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Financings | 9 Months Ended
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Sep. 30, 2011
Financings | 5: FINANCINGS Presented in the following table is a summary of major long-term debt transactions during the nine months ended September 30, 2011:
|  | Principal |  |  |  |  |  |  | Issue/Retirement |  |  |  |
|  | (In Millions) |  |  | Interest Rate |  |  | Date |  |  | Maturity Date |
Debt Issuances |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
CMS Energy |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Senior notes |  | $ | 250 |  |  |  | 2.75 | % |  | May 2011 |  | May 2014
Consumers |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Tax-exempt bonds1 |  |  | 68 |  |  | Variable |  | May 2011 |  | April 2018
Tax-exempt bonds1 |  |  | 35 |  |  | Variable |  | May 2011 |  | April 2035
Total |  | $ | 353 |  |  |  |  |  |  |  |  |  |  |  |  |
Debt Retirements |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
CMS Energy |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Senior notes |  | $ | 146 |  |  |  | 8.5 | % |  | April 2011 |  | April 2011
Consumers |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Nuclear fuel disposal liability2 |  |  | 163 |  |  | Variable |  | July 2011 |  |  | — |
Tax-exempt bonds1 |  |  | 68 |  |  | Variable |  | May 2011 |  | April 2018
Tax-exempt bonds1 |  |  | 35 |  |  | Variable |  | May 2011 |  | April 2035
Total |  | $ | 412 |  |  |  |  |  |  |  |  |  |  |  |  |
1 In May 2011, Consumers utilized the Michigan Strategic Fund for the issuance of $68 million and $35 million of tax-exempt Michigan Strategic Fund Variable Rate Limited Obligation Revenue Bonds. The initial interest rate, which resets weekly, was 0.26 percent for the $68 million bond issuance and 0.28 percent for the $35 million bond issuance. The bonds, which are backed by letters of credit and collateralized by FMBs, are subject to optional tender by the holders that would result in remarketing. Consumers used the proceeds to redeem $103 million of tax-exempt bonds in May 2011. 2 In July 2011, Consumers settled its nuclear fuel disposal liability with the DOE. For additional details, see the "Consumers' Electric Utility Contingencies — Nuclear Matters" section in Note 3, Contingencies and Commitments. In September 2011, CMS Energy called $50 million principal amount of its 6.3 percent senior notes due in 2012 for redemption in October 2011. Revolving Credit Facilities: The following secured revolving credit facilities with banks were available at September 30, 2011:
In Millions |
|  |  |  |  |  |  |  |  |  | Letters of Credit |  |  |  |
Expiration Date |  | Amount of Facility |  |  | Amount Borrowed |  |  | Outstanding |  |  | Amount Available |
CMS Energy |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
March 31, 20161 |  | $ | 550 |  |  | $ | — |  |  | $ | 3 |  |  | $ | 547 |
Consumers |  |
March 31, 20162, 3 |  | $ | 500 |  |  | $ | — |  |  | $ | 1 |  |  | $ | 499 |
August 9, 20133 |  |  | 150 |  |  |  | — |  |  |  | — |  |  |  | 150 |
September 9, 20143,4 |  |  | 30 |  |  |  | — |  |  |  | 30 |  |  |  | — |
1 On March 31, 2011, CMS Energy entered into a $550 million secured revolving credit facility with a consortium of banks. This facility has a five-year term and replaces CMS Energy's revolving credit facility that was set to expire in 2012. Obligations under this facility are secured by Consumers common stock. CMS Energy's average borrowings during the nine months ended September 30, 2011 totaled $14 million, with a weighted-average annual interest rate of 2.22 percent, representing LIBOR plus 2.00 percent 2 On March 31, 2011, Consumers entered into a $500 million secured revolving credit facility with a consortium of banks. This facility has a five-year term and replaces Consumers' revolving credit facility that was set to expire in 2012. 3 Obligations under this facility are secured by FMBs of Consumers. 4 Secured revolving letter of credit facility. Short-term Borrowings: Under Consumers' revolving accounts receivable sales program, Consumers may transfer up to $250 million of accounts receivable, subject to certain eligibility requirements. These transactions are accounted for as short-term secured borrowings. At September 30, 2011, $250 million of accounts receivable were eligible for transfer, and no accounts receivable had been transferred under the program. During the nine months ended September 30, 2011, Consumers had no borrowings under this program. Contingently Convertible Securities: Presented in the following table are the significant terms of CMS Energy's contingently convertible securities at September 30, 2011:
|  |  |  |  |  | Outstanding |  |  | Adjusted Conversion |  |  | Adjusted |
Security |  | Maturity |  |  | (In Millions) |  |  | Price |  |  | Trigger Price |
