SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-6
For Registration Under the Securities Act of 1933 of Securities
of Unit Investment Trusts Registered on Form N-8B-2
A. Exact Name of Trust: THE FIRST TRUST SPECIAL
SITUATIONS TRUST, SERIES
92
B. Name of Depositor: NIKE SECURITIES L.P.
C. Complete Address of Depositor's 1001 Warrenville Road
Principal Executive Offices: Lisle, Illinois 60532
D. Name and Complete Address of
Agents for Service: NIKE SECURITIES L.P.
Attention: James A. Bowen
Suite 300
1001 Warrenville Road
Lisle, Illinois 60532
E. Title and Amount of
Securities Being Registered: An indefinite number of
Units pursuant to Rule
24f-2 promulgated under
the Investment Company Act
of 1940, as amended.
F. Proposed Maximum Offering
Price to the Public of the
Securities Being Registered: Indefinite.
G. Amount of Filing Fee
(as required by Rule 24f-2): $500.00
H. Approximate Date of Proposed
Sale to the Public: ____ Check if it is
proposed that this filing
will become effective on
_____ at ____ p.m.
pursuant to Rule 487.
The registrant hereby amends this Registration Statement on
such date or dates as may be necessary to delay its effective
date until the registrant shall file a further amendment which
specifically states that this Registration Statement shall
thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement
shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 92
Cross-Reference Sheet
(Form N-8B-2 Items required by Instructions as
to the Prospectus in Form S-6)
FORM N-8B-2 FORM S-6
ITEM NUMBER HEADING IN PROSPECTUS
I. ORGANIZATION AND GENERAL INFORMATION
1. (a) Name of trust Prospectus front cover
(b) Title of securities issued Summary of Essential
Information
2. Name and address of each Information as to
depositor Sponsor, Trustee and
Evaluator
3. Name and address of Information as to
trustee Sponsor, Trustee and
Evaluator
4. Name and address of Underwriting
principal underwriters
5. State of organization The First Trust Special
of trust Situations Trust
6. Execution and termination The First Trust Special
of trust agreement Situations Trust; Other
Information
7. Changes of name *
8. Fiscal Year *
9. Litigation *
II. GENERAL DESCRIPTION OF THE TRUST AND SECURITIES OF THE TRUST
10. (a) Registered or bearer Rights of Unit Holders
securities
(b) Cumulative or distributive
securities The First Trust Special
Situations Trust
(c) Redemption Rights of Unit Holders
(d) Conversion, transfer, etc. Rights of Unit Holders
(e) Periodic payment plan
certificates *
(f) Voting rights Rights of Unit Holders;
Other Information
(g) Notice of certificate- Rights of Unit Holders;
holders Other Information
(h) Consents required Rights of Unit Holders;
Other Information
(i) Other provisions The First Trust Special
Situations Trust
11. Types of securities comprising The First Trust Special
units Situations Trust
12. Certain information
regarding periodic payment
plan certificates *
13. (a) Load, fees, expenses, etc. Summary of Essential
Information; Public
Offering; The First Trust
Special Situations Trust
(b) Certain information
regarding periodic payment
plan certificates *
(c) Certain percentages Summary of Essential
Information; The First
Trust Special Situations
Trust; Public Offering
(d) Difference in price offered Public Offering
for any class of transactions
to any class or group of
individuals
(e) Certain other load fees, Rights of Unit Holders
expenses, etc. payable by
holders
(f) Certain profits receivable The First Trust Special
by depositor, principal Situations Trust
underwriters, trustee or
affiliated persons
(g) Ratio of annual charges to
income *
14. Issuance of trust's Rights of Unit Holders
securities
15. Receipt and handling of
payments from purchasers *
16. Acquisition and disposition
of underlying securities The First Trust Special
Situations Trust; Rights
of Unit Holders
17. Withdrawal or redemption The First Trust Special
Situations Trust; Public
Offering; Rights of Unit
Holders
18. (a) Receipt, custody and
disposition of income Rights of Unit Holders
(b) Reinvestment of
distributions Rights of Unit Holders
(c) Reserves or special funds Information as to
Sponsor, Trustee and
Evaluator
(d) Schedule of distributions *
19. Records, accounts and
reports Rights of Unit Holders
20. Certain miscellaneous
provisions of trust
agreement
(a) Amendment Other Information
(b) Termination Other Information
(c) and (d) Trustee, removal and
successor Information as to
Sponsor, Trustee and
Evaluator
(e) and (f) Depositor, removal Information as to
and successor Sponsor, Trustee and
Evaluator
21. Loans to security holders *
22. Limitations on liability The First Trust Special
Situations Trust;
Information as to
Sponsor, Trustee and
Evaluator
23. Bonding arrangements Contents of Registration
Statement
24. Other material provisions
of trust agreement *
III. ORGANIZATION, PERSONNEL AND AFFILIATED PERSONS OF DEPOSITOR
25. Organization of depositor Information as to
Sponsor, Trustee and
Evaluator
26. Fees received by depositor *
27. Business of depositor Information as to
Sponsor, Trustee and
Evaluator
28. Certain information as to *
officials and affiliated
persons of depositor
29. Voting securities of *
depositor
30. Persons controlling *
depositor
31. Payment by depositor for *
certain services rendered
to trust
32. Payment by depositor for *
certain other services
rendered to trust
33. Remuneration of other *
persons for certain
services rendered to trust
34. Remuneration of other *
persons for certain services
rendered to trust
IV. DISTRIBUTION AND REDEMPTION
35. Distribution of trust's
securities by states Public Offering
36. Suspension of sales of
trust's securities *
37. Revocation of authority
to distribute *
38. (a) Method of distribution Public Offering
(b) Underwriting agreements Public Offering;
Underwriting
(c) Selling agreements Public Offering
39. (a) Organization of principal Information as to
underwriters Sponsor, Trustee and
Evaluator
(b) N.A.S.D. membership of Information as to
principal underwriters Sponsor, Trustee and
Evaluator
40. Certain fee received by See Items 13(a) and 13(e)
principal underwriters
41. (a) Business of principal Information as to
underwriters Sponsor, Trustee and
Evaluator
(b) Branch offices of
principal underwriters *
(c) Salesmen of principal
underwriters *
42. Ownership of trust's
securities by certain
persons *
43. Certain brokerage
commissions received
by principal underwriters *
44. (a) Method of valuation Summary of Essential
Information; The First
Trust Special Situations
Trust; Public Offering
(b) Schedule as to offering
price *
(c) Variation in offering Public Offering
price to certain persons
45. Suspension of redemption
rights *
46. (a) Redemption Valuation Rights of Unit Holders
(b) Schedule as to redemption
price *
47. Maintenance of position Public Offering; Rights
in underlying securities of Unit Holders
V. INFORMATION CONCERNING THE TRUSTEE OR CUSTODIAN
48. Organization and regulation Information as to
of trustee Sponsor, Trustee and
Evaluator
49. Fees and expenses of trustee The First Trust Special
Situations Trust
50. Trustee's lien The First Trust Special
Situations Trust
VI. INFORMATION CONCERNING THE INSURANCE OF HOLDERS OR
SECURITIES
51. Insurance of holders of *
trust's securities
VII. POLICY OF REGISTRANT
52. (a) Provisions of trust The First Trust Special
agreement with respect Situations Trust; Rights
to selection or elimination of Unit Holders
of underlying securities
(b) Transactions involving
elimination of underlying
securities *
(c) Policy regarding The First Trust Special
substitution or elimination Situations Trust; Rights
of underlying securities of Unit Holders
(d) Fundamental policy not
otherwise covered *
53. Tax status of Trust The First Trust Special
Situations Trust
VIII. FINANCIAL AND STATISTICAL INFORMATION
54. Trust's securities during
last ten years *
55. Certain information regarding
periodic payment plan
certificates
56. Certain information regarding
periodic payment plan
certificates
57. Certain information regarding *
periodic payment plan
certificates
58. Certain information regarding
periodic payment plan
certificates
59. Financial statements Report of Independent
(Instruction 1(b) to Auditors; Statement of
Form S-6) Net Assets
__________________________
* Inapplicable, answer negative or not required.
SUBJECT TO COMPLETION, DATED MARCH 28, 1994
Utilities Income Trust of America, Series 1
The Trust. The First Trust Special Situations Trust, Series 92
(the "Trust") is a unit investment trust consisting of a portfolio
containing common stocks issued by public utility companies which
provide income and are considered to have the potential for capital
appreciation. The Trust also may provide an opportunity to receive
increasing dividend distributions, although there is no assurance
that this will occur.
The objective of the Trust is to provide for income and potential
capital appreciation by investing the Trust's portfolio in common
stocks issued by public utility companies incorporated or headquartered
throughout the United States (the "Equity Securities"). See "Schedule
of Investments." The Trust has a Mandatory Termination Date as
set forth under "Summary of Essential Information." There is,
of course, no guarantee that the objective of the Trust will be
achieved. Each Unit of the Trust represents an undivided fractional
interest in all the Equity Securities deposited in the Trust.
The Equity Securities deposited in the Trust's portfolio have
no fixed maturity date and the value of these underlying Equity
Securities will fluctuate with changes in the values of stocks
in general. See "Portfolio."
The Sponsor may, from time to time during a period of up to approximately
180 days after the Initial Date of Deposit, deposit additional
Equity Securities in the Trust. Such deposits of additional Equity
Securities will, therefore, be done in such a manner that the
original proportionate relationship amongst the individual issues
of the Equity Securities shall be maintained. See "What is the
First Trust Special Situations Trust?" and "How May Equity Securities
be Removed from the Trust?"
Public Offering Price. The Public Offering Price per Unit of the
Trust during the initial offering period is equal to the aggregate
underlying value of the Equity Securities in the Trust (generally
determined by the closing sale prices of listed Equity Securities
and the ask prices of over-the-counter traded Equity Securities)
plus or minus a pro rata share of cash, if any, in the Capital
and Income Accounts of the Trust, plus a maximum sales charge
of 4.9% (equivalent to 5.152% of the net amount invested). A pro
rata share of accumulated dividends, if any, in the Income Account
is included in the Public Offering Price. The secondary market
Public Offering Price per Unit will be based upon the aggregate
underlying value of the Equity Securities in the Trust (generally
determined by the closing sale prices of listed Equity Securities
and the bid prices of over-the-counter traded Equity Securities)
plus or minus a pro rata share of cash, if any, in the Capital
and Income Accounts of the Trust plus a maximum sales charge of
4.9% (equivalent to 5.152% of the net amount invested) subject
to reduction beginning , 1995. The minimum
purchase is $1,000. The sales charge is reduced on a graduated
scale for sales involving at least 5,000 Units. See "How is the
Public Offering Price Determined?"
Estimated Annual Distributions. The estimated annual dividend
distribution to Unit holders (based on the most recent quarterly
dividend declared with respect to the Equity Securities in the
Trust) at the opening of business on the Initial Date of Deposit
was $ per 100 Units. The estimated annual dividend distributions
per Unit will vary with changes in fees and expenses of the Trust,
with changes in dividends received and with the sale or liquidation
of Equity Securities; therefore, there is no assurance that the
annual dividend distribution will be realized in the future.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
First Trust registered trademark
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY
NOT BE SOLD NOR MAY OFFERS BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION
STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE
AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE
BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER,
SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR
QUALIFICATION UNDER THE SECURITIES LAWS OF ANY STATE.
The date of this Prospectus is , 1994
Page 1
Dividend and Capital Gains Distributions. Distributions of dividends
received, and realized capital gains, if any, received by the
Trust, net of expenses of the Trust, will be paid monthly on the
Distribution Date to Unit holders of record on the Record Date
as set forth in the "Summary of Essential Information." On
, 1994, the Initial Distribution Date, Unit
holders of record as of , 1994 will
receive $ per 100 Units. Beginning in
of 1994, the regular estimated monthly distribution will be $
per 100 Units. Distributions of funds in the Capital
Account, if any, will be made at least annually in December of
each year. Any distribution of income and/or capital gains will
be net of the expenses of the Trust. See "What is the Federal
Tax Status of Unit Holders?" Additionally, upon termination of
the Trust, the Trustee will distribute, upon surrender of Units
for redemption, to each Unit holder his pro rata share of the
Trust's assets, less expenses, in the manner set forth under "Rights
of Unit Holders-How are Income and Capital Distributed?"
Secondary Market for Units. After the initial offering period,
while under no obligation to do so, the Sponsor may maintain a
market for Units of the Trust and offer to repurchase such Units
at prices which are based on the aggregate underlying value of
Equity Securities in the Trust (generally determined by the closing
sale prices of listed Equity Securities and the bid prices of
over-the-counter traded Equity Securities) plus or minus cash,
if any, in the Capital and Income Accounts of the Trust. If a
secondary market is maintained during the initial offering period,
the prices at which Units will be repurchased will also be based
upon the aggregate underlying value of the Equity Securities in
the Trust (generally determined by the closing sale prices of
listed Equity Securities and the ask prices of over-the-counter
traded Equity Securities) plus or minus cash, if any, in the Capital
and Income Accounts of the Trust. If a secondary market is not
maintained, a Unit holder may redeem Units through redemption
at prices based upon the aggregate underlying value of the Equity
Securities in the Trust (generally determined by the closing sale
prices of listed Equity Securities and the bid prices of over-the-counter
traded Equity Securities) plus or minus a pro rata share of cash,
if any, in the Capital and Income Accounts of the Trust.
