Whirlpool Corporation
Apr 26, 2010

Whirlpool Corporation Reports First-Quarter 2010 Results

BENTON HARBOR, Mich., April 26, 2010 /PRNewswire via COMTEX/ --Whirlpool Corporation (NYSE: WHR) announced today that first-quarter net earnings rose 141 percent to $164 million, or $2.13 per diluted share, compared to $68 million, or $0.91 per diluted share reported during the same period last year. Sales of $4.3 billion increased 20 percent from the $3.6 billion reported in the first quarter of 2009. Excluding the impact of foreign exchange translation, the company's first-quarter sales increased approximately 11 percent.

First-quarter operating profit totaled $241 million compared with $166 million in the prior year. Results were favorably impacted by cost reduction and productivity initiatives, increased sales volume and favorable foreign currency effects. These favorable factors were partially offset by lower price/mix. First-quarter adjusted operating profit(1) totaled $287 million compared to $126 million in the prior year.

"We are pleased with the strong operational performance we reported in all of our regions," said Jeff M. Fettig, chairman and chief executive officer of Whirlpool Corporation. "In addition, we are encouraged with the 18 percent increase in our global unit volumes during the quarter. Our results reflect our lower breakeven point, continued innovation investment, and our expanding global product offerings. By continuing to drive productivity improvements and leveraging our lower breakeven point, we are able to expand our operating margins and accelerate profitable growth."

The company reported cash flow from operations of $71 million for the first quarter. Whirlpool Corporation generated free cash flow(2) of $(74) million during the first quarter compared with $(371) million in the prior year.

FIRST-QUARTER REGIONAL REVIEW

Whirlpool North America

First-quarter sales of $2.3 billion increased 7 percent from the prior year. Excluding the impact of foreign exchange translation, first-quarter sales increased approximately 5 percent. North America unit shipments increased 11 percent. U.S. industry unit shipments of major appliances (T7)(3) increased 6 percent during the first quarter.

The North America region reported operating profit of $94 million compared to $164 million in the previous year. First-quarter 2010 results included an expense of $46 million related to special items compared to a benefit of $64 million in the prior year. Special items are described in the attached supplemental information. First-quarter 2010 adjusted operating profit for the North America region totaled $140 million compared to $100 million in the prior year. The improvement was primarily the result of cost reduction, productivity initiatives and increased sales volume. These factors were partially offset by lower year-over-year product price/mix.

Based on the current economic outlook, the company expects full-year 2010 U.S. industry unit shipments to increase between 3 percent and 5 percent compared to the previous outlook of a 2 percent to 4 percent increase.

Whirlpool Europe

Whirlpool Europe reported first-quarter sales of $739 million, a 6 percent increase from the prior year. Excluding the effects of currency, sales decreased approximately 2 percent. Overall industry unit demand during the quarter was equal to the prior year.

The region reported an operating profit of $27 million during the first quarter compared with the breakeven results reported in the previous-year period. Results were favorably impacted by cost reduction and productivity initiatives.

The company expects full-year 2010 industry unit shipments to be approximately equal to 2009 levels.

Whirlpool Latin America

Whirlpool Latin America reported record first-quarter net sales of $1.1 billion, an increase of 65 percent from the prior year. Excluding currency translation, sales increased approximately 40 percent.

Operating profit totaled $167 million in the first quarter compared with $57 million in the prior year. The improvement in profitability is primarily related to higher sales volumes, higher productivity and favorable foreign currency. These items were partially offset by lower price/mix. During the first quarter of 2009, the region recorded a $26 million expense related to an operating tax settlement which did not recur during 2010.

The company currently anticipates full-year 2010 Brazilian appliance shipments will increase approximately 10 percent compared to the previous outlook of a 5 percent to 10 percent increase.

Whirlpool Asia

Whirlpool Asia reported first-quarter sales of $192 million, increasing 60 percent from the prior year. Excluding the impact of currency, sales increased 49 percent. Operating profit during the quarter totaled $11 million, an increase of $6 million from the prior year. The year-over-year increase in operating profit was mainly attributable to higher unit volume and was partially offset by lower price/mix.

