Financings And Capitalization

12 Months Ended

Dec. 31, 2015

5:Financings and Capitalization

Presented in the following table is CMS Energy’s long-term debt at December 31:



In Millions
	Interest Rate (%)		Maturity	2015			2014
CMS Energy parent
Senior notes	6.550		2017		$	250		$	250
	5.050		2018			250			250
	8.750		2019			300			300
	6.250		2020			300			300
	5.050		2022			300			300
	3.875		2024			250			250
	3.600		2025			250			-
	4.700		2043			250			250
	4.875		2044			300			300
Total CMS Energy senior notes					$	2,450		$	2,200
Term loan facility	variable	1	2017			180			180
Total CMS Energy parent					$	2,630		$	2,380
Consumers					$	5,409		$	5,283
Other CMS Energy subsidiaries
EnerBank certificates of deposit	1.365	2	2016-2025		$	1,098		$	884
Total other CMS Energy subsidiaries					$	1,098		$	884
Total CMS Energy principal amount outstanding					$	9,137		$	8,547
Current amounts						(684)			(519)
Net unamortized discounts						(12)			(12)
Total CMS Energy long-term debt					$	8,441		$	8,016

Outstanding borrowings bear interest at an annual interest rate of LIBOR plus 0.85 percent (1.19 percent at December 31, 2015).

The weighted-average interest rate for EnerBank’s certificates of deposit was 1.36 percent at December 31, 2015 and 1.22 percent at December 31, 2014. EnerBank’s primary deposit product consists of brokered certificates of deposit with varying maturities and having a face value of $1,000.

Presented in the following table is Consumers’ long-term debt at December 31:



In Millions
	Interest Rate (%)		Maturity	2015			2014
Consumers
FMBs1	2.600		2015		$	-		$	50
	5.500		2016			173			173
	5.150		2017			250			250
	3.210		2017			100			100
	5.650		2018			250			250
	6.125		2019			350			350
	6.700		2019			500			500
	5.650		2020			300			300
	3.770		2020			100			100
	5.300		2022			250			250
	2.850		2022			375			375
	3.375		2023			325			325
	3.190		2024			52			52
	3.125		2024			250			250
	3.390		2027			35			35
	5.800		2035			175			175
	6.170		2040			50			50
	4.970		2040			50			50
	4.310		2042			263			263
	3.950		2043			425			425
	4.100		2045			250			-
	4.350		2064			250			250
					$	4,773		$	4,573
Securitization bonds	5.760		2015			-			49
	2.689	2	2020-2029	3		353			378
					$	353		$	427
Senior notes	6.875		2018			180			180
Tax-exempt pollution control revenue bonds	various		2018-2035			103			103
Total Consumers principal amount outstanding					$	5,409		$	5,283
Current amounts						(198)			(124)
Net unamortized discounts						(5)			(5)
Total Consumers long-term debt					$	5,206		$	5,154

The weighted-average interest rate for Consumers’ FMBs was 4.73 percent at December 31, 2015 and 4.75 percent at December 31, 2014.

The weighted-average interest rate for Consumers’ Securitization bonds issued through its subsidiary Consumers 2014 Securitization Funding was 2.69 percent at December 31, 2015 and 2.60 percent at December 31, 2014.

Principal and interest payments are made semiannually.

Financings: Presented in the following table is a summary of major long-term debt transactions during the year ended December 31, 2015:



	Principal					Issue/Retirement
	(In Millions)			Interest Rate		Date	Maturity Date
Debt issuances
CMS Energy parent
Senior notes		$	250	3.600	%	November 2015	November 2025
Total CMS Energy parent		$	250
Consumers
FMBs		$	250	4.100	%	November 2015	November 2045
Total Consumers		$	250
Total CMS Energy		$	500
Debt retirements
Consumers
FMBs		$	50	2.600	%	October 2015	October 2015
Total Consumers		$	50
Total CMS Energy		$	50

FMBs: Consumers secures its FMBs by a mortgage and lien on substantially all of its property. Consumers’ ability to issue FMBs is restricted by certain provisions in the First Mortgage Bond Indenture and the need for regulatory approvals under federal law. Restrictive issuance provisions in the First Mortgage Bond Indenture include achieving a two-times interest coverage ratio and having sufficient unfunded net property additions.

