2019 Q1 Form 10-K Financial Statement

#000081115619000003 Filed on February 05, 2019

View on sec.gov

Income Statement

Concept 2019 Q1 2017 Q4 2017 Q3
Revenue $2.059B $1.778B $1.527B
YoY Change 5.43% 8.41% -3.78%
Cost Of Revenue $800.0M $649.0M $494.0M
YoY Change 2.3% 11.13% -5.18%
Gross Profit $1.259B $1.129B $1.033B
YoY Change 7.51% 6.91% -3.1%
Gross Profit Margin 61.15% 63.5% 67.65%
Selling, General & Admin
YoY Change
% of Gross Profit
Research & Development
YoY Change
% of Gross Profit
Depreciation & Amortization $298.0M $229.0M $193.0M
YoY Change 6.81% 7.01% 5.46%
% of Gross Profit 23.67% 20.28% 18.68%
Operating Expenses $900.0M $750.0M $703.0M
YoY Change 11.39% -3.35% 1.74%
Operating Profit $359.0M $379.0M $330.0M
YoY Change -1.1% 35.36% -12.0%
Interest Expense $121.0M -$103.0M $111.0M
YoY Change 9.01% -4.63% -206.73%
% of Operating Profit 33.7% -27.18% 33.64%
Other Income/Expense, Net $23.00M -$54.00M $10.00M
YoY Change -20.69% 12.5% 0.0%
Pretax Income $261.0M $222.0M $229.0M
YoY Change -7.12% 79.03% -18.51%
Income Tax $48.00M $76.00M $57.00M
% Of Pretax Income 18.39% 34.23% 24.89%
Net Earnings $213.0M -$3.000M $172.0M
YoY Change -11.62% -103.9% -7.53%
Net Earnings / Revenue 10.34% -0.17% 11.26%
Basic Earnings Per Share $0.75 -$0.01 $0.61
Diluted Earnings Per Share $0.75 -$0.01 $0.61
COMMON SHARES
Basic Shares Outstanding 283.4M shares
Diluted Shares Outstanding 283.6M shares 281.6M shares

Balance Sheet

Concept 2019 Q1 2017 Q4 2017 Q3
SHORT-TERM ASSETS
Cash & Short-Term Investments $234.0M $182.0M $142.0M
YoY Change 20.0% -22.55% -58.11%
Cash & Equivalents $234.0M $182.0M $173.0M
Short-Term Investments
Other Short-Term Assets $97.00M $83.00M $321.0M
YoY Change -72.21% -77.38% 10.69%
Inventory $442.0M $672.0M $787.0M
Prepaid Expenses
Receivables $997.0M $1.032B $643.0M
Other Receivables $250.0M $200.0M $228.0M
Total Short-Term Assets $2.376B $2.475B $2.121B
YoY Change 7.66% 8.55% -3.5%
LONG-TERM ASSETS
Property, Plant & Equipment $18.32B $16.76B $16.44B
YoY Change 8.35% 6.66% 6.48%
Goodwill
YoY Change
Intangibles
YoY Change
Long-Term Investments $62.00M $64.00M $71.00M
YoY Change -7.46% -1.54% 4.41%
Other Assets $538.0M $799.0M $2.307B
YoY Change -78.54% -67.31% 14.04%
Total Long-Term Assets $22.42B $20.58B $20.00B
YoY Change 8.5% 6.37% 7.27%
TOTAL ASSETS
Total Short-Term Assets $2.376B $2.475B $2.121B
Total Long-Term Assets $22.42B $20.58B $20.00B
Total Assets $24.79B $23.05B $22.12B
YoY Change 8.42% 6.6% 6.13%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $544.0M $725.0M $632.0M
YoY Change 0.74% 18.85% 15.33%
Accrued Expenses $144.0M $136.0M $114.0M
YoY Change 17.07% 14.29% 4.59%
Deferred Revenue
YoY Change
Short-Term Debt $30.00M $170.0M $230.0M
YoY Change -57.29% 206.67%
Long-Term Debt Due $821.0M $1.081B $980.0M
YoY Change -36.16% 22.01% -2.49%
Total Short-Term Liabilities $2.106B $2.784B $2.261B
YoY Change -15.15% 4.86% 9.28%
LONG-TERM LIABILITIES
Long-Term Debt $11.11B $9.123B $9.121B
YoY Change 22.27% 4.26% 3.27%
Other Long-Term Liabilities $345.0M $307.0M $3.665B
YoY Change -93.55% -91.57% 7.32%
Total Long-Term Liabilities $17.79B $15.79B $12.79B
YoY Change 23.32% 27.43% 4.4%
TOTAL LIABILITIES
Total Short-Term Liabilities $2.106B $2.784B $2.261B
Total Long-Term Liabilities $17.79B $15.79B $12.79B
Total Liabilities $19.90B $18.57B $17.59B
YoY Change 8.9% 6.93% 6.04%
SHAREHOLDERS EQUITY
Retained Earnings -$166.0M -$531.0M
YoY Change
Common Stock $5.090B $5.022B
YoY Change
Preferred Stock
YoY Change
Treasury Stock (at cost)
YoY Change
Treasury Stock Shares
Shareholders Equity $4.858B $4.441B $4.535B
YoY Change
Total Liabilities & Shareholders Equity $24.79B $23.05B $22.12B
YoY Change 8.42% 6.6% 6.13%

