-----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, VBKnMwrVDCYpgAAi9EfGxim0H5k4SSrsjpuwfpTAVsi7UOMliblsCSdf2EgGkQGn Ov4uEK+rtgpx+/YA9YpunQ== 0000950131-96-002089.txt : 19960513 0000950131-96-002089.hdr.sgml : 19960513 ACCESSION NUMBER: 0000950131-96-002089 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960510 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: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-07310 FILM NUMBER: 96559265 BUSINESS ADDRESS: STREET 1: 500 GRISWOLD ST CITY: DETROIT STATE: MI ZIP: 48226 BUSINESS PHONE: 3139652430 10-Q 1 FORM 10-Q =============================================================================== SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------------------- FORM 10-Q (MARK ONE) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1996, or [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ____________ TO ____________ COMMISSION FILE NUMBER 1-7310 MICHIGAN CONSOLIDATED GAS COMPANY (Exact name of registrant as specified in its charter) MICHIGAN 38-0478040 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 500 GRISWOLD STREET, DETROIT, MICHIGAN 48226 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code 313-965-2430 NO CHANGES (Former name, former address and former fiscal year, if changed since last report.) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No _____ ----- Number of shares outstanding of each of the registrant's classes of common stock, as of April 30, 1996: Common Stock, par value $.01 per share: 10,300,000 ================================================================================ INDEX TO FORM 10-Q FOR QUARTER ENDED MARCH 31, 1996 PAGE NUMBER ------ COVER............................................................... i INDEX............................................................... ii PART I - FINANCIAL INFORMATION Item 1. Financial Statements.................................... 5 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.. ................ 1 PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K........................ 10 SIGNATURE........................................................... 11 ii MICHIGAN CONSOLIDATED GAS COMPANY AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS RESULTS OF OPERATIONS Earnings for the first quarter of 1996 were $70 million, an increase of $14.5 million from the first quarter of 1995. For the twelve-month period ended March 31, 1996, earnings were $86 million, an increase of $35.9 million from the comparable 1995 period. The increase in earnings for both 1996 periods reflects higher gas sales resulting from colder weather and increased transportation deliveries. Lower operating costs also contributed to the 1996 increases, reflecting corporate initiatives to reduce costs.
EFFECT OF WEATHER ON GAS MARKETS AND EARNINGS --------------------------------------------- Quarter Twelve Months -------------------- -------------------- 1996 1995 1996 1995 --------- --------- --------- --------- Percentage Colder (Warmer) than Normal 5.7% (5.8)% 6.0% (11.0)% Increase (Decrease) from Normal in: Gas Markets (Bcf) 5.4 (5.2) 12.2 (17.4) Net Income (Millions) $ 4.9 $ (4.7) $ 11.1 $ (15.8)
EARNINGS COMPONENTS (IN MILLIONS) COMPARING 1996 TO 1995 Quarter Twelve Months ------------------- ------------------- $ Change % Change $ Change % Change -------- -------- -------- -------- Operating Revenues $109.6 26.0% $191.3 19.1% Cost of Gas 88.6 42.2 133.1 30.3 Gross Margin 21.0 9.9 58.2 10.4 Operation and Maintenance (8.6) (11.1) (18.4) (6.1) Depreciation and Depletion 2.2 10.1 6.2 7.3 Property and Other Taxes 2.1 12.8 3.2 5.7 Other Income and Deductions 1.6 14.9 5.3 13.1 Income Tax Provision 9.2 31.3 26.2 109.5
GROSS MARGIN Gross margin (operating revenues less cost of gas) increased for the 1996 quarter and twelve-month period reflecting increased gas sales resulting from colder weather and increased transportation deliveries.
