Notes Receivable

6 Months Ended

Jun. 30, 2018

Accounts, Notes, Loans and Financing Receivable [Line Items]

Notes Receivable

Notes Receivable

Presented in the following table are details of CMS Energy’s and Consumers’ current and non‑current notes receivable:

In Millions
	June 30, 2018			December 31, 2017
CMS Energy, including Consumers
Current
EnerBank notes receivable, net of allowance for loan losses		$	186		$	178
EnerBank notes receivable held for sale		—			2
Michigan tax settlement		20			20
Non-current
EnerBank notes receivable		1,231			1,171
Total notes receivable		$	1,437		$	1,371
Consumers
Current
Michigan tax settlement		$	17		$	17
Total notes receivable		$	17		$	17

EnerBank notes receivable are unsecured consumer installment loans for financing home improvements. EnerBank records its notes receivable at cost, less an allowance for loan losses. Authorized contractors pay fees to EnerBank to provide borrowers with same-as-cash, zero interest, or reduced interest loans. Unearned income associated with the loan fees, which is recorded as a reduction to notes receivable on CMS Energy’s consolidated balance sheets, was $85 million at June 30, 2018 and $84 million at December 31, 2017.

In July 2018, EnerBank purchased a portfolio of secured and unsecured consumer retail installment contracts with a principal value of $81 million.

The allowance for loan losses is a valuation allowance to reflect estimated credit losses. The allowance is increased by the provision for loan losses and decreased by loan charge-offs net of recoveries. Management estimates the allowance balance required by taking into consideration historical loan loss experience, the nature and volume of the portfolio, economic conditions, and other factors. Loan losses are charged against the allowance when the loss is confirmed, but no later than the point at which a loan becomes 120 days past due.

Loans that are 30 days or more past due are considered delinquent. The balance of EnerBank’s delinquent consumer loans was $13 million at June 30, 2018 and $14 million at December 31, 2017.

At June 30, 2018 and December 31, 2017, $1 million of EnerBank’s loans had been modified as troubled debt restructurings.

Consumers Energy Company

Accounts, Notes, Loans and Financing Receivable [Line Items]

Notes Receivable

Notes Receivable

Presented in the following table are details of CMS Energy’s and Consumers’ current and non‑current notes receivable:

In Millions
	June 30, 2018			December 31, 2017
CMS Energy, including Consumers
Current
EnerBank notes receivable, net of allowance for loan losses		$	186		$	178
EnerBank notes receivable held for sale		—			2
Michigan tax settlement		20			20
Non-current
EnerBank notes receivable		1,231			1,171
Total notes receivable		$	1,437		$	1,371
Consumers
Current
Michigan tax settlement		$	17		$	17
Total notes receivable		$	17		$	17

EnerBank notes receivable are unsecured consumer installment loans for financing home improvements. EnerBank records its notes receivable at cost, less an allowance for loan losses. Authorized contractors pay fees to EnerBank to provide borrowers with same-as-cash, zero interest, or reduced interest loans. Unearned income associated with the loan fees, which is recorded as a reduction to notes receivable on CMS Energy’s consolidated balance sheets, was $85 million at June 30, 2018 and $84 million at December 31, 2017.

In July 2018, EnerBank purchased a portfolio of secured and unsecured consumer retail installment contracts with a principal value of $81 million.

The allowance for loan losses is a valuation allowance to reflect estimated credit losses. The allowance is increased by the provision for loan losses and decreased by loan charge-offs net of recoveries. Management estimates the allowance balance required by taking into consideration historical loan loss experience, the nature and volume of the portfolio, economic conditions, and other factors. Loan losses are charged against the allowance when the loss is confirmed, but no later than the point at which a loan becomes 120 days past due.

Loans that are 30 days or more past due are considered delinquent. The balance of EnerBank’s delinquent consumer loans was $13 million at June 30, 2018 and $14 million at December 31, 2017.

At June 30, 2018 and December 31, 2017, $1 million of EnerBank’s loans had been modified as troubled debt restructurings.