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Previous: EUFAULA BANCORP INC, S-8, 1999-06-25 |
Next: MBNA AMERICA BANK NATIONAL ASSOCIATION, 424B5, 1999-06-25 |
<PAGE> 1
File No: 69-352
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM U-3A-2/A
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, 1998
MCN ENERGY GROUP INC.
hereby files with the Securities and Exchange Commission (SEC), this amendment
on Form U-3A-2/A which amends the Form U-3A-2 filed on March 1, 1999 by claimant
to amend Exhibits A and B.
Subsequent to the issuance of the claimant's December 31, 1998 Form U-3A-2,
certain matters came to management's attention and resulted in a special
investigation of prior years' operations of CoEnergy Trading Company (CTC),
claimant's non-utility energy marketing subsidiary. As a result of the
investigation, MCN Energy Group, Inc. (MCN) identified that its internal
controls had been overridden and that certain transactions had not been
properly accounted for. Specifically, the investigation concluded that CTC had
entered into gas supply contracts and agreed to pay significantly less than
market prices in one period in return for above-market prices to be paid in
subsequent periods through March 2000. The effect of these transactions was to
improperly delay the accrual of cost of gas expenses, resulting in the
overstatement of CTC's 1998 net loss by $478,000.
Additionally, the investigation identified that CTC had entered into certain
unauthorized gas purchase and sale contracts for trading purposes. The
unauthorized transactions violate MCN's risk-management policy that requires
all such activities to be reviewed and approved by a risk committee that
reports regularly to the MCN Board of Directors. The gas purchase and sale
contracts entered into in connection with trading activities, some of which
remain in effect through March 2000, were not accounted for properly using the
required mark-to-market method, under which unrealized gains and losses are
recorded as an adjustment to cost of gas. The effect of not properly
accounting for these transactions was the understatement of CTC's 1998 net loss
by $7,112,000.
Other items identified during the investigation resulted in the understatement
of CTC's 1998 net loss by $879,000.
These transactions also had an equivalent impact on the results of operation at
the MCN, MCNIC and Gas Services levels of consolation. Information included in
Exhibits A and B has been restated to properly account for the transactions
identified above.
1
<PAGE> 2
EXHIBITS
Exhibit A - Attached hereto as Exhibit A are the unaudited Consolidating
Statements of Operations for the year ended December 31, 1998 and
Consolidating Statements of Financial Position as of December 31,
1998, for MCN Energy Group Inc., MichCon Holdings, MichCon, MCNIC,
Gas Services Level, MCNIC Pipeline & Processing Company, CoEnery
Trading, MCNIC Oil & Gas and MCN Financing Companies.
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*
* Indicates document previously filed.
10
<PAGE> 3
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 June, 1999.
MCN ENERGY GROUP INC.
By: /s/ Gerard Kabzinski
-------------------------
Gerard Kabzinski
Vice President and Controller
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
11
<PAGE> 4
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, 1998, and the
related statement of consolidated income for the year ended December 31, 1998,
and is qualified in its entirety by reference to such financial statements.
<TABLE>
<CAPTION>
1998
MCN Energy Group Inc.
Item No. Caption Heading Consolidated (000s) (RESTATED)
<S> <C> <C>
1 Total Assets $4,392,898
2 Total Operating Revenue 1,880,194
3 Net Income (Loss) (286,468)
</TABLE>
<PAGE> 5
MCN ENERGY GROUP INC.
CONSOLIDATING STATEMENT OF OPERATIONS
(IN THOUSANDS)
FOR THE YEAR ENDED DECEMBER 31, 1998
(UNAUDITED)
(RESTATED)
<TABLE>
<CAPTION>
MICHCON FINANCING
MCN HOLDINGS CITIZENS COMPANIES
------------------------------------------------------------------------
<S> <C> <C> <C> <C>
OPERATING REVENUES
Gas sales $ - $ 824,111 $14,765 $ -
Transportation - 145,234 259 -
Other - 67,355 50 -
------------------------------------------------------------------------
- 1,036,700 15,074 -
------------------------------------------------------------------------
OPERATING EXPENSES
Cost of gas - 454,236 7,854 -
Operation and maintenance (14,434) 253,298 3,324 1
Depreciation, depletion and amortization 2,314 92,942 832 -
Property and other taxes 1,205 55,448 499 -
Property write-downs and restructuring charges 8,669 24,800 - -
------------------------------------------------------------------------
(2,246) 880,724 12,509 1
------------------------------------------------------------------------
OPERATING INCOME (LOSS) 2,246 155,976 2,565 (1)
------------------------------------------------------------------------
EQUITY IN EARNINGS OF JOINT VENTURES AND SUBSIDIARIES (273,143) 1,946 - -
------------------------------------------------------------------------
OTHER INCOME AND (DEDUCTIONS)
Interest income 517 5,649 66 37,307
Interest on long-term debt (628) (44,884) (12) -
Other interest expense (39,046) (12,130) (451) -
Dividends on preferred securities of subsidiaries 36,595 - - -
Investment losses (8,500) - - -
Minority interest - 5,727 - -
Other (319) (232) 3 -
------------------------------------------------------------------------
(11,381) (45,870) (394) 37,307
------------------------------------------------------------------------
INCOME (LOSS) FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES (282,278) 112,052 2,171 37,307
INCOME TAX PROVISION (BENEFIT) (3,323) 35,579 759 -
------------------------------------------------------------------------
INCOME (LOSS) FROM CONTINUING OPERATIONS (278,955) 76,473 1,412 37,307
DISCONTINUED OPERATIONS, NET OF TAXES - - - -
------------------------------------------------------------------------
NET INCOME (LOSS) $ (278,955) $ 76,473 $ 1,412 $ 37,307
========================================================================
<CAPTION>
MCNIC ELIMINATIONS MCN
CONSOL. AND RECLASSES CONSOL.
----------------------------------------------------------
OPERATING REVENUES
Gas Sales $ 815,433 $ (3,957) $ 1,650,352
Transportation 12,728 (6,531) 151,690
Other 14,163 (3,416) 78,152
----------------------------------------------------------
842,324 (13,904) 1,880,194
----------------------------------------------------------
OPERATING EXPENSES
Cost of gas 808,805 (8,523) 1,262,372
Operation and maintenance 65,153 (5,381) 301,961
Depreciation, depletion and amortization 2,825 1 98,914
Property and other taxes 2,346 5 59,503
Property write-downs and restructuring charges 141,872 - 175,341
----------------------------------------------------------
1,021,001 (13,898) 1,898,091
----------------------------------------------------------
OPERATING INCOME (LOSS) (178,677) (6) (17,897)
----------------------------------------------------------
EQUITY IN EARNINGS OF JOINT VENTURES AND SUBSIDIARIES 61,242 272,180 62,225
----------------------------------------------------------
OTHER INCOME AND (DEDUCTIONS)
Interest income 6,183 (39,256) 10,467
Interest on long-term debt (15,118) (1) (60,643)
Other interest expense (24,275) 57,096 (18,806)
Dividends on preferred securities of subsidiaries - (54,208) (17,613)
Investment losses - - (8,500)
Minority interest 265 - 5,992
Other 12,385 (239) 11,598
----------------------------------------------------------
(20,560) (36,608) (77,505)
----------------------------------------------------------
INCOME (LOSS) FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES (137,995) 235,566 (33,177)
INCOME TAX PROVISION (BENEFIT) (52,488) (27) (19,500)
----------------------------------------------------------
INCOME (LOSS) FROM CONTINUING OPERATIONS (85,507) 235,593 (13,677)
DISCONTINUED OPERATIONS, NET OF TAXES (272,791) - (272,791)
----------------------------------------------------------
NET INCOME (LOSS) $ (358,298) $ 235,593 $ (286,468)
==========================================================
</TABLE>
1
<PAGE> 6
MCN ENERGY GROUP INC.
CONSOLIDATING STATEMENT OF FINANCIAL POSITON
(IN THOUSANDS)
AS OF DECEMBER 31, 1998
(UNAUDITED)
(RESTATED)
<TABLE>
<CAPTION>
MICHCON FINANCING MCNIC ELIMINATIONS MCN
MCN HOLDINGS CITIZENS COMPANIES CONSOL. AND RECLASSES CONSOL.
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents
at cost (which approximates market value) $ 6,863 $ 7,145 $ 59 $ - $ 9,036 $ (6,064) $ 17,039
Accounts receivable 7,713 150,218 1,042 - 265,312 (14,500) 409,785
Less: Allowance for doubtful accounts - 8,937 75 - 653 - 9,665
Accrued unbilled revenues - 86,767 1,121 - - - 87,888
Gas in inventory - 56,969 - - 90,418 - 147,387
Property taxes assessed applicable to
future periods 180 71,165 34 - 1,172 - 72,551
Other 3,838 42,065 489 1,651 11,872 (17,443) 42,472
-----------------------------------------------------------------------------------
18,594 405,392 2,670 1,651 377,157 (38,007) 767,457
-----------------------------------------------------------------------------------
DEFERRED CHARGES AND OTHER ASSETS
Deferred income taxes 3,305 - - - 128,807 (81,565) 50,547
Investments in debt and equity securities - 65,556 - - 3,548 601 69,705
Deferred swap losses and receivables - - - - 63,147 - 63,147
Deferred environmental costs - 28,169 2,604 - - - 30,773
Prepaid benefit costs - 113,879 - - - (2,104) 111,775
Other 5,876 58,491 3,044 526,100 26,870 (521,441) 98,940
-----------------------------------------------------------------------------------
9,181 266,095 5,648 526,100 222,372 (604,509) 424,887
-----------------------------------------------------------------------------------
INVESTMENTS IN AND ADVANCES TO JOINT
VENTURES AND SUBSIDIARIES 1,589,114 19,282 - - 782,471 (1,587,636) 803,231
-----------------------------------------------------------------------------------
PROPERTY, PLANT AND EQUIPMENT, AT COST 21,161 2,892,227 24,313 - 1,103,716 - 4,041,417
Less: Accumulated depreciation and depletion 6,825 1,398,142 9,184 - 229,944 (1) 1,644,094
-----------------------------------------------------------------------------------
14,336 1,494,085 15,129 - 873,772 1 2,397,323
-----------------------------------------------------------------------------------
$1,631,225 $2,184,854 $ 23,447 $ 527,751 $ 2,255,772 $ (2,230,151) $4,392,898
===================================================================================
</TABLE>
2
<PAGE> 7
MCN ENERGY GROUP INC.
CONSOLIDATING STATEMENT OF FINANCIAL POSITON
(IN THOUSANDS)
AS OF DECEMBER 31, 1998
(UNAUDITED)
(RESTATED)
<TABLE>
<CAPTION>
MICHCON FINANCING MCNIC ELIMINATIONS MCN
MCN HOLDINGS CITIZENS COMPANIES CONSOL. AND RECLASSES CONSOL.
