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 12/31/96 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 3.4 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 1996 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 17,800,000 Mcf 6,400,000 Mcf 19,600,000 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 19,700,000 Mcf 6,800,000 Mcf 17,700,000 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 28th day of February, 1997.
SOUTHEASTERN MICHIGAN GAS ENTERPRISES, INC.
(Name of Claimant)
By Robert F. Caldwell
Executive Vice President 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:
Robert F. Caldwell Executive Vice President 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 1996
(Unaudited Statement)
<CAPTION>
TWELVE MONTHS TO DATE LOCAL DISTRIBUTION COMPANIES
--------------------- -------------------------------------- SEMCO
1996 ELIM. PARENT SEMGC BCGC MIGC ENERGY
------------ ------------ ----------- ----------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
OPERATING REVENUE:
Gas sales revenue
Residential $138,644,443 $ 0 $ 0 $59,319,438 $23,416,470 $ 55,908,535 $ 0
Commercial 65,508,878 0 0 25,354,011 9,070,223 31,084,644 0
Industrial 15,217,832 0 0 2,776,295 1,840,594 10,600,943 0
------------ ------------ ----------- ----------- ----------- ------------ ------------
$219,371,153 $ 0 $ 0 $87,449,744 $34,327,287 $ 97,594,122 $ 0
Gas marketing 311,384,729 (35,674,781) 0 0 0 0 347,059,510
Transportation 12,357,528 0 0 3,103,549 4,001,267 5,252,712 0
Other operations 4,516,656 (494,277) 0 381,672 410,564 464,739 3,753,958
------------ ------------ ----------- ----------- ----------- ------------ ------------
Total Operating Revenue $547,630,066 $(36,169,058) $ 0 $90,934,965 $38,739,118 $103,311,573 $350,813,468
------------ ------------ ----------- ----------- ----------- ------------ ------------
OPERATING EXPENSES:
Cost of Gas Sold $151,135,334 $ 0 $ 0 $57,242,512 $20,937,753 $ 72,955,069 $ 0
Cost of Gas Marketed 305,394,867 (35,674,781) 0 0 0 0 341,069,648
Operations and Maintenance 40,669,092 (494,277) 173,968 15,175,221 7,102,622 13,552,584 5,158,974
Depreciation 11,317,329 0 185 4,476,725 2,060,142 3,868,083 912,194
Income Taxes 6,370,936 3,112,184 (3,365,218) 2,205,596 1,662,208 2,237,874 518,292
Taxes Other Than Income 8,647,911 0 (1,481) 3,474,914 1,616,598 3,085,745 472,135
------------ ------------ ----------- ----------- ----------- ------------ ------------
$523,535,469 $(33,056,874) $(3,192,546) $82,574,968 $33,379,323 $ 95,699,355 $348,131,243
------------ ------------ ----------- ----------- ----------- ------------ ------------
OPERATING INCOME: $ 24,094,597 $ (3,112,184) $ 3,192,546 $ 8,359,997 $ 5,359,795 $ 7,612,218 $ 2,682,225
------------ ------------ ----------- ----------- ----------- ------------ ------------
Write-down of NOARK
investment, net $(21,000,000) $ 0 $ 0 $ 0 $ 0 $ 0 $(21,000,000)
------------ ------------ ----------- ----------- ----------- ------------ ------------
Other Income (Loss), Net $ (813,029) $ (5,779,768) $ 5,727,035 $ 75,891 $ 114,109 $ (302,858) $ (647,438)
------------ ------------ ----------- ----------- ----------- ------------ ------------
Income Before Income Deductions $ 2,281,568 $ (8,891,952) $ 8,919,581 $ 8,435,888 $ 5,473,904 $ 7,309,360 $(18,965,213)
------------ ------------ ----------- ----------- ----------- ------------ ------------
INCOME DEDUCTIONS:
Interest on Long-Term Debt $ 8,513,549 $ (4,374,000) $ 7,219,799 $ 1,863,000 $ 1,293,750 $ 2,511,000 $ 0
Other Interest 2,165,814 (4,517,952) 2,478,263 970,475 1,131,714 608,583 1,494,731
Amortization of Debt Expense 373,477 0 51,229 117,216 30,864 174,168 0
Dividends on Pref. Stock of SEMGC 193,826 0 15,818 178,008 0 0 0
------------ ------------ ----------- ----------- ----------- ------------ ------------
$ 11,246,666 $ (8,891,952) $ 9,765,109 $ 3,128,699 $ 2,456,328 $ 3,293,751 $ 1,494,731
------------ ------------ ----------- ----------- ----------- ------------ ------------
Net Income Before Preferred
Dividends and Extraordinary Item $ (8,965,098) $ 0 $ (845,528) $ 5,307,189 $ 3,017,576 $ 4,015,609 $(20,459,944)
Equity earnings of subs. $ 0 $ 8,119,569 $(8,119,569) $ 0 $ 0 $ 0 $ 0
------------ ------------ ----------- ----------- ----------- ------------ ------------
Net Income for Common $ (8,965,098) $ 8,119,569 $(8,965,097) $ 5,307,189 $ 3,017,576 $ 4,015,609 $(20,459,944)
============ ============ =========== =========== =========== ============ ============
</TABLE>
<PAGE>
<TABLE>
SOUTHEASTERN MICHIGAN GAS ENTERPRISES, INC.
