-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, E0xx2PkR8zq7mnkPFbRhq/UOvb3gCnYPMderjQVVHlcpD3hx/+nhM1VjXQIryjTh LiaryE34vYuLOKNuwiG5Sg== 0000031224-94-000051.txt : 19940315 0000031224-94-000051.hdr.sgml : 19940315 ACCESSION NUMBER: 0000031224-94-000051 CONFORMED SUBMISSION TYPE: U-1 PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 19940314 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EASTERN UTILITIES ASSOCIATES CENTRAL INDEX KEY: 0000031224 STANDARD INDUSTRIAL CLASSIFICATION: 4911 IRS NUMBER: 041271872 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: U-1 SEC ACT: 35 SEC FILE NUMBER: 070-08381 FILM NUMBER: 94515855 BUSINESS ADDRESS: STREET 1: ONE LIBERTY SQ STREET 2: P O BOX 2333 CITY: BOSTON STATE: MA ZIP: 02109 BUSINESS PHONE: 6173579590 U-1 1 U-1 EUA & EUA SERVICE DECLARATION & PAYMENT OF DIV File No. 70- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM U-1 APPLICATION/DECLARATION WITH RESPECT TO A DECLARATION AND PAYMENT OF DIVIDENDS UNDER THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935 EASTERN UTILITIES ASSOCIATES P.O. Box 2333, Boston, Massachusetts 02107 EUA SERVICE CORPORATION P.O. Box 2333, BOSTON, MASSACHUSETTS 02107 (Name of companies filing this statement and address of principal executive office) EASTERN UTILITIES ASSOCIATES (Name of top registered holding company parent of applicant or declarant) CLIFFORD J. HEBERT, JR., TREASURER EASTERN UTILITIES ASSOCIATES P.O. Box 2333, BOSTON, MASSACHUSETTS 02107 (Name and address of agent for service) The Commission is requested to mail signed copies of all orders, notices and communications to: ARTHUR I. ANDERSON, ESQ. McDermott, Will & Emery 75 State Street Boston, MA 02109 ITEM 1. DESCRIPTION OF THE PROPOSED TRANSACTION. A. By an order (the "1986 Order") dated February 18, 1986 (HCAR 35-24020), the Commission authorized Eastern Utilities Associates ("EUA") to make capital contributions to EUA Service Corporation ("EUA Service") and/or purchase shares of EUA Service's common stock in an aggregate amount not to exceed $5 million, primarily in order to provide interim financing for constructing EUA Service's office complex (the "Service Center"). EUA made a $5 million equity capital contribution during 1987. The 1986 Order also authorized EUA Service to amend its service contracts with the other companies in the EUA system of companies (the "System Companies") in order to provide a return on EUA Service's equity capital. As the administrative arm of the EUA holding company system (the "EUA System"), EUA Service charges a fee at cost to the System Companies for the services it renders to them. The authorization under the 1986 Order permitted EUA Service to begin billing its allocated equity return among the System Companies at the end of the first month in which EUA made its capital contribution. By an order (the "1987 Order") dated December 28, 1987 (HCAR 35-24543), the Commission authorized EUA Service to issue and sell up to $20 million aggregate principal amount of notes (the "Notes") by means of a negotiated private placement with the Massachusetts Mutual Life Insurance Company and the Franklin Life Insurance Company. The net proceeds from the sale of the Notes were applied to pay or reduce short-term borrowings from banks obtained by EUA Service primarily for construction of the Service Center. The Notes mature in 2008, and are currently being repaid pursuant to a sinking fund repayment schedule. B. In reviewing its cost of capital, EUA Service has determined that it will be desirable to reduce the $5 million of paid-in-capital as it pays down the principal amount of the Notes. Therefore, EUA Service seeks authorization to reduce its paid-in-capital account over the next fifteen years to zero through payment from that account of cash dividends to its sole stockholder, EUA. The dividends will be paid as follows: Year Dividend 1994 $ 500,000 1995 1,000,000 1996 1,000,000 1997 200,000 1998 200,000 1999 200,000 2000 200,000 2001 200,000 2002 200,000 2003 200,000 2004 200,000 2005 200,000 2006 200,000 2007 200,000 2008 300,000 The dividend payment schedule is calculated to reduce EUA Service's capital to a level proportionate to the principal amount remaining on the Notes by 1997 through dividend payments of $2.5 million, in the aggregate. Thereafter, the dividend payments will be made in the same proportions as the sinking fund payments on the Notes. That is, the dividend payment in any given year will be the same percentage of EUA Service's paid-in- capital as the sinking fund payment is to the remaining principal owed on the Notes. The dividends will be paid out of EUA Service's internally generated cash. By paying down its paid-in- capital account over time, as opposed to in a lump sum, EUA Service will not have to incur additional debt in an effort to reduce its capital. By reducing its equity capital, EUA Service will be reducing its fees to the System Companies. A reduction of fees will reduce the overall cost of doing business for the EUA System. Ultimately, such cost savings redounds to the benefit of the System's ratepayers. Therefore, EUA Service hereby requests authorization to declare and pay dividends to EUA out of paid-in- capital as set forth in this Declaration. ITEM 2. FEES, COMMISSIONS, AND EXPENSES. The estimated fees, commissions and expenses of the Declarants expected to be paid