With so many filings coming in at the same time — so far this week, 311 companies have filed 10-Ks and many of those reports, like the 639-page 10-K that AIG filed yesterday, are pretty hefty — that finding the proverbial needle in the haystack takes a considerable amount of patience (not to mention hefty doses of caffeine).
At just 88 pages, the 10-K that appliance maker Whirlpool (WHR) filed on Tuesday was considerably lighter. Yet there was an interesting addition to its section on risk factors that caught our attention. There in the risk factor that talked about “changes in economic conditions” — a standard risk factor for many companies — was this addition:
“higher deficit spending and debt levels…adversely affect demand”
Even though there’s plenty of headlines about the impending government spending crisis that’s only a week away, the addition to Whirlpool’s disclosure struck us as unusual. Being smack dab in that demographic that buys major appliances — I bought a new refrigerator and washing machine a few months ago — it’s hard to imagine a scenario where concern over the government’s level of debt would have impacted my decision. And my guess is that most consumers, when faced with the need (or perhaps just the desire) to buy a new dishwasher or other major appliance, wouldn’t focus on what is or isn’t happening in Washington, D.C. either.
As we say frequently, there are no accidents in SEC filings. Someone at Whirlpool chose to add this language to the filing this year. And politically tinged disclosures like this are very rare. In fact, we couldn’t find a single other example of a company mentioning deficit spending in this way. A quick glance at OpenSecrets shows that Whirlpool CEO Jeff Fettig contributed $2,500 to Mitt Romney’s campaign several weeks before the 2012 elections. But it’s a leap to say that Fettig would have insisted on the language about deficit spending being added to the 10-K.
With housing sales getting stronger, Whirlpool stock has been climbing ever-higher, rising 44% in the past six months. Presumably the folks in DC will figure out some sort of compromise, as they did six weeks ago, when the last “fiscal cliff” deadline was looming. In the meantime, we guess all of those people buying houses will continue to shop for new appliances, no matter what winds up happening.