Termination. Commencing on the Mandatory Termination Date, Equity
Securities will begin to be sold in connection with the termination
of the Trust. The Sponsor will determine the manner, timing and
execution of the sale of the Equity Securities. Written notice
of any termination of the Trust specifying the time or times at
which Unit holders may surrender their certificates for cancellation
shall be given by the Trustee to each Unit holder at his address
appearing on the registration books of the Trust maintained by
the Trustee. Unit holders will receive a cash distribution within
a reasonable time after the Trust is terminated. See "Rights of
Unit Holders-How are Income and Capital Distributed?"
Page 2
Summary of Essential Information
At the Opening of Business on the Initial Date of Deposit
of the Equity Securities- , 1994
Sponsor: Nike Securities L.P.
Trustee: United States Trust Company of New York
Evaluator: Securities Evaluation Service, Inc.
<TABLE>
<CAPTION>
<S> <C>
General Information
Initial Number of Units
Fractional Undivided Interest in the Trust per Unit 1/
Public Offering Price:
Aggregate Offering Price Evaluation of Equity
Securities in Portfolio (1) $
Aggregate Offering Price Evaluation of Equity
Securities per 100 Units $
Sales Charge of 4.9% of the Public Offering Price per 100 Units
(5.152% of the net amount invested) $
Public Offering Price per 100 Units (2) $
Sponsor's Initial Repurchase Price per 100 Units $
Redemption Price per 100 Units (based on aggregate
underlying value of Equity Securities) (3) $
Calculation of Net Annual Dividends per 100 Units:
Estimated Gross Annual Dividends per 100 Units (4) $
Less: Estimated Annual Expense per 100 Units $
__________
Estimated Net Annual Dividends per 100 Units $
==========
</TABLE>
CUSIP Number
First Settlement Date , 1994
Mandatory Termination Date , 2001
Discretionary Liquidation Amount The Trust may be terminated
if the value thereof is less
than 40% of the total value of Equity
Securities deposited in the Trust
during the primary offering period.
Trustee's Annual Fee $.90 per 100 Units outstanding.
Evaluator's Annual Fees $.30 per 100 Units outstanding.
Evaluations for purposes of sale,
purchase or redemption of Units are
made as of the close of trading
(4:00 p.m. Eastern time) on the
New York Stock Exchange on each
day on which it is open.
Supervisory Fee Maximum of $.25 per 100 Units out-
standing annually payable to an
affiliate of the Sponsor.
Income Distribution Record Date Twentieth day of each month
commencing , 1994.
Income Distribution Date (5) Last day of each month
commencing , 1994.
[FN]
________________
(1) Each Equity Security listed on a national securities exchange
or the NASDAQ National Market System is valued at the last closing
sale price, or if no such price exists or if the Equity Security
is not so listed, at the closing ask price thereof.
(2) On the Initial Date of Deposit there will be no accumulated
dividends in the Income Account. Anyone ordering Units after such
date will pay a pro rata share of any accumulated dividends in
such Income Account. The Public Offering Price as shown reflects
the value of the Equity Securities at the opening of business
on the Initial Date of Deposit and establishes the original proportionate
relationship amongst the individual securities. No sales to investors
will be executed at this price. Additional Equity Securities will
be deposited during the day of the Initial Date of Deposit which
will be valued as of 4:00 p.m. Eastern time and sold to investors
at a Public Offering Price per Unit based on this valuation.
(3) See "How May Units be Redeemed?"
(4) The estimated annual dividends are based on the most recent
quarterly dividend.
(5) Distributions from the Capital Account will be made monthly
payable on the last day of the month to Unit holders of record
on the twentieth day of such month if the amount available for
distribution equals at least $1.00 per 100 Units. Notwithstanding,
distributions of funds in the Capital Account, if any, will be
made in December of each year.
Page 3
Utilities Income Trust of America, Series 1
The First Trust Special Situations Trust, Series 92
What is The First Trust Special Situations Trust?
The First Trust Special Situations Trust, Series 92 is one of
a series of investment companies created by the Sponsor under
the name of The First Trust Special Situations Trust, all of which
are generally similar but each of which is separate and is designated
by a different series number (the "Trust"). This Series consists
of an underlying separate unit investment trust designated as:
Utilities Income Trust of America, Series 1. The Trust was created
under the laws of the State of New York pursuant to a Trust Agreement
(the "Indenture"), dated the Initial Date of Deposit, with Nike
Securities L.P., as Sponsor, United States Trust Company of New
York, as Trustee, Securities Evaluation Service, Inc., as Evaluator,
and First Trust Advisors L.P., as Portfolio Supervisor.
On the Initial Date of Deposit, the Sponsor deposited with the
Trustee confirmations of contracts for the purchase of common
stocks issued by public utility companies together with an irrevocable
letter or letters of credit of a financial institution in an amount
at least equal to the purchase price of such securities. In exchange
for the deposit of securities or contracts to purchase securities
in the Trust, the Trustee delivered to the Sponsor documents evidencing
the entire ownership of the Trust.
The objective of the Trust is to provide for income and potential
capital appreciation through an investment in equity securities
issued by public utility companies incorporated or headquartered
throughout the United States (the "Equity Securities"). There
is, of course, no guarantee that the objective of the Trust will
be achieved.
With the deposit of the Equity Securities on the Initial Date
of Deposit, the Sponsor established a percentage relationship
between the amounts of Equity Securities in the Trust's portfolio.
From time to time following the Initial Date of Deposit, the Sponsor,
pursuant to the Indenture, may deposit additional Equity Securities
in the Trust and Units may be continuously offered for sale to
the public by means of this Prospectus, resulting in a potential
increase in the outstanding number of Units of the Trust. Any
additional Equity Securities deposited in the Trust will maintain,
as nearly as is practicable, the original proportionate relationship
of the Equity Securities in the Trust's portfolio. Any deposit
by the Sponsor of additional Equity Securities will duplicate,
as nearly as is practicable, the original proportionate relationship
and not the actual proportionate relationship on the subsequent
date of deposit, since the actual proportionate relationship may
be different than the original proportionate relationship. Any
such difference may be due to the sale, redemption or liquidation
of any of the Equity Securities deposited in the Trust on the
Initial, or any subsequent, Date of Deposit. See "How May Equity
Securities be Removed from the Trust?" The original percentage
relationship of each Equity Security to the Trust is set forth
herein under "Schedule of Investments." Since the prices of the
underlying Equity Securities will fluctuate daily, the ratio,
on a market value basis, will also change daily. The portion of
Equity Securities represented by each Unit will not change as
a result of the deposit of additional Equity Securities in the
Trust.
On the Initial Date of Deposit, each Unit of the Trust represented
the undivided fractional interest in the Equity Securities deposited
in the Trust set forth under "Summary of Essential Information."
To the extent that Units of the Trust are redeemed, the aggregate
value of the Equity Securities in the Trust will be reduced and
the undivided fractional interest represented by each outstanding
Unit of the Trust will increase. However, if additional Units
are issued by the Trust in connection with the deposit of additional
Equity Securities by the Sponsor, the aggregate value of the Equity
Securities in the Trust will be increased by amounts allocable
to additional Units, and the fractional undivided interest represented
by each Unit of the Trust will be decreased proportionately. See
"How May Units be Redeemed?" The Trust has a Mandatory Termination
Date as set forth herein under "Summary of Essential Information."
Page 4
What are the Expenses and Charges?
At no cost to the Trust, the Sponsor has borne all the expenses
of creating and establishing the Trust, including the cost of
the initial preparation, printing and execution of the Indenture
and the certificates for the Units, legal and accounting expenses,
expenses of the Trustee and other out-of-pocket expenses. The
Sponsor will not receive any fees in connection with its activities
relating to the Trust. However, First Trust Advisors L.P., an
affiliate of the Sponsor, will receive an annual supervisory fee,
which is not to exceed the amount set forth under "Summary of
Essential Information," for providing portfolio supervisory services
for the Trust. Such fee is based on the number of Units outstanding
in the Trust on January 1 of each year except for the year or
years in which an initial offering period occurs in which case
the fee for a month is based on the number of Units outstanding
at the end of such month. The fee may exceed the actual costs
of providing such supervisory services for this Trust, but at
no time will the total amount received for portfolio supervisory
services rendered to unit investment trusts of which Nike Securities
L.P. is the Sponsor in any calendar year exceed the aggregate
cost to First Trust Advisors L.P. of supplying such services in
such year. See "Underwriting."
Subsequent to the initial offering period, the Evaluator will
receive a fee as indicated in the "Summary of Essential Information."
The Trustee pays certain expenses of the Trust for which it is
reimbursed by the Trust. The Trustee will receive for its ordinary
recurring services to the Trust an annual fee computed at $.90
per annum per 100 Units in the Trust outstanding based upon the
largest aggregate number of Units of the Trust outstanding at
any time during the year. For a discussion of the services performed
by the Trustee pursuant to its obligations under the Indenture,
reference is made to the material set forth under "Rights of Unit
Holders."
The Trustee's and Evaluator's fees are payable from the Income
Account of the Trust to the extent funds are available and then
from the Capital Account of the Trust. Since the Trustee has the
use of the funds being held in the Capital and Income Accounts
for payment of expenses and redemptions and since such Accounts
are noninterest-bearing to Unit holders, the Trustee benefits
thereby. Part of the Trustee's compensation for its services to
the Trust is expected to result from the use of these funds. Both
fees may be increased without approval of the Unit holders by
amounts not exceeding proportionate increases under the category
"All Services Less Rent of Shelter" in the Consumer Price Index
published by the United States Department of Labor.
The following additional charges are or may be incurred by the
Trust: all legal and annual auditing expenses of the Trustee incurred
by or in connection with its responsibilities under the Indenture;
the expenses and costs of any action undertaken by the Trustee
to protect the Trust and the rights and interests of the Unit
holders; fees of the Trustee for any extraordinary services performed
under the Indenture; indemnification of the Trustee for any loss,
liability or expense incurred by it without negligence, bad faith
or willful misconduct on its part, arising out of or in connection
with its acceptance or administration of the Trust; indemnification
of the Sponsor for any loss, liability or expense incurred without
gross negligence, bad faith or willful misconduct in acting as
Depositor of the Trust; all taxes and other government charges
imposed upon the Securities or any part of the Trust (no such
taxes or charges are being levied or made or, to the knowledge
of the Sponsor, contemplated). The above expenses and the Trustee's
annual fee, when paid or owing to the Trustee, are secured by
a lien on the Trust. In addition, the Trustee is empowered to
sell Equity Securities in the Trust in order to make funds available
to pay all these amounts if funds are not otherwise available
in the Income and Capital Accounts of the Trust. Since the Equity
Securities are all common stocks and the income stream produced
by dividend payments is unpredictable, the Sponsor cannot provide
any assurance that dividends will be sufficient to meet any or
all expenses of the Trust. As described above, if dividends are
insufficient to cover expenses, it is likely that Equity Securities
will have to be sold to meet Trust expenses. These sales may result
in capital gains or losses to Unit holders. See "What is the Federal
Tax Status of Unit Holders?"
The Indenture requires the Trust to be audited on an annual basis
at the expense of the Trust by independent auditors selected by
the Sponsor. So long as the Sponsor is making a secondary market
for the
Page 5
Units, the Sponsor is required to bear the cost of such annual
audits to the extent such cost exceeds $.50 per 100 Units. Unit
holders of the Trust covered by an audit may obtain a copy of
the audited financial statements upon request.
What is the Federal Tax Status of Unit Holders?
The Trust has elected and intends to qualify on a continued basis
for special federal income tax treatment as a "regulated investment
company" under the Internal Revenue Code of 1986, as amended (the
"Code"). If the Trust so qualifies and timely distributes to Unit
holders 90% or more of its taxable income (without regard to its
net capital gain, i.e., the excess of its net long-term capital
gain over its net short-term capital loss), it will not be subject
to federal income tax on the portion of its taxable income (including
any net capital gain) that it distributes to Unit holders. In
addition, to the extent the Trust timely distributes to Unit holders
at least 98% of its taxable income (including any net capital
gain), it will not be subject to the 4% excise tax on certain
undistributed income of "regulated investment companies." Because
the Trust intends to timely distribute its taxable income (including
any net capital gain), it is anticipated that the Trust will not
be subject to federal income tax or the excise tax. Although all
or a portion of the Trust's taxable income (including any net
capital gain) for the taxable year may be distributed to Unit
holders shortly after the end of the calendar year, such a distribution
will be treated for federal income tax purposes as having been
received by Unit holders during the calendar year just ended.
Distributions to Unit holders of the Trust's taxable income (other
than its net capital gain) will be taxable as ordinary income
to Unit holders. To the extent that distributions to a Unit holder
in any year exceed the Trust's current and accumulated earnings
and profits, they will be treated as a return of capital and will
reduce the Unit holder's basis in his Units and, to the extent
that they exceed his basis, will be treated as a gain from the
sale of his Units as discussed below.
Distributions of the Trust's net capital gain which are properly
designated as capital gain dividends by the Trust will be taxable
to Unit holders as long-term capital gain, regardless of the length
of time the Units have been held by a Unit holder. A Unit holder
may recognize a taxable gain or loss if the Unit holder sells
or redeems his Units. Any gain or loss arising from (or treated
as arising from) the sale or redemption of Units will be a capital
gain or loss, except in the case of a dealer or a financial institution.
For taxpayers other than corporations, net capital gains are presently
subject to a maximum stated marginal tax rate of 28%. However,
it should be noted that legislative proposals are introduced from
time to time that affect tax rates and could affect relative differences
at which ordinary income and capital gains are taxed. A capital
loss is long-term if the asset is held for more than one year
and short-term if held for one year or less. If a Unit holder
holds Units for six months or less and subsequently sells such
Units at a loss, the loss will be treated as a long-term capital
loss to the extent that any long-term capital gain distribution
is made with respect to such Units during the six-month period
or less that the Unit holder owns the Units.
