Whirlpool Corporation Reports Second-Quarter Results

Earnings Per Diluted Share of $1.53

BENTON HARBOR, Mich., July 23 /PRNewswire-FirstCall/ -- Whirlpool
Corporation (NYSE: WHR) announced today that second-quarter earnings from
continuing operations of $117 million decreased 27 percent to $1.53 per
diluted share compared to $161 million, or $2.00 per diluted share reported
during the previous year's quarter. Revenue of $5.1 billion for the quarter
increased 5 percent from the $4.9 billion reported in the second quarter of
2007.
(Logo: http://www.newscom.com/cgi-bin/prnh/20040202/DETU004LOGO )
"Whirlpool made solid progress toward improving operating results from
first-quarter levels despite an increasingly challenging economic
environment," said Jeff M. Fettig, chairman and chief executive officer of
Whirlpool Corporation. "The cost inflation facing our business is
significant, and we continue to take steps to address this challenge."
Net earnings for the quarter reflected challenging macroeconomic
conditions in the company's U.S. business, as industry unit demand declined
approximately 8 percent compared to the prior year. Operating profit totaled
$203 million compared with $247 million in the prior year. Second-quarter
operating results were unfavorably impacted by significantly higher material
and oil-related costs, lower U.S. industry unit volume, and an increase in
restructuring costs. These unfavorable impacts were partially offset by
productivity initiatives and improved results within the company's Latin
American operations.
SECOND-QUARTER REGIONAL REVIEW
Whirlpool North America second-quarter sales of $2.9 billion declined 4
percent from the prior year. U.S. industry unit shipments of major appliances
(T7)* declined approximately 8 percent.
Operating profit of $101 million declined from $179 million reported in
the previous year. Significantly higher material and oil-related costs, lower
industry demand and increased selling, general and administrative expense due
primarily to increased brand investment were the primary factors affecting the
company's second-quarter operating profit. These factors were partially
offset by improved productivity and favorable product price/mix.
Based on current economic conditions, the company expects full-year 2008
U.S. industry unit shipments to decline approximately 6 percent to 7 percent
from 2007 levels versus the 5 percent to 6 percent decline previously
expected.
Whirlpool Europe reported second-quarter sales of $1.1 billion, a 17
percent increase from the prior year. Excluding the effects of currency,
sales increased 2 percent in the quarter. Overall industry demand during the
quarter declined approximately 2 percent from the prior year.
Operating profit decreased 1 percent to $50 million. Operating profit was
unfavorably impacted by higher material and oil-related costs. These
increased costs were partially offset by improved product price/mix and
productivity improvements during the quarter.
Based on current economic conditions in the European region, the company
continues to expect full-year 2008 industry unit shipments to decline 2
percent to 3 percent from 2007 levels.
Whirlpool Latin America net sales increased 22 percent to $1.0 billion.
Latin America sales results reflect strong demand for the company's innovative
products in the region. Excluding currency translation, sales for appliances
and compressors increased approximately 7 percent.
Operating profit totaled $133 million in the second quarter, increasing 40
percent from the prior year. Increased unit shipments, regional tax
incentives and strong productivity and cost controls were the main factors
behind the year-over-year increase.
Based on current economic conditions in Latin America, the company
continues to expect full-year 2008 industry unit shipments to rise 5 percent
to 8 percent from 2007 levels.
Whirlpool Asia reported second quarter sales of $178 million, increasing 9
percent from the prior year. Excluding the impact of currency, sales
increased approximately 8 percent predominantly due to higher volume in the
company's India operations.
The region reported an operating profit of $5 million during the quarter
compared with $2 million in the previous year. The year-over-year increase in
operating profit resulted from higher volume and favorable trends in
productivity and product price/mix. These favorable items were partially
offset by higher material costs.
The company continues to expect full-year 2008 industry unit shipments to
increase 5 percent to 10 percent from 2007 levels.
Outlook
"The challenges resulting from significant global commodity inflation have
persisted and, in many instances, accelerated," said Fettig. "We continue to
execute previously announced cost-based price increases and cost reduction
actions related to our global operating platform initiatives. These actions,
coupled with other productivity initiatives and bringing innovative new
products to the marketplace, are critical to our ability to offset the record
commodity and oil-related costs and lower industry demand."
For the full-year 2008, Whirlpool continues to expect earnings per diluted
share from continuing operations to be in the $7.00 to $7.50 range and to
generate $500 million to $550 million in free cash flow.**
* T7 refers to the following household appliance categories: washers,
dryers, refrigerators, freezers, dishwashers, ranges and compactors.
** A reconciliation of free cash flow, a non-GAAP financial measure, to
cash provided by continuing operations appears below under the heading
"Cash Flow Reconciliation."

