CONFORMED COPY
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 (No Fee Required)
For the plan year ended December 31, 2002
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 (No Fee Required)
Commission file number 1-3932
Full title of plan: WHIRLPOOL 401(k) PLAN
Name of issuer of the securities held pursuant to the plan and the address
of its principal executive office:
WHIRLPOOL CORPORATION
Administration Center
2000 North M-63
Benton Harbor, MI 49022-2692
Reference is hereby made to the Financial Statements attached hereto which begin
on page F-1.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees of the Whirlpool 401(k) Plan have duly caused this annual report to be
signed on its behalf by the undersigned hereunto duly authorized.
WHIRLPOOL CORPORATION
Whirlpool 401(k) Plan
Date: June 17, 2003
By: /s/ R. Stephen Barrett
------------------------------------
Name: R. Stephen Barrett
Title: Executive Vice President and
Chief Financial Officer
Financial Statements and Supplemental Schedule
Whirlpool 401(k) Plan
Years ended December 31, 2002 and 2001
with Report of Independent Auditors
EIN 38-1490038
Plan #001
F-1
Whirlpool 401(k) Plan
Financial Statements and Supplemental Schedule
Years ended December 31, 2002 and 2001
CONTENTS
Report of Independent Auditors...............................................F-3
Financial Statements
Statements of Assets Available for Benefits..................................F-4
Statements of Changes in Assets Available for Benefits.......................F-5
Notes to Financial Statements................................................F-6
Supplemental Schedule
Schedule H, Line 4(i) - Schedule of Assets (Held at End of Year)............F-13
F-2
Report of Independent Auditors
The Trustees
Whirlpool 401(k) Plan
We have audited the accompanying statements of assets available for benefits of
the Whirlpool 401(k) Plan as of December 31, 2002 and 2001, and the related
statements of changes in assets available for benefits for the years then ended.
These financial statements are the responsibility of the Plan'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. 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.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the assets available for benefits of the Plan at December
31, 2002 and 2001, and the changes in its assets available for benefits for the
years then ended, in conformity with accounting principles generally accepted in
the United States.
Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedule of assets
(held at end of year) as of December 31, 2002, is presented for purposes of
additional analysis and is not a required part of the financial statements but
is supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. This supplemental schedule is the responsibility of the
Plan's management. The supplemental schedule has been subjected to the auditing
procedures applied in our audits of the financial statements and, in our
opinion, is fairly stated in all material respects in relation to the financial
statements taken as a whole.
/s/ Ernst & Young LLP
April 18, 2003 Ernst & Young LLP
Chicago, IL
F-3
EIN 38-1490038
Plan #001
Whirlpool 401(k) Plan
Statements of Assets Available for Benefits
DECEMBER 31
2002 2001
---------------------------------
Contributions receivable:
Employer $ 16,116,883 $ 15,756,559
Participant 5,437,650 5,144,356
Investments:
At fair value:
Mutual funds 343,991,944 416,061,684
Common and collective funds 165,332,041 155,777,425
Common stock of Whirlpool Corporation 93,228,227 103,001,058
Participant loans 43,634,384 41,169,351
At contract value:
Guaranteed investment contracts - 8,989,693
---------------------------------
Total investments 646,186,596 724,999,211
---------------------------------
Assets available for benefits $ 667,741,129 $ 745,900,126
=================================
See accompanying notes.
F-4
EIN 38-1490038
Plan #001
Whirlpool 401(k) Plan
Statements of Changes in Assets Available for Benefits
YEAR ENDED DECEMBER 31
2002 2001
----------------------------------
ADDITIONS
Dividends on Whirlpool Corporation common stock $ 2,082,226 $ 3,327,779
Other dividend income 4,281,428 12,337,712
Interest income 10,246,891 9,582,009
Other - 12,435
----------------------------------
16,610,545 25,259,935
Employer contributions 16,116,883 15,756,559
Participant contributions 55,783,306 56,157,139
Rollover contributions 4,075,382 7,363,903
----------------------------------
75,975,571 79,277,601
----------------------------------
Total additions 92,586,116 104,537,536
DEDUCTIONS
Benefit payments 47,246,627 83,293,841
Administrative expenses 247,935 223,605
----------------------------------
Total deductions 47,494,562 83,517,446
Net realized and unrealized appreciation (depreciation) in
fair value of investments:
Whirlpool Corporation common stock (24,989,111) 51,001,989
Mutual funds (90,626,266) (94,553,412)
Common and collective funds (7,635,174) (4,278,997)
----------------------------------
(123,250,551) (47,830,420)
----------------------------------
Net decrease (78,158,997) (26,810,330)
Assets available for benefits:
Beginning of year 745,900,126 772,710,456
----------------------------------
End of year $ 667,741,129 $ 745,900,126
==================================
See accompanying notes.
