Form U-3A-2
File No. 69-232
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT BY HOLDING COMPANY CLAIMING EXEMPTION
UNDER RULE U-3A-2 FROM THE PROVISIONS OF THE
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
SOUTHEASTERN MICHIGAN GAS ENTERPRISES, INC. hereby files with the
Securities and Exchange Commission, pursuant to Rule 2, its statement claiming
exemption as a holding company from the provisions of the Public Utility
Holding Company Act of 1935 and submits the following information:
1. Claimant - Southeastern Michigan Gas Enterprises, Inc.
405 Water Street
Port Huron, Michigan 48060
State of organization - Michigan
Nature of business - Holding Company
All subsidiaries (both first and second tier) are
incorporated in Michigan.
Subsidiaries - Southeastern Michigan Gas Company
2915 Lapeer Road
Port Huron, Michigan 48060
Nature of business - Purchase, distribution, sale, and
transport of natural gas to residential, commercial and
industrial customers in two service areas, one located
in and about Port Huron in southeastern Michigan and
the other located in and about Albion in south-central
Michigan. The Company's general offices are located in
Port Huron.
Michigan Gas Company
16587 Enterprise Drive
Three Rivers, Michigan 49093
Nature of business - Purchase, distribution, sale, and
transport of natural gas to residential, commercial and
industrial customers in the service area in the
southwest portion of lower Michigan and the central and
western area of the Upper Peninsula of Michigan. Also
sells propane through a subsidiary.
-1-
<PAGE>
Battle Creek Gas Company
55 Hamblin Avenue
Battle Creek, Michigan 49017
Nature of business - Purchase, distribution, sale, and
transport of natural gas to residential, commercial and
industrial customers in the service area in and about
Battle Creek, Michigan.
SEMCO Energy Services, Inc.
405 Water Street
Port Huron, Michigan 48060
State of organization - Michigan
Nature of business - A diversified company with
operations and investments in many segments of the
natural gas industry. SEMCO's principal operating
activity is natural gas marketing. SEMCO markets gas
to approximately 150 customers located in several
states. Its customers include industrial, commercial
and municipal natural gas users, natural gas
distribution companies and other marketers.
At 12/31/95 SEMCO had the following wholly-owned
subdidiaries:
SEMCO Pipeline Company
SEMCO Gas Storage Company
SEMCO Arkansas Pipeline Company
SEMCO Gathering Company
Southeastern Financial Services, Inc. (SFS)
Southeastern Development Company (SEDCO)
SEMCO Pipeline Company principally holds investments in
various transmission pipelines located in Michigan.
SEMCO Gas Storage Company holds an equity interest in a
natural gas storage system located in Michigan.
SEMCO Arkansas Pipeline Company holds a general
partnershp interest in a partnership which operates a
pipeline crossing northern Arkansas.
SEMCO Gathering Company has no assets at this time.
Southeastern Financial Services, Inc. leases vehicles
and data processing equipment primarily to affiliates.
Southeastern Development Company holds real property
and related improvements held for resale and office
properties leased to affiliates and third parties.
-2-
<PAGE>
2. Properties of Claimant and Subsidiary Public Utility Companies.
(a) Claimant (Southeastern Michigan Gas Enterprises, Inc.) -
The total properties of the Claimant consist of the Common Stock
of Southeastern Michigan Gas Company, Michigan Gas Company, Battle
Creek Gas Company, SEMCO Energy Services, Inc., leasehold improvements
and office equipment.
(b) Subsidiaries
Southeastern Michigan Gas Company
Southeastern Michigan Gas Company owns gas supply systems which
include approximately 100 miles of transmission pipelines and 1,900
miles of distribution pipelines. The pipelines are located in
southeastern Michigan (centered in and around the City of Port Huron)
and south-central Michigan (centered in and around the City of
Albion).
Southeastern's underground storage system consists of six salt
caverns and a depleted oil field, located in St. Clair County,
Michigan, together with dehydration, measuring, compressor and
transmission facilities. The aggregate working capacity of the system
is approximately 5.2 billion cubic feet (Bcf), with a capacity to
deliver 86 million cubic feet (MMcf) on a peak day. Underground
storage services are provided to others on a short-term basis,
depending on available capacity.
Southeastern Michigan Gas Company also owns meters and service
lines, gas regulating and metering stations, garages, warehouses and
other buildings necessary and useful in the conduct of its business.
The Company leases computer and transportation equipment.
Southeastern Michigan Gas Company's distribution system and
service lines are, for the most part, located on or under public
streets, alleys, highways, and other public places, or on private
property not owned by Southeastern Michigan Gas Company with
permission or consent, except to an inconsequential extent, of the
individual owners. Southeastern Michigan Gas Company's mains and
distribution system located on or under public streets, alleys,
highways, and other public places were all installed under valid
rights and consents granted by appropriate local authorities.
Michigan Gas Company
Michigan Gas Company owns gas supply systems located in the
southwest portion of Michigan's lower peninsula and the central and
western areas of Michigan's upper peninsula. The systems include
approximately 2,100 miles of distribution pipeline, meters, service
lines, gas regulating and metering stations, garages, warehouses, and
other buildings necessary and useful in the conduct of its business.
The Company leases computer equipment, transportation equipment, and
certain buildings.
-3-
<PAGE>
Michigan Gas Company's distribution system and service lines are
for the most part, located on or under public streets, alleys,
highways, and other public places, or on private property not owned
by Michigan Gas with permission or consent, except to an
inconsequential extent, of individual owners. Michigan Gas Company's
mains and distribution system located on or under public streets,
alleys, highways, and other public places were all installed under
valid rights and consents granted by appropriate local authorities.
Battle Creek Gas Company
Battle Creek Gas Company owns gas supply systems which, include
approximately 30 miles of transmission pipelines and 700 miles of
distribution pipelines. The pipelines are located in southwestern
Michigan (centered in and around the City of Battle Creek, Michigan).
Battle Creek Gas Company owns and operates underground gas
storage facilities in two depleted salt wells and a depleted gas
field. The aggregate working capacity of the storage system is
approximately 1.7 Bcf.
Battle Creek Gas Company also owns meters and service lines, gas
regulating and metering stations, garages, warehouses and other
buildings necessary and useful in the conduct of its business. The
Company leases computer and transportation equipment.
Battle Creek Gas Company's distribution system and service lines
are, for the most part, located on or under public streets, alleys,
highways, and other public places, or on private property not owned
by Battle Creek Gas Company with permission or consent, except to an
inconsequential extent, of the individual owners. Battle Creek Gas
Company's mains and distribution system located on or under public
streets, alleys, highways, and other public places were all installed
under valid rights and consents granted by appropriate local
authorities.
All of these Subsidiaries' properties are located in the State of
Michigan.