NEW INNOVATIONS

-- The Maytag brand launched:
* Maytag EPIC z front-load washers and dryers in a new slate color.
The pair offers commercial grade components, high-performance and a
space-saving design. The dryer's efficient drying system takes
clothes from wet to dry in less than 30 minutes.

-- The KitchenAid brand launched:
* The industry's first 30-inch, five-burner gas cooktop. Part of the
new KitchenAid Architect Series II appliance collection, the new
cooktops include both 30- and 36-inch widths, each with five burners.
Full-width cast-iron grates allow easy movement of cookware on the
cooktop without the need to lift items from burner to burner.
* EQ dishwashers that provide optimal cleaning performance, enhanced
drying performance and noise reduction while also saving water and
energy. These exceptionally quiet dishwashers are 57 percent more
efficient than ENERGY STAR(R) standards, and have an efficiency
designation from the Consortium for Energy Efficiency (CEE), making
them eligible for energy rebates in select regions within the United
States.
* A double-drawer refrigerator/freezer combination within its current
refrigerator drawer collection. The combination refrigerator/freezer
drawer offers convenient access to ingredients, snacks and beverages.

-- The Jenn-Air brand launched:
* A new line of built-in refrigerators featuring an integrated through-
the-door ice and water dispenser option, a PUR(R) water filter,
storage bins with Advanced Climate Control technology and an enhanced
temperature management system. The new line features distinct
styling options and offers an overlay design option allowing
consumers to customize the refrigerator to blend with their kitchen
cabinetry.
* A wall-mount chimney hood in an oiled bronze finish, which combines
performance and style. The powerful chimney motor allows the hood to
operate efficiently, even with high-output gas burners that are the
staple of discerning cooks.

-- The Gladiator GarageWorks brand launched:
* 20-inch deep, mesh bottom GearLoft shelves designed to store large
seasonal items like coolers and boxes high on the garage wall,
allowing consumers to better utilize the upper wall space in the
garage.

-- Whirlpool Europe launched:
* Whirlpool brand NoFrost Fresh Control refrigerators designed to
preserve food freshness twice as long. The refrigerators feature
antibacterial protection, active humidity and temperature sensors.
* Whirlpool brand AquaSteam dishwashers, which create steam during the
wash cycle to offer the best cleaning performance, even on delicate
items. The steam feature softens dried-on soil and helps to eliminate
bacteria.
* Whirlpool brand steam-assisted ovens, which produce food that is
beautifully browned on the outside and juicy and tender on the
inside. 6th Sense technology in the oven manages the steam cooking
process by injecting the right amount of steam at the right time.
* Bauknecht Aqua refrigerator-freezer combinations with in-the-door
water dispensing that connects to the main water supply. These
refrigerators comply with the European A+ energy efficiency class and
are ideal for small kitchens.
* KitchenAid brand major appliances in Norway and Finland as part of
the brand's continued European introduction.

-- Whirlpool Latin America launched:
* Microwave accessories that enable the consumer to customize Brastemp
Maxi microwaves. The accessories include two colorful and creative
options of electrostatic stickers that are easily attached to and
removed from the door of the appliance.
* The Consul Well-Being line of split air conditioners featuring
antibacterial filters and four operating modes: refrigeration,
heating, ventilation and dehumidification.

-- Whirlpool Asia launched:
* Whirlpool brand Genius refrigerators in India featuring an ice maker
capable of making ice 30 percent faster and a vegetable drawer
designed to keep vegetables fresh for a longer period. The
refrigerator also comes equipped with a jumbo bottle rack,
antibacterial protection and an extra utility drawer for storing
items that do not need to be refrigerated.
* Whirlpool brand Fusion refrigerators in India featuring an emergency
light to provide light equivalent to a 40 watt bulb for two hours
during a power outage, and the ability to retain interior
temperatures for up to 17 hours during the prevalent power outages in
the region.
* Whirlpool brand Max microwaves in India offering a compact, rounded
microwave oven with large cooking capacity. The microwaves are
available in six vibrant colors and offer many features including:
crisp (for frying and baking), jet defrost and a child lock.

