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, 2003
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
Financial Statements and Supplemental Schedule
Whirlpool 401(k) Plan
Years ended December 31, 2003 and 2002
with Report of Independent Registered Public Accounting Firm
EIN 38-1490038
Plan #001
Financial Statements and Supplemental Schedule
Years ended December 31, 2003 and 2002
Contents
| Page | ||
| 1 | ||
| Financial Statements |
||
| 2 | ||
| 3 | ||
| 4 | ||
| Supplemental Schedule |
||
| Schedule H, Line 4(i) – Schedule of Assets (Held at End of Year) |
10 | |
Report of Independent Registered Public Accounting Firm
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, 2003 and 2002, 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 the standards of the Public Company Accounting Oversight Board (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, 2003 and 2002, and the changes in its assets available for benefits for the years then ended, in conformity with U.S. generally accepted accounting principles.
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, 2003, 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.
| June 8, 2004 |
Ernst & Young LLP | |
| Chicago, IL |
1
EIN 38-1490038
Plan #001
Statements of Assets Available for Benefits
| December 31 | ||||||
| 2003 |
2002 | |||||
| Contributions receivable: |
||||||
| Employer |
$ | 14,207,693 | $ | 16,116,883 | ||
| Participant |
5,087,025 | 5,437,650 | ||||
| Investments at fair value: |
||||||
| Mutual funds |
454,208,282 | 343,991,944 | ||||
| Common and collective funds |
219,296,210 | 165,332,041 | ||||
| Common stock of Whirlpool Corporation |
104,476,286 | 93,228,227 | ||||
| Participant loans |
49,387,310 | 43,634,384 | ||||
| Total investments |
827,368,088 | 646,186,596 | ||||
| Assets available for benefits |
$ | 846,662,806 | $ | 667,741,129 | ||
See accompanying notes.
2
EIN 38-1490038
Plan #001
Statements of Changes in Assets Available for Benefits
| Year ended December 31 |
|||||||
| 2003 |
2002 |
||||||
| Additions |
|||||||
| Dividends on Whirlpool Corporation common stock |
$ | 2,372,671 | $ | 2,082,226 | |||
| Other dividend income |
4,324,864 | 4,281,428 | |||||
| Interest income |
10,704,330 | 10,246,891 | |||||
| 17,401,865 | 16,610,545 | ||||||
| Employer contributions |
14,208,662 | 16,116,883 | |||||
| Participant contributions |
56,424,348 | 55,783,306 | |||||
| Rollover contributions |
2,614,442 | 4,075,382 | |||||
| 73,247,452 | 75,975,571 | ||||||
| Total additions |
90,649,317 | 92,586,116 | |||||
| Deductions |
|||||||
| Benefit payments |
48,781,020 | 47,246,627 | |||||
| Administrative expenses |
265,814 | 247,935 | |||||
| Total deductions |
49,046,834 | 47,494,562 | |||||
| Net realized and unrealized appreciation (depreciation) in fair value of investments: |
|||||||
| Whirlpool Corporation common stock |
38,922,159 | (24,989,111 | ) | ||||
| Mutual funds |
89,723,886 | (90,626,266 | ) | ||||
| Common and collective funds |
8,673,149 | (7,635,174 | ) | ||||
| 137,319,194 | (123,250,551 | ) | |||||
| Net increase (decrease) |
178,921,677 | (78,158,997 | ) | ||||
| Assets available for benefits: |
|||||||
| Beginning of year |
667,741,129 | 745,900,126 | |||||
| End of year |
$ | 846,662,806 | $ | 667,741,129 | |||
See accompanying notes.
3
EIN 38-1490038
Plan #001
Notes to Financial Statements
Years ended December 31, 2003 and 2002
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% (15% for highly compensated employees), 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 $0.25 per dollar that eligible employees contribute
4
Whirlpool 401(k) Plan
Notes to Financial Statements (continued)
1. Description of Plan (continued)
to the Plan. The matching contribution was $0.43 per dollar of eligible employees’ contributions for 2003 and $0.50 for 2002, up to 5% of compensation. Employer matching contributions and tax-deferred contributions are 100% vested at all times. 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, 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.
5
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 ESOP Plan; 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 Whirlpool ESOP Plan or receive a cash payout. All dividends continue to be 100% vested.
6
Whirlpool 401(k) Plan
Notes to Financial Statements (continued)
2. Significant Accounting Policies (continued)
Investment Valuation
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 and shares owned by the Plan in the common and collective funds and mutual funds is based on quoted redemption or market values on the last business day of the Plan year. Participant loans are stated at their outstanding balances, which approximate 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, portfolio transaction fees, and investment management fees, are paid by Whirlpool.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States 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.
