SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________
FORM 10-K
/ X / ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1993
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______ to________
Commission file number 0-17955
SEARS DC CORP.
(Exact name of registrant as specified in its charter)
Delaware 36-3533346
(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: 302/888-3114
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to
Section 12(g) of the Act: Common Stock, Value $1.00 per share
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 .
Disclosure of delinquent filers pursuant to Item 405 of Regulation S-K
is not contained herein, and will not be contained, to the best of
registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment
to this Form 10-K. / X /
As of February 28, 1994, the Registrant had 1,000 shares of capital
stock outstanding, all of which was held by Sears, Roebuck and Co.
Registrant meets the conditions set forth in General Instruction
(J)(1)(a) and (b) of Form 10-K and is therefore filing this report with
a reduced disclosure format.
Effective May 26, 1993, Registrant changed its name from Discover Credit
Corp. to Sears DC Corp.
DOCUMENTS INCORPORATED BY REFERENCE
Part of Form 10-K
None
<PAGE>
PART I
Item 1. Business.
Sears DC Corp. ("SDC"), a wholly-owned subsidiary of Sears,
Roebuck and Co. ("Sears") organized under the laws of Delaware in
January 1987, was formed to borrow in domestic and foreign debt markets
and lend the proceeds of such borrowings to direct and indirect
subsidiaries of Sears ("SDC borrowers") in exchange for unsecured notes.
SDC raised funds through the sale of its medium-term notes and direct
placement of commercial paper with corporate and institutional
investors. Commercial paper was sold by Sears Roebuck Acceptance Corp.,
an affiliate of SDC, as agent, with expenses, but no fees, being paid by
SDC.
Historically, the proceeds of SDC's borrowings were loaned to
Sears Consumer Financial Corporation of Delaware ("SCFCD"), a wholly-
owned subsidiary of Dean Witter, Discover & Co. ("DWDC"), to finance the
accounts receivable generated by the Discover Card and consumer
installment notes receivable. However, as a result of the strategic
repositioning of Sears, the business of SDC changed significantly. In
the last quarter of 1992, SDC stopped selling medium-term notes. On
March 1, 1993, DWDC, until then a wholly-owned subsidiary of Sears,
completed the sale of 19.9% of its outstanding capital stock through a
primary initial public offering. Also in March 1993, SDC discontinued
issuing commercial paper, and was repaid by SCFCD the amounts
outstanding and owing to SDC. In June of 1993, Sears spun-off its 80.1%
ownership interest in DWDC to Sears shareholders.
On March 9, 1993, SDC entered into a loan agreement with Sears
for the investment of funds received upon the prepayment of the notes of
SCFCD. The interest rate paid to SDC by Sears under this agreement is
designed to produce earnings sufficient to cover SDC's fixed charges
(principally interest on SDC's indebtedness) at least 1.005 times
(reduced from the previous amount of 1.25 times in March 1994, since SDC
is no longer actively involved in new financing). Required payments of
principal and interest to SDC under the Sears borrowing agreement will
be sufficient to allow SDC to make timely payments of principal and
interest to the holders of its securities.
The Net Worth Maintenance Agreement between Sears and SDC is
still in effect for the benefit of holders of debt securities issued by
SDC. This agreement provides for Sears to maintain ownership of and
positive stockholder's equity in SDC.
At February 28, 1994, SDC had no employees on its payroll and
its officers and directors consisted of employees of affiliated
companies. Its offices are located at 3711 Kennett Pike, Greenville,
Delaware 19807.
Effective May 26, 1993, SDC changed its name from Discover
Credit Corp.
Item 2. Properties.
None.
Item 3. Legal Proceedings.
None.
Item 4. Submission of Matters to a Vote of Security Holders.
Not applicable.
PART II
Item 5. Market for Registrant's Common Equity and
Related Stockholder Matters.
There is no established public trading market for SDC's common
stock. As of February 28, 1994, Sears owned all outstanding shares of
SDC's common stock. The Board of Directors of SDC declared a $167.4
million dividend on December 20, 1993 to Sears, payable on December 30,
1993. The Board also approved payment to Sears on December 30, 1993 of
$319.1 million out of Capital in Excess of Par Value; such payment is
characterized as a dividend under the Delaware General Corporation Law.
