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Whirlpool Corporation 2006 Annual Report
Every Home…Everywhere with Pride,
Passion and Performance.

Table of contents

  • Page 1
    Whirlpool Corporation 2006 Annual Report Every Home...Everywhere with Pride, Passion and Performance.

  • Page 2
    ... Letter Maytag Acquisition Whirlpool: Products and Customers Worldwide Key Accomplishments Worldwide Operations Financial Summary Consolidated Condensed Financial Statements Reports of Management and Independent Registered Public Accounting Firm Eleven-Year Consolidated Statistical Review Innovation...

  • Page 3
    ... Latin America Region Headquarters: São Paulo, Brazil 2006 Sales: $2.4 billion Principal Products: Automatic Dryers, Automatic Washers, Compressors and Cooling Solutions, Countertop Appliances, Dishwashers, Fabric Fresheners, Freezers, Microwave Ovens, Ranges, Refrigerators, Room Air Conditioners...

  • Page 4
    ... with highly innovative products and services under our global portfolio of preferred brands ...efficiently delivering products and providing brand support to thousands of trade customers worldwide ...continually improving our manufacturing capabilities, productivity and quality Our strategy allows...

  • Page 5
    ... • Continued global growth of the Whirlpool brand, the number one selling appliance brand in the world • Acquisition of Maytag with the expectation of realizing more than $400 million in efficiencies on an annual basis by 2008 • BRAND VALUE CREATION STRATEGY Our business strategy is based...

  • Page 6
    ... of brands that complements our existing product offerings. Maytag primarily operated in North America, while Whirlpool has been able to use global manufacturing and procurement to create operating efficiencies on a worldwide basis for years. Now, our combined business allows us to realize better...

  • Page 7
    ... time and resources, Whirlpool employees around the world help improve the lives of others. In 2006, we strengthened our ongoing global support of Habitat for Humanity International. We were a sponsor of the Jimmy Carter Work Project in India, during which Whirlpool employees helped build 100 homes...

  • Page 8
    ... in the home appliance industry. Our process of building loyalty to our brands starts with deep customer insights that guide the development of innovative products and services. This process led the Whirlpool brand to be the number one selling home appliance brand in the world. In Brazil, consumers...

  • Page 9
    ... training to better serve trade customers Global manufacturing, procurement, R&D and supply chain organization to drive significant efficiencies Additional long-term trade relationships Enhanced business-to-business efficiencies and support levels Savings throughout the value chain in redundancy...

  • Page 10
    ... Clothes revitalization Room air conditioning Dehumidifiers Kitchen/Dining Refrigeration Dishwasher Cooking Ventilation Portables Cookware Laundry Room Washer, dryer, sink Clothes revitalization Laundry storage solutions Basement Storage Water filtration HVAC Freezers t en nt cem e n old ss ou...

  • Page 11
    ... demonstrate how our strategy is being executed around the world. From innovative products and processes, to continually improving customer relationships, we move closer to our vision of Every Home...Everywhere. Whirlpool Duet: In 2006, the Whirlpool brand Duet fabric care system was honored by...

  • Page 12
    FABRIC CARE Designed and built in Germany in 2001, the award-winning Whirlpool Duet fabric care system remains the best selling and most popular front-loading washer in North America. We also sell this popular washer in Europe as the Bauknecht Big and Whirlpool Dreamspace, and, in 2006, we ...

  • Page 13
    ... realize continual global operational efficiencies. For example, Whirlpool brand Fabric Fresheners and Pret-aPorters are sold throughout North America, Europe and Latin America. We sell Whirlpool brand microwaves, which are built on common manufacturing platforms, throughout North America and Europe...

  • Page 14
    ... and excellent results. Refrigerators with 6th Sense technology automatically adjust internal temperatures to keep food fresh and safe. Dishwashers and washing machines modify cleaning cycles and the amount of time, energy and water needed to clean loads, resulting in clean dishes or clothing while...

  • Page 15
    ... cost savings, and deliver value to our consumers, trade customers and shareholders. The development process begins in the company's design and technology organizations where more than 130 industrial designers in four design centers and 3,500 engineers in 26 research centers around the world develop...

