File No: 69-352
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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, 1994
-----------
MCN CORPORATION
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, and submits the following
information:
I. NATURE OF BUSINESS OF CLAIMANT AND EVERY SUBSIDIARY THEREOF
MCN CORPORATION: MCN Corporation (MCN or the Corporation) is a
diversified natural gas holding company. MCN is 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 (MCNIC). MCN's major business segments are Gas Distribution
and, within the Diversified Services group, Gas Services and Computer
Operations Services. Gas Technology includes MichCon's and MCNIC's
research and development programs. Except where otherwise indicated, the
companies set forth below are Michigan corporations located at 500
Griswold Street, Detroit, Michigan 48226.
<PAGE>
GAS DISTRIBUTION
------------------
Gas Distribution, through the following subsidiaries, operates the
largest natural gas distribution and intrastate transmission system in
Michigan and one of the largest in the United States.
A. MICHIGAN CONSOLIDATED GAS COMPANY: MichCon is a public utility
engaged in the distribution and transmission of natural gas in the state
of Michigan. MichCon was organized in 1898 and, with its predecessors,
has been in business for nearly 150 years. MichCon serves more than 1.1
million residential, commercial and industrial 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 gas sales rates, service, accounting 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 constructed on a 50 acre parcel along the Detroit
River in Detroit, Michigan.
<PAGE>
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
MCNIC.
4. 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. G-T
Energy Concepts, Inc. was transferred to MichCon from MCNIC in
April 1994.
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. Fuel Concepts, Inc. was
transferred to MichCon from MCNIC in April 1994.
6. Kalkaska Gas Storage Limited Partnership, a Michigan partnership
in which MichCon has a 31% interest, holds a 53.5 % interest in a
partnership which has plans to develop and operate a gas storage
field in northern Michigan with 15 Bcf of working capacity.
B. CITIZENS GAS FUEL COMPANY: Citizens is a public utility engaged
in the distribution and transmission of natural gas. Citizens was
organized in 1951 and, with its predecessors, has been in business for
over 135 years. Citizens serves approximately 13,000 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.
DIVERSIFIED SERVICES
----------------------
C. MCN INVESTMENT CORPORATION: MCNIC, organized in 1986, is the
holding company for MCN's various diversified services subsidiaries.
MCNIC's major business segments are Gas Services and Computer Operations
Services. MCNIC is also involved in Gas Technology and other businesses.
Except where otherwise indicated, the companies set forth below are
wholly owned subsidiaries of MCNIC.
Gas Services
--------------
The Gas Services segment is an integrated energy group with investments
in the following businesses: Gas Marketing and Cogeneration, Gas Gathering and
Processing, Exploration and Production, and Gas Storage.
Gas Marketing and Cogeneration
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 cogeneration related projects.
1. CoEnergy Trading Company is engaged in the purchase and sale of
natural gas to large-volume gas users and gas and electric
utilities in Michigan, the Midwest, the eastern United States and
Canada.
2
<PAGE>
2. 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.
3. CoEnergy Supply Company was formed in 1994 to engage in the
purchase and sale of natural gas developed by the Supply
Development Group, Inc. CoEnergy Supply Company expects to begin
perations in 1995.
4. Cogen Development Company (Cogen) pursues cogeneration related
opportunities throughout the United States and Canada.
a. CDC Ada, Inc., is a 99% limited partner in a venture
which owns and operates a 30 megawatt natural gas-fueled
cogeneration facility in western Michigan.
b. Ludington Cogeneration Co. is the 1% general partner in a
joint venture that is constructing and intends to operate a
123 megawatt natural gas-fueled cogeneration plant in
western Michigan.
c. Ludington Cogeneration Holdings, Ltd. is a 49% limited
partner in the 123 megawatt cogeneration plant mentioned
above.
Exploration & Production
9. Supply Development Group, Inc., through the subsidiaries listed
below, is engaged in natural gas exploration, development and
production primarily in Michigan, Ohio, the midcontinent and
southern areas of the U.S.
a. Elmira Antrim Company
b. Green River Antrim Company
c. Warner Antrim Company
d. Green Oak Development Company
e. MGS Development Company
f. Southwest Gas Supply, Inc.
g. Geotrend Exploration, Inc.
h. Huron Energy
i. CoEnergy MidContinent
j. CoEnergy Anadarko
k. P'Bell Energy
l. CoEnergy Operating Company
m. CoEnergy Canadian Exploration, Inc.
n. Petro Ventures Exploration Company
o. SDG Marketing Company
Gas Gathering and Processing
MCNIC's Gas Gathering and Processing businesses are involved in ventures
that transport natural gas from producing fields to processing plants and/or
markets. This business also includes plants which process natural gas to
remove CO2 in order to meet market specifications.
5. 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.
3
<PAGE>
6. Saginaw Bay Lateral Company is the 46% general partner in a
partnership which owns and operates lateral pipelines
interconnecting with the 126-mile pipeline previously described.
7. Otsego Holdings, Inc., was a 40% general partner in two gas
processing facilities, located in northern Michigan, that remove
carbon dioxide from natural gas. In January 1995, Otsego Holdings,
Inc. sold its partnership interest in these two plants.
