<PAGE> 1
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) APRIL 18, 1996
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 April 18, 1996 MCN Corporation issued the following press release;
MCN CORPORATION REPORTS RECORD FIRST QUARTER EARNINGS
Detroit, April 18, 1996 - MCN Corporation today reported earnings of $80.1
million for the first quarter of 1996, an increase of $18.5 million from $61.6
million in the first quarter of 1995. Earnings per share for the first quarter
were a record $1.20 and up 17.6% compared to $1.02 in the first quarter of last
year. Earnings per share also reflect approximately 10% more shares
outstanding in the current quarter.
Alfred R. Glancy III, MCN Chairman, President and Chief Executive Officer said,
"MCN's growth continued in the first quarter of 1996 with higher earnings
achieved in all of our major business units. Our strategy to expand in various
segments of the natural gas industry continues to result in outstanding
performance. With a strong first quarter behind us, we anticipate yet another
record setting year in 1996."
MCN earned $115.2 million or $1.74 per share in the twelve months ended March
31, 1996 compared to $70.2 million or $1.18 per share earned in the comparable
1995 period.
GAS DISTRIBUTION
The Gas Distribution group earned $71.3 million during the first quarter of
1996, up $14.1 million from the first quarter of 1995. The increase in
earnings reflects higher gas sales from colder weather and increased
transportation deliveries. This business group contributed earnings per share
of $1.07 for the first quarter of 1996 compared to $.95 for the first quarter
of 1995.
-more-
<PAGE> 3
Page 2 - MCN First Quarter Earnings
Colder weather in the first quarter of 1996, compared to warm weather during
the first quarter of 1995, resulted in a $9.7 million or $.15 per share
improvement in earnings. For the quarter, gas sales volume increased 13.1
billion cubic feet (Bcf) to 103.6 Bcf, while end user and intermediate
transportation volumes increased 9% and 31%, respectively.
DIVERSIFIED ENERGY
The Diversified Energy group doubled its earnings in the quarter, contributing
earnings of $8.8 million or $.13 per share compared to $4.4 million or $.07 per
share in the first quarter of 1995. The increase was due primarily to higher
gas production from the company's exploration and production arm and more gas
sales with higher margins from gas marketing and cogeneration operations.
Income from recent acquisitions of gas gathering pipelines also contributed to
the increased earnings performance.
EXPLORATION AND PRODUCTION - Operating income increased to $6.5 million for the
quarter, up from $4.1 million in the first quarter of 1995. Gas and oil
production was 13.5 Bcf equivalent (Bcfe) in the quarter, an increase of 6.7
Bcfe or nearly 100% from the comparable 1995 quarter.
GAS MARKETING AND COGENERATION - Operating and joint venture income was $6.6
million, an increase of $4.4 million compared to the first quarter of 1995.
Quarterly gas sales were 70.8 Bcf compared to 43.5 Bcf a year earlier, a 63%
increase. The increase was driven by additional sales to the midwest and
northeast United States and eastern Canada. Additionally, volumes reflect
natural gas sales to a cogeneration plant in northwest Michigan, which started
operations in late 1995.
-more-
<PAGE> 4
Page 3 - MCN First Quarter Earnings
GAS GATHERING AND PROCESSING - Operating and joint venture income increased to
$2.5 million from $.1 million in the 1995 quarter, due to the acquisition of
interests in two gas gathering systems in late 1995 and early 1996. These
results reflect MCN's expansion of its gathering and processing investments
outside of Michigan.
GAS STORAGE - Joint venture income for the quarter was $1.4 million, down $.3
million from the first quarter of 1995.
DISCONTINUED OPERATIONS: GENIX - Net income for the first quarter of 1996 was
$1 million, unchanged from the comparable quarter in 1995. For the twelve
months ended March 31, 1996 net income from Genix was $3.6 million or $.05 per
share, compared to $3.4 million or $.06 per share for the comparable period
ended March 31, 1995. In April 1996, MCN announced that it is evaluating the
potential sale of the Genix Group, Inc.
MCN Corporation is a $3.2 billion (assets) diversified natural gas holding
company with gas markets and investments throughout North America. Its
principal subsidiaries are Michigan Consolidated Gas Company (MichCon), a
natural gas distribution and transmission company serving 1.2 million customers
in more than 500 communities throughout Michigan, and MCN Investment Company
(MCNIC). MCNIC owns subsidiaries involved in exploration and production, gas
marketing, cogeneration, gas storage, gathering and processing; and The Genix
Group, a computer operations management firm.
