-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Lo981eopnaRyv2YcNAG650IzIPjjFvTuXoQpssf+f04UrME3gqYDTIHXs/+lKx+6 DmqdiG/D+kv7O/gKKK1lcQ== 0000088255-00-000011.txt : 20000515 0000088255-00-000011.hdr.sgml : 20000515 ACCESSION NUMBER: 0000088255-00-000011 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000401 FILED AS OF DATE: 20000512 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SEARS ROEBUCK ACCEPTANCE CORP CENTRAL INDEX KEY: 0000088255 STANDARD INDUSTRIAL CLASSIFICATION: SHORT-TERM BUSINESS CREDIT INSTITUTIONS [6153] IRS NUMBER: 510080535 STATE OF INCORPORATION: DE FISCAL YEAR END: 0102 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-04040 FILM NUMBER: 629678 BUSINESS ADDRESS: STREET 1: 3711 KENNETT PIKE CITY: GREENVILLE STATE: DE ZIP: 19807 BUSINESS PHONE: 3028883112 EX-27 1
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10-Q 2 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED APRIL 1, 2000 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 1-4040 SEARS ROEBUCK ACCEPTANCE CORP. (Exact name of registrant as specified in its charter) Delaware 51-0080535 (State of Incorporation) (I.R.S. Employer Identification No.) 3711 Kennett Pike, Greenville, Delaware 19807 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: 302/434-3100 Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes X No __ As of April 30, 2000, the Registrant had 350,000 shares of capital stock outstanding, all of which were held by Sears, Roebuck and Co. Registrant meets the conditions set forth in General Instruction H(1)(a) and (b) of Form 10-Q and is therefore filing this Form with a reduced disclosure format. SEARS ROEBUCK ACCEPTANCE CORP. INDEX TO QUARTERLY REPORT ON FORM 10-Q 13 WEEKS ENDED APRIL 1, 2000 Page No. PART I. FINANCIAL INFORMATION: Item 1. Financial Statements Statements of Financial Position April 1, 2000 and April 3, 1999 (unaudited) and January 1, 2000 (audited) 1 Statements of Income (unaudited) 13 Weeks Ended April 1, 2000 and April 3, 1999 2 Statements of Cash Flows (unaudited) 13 Weeks Ended April 1, 2000 and April 3, 1999 3 Notes to Financial Statements (unaudited) 4,5 Independent Accountants' Report 6 Item 2. Analysis of Results of Operations 7 PART II. OTHER INFORMATION: Item 6. Exhibits and Reports on Form 8-K 8 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS SEARS ROEBUCK ACCEPTANCE CORP. STATEMENTS OF FINANCIAL POSITION (unaudited) (millions, except share data) April 1, April 3, Jan. 1, 2000 1999 2000 Assets Cash and cash equivalents $ 135 $ 46 $ 454 Notes of Sears 17,195 17,695 16,806 Commercial customer receivable balances purchased from Sears - 87 - Other assets 60 73 64 Total assets $ 17,390 $ 17,901 $ 17,324 Liabilities Commercial paper (net of unamortized discount of $8, $22 and $12) $ 2,619 $ 4,166 $ 2,675 Medium-term notes (net of unamortized discount of $9, $0 and $0) 5,738 5,614 5,716 Discrete underwritten debt(net of unamortitized discount of $22, $16 and $23) 5,828 5,084 5,827 Accrued interest and other liabilities 232 222 173 Total liabilities 14,417 15,086 14,391 Stockholder's Equity Capital stock, par value $100 per share: 500,000 shares authorized 350,000 shares issued and outstanding 35 35 35 Capital in excess of par value 1,150 1,150 1,150 Retained income 1,788 1,630 1,748 Total stockholder's equity 2,973 2,815 2,933 Total liabilities and stockholder's equity $ 17,390 $ 17,901 $ 17,324 See notes to financial statements. 1 SEARS ROEBUCK ACCEPTANCE CORP. STATEMENTS OF INCOME (unaudited) (millions,except ratios) 13 Weeks Ended April 1, April 3, 2000 1999 Revenues Earnings on notes of Sears $ 299 $ 305 Earnings on commercial customer receivable balances purchased from Sears - 2 Earnings on cash equivalents 3 1 Total revenues 302 308 Expenses Interest expense and amortization of debt discount/premium 240 245 Operating expenses 1 1 Total expenses 241 246 Income before income taxes 61 62 Income taxes 21 22 Net income $ 40 $ 40 Ratio of earnings to fixed charges 1.25 1.25 See notes to financial statements. 2 SEARS ROEBUCK ACCEPTANCE CORP. STATEMENTS OF CASH FLOWS (unaudited) (millions) 13 Weeks Ended April 1, April 3, 2000 1999 Cash flows from operating activities: Net income $ 40 $ 40 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation, amortization and other noncash items 4 3 Increase in other assets - (3) Increase in other liabilities 59 53 Net cash provided by operating activities 103 93 Cash flows from investing activities: (Increase)decrease in notes of Sears (389) 295 Decrease in commercial customer receivable balances purchased from Sears - 3 Net cash(used in) provided by investing activities (389) 298 Cash flows from financing activities: Decrease in commercial paper, primarily 90 days or less (56) (77) Proceeds from issuance of long-term debt 86 25 Payments for redemption of long-term debt (63) (387) Net cash used in financing activities (33) (439) Net decrease in cash and cash equivalents (319) (48) Cash and cash equivalents at beginning of period 454 94 Cash and cash equivalents at end of period $ 135 $ 46 See notes to financial statements. 