1
EXHIBIT (12)
CONSUMERS POWER COMPANY
Ratio of Earnings to Fixed Charges and Preferred Dividends
(Millions of Dollars)
Twelve Months
Ended Years Ended December 31
June 30, 1995 1994 1993 1992 1991 1990
--------------- ---- ---- ---- ---- ----
(b) (c)(d) (e)
Earnings as defined (a)
Net Income (Loss) after
dividends on preferred stock $ 207 $ 202 $ 187 $(255) $(245) $(393)
Income taxes (benefits) 115 107 91 (127) (75) 190
Exclude equity basis subsidiaries (32) (16) (6) 12 2 -
Fixed charges as defined, adjusted to
exclude capitalized interest of $1,
$1, $1, $1, $1, and $36 million and
preferred stock dividend tax effect
of $15, $13, $6, $6, $5, and $6 for
the twelve months ended June 30, 1995
and for the years ended December 31,
1994, 1993, 1992, 1991 and 1990,
respectively 197 186 195 189 338 290
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Earnings as defined $ 487 $ 479 $ 467 $(181) $ 20 $ 87
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Fixed charges as defined (a)
Interest on long-term debt $ 139 $ 136 $ 152 $ 150 $ 249 $ 268
Estimated interest portion of lease rental 10 10 11 14 16 16
Other interest charges 21 17 22 15 64 31
Preferred stock dividend requirement 43 37 17 17 15 17
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Fixed charges as defined $ 213 $ 200 $ 202 $ 196 $ 344 $ 332
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Ratio of earnings to fixed charges
and preferred dividends 2.29 2.40 2.31 - - -
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NOTES:
(a) Earnings and fixed charges and preferred dividends as defined in
instructions for Item 503 of Regulation S-K.
(b) For the year ended December 31, 1992, fixed charges and preferred
dividends exceeded earnings by $377 million. Earnings as defined include
a $520 million pre-tax loss on the settlement of cost recovery issues
relating to power purchases from the MCV Partnership partially offset
by $(15) million for potential customer refunds and other reserves
related to 1992 but recorded in 1991. The ratio of earnings to fixed
charges and preferred dividends would have been 1.65 excluding these
amounts.
(c) Excludes an extraordinary after-tax loss of $14 million.
(d) For the year ended December 31, 1991, fixed charges and preferred
dividends exceeded earnings by $324 million. Earnings as defined include
$398 million of pre-tax write-downs and reserve amounts related to the
abandoned Midland project and $44 million for potential customer refunds
and other reserves recorded in 1991 but related to 1992 and 1990. The
ratio of earnings to fixed charges and preferred dividends would have
been 1.34 excluding these amounts.
(e) For the year ended December 31, 1990, fixed charges and preferred
dividends exceeded earnings by $245 million. Earnings as defined include
$716 million of pre-tax write-downs and reserve amounts related to the
abandoned Midland project and $(29) million for potential customer
refunds and other reserves related to 1990 but recorded in 1991. The
ratio of earnings to fixed charges and preferred dividends would have
been 2.33 excluding these amounts.
2
EXHIBIT (12)
CONSUMERS POWER COMPANY
Ratio of Earnings to Fixed Charges
(Millions of Dollars)
Twelve Months
Ended Years Ended December 31
June 30, 1995 1994 1993 1992 1991 1990
------------- ---- ---- ---- ---- ----
(b) (c)(d) (e)
Earnings as defined (a)
Net Income (Loss) $ 235 $ 226 $ 198 $(244) $(235) $(382)
Income taxes (benefits) 115 107 91 (127) (75) 190
Exclude equity basis subsidiaries (32) (16) (6) 12 2 -
Fixed charges as defined, adjusted to
exclude capitalized interest of $1,
$1, $1, $1, $1, and $36 million for
the twelve months ended June 30, 1995
and for the years ended December 31,
1994, 1993, 1992, 1991 and 1990,
respectively 169 162 184 178 328 279
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Earnings as defined $ 487 $ 479 $ 467 $(181) $ 20 $ 87
===================================================================
Fixed charges as defined (a)
Interest on long-term debt $ 139 $ 136 $ 152 $ 150 $ 249 $ 268
Estimated interest portion of lease rental 10 10 11 14 16 16
Other interest charges 21 17 22 15 64 31
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Fixed charges as defined $ 170 $ 163 $ 185 $ 179 $ 329 $ 315
===================================================================
Ratio of earnings to fixed charges 2.86 2.94 2.52 - - -
===================================================================
NOTES:
(a) Earnings and fixed charges as defined instructions for Item 503 of
Regulation S-K.
(b) For the year ended December 31, 1992, fixed charges exceeded earnings by
$360 million. Earnings as defined include a $520 million pre-tax loss on
the settlement of cost recovery issues relating to power purchases from
the MCV Partnership partially offset by $(15) million for potential
customer refunds and other reserves related to 1992 but recorded in
1991. The ratio of earnings to fixed charges would have been 1.81
excluding these amounts.
(c) Excludes an extraordinary after-tax loss of $14 million.
(d) For the year ended December 31, 1991, fixed charges exceeded earnings by
$309 million. Earnings as defined include $398 million of pre-tax
write-downs and reserve amounts related to the abandoned Midland project
and $44 million for potential customer refunds and other reserves
recorded in 1991 but related to 1992 and 1990. The ratio of earnings to
fixed charges would have been 1.40 excluding these amounts.
(e) For the year ended December 31, 1990, fixed charges exceeded earnings by
$228 million. Earnings as defined include $716 million of pre-tax
write-downs and reserve amounts related to the abandoned Midland project
and $(29) million for potential customer refunds and other reserves
related to 1990 but recorded in 1991. The ratio of earnings to fixed
charges would have 2.46 excluding these amounts.