Payment was effected by reducing SDC's investment in the Notes of Sears
by $486.5 million.
Item 6. Selected Financial Data.
Not applicable.
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations.
Financial Condition
On March 15, 1993, SDC received funds from DWDC's initial
public offering, and a concurrent debt issuance, through SCFCD in
amounts sufficient to repay the balances on the notes of SCFCD. SDC
used these funds to repay short-term borrowings and current maturities
of medium-term notes. SDC invested the remainder of these funds in the
promissory notes of Sears, which pay interest sufficient to cover SDC's
fixed charges 1.005 times, and in highly liquid short-term investments.
As of December 31, 1993, the remaining proceeds of $2.2 billion were
fully invested in the notes of Sears. SDC intends to use these funds to
repay the maturities of its medium-term notes.
In March 1993, SDC discontinued issuing commercial paper. The
last of SDC's commercial paper matured in October 1993. SDC had
discontinued the sale of medium-term notes in the last quarter of 1992.
The $2.2 billion in outstanding medium-term notes as of December 31,
1993 are not redeemable prior to their stated maturity except for notes
having a stated maturity at the time of issue of more than seven years
which may be redeemed under certain circumstances in the event of
declining Discover Card receivables.
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 SDC's assets and
liabilities are monetary in nature. Interest rates on SDC's investment
in Sears notes are set to provide for a fixed charge coverage of at
least 1.005. This maintenance mechanism insulates SDC from bearing the
effects of inflation-based interest rate increases.
Results of Operations
Due to the significant reduction in the company's outstanding
debt, interest and related expenses decreased 19.5% to $190.6 million in
1993 from $236.6 million in 1992. The company's net income remained at
approximately the same level for both years primarily because the rate
on Sears notes in the third quarter was not adjusted until after the end
of the third quarter. Earnings covered fixed charges 1.32 times for
1993 compared to 1.25 times in 1992 and 1991.
<PAGE>
Item 8. Financial Statements and Supplementary Data.
SEARS DC CORP.
STATEMENTS OF INCOME
Year Ended December 31,
millions 1993 1992 1991
------- ------- -------
Revenues
Earnings on notes of Sears $196.9 $ - $ -
Earnings on notes of SCFCD 52.6 289.4 345.7
Earnings on invested cash 2.7 8.8 14.1
------- ------- -------
Total revenues 252.2 298.2 359.8
Expenses
Interest and related expense 190.6 236.6 285.4
Operating expenses 1.5 1.9 2.2
------- ------- -------
Total expenses 192.1 238.5 287.6
------- ------- -------
Income before income taxes 60.1 59.7 72.2
Income taxes 21.0 20.3 24.5
------- ------- -------
Net Income $39.1 $39.4 $47.7
------- ------- -------
Ratio of earnings to fixed charges 1.32 1.25 1.25
See notes to financial statements.
<PAGE>
SEARS DC CORP.
STATEMENTS OF FINANCIAL POSITION
December 31,
millions 1993 1992
------- -------
Assets
Notes of Sears $2,194.4 $ -
Notes of SCFCD - 4,622.4
Cash and invested cash 0.1 85.4
Accrued interest and other assets 5.6 39.7
------- --------
Total assets $2,200.1 $4,747.5
------- --------
Liabilities
Commercial paper (net of unamortized
discount of $6.5) $ - $1,840.0
Medium-term notes 2,147.8 2,405.4
Accrued interest and other liabilities 48.5 50.9
------- --------
Total liabilities 2,196.3 4,296.3
------- --------
Stockholder's Equity
Capital stock, par value $1.00 per share
1,000 shares authorized,issued and outstanding - -
Capital in excess of par value - 319.1
Retained income 3.8 132.1
------- --------
Total stockholder's equity 3.8 451.2
------- --------
Total liabilities and stockholder's equity $2,200.1 $4,747.5
------- --------
See notes to financial statements.
<PAGE>
SEARS DC CORP.
