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MCN INVESTMENT CORPORATION AND SUBSIDIARIES EXHIBIT 12-2
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(DOLLARS IN THOUSANDS)
TWELVE MONTHS TWELVE MONTHS TWELVE MONTHS
ENDED ENDED ENDED
MARCH 31, 1999 DECEMBER 31, 1998 DECEMBER 31, 1997
(RESTATED) * (RESTATED) *
-------------- ----------------- -----------------
EARNINGS AS DEFINED (1) (5)
Pre-tax income (2) (4) $(187,787) $(170,668) $ 16,034
Fixed charges (3) 43,689 41,340 27,571
--------- --------- ---------
Earnings as defined $(144,098) $(129,328) $ 43,605
========= ========= =========
FIXED CHARGES AS DEFINED (1)(5)
Interest, expensed $ 41,116 $ 39,393 $ 26,305
Interest, capitalized 5,596 6,133 2,521
Amortization of debt discounts, premium
and expense 1,742 1,655 1,115
Interest implicit in rentals 831 292 151
--------- --------- ---------
Fixed charges as defined $ 49,285 $ 47,473 $ 30,092
========= ========= =========
Ratio of Earnings to Fixed Charges 1.45
=========
Coverage Deficiency (6) (7) $ 193,383 $ 176,801
========= =========
* Certain amounts have been restated primarily to record cost of gas expense,
including trading losses, in the appropriate accounting periods as
described in Note 2 to the Consolidated Financial Statements.
(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 Investment and its majority-owned
subsidiaries, (b) MCN Investment'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.
(4) In 1998, MCN Investment recorded two unusual charges, consisting of
property write-downs and restructuring charges, totaling $141,872,000
pre-tax ($92,217,000 net of taxes).
(5) MCN has decided to sell its E&P properties and accordingly has classified
this segment as a discontinued operation. Therefore, for purposes of
calculating the Ratio of Earnings to Fixed Charges, E&P is excluded from
the ratio for all periods presented.
(6) Earnings for the twelve-month period ended December 31, 1998, were not
adequate to cover fixed charges. The amount of the coverage deficiency was
$176,801,000. The Ratio of Earnings to Fix Charges excluding unusual
charges would have been .26.
(7) Earnings for the twelve-month period ended March 31, 1999, were not
adequate to cover fixed charges. The amount of the coverage deficiency was
$193,383,000. The amount of the coverage deficiency excluding unusual
charges would have been $51,511,000.