F-5
EIN 38-1490038
Plan #001
Whirlpool 401(k) Plan
Notes to Financial Statements
Years ended December 31, 2002 and 2001
1. DESCRIPTION OF PLAN
The Whirlpool 401(k) Plan (the Plan) is a defined-contribution plan sponsored by
Whirlpool Corporation and participating subsidiaries (referred to as Employer,
Plan Sponsor, or Whirlpool). The following description of the Plan provides only
general information. Participants should refer to the Whirlpool 401(k) Plan
Summary Plan Description for a more complete description of the Plan's
provisions.
ELIGIBILITY
Essentially all U.S.-based full-time and part-time employees of Whirlpool are
eligible to participate upon employment. Participation in the Plan is voluntary.
The Plan allows each participant to make tax-deferred contributions to the Plan,
by payroll deduction, each payroll period, in any whole percentage of eligible
earnings up to 50% (20% prior to January 1, 2002), but not to exceed the maximum
allowable annual contribution, as determined by the Internal Revenue Code (IRC).
Effective May 1, 2002, participants who have attained age 50 by the end of the
Plan year are eligible to make catch-up contributions subject to the limitations
of Section 414(v) of the IRC. Such elections are made and can be adjusted on a
daily basis by giving notice to the custodian via the voice response system, to
be effective, in most cases, as of the beginning of the next payroll period. In
addition, certain employees may make additional tax-deferred contributions to
the Plan by directing a portion of any annual bonus due to the participant, of
one or more designated bonus plans, be deposited into the Plan. The amount of
any such additional tax-deferred contributions may be elected by the employee to
equal the same percentage of any annual bonus payment as is applied for payroll
deduction purposes or in any whole percentage between 0% and 75%, as the
participant elects, provided, however, that the deduction percentage applicable
to a participant who is a highly compensated participant may not exceed 15%.
CONTRIBUTIONS AND VESTING
Each year the Employer establishes performance goals. Performance is measured in
terms of annual balanced scorecard measures as determined by the Whirlpool Board
of Directors. The attainment of these goals results in an Employer matching
contribution based on the tax-deferred contributions of each employee that do
not exceed 5% of the employee's eligible earnings. Regardless of performance,
the Employer will make a guaranteed matching contribution of $.25 per dollar
that eligible employees contribute to
F-6
Whirlpool 401(k) Plan
Notes to Financial Statements (continued)
1. DESCRIPTION OF PLAN (continued)
the Plan. The matching contribution was $.50 per dollar of eligible employees'
contributions for both 2002 and 2001, up to 5% of compensation. Employer
matching contributions and tax-deferred contributions are 100% vested at all
times. Exempt employees, with the exception of certain Whirlpool officers,
became eligible for employer matching contributions as of January 1, 2000.
Participants who terminate employment during the year are not eligible for
Employer matching contributions unless the termination is due to the
participant's retirement, death, disability, or a reduction in work force.
Participants may direct employee contributions to one or a combination of
several fund alternatives offered by the Plan. Employer matching contributions
are initially invested in the Whirlpool ESOP Plan (formerly the Whirlpool Stock
Fund), but may subsequently be transferred to another investment fund in
accordance with provisions of the Plan.
BENEFIT PAYMENTS
On termination of service, a participant with an account balance of $5,000 or
less will receive a single lump-sum distribution equal to the value of his or
her account. Participants with account balances exceeding $5,000 can elect to
receive a lump-sum distribution or may elect a monthly installment option.
Monthly installments are paid over a period of time not to exceed 9 years and 11
months.
