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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
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, 1994
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
COMMISSION FILE NUMBER 1-3932
WHIRLPOOL CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 38-1490038
(STATE OF INCORPORATION) (I.R.S. EMPLOYER IDENTIFICATION NO.)
2000 NORTH M-63, BENTON HARBOR, MICHIGAN 49022-2692
(ADDRESS OF PRINCIPAL EXECUTIVE (ZIP CODE)
OFFICES)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (616) 923-5000
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
NAME OF EACH EXCHANGE
ON
TITLE OF CLASS WHICH REGISTERED
-------------- ---------------------
Common stock, par value $1.00 per share Chicago Stock Exchange
New York Stock Exchange
Liquid Yield Option Notes due 2011 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, 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 the 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 .
The aggregate market value of the voting stock of the registrant held by
stockholders [not including voting stock held by directors and elected officers
of the registrant and certain employee plans of the registrant (the exclusion
of such shares shall not be deemed an admission by the registrant that any such
person is an affiliate of the registrant)] on March 3, 1995, was
$3,875,448,476.
On March 3, 1995, the registrant had 74,163,512 shares of common stock
outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the following documents are incorporated herein by reference into
the Part of the Form 10-K indicated:
PART OF FORM 10-K INTO
DOCUMENT WHICH INCORPORATED
-------- ----------------------
The Company's annual report to stockholders for the year
ended December 31, 1994 Parts I, II and IV
The Company's proxy statement for the 1995 annual meeting
of stockholders (SEC File No. 1-3932) Part III
EXHIBIT INDEX ON PAGE: **
TOTAL NUMBER OF PAGES: ***
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PART I
ITEM 1. BUSINESS.
GENERAL
Whirlpool Corporation, the leading worldwide manufacturer and marketer of
major home appliances, was incorporated in 1955 under the laws of Delaware as
the successor to a business that traces its origin to 1898. As used herein, and
except where the context otherwise requires, the term "Company" includes
Whirlpool Corporation and its consolidated subsidiaries. All currency figures
are in U.S. dollars.
RECENT DEVELOPMENTS
RESTRUCTURING
In November 1994, the Company announced a restructuring of its North American
and European operations, resulting in a before tax charge of approximately $240
million. The restructuring, designed to improve efficiency, better integrate
operations and reduce costs, will result in the elimination of approximately
3,200 jobs worldwide. The Company expects to realize annual cost savings of
about $150 million by 1997.
Regarding Whirlpool Europe, B.V. ("WEBV" or "Whirlpool Europe"), the
restructuring is aimed at furthering the Company's pan-European approach to
delivering products and services. The restructuring shifts the organization
from country focused sales, marketing and support functions to a trade channel
focus. The changes are designed to support the two key elements of WEBV's
strategy. The first involves improving efficiency, reducing costs and creating
greater value in the products and services delivered to the marketplace. The
second centers on improving the Company's core business processes aimed at
satisfying trade partners who sell Whirlpool products and the customers who buy
them. The core business processes include product creation, brand management,
trade partner management, logistics and customer service.
A major focus of the restructuring is a new sales organization that will
operate at three levels: a centralized European level, based in Whirlpool
Europe's offices in Italy; an "Area" level involving four groupings of
countries based on similar channel characteristics; and a "local" market level.
The sales organization will also assume responsibility for trade marketing,
which encompasses merchandising, promotions and the creation of unique programs
for trade partners at the European, Area and Local levels. Group Marketing will
continue to be organized by brand and product category on a European level. The
restructuring will result in the loss of about 2,000 jobs.
In North America, the restructuring will result in the loss of approximately
1,200 jobs and the closing of manufacturing facilities in Cambridge, Ontario,
Canada, and Columbia, South Carolina.
NORTH AMERICA
In December 1994, the Board of Directors approved a plan to buy back up to
five (5) percent of the Company's outstanding shares of common stock. The
shares may be purchased from time to time via open-market and privately
negotiated transactions. Through February 28, 1995 the Company had repurchased
approximately 965,800 shares.
In September 1994, the Company sold its minority interest in Matsushita Floor
Care Company, a joint venture which manufactures and markets vacuum cleaners in
North America. The sale resulted in cash proceeds of $44 million and a before
tax gain of $26 million.
During 1994, the Company announced several investments designed to expand or
improve its manufacturing capabilities in North America. These investments
included: the construction of a new $100 million range facility in Tulsa,
Oklahoma; an approximate $42 million commitment to redesign the automatic
washer facility in Clyde, Ohio, to allow the manufacture of horizontal axis
washers; and an approximate $12 million investment to construct and equip a new
small appliance manufacturing facility in Greenville, Ohio.
1
ASIA
In August 1994, Whirlpool Asia announced a realignment of its organization in
an effort to accelerate execution of its strategic plan. The realignment calls
for four operating regions: the Greater China region, based in Hong Kong, which
includes the Peoples Republic of China and Hong Kong; the South Asia region,
based in New Delhi, which includes India, Pakistan and other surrounding
markets; the North Asia region, based in Tokyo, which includes Japan, Korea,
the Philippines and Taiwan; and the Southeast Asia-Australia region, based in
Singapore.
In December 1994, the Company announced it had reached agreement to acquire
majority interests in two joint ventures in the Peoples Republic of China to
manufacture and market microwave ovens and refrigerators. In the larger of the
two agreements, the Company will spend approximately $90 million to acquire a
majority stake in SMC Microwave Products Co., Ltd. ("SMC"). The transaction
will place the Company among the top five microwave oven producers in the
world. The SMC transaction is expected to receive government approval and close
during late first quarter or early second quarter of 1995.
The other joint venture links the Company with Beijing Snowflake Electric
Appliance Group Corporation ("Beijing Snowflake"), a state-owned enterprise and
the first producer of refrigerators in China. The new joint venture company
will be known as the Beijing Whirlpool Snowflake Electric Appliance Company,
Limited, with the Company investing about $17 million for a 60 percent position
in the venture. This is the first joint venture company for refrigerators
involving a Western partner in China. The Beijing Snowflake transaction
received government approval and closed in December 1994.
In related developments, the Company's Brazilian affiliate, Embraco S.A., has
signed a joint venture agreement with Beijing Snowflake to produce compressors.
Embraco would hold a majority equity position with Whirlpool and Beijing
Snowflake holding minority positions. The Company has also signed a joint
venture agreement for the production of washing machines with the Shanghai
Narcissus Electric Appliance Corp., Ltd., a leading manufacturer of washing
machines. These transactions are expected to receive government approval and
close during late first quarter or early second quarter of 1995.
In August 1994, the Company announced an agreement in principle under which
the Company will purchase the remaining interest of Sundaram-Clayton, Ltd. in
TVS Whirlpool, Ltd. ("TWL"), an automatic washer joint venture based in Madras,
India. The agreement, which is subject to government approval, will raise the
Company's stake in the joint venture to 78 percent. As part of the transaction,
TWL will have the right to use the TVS brand name on washer products for three
years following the closing. The Company assumed controlling interest of TWL
earlier this year through a capital restructuring.