3. Investments
The fair value of individual investments that represent 5% or more of the Plan’s assets is as follows:
| December 31 | ||||||
| 2003 |
2002 | |||||
| Putnam Asset Allocation Balanced Fund |
$ | 49,329,378 | $ | 38,406,666 | ||
| Putnam New Opportunities Fund |
48,547,697 | 37,400,354 | ||||
| Putnam Voyager Fund |
121,456,128 | 105,457,585 | ||||
| Whirlpool Corporation common stock |
104,476,286 | 93,228,227 | ||||
| Putnam Stable Value Fund |
170,243,408 | 140,326,222 | ||||
| Neuberger & Berman Genesis Fund |
64,968,423 | 43,933,582 | ||||
7
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. Subsequent to this letter, the Plan was amended. 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, as amended, is qualified and the related trust is tax-exempt.
5. Risks and Uncertainties
The Plan invests in various investment securities. Investment securities are exposed to various risks such as interest rate, market, and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect participants’ account balances and the amounts reported in the statements of assets available for benefits.
6. Reconciliation of Financial Statements to Form 5500
The following is a reconciliation of assets available for benefits and benefits paid to participants per the financial statements to the Form 5500:
| December 31 |
||||||||
| 2003 |
2002 |
|||||||
| Assets available for benefits per the financial statements |
$ | 846,662,806 | $ | 667,741,129 | ||||
| Deemed distributions of participant loans |
(1,414,466 | ) | (88,981 | ) | ||||
| Assets available for benefits per the Form 5500 |
$ | 845,248,340 | $ | 667,652,148 | ||||
8
Whirlpool 401(k) Plan
Notes to Financial Statements (continued)
6. Reconciliation of Financial Statements to Form 5500 (continued)
| Year ended December 31 2003 |
||||
| Benefits paid to participants per the financial statements |
$ | 48,781,020 | ||
| Add: Deemed distributions of participant loans at December 31, 2003 |
1,414,466 | |||
| Less: Deemed distributions of participant loans at December 31, 2002 |
(88,981 | ) | ||
| Benefits paid to participants per the Form 5500 |
$ | 50,106,505 | ||
Deemed distributions of loans are recorded as distributions on the Form 5500 but are recorded as investments in the financial statements.
9
Supplemental Schedule
EIN 38-1490038
Plan #001
Schedule H, Line 4(i) – Schedule of Assets
(Held at End of Year)
December 31, 2003
| Description of Investment |
Number of Shares or Units |
Current Value | |||
| Mutual funds: |
|||||
| Lazard International Equity Fund |
125,353 | $ | 1,425,260 | ||
| Putnam* Discovery Growth Fund |
153,163 | 2,479,716 | |||
| Putnam* Growth Opportunities Fund |
205,882 | 2,676,469 | |||
| Putnam* Vista Fund |
411,173 | 3,400,403 | |||
| Alger Growth Retirement Portfolio |
381,936 | 4,300,598 | |||
| Alger Small-Cap Growth Retirement Portfolio |
353,021 | 5,489,477 | |||
| Federated Stock Fund |
212,291 | 7,275,208 | |||
| Putnam* Asset Allocation Conservative Fund |
849,645 | 7,502,363 | |||
| TCW Galileo Select Equity I/Concentrated |
443,335 | 7,567,725 | |||
| Putnam* International Voyager Fund |
434,523 | 8,221,178 | |||
| PIMCO High Yield Fund |
1,111,750 | 10,861,793 | |||
| Putnam* Asset Allocation Growth Fund |
1,283,293 | 12,986,928 | |||
| Putnam* Income Fund |
2,690,355 | 18,240,608 | |||
| Alger Mid-Cap Growth Retirement Portfolio |
1,427,393 | 21,810,569 | |||
| Vanguard Windsor II Fund – Admiral Class |
578,532 | 27,202,595 | |||
| EuroPacific Growth Fund |
942,263 | 28,465,766 | |||
| Putnam* New Opportunities Fund |
1,250,907 | 48,547,697 | |||
| Putnam* Asset Allocation Balanced Fund |
4,992,852 | 49,329,378 | |||
| Neuberger & Berman Genesis Fund |
1,754,481 | 64,968,423 | |||
| Putnam* Voyager Fund |
7,446,728 | 121,456,128 | |||
| 454,208,282 | |||||
| Common and collective funds: |
|||||
| Putnam* Stable Value Fund |
170,243,408 | 170,243,408 | |||
| Putnam* S&P 500 Index Fund |
1,411,273 | 39,205,173 | |||
| Putnam* Bond Index Fund |
729,454 | 9,847,629 | |||
| 219,296,210 | |||||
| Whirlpool Corporation* common stock |
1,438,077 | 104,476,286 | |||
| Participant loans |
Varying maturities and interest rate of 9% |
49,387,310 | |||
| Total investments |
$ | 827,368,088 | |||
| *Party | in interest. |
10
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 23, 2004 |
||||
| By: |
/s/ R. Stephen Barrett, Jr. | |||
| Name: |
R. Stephen Barrett, Jr. | |||
| Title: |
Executive Vice President and Chief Financial Officer | |||
EXHIBIT INDEX
TO
FORM 11-K FOR
WHIRLPOOL 401(k) PLAN
| Exhibit Number |
Description of Exhibit | |
| 23 | Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm, dated June 18, 2004 |