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<PAGE> 1
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-3A-2 from the Provisions
of the Public Utility Holding Company Act of 1935
For The Year Ended December 31, 1997
MCN ENERGY GROUP INC.
hereby files with the Securities and Exchange Commission (SEC), pursuant to Rule
2, its statement claiming exemption as a holding company from the provisions of
the Public Utility Holding Company Act of 1935 (PUHCA of 1935), and submits the
following information:
I. NATURE OF BUSINESS OF CLAIMANT AND EVERY SUBSIDIARY THEREOF
MCN ENERGY GROUP INC.: MCN Energy Group Inc. (MCN or the Corporation)
is a diversified energy holding company with markets and investments throughout
North America and in Asia. 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
groups are Gas Distribution and Diversified Energy. Except where otherwise
indicated, the companies set forth below are Michigan corporations located at
500 Griswold Street, Detroit, Michigan 48226.
GAS DISTRIBUTION
MCN, 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): 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 1.2 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, and accounting.
Except where otherwise indicated, the companies set forth below are
wholly owned subsidiaries of MichCon.
1. Michigan Consolidated Homes Limited Dividend Housing Corporation
a/k/a MichCon Homes, a Delaware corporation, was sold on
April 1, 1997. MichCon Homes operated a 130-unit, low and moderate
income housing project in Detroit, Michigan.
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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 39 acre parcel along the Detroit River in Detroit, Michigan.
3. Blue Lake Holdings, Inc. (Blue Lake), holds a 25% interest in Blue Lake
Gas Storage Company, a partnership that has converted a depleted
natural gas field in northern Michigan into a 46 Bcf natural gas
storage field which it now operates.
4. MichCon Fuel Services Company markets natural gas as a vehicular fuel
and markets energy to residential and commercial customers through a
transportation brokerage pilot program.
5. MichCon Pipeline Company, through the subsidiaries below, is engaged in
pipeline projects.
a. MichCon Gathering Company owns and operates the Antrim Expansion
Pipeline.
b. Saginaw Bay Pipeline Company is the 66% general partner in Saginaw
Bay Area Limited Partnership, 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.
c. 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.
d. Westside Pipeline Company invests in various pipeline assets in
Michigan.
e. Thunder Bay Gathering Company acquired the Thunder Bay Pipeline in
December 1997. Thunder Bay Pipeline consists of 44 miles of
gathering lines situated in Alpena and Alcona Counties in northeast
Michigan.
f. MichCon Lateral Company was formed in 1997 to own, operate and
construct natural gas pipelines.
6. Huron Pipeline Company was formed in 1996 to acquire an ownership
interest in the ANR Link Pipeline, which transports natural gas to
Canada through a pipeline owned by Niagara Gas Transmission Limited, a
subsidiary of The Consumers Gas Co. Ltd.
a. Huron Gas Services Company, formed in 1996, markets pipeline
transportation services.
7. Kalkaska Gas Storage Limited Partnership holds a 53.5% general
partnership interest in the Cold Springs Gas Storage Limited
Partnership in Kalkaska County, Michigan.
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 more than 140
years. Citizens serves approximately 14,000 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.
2
<PAGE> 3
C. SOUTHERN MISSOURI GAS COMPANY: MCN has a 47.5% interest in Southern
Missouri Gas Company, L.P. which is a public utility engaged in the
distribution and transmission of natural gas. SMGC was organized in
1996 and, with its predecessors, has been in business since 1995. SMGC
serves approximately 6,000 residential, commercial, and industrial
customers in Southern Missouri. The principal executive offices of SMGC
are located at 301 East 17th Street, Mountain Grove, Missouri 65711.
SMGC conducts all of its business in the state of Missouri. Its rates
and other various phases of its operations are subject to the
jurisdiction of the Missouri Public Service Commission.
DIVERSIFIED ENERGY
D. MCN INVESTMENT CORPORATION (MCNIC): Organized in 1986, MCNIC is the
holding company for MCN's various diversified energy subsidiaries.
MCNIC, through its subsidiaries and joint ventures, engages in gas and
oil exploration, development and production, provides gathering,
processing and transmission services, engages in non-regulated energy
marketing activities, invests in electric generation and distribution
facilities, provides gas storage services and is involved in other
energy-related businesses. Except where otherwise indicated, the
companies set forth below are wholly owned subsidiaries of MCNIC.
Exploration & Production
1. MCNIC Oil & Gas Company (MOG) is engaged in natural gas
and oil exploration, development and production in the
Midwest/Appalachia, Midcontinent/Gulf Coast and Western
regions of the U.S. The following companies are direct
subsidiaries of MOG:
a. Elmira Antrim Company
b. GeoTrend Exploration, Inc.
c. Green Oak Development Company
d. Green River Antrim Company
e. Otsego Exploration Company, L.L.C.
f. MCNIC Enhanced Production, Inc. has a 75%
interest in Otsego EOR, L.L.C.
g. MCNIC Oil & Gas Midcontinent, Inc.
h. MCNIC Oil & Gas Canada, Inc. (a New Brunswick
corporation)
i. MCNIC Oil & Gas Properties, Inc.
i. SEM, a 50% joint venture, was
established to buy and sell E & P
Properties
j. MCNIC Oil & Gas Reid Properties, Inc. (a
Delaware corporation)
i. Appalachian Methane, Inc., a Delaware
corporation, holds a 50% interest
in Buchanan Production Co., a Virginia
general partnership.
ii. Appalachian Operators, Inc., a Delaware
corporation, holds a 50% interest
in Buchanan Production Co., a Virginia
general partnership.
iii. MCNIC Oakwood Gathering, Inc. (a
Delaware corporation)
k. MCNIC West Coast Company
l. Warner Antrim Company
m. MCNIC Oil & Gas CV Company
n. Pageant Corporation
Pipelines & Processing
MCNIC's Pipelines & Processing businesses are involved in
ventures that gather and transport natural gas from producing fields
to processing plants and/or markets. This business also includes
plants which process natural gas to remove CO2 and other impurities
and recover natural gas liquids. Additionally this segment has an
investment in a methanol production facility and other
energy-related businesses.