The company anticipates full-year 2010 industry unit shipments in Asia to be up 5 percent to 8 percent compared to the previous expectation of a 3 percent to 5 percent increase compared to 2009 levels.

Outlook

For the full-year 2010, Whirlpool Corporation expects earnings per diluted share between $8.00 and $8.50 compared to its previous outlook of $6.50 to $7.00. For the full year, the company expects to generate free cash flow(2) of approximately $500 million to $600 million. This compares to the previous outlook of between $400 million and $500 million. The company's earnings and free cash flow projections are based upon current economic forecasts and business plans.

"We are increasing our outlook to reflect our strong first-quarter results and our ongoing productivity initiatives," said Fettig. "While economic uncertainty remains, Whirlpool Corporation is well positioned to substantially grow earnings from prior-year levels. Our innovation pipeline is strong and we continue to make the appropriate investments in our global brand offerings to drive growth across the company. This enables us to meet the needs of more people, nearly everywhere in the world, in more ways than ever before."

(1) A reconciliation of adjusted operating profit, a non-GAAP financial measure, to reported operating profit and other important information, appears below.

(2) A reconciliation of free cash flow, a non-GAAP financial measure, to cash provided by operating activities and other important information, appears below.

(3) T7 refers to the following household appliance categories: washers, dryers, refrigerators, freezers, dishwashers, ranges and compactors.

FIRST-QUARTER 2010 PRODUCT LAUNCHES

FIRST-QUARTER 2010 AWARDS AND ACCOMPLISHMENTS

About Whirlpool Corporation

Whirlpool Corporation is the world's leading manufacturer and marketer of major home appliances, with annual sales of approximately $17 billion in 2009, 67,000 employees, and 67 manufacturing and technology research centers around the world. The company markets Whirlpool, Maytag, KitchenAid, Jenn-Air, Amana, Brastemp, Consul, Bauknecht and other major brand names to consumers in nearly every country around the world. Additional information about the company can be found at http://www.whirlpoolcorp.com/.

Whirlpool Additional Information:

This document contains forward-looking statements about Whirlpool Corporation and its consolidated subsidiaries ("Whirlpool") that speak only as of this date. Whirlpool disclaims any obligation to update these statements. Forward-looking statements in this document may include, but are not limited to, statements regarding expected earnings per share, cash flow, productivity and material and oil-related prices. Many risks, contingencies and uncertainties could cause actual results to differ materially from Whirlpool's forward-looking statements. Among these factors are: (1) changes in economic conditions which affect demand for our products, including the strength of the building industry and the level of interest rates; (2) the effects of the global economic crisis on our customers, suppliers and the availability of credit; (3) Whirlpool's ability to continue its relationship with significant trade customers, and the ability of these trade customers to maintain or increase market share; (4) intense competition in the home appliance industry reflecting the impact of both new and established global competitors, including Asian and European manufacturers; (5) the ability of Whirlpool to manage foreign currency fluctuations; (6) product liability and product recall costs; (7) litigation and legal compliance risks; (8) the ability of Whirlpool to achieve its business plans, productivity improvements, cost control, leveraging of its global operating platform, and acceleration of the rate of innovation; (9) inventory and other asset risk; (10) fluctuations in the cost of key materials (including steel, oil, plastic, resins, copper and aluminum) and components and the ability of Whirlpool to offset cost increases; (11) the ability of suppliers of critical parts, components and manufacturing equipment to deliver sufficient quantities to Whirlpool in a timely and cost-effective manner; (12) health care cost trends, regulatory changes and variations between results and estimates that could increase future funding obligations for pension and other postretirement benefit plans; (13) Whirlpool's ability to obtain and protect intellectual property rights; (14) information technology system failures and data security breaches (15) global, political and/or economic uncertainty and disruptions, especially in Whirlpool's significant geographic regions, including uncertainty and disruptions arising from natural disasters or terrorist attacks; (16) the effects of governmental investigations or related actions by third parties; (17) the impact of labor relations; (18) our ability to attract, develop and retain executives and other qualified employees; (19) changes in the legal and regulatory environment, including environmental and health and safety regulations. Additional information concerning these and other factors can be found in Whirlpool Corporation's filings with the Securities and Exchange Commission, including the most recent annual report on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K.