CONSOLIDATED INCOME STATEMENT
DECEMBER 31, 1996
(Unaudited Statement)
<CAPTION>
TOTAL TOTAL
TWELVE MONTHS TO DATE BCGC PUSH-DOWN BCGC MIGC PUSH-DOWN MIGC
- --------------------- ----------- ----------- ----------- ------------ --------- ------------
<S> <C> <C> <C> <C> <C> <C>
OPERATING REVENUE:
Gas sales revenue:
Residential $23,416,470 $ 0 $23,416,470 $ 55,908,535 $ 0 $ 55,908,535
Commercial 9,070,223 0 9,070,223 31,084,644 0 31,084,644
Industrial 1,840,594 0 1,840,594 10,600,943 0 10,600,943
----------- ----------- ----------- ------------ --------- ------------
$34,327,287 $ 0 $34,327,287 $ 97,594,122 $ 0 $ 97,594,122
----------- ----------- ----------- ------------ --------- ------------
Gas Marketing $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
Transportation 4,001,267 0 4,001,267 5,252,712 0 5,252,712
Other Operations 410,564 0 410,564 464,739 0 464,739
----------- ----------- ----------- ------------ --------- ------------
Total Operating Revenue $38,739,118 $ 0 $38,739,118 $103,311,573 $ 0 $103,311,573
----------- ----------- ----------- ------------ --------- ------------
OPERATING EXPENSES:
Cost of Gas Sold $20,937,753 $ 0 $20,937,753 $ 72,955,069 $ 0 $ 72,955,069
Cost of Gas Marketed 0 0 0 0 0 0
Operations 6,448,885 0 6,448,885 12,348,165 0 12,348,165
Maintenance 653,737 0 653,737 1,204,419 0 1,204,419
Depreciation 1,950,293 109,849 2,060,142 3,868,083 0 3,868,083
Income Taxes 1,947,926 (285,718) 1,662,208 2,237,874 0 2,237,874
Taxes Other Than Income 1,616,598 0 1,616,598 3,085,745 0 3,085,745
----------- ----------- ----------- ------------ --------- ------------
$33,555,192 $ (175,869) $33,379,323 $ 95,699,355 $ 0 $ 95,699,355
----------- ----------- ----------- ------------ --------- ------------
OPERATING INCOME: $ 5,183,926 $ 175,869 $ 5,359,795 $ 7,612,218 $ 0 $ 7,612,218
----------- ----------- ----------- ------------ --------- ------------
Other Income (Loss), Net $ 114,109 $ 0 $ 114,109 $ (302,858) $ 0 $ (302,858)
----------- ----------- ----------- ------------ --------- ------------
Income Before Income Deductions $ 5,298,035 $ 175,869 $ 5,473,904 $ 7,309,360 $ 0 $ 7,309,360
----------- ----------- ----------- ------------ --------- ------------
INCOME DEDUCTIONS:
Interest on Long-Term Debt $ 0 $ 1,293,750 $ 1,293,750 $ 2,511,000 $ 0 $ 2,511,000
Other Interest 1,131,714 0 1,131,714 608,583 0 608,583
Amortization of Debt Expense 0 30,864 30,864 174,168 0 174,168
Dividends on Preferred Stock 0 0 0 0 0 0
----------- ----------- ----------- ------------ --------- ------------
$ 1,131,714 $ 1,324,614 $ 2,456,328 $ 3,293,751 $ 0 $ 3,293,751
----------- ----------- ----------- ------------ --------- ------------
Net Income For Common $ 4,166,321 $(1,148,745) $ 3,017,576 $ 4,015,609 $ 0 $ 4,015,609
=========== =========== =========== ============ ========= ============
</TABLE>
<PAGE>
<TABLE>
SEMCO ENERGY SERVICES, INC.
CONSOLIDATED AND CONSOLIDATING INCOME STATEMENT
DECEMBER 1996
(Unaudited Statement)
<CAPTION>
TWELVE MONTHS TO DATE
- ---------------------
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 $310,828,575 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $310,828,575
Gas sales to affil. 36,230,935 0 0 0 0 0 0 0 36,230,935
------------ ---------- ---------- -------- ------------ --------- -------- ----------- ------------
Total gas sales rev. $347,059,510 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $347,059,510
------------ ---------- ---------- -------- ------------ --------- -------- ----------- ------------
COST OF GAS SOLD:
Cost of gas sold $334,718,847 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $334,718,847
Transportation exp. 6,350,801 0 0 0 0 0 0 0 6,350,801
------------ ---------- ---------- -------- ------------ --------- -------- ----------- ------------
Total cost of
gas sold $341,069,648 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $341,069,648
------------ ---------- ---------- -------- ------------ --------- -------- ----------- ------------
GROSS MARGIN ON
GAS SALES $ 5,989,862 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 5,989,862
------------ ---------- ---------- -------- ------------ --------- -------- ----------- ------------
OTHER OPERATING REV.:
Gas transmission $ 0 $ 0 $2,421,539 $ 0 $ 0 $ 0 $ 0 $ 0 $ 2,421,539
Gas gathering 0 0 648,535 0 0 0 0 0 648,535
Gas & oil product. 0 184,226 0 0 0 0 5,492 0 189,718
Other 0 0 0 0 0 285,041 209,125 0 494,166
------------ ---------- ---------- -------- ------------ --------- -------- ----------- ------------
Total other
operating revenue $ 0 $ 184,226 $3,070,074 $ 0 $ 0 $ 285,041 $214,617 $ 0 $ 3,753,958
------------ ---------- ---------- -------- ------------ --------- -------- ----------- ------------
