subsidiaries in Hungary, Poland, the Czech Republic, Slovakia, Greece, Romania, Bulgaria, Latvia, Estonia, Lithuania, Croatia, and Morocco, and representative offices in Russia, Ukraine, Kazakhstan, and Slovenia. The Company markets a full line of products under theWhirlpool,KIC, andIgnis brand names in South Africa. Whirlpool's European operations also sell products carrying theWhirlpool,Bauknecht, andIgnis brand names to distributors and dealers in Africa and the Middle East. The Company has manufacturing facilities in France, Germany, Italy, Poland, Slovakia, South Africa, and Sweden.

        In Latin America, the Company markets and distributes its major home appliances through regional networks under theWhirlpool,Brastemp,Consul, andEslabon de Lujo brand names. Appliance sales and distribution in Brazil, Argentina, and Chile are managed by the Company's Brazilian subsidiary, and in Bolivia, Peru, Paraguay, and Uruguay through distributors. Appliance sales and distribution in Central American countries, the Caribbean, Venezuela, Colombia, and Ecuador are managed by Whirlpool's North America region and through distributors. In Latin America, the Company has manufacturing facilities in Brazil.

        In Asia, the Company has organized the marketing and distribution of its major home appliances into four operating groups: (1) Greater China, which includes mainland China, Hong Kong, and Taiwan; (2) South Asia, which includes India, Bangladesh, Sri Lanka, and Nepal; (3) Oceania, which includes Australia, New Zealand, and Pacific Islands; and (4) Southeast Asia, which includes Thailand, Singapore, Malaysia, Indonesia, Vietnam, the Philippines, Korea, and Japan. The Company markets and sells its products in Asia under theWhirlpool,KitchenAid,Bauknecht, andIgnis brand names by a combination of direct sales to appliance retailers and chain stores, and through full-service distributors to a large network of retail stores. In Asia, the Company has manufacturing facilities in China and India.

Competition

        Competition in the home appliance industry is intense. In addition to traditional competitors such as Electrolux, GE, Kenmore, and Maytag, there are new and expanding foreign competitors such as LG, Bosch, Samsung, Fisher & Paykel, and Haier. Moreover, the U.S. customer base is characterized by large, sophisticated trade customers who have many choices and demand competitive products, services and prices. In most major markets throughout the world, 2005 was a challenging year for the industry with continued unprecedented rising costs in the areas of steel and other metals, oil based materials such as resins, and transportation. Competition in the Company's markets is based upon a wide variety of factors, including, principally, cost, selling price, distribution and other financial incentives (such as cooperative advertising, co-marketing funds, sales person incentives, volume rebates, and terms), performance, innovation, product features, and quality. The Company believes that it can best compete in the current environment by increasing productivity, lowering costs, introducing innovative new products, enhancing trade customer and consumer value with its product offerings, continuing to expand its global footprint, expanding trade distribution channels and, where appropriate, taking other efficiency-enhancing measures.

        In addition, on Form 10-K/AAugust 22, 2005, as discussed below, Whirlpool entered into an agreement to acquire Maytag Corporation ("Maytag"), for which regulatory approval is pending. Whirlpool believes that its combination with Maytag will enhance its ability to respond to these competitive conditions, and will benefit trade customers and consumers of the combined company by generating significant cost savings that will enable it to continue to offer competitive prices across a wide array of products as well as increased quality and innovation.

Other Information

        The Company is generally not dependent upon any one source for raw materials or purchased components essential to its business. In those areas where a single supplier is used, alternative sources are generally available and can be developed within the normal manufacturing environment, although some unanticipated costs may be incurred in transitioning to a new supplier where a prior single supplier is

abruptly terminated. While there have been continued significant cost pressures in some areas, such as metals and oil based materials, and significant demand for certain components, the Company believes such raw materials and components will be available in adequate quantities to meet anticipated production schedules.

        Patents presently owned by the Company are considered, in the aggregate, to be valuable to the Company. The Company is the owner of a number of trademarks in the U.S. and foreign countries. The most important trademarks owned by the Company in North America areWhirlpool,KitchenAid,Estate,Roper, andAcros. The most important trademarks owned by the Company in Europe areWhirlpool,Bauknecht, andIgnis. In Latin America, the most important trademarks owned by the Company areWhirlpool,Brastemp, andConsul. The most important trademark owned by the Company in Asia isWhirlpool. The Company also receives royalties from licensing its trademarks to third parties to sell and service certain products bearing theWhirlpool andKitchenAid brand names.

        Expenditures for Company-sponsored research and development relating to new products and the improvement of existing products were approximately $339 million in 2005, $315 million in 2004, and $285 million in 2003.

        The Company's manufacturing facilities are subject to numerous laws and regulations designed to protect or enhance the environment, many of which require federal, state, or other governmental licenses and permits with regard to wastewater discharges, air emissions, and hazardous waste management. The Company's policy is to comply with all such laws and regulations. Where laws and regulations are less restrictive, the Company has established and is following its own standards consistent with its commitment to environmental responsibility.

        The Company believes that it is in compliance in all material respects with all presently applicable federal, state, local, and other governmental provisions relating to environmental protection in the countries in which it has manufacturing operations. Compliance with these environmental laws and regulations has not had a material effect on capital expenditures, earnings, or the Company's competitive position. Capital expenditures and expenses for manufacturing operations directly attributable to compliance with these environmental provisions worldwide amounted to approximately $28 million in 2005, $28 million in 2004, and $26 million in 2003. It is estimated that in 2006, environmental capital expenditures and expenses for manufacturing operations will be approximately $27 million. Capital expenditures and expenses for product related environmental activities were not material in any of the past three years and are not expected to be material in 2006.

        Globally, the entire major home appliance industry, including the Company, must contend with the adoption of stricter governmental energy and environmental standards to be phased in over the next several years. These include the general phase-out of ozone depleting chemicals used in refrigeration and energy standards rulemakings for other selected major appliances produced by the Company. Compliance with these various standards, as they become effective, will require some product redesign. However, the Company believes, based on its understanding of the current state of proposed regulations, that it should be able to develop, manufacture, and market products that comply with these regulations. Additionally, on February 13, 2003, the Waste Electrical and Electronic Equipment Directive ("WEEE") was published in Europe. Among other provisions, WEEE stipulates that "producers" be responsible for the cost of collection, disposal, and recycling of waste for many electrical and electronic products as of August 13, 2005. For more information on WEEE, see Note 2 to the Consolidated Financial Statements contained in the Financial Supplement to this report.

        The Company has been notified by state and federal environmental protection agencies of its possible involvement in a number of "Superfund" sites in the United States. However, based upon evaluation of the facts and circumstances relating to these sites by the Company and its technical consultants, the Company does not presently anticipate any material adverse effect upon the Company's earnings, financial condition,

or competitive position arising out of the resolution of these matters or the resolution of any other known governmental proceeding regarding environmental protection matters.

        For information about the challenges and risks associated with the Company's foreign operations, see "Risks Relating to our Annual ReportBusiness" under Item 1A below.

        For certain other financial information concerning the Company's business segments and foreign and domestic operations, see Notes 1 and 15 to the Consolidated Financial Statements contained in the Financial Supplement to this report.

        For information on the Company's global restructuring plans, see Note 11 to the Consolidated Financial Statements contained in the Financial Supplement to this report.

        For information on product recalls, see Note 12 to the Consolidated Financial Statements contained in the Financial Supplement to this report.

Pending Maytag Acquisition

        On August 22, 2005, Whirlpool entered into a definitive merger agreement with Maytag to acquire all outstanding shares of Maytag common stock. The aggregate transaction value, including the payment to Maytag stockholders of approximately $850 million in cash and between 9.2 million and 11.3 million shares of Whirlpool common stock and assumption of approximately $972 million of Maytag debt (based on Maytag stock, exercisable stock options, and debt reported outstanding as of December 31, 2005), is approximately $2.7 billion. The number of shares of Whirlpool common stock to be issued will depend on the volume weighted average trading prices of Whirlpool common stock during a twenty trading day period ending shortly before completion of the merger. The transaction was approved by Maytag shareholders on December 22, 2005 and is pending regulatory clearance as discussed below.

        Whirlpool has sufficient resources to finance the acquisition. The acquisition and upcoming debt maturities of the combined company are expected to be financed initially through commercial paper supported by existing bank agreements and with new committed bank facilities as discussed in "Management's Discussion and Analysis" contained in the Financial Supplement to this report. The Company expects to eventually refinance a portion of its commercial paper in the capital markets.