3 SEARS ROEBUCK ACCEPTANCE CORP. NOTES TO FINANCIAL STATEMENTS (unaudited) 1. Significant Accounting Policies The unaudited interim financial statements of Sears Roebuck Acceptance Corp. ("SRAC"), a wholly-owned subsidiary of Sears, Roebuck and Co. ("Sears"), reflect all adjustments (consisting only of normal recurring accruals) which are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. The significant accounting policies used in the presentation of these financial statements are consistent with the summary of significant accounting policies set forth in SRAC's Annual Report on Form 10-K for the 52 weeks ended January 1, 2000, and these financial statements should be read in conjunction with the financial statements and notes found therein. The results of operations for the interim periods should not be considered indicative of the results to be expected for the full year. 2. Back-up Liquidity SRAC continued to provide support for 100% of its outstanding commercial paper through its investment portfolio and committed credit facilities. SRAC's investment portfolio fluctuated from a low of $5 million to a high of $628 million in the first quarter of 2000. Credit facilities as of April 1, 2000 were as follows: Expiration Date (millions) - ---------------------------------------------------------------- April 2003 $4,185 April 2002 875 - ---------------------------------------------------------------- $5,060 ================================================================ 4 3. Medium-term Notes and Discrete Underwritten Debt Medium-term notes and discrete underwritten debt are issued with either a floating rate indexed to LIBOR or a fixed rate. (dollars in millions; term in years) ISSUANCE Avg. Avg. 2000 Avg. Orig. 1999 Avg. Orig. Volume Rate Term Volume Rate Term ------ ------ ---- ------ ------ ---- First Quarter: Medium-term notes $ 95 6.58% 3.6 $ 25 5.90% 10.0 GROSS OUTSTANDING Avg. Avg. 04/01/00 Avg. Remain. 04/03/99 Avg. Remain. Balance Coupon Term Balance Coupon Term -------- ------ ------ ------- ------ ------- Medium-term notes $5,747 6.51% 2.2 $5,614 6.59% 2.9 Discrete debt $5,850 6.59% 11.4 $5,100 6.69% 12.8 MATURITIES Medium-term Discrete Year notes debt - --------------------------------- 2000 $1,337 $ 250 2001 2,018 - 2002 863 600 2003 1,071 1,250 2004 201 - Thereafter 257 3,750 - --------------------------------- Total $5,747 $5,850 ================================= 5 INDEPENDENT ACCOUNTANTS' REPORT To the Board of Directors and Stockholder of Sears Roebuck Acceptance Corp.: We have reviewed the accompanying statements of financial position of Sears Roebuck Acceptance Corp. (a wholly-owned subsidiary of Sears, Roebuck and Co.) as of April 1, 2000 and April 3, 1999, and the related statements of income and cash flows for the 13 week periods then ended. These financial statements are the responsibility of the Sears Roebuck Acceptance Corp.'s management. We conducted our reviews in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and of making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with auditing standards generally accepted in the United States of America, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our reviews, we are not aware of any material modifications that should be made to such financial statements for them to be in conformity with generally accepted accounting principles. We have previously audited, in accordance with auditing standards generally accepted in the United States of America, the statement of financial position of Sears Roebuck Acceptance Corp. as of January 1, 2000, and the related statements of income, stockholder's equity and cash flows for the year then ended (not presented herein); and in our report dated January 14, 2000, we expressed an unqualified opinion on those financial statements. In our opinion, the information set forth in the accompanying statement of financial position as of January 1, 2000 is fairly stated, in all material respects, in relation to the statement of financial position from which it has been derived. /s/Deloitte & Touche LLP Deloitte & Touche LLP Philadelphia, Pennsylvania April 12, 2000 6 SEARS