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<SEC-DOCUMENT>0000950131-01-500133.txt : 20010319
<SEC-HEADER>0000950131-01-500133.hdr.sgml : 20010319
ACCESSION NUMBER: 0000950131-01-500133
CONFORMED SUBMISSION TYPE: 10-K405
PUBLIC DOCUMENT COUNT: 8
CONFORMED PERIOD OF REPORT: 20001231
FILED AS OF DATE: 20010316
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: WHIRLPOOL CORP /DE/
CENTRAL INDEX KEY: 0000106640
STANDARD INDUSTRIAL CLASSIFICATION: HOUSEHOLD APPLIANCES [3630]
IRS NUMBER: 381490038
STATE OF INCORPORATION: DE
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: 10-K405
SEC ACT:
SEC FILE NUMBER: 001-03932
FILM NUMBER: 1569841
BUSINESS ADDRESS:
STREET 1: WHIRLPOOL CNTR 2000 M 63
STREET 2: C/O CORPORATE SECRETARY
CITY: BENTON HARBOR
STATE: MI
ZIP: 49022-2692
BUSINESS PHONE: 6169235000
MAIL ADDRESS:
STREET 1: WHIRLPOOL CTR 2000 M 63
STREET 2: C/O CORPORATE SECRETARY
CITY: BENTON HARBOR
STATE: MI
ZIP: 49022-2692
FORMER COMPANY:
FORMER CONFORMED NAME: WHIRLPOOL SEEGER CORP
DATE OF NAME CHANGE: 19710824
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-K405
<SEQUENCE>1
<FILENAME>d10k405.txt
<DESCRIPTION>FORM 10-K405
<TEXT>
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K.--ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the fiscal year ended December 31, 2000
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 1-3932
WHIRLPOOL CORPORATION
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
Delaware 38-1490038
(State of Incorporation) (I.R.S. Employer Identification No.)
2000 North M-63, Benton Harbor, Michigan 49022-2692
(Address of principal executive offices) (Zip Code)
</TABLE>
Registrant's telephone number, including area code (616) 923-5000
Securities registered pursuant to Section 12(b) of the Act:
<TABLE>
<CAPTION>
Title of each class Name of each exchange on which registered
------------------- -----------------------------------------
<S> <C>
Common stock, par value $1.00 per share Chicago Stock Exchange and New York Stock Exchange
Preferred Stock Purchase Rights Chicago Stock Exchange and New York Stock Exchange
7 3/4% Debentures due 2016 New York Stock Exchange
</TABLE>
Securities registered pursuant to Section 12(g) of the Act:
NONE
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, and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K ((S)229.405 of this chapter) is not contained herein,
and will not be contained, to the best of the registrant's knowledge, in
definitive proxy or information statements incorporated by reference in Part
III of this Form 10-K or any amendment to this Form 10-K. X
The aggregate market value of the voting stock of the registrant held by
stockholders not including voting stock held by directors and executive
officers of the registrant and certain employee plans of the registrant (the
exclusion of such shares shall not be deemed an admission by the registrant
that any such person is an affiliate of the registrant) on March 2, 2001, was
$3,352,980,317.
On March 2, 2001, the registrant had 66,578,475 shares of common stock
outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the following documents are incorporated herein by reference
into the Part of the Form 10-K indicated:
<TABLE>
<CAPTION>
Part of Form 10-K
into which
Document incorporated
-------- -----------------
<S> <C>
The Company's Annual Report to Stockholders for the year ended
December 31, 2000 (the "Annual Report") Parts I, II and IV
The Company's proxy statement for the 2001 annual meeting of
stockholders (SEC File No. 1-3932) (the "Proxy Statement") Part III
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
PART I
ITEM 1. Business.
General
Whirlpool Corporation, the leading worldwide manufacturer and marketer of
major home appliances, was incorporated in 1955 under the laws of Delaware as
the successor to a business that traces its origin to 1898. The Company
manufactures in 13 countries under 11 major brand names and markets products
to distributors and retailers in more than 170 countries. As of December 31,
2000, the Company had approximately 61,000 employees. As used herein, and
except where the context otherwise requires, the terms "Company" and
"Whirlpool" include Whirlpool Corporation and its consolidated subsidiaries.
Products and Markets
The Company manufactures and markets a full line of major appliances and
related products, primarily for home use. The Company's principal products are
home laundry appliances, home refrigerators and freezers, home cooking
appliances, home dishwashers, room air-conditioning equipment, and mixers and
other small household appliances. Less than 10% of the Company's unit sales
volume is purchased from other manufacturers for resale by the Company. The
Company also produces hermetic compressors and plastic components, primarily
for the home appliance and electronics industries.
The following table sets forth information regarding the total revenue
contributed by each class of similar products which accounted for 10% or more
of the Company's consolidated revenue in 2000, 1999, and 1998:
<TABLE>
<CAPTION>
Year ended December 31 (millions of Percent in
dollars) 2000 2000 1999 1998
- ----------------------------------- ---------- ------- ------- -------
<S> <C> <C> <C> <C>
Home Refrigerators and Freezers............ 31% $ 3,165 $ 3,175 $ 3,149
Home Laundry Appliances.................... 30% $ 3,094 $ 3,091 $ 2,932
Home Cooking Appliances.................... 16% $ 1,636 $ 1,642 $ 1,625
Other...................................... 23% $ 2,430 $ 2,603 $ 2,617
---- ------- ------- -------
Net Sales................................ 100% $10,325 $10,511 $10,323
==== ======= ======= =======
</TABLE>
The Company has been the principal supplier of home laundry appliances to
Sears, Roebuck and Co. ("Sears") for over 80 years. The Company is also the
principal supplier to Sears of residential trash compactors and microwave hood
combinations and a major supplier to Sears of dishwashers, freestanding
ranges, and home refrigerators and freezers. The Company supplies products to
Sears for sale under Sears' Kenmore brand name. Sears has also been a major
outlet for the Company's Whirlpool and KitchenAid brand products since 1989.
In 2000, approximately 20% of the Company's net sales were attributable to
sales to Sears.
Major home appliances are marketed and distributed in the United States
under the Whirlpool, KitchenAid, Roper, and Estate brand names primarily to
retailers, buying groups, and builders. KitchenAid portable appliances, such
as mixers, are sold to retailers either directly or through sales
representatives. The Company sells products to the builder trade both directly
and through distributors. Major home appliances are manufactured and/or
distributed in Canada under the Inglis, Admiral, Speed Queen, Whirlpool,
Roper, and KitchenAid brand names. In Mexico, the Company's affiliate,
Vitromatic S.A., manufactures and markets major home appliances under the
Whirlpool, Acros, and Supermatic brand names. Some products are sold in
limited quantities by the Company to other manufacturers and retailers for
resale in North America under their respective brand names.
In Europe, Whirlpool markets and distributes its major home appliances
under the Whirlpool, Bauknecht, Ignis, Laden, and Algor brand names and its
portable appliances under the KitchenAid brand name. In addition
1
<PAGE>
to its extensive operations in Western Europe, the Company has sales
subsidiaries in Hungary, Poland, the Czech Republic, Slovakia, Greece,
Romania, Bulgaria, Latvia, Estonia, Lithuania, Croatia, and Morocco and
representative offices in Russia, Ukraine, and Slovenia. In certain Eastern
European countries and ex-Soviet states, products bearing the Whirlpool and
Ignis brand names are sold through distributors. The Company manufactures
refrigerators and freezers and markets a full line of products under the
Whirlpool, KIC, and Ignis brand names in South Africa. Whirlpool's European
operations also sell products carrying the Whirlpool, Bauknecht, Ignis, Algor,
and Fides brand names directly in Asia and to distributors and dealers in
Africa and the Middle East.
In Asia, the Company manufactures, markets and distributes its major home
appliances through three operating regions: (1) the South Asia region, based
in New Delhi, which includes India and the surrounding sub continent markets;
(2) the Asia Pacific region, based in Singapore, which includes Thailand,
Singapore, Korea, Japan, Australia, New Zealand, Hong Kong, the Philippines,
and the Pacific Islands, and through a joint venture, Taiwan; and (3) the
China region, based in Shanghai. The Company markets and sells its products in
Asia under the brand names Whirlpool, KitchenAid, Bauknecht, and Ignis.
In Latin America, the Company markets and distributes its major home
appliances through regional networks under the Whirlpool, Brastemp, Consul,
and Eslabon de Lujo brand names. Appliance sales and distribution in Brazil,
Argentina, Bolivia, and Chile are managed by the Company's Brazilian
subsidiary, and in Bolivia, Peru, Paraguay, and Uruguay through distributors.
Appliance sales and distribution in Central American countries, the Caribbean,
Venezuela, Colombia, and Ecuador are managed by Whirlpool's North America
Region and through distributors.
Competition
The major home appliance business is highly competitive. In most major
markets throughout the world, 2000 was a challenging year in the industry with
rising material costs, decreased consumer demand, and intense price
competition. In North America, there has been continued polarization in retail
distribution channels with most retailers either (1) offering little or no
customer service and competing solely on the basis of price, or (2) providing
value added services coupled with a brand building strategy. The Company
firmly believes that it can best compete in this environment by providing
value added products and services under its strong brand names. Adding
instability to the retail picture in 2000, in July, Circuit City, a leading
U.S. retailer, discontinued the sale of major home appliances, some of which
were purchased from Whirlpool.
The Company believes that, in terms of units sold, it is the largest North
American manufacturer of home laundry appliances and one of the largest North
American manufacturers of home refrigerators and freezers, room air
conditioning equipment, dishwashers, and cooking products. The Company
believes that in North America there are approximately five manufacturers of
major home appliances.
The Company believes that in Europe it is, in terms of units sold, one of
the three largest manufacturers and marketers of major home appliance
products, out of approximately 35 European manufacturers, the majority of
which manufacture a limited range of products for a specific geographic
region. In recent years there has been significant merger and acquisition
activity as manufacturers seek to broaden product lines and expand geographic
markets. The Company believes that some merger and acquisition activity will
continue, primarily by Western European manufacturers seeking alliances with
companies in Central and Eastern Europe. The Company believes that its Pan
European organizational structure and strategy of marketing brand names that
are recognized throughout the region are competitive advantages in the
European market.
The Company believes that it is well-positioned in the Latin American
appliance market due to its ability to offer a broad range of products under
well-recognized brand names to meet the specific requirements of consumers in
the region. The Company believes that it is about twice the size of its
nearest competitor and that there are approximately 20 manufacturers of major
home appliances in the region.
2
<PAGE>
In Asia, the major home appliance market is characterized by rapid growth
and is served by approximately 50 manufacturers of varying size and position
on a country-by-country basis. The Company believes that it is the industry
leader in the Indian market and it continues to establish itself throughout
the remainder of the region.
Competition in most of the Company's markets is based upon a wide variety
of factors, including principally product features, price, product quality and
performance, service, warranty, advertising and promotion. As a result of its
global position, the Company believes it has a competitive advantage by reason
of its ability to leverage engineering capabilities across regions, transfer
best practices, and economically purchase raw materials and component parts in
large volumes.
Other Information
The Company's interests outside the United States are subject to risks
which may be greater than or in addition to those risks which are currently
present in the United States. Such risks may include currency exchange rate
fluctuations; high inflation; the need for governmental approval of and
restrictions on certain financial and other corporate transactions and new or
continued business operations; the convertibility of local currencies;
government price controls; restrictions on the remittance of dividends,
interest, royalties, and other payments; restrictions on imports and exports;
duties; political and economic developments and instability; the possibility
of expropriation; uncertainty as to the enforceability of commercial rights
and trademarks; and various types of local participation in ownership.
The Company is generally not dependent upon any one source for raw
materials or purchased components essential to its business. In those areas
where a single supplier is used, alternative sources are generally available
and can be developed within the normal manufacturing environment, although
some unanticipated costs may be incurred in transitioning to a new supplier
where a prior single supplier is abruptly terminated. While there are pricing
pressures on some materials and significant demand for certain components, the
Company believes such raw materials and components will be available in
adequate quantities to meet anticipated production schedules.
Patents presently owned by the Company are considered, in the aggregate, to
be important to the conduct of the Company's business. The Company is licensed
under a number of patents, none of which individually is considered material
to its business. The Company is the owner of a number of trademarks and
registrations therefor in the U.S. and foreign countries. The most important
for its North American operations are the trademarks Whirlpool, KitchenAid,
the KitchenAid Mixer Shape, Estate, Roper, and Inglis. The most important
trademarks owned by the Company in Europe are Whirlpool, Bauknecht, Ignis, and
Laden. In Latin America, the most important trademarks owned by the Company
are Whirlpool, Brastemp, Consul, and Eslabon de Lujo. The most important
trademark owned by the Company in Asia is Whirlpool.
Expenditures for Company-sponsored research and engineering activities
relating to the development of new products and the improvement of existing
products are included in Note 1 of the Notes to Consolidated Financial
Statements in the Annual Report.
The Company's manufacturing facilities are subject to numerous laws and
regulations designed to protect or enhance the environment, many of which
require federal, state, or other governmental licenses and permits with regard
to wastewater discharges, air emissions, and hazardous waste management. These
laws are continually changing and, as a general matter, are becoming more
restrictive. The Company's policy is to seek to comply with all such laws and
regulations. When laws and regulations are inadequate, the Company has
established and is following its own standards consistent with its commitment
to environmental responsibility.
The Company believes that it is in compliance in all material respects with
all presently applicable federal, state, local, and other governmental
provisions relating to environmental protection in the countries in which it
3
<PAGE>
has manufacturing operations. Capital expenditures and expenses for
manufacturing operations directly attributable to compliance with such
provisions worldwide amounted to approximately $30 million in 1998, $19
million in 1999, and $22 million in 2000. The decrease from 1998 to 1999 is
attributable to the completion of air and water pollution control capital
improvement projects in 1998, as well as benefits from previous pollution
prevention projects. It is estimated that in 2001 environmental capital
expenditures and expenses for manufacturing operations will be approximately
$21 million. Capital expenditures and expenses for product related
environmental activities were not material in any of the past three years and
are not expected to be material in 2001.
The entire major home appliance industry, including the Company, must
contend with the adoption of stricter governmental energy and environmental
standards to be phased in over the next several years. These include the
general phase-out of ozone depleting chemicals used in refrigeration and
energy standards rulemakings for other selected major appliances produced by
the Company. Compliance with these various standards as they become effective
will require some product redesign. However, the Company believes it is well
positioned to manufacture and market products that comply with these
regulations.
The Company has been notified by state and federal environmental protection
agencies of its possible involvement in a number of "Superfund" sites in the
United States. However, the Company does not presently anticipate any material
adverse effect upon the Company's earnings or financial condition arising out
of the resolution of these matters or the resolution of any other known
governmental proceeding regarding environmental protection matters.
In December 2000, the Company announced its intention to undertake
restructuring activities that will take place over the next two years as
specific actions are identified and implemented. The Company anticipates that
the restructuring activities will reduce the work force by up to approximately
10% (6,000 employees). In addition, the Company believes certain operations
may be closed or consolidated as a result of the restructuring activities. In
January 2001, the company announced that the first phase of the restructuring
plan will include the elimination of 2,000 positions worldwide and the closing
of a manufacturing facility outside the United States.
For certain other financial information concerning the Company's business
segments and foreign and domestic operations, see Notes 1 and 12 of the Notes
to Consolidated Financial Statements in the Annual Report.
ITEM 2. Properties.
The principal executive offices of Whirlpool Corporation are located in
Benton Harbor, Michigan. At December 31, 2000, the principal manufacturing and
service operations of the Company were carried on at 43 locations worldwide,
33 of which are located in 12 countries outside the United States. The Company
occupied a total of approximately 41.3 million square feet devoted to
manufacturing, service, administrative offices, warehouse, distribution, and
sales space. Over 12.1 million square feet of such space is occupied under
lease. In general, all facilities are well maintained, suitably equipped, and
in good operating condition.
ITEM 3. Legal Proceedings.
As of, and during the quarter ended, December 31, 2000, there were no
material pending legal proceedings to which the Company or any of its
subsidiaries was a party or to which any of their property was subject.
ITEM 4. Submission of Matters to a Vote of Security Holders.
There were no matters submitted to a vote of security holders in the fourth
quarter of 2000.
4
<PAGE>
PART II
ITEM 5. Market for Registrant's Common Equity and Related Stockholder Matters.
The Company's common stock is traded on the New York Stock Exchange and the
Chicago Stock Exchange. As of March 2, 2001, the number of holders of record
of the Company's common stock was approximately 11,688.
High and low sales prices (as reported on the New York Stock Exchange
composite tape) for the Company's common stock for each quarter during the
years 1999 and 2000 are set forth on page 68 under the heading "Stockholders'
and Other Information" in the Annual Report and incorporated herein by
reference. Cash dividends declared for the Company's common stock for each
quarter during the years 1999 and 2000 are set forth in Note 13 of the Notes
to Consolidated Financial Statements in the Annual Report and incorporated
herein by reference.
ITEM 6. Selected Financial Data.
The selected financial data for the five years ended December 31, 2000 with
respect to the following line items are shown under the "Eleven Year
Consolidated Statistical Review" in the Annual Report and incorporated herein
by reference: Total revenues, earnings from continuing operations, earnings
from continuing operations per share of common stock, dividends declared per
share of common stock, total assets, and long-term debt. See the material
incorporated herein by reference in response to Item 7 of this report for a
discussion of the effects on such data of business combinations and other
acquisitions, disposition and restructuring activity, restructuring costs,
accounting changes, and earnings of foreign affiliates.