AWARDS AND ACCOMPLISHMENTS

-- Whirlpool Corporation was named one of the Top 50 Most Respected U.S.
Companies by the Reputation Institute.
-- Whirlpool Corporation was named one of the World's Most Ethical
Companies by Ethisphere magazine.
-- Whirlpool brand was named one of the 10 top greenest brands by U.S.
consumers, according to a recent BrandWeek magazine survey.
-- Whirlpool Corporation's third annual Habitat for Humanity(R) community
build, Whirlpool Building Blocks 2008, was announced in June. This
year's build is in Dallas from November 16 to 21 where nine homes will
be constructed in five days.
-- Whirlpool brand kicked off its Mother of Invention 2008 program. The
program encourages moms to submit their innovative ideas for a chance
at a Whirlpool-sponsored business grant. New to the program this year
is a "green" category that will recognize inventions that minimize the
impact on environmental resources.
-- In Germany, Bauknecht brand won four Plus X Seals, honoring products in
the categories of Innovation, Design, Ease of Use, Ecology and/or
Ergonomics. The award winning Bauknecht products were the Drawer
Refrigerators, the Microwave-Hood-Combination, Dishwashers with
PowerClean and Washing Machines with SuperEco.
-- At the ninth Annual Process Excellence Summit in London, Whirlpool
earned Honorary Mention (second place) in four different categories:
Best Project Contributing to Innovation, Best Fast Track Project, Best
Process Improvement in Manufacturing Project and Best Design for Six
Sigma Project.
-- In the Czech Republic, Whirlpool brand was awarded Reader's Digest
Trusted brand of the year 2008, in the Washer, Dishwasher and Dryer
categories.
-- KitchenAid brand received a gold award from Appliance DESIGN magazine
as part of its 21st annual "Excellence in Design" competition. The
KitchenAid Architect Series II built-in double oven received the gold
award in the Major Appliances/HVAC category. The advanced convection
oven's steam assist cooking, intuitive user interfaces and visual brand
language were all highlighted as award-winning features.
-- The Consul brand was selected as the Top of Mind brand in home
appliances and home electronics in a survey conducted by Amanha
magazine. Previously, the survey recognized the most named
refrigerator brand category, in which Consul was the title holder for
six consecutive years.
-- In Argentina, the Whirlpool brand was named Top of Mind by Clarin, the
newspaper with the largest circulation in Spanish in the world.
-- Whirlpool Corporation's compressor and cooling solutions business in
Latin America, Embraco, once again received the "Stars of Energy
Efficiency" Award, highlighting the excellence of an Embraco
compressor. The award is given by Alliance to Save Energy, a non-profit
coalition of business, government, environmental and consumer leaders
who promote the efficient and clean use of energy worldwide.

Cash Flow Reconciliation
The table below reconciles actual 2007 and 2008 and projected 2008 cash
provided by continuing operations determined in accordance with generally
accepted accounting principles (GAAP) in the United States to free cash flow,
a non-GAAP measure. Management believes that free cash flow provides
shareholders with a relevant measure of liquidity and a useful basis for
assessing the company's ability to fund its activities and obligations. There
are limitations to using non-GAAP financial measures, including the difficulty
associated with comparing companies that use similarly named non-GAAP measures
whose calculations may differ from the company's calculations. As defined by
the company, free cash flow is cash provided by continuing operations after
capital expenditures and proceeds from the sale of assets/businesses. The
projections shown here are based upon many estimates and are inherently
subject to change based on future decisions made by management and the board
of directors of the company, and significant economic, competitive and other
uncertainties and contingencies.