Gas Markets Quarter 12 Months ------------ ------------ GAS MARKETS (Bcf) 1996 1995 1996 1995 ----- ----- ----- ----- Gas Sales.................... 102.2 89.3 219.8 186.2 End User Transportation...... 47.4 43.5 149.2 138.4 Intermediate Transportation.. 148.0 105.9 383.7 301.8 ----- ----- ----- ----- 297.6 238.7 752.7 626.4 ===== ===== ===== =====
Gas sales increased in both the 1996 quarter and twelve-month period as compared to the 1995 periods due mainly to colder weather as well as 1 MICHIGAN CONSOLIDATED GAS COMPANY AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS - (CONTINUED) market expansion through the addition of over 5,000 new customers during the 1996 quarter and over 17,000 since March of 1995. End user transportation deliveries for the 1996 quarter and twelve-month period increased from the 1995 period due to colder weather as well as higher levels of gas usage by large- volume commercial and industrial customers, including gas cogeneration facilities. Deliveries to the Michigan Power project, a 123 megawatt cogeneration plant in which MCN has a 50% interest, represented three Bcf and five Bcf of the increase during the 1996 quarter and twelve month period, respectively. MichCon provides end user transportation deliveries of natural gas to fuel the plant, which became operational in October 1995. The increases in intermediate transportation in the 1996 quarter and twelve-month period are primarily the result of increased transportation of Antrim gas for Michigan gas producers and brokers. MichCon recently expanded the transportation capacity of its northern Michigan gathering system. A significant portion of the project was completed in 1995, and the remainder is expected to be completed by mid-1996. This expansion enabled MichCon to transport an additional 20.3 Bcf and 36.5 Bcf in the 1996 quarter and twelve-month period, respectively. In January 1996, MCN transferred its Michigan pipeline operations to MichCon in order to consolidate MCN's Michigan gathering pipeline activities within one business unit. This pipeline operation contributed 3.2 Bcf to the increase in volumes transported during the 1996 periods. Profit margins on intermediate transportation services are considerably less than margins on gas sales or for end user transportation markets. Cost of Gas Cost of gas is affected by variations in sales volumes and cost of gas rates. Through the Gas Cost Recovery (GCR) mechanism, MichCon's rates are set to recover 100% of prudently and reasonably incurred gas costs. Therefore, significant fluctuations in total gas costs have little or no effect on gross margins or earnings. Cost of gas sold increased in the 1996 quarter and twelve-month period due to higher sales volumes resulting primarily from the colder weather, as well as the higher prices paid for natural gas in the spot market. The increase in market prices paid for gas resulted in an increase in the cost of gas sold per thousand cubic feet of $.51 (21.5%) and $.28 (11.7%) in the 1996 quarter and twelve-month period, respectively from the comparable 1995 periods. OPERATION AND MAINTENANCE Operation and maintenance expenses were lower in the 1996 quarter due to a reduction in labor costs and lower employee benefit costs, primarily pension and retiree health care costs. Operation and maintenance expenses decreased for the 1996 twelve-month period primarily due to lower benefit costs. Management's continuing efforts to reduce operating costs also contributed to the decreases. 2 MICHIGAN CONSOLIDATED GAS COMPANY AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS - (CONTINUED) DEPRECIATION AND DEPLETION The increases in depreciation and depletion for the 1996 quarter and twelve-month period were due to higher plant balances, reflecting capital expenditures of $381.2 million over the past two calendar years. PROPERTY AND OTHER TAXES Property and other taxes for the 1996 quarter and twelve-month period reflect an increase in property taxes due to higher property balances, and higher Michigan single business taxes due primarily to increased earnings. OTHER INCOME AND DEDUCTIONS The increase in other income and deductions for the 1996 quarter and twelve-month period reflects additional interest expense relating to an increase in the average amount of long-term debt outstanding. INCOME TAX PROVISION Income taxes increased for the 1996 quarter and twelve-month period due primarily to increased earnings. CAPITAL RESOURCES AND LIQUIDITY OPERATING ACTIVITIES MichCon's cash flow from operating activities totaled $94.3 million for the first quarter of 1996, decreasing $38.2 million from the comparable 1995 quarter. The decrease was due primarily to higher working capital requirements offset by higher net income and deferred taxes. FINANCING ACTIVITIES Cash and cash equivalents increased by $1.1 million during the first quarter of 1996. Cash and cash equivalents normally increase and short-term