregulation, health care reforms (including the Health Care Acts), taxes, accounting matters, and other business issues that could have an impact on CMS Energy’s or Consumers’ businesses or financial results, including laws or regulations regarding climate change and air emissions and potential effects of the Dodd-Frank Act and related regulations on CMS Energy, Consumers, or any of their affiliates;

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·                 potentially adverse regulatory or legal interpretations or decisions regarding environmental matters, or delayed regulatory treatment or permitting decisions that are or could come before the MDEQ, EPA, and/or U.S. Army Corps of Engineers, and potential environmental remediation

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·                 factors affecting operations, such as costs and availability of personnel, equipment, and materials, unusual weather conditions, catastrophic weather-related damage, scheduled or unscheduled

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CMS Energy Corporation

Consumers Energy Company

MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This MD&A is a combined report of CMS Energy and Consumers.

EXECUTIVE OVERVIEW

CMS Energy is an energy company operating primarily in Michigan.  It is the parent holding company of several subsidiaries, including Consumers, an electric and gas utility, and CMS Enterprises, primarily a domestic independent power producer.  Consumers’ electric utility operations include the generation, purchase, distribution, and sale of electricity, and Consumers’ gas utility operations include the purchase, transmission, storage, distribution, and sale of natural gas.  Consumers’ customer base consists of a mix of residential, commercial, and diversified industrial customers.  CMS Enterprises, through its subsidiaries and equity investments, owns and operates power generation facilities.

CMS Energy and Consumers manage their businesses by the nature of services each provides.  CMS Energy operates principally in three business segments:  electric utility; gas utility; and enterprises, its non-utility investmentsoperations and operations.investments.  Consumers operates principally in two business segments:  electric utility and gas utility.

CMS Energy and Consumers earn revenue and generate cash from operations by providing electric and natural gas utility services; electric distribution and generation; gas transmission, storage, and distribution; and other energy-related services.  Their businesses are affected primarily by:

·                 regulation and regulatory matters;

·                 economic conditions;

·                 weather;

·                 energy commodity prices;

·                 interest rates; and

·                 CMS Energy’s and Consumers’ securities’ credit ratings.

CMS Energy’s and Consumers’ business strategy emphasizes the key elements depicted below:

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Accountability is part of CMS Energy’s and Consumers’ corporate culture.  CMS Energy isand Consumers are committed to making the right choices to serve itstheir customers safely and affordably and to acting responsibly as a corporate citizen.citizens.  CMS Energy holds itselfand Consumers hold themselves accountable to the highest standards of safety, operational performance, and ethical behavior, and workswork diligently to comply with all laws, rules, and regulations that govern the electric and gas industry.

In October 2013, Consumers Energy released its first-ever  Consumers’ 2014 accountability report.  The report, which is available to the public, provides an overview of Consumers’ efforts to continue meeting Michigan’s energy needs safely and efficiently, and highlights Consumers’ commitment to Michigan businesses, its corporate citizenship, and its role in reducing the state’s air emissions.

SAFE,EXCELLENTOPERATIONS

The safety of employees, customers, and the general public remains a priority of CMS Energy and Consumers.  Accordingly, CMS Energy and Consumers have worked to integrate a set of safety principles into their business operations and culture.  These principles include complying with applicable safety, health, and security regulations and implementing programs and processes aimed at continually improving safety and security conditions.  From 2006 to 2012,through 2013, Consumers achieved a 7672 percent reduction in the annual number of recordable safety incidents.

CUSTOMERVALUE

Consumers is undertaking a number of initiatives that reflect its intensified customer focus.  Consumers’ planned investments in reliability are aimed at improving safety, reducing customer outage frequency, reducing repetitive outages, and increasing customer satisfaction.  Also, in order to minimize increases in customer base rates, Consumers has undertaken several additional initiatives to reduce costs through a voluntary separation plan in 2012,plans, accelerated pension funding, employee and retiree health-care cost sharing, negotiated labor agreements, information system efficiencies, and productivity improvement programs.improvements.  Consumers has also filedissued Securitization bonds and is accelerating the recognition of certain applications with the MPSC that, if approved, are expected totax benefits, both of which will result in cost savings for customers.  These initiatives together with Consumers’ plans to accelerate further cost reductions, should allowhave allowed Consumers to avoid increasing electric and gas base rates throughin 2014.  Consumers may reconsider this expectation should its assumptions change regarding the economy or other matters.