The Revenue Reconciliation Act of 1993 (the "Act") raised tax
rates on ordinary income while capital gains remain subject to
a 28% maximum stated rate. Because some or all capital gains are
taxed at a comparatively lower rate under the Act, the Act includes
a provision that would recharacterize capital gains as ordinary
income in the case of certain financial transactions that are
"conversion transactions" effective for transactions entered into
after April 30, 1993. Unit holders and prospective investors should
consult with their tax advisers regarding the potential effect
of this provision on their investment in Units.
Distributions which are taxable as ordinary income to Unit holders
will constitute dividends for federal income tax purposes. In
the case of certain corporate Unit holders, such distributions
are eligible for the dividends-received deduction, described below
provided that the Unit holder satisfies certain requirements (as
discussed below), and only to the extent of eligible dividends
received by the Trust. Current law does not provide for a dividends-received
deduction for taxpayers other than corporations such as individuals.
The dividends-received deduction is generally 70%. However, Congress
from time to time considers proposals to reduce the rate and enactment
of such a proposal would adversely affect the after-tax return
to
Page 6
investors who can take advantage of the deduction. Unit holders
are urged to consult their own tax advisers.
Sections 246 and 246A of the Code contain limitations on the eligibility
of dividends for the dividends-received deduction for corporations.
Depending upon the corporate Unit holder's circumstances (including
whether he is treated as having satisfied a 46-day holding period
requirement with respect to his Units and whether his Units are
debt financed), these limitations may prevent such Unit holder
from qualifying for the dividends-received deduction with respect
to dividends received from the Trust. Proposed regulations have
been issued which address special rules that must be considered
in determining whether the 46-day holding requirement is met.
Moreover, the allowable percentage of the deduction will be reduced
from 70% if a corporate Unit holder owns certain stock (or Units)
the financing of which is attributable to indebtedness incurred
by such corporation. It should be noted that various legislative
proposals that would affect the dividends received deduction have
been introduced. Accordingly, Unit holders should consult their
own tax advisers in this regard. A corporate Unit holder should
be aware that the receipt of dividend income for which the dividends
received deduction is available may give rise to an alternative
minimum tax liability (or increase an existing liability) because
the dividend income will be included in the corporation's "adjusted
current earnings" for purposes of the adjustment to alternative
minimum taxable income required by Section 56(g) of the Code.
The federal tax status of each year's distributions will be reported
to Unit holders and to the Internal Revenue Service. The foregoing
discussion relates only to the federal income tax status of the
Trust and to the tax treatment of distributions by the Trust to
U.S. Unit holders. Unit holders that are not United States citizens
or residents should be aware that distributions from the Trust
will generally be subject to a withholding tax and should consult
their own tax advisers to determine whether investment in the
Trust is appropriate. Units in the Trust and Trust distributions
may also be subject to state and local taxation and Unit holders
should consult their own tax advisers in this regard.
Under the Code, certain miscellaneous itemized deductions, such
as investment expenses, tax return preparation fees and employee
business expenses, will be deductible by individuals only to the
extent they exceed 2% of adjusted gross income. Miscellaneous
itemized deductions subject to this limitation under present law
do not include expenses incurred by the Trust so long as the Units
are held by or for 500 or more persons at all times during the
taxable year. In the event the Units are held by fewer than 500
persons, additional taxable income will be realized by the individual
(and other noncorporate) Unit holders in excess of the distributions
received by the Trust.
Distributions reinvested into additional Units of the Trust will
be taxed to a Unit holder in the manner described above (i.e.,
as ordinary income, long-term capital gain or as a return of capital).
General. Each Unit holder will be requested to provide the Unit
holder's taxpayer identification number to the Trustee and to
certify that the Unit holder has not been notified that payments
to the Unit holder are subject to back-up withholding. If the
proper taxpayer identification number and appropriate certification
are not provided when requested, distributions by the Trust to
such Unit holder (including amounts received upon the redemption
of Units) will be subject to back-up withholding. Distributions
by the Trust will generally be subject to United States income
taxation and withholding in the case of Units held by non-resident
alien individuals, foreign corporations or other non-United States
persons. Such persons should consult their tax advisers.
Why are Investments in the Trust Suitable for Retirement Plans?
Units of the Trust may be well suited for purchase by Individual
Retirement Accounts, Keogh Plans, pension funds and other tax-deferred
retirement plans. Generally, the Federal income tax relating to
capital gains and income received in each of the foregoing plans
is deferred until distributions are received. Distributions from
such plans are generally treated as ordinary income but may, in
some cases, be eligible for special averaging or tax-deferred
rollover treatment. Investors considering participation in any
such plan should review specific tax laws related thereto and
should consult their attorneys or tax advisers with respect
Page 7
to the establishment and maintenance of any such plan. Such plans
are offered by brokerage firms and other financial institutions.
Fees and charges with respect to such plans may vary.
PORTFOLIO
What are Equity Securities?
The Trust consists of different issues of Equity Securities issued
by public utility companies which are listed on a national securities
exchange or the NASDAQ National Market System or traded in the
over-the-counter market. The utility industry is recognized for
its relative safety, stability and as a high-yielding sector of
the equity market. As such, the Trust may be a suitable investment
for investors seeking a fixed portfolio with a known maturity,
bond buyers needing a conservative equity investment and utility
stock buyers desiring greater diversification and frequent monthly
income. See "What are the Equity Securities Selected for Utilities
Income Trust of America, Series 1?" for a general description
of the companies.
An investment in Units of the Trust should be made with an understanding
of the characteristics of the public utility industry and the
risks which such an investment may entail. General problems of
the public utility industry include the difficulty in obtaining
an adequate return on invested capital despite frequent increases
in rates which have been granted by the public service commissions
having jurisdiction, the difficulty in financing large construction
programs during an inflationary period, the restrictions on operations
and increased cost and delays attributable to environmental and
other regulatory considerations, the difficulty to the capital
markets in absorbing utility debt and equity securities, the difficulty
in obtaining fuel for electric generation at reasonable prices,
and the effects of energy conservation. There is no assurance
that such commissions will in the future grant rate increases
or that any such increases will be adequate to cover operating
and other expenses and debt service requirements. All of the public
utilities which are issuers of the Equity Securities in the portfolio
have been experiencing many of these problems in varying degrees.
In addition, federal, state and municipal governmental authorities
may from time to time review existing, and impose additional,
regulations governing the licensing, construction and operation
of nuclear power plants, which may adversely affect the ability
of the issuers of certain of the Equity Securities in the Trust's
portfolio to make dividend payments on their Equity Securities.
Utilities are generally subject to extensive regulation by state
utility commissions which, for example, establish the rates which
may be charged and the appropriate rate of return on an approved
asset base, which must be approved by the state commissions. Certain
utilities have had difficulty from time to time in persuading
regulators, who are subject to political pressures, to grant rate
increases necessary to maintain an adequate return on investment
and voters in many states have the ability to impose limits on
rate adjustments (for example, by initiative or referendum). Any
unexpected limitations could negatively affect the profitability
of utilities whose budgets are planned far in advance. In addition,
gas pipeline and distribution companies have had difficulties
in adjusting to short and surplus energy supplies, enforcing or
being required to comply with long-term contracts and avoiding
litigation from their customers, on the one hand, or suppliers,
on the other.
Certain of the issuers of the Equity Securities in the Trust may
own or operate nuclear generating facilities. Governmental authorities
may from time to time review existing, and impose additional,
requirements governing the licensing, construction and operation
of nuclear power plants. Nuclear generating projects in the electric
utility industry have experienced substantial cost increases,
construction delays and licensing difficulties. These have been
caused by various factors, including inflation, high financing
costs, required design changes and rework, allegedly faulty construction,
objections by groups and governmental officials, limits on the
ability to finance, reduced forecasts of energy requirements and
economic conditions. This experience indicates that the risk of
significant cost increases, delays and licensing difficulties
remains present until completion and achievement of commercial
operation of any nuclear project. Also, nuclear generating units
in service have experienced unplanned outages or extensions of
scheduled outages due to equipment problems or new regulatory
requirements sometimes followed
Page 8
by a significant delay in obtaining regulatory approval to return
to service. A major accident at a nuclear plant anywhere, such
as the accident at a plant in Chernobyl, could cause the imposition
of limits or prohibitions on the operation, construction or licensing
of nuclear units in the United States.
In view of the uncertainties discussed above, there can be no
assurance that any company's share of the full cost of nuclear
units under construction ultimately will be recovered in rates
or of the extent to which a company could earn an adequate return
on its investment in such units. The likelihood of a significantly
adverse event occurring in any of the areas of concern described
above varies, as does the potential severity of any adverse impact.
It should be recognized, however, that one or more of such adverse
events could occur and individually or collectively could have
a material adverse impact on a company's financial condition,
or the results of its operations or its ability to make interest
and principal payments on its outstanding debt or to pay dividends.
Other general problems of the gas, water, telephone and electric
utility industries (including state and local joint action power
agencies) include difficulty in obtaining timely and adequate
rate increases, difficulty in financing large construction programs
to provide new or replacement facilities during an inflationary
period, rising costs of rail transportation to transport fossil
fuels, the uncertainty of transmission service costs for both
interstate and intrastate transactions, changes in tax laws which
adversely affect a utility's ability to operate profitably, increased
competition in service costs, recent reductions in estimates of
future demand for electricity and gas in certain areas of the
country, restrictions on operations and increased cost and delays
attributable to environmental considerations, uncertain availability
and increased cost of capital, unavailability of fuel for electric
generation at reasonable prices, including the steady rise in
fuel costs and the costs associated with conversion to alternate
fuel sources such as coal, availability and cost of natural gas
for resale, technical and cost factors and other problems associated
with construction, licensing, regulation and operation of nuclear
facilities for electric generation, including among other considerations
the problems associated with the use of radioactive materials
and the disposal of radioactive wastes, and the effects of energy
conservation. Each of the problems referred to could adversely
affect the ability of the issuers of any Equity Securities in
the Trust to make dividend payments.
The average common stock dividend yield of utilities has exceeded
that of the S&P 500 stocks. There can be no assurance that the
historical investment performance for any industry (including
the public utilities industry) is indicative of future performance.
However, during periods of lower interest rates, dividend yields
on utility common stocks are often attractive. In times of both
economic weakness and lower interest rates, utility stocks have
outperformed most other equity issues in terms of price and dividend
stability. However, during periods of rising interest rates, the
prices of utility common stocks typically decline.
The Trust consists of such of the Equity Securities listed under
"Schedule of Investments" as may continue to be held from time
to time in the Trust and any additional Equity Securities acquired
and held by the Trust pursuant to the provisions of the Trust
Agreement together with cash held in the Income and Capital Accounts.
Neither the Sponsor nor the Trustee shall be liable in any way
for any failure in any of the Equity Securities. However, should
any contract for the purchase of any of the Equity Securities
initially deposited hereunder fail, the Sponsor will, unless substantially
all of the moneys held in the Trust to cover such purchase are
reinvested in substitute Equity Securities in accordance with
the Trust Agreement, refund the cash and sales charge attributable
to such failed contract to all Unit holders on the next distribution
date.
Because certain of the Equity Securities from time to time may
be sold under certain circumstances described herein, and because
the proceeds from such events will in most cases be distributed
to Unit holders and will not be reinvested, no assurance can be
given that the Trust will retain for any length of time its present
size and composition. Although the Portfolio is not managed, the
Sponsor may instruct the Trustee to sell Equity Securities under
certain limited circumstances. Pursuant to the Indenture and with
limited exceptions, the Trustee may sell any securities or other
property acquired in exchange for Equity Securities such as those
acquired in connection with a merger or other transaction. If
offered such new or exchanged
Page 9
securities or property, the Trustee shall reject the offer. However,
in the event such securities or property are nonetheless acquired
by the Trust, they may be accepted for deposit in the Trust and
either sold by the Trustee or held in the Trust pursuant to the
direction of the Sponsor (who may rely on the advice of the Portfolio
Supervisor). See "How May Equity Securities be Removed from the
Trust?" Equity Securities, however, will not be sold by the Trust
to take advantage of market fluctuations or changes in anticipated
rates of appreciation or depreciation.
Whether or not the Equity Securities are listed on a national
securities exchange, the principal trading market for the Equity
Securities may be in the over-the-counter market. As a result,
the existence of a liquid trading market for the Equity Securities
may depend on whether dealers will make a market in the Equity
Securities. There can be no assurance that a market will be made
for any of the Equity Securities, that any market for the Equity
Securities will be maintained or of the liquidity of the Equity
Securities in any markets made. The recent investigation by the
Securities and Exchange Commission of illegal insider trading
in connection with corporate takeovers, and possible congressional
inquiries and legislation relating to this investigation, may
adversely affect the ability of certain dealers to remain market
makers. In addition, the Trust may be restricted under the Investment
Company Act of 1940 from selling Equity Securities to the Sponsor.
The price at which the Equity Securities may be sold to meet redemptions,
and the value of the Trust, will be adversely affected if trading
markets for the Equity Securities are limited or absent.
An investment in Units should be made with an understanding of
the risks which an investment in common stocks entails, including
the risk that the financial condition of the issuers of the Equity
Securities or the general condition of the common stock market
may worsen and the value of the Equity Securities and therefore
the value of the Units may decline. Common stocks are especially
susceptible to general stock market movements and to volatile
increases and decreases of value as market confidence in and perceptions
of the issuers change. These perceptions are based on unpredictable
factors including expectations regarding government, economic,
monetary and fiscal policies, inflation and interest rates, economic
expansion or contraction, and global or regional political, economic
or banking crises. Shareholders of common stocks have rights to
receive payments from the issuers of those common stocks that
are generally subordinate to those of creditors of, or holders
of debt obligations or preferred stocks of, such issuers. Shareholders
of common stocks of the type held by the Trust have a right to
receive dividends only when and if, and in the amounts, declared
by the issuer's board of directors and have a right to participate
in amounts available for distribution by the issuer only after
all other claims on the issuer have been paid or provided for.
