1 EXHIBIT 12-2 MCN CORPORATION AND SUBSIDIARIES COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES (Dollars in Thousands) Twelve Months Twelve Months Ended December 31, Ended ----------------------------------------------------------------- June 30, 1995 1994 1993 1992 1991 1990 -------------- --------- --------- --------- --------- --------- EARNINGS AS DEFINED (1) Pre-tax income (2) $ 90,445 $105,887 $106,987 $ 85,984 $ 54,225 $50,543 Fixed charges (3) 72,293 60,910 48,955 48,414 49,076 44,777 -------- -------- -------- -------- -------- ------- Earnings as defined $162,738 $166,797 $155,942 $134,398 $103,301 $95,320 FIXED CHARGES AS DEFINED (1) (4) Interest, expensed $ 54,525 $ 48,948 $ 38,728 $ 38,874 $ 39,686 $36,385 Interest, capitalized 5,217 2,928 3,966 1,650 737 1,211 Amortization of debt discounts, premium and expense 1,465 1,332 1,153 830 629 618 Interest implicit in rentals 8,568 7,773 6,350 6,298 6,804 5,732 Preferred securities dividend requirements of subsidiaries 6,699 2,203 1,086 1,468 1,884 2,277 -------- -------- -------- -------- -------- ------- Fixed charges as defined $ 76,474 $ 63,184 $ 51,283 $ 49,120 $ 49,740 $46,223 Ratio of Earnings to Fixed Charges 2.13 2.64 3.04 2.74 2.08 2.06 ======== ======== ======== ======== ======== ======= Notes: (1) Earnings and fixed charges are defined and computed in accordance with Item 503 of Regulation S-K. (2) This amount represents the aggregate of (a) the pre-tax income of MCN and its majority-owned subsidiaries, (b) MCN's share of pre-tax income of its 50% owned companies, and (c) any income actually received from less than 50% owned companies. (3) Fixed charges added to earnings are adjusted to exclude interest capitalized during the period for nonutility companies and the preferred securities dividend requirements of MichCon included in fixed charges but not deducted in the determination of pre-tax income. (4) Fixed charges represent (a) interest, whether expensed or capitalized, (b) amortization of debt discount, premium and expense, (c) an estimate of interest implicit in rentals, and (d) preferred securities dividend requirements of subsidiaries (MichCon and MCN Michigan Limited Partnership), increased to reflect the pre-tax earnings requirement for MichCon.