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
LIABILITIES AND CAPITALIZATION
CURRENT LIABILITIES
Accounts payable $ 1,812 $ 100,001 $ 1,287 $ - $ 218,851 $ (17,602) $ 304,349
Notes payable 260,000 221,885 5,970 - 137,762 (6,766) 618,851
Current portion of long-term debt and capital
lease obligations - 58,288 - - 211,433 - 269,721
Federal income, property and other taxes payable 1,311 60,791 397 - 6,965 1 69,465
Deferred gas cost recovery revenues - 14,980 - - - - 14,980
Gas Payable - 25,337 - - 17,332 - 42,669
Customer deposits - 18,769 23 - - (1) 18,791
Other 17,693 66,931 925 1,651 25,276 (4,166) 108,310
-------------------------------------------------------------------------------
280,816 566,982 8,602 1,651 617,619 (28,534) 1,447,136
-------------------------------------------------------------------------------
DEFERRED CREDITS AND OTHER LIABILITIES
Deferred income taxes (10,308) 88,622 1,756 - - (80,070) -
Unamortized investment tax credit - 29,784 272 - - - 30,056
Tax benefits amortizable to customers - 130,120 - - - - 130,120
Deferred swap gains and payables - - - - 62,956 - 62,956
Accrued environmental costs - 32,000 3,000 - - - 35,000
Minority interest - 8,201 - - 2,697 - 10,898
Other 545,351 51,461 1,322 - 15,741 (538,436) 75,439
-------------------------------------------------------------------------------
535,043 340,188 6,350 - 81,394 (618,506) 344,469
-------------------------------------------------------------------------------
CAPITALIZATION
Long-term debt, including capital lease obligations - 619,835 - - 687,333 - 1,307,168
Redeemable preferred securities of subsidiaries - - - 502,203 - - 502,203
Common shareholders' equity 815,366 657,849 8,495 23,897 869,426 (1,583,111) 791,922
-------------------------------------------------------------------------------
815,366 1,277,684 8,495 526,100 1,556,759 (1,583,111) 2,601,293
-------------------------------------------------------------------------------
$1,631,225 $2,184,854 $23,447 $527,751 $2,255,772 $(2,230,151) $4,392,898
===============================================================================
</TABLE>
3
<PAGE> 8
MICHCON HOLDINGS, INC.
CONSOLIDATING STATEMENT OF OPERATIONS
(IN THOUSANDS)
FOR THE YEAR ENDED DECEMBER 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
MICHCON MICHIGAN MICHCON
HOLDINGS CONSOLIDATED ENTERPRISES
-------------------------------------------------------------
<S> <C> <C> <C>
OPERATING REVENUES
Gas sales $ - $ 823,746 $ 365
Transportation - 145,234 -
Other - 64,678 2,822
-------------------------------------------------------------
- 1,033,658 3,187
-------------------------------------------------------------
OPERATING EXPENSES
Cost of gas - 451,529 2,852
Operation and maintenance - 252,397 901
Depreciation, depletion and amortization - 92,883 59
Property and other taxes - 55,438 (18)
Property write-downs and restructuring charges - 24,800 -
-------------------------------------------------------------
- 877,047 3,794
-------------------------------------------------------------
OPERATING INCOME (LOSS) - 156,611 (607)
-------------------------------------------------------------
EQUITY IN EARNINGS (LOSSES) OF JOINT VENTURES AND SUBSIDIARIES 76,473 1,946 -
-------------------------------------------------------------
OTHER INCOME AND (DEDUCTIONS)
Interest income - 5,688 -
Interest on long-term debt - (44,884) -
Other interest expense - (12,113) (56)
Minority interest - 5,727 -
Other - (182) (77)
-------------------------------------------------------------
- (45,764) (103)
-------------------------------------------------------------
INCOME (LOSS) FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES 76,473 112,793 (740)
INCOME TAX PROVISION (BENEFIT) - 35,817 (238)
-------------------------------------------------------------
NET INCOME (LOSS) $ 76,473 $ 76,976 $ (502)
=============================================================
<CAPTION>
ELIM. & MICHCON HOLDINGS
RECLASSES CONSOLIDATED
---------------------------------------
OPERATING REVENUES
Gas sales $ - $ 824,111
Transportation - 145,234
Other (145) 67,355
---------------------------------------
(145) 1,036,700
---------------------------------------
OPERATING EXPENSES
Cost of gas (145) 454,236
Operation and maintenance - 253,298
Depreciation, depletion and amortization - 92,942
Property and other taxes 28 55,448
Property write-downs and restructuring charges - 24,800
---------------------------------------
(117) 880,724
---------------------------------------
OPERATING INCOME (LOSS) (28) 155,976
---------------------------------------
EQUITY IN EARNINGS (LOSSES) OF JOINT VENTURES AND SUBSIDIARIES (76,473) 1,946
---------------------------------------
OTHER INCOME AND (DEDUCTIONS)
Interest income (39) 5,649
Interest on long-term debt - (44,884)
Other interest expense 39 (12,130)
Minority interest - 5,727
Other 27 (232)
---------------------------------------
27 (45,870)
---------------------------------------
INCOME (LOSS) FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES (76,474) 112,052
INCOME TAX PROVISION (BENEFIT) - 35,579
---------------------------------------
NET INCOME (LOSS) $ (76,474) $ 76,473
=======================================
</TABLE>
4
<PAGE> 9
MICHCON HOLDINGS, INC.
CONSOLIDATING STATEMENT OF FINANCIAL POSITION
(IN THOUSANDS)
AS OF DECEMBER 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
MICHCON MICHIGAN MICHCON
HOLDINGS CONSOLIDATED ENTERPRISES
---------------------------------------------------------
ASSETS
CURRENT ASSETS
<S> <C> <C> <C>
Cash and cash equivalents
at cost (which approximates market value $ - $ 6,603 $ 542
Accounts receivable - 151,746 2,436
Less: Allowance for doubtful accounts - 8,928 9
Unbilled revenue - 86,767 -
Gas in inventory - 56,969 -
Property taxes assessed applicable to
future periods - 71,165
Other - 30,169 11,896
---------------------------------------------------------
- 394,491 14,865
---------------------------------------------------------
DEFERRED CHARGES AND OTHER ASSETS
Investment in debt and equity securities - 65,556 -
Deferred environmental costs - 28,169 -
Prepaid benefit costs - 113,879 -
Other - 59,007 1
---------------------------------------------------------
- 266,611 1
---------------------------------------------------------
INVESTMENTS IN AND ADVANCES TO JOINT
VENTURES AND SUBSIDIARIES 652,497 19,343 (61)
---------------------------------------------------------
PROPERTY, PLANT AND EQUIPMENT, AT COST - 2,889,020 3,207
Less: Accumulated depreciation and depletion - 1,396,940 1,202
---------------------------------------------------------
- 1,492,080 2,005
---------------------------------------------------------
$ 652,497 $ 2,172,525 $ 16,810
==========================================================
</TABLE>
<TABLE>
<CAPTION>
ELIMINATIONS MICHCON HOLDINGS
AND RECLASSES CONSOL.
----------------------------------------
ASSETS
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents
at cost (which approximates market value $ - $ 7,145
Accounts receivable (3,964) 150,218
Less: Allowance for doubtful accounts - 8,937
Unbilled revenue - 86,767
Gas in inventory - 56,969
Property taxes assessed applicable to
future periods - 71,165
Other - 42,065
----------------------------------------
(3,964) 405,392
----------------------------------------
DEFERRED CHARGES AND OTHER ASSETS
Investment in debt and equity securities - 65,556
Deferred environmental costs - 28,169
Prepaid benefit costs - 113,879
Other (517) 58,491
----------------------------------------
(517) 266,095
----------------------------------------
INVESTMENTS IN AND ADVANCES TO JOINT
VENTURES AND SUBSIDIARIES (652,497) 19,282
----------------------------------------
PROPERTY, PLANT AND EQUIPMENT, AT COST - 2,892,227
Less: Accumulated depreciation and depletion - 1,398,142
----------------------------------------
- 1,494,085
----------------------------------------
$ (656,978) $ 2,184,854
========================================
</TABLE>
5
<PAGE> 10
MICHCON HOLDINGS, INC.
CONSOLIDATING STATEMENT OF FINANCIAL POSITION
(IN THOUSANDS)
AS OF DECEMBER 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
MICHCON MICHIGAN MICHCON
HOLDINGS CONSOLIDATED ENTERPRISES
--------------------------------------------------------
<S> <C> <C> <C>
LIABILITIES AND CAPITALIZATION
CURRENT LIABILITIES
Accounts payable $ - $ 98,891 $ 1,842
Notes payable - 221,169 4,019
Current portion of long-term debt and capital lease
obligations - 58,288 -
Federal income, property and other taxes payable - 61,059 (267)
Deferred gas cost recovery revenues 14,980
Gas payable 25,337
Customer deposits 18,769
Other - 67,222 (21)
--------------------------------------------------------
- 565,715 5,573
--------------------------------------------------------
DEFERRED CREDITS AND OTHER LIABILITIES
Deferred income taxes - 88,567 55
Unamortized investment tax credit 29,784
Deferred swap gains and payables - 130,120 -
Accrued environmental costs 32,000
Minority interest - 8,201 -
Other - 51,460 -
--------------------------------------------------------
- 340,132 55
--------------------------------------------------------
CAPITALIZATION
Long-term debt, including capital lease obligations - 619,835 -
Common shareholders' equity 652,497 646,843 11,182
--------------------------------------------------------
652,497 1,266,678 11,182
--------------------------------------------------------
$ 652,497 $ 2,172,525 $ 16,810
========================================================
<CAPTION>
ELIMINATIONS MICHCON HOLDINGS
AND RECLASSES CONSOLIDATED
-------------------------------------------
<S> <C> <C>
LIABILITIES AND CAPITALIZATION
CURRENT LIABILITIES
Accounts payable $ (732) $ 100,001
Notes payable (3,303) 221,885
Current portion of long-term debt and capital lease
obligations - 58,288
Federal income, property and other taxes payable (1) 60,791
Deferred gas cost recovery revenues - 14,980
Gas payable - 25,337
Customer deposits - 18,769
Other (270) 66,931
--------------------------------------
(4,306) 566,982
--------------------------------------
DEFERRED CREDITS AND OTHER LIABILITIES
Deferred income taxes - 88,622
Unamortized investment tax credit - 29,784
Deferred swap gains and payables - 130,120
Accrued environmental costs - 32,000
Minority interest - 8,201
Other 1 51,461
--------------------------------------
1 340,188
--------------------------------------
CAPITALIZATION
Long-term debt, including capital lease obligations - 619,835
Common shareholders' equity (652,673) 657,849
--------------------------------------
(652,673) 1,277,684
--------------------------------------
$ (656,978) $ 2,184,854
======================================
</TABLE>
6
<PAGE> 11
MICHIGAN CONSOLIDATED GAS COMPANY
CONSOLIDATING STATEMENT OF OPERATIONS
(IN THOUSANDS)
FOR THE YEAR ENDED DECEMBER 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
MICHCON FUELS
MICHCON DEVELOPMENT ENTERPRISES
--------------------------------------------------------
<S> <C> <C> <C>
OPERATING REVENUES
Gas sales $ 824,566 $ - $ -
Transportation 117,726 - -
Other 50,001 - -
-----------------------------------------------------
992,293 - -
-----------------------------------------------------
OPERATING EXPENSES
Cost of gas 453,255 - -
Operation and maintenance 233,623 - -
Depreciation, depletion and amortization 86,928 - -
Property and other taxes 51,288 (7) 6
Property write-downs and restructuring charges - - -
-----------------------------------------------------
825,094 (7) 6
-----------------------------------------------------
OPERATING INCOME (LOSS) 167,199 7 (6)
-----------------------------------------------------
EQUITY IN EARNINGS (LOSSES) OF JOINT
VENTURES AND SUBSIDIARIES (1,701) (336) -
