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EXHIBIT 12-4
MCN INVESTMENT CORPORATION AND SUBSIDIARIES
COMPUTATION OF INTEREST COVERAGE RATIO
(DOLLARS IN THOUSANDS)
The following table sets forth the interest coverage ratio for MCN Investment on
a historical basis for the periods indicated. This ratio differs from the SEC
prescribed "Ratio of Earnings to Fixed Charges" in its treatment of certain
hybrid securities of MCN and MCN Investment.
Twelve Months Twelve Months Twelve Months Twelve Months Twelve Months
Ended Ended Ended Ended Ended
December 31, December 31, December 31, December 31, December 31,
1997 1996 1995 1994 1993
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EARNINGS AS ADJUSTED:
Pre-tax Income (1) $ 64,738 $ 24,208 $ 12,454 $ 8,713 $ 6,934
Interest capitalized (15,002) (9,398) (6,249) (1,989) (1,969)
Preferred dividend adjustment (2) 39,956 17,989 9,375 1,537 -
Interest rate charges 40,476 32,696 21,582 14,049 6,433
-------- --------- -------- ------- -------
$130,168 $ 65,495 $ 37,162 $22,310 $11,398
======== ========= ======== ======= -------
INTEREST RATE CHARGES:
Interest expensed $ 64,434 $ 40,523 $ 24,151 $13,365 $ 4,464
Interest capitalized 15,002 9,398 6,249 1,989 1,969
Interest implicit in rentals 996 764 557 232 -
Preferred dividends adjustment (2) (39,956) (17,989) (9,375) (1,537) -
-------- --------- -------- ------- -------
$ 40,476 $ 32,696 $ 21,582 $14,049 $ 6,433
======== ========= ======== ======= =======
Interest Coverage Ratio 3.22 2.00 1.72 1.59 1.77
==== ==== ==== ==== ====
(1) Income from continuing operations before income taxes
(2) Preferred dividends expense of MCN allocated to MCN Investment which
includes (a) dividends on the $100,000,000 of 9 3/8% redeemable preferred
securities of MCN Michigan Limited Partnership, (b) dividends on the
$132,250,000 of 8% FELINE PRIDES of MCN Financing III, (c) interest on the
$130,000,000 of 6.82% Series Medium-Term Notes issued in conjunction with the
$135,000,000 of 8% Preferred Redeemable Increased Dividend Equity
Securities of MCN, and (d) dividends on the $80,000,000 of 8 5/8% Trust
Originated Preferred Securities of MCN Financing I.