debt is reduced in the first part of each year as gas inventories are depleted and funds are received from winter heating sales. During the first quarter of 1996, MichCon repaid $51.7 million of short-term debt, including commercial paper. During the latter part of the year, cash and cash equivalents normally decrease as funds are used to finance increases in gas inventories and customer accounts receivable. To meet its seasonal short-term borrowing needs, MichCon normally issues commercial paper which is backed by credit lines with several banks. MichCon has established credit lines to allow for borrowings of up to $100 million under a 364-day revolving credit facility and up to $150 million under a three-year revolving credit facility. Commercial paper of $118 million was outstanding as of March 31, 1996 under these lines. 3 MICHIGAN CONSOLIDATED GAS COMPANY AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS - (CONCLUDED) During 1995, MichCon renewed its Trust Demand Note program which allows MichCon to borrow up to $25 million through April 1996. As of March 31, 1996, borrowings of $25 million were outstanding under this program, and the note was repaid in April 1996. MichCon's capital requirements for 1996 are anticipated to be approximately $220 million. These investments will be made to add new customers, develop new gas transportation markets and make improvements to existing storage and transmission systems. These capital requirements and general financial market conditions will affect the timing and amount of future debt issuances. INVESTING ACTIVITIES MichCon's capital expenditures during the first quarter of 1996 totaled $29.6 million primarily consisting of the construction of pipelines to transport gas and the construction of new distribution lines to reach communities not previously served by MichCon. This amount represents an increase of $1.4 million from the first quarter of 1995. In January 1996, MichCon began construction of a 59-mile loop of its existing Milford to Belle River Pipeline. The pipeline is anticipated to be completed in early 1997 at a cost of approximately $80 million. The pipeline will improve the overall reliability and efficiency of MichCon's gas storage and transmission system by serving as a back-up means of transportation in the event of disruption in the operation of the existing pipeline or other facilities used to supply gas to MichCon's system. It is management's opinion that MichCon will have sufficient capital resources, both internal and external, to meet anticipated capital requirements. 4 MICHIGAN CONSOLIDATED GAS COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENT OF FINANCIAL POSITION (Unaudited) (Thousands of Dollars)
March 31, December 31, --------------------------------- ------------- 1996 1995 1995 ---------- ---------- ------------- ASSETS Current Assets Cash and cash equivalents, at cost (which approximates market value) $ 9,554 $ 6,933 $ 8,469 Accounts receivable, less allowance for doubtful accounts of $17,064, $20,816, and $13,250, respectively....................... 263,670 193,942 175,103 Accrued unbilled revenues........................................... 72,382 59,532 91,134 Gas in inventory (Note 1)........................................... 13,665 28,911 40,191 Property taxes assessed applicable to future periods................ 47,062 41,850 56,949 Accrued gas cost recovery revenues.................................. 35,362 - - Other............................................................... 36,601 24,514 32,498 ---------- ---------- ---------- 478,296 355,682 404,344 ---------- ---------- ---------- Deferred Charges and Other Assets Investment in and advances to joint ventures........................ 20,043 20,535 20,318 Deferred postretirement benefit costs............................... 11,582 19,095 12,372 Deferred environmental costs (Note 3a).............................. 28,016 - 32,000 Prepaid benefit costs............................................... 48,896 11,224 25,438 Other............................................................... 47,934 39,833 42,061 ---------- ---------- ---------- 156,471 90,687 132,189 ---------- ---------- ---------- Property, Plant and Equipment, at cost................................ 2,500,764 2,214,163 2,413,120 Less - Accumulated depreciation and depletion....................... 1,177,584 1,092,497 1,151,160 ---------- ---------- ---------- 1,323,180 1,121,666 1,261,960 ---------- ---------- ---------- $1,957,947 $1,568,035 $1,798,493 ========== ========== ========== LIABILITIES AND SHAREHOLDER'S EQUITY Current Liabilities Accounts payable.................................................... $ 117,060 $ 69,487 $ 108,208 Notes payable ...................................................... 144,919 79,681 196,635 Current portion of long-term debt, capital lease obligations and redeemable cumulative preferred stock......................... 