ITEM 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
See the Management's Discussion and Analysis section of the Annual Report
which is incorporated herein by reference.
ITEM 7A. Quantitative and Qualitative Disclosures about Market Risk.
Information with respect to market risk can be found under the caption
"Market Risk" in the Management's Discussion and Analysis section of the
Annual Report which is incorporated herein by reference.
ITEM 8. Financial Statements and Supplementary Data.
The consolidated financial statements of the Company are contained in the
Annual Report and incorporated herein by reference. Supplementary financial
information regarding quarterly results of operations (unaudited) for the
years ended December 31, 2000 and 1999 is set forth in Note 13 of the Notes to
Consolidated Financial Statements. For a list of financial statements and
schedules filed as part of this report, see the "Index to Financial Statements
and Financial Statement Schedule(s)" beginning on page F-1.
ITEM 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
None.
5
<PAGE>
PART III
ITEM 10. Directors and Executive Officers of the Registrant.
The following table sets forth the names of the Company's executive
officers at December 31, 2000, the positions and offices with the Company held
by them at such date, the year they first became executive officers, and their
ages at December 31, 2000:
<TABLE>
<CAPTION>
First Became
Name Office an Officer Age
---- ------ ------------ ---
<S> <C> <C> <C>
David R.
Whitwam Director, Chairman of the Board and Chief Executive Officer 1985 58
Jeff M.
Fettig Director, President and Chief Operating Officer 1994 43
Mark E.
Brown Executive Vice President and Chief Financial Officer 1999 49
Bengt G.
Engstrom Executive Vice President and President, Whirlpool Europe 1999 47
Paulo
Periquito Executive Vice President and President, Latin America 1997 54
Michael D.
Thieneman Executive Vice President and Chief Technology Officer 1997 52
</TABLE>
Each of the executive officers named above was elected to serve in the
office indicated until the first meeting of the Board of Directors following
the annual meeting of stockholders in 2001 and until his successor is chosen
and qualified or until his earlier resignation or removal. Each of the
executive officers of the Company has held the position set forth in the table
above or has served the Company in various executive or administrative
capacities for at least the past five years.
Information with respect to directors of the Company can be found under the
caption "Directors and Nominees for Election as Directors" in the Company's
Proxy Statement and is incorporated herein by reference.
ITEM 11. Executive Compensation.
Information with respect to compensation of executive officers and
directors of the Company can be found under the captions "Executive
Compensation" and "Compensation of Directors" in the Proxy Statement and is
incorporated herein by reference.
ITEM 12. Security Ownership of Certain Beneficial Owners and Management.
Information with respect to security ownership by the only person(s) known
to the Company to beneficially own more than 5% of the Company's stock and by
each director of the Company and all directors and elected officers of the
Company as a group can be found under the caption "Security Ownership" in the
Proxy Statement and is incorporated herein by reference.
ITEM 13. Certain Relationships and Related Transactions.
None.
6
<PAGE>
PART IV
ITEM 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
(a) The following documents are filed as a part of this report:
1. The financial statements listed in the "Index to Financial Statements
and Financial Statement Schedule."
2. The financial statement schedule listed in the "Index to Financial
Statements and Financial Statement Schedule."
3. The exhibits listed in the "Exhibit Index."
(b) Reports on Form 8-K filed during the fourth quarter of 2000.
1. A Current Report on Form 8-K for October 18, 2000 pursuant to Item
5--"Other Events" announced the Company's third quarter 2000 earnings.
2. A Current Report on Form 8-K for December 13, 2000 pursuant to Item
5--"Other Events" announced fourth quarter 2000 earnings expectations and
plans to take restructuring charges and reduce costs.
(c) Exhibits.
See attached "Exhibit Index."
(d) Financial Statement Schedules.
The response to this portion of Item 14 is submitted as a separate
section of this report.
7
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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)
/s/ Mark E. Brown
By: _________________________________
Mark E. Brown
(Principal Financial Officer)
Executive Vice President
and Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the date indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
David R. Whitwam* Director, Chairman of the
____________________________________ Board and Chief Executive
David R. Whitwam Officer (Principal
Executive Officer)
Jeff M. Fettig* Director, President and
____________________________________ Chief Operating Officer
Jeff M. Fettig
Mark E. Brown* Executive Vice President and
____________________________________ Chief Financial Officer
Mark E. Brown (Principal Financial
Officer)
Betty A. Beaty* Vice President and
____________________________________ Controller (Principal
Betty A. Beaty Accounting Officer)
Herman Cain* Director
____________________________________
Herman Cain
Gary T. DiCamillo* Director
____________________________________
Gary T. DiCamillo
Allan D. Gilmour* Director March 16, 2001
____________________________________
Allan D. Gilmour
Kathleen J. Hempel* Director
____________________________________
Kathleen J. Hempel
James M. Kilts* Director
____________________________________
James M. Kilts
Arnold G. Langbo* Director
____________________________________
Arnold G. Langbo
Paul G. Stern* Director
____________________________________
Paul G. Stern
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
Janice D. Stoney* Director March 16, 2001
____________________________________
Janice D. Stoney
</TABLE>
<TABLE>
<S> <C> <C>
/s/ Daniel F. Hopp
*By: _______________________________
Daniel F. Hopp
Attorney-in-Fact
</TABLE>
9
<PAGE>
ANNUAL REPORT ON FORM 10-K
ITEMS 14(a) (1) AND (2) AND 14(d)
INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE
YEAR ENDED DECEMBER 31, 2000
WHIRLPOOL CORPORATION AND CONSOLIDATED SUBSIDIARIES
The following consolidated financial statements of the registrant and its
consolidated subsidiaries, set forth in the Annual Report, are incorporated
herein by reference in Item 8:
Consolidated balance sheets--December 31, 2000 and 1999
Consolidated statements of earnings--Three years ended December 31, 2000
Consolidated statements of changes in stockholders' equity--Three years
ended December 31, 2000
Consolidated statements of cash flows--Three years ended December 31,
2000
Notes to consolidated financial statements
The following reports of independent auditors and consolidated financial
statement schedules of the registrant and its consolidated subsidiaries are
submitted herewith in response to Items 14(a) (2) and 14(d):
<TABLE>
<CAPTION>
Page
----
<S> <C>
Report of Ernst & Young LLP, Independent Auditors...................... F-2
Reports of PricewaterhouseCoopers, Independent Auditors................ F-3
Schedule II--Valuation and qualifying accounts......................... F-9
The following exhibits are included herein:
Exhibit 12--Ratio of Earnings to Fixed Charges......................... F-10
</TABLE>
Individual financial statements of the registrant's affiliated foreign
companies, accounted for by the equity method, have been omitted since no such
company individually constitutes a significant subsidiary.
Certain schedules for which provisions are made in the applicable
accounting regulations of the Securities and Exchange Commission are not
required under the related instructions or are inapplicable, and therefore
have been omitted.
F-1
<PAGE>
REPORT OF ERNST & YOUNG LLP
INDEPENDENT AUDITORS
THE STOCKHOLDERS AND BOARD OF DIRECTORS
WHIRLPOOL CORPORATION--BENTON HARBOR, MICHIGAN
We have audited the accompanying consolidated balance sheets of Whirlpool
Corporation as of December 31, 2000 and 1999, and the related consolidated
statements of earnings, stockholders' equity, and cash flows for each of the
three years in the period ended December 31, 2000. Our audits also included the
financial statement schedule listed in the Index at Item 14(a). These financial
statements and schedule are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements and
schedule based on our audits. We did not audit the 1998 financial statements of
Brasmotor S.A. and its consolidated subsidiaries, which statements reflect net
earnings of $58 million for the year ended December 31, 1998. Those statements
were audited by other auditors whose reports have been furnished to us, and our
opinion, insofar as it relates to data included for Brasmotor S.A. and its
consolidated subsidiaries, is based on the reports of the other auditors.
We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits and the reports of
the other auditors provide a reasonable basis for our opinion.
In our opinion, based on our audits and the reports of the other auditors,
the financial statements referred to above present fairly, in all material
respects, the consolidated financial position of Whirlpool Corporation at
December 31, 2000 and 1999, and the consolidated results of its operations and
its cash flows for each of the three years in the period ended December 31,
2000, in conformity with accounting principles generally accepted in the United
States. Also, in our opinion, the related financial statement schedule, when
considered in relation to the basic financial statements taken as a whole,
presents fairly in all material respects the information set forth therein.
Chicago, Illinois
January 19, 2001
F-2
<PAGE>
[PRICEWATERHOUSECOOPERS LETTERHEAD]
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholders
Brasmotor S.A.
We have audited the accompanying consolidated balance sheets of Brasmotor
S.A. and its subsidiaries as of December 31, 1998 and 1997 and the related
consolidated statements of earnings, of movement in stockholders' equity and
of cash flows for the years then ended, expressed in U.S. dollars (not
presented herein). Such audits were made in conjunction with our audits of the
financial statements expressed in local currency on which we issued an
unqualified opinion dated January 18, 1999. These financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits. We did not audit
the financial statements of Whirlpool Argentina S.A. and Sociedade Financeira
de Grandes Aparatos Domesticos S.A., which statements reflect total assets of
US$149,457 thousand and US$119,549 thousand as of December 31, 1998 and 1997,
respectively, and net earnings of US$6,037 thousand and US$9,487 thousand for
the years ended December 31, 1998 and 1997, respectively. Those statements
were audited by other auditors whose reports have been furnished to us, and
our opinion, insofar as it relates to data included for Whirlpool Argentina
S.A. and Sociedade Financeira de Grandes Aparatos Domesticos S.A., is based
solely on the reports of the other auditors.
We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits and the reports of the other auditors provide a reasonable basis for
our opinion.
As stated in Note 1, Whirlpool Corporation has prescribed that accounting
principles generally accepted in the United States of America be applied in
the preparation of the consolidated financial statements of Brasmotor S.A. and
its subsidiaries to be included in Whirlpool's consolidated financial
statements. Up to December 31, 1997, Brazil had a highly inflationary economy.
Accounting principles generally accepted in the United States of America
require that financial statements of a company denominated in the currency of
a country with a highly inflationary economy be remeasured into a more stable
currency unit for purposes of consolidation. Accordingly, the accounts of
Brasmotor S.A. and its Brazilian subsidiaries as of December 31, 1997, which
are maintained in reais, were remeasured and adjusted into U.S. dollars for
the financial statements prepared in accordance with accounting principles
generally accepted in the United States of America, on the bases stated in
Note 1. As from January 1, 1998, the functional currency, for the purpose of
the translation of the financial statements into U.S. dollars, has been
changed from the U.S. dollar to the local currency (reais).
F-3
<PAGE>
[PRICEWATERHOUSECOOPERS LETTERHEAD]
Brasmotor S.A.
Page 2
In our opinion, based on our audits and the reports of the other auditors,
the consolidated financial statements expressed in U.S. dollars audited by us
are presented fairly, in all material respects, on the bases stated in Note 1
and discussed in the preceding paragraph.
[PRICEWATERHOUSECOOPERS SIGNATURE]
PricewaterhouseCoopers
Auditores Independentes
Sao Paulo, Brazil
January 18, 1999
F-4
<PAGE>
[PRICEWATERHOUSECOOPERS LETTERHEAD]
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholders
Empresa Brasileira de Compressores S.A.--EMBRACO
We have audited the accompanying consolidated balance sheets of Empresa
Brasileira de Compressores S.A.--EMBRACO and its subsidiaries as of December
31, 1998 and 1997 and the related consolidated statements of earnings, of
movement in stockholders' equity and of cash flows for the years then ended,
expressed in U.S. dollars (not presented herein). Such audits were made in
conjunction with our audits of the financial statements expressed in local
currency on which we issued an unqualified opinion dated January 18, 1999.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements
based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
As stated in Note 1, Whirlpool Corporation has prescribed that accounting
principles generally accepted in the United States of America be applied in
the preparation of the consolidated financial statements of Empresa Brasileira
de Compressores S.A.--EMBRACO and its subsidiaries to be included in
Whirlpool's consolidated financial statements. Up to December 31, 1997, Brazil
had a highly inflationary economy. Accounting principles generally accepted in
the United States of America require that financial statements of a company
denominated in the currency of a country with a highly inflationary economy be
remeasured into a more stable currency unit for purposes of consolidation.
Accordingly, the accounts of Empresa Brasileira de Compressores S.A.--EMBRACO
and its Brazilian subsidiaries as of December 31, 1997, which are maintained
in reais, were remeasured and adjusted into U.S. dollars for the financial
statements prepared in accordance with accounting principles generally
accepted in the United States of America, on the bases stated in Note 1. As
from January 1, 1998, the functional currency, for the purpose of the
translation of the financial statements into U.S. dollars, has been changed
from U.S. dollar to the local currency (reais).
F-5
<PAGE>
[PRICEWATERHOUSECOOPERS LETTERHEAD]
Empresa Brasileira de Compressores S.A.--EMBRACO
Page 2
In our opinion, the consolidated financial statements expressed in U.S.
dollars audited by us are presented fairly, in all material respects, on the
bases stated in Note 1 and discussed in the preceding paragraph.
[PRICEWATERHOUSECOOPERS SIGNATURE]
PricewaterhouseCoopers
Auditores Independentes
Sao Paulo, Brazil
January 18, 1999
F-6
<PAGE>
[PRICEWATERHOUSECOOPERS LETTERHEAD]
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholders
Multibras S.A. Eletrodomesticos
We have audited the accompanying consolidated balance sheets of Multibras
S.A. Eletrodomesticos and its subsidiaries as of December 31, 1998 and 1997
and the related consolidated statements of earnings, of movement in
stockholders' equity and of cash flows for the years then ended, expressed in
U.S. dollars (not presented herein). Such audits were made in conjunction with
our audits of the financial statements expressed in local currency on which we
issued an unqualified opinion dated January 18, 1999. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits. We did not audit the financial statements of Whirlpool Argentina
S.A. and Sociedade Financeira de Grandes Aparatos Domesticos S.A., which
statements reflect total assets of US$ 149,457 thousand and US$ 119,549
thousand as of December 31, 1998 and 1997, respectively, and net earnings of
US$ 6,037 thousand and US$ 9,487 thousand for the years ended December 31,
1998 and 1997, respectively. Those statements were audited by other auditors
whose reports hves been furnished to us, and our opinion, insofar as it
relates to data included for Whirlpool Argentina S.A. and Sociedade Financeira
de Grandes Aparatos Domesticos S.A., is based solely on the report of the
other auditors.
We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits and the reports of the other auditors provide a reasonable basis for
our opinion.
As stated in Note 1, Whirlpool Corporation has prescribed that accounting
principles generally accepted in the United States of America be applied in
the preparation of the consolidated financial statements of Multibras S.A.
Eletrodomesticos and its subsidiaries to be included in Whirlpool's
consolidated financial statements. Up to December 31, 1997, Brazil had a
highly inflationary economy. Accounting principles generally accepted in the
United States of America require that financial statements of a company
denominated in the currency of a country with a highly inflationary economy be
remeasured into a more stable currency unit for purposes of consolidation.
Accordingly, the accounts of Multibras S.A. Eletrodomesticos and its Brazilian
subsidiaries as of December 31, 1997, which are maintained in reais, were
remeasured and adjusted into U.S. dollars for the financial statements
prepared in accordance with accounting principles generally accepted in the
United States of America, on the bases stated in Note 1. As from January 1,
1998, the functional currency, for the purpose of the translation of the
financial statements into U.S. dollars, has been changed from the U.S. dollar
to the local currency (reais).
F-7
<PAGE>
[PRICEWATERHOUSECOOPERS LETTERHEAD]
Multibras S.A. Eletrodomesticos
Page 2
In our opinion, based on our audits and the reports of the other auditors,
the consolidated financial statements expressed in U.S. dollars audited by us
are presented fairly, in all material respects, on the bases stated in Note 1
and discussed in the preceding paragraph.
[PRICEWATERHOUSECOOPERS SIGNATURE]
PricewaterhouseCoopers
Auditores Independentes
Sao Paulo, Brazil
January 18, 1999
F-8
<PAGE>
SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS
WHIRLPOOL CORPORATION AND SUBSIDIARIES
Years Ended December 31, 2000, 1999, and 1998
(millions of dollars)
<TABLE>
<CAPTION>
Col. A Col. B Col. C Col. D Col. E
------ -------------------- ----------------------------------- ------------ --------------
Additions
-----------------------------------
(1) (2)
Balance at Beginning Charged to Costs Charged to Other Deductions-- Balance at End
Description of Period and Expenses Accounts/Other Describe of Period
----------- -------------------- ----------------- ----------------- ------------ --------------
<S> <C> <C> <C> <C> <C>
Year Ended December 31, 2000:
Allowances for doubtful $34--
accounts--trade receivables.... $124 $ 13 A $103
==== ==== === ====
Allowances for doubtful
accounts--financing receivables
and leases..................... $ 5 $ 0 $ 0 $ 5
==== ==== === ====
Accrued expenses--restructuring $34--
costs.......................... $ 39 $-- C $ 5
==== ==== === ====
Year Ended December 31, 1999:
Allowances for doubtful $22--
accounts--trade receivables.... $116 $ 30 A $124
==== ==== === ====
Allowances for doubtful
accounts--financing receivables $66--
and leases..................... $ 71 $ 0 B $ 5
==== ==== === ====
Accrued expenses--restructuring $78--
costs.......................... $117 $-- C $ 39
==== ==== === ====
Year Ended December 31, 1998:....
