-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HkHrsmtlaGwDen9QZ5Vl8g+fv5QDml6sngNE9kwR8NW2chUF+0YkMfAJx4Tau77M 9NPEWTLlgbcG+R4/xcdudw== 0000950124-98-003646.txt : 19980630 0000950124-98-003646.hdr.sgml : 19980630 ACCESSION NUMBER: 0000950124-98-003646 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19971231 FILED AS OF DATE: 19980629 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MICHIGAN CONSOLIDATED GAS CO /MI/ CENTRAL INDEX KEY: 0000065632 STANDARD INDUSTRIAL CLASSIFICATION: NATURAL GAS DISTRIBUTION [4924] IRS NUMBER: 380478040 STATE OF INCORPORATION: MI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 11-K SEC ACT: SEC FILE NUMBER: 001-07310 FILM NUMBER: 98656685 BUSINESS ADDRESS: STREET 1: 500 GRISWOLD ST CITY: DETROIT STATE: MI ZIP: 48226 BUSINESS PHONE: 3139652430 11-K 1 FORM 11-K 1 ================================================================================ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ------------------------------- FORM 11-K (Mark One) [X] Annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended December 31, 1997 OR [ ] Transition report pursuant to Section 15(d) of the Securities Exchange Act of 1934 For the transition period from to -------- -------- COMMISSION FILE NUMBER 1-7310 (Michigan Consolidated Gas Company) MICHCON INVESTMENT AND STOCK OWNERSHIP PLAN (Full title of the plan and the address of the plan, if different from that of the issuer named below) MCN ENERGY GROUP INC. (MCN) 500 Griswold Street Detroit, Michigan 48226 (Name of issuer of the common stock issued pursuant to the plan and the address of its principal executive office) ================================================================================ 2 MICHCON INVESTMENT AND STOCK OWNERSHIP PLAN Financial Statements for the Years Ended December 31, 1997 and 1996, Supplemental Schedules for the Year Ended December 31, 1997 and Independent Auditors' Report 3 MICHCON INVESTMENT AND STOCK OWNERSHIP PLAN TABLE OF CONTENTS
Page ---- Financial Statements: Statement of Net Assets Available for Benefits as of December 31, 1997 .................... 1 Statement of Assets Available for Benefits as of December 31, 1996 ........................ 2 Statement of Changes in Assets Available for Benefits for the Year Ended December 31, 1997........................................................................ 3 Notes to Financial Statements.............................................................. 4-8 Supplemental Schedules: Item 27a - Schedule of Assets Held for Investment Purposes as of December 31, 1997 ....................................................................... 9 Item 27d - Schedule of Reportable Transactions For the Year Ended December 31, 1997........................................................................ 10
4 INDEPENDENT AUDITOR'S REPORT To the Trustees and Participants of MichCon Investment and Stock Ownership Plan Detroit, Michigan We have audited the accompanying statements of net assets available for benefits of the MichCon Investment and Stock Ownership Plan (the "Plan") as of December 31, 1997 and 1996, and the related statement of changes in new assets available for benefits for the year ended December 31, 1997. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the accompanying financial statements present fairly, in all material respects, the net assets available for benefits of the Plan at December 31, 1997 and 1996, and the changes in net assets available for benefits for the year ended December 31, 1997, in conformity with generally accepted accounting principles. Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules listed in the Table of Contents are presented for the purpose of additional analysis and are not a required part of the basic financial statements, but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental information by fund in the statement of net assets available for benefits and the statement of changes in net assets available for benefits is presented for the purpose of additional analysis rather than to present the net assets available for benefits and changes in net assets available for benefits of the individual funds. These supplemental schedules and supplemental information by fund is the responsibility of the Plan's management. Such supplemental schedules and supplemental information by fund have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, are fairly stated in all material respects when considered in relation to the basic financial statements taken as a whole. DELOITTE & TOUCHE LLP Detroit, Michigan June 25, 1998 5 MICHCON INVESTMENT AND STOCK OWNERSHIP PLAN STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS AS OF DECEMBER 31, 1997
