Notes Receivable

3 Months Ended

Mar. 31, 2015

Notes Receivable [Abstract]

Notes Receivable

7:NOTES RECEIVABLE

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

In Millions
	March 31, 2015			December 31, 2014
CMS Energy
Current
EnerBank notes receivable, net of allowance for loan losses		$	102		$	97
EnerBank notes receivable held for sale			49			41
Other			1			1
Non-current
EnerBank notes receivable, net of allowance for loan losses			816			800
Total notes receivable		$	968		$	939

EnerBank notes receivable are unsecured consumer installment loans for financing home improvements.  EnerBank records its notes receivable at cost, less allowance for loan losses.  At March 31, 2015, $49 million of notes receivable were classified as held for sale; the fair value of notes receivable held for sale exceeded their carrying value.  These notes are expected to be sold in 2015.

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 $5 million at March 31, 2015 and December31,2014.

At March 31, 2015 and December31,2014, $1 million of EnerBank’s loans had been modified as troubled debt restructurings.