-4-
<PAGE>
3. The following information is submitted for the calendar year 1995 with
respect to the Claimant and its subsidiary public utility companies:
<TABLE>
<CAPTION>
Claimant Subsidiaries
(Southeastern Southeastern
Michigan Gas Michigan Battle Creek Michigan
Enterprises Inc.) Gas Company Gas Company Gas Company
<S> <C> <C> <C> <C>
(a) Mcf of Natural or manufactured
gas distributed at retail None 16,600,000 Mcf 6,000,000 Mcf 18,200,000 Mcf
(b) Mcf of natural or manufactured
gas distributed at retail outside
of the State in which each
company is organized None None None None
(c) Mcf of natural or manufactured
gas sold at wholesale outside
the State in which each company
is organized or at the State line None None None None
(d) Mcf of natural or manufactured
gas purchased outside the State
in which each company is
organized or at the State line None 15,900,000 Mcf 5,000,000 Mcf 16,800,000 Mcf
</TABLE>
4. Not Applicable.
EXHIBIT A - FINANCIAL STATEMENTS
A consolidating statement of income and surplus of the Claimant and
its subsidiary companies for the last calendar year, together with a
consolidating balance sheet of Claimant and its subsidiary companies as of
the close of such calendar year accompanies this filing.
EXHIBIT B - FINANCIAL DATA SCHEDULE
Financial Data Schedule showing consolidated Total Assets, Total
Operating Revenues and Net Income.
-5-
<PAGE>
EXHIBIT C
Not applicable.
The above-named Claimant has caused this statement to be duly executed
on its behalf by its authorized officer on this 27th day of February, 1996.
SOUTHEASTERN MICHIGAN GAS ENTERPRISES, INC.
(Name of Claimant)
By Marcia M. Chmielewski, Vice President,
Treasurer and C.F.O.
Corporate Seal
Attest:
Sherry L. Abbott, Secretary
Name, title, and address of officer to whom notices and correspondence
concerning this statement should be addressed:
Marcia M. Chmielewski Vice President, Treasurer and C.F.O.
(Name) (Title)
405 Water Street, Port Huron, Michigan 48060
(Address)
-6-
<PAGE>
Exhibit A
<TABLE>
SOUTHEASTERN MICHIGAN GAS ENTERPRISES, INC.
CONSOLIDATED AND CONSOLIDATING INCOME STATEMENT
DECEMBER 1995
(Unaudited Statement)
<CAPTION>
TWELVE MONTHS TO DATE LOCAL DISTRIBUTION COMPANIES
--------------------- ------------------------------------- SEMCO
1995 ELIM. PARENT SEMGC BCGC MIGC ENERGY
------------ ------------ ----------- ----------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
OPERATING REVENUE
Gas sales revenue
Residential $115,242,587 $ 0 $ 0 $46,149,049 $19,804,843 $49,288,695 $ 0
Commercial 54,762,929 0 0 19,614,360 7,396,296 27,752,273 0
Industrial 14,019,103 0 0 2,558,078 1,792,408 9,668,617 0
------------ ------------ ----------- ----------- ----------- ----------- ------------
Total gas sales revenue $184,024,619 $ 0 $ 0 $68,321,487 $28,993,547 $86,709,585 $ 0
------------ ------------ ----------- ----------- ----------- ----------- ------------
Gas marketing $133,395,721 $(29,512,999) $ 0 $ 0 $ 0 $ 0 $162,908,720
Transportation 12,448,512 0 0 3,055,220 4,243,133 5,150,159 0
Other operations 5,669,830 (1,985,224) 0 469,021 133,448 563,541 6,489,044
------------ ------------ ----------- ----------- ----------- ----------- ------------
TOTAL OPERATING REVENUE $335,538,682 $(31,498,223) $ 0 $71,845,728 $33,370,128 $92,423,285 $169,397,764
------------ ------------ ----------- ----------- ----------- ----------- ------------
OPERATING EXPENSES
Cost of gas sold $120,619,122 $ 0 $ 0 $40,180,739 $17,670,449 $62,767,934 $ 0
Cost of gas marketed 130,087,016 (29,512,999) 0 0 0 0 159,600,015
Operations 31,879,779 (1,985,224) 75,388 12,036,732 5,989,496 12,378,865 3,384,522
Maintenance 4,337,239 0 179 2,145,334 871,057 1,290,894 29,775
Depreciation 12,034,978 0 120,431 4,111,444 1,959,212 3,615,593 2,228,298
Income taxes 6,187,936 3,101,167 (3,246,452) 2,275,977 998,691 2,092,523 966,030
Taxes other than income 7,965,964 0 (5,077) 3,274,626 1,450,953 2,809,389 436,073
------------ ------------ ----------- ----------- ----------- ----------- ------------
TOTAL OPERATING EXPENSES $313,112,034 $(28,397,056) $(3,055,531) $64,024,852 $28,939,858 $84,955,198 $166,644,713
------------ ------------ ----------- ----------- ----------- ----------- ------------
OPERATING INCOME $ 22,426,648 $ (3,101,167) $ 3,055,531 $ 7,820,876 $ 4,430,270 $ 7,468,087 $ 2,753,051
------------ ------------ ----------- ----------- ----------- ----------- ------------
OTHER INCOME
Non-operating income $ 3,964,835 $ (8,860,477) $ 8,753,478 $ 2,242,505 $ 889,782 $ 1,117,726 $ (178,179)
Non-operating expenses 4,181,257 0 0 1,870,637 930,708 1,379,912 0
Other income taxes (36,950) (3,101,167) 3,062,424 132,960 (15,805) 13,157 (128,519)
------------ ------------ ----------- ----------- ----------- ----------- ------------
OTHER INCOME, NET $ (179,472) $ (5,759,310) $ 5,691,054 $ 238,908 $ (25,121) $ (275,343) $ (49,660)
------------ ------------ ----------- ----------- ----------- ----------- ------------
INCOME BEFORE DEDUCTIONS $ 22,247,176 $ (8,860,477) $ 8,746,585 $ 8,059,784 $ 4,405,149 $ 7,192,744 $ 2,703,391
------------ ------------ ----------- ----------- ----------- ----------- ------------
INCOME DEDUCTIONS
Interest on long term debt $ 8,547,384 $ (4,374,000) $ 7,253,634 $ 1,863,000 $ 1,293,750 $ 2,511,000 $ 0
Other interest 1,725,651 (4,486,477) 1,910,907 624,242 1,101,339 328,919 2,246,721
Amortization of debt expense 448,104 0 50,003 193,078 30,864 174,159 0
Dividends on pref. of sub. 178,003 0 0 178,003 0 0 0
------------ ------------ ----------- ----------- ----------- ----------- ------------
TOTAL INCOME DEDUCTIONS $ 10,899,142 $ (8,860,477) $ 9,214,544 $ 2,858,323 $ 2,425,953 $ 3,014,078 $ 2,246,721
------------ ------------ ----------- ----------- ----------- ----------- ------------
NET INCOME $ 11,348,034 $ 0 $ (467,959) $ 5,201,461 $ 1,979,196 $ 4,178,666 $ 456,670
------------ ------------ ----------- ----------- ----------- ----------- ------------
Equity earnings of subs. $ 0 $(11,816,001) $11,816,001 $ 0 $ 0 $ 0 $ 0
Dividends on conv. preferred 16,627 0 16,627 0 0 0 0
------------ ------------ ----------- ----------- ----------- ----------- ------------
NET INCOME AVAILABLE FOR COMMON $ 11,331,407 $(11,816,001) $11,331,415 $ 5,201,461 $ 1,979,196 $ 4,178,666 $ 456,670
============ ============ =========== =========== =========== =========== ============
EARNINGS PER AVERAGE SHARE $ .96
============
</TABLE>
<PAGE>
<TABLE>
SOUTHEASTERN MICHIGAN GAS ENTERPRISES, INC.