-----------------------------------------------------
OTHER INCOME AND (DEDUCTIONS)
Interest income 5,692 378 4
Interest on long-term debt (43,954) - -
Other interest expense (12,641) - (47)
Minority interest - - -
Other (566) (87) (496)
-----------------------------------------------------
(51,459) 291 (539)
-----------------------------------------------------
INCOME (LOSS) FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES 114,039 (38) (545)
INCOME TAX PROVISION (BENEFIT) 37,063 (13) (191)
-----------------------------------------------------
NET INCOME (LOSS) $ 76,976 $ (25) $ (354)
=====================================================
<CAPTION>
MICHCON BLUE LAKE ELIM. & MICHCON
PIPELINE HOLDING CO. RECLASSES CONSOLIDATED
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
OPERATING REVENUES
Gas sales $ 162 $ - $ (982) $ 823,746
Transportation 28,571 - (1,063) 145,234
Other 14,677 - - 64,678
----------------------------------------------------------------------
43,410 - (2,045) 1,033,658
----------------------------------------------------------------------
OPERATING EXPENSES
Cost of gas - - (1,726) 451,529
Operation and maintenance 18,503 - 271 252,397
Depreciation, depletion and amortization 5,955 - - 92,883
Property and other taxes 1,219 - 2,932 55,438
Property write-downs and restructuring charges 24,800 - - 24,800
----------------------------------------------------------------------
50,477 - 1,477 877,047
----------------------------------------------------------------------
OPERATING INCOME (LOSS) (7,067) - (3,522) 156,611
----------------------------------------------------------------------
EQUITY IN EARNINGS (LOSSES) OF JOINT
VENTURES AND SUBSIDIARIES - 2,281 1,702 1,946
----------------------------------------------------------------------
OTHER INCOME AND (DEDUCTIONS)
Interest income 757 - (1,143) 5,688
Interest on long-term debt (3,137) - 2,207 (44,884)
Other interest expense (564) - 1,139 (12,113)
Minority interest 5,726 - 1 5,727
Other (37) - 994 (182)
----------------------------------------------------------------------
2,745 - 3,198 (45,764)
----------------------------------------------------------------------
INCOME (LOSS) FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES (4,322) 2,281 1,378 112,793
INCOME TAX PROVISION (BENEFIT) (1,556) 798 (284) 35,817
----------------------------------------------------------------------
NET INCOME (LOSS) $ (2,766) $ 1,483 $ $1,662 $ 76,976
======================================================================
</TABLE>
7
<PAGE> 12
MICHIGAN CONSOLIDATED GAS COMPANY
CONSOLIDATING STATEMENT OF FINANCIAL POSITION
(IN THOUSANDS)
AS OF DECEMBER 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
MICHCON MICHCON
MICHCON DEVELOPMENT PIPELINE
--------------------------------------------------------
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents
at cost (which approximates market value) $ 2,299 $ 36 $ 4,263
Accounts receivable 150,440 866 17,173
Less: Allowance for doubtful accounts 8,928 - -
Unbilled revenue 86,767 - -
Gas in inventory 56,969 - -
Property taxes assessed applicable to
future periods 71,165 - -
Other 26,537 3 473
--------------------------------------------------------
385,249 905 21,909
--------------------------------------------------------
DEFERRED CHARGES AND OTHER ASSETS
Investment in debt and equity securities - - -
Deferred environmental costs - - -
Prepaid benefit costs - - -
Other 375,228 270 654
--------------------------------------------------------
375,228 270 654
--------------------------------------------------------
INVESTMENTS IN AND ADVANCES TO JOINT
VENTURES AND SUBSIDIARIES 48,407 10,522 -
--------------------------------------------------------
PROPERTY, PLANT AND EQUIPMENT, AT COST 2,787,305 1,933 124,582
Less: Accumulated depreciation and depletion 1,373,543 116 48,081
--------------------------------------------------------
1,413,762 1,817 76,501
--------------------------------------------------------
$ 2,222,646 $ 13,514 $ 99,064
========================================================
</TABLE>
<TABLE>
<CAPTION>
BLUE LAKE ELIMINATIONS MICHCON
HOLDING CO. AND RECLASSES CONSOLIDATED
---------------------------------------------------------
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents
at cost (which approximates market value) $ 5 $ - $ 6,603
Accounts receivable - (16,733) 151,746
Less: Allowance for doubtful accounts - - 8,928
Unbilled revenue - - 86,767
Gas in inventory - - 56,969
Property taxes assessed applicable to
future periods - - 71,165
Other - 3,156 30,169
-------------------------------------------------
5 (13,577) 394,491
-------------------------------------------------
DEFERRED CHARGES AND OTHER ASSETS
Investment in debt and equity securities - 65,556 65,556
Deferred environmental costs - 28,169 28,169
Prepaid benefit costs - 113,879 113,879
Other 117 (317,262) 59,007
-------------------------------------------------
117 (109,658) 266,611
-------------------------------------------------
INVESTMENTS IN AND ADVANCES TO JOINT
VENTURES AND SUBSIDIARIES 8,821 (48,407) 19,343
-------------------------------------------------
PROPERTY, PLANT AND EQUIPMENT, AT COST - (24,800) 2,889,020
Less: Accumulated depreciation and depletion - (24,800) 1,396,940
-------------------------------------------------
- - 1,492,080
-------------------------------------------------
$ 8,943 $ (171,642) $ 2,172,525
=================================================
</TABLE>
8
<PAGE> 13
MICHIGAN CONSOLIDATED GAS COMPANY
CONSOLIDATING STATEMENT OF FINANCIAL POSITION
(IN THOUSANDS)
AS OF DECEMBER 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
MICHCON MICHCON
MICHCON DEVELOPMENT PIPELINE
---------------------------------------------------------
<S> <C> <C> <C>
LIABILITIES AND CAPITALIZATION
CURRENT LIABILITIES
Accounts payable $ 102,683 $ 5 $ 9,770
Notes payable 228,506 - 2,673
Current portion of long-term debt and capital lease
obligations 50,928 - 7,360
Federal income, property and other taxes payable 59,525 409 890
Other 109,175 - (3,083)
---------------------------------------------------------
550,817 414 17,610
---------------------------------------------------------
DEFERRED CREDITS AND OTHER LIABILITIES
Accumulated deferred income taxes 332,664 2,222 6,041
Unamortized investment tax credit 29,784 - -
Tax benefits amortizable to customers - - -
Deferred swap gains and payables - - -
Accrued environmental costs - - -
Minority interest - - 8,201
Other 78,623 670 -
---------------------------------------------------------
441,071 2,892 14,242
---------------------------------------------------------
CAPITALIZATION
Long-term debt, including capital lease obligations 583,915 - 35,920
Common shareholders' equity 646,843 10,208 31,292
---------------------------------------------------------
1,230,757 10,208 67,212
---------------------------------------------------------
$ 2,222,646 $ 13,514 $ 99,064
=========================================================
</TABLE>
<TABLE>
<CAPTION>
BLUE LAKE ELIMINATIONS MICHCON
HOLDING CO. AND RECLASSES CONSOLIDATED
----------------------------------------------------------
<S> <C> <C> <C>
LIABILITIES AND CAPITALIZATION
CURRENT LIABILITIES
Accounts payable $ 318 $ (13,885) $ 98,891
Notes payable - (10,010) 221,169
Current portion of long-term debt and capital lease
obligations - - 58,288
Federal income, property and other taxes payable 235 - 61,059
Other - 20,216 126,308
----------------------------------------------------------
553 (3,679) 565,715
----------------------------------------------------------
DEFERRED CREDITS AND OTHER LIABILITIES
Accumulated deferred income taxes 1,483 (253,843) 88,567
Unamortized investment tax credit - - 29,784
Tax benefits amortizable to customers - 130,120 130,120
Deferred swap gains and payables - - -
Accrued environmental costs - 32,000 32,000
Minority interest - - 8,201
Other - <27,833> 51,460
----------------------------------------------------------
1,483 (119,556) 340,132
----------------------------------------------------------
CAPITALIZATION
Long-term debt, including capital lease obligations - - 619,835
Common shareholders' equity 6,907 (48,407) 646,843
----------------------------------------------------------
6,907 (48,407) 1,266,678
----------------------------------------------------------
$ 8,943 $ (171,642) $ 2,172,525
==========================================================
</TABLE>
9
<PAGE> 14
MCN ENERGY GROUP INC.
MCN INVESTMENT CORPORATION
CONSOLIDATING STATEMENT OF OPERATIONS
(IN THOUSANDS)
FOR THE YEAR ENDED DECEMBER 31, 1998
(UNAUDITED)
(RESTATED)
<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 19,111 1 1
Depreciation, depletion and amortization (317) - -
Property and other taxes 889 - -
Property write-downs and restructuring charges 1,721 - -
-------------------------------------------------
21,404 1 1
-------------------------------------------------
OPERATING INCOME (LOSS) (21,404) (1) (1)
-------------------------------------------------
EQUITY IN EARNINGS OF JOINT VENTURES AND SUBSIDIARIES (309,849) - -
-------------------------------------------------
OTHER INCOME AND (DEDUCTIONS)
Interest income 52,584 - -
Interest on long-term debt (49,452) - -
Other interest expense (47,738) - -
Minority interest - - -
Other 1,318 - (8)
-------------------------------------------------
(43,288) - (8)
-------------------------------------------------
INCOME (LOSS) FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES (374,541) (1) (9)
INCOME TAX PROVISION (BENEFIT) (23,756) 4 (12)
-------------------------------------------------
INCOME (LOSS) FROM CONTINUING OPERATIONS (350,785) (5) 3
DISCONTINUED OPERATIONS, NET OF TAXES - - -
-------------------------------------------------
NET INCOME (LOSS) $ (350,785) $ (5) $ 3
=================================================
<CAPTION>
TOTAL
GAS ELIMINATIONS MCNIC
SERVICES AND RECLASSES CONSOL.
-------------------------------------------------
<S> <C> <C> <C>
OPERATING REVENUES
Gas and oil sales $ 914,050 $ (98,617) $ 815,433
Transportation 12,728 - 12,728
Other 14,163 - 14,163
-------------------------------------------------
940,941 (98,617) 842,324
-------------------------------------------------
OPERATING EXPENSES
Cost of gas 808,805 - 808,805
Operation and maintenance 84,266 (38,226) 65,153
Depreciation, depletion and amortization 3,142 - 2,825
Property and other taxes 1,458 (1) 2,346
UNUSUAL CHARGES 140,151 - 141,872
-------------------------------------------------
1,037,822 (38,227) 1,021,001
-------------------------------------------------
OPERATING INCOME (LOSS) (96,881) (60,390) (178,677)
-------------------------------------------------
EQUITY IN EARNINGS OF JOINT VENTURES AND SUBSIDIARIES 61,242 309,849 61,242
-------------------------------------------------
OTHER INCOME AND (DEDUCTIONS)
Interest income 3,620 (50,021) 6,183
Interest on long-term debt 4,860 29,474 (15,118)
Other interest expense (26,988) 50,451 (24,275)
Minority interest 265 - 265
Other 11,343 (268) 12,385
-------------------------------------------------
(6,900) 29,636 (20,560)
-------------------------------------------------
INCOME (LOSS) FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES (42,539) 279,095 (137,995)
INCOME TAX PROVISION (BENEFIT) (28,722) (2) (52,488)
-------------------------------------------------
INCOME (LOSS) FROM CONTINUING OPERATIONS (13,817) 279,097 (85,507)
DISCONTINUED OPERATIONS, NET OF TAXES (272,791) - (272,791)
-------------------------------------------------
NET INCOME (LOSS) $ (286,608) $ 279,097 $ (358,298)
=================================================
</TABLE>
10
<PAGE> 15
MCN ENERGY GROUP INC.
