Item 1. Business.
Sears Roebuck Acceptance Corp. ("SRAC") is a wholly-owned subsidiary of Sears, Roebuck and Co. ("Sears"). SRAC raises funds primarily from the direct placement of commercial paper with corporate and institutional investors and through intermediate-term loans. SRAC uses borrowing proceeds to acquire short-term notes of Sears and purchase outstanding customer receivable balances from Sears. Sears uses the funds obtained from SRAC for general funding purposes.
In 1994, SRAC borrowed $845 million of intermediate-term loans having original maturities between two and five years. In March 1995, SRAC filed a registration statement with the Securities and Exchange Commission for the registration of debt securities.
SRAC's income is derived primarily from the earnings on its investment in the notes and receivable balances of Sears. The interest rate on Sears notes is presently calculated so that SRAC maintains an earnings to fixed charge ratio of at least 1.25 times. The yield on the investment in Sears notes is related to SRAC's borrowing costs and, as a result, SRAC's earnings fluctuate in response to movements in interest rates and changes in Sears short-term borrowing requirements.
In January 1995, Moody's Investors Service raised its ratings on SRAC's Commercial Paper (to P-1 from P-2). Other ratings for SRAC's commercial paper are from Fitch Investors Service, Duff-1 from Duff and Phelps Credit Rating Co. and A-2 from Standard & Poor's.
In 1994, SRAC took steps to bring its liquidity support and capital resources into alignment with projected funding requirements. SRAC's credit facilities, which totalled $4.2 billion at the end of 1993, were replaced with a syndicated credit agreement totalling $4.5 billion, a syndicated minority bank credit agreement totalling $32 million and $600 million of uniform credit agreements with individual banks.
SRAC continues to be a very strongly capitalized company, with an equity position of $1.2 billion. The company's debt-to-equity ratio was 5.0:1 at the end of 1994 compared to 2.6:1 at the end of 1993.
Pursuant to the syndicated credit agreements between SRAC and various banks (detailed below in Item 8 "Notes to Financial Statements, note 5"), the agreement between SRAC and Sears concerning SRAC's investment in Sears notes may not be amended, waived, terminated or modified (except that SRAC's fixed charge coverage ratio may be reduced to 1.15) without the approval of such banks.
From time to time, SRAC acts as placement agent for Sears Credit Corp. A, Sears Credit Corp. B, Sears Credit Corp. I and Sears Credit Corp. II (collectively "SCC"), which are wholly-owned subsidiaries of Sears that issue asset-backed commercial paper ("ABCP"). The ABCP is secured by investor certificates acquired by SCC, which represent undivided interests in a trust. The trust holds receivables arising in selected accounts under Sears open-end credit plans, all payments received on the receivables including related finance charges, and deposits in certain accounts of the trust. At February 28, 1995, SRAC had 11 employees.
Item 2.
Item 2. Properties.
None.
Item 3.
Item 3. Legal Proceedings.
None.
Item 4.
Item 4. Submission of Matters to a Vote of Security Holders.
Not applicable.
PART II
Item 5.
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters.
There is no established public trading market for SRAC's common stock. As of February 28, 1995, Sears owned all outstanding shares of SRAC's common stock. The Board of Directors of SRAC declared a $1.7 billion dividend on December 20, 1993 to Sears, payable on December 30, 1993. The Board also approved payment to Sears on December 30, 1993 of $330.2 million out of capital in excess of par value; such payment is characterized as a dividend under the Delaware General Corporation Law. Payments for these transactions were effected by reducing SRAC's investment in the notes of Sears by approximately $2.0 billion. SRAC does not intend to pay any cash or other dividends on its common stock in the foreseeable future.
Item 6.
Item 6. Selected Financial Data.
Not applicable.
Item 7.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.
Financial Condition
SRAC's investment in Sears notes increased to over $6.8 billion at year-end 1994, from $3.4 billion at the end of 1993, due to increased funding requirements by Sears. In response to Sears increased funding requirements, total commercial paper outstandings increased from $2.5 billion at the beginning of the year to $4.9 billion at the close of 1994. SRAC also borrowed $845 million under 15 privately-placed variable rate intermediate-term loans with original maturities from two to five years. At the end of 1994, SRAC maintained a very strong equity position of $1.2 billion, with a debt-to-equity ratio of 5.0:1.
