UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
(X) Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the period ended September 30, 1996
or
( ) Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from _________________ to____________________
Commission File Number: 1-655 ________________________________________
Maytag Corporation
(Exact name of registrant as specified in its charter)
Delaware 42-0401785
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
403 West 4th Street North, Newton, Iowa 50208
(Address of principal executive offices) (Zip Code)
515-792-7000
(Registrant's telephone number, including area code)
______________________________________________________________________
(Former name, former address and former fiscal year, if changed since last
report.)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15 (d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days. Yes_x_
No___
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of September 30, 1996:
Common Stock, $1.25 Par Value - 100,139,088
Page 1 of 17<PAGE>
FORM 10-Q
MAYTAG CORPORATION
Quarter Ended September 30, 1996
I N D E X
Page
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Statements of Consolidated Income (Loss) 3
Condensed Statements of Consolidated Financial Condition 4
Condensed Statements of Consolidated Cash Flows 6
Notes to Condensed Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
PART II OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 14
Signatures 15
Computation of Ratio of Earnings to Fixed Charges 16
Financial Data Schedule 17
2<PAGE>
Part I FINANCIAL INFORMATION
Item 1. Financial Statements
MAYTAG CORPORATION
Condensed Statements of Consolidated Income (Loss)
(Unaudited)
(In thousands except per share data)
Third Quarter Ended Nine Months Ended
September 30 September 30
1996 1995 1996 1995
Net sales $ 742,850 $ 726,371 $2,228,715 $2,349,983
Cost of sales 537,762 538,741 1,613,985 1,740,796
Gross profit 205,088 187,630 614,730 609,187
Selling, general and
administrative
expenses 125,029 113,248 376,151 382,573
Restructuring charge 40,000
Operating income 80,059 74,382 198,579 226,614
Interest expense (9,674) (11,355) (31,034) (40,891)
Loss on business
disposition (140,792)
Settlement of lawsuit (16,500) (16,500)
Other - net (837) 3,477 1,118 3,679
Income before income
taxes, minority
interest and
extraordinary item 69,548 50,004 168,663 32,110
Income taxes 27,124 20,001 65,778 63,722
Income (loss) before
minority interest and
extraordinary item 42,424 30,003 102,885 (31,612)
Minority interest (246) (246)
Income (loss) before
extraordinary item 42,178 30,003 102,639 (31,612)
Extraordinary item -
loss on early
retirement of debt (1,548) (2,057) (1,548) (5,480)
Net income (loss) $ 40,630 $ 27,946 $ 101,091 $ (37,092)
Income (loss) per
weighted average share
of Common stock:
Income (loss) before
extraordinary item $ 0.42 $ 0.28 $ 1.00 $ (0.30)
Extraordinary item -
loss on early
retirement of debt (0.02) (0.02) (0.02) (0.05)
Net income (loss) $ 0.40 $ 0.26 $ 0.98 $ (0.35)
Dividends per Common
share $ 0.140 $ 0.125 $ 0.420 $ 0.375
Weighted average shares
outstanding 100,793 107,312 102,709 107,053
See notes to condensed consolidated financial statements.
3<PAGE>
MAYTAG CORPORATION
Condensed Statements of Consolidated Financial Condition
September 30 December 31
1996 1995
(Unaudited)
(In thousands except per
share data)
ASSETS
Current assets
Cash and cash equivalents $ 12,379 $ 141,214
Accounts receivable 534,684 417,457
Inventories 345,270 265,119
Deferred income taxes 41,299 42,785
Other current assets 54,717 43,559
Total current assets 988,349 910,134
Noncurrent assets
Deferred income taxes 89,279 91,610
Pension investments 1,408 1,489
Intangible pension asset 91,291 91,291
Other intangibles 321,905 300,086
Other noncurrent assets 40,683 29,321
Total noncurrent assets 544,566 513,797
Property, Plant and Equipment 1,590,809 1,411,926
Less allowance for depreciation 777,044 710,791
Total property, plant and equipment 813,765 701,135
Total assets $ 2,346,680 $ 2,125,066
See notes to condensed consolidated financial statements.