8. Westside Pipeline Company owns and operates a 6 mile pipeline
which provides transportation services to Citizens. In addition,
Westside Pipeline Company invests in various pipeline and
processing plants through equity interests in the companies listed
below.
a. Jordan Valley Limited Partnership (85% interest)
b. Warner Treating Limited Liability Company (95% interest)
c. Terra Westside Processing Company (85% interest)
Gas Storage
10. Storage Development Company, through joint ventures and strategic
partnerships, develops and provides gas storage services to other
gas utilities, pipeline companies and large-volume gas users.
a. 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 southeastern Michigan
which provides storage services to MCNIC's Gas Marketing and
Cogeneration operations.
b. 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.
c. Blue Lake Holdings, Inc. (See description under Gas
Distribution - MichCon)
d. The Orchards Golf Limited Partnership, a Michigan
partnership in which Storage Development Company has a 50%
interest, developed, owns and operates a residential
community and golf course on 520 acres of land above the
South Romeo gas storage field in southeastern Michigan.
Computer Operations Services
------------------------------
The Genix Group and its subsidiaries make up the largest Michigan based
computer operations management firm and one of the top ten in the United
States.
11. The Genix Group, Inc., through the subsidiaries listed below,
provides data processing, computer operations management, network
design and management, large-scale electronic printing and mailing
and business process solution services to more than a dozen
industries in 23 states.
a. Genix Corporation, a Delaware corporation, located in
Pittsburgh, Pennsylvania.
b. MCN Computer Services, Inc., located in Dearborn, Michigan.
c. Genix Group, Ltd., located in London, England.
4
<PAGE>
Gas Technology
----------------
MCN's Gas Technology businesses, which also includes G-T Energy
Concepts, Inc. and Fuel Concepts, Inc. which were transferred to the Gas
Distribution operations in April 1994, research and develop innovative
applications for natural gas in pressurized combustion technologies and as a
fuel for vehicles and other applications.
12. Combustion Concepts, Inc., is engaged in the development of
pressurized combustion technologies which provides increased fuel
efficiency, heat uniformity and compactness of equipment.
Other
-------
13. Bridgewater Holdings, Inc., is a 33-1/3% limited partner in a
17-story commercial real estate complex located in Grand Rapids,
Michigan.
D. MCN MICHIGAN LIMITED PARTNERSHIP (MCN Michigan): MCN is the 1% general
partner in MCN Michigan, a Michigan limited partnership. MCN Michigan
exists for the sole purpose of issuing its limited partnership interests
to the public in the form of preferred securities and investing the
proceeds thereof in debt securities of MCN.
5
<PAGE>
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, 1994, MichCon's distribution system included
15,252 miles of distribution mains, 1,035,542 service lines and
1,157,567 active meters. MichCon owns 2,393 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 30,500
horsepower and 4,935 horsepower, respectively. Properties relating to
five underground storage fields with an aggregate storage capacity of
approximately 130 Bcf consist principally of 474 gas storage wells (95
of which are observation 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, 1994, Citizens' distribution system included 377
miles of distribution mains, 12,179 service lines, and 13,003 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, 1994, MichCon distributed and
purchased the following volumes of natural gas:
1. 201,446,000 Mcf of natural gas was distributed at retail within
the state of Michigan. Also, 139,800,000 Mcf of natural gas was
distributed at retail 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. 128,046,000 Mcf of natural gas was purchased from various
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, 1994, Citizens distributed and
purchased the following volumes of natural gas:
1. 2,931,000 Mcf of natural gas was distributed at retail within the
state of Michigan and 220,000 Mcf of natural gas was distributed
at retail 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. No volumes of natural gas were purchased outside the state of
Michigan.
IV. INTEREST IN EXEMPT WHOLESALE GENERATORS AND FOREIGN UTILITY COMPANIES
None.
6
<PAGE>
EXHIBITS
Exhibit A - Attached hereto as Exhibit A are the unaudited Consolidating
Statement of Income for the year ended December 31, 1994 and
Consolidating Statement of Financial Position as of December 31,
1994, for MCN Corporation, MCN Investment Corporation and the Gas
Services segment of MCN Investment Corporation.
Exhibit B - Attached hereto as Exhibit B is the Financial Data Schedule
summarizing certain financial information for MCN Corporation.
Exhibit C - Corporate Structure, Exempt Wholesale Generators and Foreign
Utility Companies
Not applicable.
