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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) OCTOBER 21, 1994
MCN CORPORATION
(Exact name of registrant as specified in its charter)
MICHIGAN 1-10070 38-2820658
State of Incorporation (Commission File (I.R.S. Employer
Number) Identification No.)
500 GRISWOLD STREET, DETROIT, MICHIGAN 48226
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(313) 256-5500
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ITEM 5. OTHER EVENTS
On October 19, 1994, MCN Corporation issued the following press
release:
MCN CORPORATION REPORTS SEASONAL THIRD QUARTER LOSS
DETROIT, October 19, 1994 -- MCN Corporation (NYSE: MCN) today reported a
seasonal third quarter loss of $15.6 millon or $.52 a share. In last year's
third quarter, MCN lost $11.2 million or $.38 a share. As expected, this year's
third quarter loss was greater than last year's because of the timing, on a
quarterly basis, of certain increased operating expenses and the revenues
generated from a January 1994 rate increase, which was intended to recover such
expenses.
Chairman, President and Chief Executive Officer Alfred R. Glancy III
said, "Given the seasonal decline in demand for natural gas in our utility
business during the summer, we typically experience a third quarter loss.
However," he said, "the continued excellent performance of our nonutility
businesses helped offset some of this loss. As anticipated, these results keep
us on track for another year of record financial results in 1994."
For the nine months ended September 30, MCN earned $57 million or $1.92
a share compared to $44.8 million or $1.53 a share for the same period last
year. For the twelve months ended September 30, MCN earned $85.1 millon or
$2.87 a share compared to $58.5 million or $2.01 a share for the prior
twelve-month period. Earnings for the nine- and twelve-month periods were
higher primarily because of the effect of colder weather on utility sales
earlier in the year and increased nonutility earnings from gas production and
marketing operations.
UTILITY SERVICES
In outlining the performance of the company's two major business segments,
Glancy said MCN's utility services lost $19.5 million or $.65 a share during
the third quarter compared to a loss of $13 million or $.44 a share during the
third quarter of 1993.
Higher third quarter operating expenses, primarily postretirement
health care costs and depreciation, exceeded additional revenues from the
January 1994 MichCon rate order. By comparison, the rate order resulted in
higher first quarter earnings since additional revenues are realized on a
volumetric basis, the bulk of which occur in the first and fourth quarters.
Colder weather boosted earnings for utility services for the nine months ended
September 30 to $44.8 million or $1.51 a share compared to $41.9 million or
$1.43 a share during the same period in 1993. Likewise, for the twelve months
ended September 30, utility services earned $65.5 million or $2.21 a share
versus $52.9 million or $1.82 a share during the comparable prior
twelve-month period.
NONUTILITY SERVICES
Earnings from MCN's nonutility businesses more than doubled to $3.9 million or
$.13 a share during the third quarter from $1.8 million or $.06 a share in the
third quarter of 1993.
Gas exploration and production (E&P) operations produced 4.8 billion cubic
feet (Bcf) in the third quarter of 1994, boosting earnings. By comparison,
MCN's E&P program, launched in late 1992, produced approximately 1 Bcf of
natural gas during last year's third quarter. Through September,
year-to-date natural gas production was 10.9 Bcf.
E&P, gas marketing and computer operations services contributed to
higher nine- and twelve-month results. For the nine months ended September 30,
nonutility services earned $12.3 million or $.41 a share compared to $2.9
million or $.10 a share during the nine months ended last September 30. For the
twelve months ended September 30, nonutility services earned $19.6 million or
$.66 a share versus $5.6 million or $.19 a share during the similar
twelve-months ended period.
Glancy concluded, "With the seasonal increase in demand for natural gas
in the final quarter of the year, we anticipate we will produce record results
for 1994."
MCN Corporation is a $1.5 billion (revenues) holding company for
Michigan Consolidated Gas Company (MichCon), a natural gas distribution and
transmission company serving 1.1 million customers in more than 500 communities
throughout Michigan; for Citizens Gas Fuel Company, a Michigan natural gas
utility; and for MCN Investment Corporation, which owns subsidiaries involved
in gas exploration and production, marketing, cogeneration, gas storage,
gathering and processing, and computer operations services.