Total operating rev. $ 5,989,862 $ 184,226 $3,070,074 $ 0 $ 0 $ 285,041 $214,617 $ 0 $ 9,743,820
------------ ---------- ---------- -------- ------------ --------- -------- ----------- ------------
OTHER OPERATING EXP.:
Operation expense $ 3,871,439 $ 46,397 $ 588,766 $ 49,472 $ 227,924 $ 217,977 $156,998 $ 0 $ 5,158,973
Depreciation & amor. 40,504 24,203 625,927 2,741 6,240 176,721 35,858 0 912,194
General taxes 29,151 34,445 329,942 2,600 (191) 45,929 30,260 0 472,136
------------ ---------- ---------- -------- ------------ --------- -------- ----------- ------------
Total other
operating expense $ 3,941,094 $ 105,045 $1,544,635 $ 54,813 $ 233,973 $ 440,627 $223,116 $ 0 $ 6,543,303
------------ ---------- ---------- -------- ------------ --------- -------- ----------- ------------
PRETAX OPERATING INC. $ 2,048,768 $ 79,181 $1,525,439 $(54,813) $ (233,973) $(155,586) $ (8,499) $ 0 $ 3,200,517
------------ ---------- ---------- -------- ------------ --------- -------- ----------- ------------
OTHER INCOME, NET:
Gross equity income $ 0 $ 0 $ 66,928 $802,750 $(34,925,411) $ 0 $ 0 $ 0 $(34,055,733)
Taxes on equity inc. 0 0 (6,300) (280,963) 12,223,570 0 0 0 11,936,307
AFUDC and other inc. 66,446 1,410,244 0 30,039 626,216 244,981 176,656 (1,822,811) 731,771
Taxes on other inc. (21,099) 0 (9,425) 0 (219,175) (5,635) (10,084) 0 (265,418)
------------ ---------- ---------- -------- ------------ --------- -------- ----------- ------------
Total other
income, net $ 45,347 $1,410,244 $ 51,203 $551,826 $(22,294,800) $ 239,346 $166,572 $(1,822,811) $(21,653,073)
------------ ---------- ---------- -------- ------------ --------- -------- ----------- ------------
EARNINGS BEFORE
INTEREST & TAXES $ 2,094,115 $1,489,425 $1,576,642 $497,013 $(22,528,773) $ 83,760 $158,073 $(1,822,811) $(18,452,556)
Interest expense $ 467,064 $1,494,084 $ 484,391 $ 6,271 $ 865,572 $ 0 $ 158 $(1,822,811) $ 1,494,729
Income taxes 557,758 (155,856) 380,028 (16,691) (359,413) 25,732 81,099 0 512,657
------------ ---------- ---------- -------- ------------ --------- -------- ----------- ------------
NET INCOME (LOSS) $ 1,069,293 $ 151,197 $ 712,223 $507,433 $(23,034,932) $ 58,028 $ 76,816 $ 0 $(20,459,942)
============ ========== ========== ======== ============ ========= ======== =========== ============
</TABLE>
<PAGE>
<TABLE>
SOUTHEASTERN MICHIGAN GAS ENTERPRISES, INC.
CONSOLIDATED AND CONSOLIDATING BALANCE SHEET
DECEMBER 1996
(Unaudited Statement)
<CAPTION>
LOCAL DISTRIBUTION COMPANIES
--------------------------------------- SEMCO
ASSETS 1996 ELIM. PARENT SEMGC BCGC MIGC ENERGY
------ ------------ ------------- ------------ ------------ ----------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
UTILITY PLANT:
Plant in Service, at Cost $340,674,716 $ 0 $ 0 $159,110,627 $56,071,158 $109,183,455 $ 16,309,476
Construction Work in Progress 2,103,443 0 0 16,003 2,013,019 74,421 0
------------ ------------- ------------ ------------ ----------- ------------ ------------
$342,778,159 $ 0 $ 0 $159,126,630 $58,084,177 $109,257,876 $ 16,309,476
Less-Accumulated Depreciation 96,390,802 0 0 60,802,942 8,445,470 23,560,242 3,582,148
------------ ------------- ------------ ------------ ----------- ------------ ------------
Net Utility Plant $246,387,357 $ 0 $ 0 $ 98,323,688 $49,638,707 $ 85,697,634 $ 12,727,328
------------ ------------- ------------ ------------ ----------- ------------ ------------
OTHER PROPERTY, NET:
Other Property, Gross $ 14,281,105 $ 0 $ 1,833,568 $ 588,544 $ 49,934 $ 222,741 $ 11,586,318
Less-Accumulated Depreciation 4,696,522 0 763,045 148,792 0 39,042 3,745,643
------------ ------------- ------------ ------------ ----------- ------------ ------------
$ 9,584,583 $ 0 $ 1,070,523 $ 439,752 $ 49,934 $ 183,699 $ 7,840,675
------------ ------------- ------------ ------------ ----------- ------------ ------------
CURRENT ASSETS:
Cash $ 10,231,743 $ 0 $ 9,751,353 $ 93,148 $ 63,894 $ 52,146 $ 271,202
Accounts receivable:
Accounts Rec. - Non-Affiliate 44,832,086 (349,131) 0 12,272,171 5,257,598 13,593,623 14,057,825
Accounts Rec. - Affiliate 0 (4,478,859) 332,381 27,369 206,492 0 3,912,617
Less-Reserve for Uncollectibles 1,247,388 0 0 476,203 168,984 340,686 261,515
------------ ------------- ------------ ------------ ----------- ------------ ------------
43,584,698 (4,827,990) 332,381 11,823,337 5,295,106 13,252,937 17,708,927
Notes Receivable Affiliate 0 (160,403,778) 160,403,778 0 0 0 0
Accrued Utility Revenue 76,548,801 0 0 6,997,568 2,398,263 8,501,779 58,651,191
Materials and Supplies 3,025,138 0 0 1,633,655 581,165 810,318 0
Gas in Storage 33,596,652 0 0 8,518,187 6,859,505 10,233,850 7,985,110