7
<PAGE>
MCN Corporation
Consolidating Income Statement
(Thousands of Dollars)
For the Year Ended December 31, 1994
(Unaudited)
<TABLE>
<CAPTION>
Blue Lake MCN MCNIC MCN
MCN MichCon Citizens Holdings Michigan Consolidated Eliminations Consolidated
------- ---------- --------- -------- -------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
OPERATING REVENUES
Gas sales $ - $ 954,815 $14,121 $ - $ - $343,958 $ (5,079) $1,307,815
Transportation and
storage services - 113,027 254 - - 11,237 (4,739) 119,779
Computer operations
services and other - 43,891 26 - - 90,166 (15,877) 118,206
------- ---------- ------- ------ ------ -------- -------- ----------
Total operating revenues - 1,111,733 14,401 - - 445,361 (25,695) 1,545,800
------- ---------- ------- ------ ------ -------- -------- ----------
OPERATING EXPENSES
Cost of gas - 529,426 7,230 - - 293,285 (6,505) 823,436
Operation and maintenance (4,306) 313,575 3,614 1 - 105,531 (19,190) 399,225
Depreciation, depletion
and amortization 728 84,230 586 - - 18,076 - 103,620
Property and other taxes 648 58,129 596 - - 5,615 - 64,988
------- ---------- ------- ------ ------ -------- -------- ----------
Total operating expenses (2,930) 985,360 12,026 1 - 422,507 (25,695) 1,391,269
------- ---------- ------- ------ ------ -------- -------- ----------
OPERATING INCOME (LOSS) 2,930 126,373 2,375 (1) - 22,854 - 154,531
------- ---------- ------- ------ ------ -------- -------- ----------
EQUITY IN EARNINGS (LOSS)
OF JOINT VENTURES - (672) - 5,344 - 1,617 - 6,289
------- ---------- ------- ------ ------ -------- -------- ----------
OTHER INCOME AND
(DEDUCTIONS)
Equity in earnings of
subsidiaries 77,768 1,715 - - - 1,715 (81,198) -
Interest income 514 4,064 127 5 1,553 2,333 (2,103) 6,493
Interest on long-term debt (497) (27,948) (92) (1) - (9,675) - (38,213)
Other interest expense (1,718) (9,093) (15) (13) - (1,981) 2,085 (10,735)
Dividends on preferred
securities of subsidiaries - (481) (1) - - - (1,536) (2,018)
Minority interest - - - - - (2,879) - (2,879)
Other (1,336) (4,732) 10 (48) (20) 467 18 (5,641)
------- ---------- ------- ------ ------ -------- -------- ----------
Total other income and
(deductions) 74,731 (36,475) 29 (57) 1,533 (10,020) (82,734) (52,993)
------- ---------- ------- ------ ------ -------- -------- ----------
INCOME BEFORE INCOME TAXES 77,661 89,226 2,404 5,286 1,533 14,451 (82,734) 107,827
INCOME TAX PROVISION
(BENEFIT) (107) 29,839 837 1,856 - (2,366) - 30,059
------- ---------- ------- ------ ------ -------- -------- ----------
NET INCOME $77,768 $ 59,387 $ 1,567 $3,430 $1,533 $ 16,817 $(82,734) $ 77,768
======= ========== ======= ====== ====== ======== ======== ==========
</TABLE>
8
<PAGE>
MCN Corporation
Consolidating Balance Sheet
(Thousands of Dollars)
As of December 31, 1994
(Unaudited)
<TABLE>
<CAPTION>
Blue Lake MCN MCNIC MCN
MCN MichCon Citizens Holdings Michigan Consolidated Eliminations Reclasses Consolidated
-------- ---------- -------- --------- -------- ------------ ------------ --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
CURRENT ASSETS
Cash and temporary
cash investments
at cost (which
approximates market
value) $ - $ 1,305 $ 9 $ 19 $ - $ 11,714 $ - $ (1,500) $ 11,547
Accounts receivable 3,099 150,302 1,732 - - 82,776 (7,491) (159) 230,259
Allowance for
doubtful accounts - (15,323) (70) - - (708) - - (16,101)
Accrued unbilled
revenues - 77,601 820 - - - - 4,632 83,053
Gas in inventory - 77,843 - - - 73,306 - (19,500) 131,649
Property taxes
assessed
applicable to
future periods 103 52,163 25 - - 2,437 - - 54,728
Gas receivable - - - - - - - 21,069 21,069
Other 97 21,744 446 - - 14,530 - (9,511) 27,306
-------- ---------- ------- ------- -------- -------- --------- -------- ----------
3,299 365,635 2,962 19 - 184,055 (7,491) (4,969) 543,510
-------- ---------- ------- ------- -------- -------- --------- -------- ----------
DEFERRED CHARGES AND
OTHER ASSETS
Investment in
subsidiaries 610,615 8,141 - - - 8,457 (627,213) - -
Investment in and
advances to joint
ventures - 12,650 - 17,698 - 34,157 - - 64,505
Deferred
postretirement
benefit cost - - - - - - - 20,670 20,670
Other 4,309 114,487 3,349 277 104,750 42,633 (100,181) (46,123) 123,501
-------- ---------- ------- ------- -------- -------- --------- -------- ----------
614,924 135,278 3,349 17,975 104,750 85,247 (727,394) (25,453) 208,676
