Leases (Tables)

6 Months Ended

Jun. 30, 2019

Leases [Line Items]

Assets and Liabilities of Lessee

Presented in the following table is information about CMS Energy’s and Consumers’ lease right-of-use assets and lease liabilities:

In Millions, Except as Noted
June 30, 2019	CMS Energy, including Consumers				Consumers
Operating leases
Right-of-use assets1		$	51			$	44
Lease liabilities
Current lease liabilities2		10				8
Non-current lease liabilities3		41				35
Finance leases
Right-of-use assets		$	76			$	76
Lease liabilities4
Current lease liabilities		7				7
Non-current lease liabilities		63				63
Weighted-average remaining lease term (in years)
Operating leases		16				13
Finance leases		12				12
Weighted-average discount rate
Operating leases		3.7		%		3.7		%
Finance leases5		2.0		%		2.0		%

¹  CMS Energy’s and Consumers’ operating right-of-use lease assets are reported as other non‑current assets on their consolidated balance sheets.

²  The current portion of CMS Energy’s and Consumers’ operating lease liabilities are reported as other current liabilities on their consolidated balance sheets.

³  The non‑current portion of CMS Energy’s and Consumers’ operating lease liabilities are reported as other non‑current liabilities on their consolidated balance sheets.

⁴  This includes $25 million for leases with related parties, of which less than $1 million is current.

⁵ 

This rate excludes the impact of Consumers’ pipeline agreements and long-term PPAs accounted for as finance leases. The required capacity payments under these agreements, when compared to the underlying fair value of the leased assets, result in effective interest rates that exceed market rates for leases with similar terms.

Lease Cost

Presented in the following table is a summary of CMS Energy’s and Consumers’ total lease costs:

In Millions
	CMS Energy, including Consumers						Consumers
June 30, 2019	Three Months Ended			Six Months Ended			Three Months Ended			Six Months Ended
Operating lease costs		$	3		$	6		$	3		$	5
Finance lease costs
Amortization of right-of-use assets		2			4			2			4
Interest on lease liabilities		5			9			5			9
Variable lease costs		24			55			24			55
Total lease costs		$	34		$	74		$	34		$	73

Presented in the following table is cash flow information related to amounts paid on CMS Energy’s and Consumers’ lease liabilities:

In Millions
Six Months Ended June 30, 2019	CMS Energy, including Consumers			Consumers
Cash paid for amounts included in the measurement of lease liabilities
Cash used in operating activities for operating leases		$	5		$	5
Cash used in operating activities for finance leases		9			9
Cash used in financing activities for finance leases		3			3

Lessee Operating Lease Liability and Finance Liability Maturity

Presented in the following table are the minimum rental commitments under CMS Energy’s and Consumers’ non‑cancelable leases:

In Millions
				Finance Leases
June 30, 2019	Operating Leases			Pipelines and PPAs			Other			Total
CMS Energy, including Consumers
Remainder of 2019		$	5		$	9		$	5		$	14
2020		11			17			6			23
2021		11			17			5			22
2022		5			14			5			19
2023		3			13			5			18
2024		2			13			3			16
2025 and thereafter		35			79			11			90
Total minimum lease payments		$	72		$	162		$	40		$	202
Less discount		21			128			4			132
Present value of minimum lease payments		$	51		$	34		$	36		$	70
Consumers
Remainder of 2019		$	5		$	9		$	5		$	14
2020		9			17			6			23
2021		9			17			5			22
2022		4			14			5			19
2023		3			13			5			18
2024		2			13			3			16
2025 and thereafter		28			79			11			90
Total minimum lease payments		$	60		$	162		$	40		$	202
Less discount		17			128			4			132
Present value of minimum lease payments		$	43		$	34		$	36		$	70

Presented in the following table are the minimum rental commitments under CMS Energy’s and Consumers’ non‑cancelable leases at December 31, 2018, prior to the adoption of ASU 2016‑02:

In Millions
December 31, 2018	Capital Leases			Operating Leases
CMS Energy, including Consumers
2019		$	14		$	16
2020		11			15
2021		11			15
2022		8			8
2023		6			5
2024 and thereafter		21			38
Total minimum lease payments		$	71		$	97
Less discount		22
Present value of minimum lease payments		$	49
Less current portion		9
Non-current portion		$	40
Consumers
2019		$	14		$	14
2020		11			14
2021		11			13
2022		8			7
2023		6			5
2024		21			32
Total minimum lease payments		$	71		$	85
Less discount		22
Present value of minimum lease payments		$	49
Less current portion		9
Non-current portion		$	40

Lessor, Operating Lease, Payments to be Received, Maturity

Presented in the following table are the minimum rental payments to be received under CMS Energy’s non‑cancelable operating leases:

In Millions
June 30, 2019
Remainder of 2019	$	28
2020	54
2021	54
2022	48
2023	44
2024	44
2025 and thereafter	62
Total minimum lease payments	$	334

Sales-type and Direct Financing Leases, Lease Receivable, Maturity

Presented in the following table are the minimum rental payments to be received under CMS Energy’s and Consumers’ non‑cancelable direct financing leases:

