-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LpyYD6oi0TNPtt+xVcbPIX5EohRWH+MYFGx9JsZf/xh22EHOC9/AY4faFInoI7cw kuO8S0pVKrWK+3U2b7f+Hw== 0000950131-96-001100.txt : 19960318 0000950131-96-001100.hdr.sgml : 19960318 ACCESSION NUMBER: 0000950131-96-001100 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 11 CONFORMED PERIOD OF REPORT: 19951231 FILED AS OF DATE: 19960315 SROS: CSX SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: WHIRLPOOL CORP /DE/ CENTRAL INDEX KEY: 0000106640 STANDARD INDUSTRIAL CLASSIFICATION: HOUSEHOLD APPLIANCES [3630] IRS NUMBER: 381490038 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-03932 FILM NUMBER: 96535262 BUSINESS ADDRESS: STREET 1: WHIRLPOOL CNTR 2000 M 63 STREET 2: C/O CORPORATE SECRETARY CITY: BENTON HARBOR STATE: MI ZIP: 49022 BUSINESS PHONE: 6169235000 MAIL ADDRESS: STREET 1: WHIRLPOOL CTR 2000 M 63 STREET 2: C/O CORPORATE SECRETARY CITY: CENTON HARBOR STATE: MI ZIP: 49022 FORMER COMPANY: FORMER CONFORMED NAME: WHIRLPOOL SEEGER CORP DATE OF NAME CHANGE: 19710824 10-K 1 FORM 10-K - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- 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, 1995 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 X . 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 4, 1996, was $4,013,290,893. On March 4, 1996, the registrant had 74,569,477 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, 1995 Parts I, II and IV The Company's proxy statement for the 1996 annual meeting of stockholders (SEC File No. 1-3932) Part III
EXHIBIT INDEX ON PAGE: ** TOTAL NUMBER OF PAGES: *** - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- 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 In 1995 the Company began executing the restructuring announced in November 1994. In Europe, the shift from a country focused sales, marketing, and support functions to a pan-European and trade channel focused organization is proceeding as planned. In the United States, the streamlining of the manufacturing and technology organization is also on schedule. It is anticipated that the restructuring will result in annual cost savings of approximately $150 million by 1997. In October, the Company's Asian operation received Chinese government approval of a joint venture agreement to manufacture and market window and split air conditioners with Shenzhen Petrochemical Holdings Co. Ltd. The joint venture fulfills a key element of Whirlpool's strategy in China of focusing on the top four major domestic-appliance categories in that market: refrigerators, washing machines, microwave ovens, and air conditioners. During 1995 the Company's North American operations completed construction of a new facility for the production of gas and electric cooking ranges in Tulsa, Oklahoma, and a small appliance manufacturing facility in Greenville, Ohio. These facilities will begin production in 1996. 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 1995, 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 Notes 1 and 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. 1 Home refrigeration and room air conditioning equipment: refrigerator- freezers; upright and chest freezers; room air conditioners; dehumidifiers; and residential, commercial, and component ice makers. Home cooking appliances: free-standing and set-in ranges; built-in ovens and surface cooking units; microwave ovens; countertop cooking units; and range hoods. Other home appliances, products, and services: dishwashers; residential trash compactors; food waste disposers; portable appliances; hot water dispensers; water filtration products; oil radiators; water heaters; component parts, replacement parts, repair services and warranty contracts; and product kits. Financial Services: Whirlpool Financial Corporation ("WFC") provides inventory financing and factoring services, including stocking and display programs for retailers and distributors that market products manufactured by the Company plus other manufacturers. It also provides consumer financing services for retail sales, principally through Whirlpool Financial National Bank ("WFNB"), which offers consumer credit card programs. WFC also continues to manage down its 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 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 1995, 1994, and 1993, 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, CHAMBERS, and COOLERATOR brand names through Company-owned sales branches primarily to retailers and builders. KITCHENAID portable appliances are sold to retailers either directly or through an independent representative organization. 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 almost 80 years. The Company is also the principal supplier to Sears of residential trash compactors and dehumidifiers and a major supplier to Sears of dishwashers, room air conditioners, and home refrigeration equipment. The Company also supplies Sears with certain other products for which the Company is not currently a 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. Sears has also been a major outlet for the Company's WHIRLPOOL and KITCHENAID brand names since 1989. 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. Whirlpool Europe also markets products under the BAUKNECHT, IGNIS, and LADEN brand names. In certain Eastern European countries, products bearing the WHIRLPOOL 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 and a representative office in Russia. 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 2 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 retailers in Africa and the Middle East. In Asia, the Company markets and distributes its major home appliances through 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 Delhi, which includes India, Pakistan, and other surrounding markets; the North Asia region, which includes Japan, Korea, the Philippines, and Taiwan; and the Southeast Asia--Australia region, which includes Southeast Asia, Australia, and New Zealand. The North Asia and Southeast Asia--Australia regions are based in Singapore. The Company markets and sells its products in Asia under the WHIRLPOOL, KITCHENAID, ROPER, IGNIS, BAUKNECHT, SMC, NARCISSUS, SNOWFLAKE, RAYBO, TVS, and KELVINATOR brand names. WHIRLPOOL FINANCIAL CORPORATION Whirlpool Financial provides diversified financial services to businesses and consumers throughout the United States and Canada and factoring, inventory, and display financing activities in Europe, Mexico, and Argentina. WFC conducts its business through three divisions: the Inventory Finance Division, which provides floorplan financing and display programs to retailers; the Consumer Finance Division, which provides installment financing and, through WFNB, WFC's credit card bank, consumer credit card programs; and the International Division, operated through Whirlpool Financial Corporation International, Whirlpool Financial Latin America Inc., and Whirlpool Financial Corporation Overseas, wholly owned subsidiaries of WFC, which provide factoring, inventory, and display financing for retailers of products of Whirlpool Europe, Whirlpool Argentina, and Vitromatic, Whirlpool's joint venture company in Mexico. Inventory financing represents the largest segment of WFC's business, providing services for manufacturers, distributors, and retailers in the appliance, consumer electronics, outdoor power equipment, residential heating and cooling equipment, and music industries. As previously mentioned, WFC is phasing-out its 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 1995 there were approximately five United States manufacturers of home laundry appliances, 15 United States manufacturers of home refrigeration and room air conditioning equipment, and four 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. The Company believes that Whirlpool Europe, in terms of units sold annually, is one of the three largest manufacturers and marketers of major home appliance products in Europe. The Company estimates that during 1995 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 3 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. Competition in the European 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. 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 1995 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 the region. The Company estimates that during 1995 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. As a result of its global expansion, the Company believes it may have a competitive advantage by reason of its ability to share engineering breakthroughs across regions, transfer best practices, and economically purchase raw materials and component parts in large volumes. 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 45,435 employees as of December 31, 1995. 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 (the South American Sales Company) with Multibras. 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 markets. In China, the Company has majority interests in joint venture companies that manufacture microwave ovens, refrigeration products, air conditioners, and automatic washing machines. 4 The companies manufacture appliances for sale and distribution in their home countries and for export. In India, the Company has majority interests in 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 in 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 and Western Europe are subject to risks which may be greater than or in addition to those risks currently present in the United States and Western Europe. 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, duties, 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 1994 and 1995 due to cost control, productivity improvements, and an increase in consumer demand. However, issues such as economic volatility and exchange rate changes continue to affect 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 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 for the Company's European, Asian, and Latin American operations is WHIRLPOOL. 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. In the United States, room air conditioners and dehumidifiers are generally produced and sold heavily in the first half of each year. Portable appliances and microwave ovens tend to sell more heavily in the second half of each year. In Europe, clothes dryers are sold more heavily in the winter. In Asia, refrigerators tend to sell more heavily in summer, while demand for washers is greater in winter. In South America, refrigerators and room air conditioners sell more heavily in the second half of the year. Backlogs of the Company's products are filled 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 5 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 $57 million in 1993, $78 million in 1994, and $58 million in 1995. The Company anticipates that such capital expenditures and expenses will aggregate approximately $47 million in 1996. Much of the increase in 1994 and 1995 is attributable to taxes on chloroflourocarbons ("CFCs") (which were eliminated from the Company's products in the United States prior to 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. The Company is using a global environmental management process 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 include the general phaseout of CFCs used in refrigeration and energy standards rulemakings for all major appliances produced by the Company. Enactment of Federal energy standards is uncertain at this time due to funding and rulemaking restrictions being considered for the Department of Energy by the U.S. Congress. 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. In most Asian countries, the Company has until 2010 to eliminate CFCs from its products. Whirlpool's Asian operations are also well positioned to meet anticipated efficiency and energy usage 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 majority of anticipated remediation costs are covered by an indemnity agreement with Philips and 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 Company is also in the process of evaluating several recently acquired facilities in India and China. The Company does not presently anticipate any material adverse effect upon the Company's earnings or financial condition from the environmental condition of these facilities. 6 The following table sets forth the names of the Company's executive officers at December 31, 1995, 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, 1995:
FIRST BECAME NAME OFFICE AN OFFICER AGE ---- ------ ------------ --- David R. Whitwam Director, Chairman of the Board 1983 53 and Chief Executive Officer William D. Marohn Director, President and Chief 1984 55 Operating Officer John P. Cunningham Executive Vice President and 1995 58 Chief Financial Officer Jeff M. Fettig Executive Vice President 1993 38 Robert I. Frey Executive Vice President 1985 52 Ralph F. Hake Executive Vice President 1988 46 Ronald L. Kerber Executive Vice President 1991 52 P. Daniel Miller Executive Vice President 1991 47
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 1996 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 ---- ---------------- ------ John P. Cunningham Maytag Corporation 1/94 through 12/95 Chief Financial Officer IBM 12/66 through 12/93 Vice President and Assistant General Manager-- Main Frame Division (last title held)
ITEM 2. PROPERTIES. The principal executive offices of Whirlpool Corporation are located in Benton Harbor, Michigan. At December 31, 1995, the principal manufacturing and service operations of the Company were carried on at 34 locations worldwide, 20 of which are located in 10 countries outside the United States. The Company occupied a total of approximately 35 million square feet devoted to manufacturing, service, administrative offices, warehouse, distribution, and sales space. Over 10 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. In 1995, construction of new manufacturing plants in Tulsa, Oklahoma, and Greenville, Ohio, were completed, with full operations scheduled to begin in 1996. ITEM 3. LEGAL PROCEEDINGS. As of, and during the quarter ended, December 31, 1995, 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 1995. 7 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 4, 1996, the number of holders of record of the Company's common stock was approximately 11,579. 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 1994 and 1995 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, 1995 with respect to the following line items shown under the "Eleven Year 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 restructuring 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 operations (unaudited) for the years ended December 31, 1995 and 1994 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 Schedule(s)" 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 1996 annual meeting of stockholders (SEC File No. 1-3932) (the "Proxy Statement"). Information with respect to executive officers of the Company is set forth in Part I of this report. 8 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(s) 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. None. PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULE(S), 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 Schedule(s)." 2. The financial statement schedule listed in the "Index to Financial Statements and Financial Statement Schedule(s)." 3. The exhibits listed in the "Index to Exhibits." (b) Reports on Form 8-K filed during the fourth quarter of 1995. 1. A Current Report on Form 8-K for December 13, 1995 pursuant to Item 5--"Other Events" announced the election of John P. Cunningham as Executive Vice President and Chief Financial Officer for the company. (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 Schedule(s). The response to this portion of Item 14 is submitted as a separate section of this report. 9 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/ John P. Cunningham By:__________________________________ John P. Cunningham (Principal Financial Officer) Executive Vice President and Chief Financial Officer 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 ____________________________________ Board and Chief Executive David R. Whitwam Officer (Principal Executive Officer) William D. Marohn* Director, President and ____________________________________ Chief Operating Officer William D. Marohn John P. Cunningham* Executive Vice President and ____________________________________ Chief Financial Officer John P. Cunningham (Principal Financial Officer) Robert G. Thompson* Vice President and ____________________________________ Controller (Principal Robert G. Thompson Accounting Officer) Victor A. Bonomo* Director ____________________________________ Victor A. Bonomo Robert A. Burnett* Director ____________________________________ Robert A. Burnett Herman Cain* Director March 15, 1996 ____________________________________ Herman Cain Allan D. Gilmour* Director ____________________________________ Allan D. Gilmour Kathleen J. Hempel* Director ____________________________________ Kathleen J. Hempel Arnold G. Langbo* Director ____________________________________ Arnold G. Langbo
10
SIGNATURE TITLE DATE --------- ----- ---- Miles L. Marsh* Director ____________________________________ Miles L. Marsh Philip L. Smith* Director ____________________________________ Philip L. Smith Paul G. Stern* Director ____________________________________ Paul G. Stern Janice D. Stoney* Director ____________________________________
Janice D. Stoney /s/ Daniel F. Hopp *By:___________________________ Attorney-in-Fact
Daniel F. Hopp 11 ANNUAL REPORT ON FORM 10-K ITEMS 14(A) (1) AND (2) AND 14(D) INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE(S) YEAR ENDED DECEMBER 31, 1995 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, 1995 and 1994 Consolidated statements of earnings--Three years ended December 31, 1995 Consolidated statements of cash flows--Three years ended December 31, 1995 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-10 Exhibit 12--Ratio of Earnings to Fixed Charge......................... F-11
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 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, 1995. 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 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, 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 amount 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, 1995 and 1994, and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 31, 1995, 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. Chicago, Illinois January 31, 1996 F-2 [LETTERHEAD PRICE WATERHOUSE] Report of Independent Accountants January 19, 1996 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, 1995 and 1994 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 19, 1996. 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. 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. F-3 January 19, 1996 [LOGO PRICE WATERHOUSE] Brasmotor S.A. Page 2 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. /s/ Price Waterhouse F-4 [LETTERHEAD PRICE WATERHOUSE] Report of Independent Accountants January 19, 1996 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, 1995 and 1994 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 19, 1996. 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 19, 1996 [LOGO 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. /s/ Price Waterhouse F-6 [LETTERHEAD PRICE WATERHOUSE] Report of Independent Accountants January 19, 1996 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, 1995 and 1994 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 19, 1996. 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 19, 1996 [LOGO PRICE WATERHOUSE] Multibras S.A. Eletrodomesticos 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. /s/ Price Waterhouse F-8 SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS WHIRLPOOL CORPORATION AND SUBSIDIARIES YEARS ENDED DECEMBER 31, 1995, 1994, AND 1993 (MILLIONS OF DOLLARS)