Six Months Ended 2008
(millions of dollars) June 30 Outlook
2008 2007
Cash provided/(used) by
continuing operations $35 $(6) $1,000 - $1,025

Capital expenditures (231) (202) (550) - (575)

Proceeds from sale of
assets/non-Maytag businesses 14 20 50 - 100
------ ------ ------ ------
Free Cash Flow $(182) $(188) $500 - $550

About Whirlpool Corporation
Whirlpool Corporation is the world's leading manufacturer and marketer of
major home appliances, with annual sales of approximately $19 billion, 73,000
employees, and 72 manufacturing and technology research centers around the
world. The company markets Whirlpool, Maytag, KitchenAid, Jenn-Air, Amana,
Brastemp, Consul, Bauknecht and other major brand names to consumers in nearly
every country around the world. Additional information about the company can
be found at http://www.whirlpoolcorp.com.
Whirlpool Additional Information:
This document contains forward-looking statements that speak only as of
this date. Whirlpool disclaims any obligation to update these statements.
Forward-looking statements in this document 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 Corporation'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 significant trade
customers, including Sears Holding Corporation in North America (accounting
for approximately 12% of Whirlpool's 2007 consolidated net sales of $19.4
billion) and the ability of these trade customers to maintain or increase
market share; (3) changes in economic conditions, including the strength of
the U.S. building industry and the level of interest rates; (4) the ability of
Whirlpool to achieve its business plans, productivity improvements, cost
control, leveraging of its global operating platform, and acceleration of the
rate of innovation; (5) 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; (6) the ability of suppliers of
critical parts, components and manufacturing equipment to deliver sufficient
quantities to Whirlpool in a timely and cost-effective manner; (7) our ability
to attract, develop and retain executives and other qualified employees; (8)
health care cost trends and regulatory changes that could increase future
funding obligations for pension and post retirement benefit plans; (9) the
cost of compliance with environmental and health and safety regulations; (10)
litigation including product liability and product defect claims; (11) the
impact of labor relations; (12) Whirlpool's ability to obtain and protect
intellectual property rights; (13) the ability of Whirlpool to manage foreign
currency fluctuations; and (14) global, political and/or economic uncertainty
and disruptions, especially in Whirlpool's significant geographic regions,
including uncertainty and disruptions arising from natural disasters or
terrorist attacks. Additional information concerning 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.

WHIRLPOOL CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF INCOME (UNAUDITED)
FOR THE PERIOD ENDED JUNE 30
(Millions of dollars, except per share data)

Three Months Ended Six Months Ended
-------------------- ------------------
2008 2007 2008 2007
------ ------ ------ ------

Net sales $5,076 $4,854 $9,690 $9,243

Expenses
Cost of products sold 4,324 4,121 8,324 7,882
Selling, general and administrative
(exclusive of intangible
amortization) 502 463 942 838
Intangible amortization 7 7 14 17
Restructuring costs 40 16 48 33
----- ----- ----- -----

Operating profit 203 247 362 473

Other income (expense)
Interest and sundry income (expense) (24) 2 (31) (3)
Interest expense (49) (49) (98) (99)
------ ------ ------ ------

Earnings from continuing operations
before income taxes and other
items 130 200 233 371

Income taxes 2 29 5 70
----- ----- ----- -----

Earnings from continuing operations
before equity earnings and
minority interests 128 171 228 301

Equity in income (loss) of affiliated
companies - (2) - (4)
Minority interests (11) (8) (17) (12)
------ ------ ------ ------

Earnings from continuing operations 117 161 211 285

Loss from discontinued operations,
net of tax of $0 and $3 for the
period ended June 30,2008 and
2007, respectively - - - (7)
------ ------ ------ ------

Net earnings available to
common stockholders $117 $161 $211 $278
====== ====== ====== ======

Per share of common stock
Basic earnings from continuing
operations $1.55 $2.04 $2.78 $3.62
Discontinued operations,
net of tax - - - (0.09)
------ ------ ------ ------

Basic net earnings $1.55 $2.04 $2.78 $3.53
====== ====== ====== ======

Diluted earnings from
continuing operations $1.53 $2.00 $2.74 $3.55
Discontinued operations,
net of tax - - - (0.09)
------ ------ ------ ------

Diluted net earnings $1.53 $2.00 $2.74 $3.46
====== ====== ====== ======

Dividends $.43 $.43 $.86 $.86
====== ====== ====== ======

Weighted-average shares
outstanding (in millions)
Basic 75.3 78.8 75.8 78.8
Diluted 76.3 80.5 76.9 80.2

WHIRLPOOL CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
(Millions of dollars, except per share data)

