EX-99 3 dex99.txt PRESS RELEASE DATED 02-05-2003 [LOGO] Whirlpool CORPORATION CONTACT: Whirlpool Corporation Media: Tom Kline, 269/923-3738 thomas_e_kline@email.whirlpool.com Financial: Thomas Filstrup, 269/923-3189 thomas_c_filstrup@email.whirlpool.com WHIRLPOOL CORP. REPORTS 4/th/ QUARTER AND FULL-YEAR RESULTS FOR 2002; COMPANY POSTS RECORD SALES; Results Include Charges to Complete Global Restructuring Effort BENTON HARBOR, Mich., Feb. 5, 2003--Whirlpool Corporation (NYSE:WHR) today announced fourth-quarter 2002 results, highlighted by record sales and a solid operating performance that was in line with expectations. Charges for the restructuring initiative and the company's previously announced write-off of aircraft-lease assets were reflected in a fourth-quarter net loss of $29 million, or $0.42 per diluted share, compared to net earnings of $21 million, or $0.31 per diluted share, in the prior year period. Excluding fourth-quarter charges, core earnings of $113 million increased 4 percent from the prior year period. Core earnings of $1.64 per diluted share compared to $1.58 per diluted share in the fourth quarter of 2001. Net sales of $2.9 billion increased 11 percent from the prior year period. Excluding consolidated sales from the company's acquisitions in 2002--Polar S.A. of Poland and Vitromatic S.A. de C.V. of Mexico--and the impact from currency translations, net sales increased 7 percent. For the full year, record net sales of $11 billion were up 6 percent from 2001, or 5 percent excluding consolidated sales from the company's acquisitions in 2002 and the impact from currency translations. "Despite the economic uncertainties in virtually every market in which we compete worldwide, our operations delivered record sales and a solid operating performance," said David R. Whitwam, Whirlpool's chairman and chief executive officer. "Much of the improvement is due to Whirlpool's brand and innovation strategies and the success of our new product introductions in every part of the world. During the quarter, we also recorded final charges for the company's global restructuring effort that began in December 2000. When fully implemented, the restructuring is expected to reduce annual costs by more than $200 million. The fourth-quarter contributions from restructuring, productivity and innovation have strengthened our global business portfolio and positioned our operations for continued growth in 2003." Fourth-Quarter Earnings Reconciliation The following table reconciles the comparison of 2002 and 2001 fourth-quarter earnings. The company believes this additional view of earnings provides shareholders with relevant information about the company's performance. The core, or non-GAAP, comparison of quarterly earnings excludes the following charges (after tax): the previously disclosed write-off of aircraft lease assets in discontinued operations; restructuring and related activities; recognition of goodwill impairment relating to an acquisition in Asia; and the completion of product recall-related activities. --more-- ADMINISTRATIVE CENTER-BENTON HARBOR, MICHIGAN 49022. TELEPHONE: 616-923-5000. www.whirlpoolcorp.com page two--Whirlpool Corp. Reports 4/th/ Qtr. And Full-Year Results for 2002
Fourth Qtr. 2002 Fourth Qtr. 2001 ------------------------ --------------------- Earnings EPS Earnings EPS ----------- ------- ----------- ------ in millions in millions Net earnings (loss) - GAAP $ (29) $ (0.42) $ 21 $ 0.31 Aircraft lease asset write-off 43 0.62 - - ---------- ------- --------- ------- Earnings from continuing operations $ 14 $ 0.20 $ 21 $ 0.31 Restructuring and related charges 84 1.23 91 1.32 Goodwill impairment 9 0.13 - - Charges related to product recall 6 0.08 (3) (0.05) ---------- ------- --------- ------- Total adjustments to earnings from continuing operations $ 99 $ 1.44 $ 88 $ 1.27 ---------- ------- --------- ------- Core earnings from operations $ 113 $ 1.64 $ 109 $ 1.58 ========== ======= ========= =======