ROEBUCK ACCEPTANCE CORP. ITEM 2. ANALYSIS OF RESULTS OF OPERATIONS During the first quarter of 2000, Sears Roebuck Acceptance Corp.'s ("SRAC") revenues decreased to $302 million from $308 million in the comparable 1999 period. SRAC's income is derived primarily from the earnings on its investment in the notes and receivable balances of Sears, Roebuck and Co. ("Sears") and invested cash. The decrease in revenue resulted from a $1 billion decrease in SRAC's average earning assets. SRAC's investment in the Notes of Sears decreased as a result of reduced funding requirements of Sears. Cash inflows from the reduced investments in the notes of Sears, allowed SRAC to reduce the level of its debt outstanding. SRAC's interest and related expenses decreased to $240 million for the first quarter of 2000 from $245 million for the first quarter of 1999. SRAC's cost of short-term funds averaged 6.07% in the first quarter of 2000, a 99 basis point increase from 5.08% for the first three months of last year. SRAC's short-term borrowings averaged $2.9 billion in the first quarter of 2000, a 37% decrease from the 1999 first quarter average of $4.6 billion. Decreases in short-term debt levels were partially offset by increases in long term debt levels. Average outstanding long-term debt of $11.6 billion in the first quarter of 2000 increased $.7 billion compared to $10.9 billion in the first quarter of 1999. SRAC's cost of long-term funds averaged 6.60% in the first quarter of 2000 compared to 6.63% for the first quarter of 1999. SRAC's net income was $40 million for the first quarter of 2000 and 1999. SRAC's ratio of earnings to fixed charges was 1.25 for the first quarter of 2000 and 1999. SEARS ROEBUCK ACCEPTANCE CORP. PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) The exhibits listed in the "Exhibit Index" are filed as part of this report. (b) Reports on Form 8-K: There were no reports filed on Form 8-K. 8 SEARS ROEBUCK ACCEPTANCE CORP. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. SEARS ROEBUCK ACCEPTANCE CORP. (Registrant) By: /s/ George F. Slook ------------------- George F. Slook Vice President, Finance and Assistant Secretary (authorized officer of Registrant) May 12, 2000 9 EXHIBIT INDEX 3(a) Certificate of Incorporation of the Registrant, as in effect at November 13, 1987 [Incorporated by reference to Exhibit 28(c)to the Registrant's Quarterly Report on Form 10-Q for the quarter ended September 30, 1987]. 3(b) By-laws of the Registrant, as in effect at February 6, 1996 [Incorporated by reference to Exhibit 3(b)to the Registrant's Annual Report on Form 10-K for the year ended December 30, 1995]. 4 The Registrant hereby agrees to furnish the Commission, upon request, with each instrument defining the rights of holders of long-term debt of the Registrant with respect to which the total amount of securities authorized does not exceed 10% of the total assets of the Registrant. 12 Calculation of ratio of earnings to fixed charges. 15 Acknowledgment of awareness from Deloitte & Touche LLP, dated May 12, 2000, concerning unaudited financial information. 27 Financial Data Schedule. 10 Exhibit 12 SEARS ROEBUCK ACCEPTANCE CORP. CALCULATION OF RATIO OF EARNINGS TO FIXED CHARGES 13 Weeks Ended April 1, April 3, (millions) 2000 1999 INCOME BEFORE INCOME TAXES $ 61 $ 62 PLUS FIXED CHARGES: Interest 236 242 Amortization of debt discount/premium 4 3 Total fixed charges 240 245 EARNINGS BEFORE INCOME TAXES AND FIXED CHARGES $ 301 $ 307 RATIO OF EARNINGS TO FIXED CHARGES 1.25 1.25 1 EXHIBIT 15 Sears Roebuck Acceptance Corp. Greenville, Delaware We have made a review, in accordance with standards established by the American Institute of Certified Public Accountants, of the unaudited interim financial information of Sears Roebuck Acceptance Corp. for the periods ended April 1, 2000 and April 3, 1999, as indicated in our report dated April 12, 2000; because we did not perform an audit, we expressed no opinion on that information. We are aware that our report referred to above, which is included in your Quarterly Report on Form 10-Q for the quarter ended April 1, 2000, is incorporated by reference in Registration Statement Nos. 333-30879 and 333-62847 on Forms S-3. We are also aware that the aforementioned report, pursuant to Rule 436(c) under the Securities Act of 1933, is not considered a part of the Registration Statement prepared or certified by an accountant or a report prepared or certified by an accountant within the meaning of Sections 7 and 11 of that Act. Deloitte & Touche LLP Philadelphia, Pennsylvania May 12, 2000 12 -----END PRIVACY-ENHANCED MESSAGE-----