MCN INVESTMENT CORPORATION
CONSOLIDATING STATEMENT OF FINANCIAL POSITION
(IN THOUSANDS)
AS OF DECEMBER 31, 1998
(UNAUDITED)
(RESTATED)
<TABLE>
<CAPTION>
COMBUSTION
MCNIC BRIDGEWATER CONCEPTS
-------------------------------------------------
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents
at cost (which approximates market value) $ 797,250 $ 9 $ 22
Accounts receivable 16,561 - -
Less: Allowance for doubtful accounts - - -
Gas in inventory - - -
Property taxes assessed applicable to
future periods - 5 -
Other 4,758 - -
-------------------------------------------------
818,569 14 22
-------------------------------------------------
DEFERRED CHARGES AND OTHER ASSETS
Deferred income taxes - - -
Investment in debt and equity securities - - -
Deferred swap losses and receivables - - -
Other 26,763 79 67
-------------------------------------------------
26,763 79 67
-------------------------------------------------
INVESTMENTS IN AND ADVANCES TO JOINT
VENTURES AND SUBSIDIARIES 1,111,735 - -
-------------------------------------------------
PROPERTY, PLANT AND EQUIPMENT, AT COST 1,533 984 -
Less: Accumulated depreciation and depletion 79 - -
-------------------------------------------------
1,454 984 -
-------------------------------------------------
$ 1,958,521 $ 1,077 $ 89
=================================================
<CAPTION>
TOTAL
GAS ELIMINATIONS MCNIC
SERVICES AND RECLASSES CONSOL.
-------------------------------------------------
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents
at cost (which approximates market value) $ 33,936 $ (822,181) $ 9,036
Accounts receivable 276,653 (27,902) 265,312
Less: Allowance for doubtful accounts 653 - 653
Gas in inventory 90,418 - 90,418
Property taxes assessed applicable to
future periods 1,167 - 1,172
Other (6,415) 13,529 11,872
-------------------------------------------------
395,106 (836,554) 377,157
-------------------------------------------------
DEFERRED CHARGES AND OTHER ASSETS
Deferred income taxes - 128,807 128,807
Investment in debt and equity securities 1,764 1,784 3,548
Deferred swap losses and receivables 51,023 12,124 63,147
Other 118,044 (118,083) 26,870
-------------------------------------------------
170,831 24,632 222,372
-------------------------------------------------
INVESTMENTS IN AND ADVANCES TO JOINT
VENTURES AND SUBSIDIARIES 777,756 (1,107,020) 782,471
-------------------------------------------------
PROPERTY, PLANT AND EQUIPMENT, AT COST 1,101,198 1 1,103,716
Less: Accumulated depreciation and depletion 229,865 - 229,944
-------------------------------------------------
871,333 1 873,772
-------------------------------------------------
$ 2,215,026 $ (1,918,941) $ 2,255,772
=================================================
</TABLE>
11
<PAGE> 16
MCN ENERGY GROUP INC.
MCN INVESTMENT CORPORATION
CONSOLIDATING STATEMENT OF FINANCIAL POSITION
(IN THOUSANDS)
AS OF DECEMBER 31, 1998
(UNAUDITED)
(RESTATED)
<TABLE>
<CAPTION>
COMBUSTION
MCNIC BRIDGEWATER CONCEPTS
-----------------------------------------------
<S> <C> <C> <C>
LIABILITIES AND CAPITALIZATION
CURRENT LIABILITIES
Accounts payable $ 7,747 $ 4 $ 1
Notes payable 119,123 - -
Current portion of long-term debt and capital lease
obligations 210,000 - -
Federal income, property and other taxes payable 3,098 (186) 26
Gas Payable - - -
Other 21,289 - -
-----------------------------------------------
361,257 (182) 27
-----------------------------------------------
DEFERRED CREDITS AND OTHER LIABILITIES
Deferred income taxes 2,647 214 (5)
Deferred swap gains and payables - - -
Minority interest - - -
Other 7,687 - 41
-----------------------------------------------
10,334 214 36
-----------------------------------------------
CAPITALIZATION
Long-term debt, including capital lease obligations 684,337 - -
Common shareholders' equity 902,593 1,045 26
-----------------------------------------------
1,586,930 1,045 26
-----------------------------------------------
$ 1,958,521 $ 1,077 $ 89
===============================================
<CAPTION>
TOTAL
GAS ELIMINATIONS MCNIC
SERVICES AND RECLASSES CONSOL.
-----------------------------------------------
<S> <C> <C> <C>
LIABILITIES AND CAPITALIZATION
CURRENT LIABILITIES
Accounts payable $ 245,582 $ (34,483) $ 218,851
Notes payable 814,360 (795,721) 137,762
Current portion of long-term debt and capital lease
obligations 1,433 - 211,433
Federal income, property and other taxes payable 4,027 - 6,965
Gas Payable 17,332 - 17,332
Other 7,147 (3,160) 25,276
-----------------------------------------------
1,089,881 (833,364) 617,619
-----------------------------------------------
DEFERRED CREDITS AND OTHER LIABILITIES
Deferred income taxes (28,799) 25,943 -
Deferred swap gains and payables 62,956 - 62,956
Minority interest 2,697 - 2,697
Other 12,495 (4,482) 15,741
-----------------------------------------------
49,349 21,461 81,394
-----------------------------------------------
CAPITALIZATION
Long-term debt, including capital lease obligations 2,996 - 687,333
Common shareholders' equity 1,072,800 (1,107,038) 869,426
-----------------------------------------------
1,075,796 (1,107,038) 1,556,759
-----------------------------------------------
$ 2,215,026 $ (1,918,941) $ 2,255,772
===============================================
</TABLE>
12
<PAGE> 17
MCN ENERGY GROUP INC.
GAS SERVICES
CONSOLIDATING STATEMENT OF OPERATIONS
(IN THOUSANDS)
FOR THE YEAR ENDED DECEMBER 31, 1998
(UNAUDITED)
(RESTATED)
<TABLE>
<CAPTION>
CONSOLIDATED MCNIC CONSOLIDATED
COENERGY COENERGY COENERGY GAS MCNIC
CANADIAN TRADING SUPPLY STORAGE CO. POWER CO.
-----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
OPERATING REVENUES
Gas and oil sales $ - $ 792,529 $ 72,438 $ 4 $ 49,079
Transportation - - - - -
Other - 2,358 - 5,280 (1,948)
----------------------------------------------------------------------
- 794,887 72,438 5,284 47,131
----------------------------------------------------------------------
OPERATING EXPENSES
Cost of gas - 780,776 64,607 4 44,711
Operation and maintenance 98 27,607 - 3,936 2,164
Depreciation, depletion and amortization - 1,229 - - 8
Property and other taxes 1 269 69 - 136
Property write-downs and restructuring charges - - - - -
----------------------------------------------------------------------
99 809,881 64,676 3,940 47,019
----------------------------------------------------------------------
OPERATING INCOME (LOSS) (99) (14,994) 7,762 1,344 112
----------------------------------------------------------------------
EQUITY IN EARNINGS OF JOINT VENTURES AND SUBSIDIARIES - 886 - 1,812 22,394
----------------------------------------------------------------------
OTHER INCOME AND (DEDUCTIONS)
Interest income 64 687 160 765 107
Interest on long-term debt - - - - -
Other interest expense - (5,348) (181) (196) (1,832)
Investment losses - - - - -
Minority interest - - - - -
Other (3) 6,014 - (220) 5,036
----------------------------------------------------------------------
61 1,353 (21) 349 3,311
----------------------------------------------------------------------
INCOME (LOSS) FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES (38) (12,755) 7,741 3,505 25,817
INCOME TAX PROVISION (BENEFIT) (22) (4,427) 2,709 1,229 8,873
----------------------------------------------------------------------
INCOME (LOSS) FROM CONTINUING OPERATIONS (16) (8,328) 5,032 2,276 16,944
DISCONTINUED OPERATIONS, NET OF TAXES - - - - -
----------------------------------------------------------------------
NET INCOME (LOSS) $ (16) $ (8,328) $ 5,032 $ 2,276 $ 16,944
======================================================================
<CAPTION>
CONSOLIDATED
MCNIC
CONSOLIDATED CONSOLIDATED PIPELINE & TOTAL
INT'L DISCONTINUED PROCESSING ELIMINATIONS GAS
SERVICES E&P OPERATIONS GROUP AND RECLASSES SERVICES
------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
OPERATING REVENUES
Gas and oil sales $ - $ 200,265 $ - $ (200,265) $ 914,050
Transportation - - 12,728 - 12,728
Other - 6,837 8,473 (6,837) 14,163
-----------------------------------------------------------------------
- 207,102 21,201 (207,102) 940,941
-----------------------------------------------------------------------
OPERATING EXPENSES
Cost of gas - - 12,045 (93,338) 808,805
Operation and maintenance 2,464 87,454 15,051 (54,508) 84,266
Depreciation, depletion and amortization 200 80,576 1,705 (80,576) 3,142
Property and other taxes - 10,050 983 (10,050) 1,458
Property write-downs and restructuring charges 2,469 416,977 137,681 (416,976) 140,151
-----------------------------------------------------------------------
5,133 595,057 167,465 (655,448) 1,037,822
-----------------------------------------------------------------------
OPERATING INCOME (LOSS) (5,133) (387,955) (146,264) 448,346 (96,881)
-----------------------------------------------------------------------
EQUITY IN EARNINGS OF JOINT VENTURES AND SUBSIDIARIES 6,152 - 29,987 11 61,242
-----------------------------------------------------------------------
OTHER INCOME AND (DEDUCTIONS)
Interest income 837 426 1,001 (427) 3,620
Interest on long-term debt 1,515 (13,677) 3,346 13,676 4,860
Other interest expense (1,704) (37,381) (17,727) 37,381 (26,988)
Investment losses - (6,135) - 6,135 -
Minority interest - - 265 - 265
Other - 566 260 (310) 11,343
-----------------------------------------------------------------------
648 (56,201) (12,855) 56,455 (6,900)
-----------------------------------------------------------------------
INCOME (LOSS) FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES 1,667 (444,156) (129,132) 504,812 (42,539)
INCOME TAX PROVISION (BENEFIT) (660) (171,365) (46,892) 181,833 (28,722)
-----------------------------------------------------------------------
INCOME (LOSS) FROM CONTINUING OPERATIONS 2,327 (272,791) (82,240) 322,979 (13,817)
DISCONTINUED OPERATIONS, NET OF TAXES - (272,791) - - (272,791)
-----------------------------------------------------------------------
NET INCOME (LOSS) $ 2,327 $ - $ (82,240) $ 50,188 $(286,608)
=======================================================================
</TABLE>
13
<PAGE> 18
MCN ENERGY GROUP INC.
GAS SERVICES
CONSOLIDATING STATEMENT OF FINANCIAL POSITION
(IN THOUSANDS)
AS OF DECEMBER 31, 1998
(UNAUDITED)
(RESTATED)
<TABLE>
<CAPTION>
CONSOLIDATED MCNIC CONSOLIDATED
COENERGY COENERGY COENERGY GAS MCNIC
CANADIAN TRADING SUPPLY CO. STORAGE CO. POWER CO.
