Whirlpool 2005 Annual Report Download - page 6

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2 Whirlpool Corporation
2005: Unprecedented Challenges …
Unprecedented Success
During 2005, we achieved great progress in executing our
strategy while successfully managing unprecedented levels of
material and oil-related cost increases. Base metals, steel,
resin and logistic costs all hit record highs. In total, our
business absorbed more than $500 million in higher costs
during 2005, after absorbing $300 million in the second half
of 2004. We confronted this significant challenge by acceler-
ating new product innovation to the market, increasing
productivity and maintaining cost controls – all of which
enabled Whirlpool to deliver a record year of results,
highlighted by:
• Record revenues of $14.3 billion, up 8.3 percent
• Record $422 million net earnings, up 3.9 percent
• Record earnings per diluted share at $6.19, up from
$5.90 in 2004
• $881 million in cash provided by operating activities
• Debt-to-Capital ratio reduced from
46
to
40
percent
• Continued global growth of the 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 approval
Our Brand-Value-Creation Strategy
The fundamentals of our strategy remain unchanged; the
real story continues to be our progress in accelerating the
execution of this strategy. The success of our global business
is driven by our ability to truly understand and fulfill
customer needs, develop highly-innovative branded
solutions, effectively serve our trade customers and
continuously improve productivity and quality. The major
elements of our strategy are listed below:
Building upon our combined capabilities and successfully
executing each element of our strategy throughout the year
enabled us to overcome the challenges of 2005 and deliver
record results.
In 2005, Whirlpool Corporation continued to successfully execute our brand-value-creation
strategy in one of the most challenging external environments seen in decades. Material
and oil-related costs increased to unprecedented levels. Our success within this environment
was driven by consumer demand for a record number of new product innovations
launched throughout the year. Innovation, the attractiveness of our products, and our
employees’ commitment to success enabled Whirlpool to deliver a record level of
performance for our shareholders.
Chairman’s Letter / Whirlpool Corporation Thinking … Delivering … Delighting
Brand and Customer Loyalty
• Customer Focus • Innovation
• Brand Focus • Growth
Trade Management
• High Service Levels • Share of Business
• Coverage • Cost to Serve
Global Operating Platform
• Total Cost Productivity • Working Capital
• Quality • Fixed Asset Turnover
Best Customer Position
Best Trade Position
Best Cost and Quality Position