###
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MCN CORPORATION AND SUBSIDIARIES
NEWS RELEASE STATISTICS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED TWELVE MONTHS ENDED
MARCH 31, MARCH 31,
---------------------- -------------------------
1996 1995 1996 1995
-------- -------- -------- --------
(in Thousands, Except Per Share Amounts)
<S> <C> <C> <C> <C>
OPERATING REVENUES............................................. $793,218 $526,088 $1,762,362 $1,359,146
OPERATING EXPENSES............................................. 655,976 420,856 1,542,123 1,218,174
-------- -------- ---------- ----------
OPERATING INCOME (LOSS)
Gas Distribution............................................. 123,279 99,155 190,443 124,089
Diversified Energy:
Gas Services:
Exploration & Production................................. 6,517 4,118 20,859 15,294
Gas Marketing & Cogeneration............................. 6,409 2,589 9,603 3,540
Gas Gathering & Processing............................... 1,531 31 1,876 166
Corporate & Other.......................................... (494) (661) (2,542) (2,117)
-------- -------- ---------- ----------
Total Diversified Energy................................... 13,963 6,077 29,796 16,883
-------- -------- ---------- ----------
Total Operating Income....................................... 137,242 105,232 220,239 140,972
-------- -------- ---------- ----------
EQUITY IN EARNINGS (LOSS) OF JOINT VENTURES
Gas Storage.................................................. 1,384 1,731 5,569 6,735
Gas Marketing & Cogeneration................................. 217 (355) (314) (1,184)
Gas Gathering & Processing................................... 976 87 1,517 1,327
Other........................................................ (54) (219) (248) (943)
-------- -------- ---------- ----------
Total........................................................ 2,523 1,244 6,524 5,935
-------- -------- ---------- ----------
OTHER INCOME AND (DEDUCTIONS).................................. (22,682) (17,289) (70,368) (59,208)
-------- -------- ---------- ----------
INCOME FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES.......................................... 117,083 89,187 156,395 87,699
INCOME TAX PROVISION........................................... 38,029 28,626 44,733 20,918
-------- -------- ---------- ----------
INCOME FROM CONTINUING OPERATIONS.............................. 79,054 60,561 111,662 66,781
DISCONTINUED OPERATIONS, NET OF TAXES (1)...................... 1,013 1,029 3,571 3,455
-------- -------- ---------- ----------
NET INCOME..................................................... $ 80,067 $ 61,590 $ 115,233 $ 70,236
======== ======== ========== ==========
EARNINGS PER SHARE
Continuing Operations:
Gas Distribution............................................. $ 1.07 $ .95 $ 1.35 $ .90
Diversified Energy........................................... .12 .05 .34 .22
-------- -------- ---------- ----------
1.19 1.00 1.69 1.12
Discontinued Operations (1).................................... .01 .02 .05 .06
-------- -------- ---------- ----------
$ 1.20 $ 1.02 $ 1.74 $ 1.18
======== ======== ========== ==========
AVERAGE COMMON SHARES OUTSTANDING.............................. 66,566 60,595 66,216 59,766
======== ======== ========== ==========
DIVIDENDS PAID PER SHARE....................................... $ .2325 $ .2225 $ .9100 $ .8750
======== ======== ========== ==========
</TABLE>
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MCN CORPORATION AND SUBSIDIARIES
NEWS RELEASE STATISTICS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED TWELVE MONTHS ENDED
MARCH 31, MARCH 31,
--------------------------- -----------------------------
1996 1995 1996 1995
-------- -------- -------- --------
<S> <C> <C> <C> <C>
GAS MARKETS (MMcf)
Gas Distribution:
Gas Sales.................................. 103,571 90,452 222,935 188,896
End User Transportation.................... 47,461 43,645 149,577 138,732
Intermediate Transportation................ 148,028 112,570 409,886 323,123
-------- -------- -------- --------
Total...................................... 299,060 246,667 782,398 650,751
-------- -------- -------- --------
Diversified Energy:
Gas Sales:
Gas Marketing & Cogeneration............. 70,795 43,486 197,977 147,318
Exploration & Production (2)............. 8,712 3,256 21,649 10,696
Transportation............................. 16,171 548 16,714 771
-------- -------- -------- --------
Total...................................... 95,678 47,290 236,340 158,785
-------- -------- -------- --------
Less Intercompany Transactions............... 17,615 4,051 29,686 11,195
-------- -------- -------- --------
Total........................................ 377,123 289,906 989,052 798,341
======== ======== ======== ========
GAS PRODUCTION - DIVERSIFIED ENERGY (MMcf)..... 12,477 6,397 37,500 21,401
======== ======== ======== ========
OIL PRODUCTION - DIVERSIFIED ENERGY (Mbbl)..... 165 61 492 144
======== ======== ======== ========
EFFECT OF WEATHER
Degree Days.................................. 3,586 3,159 7,204 6,012
Percent Colder (Warmer) than Normal.......... 5.7 % (5.8)% 6.0 % (11.0)%
Increase (Decrease) from Normal in:
Gas Markets (MMcf)......................... 5,431 (5,248) 12,167 (17,359)
Net Income (000)........................... $ 4,930 $ (4,739) $ 11,086 $(15,772)
Earnings Per Share......................... $ .07 $ (.08) $ .17 $ (.26)
</TABLE>
MMcf - million cubic feet
Mbbl - thousand barrels
Notes: (1) Represents operations of The Genix Group, Inc., MCN's computer
operations subsidiary.
(2) Represents gas sales made directly to third parties by MCN's
exploration & production (E&P) operations. Other E&P production
is sold to affiliated companies for marketing.
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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 hereunto duly authorized.
MCN CORPORATION
By /s/ Sebastian Coppola
------------------------------
Sebastian Coppola
Vice President and Treasurer
Date: April 19, 1996
