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<div style="margin-top: 12pt; font-size: 10pt;" align="left"><b>3: CONTINGENCIES AND COMMITMENTS</b></div>
<div style="margin-top: 6pt; font-size: 10pt;" align="left"><font style="font-variant: small-caps;" class="_mt"><b>CMS ENERGY CONTINGENCIES</b></font></div>
<div style="margin-top: 6pt; font-size: 10pt;" align="left"><b>Gas Index Price Reporting Investigation: </b>In 2002, CMS Energy notified appropriate regulatory and governmental agencies that some employees at CMS MST and CMS Field Services appeared to have provided inaccurate information regarding natural gas trades to various energy industry publications, which compile and report index prices. CMS Energy cooperated with an investigation by the DOJ regarding this matter. Although CMS Energy has not received any formal notification that the DOJ has completed its investigation, the DOJ's last request for information occurred in 2003, and CMS Energy completed its response to this request in 2004. CMS Energy is unable to predict the outcome of the DOJ investigation and what effect, if any, the investigation will have on CMS Energy. </div>
<div style="margin-top: 6pt; font-size: 10pt;" align="left"><b>Gas Index Price Reporting Litigation: </b>CMS Energy, along with CMS MST, CMS Field Services, Cantera Natural Gas, Inc., and Cantera Gas Company, are named as defendants in various class action and individual lawsuits arising as a result of alleged inaccurate natural gas price reporting to publications that report trade information. Allegations include manipulation of NYMEX natural gas futures and options prices, price-fixing conspiracies, restraint of trade, and artificial inflation of natural gas retail prices in California, Colorado, Kansas, Missouri, Tennessee, and Wisconsin. The following provides more detail on these proceedings: </div>
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<td>In 2005, CMS MST was served with a summons and complaint that named CMS Energy, CMS MST, and CMS Field Services as defendants in a putative class action filed in Kansas state court, Learjet, Inc., et al. v. Oneok, Inc., et al. The complaint alleges that during the putative class period, January 1, 2000 through October 31, 2002, the defendants engaged in a scheme to violate the Kansas Restraint of Trade Act. The plaintiffs, who allege they purchased natural gas from the defendants and others for their facilities, are seeking statutory full consideration damages consisting of the full consideration paid by plaintiffs for natural gas.</td></tr>
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<td>In 2007, a class action complaint, Heartland Regional Medical Center, et al. v. Oneok, Inc. et al., was filed in Missouri state court alleging violations of Missouri antitrust laws. Defendants, including CMS Energy, CMS Field Services, and CMS MST, are alleged to have violated the Missouri antitrust law in connection with their natural gas price reporting activities.</td></tr>
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<td>Breckenridge Brewery of Colorado, LLC and BBD Acquisition Co. v. Oneok, Inc., et al., a class action complaint brought on behalf of retail direct purchasers of natural gas in Colorado, was filed in Colorado state court in May 2006. Defendants, including CMS Energy, CMS Field Services, and CMS MST, are alleged to have violated the Colorado Antitrust Act of 1992 in connection with their natural gas price reporting activities. Plaintiffs are seeking full refund damages.</td></tr></table></div></div>
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<td>A class action complaint, Arandell Corp., et al. v. XCEL Energy Inc., et al., was filed in 2006 in Wisconsin state court on behalf of Wisconsin commercial entities that purchased natural gas between January 1, 2000 and October 31, 2002. The defendants, including CMS Energy, CMS ERM, and Cantera Gas Company, are alleged to have violated Wisconsin's antitrust statute. The plaintiffs are seeking full consideration damages, plus exemplary damages, and attorneys' fees. After dismissal on jurisdictional grounds in 2009, plaintiffs filed a new Arandell case in Michigan. The CMS Energy defendants filed a motion to dismiss the new Michigan case on statute-of-limitations grounds and that motion remains pending.</td></tr>
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<td>Another class action complaint, Newpage Wisconsin System v. CMS ERM, CMS Energy, and Cantera Gas Company, was filed in 2009 in circuit court in Wood County, Wisconsin, against CMS Energy defendants and 19 other non-CMS Energy companies. The plaintiff is seeking full consideration damages, treble damages, costs, interest, and attorneys' fees.</td></tr>