UTILITY INVESTMENT

Consumers expects to make capital investments of about $7 billion from 20132014 through 2017.2018.  Consumers has limited its capital investment program to those investments it believes are needed to provide safe, reliable, and efficient service to its customers.  Consumers’ capital investment program is expected to result in annual rate base growth of five to seven percent while allowing Consumers to maintain sustainable customer base rate increases (excluding PSCR and GCR charges) at or below the rate of inflation.

Among the key components of Consumers’ investment program are projects that will enhance customer value.  Consumers’ planned base capital investments of $3.5$3.9 billion represent projects to maintain Consumers’ system and comprise $2.1$2.4 billion ofat the electric utility projects to improvepreserve reliability and increase capacity and $1.4$1.5 billion ofat the gas utility projects to increase capacity andsustain deliverability and enhance pipeline integrity.  An additional $1.4$1.6 billion of planned reliability investments at Consumers are aimed at reducing outages and improving customer satisfaction; these investments comprise $0.6$0.9 billion at the electric utility to strengthen circuits and substations, replace poles, and upgrade the Ludington pumped-storage plant and $0.8$0.7 billion at the gas utility to replace mains and enhance transmission and storage systems.  Consumers also expects to spend $1.0$0.9 billion on environmental investments needed to comply with state and federal laws and regulations.

Consumers’ Smart Energy program, with an estimated total project capital cost of $0.8 billion, also represents a major capital investment.  The full-scale deployment of advanced metering infrastructure began in 2012 and is planned to continue through 2017.  Consumers has spent $0.3 billion through 2013

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In December 2012, Consumers announced planson its Smart Energy program, and expects to buildspend an additional $0.5 billion, following a 700-MW gas-fueled electric generating plant at its Thetford complex in Genesee County, Michigan.  In July 2013, Consumers received an air permit for the proposed plantphased approach, from the MDEQ and, as allowed under the 2008 Energy Law, filed for approval of a certificate of necessity with the MPSC.  Construction of the plant, at an estimated cost of $750 million, is contingent upon obtaining the certificate of necessity and environmental permits.  Consumers expects that the plant would be operational in2014 through 2017.

While Consumers continues to move ahead with its plans to build a new gas-fueled electric generating plant, it also issued a solicitation in September 2013 seeking offers from owners of existing gas-fueled electric generating plants located in Michigan’s Lower Peninsula to sell their plants to Consumers.  The purchase by Consumers of one or more existing plants could represent a cost-effective alternative to building a new plant.

Renewable energy projects are another major component of Consumers’ planned capital investments.  Consumers expects to spend $0.3$0.2 billion on renewable energy investments, under an MPSC-approved renewable energy plan, from 20132014 through 2017.2018.  The 2008 Energy Law requires that at least ten percent of Consumers’ electric sales volume come from renewable energy sources by 2015, and it includes requirements for specific capacity additions.  Consumers has historically included renewable resources as part of its portfolio, with about eight percent of its present power supply coming from such renewable sources as hydropower, landfill gas, biomass, wind, anaerobic digestion, and solar.

Consumers’ Smart Energy program, withIn December 2013, Consumers signed an estimated total project capital costagreement to purchase a 540-MW gas-fueled electric generating plant located in Jackson, Michigan for $155 million.  In January 2014, as a result of $0.8 billion, also represents a major capital investment.  The full-scale deploymentthis planned purchase, Consumers announced plans to defer the development of advanced metering infrastructure beganits proposed 700-MW gas-fueled electric generating plant at its Thetford complex in August 2012 and is planned to continue through 2019.  Consumers has spent $0.2 billion through 2012 on its Smart Energy program, and expects to spend an additional $0.3 billion, following a phased approach, from 2013 through 2017.Genesee County, Michigan.