        Whirlpool currently expects the merger with Maytag to generate approximately $300 million to $400 million of annual pre-tax cost savings by the third year following completion of the merger. Efficiencies are expected to come from all areas across the value chain, including product manufacturing and marketing, global procurement, logistics, infrastructure and support areas. Achieving these efficiencies will require one-time costs and capital investments currently estimated to be in the range of $350 million to $500 million, a majority of which currently are anticipated to be capitalized or accrued in purchase accounting. Whirlpool currently anticipates incurring these costs during the first two years following completion of the merger.

        The merger is subject to clearance under the Hart-Scott-Rodino Antitrust Improvements Act, and other customary closing conditions. On December 1, 2005, Whirlpool and Maytag announced that they had certified substantial compliance with the Antitrust Division of the Department of Justice in response to a request for additional information ("second request") and had agreed not to close the proposed merger before February 27, 2006, without the Antitrust Division's concurrence, recognizing that the Antitrust Division could request additional time for review. On February 13, 2006, Whirlpool and Maytag announced that they agreed with the Antitrust Division to a limited extension of time to complete the review of the proposed merger. The companies have agreed not to close the transaction before March 30, 2006 without the Antitrust Division's concurrence.

        Whirlpool and Maytag are working closely with the Department of Justice and continue to cooperate fully with its investigation and respond promptly to its inquiries.

        On August 22, 2005, Whirlpool paid Maytag $40 million to reimburse Maytag for its payment of a fee to terminate its prior merger agreement with Triton Acquisition Holding Co. Whirlpool has agreed to pay up to $15 million to assist Maytag in retaining key employees while the merger is pending. Whirlpool also has agreed to pay Maytag a "reverse break-up fee" of $120 million under certain circumstances if the transaction cannot be closed due to an inability to obtain regulatory clearance.

Executive Officers of the Registrant

        The following table sets forth the names of the Company's executive officers on January 1, 2006, the positions and offices with the Company held by them on such date, the year they first became executive officers, and their ages on January 1, 2006:

        Each of the executive officers named above was elected to serve in the office indicated until the first meeting of the Board of Directors following the annual meeting of stockholders in 2006 and until his successor is chosen and qualified or until his earlier resignation or removal. Each of the executive officers of the Company has held the position set forth in the table above or has served the Company in various executive or administrative capacities for at least the past five years, except for (a) Mr. Swift, who, prior to joining the Company in October 2001, for the previous 20 years held various executive or administrative positions with the Eastman Kodak Company (photographic equipment and supplies), the most recent being President, Kodak Professional Group, (b) Mr. Templin, who, prior to joining the Company in July 2003, for the previous 12 years held various financial and executive positions with Kimball International, Inc. (office furniture), the most recent being Vice President, Finance and Chief Accounting Officer, and (c) Mr. Hu, who, prior to joining the Company in January 2004, for the previous seven years held various executive or administrative positions with Philips Electronics N.V., the most recent being Senior Vice President and General Manager, Philips Lighting East Asia.

Available Information

        Financial results and investor information (including Whirlpool's Form 10-K, 10-Q and 8-K reports) can be accessed through Whirlpool's website atwww.whirlpoolcorp.com; click on the "Investors" tab, and then click on "SEC Filings." Copies of Whirlpool's Form 10-K, 10-Q, and 8-K reports, as well as amendments to them, are available free of charge through Whirlpool's website on the same day they are filed with, or furnished to, the Securities and Exchange Commission.

ITEM 1A.Risk Factors.

        This report contains statements referring to Whirlpool that are not historical facts and are considered "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements, which are intended to take advantage of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, are based on current projections about operations, industry conditions, financial condition, liquidity, and the impact of the pending merger with Maytag. Words such as "may," "will," "should," "plan," "predict," "potential," "anticipate," "estimate," "expect," "project," "intend," "believe," "may impact," "on track," and words and terms of similar substance used in connection with any discussion of future operating or financial performance, the merger, or our businesses, identify forward-looking statements. In addition, any statements that refer to expectations, projections, or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. Those statements are not guarantees and are subject to risks, uncertainties, and assumptions that are difficult to predict. Therefore, actual results could differ materially and adversely from these forward-looking statements. These risks and uncertainties include, but are not limited to, the following:

Risks Relating to Our Business

We face intense competition in the home appliance industry and failure to successfully compete may negatively affect our business and financial performance. Each of our business segments operates in a highly competitive business environment and faces intense competition from a growing number of competitors, including an increasing number of foreign-based competitors, which have strong consumer brand equity. Several, such as LG, Samsung, and Bosch, are large well-established companies that rank among the Global Fortune 150 and have demonstrated a commitment to North America through competitive imports and North American production. The elements of competition include cost, selling price, distribution and other financial incentives (such as cooperative advertising, co-marketing funds, sales person incentives, volume rebates, and terms), performance, innovation, product features, and quality. In particular, in the past, our competitors, especially global competitors with low-cost sources of supply outside the United States, have aggressively priced their products and/or introduced new products in order to increase market share. If we are unable to successfully compete in this highly competitive environment, our business and financial performance could be negatively affected.

The loss of or decline in sales to any of our key trade customers, including Sears, Lowe's, and Best Buy, could adversely affect our financial performance. We sell to a customer base characterized by sophisticated and powerful trade customers that have significant leverage as buyers over their suppliers. Most of our products are sold through purchase orders and not through long-term contracts, which facilitates the trade customers' ability to change volume among suppliers to obtain competitive terms. As the trade customers continue to consolidate and become larger, our trade customers may seek to use their position to improve their profitability, including through improved efficiency, lower pricing and increased promotional programs. If we are unable to respond by meeting their requirements, our profitability or volume growth could be negatively affected. We have been a principal supplier of home appliances to Sears for many years. In 2005, approximately 16% of Whirlpool's consolidated net sales of $14 billion were attributable to Sears. Although no other customer accounted for greater than 10% of consolidated net sales in 2005, other customers may account for more than 10% of our consolidated net sales in future periods. It should also be noted Maytag has reported that in 2005, approximately 10% of Maytag's consolidated net sales were attributable to Sears and approximately 14% to Home Depot. The loss of, or decline in volume of, sales to Sears, Lowe's, Best Buy or any other trade customers to which we sell a significant amount of products could adversely affect our financial performance. Additionally, any loss of market share by any such trade customers could have a negative impact on our financial performance.

Our business could be adversely affected by changes in economic conditions.Demand for our products is generally affected by a number of economic factors, including, but not limited to, gross domestic product,

consumer interest rates, consumer confidence, retail trends, housing starts, sales of existing homes, and the level of mortgage refinancing. A decline in economic activity in the United States and any other markets in which we operate could adversely affect our financial condition and results of operation.

Our financial performance could be adversely affected by an inability to effectively execute and manage our business objectives. The highly competitive nature of our industry requires that we effectively execute and manage our business including our global operating platform initiative, which aims to reduce costs, drive productivity and quality improvements and accelerate our rate of innovation. Our inability to effectively control costs and drive productivity improvements could affect our profits. In addition, our failure to provide high-quality, innovative products could adversely affect our ability to maintain or increase our sales, which could negatively affect our revenues and overall financial performance. Additionally, our success is dependent on anticipating changes in customer preferences and on successful new product and process development and product relaunches in response to such changes. Our future results and our ability to maintain or improve our competitive position will depend on our capacity to gauge the direction of our key markets and upon our ability to successfully and timely identify, develop, manufacture, market and sell new or improved products in these changing markets.

Fluctuations and volatility in the cost of raw materials and purchased components could adversely affect our profits. The primary materials used to produce and manufacture our products are steel, oil, plastic resins, and base metals such as copper and zinc. On a global and regional basis, the sources and prices of those materials and components are susceptible to significant price fluctuations due to supply/demand trends, transportation costs, government regulations and tariffs, changes in currency exchange rates, price controls, the economic climate, and other unforeseen circumstances. During 2005, our business incurred approximately $530 million of higher material and oil-related costs. Continued significant increases in these and other costs in the future could materially affect our profits.

Our global business performance could be affected by the ability of suppliers to deliver parts, components and manufacturing equipment to our manufacturing facilities. We use a wide range of materials and components in the global production of our products and use numerous suppliers to provide materials and components. We generally do not have guaranteed supply arrangements with our suppliers and some key parts may be available only from a single supplier or a limited group of suppliers. Operations at suppliers' facilities are subject to disruption for a variety of reasons, including but not limited to work stoppages, fire, earthquake, flooding, or other natural disasters. Such disruption could interrupt our ability to manufacture certain products. Any significant disruption could negatively impact our revenue and earnings performance.

