File No. 70-8381
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1
TO
FORM U-1
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.
Paragraph B of Item 1 is hereby amended and restated in its
entirety as follows:
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
(i) will not have to incur additional debt in an effort to reduce its
capital and (ii) will be able to continue to maintain its compliance
with its financial covenants in the Notes.
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.
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: May 19, 1994
