Whirlpool 2008 Annual Report Download

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Table of contents

  • Page 1
    Whirlpool m ay ta G kitChenaid jenn-air amana brastemp Consul baukneCht G l a d i ato r 2008 annual report

  • Page 2
    ...Corporation throuGh the eyes of our employees Corporate soCial responsibility finanCial summary Consolidated finanCial statements reports of manaGement and independent reGistered publiC aCCountinG firm five-year seleCted finanCial data shareholder and other information board of direCtors / exeCutive...

  • Page 3
    ... rates, and we continued to face high material and oil-related costs. despite the global economic volatility, we maintained - and in some areas grew - market position for our leading global brands. this is a testament to the strength of our global brand portfolio, product innovation and the value...

  • Page 4
    ... with innovation, providing excellent service and value to trade customers, and driving lower costs and higher product quality across our global operations. these steps, combined with continued investment in - and consumer preference for - our brands, position us well to endure this difficult period...

  • Page 5
    ...operations were $5.50 versus $8.10 in the prior year. our operating earnings fell by 48 percent, and free cash flow fell by more than $600 million to negative levels. our latin america and asia operations delivered strong sales and operating profit even as growth in these markets slowed. our results...

  • Page 6
    ... consumer demand to decline further in 2009, given the current economic outlook, we also expect to maintain and grow our global market position. We will do this by ensuring that our branded products, particularly our newest innovations, represent a strong value to our trade customers and consumers.

  • Page 7
    ... in the form of lower energy and water bills. energy efficiency represents a great financial value to consumers, especially during these tough economic times. Whirlpool Corporation offers the widest array of energy and water efficient appliances to the global marketplace. T HE ROA D AH E AD We have...

  • Page 8
    ... Whirlpool employees worldwide who work tirelessly to create better, more innovative products that improve the lives of people - in and around the home - each and every day. in the pages that follow, you will see the Whirlpool Corporation value-creation story through the eyes of our employees...

  • Page 9
    WHIRLPOOL CORPORATION P. 7 FINANCIAL HIGHLIGHTS (Millions of dollars, except per share data) Net sales Earnings from continuing operations Per share on a diluted basis Stockholders' equity Total assets Return on equity Book value per share Dividends per share Share price High Low Close Shares ...

  • Page 10
    ...More than 150 products launched in 2008 ASIA REGION #1 consumer-preferred brand in India A leader among Western brands in China Continued expansion into emerging markets EuROPE REGION #1 brand position Growth in the premium brand segment Continued expansion into emerging markets 014 O uR CO M PA...

  • Page 11
    WHIRLPOOL CORPORATION P. 9 Fueled by talented people in every corner of the world, Whirlpool Corporation is far more than the sum of our brands. We invite you to see our company through the eyes of our employees.

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    WHIRLPOOL CORPORATION P. 11 It's about innovation, eco-efficiency and the consumer. Mathias Tingström, Senior Manager, Whirlpool Studio and Freestanding Products, Global Design Studio Cassinetta, Italy

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    WHIRLPOOL CORPORATION P. 12

  • Page 15
    WHIRLPOOL CORPORATION P. 13 We're accelerating the pace of innovation and continuing our growth into adjacent businesses. Nilanjan Bhattacharya, General Manager, Sales New Delhi, India

  • Page 16
    WHIRLPOOL CORPORATION P. 14 Whirlpool brand's Cabrio washer and steam dryer offer front-load efficiency, industry-leading capacity and the benefits of steam. By using a combination of mist and heat in the dryer, the Cabrio steam dryer naturally steams away tough odors and relaxes wrinkles.

  • Page 17
    WHIRLPOOL CORPORATION P. 15 We're helping our consumers get more done, faster and easier than ever before. Tomas Diaz, Director, Whirlpool Brand Benton Harbor, Michigan, USA

  • Page 18
    WHIRLPOOL CORPORATION P. 16 Whirlpool products are reliable, smartly designed, easy to use: a kind of precious home-help intelligence for busy mothers like me! Anne-Frédérique Gautier, Manager, Marketing Group Suresnes, France

  • Page 19
    WHIRLPOOL CORPORATION P. 17 Countries where Whirlpool brand products are sold. Whirlpool , the flagship brand of the company, is dedicated to making a difference in people's lives every day. Whether it's making laundry a little less of a chore, doing our part to help you save water and energy, or...