STATEMENTS OF STOCKHOLDER'S EQUITY
Year Ended December 31,
millions 1993 1992 1991
-------- -------- --------
Capital stock $ - $ - $ -
-------- -------- --------
Capital in excess of par value
Beginning of year $319.1 $319.1 $319.1
Return of capital paid to Sears (319.1) - -
-------- -------- --------
End of year $ - $319.1 $319.1
-------- -------- --------
Retained income
Beginning of year $132.1 $ 92.7 $ 87.5
Net income 39.1 39.4 47.7
Dividend paid to Sears (167.4) - (42.5)
-------- -------- --------
End of year $ 3.8 $132.1 $ 92.7
-------- -------- --------
Total stockholder's equity $ 3.8 $451.2 $411.8
-------- -------- --------
See notes to financial statements.
<PAGE>
SEARS DC CORP.
STATEMENTS OF CASH FLOWS
Year Ended December 31,
millions 1993 1992 1991
------- ------- -------
Cash Flows From Operating Activities
Net income $39.1 $ 39.4 $ 47.7
Adjustments to reconcile net income to net
cash provided by operating activities
Net change in other assets and
other liabilities 31.7 (.7) 24.2
------- ------- -------
Net cash provided by operating activities 70.8 38.7 71.9
Cash Flows From Investing Activities
Decrease(increase) in notes of SCFCD 4,622.4 (914.9) 236.7
Increase in notes of Sears (2,680.9) - -
-------- -------- ---------
Net cash provided by (used in) investing
activities 1,941.5 (914.9) 236.7
Cash Flows From Financing Activities
Decrease in commercial paper,
primarily 90 days or less (1,840.0) (225.5) (1,339.6)
Proceeds from medium-term notes - 1,501.0 1,178.5
Repayments of medium-term notes (257.6) (405.4) (3.8)
Proceeds from subordinated note to Sears - - 7.0
Repayments of subordinated note to Sears - - (17.0)
Dividends paid to Sears - - (42.5)
--------- --------- --------
Net cash (used in) provided by
financing activities (2,097.6) 870.1 (217.4)
--------- --------- --------
Net (decrease) increase in cash
and invested cash (85.3) (6.1) 91.2
Cash and invested cash, beginning of year 85.4 91.5 0.3
--------- --------- ---------
Cash and invested cash, end of year $ 0.1 $ 85.4 $ 91.5
--------- --------- ---------
Supplemental Disclosure of Cash Flow Information
Cash paid during the year
Interest $181.7 $230.5 $250.8
Income taxes 32.1 13.1 25.5
See notes to financial statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Sears DC Corp. ("SDC"), a wholly owned subsidiary of Sears, Roebuck and
Co. ("Sears"), was principally engaged in the borrowing in domestic and
foreign debt markets and lending the proceeds of such borrowings to
certain direct and indirect subsidiaries of Sears in exchange for their
unsecured notes. Effective May 26, 1993, the company's name was changed
to Sears DC Corp. from Discover Credit Corp.
Historically, the proceeds of SDC's borrowings were loaned to Sears
Consumer Financial Corporation of Delaware ("SCFCD"), a wholly-owned
subsidiary of Dean Witter, Discover & Co. ("DWDC"), to finance the
accounts receivable generated by the Discover Card and consumer
installment notes receivable. However, as a result of the strategic
repositioning of Sears, the business of SDC changed significantly. In
the last quarter of 1992, SDC stopped selling medium-term notes. On
March 1, 1993, DWDC, until then a wholly-owned subsidiary of Sears,
completed the sale of 19.9% of its outstanding capital stock through a
primary initial public offering. Sears spun-off its 80.1% ownership
interest in DWDC to Sears shareholders in June 1993. Also in March
1993, SDC discontinued issuing commercial paper, and was repaid by SCFCD
the amounts outstanding and owing to SDC.
On March 9, 1993, SDC entered into a loan agreement with Sears for the
investment of funds received upon the prepayment of the notes of SCFCD.
The interest rate paid to SDC by Sears under this agreement is designed
to produce earnings sufficient to cover SDC's fixed charges (principally
interest on SDC's indebtedness) at least 1.25 times. On March 22, 1994,
the agreement was amended to reduce the fixed charge coverage to 1.005.
Required payments of principal and interest to SDC under the Sears
borrowing agreement will be sufficient to allow SDC to make timely
payments of principal and interest to the holders of its securities.