PARTICIPANT ACCOUNTS
Deposits and withdrawals from each investment fund and transfers among
investment funds are made at the direction of the participants. The Employer is
responsible for determining that such transactions are in accordance with the
Plan.
Income, including market value adjustments, under each of these funds is
allocated to the participants' accounts daily based on each participant's equity
in the fund.
The benefit to which a participant is entitled is the benefit that can be
provided from the participant's account.
Plan investments are made in the manner specified in the trust agreement and in
accordance with the stated investment policies of the respective funds. To the
extent monies available for investment are not immediately invested, as provided
in the investment policy of each fund, such monies are temporarily invested in
short-term income investments. All investments are made in light of a continuing
evaluation of economic and market conditions that may cause such investment
policy to vary from time to time.
F-7
Whirlpool 401(k) Plan
Notes to Financial Statements (continued)
1. DESCRIPTION OF PLAN (continued)
LOANS
The Plan provides for loans to participants in amounts up to the lesser of
$50,000 or 50% of a participant's account balance, with a minimum loan amount of
$500. Such loans are allocated to a separate loan account and treated for
investment purposes as an investment of the account of the participant who
received the loan.
PLAN TERMINATION
Although the Employer has not expressed any intent to terminate the Plan, it is
free to do so at any time subject to the provisions of the IRC and the Employee
Retirement Income Security Act of 1974.
2. SIGNIFICANT ACCOUNTING POLICIES
INVESTMENTS HELD BY THE TRUST
All the investments of the Plan are held by the trust. The custodian invests all
assets of the trust except as follows: (i) the trustees direct the investment of
the Whirlpool Stock Fund; and (ii) the trustees may direct that a specified
percentage of the assets credited to any or all of the investment fund or funds
be allocated to one or more separate accounts within said investment fund and
invested in accordance with the direction of the trustees or an investment
manager designated by the trustees.
Contributions, loan distributions and repayments, and benefit payments are
specifically identified to the fund or funds within the trust to which assets of
the Plan are credited. Investment income and related expenses of the trust are
allocated to the investment funds based on each investment fund's proportionate
share of the current value of the trust assets daily.
Effective February 22, 2002, the Whirlpool Stock Fund was converted to an
Employee Stock Ownership Plan and renamed the Whirlpool ESOP Plan. On a
quarterly basis, participants have the option to reinvest dividends in
additional shares of Whirlpool stock in the Plan or receive a cash payout. All
dividends continue to be 100% vested.
F-8
Whirlpool 401(k) Plan
Notes to Financial Statements (continued)
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
INVESTMENT VALUATION
The Plan's guaranteed investment contracts are stated at contract value as
reported by the insurance companies. Contract value represents contributions
made under the contract, plus interest at the contract rate, less the insurance
companies' administrative expenses. Whirlpool common stock is valued at the last
reported sales price on a national securities exchange on the last business day
of the Plan year. The fair value of the participation units owned by the Plan in
the common and collective funds and mutual funds is based on quoted redemption
values on the last business day of the Plan year. Participant loans are stated
at outstanding balance, which approximates fair value.
Purchases and sales of securities are recorded on a trade-date basis. Interest
income is recorded on the accrual basis. Dividends are recorded on the
ex-dividend date.
ADMINISTRATIVE EXPENSES
In general, Plan expenses, except for broker commissions and portfolio
transaction fees, are paid by Whirlpool.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires the trustees to make estimates and assumptions
that affect the amounts reported in the financial statements and accompanying
notes. Actual results could differ from those estimates.
F-9
Whirlpool 401(k) Plan
Notes to Financial Statements (continued)
3. INVESTMENTS
A summary of the guaranteed investment contracts held at December 31, 2001, is
as follows:
CREDITING 2001
INTEREST AVERAGE FAIR
RATE YIELD VALUE
-----------------------------------------
Metropolitan Life Insurance Co., #GAC-24896 6.05% 5.94% $ 1,221,259
Peoples Security Life Insurance Co., #BDA-00720-FR 5.07 4.76 705,310
New York Life Insurance Company, #GA-30679 5.16 4.90 1,163,135
New York Life Insurance Company, #GA-30745 5.40 5.23 3,772,406
Principal Life Insurance Company, #GA-4-30429 6.26 6.97 2,127,583
------------
$ 8,989,693
============
All guaranteed investment contracts have crediting interest rates that are fixed
over the lives of the contracts. No guaranteed investment contracts were held at
December 31, 2002.