-------- ---------- ------- ------- -------- -------- --------- -------- ----------
PROPERTY, PLANT AND
EQUIPMENT, AT COST 5,716 2,189,150 17,312 - - 392,647 - - 2,604,825
Less: Accumulated
depreciation and
depletion 1,120 1,071,588 7,072 - - 32,607 - - 1,112,387
-------- ---------- ------- ------- -------- -------- --------- -------- ----------
4,596 1,117,562 10,240 - - 360,040 - - 1,492,438
-------- ---------- ------- ------- -------- -------- --------- -------- ----------
$622,819 $1,618,475 $16,551 $17,994 $104,750 $629,342 $(734,885) $(30,422) $2,244,624
======== ========== ======= ======= ======== ======== ========= ======== ==========
</TABLE>
9
<PAGE>
MCN Corporation
Consolidating Balance Sheet
(Thousands of Dollars)
As of December 31, 1994
(Unaudited)
<TABLE>
<CAPTION>
Blue Lake MCN MCNIC MCN
MCN MichCon Citizens Holdings Michigan Consolidated Eliminations Reclasses Consolidated
-------- ---------- -------- -------- --------- ------------ ------------ --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
LIABILITIES AND
CAPITALIZATION
CURRENT LIABILITIES
Accounts payable $ 1,540 $ 80,671 $ 984 $ - $ - $ 62,719 $ (6,726) $ 3,459 $ 142,647
Notes payable (180) 168,457 187 - - 60,350 (7) - 228,807
Current portion of
long-term debt,
capital lease
obligations and
redeemable cumulative
preferred stock - 4,225 485 - - 2,609 - - 7,319
Federal income, property
and other taxes payable (902) 85,806 141 10 - 7,761 - (5,844) 86,972
Refunds payable to
customers - 344 1 - - - - 19,215 19,560
Customer deposits - 11,563 18 - - - - - 11,581
Other 2,055 67,347 744 (1) - 5,077 3 (7,416) 67,809
-------- ---------- ------- ------- -------- -------- --------- -------- ----------
2,513 418,413 2,560 9 - 138,516 (6,730) 9,414 564,695
-------- ---------- ------- ------- -------- -------- --------- -------- ----------
DEFERRED CREDITS AND
OTHER LIABILITIES
Accumulated deferred
income taxes (3,203) 217,899 1,988 1,386 - 46,503 - (79,236) 185,337
Unamortized investment
tax credit - 38,294 390 - - - - - 38,684
Tax benefits amortizable
to customers - - - - - - - 23,056 23,056
Accrued postretirement
benefit cost - - - - - - - 26,060 26,060
Minority interest - - - - - 18,670 - - 18,670
Other 111,997 75,089 2,705 - - 9,515 (101,100) (9,716) 88,490
-------- ---------- ------- ------- -------- -------- --------- -------- ----------
108,794 331,282 5,083 1,386 - 74,688 (101,100) (39,836) 380,297
-------- ---------- ------- ------- -------- -------- --------- -------- ----------
LONG-TERM DEBT,
INCLUDING CAPITAL
LEASE OBLIGATIONS - 448,329 475 - - 236,715 - - 685,519
-------- ---------- ------- ------- -------- -------- --------- -------- ----------
REDEEMABLE CUMULATIVE
PREF. SECURITIES - 2,618 - - 100,000 - - - 102,618
-------- ---------- ------- ------- -------- -------- --------- -------- ----------
COMMON SHAREHOLDERS'
EQUITY
Common stock 598 10,300 2,338 - 4,771 5 (17,414) - 598
Additional paid-in
capital 331,588 204,777 62 10,092 - 151,025 (365,973) - 331,571
Retained earnings 179,862 202,756 6,033 6,507 (21) 28,393 (243,668) - 179,862
Unearned compensation
and ESOP benefit (536) - - - - - - - (536)
-------- ---------- ------- ------- -------- -------- --------- -------- ----------
511,512 417,833 8,433 16,599 4,750 179,423 (627,055) - 511,495
-------- ---------- ------- ------- -------- -------- --------- -------- ----------
$622,819 $1,618,475 $16,551 $17,994 $104,750 $629,342 $(734,885) $(30,422) $2,244,624
======== ========== ======= ======= ======== ======== ========= ======== ==========
</TABLE>
10
<PAGE>
MCN Corporation
MCN Investment Corporation
Consolidating Income Statement
(Thousands of Dollars)
For the Year Ended December 31, 1994
(Unaudited)
<TABLE>
<CAPTION>
The Genix Total
Combustion Fuel Group Gas MCNIC
MCNIC Bridgewater Concepts Concepts G-TEC Consolidated Services Eliminations Consolidated
-------- ----------- ---------- -------- ----- ------------ -------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
OPERATING REVENUES
Gas sales $ - $ - $ - $ - $ - $ - $344,144 $ (186) $343,958
Transportation and
storage services - - - - - - 11,237 - 11,237
Computer operations
services and other - - - - 6 88,211 1,949 - 90,166
-------- --- ----- ----- ---- ------ -------- -------- --------
Total operating revenues - - - - 6 88,211 357,330 (186) 445,361
-------- --- ----- ----- ---- ------ -------- -------- --------
OPERATING EXPENSES