Allowances for doubtful $63--
accounts--trade receivables.... $134 $ 45 A $116
==== ==== === ====
Allowances for doubtful
accounts--financing receivables $19--
and leases..................... $ 90 $ 0 B $ 71
==== ==== === ====
Accrued expenses--restructuring $95--
costs.......................... $212 $-- C $117
==== ==== === ====
</TABLE>
- ----
Note A--The amounts represent accounts charged off, less recoveries of $4 in
2000, $2 in 1999 and $5 in 1998, translation adjustments and transfers.
Note B--The amount for 1999 represents accounts charged off, less recoveries
of $1, while the amount for 1998 represents a transfer to the trade receivable
allowance.
Note C--Includes cash payments for employees severance and related costs,
lease terminations, facility dispositions and other cash costs; write-down of
facilities, equipment and other assets; and translation adjustments.
F-9
<PAGE>
EXHIBIT 12
RATIO OF EARNINGS TO FIXED CHARGES
WHIRLPOOL CORPORATION AND SUBSIDIARIES
<TABLE>
<CAPTION>
December
31,
---------
2000 1999
---- ----
<S> <C> <C>
Pretax earnings...................................................... $577 $514
Portion of rents representative of the interest factor............... 23 22
Interest on indebtedness............................................. 181 166
Amortization of debt expense and premium............................. 1 1
WFC preferred stock dividend......................................... 4 4
---- ----
Adjusted income...................................................... $786 $707
==== ====
Fixed charges
- -------------
Portion of rents representative of the interest factor............. $ 23 $ 22
Interest on indebtedness........................................... 181 166
Amortization of debt expense and premium........................... 1 1
WFC preferred stock dividend....................................... 4 4
---- ----
$209 $193
==== ====
Ratio of earnings to fixed charges................................... 3.8 3.7
==== ====
</TABLE>
F-10
<PAGE>
ANNUAL REPORT ON FORM 10-K
ITEMS 14(a)(3) and 14(c)
EXHIBIT INDEX
YEAR ENDED DECEMBER 31, 2000
The following exhibits are submitted herewith or incorporated herein by
reference in response to Items 14(a)(3) and 14(c). Each exhibit that is
considered a management contract or compensatory plan or arrangement required
to be filed pursuant to Item 14(a)(3) of Form 10-K is identified by a "(Z)."
<TABLE>
<CAPTION>
Number and Description of Exhibit
---------------------------------
<C> <S> <C>
3(i) Restated Certificate of Incorporation of the Company.
[Incorporated by reference from Exhibit 3(i) to the Company's
Annual Report on Form 10-K for the fiscal year ended December
31, 1993] [File No. 1-3932]
3(ii) Amended and Restated By-laws of the Company as amended August
17, 1999. [Incorporated by reference from Exhibit 3(ii) to the
Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1999] [File No. 1-3932]
4(i) The registrant hereby agrees to furnish to the Securities and
Exchange Commission, upon request, the instruments defining the
rights of holders of each issue of long-term debt of the
registrant and its subsidiaries.
4(ii) Rights Agreement, dated April 21, 1998, between Whirlpool
Corporation and First Chicago Trust Company of New York, with
exhibits. [Incorporated by reference from Exhibit 4 to the
Company's Form 8-K, dated April 22, 1998] [File No. 1-3932]
10(iii) (a) Whirlpool Retirement Benefits Restoration Plan (as amended
January 1, 1992).(Z) [Incorporated by reference from Exhibit
10(iii)(a) to the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1993] [File No. 1-3932]
10(iii) (b) Whirlpool Supplemental Executive Retirement Plan (as amended
and restated effective December 31, 1993).(Z) [Incorporated
by reference from Exhibit 10(iii)(c) to the Company's Annual
Report on Form 10-K for the fiscal year ended December 31,
1993] [File No. 1-3932]
10(iii) (c) Resolution adopted on December 12, 1989 by the Board of
Directors of the Company adopting a compensation schedule,
life insurance program and retirement benefit program for
eligible Directors.(Z) [Incorporated by reference from
Exhibit 10(iii)(d) to the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1993] [File
No.1-3932]
10(iii) (d) Resolution adopted on December 8, 1992 by the Board of
Directors of the Company adopting a Flexible Compensation
Program for the Corporation's nonemployee directors.(Z)
[Incorporated by reference from Exhibit 10(iii)(e) to the
Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1993] [File No. 1-3932]
10(iii) (e) Whirlpool Corporation Deferred Compensation Plan for
Directors (as amended effective January 1, 1992 and April
20, 1993).(Z) [Incorporated by reference from Exhibit
10(iii)(f) to the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1993] [File No. 1-3932]
10(iii) (f) Form of Agreement providing for severance benefits for
certain executive officers.(Z) [Incorporated by reference
from Item 5--Other Events to the Company's Form 8-K dated
April 26, 2000] [File No. 1-3932]
10(iii) (g) Whirlpool Corporation 1989 Omnibus Stock and Incentive Plan
(as amended June 20, 1995).(Z) [Incorporated by reference
from Exhibit 10(iii)(r) to the Company's Annual Report on
Form
10-K for the fiscal year ended December 31, 1995] [File No.
1-3932]
</TABLE>
E-1
<PAGE>
<TABLE>
<CAPTION>
Number and Description of Exhibit
---------------------------------
<C> <S>
10(iii) (h) Administrative Guidelines for the Whirlpool Corporation Restricted
Stock Value Program (pursuant to one or more of Whirlpool's
Omnibus Stock and Incentive Plans).(Z) [Incorporated by reference
from Exhibit 10(iii)(i) to the Company's Annual Report on Form 10-
K for the fiscal year ended December 31, 1993] [File 1-3932]
10(iii) (i) Administrative Guidelines for the Whirlpool Corporation Executive
Stock Appreciation and Performance Program (pursuant to one or
more of Whirlpool's Omnibus Stock and Incentive Plans).(Z)
[Incorporated by reference from Exhibit 10(iii)(j) to the
Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1993] [File No. 1-3932]
10(iii) (j) Whirlpool Corporation Nonemployee Director Stock Ownership Plan
(as amended February 16, 1999, effective April 20, 1999.(Z)
[Incorporated by reference from Exhibit A to the Company's proxy
statement for the 1999 annual meeting of stockholders] [File No.
1-3932]
10(iii) (k) Whirlpool Performance Excellence Plan (as amended January 1, 1992,
February 15, 1994 and April 20, 1999).(Z) [Incorporated by
reference from Exhibit B to the Company's proxy statement for the
1999 annual meeting of stockholders] [File No. 1-3932]
10(iii) (l) Whirlpool Corporation Executive Deferred Savings Plan (as amended
effective January 1, 1992).(Z) [Incorporated by reference from
Exhibit 10(iii)(n) to the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1993] [File No. 1-3932]
10(iii) (m) Whirlpool Corporation Executive Officer Bonus Plan (effective as
of January 1, 1994).(Z) [Incorporated by reference from Exhibit
10(iii)(o) to the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1994] [File No. 1-3932]
10(iii) (n) Whirlpool Corporation Charitable Award Contribution and Additional
Life Insurance Plan for Directors (effective April 20, 1993).(Z)
[Incorporated by reference from Exhibit 10(iii)(p) to the
Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1994] [File
No. 1-3932]
10(iii) (o) Form of agreement for the Whirlpool Corporation Career Stock Grant
Program (pursuant to one or more of Whirlpool's Omnibus Stock and
Incentive Plans).(Z) [Incorporated by reference from Exhibit
10(iii)(q) to the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1995] [File No. 1-3932]
10(iii) (p) Whirlpool Corporation 1996 Omnibus Stock and Incentive Plan (as
amended, effective February 16, 1999).(Z) [Incorporated by
reference from Exhibit 10(iii)(r) to the Company's Annual Report
on Form 10-K for the fiscal year ended December 31, 1999] [File
No. 1-3932]
10(iii) (q) Whirlpool Corporation 1998 Omnibus Stock and Incentive Plan (as
amended, effective February 16, 1999).(Z) [Incorporated by
reference from Exhibit 10(iii)(s) to the Company's Annual Report
on Form 10-K for the fiscal year ended December 31, 1999] [File
No. 1-3932]
10(iii) (r) Employment Agreement with Paulo F.M.O. Periquito.(Z) [Incorporated
by reference from Part II Other Information, Item 6 to the
Company's Form 10-Q for the period ended March 31, 1998] [File No.
1-3932]
10(iii) (s) Whirlpool Corporation 2000 Omnibus Stock and Incentive Plan.(Z)
[Incorporated by reference from Exhibit A to the Company's proxy
statement for the 2000 annual meeting of stockholders] [File No.
1-3932]
10(iii) (t) Form of Stock Option Grant Document for the Whirlpool Corporation
Stock Option Program (pursuant to one or more of Whirlpool's
Omnibus Stock and Incentive Plans).(Z)
12 Statement Re: Computation of the Ratios of Earnings to Fixed Charges
</TABLE>
E-2
<PAGE>
<TABLE>
<CAPTION>
Number and Description of Exhibit
---------------------------------
<C> <S>
13 Management's Discussion and Analysis and Consolidated Financial
Statements contained in Annual Report to Stockholders for the year
ended December 31, 2000
21 List of Subsidiaries
23ii(a) Consent of Ernst & Young LLP
23ii(b) Consent of PricewaterhouseCoopers
24 Powers of Attorney
</TABLE>
E-3
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.III
<SEQUENCE>2
<FILENAME>dex10iii.txt
<DESCRIPTION>FORM OF STOCK OPTION GRANT
<TEXT>
<PAGE>
EXHIBIT 10 (iii)
STOCK OPTION GRANT DOCUMENT
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
Number Price
of Per Social
Granted To Grant Date Shares Share Security Number
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
((Name)) ((grantdate)) ((Shares)) ((price)) ((social))
((address1))
((address2)) Expiration Date
---------------
((address3)) ((expdate))
((address4))
((address5))
-------------------------------------------------------------------------------
</TABLE>
1. The Human Resources Committee of the Board of Directors (the
"Committee") of Whirlpool Corporation (also referred to as the "Company"), has
granted to you the option to purchase shares of common stock of the Company
under certain conditions pursuant to the 1998 Omnibus Stock and Incentive Plan
(the "Omnibus Plan"). The option granted is a non-statutory stock option for the
right to purchase the number of shares at the price indicated above. The option
to purchase is granted in installments with the number of shares eligible to be
purchased and the date of first possible purchase stated below. Your option is
subject to the provisions of the Omnibus Plan and this grant document.
No. of Shares Accrual Date
------------- ------------
50% of the shares granted 1 year from date of grant
50% of the shares granted 2 years from date of grant
2. To exercise your option to purchase any vested shares, you need to make
full payment to Whirlpool Corporation, 2000 M-63, Benton Harbor, Michigan U.S.A.
49022, in cash in U.S. dollars, or in common stock of the Company or in a
combination of cash and stock. If all or part of the payment is in shares of
common stock of the Company, these shares will be valued at their fair market
value on the date of exercise. You must exercise your vested options prior to
the expiration date above.
3. If you cease to be employed by the Company or any of its subsidiaries
for any reason other than death, retirement, disability, or with the consent of
the Committee, your grant shall terminate on the date you cease to be so
employed and all of your then outstanding options shall terminate immediately.
4. (a) If you leave employment with the Company or any of its subsidiaries
due to retirement, disability, or with the consent of the Committee, you may at
any time after the date you leave that employment (but in no event later than
the expiration date set forth above) pay for and receive all or any of the
shares relating to options exercisable on the last date of your employment.
After ceasing employment as specified in the first sentence of this paragraph,
your beneficiary under the Omnibus Plan may within two years of the date of your
death pay for and receive all or any shares as to which option rights shall have
been exercisable as of the last date of your employment.
<PAGE>
(b) To retain any ability to exercise your vested options after
leaving the Company due to retirement, disability, or with the consent the
Committee, you must (i) not engage, directly or indirectly, in any manner or
capacity such as adviser, principal, agent, partner, officer, director,
employee, or member of any association in any business or activity that competes
with the Company or any of its subsidiaries and (ii) be available at reasonable
times for consultations (which shall not require substantial time or effort) at
the request of the Company regarding phases of the business you were actively
connected with during your employment. Such consultations will not (unless your
active service was outside the United States) be required to be performed at any
place or places outside the United States of America or during usual vacation
periods or periods of illness or other incapacity. If either of the above
conditions is not fulfilled, you will forfeit all your existing rights under
your grant and your grant shall terminate immediately. Any determination by the
Committee that you are, or have, engaged in a competitive business or activity
or have not been available for consultation shall be final and conclusive.
5. If you die while employed by the Company or any of its subsidiaries,
your beneficiary under the Omnibus Plan may, within two years after the date of
your death, pay for and receive all or any of the shares relating to options
exercisable on the date of your death.
6. (a) If there is a stock dividend or stock split, or combination or
other increase or reduction in the number of issued shares of common stock of
the Company, the Board of Directors or the Committee may make such adjustments
in the number and type of shares authorized by the Omnibus Plan, the number and
type of shares subject to options outstanding under the Omnibus Plan, and the
exercise price of options outstanding thereunder as it may determine to be
appropriate and equitable.
(b) If there is a change in control of Whirlpool Corporation as
defined in the Company's Salaried Employees Retirement Plan, each purchase
privilege of your option grant which has not already vested shall immediately
vest.
7. You cannot transfer your stock option grant to another person. Any
attempted transfer or other disposition of your grant shall be void and shall
nullify your option, resulting in the cancellation of your grant by the Company.
Your option grant does not constitute an employment contract. It does not
guarantee employment for any period of time.
8. If the exercise of your option requires withholding of tax under any
foreign, federal, state, or local law, the Company can require you to pay to it
that withholding amount or retain an amount to satisfy that withholding
obligation from any payment otherwise due to you.
9. Your option grant and any shares acquired pursuant to this grant have
been registered only under the federal securities laws of the United States, and
the Company has no obligation to register this option or any such shares under
any other laws. Any shares acquired pursuant to your option may not be sold,
transferred, or otherwise traded without the registration under or an exemption
from any securities laws applicable to you, and each certificate representing
such shares will bear an appropriate legend to that effect. As of the date of
this option, an exemption would be available for residents of Ontario, Canada
for sales properly made through the New York Stock Exchange or the Chicago Stock
Exchange in the United
<PAGE>
States, provided that certain limitations relating to the maximum number of
holders of Whirlpool common stock in Ontario, Canada, and the maximum number of
shares held by them, continue to be met and the Company continues to be subject
to the reporting requirements of the United States Securities Exchange Act of
1934; however, there can be no assurance that any such exemption will be
available at any future date.
10. The Board or the Committee may change the terms of your stock option
grant at any time to comply with applicable Omnibus Plan interpretation, federal
or state regulations, or statutory enactment.
CONGRATULATIONS
___________________________
David R. Whitwam
Chairman of the Board
and Chief Executive Officer
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-12
<SEQUENCE>3
<FILENAME>dex12.txt
<DESCRIPTION>COMPUTATION OF THE RATIOS OF EARNINGS
<TEXT>
<PAGE>
EXHIBIT 12
RATIO OF EARNINGS TO FIXED CHARGES
WHIRLPOOL CORPORATION AND SUBSIDIARIES
<TABLE>
<CAPTION>
December 31,
------------
2000 1999
---- ----
<S> <C> <C>
Pretax earnings.................................................. $577 $514
Portion of rents representative of the interest factor........... 23 22
Interest on indebtedness......................................... 181 166
Amortization of debt expense and premium......................... 1 1
WFC preferred stock dividend..................................... 4 4
---- ----
Adjusted income.................................................. $786 $707
==== ====
Fixed charges
- -------------
Portion of rents representative of the interest factor......... $ 23 $ 22
Interest on indebtedness....................................... 181 166
Amortization of debt expense and premium....................... 1 1
WFC preferred stock dividend................................... 4 4
---- ----
$209 $193
==== ====
Ratio of earnings to fixed charges............................... 3.8 3.7
==== ====
</TABLE>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-13
<SEQUENCE>4
<FILENAME>dex13.txt
<DESCRIPTION>MANAGEMENT'S DISCUSSION AND ANALYSIS
<TEXT>
<PAGE>
Exhibit 13
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL
CONDITION
RESULTS OF OPERATIONS
The consolidated statements of earnings summarize operating results for the last
three years. This section of Management's Discussion and Analysis highlights
the main factors affecting changes in operating results during the three-year
period.
Earnings
- --------
Core earnings decreased 10% in 2000 while 1999 core earnings increased 31% over
1998. The term "core earnings" refers to earnings from continuing operations
excluding the effects of the first quarter 1999 Brazilian currency devaluation.
Earnings and earnings per share were as follows:
<TABLE>
<CAPTION>
(millions of dollars, except per share data) 2000 1999 1998
-------------- ---------------- -------------
<S> <C> <C> <C>
Core earnings $ 367 $ 407 $ 310
Diluted core earnings per share 5.20 5.35 4.06
Earnings from continuing operations 367 347 310
Diluted earnings per share from continuing operations 5.20 4.56 4.06
Net earnings 367 347 325
Diluted net earnings per share 5.20 4.56 4.25
</TABLE>
Core earnings for 2000 were affected by the impact of a slowing industry and
intense pricing pressures in the company's two largest markets, North America
and Europe. Increased research and development, advertising and product launch
costs in support of the company's brand strategy were offset by $59 million in
pension gains, after-tax, or $0.84 per diluted share. Core earnings for 2000,
1999 and 1998 included $49 million, $20 million and $15 million, after-tax and
minority interests, of Brazilian tax credits. These credits accounted for
$0.69, $0.26 and $0.20 per diluted share for 2000, 1999 and 1998, respectively.