                           WHIRLPOOL CORPORATION
          CONSOLIDATED CONDENSED STATEMENTS OF INCOME (UNAUDITED)
                        THREE MONTHS ENDED MARCH 31
               (Millions of dollars, except per share data)


                                                             2010    2009
                                                             ----    ----
    Net sales                                              $4,272  $3,569
    Expenses
    Cost of products sold                                   3,633   3,045
    Selling, general and administrative
     (exclusive of intangible amortization)                   371     327
    Intangible amortization                                     7       7
    Restructuring costs                                        20      24
                                                              ---     ---

    Operating profit                                          241     166

    Other income (expense)
    Interest and sundry income (expense)                      (12)    (47)
    Interest expense                                          (58)    (62)
                                                              ---     ---

              Earnings before income taxes and other items    171      57
    Income tax benefit                                         (3)    (16)
                                                              ---     ---

    Net earnings                                              174      73
              Less: Net earnings available to
               noncontrolling interests                       (10)     (5)
                                                              ---     ---

    Net earnings available to Whirlpool common
     stockholders                                            $164     $68
                                                             ====     ===

    Per share of common stock
    Basic net earnings available to Whirlpool
     common stockholders                                    $2.17   $0.92
                                                            =====   =====

    Diluted net earnings available to Whirlpool
     common stockholders                                    $2.13   $0.91
                                                            =====   =====

    Dividends                                               $0.43   $0.43
                                                            =====   =====

    Weighted-average shares outstanding (in
     millions)
    Basic                                                    75.4    74.2
    Diluted                                                  76.8    74.7


                             WHIRLPOOL CORPORATION
                     CONSOLIDATED CONDENSED BALANCE SHEETS
                    (Millions of dollars, except share data)


                                            (Unaudited)
                                                                
                                                March 31,      December 31,
                                                   2010           2009
                                                   ----           ----
    Assets

    Current assets
         Cash and equivalents                    $1,191         $1,380
         Accounts receivable, net of
          allowance for uncollectible
          accounts of $71 and $76 at March
          31, 2010 and December 31, 2009,
          respectively                            2,440          2,500
         Inventories                              2,437          2,197
         Deferred income taxes                      331            295
         Other current assets                       641            653
                                                    ---            ---
              Total current assets                7,040          7,025
                                                  -----          -----

    Other assets
    Goodwill                                      1,731          1,729
         Other intangibles, net of
          accumulated amortization of $139
          and $132 at March 31, 2010 and
          December 31, 2009, respectively         1,786          1,796
         Other assets                             1,442          1,427
                                                  -----          -----
              Total other assets                  4,959          4,952
                                                  -----          -----

    Property, plant and equipment
         Land                                        75             77
         Buildings                                1,197          1,207
         Machinery and equipment                  8,129          8,193
         Accumulated depreciation                (6,322)        (6,360)
                                                 ------         ------
              Total property, plant and
               equipment, net                     3,079          3,117
                                                  -----          -----
    Total assets                                $15,078        $15,094
                                                =======        =======

    Liabilities and stockholders'
     equity

    Current liabilities
         Accounts payable                        $3,323         $3,308
         Accrued expenses                           638            632
         Accrued advertising and
          promotions                                306            475
         Employee compensation                      569            501
         Notes payable                               17             23
         Current maturities of long-term
          debt                                      334            378
         Other current liabilities                  699            624
                                                    ---            ---
              Total current liabilities           5,886          5,941
                                                  -----          -----

    Noncurrent liabilities
         Long-term debt                           2,498          2,502
         Pension benefits                         1,547          1,557
         Postretirement benefits                    708            693
         Other liabilities                          648            641
                                                    ---            ---
              Total noncurrent liabilities        5,401          5,393
                                                  -----          -----