Cost of gas - - - - - 167 293,285 (167) 293,285
Operation and maintenance 10,151 - 326 117 31 73,517 21,408 (19) 105,531
Depreciation, depletion
and amortization (82) - 14 - 1 5,785 12,358 - 18,076
Property and other taxes 234 - - - 2 2,125 3,254 - 5,615
-------- --- ----- ----- ---- ------ -------- -------- --------
Total operating expenses 10,303 - 340 117 34 81,594 330,305 (186) 422,507
-------- --- ----- ----- ---- ------ -------- -------- --------
OPERATING INCOME (LOSS) (10,303) - (340) (117) (28) 6,617 27,025 - 22,854
-------- --- ----- ----- ---- ------ -------- -------- --------
EQUITY IN EARNINGS (LOSS)
OF JOINT VENTURES (92) - - - (30) - 1,739 - 1,617
-------- --- ----- ----- ---- ------ -------- -------- --------
OTHER INCOME AND
(DEDUCTIONS)
Equity in earnings of
subsidiaries 29,327 - - - - - 1,715 (29,327) 1,715
Interest income 1,352 - - (15) - 426 2,167 (1,597) 2,333
Interest on long-term debt (7,245) - - - (5) (9) (2,416) - (9,675)
Other interest expense (1,892) - (7) (15) - (1,396) (269) 1,598 (1,981)
Dividends on preferred
securities of
subsidiaries - - - - - - - - -
Minority interest - - - - - - (2,879) - (2,879)
Other (252) - - (3) (1) 101 623 (1) 467
-------- --- ----- ----- ---- ------ -------- -------- --------
Total other income
and (deductions) 21,290 - (7) (33) (6) (878) (1,059) (29,327) (10,020)
-------- --- ----- ----- ---- ------ -------- -------- --------
INCOME BEFORE INCOME TAXES 10,895 - (347) (150) (64) 5,739 27,705 (29,327) 14,451
INCOME TAX PROVISION
(BENEFIT) (5,922) (1) (121) (52) (22) 2,569 1,183 - (2,366)
-------- --- ----- ----- ---- ------ -------- -------- --------
NET INCOME (LOSS) $ 16,817 $ 1 $(226) $ (98) $(42) $3,170 $ 26,522 $(29,327) $ 16,817
======== === ===== ===== ==== ====== ======== ======== ========
</TABLE>
11
<PAGE>
MCN Corporation
MCN Investment Corporation
Consolidating Balance Sheet
(Thousands of Dollars)
As of December 31, 1994
(Unaudited)
<TABLE>
<CAPTION>
The Genix Total
Combustion Group Gas MCNIC
MCNIC Bridgewater Concepts Consolidated Services Eliminations Consolidated
-------- ----------- ---------- ------------ -------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
CURRENT ASSETS
Cash and temporary cash
investments at cost (which
approximates market value) $ 1,065 $32 $ 20 $ 5,669 $ 10,636 $ (5,708) $ 11,714
Accounts receivable 132 - 60 15,870 66,971 (257) 82,776
Allowance for doubtful accounts - - - (108) (600) - (708)
Accrued unbilled revenues - - - - - - -
Gas in inventory - - - - 73,306 - 73,306
Property taxes assessed
applicable to future periods - - 4 - 2,433 - 2,437
Gas receivable - - - - - - -
Other 314 - - 3,796 10,689 (269) 14,530
-------- --- ---- ------- -------- --------- --------
1,511 32 84 25,227 163,435 (6,234) 184,055
-------- --- ---- ------- -------- --------- --------
DEFERRED CHARGES AND OTHER ASSETS
Investment in subsidiaries 438,651 - - - 8,457 (438,651) 8,457
Investment in and advances to
joint ventures 200 - - - 33,957 - 34,157
Deferred postretirement benefit
cost - - - - - - -
Other 20,511 - 168 8,254 34,641 (20,941) 42,633
-------- --- ---- ------- -------- --------- --------
459,362 - 168 8,254 77,055 (459,592) 85,247
-------- --- ---- ------- -------- --------- --------
PROPERTY, PLANT AND EQUIPMENT,
AT COST 669 - 133 45,417 346,428 - 392,647
Less: Accumulated depreciation
and depletion 24 - 36 13,525 19,022 - 32,607
-------- --- ---- ------- -------- --------- --------
645 - 97 31,892 327,406 - 360,040
-------- --- ---- ------- -------- --------- --------
$461,518 $32 $349 $65,373 $567,896 $(465,826) $629,342
======== === ==== ======= ======== ========= ========
</TABLE>
12
<PAGE>
MCN Corporation
MCN Investment Corporation
Consolidating Balance Sheet
(Thousands of Dollars)
As of December 31, 1994
(Unaudited)
<TABLE>
<CAPTION>
The Genix Total
Combustion Group Gas MCNIC
MCNIC Bridgewater Concepts Consolidated Services Eliminations Consolidated
-------- ----------- ---------- ------------ -------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
LIABILITIES AND CAPITALIZATION
CURRENT LIABILITIES
Accounts payable $ 507 $ 1 $ 44 $ 9,707 $ 53,607 $ (1,147) $ 62,719
Notes payable 64,548 - - - - (4,198) 60,350
Current portion of long-term
debt, capital lease
obligations and redeemable
cumulative preferred stock - - - 849 1,760 - 2,609
Federal income, property and
other taxes payable (1,752) 447 25 870 8,171 - 7,761
