CMS ENERGY CORP

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

1 A 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.

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

3 Consumers’ 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.

4 Includes 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.

5 Underground 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.

6 For 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:

1 Consumers’ 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.

2 Leasehold 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:

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

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:

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:

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:

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

Jointly Owned Regulated Utility Facilities

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

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.