Our financial results could be adversely affected by significant differences between actual results and estimates of the amount of future funding for our pension plans and post-retirement health care benefit programs, significant changes in funding assumptions, or significant increases in funding obligations if pending U.S. pension reform legislation is adopted. We have both funded and unfunded noncontributory defined benefit pension plans that cover substantially all of our North American employees and certain foreign employees. We also have unfunded post-retirement health care benefit plans for eligible retired employees. The funding obligations for our U.S. pension plans, which are our principal pension plans, are governed by the Employee Retirement Income Security Act of 1974 (ERISA).

        As of December 31, 2005, our projected benefit obligations under our pension plans and post-retirement health care benefit programs exceeded the fair value of plan assets by an aggregate of approximately $1.28 billion ($576 million of which was attributable to pension plans and $701 million to post-retirement health care benefits). Estimates for the fiscalamount and timing of the future funding obligations of these pension plans and post-retirement health care benefit plans are based on various assumptions. These include, among others, the discount rates, expected long-term rate of return on plan assets and health care cost trend rates. These assumptions are subject to change based on interest rates on high quality bonds, stock and bond market returns, and medical assets and health care cost trend rates.

Significant differences in results or significant changes in assumptions may materially affect our post-retirement obligations and related future expense.

        Pension reform legislation is pending in Congress including, among other things, proposals for new funding targets, changes to Pension Benefit Guaranty Corporation premiums, and restrictions on nonqualified benefit payments to certain employees in situations where the plan fails to meet certain minimum funding thresholds. If any of these legislative proposals are enacted into law, our funding obligations to the U.S. pension plans could be increased, which could adversely affect our financial results.

        It should be noted that as of December 31, 2005, Maytag's reported projected benefit obligations under its pension plans and post-retirement health care benefit programs exceeded the fair value of plan assets by an aggregate of approximately $1.33 billion ($580 million of which was attributable to pension plans and $751 million to post-retirement health care programs).

We may be adversely affected by environmental, and health and safety laws and regulations. We are subject to various laws and regulations relating to the protection of the environment and human health and safety. We incur and will continue to incur capital and other expenditures to comply with these regulations. Complying with recently passed and enacted regulations in Europe such as the WEEE directive may increase our costs and adversely affect our ability to sell certain products in Europe, which could negatively affect our financial performance. Additionally, we could be subjected to future liabilities, fines, or penalties, or the suspension of product production for failing to comply with environmental regulations. If cleanup obligations arise at any of our manufacturing sites or if more stringent environmental laws are imposed in the future, we could be adversely affected.

We may be adversely affected by product liability claims.We face an inherent business risk of exposure to product liability claims in the event that the use of any of our products results in personal injury or property damage. In the event that any of our products proves to be defective, we may be required to recall or redesign such products. There can be no assurance that our insurance coverage against certain product liability claims will continue to be available on acceptable terms or that such coverage will be adequate for liabilities actually incurred. We also face certain class action litigation regarding allegedly defective products that are not covered by insurance. A successful claim in excess of, or outside of, our available insurance coverage may have a material adverse effect on our financial performance. In addition, any claim or product recall that results in significant adverse publicity may also negatively affect our business, financial condition or results of operations.

        Lastly, we are currently investigating a supplier-related quality and potential product safety problem that may affect up to 3.5 million appliances manufactured between 2000 and 2002. We currently estimate that the potential cost from this matter could be in the range of $0 to $235 million, depending on numerous factors, such as whether some or all of the appliances must be repaired or replaced, whether the supplier will bear the cost of any corrective action, whether we will initially bear the cost of any corrective action, and if we initially bear the cost of any corrective action, whether we will be successful in recovering those costs from the supplier at a later date. In addition, we could incur other costs arising out of this matter, which cannot currently be estimated but could be material.

Our global business could be negatively impacted by a deterioration in labor relations. As of December 31, 2005, we had approximately 66,000 employees. Of those employees, approximately 60% are represented by various labor unions with separate collective bargaining agreements. Our current collective bargaining agreements generally have three year terms. Due to the large number of collective bargaining agreements, we are periodically in negotiations with certain of the unions representing our employees. We cannot be assured that at some point we will not be subject to work stoppages by some of our employees and, if such events were to occur, that there would not be a material adverse effect on our business, financial condition or results of operations. Further, we cannot be assured that we will be able to renew the various collective bargaining agreements on the same or similar terms, or at all, which could affect our business, financial condition or results of operation.

Our intellectual property rights are valuable, and any inability to protect them could reduce the value of our products, services, and brands. We consider our intellectual property rights, including patents, trademarks and licensing agreements, to be a significant and valuable aspect of our business. We attempt to protect our intellectual property rights through a combination of patent, trademark, copyright and trade secret laws, as well as licensing agreements and third party nondisclosure and assignment agreements. Our failure to obtain or adequately protect our trademarks, products, new features of our products, or our processes may diminish our competitiveness.

        We have applied for patent protection in the United States and other jurisdictions with respect to certain innovative and new products, product features, and processes. We cannot be assured that any of our patent applications will be approved by the U.S. Patent and Trademark Office or any other jurisdiction. Additionally, the patents we own could be challenged, invalidated or designed around by others and may not be of sufficient scope or strength to provide us with any meaningful protection or commercial advantage. Further, the laws of certain foreign countries in which we do business or contemplate doing business in the future do not recognize intellectual property rights or protect them to the same extent as do the laws of the United States. As a result, our competitive advantage with respect to our products, services, and brands could be reduced in foreign jurisdictions, which could adversely affect our financial performance.

        Moreover, while we do not believe that any of our products infringe the valid intellectual property rights of third parties, we may be unaware of intellectual property rights of others that may cover some of our technology, brands, products or services. Any litigation regarding patents or other intellectual property could be costly and time-consuming and could divert the attention of our management and key personnel from our business operations. Claims of intellectual property infringement might also require us to enter into costly license agreements. We also may be subject to significant damages or injunctions against development and sale of certain products.

Foreign currency fluctuations may affect our financial performance.We generate a significant portion of our revenue and incur a significant portion of our expenses in currencies other than the U.S. dollar. The value of our revenue, earnings and cash flows from our foreign operations are affected by changes in the functional currencies of those operations. We use currency forwards and options to manage our foreign currency transaction exposures but do not directly hedge our exposure on translation of reported earnings. As a result, we cannot completely eliminate our exposure to foreign currency fluctuations, which may adversely affect our financial performance. In addition, because our consolidated financial results are reported in dollars, if we generate sales or earnings in other currencies the translation of those results into dollars can result in a significant increase or decrease in the amount of those sales or earnings.

If we cannot manage the additional challenges presented by our international operations, our financial performance may suffer. For the year ended December 31, 2004 (the “Original Filing”),2005, we derived approximately 40% of our net sales from outside of North America, including 14% in Latin America, 3% in Asia, and 22% in Europe. We expect that international sales will continue to account for a significant percentage of our net sales in the foreseeable future. Accordingly, we face numerous risks associated with conducting international operations, any of which was filed withcould negatively affect our financial performance. These risks include the Securitiesfollowing:

•

Changes in foreign country regulatory requirements;



•

Various import/export restrictions and Exchange Commission (the “SEC”) on March 4, 2005, is being filedthe availability of required import/export licenses;



•

Imposition of foreign tariffs and other trade barriers;



•

Political, legal and economic instability;



•

Foreign currency exchange rate fluctuations;



•

Inflation;

•

Work stoppages and disruptions in the shipping of imported and exported products;



•

Government price controls;



•

Extended payment terms and the ability to amend the “Financial Supplementcollect accounts receivable; and



•

The ability to 2004 Annual Report on Form 10-K, and to 2005 Proxy Statement” responsive to Item 8 as follows:

repatriate cash.

As a result of these amendments, (1) the certifications pursuant    Pursuant to Section 302 and Section 906404 of the Sarbanes-Oxley Act of 2002 filed and furnished, respectively, as exhibits to the Original Filing, have been re-executedrules and re-filed asregulations adopted pursuant thereto, Whirlpool included a report of management's assessment of the dateeffectiveness of its internal control over financial reporting as part of this Form 10-K/A;report. Whirlpool's independent registered public accounting firm also attested to, and (2) a revised Consentreported on, management's assessment of the effectiveness of internal control over financial reporting. Management's report and the independent registered public accounting firm's attestation report are included in Whirlpool's Consolidated Financial Statements contained in the Financial Supplement to this report under the captions entitled "Management's Report on Internal Control Over Financial Reporting" and "Report of Independent Registered Public Accounting Firm dated March 11, 2005 to cover bothFirm" and are incorporated herein by reference.