COL. A COL. B COL. C COL. D COL. E ------ --------- ------------------- ------------ ------- ADDITIONS ------------------- (1) (2) BALANCE CHARGED CHARGED BALANCE AT TO COSTS TO OTHER AT END BEGINNING AND ACCOUNTS-- DEDUCTIONS-- OF DESCRIPTION OF PERIOD EXPENSES DESCRIBE DESCRIBE PERIOD ----------- --------- -------- ---------- ------------ ------- Year Ended December 31, 1995: Current assets: Allowance for doubtful accounts--trade receivables.............. $ 38 $ 16 $ 15(A) $ 39 ==== ==== ==== ==== Allowance for doubtful accounts--financing receivables and leases... $ 15 $ 10 $ 13(B) $ 12 ==== ==== ==== ==== Long-term receivables: Allowance for doubtful accounts--financing receivables and leases... $ 31 $ 24 $ 25(C) $ 30 ==== ==== ==== ==== Accrued expenses: Restructuring reserves.... $175 $ 0 $105(D) $ 70 ==== ==== ==== ==== Year Ended December 31, 1994: Current assets: Allowance for doubtful accounts--trade receivables.............. $ 36 $ 13 $ 11(A) $ 38 ==== ==== ==== ==== Allowance for doubtful accounts--financing receivables and leases... $ 14 $ 13 $ 12(B) $ 15 ==== ==== ==== ==== Long-term receivables: Allowance for doubtful accounts--financing receivables and leases... $ 35 $ 9 $ 13(C) $ 31 ==== ==== ==== ==== Accrued expenses: Restructuring reserves.... $ 33 $250 $108(D) $175 ==== ==== ==== ==== Year Ended December 31, 1993: Current assets: Allowance for doubtful accounts--trade receivables.............. $ 35 $ 9 $ 8(A) $ 36 ==== ==== ==== ==== Allowance for doubtful accounts--financing receivables and leases... $ 22 $ 18 $ 26(B) $ 14 ==== ==== ==== ==== Long-term receivables: Allowance for doubtful accounts--financing receivables and leases... $ 15 $ 49 $ 29(C) $ 35 ==== ==== ==== ==== Accrued expenses: Restructuring reserves.... $ 22 $ 31 $ 20(D) $ 33 ==== ==== ==== ====
- -------- Note A--The amounts represent accounts charged off, less recoveries of $5 in 1995, $1 in 1994, and $6 in 1993. Note B--The amounts represent accounts charged off, less recoveries of $2 in 1995, and $1 in 1994 and 1993. Note C--The amounts represent accounts charged off, less recoveries of $1 in 1995, 1994, and 1993. Note D--Charges include employee related severance and relocation, disposal of fixed assets and translation adjustments. F-9 EXHIBIT 11--STATEMENT RE: COMPUTATION OF EARNINGS PER SHARE WHIRLPOOL CORPORATION AND SUBSIDIARIES (MILLIONS OF DOLLARS EXCEPT EARNINGS PER SHARE)
1995 1994 1993 ------ ------ ------ Primary Average Shares Outstanding............................. 73.9 74.2 71.1 Treasury Method (Average Market Price) Stock Options........................................ 0.6 1.0 1.2 Restricted Stock (RSVP).............................. 0.3 0.3 -- ------ ------ ------ Primary Average Shares Outstanding..................... 74.8 75.5 72.3 ====== ====== ====== Net Earnings Before Cumulative Effect of Accounting Change................................................ $209.4 $158.3 $230.7 RSVP Amortization, net of tax.......................... -- -- -- ------ ------ ------ Primary Net Earnings Before Cumulative Effect of Accounting Change..................................... $209.4 $158.3 $230.7 ====== ====== ====== Earnings Per Share Before Cumulative Effect of Accounting Change..................................... $ 2.80 $ 2.10 $ 3.19 ====== ====== ====== Less Cumulative Effect of Accounting Change............ $ -- $ -- $(2.52) ====== ====== ====== Earnings Per Share..................................... $ 2.80 $ 2.10 $ 0.67 ====== ====== ====== Fully Diluted Average Shares Outstanding............................. 73.9 74.2 71.1 Treasury Method (Average Market Price or End of Period, whichever is greater): Stock Options........................................ 0.9 1.2 2.0 Restricted Stock..................................... 0.3 0.3 -- Assumed Conversion of Debt (4,885 shares issued May 1991)................................................. 2.2 2.2 3.3 ------ ------ ------ Fully Diluted Average Shares Outstanding............... 77.3 77.9 76.4 ====== ====== ====== Net Earnings Before Cumulative Effect of Accounting Change................................................ $209.4 $158.3 $230.7 Interest Expense, net of tax........................... 4.2 4.3 7.3 RSVP Amortization, net of tax.......................... -- -- -- ------ ------ ------ Fully Diluted Net Earnings Before Cumulative Effect of Accounting Change..................................... $213.6 $162.6 $238.0 ====== ====== ====== Earnings Per Share Before Cumulative Effect of Accounting Change..................................... $ 2.76 $ 2.09 $ 3.11 ====== ====== ====== Net Earnings........................................... $209.4 $158.3 $ 50.7 Interest Expense, net of tax........................... 4.2 4.3 7.3 RSVP Amortization, net of tax.......................... -- -- -- ------ ------ ------ Fully Diluted Net Earnings............................. $213.6 $162.6 $ 58.0 ====== ====== ====== Earnings Per Share..................................... $ 2.76 $ 2.09 $ 0.67* ====== ====== ======
- -------- * Since the fully diluted net earnings per share is anti-dilutive, the primary net earnings per share is presented. F-10 EXHIBIT 12--STATEMENT RE: COMPUTATION OF THE RATIOS OF EARNINGS TO FIXED CHARGES WHIRLPOOL CORPORATION AND SUBSIDIARIES
YEAR ENDED DECEMBER 31, 1995 ------------------------------- APPLIANCE FINANCIAL WHIRLPOOL BUSINESS SERVICES CORPORATION --------- --------- ----------- (MILLIONS OF DOLLARS) Pretax earnings................................ $213.6 $ 28.3 $241.9 Portion of rents representative of the interest factor........................................ 20.6 0.9 21.5 Interest on indebtedness....................... 128.6 78.1 206.7 Amortization of debt expense and premium....... 0.6 0.2 0.8 WFC preferred stock dividend................... -- 4.5 4.5 ------ ------ ------ Adjusted income................................ $363.4 $112.0 $475.4 ====== ====== ====== FIXED CHARGES - ------------- Portion of rents representative of the interest factor........................................ $ 20.6 $ 0.9 $ 21.5 Interest on indebtedness....................... 128.6 78.1 206.7 Amortization of debt expense and premium....... 0.6 0.2 0.8 WFC preferred stock dividend................... -- 4.5 4.5 ------ ------ ------ $149.8 $ 83.7 $233.5 ====== ====== ====== Ratio of earnings to fixed charges............. 2.43 1.34 2.04 ====== ====== ======
F-11 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-12 ANNUAL REPORT ON FORM 10-K ITEMS 14(A)(3) AND 14(C) INDEX TO EXHIBITS YEAR ENDED DECEMBER 31, 1995 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). [Incorporated by reference from Exhibit 3(ii) to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1994] 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. 4 (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] 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]
E-1
NUMBER AND SEQUENTIAL DESCRIPTION PAGE OF EXHIBIT NUMBERS* ----------- ---------- 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 from Exhibit 10(iii)(l) to 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) [Incorporated by reference from Exhibit 10(iii)(o) to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1994] 10(iii) (p) Whirlpool Corporation Charitable Award Contribution and Additional Life Insurance Plan for Directors (Effective April 20, 1993) [Incorporated by reference from Exhibit 10(iii)(p) to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1994] 10(iii) (q) Whirlpool Corporation Career Stock Grant Program (Pursuant to the 1989 Whirlpool Corporation Omnibus Stock and Incentive Plan). 10(iii) (r) Whirlpool Corporation 1989 Omnibus Stock and Incentive Plan Amendment (Effective as of June 20, 1995). 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, 1995 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 EX-10.IIIQ 2 CAREER STOCK GRANT PROGRAM Whirlpool Corporation Career Stock Grant This Award Agreement sets forth the terms and provisions of the grant to you of Career Stock, subject to restrictions. Career Stock is phantom stock of Whirlpool Corporation. As such, the shares are not an equity interest in the Company, and no voting rights are attached to the shares. The value of a share of Career Stock on any given date is equal to the Fair Market Value of a share of Whirlpool Corporation common stock on that date. The Career Stock is being awarded under the Whirlpool Corporation 1989 Omnibus Stock and Incentive Plan (the "Plan"), the terms of which shall govern this grant, and are incorporated herein by reference. Participant: Date of Grant: Shares of Career Stock Granted: Vesting Schedule ========================================== Percent of Total Date/Event Shares of Career Stock - ------------------------------------------ - ------------------------------------------ THIS AGREEMENT, effective as of the Date of Grant set forth above, between Whirlpool Corporation, a Delaware corporation (the "Company"), and the Participant named above, is made pursuant to the provisions of the Plan. The capitalized terms appearing in this Agreement shall have the definitions ascribed to them in the Plan, unless defined otherwise in this Agreement. In the event there is any inconsistency between the terms of this Agreement and the terms of the Plan, the terms of the Plan shall completely supersede and replace the terms of this Agreement. The parties hereto agree as follows: 1. Employment by the Company. The Participant's right to receive and/or retain the shares of Career Stock is specifically contingent upon the Participant's compliance with the noncompetition restrictions set forth in Section 8 herein. The award of Career Stock, however, shall not impose upon the Company any obligation to retain the Participant in its employ for any given period or upon any specific terms of employment. 2. Vesting. Subject to the remaining terms of this Agreement, partial vesting in shares of Career Stock occurs periodically, as identified in the Vesting Schedule. Subject to the remaining terms of this Agreement, for purposes of this Section 2, the Vesting Schedule also applies to additional shares of Career Stock which are credited to the participant pursuant to Section 4 herein. 3. Redemption of Shares of Career Stock. Subject to the remaining terms of this Agreement, shares of Career Stock will be redeemed for shares of Company common stock, on a one-for-one basis, upon termination of employment; provided, however, that such redemption occurs only with respect to shares of Career Stock which the Participant has vested in prior to or as a result of employment termination (as defined in Sections 5 and 7 of this Agreement). Delivery of shares of common stock will be made as soon as is practicable following such redemption. Redemption for shares of Company common stock is contingent upon compliance with the noncompetition restrictions set forth in Section 8 herein. In addition, in the event of a breach of the terms of Section 8 herein, any shares of Company common stock previously distributed to the Participant pursuant to this Agreement (or, at the discretion of the Committee, the full cash value of such shares determined as of the date of the breach of this Agreement) must be returned to the Company by the Participant within sixty (60) days after the determination (pursuant to Section 8 herein) that a breach of the terms of Section 8 herein has occurred. 4. Dividends. The Participant will be credited with all dividends and other distributions authorized by the Human Resources Committee of the Board of Directors of the Company (hereinafter referred to as "the Committee") with respect to the shares of Career Stock held. Such dividends or distributions will be credited in additional shares of Career Stock. The additionally credited shares of Career Stock shall be subject to the same restrictions as the shares of Career Stock with respect to which they were paid. The Committee will have the ability to credit dividends up to an amount equal to those that would have been received if the shares of Career Stock were shares of the Company's common stock. Any dividends so credited will be invested in additional shares of Career Stock, at the Fair Market Value of the Company's common stock on the date that dividends are distributed to common shareholders. 5. Termination of Employment by Reason of Death or Disability. In the event the Participant's employment is terminated by reason of death or disability, the Participant will become one hundred percent (100%) vested in all shares of Career Stock then outstanding. Redemption of shares will occur on January 1 first following the Participant's death or disability. 6. Termination of Employment for Cause. Notwithstanding any other provisions of this Agreement, in the event of Termination of Employment for Cause, all shares of Career Stock granted hereunder shall immediately be forfeited (regardless of their vested status). As used in this Agreement, "Termination of Employment for Cause" shall mean termination of Participant's employment due to the Participant's (i) commission of an act or series of actions which, in the reasonable judgment of the Committee, could constitute a felony under applicable law; or (ii) willful refusal without proper legal cause to perform Participant's duties and responsibilities; or (iii) willfully engaging in conduct which Participant has or should have reason to know may be materially injurious to Company. 7. Termination of Employment for Other Reasons. In the event the Participant's employment is terminated for reasons other than those described in Sections 5 and 6 herein prior to full vesting of the shares of Career Stock, all unvested shares of Career Stock granted hereunder shall immediately be forfeited by the Participant. 8. Noncompetition. Notwithstanding any other provision of this Agreement, the Participant's rights under this Agreement are contingent upon compliance with the provisions of this Section 8. (a) Prohibition on Competition. Without the prior written consent of the Company, during the period in which the Participant is employed by the Company and for a term of twenty-four (24) months thereafter, the Participant shall not, as an employee, an officer, or a consultant, engage directly or indirectly in any business or enterprise which is "in competition" with the Company or its successors or assigns. For purposes of this Agreement, a business or enterprise will be deemed to be "in competition if it is engaged in any business activity of the Company or its subsidiaries. However, the Participant shall be allowed to purchase and hold for investment less than three percent (3%) of the shares of any corporation whose shares are regularly traded on a national securities exchange or in the over-the-counter market. (b) Disclosure of Information. The Participant recognizes that the Participant has access to, and knowledge of, certain confidential and proprietary information of the Company which is essential to the performance of the Participant's duties under this Agreement. The Participant will not, during or after the term of employment by the Company, in whole or in part, disclose such information to any person, firm, corporation, association, or other entity for any reason or purpose whatsoever, nor shall the Participant make use of any such information for the Participant's own purposes. (c) Covenants Regarding Other Employees. During the term of this Agreement, and for a period of twenty-four (24) months following the expiration of this Agreement, the Participant agrees not to attempt to induce any employee of the Company to terminate his or her employment with the Company, accept employment with any competitor of the Company, or to interfere in a similar manner with the business of the Company. (d) Legal Damages in Breach. The award of Career Stock set forth in this Agreement is expressly contingent upon full compliance with the terms and provisions of this Section 8. In the event of a breach of this Section 8, the Participant shall forfeit any and all rights to Career Stock granted hereunder, regardless of the vested status of the Career Stock and regardless of whether some or all shares of Career Stock have been redeemed for shares of Company common stock pursuant to Section 3 herein. For purposes of this Section 8, the date of determination of the existence of a breach shall be the date that the Committee determines that such a breach has occurred. Immediately upon determination of a breach of this Section 8, all vested and unvested shares of Career Stock which have not yet been redeemed for shares of Company common stock shall be forfeited by the Participant with no value paid by the Company therefor. In addition, within sixty (60) days following the determination of a breach, the Participant shall be required to surrender to the Company all shares of Company common stock delivered in exchange for shares of Career Stock under this Agreement (or, at the sole discretion of the Committee, an amount of cash equal to the Fair Market Value of such shares of Company common stock as of the date of such breach). In addition to the surrender of Career Stock and Company common stock described above, and in addition to the ability to obtain specific performance as set forth in Section 8(e) herein, the Company shall have the right to seek and obtain monetary damages associated with any breach by the Participant of the terms and provisions of this Agreement. (e) Specific Performance. Despite any and all legal remedies which may be available to the Company, the parties recognize that the Company will have no adequate remedy at law for breach by the Participant of the requirements of this Article and, in the event of such breach, the Company and the Participant hereby agree that, in addition to the right to seek monetary damages, the Company will be entitled to a decree of specific performance to comply with the terms of this Agreement (including, but not limited to, a temporary or permanent injunction or restraining order), mandamus, or other appropriate remedy to enforce performance of such requirements. 9. Change in Control. In the event of a Change in Control (as defined in the Whirlpool Corporation Salaried Employees Retirement Plan), any vesting periods and restrictions imposed on Career Stock shares subject to this Agreement shall lapse, and the Career Stock shares shall be redeemed for an equal number of shares of common stock of the Company. Within ten (10) business days after the effective date of a Change in Control, the stock certificates representing the shares of common stock, without any restrictions or legend thereon, shall be delivered to the Participant. 10. Transferability. These shares of Career Stock are not transferable by the Participant, whether voluntarily or involuntarily, by operation of law or otherwise. If any assignment, pledge, transfer, or other disposition, voluntary or involuntary, of the Career Stock shares shall be made, or if any attachment, execution, garnishment, or lien shall be issued against or placed upon the Career Stock shares, then the Participant's right to the Career Stock shares shall immediately cease and terminate and the Participant shall promptly forfeit to the Company all shares of Career Stock awarded (including shares of Career Stock credited pursuant to Section 4) under this Agreement. 11. Recapitalization. In the event of any merger, reorganization, consolidation, recapitalization, separation, liquidation, stock dividend, split up, share combination, or other change in the corporate structure of the Company affecting the common shares of Company stock, the number of shares of Career Stock subject to this Agreement may be equitably adjusted by the Committee, if such an adjustment is necessary, to prevent dilution or enlargement of the Participant's rights. 