Supplemental Information by Fund ---------------------------------------------------------- MCN Global Growth Fixed Stock Growth & Income Income Total Fund Fund Fund Fund ---------------- -------------- ---------------------------- -------------- INVESTMENTS, (Notes 1 and 2): Common stock - MCN Energy Group Inc. $ 71,860,057 $ 71,860,057 Registered investment companies 31,975,971 6,009,703 10,612,566 Investment in Master Trust (Note 4) 10,654,758 $ 10,654,758 Loans to participants 5,427,873 ---------------- -------------- ---------------------------- -------------- Total Investments 119,918,659 71,860,057 6,009,703 10,612,566 10,654,758 ---------------- -------------- ---------------------------- -------------- OTHER NET ASSETS: Cash on deposit and in transit (1,411) (12,850) ---------------- -------------- ---------------------------- -------------- Total Assets 119,917,248 71,860,057 6,009,703 10,612,566 10,641,908 ---------------- -------------- ---------------------------- -------------- NET ASSETS AVAILABLE FOR BENEFITS $ 119,917,248 $ 71,860,057 $6,009,703 $10,612,566 $ 10,641,908 ================ ============== ============================ ============== Participating Units - December 31, 1997 Number of Units 1,779,816 603,384 543,120 10,641,908 Value of Units $ 40.38 $ 9.96 $ 19.54 $ 1.00
Supplemental Information by Fund -------------------------------------------------------------------- New Voyager Opportunities Income Loan Forfeiture Fund Fund Fund Fund Fund --------------- ------------- ------------ ------------- ----------- INVESTMENTS, (Notes 1 and 2): Common stock - MCN Energy Group Inc. Registered investment companies 11,909,165 3,121,353 323,184 Investment in Master Trust (Note 4) Loans to participants $5,427,873 --------------- ------------- ------------ ------------- ----------- Total Investments 11,909,165 3,121,353 323,184 5,427,873 - --------------- ------------- ------------ ------------- ----------- OTHER NET ASSETS: Cash on deposit and in transit $ 11,439 --------------- ------------- ------------ ------------- ----------- Total Assets 11,909,165 3,121,353 323,184 5,427,873 11,439 --------------- ------------- ------------ ------------- ----------- NET ASSETS AVAILABLE FOR BENEFITS $ 11,909,165 $3,121,353 $ 323,184 $5,427,873 $ 11,439 =============== ============= ============ ============= =========== Participating Units - December 31, 1997 Number of Units 625,153 64,159 45,455 Value of Units $ 19.05 $ 48.65 $ 7.11
The notes to the financial statements are an integral part of this statement. 1 6 MICHCON INVESTMENT AND STOCK OWNERSHIP PLAN STATEMENT OF ASSETS AVAILABLE FOR BENEFITS AS OF DECEMBER 31, 1996
Supplemental Information by Fund ---------------------------------------------------------------------------- MCN Global Growth Fixed Stock Growth & Income Income Total Fund Fund Fund Fund ---------------- --------------- ------------- ------------- --------------- INVESTMENTS, (Notes 1 and 2): Common stock - MCN Energy Group Inc. $ 54,122,279 $ 54,122,279 Registered investment companies 27,115,771 $5,264,142 $8,927,571 Investment in Master Trust (Note 4) 11,894,532 $ 11,894,532 Loans to participants 4,827,031 ---------------- --------------- ------------- ------------- --------------- Total Investments $ 97,959,613 54,122,279 5,264,142 8,927,571 11,894,532 ---------------- --------------- ------------- ------------- --------------- OTHER ASSETS: Cash on deposit and in transit 3,983 (1,711) ---------------- --------------- ------------- ------------- --------------- Total Assets 97,963,596 54,122,279 5,264,142 8,927,571 11,892,821 ---------------- --------------- ------------- ------------- --------------- ASSETS AVAILABLE FOR BENEFITS $ 97,963,596 $ 54,122,279 $5,264,142 $8,927,571 $ 11,892,821 ================ =============== ============= ============= =============== Participating Units - December 31, 1996 Number of Units 1,874,365 486,520 495,426 11,892,821 Value of Units $ 28.88 $ 10.82 $ 18.02 $ 1.00
