Whirlpool Corporation
Feb 2, 2009

Whirlpool Corporation Reports Fourth-Quarter and Full-Year 2008 Results

BENTON HARBOR, Mich., Feb 09, 2009 /PRNewswire-FirstCall via COMTEX/ -- Whirlpool Corporation (NYSE: WHR) announced today that full-year 2008 earnings from continuing operations were $5.50 per diluted share compared to $8.10 per diluted share reported in the same period last year. The company reported annual net sales of $18.9 billion, a decrease of 3 percent from the prior year.

Fourth-quarter net earnings decreased 76 percent to $44 million, or $0.60 per diluted share, compared to $187 million, or $2.38 per diluted share reported during the previous year. Sales of $4.3 billion for the quarter decreased 19 percent from the $5.3 billion reported in the fourth quarter of 2007. Excluding the impact of foreign exchange translation, the company's fourth-quarter sales declined approximately 13 percent.

Fourth-quarter earnings reflect sharply lower global unit sales and production volumes, higher material and oil-related costs and unfavorable foreign currency exchange movements compared to the fourth quarter of 2007. The company also recorded $77 million of restructuring costs compared to $15 million in the prior year. Results were also unfavorably impacted by a $32 million product recall expense related to a supplier quality issue. These items were partially offset by an income tax benefit, favorable price/mix, lower incentive compensation and cost reduction initiatives during the quarter. The company's results included $43 million in asset sale gains compared with $24 million of asset sale gains in the previous year.

"The severity and scope of the global economic downturn has significantly increased over the last several months and had a significant impact on consumer demand in all parts of the world," said Jeff M. Fettig, Whirlpool Corporation chairman and chief executive officer. "We have moved very quickly to adjust our business to much lower demand levels by significantly reducing costs and production levels while continuing to focus on providing our trade customers with an ongoing cadence of innovation which represents great value to consumers."

During the fourth quarter, Whirlpool Corporation accessed its existing $2.2 billion credit facility and is in full compliance with its bank covenants. Given the generally negative and highly volatile global economic climate and the challenges in global credit markets, the company is proactively taking steps to assure its future financial flexibility. The company has initiated discussions with banks to seek additional flexibility within its capital structure.

FOURTH-QUARTER REGIONAL REVIEW

Whirlpool North America

Fourth-quarter sales of $2.5 billion declined 18 percent from the prior year. Excluding the effects of currency, sales declined approximately 16 percent from the prior year. U.S. industry unit shipments of major appliances (T7)* declined approximately 10 percent.

The North America region reported an operating loss of $20 million compared to an operating profit of $175 million in the previous year. Significantly lower sales and unit production levels, unfavorable foreign exchange, product recall costs and higher material and oil-related costs were the primary unfavorable factors affecting the company's fourth-quarter operating profit. These factors were partially offset by favorable price/mix, ongoing cost reduction initiatives and a $23 million gain related to the sale of an asset.

Based on current economic conditions, the company expects full-year 2009 U.S. industry unit shipments to decline approximately 10 percent from 2008.

Whirlpool Europe

Whirlpool Europe reported fourth-quarter sales of $938 million, a 16 percent decrease from the prior year. Excluding the effects of currency, sales declined approximately 7 percent from the previous year. Overall industry unit demand during the quarter declined approximately 10 percent from the prior year.

Operating profit decreased to $2 million from $73 million reported in the previous year. European results were adversely impacted by unfavorable foreign currency fluctuations, higher material costs and sharply lower production rates during the fourth quarter.

Based on current economic conditions in the European region, the company expects full-year 2009 industry unit shipments to decline approximately 8 percent from 2008 levels.

Whirlpool Latin America

Fourth-quarter net sales declined 26 percent to $777 million. Excluding currency translation, sales for appliances and compressors decreased approximately 14 percent. Sales results reflected sharply lower industry unit demand throughout the Latin American region and in the global compressor operation.

Operating profit totaled $110 million in the fourth quarter compared with $156 million in the prior year. The overall results were unfavorably impacted by foreign currency exchange, lower revenues, higher material costs and the non-recurrence of a $15 million asset sale gain recorded in the previous year. These items were partially offset by favorable price/mix and cost reduction initiatives.

