Proceeds from divestiture of businesses

[Table of Contents](#iedef37dc53354d4baa10c50c5095e29f_25)As of June 30, 2022, the cumulative cost incurred and charged to expense related to the D.E. Karn retention incentive program was $16 million. Additionally, an amount of $4 million has been capitalized as a cost of plant, property, and equipment and an amount of $9 million has been deferred as a regulatory asset. The cumulative cost incurred and deferred as a regulatory asset related to the J.H. Campbell retention incentive program was less than $1 million.Presented in the following table is a reconciliation of the retention benefit liability recorded in other liabilities on Consumers’ consolidated balance sheets:

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| In Millions |
|  |  |  | Six Months Ended |
| June 30 |  |  |  | 2022 | 2021 |
| Retention benefit liability at beginning of period |  |  |  |  |  |  | $ | 14  |  |  | $ | 11  |  |
|  |  |  |  |  |  |  |  |  |  |
| Costs deferred as a regulatory asset1 |  |  |  |  |  |  | 3  |  |  | 4  |  |
|  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |
| Retention benefit liability at the end of the period2 |  |  |  |  |  |  | $ | 17  |  |  | $ | 15  |  |

1Includes $2 million for the three months ended June 30, 2022 and 2021.2Includes current portion of other liabilities of $6 million at June 30, 2022 and $5 million at June 30, 2021.Discontinued Operations: On October 1, 2021, EnerBank was acquired by Regions Bank. CMS Energy received proceeds of over $1 billion from the transaction and recognized a pre-tax gain of $657 million in 2021. In March 2022, CMS Energy received $6 million of additional proceeds as the result of a post-closing adjustment. Net of related transaction costs, CMS Energy recognized a pre-tax gain of $5 million during the six months ended June 30, 2022.In December 2021, CMS Energy submitted a notice of disagreement to Regions Bank relating to a $36 million negative post-closing purchase price adjustment that it believed was inconsistent with the merger agreement. In accordance with the merger agreement, the disputed adjustment was submitted to a mutually agreed upon independent accounting firm for final determination. In June 2022, the accounting firm rendered a determination on the disputed items entirely in favor of CMS Energy. As a result, no further adjustment was required in 2022.EnerBank’s results of operations through the date of the sale are presented as income from discontinued operations on CMS Energy’s consolidated statements of income for the three and six months ended 88