SRAC had investments in highly liquid short-term securities of $100.7 million at the end of 1994, as part of its liability management program. In 1994, SRAC took steps to bring its liquidity support into alignment with projected funding requirements. SRAC's credit facilities, which totalled $4.2 billion at the end of 1993, were replaced with a syndicated credit agreement totalling $4.5 billion, a syndicated minority bank credit agreement for $32 million and $600 million in uniform credit agreements with individual banks.
In March 1995, SRAC filed a registration statement with the Securities and Exchange Commission for the registration of debt securities.
Results of Operations
Under an agreement with Sears, SRAC is presently guaranteed a rate on the notes of Sears providing a ratio of earnings to fixed charges of at least 1.25 times. SRAC's total revenues of $282.7 million declined $54.8 million, or 16%, compared to $337.5 million in 1993, primarily due to a decrease in the average Customer Receivable Balances purchased from Sears during 1994. In 1994, SRAC's average cost of short-term funds increased 90 basis points to 4.57% from 3.67% in 1993. Average outstanding short- term debt of $3,739.7 million declined $581 million compared to $4,320.7 million in 1993. The 13% decrease in average outstanding debt during 1994, resulted in a $17.6 million, or 7%, decrease in interest and related expenses to $218.5 million in 1994 from $236.1 million in 1993. In 1994, SRAC purchased receivables from Sears with recourse, thereby not requiring a loss provision, compared to the receivables purchased in 1993 without recourse which required a loss provision of $33.8 million. As a result, total expenses decreased $56.3 million, or 20%, to $220.4 million from $276.7 million in 1993 and SRAC's 1994 net income increased $.7 million, or 2%, to $40.2 million from net income of $39.5 million in 1993. In 1993, SRAC's net income decreased 63% from $108.1 million in 1992, primarily due to a reduction in the Sears notes during 1993.
The financial information appearing in this annual report on Form 10-K is presented in historical dollars which do not reflect the decline in purchasing power that results from inflation. As is the case for most financial companies, substantially all of SRAC's assets and liabilities are monetary in nature. Interest rates on SRAC's combined investment in Sears notes (set to provide a fixed charge coverage of at least 1.25 times) and customer receivable balances help insulate SRAC from the effects of inflation-based interest rate increases.
Item 8.
Item 8. Financial Statements and Supplementary Data.
SEARS ROEBUCK ACCEPTANCE CORP. STATEMENTS OF INCOME Year Ended December 31, millions 1994 1993 1992 ------- ------- ------- Revenues -------- Earnings on notes of Sears $257.9 $209.1 $508.4 Earnings on receivable balances purchased from Sears (Note 3) 6.2 105.4 125.3 Earnings on invested cash 18.4 22.6 61.9 Other revenues 0.2 0.4 0.9 ------- ------- ------- Total revenues 282.7 337.5 696.5
Expenses -------- Interest and amortization of debt discount and expense 218.5 236.1 482.8 Provision for credit losses -- 33.8 44.9 Operating expenses 1.9 6.8 4.6 ------- ------- ------- Total expenses 220.4 276.7 532.3 ------- ------- ------- Income before income taxes 62.3 60.8 164.2 Income taxes (Note 2) 22.1 21.3 56.1 ------- ------- ------- Net Income $40.2 $39.5 $108.1 ------- ------- ------- Ratio of earnings to fixed charges 1.29 1.26 1.34
See notes to financial statements.