Fourth Quarter Global Highlights . Improvement in operating performance was in line with expectations . North America sales were a record for the company . Europe and Asia posted improved sales and operating profit . Latin America operating profit improved significantly from the prior year . The company recorded charges to complete its global restructuring initiative . The company successfully completed the integration of Vitromatic S.A. de C.V. and Polar S.A. . With the addition of fourth-quarter introductions--including the KitchenAid brand Briva in-sink dishwasher, Whirlpool brand Polara refrigerated range, and the Gladiator GarageWorks brand line of innovative storage systems and appliances for the garage--the company set a record for the most product innovations in a single year. . Whirlpool brand introduced the Family Studio to the U.S. builder market in January 2003. Designed to transform the traditional laundry space, Family Studio brings together a full range of fabric-care products enclosed in custom cabinetry. Family Studio includes the Duet front loading washer/dryer pair, Personal Valet clothes vitalizer, a new fabric drying closet and other innovative fabric-care products. Fourth-Quarter Region Review Whirlpool North America delivered record sales of $1.9 billion during the quarter with a 16-percent improvement from the prior year period, or 9 percent excluding Whirlpool Mexico. Much of the improvement was based on the market success of innovative products introduced in 2002 by the Whirlpool and KitchenAid brands. Whirlpool Mexico also contributed record sales results during the quarter, a reflection of the company's success in integrating the 2002 acquisition. Operating profit was down slightly from the previous year period due to reduced pension credit, higher spending for brand advertising and innovation initiatives, and reduced production volume to balance inventory levels during the quarter. The Whirlpool brand Duet front loading washer/dryer pair continued to generate strong consumer interest and demand in the market. U.S. appliance industry unit shipments increased 7 percent compared to the prior year. --more-- page three--Whirlpool Corp. Reports 4/th/ Qtr. And Full-Year Results for 2002 Whirlpool Europe's sales of $623 million improved 13 percent, or 2 percent excluding currency translations, in a market where industry unit shipments declined by 3 percent. Within a region environment of low GDP growth, declining demand and aggressive pricing, the company delivered an operating profit margin improvement of 1.2 percentage points compared to the prior year period. Contributing to the improvement was the market success of new product innovations--including the Whirlpool brand Duet washer and the new European side-by-side refrigerator--productivity gains and benefits from restructuring. Whirlpool Latin America's performance was affected by economic and political factors in Brazil and throughout the region. Sales of $316 million were down 12 percent, or up 9 percent excluding currency translations. Operating profit improved 12 percent from the prior-year period. The improvement was due to increased production of appliances for export sales through Whirlpool's worldwide distribution network, and savings from productivity and restructuring initiatives. Appliance industry unit shipments were flat compared to the prior year period. Whirlpool Asia delivered record sales and operating profit during the quarter. Sales of $108 million grew by 13 percent, and operating profit margin improved by 1.4 percentage points. The results were driven by strong growth in China and continuing growth in the company's leading market position in India. Final Charges Recorded for Global Restructuring Initiative During the quarter, the company recorded restructuring and related charges of $107 million pre-tax ($84 million after-tax). The charges relate to manufacturing rationalization initiatives in North America, Europe, Latin America and Asia. The fourth-quarter costs were the final charges associated with Whirlpool's global restructuring initiative first announced in December 2000. In total, the initiative has resulted in restructuring and related charges of $373 million. When fully implemented, the global restructuring is expected to result in annualized savings of more than $200 million. Pension Equity Adjustments, Expenses and Assumptions Due to the decline of the U.S. equity markets and the resulting lower value of the company's pension fund assets at Dec. 31, 2002, the company was required to record an additional minimum pension liability. As a result, the company recorded a $151 million, after tax, non-cash charge to equity in the fourth quarter. As previously announced, Whirlpool expects to recognize a $63 million pension expense in 2003, based on lower asset-return rate and discount-rate assumptions associated with the company's U.S. pension plans. For 2003, the rate-of-return assumption for the company's U.S. plans is 8 3/4 percent, down from 10 percent in 2002. The discount rate is 6 3/4 percent, down from 7 1/2 percent in 2002. The company also currently anticipates a $20 million cash contribution to its U.S. pension fund in 2003. Full-Year Results For the year, the company reported a net loss of $394 million, or $5.68 per diluted share compared to net earnings of $21 million, or $0.31 per diluted share, in 2001. Full-year net earnings were significantly affected by a non-cash, after-tax goodwill impairment charge of $613 million related to a change in accounting principle; a $121 million after-tax charge for restructuring and related activities; and a $43 million after-tax write-off of aircraft lease assets in discontinued operations. --more-- page four--Whirlpool Corp. Reports 4/th/ Qtr. And Full-Year Results for 2002 Excluding one-time charges, full-year core earnings of $420 million, or $6.07 per diluted share, compared to $371 million, or $5.45 per diluted share, in 2001. Full-year net sales of $11 billion compared to $10.3 billion in 2001. Free cash flow of $290 million exceeded the company's full-year forecast. Outlook "Entering 2003, economic uncertainty continues in most markets in which we participate," said Whitwam. "Nevertheless, based on the ongoing savings and efficiencies resulting from our completed restructuring initiative and other productivity efforts, Whirlpool is well positioned to manage these uncertainties. We also expect the cross-region benefits of our unique global platform and the ongoing innovation activities by our global brands to drive Whirlpool's growth and leadership position throughout 2003." Based on current economic and industry forecasts for markets around the world, the company expects full-year earnings in 2003 to be in the range of $6.20 to $6.40 per share. Additional operating segment information is available in the "Investors" section of www.whirlpoolcorp.com. At 9:30 a.m. (ET) Wednesday, Feb. 5, 2003, the company will be hosting a conference call, which can be heard by visiting www.whirlpoolcorp.com and clicking on the "Investors" button and then the "Conference Call Audio" menu item. Whirlpool Corporation is the world's leading manufacturer and marketer of major home appliances, with annual sales of over $11 billion, 65,000 employees, and nearly 50 manufacturing and technology research centers around the globe. The company markets Whirlpool, KitchenAid, Brastemp, Bauknecht, Consul and other major brand names to consumers in more than 170 countries. Additional information about the company can be found on the Internet at www.whirlpoolcorp.com. This news release contains forward-looking statements, as that term is defined in the Private Securities Litigation Reform Act of 1995. In addition to the expected appliance industry results for 2003 noted in this news release, there are certain factors that could cause results to differ materially from those anticipated by some of the statements made. These factors are listed in the company's most recently filed Form 10-Q and/or Form 10-K. # # # CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) WHIRLPOOL CORPORATION FOR THE PERIOD ENDED DECEMBER 31 (millions of dollars except share and dividend data)
Three Months Ended Pro-forma Three Months Ended ---------------------------------- -------------------------------- 2002 2001 2002 2001 ------------ ----------- ---------- -------------- Net sales $ 2,947 $ 2,647 $ 2,947 $ 2,647 EXPENSES: Cost of products sold 2,266 1,989 2,251 1,971 Selling, general and administrative 457 436 449 430 Intangible amortization 10 7 1 7 Product recall costs 9 (5) - - Restructuring costs 85 83 - - ------------ ----------- ---------- --------- 2,827 2,510 2,701 2,408 ------------ ----------- ---------- --------- OPERATING PROFIT 120 137 246 239 OTHER INCOME (EXPENSE): Interest and sundry income (expense) (22) (25) (22) (25) Interest expense (35) (34) (35) (34) ------------ ----------- ---------- --------- EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND OTHER ITEMS 63 78 189 180 Income taxes 42 46 65 58 ------------ ----------- ---------- --------- EARNINGS CONTINUING OPERATIONS BEFORE EQUITY EARNINGS AND MINORITY INTERESTS 21 32 124 122 Equity in earnings (loss) of affiliated companies (2) (6) (2) (6) Minority interests (5) (5) (9) (7) ------------ ----------- ---------- --------- EARNINGS FROM CONTINUING OPERATIONS 14 21 113 109 Loss from discontinued operations, net of tax (43) - - - ------------ ----------- ---------- --------- NET EARNINGS (LOSS) $ (29) $ 21 $ 113 $ 109 ============ =========== ========== ========= Per share of common stock: Basic earnings from continuing operations $ .20 $ .31 $ 1.65 $ 1.62 Loss from discontinued operations, net of tax (.63) - - - ------------ ----------- ---------- --------- Basic net earnings (loss) $ (.43) $ .31 $ 1.65 $ 1.62 ============ =========== ========== ========= Diluted earnings from continuing operations $ .20 $ .31 $ 1.64 $ 1.58 Loss from discontinued operations, net of tax (.62) - - - ------------ ----------- ---------- --------- Diluted net earnings (loss) $ (.42) $ .31 $ 1.64 $ 1.58 ============ =========== ========== ========= Dividends declared $ .34 $ .34 $ .34 $ .34 ============ =========== ========== =========
Note: Pro-forma results exclude restructuring and related charges within COGS and SG&A in 2002 and 2001, an impairment charge related to aircraft leases in 2002, goodwill write-off of an Asian entity in 2002, and costs associated with a product recall initiated in 2001. CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) WHIRLPOOL CORPORATION FOR THE PERIOD ENDED DECEMBER 31 (millions of dollars except share and dividend data)
Year-to-Date Pro-forma Year-to-Date ----------------------- ----------------------- 2002 2001 2002 2001 ---------- ---------- ---------- ---------- Net sales $ 11,016 $ 10,343 $ 11,016 $ 10,343 EXPENSES: Cost of products sold 8,464 7,925 8,421 7,872 Selling, general and administrative 1,736 1,639 1,719 1,630 Intangible amortization 14 28 5 28 Product recall costs 9 295 - - Restructuring costs 101 150 - - ---------- ---------- ---------- ---------- 10,324 10,037 10,145 9,530 ---------- ---------- ---------- ---------- OPERATING PROFIT 692 306 871 813 OTHER INCOME (EXPENSE): Interest and sundry income (expense) (54) (51) (53) (51) Interest expense (143) (162) (143) (162) ---------- ---------- ---------- ---------- EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND OTHER ITEMS 495 93 675 600 Income taxes 193 43 233 207 ---------- ---------- ---------- ---------- EARNINGS CONTINUING OPERATIONS BEFORE EQUITY EARNINGS AND MINORITY INTERESTS 302 50 442 393 Equity in earnings (loss) of affiliated companies (27) (4) (5) (4) Minority interests (13) (12) (17) (18) ---------- ---------- ---------- ---------- EARNINGS FROM CONTINUING OPERATIONS 262 34 420 371 Loss from discontinued operations, net of tax (43) (21) - - Cumulative effect of change in accounting principle, net of tax (613) 8 - - ---------- ---------- ---------- ---------- NET EARNINGS (LOSS) $ (394) $ 21 $ 420 $ 371 ========== ========== ========== ========== Per share of common stock: Basic earnings from continuing operations $ 3.86 $ .51 $ 6.19 $ 5.56 Loss from discontinued operations, net of tax (.62) (.32) - - Cumulative effect of change in accounting principle, net of tax (9.03) .12 - - ---------- ---------- ---------- ---------- Basic net earnings (loss) $ (5.79) $ .31 $ 6.19 $ 5.56 ========== ========== ========== ========== Diluted earnings from continuing operations $ 3.78 $ .50 $ 6.07 $ 5.45 Loss from discontinued operations, net of tax (.62) (.31) - - Cumulative effect of change in accounting principle, net of tax (8.84) .12 - - ---------- ---------- ---------- ---------- Diluted net earnings (loss) $ (5.68) $ .31 $ 6.07 $ 5.45 ========== ========== ========== ========== Dividends declared $ 1.36 $ 1.36 $ 1.36 $ 1.36 ========== ========== ========== ==========
Note: Pro-forma results exclude changes in accounting principles in 2002 and 2001, restructuring and related charges within COGS and SG&A in 2002 and 2001, impairment charges related to aircraft leases in 2002 and 2001, a minority investment write-off in a European business in 2002, goodwill write-off of an Asian entity in 2002, and costs associated with a product recall initiated in 2001. CONSOLIDATED BALANCE SHEETS WHIRLPOOL CORPORATION FOR THE YEARS ENDED DECEMBER 31 (millions of dollars)
(unaudited) 2002 2001 --------------- --------------- ASSETS CURRENT ASSETS Cash and equivalents $ 192 $ 316 Trade receivables, less allowances (2002: $94 ;2001: $93) 1,781 1,515 Inventories 1,089 1,110 Prepaid expenses 64 59 Deferred income taxes 83 176 Other current assets 118 135 --------------- --------------- Total Current Assets 3,327 3,311 OTHER ASSETS Investment in affiliated companies 7 117 Goodwill, net 161 685 Other intangibles, net 182 18 Deferred income taxes 437 354 Prepaid pension costs 43 208 Other 136 222 --------------- --------------- 966 1,604 PROPERTY, PLANT AND EQUIPMENT Land 87 56 Buildings 954 886 Machinery and equipment 4,793 4,372 Accumulated depreciation (3,496) (3,262) --------------- --------------- 2,338 2,052 --------------- --------------- Total Assets $ 6,631 $ 6,967 =============== =============== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Notes payable $ 221 $ 148 Accounts payable 1,631 1,427 Employee compensation 273 252 Deferred income taxes 100 102 Accrued expenses 664 623 Restructuring costs 122 77 Accrued product recalls - 239 Other current liabilities 283 195 Current maturities of long-term debt 211 19 --------------- --------------- Total Current Liabilities 3,505 3,082 OTHER LIABILITIES Deferred income taxes 117 177 Pension benefits 358 143 Postemployment benefits 487 480 Product warranty 57 45 Other liabilities 198 160 Long-term debt 1,092 1,295 --------------- --------------- 2,309 2,300 MINORITY INTERESTS 78 127 STOCKHOLDERS' EQUITY Common stock, $1 par value: 87 86 Shares authorized- 250 million Shares issued- 87.1 million (2002); 85.7 million (2001) Shares outstanding-68.2 million (2002); 67.2 million (2001) Paid-in capital 582 480 Retained earnings 1,985 2,470 Accumulated other comprehensive income (loss) (999) (697) Treasury stock - 18.9 million (2002); 18.4 million (2001) (916) (881) --------------- --------------- Total Stockholders' Equity 739 1,458 --------------- --------------- Total Liabilities and Stockholders' Equity $ 6,631 $ 6,967 =============== ===============
CONSOLIDATED STATEMENTS OF CASH FLOWS WHIRLPOOL CORPORATION FOR THE YEARS ENDED DECEMBER 31 (millions of dollars)
(Unaudited) 2002 2001 ------------------------------------------------------------------------------- ------------- ------------ OPERATING ACTIVITIES Net earnings (loss) $ (394) $ 21 Adjustments to reconcile net earnings (loss) to net cash flows provided by operating activities: Cumulative effect of a change in accounting principle 613 8 Equity in losses of affiliated companies, less dividends received 27 4 Loss on disposition of assets 32 33 Loss on discontinued operations 43 21 Depreciation and amortization 405 396 Changes in assets and liabilities, net of business acquisitions: Trade receivables (67) 116 Inventories 101 (26) Accounts payable 63 230 Product recalls (239) 239 Restructuring charges, net of cash paid 33 74 Taxes deferred and payable, net 157 (129) Tax paid on cross currency interest rate swap gain (86) - Other - net 124 37 ------------- ------------ Cash Provided By Operating Activities $ 812 $ 1,024 ------------- ------------ INVESTING ACTIVITIES Capital expenditures $ (430) $ (378) Acquisitions of businesses, less cash acquired (179) - Proceeds of cross-currency interest rate swaps - 209 ------------- ------------ Cash Used for Investing Activities $ (609) $ (169) ------------- ------------ FINANCING ACTIVITIES Net proceeds (repayments) of short-term borrowings $ (165) $ (790) Proceeds of long-term debt 6 301 Repayments of long-term debt (30) (80) Dividends paid (92) (113) Purchase of treasury stock (46) (43) Other 4 72 ------------- ------------ Cash Used for Financing Activities $ (323) $ (653) ------------- ------------ Effect of Exchange Rate Changes on Cash and Equivalents $ (4) $ - ------------- ------------ Increase (Decrease) in Cash and Equivalents $ (124) $ 202 Cash and Equivalents at Beginning of Period 316 114 ------------- ------------ Cash and Equivalents at End of Period $ 192 $ 316 ============= ============ ------------------------------------------------------------------------------------------------------------------ SUPPLEMENTAL INFORMATION- FREE CASH FLOW: ----------------------------------------- Cash Provided by Operating Activities $ 812 $ 1,024 Capital expenditures (430) $ (378) Dividends paid (92) (113) ------------------------------ Free cash flow $ 290 $ 533 ============================== ------------------------------------------------------------------------------------------------------------------
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