Whirlpool 2002 Annual Report Download

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Whirlpool Corporation
Building unmatched loyalty
one customer at a time.
2002 Annual Report >

Table of contents

  • Page 1
    2002 Annual Report > Whirlpool Corporation Building unmatched loyalty one customer at a time.

  • Page 2
    ... automatically shifts to "warm" mode and then back to "refrigeration" to keep and protect the food. Polara > customer Ida & Jamal Simington > location Bourbonnais, Illinois, USA > occupations Ida, Facilities Manager; Jamal, State Trooper Whirlpool Polara refrigerated range > refrigerated ranges...

  • Page 3
    ... customers the ability to make ice quickly and store it for long periods of time, a unique and welcome feature in hot climates. < Whirlpool frost-free refrigerator > customer Parag & Madhumita Mazumder > location New Delhi, India > occupations Parag, Sales Manager; Madhumita, Business Executive

  • Page 4
    ...as it fulfills the family's practical needs for an organized storage and work area. Its garage-tough construction and mobile modular > customer Rob & Diane Ahle > location Brookfield, Connecticut, USA > occupations Rob, Professional Chef; Diane, Sales Assistant Gladiator GarageWorks > units let...

  • Page 5
    ... brand. They are the vanguard." The Brastemp bottom freezer refrigerator offers a fast freezing function to ensure high quality food storage. The bottom freezer's large drawers and internal lighting make food access easy. The frost-free system provides efficient distribution of cold air, keeping...

  • Page 6
    ... to provide a fully functional sink. The briva in-sink dishwasher also includes a cutting board that fits > customer Tammy & Jeff McClintick > location Brownsburg, Indiana, USA > occupation Tammy, Homemaker; Jeff, Business Executive briva in-sink dishwasher > over the stainless steel cover.

  • Page 7
    ...Dreamspace clothes washer offers a capacity 60 percent larger than standard front-load washers. The Dreamspace washer reduces the number of laundry loads, and conserves water and energy. The Whirlpool 6th Sense sensor system distinguishes differing fabrics and adjusts the cycles for perfect cleaning...

  • Page 8
    ... the world's leading manufacturer and marketer of major home appliances, with annual sales of over $11 billion, 68,000 employees, and nearly 50 manufacturing and technology research centers around the globe. The company markets Whirlpool, KitchenAid, Brastemp, Bauknecht, Consul and other major brand...

  • Page 9
    ... continued growth of the Whirlpool brand - the No. 1 selling appliance brand in the world. Whirlpool Corporation is strongly positioned as the market leader in the United States, Canada, Latin America, Central Europe and India. The company also holds the No. 2 market position in Mexico, and the No...

  • Page 10
    ... on building customer loyalty will drive continued performance improvement in 2003 and beyond. $ 10.67 1.36 2.2% $ 21.44 1.36 2.4% $ (50.2)% High Low Close Total return to shareholders (five year annualized) Shares outstanding (in 000's) Number of stockholders Number of employees $ 79...

  • Page 11
    ... high-efficiency clothes washer and dryer pair was rolled out across the United States with consumer and trade partner response significantly outpacing capacity. The popular Duet pair emerged from Whirlpool's global product development process, and involved teams of employees representing technology...

  • Page 12
    ... in place. Air Purifiers, Automatic Dryers, Automatic Washers, Built-in Ovens, Countertop Appliances, Dehumidifiers, Dishwashers, Freezers, Hot Water Heaters, Ice Makers, Microwave Ovens, Ranges, Refrigerators, Room Air > KitchenAid stand mixer An American culinary icon, the KitchenAid stand mixer...

  • Page 13
    ... jetted sink gently cleans delicate garments and other hand-washables with specially designed water jets. C > The Whirlpool DryAire drying cabinet shaves hours off the air-drying process for heavy woolens and bulky garments, while gently drying delicates. D > The Whirlpool Duet washer and dryer...

  • Page 14
    ...and product development efforts. Automatic Dryers, Automatic Washers, Built-in Hobs, Built-in Ovens, Compressors, Dishwashers, Free-standing Cookers, Freezers, Microwave Ovens, Ranges, Refrigerators O P E R AT I O N S C E N T E R > Whirlpool and Bauknecht built-in ovens The newest line of built-in...

  • Page 15
    ...the company's products. Whirlpool, Brastemp, Consul, Embraco, Eslabón de Lujo P R I N C I PA L P R O D U C T S Refrigerators, Automatic Washers, Compressors, Dishwashers, Freezers, Microwave Ovens, Ranges, Room Air Conditioners, Countertop Appliances HEADQUARTERS São Paulo, Brazil; Buenos Aires...

  • Page 16
    ... makes ice quicker than ever before. A button on the refrigerators' exterior control panel activates the quick-ice system. Other Whirlpool brand introductions in 2002 included a line of MagiCool air conditioners, with their Quick Cool technology to chill rooms fast, and the MagiCook microwave ovens...

  • Page 17
    ... of Changes in Stockholders' Equity 46 Notes to Consolidated Financial Statements 70 Reports of Independent Auditors and Management 72 Eleven-Year Consolidated Statistical Review 74 Shareholders' and Other Information 75 Directors & Executive Committee 76 Senior Officers & Company Addresses...

  • Page 18
    ... sales resulting in improved operating profit for the region. The decline in 2001 versus 2000 was due to unfavorable product and channel mix, lower pension credits and increased warranty costs offsetting productivity improvements. 32 Management's Discussion and Analysis 2002 Annual Report 33

  • Page 19
    ... versus 2000 as cost controls implemented in North America and global restructuring benefits more than offset increased bad debt expense, increased stock compensation costs, new product introduction costs, restructuring related charges and lower pension credits. The table below outlines the selling...