12. Administration. This Agreement and the rights of the Participant hereunder are subject to all the terms and conditions of the Plan, as the same may be amended from time to time, as well as to such rules and regulations as the Committee may adopt for administration of the Plan. It is expressly understood that the Committee is authorized to administer, construe, and make all determinations necessary or appropriate to the administration of the Plan and this Agreement, all of which shall be binding upon the Participant. 13. Miscellaneous. (a) The shares of Career Stock are not an equity interest in the Company. As such, any liability of the Company for such rights is unfunded. (b) This Agreement shall not confer upon the Participant any right to continuation of employment by the Company nor shall this Agreement interfere in any way with the Company's right to terminate the Participant's employment at any time. (c) With the approval of the Board, the Committee may terminate, amend, or modify the Plan and/or this Agreement provided, however, that no such termination, amendment, or modification of the Plan and/or this Agreement may, in any material way, adversely affect the Participant's rights under this Agreement. (d) The Company shall have the authority to deduct or withhold, or require the Participant to remit to the Company, an amount sufficient to satisfy Federal, state, and local taxes (including the Participant's FICA obligation) required by law to be withheld with respect to any provision of this Agreement. (e) This Agreement shall be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required. (f) To the extent not preempted by Federal law, this Agreement shall be governed by and construed in accordance with the laws of the State of Michigan. IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the Date of Grant. EX-10.IIIR 3 OMNIBUS STOCK AND INCENTIVE PLAN AMENDMENT AMENDMENT (Effective as of June 20, 1995) of the WHIRLPOOL CORPORATION 1989 OMNIBUS STOCK AND INCENTIVE PLAN The Whirlpool Corporation 1989 Omnibus Stock and Incentive Plan (the "Plan") is hereby amended by the Board of Directors pursuant to Section 6.5(a) of the Plan, effective as of June 20, 1995, as follows: 1. By substituting the following provision in lieu of the current Section 1.4 of the Plan: "Awards under the Plan may be in the form of any one or more of the following: (a) Statutory Stock Options ("ISOs," which term shall be deemed to include Incentive Stock Options as defined in Section 2.5 and any future type of tax- qualified option which may subsequently be authorized), Non-statutory Stock Options ("NSOs" and, collectively with ISOs, "Options"), and Stock Appreciation Rights ("SARs") as described in Article II, (b) Performance Units and Performance Shares ("Performance Units" and "Performance Shares") as described in Article III, and (c) Restricted Stock and Restricted Stock Equivalents ("Restricted Stock" and "Restricted Stock Equivalents") as described in Article IV (collectively, "Awards")." 2. By substituting the following provision in lieu of the current Section 1.5 of the Plan: "Shares of stock covered by Awards under the Plan may be in whole or in part from authorized and unissued or treasury shares of the Corporation's common stock, $1.00 par value per share, or such other shares as may be substituted pursuant to Section 6.2 ("Common Stock"). The maximum number of shares of Common Stock which may be issued for all purposes under the Plan shall be 5,400,000 (subject to adjustment pursuant to Section 6.2). Any shares of Common Stock subject to an Option which for any reason is canceled (excluding shares subject to an Option canceled upon the exercise of a related SAR to the extent shares are issued upon exercise of such SAR) or terminated without having been exercised, or any shares of Restricted Stock or Performance Shares which are forfeited, shall again be available for Awards under the Plan. No fractional shares shall be issued, and the Committee shall determine the manner in which fractional share value shall be treated." 3. By adding the following as a new Paragraph 4.5 of Article IV of the Plan: "4.5 AWARD OF RESTRICTED STOCK EQUIVALENTS: In lieu of or in addition to the foregoing Restricted Stock Awards, the Committee may award to any Participant restricted stock equivalents, subject to the terms and conditions of Paragraphs 4.2, 4.3, and 4.4 of this Article IV being applied to such awards as if those awards were for Restricted Stock and subject to such other terms and conditions as the Committee may prescribe ("Restricted Stock Equivalents"). Each Restricted Stock Equivalent shall represent the right of the Participant to receive an amount determined in the manner established by the Committee at the time of award, which value may, without limitation, be equal to the Fair Market Value of one share of Common Stock. Payment for Restricted Stock Equivalents may be made in a lump sum or in installments, in cash, Common Stock or in a combination thereof as the Committee may determine." IN WITNESS WHEREOF, the Company has caused this Amendment to be signed and its corporate seal to be hereunto affixed by its duly authorized officers effective as of June 20, 1995 on this 1st day of August, 1995. WHIRLPOOL CORPORATION ATTEST: By ____________________ David R. Whitwam, By ___________________ Chairman of the Board and Daniel F. Hopp Chief Executive Officer Vice President, General Counsel and Secretary EX-11 4 COMPUTATION OF EARNINGS EXHIBIT 11--STATEMENT RE: COMPUTATION OF EARNINGS PER SHARE WHIRLPOOL CORPORATION AND SUBSIDIARIES (MILLIONS OF DOLLARS EXCEPT EARNINGS PER SHARE)
1995 1994 1993 ------ ------ ------ Primary Average Shares Outstanding............................. 73.9 74.2 71.1 Treasury Method (Average Market Price) Stock Options........................................ 0.6 1.0 1.2 Restricted Stock (RSVP).............................. 0.3 0.3 -- ------ ------ ------ Primary Average Shares Outstanding..................... 74.8 75.5 72.3 ====== ====== ====== Net Earnings Before Cumulative Effect of Accounting Change................................................ $209.4 $158.3 $230.7 RSVP Amortization, net of tax.......................... -- -- -- ------ ------ ------ Primary Net Earnings Before Cumulative Effect of Accounting Change..................................... $209.4 $158.3 $230.7 ====== ====== ====== Earnings Per Share Before Cumulative Effect of Accounting Change..................................... $ 2.80 $ 2.10 $ 3.19 ====== ====== ====== Less Cumulative Effect of Accounting Change............ $ -- $ -- $(2.52) ====== ====== ====== Earnings Per Share..................................... $ 2.80 $ 2.10 $ 0.67 ====== ====== ====== Fully Diluted Average Shares Outstanding............................. 73.9 74.2 71.1 Treasury Method (Average Market Price or End of Period, whichever is greater): Stock Options........................................ 0.9 1.2 2.0 Restricted Stock..................................... 0.3 0.3 -- Assumed Conversion of Debt (4,885 shares issued May 1991)................................................. 2.2 2.2 3.3 ------ ------ ------ Fully Diluted Average Shares Outstanding............... 77.3 77.9 76.4 ====== ====== ====== Net Earnings Before Cumulative Effect of Accounting Change................................................ $209.4 $158.3 $230.7 Interest Expense, net of tax........................... 4.2 4.3 7.3 RSVP Amortization, net of tax.......................... -- -- -- ------ ------ ------ Fully Diluted Net Earnings Before Cumulative Effect of Accounting Change..................................... $213.6 $162.6 $238.0 ====== ====== ====== Earnings Per Share Before Cumulative Effect of Accounting Change..................................... $ 2.76 $ 2.09 $ 3.11 ====== ====== ====== Net Earnings........................................... $209.4 $158.3 $ 50.7 Interest Expense, net of tax........................... 4.2 4.3 7.3 RSVP Amortization, net of tax.......................... -- -- -- ------ ------ ------ Fully Diluted Net Earnings............................. $213.6 $162.6 $ 58.0 ====== ====== ====== Earnings Per Share..................................... $ 2.76 $ 2.09 $ 0.67* ====== ====== ======
- -------- * Since the fully diluted net earnings per share is anti-dilutive, the primary net earnings per share is presented. F-10 EX-12 5 COMPUTATION OF RATIO EXHIBIT 12--STATEMENT RE: COMPUTATION OF THE RATIOS OF EARNINGS TO FIXED CHARGES WHIRLPOOL CORPORATION AND SUBSIDIARIES
YEAR ENDED DECEMBER 31, 1995 ------------------------------- APPLIANCE FINANCIAL WHIRLPOOL BUSINESS SERVICES CORPORATION --------- --------- ----------- (MILLIONS OF DOLLARS) Pretax earnings................................ $213.6 $ 28.3 $241.9 Portion of rents representative of the interest factor........................................ 20.6 0.9 21.5 Interest on indebtedness....................... 128.6 78.1 206.7 Amortization of debt expense and premium....... 0.6 0.2 0.8 WFC preferred stock dividend................... -- 4.5 4.5 ------ ------ ------ Adjusted income................................ $363.4 $112.0 $475.4 ====== ====== ====== FIXED CHARGES - ------------- Portion of rents representative of the interest factor........................................ $ 20.6 $ 0.9 $ 21.5 Interest on indebtedness....................... 128.6 78.1 206.7 Amortization of debt expense and premium....... 0.6 0.2 0.8 WFC preferred stock dividend................... -- 4.5 4.5 ------ ------ ------ $149.8 $ 83.7 $233.5 ====== ====== ====== Ratio of earnings to fixed charges............. 2.43 1.34 2.04 ====== ====== ======
F-11 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-12 EX-13 6 MD&A AND CONSOLIDATED FINANCIAL STATEMENTS 1995 MANAGEMENT'S DISCUSSION & ANALYSIS -- Results of Operations -- The consolidated statements of earnings summarize operating results for the last three years. This section of Management's Discussion highlights the main factors affecting the changes in operating results during the three-year period. The accompanying consolidated financial statements include supplemental consolidating data reflecting the Company's investment in Whirlpool Financial Corporation ("WFC") on an equity basis rather than as a consolidated subsidiary. Management believes this presentation provides more meaningful information about the major home appliance and financial services businesses. Revenues - -------- Revenues were $8.3 billion in 1995, an increase of 3% over 1994. Excluding the effects of currency fluctuations, revenues were flat from year to year with the impact of increased volume offset by unfavorable brand and product mix. North American sales were up 1% due primarily to selective price increases partially offset by unfavorable brand and product mix. North American unit volumes were virtually identical to those from 1994, although the regional home- appliance industry slipped by more than 1%. North American industry shipments are expected to be up about 1% in 1996. European revenues were up 2% compared to 1994. Excluding the effects of currency fluctuations, revenues were off 8% due primarily to a 2% decline in unit volumes, and unfavorable brand and product mix. Volumes were hurt by weak demand across the region, particularly toward the end of the year and more pronounced in Germany and France, which together account for about 40% of European sales. In addition, Europe saw a slight erosion of its market share following a major sales-force reorganization. Despite continuing sluggishness in Europe, ongoing large-scale introduction of redesigned products are expected to generate increased volumes beginning in the second quarter of 1996. Financial services revenues were up 19% in 1995 as WFC continued to expand its core inventory and consumer finance businesses. Revenues were $8.1 billion in 1994, an increase of 8% over 1993 due primarily to unit volume increases and North American price increases. The overall impact of currency fluctuations was not significant. North American revenues increased 11% due primarily to increased volumes and pricing partially offset by product mix. North American unit volumes increased 9% for the year which was slightly below the overall increase for the industry. Shipments of appliances bearing the KitchenAid, Whirlpool and Roper brand names were up strongly for the year. Shipments to Sears under its Kenmore brand were down slightly as Sears closed its catalog business and a number of retail stores in 1993. European revenues were up 7% due primarily to increased volumes which grew at more than twice the rate of the industry average of 3%. Financial services revenues were down 5% due primarily to the continued liquidation of WFC's commercial lending portfolio. Expenses - -------- The relationship of cost of products sold to net sales deteriorated almost 2% in 1995 compared to 1994. North American margins declined about 2% in 1995 due to higher material and component costs, start-up costs associated with the production of redesigned midsize refrigerators and the difficult economic climate in Mexico, partially offset by price increases. European margins were down 1% in 1995 due to lower volumes and reduced production levels, combined with sharply higher material and component costs and an industry shift to lower- priced products partially offset by productivity improvements, continued expense control, benefits of restructuring and currency translation. The relationship of cost of products sold to net sales deteriorated slightly in 1994 compared to 1993. North American margins were up slightly in 1994 due to improved productivity, increased volumes and pricing offset somewhat by chlorofluorocarbon (CFC) taxes, compliance costs associated with energy regulatory requirements and product mix. -- page 30 -- European margins were down in 1994 due to the competitive pressures of a consolidating industry and to brand and product mix as consumer demand shifted somewhat to lower-margin, value-brand appliances. The ratio of consolidated selling and administrative expenses as a percent of net sales was higher by nearly 1% in 1995 compared to 1994 reflecting a similar deterioration for the appliance business expense ratio. North American expenses as a percent of net sales were down slightly in 1995 due to cost reduction initiatives and lower compensation costs. After excluding the impact of currency translation, European expenses were down compared to last year reflecting expense control efforts and benefits of restructuring. However, European expenses as a percent of net sales were up almost 2% in 1995 primarily due to decreased sales after excluding currency translation effects. Both 1995 and 1994 were affected by increased strategic spending to expand the Company's presence in Asia. WFC selling and administrative expenses as a percent of financial services revenue were down nearly 1% as WFC successfully transitioned to its strategy of supporting the inventory and consumer finance business. The ratio of consolidated selling and administrative expenses as a percent of revenues, excluding the effect of the 1993 WFC first quarter charge (refer to Net Earnings), was flat in 1994 compared to 1993. The appliance business expense ratio was up slightly. North American expenses as a percent of net sales were up slightly due primarily to costs associated with the new distribution arrangement (refer to Note 10 to the accompanying consolidated financial statements) and due to costs related to a refrigerator conversion project. European expenses as a percent of net sales were down due to ongoing cost reduction initiatives and benefit from restructuring. The year was also affected by a planned increase in costs related to the Company's strategy to expand its presence in Asia. Financial services expenses excluding nonrecurring charges, as a percent of the related revenue, were up slightly due to accelerated depreciation of aircraft on lease and increased operating expenses to support the inventory and consumer finance businesses. WFC's financial services interest expense as a percent of the related revenue was up in 1995 compared to 1994 due to higher interest rates in 1995 but was down in 1994 compared to 1993 largely due to lower interest rates resulting from the transition of medium term debt to commercial paper. In the third quarter of 1994, the Company sold its minority interest in Matsushita Floor Care Company (MFCC), a vacuum cleaner manufacturer, resulting in a $26 million pre-tax gain. The Company also sold its European compressor operation in the second quarter of 1994 resulting in a $34 million pre-tax gain. Refer to Cash Flow -- Investing Activities. Restructuring costs of $250 million for 1994 consist of charges to consolidate and reorganize the Company's European sales, marketing and support functions to better serve dealers by trade channel rather than by country, rationalization of European customer services and manufacturing operations, the closure of two North American manufacturing facilities and the further consolidation and rationalization of North American operations. The restructuring is expected to result in annual cost savings of $150 million by 1997. Refer to Note 10 to the accompanying consolidated financial statements. Restructuring costs for 1993 consist of charges to end independent distributor agreements in North America in order to streamline the distribution process, facility consolidation and employee related charges in Canada, the pre- tax loss on the sale of a refrigerator plant in Barcelona, Spain and employee related costs associated with efforts to increase cost effectiveness in Europe. Interest and Sundry - ------------------- The change in interest and sundry for 1995 compared to the prior year is due primarily to foreign currency losses. However, the overall impact of currency fluctuations in 1995 was not significant due to offsetting foreign currency gains reported elsewhere in the statement of earnings. -- page 31 -- -- Management's Discussion & Analysis -- Interest Expense - ---------------- Appliance business interest expense increased significantly in 1995 due to higher borrowing levels (refer to Financing Activities) and higher interest rates. Appliance business interest expense was flat in 1994 due to lower borrowing levels offset by higher interest rates. Income Taxes - ------------ The consolidated provision for income taxes as a percent of earnings before income taxes and other items was 41% in 1995 compared to 60% in 1994 (40% excluding the effect of restructuring and business dispositions) and 40% in 1993. The increase in the provision in 1995 compared to 1994, excluding the effect of restructuring and business dispositions, is primarily due to the relatively larger impact permanent items have on the effective tax rate due to lower net earnings nearly offset by favorable settlements of prior year tax returns. The higher effective rate in 1994 is due primarily to the impact of the 1994 restructuring charge and a 1994 tax charge associated with the sale of the European compressor operation partially offset by a 1994 tax benefit associated with the sale of MFCC. Excluding the effects of restructuring and business dispositions, the 1994 effective tax rate is essentially flat with 1993. Earnings before Equity Earnings and Other Items - ----------------------------------------------- Earnings before equity earnings and other items were $142 million in 1995, $116 million in 1994 and $227 million in 1993. Excluding the impact of restructuring, business dispositions and the 1993 WFC charge, earnings before equity earnings and other items were $142 million in 1995, $290 million in 1994 and $281 million in 1993. Equity in Affiliated Companies - ------------------------------ Equity earnings were $72 million in 1995 compared to $59 million in 1994 and $16 million in 1993. The Company's Brazilian affiliates generated equity earnings of $70 million in 1995 compared to $39 million in 1994 and $21 million in 1993 reflecting primarily the increased consumer demand stimulated by the Brazilian government's economic plan implemented in mid-1994. Results were also favorably affected by certain non-recurring tax benefits, including $17 million of excise tax credits and the consequences of the May 1994 merger of two of the Brazilian affiliates, Brastemp S.A. and Consul S.A., into a new entity, Multibras S.A. The merger resulted in operating efficiencies as an outcome of consolidating selling and administrative functions, improved utilization of prior year tax losses and more flexibility in management of brands and products. The Company's Mexican affiliate equity earnings were break-even in 1995 as compared to equity earnings of $16 million in 1994 and an equity loss of $6 million in 1993. Reduced shipments and higher financing costs resulting from difficult economic conditions in Mexico were partially offset by cost reductions and net translation gains from the peso devaluation of $25 million. The increase in 1994 performance is due to increased shipments, improved cost control and an $12 million gain resulting from the devaluation of the Mexican peso. Results in 1993 include a $3 million charge for taxes related to prior years. Economic volatility and exchange rate changes continue to affect consumer purchasing power and the appliance industry as a whole in Brazil and Mexico. Net Earnings - ------------ In 1994, the Company recorded an after-tax restructuring charge of $192 million or $2.54 per share. Business dispositions in 1994 resulted in an after- tax gain of $18 million or $.24 per share. The Company adopted SFAS No. 