-----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, K7rj5qpQNIFxuENiUDQnLgqWOMjCaG3VDwdpBEtTF/Wus8ig3ngbxCXgPmYSdmET fItwq+nsgJKfvdqy4P5hBQ== 0000950131-00-003444.txt : 20000516 0000950131-00-003444.hdr.sgml : 20000516 ACCESSION NUMBER: 0000950131-00-003444 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20000331 FILED AS OF DATE: 20000515 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-Q SEC ACT: SEC FILE NUMBER: 001-03932 FILM NUMBER: 634748 BUSINESS ADDRESS: STREET 1: WHIRLPOOL CNTR 2000 M 63 STREET 2: C/O CORPORATE SECRETARY CITY: BENTON HARBOR STATE: MI ZIP: 49022-2692 BUSINESS PHONE: 6169235000 MAIL ADDRESS: STREET 1: WHIRLPOOL CTR 2000 M 63 STREET 2: C/O CORPORATE SECRETARY CITY: BENTON HARBOR STATE: MI ZIP: 49022-2692 FORMER COMPANY: FORMER CONFORMED NAME: WHIRLPOOL SEEGER CORP DATE OF NAME CHANGE: 19710824 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2000. 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 M-63 Benton Harbor, Michigan 49022-2692 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code 616/923-5000 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 --- --- Number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: Class of common stock Shares outstanding at March 31, 2000 --------------------- ------------------------------------ Common stock, par value $1 per share 73,041,775 PAGE 1 OF 19 QUARTERLY REPORT ON FORM 10-Q ----------------------------- WHIRLPOOL CORPORATION --------------------- Quarter Ended March 31, 2000 INDEX OF INFORMATION INCLUDED IN REPORT Page ---- PART I - FINANCIAL INFORMATION - ------------------------------ Item 1. Financial Statements (Unaudited) Consolidated Condensed Statements of Earnings 3 Consolidated Condensed Balance Sheets 4 Consolidated Condensed Statements of Changes in Equity 5 Consolidated Condensed Statements of Cash Flows 6 Notes to Consolidated Condensed Financial Statements 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 12 PART II - OTHER INFORMATION - --------------------------- Item 6. Exhibits and Reports on Form 8-K 19 2 CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS (UNAUDITED) WHIRLPOOL CORPORATION FOR THE PERIOD ENDED MARCH 31 (millions of dollars except share and dividend data)
Three Months Ended ---------------------- 2000 1999 ---------- --------- Net sales $2,590 $2,486 EXPENSES: Cost of products sold 1,942 1,867 Selling and administrative 405 421 Intangible amortization 8 9 ------ ------ 2,355 2,297 ------ ------ OPERATING PROFIT 235 189 OTHER INCOME (EXPENSE): Interest and sundry income (expense) (9) (152) Interest expense (38) (41) ------ ------ EARNINGS (LOSS) BEFORE INCOME TAXES AND OTHER ITEMS 188 (4) Income taxes 71 8 ------ ------ EARNINGS (LOSS) BEFORE EQUITY EARNINGS AND MINORITY INTERESTS 117 (12) Equity in earnings of affiliated companies (2) (2) Minority interests (3) 42 ------ ------ NET EARNINGS $112 $28 ====== ====== Per share of common stock: Basic earnings from continuing operations $1.53 $ .37 Basic net earnings $1.53 $ .37 Diluted earnings from continuing operations $1.52 $ .36 Diluted net earnings $1.52 $ .36 Cash dividends $ .34 $ .34 ====== ====== See notes to consolidated condensed financial statements.