REGULATION

Regulatory matters are a key aspect of CMS Energy’s and Consumers’ businesses, particularly Consumers’ rate cases and regulatory proceedings before the MPSC.  In July 2013, Michigan Governor Rick Snyder appointed Sally Talberg to serve on the three-member MPSC for a six-year term, replacing Orjiakor Isiogu.  Ms. Talberg has served in various energy-related consulting, management, and public service roles during her career.  She represents political independents on the Commission.  Other importantImportant regulatory events and developments are summarized below.

·                 Electric Rate Case:  Consumers filed a general electric rate case with the MPSC in September 2012, seeking an annual rate increase of $148 million.  In March 2013, Consumers self-implemented an annual rate increase of $110 million, subject to refund with interest.  The MPSC approved a partial settlement agreement in May 2013, authorizing an annual rate increase of $89 million, based on a 10.3 percent authorized rate of return on equity.  Consumers filed an application in July 2013 requesting that the MPSC find that total revenues collected during self-implementation did not exceed those that would have been collected under final rates and that no refund would be required.

·Gas Rate Case:  In February 2013,July 2014, Consumers filed an application with the MPSC seeking an annual rate increase of $49$88 million, based on a 10.510.7 percent authorized return on equity.  The filing requested authority to recover new investments that will allow Consumers to improve system reliability, comply with regulations, and enhance technology.  Costs associated with these investments represent an annual rate increase of $144 million; this amount is offset partially by reductions in customer reliability, deliverability, safety,the revenue requirement associated with working capital and system enhancements,other cost reductions.  If approved, this rate increase would take effect in 2015 and sought approval of severalwould be Consumers’ first gas base rate adjustment mechanisms.  Subsequent to this filing, Consumers’ projection of non-fuel costs decreased.  As a result, in June 2013, Consumers filed a petition with the MPSC to close the docket or, alternatively, to suspend and extend indefinitely the schedule in this case.  The MPSC approved Consumers’ petition to suspend and extend indefinitely the schedule.increase since 2012.

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bill also proposes an increase in the cap of six percentage points per year from 2014 through 2016.  Consumers is unable to predict the outcome of this legislative proposal.Michigan were deregulated, it could have a material adverse effect on Consumers’ financial results and operations.

Environmental regulation is another area of importance for CMS Energy and Consumers, and they are monitoring numerous legislative and regulatory initiatives, including initiatives to regulate greenhouse gases, and related litigation.

In 2012, the EPA published its final MACT emission standards  CMS Energy and Consumers believe that environmental laws and regulations related to their operations will continue to become more stringent and require them to make additional significant capital expenditures for electric generating units, based on Section 112 ofemissions control equipment, CCR disposal, cooling water intake equipment, effluent treatment, and PCB remediation.  Present and reasonably anticipated state and federal environmental statutes and regulations, including but not limited to the Clean Air Act, calling the final rule MATS.  Although numerous parties, including the State of Michigan,Clean Power Plan, as well as the Clean Water Act, the Resource Conservation and Recovery Act, and CERCLA, will continue to have sought to extend the deadline of MATS, it is expected to takea material effect in 2015.  Consumers has received from the MDEQ a one-year extension for MATS and the Michigan Mercury Rule for ten of its coal-fueled units, allowing them to run as presently configured until April 2016.on CMS Energy and Consumers are continuing to assess the impact and cost associated with these standards.Consumers.

In September 2013, the EPA issued proposed rules to limit carbon dioxide emissions from new fossil-fuel-fired electric generation units.  Also, President Obama has directed the EPA to address greenhouse gas emissions of existing, modified, and reconstructed fossil-fuel-fired steam electric generating units with proposed standards, regulations, or guidelines to be completed by June 1, 2014, and final standards, regulations, or guidelines to be completed by June 1, 2015.  Subsequent state implementation plans are due by June 30, 2016.  Consumers believes that its balanced energy initiative, its present carbon reduction target, and its emphasis on supply diversity will position it favorably to deal with the impact of carbon regulation, but cannot predict the nature or outcome of these proposals.  Consumers will continue to monitor regulatory activity regarding greenhouse gas emissions standards that may affect electric generating units.

