Whirlpool 2005 Annual Report Download

Download and view the complete annual report

Please find the complete 2005 Whirlpool annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 42

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42

Whirlpool Corporation
Annual Report 2005

Table of contents

  • Page 1
    Whirlpool Corporation Annual Report 2005

  • Page 2
    ... Highlights (inside front cover) Chairman's Letter People / Process / Products Worldwide Operations Financial Summary Consolidated Condensed Financial Statements Reports of Management and Independent Registered Public Accounting Firm Eleven-Year Consolidated Statistical Review Shareholders' and...

  • Page 3
    ... innovation capabilities drive the process. Innovation at Whirlpool is not a temporary project or separate corporate department. It is a capability that permeates all areas of the company ...within our people, our products and our services. In a rapidly changing global marketplace, our customers...

  • Page 4
    Whirlpool Corporation Innovation Pipeline Whirlpool launched its innovation initiative in 1999 to create value for our customers and shareholders and drive loyalty to our brands. During 2005, a record number of new products were introduced into the marketplace globally, driving additional sales...

  • Page 5
    ... innovation capabilities drive the process. Innovation at Whirlpool is not a temporary project or separate corporate department. It is a capability that permeates all areas of the company ...within our people, our products and our services. In a rapidly changing global marketplace, our customers...

  • Page 6
    ... Whirlpool brand ...the number one selling appliance brand in the world • Internal controls over financial reporting were again assessed to be effective under Section 404 of the Sarbanes-Oxley Act of 2002 • Our agreement to acquire Maytag Corporation, which obtained subsequent Maytag shareholder...

  • Page 7
    ... the value of our products and brands. Customer loyalty is an important element of this approach, and Whirlpool innovation enables our people to create the products and services that delight our customers and grow shareholder value. Over the last six years, we've worked hard to make innovation a key...

  • Page 8
    ... International. We were the lead sponsor of the 2005 Jimmy Carter Work Project (JCWP) in Michigan - where hundreds of Whirlpool people from more than 19 nations built more than 230 homes. We also announced plans to support every Habitat home built globally through 2011, with product donations...

  • Page 9
    ...products and services that customers value, which is driving growth and value for shareholders. Our strategy is working. Executing our strategy requires a unique toolkit of competencies that we continue to build for our people globally. The starting point of building new competencies is what we call...

  • Page 10
    ...-assist oven, Whirlpool Europe's built-in cooking line, our novel artistic refrigerators in Latin America, and the Gladiator Garageworks line of products ...are just a few examples of recent Whirlpool innovations driving the attractiveness of our brands in the marketplace worldwide. Our customer...

  • Page 11
    ...," Mark says. "My customers are true early adopters of our latest innovative products, improving our speed to market." The approach is working ...driving sales of our built-in appliances and branded suites of products. Whirlpool created this new-to-the-industry position three years ago to foster...

  • Page 12
    ... do you connect employees in Whirlpool Corporation's Southern China microwave factory with customers half a planet away? How do you instill a sense of importance in their work for driving Whirlpool customer loyalty in Europe and America? Simple, thought Andrew Yu, Whirlpool plant director in Shunde...

  • Page 13
    ...team of people from Whirlpool Corporation's Customer Experience Center recently adopted the concept to create a Bill of Rights - from a customer's point of view. This new Customer Bill of Rights is now under development to help guide interactions with customers calling the company or needing service...

  • Page 14
    Superior Service: Reinforcing Brand Promise People / Process / Products Ricardo Acosta, Vice President, Customer Service Whirlpool Latin America How do you ensure customer satisfaction over the lifetime of an appliance purchase and fulfill its brand promise? You turn service into an opportunity ...

  • Page 15
    ... Sales, Latin America The team tailors appliances to meet a variety of region-specific needs ...quickly. With over seven million units managed by the group globally in 2005, worth $1.4 billion (10 percent of our total volume) ...it's just the beginning. - Justin Reinke Whirlpool Corporation...

