Whirlpool 2011 Annual Report Download - page 42

40
We use foreign currency forward contracts, currency
options and currency swaps to hedge the price risk asso-
ciated with firmly committed and forecasted cross-border
payments and receipts related to ongoing business and
operational financing activities. Foreign currency contracts
are sensitive to changes in foreign currency exchange
rates. At December 31, 2011, a 10% favorable or unfavorable
exchange rate movement in each currency in our portfolio
of foreign currency contracts would have resulted in an
incremental unrealized gain or loss of approximately $185
million. Consistent with the use of these contracts to neu-
tralize the effect of exchange rate fluctuations, such unre-
alized losses or gains would be offset by corresponding
gains or losses, respectively, in the re-measurement of the
underlying exposures.
We enter into commodity swap contracts to hedge the
price risk associated with firmly committed and forecasted
commodities purchases, the prices of which are not fixed
directly through supply contracts. As of December 31, 2011,
a 10% favorable or unfavorable shift in commodity prices
would have resulted in an incremental gain or loss of approx-
imately $32 million, respectively, related to these contracts.
We occasionally enter into interest rate swaps to hedge
interest rate risk associated with debt. As of December 31,
2011, a 10% favorable or unfavorable shift in treasury bond
yields would have resulted in an incremental gain or loss
of approximately $4 million, respectively, related to these
contracts.
FORWARD-LOOKING STATEMENTS
This document contains forward-looking statements about
Whirlpool Corporation and its consolidated subsidiaries
(“Whirlpool”) that speak only as of this date. Whirlpool dis-
claims any obligation to update these statements. Forward-
looking statements in this document may include, but are
not limited to, statements regarding expected earnings per
share, cash flow, productivity and material and oil-related
prices. Many risks, contingencies and uncertainties could
cause actual results to differ materially from Whirlpool’s
forward-looking statements. Among these factors are:
(1) intense competition in the home appliance industry
reflecting the impact of both new and established global
competitors, including Asian and European manufacturers;
(2) Whirlpool’s ability to continue its relationship with sig-
nificant trade customers and the ability of these trade cus-
tomers to maintain or increase market share; (3) changes
in economic conditions which affect demand for our prod-
ucts, including the strength of the building industry and the
level of interest rates; (4) inventory and other asset risk;
(5) global, political and/or economic uncertainty and dis-
ruptions, especially in Whirlpool’s significant geographic
regions, including uncertainty and disruptions arising from
natural disasters or terrorist attacks; (6) impact of the
European debt crisis; (7) the ability of Whirlpool to achieve
its business plans, productivity improvements, cost control,
price increases, leveraging of its global operating platform,
and acceleration of the rate of innovation; (8) fluctuations in
the cost of key materials (including steel, oil, plastic, resins,
copper and aluminum) and components and the ability of
Whirlpool to offset cost increases; (9) litigation and legal
compliance risk and costs, especially costs which may be
materially different from the amount we expect to incur or
have accrued for; (10) product liability and product recall
costs; (11) the effects and costs of governmental investiga-
tions or related actions by third parties; (12) Whirlpool’s
ability to obtain and protect intellectual property rights;
(13) the ability of suppliers of critical parts, components and
manufacturing equipment to deliver sufficient quantities to
Whirlpool in a timely and cost-effective manner; (14) health
care cost trends, regulatory changes and variations between
results and estimates that could increase future funding
obligations for pension and postretirement benefit plans;
(15) information technology system failures and data secu-
rity breaches; (16) the impact of labor relations; (17) our
ability to attract, develop and retain executives and other
qualified employees; (18) changes in the legal and regulatory
environment including environmental and health and safety
regulations; and (19) the ability of Whirlpool to manage
foreign currency fluctuations. Additional information con-
cerning these and other factors can be found in Whirlpool
Corporation’s filings with the Securities and Exchange
Commission, including the most recent annual report on
Form 10-K, quarterly reports on Form 10-Q, and current
reports on Form 8-K.