Whirlpool 2009 Annual Report Download - page 97

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Pension and Postretirement Benefit Plans
Defined Benefit Plans
On August 28, 2009, we announced the closure of our manufacturing facility in Evansville, Indiana in mid-
2010. The announcement triggered a curtailment in our pension plan for Evansville hourly employees,
resulting in a one-time curtailment loss of $6.6 million included in net periodic cost with an offset to other
comprehensive income, net of tax. During 2009, we recorded the entire loss in our Consolidated Statement
of Income as a component of cost of products sold. The closure of the Evansville facility also triggered a
curtailment in our U.S. retiree healthcare plan, resulting in a curtailment gain. The curtailment gain will be
recognized in our Consolidated Statement of Income as a component of cost of products sold as the
employees terminate, which is expected to occur in 2010.
On June 16, 2009, the Board of Directors authorized the option for the company to use up to $100 million
of company stock to fund the U.S. pension plans. If we elect to partially fund the U.S. pension plans in com-
pany stock, contributions may be made on a periodic basis from treasury stock, or, with the prior approval
of the Finance Committee of the Board of Directors, from authorized, but unissued shares. As of December
31, 2009, we have not used company stock to fund our U.S. pension plans.
On February 9, 2009, we announced the indefinite suspension of the annual credit to retirement health
savings accounts for the majority of active participants. The result of the suspension was a curtailment
gain of $89 million.
On August 1, 2008, we amended certain retiree medical benefits associated with our Newton, Iowa manu-
facturing facility to be consistent with those benefits provided by the Whirlpool Corporation Group Benefit
Plan. This amendment resulted in a reduction in the postretirement benefit obligation of $229 million with
a corresponding increase to other comprehensive income, net of tax, within equity of our Consolidated
Balance Sheet at December 31, 2009.
401(k) Defined Contribution Plan
During the March 2009 quarter we announced an indefinite suspension of company matching contribu-
tions to our 401(k) defined contribution plan covering substantially all U.S. employees. We also announced
that our automatic company contributions equal to 3% of employees’ eligible pay will be contributed
in company stock. During the December 2009 quarter we announced the reinstatement of company
matching contributions to our 401(k) defined contribution plan, covering substantially all U.S. employees,
effective March 2010.
Share Repurchase Program
In June 2004, our Board of Directors authorized a share repurchase program of up to $500 million. During
2007, we repurchased 3.8 million shares at an aggregate purchase price of $368 million and during
the three months ended March 31, 2008, we repurchased 1.1 million shares at an aggregate purchase
price of $97 million under this program. At March 31, 2008, there were no remaining funds authorized
under this program.
On April 23, 2008, our Board of Directors authorized a new share repurchase program of up to $500
million. Share repurchases are made from time to time on the open market as conditions warrant. During
2008, we repurchased 1.9 million shares at an aggregate purchase price of $150 million under this program.
There were no repurchases during 2009. At December 31, 2009, there were $350 million of remaining funds
authorized under this program.
Sources and Uses of Cash
We expect to meet our cash needs for 2010 from cash flows from continuing operations, cash and
equivalents and financing arrangements. Our cash and equivalents were $1.4 billion at December 31, 2009
compared to $146 million at December 31, 2008.
Cash Flows from Operating Activities of Continuing Operations
Cash provided by continuing operating activities in 2009 was $1,550 million, an increase of $1,223 million
compared to 2008. Cash provided by continuing operations reflects lower payments for inventory, lower
cash payments for accounts payable and other operating accruals and lower employee compensation pay-
ments, partially offset by lower collections of accounts receivable. Cash provided by continuing operating
activities in 2008 was $327 million, a decrease of $600 million compared to the year ended December 31,
2007. Cash provided by continuing operations for 2008 reflects lower cash earnings primarily from our
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