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<td>In 2005, J.P. Morgan Trust Company, in its capacity as Trustee of the FLI Liquidating Trust, filed an action in Kansas state court against a number of energy companies, including CMS Energy, CMS MST, and CMS Field Services. The complaint alleges various claims under the Kansas Restraint of Trade Act. The plaintiff is seeking statutory full consideration damages for its purchases of natural gas between January 1, 2000 and December 31, 2001. This case is part of the MDL proceeding, but is not a class action.</td></tr></table></div>
<div style="margin-top: 6pt; font-size: 10pt;" align="left">After removal to federal court, the Learjet, Heartland, Breckenridge, both Arandell cases, Newpage, and J.P. Morgan cases were transferred to the MDL case. CMS Energy was dismissed from the Learjet, Heartland, and J.P. Morgan cases in 2009, but other CMS Energy defendants remain parties. All CMS Energy defendants were dismissed from the Breckenridge case in 2009. It is expected that the plaintiffs in this case will appeal this decision after all claims against defendants have been dismissed. At this time, there is no pending appeal. In June 2010, CMS Energy and Cantera Gas Company were dismissed from the Newpage case; the Arandell (Wisconsin) case was reinstated against CMS ERM; and the Arandell (Wisconsin) case was consolidated with the Newpage case. These two consolidated cases remain pending only against CMS ERM. Pending before the court in all of the MDL cases are the defendants' renewed motions for summary judgment based on FERC preemption and the plaintiffs' motion for leave to amend their complaint to add a federal Sherman Act antitrust claim. In all but the J.P. Morgan case, there are also pending plaintiffs' motions for class certification. These motions are not yet decided. </div>
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<td>In 2005, Samuel D. Leggett, et al. v. Duke Energy Corporation, et al., a class action complaint brought on behalf of retail and business purchasers of natural gas in Tennessee, was filed in the Chancery Court of Fayette County, Tennessee. The defendants included CMS Energy, CMS MST, and CMS Field Services. In April 2010, the Tennessee Supreme Court dismissed all claims against all defendants.</td></tr>
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<td>In 2006, CMS Energy and CMS MST were each served with a summons and complaint which named CMS Energy, CMS MST, and CMS Field Services as defendants in an action filed in Missouri state court, titled Missouri Public Service Commission v. Oneok, Inc., alleging violation of the Missouri antitrust law, fraud, and unjust enrichment. In 2009, all defendants were dismissed for lack of standing. The Missouri Court of Appeals affirmed the dismissals in late 2009. In February 2010, the plaintiff filed an application for leave to appeal with the Missouri Supreme Court, seeking to overturn the Missouri Court of Appeals decision. In April 2010, the Missouri Supreme Court granted review to hear the case. Oral argument on the appeal is scheduled for September 2010 in the Missouri Supreme Court.</td></tr></table></div>
<div style="margin-top: 6pt; font-size: 10pt;" align="left">These cases involve complex facts, a large number of similarly situated defendants with different factual positions, and multiple jurisdictions. Presently, any estimate of liability would be highly speculative; the amount of CMS Energy's possible loss would be based on widely varying models previously untested in this context. Defenses are being pursued vigorously, which could result in the dismissal of the cases completely, but CMS Energy is unable to predict the outcome of these matters. If the outcome is unfavorable, these cases could have a material adverse impact on CMS Energy's financial condition and results of operations. </div></div>
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<div style="margin-top: 6pt; font-size: 10pt;" align="left"><b>Bay Harbor: </b>As part of the development of Bay Harbor by certain subsidiaries of CMS Energy, and under an agreement with the MDNRE, third parties constructed a golf course and park over several abandoned CKD piles left over from the former cement plant operations on the Bay Harbor site. The third parties also undertook a series of remedial actions, including constructing a leachate collection system at an identified seep. Leachate is produced when water enters into the CKD piles. In 2002, CMS Energy sold its interest in Bay Harbor, but retained its obligations under environmental indemnities entered into at the start of the project. </div>
