XML 55 R12.htm IDEA: XBRL DOCUMENT
v2.4.0.8

Financings And Capitalization | 9 Months Ended
--- | ---
Sep. 30, 2014
Financings And Capitalization | 4:FINANCINGS AND CAPITALIZATION Presented in the following table is a summary of major long-term debt transactions during the nine months ended September 30, 2014:
| Principal |  | Issue/Retirement |  |
| (In Millions) | Interest Rate |  | Date | Maturity Date |
Debt issuances |  |  |  |  |  |  |  |
CMS Energy |  |  |  |  |  |  |  |
Senior notes 1 |  | $ | 250 | 3.875 | % | February 2014 | March 2024 |
Senior notes 1 |  |  | 300 | 4.875 |  | February 2014 | March 2044 |
Total CMS Energy parent |  | $ | 550 |  |  |  |  |
Consumers |  |  |  |  |  |  |  |
Securitization bonds 2 |  | $ | 124 | 1.334 | % | July 2014 | November 2020 |
Securitization bonds 2 |  |  | 139 | 2.962 |  | July 2014 | November 2025 |
Securitization bonds 2 |  |  | 115 | 3.528 |  | July 2014 | May 2029 |
FMBs |  |  | 250 | 3.125 |  | August 2014 | August 2024 |
FMBs |  |  | 250 | 4.350 |  | August 2014 | August 2064 |
Total Consumers |  | $ | 878 |  |  |  |  |
Total debt issuances |  | $ | 1,428 |  |  |  |  |
Debt retirements |  |  |  |  |  |  |  |
CMS Energy |  |  |  |  |  |  |  |
Senior notes 3 |  | $ | 125 | 6.875 | % | April 2014 | December 2015 |
Senior notes |  |  | 155 | 5.500 |  | June 2014 | June 2029 |
Total CMS Energy parent |  | $ | 280 |  |  |  |  |
Consumers |  |  |  |  |  |  |  |
FMBs |  | $ | 177 | 5.500 | % | August 2014 | August 2016 |
Total Consumers |  | $ | 177 |  |  |  |  |
Total debt retirements |  | $ | 457 |  |  |  |  |
| 1 |  | CMS Energy used a portion of these proceeds to retire its $125 million 6.875 percent senior notes due December 2015 and its $155 million 5.5 percent convertible senior notes due June 2029. CMS Energy intends to use the remaining proceeds for general corporate purposes.
| 2 |  | These Securitization bonds are collateralized by certain regulatory assets held by Consumers 2014 Securitization Funding. The bondholders have no recourse to Consumers’ other assets. Through its rate structure, Consumers collects from its retail electric customers, with some exceptions, Securitization charges to cover the principal and interest on the bonds as well as certain other qualified costs. The surcharges collected are remitted to a trustee and are not available to creditors of Consumers or creditors of Consumers’ affiliates other than Consumers 2014 Securitization Funding. Consumers used the proceeds from the Securitization property to retire $177 million of its 5.5 percent FMBs due August 2016 and $178 million of its equity. For additional details regarding the Securitization, see Note 2, Regulatory Matters.
| 3 |  | CMS Energy retired this debt at a premium and recorded a loss on extinguishment of $13 million in other expense on its consolidated statements of income.
Regulatory Authorization for Financings: Consumers is required to maintain FERC authorization for financings. In June 2014, Consumers received authorization from FERC to have outstanding, at any one time, up to $800 million of secured and unsecured short-term securities for general corporate purposes. FERC has also authorized Consumers to issue and sell up to $1.9 billion of secured and unsecured long-term securities for general corporate purposes. The authorization, which was effective July 1, 2014 and terminates on June 30, 2016, exceeds Consumers’ anticipated financing needs for this period. Revolving Credit Facilities: The following secured revolving credit facilities with banks were available at September 30, 2014:
In Millions
|  |  | Letters of Credit |
Expiration Date | Amount of Facility | Amount Borrowed | Outstanding | Amount Available |
CMS Energy |  |  |  |  |  |  |  |  |  |  |  |  |
December 20, 2018 1 |  | $ | 550 |  | $ | - |  | $ | 2 |  | $ | 548 |
Consumers |  |  |  |  |  |  |  |  |  |  |  |  |
December 20, 2018 2 |  | $ | 650 |  | $ | - |  | $ | - |  | $ | 650 |
May 9, 2018 2 |  |  | 30 |  |  | - |  |  | 30 |  |  | - |
| 1 |  | Obligations under this facility are secured by Consumers common stock.
| 2 |  | Obligations under this facility are secured by FMBs of Consumers.