Refunds payable to customers - - - - - - -
Customer deposits - - - - - - -
Other 2,896 - - 2,066 406 (291) 5,077
-------- ----- ------- ------- -------- --------- --------
66,199 448 69 13,492 63,944 (5,636) 138,516
-------- ----- ------- ------- -------- --------- --------
DEFERRED CREDITS AND OTHER
LIABILITIES
Accumulated deferred income taxes 957 233 47 2,482 42,784 - 46,503
Unamortized investment tax credit - - - - - - -
Tax benefits amortizable to
customers - - - - - - -
Accrued postretirement benefit
cost - - - - - - -
Minority interest - - - - 18,670 - 18,670
Other 2,921 - - 23,116 4,478 (21,000) 9,515
-------- ----- ------- ------- -------- --------- --------
3,878 233 47 25,598 65,932 (21,000) 74,688
-------- ----- ------- ------- -------- --------- --------
LONG-TERM DEBT, INCLUDING CAPITAL
LEASE OBLIGATIONS 212,000 - - 3,742 20,973 - 236,715
-------- ----- ------- ------- -------- --------- --------
REDEEMABLE CUMULATIVE PREFERRED
SECURITIES - - - - - - -
-------- ----- ------- ------- -------- --------- --------
COMMON SHAREHOLDERS' EQUITY
Common stock 5 - 1 - 51,683 (51,684) 5
Additional paid-in capital 151,043 (640) 1,620 21,687 336,705 (359,390) 151,025
Retained earnings 28,393 (9) (1,388) 854 28,659 (28,116) 28,393
Unearned compensation and
ESOP benefit - - - - - - -
-------- ----- ------- ------- -------- --------- --------
179,441 (649) 233 22,541 417,047 (439,190) 179,423
-------- ----- ------- ------- -------- --------- --------
$461,518 $ 32 $ 349 $65,373 $567,896 $(465,826) $629,342
======== ===== ======= ======= ======== ========= ========
</TABLE>
13
<PAGE>
MCN Corporation
Gas Services (Excluding Blue Lake Holdings)
Consolidating Income Statement
(Thousands of Dollars)
For the Year Ended December 31, 1994
(Unaudited)
<TABLE>
<CAPTION>
Cogen Storage Supply
CoEnergy CoEnergy Development Development Otsego Development
Canadian Trading Consolidated Consolidated Holdings Consolidated
-------- -------- ------------ ------------ -------- -------------
<S> <C> <C> <C> <C> <C> <C>
OPERATING REVENUES
Gas sales $ - $324,652 $12,421 $ 738 $ - $61,613
Transportation and storage services - 152 - - - -
Computer operations services and other - 273 43 - - 1,326
---- -------- ------- ------ ------ -------
Total operating revenues - 325,077 12,464 738 - 62,939
---- -------- ------- ------ ------ -------
OPERATING EXPENSES
Cost of gas - 309,544 9,662 578 - 28,909
Operation and maintenance - 11,833 699 215 2 7,558
Depreciation, depletion and amortizatation - 657 (363) - - 10,800
Property and other taxes - 225 64 (1) - 1,987
---- -------- ------- ------ ------ -------
Total operating expenses - 322,259 10,062 792 2 49,254
---- -------- ------- ------ ------ -------
OPERATING INCOME (LOSS) - 2,818 2,402 (54) (2) 13,685
---- -------- ------- ------ ------ -------
EQUITY IN EARNINGS (LOSS) OF JOINT VENTURES 262 - (1,477) 1,224 1,730 -
---- -------- ------- ------ ------ -------
OTHER INCOME AND (DEDUCTIONS)
Equity in earnings of subsidiaries - - - 1,715 - -
Interest income - 700 107 957 - 26
Interest on long-term debt - 25 - - - (812)
Other interest expense - - (11) (2) - (234)
Dividends on preferred securities
subsidiaries - - - - - -
Minority interest - - - - - -
Other (3) 40 928 (236) - -
---- -------- ------- ------ ------ -------
Total other income and (deductions) (3) 765 1,024 2,434 - (1,020)
---- -------- ------- ------ ------ -------
INCOME BEFORE INCOME TAXES 259 3,583 1,949 3,604 1,728 12,665
INCOME TAX PROVISION (BENEFIT) 117 1,269 620 667 606 (3,461)
---- -------- ------- ------ ------ -------
NET INCOME $142 $ 2,314 $ 1,329 $2,937 $1,122 $16,126
==== ======== ======= ====== ====== =======
<CAPTION>
Saginaw Saginaw
Bay Bay Westside Total
Pipeline Lateral Pipeline Gas
Consolidated Consolidated Consolidated Eliminations Services
------------ ------------ ------------ ------------ --------
<S> <C> <C> <C> <C> <C>
OPERATING REVENUES
Gas sales $ 116 $ - $ - $ (55,396) $344,144
Transportation and storage services 7,573 2,938 574 - 11,237
Computer operations services and other 51 23 233 - 1,949
------- ------ ---- --------- --------
Total operating revenues 7,740 2,961 807 (55,396) 357,330
------- ------ ---- --------- --------
OPERATING EXPENSES
Cost of gas (15) - 3 (55,396) 293,285
Operation and maintenance 721 151 229 - 21,408
Depreciation, depletion and amortization 869 280 115 - 12,358