Common stocks do not represent an obligation of the issuer and,
therefore, do not offer any assurance of income or provide the
same degree of protection of capital as do debt securities. The
issuance of additional debt securities or preferred stock will
create prior claims for payment of principal, interest and dividends
which could adversely affect the ability and inclination of the
issuer to declare or pay dividends on its common stock or the
rights of holders of common stock with respect to assets of the
issuer upon liquidation or bankruptcy. The value of common stocks
is subject to market fluctuations for as long as the common stocks
remain outstanding, and thus the value of the Equity Securities
in the Portfolio may be expected to fluctuate over the life of
the Trust to values higher or lower than those prevailing on the
Initial Date of Deposit.
Holders of common stocks incur more risk than holders of preferred
stocks and debt obligations because common stockholders, as owners
of the entity, have generally inferior rights to receive payments
from the issuer in comparison with the rights of creditors of,
or holders of debt obligations or preferred stocks issued by,
the issuer. Cumulative preferred stock dividends must be paid
before common stock dividends and any cumulative preferred stock
dividend omitted is added to future dividends payable to the holders
of cumulative preferred stock. Preferred stockholders are also
generally entitled to rights on liquidation which are senior to
those of common stockholders.
Unit holders will be unable to dispose of any of the Equity Securities
in the Portfolio, as such, and will not be able to vote the Equity
Securities. As the holder of the Equity Securities, the Trustee
will have the right to vote all of the voting stocks in the Trust
and will vote such stocks in accordance with the instructions
of the Sponsor.
Page 10
What are the Equity Securities Selected for Utilities Income Trust
of America, Series 1?
The Utilities Trust is designed to take advantage of the above-average
consistent earnings and dividend growth associated with the utility
industry. The Trust has been created to capitalize on the fact
that many utility companies have generated strong cash flows,
giving them the ability to increase dividend payments, and in
fact, the companies chosen for the portfolio have had at least
ten increases in the dividend rate over the last 10 years. Additionally,
the companies selected for the Trust have had positive relative
performance over the last 20 years in comparison to the S&P 500.
The Sponsor believes that the shares of these companies are currently
"undervalued," based on cash flows of the companies and acceptable
qualitative factors including fuel mix, management performance
and overall regulatory environment. For additional considerations
see "What are Equity Securities?"
Allegheny Power System, Inc., headquartered in New York, New York,
is an electric utility holding company. Through its operating
subsidiaries, the company distributes electricity in Maryland,
Ohio, Pennsylvania, Virginia, and West Virginia.
Atlantic Energy, Inc., headquartered in Pleasantville, New Jersey,
generates, transmits, distributes and sells electric energy in
southern New Jersey. The company has also formed Atlantic Generation
to explore, develop and own alternative energy, generation and
cogeneration projects.
Baltimore Gas and Electric Company, headquartered in Baltimore,
Maryland, produces, purchases and sells electricity, and purchases,
transports and sells natural gas within the State of Maryland.
In addition, through its subsidiary, the company coordinates other
businesses including energy and environmental projects, real estate,
senior living and health care and investment and financial services.
Central & South West Corporation, headquartered in Dallas, Texas,
is a public utility holding company. Its subsidiaries purchase,
generate, transmit, distribute and sell electricity, providing
service in several midwestern and southern states. The company
also owns an intrastate natural gas pipeline.
Consolidated Edison Company of New York, Inc. supplies electric
service to all of New York City and most of Westchester County,
New York. The company also supplies gas to Manhattan, the Bronx
and Queens of New York and provides steam in the Manhattan area.
The company's operations are headquartered in New York, New York.
Dominion Resources, Inc., headquartered in Richmond, Virginia,
is a utility holding company for Virginia Electric & Power Company,
which provides electricity to residential, commercial and industrial
customers in Virginia and North Carolina. Dominion Resources,
Inc. also acquires and develops natural gas and oil reserves and
engages in real estate development and investment management.
Duke Power Company, headquartered in Charlotte, North Carolina,
generates, transmits, distributes and sells electric energy in
the Piedmont sections of North Carolina and South Carolina. Duke
Power Company also supplies electricity to other rural electric
cooperatives and private utilities.
Empire District Electric Company, headquartered in Joplin, Missouri,
generates, purchases, transmits, distributes and wholesales electricity
to southwestern Missouri, southeastern Kansas, northeastern Oklahoma
and northwestern Arkansas.
Energen Corporation, headquartered in Birmingham, Alabama, is
a diversified energy corporation. Through its two main subsidiaries,
Alagasco and Taurus, the company provides natural gas distribution
and oil and gas exploration and production. Energen Corporation
also provides propane sales, intrastate gas gathering and transport
services and high temperature combustion technology.
FPL Group, Inc., the holding company for Florida Power and Light
Company, generates, transmits and distributes electric energy.
Florida Power and Light Company supplies electric energy throughout
the eastern and lower west coasts of Florida. FPL Group, Inc.
derives revenues from both residential and commercial customers
and is based in Juno Beach, Florida.
Florida Progress Corporation, headquartered in St. Petersburg,
Florida, is the holding company for Florida Power Corporation,
an electric utility. Florida Power Corporation provides electric
utility services to the Gulf Coast and approximately half of Florida's
counties. The company is also involved in commercial finance and
life insurance, leveraged leasing, and coal mining.
Page 11
Hawaiian Electric Industries, Inc., headquartered in Honolulu,
Hawaii, is a diversified electric utility holding company. Principal
subsidiaries include Hawaiian Electric Co., which provides electricity
to a majority of the state population, and American Savings Bank.
New England Electric System provides electric service to areas
in Massachusetts, New Hampshire and Rhode Island through its subsidiaries.
In addition, the company's subsidiaries purchase, generate, transmit
and sell electric power in wholesale quantities, primarily to
its affiliates. Headquartered in Westborough, Massachusetts, the
company also owns an interest in domestic oil and gas exploration
and production.
New Jersey Resources Corporation, through its New Jersey Natural
Gas Company subsidiary, supplies natural gas to customers in Monmouth,
Morris, Middlesex and Ocean counties, New Jersey. The company
is headquartered in Wall, New Jersey. Other subsidiaries are involved
in oil and gas exploration in the United States and real estate
development in New Jersey.
Northern States Power Company, along with its subsidiaries, supplies
electricity and gas to retail customers in Minnesota, North Dakota,
South Dakota, Wisconsin and Michigan. Residential sales constitute
the majority of the total revenue. The company's headquarters
are located in Minneapolis, Minnesota.
Northwest Natural Gas Company, headquartered in Portland, Oregon,
distributes natural gas to customers in western Oregon and southwestern
Washington, including the metropolitan Portland area. Through
its subsidiaries, the company also explores for, develops and
produces natural gas; purchases, markets and arranges for the
transportation of gas in the western United States and develops
real estate in the Portland area.
Northwestern Public Service Company supplies electricity to customers
in eastern South Dakota and distributes natural gas in South Dakota
and parts of Nebraska. The company's operations are based in Huron,
South Dakota.
Orange and Rockland Utilities, Inc., with its wholly-owned subsidiaries,
supplies electric and gas to parts of New York City, northern
New Jersey and northeastern Pennsylvania. The company is headquartered
in Pearl River, New York. In addition to producing energy at its
generating facilities, the company purchases both capacity and
energy from other utilities when needed or when costs of production
exceed the purchase price.
Potomac Electric Power Company, based in Washington, D.C., distributes
and sells electricity to the Washington metropolitan area and
adjoining parts of Maryland. The company serves residential, commercial
and Federal government customers.
SCEcorp, headquartered in Rosemead, California, is a holding company
for Southern California Edison and the Mission Group. Southern
California Edison provides electric energy to residential, public
and private customers in central and southern California. The
Mission Group develops energy projects, performs engineering and
construction, invests in real estate and makes investments in
generating facilities.
Southern Indiana Gas & Electric Company, headquartered in Evansville,
Indiana, is an operating public utility engaged in the generation,
transmission, distribution and sale of electricity and natural
gas to customers in southwestern Indiana, including Evansville,
other cities, towns, communities and adjacent rural areas.
Wisconsin Energy Corporation, headquartered in Milwaukee, Wisconsin,
is a holding company with subsidiaries primarily engaged in the
generation, distribution and sale of electricity and the distribution
and sale of natural gas in eastern Wisconsin and the Upper Peninsula
of Michigan.
WPL Holdings, Inc., headquartered in Madison, Wisconsin, is the
holding company for Wisconsin Power & Light Company which provides
electricity, natural gas and water at retail to cities, villages
and towns throughout south central Wisconsin. The company also
has operations which include real estate development and environmental,
energy and utility consulting services.
Page 12
Wisconsin Public Service Corporation furnishes electricity and
natural gas to northeastern Wisconsin. Headquartered in Green
Bay, Wisconsin, the company also wholesales electricity to several
municipal utilities.
What are Some Additional Considerations for Investors?
Investors should be aware of certain other considerations before
making a decision to invest in the Trust.
The value of the Equity Securities will fluctuate over the life
of the Trust and may be more or less than the price at which they
were deposited in the Trust. The Equity Securities may appreciate
or depreciate in value (or pay dividends) depending on the full
range of economic and market influences affecting these securities.
The Sponsor and the Trustee shall not be liable in any way for
any default, failure or defect in any Security. In the event of
a notice that any Equity Security will not be delivered ("Failed
Contract Obligations") to the Trust, the Sponsor is authorized
under the Indenture to direct the Trustee to acquire other Equity
Securities ("Replacement Securities"). Any Replacement Security
will be identical to those which were the subject of the failed
contract. The Replacement Securities must be purchased within
20 days after delivery of the notice of a failed contract and
the purchase price may not exceed the amount of funds reserved
for the purchase of the Failed Contract Obligations.
If the right of limited substitution described in the preceding
paragraphs is not utilized to acquire Replacement Securities in
the event of a failed contract, the Sponsor will refund the sales
charge attributable to such Failed Contract Obligations to all
Unit holders of the Trust and the Trustee will distribute the
principal attributable to such Failed Contract Obligations not
more than 120 days after the date on which the Trustee received
a notice from the Sponsor that a Replacement Security would not
be deposited in the Trust. In addition, Unit holders should be
aware that, at the time of receipt of such principal, they may
not be able to reinvest such proceeds in other securities at a
yield equal to or in excess of the yield which such proceeds would
have earned for Unit holders of the Trust.
The Indenture also authorizes the Sponsor to increase the size
of the Trust and the number of Units thereof by the deposit of
additional Equity Securities in the Trust and the issuance of
a corresponding number of additional Units.
The Trust consists of the Equity Securities listed under "Schedule
of Investments" (or contracts to purchase such Securities) as
may continue to be held from time to time in the Trust and any
additional Equity Securities acquired and held by the Trust pursuant
to the provisions of the Indenture (including provisions with
respect to deposits into the Trust of Equity Securities in connection
with the issuance of additional Units).
Once all of the Equity Securities in the Trust are acquired, the
Trustee will have no power to vary the investments of the Trust,
i.e., the Trustee will have no managerial power to take advantage
of market variations to improve a Unit holder's investment, but
may dispose of Equity Securities only under limited circumstances.
See "How May Equity Securities be Removed from the Trust?"
To the best of the Sponsor's knowledge, there is no litigation
pending as of the Initial Date of Deposit in respect of any Equity
Security which might reasonably be expected to have a material
adverse effect on the Trust. At any time after the Initial Date
of Deposit, litigation may be instituted on a variety of grounds
with respect to the Equity Securities. The Sponsor is unable to
predict whether any such litigation will be instituted, or if
instituted, whether such litigation might have a material adverse
effect on the Trust.
PUBLIC OFFERING
How is the Public Offering Price Determined?
Units are offered at the Public Offering Price. During the initial
offering period, the Public Offering Price is based on the aggregate
underlying value of the Equity Securities in the Trust, plus or
minus cash, if any, in the Income and Capital Accounts of the
Trust, plus a sales charge of 4.9% (equivalent to 5.152% of the
net amount
Page 13
invested) subject to reduction beginning , 1995, divided
by the amount of Units of the Trust outstanding.
During the initial offering period, the Sponsor's Repurchase Price
is based on the aggregate underlying value of the Equity Securities
in the Trust, plus or minus cash, if any, in the Income and Capital
Accounts of the Trust divided by the number of Units of the Trust
outstanding. For secondary market sales after the completion of
the initial offering period, the Public Offering Price is also
based on the aggregate underlying value of the Equity Securities
in the Trust, plus or minus cash, if any, in the Income and Capital
Accounts of the Trust, plus a maximum sales charge of 4.9% of
the Public Offering Price (equivalent to 5.152% of the net amount
invested) divided by the number of outstanding Units of the Trust.
