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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(MARK ONE)
[ ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
OR
[X] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE PERIOD FROM JANUARY 1, 1998 THROUGH NOVEMBER 30, 1998
COMMISSION FILE NUMBER 0-21506
DISCOVER CARD TRUST 1993 B
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE NOT APPLICABLE
(State of Organization) (I.R.S. Employer Identification No.)
C/O DISCOVER RECEIVABLES FINANCING GROUP, INC.
12 READ'S WAY
NEW CASTLE, DELAWARE 19720 19720
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (302) 323-7184
Securities registered pursuant to Section 12(b) of the Act:
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH EACH CLASS
TO BE SO REGISTERED IS TO BE REGISTERED
------------------- -------------------
None Not Applicable
Securities registered pursuant to Section 12(g) of the Act:
6.75% CLASS A CREDIT CARD PASS-THROUGH CERTIFICATES
7.10% CLASS B CREDIT CARD PASS-THROUGH CERTIFICATES
(Title of Class)
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
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Indicate by check mark if 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]
Index to Exhibits Appears on Page 6
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PART I
ITEM 1. BUSINESS
The Discover Card Trust 1993 B (the "Trust") was formed pursuant to a
Pooling and Servicing Agreement dated as of February 1, 1993 (the "Pooling and
Servicing Agreement") among Greenwood Trust Company ("Greenwood") as Servicer,
Discover Receivables Financing Group, Inc. ("DRFG") as Seller, and Wilmington
Trust Company as Trustee (the "Trustee"). The Trust's only business is to act as
a passive conduit to permit investment in a pool of retail consumer receivables.
ITEM 2. PROPERTIES
The property of the Trust includes a portfolio of receivables (the
"Receivables") arising under selected Discover Card accounts (the "Accounts")
originated by Greenwood, all monies due or to become due in payment of the
Receivables, all proceeds of the Receivables, all monies on deposit in certain
accounts and a certain limited credit enhancement for the exclusive direct
benefit of holders of 7.10% Class B Credit Card Pass-Through Certificates of the
Trust (the "Class B Certificates"). At or prior to the time of the Trust's
formation, Sears, Roebuck and Co. ("Sears") sold or contributed to DRFG
Receivables existing under the Accounts as of February 1, 1993 and theretofore
acquired by Sears from Greenwood; SCFC Receivables Corp. ("SRC") sold or
contributed to DRFG Receivables existing under the Accounts as of February 1,
1993 and theretofore acquired by SRC from Greenwood; and Greenwood sold to DRFG,
all other Receivables existing under the Accounts as of February 1, 1993 and all
Receivables existing under the Accounts from time to time thereafter. DRFG, in
turn, transferred to the Trust all Receivables existing under the Accounts as of
February 1, 1993 and all Receivables arising under the Accounts from time to
time thereafter until the termination of the Trust. Information related to the
performance of the Receivables during the transition period from January 1, 1998
through November 30, 1998 is set forth in the ANNUAL AGGREGATE REPORT filed as
Exhibit 99(A) to this Transition Report on Form 10-K.
ITEM 3. LEGAL PROCEEDINGS
Greenwood is involved from time to time in various legal proceedings that
arise in the ordinary course of its business. Greenwood does not believe that
the resolution of any of these proceedings will have a material adverse effect
on Greenwood's financial condition or on the Receivables. There can be no
assurance, however, regarding any of these effects.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The 6.75% Class A Credit Card Pass-Through Certificates (the "Class A
Certificates") and the Class B Certificates are held and delivered in book-entry
form through the facilities of The Depository Trust Company ("DTC"), a "clearing
agency" registered pursuant to
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the provisions of Section 17A of the Securities Exchange Act of 1934, as
amended. The definitive Class A Certificates and Class B Certificates are held
by Cede & Co., the nominee of DTC.
ITEM 9. CHANGES IN AND DISAGREEMENT WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
PART III
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
As of February 16, 1999, 100% of the Class A Certificates and the Class B
Certificates was held in the nominee name Cede & Co. for beneficial owners.
As of February 16, 1999, Greenwood and DRFG, as tenants-in-common, owned
100% of the uncertificated Seller Certificate, which represented beneficial
ownership of a residual interest in the assets of the Trust as provided in the
Pooling and Servicing Agreement.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) Exhibits:
23. Consent of Deloitte & Touche LLP.
99. (A) 1998 ANNUAL AGGREGATE REPORT prepared by the Servicer (relating
to the transition period from January 1, 1998 through November
30, 1998).