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2. MCNIC Pipeline & Processing Company engages in
pipeline and processing projects through the following
subsidiaries and partnerships.
a. MCNIC Offshore Pipeline & Processing Company holds a 33%
interest in the Blue Dolphin System.
b. MCNIC Michigan Holdings, Inc.
i. MCNIC CSG Pipeline Company holds a 50% interest
in Cardinal States Gathering.
ii. Bagley Processing Company (47% partnership
interest)
iii. Warner Treating Limited Liability Company (95%
interest)
iv. Terra-Westside Processing Company (85% interest)
v. ThunderBay Pipeline Company, L.L.C. (90% interest)
holds 2 CO2 Processing Plants.
c. MCNIC East Coast Pipeline Company holds a 20% interest
in the proposed Portland Natural Gas Transmission
System.
d. MCNIC Jonah Pipeline Company holds a 33% partnership
interest in Jonah Gas Gathering Company.
e. MCNIC Gulf Coast Gathering Company, holds a 1% general
partnership interest in Copano Pipeline & Processing
Group, L.P.
f. MCNIC Gulf Coast Limited, Inc., holds a 49% limited
partnership interest in Copano Pipeline & Processing
Group, L.P., and a 90% limited partnership interest in
CFS/Upper Gulf Coast, L.P., Copano Pipelines/Upper
Gulf Coast, L.P., and CES/Upper Gulf Coast, L.P.
g. MCNIC Mobile Bay Pipeline Company holds a 34.6% interest
in Dauphin Island Gathering Partners.
h. MCNIC Mobile Bay Processing Company holds a 42.8%
interest in Mobile Bay Processing Partners.
i. MCNIC South Texas Gathering Company holds a 1% general
partnership interest in each of CFS/Copano Bay, L.P.,
CFS/South Texas, L.P., CFS/Agua Dulce, L.P., CFS/Upper
Gulf Coast, L.P. and CES/Upper Gulf Coast, L.P.
j. MCNIC Upper Gulf Coast Pipeline & Processing Company
holds a 1% interest in Copano Pipeline/Upper Gulf Coast,
L.P.
k. MCNIC General Methanol Company holds a 1% general
partnership interest in Lyondell Methanol Company, L.P.
l. MCNIC Methanol Holdings Company holds a 24% limited
partnership interest in Lyondell Methanol Company, L.P.
m. American Central Western Oklahoma Gas Company (40%
interest)
n. Crown Asphalt Ridge, L.L.C. (75% interest)
o. Indiana Gathering, L.L.C. (69.5% interest)
p. MCNIC East Texas Gathering Company holds a
39.9% limited partnership interest in American Central
Eastern Texas Gas Company, L.P.
q. MCNIC East Texas Pipeline & Processing Company holds
a 0.1% general partnership interest in American Central
Eastern Texas Gas Company, L.P.
r. MCNIC CO2 Investment Company holds a 41.5% limited
partnership interest in PSCO2, L.P., a CO2 pipeline
project.
s. MCNIC Permian Basin Company holds a 0.99% general
partnership interest in PSCO2, L.P.
t. MCNIC Rodeo Gathering Inc.
4
<PAGE> 5
Energy Marketing, Gas Storage & Electric Power
MCNIC's Energy Marketing, Gas Storage & Electric Power businesses pursue
opportunities throughout North America and Asia, including energy marketing to
large-volume customers, investing in electric generation and distribution
facilities and providing gas storage services to affiliated marketing companies,
other gas utilities, pipeline companies and large-volume gas users.
3. 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. CoEnergy Trading Company holds a 50% interest in the
following:
a. U.S. CoEnergy Services, a Wisconsin general partnership
b. Torch CoEnergy, L.L.C.
c. DTE-CoEnergy, L.L.C.
4. CoEnergy Canadian Holdings, Ltd., a New Brunswick corporation, was
formed to market and sell natural gas in Canada and the
northeastern United States.
5. CoEnergy Supply Company engages in the purchase and sale of natural
gas, a portion of which is produced by subsidiaries of MCNIC Oil &
Gas Company.
6. MCNIC Gas Storage Company
a. South Romeo Gas Storage Company, a Michigan partnership in which
MCNIC Gas Storage Company has a 50% interest, owns and operates
the Washington 28 Gas Storage Field, a 10 Bcf storage field in
southeastern Michigan which provides storage services to MCNIC's
Energy Marketing and Electric Power operations. South Romeo Gas
Storage Company holds a 33% interest in South Romeo Gas Storage
Corporation.
b. W-10 Holdings, Inc., holds a 50% interest in Washington 10
Storage Partnership, a partnership that is developing and will
operate the Washington 10 Storage Field, a 42 Bcf storage field
in southeastern Michigan. Washington 10 Storage Partnership owns
Washington 10 Storage Corporation.
c. MCNIC Gas Storage Company, a subsidiary of MCNIC, sold its 25%
interest in Blue Lake Gas Storage Company in December 1997.
d. The Orchards Golf Limited Partnership, a Michigan partnership in
which MCNIC Gas Storage 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.
7. MCNIC Power Company pursues domestic and international power
generation related opportunities.
a. CDC Ada, Inc., is a 99% limited partner in Ada Cogeneration
Limited Partnership, which owns and operates a 30 megawatt
natural gas-fueled cogeneration facility in western
Michigan.
b. MCNIC Ada GP, Inc., was formed in 1996 and holds a 1% general
partnership interest in the Ada Cogeneration Limited
Partnership.
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<PAGE> 6
c. Ludington Cogeneration Co. is the 1% general partner in Michigan
Power L.P., a joint venture that built and operates a 123 megawatt
natural gas-fueled cogeneration plant in western Michigan.
d. Ludington Cogeneration Holdings, Ltd. is a 49% limited partner in
the 123 megawatt cogeneration plant mentioned above.
e. Summit Computing, Inc., a Delaware corporation, holds a
99% limited partnership interest in Source Midland Limited
Partnership. Source Midland Limited Partnership has an 18.125%
general partnership interest in the Midland Cogeneration Venture
Limited Partnership.
f. Source Cogeneration Company, a Delaware corporation, holds
a 1% general partnership interest in Source Midland Limited
Partnership.
g. Mobile Bay Energy, L.L.C. is constructing a 40 megawatt
cogeneration facility in Alabama (50% interest).
Other
8. MCNIC International Holdings and MCNIC-GP International Holdings, each
of Grand Cayman, Cayman Islands, hold a 99% and 1% interest,
respectively, in IG-ONE LTD of Port-Louis, Mauritius. IG-ONE LTD. has a
40 percent interest in Torrent Power Limited, a joint venture with
Torrent Group of Ahmedabad, India. The joint venture will be involved in
the electric generation and distribution business in western India. IG
-ONE LTD. also holds ownership interests in other power generation
projects in India.
9. MCNIC Nepal Limited holds a 65% ownership interest in a 36 megawatt
hydroelectric power project in Nepal.
10. MCNIC Colombia Holdings was formed to be the shareholder of MCNIC
Colombia International, which holds a 40% interest in an urea processing
plant in Colombia.