In July 1994, the Company announced it had reached agreement to acquire a
controlling interest in Kelvinator of India, Ltd. (KOI), historically the
largest manufacturer and marketer of refrigerators in India, for approximately
$120 million in cash. The acquisition received government approval and closed
during the first quarter of 1995. As part of the transaction, KOI will have the
right to use the Kelvinator name for a two year phase-out period beginning on
December 29, 1994 on refrigerators, freezers, ice making machines, refrigerated
display cabinets and microwave ovens.
LATIN AMERICA
In May 1994, the Brasmotor Group in Brazil merged two of its subsidiaries,
Consul S.A. and Brastemp S.A., both manufacturers of home appliances, into a
new company, Multibras S.A. Electrodomesticos ("Multibras"). The consolidation
has resulted in significant operating efficiencies and better management of
brands and products. Multibras is the leading producer and marketer of major
appliances in Brazil with
2
annual sales of $1 billion. The restructuring did not materially affect the
Company's significant, minority equity interest in the Brasmotor Group. The
move did not affect Embraco, a producer of compressors in Brazil and Italy that
is also part of the Brasmotor Group.
WHIRLPOOL FINANCIAL CORPORATION
In October 1994, Whirlpool Financial Corporation ("WFC"), a majority owned
subsidiary of the Company, began operating a national credit card bank,
Whirlpool Financial National Bank ("WFNB"), a wholly-owned subsidiary of WFC,
after receiving approval of its charter from the Office of the Comptroller of
Currency and the Federal Deposit Insurance Corporation. WFNB will function
solely as a credit facility for the purpose of issuing consumer credit cards
(private and non-private label) and the related lending for consumer purchases.
FINANCIAL INFORMATION RELATING TO BUSINESS SEGMENTS,
FOREIGN AND DOMESTIC OPERATIONS AND EXPORT SALES
The Company operates predominantly in the business segments classified as
Major Home Appliances and Financial Services.
During 1994, the Company's U.S. operations sold product into Canada, Mexico,
Latin America, Asia and Europe. However, export sales by the Company's U.S.
operations were less than 10 percent of gross revenues.
For certain other financial information concerning the Company's business
segments and foreign and domestic operations, see Note 15 of the Notes to
Consolidated Financial Statements in the Company's Annual Report to
Stockholders (the "Annual Report"), which is incorporated herein by reference.
PRODUCTS AND SERVICES
The Company manufactures and markets a full line of major home appliances and
related products for home and commercial use and provides certain inventory,
consumer and other financial services. The Company's principal products and
financial services are as follows:
Major Home Appliances:
Home laundry appliances: automatic and semi-automatic washers; automatic
dryers; coin-operated laundry machines; and combination washer-dryer units.
Home refrigeration and room air conditioning equipment: refrigerator-
freezers; upright and chest freezers; room air conditioners; dehumidifiers;
and residential, commercial and component ice makers.
Other home appliances, products and services: dishwashers; free-standing
and set-in ranges; built-in ovens and surface cooking units; microwave
ovens; countertop cooking units; residential trash compactors; food waste
disposers; portable appliances; hot water dispensers; water filtration
products; range hoods; oil radiators; water heaters; component parts,
replacement parts, repair services and warranty contracts; and product
kits.
Financial Services:
WFC provides inventory financing services for dealers and distributors
that market products manufactured by the Company plus other manufacturers
and consumer financing services for retail sales by dealers. WFC also
continues to manage down its commercial lending and aerospace financing and
leasing portfolios.
The Company purchases a portion of its product requirements from other
manufacturers for resale by the Company. The Company purchases all of its
requirements of range hoods, food waste disposers, upright
3
and chest freezers (North America), hand mixers and food processors and certain
other miscellaneous products from other manufacturers for resale by the
Company.
For certain information with respect to each class of similar products which
accounted for 10 percent or more of the Company's consolidated revenue in 1994,
1993 and 1992, see Revenue Information in the Annual Report, which is
incorporated herein by reference.
Major home appliances are marketed and distributed in the United States under
the WHIRLPOOL, KITCHENAID, ROPER, ESTATE and COOLERATOR brand names through
Company-owned sales branches primarily to retail dealers and builders.
WHIRLPOOL and ROPER brand name products were also marketed and distributed
indirectly through independent wholesale distributors in some markets. As of
January 1, 1994, the Company assumed responsibility for direct distribution of
all its major home appliances to dealers in the United States. KITCHENAID
portable appliances are sold to retailers either directly or through an
independent representative organization and, in Canada, through independent
agents. The Company sells product to the builder trade both directly and
through contract distributors. Major home appliances are manufactured and/or
distributed in Canada under the INGLIS, ADMIRAL, SPEED QUEEN, WHIRLPOOL,
ESTATE, ROPER and KITCHENAID brand names. Refrigerator-freezers, laundry
products, room air conditioners, residential trash compactors, residential and
component ice makers, cooking products, dishwashers and other products are sold
in limited quantities by the Company to other manufacturers and retailers for
resale in North America under their respective brand names.
The Company has been the principal supplier of home laundry appliances to
Sears, Roebuck and Co. ("Sears") for over 75 years and of room air conditioning
equipment for over 30 years. The Company is also the principal supplier to
Sears of residential trash compactors and a major supplier to Sears of
dishwashers and home refrigeration equipment. The Company also supplies Sears
with certain other products for which the Company is not a principal or major
supplier. Sales of such other products to Sears are not significant to the
Company's business. The Company supplies products to Sears for sale under
Sears' KENMORE and SEARS brand names and products under the Company's WHIRLPOOL
and KITCHENAID brand names. Sales to Sears are made without underlying
merchandise agreements.
In Europe, Whirlpool Europe markets and distributes its major home appliances
through regional networks under a number of brand names. In 1990, Whirlpool
Europe began an estimated $110 million program to introduce the WHIRLPOOL brand
name to the European marketplace and phase out the PHILIPS brand name. The
Company is continuing to fund this successful marketing campaign to further
develop the WHIRLPOOL brand name in Europe. By the end of 1994 the PHILIPS name
had been removed from the product in almost all countries in Europe, including
Eastern Europe. In France, Italy, Spain and Portugal, the complete phase-in of
the WHIRLPOOL brand and the removal of the PHILIPS name, although started in
1994, will not be completed until 1995 to coincide with new product launches.
Whirlpool Europe also markets products under the BAUKNECHT, IGNIS and LADEN
brand names. In most Eastern European countries, products bearing the
WHIRLPOOL, BAUKNECHT and IGNIS brand names are presently sold through
independent distributors. Whirlpool Europe also has company-owned sales
subsidiaries in Hungary, Poland, the Czech Republic, Slovakia, and Greece.
Pursuant to the Company's joint venture agreement with Philips N.V.
("Philips"), except for certain limited exceptions and subject to certain
phase-out provisions, neither Philips nor any subsidiary of Philips may engage
directly or indirectly in the major domestic appliance business anywhere in the
world until January 2, 1999.