(B) ANNUAL INDEPENDENT ACCOUNTANTS' REPORT pursuant to Section 3.06
of the Pooling and Servicing Agreement.
(C) MANAGEMENT'S REPORT ON INTERNAL CONTROL RELATED TO SERVICING
PROCEDURES.
(b) Reports on Form 8-K:
Current Reports on Form 8-K are filed on or about the Distribution Date
each month (typically the 15th of the month). The reports include as an exhibit,
the MONTHLY INVESTOR CERTIFICATEHOLDERS' STATEMENT. Current Reports on Form 8-K
were filed on January 15, 1998, February 17, 1998, March 12, 1998, April 15,
1998, May 13, 1998, June 15,
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1998, July 15, 1998, August 11, 1998, September 15, 1998, October 15, 1998,
November 16, 1998, December 15, 1998, January 15, 1999 and February 16, 1999.
A Current Report on Form 8-K was also filed on December 2, 1998 with
respect to the execution and delivery of the Second Amendment to the Pooling and
Servicing Agreement and a change in the registrant's fiscal year.
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SIGNATURES
Pursuant to the requirements of Section 13 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.
Discover Card Trust 1993 B
(Registrant)
By: Discover Receivables Financing Group, Inc.
(Originator of the Trust)
Dated: February 26, 1999 By: /s/ Richard W. York
-------------------------------------------
Richard W. York
Title: Vice President
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EXHIBIT INDEX
Exhibit No.
23. Consent of Deloitte & Touche LLP.
99. (A) 1998 ANNUAL AGGREGATE REPORT prepared by the Servicer (relating to
the transition period from January 1, 1998 through November 30,
1998).
(B) ANNUAL INDEPENDENT ACCOUNTANTS' REPORT pursuant to Section 3.06 of
the Pooling and Servicing Agreement.
(C) MANAGEMENT'S REPORT ON INTERNAL CONTROL RELATED TO SERVICING
PROCEDURES.
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EXHIBIT 23
INDEPENDENT ACCOUNTANTS' CONSENT
We consent to incorporation by reference in the Registration Statement on Form
S-1 of Discover Card Trust 1993 B (Registration Number 33-57302) of the
Independent Accountants' Report dated January 22, 1999, delivered pursuant to
Section 3.06 of the Pooling and Servicing Agreement dated as of February 1,
1993, as amended, between Greenwood Trust Company and Wilmington Trust Company
as Trustee, filed as Exhibit 99(B) to the Transition Report on Form 10-K of
Discover Card Trust 1993 B for the period from January 1, 1998 through November
30, 1998.
/s/ Deloitte & Touche, LLP
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February 19, 1999
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DISCOVER CARD TRUST 1993 B Exhibit 99(A)
Credit Card Pass-Through Certificates
Distribution and Performance
Annual Aggregate Report - 1998
Under the Pooling and Servicing Agreement dated as of October 1, 1991 (the
"Agreement") by and among Greenwood Trust Company (the "Servicer"), Discover
Receivables Financing Group, Inc. and Wilmington Trust Company, as Trustee, the
distributions to Investor Certificateholders and the performance of the Trust
during the previous month. For purposes of filing Form 10-K, certain information
is required to be prepared with respect to the Distribution Dates occurring
during the transition period from January 1, 1998 to November 30, 1998. The
information which is required to be prepared with respect to such Distribution
Dates related to the year mentioned above is set forth below. Certain of the
information is presented on the basis of an original principal amount of $1,000
per Investor Certificate. Certain other information is presented based upon the
aggregate amounts for the Trust as a whole.
