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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)
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)
Registrant's telephone number, including area code (616) 923-5000
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
------------------- -----------------------------------------
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
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:
Part of Form 10-K
into which
Document incorporated
-------- -----------------
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
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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:
Year ended December 31 (millions of Percent in
dollars) 2000 2000 1999 1998
----------------------------------- ---------- ------- ------- -------
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
==== ======= ======= =======
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
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
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
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
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
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:
First Became
Name Office an Officer Age
---- ------ ------------ ---
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
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
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
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.
Signature Title Date
--------- ----- ----
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
8
Signature Title Date
--------- ----- ----
Janice D. Stoney* Director March 16, 2001
____________________________________
Janice D. Stoney
/s/ Daniel F. Hopp
*By: _______________________________
Daniel F. Hopp
Attorney-in-Fact
9
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):
Page
----
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
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
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
[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
[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
[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
[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
[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
[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
SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS
WHIRLPOOL CORPORATION AND SUBSIDIARIES
Years Ended December 31, 2000, 1999, and 1998
(millions of dollars)
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
----------- -------------------- ----------------- ----------------- ------------ --------------
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
==== ==== === ====
----
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
EXHIBIT 12
RATIO OF EARNINGS TO FIXED CHARGES
WHIRLPOOL CORPORATION AND SUBSIDIARIES
December
31,
---------
2000 1999
---- ----
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
==== ====
F-10
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)."
Number and Description of Exhibit
---------------------------------
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]
E-1
Number and Description of Exhibit
---------------------------------
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
E-2
Number and Description of Exhibit
---------------------------------
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
E-3