SEARS ROEBUCK ACCEPTANCE CORP. STATEMENTS OF FINANCIAL POSITION December 31, millions 1994 1993 --------- --------- Assets ------ Notes of Sears $6,842.5 $3,403.9 Customer receivable balances purchased from Sears (Note 3) 81.5 88.0 Cash and invested cash 102.1 650.7 Other assets 5.1 3.2 --------- --------- Total assets $7,031.2 $4,145.8 --------- --------- Liabilities ----------- Commercial paper (net of unamortized discount of $22.3 and $5.1) $4,912.9 $2,475.0 Agreements with bank trust departments 87.4 139.8 Zero coupon note - 379.8 Intermediate-term loans 845.0 - Accrued interest and other liabilities 8.2 10.7 Deferred federal income taxes - 3.0 --------- --------- Total liabilities 5,853.5 3,008.3 --------- --------- Stockholder's Equity -------------------- Capital stock, par value $100 per share 500,000 shares authorized 350,000 shares issued and outstanding 35.0 35.0 Capital in excess of par value - - Retained income 1,142.7 1,102.5 --------- --------- Total stockholder's equity 1,177.7 1,137.5 --------- --------- Total liabilities and stockholder's equity $7,031.2 $4,145.8 --------- --------- See notes to financial statements.
SEARS ROEBUCK ACCEPTANCE CORP. STATEMENTS OF STOCKHOLDER'S EQUITY
Year Ended December 31, millions 1994 1993 1992 -------- -------- -------- Capital stock $35.0 $35.0 $35.0 -------- -------- -------- Capital in excess of par value Beginning of year - $330.2 $330.2 Return of capital paid to Sears* - (330.2) - -------- -------- -------- End of year $- $- $330.2 -------- -------- -------- Retained income Beginning of year $1,102.5 $2,763.0 $2,654.9 Net income 40.2 39.5 108.1 Dividend paid to Sears - (1,700.0) - -------- -------- -------- End of year $1,142.7 $1,102.5 $2,763.0 -------- -------- -------- Total stockholder's equity $1,177.7 $1,137.5 $3,128.2 -------- -------- --------
* characterized as a dividend under Delaware General Corporation Law.
See notes to financial statements.
SEARS ROEBUCK ACCEPTANCE CORP. STATEMENTS OF CASH FLOWS Year Ended December 31, millions 1994 1993 1992 -------- -------- -------- Cash Flows From Operating Activities ------------------------------------ Net income $40.2 $39.5 $108.1 Adjustments to reconcile net income to net cash provided by operating activities Earnings amortization on Retail Customer Receivable Balances discount - (125.9) (149.2) Provision for credit losses - 33.8 44.9 Depreciation, amortization and other noncash items 20.9 58.7 55.3 Decrease in deferred federal income taxes (3.0) (7.1) (5.9) Increase in other assets (2.6) (2.5) (1.0) Decrease in other liabilities (2.5) (20.9) (5.4) -------- -------- -------- Net cash provided by (used in) operating activities 53.0 (24.4) 46.8
Cash Flows From Investing Activities ------------------------------------ (Increase) decrease in notes of Sears (3,438.6) 5,059.5 1,720.9 Decrease in receivable balances purchased from Sears 6.5 967.5 183.7 -------- -------- -------- Net cash (used in) provided by investing activities (3,432.1) 6,027.0 1,904.6
Cash Flows From Financing Activities ------------------------------------ Increase (decrease) in commercial paper, primarily 90 days or less 2,437.9 (6,040.3) (1,690.5) Decrease in agreements with bank trust departments (52.4) (258.1) (112.2) Payments for redemption of zero coupon and variable interest notes (400.0) - (604.0) Proceeds from issuance of intermediate-term loans 845.0 - - -------- -------- -------- Net cash provided by (used in) financing activities 2,830.5 (6,298.4) (2,406.7) -------- -------- -------- Net decrease in cash and invested cash (548.6) (295.8) (455.3) Cash and invested cash, beginning of year 650.7 946.5 1,401.8 -------- -------- -------- Cash and invested cash, end of year $102.1 $650.7 $946.5 -------- -------- -------- Supplemental Disclosure of Cash Flow Information Cash paid during the year Interest $231.1 $200.5 $444.1 Income taxes 21.7 37.1 61.0 See notes to financial statements. NOTES TO FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Sears Roebuck Acceptance Corp. ("SRAC"), a wholly-owned subsidiary of Sears, Roebuck and Co. ("Sears"), is principally engaged in the business of acquiring short-term notes of Sears and purchasing outstanding customer receivable balances from Sears, using proceeds from its short-term borrowing programs (primarily the direct placement of commercial paper) and intermediate-term loans.