------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
CURRENT ASSETS
Cash and temporary cash investments
at cost (which approximates market value) $ 1,729 $ 4,068 $ 20 $ 26 $ 599
Accounts receivable - 141,263 13,976 42,791 16,266
Less: Allowance for doubtful account - 653 - - -
Gas in inventory - 88,734 - - 1,684
Property taxes assessed applicable to future periods - - - - -
Other - (12,461) - 40 114
------------------------------------------------------------------------
1,729 220,951 13,996 42,857 18,663
------------------------------------------------------------------------
DEFERRED CHARGES AND OTHER ASSETS
Deferred income taxes - - - - -
Investment in debt and equity securities - 42 - 1,250 472
Deferred swap losses and receivables - 51,023 - - -
Other - 12,736 - 1,451 19,299
------------------------------------------------------------------------
- 63,801 - 2,701 19,771
------------------------------------------------------------------------
INVESTMENTS IN AND ADVANCES TO JOINT
VENTURES AND SUBSIDIARIES - 2,325 - 19,710 115,627
------------------------------------------------------------------------
PROPERTY, PLANT AND EQUIPMENT, AT COST - 3,781 - 19 3,865
Less: Accumulated depreciation and depletion - 1,454 - 1 45
------------------------------------------------------------------------
- 2,327 - 18 3,820
------------------------------------------------------------------------
$ 1,729 $ 289,404 $ 13,996 $ 65,286 $ 157,881
========================================================================
<CAPTION>
CONSOLIDATED
MCNIC
CONSOLIDATED CONSOLIDATED PIPELINE & TOTAL
INT'L DISCONTINUED PROCESSING ELIMINATIONS GAS
SERVICES E&P OPERATIONS GROUP AND RECLASSES SERVICES
------------------------------------------------------------------------
ASSETS
CURRENT ASSETS
Cash and temporary cash investments
at cost (which approximates market value) $ 20 $ 30,493 $ (544) $ (2,475) $ 33,936
Accounts receivable - 71,799 8,961 (18,403) 276,653
Less: Allowance for doubtful account - - - - 653
Gas in inventory - - - - 90,418
Property taxes assessed applicable to future periods - - 1,167 - 1,167
Other 816 736 4,338 2 (6,415)
------------------------------------------------------------------------
836 103,028 13,922 (20,876) 395,106
------------------------------------------------------------------------
DEFERRED CHARGES AND OTHER ASSETS
Deferred income taxes - - - - -
Investment in debt and equity securities - - - - 1,764
Deferred swap losses and receivables - - - - 51,023
Other 8,577 72,618 1,808 1,555 118,044
------------------------------------------------------------------------
8,577 72,618 1,807 1,555 170,831
------------------------------------------------------------------------
INVESTMENTS IN AND ADVANCES TO JOINT
VENTURES AND SUBSIDIARIES 136,541 3 503,548 2 777,756
------------------------------------------------------------------------
PROPERTY, PLANT AND EQUIPMENT, AT COST 4,781 1,040,047 48,707 (2) 1,101,198
Less: Accumulated depreciation and depletion 200 224,795 3,371 (1) 229,865
------------------------------------------------------------------------
4,581 815,252 45,336 (1) 871,333
------------------------------------------------------------------------
$ 150,535 $ 990,901 $ 564,614 $ (19,320) $ 2,215,026
========================================================================
</TABLE>
14
<PAGE> 19
MCN ENERGY GROUP INC.
GAS SERVICES
CONSOLIDATING STATEMENT OF FINANCIAL POSITION
(IN THOUSANDS)
AS OF DECEMBER 31, 1998
(UNAUDITED)
(RESTATED)
<TABLE>
<CAPTION>
CONSOLIDATED MCNIC CONSOLIDATED
COENERGY COENERGY COENERGY GAS MCNIC
CANADIAN TRADING SUPPLY STORAGE CO. POWER CO.
------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
LIABILITIES AND CAPITALIZATION
CURRENT LIABILITIES
Accounts payable $ 1,320 $ 109,015 $ 9,077 $ 18,679 $ 10,999
Notes payable - 56,606 4,216 3,875 43,888
Current portion of long-term debt and capital lease
obligations - - - - -
Federal income, property and other taxes
payable (126) (7,473) 117 1,131 3,729
Gas payable - 17,332 - - -
Other 8 461 14 20 40
------------------------------------------------------------------------
1,202 175,941 13,424 23,705 58,656
------------------------------------------------------------------------
DEFERRED CREDITS AND OTHER LIABILITIES
Accumulated deferred income taxes - 654 - 1,464 8,044
Deferred swap gains and payables - - - - -
Minority interest - 62,956 - - -
Other - 4,921 - 3,097 1,977
------------------------------------------------------------------------
- 68,531 - 4,561 10,021
------------------------------------------------------------------------
CAPITALIZATION
Long-term debt, including capital lease obligations - - - 788 1,200
Common shareholders' equity 527 44,932 572 36,232 88,004
------------------------------------------------------------------------
527 44,932 572 37,020 89,204
------------------------------------------------------------------------
$ 1,729 $ 289,404 $ 13,996 $ 65,286 $ 157,881
========================================================================
</TABLE>
<TABLE>
<CAPTION>
CONSOLIDATED
MCNIC
CONSOLIDATED CONSOLIDATED PIPELINE & TOTAL
INT'L DISCONTINUED PROCESSING ELIMINATIONS GAS
SERVICES E&P OPERATIONS GROUP AND RECLASSES SERVICES
------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
LIABILITIES AND CAPITALIZATION
CURRENT LIABILITIES
Accounts payable $ 640 $ 86,951 $ 28,223 $ (19,322) $ 245,582
Notes payable 26,011 368,836 310,929 (1) 814,360
Current portion of long-term debt and capital lease
obligations - 1,433 - - 1,433
Federal income, property and other taxes
payable 204 6,301 144 - 4,027
Gas payable - - - - 17,332
Other 140 2,908 3,553 3 7,147
------------------------------------------------------------------------
26,995 466,429 342,849 (19,320) 1,089,881
------------------------------------------------------------------------
DEFERRED CREDITS AND OTHER LIABILITIES
Accumulated deferred income taxes - (28,872) (10,089) - (28,799)
Deferred swap gains and payables - - - - 62,956
Minority interest - - 2,697 - 2,697
Other - 2,500 - - 12,495
------------------------------------------------------------------------
- (26,372) (7,392) - 49,349
------------------------------------------------------------------------
CAPITALIZATION
Long-term debt, including capital lease obligations - 929 79 - 2,996
Common shareholders' equity 123,540 549,915 229,078 - 1,072,800
------------------------------------------------------------------------
123,540 550,844 229,157 - 1,075,796
------------------------------------------------------------------------
$ 150,535 $ 990,901 $ 564,614 $ (19,320) $2,215,026
========================================================================
</TABLE>
15
<PAGE> 20
MCN ENERGY GROUP INC.
MCNIC PIPELINE & PROCESSING COMPANY
CONSOLIDATING STATEMENT OF OPERATIONS
(IN THOUSANDS)
FOR THE YEAR ENDED DECEMBER 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
PIPELINE & OFFSHORE
PROCESSING PIPELINE MICHIGAN MOBILE BAY MCNIC
COMPANY JONAH AND PROC. HOLDINGS PIPELINE INDIANA METHANOL RODEO
PARENT PIPELINE COMPANY INC. COMPANY GATHERING COMPANIES GATHERING
-----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
OPERATING REVENUES
Gas sales $ - $ - $ - $ - $ - $ - $ - $ -
Transportation 12,080 - - 438 - 210 - -
Other 13 - - 7,946 - 120 - -
-----------------------------------------------------------------------------------------
12,093 - - 8,384 - 330 - -
-----------------------------------------------------------------------------------------
OPERATING EXPENSES
Cost of gas 12,038 - - 8 - - - -
Operation and maintenance 3,484 - - 2,243 (43) 184 - -
Depreciation, depletion and amortization 141 5 - 1,403 78 61 9 -
Property and other taxes 3 - 26 431 185 10 - -
Property write-downs and
restructuring charges 137,681 - - - - - - -
-----------------------------------------------------------------------------------------
153,347 5 26 4,085 220 255 9 -
-----------------------------------------------------------------------------------------
OPERATING INCOME (141,254) (5) (26) 4,299 (220) 75 (9) -
-----------------------------------------------------------------------------------------
EQUITY IN EARNINGS OF JOINT VENTURES
AND SUBSIDIARIES 15,551 1,890 170 5,708 5,591 - 2,743 562
-----------------------------------------------------------------------------------------
OTHER INCOME AND (DEDUCTIONS)
Interest income 5,616 - - 41 - - - -
Interest on long-term debt 3,096 - - - 250 - - -
Other interest expense (17,718) - (10) (1,562) (3,094) - - -
Other 240 - - (169) - - - -
-----------------------------------------------------------------------------------------
(8,766) - (10) (1,690) (2,844) - - -
-----------------------------------------------------------------------------------------
INCOME BEFORE INCOME TAXES (134,469) 1,885 134 8,317 2,527 75 2,734 562
INCOME TAX PROVISION (BENEFIT) (52,229) 660 47 3,097 748 - 957 227
-----------------------------------------------------------------------------------------
NET INCOME (LOSS) $ (82,240) $ 1,225 $ 87 $ 5,220 $ 1,779 $ 75 $ 1,777 $ 335
=========================================================================================
<CAPTION>
AMERICAN
MCNIC PSCO2 CENTRAL MOBILE
EAST COAST MCNIC VECTOR PETRO- EASTERN BAY PROC COAL FINES
PIPELINE COPANO/KCS MILLENNIUM COMPANY SOURCE) TEXAS COMPANY CONSOL
-----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
OPERATING REVENUES
Gas sales $ - $ - $ - $ - $ - $ - $ - $ -
Transportation - - - - - - - -
Other - - - - - - - 394
-----------------------------------------------------------------------------------------
- - - - - - - 394
-----------------------------------------------------------------------------------------
OPERATING EXPENSES
Cost of gas - - - - - - - -
Operation and maintenance - - - - - - - 9,182
Depreciation, depletion and amortization - 6 - - - - - 3
Property and other taxes - - - - - - - 328
Property write-downs and
restructuring charges - - - - - - - -
-----------------------------------------------------------------------------------------
- 6 - - - - - 9,513
-----------------------------------------------------------------------------------------
OPERATING INCOME - (6) - - - - - (9,119)
-----------------------------------------------------------------------------------------
EQUITY IN EARNINGS OF JOINT VENTURES
AND SUBSIDIARIES 2,477 1,877 243 214 1,136 6,215 69 -
-----------------------------------------------------------------------------------------
OTHER INCOME AND (DEDUCTIONS)
Interest income - - - - - - - -
Interest on long-term debt - - - - - - - -
Other interest expense - - - - - - - -
Other - - - - - - 19 457
-----------------------------------------------------------------------------------------
- - - - - - 19 457
-----------------------------------------------------------------------------------------
INCOME BEFORE INCOME TAXES 2,477 1,871 243 214 1,136 6,215 88 (8,662)
INCOME TAX PROVISION (BENEFIT) 1 655 - - 398 2,175 31 (3,659)
-----------------------------------------------------------------------------------------
NET INCOME (LOSS) $ 2,476 $ 1,216 $ 243 $ 214 $ 738 $ 4,040 $ 57 $ (5,003)
=========================================================================================
</TABLE>
<TABLE>
<CAPTION>
PIPELINE & PIPELINE &
PROCESSING PROCESSING
COMPANY COMPANY
ELIMINATIONS CONSOL.
-------------------------
<S> <C> <C>
OPERATING REVENUES
Gas sales $ - $ -
Transportation - 12,728
Other - 8,473
-------------------------
- 21,201
--------------------------
OPERATING EXPENSE:
Cost of gas (1) 12,045
Operation and maintenance 1 15,051
Depreciation, depletion and amortization (1) 1,705
Property and other taxes - 983
Property write-downs and
restructuring charges - 137,681
--------------------------
(1) 167,264
--------------------------
OPERATING INCOME 1 (146,264)
--------------------------
EQUITY IN EARNINGS OF JOINT VENTURES
AND SUBSIDIARIES (14,459) 29,987
--------------------------
OTHER INCOME AND (DEDUCTIONS)
Interest income (4,656) 1,001
Interest on long-term debt - 3,346
Other interest expense 4,657 (17,727)
Other (22) 525
--------------------------
(21) (12,855)
--------------------------
INCOME BEFORE INCOME TAXES (14,479) (129,132)
INCOME TAX PROVISION (BENEFIT) - (46,892)
--------------------------
NET INCOME (LOSS) $(14,479) $ (82,240)
==========================
</TABLE>
16
<PAGE> 21
MCN ENERGY GROUP INC.