Prepaid Property Taxes 1,668,293 0 33,358 1,614,986 0 0 19,949
Prepayments 8,371,738 0 350,777 207,014 93,395 230,970 7,489,582
Other Current Assets 13,791,023 0 0 3,627,300 3,375,695 6,788,028 0
------------ ------------- ------------ ------------ ----------- ------------ ------------
Total Current Assets $190,818,086 $(165,231,768) $170,871,647 $ 34,515,195 $18,667,023 $ 39,870,028 $ 92,125,961
------------ ------------- ------------ ------------ ----------- ------------ ------------
INVESTMENT IN SUBSIDIARIES:
Southeastern Michigan Gas Co $ 0 $ (41,645,606) $ 41,645,606 $ 0 $ 0 $ 0 $ 0
Battle Creek Gas Company 0 (17,135,320) 17,135,320 0 0 0 0
Michigan Gas Company 0 (45,622,168) 45,622,168 0 0 0 0
SEMCO Energy Services 0 8,172,092 (8,172,092) 0 0 0 0
------------ ------------- ------------ ------------ ----------- ------------ ------------
$ 0 $ (96,231,002) $ 96,231,002 $ 0 $ 0 $ 0 $ 0
------------ ------------- ------------ ------------ ----------- ------------ ------------
DEFERRED CHARGES:
Unamortized Debt Expense $ 5,328,299 $ 0 $ 720,975 $ 1,602,032 $ 624,996 $ 2,380,296 $ 0
Deferred Gas Charges 289,570 0 0 0 0 289,570 0
Advances to Equity Investees 5,062,000 0 0 0 0 0 5,062,000
Other Deferred Charges 20,445,477 0 576,118 10,508,318 2,861,358 6,355,537 144,146
------------ ------------- ------------ ------------ ----------- ------------ ------------
$ 31,125,346 $ 0 $ 1,297,093 $ 12,110,350 $ 3,486,354 $ 9,025,403 $ 5,206,146
------------ ------------- ------------ ------------ ----------- ------------ ------------
TOTAL ASSETS $477,915,372 $(261,462,770) $269,470,265 $145,388,985 $71,842,018 $134,776,764 $117,900,110
============ ============= ============ ============ =========== ============ ============
</TABLE>
<TABLE>
SOUTHEASTERN MICHIGAN GAS ENTERPRISES, INC.
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1996
(Unaudited Statement)
<CAPTION>
ASSETS BCGC PUSH-DOWN BCGC MIGC PUSH-DOWN MIGC
------ ----------- ------------ ----------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
UTILITY PLANT:
Plant in Service, at Cost $67,688,021 $(11,616,863) $56,071,158 $127,300,346 $(18,116,891) $109,183,455
Construction Work in Progress 2,013,019 0 2,013,019 74,421 0 74,421
----------- ------------ ----------- ------------ ------------ ------------
$69,701,040 $(11,616,863) $58,084,177 $127,374,767 $(18,116,891) $109,257,876
Less-Accumulated Depreciation 22,062,259 (13,616,789) 8,445,470 41,677,133 (18,116,891) 23,560,242
----------- ------------ ----------- ------------ ------------ ------------
$47,638,781 $ 1,999,926 $49,638,707 $ 85,697,634 $ 0 $ 85,697,634
----------- ------------ ----------- ------------ ------------ ------------
OTHER PROPERTY, NET:
Other Property, Gross $ 26,811 $ 23,123 $ 49,934 $ 222,741 $ 0 $ 222,741
Less-Accumulated Depreciation 0 0 0 39,042 0 39,042
----------- ------------ ----------- ------------ ------------ ------------
$ 26,811 $ 23,123 $ 49,934 $ 183,699 $ 0 $ 183,699
----------- ------------ ----------- ------------ ------------ ------------
CURRENT ASSETS:
Cash $ 63,894 $ 0 $ 63,894 $ 52,146 $ 0 $ 52,146
Accounts receivable:
Accounts Receivable - Non-Affiliate 5,257,598 0 5,257,598 13,593,623 0 13,593,623
Accounts Receivable - Affiliate 206,492 0 206,492 0 0 0
Less-Reserve for Uncollectibles 168,984 0 168,984 340,686 0 340,686
----------- ------------ ----------- ------------ ------------ ------------
5,295,106 0 5,295,106 13,252,937 0 13,252,937
Notes Receivable Affiliate 0 0 0 0 0 0
Accrued Utility Revenue 2,398,263 0 2,398,263 8,501,779 0 8,501,779
Materials and Supplies 581,165 0 581,165 810,318 0 810,318
Gas in Storage 6,255,727 603,778 6,859,505 10,233,850 0 10,233,850
Prepaid Property Taxes 0 0 0 0 0 0
Prepayments 93,395 0 93,395 230,970 0 230,970
Other Current Assets 3,375,695 0 3,375,695 6,788,028 0 6,788,028
----------- ------------ ----------- ------------ ------------ ------------
Total Current Assets $18,063,245 $ 603,778 $18,667,023 $ 39,870,028 $ 0 $ 39,870,028
----------- ------------ ----------- ------------ ------------ ------------
DEFERRED CHARGES:
Unamortized Debt Expense $ 0 $ 624,996 $ 624,996 $ 2,380,296 $ 0 $ 2,380,296
Deferred Gas Charges 0 0 0 289,570 0 289,570
Other Deferred Charges 2,861,358 0 2,861,358 6,355,537 0 6,355,537
----------- ------------ ----------- ------------ ------------ ------------
$ 2,861,358 $ 624,996 $ 3,486,354 $ 9,025,403 $ 0 $ 9,025,403
----------- ------------ ----------- ------------ ------------ ------------
TOTAL ASSETS $68,590,195 $ 3,251,823 $71,842,018 $134,776,764 $ 0 $134,776,764
=========== ============ =========== ============ ============ ============
</TABLE>
<PAGE>
<TABLE>
SEMCO ENERGY SERVICES, INC.
