Whirlpool 2008 Annual Report Download - page 85

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Whirlpool Corporation (“Whirlpool”) is the world’s leading manufacturer of major home appliances
with revenues of $18.9 billion and net earnings of $418 million for the year ended December 31, 2008.
We are a leading producer of major home appliances in North America and Latin America and have a
significant presence in markets throughout Europe and India. We have 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.
We conduct our business through four reportable segments, which we define based on geography.
Our reportable segments consist of North America (57% of revenue), Europe (21% of revenue), Latin
America (19% of revenue), and Asia (3% of revenue).
Our global branded consumer products strategy over the past several years has been to introduce
innovative new products, increase brand customer loyalty, expand our presence in foreign markets,
enhance our trade management platform, improve total cost and quality by expanding and leveraging
our global operating platform and where appropriate, make strategic acquisitions and investments.
We monitor country-specific economic factors such as gross domestic product, consumer confidence,
retail trends, housing starts and completions, sales of existing homes and mortgage interest rates as
key indicators of industry demand. In addition to profitability, we also focus on country, brand, product
and channel sales when assessing and forecasting financial results.
During 2008, we experienced significant macroeconomic challenges including instability in the financial
markets. These challenges have impacted the global economy, the capital markets, our operating costs
and global demand for our products. The results of these challenges include continued higher material
and oil-related costs, liquidity strain on our suppliers, decreased consumer confidence and reduced
consumer discretionary spending. We expect these conditions to continue in the foreseeable future.
Competition in the home appliance industry is intense in all global markets we serve. In addition to
our traditional competitors such as Electrolux, GE, and Kenmore in North America, there has been an
emergence of strong global competitors such as LG, Bosch Siemens, Samsung, and Haier. In each
geographic region, our customer base is consolidated and characterized by large, sophisticated trade
customers who have many choices and demand for competitive products, services and prices.
We believe that our acquisition of Maytag Corporation (“Maytag”) on March 31, 2006, coupled with
productivity and cost controls, new innovative product introductions, and improved product price/mix
will enhance our ability to respond to these competitive conditions.
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On March 31, 2006, we completed 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 $1.9 billion, including approximately $848 million of cash and
approximately 9.7 million shares of common stock. The results of Maytag’s operations have been
included in our Consolidated Financial Statements as of April 1, 2006.
During 2007 and 2006, we completed certain divestitures associated with businesses acquired with the
Maytag acquisition.