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions," in the first quarter of 1993 resulting in a one time after-tax charge to earnings of $180 million or $2.52 per share. The Company also recorded a first quarter after-tax charge of $40 million or $.56 per share primarily to adjust the value of specific aerospace and commercial accounts in WFC's financing portfolio. -- page 32 -- Absent all restructuring, business dispositions, SFAS No. 106 and WFC charges mentioned above, net earnings were $209 million in 1995, $332 million in 1994 and $285 million in 1993. Corresponding earnings per share were $2.80 in 1995, $4.40 in 1994 and $3.94 in 1993. -- Cash Flows -- The statements of cash flows reflect the changes in cash and equivalents for the last three years by classifying transactions into three major categories: operating, investing and financing activities. Operating Activities - -------------------- The Company's main source of liquidity is cash from operating activities consisting of net earnings from operations adjusted for non-cash operating items such as depreciation and changes in operating assets and liabilities such as receivables, inventories and payables. Cash provided by operating activities was $377 million in 1995, $449 million in 1994 and $629 million in 1993. The decrease in 1995 from the prior year is due primarily to lower earnings excluding the 1994 effects of restructuring and business dispositions and 1995 restructuring spending partially offset by favorable accounts receivable performance. The decrease in 1994 is due primarily to changes in receivables, inventories, other operating accounts and restructuring spending. Other operating accounts primarily include accrued expenses related to employee compensation, income taxes, product warranty and advertising. Investing Activities - -------------------- The principal recurring investing activities are property additions and investments in and collection of financing receivables and leases. Net property additions were $483 million in 1995, $418 million in 1994 and $309 million in 1993. These expenditures are primarily for equipment and tooling related to product improvements, more efficient production methods, replacement for normal wear and tear and more stringent governmental energy and environmental regulations. Investment in the financial services business resulted in $289 million of net WFC financing receivables originated in 1995 compared to $17 million in 1994 and $285 million in 1993 of net cash receipts from WFC financing receivables. Other investing activities during the past three years included business dispositions and acquisitions. During 1995, the Company expanded its presence in Asia by acquiring controlling interests in three existing manufacturing companies and completing three new joint ventures. In November 1995, the Company acquired a majority interest in Raybo Air Conditioner Manufacturing Company, a Chinese manufacturer and marketer of air conditioners, for about $22 million in cash. Raybo annual sales were about $20 million for its fiscal year 1994. In May 1995, the Company acquired a majority interest in Shunde SMC Microwave Products Co., Ltd. (SMC), a Chinese manufacturer and marketer of microwave ovens, for about $90 million in cash. SMC annual sales were about $100 million for its fiscal year 1994. In February 1995, the Company acquired a majority interest in Kelvinator of India, Ltd. (KOI), a manufacturer and marketer of refrigerators, for about $116 million in cash funded principally in 1995. As the transaction involved an issue of new KOI shares, most of the purchase price was invested as equity in KOI in support of planned plant and product line expansion. KOI annual sales were about $120 million for its fiscal year 1994. The Company intends to construct a new global no-frost refrigerator facility in India with production expected to begin in 1997. The Company's new Chinese joint ventures include a $17 million majority interest in Beijing Whirlpool Snowflake Electric Appliance Co., Ltd. to produce refrigerators; a $16 million majority interest in Whirlpool Narcissus (Shanghai) Co., Ltd. to produce washing machines; and a $5 million minority interest in Beijing Embraco Snowflake Compressor Co. Ltd. to produce compressors for refrigerators and air conditioners. The cash investments above include $9 million and $4 million to be paid in 1996 for the refrigerator and compressor joint ventures. Also, the Company plans to invest an additional $11 million in the washing machine joint venture in 1996 and 1997. -- page 33 -- -- Management's Discussion & Analysis -- In September 1994, the Company sold its minority interest in Matsushita Floor Care Company (MFCC), a joint venture which manufactures and markets vacuum cleaners in the North American market. The sale resulted in cash proceeds of $44 million and a pre-tax gain of $26 million. The after-tax gain was $18 million or $.24 per share. In April 1994, the Company sold its European compressor operation to one of the Company's Brazilian affiliates for $106 million. The Company received 75% of the selling price in cash at the closing date with the remainder paid in 1995. The sale resulted in a pre-tax gain of $34 million but no significant gain or loss after taxes. The European compressor operation contributed gross sales of $213 million, including third party sales of $127 million and pre-tax earnings of $10 million in 1993. In April 1994, the Company made an additional $3 million investment in TVS Whirlpool Limited to become the majority partner in this Indian joint venture. The Company plans to invest an additional $14 million in 1996 to increase its interest in the joint venture, renamed Whirlpool Washing Machines Limited in 1995. In February 1994, the Company made an additional $3 million investment in Whirlpool Tatramat to become the majority partner in this Slovakian joint venture and contributed $3 million for a minority interest in a joint venture with Teco Electric and Machinery Co., Ltd., to market and distribute appliances in Taiwan. In 1994, the Company began construction of a new $100 million cooking products facility in Tulsa, Oklahoma, to manufacture freestanding gas and electric ranges for the North American appliance market beginning in April 1996. In October 1993, the Company made an additional $26 million investment in Brastemp (now Multibras S.A.). In April 1993, as part of the Company's Latin America strategy, the Company's Argentine subsidiary sold additional voting stock, representing a 40% interest, to one of the Company's Brazilian affiliates for $7 million. In July 1993, the Company sold its refrigerator plant in Barcelona, Spain for $4 million, resulting in an $8 million pre-tax loss but no significant gain or loss after taxes. Financing Activities - -------------------- Dividends to shareholders totaled $100 million in 1995, $90 million in 1994 and $85 million in 1993. The Company's borrowings increased by $747 million in 1995, excluding the effect of currency translation and $50 million of borrowings assumed in acquisitions, primarily to fund property additions, origination of financing receivables and Asian acquisitions. In December 1994, the Company announced plans to repurchase up to five percent of the outstanding shares of common stock. The treasury shares will be used in employee stock-option, retirement and other compensation programs and for general corporate purposes. Through the end of December 1995, the Company had repurchased approximately 966,000 shares for $51 million. The Company reduced borrowings by $33 million in 1994 primarily due to the continued liquidation of WFC's commercial lending portfolio. The Company reduced borrowings by $583 million in 1993 due to strong operating cash flow and the liquidation of WFC's commercial lending portfolio. In 1993, WFC completed a $75 million sale of preferred stock in a move consistent with plans to broaden the subsidiary's equity base and position it as a more financially independent business entity. The proceeds were used to repay intercompany debt to the Company. Refer to Note 6 to the accompanying consolidated financial statements. In 1993, the Company called $125 million of 9 1/8% Sinking Fund Debentures and terminated $100 million of related interest rate swap agreements resulting in an immaterial gain on extinguishment. The Company also terminated $400 million of interest rate swap agreements designated as hedges of long-term debt resulting in a deferred gain of $51 million which is being amortized as a reduction in interest expense over the life of the related debt. In 1993, WFC initiated a commercial paper program which currently authorizes the issuance of up to $1.7 billion. The 1993 net proceeds of $790 million were used to repay intercompany debt to the Company. -- page 34 -- -- Financial Condition and Other Matters -- The financial position of the Company remains strong as evidenced by the December 31, 1995 balance sheet. The Company's total assets are $7.8 billion and stockholders' equity is $1.9 billion. The overall debt to invested capital ratio at December 31, 1995 increased compared to December 31, 1994. The appliance business debt to invested capital ratio net of cash ("debt ratio") increased from 34% to 43% due primarily to increased borrowing as discussed in Cash Flows - Financing Activities. As of December 31, 1995, convertible notes with principal amounts of $371 million had been converted into 2.7 million shares of the Company's common stock. The debt ratio is also affected by European currency movements due to a combination of foreign borrowings and the Company's hedging strategy related to European net assets. The 1995 financial services debt to invested capital ratio increased due to higher investment levels compared to the prior year. The Company's debt continues to be rated investment grade by Moody's Investors Service Inc., Standard and Poors and Duff & Phelps. Various European currency swaps and forward contracts serve as a hedge of net foreign currency cash flows and also hedge a portion of the Company's European net assets. Changes in the value of the swaps and forward contracts due to movements in exchange rates are included in the currency translation component of stockholders' equity if they relate to the European net asset hedge or otherwise in other income (expense). WFC's financing portfolio by business segment is as follows:
December 31 (millions of dollars) -- 1995 -- -- 1994 -- =============================================================== - --------------------------------------------------------------- Inventory $ 857 46% $ 652 41% Aerospace 411 22 465 29 Consumer 531 29 386 24 Commercial 7 -- 25 2 Other 52 3 55 4 =============================================================== $1,858 100% $1,583 100%
The aerospace portfolio is generally secured by newer (Stage III) aircraft on lease to various international airlines. Although the commercial airline industry seems to be stabilizing, the near-term outlook remains uncertain. Management believes the aerospace portfolio carrying value is appropriate. The Company is continuing to phase out of aerospace and highly leveraged commercial lending activities. The financial services industry is very competitive and various leasing companies, financial institutions and finance companies operate in the same markets as WFC. Refer to Notes 1 and 3 of the accompanying consolidated financial statements for a further description of WFC's business. WFC adopted Financial Accounting Standards Board Statement No. 114, "Accounting by Creditors for Impairment of a Loan," effective January 1, 1995. The new rules require WFC to measure impaired loans based on the present value of expected future cash flows discounted at the loan's effective interest rate. Adoption of the new rules did not have a material effect on the Company's net earnings or financial position. The Company has external sources of capital available and believes it has adequate financial resources and liquidity to meet anticipated business needs and to fund future growth opportunities such as new products, acquisitions and joint ventures. -- page 35 -- -- Management's Discussion & Analysis -- -- Business Unit Revenues and Operating Profit -- The following appliance business (WFC on an equity basis) data is presented as supplemental information: Net Sales by Business Unit were as follows:
(millions of dollars) -- 1995 -- -- 1994 -- Increase/(Decrease) ===================================================================== - --------------------------------------------------------------------- North America $5,093 $5,048 $ 45 1% Europe 2,428 2,373 55 2 Asia 376 205 171 83 Latin America 271 329 (58) (18) Other (5) (6) 1 -- ===================================================================== Total Appliance Business $8,163 $7,949 $214 3%
Operating Profit by Business Unit was as follows:
(millions of dollars) -- 1995 -- -- 1994 -- Increase/(Decrease) ===================================================================== - --------------------------------------------------------------------- North America $ 445 $ 522 $(77) (15)% Europe 92 163 (71) (44) Asia (50) (22) (28) (127) Latin America 26 49 (23) (47) Restructuring -- (248) 248 -- Business Dispositions -- 60 (60) -- Other (147) (154) 7 5 ===================================================================== Total Appliance Business $ 366 $ 370 $ (4) (1)%
The 1994 restructuring relates to North America and Europe (refer to Note 10 to the accompanying consolidated financial statements). Other primarily includes corporate costs and intercompany eliminations. For commentary regarding performance in North America and Europe, refer to Results of Operations. Asia had significant shipment and sales growth compared to the prior year but increased its operating loss in 1995 due primarily to planned costs related to the Company's strategy to expand its presence in Asia. In addition, Asia experienced down turns in Hong Kong and other specific markets and incurred additional spending in India to improve future operating efficiencies. Latin America includes Whirlpool Argentina and the South American Sales Company (SASCO). Whirlpool Argentina results were adversely affected by a sharp decline in appliance industry volumes, driven primarily by a faltering economy and very tight credit. SASCO's results were also down due to deteriorating economic conditions and distribution issues in several key markets. -- page 36 -- 1995 CONSOLIDATED STATEMENTS OF EARNINGS
Whirlpool Corporation (Consolidated) Year ended December 31 ______________________________________ (millions of dollars except per share data) -- 1995 -- -- 1994 -- -- 1993 -- ========================================================================================= - ----------------------------------------------------------------------------------------- Revenues - -------- Net sales $8,163 $7,949 $7,368 Financial services 184 155 165 - ----------------------------------------------------------------------------------------- 8,347 8,104 7,533 Expenses - -------- Cost of products sold 6,245 5,952 5,503 Selling and administrative 1,609 1,490 1,433 Financial services interest 66 51 59 Intangible amortization 31 24 25 Gain on dispositions -- (60) -- Restructuring costs -- 250 31 - ----------------------------------------------------------------------------------------- 7,951 7,707 7,051 Operating Profit (Loss) 396 397 482 ----------------------- Other Income (Expense) - ---------------------- Interest and sundry (13) 9 6 Interest expense (141) (114) (113) - ----------------------------------------------------------------------------------------- Earnings (Loss) Before Income Taxes, Other Items and Accounting Change 242 292 375 Income taxes 100 176 148 - ----------------------------------------------------------------------------------------- Earnings (Loss) Before Equity Earnings, Minority Interests and Accounting Change 142 116 227 Equity in WFC -- -- -- Equity in affiliated companies 72 59 16 Minority interests (5) (17) (12) - ----------------------------------------------------------------------------------------- Net Earnings (Loss) Before Cumulative Effect of Accounting Change 209 158 231 Cumulative effect of accounting change for postretirement benefits -- -- (180) ========================================================================================= Net Earnings (Loss) $ 209 $ 158 $ 51 - ----------------------------------------------------------------------------------------- Per share of common stock: Primary earnings before accounting change $ 2.80 $ 2.10 $ 3.19 Primary earnings $ 2.80 $ 2.10 $ 0.67 Fully diluted earnings before accounting change $ 2.76 $ 2.09 $ 3.11 Fully diluted earnings $ 2.76 $ 2.09 $ 0.67 Cash dividends $ 1.36 $ 1.22 $ 1.19 Average number of common shares outstanding (millions) 74.8 75.5 72.3
Supplemental Consolidating Data Whirlpool with WFC on an Equity Basis Whirlpool Financial Corporation (WFC) Year ended December 31 ______________________________________ ______________________________________ (millions of dollars except per share data) -- 1995 -- -- 1994 -- -- 1993 -- -- 1995 -- -- 1994 -- -- 1993 -- =================================================================================================================================== - ----------------------------------------------------------------------------------------------------------------------------------- Revenues - -------- Net sales $8,163 $7,949 $7,368 $ -- $ -- $ -- Financial services -- -- -- 219 184 193 - ----------------------------------------------------------------------------------------------------------------------------------- 8,163 7,949 7,368 219 184 193 Expenses - -------- Cost of products sold 6,245 5,952 5,503 -- -- -- Selling and administrative 1,521 1,415 1,305 123 104 155 Financial services interest -- -- -- 79 63 72 Intangible amortization 31 24 25 -- -- -- Gain on dispositions -- (60) -- -- -- -- Restructuring costs -- 248 31 -- 2 -- - ----------------------------------------------------------------------------------------------------------------------------------- 7,797 7,579 6,864 202 169 227 Operating Profit (Loss) 366 370 504 17 15 (34) ----------------------- Other Income (Expense) - ---------------------- Interest and sundry (23) 3 19 11 8 (9) Interest expense (129) (104) (105) -- -- -- - ----------------------------------------------------------------------------------------------------------------------------------- Earnings (Loss) Before Income Taxes, Other Items and Accounting Change 214 269 418 28 23 (43) Income taxes 90 169 167 10 7 (19) - ----------------------------------------------------------------------------------------------------------------------------------- Earnings (Loss) Before Equity Earnings, Minority Interests and Accounting Change 124 100 251 18 16 (24) Equity in WFC 14 11 (28) -- -- -- Equity in affiliated companies 72 59 16 -- -- -- Minority interests (1) (12) (10) (4) (5) (2) - ----------------------------------------------------------------------------------------------------------------------------------- Net Earnings (Loss) Before Cumulative Effect of Accounting Change 209 158 229 14 11 (26) Cumulative effect of accounting change for postretirement benefits -- -- (178) -- -- (2) =================================================================================================================================== Net Earnings (Loss) $ 209 $ 158 $ 51 $ 14 $ 11 $ (28) - -----------------------------------------------------------------------------------------------------------------------------------