FINANCIALPERFORMANCE

For the nine months ended September 30, 2013,2014, CMS Energy’s net income available to common stockholders was $350$381 million, and diluted EPS were $1.29.$1.39.  This compares with net income available to common stockholders of $315$350 million and diluted EPS of $1.17$1.29 for the nine months ended September 30, 2012.  The main2013.  Among the factors contributing to CMS Energy’s improved performance in 20132014 were increased gas deliveries and the absence, in 2013, of the write-off of Consumers’ electric revenue decoupling mechanism regulatory asset in 2012.sales due to colder winter weather.

Consumers’ utility operations are seasonal.  The consumption of electric energy typically increases in the summer months, due primarily to the use of air conditioners and other cooling equipment, while peak demand for natural gas occurs in the winter due to colder temperatures and the resulting use of natural gas as heating fuel.  In addition, Consumers’ electric rates, which follow a seasonal rate design, are higher in the summer months than in the remaining months of the year.  A more detailed discussion of the factors affecting CMS Energy’s and Consumers’ performance can be found in the Results of Operations section that follows this Executive Overview.

CMS Energy and Consumers believe that economic conditions in Michigan are improving.  Consumers expects its electric salesdeliveries to increase annually by about 0.5 to 1.0 percent on average through 2017,2018, driven largely by the continued rise in industrial production.  Excluding the impacts of energy efficiency programs, Consumers expects its electric salesdeliveries to increase by about 1.0 to 1.5 percent annually through 2017.2018.  Consumers is projecting that its gas salesdeliveries will remain relatively stable through 2017.2018.  This outlook reflects growth in gas demand offset by energy efficiency and conservation.

As Consumers seeks to continue to receive fair and timely regulatory treatment, delivering customer value will remain a key strategic priority.  To keep costs down for its utility customers,In order to minimize increases in customer base rates, Consumers has set goals to achieve further annual productivity improvements.  Additionally, Consumers will strive to give priority to capital investments that increase customer value or lower costs.

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RESULTS OF OPERATIONS

CMS ENERGY CONSOLIDATEDRESULTSOFOPERATIONS

Presented in the following table are specific after-tax changes to net income available to common stockholders for 2013 versus 2012:stockholders:

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CONSUMERSELECTRICUTILITYRESULTSOFOPERATIONS

Following is a discussion of significant changes to net income available to common stockholders.

Electric deliveries and rate increases:  For the three months ended September 30, 2013,2014, electric delivery revenues decreased $25$32 million compared with 2012.2013.  This decreasechange reflected $31a $41 million of lower deliveries,reduction due primarily to milder weathera decrease in 2013,sales to Consumers’ higher-margin customers, offset partially by a $6$9 million increase in other revenues attributablerelated primarily to a May 2013 rate increase.the renewable energy program.  Deliveries to end-use customers excluding deliveries to Consumers’ largest customer, which is on an economic development rate, were 9.49.6 billion kWh in 2013, a decrease of 0.32014 and 9.8 billion kWh or three percent, compared with 2012.in 2013.

For the nine months ended September 30, 2013,2014, electric delivery revenues increased $53$35 million compared with 2012.2013.  This increasechange reflected the absence, in 2013, of a $59 million charge to write off Consumers’ electric decoupling regulatory asset in 2012, and a $28$33 million benefit from a May 2013 rate increase that Consumers self-implemented in March 2013.2013, $14 million from a low-income assistance surcharge, and an $11 million increase in other revenues related primarily to the renewable energy program.  These increases were offset partially by $34a $23 million of lower deliveries,reduction due primarily to milder weathera decrease in 2013.sales to Consumers’ higher-margin customers.  Deliveries to end-use customers excluding deliveries to Consumers’ largest customer, which is on an economic development rate, were 26.728.3 billion kWh in 2013, a decrease of 0.22014 and 27.8 billion kWh or one percent, compared with 2012.in 2013.

Other income, net of expenses:  For the three months ended September 30, 2013, other income increased $9 million compared with 2012, and for the nine months ended September 30, 2013,2014, other income, increased $7net of expenses, decreased $6 million compared with 2012.  These increases were2013.  This decrease was due primarily to a contribution to oppose certain Michigan legislative proposals related to ROA, and to the absence, in 2013,2014, of contributionsa gain related to a 2012 Michigan ballot proposal.donation of CMS Energy stock by Consumers.