<div style="margin-top: 6pt; font-size: 10pt;" align="left">In 2005, the EPA, along with CMS Land and CMS Capital, voluntarily executed an AOC under Superfund and approved a Removal Action Work Plan to address contamination issues at Bay Harbor. Collection systems required under the plan have been installed and effectiveness monitoring of the systems at the shoreline is ongoing. CMS Land, CMS Capital, and the EPA agreed upon augmentation measures to address areas where pH measurements were not satisfactory. The augmentation measures were implemented and completed in 2009. </div>
<div style="margin-top: 6pt; font-size: 10pt;" align="left">In 2008, the MDNRE and the EPA granted permits for CMS Land or its affiliate, Beeland, to construct and operate a deep injection well in Antrim County, Michigan, to dispose of leachate from Bay Harbor. Certain environmental groups, a local township, and a local county filed lawsuits appealing the permits. The legal proceeding was stayed in 2009 and can be renewed by either party at any time. CMS Land and CMS Capital continue to seek a lower cost long-term water disposal option including using deep injection wells, permitted discharge to surface water, and disposal with a local municipal water treatment facility. </div>
<div style="margin-top: 6pt; font-size: 10pt;" align="left">Various claims have been brought against CMS Land or its affiliates, including CMS Energy, alleging environmental damage to property, loss of property value, insufficient disclosure of environmental matters, breach of agreement relating to access, or other matters. There is presently one lawsuit (Jankowski v. CMS Energy, CMS Capital, and CMS Land) pending that was filed in June 2010 in Emmet County Circuit Court in Michigan relating to such subjects. </div>
<div style="margin-top: 6pt; font-size: 10pt;" align="left">CMS Land and CMS Capital, the MDNRE, the EPA, and other parties are negotiating the long-term remedy for the Bay Harbor sites, including: </div>
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<td>the disposal of leachate;</td></tr>
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<td>the capping and excavation of CKD;</td></tr>
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<td>the location and design of collection lines and upstream diversion of water;</td></tr>
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<td>potential flow of leachate below the collection system;</td></tr>
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<td>applicable criteria for various substances such as mercury; and</td></tr>
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<td>other matters that are likely to affect the scope of remedial work that CMS Land and CMS Capital may be obligated to undertake.</td></tr></table></div>
<div style="margin-top: 6pt; font-size: 10pt;" align="left">CMS Energy has recorded a cumulative charge related to Bay Harbor of $180 million. At June 30, 2010, CMS Energy had a recorded liability of $70 million for its remaining obligations. CMS Energy calculated this liability based on discounted projected costs, using a discount rate of 4.32 percent and an inflation rate of one percent on annual operating and maintenance costs. CMS Energy based the discount rate on the interest rate for 30-year U.S. Treasury securities on June 30, 2009. The undiscounted amount of the remaining obligation is $91 million. CMS Energy expects to pay $12 million during the remainder of 2010, $9 million in 2011, $7 million in 2012, $5 million in 2013, and the remaining amount thereafter on long-term liquid disposal and operating and maintenance costs. </div></div>
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<div style="margin-top: 6pt; font-size: 10pt;" align="left">CMS Energy's estimate of remedial action costs and the timing of expenditures could change if there are additional major changes in circumstances or assumptions, including but not limited to: </div>
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<td>inability to secure a suitable long-term water disposal option at a reasonable cost;</td></tr>
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<td>further increases in water disposal costs under existing options;</td></tr>
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<td>delays in developing a long-term water disposal option;</td></tr>
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<td>an increase in the number of contamination areas;</td></tr>