See notes to consolidated financial statements -- page 37 -- 1995 CONSOLIDATED BALANCE SHEETS
Supplemental Consolidating Data Whirlpool Corporation Whirlpool with WFC Whirlpool Financial (Consolidated) on an Equity Basis Corporation (WFC) --------------------------------------------------------------------------- December 31 (millions of dollars) -- 1995 -- -- 1994 -- -- 1995 -- -- 1994 -- -- 1995 -- -- 1994 -- ASSETS Current Assets Cash and equivalents $ 149 $ 72 $ 125 $ 51 $ 24 $ 21 Trade receivables, less allowances of $39 in 1995 and $38 in 1994 1,031 1,001 1,031 1,001 -- -- Financing receivables and leases, less allowances 1,086 866 -- -- 1,086 866 Inventories 1,029 838 1,029 838 -- -- Prepaid expenses and other 152 197 141 183 11 14 Deferred income taxes 94 104 94 104 -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Total Current Assets 3,541 3,078 2,420 2,177 1,121 901 Other Assets Investment in affiliated companies 425 370 425 370 -- Investment in WFC -- -- 269 253 -- -- Financing receivables and leases, less allowances 772 717 -- -- 772 717 Intangibles, net 931 730 931 730 -- -- Deferred income taxes 153 171 153 171 -- -- Other 199 149 199 149 -- -- - ------------------------------------------------------------------------------------------------------------------------------------ 2,480 2,137 1,977 1,673 772 717 Property, Plant and Equipment Land 97 73 97 73 -- -- Buildings 710 610 710 610 -- -- Machinery and equipment 2,855 2,418 2,831 2,392 24 26 Accumulated depreciation (1,883) (1,661) (1,867) (1,645) (16) (16) - ------------------------------------------------------------------------------------------------------------------------------------ 1,779 1,440 1,771 1,430 8 10 ==================================================================================================================================== Total Assets $ 7,800 $ 6,655 $ 6,168 $ 5,280 $1,901 $1,628
-- page 38 --
Supplemental Consolidating Data Whirlpool Corporation Whirlpool with WFC Whirlpool Financial (Consolidated) on an Equity Basis Corporation (WFC) --------------------------------------------------------------------------- December 31 (millions of dollars) -- 1995 -- -- 1994 -- -- 1995 -- -- 1994 -- -- 1995 -- -- 1994 -- - ------------------------------------------------------------------------------------------------------------------------------------ LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Notes payable $1,939 $1,162 $ 709 $ 226 $1,230 $ 936 Accounts payable 977 843 896 795 81 48 Employee compensation 232 201 222 192 10 9 Accrued expenses 552 629 552 620 -- 9 Restructuring costs 70 114 70 112 -- 2 Current maturities of long-term debt 59 39 56 36 3 3 - ------------------------------------------------------------------------------------------------------------------------------------ Total Current Liabilities 3,829 2,988 2,505 1,981 1,324 1,007 Other Liabilities Deferred income taxes 234 221 114 110 120 111 Postemployment benefits 517 481 517 481 -- -- Other liabilities 181 262 181 262 -- -- Long-term debt 983 885 870 703 113 182 - ------------------------------------------------------------------------------------------------------------------------------------ 1,915 1,849 1,682 1,556 233 293 Minority Interests 179 95 104 20 75 75 Stockholders' Equity Common stock, $1 par value: 250 million shares authorized, 81 million and 80 million shares issued in 1995 and 1994 81 80 81 80 8 8 Paid-in capital 229 214 229 214 26 26 Retained earnings 1,863 1,754 1,863 1,754 234 220 Unearned restricted stock (8) (8) (8) (8) -- -- Cumulative translation adjustments (53) (93) (53) (93) 1 (1) Treasury stock -- 6 million shares at cost in 1995 and 1994 (235) (224) (235) (224) -- -- - ------------------------------------------------------------------------------------------------------------------------------------ 1,877 1,723 1,877 1,723 269 253 ==================================================================================================================================== Total Liabilities and Stockholders' Equity $7,800 $6,655 $6,168 $5,280 $1,901 $1,628
See notes to consolidated financial statements -- page 39 -- 1995 CONSOLIDATED STATEMENTS OF CASH FLOWS
Supplemental Consolidating Data Whirlpool Corporation Whirlpool with WFC Whirlpool Financial (Consolidated) on an Equity Basis Corporation (WFC) ---------------------------------------------------------------------------------------------------- Year ended December 31 (millions of dollars) -- 1995 -- -- 1994 -- -- 1993 -- -- 1995 -- -- 1994 -- -- 1993 -- 1995 -- 1994 --1993 -- ================================================================================================================================= Operating Activities - -------------------- Net earnings (loss) before cumulative effect of accounting change $ 209 $ 158 $ 231 $ 209 $ 158 $ 229 $ 14 $ 11 $ (26) Depreciation 282 272 263 253 243 239 29 29 24 Deferred income taxes 44 (28) (31) 35 (39) (27) 9 11 (4) Equity in net earnings of affiliated companies, less dividends received (58) (57) (14) (58) (57) (14) -- -- -- Equity in net loss (earnings) of WFC -- -- -- (14) (11) 28 -- -- -- (Gain) loss on business dispositions -- (60) 8 -- (60) 8 -- -- -- Provision for doubtful accounts 43 28 75 9 6 8 34 22 67 Amortization of goodwill 30 20 28 30 20 28 -- -- -- Restructuring charges, net of cash paid (119) 197 10 (117) 195 19 (2) 2 (9) Minority interests 1 12 10 1 12 10 -- -- -- Other (19) (1) 21 (19) 7 23 -- (8) (2) Changes in assets and liabilities, net of effects of business acquisitions and dispositions: Trade receivables 23 (125) (76) 23 (125) (75) -- -- -- Inventories (111) (72) (145) (111) (72) (145) -- -- -- Accounts payable 70 107 101 65 105 89 5 2 12 Other -- net (18) (2) 148 -- (2) 146 (18) -- 9 ================================================================================================================================= Cash Provided by Operating Activities $ 377 $ 449 $ 629 $ 306 $ 380 $ 566 $ 71 $ 69 $ 71
-- page 40 --
Supplemental Consolidating Data Year ended December 31 Whirlpool Corporation Whirlpool with WFC on (millions of dollars) (Consolidated) an Equity Basis Whirlpool Financial Corporation (WFC) --------------------------------------------------------------------------------------------------- --1995-- --1994-- --1993-- --1995-- --1994 --1993-- --1995-- --1994-- --1993-- ================================================================================================================================= - --------------------------------------------------------------------------------------------------------------------------------- Investing Activities - --------------------------- Net additions to properties $ (483) $ (418) $ (309) $ (477) $ (416) $ (307) $ (6) $ (2) $ (2) Financing receivables originated and leasing assets purchased (3,646) (3,051) (2,603) -- -- -- (3,646) (3,051) (2,603) Principal payments received on financing receivables and leases 3,357 3,068 2,888 -- -- -- 3,357 3,068 2,888 Acquisitions of businesses, less cash acquired (157) (28) -- (157) (28) -- -- -- -- Net increase in investment in and advances to affiliated companies (40) -- (19) (40) -- (19) -- -- -- Business dispositions 26 124 4 26 124 4 -- -- -- Other 8 (34) (57) -- (9) -- 8 (25) (63) - ------------------------------------------------------------------------------------------------------------------------------ Cash Provided by (Used for) Investing Activities (935) (339) (96) (648) (329) (322) (287) (10) 220 - --------------------------- Financing Activities - --------------------------- Proceeds of short-term borrowings 16,493 12,727 12,049 7,237 4,344 9,586 9,256 8,383 3,424 Repayments of short-term borrowings (15,744) (12,585) (12,465) (6,768) (4,255) (9,785) (8,976) (8,330) (3,641) Proceeds of long-term debt 130 42 32 130 129 145 -- -- -- Repayments of long-term debt (121) (206) (173) (72) (206) (159) (49) (87) (127) Repayments of non-recourse debt (10) (11) (26) -- -- -- (10) (11) (26) Dividends (100) (90) (85) (100) (90) (85) -- -- -- Purchase of treasury stock (35) (16) -- (35) (16) -- -- -- -- Proceeds from the sale of preferred stock -- -- 75 -- -- -- -- -- 75 Swap terminations -- -- 56 -- -- 56 -- -- -- Other 22 13 26 24 13 27 (2) -- (3) - ------------------------------------------------------------------------------------------------------------------------------ Cash Provided by (Used for) Financing Activities 635 (126) (511) 416 (81) (215) 219 (45) (298) - --------------------------- - ------------------------------------------------------------------------------------------------------------------------------ Increase (Decrease) in Cash and Equivalents 77 (16) 22 74 (30) 29 3 14 (7) - --------------------------- Cash and equivalents at beginning of year 72 88 66 51 81 52 21 7 14 ============================================================================================================================== Cash and Equivalents at End of Year $ 149 $ 72 $ 88 $ 125 $ 51 $ 81 $ 24 $ 21 $ 7
See notes to consolidated financial statements -- page 41 -- 1995 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (1) SUMMARY OF PRINCIPAL ACCOUNTING POLICIES Nature of Operations: Whirlpool is the world's leading manufacturer and marketer of major home appliances. The Company manufactures in 12 countries on four continents and markets products to distributors and retailers in 140 countries. Whirlpool Financial Corporation (WFC), a consolidated subsidiary, provides diversified financial services to businesses and consumers in the Americas and Europe. Financial products include inventory financing services for retailers and distributors that market products manufactured by the Company and various other manufacturers and consumer financing services for retail sales by retailers. Principles of Consolidation: The consolidated financial statements include all majority-owned subsidiaries. Investments in affiliated companies are accounted for by the equity method. Intercompany transactions and amounts between Whirlpool Corporation and WFC included in the supplemental consolidating data have been eliminated in the consolidated financial statements. The eliminations relate primarily to intercompany financing, interest and leasing transactions. Use of Estimates: Management is required to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Revenue Recognition: Sales are recorded when product is shipped to distributors or directly to retailers. Refer also to Financing Receivables and Leases. Cash and Equivalents: All highly liquid debt instruments purchased with a maturity of three months or less are considered cash equivalents. Inventories: Inventories are stated at first-in, first-out (FIFO) cost, except U.S. production inventories which are stated at last-in, first-out (LIFO) cost. Costs do not exceed realizable values. Property, Plant and Equipment: Property, plant and equipment are stated at cost. Depreciation of plant and equipment is computed using the straight-line method based on the estimated useful lives of the assets. Intangibles: The cost of business acquisitions in excess of net tangible assets acquired is amortized on a straight-line basis principally over 40 years. Non-compete agreements are amortized on a straight-line basis over the terms of the agreements. Accumulated amortization aggregated $162 million at December 31, 1995 and $124 million at December 31, 1994. On an annual basis, the Company evaluates recorded goodwill for potential impairment against the current and estimated undiscounted future operating income before goodwill amortization of the businesses to which the goodwill relates. Research and Development Costs: Research and development costs are charged to expense as incurred. Such costs were approximately $180 million in 1995, $152 million in 1994 and $128 million in 1993. Advertising Costs: Advertising costs are charged to expense as incurred. Such costs were approximately $126 million in 1995, $140 million in 1994 and $128 million in 1993. Financing Receivables and Leases: Interest and discount charges are recognized in revenues using the effective yield method. Lease income is recorded in decreasing amounts over the term of the lease contract, resulting in a level rate of return on the net investment in the lease. Origination fees and related costs are deferred and amortized as yield adjustments over the life of the related receivable or lease. The allowance for losses is maintained at estimated amounts necessary to cover losses on all finance and leasing receivables based on management's assessment of various factors including loss experience and review of problem accounts. WFC adopted Financial Accounting Standards Board Statement No. 114, "Accounting by Creditors for Impairment of a Loan," effective January 1, 1995. The new rules require WFC to measure impaired loans based on the present value of expected future cash flows discounted at the loans' effective interest rate. Evaluation for impairment is performed as part of the portfolio management review process. Income is recognized in the same manner as it is on accruing receivables. These standards do not apply to leasing transactions or large groups of smaller homogeneous finance receivables. Adoption of the new rules did not have a material effect on the Company's net earnings or financial position. The Company adopted Financial Accounting Standards Board Statement No. 115, "Accounting for Certain Investments in Debt and Equity Securities," effective January 1, 1994. The new rules require that certain investments in marketable equity securities and many debt securities be presented at fair value. Adoption of the new rules had no material effect on the Company's net earnings or financial position. -- page 42 -- (1) SUMMARY OF PRINCIPAL ACCOUNTING POLICIES CONTINUED Derivative Financial Instruments: The Company uses derivative financial instruments to diminish the economic impact of market risks from fluctuations in interest rates, foreign currency exchange rates and commodity prices. To achieve this, the Company enters into interest rate and cross currency interest rate swaps, foreign currency forward contracts and option collars, and commodity swaps. The Company's hedging strategy for the foreign currency exchange risk associated with its investment in Europe is based on projected foreign currency cash flows over periods up to ten years. The Company uses foreign currency forward contracts and interest rate and cross currency interest rate swaps to effectively convert a portion of the Company's U.S. dollar denominated debt into various European currencies. The Company's investment in Europe and the foreign currency portion of these contracts and swaps are revalued in dollar terms each period to reflect current foreign currency exchange rates with gains and losses recorded in the equity section of the balance sheet. To the extent that the notional amounts of these contracts exceed the Company's investment in Europe, the related mark-to-market gains and losses are reflected currently in earnings. The net translation gain (loss) recognized in other income, including the gains and losses from those contracts not qualifying as hedges, was $(16) million, $(3) million and $5 million in 1995, 1994 and 1993. The amounts receivable from or payable to counterparties to the swaps, offsetting the gains and losses recorded in equity or earnings, are recorded in long-term debt. The interest component of the swaps, which overlay a portion of the Company's interest payments on outstanding debt, are not carried at fair value in the financial statements. The interest differential paid or received is recognized as an adjustment to interest expense. Gains and losses on the interest component of terminated swaps are deferred in noncurrent liabilities and amortized as an adjustment to interest expense over the remaining term of the original swap. In the event of early extinguishment of debt, any realized or unrealized gains or losses from related swaps would be recognized in income concurrent with the extinguishment. Any swap or portion of a swap not overlaying debt is recorded at fair value with periodic changes in fair value recorded in income. The Company also uses foreign currency forward contracts to hedge payments due on cross currency interest rate swaps and intercompany loans and, along with foreign currency option collars, to hedge material purchases, intercompany shipments and other commitments. In addition, the Company hedges a portion of its contractual requirements of certain commodities with commodity swaps. These contracts are not carried at fair value in the financial statements as the related gains and losses are recognized in the same period and classified in the same manner as the underlying transactions. Any gains and losses on terminated contracts are deferred in current liabilities until the underlying transactions occur. WFC enters into interest rate swaps to match certain assets and liabilities in terms of duration and pricing frequency to manage margins on its financing transactions. The WFC swaps are accounted for the same as those related to the interest component of European investment hedge swaps with the interest differential paid or received recognized as an adjustment to interest expense. The Company deals only with investment grade counterparties to these contracts and monitors its overall credit risk and exposure to individual counterparties. The Company does not anticipate nonperformance by any counterparties. The amount of the exposure is generally the unrealized gains in such contracts. The Company does not require, nor does it post, collateral or security on such contracts. Net Earnings Per Common Share: Net earnings per common share are based on the average number of shares of common stock and common stock equivalents outstanding during each year. Primary per share amounts assume, if dilutive, the exercise of stock options and vesting of restricted stock using the treasury stock method. Fully dilutive per share amounts also assume the conversion of the 7% subordinated convertible notes. (2) BUSINESS ACQUISITIONS AND DISPOSITIONS During 1995, the Company expanded its presence in Asia by acquiring controlling interests in three existing manufacturing companies and establishing three new joint ventures. In November 1995, the Company acquired a majority interest in Raybo Air Conditioner Manufacturing Company, a Chinese manufacturer and marketer of air conditioners, for about $22 million in cash. Raybo annual sales were about $20 million for its fiscal year 1994. -- page 43 -- -- Notes to Consolidated Financial Statements -- (2) BUSINESS ACQUISITIONS AND DISPOSITIONS CONTINUED In May 1995, the Company acquired a majority interest in Shunde SMC Microwave Products Co., Ltd. (SMC), a Chinese manufacturer and marketer of microwave ovens, for about $90 million in cash. SMC annual sales were about $100 million for its fiscal year 1994. In February 1995, the Company acquired a majority interest in Kelvinator of India, Ltd. (KOI), a