Supplemental Information by Fund ----------------------------------------------------------------- New Voyager Opportunities Income Loan Forfeiture Fund Fund Fund Fund Fund ------------- ------------- ------------ ------------- ---------- INVESTMENTS, (Notes 1 and 2): Common stock - MCN Energy Group Inc. Registered investment companies $9,993,788 $2,752,712 $ 177,558 Investment in Master Trust (Note 4) Loans to participants $4,827,031 ------------- ------------- ------------ ------------- ---------- Total Investments 9,993,788 2,752,712 177,558 4,827,031 - ------------- ------------- ------------ ------------- ---------- OTHER ASSETS: Cash on deposit and in transit $5,694 ------------- ------------- ------------ ------------- ---------- Total Assets 9,993,788 2,752,712 177,558 4,827,031 5,694 ------------- ------------- ------------ ------------- ---------- ASSETS AVAILABLE FOR BENEFITS $9,993,788 $2,752,712 $ 177,558 $4,827,031 $5,694 ============= ============= ============ ============= ========== Participating Units - December 31, 1996 Number of Units 619,962 67,751 25,329 Value of Units $ 16.12 $ 40.63 $ 7.01
The notes to the financial statements are an integral part of this statement. 2 7 MICHCON INVESTMENT AND STOCK OWNERSHIP PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS FOR THE YEAR ENDED DECEMBER 31, 1997
Supplemental Information by Fund ------------------------------------------------------------------------------- MCN Global Growth Fixed Stock Growth & Income Income Total Fund Fund Fund Fund --------------- --------------- ------------- --------------- ----------------- ADDITIONS TO ASSETS ATTRIBUTED TO: Investment income $ 5,758,335 $ 1,836,485 $1,085,017 $ 1,393,319 $ 653,922 Change in market value of investments 23,825,723 21,071,332 (377,742) 791,596 - Transfers by participants between investment funds (net) - 879,352 39,401 273,438 (630,797) Transfers to loan fund - (1,136,712) (262,704) (287,921) (212,211) Transfers from loan fund - 703,701 149,580 163,642 211,921 Interest on loans to participants 518,182 244,524 51,332 56,326 71,993 --------------- --------------- ------------- --------------- ----------------- 30,102,240 23,598,682 684,884 2,390,400 94,828 --------------- --------------- ------------- --------------- ----------------- Contributions: Participant 4,173,023 Employer 2,152,569 Forteitures to be used 5,745 --------------- --------------- ------------- --------------- ----------------- Total 6,331,337 2,758,147 592,021 751,909 914,759 Total Additions 36,433,577 26,356,829 1,276,905 3,142,309 1,009,587 --------------- --------------- ------------- --------------- ----------------- DEDUCTIONS FROM ASSETS ATTRIBUTED TO: Distributions to terminated participants (13,622,300) (8,331,671) (444,706) (1,322,861) (2,074,906) Withdrawals (810,582) (246,491) (82,168) (127,399) (193,616) Transfers by participants between plans (net) (47,043) (40,889) (4,470) (7,054) 8,022 --------------- --------------- ------------- --------------- ----------------- Total Deductions (14,479,925) (8,619,051) (531,344) (1,457,314) (2,260,500) --------------- --------------- ------------- --------------- ----------------- NET INCREASE(DECREASE) 21,953,652 17,737,778 745,561 1,684,995 (1,250,913) ASSETS AVAILABLE FOR BENEFITS: Beginning of the period 97,963,596 54,122,279 5,264,142 8,927,571 11,892,821 --------------- --------------- ------------- --------------- ----------------- End of the period $119,917,248 $ 71,860,057 $6,009,703 $ 10,612,566 $ 10,641,908 =============== =============== ============= =============== =================
Supplemental Information by Fund ----------------------------------------------------------------- New Voyager Opportunities Income Loan Forfeiture Fund Fund Fund Fund Fund -------------- ------------- ------------ ------------- --------- ADDITIONS TO ASSETS ATTRIBUTED TO: Investment income $ 704,247 $ 69,391 $ 15,954 - - Change in market value of investments 1,795,859 543,097 1,581 - - Transfers by participants between investment funds (net) (479,409) (157,580) 75,595 - - Transfers to loan fund (418,616) (43,030) (423) 2,361,617 - Transfers from loan fund 223,879 55,771 4,080 (1,512,574) - Interest on loans to participants 73,994 18,709 1,304 - - -------------- ------------- ------------ ------------- --------- 1,899,954 486,358 98,091 849,043 - -------------- ------------- ------------ ------------- --------- Contributions: Participant Employer Forteitures to be used 5,745 -------------- ------------- ------------ ------------- --------- Total 925,925 311,123 71,708 - 5,745 Total Additions 2,825,879 797,481 169,799 849,043 5,745 -------------- ------------- ------------ ------------- --------- DEDUCTIONS FROM ASSETS ATTRIBUTED TO: Distributions to terminated participants (786,819) (391,438) (21,733) (248,166) - Withdrawals (121,850) (36,583) (2,440) (35) - Transfers by participants between plans (net) (1,833) (819) - - - -------------- ------------- ------------ ------------- --------- Total Deductions (910,502) (428,840) (24,173) (248,201) - -------------- ------------- ------------ ------------- --------- NET INCREASE(DECREASE) 1,915,377 368,641 145,626 600,842 5,745 ASSETS AVAILABLE FOR BENEFITS: Beginning of the period 9,993,788 2,752,712 177,558 4,827,031 5,694 -------------- ------------- ------------ ------------- --------- End of the period $ 11,909,165 $3,121,353 $323,184 $5,427,873 $11,439 ============== ============= ============ ============= =========
The notes to the financial statements are an integral part of this statement. 3 8 MICHCON INVESTMENT AND STOCK OWNERSHIP PLAN NOTES TO FINANCIAL STATEMENTS 1. PLAN DESCRIPTION The following description of the MichCon Investment and Stock Ownership Plan (the Plan) provides only general information. Participants should refer to the Plan agreement for a more complete description of the Plan's provisions. GENERAL The Plan is a defined contribution benefit plan for employees covered by the collective bargaining agreements who have attained one year of service and are age 21 or older. It is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). The Plan is sponsored solely by Michigan Consolidated Gas Company (MichCon or the Company), a subsidiary of MCN Energy Group Inc. (MCN). The Plan represents an agreed-upon benefit plan enhancement as ratified by and between the Company and collective bargaining units within the Company. CONTRIBUTIONS Each employee electing to participate in the Plan is required to make regular contributions by payroll deduction. For all union locals, participant contributions, including any Salary Reduction Allotments, are limited to 15% (for highly compensated participants) and 20% (for nonhighly compensated participants) of the participant's compensation as defined in the Plan ("Eligible Compensation"), or such maximum rates as may be approved by the Internal Revenue Service. Participants may elect to have their Eligible Compensation reduced (Salary Reduction Allotments) by up to 9% (nonhighly compensated participants 8%) and have that amount contributed to the Plan. Effective April 1, 1998, for participants who are members of Local #80 - Detroit and the P.T.&S. locals, participant contributions are limited to 17% (for nonhighly compensated participants) of the participant's Eligible Compensation. Effective July 1, 1998, for participants who are members of Local #132, Local 799 - Northern and Local #70 - Muskegon, participant contributions are limited to 17% (for nonhighly compensated participants) of the participant's Eligible Compensation. The Company's maximum matching contributions are limited, depending on years of service, to 2% to 6% of the participant's Eligible Compensation. Seventy-five percent of the Company's matching contributions must be allocated to the MCN Restricted Stock Fund. The Company shall contribute annually (April 1st) to the MCN Restricted Stock Fund accounts for each of its participating union employees on active payroll who have at least 30 years of service, twenty-five shares of MCN Stock (or an equivalent value determined by the Committee in a nondiscriminatory manner, which may be used to purchase MCN Stock). 4 9 MICHCON INVESTMENT AND STOCK OWNERSHIP PLAN NOTES TO FINANCIAL STATEMENTS PARTICIPANT ACCOUNTS Each participant's account is credited with the participant's contribution, allocations of the Company's contributions and Plan earnings. Allocations are based on participant earnings or account balances, as defined. Forfeited balances of terminated participants' nonvested accounts are used to reduce future employer contributions. The benefit to which the participant is entitled is the benefit that can be provided from the participant's vested account. VESTING Participants are immediately vested in their contributions plus actual earnings thereon. Vesting in the employer's matching contribution portion of their accounts plus actual earnings thereon occurs after completion of five years of service. INVESTMENT OPTIONS Participants may transfer existing account balances in the investment funds on a daily basis with the exception of the MCN Restricted Stock Fund. However, participants may change their investment direction and amount of