CONSOLIDATED INCOME STATEMENT
DECEMBER 31, 1995
(Unaudited Statement)
<CAPTION>
BATTLE CREEK GAS CO MICHIGAN GAS CO
------------------------------------- -------------------------------------
PUSH PURCHASE SEPARATE PUSH PURCHASE SEPARATE
TWELVE MONTHS TO DATE DOWN ADJUSTMENTS COMPANY DOWN ADJUSTMENTS COMPANY
- --------------------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Gas sales revenue
Residential $19,804,843 $ 0 $19,804,843 $49,288,695 $ 0 $49,288,695
Commercial 7,396,296 0 7,396,296 27,752,273 0 27,752,273
Industrial 1,792,408 0 1,792,408 9,668,617 0 9,668,617
----------- ----------- ----------- ----------- ----------- -----------
Total gas sales revenue $28,993,547 $ 0 $28,993,547 $86,709,585 $ 0 $86,709,585
----------- ----------- ----------- ----------- ----------- -----------
Gas marketing $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
Transportation 4,243,133 0 4,243,133 5,150,159 0 5,150,159
Other operations 133,448 0 133,448 563,541 0 563,541
----------- ----------- ----------- ----------- ----------- -----------
TOTAL OPERATING REVENUE $33,370,128 $ 0 $33,370,128 $92,423,285 $ 0 $92,423,285
----------- ----------- ----------- ----------- ----------- -----------
OPERATING EXPENSES
Cost of gas sold $17,670,449 $ 0 $17,670,449 $62,767,934 $ 0 $62,767,934
Cost of gas marketed 0 0 0 0 0 0
Operations 5,989,496 3,855 5,985,641 12,378,865 0 12,378,865
Maintenance 871,057 0 871,057 1,290,894 0 1,290,894
Depreciation 1,959,212 109,849 1,849,363 3,615,593 0 3,615,593
Income taxes 998,691 (362,593) 1,361,284 2,092,523 0 2,092,523
Taxes other than income 1,450,953 0 1,450,953 2,809,389 0 2,809,389
----------- ----------- ----------- ----------- ----------- -----------
TOTAL OPERATING EXPENSES $28,939,858 $ (248,889) $29,188,747 $84,955,198 $ 0 $84,955,198
----------- ----------- ----------- ----------- ----------- -----------
OPERATING INCOME $ 4,430,270 $ 248,889 $ 4,181,381 $ 7,468,087 $ 0 $ 7,468,087
----------- ----------- ----------- ----------- ----------- -----------
OTHER INCOME
Non-operating income $ 889,782 $ 0 $ 889,782 $ 1,117,726 $ 0 $ 1,117,726
Non-operating expenses 930,708 0 930,708 1,379,912 0 1,379,912
Other income taxes (15,805) 0 (15,805) 13,157 0 13,157
----------- ----------- ----------- ----------- ----------- -----------
OTHER INCOME, NET $ (25,121) $ 0 $ (25,121) $ (275,343) $ 0 $ (275,343)
----------- ----------- ----------- ----------- ----------- -----------
INCOME BEFORE DEDUCTIONS $ 4,405,149 $ 248,889 $ 4,156,260 $ 7,192,744 $ 0 $ 7,192,744
----------- ----------- ----------- ----------- ----------- -----------
INCOME DEDUCTIONS
Interest on long-term debt $ 1,293,750 $ 1,293,750 $ 0 $ 2,511,000 $ 0 $ 2,511,000
Other interest 1,101,339 0 1,101,339 328,919 0 328,919
Amortization of debt expense 30,864 30,864 0 174,159 0 174,159
Dividends on preferred
stock of subsidiary 0 0 0 0 0 0
----------- ----------- ----------- ----------- ----------- -----------
TOTAL INCOME DEDUCTIONS $ 2,425,953 $ 1,324,614 $ 1,101,339 $ 3,014,078 $ 0 $ 3,014,078
----------- ----------- ----------- ----------- ----------- -----------
NET INCOME FOR COMMON $ 1,979,196 $(1,075,725) $ 3,054,921 $ 4,178,666 $ 0 $ 4,178,666
=========== =========== =========== =========== =========== ===========
</TABLE>
<PAGE>
<TABLE>
SEMCO ENERGY SERVICES, INC.
CONSOLIDATED AND CONSOLIDATING INCOME STATEMENT
DECEMBER 1995
(Unaudited Statement)
TWELVE MONTHS TO DATE
- ---------------------
<CAPTION>
SEMCO Energy Services
------------------------ SEMCO SEMCO SEMCO
Energy SEMCO Gas Arkansas Consoli-
Marketing Parent Pipeline Storage Pipeline SFS SEDCO Elim. dating
------------ ---------- ---------- -------- ----------- ---------- -------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
GAS SALES REVENUE:
Gas sales $132,440,389 $ (35) $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $132,440,354
Gas sales to affil. 30,468,366 0 0 0 0 0 0 0 30,468,366
------------ ---------- ---------- -------- ----------- ---------- -------- ----------- ------------
Total gas sales rev. $162,908,755 $ (35) $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $162,908,720
------------ ---------- ---------- -------- ----------- ---------- -------- ----------- ------------
COST OF GAS SOLD:
Cost of gas sold $154,792,106 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $154,792,106
Transportation exp. 4,807,909 0 0 0 0 0 0 0 4,807,909
------------ ---------- ---------- -------- ----------- ---------- -------- ----------- ------------
Total cost of
gas sold $159,600,015 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $159,600,015
------------ ---------- ---------- -------- ----------- ---------- -------- ----------- ------------
GROSS MARGIN ON
GAS SALES $ 3,308,740 $ (35) $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 3,308,705
------------ ---------- ---------- -------- ----------- ---------- -------- ----------- ------------
OTHER OPERATING REV.:
Gas transmission $ 0 $ 0 $2,478,015 $ 0 $ 0 $ 0 $ 0 $ 0 $ 2,478,015
Gas gathering 0 0 661,972 0 0 0 0 0 661,972
Gas & oil production 0 200,106 0 0 0 0 6,549 0 206,655
Other 0 793 0 0 0 2,220,665 920,943 0 3,142,401
------------ ---------- ---------- -------- ----------- ---------- -------- ----------- ------------
Total other
operating revenue $ 0 $ 200,899 $3,139,987 $ 0 $ 0 $2,220,665 $927,492 $ 0 $ 6,489,043
------------ ---------- ---------- -------- ----------- ---------- -------- ----------- ------------
Total operating rev. $ 3,308,740 $ 200,864 $3,139,987 $ 0 $ 0 $2,220,665 $927,492 $ 0 $ 9,797,748
------------ ---------- ---------- -------- ----------- ---------- -------- ----------- ------------
OTHER OPERATING EXP.:
Operation expense $ 1,507,646 $ 247,070 $ 597,567 $ 34,736 $ 274,498 $ 145,712 $607,066 $ 0 $ 3,414,295
Depreciation & amor. 44,311 96,218 704,044 2,548 5,446 1,337,187 38,545 0 2,228,299
General taxes 63,867 17,004 316,374 2,478 (1,455) 23,067 14,738 0 436,073