Under the letter agreement between SRAC and Sears, the interest rate on the Sears notes is presently calculated so that SRAC maintains an earnings to fixed charge ratio of at least 1.25 times.
Cash and invested cash is defined to include all highly liquid investments with maturities of three months or less. In 1993 a $2.0 billion dividend and return of capital paid to Sears was effected through a reduction in SRAC's investment in Sears notes, a noncash transaction.
Customer receivables purchased from Sears are either purchased at a discount and then amortized using the interest method, or purchased at par and are interest-bearing.
The zero coupon note issued to Sears Overseas Finance N.V. ("SOFNV"), a wholly-owned international finance subsidiary of Sears, was amortized using the interest method. Other debt discount and issue expenses are amortized on a straight-line basis over the terms of the related obligation.
The results of operations of SRAC are included in the consolidated federal income tax return of Sears. Tax liabilities and benefits are allocated as generated by SRAC, whether or not such benefits would be currently available on a separate return basis.
Effective January 1, 1992, SRAC adopted Statement of Financial Accounting Standards ("SFAS") No. 106, "Employers' Accounting for Postretirement Benefits Other than Pensions," and SFAS No. 112, "Employers' Accounting for Postemployment Benefits." The adoption of the standards did not have a material impact on the financial statements of SRAC, and will have no effect on the future cash flows of the Company.
2. FEDERAL INCOME TAXES
Year Ended December 31, millions 1994 1993 1992 ------- ------- ------- Current $25.5 $28.4 $62.0 Deferred (3.4) (7.1) (5.9) ------- ------- ------- Financial statement income tax provision $22.1 $21.3 $56.1 ------- ------- ------- Effective income tax rates 35% 35% 34%
3. CUSTOMER RECEIVABLE BALANCES
SRAC has purchased two types of customer receivable balances ("CRB") from Sears, merchant ("MCRB") and retail ("RCRB"). MCRB are purchased with recourse at par, with SRAC earning interest on the receivables. RCRB (excluding related finance charges) were purchased without recourse and at a discount (which included an allowance for uncollectible accounts).
MCRB are made up of credit accounts Sears has established with merchants and contractors for bulk purchases from Sears. The MCRB's are predominately paid within 30 days. RCRB were made up of accounts under Sears open-end credit plans related to the purchase of goods and services at Sears. In administering sold receivables, Sears utilizes procedures with respect to collections, charge-offs and other matters identical to those employed in administering account balances which had not been purchased by SRAC. The MCRB purchased were negotiated between related parties; accordingly, the fair value of this instrument is not provided.
In December 1993, SRAC sold to Sears the entire outstanding RCRB at net book value of $847.6 million. SRAC received the collections and accepted the net charge-offs (collectively referred to as liquidations) related to the RCRB and paid Sears a fee for administering the accounts. The administrative fee paid to Sears in 1993 was $20.5 million.
Each month, SRAC purchases the balance increases in the MCRB accounts attributable to additional credit sales and receives the collections related to the previously purchased balances. Sears will pay interest to SRAC on the balances in these accounts at a rate equivalent to the prime rate.
4. BORROWINGS
SRAC obtains funds through the direct placement of commercial paper (issued in maturities of one to 270 days) and borrowings under agreements with bank trust departments and private institutions (intermediate-term loans). Selected details of SRAC's borrowings are shown below. Weighted interest rates are based on the actual number of days in the year and borrowings net of unamortized discount.
