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Financial Instruments
 3 Months Ended
Mar. 31, 2018
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 excludes cash, cash equivalents, short-term financial instruments, and trade accounts receivable and payable whose carrying amounts approximate their fair values. 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  



March 31, 2018

 

December 31, 2017

 



 

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

 

$

 20 

 

$

 20 

 

$

 -

 

$

 -

 

$

 20 

 

 

$

 21 

 

$

 21 

 

$

 -

 

$

 -

 

$

 21 

 

Notes
   receivable2

 

 

 1,370 

 

 

 1,453 

 

 

 -

 

 

 -

 

 

 1,453 

 

 

 

 1,371 

 

 

 1,464 

 

 

 -

 

 

 -

 

 

 1,464 

 

Securities held
   to maturity

 

 

 17 

 

 

 17 

 

 

 -

 

 

 17 

 

 

 -

 

 

 

 16 

 

 

 16 

 

 

 -

 

 

 16 

 

 

 -

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Long-term
   debt3

 

 

 10,261 

 

 

 10,273 

 

 

 -

 

 

 8,971 

 

 

 1,302 

 

 

 

 10,204 

 

 

 10,715 

 

 

 -

 

 

 9,363 

 

 

 1,352 

 

Long-term
   payables4

 

 

 25 

 

 

 26 

 

 

 -

 

 

 -

 

 

 26 

 

 

 

 27 

 

 

 26 

 

 

 -

 

 

 -

 

 

 26 

 

Consumers

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Long-term
   receivables1

 

$

 20 

 

$

 20 

 

$

 -

 

$

 -

 

$

 20 

 

 

$

 21 

 

$

 21 

 

$

 -

 

$

 -

 

$

 21 

 

Notes
   receivable5

 

 

 17 

 

 

 17 

 

 

 -

 

 

 -

 

 

 17 

 

 

 

 17 

 

 

 17 

 

 

 -

 

 

 -

 

 

 17 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Long-term
   debt6

 

 

 5,904 

 

 

 6,034 

 

 

 -

 

 

 4,732 

 

 

 1,302 

 

 

 

 5,904 

 

 

 6,236 

 

 

 -

 

 

 4,883 

 

 

 1,353 

 



1Includes current accounts receivable of $13 million at March 31, 2018 and $14 million at December 31, 2017.

2Includes current portion of notes receivable of $203 million at March 31, 2018 and $200 million at December 31, 2017.

3Includes current portion of long-term debt of $1.3 billion at March 31, 2018 and $ 1.1 billion at December 31, 2017.

4Includes current portion of long-term payables of $2 million at March 31, 2018 and $3 million at December 31, 2017.

5Includes current portion of notes receivable of $17 million at March 31, 2018 and $17 million at December 31, 2017.

6Includes current portion of long-term debt of $693 million at March 31, 2018 and $343 million at December 31, 2017.

At CMS Energy, notes receivable consisted primarily of EnerBank’s fixed-rate installment loans. EnerBank estimated 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 estimated 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 calculated market yields and prices for the debt using a matrix method incorporating 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 were excluded from the fair value measurements of long-term debt. At March 31, 2018 and December 31, 2017, 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  



March 31, 2018

 

December 31, 2017

 



 

Unrealized 

Unrealized 

Fair 

 

 

Unrealized 

Unrealized 

Fair 

 



Cost 

Gains 

Losses 

Value 

 

Cost 

Gains 

Losses 

Value 

 

CMS Energy, including Consumers

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Available for sale

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DB SERP

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt securities

 

$

 139 

 

$

 -

 

$

 (2)

 

$

 137 

 

 

$

 141 

 

$

 -

 

$

 -

 

$

 141 

 

Held to maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt securities

 

 

 17 

 

 

 -

 

 

 -

 

 

 17 

 

 

 

 16 

 

 

 -

 

 

 -

 

 

 16 

 

Consumers

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Available for sale

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DB SERP

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt securities

 

$

 101 

 

$

 -

 

$

 (1)

 

$

 100 

 

 

$

 102 

 

$

 -

 

$

 -

 

$

 102 

 

CMS Energy
   common stock1

 

 

 -

 

 

 -

 

 

 -

 

 

 -

 

 

 

 2 

 

 

 19 

 

 

 -

 

 

 21 

 



1In January 2018, Consumers implemented ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities. In accordance with the standard, as of January 1, 2018, Consumers removed a $19 million unrealized gain on its investment in CMS Energy common stock from AOCI and recorded the gain in retained earnings. For further details on CMS Energy’s and Consumers’ accounting for this new standard, see Note 1, New Accounting Standards.

In January 2018, Consumers transferred substantially all of its shares in CMS Energy common stock to a related charitable foundation. Consumers’ remaining equity investment in CMS Energy common stock was $1 million at March 31, 2018. There were no material changes in the fair value of Consumers’ investment in CMS Energy common stock during the three months ended March 31, 2018.

