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Financial Instruments
 6 Months Ended
Jun. 30, 2016
Financial Instruments

6:Financial Instruments

Presented in the following table are the carrying amounts and fair values, by level within the fair value hierarchy, of CMS Energy’s and Consumers’ financial instruments that are not recorded at fair value.  The table does not include information on cash, cash equivalents, short-term accounts and notes receivable, short-term investments, and current liabilities since the carrying amounts of these items approximate their fair values because of their short-term nature.  For information about assets and liabilities recorded at fair value and for additional details regarding the fair value hierarchy, see Note 5, Fair Value Measurements.



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In Millions  



June 30, 2016

 

December 31, 2015

 



 

Fair Value

 

 

Fair Value

 



Carrying 

 

 

 

Level

 

Carrying 

 

 

 

Level

 



Amount 

Total 

 1  2  3 

 

Amount 

Total 

 1  2  3 

 

CMS Energy, including Consumers

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Long-term
   receivables1

 

$

 21 

 

$

 21 

 

$

 -

 

$

 -

 

$

 21 

 

 

$

 -

 

$

 -

 

$

 -

 

$

 -

 

$

 -

 

Notes
   receivable2

 

 

 1,245 

 

 

 1,336 

 

 

 -

 

 

 -

 

 

 1,336 

 

 

 

 1,161 

 

 

 1,228 

 

 

 -

 

 

 -

 

 

 1,228 

 

Securities held
   to maturity

 

 

 13 

 

 

 13 

 

 

 -

 

 

 13 

 

 

 -

 

 

 

 11 

 

 

 11 

 

 

 -

 

 

 11 

 

 

 -

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Long-term
   debt3

 

 

 9,383 

 

 

 10,394 

 

 

 -

 

 

 9,324 

 

 

 1,070 

 

 

 

 9,084 

 

 

 9,599 

 

 

 -

 

 

 8,648 

 

 

 951 

 

Long-term
   payables4

 

 

 21 

 

 

 22 

 

 

 -

 

 

 -

 

 

 22 

 

 

 

 14 

 

 

 14 

 

 

 -

 

 

 -

 

 

 14 

 

Consumers

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Long-term
   receivables5

 

$

 21 

 

$

 21 

 

$

 -

 

$

 -

 

$

 21 

 

 

$

 -

 

$

 -

 

$

 -

 

$

 -

 

$

 -

 

Notes
   receivable

 

 

 44 

 

 

 44 

 

 

 -

 

 

 -

 

 

 44 

 

 

 

 -

 

 

 -

 

 

 -

 

 

 -

 

 

 -

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Long-term
   debt6

 

 

 5,370 

 

 

 6,019 

 

 

 -

 

 

 4,949 

 

 

 1,070 

 

 

 

 5,381 

 

 

 5,684 

 

 

 -

 

 

 4,733 

 

 

 951 

 

Long-term
   payables

 

 

 7 

 

 

 7 

 

 

 -

 

 

 -

 

 

 7 

 

 

 

 -

 

 

 -

 

 

 -

 

 

 -

 

 

 -

 



1

Includes current accounts receivable of $12 million at June 30, 2016.

2

Includes current portion of notes receivable of $157 million at June 30, 2016 and $144 million at December 31, 2015.

3

Includes current portion of long-term debt of $897 million at June 30, 2016 and $684 million at December 31, 2015.

4

Includes current portion of long-term payables of $1 million at June 30, 2016 and December 31, 2015.

5

Includes current accounts receivable of $12 million at June 30, 2016.

6

Includes current portion of long-term debt of $448 million at June 30, 2016 and $198 million at December 31, 2015.

At CMS Energy, notes receivable consist primarily of EnerBank’s fixed-rate installment loans.  EnerBank estimates the fair value of these loans using a discounted cash flows technique that incorporates market interest rates as well as assumptions about the remaining life of the loans and credit risk.