  • Page 20
    WHIRLPOOL CORPORATION P. 18

  • Page 21
    WHIRLPOOL CORPORATION P. 19 Reliability, dependability and performance. That's the Maytag difference. Frank Nekic, Senior Product Manager Benton Harbor, Michigan, USA

  • Page 22
    WHIRLPOOL CORPORATION P. 20 As an employee and member of the Maytag team, I'm part of an authentic blend of cultures that touches the lives of consumers each and every day around the world. Luis C. Ortega, Manager, Maytag Brand Monterrey, Mexico

  • Page 23
    WHIRLPOOL CORPORATION P. 21

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    WHIRLPOOL CORPORATION P. 22 We're putting the Maytag back in Maytag. Blane Buckingham, Director, Maytag Brand Benton Harbor, Michigan, USA

  • Page 25
    WHIRLPOOL CORPORATION P. 23 High-efficiency laundry.

  • Page 26
    WHIRLPOOL CORPORATION P. 24 Maytag brand builds better products that last longer. Karen White, Senior Marketing Manager, Innovation Benton Harbor, Michigan, USA

  • Page 27
    ... been synonymous with reliability and durability. Today, Maytag brand's tradition of quality production and performance continues to thrive. Exceptionally durable, commercial-grade components are found in many Maytag brand appliances. RIGHT: The Maytag SteamClean Option dishwasher gets glassware...

  • Page 28

  • Page 29
    WHIRLPOOL CORPORATION P. 27 KitchenAid is a trusted partner and friend. Brian Maynard, Director, Brand Marketing Benton Harbor, Michigan, USA

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    WHIRLPOOL CORPORATION P. 28

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    WHIRLPOOL CORPORATION P. 29 I'm proud to carry on the tradition of timeless, classic design with unmatched craftsmanship. Kevin Gilboe, Senior Manager, KitchenAid Brand Studio Benton Harbor, Michigan, USA

  • Page 32
    WHIRLPOOL CORPORATION P. 30 Even in Paris, our stand mixer makes a fashion statement. Muriel Dreyfuss-Bellaiche, Territory Manager Paris, France

  • Page 33
    WHIRLPOOL CORPORATION P. 31 For 90 years, the iconic KitchenAid stand mixer has been a symbol of performance, versatility and timeless design. Embraced by cooks around the world, KitchenAid offers more than 40 colors and finishes for this kitchen essential.

  • Page 34
    We're building relationships. We're reaching into communities. Mary Chris Ashbrook, Training Team Lead, KitchenAid Customer Service Center Saint Joseph, Michigan, USA

  • Page 35
    WHIRLPOOL CORPORATION P. 33 Countries where KitchenAid brand products are sold. The KitchenAid brand believes one of life's greatest pleasures is preparing and sharing meals with one another. Food has the ability to bring people together. A time without distractions, an activity that lets us ...

  • Page 36

  • Page 37
    WHIRLPOOL CORPORATION P. 35 We're positioning Jenn-Air in a way that further diversifies and strengthens Whirlpool Corporation's portfolio of brands. Jennifer Bonuso, Senior Category Manager Benton Harbor, Michigan, USA

  • Page 38
    WHIRLPOOL CORPORATION P. 36 My job is to evoke the emotion and provoke the passion that is Jenn-Air. Gary Stoner, Senior Marketing Manager Benton Harbor, Michigan, USA

  • Page 39
    WHIRLPOOL CORPORATION P. 37 The Jenn-Air oiled bronze double wall oven with convection makes it clear that the Jenn-Air brand is offering consumers high performance, distinct finishes, and alluring options and styling.

  • Page 40
    WHIRLPOOL CORPORATION P. 38 I'm passionate about my work and the finer things in life ...design, performance, food and the Jenn-Air brand. Andy Abrahamse, Merchandising Manager Mississauga, Ontario, Canada

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    WHIRLPOOL CORPORATION P. 39

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    WHIRLPOOL CORPORATION P. 40 I've made it my mission to deliver the best performance to our consumers. Steve Swayne, Regional Technology Leader, North American Cooking Systems Cleveland, Tennessee, USA

  • Page 43
    .... Jenn-Air products are designed for precise performance and with state-of-the-art innovations which instill confidence that culinary excellence will be achieved. Like its consumers, Jenn-Air brand wouldn't be satisfied with anything less. RIGHT: The Jenn-Air SteamClean dishwasher line provides...