------------ ---------- ---------- -------- ----------- ---------- -------- ----------- ------------
Total other
operating expense $ 1,615,824 $ 360,292 $1,617,985 $ 39,762 $ 278,489 $1,505,966 $660,349 $ 0 $ 6,078,667
------------ ---------- ---------- -------- ----------- ---------- -------- ----------- ------------
PRETAX OPERATING INC. $ 1,692,916 $ (159,428) $1,522,002 $(39,762) $ (278,489) $ 714,699 $267,143 $ 0 $ 3,719,081
------------ ---------- ---------- -------- ----------- ---------- -------- ----------- ------------
OTHER INCOME, NET:
Gross equity income $ 0 $ 0 $ (369,294) $848,903 $ (904,246) $ 0 $ 0 $ 0 $ (424,637)
Taxes on equity inc. 0 0 (144,654) 297,116 (316,486) 0 0 0 (164,024)
AFUDC and other inc. 62,891 2,113,726 886 0 0 0 312,331 (2,243,376) 246,458
Taxes on other inc. 0 0 0 0 0 0 (35,504) 0 (35,504)
------------ ---------- ---------- -------- ----------- ---------- -------- ----------- ------------
Total other
income, net $ 62,891 $2,113,726 $ (223,754) $551,787 $ (587,760) $ 0 $276,827 $(2,243,376) $ (49,659)
------------ ---------- ---------- -------- ----------- ---------- -------- ----------- ------------
EARNINGS BEFORE
INTEREST & TAXES $ 1,755,807 $1,954,298 $1,298,248 $512,025 $ (866,249) $ 714,699 $543,970 $(2,243,376) $ 3,669,422
Interest expense $ 707,656 $2,273,553 $ 610,562 $ 84,971 $ 724,720 $ 88,633 $ 0 $(2,243,376) $ 2,246,719
Income taxes 366,853 21,500 290,118 13,019 (303,444) 406,419 171,567 0 966,032
------------ ---------- ---------- -------- ----------- ---------- -------- ----------- ------------
NET INCOME (LOSS) $ 681,298 $ (340,755) $ 397,568 $414,035 $(1,287,525) $ 219,647 $372,403 $ 0 $ 456,671
============ ========== ========== ======== =========== ========== ======== =========== ============
</TABLE>
<PAGE>
<TABLE>
SOUTHEASTERN MICHIGAN GAS ENTERPRISES, INC.
CONSOLIDATED AND CONSOLIDATING BALANCE SHEET
DECEMBER 1995
(Unaudited Statement)
<CAPTION>
LOCAL DISTRIBUTION COMPANIES
--------------------------------------- SEMCO
ASSETS 1995 ELIM. PARENT SEMGC BCGC MIGC ENERGY
------ ------------ ------------- ------------ ------------ ----------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
UTILITY PLANT
Plant in service at cost $313,657,642 $ 0 $ 0 $142,645,999 $52,519,551 $102,182,616 $16,309,476
Construction in progress 943,947 0 0 917,869 0 26,078 0
------------ ------------- ------------ ------------ ----------- ------------ -----------
TOTAL UTILITY PLANT $314,601,589 $ 0 $ 0 $143,563,868 $52,519,551 $102,208,694 $16,309,476
Less-Accumulated depreciation 87,308,475 0 0 56,676,408 6,863,338 20,773,597 2,995,132
------------ ------------- ------------ ------------ ----------- ------------ -----------
NET UTILITY PLANT $227,293,114 $ 0 $ 0 $ 86,887,460 $45,656,213 $ 81,435,097 $13,314,344
------------ ------------- ------------ ------------ ----------- ------------ -----------
OTHER PROPERTY
Other property, gross $ 22,612,748 $ (96,189) $ 1,913,284 $ 706,208 $ 49,934 $ 223,002 $19,816,509
Less-Accumulated depreciation 5,511,461 (50,833) 680,857 133,633 0 34,251 4,713,553
------------ ------------- ------------ ------------ ----------- ------------ -----------
OTHER PROPERTY, NET $ 17,101,287 $ (45,356) $ 1,232,427 $ 572,575 $ 49,934 $ 188,751 $15,102,956
------------ ------------- ------------ ------------ ----------- ------------ -----------
CURRENT ASSET
Cash $ 264,331 $ 0 $ (7,286,258) $ 162,776 $ 125,128 $ 530,241 $ 6,732,444
Accounts receivable
Accounts rec. nonaffiliate 33,048,664 (314,287) 0 10,282,735 4,876,817 12,370,456 5,832,943
Accounts rec. affiliate 0 (4,757,953) 1,768,501 369,021 802,785 129,843 1,687,803
Less-Reserve for uncollectible 728,578 0 0 128,017 182,166 289,241 129,154
------------ ------------- ------------ ------------ ----------- ------------ -----------
Accounts rec. - net 32,320,086 (5,072,240) 1,768,501 10,523,739 5,497,436 12,211,058 7,391,592
Notes receivable affiliate 0 (139,559,000) 139,559,000 0 0 0 0
Accrued utility revenue 38,853,273 0 0 6,532,649 2,829,063 7,669,871 21,821,690
Materials and supplies 3,280,329 0 0 1,858,217 509,069 913,043 0
Gas in storage 20,172,407 0 0 4,260,631 5,690,836 7,968,133 2,252,807
Prepaid property taxes 1,601,004 0 33,520 1,482,295 0 0 85,189
Prepayments 4,225,981 0 719,681 196,461 79,716 326,967 2,903,156
Other current assets 5,853,576 0 0 0 1,885,073 3,968,503 0
------------ ------------- ------------ ------------ ----------- ------------ -----------
TOTAL CURRENT ASSETS $106,570,987 $(144,631,240) $134,794,444 $ 25,016,768 $16,616,321 $ 33,587,816 $41,186,878
------------ ------------- ------------ ------------ ----------- ------------ -----------
INVESTMENT IN SUBSIDIARIES
Southeastern Michigan Gas Co $ 0 $ (40,738,417) $ 40,738,417 $ 0 $ 0 $ 0 $ 0
Battle Creek Gas Company 0 (16,887,609) 16,887,609 0 0 0 0
Michigan Gas Company 0 (43,356,559) 43,356,559 0 0 0 0
SEMCO Energy Services 0 (12,287,852) 12,287,852 0 0 0 0
------------ ------------- ------------ ------------ ----------- ------------ -----------
TOTAL INVESTMENT IN SUBSIDIARIES $ 0 $(113,270,437) $113,270,437 $ 0 $ 0 $ 0 $ 0
------------ ------------- ------------ ------------ ----------- ------------ -----------
DEFERRED CHARGES
Unamortized debt expense $ 5,701,776 $ 0 $ 772,204 $ 1,719,248 $ 655,860 $ 2,554,464 $ 0
Deferred gas charges 615,320 0 0 0 45,771 569,549 0
Other deferred charges 18,991,489 0 385,710 9,688,617 2,690,983 6,059,419 166,760
------------ ------------- ------------ ------------ ----------- ------------ -----------
TOTAL DEFERRED CHARGES $ 25,308,585 $ 0 $ 1,157,914 $ 11,407,865 $ 3,392,614 $ 9,183,432 $ 166,760
------------ ------------- ------------ ------------ ----------- ------------ -----------
TOTAL ASSETS $376,273,973 $(257,947,033) $250,455,222 $123,884,668 $65,715,082 $124,395,096 $69,770,938
============ ============= ============ ============ =========== ============ ===========
</TABLE>
<PAGE>
<TABLE>
SOUTHEASTERN MICHIGAN GAS ENTERPRISES, INC.