  • Page 20
    ... under review, is confirmed by the Brazilian courts. At December 31, 2002, our defined benefit pension plans were underfunded on a combined basis. Poor equity market performance reduced the value of pension assets, while extremely low interest rates reduced the discount rate, which increased the...

  • Page 21
    ... future expense. Income Taxes The establishment of a liability for product recall expenses is occasionally required and is impacted by several factors, such as customer response rate, consumer options, field repair costs, inventory repair costs, extended warranty costs, communication structure, and...

  • Page 22
    ... market share in intensely competitive global markets; (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 Latin American...

  • Page 23
    ... Millions of dollars 2002 2001 ASSETS Current assets LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Cash and equivalents Trade receivables, less allowances (2002: $94; 2001: $93) Inventories Prepaid expenses and other Deferred income taxes Other current assets Total Current Assets Other...

  • Page 24
    ...companies, less dividends received Loss on disposition of assets Loss on discontinued operations Depreciation and amortization Changes in assets and liabilities, net of business acquisitions: Trade receivables Inventories Accounts payable Product recalls Restructuring charges, net of cash paid Taxes...

  • Page 25
    ... $254 million in 2002, 2001 and 2000, respectively. Advertising Costs Whirlpool Corporation is the world's leading manufacturer and marketer of major home appliances. The company manufactures in nine countries under nine major brand names and markets products to distributors and retailers in more...

  • Page 26
    ... Millions of dollars, except per share data 2002 2001 2000 Reported net earnings (loss) Goodwill amortization Adjusted net earnings (loss) Basic earnings per share $ $ (394) - (394) $ $ 21 27 48 $ $ 367 27 394 Compensation cost included in earnings as reported (net of tax benefits) Pro forma...

  • Page 27
    ... assets related to trademarks owned by Whirlpool Mexico. The Whirlpool Mexico opening balance sheet is summarized (in millions of dollars) as follows: ASSETS Current assets On June 5, 2002, the company acquired 95% of the shares of Polar S.A. (Polar), a leading major home appliance manufacturer...

  • Page 28
    ... recorded a $22 million after-tax impairment charge in the second quarter of 2002 related to its minority investments in and advances to a European business. The company acquired its initial investment in this entity with its purchase of the appliance operations of Philips Electronics N.V. in 1989...

  • Page 29
    ... of exchange related to the affiliate. The company also has guarantee arrangements in place in a Brazilian subsidiary. As a standard business practice in Brazil, the subsidiary guarantees customer lines of credit at commercial banks following its normal credit policies. In the event that a customer...

  • Page 30
    ... million shares that were purchased from one of the company's U.S. pension plans at a cost of $41 million, or $67.78 per share, which was based upon an average of the high and low market prices on the date of purchase. In addition to its common stock, the company has 10 million authorized shares of...

  • Page 31
    ... charges relate primarily to the closing of a refrigeration plant in the company's Latin American region, a parts packing facility and a cooking plant in the North American region, a plastic components facility in the Asian region, the relocation of several laundry manufacturing facilities in Europe...

  • Page 32
    ... operations are as follows: Year ended December 31 - Millions of dollars 2002 2001 2000 > 14 PRODUCT RECALLS In September 2001, the company announced a voluntary recall of 1.8 million microwave hood combination units sold under the Whirlpool, KitchenAid, and Sears Kenmore brands. The company...

  • Page 33
    ... other employees under the plan, based on the company's annual operating results and the level of individual participant's contributions, amounted to $16 million, $12 million and $12 million in 2002, 2001 and 2000, respectively. The company sponsors plans to provide selected health care benefits for...

  • Page 34
    ... as of January 1 Service cost Interest cost Plan participants' contributions Amendments Business combinations Actuarial (gain) loss Settlements Benefits paid Curtailments Special termination benefits Foreign currency exchange rate changes Benefit obligation as of December 31 Change in plan assets...

  • Page 35
    ... care cost trend rate would have the following effects: One Percentage Point Increase One Percentage Point Decrease Change in benefit obligation Benefit obligation as of January 1 Service cost Interest cost Amendments Actuarial loss Benefits paid Benefit obligation as of December 31 Change in plan...

  • Page 36
    ... of dollars, except per share data Dec. 31 Sept. 30 Jun. 30 Mar. 31 2002 2001 2000 $ 165 191 175 $ 103 87 94 $ 112 80 86 $ 15 10 10 $ 35 10 10 $ 430 378 375 2001 Net sales Cost of products sold Earnings (loss) from continuing operations Net earnings (loss) Per share of common stock...

  • Page 37
    ... 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 is composed of five independent directors who, in the opinion of the board, meet the...

  • Page 38
    ... and related charges, product recalls, discontinued operations and accounting changes in 2001, selected key ratios would be as follows: a) Operating profit margin - 7.9%, b) Pre-tax margin - 5.8%, c) Net margin - 3.6%, d) Return on average 5 6 7 8 9 10 11 stockholders' equity - 22%, e) Return on...

  • Page 39
    ... DIRECT STOCK PURCHASE PLAN COMMON-STOCK Market Price High Low Close Directors & Executive Committee DIRECTORS Herman Cain 2,3 Miles L. Marsh 2,4 EXECUTIVE COMMITTEE David R. Whitwam Whirlpool Corporation's annual report on Form 10-K, a cassette-tape recording of the annual report to shareholders...

  • Page 40
    ... Marise Fernandes Kumar Senior Vice President, North American Region Operations Roy V. Armes Emerging Brands and Categories, North America Karim Lalani 2000 N. M-63 Benton Harbor, MI 49022-2692 Telephone: 269.923.5000 Europe Region Whirlpool Mexico, North America Betty A. Beaty Sears Sales...

  • Page 41
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