Earnings from continuing operations and net earnings for 1999 were reduced $60
million after-taxes and minority interests, or $0.79 per diluted share, by the
first quarter's Brazilian currency devaluation.
During 1998, the company recorded an after-tax gain from discontinued operations
of $15 million or $0.19 per diluted share related to the sale of consumer
financing and European inventory financing assets to Transamerica Distribution
Finance Corporation, concluding a series of transactions to dispose of portions
of its financing business.
Net Sales
- ---------
1
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL
CONDITION
The total number of units sold in 2000 increased 4% over 1999. Consolidated net
sales decreased 2%, however, as currency fluctuations around the world and
pricing pressures combined to offset the increased units. Excluding currency
fluctuations, sales would have increased 1% over 1999. Excluding the impact of
currency fluctuations, net sales were up 11% in 1999 over 1998. The tables
below provide the breakdown of units and sales by region.
<TABLE>
<CAPTION>
(in thousands) 2000 Change 1999 Change 1998
---------------- --------------- ---------------- ----------- -----------------
<S> <C> <C> <C> <C> <C>
Units Sold:
North America 20,634 3.9% 19,862 11.9% 17,810
Europe 10,876 3.9 10,469 7.1 9,774
Latin America 4,918 2.3 4,809 (0.2) 4,817
Asia 1,958 5.4 1,858 13.0 1,644
Other/elimination (31) - (49) - (13)
-------------- -------------- ---------------
Consolidated 38,355 3.8% 36,949 8.6% 34,032
============== ============ ============== ========= ===============
<CAPTION>
(millions of dollars) 2000 Change 1999 Change 1998
---------------- --------------- ----------------- ---------- ---------------
<S> <C> <C> <C> <C> <C>
Net Sales:
North America $ 6,223 1.0% $ 6,159 10.0% $ 5,599
Europe 2,156 (12.1) 2,452 0.5 2,439
Latin America 1,706 2.3 1,668 (20.2) 2,090
Asia 390 4.0 375 19.8 313
Other/eliminations (150) - (143) - (118)
-------------- -------------- ---------------
Consolidated $ 10,325 (1.8)% $ 10,511 1.8% $ 10,323
============== ============ ============== ========= ===============
</TABLE>
Significant regional trends were as follows:
- - North American unit volumes increased despite an overall slowdown in industry
demand. Major appliance shipments growth exceeded the 2% industry-wide
growth. Shipments are currently expected to be flat for 2001. Net sales
increased slower than unit volumes as competitive pricing pressures reduced
average sales values. The 1999 increase versus 1998 in units and net sales
were both attributable to strong industry growth and market share gains.
- - European unit volumes increased in line with industry growth. Net sales
decreased however, as currency fluctuations and pricing pressures offset the
higher volume. Excluding the impact of currency fluctuations, net sales would
have been level with 1999.
2
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL
CONDITION
Unit shipments are currently expected to increase 2% in 2001. Unit volumes
and net sales increased 7% and 1%, respectively, in the 1999 versus 1998
comparison also reflecting the impact of currency fluctuations.
- - Unit shipments and net sales increased in Latin America over 1999 reflecting
positive economic trends. Price increases implemented during the year
contributed to the increased revenue. Unit shipments are currently expected o
increase between 5% and 8% in 2001. In the 1999 versus 1998 comparison, net
sales absent currency fluctuations would have increased 16%.
- - Asia continued a positive trend as both units and revenue increased year-
over-year. Unit shipments are currently expected to increase between 5% and
8% in 2001.
Gross Margin
- ------------
The consolidated gross margin percentage in 2000 declined 1.2 percentage points
versus 1999 due primarily to global pricing pressures and higher material costs
partially offset by the favorable impact of productivity improvements and
pension gains. The gross margin percentage improved by nearly one percentage
point in 1999 versus 1998, due primarily to benefits resulting from the
restructuring started in 1997 and ongoing productivity improvements from the
company's Operational Excellence Program. The table below outlines the gross
margin percentages by region.
<TABLE>
<CAPTION>
2000 Change 1999 Change 1998
-------- ---------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Gross Margin
North America 24.3% (1.1) pts 25.4% 0.6 pts 24.8%
Europe 23.3 (2.6) 25.9 1.2 24.7
Latin America 22.9 (0.2) 23.1 1.1 22.0
Asia 26.1 1.0 25.1 4.3 20.8
-------- -------- ----------
Consolidated 24.1% (1.2) pts 25.3% 0.9 pts 24.4%
======== ========= ======== ======== ==========
</TABLE>
Significant regional trends were as follows:
- - North American gross margin declined due to industry-wide price
deterioration, unfavorable product and channel mix and increased engineering
and product launch expenses. These factors were partially offset by volume
increases, ongoing productivity improvements and pension credits.
3
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL
CONDITION
- - European gross margin decreased due to intensified price competition, rising
material costs and slowing demand. In the 1999 versus 1998 comparison, the
gross margin improved due to manufacturing efficiencies and lower material
costs.
- - Latin American gross margin remained level with 1999 as higher material costs
were offset by sales tax credits. The gross margin, however, improved
throughout the year due to the implementation of price increases and raw
material price reductions.
Selling, General and Administrative
- -----------------------------------
Consolidated selling, general and administrative expenses as a percent of net
sales decreased from 1999 due primarily to pension gains in North America and
cost containment efforts in Europe and Brazil offsetting additional spending
related to brand strategies. Consolidated selling, general and administrative
expenses as a percent of net sales decreased in 1999 versus 1998 due to
improvements related to restructuring and a sales allowance reclassification in
North America. These improvements were partially offset by $36 million in pre-
tax provisions in Brazil related to credit risk. The table below outlines the
selling, general and administrative expenses as a percentage of sales by region.
<TABLE>
<CAPTION>
As a % As a % As a %
(millions of dollars) 2000 of Sales 1999 of Sales 1998 of Sales
------------- ----------- ------------- ---------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Selling, General & Administrative
Expenses
North America $ 825 13.3% $ 838 13.6% $ 757 13.5%
Europe 386 17.9 443 18.1 465 19.1
Latin America 263 15.4 263 15.8 334 16.0
Asia 76 19.4 76 20.3 78 24.8
Corporate/Other 101 - 133 - 157 -
---------- --------- --------
Consolidated $ 1,651 16.0% $ 1,753 16.7% $ 1,791 17.3%
========== ======= ========= ====== ======== ========
</TABLE>
Other Income and Expense
- ------------------------
Interest income and sundry income (expense) was $145 million favorable in 2000
versus 1999 due primarily to the impact of the Brazilian currency devaluation in
1999. This was partially offset by lower interest income in 2000 as the company
reduced short term investments. The devaluation of the Brazilian real in the
first quarter of 1999 resulted in a $158 million pre-tax charge to earnings
(Whirlpool's share after-tax and minority interest was $60 million). For the
full year 1999, foreign exchange losses related to Brazil totalled $192 million
pre-tax (Whirlpool's share after-tax and minority interest was $76 million).
Interest income and sundry income (expense) for 1999 was unfavorable compared to
1998 primarily due to the Brazilian currency devaluation discussed above and
lower interest income in 1999 as the company restructured its Brazilian balance
sheet to reduce its exposure to exchange rate fluctuations.
4
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL
CONDITION
Interest expense increased $14 million over 1999 due primarily to higher
interest rates and higher average debt balances outstanding in 2000. Interest
expense decreased $94 million from 1998 to 1999 due to the restructuring of the
Brazilian balance sheet in 1999 in order to reduce the company's exposure to
exchange rate fluctuations.
Income Taxes
- ------------
The effective income tax rate was 35% in 2000 versus 37% in 1999 (adjusted for
the effect of the Brazilian currency devaluation), and 37% in 1998. The lower
effect tax rate for 2000 versus 1999 was primarily due to Brazilian export
incentive tax credits utilized during 2000 (discussed under "Financial
Conditions and Other Matters"), which are nontaxable. Excluding the impact of
these credits, the effective income tax rate in 2000 would have been 38%.
Including the Brazilian currency devaluation, the effective income tax rate for
1999 was 38%.
CASH FLOWS
The statements of cash flows reflect the changes in cash and equivalents for the
last three years 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 provided by operating activities totalled $445 million in 2000 versus $801
million in 1999. Cash provided by operations was $763 million in 1998. The
decrease in 2000 versus 1999 was due primarily to an increase in accounts
receivable and prepaid pension costs, partially offset by an increase in
accounts payable.
Investing Activities
- --------------------
The principal recurring investing activities are property additions. Net
property additions were $375 million, $437 million and $523 million in 2000,
1999 and 1998. The higher spending in 1998 compared with the 2000 and 1999
levels, was primarily due to significant expenditures in Brazil for product
renewals and more efficient production methods.
On January 7, 2000, the company completed its tender offer for the outstanding
publicly traded shares in Brazil of its subsidiaries Brasmotor and Multibras
S.A. Eletrodomesticos (Multibras). In completing the offer, the company
purchased additional shares of Brasmotor and Multibras for $283 million,
bringing its equity interest in these companies to approximately 94%. With this
additional investment, the company's equity interest in all its Brazilian
subsidiaries increased from approximately 55% to approximately 87%.
5
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL
CONDITION
Refer to Note 2 to the accompanying consolidated financial statements for
discussion of business dispositions and acquisitions during the last three
years.
Financing Activities
- --------------------
Dividends paid to stockholders totaled $70 million, $103 million and $102
million in 2000, 1999 and 1998. The reduction in 2000 was due primarily to the
timing of funding for the fourth quarter payment and the reduction in
outstanding shares due to the share repurchase program.
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 extended the previously
authorized $250 million which was announced on March 1, 1999. The shares are to
be purchased on the open market and through privately negotiated sales as the
company deems appropriate. Through December 31, 2000, the company had
repurchased 11.3 million shares at a cost of $594 million, of which 8.7 million
shares or $427 million occurred during 2000.
The company's net borrowings increased by $546 million in 2000, excluding the
effect of currency fluctuations. The primary increase was in shorter term notes
payable.
The company's net borrowings decreased by $324 million in 1999 versus 1998,
excluding the effect of currency fluctuations. The reduction was in shorter term
notes payable and funded through cash generated from operations and existing
cash balances in Brazil.
FINANCIAL CONDITION AND OTHER MATTERS
The financial position of the company remains strong as evidenced by the
December 31, 2000 balance sheet. The company's total assets were $6.9 billion
and stockholders' equity was $1.7 billion at the end of 2000 versus $6.8 billion
and $1.9 billion respectively at the end of 1999. The decrease in stockholders'
equity in 2000 versus 1999 was due primarily to $427 million of treasury stock
purchases (discussed above) offsetting $271 million of net earnings retention.
The overall debt to invested capital ratio (debt ratio) of 49.4% in 2000 was up
from 37.7% in 1999 due primarily to increased short term borrowings combined
with a lower stockholders' equity balance. The company's debt continues to be
rated investment grade by Moody's Investors Service Inc. (Baa1), Standard and
Poor's (BBB+) and Fitch IBCA (A-).
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.
On May 5, 2000, the company issued $325 million of 8.6% debentures maturing in
2010, which was partially offset by the maturity on June 15, 2000 of $200
million in 9.5% debentures.
6
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL
CONDITION
In December, 2000, the company announced a global restructuring plan that when
fully implemented is currently expected to result in pre-tax charges of between
$300 and $350 million and an annualized savings of between $225 and $250
million. The plan is expected to eliminate approximately 6,000 positions
worldwide and will be announced in phases over the next four quarters. The
company expects the first phase of this restructuring will include the
elimination of more than 2,000 positions worldwide and result in a charge
against first quarter 2001 earnings of approximately $75 million. The company
expects this phase of the restructuring to result in 2001 savings of
approximately $35 million.
In December 1996, Multibras and Empresa Brasileira de Compressores S.A.
(Embraco), Brazilian subsidiaries, obtained a favorable decision with respect to
additional export incentives in connection with the Brazilian government's
export incentive program (Befiex). These incentives were worth approximately
$420 million as of December 31, 2000. The company recognized $52 million
(Whirlpool's share after minority interest was $49 million) in Befiex credits in
2000 as a reduction of current excise taxes payable and therefore an increase in
net sales.
During 1999, the company recorded $58 million pre-tax (Whirlpool's share
after-tax and minority interest was $20 million) of recovered Brazilian sales
taxes paid in prior years under a Brazilian law which was successfully
challenged in the courts. The company recorded $42 million pre-tax (Whirlpool's
share after-tax and minority interests was $15 million) of Befiex credits in
1998.
Market Risk
- -----------
The company is exposed to market risk from changes in foreign currency exchange
rates, domestic and foreign interest rates, and commodity prices, which can
impact its operating results and overall financial condition. The company
manages its exposure to these market risks through its operating and financing
activities and, when deemed appropriate, through the use of derivative financial
instruments. Derivative financial instruments are viewed as risk management
tools and are not used for speculation or for trading purposes. Derivative
financial instruments are entered into with a diversified group of investment
grade counterparties to reduce the company's exposure to nonperformance on such
instruments. The company's sensitivity analysis reflects the effects of changes
in market risk but does not factor in potential business risks.
The company manages a portfolio of domestic and cross currency interest rate
swaps that effectively convert U.S. Dollar (USD) denominated debt into that of
various European currencies. Through May 15, 2000, such local currency
denominated debt served as an effective hedge against the company's European
cash flows and net assets. On May 15, 2000, the company undesignated these
contracts as hedges of the net investment in its European operations and entered
into offsetting Euro denominated currency swaps, effectively locking in an
approximate $221 million positive position on the previously referenced cross
currency interest rate swaps. This positive cash position will be realized as
the contracts mature in 2002 and 2004. (Refer to Notes 1 and 6 for the
accounting treatment for, and a detailed description of, these instruments.)
7
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL
CONDITION
Cross currency interest rate swaps are generally sensitive to changes in foreign
currency exchange rates and interest rates. However, the company entered into
offsetting forward currency contracts to effectively eliminate any material gain
or loss on the swaps due to changes in European currencies. As of December 31,
2000, a ten percent shift in interest rates alone to each swap would have
resulted in an incremental unrealized gain or loss of $4 million. In September
2000, the company entered into additional domestic interest rate swaps which
effectively neutralized any potential interest rate impact from the existing
portfolio of domestic interest rate swaps.
The company uses foreign currency forward contracts and options from time to
time to hedge the price risk associated with firmly committed and forecasted
cross-border payments and receipts related to its ongoing business and
operational financing activities. Foreign currency contracts are sensitive to
changes in foreign currency exchange rates. At December 31, 2000, a ten percent
unfavorable exchange rate movement in the company's portfolio of foreign
currency forward contracts would have resulted in an incremental unrealized loss
of $66 million, while a ten percent favorable shift would have resulted in an
incremental unrealized gain of $63 million. Consistent with the use of these
contracts, such unrealized losses or gains would be offset by corresponding
gains or losses, respectively, in the remeasurement of the underlying
transactions.
The company uses commodity swap contracts to hedge the price risk associated
with firmly committed and forecasted commodities purchases which are not hedged
by contractual means directly with suppliers. As of December 31, 2000, a ten
percent shift in commodity prices would have resulted in an incremental $2
million gain or loss related to these contracts.
During the first quarter of 2000, the company sold put options, which give the
purchaser the right to sell shares of the company's stock to the company at a
specified price. The put option contracts allow the company to determine the
method of settlement. The company's objective in selling put options is to
reduce the average price of repurchased shares. During 2000, the company
received $4 million of premiums from the sale of put options. As of December 31,
2000, there were 702,800 put options outstanding with an average strike price of
$52.16 per share all of which expire in 2001.
In June 1998, the Financial Accounting Standards Board (FASB) issued Statement
of Financial Accounting Standards (SFAS) No. 133, "Accounting for Derivative
Instruments and Hedging Activities," as amended by SFAS No. 137 and SFAS No.
138, which establishes new accounting and reporting standards for derivative
instruments. These rules require that all derivative instruments be reported in
the consolidated financial statements at fair value. Changes in the fair value
of derivatives will be recorded each period in earnings or other comprehensive
income, depending on whether the derivative is designated and effective as part
of a hedged transaction, and on the type of hedge transaction. Gains or losses
on derivative instruments reported in other comprehensive income must be
reclassified as earnings in the period in which earnings are affected by the
underlying hedged item, and the ineffective portion of all hedges must be
recognized in earnings in the current period. These new standards may result in
additional volatility in reported earnings, other comprehensive income and
accumulated other comprehensive income. These rules became effective for the
company on January 1, 2001. The company will record the effect of the transition
to these new accounting requirements as a change in accounting
8
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL
CONDITION
in the first quarter of 2001. The transition adjustment to adopt SFAS 133 will
result in $8 million of income, net of tax, from the cumulative effect of a
change in accounting principle, and an $11 million decrease, net of tax, in
stockholders' equity in the company's financial statements for the quarter
ending March 31, 2001.
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.
Internal computer system and business processes are being changed to accommodate
the new currency and the company established a cross-functional team, guided by
an executive-level steering committee, to address these issues. The company
estimates that all of the Euro countries will be converted in various steps to
the Euro currency by the end of 2001. The total cost of the Euro conversion
program will be approximately $3 million.