  • Page 16
    Unprecedented Quality Control Standards People / Process / Products When Whirlpool Mexico begins production at its new refrigerator factory in 2006, the units rolling off the assembly line won't come from a conventional manufacturing site built around operational principles alone. The new factory ...

  • Page 17
    ... People / Process / Products Whirlpool Latin America completed an intense innovation process with employees, customers and opinion leaders, looking for new opportunities outside the realm of major home appliances. The result is a new branded consumer product, an innovative business model in Brazil...

  • Page 18
    A Fresher Idea People / Process / Products Five years ago, Whirlpool launched a new-to-the-industry laundry appliance called the Personal Valet System, which removes odors and wrinkles. It was an immediate hit at trade shows and eye-catching on retail floors as a major home appliance. However, ...

  • Page 19
    ... to Work For in Latin America" for the second year in a row. Recognized as the company with the largest number of refrigerators and freezers to earn the PROCEL Energy Efficiency Label, a Brazilian government energy savings program. Asia Began a partnership with Habitat for Humanity India. Whirlpool...

  • Page 20
    ...companies to work for in the country. Whirlpool Mexico, Brands: U nited States: Whirlpool, KitchenAid, Gladiator, Roper, Estate Mexico: Whirlpool, Acros, Supermatic, Crolls Canada: Inglis, Whirlpool, KitchenAid Headquarters: Manufacturing Locations: Principal Products: Benton Harbor, MI, USA...

  • Page 21
    ... Dryers, Automatic Washers, Built-in Hobs, Built-in Ovens, Countertop Appliances, Dishwashers, Free-standing Cookers, Freezers, Microwave Ovens, Ranges, Refrigerators Marc Bitzer Executive Vice President and President, Whirlpool Europe To further expand the growth of our European business...

  • Page 22
    ...Executive Vice President and President, Latin America Principal Products: A utomatic Washers, Compressors, Countertop Appliances, Dishwashers, Freezers, Microwave Ovens, Ranges, Refrigerators, Room Air Conditioners, Fabric Dryer Manufacturing Locations (Brazil): looking options beyond the...

  • Page 23
    ... the year, the appliance industry grew by about 4 percent. Brands: Whirlpool, KitchenAid Headquarters: Shanghai, PRC Manufacturing Locations: India: Faridabad, Pune, Pondicherry China: Shanghai, Shunde Our business in other parts of Asia also continued to make good progress during 2005...

  • Page 24
    ... as important parts of business and society, Whirlpool Corporation was conducting business with integrity and extending a helping hand to people in times of need. Why? Because for us, this approach has always been the right thing to do. Throughout the years, Whirlpool has built a culture based on...

  • Page 25
    ... Whirlpool brand performance and expansion of the Company's built-in appliance business. Europe's net sales increased 13.8%, or approximately 3% excluding currency fluctuations. Overall market share improved due to Whirlpool brand performance and new product introductions. • In2005, Latin America...

  • Page 26
    ... improved slightly versus 2003 as productivity improvements and sales volume more than offset pricing pressure. European operations continue to realize savings from ongoing restructuring efforts in Europe. • The2005 Latin America gross margin increased 250 basis points as compared to 2004, as the...

  • Page 27
    ... In 2006, the Company will launch the largest number of new products to market in its history. The Company's innovation product pipeline continues to grow, consumer and trade response to its new offerings has been positive, and the Company continues to consistently execute its strategy of delivering...

  • Page 28
    ... for equipment and tooling, driven by product innovation initiatives, more efficient production methods, and replacement for normal wear and tear. Expenditures are also made to support the Company's global operating platform footprint moves to lower cost locations and replacement, regulatory and...

  • Page 29
    ... increased production in the first half of the year to meet increased demand in the summer months. The Company finances its working capital needs primarily through the commercial paper markets in the U.S., Europe and Canada. These commercial paper programs are supported by committed bank lines. In...