    Commitments and contingencies

    Stockholders' equity
         Common stock, $1 par value, 250
          million shares authorized, 105
          million shares issued at March
          31, 2010 and December 31, 2009,
          75 million shares outstanding at
          March 31, 2010 and December 31,
          2009                                   105       105
         Additional paid-in capital               2,074          2,067
         Retained earnings                        4,324          4,193
         Accumulated other comprehensive
          income (loss)                            (980)          (868)
         Treasury stock, 30 million shares
          at March 31, 2010 and December
          31, 2009                               (1,828)        (1,833)
                                                                ------
              Total Whirlpool stockholders'
               equity                             3,695          3,664
                                                  -----          -----
         Noncontrolling interests                    96             96
                                                    ---            ---
              Total stockholders' equity          3,791          3,760
                                                  -----          -----
    Total liabilities and
     stockholders' equity                       $15,078        $15,094
                                                =======        =======


                              WHIRLPOOL CORPORATION
           CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
                           THREE MONTHS ENDED MARCH 31
                              (Millions of dollars)


                                                              2010  2009
                                                              ----  ----
    Operating activities
    Net earnings                                              $174   $73
    Adjustments to reconcile net earnings to cash provided
     by (used in) operating activities:
    Depreciation and amortization                              134   115
    Curtailment gain                                           (29)  (92)
    Decrease in LIFO inventory reserve                          (5)    -
    Changes in assets and liabilities:
      Accounts receivable                                       24   114
      Inventories                                             (271)  (27)
      Accounts payable                                          66  (362)
      Restructuring charges, net of cash paid                   (5)  (16)
      Taxes deferred and payable, net                           (7)  (12)
      Accrued pension                                           (3)   (7)
      Employee compensation                                     85    62
      Other                                                    (92) (120)
                                                                    ----
        Cash provided by (used in) operating activities         71  (272)
                                                               ---  ----

    Investing activities
    Capital expenditures                                      (146) (112)
    Proceeds from sale of assets                                 1    13
    Investment in related businesses                            (5)    -
        Cash used in investing activities                     (150)  (99)
                                                              ----   ---

    Financing activities
    Repayments of long-term debt                               (46)   (1)
    Dividends paid                                             (33)  (32)
    Purchase of noncontrolling interest shares                 (12)    -
    Common stock issued                                          7     -
    Net (repayments) proceeds from short-term borrowings        (6)  458
    Other                                                        -    (5)
                                                                     ---
        Cash (used in) provided by financing activities        (90)  420
                                                               ---   ---

    Effect of exchange rate changes on cash and equivalents    (20)   (2)
                                                               ---   ---

    (Decrease) increase in cash and equivalents               (189)   47
    Cash and equivalents at beginning of period              1,380   146
                                                               ---   ---
    Cash and equivalents at end of period                   $1,191  $193
                                                            ======  ====


SUPPLEMENTAL INFORMATION - CONSOLIDATED CONDENSED STATEMENTS OF INCOME RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(Millions of dollars except per share data)

(Unaudited)

We supplement the reporting of our financial information determined under U.S. generally accepted accounting principles (GAAP) with certain non-GAAP financial measures, including adjusted operating profit, adjusted earnings before income taxes and other items (hereafter referred to as "adjusted earnings before tax"), adjusted diluted earnings per share available to Whirlpool common stockholders (hereafter referred to as "adjusted diluted earnings per share"), adjusted operating profit by segment (hereafter referred to as "adjusted segment operating profit"), and free cash flow. We believe that these non-GAAP measures provide meaningful information to assist stockholders in understanding our financial results and assessing our prospects for future performance. Management believes adjusted operating profit, adjusted earnings before tax, adjusted diluted earnings per share and adjusted segment operating profit are important indicators of our operations because they exclude items that may not be indicative of or are unrelated to our core operating results, and provide a better baseline for analyzing trends in our underlying businesses. Management believes that free cash flow provides stockholders with a relevant measure of liquidity and a useful basis for assessing the company's ability to fund its activities and obligations. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names. These adjusted financial measures should not be considered in isolation or as a substitute for reported operating profit, earnings before income taxes and other items, diluted net earnings per share available to Whirlpool common stockholders and cash provided by operating activities, the most directly comparable GAAP financial measures. These non-GAAP financial measures reflect an additional way of viewing aspects of our operations that, when viewed with our GAAP results and the below reconciliations to corresponding GAAP financial measures, provide a more complete understanding of our business. We strongly encourage investors and stockholders to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure.