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 annual 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 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)
9
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL
CONDITION
continuation of our strong relationship with Sears, Roebuck and Co. in North
America which accounted for approximately 20% of our consolidated net sales of
$10.3 billion in 2000; (7) currency exchange rate fluctuations in Latin America,
Europe, and Asia that could affect our consolidated balance sheet and income
statement; (8) social, economic, and political volatility in developing markets;
(9) worsening of the economic downturn in North America; (10) changes in North
America's consumer preferences regarding how appliances are purchased; and (11)
the effectiveness of the series of restructuring actions the company anticipates
taking through 2002.
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.
10
<PAGE>
WHIRLPOOL CORPORATION
CONSOLIDATED STATEMENTS OF EARNINGS
Year Ended December 31
(millions of dollars except per share data)
<TABLE>
<CAPTION>
2000 1999 1998
------------- ------------- ------------
<S> <C> <C> <C>
Net sales $ 10,325 $ 10,511 $ 10,323
EXPENSES
Cost of products sold 7,838 7,852 7,805
Selling and administrative 1,651 1,753 1,791
Intangible amortization 29 31 39
------------- ------------- ------------
9,518 9,636 9,635
------------- ------------- ------------
OPERATING PROFIT 807 875 688
OTHER INCOME (EXPENSE)
Interest and sundry (50) (195) 136
Interest expense (180) (166) (260)
------------- ------------- ------------
EARNINGS BEFORE INCOME TAXES
AND OTHER ITEMS 577 514 564
Income taxes 200 197 209
------------- ------------- ------------
EARNINGS FROM CONTINUING OPERATIONS
BEFORE EQUITY EARNINGS AND MINORITY INTERESTS 377 317 355
Equity in affiliated companies 3 (4) 1
Minority interests (13) 34 (46)
------------- ------------- ------------
EARNINGS FROM CONTINUING OPERATIONS 367 347 310
Gain on disposal from discontinued operations (less applicable taxes) - - 15
------------- ------------- ------------
NET EARNINGS $ 367 $ 347 $ 325
============= ============= ============
Per share of common stock:
Basic Earnings from continuing operations $ 5.24 $ 4.61 $ 4.09
Basic Net earnings $ 5.24 $ 4.61 $ 4.29
Diluted Earnings from continuing operations $ 5.20 $ 4.56 $ 4.06
Diluted Net earnings $ 5.20 $ 4.56 $ 4.25
Dividends $ 1.36 $ 1.36 $ 1.36
Weighted-average shares outstanding: (millions)
Basic 70.2 75.2 75.8
Diluted 70.6 76.0 76.5
</TABLE>
See notes to consolidated financial statements
<PAGE>
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
December 31 (millions of dollars) 2000 1999
------------------ ------------------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and equivalents $ 114 $ 261
Trade receivables, less allowances of
(2000: $103; 1999: $124 ) 1,748 1,477
Inventories 1,119 1,065
Prepaid expenses and other 54 39
Deferred income taxes 50 88
Other current assets 152 247
------------------ ------------------
Total Current Assets 3,237 3,177
OTHER ASSETS
Investment in affiliated companies 113 112
Intangibles, net 762 795
Deferred income taxes 253 247
Prepaid pension costs 141 45
Other 262 272
------------------ ------------------
1,531 1,471
PROPERTY, PLANT AND EQUIPMENT
Land 64 70
Buildings 838 863
Machinery and equipment 4,374 4,249
Allowance for Depreciation (3,142) (3,004)
------------------ ------------------
2,134 2,178
------------------ ------------------
Total Assets $ 6,902 $ 6,826
================== ==================
<CAPTION>
2000 1999
------------------ ------------------
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Notes payable $ 961 $ 444
Accounts payable 1,257 1,081
Employee compensation 256 300
Deferred income taxes 103 60
Accrued expenses 590 594
Restructuring costs 5 39
Other current liabilities 102 149
Current maturities of long-term debt 29 225
------------------ ------------------
Total Current Liabilities 3,303 2,892
OTHER LIABILITIES
Deferred income taxes 175 157
Postemployment benefits 630 612
Product warranty 48 43
Other liabilities 49 60
Deferred income 71 65
Long-term debt 795 714
------------------ ------------------
1,768 1,651
MINORITY INTERESTS 147 416
STOCKHOLDERS' EQUITY
Common stock, $1 par value: 250 million shares authorized 84 84
Paid-in capital 393 374
Retained earnings 2,539 2,268
Unearned restricted stock (11) (6)
Cumulative translation adjustments (495) (443)
Treasury stock -18 and 9 million shares at cost in 2000 and 1999 (826) (410)
------------------ ------------------
Total Stockholders' Equity 1,684 1,867
------------------ ------------------
Total Liabilities and Stockholders' Equity $ 6,902 $ 6,826
================== ==================
</TABLE>
See notes to consolidated financial statements.
<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Year ended December 31 (millions of dollars) 2000 1999 1997
------------------------------------------
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net earnings (loss) $ 367 $ 347 $ 325
Depreciation 371 386 399
Deferred income taxes 74 29 26
Equity in net earnings (loss) of affiliated
companies, less dividends received (3) 4 (1)
Gain on business dispositions - - (25)
Provision for doubtful accounts 13 37 29
Amortization of goodwill 29 31 39
Restructuring charges, net of cash paid (43) (73) (99)
Minority interests 13 (34) 46
Changes in assets and liabilities,
net of effects of business
acquisitions and dispositions:
Trade receivables (348) (41) (184)
Inventories (80) (52) 73
Accounts payable 221 106 89
Prepaid pension costs (96) (8) (1)
Other - net (73) 69 47
---------- ---------- ---------
Cash Provided by Operating Activities $ 445 $ 801 $ 763
---------- ---------- ---------
</TABLE>
<TABLE>
<CAPTION>
2000 1999 1998
-------------------------------------------
<S> <C> <C> <C>
INVESTING ACTIVITIES
Net additions to properties $ (375) $ (437) $ (523)
Acquisitions of businesses,
less cash acquired (283) - (121)
Business dispositions - - 587
----------- ----------- ----------
Cash (Used for) Investing Activities $ (658) (437) (57)
----------- ----------- ----------
FINANCING ACTIVITIES
Proceeds of short-term borrowings $ 29,506 15,479 19,141
Repayments of short-term borrowings (28,878) (15,841) (19,519)
Proceeds of long-term debt 326 152 290
Repayments of long-term debt (408) (175) (306)
Repayments of non-recourse debt - - -
Dividends (70) (103) (102)
Purchase of treasury stock (427) (167) -
Redemption of preferred stock - - (40)
Other 27 59 (83)
----------- ----------- ----------
Cash Provided by (Used for) Financing Activities $ 76 (596) (619)
----------- ----------- ----------
Effect of Exchange Rate Changes on Cash and Equivalents $ (10) (143) (29)
----------- ----------- ----------
Increase (Decrease) in Cash and Equivalents $ (147) (375) 58
Cash and Equivalents at Beginning of Year 261 636 578
----------- ----------- ----------
Cash and Equivalents at End of Year $ 114 $ 261 $ 636
----------- ----------- ----------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Consolidated Statements of Changes in Stockholders' Equity
Treasury Accumulated
Stock/ Other
Common Paid-in Comprehensive Related
(millions of dollars) Stock Capital Income Earnings Total
----- ------- ------------- -------- -----
<S> <C> <C> <C> <C> <C>
Balances, January 1, 1998 $ 82 $ 37 $ (149) $ 1,801 $ 1,771
Comprehensive income
Net income 325 325
Foreign currency items, net of tax (benefit) of $(18) (34) (34)
-------
Comprehensive income 291
-------
Common stock issued 1 40 41
Dividends declared on common stock (102) (102)
----- ------ ------------- -------- -------
Balances, December 31, 1998 $ 83 $ 77 $ (183) $ 2,024 $ 2,001
Comprehensive income (loss)
Net income (loss) 347 347
Foreign currency items, net of tax of $41 (260) (260)
-------
Comprehensive income (loss) 87
-------
Common stock repurchased (167) (167)
Common stock issued 1 48 49
Dividends declared on common stock (103) (103)
----- ------ ------------- -------- -------
Balances, December 31, 1999 $ 84 $ (42) $ (443) $ 2,268 $ 1,867
Comprehensive income
Net income 367 367
Foreign currency items, net of tax of $18 (52) (52)
-------
Comprehensive income 315
-------
Common stock repurchased (427) (427)
Common stock issued - 25 25
Dividends declared on common stock (96) (96)
----- ------ ------------- -------- -------
BALANCES, DECEMBER 31, 2000 $ 84 $ (444) $ (495) $ 2,539 $ 1,684
===== ====== ============= ======== =======
</TABLE>
See notes to consolidated financial statements.
<PAGE>
WHIRLPOOL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) SUMMARY OF PRINCIPAL ACCOUNTING POLICIES
Nature of Operations: Whirlpool Corporation is the world's leading manufacturer
and marketer of major home appliances. The company manufactures in 13 countries
under 11 major brand names and markets products to distributors and retailers in
more than 170 countries.
Principles of Consolidation: The consolidated financial statements include all
majority-owned subsidiaries. Investments in affiliated companies, consisting
principally of a 49% direct voting interest in a Mexican company (Vitromatic,
S.A. de C.V.) and direct voting interests ranging from 20% to 40% in several
other international companies, principally engaged in the manufacture and sale
of major home appliances or related component parts, are accounted for by the
equity method. All intercompany transactions have been eliminated upon
consolidation.
Use of Estimates: Management is required to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
Revenue Recognition: Sales are recorded when product is shipped and title passes
to distributors or directly to retailers.
Freight and Warehousing Costs: Freight-out and warehousing costs are included in
selling, general and administrative expenses in the statements of earnings and
were $470 million, $430 million and $402 million in 2000, 1999 and 1998.
Cash and Equivalents: All highly liquid debt instruments purchased with a
maturity of three months or less are considered cash equivalents.
Inventories: Inventories are stated at first-in, first-out (FIFO) cost, except
U.S. production inventories which are stated at last-in, first-out (LIFO) cost
and Brazilian inventories which are stated at average cost. Costs do not exceed
realizable values.
Property, Plant and Equipment: Property, plant and equipment are stated at cost.
Depreciation of plant and equipment is computed using the straight-line method
based on the estimated useful lives of the assets.
Intangibles: The cost of business acquisitions in excess of net tangible assets
acquired is amortized on a straight-line basis principally over 40 years. Non-
compete agreements are amortized on a straight-line basis over the terms of the
agreements. Accumulated amortization totaled $295 million and $266 million at
December 31, 2000 and 1999. Should circumstances indicate the potential
impairment of goodwill, the company would compare the carrying amount against
related estimated undiscounted future cash flows to determine if a write-down to
market value or discounted cash flow value is required.
Research and Development Costs: Research and development costs are charged to
expense as incurred. Such costs were $254 million, $210 million and $209 million
in 2000, 1999 and 1998.
Advertising Costs: Advertising costs are charged to expense as incurred. Such
costs from continuing operations were $191 million, $164 million and $179
million in 2000, 1999 and 1998.
Foreign Currency Translation: The functional currency for the company's
international subsidiaries and affiliates is the local currency.
Derivative Financial Instruments: The company uses derivative financial
instruments to manage the economic impact of fluctuations in interest rates,
foreign currency exchange rates and
-7-
<PAGE>
WHIRLPOOL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
commodity prices. To achieve this, the company enters into interest rate and
cross currency interest rate swaps, foreign currency forward contracts and
options, and commodity swaps.
The company has used interest rate and cross currency interest rate swaps to
effectively convert a portion of the company's U.S. dollar denominated debt into
various European currencies. The company's investment in Europe and the foreign
currency portion of these cross currency interest rate swaps were revalued in
dollar terms each period to reflect current foreign currency exchange rates with
gains and losses recorded in the equity section of the balance sheet. To the
extent that the notional amounts of these contracts exceeded the company's
investment in Europe, the related mark-to-market gains and losses were reflected
in earnings. The amounts receivable from or payable to counterparties to the
swaps, offsetting gains and losses recorded in equity or earnings, are recorded
in long term debt.
The company also uses domestic interest rate swaps to manage the duration and
interest rate characteristics of its outstanding debt. The interest component of
the swaps, which overlay a portion of the company's interest payments on
outstanding debt, is not carried at fair value in the financial statements. The
interest differential paid or received is recognized as an adjustment to
interest expense. Gains and losses on the interest component of terminated swaps
are deferred in noncurrent liabilities and amortized as an adjustment to
interest expense over the remaining term of the original swap. In the event of
early extinguishment of debt, any realized or unrealized gains or losses from
related swaps would be recognized in income concurrent with the extinguishment.
The company also uses foreign currency forward contracts to hedge payments due
on cross currency interest rate swaps and intercompany loans and, along with
foreign currency options, to hedge material purchases, intercompany shipments
and other commitments. In addition, the company hedges a portion of its
contractual requirements of certain commodities with commodity swaps. These
contracts are not carried at fair value in the financial statements as the
related gains and losses are recognized in the same period and classified in the
same manner as the underlying transactions. Any gains and losses on terminated
contracts are deferred in current liabilities until the underlying transactions
occur.
The company deals only with investment-grade counterparties to these contracts
and monitors its overall credit risk and exposure to individual counterparties.
The company does not anticipate nonperformance by any counterparties. The amount
of the exposure is generally the unrealized gains in such contracts. The company
does not require, nor does it post, collateral or security on such contracts.
The net transaction losses recognized in other income, including gains and
losses from those contracts not qualifying as hedges, was $17 million in 2000,
$201 million in 1999 due primarily to the Brazilian currency devaluation and $12
million in 1998.
In June 1998, the Financial Accounting Standards Board (FASB) issued Statement
of Financial Accounting Standards (SFAS) No. 133, "Accounting for Derivative
Instruments and Hedging Activities," as amended by SFAS No. 137 and SFAS No.
138, which establishes new accounting and reporting standards for derivative
instruments. These rules require that all derivative instruments be reported in
the consolidated financial statements at fair value. Changes in the fair value
of derivatives will be recorded each period in earnings or other comprehensive
income, depending on whether the derivative is designated and is effective as
part of a hedged transaction, and on the type of hedge transaction. Gains or
losses on derivative instruments reported in other comprehensive income must be
reclassified as earnings in the period in which earnings are affected by the
underlying hedged item, and the ineffective portion of all hedges must be
recognized in earnings in the current period. These new standards may result in
additional volatility in reported earnings, other comprehensive income and
accumulated other comprehensive income. These rules became effective for the
company on January 1, 2001. The company will record the effect of the transition
to these new accounting requirements as a change in accounting principle in the
first quarter of 2001. The transition adjustment to adopt SFAS 133 will result
in $8
-8-
<PAGE>
WHIRLPOOL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
million of income, net of tax, from the cumulative effect of a change in
accounting principle, and an $11 million decrease, net of tax, in stockholders'
equity in the company's financial statements for the quarter ending March 31,
2001.
Net Earnings Per Common Share
Diluted net earnings per share of common stock includes the dilutive effect of
stock and put options.
Reclassifications
Certain amounts in the prior years' financial statements have been reclassified
to conform to the current year presentation.
(2) BUSINESS ACQUISITIONS AND 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
bringing its equity interest in these companies to approximately 94%. Including
Embraco, the company's equity interest in its Brazilian subsidiaries increased
from approximately 55% to approximately 87%. During 1998, the company increased
its ownership stake in its Brazilian subsidiaries by purchasing $43 million of
additional shares.
In September 1998, the company completed a transaction to sell 75% of its
majority-owned air conditioning joint venture in Shenzhen, China, for $13
million, to Electra Consumer Products Ltd., a leading European manufacturer of
air conditioners. Shenzhen Whirlpool Raybo Air-Conditioner Industrial Co. Ltd.
is a joint venture that was formed in 1995. After completion of the sale, the
company holds 20% of the joint venture. The joint venture continues to sell
products under the Whirlpool brand in China until 2001 while it introduces the
Electra brand. No significant gain or loss was recognized from this transaction.
In July 1998, the company purchased the remaining 35% ownership in Shunde SMC
Microwave Products Co., Ltd. (SMC), a Chinese manufacturer and marketer of
microwave ovens, for about $60 million in cash.
In March 1998, the company increased its majority ownership interest to 80% in
Whirlpool Narcissus Co., its Chinese joint venture that manufactures washing
machines, for approximately $12 million in cash.
The above acquisitions have been accounted for as purchases and their operating
results have been consolidated with the company's results since the dates of
acquisition. The proforma consolidated net earnings for 2000, 1999 and 1998, had
the 2000 Brazil purchases been made on January 1, 1998, would have been $367
million, $311 million and $352 million, respectively. The proforma impact would
have been reflected through a lower minority interests share.
(3) DISCONTINUED OPERATIONS
In 1997, the company discontinued its financing operations and reached an
agreement to sell the majority of the assets of Whirlpool Financial Corporation
(WFC) in a series of transactions, most of which were completed during 1997.
Sales of the following WFC assets were completed in 1998: international
factoring assets, consumer financing receivable assets, certain aerospace
financing assets and the European inventory financing assets. These transactions
resulted in the company recording a pretax gain
-8-
<PAGE>
WHIRLPOOL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
of $25 million ($15 million after-tax) in discontinued operations. The
consolidated financial statements reflect this business as a discontinued
operation.
