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Notes Receivable
 12 Months Ended
Dec. 31, 2015
Notes Receivable [Abstract]  
Notes Receivable

8:Notes  Receivable

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In Millions  

December 31

 2015  2014 

 

CMS Energy, including Consumers

 

 

 

 

 

 

 

Current

 

 

 

 

 

 

 

EnerBank notes receivable, net of allowance for loan losses

 

$

 128 

 

$

 97 

 

EnerBank notes receivable held for sale

 

 

 16 

 

 

 41 

 

Other

 

 

 -

 

 

 1 

 

Non-current

 

 

 

 

 

 

 

EnerBank notes receivable

 

 

 1,017 

 

 

 800 

 

Total notes receivable

 

$

 1,161 

 

$

 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. In May 2015, EnerBank completed a sale of notes receivable, receiving proceeds of $48 million and recording an insignificant gain. At December 31, 2015, $16 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 2016.

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.

Presented in the following table are the changes in the allowance for loan losses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In Millions  

Years Ended December 31

 2015  2014 

 

Balance at beginning of period

 

$

 8 

 

$

 5 

 

Charge-offs

 

 

 (8)

 

 

 (6)

 

Recoveries

 

 

 1 

 

 

 1 

 

Provision for loan losses

 

 

 8 

 

 

 8 

 

Balance at end of period

 

$

 9 

 

$

 8 

 

 

Loans that are 30 days or more past due are considered delinquent. The balance of EnerBank’s delinquent consumer loans was $8 million at December 31, 2015 and $5 million at December 31, 2014.

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