Full-year results represent record net sales and earnings. In addition, Latin America continued to build upon its industry leading position in both appliance and compressors.

Based on current economic conditions in Latin America, the company expects full-year 2009 shipments to be flat to down 5 percent.

Whirlpool Asia

Whirlpool Asia reported fourth-quarter sales of $140 million, decreasing 10 percent from the prior year. Excluding the impact of currency, sales increased approximately 7 percent predominantly due to higher unit volume and favorable price/mix. Operating profit during the quarter was $3 million compared to an operating loss of $4 million in the prior year. The year-over- year increase in operating profit resulted from higher volume and favorable trends in productivity and product price/mix. These favorable items were partially offset by higher material costs and unfavorable foreign currency exchange.

The company expects full-year 2009 industry unit shipments to be flat to down 5 percent from 2008 levels.

Outlook

For the full-year 2009, Whirlpool Corporation expects earnings per diluted share from continuing operations to be between $3.00 and $4.00. For the full year, the company expects to generate free cash flow** between $300 million and $400 million. The company's earnings and free cash flow projections are based upon our current economic forecasts and business plans.

"We expect 2009 economic conditions to be among the most challenging that we have faced," said Jeff M. Fettig, Whirlpool Corporation chairman and chief executive officer. "Significant demand declines, volatile cost and currency levels are expected throughout the year. To succeed in this environment we are aggressively taking additional steps, beyond actions previously announced, to further reduce all areas of cost, production capacity, working capital and capital expenditures. We will continue to have focused investments in new product innovation to further strengthen our branded market position with our consumers."

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

** A reconciliation of free cash flow, a non-GAAP financial measure, to cash provided by continuing operations appears below under the heading "Cash Flow Reconciliation."

2008 INNOVATIONS

2008 AWARDS AND ACCOMPLISHMENTS

Cash Flow Reconciliation

The table below reconciles actual 2008 and 2007 and projected 2009 cash provided by continuing operations determined in accordance with generally accepted accounting principles (GAAP) in the United States to free cash flow, a non-GAAP measure. Management believes that free cash flow provides shareholders with a relevant measure of liquidity and a useful basis for assessing the company's ability to fund its activities and obligations. There are limitations to using non-GAAP financial measures, including the difficulty associated with comparing companies that use similarly named non-GAAP measures whose calculations may differ from the company's calculations. As defined by the company, free cash flow is cash provided by continuing operations after capital expenditures and proceeds from the sale of assets/businesses.

                                     Twelve Months Ended
                                         December 31
    (millions of dollars)              2008       2007        2009 Outlook

    Cash provided by continuing
     operations                        $327       $927        $700  - $800

    Capital expenditures               (547)      (536)       (450) - (500)
    Proceeds from sale of
     assets/non-Maytag
     businesses                         119        130          50  -  100

    Free Cash Flow                    $(101)      $521        $300  - $400

About Whirlpool Corporation

Whirlpool Corporation is the world's leading manufacturer and marketer of major home appliances, with annual sales of approximately $19 billion, 70,000 employees, and 69 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 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 Corporation'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, including Sears Holding Corporation in North America (accounting for approximately 11% of Whirlpool's 2008 consolidated net sales of $18.9 billion) 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) litigation including product liability and product defect claims; (7) 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; (8) 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; (9) the ability of suppliers of critical parts, components and manufacturing equipment to deliver sufficient quantities to Whirlpool in a timely and cost-effective manner; (10) health care cost trends and regulatory changes that could increase future funding obligations for pension and post retirement benefit plans; (11) Whirlpool's ability to obtain and protect intellectual property rights; (12) 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; (13) the impact of labor relations; (14) our ability to attract, develop and retain executives and other qualified employees; (15) the cost of compliance with 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 STATEMENTS OF INCOME
                            Periods Ended December 31
                  (Millions of dollars, except per share data)