        Changes in internal control over financial reporting.    There were no changes in the audit report relating to our consolidated financial statements and the audit report relating to ourCompany's internal control over financial reporting datedthat occurred during the fourth quarter of 2005 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

ITEM 9B.Other Information.

        There was no information required to be disclosed in a report on Form 8-K during the fourth quarter of 2005 that was not previously reported.

PART III

ITEM 10.Directors and Executive Officers of the Registrant.

        Information regarding the Company's executive officers is included in Item 1 of Part I of this report.

        Information regarding the background of the directors, matters related to the Audit Committee, and Section 16(a) compliance can be found under the captions "Directors and Nominees for Election as Directors," "Board of Directors and Corporate Governance—Audit Committee," and "Section 16(a) Beneficial Ownership Reporting Compliance" in the Proxy Statement, which is incorporated herein by reference.

        There have been no material changes to the procedures by which stockholders may recommend nominees to the Company's Board of Directors since March 4,18, 2005, the date of the Company's last proxy statement.

        The Company has adopted a code of ethics that applies to all of its employees, officers, and directors, including its principal executive officer, principal financial officer, and principal accounting officer

(controller). The text of the Company's code of ethics is being filed. Accordingly,posted on its website atwww.whirlpoolcorp.com; click on the “Exhibit Index”"Governance" tab, and then click on "Code of Ethics." The Company intends to disclose future amendments to, or waivers from, certain provisions of the code of ethics for executive officers and directors on the Company's website within four business days following the date of such amendment or waiver. Stockholders may request a free copy of the code of ethics from:

Larry M. Venturelli
Investor Relations
Whirlpool Corporation
2000 North M-63
Mail Drop 2800
Benton Harbor, MI 49022-2692
Telephone: (269) 923-4678

        Whirlpool has also adopted written charters for its Audit, Finance, Human Resources, and Corporate Governance and Nominating Committees, and Corporate Governance Guidelines, all of which are posted on the Company's website atwww.whirlpoolcorp.com; click on the "Governance" tab, then click on "Board of Directors," and then click on "Committee Charters." Stockholders may request a free copy of the charters and guidelines from the address or telephone number set forth above.

ITEM 11.Executive Compensation.

        Information with respect to compensation of executive officers and directors of the Company can be found under the captions "Executive Compensation," "Stock Option Grants and Related Information," "Stock Option Exercises and Holdings," "Long-Term Incentive Awards," "Agreements with Executive Officers and Related Party Transactions," "Retirement Benefits," "Human Resources Committee Interlocks and Insider Participation," and "Compensation of Directors" in the Proxy Statement, which is incorporated herein by reference.

ITEM 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

        Information with respect to security ownership by any person(s) known to the Company to beneficially own more than 5% of the Company's stock and by each director of the Company, each named executive officer of the Company, and all directors and executive officers of the Company as a group, can be found under the captions "Security Ownership" and "Beneficial Ownership" in the Proxy Statement, which is incorporated herein by reference.

        Information relating to securities authorized under equity compensation plans can be found under the caption "Equity Compensation Plan Information" in the Proxy Statement, which is incorporated herein by reference.

ITEM 13.Certain Relationships and Related Transactions.

        Information regarding certain relationships and related transactions can be found under the caption "Agreements with Executive Officers and Related Party Transactions" in the Proxy Statement, which is incorporated herein by reference.

ITEM 14.Principal Accounting Fees and Services.

        Information relating to the Company's auditors and the Audit Committee's pre-approval policies can be found under the caption "Matters Relating to Independent Registered Public Accounting Firm" in the Proxy Statement, which is incorporated herein by reference. The "Audit Committee Report" is not incorporated herein by reference.

PART IV

ITEM 15.Exhibits, Financial Statement Schedules.

(a)

The following documents are filed as a part of this report:



1.

The financial statements and related notes, and reports of management and the independent registered public accounting firm, listed in the Table of Contents to the Financial Supplement to this report. Individual financial statements of the registrant's affiliated foreign companies, accounted for by the equity method, have been omitted since no such company individually constitutes a significant subsidiary.



2.

"Schedule II - - Valuation and Qualifying Accounts" contained in the Financial Supplement to this report. Certain schedules for which provisions are made in the applicable accounting regulations of the Securities and Exchange Commission are not required under the related instructions or are inapplicable, and therefore have been omitted.



3.

The exhibits listed in the "Exhibit Index" attached to this Form 10-K/A is being updated to reflect the consent and new certifications described above.report.

Except for the amendments described above, this Form 10-K/A does not modify or update our previously reported financial statements and other financial disclosures in, or exhibits to, the Original Filing. For convenience and ease of reference, we are filing the entire “Financial Supplement to 2004 Annual Report on Form 10-K, and to 2005 Proxy Statement.”

2

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

        WHIRLPOOL CORPORATION

F-3

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS—(Continued)

GROSS MARGIN

 The consolidated gross margin percentage in 2005 decreased 40 basis points versus 2004. Consolidated results in 2005 were significantly impacted by higher material and oil-related cost increases which were mitigated by the combination of cost-based price adjustments and productivity improvements. Consolidated gross margin also benefited from the Brazilian government's export incentive program ("Befiex") tax credits (See Critical Accounting Policies and Estimates to this Management's Discussion and Analysis of Financial Condition and Results of Operations) and was negatively impacted by higher incentive compensation.

The consolidated gross margin percentage in 2004 decreased 90 basis points versus 2003 due primarily due to second half material cost increases and global pricing pressures. These costsincreases were somewhatpartly mitigated by higher volume and record levels of controllable productivity. The consolidated gross margin percentage declined 60 basis points in 2003 versus 2002 due primarily to higher U.S. pension and medical expenses coupled with reduced Befiex credits (See Forward Looking Perspective), an increase in expense due to the decline of the U.S. dollar and higher material costs in Latin America. The higher expense was partially offset by productivity improvements in North America and Europe and lower restructuring and related expense.

The table below outlines the gross margin percentages by region, excluding the impact of the 2004, 2003 and 2002 restructuring relatedregion.

⁽¹⁾

Restructuring charges of $6 million, $7 million and $43 million, respectively, from the regional percentages. The Company believes this comparison of gross margin percentages excluding restructuring related charges provides management and shareholders a better understanding of the ongoing performance of the regions. The Company evaluates segment performance based upon each segment’s operating income, which excludes, among others, one-time charges (See Note 17). The restructuring related charges are included in the consolidated percentages in each of the three years presented.

		2004			Change			2003			Change			2002
Gross Margin
North America		21.9	%		(0.7	) pts		22.6	%		(1.0	) pts		23.6	%
Europe		23.7			0.1			23.6			1.4			22.2
Latin America		17.0			(2.6	)		19.6			(3.8	)		23.4
Asia		16.9			(3.8	)		20.7			(3.0	)		23.7
Consolidated(1)		21.7	%		(0.9	) pts		22.6	%		(0.6	) pts		23.2	%

---

(1)

Restructuring charges included in consolidated, excluded from regions.

Consolidated, excluded from regions.

Significant regional trends were as follows:

F-4

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS—(Continued)

SELLING, GENERAL AND ADMINISTRATIVE

ConsolidatedIn 2005, consolidated selling, general and administrative expenses, as a percent of consolidated net sales, declined 50 basis points as compared to 2004, as administrative cost reductions and scale efficiencies offset higher freight and warehousing costs and incentive compensation in North America and Latin America. Europe results primarily reflect the positive impact from administrative productivity improvements and business scale. The Asia region also benefited from scale efficiencies. The consolidated selling, general and administrative expenses in 2004, as a percent of consolidated net sales, remained relatively unchanged versus 2003 and 2002.2003. Higher freight rates in North and Latin America in 2004 were partially offset by productivity in other non-logistic areas. Europe benefitedresults reflect the positive impact from leverage on higher salesadministrative productivity improvements and lower administrative costs.business scale. The increase in Asia’sAsia's selling, general and administrative expenses as a

percent of sales in 2004 was due primarily to lower overall sales and higher administrative support costs. In 2003, higher pension and freight costs in North America were partially offset by cost controls on discretionary spending. The European increase in 2003 was a result of expense reclassification into selling, general and administrative expenses while Latin America’sAmerica's improvement was primarily driven by lower bad debt expense in 2003. Asia’sAsia's higher selling, general and administrative expenses as a percent of sales in 2003 and 2002 were due to higher operating reserves. The table below outlines the selling, general and administrative expenses as a percentage of sales by region, excluding the impact of 2004, 2003 and 2002 restructuring relatedregion.