manufacturer and marketer of refrigerators, for about $116 million in cash funded principally in 1995. As the transaction involved an issue of new KOI shares, most of the purchase price was invested as equity in KOI in support of planned plant and product line expansion. KOI annual sales were about $120 million for its fiscal year 1994. The Company's new Chinese joint ventures include a $17 million majority interest in Beijing Whirlpool Snowflake Electric Appliance Co., Ltd. to produce refrigerators; a $16 million majority interest in Whirlpool Narcissus (Shanghai) Co., Ltd. to produce washing machines; and a $5 million minority interest in Beijing Embraco Snowflake Compressor Co. Ltd. to produce compressors for refrigerators and air conditioners. In September 1994, the Company sold its minority interest in Matsushita Floor Care Company (MFCC), a joint venture which manufactures and markets vacuum cleaners in the North American market. The sale resulted in cash proceeds of $44 million and a pre-tax gain of $26 million. The after-tax gain was $18 million or $.24 per share. In April 1994, the Company sold its European compressor operation to one of the Company's Brazilian affiliates for $106 million. The Company received 75% of the selling price in cash at the closing date with the remainder received in 1995. The sale resulted in a pre-tax gain of $34 million but no significant gain or loss after taxes. The European compressor operation contributed gross sales of $213 million, including third party sales of $127 million and pre-tax earnings of $10 million in 1993. In April 1994, the Company made an additional $3 million investment in TVS Whirlpool Limited to become the majority partner in this Indian joint venture, renamed Whirlpool Washing Machines Limited in 1995. The Company plans to invest an additional $14 million in 1996 to increase its interest in the joint venture. In February 1994, the Company made an additional $3 million investment in Whirlpool Tatramat to become the majority partner in this Slovakian joint venture and contributed $3 million for a minority interest in a joint venture with Teco Electric and Machinery Co., Ltd., to market and distribute appliances in Taiwan. In October 1993, the Company made an additional $26 million investment in Brastemp (now Multibras S.A.). In April 1993, as part of the Company's Latin America strategy, the Company's Argentine subsidiary sold additional voting stock, representing a 40% interest, to one of the Company's Brazilian affiliates for $7 million. In July 1993, the Company sold its refrigerator plant in Barcelona, Spain for $4 million, resulting in an $8 million pre-tax loss but no significant gain or loss after taxes. Pro forma consolidated operating results reflecting these acquisitions and dispositions would not have been materially different from reported amounts. The acquisitions have been accounted for as purchases and their operating results have been consolidated with the Company's results since the date of acquisition. (3) FINANCING RECEIVABLES AND LEASES
December 31 (millions of dollars) -- 1995 -- -- 1994 -- ========================================================================= Financing receivables $1,569 $1,251 Leveraged leases 103 107 Direct financing leases 3 11 Other operating leases and investments 197 227 - -------------------------------------------------------------------------- 1,872 1,596 Unearned income (52) (53) Estimated residual value 80 86 Allowances for doubtful accounts (42) (46) - -------------------------------------------------------------------------- Total financing receivables and leases 1,858 1,583 Less current portion 1,086 866 ========================================================================== Long-term portion $ 772 $ 717
-- page 44 -- (3) FINANCING RECEIVABLES AND LEASES CONTINUED Deferred income tax liabilities relating to leveraged and direct financing leases were $118 million at December 31, 1995 and $113 million at December 31, 1994. Financing receivables and leases at December 31, 1995 include $750 million due from household appliance and electronics dealers and $411 million resulting from aerospace financing transactions. These amounts are generally secured by the assets financed. Non-earning finance receivables and operating leases totaled $41 million at December 31, 1995 and $50 million at December 31, 1994. Net losses on financing receivables and leases were $39 million in 1995, $25 million in 1994 and $56 million in 1993. Financing receivables of $112 million are considered impaired under Financial Accounting Standards Board Statement No. 114, "Accounting by Creditors for Impairment of a Loan" at December 31, 1995 and during 1995. Specific allowances for losses on these receivables total $19 million at December 31, 1995. WFC recognized $12 million of interest income in 1995 on these receivables. Financing receivables and minimum lease payments receivable at December 31, 1995 mature contractually as follows:
Leveraged and Direct Financing Financing (millions of dollars) Receivables Leases ====================================================================== - ---------------------------------------------------------------------- 1996 $1,105 $ 3 1997 291 3 1998 134 3 1999 13 2 2000 2 2 Thereafter 24 93 ====================================================================== $1,569 $106
(4) INVENTORIES
December 31 (millions of dollars) -- 1995 -- -- 1994 -- ====================================================================== - ---------------------------------------------------------------------- Finished products $ 984 $ 832 Work in process 84 66 Raw materials 194 156 - ---------------------------------------------------------------------- Total FIFO cost 1,262 1,054 Less excess of FIFO cost over LIFO cost 233 216 ====================================================================== $1,029 $ 838
LIFO inventories represent approximately 41% and 52% of total inventories at December 31, 1995 and 1994. (5) AFFILIATED COMPANIES The Company has direct voting interests, ranging from 30% to 49%, in two Brazilian companies (Multibras S.A., and Embraco S.A.), a Mexican company (Vitromatic, S.A. de C.V.) and several other international companies principally engaged in the manufacture and sale of major home appliances or related component parts. Equity in the net earnings (losses) of affiliated companies, net of related taxes, is as follows:
(millions of dollars) -- 1995 -- -- 1994 -- -- 1993 -- ========================================================================== - -------------------------------------------------------------------------- Brazilian affiliates $70 $39 $21 Mexican affiliate -- 16 (6) Other 2 4 1 ========================================================================== Total equity earnings $72 $59 $16
-- page 45 -- -- Notes to Consolidated Financial Statements -- (5) AFFLIATED COMPANIES CONTINUED Combined condensed financial information for all affiliated operating companies follows:
December 31 (millions of dollars) -- 1995 -- -- 1994 -- - ----------------------------------------------------------------------- Current assets $1,044 $ 672 Other assets 991 954 - ----------------------------------------------------------------------- $2,035 $1,626 Current liabilities $ 673 $ 524 Other liabilities 321 213 Stockholders' equity 1,041 889 - ----------------------------------------------------------------------- $ 2,035 $1,626
(millions of dollars) -- 1995 -- -- 1994 -- -- 1993 -- - ---------------------------------------------------------------- Net sales $2,772 $2,051 $2,062 Cost of products sold $2,122 $1,441 $1,446 Net earnings $ 192 $ 173 $ 90 Dividends and fees paid to Whirlpool by affiliates $ 20 $ 16 $ 9
(6) FINANCING ARRANGEMENTS After finalization of new credit arrangements in January 1996, the Company has unused credit lines of about $4.2 billion, including a $1.2 billion multiple option facility expiring in 2001 and about $3.0 billion in various other lines expiring in 1997. There are no formal compensating balances required with the credit line banks. Generally, the banks are compensated for their credit lines by a fee. Notes payable consist of the following:
December 31 (millions of dollars) -- 1995 -- -- 1994 -- - ----------------------------------------------------------------------- Payable to banks $ 103 $ 64 Commercial paper 1,778 1,094 Other 58 4 - --------------------------------------------------------------------- $1,939 $1,162
The weighted average interest rate on notes payable was 6.17% and 5.98% at December 31, 1995 and 1994. During 1993, the Company called $125 million of 9 1/8% Sinking Fund Debentures and terminated $100 million of related interest rate swap agreements resulting in an immaterial gain on extinguishment. During 1993, WFC issued 750,000 shares (400,000 shares Series A and 350,000 shares Series B) of preferred stock at a face value of $100 per share. Dividends on the Series A and Series B Redeemable Cumulative Preferred Stock are payable quarterly in an amount equal to $5.55 and $6.55, respectively, per share per year. The Series A Preferred Stock is subject to mandatory redemption on September 1, 1998. The Series B Preferred Stock is not redeemable prior to September 1, 2003 at which time it is redeemable at the option of WFC with all remaining outstanding shares redeemed on September 1, 2008. The redemption price for each series is $100 per share plus any accrued and unpaid dividends. Commencing September 1, 2003, WFC will be obligated to pay $1,750,000 per year to a sinking fund for the benefit of holders of the Series B Preferred Stock, with a final payment of $26,250,000 due on or before September 1, 2008. The Company and WFC are parties to a support agreement. Pursuant to the agreement, if at the close of any fiscal quarter WFC's net earnings available for fixed charges (as defined) for the preceding twelve months is less than a stipulated amount, the Company will make a cash payment to WFC equal to the insufficiency within 60 days of the end of the quarter. The support agreement may be terminated by either WFC or the Company upon 30 days notice provided that certain conditions are met. The Company has also agreed to maintain ownership of at least 70% of WFC's voting stock. -- page 46 -- (6) FINANCING ARRANGEMENTS CONTINUED During 1991, the Company sold $675 million in face amount of subordinated zero coupon convertible notes and received $170 million in gross proceeds. The notes were priced to yield 7% interest to maturity. Holders may convert each $1,000 face amount of the notes into 7.237 shares of common stock. Holders may also redeem the notes for the issuance price plus accrued original issue discount at the end of five, ten and fifteen years or upon a change in control of the Company as defined. The Company may, at its option, elect to pay the redemption price in any combination of cash and common stock, except upon a change in control, in which case the redemption price is payable in cash. The Company also has the right to call the notes at a price equal to their issuance price plus accrued original issue discount. At December 31, 1995, principal amounts of $371 million have been converted into 2.7 million shares of the Company's common stock. Long-term debt consists of the following:
Interest December 31 (millions of dollars) Maturity Rate -- 1995 -- -- 1994 -- ================================================================================ Debentures 2008 9.1% $ 125 $ 125 Senior notes 1996 to 2003 7.5 to 9.5 424 428 Medium term notes 1996 to 2004 7.5 to 9.1 72 100 Subordinated convertible notes 2011 7.0 105 99 Other 316 172 - -------------------------------------------------------------------------------- 1,042 924 Less current maturities 59 39 ================================================================================ $ 983 $ 885
Annual maturities of long-term debt are $59 million in 1996, $43 million in 1997, $49 million in 1998, $25 million in 1999 and $16 million in 2000. The Company paid interest on short-term and long-term debt totaling $232 million in 1995, $168 million in 1994 and $176 million in 1993. (7) FAIR VALUE OF FINANCIAL INSTRUMENTS The following methods and assumptions were used in estimating fair values of financial instruments: Cash and Equivalents and Notes Payable: The carrying amounts approximate fair values. Financing Receivables: The fair value is estimated using discounted cash flow analyses based on current interest rates being offered to borrowers of similar credit quality. In 1995 and 1994, the carrying amounts approximate fair values. Long-term Debt and WFC Preferred Stock: The fair values are estimated using discounted cash flow analyses based on incremental borrowing or dividend yield rates for similar types of borrowing or equity arrangements. The WFC preferred stock carrying amount approximates fair value. Derivative Financial Instruments: The fair values of interest rate swaps, cross currency interest rate swaps, foreign currency forward contracts and option collars and commodity swaps are based on quoted market prices. -- page 47 -- -- Notes to Consolidated Financial Statements -- (7) FAIR VALUE OF FINANCIAL INSTRUMENTS CONTINUED The carrying and fair values of financial instruments for which the fair value does not approximate the liability carrying value are as follow:
Carrying Fair Carrying Fair Value Value Value Value ---------------------------------- (millions of dollars) -- 1995 -- -- 1994 -- ====================================================================== Long-term debt (including current portion) $ 919 $1,021 $ 846 $ 874 Derivative financial instruments: Hedges of net investment in Europe including converted debt: Interest rate and cross currency interest rate swaps (notional amounts of $1,624 million and $1,118 million in 1995 and 1994) 123 210 75 171 Foreign currency forward contracts (notional amounts of $9 million and $377 million in 1995 and 1994) -- -- 3 3 Transaction hedges: Foreign currency forward contracts (notional amounts of $514 million and $447 million in 1995 and 1994) -- 3 -- 6 Foreign currency options (notional amounts of $149 million in 1995.) -- (4) -- -- Hedges with commodity swaps (notional amounts of $25 million and $5 million in 1995 and 1994) -- 1 -- (1) WFC interest rate and cross currency swaps (notional amounts of $33 million and $465 million in 1995 and 1994) -- 2 -- 1 ====================================================================== Total long-term debt $1,042 $1,233 $ 924 $1,054
At December 31, 1995, interest rate and cross currency interest rate swaps effectively convert $892 million of U.S. dollar denominated debt into European currency denominations ($501 million - German marks, $312 million - French francs, $29 million - Swiss francs and $50 million - British pounds). The swaps also effectively convert $529 million of fixed to floating rate debt and $518 million of floating to fixed rate debt. Floating rates received range from LIBOR less 0.9% to LIBOR, and floating rates paid range from local currency LIBOR to local currency LIBOR plus 4.15%. Fixed rates received range from 5.925% to 8.480%, and fixed rates paid range from 5.130% to 9.730%. The swaps mature within 1 to 11 years. At December 31, 1995, WFC interest rate swaps effectively convert $28 million of floating rate debt into fixed rate debt as well as converting $5 million of U.S. dollar denominated debt into Canadian currency denomination. Floating rates received are based on LIBOR or commercial paper rates, and fixed rates paid range from 8.565% to 9.310%. The WFC swaps mature within 1 to 5 years. Foreign currency forward contracts and option collars mature within one month to two years and involve principally European and North American currencies. Commodity swaps mature within 1 year and involve principally copper and other metal commodities. (8) STOCKHOLDERS' EQUITY In addition to its common stock, the Company has 10 million authorized shares of preferred stock (par value $1 per share), none of which is outstanding. Consolidated retained earnings at December 31, 1995 included $228 million of equity in undistributed net earnings of affiliated companies. The cumulative translation component of stockholders' equity represents the effect of translating net assets of the Company's international subsidiaries offset by related hedging activity net of tax. Conversion of notes, stock option transactions and restricted stock grants account for the changes in paid- in capital. One Preferred Stock Purchase Right ("Rights") is outstanding for each share of common stock. The Rights, which expire May 23, 1998, will become exercisable ten days after a person or group either becomes -- page 48 -- (8) STOCKHOLDERS' EQUITY CONTINUED the beneficial owner of 20% or more of the common stock or commences a tender or exchange offer that would result in such person or group beneficially owning 25% or more of the outstanding common stock. Each Right entitles the holder to purchase from the Company one newly-issued unit consisting of one one-hundredth of a share of Series A Participating Cumulative Preferred Stock at an exercise price of $100, subject to adjustment. If (i) any person or group becomes the beneficial owner of 25% or more of Whirlpool common stock, or (ii) the Company is the surviving corporation in a merger with a 20% or more stockholder and its common stock is not changed or converted, or (iii) a 20% or more stockholder engages in certain self-dealing transactions with the Company, then each Right not owned by such person will entitle the holder to purchase, at the Rights' then current exercise price, shares of the Company's common stock having a value of twice the Rights' then current exercise price. In addition, if the Company is involved in a merger in which its common stock is converted or sells 50% or more of its assets, each Right will entitle its holder to purchase for the exercise price shares of common stock of the acquiring successor company having a value of twice the Rights' then current exercise price. The Company will be entitled to redeem the Rights in whole, but not in part, at $.05 per Right at any time prior to the expiration of a ten-day period (subject to extension) following public announcement of the existence of a 20% holder or of a 25% or more tender offer. Until such time as the Rights become exercisable, the Rights have no voting or dividend privileges and are attached to, and do not trade separately from, the common stock. At December 31, 1995, one million preferred shares were reserved for future exercise of Stock Purchase Rights. (9) STOCK OPTION AND INCENTIVE PLANS The Company's stock option and incentive plan permits the grant of stock options and other stock awards covering up to 5.4 million shares to key employees of the Company and its subsidiaries. The plan authorizes the grant of both incentive and non-qualified stock options and, further, authorizes the grant of stock appreciation rights and related supplemental cash payments independently of or with respect to options granted or outstanding. An Executive Stock Appreciation and Performance Program ("ESAP"), a Restricted Stock Value Program ("RSVP") and a Career Stock Program ("CSP") have been established under the plan. Performance awards under ESAP and RSVP are earned over multi-year time periods upon the achievement of certain performance objectives or upon a change in control of the Company. CSP awards are earned at specified dates during a participant's career with the Company or upon change in control of the Company. ESAP awards are payable in cash, common stock, or a combination thereof when earned. RSVP grants restricted shares which may not be sold, transferred or encumbered until the restrictions lapse. CSP grants phantom stock awards which are redeemable for shares of the Company's common stock upon the recipient's retirement after attaining age 60 and subject to certain non-competition provisions. There were 1,010,600 and 453,000 restricted shares outstanding at December 31, 1995 and 1994. Expenses under the plan were $4 million in 1995, $5 million in 1994 and $17 million in 1993. In 1996, the Company plans to seek shareholder approval for a follow-on to the existing stock option and incentive plan that will permit the grant of stock options and other awards covering up to an additional 4 million shares to key employees of the Company, its subsidiaries and certain affiliates. Under the Nonemployee Director Stock Ownership Plan, each nonemployee director is automatically granted 400 shares of common stock annually and is eligible for a stock option grant of 600 shares if the Company's earnings meet a prescribed earnings formula. This plan provides for the grant of up to 200,000 shares as either stock or stock options. There were no significant expenses under this plan for 1995, 1994 or 1993. The Company maintains an employee stock option plan ("Partner Share") that grants substantially all full-time U.S. employees a fixed number of stock options that vest over a three year period and may be exercised over a ten year period. Partner Share authorizes the grant of up to 2.5 million shares. The initial grant of 2,304,000 shares during 1991 was at an exercise price of $37.50. There have been no additional grants. -- page 49 -- -- Notes to Consolidated Financial Statements -- (9) STOCK OPTION AND INCENTIVE PLANS CONTINUED Stock option and incentive plans are accounted for in accordance with Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees" and related Interpretations. Generally, no compensation expense is recognized for stock options with exercise prices equal to the market value of the underlying shares of stock at the date of grant. Compensation expense is recognized for ESAP, RSVP and CSP awards based on the market value of the underlying shares of stock when the number of shares is determinable in the vesting periods. A summary of stock option information follows:
Number Average Number Average of Shares Option Price of Shares Option Price ------------------------------------------------ (thousands of shares) -- 1995 -- -- 1994 -- =============================================================================== Outstanding at January 1 3,214 $39.96 3,196 $36.61 Granted 723 55.75 553 55.32 Exercised (427) 32.65 (432) 33.28 Canceled or expired (113) 47.62 (103) 46.34 ----- ----- Outstanding at December 31 3,397 $43.99 3,214 $39.96 Exercisable at December 31 2,307 $38.60 2,323 $35.18 Available for future grant at December 31 820 1,647
(10) RESTRUCTURING COSTS Restructuring costs consist of the following:
December 31 (millions of dollars) -- 1994 -- -- 1993 -- =============================================================================== Cash costs: Employee severance and related payments $176 $ 10 Payments to terminated independent distributors -- 13 Lease termination, facility disposition and other costs 34 -- - ------------------------------------------------------------------------------- Total cash costs 210 23 Non-cash costs: Loss on disposal of facilities and equipment 20 8 Other asset write-downs 20 -- - ------------------------------------------------------------------------------- Total non-cash costs 40 8 =============================================================================== $250 $ 31
In 1994, restructuring costs relate to the consolidation and reorganization of the Company's European sales, marketing and support functions to better serve dealers by trade channel rather than by country, the closure of two North American manufacturing facilities and the further consolidation and rationalization of North American operations. The Company made payments of $137 million in 1995 and 1994 related to severance of about 2,800 employees and other costs. The remaining cash costs of the restructuring will be paid primarily in 1996 and include the elimination of an additional 600 employee positions. Pre- tax charges of $173 million, $72 million and $5 million relate to the Company's European, North American and WFC/Corporate operations. Total 1994 after-tax charges were $192 million or $2.54 per share. In 1993, restructuring costs relate to the consolidation of operations in Europe and Canada and the termination of independent distributor agreements in North America. Total 1993 after-tax charges were $14 million or $.19 per share. -- page 50 -- (11) INCOME TAXES The provisions for income taxes are as follows:
(millions of dollars) -- 1995 -- -- 1994 -- -- 1993 -- ======================================================================== Current: Federal $ 40 $143 $118 State and local 2 29 26 Foreign 24 44 27 - ------------------------------------------------------------------------ 66 216 171 Deferred (credit): Federal 32 2 (36) State and local 10 (10) (8) Foreign (8) (32) 21 - ------------------------------------------------------------------------ 34 (40) (23) $100 $176 $148
Domestic and foreign earnings before income taxes, other items and accounting change are as follows:
(millions of dollars) -- 1995 -- -- 1994 -- -- 1993 -- ======================================================================== Domestic $227 $315 $236 Foreign 15 (23) 139 ======================================================================== $242 $292 $375
Reconciliations between the U.S. federal statutory income tax rate and the consolidated effective income tax rate for earnings before income taxes and other items are as follows:
-- 1995 -- -- 1994 -- -- 1993 -- ======================================================================== U.S. federal statutory rate 35.0% 35.0% 35.0% Impact of restructuring charge -- 13.2 -- Impact of business dispositions -- 7.2 (1.2) State and local taxes, net of federal tax benefit 4.0 4.3 3.1 Nondeductible goodwill amortization 4.4 2.8 1.9 Settlement of prior year taxes (4.5) -- -- Excess foreign taxes 3.9 -- 1.3 Net benefits from unrecognized prior year deferred tax assets and carryforwards (4.0) (1.7) (1.5) Nondeductible interest 1.7 -- -- Other items .8 (.4) .9 ======================================================================== Effective income tax rate 41.3% 60.4% 39.5%
A full tax benefit was not recognized on the 1994 restructuring charge in Europe and North America due to the net operating loss positions in certain tax jurisdictions. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities used for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company's deferred tax liabilities and assets are as follows: -- page 51 -- -- Notes to Consolidated Financial Statements -- (11) INCOME TAXES CONTINUED
(millions of dollars) -- 1995 -- -- 1994 -- ========================================================================== Deferred tax liabilities: Property, plant and equipment $178 $174 Financial services leveraged leases 117 110 Prepaid expenses 17 16 Other 28 14 - -------------------------------------------------------------------------- Total deferred tax liabilities 340 314 Deferred tax assets: Postretirement obligation 142 134 Accrued expenses 22 18 Other reserve accruals 17 16 Restructuring costs 52 73 Product warranty accrual 18 18 Nondeductible insurance 15 13 Loss carryforwards 53 25 Employee compensation 28 28 Receivable and inventory allowances 1 21 Other 45 56 - -------------------------------------------------------------------------- Total deferred tax assets 393 402 Valuation allowance for deferred tax assets (40) (34) - -------------------------------------------------------------------------- Deferred tax assets, net of valuation allowance 353 368 ========================================================================== Net deferred tax assets $ 13 $ 54
The Company has recorded a valuation allowance to reflect the estimated amount of net operating loss carryforwards, restructuring costs and other deferred tax assets which may not be realized. The Company provides deferred taxes on the undistributed earnings of foreign subsidiaries and affiliates to the extent such earnings are expected to be remitted. Generally, earnings have been remitted only when no significant net tax liability would have been incurred. No provision has been made for U.S. or foreign taxes that may result from future remittances of the undistributed earnings ($259 million at December 31, 1995) of foreign subsidiaries and affiliates expected to be reinvested indefinitely. Determination of the deferred income tax liability on these unremitted earnings is not practicable as such liability, if any, is dependent on circumstances existing when remittance occurs. The Company paid income taxes of $102 million in 1995, $190 million in 1994 and $140 million in 1993. At December 31, 1995, the Company has foreign net operating loss carryforwards of $165 million which are primarily non-expiring. (12) PENSION PLANS The Company maintains both contributory and non-contributory defined benefit pension plans covering substantially all North American employees and certain European employees. The plans provide pension benefits that are based primarily on compensation during a specified period before retirement or specified amounts for each year of service. The Company's present funding policy for these plans is to generally make the minimum annual contribution required by applicable regulations. Assets held by the plans consist primarily of listed common stocks and bonds, government securities, investments in trust funds, bank deposits and other investments. Pension cost includes the following components:
(millions of dollars) -- 1995 -- -- 1994 -- -- 1993 -- ========================================================================== Service cost - benefits earned during the year $ 36 $ 36 $ 31 Interest cost on projected benefit obligation 77 75 71 Actual return on plan assets (267) (3) (128) Net deferral/amortization 164 (97) 33 ========================================================================== $ 10 $ 11 $ 7
-- page 52 -- (12) PENSION PLANS CONTINUED Assumptions used in accounting for defined benefit pension plans are as follows:
-- 1995 -- -- 1994 -- -- 1993 -- =========================================================================== Discount rate 7.0-8.5% 7.0-10.0% 7.0-8.5% Rate of compensation level increase 4.0-6.5% 4.0-6.5% 4.0-6.5% Expected long-term rate of return on plan assets 6.0-9.5% 6.5-9.5% 6.5-9.5%
The funded status of the pension plans is as follows:
Plans Whose Assets Plans Whose Exceed Accumulated Accumulated Benefits Benefits Exceed Plan Assets ---------------------------------------------- (millions of dollars) -- 1995 -- -- 1994 -- -- 1995 -- -- 1994 -- =========================================================================== Projected benefit obligation $ (862) $(751) $(229) $(158) Plan assets at fair value 1,101 965 145 90 Plan assets in excess of (less than) projected benefit obligation 239 214 (84) (68) Unrecognized prior service cost 25 28 24 18 Unrecognized net experience gain (215) (190) (5) (4) Unrecognized net of amortization (19) (26) (6) (5) Additional minimum liability -- -- (9) (5) =========================================================================== Pension asset (liability) included in other assets (postemployment benefits) $ 30 $ 26 $ (80) $ (64)
The accumulated benefit obligation, which is included in the projected benefit obligation, represents the actuarial present value of benefits attributed to employee service and compensation levels to date. At December 31, 1995 and 1994, the accumulated benefit obligation was $933 million and $785 million. The vested portion was $825 million in 1995 and $690 million in 1994. The U.S. pension plans provide that in the event of a plan termination within five years following a change in control of the Company, any assets held by the plans in excess of the amounts needed to fund accrued benefits would be used to provide additional benefits to plan participants. A change in control generally means one not approved by the incumbent Board of Directors, including an acquisition of 25% or more of the voting power of the Company's outstanding stock or a change in a majority of the incumbent Board. Certain European subsidiaries maintain termination indemnity and special severance plans. The cost of these plans, determined in accordance with local government specifications, was $12 million in 1995, $16 million in 1994 and $16 million in 1993. The Company maintains a 401(k) defined contribution plan covering substantially all U.S. employees. Company matching contributions for domestic hourly and certain other employees under the plan, based on the Company's annual operating results and the level of individual participant's contributions, amounted to $3 million in 1995, $5 million in 1994 and $8 million in 1993. (13) POSTRETIREMENT BENEFIT PLANS The Company currently sponsors a defined benefit health care plan that provides postretirement medical benefits to full time U.S. employees who have worked 5 years and attained age 55 while in service with the Company. The plan is currently noncontributory and contains cost-sharing features such as deductibles, coinsurance and a lifetime maximum. The Company does not fund the plan. No significant postretirement benefits are provided by the Company to non-U.S. employees. -- page 53 -- -- Notes to Consolidated Financial Statements -- (13) POSTRETIREMENT PLANS CONTINUED Effective January 1, 1993, the Company adopted Financial Accounting Standards Board Statement No. 106, "Employers' Accounting for Postretirement Benefits Other than Pensions." The Company recorded the $300 million pre-tax transition obligation as a cumulative effect accounting change, resulting in an after-tax charge of $180 million. The components of the annual postretirement benefit costs are as follows:
(millions of dollars) -- 1995 -- -- 1994 -- -- 1993 -- ========================================================================== Service cost $10 $ 9 $ 8 Interest cost 26 26 24 Recognition of transition obligation -- -- 300 ========================================================================== $36 $35 $332
The components of the postretirement obligation are as follows:
(millions of dollars) -- 1995 -- -- 1994 -- ========================================================================== Accumulated postretirement benefit obligation: Retirees $173 $148 Fully eligible active participants 85 75 Other active plan participants 120 99 - -------------------------------------------------------------------------- Total 378 322 Unrecognized gain (loss) (21) 12 ========================================================================== Postretirement obligation $357 $334
The assumed health care trend rate decreases gradually from 10% in 1994 and 1995 to 8% in 1996 and 1997 to 7% in 1998 and 1999 and finally to 6% in 2000 and future years. Increasing the health care trend rate by one percentage point would increase the accumulated postretirement benefit obligation as of December 31, 1995 by $26 million and increase the annual postretirement benefit cost for 1995 by $2 million. Discount rates of 7.5% and 8.5% were used to determine the accumulated postretirement benefit obligation at December 31, 1995 and 1994. (14) CONTINGENCIES The Company is involved in various legal actions arising in the normal course of business. Management, after taking into consideration legal counsel's evaluation of such actions, is of the opinion that the outcome of these matters will not have a material adverse effect on the Company's financial position. The Company is a party to certain financial instruments with off-balance-sheet risk which are entered into in the normal course of business. These instruments consist of financial guarantees, repurchase agreements and letters of credit. The Company's exposure to credit loss in the event of nonperformance by the debtors is the contractual amount of the financial instruments. The Company uses the same credit policies in making commitments and conditional obligations as it does for on-balance-sheet instruments. Collateral or other security is generally required to support financial instruments with off-balance-sheet credit risk. At December 31, 1995, financial guarantees, repurchase agreements and letters of credit totaled $91 million. -- page 54 -- (15) BUSINESS SEGMENT INFORMATION Geographic Segments - Major Home Appliances
North Other and Major Home (millions of dollars) America Europe (Eliminations) Appliances ========================================================================== Net sales 1995 $5,093 $2,502 $ 568 $8,163 1994 $5,048 $2,451 $ 450 $7,949 1993 $4,547 $2,410 $ 411 $7,368 Operating profit 1995 $ 314 $ 90 $ (38) $ 366 1994 $ 311 $ 43 $ 16 $ 370 1993 $ 341 $ 129 $ 34 $ 504 Identifiable assets 1995 $2,031 $2,104 $2,033 $6,168 1994 $2,046 $1,824 $1,410 $5,280 1993 $1,742 $1,758 $1,154 $4,654 Depreciation expense 1995 $ 140 $ 105 $ 8 $ 253 1994 $ 141 $ 98 $ 4 $ 243 1993 $ 137 $ 101 $ 1 $ 239 Net capital expenditures 1995 $ 262 $ 186 $ 29 $ 477 1994 $ 269 $ 135 $ 12 $ 416 1993 $ 188 $ 116 $ 3 $ 307
Identifiable assets are those assets directly associated with the respective operating activities. Substantially all of the Company's trade receivables are from wholesale distributors and retailers. Corporate assets which consist principally of cash, investments, prepaid expenses, intangibles, deferred income taxes and property and equipment related to corporate activities are included as other. Sales activity with Sears, Roebuck and Co., a North American major home appliance retailer, represented 20% of consolidated net sales in 1995 and 19% in 1994 and 1993. Related receivables were 14% and 16% of consolidated trade receivables at December 31, 1995 and 1994. Financial Services WFC financial information is included in the supplemental consolidating data column of the consolidated financial statements. During 1993, the Company announced a strategic restructuring of WFC. The subsidiary is phasing out of aerospace and has substantially liquidated its highly leveraged commercial lending portfolio in favor of a strategy to better complement the Company's home appliance business. Financial services 1993 operating profit includes a $48 million charge to adjust the value of specific aerospace and commercial accounts in its financing portfolio. The total charge was $65 million or $40 million after-tax. -- page 55 -- -- Notes to Consolidated Financial Statements -- (16) QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
Three Months Ended (millions of dollars -------------------------------------------- except share data) December 31 September 30 June 30 March 31 ============================================================================= 1995: Net sales $2,046 $2,109 $2,069 $1,939 Cost of products sold $1,591 $1,626 $1,590 $1,438 Financial services revenue, less related interest expense $ 30 $ 29 $ 29 $ 30 Net earnings $ 18 $ 64 $ 52 $ 75 Per share of common stock: Primary earnings $ .25 $ .85 $ .70 $ 1.00 Fully diluted earnings $ .25 $ .83 $ .70 $ .98 Dividends paid $ .340 $ .340 $ .340 $ .340 Stock price: High $58 $60 7/8 $58 1/4 $55 1/2 Low $50 3/4 $54 3/8 $49 7/8 $49 1/4 Close $53 1/4 $57 3/4 $55 $54 3/4
Three Months Ended (millions of dollars -------------------------------------------- except share data) December 31 September 30 June 30 March 31 ============================================================================= 1994: Net sales $2,058 $2,046 $2,013 $1,832 Cost of products sold $1,534 $1,538 $1,515 $1,365 Financial services revenue, less related interest expense $ 27 $ 27 $ 25 $ 25 Net earnings (loss) $ (91) $ 98 $ 84 $ 67 Per share of common stock: Primary earnings (loss) $(1.20) $ 1.30 $ 1.10 $ .90 Fully diluted earnings (loss) $(1.15) $ 1.27 $ 1.09 $ .88 Dividends paid $ .305 $ .305 $ .305 $ .305 Stock price: High $55 1/2 $55 3/8 $62 $73 1/2 Low $44 5/8 $48 1/2 $52 3/8 $59 3/8 Close $50 1/4 $51 3/8 $52 1/2 $60 7/8