Adjusted Operating Profit, Adjusted Earnings Before Tax, Adjusted Diluted Earnings Per Share

The reconciliation provided below reconciles the non-GAAP financial measures adjusted operating profit, adjusted earnings before tax and adjusted diluted earnings per share, with the most directly comparable GAAP financial measures, reported operating profit, earnings before income taxes and other items, diluted earnings per share available to Whirlpool common stockholders, for the three-months ended March 31, 2010.

                                          Three-Months Ended
                                            March 31, 2010
                                            --------------
                                                                 Diluted
                               Operating    Earnings          Earnings Per
                                 Profit    Before Tax             Share
                              ----------  -----------        -------------

    Reported GAAP Measure           $241          $171                $2.13

    Supplier-related quality
     issue accrual (a)                75            75                 0.61
    OPEB curtailment gain (b)        (29)          (29)               (0.23)
                                     ---           ---                -----

    Adjusted Non-GAAP measure       $287          $217                $2.51
                                    ====          ====                =====


    (a)  We currently expect to undertake a corrective action to address
    a supplier-related quality and potential product safety issue.
    During the March 2010 quarter, we have accrued $75 million for this
    matter based on our current estimate of the costs of the action.
    The diluted earnings per share impact is calculated based on an
    income tax impact of approximately $28 million.

    (b)  During the March 2010 quarter we recognized a curtailment gain
    of $29 million related to a retiree healthcare plan.  The diluted
    earnings per share impact is calculated based on an income tax
    impact of approximately $11 million.  The company expects to
    recognize a curtailment gain of approximately $62 million during
    2010.

The reconciliation provided below reconciles the non-GAAP financial measures adjusted operating profit, adjusted earnings before tax and adjusted diluted earnings per share, with the most directly comparable GAAP financial measures, reported operating profit, earnings before income taxes and other items, and diluted earnings per share available to Whirlpool common stockholders, for the three-months ended March 31, 2009.

                                          Three-Months Ended
                                            March 31, 2009
                                            --------------
                                            Earnings            Diluted
                               Operating      Before         Earnings Per
                                 Profit        Tax               Share
                              ----------   ---------        -------------

    Reported GAAP Measure           $166          $57                $0.91

    Product recall (c)                23           23                 0.19
    Foreign operating tax
     settlement (d)                   26           42                 0.37
    OPEB curtailment gain (e)        (89)         (89)               (0.74)
                                     ---          ---                -----

    Adjusted Non-GAAP measure       $126          $33                $0.73
                                    ====          ===                =====


    (c)  During the March 2009 quarter, we announced, in a joint press
    release issued with the U.S. Product Safety Commission, a voluntary
    recall of 1.8 million refrigerators sold in the U.S. and Canada
    between 2001 and 2004.  During the March 2009 we accrued a $23
    million charge related to this recall.  The diluted earnings per
    share impact is calculated based on an income tax impact of
    approximately $9 million.

    (d)  During the March 2009 quarter, we entered into a settlement with
    the Brazilian government under a special program related to certain
    IPI tax credits and recorded an accrual of $42 million comprised of
    $26 million in tax charged to cost of products sold, $13 million in
    interest expense and $3 million in penalties charged to interest and
    sundry income (expense) in our Consolidated Condensed Statement of
    Income.   The diluted earnings per share impact is calculated based
    on an income tax impact of approximately $14 million.