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, 2014, $250 million of accounts receivable were eligible for transfer. During the nine months ended September 30, 2014, Consumers’ average short-term borrowings totaled $15 million, with a weighted-average annual interest rate of 0.85 percent. In September 2014, Consumers entered into a commercial paper program. Under the program, Consumers may issue, in one or more placements, commercial paper notes with maturities up to 365 days and that bear interest at fixed or floating rates. These issuances are backed by Consumers’ $650 million revolving credit facility and may have an aggregate principal amount outstanding of up to $500 million. At September 30, 2014, there were no notes outstanding under this program. Contingently Convertible Securities: Presented in the following table are details about conversions of contingently convertible securities during the nine months ended September 30, 2014:
|  |  | Weighted-Average | Shares |
|  | Principal | Conversion | of Common | Cash Paid on |
| Conversion | Converted | Value per $1,000 | Stock Issued | Settlement |
| Date | (In Millions) | of Principal | on Settlement | (In Millions) |
5.50% senior notes due 2029 | February 2014 |  | $ | 17 |  | $ | 1,968 | 605,531 |  | $ | 17 |
5.50% senior notes due 2029 | June 2014 |  |  | 155 |  |  | 2,215 | 6,372,578 |  |  | 155 |
Dividend Restrictions: Under provisions of the Michigan Business Corporation Act of 1972, as amended, at September 30, 2014, payment of common stock dividends by CMS Energy was limited to $3.7 billion. Under the provisions of its articles of incorporation, at September 30, 2014, Consumers had $735 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 be subject to a formal regulatory filing process. For the nine months ended September 30, 2014, Consumers paid $375 million in dividends on its common stock to CMS Energy. Issuance of Common Stock: In April 2013, CMS Energy entered into a continuous equity offering program permitting it to sell, from time to time in “at the market” offerings, common stock having an aggregate sales price of up to $50 million per program. Presented in the following table are the transactions that CMS Energy entered into under the program:
| Number of | Average | Proceeds |
| Shares Issued | Price per Share | (In Millions) |
March 2014 | 1,070,080 |  | $ | 28.04 |  | $ | 30 |
Consumers Energy Company [Member] |
Financings And Capitalization | 4:FINANCINGS AND CAPITALIZATION Presented in the following table is a summary of major long-term debt transactions during the nine months ended September 30, 2014:
| Principal |  | Issue/Retirement |  |
| (In Millions) | Interest Rate |  | Date | Maturity Date |
Debt issuances |  |  |  |  |  |  |  |
CMS Energy |  |  |  |  |  |  |  |
Senior notes 1 |  | $ | 250 | 3.875 | % | February 2014 | March 2024 |
Senior notes 1 |  |  | 300 | 4.875 |  | February 2014 | March 2044 |
Total CMS Energy parent |  | $ | 550 |  |  |  |  |
Consumers |  |  |  |  |  |  |  |
Securitization bonds 2 |  | $ | 124 | 1.334 | % | July 2014 | November 2020 |
Securitization bonds 2 |  |  | 139 | 2.962 |  | July 2014 | November 2025 |
Securitization bonds 2 |  |  | 115 | 3.528 |  | July 2014 | May 2029 |
FMBs |  |  | 250 | 3.125 |  | August 2014 | August 2024 |
FMBs |  |  | 250 | 4.350 |  | August 2014 | August 2064 |
Total Consumers |  | $ | 878 |  |  |  |  |
Total debt issuances |  | $ | 1,428 |  |  |  |  |
Debt retirements |  |  |  |  |  |  |  |
CMS Energy |  |  |  |  |  |  |  |
Senior notes 3 |  | $ | 125 | 6.875 | % | April 2014 | December 2015 |
Senior notes |  |  | 155 | 5.500 |  | June 2014 | June 2029 |
Total CMS Energy parent |  | $ | 280 |  |  |  |  |
Consumers |  |  |  |  |  |  |  |
FMBs |  | $ | 177 | 5.500 | % | August 2014 | August 2016 |
Total Consumers |  | $ | 177 |  |  |  |  |
Total debt retirements |  | $ | 457 |  |  |  |  |
| 1 |  | CMS Energy used a portion of these proceeds to retire its $125 million 6.875 percent senior notes due December 2015 and its $155 million 5.5 percent convertible senior notes due June 2029. CMS Energy intends to use the remaining proceeds for general corporate purposes.