The minimum purchase of the Trust is $1,000. The applicable sales
charge for both primary and secondary market sales is reduced
by a discount as indicated below for volume purchases:
<TABLE>
<CAPTION>
Primary and Secondary
Percent of Percent of
Offering Net Amount
Number of Units Price Invested
________________ ________ ________
<S> <C> <C>
5,000 but less than 10,000 0.25% 0.2506%
10,000 but less than 25,000 0.50% 0.5025%
25,000 but less than 50,000 1.00% 1.0101%
50,000 or more 2.00% 2.0408%
</TABLE>
Any such reduced sales charge shall be the responsibility of the
selling Underwriter or dealer. The reduced sales charge structure
will apply on all purchases of Units in the Trust by the same
person on any one day from any one underwriter or dealer. Additionally,
Units purchased in the name of the spouse of a purchaser or in
the name of a child of such purchaser under 21 years of age will
be deemed, for the purposes of calculating the applicable sales
charge, to be additional purchases by the purchaser. The reduced
sales charges will also be applicable to a trustee or other fiduciary
purchasing securities for a single trust estate or single fiduciary
account. The purchaser must inform the Underwriter or dealer of
any such combined purchase prior to the sale in order to obtain
the indicated discount. In addition, with respect to the employees,
officers and directors (including their immediate family members,
defined as spouses, children, grandchildren, parents, grandparents,
mothers-in-law, fathers-in-law, sons-in-law and daughters-in-law,
and trustees, custodians or fiduciaries for the benefit of such
persons) of the Sponsor and the Underwriter and their subsidiaries,
the sales charge is reduced by 2.0% of the Public Offering Price
for purchases of Units during the primary and secondary public
offering periods.
Had the Units of the Trust been available for sale on the business
day prior to the Initial Date of Deposit, the Public Offering
Price would have been as indicated in "Summary of Essential Information."
The Public Offering Price of Units on the date of the prospectus
or during the initial offering period may vary from the amount
stated under "Summary of Essential Information" in accordance
with fluctuations in the prices of the underlying Equity Securities.
During the initial offering period, the aggregate value of the
Units of the Trust shall be determined on the basis of the aggregate
underlying value of the Equity Securities therein plus or minus
cash, if any, in the Income and Capital Accounts of the Trust.
The aggregate underlying value of the Equity Securities will be
determined in the following manner: if the Equity Securities are
listed on a national securities exchange or the NASDAQ National
Market System, this evaluation is generally based on the closing
sale prices on that exchange or that system (unless it is determined
that these prices are inappropriate as a basis for valuation)
or, if there is no closing sale price on that exchange or system,
at the closing ask prices. If the Equity Securities are not so
listed or, if so listed and the principal market therefor is other
than on the exchange, the evaluation shall generally be based
on the current ask prices on the over-the-counter market (unless
it is determined that these prices are inappropriate as a basis
for evaluation). If current ask prices are unavailable, the evaluation
is generally determined (a) on the basis of current ask prices
for comparable securities, (b) by appraising the value of the
Equity Securities on the ask side of the market or (c) by any
combination of the above.
Page 14
After the completion of the initial offering period, the secondary
market Public Offering Price will be equal to the aggregate underlying
value of the Equity Securities therein, plus or minus cash, if
any, in the Income and Capital Accounts of the Trust plus the
applicable sales charge.
Although payment is normally made five business days following
the order for purchase, payment may be made prior thereto. Cash,
if any, made available to the Sponsor prior to the date of settlement
for the purchase of Units may be used in the Sponsor's business
and may be deemed to be a benefit to the Sponsor, subject to the
limitations of the Securities Exchange Act of 1934. Delivery of
Certificates representing Units so ordered will be made five business
days following such order or shortly thereafter. See "Rights of
Unit Holders-How may Units be Redeemed?" for information regarding
the ability to redeem Units ordered for purchase.
How are Units Distributed?
During the initial offering period (i) for Units issued on the
Initial Date of Deposit and (ii) for additional Units issued after
such date as additional Equity Securities are deposited by the
Sponsor, Units will be distributed to the public at the then current
Public Offering Price. The initial offering period may be up to
approximately 180 days. During such period, the Sponsor may deposit
additional Equity Securities in the Trust and create additional
Units. Units reacquired by the Sponsor during the initial offering
period (at prices based upon the aggregate underlying value of
the Equity Securities in the Trust plus or minus a pro rata share
of cash, if any in the Income and Capital Accounts of the Trust)
may be resold at the then current Public Offering Price. Upon
the termination of the initial offering period, unsold Units created
or reacquired during the initial offering period will be sold
or resold at the then current Public Offering Price.
Upon completion of the initial offering, Units repurchased in
the secondary market (see "Will There be a Secondary Market?")
may be offered by this prospectus at the secondary market public
offering price determined in the manner described above.
It is the intention of the Sponsor to qualify Units of the Trust
for sale in a number of states. Sales initially will be made to
dealers and others at prices which represent a concession or agency
commission of 3.2% of the Public Offering Price, and, for secondary
market sales, 3.2% of the Public Offering Price (or 65% of the
then current maximum sales charge after , 1995). Effective
on each March 1, commencing , 1995, such sales charge
will be reduced by 1/2 of 1% to a minimum sales charge of 2.9%.
However, resales of Units of the Trust by such dealers and others
to the public will be made at the Public Offering Price described
in the prospectus. The Sponsor reserves the right to change the
amount of the concession or agency commission from time to time.
Certain commercial banks may be making Units of the Trust available
to their customers on an agency basis. A portion of the sales
charge paid by these customers is retained by or remitted to the
banks in the amounts indicated in the fourth preceding sentence.
Under the Glass-Steagall Act, banks are prohibited from underwriting
Trust Units; however, the Glass-Steagall Act does permit certain
agency transactions and the banking regulators have not indicated
that these particular agency transactions are not permitted under
such Act. In Texas and in certain other states, any banks making
Units available must be registered as broker/dealers under state
law.
Any broker/dealer or bank will receive additional concessions
for purchases of $250,000 or more made from the Sponsor on the
Initial Date of Deposit resulting in total concession of 3.6%
(the applicable concession will be allotted to broker/dealers
or banks who purchase Units from the Sponsor only on the Initial
Date of Deposit of a given Trust).
What are the Sponsor's Profits?
The Underwriter of the Trust will receive a gross sales commission
equal to 4.9% of the Public Offering Price of the Units (equivalent
to 5.152% of the net amount invested), less any reduced sales
charge for quantity purchases as described under "Public Offering-How
is the Public Offering Price Determined?" See "Underwriting" for
information regarding the receipt of the excess gross sales commissions
by the Sponsor from the other Underwriter and additional concessions
available to Underwriters, dealers and others. In addition, the
Sponsor and the Underwriter may be considered to have realized
a profit or to have sustained a loss, as the case may be, in the
amount of any difference between the cost of the Equity Securities
Page 15
to the Trust (which is based on the Evaluator's determination
of the aggregate offering price of the underlying Equity Securities
of such Trust on the Initial Date of Deposit as well as subsequent
deposits) and the cost of such Equity Securities to the Sponsor.
See "Underwriting" and Note (2) of "Schedule of Investments."
During the initial offering period, the Underwriter also may realize
profits or sustain losses as a result of fluctuations after the
Date of Deposit in the Public Offering Price received by the Underwriter
upon the sale of Units.
In maintaining a market for the Units, the Sponsor will also realize
profits or sustain losses in the amount of any difference between
the price at which Units are purchased and the price at which
Units are resold (which price includes a sales charge of 4.9%
subject to reduction beginning , 1995) or redeemed. The
secondary market public offering price of Units may be greater
or less than the cost of such Units to the Sponsor.
Will There be a Secondary Market?
After the initial offering period, although it is not obligated
to do so, the Sponsor intends to, and the Underwriter may, maintain
a market for the Units and continuously offer to purchase Units
at prices, subject to change at any time, based upon the aggregate
underlying value of the Equity Securities in the Trust plus or
minus cash, if any, in the Income and Capital Accounts of the
Trust. All expenses incurred in maintaining a secondary market,
other than the fees of the Evaluator and the costs of the Trustee
in transferring and recording the ownership of Units, will be
borne by the Sponsor. If the supply of Units exceeds demand, or
for some other business reason, the Sponsor may discontinue purchases
of Units at such prices. IF A UNIT HOLDER WISHES TO DISPOSE OF
HIS UNITS, HE SHOULD INQUIRE OF THE SPONSOR AS TO CURRENT MARKET
PRICES PRIOR TO MAKING A TENDER FOR REDEMPTION TO THE TRUSTEE.
RIGHTS OF UNIT HOLDERS
How is Evidence of Ownership Issued and Transferred?
The Trustee is authorized to treat as the record owner of Units
that person who is registered as such owner on the books of the
Trustee. Ownership of Units may be evidenced by registered certificates
executed by the Trustee and the Sponsor. Delivery of certificates
representing Units ordered for purchase is normally made five
business days following such order or shortly thereafter. Certificates
are transferable by presentation and surrender to the Trustee
properly endorsed or accompanied by a written instrument or instruments
of transfer. Certificates to be redeemed must be properly endorsed
or accompanied by a written instrument or instruments of transfer.
A Unit holder must sign exactly as his name appears on the face
of the certificate with signature guaranteed by a participant
in the Securities Transfer Agents Medallion Program ("STAMP")
or such other signature guaranty program in addition to, or in
substitution for, STAMP, as may be accepted by the Trustee. In
certain instances the Trustee may require additional documents
such as, but not limited to, trust instruments, certificates of
death, appointments as executor or administrator or certificates
of corporate authority. Record ownership may occur before settlement.
Certificates will be issued in fully registered form, transferable
only on the books of the Trustee in denominations of one Unit
or any multiple thereof, numbered serially for purposes of identification.
Unit holders may elect to hold their Units in uncertificated form.
The Trustee will maintain an account for each such Unit holder
and will credit each such account with the number of Units purchased
by that Unit holder. Within two business days of the issuance
or transfer of Units held in uncertificated form, the Trustee
will send to the registered owner of Units a written initial transaction
statement containing a description of the Trust; the number of
Units issued or transferred; the name, address and taxpayer identification
number, if any, of the new registered owner; a notation of any
liens and restrictions of the issuer and any adverse claims to
which such Units are or may be subject or a statement that there
are no such liens, restrictions or adverse claims; and the date
the transfer was registered. Uncertificated Units are transferable
through the same procedures applicable to Units evidenced by certificates
(described above), except that no certificate need be presented
to the Trustee and no certificate will be issued upon the transfer
unless requested by the Unit holder. A Unit holder may at any
time request the Trustee to issue certificates for Units.
Page 16
Although no such charge is now made or contemplated, a Unit holder
may be required to pay $2.00 to the Trustee per certificate reissued
or transferred and to pay any governmental charge that may be
imposed in connection with each such transfer or exchange. For
new certificates issued to replace destroyed, stolen or lost certificates,
the Unit holder may be required to furnish indemnity satisfactory
to the Trustee and pay such expenses as the Trustee may incur.
Mutilated certificates must be surrendered to the Trustee for
replacement.
How are Income and Capital Distributed?
The Trustee will distribute an amount substantially equal to the
Unit holder's pro rata share of the balance of the Income Account
calculated on the basis of one-twelfth of the estimated annual
dividend distributions in the Income Account after deducting estimated
expenses to Unit holders of record on the preceding Income Record
Date. See "Summary of Essential Information." Because dividends
are not received by the Trust at a constant rate throughout the
year, such distributions to Unit holders may be more or less than
the amount credited to the Income Account as of the Record Date.
For the purpose of minimizing fluctuation in the distributions
from the Income Account, the Trustee is authorized to advance
such amounts as may be necessary to provide income distributions
of approximately equal amounts. The Trustee shall be reimbursed
without interest, for any such advances from funds in the Income
Account at the ensuing Record Date. Persons who purchase Units
will commence receiving distributions only after such person becomes
a record owner. Notification to the Trustee of the transfer of
Units is the responsibility of the purchaser, but in the normal
course of business such notice is provided by the selling broker-dealer.
Proceeds received on the sale of any Equity Securities in the
Trust, to the extent not used to meet redemptions of Units or
pay expenses, will, however, be distributed on the last day of
each month to Unit holders of record on the fifteenth day of such
month if the amount available for distribution equals at least
$1.00 per 100 Units. The Trustee is not required to pay interest
on funds held in the Capital Account of a Trust (but may itself
earn interest thereon and therefore benefit from the use of such
funds). Notwithstanding, distributions of funds in the Capital
Account, if any, will be made on the last day of each December
to Unit holders of record as of December 20. See "What is the
Federal Tax Status of Unit Holders?"
Under regulations issued by the Internal Revenue Service, the
Trustee is required to withhold a specified percentage of any
distribution made by the Trust if the Trustee has not been furnished
the Unit holder's tax identification number in the manner required
by such regulations. Any amount so withheld is transmitted to
the Internal Revenue Service and may be recovered by the Unit
holder only when filing a tax return. Under normal circumstances
the Trustee obtains the Unit holder's tax identification number
from the selling broker. However, a Unit holder should examine
his or her statements from the Trustee to make sure that the Trustee
has been provided a certified tax identification number in order
to avoid this possible "back-up withholding." In the event the
Trustee has not been previously provided such number, one should
be provided as soon as possible.
Within a reasonable time after the Trust is terminated, each Unit
holder will, upon surrender of his Units for redemption, receive:
(i) the pro rata share of the amounts realized upon the disposition
of Equity Securities and (ii) a pro rata share of any other assets
of the Trust, less expenses of the Trust.
The Trustee will credit to the Income Account of the Trust any
dividends received on the Equity Securities therein. All other
receipts (e.g. return of principal, capital gains, etc.) are credited
to the Capital Account of the Trust.
The Trustee may establish reserves (the "Reserve Account") within
the Trust for state and local taxes, if any, and any governmental
charges payable out of the Trust.