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    WHIRLPOOL CORPORATION P. 43 It's about stylish design at affordable prices. That's Amana. Laura Hall, Senior Brand Manager, Amana Brand Benton Harbor, Michigan, USA

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    WHIRLPOOL CORPORATION P. 44 Say goodbye to smudges and fingerprints! The Amana silver kitchen suite is a stylish and affordable line of appliances, all in a finish that resists fingerprints, holds your favorite magnets and doesn't need special cleaners to keep it bright.

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    WHIRLPOOL CORPORATION P. 45 I make quality products that help people express their personal styles. Janet George, Finish Grinder, Fab Door Department Amana, Iowa, USA

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    WHIRLPOOL CORPORATION P. 46 We're setting the design standard for the industry. Joon Lee, Senior Designer, Global Consumer Design Benton Harbor, Michigan, USA

  • Page 49
    ... style message by working with Thom Filicia, an interior design guru and star of TV's hit design show, "Dress My Nest." As the Amana brand ambassador, Thom shows consumers how to express their individuality and design with Amana appliances. RIGHT: The plain vanilla belongs inside the freezer. Amana...

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    WHIRLPOOL CORPORATION P. 49 Brastemp brand stands for innovation, beauty and tradition. Vivian Cabral, Export Analyst São Paulo, Brazil

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    WHIRLPOOL CORPORATION P. 50 The Brastemp brand lives in the minds and hearts of Brazilian consumers. Luanda Abrantes, Procurement Analyst São Paulo, Brazil

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    WHIRLPOOL CORPORATION P. 51

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    WHIRLPOOL CORPORATION P. 52 It's about creating innovative products that bring to life the dreams and desires of millions. Marcio Guedes, Supply Base Management Analyst, International Purchasing Manaus, Brazil

  • Page 55
    ... introduced You ranges that consumers can customize via the Internet. The appliances can be configured according to the consumer's design and lifestyle preferences. The range is available in nine colors and more than 1,700 option combinations. You refrigerators and dishwashers are also available.

  • Page 56
    WHIRLPOOL CORPORATION P. 54 I'm committed to finding and retaining the best talent to deliver the best products to our consumers. Raquel Menezes Carletti, Human Resources Leader, Global Product Organization São Paulo, Brazil

  • Page 57
    WHIRLPOOL CORPORATION P. 55 Countries where Brastemp brand products are sold. A trendsetter in technology and design, the Brastemp brand leads all major home appliance innovations within Brazil. The Brastemp brand has transformed ranges, refrigerators and washing machines into objects of desire ...

  • Page 58

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    WHIRLPOOL CORPORATION P. 57 I think Consul is as warm as the weather here in Brazil. Nivia M. Carpi, Financial Planner São Paulo, Brazil

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    WHIRLPOOL CORPORATION P. 58

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    WHIRLPOOL CORPORATION P. 59 I recommend our products to my relatives and friends any chance I get. Flávio de Melo Braga, Material Planning Chief Manaus, Brazil

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    WHIRLPOOL CORPORATION P. 60 The Consul Facilite line offers the world's first single-door, no-frost refrigerators. The no-frost technology eliminates the time-consuming task of manually defrosting the freezer.

  • Page 63
    WHIRLPOOL CORPORATION P. 61 We make consumers' dreams come true! Elyane Freitas de Castro, Senior Product Analyst Manaus, Brazil

  • Page 64
    WHIRLPOOL CORPORATION P. 62 Consul is part of my home. Regiane Aparecida Fonseca Rodrigues, Service Assistant São Paulo, Brazil

  • Page 65
    WHIRLPOOL CORPORATION P. 63 Countries where Consul brand products are sold. The Consul brand shares close ties with consumers and understands their needs. Consul products are easy to use, durable and dependable. Consul understands that happiness can be found in the simplest things. The brand ...

  • Page 66

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    WHIRLPOOL CORPORATION P. 65 We offer eco-friendly and sustainable products that families can feel good about purchasing. Antonia Schulze, Brand Manager, Germanics Stuttgart, Germany

  • Page 68
    WHIRLPOOL CORPORATION P. 66 Bauknecht is one of the most preferred regional European brands because Whirlpool Corporation thinks globally and acts locally. Marten van der Mei, Marketing Director, Germanics Stuttgart, Germany

  • Page 69
    WHIRLPOOL CORPORATION P. 67 The hybrid Bauknecht EcoStyle washing machine combines advanced ecological features with timeless, elegant design. Its advanced Green Intelligence sensor monitors the washing process and optimizes water consumption, reducing water usage by up to 50 percent.