The DB SERP debt securities classified as available for sale were U.S. Treasury debt securities with maturities ranging from one to ten years. Debt securities classified as held to maturity consisted 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 excludes cash, cash equivalents, short-term financial instruments, and trade accounts receivable and payable whose carrying amounts approximate their fair values. 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  



March 31, 2018

 

December 31, 2017

 



 

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

 

$

 20 

 

$

 20 

 

$

 -

 

$

 -

 

$

 20 

 

 

$

 21 

 

$

 21 

 

$

 -

 

$

 -

 

$

 21 

 

Notes
   receivable2

 

 

 1,370 

 

 

 1,453 

 

 

 -

 

 

 -

 

 

 1,453 

 

 

 

 1,371 

 

 

 1,464 

 

 

 -

 

 

 -

 

 

 1,464 

 

Securities held
   to maturity

 

 

 17 

 

 

 17 

 

 

 -

 

 

 17 

 

 

 -

 

 

 

 16 

 

 

 16 

 

 

 -

 

 

 16 

 

 

 -

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Long-term
   debt3

 

 

 10,261 

 

 

 10,273 

 

 

 -

 

 

 8,971 

 

 

 1,302 

 

 

 

 10,204 

 

 

 10,715 

 

 

 -

 

 

 9,363 

 

 

 1,352 

 

Long-term
   payables4

 

 

 25 

 

 

 26 

 

 

 -

 

 

 -

 

 

 26 

 

 

 

 27 

 

 

 26 

 

 

 -

 

 

 -

 

 

 26 

 

Consumers

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Long-term
   receivables1

 

$

 20 

 

$

 20 

 

$

 -

 

$

 -

 

$

 20 

 

 

$

 21 

 

$

 21 

 

$

 -

 

$

 -

 

$

 21 

 

Notes
   receivable5

 

 

 17 

 

 

 17 

 

 

 -

 

 

 -

 

 

 17 

 

 

 

 17 

 

 

 17 

 

 

 -

 

 

 -

 

 

 17 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Long-term
   debt6

 

 

 5,904 

 

 

 6,034 

 

 

 -

 

 

 4,732 

 

 

 1,302 

 

 

 

 5,904 

 

 

 6,236 

 

 

 -

 

 

 4,883 

 

 

 1,353 

 



1Includes current accounts receivable of $13 million at March 31, 2018 and $14 million at December 31, 2017.

2Includes current portion of notes receivable of $203 million at March 31, 2018 and $200 million at December 31, 2017.

3Includes current portion of long-term debt of $1.3 billion at March 31, 2018 and $ 1.1 billion at December 31, 2017.

4Includes current portion of long-term payables of $2 million at March 31, 2018 and $3 million at December 31, 2017.

5Includes current portion of notes receivable of $17 million at March 31, 2018 and $17 million at December 31, 2017.

6Includes current portion of long-term debt of $693 million at March 31, 2018 and $343 million at December 31, 2017.

At CMS Energy, notes receivable consisted primarily of EnerBank’s fixed-rate installment loans. EnerBank estimated 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 estimated 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 calculated market yields and prices for the debt using a matrix method incorporating 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 were excluded from the fair value measurements of long-term debt. At March 31, 2018 and December 31, 2017, 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  



March 31, 2018

 

December 31, 2017

 



 

Unrealized 

Unrealized 

Fair 

 

 

Unrealized 

Unrealized 

Fair 

 



Cost 

Gains 

Losses 

Value 

 

Cost 

Gains 

Losses 

Value 

 

CMS Energy, including Consumers

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Available for sale

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DB SERP

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt securities

 

$

 139 

 

$

 -

 

$

 (2)

 

$

 137 

 

 

$

 141 

 

$

 -

 

$

 -

 

$

 141 

 

Held to maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt securities

 

 

 17 

 

 

 -

 

 

 -

 

 

 17 

 

 

 

 16 

 

 

 -

 

 

 -

 

 

 16 

 

Consumers

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Available for sale

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DB SERP

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt securities

 

$

 101 

 

$

 -

 

$

 (1)

 

$

 100 

 

 

$

 102 

 

$

 -

 

$

 -

 

$

 102 

 

CMS Energy
   common stock1

 

 

 -

 

 

 -

 

 

 -

 

 

 -

 

 

 

 2 

 

 

 19 

 

 

 -

 

 

 21 

 



1In January 2018, Consumers implemented ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities. In accordance with the standard, as of January 1, 2018, Consumers removed a $19 million unrealized gain on its investment in CMS Energy common stock from AOCI and recorded the gain in retained earnings. For further details on CMS Energy’s and Consumers’ accounting for this new standard, see Note 1, New Accounting Standards.

In January 2018, Consumers transferred substantially all of its shares in CMS Energy common stock to a related charitable foundation. Consumers’ remaining equity investment in CMS Energy common stock was $1 million at March 31, 2018. There were no material changes in the fair value of Consumers’ investment in CMS Energy common stock during the three months ended March 31, 2018.

The DB SERP debt securities classified as available for sale were U.S. Treasury debt securities with maturities ranging from one to ten years. Debt securities classified as held to maturity consisted primarily of mortgage-backed securities and Utah Housing Corporation bonds held by EnerBank.