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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark one)
(X) Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 (Fee Required)
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 (No Fee Required)
For the transition period from _____________________ to _____________________
Commission file Number 1-655
MAYTAG CORPORATION
403 West Fourth Street North, Newton, Iowa 50208
A Delaware Corporation I.R.S. Employer Identification No. 42-0401785
Registrant's telephone number, including area code: 515-792-8000
Securities registered pursuant to Section 12(b) of the Act:
Name of Each Exchange on
Title of Each Class Which Registered
Common Stock, $1.25 per share par value New York Stock Exchange
Preferred Stock Purchase Rights New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark whether the 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 (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No
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)
The aggregate market value of the voting stock held by non-affiliates of the
registrant as of March 1, 1994:
Common Stock, $1.25 Par Value - $1,858,556,733
The number of shares outstanding of the registrant's Common Stock, as of
March 1, 1994:
Common Stock, $1.25 Par Value - 106,967,294
1
1993 FORM 10-K CONTENTS
Item Page
_____________________________________________________________________________
Part I:
1. Business 3
Business - Home Appliances . . . . . . . . . . . . . . . . . . 3
Business - Vending Equipment . . . . . . . . . . . . . . . . . 4
2. Properties . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . 6
4. Submission of Matters to a Vote of Security Holders . . . . . 6
Executive Officers of the Registrant . . . . . . . . . . . . . 6
Part II:
5. Market for the Registrant's Common Equity and Related Stockholder
Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
6. Selected Financial Data . . . . . . . . . . . . . . . . . . . 8
7. Management's Discussion and Analysis of Financial Condition and
Results of Operations . . . . . . . . . . . . . . . . . . . . 9
8. Financial Statements and Supplementary Data . . . . . . . . 12
9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure . . . . . . . . . . . . . . . . . . . . 30
Part III:
10. Directors and Executive Officers of the Registrant . . . . . 30
11. Executive Compensation . . . . . . . . . . . . . . . . . . . 30
12. Security Ownership of Certain Beneficial Owners and Management 30
13. Certain Relationships and Related Transactions . . . . . . . 31
Part IV:
14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K 31
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
2
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Company's definitive proxy statement dated March 22, 1994
(the "Proxy Statement"), which has been filed with the Securities and
Exchange Commission pursuant to regulation A, are incorporated by reference
into Part III.
Part I
Item 1. Business.
Maytag Corporation (the "Company") was organized as a Delaware corporation in
1925. In 1989, the Company completed the acquisition of Chicago Pacific
Corporation ("CPC"), a furniture and international home appliance company,
through a cash tender offer followed by a stock merger. CPC operated in two
segments, home appliances and furniture; however, the Company later sold the
furniture companies segment.
The Company is engaged in two industry segments: home appliances and vending
equipment. Financial and other information relating to industry segment and
geographic data is included in Part II, Item 7 and Item 8.
HOME APPLIANCES
The home appliances segment comprises approximately 95% of 1993 consolidated
net sales.
The Company, through its various business units, manufactures and distributes
a broad line of home appliances including laundry equipment, gas and electric
ranges, refrigerators, freezers, dishwashers, and floor care products. In
1992, the Company sold its microwave oven and dehumidifier manufacturing
operations. The Company continues to distribute microwave ovens and
dehumidifiers, as well as compactors. Maytag Customer Service (formerly
Maycor Appliance Parts & Service Co.) provides product service and parts
distribution in the United States and Canada for all of the Company's
appliance brands, except Hoover. Maytag International Inc., the Company's
international marketing subsidiary, handles the sales of appliances and
licensing of certain home appliance brands in markets outside the United
States and Canada. Maytag Financial Services Corporation provides financing
programs primarily to certain customers of the Company in North America.
The Company markets its home appliances to all major United States and many
major international markets, including the replacement market, the commercial
laundry market, the new home and apartment builder market, the manufactured
housing (mobile home) market, the recreational vehicle market, the private
label market and the household/commercial floor care market. Products are
primarily sold directly to dealers but are also sold through independent
distributors, mass merchandisers and large national department stores. Sales
of appliances to manufacturers of mobile homes and recreational vehicles are
made directly by specialized marketing personnel. Most home appliance sales
are made within North America.
A portion of the Company's operations and sales are outside the United
States. The risks involved in foreign operations vary from country to
country and include tariffs, trade restrictions, changes in currency values,
economic conditions and international relations. Geographic information is
included in Part II, Item 8, Page 29.
3
The Company uses basic raw materials such as steel, copper, aluminum, rubber
and plastic in its manufacturing process in addition to purchased motors,
compressors, timers, valves and other components. These materials are
supplied by established sources and the Company anticipates that such sources
will, in general, be able to meets its future requirements.
The Company holds a number of patents which are important in the manufacture
of its products. The licenses it holds on other patents are not considered to
be critical to its business. The Company holds a number of trademark
registrations of which the most important are ADMIRAL, HOOVER, JENN-AIR,
MAGIC CHEF, MAYTAG, NORGE and the associated corporate symbols.
The Company's home appliance business is not seasonal.
The Company is not dependent upon a single home appliance customer or a few
customers. Therefore, the loss of any one customer would not have a material
adverse effect on its business.
The dollar amount of backlog orders of the Company is not considered
significant for home appliances in relation to the total annual dollar volume
of sales. Because it is the Company's practice to maintain a level of
inventory sufficient to cover anticipated shipments and since orders are
generally shipped upon receipt, a large backlog would be unusual.
The home appliance market is highly competitive with the principal
competitors being larger than the Company. Because of continued
competitiveness within the industry, price increases continue to be difficult
to implement. There were no significant increases in the costs of the
Company's raw materials or components in 1993. Information regarding the
Company's improvement in gross margin over 1992 is included in Part II, Item
7. The Company uses product quality, customer service, advertising and sales
promotion, warranty and pricing as its principal methods of competition.
Although the Company has many manufacturing sites with environmental
concerns, compliance with laws and regulations regarding the discharge of
materials into the environment or relating to the protection of the
environment has not had a material effect on capital expenditures, earnings
or the Company's competitive position. The scheduled phase-out of
chlorofluorocarbons ("CFCs", an aerosol propellant and refrigerant) by the
mid-1990s, mandated by government standards, continues to cause concern
throughout the refrigeration industry. In addition, alternative washing
machine designs to meet anticipated future government regulations dealing
with energy and water usage are being evaluated by the Company and the
industry. Because compliance with these current and anticipated laws and
regulations is essentially prospective, it has not had a significant impact
on current operations. It is anticipated that the industry and the Company
will meet all final standards.
The number of employees of the Company within the home appliances segment as
of December 31, 1993 was 19,661.
VENDING EQUIPMENT
The vending equipment segment comprises approximately 5% of 1993 consolidated
net sales.
The Company manufactures, through its Dixie-Narco subsidiary, a variety of
soft drink vending machines and money changers. The products are sold
primarily to companies bottling soft drinks such as Coca-Cola, Dr. Pepper,
Pepsi Cola, Royal Crown Cola and Seven-Up.
4
The Company uses steel as a basic raw material in its manufacturing processes
in addition to purchased motors, compressors and other components made of
copper, aluminum, rubber and plastic. These materials are supplied by
established sources and the Company anticipates that such sources will, in
general, be able to meet its future requirements.
The Company holds a number of patents which are important in the manufacture
of its products. The Company holds a DIXIE-NARCO trademark registration and
its associated corporate symbol.
Vending equipment sales, though stronger in the first six months of the year,
are considered by the Company to be essentially nonseasonal.
The Company's vending equipment segment is dependent upon a few major soft
drink suppliers. Therefore, the loss of one or more of these customers could
have a material adverse effect on this segment. The Company manufactures and
sells its vending machines in competition with a small number of other
manufacturers and is the major manufacturer of such equipment. The principal
methods of competition utilized by the vending equipment segment are product
quality, customer service, delivery, warranty and price. Positive factors
pertaining to the Company's competitive position include product design,
manufacturing efficiency and superior service, while new product innovations
by competitors and severe price competition negatively impact its position.
The dollar amount of backlog orders of the Company is not considered
significant for vending equipment in relation to the total annual dollar
volume of sales. Because it is the Company's practice to maintain a level of
inventory sufficient to cover shipments and since orders are generally
shipped upon receipt, a large backlog would be unusual.
Although the Company has manufacturing sites with environmental concerns,
compliance with laws and regulations regarding the discharge of materials
into the environment or relating to the protection of the environment has not
had a material effect on capital expenditures, earnings or the Company's
competitive position. The scheduled phase-out of chlorofluorocarbons
("CFCs', an aerosol propellant and refrigerant) by the mid-1990s, mandated by
government standards, will also not affect the production technology in the
vending equipment industry. This has not had a significant impact on current
operations, and it is anticipated that the industry and the Company will meet
all final standards.
The number of employees of the Company within the vending equipment segment
as of December 31, 1993 was 1,136.
Item 2. Properties.
The Company's corporate headquarters is located in Newton, Iowa. Major
offices and manufacturing facilities in the United States related to the home
appliances segment are located at: Galesburg, Illinois; Jackson, Tennessee;
Indianapolis, Indiana; Cleveland, Tennessee; Herrin, Illinois; Newton, Iowa;
North Canton, Ohio; and El Paso, Texas. Maytag Customer Service, which is
located in Cleveland, Tennessee, operates an automated national parts
distribution center in Milan, Tennessee which services all of the Company's
appliance brands, except Hoover. In addition to manufacturing facilities in
the United States, the Company has three other North American manufacturing
facilities located in Canada and Mexico. The Company also has five
manufacturing facilities outside North America in Australia, Portugal and the
United Kingdom. A sixth manufacturing facility in Dijon, France was closed
in 1993. Major facilities related to the vending equipment segment are:
Dixie-Narco, Inc., with offices and manufacturing facilities located in
5
Williston, South Carolina and Eastlake, Ohio.
The manufacturing facilities are well maintained, suitably equipped and in
good operating condition. The facilities used in the production of home
appliances and vending equipment had sufficient capacity to meet production
needs in 1993, and the Company expects that such capacity will be adequate
for planned production in 1994. The Company's 1993 capital expenditures and
the planned 1994 capital expenditures include an ongoing program of product
improvements and enhanced manufacturing efficiencies.
The Company also owns or leases sales offices in many large metropolitan
areas throughout the United States, Australia, Canada, the United Kingdom and
Western Europe. Lease commitments were not material at December 31, 1993.