The short-term and/or variable interest rate nature of substantially all of SRAC's financial instruments (both assets and liabilities) causes their carrying value to approximate fair value. The terms of the loan agreement with SOFNV was negotiated between related parties; accordingly, the fair value of this instrument is not provided. December 31, millions 1994 1993 -------- -------- Commercial paper outstanding $4,935.2 $2,480.1 Less: Unamortized discount 22.3 5.1 -------- -------- Commercial paper outstanding (net) 4,912.9 2,475.0 Agreements with bank trust departments 87.4 139.8 Intermediate-term loans 845.0 - Zero coupon, $400 million face value loan agreement with SOFNV due May 26, 1994 - 379.8 -------- -------- Total borrowings $5,845.3 $2,994.6 -------- -------- Commercial Paper and Agreements with Bank Trust Departments Average and Maximum Balances During the Year
1994 1993 ------------------- ------------------- Maximum Maximum millions Average (month-end) Average (month-end) ------------------- ------------------- Commercial paper $3,615.3 $4,912.9 $3,812.1 $ 7,271.1 Agreements with bank trust dept. 124.4 142.2 401.8 499.1 ------------------- ------------------- Weighted Interest Rates 1994 1993 ------------------- ------------------- millions Average Year-End Average Year-End ------------------- ------------------- Commercial paper 4.58% 5.82% 3.64% 3.51% Agreements with bank trust dept. 4.38% 6.06% 3.38% 3.30% ------------------- -------------------
Under the terms of a 1986 agreement, Sears agreed to make all payments required to be made by SRAC to SOFNV in accordance with certain loan agreements between SRAC and SOFNV. SRAC remains liable to SOFNV for such loan agreements, which total $302 million as of December 31, 1994.
SRAC's intermediate-term loans were as follows at December 31, 1994:
Term (millions) ------------------------------------------------------------------- Two year loans expiring in 1996 $200 Three year loans expiring in 1997 320 Five year loans expiring in 1999 325 ------------------------------------------------------------------- Total loans $845 ===================================================================
The rates on most of these variable rate intermediate-term loans are set periodically at Libor plus a set basis point spread. The average rate on the intermediate-term loans in 1994 was 5.41%.
5. CREDIT FACILITIES AS OF DECEMBER 31, 1994
Contractual Credit Facilities:
Expiration Date (millions) -------------------------------------------------------------------- June 1999 $4,500 September 1995 200 October 1995 32 December 1995 400 ------------------------------------------------------------------- Total credit facilities $5,132 ===================================================================
Commitment fees are paid on the unused portions of the above credit facilities. The annualized fees at December 31, 1994 on these lines were $6.1 million.
6. LETTER OF CREDIT COMMITMENTS
SRAC issues letters of credit at Sears request to facilitate Sears purchase of goods from foreign suppliers. At December 31, 1994, letters of credit totaling $119.0 million were outstanding. SRAC has no liabilities with respect to this program other than the obligation to pay drafts under the letters of credit which, if not reimbursed by Sears on the day of the disbursement, are automatically converted into demand borrowings by Sears from SRAC. To date, all SRAC disbursements have been reimbursed on a same- day basis.
SRAC issues standby letters of credit on behalf of its affiliate, Western Auto Supply Company ("Western Auto"), which are used by Western Auto to secure its obligation to repurchase any defaulted accounts receivable sold to a financial institution. At December 31, 1994, a $49.0 million standby letter of credit was outstanding.
7. QUARTERLY FINANCIAL DATA (UNAUDITED)
For the quarter ended March 31, June 30, September 30, December 31, 1994 1993 1994 1993 1994 1993 1994 1993 ------------- ------------ ------------- ------------ Operating Results (millions) Combined earnings from Sears notes and CRB $47.6 $123.7 $53.9 $73.6 $72.3 $63.4 $90.3 $87.6 Total Revenues 51.1 133.2 57.1 79.0 76.3 67.0 98.2 92.1
Interest & related expenses 40.3 96.7 45.2 54.7 55.0 44.9 78.0 39.8 Total expenses 41.1 107.7 45.7 65.0 55.8 55.7 77.8 48.3 Income before income taxes 10.0 25.5 11.4 14.0 20.5 11.3 20.4 10.0
Net income 6.4 16.8 7.3 9.3 13.1 6.6 13.4 6.8
Ratio of earnings to fixed charges 1.25 1.26 1.25 1.26 1.37 1.25 1.26 1.25
Averages (billions) Earning assets* $4.5 $11.3 $4.8 $7.4 $5.4 $6.2 $6.7 $6.6 Short-term debt 3.0 7.8 3.2 3.9 4.0 2.7 4.7 3.0 Cost of short-term debt 3.45% 3.98% 4.11% 3.57% 4.68% 3.31% 5.45% 3.33%
* Notes and receivable balances of Sears and invested cash.