Distribution Reinvestment Option. Unit holders may elect to have
distributions of income and/or capital on their Units automatically
reinvested into additional Units of the Trust (to the extent Units
may be lawfully offered for sale in the state in which the Unit
holder resides). Such additional Units will be held in uncertificated
form and maintained by the Trustee in an account established to
hold uncertificated Units for each such Unit holder as described
in "Rights of Unit Holders - How is Evidence of Ownership Issued
and Transferred?" To become a participant in the Distribution
Reinvestment Option a Unit holder must either notify
Page 17
his or her broker or agent, or file with the Trustee a written
notice of election at least ten days prior to the Record Date
for which the first distribution is to apply. A Unit holder's
election to participate in the reinvestment plan will apply to
all Units of the Trust owned by such Unit holder and such election
will remain in effect until changed by the Unit holder. Under
the reinvestment plan, the Trust will pay the Unit holder's distributions
to the Trustee which in turn will purchase for such Unit holder
full and fractional Units of the Trust without a sales charge
and will send such Unit holder a statement reflecting the reinvestment.
It should be remembered that even if distributions are reinvested,
they are still treated as distributions for income tax purposes.
Reinvestment plan distributions may be reinvested in Units already
held in inventory by the Sponsor or, in additional Units created
by the Sponsor, distributions may be reinvested in such additional
Units. If Units are unavailable in the Sponsor's inventory or
the Sponsor is unable to create additional Units, distributions
which would otherwise have been reinvested shall be paid in cash
to the Unit holder on the applicable Distribution Date.
What Reports will Unit Holders Receive?
The Trustee shall furnish Unit holders in connection with each
distribution a statement of the amount of income, if any, and
the amount of other receipts, if any, which are being distributed,
expressed in each case as a dollar amount per 100 Units. Within
a reasonable period of time after the end of each calendar year,
the Trustee shall furnish to each person who at any time during
the calendar year was a Unit holder of the Trust the following
information in reasonable detail: (1) a summary of transactions
in the Trust for such year; (2) any Equity Securities sold during
the year and the Equity Securities held at the end of such year
by the Trust; (3) the redemption price per 100 Units based upon
a computation thereof on the 31st day of December of such year
(or the last business day prior thereto); and (4) amounts of income
and capital distributed during such year.
In order to comply with Federal and state tax reporting requirements,
Unit holders will be furnished, upon request to the Trustee, evaluations
of the Securities in the Trust furnished to it by the Evaluator.
How May Units be Redeemed?
A Unit holder may redeem all or a portion of his Units by tender
to the Trustee at its corporate trust office in the City of New
York of the certificates representing the Units to be redeemed,
or in the case of uncertificated Units, delivery of a request
for redemption, duly endorsed or accompanied by proper instruments
of transfer with signature guaranteed as explained above (or by
providing satisfactory indemnity, as in connection with lost,
stolen or destroyed certificates), and payment of applicable governmental
charges, if any. No redemption fee will be charged. On the seventh
calendar day following such tender, or if the seventh calendar
day is not a business day, on the first business day prior thereto,
the Unit holder will be entitled to receive in cash an amount
for each Unit equal to the Redemption Price per Unit next computed
after receipt by the Trustee of such tender of Units. The "date
of tender" is deemed to be the date on which Units are received
by the Trustee, except that as regards Units received after 4:00
p.m. Eastern time, the date of tender is the next day on which
the New York Stock Exchange is open for trading and such Units
will be deemed to have been tendered to the Trustee on such day
for redemption at the redemption price computed on that day. Units
so redeemed shall be cancelled.
Under regulations issued by the Internal Revenue Service, the
Trustee is required to withhold a specified percentage of the
principal amount of a Unit redemption if the Trustee has not been
furnished the redeeming Unit holder's tax identification number
in the manner required by such regulations. Any amount so withheld
is transmitted to the Internal Revenue Service and may be recovered
by the Unit holder only when filing a tax return. Under normal
circumstances the Trustee obtains the Unit holder's tax identification
number from the selling broker. However, any time a Unit holder
elects to tender Units for redemption, such Unit holder should
make sure that the Trustee has been provided a certified tax identification
number in order to avoid this possible "back-up withholding."
In the event the Trustee has not been previously provided such
number, one must be provided at the time redemption is requested.
Page 18
Any amounts paid on redemption representing income shall be withdrawn
from the Income Account of the Trust to the extent that funds
are available for such purpose. All other amounts paid on redemption
shall be withdrawn from the Capital Account of the Trust.
The Trustee is empowered to sell Equity Securities of the Trust
in order to make funds available for redemption. To the extent
that Equity Securities are sold, the size and diversity of the
Trust will be reduced. Such sales may be required at a time when
Equity Securities would not otherwise be sold and might result
in lower prices than might otherwise be realized.
The Redemption Price per Unit (as well as the secondary market
Public Offering Price) will be determined on the basis of the
aggregate underlying value of the Equity Securities in the Trust
plus or minus cash, if any, in the Income and Capital Accounts
of the Trust. The Redemption Price per Unit is the pro rata share
of each Unit determined by the Trustee by adding: (1) the cash
on hand in the Trust other than cash deposited in the Trust to
purchase Equity Securities not applied to the purchase of such
Equity Securities;(2) the aggregate value of the Equity Securities
held in the Trust, as determined by the Evaluator on the basis
of the aggregate underlying value of the Equity Securities in
the Trust next computed; and (3) dividends receivable on the Equity
Securities trading ex-dividend as of the date of computation;
and deducting therefrom: (1) amounts representing any applicable
taxes or governmental charges payable out of the Trust; (2) any
amounts owing to the Trustee for its advances; (3) an amount representing
estimated accrued expenses of the Trust, including but not limited
to fees and expenses of the Trustee (including legal and auditing
fees), the Evaluator and supervisory fees, if any; (4) cash held
for distribution to Unit holders of record of the Trust as of
the business day prior to the evaluation being made; and (5) other
liabilities incurred by the Trust; and finally dividing the results
of such computation by the number of Units of the Trust outstanding
as of the date thereof.
The aggregate value of the Equity Securities will be determined
in the following manner: if the Equity Securities are listed on
a national securities exchange or the NASDAQ National Market System,
this evaluation is generally based on the closing sale prices
on that exchange or that system (unless it is determined that
these prices are inappropriate as a basis for valuation) or, if
there is no closing sale price on that exchange or system, at
the closing bid prices. If the Equity Securities are not so listed
or, if so listed and the principal market therefor is other than
on the exchange, the evaluation shall generally be based on the
current bid prices on the over-the-counter market (unless these
prices are inappropriate as a basis for evaluation). If current
bid prices are unavailable, the evaluation is generally determined
(a) on the basis of current bid prices for comparable securities,
(b) by appraising the value of the Equity Securities on the bid
side of the market or (c) by any combination of the above.
The right of redemption may be suspended and payment postponed
for any period during which the New York Stock Exchange is closed,
other than for customary weekend and holiday closings, or during
which the Securities and Exchange Commission determines that trading
on the New York Stock Exchange is restricted or any emergency
exists, as a result of which disposal or evaluation of the Securities
is not reasonably practicable, or for such other periods as the
Securities and Exchange Commission may by order permit. Under
certain extreme circumstances, the Sponsor may apply to the Securities
and Exchange Commission for an order permitting a full or partial
suspension of the right of Unit holders to redeem their Units.
The Trustee is not liable to any person in any way for any loss
or damage which may result from any such suspension or postponement.
How May Units be Purchased by the Sponsor?
The Trustee shall notify the Sponsor of any tender of Units for
redemption. If the Sponsor's bid in the secondary market at that
time equals or exceeds the Redemption Price per Unit, it may purchase
such Units by notifying the Trustee before 1:00 p.m. Eastern time
on the same business day and by making payment therefor to the
Unit holder not later than the day on which the Units would otherwise
have been redeemed by the Trustee. Units held by the Sponsor may
be tendered to the Trustee for redemption as any other Units.
In the event the Sponsor does not purchase Units, the Trustee
may sell Units tendered for redemption in the over-the-counter
Page 19
market, if any, as long as the amount to be received by the Unit
holder is equal to the amount he would have received on redemption
of the Units.
The offering price of any Units acquired by the Sponsor will be
in accord with the Public Offering Price described in the then
effective prospectus describing such Units. Any profit or loss
resulting from the resale or redemption of such Units will belong
to the Sponsor.
How May Equity Securities be Removed from the Trust?
The Portfolio of the Trust is not "managed" by the Sponsor or
the Trustee; their activities described herein are governed solely
by the provisions of the Indenture. The Indenture provides that
the Sponsor may (but need not) direct the Trustee to dispose of
an Equity Security in the event that an issuer defaults in the
payment of a dividend that has been declared, that any action
or proceeding has been instituted restraining the payment of dividends
or there exists any legal question or impediment affecting such
Equity Security, that the issuer of the Equity Security has breached
a covenant which would affect the payments of dividends, the credit
standing of the issuer or otherwise impair the sound investment
character of the Equity Security, that the issuer has defaulted
on the payment on any other of its outstanding obligations, that
the price of the Equity Security has declined to such an extent
or other such credit factors exist so that in the opinion of the
Sponsor, the retention of such Equity Securities would be detrimental
to the Trust. In addition, the Sponsor will instruct the Trustee
to dispose of certain Equity Securities and to take such further
action as may be needed from time to time to ensure that the Trust
continues to satisfy the qualifications of a regulated investment
company, including the requirements with respect to diversification
under Section 851 of the Internal Revenue Code. Pursuant to the
Indenture, the Sponsor is not authorized to direct the reinvestment
of the proceeds of the sale of Equity Securities in replacement
securities except in the event the sale is the direct result of
serious adverse credit factors affecting the issuer of the Equity
Security which, in the opinion of the Sponsor, would make the
retention of such Equity Security detrimental to the Trust. If
such factors exist, the Sponsor is authorized, but is not obligated,
to direct the reinvestment of the proceeds of the sale of such
Equity Securities in any other securities which meet the criteria
necessary for inclusion in the Trust on the Initial Date of Deposit
(including other Equity Securities already deposited in the Trust).
Pursuant to the Indenture and with limited exceptions, the Trustee
may sell any securities or other property acquired in exchange
for Equity Securities such as those acquired in connection with
a merger or other transaction. If offered such new or exchanged
securities or property, the Trustee shall reject the offer. However,
in the event such securities or property are nonetheless acquired
by the Trust, they may be accepted for deposit in the Trust and
either sold by the Trustee or held in the Trust pursuant to the
direction of the Sponsor (who may rely on the advice of the Portfolio
Supervisor). Therefore, except as stated under "Portfolio-What
are Some Additional Considerations for Investors?" for Failed
Obligations and as provided in this paragraph, the acquisition
by the Trust of any Securities or other property other than the
Equity Securities is prohibited. Proceeds from the sale of Equity
Securities (or any securities or other property received by the
Trust in exchange for Equity Securities), unless held for reinvestment
as herein provided, are credited to the Capital Account of the
Trust for distribution to Unit holders or to meet redemptions.
The Trustee may also sell Equity Securities designated by the
Sponsor, or if not so directed, in its own discretion, for the
purpose of redeeming Units of the Trust tendered for redemption
and the payment of expenses.
The Sponsor, in designating Equity Securities to be sold by the
Trustee, will generally make selections in order to maintain,
to the extent practicable, the proportionate relationship among
the number of shares of individual issues of Equity Securities.
To the extent this is not practicable, the composition and diversity
of the Equity Securities may be altered. In order to obtain the
best price for the Trust, it may be necessary for the Sponsor
to specify minimum amounts (generally 100 shares) in which blocks
of Equity Securities are to be sold.
Page 20
INFORMATION AS TO SPONSOR, TRUSTEE AND EVALUATOR
Who is the Sponsor?
Nike Securities L.P., the Sponsor, specializes in the underwriting,
trading and distribution of unit investment trusts and other securities.
Nike Securities L.P., an Illinois limited partnership formed in
1991, acts as Sponsor for successive series of The First Trust
Combined Series, The First Trust Special Situations Trust, The
First Trust Insured Corporate Trust, The First Trust of Insured
Municipal Bonds, The First Trust GNMA, Templeton Growth and Treasury
Trust, Templeton Foreign Fund & U.S. Treasury Securities Trust
and the Advantage Growth and Treasury Trust. First Trust introduced
the first insured unit investment trust in 1974 and to date more
than $8 billion in First Trust unit investment trusts have been
deposited. The Sponsor's employees include a team of professionals
with many years of experience in the unit investment trust industry.
The Sponsor is a member of the National Association of Securities
Dealers, Inc. and Securities Investor Protection Corporation and
has its principal offices at 1001 Warrenville Road, Lisle, Illinois
60532; telephone number (708) 241-4141. As of December 31, 1993,
the total partners' capital of Nike Securities L.P. was $12,743,032
(audited). (This paragraph relates only to the Sponsor and not
to the Trust or to any series thereof or to any other Underwriter.
The information is included herein only for the purpose of informing
investors as to the financial responsibility of the Sponsor and
its ability to carry out its contractual obligations. More detailed
financial information will be made available by the Sponsor upon
request.)
Who is the Trustee?
The Trustee is United States Trust Company of New York with its
principal place of business at 45 Wall Street, New York, New York
10005 and its unit investment trust offices at 770 Broadway, New
York, New York 10003. Unit holders who have questions regarding
the Trust may call the Customer Service Help Line at 1-800-682-7520.
The Trustee is a member of the New York Clearing House Association
and is subject to supervision and examination by the Comptroller
of the Currency, the Federal Deposit Insurance Corporation and
the Board of Governors of the Federal Reserve System.
The Trustee, whose duties are ministerial in nature, has not participated
in the selection of the Equity Securities. For information relating
to the responsibilities of the Trustee under the Indenture, reference
is made to the material set forth under "Rights of Unit Holders."
The Trustee and any successor trustee may resign by executing
an instrument in writing and filing the same with the Sponsor
and mailing a copy of a notice of resignation to all Unit holders.