Item 3. Legal Proceedings.
The Company is involved in contractual disputes, environmental,
administrative and legal proceedings and investigations of various types.
Although any litigation, proceeding or investigation has an element of
uncertainty, the Company believes that the outcome of any proceeding, lawsuit
or claim which is pending or threatened, or all of them combined, will not
have a material adverse effect on its consolidated financial position.
Item 4. Submission of Matters to a Vote of Security Holders.
The Company did not submit any matters to a vote of security holders during
the fourth quarter of 1993 through a solicitation of proxies or otherwise.
Executive Officers of the Registrant
The following sets forth the names of all executive officers of the Company,
the offices held by them, the year they first became an officer of the
Company and their ages:
First Became
Name Office Held an Officer Age
- ----------------- ----------------------- ------------ ---
Leonard A. Hadley Chairman and
Chief Executive Officer 1979 59
John P. Cunningham Executive Vice President
and Chief Financial Officer 1994 56
Joseph F. Fogliano Executive Vice President and
President North American
Appliance Group 1993 54
Jon O. Nicholas Senior Vice President,
Human Resources 1993 54
Carleton F. Zacheis Senior Vice President,
Planning 1988 60
and Business Development
Terry A. Carlson Vice President, Purchasing 1991 51
Janis C. Cooper Vice President, Public 1989 46
Affairs
Randall J. Espeseth Vice President, Taxes 1992 47
6
Mark A. Garth Vice President - Controller
and Chief Accounting Officer 1994 34
Edward H. Graham Vice President, General
Counsel 1990 58
and Assistant Secretary
Douglass C. Horstman Vice President, Government
Affairs 1993 54
John H. Jansen Vice President, Technology 1992 54
Thomas C. Vice President and Treasurer 1989 55
Ringgenberg
Steven H. Wood Vice President, Information
Services 1992 36
E. James Bennett Secretary and Assistant
General Counsel 1985 52
The executive officers were elected to serve in the indicated office until
the organizational meeting of the Board of Directors following the annual
meeting of shareholders on April 26, 1994 or until their successors are
elected.
Each of the executive officers has served the Company or an acquired company
in various executive or administrative positions for at least five years
except for:
Name Company/Position Period
- -------------------- ---------------------------- --------
Terry A. Carlson Estee Lauder, Inc
- Vice President, Corporate
Purchasing 1987-1991
John P. Cunningham IBM Corporation
- Vice President and Assistant
General Manager, Main Frame
Division 1992-1993
- Vice President, Member Europe
Executive Committee, Paris, 1990-1992
France
- Vice President, Corporate 1988-1990
Controller
Joseph F. Fogliano Thomson Consumer Electronics,
Inc. 1988-1993
- President and CEO
Douglass C. Horstman D. C. Horstman & Associates
(government affairs consulting
firm) 1973-1993
- Owner/Operator
John H. Jansen Ridge Tool Company (a division of
Emerson Electric Company)
- Vice President, Engineering 1985-1992
Steven H. Wood Ernst & Young, Chicago, Illinois
- Senior Manager 1985-1989
7
Part II
Item 5. Market for Registrant's Common Equity and Related Stockholder
Matters.
MARKET AND DIVIDEND INFORMATION
- -------------------------------------------------------------------------------
Sales Price of Common Shares Dividends
In Whole Dollars Per Share
------------------------------------------ ----------------
1993 1992 1993 1992
----------------- ----------------- ---- ----
Quarter High Low High Low
- ------- ---- --- ---- ---
First $16 $13 $20 $15 $.125 $.125
Second 16 13 21 16 .125 .125
Third 18 15 18 13 .125 .125
Fourth 19 15 16 13 .125 .125
The principal U.S. market in which the Company's common stock is traded is
the New York Stock Exchange. As of March 1, 1994 the Company had 32,334
shareowners of record.
Item 6. Selected Financial Data.
Thousands of Dollars Except Per Share Data
(1) (2) (3)
1993 1992 1991 1990 1989
---------- ---------- ---------- ---------- ----------
Net sales $2,987,054 $3,041,223 $2,970,626 $3,056,833 $3,088,753
Cost of sales 2,262,942 2,339,406 2,254,221 2,309,138 2,312,645
Income taxes 38,600 15,900 44,400 60,500 75,500
Income (loss) from
continuing
operations 51,270 (8,354) 79,017 98,905 131,472
Percent of income
(loss) from
continuing
operations to net
sales 1.7% (.3%) 2.7% 3.2% 4.3%
Income (loss) from
continuing
operations per
share $ .48 $ (.08) $ .75 $ .94 $ 1.27
Dividends paid per
share .50 .50 .50 .95 .95
Average shares
outstanding (in
thousands) 106,252 106,077 105,761 105,617 103,694
Working capital $ 406,181 $ 452,626 $ 509,025 $ 612,802 $ 650,905
Depreciation of
property, plant
and equipment 102,459 94,032 83,352 76,836 68,077
Additions to
property, plant and
equipment 99,300 129,891 143,372 141,410 127,838
Total assets 2,469,498 2,501,490 2,535,068 2,586,541 2,436,319
Long-term debt 724,695 789,232 809,480 857,941 876,836
Total debt to
capitalization 60.6% 58.7% 45.9% 47.7% 50.6%
Shareowners' equity
per share of Common
stock $ 5.50 $ 5.62 $ 9.50 $ 9.60 $ 8.89
8
(1) Includes $60.4 million in pretax charges ($50 million in a special charge
and $10.4 million in selling, general and administrative expenses) for
additional costs associated with two Hoover Europe "free flights" promotion
programs.
(2) Includes a $95 million pretax charge relating to the reorganization of the
North American and European business units and before cumulative effect of
accounting changes.
(3) These amounts reflect the acquisition of Hoover on January 26, 1989.
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
_____________________________________________________________________________
COMPARISON OF 1993 WITH 1992
The Company operates in two business segments, home appliances and vending
equipment. The operations of the home appliance segment represented 95.0
percent of net sales in 1993 and 1992.
Consolidated net sales decreased 1.8 percent in 1993 compared to 1992.
Although sales volumes in the United States increased due to improved
consumer confidence, the overall decline in sales resulted from a decrease in
European sales, less favorable currency conversions of sales outside the
United States, and the absence of sales from the microwave oven operation
that was sold in June 1992. North American home appliance sales increased 3.1
percent in spite of the absence of sales from the microwave oven operation.
European sales decreased 22.1 percent from 1992 due to less favorable
currency conversions and lower sales volumes due to some market share
declines. Lower sales volumes in Europe are expected in 1994 compared to
1993. Sales in the Company's vending equipment segment declined 5.3 percent
from 1992 due to slow economic activity in Europe, cutbacks by domestic
bottlers and increased competition.
Gross profit as a percent of sales increased to 24.2 percent from 23.1
percent in 1992. The increase in margins resulted principally from
improvements in the North American Appliance Group. The improvement in the
North American Appliance Group was primarily due to production efficiencies,
reductions of certain employee-related costs and some selective price
increases. In addition, 1992 results for the North American Appliance Group
included plant start-up costs. Gross margins in Hoover Europe declined
primarily due to operating inefficiencies associated with previously
announced plans to close a factory in Dijon, France and higher pension costs.
Vending equipment margins improved in 1993 due to reductions in material,
distribution and warranty costs from 1992. In 1994, although consolidated
pension and postretirement medical costs are expected to increase due to a
reduction in the discount rate assumption and lower pension assets, this is
expected to be offset by other cost reductions.
Selling, general and administrative (S,G&A) expenses decreased to 17.2
percent in 1993 from 17.4 percent in 1992. The decline was principally due to
cost efficiencies resulting from the reorganization of the North American
Appliance Group. Special charges consisted of a $50 million pretax charge in
the first quarter of 1993 to cover anticipated additional costs associated
with two "free flights" promotional programs in Europe and a $95 million
pretax charge in the third quarter of 1992 for a reorganization of U.S. and
European operations. Total pretax charges relating to the "free flights"
promotion programs in 1993 were $60.4 million ($50 million in a special
charge and $10.4 million in S,G&A) and in 1992 were $12.2 million. See the
notes to the financial statements for a discussion of this matter.
Offsetting a portion of the 1993 European "free flights" expenses in S,G&A
was a $5 million reversal of excess reorganization reserves in Europe.
Operating income for 1993 totaled $158.9 million compared to $78.6 million
in 1992. Before special charges, operating income would have been $208.9
million or 7.0 percent of sales in 1993 compared to $173.6 million or 5.7
percent of sales in 1992.
The decrease in the effective tax rate for 1993 was primarily due to the
1992 tax rate reflecting the impact of non-recoverable losses outside the
9
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - continued
_____________________________________________________________________________
United States. The notes to the financial statements include a
reconciliation between the statutory tax and the actual tax provided.
Excluding special charges in 1993 and 1992 and the cumulative effect of
accounting changes in 1992, net income would have been $81.3 million or $.76
per share in 1993 compared to net income of $65.4 million or $.62 per share
in 1992.
In November 1992, the Financial Accounting Standards Board issued Statement
No. 112 (FAS 112), "Employers' Accounting for Postemployment Benefits." The
new rules require recognition of specified postemployment benefits provided
to former or inactive employees, such as severance pay, workers'
compensation, supplemental unemployment benefits, disability benefits and
continuation of healthcare and life insurance coverages. The Company has
estimated that the cumulative effect of adopting FAS 112, which will be
recorded in the first quarter of 1994, will be between $.02-$.04 per share.
The ongoing expenses associated with the adoption of the new rules are not
expected to be material.
_____________________________________________________________________________
COMPARISON OF 1992 WITH 1991
The Company operates in two business segments, home appliances and vending
equipment. The operations of the home appliance segment represented 95.0
percent of net sales in 1992 and 1991.