Property and other taxes 730 217 32 - 3,254
------- ------ ---- --------- --------
Total operating expenses 2,305 648 379 (55,396) 330,305
------- ------ ---- --------- --------
OPERATING INCOME (LOSS) 5,435 2,313 428 - 27,025
------- ------ ---- --------- --------
EQUITY IN EARNINGS (LOSS) OF JOINT VENTURES - - - - 1,739
------- ------ ---- --------- --------
OTHER INCOME AND (DEDUCTIONS)
Equity in earnings of subsidiaries - - - - 1,715
Interest income 186 35 156 - 2,167
Interest on long-term debt (1,629) - - - (2,416)
Other interest expense (2) - (20) - (269)
Dividends on preferred securities
subsidiaries - - - - -
Minority interest (1,894) (969) (16) - (2,879)
Other (98) (8) - - 623
------- ------ ---- --------- --------
Total other income and (deductions) (3,437) (942) 120 - (1,059)
------- ------ ---- --------- --------
INCOME BEFORE INCOME TAXES 1,998 1,371 548 - 27,705
INCOME TAX PROVISION (BENEFIT) 701 472 192 - 1,183
------- ------ ---- --------- --------
NET INCOME $ 1,297 $ 899 $356 $ - $ 26,522
======= ====== ==== ========= ========
</TABLE>
14
<PAGE>
MCN Corporation
Gas Services (excluding Blue Lake Holdings)
Consolidating Balance Sheet
(Thousands of Dollars)
As of December 31, 1994
(Unaudited)
<TABLE>
<CAPTION>
Cogen Storage Supply
CoEnergy CoEnergy Development Development Otsego Development
Canadian Trading Consolidated Consolidated Holdings Consolidated
-------- -------- ------------ ------------ -------- -------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
CURRENT ASSETS
Cash and temporary cash investments
at cost (which approximates market value) $ - $ 4,145 $ 1,189 $ 76 $ 25 $ 3,398
Accounts receivable - 52,948 2,466 1,397 3 19,379
Allowance for doubtful account - (600) - - - -
Accrued unbilled revenues - - - - - -
Gas in inventory - 73,134 190 - - (18)
Property taxes assessed applicable
to future periods - 5 - - - 1,140
Gas receivable - - - - - -
Other - 7,901 23 4,010 1 216
---- -------- ------- ------- ------ --------
- 137,533 3,868 5,483 29 24,115
---- -------- ------- ------- ------ --------
DEFERRED CHARGES AND OTHER ASSETS
Investment in subsidiaries - - - 8,457 - -
Investment in and advances to joint ventures 391 - 7,474 17,843 7,237 1,012
Deferred postretirement benefit cost - - - - - -
Other 17 5,895 6,354 4,926 - 10,345
---- -------- ------- ------- ------ --------
408 5,895 13,828 31,226 7,237 11,357
---- -------- ------- ------- ------ --------
PROPERTY, PLANT AND EQUIPMENT, AT COST - 356 24 1,041 - 277,118
Less: Accumulated depreciation and depletion - 158 7 - - 12,377
---- -------- ------- ------- ------ --------
- 198 17 1,041 - 264,741
---- -------- ------- ------- ------ --------
$408 $143,626 $17,713 $37,750 $7,266 $300,213
==== ======== ======= ======= ====== ========
<CAPTION>
Saginaw Saginaw
Bay Bay Westside Total
Pipeline Lateral Pipeline Gas
Consolidated Consolidated Consolidated Eliminations Services
------------ ------------ ------------ ------------ --------
<S> <C> <C> <C> <C> <C>
ASSETS
CURRENT ASSETS
Cash and temporary cash investments
at cost (which approximates market value) $ 1,618 $ 139 $ 46 $ - $ 10,636
Accounts receivable 1,462 987 470 (12,141) 66,971
Allowance for doubtful account - - - - (600)
Accrued unbilled revenues - - - - -
Gas in inventory - - - - 73,306
Property taxes assessed applicable
to future periods 720 309 259 - 2,433
Gas receivable - - - - -
Other 387 7 303 (2,159) 10,689
------- ------- ------- -------- --------
4,187 1,442 1,078 (14,300) 163,435
------- ------- ------- -------- --------
DEFERRED CHARGES AND OTHER ASSETS
Investment in subsidiaries - - - - 8,457
Investment in and advances to joint ventures - - - - 33,957
Deferred postretirement benefit cost - - - - -
Other 3,901 3,027 191 (15) 34,641
------- ------- ------- -------- --------
3,901 3,027 191 (15) 77,055
------- ------- ------- -------- --------
PROPERTY, PLANT AND EQUIPMENT, AT COST 42,589 10,776 14,524 - 346,428
Less: Accumulated depreciation and depletion 4,942 1,418 120 - 19,022
------- ------- ------- -------- --------
37,647 9,358 14,404 - 327,406
------- ------- ------- -------- --------
$45,735 $13,827 $15,673 $(14,315) $567,896
======= ======= ======= ======== ========
</TABLE>
15<PAGE>
MCN Corporation
Gas Services (Excluding Blue Lake Holdings)
Consolidating Balance Sheet
(Thousands of Dollars)
As of December 31, 1994
(Unaudited)