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1995
(Unaudited Statement)
<CAPTION>
BATTLE CREEK GAS COMPANY MICHIGAN GAS COMPANY
--------------------------------------- -----------------------------------------
PUSH PURCHASE SEPARATE PUSH PURCHASE SEPARATE
ASSETS DOWN ADJUSTMENTS COMPANY DOWN ADJUSTMENTS COMPANY
------ ----------- ------------ ----------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
UTILITY PLANT
Plant in service at cost $52,519,551 $(11,616,863) $64,136,414 $102,182,616 $(18,116,891) $120,299,507
Construction in progress 0 0 0 26,078 0 26,078
----------- ------------ ----------- ------------ ------------ ------------
TOTAL UTILITY PLANT $51,519,551 $(11,616,863) $64,136,414 $102,208,694 $(18,116,891) $120,325,585
Less-Accumulated depreciation 6,863,338 (13,726,638) 20,589,976 20,773,597 (18,116,891) 38,890,488
----------- ------------ ----------- ------------ ------------ ------------
NET UTILITY PLANT $45,656,213 $ 2,109,775 $43,546,438 $ 81,435,097 $ 0 $ 81,435,097
----------- ------------ ----------- ------------ ------------ ------------
OTHER PROPERTY
Other property, gross $ 49,934 $ 23,123 $ 26,811 $ 223,002 $ 0 $ 223,002
Less-Accumulated depreciation 0 0 0 34,251 0 34,251
----------- ------------ ----------- ------------ ------------ ------------
OTHER PROPERTY, NET $ 49,934 $ 23,123 $ 26,811 $ 188,751 $ 0 $ 188,751
----------- ------------ ----------- ------------ ------------ ------------
CURRENT ASSET
Cash $ 125,128 $ 0 $ 125,128 $ 530,241 $ 0 $ 530,241
Accounts receivable
Accounts receivable nonaffiliate 4,876,817 0 4,876,817 12,370,456 0 12,370,456
Accounts receivable affiliate 802,785 0 802,785 129,843 0 129,843
Less-Reserve for uncollectible 182,166 0 182,166 289,241 0 289,241
----------- ------------ ----------- ------------ ------------ ------------
Accounts receivable - net 5,497,436 0 5,497,436 12,211,058 0 12,211,058
Notes receivable affiliate 0 0 0 0 0 0
Accrued utility revenue 2,829,063 0 2,829,063 7,669,871 0 7,669,871
Materials and supplies 509,069 0 509,069 913,043 0 913,043
Gas in storage 5,690,836 603,778 5,087,058 7,968,133 0 7,968,133
Prepaid property taxes 0 0 0 0 0 0
Prepayments 79,716 0 79,716 326,967 0 326,967
Other current assets 1,885,073 0 1,885,073 3,968,503 0 3,968,503
----------- ------------ ----------- ------------ ------------ ------------
TOTAL CURRENT ASSETS $16,616,321 $ 603,778 $16,012,543 $ 33,587,816 $ 0 $ 33,587,816
----------- ------------ ----------- ------------ ------------ ------------
DEFERRED CHARGES
Unamortized debt expense $ 655,860 $ 655,860 $ 0 $ 2,554,464 $ 0 $ 2,554,464
Deferred gas charges 45,771 0 45,771 569,549 0 569,549
Other deferred charges 2,690,983 (394,397) 3,085,380 6,059,419 0 6,059,419
----------- ------------ ----------- ------------ ------------ ------------
TOTAL DEFERRED CHARGES $ 3,392,614 $ 261,463 $ 3,131,151 $ 9,183,432 $ 0 $ 9,183,432
----------- ------------ ----------- ------------ ------------ ------------
TOTAL ASSETS $65,715,082 $ 2,998,139 $62,716,943 $124,395,096 $ 0 $124,395,096
=========== ============ =========== ============ ============ ============
</TABLE>
<PAGE>
<TABLE>
SEMCO ENERGY SERVICES, INC.
CONSOLIDATED AND CONSOLIDATING BALANCE SHEET
DECEMBER 1995
(Unaudited Statement)
ASSETS
- ------
<CAPTION>
SEMCO Energy Services
------------------------ SEMCO SEMCO SEMCO
Energy SEMCO Gas Arkansas Consoli-
Marketing Parent Pipeline Storage Pipeline SFS SEDCO Elim. dating
----------- ----------- ----------- ---------- ----------- ---------- ---------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
UTILITY PLANT:
Gathering plant
at cost $ 0 $ 0 $ 2,451,908 $ 0 $ 0 $ 0 $ 0 $ 0 $ 2,451,908
Transmission plant
at cost 0 0 13,857,568 0 0 0 0 0 13,857,568
----------- ----------- ----------- ---------- ----------- ---------- ---------- ------------ -----------
Total utility
plant at cost $ 0 $ 0 $16,309,476 $ 0 $ 0 $ 0 $ 0 $ 0 $16,309,476
Less-accum. depre. 0 0 2,995,132 0 0 0 0 0 2,995,132
----------- ----------- ----------- ---------- ----------- ---------- ---------- ------------ -----------
Net utility plant $ 0 $ 0 $13,314,344 $ 0 $ 0 $ 0 $ 0 $ 0 $13,314,344
OTHER PHYSICAL
PROPERTY, net 1,116 307,865 1,377,670 5,353,181 5,575,195 353,869 2,134,061 0 15,102,957
----------- ----------- ----------- ---------- ----------- ---------- ---------- ------------ -----------
Total plant &
prop. in serv. $ 1,116 $ 307,865 $14,692,014 $5,353,181 $ 5,575,195 $ 353,869 $2,134,061 $ 0 $28,417,301
----------- ----------- ----------- ---------- ----------- ---------- ---------- ------------ -----------
CURRENT ASSETS:
Cash and temporary
investment $ 3,407,321 $ 127,315 $ 2,683 $ 0 $ 9,564 $3,151,996 $ 33,564 $ 0 $ 6,732,443
Accounts rec. 5,124,600 0 51,543 0 0 186,310 470,491 0 5,832,944
Accts. rec. affil. 1,687,803 0 0 0 0 0 0 0 1,687,803
Intercompany
accts. receivable 0 28,512,073 0 0 0 0 1,664,098 (30,176,171) 0
Reserve for
doubtful accts. (100,000) 0 0 0 0 (29,154) 0 0 (129,154)
Unbilled revenue 21,727,190 0 94,500 0 0 0 0 0 21,821,690
Mater. & supplies 0 0 0 0 0 0 0 0 0
Gas in underground
storage 2,252,806 0 0 0 0 0 0 0 2,252,806
Prepaids (45,717) 45,717 59,725 0 0 0 25,464 0 85,189
Margin deposits 2,903,156 0 0 0 0 0 0 0 2,903,156
Misc. curr. assets 0 0 0 0 0 0 0 0 0
----------- ----------- ----------- ---------- ----------- ---------- ---------- ------------ -----------
Total curr. assets $36,957,159 $28,685,105 $ 208,451 $ 0 $ 9,564 $3,309,152 $2,193,617 $(30,176,171) $41,186,877
----------- ----------- ----------- ---------- ----------- ---------- ---------- ------------ -----------
INVESTMENTS IN
SUBSIDIARIES $ 0 $ 6,901,987 $ 0 $ 0 $ 0 $ 0 $ 0 $ (6,901,987) $ 0
----------- ----------- ----------- ---------- ----------- ---------- ---------- ------------ -----------
DEFERRED CHARGES
AND OTHER ASSETS:
Notes rec. affil. 0 0 0 0 0 0 0 0 0
Other 0 0 69,917 377 96,466 0 0 0 166,760
----------- ----------- ----------- ---------- ----------- ---------- ---------- ------------ -----------
Total deferred
charges &
other assets $ 0 $ 0 $ 69,917 $ 377 $ 96,466 $ 0 $ 0 $ 0 $ 166,760
----------- ----------- ----------- ---------- ----------- ---------- ---------- ------------ -----------
TOTAL ASSETS $36,958,275 $35,894,957 $14,970,382 $5,353,558 $ 5,681,225 $3,663,021 $4,327,678 $(37,078,158) $69,770,938
=========== =========== =========== ========== =========== ========== ========== ============ ===========
</TABLE>
<PAGE>
<TABLE>
SOUTHEASTERN MICHIGAN GAS ENTERPRISES, INC.