Upon receipt of such notice, the Sponsor is obligated to appoint
a successor trustee promptly. If the Trustee becomes incapable
of acting or becomes bankrupt or its affairs are taken over by
public authorities, the Sponsor may remove the Trustee and appoint
a successor as provided in the Indenture. If upon resignation
of a trustee no successor has accepted the appointment within
30 days after notification, the retiring trustee may apply to
a court of competent jurisdiction for the appointment of a successor.
The resignation or removal of a trustee becomes effective only
when the successor trustee accepts its appointment as such or
when a court of competent jurisdiction appoints a successor trustee.
Any corporation into which a Trustee may be merged or with which
it may be consolidated, or any corporation resulting from any
merger or consolidation to which a Trustee shall be a party, shall
be the successor Trustee. The Trustee must be a banking corporation
organized under the laws of the United States or any State and
having at all times an aggregate capital, surplus and undivided
profits of not less than $5,000,000.
Limitations on Liabilities of Sponsor and Trustee
The Sponsor and the Trustee shall be under no liability to Unit
holders for taking any action or for refraining from taking any
action in good faith pursuant to the Indenture, or for errors
in judgment, but shall be liable only for their own willful misfeasance,
bad faith, gross negligence (ordinary negligence in the case of
the Trustee) or reckless disregard of their obligations and duties.
The Trustee shall not be liable for depreciation or loss incurred
by reason of the sale by the Trustee of any of the Equity Securities.
In the event of
Page 21
the failure of the Sponsor to act under the Indenture, the Trustee
may act thereunder and shall not be liable for any action taken
by it in good faith under the Indenture.
The Trustee shall not be liable for any taxes or other governmental
charges imposed upon or in respect of the Securities or upon the
interest thereon or upon it as Trustee under the Indenture or
upon or in respect of the Trust which the Trustee may be required
to pay under any present or future law of the United States of
America or of any other taxing authority having jurisdiction.
In addition, the Indenture contains other customary provisions
limiting the liability of the Trustee.
If the Sponsor shall fail to perform any of its duties under the
Indenture or becomes incapable of acting or becomes bankrupt or
its affairs are taken over by public authorities, then the Trustee
may (a) appoint a successor Sponsor at rates of compensation deemed
by the Trustee to be reasonable and not exceeding amounts prescribed
by the Securities and Exchange Commission, or (b) terminate the
Indenture and liquidate the Trust as provided herein, or (c) continue
to act as Trustee without terminating the Indenture.
Who is the Evaluator?
The Evaluator is Securities Evaluation Service, Inc., 531 East
Roosevelt Road, Suite 200, Wheaton, Illinois 60187. The Evaluator
may resign or may be removed by the Sponsor and the Trustee, in
which event the Sponsor and the Trustee are to use their best
efforts to appoint a satisfactory successor. Such resignation
or removal shall become effective upon the acceptance of appointment
by the successor Evaluator. If upon resignation of the Evaluator
no successor has accepted appointment within 30 days after notice
of resignation, the Evaluator may apply to a court of competent
jurisdiction for the appointment of a successor.
The Trustee, Sponsor and Unit holders may rely on any evaluation
furnished by the Evaluator and shall have no responsibility for
the accuracy thereof. Determinations by the Evaluator under the
Indenture shall be made in good faith upon the basis of the best
information available to it, provided, however, that the Evaluator
shall be under no liability to the Trustee, Sponsor or Unit holders
for errors in judgment. This provision shall not protect the Evaluator
in any case of willful misfeasance, bad faith, gross negligence
or reckless disregard of its obligations and duties.
OTHER INFORMATION
How May the Indenture be Amended or Terminated?
The Sponsor and the Trustee have the power to amend the Indenture
without the consent of any of the Unit holders when such an amendment
is (1) to cure any ambiguity or to correct or supplement any provision
of the Indenture which may be defective or inconsistent with any
other provision contained therein, or (2) to make such other provisions
as shall not adversely affect the interest of the Unit holders
(as determined in good faith by the Sponsor and the Trustee).
The Indenture provides that the Trust shall terminate upon the
Mandatory Termination Date indicated herein under "Summary of
Essential Information." The Trust may be liquidated at any time
by consent of 100% of the Unit holders of the Trust or by the
Trustee when the value of the Equity Securities owned by the Trust,
as shown by any evaluation, is less than 40% of the total value
of Equity Securities deposited in such Trust during the primary
offering period, or in the event that Units of the Trust not yet
sold aggregating more than 60% of the Units of the Trust are tendered
for redemption by the Underwriter, including the Sponsor. If the
Trust is liquidated because of the redemption of unsold Units
of the Trust by the Underwriter, the Sponsor will refund to each
purchaser of Units of the Trust the entire sales charge and the
transaction fees paid by such purchaser. In the event of termination,
written notice thereof will be sent by the Trustee to all Unit
holders of the Trust. Within a reasonable period after termination,
the Trustee will follow the procedures set forth under "How are
Income and Capital Distributed?"
Commencing on the Mandatory Termination Date, Equity Securities
will begin to be sold in connection with the termination of the
Trust. The Sponsor will determine the manner, timing and execution
of the sale of the Equity Securities. Written notice of any termination
of the Trust specifying the time or times at which Unit holders
may surrender their certificates for cancellation shall be given
by the Trustee to each Unit holder at his
Page 22
address appearing on the registration books of the Trust maintained
by the Trustee. Unit holders will receive a cash distribution
from the sale of the remaining Equity Securities within a reasonable
time after the Trust is terminated. The Trustee will deduct from
the funds of the Trust any accrued costs, expenses, advances or
indemnities provided by the Trust Agreement, including estimated
compensation of the Trustee and costs of liquidation and any amounts
required as a reserve to provide for payment of any applicable
taxes or other governmental charges. Any sale of Equity Securities
in the Trust upon termination may result in a lower amount than
might otherwise be realized if such sale were not required at
such time. The Trustee will then distribute to each Unit holder
his pro rata share of the balance of the Income and Capital Accounts.
Legal Opinions
The legality of the Units offered hereby and certain matters relating
to Federal tax law have been passed upon by Chapman and Cutler,
111 West Monroe Street, Chicago, Illinois 60603, as counsel for
the Sponsor. Carter, Ledyard & Milburn, will act as counsel for
the Trustee and as special New York tax counsel for the Trust.
Experts
The statement of net assets, including the schedule of investments,
of the Trust at the opening of business on the Initial Date of
Deposit appearing in this Prospectus and Registration Statement
has been audited by Ernst & Young, independent auditors, as set
forth in their report thereon appearing elsewhere herein and in
the Registration Statement, and is included in reliance upon such
report given upon the authority of such firm as experts in accounting
and auditing.
UNDERWRITING
The Underwriters named below, including the Sponsor, have purchased
Units in the following respective amounts:
<TABLE>
<CAPTION>
Number of
Name Address Units
________ ________ ________
<S> <C> <C>
Sponsor
Nike Securities L.P. 1001 Warrenville Road, Lisle, IL 60532
</TABLE>
* These Underwriters have committed to purchase at least 25,000
Units from the Sponsor on the Initial Date of Deposit and have
indicated their intention to purchase a total of 100,000 Units
from the Sponsor during the initial six month offering period.
The Sponsor will receive from the Underwriters the excess over
the gross sales commission contained in the following table:
Underwriting Concessions
________________________
$100,000-$999,999 $1,000,000 or more
Underwritten Underwritten
________________ __________________
3.5% 3.7%
On the Initial Date of Deposit, the Underwriters of the Trust
became the owners of the Units of the Trust and entitled to the
benefits thereof, as well as the risks inherent therein.
The Agreement among Underwriters provides that a public offering
of the Units of the Trust will be made at the Public Offering
Price described in the prospectus. Units may also be sold to or
through dealers and others during the initial offering period
and in the secondary market at prices representing a concession
or agency commission as described in "Public Offering-How are
Units Distributed?"
Underwriters, dealers and others who, in a single month, purchase
from the Sponsor Units of any Series of The First Trust GNMA,
The First Trust of Insured Municipal Bonds, The First Trust Combined
Series, The First
Page 23
Trust Special Situations Trust, Templeton Growth and Treasury
Trust, Templeton Foreign Fund & U.S. Treasury Securities Trust,
The Advantage Growth and Treasury Securities Trust or any other
unit investment trust of which Nike Securities L.P. is the Sponsor
(the "UIT Units"), which sale of UIT Units are in the following
aggregate dollar amounts, will receive additional concessions
from the Sponsor as indicated in the following table:
<TABLE>
<CAPTION>
Aggregate Monthly Amount Additional Concession
of UIT Units Sold (per $1,000 sold)
________________ ________________
<S> <C>
$1,000,000 - $2,499,999 $0.50
$2,500,000 - $4,999,999 $1.00
$5,000,000 - $7,499,999 $1.50
$7,500,000 - $9,999,999 $2.00
$10,000,000 or more $2.50
</TABLE>
Aggregate Monthly Dollar Amount of UIT Units Sold is based on
settled trades for a month (including sales of UIT Units to the
Sponsor in the secondary market which are resold), net of redemptions.
From time to time the Sponsor may implement programs under which
Underwriters and dealers of the Trust may receive nominal awards
from the Sponsor for each of their registered representatives
who have sold a minimum number of UIT Units during a specified
time period. In addition, at various times the Sponsor may implement
other programs under which the sales force of an Underwriter or
dealer may be eligible to win other nominal awards for certain
sales efforts, or under which the Sponsor will reallow to any
such Underwriter or dealer that sponsors sales contests or recognition
programs conforming to criteria established by the Sponsor, or
participates in sales programs sponsored by the Sponsor, an amount
not exceeding the total applicable sales charges on the sales
generated by such person at the public offering price during such
programs. Also, the Sponsor in its discretion may from time to
time pursuant to objective criteria established by the Sponsor
pay fees to qualifying Underwriters or dealers for certain services
or activities which are primarily intended to result in sales
of Units of the Trust. Such payments are made by the Sponsor out
of its own assets, and not out of the assets of the Trust. These
programs will not change the price Unit holders pay for their
Units or the amount that the Trust will receive from the Units
sold.
The Sponsor may from time to time in its advertising and sales
materials compare the then current estimated returns on the Trust
and returns over specified periods on other similar Trusts sponsored
by Nike Securities L.P. with returns on other taxable investments
such as the common stocks comprising the Dow Jones Utilities Index,
corporate or U.S. Government bonds, bank CDs and money market
accounts or money market funds, each of which has investment characteristics
that may differ from those of the Trust. U.S. Government bonds,
for example, are backed by the full faith and credit of the U.S.
Government and bank CDs and money market accounts are insured
by an agency of the federal government. Money market accounts
and money market funds provide stability of principal, but pay
interest at rates that vary with the condition of the short-term
debt market. The investment characteristics of the Trust are described
more fully elsewhere in this Prospectus.
Page 24
REPORT OF INDEPENDENT AUDITORS
The Sponsor, Nike Securities L.P., and Unit Holders
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 92
We have audited the accompanying statement of net assets, including
the schedule of investments, of Utilities Income Trust of America,
Series 1, comprising The First Trust Special Situations Trust,
Series 92 as of the opening of business on , 1994. This
statement of net assets is the responsibility of the Trust's Sponsor.
Our responsibility is to express an opinion on this statement
of net assets based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the statement
of net assets is free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the statement of net assets. Our procedures included
confirmation of the letter of credit held by the Trustee and deposited
in the Trust on , 1994. An audit also includes assessing
the accounting principles used and significant estimates made
by the Sponsor, as well as evaluating the overall presentation
of the statement of net assets. We believe that our audit of the
statement of net assets provides a reasonable basis for our opinion.
In our opinion, the statement of net assets referred to above
presents fairly, in all material respects, the financial position
of Utilities Income Trust of America, Series 1, comprising The
First Trust Special Situations Trust, Series 92 at the opening
of business on , 1994 in conformity with generally accepted
accounting principles.
ERNST & YOUNG
Chicago, Illinois
, 1994
Page 25
Statement of Net Assets
Utilities Income Trust of America, Series 1
The First Trust Special Situations Trust, Series 92
At the Opening of Business on the Initial Date of Deposit
, 1994
<TABLE>
<CAPTION>
NET ASSETS
<S> <C>
Investment in Equity Securities represented by purchase
contracts (1) (2) $
========
Units outstanding
========
</TABLE>
<TABLE>
<CAPTION>
ANALYSIS OF NET ASSETS
<S> <C>
Cost to investors (3) $
Less sales charge (3)
________
Net Assets $
========
</TABLE>
NOTES TO STATEMENT OF NET ASSETS
(1) Aggregate cost of the Equity Securities listed under "Schedule
of Investments" is based on their aggregate underlying value.
(2) An irrevocable letter of credit totaling $600,000 issued
by Bankers Trust Company has been deposited with the Trustee covering
the monies necessary for the purchase of the Equity Securities
pursuant to contracts for the purchase of such Equity Securities.
(3) The aggregate cost to investors includes a sales charge
computed at the rate of 4.9% of the Public Offering Price (equivalent
to 5.152% of the net amount invested), assuming no reduction of
sales charge for quantity purchases.