(Unaudited)
JUNE 30, DECEMBER 31,
2008 2007
----------- -----------
Assets

Current assets
Cash and equivalents $461 $201
Accounts receivable, net of allowance for
uncollectible accounts of $91 and $83 at
June 30, 2008 and December 31, 2007,
respectively 2,628 2,604
Inventories 2,996 2,665
Deferred income taxes 307 324
Other current assets 934 761
------ ------
Total current assets 7,326 6,555
------ ------

Other assets
Goodwill, net 1,745 1,760
Other intangibles, net of accumulated
amortization of $83 and $64 at June 30, 2008
and December 31, 2007, respectively 1,853 1,854
Other assets 628 628
------ ------
Total other assets 4,226 4,242
------ ------

Property, plant and equipment
Land 82 84
Buildings 1,286 1,226
Machinery and equipment 8,316 7,861
Accumulated depreciation (6,397) (5,959)
------ ------
Total property, plant and equipment 3,287 3,212
------ ------
Total assets $14,839 $14,009
======== ========

Liabilities and stockholders' equity

Current liabilities
Accounts payable $3,399 $3,260
Accrued expenses 599 633
Accrued advertising and promotions 429 497
Employee compensation 385 444
Notes payable 562 298
Current maturities of long-term debt 203 127
Other current liabilities 602 634
------ ------
Total current liabilities 6,179 5,893
------ ------

Noncurrent liabilities
Long-term debt 1,967 1,668
Postretirement benefits 1,067 1,061
Pension benefits 702 725
Other liabilities 613 682
------ ------
Total noncurrent liabilities 4,349 4,136
------ ------

Commitments and contingencies

Minority interests 98 69
------ ------

Stockholders' equity
Common stock, $1 par value, 250 million
shares authorized, 104 million and 103
million shares issued at June 30, 2008
and December 31, 2007, respectively,
74 million and 76 million shares outstanding
at June 30, 2008 and December 31, 2007,
respectively 104 103
Additional paid-in capital 2,008 1,993
Retained earnings 3,849 3,703
Accumulated other comprehensive income (loss) 21 (270)
Treasury stock, 30 million shares and 27
million shares at June 30, 2008 and
December 31, 2007, respectively (1,769) (1,618)
------ ------
Total stockholders' equity 4,213 3,911
------ ------

Total liabilities and stockholders' equity $14,839 $14,009
======== ========

WHIRLPOOL CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
SIX MONTHS ENDED JUNE 30
(Millions of dollars)

2008 2007
--------- ---------
Operating activities of continuing operations
Net earnings $211 $278
Loss from discontinued operations - 7
------ ------
Earnings from continuing operations 211 285

Adjustments to reconcile earnings from continuing
operations to cash provided by (used in)
operating activities from continuing operations:
Depreciation and amortization 310 292
Gain on disposition of assets (6) (12)
Equity in losses of affiliated companies, less
dividends received - 4
Changes in assets and liabilities, net of business
acquisitions:
Accounts receivable 70 (9)
Inventories (230) (429)
Accounts payable (29) 162
Restructuring charges, net of cash paid (2) (61)
Taxes deferred and payable, net (27) 38
Accrued pension (33) (9)
Employee compensation (69) (45)
Other (160) (222)
------- -------

Cash provided by (used in) continuing
operating activities 35 (6)
------ -------

Investing activities of continuing operations
Capital expenditures (231) (202)
Proceeds from sale of assets 14 20
Proceeds from sale of Maytag adjacent businesses - 100
------ ------

Cash used in investing activities of
continuing operations (217) (82)
------- -------

Financing activities of continuing operations
Proceeds from borrowings of long-term debt 501 3
Net proceeds from short-term borrowings 255 261
Purchase of treasury stock (151) (101)
Repayments of long-term debt (128) (8)
Dividends paid (65) (68)
Common stock issued 7 51
Other 2 10
------ ------

Cash provided by financing activities
of continuing operations 421 148
------ ------

Cash provided by discontinued operations -
operating activities - 6
------ ------
Effect of exchange rate changes on cash and
equivalents 21 15
------ ------
Increase in cash and equivalents 260 81
Cash and equivalents at beginning of period 201 262
------ ------
Cash and equivalents at end of period $461 $343
====== ======

SOURCE Whirlpool Corporation

Media: Monica Teague, +1-269-923-7405, Monica.Teague@Whirlpool.com; Financial:
Greg Fritz, +1-269-923-2641, both of Whirlpool Corporation