Maintenance and other operating expenses:For the three months ended September 30, 2013,2014, maintenance and other operating expenses decreased $12increased $21 million compared with 2012.2013.  This decreaseincrease was due to $28 million of increased forestry, service restoration, and other operating and maintenance expenses, offset partially by a $10$7 million reduction in OPEB cost resulting from OPEB Plan changes adopted in July 2013, and a $2 million decrease in other operating expenses.postretirement benefit costs.

For the nine months ended September 30, 2013,2014, maintenance and other operating expenses increased $1$15 million compared with 2012.2013.  This increase reflected the absence, in 2013,was due to $40 million of ahigher forestry and other operating and maintenance expenses, and $14 million recovery associated with Consumers’ canceled coal-fueled plant in 2012.  This increase wasof increased expenses related to a low-income assistance program.  These increases were offset largely by a $10$39 million reduction in OPEB cost resulting from OPEB Plan changes adopted in July 2013 and a $3 million reduction in OPEB cost due to favorable OPEB Plan performance.postretirement benefit costs.

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Depreciation and amortization:  For the three months ended September 30, 2013,2014, depreciation and amortization expense increased $5 million compared with 2012,2013, due primarily to increased plant in service, offset partially by lowerhigher amortization expenses onof certain regulatory assets.

For the nine months ended September 30, 2013,2014, depreciation and amortization expense increased $24$26 million compared with 2012.  This increase was2013, due primarily to increased plant in service in 2014 and an increase in depreciation rates that took effect in June 2012, offset partially by lowerhigher amortization expense onof certain regulatory assets.

General taxes:  For the nine months ended September 30, 2013,2014, general taxes increased $4$9 million compared with 2012,2013, due primarily to increased property taxes, reflecting higher capital spending.

Income taxes:  For the three months ended September 30, 2013,2014, income taxes decreased $2$36 million compared with 2012, reflecting2013.  This change was due to a $9 million benefit associated with the accelerated flow-through of income tax benefits under an MPSC accounting order that Consumers implemented in January 2014, $26 million attributed to lower electric utility earnings, and $1 million for the three months ended September 30, 2013.other tax related items.

For the nine months ended September 30, 2013,2014, income taxes increased $13decreased $34 million compared with 2012, reflecting higher2013.  This change was due to a $22 million benefit associated with the accelerated flow-through of income tax benefits under an MPSC accounting order that Consumers implemented in January 2014, $9 million attributed to lower electric utility earnings, and $3 million for the first nine months of 2013.other tax related items.

CONSUMERSGASUTILITYRESULTSOFOPERATIONS

Following is a discussion of significant changes to net income (loss) available to common stockholders.

Gas deliveries and rate increases:  For the nine months ended September 30, 2013,2014, gas delivery revenues increased $56$39 million compared with 2012.2013.  This increasechange reflected a $52$47 million increase in revenues fromof higher customer deliveries,sales, due primarily to colder weather in 2013, which were2014.  This increase was offset partially by the impact on 2012 revenues of the gas revenue decoupling mechanism, and an $8 million benefit from a June 2012 rate increase that Consumers self-implemented in March 2012.  These increases were offset partially by a $4 million decrease in other revenues.associated with the energy efficiency program.  Deliveries to end-use customers were 234 bcf in 2014 and 206 bcf in 2013, an increase of 34 bcf, or 19.8 percent, compared with 2012.2013.

Maintenance and other operating expenses:  For the three months ended September 30, 2013,2014, maintenance and other operating expenses decreased $2increased $4 million compared with 2012.2013.  This decreasechange was due to a $6 million reduction in OPEB cost resulting from OPEB Plan changes adopted in July 2013, offset partially by a $4 million increase in other operating expenses.

For the nine months ended September 30, 2013, maintenance and other operating expenses decreased $3 million compared with 2012.  This decrease was due to a $6 million reduction in OPEB cost resulting from OPEB Plan changes adopted in July 2013 and a $2 million reduction to OPEB cost due to favorable OPEB Plan performance.  These decreases were offset partially by a $5 million increase in other operating expenses.