MCNIC PIPELINE & PROCESSING COMPANY
CONSOLIDATING STATEMENT OF FINANCIAL POSITION
(IN THOUSANDS)
AS OF DECEMBER 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
PIPELINE & OFFSHORE
PROCESSING PIPELINE MICHIGAN MOBILE BAY MCNIC
COMPANY JONAH AND PROC. HOLDINGS PIPELINE INDIANA METHANOL RODEO
PARENT PIPELINE COMPANY INC. COMPANY GATHERING COMPANIES GATHERING
------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
CURRENT ASSETS
Cash and temporary cash investments
at cost (which approximates market value) $ 93,110 $ - $ - $ 739 $ - $ - $ - $ -
Accounts receivable, net 3,248 394 - 2,792 1,566 230 - -
Property taxes assessed applicable to
future periods - - - - - - - -
Other 1,168 - 14 3,541 36 - - -
-----------------------------------------------------------------------------------
97,526 394 14 7,072 1,602 230 - -
-----------------------------------------------------------------------------------
DEFERRED CHARGES AND OTHER ASSETS
Investment in debt and equity securities - - - - - - - -
Other 268 - 115 304 332 - 200 -
-----------------------------------------------------------------------------------
268 - 115 304 332 - 200 -
-----------------------------------------------------------------------------------
INVESTMENTS IN AND ADVANCES TO JOINT
VENTURES AND SUBSIDIARIES 515,504 11,855 9,133 66,742 91,495 - 53,811 5,990
-----------------------------------------------------------------------------------
PROPERTY, PLANT AND EQUIPMENT, AT COST (99,321) 151 - 32,322 3,828 1,223 256 -
Less: Accumulated depreciation and depletion 158 9 - 3,128 (37) 83 15 -
-----------------------------------------------------------------------------------
(99,479) 142 - 29,194 3,865 1,140 241 -
-----------------------------------------------------------------------------------
$ 513,819 $ 12,391 $9,262 $103,312 $ 97,294 $ 1,370 $ 54,252 $ 5,990
===================================================================================
<CAPTION>
AMERICAN
MCNIC PSCO2 CENTRAL MOBILE
EAST COAST COPANO/ MCNIC VECTOR PETRO- EASTERN BAY PROC COAL FINES
PIPELINE KCS MILLENNIUM COMPANY SOURCE) TEXAS CMPANY CONSOL
------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
CURRENT ASSETS
Cash and temporary cash investments
at cost (which approximates market value) $ - $ - $ - $ - $ - $ - $ - $ (8)
Accounts receivable, net - - - - - - - 894
Property taxes assessed applicable to
future periods - - - - - - - 340
Other - - - - - - - 905
-----------------------------------------------------------------------------------
- - - - - - - 2,131
-----------------------------------------------------------------------------------
DEFERRED CHARGES AND OTHER ASSETS
Investment in debt and equity securities - - - - - - - -
Other - 5 - - - - (100) 684
-----------------------------------------------------------------------------------
- 5 - - - - (100) 684
-----------------------------------------------------------------------------------
INVESTMENTS IN AND ADVANCES TO JOINT
VENTURES AND SUBSIDIARIES 24,458 43,963 2,701 8,067 25,068 66,327 37,695 -
-----------------------------------------------------------------------------------
PROPERTY, PLANT AND EQUIPMENT, AT COST 28 189 5 1 610 - 1,146 108,269
Less: Accumulated depreciation and depletion - 11 - - - - - 3
-----------------------------------------------------------------------------------
28 178 5 1 610 - 1,146 108,266
-----------------------------------------------------------------------------------
$ 24,486 $ 44,146 $ 2,706 $ 8,068 $ 25,678 $ 66,327 $38,741 $111,081
===================================================================================
<CAPTION>
PIPELINE & PIPELINE &
PROCESSING PROCESSING
COMPANY COMPANY
ELIMINATICONS CONSOL.
--------------------------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and temporary cash investments
at cost (which approximates market value) $ (94,385) $ (544)
Accounts receivable (163) 8,961
Property taxes assessed applicable to
future periods 827 1,167
Other (1,326) 4,338
----------------------
(95,047) 13,922
----------------------
DEFERRED CHARGES AND OTHER ASSETS
Investment in debt and equity securities - -
Other - 1,808
----------------------
- 1,808
----------------------
INVESTMENTS IN AND ADVANCES TO JOINT
VENTURES AND SUBSIDIARIES (459,261) 503,548
----------------------
PROPERTY, PLANT AND EQUIPMENT, AT COST - 48,707
Less: Accumulated depreciation and depletion 1 3,371
----------------------
(1) 45,336
----------------------
$ (554,309) $564,614
======================
</TABLE>
17
<PAGE> 22
MCN ENERGY GROUP INC.
MCNIC PIPELINE & PROCESSING COMPANY
CONSOLIDATING STATEMENT OF FINANCIAL POSITION
(IN THOUSANDS)
AS OF DECEMBER 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
PIPELINE & OFFSHORE
PROCESSING PIPELINE MICHIGAN MOBILE BAY MCNIC
COMPANY JONAH AND PROC. HOLDINGS PIPELINE INDIANA METHANOL RODEO EAST COAST
PARENT PIPELINE COMPANY INC. COMPANY GATHERING COMPANIES GATHERING PIPELINE
-------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
LIABILITIES AND CAPITALIZATION
CURRENT LIABILITIES
Accounts payable $ 18,925 $ - $ 4 $ 838 $ 16 $ 82 $ - $ - $ -
Notes payable 310,929 - - 40,681 53,704 - - - -
Federal income, property and other
taxes payable (641) (159) - 1,107 111 10 (229) 65 -
Other 2,884 - - 211 251 - (1) 706 -
------------------------------------------------------------------------------------------
332,097 (159) 4 42,837 54,082 92 (230) 771 -
------------------------------------------------------------------------------------------
DEFERRED CREDITS AND OTHER LIABILITIES
Accumulated deferred income taxes (47,357) 429 1,210 8,191 11,045 - 11,427 167 (3)
Minority interest - - - 2,235 - - - - -
------------------------------------------------------------------------------------------
(47,357) 429 1,210 10,426 11,045 - 11,427 167 (3)
------------------------------------------------------------------------------------------
CAPITALIZATION
Long-term debt, including capital
lease obligations - - 79 - - - - - -
Common shareholders' equity 229,079 12,121 7,969 50,049 32,167 1,278 43,055 5,052 24,489
------------------------------------------------------------------------------------------
229,079 12,121 8,048 50,049 32,167 1,278 43,055 5,052 24,489
------------------------------------------------------------------------------------------
$513,819 $12,391 $ 9,262 $103,312 $ 97,294 $ 1,370 $54,252 $ 5,990 $ 24,486
==========================================================================================
</TABLE>
<TABLE>
<CAPTION>
AMERICAN PIPELINE & PIPELINE &
MCNIC PSCO2 CENTRAL MOBILE PROCESSING PROCESSING
MCNIC VECTOR PETRO- EASTERN BAY PROC COAL FINES COMPANY COMPANY
COPANO/KCS MILLENNIUM COMPANY SOURCE) TEXAS COMPANY CONSOL ELIMINATIONS CONSOL.
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
LIABILITIES AND CAPITALIZATION
CURRENT LIABILITIES
Accounts payable $ - $ - $ - $ - $ - $ - $ 8,513 $ (155) $ 28,223
Notes payable - - - - - - - (94,385) 310,929
Federal income, property and other
taxes payable (840) - - (222) 80 - 863 (1) 144
Other (1) - - - - - - (497) 3,553
--------------------------------------------------------------------------------------------
(841) - - (222) 80 - 9,376 (95,038) 342,849
--------------------------------------------------------------------------------------------
DEFERRED CREDITS AND OTHER LIABILITIES
Accumulated deferred income taxes 1,221 - - 404 574 (4) 2,607 - (10,089)
Minority interest - - - - - - 72 390 2,697
--------------------------------------------------------------------------------------------
1,221 - - 404 574 (4) 2,679 390 (7,392)
--------------------------------------------------------------------------------------------
CAPITALIZATION
Long-term debt, including capital
lease obligations - - - - - - - - 79
Common shareholders' equity 43,766 2,706 8,068 25,496 65,673 38,745 99,026 (459,661) 229,078
--------------------------------------------------------------------------------------------
43,766 2,706 8,068 25,496 65,673 38,745 99,026 (459,661) 229,157
--------------------------------------------------------------------------------------------
$ 44,146 $ 2,706 $ 8,068 $25,678 $66,327 $38,741 $111,081 $ (554,309) $ 564,614
============================================================================================
</TABLE>
18
<PAGE> 23
MCN ENERGY GROUP INC.
COENERGY TRADING COMPANY
CONSOLIDATING STATEMENT OF OPERATIONS
(IN THOUSANDS)
FOR THE YEAR ENDED DECEMBER 31, 1998
(UNAUDITED)
(RESTATED)
<TABLE>
<CAPTION>
COENERGY
COENERGY SALES &
TRADING COENERGY
COMPANY DEV. CO. ELIM.
--------------------------------------------------------
OPERATING REVENUES
<S> <C> <C> <C>
Gas sales $ 792,529 $ - $ -
Other 2,358 - -
--------------------------------------------------------
794,887 - -
--------------------------------------------------------
OPERATING EXPENSES
Cost of gas 780,776 - -
Operation and maintenance 27,607 - -
Depreciation, depletion and amortization 1,229 - -
Property and other taxes 269 - -
--------------------------------------------------------
809,881 - -
--------------------------------------------------------
OPERATING INCOME (Loss) (14,994) - -
--------------------------------------------------------
EQUITY IN EARNINGS (LOSSES) OF JOINT VENTURES AND SUBSIDIARIES 1,525 (1,825) 1,186
--------------------------------------------------------
OTHER INCOME AND (DEDUCTIONS)
Interest income 687 - -
Other interest expense (5,348) - -
Other 6,014 - -
--------------------------------------------------------
1,353 - -
--------------------------------------------------------
INCOME BEFORE INCOME TAXES (12,116) (1,825) 1,186
INCOME TAX PROVISION (BENEFIT) (3,788) (639) -
--------------------------------------------------------
NET INCOME (LOSS) $ (8,328) $ (1,186) $ 1,186
========================================================
</TABLE>
<TABLE>
<CAPTION>
COENERGY
TRADING
CONSOL.
-------------
OPERATING REVENUES
<S> <C>
Gas sales $ 792,529
Transportation -
Other 2,358
-------------
794,887
-------------
OPERATING EXPENSES
Cost of gas 780,776
Operation and maintenance 27,607
Depreciation, depletion and amortization 1,229
Property and other taxes 269
-------------
809,881
-------------
OPERATING INCOME (14,994)
-------------
EQUITY IN EARNINGS OF JOINT VENTURES AND SUBSIDIARIES 886
-------------
OTHER INCOME AND (DEDUCTIONS)
Interest income 687
Other interest expense (5,348)
Other 6,014
-------------
1,353
-------------
INCOME BEFORE INCOME TAXES (12,755)
INCOME TAX PROVISION (BENEFIT) (4,427)
-------------
NET INCOME (LOSS) $ (8,328)
=============
</TABLE>
19
<PAGE> 24
MCN ENERGY GROUP INC.
COENERGY TRADING COMPANIES
CONSOLIDATING STATEMENT OF FINANCIAL POSITION
(IN THOUSANDS)
AS OF DECEMBER 31, 1998
(UNAUDITED)
(RESTATED)
<TABLE>
<CAPTION>
COENERGY
COENERGY SALES &
TRADING COENERGY
COMPANY DEV. CO. ELIM.