<TABLE>
<CAPTION>
Cogen Storage Supply
CoEnergy CoEnergy Development Development Otsego Development
Canadian Trading Consolidated Consolidated Holdings Consolidated
-------- -------- ------------ ------------ -------- -------------
<S> <C> <C> <C> <C> <C> <C>
LIABILITIES AND CAPITALIZATION
CURRENT LIABILITIES
Accounts payable $ - $ 44,145 $ 3,530 $ 211 $ - $ 15,474
Notes payable - - - - - -
Current portion of long-term debt, capital
lease obligations and redeemable
cumulative preferred stock - - - - - -
Federal income, property and other taxes
payable 120 131 (71) (202) (8) 6,054
Refunds payable to customers - - - - - -
Customer deposits - - - - - -
Other - 184 - 2,157 1 -
---- -------- ------- ------- ------ --------
120 44,460 3,459 2,166 (7) 21,528
---- -------- ------- ------- ------ --------
DEFERRED CREDITS AND OTHER LIABILITIES
Accumulated deferred income taxes - (606) 11,349 2,858 426 21,273
Unamortized investment tax credit - - - - - -
Tax benefits amortizable to customers - - - - - -
Accrued postretirement benefit cost - - - - - -
Minority interest - - - - - -
Other - 3,443 1,034 - - -
---- -------- ------- ------- ------ --------
- 2,837 12,383 2,858 426 21,273
---- -------- ------- ------- ------ --------
LONG-TERM DEBT, INCLUDING CAPITAL
LEASE OBLIGATIONS - - - - - 1,613
---- -------- ------- ------- ------ --------
REDEEMABLE CUMULATIVE PREFERRED SECURITIES - - - - - -
---- -------- ------- ------- ------ --------
COMMON SHAREHOLDERS' EQUITY
Common stock - - - 1 - 51,682
Additional paid-in capital 109 90,421 68 40,704 4,134 184,493
Retained earnings 179 5,908 1,803 (7,979) 2,713 19,624
Unearned compensation and ESOP benefits - - - - - -
---- -------- ------- ------- ------ --------
288 96,329 1,871 32,726 6,847 255,799
---- -------- ------- ------- ------ --------
$408 $143,626 $17,713 $37,750 $7,266 $300,213
==== ======== ======= ======= ====== ========
<CAPTION>
Saginaw Saginaw
Bay Bay Westside Total
Pipeline Lateral Pipeline Gas
Consolidated Consolidated Consolidated Eliminations Services
------------ ------------ ------------ ------------ --------
<S> <C> <C> <C> <C> <C>
LIABILITIES AND CAPITALIZATION
CURRENT LIABILITIES
Accounts payable $ 129 $ 1,605 $ 669 $(12,156) $ 53,607
Notes payable - - - - -
Current portion of long-term debt, capital
lease obligations and redeemable
cumulative preferred stock 1,760 - - - 1,760
Federal income, property and other taxes
payable 1,487 563 97 - 8,171
Refunds payable to customers - - - - -
Customer deposits - - - - -
Other 223 - - (2,159) 406
------- ------- ------- -------- --------
3,599 2,168 766 (14,315) 63,944
------- ------- ------- -------- --------
DEFERRED CREDITS AND OTHER LIABILITIES
Accumulated deferred income taxes 5,878 1,378 228 - 42,784
Unamortized investment tax credit - - - - -
Tax benefits amortizable to customers - - - - -
Accrued postretirement benefit cost - - - - -
Minority interest 14,262 3,818 590 - 18,670
Other 1 - - - 4,478
------- ------- ------- -------- --------
20,141 5,196 818 - 65,932
------- ------- ------- -------- --------
LONG-TERM DEBT, INCLUDING CAPITAL
LEASE OBLIGATIONS 19,360 - - - 20,973
------- ------- ------- -------- --------
REDEEMABLE CUMULATIVE PREFERRED SECURITIES - - - - -
------- ------- ------- -------- --------
COMMON SHAREHOLDERS' EQUITY
Common stock - - - - 51,683
Additional paid-in capital (1,282) 4,387 13,671 - 336,705
Retained earnings 3,917 2,076 418 - 28,659
Unearned compensation and ESOP benefits - - - - -
------- ------- ------- -------- --------
2,635 6,463 14,089 - 417,047
------- ------- ------- -------- --------
$45,735 $13,827 $15,673 $(14,315) $567,896
======= ======= ======= ======== ========
</TABLE>
16
<PAGE>
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, 1995.
MCN CORPORATION
By: /s/ PATRICK ZURLINDEN
---------------------
Patrick Zurlinden
Vice President, Controller and
Chief Accounting 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
17
<TABLE> <S> <C>
<ARTICLE> OPUR3
<LEGEND>
THIS SCHEDULE CONTAINS MCN CORPORATION'S SUMMARY FINANCIAL
INFORMATION EXTRACTED FROM THE CONSOLIDATED BALANCE SHEET AS OF
DECEMBER 31, 1994, AND THE RELATED STATEMENT OF CONSOLIDATED
INCOME FOR THE YEAR ENDED DECEMBER 31, 1994, AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<BOOK-VALUE> PER-BOOK
<TOTAL-ASSETS> 2,244,624
<TOTAL-OPERATING-REVENUES> 1,545,800
<NET-INCOME> 77,768
</TABLE>