Cash and invested cash is defined to include all highly liquid
investments with maturities of three months or less. The return of
capital and dividend totalling $486.5 million paid to Sears in 1993 were
effected through a non-cash transaction as a reduction in SDC's
investment in Sears Notes.
The results of operations of SDC are included in the consolidated
federal income tax return of Sears. Tax liabilities and benefits are
allocated as generated by SDC, whether or not such benefits would be
currently available on a separate return basis. Taxes are provided
based on the statutory federal income tax rate.
Effective January 1, 1992, SDC 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 SDC, and will have
no effect on the future cash flows of the Company.
2. BORROWINGS
Historically, SDC obtained funds through the direct placement of
commercial paper (issued in maturities of one to 270 days) and the sale
of medium-term notes. The medium-term notes are not redeemable except
for notes having a stated maturity at the time of issue of more than
seven years which may be redeemed under certain circumstances in the
event of declining Discover Card receivables. At December 31, 1993, the
fair market value of medium-term notes, carried at $2,147.8 million, was
$2,297.5 million based on discounted cash flows using interest rates of
comparable borrowings. Selected details of SDC's borrowings are shown
below. Weighted average interest rates are based on the actual number
of days in the year and borrowings net of unamortized discount.
December 31,
millions 1993 1992
-------- --------
Commercial paper outstanding $ - $1,846.5
Less: Unamortized discount - 6.5
-------- --------
Commercial paper outstanding (net) - 1,840.0
3.24% to 9.26% medium-term notes due 1993-2012 2,147.8 2,405.4
-------- --------
Total borrowings $2,147.8 $4,245.4
-------- --------
1993 1992
------------------- --------------------
Maximum Maximum
millions Average (month-end) Average (month-end)
------------------- --------------------
Commercial paper outstanding $546.8 $1,781.8 $2,135.8 $2,542.1
Average Year-End Average Year-end
------------------- --------------------
Weighted Interest Rates 4.02% - 3.99% 4.17%
At December 31, 1993, medium-term note maturities for the next five years were
as follows:
1994 $ 626.4
1995 292.7
1996 449.8
1997 335.1
1998 111.3
Item 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure.
None.
PART III
Item 10. Directors and Executive Officers of the Registrant.
Not applicable.
Item 11. Executive Compensation.
Not applicable.
Item 12. Security Ownership of Certain Beneficial Owners
and Management.
Not applicable.
Item 13. Certain Relationships and Related Transactions.
Not applicable.
PART IV
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:
A report on Form 8-K was filed by the Registrant dated
December 20, 1993 (Item 5).
<PAGE>
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 DC CORP.
(Registrant)
By Paul D. Melancon*
Vice President and Controller
March 30, 1994
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
Alice M. Peterson* Director, President and )
Chief Executive Officer )
(Principal Executive )
Officer) )
)
)
Paul D. Melancon* Vice President and Controller ) March
30, 1994
(Principal Accounting )
Officer) )
)
Larry R. Raymond* Vice President and Treasurer )
(Principal Financial Officer))
)
James A. Blanda* Director )
)
James D. Constantine* Director )
)
Michael W. Phillips* Director )
*By /s/ PAUL D. MELANCON Individually and as Attorney-in-Fact
Paul D. Melancon
<PAGE>
SEARS DC CORP.
INDEX TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
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 9-10
REPORT OF INDEPENDENT CERTIFIED
PUBLIC ACCOUNTANTS S-2
S-1
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Stockholder and Board of Directors of
Sears DC Corp.
Greenville, Delaware
We have audited the accompanying Statements of Financial Position of Sears DC
Corp. (formerly Discover Credit Corp.) (a wholly owned subsidiary of Sears,
Roebuck and Co.) as of December 31, 1993 and 1992, and the related Statements
of Income, Stockholder's Equity and Cash Flows for each of the three years in
the period ended December 31, 1993. 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 DC Corp. as of December 31, 1993 and
1992, and the results of its operations and its cash flows for each of the
three years in the period ended December 31, 1993, in conformity with
generally accepted accounting principles.