Page 26
Schedule of Investments
Utilities Income Trust of America, Series 1
The First Trust Special Situations Trust, Series 92
At the Opening of Business on the Initial Date of Deposit
, 1994
<TABLE>
<CAPTION>
Standard & Poor's Market
Earnings Value Cost of Equity
Number Ticker Symbol and And Dividend per Securities
of Shares Name of Issuer of Equity Securities (1) Ranking (2) Share to Trust (3)
________ _________________________________ ________________ ________ ____________
<C> <S> <C> <C> <C>
AYP Allegheny Power System, Inc. A- $ $
ATE Atlantic Energy, Inc. A-
BGE Baltimore Gas and Electric Company A
CSR Central & South West Corporation A-
ED Consolidated Edison Company
of New York, Inc. A
D Dominion Resources, Inc. A
DUK Duke Power Company A-
EDE Empire District Electric Company A-
EGN Energen Corporation A-
FPL FPL Group, Inc. B+
FPC Florida Progress Corporation A-
HE Hawaiian Electric Industries, Inc. A-
NES New England Electric System A-
NJR New Jersey Resources Corporation B
NSP Northern States Power Company A-
NWNG Northwest Natural Gas Company B+
NPS Northwestern Public Service Company A
ORU Orange and Rockland Utilities, Inc. A
POM Potomac Electric Power Company A-
SCE SCEcorp A-
SIG Southern Indiana Gas & Electric Company A
WEC Wisconsin Energy Corporation A
WPH WPL Holdings, Inc. A
WPS Wisconsin Public Service Corporation A
______ ______________
Total Investment $
====== ==============
</TABLE>
[FN]
_______________
(1) All Equity Securities are represented by regular way contracts
to purchase such Equity Securities for the performance of which
an irrevocable letter of credit has been deposited with the Trustee.
The contracts to purchase Equity Securities were entered into
by the Sponsor on , 1994.
(2) All rankings are by Standard & Poor's Corporation. For a
brief description of the ranking symbols and their related meanings,
see "Description of Earnings and Dividend Rankings."
(3) The cost of the Equity Securities to the Trust represents
the aggregate underlying value with respect to the Equity Securities
acquired (generally determined by the closing sale prices of the
listed Equity Securities and the ask prices of the over-the-counter
traded Equity Securities). The valuation of the Equity Securities
has been determined by the Evaluator, certain shareholders of
which are officers of the Sponsor. The aggregate underlying value
of the Equity Securities on the Initial Date of Deposit was $
. Cost and loss to Sponsor relating to the Equity
Securities sold to the Trust were $ and $
, respectively.
Page 27
DESCRIPTION OF EARNINGS AND DIVIDEND RANKINGS*
* As published by Standard & Poor's Corporation.
The investment process involves assessment of various factors-such
as product and industry position, corporate resources and financial
policy-with results that make some common stocks more highly esteemed
than others. In this assessment, Standard & Poor's believes that
earnings and dividend performance is the end result of the interplay
of these factors and that, over the long run, the record of this
performance has a considerable bearing on relative quality. The
rankings, however, do not pretend to reflect all of the factors,
tangible or intangible, that bear on stock quality.
Relative quality of bonds or other debt, that is, degrees of protection
for principal and interest, called creditworthiness, cannot be
applied to common stocks, and therefore rankings are not to be
confused with bond quality ratings which are arrived at by a necessarily
different approach.
Growth and stability of earnings and dividends are deemed key
elements in establishing Standard & Poor's earnings and dividend
rankings for common stocks, which are designed to capsulize the
nature of this record in a single symbol. It should be noted,
however, that the process also takes into consideration certain
adjustments and modifications deemed desirable in establishing
such rankings.
The point of departure in arriving at these rankings is a computerized
scoring system based on per-share earnings and dividend records
of the most recent ten years-a period deemed long enough to measure
significant time segments of secular growth, to capture indications
of basic change in trends as they develop, and to encompass the
full peak-to-peak range of the business cycle. Basic scores are
computed for earnings and dividends, then adjusted as indicated
by a set of predetermined modifiers for growth, stability within
long-term trends, and cyclicality. Adjusted scores for earnings
and dividends are then combined to yield a final score.
Further, the ranking system makes allowance for the fact that,
in general, corporate size imparts certain recognized advantages
from an investment standpoint. Conversely, minimum size limits
(in terms of corporate sales volume) are set for the various rankings,
but the system provides for making exceptions where the score
reflects an outstanding earnings-dividend record.
The final score for each stock is measured against a scoring matrix
determined by analysis of the scores of a large and representative
sample of stocks. The range of scores in the array of this sample
has been aligned with the following ladder of rankings:
A+ Highest B+ Average C Lowest
A High B Below Average D In Reorganization
A- Above Average B- Lower
The positions as determined above may be modified in some instances
by special considerations, such as natural disasters, massive
strikes, and non-recurring accounting adjustments.
A ranking is not a forecast of future market price performance,
but is basically an appraisal of past performance of earnings
and dividends, and relative current standing. These rankings must
not be used as market recommendations; a high-score stock may
at times be so overpriced as to justify its sale, while a low-score
stock may be attractively priced for purchase. Rankings based
upon earnings and dividend records are no substitute for complete
analysis. They cannot take into account potential effects of management
changes, internal company policies not yet fully reflected in
the earnings and dividend record, public relations standing, recent
competitive shifts, and a host of other factors that may be relevant
to investment status and decision.
Page 28
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Page 29
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Page 30
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Page 31
<TABLE>
<CAPTION>
CONTENTS:
<S> <C>
Summary of Essential Information 3
Utilities Income Trust of America, Series 1
The First Trust Special Situations Trust, Series 92:
What is The First Trust Special Situations Trust? 4
What are the Expenses and Charges? 5
What is the Federal Tax Status of Unit Holders? 6
Why are Investments in the Trust Suitable
for Retirement Plans? 7
Portfolio:
What are Equity Securities? 8
What are the Equity Securities Selected
for American Utility Income Trust, Series 1? 11
What are Some Additional Considerations
for Investors? 13
Public Offering:
How is the Public Offering Price Determined? 13
How are Units Distributed? 15
What are the Sponsor's Profits? 15
Will There be a Secondary Market? 16
Rights of Unit Holders:
How is Evidence of Ownership Issued
and Transferred? 16
How are Income and Capital Distributed? 17
What Reports will Unit Holders Receive? 18
How May Units be Redeemed? 18
How May Units be Purchased by the Sponsor? 19
How May Equity Securities be Removed
from the Trust? 20
Information as to Sponsor, Trustee and Evaluator:
Who is the Sponsor? 21
Who is the Trustee? 21
Limitations on Liabilities of Sponsor and Trustee 21
Who is the Evaluator? 22
Other Information:
How May the Indenture be Amended
or Terminated? 22
Legal Opinions 23
Experts 23
Underwriting 23
Report of Independent Auditors 25
Statement of Net Assets 26
Notes to Statement of Net Assets 26
Schedule of Investments 27
Description of Earnings and Dividend Rankings 28
</TABLE>
___________
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL,
OR A SOLICITATION OF AN OFFER TO BUY, SECURITIES IN ANY JURISDICTION
TO ANY PERSON TO WHOM IT IS NOT LAWFUL TO MAKE SUCH OFFER IN SUCH
JURISDICTION.
THIS PROSPECTUS DOES NOT CONTAIN ALL THE INFORMATION SET
FORTH IN THE REGISTRATION STATEMENTS AND EXHIBITS RELATING THERETO,
WHICH THE TRUST HAS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION,
WASHINGTON, D.C. UNDER THE SECURITIES ACT OF 1933 AND THE INVESTMENT
COMPANY ACT OF 1940, AND TO WHICH REFERENCE IS HEREBY MADE.
FIRST TRUST registered trademark
Utilities Income Trust of America
Series 1
First Trust registered trademark
1001 Warrenville Road, Suite 300
Lisle, Illinois 60532
1-708-241-4141
Trustee:
United States Trust Company
of New York
770 Broadway
New York, New York 10003
1-800-682-7520
PLEASE RETAIN THIS PROSPECTUS
FOR FUTURE REFERENCE
, 1994
Page 32
MEMORANDUM
Re: The First Trust Special Situations Trust, Series 92
As indicated in our cover letter transmitting the
Registration Statement on Form S-6 and other related material
under the Securities Act of 1933 to the Commission, the only
difference of consequence (except as described below) between The
First Trust Special Situations Trust, Series 90, which is the
current fund, and The First Trust Special Situations Trust,
Series 92, the filing of which this memorandum accompanies, is
the change in the series number. The list of bonds comprising
the Fund, the evaluation, record and distribution dates and other
changes pertaining specifically to the new series, such as size
and number of Units in the Fund and the statement of condition of
the new Fund, will be filed by amendment.
1940 ACT
FORMS N-8A AND N-8B-2
These forms were not filed, as the Form N-8A and Form N-8B-2
filed in respect of Templeton Growth and Treasury Trust, Series 1
and subsequent series (File No. 811-05903) related also to the
subsequent series of the Fund.
1933 ACT
PROSPECTUS
The only significant changes in the Prospectus from the
Series 90 Prospectus relate to the series number and size and the
date and various items of information which will be derived from
and apply specifically to the bonds deposited in the Fund.
CONTENTS OF REGISTRATION STATEMENT
ITEM A Bonding Arrangements of Depositor:
Nike Securities L.P. is covered by a Broker's Fidelity
Bond, in the total amount of $1,000,000, the insurer
being National Union Fire Insurance Company of
Pittsburgh.
ITEM B This Registration Statement on Form S-6 comprises the
following papers and documents:
The facing sheet
The Cross-Reference Sheet
The Prospectus
The signatures
Exhibits
S-1
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Registrant, The First Trust Special Situations Trust, Series
92 has duly caused this Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the
Village of Lisle and State of Illinois on March 21, 1994.
THE FIRST TRUST SPECIAL SITUATIONS
TRUST, SERIES 92
(Registrant)
By: NIKE SECURITIES L.P.
(Depositor)
By Carlos E. Nardo
Senior Vice President
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed below by the
following person in the capacity and on the date indicated:
NAME TITLE* DATE
Robert D. Van Kampen Sole Director of
Nike Securities March 21, 1994
Corporation, the
General Partner of
Nike Securities L.P. Carlos E. Nardo
Attorney-in-Fact**
___________________________
* The title of the person named herein represents his capacity
in and relationship to Nike Securities L.P., the Depositor.
** An executed copy of the related power of attorney was filed
with the Securities and Exchange Commission in connection
with Amendment No. 1 to form S-6 of The First Trust Special
Situations Trust, Series 18 (File No. 33-42683) and the same
is hereby incorporated by this reference.
S-2
CONSENTS OF COUNSEL
The consents of counsel to the use of their names in the
Prospectus included in this Registration Statement will be
contained in their respective opinions to be filed as Exhibits
3.1, 3.2, 3.3 and 3.4 of the Registration Statement.
CONSENT OF ERNST & YOUNG
The consent of Ernst & Young to the use of its name and to
the reference to such firm in the Prospectus included in this
Registration Statement will be filed by amendment.
CONSENT OF SECURITIES EVALUATION SERVICE, INC.
The consent of Securities Evaluation Service, Inc. to the
use of its name in the Prospectus included in the Registration
Statement is filed as Exhibit 4.1 to the Registration Statement
S-3
EXHIBIT INDEX
1.1 Form of Standard Terms and Conditions of Trust for The
First Trust Special Situations Trust, Series 22 and
certain subsequent Series, effective November 20, 1991
among Nike Securities L.P., as Depositor, United States
Trust Company of New York as Trustee, Securities
Evaluation Service, Inc., as Evaluator, and Nike
Financial Advisory Services L.P. as Portfolio Supervisor
(incorporated by reference to Amendment No. 1 to Form S-6
[File No. 33-43693] filed on behalf of The First Trust
Special Situations Trust, Series 22).
1.1.1* Form of Trust Agreement for Series 92 among Nike
Securities L.P., as Depositor, United States Trust
Company of New York, as Trustee, Securities Evaluation
Service, Inc., as Evaluator, and First Trust Advisors
L.P., as Portfolio Supervisor.
1.2 Copy of Certificate of Limited Partnership of Nike
Securities L.P. (incorporated by reference to Amendment
No. 1 to Form S-6 [File No. 33-42683] filed on behalf of
The First Trust Special Situations Trust, Series 18).
1.3 Copy of Amended and Restated Limited Partnership Agreement
of Nike Securities L.P. (incorporated by reference to
Amendment No. 1 to Form S-6 [File No. 33-42683] filed on
behalf of The First Trust Special Situations Trust,
Series 18).
1.4 Copy of Articles of Incorporation of Nike Securities
Corporation, the general partner of Nike Securities L.P.,
Depositor (incorporated by reference to Amendment No. 1
to Form S-6 [File No. 33-42683] filed on behalf of The
First Trust Special Situations Trust, Series 18).
1.5 Copy of By-Laws of Nike Securities Corporaiton, the
general partner of Nike Securities L.P., Depositor
(incorporated by reference to Amendment No. 1 to Form S-6
[File No. 33-42683] filed on behalf of The First Trust
Special Situations Trust, Series 18).
2.1 Copy of Certificate of Ownership (included in Exhibit 1.1
filed herewith on page 2 and incorporated herein by
reference).
3.1* Opinion of counsel as to legality of Securities being
registered.
3.2* Opinion of counsel as to Federal income tax status of
Securities being registered.
S-4
3.3* Opinion of counsel as to New York income tax status of
Securities being registered.
3.4* Opinion of counsel as to advancement of funds by Trustee.
4.1* Consent of Securities Evaluation Service, Inc.
6.1 List of Directors and Officers of Depositor and other
related information (incorporated by reference to
Amendment No. 1 to Form S-6 [File No. 33-42683] filed on
behalf of The First Trust Special Situations Trust,
Series 18).
7.1 Power of Attorney executed by the Director listed on page
S-3 of this Registration Statement (incorporated by
reference to Amendment No. 1 to Form S-6 [File No.
33-42683] filed on behalf of The First Trust Special
Situations Trust, Series 18).
___________________________________
* To be filed by amendment.
S-5