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<td>different remediation techniques;</td></tr>
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<td>the nature and extent of contamination;</td></tr>
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<td>continued inability to reach agreement with the MDNRE or the EPA over required remedial actions;</td></tr>
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<td>delays in the receipt of requested permits;</td></tr>
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<td>delays following the receipt of any requested permits due to legal appeals of third parties;</td></tr>
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<td>additional or new legal or regulatory requirements; or</td></tr>
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<td>new or different landowner claims.</td></tr></table></div>
<div style="margin-top: 6pt; font-size: 10pt;" align="left">Depending on the size of any indemnity obligation or liability under environmental laws, an adverse outcome of this matter could have a material adverse effect on CMS Energy's liquidity and financial condition and could negatively affect CMS Energy's financial results. CMS Energy cannot predict the financial impact or outcome of this matter. </div>
<div style="margin-top: 6pt; font-size: 10pt;" align="left"><b>State Street Bank and TSU Litigation: </b>In 2002, State Street Bank sued CMS Viron in the District Court of Harris County, Texas, claiming primarily a breach of representations and warranties and seeking $9 million plus interest from CMS Viron. During the same year, CMS Viron filed a counterclaim, as well as third-party actions against TSU, Academic Capital Group, Inc., and Academic Services, Inc. for breach of contract and fiduciary duties and conversion. In December 2009, the jury rendered a verdict in favor of CMS Viron and a final judgment was rendered on January 15, 2010 awarding CMS Viron $8 million plus prejudgment interest from TSU and another $3 million plus prejudgment interest and attorneys' fees against Academic Capital Group, Inc. and Academic Services, Inc., collectively. This verdict is affected by an agreement under which CMS Viron agreed to pay $3 million to State Street Bank regardless of the verdict. In addition, State Street Bank agreed to assign certain rights of indemnification under a lease agreement to CMS Viron in return for a two-thirds stake in any ultimate recovery from TSU. At June 30, 2010, CMS Energy had a recorded liability of $3 million for its potential obligation related to this matter. </div>
<div style="margin-top: 6pt; font-size: 10pt;" align="left"><b>Equatorial Guinea Tax Claim: </b>In 2004, CMS Energy received a request for indemnification from the purchaser of CMS Oil and Gas. The indemnity claim relates to the sale of CMS Energy's oil, gas, and methanol projects in Equatorial Guinea and the claim of the government of Equatorial Guinea that CMS Energy owes $142 million in taxes in connection with that sale. CMS Energy concluded that the government's tax claim is without merit and the purchaser of CMS Oil and Gas submitted a response to the government rejecting the claim. The government of Equatorial Guinea has indicated that it still intends to pursue its claim. CMS Energy cannot predict the financial impact or outcome of this matter. </div>
<div style="margin-top: 6pt; font-size: 10pt;" align="left"><b>Marathon Indemnity Claim regarding F.T. Barr Claim: </b>In 2001, F.T. Barr filed a lawsuit in Harris County District Court in Texas against CMS Energy, CMS Oil and Gas, and other defendants alleging that his overriding royalty payments related to Alba field production were improperly calculated. In 2004, all parties signed a confidential settlement agreement that resolved claims between Barr and the defendants. The CMS Energy defendants reserved all defenses to any indemnity claim relating to the settlement. </div>
<div style="margin-top: 6pt; font-size: 10pt;" align="left">In April 2009, certain Marathon entities filed a case in the U.S. District Court for the Southern District of Texas against CMS Enterprises for indemnification in connection with this matter. CMS Energy entities dispute Marathon's claim, and are opposing it vigorously. CMS Energy entities also assert that Marathon has suffered minimal, if any, damages. CMS Energy cannot predict the outcome of this matter. If Marathon's claim were sustained, it would have a material effect on CMS Energy's future earnings and cash flow. </div></div>