11. Bridgewater Holdings, Inc. holds a limited partnership interest in
Bridgewater Place, a Grand Rapids, Michigan office building.
12. Combustion Concepts, Inc., holds patents for the development of
pressurized combustion technologies which provide increased fuel
efficiency, heat uniformity and compactness of equipment.
E. 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.
F. MCN FINANCING I: MCN is the sole owner of MCN Financing I, a Delaware
Business Trust. MCN Financing I exists for the sole purpose of issuing
preferred securities to the public and lending the gross proceeds thereof to
MCN in exchange for MCN's Junior Subordinated Debentures.
G. MCN FINANCING II: MCN is the sole owner of MCN Financing II, a Delaware
Business Trust. MCN Financing II exists for the sole purpose of issuing
preferred securities and lending the gross proceeds thereof to MCN.
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<PAGE> 7
H. MCN FINANCING III: MCN is the sole owner of MCN Financing III, a Delaware
Business Trust. MCN Financing III exists for the sole purpose of issuing
preferred securities to the public and lending the gross proceeds thereof
to MCN in exchange for MCN's Junior Subordinated Debentures.
I. MCN FINANCING IV: MCN is the sole owner of MCN Financing IV, a Delaware
Business Trust. MCN Financing IV exists for the sole purpose of issuing
preferred securities and lending the gross proceeds thereof to MCN.
J. MCN FINANCING V: MCN is the sole owner of MCN Financing V, a Delaware
Business Trust. MCN Financing V exists for the sole purpose of issuing
preferred securities and lending the gross proceeds thereof to MCN in
exchange for MCN's Junior Subordinated Debentures.
K. MCN FINANCING VI: MCN is the sole owner of MCN Financing VI, a Delaware
Business Trust. MCN Financing VI exists for the sole purpose of issuing
preferred securities and lending the gross proceeds thereof to MCN in
exchange for MCN's Junior Subordinated Debentures.
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, 1997, MichCon's distribution system included 16,537
miles of distribution mains, 1,076,212 service lines and 1,190,314
active meters. MichCon owns 2,549 miles of transmission and production
lines which deliver natural gas to the distribution districts and
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 28,300 horsepower and 4,105
horsepower, respectively. Properties relating to five underground
natural gas storage fields with an aggregate working gas storage
capacity of approximately 130 Bcf consist principally of 416 gas storage
wells (82 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. In January
1998, MichCon purchased its principal office building in Detroit, The
Guardian Building, ending its long-term capital lease obligation. MichCon
occupies its principal office building in Grand Rapids under a long-term
lease. Portions of these buildings are subleased to affiliates and
others.
B. Citizens owns the following properties, all of which are located in
Michigan.
At December 31, 1997, Citizens' distribution system included 455
miles of distribution mains, 13,532 service lines, and 14,493 active
meters. Citizens owns all of its properties used in the conduct of the
utility business. Included are a two story office building and a one
story service center.
C. SMGC owns the following properties, all of which are located in Missouri.
At December 31, 1997, SMGC's distribution system included 317 miles of
distribution mains, 7,756 service lines, and 6,051 active meters. SMGC
owns 124 miles of transmission lines and metering stations which deliver
natural gas to the various cities it serves. SMGC leases its
office/service center.
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<PAGE> 8
III. PUBLIC UTILITY DISTRIBUTION AND PURCHASE OF NATURAL GAS
A. During the year ended December 31, 1997, MichCon distributed and purchased
the following volumes of natural gas:
1. 205,760,000 Mcf of natural gas was distributed at retail within the state
of Michigan. Also, 144,538,000 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. 130,887,000 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, 1997, Citizens distributed and
purchased the following volumes of natural gas:
1. 3,262,000 Mcf of natural gas was distributed at retail within the state
of Michigan and 208,000 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.
C. During the year ended December 31, 1997, SMGC distributed and purchased the
following volumes of natural gas:
1. 736,000 Mcf of natural gas was distributed at retail within the state of
Missouri and 239,000 Mcf of natural gas was distributed at retail under
transportation contracts within the state of Missouri.
2. No volumes of natural gas were distributed at retail outside the state of
Missouri.
3. No volumes of natural gas were distributed at wholesale outside the state
of Missouri.
4. 735,000 Mcf of natural gas was purchased from suppliers outside the state
of Missouri. These volumes were transported by Williams Natural Gas
Company to a point of delivery within the state of Missouri.
8
<PAGE> 9
IV. INTEREST IN EXEMPT WHOLESALE GENERATORS AND FOREIGN UTILITY COMPANIES
EXEMPT WHOLESALE GENERATORS
None.
FOREIGN UTILITY COMPANIES
A. BHOTE KOSHI POWER COMPANY PRIVATE LIMITED (BKPC)
1. BKPC is a 36 megawatt hydroelectric power project currently being
developed and constructed in the Sindhupalchok District of Nepal, at KHA
1-960 Kalimati, Tahachal Kathmandu, Nepal.
2. Panda of Nepal owns 75% of the issued shares of Bhote Koshi Power
Company Private Limited. Panda Bhote Koshi, a Cayman Islands exempted
company, wholly-owns Panda of Nepal. MCNIC Nepal Limited owns 100%
of the Class B Capital Stock of Panda Bhote Koshi.
3. As of December 31, 1997, MCN has a $3.8 million equity investment in
BKPC.
4. Capitalization and earnings information unavailable.
5. There are no service, sales or construction contracts between BKPC and
MCN or an affiliate of MCN.
B. THE SURAT ELECTRICITY COMPANY LIMITED (SEC)
1. SEC is an electricity distributing company that purchases power from the
State of Gujarat Electricity Board and distributes it to the City of
Surat, India. Power is received at eight receiving stations, with a
transmission system consisting of approximately 512 kilometers of high
tension mains and approximately 1,593 kilometers of low tension mains.
SEC's principal business address is at Station Road Surat-395 003, India.
2. Torrent Power Limited (TPL), a joint venture with the Torrent Group of
Ahmedabad,is a public company incorporated with liability under The
Companies Act, India with a 43% interest in The Surat Electricity
Company Limited. IG-ONE LTD. of Port-Louis, Mauritius owns a 40%
interest in TPL.
3. As of December 31, 1997, MCN has a $108 million equity investment in TPL.
4. Capitalization and earnings information unavailable.
5. There are no service, sales or construction contracts between SEC and MCN
or an affiliate of MCN.
C. GUJARAT TORRENT ENERGY CORPORATION LIMITED (GTEC)
1. GTEC is a 655 megawatt gas/naptha power plant currently under
construction in Bharuch, India. GTEC's principal business address is at
Ashram Road Ahmedabad-380 009, India.