CONSOLIDATED CONDENSED BALANCE SHEETS WHIRLPOOL CORPORATION (millions of dollars)
March 31 December 2000 1999 (Unaudited) (Audited) ----------- --------- ASSETS Current Assets - -------------- Cash and equivalents $ 175 $ 261 Trade receivables, less allowances (2000: $127; 1999: $124) 1,598 1,477 Inventories 1,237 1,065 Prepaid expenses and other 219 286 Deferred income taxes 92 88 -------- -------- Total Current Assets 3,321 3,177 Other Assets - ------------ Investment in affiliated companies 114 112 Intangibles, net 797 795 Deferred income taxes 247 247 Other 337 317 -------- -------- 1,495 1,471 Property, Plant and Equipment - ----------------------------- Land 68 70 Buildings 857 863 Machinery and equipment 4,258 4,249 Accumulated depreciation (3,035) (3,004) -------- -------- 2,148 2,178 Total Assets $ 6,964 $ 6,826 ======== ========
March 31 December 31 2000 1999 (Unaudited) (Audited) ----------- ----------- LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities - ------------------- Notes payable $ 966 $ 444 Accounts payable 1,174 1,081 Employee compensation 221 300 Accrued expenses 840 803 Restructuring costs 23 39 Current maturities of long-term debt 238 225 ------- ------- Total Current Liabilities 3,462 2,892 Other Liabilities - ----------------- Deferred income taxes 148 157 Postemployment benefits 615 612 Other liabilities 166 168 Long-term debt 520 714 ------- ------- 1,449 1,651 Minority Interests 154 416 Stockholders' Equity - -------------------- Common stock 84 84 Paid-in capital 383 374 Retained earnings 2,354 2,268 Unearned restricted stock (7) (6) Accumulated other comprehensive income (loss) (418) (443) Treasury stock - at cost (497) (410) ------- ------- Total Stockholders' Equity 1,899 1,867 ------- ------- Total Liabilities and Stockholders' Equity $ 6,964 $ 6,826 ======= =======
See notes to consolidated condensed financial statements. CONSOLIDATED CONDENSED STATEMENTS OF CHANGES IN EQUITY WHIRLPOOL CORPORATION FOR THE QUARTER ENDED MARCH 31 (millions of dollars)
Accumulated Other Retained Comprehensive Treasury Stock/ Total Earnings Income Common Stock Paid-in-Capital -------- ----------- --------------- -------------- ----------------- Beginning balance, January 1, 1999 $2,001 $2,024 $ (183) $ 83 $ 77 Comprehensive income Net income 28 28 Foreign currency items, net of tax (203) (203) ------ Comprehensive income (175) ------ Common stock issued (37) (37) Dividends declared on common stock (27) (27) ------ ------ ------ ------ ------ Ending balance, March 31, 1999 $1,762 $2,025 $ (386) $ 83 $ 40 ====== ====== ====== ====== ====== Beginning balance, January 1, 2000 $1,867 $2,268 $ (443) $ 84 $ (42) Comprehensive income Net income 112 112 Foreign currency items, net of tax 25 25 ------ Comprehensive income 137 ------ Common stock issued (79) (79) Dividends declared on common stock (26) (26) ------ ------ ------ ------ ------ Ending balance, March 31, 2000 $1,899 $2,354 $ (418) $ 84 $ (121) ====== ====== ====== ====== ======
See notes to consolidated condensed financial statements. CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED) WHIRLPOOL CORPORATION FOR THREE MONTHS ENDED MARCH 31 (millions of dollars)
2000 1999 ------- ------- OPERATING ACTIVITIES Net earnings (loss) $ 112 $ 28 Depreciation 94 100 Deferred income taxes 38 (24) Equity in net earnings of affiliated companies, less dividends received 2 3 Provision for doubtful accounts - 12 Amortization of goodwill 8 9 Restructuring charges, net of cash paid (16) (24) Minority interests 3 (42) Changes in assets and liabilities, net of effects of business acquisitions and dispositions: Trade receivables (135) (79) Inventories (181) (148) Accounts payable 111 (42) Other - net (119) (42) ------- ------- CASH USED FOR OPERATING ACTIVITIES $ (83) $ (249) ------- ------- INVESTING ACTIVITIES Net additions to properties $ (77) $ (65) Acquisitions of businesses, less cash acquired (283) - ------- ------- CASH USED FOR INVESTING ACTIVITIES $ (360) $ (65) ------- ------- FINANCING ACTIVITIES Proceeds of short-term borrowings $ 6,243 $ 3,569 Repayments of short-term borrowings (5,629) (3,430) Proceeds of long-term debt 3 67 Repayments of long-term debt (157) (30) Dividends (26) (27) Purchase of treasury stock (98) (41) Other 21 (20) ------- ------- CASH PROVIDED BY FINANCING ACTIVITIES 357 88 ------- ------- INCREASE / (DECREASE) IN CASH AND EQUIVALENTS $ (86) $ (226) Cash and equivalents at beginning of year 261 636 ------- ------- CASH AND EQUIVALENTS AT END OF PERIOD $ 175 $ 410 ======= =======