Certain reclassifications have been made to the quarterly data from the classification used in reporting such data in Form 10-Q, which primarily relate to the presentation of the provision for credit losses.
Item 9.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
None.
PART III
Item 10.
Item 10. Directors and Executive Officers of the Registrant.
Not applicable.
Item 11.
Item 11. Executive Compensation.
Not applicable.
Item 12.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
Not applicable.
Item 13.
Item 13. Certain Relationships and Related Transactions.
Not applicable.
PART IV
Item 14.
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.
(a) The following documents are filed as a part of this report:
1. An "Index to Financial Statements" has been filed as a part of this report on page S-1 hereof.
2. No financial statement schedules are included herein because they are not required or because the information is contained in the financial statements and notes thereto, as noted in the "Index to Financial Statements" filed as part of this report.
3. An "Exhibit Index" has been filed as part of this report beginning on page E-1 hereof.
(b) Reports on Form 8-K: There were no reports filed on Form 8-K during the fourth quarter of 1994.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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 Stephen D. Carp* Vice President, Finance and Assistant Secretary
March 27, 1995
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated.
Signature Title Date
Keith E. Trost Director and President ) (Principal Executive ) Officer) ) ) ) Stephen D. Carp* Vice President, Finance ) March 27, 1995 and Assistant Secretary ) (Principal Financial and ) Accounting Officer) ) ) ) James A. Blanda* Director ) ) ) James D. Constantine* Director ) ) ) Alan J. Lacy* Director ) ) ) Alice M. Peterson* Director ) ) ) Larry R. Raymond* Director ) ) ) George F. Slook* Director )
*By \s\ Stephen D. Carp Individually and as Attorney-in-Fact
SEARS ROEBUCK ACCEPTANCE CORP.
YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
PAGE
STATEMENTS OF INCOME 5
STATEMENTS OF FINANCIAL POSITION 6
STATEMENTS OF STOCKHOLDER'S EQUITY 7
STATEMENTS OF CASH FLOWS 8
NOTES TO FINANCIAL STATEMENTS 9-13
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS S-2
S-1
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Stockholder and Board of Directors of Sears Roebuck Acceptance Corp.:
We have audited the accompanying Statements of Financial Position of Sears Roebuck Acceptance Corp. (a wholly-owned subsidiary of Sears, Roebuck and Co.) as of December 31, 1994 and 1993, and the related Statements of Income, Stockholder's Equity, and Cash Flows for each of the three years in the period ended December 31, 1994. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material respects, the financial position of Sears Roebuck Acceptance Corp. as of December 31, 1994 and 1993, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 1994 in conformity with generally accepted accounting principles.
Deloitte & Touche LLP Philadelphia, Pennsylvania January 26, 1995
S-2
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 March 24, 1995.**
4(a)(1) Form of Series A-B Note [Incorporated by reference to Exhibit 4(a)(1) to the Registrant's Annual Report on Form 10-K for the year ended December 31, 1982*].
4(a)(2) Form of letter agreement relating to Series A-B Note [Incorporated by reference to Exhibit 4(a)(2) to the Registrant's Annual Report on Form 10-K for the year ended December 31, 1982*].
4(b) $4,500,000,000 Credit Agreement dated as of June 7, 1994 among SRAC, the Banks listed therein and Morgan Guaranty Trust Company of New York, as Agent [Incorporated by reference on Form 8-K of the Registrant for June 7, 1994*]
4(c) Form of Sears Roebuck Acceptance Corp. Investment Note Agreement. [Incorporated by reference to Exhibit 4(c) to Annual Report on Form 10-K of the Registrant for the year ended December 31, 1992*]
4(d) 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.