DELOITTE & TOUCHE
February 11, 1994
Philadelphia, Pennsylvania
S-2
<PAGE>
EXHIBIT INDEX
3(a) Certificate of Incorporation of Discover Credit Corp. dated
January 9, 1987 [Incorporated by reference to Exhibit 3(a) to
Form 10 of the Registrant (Form 10)*]
3(b) Amendment to Certificate of Incorporation of Discover Credit
Corp. dated April 9, 1987 [Incorporated by reference to
Exhibit 3(b) to Form 10*]
3(c) By-laws of Discover Credit Corp., as amended to May 22, 1992
[Incorporated by reference to Exhibit 3(c) to Annual Report on
Form 10-K of the Registrant for the year ended December 31,
1992*]
4(a) Net Worth Maintenance Agreement between Discover Credit Corp.
and Sears, Roebuck and Co., dated as of November 13, 1987
[Incorporated by reference to Exhibit 4 to Form 10*]
4(b) $1,850,000,000 Credit Agreement dated as of June 23, 1992,
among Discover Credit Corp., the Banks Listed therein, The
Lead Managers Referred to therein, The Co-Agents Referred to
therein, and Chemical Bank, as Agent [Incorporated by
reference to Exhibit 4(b) to Quarterly Report of the
Registrant on Form 10-Q for the quarter ended June 30, 1992*]
4(c) Indenture, dated as of January 30, 1990, between Disc
Credit Corp. and Bank of Delaware, as Trustee [Incorporated
by reference to Exhibit 4 to Amendment No. 1 to Registration
Statement No. 33-30807]
4(d) Supplemental Indenture dated as of April 30, 1990 between
Discover Credit Corp. and Bank of Delaware as Trustee
[Incorporated by reference to Exhibit 4 to the Registrant's
Quarterly Report on Form 10-Q for the Quarter Ended June 30,
1990*]
4(e) Forms of fixed rate Medium-Term Note and floating rate
Medium-Term Note [Incorporated by reference to Exhibits 4.1
and 4.2 to Current Report on Form 8-K of the Registrant dated
February 9, 1990*]
4(f) Indenture, dated as of June 1, 1991 between Discover Credit
Corp. and Bank of Delaware as Trustee [Incorporated by
reference to Exhibit 4 to Registration Statement No. 33-40056]
4(g) Forms of fixed rate Medium-Term Note Series II and floating
rate Medium-Term Note Series II [Incorporated by refere
Exhibits 4.2 and 4.3 to Current Report on Form 8-K of the
Registrant dated June 20, 1991*]
4(h) Indenture, dated as of February 15, 1992, between Discover
Credit Corp. and Harris Trust Company of New York
[Incorporated by reference to Exhibit 4.1 to Current Report on
Form 8-K of the Registrant dated February 28, 1992*]
____________________________
* SEC File No. 0-17955
E-1
<PAGE>
EXHIBIT INDEX
4(i) Forms of fixed rate Medium Term Note Series III and floating
rate Medium Term Note Series III [Incorporated by reference to
Exhibits 4.2 and 4.3 to Current Report on Form 8-K of the
Registrant dated February 28, 1992*]
4(j) First Amendment dated as of May 28, 1993 to the $1.85 billion
Credit Agreement dated as of June 23, 1993 among the
Registrant, the banks listed on the signature page thereof,
the lead managers and co-agents referred to therein, and
Chemical Bank, as agent. [Incorporated by reference to Exhibit
4(b) to Quarterly Report on Form 10-Q of the Registrant for
the Quarter Ended June 30, 1993*]
4(k) Termination Letter dated as of August 20, 1993 to the $1.85
Billion Credit Agreement dated as of June 23, 1992 among the
Registrant, the banks listed on the signature page thereof, the
lead managers and co-agents referred to therein, and Chemical
Bank as agent. [Incorporated by reference to Exhibit 4(b) to
Quarterly Report on Form 10-Q of the Registrant for the Quarter
Ended September 30, 1993*]
4(l) 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
percent of the total assets of the Registrant.
