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Exit Activities and Discontinued Operations | 6 Months Ended
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Jun. 30, 2021
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] |
Exit Activities and Discontinued Operations | Exit Activities and Discontinued Operations Exit Activities: Under its Clean Energy Plan, Consumers plans to retire the D.E. Karn coal-fueled electric generating units in 2023. In 2019, Consumers announced a retention incentive program to ensure necessary staffing at the D.E. Karn generating complex through the anticipated retirement of the coal-fueled generating units. Based on the number of employees that have chosen to participate, the aggregate cost of the program through 2023 is estimated to be $35 million. In its order in Consumers’ 2020 electric rate case, the MPSC approved deferred accounting treatment for these costs; Consumers began deferring these costs as a regulatory asset in 2021. Within its 2021 IRP, Consumers proposes to retire the J.H. Campbell coal-fueled generating units. No retention incentive costs related to this retirement will be recognized unless Consumers’ 2021 IRP is approved by the MPSC. As of June 30, 2021, the cumulative cost incurred and charged to expense related to the D.E. Karn retention incentive program was $16 million. Additionally, an amount of $3 million has been capitalized as a cost of plant, property, and equipment and an amount of $4 million has been deferred as a regulatory asset. 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 |  |  |  | 2021 | 2020
Retention benefit liability at beginning of period |  |  |  |  |  |  | $ | 11 |  |  | $ | 4 |
Costs incurred and charged to maintenance and other operating expenses |  |  |  |  |  |  | — |  |  | 7 |
Costs deferred as a regulatory asset 1 |  |  |  |  |  |  | 4 |  |  | — |
Costs incurred and capitalized |  |  |  |  |  |  | — |  |  | 1 |
Retention benefit liability at the end of the period 2 |  |  |  |  |  |  | $ | 15 |  |  | $ | 12 |
1 Includes $2 million for the three months ended June 30, 2021. 2 Includes current portion of other liabilities of $5 million at June 30, 2021 and 2020. Discontinued Operations: In June 2021, CMS Energy entered into an agreement for EnerBank to merge with Regions Bank; in exchange, CMS Energy will receive a base purchase price of $960 million in cash, subject to certain adjustments. The merger is expected to close in the fourth quarter of 2021 and is dependent upon the receipt of required regulatory approvals, among other closing conditions. CMS Energy intends to use the proceeds from the merger to fund key initiatives in its core energy business related to safety, reliability, and its clean energy transformation. As a result of the agreement, EnerBank’s results of operations are presented as income from discontinued operations on CMS Energy’s consolidated statements of income for the three and six months ended June 30, 2021 and 2020. The assets and liabilities of EnerBank are presented as held for sale on CMS Energy’s consolidated balance sheets at June 30, 2021 and December 31, 2020. Also, as a result of the agreement, EnerBank is not included in the composition of CMS Energy’s reportable segments. For more information regarding the composition of CMS Energy’s reportable segments, see Note 11, Reportable Segments. The table below presents the financial results of EnerBank included in income from discontinued operations:
In Millions
| Three Months Ended |  | Six Months Ended
June 30 | 2021 | 2020 |  | 2021 | 2020 |
Operating revenue |  | $ | 69 |  |  | $ | 61 |  |  |  | $ | 139 |  |  | $ | 123 |  |  |
Expenses |  |  |  |  |  |  |  |  |  |  |
Operating expenses |  | 28 |  |  | 36 |  |  |  | 43 |  |  | 65 |  |  |