Cashflow Statement

Concept 2019 Q1 2017 Q4 2017 Q3
OPERATING ACTIVITIES
Net Income $213.0M -$3.000M $172.0M
YoY Change -11.62% -103.9% -7.53%
Depreciation, Depletion And Amortization $298.0M $229.0M $193.0M
YoY Change 6.81% 7.01% 5.46%
Cash From Operating Activities $617.0M $506.0M $80.00M
YoY Change -12.85% 30.41% -42.86%
INVESTING ACTIVITIES
Capital Expenditures $481.0M -$457.0M -$462.0M
YoY Change 13.98% 2.01% 13.51%
Acquisitions
YoY Change
Other Investing Activities $27.00M -$57.00M -$86.00M
YoY Change -6.9% -17.39% 6.17%
Cash From Investing Activities -$675.0M -$514.0M -$548.0M
YoY Change 48.03% -0.58% 12.3%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net $3.000M
YoY Change 0.0%
Debt Paid & Issued, Net $790.0M
YoY Change 338.89%
Cash From Financing Activities $150.0M 39.00M 200.0M
YoY Change -165.5% 116.67% -35.28%
NET CHANGE
Cash From Operating Activities $617.0M 506.0M 80.00M
Cash From Investing Activities -$675.0M -514.0M -548.0M
Cash From Financing Activities $150.0M 39.00M 200.0M
Net Change In Cash $92.00M 31.00M -268.0M
YoY Change 300.0% -127.93% 587.18%
FREE CASH FLOW
Cash From Operating Activities $617.0M $506.0M $80.00M
Capital Expenditures $481.0M -$457.0M -$462.0M
Free Cash Flow $136.0M $963.0M $542.0M
YoY Change -52.45% 15.19% -0.91%