⁽¹⁾

Restructuring-related charges of $1 million, $4 million and $17 million, respectively, from the regional amounts. The Company believes this comparison of selling, general and administrative expenses excluding restructuring related charges provides management and shareholders a better understanding of the ongoing performance of the regions. The Company evaluates segment performance based upon each segment’s operating income, which exclude, among others, one time charges (See Note 17). The restructuring related charges are included in the Corporate/Other line below.

Millions of dollars		2004			As a % of Sales			2003			As a % of Sales			2002			As a % of Sales
Selling, General & Administrative expenses
North America		$	1,031		12.5	%		$	970		12.3	%		$	894		12.2	%
Europe			560		18.3				510		19.0				407		18.5
Latin America			220		13.1				175		13.0				189		15.0
Asia			89		23.4				79		19.0				70		17.8
Corporate/Other(1)			187		—				182		—				176		—
Consolidated		$	2,087		15.8	%		$	1,916		15.7	%		$	1,736		15.8	%

---

(1)

Restructuring related charges included in Corporate/Other, excluded from regions.

F-5

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS—(Continued)

Consolidated, excluded from regions.

RESTRUCTURING AND RELATED CHARGES

Restructuring initiatives resulted in pre-tax restructuring charges of $57 million, $15 million and $3 million in 2005, 2004 and $101 million in 2004, 2003, and 2002, respectively. These amounts have been identified as a separate component of operating profit. AsThe Company expects to expense up to $100 million for restructuring during 2006.

At December 31, 2005, a resultliability of $6 million remains for actions yet to be completed under the Company’sglobal restructuring activity, it also recognized $7 million, $11 million and $60 million, respectively,plan that was originally announced in pre-taxDecember of 2000. The remaining liability pertains to lease exit costs. The restructuring related charges during 2004, 2003 and 2002, respectively,plan included the elimination of over 7,100 positions worldwide, of which were recorded primarily within cost of products sold. (Seesubstantially all had left the Company through December 31, 2005. See Note 1311 to the Consolidated Financial Statements for a more detailed description of these charges and the Company’sCompany's restructuring program.)

During the fourth quarter of 2002, the Company recognized the vast majority of remaining charges for the global restructuring plan that was originally announced in December of 2000. The plan, which had a total restructuring and related pre-tax cost of $387 million, is expected to result in more than $200 million in annualized savings. At December 31, 2004, a liability of $13 million remains for actions yet to be completed under the plan. Actions under the plan include the elimination of over 7,500 positions worldwide, of which approximately 7,100 had been eliminated as of December 31, 2004.

OTHER INCOMEINTEREST AND SUNDRY INCOME/EXPENSE

Interest income and sundry expense increased by $51 million versus 2004. The primary drivers of this increase were an increase in legal reserves of approximately $21 million, higher foreign currency losses on balance sheet positions, the absence of prior year interest received on foreign tax audit settlements in Latin America and a $9 million gain on the sale of a partial interest in an equity investment during 2004. Interest and sundry expense for 2004 decreased approximately 66%$27 million compared to 2003. The improvement iswas primarily attributable to lower losses of $17 million on foreign currency balance sheet positions, primarily in Europe, and a $9 million gain on the sale of a partial interest in an equity investment in Latin America.

INTEREST EXPENSE

 Interest income and sundry expense in 2003 decreased approximately 24%2005 increased $2 million as compared to 2002.2004. The improvement is largely attributableincrease was due primarily to lower foreign currency losses as well as lower losseshigher interest rates and a shift in asset dispositionsglobal borrowing positions. The primary impact was in Brazil, which experienced both increased borrowing levels and the absence ofhigher interest rates on a 2002 fire loss within a Mexican facility.

Interestyear over year basis. The interest expense reductionsreduction during 2004 and 2003 of $9 million and $6 million, respectively, arewas attributable to a lower overall U.S. interest rate environment, a decrease in borrowings in countries with higher interest rates, primarily Europe, and maturity of the $200 million 9% Debentures in March 2003, which was replaced with lower rate debt.

INCOME TAXES

The effective income tax rate was 28.6% in 2005, 33.9% in 2004 35%and 35.0% in 20032003. A primary driver of the effective tax rate reduction during 2005 was the realization of foreign tax credits associated with a comprehensive plan that simplified the Company's legal structure, thereby permitting the tax-efficient repatriation of offshore cash via foreign tax credits. Additional items impacting the effective tax rate during all periods presented included the settlement of global tax audits and 39% in 2002. The impact of audit settlements and tax planning, as well as the overall dispersion of global income, has contributed to changes in the Company’s effective tax rate over the periods presented.income. (See the income tax rate reconciliation included in Note 1513 to the Consolidated Financial Statements for a description of the significant items impacting the consolidated effective income tax rate.)

EQUITY IN LOSSEARNINGS (LOSS) OF AFFILIATED COMPANIES AND MINORITY INTERESTS

Changes in equity in lossearnings (loss) of affiliated companies and minority interests reflect higher earnings in Latin America and India in 2005 and lower earnings in Latin America and India during 2004. The 2003 results improved $30 million versus 2002. The 2002 results were reduced by a $22 million after-tax impairment charge related to the Company’s minority investments in and advances to Wellmann, a German kitchen cabinet manufacturer. During 2003, the Company’s investment in the equity of Wellmann was sold to Alno, a prominent German kitchen cabinet manufacturer. The sale did not have a material impact to the Company’s financial position or results of operations. The 2002 results were also impacted by a $4 million charge incurred related to a minority interest in an Asian entity.

F-6

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS—(Continued)NET EARNINGS

EARNINGS FROM CONTINUING OPERATIONS

Earnings from continuing operationsNet earnings were $422 million in 2005 versus $406 million and $414 million in 2004 versus $414 million and $262 million2003, respectively. 2005 earnings were impacted by cost-based price adjustments, productivity improvements, administrative cost controls and a reduction in 2003the effective tax rate. These items were partially offset by significantly higher material costs (particularly steel and 2002, respectively. Full yearresins), unfavorable currency fluctuations, increased incentive compensation expense, higher restructuring spending and increased legal reserves. 2004 earnings were significantly impacted by increases in material and logistics costs, particularly in the second half of 2004. Thesethe year. The higher costs in 2004 were partially offset by productivity improvements, lower foreign currency losses on balance sheet positions, an effective tax rate reduction, lower financing costs, and reduced minority interest earnings. The significant increase in 2003 relates primarily to approximately $147 million of higher restructuring and related charges in 2002, the full year impact of acquisitions, strong volume growth, productivity improvements and absence of an equity investment write-off, partially offset by an increase in expense due to the decline of the U.S. dollar.

DISCONTINUED OPERATIONS

As a result of the United Airlines bankruptcy filing in December 2002, the Company wrote off its related investment in leveraged aircraft leases during the fourth quarter of 2002. The write-off resulted in a non-cash charge to discontinued operations of approximately $68 million, or $43 million after-tax. These leveraged lease assets were part of the Company’s previously discontinued finance company, Whirlpool Financial Corporation.

Although most of its assets have been divested, Whirlpool Financial Corporation remains a legal entity with assets consisting primarily of a leveraged lease portfolio. As of December 31, 2004 and 2003, the portfolio totaled $15 million and $42 million, respectively, net of related reserves. (See Note 5 to the Consolidated Financial Statements.) The Company continues to monitor its arrangements with the lessees and the value of the underlying assets.

CUMULATIVE EFFECT OF CHANGES IN ACCOUNTING PRINCIPLE

The Company adopted Statement of Financial Accounting Standards (“SFAS”) No. 142, “Goodwill and Other Intangible Assets,” on January 1, 2002. As a result of this adoption, the Company recorded a non-cash after-tax charge of $613 million in 2002.

(See Note 3 to the Consolidated Financial Statements for a more detailed description of this change in accounting principle.)

FORWARD-LOOKING PERSPECTIVE

During 2004,2005, the Company incurred approximately $300$530 million of higher material and oil relatedoil-related costs. The Company expects higher material costs, primarily within North and Latin America, of $500In response to $550 million during 2005, primarily due to higher prices for steel and resins. To address this challenging environment,these increases, the Company hasintroduced new innovative products, improved productivity, reduced discretionary costs and implemented global cost-based price increases of approximately 5-to-10%, effective January 2005,adjustments in most key marketsregions around the world. The combination of these actions contributed to the ability of the Company has also initiated actions to drivedeliver a record levelsyear of controllableresults.