Restructuring initiatives described in Note 10 and business dispositions described in Note 2 reduced fourth quarter net earnings by $187 million or $2.47 per share, increased third quarter net earnings by $15 million or $.20 per share and reduced second quarter net earnings by $2 million or $.03 per share. -- page 56 -- -- Report of -- Ernst & Young LLP, Independent Auditors The Stockholders and Board of Directors Whirlpool Corporation Benton Harbor, Michigan We have audited the accompanying consolidated balance sheets of Whirlpool Corporation and subsidiaries as of December 31, 1995 and 1994, and the related consolidated statements of earnings and cash flows for each of the three years in the period ended December 31, 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 the Brazilian affiliates used as the basis for recording the Company's equity in their net earnings, 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, 1995 and 1994, and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 31, 1995, in conformity with generally accepted accounting principles. 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. /s/ Ernst & Young LLP Chicago, Illinois January 31, 1996 -- page 57 -- -- Report by -- Management on the Consolidated Financial Statements The management of Whirlpool Corporation has prepared the accompanying financial statements. The financial statements have been audited by Ernst & Young, independent auditors, whose report, based upon their audits and the reports of other independent auditors, expresses the opinion that these financial statements present fairly the consolidated financial position, results of operations and cash flows of Whirlpool Corporation and subsidiaries ("the Company") in accordance with generally accepted accounting principles. Their audits are conducted in conformity with generally accepted auditing standards. The financial statements were prepared from the Company's accounting records, books and accounts which, in reasonable detail, accurately and fairly reflect all material transactions. The Company maintains a system of internal controls designed to provide reasonable assurance that the Company's accounting records, books and accounts are accurate and that transactions are properly recorded in the Company's books and records, and the Company's assets are maintained and accounted for, in accordance with management's authorizations. The Company's accounting records, policies and internal controls are regularly reviewed by the Company's internal audit staff. The Audit Committee of the Board of Directors of the Company, which is composed of four directors who are not employed by the Company, considers and makes recommendations to the Board of Directors as to accounting and auditing matters concerning the Company, including recommending for appointment by the Board of Directors the firm of independent auditors engaged on an annual basis to audit the financial statements of Whirlpool Corporation and its majority owned subsidiaries. The Audit Committee meets with the independent auditors at least three times each year to review the scope of the audit, the results of the audit and such recommendations as may be made by said auditors with respect to the Company's accounting methods and system of internal controls. /s/ John P. Cunningham John P. Cunningham Executive Vice President and Chief Financial Officer January 31, 1996 -- Revenue Information --
December 31 (millions of dollars) Percent -- 1995 -- -- 1994 -- -- 1993 -- ================================================================================ Major Home Appliances Home Laundry Appliances 31.1% $2,593 $2,610 $2,481 Home Refrigeration and Room Air Conditioning Equipment 36.1 3,017 2,900 2,588 Home Cooking Appliances 15.8 1,321 1,258 1,094 Other Home Appliances 14.8 1,232 1,181 1,205 - -------------------------------------------------------------------------------- 97.8 8,163 7,949 7,368 Financial Services 2.2 184 155 165 ================================================================================ 100.0% $8,347 $8,104 $7,533
-- page 58 -- -- Directors -- Victor A. Bonomo Miles L. Marsh Former Executive Vice President, Chairman and Chief Executive PepsiCo, Inc. Officer, James River Corporation Committees: Finance Audit, Finance Robert A. Burnett Philip L. Smith Former Chairman of the Board, Former Chairman of the Board, Meredith Corporation President and Chief Executive Corporate Governance, Officer, Pillsbury Company Human Resources Corporate Governance, Finance Herman Cain Paul G. Stern Chairman and Chief Executive Partner, Thayer Capital Partners, Officer, Godfather's Pizza, Inc. and Former Chairman, President Corporate Governance and Chief Executive Officer, Northern Telecom Limited Allan D. Gilmour Audit, Human Resources Former Vice Chairman, Ford Motor Company Janice D. Stoney Finance, Human Resources Former Executive Vice President, Total Quality System, Kathleen J. Hempel US WEST Communications Vice Chairman Group, Incorporated and Chief Financial Officer, Audit Fort Howard Corporation Audit, Finance David R. Whitwam Chairman of the Board and Arnold G. Langbo Chief Executive Officer of the Chairman of the Board Company and Chief Executive Officer, Kellogg Company Corporate Governance, Human Resources William D. Marohn President and Chief Operating Officer of the Company Pension Fund
-- Senior Management -- Executive Officers Bruce K. Berger - ------------------ Corporate Affairs David R. Whitwam Chairman of the Board E.R. (Ed) Dunn and Chief Executive Officer Human Resources and Assistant Secretary William D. Marohn President and Chief Operating Robert D. Hall Officer President and Chief Operating Officer, Whirlpool Asia Executive Vice Presidents - ------------------------- Edward J. F. Herrelko John P. Cunningham Group Sales and Distribution, NAAG Chief Financial Officer Stephen F. Holmes Jeff M. Fettig Group Manufacturing and President, Whirlpool Europe, B.V. Technology Development, CTO Robert Frey Daniel F. Hopp Chairman of the Board General Counsel and Secretary and Chief Executive Officer, Whirlpool Asia Halvar Johansson Group Manufacturing and Ralph F. Hake Technology, WEBV North American Appliance Group Kenneth W. Kaminski Ronald L. Kerber Small Appliance Business Unit Chief Technology Officer James E. LeBlanc P. Daniel Miller Chairman of the Board, President Latin American Appliance Group and Chief Executive Officer, Whirlpool Financial Corporation Senior Officers - --------------- Ivan Menezes Vice Presidents Group Marketing, WEBV J. C. Anderson Rudy Provoost Group Manufacturing and Group Sales, WEBV Technology, NAAG Michael D. Thieneman Roy V. Armes Global Procurement Operations, CTO Group Manufacturing and Technology, WAAG Robert G. Thompson Controller Bradley J. Bell Treasurer David W. Williams Group Marketing, NAAG
-- page 59 -- 1995 ELEVEN-YEAR CONSOLIDATED STATISTICAL REVIEW
(millions of dollars except share and employee data) - 1995 - - 1994 - - 1993 - - 1992 - - 1991 - - 1990 - - 1989 - - 1988 - ====================================================================================================================== Consolidated Operations - ----------------------- Net sales $ 8,163 $ 7,949 $ 7,368 $ 7,097 $ 6,550 $ 6,424 $6,138 $ 4,306 Financial services 184 155 165 204 207 181 136 107 Total revenues $ 8,347 $ 8,104 $ 7,533 $ 7,301 $ 6,757 $ 6,605 $6,274 $ 4,413 - ---------------------------------------------------------------------------------------------------------------------- Operating profit $ 396 $ 397 $ 482 $ 479 $ 393 $ 349 $ 411 $ 261 Earnings from continuing operations before income taxes and other items $ 242 $ 292 $ 375 $ 372 $ 304 $ 220 $ 308 $ 233 Earnings from continuing operations before accounting change (1) $ 209 $ 158 $ 231 $ 205 $ 170 $ 72 $ 187 $ 161 Net earnings (2) $ 209 $ 158 $ 51 $ 205 $ 170 $ 72 $ 187 $ 94 Net capital expenditures $ 480 $ 418 $ 309 $ 288 $ 287 $ 265 $ 208 $ 166 Depreciation $ 282 $ 246 $ 241 $ 275 $ 233 $ 247 $ 222 $ 143 Dividends $ 100 $ 90 $ 85 $ 77 $ 76 $ 76 $ 76 $ 76 - ---------------------------------------------------------------------------------------------------------------------- Consolidated Financial Position - ---------------------- Current assets $ 3,541 $ 3,078 $ 2,708 $ 2,740 $ 2,920 $ 2,900 $2,889 $ 1,827 Current liabilities $ 3,829 $ 2,988 $ 2,763 $ 2,887 $ 2,931 $ 2,651 $2,251 $ 1,374 Working capital $ (288) $ 90 $ (55) $ (147) $ (11) $ 249 $ 638 $ 453 Property, plant and equipment--net $ 1,779 $ 1,440 $ 1,319 $ 1,325 $ 1,400 $ 1,349 $1,288 $ 820 Total assets $ 7,800 $ 6,655 $ 6,047 $ 6,118 $ 6,445 $ 5,614 $5,354 $ 3,410 Long-term debt $ 983 $ 885 $ 840 $ 1,215 $ 1,528 $ 874 $ 982 $ 474 Total debt-appliance business $ 1,635 $ 965 $ 850 $ 1,198 $ 1,330 $ 1,026 $1,125 $ 441 Stockholders' equity $ 1,877 $ 1,723 $ 1,648 $ 1,600 $ 1,515 $ 1,424 $1,421 $ 1,321 - ---------------------------------------------------------------------------------------------------------------------- Per Share Data - -------------- Earnings from continuing operations before accounting change $ 2.80 $ 2.10 $ 3.19 $ 2.90 $ 2.45 $ 1.04 $ 2.70 $ 2.33 Net earnings $ 2.80 $ 2.10 $ 0.67 $ 2.90 $ 2.45 $ 1.04 $ 2.70 $ 1.36 Dividends $ 1.36 $ 1.22 $ 1.19 $ 1.10 $ 1.10 $ 1.10 $ 1.10 $ 1.10 Book value $ 25.08 $ 22.83 $ 22.80 $ 22.67 $ 21.78 $ 20.51 $ 20.49 $ 19.06 Closing Stock Price -- NYSE $53 1/4 $50 1/4 $66 1/2 $44 5/8 $38 7/8 $ 23 1/2 $ 33 $24 3/4
Consolidated Operations - ----------------------- - 1987 - - 1986 - - 1985 - ================================ Net sales $4,104 $3,928 $ 3,465 Financial services 94 76 67 Total revenues $4,198 $4,004 $ 3,532 Operating profit $ 296 $ 326 $ 295 Earnings from continuing operations before income taxes and other items $ 280 $ 329 $ 321 Earnings from continuing operations before accounting change (1) $ 187 $ 202 $ 182 Net earnings (2) $ 192 $ 200 $ 182 Net capital expenditures $ 223 $ 217 $ 178 Depreciation $ 133 $ 120 $ 89 Dividends $ 79 $ 76 $ 73 - ---------------------------------------------------------------- Consolidated Financial Position - ---------------------- Current assets $ 1,690 $ 1,654 $ 1,410 Current liabilities $ 1,246 $ 1,006 $ 781 Working capital $ 444 $ 648 $ 629 Property, plant and equipment--net $ 779 $ 677 $ 514 Total assets $ 3,137 $ 2,856 $ 2,207 Long-term debt $ 367 $ 298 $ 125 Total debt-appliance business $ 383 $ 194 $ 64 Stockholders' equity $ 1,304 $ 1,350 $ 1,207 - ---------------------------------------------------------------- Per Share Data - -------------- Earnings from continuing operations before accounting change $ 2.61 $ 2.72 $ 2.49 Net earnings $ 2.68 $ 2.70 $ 2.49 Dividends $ 1.10 $ 1.03 $ 1.00 Book value $ 18.83 $ 18.21 $ 16.46 Closing Stock Price -- NYSE $24 3/8 $33 7/8 $24 11/16
- page 60 -
(millions of dollars except share and employee data) - 1995 - - 1994 - - 1993 - - 1992 - - 1991 - - 1990 - - 1989 - - 1988 - =================================================================================================================================== - ----------------------------------------------------------------------------------------------------------------------------------- Key Ratios - ---------- Operating profit margin 4.7% 4.9% 6.4% 6.6% 5.8% 5.3% 6.6% 5.9% Pre-tax margin (3) 2.9% 3.6% 5.0% 5.1% 4.5% 3.3% 4.9% 5.3% Net margin (4) 2.5% 2.0% 3.1% 2.8% 2.5% 1.1% 3.0% 3.6% Return on average stockholders' equity (5) 11.6% 9.4% 14.2% 13.1% 11.6% 5.1% 13.7% 12.3% Return on average total assets (6) 3.0% 2.8% 4.0% 3.3% 2.9% 1.4% 4.9% 4.9% Current assets to current liabilities 0.9 1.0 1.0 0.9 1.0 1.1 1.3 1.3 Total debt-appliance business as a percent of invested capital (7) 43.3% 34.4% 31.6% 41.7% 46.1% 37.6% 39.2% 20.5% Price earnings ratio 19.0 23.9 20.8 15.4 15.9 22.6 12.2 18.2 Fixed charge coverage (8) 2.5 3.0 3.2 2.6 2.3 1.8 2.7 3.5 - ----------------------------------------------------------------------------------------------------------------------------------- Other Data - ---------- Number of common shares outstanding (in thousands): Average 74,827 75,490 72,272 70,558 69,528 69,443 69,338 69,262 Year-end 74,081 73,845 73,068 70,027 69,640 69,465 69,382 69,289 Number of stockholders (year-end) 11,686 11,821 11,438 11,724 12,032 12,542 12,454 12,521 Number of employees (year-end) 45,435 39,016 39,590 38,520 37,886 36,157 39,411 29,110 Total return to shareholders (five year annualized) (9) 20.8% 12.0% 25.8% 17.0% 6.7% 2.8% 11.3% 4.4% - 1987 - - 1986 - - 1985 - =========================================================================== - --------------------------------------------------------------------------- Key Ratios - ---------- Operating profit margin 7.1% 8.1% 8.4% Pre-tax margin (3) 6.6% 8.2% 9.1% Net margin (4) 4.4% 5.0% 5.1% Return on average stockholders' equity (5) 14.1% 15.8% 15.8% Return on average total assets (6) 6.2% 8.0% 9.1% Current assets to current liabilities 1.4 1.6 1.8 Total debt-appliance business as a percent of invested capital (7) 19.3% -- 2.8% Price earnings ratio 9.1 12.5 9.9 Fixed charge coverage (8) 5.4 7.7 10.7 - -------------------------------------------------------------------------- Other Data - ---------- Number of common shares outstanding (in thousands): Average 71,732 73,831 73,285 Year-end 69,232 74,128 73,325 Number of stockholders (year-end) 12,128 11,297 11,668 Number of employees (year-end) 30,301 30,520 25,573 Total return to shareholders (five year annualized) (9) 6.2% 26.8% 26.6%
(1) Accounting changes: 1993 -- Accounting for postretirement benefits other than pensions, 1987 -- Accounting for income taxes and 1986 -- Accounting for pensions. (2) The Company's kitchen cabinet business was discontinued in 1988. (3) Earnings from continuing operations before income taxes and other items, as a percent of revenue. (4) Earnings from continuing operations before accounting change, as a percent of revenue. (5) Earnings from continuing operations before accounting change divided by average stockholders' equity. (6) Earnings from continuing operations before accounting change, plus minority interest, divided by average total assets. (7) Debt less cash and equivalents divided by debt, stockholders' equity and minority interests less cash and equivalents. (8) Ratio of earnings from continuing operations (before income taxes, accounting change and interest expense) to interest expense. (9) Stock appreciation plus reinvested dividends. - page 61 - EX-21 7 LIST OF SUBSIDIARIES Subsidiaries ------------ Subsidiary and Name Jurisdiction In Under Which It Does Business Which Organized - ---------------------------- --------------- Whirlpool Europe B.V. /1/ The Netherlands Whirlpool Properties, Inc. /1/ Michigan Whirlpool Financial Corporation Delaware Whirlpool Financial National Bank /2/ A National Banking Association The names of the Company's other subsidiaries are omitted because, considered in the aggregate as a single subsidiary, such subsidiaries would not constitute a significant subsidiary as of December 31, 1995. - --------------------------------- /1/ Wholly-owned by Registrant /2/ Wholly-owned by Whirlpool Financial Corporation EX-23.IIA 8 CONSENT OF ERNST & YOUNG CONSENT OF ERNST & YOUNG LLP The Board of Directors Whirlpool Corporation Benton Harbor, Michigan We consent to the incorporation by reference in Registration Statement Nos. 33-34490, 33-34037, 33-21360, 33-00201, 2-64261, 33-05904, 33-40249, 33-40010 and 33-43823 of Whirlpool Corporation and Registration Statement Nos. 33-26680 and 33-53196 of Whirlpool Corporation and Whirlpool Savings Plan of our report dated January 31, 1996, with respect to the consolidated financial statements and schedule of Whirlpool Corporation and subsidiaries, included in this Annual Report (Form 10-K) for the year ended December 31, 1995. Chicago, Illinois March 12, 1996 EX-23.IIB 9 CONSENT OF PRICE WATERHOUSE CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in Registration Statement nos. 33-34490, 33-34037, 33-21360, 33-00201, 2-64261, 33-05904, 33-40249 and 33-43823 of Whirlpool Corporation and Registration Statement nos. 33-26680 and 33-53196 of Whirlpool Corporation and Whirlpool Savings Plan of our reports with respect to the financial statements of Empresa Brasileira de Compressores S.A. - EMBRACO and its subsidiaries, Multibras S.A. Eletrodomesticos and its subsidiaries and Brasmotor S.A. and its subsidiaries dated January 19, 1996 included in this Annual Report (Form 10-K) for the year ended December 31, 1995. /s/ Price Waterhouse Price Waterhouse Sao Paulo, Brazil March 11, 1996 EX-24 10 POWERS OF ATTORNEY POWER OF ATTORNEY ----------------- KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned, being a director or officer, or both, of WHIRLPOOL CORPORATION, a Delaware corporation (hereinafter called the "Corporation"), does hereby constitute and appoint DAVID R. WHITWAM, WILLIAM D. MAROHN, JOHN P. CUNNINGHAM and DANIEL F. HOPP, with full power to each of them to act alone, as the true and lawful attorneys and agents of the undersigned, with full power of substitution and resubstitution to each of said attorneys, to execute, file or deliver any and all instruments and to do all acts and things which said attorneys and agents, or any of them, deem advisable to enable the Corporation to comply with the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and any requirements of the Securities and Exchange Commission in respect thereof, in connection with (i) the filing under said Securities Exchange Act of the Corporation's Annual Report on Form 10-K for the year ended December 31, 1995, and (ii) the filing under said Securities Exchange Act of the Annual Report on Form 11-K for the year ended December 31, 1995 for the Whirlpool 401(k) Plan, including specifically, but without limitation of the general authority hereby granted, the power and authority to sign his or her name as a director or officer, or both, of the Corporation, as indicated below opposite his or her signature, to the Annual Report on Form 10-K and the Annual Report on Form 11-K, or any amendment, post-effective amendment, or papers supplemental thereto to be filed in respect of said Annual Reports; and each of the undersigned does hereby fully ratify and confirm all that said attorneys and agents, or any of them, or the substitute of any of them, shall do or cause to be done by virtue hereof. IN WITNESS WHEREOF, each of the undersigned has subscribed these presents, as of the 20th day of February, 1996. Name Title /s/ David R. Whitwam Director, Chairman of the Board and - ------------------------------ Chief Executive Officer David R. Whitwam (Principal Executive Officer) /s/ William D. Marohn Director, President and - ------------------------------ Chief Operating Officer William D. Marohn /s/ John P. Cunningham Executive Vice President and - ------------------------------ Chief Financial Officer John P. Cunningham (Principal Financial Officer) /s/ Robert G. Thompson Vice President and Controller - ------------------------------ (Principal Accounting Officer) Robert G. Thompson /s/ Victor A. Bonomo Director - ------------------------------ Victor A. Bonomo /s/ Robert A. Burnett Director - ------------------------------ Robert A. Burnett /s/ Herman Cain Director - ------------------------------ Herman Cain /s/ Allan D. Gilmour Director - ------------------------------ Allan D. Gilmour /s/ Kathleen J. Hempel Director - ------------------------------ Kathleen J. Hempel /s/ Arnold G. Langbo Director - ------------------------------ Arnold G. Langbo /s/ Miles L. Marsh Director - ------------------------------ Miles L. Marsh /s/ Philip L. Smith Director - ------------------------------ Philip L. Smith /s/ Paul G. Stern Director - ------------------------------ Paul G. Stern /s/ Janice D. Stoney Director - ------------------------------ Janice D. Stoney EX-27 11 FINANCIAL DATA SCHEDULE
5 This schedule contains summary financial information extracted from 1995 10-K for Whirlpool Corporation and is qualified in its entirety by reference to such financial statements. 1,000,000 YEAR DEC-31-1995 JAN-01-1995 DEC-31-1995 149 0 2,117 81 1,029 3,541 3,662 1,883 7,800 3,829 983 81 0 0 1,796 7,800 8,163 8,347 6,245 6,311 31 50 141 242 100 209 0 0 0 209 2.80 2.76
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