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CY2017 us-gaap Other Comprehensive Income Defined Benefit Plan Net Prior Service Costs Credit Arising During Period Net Of Tax
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CY2018 us-gaap Other Comprehensive Income Defined Benefit Plan Net Prior Service Costs Credit Arising During Period Net Of Tax
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CY2017 us-gaap Other Comprehensive Income Defined Benefit Plans Net Unamortized Gain Loss Arising During Period Tax
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CY2017 us-gaap Other Comprehensive Income Loss Amortization Adjustment From Aoci Pension And Other Postretirement Benefit Plans For Net Prior Service Cost Credit Net Of Tax
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CY2018 us-gaap Other Comprehensive Income Loss Amortization Adjustment From Aoci Pension And Other Postretirement Benefit Plans For Net Prior Service Cost Credit Net Of Tax
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0 USD
CY2017 us-gaap Other Comprehensive Income Loss Amortization Adjustment From Aoci Pension And Other Postretirement Benefit Plans For Net Prior Service Cost Credit Tax
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0 USD
CY2018 us-gaap Other Comprehensive Income Loss Amortization Adjustment From Aoci Pension And Other Postretirement Benefit Plans For Net Prior Service Cost Credit Tax
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CY2017 us-gaap Other Comprehensive Income Loss Pension And Other Postretirement Benefit Plans Benefit Plan Improvement Tax Effect
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CY2018 us-gaap Other Comprehensive Income Loss Pension And Other Postretirement Benefit Plans Benefit Plan Improvement Tax Effect
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3000000 USD
CY2017 us-gaap Other Comprehensive Income Loss Reclassification Adjustment From Aoci For Writedown Of Securities Net Of Tax
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CY2018 us-gaap Other Comprehensive Income Loss Reclassification Adjustment From Aoci For Writedown Of Securities Net Of Tax
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CY2016 us-gaap Other Comprehensive Income Loss Reclassification Adjustment From Aoci For Writedown Of Securities Tax
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CY2017 us-gaap Other Comprehensive Income Loss Reclassification Adjustment From Aoci For Writedown Of Securities Tax
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CY2018 us-gaap Other Comprehensive Income Loss Reclassification Adjustment From Aoci For Writedown Of Securities Tax
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CY2016 us-gaap Other Comprehensive Income Loss Reclassification Adjustment From Aoci Pension And Other Postretirement Benefit Plans For Net Gain Loss Net Of Tax
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CY2017 us-gaap Other Comprehensive Income Loss Reclassification Adjustment From Aoci Pension And Other Postretirement Benefit Plans For Net Gain Loss Net Of Tax
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CY2018 us-gaap Other Comprehensive Income Loss Reclassification Adjustment From Aoci Pension And Other Postretirement Benefit Plans For Net Gain Loss Net Of Tax
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CY2017 us-gaap Other Comprehensive Income Loss Reclassification Adjustment From Aoci Pension And Other Postretirement Benefit Plans For Net Gain Loss Tax
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1000000 USD
CY2018 us-gaap Other Comprehensive Income Loss Reclassification Adjustment From Aoci Pension And Other Postretirement Benefit Plans For Net Gain Loss Tax
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1000000 USD
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CY2018 cms New Accounting Pronouncements And Description Of New Accounting Pronouncements Not Yet Adopted
NewAccountingPronouncementsAndDescriptionOfNewAccountingPronouncementsNotYetAdopted
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;padding-bottom:16px;text-align:left;font-size:18pt;"><font style="font-family:Times New Roman;font-size:18pt;color:#000000;font-style:normal;font-weight:bold;text-decoration:none;">New Accounting Standards</font></div><div style="line-height:120%;padding-bottom:16px;text-align:left;font-size:16pt;"><font style="font-family:Times New Roman;font-size:16pt;color:#000000;font-style:normal;font-weight:normal;text-decoration:none;">Implementation of New Accounting Standards</font></div><div style="line-height:120%;padding-bottom:16px;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;">ASU&#160;2014-09,</font><font style="font-family:inherit;font-size:11pt;"> </font><font style="font-family:inherit;font-size:11pt;font-style:italic;">Revenue from Contracts with Customers:</font><font style="font-family:inherit;font-size:11pt;"> This standard, which was effective on January&#160;1,&#160;2018 for CMS&#160;Energy and Consumers, provides new guidance for recognizing revenue from contracts with customers. A primary objective of the standard is to provide a single, comprehensive revenue recognition model that will be applied across entities, industries, and capital markets. The new guidance replaced most of the previous revenue recognition requirements in GAAP, although certain guidance specific to rate-regulated utilities was retained. CMS&#160;Energy and Consumers had the option to apply the standard retrospectively to all prior periods presented or retrospectively with the cumulative effect of the standard recorded as an adjustment to beginning retained earnings. They also had the option to apply the standard only to contracts existing on the effective date. CMS&#160;Energy and Consumers applied the standard retrospectively to contracts existing on the effective date, and recorded an immaterial cumulative-effect reduction to beginning retained earnings for certain contract costs that can no longer be deferred under the new guidance.