CMS Energy and Consumers estimate the fair value of their long-term debt using quoted prices from market trades of the debt, if available.  In the absence of quoted prices, CMS Energy and Consumers calculate market yields and prices for the debt using a matrix method that incorporates market data for similarly rated debt.  Depending on the information available, other valuation techniques and models may be used that rely on assumptions that cannot be observed or confirmed through market transactions.

The effects of third-party credit enhancements are excluded from the fair value measurements of long-term debt.  At June 30, 2016 and December 31, 2015, CMS Energy’s long-term debt included  $103 million principal amount that was supported by third-party credit enhancements.  This entire principal amount was at Consumers.

Presented in the following table are CMS Energy’s and Consumers’ investment securities classified as available for sale or held to maturity:



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In Millions  



June 30, 2016

 

December 31, 2015

 



 

Unrealized 

Unrealized 

Fair 

 

 

Unrealized 

Unrealized 

Fair 

 



Cost 

Gains 

Losses 

Value 

 

Cost 

Gains 

Losses 

Value 

 

CMS Energy, including Consumers

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Available for sale

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DB SERP

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mutual funds

 

$

 149 

 

$

-

 

$

 6 

 

$

 143 

 

 

$

 152 

 

$

-

 

$

 6 

 

$

 146 

 

Held to maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt securities

 

 

 13 

 

 

-

 

 

-

 

 

 13 

 

 

 

 11 

 

 

-

 

 

-

 

 

 11 

 

Consumers

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Available for sale

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DB SERP

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mutual funds

 

$

 107 

 

$

-

 

$

 5 

 

$

 102 

 

 

$

 108 

 

$

-

 

$

 4 

 

$

 104 

 

CMS Energy
   common stock

 

 

 4 

 

 

 33 

 

 

-

 

 

 37 

 

 

 

 4 

 

 

 25 

 

 

-

 

 

 29 

 



The mutual funds classified as available for sale hold primarily fixed-income instruments of varying maturities.  Debt securities classified as held to maturity consist primarily of mortgage-backed securities and Utah Housing Corporation bonds held by EnerBank.

Consumers Energy Company [Member]  
Financial Instruments

6:Financial Instruments

Presented in the following table are the carrying amounts and fair values, by level within the fair value hierarchy, of CMS Energy’s and Consumers’ financial instruments that are not recorded at fair value.  The table does not include information on cash, cash equivalents, short-term accounts and notes receivable, short-term investments, and current liabilities since the carrying amounts of these items approximate their fair values because of their short-term nature.  For information about assets and liabilities recorded at fair value and for additional details regarding the fair value hierarchy, see Note 5, Fair Value Measurements.



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In Millions  



June 30, 2016

 

December 31, 2015

 



 

Fair Value

 

 

Fair Value

 



Carrying 

 

 

 

Level

 

Carrying 

 

 

 

Level

 



Amount 

Total 

 1  2  3 

 

Amount 

Total 

 1  2  3 

 

CMS Energy, including Consumers

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Long-term
   receivables1

 

$

 21 

 

$

 21 

 

$

 -

 

$

 -

 

$

 21 

 

 

$

 -

 

$

 -

 

$

 -

 

$

 -

 

$

 -

 

Notes
   receivable2

 

 

 1,245 

 

 

 1,336 

 

 

 -

 

 

 -

 

 

 1,336 

 

 

 

 1,161 

 

 

 1,228 

 

 

 -

 

 

 -

 

 

 1,228 

 

Securities held
   to maturity

 

 

 13 

 

 

 13 

 

 

 -

 

 

 13 

 

 

 -

 

 

 

 11 

 

 

 11 

 

 

 -

 

 

 11 

 

 

 -

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Long-term
   debt3

 

 

 9,383 

 

 

 10,394 

 

 

 -

 

 

 9,324 

 

 

 1,070 

 

 

 

 9,084 

 

 

 9,599 

 

 

 -

 

 

 8,648 

 

 

 951 

 

Long-term
   payables4

 

 

 21 

 

 

 22 

 

 

 -

 

 