4<PAGE>
MAYTAG CORPORATION
Condensed Statements of Consolidated Financial Condition - Continued
September 30 December 31
1996 1995
(Unaudited)
(In thousands except per
share data)
LIABILITIES AND SHAREOWNERS' EQUITY
Current liabilities
Notes payable $ 72,262 $ --
Accounts payable 194,286 142,676
Compensation to employees 65,124 61,644
Accrued liabilities 162,393 156,041
Restructuring reserve 28,829
Income taxes payable 3,141
Current maturities of long-term debt 58,992 3,201
Total current liabilities 581,886 366,703
Noncurrent liabilities
Deferred income taxes 10,648 14,367
Long-term debt 496,003 536,579
Postretirement benefits other than
pensions 443,770 428,478
Pension liability 70,922 88,883
Other noncurrent liabilities 76,512 52,705
Total noncurrent liabilities 1,097,855 1,121,012
Minority interest 68,963
Shareowners' equity
Preferred stock
Authorized - 24,000,000 shares
(par value $1.00 per share)
Issued - none
Common stock
Authorized - 200,000,000 shares
(par value $1.25 per share)
Issued - 117,150,593 shares,
including shares in
treasury 146,438 146,438
Additional paid-in capital 471,220 472,602
Retained earnings 402,185 344,346
Cost of Common stock in treasury
(1996 - 16,549,252 shares; 1995 -
11,745,395 shares) (354,656) (255,663)
Employee stock plans (55,005) (57,319)
Minimum pension liability adjustment (5,656) (5,656)
Foreign currency translation (6,550) (7,397)
Total shareowners' equity 597,976 637,351
Total liabilities and shareowners'
equity $ 2,346,680 $ 2,125,066
See notes to condensed consolidated financial statements.
5<PAGE>
MAYTAG CORPORATION
Condensed Statements of Consolidated Cash Flows
(Unaudited)
Nine Months Ended
September 30
1996 1995
(In thousands)
Operating activities
Net income (loss) $ 101,091 $ (37,092)
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Extraordinary item - loss on early retirement
of debt 1,548 5,480
Loss on business disposition 140,792
Depreciation and amortization 81,773 85,215
Deferred income taxes 98 (18,558)
Minority interest 246
Restructuring charge 40,000
Changes in selected working capital items
exclusive of business dispositions and
investment in joint venture:
Inventories (58,569) (9,445)
Receivables (68,864) (27,111)
Other current assets 10,197 23,887
Restructuring reserve (11,171)
Other current liabilities 25,080 (2,167)
Pension assets and liabilities (17,880) 12,439
Postretirement benefits 15,292 11,481
Other - net 13,291 11,835
Net cash provided by operating activities 132,132 196,756
Investing activities
Proceeds from business disposition (net of
cash in business sold of $15,783) 148,497
Investment in joint venture (net of cash
acquired of $5,174) (29,625)
Capital expenditures (146,343) (98,458)
Total investing activities (175,968) 50,039
Financing activities
Proceeds from issuance of notes payable 382,799 442,894
Repayment of notes payable (331,932) (472,702)
Proceeds from issuance of long-term debt 26,500
Repayment of long-term debt (20,356) (163,330)
Debt repurchase premiums (1,548) (5,480)
Stock repurchases (112,905)
Stock options exercised and other Common stock
transactions 14,846 12,686
Dividends (43,253) (40,386)
Total financing activities (85,849) (226,318)
Effect of exchange rates on cash 850 3,791
Increase (decrease) in cash and cash
equivalents (128,835) 24,268
Cash and cash equivalents at beginning of year 141,214 110,403
Cash and cash equivalents at end of period $ 12,379 $ 134,671
See notes to condensed consolidated financial statements.
6<PAGE>
MAYTAG CORPORATION
Notes to Condensed Consolidated Financial Statements
September 30, 1996
(Unaudited)
Note A: Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles
for interim financial information and with the instructions to Form 10-Q
and Article 10 of Regulation S-X. Accordingly, they do not include all of
the information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of
management, all adjustments considered necessary for a fair presentation
have been included. Operating results for the nine month period ended
September 30, 1996 are not necessarily indicative of the results that may
be expected for the year ended December 31, 1996. For further information,
refer to the consolidated financial statements and footnotes included in
the Maytag Corporation annual report on Form 10-K for the year ended
December 31, 1995.