CONSOLIDATED AND CONSOLIDATING BALANCE SHEET
DECEMBER 1996
(Unaudited Statement)
<CAPTION>
ASSETS
- ------
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 3,582,158 0 0 0 0 0 3,582,148
----------- ------------ ----------- ---------- ---------- ---------- ---------- ------------ ------------
Net utility
plant $ 0 $ 0 $12,727,328 $ 0 $ 0 $ 0 $ 0 $ 0 $ 12,727,328
OTHER PHYSICAL
PROPERTY, net 1,271 247,555 945,833 4,238,313 0 286,537 2,121,167 0 7,840,676
----------- ------------ ----------- ---------- ---------- ---------- ---------- ------------ ------------
Total plant &
prop. in serv. $ 1,271 $ 247,555 $13,673,161 $4,238,313 $ 0 $ 286,537 $2,121,167 $ 0 $ 20,568,004
----------- ------------ ----------- ---------- ---------- ---------- ---------- ------------ ------------
CURRENT ASSETS:
Cash and temp.
investment $ 235,116 $ 9,642 $ (13,291) $ 322 $ (2,720) $ 38,027 $ 4,105 $ 0 $ 271,201
Accounts rec. 13,395,750 0 71,444 0 0 242,979 347,652 0 14,057,825
Accts. rec.
affiliates 3,912,617 0 0 0 0 0 0 0 3,912,617
Intercompany
accts. rec. 0 35,064,536 0 562,559 0 2,635,909 1,799,754 (39,962,758) 0
Reserve for
doubtful
accts. (225,000) 0 0 0 0 (36,515) 0 0 (261,515)
Unbilled rev. 58,651,191 0 0 0 0 0 0 0 58,651,191
Mater. &
supplies 0 0 0 0 0 0 0 0 0
Gas in
underground
storage 7,985,110 0 0 0 0 0 0 0 7,985,110
Prepaid exp. 85,931 16,378 0 0 0 828 19,949 0 123,086
Margin deposits 7,386,445 0 0 0 0 0 0 0 7,386,445
Misc. curr.
assets 0 0 0 0 0 0 0 0 0
----------- ------------ ----------- ---------- ---------- ---------- ---------- ------------ ------------
Total curr.
assets $91,427,160 $ 35,090,556 $ 58,153 $ 462,881 $ (2,720) $2,881,228 $2,171,460 $(39,962,758) $ 92,125,960
----------- ------------ ----------- ---------- ---------- ---------- ---------- ------------ ------------
INVESTMENTS IN
SUBSIDIARIES $ 0 $(13,709,154) $ 0 $ 0 $ 0 $ 0 $ 0 $ 13,709,154 $ 0
----------- ------------ ----------- ---------- ---------- ---------- ---------- ------------ ------------
DEFERRED
CHARGES
AND OTHER
ASSETS:
Advances to
equity
investees 0 0 0 0 5,062,000 0 0 0 5,062,000
Other 0 0 50,064 244 93,838 0 0 0 144,146
----------- ------------ ----------- ---------- ---------- ---------- ---------- ------------ ------------
Total deferred
charges &
other assets $ 0 $ 0 $ 50,064 $ 244 $5,155,838 $ 0 $ 0 $ 0 $ 5,206,146
----------- ------------ ----------- ---------- ---------- ---------- ---------- ------------ ------------
TOTAL ASSETS $91,428,431 $ 21,628,957 $13,781,378 $4,701,438 $5,153,118 $3,167,765 $4,292,627 $(26,253,604) $117,900,110
=========== ============ =========== ========== ========== ========== ========== ============ ============
</TABLE>
<PAGE>
<TABLE>
SOUTHEASTERN MICHIGAN GAS ENTERPRISES, INC.