The Company expects positive earnings momentum to continue during 2006. New product introductions, productivity leverage itsimprovements, continued expansion of the Company's global operating platform reduce non-product related spending and acceleratestrong cost controls are expected to more than offset continued increases in material and oil-related costs.

In 2006, the rateCompany will launch the largest number of new products to market in its history. The Company's innovation product pipeline continues to grow, consumer and trade response to its new offerings has been positive, and the Company continues to consistently execute its strategy of delivering consumer-relevant innovation to the market. The full effect of these cost increases will be reflected in the Company’s cost structure from the start of 2005, while benefits of both price increases and productivity improvements will build throughout the year.

F-7

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS—(Continued)

markets worldwide.

North America and Europe, the Company’sCompany's two largest segments, expect 20052006 industry growth of approximately 2%2 to 3% and 1%1 to 2%, respectively. The Company’s efforts in these two regions during 2005 will be to execute previously announced price increases, drive record levels of controllable productivity, and expand its market share through leveraging its strong brand portfolio, expanding key market leadership and introducing continuous relevant branded innovations to the market.

Macro-economic conditions in Latin America are expected to remain positive during 20052006 and the Company expects industry shipments to increase 4-to-5%. Price increases implemented throughout 2004, and additional increases enacted for 2005, are expected6 to offset significant material cost increases. Manufacturing and supply chain productivity is anticipated to contribute to improved operating profit margin performance and exports to the Company’s global operations are expected to increase.8%.

Asia results will benefit from new product introductions, improved product mix and favorable comparisons to last year’s inventory trade reduction strategy in India. The Company will continueexpects industry shipments within Asia to expand its China procurement and technology baseincrease 5 to support its global operations, expand domestic sales within China and India, and increase global exports of components and finished product.

7% in 2006.

In December 1996, Multibras and Empresa Brasileira de Compressores S.A. (“Embraco”("Embraco"), Brazilian subsidiaries, were granted additional export incentives in connection with the Brazilian government’s export incentive program (“Befiex”).Befiex. These incentives allowed the use of credits as an offset against current Brazilian federal excise tax on domestic sales. During the fourth quarter of 2005, the Company recognized $23 million in export credits. The Company did not recognize anyrecognized no credits in 2004 and recognized credits of $5 million in 2003 and $42 million in 20022003. The credits are treated as a reduction of current excise taxes payable and, therefore, as an increase in net sales. The Company’sAt December 31, 2005, the Company's remaining credits are approximately $316$600 million at December 31, 2004. Theafter adjusting for currency fluctuations and a monetary adjustment. Currently, the Company does not expectis unable to recognize additional Befiexthese credits until the calculationbut is exploring possible strategies which may permit future recognition of the credit, which is currently under review, is confirmed by the Brazilian courts.

these credits.

CASH FLOWS

The statementsConsolidated Statements of cash flowsCash Flows reflect the changes in cash and equivalents for the last three years by classifying transactions into three major categories: operating, investing and financing activities.

OPERATING ACTIVITIESOperating Activities

Whirlpool’sWhirlpool's main source of liquidity is cash flow isgenerated from operating activities, consisting of net earnings adjusted for non-cash operating items, such as depreciation, and changes in operating assets and liabilities such as receivables, inventories and payables and for non-cash operating items, such as depreciation.

payables.

The Company’sCompany's cash provided by operating activities in 2005 increased $87 million over 2004. Cash provided by operating activities benefited from lower inventories, reduced pension contributions and higher accrued expenses for payroll, incentive compensation, restructuring and promotional spending. Results were partially offset by higher accounts receivable balances due mainly to higher sales and lower payables primarily a result of lower inventory levels. Cash flow was also negatively impacted by a decrease in net taxes payable of $105 million, due, in part, to a reduction in tax expense. In 2004, cash provided by operating activities benefited from lower after-tax pension contributions of approximately $62 million and lower restructuring spending of approximately $56 million. CashIn 2004, cash flow was negatively impacted by higher working capital requirements of about $70 million, driven largely by material cost increases and higher inventory levels to support higher volumes and increased trans-regional shipments. The Company’sIn 2003, cash provided by operating activities benefited from higher earnings, primarily within our European and North American business segments, as well as continued improvement in working capital management. Cash flow was negatively impacted by a voluntary after-tax pension contribution to the Company’sCompany's U.S. pension plans

of $97 million. In comparison, after-tax U.S. pension contributions made during 2002 were $5 million. The 2003 results werecash flow was also negatively impacted by restructuring spending, primarily related to 2002 projects, as well as the timing of promotional payments. Combined, these negative 2003

The Company's free cash outflows were essentially offset byflow was $412 million versus $241 million for the absence of $239 million in product recall spending which occurred during 2002. Cashyears ended December 31, 2005 and 2004, respectively.

The table below reconciles cash provided by operating activities was also negatively impacteddetermined in 2002accordance with accounting principles generally accepted in the U.S. ("GAAP") to free cash flow, a non-GAAP measure. Management believes that free cash flow provides both management and 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 but whose calculations may differ from the Company's calculations. As defined by the Company, free cash flow is cash provided by operating activities after capital expenditures, proceeds from the sale of business/assets and dividends paid. The following is a one-time tax paymentreconciliation of $86 million on a cross-currency interest rate swap gain, which occurred during 2001.cash provided by operating activities to free cash flow.

F-8

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ANDBeginning in 2006, the Company will exclude dividends paid from the definition of free cash flow.

RESULTS OF OPERATIONS—(Continued)Investing Activities

INVESTING ACTIVITIES

The principal recurring investing activities are capital expenditures,property additions, which were $494 million, $511 million and $423 million in 2005, 2004 and $430 million in 2004, 2003, and 2002, respectively. CapitalThese expenditures are incurred to support distinctiveprimarily for equipment and innovative solutionstooling, driven by product innovation initiatives, more efficient production methods, and replacement for consumers which lead to new revenue growth.normal wear and tear. Expenditures are also made to support the Company’sCompany's global operating platform footprint moves to lower cost locations as well as replacement, regulatory and infrastructure changes. Higher capital spending in 2004 reflects increased investment in product innovation and the Company’s global operating platform.

DuringIn each of 2005, 2004 and 2003, Whirlpool entered into separate sale-leaseback transactions whereby the Company sold and leased back certain of its owned properties. Proceeds related to the sale-leaseback of sixfour properties in 2005, net of related fees, were approximately $67 million. In 2004, proceeds related to sale-leasebacks of six properties, net of related fees, were approximately $66 million. In 2003, proceeds related to the sale-leaseback of four properties, net of related fees, were approximately $65 million.

Cash proceeds of $48 million resulted from the sale of a non-core business in Latin America during 2005. See Note 4 to the Consolidated Financial Statements for additional information.

Cash paid in 2005 in connection with the proposed Maytag acquisition totaled $77 million, primarily consisting of $40 million to reimburse Maytag for its payment of a fee to terminate its prior merger agreement with Triton Acquisition Holding Co. and $37 million of professional fees incurred in connection with the proposed acquisition. These costs have been capitalized and are recognized in the other assets line within the Company's Consolidated Balance Sheet. If consummation of the transaction does not occur, the costs will be reclassified to expense.

On November 18, 2002, the Company acquired the remaining 20% interest in Whirlpool Narcissus Shanghai Company Limited (“Narcissus”("Narcissus") for $9 million. Subsequent to the purchase, Narcissus was renamed Whirlpool Home Appliance (Shanghai) Co. Ltd. In accordance with the purchase agreement, 40% of the purchase price was paid during 2002, 40% was paid during 2003 and the remaining 20% was paid during 2004.

On July 3, 2002, Whirlpool acquired the remaining 51% ownership in Vitromatic S.A. de C.V. (“Whirlpool Mexico”), an appliance manufacturer and distributor in Mexico. The aggregate purchase price was $151 million in cash plus assumption of outstanding debt at the time of acquisition, which totaled $143 million.

On June 5, 2002, the Company acquired 95% of the shares of Polar S.A. (“Polar”), a leading major home appliance manufacturer in Poland. The aggregate purchase price was $27 million in cash plus outstanding debt at the time of acquisition, which totaled $19 million. During 2003, Whirlpool acquired the remaining 5% of the shares of Polar.

FINANCING ACTIVITIESFinancing Activities

Total repayments of short-term and long-term debt, net of new borrowings, were $131 million, $58 million and $208 million in 2005, 2004 and $236 million in 2004, 2003, and 2002, respectively.