2.875% senior notes |  |  | 2024 |  |  | $ | 288 |  |  | $ | 12.67 |  |  | $ | 15.20 |
5.50% senior notes |  |  | 2029 |  |  |  | 172 |  |  |  | 14.26 |  |  |  | 18.54 |
During 20 of the last 30 trading days ended September 30, 2011, the adjusted trigger-price contingencies were met for both series of the contingently convertible senior notes, and as a result, the senior notes are convertible at the option of the security holders for the three months ending December 31, 2011. Presented in the following table are details about conversions of contingently convertible securities during the nine months ended September 30, 2011:
3.375%contingently |  |  |  |  |  |  |  | Conversion Value |  |  |  |  |  | Cash Paid on
convertible senior |  |  |  | Principal Converted |  | per $1,000 of |  | Common Stock Issued |  | Settlement
notes due 2023 |  | Conversion Date |  | (In Millions) |  | principal |  | on Settlement |  | (In Millions)
Voluntary conversion |  | January 2011 |  | $ | 4 |  | $ | 1,994.21 |  |  | 197,472 |  | $ | 4
Dividend Restrictions: Under provisions of CMS Energy's senior notes indenture, at September 30, 2011, payment of common stock dividends by CMS Energy was limited to $1.2 billion. Under the provisions of its articles of incorporation, at September 30, 2011, Consumers had $510 million of unrestricted retained earnings available to pay common stock dividends 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 common stock dividends from Consumers would not be limited to amounts in Consumers' retained earnings. Any decision by Consumers to pay common stock dividends in excess of retained earnings would be based on specific facts and circumstances and would result only after a formal regulatory filing process. For the nine months ended September 30, 2011, CMS Energy received $292 million of common stock dividends from Consumers. Issuance of Common Stock: On June 15, 2011, CMS Energy entered into a continuous equity offering program under which CMS Energy may sell, from time to time in "at the market" offerings, common stock having an aggregate sales price of up to $50 million. In June 2011, under this program, CMS Energy issued 762,925 shares of common stock at an average price of $19.66 per share, resulting in net proceeds of $15 million.
Consumers Energy Company [Member] |
Financings | 5: FINANCINGS Presented in the following table is a summary of major long-term debt transactions during the nine months ended September 30, 2011:
|  | Principal |  |  |  |  |  |  | Issue/Retirement |  |  |  |
|  | (In Millions) |  |  | Interest Rate |  |  | Date |  |  | Maturity Date |
Debt Issuances |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
CMS Energy |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Senior notes |  | $ | 250 |  |  |  | 2.75 | % |  | May 2011 |  | May 2014
Consumers |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Tax-exempt bonds1 |  |  | 68 |  |  | Variable |  | May 2011 |  | April 2018
Tax-exempt bonds1 |  |  | 35 |  |  | Variable |  | May 2011 |  | April 2035
Total |  | $ | 353 |  |  |  |  |  |  |  |  |  |  |  |  |
Debt Retirements |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
CMS Energy |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Senior notes |  | $ | 146 |  |  |  | 8.5 | % |  | April 2011 |  | April 2011
Consumers |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Nuclear fuel disposal liability2 |  |  | 163 |  |  | Variable |  | July 2011 |  |  | — |
Tax-exempt bonds1 |  |  | 68 |  |  | Variable |  | May 2011 |  | April 2018
Tax-exempt bonds1 |  |  | 35 |  |  | Variable |  | May 2011 |  | April 2035
Total |  | $ | 412 |  |  |  |  |  |  |  |  |  |  |  |  |
1 In May 2011, Consumers utilized the Michigan Strategic Fund for the issuance of $68 million and $35 million of tax-exempt Michigan Strategic Fund Variable Rate Limited Obligation Revenue Bonds. The initial interest rate, which resets weekly, was 0.26 percent for the $68 million bond issuance and 0.28 percent for the $35 million bond issuance. The bonds, which are backed by letters of credit and collateralized by FMBs, are subject to optional tender by the holders that would result in remarketing. Consumers used the proceeds to redeem $103 million of tax-exempt bonds in May 2011. 2 In July 2011, Consumers settled its nuclear fuel disposal liability with the DOE. For additional details, see the "Consumers' Electric Utility Contingencies — Nuclear Matters" section in Note 3, Contingencies and Commitments. In September 2011, CMS Energy called $50 million principal amount of its 6.3 percent senior notes due in 2012 for redemption in October 2011. Revolving Credit Facilities: The following secured revolving credit facilities with banks were available at September 30, 2011:
In Millions |
|  |  |  |  |  |  |  |  |  | Letters of Credit |  |  |  |
