-----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, LsDNYV9ZOMM649Lqq/wsEyufkWzswPmDvi5+FWe4lORBS4ute7qwpaWG+XF418OS v9vOOYGPZIU0KGY6oSC4/A== 0000088255-96-000051.txt : 19960513 0000088255-96-000051.hdr.sgml : 19960513 ACCESSION NUMBER: 0000088255-96-000051 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960330 FILED AS OF DATE: 19960510 SROS: NONE 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: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-04040 FILM NUMBER: 96559503 BUSINESS ADDRESS: STREET 1: 3711 KENNETT PIKE CITY: GREENVILLE STATE: DE ZIP: 19807 BUSINESS PHONE: 3028883112 EX-27 1
5 3-MOS MAR-30-1995 MAR-30-1995 427,500,000 0 8,893,200,000 0 0 9,338,100,000 0 0 9,338,100,000 4,561,500,000 3,511,800,000 35,000,000 0 0 1,229,800,000 9,338,100,000 0 148,800,000 0 118,100,000 500,000 0 117,600,000 30,700,000 10,700,000 20,000,000 0 0 0 20,000,000 0 0
10-Q 2 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 MARCH 30, 1996 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: 302/888-3100 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, 1996, 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 MARCH 30, 1996 Page No. PART 1. FINANCIAL INFORMATION: Item 1. Financial Statements Statements of Financial Position (unaudited) March 30, 1996 and March 31, 1995 and December 30, 1995 1 Statements of Income(unaudited) Three Months ended March 30, 1996 and March 31, 1995 2 Statements of Cash Flows (unaudited) Three Months ended March 30, 1996 and March 31, 1995 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 SEARS ROEBUCK ACCEPTANCE CORP. PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS STATEMENTS OF FINANCIAL POSITION (unaudited) millions March 30, March 31, Dec. 30, 1996 1995 1995 --------- --------- --------- Assets Notes of Sears $ 8,824.3 $ 6,072.0 $ 8,396.4 Customer receivable balances purchased from Sears 68.9 82.6 81.2 Cash and invested cash 427.5 277.3 143.0 Other assets 17.4 3.4 13.7 --------- --------- --------- Total assets $ 9,338.1 $ 6,435.3 $ 8,634.3 ========= ========= ========= Liabilities Commercial paper (net of unamortized discount of $24.3, $32.0 and $23.8) $ 4,380.9 $ 4,221.4 $ 4,450.6 Agreements with bank trust departments 124.1 139.4 137.0 Intermediate-term loans 870.0 870.0 895.0 Medium-term notes 1,893.7 -- 1,383.5 Discrete underwritten debt 748.1 -- 498.9 Accrued interest and other liabilities 56.5 13.1 24.5 --------- --------- --------- Total liabilities 8,073.3 5,243.9 7,389.5 --------- --------- --------- Stockholder's Equity Capital stock, par value $100 per share: 500,000 shares authorized 350,000 shares issued and outstanding 35.0 35.0 35.0 Capital in excess of par value -- -- -- Retained income 1,229.8 1,156.4 1,209.8 --------- --------- --------- Total stockholder's equity 1,264.8 1,191.4 1,244.8 --------- --------- --------- Total liabilities and stockholder's equity $ 9,338.1 $ 6,435.3 $ 8,634.3 ========= ========= ========= See notes to financial statements. SEARS ROEBUCK ACCEPTANCE CORP. STATEMENTS OF INCOME (unaudited) millions Three Months Ended March 30, March 31, 1996 1995 -------- -------- Revenues Earnings on notes of Sears g $ 144.9 $ 99.0 Earnings on customer receivable balances purchased from Sears 1.5 1.7 Earnings on invested cash 2.4 5.1 ------- ------- Total revenues 148.8 105.8 ------- ------- Expenses Interest and amortization of debt discount and expense 117.6 84.2 Operating expenses 0.5 0.6 ------- ------- Total expenses 118.1 84.8 ------- ------- Income before income taxes 30.7 21.0 Income taxes 10.7 7.3 ------- ------- Net income $ 20.0 $ 13.7 ======= ======= Ratio of earnings to fixed charges 1.26 1.25 See notes to financial statements. SEARS ROEBUCK ACCEPTANCE CORP. STATEMENTS OF CASH FLOWS (unaudited) millions Three Months Ended March 30, March 31, 1996 1995 --------- --------- Cash flows from operating activities: Net income $ 20.0 $ 13.7 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation, amortization and other noncash items 0.8 0.1 Decrease in other assets 0.1 1.6 Increase in other liabilities 32.0 4.9 --------- --------- Net cash provided by operating activities 52.9 20.3 Cash flows from investing activities: (Increase) decrease in notes of Sears (427.9) 770.5 Decrease (increase) in receivable balances purchased from Sears 12.3 (1.1) --------- --------- Net cash (used in) provided by investing activities (415.6) 769.4 Cash flows from financing activities: Decrease in commercial paper, primarily 90 days or less (69.7) (691.5) (Decrease) increase in agreements with bank trust departments (12.9) 52.0 Proceeds from issuance of intermediate-term loans, medium-term notes, and discrete underwritten debt 754.8 25.0 Payments for redemption of intermediate-term loans, medium-term notes, and discrete underwritten debt (25.0) -- --------- --------- Net cash provided by (used in) financing activities 647.2 (614.5) --------- --------- Net increase in cash and invested cash 284.5 175.2 Cash and invested cash at beginning of period 143.0 102.1 --------- --------- Cash and invested cash at end of period $ 427.5 $ 277.3 ========= ========= See notes to financial statements. 