2. Torrent Power Limited (TPL) owns approximately 42% of GTEC. IG-ONE
LTD., through its 40% ownership in TPL, maintains an interest in
Gujarat Torrent Energy Corporation Limited.
3. As of December 31, 1997, MCN has a $108 million equity investment in TPL.
4. Capitalization and earnings information unavailable.
5. There are no service, sales or construction contracts between GTEC and
MCN or an affiliate of MCN.
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D. THE AHMEDABAD ELECTRICITY COMPANY LIMITED (AEC)
1. AEC currently owns five generating plants in the State of Gujarat in
India with a combined installed capacity of 550 megawatts. Of these
plants, four are located at Sabarmati in Ahmedabad, Gujarat and consist
of one 120 megawatt unit and three 110 megawatt coal-fired units. In
addition, AEC owns a 100 megawatt combined cycle, gas/naptha fired plant
at Vatwa, near Ahmedabad. AEC's transmission system consists of
approximately 2,329 kilometers of high tension mains and approximately
7,585 kilometers of low tension mains. AEC's principal business address
is at Bhadra Lal Darwaja Ahmedabad-380 001, India.
2. Torrent Power Limited (TPL) owns approximately 37% of AEC. IG-ONE LTD.,
through its 40% ownership in TPL maintains an interest in The
Ahmedabad Electricity Company Limited.
3. As of December 31, 1997, MCN has a $108 million equity investment in TPL.
4. Capitalization and earnings information unavailable.
5. There are no service, sales or construction contracts between AEC and MCN
or an affiliate of MCN.
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EXHIBITS
Exhibit A - Attached hereto as Exhibit A are the unaudited Consolidating
Statements of Income for the year ended December 31, 1997 and
Consolidating Statements of Financial Position as of December 31,
1997, for MCN Energy Group Inc., MCNIC and the Gas Services
segment of MCNIC.
Exhibit B - Attached hereto as Exhibit B is the unaudited Financial Data
Schedule summarizing certain financial information for MCN Energy
Group Inc.
Exhibit C - Corporate Structure, Exempt Wholesale Generators and Foreign
Utility Companies
See Items IV.A.2., IV.B.2., IV.C.2, and IV.D.2.
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SIGNATURES
The above-named claimant has caused this statement to be duly executed on
its behalf by its authorized officer on this 25th day of February, 1997.
MCN ENERGY GROUP INC.
By: /s/ Harold Gardner
Harold Gardner
Vice President, Controller and
Chief Accounting Officer
CORPORATE SEAL:
Attest:
/s/ Daniel L. Schiffer
Daniel L. Schiffer
Senior 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
Senior Vice President,
General Counsel and Secretary
MCN Energy Group Inc.
500 Griswold Street
Detroit, Michigan 48226
<PAGE> 13
EXHIBIT A
MCN ENERGY GROUP INC.
CONSOLIDATING BALANCE SHEET
(IN THOUSANDS)
AS OF DECEMBER 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
FINANCING MCNIC
MCN MICHCON CITIZENS COMPANIES CONSOL.
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents
at cost (which approximates market value) $ 5,124 $ 14,353 $ 22 $ -- $ 25,119
Accounts receivable 14,249 210,677 1,566 -- 240,867
Allowance for doubtful accounts -- (15,015) (75) -- (621)
Accrued unbilled revenues -- 91,896 1,114 -- --
Gas in inventory -- 40,201 -- -- 16,576
Property taxes assessed applicable to
future periods 187 64,827 29 -- 2,835
Accrued gas cost recovery revenues -- 12,862 -- -- --
Other 2,676 33,361 508 1,130 17,612
----------------------------------------------------------------------------
22,236 453,162 3,164 1,130 302,388
----------------------------------------------------------------------------
DEFERRED CHARGES AND OTHER ASSETS
Investment in debt and equity securities -- 35,110 -- -- 62,060
Deferred swap losses and receivables -- -- -- -- 51,023
Deferred postretirement benefit costs 651 -- -- -- --
Deferred environmental costs -- 27,699 2,535 -- --
Prepaid benefit costs (3,418) 85,790 -- -- --
Other 4,503 46,972 2,983 526,101 34,287
----------------------------------------------------------------------------
1,736 195,571 5,518 526,101 147,370
----------------------------------------------------------------------------
INVESTMENTS IN AND ADVANCES TO JOINT
VENTURES AND SUBSIDIARIES 1,671,034 19,643 -- -- 528,492
----------------------------------------------------------------------------
PROPERTY, PLANT AND EQUIPMENT, AT COST 14,836 2,790,352 23,082 -- 1,358,504
Less: Accumulated depreciation and depletion 4,615 1,322,392 8,336 -- 152,707
----------------------------------------------------------------------------
10,221 1,467,960 14,746 -- 1,205,797
----------------------------------------------------------------------------
$ 1,705,227 $ 2,136,336 $ 23,428 $ 527,231 $ 2,184,047
============================================================================
<CAPTION>
ELIM. & MCN
RECLASSES CONSOL.
------------------------------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents
at cost (which approximates market value) $ (5,123) $ 39,495
Accounts receivable (47,200) 420,159
Allowance for doubtful accounts -- (15,711)
Accrued unbilled revenues -- 93,010
Gas in inventory -- 56,777
Property taxes assessed applicable to
future periods 1 67,879
Accrued gas cost recovery revenues -- 12,862
Other (1,198) 54,089
------------------------------
(53,520) 728,560
------------------------------
DEFERRED CHARGES AND OTHER ASSETS
Investment in debt and equity securities 351 97,521
Deferred swap losses and receivables -- 51,023
Deferred postretirement benefit costs -- 651
Deferred environmental costs -- 30,234
Prepaid benefit costs (2,130) 80,242
Other (529,316) 85,530
------------------------------
(531,095) 345,201
------------------------------
INVESTMENTS IN AND ADVANCES TO JOINT
VENTURES AND SUBSIDIARIES (1,662,193) 556,976
------------------------------
PROPERTY, PLANT AND EQUIPMENT, AT COST -- 4,186,774
Less: Accumulated depreciation and depletion -- 1,488,050
------------------------------
-- 2,698,724
------------------------------
$(2,246,808) $ 4,329,461
==============================
</TABLE>
<PAGE> 14
MCN ENERGY GROUP INC.
CONSOLIDATING BALANCE SHEET
(IN THOUSANDS)
AS OF DECEMBER 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
FINANCING MCNIC
MCN MICHCON CITIZENS COMPANIES CONSOL.