(4) INVENTORIES
December 31 (millions of dollars) 2000 1999
----------------------------
Finished products $ 956 $ 932
Work in process 57 48
Raw materials 257 253
--------- ----------
1,270 1,233
Less excess of FIFO cost over LIFO cost 151 168
--------- ----------
Total inventories $1,119 $1,065
========= ==========
LIFO inventories represent approximately 33% and 28% of total inventories at
December 31, 2000 and 1999.
(5) FINANCING ARRANGEMENTS
The company utilizes uncommitted credit lines from banks and commercial paper in
the normal course of funding of its short-term needs. At December 31, 2000, the
company had committed bank credit lines of $1.1 billion that were undrawn at
year-end and had maturities ranging from four to thirteen months. The banks are
compensated for their credit lines by fees. These committed credit lines are
available to ensure the company has access to adequate and competitive funding
under unusual market conditions.
Short term debt and notes payable consist of the following:
December 31 (millions of dollars) 2000 1999
---------------------------
Payable to banks $ 414 $ 353
Commercial paper 526 80
Other 21 11
-------- --------
Total notes payable $ 961 $ 444
======== ========
The weighted average interest rate on notes payable was 8.10% and 6.86% at
December 31, 2000 and 1999.
-8-
<PAGE>
WHIRLPOOL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Although most of its assets have been divested, WFC remains a legal entity with
assets consisting primarily of leveraged leases and other financing assets. WFC
also has preferred stock outstanding which is included within minority interests
in the consolidated balance sheet, as follows:
Mandatory
Number Face Annual Redemption Date of
of Shares Value Dividend Date Issuance
--------- ----- -------- ---- --------
Series B 350,000 $100 $6.55 9/1/2008 8/31/1993
Series C 250,000 $100 $6.09 2/1/2002 12/27/1996
The preferred stockholders are entitled to vote together on a share-for-share
basis with WFC's common stockholder. Preferred stock dividends are payable
quarterly. At its option, WFC may redeem the Series B at any time on or after
September 1, 2003 or at any earlier date for Series C. The redemption price for
each series is $100 per share plus any accrued unpaid dividends and the
applicable redemption premium if redeemed early. Commencing September 1, 2003,
WFC must pay $1,750,000 per year to a sinking fund for the benefit of the Series
B preferred stockholders, with a final payment of $26,250,000 due on or before
September 1, 2008. There is no sinking fund requirement for the Series C
preferred stock.
The company and WFC are parties to a support agreement. Pursuant to the
agreement, if at the close of any quarter WFC's net earnings available for fixed
charges (as defined) for the preceding twelve months is less than a stipulated
amount, the company is required to make a cash payment to WFC equal to the
insufficiency within 60 days of the end of the quarter. The support agreement
may be terminated by either WFC or the company upon 30 days notice provided that
certain conditions are met. The company has also agreed to maintain ownership of
at least 70% of WFC's voting stock.
Long-term debt consists of the following:
<TABLE>
<CAPTION>
Interest
December 31 (millions of dollars) Maturity Rate 2000 1999
----------------- ------------- ---------------------------------
<S> <C> <C> <C> <C>
Debentures 2008 and 2016 7.8 and 9.1% $ 368 $ 368
Senior notes 2003 and 2010 8.6 and 9.0 525 400
Medium-term notes 2001 to 2006 8.9 to 9.1 21 21
Mortgage notes 2001 to 2012 6.3 to 6.6 59 62
Brazilian bank note 2001 to 2004 12.1 - 92
Other 72 137
------------ -----------
1,045 1,080
Less cross currency interest rate swap adjustments 221 141
Less current maturities 29 225
------------ -----------
Total long-term debt, net $ 795 $ 714
============ ===========
</TABLE>
-9-
<PAGE>
WHIRLPOOL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Annual maturities of long-term debt in the next five years, are $29 million, $40
million, $219 million, $20 million and $8 million.
The company paid interest, including a portion recorded as discontinued
operations in 1998, on short-term and long-term debt totaling $181 million, $151
million and $290 million in 2000, 1999 and 1998.
(6) FAIR VALUE OF FINANCIAL INSTRUMENTS
The following methods and assumptions were used in estimating fair values of
financial instruments:
Cash and Equivalents and Notes Payable: The carrying amounts approximate fair
values.
Long-term Debt and WFC Preferred Stock: The fair values are estimated using
discounted cash flow analyses based on incremental borrowing or dividend yield
rates for similar types of borrowing or equity arrangements. The WFC preferred
stock carrying amount approximates fair value.
Derivative Financial Instruments: The fair values of interest rate swaps, cross
currency interest rate swaps, foreign currency forward contracts and commodity
swaps are estimated by discounting future cash flows based on market rates.
The carrying amounts and fair values of financial instruments for which the fair
value does not approximate the liability carrying amount are as follow:
<TABLE>
<CAPTION>
2000 1999
--------------------------------- ---------------------------------
Carrying Fair Carrying Fair
December 31 (millions of dollars) Amount Value Amount Value
-------------- ------------- -------------- -------------
<S> <C> <C> <C> <C>
Long-term debt (including current portion) $1,045 $1,108 $1,080 $1,098
Derivative financial instruments (notional
amounts indicated):
Interest rate and cross currency
interest rate swaps ($1,194 million in
2000; $1,026 million in 1999) (221) (211) (141) (101)
Domestic interest rate swaps
($200 million in 2000; $120 million in 1999) - - - (1)
Transaction hedges:
Foreign currency forward and option contracts
($645 million in 2000; $751 million in 1999) 2 1 - 12
Commodity swaps
($20 million in 2000; $14 million in 1999) - - - (2)
-------------- ------------- -------------- -------------
</TABLE>
The company manages a portfolio of cross currency interest rate swaps that serve
to effectively convert U.S. Dollar (USD) denominated debt into that of various
European currencies. Through May 15, 2000, such local currency denominated debt
served as an effective hedge against the European cash flows and net assets that
existed. In May, 2000, the company undesignated these contracts as hedges of the
net investment in its
-10-
<PAGE>
WHIRLPOOL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
European operations and entered into offsetting Euro denominated currency swaps,
effectively locking in an approximate $221 million positive position on the
previously referenced cross currency interest rate swaps. The positive cash
position will be realized as the contracts mature in 2002 and 2004.
In September 2000, the company's domestic swap portfolio was effectively
neutralized when the company entered into new interest rate swaps that exactly
offset the original contracts. All of the company's interest rate swaps mature
within the next twelve months.
Foreign currency forward contracts mature within one day to two years and
involve principally European, Brazilian and North American currencies. Copper
and aluminum commodity swaps mature within two years.
-11-
<PAGE>
WHIRLPOOL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(7) STOCKHOLDERS' EQUITY
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. The company has purchased
11.3 million shares at a cost of $594 million through December 31, 2000, of
which 8.7 million shares or $427 million occurred during 2000.
During the first quarter of 2000, the company sold put options, which give the
purchaser the right to sell shares of the company's stock to the company at a
specified price. The put option contracts allow the company to determine the
method of settlement. The company's objective in selling put options is to
reduce the average price of repurchased shares. During 2000, the company
received $4 million of premiums from the sale of put options which is included
as a component of paid-in-capital on the Statement of Changes in Stockholders'
Equity. As of December 31, 2000, there were 702,800 put options outstanding with
an average strike price of $52.16 per share, all of which expire in 2001.
In addition to its common stock, the company has 10 million authorized shares of
preferred stock (par value $1 per share), none of which is outstanding.
Consolidated retained earnings at December 31, 2000 included $20 million of
equity in undistributed net earnings of affiliated companies.
The cumulative translation component of stockholders' equity represents the
effect of translating net assets of the company's international subsidiaries
offset by related hedging activity, net of tax, and is included as a component
of other comprehensive income on the Statement of Changes in Stockholders'
Equity. Stock option transactions, restricted stock grants and put options
account for the changes in paid-in capital.
Preferred Stock Purchase Rights
One Preferred Stock Purchase Right (Rights) is outstanding for each share of
common stock. The Rights, which expire May 22, 2008, will become exercisable 10
days after a person or group (an Acquiring Person) has acquired, or obtained the
right to acquire, beneficial ownership of 15% or more of the outstanding common
stock (the Trigger Date) or 10 business days after the commencement, or public
disclosure of an intention to commence, a tender offer or exchange offer by a
person that could result in beneficial ownership of 15% or more of the
outstanding common stock. Each Right entitles the holder to purchase from the
company one one-thousandth of a share of a Junior Participating Preferred Stock,
Series B, par value $1.00 per share, of the company at a price of $300 per one
one-thousandth of a Preferred Share subject to adjustment.
If a person becomes an Acquiring Person, proper provision shall be made so that
each holder of a Right, other than Rights that are or were beneficially owned by
the Acquiring Person (which will thereafter be void), shall thereafter have the
right to receive upon exercise of such Right that number of shares of common
stock (or other securities) having at the time of such transaction a market
value of two times the exercise price of the Right. If a person becomes an
Acquiring Person and the company is involved in a merger or other business
combination transaction where the company is not the surviving corporation or
where common stock is changed or exchange or in a transaction or transactions in
which 50% or more of its consolidated assets or earning power are sold, proper
provision shall be made so that each holder of a Right (other than such
Acquiring Person) shall thereafter have the right to receive, upon the exercise
thereof at the then current exercise price of the Right, that number of shares
of common stock of the
-12-
<PAGE>
WHIRLPOOL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
acquiring company which at the time of such transaction would have a market
value of two times the exercise price of the Right. In addition, if an Acquiring
Person, does not have beneficial ownership of 50% or more of the common stock,
the company's Board of Directors has the option of exchanging all or part of the
Rights for an equal number of shares of common stock in the manner described in
the Rights Agreement.
Prior to the Trigger Date, the Board of Directors of the company may redeem the
Rights in whole, but not in part, at a price of $.01 per Right, payable in cash,
shares of common stock or any other consideration deemed appropriate by the
Board of Directors. Immediately upon action of the Board of Directors ordering
redemption of the Rights, the ability of holders to exercise the Rights will
terminate and such holders will only be able to receive the redemption price.
Until such time as the Rights become exercisable, the Rights have no voting or
dividend privileges and are attached to, and do not trade separately from, the
common stock.
The company covenants and agrees that it will cause to be reserved and kept
available at all times a sufficient number of shares of Preferred Stock (and
following the occurrence of a Triggering Event, shares of common stock and/or
other securities) to permit the exercise in full of all Rights from time to time
outstanding.
-13-
<PAGE>
WHIRLPOOL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(8) STOCK OPTION AND INCENTIVE PLANS
Stock option and incentive plans are accounted for in accordance with Accounting
Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees" and
related Interpretations. Generally, no compensation expense is recognized for
stock options with exercise prices equal to the market value of the underlying
shares of stock at the date of grant. Compensation expense is recognized for
ESAP, RSVP, SIRP and CSP awards based on the market value of the underlying
shares of stock when the number of shares is determinable.
The company's stock option and incentive plans permit the grant of stock options
and other stock awards covering up to 11.5 million shares to key employees of
the company and its subsidiaries, of which 4.0 million shares are available for
grant at December 31, 2000. The plans authorize the grant of both incentive and
nonqualified stock options and, further, authorize the grant of stock
appreciation rights and related supplemental cash payments independently of or
with respect to options granted or outstanding, as well as restricted or phantom
shares. Stock options generally have 10 year terms, and vest and become fully
exercisable over a two to three year period after date of grant. An Executive
Stock Appreciation and Performance Program (ESAP), a Restricted Stock Value
Program (RSVP), a Career Stock Program (CSP) a Key Employee Retention Program
(KERP) and a Special Incentive and Retention Plan (SIRP) have been established
under the plans. Performance awards under ESAP, RSVP and KERP are generally
earned over multi-year time periods upon the achievement of certain performance
objectives or upon a change in control of the company. CSP and SIRP awards are
earned at specified dates during a participant's career with the company or upon
change in control of the company. ESAP awards are payable in cash, common stock,
or a combination thereof when earned. RSVP, KERP and SIRP grant restricted
shares, which may not be sold, transferred or encumbered until the restrictions
lapse. CSP grants phantom stock awards which are redeemable for shares of the
company's common stock upon the recipient's retirement after attaining age 60
and are subject to certain noncompetition provisions. Outstanding restricted and
phantom shares totaled 770,000 with a weighted-average grant-date fair value of
$50.35 per share at December 31, 2000 and 847,000 with a weighted-average grant-
date fair value of $51.12 per share at December 31, 1999. Expenses under the
plan were $1 million, $8 million and $17 million in 2000, 1999 and 1998.
Under the Nonemployee Director Stock Ownership Plan, each nonemployee director
is automatically granted 400 shares of common stock annually and is eligible for
a stock option grant of 600 shares if the company's earnings meet a prescribed
earnings formula. In addition, each nonemployee director is awarded annually
deferred compensation in the form of 400 shares of phantom stock, which is
converted into common stock on a one-for-one basis and paid when the director
leaves the Board. This plan provides for the grant of up to 300,000 shares as
either stock or stock options, of which 174,000 shares are available for grant
at December 31, 2000. The stock options vest and become exercisable six months
after date of grant. There were no significant expenses under this plan for
2000, 1999 or 1998.
The company maintains an employee stock option plan (PartnerShare) that may
grant substantially all full-time U.S. employees a fixed number of stock options
that vest over a three year period and may be exercised over a 10 year period.
PartnerShare authorizes the grant of up to 2.5 million shares of which 470,000
shares are available for grant at December 31, 2000.
-14-
<PAGE>
WHIRLPOOL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Had the company elected to adopt the recognition provisions of SFAS No. 123,
"Accounting for Stock-Based Compensation," under which stock options are
accounted for at estimated fair value, proforma net earnings and diluted net
earnings per share would be as follows:
<TABLE>
<CAPTION>
December 31 (millions of dollars) 2000 1999 1998
----------------------------------------------------
<S> <C> <C> <C>
Net earnings:
As reported $ 367 $ 347 $ 325
Proforma 355 338 318
Diluted net earnings per share:
As reported $5.20 $4.56 $4.25
Proforma 5.03 4.44 4.16
</TABLE>
The fair value of stock options used to compute proforma net earnings and
diluted net earnings per share disclosures is the estimated present value at
grant date using the Black-Scholes option-pricing model with the following
assumptions for 2000, 1999 and 1998: expected volatility factor of .286, .255
and .216; dividend yield of 2.7%, 2.2% and 2.4%; risk-free interest rate of
5.1%, 6.4% and 4.5% and a weighted-average expected option life of 5 years for
all three years.
-15-
<PAGE>
WHIRLPOOL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A summary of stock option information follows:
<TABLE>
<CAPTION>
2000 1999 1998
------------------------------------------------------------------------------------------------
Weighted- Weighted- Weighted-
December 31 Average Average Average
(thousands of shares, Number Exercise Number Exercise Number Exercise
except per share data) of Shares Price of Shares Price of Shares Price
------------ ------------- ------------ ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Outstanding at January 1 4,605 $52.21 4,120 $50.59 4,230 $47.06
Granted 2,222 47.59 1,629 53.19 919 61.83
Exercised (190) 42.23 (960) 46.35 (770) 44.88
Canceled or expired (200) 53.83 (184) 55.30 (259) 49.81
------------ ------------ -----------
Outstanding at December 31 6,437 $50.86 4,605 $52.21 4,120 $50.59
============ ============= ============ ============ =========== ===========
Exercisable at December 31 3,545 $52.44 2,611 $50.14 2,534 $47.65
============ ============= ============ ============ =========== ===========
Fair value of options
granted during the year $12.23 $14.59 $12.67
============= ============ ===========
</TABLE>
Of the outstanding options at December 31, 2000, 1,616,000 options, of which
843,000 are exercisable at a weighted-average price of $42.78, have exercise
prices ranging from $34.94 to $49.09 and a weighted-average remaining life of
7.1 years. The remaining 4,821,000 outstanding options, of which 2,702,000 are
exercisable at a weighted-average price of $55.45, have exercise prices ranging
from $50.44 to $72.34 and a weighted-average remaining life of 7.5 years.
-16-
<PAGE>
WHIRLPOOL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(9) INCOME TAXES
Income tax provisions from continuing operations are as follows:
<TABLE>
<CAPTION>
Year ended December 31 (millions of dollars) 2000 1999 1998
------------------------------------------------
<S> <C> <C> <C>
Current:
Federal $ 149 $ 148 $ 132
State and local 14 25 22
Foreign 34 52 40
------------ ------------ ------------
197 225 194
Deferred:
Federal 26 (2) 10
State and local 3 - 6
Foreign (26) (26) (1)
------------ ------------ ------------
3 (28) 15
------------ ------------ ------------
Total income tax provision $ 200 $ 197 $ 209
============ ============ ============
</TABLE>
Domestic and foreign earnings (loss) before income taxes and other items from
continuing operations are as follows:
<TABLE>
<CAPTION>
Year ended December 31 (millions of dollars) 2000 1999 1998
-------------------------------------
<S> <C> <C> <C>
Domestic $ 479 $ 524 $ 407
Foreign 98 (10) 157
--------- --------- ---------
Total earnings before taxes and other items $ 577 $ 514 $ 564
========= ========= =========
</TABLE>
Earnings before income taxes and other items, including discontinued operations
(refer to Note 3), were $577 million, $514 million and $589 million for 2000,
1999 and 1998, respectively.