A. Information Regarding the Aggregate Distributions for the Eleven Months
Ending November 30, 1998
------------------------
1. Class A Certificates
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(a) The aggregate amount of the distribution to
Class A Certificateholders on the related
Distribution Dates. $15,525,000.00
(b) The amount of the distribution set forth in
paragraph (a) above in respect of interest. $15,525,000.00
(c) The amount of the distribution set forth in
paragraph (a) above in respect of principal. $0.00
(d) The amount of the distribution set forth in
paragraph (a) above, per $1,000 interest. $67.500000000
(e) The amount of the distribution set forth in
paragraph (b) above, per $1,000 interest. $67.500000000
(f) The amount of the distribution set forth in
paragraph (c) above, per $1,000 interest. $0.000000000
2. Class B Certificates
(a) The aggregate amount of the distribution to
Class B Certificateholders on the related
Distribution Dates. $1,633,000.00
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(b) The amount of the distribution set forth in
paragraph (a) above in respect of interest. $1,633,000.00
(c) The amount of the distribution set forth in
paragraph (a) above in respect
of principal. $0.00
(d) The amount of the distribution set forth in
paragraph (a) above, per $1,000 interest. $71.000000000
(e) The amount of the distribution set forth in
paragraph (b) above, per 1,000 interest. $71.000000000
(f) The amount of the distribution set forth in
paragraph (c) above, per 1,000 interest. $0.000000000
B. Information Regarding the Performance of the Trust
--------------------------------------------------
1. Collections of Receivables
--------------------------
(a) The aggregate amount of Finance Charge Collections
processed during the related Due Periods. $50,102,592.60
(b) The aggregate amount of Principal Collections
processed during the related Due Period. $620,622,159.77
(c) The aggregate amount of Finance Charge
Collections processed during the related Due
Periods which was allocated in respect of the
Investor Certificates. $39,919,195.48
(d) The aggregate amount of Principal Collections
processed during the related Due Periods which was
allocated in respect of the Investor Certificates. $494,030,110.61
(e) The aggregate amount of Finance Charge Collections
processed during the related Due Periods which was
allocated in respect of the Class A Certificates. $36,290,047.02
(f) The aggregate amount of Principal Collections
processed during the related Due Periods which was
allocated in respect of the Class A Certificates. $449,117,255.74
(g) The aggregate amount of Finance Charge Collections
processed during the related Due Periods which was
allocated in respect of the Class B Certificates. $3,629,148.46
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(h) The aggregate amount of Principal Collections
processed during the related Due Periods which was
allocated in respect of the Class B Certificates. $44,912,854.87
(i) The aggregate amount of Finance Charge Collections
processed during the related Due Periods which was
allocated in respect of the Seller Certificate. $10,183,396.12
(j) The aggregate amount of Principal Collections
processed during the related Due Periods which was
allocated in respect of the Seller Certificate. $126,592,049.16
2. Investor Losses; Reimbursement of Charge-offs
---------------------------------------------
(a) The aggregate amount of Class A Investor Losses,
as defined in Section 4.04 (b) of the Agreement,
during the related Due Periods. $0.00
(b) The aggregate amount of Class B Investor Losses,
as defined in Section 4.04 (b) of the Agreement,
during the related Due Periods. $0.00
(c) The amount of Class A Investor Losses set forth
in paragraph (a) above, per $1,000 interest. $0.000000000
(d) The amount of Class B Investor Losses set forth
in paragraph (b) above, per $1,000 interest. $0.000000000
(e) The total amount reimbursed to the Trust in the
current year pursuant to Section 4.04 (c) of the
Agreement, if any, in respect of Class A Investor
Losses. $0.00
(f) The total amount reimbursed to the Trust in the
current year pursuant to Section 4.04 (c) of the
Agreement, if any, in respect of Class B Investor
Losses. $0.00
(g) The amount set forth in paragraph (e) above, per
$1,000 interest. $0.000000000
(h) The amount set forth in paragraph (f) above, per
$1,000 interest. $0.000000000
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(i) The aggregate amount of unreimbursed Class B Investor
Losses in the Trust as of November 30, 1998. $0.00
(j) The aggregate amount of unreimbursed Class B Investor
losses in the Trust as of November 30, 1998. $0.00
(k) The amount set forth in paragraph (i) above,
per $1,000 interest. $0.000000000
(l) The amount set forth in paragraph (j) above,
per $1,000 interest. $0.000000000
3. Investor Servicing Fee
----------------------
(a) The amount of the Class A Monthly Servicing Fee
payable by the Trust to the Servicer for the eleven
months ended November 30, 1998. $4,216,657.85
(b) The amount of the Class B Monthly Servicing Fee
payable by the Trust to the Servicer for the eleven
months ended November 30, 1998. $421,680.20
4. Available Class B Credit Enhancement Amount
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(a) The amount available to be drawn under the Class B
Credit Enhancement pursuant to Section 4.03 (c) (i), (g)
and (h) of the Agreement as of the Distribution Date prior
to November 30, 1998. $12,650,000.00
(b) The amount set forth in paragraph (a) above as a
percentage of the Class B Interest. 55.00%
5. The Pool Factor
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The Pool Factor represents the ratio of the amount
of the Investor Interest as of the Distribution Date
prior to November 30, 1998 to the amount of the
Investor Interest as of the Closing Date. The amount
of a Certificateholder's pro-rata share of the
Investor Interest can be determined by multiplying
the original denomination of the Certificateholder's
Certificate by the Pool Factor.