Note B: Inventories
Inventories consist of the following (in thousands):
September 30 December 31
1996 1995
Finished products $238,583 $190,878
Work in process 51,101 37,506
Raw Materials 50,121 31,158
Supplies 5,465 5,577
$345,270 $265,119
Certain previously reported amounts have been reclassified to conform with
the current period presentation.
Note C: Restructuring
During the first quarter of 1996, the Company announced the restructuring
of its major home appliance business designed to strengthen its position in
the industry and to deliver improved results to both customers and
shareowners. This included the consolidation of separate organizational
units into a single operation responsible for all activities associated
with the manufacture and distribution of the Company's brands of major home
appliances and the closing of a cooking products plant in Indianapolis,
Indiana, and transfer of that production to the Company's plant in
Cleveland, Tennessee.
As a result of this restructuring, the Company recorded a one-time
restructuring charge of $40 million, or $24.4 million after-tax, in the
first quarter of 1996. This charge is primarily related to the costs
associated with the consolidation of cooking products manufacturing
activities and consolidation of activities of the previously separate
organizational units. Of this $40 million restructuring charge, it is
estimated that cash expenditures of approximately $24 million primarily
7<PAGE>
related to severance costs will be incurred in 1996. The non-cash charges
of approximately $16 million are primarily related to write-offs of
property, plant and equipment. During the first nine months of 1996, the
Company incurred approximately $11 million of costs, of which approximately
$9 million were cash expenditures, against the $40 million reserve
established for this restructuring.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
COMPARISON OF 1996 WITH 1995
NET SALES
Net sales in the third quarter of 1996 increased 2.3 percent from the third
quarter of 1995. Excluding sales of $10.0 million for the newly
established joint venture in China, net sales in the current quarter
increased 0.9 percent over the same quarter of the previous year. (See
discussion of this investment in "Liquidity and Capital Resources" section
of this Management Discussion and Analysis).
The North American home appliances segment had third quarter sales of
$694.6 million, up 1.3 percent from sales of $685.7 million in the third
quarter of 1995. While sales of new floor care products introduced in the
year resulted in increased sales, sales of major home appliances declined
from the same quarter of the previous year. Sales of major home appliances
were down from the third quarter of 1995 because of highly competitive
market conditions. The decline experienced was primarily associated with
private label sales to national accounts. The industry trade association
projects 1996 major home appliances shipments in the U.S. to exceed 1995
levels by approximately two percent and 1997 shipments to be slightly below
the current year level.
Vending equipment sales in the third quarter of 1996 were $38.2 million,
down 6.0 percent from the third quarter of 1995. Sales increased 2.6
percent compared to last year after excluding sales totaling $3.4 million
in the third quarter of 1995 made by a Dixie-Narco manufacturing operation
in Eastlake, Ohio ("Eastlake Operation") which designed and manufactured
currency validators and electronic components used in the gaming and
vending industries and which was sold in December 1995. Dixie-Narco's
headquarters and vending machine manufacturing facility in Williston, SC,
are not affected by this business disposition.
Net sales for the first nine months of 1996 decreased 5.2 percent from the
first nine months of 1995 as reported. Excluding 1995 sales totaling
$181.2 million made by the Company's home appliance operations in Europe
("European Operations") which were sold with a disposition date of June 30,
1995, sales in the first nine months of 1996, which includes sales of the
Chinese joint venture, increased 2.8 percent from the comparable period of
1995.
The North American home appliances segment had nine month sales of $2.087
billion, an increase of 3.6 percent from sales of $2.014 billion in the
first nine months of 1995. Sales of new floor care products have resulted
in significant year over year increases based in part on the Hoover brand
upright extractor which was previously the only product of this unique
design in the market. A major competitor entered the upright extractor
8<PAGE>
market in the third quarter of this year with a similar product. The
Company believes that the potential negative impact of this competing
product may be mitigated by the expansion of the market for products of
this type.