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<div style="margin-top: 6pt; font-size: 10pt;" align="left"><b>Former NOMECO Employees' Litigation: </b>In June 2010, eight former employees of NOMECO filed a lawsuit in Ingham County Circuit Court in Michigan against CMS Energy and three Marathon entities (Richard Rulewicz, Trustee of the Richard Rulewicz Revocable Living Trust, et al. v. CMS Energy) alleging underpayment of the former employees' overriding royalty payments related to the Alba field production in Equatorial Guinea, to which the plaintiffs claim to be entitled. CMS Oil and Gas sold its interests in the Alba field to Marathon in 2002. CMS Energy cannot predict the financial impact or outcome of this matter. CMS Energy believes that it may be entitled to full or partial indemnification from Marathon for monetary damages that may arise from this lawsuit. </div>
<div style="margin-top: 6pt; font-size: 10pt;" align="left"><font style="font-variant: small-caps;" class="_mt"><b>CONSUMERS' ELECTRIC UTILITY CONTINGENCIES</b></font> </div>
<div style="margin-top: 6pt; font-size: 10pt;" align="left"><b>Electric Environmental Matters: </b>Consumers' operations are subject to environmental laws and regulations. Generally, Consumers has been able to recover, in customer rates, the costs to operate its facilities in compliance with these laws and regulations. </div>
<div style="margin-top: 6pt; font-size: 10pt;" align="left"><i>Cleanup and Solid Waste: </i>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. At June 30, 2010, Consumers had a recorded liability of $1 million, its estimated probable NREPA liability. </div>
<div style="margin-top: 6pt; font-size: 10pt;" align="left">Consumers is a potentially responsible party at a number of contaminated sites administered under the Superfund. Superfund liability is joint and several. In addition to Consumers, many other creditworthy parties with substantial assets are potentially responsible with respect to the individual sites. Based on its experience, Consumers estimates that its share of the total liability for known Superfund sites will be between $2 million and $8 million. Various factors, including the number of potentially responsible parties involved with each site, affect Consumers' share of the total liability. At June 30, 2010, Consumers had a recorded liability of $2 million, the minimum amount in the range of its estimated probable Superfund liability. </div>
<div style="margin-top: 6pt; font-size: 10pt;" align="left">The timing of payments related to Consumers' remediation and other response activities at its Superfund and NREPA sites is uncertain. Consumers periodically reviews these cost estimates. Any significant change in the underlying assumptions, such as an increase in the number of sites, different remediation techniques, nature and extent of contamination, and legal and regulatory requirements, could affect its estimates of NREPA and Superfund liability. </div>
<div style="margin-top: 6pt; font-size: 10pt;" align="left"><i>Ludington PCB: </i>In 1998, during routine maintenance activities, Consumers identified PCB as a component in certain paint, grout, and sealant materials at Ludington. Consumers removed and replaced part of the PCB material with non-PCB material. Since proposing a plan to take action with respect to the remaining materials, Consumers has had several communications with the EPA. Consumers is not able to predict when the EPA will issue a final ruling and cannot predict the financial impact or outcome of this matter. </div>
<div style="margin-top: 6pt; font-size: 10pt;" align="left"><i>Electric Utility Plant Air Permit Issues and Notices of Violation: </i>In 2007, Consumers received an NOV/FOV from the EPA alleging that fourteen utility boilers exceeded the visible emission limits in their associated air permits. Consumers has responded formally to the NOV/FOV denying the allegations. In addition, in 2008, Consumers received an NOV for three of its coal-fueled facilities alleging, among other things, violations of NSR PSD regulations relating to ten projects from 1986 to 1998 allegedly subject to NSR review. The EPA has alleged that some utilities have classified incorrectly major plant modifications as RMRR rather than seeking permits from the EPA or state regulatory agencies to modify their plants. Consumers responded to the information requests from the EPA on this subject in the past. Consumers believes that it has properly interpreted the requirements of RMRR. </div></div>