3,143 3,873 3,969 Gas inventory equalization (Note 1)................................. 82,393 67,806 - Federal income, property and other taxes payable.................... 82,048 84,533 85,195 Customer deposits................................................... 10,818 10,467 11,531 Deferred income taxes - current..................................... 17,353 - 8,379 Other............................................................... 58,012 59,132 56,208 ---------- ---------- ---------- 515,746 374,979 470,125 ---------- ---------- ---------- Deferred Credits and Other Liabilities Accumulated deferred income taxes................................... 81,830 61,308 61,146 Unamortized investment tax credit................................... 35,975 37,830 36,437 Tax benefits amortizable to customers............................... 113,968 113,179 114,487 Accrued postretirement benefit costs................................ - 6,596 12,661 Accrued environmental costs (Note 3a)............................... 32,000 - 32,000 Minority interest (Note 2).......................................... 17,805 - - Other............................................................... 56,438 59,416 65,252 ---------- ---------- ---------- 338,016 278,329 321,983 ---------- ---------- ---------- Long-Term Debt, including capital lease obligations................... 532,720 447,858 516,564 ---------- ---------- ---------- Commitments and Contingencies (Note 3) Common Shareholder's Equity Common stock........................................................ 10,300 10,300 10,300 Additional paid-in capital (Note 2)................................. 230,399 204,777 211,777 Retained earnings................................................... 330,766 251,792 267,744 ---------- ---------- ---------- 571,465 466,869 489,821 ---------- ---------- ---------- $1,957,947 $1,568,035 $1,798,493 ========== ========== ===========
The notes to the consolidated financial statements are an integral part of this statement. 5 MICHIGAN CONSOLIDATED GAS COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENT OF INCOME (Unaudited) (Thousands of Dollars)
Three Months Ended Twelve Months Ended March 31, March 31, ------------------------ -------------------------- 1996 1995 1996 1995 -------- -------- -------- -------- Operating Revenues.......................... $531,392 $421,812 $1,190,393 $999,134 -------- -------- ---------- -------- Operating Expenses Cost of gas............................... 298,716 210,137 572,541 439,440 Operation and maintenance................. 68,771 77,329 285,866 304,294 Depreciation and depletion................ 24,393 22,151 91,370 85,191 Property and other taxes.................. 18,608 16,502 59,118 55,951 -------- -------- ---------- -------- Total operating expenses................ 410,488 326,119 1,008,895 884,876 -------- -------- ---------- -------- Operating Income............................ 120,904 95,693 181,498 114,258 -------- -------- ---------- -------- Equity in Earnings of Joint Ventures........ 235 224 750 831 -------- -------- ---------- -------- Other Income and (Deductions) Interest income........................... 585 938 3,630 3,610 Interest on long-term debt................ (9,768) (8,253) (37,335) (29,660) Other interest expense.................... (2,835) (2,972) (6,916) (9,826) Minority interest......................... (348) - (348) - Other..................................... (296) (738) (4,967) (4,750) -------- -------- ---------- -------- Total other income and (deductions)..... (12,662) (11,025) (45,936) (40,626) -------- -------- ---------- -------- Income Before Income Taxes.................. 108,477 84,892 136,312 74,463 Income Tax Provision........................ 38,437 29,282 50,159 23,947 -------- -------- ---------- -------- Net Income.................................. 70,040 55,610 86,153 50,516 Dividends on Preferred Stock................ 18 74 179 419 -------- -------- ---------- -------- Net Income Available for Common Stock....... $ 70,022 $ 55,536 $ 85,974 $ 50,097 ======== ======== ========== ========
CONSOLIDATED STATEMENT OF RETAINED EARNINGS (Unaudited) (Thousands of Dollars)
Three Months Ended Twelve Months Ended March 31, March 31, ------------------------ ------------------------ 1996 1995 1996 1995 -------- -------- -------- -------- Balance - Beginning of Period............... $267,744 $202,756 $251,792 $208,195 Add - Net income.......................... 70,040 55,610 86,153 50,516 -------- -------- -------- -------- 337,784 258,366 337,945 258,711 Deduct - Cash dividends declared: Preferred stock......................... 18 74 179 419 Common stock............................ 7,000 6,500 7,000 6,500 -------- -------- -------- -------- Balance - End of Period..................... $330,766 $251,792 $330,766 $251,792 ======== ======== ======== ======== The notes to the consolidated financial statements are an integral part of these statements.