--------------------------------------------------------
ASSETS
<S> <C> <C> <C>
CURRENT ASSETS
Cash and temporary cash investments
at cost (which approximates market value) $ 4,068 $ - $ -
Accounts receivable, net 140,610 - -
Gas in inventory 88,734 - -
Other (12,461) - -
--------------------------------------------------------
220,951 - -
--------------------------------------------------------
DEFERRED CHARGES AND OTHER ASSETS
Deferred income taxes - - -
Investments in debt and equity services 42 - -
Deferred swap losses and receivables 51,023 - -
Other 12,736 - -
--------------------------------------------------------
63,801 - -
--------------------------------------------------------
INVESTMENTS IN AND ADVANCES TO JOINT
VENTURES AND SUBSIDIARIES 2,964 4,835 (5,474)
--------------------------------------------------------
PROPERTY, PLANT AND EQUIPMENT, AT COST 3,781 - -
Less: Accumulated depreciation and depletion (1,454) - -
--------------------------------------------------------
2,327 - -
--------------------------------------------------------
$ 290,043 $ 4,835 $ (5,474)
========================================================
</TABLE>
<TABLE>
<CAPTION>
COENERGY
TRADING
COMPANY
CONSOL.
-------------
ASSETS
<S> <C>
CURRENT ASSETS
Cash and temporary cash investments
at cost (which approximates market value) $ 4,068
Accounts receivable, net 140,610
Gas in inventory 88,734
Other (12,461)
-------------
220,951
-------------
DEFERRED CHARGES AND OTHER ASSETS
Deferred income taxes -
Investments in debt and equity services 42
Deferred swap losses and receivables 51,023
Other 12,736
-------------
63,801
-------------
INVESTMENTS IN AND ADVANCES TO JOINT
VENTURES AND SUBSIDIARIES 2,325
-------------
PROPERTY, PLANT AND EQUIPMENT, AT COST 3,781
Less: Accumulated depreciation and depletion (1,454)
-------------
2,327
-------------
$ 289,404
=============
</TABLE>
20
<PAGE> 25
MCN ENERGY GROUP INC.
COENERGY TRADING COMPANY
CONSOLIDATING STATEMENT OF FINANCIAL POSITION
(IN THOUSANDS)
AS OF DECEMBER 31, 1998
(UNAUDITED)
(RESTATED)
<TABLE>
<CAPTION>
COENERGY COENERGY
COENERGY SALES & TRADING
TRADING COENERGY COMPANY
COMPANY DEV. CO. ELIM. CONSOL.
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
LIABILITIES AND CAPITALIZATION
CURRENT LIABILITIES
Accounts payable $ 126,347 $ - $ - $ 126,347
Notes payable 56,606 - - 56,606
Federal income, property and other taxes
payable (7,249) (224) - (7,473)
Other 461 - - 461
---------------------------------------------------------------------
176,165 (224) - 175,941
---------------------------------------------------------------------
DEFERRED CREDITS AND OTHER LIABILITIES
Deferred income taxes 1,069 (415) - 654
Deferred swap gains and payables 62,956 - - 62,956
Other 4,921 - - 4,921
---------------------------------------------------------------------
68,946 (415) - 68,531
---------------------------------------------------------------------
CAPITALIZATION
Common shareholders' equity 44,932 5,474 (5,474) 44,932
---------------------------------------------------------------------
44,932 5,474 (5,474) 44,932
---------------------------------------------------------------------
$ 290,043 $ 4,835 $ (5,474) $ 289,404
=====================================================================
</TABLE>
21
<PAGE> 26
MCN ENERGY GROUP INC.
MCNIC OIL & GAS COMPANY
(DISCONTINUED E&P OPERATIONS)
CONSOLIDATING STATEMENT OF OPERATIONS
(IN THOUSANDS)
FOR THE YEAR ENDED DECEMBER 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
MCNIC GREEN GREEN MCNIC
OIL & GAS ELMIRA WARNER RIVER OAK GEOTREND ENHANCED
---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
OPERATING REVENUES
Gas and oil sales $ 17,385 $ 19,268 $ 13,776 $ 1,734 $ - $ 13,779 $ 5,030
Transportation - - - - - - -
Other 624 318 - - (2) 49 (6)
-------------------------------------------------------------------------
18,009 19,586 13,776 1,734 (2) 13,828 5,024
-------------------------------------------------------------------------
OPERATING EXPENSES
Operation and maintenance 14,298 6,770 8,129 845 49 4,368 3,145
Depreciation, depletion and amortization (2,714) 6,682 4,667 597 - 4,529 2,600
Property and other taxes 461 1,042 1,109 26 (102) 1,019 334
Property write-downs 416,977 - - - - - -
-------------------------------------------------------------------------
429,022 14,494 13,905 1,468 (53) 9,916 6,079
-------------------------------------------------------------------------
OPERATING INCOME 411,013) 5,092 (129) 266 51 3,912 (1,055)
-------------------------------------------------------------------------
EQUITY IN EARNINGS OF JOINT VENTURES AND SUBSIDIARIES 3,898 - - - - - -
-------------------------------------------------------------------------
OTHER INCOME AND (DEDUCTIONS)
Interest income 35,207 - - - - - 47
Interest on long-term debt (20,109) 129 153 - - 719 1,094
Other interest expense (37,124) - (191) - - (12) (2,411)
Investment losses - - - - - - -
Other (43) - - - - - -
-------------------------------------------------------------------------
(22,069) 129 (38) - - 707 (1,270)
------------------------------------------------------------------------
INCOME (LOSS) FROM CONTINUING OPS. BEFORE INCOME TAXES (429,184) 5,221 (167) 266 51 4,619 (2,325)
INCOME TAX PROVISION (BENEFIT) (156,393) (266) 2,050 393 (18) (1,439) 1,024
-------------------------------------------------------------------------
NET INCOME (LOSS) $(272,791) $ 4,955 $ 1,883 $ 659 $ 33 $ 3,180 $ (1,301)
=========================================================================
<CAPTION>
MOG MOG REID MCNIC MCNIC
PROPERTIES PROPERTIES WEST COAST MIDCONTIN
---------------------------------------------
<S> <C> <C> <C> <C>
OPERATING REVENUES
Gas and oil sales $ 57,487 $ 37,688 $ 14,685 $ 18,809
Transportation - - - -
Other 3,635 649 861 1,333
---------------------------------------------
61,122 38,337 15,546 20,142
---------------------------------------------
OPERATING EXPENSES
Operation and maintenance 11,175 21,226 10,530 6,930
Depreciation, depletion and amortization 31,846 12,243 3,339 16,787
Property and other taxes 3,606 1,187 - 1,359
Property write-downs - - - -
---------------------------------------------
46,627 34,656 13,869 25,076
---------------------------------------------
OPERATING INCOME 14,495 3,681 1,677 (4,934)
---------------------------------------------
EQUITY IN EARNINGS OF JOINT VENTURES AND SUBSIDIARIES - - - -
---------------------------------------------
OTHER INCOME AND (DEDUCTIONS)
Interest income 247 - - 6
Interest on long-term debt 7,421 - (3,576) 492
Other interest expense (22,746) (4,551) - (5,031)
Investment losses - - - -
Other - - 609 -
---------------------------------------------
(15,078) (4,551) (2,967) (4,533)
---------------------------------------------
INCOME (LOSS) FROM CONTINUING OPS. BEFORE INCOME TAXES
INCOME TAX PROVISION (BENEFIT) (583) (870) (1,290) (9,467)
978 5,455 703 3,805
---------------------------------------------
NET INCOME (LOSS)
$ 395 $ 4,585 $ (587) $ (5,662)
=============================================
<CAPTION>
CONSOLIDATED
PAGEANT MCNIC MCNIC
CORP CANADIAN ELIMINATIONS OIL & GAS
------------------------------------------
OPERATING REVENUES
Gas and oil sales $ - $ - $ 624 $ 200,265
Transportation - - - -
Other - - (624) 6,837
-------------------------------------------
- - - 207,102
-------------------------------------------
OPERATING EXPENSES
Cost of gas - - - -
Operation and maintenance - - (11) 87,454
Depreciation, depletion and amortization - - - 80,576
Property and other taxes - - 9 10,050
Property write-downs - - - 416,977
-------------------------------------------
- - (2) 595,057
-------------------------------------------
OPERATING INCOME - - 2 (387,955)
-------------------------------------------
EQUITY IN EARNINGS OF JOINT VENTURES AND SUBSIDIARIES - - (3,898) -
-------------------------------------------
OTHER INCOME AND (DEDUCTIONS)
Interest income - - (35,081) 426
Interest on long-term debt - - - (13,677)
Other interest expense (399) - 35,084 (37,381)
Investment losses - - - (6,135)
Other (6,135) - - 566
-------------------------------------------
(6,534) - 3 (56,201)
-------------------------------------------
INCOME (LOSS) FROM CONTINUING OPS. BEFORE INCOME TAXES
INCOME TAX PROVISION (BENEFIT) (6,534) - (3,893) (444,156)
2,287 - - (171,365)
-------------------------------------------
NET INCOME (LOSS)
$ (4,247) $ - $ (3,893) $(272,791)
===========================================
</TABLE>
22
<PAGE> 27
MCN ENERGY GROUP INC.
MCNIC OIL & GAS COMPANY
(DISCONTINUED E&P OPERATIONS)
CONSOLIDATING STATEMENT OF FINANCIAL POSITION
(IN THOUSANDS)
AS OF DECEMBER 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
MCNIC GREEN GREEN MCNIC MOG
OIL & GAS ELMIRA WARNER RIVER OAK GEOTREND ENHANCED PROPERTIES
---------------------------------------------------------------------------------------
ASSETS
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CURRENT ASSETS
Cash and temporary cash investments
at cost (which approximates market
value) $ 589,772 $ - $ - $ - $ - $ - $ 1,085 $ 156
Accounts receivable 9,216 3,260 1,825 326 9 3,568 1,673 35,175
Other 3,444 - 203 - - 21 50 13
---------------------------------------------------------------------------------------
602,432 3,260 2,028 326 9 3,589 2,808 35,344
---------------------------------------------------------------------------------------
DEFERRED CHARGES AND OTHER ASSETS
Other 402 14,593 16,385 4,244 123 6,634 1,720 4,434
---------------------------------------------------------------------------------------
402 14,593 16,385 4,244 123 6,634 1,720 4,434
---------------------------------------------------------------------------------------
INVESTMENTS IN AND ADVANCES TO JOINT
VENTURES AND SUBSIDIARIES 567,393 - - - - - - 4
---------------------------------------------------------------------------------------
PROPERTY, PLANT AND EQUIPMENT, AT COST (326,611) 118,959 127,684 25,524 3,763 94,664 65,973 604,358
Less: Accumulated depreciation and
depletion (31,414) 26,800 19,941 4,078 1,353 11,302 6,357 83,476
---------------------------------------------------------------------------------------
(295,197) 92,159 107,743 21,446 2,410 83,362 59,616 520,882
---------------------------------------------------------------------------------------
$ 875,030 $ 110,012 $ 126,156 $ 26,016 $ 2,542 $ 93,585 $ 64,144 $ 560,664
=======================================================================================
</TABLE>
<TABLE>
<CAPTION>
CONSOLIDATED
MOG REID MCNIC MCNIC PAGEANT MCNIC MCNIC
PROPERTIES WEST COAST MIDCONTIN CORP CANADIAN ELIM. OIL & GAS
-----------------------------------------------------------------------------
ASSETS
<S> <C> <C> <C> <C> <C> <C> <C>
CURRENT ASSETS
Cash and temporary cash investments
at cost (which approximates market
value) $ - $ - $ 1,047 $ 1 $ - $ (561,568) $ 30,493
Accounts receivable 9,639 603 5,550 (37) 1,320 (328) 71,799
Other - - 66 - - (3,061) 736
-----------------------------------------------------------------------------
9,639 603 6,663 (36) 1,320 (564,957) 103,028
-----------------------------------------------------------------------------
DEFERRED CHARGES AND OTHER ASSETS
Other 16,983 (581) 1,764 5,917 (1) 1 72,618
-----------------------------------------------------------------------------
16,983 (581) 1,764 5,917 (1) 1 72,618
-----------------------------------------------------------------------------
INVESTMENTS IN AND ADVANCES TO JOINT
VENTURES AND SUBSIDIARIES - - - - - (567,394) 3
-----------------------------------------------------------------------------
PROPERTY, PLANT AND EQUIPMENT, AT COST 117,529 2,485 205,719 - - - 1,040,047
Less: Accumulated depreciation and
depletion 26,877 - 76,025 - - - 224,795
-----------------------------------------------------------------------------
90,652 2,485 129,694 - - - 815,252
-----------------------------------------------------------------------------
$ 117,274 $ 2,507 $ 138,121 $ 5,881 $ 1,319 $(1,132,350) $ 990,901
=============================================================================
</TABLE>
23
<PAGE> 28
MCN ENERGY GROUP INC.
