Herbert V. Kohler, Jr., et al. - Page 9

                                         -9-                                          
          market price to provide a return.  Dividends were therefore                 
          important to shareholders, and Kohler recognized that.                      
          The Plans                                                                   
               Kohler generally used two types of projections to plan for             
          its business.  These projections were called the management plan            
          and the operations plan, and each had different uses.  The                  
          management plan was a set of achievable targets and reflected the           
          realities of the business and management’s best judgment of where           
          the company would be.  The management plan was given to outsiders           
          intending to transact with Kohler, such as insurance companies              
          and banks.  Kohler also used the management plan internally for             
          capital planning, acquisition planning, and tax planning.                   
          Management intended the management plan to be a good predictor of           
          the company’s performance and updated the management plan                   
          throughout the year to reflect Kohler’s actual results.                     
               Kohler also developed an operations plan, which was a                  
          projection of what could theoretically be achieved in a perfect             
          environment.  The operations plan was built on the assumptions              
          that each business unit would maximize its results and no                   
          contingencies or unforeseen events would occur.  The operations             
          plan was not generally updated throughout the year to incorporate           
          new information or unforeseen events.                                       
               The management plan projected earnings for 1999 to be below            
          those for 1998 and 1997, reflecting the difficulties in the                 






Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  Next

Last modified: May 25, 2011