During March 2003, the Company redeemed its $200 million 9% Debentures using short-term notes payable.

Dividends paid to stockholders totaled $116 million, $116 million and $94 million in 2005, 2004 and $91 million in 2004, 2003, and 2002.

respectively.

Under its stock repurchase program,programs, Whirlpool purchasedused $34 million, $251 million, and $65 million to purchase approximately 0.5 million, 3.7 million shares ($251 million) in 2004, approximatelyand 1 million shares ($65 million)of common stock in 2005, 2004, and 2003, and 0.7 million shares ($46 million) in 2002.respectively. See Note 119 to the Consolidated Financial Statements for additional detail on the Company’sCompany's stock repurchase program.

The Company also redeemed $33 million and $25 million in 2003 and 2002, respectively, in preferred stock of its discontinued finance company, Whirlpool Financial Corporation.Corporation, in 2003. See Note 86 to the Consolidated Financial Statements for additional detail on the Whirlpool Financial Corporation preferred stock.

Whirlpool received proceeds of $102 million in 2005, $64 million in 2004 and $65 million in 2003 and $80 million in 2002 related to the exercise of Company stock options. The Company’sCompany's stock option program is discussed in Notes 1 and 1210 to the Consolidated Financial Statements.

F-9

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS—(Continued)

FINANCIAL CONDITION AND LIQUIDITY

The Company’sCompany's objective is to finance its business through thean appropriate mix of long-term and short-term debt. By diversifying its maturity structure, the Company avoids concentrations of debt, reducing liquidity risk. Whirlpool has varying needs for short-term working capital financing as a result of the nature of its business. The volume and timing of refrigeration and air conditioning production impact the Company’sCompany's cash flows, with increased production in the first half of the year to meet increased demand in the summer months. The Company finances its working capital needs primarily through the commercial paper markets in the U.S., Europe and Canada. These commercial paper programs are supported by committed bank lines. In addition, outside the U.S., short-term funding is also provided by bank borrowings on uncommitted lines. The Company has access to long-term funding in the U.S., European and other public bond markets.

The Company’sCompany's financial position remains strong. At December 31, 2005 and 2004, Whirlpool’sWhirlpool's total assets were $8.2 billion versus $7.4 billion at December 31, 2003. Stockholders’billion. Stockholders' equity increased from $1.3 billion at the end of 2003 to $1.6 billion at the end of 2004.2004 to $1.7 billion at the end of 2005. The increase in equity is primarily attributed to net earnings retention and a $174 million increaseproceeds received from the exercise of stock options. These increases were offset by decreases in equity through foreign currency translationdue to minimum pension liability adjustments offset byand share repurchases of $251 million.

repurchases.

The Company’sCompany's overall debt levels have remained relatively unchanged versus 2003.decreased since 2004. Cash flows from operations and proceeds from sales of assets/businesses have been used to repurchase stock,repay debt, fund higher capital expenditures and pay increased dividends.

On December 2, 2005, the Company entered into an Amended and Restated Long Term Five-Year Credit Agreement (the "Amended and Restated Credit Agreement") by and among the Company, certain other borrowers, the lenders referred to therein, Citibank N.A., as administrative agent and fronting agent, JPMorgan Chase Bank, N.A., as syndication agent, and ABN Amro Bank N.V., Royal Bank of Scotland and Bank of America, as documentation agents, which amends and restates the Amended and Restated Long Term Credit Agreement dated as of May 28, 2004. On December 2, 2005, the parties to the Amended and Restated Credit Agreement also entered into a 364-Day Credit Agreement (the "364-Day Credit Agreement" and together with the Amended and Restated Credit Agreement, the "Credit Facilities").

The Credit Facilities provide for an aggregate of $2.7 billion in committed unsecured revolving credit facilities. The Amended and Restated Credit Agreement consists of a $2.2 billion 5-year credit facility, which includes a $200 million letter of credit subfacility. The 364-Day Credit Agreement consists of a $500 million 364-day credit facility, which may be converted into a term loan. Borrowing capacity of $1.2 billion under the Amended and Restated Credit Agreement became available on December 2, 2005. Borrowing capacity of $500 million under the 364-Day Credit Agreement and the remaining $1.0 billion under the Amended and Restated Credit Agreement will become available upon the Department of Justice's final clearance of the acquisition of Maytag. Borrowings under the Credit Facilities will be available to the Company and designated subsidiaries for general corporate purposes, including commercial paper support. Subsidiary borrowings under the facilities, if any, will be guaranteed by the Company. Interest under the Credit Facilities accrues at a variable annual rate based on the London Interbank Offered Rate (LIBOR) plus a margin dependent on the Company's credit rating at that time.

The Credit Facilities require the Company to meet certain financial tests, including a leverage ratio of not more than 3.0 to 1.0 and an interest coverage ratio of not less than 2.0 to 1.0. The Credit Facilities also contain covenants which, among other things, require the Company to deliver to the lenders specified financial information, including annual and quarterly financial information, and limit the Company's ability to (or to permit any subsidiaries to), subject to various exceptions and limitations, (i) merge with other companies, (ii) create liens on its property; (iii) incur debt or off-balance sheet obligations at subsidiary level; (iv) enter into transactions with affiliates, except on an arms-length basis; (v) enter into agreements restricting the payment of subsidiary dividends or restricting the making of loans or repayment of debt by subsidiaries to the Company or other subsidiaries; and (vi) enter into agreements restricting the creation of liens on its assets.

On February 7, 2006, the Company filed a shelf registration statement with the United States Securities and Exchange Commission ("SEC") relating to an indeterminate amount of Debt Securities.

In May 2004,August 2005, in connection with its proposed acquisition of Maytag, Whirlpool allowedwas placed on credit watch with negative implications by Standard & Poor's, Moody's Investors Service and Fitch Ratings. No action has been taken by any of the rating agencies concerning the Company's rating, and action, if any, would be taken after the acquisition of Maytag. The Company does not anticipate that any future adjustments to these ratings would have a material impact on its $400liquidity. The Company's short-term credit rating has been confirmed, and accordingly, availability of the commercial paper markets remains unchanged.

The Company's Eurobonds of EUR 300 million committed 364 day credit facility to expire. Simultaneously,principal amount will mature in June 2006. The Eurobonds U.S. dollar value at December 31, 2005 was $357 million. The Company anticipates replacing the Eurobonds with a domestic bond offering and commercial paper.

On September 9, 2005, the Company increasedentered into an agreement with Harbor Shores Community Redevelopment Inc. ("Harbor Shores"), a not-for-profit entity, whereby Whirlpool Corporation agreed to

loan up to $12 million to Harbor Shores, secured by a mortgage on real estate owned by Harbor Shores. As of December 31, 2005, $4.5 million had been loaned under this agreement. Membership interests in Harbor Shores are held by three U.S. not-for-profit entities, including Whirlpool Foundation. Certain current and former members of the sizeWhirlpool Corporation management team are involved in the Harbor Shores project, including Whirlpool's current CFO and its former CEO, both of its $800 million committed credit facility to $1.2 billionwhom are trustees and extended its maturity from 2006 to 2009. This committed facility supports commercial paper programs and other operating needs. There were no borrowings under these facilities during 2004 or 2003. Whirlpool was in full compliance with its bank covenants throughout both 2004 and 2003.officers of Harbor Shores. None of these individuals receives any compensation from the Company’s material debt agreements requires accelerated repaymentCompany or the Whirlpool Foundation for their services to Harbor Shores. The purpose of the Harbor Shores project is to transform approximately 530 acres in Benton Harbor and St. Joseph, Michigan, into a residential and commercial community with a goal of spurring economic development and further increasing the eventattractiveness of a decreaseemployment in credit ratings.southwest Michigan.

In 2004,On December 12, 2005, the Company announced that it plansinvested $250 million in its North American manufacturing base during 2005. In the last 12 months, the Company has made improvements to invest approximately $180 million to strengthen Whirlpool’s brand leadership position in the global appliance industry. The Company plans to continue its comprehensive worldwide effort to optimize its regional manufacturing facilities, supply base, product platformswasher and technology resources to better support its global brands and customers. Approximately $100 million of the investment will fund initiatives at the Company’s manufacturingdryer facilities in the United StatesOhio, began production of formed door refrigerators in Fort Smith, Arkansas and the remainder will be used to begin work on the expansionbegun production of the Company’sa new clothes washer production facility in Monterrey, Mexico, andMexico. In addition, the Company has completed the construction of a new refrigeration facilityrefrigerator plant in Ramos Arispe, Coahuilla, Mexico.