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    WHIRLPOOL CORPORATION P. 68 Through increased speed to market and international project teams, we're changing the way we do business. Stefan Wohnhas, Technology Lead Stuttgart, Germany

  • Page 71
    WHIRLPOOL CORPORATION P. 69 Countries where Bauknecht brand products are sold. For 90 years, the Bauknecht brand has developed high-quality appliances and technologies that are entirely geared toward the needs of consumers. All Bauknecht products are designed with the highest-quality standards, ...

  • Page 72

  • Page 73
    WHIRLPOOL CORPORATION P. 7 1 We're a leader in our industry. We're known for quality and innovation. Beyond the house and into the garage, we are breaking new ground. Kellye Wilson, Sales Director, Gladiator Brand Benton Harbor, Michigan, USA

  • Page 74
    WHIRLPOOL CORPORATION P. 72 As a consumer who is focused on value, I look for quality products. I just purchased another Gladiator garage cabinet and was happy to see the care in packaging and easy-tounderstand instructions. Todd P., Gladiator Brand Consumer Cromwell, Connecticut, USA

  • Page 75
    With one-of-a-kind design and functionality, the Gladiator Claw advanced bike storage device surpasses standard bike hooks and racks through its ease of installation and use. Bike storage has never been so easy.

  • Page 76
    WHIRLPOOL CORPORATION P. 74 Fierce customer loyalty. Nothing less. Gary Peters, Loyalty Specialist, Gladiator Brand Benton Harbor, Michigan, USA

  • Page 77
    WHIRLPOOL CORPORATION P. 75 Countries where Gladiator brand products are sold. Gladiator GarageWorks is the leader in garage organization, delivering innovative solutions that allow homeowners to organize their garages in ways that suit their individual storage needs. Imagine a garage that looks ...

  • Page 78
    ... sustainable difference in everything we do and touch. We are guiding the course of the company in ways that restore and enhance all forms of capital - human, natural and financial - to meet consumer needs, generate shareholder value and contribute to the wellbeing of current and future generations.

  • Page 79
    WHIRLPOOL CORPORATION P. 77 We touch the lives of people in ways you've never imagined. Mike Todman, President, Whirlpool North America Benton Harbor, Michigan, USA

  • Page 80
    WHIRLPOOL CORPORATION P. 78

  • Page 81
    ... P. 79 It's exciting to watch our impact spread farther than we ever thought possible. Jeff Noel, Corporate Vice President, Communications and Public Affairs Benton Harbor, Michigan, USA By partnering with others, Whirlpool Corporation and our employees multiply our actions far beyond what...

  • Page 82
    WHIRLPOOL CORPORATION P. 80 Sustainability is part of everything we do ...it's so much more than "green." Marc Bitzer, Executive Vice President and President, U.S. Operations Benton Harbor, Michigan, USA At Whirlpool Corporation, we believe that focusing on energy, water and the environment isn't...

  • Page 83
    WHIRLPOOL CORPORATION P. 81

  • Page 84
    ... Whirlpool Corporation'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 2008 Annual Report...

  • Page 85
    ... the acquisition of Maytag. Maytag's reported consolidated net sales for the year ended December 31, 2005 were approximately $4.9 billion. With the acquisition, we added an array of home appliance brands including Maytag, Jenn-Air and Amana. The aggregate purchase price for Maytag was approximately...

  • Page 86
    ...was partially offset by higher demand in Canada and Mexico and a higher average unit selling price due to product innovation and better product price/mix. Excluding the impact of the Maytag acquisition, North America sales decreased 5%. • Europe net sales increased in 2008 by 4.4% compared to 2007...

  • Page 87
    ...successful new product introductions, improved product price/mix and continued growth within India, the segment's largest market. Excluding the impact of foreign currency, Asia net sales increased 12.9% in 2007. Gross Margin The consolidated gross margin percentage in 2008 decreased compared to 2007...