-17-
<PAGE>
WHIRLPOOL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Reconciliations between the U.S. federal statutory income tax rate and the
consolidated effective income tax (benefit) rate for earnings before income
taxes and other items for continuing operations are as follows:
Year ended December 31 2000 1999 1998
----------------------------------
U.S. federal statutory rate 35.0 % 35.0 % 35.0 %
State and local taxes, net of
federal tax benefit 2.7 5.5 5.3
Nondeductible goodwill amortization 1.0 1.6 1.5
Excess foreign taxes (benefits) (1.5) (1.1) (1.0)
Unrecognized prior year foreign
deferred
tax assets and carryforwards (0.6) (1.7) (1.9)
Foreign dividends and subpart F income 2.3 2.8 2.2
Foreign government tax incentive (3.7) (0.2) (4.0)
Foreign tax credits (1.7) (1.0) -
Unbenefited operating losses 0.9 2.1 3.3
Permanent differences 0.5 (6.3) 0.8
Other items (0.2) 1.5 (4.1)
------------- ------- ------
Effective income tax (benefit) rate 34.7 % 38.2 % 37.1 %
============= ======= ======
Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities used for financial
reporting purposes and the amounts used for income tax purposes.
-18-
<PAGE>
WHIRLPOOL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Significant components of the company's deferred tax liabilities and assets are
as follows:
December 31 (millions of dollars) 2000 1999
------- -------
Deferred tax liabilities:
Property, plant and equipment $ 92 $ 109
Financial services leveraged leases 122 124
Pensions 67 20
Software costs 26 28
Contested liabilities 23 34
Other 116 108
------- -------
Total deferred tax liabilities 446 423
Deferred tax assets:
Postretirement obligation 184 176
Restructuring costs 11 24
Product warranty accrual 25 26
Receivable and inventory allowances 62 81
Loss carryforwards 139 152
Employee compensation 45 45
Other 31 55
------- -------
Total deferred tax assets 497 559
Valuation allowances for deferred tax assets (26) (18)
------- -------
Deferred tax assets, net of valuation allowances 471 541
------- -------
Net deferred tax assets $ 25 $ 118
======= =======
The company has recorded valuation allowances to reflect the estimated amount of
net operating loss carryforwards, restructuring costs and other deferred tax
assets which may not be realized.
The company provides deferred taxes on the undistributed earnings of foreign
subsidiaries and affiliates to the extent such earnings are expected to be
remitted. Generally, earnings have been remitted only when no significant net
tax liability would have been incurred. No provision has been made for U.S. or
foreign taxes that may result from future remittances of the undistributed
earnings ($493 million at December 31, 2000) of foreign subsidiaries and
affiliates expected to be reinvested indefinitely. Determination of the
deferred income tax liability on these unremitted earnings is not practicable as
such liability, if any, is dependent on circumstances existing when remittance
occurs.
The company paid income taxes of $262 million in 2000, $235 million in 1999 and
$239 million in 1998.
At December 31, 2000, the company has foreign net operating loss carryforwards
of $270 million, which are primarily nonexpiring.
-19-
<PAGE>
WHIRLPOOL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(10) PENSION AND POSTRETIREMENT MEDICAL BENEFITS PLANS
The company maintains both contributory and noncontributory defined benefit
pension plans covering substantially all North American and Brazilian employees
and certain European employees. Benefits are based primarily on compensation
during a specified period before retirement or specified amounts for each year
of service. The company's present funding policy is to generally make the
minimum annual contribution required by applicable regulations. Assets held by
the plans consist primarily of listed common stocks and bonds, government
securities, investments in trust funds, bank deposits and other investments
In 2000, the company recognized settlement gains, net of termination benefit
costs, of $39 million. These gains related to the company's Voluntary Retirement
Program implemented in North America during the fourth quarter of 2000.
Although the company's pension plans are overfunded on a combined basis by $658
million as of December 31, 2000 due to the company's US funding policy and
higher than expected returns on plan assets in recent years, several of the
plans do not hold or have minimal assets, resulting in an underfunded position.
The projected benefit obligation, accumulated benefit obligation, and fair value
of plan assets for the pension plans with accumulated benefit obligations in
excess of plan assets were $83 million, $73 million and $6 million,
respectively, as of December 31, 2000, $80 million, $71 million and $5 million,
respectively, as of December 31, 1999, and $86 million, $67 million and $6
million, respectively, as of December 31, 1998.
-20-
<PAGE>
WHIRLPOOL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
(millions of dollars)
Pension Benefits
------------------------------------
(millions of dollars) 2000 1999 1998
------ ------ ------
<S> <C> <C> <C>
Change in benefit obligation:
Benefit obligationat as of January 1 $1,242 $1,344 $1,255
Service cost 48 50 49
Interest cost 101 98 91
Plan participants' contributions 0 1 1
Amendments 11 7 30
Actuarial (gain) loss 38 (114) 28
Benefits paid (175) (93) (86)
Curtailments 0 0 (14)
Special termination benefits 32 (2) (2)
Foreign currency exchange rate changes (14) (49) (8)
------ ------ ------
Benefit obligation as of December 31 $1,283 $1,242 $1,344
====== ====== ======
Change in plan assets:
Fair value of plan assets as of January 1 $2,201 $1,672 $1,452
Actual return on plan assets (57) 644 292
Employer contributions 3 12 17
Plan participants' contributions 0 1 1
401 (h) transfer (20) 0 0
Benefits paid (175) (93) (86)
Foreign currency exchange rate changes (11) (35) (4)
------ ------ ------
Fair value of plan assets as of December 31 $1,941 $2,201 $1,672
====== ====== ======
</TABLE>
-21-
<PAGE>
WHIRLPOOL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Pension Benefits
-----------------------------------------------
(millions of dollars) 2000 1999 1998
---------- ---------- ----------
<S> <C> <C> <C>
Reconciliation of prepaid (accrued)
cost and total amount recognized:
Funded status as of December 31 $ 658 $ 959 $ 328
Unrecognized actuarial (gain) (702) (1,087) (471)
Unrecognized prior service cost 80 73 71
Unrecognized transition asset 11 11 22
---------- ---------- ----------
Prepaid (accrued) cost as of December 31 $ 47 $ (44) $ (50)
========== ========== ==========
Prepaid cost at December 31 $ 160 $ 85 $ 114
Accrued benefit liability at December 31 (123) (138) (173)
Intangible asset 1 2 2
Other 9 7 7
---------- ---------- ----------
Total recognized as of December 31 $ 47 $ (44) $ (50)
========== ========== ==========
Assumptions as of December 31;
Discount rate 5.0%-11.3% 5.0%-11.3% 5.5%-9.0%
Expected return on assets 6.0%-11.3% 6.0%-11.3% 6.0%-9.5%
Rate of compensation increase 1.0%-8.0% 2.5%-8.0% 2.0%-8.0%
Components of net periodic benefit cost:
Service cost $ 48 $ 50 $ 49
Interest cost 101 98 91
Expected return on plan assets (178) (127) (112)
Recognized actuarial (gain) (39) (7) (8)
Amortization of prior service cost 10 9 9
Amortization of transition asset (1) (1) -
---------- ---------- ----------
Net periodic benefit cost (59) 22 29
Curtailments - - (7)
Special termination benefits 32 (1) 2
Settlements (71) - (3)
---------- ---------- ----------
Total cost $ (98) $ 21 $ 21
========== ========== ==========
</TABLE>
<PAGE>
WHIRLPOOL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The company also currently sponsors a defined benefit health-care plan that
provides postretirement medical benefits to full time U.S. employees who have
worked 10 years and attained age 55 while in service with the company. The Plan
is currently noncontributory and contains cost-sharing features such as
deductibles, coinsurance and a lifetime maximum. The company does not fund the
plan. No significant postretirement medical benefits are provided by the
company to non-U.S. employees.
<TABLE>
<CAPTION>
Postretirement Medical Benefits
----------------------------------------------------------------
(millions of dollars) 2000 1999 1998
------------------ ------------------ ------------------
<S> <C> <C> <C>
Change in benefit obligation:
Benefit obligation as of January 1 $ 414 $ 428 $ 388
Service cost 9 10 10
Interest cost 32 30 29
Actuarial (gain) loss 6 (34) 22
Benefits paid (22) (20) (21)
------------------ ------------------ ------------------
Benefit obligation as of December 31 $ 439 $ 414 $ 428
================== ================== ==================
Change in plan assets:
Fair value of plan assets as of January 1 $ - $ - $ -
Contributions 22 20 21
Benefits paid (22) (20) (21)
------------------ ------------------ ------------------
Fair value of plan assets as of December 31 $ - $ - $ -
================== ================== ==================
Reconciliation of prepaid (accrued)
cost and total amount recognized:
Funded status as of December 31 $ (439) $ (414) $ (428)
Unrecognized actuarial (gain) loss (21) (27) 8
------------------ ------------------ ------------------
Prepaid (accrued) cost as of December 31 $ (460) $ (441) $ (420)
================== ================== ==================
Prepaid cost at December 31 - - -
Accrued benefit liability at December 31 (460) (441) (420)
------------------ ------------------ ------------------
Total recognized as of December 31 $ (460) $ (441) $ (420)
================== ================== ==================
Weighted average assumptions as of
December 31:
Discount rate 8.00% 8.00% 7.25%
Medical costs trend rate:
For year ending December 31 6.00% 7.00% 7.00%
Components of net periodic benefit cost:
Service cost $ 9 $ 10 $ 10
Interest cost 32 30 29
------------------ ------------------ ------------------
Net periodic benefit cost $ 41 $ 40 $ 39
------------------ ------------------ ------------------
Total cost $ 41 $ 40 $ 39
================== ================== ==================
</TABLE>
-23-
<PAGE>
WHIRLPOOL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The medical cost trend significantly affects the reported postretirement benefit
cost and benefit obligations. A one-percentage-point change in the assumed
health care cost trend rate would have the following effects:
<TABLE>
<CAPTION>
One-percentage- One-percentage-
(millions of dollars) point increase point decrease
----------------- -----------------
<S> <C> <C>
Effect on total service cost and interest cost components $ 3 $ (3)
Effect on postretirement benefit obligation 30 (28)
</TABLE>
The U.S. pension plans provide that in the event of a plan termination within
five years following a change in control of the company, any assets held by the
plans in excess of the amounts needed to fund accrued benefits would be used to
provide additional benefits to plan participants. A change in control generally
means one not approved by the incumbent board of directors, including an
acquisition of 25% or more of the voting power of the company's outstanding
stock or a change in a majority of the incumbent board.
The company maintains a 401(k) defined contribution plan covering substantially
all U.S. employees. Company matching contributions for domestic hourly and
certain other employees under the plan, based on the company's annual operating
results and the level of individual participant's contributions, amounted to $12
million, $9 million and $7 million in 2000, 1999 and 1998.
-24-
<PAGE>
WHIRLPOOL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(11) 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 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 credit risk.
At December 31, 2000, the company had approximately $400 million in receivables
subject to repurchase provisions and $106 million in guarantees of customer
lines of credit at commercial banks.
At December 31, 2000, the company had noncancelable operating lease commitments
totaling $251 million. The annual future minimum lease payments are detailed in
the table below.
Annual
(millions of dollars) Expense
---------
2001 $ 57
2002 51
2003 37
2004 30
2005 28
Thereafter 48
----------
Total noncancellable operating lease commitments $ 251
==========
The company's rent expense was $93 million, $87 million and $81 million for the
years 2000, 1999 and 1998, respectively.
-25-
<PAGE>
WHIRLPOOL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(12) BUSINESS SEGMENT INFORMATION
Operating segments are defined as components of an enterprise about which
separate financial information is available that is evaluated on a regular basis
by the chief operating decision maker, or decision making group, in deciding how
to allocate resources to an individual segment and in assessing performance of
the segment.
The company identifies such segments based upon geographical regions of
operations because each operating segment manufactures home appliances and
related components, but serves strategically different markets. The chief
operating decision maker evaluates performance based upon each segment's
operating income, which is defined as income before interest income or interest
expense, taxes and minority interests. Intersegment sales and transfers are
generally at current market prices, as if the sales or transfers were to third
parties. The "Other" segment primarily includes corporate expenses and
eliminations.
The company generally evaluates business segments based on net sales, not
including intersegment appliance sales. Intersegment sales are included in
Other/Eliminations. Total assets are those assets directly associated with the
respective operating activities. Other assets consist principally of assets
related to corporate activities.
Substantially all of the company's trade receivables are from distributors and
retailers.
Sales activity with Sears, Roebuck and Co., a North American major home
appliance retailer, represented 20%, 18% and 17% of consolidated net sales in
2000, 1999 and 1998. Related receivables were 22%, 22% and 16% of consolidated
trade receivables for December 31, 2000, 1999 and 1998.
The company conducts business in two countries which individually comprised over
ten percent of consolidated net sales and total assets within the last three
years. The United States represented 55%, 54% and 50% of net sales for 2000,
1999 and 1998, respectively, while Brazil totalled 15%, 15% and 19% for 2000,
1999 and 1998. As a percentage of total assets, the United States accounted for
74%, 65% and 57% at the end of 2000, 1999 and 1998. Brazil accounted for 23%,
24% and 31% of total assets at the end of 2000, 1999 and 1998, respectively.
-26-
<PAGE>
WHIRLPOOL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
North Latin Other/ Total
(millions of dollars) America Europe America Asia Eliminations Whirlpool
---------------- ------------ ------------- ---------- -------------- ------------
<S> <C> <C> <C> <C> <C> <C>
GEOGRAPHIC SEGMENTS
Net sales
2000 $6,223 $2,156 $1,706 $390 $(150) $10,325
1999 $6,159 $2,452 $1,668 $375 $(143) $10,511
1998 $5,599 $2,439 $2,090 $313 $(118) $10,323
Intangible amortization
2000 $ 3 $ 13 $ 3 $ 5 $ 5 $ 29
1999 $ 3 $ 16 $ 2 $ 5 $ 5 $ 31
1998 $ 3 $ 16 $ 6 $ 4 $ 10 $ 39
Depreciation
2000 $ 157 $ 74 $ 106 $ 17 $ 17 $ 371
1999 $ 151 $ 88 $ 95 $ 21 $ 31 $ 386
1998 $ 143 $ 94 $ 126 $ 15 $ 21 $ 399
Operating profit(loss)
2000 $ 682 $ 102 $ 125 $ 21 $(123) $ 807
1999 $ 725 $ 177 $ 120 $ 13 $(160) $ 875
1998 $ 630 $ 122 $ 120 $(17) $(167) $ 688
Total assets
2000 $2,624 $1,948 $1,600 $704 $ 26 $ 6,902
1999 $2,254 $1,921 $1,653 $719 $ 279 $ 6,826
1998 $2,091 $2,298 $2,499 $722 $ 325 $ 7,935
Capital expenditures
2000 $ 175 $ 94 $ 86 $ 10 $ 10 $ 375
1999 $ 227 $ 77 $ 110 $ 9 $ 14 $ 437
1998 $ 188 $ 59 $ 239 $ 25 $ 12 $ 523
</TABLE>
-27-
<PAGE>
WHIRLPOOL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(13) QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
----------------------------------------------------------------------------
(millions of dollars, except per share data) December 31 September 30 June 30 March 31
--------------- ---------------- ------------- ----------------
<S> <C> <C> <C> <C>
2000:
Net sales $ 2,579 $ 2,570 $ 2,586 $ 2,590
Cost of products sold $ 1,966 $ 1,973 $ 1,958 $ 1,942
Earnings from continuing operations $ 67 $ 67 $ 121 $ 112
Net earnings $ 67 $ 67 $ 121 $ 112
Per share of common stock:
Basic earnings from continuing operations $ 1.01 $ .98 $ 1.68 $ 1.53
Basic net earnings $ 1.01 $ .98 $ 1.68 $ 1.53
Diluted earnings from continuing operations $ 1.00 $ .98 $ 1.66 $ 1.52
Diluted net earnings $ 1.00 $ .98 $ 1.66 $ 1.52
Dividends $ .34 $ .34 $ .34 $ .34
</TABLE>
The fourth quarter earnings and earnings per share were increased by $23 million
after taxes, or $0.35 per share, from the settlement gain on the company's
Voluntary Retirement Program in North America, partly offset by one-time product
introduction costs of $9 million after taxes, or $0.13 per share and expenses to
increase sales allowances of $8 million after taxes or $0.11 per share.
<TABLE>
<CAPTION>
Three Months Ended
------------------------------------------------------------------------------
(millions of dollars, except per share data) December 31 September 30 June 30 March 31
-------------- ------------------ ------------ -----------------
<S> <C> <C> <C> <C>
1999:
Net sales $ 2,689 $ 2,719 $ 2,617 $ 2,486
Cost of products sold $ 1,983 $ 2,036 $ 1,967 $ 1,866
Earnings from continuing operations $ 113 $ 107 $ 99 $ 28
Net earnings $ 113 $ 107 $ 99 $ 28
Per share of common stock:
Basic earnings from continuing operations $ 1.52 $ 1.42 $ 1.32 $ .37
Basic net earnings $ 1.52 $ 1.42 $ 1.32 $ .37
Diluted earnings from continuing operations $ 1.51 $ 1.40 $ 1.30 $ .36
Diluted net earnings $ 1.51 $ 1.40 $ 1.30 $ .36
Dividends $ .34 $ .34 $ .34 $ .34
</TABLE>
The first quarter earnings and earnings per share were reduced $60 million
after-taxes and minority interest, or $0.79 per share, by the Brazilian currency
devaluation.