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<div style="margin-top: 6pt; font-size: 10pt;" align="left">Consumers is engaged in discussions with the EPA on all of these matters. Depending upon the outcome of these discussions, the EPA could bring legal action against Consumers and/or Consumers could be required to install additional pollution control equipment at some or all of its coal-fueled electric generating plants, surrender emission allowances, engage in Supplemental Environmental Programs, and/or pay fines. Additionally, Consumers would need to assess the viability of continuing operations at certain plants. Consumers cannot predict the financial impact or outcome of these matters. Although the potential costs relating to these matters could be material and cost recovery cannot be reasonably estimated, Consumers expects that it would be able to recover some or all of the costs in rates, consistent with the recovery of other reasonable costs of complying with environmental laws and regulations. </div>
<div style="margin-top: 12pt; font-size: 10pt;" align="left"><b>Nuclear Matters:</b> </div>
<div style="margin-top: 6pt; font-size: 10pt;" align="left"><i>DOE Litigation: </i>In 1997, a U.S. Court of Appeals decision confirmed that the DOE was to begin accepting deliveries of spent nuclear fuel for disposal by January 1998. Subsequent U.S. Court of Appeals litigation, in which Consumers and other utilities participated, has not been successful in producing more specific relief for the DOE's failure to accept the spent nuclear fuel. </div>
<div style="margin-top: 6pt; font-size: 10pt;" align="left">A number of court decisions support the right of utilities to pursue damage claims in the U.S. Court of Claims against the DOE for failure to take delivery of spent nuclear fuel. Consumers filed a complaint in 2002. If Consumers' litigation against the DOE is successful, Consumers plans to use any recoveries as reimbursement for the incurred costs of spent nuclear fuel storage during Consumers' ownership of Palisades and Big Rock. Consumers cannot predict the financial impact or outcome of this matter. The sale of Palisades and the Big Rock ISFSI did not transfer the right to any recoveries from the DOE related to costs of spent nuclear fuel storage incurred during Consumers' ownership of Palisades and Big Rock. </div>
<div style="margin-top: 6pt; font-size: 10pt;" align="left"><i>Nuclear Fuel Disposal Cost: </i>Consumers has a recorded liability of $163 million for amounts it collected from customers before 1983 to fund the disposal of spent nuclear fuel. This amount, which includes interest of $119 million, is payable to the DOE when it begins to accept delivery of spent nuclear fuel. In conjunction with the sale of Palisades and the Big Rock ISFSI in 2007, Consumers retained this obligation and provided a letter of credit to Entergy as security for this obligation. </div>
<div style="margin-top: 6pt; font-size: 10pt;" align="left"><font style="font-variant: small-caps;" class="_mt"><b>CONSUMERS' GAS UTILITY CONTINGENCIES</b></font> </div>
<div style="margin-top: 6pt; font-size: 10pt;" align="left"><b>Gas Environmental Matters: </b>Consumers expects to incur remediation and other response activity costs at a number of sites under the 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 June 30, 2010, Consumers estimated its undiscounted remaining remediation and other response activity costs to be between $33 million and $48 million. Generally, Consumers has been able to recover most of its costs to date through proceeds from insurance settlements and customer rates. </div>
<div style="margin-top: 6pt; font-size: 10pt;" align="left">At June 30, 2010, Consumers had a recorded liability of $33 million and a regulatory asset of $61 million that included $28 million of deferred MGP expenditures. The timing of payments related to the remediation and other response activity at Consumers' former MGP sites is uncertain. Consumers expects its remediation and other response activity costs to average $6 million annually over the next five years. 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. </div></div>
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<div style="margin-top: 6pt; font-size: 10pt;" align="left"><font style="font-variant: small-caps;" class="_mt"><b> </b></font> </div>
<div style="margin-top: 6pt; font-size: 10pt;" align="left"><font style="font-variant: small-caps;" class="_mt"><b>CONSUMERS' OTHER CONTINGENCIES</b></font> </div>