In Millions
June 30, 2019	CMS Energy, including Consumers			Consumers
Remainder of 2019		$	—		$	1
2020		—			1
2021		—			1
2022		—			1
2023		—			1
2024		—			1
2025 and thereafter		10			19
Total minimum lease payments		$	10		$	25
Less unearned income		5			15
Present value of lease payments recognized as lease receivables		$	5		$	10

Consumers Energy Company

Leases [Line Items]

Assets and Liabilities of Lessee

Presented in the following table is information about CMS Energy’s and Consumers’ lease right-of-use assets and lease liabilities:

In Millions, Except as Noted
June 30, 2019	CMS Energy, including Consumers				Consumers
Operating leases
Right-of-use assets1		$	51			$	44
Lease liabilities
Current lease liabilities2		10				8
Non-current lease liabilities3		41				35
Finance leases
Right-of-use assets		$	76			$	76
Lease liabilities4
Current lease liabilities		7				7
Non-current lease liabilities		63				63
Weighted-average remaining lease term (in years)
Operating leases		16				13
Finance leases		12				12
Weighted-average discount rate
Operating leases		3.7		%		3.7		%
Finance leases5		2.0		%		2.0		%

¹  CMS Energy’s and Consumers’ operating right-of-use lease assets are reported as other non‑current assets on their consolidated balance sheets.

²  The current portion of CMS Energy’s and Consumers’ operating lease liabilities are reported as other current liabilities on their consolidated balance sheets.

³  The non‑current portion of CMS Energy’s and Consumers’ operating lease liabilities are reported as other non‑current liabilities on their consolidated balance sheets.

⁴  This includes $25 million for leases with related parties, of which less than $1 million is current.

⁵ 

This rate excludes the impact of Consumers’ pipeline agreements and long-term PPAs accounted for as finance leases. The required capacity payments under these agreements, when compared to the underlying fair value of the leased assets, result in effective interest rates that exceed market rates for leases with similar terms.

Lease Cost

Presented in the following table is a summary of CMS Energy’s and Consumers’ total lease costs:

In Millions
	CMS Energy, including Consumers						Consumers
June 30, 2019	Three Months Ended			Six Months Ended			Three Months Ended			Six Months Ended
Operating lease costs		$	3		$	6		$	3		$	5
Finance lease costs
Amortization of right-of-use assets		2			4			2			4
Interest on lease liabilities		5			9			5			9
Variable lease costs		24			55			24			55
Total lease costs		$	34		$	74		$	34		$	73

Presented in the following table is cash flow information related to amounts paid on CMS Energy’s and Consumers’ lease liabilities:

In Millions
Six Months Ended June 30, 2019	CMS Energy, including Consumers			Consumers
Cash paid for amounts included in the measurement of lease liabilities
Cash used in operating activities for operating leases		$	5		$	5
Cash used in operating activities for finance leases		9			9
Cash used in financing activities for finance leases		3			3

Lessee Operating Lease Liability and Finance Liability Maturity

Presented in the following table are the minimum rental commitments under CMS Energy’s and Consumers’ non‑cancelable leases at December 31, 2018, prior to the adoption of ASU 2016‑02:

In Millions
December 31, 2018	Capital Leases			Operating Leases
CMS Energy, including Consumers
2019		$	14		$	16
2020		11			15
2021		11			15
2022		8			8
2023		6			5
2024 and thereafter		21			38
Total minimum lease payments		$	71		$	97
Less discount		22
Present value of minimum lease payments		$	49
Less current portion		9
Non-current portion		$	40
Consumers
2019		$	14		$	14
2020		11			14
2021		11			13
2022		8			7
2023		6			5
2024		21			32
Total minimum lease payments		$	71		$	85
Less discount		22
Present value of minimum lease payments		$	49
Less current portion		9
Non-current portion		$	40

Presented in the following table are the minimum rental commitments under CMS Energy’s and Consumers’ non‑cancelable leases:

In Millions
				Finance Leases
June 30, 2019	Operating Leases			Pipelines and PPAs			Other			Total
CMS Energy, including Consumers
Remainder of 2019		$	5		$	9		$	5		$	14
2020		11			17			6			23
2021		11			17			5			22
2022		5			14			5			19
2023		3			13			5			18
2024		2			13			3			16
2025 and thereafter		35			79			11			90
Total minimum lease payments		$	72		$	162		$	40		$	202
Less discount		21			128			4			132
Present value of minimum lease payments		$	51		$	34		$	36		$	70
Consumers
Remainder of 2019		$	5		$	9		$	5		$	14
2020		9			17			6			23
2021		9			17			5			22
2022		4			14			5			19
2023		3			13			5			18
2024		2			13			3			16
2025 and thereafter		28			79			11			90
Total minimum lease payments		$	60		$	162		$	40		$	202
Less discount		17			128			4			132
Present value of minimum lease payments		$	43		$	34		$	36		$	70

Sales-type and Direct Financing Leases, Lease Receivable, Maturity

Presented in the following table are the minimum rental payments to be received under CMS Energy’s and Consumers’ non‑cancelable direct financing leases:

In Millions
June 30, 2019	CMS Energy, including Consumers			Consumers
Remainder of 2019		$	—		$	1
2020		—			1
2021		—			1
2022		—			1
2023		—			1
2024		—			1
2025 and thereafter		10			19
Total minimum lease payments		$	10		$	25
Less unearned income		5			15
Present value of lease payments recognized as lease receivables		$	5		$	10