10(a) Letter Agreement dated as of October 17, 1991 between Sears Roebuck Acceptance Corp. and Sears, Roebuck and Co. [Incorporated by reference to Exhibit 10 to the Registrant's Quarterly Report on Form 10-Q for the quarter ended September 30, 1991*].
________________________________ * SEC File No. 1-4040. ** Filed herewith.
E-1 EXHIBIT INDEX (cont'd)
10(b) Letter Agreement dated as of September 2, 1986 between Sears Roebuck Acceptance Corp. and Sears, Roebuck and Co. [Incorporated by reference to Exhibit 10 to the Registrant's Current Report on Form 8-K dated September 2, 1986*].
10(c)(1) Agreement to Issue Letters of Credit dated December 3, 1985 between Sears, Roebuck and Co. and Sears Roebuck Acceptance Corp. [Incorporated by reference to Exhibit 10(i)(1) to the Registrant's Annual Report on Form 10-K for the year ended December 31, 1987*].
10(c)(2) Letter Agreement dated March 11, 1986 amending Agreement to issue Letters of Credit dated December 3, 1985 [Incorporated by reference to Exhibit 10(i)(2) to the Registrant's Annual Report on Form 10-K for the year ended December 31, 1987*].
10(c)(3) Letter Agreement dated November 26, 1986 amending Agreement to Issue Letters of Credit dated December 3, 1985 [Incorporated by reference to Exhibit 10(i)(3) to the Registrant's Annual Report on Form 10-K for the year ended December 31, 1987*].
12 Calculation of ratio of earnings to fixed charges.**
24 Power of attorney.**
________________________________ * SEC File No. 1-4040. ** Filed herewith.
E-2
Exhibit 12
SEARS ROEBUCK ACCEPTANCE CORP.
CALCULATION OF RATIO OF EARNINGS TO FIXED CHARGES
Year Ended December 31, 1994 1993 1992 (dollars in millions)
INCOME BEFORE INCOME TAXES $ 62.3 $ 60.8 $ 164.2
PLUS FIXED CHARGES: Interest 190.5 177.6 427.6 Amortization of debt discount and expense 28.0 58.5 55.2 ------- ------- -------
TOTAL FIXED CHARGES 218.5 236.1 482.8 ------- ------- -------
EARNINGS BEFORE INCOME TAXES AND FIXED CHARGES $ 280.8 $ 296.9 $ 647.0 ======= ======= =======
RATIO OF EARNINGS TO FIXED CHARGES 1.29 1.26 1.34
Exhibit 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned, being a director or officer, or both, of SEARS ROEBUCK ACCEPTANCE CORP., a Delaware corporation (the "Corporation"), does hereby constitute and appoint JAMES A. BLANDA, RICHARD F. KOTZ, KEITH E. TROST, GEORGE F. SLOOK, STEPHEN D. CARP and NANCY HOUGHTON-LYNCH, with full power to each of them to act alone, as the true and lawful attorneys and agents of the undersigned, with full power of substitution and resubstitution to each of said attorneys, to execute, file and deliver any and all instruments and to do any and all acts and things which said to attorneys and agents, or any of them, deem advisable to enable the Corporation to comply with the Securities Exchange Act of 1934, as amended, and any requirements of the Securities and Exchange Commission in respect thereto, relating to annual reports on Form 10-K, including specifically, but without limitation of the general authority hereby granted, the power and authority to sign his name in the name and on behalf of the Corporation or as director or officer, or both, of the Corporation, as indicated below opposite his signature, to annual reports on Form 10-K or any amendment or papers supplemental thereto; and each of the undersigned does hereby fully ratify and confirm all that said attorneys and agents, or any of them, or the substitute of any of them, shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, each of the undersigned has subscribed these presents, as of this 24th day of March, 1995.
NAME TITLE
/s/ Keith E. Trost Director and President (Principal Executive Officer)
/s/ Stephen D. Carp Vice President, Finance and Assistant Secretary (Principal Financial and Accounting Officer)
/s/ James A. Blanda Director
/s/ James D. Constantine Director
/s/ Alan J. Lacy Director
/s/ Alice M. Peterson Director
/s/ Larry R. Raymond Director
/s/ George F. Slook Director