Vending equipment sales in the first nine months of 1996 were $131.9
million, down 14.7 percent from 1995. Vending equipment sales declined 7.6
percent compared to last year after excluding sales totaling $11.8 million
in the first nine months of 1995 made by the Eastlake Operation. The
decrease in sales is primarily a result of a decrease in domestic vender
sales due to a shift in customer preference from traditional venders to new
models of venders, which maximize the different sizes and types of beverage
selections. Dixie-Narco is currently unable to produce sufficient volume
of these new venders to meet market requirements due to lead times to
acquire production tooling. In addition to this decline in domestic vender
sales, export sales of glass front merchandisers were down from the
previous year.
GROSS PROFIT
Gross margin as a percent of sales in the third quarter of 1996 increased
to 27.6 percent of sales from 25.8 percent of sales in the third quarter of
1995. In the first nine months of 1996, gross margins increased to 27.6
percent of sales from 25.9 percent of sales in the same period of last
year. The increase in year to date gross margin performance is due to the
divestiture of the lower margin European Operations in 1995 as well as the
factors described below.
Gross margins increased in the home appliances segment primarily as a
result of lower raw material prices and more favorable brand and product
sales mix. These improvements were partially offset by an increase in
distribution costs related to the transition to the new regional
distribution centers. The increased distribution costs are expected to
continue throughout 1996 as the transition continues. Vending equipment
gross margins decreased due to lower sales volumes and an increase in
manufacturing costs associated with bringing new products into production.
As mentioned above, the Company experienced lower raw material prices in
the first nine months of 1996 compared to the same period in 1995. These
lower raw material prices accounted for approximately $12 million of
additional gross profit for the year. The Company expects lower raw
material prices to continue relative to 1995 throughout the remainder of
1996.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Third quarter selling, general and administrative expenses ("SG&A")
expenses increased to 16.8 percent of sales from 15.6 percent of sales in
1995. For the first nine months of 1996, SG&A expenses increased to 16.9
percent of sales from 16.3 percent of sales in 1995. The increase is
primarily due to an increase in advertising and sales promotion spending to
respond to competitive market conditions.
RESTRUCTURING CHARGE
During the first quarter of 1996, the Company announced the restructuring
of its major home appliance business designed to strengthen its position in
9<PAGE>
the industry and to deliver improved results to both customers and
shareowners. This included the consolidation of separate organizational
units into a single operation responsible for all activities associated
with the manufacture and distribution of the Company's brands of major home
appliances and the closing of a cooking products plant in Indianapolis,
Indiana, and transfer of that production to the Company's plant in
Cleveland, Tennessee.
As a result of this restructuring, the Company recorded a one-time
restructuring charge of $40 million, or $24.4 million after-tax, in the
first quarter of 1996. This charge is primarily related to the costs
associated with the consolidation of cooking products manufacturing
activities and consolidation of activities of the previously separate
organizational units. Of this $40 million restructuring charge, it is
estimated that cash expenditures of approximately $24 million primarily
related to severance costs will be incurred in 1996. The non-cash charges
of approximately $16 million are primarily related to write-offs of
property, plant and equipment. During the first nine months of 1996, the
Company incurred approximately $11 million of costs, of which approximately
$9 million were cash expenditures, against the $40 million reserve
established for this restructuring.
The Company originally estimated an additional $10 million of restructuring
costs, not included in the one-time restructuring charge, to be incurred
during 1996 and charged as an expense in the period when incurred.
Approximately $6 million of these additional restructuring costs, the
majority of which were cash expenditures, were incurred in the first nine
months of 1996. The Company currently anticipates that $2 million of these
on-going restructuring costs will be incurred in the fourth quarter of 1996
and the remainder in the first quarter of 1997.
OPERATING INCOME
Operating income for the third quarter of 1996 was $80.1 million, or 10.8
percent of sales, compared to $74.4 million, or 10.2 percent of sales, in
1995. Operating income for the North American home appliances segment
increased 3.4 percent to $80.6 million, or 11.6 percent of sales, in the
third quarter of 1996 from $77.9 million, or 11.4 percent of sales in the
third quarter of 1995. The increase in operating income is a result of the
improvement in gross profit mentioned above. Vending equipment operating
income decreased 56.1 percent to $1.8 million from $4.1 million in the
third quarter of 1995. The decrease in operating income is due to the
decrease in gross profit mentioned above.