Interest expense |  | 11 |  |  | 14 |  |  |  | 23 |  |  | 30 |  |  |
Income before income taxes |  | $ | 30 |  |  | $ | 11 |  |  |  | $ | 73 |  |  | $ | 28 |  |  |
Transaction costs |  | (5) |  |  | — |  |  |  | (5) |  |  | — |  |  |
Income from discontinued operations before income taxes |  | $ | 25 |  |  | $ | 11 |  |  |  | $ | 68 |  |  | $ | 28 |  |  |
Income tax expense |  | 7 |  |  | 3 |  |  |  | 16 |  |  | 6 |  |  |
Income from discontinued operations, net of tax |  | $ | 18 |  |  | $ | 8 |  |  |  | $ | 52 |  |  | $ | 22 |  |  |
The table below presents the aggregate carrying amounts for the major classes of assets and liabilities held for sale related to EnerBank:
In Millions
| June 30, 2021 | December 31, 2020
Assets |  |  |  |
Current |  |  |  |
Cash and cash equivalents |  | $ | 121 |  |  | $ | 136 |
Accounts receivable and other current assets |  | 73 |  |  | 18 |
Notes receivable, less allowance of $28 in 2021 and $32 in 2020 |  | 254 |  |  | 275 |
Total current assets |  | $ | 448 |  |  | $ | 429 |
Non‑current |  |  |  |
Plant, property, and equipment, net |  | $ | 27 |  |  | $ | 22 |
Notes receivable, less allowance of $92 in 2021 and $91 in 2020 |  | 2,511 |  |  | 2,612 |
Other non‑current assets |  | 46 |  |  | 46 |
Total non‑current assets |  | $ | 2,584 |  |  | $ | 2,680 |
Total assets |  | $ | 3,032 |  |  | $ | 3,109 |
Liabilities |  |  |  |
Current |  |  |  |
Current portion of long-term debt |  | $ | 952 |  |  | $ | 915 |
Accounts payable and other current liabilities |  | 38 |  |  | 38 |
Total current liabilities |  | $ | 990 |  |  | $ | 953 |
Non‑current |  |  |  |
Long-term debt |  | $ | 1,715 |  |  | $ | 1,890 |
Other non‑current liabilities |  | 2 |  |  | 4 |
Total non‑current liabilities |  | $ | 1,717 |  |  | $ | 1,894 |
Total liabilities |  | $ | 2,707 |  |  | $ | 2,847 |
Consumers Energy Company |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] |
Exit Activities and Discontinued Operations | Exit Activities and Discontinued Operations Exit Activities: Under its Clean Energy Plan, Consumers plans to retire the D.E. Karn coal-fueled electric generating units in 2023. In 2019, Consumers announced a retention incentive program to ensure necessary staffing at the D.E. Karn generating complex through the anticipated retirement of the coal-fueled generating units. Based on the number of employees that have chosen to participate, the aggregate cost of the program through 2023 is estimated to be $35 million. In its order in Consumers’ 2020 electric rate case, the MPSC approved deferred accounting treatment for these costs; Consumers began deferring these costs as a regulatory asset in 2021. Within its 2021 IRP, Consumers proposes to retire the J.H. Campbell coal-fueled generating units. No retention incentive costs related to this retirement will be recognized unless Consumers’ 2021 IRP is approved by the MPSC. As of June 30, 2021, the cumulative cost incurred and charged to expense related to the D.E. Karn retention incentive program was $16 million. Additionally, an amount of $3 million has been capitalized as a cost of plant, property, and equipment and an amount of $4 million has been deferred as a regulatory asset. 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 |  |  |  | 2021 | 2020
Retention benefit liability at beginning of period |  |  |  |  |  |  | $ | 11 |  |  | $ | 4 |
Costs incurred and charged to maintenance and other operating expenses |  |  |  |  |  |  | — |  |  | 7 |
Costs deferred as a regulatory asset 1 |  |  |  |  |  |  | 4 |  |  | — |
Costs incurred and capitalized |  |  |  |  |  |  | — |  |  | 1 |
Retention benefit liability at the end of the period 2 |  |  |  |  |  |  | $ | 15 |  |  | $ | 12 |