Effective January 1, 1992, the Company adopted Statement of Financial
Accounting Standards No. 106 (FAS106) "Employers' Accounting for
Postretirement Benefits Other than Pensions." FAS 106 requires companies to
recognize the cost of postretirement benefits over an employee's service
period. The Company's previous practice had been to recognize these costs as
claims were received. The one-time transitional cost for adopting FAS106
resulted in an aftertax charge of $222 million or $2.09 per share in the
first quarter of 1992. FAS106 also resulted in an additional pretax charge
of approximately $24 million in 1992. Implementation of FAS106 had no impact
on cash flows and the Company continues to pay the cost of postretirement
benefits as claims are received. Also effective January 1, 1992, the Company
adopted Statement of Financial Accounting Standards No. 109 (FAS109)
"Accounting for Income Taxes." The adoption of FAS109 required a one-time
aftertax charge of $85 million or $.80 per share. However, there was no cash
flow impact of adopting the pronouncement since deferred taxes changed by a
like amount. The one-time cumulative impact of adopting both FAS106 and
FAS109 totaled $307 million or $2.89 per share.
Consolidated net sales increased 2.4 percent in 1992 compared to 1991. The
overall sales increase, although partially offset by lower prices, was due to
market share gains in most product categories and increased volume as a
result of improved consumer confidence in the United States. Sales of the
Company's home appliances within North America increased 2.7 percent from
1991. While European sales were 1.3 percent higher in 1992 compared to 1991,
the majority of the increase is due to favorable currency translation with
volume remaining flat. The Company's vending sales increased 10.4 percent in
1992, primarily due to increased volume within the United States.
Gross profit as a percent of sales decreased to 23.1 percent from 24.1
percent in 1991. The deterioration in margins was principally caused by
additional expenses arising from the use of FAS106 as well as expenses
related to a plant start-up, new product introductions and price reductions.
Excluding FAS106 charges, gross profit as a percent of sales would have been
23.8 percent for 1992.
Selling, general and administrative expenses as a percent of sales and
10
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - continued
_____________________________________________________________________________
before reorganization remained relatively level at 17.4 percent in 1992 and
17.7 percent in 1991. The slight decrease was caused primarily by increased
sales in 1992.
During the third quarter of 1992, the Company provided for the costs of
reorganizing its North American and European operations. In North America,
several manufacturing facilities are being realigned, effectively combining
expertise in research, engineering and product development. In addition,
sales forces were reorganized and streamlined. The Company was also
implementing a centralized distribution and order system for its North
American operations designed to enhance customer service and operational
efficiency. The effort in Europe was aimed at downsizing production capacity
and streamlining sales, marketing, administration and distribution
activities. This special charge reduced income before income taxes by $95
million or $.70 per share after tax.
Operating income for 1992 amounted to $78.6 million compared to $191.5
million in 1991. Before the special reorganization charge, 1992 operating
income would have been $173.6 million or 5.7 percent of sales, down $17.9
million or 9.4 percent from 1991. The net operating loss of the Company's
European operations in 1992 increased $66.2 million from 1991 primarily due
to a provision of $55 million for reorganization expenses relating to plant
closings and other organizational changes and the continuing recession in the
United Kingdom.
The increase in the effective tax rate was primarily due to the effect of
non-recoverable losses outside of the United States. The notes to the
financial statements contain a reconciliation between the statutory tax and
the actual tax provided.
Excluding the cumulative effect of accounting changes and reorganization
expenses, for comparative purposes, net income would have been $65.4 million
or $.62 per share compared to net income of $79 million or $.75 per share in
1991.
_____________________________________________________________________________
LIQUIDITY AND CAPITAL RESOURCES
Cash provided by operations in 1993 totaled $71.3 million compared to $183.1
million in 1992. The overall decrease resulted from the funding of
expenditures relating to the reorganization of the North American and
European operations, the Hoover Europe "free flights" promotions and working
capital needs in the North American Appliance Group. Offsetting this
decrease was a $42 million withdrawal from an over-funded pension plan in
Europe and lower funding of an employee benefit trust. Current assets were
1.6 times current liabilities at December 31, 1993 and 1.8 times at December
31, 1992.
Gross capital expenditures in 1993 were $99.3 million compared to $129.9
million in 1992. The expenditures in 1993 were mainly related to
improvements in product design and manufacturing processes and increases in
manufacturing capacity. Capital spending in 1992 was higher as it included
major plant start-up projects. Planned capital expenditures for 1994
approximate $110 million and relate to ongoing production improvements and
product enhancements. Depreciation expense increased to $102.5 million in
1993 from $94.0 million in 1992 resulting from major capital projects
completed near the end of 1992.
11
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - continued
_____________________________________________________________________________
Significant investing and financing transactions related to capital
expenditures, debt retirement and dividend payments were funded through
operations and the issuance of $5.5 million in medium term notes and a $139.0
million increase in notes payable and commercial paper borrowings. The
Company also reduced long term debt by $94.4 million during 1993.
The Company has two credit facilities which support the Company's
commercial paper program. Subject to certain exceptions, the credit
agreements require the Company to maintain certain quarterly levels of
consolidated tangible net worth, leverage ratios and interest coverage
ratios. The Company was in compliance with all covenants at December 31,
1993 and expects to be in compliance with all covenants. The covenants
become more stringent commencing in the first quarter of 1994. Additional
funds available at December 31, 1993 under all credit agreements, applying
the terms of the most restrictive covenant above, totaled $243 million.
Dividend payments in both 1993 and 1992 amounted to $53 million or $.50
per share. Dividends amounted to nine percent of average shareowners' equity
in 1993 and seven percent in 1992.
Any funding requirements for future capital expenditures and other cash
requirements in excess of cash generated from operations will be supplemented
with issuance of debt securities and bank borrowings.
_____________________________________________________________________________
IMPACT OF INFLATION
The Company uses the LIFO method of accounting for approximately 79 percent
of its inventories. Under this method, the cost of sales reported in the
financial statements approximates current costs. The charges to operations
for depreciation represent the allocation of historical costs incurred over
past years and are significantly less than if they were based upon current
costs of productive capacity being consumed. Assets acquired in prior years
will, of course, be replaced at higher costs but this will take place over
several years. New higher-cost assets will result in higher depreciation
charges, but in many cases due to technological improvements, there will be
operating cost savings as well.
Item 8. Financial Statements and Supplementary Data.
Page
----
Report of Independent Auditors 13
Statements of Consolidated Income--Years ended
December 31, 1993, 1992 and 1991 14
Statements of Consolidated Financial Condition--
December 31, 1993 and 1992 15
Statements of Consolidated Cash Flows--Years ended
December 31, 1993, 1992 and 1991 17
Notes to Consolidated Financial Statements 18
Quarterly Results of Operations--Years 1993 and 1992 30
12
Report of Independent Auditors
Shareowners and Board of Directors
Maytag Corporation
We have audited the accompanying statements of consolidated financial
condition of Maytag Corporation and subsidiaries as of December 31, 1993 and
1992, and the related statements of consolidated income and consolidated cash
flows for each of the three years in the period ended December 31, 1993. Our
audits also included the financial statement schedules listed in the Index at
Item 14(a). These financial statements and related schedules are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements and related schedules based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. These 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, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Maytag
Corporation and subsidiaries at December 31, 1993 and 1992, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended December 31, 1993, in conformity with
generally accepted accounting principles. Also, in our opinion, the related
financial statement schedules, when considered in relation to the basic
financial statements taken as a whole, present fairly in all material
respects the information set forth therein.
As discussed in notes to consolidated financial statements, in 1992 the
Company changed its method of accounting for postretirement benefits other
than pensions and income taxes.
Ernst & Young
February 1, 1994 Chicago, Illinois
13
STATEMENTS OF CONSOLIDATED INCOME (LOSS)
Thousands of Dollars Except Per Share Data
Year ended December 31
1993 1992 1991
--------- --------- ---------
Net sales $2,987,054 $3,041,223 $2,970,626
Cost of Sales 2,262,942 2,339,406 2,254,221
--------- --------- ---------
GROSS PROFIT 724,112 701,817 716,405
Selling, general and administrative
expenses 515,234 528,250 524,898
Special charges 50,000 95,000
--------- --------- ---------
OPERATING INCOME 158,878 78,567 191,507
Interest expense (75,364) (75,004) (75,159)
Other--net 6,356 3,983 7,069
--------- --------- ---------
INCOME BEFORE INCOME TAXES AND
CUMULATIVE EFFECT OF ACCOUNTING
CHANGES 89,870 7,546 123,417
Income taxes 38,600 15,900 44,400
--------- --------- ---------
INCOME (LOSS) BEFORE CUMULATIVE
EFFECT OF ACCOUNTING CHANGES 51,270 (8,354) 79,017
Cumulative effect of accounting changes
for postretirement benefits other
than pensions and income taxes (307,000)
--------- --------- --------
NET INCOME (LOSS) $ 51,270 $ (315,354) $ 79,017
========= ========= ========
Income (loss) per average share of
Common stock:
Income (loss) before cumulative
effect of accounting changes $ .48 $ (.08) $ .75
Cumulative effect of accounting
changes $ (2.89)
Net income (loss) per Common share $ .48 $ (2.97) $ .75
See notes to consolidated financial statements.
14
STATEMENTS OF CONSOLIDATED FINANCIAL CONDITION
Thousands of Dollars
December 31
--------------------
ASSETS 1993 1992
- ------ --------- ---------
CURRENT ASSETS
Cash and cash equivalents $ 31,730 $ 57,032
Accounts receivable, less allowance--
(1993--$15,629; 1992--$16,380) 532,353 476,850
Inventories 429,154 401,083
Deferred income taxes 46,695 52,261
Other current assets 16,919 28,309
---------- ----------
Total current assets 1,056,851 1,015,535
NONCURRENT ASSETS
Deferred income taxes 68,559 71,442
Pension investments 168,103 215,433
Intangibles, less allowance for amortization--
(1993--$46,936; 1992--$37,614) 319,657 328,980
Other noncurrent assets 35,266 35,989
----------- ----------
Total noncurrent assets 591,585 651,844
PROPERTY, PLANT AND EQUIPMENT
Land 46,149 47,370
Buildings and improvements 288,590 286,368
Machinery and equipment 1,068,199 962,006
Construction in progress 44,753 90,847
---------- ----------
1,447,691 1,386,591
Less allowance for depreciation 626,629 552,480
---------- ----------
Total property, plant and equipment 821,062 834,111
---------- ----------
TOTAL ASSETS $2,469,498 $2,501,490
========== ==========
15
December 31
----------------------
LIABILITIES AND SHAREOWNERS' EQUITY 1993 1992
---------- ----------
CURRENT LIABILITIES
Notes payable $ 157,571 $ 19,886
Accounts payable 195,981 218,142
Compensation to employees 84,405 89,245
Accrued liabilities 178,015 180,894
Income taxes payable 16,193 11,323
Current maturities of long-term debt 18,505 43,419
--------- ----------
Total current liabilities 650,670 562,909
NONCURRENT LIABILITIES
Deferred income taxes 44,882 89,011
Long-term debt 724,695 789,232
Postretirement benefits other than pensions 391,635 380,376
Other noncurrent liabilities 70,835 80,737
--------- ----------
Total noncurrent liabilities 1,232,047 1,339,356
SHAREOWNERS' EQUITY
Common stock:
Authorized--200,000,000 shares (par value $1.25)
Issued--117,150,593 shares, including shares in
treasury 146,438 146,438
Additional paid-in capital 480,067 478,463
Retained earnings 325,823 328,122
Cost of Common stock in treasury (1993--10,430,833
shares; 1992--10,545,915 shares) (232,510) (234,993)
Employee stock plans (62,342) (65,638)
Foreign currency translation (70,695) (53,167)
--------- ----------
Total shareowners' equity 586,781 599,225
--------- ----------
TOTAL LIABILITIES AND SHAREOWNERS' EQUITY $2,469,498 $2,501,490
========= =========
See notes to consolidated financial statements.