10(a) Letter Agreement dated March 9, 1993 between Sears, Roebuck and
Co. and Discover Credit Corp. [Incorporated by reference to
Exhibit 10(g) to Annual Report on Form 10-K of the Registrant
for the year ended December 31, 1992*]
10(b) Amendment dated March 22, 1994 to Letter Agreement dated March
9, 1993 between Sears, Roebuck and Co. and Discover Credit
Corp.**
12 Calculation of ratio of earnings to fixed charges**
23 Consent of Deloitte & Touche**
24 Power of attorney**
28(a) Current Report on Form 8-K of Sears, Roebuck and Co., for
January 11, 1994 [Incorporated by reference, File No. 1-416]
28(b) Current Report on Form 8-K of Sears, Roebuck and Co., for
February 1, 1994 [Incorporated by reference, File No. 1-416]
28(c) Current Report on Form 8-K of Sears, Roebuck and Co., for March
9, 1994 [Incorporated by reference, File No. 1-416]
____________________________
* SEC File No. 0-17955
** Filed herewith
E-2
<PAGE>
EXHIBIT INDEX
28(d) Current Report on Form 8-K of Sears, Roebuck and Co., for March
21, 1994 [Incorporated by reference, File No. 1-416]
28(e) Annual Report on Form 10-K of Sears, Roebuck and Co. for the
year ended December 31, 1993 [Incorporated by reference,
File No. 1-416]
____________________________
* SEC File No. 0-17955
** Filed herewith
E-3
<PAGE>
Exhibit 10(b)
SEARS, ROEBUCK AND CO.
SEARS TOWER
CHICAGO, ILLINOIS 60684
March 22, 1994
Sears DC Corp.
3711 Kennett Pike
Greenville, DE 19807
Gentlemen:
We refer to the letter agreement relating to certain borrowing
arrangements between Sears DC Corp. (formerly "Discover Credit Corp.") and
Sears, Roebuck and Co. dated March 9, 1993.
We confirm that the figure "1.25" referred to in paragraph 3.a of said
letter agreement is amended to read "1.005", effective as of the date hereof.
Otherwise than as specifically amended hereby, said letter agreement
remains in full force and effect.
Please indicate your acceptance of this amendment by the signature of
a duly authorized officer in the space provided below and on the duplicate
original of this letter which is enclosed.
Very truly yours,
SEARS, ROEBUCK AND CO.
By /S/ ALICE M. PETERSON
Alice M. Peterson
Vice President
and Treasurer
SEARS DC CORP.
By /S/ LARRY R. RAYMOND
Larry R. Raymond
Vice President and Treasurer
<PAGE>
Exhibit 12
SEARS DC CORP.
CALCULATION OF RATIO OF EARNINGS TO FIXED CHARGES
millions
Year Ended December 31
1993 1992 1991
NET INCOME $ 39.1 $ 39.4 $ 47.7
INCOME TAXES 21.0 20.3 24.5
FIXED CHARGES, INTEREST
AND RELATED CHARGES 190.6 236.6 285.4
(i) EARNINGS AVAILABLE FOR
FIXED CHARGES 250.7 296.3 357.6
(ii) FIXED CHARGES 190.6 236.6 285.4
RATIO OF EARNINGS TO
FIXED CHARGES (i/ii) 1.32 1.25 1.25
<PAGE>
Exhibit 23
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We consent to the incorporation by reference in Registration Statement Nos. 33-
30807, 33-40056 and 33-44671 of Sears DC Corp. (formerly Discover Credit Corp.)
of our report dated February 11, 1994 appearing in this Annual Report on Form
10-K of Sears DC Corp. for the year ended December 31, 1993.
DELOITTE & TOUCHE
Philadelphia, Pennsylvania
March 28, 1994
<PAGE>
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 DC CORP., a Delaware corporation (the
"Corporation"), does hereby constitute and appoint JAMES A. BLANDA, ALICE M.
PETERSON, LARRY R. RAYMOND, PAUL D. MELANCON, RICHARD F. KOTZ and KEITH E.
TROST, 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 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 a 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 25th day of March, 1994.
NAME TITLE
/S/ ALICE M. PETERSON Director, President and
Alice M. Peterson Chief Executive Officer
(Principal Executive
Officer)
/S/ LARRY R. RAYMOND Vice President and Treasurer
Larry R. Raymond (Principal Financial
Officer)
/S/ PAUL D. MELANCON Vice President and Controller
Paul D. Melancon (Principal Accounting
Officer)
<PAGE>
NAME TITLE
/S/ JAMES A. BLANDA Director
James A. Blanda
/S/ JAMES D. CONSTANTINE Director
James D. Constantine
-2-
