Whirlpool 2007 Annual Report Download - page 115

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FINANCIAL SUMMARY P.113
Cash Flows from Investing Activities of Continuing Operations Cash used in investing activities from
continuing operations was an outflow of $331 million compared to an outflow of $1.2billion last year.
The decrease was primarily due to cash disbursed to acquire Maytag, net of cash acquired, of $797
million and the purchase of minority interest shares of a Brazil subsidiary in the amount of $53
million during 2006. Offsetting cash used in investing activities from continuing operations were
proceeds received from the sale of certain Maytag discontinued businesses of $100 million and $110
million for the years ended December 31, 2007 and 2006, respectively. Cash used in investing
activities from continuing operations increased $764 million for the year ended December 31, 2006
as compared to 2005, primarily due to cash disbursed to acquire Maytag and increased capital spend-
ing to support the expansion of the operations in Mexico and the integration of Maytag. Offsetting
cash flow used in investing activities from continuing operations in 2006 are proceeds received for
the sale of certain Maytag discontinued businesses.
The goal of our global operating platform is to enhance our competitive position in the global
home appliance industry by reducing costs, driving productivity and quality improvements, and
accelerating our rate of innovation. We plan to continue our comprehensive worldwide effort to
optimize our regional manufacturing facilities, supply base, product platforms and technology
resources to better support our global products, brands and customers. We intend to make additional
investments to improve our competitiveness in fiscal 2008. Capital spending is expected to be
between $600 million and $625 million in 2008 in support of our investment in innovative product
technologies and our global operating platform initiatives.
Cash Flows from Financing Activities of Continuing Operations Cash used in financing activities
from continuing operations was an outflow of $696 million in the year ended December 31, 2007
compared to an inflow of $29 million for the year ended December 31, 2006. Net repayments of
short-term borrowings were $243 million for the year ended December 31, 2007 compared to
borrowings of $381 million in the prior year. The prior year reflects short-term debt issued to pay
our maturing $300 million Eurobond principal. Prior year results also reflect proceeds of long-term
debt which replaced commercial paper borrowings initially issued to finance the acquisition of
Maytag. Repayments of long-term debt reflect the maturity of Whirlpool and Maytag debt. During
the year ended December 31, 2007 we also repurchased stock totaling $368 million, paid dividends
to common stockholders totaling $134 million and received proceeds from the issuance of common
stock related to option exercises of $68 million. Cash used in financing activities from continuing
operations in 2006 was an inflow of $29 million compared to an outflow of $170 million in 2005.
The increase in cash is primarily due to proceeds received from long term debt associated with the
acquisition of Maytag that was not completely repaid by year end. These increases were partially
offset by lower common stock issuances in 2006 as compared to 2005.
MARKET RISK
We have in place an Enterprise Risk Management process that involves systematic risk identification
and mitigation covering the categories of Enterprise, Strategic, Financial, Operation 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.
We are exposed to market risk from changes in foreign currency exchange rates, domestic and
foreign interest rates, and commodity prices, which can affect our operating results and overall finan-
cial condition. We manage exposure to these risks through our operating and financing activities and,
when deemed appropriate, through the use of derivative financial instruments. Derivative financial
instruments are viewed as risk management tools and are not used for speculation or for trading
purposes. Derivative financial instruments are contracted with a diversified group of primarily
investment grade counterparties to reduce exposure to nonperformance on such instruments.