CONSOLIDATED AND CONSOLIDATING BALANCE SHEET
DECEMBER 1995
(Unaudited Statement)
<CAPTION>
LOCAL DISTRIBUTION COMPANIES
STOCKHOLDERS' INVESTMENT --------------------------------------- SEMCO
AND LIABILITIES: 1995 ELIM. PARENT SEMGC BCGC MIGC ENERGY
- ------------------------ ------------ ------------- ------------ ------------ ----------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
COMMON STOCK EQUITY
Common stock, par $1 $ 11,837,075 $ (7,929,130) $ 11,837,075 $ 7,477,030 $ 0 $ 100 $ 452,000
Capital surplus 83,166,513 (73,599,748) 83,166,513 12,819,937 25,769,383 30,919,186 4,091,242
Retained earnings 17,127,611 (31,866,118) 17,127,611 20,566,009 (8,881,774) 12,437,273 7,744,610
Common stock expense (2,620,485) 124,559 (2,476,093) (268,951) 0 0 0
Unearned comp - ESOT 0 0 0 0 0 0 0
------------ ------------- ------------ ------------ ----------- ------------ -----------
TOTAL COMMON STOCK EQUITY $109,510,714 $(113,270,437) $109,655,106 $ 40,594,025 $16,887,609 $ 43,356,559 $12,287,852
------------ ------------- ------------ ------------ ----------- ------------ -----------
CONVERTIBLE PREFERRED STOCK
Preferred stock, par $1 $ 6,885 $ 0 $ 6,885 $ 0 $ 0 $ 0 $ 0
Premium on preferred 165,240 0 165,240 0 0 0 0
------------ ------------- ------------ ------------ ----------- ------------ -----------
TOTAL CONVERTIBLE PREFERRED $ 172,125 $ 0 $ 172,125 $ 0 $ 0 $ 0 $ 0
------------ ------------- ------------ ------------ ----------- ------------ -----------
PREFERRED STOCK OF SUBSIDIARIES
Preferred stock, par $100 $ 3,100,000 $ 0 $ 0 $ 3,100,000 $ 0 $ 0 $ 0
Preferred stock expense 0 0 0 0 0 0 0
------------ ------------- ------------ ------------ ----------- ------------ -----------
TOTAL PREFERRED STOCK OF SUB. $ 3,100,000 $ 0 $ 0 $ 3,100,000 $ 0 $ 0 $ 0
------------ ------------- ------------ ------------ ----------- ------------ -----------
LONG TERM DEBT
Long-term debt nonaffiliate $103,588,000 $ (54,000,000) $ 88,588,000 $ 23,000,000 $15,000,000 $ 31,000,000 $ 0
Long term debt-ESOT 0 0 0 0 0 0 0
Capital lease obligation 3,736,861 (45,356) 139,953 1,825,515 483,172 1,278,690 54,887
------------ ------------- ------------ ------------ ----------- ------------ -----------
TOTAL LONG-TERM DEBT $107,324,861 $ (54,045,356) $ 88,727,953 $ 24,825,515 $15,483,172 $ 32,278,690 $ 54,887
------------ ------------- ------------ ------------ ----------- ------------ -----------
TOTAL CAPITALIZATION $220,107,700 $(167,315,793) $198,555,184 $ 68,519,540 $32,370,781 $ 75,635,249 $12,342,739
------------ ------------- ------------ ------------ ----------- ------------ -----------
CURRENT LIABILITIES
Maturities of Long-term debt $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
Notes payable nonaffiliates 51,700,000 0 51,700,000 0 0 0 0
Notes payable affililiates 0 (85,559,000) 0 17,375,000 19,875,000 21,075,000 27,234,000
Accounts payable nonaffiliates 38,017,556 (314,287) 858,295 5,401,761 2,405,245 6,099,727 23,566,815
Accounts payable affiliates 0 (4,757,953) 5,416 1,912,174 488,800 1,383,518 968,045
Customer advance payments 5,764,497 0 0 3,022,533 613,568 2,128,396 0
General taxes accrued 309,593 0 0 36,725 27,998 89,611 155,259
Income taxes accrued 394,606 0 (2,237,700) 1,566,120 150,787 268,489 646,910
Interest accrued 1,134,981 0 1,134,981 0 0 0 0
Amounts payable to customers 681,749 0 0 681,749 0 0 0
Accum def income taxes-current (2,248,994) 0 (68,403) (891,546) 166,549 (1,276,570) (179,024)
Other current liabilities 4,851,463 0 (170,147) 1,499,061 751,212 1,808,334 963,003
------------ ------------- ------------ ------------ ----------- ------------ -----------
TOTAL CURRENT LIABILITIES $100,605,451 $ (90,631,240) $ 51,222,442 $ 30,603,577 $24,479,159 $ 31,576,505 $53,355,008
------------ ------------- ------------ ------------ ----------- ------------ -----------
DEFERRED CREDITS
Accum. deferred income taxes $ 19,079,482 $ 0 $ (186,009) $ 4,239,977 $ 4,807,538 $ 6,521,368 $ 3,696,608
Unamortized ITC 3,049,141 0 0 2,027,335 48,001 973,805 0
Deferred gas costs 615,320 0 0 0 45,771 569,549 0
Customer advances 9,326,391 0 0 6,405,111 241,910 2,679,370 0
Other 23,490,488 0 863,605 12,089,128 3,721,922 6,439,250 376,583
------------ ------------- ------------ ------------ ----------- ------------ -----------
TOTAL DEFERRED CREDITS $ 55,560,822 $ 0 $ 677,596 $ 24,761,551 $ 8,865,142 $ 17,183,342 $ 4,073,191
------------ ------------- ------------ ------------ ----------- ------------ -----------
TOTAL EQUITY AND LIABILITIES $376,273,973 $(257,947,033) $250,455,222 $123,884,668 $65,715,082 $124,395,096 $69,770,938
============ ============= ============ ============ =========== ============ ===========
</TABLE>
<PAGE>
<TABLE>
SOUTHEASTERN MICHIGAN GAS ENTERPRISES, INC.