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
LIABILITIES AND CAPITALIZATION
CURRENT LIABILITIES
Accounts payable $ 2,919 $ 130,267 $ 1,760 $ -- $ 238,952
Notes payable -- 241,691 5,182 -- 163,113
Current portion of long-term debt and capital
lease obligations -- 34,956 365 -- 1,557
Federal income, property and other taxes
payable 158 78,630 243 -- 12,681
Customer deposits -- 16,363 19 -- --
Other 11,936 67,780 1,100 1,131 29,198
------------------------------------------------------------------------------
15,013 569,687 8,669 1,131 445,501
------------------------------------------------------------------------------
DEFERRED CREDITS AND OTHER LIABILITIES
Accumulated deferred income taxes (5,860) 83,905 1,218 -- 73,874
Unamortized investment tax credit -- 32,745 301 -- --
Tax benefits amortizable to customers -- 122,922 443 -- --
Deferred swap gains and payables -- -- -- -- 41,717
Accrued environmental costs -- 32,000 3,000 -- --
Minority interest -- 17,283 -- -- 1,905
Other 535,526 44,663 1,364 -- 16,586
------------------------------------------------------------------------------
529,666 333,518 6,326 -- 134,082
------------------------------------------------------------------------------
CAPITALIZATION
Long-term debt, including capital lease obligations -- 617,107 -- -- 595,457
Redeemable preferred securities of subsidiaries -- -- -- 505,103 --
Common shareholders' equity 1,160,548 616,024 8,433 20,997 1,009,007
------------------------------------------------------------------------------
1,160,548 1,233,131 8,433 526,100 1,604,464
------------------------------------------------------------------------------
$ 1,705,227 $2,136,336 $ 23,428 $ 527,231 $ 2,184,047
==============================================================================
<CAPTION>
ELIM. & MCN
RECLASSES CONSOL.
-------------------------------
<S> <C> <C>
LIABILITIES AND CAPITALIZATION
CURRENT LIABILITIES
Accounts payable $ (47,142) $ 326,756
Notes payable (8,260) 401,726
Current portion of long-term debt and capital
lease obligations -- 36,878
Federal income, property and other taxes
payable -- 91,712
Customer deposits -- 16,382
Other (1,198) 109,947
-----------------------------
(56,600) 983,401
-----------------------------
DEFERRED CREDITS AND OTHER LIABILITIES
Accumulated deferred income taxes 22 153,159
Unamortized investment tax credit -- 33,046
Tax benefits amortizable to customers -- 123,365
Deferred swap gains and payables -- 41,717
Accrued environmental costs -- 35,000
Minority interest -- 19,188
Other (528,250) 69,889
-----------------------------
(528,228) 475,364
-----------------------------
CAPITALIZATION
Long-term debt, including capital lease obligations -- 1,212,564
Redeemable preferred securities of subsidiaries 1 505,104
Common shareholders' equity (1,661,981) 1,153,028
-----------------------------
(1,661,980) 2,870,696
-----------------------------
$(2,246,808) $4,329,461
=============================
</TABLE>
<PAGE> 15
MCN ENERGY GROUP INC.
CONSOLIDATING INCOME STATEMENT
(IN THOUSANDS)
FOR THE YEAR ENDED DECEMBER 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
BLUE LAKE FINANCING
MCN MICHCON CITIZENS HOLDINGS COMPANIES
--------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
OPERATING REVENUES
Gas and oil sales $ -- $ 1,062,794 $ 17,309 $ -- $ --
Transportation -- 139,737 233 -- --
Other -- 51,148 65 -- --
--------------------------------------------------------------------------
-- 1,253,679 17,607 -- --
--------------------------------------------------------------------------
OPERATING EXPENSES
Cost of gas -- 632,229 9,749 -- --
Operation and maintenance (1,826) 282,640 4,104 -- 3
Depreciation, depletion and amortization 1,545 103,703 734 -- --
Property and other taxes 1,117 60,744 562 -- --
--------------------------------------------------------------------------
836 1,079,316 15,149 -- 3
--------------------------------------------------------------------------
OPERATING INCOME (LOSS) (836) 174,363 2,458 -- (3)
--------------------------------------------------------------------------
EQUITY IN EARNINGS OF JOINT VENTURES AND SUBSIDIARIES 142,567 1,199 -- 4,397 --
--------------------------------------------------------------------------
OTHER INCOME AND (DEDUCTIONS)
Interest income 1,204 4,659 76 -- 31,865
Interest on long-term debt 441 (45,526) (33) -- --
Other interest expense (951) (8,664) (302) -- --
Dividends on preferred securities of subsidiaries -- -- -- -- --
Gains related to DIGP -- -- -- -- --
Other 284 (1,346) 2 -- --
--------------------------------------------------------------------------
978 (50,877) (257) -- 31,865
--------------------------------------------------------------------------
INCOME BEFORE INCOME TAXES 142,709 124,685 2,201 4,397 31,862
INCOME TAX PROVISION 403 45,665 631 1,539 --
--------------------------------------------------------------------------
NET INCOME $ 142,306 $ 79,020 $ 1,570 $ 2,858 $ 31,862
==========================================================================
<CAPTION>
MCNIC ELIM. & MCN
CONSOL. RECLASSES CONSOL.
-----------------------------------------------
<S> <C> <C> <C>
OPERATING REVENUES
Gas and oil sales $ 933,861 $ 454 $ 2,014,418
Transportation 526 (10,543) 129,953
Other 16,882 (4,599) 63,496
----------------------------------------------
951,269 (14,688) 2,207,867
----------------------------------------------
OPERATING EXPENSES
Cost of gas 689,182 (10,090) 1,321,070
Operation and maintenance 113,018 (4,598) 393,341
Depreciation, depletion and amortization 75,630 -- 181,612
Property and other taxes 13,068 -- 75,491
----------------------------------------------
890,898 (14,688) 1,971,514
----------------------------------------------
OPERATING INCOME (LOSS) 60,371 -- 236,353
----------------------------------------------
EQUITY IN EARNINGS OF JOINT VENTURES AND SUBSIDIARIES 52,356 (144,860) 55,659
----------------------------------------------
OTHER INCOME AND (DEDUCTIONS)
Interest income 6,378 (33,016) 11,166
Interest on long-term debt (30,052) -- (75,170)
Other interest expense (34,382) 33,016 (11,283)
Dividends on preferred securities of subsidiaries -- (31,090) (31,090)
Gains related to DIGP 2,398 -- 2,398
Other 7,669 (212) 6,397
----------------------------------------------
(47,989) (31,302) (97,582)
----------------------------------------------
INCOME BEFORE INCOME TAXES 64,738 (176,162) 194,430
INCOME TAX PROVISION 3,886 -- 52,124
----------------------------------------------
NET INCOME $ 60,852 $ (176,162) $ 142,306
==============================================
</TABLE>
<PAGE> 16
MCN ENERGY GROUP, INC.