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. At December 31, 2015, Consumers had entered into short-term borrowing programs allowing it to issue up to $800 million in short-term securities; $249 million of securities were outstanding under these programs. 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 remaining availability was $900 million at December 31, 2015. The authorizations were effective July 1, 2014 and terminate June 30, 2016. Any long-term issuances during the authorization period are exempt from FERC’s competitive bidding and negotiated placement requirements.

Securitization Bonds: Certain regulatory assets held by Consumers’ subsidiary, Consumers 2014 Securitization Funding, collateralize Consumers’ Securitization bonds. The bondholders have no recourse to Consumers’ assets except for those held by the subsidiary that issued the bonds. Consumers collects Securitization surcharges 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 the subsidiary that issued the bonds.

Debt Maturities: At December 31, 2015, the aggregate annual contractual maturities for long-term debt for the next five years were:



In Millions
	2016			2017			2018			2019			2020
CMS Energy, including Consumers
Long-term debt		$	684		$	1,010		$	911		$	1,288		$	801
Consumers
Long-term debt		$	198		$	375		$	523		$	876		$	426

Revolving Credit Facilities: The following secured revolving credit facilities with banks were available at December 31, 2015:



In Millions
	Amount of			Amount			Letters of Credit			Amount
Expiration Date	Facility			Borrowed			Outstanding			Available
CMS Energy parent
May 27, 20201		$	550		$	-		$	1		$	549
Consumers
May 27, 20202		$	650		$	-		$	9		$	641
November 23, 20172,3			250			-			-			250
May 9, 20182			30			-			30			-

Obligations under this facility are secured by Consumers common stock.

Obligations under this facility are secured by FMBs of Consumers.

In November 2015, Consumers entered into a new $250 million credit facility and terminated its $250 million accounts receivable sales program.

Short-term Borrowings: Under Consumers’ commercial paper program, Consumers may issue, in one or more placements, commercial paper notes with maturities of up to 365 days and that bear interest at fixed or floating rates. These issuances are supported by Consumers’ $650 million revolving credit facility and may have an aggregate principal amount outstanding of up to $500 million. While the amount of outstanding commercial paper does not reduce the revolver’s available capacity, Consumers would not issue commercial paper in an amount exceeding the available revolver capacity. At December 31, 2015, $249 million of commercial paper notes with a weighted-average annual interest rate of 0.91 percent was outstanding under this program.

Dividend Restrictions: At December 31, 2015, payment of dividends by CMS Energy on its common stock was limited to $3.9 billion under provisions of the Michigan Business Corporation Act of 1972.

Under the provisions of its articles of incorporation, at December 31, 2015, Consumers had $884 million 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 year ended December 31, 2015, Consumers paid $474 million in dividends on its common stock to CMS Energy.

Capitalization: The authorized capital stock of CMS Energy consists of:

350 million shares of CMS Energy Common Stock, par value $0.01 per share

10 million shares of CMS Energy Preferred Stock, par value $0.01 per share

Issuance of Common Stock: In April 2015, CMS Energy entered into an updated 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 $100 million. In 2015, CMS Energy issued 888,610 shares of common stock at an average price of $33.76 per share, resulting in net proceeds of $30 million.

Preferred Stock of Subsidiary: Presented in the following table are details about Consumers’ preferred stock outstanding:



				Optional			Number of	Balance
				Redemption			Shares	Outstanding
	Series			Price			Outstanding	(In Millions)
December 31								2015			2014
Cumulative, $100 par value, authorized 7,500,000 shares, with no mandatory redemption		$	4.50		$	110.00	373,148		$	37		$	37

Consumers Energy Company [Member]

Financings And Capitalization