Whirlpool Europe also sells products carrying the WHIRLPOOL, BAUKNECHT,
IGNIS, ALGOR and FIDES brand names to the Company's wholly-owned sales
companies in Asia and/or Latin America (Whirlpool Asia Appliance Group and the
Latin America Appliance Group) and to independent distributors and dealers in
Africa and the Middle East.
4
WHIRLPOOL FINANCIAL CORPORATION
Whirlpool Financial provides diversified financial services to businesses and
consumers throughout the United States and Canada and inventory and display
financing activities in Europe and Argentina. WFC conducts its business through
four divisions: the Inventory Finance Division, which provides floorplan
financing and display programs to dealers; the Consumer Finance Division, which
provides installment financing and, through WFNB, WFC's recently formed credit
card bank, consumer credit card programs; the Specialized Finance Division,
which provides asset based working capital loans to manufacturers, distributors
and dealers; and the International Division, operated through Whirlpool
Financial Corporation International and Whirlpool Financial Corporation
Overseas, wholly owned subsidiaries of WFC, which provide inventory and display
financing for retailers of products of Whirlpool Europe and Whirlpool
Argentina. Inventory financing represents the largest segment of WFC's
business, providing services for manufacturers, distributors and dealers in the
appliance, consumer electronics, outdoor power equipment and residential
heating and cooling equipment industries. As previously mentioned, WFC is
phasing-out its commercial lending and aerospace financing and leasing
portfolios.
COMPETITION
The major home appliance business is a highly competitive industry. The
Company believes that, in terms of units sold annually, it is the largest
United States manufacturer of home laundry appliances and one of the largest
United States manufacturers of home refrigeration and room air conditioning
equipment and dishwashers. The Company estimates that during 1994 there were
approximately five United States manufacturers of home laundry appliances, 15
United States manufacturers of home refrigeration and room air conditioning
equipment, and five United States manufacturers of dishwashers. Competition in
the North American major home appliance business is based on a wide variety of
factors, including principally product features, price, product quality and
performance, service, warranty, advertising and promotion. As a result of the
Company's global expansion, the Company believes it may have a competitive
advantage by reason of its ability to share engineering breakthroughs across
regions, leverage best practices and economically purchase raw materials and
component parts in large volumes.
The Company believes that Whirlpool Europe, in terms of units sold annually,
is one of the three largest consolidated manufacturers and marketers of major
home appliance products in Western Europe. The Company estimates that during
1994 there were approximately 35 Western European manufacturers of major home
appliances, the majority of which manufacture a limited range of products for a
specific geographic region. In recent years, there has been significant merger
and acquisition activity as manufacturers seek to broaden product lines and
expand geographic markets, and the Company believes that this trend will
continue. The Company believes that, with Whirlpool Europe, it is in a
favorable position relative to its competitors because it has an experienced
Western European sales network, balanced sales throughout the Western European
market under well-recognized brand names, manufacturing facilities located in
different countries and the ability to customize its products to meet the
specific needs of diverse consumer groups. With respect to microwave ovens,
Western European manufacturers face competition from manufacturers in Asia,
primarily Japan and South Korea.
In Asia, the major domestic appliance market is characterized by rapid growth
and is dominated primarily by Asian diversified industrial manufacturers whose
significant size and scope of operations enable them to achieve economies of
scale. The Company estimates that during 1994 there were approximately 50 Asian
manufacturers of major home appliances. Competition in the Asian home appliance
business is based on a wide variety of factors, including principally local
production capabilities, product features, price, product quality and
performance.
The Company believes that, together with its Brazilian affiliates, it is
well-positioned in the Latin American appliance market due to its ability to
offer a broad range of products under well-recognized brand names such as
WHIRLPOOL, BRASTEMP, CONSUL and SEMER to meet the specific requirements of
consumers in
5
the region. The Company estimates that during 1994 there were approximately 65
manufacturers of home appliances in the region. Competition in the Latin
American home appliance business is based on a wide variety of factors,
including principally product features, price, product quality and performance,
service, warranty, advertising and promotion. In Latin America there are trends
toward privatization of government-owned businesses and a liberalization of
investment and trade restrictions.
The financial services industry is an intensely competitive business. Factors
affecting competition include new entrants into a market experiencing only
moderate growth and the continuing pressure to improve investment returns in
the financial services industry. With respect to inventory financing, there has
been a trend toward consolidation resulting in five dominant companies in the
United States market. In terms of total assets, WFC is the smallest of these
companies. WFC believes it has a competitive advantage due to its strong
relationship with the Company and other distribution networks. In the inventory
finance business, WFC's strategy is to exploit niches within the consumer
durables retail market. In consumer finance, WFC utilizes the same retailer
relationships to address the needs of their consumers through private label
credit card programs. The consumer finance market is highly fragmented with
numerous competitors, none of which has a dominant market share.
EMPLOYEES
The Company and its consolidated subsidiaries had approximately 39,000
employees as of December 31, 1994.
OTHER INFORMATION
The Company owns minority equity interests in certain Brazilian manufacturers
of major home appliances and components (Multibras and Embraco) and has a
controlling interest in a sales and marketing joint venture with Multibras (the
South American Sales Company). The Company also has a majority interest in
joint venture companies in Argentina and Slovakia. Both companies manufacture
home appliances for sale and distribution in their home and surrounding
countries. In India, the Company has a majority interest in joint venture
companies that produce refrigeration products and washing machines for the
Indian market. The Company also has minority equity interests in a Mexican
manufacturer of home appliances and components and a Taiwan marketer and
distributor of home appliances. For additional information regarding the
Company's affiliated companies, see the discussion contained under Note 5 of
the Notes to Consolidated Financial Statements in the Annual Report which is
incorporated herein by reference. In addition, the Company furnishes
engineering, manufacturing and marketing assistance to certain foreign
manufacturers of home laundry and refrigeration equipment and other major home
appliances for negotiated fees.
The Company's interests outside the United States are subject to risks which
may be greater than or in addition to those risks currently present in the
United States. Such risks may include high inflation, the need for governmental
approval of and restrictions on certain financial and other corporate
transactions and new or continued business operations, government price
controls, restrictions on the remittance of dividends, interest, royalties and
other payments and the convertibility of local currencies, restrictions on
imports and exports, political and economic developments and instability, the
possibility of expropriation, uncertainty as to the enforceability of
commercial rights and trademarks and various types of local participation in
ownership. In Brazil, the Company's minority equity interests earned profits in
1993 and 1994 due to cost control, productivity improvements and an increase in
consumer demand. However, issues such as economic volatility and exchange rate
changes continue to impact consumer purchasing power and the appliance industry
as a whole.
The Company is generally not dependent on any one source for raw materials or
purchased components essential to its business. In those areas where a single
supplier is used, alternative sources are generally available and can be
developed within the normal manufacturing environment. While there are pricing
6
pressures on some materials and significant demand for certain components, it
is believed that such raw materials and components will be available in
adequate quantities to meet anticipated production schedules.
