Financings and Capitalization

3 Months Ended

Mar. 31, 2020

Debt Instrument [Line Items]

Financings and Capitalization

Financings and Capitalization

Financings: Presented in the following table is a summary of major long‑term debt issuances during the three months ended March 31, 2020:

	Principal (In Millions)			Interest Rate		Issuance Date	Maturity Date
CMS Energy, parent only
Term loan facility¹		$	300	variable		February	February 2021
Total CMS Energy, parent only		$	300
Consumers
Term loan facility²		$	300	variable		January	January 2021
First mortgage bonds		575		3.50	%	March	August 2051
Total Consumers		$	875
Total CMS Energy		$	1,175

¹  At March 31, 2020, the interest rate on the balance of this term loan facility was 1.572 percent, based on an interest rate of six‑month LIBOR plus 0.500 percent.

²  At March 31, 2020, the interest rate on the balance of this term loan facility was 1.466 percent, based on an interest rate of one‑month LIBOR plus 0.450 percent.

Redemption of first mortgage bonds: In April 2020, Consumers redeemed $100 million of 3.770 percent first mortgage bonds due in October 2020.

Revolving Credit Facilities: The following revolving credit facilities with banks were available at March 31, 2020:

In Millions
Expiration Date	Amount of Facility			Amount Borrowed			Letters of Credit Outstanding			Amount Available
CMS Energy, parent only
June 5, 2023¹		$	550		$	25		$	4		$	521
CMS Enterprises, including subsidiaries
September 30, 2025²		$	18		$	—		$	8		$	10
Consumers³
June 5, 2023		$	850		$	—		$	7		$	843
November 19, 2021		250			—			8			242
April 18, 2022		30			—			30			—

¹  The weighted-average interest rate for outstanding borrowings under CMS Energy’s revolving credit facility was 1.887 percent at March 31, 2020.

²  Under this facility, $8 million is available solely for the purpose of issuing letters of credit. Obligations under this facility are secured by the collateral accounts with the lending bank.

³  Obligations under these facilities are secured by first mortgage bonds of Consumers.

Short‑term Borrowings: Under Consumers’ commercial paper program, Consumers may issue, in one or more placements, investment-grade commercial paper notes with maturities of up to 365 days at market interest rates. These issuances are supported by Consumers’ revolving credit facilities and may have an aggregate principal amount outstanding of up to $500 million. While the amount of outstanding commercial paper does not reduce the available capacity of the revolving credit facilities, Consumers does not intend to issue commercial paper in an amount exceeding the available capacity of the facilities. At March 31, 2020, there were no commercial paper notes outstanding under this program.

Dividend Restrictions: At March 31, 2020, payment of dividends by CMS Energy on its common stock was limited to $5.2 billion under provisions of the Michigan Business Corporation Act of 1972.

Under the provisions of its articles of incorporation, at March 31, 2020, Consumers had $1.5 billion of unrestricted retained earnings available to pay dividends on its common stock 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, dividends from Consumers on its common stock would not be limited to amounts in Consumers’ retained earnings. Any decision by Consumers to pay dividends on its common stock 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 three months ended March 31, 2020, Consumers paid $219 million in dividends on its common stock to CMS Energy.

Issuance of Common Stock: In 2018, CMS Energy entered into an equity offering program under which it may sell, from time to time, shares of CMS Energy common stock having an aggregate sales price of up to $250 million. Under this program, CMS Energy may sell its common stock in privately negotiated transactions, in “at the market” offerings, through forward sales transactions or otherwise.

During 2018 and 2019, CMS Energy entered into forward sales contracts having an aggregate sales price of $250 million. In March 2020, CMS Energy settled one of these contracts by issuing 2,017,783 shares of common stock for $47.95 per share, resulting in net proceeds of $97 million.

At March 31, 2020, CMS Energy’s remaining forward sales contracts had an aggregate sales price of $150 million. Presented in the following table are details of these contracts:

Contract Date	Maturity Date	Number of Shares	Initial Forward Price Per Share
November 20, 2018	March 31, 2021	777,899		$	50.91
February 21, 2019	March 31, 2021	2,083,340		52.27

These contracts allow CMS Energy to either physically settle the contracts by issuing shares of its common stock at the then‑applicable forward sale price specified by the agreement or net settle the contracts through the delivery or receipt of cash or shares. CMS Energy may settle the contracts at any time through their maturity dates, and presently intends to physically settle the contracts by delivering shares of its common stock.

The initial forward price in the forward equity sale contracts includes a deduction for commissions and will be adjusted on a daily basis over the term based on an interest rate factor and decreased on certain dates by certain predetermined amounts to reflect expected dividend payments. No amounts are recorded on CMS Energy’s consolidated balance sheets until settlements of the forward equity sale contracts occur. If CMS Energy had elected to net share settle the contracts as of March 31, 2020, CMS Energy would have been required to deliver 379,776 shares.

