EX-12.(B) 16 k23633exv12wxby.htm STATEMENT REGARDING COMPUTATION OF CONSUMERS' RATIO OF EARNINGS TO FIXED CHARGES & PREFERRED DIVIDENDS & DISTRIBUTIONS

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Exhibit (12)(b)
CONSUMERS ENERGY COMPANY
Ratio of Earnings to Combined Fixed Charges and Preferred Dividends and Distributions
(Millions of Dollars)

|  | Years Ended December 31
|  | 2007 |  | 2006 |  | 2005 |  | 2004 |  | 2003
|  |  |  |  |  |  |  |  |  | (b) |  |  |  |  |  |  |  |
Earnings as defined (a) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pretax income from continuing operations |  | $ | 437 |  |  | $ | 167 |  |  | $ | (590 | ) |  | $ | 439 |  |  | $ | 333 |
Exclude equity basis subsidiaries (c) |  |  | — |  |  |  | (1 | ) |  |  | (1 | ) |  |  | (1 | ) |  |  | (42 | )
Include equity basis dividends received (c) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 45 |
Fixed charges as defined, adjusted to exclude capitalized interest of $6, $10, $38, $(25), and $9 for the years ended December 31, 2007, 2006, 2005, 2004, and 2003, respectively. (d) |  |  | 290 |  |  |  | 300 |  |  |  | 281 |  |  |  | 373 |  |  |  | 255 |
Earnings as defined |  | $ | 727 |  |  | $ | 466 |  |  | $ | (310 | ) |  | $ | 811 |  |  | $ | 591 |
Fixed charges as defined (a) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest on long-term debt |  | $ | 236 |  |  | $ | 286 |  |  | $ | 305 |  |  | $ | 328 |  |  | $ | 241 |
Estimated interest portion of lease rental |  |  | 23 |  |  |  | 8 |  |  |  | 6 |  |  |  | 4 |  |  |  | 7 |
Other interest charges |  |  | 34 |  |  |  | 13 |  |  |  | 5 |  |  |  | 13 |  |  |  | 13 |
Preferred dividends and distributions |  |  | 3 |  |  |  | 3 |  |  |  | 3 |  |  |  | 3 |  |  |  | 3 |
Fixed charges as defined |  | $ | 296 |  |  | $ | 310 |  |  | $ | 319 |  |  | $ | 348 |  |  | $ | 264 |
Ratio of earnings to combined fixed charges and preferred dividends and distributions |  |  | 2.46 |  |  |  | 1.50 |  |  |  | — |  |  |  | 2.33 |  |  |  | 2.24 |

NOTES:
(a) Earnings and fixed charges as defined in instructions for Item 503 of Regulation S-K.
(b) For the year ended December 31, 2005, fixed charges exceeded earnings by $629 million. Earnings as defined include asset impairment charges of $1.184 billion.
(c) In 2004, we consolidated the MCV Partnership and the FMLP in accordance with Revised FASB Interpretation No. 46.
(d) For 2004, fixed charges, adjusted as defined, include $25 million of interest cost that was capitalized prior to 2004 and subsequently expensed in 2004.