Patents presently owned by the Company are considered, in the aggregate, to
be important to the conduct of the Company's business. The Company is licensed
under a number of patents, none of which individually is considered material to
its business. The Company is the owner of a number of trademarks and the U.S.
and foreign registrations thereof. The most important for its North American
operations are the trademarks WHIRLPOOL, KITCHENAID, ROPER and INGLIS.
Whirlpool Europe, through its subsidiaries, is also the owner of a number of
trademarks and the foreign registrations thereof. The most important trademarks
owned by Whirlpool Europe are BAUKNECHT, IGNIS and LADEN. The most important
trademark licensed to the Company's subsidiaries is the trademark PHILIPS and
the Philips shield emblem, which can be used exclusively on major home
appliances by such subsidiaries until July 31, 1998. In the event of a change
in control of the Company, Philips has the option to terminate the use by the
Company's subsidiaries of the trademark PHILIPS and the Philips shield emblem.
The Company believes that its business, in the aggregate, is not seasonal.
Certain of its products, however, sell more heavily in some seasons than in
others, including room air conditioners, which are generally produced and sold
heavily in the first half of each year. In Europe, clothes dryers are sold more
heavily in the winter.
Backlogs of the Company's products are completed and renewed relatively
frequently in each year and are not significant in relation to the Company's
annual sales.
Expenditures for Company-sponsored research and engineering activities
relating to the development of new products and the improvement of existing
products are included in Note 1 of the Notes to Consolidated Financial
Statements in the Annual Report, which is incorporated herein by reference.
Customer-sponsored research activities relating to the development of new
products, services or techniques or the improvement of existing products,
services or techniques are not material.
The Company's manufacturing facilities are subject to numerous laws and
regulations designed to protect or enhance the environment, many of which
require federal, state or other governmental licenses and permits with regard
to wastewater discharges, air emissions and hazardous waste management. These
laws are continually changing and, as a general matter, are becoming more
restrictive. The Company's policy is to comply with all such laws and
regulations.
The Company believes that it is in compliance in all material respects with
all presently applicable federal, state, local and other provisions relating to
environmental protection in the countries in which it has manufacturing
operations. Capital expenditures and expenses attributable to compliance with
such provisions worldwide amounted to approximately $44 million in 1992, $57
million in 1993, and $78 million in 1994. The Company anticipates that such
capital expenditures and expenses will aggregate approximately $82 million in
1995. Much of the increase in 1993 and 1994 is attributable to taxes on
chloroflourocarbons ("CFCs") (which will be eliminated from the Company's
products in the United States by December 31, 1995) and a decision to broaden
the definition of environmental costs to include investments in product
development to meet or exceed anticipated energy and/or water regulations. Most
of the increase for 1995 relates to capital expenditures associated with plant
modifications necessary to produce a more energy and water efficient horizontal
axis washer in North America. The Company has developed a global environmental
management process designed to achieve its goals of producing environmentally
compatible products, better integrating environmental considerations into the
Company's product design and employee training, improving the Company's ability
to report and monitor its management of environmental, health and safety
affairs and reducing its worldwide emissions of certain chemicals.
The entire United States appliance industry, including the Company, must
contend with adoption of stricter governmental energy and environmental
standards to be phased in over the next several years. These
7
include the general phaseout of CFCs used in refrigeration and energy standards
rulemakings for all major appliances produced by the Company. Compliance with
these various standards as they become effective will require some product
redesign although the standard levels were anticipated in current projects.
In Europe the Company met the December 31, 1994 deadline for the elimination
of CFCs in its products. As in the United States, Whirlpool Europe is also
dealing with anticipated regulations and rules regarding improved efficiency
and energy usage for its products. The Company believes it is well positioned
to field products that comply with these anticipated regulations.
The Company has been notified by state and federal environmental protection
agencies of its possible involvement in a number of so-called "Superfund" sites
in the United States. However, the Company does not presently anticipate any
material adverse effect upon the Company's earnings or financial condition
arising out of the resolution of these matters or the resolution of any other
known governmental proceeding regarding environmental protection matters. The
Company is in the process of performing environmental assessments of its
European facilities acquired as a result of the Company's purchase of the Major
Domestic Appliance division of Philips. Remedial plans are being prepared to
address contamination found during the evaluation. The Company believes it has
a contractual right to reimbursement from Philips for the vast majority of
anticipated remediation costs. The Company does not presently anticipate any
material adverse effect upon the Company's earnings or financial condition
arising out of the resolution of these matters.
The following table sets forth the names of the Company's executive officers
at December 31, 1994, the positions and offices with the Company held by them
at such date, the year they first became officers, and their ages at December
31, 1994:
FIRST BECAME
NAME OFFICE AN OFFICER AGE
---- ------ ------------ ---
David R. Whitwam Director, Chairman of the Board 1983 52
and Chief Executive Officer
William D. Marohn Director, President and Chief 1984 54
Operating Officer
*Harry W. Bowman Executive Vice President 1985 51
Jeff M. Fettig Executive Vice President 1993 37
Robert I. Frey Executive Vice President 1985 51
Ralph F. Hake Executive Vice President 1988 45
Ronald L. Kerber Executive Vice President 1991 51
P. Daniel Miller Executive Vice President 1991 46
James R. Samartini Executive Vice President and Chief 1986 59
Administrative Officer
- --------
* Resigned from the Company effective 2/21/95
Each of the executive officers named above was elected to serve in the office
indicated until the first meeting of the Board of Directors following the
annual meeting of stockholders in 1995 and until his successor is chosen and
qualified or until his earlier resignation or removal.
Each of the executive officers of the Company has held the position set forth
in the table above or has served the Company in various executive or
administrative capacities for at least the past five years, except for:
NAME COMPANY/POSITION PERIOD
---- ---------------- --------------
Ronald L. Kerber McDonnell Douglas Corporation-- 2/88 to 2/91
Corporate Vice President (joined the
Company 2/91)
8
ITEM 2. PROPERTIES.
The principal executive offices of Whirlpool Corporation are located in
Benton Harbor, Michigan. At December 31, 1994, the principal manufacturing and
service operations of the Company were carried on at 26 locations worldwide, 14
of which are located outside the United States in seven countries. The Company
occupied a total of approximately 32 million square feet devoted to
manufacturing, service, administrative offices, warehouse, distribution and
sales space. Over seven (7) million square feet of such space is occupied under
lease. In general, all such facilities are well maintained, suitably equipped
and in good operating condition.
ITEM 3. LEGAL PROCEEDINGS.
As of, and during the quarter ended, December 31, 1994, there were no
material pending legal proceedings to which the Company or any of its
subsidiaries was a party or to which any of their property was subject.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There were no matters submitted to a vote of security holders in the fourth
quarter of 1994.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.
The Company's common stock is traded on the New York Stock Exchange, the
Chicago Stock Exchange and The London Stock Exchange.
At March 3, 1995, the number of holders of record of the Company's common
stock was approximately 11,829.
High and low sales prices (as reported on the New York Stock Exchange
composite tape) and cash dividends declared and paid for the Company's common
stock for each quarter during the years 1993 and 1994 are set forth in Note 16
of the Notes to Consolidated Financial Statements in the Annual Report, which
is herein incorporated by reference.