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MCN CORPORATION AND SUBSIDIARIES
NEWS RELEASE STATISTICS (Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended Twelve Months Ended
September 30, September 30, September 30,
------------------ ----------------- -------------------
1994 1993 1994 1993 1994 1993
---- ---- ---- ---- ---- ----
(Thousands Except Per Share Amounts)
<S> <C> <C> <C> <C> <C> <C>
Operating Revenues . . . . . . . . . . . . . . $204,389 $182,732 $1,133,713 $1,031,874 $1,581,493 $1,484,527
Operating Expenses . . . . . . . . . . . . . . 220,994 192,136 1,024,704 943,644 1,416,828 1,365,146
-------- -------- ---------- ---------- ---------- ----------
Operating Income (Loss)
Utility Services . . . . . . . . . . . . . . (21,368) (12,498) 93,725 83,836 137,593 109,799
Nonutility Services:
Gas Services:
Gas Marketing & Cogeneration . . . . . . (225) 380 4,173 (870) 10,943 1,535
Gas Gathering & Processing . . . . . . . 1,891 1,862 5,949 5,914 8,950 8,672
Exploration & Production . . . . . . . . 3,563 947 6,805 821 8,098 834
Computer Operations Services . . . . . . . 1,645 1,885 4,470 3,073 6,589 3,849
Corporate & Other . . . . . . . . . . . . (2,111) (1,980) (6,113) (4,544) (7,508) (5,308)
-------- -------- ---------- ---------- ---------- ----------
4,763 3,094 15,284 4,394 27,072 9,582
-------- -------- ---------- ---------- ---------- ----------
Total . . . . . . . . . . . . . . . . . . . (16,605) (9,404) 109,009 88,230 164,665 119,381
-------- -------- ---------- ---------- ---------- ----------
Equity in Earnings (Loss) of Joint Ventures
Gas Storage . . . . . . . . . . . . . . . . 1,817 2,907 6,009 6,949 7,788 6,851
Gas Marketing & Cogeneration . . . . . . . . (143) (270) (961) (1,082) (1,270) (1,484)
Gas Gathering & Processing . . . . . . . . . 399 409 1,356 1,596 1,881 1,735
Other . . . . . . . . . . . . . . . . . . . (173) (361) (716) (795) (1,669) (1,042)
-------- -------- ---------- ---------- ---------- ----------
Total . . . . . . . . . . . . . . . . . . 1,900 2,685 5,688 6,668 6,730 6,060
-------- -------- ---------- ---------- ---------- ----------
Other Income and (Deductions) . . . . . . . . (12,693) (9,969) (34,044) (26,961) (49,948) (38,110)
-------- -------- ---------- ---------- ---------- ----------
Income (Loss) Before Income Taxes . . . . . . (27,398) (16,688) 80,653 67,937 121,447 87,331
Income Tax (Benefit) Provision . . . . . . . . (11,828) (5,468) 23,624 23,175 36,390 28,860
-------- -------- ---------- ---------- ---------- ----------
Net Income (Loss) . . . . . . . . . . . . . . $(15,570) $(11,220) $ 57,029 $ 44,762 $ 85,057 $ 58,471
======== ======== ========== ========== ========== ==========
Earnings (Loss) Per Share
Utility Services . . . . . . . . . . . . . . $ (.65) $ (.44) $ 1.51 $ 1.43 $ 2.21 $ 1.82
Nonutility Services . . . . . . . . . . . . .13 .06 .41 .10 .66 .19
-------- -------- ---------- ---------- ---------- ----------
Total . . . . . . . . . . . . . . . . . . $ (.52) $ (.38) $ 1.92 $ 1.53 $ 2.87 $ 2.01
======== ======== ========== ========== ========== ==========
Average Common Shares Outstanding . . . . . . 29,746 29,374 29,647 29,277 29,598 29,102
======== ======== ========== ========== ========== ==========
Dividends Paid Per Share . . . . . . . . . . . $ .43 $ .42 $ 1.29 $ 1.26 $ 1.72 $ 1.68
======== ======== ========== ========== ========== ==========
Gas Markets (MMcf)
Utility Services:
Gas Sales . . . . . . . . . . . . . . . . 13,767 16,139 148,176 139,940 213,608 205,302
End User Transportation . . . . . . . . . 28,011 24,226 103,486 92,590 139,539 127,731
Intermediate Transportation . . . . . . . 58,364 70,278 232,404 206,221 307,299 266,384
-------- -------- ---------- ---------- ---------- ----------
Total . . . . . . . . . . . . . . . . . 100,142 110,643 484,066 438,751 660,446 599,417
-------- -------- ---------- ---------- ---------- ----------
Nonutility Services:
Gas Sales . . . . . . . . . . . . . . . . 35,270 22,144 109,054 89,955 141,948 123,443
Transportation . . . . . . . . . . . . . . 4,433 5,584 14,788 16,529 20,099 22,471
-------- -------- ---------- ---------- ---------- ----------
Total . . . . . . . . . . . . . . . . . 39,703 27,728 123,842 106,484 162,047 145,914
-------- -------- ---------- ---------- ---------- ----------
Total Utility and Nonutility . . . . . . . . 139,845 138,371 607,908 545,235 822,493 745,331
-------- -------- ---------- ---------- ---------- ----------
Less Intercompany Transactions . . . . . . . 791 4,425 9,809 14,643 12,572 18,736
-------- -------- ---------- ---------- ---------- ----------
Total . . . . . . . . . . . . . . . . . . . 139,054 133,946 598,099 530,592 809,921 726,595
======== ======== ========== ========== ========== ==========
Nonutility Gas Production (MMcf) . . . . . . . 4,798 748 10,892 986 12,213 999
======== ======== ========== ========== ========== ==========
Effect of Weather
Degree Days . . . . . . . . . . . . . . . . 82 202 4,537 4,342 6,870 6,659
Percent Colder (Warmer) than Normal . . . . N/A N/A 2.6% (2.5)% 1.2% (2.4)%
Increase (Decrease) from Normal in:
Gas Markets (MMcf) . . . . . . . . . . . . (833) 887 5,581 (3,260) 4,513 (5,240)
Net Income . . . . . . . . . . . . . . . . $ (805) $ 788 $ 5,051 $ (2,784) $ 4,139 $ (4,491)
Earnings Per Share . . . . . . . . . . . . $ (.03) $ .03 $ .17 $ (.10) $ .14 $ (.15)
</TABLE>
MMcf -- million cubic feet
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MCN CORPORATION
By /s/ Daniel L. Schiffer
------------------------------
Daniel L. Schiffer
Vice President, General Counsel
and Secretary
Date: October 21, 1994