  • Page 30
    ...an expected rate of return on assets assumption of 8.5% and a discount rate of 5.6%. The $72 million compares to pension cost of $66 million in 2005. On November 14, 2005, the Company amended the Whirlpool Employees Pension Plan ("WEPP"). The amendment will be reflected in the Company's 2006 pension...

  • Page 31
    ...31 (millions of dollars except per share data) 2005 $ 14,317 11,269 2,199 57 792 2004 $ 13,220 10,358 2,089 15 758 2003 $ 12,176 9,423 1,920 3 830 Net sales Expenses Cost of products sold Selling, general and administrative Restructuring costs Operating profit Other income (expense) Interest and...

  • Page 32
    ... Year Ended December 31 (millions of dollars) 2005 2004 Current assets Cash and equivalents Trade receivables, less allowances (2005: $76; 2004: $107) Inventories Prepaid expenses Deferred income taxes Other current assets Total Current Assets Other assets Investment in affiliated companies...

  • Page 33
    ... earnings Accumulated other comprehensive loss Treasury stock - 24 million shares (2005); 23 million shares (2004) Total Stockholders' Equity Total Liabilities and Stockholders' Equity 92 92 863 2,902 (862) (1,250) 1,745 $ 8,248 737 2,596 (601) (1,216) 1,606 $ 8,181 Whirlpool Corporation 29

  • Page 34
    ... paid Purchase of treasury stock Redemption of WFC preferred stock Common stock issued under stock plans Other Cash Used for Financing Activities Effect of Exchange Rate Changes on Cash and Equivalents Increase (Decrease) in Cash and Equivalents Cash and Equivalents at Beginning of Year Cash...

  • Page 35
    ... to the 2005 Annual Report on Form 10-K and to the 2006 Proxy Statement. Management of Whirlpool Corporation is responsible for the accuracy and completeness of the information in this Annual Report. The financial and operating information was prepared from the Company's accounting records, books...

  • Page 36
    ...31, 2005. Whirlpool Corporation's independent registered public accounting firm has issued an audit report on our assessment of the Company's internal control over financial reporting. This report appears on page 33. Jeff M. Fettig Chairman of the Board and Chief Executive Officer February 28, 2006...

  • Page 37
    ... Whirlpool Corporation Benton Harbor, Michigan We have audited management's assessment, included in the accompanying Management's Report on Internal Control Over Financial Reporting, that Whirlpool Corporation maintained effective internal control over financial reporting as of December 31, 2005...

  • Page 38
    ... earnings (loss) (3) Dividends Book value Closing Stock Price - NYSE Key Ratios (4) Operating profit margin Pre-tax margin (5) Net margin (6) Return on average stockholders' equity (7) Return on average total assets (8) Current assets to current liabilities Total debt-appliance business as a percent...

  • Page 39
    ...76,812 74,081 11,686 46,546 20.8% (4) Key ratios include charges for restructuring charges, as well as other non-recurring items, which increased (decreased) operating profit, earnings before tax and net earnings in the following years: 2002 - Accounting for goodwill under SFAS No. 141 and 142 and...

  • Page 40
    ...Whirlpool Corporation (exchange symbol: WHR) is listed on the New York and Chicago stock exchanges. Systems B.V. ENERGY STAR is a U.S. registered mark. eBay is a registered trademark of eBay, Inc. The J.D. Power study was based on 7,574 new-home buyers who recently purchased new kitchen appliances...

  • Page 41
    ... Information (North America) KitchenAid brand: 800.422.1230 Whirlpool brand: 800.253.1301 Internet Address Whirlpool financial information and more are available at Whirlpool's site on the Internet: www.whirlpoolcorp.com Herman Cain 3,4 Chief Executive Officer and President, T.H.E. New Voice, Inc...

  • Page 42
    Whirlpool Corporation World Headquarters and North America Region 2000 North M-63 Benton Harbor, Michigan 49022-2692 Telephone: 269.923.5000 www.whirlpoolcorp.com