For the first nine months of 1996, operating income was $198.6 million
compared to $226.6 million in the same period in 1995. However, excluding
the $40 million restructuring charge recorded in the first quarter of 1996,
operating income for the first nine months of 1996 was $238.6 million, or
10.7 percent of sales. This compares to operating income of $233.8
million, or 10.8 percent of sales, after excluding the results of the
European Operations in 1995.
Operating income for the North American home appliances segment in the
first nine months of 1996, excluding the $40 million restructuring charge,
increased to $244.5 million, or 11.7 percent of sales, an increase of 3.8
percent compared to $235.5 million, or 11.7 percent of sales, in the same
period in 1995. Vending equipment operating income decreased 46.1 percent
10<PAGE>
to $10.7 million, or 8.1 percent of sales, compared to $19.9 million, or
12.9 percent of sales, in the first nine months of 1995.
INTEREST EXPENSE
Interest expense in the current quarter decreased 14.8 percent from the
third quarter of 1995 and 24.1 percent from the first nine months of 1995
as a result of the debt reduction from the application of proceeds from the
sale of the Company's international operations and higher capitalized
interest related to capital projects.
OTHER INCOME AND EXPENSE
The prior year to date results reflect the impact of the sale of the
European Operations in the second quarter of 1995. The pre-tax loss from
the sale was $140.8 million and resulted in an after-tax loss of $135.4
million, or $1.27 per share. In the third quarter of 1995, the Company
recorded a $16.5 million charge to settle a lawsuit relating to the closing
of the former Dixie-Narco plant in Ranson, West Virginia. The after-tax
charge was $9.9 million, or $0.09 per share.
INCOME TAXES
The effective tax rate for the first nine months of 1996 decreased to 39
percent from 40 percent in 1995 excluding amounts relating to the loss on
the sale of the European Operations. This decrease is primarily due to the
realization of capital gains and the corresponding reduction to the
valuation allowances recorded against the deferred tax assets related to
the Company's capital loss carryforwards generated from the sale of the
European Operations in the second quarter of 1995.
EXTRAORDINARY ITEM
During the current quarter, the Company retired $17.5 million of long term
debt at a cost of $1.5 million after-tax, or $0.02 per share. During the
second and third quarters of 1995, the Company retired $116.5 million of
long-term debt at a cost of $5.5 million after-tax, or $0.05 per share
($0.03 and $0.02 for the second and third quarters of 1995, respectively).
NET INCOME
Net income in the third quarter of 1996 was $40.6 million, or $0.40 per
share, compared to net income of $27.9 million, or $0.26 per share in 1995.
The increase in net income is due to an increase in operating income, lower
interest expense, the lower effective tax rate and the 1995 charge for the
Dixie-Narco plant closing settlement. Net income related to the divested
Eastlake Operation was not significant to consolidated net income in the
third quarter of 1995.
Net income for the first nine months of 1996 was $101.1 million, or $0.98
per share, compared to a net loss of $37.1 million, or $0.35 per share in
1995 which reflected a $135.4 million after-tax loss on the sale of the
European Operations, a $9.9 million after-tax charge related to the Dixie-
Narco plant closing settlement, and the $5.5 million extraordinary item
from the early retirement of debt.
11<PAGE>
Special items in 1996 include the $24.4 million after-tax restructuring
charge in the first quarter of 1996 and $1.5 million of debt retirement
costs in the current quarter. Excluding these special items, as well as
the 1995 special items mentioned above, income for the first nine months of
1996 would have been $127.0 million, or $1.24 per share, compared to income
for the first nine months of 1995 of $113.6 million, or $1.06 per share.
LIQUIDITY AND CAPITAL RESOURCES
The Company's primary sources of liquidity are cash provided by operating
activities and external debt. Detailed information on the Company's cash
flows is presented in the Statements of Consolidated Cash Flows.
Net Cash Provided By Operating Activities: Cash flow generated from
operating activities consists of net income (loss) adjusted for certain
non-cash income and expenses and changes in working capital. Non-cash
income and expenses include items such as depreciation, amortization, the
restructuring charge and deferred income taxes. Working capital consists
primarily of accounts receivable, inventory, other current assets and other
current liabilities.