ITEM 6. SELECTED FINANCIAL DATA.
The selected financial data for the five years ended December 31, 1994 with
respect to the following line items shown under the "Consolidated Statistical
Review" in the Annual Report is incorporated herein by reference and made a
part of this report: Total revenues; earnings from continuing operations before
accounting change; earnings from continuing operations before accounting change
per share of common stock; dividends paid per share of common stock; total
assets; and long-term debt. See the material incorporated herein by reference
in response to Item 7 of this report for a discussion of the effects on such
data of business combinations and other acquisitions, disposition and
consolidation activity, restructuring costs, accounting changes and earnings of
foreign affiliates.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
The Management's Discussion and Analysis of Results of Operations and
Financial Condition in the Annual Report is incorporated herein by reference
and made a part of this report.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The consolidated financial statements of the Company in the Annual Report are
incorporated herein by reference and made a part of this report. Supplementary
financial information regarding quarterly results of
9
operations (unaudited) for the years ended December 31, 1994 and 1993 is set
forth in Note 16 of the Notes to Consolidated Financial Statements. For a list
of financial statements and schedules filed as part of this report, see the
"Index to Financial Statements and Financial Statement Schedules" beginning on
page F-1.
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 with respect to directors of the Company is incorporated herein
by reference to the information under the caption "Directors and Nominees for
Election as Directors" in the Company's proxy statement for the 1995 annual
meeting of stockholders (SEC File No. 1-3932) (the "Proxy Statement").
Information regarding compliance with Section 16(a) of the Securities Exchange
Act of 1934 is incorporated herein by reference to the information under the
caption "Section 16(a) Compliance" in the Proxy Statement. Information with
respect to executive officers of the Company is set forth in Part I of this
report.
ITEM 11. EXECUTIVE COMPENSATION.
Information with respect to compensation of executive officers and directors
of the Company is incorporated herein by reference to the information under the
captions "Executive Compensation" and "Compensation of Directors" in the Proxy
Statement.
ITEM 12. SECURITY OWNERSHIP.
Information with respect to security ownership by the only person known to
the Company to beneficially own more than 5 percent of the Company's stock and
by each director of the Company and all directors and elected officers of the
Company as a group is incorporated herein by reference to the information under
the caption "Security Ownership" in the Proxy Statement.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Inapplicable.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
(a) The following documents are filed as a part of this report:
1. The financial statements listed in the "Index to Financial Statements
and Financial Statement Schedules."
2. The financial statement schedule listed in the "Index to Financial
Statements and Financial Statement Schedules."
3. The exhibits listed in the "Index to Exhibits."
(b) Reports on Form 8-K.
None
(c) Exhibits.
1. The following exhibits are included herein:
(11) Computation of per share earnings.
(12) Computation of the ratios of earnings to fixed charges.
2. The response to this portion of Item 14 is submitted as a separate
section of this report.
(d) Financial Statement Schedules.
The response to this portion of Item 14 is submitted as a separate
section of this report.
10
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF SECTION 13 OF THE SECURITIES EXCHANGE ACT OF
1934, THE REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY
THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED.
Whirlpool Corporation
(Registrant)
/s/ Bradley J. Bell
By:__________________________________
Bradley J. Bell
(Principal Financial Officer)
Vice President and Treasurer
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THIS
REPORT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF OF THE
REGISTRANT AND IN THE CAPACITIES AND ON THE DATE INDICATED.
SIGNATURE TITLE DATE
--------- ----- ----
David R. Whitwam* Director, Chairman of the March 17, 1995
____________________________________ Board and Chief Executive
David R. Whitwam Officer (Principal
Executive Officer)
William D. Marohn* Director, President and March 17, 1995
____________________________________ Chief Operating Officer
William D. Marohn
Bradley J. Bell* Vice President and Treasurer March 17, 1995
____________________________________ (Principal Financial
Bradley J. Bell Officer)
Robert G. Thompson* Vice President and March 17, 1995
____________________________________ Controller (Principal
Robert G. Thompson Accounting Officer)
Victor A. Bonomo* Director March 17, 1995
____________________________________
Victor A. Bonomo
Robert A. Burnett* Director March 17, 1995
____________________________________
Robert A. Burnett
Herman Cain* Director March 17, 1995
____________________________________
Herman Cain
Allan D. Gilmour* Director March 17, 1995
____________________________________
Allan D. Gilmour
Kathleen J. Hempel* Director March 17, 1995
____________________________________
Kathleen J. Hempel
Arnold G. Langbo* Director March 17, 1995
____________________________________
Arnold G. Langbo
Miles L. Marsh* Director March 17, 1995
____________________________________
Miles L. Marsh
11
SIGNATURE TITLE DATE
--------- ----- ----
Philip L. Smith* Director March 17, 1995
____________________________________
Philip L. Smith
Paul G. Stern* Director March 17, 1995
____________________________________
Paul G. Stern
Janice D. Stoney* Director March 17, 1995
____________________________________
Janice D. Stoney
/s/ Daniel F. Hopp
*By:___________________________
Attorney-in-Fact March 17, 1995
Daniel F. Hopp
12
ANNUAL REPORT ON FORM 10-K
ITEMS 14(A)(1) AND (2) AND 14(D)
INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES
YEAR ENDED DECEMBER 31, 1994
WHIRLPOOL CORPORATION AND CONSOLIDATED SUBSIDIARIES
The following consolidated financial statements of the registrant and its
consolidated subsidiaries, set forth in the Annual Report, are incorporated
herein by reference in Item 8:
Consolidated balance sheets--December 31, 1994 and 1993
Consolidated statements of earnings--Three years ended December 31,
1994
Consolidated statements of cash flows--Three years ended December 31,
1994
Notes to consolidated financial statements
The following reports of independent auditors and consolidated financial
statement schedules of the registrant and its consolidated subsidiaries are
submitted herewith in response to Items 14(a)(2) and 14(d):
PAGE
----
Report of Ernst & Young, Independent Auditors......................... F-2
Reports of Price Waterhouse, Independent Auditors..................... F-3
Schedule II--Valuation and qualifying account......................... F-9
The following exhibits are included herein:
Exhibit 11--Statement Re: Computation of Earnings Per Share........... F-13
Exhibit 12--Ratio of Earnings to Fixed Charge......................... F-14
Individual financial statements of the registrant's affiliated foreign
companies, accounted for by the equity method, have been omitted since no such
company individually constitutes a significant subsidiary. Summarized financial
information relating to the affiliated companies is set forth in Note 5 of the
Notes to Consolidated Financial Statements incorporated by reference herein.
Certain schedules for which provisions are 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.