 -

 

 

 22 

 

 

 

 14 

 

 

 14 

 

 

 -

 

 

 -

 

 

 14 

 

Consumers

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Long-term
   receivables5

 

$

 21 

 

$

 21 

 

$

 -

 

$

 -

 

$

 21 

 

 

$

 -

 

$

 -

 

$

 -

 

$

 -

 

$

 -

 

Notes
   receivable

 

 

 44 

 

 

 44 

 

 

 -

 

 

 -

 

 

 44 

 

 

 

 -

 

 

 -

 

 

 -

 

 

 -

 

 

 -

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Long-term
   debt6

 

 

 5,370 

 

 

 6,019 

 

 

 -

 

 

 4,949 

 

 

 1,070 

 

 

 

 5,381 

 

 

 5,684 

 

 

 -

 

 

 4,733 

 

 

 951 

 

Long-term
   payables

 

 

 7 

 

 

 7 

 

 

 -

 

 

 -

 

 

 7 

 

 

 

 -

 

 

 -

 

 

 -

 

 

 -

 

 

 -

 



1

Includes current accounts receivable of $12 million at June 30, 2016.

2

Includes current portion of notes receivable of $157 million at June 30, 2016 and $144 million at December 31, 2015.

3

Includes current portion of long-term debt of $897 million at June 30, 2016 and $684 million at December 31, 2015.

4

Includes current portion of long-term payables of $1 million at June 30, 2016 and December 31, 2015.

5

Includes current accounts receivable of $12 million at June 30, 2016.

6

Includes current portion of long-term debt of $448 million at June 30, 2016 and $198 million at December 31, 2015.

At CMS Energy, notes receivable consist primarily of EnerBank’s fixed-rate installment loans.  EnerBank estimates the fair value of these loans using a discounted cash flows technique that incorporates market interest rates as well as assumptions about the remaining life of the loans and credit risk.

CMS Energy and Consumers estimate the fair value of their long-term debt using quoted prices from market trades of the debt, if available.  In the absence of quoted prices, CMS Energy and Consumers calculate market yields and prices for the debt using a matrix method that incorporates market data for similarly rated debt.  Depending on the information available, other valuation techniques and models may be used that rely on assumptions that cannot be observed or confirmed through market transactions.

The effects of third-party credit enhancements are excluded from the fair value measurements of long-term debt.  At June 30, 2016 and December 31, 2015, CMS Energy’s long-term debt included  $103 million principal amount that was supported by third-party credit enhancements.  This entire principal amount was at Consumers.

Presented in the following table are CMS Energy’s and Consumers’ investment securities classified as available for sale or held to maturity:



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In Millions  



June 30, 2016

 

December 31, 2015

 



 

Unrealized 

Unrealized 

Fair 

 

 

Unrealized 

Unrealized 

Fair 

 



Cost 

Gains 

Losses 

Value 

 

Cost 

Gains 

Losses 

Value 

 

CMS Energy, including Consumers

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Available for sale

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DB SERP

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mutual funds

 

$

 149 

 

$

-

 

$

 6 

 

$

 143 

 

 

$

 152 

 

$

-

 

$

 6 

 

$

 146 

 

Held to maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt securities

 

 

 13 

 

 

-

 

 

-

 

 

 13 

 

 

 

 11 

 

 

-

 

 

-

 

 

 11 

 

Consumers

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Available for sale

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DB SERP

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mutual funds

 

$

 107 

 

$

-

 

$

 5 

 

$

 102 

 

 

$

 108 

 

$

-

 

$

 4 

 

$

 104 

 

CMS Energy
   common stock

 

 

 4 

 

 

 33 

 

 

-

 

 

 37 

 

 

 

 4 

 

 

 25 

 

 

-

 

 

 29 

 



The mutual funds classified as available for sale hold primarily fixed-income instruments of varying maturities.  Debt securities classified as held to maturity consist primarily of mortgage-backed securities and Utah Housing Corporation bonds held by EnerBank.