MCN INVESTMENT CORPORATION
CONSOLIDATING BALANCE SHEET
(IN THOUSANDS)
AS OF DECEMBER 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
Combustion
MCNIC Bridgewater Concepts
------------------------------------------------------
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents
at cost (which approximates market value) $ 609,241 $ 26 $ 17
Accounts receivable 19,798 - -
Allowance for doubtful accounts - - -
Gas in inventory - - -
Property taxes assessed applicable to
future periods - 5 -
Other 4,294 - -
------------------------------------------------------
633,333 31 17
------------------------------------------------------
DEFERRED CHARGES AND OTHER ASSETS
Investment in debt and equity securities 45,998 - -
Deferred swap losses and receivables - - -
Other 7,572 73 71
------------------------------------------------------
53,570 73 71
------------------------------------------------------
INVESTMENTS IN AND ADVANCES TO JOINT
VENTURES AND SUBSIDIARIES 1,027,219 - -
------------------------------------------------------
PROPERTY, PLANT AND EQUIPMENT, AT COST 1,115 984 -
Less: Accumulated depreciation and depletion 36 - -
------------------------------------------------------
1,079 984 -
------------------------------------------------------
$ 1,715,201 $ 1,088 $ 88
======================================================
<CAPTION>
TOTAL
GAS ELIM. & MCNIC
SERVICES RECLASSES CONSOL.
----------------------------------------------------
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents
at cost (which approximates market value) $ 46,944 $ (631,109) $ 25,119
Accounts receivable 252,480 (31,411) 240,867
Allowance for doubtful accounts (621) - (621)
Gas in inventory 18,960 (2,384) 16,576
Property taxes assessed applicable to
future periods 2,830 - 2,835
Other 10,316 3,002 17,612
-------------------------------------------------------
330,909 (661,902) 302,388
-------------------------------------------------------
DEFERRED CHARGES AND OTHER ASSETS
Investment in debt and equity securities 4,294 11,768 62,060
Deferred swap losses and receivables 51,023 - 51,023
Other 114,437 (87,866) 34,287
------------------------------------------------------
169,754 (76,098) 147,370
------------------------------------------------------
INVESTMENTS IN AND ADVANCES TO JOINT
VENTURES AND SUBSIDIARIES 528,117 (1,026,844) 528,492
------------------------------------------------------
PROPERTY, PLANT AND EQUIPMENT, AT COST 1,356,404 1 1,358,504
Less: Accumulated depreciation and depletion 152,671 - 152,707
------------------------------------------------------
1,203,733 1 1,205,797
------------------------------------------------------
$2,232,513 $1,764,843 $2,184,047
======================================================
</TABLE>
<PAGE> 17
MCN ENERGY GROUP INC.
MCN INVESTMENT CORPORATION
CONSOLIDATING BALANCE SHEET
(IN THOUSANDS)
AS OF DECEMBER 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
TOTAL
COMBUSTION GAS
MCNIC BRIDGEWATER CONCEPTS SERVICES
----------------------------------------------------
<S> <C> <C> <C> <C>
LIABILITIES AND CAPITALIZATION
CURRENT LIABILITIES
Accounts payable $ 11,180 $ 4 $ 1 $ 249,589
Notes payable 85,040 - - 620,964
Current portion of long-term debt, capital lease
obligations and redeemable cumulative
preferred securities 90,358 - - 1,557
Federal income, property and other taxes
payable 2,580 217 27 9,857
Other 17,330 - - 5,260
----------------------------------------------------
206,488 221 28 887,227
----------------------------------------------------
DEFERRED CREDITS AND OTHER LIABILITIES
Accumulated deferred income taxes 3,602 557 2 154,770
Deferred swap gains and payables - - - 41,717
Minority interest - - - 1,905
Other 8,584 - 36 14,388
----------------------------------------------------
12,186 557 38 212,780
----------------------------------------------------
CAPITALIZATION
Long-term debt, including capital lease obligations 480,000 - - 115,457
Common shareholders' equity 1,016,527 310 22 1,017,049
----------------------------------------------------
1,496,527 310 22 1,132,506
----------------------------------------------------
$ 1,715,201 $ 1,088 $ 88 $ 2,232,513
====================================================
<CAPTION>
ELIM. & MCNIC
RECLASSES CONSOL.
----------------------------
<S> <C> <C>
LIABILITIES AND CAPITALIZATION
CURRENT LIABILITIES
Accounts payable $ (21,822) $ 238,952
Notes payable (542,891) 163,113
Current portion of long-term debt, capital lease
obligations and redeemable cumulative
preferred securities (90,358) 1,557
Federal income, property and other taxes
payable - 12,681
Other 6,608 29,198
----------------------------
(648,463) 445,501
----------------------------
DEFERRED CREDITS AND OTHER LIABILITIES
Accumulated deferred income taxes (85,057) 73,874
Deferred swap gains and payables - 41,717
Minority interest - 1,905
Other (6,422) 16,586
----------------------------
(91,479) 134,082
----------------------------
CAPITALIZATION
Long-term debt, including capital lease obligations - 595,457
Common shareholders' equity (1,024,901) 1,009,007
----------------------------
(1,024,901) 1,604,464
----------------------------
$ (1,764,843) $2,184,047
============================
</TABLE>
<PAGE> 18
MCN ENERGY GROUP INC.
MCN INVESTMENT CORPORATION
CONSOLIDATING INCOME STATEMENT
(IN THOUSANDS)
FOR THE YEAR ENDED DECEMBER 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
COMBUSTION
MCNIC BRIDGEWATER CONCEPTS
------------------------------------------------
<S> <C> <C> <C>
OPERATING REVENUES
Gas and oil sales $ - $ - $ -
Transportation - - -
Other - - -
------------------------------------------------
- - -
------------------------------------------------
OPERATING EXPENSES
Cost of gas - - -
Operation and maintenance 3,272 - 14
Depreciation, depletion and amortization (325) - -
Property and other taxes 625 8 1
------------------------------------------------
3,572 8 15
------------------------------------------------
OPERATING INCOME (LOSS) (3,572) (8) (15)
------------------------------------------------
EQUITY IN EARNINGS OF JOINT VENTURES AND SUBSIDIARIES 83,147 - -
------------------------------------------------
OTHER INCOME AND (DEDUCTIONS)
Interest income 35,998 - -
Interest on long-term debt (34,460) - -
Other interest expense (34,995) - -
Gains related to DIGP - - -
Other 1,547 - 9
------------------------------------------------
(31,910) - 9
------------------------------------------------
INCOME (LOSS) BEFORE INCOME TAXES 47,665 (8) (6)
INCOME TAX PROVISION (BENEFIT) (13,187) (14) (6)
------------------------------------------------
NET INCOME $ 60,852 $ 6 $ -
================================================
<CAPTION>
TOTAL
GAS ELIM. & MCNIC
SERVICES RECLASSES CONSOL.