    (e)  During the March 2009 quarter, we announced the suspension of
    the annual credit to retiree health savings accounts "RHSA" for the
    majority of active participants. The result of the indefinite
    suspension was a one-time curtailment gain of $89 million included
    in net periodic cost with an offset to other comprehensive income,
    net of tax. The diluted earnings per share impact is calculated
    based on an income tax impact of approximately $33 million.

Adjusted Segment Operating Profit

The reconciliation provided below reconciles the non-GAAP financial measure adjusted segment operating profit with the most directly comparable GAAP financial measure, reported segment operating profit, for the three-months ended March 31, 2010.

                                       Three-Months Ended
                                       ------------------
                                         March 31, 2010
                                         --------------
                                  Supplier-                        Adjusted
                    Segment        Related              OPEB        Segment
                   Operating    Quality Issue        Curtailment  Operating
                     Profit      Accrual (a)          Gain (b)      Profit
                  ----------   --------------       ------------  ---------

    North America         $94             $75               $(29)       $140
    Europe                 27               -                  -          27
    Latin America         167               -                  -         167
    Asia                   11               -                  -          11
    Other/
     Eliminations         (58)              -                  -         (58)
                          ---             ---                ---         ---

    Total
     Whirlpool           $241             $75               $(29)       $287
                         ====             ===               ====        ====

The reconciliation provided below reconciles the non-GAAP financial measure adjusted segment operating profit with the most directly comparable GAAP financial measure, reported segment operating profit, for the three-months ended March 31, 2009.

                                    Three-Months Ended
                                    ------------------
                                      March 31, 2009
                                      --------------
                        Segment         Product
                      Operating          Recall        Operating Tax
                        Profit            (c)          Settlement(d)
                     ----------        --------        --------------

    North America           $164             $23                   $-
    Europe                     -               -                    -
    Latin America             57               -                   26
    Asia                       5               -                    -
    Other/
     Eliminations            (60)              -                    -
                             ---             ---                  ---

    Total Whirlpool         $166             $23                  $26
                            ====             ===                  ===



                     Three-Months Ended
                     ------------------
                        March 31, 2009
                        --------------
                                           Adjusted
                          OPEB             Segment
                      Curtailment         Operating
                         Gain(e)            Profit
                     ------------         ---------

    North America             $(87)             $100
    Europe                       -                 -
    Latin America                -                83
    Asia                         -                 5
    Other/
     Eliminations               (2)              (62)
                               ---               ---

    Total Whirlpool           $(89)             $126
                              ====              ====

Adjusted Diluted Earnings Per Share (2010 Outlook)

The reconciliation provided below reconciles projected 2010 adjusted diluted earnings per share with projected 2010 diluted earnings per share available to Whirlpool common stockholders, the most directly comparable GAAP financial measure:

                                                        2010 Outlook
                                                        ------------

    Diluted earnings per share                          $8.00 - 8.50
    Supplier-related quality issue accrual
     (g)                                                        0.61
    OPEB curtailment gain (g)                               ~ (0.51)

    Adjusted Non-GAAP measure                           $8.10 - 8.60
                                                        ============


    (g)  See footnotes (a) and (b) above under "Adjusted Operating
    Profit, Adjusted Earnings Before Tax, Adjusted Diluted Earnings Per
    Share."

Free Cash Flow (Actual and 2010 Outlook)

As defined by the company, free cash flow is cash provided by operating activities after capital expenditures and proceeds from the sale of assets/businesses. The reconciliation provided below reconciles actual 2010 and 2009 and projected 2010 free cash flow with actual and projected cash (used in)/provided by operating activities, the most directly comparable GAAP financial measure.

                                                              2010
                                 Three-Months Ended         Outlook
                                 ------------------         -------
                                      March 31
                                      --------
    (millions of dollars)         2010         2009
                                  ----         ----
    Cash provided by /(used in)
     operating activities          $71        $(272) $1,050 -1,150
    Capital expenditures          (146)        (112)   (550 - 600)
    Proceeds from sale of assets     1           13         0 - 50
    ----------------------------   ---          ---         ------
    Free cash flow                $(74)       $(371)    $500 - 600
                                  ====        =====     ==========

SOURCE Whirlpool Corporation