</font></div><div style="line-height:120%;padding-bottom:16px;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">The implementation of this standard did not have a material impact on CMS&#160;Energy&#8217;s or Consumers&#8217; consolidated net income, cash flows, or financial position. CMS&#160;Energy and Consumers did not identify any significant changes to their revenue recognition practices that were required by the new guidance, but in accordance with the standard, they have provided additional disclosures about their revenues in </font><font style="font-family:inherit;font-size:11pt;">Note&#160;16, Revenue</font><font style="font-family:inherit;font-size:11pt;">.</font></div><div style="line-height:120%;padding-bottom:16px;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;">ASU&#160;2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities:</font><font style="font-family:inherit;font-size:11pt;"> This standard, which was effective on January&#160;1,&#160;2018 for CMS&#160;Energy and Consumers, is intended to improve the accounting for financial instruments. The standard requires investments in equity securities to be measured at fair value, with changes in fair value recognized in net income, except for certain investments such as those that qualify for equity-method accounting. The standard no longer permits unrealized gains and losses for certain equity investments to be recorded in AOCI. There are other targeted changes as well. Entities must apply the standard using a modified retrospective approach, with the cumulative effect of the standard recorded as an adjustment to beginning retained earnings.</font></div><div style="line-height:120%;padding-bottom:16px;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">The implementation of the standard had no impact on CMS&#160;Energy&#8217;s consolidated financial statements. In accordance with the standard, as of January&#160;1,&#160;2018, Consumers removed a </font><font style="font-family:inherit;font-size:11pt;">$19&#160;million</font><font style="font-family:inherit;font-size:11pt;"> unrealized gain and the associated deferred taxes on its investment in CMS&#160;Energy common stock from AOCI and recorded the gain in retained earnings. In January&#160;2018, Consumers transferred substantially all of its shares in CMS&#160;Energy common stock to a related charitable foundation and, in accordance with this standard, recognized all unrealized gains and losses on its remaining shares in net income for the year ended&#160;</font><font style="font-family:inherit;font-size:11pt;">December&#160;31,&#160;2018</font><font style="font-family:inherit;font-size:11pt;">. The accounting treatment for this investment is reflected in Consumers&#8217; consolidated financial statements only, and had no impact on CMS&#160;Energy&#8217;s consolidated financial statements. For further details on CMS&#160;Energy&#8217;s and Consumers&#8217; investments in debt and equity securities, see </font><font style="font-family:inherit;font-size:11pt;">Note&#160;7, Financial Instruments</font><font style="font-family:inherit;font-size:11pt;">.</font></div><div style="line-height:120%;padding-bottom:16px;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;">ASU&#160;2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income:</font><font style="font-family:inherit;font-size:11pt;"> This standard addresses the income tax effects stranded in AOCI as a result of the TCJA. Existing GAAP requires that the remeasurement of deferred tax assets and liabilities resulting from a change in tax laws or rates be presented in net income from continuing operations, even if the deferred taxes were associated with items that were originally recognized in AOCI. As a result, upon recognizing the effects of the TCJA, the tax effects of items in AOCI (referred to as stranded tax effects) no longer reflected the current income tax rate. To address this matter, this standard permits companies to reclassify to retained earnings the stranded tax effects of the TCJA. The standard is effective on January&#160;1,&#160;2019 for CMS&#160;Energy and Consumers, but early adoption is permitted. The new guidance is to be applied either in the period of adoption or retrospectively to each prior period in which the effect of the TCJA was recognized. CMS&#160;Energy and Consumers elected to adopt this standard early. Accordingly, as of January&#160;1,&#160;2018, CMS&#160;Energy reclassified </font><font style="font-family:inherit;font-size:11pt;">$11 million</font><font style="font-family:inherit;font-size:11pt;"> of stranded tax effects from AOCI to retained earnings, which included </font><font style="font-family:inherit;font-size:11pt;">$5 million</font><font style="font-family:inherit;font-size:11pt;"> reclassified at Consumers. At </font><font style="font-family:inherit;font-size:11pt;">December&#160;31,&#160;2018</font><font style="font-family:inherit;font-size:11pt;">, CMS&#160;Energy and Consumers did not have any material stranded tax effects remaining in AOCI.