future contributions effective with the next payroll period. With respect to the MCN Stock Fund, Company designated insider traders are limited to a 30-day window following the release of quarterly earnings. Contributions may be directed in any of the following investment options: MCN Stock Fund - Fund invests solely in the common stock of MCN Energy Group Inc. This fund consists of two components, restricted and unrestricted. The restricted fund includes 75% of the employer match which is contributed to the employee stock ownership plan (ESOP) portion of the Plan. The unrestricted fund includes any employee contributions and possibly any portion of the remaining 25% of the employer matching contributions. All 1997 MCN dividends accumulated under the ESOP were passed through to each participant in March 1998 unless the participant elected not to receive such dividends. Putnam Global Growth Fund - Fund consists primarily of common stocks traded in securities markets located in a number of foreign countries and in the United States. Putnam Fund for Growth and Income - Fund consists primarily of common stocks that offer potential for capital growth, current income, or both. The fund may also purchase corporate bonds, notes and debentures, preferred stocks, or convertible securities (both debt securities and preferred stocks) or U.S. government securities. Fixed Income Fund - Fund consists of higher quality investments consistent with the Fund's objective to preserve principal while providing a stable rate of return to the Participant. The investments of the Fixed Income Fund consist of the following: - contracts with insurance companies and other financial institutions providing for fixed rates of interest, and 5 10 MICHCON INVESTMENT AND STOCK OWNERSHIP PLAN NOTES TO FINANCIAL STATEMENTS - investments in specific government and corporate marketable fixed income securities, which are managed by professional investment advisors. Amounts invested in marketable securities are invested through or pursuant to contracts with insurance companies. These contracts provide for a guarantee of the principal invested and accrued interest under the contract. The interest rates under these contracts are adjusted at least annually to recognize the impacts of changing interest rate conditions. Investment advisors for marketable fixed income securities may use fixed income futures and options to reduce the effect of market volatility on the Fund. Putnam Voyager Fund - Fund consists primarily of common stocks of companies with potential for capital appreciation which is significantly greater than that of the market averages and generally invests a significant portion of its assets in the securities of smaller and newer issuers. Putnam New Opportunities Fund - Fund consists primarily of common stocks of companies in sectors of the economy with potential for capital appreciation which is significantly greater than that of the market averages and generally invests a significant portion of its assets in the securities of small to mid-sized companies. Putnam Income Fund - Fund consists primarily of quality corporate and government bonds that pay out a rate of interest in regularly scheduled payments. The fund also invests in selected below-investment grade bonds, which have a higher risk of nonpayment of interest and principal. ADMINISTRATIVE AND BROKERAGE FEES Expenses in connection with the purchase or sale of stock or other securities are charged to the participant for which the purchases or sales are made. The Company pays 100% of the recordkeeping and Trustee expenses for all unions. Participants pay 100% of the investment management and other related expenses of the fund. LOANS Subject to limitations imposed by the Internal Revenue Code and Department of Labor regulations, Plan provisions allow a participant to borrow from the Plan an amount up to 50% of the vested value of his or her salary reduction and ESOP accounts, up to a maximum of $50,000, at an interest rate of 2 1/2% over prime updated quarterly (rounded to the nearest 1/2 %). The outstanding balances of loans are reported in the Loan fund. A participant may have only one loan outstanding at a time and loan refinances are available every twelve months. TERMINATION OF THE PLAN Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of 6 11 MICHCON INVESTMENT AND STOCK OWNERSHIP PLAN NOTES TO FINANCIAL STATEMENTS ERISA. In the event of Plan termination, the Plan assets shall be distributed ratably to the participants in proportion to the total values of their respective Plan accounts. Each participating employer may withdraw from or terminate its participation in the Plan at any time. Under these circumstances, the Committee shall direct the Trustee to (1) segregate, in a separate trust, amounts held under the Plan which are applicable to the participants of such employer (in the event of withdrawal); or (2) distribute to the participants of such employer amounts attributable to such participants' investments under the Plan (in the event of termination). 