Whirlpool 2003 Annual Report Download - page 12

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David R. Whitwam
Chairman of the Board and
Chief Executive Officer
Chairman’s Letter
2003 Awards and Achievements
■Global Finance magazine named Whirlpool to the publication’s list of "The
World's Most Socially Responsible Companies," based on a survey of
companies worldwide that exemplify the principles of corporate responsibility.
■Whirlpool was ranked fifth among the most respected international
consumer goods companies in the latest "World’s Most Respected
Companies" survey, conducted annually by the Financial Times and
PricewaterhouseCoopers.
To Our Shareholders — Last year, a record number of consumers
turned to the brands of Whirlpool Corporation for unique products
and solutions, and in doing so, strengthened the company’s position
as the world’s leading manufacturer and marketer of major home
appliances.
Whirlpool’s growing appeal with consumers worldwide is the
result of our simple yet powerful path to growth—listen closely to
customers, develop relevant innovation that meets their needs and
apply every available resource to build relationships that last a lifetime.
Our achievements indicate that Whirlpool is on the right course:
■Consumer demand for all of our brands worldwide helped drive net
revenues in 2003 to a record level of $12.2 billion, an increase of
approximately 10.5 percent from 2002.
■Strong consumer interest in the Whirlpool brand once again made it
the world’s top-selling, major appliance brand.
■Full-year earnings of $5.91 per diluted share were in line with
expectations. To deliver these 2003 results, our operations also had
to overcome factors contributing $1.86 per share in unfavorable
comparisons to 2002, such as the negative effects of increased U.S.
pension costs, currency and reduced tax credits in Brazil.
■Our operations achieved strong levels of total cost productivity,
record improvements in net working capital and return on capital,
and a solid reduction in total debt from 2002 levels.
■We delivered full-year operating free cash flow of $302 million, a
strong performance for the company that included a voluntary
after-tax cash contribution of $97 million to our U.S. pension fund
last year. The contribution effectively lowers the company’s pension
contribution levels for 2004 and beyond, and flattens pension
expenses year to year.
■Our board of directors declared a dividend increase of 26 percent
for the first quarter in 2004. The increase reflects the board’s
confidence in the company’s financial position, the ability of our
global operations to generate ongoing free cash flow, and the
positive momentum of Whirlpool’s brands and businesses worldwide.
Building unmatched levels of customer loyalty
In 1999, Whirlpool began implementing worldwide its strategies and
plans in pursuit of our vision: Every Home … Everywhere with Pride,
Passion, and Performance. The quest centered on achieving
unmatched levels of customer loyalty to Whirlpool’s global brands.
Today, customer loyalty creates a clear competitive advantage for
the company. We know that our loyal customers are asking for
Whirlpool’s brands by name on retail floors, continually repurchasing
our products and services, and passionately recommending our brands
to others. Loyalty such as this drives revenue growth, margin
expansion and increased trade support for our brands. To achieve our
customer loyalty goals, we are transforming our global enterprise to
continually deliver innovative products, services and solutions within a
brand experience valued by our customers.