  • Page 16
    130 industrial designers worldwide 4 design centers worldwide 3,500 engineers worldwide 26 research centers worldwide 47 manufacturing locations worldwide 13

  • Page 17
    ... a supply chain centered on our customers' needs. We launched new order processes and online tools to provide our trade customers with real-time information on products, prices and promotions while streamlining the ordering process. We are improving product availability and delivery lead times...

  • Page 18
    ... revenues of $1.6 billion from innovative products, up 110 percent versus 2005. Whirlpool brand's centralpark connector dock will allow consumers to use and charge home electronic devices while they are in the kitchen. Whirlpool is working to bring the concept product to North America in 2007. 15

  • Page 19
    ...ethical business. Throughout the years, we have built a culture of doing what is right based on Whirlpool values and consistently working to strengthen the economic and social fabric of communities around the world. One of the most visual ways our 73,000 employees are helping to build a better world...

  • Page 20
    ... from the Industrial Designers Society of America (IDSA) and Business Week magazine for the Whirlpool brand Duet fabric care system. The Whirlpool Duet Sport fabric care system, KitchenAid Architect II Series microwave hood combination oven and Maytag ICE2O refrigerator received design awards from...

  • Page 21
    ... products. In refrigeration, we launched the industry's first French door bottom-freezer refrigerators with an ice and water dispenser on the door and 42-inch built-in French door bottom-freezer refrigerator. As a result of the Maytag acquisition, we now have an expanded portfolio of powerful brands...

  • Page 22
    ...its popular front-loading DreamSpace washing machine, increasing its capacity to enable it to complete nine kilograms (20 pounds) of laundry in a single load. And, the Bauknecht brand launched two new built-in appliance lines - Pure and Design - which integrate several different global design trends...

  • Page 23
    ... 6th Sense line of products, a refrigerator with a pure-water dispenser, a line of gas-on-glass cooktops in assorted colors to serve middle-end consumers and the Brastemp Gourmand line. Comprehensive cost-management processes delivered strong value for the region. Our lean manufacturing program has...

  • Page 24
    ... our export business. We also anticipate profit improvement in 2007, resulting from our improved management of product mix and margins. Mark Hu Executive Vice President and President Whirlpool Asia Fusion Direct Cool Refrigerator Whirlpool India refrigerator with 6th Sense "frost control" provides...

  • Page 25
    ... 11 languages before making a copy available to each one of our 73,000 employees worldwide. We have provided employees with a confidential "hotline" to report ethical issues since 1993, which is now available globally. Our high levels of financial accountability and business ethics were once again...

  • Page 26
    ... and community involvement. Whirlpool's growth strategy over the past several years has been to introduce innovative new products, increase customer loyalty for our brands, enhance our trade customer management platform, improve total cost and quality by expanding and leveraging our global operating...

  • Page 27
    ... market share, new product introductions and improved mix of product, primarily attributable to the Whirlpool brand and expansion of our built-in appliance business. During 2005, Europe unit volumes increased 2.1%, outpacing industry growth. Solid demand for Whirlpool branded products and continued...

  • Page 28
    ... results of Maytag, including integration costs and efficiencies, and the effect of purchase accounting adjustments. Discontinued Operations Whirlpool classified the Hoover floor-care, Dixie-Narco vending systems, Amana commercial microwave and Jade commercial and residential products businesses as...

  • Page 29
    ... with incremental efficiencies realized from the Maytag acquisition, productivity improvements, new product introductions, including the revitalization of Maytag branded products, cost-based price adjustments and improved product mix. In 2006, Whirlpool launched the largest number of new products to...

  • Page 30
    ...of the nature of its business. The volume and timing of refrigeration and air conditioning production impacts our cash flows and consists of increased production in the first half of the year to meet increased demand in the summer months. Whirlpool finances its working capital fluctuations primarily...

  • Page 31
    ...any additional compensation from Whirlpool or the Whirlpool Foundation for their services to Harbor Shores. The purpose of the Harbor Shores project is to transform approximately 530 acres in Benton Harbor and St. Joseph, Michigan, into a residential and commercial community with a goal of enhancing...