Net cash provided by operating activities in the first nine months of 1996
decreased from 1995 primarily due to a $40 million pension contribution
made in the first quarter of 1996 and an increase in inventory.
Total Investing Activities: The Company continually invests in its
businesses to improve product design and manufacturing processes and to
increase capacity when needed.
Capital expenditures for the first nine months of 1996 were $146.3 million
compared to $98.5 million in the first nine months of 1995. The higher
capital spending is due to the continuation of several major capital
projects that the Company plans to continue to implement over the next
several years. These projects include a new high efficiency clothes washer
and a complete redesign of the Company's refrigerator product lines.
Planned capital expenditures for 1996 are approximately $200 million and
relate to these projects as well as other ongoing production improvements
and product enhancements. Capital spending in 1996 includes approximately
$10 million of interest expense which will be capitalized as a result of
the major projects described above.
In the third quarter of 1996, the Company invested $35 million and
committed additional investments of $35 million for a 50.5% ownership in a
joint venture with a manufacturer of appliances in China. The results of
this operation are consolidated in the Company s financial statements and
reflect an adjustment for the minority interest of the joint venture.
In the second quarter of 1996, the Company announced plans to expand its
Hoover floor care division's manufacturing facility in El Paso, Texas. The
facility expansion will be used to add a new production line to manufacture
a new line of Hoover products. The capital expenditure, estimated to be
$47 million, is part of the Company's planned 1996 and 1997 capital
spending programs.
Total Financing Activities: Dividend payments for the first nine months of
1996 amounted to $43.4 million, or $0.42 per share, compared to $40.4
million, or $0.375 per share in the same period in 1995.
12<PAGE>
In the fourth quarter of 1995, the Company commenced a stock repurchase
program to buy up to 10.8 million shares of the Company's outstanding
Common stock. Through September 30, 1996, 8.1 million shares had been
repurchased in the program at a total cost of $167.7 million. The shares
repurchased favorably impacted earnings per share by $0.03 in the third
quarter of 1996. In the fourth quarter of 1996, the Company announced
plans to expand this program to buy an additional 5 million shares over a
non-specified period of time.
Any funding requirements for future capital expenditures and other cash
requirements in excess of cash on hand and generated from future operations
will be supplemented by the issuance of commercial paper, debt securities
and bank borrowings. The Company's commercial paper program is supported
by a credit agreement with a consortium of banks which provides revolving
credit facilities totaling $400 million. This agreement expires July 27,
2000 and includes covenants for interest coverage and leverage.
CONTINGENCIES/OTHER
A soft drink bottler, Buenos Aires Embotelladora Inc. ("BAESA"), previously
announced it was unable to pay amounts due on various bank loans totalling
approximately $500 million and was exploring alternatives with its lenders
to restructure its debt. BAESA has negotiated a standstill agreement with
its lenders which provides for payment of 30% of the interest which will
accrue and suspension of principal payments until March 31, 1997. The
Company had guaranteed bank loans in the amount of $19.8 million used to
finance the purchases of vending equipment from Dixie-Narco. In October of
1996, the Company purchased a guaranteed loan in the amount of $14.3
million from one of the banks and remains contingently liable on its
guarantees for the remaining bank loans of $5.5 million. Dixie-Narco also
has receivables owed by the customer totaling $1.6 million. The Company is
unable to project the ultimate settlement on the receivables and loans and
accordingly has established limited reserves for an unfavorable outcome.
In connection with the sale of the European Operations, the terms of the
contract provide for a post closing adjustment to the price. The post-
closing adjustment and certain warranty claims asserted by the buyer were
in dispute, but have been resolved in a manner satisfactory to both parties
and with no material impact to the Company. In connection with the sale
the Company has made various warranties to the buyer, including the
accuracy of tax net operating losses in the United Kingdom, and agreed to
indemnify the buyer for liabilities resulting from customer claims under
the "free flights" promotions in excess of the reserve balance at the time
of sale. There are limitations on the Company's liability in the event the
buyer incurs a loss as a result of breach of the warranties. The Company
does not expect any liability it might have under such warranties and
indemnity to have a material adverse effect on its financial condition.