  • Page 88
    ...lower debt levels at lower interest rates during 2007. Gain on Sale of Investment During 2007, we sold approximately 9 million shares, or 7%, of Whirlpool of India Limited and recorded a gain of approximately $7 million. This sale was executed to satisfy a change in the Stock Exchange Board of India...

  • Page 89
    ... working capital financing as a result of the nature of our business. The volume and timing of refrigeration and air conditioning production impacts our cash ï¬,ows and consists of increased production in the first half of the year to meet increased demand in the summer months. The funding markets...

  • Page 90
    ...purchase price of $97 million under this program. At March 31, 2008, there were no remaining funds authorized under this program. On April 23, 2008, our Board of Directors authorized a new share repurchase program of up to $500 million. Share repurchases are made from time to time on the open market...

  • Page 91
    ...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...

  • Page 92
    ... (accounting for approximately 11% of Whirlpool's 2008 consolidated net sales of $18.9 billion) and the ability of these trade customers to maintain or increase market share; (4) intense competition in the home appliance industry reï¬,ecting the impact of both new and established global competitors...

  • Page 93
    ... P. 91 CONSOLIDATED STATEMENTS OF INCOME (Millions of dollars, except per share data) Year Ended December 31 N ET SAL ES E X P ENS ES 2008 $ 18,907 16,383 1,798 28 149 549 2007 $ 19,408 16,517 1,736 31 61 1,063 2006 $ 18,080 15,420 1,752 30 55 823 Cost of products sold Selling, general and...

  • Page 94
    ... debt Postretirement benefits Pension benefits Other liabilities Total noncurrent liabilities Commitments and contingencies Minority interests STOC KH OL D ER S ' E Q u I T y Common stock, $1 par value, 250 million shares authorized, 104 million and 103 million shares issued at December 31, 2008...

  • Page 95
    WHIRLPOOL CORPORATION P. 93 CONSOLIDATED STATEMENTS OF CASH FLOWS (Millions of dollars) Year Ended December 31 2008 $ 418 - 418 $ 2007 640 7 647 $ 2006 433 53 486 OP ER ATING AC TIv I T I E S O F CO N T I N u I N G O PE R AT I O N S Net earnings Loss from discontinued operations Earnings from...

  • Page 96
    ...'s sole authority to review and approve all audit engagement fees and terms and pre-approve the nature, extent, and cost of all non-audit services provided by the independent registered public accounting firm. Roy W. Templin Executive Vice President and Chief Financial Officer February 19, 2009

  • Page 97
    ...registered public accounting firm has issued an audit report on its assessment of Whirlpool's internal control over financial reporting. This report appears on page 97. Jeff M. Fettig Chairman of the Board and Chief Executive Officer February 19, 2009 Roy W. Templin Executive Vice President and...

  • Page 98
    ...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, 2008 and 2007, and the...

  • Page 99
    ... 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, 2008 and 2007, and the related consolidated statements of income, changes in stockholders' equity, and cash...

  • Page 100
    ... debt-appliance business as a percent of invested capital(7) Price earnings ratio OTH ER DATA Number of common shares outstanding (in thousands): Average - on a diluted basis year-end Number of stockholders (year-end) Number of employees (year-end) Total return to shareholders (five year annualized...

  • Page 101
    ..., Chicago, IL. Transfer Agent, Shareholder Records, Dividend Disbursements and Corporate Secretary For information about or assistance with individual stock records, transactions, dividend checks or stock certificates, contact: Computershare Trust Company, N.A. Shareholder Services P.O. Box 43069...

  • Page 102
    ... OF DIRECTORS Herman Cain (3, 4) Chief Executive Officer and President, THE New Voice, Inc. Gary T. DiCamillo (1, 3) President and Chief Executive Officer, RADIA International Jeff M. Fettig Chairman of the Board and Chief Executive Officer, Whirlpool Corporation Kathleen J. Hempel Former Vice...

  • Page 103
    ... Evergreen Ocean Blue Principal Lifestyle/CEO Portrait Photography: Gregory Miller Oxide Silver Slate Tuscan Chestnut White Whirlpool Corporation and General offiCes World Headquarters and North America Region 2000 N. M-63 Benton Harbor, MI 49022-2692 Telephone: 269-923-5000 Europe Region...

  • Page 104
    Whirlpool m ay ta G kitChenaid jenn-air amana brastemp Consul baukneCht G l a d i ato r