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Notes Receivable | 3 Months Ended
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Mar. 31, 2019
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 |
| March 31, 2019 |  | December 31, 2018 |
CMS Energy, including Consumers |  |  |  |
Current |  |  |  |
EnerBank notes receivable, net of allowance for loan losses |  | $ | 250 |  |  | $ | 233 |
Non‑current |  |  |  |
EnerBank notes receivable |  | 1,768 |  |  | 1,624 |
Total notes receivable |  | $ | 2,018 |  |  | $ | 1,857 |
Consumers |  |  |  |
Current |  |  |  |
DB SERP note receivable – related party |  | $ | 7 |  |  | $ | 7 |
Non‑current |  |  |  |
DB SERP note receivable – related party |  | 98 |  |  | 99 |
Total notes receivable |  | $ | 105 |  |  | $ | 106 |
EnerBank Notes Receivable EnerBank notes receivable are primarily unsecured consumer installment loans for financing home improvements. EnerBank records its notes receivable at cost, less an allowance for loan losses. During the three months ended March 31, 2019, EnerBank purchased a portfolio of secured and unsecured consumer installment loans with a principal value of $131 million at March 31, 2019. 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 $111 million at March 31, 2019 and $102 million at December 31, 2018. 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 $20 million at March 31, 2019 and $21 million at December 31, 2018. At March 31, 2019 and December 31, 2018, $1 million of EnerBank’s loans had been modified as troubled debt restructurings. EnerBank has entered into an interest rate swap on $36 million of its loans (notes receivable). The terms of the swap effectively convert the fixed rate interest received on these loans to a variable rate. EnerBank is applying fair value hedge accounting to the swap, and accordingly is adjusting the the carrying value of the loans for the change in the fair value of the loans due to the hedged interest rate risk. The adjustment to the loans at March 31, 2019 was immaterial. DB SERP Note Receivable – Related Party The DB SERP note receivable – related party is Consumers’ portion of a demand note payable issued by CMS Energy to the DB SERP rabbi trust. The demand note bears interest at an annual rate of 4.10 percent and has a maturity date of 2028.
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 |
| March 31, 2019 |  | December 31, 2018 |
CMS Energy, including Consumers |  |  |  |
Current |  |  |  |
EnerBank notes receivable, net of allowance for loan losses |  | $ | 250 |  |  | $ | 233 |
Non‑current |  |  |  |
EnerBank notes receivable |  | 1,768 |  |  | 1,624 |
Total notes receivable |  | $ | 2,018 |  |  | $ | 1,857 |
Consumers |  |  |  |
Current |  |  |  |
DB SERP note receivable – related party |  | $ | 7 |  |  | $ | 7 |
Non‑current |  |  |  |
DB SERP note receivable – related party |  | 98 |  |  | 99 |
Total notes receivable |  | $ | 105 |  |  | $ | 106 |
EnerBank Notes Receivable EnerBank notes receivable are primarily unsecured consumer installment loans for financing home improvements. EnerBank records its notes receivable at cost, less an allowance for loan losses. During the three months ended March 31, 2019, EnerBank purchased a portfolio of secured and unsecured consumer installment loans with a principal value of $131 million at March 31, 2019. 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 $111 million at March 31, 2019 and $102 million at December 31, 2018. 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 $20 million at March 31, 2019 and $21 million at December 31, 2018. At March 31, 2019 and December 31, 2018, $1 million of EnerBank’s loans had been modified as troubled debt restructurings. EnerBank has entered into an interest rate swap on $36 million of its loans (notes receivable). The terms of the swap effectively convert the fixed rate interest received on these loans to a variable rate. EnerBank is applying fair value hedge accounting to the swap, and accordingly is adjusting the the carrying value of the loans for the change in the fair value of the loans due to the hedged interest rate risk. The adjustment to the loans at March 31, 2019 was immaterial. DB SERP Note Receivable – Related Party The DB SERP note receivable – related party is Consumers’ portion of a demand note payable issued by CMS Energy to the DB SERP rabbi trust. The demand note bears interest at an annual rate of 4.10 percent and has a maturity date of 2028.

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- Definition The entire disclosure for financing receivables. Examples of financing receivables include, but are not limited to, loans, trade accounts receivables, notes receivable, credit cards, and receivables relating to a lessor's right(s) to payment(s) from a lease other than an operating lease that is recognized as assets. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -URI http://asc.fasb.org/topic&trid=2196771 + Details
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