16
STATEMENTS OF CONSOLIDATED CASH FLOWS
Thousands of Dollars
Year ended December 31
------------------------------
1993 1992 1991
-------- -------- --------
OPERATING ACTIVITIES
Net income (loss) $ 51,270 $(315,354) $ 79,017
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Cumulative effect of accounting changes 307,000
Depreciation and amortization 111,781 103,351 92,667
Deferred income taxes (35,833) (30,210) 1,700
Reorganization expenses (5,000) 95,000
"Free flights" promotion expenses 60,379 12,235
Changes in selected working capital items:
Inventories (29,323) 80,731 37,075
Receivables and other current assets (48,609) (6,051) 12,867
Reorganization reserve (39,671) (15,530)
"Free flights" promotion reserve (42,981) (1,604)
Other current liabilities (17,383) (70,422) 46,623
Net change in pension assets and
liabilities 43,513 (12,149) (22,385)
Postretirement benefits 11,259 21,254
Other--net 11,913 14,814 (12,894)
--------- -------- --------
NET CASH PROVIDED BY OPERATIONS 71,315 183,065 234,670
INVESTING ACTIVITIES
Capital expenditures--net (95,990) (120,364) (138,100)
--------- -------- --------
TOTAL INVESTING ACTIVITIES (95,990) (120,364) (138,100)
FINANCING ACTIVITIES
Proceeds from credit agreements and long-term
borrowings 5,500 73,712 57,900
Increase (decrease) in notes payable 138,951 (2,378) (31,023)
Reduction in long-term debt (94,449) (70,158) (92,832)
Stock options exercised and other Common stock
transactions 5,903 5,558 3,421
Dividends (53,569) (53,269) (53,150)
--------- --------- --------
TOTAL FINANCING ACTIVITIES 2,336 (46,535) (115,684)
Effect of exchange rates on cash (2,963) (7,886) (1,721)
INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS (25,302) 8,280 (20,835)
Cash and cash equivalents at beginning of year 57,032 48,752 69,587
--------- --------- --------
CASH AND CASH EQUIVALENTS
AT END OF YEAR $ 31,730 $ 57,032 $ 48,752
========= ======== =========
See notes to consolidated financial statements.
17
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
______________________________________________________________________
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Principles of Consolidation: The consolidated financial statements include
the accounts and transactions of the Company and its wholly owned
subsidiaries. Certain subsidiaries located outside the United States are
consolidated as of a date one month earlier than subsidiaries in the United
States. Intercompany accounts and transactions are eliminated in
consolidation.
Exchange rate fluctuations from translating the financial statements of
subsidiaries located outside the United States into U.S. dollars and exchange
gains and losses from designated foreign currency transactions are recorded
in a separate component of shareowners' equity. All other foreign exchange
gains and losses are included in income.
Certain reclassifications have been made to prior years' financial
statements to conform with the 1993 presentation.
Cash Equivalents: Highly liquid investments with a maturity of 90 days or
less when purchased are considered by the Company to be cash equivalents.
Inventories: Inventories are stated at the lower of cost or market. Cost is
determined by the last-in, first-out (LIFO) method for approximately 79% and
76% of the Company's inventories at December 31, 1993 and 1992. The
remaining inventories, which are primarily outside the United States, are
stated using the first-in, first-out (FIFO) method.
Intangibles: Intangibles principally represent goodwill, which is the cost
of business acquisitions in excess of the fair value of identifiable net
tangible assets. Goodwill is amortized over 40 years on the straight-line
basis and the carrying value is reviewed annually. If this review indicates
that goodwill will not be recoverable as determined based on the undiscounted
cash flows of the entity acquired over the remaining amortization period, the
Company's carrying value of the goodwill will be reduced by the estimated
shortfall of cash flows.
Income Taxes: Certain expenses (principally related to accelerated tax
depreciation, employee benefits and various other accruals) are recognized in
different periods for financial reporting and income tax purposes.
Property, Plant and Equipment: Property, plant and equipment is stated on
the basis of cost. Depreciation expense is calculated principally on the
straight-line method for financial reporting purposes. The depreciation
methods are designed to amortize the cost of the assets over their estimated
useful lives.
Short and Long-Term Debt: The carrying amounts of the Company's borrowings
under its short-term revolving credit agreements, including multicurrency
loans, approximate their fair value. The fair values of the Company's long-
term debt are estimated based on quoted market prices of comparable
instruments.
- ------------------------------------------------------------------------------
INVENTORIES
In thousands 1993 1992
-------- --------
Finished products $282,841 $249,289
Work in process, raw materials and supplies 146,313 151,794
-------- --------
$429,154 $401,083
======== ========
If the first-in, first-out (FIFO) method of inventory accounting, which
approximates current cost, had been used for all inventories, they would have
been $76.3 million and $78.1 million higher than reported at December 31, 1993
and 1992.
18
___________________________________________________________________________
PENSION BENEFITS
The Company and its subsidiaries have noncontributory defined benefit pension
plans covering most employees. Plans covering salaried and management
employees generally provide pension benefits that are based on an average of
the employee's earnings and credited service. Plans covering hourly
employees generally provide benefits of stated amounts for each year of
service. The Company's funding policy is to contribute amounts to the plans
sufficient to meet minimum funding requirements.
A summary of the components of net periodic pension expense (income) for the
defined benefit plans is as follows:
Year ended December 31
--------------------------------
In thousands 1993 1992 1991
--------- ---------- ---------
Service cost--benefits earned during the
period $ 24,067 $ 21,469 $ 23,520
Interest cost on projected benefit
obligation 90,322 87,654 85,325
Actual return on plan assets (167,539) (87,263) (141,918)
Net amortization and deferral 59,315 (25,239) 23,602
--------- --------- ---------
Net pension expense (income) $ 6,165 $ (3,379) $ (9,471)
========= ========= =========
The change in pension expense (income) from 1992 to 1993 resulted from pension
benefit improvements, a reduction in the discount rate and lower expected
return on assets resulting from lower asset values at the beginning of the
year.
Assumptions used in determining net periodic pension expense (income) for the
defined benefit plans in the United States were:
1993 1992 1991
---- ---- ----
Discount rates 8.5% 9% 9%
Rates of compensation increase 6 6 6
Expected long-term rates of return on
assets 9.5 9.5 9.5
For the valuation of pension obligations at the end of 1993 and for
determining pension expense in 1994, the discount rate and rate of
compensation increase have been decreased to 7.5% and 5.0% respectively.
Assumptions for defined benefit plans outside the United States are
comparable to the above in all periods.
As of December 31, 1993, approximately 87% of the plan assets are
invested in listed stocks and bonds. The balance is invested in real estate
and short term investments.
Certain pension plans in the United States provide that in the event of a
change of Company control and plan termination, any excess funding may be
used only to provide pension benefits or to fund retirees' health care
benefits. The use of all pension assets for anything other than providing
employee benefits is either limited by legal restrictions or subject to
severe taxation.
The following table sets forth the funded status and amounts recognized
in the statements of consolidated financial condition for the Company's
defined benefit pension plans:
19
>
December 31, 1993 December 31, 1992
--------------------------------- ---------------------------------
Plans in Which Plans in Which Plans in Which Plans in Which
Assets Exceed Accumulated Assets Exceed Accumulated
Accumulated Benefits Exceed Accumulated Benefits Exceed
Benefits Assets Benefits Assets
-------------- --------------- -------------- ---------------
In thousands
Actuarial present value of
benefit obligation:
Vested benefit obligation $(1,004,740) $ (15,474) $ (889,570) $ (28,990)
=========== ============= ============== ============
Accumulated benefit
obligation $(1,084,352) $ (16,380) $ (942,303) $ (29,009)
=========== ============= ============== ============
Projected benefit
obligation $(1,163,073) $ (18,989) $ (1,015,813) $ (31,186)
Plan assets at fair value 1,213,315 569 1,156,506 12,897
----------- ------------- -------------- ------------
Projected benefit obligation
less than (in excess of)
plan assets 50,242 (18,420) 140,693 (18,289)
Unrecognized net loss 41,037 1,046 47,244 1,087
Prior service cost not yet
recognized in net periodic
pension cost 110,024 3,272 66,571 2,066
Unrecognized net obligation
(asset) at adoption of FASB
87, net of amortization (38,128) 1,647 (43,602) 1,729
----------- ------------ -------------- ------------
Net pension investment
(liability) 163,175 (12,455) 210,906 (13,407)
Minimum liability adjustment 4,928 (4,928) 4,527 (4,527)
------------ ------------ -------------- ------------
Pension investment
(liability) recognized in
the statements of
consolidated financial
condition $ 168,103 $ (17,383) $ 215,433 $ (17,934)
=========== =========== ============== ============
Pension investments above of approximately $104 million and $142 million at
December 31, 1993 and 1992, and pension income of $5.4 million, $10.9 million
and $7.1 million in 1993, 1992 and 1991 relate to pension plans covering
employees in Europe.
In 1993 and 1992, the Company recorded $4.9 million and $4.5 million,
respectively, to recognize the minimum pension liability required by the
provisions of Statement of Financial Accounting Standards No. 87, "Employers'
Accounting for Pensions." The transaction, which had no effect on income,
was offset by recording an intangible asset of an equivalent amount.