See notes to consolidated condensed financial statements. WHIRLPOOL CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (UNAUDITED) NOTE A--BASIS OF PRESENTATION AND SUMMARY OF PRINCIPAL ACCOUNTING POLICIES The accompanying unaudited consolidated condensed financial statements present information in accordance with generally accepted accounting principles for interim financial information and the instructions to Form 10-Q and applicable rules of Regulation S-X. Accordingly, they do not include all information or footnotes required by generally accepted accounting principles for complete financial statements. Management believes the financial statements include all normal recurring accrual adjustments necessary for a fair presentation. Operating results for the three months ended March 31, 2000 do not necessarily indicate the results that may be expected for the full year. For further information, refer to the consolidated financial statements and notes thereto included in the company's annual report for the year ended December 31, 1999. 7 WHIRLPOOL CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (UNAUDITED) The following table provides the computation of basic and diluted earnings per share: Three Months Ended March 31 ------------------ 2000 1999 -------- -------- (dollars in millions except earnings per share) Basic: Average Shares Outstanding 73.5 75.9 Diluted: Average Shares Outstanding 73.5 75.9 Treasury Stock Method: Stock Options 0.5 0.2 ------- ------- Diluted Average Shares Outstanding 74.0 76.1 ======= ======= Net Earnings $ 112.2 $ 27.8 Basic Net Earnings Per Share $ 1.53 $ 0.37 Diluted Net Earnings Per Share $ 1.52 $ 0.36 NOTE B--BUSINESS ACQUISITIONS & DISPOSITIONS On January 7, 2000, the company completed its tender offer for the outstanding publicly traded shares in Brazil of its subsidiaries Brasmotor S.A. (Brasmotor) and Multibras S.A. Eletrodomesticos (Multibras). In completing the offer, the company purchased additional shares of Brasmotor and Multibras for $283 million. With this additional investment, the company's equity interest in its Brazilian subsidiaries increased from approximately 55% to approximately 87%. 8 WHIRLPOOL CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (UNAUDITED) NOTE C--INVENTORIES Inventories consist of the following:
March 31 December 31 2000 1999 ----------- ----------- (millions of dollars) Finished products $ 1,124 $ 932 Raw materials and work in process 281 301 ----------- ----------- Total FIFO cost 1,405 1,233 Less excess of FIFO cost over LIFO cost 168 168 ----------- ----------- $ 1,237 $ 1,065 =========== ===========
NOTE D--RESTRUCTURING CHARGES During 1997, the company incurred restructuring costs of $343 million ($244 million cash costs and $99 million noncash costs) to better align the company's cost structure within the global home-appliance marketplace. Pretax restructuring charges of $172 million, $101 million, $35 million, $25 million and $10 million relate to the company's European, Asian, Latin American, corporate and North American operations, respectively. More than 90% of the cash costs have been paid to date, with the remainder to be paid in 2000. The restructuring charge includes the elimination of 7,900 global positions of which more than 7,600 positions have been eliminated to date. NOTE E--BRAZILIAN CURRENCY DEVALUATION The Brazilian real declined from 1.21 to 1.72 per USD from mid-January 1999, when the Brazilian government changed its foreign exchange policy to a floating exchange rate, to March 31, 1999. Because the Brazilian operations maintained significant USD denominated debt on their books at that time, the currency devaluation resulted in a $146 million pre-tax charge to earnings (Whirlpool's share after-tax and minority interest was $53 million). Also included in other income and expense was a $12 million pre-tax mark-to-market charge ($7 million after-tax) related to short term forward contracts purchased to hedge movement in Brazil's currency. NOTE F--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 9 WHIRLPOOL CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (UNAUDITED) 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 risk. At March 31, 2000, the company had $210 million in receivables subject to recourse provisions and $182 million in guarantees of customer lines of credit at commercial banks. 10 WHIRLPOOL CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (UNAUDITED) NOTE G--GEOGRAPHIC SEGMENTS The company identifies operating segments based upon geographical regions of operations because each operating segment manufactures home appliances and related components, but serves strategically different markets.