(a) Class A Certificates $1.000000000
(b) Class B Certificates $1.000000000
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EXHIBIT 99(B)
INDEPENDENT ACCOUNTANTS' REPORT
The Board of Directors
Greenwood Trust Company and
Wilmington Trust Company:
We have examined management's assertion, dated January 21, 1999, that, as of
November 30, 1998, Greenwood Trust Company ("GTC") maintained effective internal
control over financial reporting, insofar as such internal control relates to
the servicing procedures provided by GTC to prevent or detect misstatements due
to error or fraud in amounts that would be material in relation to the assets of
the Discover Card Trust 1993B (the "Trust") under the Pooling and Servicing
Agreement Sections 3.02, 4.03, 4.06, 4.07, 4.09, and 8.07, dated February 1,
1993 (the "Agreement").
Our examination was made in accordance with standards established by the
American Institute of Certified Public Accountants and, accordingly, included
obtaining an understanding of internal control over financial reporting,
testing, and evaluating the design and operating effectiveness of internal
control, and such other procedures as we considered necessary in the
circumstances. We believe that our examination provides a reasonable basis for
our opinion.
Because of inherent limitations in any internal control, misstatements due to
error or fraud may occur and not be detected. Also, projections of any
evaluation of internal control over financial reporting to future periods are
subject to the risk that the internal control may become inadequate because of
changes in conditions, or that the degree of compliance with the policies or
procedures may deteriorate.
In our opinion, management's assertion that, as of November 30, 1998, GTC
maintained effective internal control over financial reporting, insofar as such
internal control relates to the servicing procedures provided by GTC, to prevent
or detect misstatements due to error or fraud in amounts that would be material
in relation to the assets of the Trust under the Agreement, taken as a whole, is
fairly stated, in all material respects, based on the criteria established in
Internal Control - Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission.
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This report is intended solely for the information and use of the Board of
Directors and management of GTC, Wilmington Trust Company as Trustee, and the
Investor Certificateholders, and is not intended to be and should not be used by
anyone other than these specified parties.
/s/ Deloitte & Touche, LLP
-----------------------------
January 22, 1999
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Exhibit 99(C)
January 21, 1999
MANAGEMENT'S REPORT ON INTERNAL CONTROL RELATED TO SERVICING PROCEDURES
The management of Greenwood Trust Company (the "Company") is responsible for
establishing and maintaining effective internal control over financial
reporting of the Company in effect at November 30, 1998, insofar as it relates
to the servicing procedures provided by the Company under the relevant sections
of the Pooling and Servicing Agreement for Discover Card Trust 1993 B, dated as
of February 1, 1993, between the Company and Wilmington Trust Company, as
amended. The internal control contains monitoring mechanisms, and actions are
taken to correct deficiencies identified.
There are inherent limitations in the effectiveness of any internal control,
including the possibility of human error and the circumvention or overriding of
controls. Accordingly, even effective internal control can provide only
reasonable assurance with respect to financial reporting. Further, because of
changes in conditions, the effectiveness of internal control may vary over
time.
Management has assessed the Company's internal control over financial reporting
insofar as it relates to the servicing procedures provided by the Company under
the relevant sections of the Pooling and Servicing Agreement as of November 30,
1998. This assessment was based on criteria for effective internal control
over financial reporting described in "Internal Control-Integrated Framework"
issued by the Committee of Sponsoring Organizations of the Treadway Commission.
Based on management's assessment, the Company maintained effective internal
control over financial reporting insofar as it relates to the servicing
procedures provided by the Company under the relevant sections of the Pooling
and Servicing Agreement as of November 30, 1998.
Signed,
/s/ J. Nathan Hill
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J. Nathan Hill
President
/s/ John J. Coane
- ----------------------------------------------------
John J. Coane
Vice President, Chief Accounting Officer & Treasurer
