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MCN ENERGY GROUP INC. AND SUBSIDIARIES EXHIBIT 12-1
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(Dollars in Thousands)
TWELVE MONTHS TWELVE MONTHS TWELVE MONTHS
ENDED ENDED ENDED
DECEMBER 31, 1997 DECEMBER 31, 1996 DECEMBER 31, 1995
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EARNINGS AS DEFINED(1)(5)
Pre-tax income(2) $ 181,299 $ 146,607 $ 128,997
Fixed charges(3) 125,338 99,944 72,895
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Earnings as defined $ 306,637 $ 246,551 $ 201,892
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FIXED CHARGES AS DEFINED(1)(4)(5)
Interest, expensed $ 86,453 $ 77,781 $ 57,675
Interest, capitalized 18,190 13,235 7,926
Amortization of debt discounts, premium
and expense 2,426 2,217 1,641
Interest implicit in rentals 2,181 2,339 2,325
Preferred securities dividend requirements
of subsidiaries 31,090 12,390 9,699
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Fixed charges as defined $ 140,340 $ 107,962 $ 79,266
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Ratio of Earnings to Fixed Charges 2.18 2.28 2.55
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(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 from
continuing operations 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, increased to reflect the pre-tax earnings
requirement for MichCon.
(5) In June 1996, MCN completed the sale of The Genix Group, its computer
operations subsidiary. For purposes of calculating the Ratio of Earnings
to Fixed Charges, it has been classified as a discontinued operation and
therefore excluded from the ratio for all periods presented.