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 year ended December 30, 1995, 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. Credit Facilities as of March 30, 1996 Expiration Date (millions) - ------------------------------------------------------------- June 2000 $4,680 June 1996 1,000 December 1996 40 - ------------------------------------------------------------- Total credit facilities $5,720 ============================================================= 3. Intermediate-term loans In both the first quarter of 1996 and 1995, $870.0 million in intermediate-term loans were outstanding with private institutions. The rates on most of these variable rate intermediate-term loans are indexed to LIBOR with a set basis point spread. The average weighted rate on the intermediate-term loans in the first quarter of 1996 was 5.78% compared to 6.43% in the comparable 1995 period. As of March 30, 1996, intermediate-term loans maturing in the next five years were as follows: (millions) 1996 1997 1998 1999 2000 - --------------------------------------------------------------- Total $200.0 $295.0 $25.0 $325.0 $25.0 - --------------------------------------------------------------- 4. Medium-term notes SRAC issued $510.2 million of medium-term notes in the first quarter of 1996 with either a floating rate indexed to LIBOR or a fixed rate. The average weighted rate on medium-term notes in the first quarter of 1996 was 6.08% with terms ranging from one to ten years. As of March 30, 1996, medium-term notes maturing in the next five years were as follows: (millions) 1996 1997 1998 1999 2000 - --------------------------------------------------------------- Total $-- $267.0 $334.5 $185.0 $722.8 - --------------------------------------------------------------- 5. Discrete underwritten debt SRAC issued $250.0 million of discrete underwitten debt in the first quarter of 1996. As of March 30, 1996, SRAC had three discrete underwritten notes outstanding with face values totaling $750.0 million and terms ranging from five to ten years. Discrete underwitten debt pays interest semiannually. As of March 30, 1996, discrete underwritten debt is comprised of the following: (millions) - ----------------------------------- 6 1/2% Notes, due 2000 $250.0 6 3/4% Notes, due 2005 $250.0 6 1/8% Notes, due 2006 $250.0 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 March 30, 1996 and March 31, 1995, and the related Statements of Income and Cash Flows for the three-month periods then ended. These financial statements are the responsibility of 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 generally accepted auditing standards, 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 generally accepted auditing standards, the Statement of Financial Position of Sears Roebuck Acceptance Corp. as of December 30, 1995, 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 19, 1996, 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 December 30, 1995 is fairly stated, in all material respects, in relation to the Statement of Financial Position from which it has been derived. Deloitte & Touche LLP Philadelphia, Pennsylvania April 11, 1996 SEARS ROEBUCK ACCEPTANCE CORP. ITEM 2. ANALYSIS OF RESULTS OF OPERATIONS During the first quarter of 1996, Sears Roebuck Acceptance Corp.'s ("SRAC") revenues increased 40.6% to $148.8 million from $105.8 million in the comparable 1995 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 increase in revenue is attributable to a $2.7 billion or 40.9% increase in SRAC's average earning assets compared to the first quarter of 1995 as a result of Sears increased funding requirements. SRAC's interest and related expenses increased 39.7% to $117.6 million from $84.2 million for the first quarter of 1995 due to an increase in average outstanding debt. SRAC's short-term borrowings averaged $4.8 billion, a 4.3% increase from the 1995 first quarter average of $4.6 billion. SRAC's cost of short-term funds averaged 5.57%, a 57 basis point decrease from 6.14% for the first three months of last year. Average outstanding long- term debt of $3.2 billion in the first quarter of 1996 increased $2.3 billion compared to $0.9 billion in the comparable 1995 period. In early March 1996, the registration statement filed in November 1995 for an additional $2 billion in public term debt securities became effective. As of March 30, 1996, there has been no debt issued against this registration. SRAC anticipates that borrowings will increase during 1996 as Sears continues to refinance a portion of its maturing long-term borrowings and fund its asset growth. In April 1996, in anticipation of future borrowings, SRAC received a capital infusion of $150 million from Sears which provides additional strength to SRAC's balance sheet. SRAC's net income increased 46.0% for the first quarter of 1996 to $20.0 million from $13.7 million in 1995. SRAC's ratio of earnings to fixed charges was 1.26 and 1.25 for the first quarter of 1996 and 1995. 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: A report on Form 8-K was filed by the Registrant dated January 23, 1996 (Items 5 and 7) 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/ Stephen D. Carp ------------------- Stephen D. Carp Vice President, Finance and Assistant Secretary (principal financial and accounting officer and authorized officer of Registrant) May 10, 1996 EXHIBIT INDEX 12 - Calculation of ratio of earnings to fixed charges 15 - Acknowledgement of awareness from Deloitte & Touche, LLP, dated May 10, 1996, concerning unaudited financial information. 27 - Financial Data Schedule Exhibit 12 SEARS ROEBUCK ACCEPTANCE CORP. CALCULATION OF RATIO OF EARNINGS TO FIXED CHARGES Three Months Ended March 30, March 31, (MILLIONS) 1996 1995 --------- --------- INCOME BEFORE INCOME TAXES $ 30.7 $ 21.0 PLUS FIXED CHARGES: Interest 115.5 82.7 Amortization of debt discount and expense 2.1 1.5 ------- ------- Total fixed charges 117.6 84.2 ------- ------- EARNINGS BEFORE INCOME TAXES AND FIXED CHARGES $148.3 $105.2 ======= ======= RATIO OF EARNINGS TO FIXED CHARGES 1.26 1.25 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 March 30, 1996 and March 31, 1995, as indicated in our report dated April 11, 1996; 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 March 30, 1996, is incorporated by reference in Registration Statement Nos. 33-58139 and 33-64215 on Form 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 10, 1996 -----END PRIVACY-ENHANCED MESSAGE-----