6
MICHIGAN CONSOLIDATED GAS COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited) (Thousands of Dollars) Three Months Ended March 31, --------------------- 1996 1995 -------- -------- Cash Flow from Operating Activities Net income.................................................................... $ 70,040 $ 55,610 Adjustments to reconcile net income to net cash flow provided from operating activities: Depreciation and depletion Per statement of income................................................... 24,393 22,151 Charged to other accounts................................................. 1,865 1,853 Deferred income taxes - current............................................. 8,974 (1,409) Deferred income taxes and investment tax credit - net....................... 11,348 6,252 Other....................................................................... (629) 313 Changes in assets and liabilities, exclusive of changes shown separately.... (21,695) 47,760 -------- -------- Net cash provided from operating activities............................... 94,296 132,530 -------- -------- Cash Flow from Financing Activities Notes payable - net........................................................... (51,716) (88,776) Additional paid-in-capital (Note 2)........................................... 1,614 - Cash dividend paid: Common stock................................................................ (7,000) (6,500) Preferred stock............................................................. (54) (115) Retirement of long-term debt and preferred stock.............................. (3,974) (3,471) -------- -------- Net cash used for financing activities.................................... (61,130) (98,862) -------- -------- Cash Flow from Investing Activities Capital expenditures.......................................................... (29,616) (28,209) Other - net................................................................... (2,465) 169 -------- -------- Net cash used for investing activities.................................... (32,081) (28,040) -------- -------- Net Increase in Cash and Cash Equivalents....................................... 1,085 5,628 Cash and Cash Equivalents, January 1............................................ 8,469 1,305 -------- -------- Cash and Cash Equivalents, March 31............................................. $ 9,554 $ 6,933 ======== ======== Changes in Assets and Liabilities, Exclusive of Changes Shown Separately Accounts receivable - net..................................................... $(82,006) $(59,057) Gas inventory equalization.................................................... 82,393 67,806 Accrued/deferred gas cost recovery revenues................................... (35,940) 14,905 Accrued unbilled revenues..................................................... 18,752 22,701 Gas in inventory.............................................................. 26,526 48,932 Property taxes assessed applicable to future periods.......................... 11,097 10,313 Accounts payable.............................................................. 7,846 (11,184) Federal income, property and other taxes payable.............................. (5,164) (1,273) Other current assets and liabilities.......................................... (2,471) (26,591) Deferred assets and liabilities............................................... (42,728) (18,792) -------- -------- $(21,695) $ 47,760 ======== ======== Supplemental Disclosures Cash paid for: Interest, net of amounts capitalized........................................ $ 7,004 $ 4,938 ======== ======== Federal income taxes........................................................ $ 3,724 $ 171 ======== ======== Noncash financing activities: Transfer of pipeline net assets to MichCon (Note 2) ........................ $ 17,008 - ======== ========
The notes to the consolidated financial statements are an integral part of this statement. 7 MICHIGAN CONSOLIDATED GAS COMPANY AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 1. GAS IN INVENTORY Inventory gas is priced on a last-in, first-out (LIFO) basis. In anticipation that interim inventory reductions will be replaced prior to year end, the cost of gas for net withdrawals from inventory is recorded at the estimated average purchase rate for the calendar year. The excess of these charges over the LIFO cost is credited to the gas inventory equalization account. During interim periods when there are net injections to inventory, the equalization account is reversed. Approximately 22.3 Bcf and 29.4 Bcf of gas was included in inventory at March 31, 1996 and 1995, respectively. 2. TRANSFER OF SUBSIDIARIES In January 1996, MCN Corporation (MCN), parent company of MichCon, transferred its Michigan pipeline operations, at book value, to MichCon in order to consolidate MCN's Michigan gathering pipeline activities within one business unit. Net assets transferred to MichCon totaled approximately $18,600,000, including cash of $1,614,000 and long-term debt of $17,600,000. Contributions from these pipeline operations to MichCon's consolidated net income for the three-months ended March 31, 1996 were approximately $378,000. 