____________________________________________________________________________
POSTRETIREMENT BENEFITS OTHER THAN PENSIONS
In addition to providing pension benefits, the Company provides
postretirement health care and life insurance benefits for its employees in
the United States. Most of the postretirement plans are contributory, and
contain certain other cost sharing features such as deductibles and
coinsurance. The plans are unfunded. Employees are not vested and these
benefits are subject to change. Death benefits for certain retired employees
are funded as part of, and paid out of, pension plans.
In 1992, the Company adopted Statement of Financial Accounting Standards
No. 106, "Employers' Accounting for Postretirement Benefits Other Than
Pensions," which requires employers to accrue the cost of such retirement
benefits during the employee's service with the Company. Prior to 1992, the
20
cost of providing these benefits to retired employees was recognized as a
charge to income as claims were received. The transition obligation of $355
million as of January 1, 1992 was recorded as a one-time charge in the first
quarter of 1992 and reduced net income by $222 million or $2.09 per share.
The ongoing effect of adopting the new standard increased 1993 and 1992
periodic postretirement benefit cost by $11.3 and $23.9 million respectively.
Postretirement benefit costs in 1991 of approximately $11.7 million were
recorded on a cash basis and have not been restated.
A summary of the components of net periodic postretirement benefit cost is as
follows:
In thousands 1993 1992
------- -------
Service cost $10,225 $ 8,258
Interest cost 26,939 30,421
Net amortization and deferral (8,228) 2,106
------- -------
Net periodic postretirement benefit cost $28,936 $40,785
======= =======
Postretirement benefit costs for 1993 decreased primarily due to a plan
amendment to eligibility requirements.
Assumptions used in determining net periodic postretirement benefit cost
were:
1993 1992
Health care cost trend rates (1): ---- ----
Current year 14% 15%
Decreasing gradually to 6% 6%
Until the year 2009 2009
Each year thereafter 6% 6%
Discount rates 8.5% 9.0%
(1) Weighted-average annual assumed rate of increase in the per capita cost
of covered benefits.
For the valuation of the accumulated benefit obligation at December 31, 1993
and for determining postretirement benefit costs in 1994, the health care
cost trend rates were decreased. This results in a health care cost trend
rate of 12.5 percent in 1994, decreasing gradually to 6 percent until 2001
and remaining at that level thereafter. In addition, the discount rate was
reduced to 7.5 percent.
The health care cost trend rate assumption has a significant impact on
the amounts reported. For example, increasing the assumed health care cost
trend rates by one percentage point in each year would increase the
accumulated postretirement benefit obligation as of December 31, 1993 by
$43.6 million and the aggregate of the service and interest cost components
of net periodic postretirement benefit cost for 1993 by $5.9 million.
The following table presents the status of the plans reconciled with
amounts recognized in the statements of consolidated financial condition for
the Company's postretirement benefits.
21
December 31
----------------
1993 1992
In thousands ---- ----
Accumulated postretirement benefit obligation:
Retirees $284,524 $189,764
Fully eligible active plan participants 58,709 60,236
Other active plan participants 56,465 76,587
-------- --------
399,698 326,587
Unamortized plan amendment 54,248 62,476
Unrecognized net loss (62,311) (8,687)
Postretirement benefit liability recognized in the -------- --------
the statements of consolidated financial condition $391,635 $380,376
======== ========
__________________________________________________________________________
OTHER EMPLOYEE BENEFITS
The Company has a leveraged employee stock ownership plan (ESOP) for eligible
United States employees. The ESOP is designed to fund the Company's
contribution to an existing salaried savings plan. The Company made
contributions to the plan of $5.5 million, $5.2 million and $4.9 million for
loan payments in 1993, 1992 and 1991, the majority of which represents
interest on the ESOP debt. With each loan and interest payment, a portion of
the Common stock in the ESOP becomes available for allocation to
participating employees.
The Company also sponsors other defined contribution plans.
Contributions to these plans are generally based on employees' compensation.
Expenses of the Company related to these plans, including the ESOP, amounted
to $8.6 million in 1993, $7.9 million in 1992 and $7.8 million in 1991.
In November 1992, the Financial Accounting Standards Board issued
Statement No. 112 (FAS 112), "Employers' Accounting for Postemployment
Benefits." The new rules require recognition of specified postemployment
benefits provided to former or inactive employees, such as severance pay,
workers' compensation, supplemental employment benefits, disability benefits
and continuation of healthcare and life insurance coverages. The Company has
estimated the cumulative effect of adopting FAS 112, which will be recorded
in the first quarter of 1994, will not have a material impact on the annual
results for 1994. The ongoing expenses associated with the new statement are
not expected to be material.
______________________________________________________________________________
ACCRUED LIABILITIES
In thousands 1993 1992
------ ------
Warranties $ 46,281 $ 50,877
Advertising/sales promotion 51,946 30,054
Other 79,788 99,963
------ ------
$178,015 $180,894
======= =======
______________________________________________________________________________
INCOME TAXES
Effective January 1, 1992, the Company adopted Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes," which requires
recognition of deferred tax liabilities and assets for the expected future
tax consequences of events that have been included in the financial statements
or tax returns. Under this method, deferred tax liabilities and assets are
are determined based on the difference between the financial statement and tax
bases of assets and liabilities using enacted tax rates in effect for the year
in which the differences are expected to reverse. Prior to 1992, the provision
22
for income taxes was based on income and expenses included in the accompanying
consolidated statements of income. As permitted under the new rules, prior
years' financial statements have not been restated. The cumulative effect of
adopting Statement 109 was to decrease net income by $85 million or $.80 per
share as of January 1, 1992.
At December 31, 1993, the Company has available for tax purposes
approximately $177 million of net operating loss carryforwards outside the
United States, of which $38 million expire in various years through 1999 and
$139 million is available indefinitely. Of this amount, $30 million relates
to pre-acquisition net operating losses which will be used to reduce
intangibles when utilized.
Deferred income taxes reflect the net tax effects of temporary
differences between the amount of assets and liabilities for financial
reporting purposes and the amounts used for income tax purposes. Significant
components of the Company's deferred tax assets and liabilities as of
December 31, 1993 and 1992 are as follows:
In thousands 1993 1992
---------- ---------
Deferred tax assets (liabilities):
Tax over book depreciation $(118,973) $(116,725)
Postretirement benefit obligation 151,424 143,197
Product warranty accruals 20,021 20,221
Pensions and other employee benefits (38,753) (58,704)
Reorganization accrual 8,856 23,586
Net operating loss carryforwards 48,817 23,178
Other 14,937 15,812
--------- ---------
86,329 50,565
Less valuation allowance for deferred tax assets (15,957) (15,873)
--------- ---------
Net deferred tax assets $ 70,372 $ 34,692
Recognized in statements of consolidated ========= =========
financial condition:
Deferred tax assets-current $ 46,695 $ 52,261
Deferred tax assets-noncurrent 68,559 71,442
Deferred tax liabilities (44,882) (89,011)
--------- ---------
Net deferred tax assets $ 70,372 $ 34,692
========= =========
Income (loss) before income taxes and cumulative effect of accounting changes
consists of the following:
Year ended December 31
-------------------------------
In thousands 1993 1992 1991
------- ------ ------
United States $162,554 $ 80,013 $112,988
Non-United States (72,684) (72,467) 10,429
------- ------- -------
$ 89,870 $ 7,546 $123,417
======= ======= =======
23
Significant components of the provision for income taxes are as follows:
Year ended December 31
----------------------------
In thousands 1993 1992 1991
Current provision: ---- ---- ----
Federal $ 51,700 $ 37,000 $ 28,600
State 9,100 7,100 6,000
Non-United States 20,000 2,000 8,100
------ ------ ------
80,800 46,100 42,700
Deferred provision:
Federal 400 (13,800) 7,600
State 700 (3,100)
Non-United States (43,300) (13,300) (5,900)
------ ------ ------
(42,200) (30,200) 1,700
------ ------ ------
Provision for income taxes $ 38,600 $ 15,900 $ 44,400
====== ====== ======
Significant items impacting the effective income tax rate follow:
Year ended December 31
-------------------------------
In thousands 1993 1992 1991
------ ------ ------
Income before cumulative effect of
accounting changes computed at the
statutory United States income tax rate $31,500 $ 2,600 $42,000
Increase (reduction) resulting from:
Acquisitions:
Intangibles amortization 3,200 3,100 3,100
Depreciation 2,400
The effect of statutory rate differences
outside the United States 2,500 2,600 600
Non-United States losses with no tax
benefit 10,700
State income taxes, net of federal tax
benefit 6,400 2,700 4,000
Tax credits arising outside the United
States (800) (5,400) (7,300)
Effect of tax rate changes on deferred
taxes (2,500)
Other-net (1,700) (400) (400)
-------- ------- -------
Provision for income taxes $38,600 $15,900 $44,400
======== ======= =======
Since the Company plans to continue to finance expansion and operating
requirements of subsidiaries outside the United States through reinvestment
of the undistributed earnings of these subsidiaries (approximately $81
million at December 31, 1993), taxes which would result from distribution
have not been provided on such earnings. If such earnings were distributed,
additional taxes payable would be significantly reduced by available tax
credits arising from taxes paid outside the United States.
Income taxes paid, net of refunds received, during 1993, 1992 and 1991
were $68.3 million, $28.5 million, and $34.5 million, respectively.
24
______________________________________________________________________________
LONG-TERM DEBT AND NOTES PAYABLE
In thousands
The following sets forth the long-term debt in the statements of
consolidated financial condition:
1993 1992
Notes payable with interest payable semiannually:
Due May 15, 2002 at 9.75% $200,000 $200,000
Due July 15, 1999 at 8.875% 175,000 175,000
Due July 1, 1997 at 8.875% 100,000 100,000
Medium-term notes, maturing from 1994 to 2010, from
7.69% to 9.03% with interest payable semiannually 177,750 197,250
Employee stock ownership plan notes payable
semiannually through July 2, 2004 at 9.35% 59,129 60,307
Multicurrency loans at 5.4% to 9.475% 63,631
Other 31,321 36,463
--------- --------
743,200 832,651
Less current portion 18,505 43,419
--------- --------
$724,695 $789,232
========= ========
The 9.75% notes, the 8.875% notes due in 1999 and the medium-term notes grant
the holders the right to require the Company to repurchase all or any portion
of their notes at 100% of the principal amount thereof, together with accrued
interest, following the occurrence of both a change in Company control and a
credit rating decline.