-28-
<PAGE>
WHIRLPOOL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Report of Ernst & Young LLP, Independent Auditors
The Stockholders and Board of Directors
Whirlpool Corporation
Benton Harbor, Michigan
We have audited the accompanying consolidated balance sheets of Whirlpool
Corporation as of December 31, 2000 and 1999, and the related consolidated
statements of earnings, stockholders' equity and cash flows for each of the
three years in the period ended December 31, 2000. These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits. We did not
audit the 1998 financial statements of Brasmotor S.A. and its consolidated
subsidiaries, whose statements reflect net earnings of $58 million for the year
ended December 31, 1998. Those statements were audited by other auditors whose
reports have been furnished to us, and our opinion, insofar as it relates to
data included for Brasmotor S.A. and its consolidated subsidiaries, is based on
the reports of the other auditors.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe our audits and the reports of the other auditors
provide a reasonable basis for our opinion.
In our opinion, based on our audits and the reports of the other auditors, the
financial statements referred to above present fairly, in all material respects,
the consolidated financial position of Whirlpool Corporation at December 31,
2000 and 1999, and the consolidated results of its operations and its cash flows
for each of the three years in the period ended December 31, 2000, in conformity
with accounting principles generally accepted in the United States.
Chicago, Illinois
January 19, 2001
-30-
<PAGE>
WHIRLPOOL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Report by Management on the Consolidated Financial Statements
The management of Whirlpool Corporation has prepared the accompanying financial
statements. The financial statements have been audited by Ernst & Young,
independent auditors, whose report, based upon their audits and the reports of
other independent auditors, expresses the opinion that these financial
statements present fairly the consolidated financial position, results of
operations and cash flows of Whirlpool and its subsidiaries in accordance with
accounting principles generally accepted in the United States. Their audits are
conducted in conformity with auditing standards generally accepted in the United
States.
The financial statements were prepared from the company's accounting records,
books and accounts which, in reasonable detail, accurately and fairly reflect
all material transactions. The company maintains a system of internal controls
designed to provide reasonable assurance that the company's accounting records,
books and accounts are accurate and that transactions are properly recorded in
the company's books and records, and the company's assets are maintained and
accounted for, in accordance with management's authorizations. The company's
accounting records, policies and internal controls are regularly reviewed by an
internal audit staff.
The audit committee of the board of directors of the company, which is composed
of five directors who are not employed by the company, considers and makes
recommendations to the board of directors as to accounting and auditing matters
concerning the company, including recommending for appointment by the board the
firm of independent auditors engaged on an annual basis to audit the financial
statements of Whirlpool and its majority-owned subsidiaries. The audit committee
meets with the independent auditors at least three times each year to review the
scope of the audit, the results of the audit and such recommendations as may be
made by said auditors with respect to the company's accounting methods and
system of internal controls.
Mark E. Brown
Executive Vice President and Chief Financial Officer
-31-
<PAGE>
CONSOLIDATED STATISTICAL REVIEW
<TABLE>
<CAPTION>
(millions of dollars except share and employee data)
CONSOLIDATED OPERATIONS 2000 1999 1998 1997 1996 1995
- ----------------------- ---- ---- ---- ---- ---- ----
Net sales $ 10,325 $ 10,511 $ 10,323 $ 8,617 $ 8,523 $ 8,163
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Operating profit (1) $ 807 $ 875 $ 688 $ 11 $ 278 $ 366
Earnings (loss) from continuing operations
before income taxes and other items $ 577 $ 514 $ 564 $ (171) $ 100 $ 214
Earnings (loss) from continuing operations $ 367 $ 347 $ 310 $ (46) $ 141 $ 195
Earnings (loss) from discontinued operations(2) $ 0 $ 0 $ 15 $ 31 $ 15 $ 14
Net earnings (loss) (3) $ 367 $ 347 $ 325 $ (15) $ 156 $ 209
- -----------------------------------------------------------------------------------------------------------------------------
Net capital expenditures $ 375 $ 437 $ 523 $ 378 $ 336 $ 483
Depreciation $ 371 $ 386 $ 399 $ 322 $ 318 $ 282
Dividends paid $ 70 $ 103 $ 102 $ 102 $ 101 $ 100
- -----------------------------------------------------------------------------------------------------------------------------
CONSOLIDATED FINANCIAL POSITION
- -------------------------------
Current assets $ 3,237 $ 3,177 $ 3,882 $ 4,281 $ 3,812 $ 3,541
Current liabilities $ 3,303 $ 2,892 $ 3,267 $ 3,676 $ 4,022 $ 3,829
Current assets minus current liabilities $ (66) $ 285 $ 615 $ 605 $ (210) $ (288)
Property, plant and equipment-net $ 2,134 $ 2,178 $ 2,418 $ 2,375 $ 1,798 $ 1,779
Total assets $ 6,902 $ 6,826 $ 7,935 $ 8,270 $ 8,015 $ 7,800
Long-term debt $ 795 $ 714 $ 1,087 $ 1,074 $ 955 $ 983
Stockholders' equity $ 1,684 $ 1,867 $ 2,001 $ 1,771 $ 1,926 $ 1,877
- -----------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA
- --------------
Basic earnings (loss) from continuing $ 5.24 $ 4.61 $ 4.09 $ (0.62) $ 1.90 $ 2.64
operation
Diluted earnings (loss) from continuing
operation $ 5.20 $ 4.56 $ 4.06 $ (0.62) $ 1.88 $ 2.60
Diluted net earnings (loss) (3) $ 5.20 $ 4.56 $ 4.25 $ (0.20) $ 2.08 $ 2.78
Dividends $ 1.36 $ 1.36 $ 1.36 $ 1.36 $ 1.36 $ 1.36
Book value $ 23.84 $ 24.55 $ 26.16 $ 23.71 $ 25.93 $ 25.40
Closing Stock Price - NYSE $ 47 11/16 $ 65 1/16 $ 55 3/6 $ 55 $ 46 5/8 $ 53 1/4
- -----------------------------------------------------------------------------------------------------------------------------
KEY RATIOS (4)
- ----------
Operating profit margin 7.8% 8.3% 6.7% 0.1% 3.3% 4.5%
Pre-tax margin (5) 5.6% 4.9% 5.5% (2.0)% 1.2% 2.6%
Net margin (6) 3.6% 3.3% 3.0% (0.5)% 1.7% 2.4%
Return on average stockholders' equity (7) 20.7% 17.9% 17.2% (0.8)% 8.2% 11.6%
Return on average total assets (8) 5.5% 4.2% 4.6% (0.7)% 1.8% 3.0%
Current assets to current liabilities 1.0 1.1 1.2 1.2 0.9 0.9
Total debt-appliance business
as a percent of invested capital (9) 49.4% 37.7% 43.5% 46.1% 44.2% 45.2%
Price earnings ratio 9.2 14.3 13.0 -- 22.4 19.2
Interest coverage (10) 4.2 4.1 3.2 0.0 1.6 2.7
- -----------------------------------------------------------------------------------------------------------------------------
OTHER DATA
- ----------
Number of common shares
outstanding (in thousands):
Average - on a diluted basis 70,637 76,044 76,507 74,697 77,178 76,812
Year-end 66,265 74,463 76,089 75,262 74,415 74,081
Number of stockholders (year-end) 11,780 12,531 13,584 10,171 11,033 11,686
Number of employees (year-end) 60,695 61,066 58,630 61,370 48,163 45,435
Total return to shareholders
(five year annualized) (11) 0.3% 7.9% -1.2% 6.8% 6.3% 20.8%
<CAPTION>
CONSOLIDATED OPERATIONS 1994 1993 1992 1991 1990
- ----------------------- ---- ---- ---- ---- ----
Net sales $ 7,949 $ 7,368 $7,097 $6,550 $6,424
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Operating profit (1) $ 370 $ 504 $ 447 $ 353 $ 300
Earnings (loss) from continuing operations
before income taxes and other items $ 269 $ 418 $ 334 $ 256 $ 177
Earnings (loss) from continuing operations $ 147 $ 257 $ 179 $ 139 $ 45
Earnings (loss) from discontinued operations(2) $ 11 $ (28) $ 26 $ 31 $ 27
Net earnings (loss) (3) $ 158 $ 51 $ 205 $ 170 $ 72
- ----------------------------------------------------------------------------------------------------------
Net capital expenditures $ 418 $ 309 $ 288 $ 287 $ 265
Depreciation $ 246 $ 241 $ 275 $ 233 $ 247
Dividends paid $ 90 $ 85 $ 77 $ 76 $ 76
- ----------------------------------------------------------------------------------------------------------
CONSOLIDATED FINANCIAL POSITION
- -------------------------------
Current assets $ 3,078 $ 2,708 $2,740 $2,920 $2,900
Current liabilities $ 2,988 $ 2,763 $2,887 $2,931 $2,651
Current assets minus current liabilities $ 90 $ (55) $ (147) $ (11) $ 249
Property, plant and equipment-net $ 1,440 $ 1,319 $1,325 $1,400 $1,349
Total assets $ 6,655 $ 6,047 $6,118 $6,445 $5,614
Long-term debt $ 885 $ 840 $1,215 $1,528 $ 874
Stockholders' equity $ 1,723 $ 1,648 $1,600 $1,515 $1,424
- ----------------------------------------------------------------------------------------------------------
PER SHARE DATA
- --------------
Basic earnings (loss) from continuing $ 1.98 $ 3.60 $ 2.55 $ 2.00 $ 0.65
operation
Diluted earnings (loss) from continuing
operation $ 1.95 $ 3.47 $ 2.46 $ 1.98 $ 0.65
Diluted net earnings (loss) (3) $ 2.10 $ 0.71 $ 2.81 $ 2.41 $ 1.04
Dividends $ 1.22 $ 1.19 $ 1.10 $ 1.10 $ 1.10
Book value $ 23.21 $ 23.17 $22.91 $21.78 $20.51
Closing Stock Price - NYSE $ 50 1/4 $ 66 1/2 $ 44 5/8 $ 38 7/8 $ 23
- ----------------------------------------------------------------------------------------------------------
KEY RATIOS (4)
- ----------
Operating profit margin 4.7% 6.8% 6.3% 5.4% 4.7%
Pre-tax margin (5) 3.4% 5.7% 4.7% 3.9% 2.8%
Net margin (6) 1.8% 3.5% 2.5% 2.1% 0.7%
Return on average stockholders' equity (7) 9.4% 14.2% 13.1% 11.6% 5.1%
Return on average total assets (8) 2.8% 4.0% 3.3% 2.9% 1.4%
Current assets to current liabilities 1.0 1.0 0.9 1.0 1.1
Total debt-appliance business
as a percent of invested capital (9) 35.6% 33.8% 42.8% 46.7% 39.1%
Price earnings ratio 23.9 21.2 15.9 16.1 22.6
Interest coverage (10) 3.6 5.0 3.5 3.0 2.3
- ----------------------------------------------------------------------------------------------------------
OTHER DATA
- ----------
Number of common shares
outstanding (in thousands):
Average - on a diluted basis 77,588 76,013 75,661 72,581 69,595
Year-end 73,845 73,068 70,027 69,640 69,465
Number of stockholders (year-end) 11,821 11,438 11,724 12,032 12,542
Number of employees (year-end) 39,016 39,590 38,520 37,886 36,157
Total return to shareholders
(five year annualized) (11) 12.0% 25.8% 17.0% 6.7% 2.8%
</TABLE>
14
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-21
<SEQUENCE>5
<FILENAME>dex21.txt
<DESCRIPTION>SUBSIDIARIES OF THE COMPANY
<TEXT>
<PAGE>
EXHIBIT 21
Subsidiaries
------------
Subsidiary and Name Jurisdiction In
Under Which It Does Business Which Organized
- ---------------------------- ---------------
Whirlpool Europe B.V. The Netherlands
Whirlpool Properties, Inc. Michigan
Whirlpool Patents Company Michigan
Whirlpool Financial Corporation Delaware
Brasmotor S.A. Brazil
Multibras S.A. Eletrodomesticos Brazil
The names of the Company's other subsidiaries are omitted because, considered in
the aggregate as a single subsidiary, such subsidiaries would not constitute a
significant subsidiary as of December 31, 2000.
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.II1
<SEQUENCE>6
<FILENAME>dex23ii1.txt
<DESCRIPTION>CONSENT OF ERNST AND YOUNG
<TEXT>
<PAGE>
EXHIBIT 23ii(a)
CONSENT OF ERNST & YOUNG LLP
We consent to the incorporation by reference in Registration Statement Nos. 33-
34490, 33-34037, 33-21360, 33-00201, 2-64261, 33-05904, 33-40249, 33-43823, 333-
02827, 333-02825, 333-66211, 333-77167, 333-32886, and 333-42322 of Whirlpool
Corporation and Registration Statement Nos. 33-26680 and 33-53196 of Whirlpool
Corporation pertaining to the Whirlpool Savings Plan and Registration Statement
No. 333-66163 of Whirlpool Corporation pertaining to the Whirlpool 401(K) Plan
of our report dated January 19, 2001, with respect to the consolidated financial
statements and schedule of Whirlpool Corporation, included in this Annual Report
(Form 10-K) for the year ended December 31, 2000.
Ernst & Young LLP
Chicago, Illinois
March 14, 2001
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.IIB
<SEQUENCE>7
<FILENAME>dex23iib.txt
<DESCRIPTION>CONSENT OF PRICEWATERHOUSECOOPERS
<TEXT>
<PAGE>
EXHIBIT 23ii(b)
Consent of Independent Accountants
We hereby consent to the incorporation by reference in the Registration
Statements on Form S-3 (nos. 33-34490, 33-05904, 33-40249, 333-32886) and on
Form S-8 (nos. 33-34037, 33-21360, 33-00201, 2-64261, 33-43823, 333-02827,
333-02825, 333-66211, 333-77167, and 333-42322) of Whirlpool Corporation
and Registration Statements on Form S-8 nos. 33-26680 and 33-53196 of Whirlpool
Corporation pertaining to the Whirlpool Savings Plan and Registration Statement
on Form S-8 no. 333-66163 of Whirlpool Corporation pertaining to the Whirlpool
401(K) Plan of our reports dated January 18, 1999 with respect to the
consolidated financial statements of Brasmotor S.A. and its subsidiaries,
Multibras S.A. Eletrodomesticos and its subsidiaries and Empresa Brasileira de
Compressores S.A.--EMBRACO and its subsidiaries, included in this Annual Report
on Form 10-K.
PricewaterhouseCoopers
Auditores Independentes
/s/ PricewaterhouseCoopers
Sao Paulo, Brazil
March 14, 2001
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-24
<SEQUENCE>8
<FILENAME>dex24.txt
<DESCRIPTION>POWER OF ATTORNEY
<TEXT>
<PAGE>
EXHIBIT 24
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned, being a
director or officer, or both, of WHIRLPOOL CORPORATION, a Delaware corporation
(hereinafter called the "Corporation"), does hereby constitute and appoint DAVID
R. WHITWAM, JEFF M. FETTIG, and DANIEL F. HOPP, with full power to each of them
to act alone, as the true and lawful attorneys and agents of the undersigned,
with full power of substitution and resubstitution to each of said attorneys, to
execute, file or deliver any and all instruments and to do all acts and things
which said attorneys and agents, or any of them, deem advisable to enable the
Corporation to comply with the Securities Act of 1933, as amended, the
Securities Exchange Act of 1934, as amended, and any requirements of the
Securities and Exchange Commission in respect thereof, in connection with the
filing under said Securities Exchange Act of the Corporation's Annual Report on
Form 10-K for the year ended December 31, 2000, including specifically, but
without limitation of the general authority hereby granted, the power and
authority to sign his or her name as a director or officer, or both, of the
Corporation, as indicated below opposite his or her signature, to the Annual
Report on Form 10-K, or any amendment, post-effective amendment, or papers
supplemental thereto to be filed in respect of said Annual Report on Form 10-K;
and each of the undersigned does hereby fully ratify and confirm all that said
attorneys and agents, or any of them, or the substitute of any of them, shall do
or cause to be done by virtue hereof.
IN WITNESS WHEREOF, each of the undersigned has subscribed these
presents, as of the 20th day of February, 2001.
Name Title
/s/ David R. Whitwam Director, Chairman of the Board and
- ------------------------- Chief Executive Officer
David R. Whitwam (Principal Executive Officer)
/s/ Jeff M. Fettig Director, President and
- ------------------------- Chief Operating Officer
Jeff M. Fettig (Principal Operating Officer)
/s/ Mark E. Brown Executive Vice President and
- ------------------------- Chief Financial Officer
Mark E. Brown (Principal Financial Officer)
/s/ Betty A. Beaty Vice President and Controller
- ------------------------- (Principal Accounting Officer)
Betty A. Beaty
<PAGE>
/s/ Herman Cain Director
- -------------------------
Herman Cain
/s/ Gary T. DiCamillo Director
- -------------------------
Gary T. DiCamillo
/s/ Allan D. Gilmour Director
- -------------------------
Allan D. Gilmour
/s/ Kathleen J. Hempel Director
- -------------------------
Kathleen J. Hempel
/s/ James M. Kilts Director
- -------------------------
James M. Kilts
/s/ Arnold G. Langbo Director
- -------------------------
Arnold G. Langbo
_________________________
Miles L. Marsh Director
_________________________
Philip L. Smith Director
/s/ Paul G. Stern Director
- -------------------------
Paul G. Stern
/s/ Janice D. Stoney Director
- -------------------------
Janice D. Stoney
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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