<PAGE>
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, 1995
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, 1995
--------------------- ------------------------------------
Common stock, par value $1 per share 73,754,505
PAGE 1 OF 20
<PAGE>
QUARTERLY REPORT ON FORM 10-Q
-----------------------------
WHIRLPOOL CORPORATION
---------------------
Quarter Ended March 31, 1995
INDEX OF INFORMATION INCLUDED IN REPORT
<TABLE>
<CAPTION>
Page
----
PART I - FINANCIAL INFORMATION
- ------------------------------
<S> <C>
Item 1. Financial Statements (Unaudited)
Consolidated Condensed Statements
of Earnings 3
Consolidated Condensed Balance Sheets 4
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 10
PART II - OTHER INFORMATION
- ---------------------------
Item 6. Exhibits and Reports on Form 8-K 16
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS (UNAUDITED) File: IS10Q1Q
WHIRLPOOL CORPORATION AND SUBSIDIARIES DLR 4/26/95
THREE MONTHS ENDED March 31
(millions of dollars except share data) Supplemental Consolidating Data
----------------------------------------------------
Whirlpool Corporation Whirlpool with WFC Whirlpool Financial
(Consolidated) on an Equity Basis Corporation (WFC)
-------------------------- ------------------------- -------------------------
1995 1994 1995 1994 1995 1994
----------- ------------ ----------- ----------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
REVENUES
Net sales $1,939 $1,832 $1,939 $1,832 $ - $ -
Financial services 46 38 - - 52 44
------ ------ ------ ------ --- ---
1,985 1,870 1,939 1,832 52 44
EXPENSES
Cost of products sold 1,438 1,365 1,438 1,365 - -
Selling and administrative 396 347 372 330 30 23
Financial services interest 16 13 - - 18 15
Intangible amortization 6 5 6 5 - -
------ ------ ------ ------ --- ---
1,856 1,730 1,816 1,700 48 38
------ ------ ------ ------ --- ---
OPERATING PROFIT 129 140 123 132 4 6
OTHER INCOME (EXPENSE)
Interest and sundry (2) 1 (6) 1 4 -
Interest expense (29) (27) (27) (25) - -
------ ------ ------ ------ --- ---
EARNINGS BEFORE TAXES AND
OTHER ITEMS 98 114 90 108 8 6
Income Taxes 39 46 36 44 3 2
------ ------ ------ ------ --- ---
EARNINGS BEFORE EQUITY EARNINGS
AND OTHER ITEMS 59 68 54 64 5 4
Equity in WFC - - 4 3 - -
Equity in affiliated companies 18 3 18 3 - -
Minority interests (2) (4) (1) (3) (1) (1)
------ ------ ------ ------ --- ---
NET EARNINGS $ 75 $ 67 $ 75 $ 67 $ 4 $ 3
====== ====== ====== ====== === ===
Per share of Common Stock:
Primary earnings $ 1.00 $ 0.90
====== ======
Fully diluted earnings $ 0.98 $ 0.88
====== ======
Cash dividends $0.340 $0.305
====== ======
</TABLE>
See notes to consolidated condensed financial statements
3
<PAGE>
<TABLE>
<CAPTION>
File: BSQ1395.XLS
CONSOLIDATED CONDENSED BALANCE SHEETS JLA 4/26/95
WHIRLPOOL CORPORATION AND SUBSIDIARIES
(millions of dollars) Supplemental Consolidating Data
--------------------------------------------------------
Whirlpool Corporation Whirlpool with WFC Whirlpool Financial
(Consolidated) on an Equity Basis Corporation (WFC)
-------------------------- --------------------------------------------------------
March 31 December 31 March 31 December 31 March 31 December 31
1995 1994 1995 1994 1995 1994
(Unaudited) (Audited) (Unaudited) (Audited) (Unaudited) (Audited)
------------ ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
CURRENT ASSETS
Cash and equivalents $ 87 $ 72 $ 59 $ 51 $ 28 $ 21
Trade receivables, less allowances
(1995--$40; 1994--$38) 1,014 1,001 1,014 1,001 - -
Financing receivables and leases,
less allowances
(1995--$16; 1994--$15) 938 866 - - 938 866
Inventories 1,079 838 1,079 838 - -
Other current assets 281 301 270 287 11 14
------- ------- ------- ------- ------ ------
TOTAL CURRENT ASSETS 3,399 3,078 2,422 2,177 977 901
Investments and other assets 826 690 1,084 943 1 -
Financing receivables and leases,
less allowances
(1995--$33; 1994--$31) 692 717 - - 692 717
Intangibles, net 794 730 794 730 - -
------- ------- ------- ------- ------ ------
2,312 2,137 1,878 1,673 693 717
Property, plant and equipment 3,190 3,101 3,164 3,075 26 26
Accumulated depreciation (1,736) (1,661) (1,719) (1,645) (17) (16)
------- ------- ------- ------- ------ ------
1,454 1,440 1,445 1,430 9 10
------- ------- ------- ------- ------ ------
TOTAL ASSETS $ 7,165 $ 6,655 $ 5,745 $ 5,280 $1,679 $1,628
======= ======= ======= ======= ====== ======
</TABLE>
See notes to consolidated condensed financial statements
4
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED CONDENSED BALANCE SHEETS File: BSQ1395.XLS
WHIRLPOOL CORPORATION AND SUBSIDIARIES JLA 4/26/95
(millions of dollars) Supplemental Consolidating Data
--------------------------------------------------------
Whirlpool Corporation Whirlpool with WFC Whirlpool Financial
(Consolidated) on an Equity Basis Corporation (WFC)
------------------------- --------------------------------------------------------
March 31 December 31 March 31 December 31 March 31 December 31
1995 1994 1995 1994 1995 1994
(Unaudited) (Audited) (Unaudited) (Audited) (Unaudited) (Audited)
------------ ------------ ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Notes payable $1,588 $1,201 $ 564 $ 262 $1,024 $ 939
Accounts payable 830 843 783 795 47 48
Other current liabilities 899 944 886 924 13 20
------ ------ ------ ------ ------ ------
TOTAL CURRENT LIABILITIES 3,317 2,988 2,233 1,981 1,084 1,007
Long-term debt 1,024 885 871 703 153 182
Other liabilities 953 964 845 853 108 111
------ ------ ------ ------ ------ ------
1,977 1,849 1,716 1,556 261 293
Minority interests 96 95 21 20 75 75
STOCKHOLDERS' EQUITY
Common Stock 80 80 80 80 8 8
Paid-in capital 217 214 217 214 26 26
Retained earnings 1,804 1,754 1,804 1,754 224 220
Unearned restricted stock (7) (8) (7) (8) - -
Currency translation adjustments (84) (93) (84) (93) 1 (1)
Treasury stock-at cost (235) (224) (235) (224) - -
------ ------ ------ ------ ------ ------
TOTAL STOCKHOLDERS' EQUITY 1,775 1,723 1,775 1,723 259 253
------ ------ ------ ------ ------ ------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $7,165 $6,655 $5,745 $5,280 $1,679 $1,628
====== ====== ====== ====== ====== ======
</TABLE>
See notes to consolidated condensed financial statements
5
<PAGE>
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
WHIRLPOOL CORPORATION AND SUBSIDIARIES
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31
(Millions of Dollars) Supplemental Consolidating Data
------------------------------------------
Whirlpool Corporation Whirlpool with WFC Whirlpool Financial
(Consolidated) on an Equity Basis Corporation (WFC)
--------------------- ------------------- -------------------
1995 1994 1995 1994 1995 1994
-------- -------- ------- ------- -------- -------
<C> <C> <C> <C> <C> <C>
OPERATING ACTIVITIES
Net earnings $ 75 $ 67 $ 75 $ 67 $ 4 $ 3
Equity in net earnings of affiliated
companies, less dividends received (12) - (12) - - -
Equity in net earnings of WFC - - (4) (3) - -
Depreciation and amortization 84 73 77 66 7 7
Provision for doubtful accounts 9 7 2 3 7 4
Change in receivables 16 (152) 16 (152) - -
Change in inventories (228) (109) (228) (109) - -
Change in payables (29) (2) (21) (2) (8) -
Other operating activities (49) (35) (35) (28) (14) (6)
-------- -------- -------- ------- -------- -------
CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES (134) (151) (130) (158) (4) 8
INVESTING ACTIVITIES
Net additions to properties (70) (61) (69) (60) (1) (1)
Financing receivables originated (771) (641) - - (771) (641)
Principal payments received on financing
receivables and leases 724 722 - - 724 722
Acquisitions of businesses, less cash acquired (89) - (89) - - -
Other investing activities 3 (10) - (6) 3 (5)
-------- -------- -------- ------- -------- -------
CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES (203) 10 (158) (66) (45) 75
FINANCING ACTIVITIES
Proceeds of short-term borrowings 4,071 3,347 1,742 1,209 2,329 2,138
Repayments of short-term borrowings (3,691) (3,146) (1,443) (950) (2,248) (2,196)
Proceeds of long-term debt 68 5 86 25 - -
Repayments of long-term debt (34) (105) (33) (104) (19) (21)
Repayments of non-recourse debt (6) (6) - - (6) (6)
Dividends paid (25) (23) (25) (23) - -
Purchase of treasury stock (34) - (34) - - -
Other financing activities 3 10 3 9 - 1
-------- -------- -------- ------- -------- -------
CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES 352 82 296 166 56 (84)
-------- -------- -------- ------- -------- -------
INCREASE (DECREASE) IN CASH AND EQUIVALENTS 15 (59) 8 (58) 7 (1)
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD 72 88 51 81 21 7
-------- -------- -------- ------- -------- -------
CASH AND EQUIVALENTS AT END OF PERIOD $ 87 $ 29 $ 59 $ 23 $ 28 $ 6
======== ======== ======== ======= ======== =======
</TABLE>
See notes to consolidated condensed financial statements
6
<PAGE>
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, 1995 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, 1994.
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 had no material effect on the Company's net earnings
or financial position.
NOTE B-BUSINESS ACQUISITIONS AND DISPOSITIONS
In February 1995, the Company expanded its presence in Asia by acquiring a
controlling interest in Kelvinator of India, Ltd. (KOI), a manufacturer and
marketer of refrigerators, for about $116 million in cash funded principally in
the first quarter. 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. Consolidation of KOI results will begin in the
second quarter. KOI annual sales were about $120 million for its fiscal year
ended June 30, 1994.
In December 1994, the Company announced plans to begin manufacturing and
distributing major home appliances in China. The Company has entered into two
agreements to acquire for about $90 million a majority interest in SMC Microwave
Products Co., Inc., a microwave oven manufacturer with current annual revenues
of about $100 million and to invest about $17 million for the majority interest
in Beijing Whirlpool Snowflake Electric Appliance Company, Limited, a new joint
venture to produce refrigerators. The Snowflake joint venture closed in the
first quarter of 1995 and will be funded over the course of the year. The SMC
joint venture and another joint venture arrangement with Shanghai Narcissus
Electric Appliance Corp., Ltd. to produce washing machines are expected to
receive government approval in the second quarter of 1995. The Company is
currently negotiating a fourth joint venture to produce air conditioners.
7
<PAGE>
WHIRLPOOL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE C--INVENTORIES
Inventories consist of the following:
March 31 December 31
1995 1994
-------- -----------
(millions of dollars)
Finished products $1,066 $ 832
Raw materials and work in process 232 222
------ ------
Total FIFO cost 1,298 1,054
Less excess of FIFO cost
over LIFO cost 219 216
------ ------
$1,079 $ 838
====== ======
NOTE D--AFFILIATED COMPANIES
Equity in the net earnings of affiliated companies is as follows:
Three Months Ended
1995 1994
-------- --------
(millions of dollars)
Brazilian affiliates $17 $3
Mexican affiliate - -
Other 1 -
--- --
$18 $3
=== ==
8
<PAGE>
WHIRLPOOL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE E--GEOGRAPHIC SEGMENTS
Whirlpool
Three Months North Other and with WFC on
Ended March 31 America Europe (Eliminations) an Equity Basis
- -------------------------------------------------------------------------------
(million of dollars)
Revenues
1995 $1,195 $633 $111 $1,939
1994 $1,173 $562 $ 97 $1,832
Operating Profit
1995 $ 83 $ 44 $ (4) $ 123
1994 $ 91 $ 31 $ 10 $ 132
WFC operations are primarily in North America.
9
<PAGE>
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, 1995 and 1994. This section of Management's Discussion
highlights the main factors affecting the changes in operating results.
The accompanying 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 for the first quarter increased 6% over 1994. Excluding the effects of
currency fluctuations, revenues increased 2% due primarily to unit volume
increases. North American revenues increased 2% due primarily to increased
volumes and pricing partially offset by product mix. North American major
product shipments were up about double the overall industry rise of one percent
despite the negative impact of significant downward inventory adjustments by a
major trade partner. North American industry-wide shipments are currently
expected to be up about 1% for the full year. European revenues increased 14%
but were essentially flat excluding the effects of currency fluctuations with
increased volumes and pricing offset by product mix. European unit volumes were
slightly ahead of an industry increase of about three percent. European
industry-wide shipments are currently expected to be up about 2% for the full
year. Price increases of approximately 1 to 3% were implemented in North
America and Europe effective January 1, 1995 in response to rising raw material
and component prices. Financial services revenues were up 18% as WFC continued
to expand its core inventory and consumer finance businesses.
Expenses
- --------
The relationship of cost of products sold to net sales improved slightly in the
first quarter of 1995 compared to 1994. North American margins were down
slightly in 1995 due to the impact of the trade partner inventory-adjustment
mentioned earlier, the difficult economic situation in Mexico, start-up costs
associated with the production of redesigned midsize refrigerators and higher
raw material and component costs partially offset by price increases. European
margins were up in 1995 due to productivity improvements, continued expense
control, benefits from restructuring, price increases and currency translation
partially offset by higher raw material and component costs.
The ratio of consolidated selling and administrative expenses as a percent of
revenues was up in the first quarter of 1995 compared to 1994. The appliance
business expense ratio increased from 18.0% in 1994 to 19.1% in 1995 due
primarily to a planned increase in costs related to the Company's strategy to
expand its presence in Asia. North American and European expenses as a percent
of revenue were up only slightly as compared to the prior period. Financial
services expenses as a percent of the related revenue were up primarily due to
increased operating expenses to support the expanding inventory and consumer
finance businesses.
10
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL CONDITION
Other Income and Expense
- ------------------------
The decrease in appliance business other income (expense) compared to the prior
year period is due primarily to foreign currency losses. However, the overall
impact of currency fluctuations in the first quarter was not significant due to
offsetting foreign currency gains reported elsewhere in the statement of
earnings. The increase in other income at WFC is due primarily to gains on the
termination of leases and the sale of other financial investments.
Income Taxes
- ------------
The consolidated provision for income taxes as a percent of earnings before
income taxes and other items was essentially flat at 39% in the first quarter of
1995 compared to 40% in 1994.
Equity in Affiliated Companies
- ------------------------------
Equity earnings were $18 million in the first quarter of 1995 compared to $3
million in 1994. Refer to Note D to the consolidated condensed financial
statements.
The Company's Brazilian affiliates generated equity earnings of $17 million in
the first quarter of 1995 compared to $3 million in 1994 reflecting the
increased consumer demand stimulated by the Brazilian government's new economic
plan implemented in mid-1994. Results were also favorably affected by certain
tax credit benefits, which will be realized through the third quarter, 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 reported break-even results in both the first
quarter of 1995 and 1994. Reduced shipments of 4% were offset by aggressive
cost reductions and a net translation gain from the Peso devaluation.
Economic volatility and government economic policy changes (including those
affecting exchange rates and tariffs) continue to affect consumer purchasing
power and the appliance industry as a whole in Mexico, Brazil and the entire
Latin American region. The outlook in these regions remains uncertain.
Net Earnings
- ------------
First quarter net earnings were $75 million or $1.00 per share compared to net
earnings of $67 million or $.90 per share in 1994.
11
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL CONDITION
CASH FLOWS
The statements of cash flows reflect the changes in cash and equivalents for the
three months ended March 31, 1995 and 1994 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 was $134 million in the first quarter of 1995
and $151 million in 1994 largely reflecting seasonal working capital needs of
the appliance business to build inventories.
Investing Activities
- --------------------
The principal recurring investing activities are property additions and
investments in and collection of financing receivables and leases. Net property
additions in the first quarter were $70 million in 1995 compared to $61 million
in 1994. 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 a net
$47 million use of cash in 1995 compared to a net $81 million source of cash in
1994 reflecting the expansion of WFC's inventory and consumer finance
businesses, as well as the 1994 liquidation of WFC's discontinued commercial
loan portfolio.
In February 1995, the Company expanded its presence in Asia by acquiring a
controlling interest in Kelvinator of India, Ltd. (KOI), a manufacturer and
marketer of refrigerators, for about $116 million in cash funded principally in
the first quarter. 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. Consolidation of KOI results will begin in the
second quarter. KOI annual sales were about $120 million for its fiscal year
ended June 30, 1994.
In December 1994, the Company announced plans to begin manufacturing and
distributing major home appliances in China. The Company has entered into two
agreements to acquire for about $90 million a majority interest in SMC Microwave
Products Co., Inc., a microwave oven manufacturer with current annual revenues
of about $100 million and to invest about $17 million for the majority interest
in Beijing Whirlpool Snowflake Electric Appliance Company, Limited, a new joint
venture to produce refrigerators. The Snowflake joint venture closed in the
first quarter of 1995 and will be funded over the course of the year. The SMC
joint venture and another joint venture arrangement with Shanghai Narcissus
Electric Appliance Corp., Ltd. to produce washing machines are expected to
receive government approval in the second quarter of 1995. The Company is
currently negotiating a fourth joint venture to produce air conditioners.
12
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL
CONDITION
Financing Activities
- --------------------
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 March 1995, the Company had
repurchased approximately 966,000 shares for $50 million.
FINANCIAL CONDITION AND OTHER MATTERS
The financial position of the Company remains strong as evidenced by the March
31, 1995 balance sheet. The Company's total assets are $7.2 billion and
stockholders' equity is $1.8 billion.
The overall debt to invested capital ratio at March 31, 1995 was up 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 seasonal working
capital requirements, the acquisition of KOI and the effect of European currency
movements on the Company's hedging strategy. The financial services debt to
invested capital ratio was essentially flat compared to December 31, 1994. 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
European currency cash flows and also hedge a portion of the Company's
investment in Whirlpool Europe. 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 or other income (expense)
depending on whether or not they relate to the investment hedge.
WFC's financing portfolio by business segment is as follows (in millions):
<TABLE>
<CAPTION>
March 31, 1995 December 31, 1994
-------------- -----------------
<S> <C> <C> <C> <C>
Inventory $ 722 44% $ 652 41%
Aerospace 452 28 465 29
Consumer 392 24 386 24
Commercial 18 1 25 2
Other 46 3 55 4
------ --- ------ ---
$1,630 100% $1,583 100%
====== ==== ====== ====
</TABLE>
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.
13
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL
CONDITION
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 had no 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.
14
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL
CONDITION
BUSINESS UNIT NET SALES AND OPERATING PROFIT
The following appliance business (WFC on an equity basis) data is presented as
supplemental information (in millions):
Net Sales by Business Unit were as follows:
<TABLE>
<CAPTION>
First Quarter
------------------
1995 1994 Increase/(Decrease)
------ ------ -------------------
<S> <C> <C> <C> <C>
North America $1,196 $1,173 $ 23 2%
Europe 615 541 74 14
Latin America 67 75 (8) (10)
Asia 62 45 17 36
Other (1) (2) 1 50
------ ------ ---- --
Total Appliance Business $1,939 $1,832 $107 6%
====== ====== ==== ==
Operating Profit by Business Unit was
as follows:
First Quarter
------------------
1995 1994 Increase/(Decrease)
------ ------ -------------------
<S> <C> <C> <C> <C>
North America $116 $119 $ (3) (2)%
Europe 44 31 13 42
Latin America 9 12 (3) (29)
Asia (11) (3) (8) -
Other (35) (27) (8) (30)
---- ---- ---- ---
Total Appliance Business $123 $132 $ (9) (7)%
==== ==== ==== ===
</TABLE>
For commentary regarding performance in North America and Europe, refer to
Results of Operations. 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 results were up,
despite being affected by pockets of economic instability. Asia had significant
shipment and revenue growth as compared to the prior year period but the
increased operating loss was due primarily to planned costs related to the
Company's strategy to expand its presence in Asia. The quarterly losses in Asia
are expected to diminish during the year as it begins to include results from
additional joint venture companies.
15
<PAGE>
PART II. OTHER INFORMATION
---------------------------
WHIRLPOOL CORPORATION AND SUBSIDIARIES
Quarter Ended March 31, 1995
Item 6. Exhibits and Reports on Form 8-K
- -----------------------------------------
a. The following are included herein:
(11) Computation of earnings per share
(27) Financial Data Schedule
(99) Computation of the ratios of earnings and fixed charges
b. Reports on Form 8-K:
The registrant filed a Current Report on Form 8-K dated February 20, 1995
concerning the following events: (i) the resignation of Harry W. Bowman,
Executive Vice President of the Company; (ii) an increase in the Company's
quarterly per share dividend to 34 cents and (iii) the resignation of
Didier Pineau-Valencienne from the Company's board of directors.
16
<PAGE>
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 Bradley J. Bell
-----------------------------
Bradley J. Bell
Vice President and Treasurer
(Principal Financial Officer)
May 3, 1995
20
<PAGE>
EXHIBIT 11 - COMPUTATION OF EARNINGS PER SHARE
WHIRLPOOL CORPORATION AND SUBSIDIARIES
(millions of dollars except earnings per share)
<TABLE>
<CAPTION>
Three Months Ended
March 31
------------------
1995 1994
------ ------
<S> <C> <C>
Primary
Average Shares Outstanding 73.7 73.6
Treasury Method (Average Market Price)
Stock Options 0.7 1.3
Restricted Stock (RSVP) 0.3 -
----- -----
Primary Average Shares Outstanding 74.7 74.9
===== =====
Primary Net Earnings $74.7 $67.3
===== =====
Earnings Per Share $1.00 $0.90
===== =====
Fully Diluted
Average Shares Outstanding 73.7 73.6
Treasury Method (Average Market Price
or End of Period, whichever is greater):
Stock Options 0.9 1.4
Restricted Stock (RSVP) 0.3 -
Assumed Conversion of Debt 2.2 2.4
----- -----
Fully Diluted Average Shares Outstanding 77.1 77.4
===== =====
Net Earnings $74.7 $67.3
Interest Expense, net of tax 1.0 1.2
----- -----
Fully Diluted Net Earnings $75.7 $68.5
===== =====
Earnings Per Share $0.98 $0.88
===== =====
</TABLE>
17
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND> THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
FIRST QUARTER 10-Q FOR WHIRLPOOL CORPORATION AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<CASH> 87
<SECURITIES> 0
<RECEIVABLES> 1,952
<ALLOWANCES> 56
<INVENTORY> 1,079
<CURRENT-ASSETS> 3,399
<PP&E> 3,190
<DEPRECIATION> 1,736
<TOTAL-ASSETS> 7,165
<CURRENT-LIABILITIES> 3,317
<BONDS> 1,024
<COMMON> 80
0
0
<OTHER-SE> 1,695
<TOTAL-LIABILITY-AND-EQUITY> 7,165
<SALES> 1,939
<TOTAL-REVENUES> 1,985
<CGS> 1,438
<TOTAL-COSTS> 1,454
<OTHER-EXPENSES> 6
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 29
<INCOME-PRETAX> 98
<INCOME-TAX> 39
<INCOME-CONTINUING> 75
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 75
<EPS-PRIMARY> 1.00
<EPS-DILUTED> .98
</TABLE>
<PAGE>
EXHIBIT 99 - COMPUTATION OF THE
RATIOS OF EARNINGS TO FIXED CHARGES
WHIRLPOOL CORPORATION AND SUBSIDIARIES
(dollars in millions)
<TABLE>
<CAPTION>
Three Months Ended
March 31, 1995
-----------------------------------
Appliance Financial Whirlpool
Business Services Corporation
--------- --------- -----------
<S> <C> <C> <C>
Pretax earnings $ 89.5 $ 8.1 $ 97.6
Portion of rents representative
of the interest factor 4.3 0.2 4.5
Interest on indebtedness 26.8 18.1 44.9
Amortization of debt expense
and premium 0.1 - 0.1
WFC preferred stock dividend - 1.1 1.1
------ ----- ------
Adjusted income $120.7 $27.5 $148.2
====== ===== ======
Fixed charges
- -------------
Portion of rents representative
of the interest factor $ 4.3 $ 0.2 $ 4.5
Interest on indebtedness 26.8 18.1 44.9
Amortization of debt expense
and premium 0.1 - 0.1
WFC preferred stock dividend - 1.1 1.1
------ ----- ------
$ 31.2 $19.4 $ 50.6
====== ===== ======
Ratio of earnings to
fixed charges 3.87 1.42 2.93
====== ===== ======
Ratio of earnings to
fixed charges at
March 31, 1994 4.67 1.45 3.60
====== ===== ======
</TABLE>
19