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due primarily to increased expenses related to Consumers’ appliance service program, and an increase in uncollectible accounts expense.

For the nine months ended September 30, 2014, maintenance and other operating expenses decreased $7 million compared with 2013.  This decrease was due to a $24 million reduction in postretirement benefit costs, and an $8 million decrease in expenses related to the energy efficiency program.  These decreases were offset largely by a $25 million increase related to pipeline integrity and other gas operating and maintenance expenses.

Depreciation and amortization:  For the nine months ended September 30, 2014, depreciation and amortization expense increased $12 million compared with 2013, due to increased plant in service in 2014.

General taxes:  For the nine months ended September 30, 2014, general taxes increased $4 million compared with 2013, due to increased property taxes, reflecting higher capital spending.

Income taxes:  For the nine months ended September 30, 2013,2014, income taxes increased $21$3 million compared with 2012, due2013.  This change reflected a $10 million increase attributed primarily to higher gas utility earnings, forand a $1 million increase in other tax related items.  These increases were offset largely by an $8 million benefit associated with the first nine monthsaccelerated flow-through of 2013.income tax benefits under an MPSC accounting order that Consumers implemented in January 2014.

ENTERPRISESRESULTSOFOPERATIONS

For the three months ended September 30, 2013,2014, net income of the enterprises segment decreased $9loss increased $3 million compared with 2012.  This decrease was2013, due to a $9 million after-tax increase in the environmental remediation liability associated with Bay Harbor, offset partially by the absence in 2014 of $4 million ofin additional tax expense related to OPEB Plan changes adopted in July 2013 and $5 million2013.  Also offsetting the change was a decrease in higher after-tax expenses due primarily to the absence in 2013 of a 2012 insurance settlement.maintenance expense at certain plants.

For the nine months ended September 30, 2013,2014, the enterprises segment recorded a net loss of $3 million, compared with net income of $1 million in the enterprises segment decreased $8same period of the prior year.  The $4 million compared with 2012.  This decreasechange was due primarily to a $9 million after-tax increase in the environmental remediation liability associated with Bay Harbor, offset partially by the absence in 2014 of $4 million ofin additional tax expense related to OPEB Plan changes adopted in July 2013 and $4 million in higher after-tax expenses due primarily to the absence in 2013 of a 2012 insurance settlement.2013.

CORPORATEINTERESTANDOTHERRESULTSOFOPERATIONS

For the three months ended September 30, 2013,2014 corporate interest and other net expenses increased $3decreased $4 million compared with 2012,2013, due primarily to lower fixed charges and the absence in 2014 of $2 million ofin early debt retirement costs and a $2 million increase in interest expense, reflecting increased borrowings, offset partially by $1 millioncosts.

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Table of higher earnings at EnerBank and lower expenses.Contents

For the nine months ended September 30, 2013,2014, corporate interest and other net expenses increased $4were unchanged from 2013.  An $8 million compared with 2012, due toloss on early extinguishment of debt was offset by a $5$3 million increasereduction in interest expense, reflecting increased borrowings, andmiscellaneous corporate costs, the absence in 2014 of $2 million ofin early debt retirement costs, offset partially by a $3 million benefit attributable toand higher earnings at EnerBank and lower expenses.

EnerBank.

DISCONTINUED OPERATIONS

For the three months ended September 30, 2013 and 2012, the net loss from discontinued operations was less than $1 million.

For the nine months ended September 30, 2013, the net loss from discontinued operations was less than $1 million, compared with income from discontinued operations of $7 million in 2012, reflecting the elimination of a liability related to a prior asset sale.

CASH POSITION, INVESTING, AND FINANCING

At September 30, 2013,2014, CMS Energy had $292$530 million of consolidated cash and cash equivalents, which included $32$37 million of restricted cash and cash equivalents.  At September 30, 2013,2014, Consumers had

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INVESTINGACTIVITIES

Presented in the following table are specific components of net cash used in investing activities for the nine months ended September 30, 20132014 and 2012:2013: