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Previous: SMITH BARNEY SHEARSON UNIT TRUSTS HIGH YIELD TAXABLE SER 15, 24F-2NT, 1994-02-24 |
Next: SMITH BARNEY SHEARSON UNIT TRUSTS HIGH YIELD TAXABLE SER 16, 24F-2NT, 1994-02-24 |
<PAGE> 1
File No: 69-352
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------
FORM U-3A-2
STATEMENT BY HOLDING COMPANY CLAIMING
EXEMPTION UNDER RULE U-2 FROM THE PROVISIONS
OF THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
FOR THE YEAR ENDED DECEMBER 31, 1993
-----------
MCN CORPORATION
(NAME OF COMPANY)
hereby files with the Securities and Exchange Commission, pursuant to Rule U-2,
its statement claiming exemption as a holding company from the provisions of
the Public Utility Holding Company Act of 1935. In support of such claim for
exemption, the following information is submitted:
I. NATURE OF BUSINESS OF CLAIMANT AND EVERY SUBSIDIARY THEREOF
MCN CORPORATION: MCN Corporation (MCN or the Corporation) is
a holding company organized under the laws of the state of Michigan
and has its principal executive offices at 500 Griswold Street,
Detroit, Michigan 48226. The Corporation owns directly all of the
outstanding common stock of Michigan Consolidated Gas Company
(MichCon), Citizens Gas Fuel Company (Citizens), and MCN Investment
Corporation (MCN Investment or MCNIC). MCN is organized along two
major business lines, utility and nonutility services. Except where
otherwise indicated, the companies set forth below are Michigan
corporations located at 500 Griswold Street, Detroit, Michigan 48226.
UTILITY SERVICES
------------------
A. MICHIGAN CONSOLIDATED GAS COMPANY: MichCon is a public
utility engaged in the distribution, transmission and storage of
natural gas in the state of Michigan. MichCon was organized in 1898,
and serves more than 1.1 million customers in the Detroit, Grand
Rapids, Ann Arbor, Traverse City and Muskegon metropolitan areas and
in various other communities throughout the state of Michigan.
MichCon conducts substantially all of its business in the state of
Michigan and is subject to the jurisdiction of the Michigan Public
Service Commission (MPSC) as to various phases of its operations,
including utility rates, service and the issuance of securities.
Except where otherwise indicated, the companies set forth below are
wholly owned subsidiaries of MichCon.
1. Michigan Consolidated Homes Limited Dividend Housing
Corporation, a Delaware corporation, operates a 130-unit, low
and moderate income housing project in Detroit, Michigan.
2. MichCon Development Corporation, through its various
partnership arrangements, is engaged in the design,
construction and management of Harbortown, a residential and
small commercial development that is being constructed on a 50
acre parcel along the Detroit River in Detroit, Michigan.
3. Blue Lake Holdings, Inc., holds a 50% interest in a partnership
that has converted a depleted natural gas field in northern
Michigan into a 42 Bcf natural gas storage field which it now
operates. MichCon owns 50% of Blue Lake Holdings, Inc., the
other half is owned by Storage Development Company, a
subsidiary of MCN Investment.
4. Kalkaska Gas Storage Limited Partnership, a Michigan
partnership in which MichCon has a 31% interest, holds a 53.5%
interest in the Cold Springs Gas Storage Limited Partnership,
which intends to develop and operate a gas storage field in
northern Michigan with 15 Bcf of working capacity.
<PAGE> 2
5. MichCon Trading Company purchased, sold, and arranged for the
transportation of gas for customers. On June 30, 1993, MCN
consolidated its gas marketing activities by transferring the
operations of MichCon Trading Company to subsidiaries of MCN
Investment.
6. ENCON Engineering, Inc., (ENCON) offered engineering services
to customers involved in natural gas related construction
projects. The operations of ENCON were discontinued as of
December 31, 1993.
B. CITIZENS GAS FUEL COMPANY: Citizens is a public utility
engaged in the distribution of natural gas. Citizens was organized in
1951 and, with its predecessors, has been in business for over 130
years. Citizens serves approximately 12,000 residential, commercial,
and industrial customers in and around Adrian, Michigan. Citizens'
principal executive offices are located at 127 N. Main Street, Adrian,
Michigan 49221. Citizens conducts all of its business in the state of
Michigan and its rates are set by the Adrian Gas Rate Commission.
Other various phases of its operations are subject to the jurisdiction
of the MPSC.
NONUTILITY SERVICES
---------------------
C. MCN INVESTMENT CORPORATION: MCN Investment, organized in
1986, is the holding company for MCN's various nonutility businesses.
These businesses are involved in natural gas services, computer
operations services and gas technology. Except where otherwise
indicated, the companies set forth below are wholly owned subsidiaries
of MCN Investment.
Gas Services
--------------
The gas services segment includes gas marketing and
cogeneration, gas gathering and processing, exploration and production
and gas storage.
Gas Marketing and Cogeneration
1. MCN's Gas Marketing and Cogeneration businesses pursue
gas-related opportunities throughout the United States and
Canada, including marketing natural gas to utilities and other
large volume customers and investing in natural gas-related
projects. Prior to January 1, 1994, MCN's Gas Marketing and
Cogeneration operations were organized under CoEnergy
Ventures, Inc., (CVI) as a direct subsidiary of MCN Investment.
Effective January 1, 1994, MCN reorganized these operations
such that the companies listed below, previously direct
subsidiaries of CoEnergy Ventures, Inc., became direct
subsidiaries of MCN Investment. CoEnergy Ventures, Inc., then
became a direct subsidiary of Cogen Development Company.
a. CoEnergy Trading Company is engaged in the purchase
and sale of natural gas to large-volume gas users in
Michigan, the Midwest, the eastern United States and
Canada.
b. CoEnergy Canadian Holdings, Ltd., a New Brunswick
corporation located at Brunswick House, 10th Floor,
44 Chipman Hill, Saint John, New Brunswick E2L 4S6,
holds a 40% interest in a Canadian partnership that
is engaged in the purchase and sale of natural gas
and pursues other gas-related opportunities in Canada
and the northeastern United States.
c. Cogen Development Company (Cogen) pursues
cogeneration-related opportunities throughout the
United States and Canada.
i. Ada Cogeneration Limited Partnership, a
Michigan partnership in which Cogen is a 99%
limited partner, owns and operates a 30
megawatt natural gas-fueled cogeneration
facility in western Michigan.
ii. Cogen also has a 50% interest in a joint
venture that will own, construct and operate
a 123 megawatt natural gas-fueled
cogeneration plant in western Michigan.
<PAGE> 3
Gas Gathering & Processing
d. Saginaw Bay Pipeline Company is the 66% general
partner in a partnership that operates a 126-mile
pipeline which transports natural gas and natural gas
liquids from reserves in east-central Michigan to
natural gas processing plants in northern Michigan.
e. Saginaw Bay Lateral Company is the 46% general
partner in a partnership which owns and operates
lateral pipelines serving the 126-mile pipeline
described above.
f. Otsego Holdings, Inc., is a 40% general partner in two
gas processing facilities, located in northern
Michigan, that remove carbon dioxide from natural
gas.
g. Westside Pipeline Company owns and operates a 6 mile
pipeline which provides transportation services to
Citizens.
Exploration & Production
h. Supply Development Group, Inc., through the
subsidiaries listed below, is engaged in natural
gas exploration, development, and production.
Efforts have primarily been focused on projects in
the Antrim Shale formation located in northern
Michigan.
i. Elmira Antrim Company
ii. Green River Antrim Company
iii. Warner Antrim Company
iv. Green Oak Development Company
v. MGS Development Company
vi. Southwest Gas Supply, Inc.
vii. GeoTrend Exploration, Inc.
Gas Storage
i. Storage Development Company develops and provides gas
storage services through joint ventures and strategic
partnerships.
i. South Romeo Gas Storage Company, a Michigan
partnership in which Storage Development
Company has a 50% interest, owns and operates
a 10 Bcf storage field in southeast Michigan
which provides storage services to MCN's
nonutility gas marketing operations.
ii. W-10 Holdings, Inc., holds a 40% interest in
a partnership that intends to develop and
operate a 42 Bcf storage field in
southeastern Michigan.
iii. Blue Lake Holdings, Inc. (See Utility
Services)
iv. The Orchards Golf Limited Partnership, a
Michigan partnership in which Storage
Development Company has a 50% interest,
located at 2211 E. Jefferson, Suite 680,
Detroit, Michigan 48207, developed, owns
and operates a residential community and
golf course in southeastern Michigan above
the South Romeo gas storage field.
Computer Operations Services
------------------------------
2. The Genix Group, Inc., through the subsidiaries listed below,
provides data processing, computer operations management, data
telecommunications design and management, large-scale
electronic printing and mailing, and total business process
solution services.
a. Genix Corporation, a Delaware corporation, located in
Pittsburgh, Pennsylvania.
b. MCN Computer Services, Inc., located in Dearborn,
Michigan.
<PAGE> 4
Gas Technology
----------------
3. G-T Energy Concepts, Inc., developed a natural gas torch and
the related fueling modules which are adapted for use in metal
cutting, brazing and soldering. These fueling modules utilize
the patented adsorbed natural gas technology described below.
4. Combustion Concepts, Inc., is engaged in the development of
pressurized combustion technologies related to furnaces and
other applications.
5. Fuel Concepts, Inc., is involved in the development and
commercialization of low pressure natural gas storage and
related technologies. These research and development efforts
have pioneered and patented an adsorbed natural gas technology
which allows natural gas to be stored at one-sixth to
one-tenth the pressure of conventional methods.
Other
-------
6. Bridgewater Holdings, Inc., is a 33% limited partner in a
commercial real estate development located in Grand Rapids,
Michigan.
<PAGE> 5
II. PUBLIC UTILITY PROPERTIES
A. MichCon owns the following integrated distribution,
transmission, production and storage properties and facilities, all of
which properties are located in the state of Michigan.
At December 31, 1993, MichCon's distribution system included
14,680 miles of distribution mains, 1,021,739 service lines and
1,145,687 active meters. MichCon owns 2,615 miles of transmission and
production lines which deliver natural gas to the distribution
districts and to interconnect its storage fields with the sources of
supply and the market areas. MichCon's compressor facilities related
to transmission and production have a total rated capacity of 33,160
horsepower and 3,739 horsepower, respectively. Properties relating to
five underground storage fields consist principally of 477 gas storage
wells, 113 miles of field lines, dehydration plants and compressor
facilities with a total rated capacity of 71,000 horsepower. MichCon
also owns district office buildings, service buildings and gas
receiving and metering stations. MichCon occupies its principal
office building, portions of which are subleased, in Detroit and Grand
Rapids, Michigan under long-term leases.
B. Citizens owns the following properties, all of which are
located in Michigan.
At December 31, 1993, Citizens' distribution system included
352 miles of distribution mains, 11,824 service lines, and 12,543
active meters. Citizens owns all of its properties used in the
conduct of the utility business. Included is a two story office
building and a one story service center.
III. PUBLIC UTILITY DISTRIBUTION AND PURCHASE OF NATURAL GAS
A. During the year ended December 31, 1993, MichCon distributed
and purchased the following volumes of natural gas:
1. 201,765,000 Mcf of natural gas was distributed at retail
within the state of Michigan. Also, 128,409,000 Mcf of
natural gas was distributed at retail under transportation
contracts within the state of Michigan. In addition, MichCon
Trading Company had sales of 48,742,000 Mcf of natural gas
through the period ended June 30, 1993, a majority of which was
transported by MichCon to its end users. As noted earlier,
the operations of MichCon Trading Company were transferred to
subsidiaries of MCN Investment on June 30, 1993.
2. No volumes of natural gas were distributed at retail outside
the state of Michigan.
3. No volumes of natural gas were distributed at wholesale
outside the state of Michigan.
4. 105,219,000 Mcf of natural gas was purchased from interstate
U.S. pipelines, Canadian, and other suppliers outside of the
state of Michigan. These volumes were transported by
interstate pipeline suppliers to points of delivery within the
state of Michigan.
B. During the year ended December 31, 1993, Citizens distributed
and purchased the following volumes of natural gas:
1. 2,891,000 Mcf of natural gas was distributed at retail within
the state of Michigan. In addition, 714,000 Mcf of natural
gas was sold for resale to an affiliate and 233,000 Mcf of
natural gas was distributed under transportation contracts
within the state of Michigan.
2. No volumes of natural gas were distributed at retail outside
the state of Michigan.
3. No volumes of natural gas were distributed at wholesale
outside the state of Michigan.
4. 2,932,000 Mcf of natural gas was purchased from interstate
U.S. pipelines, affiliates and other suppliers outside of the
state of Michigan. These volumes were transported by an
interstate pipeline supplier to points of delivery within the
state of Michigan.
<PAGE> 6
EXHIBITS
Attached hereto as Exhibit A is the Corporation's unaudited
Consolidating Statement of Income for the year ended December 31, 1993 and
Consolidating Statement of Financial Position as of December 31, 1993.
<PAGE> 7
MCN Corporation
Consolidating Income Statement
(Thousands of Dollars)
For the Year Ended December 31, 1993
(Unaudited)
<TABLE>
<CAPTION>
Blue Lake MCNIC MCN
MCN MichCon Citizens Holdings Consolidated Eliminations Consolidated
----------- ---------- ----------- ----------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
OPERATING REVENUES
Gas sales $ - $1,075,856 $ 15,843 $ - $ 203,832 $ (32,760) $ 1,262,771
Transportation and storage - 100,134 287 - 11,981 (2,708) 109,694
Computer operations services
and other - 37,449 26 - 74,979 (15,340) 97,114
----------- ---------- ----------- ---------- ------------ ------------ ------------
Total operating revenues - 1,213,439 16,156 - 290,792 (50,808) 1,469,579
----------- ---------- ----------- ---------- ------------ ------------ ------------
OPERATING EXPENSES
Cost of gas - 685,679 9,314 - 185,733 (33,993) 846,733
Operation and maintenance (1,908) 270,106 3,353 1 79,900 (16,815) 334,637
Depreciation, depletion and
amortization 373 73,866 550 - 6,857 - 81,646
Property and other taxes 494 58,273 637 - 3,273 - 62,677
----------- ---------- ----------- ---------- ------------ ----------- ------------
Total operating expenses (1,041) 1,087,924 13,854 1 275,763 (50,808) 1,325,693
----------- ---------- ----------- ---------- ------------ ------------ ------------
OPERATING INCOME (LOSS) 1,041 125,515 2,302 (1) 15,029 - 143,886
----------- ---------- ----------- ---------- ------------ ------------ ------------
EQUITY IN EARNINGS (LOSS) OF
JOINT VENTURES - (78) - 7,667 121 - 7,710
----------- ---------- ----------- ---------- ------------ ------------ ------------
OTHER INCOME AND (DEDUCTIONS)
Equity in earnings of
subsidiaries 72,790 2,630 - - 2,584 (78,004) -
Interest income 1,057 4,205 168 - 967 (1,210) 5,187
Interest on long-term debt - (25,594) (103) - (3,092) - (28,789)
Other interest expense (1,786) (7,960) (2) (33) (1,371) 1,213 (9,939)
Dividends on preferred stock
of subsidiary - (727) - - - - (727)
Minority interest - - - - (3,331) 47 (3,284)
Other (572) (5,403) 53 - 612 (3) (5,313)
----------- ---------- ----------- ---------- ------------ ------------ ------------
Total other income and
(deductions) 71,489 (32,849) 116 (33) (3,631) (77,957) (42,865)
----------- ---------- ----------- ---------- ------------ ------------ ------------
INCOME BEFORE INCOME TAXES 72,530 92,588 2,418 7,633 11,519 (77,957) 108,731
INCOME TAX PROVISION (BENEFIT) (260) 30,939 852 2,467 1,943 - 35,941
----------- ---------- ----------- ---------- ------------ ------------ ------------
NET INCOME $ 72,790 $ 61,649 $ 1,566 $ 5,166 $ 9,576 $ (77,957) $ 72,790
----------- ---------- ----------- ---------- ------------ ------------ ------------
----------- ---------- ----------- ---------- ------------ ------------ ------------
</TABLE>
<PAGE> 8
MCN Corporation
Consolidating Balance Sheet
(Thousands of Dollars)
As of December 31, 1993
(Unaudited)
<TABLE>
<CAPTION>
Blue Lake MCNIC MCN
MCN MichCon Citizens Holdings Consolidated Eliminations Reclasses Consolidated
----------- ---------- ----------- ----------- ------------ ------------ --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
CURRENT ASSETS
Cash and temporary cash
investments at cost
(which approximates
market value) $ 18,403 $ 2,423 $ 685 $ 8 $ 11,722 $ (20,767) $ - $ 12,474
Accounts receivable 8,094 182,434 2,489 (7) 74,349 (10,849) - 256,510
Allowance for doubtful
account - (18,777) (70) - (729) - - (19,576)
Accrued unbilled revenues - 100,216 1,111 - - - - 101,327
Gas in inventory - 35,099 (30) - 10,826 - - 45,895
Property taxes assessed
applicable to future
periods 55 49,860 24 - 770 - - 50,709
Other 78 25,240 487 - 9,467 (97) 157 35,332
----------- ---------- ---------- --------- ---------- ----------- ------- -----------
26,630 376,495 4,696 1 106,405 (31,713) 157 482,671
----------- ---------- ---------- --------- ---------- ---------- -------- -----------
DEFERRED CHARGES AND OTHER
ASSETS
Investment in subsidiaries 520,459 7,492 - - 7,492 (535,443) - -
Investment in and advances
to joint ventures - 11,292 6 17,555 31,675 - - 60,528
Deferred postretirement
benefit cost - - - - - - 25,612 25,612
Other 2,282 90,451 2,776 291 28,816 428 (66,013) 59,031
----------- ---------- ---------- --------- ---------- ----------- -------- -----------
522,741 109,235 2,782 17,846 67,983 (535,015) (40,401) 145,171
----------- ---------- ---------- --------- ---------- ----------- -------- -----------
PROPERTY, PLANT AND
EQUIPMENT, AT COST 3,744 2,084,516 17,100 - 179,169 - - 2,284,529
Less: Accumulated
depreciation and
depletion 444 1,024,009 7,184 - 16,304 - - 1,047,941
----------- ---------- ---------- --------- ---------- ----------- -------- -----------
3,300 1,060,507 9,916 - 162,865 - - 1,236,588
----------- ---------- ---------- --------- ---------- ----------- -------- -----------
$ 552,671 $1,546,237 $ 17,394 $ 17,847 $ 337,253 $ (566,728) $(40,244) $ 1,864,430
----------- ---------- ---------- --------- ----------- ---------- --------- -----------
----------- ---------- ---------- --------- ----------- ---------- --------- -----------
</TABLE>
<PAGE> 9
MCN Corporation
Consolidating Balance Sheet
(Thousands of Dollars)
As of December 31, 1993
(Unaudited)
<TABLE>
<CAPTION>
Blue Lake MCNIC MCN
MCN MichCon Citizens Holdings Consolidated Eliminations Reclasses Consolidated
----------- ---------- ----------- ----------- -------------- -------------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
LIABILITIES AND
CAPITALIZATION
CURRENT LIABILITIES
Accounts payable $ 3,147 $ 92,751 $ 1,737 $ - $ 37,368 $ (10,418) $ - $ 124,585
Notes payable 655 260,304 - 1,709 38,403 (20,767) - 280,304
Current portion of
long-term debt,
capital lease
obligations and
redeemable cumulative
preferred stock - 4,112 110 - 1,758 - - 5,980
Federal income, property
and other taxes
payable 1,212 60,542 358 590 1,088 - - 63,790
Refunds payable to
customers - 10,793 1 - - - - 10,794
Customer deposits - 13,249 22 - - - - 13,271
Other 2,155 48,541 1,166 - 9,499 (308) 17,093 78,146
--------- -------- --------- -------- -------- --------- -------- ---------
7,169 490,292 3,394 2,299 88,116 (31,493) 17,093 576,870
--------- -------- --------- -------- -------- --------- -------- ---------
DEFERRED CREDITS AND OTHER
LIABILITIES
Accumulated deferred
income taxes (2,237) 226,825 2,027 564 30,188 - (85,737) 171,630
Unamortized investment
tax credit - 40,151 420 - - - - 40,571
Tax benefits amortizable
to customers - - - - - - 31,666 31,666
Minority interest - - - - 18,357 - - 18,357
Other 5,671 46,727 2,153 - 3,444 - (3,266) 54,729
--------- -------- --------- -------- -------- --------- -------- ---------
3,434 313,703 4,600 564 51,989 - (57,337) 316,953
--------- -------- --------- -------- -------- --------- ------- ---------
LONG-TERM DEBT, INCLUDING
CAPITAL LEASE OBLIGATIONS 71,900 370,839 960 - 51,122 - - 494,821
--------- -------- --------- -------- -------- --------- -------- ---------
REDEEMABLE CUMULATIVE
PREFERRED STOCK - 5,618 - - - - - 5,618
--------- -------- --------- -------- -------- --------- -------- ---------
COMMON SHAREHOLDERS' EQUITY
Common stock 295 10,300 2,339 - 5 (12,644) - 295
Additional paid-in capital 317,117 203,617 68 9,658 134,445 (347,788) - 317,117
Retained earnings 153,884 151,868 6,033 5,326 11,576 (174,803) - 153,884
Unearned compensation and
ESOP benefit (1,128) - - - - - - (1,128)
--------- -------- --------- -------- -------- --------- -------- ---------
470,168 365,785 8,440 14,984 146,026 (535,235) - 470,168
--------- -------- --------- -------- -------- --------- -------- ---------
$ 552,671 $1,546,237 $ 17,394 $ 17,847 $ 337,253 $ (566,728) $ (40,244) $ 1,864,430
--------- -------- --------- -------- -------- --------- -------- ---------
--------- -------- --------- -------- -------- --------- -------- ---------
</TABLE>
<PAGE> 10
MCN Corporation
MCN Investment Corporation
Consolidating Income Statement
(Thousands of Dollars)
For the Year Ended December 31, 1993
(Unaudited)
<TABLE>
<CAPTION>
Combustion Fuel
MCNIC Bridgewwater Concepts Concepts G-TEC
------------ --------------- ---------- ---------- --------------
<S> <C> <C> <C> <C> <C>
OPERATING REVENUES
Gas sales $ - $ - $ - $ - $ -
Transportation and storage - - - - -
Computer operations services
and other - - - - 4
------------ --------------- ---------- ---------- --------------
Total operating revenues - - - - 4
------------ --------------- ---------- ---------- --------------
OPERATING EXPENSES
Cost of gas - - - - -
Operation and maintenance 5,196 (1) 300 1,289 42
Depreciation, depletion and
amortization 5 - 6 - -
Property and other taxes 149 - 1 - (4)
------------ --------------- ---------- ---------- --------------
Total operating expenses 5,350 (1) 307 1,289 38
------------ --------------- ---------- ---------- --------------
OPERATING INCOME (LOSS) (5,350) 1 (307) (1,289) (34)
------------ --------------- ---------- ---------- --------------
EQUITY IN EARNINGS (LOSS) OF
JOINT VENTURES - - - - (657)
------------ --------------- ---------- ---------- --------------
OTHER INCOME AND (DEDUCTIONS)
Equity in earnings of
subsidiaries 13,333 - - - -
Interest income 2,768 14 - - -
Interest on long-term debt (1,310) - - - -
Other interest expense (1,817) - - - -
Dividends on preferred stock
of subsidiary - - - - -
Minority interest - - - - -
Other (70) - 4 (12) -
----------- --------------- ---------- ---------- --------------
Total other income and
(deductions) 12,904 14 4 (12) -
----------- --------------- ---------- ---------- --------------
INCOME BEFORE INCOME TAXES 7,554 15 (303) (1,301) (691)
INCOME TAX PROVISION (BENEFIT) (2,022) 12 (105) (453) (211)
----------- --------------- ---------- ---------- --------------
NET INCOME (LOSS) $ 9,576 $ 3 $ (198) $ (848) $ (480)
----------- --------------- ---------- ---------- --------------
----------- --------------- ---------- ---------- --------------
<CAPTION>
The Genix
Group CVI MCNIC
Consolidated Consolidated Eliminations Consolidated
------------- ------------ ------------ -------------
<S> <C> <C> <C> <C>
OPERATING REVENUES
Gas Sales $ - $ 203,925 $ (93) $ 203,832
Transportation and storage - 11,981 - 11,981
Computer operations services
and other 74,390 585 - 74,979
-------- --------- ----------- -------------
Total operating revenues 74,390 216,491 (93) 290,792
-------- --------- ----------- -------------
OPERATING EXPENSES
Cost of gas 150 185,640 (57) 185,733
Operation and maintenance 62,601 10,509 (36) 79,900
Depreciation, depletion and
amortization 4,616 2,230 - 6,857
Property and other taxes 1,831 1,296 - 3,273
-------- --------- ----------- -------------
Total operating expenses 69,198 199,675 (93) 275,763
-------- --------- ----------- -------------
OPERATING INCOME (LOSS) 5,192 16,816 - 15,029
-------- --------- ----------- -------------
EQUITY IN EARNINGS (LOSS) OF
JOINT VENTURES - 778 - 121
-------- --------- ----------- -------------
OTHER INCOME AND (DEDUCTIONS)
Equity in earnings of
subsidiaries - 1,414 (12,163) 2,584
Interest income 69 1,186 (3,070) 967
Interest on long-term debt (1) (1,781) - (3,092)
Other interest expense (794) (1,775) 3,015 (1,371)
Dividends on preferred stock
of subsidiary - - - -
Minority interest - (4,474) 1,143 (3,331)
Other 119 517 54 612
-------- --------- ----------- -------------
Total other income and
(deductions) (607) (4,913) (11,021) (3,631)
-------- --------- ----------- -------------
INCOME BEFORE INCOME TAXES 4,585 12,681 (11,021) 11,519
INCOME TAX PROVISION (BENEFIT) 1,968 2,754 - 1,943
-------- --------- ----------- -------------
NET INCOME (LOSS) $ 2,617 $ 9,927 $ (11,021) $ 9,576
-------- --------- ----------- -------------
-------- --------- ----------- -------------
</TABLE>
<PAGE> 11
MCN Corporation
MCN Investment Corporation
Consolidating Balance Sheet
(Thousands of Dollars)
As of December 31, 1993
(Unaudited)
<TABLE>
<CAPTION>
Combustion Fuel
MCNIC Bridgewater Concepts Concepts G-TEC
----------- ------------ ------------ ----------- -----------
<S> <C> <C> <C> <C> <C>
ASSETS
CURRENT ASSETS
Cash and temporary cash investments
at cost (which approximates market value) $ 29,473 $ 747 $ - $ 13 $ 130
Accounts receivable (1,916) 3 39 (13) 2
Allowance for doubtful account - - - - -
Accrued unbilled revenues - - - - -
Gas in inventory - - - - -
Property taxes assessed applicable to
future periods - - - - -
Other 115 - - - -
------- -------- -------- -------- --------
27,672 750 39 - 132
------- -------- -------- -------- --------
DEFERRED CHARGES AND OTHER ASSETS
Investment in subsidiaries 174,184 - - - -
Investment in and advances to joint ventures 9 - - - 850
Deferred postretirement benefit cost - - - - -
Other 21,301 - 230 255 16
------- -------- -------- -------- --------
195,494 - 230 255 866
------- -------- -------- -------- --------
PROPERTY, PLANT AND EQUIPMENT, AT COST 27 - 37 - -
Less: Accumulated depreciation and depletion 1 - 21 - -
------- -------- -------- -------- --------
26 - 16 - -
------- -------- -------- -------- --------
$ 223,192 $ 750 $ 285 $ 255 $ 998
------- -------- -------- -------- --------
------- -------- -------- -------- --------
<CAPTION>
The Genix
Group CVI MCNIC
Consolidated Consolidated Eliminations Consolidated
------------- ------------- ------------ -------------
<S> <C> <C> <C> <C>
ASSETS
CURRENT ASSETS
Cash and temporary cash investments
at cost (which approximates market value) $ 3,128 $ 13,454 $ (35,223) $ 11,722
Accounts receivable 16,521 60,109 (396) 74,349
Allowance for doubtful account (98) (631) - (729)
Accrued unbilled revenues - - - -
Gas in inventory - 10,826 - 10,826
Property taxes assessed applicable to
future periods - 770 - 770
Other 2,902 6,526 (76) 9,467
------------- ------------- ------------ -------------
22,453 91,054 (35,695) 106,405
------------- ------------- ------------ -------------
DEFERRED CHARGES AND OTHER ASSETS
Investment in subsidiaries - 7,492 (174,184) 7,492
Investment in and advances to joint ventures - 30,816 - 31,675
Deferred postretirement benefit cost - - - -
Other 7,512 20,153 (20,651) 28,816
------------- ------------- ------------ -------------
7,512 58,461 (194,835) 67,983
------------- ------------- ------------ -------------
PROPERTY, PLANT AND EQUIPMENT, AT COST 33,430 145,675 - 179,169
Less: Accumulated depreciation and depletion 9,388 6,894 - 16,304
------------- ------------- ------------ -------------
24,042 138,781 - 162,865
------------- ------------- ------------ -------------
$ 54,007 $ 288,296 $ (230,530) $ 337,253
------------- ------------- ------------ -------------
------------- ------------- ------------ -------------
</TABLE>
<PAGE> 12
MCN Corporation
MCN Investment Corporation
Consolidating Balance Sheet
(Thousands of Dollars)
As of December 31, 1993
(Unaudited)
<TABLE>
<CAPTION>
Combustion Fuel
MCNIC Bridgewater Concepts Concepts G-TEC
------------ ------------ ---------- ---------- -----------
<S> <C> <C> <C> <C> <C>
LIABILITIES AND CAPITALIZATION
CURRENT LIABILITIES
Accounts payable $ 560 $ 1 $ 105 $ 26 $ 100
Notes payable 45,521 - - - -
Current portion of long-term debt, capital lease
obligations and redeemable cumulative
preferred stock - - - - -
Federal income, property and other taxes
payable (1,089) 454 (5) (11) (175)
Refunds payable to customers - - - - -
Customer deposits - - - - -
Other 445 - - - -
------------ ------------ ---------- ---------- -----------
45,437 455 100 15 (75)
------------ ------------ ---------- ---------- -----------
DEFERRED CREDITS AND OTHER LIABILITIES
Accumulated deferred income taxes 289 303 44 78 3
Unamortized investment tax credit - - - - -
Tax benefits amortizable to customers - - - - -
Minority interest - - - - -
Other 1,440 - - - -
------------ ------------ ---------- ---------- -----------
1,729 303 44 78 3
------------ ------------ ---------- ---------- -----------
LONG-TERM DEBT, INCLUDING CAPITAL
LEASE OBLIGATIONS 30,000 - - - -
------------ ------------ ---------- ---------- -----------