MCNIC OIL & GAS COMPANY
(DISCONTINUED E&P OPERATIONS)
CONSOLIDATING STATEMENT OF FINANCIAL POSITION
(IN THOUSANDS)
AS OF DECEMBER 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
MCNIC GREEN GREEN MCNIC MOG
OIL & GAS ELMIRA WARNER RIVER OAK GEOTREND ENHANCED PROPERTIES
---------------------------------------------------------------------------------------
LIABILITIES AND CAPITALIZATION
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CURRENT LIABILITIES
Accounts payable $ 71,571 $ 967 $ 762 $ 47 $ - $ 666 $ 1,615 $ (1,507)
Notes payable 369,036 - - - - - 38,589 343,365
Current portion of long-term debt and
capital lease
obligations 71 - 1,226 - - 74 - 62
Federal income, property and other taxes
payable (5,483) 914 1,267 82 (65) 532 (1,442) 3,729
Other 2,929 1 (1) - - - 362 1,775
---------------------------------------------------------------------------------------
438,124 1,882 3,254 129 (65) 1,272 39,124 347,424
---------------------------------------------------------------------------------------
DEFERRED CREDITS AND OTHER LIABILITIES
Accumulated deferred income taxes (119,537) 10,288 6,309 2,579 637 (1,273) 4,747 49,533
Other 2,670 - 568 - - 44 - 148
---------------------------------------------------------------------------------------
(116,867) 10,288 6,877 2,579 637 (1,229) 4,747 49,681
---------------------------------------------------------------------------------------
CAPITALIZATION
Long-term debt, including capital lease
obligations - - - - - - - -
Common shareholders' equity 553,773 97,843 116,025 23,308 1,970 93,542 20,273 163,559
---------------------------------------------------------------------------------------
553,773 97,843 116,025 23,308 1,970 93,542 20,273 163,559
---------------------------------------------------------------------------------------
$ 875,030 $110,013 $126,156 $26,016 $2,542 $93,585 $64,144 $560,664
=======================================================================================
</TABLE>
<TABLE>
<CAPTION>
CONSOLIDATED
MOG REID MCNIC MCNIC PAGEANT MCNIC MCNIC
PROPERTIES WEST COAST MIDCONTIN CORP CANADIAN ELIMINATION OIL & GAS
----------------------------------------------------------------------------
LIABILITIES AND CAPITALIZATION
<S> <C> <C> <C> <C> <C> <C> <C>
CURRENT LIABILITIES
Accounts payable $ 4,886 $ - $ 8,222 $ 50 $ - $ (328) $ 86,951
Notes payable 93,441 - 79,443 6,529 - (561,567) 368,836
Current portion of long-term debt and
capital lease obligations - - - - - - 1,433
Federal income, property and other taxes
payable 5,135 1,540 76 (40) 54 2 6,301
Other 459 - 413 35 - (3,065) 2,908
-------------------------------------------------------------------------------
103,921 1,540 88,154 6,574 54 (564,958) 466,429
-------------------------------------------------------------------------------
DEFERRED CREDITS AND OTHER LIABILITIES
Accumulated deferred income taxes 1,895 (739) 16,690 1 - (2) (28,872)
Other - - - - - (930) 2,500
-------------------------------------------------------------------------------
1,895 (739) 16,690 1 - (932) (26,372)
-------------------------------------------------------------------------------
CAPITALIZATION
Long-term debt, including capital lease
obligations - - - - - 929 929
Common shareholders' equity 11,458 1,706 33,277 (693) 1,265 (567,391) 549,915
-------------------------------------------------------------------------------
11,458 1,706 33,277 (693) 1,265 (566,462) 550,844
-------------------------------------------------------------------------------
$ 117,274 $2,507 $138,121 $ 5,881 $1,319 $(1,132,350) $990,901
===============================================================================
</TABLE>
24
<PAGE> 29
MCN ENERGY GROUP INC.
FINANCING COMPANIES
CONSOLIDATING STATEMENT OF OPERATIONS
(IN THOUSANDS)
FOR THE YEAR ENDED DECEMBER 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
MCN MCN MCN MCN
MICHIGAN FIN. I FIN. II FIN. III
----------------------------------------------------------------
<S> <C> <C> <C> <C>
OPERATING REVENUES
Gas sales $ - $ - $ - $ -
Transportation - - - -
Other - - - -
----------------------------------------------------------------
- - - -
----------------------------------------------------------------
OPERATING EXPENSES
Cost of gas - - - -
Operation and maintenance 1 - - -
Depreciation, depletion and amortization - - - -
Property and other taxes - - - -
----------------------------------------------------------------
1 - - -
----------------------------------------------------------------
OPERATING INCOME (LOSS) (1) - - -
----------------------------------------------------------------
EQUITY IN EARNINGS OF JOINT VENTURES AND SUBSIDIARIES - - - -
----------------------------------------------------------------
OTHER INCOME AND (DEDUCTIONS)
Interest income 9,478 7,113 1,062 9,885
Interest on long-term debt - - - -
Other interest expense - - - -
Gains related to DIGP - - - -
Other - - - -
----------------------------------------------------------------
9,478 7,113 1,062 9,885
----------------------------------------------------------------
NET INCOME 9,477 7,113 1,062 9,885
================================================================
<CAPTION>
FINANCING
MCN MCN COMPANIES
FIN. V FIN. VI CONSOL.
-------------------------------------------
<S> <C> <C> <C>
OPERATING REVENUES
Gas sales $ - $ - $ -
Transportation - - -
Other - - -
-------------------------------------------
- - -
-------------------------------------------
OPERATING EXPENSES
Cost of gas - - -
Operation and maintenance - - 1
Depreciation, depletion and amortization - - -
Property and other taxes - - -
-------------------------------------------
- - 1
-------------------------------------------
OPERATING INCOME (LOSS) - - (1)
-------------------------------------------
EQUITY IN EARNINGS OF JOINT VENTURES AND SUBSIDIARIES - - -
-------------------------------------------
OTHER INCOME AND (DEDUCTIONS)
Interest income 2,708 7,062 37,308
Interest on long-term debt - - -
Other interest expense - - -
Gains related to DIGP - - -
Other - - -
-------------------------------------------
2,708 7,062 37,308
-------------------------------------------
NET INCOME 2,708 7,062 37,307
===========================================
</TABLE>
25
<PAGE> 30
MCN ENERGY GROUP INC.
FINANCING COMPANIES
CONSOLIDATING STATEMENT OF FINANCIAL POSITION
(IN THOUSANDS)
AS OF DECEMBER 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
MCN MCN MCN
MICHIGAN FIN. I FIN. II
-----------------------------------------------------
ASSETS
<S> <C> <C> <C>
CURRENT ASSETS
Cash and temporary cash investments
at cost (which approximates market value) $ - $ - $ -
Accounts receivable - - -
Property taxes assessed applicable to
future periods - - -
Interest receivable - - 1,062
-----------------------------------------------------
- - 1,062
-----------------------------------------------------
DEFERRED CHARGES AND OTHER ASSETS
Notes receivable - affiliate 101,100 82,474 103,093
-----------------------------------------------------
101,100 82,474 103,093
-----------------------------------------------------
INVESTMENTS IN AND ADVANCES TO JOINT
VENTURES AND SUBSIDIARIES - - -
-----------------------------------------------------
PROPERTY, PLANT AND EQUIPMENT, AT COST - - -
Less: Accumulated depreciation and depletion - - -
-----------------------------------------------------
- - -
-----------------------------------------------------
$ 101,100 $ 82,474 $ 104,155
=====================================================
<CAPTION>
CONSOLIDATED
MCN MCN FINANCING
FIN. III FIN. VI COMPANIES
-------------------------------------------------
ASSETS
CURRENT ASSETS
Cash and temporary cash investments
at cost (which approximates market value) $ - $ - $ -
Accounts receivable - - -
Property taxes assessed applicable to
future periods - - -
Interest receivable - 589 1,651
-------------------------------------------------
- 589 1,651
-------------------------------------------------
DEFERRED CHARGES AND OTHER ASSETS
Notes receivable - affiliate 136,340 103,093 526,100
-------------------------------------------------
136,340 103,093 526,100
-------------------------------------------------
INVESTMENTS IN AND ADVANCES TO JOINT
VENTURES AND SUBSIDIARIES - - -
-------------------------------------------------
PROPERTY, PLANT AND EQUIPMENT, AT COST - - -
Less: Accumulated depreciation and depletion - - -
-------------------------------------------------
- - -
-------------------------------------------------
$ 136,340 $ 103,682 $ 527,751
=================================================
</TABLE>
26
<PAGE> 31
MCN ENERGY GROUP INC.
FINANCING COMPANIES
CONSOLIDATING STATEMENT OF FINANCIAL POSITION
(IN THOUSANDS)
AS OF DECEMBER 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
MCN MCN MCN
MICHIGAN FIN. I FIN. II
------------------------------------------------------
<S> <C> <C> <C>
LIABILITIES AND CAPITALIZATION
CURRENT LIABILITIES
Accounts payable $ - $ - $ -
Notes payable - - -
Current portion of long-term debt and capital lease
obligations - - -
Federal income, property and other taxes
payable - - -
Dividends payable - - 1,062
------------------------------------------------------
- - 1,062
------------------------------------------------------
DEFERRED CREDITS AND OTHER LIABILITIES
CAPITALIZATION
Preferred securities 96,819 77,068 100,000
Common shareholders' equity 4,281 5,406 3,093
------------------------------------------------------
$ 101,100 $ 82,474 $ 103,093
------------------------------------------------------
$ 101,100 $ 82,474 $ 104,155
======================================================
<CAPTION>
CONSOLIDATED
MCN MCN FINANCING
FIN. III FIN. VI COMPANIES
--------------------------------------------------
<S> <C> <C> <C>
LIABILITIES AND CAPITALIZATION
CURRENT LIABILITIES
Accounts payable $ - $ - $ -
Notes payable - - -
Current portion of long-term debt and capital lease
obligations - - -
Federal income, property and other taxes
payable - - -
Dividends payable - 589 1,651
--------------------------------------------------
- 589 1,651
--------------------------------------------------
DEFERRED CREDITS AND OTHER LIABILITIES
CAPITALIZATION
Preferred securities 132,250 99,397 505,534
Common shareholders' equity 4,090 3,696 20,566
--------------------------------------------------
$ 136,340 $ 103,093 $ 526,100
--------------------------------------------------
$ 136,340 $ 103,682 $ 527,751
==================================================
</TABLE>
27
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