Expiration Date |  | Amount of Facility |  |  | Amount Borrowed |  |  | Outstanding |  |  | Amount Available |
CMS Energy |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
March 31, 20161 |  | $ | 550 |  |  | $ | — |  |  | $ | 3 |  |  | $ | 547 |
Consumers |  |
March 31, 20162, 3 |  | $ | 500 |  |  | $ | — |  |  | $ | 1 |  |  | $ | 499 |
August 9, 20133 |  |  | 150 |  |  |  | — |  |  |  | — |  |  |  | 150 |
September 9, 20143,4 |  |  | 30 |  |  |  | — |  |  |  | 30 |  |  |  | — |
1 On March 31, 2011, CMS Energy entered into a $550 million secured revolving credit facility with a consortium of banks. This facility has a five-year term and replaces CMS Energy's revolving credit facility that was set to expire in 2012. Obligations under this facility are secured by Consumers common stock. CMS Energy's average borrowings during the nine months ended September 30, 2011 totaled $14 million, with a weighted-average annual interest rate of 2.22 percent, representing LIBOR plus 2.00 percent 2 On March 31, 2011, Consumers entered into a $500 million secured revolving credit facility with a consortium of banks. This facility has a five-year term and replaces Consumers' revolving credit facility that was set to expire in 2012. 3 Obligations under this facility are secured by FMBs of Consumers. 4 Secured revolving letter of credit facility. Short-term Borrowings: Under Consumers' revolving accounts receivable sales program, Consumers may transfer up to $250 million of accounts receivable, subject to certain eligibility requirements. These transactions are accounted for as short-term secured borrowings. At September 30, 2011, $250 million of accounts receivable were eligible for transfer, and no accounts receivable had been transferred under the program. During the nine months ended September 30, 2011, Consumers had no borrowings under this program. Contingently Convertible Securities: Presented in the following table are the significant terms of CMS Energy's contingently convertible securities at September 30, 2011:
|  |  |  |  |  | Outstanding |  |  | Adjusted Conversion |  |  | Adjusted |
Security |  | Maturity |  |  | (In Millions) |  |  | Price |  |  | Trigger Price |
2.875% senior notes |  |  | 2024 |  |  | $ | 288 |  |  | $ | 12.67 |  |  | $ | 15.20 |
5.50% senior notes |  |  | 2029 |  |  |  | 172 |  |  |  | 14.26 |  |  |  | 18.54 |
During 20 of the last 30 trading days ended September 30, 2011, the adjusted trigger-price contingencies were met for both series of the contingently convertible senior notes, and as a result, the senior notes are convertible at the option of the security holders for the three months ending December 31, 2011. Presented in the following table are details about conversions of contingently convertible securities during the nine months ended September 30, 2011:
3.375%contingently |  |  |  |  |  |  |  | Conversion Value |  |  |  |  |  | Cash Paid on
convertible senior |  |  |  | Principal Converted |  | per $1,000 of |  | Common Stock Issued |  | Settlement
notes due 2023 |  | Conversion Date |  | (In Millions) |  | principal |  | on Settlement |  | (In Millions)
Voluntary conversion |  | January 2011 |  | $ | 4 |  | $ | 1,994.21 |  |  | 197,472 |  | $ | 4
Dividend Restrictions: Under provisions of CMS Energy's senior notes indenture, at September 30, 2011, payment of common stock dividends by CMS Energy was limited to $1.2 billion. Under the provisions of its articles of incorporation, at September 30, 2011, Consumers had $510 million of unrestricted retained earnings available to pay common stock dividends 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 common stock dividends from Consumers would not be limited to amounts in Consumers' retained earnings. Any decision by Consumers to pay common stock dividends in excess of retained earnings would be based on specific facts and circumstances and would result only after a formal regulatory filing process. For the nine months ended September 30, 2011, CMS Energy received $292 million of common stock dividends from Consumers. Issuance of Common Stock: On June 15, 2011, CMS Energy entered into a continuous equity offering program under which CMS Energy may sell, from time to time in "at the market" offerings, common stock having an aggregate sales price of up to $50 million. In June 2011, under this program, CMS Energy issued 762,925 shares of common stock at an average price of $19.66 per share, resulting in net proceeds of $15 million.

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.19,20,22) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 129 -Paragraph 2, 4 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 02 -Paragraph 19, 20, 22 -Article 5 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 + Details
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