<div style="margin-top: 6pt; font-size: 10pt;" align="left"><b>Michigan Sales/Use Tax</b>: Consumers was audited recently by the State of Michigan and assessed $35 million in additional sales and use tax for the tax years 1997 through 2004. This assessment, which comprises tax and interest, relates to the denial of an industrial processing exemption from sales and use tax on certain of Consumers' equipment and supply purchases. Consumers will contest the assessment in the Michigan Court of Claims. To do so, it must first pay the assessment so that a filing can be made in the Michigan Court of Claims. At June 30, 2010, Consumers had a recorded liability of $35 million related to this matter. </div>
<div style="margin-top: 12pt; font-size: 10pt;" align="left"><b>GUARANTEES</b> </div>
<div style="margin-top: 6pt; font-size: 10pt;" align="left">The following table describes CMS Energy's guarantees at June 30, 2010: </div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="52%"> </td>
<td width="5%"> </td>
<td width="7%"> </td>
<td width="5%"> </td>
<td width="7%"> </td>
<td width="5%"> </td>
<td width="7%"> </td>
<td width="5%"> </td>
<td width="7%"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td style="border-bottom: #000000 1px solid;" colspan="9" nowrap="nowrap" align="right">In Millions</td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td nowrap="nowrap" align="center">Issue</td>
<td> </td>
<td nowrap="nowrap" align="left">Expiration</td>
<td> </td>
<td nowrap="nowrap" align="center">Maximum</td>
<td> </td>
<td nowrap="nowrap" align="center">Carrying</td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td nowrap="nowrap" align="left">Guarantee Description</td>
<td> </td>
<td nowrap="nowrap" align="center">Date</td>
<td> </td>
<td nowrap="nowrap" align="left">Date</td>
<td> </td>
<td nowrap="nowrap" align="center">Obligation</td>
<td> </td>
<td nowrap="nowrap" align="center">Amount</td></tr>
<tr style="font-size: 1px;"><td style="border-top: #000000 1px solid;" colspan="9" align="left"> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Indemnity obligations from asset sales and other agreements</div></td>
<td> </td>
<td valign="top" align="left">Various</td>
<td> </td>
<td valign="top" nowrap="nowrap" align="left">Various through</td>
<td> </td>
<td valign="bottom" align="center">$845 (a)</td>
<td> </td>
<td valign="bottom" align="center">$12</td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td valign="top" align="left"> </td>
<td> </td>
<td valign="top" align="left">June 2022</td>
<td> </td>
<td valign="bottom" align="center"> </td>
<td> </td>
<td valign="bottom" align="center"> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td valign="top" align="left"> </td>
<td> </td>
<td valign="top" align="left"> </td>
<td> </td>
<td valign="bottom" align="center"> </td>
<td> </td>
<td valign="bottom" align="center"> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Guarantees and put options (b)</div></td>
<td> </td>
<td valign="top" align="left">Various</td>
<td> </td>
<td valign="top" align="left">Various through</td>
<td> </td>
<td valign="bottom" align="center">36</td>
<td> </td>
<td valign="bottom" align="center"> 1</td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td valign="top" align="left"> </td>
<td> </td>
<td valign="top" align="left">December 2011</td>
<td> </td>
<td valign="bottom" align="center"> </td>
<td> </td>
<td valign="bottom" align="center"> </td></tr>
<tr style="font-size: 1px;"><td style="border-top: #000000 3px double;" colspan="9" align="left"> </td></tr></table></div>
<div style="margin-top: 3pt;">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr><td width="3%"> </td>
<td width="1%"> </td>
<td width="96"> </td></tr>
<tr valign="top"><td nowrap="nowrap" align="left">(a)</td>
<td> </td>
<td>The majority of this amount arises from stock and asset sales agreements under which CMS Energy or a subsidiary of CMS Energy, other than Consumers, indemnified the purchaser for losses resulting from various matters, including claims related to tax disputes, claims related to PPAs, and defects in title to the assets or stock sold to the purchaser by CMS Energy subsidiaries. Except for items described elsewhere in this Note, CMS Energy believes the likelihood of material loss to be remote for the indemnity obligations not recorded as liabilities.</td></tr>
<tr style="font-size: 3pt;"><td> </td></tr>
<tr valign="top"><td nowrap="nowrap" align="left">(b)</td>
<td> </td>
<td>At June 30, 2010, the carrying amount of CMS Land's put option agreements with certain Bay Harbor property owners was $1 million. If CMS Land is required to purchase a Bay Harbor property under a put option agreement, it may sell the property to recover the amount paid under the put option agreement.</td></tr></table></div>