As announced in 1995, the Company is conducting an in-home inspection
program to eliminate a potential problem with a small electrical component
in Maytag brand dishwashers. This inspection program is substantially
completed and the related costs have been recognized. Estimated future
costs associated with this aforementioned program have been reserved and
are not expected to have any material impact on future operating results.
13<PAGE>
MAYTAG CORPORATION
Exhibits and Reports on Form 8-K
September 30, 1996
PART II OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
(12) Computation of Ratio of Earnings to Fixed Charges
(27) Financial Data Schedule
(b) Reports on Form 8-K
The Company filed a Form 8-K dated August 20, 1996 under Item 7 for
the purpose of filing certain exhibits to the Company's Registration
Statement on Form S-3 (No. 33-35219). The Company disclosed that it
would be selling, from time to time, medium-term notes in an aggregate
amount up to $150 million.
The Company also filed a Form 8-K dated September 16, 1996 under
Item 5 announcing that it will invest approximately $70 million in a
series of joint ventures in laundry and refrigeration with the Hefei
Rongshida Group Corporation in Hefei, Anhui Province, the People's
Republic of China. The Company will own 50.5 percent in the joint
ventures which will operate under the name Hefei Rongshida. The joint
ventures have received approval from the provincial government in
Anhui.
14<PAGE>
MAYTAG CORPORATION
Signatures
September 30, 1996
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.
MAYTAG CORPORATION
Date November 14, 1996 s/s Gerald J. Pribanic
Gerald J. Pribanic
Executive Vice President and
Chief Financial Officer
s/s Steven H. Wood
Steven H. Wood
Vice President, Financial
Reporting and Audit and Chief
Accounting Officer
15<PAGE>
MAYTAG CORPORATION
Exhibit 12
Computation of Ratio of Earnings to Fixed Charges
(Amounts in thousands of dollars except ratios)
Nine
Months
Ended Year Ended December 31
9-30-96 1995 1994 1993 1992 1991
Consolidated pretax
income from
continuing
operations before
minority interest
and extraordinary
item $168,663 $59,804 $241,337 $89,870 $7,546 $123,417
Interest expense 31,034 52,087 74,077 75,364 75,004 75,159
Depreciation of
capitalized
interest 1,159 1,695 1,772 1,546 933 348
Interest portion of
rental expense 5,197 8,789 10,722 10,480 11,264 11,177
Earnings 206,053 122,375 327,908 177,260 94,747 210,101
Interest expense $ 31,034 $52,087 $74,077 $75,364 $75,004 $75,159
Interest capitalized 6,353 2,534 547 1,484 3,886 6,329
Interest portion of
rental expense 5,197 8,789 10,722 10,480 11,264 11,177
Fixed Charges $42,584 $63,410 $85,346 $87,328 $90,154 $92,665
Ratio of earnings to
fixed charges 4.84 1.93 3.84 2.03 1.05 2.27
16<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 12,379
<SECURITIES> 0
<RECEIVABLES> 554,606
<ALLOWANCES> 19,922
<INVENTORY> 345,270
<CURRENT-ASSETS> 988,349
<PP&E> 1,590,809
<DEPRECIATION> 777,044
<TOTAL-ASSETS> 2,346,680
<CURRENT-LIABILITIES> 581,886
<BONDS> 496,003
0
0
<COMMON> 146,438
<OTHER-SE> 451,538
<TOTAL-LIABILITY-AND-EQUITY> 2,346,680
<SALES> 2,228,715
<TOTAL-REVENUES> 2,228,715
<CGS> 1,613,985
<TOTAL-COSTS> 1,613,985
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 9,514
<INTEREST-EXPENSE> 31,034
<INCOME-PRETAX> 168,663
<INCOME-TAX> 65,778
<INCOME-CONTINUING> 102,639
<DISCONTINUED> 0
<EXTRAORDINARY> (1,548)
<CHANGES> 0
<NET-INCOME> 101,091
<EPS-PRIMARY> 0.98
<EPS-DILUTED> 0.98
</TABLE>