  • Page 32
    ... the acquisition, we added an array of home appliance brands including Maytag, Jenn-Air and Amana. The aggregate purchase price for Maytag was approximately $1.9 billion, including approximately $848 million of cash and approximately 9.7 million shares of Whirlpool common stock. The purchase price...

  • Page 33
    ..., and Compliance and Reporting risk. The Enterprise Risk Management process receives Board of Directors and Management oversight, drives risk mitigation decision-making and is fully integrated into our internal audit planning and execution cycle. Whirlpool is exposed to market risk from changes in...

  • Page 34
    ...equity earnings and minority interests Equity in earnings (loss) of affiliated companies Minority interests Earnings from continuing operations Loss from discontinued operations, net of tax NET EARNINGS PER SHARE OF COMMON STOCK: Basic earnings from continuing operations Discontinued operations, net...

  • Page 35
    ... operations Total Current Assets OTHER ASSETS Investment in affiliated companies Goodwill, net Other intangibles, net Deferred income taxes Other assets 23 1,663 1,871 513 175 4,245 PROPERTY, PLANT AND EQUIPMENT Land Buildings Machinery and equipment Accumulated depreciation 94 1,174 7,186 (5,297...

  • Page 36
    ... and Stockholders' Equity December 31 ($ in millions) CURRENT LIABILITIES Notes payable Accounts payable Employee compensation Accrued advertising and promotions Deferred income taxes Accrued expenses Pension benefits Postemployment benefits restructuring costs Income taxes Other current liabilities...

  • Page 37
    ...business acquisitions: Trade receivables Inventories Accounts payable restructuring charges, net of cash paid Taxes deferred and payable, net Accrued pension Employee... of long-term debt Dividends paid Purchase of treasury stock Common stock issued under stock plans Other Cash Provided By (Used For...

  • Page 38
    ... with management's authorizations. The Company's accounting records, policies and internal controls are regularly reviewed by an internal audit staff. The audit committee of the Board of Directors of the Company is composed of six independent directors who, in the opinion of the board, meet the...

  • Page 39
    ... Financial Statements The Stockholders and Board of Directors Whirlpool Corporation Benton Harbor, Michigan We have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Whirlpool Corporation as of December 31...

  • Page 40
    ... Registered Public Accounting Firm on Internal Control Over Financial Reporting The Stockholders and Board of Directors Whirlpool Corporation Benton Harbor, Michigan We have audited management's assessment, included in the accompanying Management's Report on Internal Control Over Financial...

  • Page 41
    ... SHARE DATA Basic earnings (loss) from continuing operations before accounting change Diluted earnings (loss) from continuing operations before accounting change Diluted net earnings (loss) Dividends Book value Closing Stock Price - NYSE KEY RATIOS Operating profit margin Pre-tax margin Net margin...

  • Page 42
    ... from continuing operations, as a percent of sales. (7) Net earnings (loss), divided by average stockholders' equity. Average stockholders' equity is computed on... a 13-month average beginning in 2001. (8) Net earnings (loss), divided by average total assets. (9) Debt divided by debt, stockholders...

  • Page 43
    ... largest new product launch in our history with the introduction of a completely new fabric care line in North America • Innovation projects continue to return higher-than-average margins and drive shareholder value All-Gas Double Oven First all-gas double oven. NA Single Drawer Dishwasher Water...

  • Page 44
    ... Larry Venturelli Corporate Vice President and Controller For each quarter during 2005 and 2006, Whirlpool paid a Whirlpool Corporation dividend of $0.43 per share. 2000 N. M-63, Mail Drop 2800 Benton Harbor, MI 49022-2692 Common Stock Telephone: 269.923.4678 Market Price High Low Close Fax: 269.923...

  • Page 45
    ... Product and Service Information (North America) Amana brand: 800.843.0304 Jenn-Air brand: 800.688.1100 KitchenAid brand: 800.422.1230 Maytag brand: 800.462.9824 Whirlpool brand: 800.253.1301 Internet Address Information about Whirlpool Corporation, including financial data is available at: www...