Notes Receivable

6 Months Ended

Jun. 30, 2012

Notes Receivable

9:     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, 2012		December 31, 2011
CMS Energy, including Consumers
Current
EnerBank notes receivable, net of allowance for loan losses		$      26		$      19
Other		14		30
Non-current
EnerBank notes receivable, net of allowance for loan losses		460		461
Other		1		1
Total notes receivable		$    501		$    511
Consumers
Current
Other		$      13		$      23
Non-current
Other		1		1
Total notes receivable		$      14		$      24

EnerBank notes receivable are unsecured consumer installment loans for financing home improvements.

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
	Three Months Ended				Six Months Ended
June 30	2012		2011		2012		2011
Balance at beginning of period		$    5		$    5		$    5		$    5
Charge-offs		(1)		(1)		(2)		(2)
Recoveries		-		-		-		-
Provision for loan losses		1		1		2		2
Balance at end of period		$    5		$    5		$    5		$    5

Loans that are 30 days or more past due are considered delinquent. Presented in the following table is the delinquency status of EnerBank's consumer loans:

In Millions
	Past Due 30-59 Days		Past Due 60-89 Days		Past Due Over 90 Days		Total Delinquent		Current		Total Outstanding
June 30, 2012		$      1		$      1		$      -		$      2		$    484		$    486
December 31, 2011		1		-		1		2		478		480

At June 30, 2012 and December 31, 2011, $1 million of EnerBank's loans had been modified as troubled debt restructurings.

Consumers Energy Company [Member]

Notes Receivable

9:     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, 2012		December 31, 2011
CMS Energy, including Consumers
Current
EnerBank notes receivable, net of allowance for loan losses		$      26		$      19
Other		14		30
Non-current
EnerBank notes receivable, net of allowance for loan losses		460		461
Other		1		1
Total notes receivable		$    501		$    511
Consumers
Current
Other		$      13		$      23
Non-current
Other		1		1
Total notes receivable		$      14		$      24

EnerBank notes receivable are unsecured consumer installment loans for financing home improvements.

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
	Three Months Ended				Six Months Ended
June 30	2012		2011		2012		2011
Balance at beginning of period		$    5		$    5		$    5		$    5
Charge-offs		(1)		(1)		(2)		(2)
Recoveries		-		-		-		-
Provision for loan losses		1		1		2		2
Balance at end of period		$    5		$    5		$    5		$    5

Loans that are 30 days or more past due are considered delinquent. Presented in the following table is the delinquency status of EnerBank's consumer loans:

In Millions
	Past Due 30-59 Days		Past Due 60-89 Days		Past Due Over 90 Days		Total Delinquent		Current		Total Outstanding
June 30, 2012		$      1		$      1		$      -		$      2		$    484		$    486
December 31, 2011		1		-		1		2		478		480

At June 30, 2012 and December 31, 2011, $1 million of EnerBank's loans had been modified as troubled debt restructurings.