CONSOLIDATED AND CONSOLIDATING BALANCE SHEET
DECEMBER 1996
(Unaudited Statement)
<CAPTION>
LOCAL DISTRIBUTION COMPANIES
STOCKHOLDERS' INVESTMENT --------------------------------------- SEMCO
AND LIABILITIES: 1996 ELIM. PARENT SEMGC BCGC MIGC ENERGY
- ------------------------ ------------ ------------- ------------ ------------ ----------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
COMMON STOCK EQUITY:
Common stock, par $1 $ 12,400,331 $ (7,929,130) $ 12,400,331 $ 7,477,030 $ 0 $ 100 $ 452,000
Capital surplus 79,488,420 (74,305,324) 79,632,812 12,550,986 26,599,518 30,919,186 4,091,242
Retained earnings (1,507,157) (13,996,548) (1,507,157) 21,473,198 (9,464,198) 14,702,882 (12,715,334)
------------ ------------- ------------ ------------ ----------- ------------ ------------
$ 90,381,594 $ (96,231,002) $ 90,525,986 $ 41,501,214 $17,135,320 $ 45,622,168 $ (8,172,092)
------------ ------------- ------------ ------------ ----------- ------------ ------------
Preferred stock, par $1 $ 6,751 $ 0 $ 6,751 $ 0 $ 0 $ 0 $ 0
Premium on preferred 162,024 0 162,024 0 0 0 0
------------ ------------- ------------ ------------ ----------- ------------ ------------
Cumulative Conv. Preferred
Equity $ 168,775 $ 0 $ 168,775 $ 0 $ 0 $ 0 $ 0
------------ ------------- ------------ ------------ ----------- ------------ ------------
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
------------ ------------- ------------ ------------ ----------- ------------ ------------
Cumul. Preferred Stock of SEMGC $ 3,100,000 $ 0 $ 0 $ 3,100,000 $ 0 $ 0 $ 0
------------ ------------- ------------ ------------ ----------- ------------ ------------
LONG TERM DEBT:
Long-term debt $103,573,000 $ (54,000,000) $ 88,573,000 $ 23,000,000 $15,000,000 $ 31,000,000 $ 0
Long term debt-ESOT 0 0 0 0 0 0 0
Capital lease obligation 4,539,279 0 76,710 2,318,401 809,148 1,302,623 32,397
------------ ------------- ------------ ------------ ----------- ------------ ------------
$108,112,279 $ (54,000,000) $ 88,649,710 $ 25,318,401 $15,809,148 $ 32,302,623 $ 32,397
------------ ------------- ------------ ------------ ----------- ------------ ------------
Total Capitalization $201,762,648 $(150,231,002) $179,344,471 $ 69,919,615 $32,944,468 $ 77,924,791 $ (8,139,695)
------------ ------------- ------------ ------------ ----------- ------------ ------------
CURRENT LIABILITIES:
Cur. Mat. of Long-term debt $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
Notes Payable Nonaffiliates 91,100,000 0 91,100,000 0 0 0 0
Notes Payable Affililiates 0 (106,403,778) 0 29,432,373 22,515,115 24,631,290 29,825,000
Accounts Payable Nonaffiliates 91,361,502 (349,131) 953,085 11,081,897 2,169,952 10,213,967 67,291,732
Accounts Payable Affiliates 0 (4,478,859) 0 2,202,437 1,704,657 5,523 566,242
Customer Advance Payments 5,612,276 0 0 2,889,252 609,886 2,113,138 0
General Taxes Accrued 827,659 0 5,092 145,255 10,103 105,562 561,647
Income Taxes Accrued (585,070) 0 (4,581,214) 1,932,568 860,764 1,339,414 (136,602)
Interest accrued 1,271,590 0 1,271,590 0 0 0 0
Amounts Payable to Customers 0 0 0 0 0 0 0
Accum. Deferred FIT - Current (364,395) 0 (58,085) 48,103 33,630 (388,043) 0
GCR, liability 0 0 0 0 0 0 0
Gas costs 890,255 0 0 328,117 44,691 517,447 0
Other current liabilities 6,107,443 0 506,372 2,396,605 896,772 903,015 1,404,679
------------ ------------- ------------ ------------ ----------- ------------ ------------
Total Current Liabilities $196,221,260 $(111,231,768) $ 89,196,840 $ 50,456,607 $28,845,570 $ 39,441,313 $ 99,512,698
------------ ------------- ------------ ------------ ----------- ------------ ------------
DEFERRED CREDITS:
Accum. deferred FIT - Deferred $ 10,112,672 $ 0 $ (202,409) $ 4,643,163 $ 5,634,415 $ 6,894,115 $ (6,856,612)
Unamortized ITC 2,781,829 0 0 1,859,335 45,601 876,893 0
Customer adv. for construction 8,621,223 0 0 5,853,040 267,501 2,500,682 0
Deferred gas costs 0 0 0 0 0 0 0
Regulatory, liability 4,875,181 0 0 3,567,060 1,308,121 0 0
Other 53,540,559 0 1,131,363 9,090,165 2,796,342 7,138,970 33,383,719
------------ ------------- ------------ ------------ ----------- ------------ ------------
$ 79,931,464 $ 0 $ 928,954 $ 25,012,763 $10,051,980 $ 17,410,660 $ 26,527,107
------------ ------------- ------------ ------------ ----------- ------------ ------------
TOTAL CAPITALIZATION AND
LIABILITIES $477,915,372 $(261,462,770) $269,470,265 $145,388,985 $71,842,018 $134,776,764 $117,900,110
============ ============= ============ ============ =========== ============ ============
</TABLE>
<PAGE>
<TABLE>
SOUTHEASTERN MICHIGAN GAS ENTERPRISES, INC.