------------------------------------------------
<S> <C> <C> <C>
OPERATING REVENUES
Gas and oil sales $ 933,861 $ - $ 933,861
Transportation 526 - 526
Other 16,882 - 16,882
------------------------------------------------
951,269 - 951,269
------------------------------------------------
OPERATING EXPENSES
Cost of gas 689,182 - 689,182
Operation and maintenance 109,732 - 113,018
Depreciation, depletion and amortization 75,955 - 75,630
Property and other taxes 12,434 - 13,068
------------------------------------------------
887,303 - 890,898
------------------------------------------------
OPERATING INCOME (LOSS) 63,966 - 60,371
------------------------------------------------
EQUITY IN EARNINGS OF JOINT VENTURES AND SUBSIDIARIES 52,356 (83,147) 52,356
------------------------------------------------
OTHER INCOME AND (DEDUCTIONS)
Interest income 2,879 (32,499) 6,378
Interest on long-term debt 4,407 1 (30,052)
Other interest expense (31,865) 32,478 (34,382)
Gains related to DIGP 2,398 - 2,398
Other 6,084 29 7,669
------------------------------------------------
(16,097) 9 (47,989)
------------------------------------------------
INCOME (LOSS) BEFORE INCOME TAXES 100,225 (83,138) 64,738
INCOME TAX PROVISION (BENEFIT) 17,093 - 3,886
------------------------------------------------
NET INCOME $ 83,132 $ (83,138) $ 60,852
================================================
</TABLE>
<PAGE> 19
MCN ENERGY GROUP INC.
GAS SERVICES
CONSOLIDATING BALANCE SHEET
(IN THOUSANDS)
AS OF DECEMBER 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
MCNIC STORAGE
COENERGY COENERGY COENERGY POWER DEVEL.
CANADIAN TRADING SUPPLY CO. CONSOL. CONSOL.
-------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
CURRENT ASSETS
Cash and temporary cash investments
at cost (which approximates market value) $ 1,903 $ 4,229 $ 12,077 $ 13,703 $ 5,990
Accounts receivable - 160,142 7,934 13,893 20,314
Allowance for doubtful account - (621) - - -
Gas in inventory - 17,511 - 1,449 -
Property taxes assessed applicable to
future periods - - - - -
Other - 3,295 52 156 11
-------------------------------------------------------------------------
1,903 184,556 20,063 29,201 26,315
-------------------------------------------------------------------------
DEFERRED cHARGES AND OTHER ASSETS
Investment in debt and equity securities - 42 - (145) 1,330
Deferred swap losses and receivables - 51,023 - - -
Other 5 12,669 - 18,974 1,569
-------------------------------------------------------------------------
5 63,734 - 18,829 2,899
-------------------------------------------------------------------------
INVESTMENTS IN AND ADVANCES TO JOINT
VENTURES AND SUBSIDIARIES - 4,349 - 74,606 19,514
-------------------------------------------------------------------------
PROPERTY, PLANT AND EQUIPMENT, AT COST - 3,207 - 6,847 12
Less: Accumulated depreciation and depletion - 893 - 3 -
-------------------------------------------------------------------------
- 2,314 - 6,844 12
-------------------------------------------------------------------------
$ 1,908 $254,953 $ 20,063 $129,480 $48,740
=========================================================================
<CAPTION>
MCNIC
PIPELINE &
INT'L MCNIC PROCESSING TOTAL
SERVICES OIL & GAS GROUP, GAS
CONSOL. CONSOL. CONSOL. ELIM. SERVICES
--------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Assets
CURRENT ASSETS
Cash and temporary cash investments
at cost (which approximates market value) $ - $ 8,839 $ 203 $ - $ 46,944
Accounts receivable - 53,674 15,584 (19,061) 252,480
Allowance for doubtful account - - - - (621)
Gas in inventory - - - - 18,960
Property taxes assessed applicable to
future periods - 2,078 752 - 2,830
Other - 669 6,133 - 10,316
--------------------------------------------------------------------------
- 65,260 22,672 (19,061) 330,909
--------------------------------------------------------------------------
Deferred Charges and Other Assets
Investment in debt and equity securities - 3,066 - 1 4,294
Deferred swap losses and receivables - - - - 51,023
Other 6,687 75,638 768 (1,873) 114,437
--------------------------------------------------------------------------
6,687 78,704 768 (1,872) 169,754
--------------------------------------------------------------------------
Investments in and Advances to Joint
Ventures and Subsidiaries 105,520 4 323,497 627 528,117
--------------------------------------------------------------------------
Property, Plant and Equipment, at cost - 1,299,301 47,037 - 1,356,404
Less: Accumulated depreciation and depletion - 150,015 1,760 - 152,671
--------------------------------------------------------------------------
- 1,149,286 45,277 - 1,203,733
--------------------------------------------------------------------------
$ 112,207 $1,293,254 $392,214 $(20,306) $2,232,513
==========================================================================
</TABLE>
<PAGE> 20
MCN ENERGY GROUP INC.
GAS SERVICES
CONSOLIDATING BALANCE SHEET
(IN THOUSANDS)
AS OF DECEMBER 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
MCNIC STORAGE
COENERGY COENERGY COENERGY POWER DEVEL.
CANADIAN TRADING SUPPLY CONSOL. CONSOL.
