EXHIBIT (12) (b)
Exhibit (12) (b)
CONSUMERS ENERGY COMPANY
Ratio of Earnings to Fixed Charges and Preferred Securities Dividends
and Distributions
(Millions of Dollars)
Years Ended December 31 -
2003 2002 2001 2000 1999
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(c) (b)
Earnings as defined (a)
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Consolidated net income $ 196 $ 363 $ 199 $ 284 $ 340
Income taxes 137 180 97 137 172
Exclude equity basis subsidiaries (42) (53) (38) (57) (50)
Include equity basis dividends received 45 15 8 10 10
Fixed charges as defined, adjusted to 252 178 197 194 192
exclude capitalized interest of $9,
$12, $6, $2, and $- million for
years ended December 31, 2003, 2002,
2001, 2000, and 1999, respectively
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Earnings as defined $ 588 $ 683 $ 463 $ 568 $ 664
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Fixed charges as defined (a)
- ----------------------------
Interest on long-term debt (d) $ 241 $ 153 $ 151 $ 141 $ 140
Estimated interest portion of lease rental 7 10 11 11 11
Other interest charges 13 27 41 44 41
Preferred securities dividends and 3 47 44 37 30
distributions (d)
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Fixed charges as defined $ 264 $ 237 $ 247 $ 233 $ 222
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Ratio of earnings to fixed charges and
preferred securities dividends and
distributions 2.23 2.88 1.87 2.44 2.99
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NOTES:
(a) Earnings and fixed charges as defined in instructions for Item 503 of
Regulation S-K.
(b) Excludes a cumulative effect of change-in-accounting after-tax loss of $11
million; if included, ratio would be 1.81.
(c) Excludes a cumulative effect of change-in-accounting after-tax gain of $18
million; if included, ratio would be unchanged, since the change-in-accounting
resulted from the equity based subsidiary MCV Partnership. The total net incomes
of equity based subsidiaries are excluded from determining earnings as defined.
(d) We determined that we do not hold the controlling interest in our trust
preferred security structures. Accordingly, those securities have been
deconsolidated as of December 31, 2003. Therefore, our trust preferred
securities that were previously included in mezzanine equity, have been
eliminated due to deconsolidation and are reflected in Long-term debt -- related
parties.