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accompanying financial statements are prepared under the accrual method of accounting. Purchase and sales of securities are recorded on the trade date basis. Dividend income is recorded on the ex-dividend date. Income from other securities is recorded when earned. Investments are stated at market value, which is generally based on quoted prices. A portion of the Fixed Income Fund is reported on a contract value (which represents contributions made under the contract plus earnings, less withdrawals and administrative expenses) because it is fully benefit responsive. Participant loan receivables are presented at cost which approximates fair value. The cost of securities sold or distributed is determined on the basis of average cost. The MCN Stock Fund recognizes gains or losses on stock distributed to terminated participants in settlement of their accounts equal to the difference between cost and market value of the shares distributed. Benefits are recorded when paid. 3. TAX STATUS The Internal Revenue Service has determined and informed MichCon by a letter dated November 20, 1997 that the Plan is qualified and related trust is tax exempt and both are designed in accordance with applicable sections of the Internal Revenue Code (IRC). The Plan administrator and the Plan's tax counsel believe that the Plan is designed and is currently being operated in compliance with the applicable requirements of the IRC. 4. DEFINED CONTRIBUTION PLANS MASTER TRUST The Master Trust was established on August 1, 1988 and serves as a funding medium to certain employee benefit plans for the Company and its subsidiaries and affiliates which are qualified under Section 401(a) of the Internal Revenue Code of 1986 as amended from time to time. Currently, the Master Trust consists of certain commingled assets of the Plan and the MCN Energy Group Savings and Stock Ownership Plan. The Plan's investment in the Master Trust in the Statement of Assets Available for Benefits represents the Plan's allocated portion (approximately 20%) of the Master Trust investments. The Plan's allocated portion of the investments is equal to the market value of the Plan's assets contributed, adjusted by the Plan's allocated share of the Master Trust investment income and expenses, employee and employer contributions and distributions and withdrawals paid to participants. A summary of the Master Trust assets as of December 31, 1997 and 1996 is as follows: 7 12 MICHCON INVESTMENT AND STOCK OWNERSHIP PLAN NOTES TO FINANCIAL STATEMENTS
1997 1996 ------------------- ------------------ INVESTMENTS, Temporary investments, at market . . . . . . . . . . . . . . $ 3,805,014 $ 7,050,421 Insurance contracts, including accumulated interest, at contract value . . . . . . . . . 51,041,890 51,150,305 ------------ ------------ TOTAL INVESTMENTS . . . . . . . . . . . . . . . . . . . . . . . . . 54,846,904 58,200,726 ------------ ------------ ASSETS HELD IN MASTER TRUST . . . . . . . . . . . . . . . . . . . . $ 54,846,904 $ 58,200,726 ============ ============
The following is a summary of the net change in assets held in the Master Trust for the year ended December 31, 1997:
1997 -------------------- Transfers into Master Trust . . . . . . . . . . . . . . . . . . . . . . . . $ 44,174,098 Interest, dividend and other income on investments . . . . . . . . . . . . . 3,438,588 Transfers out of Master Trust . . . . . . . . . . . . . . . . . . . . . . . (50,966,508) ------------ NET CHANGE IN ASSETS HELD . . . . . . . . . . . . . . . . . . . . . . . . . (3,353,822) NET ASSETS, BEGINNING OF YEAR . . . . . . . . . . . . . . . . . . . . . . . 58,200,726 ------------ NET ASSETS, END OF YEAR . . . . . . . . . . . . . . . . . . . . . . . . . . $ 54,846,904 ============