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1996
(Unaudited Statement)
<CAPTION>
STOCKHOLDERS' INVESTMENT AND LIABILITIES BCGC PUSH-DOWN BCGC MIGC PUSH-DOWN MIGC
- ---------------------------------------- ----------- ------------ ----------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
COMMON STOCK EQUITY:
Common stock, par $1 $ 2,932 $ (2,932) $ 0 $ 100 $ 0 $ 100
Capital surplus 4,991,102 21,608,416 26,599,518 29,432,868 1,486,318 30,919,186
Retained earnings 21,984,009 (31,448,207) (9,464,198) 16,189,200 (1,486,318) 14,702,882
----------- ------------ ----------- ------------ ------------ ------------
$26,978,043 $ (9,842,723) $17,135,320 $ 45,622,168 $ 0 $ 45,622,168
----------- ------------ ----------- ------------ ------------ ------------
LONG TERM DEBT:
Long-term debt $ 0 $ 15,000,000 $15,000,000 $ 31,000,000 $ 0 $ 31,000,000
Long term debt-ESOT 0 0 0 0 0 0
Capital lease obligation 809,148 0 809,148 1,302,623 0 1,302,623
----------- ------------ ----------- ------------ ------------ ------------
$ 809,148 $ 15,000,000 $15,809,148 $ 32,302,623 $ 0 $ 32,302,623
----------- ------------ ----------- ------------ ------------ ------------
Total Capitalization $27,787,191 $ 5,157,277 $32,944,468 $ 77,924,791 $ 0 $ 77,924,791
----------- ------------ ----------- ------------ ------------ ------------
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 22,515,115 0 22,515,115 24,631,290 0 24,631,290
Account payable nonaffiliates 2,169,952 0 2,169,952 10,213,967 0 10,213,967
Accounts payable affililates 1,704,657 0 1,704,657 5,523 0 5,523
Customer advance payments 609,886 0 609,886 2,113,138 0 2,113,138
General taxes accrued 10,103 0 10,103 105,562 0 105,562
Income taxes accrued 860,764 0 860,764 1,339,414 0 1,339,414
Interest accrued 0 0 0 0 0 0
Amounts payable to customers 0 0 0 0 0 0
Accumulated deferred FIT - current (177,693) 211,323 33,630 (388,043) 0 (388,043)
GCR, liability 0 0 0 0 0 0
Gas costs 44,691 0 44,691 517,447 0 517,447
Other current liabilities 896,772 0 896,772 903,015 0 903,015
----------- ------------ ----------- ------------ ------------ ------------
Total current liabilities $28,634,247 $ 211,323 $28,845,570 $ 39,441,313 $ 0 $ 39,441,313
----------- ------------ ----------- ------------ ------------ ------------
DEFERRED CREDITS:
Accumulated deferred FIT - Deferred $ 5,968,607 $ (334,192) $ 5,634,415 $ 6,894,115 $ 0 $ 6,894,115
Unamortized ITC 680,613 (635,012) 45,601 876,893 0 876,893
Customer advances for construction 267,501 0 267,501 2,500,682 0 2,500,682
Deferred gas costs 0 0 0 0 0 0
Regulatory, liability 1,308,121 0 1,308,121 0 0 0
Other 3,943,915 (1,147,573) 2,796,342 7,138,970 0 7,138,970
----------- ------------ ----------- ------------ ------------ ------------
$12,168,757 $ (2,116,777) $10,051,980 $ 17,410,660 $ 0 $ 17,410,660
----------- ------------ ----------- ------------ ------------ ------------
TOTAL CAPITALIZATION AND LIABILITIES $68,590,195 $ 3,251,823 $71,842,018 $134,776,764 $ 0 $134,776,764
=========== ============ =========== ============ ============ ============
</TABLE>
<PAGE>
<TABLE>
SEMCO ENERGY SERVICES, INC.
CONSOLIDATED AND CONSOLIDATING BALANCE SHEET
DECEMBER 1996
(Unaudited Statement)
<CAPTION>
STOCKHOLDERS' INVESTMENT
AND LIABILITIES:
- ------------------------
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
Cap. surplus 0 1,500,000 1,101,603 0 0 358,296 2,232,946 (1,101,604) 4,091,241
Retained earn. 2,159,585 (15,637,500) 5,404,488 3,552,343 (27,062,593) 2,048,208 2,006,378 14,813,758 (12,715,333)
----------- ------------ ----------- ---------- ------------ ---------- ---------- ------------ ------------
Total stock-
holders
invest. $ 2,159,585 $(14,136,500) $ 6,507,091 $3,553,343 $(27,061,593) $2,656,504 $4,440,324 $ 13,709,154 $ (8,172,092)
----------- ------------ ----------- ---------- ------------ ---------- ---------- ------------ ------------
LONG TERM DEBT $ 0 $ 32,396 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 32,396
----------- ------------ ----------- ---------- ------------ ---------- ---------- ------------ ------------
Total capital. $ 2,159,585 $(14,104,104) $ 6,507,091 $3,553,343 $(27,061,593) $2,656,504 $4,440,324 $ 13,709,154 $ (8,139,696)
----------- ------------ ----------- ---------- ------------ ---------- ---------- ------------ ------------
CURRENT LIAB.