F-1
[ERNST & YOUNG LLP LETTERHEAD]
REPORT OF INDEPENDENT AUDITORS
The Stockholders and Board of Directors
Whirlpool Corporation
Benton Harbor, Michigan
We have audited the consolidated financial statements of Whirlpool Corporation
and subsidiaries listed in the Index at Item 14(a)(1) of the annual report on
Form 10-K of Whirlpool Corporation for the year ended December 31, 1994. Our
audits also included the financial statement schedule listed in the Index at
Item 14(a)(2). These financial statements and schedule are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statements and schedule based on our audits. We did not audit
the financial statements of the Brazilian affiliates used as the basis for
recording the Company's equity in their net earnings (losses), as presented in
Note 5 to the consolidated financial statements. The financial statements of
those affiliates were audited by other auditors whose reports have been
furnished to us, and our opinion, insofar as it relates to the amounts included
for the Brazilian affiliates, is based solely on the reports of the other
auditors.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits and the reports of the other auditors provide a
reasonable basis for our opinion.
In our opinion, based on our audits and the reports of the other auditors, the
financial statements referred to above present fairly, in all material respects,
the consolidated financial position of Whirlpool Corporation and subsidiaries at
December 31, 1994 and 1993, and the consolidated results of their operations and
their cash flows for each of the three years in the period ended December 31,
1994, in conformity with generally accepted accounting principles. Also, in our
opinion, the related financial statement schedule, when considered in relation
to the basic financial statements taken as a whole, presents fairly in all
material respects the information set forth therein.
As discussed in the notes to the consolidated financial statements, in 1993 the
Company changed its method of accounting for postretirement benefits other than
pensions, postemployment benefits and income taxes.
/s/ Ernst & Young LLP
Chicago, Illinois
January 26, 1995
[LETTERHEAD OF PRICE WATERHOUSE]
[LOGO OF PRICE WATERHOUSE]
Price Waterhouse
Report of Independent Accountants
January 23, 1995
To the Board of Directors and Stockholders
Brasmotor S.A.
1 We have audited the consolidated balance sheets of Brasmotor S.A. and its
subsidiaries as of December 31, 1994 and 1993 and the related consolidated
statements of income, of movement in stockholders' equity and of cash flows
for the years then ended, expressed in U.S. dollars (not presented herein).
Such audits were made in conjunction with our audits of the financial
statements expressed in local currency on which we issued an unqualified
opinion dated January 23, 1995. These financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits. We did not
audit the financial statements of Whirlpool Argentina S.A. used as the basis
for recording the Company's equity in its net earnings, as presented in Note
4 to the consolidated financial statements. The financial statements of that
affiliate were audited by other auditors whose reports have been furnished to
us, and our opinion, insofar as it relates to the amounts included for
Whirlpool Argentina S.A., is based solely on the reports of the other
auditors.
2 We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
F-3
January 23, 1995
Brasmotor S.A. [LOGO OF PRICE WATERHOUSE]
Page 2
3 As stated in Note 1, Whirlpool Corporation has prescribed that accounting
principles generally accepted in the United States of America be applied in
the preparation of the consolidated financial statements of Brasmotor S.A.
and its subsidiaries to be included in Whirlpool's consolidated financial
statements. Brazil has a highly inflationary economy. Accounting principles
generally accepted in the United States of America require that financial
statements of a company denominated in the currency of a country with a
highly inflationary economy be remeasured into a more stable currency unit
for purposes of consolidation. Accordingly, the accounts of Brasmotor S.A.
and its Brazilian subsidiaries, which are maintained in reais, were
remeasured and adjusted into U.S. dollars for the financial statements
prepared in accordance with accounting principles generally accepted in the
United States of America on the bases stated in Note 1.
4 In our opinion, based on our audits and the report of the other auditors, the
consolidated financial statements expressed in U.S. dollars audited by us are
presented fairly, in all material respects, on the bases stated in Note 1 and
discussed in the preceding paragraph.
[SIGNATURE OF PRICE WATERHOUSE]
F-4
[LETTERHEAD OF PRICE WATERHOUSE]
[LOGO OF PRICE WATERHOUSE]
Price Waterhouse
Report of Independent Accountants
January 23, 1995
To the Board of Directors and Stockholders
Empresa Brasileira de Compressores S.A. - EMBRACO
1 We have audited the consolidated balance sheets of Empresa Brasileira de
Compressores S.A. -EMBRACO and its subsidiaries as of December 31, 1994 and
1993 and the related consolidated statements of income, of movement in
stockholders' equity and of cash flows for the years then ended, expressed in
U.S. dollars (not presented herein). Such audits were made in conjunction
with our audits of the financial statements expressed in local currency on
which we issued an unqualified opinion dated January 23, 1995. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based
on our audits.
2 We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
3 As stated in Note 1, Whirlpool Corporation has prescribed that accounting
principles generally accepted in the United States of America be applied in
the preparation of the consolidated financial statements of Empresa
Brasileira de Compressores S.A. - EMBRACO and its subsidiaries to be included
in Whirlpool's consolidated financial statements. Brazil has a highly
inflationary economy. Accounting principles generally accepted in the United
States of America require that financial statements of a company denominated
in the currency of a country with a highly inflationary economy be remeasured
into a more stable currency unit for purposes of consolidation. Accordingly,
the accounts of Empresa Brasileira de Compressores S.A. -EMBRACO and its
Brazilian subsidiaries, which are maintained in reais, were remeasured and
adjusted into U.S. dollars for the financial statements prepared in
accordance with accounting principles generally accepted in the United States
of America on the bases stated in Note 1.
F-5
January 23, 1995 [LOGO OF PRICE WATERHOUSE]
Empresa Brasileira de Compressores S.A.-EMBRACO
Page 2
4 In our opinion, the consolidated financial statements expressed in U.S.
dollars audited by us are presented fairly, in all material respects, on the
bases stated in Note 1 and discussed in the preceding paragraph.
[SIGNATURE OF PRICE WATERHOUSE]
F-6
[LETTERHEAD OF PRICE WATERHOUSE]
[LOGO OF PRICE WATERHOUSE]
Price Waterhouse
Report of Independent Accountants
January 23, 1995
To the Board of Directors and Stockholders
Multibras S.A. Eletrodomesticos
1 We have audited the consolidated balance sheets of Multibras S.A.
Eletrodomesticos and its subsidiaries as of December 31, 1994 and 1993 and
the related consolidated statements of income, of movement in stockholders'
equity and of cash flows for the years then ended, expressed in U.S. dollars
(not presented herein). Such audits were made in conjunction with our audits
of the financial statements expressed in local currency on which we issued an
unqualified opinion dated January 23, 1995. These financial statements are
the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
2 We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
3 As stated in Note 1, Whirlpool Corporation has prescribed that accounting
principles generally accepted in the United States of America be applied in
the preparation of the consolidated financial statements of Multibras S.A.
Eletrodomesticos and its subsidiaries to be included in Whirlpool's
consolidated financial statements. Brazil has a highly inflationary economy.
Accounting principles generally accepted in the United States of America
require that financial statements of a company denominated in the currency of
a country with a highly inflationary economy be remeasured into a more stable
currency unit for purposes of consolidation. Accordingly, the accounts of
Multibras S.A. Eletrodomesticos and its Brazilian subsidiaries, which are
maintained in reais, were remeasured and adjusted into U.S. dollars for the
financial statements prepared in accordance with accounting principles
generally accepted in the United States of America on the bases stated in
Note 1.