5. RELATED PARTY TRANSACTIONS Certain plan investments are shares of mutual funds managed by Putnam Investments. Putnam Investments is the trustee as defined by the Plan; therefore, these transactions qualify as party-in-interest. 6. SUBSEQUENT EVENT The MCN Energy Group stock price as of December 31, 1997 of $40.38 declined to $25.31 At the close of business on June 25, 1998. In the first quarter of 1998, MichCon implemented an early retirement program. The program had no material impact on the plan. In the third quarter of 1998, the early retirement program will be complete and it is expected to have no material impact on the plan. 8 13 MICHCON INVESTMENT AND STOCK OWNERSHIP PLAN ITEM 27a -- SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AS OF DECEMBER 31, 1997
(c) (b) Description of investments including (e) Identity of issue, borrower, maturity date, rate of interest, collateral, (d) Current (a) lessor or similar party par or maturity value Cost Value - ----- -------------------------------- -------------------------------------------------- ---------------------- --------------- * MCN Stock Fund MCN Energy Group Inc. Common Stock $ 30,323,279 $ 71,860,057 * Putnam Global Growth Fund Registered Investment Company 5,755,854 6,009,703 * Putnam Fund for Growth and Income Registered Investment Company 8,529,774 10,612,566 * Fixed Income Fund Investment in Master Trust Pacific Mutual 4,855,934 4,855,934 AIG Life #GIC-18190 211,478 211,478 AIG Life #GIC-877 538,776 538,776 Hartford Life #009702 741,640 741,640 Hartford Life #GA-9950 165,311 165,311 MET Life 548,221 548,221 The Boston Company #6420-002 739,176 739,176 New York Life GA #20051 728,601 728,601 New York Life GA #30783 780,719 780,719 John Hancock Mutual #8407 GAC 444,369 444,369 John Hancock Mutual #8868 GAC 900,533 900,533 * Putnam Voyager Fund Registered Investment Company 8,251,198 11,909,165 * Putnam Income Fund Registered Investment Companies 318,621 323,184 * Putnam New Opportunities Fund Registered Investment Companies 2,442,964 3,121,353 * Loan Fund Loans to Paritcipants (Interest rates 9% to 12%) 5,427,873 5,427,873 ------------ ------------- $ 71,704,321 $ 119,918,659 ============ ============= * Represents Party-in-Interest
9 14 MICHCON INVESTMENT AND STOCK OWNERSHIP PLAN ITEM 27d -- SCHEDULE OF REPORTABLE TRANSACTIONS FOR THE YEAR ENDED DECEMBER 31, 1997
(b) Description of asset (f) (a) (include interest (c) (d) (e) Expense Identity of party rate and maturity Purchase Selling Lease incurred with involved in case of a loan) Price Price rental transaction - ------------------------------ -------------------------------- -------------- ------------ ----------- ---------------- Putnam Investments MCN Stock Fund $ 7,440,038 n/a Putnam Investments MCN Stock Fund n/a $ 10,776,069 Putnam Investments Fixed Income Fund $ 2,510,575 n/a Putnam Investments Fixed Income Fund n/a $ 3,762,346 Putnam Investments Growth & Income Fund $ 3,036,798 n/a Putnam Investments Growth & Income Fund n/a $ 2,143,400 Putnam Investments Loan Fund $ 2,879,799 n/a Putnam Investments Loan Fund n/a $ 2,278,922
(h) Current value (a) (g) of asset on (i) Identity of party Cost of transaction Net gain involved asset date or (loss) - --------------------------- ---------- --------------- ------------- Putnam Investments n/a $ 7,440,038 n/a Putnam Investments $ 5,409,801 $ 10,776,069 $ 5,366,268 Putnam Investments n/a $ 2,510,575 n/a Putnam Investments $ 3,799,286 $ 3,762,346 $ (36,940) Putnam Investments n/a $ 3,036,798 n/a Putnam Investments $ 1,602,061 $ 2,143,400 $ 541,339 Putnam Investments n/a $ 2,879,799 n/a Putnam Investments $ 2,278,922 $ 2,278,922 $ -
10 15 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Trustee (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized. MichCon Investment and Stock Ownership Plan By: /s/ Howard L. Dow III --------------------------------------------------- Howard L. Dow III Senior Vice President and Chief Financial Officer Michigan Consolidated Gas Company Dated: June 29, 1998 16 EXHIBIT INDEX Number ------ ------------------------------------------------------ 23 Independent Auditors' Consent - Deloitte & Touche LLP EX-23 2 EXHIBIT 23 1 EXHIBIT 23 INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in Registration Statement No. 333-02107 of MCN Energy Group Inc. on Form S-8 of our report dated June 25, 1998, appearing in this Annual Report on Form 11-K of the MichCon Investment and Stock Ownership Plan for the year ended December 31, 1997. DELOITTE & TOUCHE LLP Detroit, Michigan June 29, 1998 -----END PRIVACY-ENHANCED MESSAGE-----