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1995
(Unaudited Statement)
<CAPTION>
BATTLE CREEK GAS COMPANY MICHIGAN GAS COMPANY
--------------------------------------- -----------------------------------------
PUSH PURCHASE SEPARATE PUSH PURCHASE SEPARATE
STOCKHOLDERS' INVESTMENT AND LIABILITIES DOWN ADJUSTMENTS COMPANY DOWN ADJUSTMENTS COMPANY
- ---------------------------------------- ----------- ------------ ----------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Common stock, par $1 $ 0 $ (2,932) $ 2,932 $ 100 $ 0 $ 100
Capital surplus 25,769,383 20,778,281 4,991,102 30,919,186 1,486,318 29,432,868
Retained earnings (8,881,774) (30,299,462) 21,417,688 12,437,273 (1,486,318) 13,923,591
Common stock expense 0 0 0 0 0 0
Unearned comp - ESOT 0 0 0 0 0 0
----------- ------------ ----------- ------------ ------------ ------------
TOTAL COMMON STOCK EQUITY $16,887,609 $ (9,524,113) $26,411,722 $ 43,356,559 $ 0 $ 43,356,559
----------- ------------ ----------- ------------ ------------ ------------
LONG TERM DEBT
Long-term debt nonaffiliate $15,000,000 $ 15,000,000 $ 0 $ 31,000,000 $ 0 $ 31,000,000
Long term debt-ESOT 0 0 0 0 0 0
Capital lease obligation 483,172 0 483,172 1,278,690 0 1,278,690
----------- ------------ ----------- ------------ ------------ ------------
TOTAL LONG-TERM DEBT $15,483,172 $ 15,000,000 $ 483,172 $ 32,278,690 $ 0 $ 32,278,690
----------- ------------ ----------- ------------ ------------ ------------
TOTAL CAPITALIZATION $32,370,781 $ 5,475,887 $26,894,894 $ 75,635,249 $ 0 $ 75,635,249
----------- ------------ ----------- ------------ ------------ ------------
CURRENT LIABILITIES
Maturities of Long-term debt $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
Notes payable nonaffiliates 0 0 0 0 0 0
Notes payable affiliates 19,875,000 0 19,875,000 21,075,000 0 21,075,000
Account payable nonaffiliates 2,405,245 0 2,405,245 6,099,727 0 6,099,727
Accounts payable affililates 488,800 0 488,800 1,383,518 0 1,383,518
Customer advance payments 613,568 0 613,568 2,128,396 0 2,128,396
General taxes accrued 27,998 0 27,998 89,611 0 89,611
Income taxes accrued 150,787 0 150,787 268,489 0 268,489
Interest accrued 0 0 0 0 0 0
Amounts payable to customers 0 0 0 0 0 0
Accumulated deferred income taxes-current 166,549 211,323 (44,774) (1,276,570) 0 (1,276,570)
Other current liabilities 751,212 0 751,212 1,808,334 0 1,808,334
----------- ------------ ----------- ------------ ------------ ------------
TOTAL CURRENT LIABILITIES $24,479,159 $ 211,323 $24,267,836 $ 31,576,505 $ 0 $ 31,576,505
----------- ------------ ----------- ------------ ------------ ------------
DEFERRED CREDITS
Accumulated deferred income taxes $ 4,807,538 $ (712,833) $ 5,520,371 $ 6,521,368 $ 0 $ 6,521,368
Unamortized ITC 48,001 (732,452) 780,453 973,805 0 973,805
Deferred gas costs 45,771 0 45,771 569,549 0 569,549
Customer advances 241,910 0 241,910 2,679,370 0 2,679,370
Other 3,721,922 (1,243,786) 4,965,708 6,439,250 0 6,439,250
----------- ------------ ----------- ------------ ------------ ------------
TOTAL DEFERRED CREDITS $ 8,865,142 $ (2,689,071) $11,554,213 $ 17,183,342 $ 0 $ 17,183,342
----------- ------------ ----------- ------------ ------------ ------------
TOTAL EQUITY AND LIABILITIES $65,715,082 $ 2,998,139 $62,716,943 $124,395,096 $ 0 $124,395,096
=========== ============ =========== ============ ============ ============
</TABLE>
<PAGE>
<TABLE>
SEMCO ENERGY SERVICES, INC.
CONSOLIDATED AND CONSOLIDATING BALANCE SHEET
DECEMBER 1995
(Unaudited Statement)
STOCKHOLDERS' INVESTMENT
AND LIABILITIES:
- ------------------------
<CAPTION>
SEMCO Energy Services
------------------------ SEMCO SEMCO SEMCO
Energy SEMCO Gas Arkansas Consoli-
Marketing Parent Pipeline Storage Pipeline SFS SEDCO Elim. dating
----------- ----------- ----------- ---------- ----------- ---------- ---------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
STOCKHOLDERS
INVESTMENT:
Common stock $ 0 $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 250,000 $ 201,000 $ (3,000) $ 452,000
Capital surplus 0 1,500,000 1,101,603 0 0 358,296 2,232,946 (1,101,604) 4,091,241
Retained earn. 1,090,292 4,822,443 4,692,265 3,044,910 (4,027,661) 1,990,180 1,929,562 (5,797,382) 7,744,609
----------- ----------- ----------- ---------- ----------- ---------- ---------- ------------ -----------
Total stock-
holders invest. $ 1,090,292 $ 6,323,443 $ 5,794,868 $3,045,910 $(4,026,661) $2,598,476 $4,363,508 $ (6,901,986) $12,287,850
----------- ----------- ----------- ---------- ----------- ---------- ---------- ------------ -----------
LONG TERM DEBT $ 0 $ 54,887 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 54,887
----------- ----------- ----------- ---------- ----------- ---------- ---------- ------------ -----------
Total capital. $ 1,090,292 $ 6,378,330 $ 5,794,868 $3,045,910 $(4,026,661) $2,598,476 $4,363,508 $ (6,901,986) $12,342,737
----------- ----------- ----------- ---------- ----------- ---------- ---------- ------------ -----------
CURRENT LIABILITIES
Notes payable to
banks $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
Notes payable to
affiliates 0 27,234,000 0 0 0 0 0 0 27,234,000
Accounts payable 22,781,244 269,718 186,880 0 6,816 315,673 6,485 0 23,566,816
Accounts payable
to affiliates 950,138 0 1,925 0 5,150 7,099 3,168 0 968,045
Accounts/notes
payable interco. 10,577,578 1,664,098 6,842,179 1,163,045 9,783,688 145,688 0 (30,176,171) 0
Accrued gen. taxes 22,092 43,766 42,168 0 141 42,798 4,296 0 155,261
Accrued inc. taxes 1,063,346 61,359 677,637 514,844 (2,108,536) 219,117 219,142 0 646,909
Accrued interest 0 0 0 0 0 0 0 0 0
Accum. deferred
income taxes 0 (179,024) 0 0 0 0 0 0 (179,024)
Other cur. liab. 473,585 454,959 18,500 0 0 15,960 0 (1) 963,003
----------- ----------- ----------- ---------- ----------- ---------- ---------- ------------ -----------
Total cur. liab. $35,867,983 $29,548,876 $ 7,769,289 $1,677,889 $ 7,687,824 $ 746,230 $ 233,091 $(30,176,172) $53,355,010
----------- ----------- ----------- ---------- ----------- ---------- ---------- ------------ -----------
DEFERRED AND
OTHER CREDITS:
Accum. deferred
income taxes $ 0 $ (137,616) $ 1,406,225 $ 629,759 $ 2,020,062 $ 255,757 $ (477,579) $ 0 $ 3,696,608
Other 0 105,367 0 0 0 62,558 208,658 0 376,583
----------- ----------- ----------- ---------- ----------- ---------- ---------- ------------ -----------
Total deferred &
other credits $ 0 $ (32,249) $ 1,406,225 $ 629,759 $ 2,020,062 $ 318,315 $ (268,921) $ 0 $ 4,073,191
----------- ----------- ----------- ---------- ----------- ---------- ---------- ------------ -----------
TOTAL STOCKHOLDERS
INVEST. AND
LIABILITIES $36,958,275 $35,894,957 $14,970,382 $5,353,558 $ 5,681,225 $3,663,021 $4,327,678 $(37,078,158) $69,770,938
=========== =========== =========== ========== =========== ========== ========== ============ ===========
</TABLE>
<PAGE>
<TABLE>
SOUTHEASTERN MICHIGAN GAS ENTERPRISES, INC.