F-7
January 23, 1995
Multibras S.A. Electrodomesticos [LOGO OF PRICE WATERHOUSE]
Page 2
4 In our opinion, the consolidated financial statements expressed in U.S.
dollars audited by us are presented fairly, in all material respects, on the
bases stated in Note 1 and discussed in the preceding paragraph.
[SIGNATURE OF PRICE WATERHOUSE]
F-8
WHIRLPOOL CORPORATION AND SUBSIDIARIES
SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS
YEARS ENDED DECEMBER 31, 1994, 1993, AND 1992
(MILLIONS OF DOLLARS)
COL. A COL. B COL. C COL. D COL. E
------ ---------- ----------------------- ------------ ----------
ADDITIONS
-----------------------
(2)
(1) CHARGED TO
BALANCE AT CHARGED TO OTHER BALANCE AT
BEGINNING COSTS ACCOUNTS-- DEDUCTIONS-- END
DESCRIPTION OF PERIOD AND EXPENSES DESCRIBE DESCRIBE OF PERIOD
----------- ---------- ------------ ---------- ------------ ----------
Year Ended December 31,
1994:
Current assets:
Allowance for
doubtful accounts-- $ 11--
trade receivables.. $ 36 $ 13 A $ 38
==== ==== === ==== ====
Allowance for
doubtful accounts--
financing
receivables and $ 12--
leases............. $ 14 $ 13 B $ 15
==== ==== === ==== ====
Long-term receivables:
Allowance for
doubtful accounts--
financing
receivables and $ 13--
leases............. $ 35 $ 9 C $ 31
==== ==== === ==== ====
Accrued expenses:
Restructuring $108--
reserves........... $ 33 $250 D $175
==== ==== === ==== ====
Year Ended December 31,
1993:
Current assets:
Allowance for
doubtful accounts-- $ 8--
trade receivables.. $ 35 $ 9 A $ 36
==== ==== === ==== ====
Allowance for
doubtful accounts--
financing
receivables and $ 26--
leases............. $ 22 $ 18 B $ 14
==== ==== === ==== ====
Long-term receivables:
Allowance for
doubtful accounts--
financing
receivables and $ 29--
leases............. $ 15 $ 49 C $ 35
==== ==== === ==== ====
Accrued expenses:
Restructuring $ 20--
reserves........... $ 22 $ 31 D 33
==== ==== === ==== ====
Year Ended December 31,
1992:
Current assets:
Allowance for
doubtful accounts-- $ 24--
trade receivables.. $ 47 $ 12 A $ 35
==== ==== === ==== ====
Allowance for
doubtful accounts--
financing
receivables and $ 19--
leases............. $ 14 $ 27 B $ 22
==== ==== === ==== ====
Long-term receivables:
Allowance for
doubtful accounts--
financing
receivables and $ 14--
leases............. $ 16 $ 13 C $ 15
==== ==== === ==== ====
Accrued expenses:
Restructuring $ 90--
reserves........... $102 $ 10 D $ 22
==== ==== === ==== ====
F-9
- --------
Note A--The amounts represent accounts charged off, less recoveries of $1 in
1994, $6 in 1993, and $3 in 1992.
Note B--The amounts represent accounts charged off, less recoveries of $1 in
1994 and 1993 and $2 in 1992.
Note C--The amounts represent accounts charged off, less recoveries of $1 in
1994, 1993, and 1992.
Note D--Charges include employee related severance and relocation, disposal of
fixed assets and translation adjustments.
F-10
EXHIBIT 11--STATEMENT RE: COMPUTATION OF EARNINGS PER SHARE
WHIRLPOOL CORPORATION AND SUBSIDIARIES
(MILLIONS OF DOLLARS EXCEPT EARNINGS PER SHARE)
1994 1993 1992
------ ------ ------
Primary
Average Shares Outstanding............................ 74.2 71.1 69.8
Treasury Method (Average Market Price)
Stock Options....................................... 1.0 1.2 0.7
Restricted Stock (RSVP)............................. 0.3 -- --
------ ------ ------
Primary Average Shares Outstanding.................... 75.5 72.3 70.5
====== ====== ======
Net Earnings Before Cumulative Effect of Accounting
Change............................................... $158.3 $230.7 $204.7
RSVP Amortization, net of tax......................... -- -- --
------ ------ ------
Primary Net Earnings Before Cumulative Effect of
Accounting Change.................................... $158.3 $230.7 $204.7
====== ====== ======
Earnings Per Share Before Cumulative Effect of
Accounting Change.................................... $ 2.10 $ 3.19 $ 2.90
====== ====== ======
Less Cumulative Effect of Accounting Change........... $ -- $(2.52) $ --
====== ====== ======
Earnings Per Share.................................... $ 2.10 $ 0.67 $ 2.90
====== ====== ======
Fully Diluted
Average Shares Outstanding............................ 74.2 71.1 69.8
Treasury Method (Average Market Price or End of
Period, whichever is greater):
Stock Options....................................... 1.2 2.0 1.3
Restricted Stock.................................... 0.3 -- --
Assumed Conversion of Debt (4,885 shares issued May
1991).................................................. 2.2 3.3 4.9
------ ------ ------
Fully Diluted Average Shares Outstanding.............. 77.9 76.4 76.0
====== ====== ======
Net Earnings Before Cumulative Effect of Accounting
Change............................................... $158.3 $230.7 $204.7
Interest Expense, net of tax.......................... 4.3 7.3 7.6
RSVP Amortization, net of tax......................... -- -- --
------ ------ ------
Fully Diluted Net Earnings Before Cumulative Effect of
Accounting Change.................................... $162.6 $238.0 $212.3
====== ====== ======
Earnings Per Share Before Cumulative Effect of
Accounting Change.................................... $ 2.09 $ 3.11 $ 2.79
====== ====== ======
Net Earnings.......................................... $158.3 $ 50.7 $204.7
Interest Expense, net of tax.......................... 4.3 7.3 7.6
RSVP Amortization, net of tax......................... -- -- --
------ ------ ------
Fully Diluted Net Earnings............................ $162.6 $ 58.0 $212.3
====== ====== ======
Earnings Per Share.................................... $ 2.09 $ 0.67* $ 2.79
====== ====== ======
- --------
*Since the fully diluted net earnings per share is anti-dilutive, the primary
net earnings per share is presented.