<div style="margin-top: 6pt; font-size: 10pt;" align="left">At June 30, 2010, the maximum obligation and carrying amounts for Consumers' guarantees were less than $1 million. </div></div>
<div style="font-family: 'Times New Roman',Times,serif;">
<div style="margin-top: 6pt; font-size: 10pt;" align="left"> </div>
<div style="margin-top: 6pt; font-size: 10pt;" align="left">The following table provides additional information regarding CMS Energy's guarantees: </div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="35%"> </td>
<td width="2%"> </td>
<td width="35%"> </td>
<td width="2%"> </td>
<td width="35%"> </td></tr>
<tr style="font-size: 1px;"><td style="border-top: #000000 1px solid;" valign="top" colspan="5" align="left"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">Events That Would Require</td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td nowrap="nowrap" align="left">Guarantee Description</td>
<td> </td>
<td nowrap="nowrap" align="left">How Guarantee Arose</td>
<td> </td>
<td nowrap="nowrap" align="left">Performance</td></tr>
<tr style="font-size: 1px;"><td style="border-top: #000000 1px solid;" valign="top" colspan="5" align="left"> </td></tr>
<tr valign="bottom"><td valign="top">
<div style="text-indent: 0px; margin-left: 0px;">Indemnity obligations from asset sales and other agreements </div></td>
<td> </td>
<td valign="top" align="left">Stock and asset sales agreements </td>
<td> </td>
<td valign="top" align="left">Findings of misrepresentation, breach of warranties, tax claims, and other specific events or circumstances</td></tr>
<tr valign="bottom"><td valign="top">
<div style="text-indent: 0px; margin-left: 0px;"> </div></td>
<td> </td>
<td valign="top" align="left"> </td>
<td> </td>
<td valign="top" align="left"> </td></tr>
<tr valign="bottom"><td valign="top">
<div style="text-indent: 0px; margin-left: 0px;">Surety bonds and other indemnity obligations </div></td>
<td> </td>
<td valign="top" align="left">Normal operating activity, permits and licenses </td>
<td> </td>
<td valign="top" align="left">Nonperformance</td></tr>
<tr valign="bottom"><td valign="top">
<div style="text-indent: 0px; margin-left: 0px;"> </div></td>
<td> </td>
<td valign="top" align="left"> </td>
<td> </td>
<td valign="top" align="left"> </td></tr>
<tr valign="bottom"><td valign="top">
<div style="text-indent: 0px; margin-left: 0px;">Guarantees and put options </div></td>
<td> </td>
<td valign="top" align="left">Normal operating activity </td>
<td> </td>
<td valign="top" align="left">Nonperformance or non-payment by a subsidiary under a related contract </td></tr>
<tr valign="bottom"><td valign="top">
<div style="text-indent: 0px; margin-left: 0px;"> </div></td>
<td> </td>
<td valign="top" align="left"> </td>
<td> </td>
<td valign="top" align="left"> </td></tr>
<tr valign="bottom"><td valign="top">
<div style="text-indent: 0px; margin-left: 0px;"> </div></td>
<td> </td>
<td valign="top" align="left">Bay Harbor remediation efforts</td>
<td> </td>
<td valign="top" align="left">Owners exercising put options requiring CMS Land to purchase property</td></tr>
<tr style="font-size: 1px;"><td style="border-top: #000000 3px double;" valign="top" colspan="5" align="left"> </td></tr></table></div>
<div style="margin-top: 6pt; font-size: 10pt;" align="left">CMS Energy, Consumers, and certain other subsidiaries of CMS Energy also enter into various agreements containing tax and other indemnity provisions for which they are unable to estimate the maximum potential obligation. These factors include unspecified exposure under certain agreements. CMS Energy and Consumers consider the likelihood that they would be required to perform or incur substantial losses related to these indemnities to be remote. </div>
<div style="margin-top: 12pt; font-size: 10pt;" align="left"><b>OTHER CONTINGENCIES</b> </div>
<div style="margin-top: 6pt; font-size: 10pt;" align="left">In addition to the matters disclosed in this Note and Note 4, Utility Rate Matters, there are certain other lawsuits and administrative proceedings before various courts and governmental agencies arising in the ordinary course of business to which CMS Energy, Consumers, and certain other subsidiaries of CMS Energy are parties. These other lawsuits and proceedings may involve personal injury, property damage, contracts, environmental issues, federal and state taxes, rates, licensing, and other matters. 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 will not have a material adverse effect on their consolidated results of operations, financial position, or cash flows. </div></div> </div>3: CONTINGENCIES AND COMMITMENTS
CMS ENERGY CONTINGENCIES
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