1 Includes $2 million for the three months ended June 30, 2021. 2 Includes current portion of other liabilities of $5 million at June 30, 2021 and 2020. Discontinued Operations: In June 2021, CMS Energy entered into an agreement for EnerBank to merge with Regions Bank; in exchange, CMS Energy will receive a base purchase price of $960 million in cash, subject to certain adjustments. The merger is expected to close in the fourth quarter of 2021 and is dependent upon the receipt of required regulatory approvals, among other closing conditions. CMS Energy intends to use the proceeds from the merger to fund key initiatives in its core energy business related to safety, reliability, and its clean energy transformation. As a result of the agreement, EnerBank’s results of operations are presented as income from discontinued operations on CMS Energy’s consolidated statements of income for the three and six months ended June 30, 2021 and 2020. The assets and liabilities of EnerBank are presented as held for sale on CMS Energy’s consolidated balance sheets at June 30, 2021 and December 31, 2020. Also, as a result of the agreement, EnerBank is not included in the composition of CMS Energy’s reportable segments. For more information regarding the composition of CMS Energy’s reportable segments, see Note 11, Reportable Segments. The table below presents the financial results of EnerBank included in income from discontinued operations:
In Millions
| Three Months Ended |  | Six Months Ended
June 30 | 2021 | 2020 |  | 2021 | 2020 |
Operating revenue |  | $ | 69 |  |  | $ | 61 |  |  |  | $ | 139 |  |  | $ | 123 |  |  |
Expenses |  |  |  |  |  |  |  |  |  |  |
Operating expenses |  | 28 |  |  | 36 |  |  |  | 43 |  |  | 65 |  |  |
Interest expense |  | 11 |  |  | 14 |  |  |  | 23 |  |  | 30 |  |  |
Income before income taxes |  | $ | 30 |  |  | $ | 11 |  |  |  | $ | 73 |  |  | $ | 28 |  |  |
Transaction costs |  | (5) |  |  | — |  |  |  | (5) |  |  | — |  |  |
Income from discontinued operations before income taxes |  | $ | 25 |  |  | $ | 11 |  |  |  | $ | 68 |  |  | $ | 28 |  |  |
Income tax expense |  | 7 |  |  | 3 |  |  |  | 16 |  |  | 6 |  |  |
Income from discontinued operations, net of tax |  | $ | 18 |  |  | $ | 8 |  |  |  | $ | 52 |  |  | $ | 22 |  |  |
The table below presents the aggregate carrying amounts for the major classes of assets and liabilities held for sale related to EnerBank:
In Millions
| June 30, 2021 | December 31, 2020
Assets |  |  |  |
Current |  |  |  |
Cash and cash equivalents |  | $ | 121 |  |  | $ | 136 |
Accounts receivable and other current assets |  | 73 |  |  | 18 |
Notes receivable, less allowance of $28 in 2021 and $32 in 2020 |  | 254 |  |  | 275 |
Total current assets |  | $ | 448 |  |  | $ | 429 |
Non‑current |  |  |  |
Plant, property, and equipment, net |  | $ | 27 |  |  | $ | 22 |
Notes receivable, less allowance of $92 in 2021 and $91 in 2020 |  | 2,511 |  |  | 2,612 |
Other non‑current assets |  | 46 |  |  | 46 |
Total non‑current assets |  | $ | 2,584 |  |  | $ | 2,680 |
Total assets |  | $ | 3,032 |  |  | $ | 3,109 |
Liabilities |  |  |  |
Current |  |  |  |
Current portion of long-term debt |  | $ | 952 |  |  | $ | 915 |
Accounts payable and other current liabilities |  | 38 |  |  | 38 |
Total current liabilities |  | $ | 990 |  |  | $ | 953 |
Non‑current |  |  |  |
Long-term debt |  | $ | 1,715 |  |  | $ | 1,890 |
Other non‑current liabilities |  | 2 |  |  | 4 |
Total non‑current liabilities |  | $ | 1,717 |  |  | $ | 1,894 |
Total liabilities |  | $ | 2,707 |  |  | $ | 2,847 |

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- Definition The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -URI http://asc.fasb.org/topic&trid=2155823 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=2122178 + Details
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