</font></div><div style="line-height:120%;padding-bottom:16px;text-align:left;font-size:16pt;"><font style="font-family:Times New Roman;font-size:16pt;color:#000000;font-style:normal;font-weight:normal;text-decoration:none;">New Accounting Standards Not Yet Effective</font></div><div style="line-height:120%;padding-bottom:16px;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;">ASU&#160;2016-02, Leases:</font><font style="font-family:inherit;font-size:11pt;"> This standard establishes a new accounting model for leases. The standard requires entities to recognize lease assets and liabilities on the balance sheet for all leases with a term of more than one year, including operating leases, which are not recorded on the balance sheet under existing standards. The new guidance also amends the definition of a lease to require that a lessee control the use of a specified asset, and not simply control or take the output of the asset. On the statement of income, leases that meet existing capital lease criteria will generally be accounted for under a financing model, while operating leases will generally be accounted for under a straight-line expense model. The standard is effective on January&#160;1,&#160;2019 for CMS&#160;Energy and Consumers, but early adoption is permitted.</font></div><div style="line-height:120%;padding-bottom:16px;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">CMS&#160;Energy and Consumers did not adopt the standard early and will elect certain practical expedients permitted by the standard, under which they will not be required to perform lease assessments or reassessments for agreements existing on the effective date. They also will elect a transition method under which they will initially apply the standard on January 1, 2019, without adjusting amounts presented for prior periods. Under this method, the cumulative effect of applying the standard must be recorded as an adjustment to beginning retained earnings. Under the standard, CMS&#160;Energy and Consumers will recognize additional lease assets and liabilities on their consolidated balance sheets as of January 1, 2019 for their operating leases. CMS&#160;Energy and Consumers are finalizing their implementation of the standard and do not expect it to have a material impact on their consolidated net income or cash flows. See </font><font style="font-family:inherit;font-size:11pt;">Note&#160;10, Leases and Palisades Financing</font><font style="font-family:inherit;font-size:11pt;">, for more information on CMS&#160;Energy&#8217;s and Consumers&#8217; operating lease obligations.</font></div><div style="line-height:120%;padding-bottom:16px;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;">ASU&#160;2016-13, Measurement of Credit Losses on Financial Instruments:</font><font style="font-family:inherit;font-size:11pt;"> This standard, which will be effective January&#160;1,&#160;2020 for CMS&#160;Energy and Consumers, provides new guidance for estimating and recording credit losses on financial instruments. The standard will apply to the recognition of loan losses at EnerBank as well as to the recognition of uncollectible accounts expense at Consumers. Entities will apply the standard using a modified retrospective approach, with a cumulative-effect adjustment recorded to beginning retained earnings on the effective date. CMS&#160;Energy and Consumers are evaluating the impact of the standard on their consolidated financial statements.</font></div></div>
CY2018 us-gaap Revenue Recognition Accounting Policy Gross And Net Revenue Disclosure
RevenueRecognitionAccountingPolicyGrossAndNetRevenueDisclosure
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;padding-bottom:16px;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-weight:bold;">MISO Transactions:</font><font style="font-family:inherit;font-size:11pt;"> MISO requires the submission of hourly day-ahead and real-time bids and offers for energy at locations across the MISO region. CMS&#160;Energy and Consumers account for MISO transactions on a net hourly basis in each of the real-time and day-ahead markets, netted across all MISO energy market locations. CMS&#160;Energy and Consumers record net hourly purchases in purchased and interchange power and net hourly sales in operating revenue on their consolidated statements of income. They record net billing adjustments upon receipt of settlement statements, record accruals for future net purchases and sales adjustments based on historical experience, and reconcile accruals to actual expenses and sales upon receipt of settlement statements.</font></div></div>
CY2018 us-gaap Use Of Estimates
UseOfEstimates
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;padding-bottom:16px;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Use of Estimates:</font><font style="font-family:inherit;font-size:11pt;"> CMS&#160;Energy and Consumers are required to make estimates using assumptions that may affect reported amounts and disclosures. Actual results could differ from those estimates.</font></div></div>

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