Three Months North Latin Other and Total Ended March 31 America Europe America Asia (Eliminations) Whirlpool - ---------------------------------------------------------------------------------------------- Sales 2000 $1,556 $ 569 $ 416 $ 84 $(39) $2,590 1999 $1,438 $ 611 $ 374 $ 84 $(21) $2,486 Intangible amortization 2000 $ 1 $ 4 $ 1 $ 1 $ 1 $ 8 1999 $ 1 $ 4 $ 1 $ 1 $ 2 $ 9 Depreciation 2000 $ 40 $ 19 $ 25 $ 5 $ 5 $ 94 1999 $ 40 $ 23 $ 25 $ 6 $ 6 $ 100 Operating profit (loss) 2000 $ 205 $ 39 $ 26 $ 3 $(38) $ 235 1999 $ 170 $ 37 $ 20 $ 1 $(39) $ 189 Total assets 2000 $2,482 $1,833 $1,690 $709 $250 $6,964 1999 $2,135 $2,076 $1,962 $716 $347 $7,236 Capital expenditures 2000 $ 30 $ 16 $ 23 $ 1 $ 7 $ 77 1999 $ 25 $ 14 $ 26 $ - $ - $ 65
11 MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION RESULTS OF OPERATIONS The statements of earnings summarize operating results for the three months ended March 31, 2000 and 1999. All comparisons are to 1999, unless otherwise noted. This section of Management's Discussion highlights the main factors affecting the changes in operating results. Net Sales - --------- Net sales increased 4% and totaled $2.6 billion for the first quarter of 2000. Excluding currency fluctuations around the world, net sales increased 7%. North American unit volumes were up 13% in the first quarter, in an industry that was up 7%. North American net sales were 8% higher than the prior year. North American industry shipments are expected to be up about 3% for the full year. European sales in U.S. dollars were down 7% due to currency fluctuations, as units sold increased 6%. European industry shipments are expected to be up between four and five percent for the full year. Units sold increased 16% in Latin America, while net sales increased 11%, both reflecting the impact in 1999 of the region's weak economic conditions and the currency devaluation in Brazil. Asia's unit volumes and net sales increased 3% and 6%, respectively. Gross Margin - ------------ The gross margin percentage improved slightly for the first quarter due to productivity gains and a pension credit of $6 million. This credit was caused by higher than expected returns of the pension funds investments. An additional $9 million pension credit was recorded in selling, general and administrative (SG&A) expense. These factors were offset by a reclassification within North America of certain sales allowances from selling, general and administrative expenses into net sales, to be consistent with the treatment of similar sales program costs in other areas of the company. Excluding this adjustment within North America, the gross margin would have increased 0.7 percentage points over 1999. Selling, General and Administrative - ----------------------------------- Selling, general and administrative expenses as a percent of net sales decreased 1.4 percentage points due to the pension credit and expense reclassification described above. Excluding the impact of the reclassification, the SG&A expense ratio improved 0.4 percentage points. North America's ratio improved 0.3 percentage points excluding the reclassification adjustments, Europe increased slightly and Latin America showed significant improvement due to increased sales in 2000 and the inclusion of additional reserves for Brazilian credit risk in 1999. Other Income and Expense - ------------------------ Interest and sundry income (expense) was $146 million favorable to the first quarter of 1999 due primarily to $158 million of charges in 1999 related to the Brazilian currency devaluation. These currency related charges were partially offset by an $11 million increase in net interest expense caused by the company restructuring its Brazilian short term financing. 12 MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION Income Taxes - ------------ The effective income tax rate for 2000 was 38.0 percent versus the effective rate for 1999, excluding the devaluation, of 39.5%. The losses within the Brazilian operations, which resulted in tax benefits at an average lower rate than the U.S. statutory tax rate, heavily skewed the 1999 quarter's actual effective tax rate. Net Earnings - ------------ First quarter net earnings were $112 million or $1.52 per diluted share compared to $28 million or $0.36 per diluted share in 1999. Excluding the foreign exchange loss from the Brazilian currency devaluation, the 1999 net earnings would have been $88 million or $1.15 per diluted share. CASH FLOWS The statements of cash flows reflect the changes in cash and cash equivalents for the three months ended March 31, 2000 and 1999 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 used for operating activities in the first three months of 2000 was $83 million compared to $249 million used in 1999, reflecting the $98 million impact of the currency devaluation flowing through net earnings and minority interest and a build up of inventories due to the business slowdown in Brazil during the first quarter of 1999. Investing Activities - -------------------- The principal recurring investing activities are property additions. Net property additions for the first three months were $77 million in 2000 as compared to $65 million in 1999. These expenditures are primarily for equipment and tooling related to product improvements, more efficient production methods, and replacement for normal wear and tear. Refer to Note B to the accompanying consolidated condensed financial statements for a discussion of business dispositions and acquisitions. 13 MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION Financing Activities - -------------------- Dividends to shareholders totaled $26 million for the first quarter of 2000 and $27 million for 1999. The company's borrowings, net of short term investments and adjusted for currency fluctuations, increased $460 million from year end, due primarily to the purchase of additional shares in its Brazilian subsidiaries and seasonal working capital needs. FINANCIAL CONDITION AND OTHER MATTERS The financial position of the company remains strong as evidenced by the March 31, 2000 balance sheet. The company's total assets are $7.0 billion and stockholders' equity is $1.9 billion versus the March 1999 totals of $7.2 billion and $1.8 billion, respectively. On February 15, 2000, the company announced that its Board of Directors approved an extension of the company's stock repurchase program to $1 billion. The additional $750 million share repurchase authorization extends the previously authorized $250 million repurchase program which was announced March 1, 1999. The shares are to be purchased in the open market and through privately negotiated sales as the company deems appropriate and it is currently expected to be completed over an eighteen month period. The company has purchased 4.6 million shares at a cost of $280 million through March 31, 2000, of which 1.7 million shares or $98 million occurred since year-end. The overall debt to invested capital ratio of 45.6% at March 31, 2000 was down from 48.1% at March 31, 1999 and up from 37.7% at December 31, 1999. The increase from year-end is due to the increase in debt offsetting a slight increase in equity. The company's debt continues to be rated investment grade by Moody's Investors Service Inc., Standard and Poor's, and Duff & Phelps. Various European currency swaps and forward contracts serve as a hedge against 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 are included in other income (expense) in the income statement. 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. In December 1996, a favorable decision was obtained by Multibras and Embraco with respect to additional export incentives in connection with the Befiex program. In April 1997, Multibras and Embraco submitted tax-credit claims for about 447 million reais (equivalent to US$440 million as of December 1996) relating to the favorable decision for exports from July 1988 through December 1996. This amount is impacted by exchange rate fluctuations, offset by accrued interest. The company has not recognized any income relating to the claims involving sales prior to 1997 because the timing and payment amount of such claims is uncertain. 14 MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION EURO CURRENCY CONVERSION On January 1, 1999, eleven member nations of the European Union began the conversion to a common currency, the "euro." The company has significant manufacturing operations and sales in these countries. The introduction of the euro has eliminated transaction gains and losses within participating countries and there currently has not been any significant impact on operating results from the change over to the euro. Prices to customers may converge throughout the affected countries, although the company believes that in recent years competitive pressures have to some extent eliminated price differences solely caused by the lack of price transparency. Internal computer system and business processes will need to be changed to accommodate the new currency. The company has established a cross-functional team, guided by an executive-level steering committee, to address these issues. It currently plans to make changes in two phases. In the first phase, from 1999 to 2001, the company will have the capability to bill customers and pay suppliers in euro, but will continue to maintain its accounts in the national currencies. In 2002, all remaining operational and financial systems will be converted to the euro. The cost of the first phase is not material; the cost of the second phase has not been estimated at this time. Operating efficiencies should ultimately result from reduction of the complexity of doing business in multiple currencies. No estimate of these efficiencies has been made. FORWARD-LOOKING STATEMENTS The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements made by or on behalf of the Company. Management's Discussion and Analysis and other sections of this report may contain forward- looking statements that reflect our current views with respect to future events and financial performance. Certain statements contained in this quarterly report and other written and oral statements made from time to time by the company do not relate strictly to historical or current facts. As such, they are considered "forward-looking statements" which provide current expectations or forecasts of future events. Such statements can be identified by the use of terminology such as "anticipate," "believe," "estimate," "expect," "intend," "may," "could," "possible," "plan," "project," "will," "forecast," and similar words or expressions. The company's forward-looking statements generally relate to its growth strategies, financial results, product development, and sales efforts. These forward-looking statements should be considered with the understanding that such statements involve a variety of risks and uncertainties, known and unknown, and may be affected 15 MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION by inaccurate assumptions. Consequently, no forward-looking statement can be guaranteed and actual results may vary materially. Many factors could cause actual results to differ materially from the Company's forward-looking statements. Among these factors are: (1) competitive pressure to reduce prices; (2) the ability to gain or maintain market share in an intensely competitive global market; (3) the success of our global strategy to develop brand differentiation and brand loyalty; (4) our ability to control operating and selling costs and to maintain profit margins during industry downturns; (5) the success of our Brazilian businesses operating in a challenging and volatile environment; (6) continuation of our strong relationship with Sears, Roebuck and Co. in North America which accounted for approximately 18% of our consolidated net sales of $10.5 billion in 1999; (7) currency exchange rate fluctuations in Latin America, Europe, and Asia that could affect our consolidated balance sheet and income statement; and (8) social, economic, and political volatility in developing markets. The company undertakes no obligation to update every forward-looking statement, and investors are advised to review disclosures by the company in our filings with the Securities and Exchange Commission. It is not possible to foresee or identify all factors that could cause actual results to differ from expected or historic results. Therefore, investors should not consider the foregoing factors to be an exhaustive statement of all risks, uncertainties, or factors that could potentially cause actual results to differ. 16 PART II. OTHER INFORMATION -------------------------- WHIRLPOOL CORPORATION AND SUBSIDIARIES Quarter Ended March 31, 2000 Item 6. Exhibits and Reports on Form 8-K - ----------------------------------------- a. The following are included herein: (27) Financial Data Schedule (99) Computation of the ratios of earnings to fixed charges b. The registrant filed the following Current Reports on Form 8-K for the quarterly period ended March 31, 2000. A Current Report on Form 8-K dated January 24, 2000 pursuant to Item 5, "Other Events," to announce the Company's earnings for the fourth quarter and full year 1999. A Current Report on Form 8-K dated February 15, 2000 pursuant to Item 5, "Other Events," concerning the registrant's announcement that the Board of Directors had authorized an extension of the stock repurchase program to $1 billion. A Current Report on Form 8-K dated March 15, 2000 pursuant to Item 5, "Other Events," to confirm the analyst estimates of earnings for full year 2000 results, announce long-term financial performance goals, and the anticipated introduction of new products to the global market. 17 SIGNATURES ---------- Pursuant to the requirements 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) By /s/ Mark E. Brown ------------------------------- Mark E. Brown Executive Vice President and Chief Financial Officer (Principal Financial Officer) May 12, 2000 18 EX-99 2 COMPUTATION OF RATIOS EXHIBIT 99 RATIOS OF EARNINGS TO FIXED CHARGES WHIRLPOOL CORPORATION AND SUBSIDIARIES (dollars in millions) Three Months Ended March 31, 2000 ------------------ Pretax earnings $ 188.0 Portion of rents representative of the interest factor 4.4 Interest on indebtedness 37.5 Amortization of debt expense and premium .2 WFC preferred stock dividend 1.0 ---------- Adjusted income $ 231.1 ========== Fixed charges Portion of rents representative of the interest factor $ 4.4 Interest on indebtedness 37.5 Amortization of debt expense and premium 0.2 WFC preferred stock dividend 1.0 ---------- $ 43.1 ========== Ratio of earnings to fixed charges 5.36 ========== Ratio of earnings to fixed charges at March 31, 1999 0.91 ========== 19 EX-27 3 FINANCIAL DATA SCHEDULE
5 This schedule contains summary financial information extracted from First Quarter 10Q for Whirlpool Corporation and is qualified in its entirety by reference to such financial statements. 1,000,000 3-MOS DEC-31-1999 JAN-01-2000 MAR-31-2000 175 0 1598 127 1237 3321 5183 3035 6964 3462 520 0 0 84 1815 6964 2590 2590 1942 2355 8 0 (38) 188 71 112 0 0 0 112 1.53 1.52
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