CONSOLIDATED AND CONSOLIDATING STATEMENT OF RETAINED EARNINGS
DECEMBER 31, 1995
(Unaudited Statement)
<CAPTION>
LOCAL DISTRIBUTION COMPANIES
-------------------------------------
SEM B C MICH SEMCO
TOTAL ELIM. PARENT GAS CO GAS CO GAS CO ENERGY
----------- ------------ ----------- ----------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Beginning of Year $15,027,808 $(60,510,172) $15,027,808 $19,564,545 $21,362,767 $12,294,925 $7,287,935
Additions
Net income 11,348,044 (13,069,726) 11,348,044 5,379,464 3,054,921 4,178,666 456,675
Tax benefit-ESOT div. 0 0 0 0 0 0 0
----------- ------------ ----------- ----------- ----------- ----------- ----------
Total additions $11,348,044 $(13,069,726) $11,348,044 $ 5,379,464 $ 3,054,921 $ 4,178,666 $ 456,675
----------- ------------ ----------- ----------- ----------- ----------- ----------
Deductions
Cash divs. on common 9,231,614 (9,750,000) 9,231,614 4,200,000 3,000,000 2,550,000 0
Cash divs. on pref. 16,627 (178,000) 16,627 178,000 0 0 0
Stock repurchase 0 0 0 0 0 0 0
Stock dividend 0 0 0 0 0 0 0
----------- ------------ ----------- ----------- ----------- ----------- ----------
Total deductions $ 9,248,241 $ (9,928,000) $ 9,248,241 $ 4,378,000 $ 3,000,000 $ 2,550,000 $ 0
----------- ------------ ----------- ----------- ----------- ----------- ----------
End of Year To Date $17,127,611 $(63,651,898) $17,127,611 $20,566,009 $21,417,688 $13,923,591 $7,744,610
=========== ============ =========== =========== =========== =========== ==========
Percent of Dividends
to Net Income 81.35%
===========
</TABLE>
<PAGE>
<TABLE>
SEMCO ENERGY SERVICES, INC.
CONSOLIDATED AND CONSOLIDATING STATEMENT OF RETAINED EARNINGS
DECEMBER 31, 1995
(Unaudited Statement)
<CAPTION>
SEMCO Energy Services
------------------------ SEMCO SEMCO SEMCO
Energy SEMCO Gas Arkansas Consoli-
Marketing Parent Pipeline Storage Pipeline SFS SEDCO Elim. dating
---------- ---------- ---------- ---------- ----------- ---------- ---------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Beginning of Year $ 408,994 $5,163,198 $4,294,697 $2,630,875 $(2,740,136) $1,770,533 $1,557,159 $(5,797,382) $7,287,938
Additions:
Net income (loss) 681,298 (340,755) 397,568 414,035 (1,287,525) 219,647 372,403 0 456,671
Deductions: 0 0 0 0 0 0 0 0 0
---------- ---------- ---------- ---------- ----------- ---------- ---------- ----------- ----------
End of Year To Date $1,090,292 $4,822,443 $4,692,265 $3,044,910 $(4,027,661) $1,990,180 $1,929,562 $(5,797,382) $7,744,609
========== ========== ========== ========== =========== ========== ========== =========== ==========
</TABLE>
<PAGE>
<TABLE>
SOUTHEASTERN MICHIGAN GAS ENTERPRISES, INC.
CONSOLIDATED AND CONSOLIDATING STATEMENT OF CAPITAL SURPLUS
FOR THE YEAR ENDED DECEMBER 31, 1995
UNAUDITED
---------
<CAPTION>
NATURAL GAS GROUP
------------------------------------
SEM B C MICH SEMCO
TOTAL ELIM. PARENT GAS CO GAS CO GAS CO ENERGY
----------- ------------ ----------- ----------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
CAPITAL SURPLUS - BEGINNING OF YEAR $83,711,308 $(51,335,149) $83,711,308 $12,819,937 $4,991,102 $29,432,868 $4,091,242
----------- ------------ ----------- ----------- ---------- ----------- ----------
ADD -
Excess of common stock issued in
connection with dividend
reinvestment plan over par value $ 4,840,358 $ 0 $ 4,840,358 $ 0 $ 0 $ 0 $ 0
Excess of common stock issued to
Employee Stock Ownership Trust
(ESOT) over par value 849,733 0 849,733 0 0 0 0
Excess of common stock issued in
connection with conversion of
preferred shares over par value 12,953 0 12,953 0 0 0 0
----------- ------------ ----------- ----------- ---------- ----------- ----------
$ 5,703,044 $ 0 $ 5,703,044 $ 0 $ 0 $ 0 $ 0
----------- ------------ ----------- ----------- ---------- ----------- ----------
DEDUCT -
Issuance of 5% stock dividend $ 564,369 $ 0 $ 564,369 $ 0 $ 0 $ 0 $ 0
Excess of common stock repurchased
over par value 5,683,470 0 5,683,470 0 0 0 0
----------- ------------ ----------- ----------- ---------- ----------- ----------
$ 6,247,839 $ 0 $ 6,247,839 $ 0 $ 0 $ 0 $ 0
----------- ------------ ----------- ----------- ---------- ----------- ----------
CAPITAL SURPLUS - END OF YEAR $83,166,513 $(51,335,149) $83,166,513 $12,819,937 $4,991,102 $29,432,868 $4,091,242
=========== ============ =========== =========== ========== =========== ==========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> OPUR3
<LEGEND>
This schedule contains summary financial information extracted from the
consolidated statement of income and the consolidated balance sheet and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<BOOK-VALUE> PER-BOOK
<TOTAL-ASSETS> 376,274
<TOTAL-OPERATING-REVENUES> 335,539
<NET-INCOME> 11,331
</TABLE>