3. COMMITMENTS AND CONTINGENCIES A. ENVIRONMENTAL MATTERS As described in MichCon's 1995 Annual Report on Form 10-K, MichCon accrued an additional environmental remediation liability and corresponding regulatory asset of $32,000,000 in the fourth quarter of 1995. MichCon has notified current and former insurance carriers of the environmental conditions and is pursing claims against these carriers. In the first quarter of 1996, MichCon received its first settlement from insurance carriers and expects additional insurance recoveries over the next several years. On March 31, 1996, the reserve balance is approximately $35,400,000, of which $3,400,000 is classified as current. B. OTHER MichCon is involved in certain legal and administrative proceedings before various courts and governmental agencies concerning claims arising in the ordinary course of business. Management cannot predict the final disposition of such proceedings, but believes that adequate provision has been made for probable losses. It is management's belief, after discussion with legal counsel, that the ultimate resolution of those proceedings still pending will not have a material adverse effect on MichCon's financial statements. 4. ACCOUNTING PRONOUNCEMENT The Financial Accounting Standards Board issued Statement of Financial Accounting Standard No. 123, "Accounting for Stock-Based Compensation" in October 1995. The statement requires certain disclosures about stock-based employee compensation in the financial statements and encourages, but does not require, a fair-value-based method of accounting for such compensation. MichCon currently awards 8 MICHIGAN CONSOLIDATED GAS COMPANY AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONCLUDED) performance units to selected employees under its long term incentive plan. Each performance unit is equivalent to a share of MCN common stock. MCN is currently evaluating whether to adopt the fair-value-based method of accounting and its impacts. 5. GENERAL There have been no changes in MichCon's principal accounting policies from those set forth in MichCon's 1995 Annual Report on Form 10-K. Certain reclassifications have been made to the prior year's financial statements to conform with the 1996 presentation. The unaudited information furnished herein, in the opinion of management, reflects all adjustments (consisting of only recurring adjustments or accruals) necessary for a fair presentation of the results of operations during the periods. Because of seasonal and other factors, revenues, expenses and net income for the interim periods should not be construed as representative of revenues, expenses and net income for all or any part of the balance of the current year or succeeding periods. 9 OTHER INFORMATION EXHIBITS (a) Exhibits Exhibit Number Description ------ ----------- 12-1 Computation of Ratio of Earnings to Fixed Charges 27-1 Financial Data Schedule. 10 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. MICHIGAN CONSOLIDATED GAS COMPANY Date: May 10, 1996 By: /s/ David R. Nowakowski --------------------------- David R. Nowakowski Controller, Treasurer and Chief Accounting Officer 11 EX-12.1 2 COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES EXHIBIT 12-1 MICHIGAN CONSOLIDATED GAS COMPANY AND SUBSIDIARIES COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES (THOUSANDS OF DOLLARS)
Twelve Months Ended Twelve Months Ended Twelve Months Ended ------------------- ------------------- ------------------- March 31, 1996 December 31, 1995 December 31, 1994 ------------------- ------------------- ------------------- EARNINGS AS DEFINED (1) Net Income............................... $ 86,153 $ 71,723 $ 59,868 Federal and other income taxes........... 50,159 41,004 29,839 Fixed charges............................ 47,420 45,637 39,663 -------- -------- -------- Earnings as defined.................... $183,732 $158,364 $129,370 ======== ======== ======== FIXED CHARGES AS DEFINED (1) Interest on long-term debt............... $ 37,335 $ 35,820 $ 27,948 Interest on other borrowed funds......... 6,916 7,053 9,093 Amortization of debt discounts, premium and expense............................ 1,074 996 950 Interest implicit in rentals (2)......... 2,095 1,768 1,672 -------- -------- -------- Fixed charges as defined............... $ 47,420 $ 45,637 $ 39,663 ======== ======== ======== Ratio of Earnings to Fixed Charges....... 3.88 3.47 3.26 ======== ======== ========
Notes: - ----- (1) Earnings and fixed charges are defined and computed in accordance with Item 503 of Regulation S-K. (2) This amount is estimated to be a reasonable approximation of the interest portion of rentals. MichCon is a guarantor of certain other debt. Fixed charges related to such debt are deemed to be immaterial and therefore have been excluded from the above ratios. EX-27 3 FINANCIAL DATA SCHEDULE
5 This schedule contains summary financial information extracted from the Consolidated Statement of Income and the Consolidated Statement of Financial Position and is qualified in its entirety by reference to such financial statements. 1,000 3-MOS DEC-31-1996 JAN-01-1996 MAR-31-1996 9,554 0 280,734 17,064 13,665 478,296 2,500,764 1,177,584 1,957,947 515,746 532,720 10,300 0 0 561,165 1,957,947 531,392 531,392 298,716 410,488 644 7,314 12,603 108,477 38,437 70,040 0 0 0 70,022 0 0
-----END PRIVACY-ENHANCED MESSAGE-----