or incurred, directly or indirectly, in connection with the transaction described herein are as follows: Securities and Exchange Commission Fee $ 2,000* EUA Service Corporation Expenses 2,500 Fees and Expenses of Company Counsel 5,000 TOTAL 9,500 ======= (*actual) ITEM 3. APPLICABLE STATUTORY PROVISIONS. The sections of the Act and rules or exemptions thereunder that the Declarants believe are or may be applicable to the transactions proposed are set forth below: Payment of dividends to EUA Section 12(c) and Rule 46(a) ITEM 4. REGULATORY APPROVALS. No state commission and no Federal commission, other than the Commission, has jurisdiction over the proposed transaction. ITEM 5. PROCEDURE. (a) In order to be in a position to carry out the proposed transaction at the most advantageous time, the Declarants request that the Commission issue its order hereon on the earliest practical date. (b) It is not considered necessary that there be a recommended decision by a hearing officer or by any other responsible officer of the Commission. The Office of Public Utility Regulation may assist in the preparation of the decision of the Commission, and it is believed that a thirty (30) day waiting period between the issuance of the order of the Commission and the day on which the order is to become effective would not be appropriate. ITEM 6. EXHIBITS AND FINANCIAL STATEMENTS (* Filed herewith). (a) Exhibits. *Exhibit F Opinion of counsel. *Exhibit G Proposed Form of Notice. (b) Financial Statements. *b-1 EUA Service Corporations Statement of Cash Flows and Compensation use of Capital for the years ended December 31, 1994, 1995 and 1996. ITEM 7. INFORMATION AS TO ENVIRONMENTAL EFFECTS. The transactions described in Item 1 do not involve major federal actions significantly affecting the quality of the human environment. No Federal agency has prepared or is preparing an environmental impact statement with respect to the proposed transactions. SIGNATURE Pursuant to the requirements of the Public Utility Holding Company Act of 1935, the undersigned Declarants have duly caused this statement to be signed on their behalf by the undersigned duly authorized individuals. EASTERN UTILITIES ASSOCIATES By: /s/ Clifford J. Hebert, Jr. Clifford J. Hebert, Jr. Treasurer EUA SERVICE CORPORATION By: /s/ Clifford J. Hebert, Jr. Clifford J. Hebert, Jr. Treasurer Dated: March 14, 1994 EX-5.F 2 EXHIBIT F OPINION OF COUNSEL March 14, 1994 Securities and Exchange Commission 450 Fifth Street, N.W. Washington D.C. 20549 Re: File No. 70- Eastern Utilities Associates; EUA Service Corporation-Declaration with Respect to a Declaration and Payment of Dividends Ladies and Gentlemen: As counsel for Eastern Utilities Associates ("EUA") and EUA Service Corporation ("EUA Service"), we are furnishing this opinion to be used in connection with the declaration on Form U-1 under the Public Utility Holding Company Act of 1935 (the "Act") filed by EUA and EUA Service with the Securities and Exchange Commission (the "Commission") on March ___, 1994, File No. 70- , (the "Declaration"). In the Declaration, EUA Service requests Commission authorization to declare and pay dividends in an aggregate amount of $5 million to EUA, as EUA Service's sole stockholder, over a fifteen-year period according to a payment schedule set forth in the Declaration. The dividend payments will be made from EUA Service's paid-in-capital account and will reduce the balance of such account to zero, and they will mirror the sinking fund payments for EUA Service's $20 million aggregate principal amount of outstanding notes. It is our opinion, subject to the assumptions hereinafter stated, that in the event the transactions for which EUA Service has requested authorization as described above (the "Proposed Transactions") are consummated in accordance with the Declaration: (a) All State laws applicable to the Proposed Transactions will have been complied with by EUA Service; and (b) The consummation of the Proposed Transactions will not violate the legal rights of the holders of any of the securities issued by EUA or EUA Service or any of their associate companies, Eastern Edison Company ("Eastern Edison"), Blackstone Valley Electric Company ("Blackstone"), Newport Electric Corporation ("Newport"), EUA Cogenex Corporation ("EUA Cogenex"), Montaup Electric Company ("Montaup"), EUA Energy Investment Corporation ("EUA Energy Investment"), EUA Ocean State Corporation ("EUA Ocean State"), Ocean State Power ("OSP I"), Ocean State Power II ("OSP II"), OSP Finance Company ("OSP Finance") and Northeast Energy Management, Inc. ("NEM"). This opinion, in addition to being subject to the consummation of the Proposed Transactions in accordance with the Declaration, is also subject to the following additional assumptions: (1) compliance with such orders as the Commission may issue from time to time upon the Declaration; (2) the accuracy of information furnished to us (a) as to the outstanding securities of EUA and EUA Service and their associate companies, Eastern Edison, Blackstone, Newport, EUA Cogenex, Montaup, EUA Energy Investment, EUA Ocean State, OSP I, OSP II, OSP Finance and NEM and (b) that there is no provision or condition in any note or other document in connection with outstanding short-term notes of any of those companies limiting the Proposed Transactions; (3) that the Proposed Transactions