The Company has established a trust to administer a leveraged employee
stock ownership plan (ESOP) within an existing employee savings plan. The
Company has guaranteed the debt of the trust and will service the repayment
of the notes, including interest, through the Company's employee savings plan
contribution and from the quarterly dividends paid on stock held by the ESOP.
Dividends paid by the Company on stock held by the ESOP totaled $1.4 million
in 1993, 1992 and 1991. The ESOP notes are secured by the Common stock owned
by the ESOP trust.
The fair value of the Company's long-term debt, based on public quotes if
available, exceeded the amount recorded in the statements of consolidated
financial condition at December 31, 1993 and 1992 by $83.7 million and $50
million, respectively.
Notes payable at December 31, 1993 and 1992 consisted of notes payable to
banks, in addition to $112 million in commercial paper borrowings at December
31, 1993. The Company's commercial paper program is supported by two credit
agreements totaling $300 million, which were entered into on June 25, 1993.
The $100 million agreement expires June 24, 1994 and the $200 million
agreement expires June 25, 1996. Subject to certain exceptions, the credit
agreements require the Company to maintain certain quarterly levels of
consolidated tangible net worth, leverage ratios and interest coverage
ratios. At December 31, 1993, the Company was in compliance with all
covenants. Additional funds available at December 31, 1993 under all credit
agreements, applying the terms of the most restrictive covenant, totaled $243
million.
Interest paid during 1993, 1992 and 1991 was $76.2 million, $77.4
million, and $78.4 million. The aggregate maturities of long-term debt in
each of the next five fiscal years is as follows (in thousands): 1994-
$18,505; 1995-$45,185; 1996-$5,308; 1997-$106,535; 1998-$7,147.
25
______________________________________________________________________________
STOCK PLANS
In 1992, the shareowners approved the 1992 stock option plan for executives
and key employees. The plan provides that options could be granted to key
employees for not more than 3.6 million shares of the Common stock of the
Company. The option price under the plan is the fair market value at the
date of the grant. Options may not be exercised until one year after the
date granted.
Under the Company's 1986 plan which expired in 1991, options to purchase
1.6 million shares of Common stock were granted at the market value at the
date of grant. Some options were also granted under this plan with stock
appreciation rights (SAR) which entitle the employee to surrender the right
to receive up to one-half of the shares covered by the option and to receive
a cash payment equal to the difference between the option price and the
market value of the shares being surrendered. Under a plan which expired in
1986, options to purchase 800,000 shares of Common stock were granted at the
market value at date of grant.
In April 1990, the Company's shareowners approved the Maytag Corporation
1989 Stock Option Plan for Non-Employee Directors which authorizes the issuance
of up to 250,000 shares of Common stock to the Company's non-employee
directors. Options under this plan are immediately exercisable upon grant.
The following is a summary of certain information relating to these plans:
Average Option
Price Shares SAR
------- ------- -------
Outstanding December 31, 1990 $14.81 966,851 459,131
Granted 14.76 885,920 246,240
Exercised 10.49 (7,526)
Canceled or expired 17.59 (18,450) (12,988)
--------- -------
Outstanding December 31, 1991 14.76 1,826,795 692,383
Granted 14.54 411,910
Exercised 9.86 (179,736) (11,192)
Exchanged for SAR 11.16 (11,192)
Canceled or expired 12.63 (34,640) (93,242)
--------- -------
Outstanding December 31, 1992 15.09 2,013,137 587,949
Granted 15.92 599,060
Exercised 12.89 (101,156) (5,360)
Exchanged for SAR 12.53 (5,360)
Canceled or expired 16.26 (147,080) (85,728)
--------- -------
Outstanding December 31, 1993 15.33 2,358,601 496,861
========= =======
Options for 1,777,361 shares, 1,623,227 shares and 964,875 shares were
exercisable at December 31, 1993, 1992 and 1991. There were 2,784,030 shares
available for future grants at December 31, 1993. In the event of a change
in Company control, all stock options granted become immediately exercisable.
In 1991, the shareowners approved the 1991 Stock Incentive Award Plan For
Key Executives. This plan authorizes the issuance of up to 2.5 million shares
of Common stock to certain key employees of the Company, of which 1,980,338
shares are available for future grants as of December 31, 1993. Under the
terms of the plan, the granted stock vests three years after the award date and
is contingent upon pre-established performance objectives. In the event of a
change in Company control, all incentive stock awards become fully vested. No
incentive stock awards may be granted under this plan on or after May 1, 1996.
Incentive stock award shares outstanding at December 31, 1993 under a 1993
26
grant total 459,957, and $3.6 million has been expensed during 1993 for the
the anticipated payout on these awards. Under a 1991 grant which expired in
1993, 53,068 shares are vested and outstanding and $1.1 million has been
expensed during 1993. No amounts were expensed in 1992 and 1991 under these
awards.
______________________________________________________________________________
SHAREOWNERS' EQUITY
Common Stock Additional Treasury Stock Employee Foreign
__________________ Paid-in Retained ___________________ Stock Currency
In thousands Shares Amount Capital Earnings Shares Amount Plans Translation
------ ------ ---------- ---------- -------- -------- -------- -----------
Balance 12/31/90 117,151 $146,438 $487,034 $670,878 (11,424) $(254,576) $(63,590) $ 28,547
Net income 79,017
Cash dividends (53,150)
Stock issued under
employee
stock plans (50) 8 168
Stock awards:
Granted (6,953) 588 13,110 (6,157)
Earned or
canceled 96 (17) (376) 2,130
Conversion of
subordinated
debentures 7 (1) (22)
ESOP:
Issued (301) 38 848
Allocated 906
Translation
adjustments (33,419)
_______ _______ _______ _______ ________ _________ ________ _______
Balance 12/31/91 117,151 146,438 479,833 696,745 (10,808) (240,848) (66,711) (4,872)
Net loss (315,354)
Cash dividends (53,269)
Stock issued under
employee
stock plans (1,221) 178 3,970
Stock awards:
Granted (204) 41 921 (718)
Earned or
canceled 524 (44) (970) 446
ESOP:
Issued (469) 87 1,934
Allocated 1,345
Translation
adjustments (48,295)
_______ _______ _______ _______ _______ _______ ______
Balance 12/31/92 117,151 146,438 478,463 328,122 (10,546) (234,993) (65,638) (53,167)
Net income 51,270
Cash dividends (53,569)
Stock issued under
employee
stock plans (911) 92 2,111
Stock awards:
Granted (3,645) 491 10,939 (7,294)
Earned or
canceled 6,136 (550) (12,403) 9,102
ESOP:
Issued (651) 82 1,836
Allocated 1,488
Tax benefit of
ESOP
dividends and
stock options 675
Translation
adjustments (17,528)
-------- -------- -------- -------- -------- -------- -------- -------
Balance 12/31/93 117,151 $ 146,438 $ 480,067 $ 325,823 (10,431) $(232,510) $ (62,342) $ (70,695)
======== ======== ======== ======== ======== ======== ======== ========
The Company has 24 million authorized shares of Preferred stock, par value $1
per share, none of which is issued.
Pursuant to a Shareholder Rights Plan approved by the Company in 1988,
each share of Common stock carries with it one Right. Until exercisable, the
Rights will not be transferable apart from the Company's Common stock. When
exercisable, each Right will entitle its holder to purchase one one-hundredth
of a share of Preferred stock of the Company at a price of $75. The Rights
will only become exercisable if a person or group acquires 20% or more of the
Company's Common stock which may be reduced to not less than 10% at the
discretion of the Board of Directors. In the event the Company is acquired in
a merger or 50% or more of its consolidated assets or earnings power are sold,
27
each Right entitles the holder to purchase Common stock of either the
surviving or acquired company at one-half its market price. The Rights may
be redeemed in whole by the Company at a purchase price of $.01 per Right.
The Preferred shares will be entitled to 100 times the aggregate per share
dividend payable on the Company's Common stock and to 100 votes on all
matters submitted to a vote of shareowners. The Rights expire May 2, 1998.
______________________________________________________________________________
INDUSTRY SEGMENT AND GEOGRAPHIC INFORMATION
Principal financial data by industry segment is as follows:
In thousands 1993 1992 1991
Net Sales --------- --------- ---------
Home appliances $2,830,457 $2,875,902 $2,820,828
Vending equipment 156,597 165,321 149,798
--------- --------- ---------
Total $2,987,054 $3,041,223 $2,970,626
========= ========= =========
Income (Loss) Before Income Taxes and
Cumulative Effect of Accounting Changes
Home appliances $ 160,431 $ 62,568 $ 187,018
Vending equipment 17,566 16,311 4,498
Corporate (including interest expense) (88,127) (71,333) (68,099)
--------- --------- ---------
Total $ 89,870 $ 7,546 $ 123,417
========= ========= =========
Capital Expenditures-net
Home appliances $ 92,194 $ 115,676 $ 133,504
Vending equipment 1,028 771 4,612
Corporate 2,768 3,917 (16)
--------- --------- ---------
Total $ 95,990 $ 120,364 $ 138,100
========= ========= =========
Depreciation and Amortization
Home appliances $ 105,916 $ 98,116 $ 86,928
Vending equipment 4,377 4,236 4,805
Corporate 1,488 999 934
--------- --------- ---------
Total $ 111,781 $ 103,351 $ 92,667
========= ========= =========
Identifiable Assets
Home appliances $2,147,174 $2,135,961 $2,200,227
Vending equipment 103,765 104,119 119,752
Corporate 218,559 261,410 215,089
--------- --------- ---------
Total $2,469,498 $2,501,490 $2,535,068
========= ========= =========
28
Information about the Company's operations in different geographic locations is
as follows:
In thousands 1993 1992 1991
Net Sales --------- --------- ---------
North America $2,468,374 $2,407,591 $2,332,365
Europe 390,761 501,857 495,517
Other 127,919 131,775 142,744
--------- --------- ---------
Total $2,987,054 $3,041,223 $2,970,626
========= ========= =========
Income (Loss) Before Income Taxes and
Cumulative Effect of Accounting Changes
North America $ 246,981 $ 145,991 $ 190,820
Europe (72,358) (67,061) (865)
Other 3,374 (51) 1,561
Corporate (including interest expense) (88,127) (71,333) (68,099)
--------- --------- ---------
Total $ 89,870 $ 7,546 $ 123,417
========= ========= =========
Identifiable Assets
North America $1,794,271 $1,677,131 $1,681,304
Europe 359,323 452,995 507,746
Other 97,345 109,954 130,929
Corporate 218,559 261,410 215,089
--------- ---------- ---------
Total $2,469,498 $2,501,490 $2,535,068
========= ========= =========
Sales between affiliates of different geographic regions are not significant.