                                           Three Months       Twelve Months
                                               Ended              Ended
                                       -------------------- ------------------
                                      (Unaudited)(Unaudited)(Unaudited)
                                          2008      2007      2008      2007
                                       ---------  --------- --------- --------
    Net sales                            $4,315   $5,325    $18,907   $19,408
    Expenses
    Cost of products sold                 3,842    4,487     16,383    16,517
    Selling, general and administrative
     (exclusive of intangible
      amortization)                         379      484      1,798     1,736
    Intangible amortization                   7        7         28        31
    Restructuring costs                      77       15        149        61
                                       ---------  --------- --------- --------
    Operating profit                         10      332        549     1,063

    Other income (expense)
    Interest and sundry income (expense)    (66)     (43)      (100)      (63)
    Interest expense                        (53)     (52)      (203)     (203)
    Gain on sale of investment               -        -          -          7
                                       ---------  --------- --------- --------
              Earnings from continuing
               operations before income
               taxes and other items       (109)     237        246       804
    Income taxes                           (160)      39       (201)      117
                                       ---------  --------- --------- --------
              Earnings from continuing
               operations before equity
               earnings and minority
               interests                     51      198        447       687
    Equity in income (loss) of affiliated
     companies                               -        (8)        -        (18)
    Minority interests                       (7)      (3)       (29)      (22)
                                       ---------  --------- --------- --------
              Earnings from continuing
               operations                    44      187        418       647
    Loss from discontinued operations,
     net of tax                              -         -          -        (7)
                                       ---------  --------- --------- --------
    Net earnings available to common
     stockholders                           $44     $187       $418      $640
                                       =========  ========= ========= ========
    Per share of common stock
    Basic earnings from continuing
     operations                           $0.60    $2.42      $5.57     $8.24
    Discontinued operations, net of tax       -        -          -     (0.09)
                                       ---------  --------- --------- --------
    Basic net earnings                    $0.60    $2.42      $5.57     $8.15
                                       =========  ========= ========= ========
    Diluted earnings from continuing
     operations                           $0.60    $2.38      $5.50     $8.10
    Discontinued operations, net of tax       -        -          -     (0.09)
                                       ---------  --------- --------- --------
    Diluted net earnings                  $0.60    $2.38      $5.50     $8.01
                                       =========  ========= ========= ========
    Dividends                              $.43     $.43      $1.72     $1.72
                                       =========  ========= ========= ========
    Weighted-average shares outstanding
     (in millions)
    Basic                                  74.1     77.3       75.1      78.5
    Diluted                                74.7     78.4       76.0      79.9



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

                                                (Unaudited)
                                                December 31,      December 31,
                                                    2008              2007
                                                ------------      ------------
    Assets

    Current assets
      Cash and equivalents                            $146              $201
      Accounts receivable, net of allowance
       for uncollectible accounts of $66
       and $83 at December 31, 2008 and
       December 31, 2007, respectively               2,103             2,604
      Inventories                                    2,591             2,665
      Prepaid Expenses                                 110                89
      Deferred income taxes                            580               324
      Other current assets                             514               672
                                                ------------      ------------
        Total current assets                         6,044             6,555
                                                ------------      ------------
    Other assets
      Goodwill, net                                  1,728             1,760
      Other intangibles, net of accumulated
       amortization of $96 and $68 at
       December 31, 2008 and December 31,
       2007, respectively                            1,821             1,854
      Other assets                                     954               628
                                                ------------      ------------
        Total other assets                           4,503             4,242
                                                ------------      ------------
    Property, plant and equipment
      Land                                              74                84
      Buildings                                      1,186             1,226
      Machinery and equipment                        7,549             7,861
      Accumulated depreciation                      (5,824)           (5,959)
                                                ------------      ------------
        Total property, plant and equipment          2,985             3,212
                                                ------------      ------------
    Total assets                                   $13,532           $14,009
                                                ============      ============
    Liabilities and stockholders' equity

    Current liabilities
      Accounts payable                              $2,805            $3,260
      Accrued expenses                                 530               633
      Accrued advertising and promotions               440               497
      Employee compensation                            306               444
      Notes payable                                    393               298
      Current maturities of long-term debt             202               127
      Other current liabilities                        887               634
                                                ------------      ------------
        Total current liabilities                    5,563             5,893
                                                ------------      ------------
    Noncurrent liabilities
      Long-term debt                                 2,002             1,668
      Postretirement benefits                          822             1,061
      Pension benefits                               1,505               725
      Other liabilities                                567               682
                                                ------------      ------------
        Total noncurrent liabilities                 4,896             4,136
                                                ------------      ------------
    Commitments and contingencies

    Minority interests                                  67                69
                                                ------------      ------------
    Stockholders' equity
      Common stock, $1 par value, 250
       million shares authorized, 104
       million and 103 million shares
       issued at December 31, 2008 and
       December 31, 2007, respectively, 73
       million and 76 million shares
       outstanding at December 31, 2008
       and December 31, 2007, respectively             104               103
      Additional paid-in capital                     2,033             1,993
      Retained earnings                              3,993             3,703
      Accumulated other comprehensive
       income (loss)                                (1,259)             (270)
      Treasury stock, 31 million shares and
       27 million shares at December 31,
       2008 and December 31, 2007,
       respectively                                 (1,865)           (1,618)
                                                ------------      ------------
        Total stockholders' equity                   3,006             3,911
                                                ------------      ------------
    Total liabilities and stockholders'
     equity                                        $13,532           $14,009
                                                ============      ============



                             WHIRLPOOL CORPORATION
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                             Year ended December 31
                             (Millions of dollars)
                                                 (Unaudited)
                                                    2008               2007
                                                ------------      ------------
    Operating activities of continuing
     operations
    Net earnings                                      $418              $640
    Loss from discontinued operations                    -                 7
                                                ------------      ------------

       Earnings from continuing operations             418               647
    Adjustments to reconcile earnings
     from continuing operations to cash
     provided by operating activities
     from continuing operations:
    Depreciation and amortization                      597               593
    Gain on disposition of assets                      (60)              (65)
    Gain on sale of investment                           -                (7)
    Increase in LIFO inventory reserve                  42                 9
    Equity in losses of affiliated
     companies, less dividends received                  -                18
    Changes in assets and liabilities,
     net of business acquisitions:
       Accounts receivable                             300               181
       Inventories                                    (174)             (194)
       Accounts payable                               (250)              105
       Restructuring charges, net of cash
        paid                                            33               (82)
       Taxes deferred and payable, net                (256)               10
       Accrued pension                                (123)              (70)
       Employee compensation                           (84)              (24)
       Other                                          (116)             (194)
                                                ------------      ------------
         Cash provided by continuing operating
          activities                                   327               927
                                                ------------      ------------
    Investing activities of continuing
     operations
    Capital expenditures                              (547)             (536)
    Proceeds from sale of assets                       119               130
    Proceeds from sale of Maytag adjacent
     businesses                                          -               100
    Other                                               (5)              (25)
                                                ------------      ------------
         Cash used in investing activities of
          continuing operations                       (433)             (331)
                                                ------------      ------------
    Financing activities of continuing
     operations
    Proceeds from borrowings of long-term
     debt                                              545                 3
    Purchase of treasury stock                        (247)             (368)
    Repayments of long-term debt                      (131)              (17)
    Dividends paid                                    (128)             (134)
    Net proceeds (repayments) from short-
     term borrowings                                   101              (243)
    Common stock issued                                 21                68
    Other                                              (20)               (5)
                                                ------------      ------------
         Cash provided by (used in) financing
          activities of continuing operations          141              (696)
                                                ------------      ------------
    Cash provided by discontinued operations
       Operating activities                              -                 6
                                                ------------      ------------
    Cash provided by discontinued operations             -                 6
                                                ------------      ------------
    Effect of exchange rate changes on
     cash and equivalents                              (90)               33
                                                ------------      ------------
    Decrease in cash and equivalents                   (55)              (61)
    Cash and equivalents at beginning of
     year                                              201               262
                                                ------------      ------------
    Cash and equivalents at end of year               $146              $201
                                                ============      ============

SOURCE Whirlpool Corporation

http://www.whirlpoolcorp.com/