may be subject to and affected by applicable bankruptcy, receivership, insolvency, reorganization, moratorium, fraudulent conveyance or other laws affecting the enforcement of the rights and remedies of creditors generally (including, without limitation, such as may deny giving effect to waivers of rights to debtors or guarantors); and such duties and standards as are or may be imposed on creditors, including, without limitation, good faith, reasonableness and fair dealing under any applicable statute, rule, regulation or judicial decision; and (4) that the Proposed Transactions may be subject to and affected by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law) and the exercise of equitable powers by a court of competent jurisdiction (and no opinion is given herein as to specific performance or as to the availability of other equitable remedies or equitable relief of any kind). This opinion relates only to Federal law and the laws of The Commonwealth of Massachusetts. To the extent that certain matters addressed may involve the laws of other States, we have assumed that such laws are not materially different from the laws of The Commonwealth of Massachusetts. We consent to the use of this opinion in connection with the Declaration filed with the Commission. Very truly yours, McDermott, Will & Emery EX-99.G 3 EXHIBIT G PROPOSED FORM OF NOTICE Exhibit G (PROPOSED FORM OF NOTICE) SECURITIES AND EXCHANGE COMMISSION (Release No. 35 - , 70 - ) Eastern Utilities Associates ("EUA"), a registered holding company and EUA Service Corporation ("EUA Service"), a wholly- owned subsidiary of EUA, have filed a declaration with this Commission pursuant to Section 12(c) of the Public Utility Holding Company Act of 1935 (the "Act") and Rule 46(a) promulgated thereunder. EUA Service seeks authorization to declare and pay dividends to EUA out of EUA Service's paid-in-capital account in an aggregate amount of $5 million according to a fifteen-year payment schedule set forth in the declaration. The payment schedule mirrors the sinking fund payments for EUA Service's $20 million aggregate principal amount of outstanding notes. NOTICE IS FURTHER GIVEN that any interested person may, not later than _________, 1994, request in writing that a hearing be held on such matter, stating the nature of his interest, the reasons for such request, and the issues of fact or law raised by said declaration which he desires to controvert; or he may request that he be notified if the Commission should order a hearing thereon. Any such request should be addressed: Secretary, Securities and Exchange Commission, 450 5th Street, N.W., Judiciary Plaza, Washington, D.C. 20549. A copy of such request should be served personally or by mail upon the declarant at the above-stated address and proof of service (by affidavit or, in case of an attorney at law, by certificate) should be filed with the request. At any time after said date the declaration, as filed or as it may be amended, may be granted and permitted to become effective as provided in Rule 23 of the General Rules and Regulations promulgated under the Act, or the Commission may grant exemption from such rules as provided in Rules 20(a) and 100 thereof or take such other action as it may deem appropriate. Persons who request a hearing or advice as to whether a hearing is ordered will receive any notices and orders issued in this matter, including the date of the hearing (if ordered) and any postponements thereof. For the Commission, by the Division of Corporate Regulation, pursuant to delegated authority. Secretary EX-27 4 STATEMENT OF CASH FLOW & COMPENSATION USE OF CAPITAL EUA SERVICE CORPORATION ESTIMATED STATEMENT OF CASH FLOWS For The Years Ended December 31, 1994 1995 1996 Cash flow from operating activities: Net income: Compensation Use of Capital (see attachment) 581,616 523,466 407,166 Addback non-cash items funded by operating companies: SFAS 106 - EUA Service Corp accrual in excess of tax deductible amount 507,000 507,000 507,000 SFAS 87 - Key Executive Insurance accrued by EUA Service 258,000 258,000 258,000 Depreciation and Amortization 1,160,000 1,160,000 1,160,000 ------------ ------------ ------------ SUB-TOTAL 2,506,616 2,448,466 2,332,166 Cash used in investing activities: Cash construction expenditures (373,000) (465,000) (482,000) Cash provided from (used in) financing activities: Proceeds from short-term borrowings Redemption of long-term debt (1,100,000) (1,100,000) (1,100,000) ------------ ------------ ------------ Estimated net available cash 1,033,616 883,466 750,166 Cash balance brought forward 0 533,616 417,082 Proposed Return of Capital Dividend 500,000 1,000,000 1,000,000 ------------ ------------ ------------ Etimated available cash after R.O.C. dividend 533,616 417,082 167,248 ============ ============ ============
EUA SERVICE CORPORATION COMPENSATION USE OF CAPITAL For The Years Ended December 31, 1994 1995 1996 COMMON STOCK AT BEGINNING OF YEAR 1,000 1,000 1,000 MISCELLANEOUS PAID IN CAPITAL 5,000,000 4,500,000 3,500,000 ------------ ------------ ------------ TOTAL BASE AMOUNT 5,001,000 4,501,000 3,501,000 WEIGHTED COST OF COMMON EQUITY AT 12/31/93 11.63% 11.63% 11.63% ------------ ------------ ------------ ANNUAL RETURN ON INVESTMENT 581,616 523,466 407,166 ============ ============ ============
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