The amount of exchange gain or loss included in operations in any of the
years presented was not material.
In 1993 the Company incurred $60.4 million in pretax charges for two
"free flights" promotion programs in Europe ($50 million in a special charge
and $10.4 million in selling, general and administrative expenses). In 1992
the Company incurred $95 million of reorganization expenses for marketing and
distribution changes in North America and plant closings and other
organizational changes in Europe. Of the $95 million allocated to Home
Appliances, $40 million was allocated to North America and $55 million to
Europe.
_____________________________________________________________________________
CONTINGENT LIABILITIES
In 1993 and 1992, the Company made provisions to cover the cost of two Hoover
Europe "free flights" promotion programs, including a $50 million special
charge in the first quarter of 1993. The promotions began in August, 1992
and included qualified purchases through January, 1993. The terms of the
promotions require all flights to be completed by the end of the second
quarter of 1994. The Company believes that it has made adequate provisions
for any costs to be incurred relating to these promotions. Although the
final costs of the promotions cannot be determined at this time, management
does not believe that any additional costs that may be incurred will have a
material adverse effect on the financial condition of the Company.
At December 31, 1993, the Company is contingently liable for guarantees
of indebtedness owed by a third party ("the borrower") of $21.3 million
relating to the sale of one of its manufacturing facilities in 1992. The
borrower is performing under the payment terms of the loan agreement;
however, it had been out of compliance with certain financial covenants at
December 31, 1993 for which it has requested a waiver from the lender
involved. The indebtedness is collateralized by the assets of the borrower.
Other contingent liabilities arising in the normal course of business,
including guarantees, repurchase agreements, pending litigation,
environmental issues, taxes and other claims are not considered to be
material in relation to the Company's financial position.
29
QUARTERLY RESULTS OF OPERATIONS (Unaudited)
________________________________________________________________________________
The following is a summary of unaudited quarterly results of operations for the
years ended December 31, 1993 and 1992.
December 31 September 30 June 30 March 31
----------- ------------ ---------- ---------
In thousands except per share data
1993
Net sales $746,723 $770,222 $753,256 $716,853
Gross profit 179,066 188,501 183,812 172,733
Net income (loss) 17,469 23,040 21,307 (10,546)
Per average share $ .16 $ .22 $ .20 $ (.10)
1992
Net sales $782,446 $735,540 $770,060 $753,177
Gross profit 173,495 161,871 176,803 189,648
Income (loss) before cumulative
effect of accounting change 11,238 (63,234) 18,937 24,705
Per average share .11 (.60) .18 .23
Net income (loss) 11,238 (63,234) 18,937 (282,295)
Per average share $ .11 $ (.60) $ .18 $ (2.66)
The quarter ended March 31, 1993 includes a $50 million pretax special
charge for additional costs associated with two Hoover Europe "free flights"
promotion programs.
The quarter ended September 30, 1992 includes a nonrecurring $95 million
pretax charge relating to the reorganization of the Company's North American
and European operations.
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.
Information concerning directors and officers on pages 1 through 6 of the Proxy
Statement of the Company is incorporated herein by reference. Additional
information concerning executive officers of the Company is included under
"Executive Officers of the Registrant" included in Part I,Item 4.
Item 11. Executive Compensation.
Information concerning executive compensation on pages 7 through 12 of the
Proxy Statement, is incorporated herein by reference; provided that the
information contained in the Proxy Statement under the heading "Compensation
Committee Report on Executive Compensation" is specifically not incorporated
herein by reference. Information concerning director compensation on pages
15 and 16 of the Proxy Statement is incorporated herein by reference,
provided that the information contained in the Proxy Statement under the
headings "Shareholder Return Performance" and "Shareholder Proposal
Concerning Chief Executive Officer Compensation" is specifically not
incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
The security ownership of certain beneficial owners and management is
incorporated herein by reference from pages 4 through 6 of the Proxy Statement.
30
Item 13. Certain Relationships and Related Transactions.
Information concerning certain relationships and related transactions is
incorporated herein by reference from pages 2 through 4 of the Proxy Statement.
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
(a)(1) and (2) The response to this portion of Item 14 is submitted as a
separate section of this report in the "List of Financial
Statements and Financial Statement Schedules" on page 34.
(3) The response to this portion of Item 14 is submitted as a
separate section of this report in the "List of Exhibits" on
pages 35 through 38.
(b) No reports on Form 8-K were filed during the fourth quarter of 1993.
(c) Exhibits--The response to this portion of Item 14 is submitted as a
separate section of this report in the "List of Exhibits" on pages 35
through 38.
(d) Financial Statement Schedules--The response to this portion of Item 14 is
submitted as a separate section of this report in the "List of Financial
Statements and Financial Statement Schedules" on page 34.
31
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.
MAYTAG CORPORATION
(Registrant)
Leonard A. Hadley
Leonard A. Hadley
Chairman and Chief Executive Officer
Director
Pursuant to the requirement 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.
John P. Cunningham John A. Sivright
John P. Cunningham John A. Sivright
Executive Vice President and Director
Chief Financial Officer
Mark A. Garth Lester Crown
Mark A. Garth Lester Crown
Vice President-Controller and Director
Chief Accounting Officer
Fred G. Steingraber Edward C. Cazier, Jr.
Fred G. Steingraber Edward C. Cazier, Jr.
Director Director
Neele E. Stearns, Jr. Peter S. Willmott
Neele E. Stearns, Jr. Peter S. Willmott
Director Director
Date: March 30, 1994
32
ANNUAL REPORT ON FORM 10-K
Item 14(a)(1), (2) and (3), (c) and (d)
LIST OF FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES
LIST OF EXHIBITS
FINANCIAL STATEMENT SCHEDULES
Year Ended December 31, 1993
MAYTAG CORPORATION
NEWTON, IOWA
33
FORM 10-K--ITEM 14(a)(1) AND ITEM 14(d)
MAYTAG CORPORATION
LIST OF FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES
The following consolidated financial statements and supplementary data of
Maytag Corporation and subsidiaries are included in Part II, Item 8:
Page
----
Statements of Consolidated Income--Years Ended
December 31, 1993, 1992 and 1991 . . . . . . . . . . . . . 14
Statements of Consolidated Financial Condition--
December 31, 1993 and 1992 . . . . . . . . . . . . . . . . 15
Statements of Consolidated Cash Flows--Years Ended
December 31, 1993, 1992 and 1991 . . . . . . . . . . . . . 17
Notes to Consolidated Financial Statements . . . . . . . . . 18
Quarterly Results of Operations--Years 1993 and 1992 . . . . 30
The following consolidated financial statement schedules of Maytag
Corporation and subsidiaries are included in Item 14(d):
Schedule V Property, Plant and Equipment . . . . . . . . . 39
Schedule VI Accumulated Depreciation, Depletion and
Amortization of Property, Plant and Equipment . 40
Schedule VIII Valuation and Qualifying Accounts . . . . . . 41
Schedule IX Short-Term Borrowings . . . . . . . . . . . . . 42
Schedule X Supplementary Income Statement Information . . 43
All other schedules for which provision is made in the applicable accounting
regulations of the Securities and Exchange Commission are not required under
the related instructions or are inapplicable, and therefore have been
omitted.
34
FORM 10-K--ITEM 14(a) (3) AND ITEM 14(c)
MAYTAG CORPORATION
LIST OF EXHIBITS
The following exhibits are filed herewith or incorporated by reference.
Items indicated by (1) are considered a compensatory plan or arrangement
required to be filed pursuant to Item 14 of Form 10-K.
Incorporated Filed with
Exhibit Herein by Electronic
Number Description of Document Reference to Submission
- ------- ----------------------- ------------ ----------
3(a) Restated Certificate of Incorporation of X
Registrant.
3(b) Certificate of Designations of Series A 1988 Annual
Junior Participating Preferred Stock of Report on
Registrant. Form 10-K.
3(c) Certificate of Increase of Authorized 1988 Annual
Number of Shares of Series A Junior Report on
Participating Preferred Stock of Form 10-K.
Registrant.
3(d) By-Laws of Registrant, as amended through X
February 7, 1991.
4(a) Rights Agreement dated as of May 2, 1988 Current
between Registrant and The First National Report on
Bank of Boston. Form 8-K
dated May 5,
1988,
Exhibit 1.
4(b) Amendment, dated as of September 24, 1990 Current
to the Rights Agreement, dated as of May Report on
2, 1988 between the Registrant and The Form 8-K
First National Bank of Boston. dated October
3, 1990,
Exhibit 1.
4(c) Indenture dated as of June 15, 1987 Quarterly
between Registrant and The First National Report on
Bank of Chicago. Form 10-Q for
the quarter
ended June
30, 1987.
4(d) First Supplemental Indenture dated as of Current
September 1, 1989 between Registrant and Report on
The First National Bank of Chicago. Form 8-K
dated
September 28,
1989, Exhibit
4.3.
35
Incorporated Filed with
Exhibit Herein by Electronic
Number Description of Document Reference to Submission
- ------ ----------------------- ------------ ----------
4(e) Second Supplemental Indenture dated as of Current
November 15, 1990 between Registrant and Report on
The First National Bank of Chicago. Form 8-K
dated
November 29,
1990.
4(f) U.S. $100,000,000 Credit Agreement Dated X
as of June 25, 1993 Among Registrant, the
Banks Party Hereto and Bank of Montreal,
Chicago Branch as Agent and Royal Bank of
Canada.
4(g) U.S. $200,000,000 Credit Agreement Dated X
as of June 25, 1993 Among Registrant, the
Banks Party Hereto and Bank of Montreal,
Chicago Branch as Agent and Royal Bank of
Canada.
4(h) First Amendment, Dated as of March 4, X
1994 to the U.S. $100,000,000 Credit
Agreement, Dated as of June 25, 1993
among Registrant, the Banks party Hereto
and Bank of Montreal, Chicago Branch as
Agent and Royal Bank of Canada as Co-
Agent.
4(i) First Amendment, Dated as of March 4, X
1994 to the U.S. $200,000,000 Credit
Agreement, dated as of June 25, 1993
among Registrant, the banks Party Hereto
and Bank of Montreal, Chicago Branch as
Agent and Royal Bank of Canada as Co-
Agent.
4(j) Copies of instruments defining the rights
of holders of long-term debt not required
to be filed herewith or incorporated
herein by reference will be furnished to
the Commission upon request.
10(a) Annual Management Incentive Plan, as 1990 Annual
amended through December 21, 1990 (1). Report on
Form 10-K
10(b) Executive Severance Agreements (1). X
10(c) Corporate Severance Agreements (1). 1989 Annual
Report on
Form 10-K.
10(d) Termination Agreement with Harvey 1989 Annual
Kapnick, Director and former Chief Report on
Executive Officer of Chicago Pacific Form 10-K.
Corporation (1).
36
Incorporated Filed with
Exhibit Herein by Electronic
Number Description of Document Reference to Submission
- ------- ----------------------- ------------ ----------
10(e) 1989 Non-Employee Directors Stock Option Exhibit A to
Plan (1). Registrant's
Proxy
Statement
dated March
18, 1990.
10(f) 1981 Stock Option Plan for Executives 1992 Annual
and Key Employees (1). Report on
Form 10-K.
10(g) 1986 Stock Option Plan for Executives Exhibit A to
and Key Employees (1). Registrant's
Proxy
Statement
dated March
14, 1986.
10(h) 1992 Stock Option Plan for Executives Exhibit A to
and Key Employees (1). Registrant's
Proxy
Statement
dated March
16, 1992.
10(i) 1987 Stock Incentive Award Plan for Key Exhibit B to
Executives (1). Registrant's
Proxy
Statement
dated March
25, 1987.
10(j) 1991 Stock Incentive Award Plan for Key Exhibit A to
Executives (1). Registrant's
Proxy
Statement
dated March
15, 1991.
10(k) Directors Deferred Compensation Plan (1). Amendment
No. 1 on
Form 8 dated
April 5, 1990 to
1989 Annual
Report on
Form 10-K.
10(l) 1988 Capital Accumulation Plan for Key Amendment No.
Employees (1). 1 on Form 8
dated April
5, 1990 to
1989 Annual
Report on
Form 10-K.
37
Incorporated Filed with
Exhibit Herein by Electronic
Number Description of Document Reference to Submission
- ------- ----------------------- ------------ ----------
10(m) Directors Retirement Plan (1). Amendment No.
1 on Form 8
dated April
5, 1990 to
1989 Annual
Report on
Form 10-K.
11 Computation of Per Share Earnings. X
12 Ratio of Earnings to Fixed Charges. X
21 List of Subsidiaries of the Registrant. X
23 Consent of Ernst & Young. X
99(a) Annual Report on Form 11-K of the Maytag X
Corporation Salary Savings Plan.
99(b) Annual Report on Form 11-K of the Hoover X
Company Retirement Savings Plan for
Hourly-Rated Employees.
38
SCHEDULE V--PROPERTY, PLANT AND EQUIPMENT
Thousands of Dollars
COL. A COL. B COL. C COL. D COL. E COL. F
Balance at Beginning Other Changes--Add Balance at End
CLASSIFICATION of Period Additions at Cost Retirements (Deduct)--Describe of Period
- ---------------------------- -------------------- ----------------- ------------ ------------------- ---------------
Year ended December 31, 1993:
Land $ 47,370 $ 10 $ 174 $ (1,057) $ 46,149
Buildings and improvements 286,368 5,766 1,549 (1,994) 288,591
Machinery and equipment 962,006 122,420 14,350 (1,875) 1,068,201
Construction in progress 90,847 (28,896) (17,201) 44,750
--------- ------- ------ ------- ---------
TOTAL $1,386,591 $ 99,300 $ 16,073 $ (22,127) $1,447,691
========= ======= ====== ======= =========
Year ended December 31, 1992:
Land $ 51,147 $ 588 $ 838 $ (3,527) $ 47,370
Buildings and improvements 296,684 5,242 3,662 (11,896) 286,368
Machinery and equipment 895,025 124,376 35,765 (21,630) 962,006
Construction in progress 92,954 (315) (1,792) 90,847
--------- ------- ------ ------- ---------
TOTAL $1,335,810 $129,891 $ 40,265 $ (38,845) $1,386,591
========= ======= ====== ======= =========
Year ended December 31, 1991:
Land $ 50,613 $ 913 $ 64 $ (315) $ 51,147
Buildings and improvements 282,828 19,615 1,891 (3,868) 296,684
Machinery and equipment 828,464 91,581 14,840 (10,180) 895,025
Construction in progress 61,775 31,263 (84) 92,954
--------- ------- ------ ------- -------
TOTAL $3,895,300 $403,154 $ 97,325 $ (92,137) $4,108,992
========= ======= ====== ======= =========
The annual provisions for depreciation have been computed principally in accordance with the following ranges
in rates:
Buildings and improvements 2% to 10%
Machinery and equipment 7% to 20%
Note 1 - Net of transfers to buildings and improvements and machinery and equipment
Note 2 - Effect of foreign currency translation
Note 3 - Reclassifications to other assets
Note 4 - Reclassifications associated with plant closing
Note 5 - Reclassifications between machinery and equipment and construction in progress
39
SCHEDULE VI--ACCUMULATED DEPRECIATION, DEPLETION AND AMORTIZATION
OF PROPERTY, PLANT AND EQUIPMENT
Thousands of Dollars
COL. A COL. B COL. C COL. D COL. E COL. F
Balance at Beginning Additions Charged to Other Changes--Add Balance at End
DESCRIPTION of Period Costs and Expenses Retirements (Deduct)--Describe of Period
- -------------------- -------------------- -------------------- ----------- ------------------ --------------
Year ended December 31, 1993:
Buildings and improvements $ 98,755 $ 11,297 $ 780 $ (477) $ 108,795
Machinery and equipment 453,725 91,162 11,542 (15,511) 517,834
------- ------- ------ ------- -------
TOTAL $552,480 $102,459 $ 12,322 $ (15,988) $ 626,629
======= ======= ====== ======= =======
Year ended December 31, 1992:
Buildings and improvements $ 93,033 $ 11,833 $ 2,327 $ (3,784) $ 98,755
Machinery and equipment 407,284 82,199 28,411 (7,347) 453,725
------- ------- ------ ------ -------
TOTAL $500,317 $ 94,032 $ 30,738 $ (11,131) $ 552,480
======= ======= ====== ======= =======
Year ended December 31, 1991:
Buildings and improvements $ 83,006 $ 11,711 $ 1,288 $ (396) $ 93,033
Machinery and equipment 350,217 71,641 10,235 (4,339) 407,284
------- ------- ------ ------- -------
TOTAL $433,223 $ 83,352 $ 11,523 $ (4,735) $ 500,317
======= ======= ====== ======= =======
Note 1 - Effect of foreign currency translation
Note 2 - Reclassifications to other assets
Note 3 - Reclassifications associated with plant closing
40
SCHEDULE VIII--VALUATION AND QUALIFYING ACCOUNTS
Thousands of Dollars
COL. A COL. B COL. C COL. D COL. E
ADDITIONS
DESCRIPTION Balance at Beginning ----------------- Deductions--Describe Balance at End
of Period Charged to Costs Charged to Other of Period
and Expenses Accounts--Describe
- ------------------------ ------------------- --------------- ------------------ -------------------- --------------
Year ended December 31, 1993:
Allowance for doubtful $16,380 $ 6,678 $ 7,054 $ 15,629
accounts receivable 375
------- ------- ----- ------
$16,380 $ 6,678 $ 7,429 $ 15,629
======= ====== ===== ======
Year ended December 31, 1992:
Allowance for doubtful $14,119 $10,974 $ 7,969 $ 16,380
accounts receivable 744
------ ------ ----- ------
$14,119 $10,974 $ 8,713 $ 16,380
====== ====== ===== ======
Year ended December 31, 1991:
Allowance for doubtful $17,600 $ 8,670 $(3,493) $ 8,283 $ 14,119
accounts receivable 375
------ ------ ------- ----- ------
$17,600 $ 8,670 $(3,493) $ 8,658 $ 14,119
====== ====== ======= ===== ======
Note 1 - Reclassifications
Note 2 - Uncollectible accounts written off
Note 3 - Effect of foreign currency translation
41
SCHEDULE IX--SHORT-TERM BORROWINGS
Thousands of Dollars
COL. A COL. B COL. C COL. D COL. E COL. F
Balance Weighted Average Maximum Amount Average Amount Weighted Average
CATEGORY OF AGGREGATE SHORT-TERM BORROWINGS at End of Interest Rate Outstanding During Outstanding During Interest Rate
Period the Period the Period(f3> During the Period
- ---------------------------------------------- --------- --------------- ---------------- ---------------- ---------------------
1993:
Notes Payable to Banks $157,571 3.98% $215,181 $136,233 5.22%
======= ===== ======= ======= ====
1992:
Notes Payable to Banks $ 19,886 11.36% $130,085 $ 77,288 8.62%
======= ===== ======= ======= ====
1991:
Notes Payable to Banks $ 23,504 11.98% $ 91,465 $ 48,500 11.81%
======= ===== ======= ======= =====
Note 1 - The Company maintains both secured and unsecured lines of credit and utilizes the issuance of commercial paper
for short-term borrowing requirements.
Note 2 - The maximum amount outstanding as of any month-end during the fiscal year.
Note 3 - The average amount outstanding during the period was calculated by dividing fiscal month-end balances by the
number of months during the period.
Note 4 - The weighted average interest rate during the period was calculated by dividing interest expense relating to
short-term debt by the average amount outstanding during the period. The rate differs from the weighted average
interest rate in Column C due to changes in the composition of borrowings (United States and non-United States)
during the year.
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SCHEDULE X--SUPPLEMENTARY INCOME STATEMENT INFORMATION
Thousands of Dollars
COL. A COL. B
ITEM Charged to Costs and Expenses
- ------------------------ ------------------------------------------------
1993 1992 1991
---- ---- ----
Maintenance and repairs $ 53,128 $ 54,982 $ 50,504
Advertising costs 136,452 134,024 119,391
NOTE - All other items are not stated as such amounts are less than 1% of total
sales and revenues.
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