--------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
LIABILITIES AND CAPITALIZATION
CURRENT LIABILITIES
Accounts payable $ 1,413 $ 117,225 $ 19,800 $ 7,766 $ 17,671
Notes payable - 80,978 - 12,518 -
Current portion of long-term debt and capital lease
obligations - - - - -
Federal income, property and other taxes
payable (102) 1,569 (31) 69 1,170
Other - 488 1 4 -
--------------------------------------------------------------------
1,311 200,260 19,770 20,357 18,841
--------------------------------------------------------------------
DEFERRED CREDITS AND OTHER LIABILITIES
Accumulated deferred income taxes - (625) 21 12,474 4,528
Deferred swap gains and payables - 41,717 - - -
Minority interest - - - - -
Other - 6,256 (1) 1,909 3,097
--------------------------------------------------------------------
- 47,348 20 14,383 7,625
--------------------------------------------------------------------
CAPITALIZATION
Long-term debt, including capital lease obligations - - - 1,800 788
Common shareholders' equity 597 7,345 273 92,940 21,486
--------------------------------------------------------------------
597 7,345 273 94,740 22,274
--------------------------------------------------------------------
$ 1,908 $ 254,953 $ 20,063 $ 129,480 $ 48,740
====================================================================
<CAPTION>
MCNIC
PIPELINE &
INT'L MCNIC PROCESSING TOTAL
SERVICES OIL & GAS GROUP, GAS
CONSOL. CONSOL. ELIM. SERVICES
-----------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
LIABILITIES AND CAPITALIZATION
CURRENT LIABILITIES
Accounts payable $ - $ 69,265 $ 33,691 $ (17,242) $ 249,589
Notes payable - 325,836 201,633 (1) 620,964
Current portion of long-term debt and capital lease
obligations - 1,557 - - 1,557
Federal income, property and other taxes
payable - 7,581 (400) 1 9,857
Other - 2,614 2,154 (1) 5,260
-----------------------------------------------------------------
- 406,853 237,078 (17,243) 887,227
-----------------------------------------------------------------
DEFERRED CREDITS AND OTHER LIABILITIES
Accumulated deferred income taxes - 117,632 20,740 - 154,770
Deferred swap gains and payables - - - - 41,717
Minority interest - - 1,905 - 1,905
Other - 2,500 - 627 14,388
-----------------------------------------------------------------
- 120,132 22,645 627 212,780
-----------------------------------------------------------------
CAPITALIZATION
Long-term debt, including capital lease obligations - 112,784 85 - 115,457
Common shareholders' equity 112,207 653,485 132,406 (3,690) 1,017,049
-----------------------------------------------------------------
112,207 766,269 132,491 (3,690) 1,132,506
-----------------------------------------------------------------
$ 112,207 $ 1,293,254 $ 392,214 $ (20,306) $2,232,513
=================================================================
</TABLE>
<PAGE> 21
MCN ENERGY GROUP INC.
GAS SERVICES
CONSOLIDATING INCOME STATEMENT
(IN THOUSANDS)
FOR THE YEAR ENDED DECEMBER 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
MCNIC STORAGE
COENERGY COENERGY COENERGY POWER DEVEL.
CANADIAN TRADING SUPPLY CONSOL. CONSOL.
--------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
OPERATING REVENUES
Gas and oil sales $ - $ 747,212 $ 82,295 $ 50,218 $ 8
Transportation - - - - -
Other - 1,506 - 1,586 5,694
--------------------------------------------------------------------
- 748,718 82,295 51,804 5,702
--------------------------------------------------------------------
OPERATING EXPENSES
Cost of gas - 721,340 79,028 43,658 8
Operation and maintenance - 23,122 - 2,784 5,561
Depreciation, depletion and amortization - 915 - (23) -
Property and other taxes - 56 136 9 -
--------------------------------------------------------------------
- 745,433 79,164 46,428 5,569
--------------------------------------------------------------------
OPERATING INCOME - 3,285 3,131 5,376 133
--------------------------------------------------------------------
EQUITY IN EARNINGS OF JOINT VENTURES AND SUBSIDIARIES - 825 - 12,143 3,725
--------------------------------------------------------------------
OTHER INCOME AND (DEDUCTIONS)
Interest income 90 990 1,116 278 137
Interest on long-term debt - (4) - - (15)
Other interest expense - (4,789) - (165) (111)
Gains related to DIGP - - - - -
Other (4) 24 (1) 606 2,943
--------------------------------------------------------------------
86 (3,779) 1,115 719 2,954
--------------------------------------------------------------------
INCOME BEFORE INCOME TAXES 86 331 4,246 18,238 6,812
INCOME TAX PROVISION (BENEFIT) 41 296 1,486 6,341 1,883
--------------------------------------------------------------------
NET INCOME $ 45 $ 35 $ 2,760 $ 11,897 $ 4,929
====================================================================
<CAPTION>
MCNIC
PIPELINE &
INT'L MCNIC PROCESSING TOTAL
SERVICES OIL & GAS GROUP GAS
CONSOL. CONSOL. CONSOL. ELIM. SERVICES
---------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
OPERATING REVENUES
Gas and oil sales $ - $ 208,993 $ - $ (154,865) $ 933,861
Transportation - - 526 - 526
Other - 6,834 6,842 (5,580) 16,882
---------------------------------------------------------------------
- 215,827 7,368 (160,445) 951,269
---------------------------------------------------------------------
OPERATING EXPENSES
Cost of gas - 8 5 (154,865) 689,182
Operation and maintenance - 78,446 5,399 (5,580) 109,732
Depreciation, depletion and amortization - 73,910 1,153 - 75,955
Property and other taxes - 12,007 226 - 12,434
---------------------------------------------------------------------
- 164,371 6,783 (160,445) 887,303
---------------------------------------------------------------------
OPERATING INCOME - 51,456 585 - 63,966
---------------------------------------------------------------------
EQUITY IN EARNINGS OF JOINT VENTURES AND SUBSIDIARIES 512 6,600 28,551 - 52,356
---------------------------------------------------------------------
OTHER INCOME AND (DEDUCTIONS)
Interest income - 160 108 - 2,879
Interest on long-term debt - 3,932 494 - 4,407
Other interest expense - (17,870) (8,930) - (31,865)
Gains related to DIGP - - 2,398 - 2,398
Other - (68) 2,584 - 6,084
---------------------------------------------------------------------
- (13,846) (3,346) - (16,097)
---------------------------------------------------------------------
INCOME BEFORE INCOME TAXES 512 44,210 25,790 - 100,225
INCOME TAX PROVISION (BENEFIT) - (1,675) 8,721 - 17,093
---------------------------------------------------------------------
NET INCOME $ 512 $ 45,885 $ 17,069 $ - $ 83,132
=====================================================================
</TABLE>
<PAGE> 22
EXHIBIT B
MCN Energy Group Inc.
Financial Data Schedule
This schedule contains MCN Energy Group Inc.'s summary financial
information extracted from the consolidated balance sheet as of December 31,
1997, and the related statement of consolidated income for the year ended
December 31, 1997, and is qualified in its entirety by reference to such
financial statements.
<TABLE>
<CAPTION>
1997
MCN Energy Group Inc.
Item No. Caption Heading Consolidated (000s)
<S> <C> <C>
1 Total Assets $ 4,329,461
2 Total Operating Revenues 2,207,867
3 Net Income 142,306
</TABLE>
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