F-13
EXHIBIT 12--STATEMENT RE: COMPUTATION OF THE
RATIOS OF EARNINGS TO FIXED CHARGES
WHIRLPOOL CORPORATION AND SUBSIDIARIES
YEAR ENDED DECEMBER 31, 1994
-------------------------------
APPLIANCE FINANCIAL WHIRLPOOL
BUSINESS SERVICES CORPORATION
--------- --------- -----------
(MILLIONS OF DOLLARS)
Pretax earnings................................ $268.9 $23.4 $292.3
Portion of rents representative of the interest
factor........................................ 19.6 0.8 20.4
Interest on indebtedness....................... 102.4 61.0 163.4
Amortization of debt expense and premium....... 1.9 0.1 2.0
WFC preferred stock dividend................... -- 4.5 4.5
------ ----- ------
Adjusted income.............................. $392.8 $89.8 $482.6
====== ===== ======
FIXED CHARGES
- -------------
Portion of rents representative of the interest
factor........................................ $ 19.6 $ 0.8 $ 20.4
Interest on indebtedness....................... 102.4 61.0 163.4
Amortization of debt expense and premium....... 1.9 0.1 2.0
WFC preferred stock dividend................... -- 4.5 4.5
------ ----- ------
$123.9 $66.4 $190.3
====== ===== ======
Ratio of earnings to fixed charges............. 3.17 1.35 2.54
====== ===== ======
F-14
EXHIBIT 12--STATEMENT RE: COMPUTATION OF THE
RATIOS OF EARNINGS TO FIXED CHARGES
WHIRLPOOL CORPORATION AND SUBSIDIARIES
YEAR ENDED DECEMBER 31, 1993
-------------------------------
APPLIANCE FINANCIAL WHIRLPOOL
BUSINESS SERVICES CORPORATION
--------- --------- -----------
(MILLIONS OF DOLLARS)
Pretax earnings................................ $417.5 $(43.0) $374.5
Portion of rents representative of the interest
factor........................................ 16.3 1.1 17.4
Interest on indebtedness....................... 102.8 67.2 170.0
Amortization of debt expense and premium....... 2.0 0.4 2.4
WFC preferred stock dividend................... -- 1.5 1.5
------ ------ ------
Adjusted income.............................. $538.6 $ 27.2 $565.8
====== ====== ======
FIXED CHARGES
- -------------
Portion of rents representative of the interest
factor........................................ $ 16.3 $ 1.1 $ 17.4
Interest on indebtedness....................... 102.8 67.2 170.0
Amortization of debt expense and premium....... 2.0 0.4 2.4
WFC preferred stock dividend................... -- 1.5 1.5
------ ------ ------
$121.1 $ 70.2 $191.3
====== ====== ======
Ratio of earnings to fixed charges............. 4.45 0.39 2.96
====== ====== ======
F-15
ANNUAL REPORT ON FORM 10-K
ITEMS 14(A)(3) AND 14(C)
INDEX TO EXHIBITS
YEAR ENDED DECEMBER 31, 1994
The following exhibits are submitted herewith or incorporated herein by
reference in response to Items 14(a)(3) and 14(c):
NUMBER AND SEQUENTIAL
DESCRIPTION PAGE
OF EXHIBIT NUMBERS*
----------- ----------
3(i) Restated Certificate of Incorporation of the
Company [Incorporated by reference from Exhibit
3(i) to the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 1993]
3(ii) Amended and Restated By-laws of the Company (as
amended January 23, 1995).
4 The registrant hereby agrees to furnish to the
Securities and Exchange Commission, upon request,
the instruments defining the rights of holders of
each issue of long-term debt of the registrant
and its subsidiaries.
10(iii) (a) Whirlpool Retirement Benefits Restoration Plan
(as amended January 1, 1992) [Incorporated by
reference from Exhibit 10(iii)(a) to the
Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1993]
10(iii) (b) 1979 Stock Option Plan (as amended April 28,
1987) [Incorporated by reference from Exhibit
10(iii)(b) to the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1993]
10(iii) (c) Whirlpool Supplemental Executive Retirement Plan
(as amended and restated effective December 31,
1993) [Incorporated by reference from Exhibit
10(iii)(c) to the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1993]
10(iii) (d) Resolution adopted on December 12, 1989 by the
Board of Directors of the Company adopting a
compensation schedule, life insurance program and
retirement benefit program for eligible
Directors. [Incorporated by reference from
Exhibit 10(iii)(d) to the Company's Annual Report
on Form 10-K for the fiscal year ended December
31, 1993]
10(iii) (e) Resolution adopted on December 8, 1992 by the
Board of Directors of the Company adopting a
Flexible Compensation Program for the
Corporation's nonemployee directors.
[Incorporated by reference from Exhibit
10(iii)(e) to the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1993]
10(iii) (f) Whirlpool Corporation Deferred Compensation Plan
for Directors (as amended effective January 1,
1992 and April 20, 1993) [Incorporated by
reference from Exhibit 10(iii)(f) to the
Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1993]
10(iii) (g) Form of Agreement providing for severance
benefits for certain executive officers
[Incorporated by reference from Exhibit
10(iii)(g) to the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1993]
E-1
NUMBER AND SEQUENTIAL
DESCRIPTION PAGE
OF EXHIBIT NUMBERS*
----------- ----------
10(iii) (h) Whirlpool Corporation 1989 Omnibus Stock and
Incentive Plan (as amended July 1, 1991)
[Incorporated by reference from Exhibit
10(iii)(h) to the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1993]
10(iii) (i) Whirlpool Corporation Restricted Stock Value
Program (Pursuant to the 1989 Whirlpool
Corporation Omnibus Stock and Incentive Plan)
[Incorporated by reference from Exhibit
10(iii)(i) to the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1993]
10(iii) (j) Whirlpool Executive Stock Appreciation and
Performance Program (Pursuant to the 1989
Whirlpool Corporation Omnibus Stock and Incentive
Plan) [Incorporated by reference from Exhibit
10(iii)(j) to the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1993]
10(iii) (k) Whirlpool Corporation Nonemployee Director Stock
Ownership Plan (as amended April 20, 1993)
[Incorporated by reference from Exhibit
10(iii)(k) to the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1993]
10(iii) (l) Whirlpool 401(k) Plan (as amended and restated
April 1, 1993) [Incorporated by reference to
Exhibit 10(iii)(l) from the Company's Annual
Report on Form 10-K for the fiscal year ended
December 31, 1993]
10(iii) (m) Whirlpool Performance Excellence Plan (as amended
January 1, 1992 and February 15, 1994)
[Incorporated by reference from Exhibit
10(iii)(m) to the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1993]
10(iii) (n) Whirlpool Corporation Executive Deferred Savings
Plan (as amended effective January 1, 1992)
[Incorporated by reference from Exhibit
10(iii)(n) to the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1993]
10(iii) (o) Whirlpool Corporation Executive Officer Bonus
Plan (Effective as of January 1, 1994)
10(iii) (p) Whirlpool Corporation Charitable Award
Contribution and Additional Life Insurance Plan
for Directors (Effective April 20, 1993)
11 Statement Re: Computation of Earnings per share.
12 Statement Re: Computation of the Ratios of
Earnings to Fixed Charges
13 Management's Discussion and Analysis and
Consolidated Financial Statements contained in
Annual Report to Stockholders for the year ended
December 31, 1994
21 List of Subsidiaries
23(ii) (a) Consent of Ernst & Young
23(ii) (b) Consent of Price Waterhouse
24 Powers of Attorney
27 Financial Data Schedule
- --------
*This information appears only in the manually signed originals of the Form 10-
K and conformed copies with exhibits.
E-2