| 2 |  | These Securitization bonds are collateralized by certain regulatory assets held by Consumers 2014 Securitization Funding. The bondholders have no recourse to Consumers’ other assets. Through its rate structure, Consumers collects from its retail electric customers, with some exceptions, Securitization charges to cover the principal and interest on the bonds as well as certain other qualified costs. The surcharges collected are remitted to a trustee and are not available to creditors of Consumers or creditors of Consumers’ affiliates other than Consumers 2014 Securitization Funding. Consumers used the proceeds from the Securitization property to retire $177 million of its 5.5 percent FMBs due August 2016 and $178 million of its equity. For additional details regarding the Securitization, see Note 2, Regulatory Matters.
| 3 |  | CMS Energy retired this debt at a premium and recorded a loss on extinguishment of $13 million in other expense on its consolidated statements of income.
Regulatory Authorization for Financings: Consumers is required to maintain FERC authorization for financings. In June 2014, Consumers received authorization from FERC to have outstanding, at any one time, up to $800 million of secured and unsecured short-term securities for general corporate purposes. FERC has also authorized Consumers to issue and sell up to $1.9 billion of secured and unsecured long-term securities for general corporate purposes. The authorization, which was effective July 1, 2014 and terminates on June 30, 2016, exceeds Consumers’ anticipated financing needs for this period. Revolving Credit Facilities: The following secured revolving credit facilities with banks were available at September 30, 2014:
In Millions
|  |  | Letters of Credit |
Expiration Date | Amount of Facility | Amount Borrowed | Outstanding | Amount Available |
CMS Energy |  |  |  |  |  |  |  |  |  |  |  |  |
December 20, 2018 1 |  | $ | 550 |  | $ | - |  | $ | 2 |  | $ | 548 |
Consumers |  |  |  |  |  |  |  |  |  |  |  |  |
December 20, 2018 2 |  | $ | 650 |  | $ | - |  | $ | - |  | $ | 650 |
May 9, 2018 2 |  |  | 30 |  |  | - |  |  | 30 |  |  | - |
| 1 |  | Obligations under this facility are secured by Consumers common stock.
| 2 |  | Obligations under this facility are secured by FMBs of Consumers.
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, 2014, $250 million of accounts receivable were eligible for transfer. During the nine months ended September 30, 2014, Consumers’ average short-term borrowings totaled $15 million, with a weighted-average annual interest rate of 0.85 percent. In September 2014, Consumers entered into a commercial paper program. Under the program, Consumers may issue, in one or more placements, commercial paper notes with maturities up to 365 days and that bear interest at fixed or floating rates. These issuances are backed by Consumers’ $650 million revolving credit facility and may have an aggregate principal amount outstanding of up to $500 million. At September 30, 2014, there were no notes outstanding under this program. Contingently Convertible Securities: Presented in the following table are details about conversions of contingently convertible securities during the nine months ended September 30, 2014:
|  |  | Weighted-Average | Shares |
|  | Principal | Conversion | of Common | Cash Paid on |
| Conversion | Converted | Value per $1,000 | Stock Issued | Settlement |
| Date | (In Millions) | of Principal | on Settlement | (In Millions) |
5.50% senior notes due 2029 | February 2014 |  | $ | 17 |  | $ | 1,968 | 605,531 |  | $ | 17 |
5.50% senior notes due 2029 | June 2014 |  |  | 155 |  |  | 2,215 | 6,372,578 |  |  | 155 |
Dividend Restrictions: Under provisions of the Michigan Business Corporation Act of 1972, as amended, at September 30, 2014, payment of common stock dividends by CMS Energy was limited to $3.7 billion. Under the provisions of its articles of incorporation, at September 30, 2014, Consumers had $735 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 be subject to a formal regulatory filing process. For the nine months ended September 30, 2014, Consumers paid $375 million in dividends on its common stock to CMS Energy. Issuance of Common Stock: In April 2013, CMS Energy entered into a continuous equity offering program permitting it to sell, from time to time in “at the market” offerings, common stock having an aggregate sales price of up to $50 million per program. Presented in the following table are the transactions that CMS Energy entered into under the program:
| Number of | Average | Proceeds |
| Shares Issued | Price per Share | (In Millions) |
March 2014 | 1,070,080 |  | $ | 28.04 |  | $ | 30 |

X
- 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 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 Reference 2: 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 3: 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 + Details
Name: | us-gaap_DebtDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration