<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, 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
<PAGE>
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
<PAGE>
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS (UNAUDITED)
WHIRLPOOL CORPORATION
FOR THE PERIOD ENDED MARCH 31
(millions of dollars except share and dividend data)
<TABLE>
<CAPTION>
Three Months Ended
----------------------
2000 1999
---------- ---------
<S> <C> <C>
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.
</TABLE>
<PAGE>
CONSOLIDATED CONDENSED BALANCE SHEETS
WHIRLPOOL CORPORATION
(millions of dollars)
<TABLE>
<CAPTION>
March 31 December
2000 1999
(Unaudited) (Audited)
----------- ---------
<S> <C> <C>
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
======== ========
</TABLE>
<TABLE>
March 31 December 31
2000 1999
(Unaudited) (Audited)
----------- -----------
<S> <C> <C>
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
======= =======
</TABLE>
See notes to consolidated condensed financial statements.
<PAGE>
CONSOLIDATED CONDENSED STATEMENTS OF CHANGES IN EQUITY
WHIRLPOOL CORPORATION
FOR THE QUARTER ENDED MARCH 31
(millions of dollars)
<TABLE>
<CAPTION>
Accumulated
Other
Retained Comprehensive Treasury Stock/
Total Earnings Income Common Stock Paid-in-Capital
-------- ----------- --------------- -------------- -----------------
<S> <C> <C> <C> <C> <C>
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)
====== ====== ====== ====== ======
</TABLE>
See notes to consolidated condensed financial statements.
<PAGE>
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
WHIRLPOOL CORPORATION
FOR THREE MONTHS ENDED MARCH 31
(millions of dollars)
<TABLE>
<CAPTION>
2000 1999
------- -------
<S> <C> <C>
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
======= =======
</TABLE>
See notes to consolidated condensed financial statements.
<PAGE>
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
<PAGE>
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
<PAGE>
WHIRLPOOL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE C--INVENTORIES
Inventories consist of the following:
<TABLE>
<CAPTION>
March 31 December 31
2000 1999
----------- -----------
<S> <C> <C>
(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
=========== ===========
</TABLE>
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
<PAGE>
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
<PAGE>
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.
<TABLE>
<CAPTION>
Three Months North Latin Other and Total
Ended March 31 America Europe America Asia (Eliminations) Whirlpool
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
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
</TABLE>
11
<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, 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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<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 /s/ Mark E. Brown
-------------------------------
Mark E. Brown
Executive Vice President
and Chief Financial Officer
(Principal Financial Officer)
May 12, 2000
18
<PAGE>
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
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND> 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.
</LEGEND>
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0
0
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</TABLE>
