Whirlpool 2006 Annual Report Download - page 26

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EXECUTIVE OVERVIEW
Whirlpool Corporation (“Whirlpool”) is the world’s leading
manufacturer of major home appliances with 2006
revenues of $18.1 billion and net earnings of $433
million. Whirlpool’s four reportable segments are based
on geography and consist of North America (66% of
revenue), Europe (19% of revenue), Latin America (13% of
revenue) and Asia (2% of revenue). Whirlpool is a leading
producer of major home appliances in North America and
Latin America and has a significant presence in markets
throughout Europe, India and China. Whirlpool has
received worldwide recognition for accomplishments in a
variety of business and social efforts, including leadership,
diversity, innovative product design, business ethics, social
responsibility 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 platform and,
where appropriate, make strategic acquisitions.
On March 31, 2006, Whirlpool completed the acquisition
of Maytag Corporation (“Maytag”). The acquisition
represents a major strategic event in Whirlpool’s history and
is expected to result in significant efficiencies, as well as
future growth opportunities. During 2006, Whirlpool began
integrating the manufacturing, administrative, supply chain
and technology operations of Maytag.
OVERALL RESULTS OF OPERATIONS
Net Sales The total number of units, which includes
major and small appliances, sold in 2006 increased 16.5%
over 2005, or 4.9% excluding the impact of the Maytag
acquisition. Consolidated net sales increased 26.3% over
2005. Excluding currency fluctuations and the acquisition
of Maytag, net sales increased approximately 5%. Total
number of units sold in 2005 increased 1.3% over 2004.
Consolidated 2005 net sales increased 8.3% over 2004.
Excluding currency fluctuations, net sales increased
approximately 6%.
Significant regional trends were as follows:
• In 2006, North America unit volumes increased 21.6%
and sales increased 34.1% compared to 2005, reaching
record levels. Excluding the impact of the Maytag
acquisition, unit volumes increased approximately 2%
and net sales increased approximately 4%. Currency
did not have a material impact on results. Organic
volume and sales growth were driven by continued
consumer demand for our new product innovations and
improved Whirlpool and KitchenAid brand performance.
In 2005, North America unit volumes increased 0.8%
as compared to 2004, due to higher sales growth in
Whirlpool and KitchenAid branded products combined
with strong Canadian performance. Net sales increased
8% during 2005, or approximately 7% excluding
currency fluctuations, to $8.9 billion. The higher net
sales were driven by the combination of cost-based price
adjustments and volume increases in the Whirlpool and
KitchenAid brands during 2005.
The following is a summary of Whirlpool Corporation’s financial condition and
results of operations for 2006 and 2005. For a more complete understanding
of our financial condition and results, this summary should be read together
with Whirlpool’s Consolidated Financial Statements and related notes, and
the “Management’s Discussion and Analysis.” This information appears in
the Financial Supplement to the Company’s Proxy Statement mailed with this
Annual Report and in the Financial Supplement to the 2006 Annual Report on
Form 10-K filed with the Securities and Exchange Commission, both of which
also are available through the Internet at www.whirlpoolcorp.com.
Financial Summary