REDEEMABLE CUMULATIVE PREFERRED STOCK - - - - -
------------ ------------ ---------- ---------- -----------
COMMON SHAREHOLDERS' EQUITY
Common stock 5 - 1 3 5
Additional paid-in capital 134,445 1 1,302 1,136 8,038
Retained earnings 11,576 (9) (1,162) (977) (6,973)
Unearned compensation and ESOP benefit - - - - -
------------ ------------ ---------- ---------- -----------
146,026 (8) 141 162 1,070
------------ ------------ ---------- ---------- -----------
$ 223,192 $ 750 $ 285 $ 255 $ 998
------------ ------------ ---------- ---------- -----------
------------ ------------ ---------- ---------- -----------
</TABLE>
<TABLE>
<CAPTION>
The Genix
Group CVI MCNIC
Consolidated Consolidated Eliminations Consolidated
------------- ------------- -------------- --------------
<S> <C> <C> <C> <C>
LIABILITIES AND CAPITALIZATION
CURRENT LIABILITIES
Accounts payable $ 4,708 $ 32,688 $ (820) $ 37,368
Notes payable - 27,605 (34,723) 38,403
Current portion of long-term debt, capital lease
obligations and redeemable cumulative
preferred stock - 1,758 - 1,758
Federal income, property and other taxes
payable 794 1,120 - 1,088
Refunds payable to customers - - - -
Customer deposits - - - -
Other 1,972 7,175 (93) 9,499
------------- ------------- -------------- --------------
7,474 70,346 (35,636) 88,116
------------- ------------- -------------- --------------
DEFERRED CREDITS AND OTHER LIABILITIES
Accumulated deferred income taxes 2,099 27,372 - 30,188
Unamortized investment tax credit - - - -
Tax benefits amortizable to customers - - - -
Minority interest - 18,357 - 18,357
Other 16,463 6,252 (20,711) 3,444
------------- ------------- -------------- --------------
18,562 51,981 (20,711) 51,989
------------- ------------- -------------- --------------
LONG-TERM DEBT, INCLUDING CAPITAL
LEASE OBLIGATIONS - 21,122 - 51,122
------------- ------------- -------------- --------------
REDEEMABLE CUMULATIVE PREFERRED STOCK - - - -
------------- ------------- -------------- --------------
COMMON SHAREHOLDERS' EQUITY
Common stock - - (9) 5
Additional paid-in capital 21,687 134,921 (167,085) 134,445
Retained earnings 6,284 9,926 (7,089) 11,576
Unearned compensation and ESOP benefit - - - -
------------- ------------- -------------- --------------
27,971 144,847 (174,183) 146,026
------------- ------------- -------------- --------------
$ 54,007 $ 288,296 $ (230,530) $ 337,253
------------- ------------- -------------- --------------
------------- ------------- -------------- --------------
</TABLE>
<PAGE> 13
MCN Corporation
CoEnergy Ventures, Inc.
Consolidating Income Statement
(Thousands of Dollars)
For the Year Ended December 31, 1993
(Unaudited)
<TABLE>
<CAPTION>
Storage
CoEnergy CoEnergy CoEnergy Cogen Development Otsego
Ventures Canadian Trading Development Consolidated Holdings
---------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
OPERATING REVENUES
Gas sales $ 56,000 $ - $ 138,329 $ 7,300 $ 8,446 $ -
Transportation and storage - - 103 - - -
Computer operations services and other 2 - 29 20 - -
---------- ----------- ----------- ----------- ----------- -----------
Total operating revenues 56,002 - 138,461 7,320 8,446 -
---------- ----------- ----------- ----------- ----------- -----------
OPERATING EXPENSES
Cost of gas 57,082 - 127,352 6,372 8,412 -
Operation and maintenance 1,172 - 4,127 249 16 90
Depreciation, depletion and amortization 122 - (131) (422) - -
Property and other taxes 7 - 67 17 - -
---------- ----------- ----------- ----------- ----------- -----------
Total operating expenses 58,383 - 131,415 6,216 8,428 90
---------- ----------- ----------- ----------- ----------- -----------
OPERATING INCOME (LOSS) (2,381) - 7,046 1,104 18 (90)
---------- ----------- ----------- ----------- ----------- -----------
EQUITY IN EARNINGS (LOSS) OF JOINT VENTURES (1,148) 67 - (310) 48 2,121
---------- ----------- ----------- ----------- ----------- -----------
OTHER INCOME AND (DEDUCTIONS)
Equity in earnings of subsidiaries 12,075 - - - 1,414 -
Interest income 471 - 47 72 389 -
Interest on long-term debt - - 17 - - -
Other interest expense (139) - (1,393) (48) - -
Dividends on preferred stock of subsidiary - - - - - -
Minority interest - - - - - -
Other 58 - (43) 63 (120) -
---------- ----------- ----------- ----------- ----------- -----------
Total other income and (deductions) 12,465 - (1,372) 87 1,683 -
---------- ----------- ----------- ----------- ----------- -----------
INCOME BEFORE INCOME TAXES 8,936 67 5,674 881 1,749 2,031
INCOME TAX PROVISION (BENEFIT) (991) 30 2,080 407 170 712
---------- ----------- ----------- ----------- ----------- -----------
NET INCOME $ 9,927 $ 37 $ 3,594 $ 474 $ 1,579 $ 1,319
---------- ----------- ----------- ----------- ----------- -----------
---------- ----------- ----------- ----------- ----------- -----------
<CAPTION>
Saginaw Saginaw
Supply Bay Bay CoEnergy
Development Pipeline Lateral Westside Ventures
Consolidated Consolidated Consolidated Pipeline Eliminations Consolidated
------------- ------------ ------------ ------------ ------------- -------------
<S> <C> <C> <C> <C> <C>
OPERATING REVENUES
Gas sales $ 23,015 $ - $ - $ - $ (29,165) $ 203,925
Transportation and storage - 8,708 3,052 118 - 11,981
Computer operations services and other 149 416 25 - (56) 585
------------- ------------ ------------ ------------ ------------- -------------
Total Operating Revenues 23,164 9,124 3,077 118 (29,221) 216,491
------------- ------------ ------------ ------------ ------------- -------------
OPERATING EXPENSES
Cost of gas 15,629 14 - - (29,221) 185,640
Operation and maintenance 3,689 844 315 7 - 10,509
Depreciation, depletion and amortization 1,567 807 283 4 - 2,230
Property and other taxes 166 848 191 - - 1,296
------------- ------------ ------------ ------------ ------------- -------------
Total operating expenses 21,051 2,513 789 11 (29,221) 199,675
------------- ------------ ------------ ------------ ------------- -------------
OPERATING INCOME (LOSS) 2,113 6,611 2,288 107 - 16,816
------------- ------------ ------------ ------------ ------------- -------------
EQUITY IN EARNINGS (LOSS) OF JOINT VENTURES - - - - - 778
------------- ------------ ------------ ------------ ------------- -------------
OTHER INCOME AND (DEDUCTIONS)
Equity in earnings of subsidiaries - - - - (12,075) 1,414
Interest income 1 183 23 - - 1,186
Interest on long-term debt - (1,798) - - - (1,781)
Other interest expense (27) (9) (147) (12) - (1,775)
Dividends on preferred stock of subsidiary - - - - - -
Minority interest - (2,280) (1,003) - (1,191) (4,474)
Other - 567 (8) - - 517
------------- ------------ ------------ ------------ ------------- -------------
Total other income and (deductions) (26) (3,337) (1,135) (12) (13,266) (4,913)
------------- ------------ ------------ ------------ ------------- -------------
INCOME BEFORE INCOME TAXES 2,087 3,274 1,153 95 (13,266) 12,681
INCOME TAX PROVISION (BENEFIT) (1,389) 1,270 432 33 - 2,754
------------- ------------ ------------ ------------ ------------- -------------
NET INCOME $ 3,476 $ 2,004 $ 721 $ 62 $ (13,266) $ 9,927
------------- ------------ ------------ ------------ ------------- -------------
------------- ------------ ------------ ------------ ------------- -------------
</TABLE>
<PAGE> 14
MCN Corporation
CoEnergy Ventures, Inc.
Consolidating Balance Sheet
(Thousands of Dollars)
As of December 31, 1993
(Unaudited)
<TABLE>
<CAPTION>
Storage
CoEnergy CoEnergy CoEnergy Cogen Development Otsego
Ventures Canadian Trading Development Consolidated Holdings
------------ ----------- ----------- ------------ ------------- ----------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
CURRENT ASSETS
Cash and temporary cash investments
at cost (which approximates market value) $ 4,818 $ - $ - $ 695 $ 54 $ 18
Accounts receivable 16,228 - 43,794 4,459 678 -
Allowance for doubtful account - - (631) - - -
Accrued unbilled revenues - - - - - -
Gas in inventory (474) - 11,158 142 - -
Property taxes assessed applicable to
future periods - - 3 - - -
Other - - 3,432 27 2,440 -
------------ ----------- ----------- ------------ ------------- ----------
20,572 - 57,756 5,323 3,172 18
------------ ----------- ----------- ------------ ------------- ----------
DEFERRED CHARGES AND OTHER ASSETS
Investment in subsidiaries 131,094 - - - 7,492 -
Investment in and advances to joint ventures 4,762 141 - 4,396 17,615 3,902
Deferred postretirement benefit cost - - - - - -
Other (1,657) 17 5,169 5,775 2,364 5
------------ ----------- ----------- ------------ ------------- ----------
134,199 158 5,169 10,171 27,471 3,907
------------ ----------- ----------- ------------ ------------- ----------
PROPERTY, PLANT AND EQUIPMENT, AT COST 23 - 272 24 - -
Less: Accumulated depreciation and depletion - - 74 1 - -
------------ ----------- ----------- ------------ ------------- ----------
23 - 198 23 - -
------------ ----------- ----------- ------------ ------------- ----------
$ 154,794 $ 158 $ 63,123 $ 15,517 $ 30,643 $ 3,925
------------ ----------- ----------- ------------ ------------- ----------
------------ ----------- ----------- ------------ ------------- ----------
<CAPTION>
Saginaw Saginaw
Supply Bay Bay CoEnergy
Development Pipeline Lateral Westside Ventures
Consolidated Consolidated Consolidated Pipeline Eliminations Consolidated
--------------- ------------- ------------- --------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
CURRENT ASSETS
Cash and temporary cash investments
at cost (which approximates market value) $ 5,423 $ 2,352 $ 71 $ 23 $ - $ 13,454
Accounts receivable 5,379 2,555 761 280 (14,025) 60,109
Allowance for doubtful account - - - - - (631)
Accrued unbilled revenues - - - - - -
Gas in inventory - - - - - 10,826
Property taxes assessed applicable to
future periods - 610 123 34 - 770
Other - 163 9 1,850 (1,395) 6,526
--------------- ------------- ------------- --------- -------------- -------------
10,802 5,680 964 2,187 (15,420) 91,054
--------------- ------------- ------------- --------- -------------- -------------
DEFERRED CHARGES AND OTHER ASSETS
Investment in subsidiaries - - - - (131,094) 7,492
Investment in and advances to joint ventures - - - - - 30,816
Deferred postretirement benefit cost - - - - - -
Other 3,968 3,771 16 398 327 20,153
--------------- ------------- ------------- --------- -------------- -------------
3,968 3,771 16 398 (130,767) 58,461
--------------- ------------- ------------- --------- -------------- -------------
PROPERTY, PLANT AND EQUIPMENT, AT COST 90,899 42,598 10,284 1,575 - 145,675
Less: Accumulated depreciation and depletion 1,578 4,098 1,139 4 - 6,894
--------------- ------------- ------------- --------- -------------- -------------
89,321 38,500 9,145 1,571 - 138,781
--------------- ------------- ------------- --------- -------------- -------------
$ 104,091 $ 47,951 $ 10,125 $ 4,156 $ (146,187) $ 288,296
--------------- ------------- ------------- --------- -------------- -------------
--------------- ------------- ------------- --------- -------------- -------------
</TABLE>
<PAGE> 15
MCN Corporation
CoEnergy Ventures, Inc.
Consolidating Balance Sheet
(Thousands of Dollars)
As of December 31, 1993
(Unaudited)
<TABLE>
<CAPTION>
Storage
CoEnergy CoEnergy CoEnergy Cogen Development Otsego
Ventures Canadian Trading Development Consolidated Holdings
------------ ------------ ---------- ------------ ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
LIABILITIES AND CAPITALIZATION
CURRENT LIABILITIES
Accounts payable $ 6,676 $ 17 $ 27,039 $ 1,328 $ 675 $ -
Notes payable - - 19,174 1,139 - -
Current portion of long-term debt, capital lease
obligations and redeemable cumulative
preferred stock - - - - - -
Federal income, property and other taxes
payable (1,497) 29 1,400 371 (289) 26
Refunds payable to customers - - - - - -
Customer deposits - - - - - -
Other - - 6,543 - 1,395 -
------------ ------------ ---------- ------------ ------------- ------------
5,179 46 54,156 2,838 1,781 26
------------ ------------ ---------- ------------ ------------- ------------
DEFERRED CREDITS AND OTHER LIABILITIES
Accumulated deferred income taxes 4,761 - 7 4,424 75 21
Unamortized investment tax credit - - - - - -
Tax benefits amortizable to customers - - - - - -
Minority interest - - - - - -
Other 7 - 403 3,167 2,642 -
------------ ------------ ---------- ------------ ------------- ------------
4,768 - 410 7,591 2,717 21
------------ ------------ ---------- ------------ ------------- ------------
LONG-TERM DEBT, INCLUDING CAPITAL
LEASE OBLIGATIONS - - - - - -
------------ ------------ ---------- ------------ ------------- ------------
REDEEMABLE CUMULATIVE PREFERRED STOCK - - - - - -
------------ ------------ ---------- ------------ ------------- ------------
COMMON SHAREHOLDERS' EQUITY
Common stock - - - - 1 -
Additional paid-in capital 134,921 75 4,963 4,614 37,060 2,287
Retained earnings 9,926 37 3,594 474 (10,916) 1,591
Unearned compensation and ESOP benefit - - - - - -
------------ ------------ ---------- ------------ ------------- ------------
144,847 112 8,557 5,088 26,145 3,878
------------ ------------ ---------- ------------ ------------- ------------
$ 154,794 $ 158 $ 63,123 $ 15,517 $ 30,643 $ 3,925
------------ ------------ ---------- ------------ ------------- ------------
------------ ------------ ---------- ------------ ------------- ------------
<CAPTION>
Saginaw Saginaw
Supply Bay Bay CoEnergy
Development Pipeline Lateral Westside Ventures
Consolidated Consolidated Consolidated Pipeline Eliminations Consolidated
------------- ------------- ------------- ---------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
LIABILITIES AND CAPITALIZATION
CURRENT LIABILITIES
Accounts payable $ 9,711 $ 459 $ 85 $ 440 $ (13,742) $ 32,688
Notes payable 1,874 14 1,767 3,637 - 27,605
Current portion of long-term debt, capital lease
obligations and redeemable cumulative
preferred stock - 1,758 - - - 1,758
Federal income, property and other taxes
payable (447) 1,239 272 16 - 1,120
Refunds payable to customers - - - - - -
Customer deposits - - - - - -
Other 4 586 - - (1,353) 7,175
------------- ------------- ------------- ---------- ------------ -------------
11,142 4,056 2,124 4,093 (15,095) 70,346
------------- ------------- ------------- ---------- ------------ -------------
DEFERRED CREDITS AND OTHER LIABILITIES
Accumulated deferred income taxes 11,689 5,190 1,205 - - 27,372
Unamortized investment tax credit - - - - - -
Tax benefits amortizable to customers - - - - - -
Minority interest - 14,752 3,605 - - 18,357
Other - 33 - - - 6,252
------------- ------------- ------------- ---------- ------------ -------------
11,689 19,975 4,810 - - 51,981
------------- ------------- ------------- ---------- ------------ -------------
LONG-TERM DEBT, INCLUDING CAPITAL
LEASE OBLIGATIONS - 21,122 - - - 21,122
------------- ------------- ------------- ---------- ------------ -------------
REDEEMABLE CUMULATIVE PREFERRED STOCK - - - - - -
------------- ------------- ------------- ---------- ------------ -------------
COMMON SHAREHOLDERS' EQUITY
Common stock 51,682 - - - (51,683) -
Additional paid-in capital 26,080 178 2,013 1 (77,271) 134,921
Retained earnings 3,498 2,620 1,178 62 (2,138) 9,926
Unearned compensation and ESOP benefit - - - - - -
------------- ------------- ------------- ---------- ------------ -------------
81,260 2,798 3,191 63 (131,092) 144,847
------------- ------------- ------------- ---------- ------------ -------------
$ 104,091 $ 47,951 $ 10,125 $ 4,156 $ (146,187) $ 288,296
------------- ------------- ------------- ---------- ------------ -------------
------------- ------------- ------------- ---------- ------------ -------------
</TABLE>
<PAGE> 16
SIGNATURES
The above-named claimant has caused this statement to be duly executed
on its behalf by its authorized officer on this 24th day of February, 1994.
MCN CORPORATION
(Name of Claimant)
By: /s/ WILLIAM K. MCCRACKIN
------------------------
William K. McCrackin
Vice Chairman and
Chief Financial Officer
CORPORATE SEAL:
Attest:
/s/ DANIEL L. SCHIFFER
----------------------
Daniel L. Schiffer
Vice President, General Counsel
and Secretary
Name, title, and address of officer to whom notices and correspondence
concerning this statement should be addressed:
Daniel L. Schiffer
Vice President, General Counsel
and Secretary
MCN Corporation
500 Griswold Street
Detroit, Michigan 48226
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