Notes payable
to banks $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
Notes payable
to affil. 0 29,825,000 0 0 0 0 0 0 29,825,000
Accts. payable 67,282,232 6,529 0 0 0 25 2,946 0 67,291,732
Accts. payable
to affiliates 70,707 427,008 66,643 0 0 1,074 811 0 566,243
Accounts/notes
payable
interco. 20,008,906 4,898,223 4,775,816 0 10,279,813 0 0 (39,962,758) 0
Accrued gen.
taxes 302,550 11,055 228,935 0 82 3,920 15,103 0 561,645
Accrued inc.
taxes 738,865 (142,055) 542,867 463,070 (2,221,626) 250,485 231,793 0 (136,601)
Accrued int. 0 0 0 0 0 0 0 0 0
Accum. defer.
income taxes 0 0 0 0 0 0 0 0 0
Other cur.
liab. 865,586 534,520 0 0 4,573 0 0 0 1,404,679
----------- ------------ ----------- ---------- ------------ ---------- ---------- ------------ ------------
Total cur.
liab. $89,268,846 $ 35,560,280 $ 5,614,261 $ 463,070 $ 8,062,842 $ 255,504 $ 250,653 $(39,952,758) $ 99,512,698
----------- ------------ ----------- ---------- ------------ ---------- ---------- ------------ ------------
DEFERRED AND
OTHER CREDITS:
Accum. defer.
income taxes $ 0 $ (268,939) $ 1,660,026 $ 685,025 $ (8,790,131) $ 255,757 $ (398,350) $ 0 $ (6,856,612)
Other 0 441,720 0 0 32,942,000 0 0 0 33,383,720
----------- ------------ ----------- ---------- ------------ ---------- ---------- ------------ ------------
Total defer.
& other
credits $ 0 $ 172,781 $ 1,660,026 $ 685,025 $ 24,151,869 $ 255,757 $ (398,350) $ 0 $ 26,527,108
----------- ------------ ----------- ---------- ------------ ---------- ---------- ------------ ------------
TOTAL STOCK-
HOLDERS
INVEST. AND
LIABILITIES $91,428,431 $ 21,628,957 $13,781,378 $4,701,438 $ 5,153,118 $3,167,765 $4,292,627 $(26,253,604) $117,900,110
=========== ============ =========== ========== ============ ========== ========== ============ ============
</TABLE>
<PAGE>
<TABLE>
SOUTHEASTERN MICHIGAN GAS ENTERPRISES, INC.
CONSOLIDATED AND CONSOLIDATING STATEMENT OF RETAINED EARNINGS
DECEMBER 31, 1996
(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 $17,127,611 $(31,866,118) $17,127,611 $20,566,009 $(8,881,774) $12,437,273 $ 7,744,610
Year to Date Net Income (8,965,098) 8,119,569 (8,965,097) 5,307,189 3,017,576 4,015,609 (20,459,944)
Cash Dividends on Common (9,669,671) 9,750,000 (9,669,671) (4,400,000) (3,600,000) (1,750,000) 0
----------- ------------ ----------- ----------- ----------- ----------- ------------
End of Year To Date $(1,507,158) $(13,996,549) $(1,507,157) $21,473,198 $(9,464,198) $14,702,882 $(12,715,334)
=========== ============ =========== =========== =========== =========== ============
</TABLE>
<PAGE>
<TABLE>
SEMCO ENERGY SERVICES, INC.
CONSOLIDATED AND CONSOLIDATING STATEMENT OF RETAINED EARNINGS
DECEMBER 31, 1996
(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 $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
Additions:
Net income (loss) 1,069,293 151,197 712,223 507,433 (23,034,932) 58,028 76,816 0 (20,459,942)
Deductions: 0 0 0 0 0 0 0 0 0
---------- ---------- ---------- ---------- ------------ ---------- ---------- ----------- ------------
End of Year To Date $2,159,585 $4,973,640 $5,404,488 $3,552,343 $(27,062,593) $2,048,208 $2,006,378 $(5,797,382) $(12,715,333)
========== ========== ========== ========== ============ ========== ========== =========== ============
</TABLE>
<PAGE>
<TABLE>
SOUTHEASTERN MICHIGAN GAS ENTERPRISES, INC.
CONSOLIDATED AND CONSOLIDATING STATEMENT OF CAPITAL SURPLUS
FOR THE YEAR ENDED DECEMBER 31, 1996
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 $80,546,028 $(73,475,189) $80,690,420 $12,550,986 $25,769,383 $30,919,186 $4,091,242
----------- ------------ ----------- ----------- ----------- ----------- ----------
ADD -
Excess of common stock issued in
connection with dividend
reinvestment plan over par value $ 4,851,614 $ 0 $ 4,851,614 $ 0 $ 0 $ 0 $ 0
Excess of common stock issued in
connection with conversion of
preferred shares over par value 2,800 0 2,800 0 0 0 0
----------- ------------ ----------- ----------- ----------- ----------- ----------
$ 4,854,414 $ 0 $ 4,854,414 $ 0 $ 0 $ 0 $ 0
----------- ------------ ----------- ----------- ----------- ----------- ----------
DEDUCT -
Issuance of 5% stock dividend $ 589,897 $ 0 $ 589,897 $ 0 $ 0 $ 0 $ 0
Excess of common stock repurchased
over par value 5,309,568 0 5,309,568 0 0 0 0
Stock registration costs 12,557 0 12,557 0 0 0 0
----------- ------------ ----------- ----------- ----------- ----------- ----------
$ 5,912,022 $ 0 $ 5,912,022 $ 0 $ 0 $ 0 $ 0
----------- ------------ ----------- ----------- ----------- ----------- ----------
CAPITAL SURPLUS - END OF YEAR $79,488,420 $(73,475,189) $79,632,812 $12,550,986 $25,769,383 $30,919,186 $4,091,242
=========== ============ =========== =========== =========== =========== ==========
</TABLE>