Consumers Energy Company

Debt Instrument [Line Items]

Financings and Capitalization

Financings and Capitalization

Financings: Presented in the following table is a summary of major long‑term debt issuances during the three months ended March 31, 2020:

	Principal (In Millions)			Interest Rate		Issuance Date	Maturity Date
CMS Energy, parent only
Term loan facility¹		$	300	variable		February	February 2021
Total CMS Energy, parent only		$	300
Consumers
Term loan facility²		$	300	variable		January	January 2021
First mortgage bonds		575		3.50	%	March	August 2051
Total Consumers		$	875
Total CMS Energy		$	1,175

¹  At March 31, 2020, the interest rate on the balance of this term loan facility was 1.572 percent, based on an interest rate of six‑month LIBOR plus 0.500 percent.

²  At March 31, 2020, the interest rate on the balance of this term loan facility was 1.466 percent, based on an interest rate of one‑month LIBOR plus 0.450 percent.

Redemption of first mortgage bonds: In April 2020, Consumers redeemed $100 million of 3.770 percent first mortgage bonds due in October 2020.

Revolving Credit Facilities: The following revolving credit facilities with banks were available at March 31, 2020:

In Millions
Expiration Date	Amount of Facility			Amount Borrowed			Letters of Credit Outstanding			Amount Available
CMS Energy, parent only
June 5, 2023¹		$	550		$	25		$	4		$	521
CMS Enterprises, including subsidiaries
September 30, 2025²		$	18		$	—		$	8		$	10
Consumers³
June 5, 2023		$	850		$	—		$	7		$	843
November 19, 2021		250			—			8			242
April 18, 2022		30			—			30			—

¹  The weighted-average interest rate for outstanding borrowings under CMS Energy’s revolving credit facility was 1.887 percent at March 31, 2020.

²  Under this facility, $8 million is available solely for the purpose of issuing letters of credit. Obligations under this facility are secured by the collateral accounts with the lending bank.

³  Obligations under these facilities are secured by first mortgage bonds of Consumers.

Short‑term Borrowings: Under Consumers’ commercial paper program, Consumers may issue, in one or more placements, investment-grade commercial paper notes with maturities of up to 365 days at market interest rates. These issuances are supported by Consumers’ revolving credit facilities and may have an aggregate principal amount outstanding of up to $500 million. While the amount of outstanding commercial paper does not reduce the available capacity of the revolving credit facilities, Consumers does not intend to issue commercial paper in an amount exceeding the available capacity of the facilities. At March 31, 2020, there were no commercial paper notes outstanding under this program.

Dividend Restrictions: At March 31, 2020, payment of dividends by CMS Energy on its common stock was limited to $5.2 billion under provisions of the Michigan Business Corporation Act of 1972.

Under the provisions of its articles of incorporation, at March 31, 2020, Consumers had $1.5 billion of unrestricted retained earnings available to pay dividends on its common stock 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, dividends from Consumers on its common stock would not be limited to amounts in Consumers’ retained earnings. Any decision by Consumers to pay dividends on its common stock 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 three months ended March 31, 2020, Consumers paid $219 million in dividends on its common stock to CMS Energy.

Issuance of Common Stock: In 2018, CMS Energy entered into an equity offering program under which it may sell, from time to time, shares of CMS Energy common stock having an aggregate sales price of up to $250 million. Under this program, CMS Energy may sell its common stock in privately negotiated transactions, in “at the market” offerings, through forward sales transactions or otherwise.

During 2018 and 2019, CMS Energy entered into forward sales contracts having an aggregate sales price of $250 million. In March 2020, CMS Energy settled one of these contracts by issuing 2,017,783 shares of common stock for $47.95 per share, resulting in net proceeds of $97 million.

At March 31, 2020, CMS Energy’s remaining forward sales contracts had an aggregate sales price of $150 million. Presented in the following table are details of these contracts:

Contract Date	Maturity Date	Number of Shares	Initial Forward Price Per Share
November 20, 2018	March 31, 2021	777,899		$	50.91
February 21, 2019	March 31, 2021	2,083,340		52.27

These contracts allow CMS Energy to either physically settle the contracts by issuing shares of its common stock at the then‑applicable forward sale price specified by the agreement or net settle the contracts through the delivery or receipt of cash or shares. CMS Energy may settle the contracts at any time through their maturity dates, and presently intends to physically settle the contracts by delivering shares of its common stock.

The initial forward price in the forward equity sale contracts includes a deduction for commissions and will be adjusted on a daily basis over the term based on an interest rate factor and decreased on certain dates by certain predetermined amounts to reflect expected dividend payments. No amounts are recorded on CMS Energy’s consolidated balance sheets until settlements of the forward equity sale contracts occur. If CMS Energy had elected to net share settle the contracts as of March 31, 2020, CMS Energy would have been required to deliver 379,776 shares.