The fair value of individual investments that represent 5% or more of the Plan's
assets is as follows:
DECEMBER 31
2002 2001
---------------------------------
Putnam Asset Allocation Balanced Portfolio $ 38,406,666 $ 43,985,838
Putnam New Opportunities Fund 37,400,354 57,961,805
Putnam Voyager Fund 105,457,585 157,152,848
Whirlpool Corporation common stock 93,228,227 103,001,058
Putnam Stable Value Fund 140,326,222 122,709,332
Neuberger & Berman Genesis Trust 43,933,582 *
*Below 5% threshold.
F-10
Whirlpool 401(k) Plan
Notes to Financial Statements (continued)
4. INCOME TAX STATUS
The Plan has received a determination letter from the Internal Revenue Service
dated May 1, 2002, stating that the Plan is qualified under section 401(a) of
the IRC and that the related trust is exempt from taxation. Once qualified, the
Plan is required to operate in conformity with the IRC to maintain its
qualification. The plan administrator believes that the Plan is being operated
in compliance with the applicable requirements of the IRC and, therefore,
believes that the Plan is qualified and the related trust is tax-exempt.
F-11
Supplemental Schedule
F-12
EIN 38-1490038
Plan #001
Whirlpool 401(k) Plan
Schedule H, Line 4(i) - Schedule of Assets
(Held at End of Year)
December 31, 2002
NUMBER OF
SHARES CURRENT
DESCRIPTION OF INVESTMENT OR UNITS VALUE
-------------------------------------------------------------------------------
Mutual funds:
Lazard International Equity Fund 64,521 $ 572,949
Alger Small-Cap Growth Retirement Portfolio 121,603 1,332,772
TCW Galileo Select Equity I/Concentrated Core 132,574 1,511,349
Putnam * Growth Opportunities Fund 166,640 1,749,716
Putnam* Voyager II Fund 145,002 1,767,577
TCW Galileo Small-Cap Growth Fund 220,401 2,173,150
Putnam* Vista Fund 351,394 2,175,133
Alger Growth Retirement Portfolio 275,762 2,310,885
PIMCO High Yield Fund 308,555 2,628,890
Federated Stock Fund 158,142 4,298,295
Putnam* International Voyager Fund 364,462 5,062,377
Putnam* Asset Allocation Conservative Fund 905,942 7,193,179
Alger Mid-Cap Growth Retirement Portfolio 809,920 8,496,065
Putnam* Asset Allocation Growth Fund 1,151,248 9,175,447
Putnam* Bond Index Fund 872,823 11,390,341
Putnam* Income Fund 2,567,103 17,250,934
Vanguard Windsor II Fund - Admiral Class 535,072 19,754,869
EuroPacific Growth Fund 868,517 19,949,829
Putnam* New Opportunities Fund 1,281,712 37,400,354
Putnam* Asset Allocation Balanced Fund 4,588,610 38,406,666
Neuberger & Berman Genesis Trust 1,561,250 43,933,582
Putnam* Voyager Fund 8,081,041 105,457,585
---------------
343,991,944
F-13
EIN 38-1490038
Plan #001
Whirlpool 401(k) Plan
Schedule H, Line 4(i) - Schedule of Assets
(Held at End of Year) (continued)
December 31, 2002
NUMBER OF
SHARES CURRENT
DESCRIPTION OF INVESTMENT OR UNITS VALUE
--------------------------------------------------------------------------------
Common and collective funds:
Putnam* Stable Value Fund 140,326,222 $ 140,326,222
Putnam* S&P 500 Index Fund 1,155,537 25,005,819
----------------
165,332,041
Whirlpool Corporation* common stock 1,785,297 93,228,227
Participant loans Varying maturities
and interest rate
of 9%
43,634,384
----------------
Total investments $ 646,186,596
================
*Party in interest.
F-14
Exhibit Index
Sequential
Exhibit No. Document Page Number
----------- ---------------------------------------------------- -----------
23 Consent of Ernst & Young 19
99.1 Section 906 Certification of Chief Executive Officer 20
99.2 Section 906 Certification of Chief Financial Officer 21