Arizpe, Mexico that will begin producing refrigerators later in 2006. These investments continue the Company's ongoing effort to expand its innovation capability and optimize its global operating platform.

OFF-BALANCE SHEET ARRANGEMENTS

The Company has guarantee arrangements in place in a Brazilian subsidiary. As a standard business practice in Brazil, the subsidiary guarantees customer lines of credit at commercial banks, supporting purchases from the Company, following its normal credit policies. In the event thatIf a customer were to default on its line of credit with the bank, the subsidiary would be required to satisfy the obligation with the bank, and the receivable would revert back to the subsidiary. As of December 31, 20042005 and December 31, 2003,2004, these amounts totaled $184$236 million and $109$184 million, respectively. The only recourse the Company has related to these agreements would be legal or administrative collection efforts directed against the customer.

F-10

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS—(Continued)

CONTRACTUAL OBLIGATIONS AND FORWARD-LOOKING CASH REQUIREMENTS

The following table summarizes the Company’sCompany's expected cash outflows resulting from financial contracts and commitments.

⁽¹⁾

The amounts in debt obligations do not include an estimate of future interest payments. See Note 6 to the Consolidated Financial Statements for additional information regarding the Eurobond maturity in 2006.

⁽²⁾

The amounts in long-term liabilities include the Company's expected 2006 voluntary U.S. pension and foreign pension fund contributions, and expected benefit payments under the postretirement health care benefit plans. Required contributions for future years depend on certain factors that cannot be determined at this time.

The goal of the Company’sCompany's global operating platform is to strengthen Whirlpool’s brand leadershipenhance the Company's competitive position in the global home appliance industry. The Company plans to continue its comprehensive worldwide effort to optimize its regional manufacturing facilities, supply base, product platforms and technology resources to better support its global products, brands and customers. The Company intends to make additional investments to strengthenimprove its competitiveness and brand leadership position in fiscal 2005.2006. Capital spending is expected to be between $500 million and $550$525 million in 20052006 in support of the Company’sCompany's investment in innovative product technologies and its global operating platform initiatives. The Company expects that higher cash flow from operations will more than offset increased capital spending.

During 2004, Whirlpool’sWhirlpool's Board of Directors increased the quarterly dividend from 34 cents per share to 43 cents per share. This increased the Company’s annual dividend payment by approximately $22 million to $116 million.

The Company believes that its capital resources and liquidity position at December 31, 2004,2005, coupled with its planned cash flow generated from operations in 2005,2006, are adequate to support higher capital spending, continued dividend payments, repayment of debt and to meet anticipated business needs to fund future growth opportunities.opportunities, including the cash portion of the consideration for the proposed acquisition of Maytag and assumption of Maytag debt. Currently, the Company has access to capital markets in the U.S. and internationally.

PENDING MAYTAG ACQUISITION

 On August 22, 2005, Whirlpool entered into a definitive merger agreement with Maytag to acquire all outstanding shares of Maytag common stock. The aggregate transaction value, including the payment to Maytag stockholders of approximately $850 million in cash and between 9.2 million and 11.3 million shares of Whirlpool common stock and assumption of approximately $972 million of Maytag debt (based on Maytag stock, exercisable stock options and debt reported outstanding as of December 31, 2005), is approximately $2.7 billion. The number of shares of Whirlpool common stock to be issued will depend on the volume weighted average trading prices of Whirlpool common stock during a twenty trading day period ending shortly before completion of the merger. The transaction was approved by Maytag shareholders on December 22, 2005 and is pending regulatory clearance as discussed below.

Whirlpool has sufficient resources to finance the acquisition. The acquisition and upcoming debt maturities of the combined company are expected to be financed initially through commercial paper supported by existing bank agreements and with new committed bank facilities. The Company expects to eventually refinance a portion of its commercial paper in the capital markets.

Whirlpool currently expects the merger with Maytag to generate approximately $300 million to $400 million of annual pre-tax cost savings by the third year following completion of the merger. Efficiencies are expected to come from all areas across the value chain, including product manufacturing and marketing, global procurement, logistics, infrastructure and support areas. Achieving these efficiencies will require one-time costs and capital investments currently estimated to be in the range of $350 million to $500 million, a majority of which currently are anticipated to be capitalized or accrued in purchase accounting. Whirlpool currently anticipates incurring these costs during the first two years following completion of the merger.

The merger is subject to clearance under the Hart-Scott-Rodino Antitrust Improvements Act, and other customary closing conditions. On December 1, 2005, Whirlpool and Maytag announced that they had certified substantial compliance with the Antitrust Division of the Department of Justice in response to a request for additional information ("second request") and had agreed not to close the proposed merger before February 27, 2006, without the Antitrust Division's concurrence, recognizing that the Antitrust Division could request additional time for review. On February 13, 2006, Whirlpool and Maytag

announced that they agreed with the Antitrust Division to a limited extension of time to complete the review of the proposed merger. The companies have agreed not to close the transaction before March 30, 2006 without the Antitrust Division's concurrence.

Whirlpool and Maytag are working closely with the Department of Justice and continue to cooperate fully with its investigation and respond promptly to its inquiries.

On August 22, 2005, Whirlpool paid Maytag $40 million to reimburse Maytag for its payment of a fee to terminate its prior merger agreement with Triton Acquisition Holding Co. Whirlpool has agreed to pay up to $15 million to assist Maytag in retaining key employees while the merger is pending. Whirlpool also has agreed to pay Maytag a "reverse break-up fee" of $120 million under certain circumstances if the transaction cannot be closed due to an inability to obtain regulatory clearance.

OTHER MATTERS

On February 25, 2005, the Company announced the recall of approximately 162,000 under-the-counter plastic tall tub dishwashers due to a potential safety issue. There have been no reports of personal injury or property damage associated with these dishwashers. The Company also is undertaking the repair of up to an additional 223,000 of these dishwashers for a separate quality issue. The Company accrued $17.1 million related to the quality issueissues within cost of products sold during the fourth quarter of 2004. During 2005, the estimated cost to recall and repair these units was reduced to $13.7 million primarily due to the recovery of certain costs from a parts supplier. The remaining accrual amount for cost and a receivable from the supplier were not material at December 31, 2005.

Two purported national class action lawsuits have been filed against the Company, one in a Missouri state court and one in an Illinois state court, each alleging breach of warranty, fraud, and violation of state consumer protection acts in selling these tall tub dishwashers. There are no allegations of any personal injury or property damage and the complaints seek unspecified compensatory damages. The Company believes these suits are without merit, intends to vigorously defend these actions, and at this point cannot reasonably estimate a possible range of loss, if any.

Whirlpool is currently monitoring a supplier-related quality and potential product safety problem that may affect up to 3.5 million appliances manufactured between 2000 and 2002. Whirlpool currently estimates that its potential cost from this matter ranges from zero to $235 million, depending on whether the cost of any such corrective action is borne initially by Whirlpool or the supplier, and, if initially borne by Whirlpool, whether Whirlpool will be successful in recovering its costs from the supplier. In addition, Whirlpool could incur other costs arising out of this matter, which cannot currently be estimated but could be material. No amounts have been recognized as of December 31, 2005.

F-11

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS—(Continued)

During 2001, the Company recognized a total of $295 million of pre-tax charges ($181 million after-tax) related to two separate product recalls. During 2002, Whirlpool recognized additional recall related pre-tax charges of approximately $9 million for one of these recalls. Additionally, inIn 2003, the Company recognized pre-tax charges of $16 million primarily for final expenses related to the 2001 recall of microwave oven hood units. See Note 14 to the Consolidated Financial Statements for a more detailed description of these charges.

Pension and Postretirement Medical Benefit Plans

While lower discount rates increased Whirlpool’s pension obligations during 2004, improvement in equity market performance during the year increased the value of pension fund assets. Whirlpool also contributed approximately $49$15 million pre-tax ($31 million to funded plans) to its U.S. pension plans during 2004,2005, of which $31$13 million was a voluntary contribution to its funded plans and $18$2 million was required. The Company also contributed $21$25 million to its foreign pension plans during 2004.2005. At December 31, 2004,2005, the Company’sCompany's defined benefit pension plans still remain underfunded on a combined basis. For the obligations and funded status of the U.S. and foreign plans, see Note 14 to the Consolidated Financial Statements.

The Company recognized consolidated pre-tax pension cost (credits) of $94 million, $91 million and $78 million in 2005, 2004 and $(37)2003, respectively. Consolidated pension cost in 2006 is anticipated to be approximately $95 million, in 2004, 2003 and 2002, respectively.relatively unchanged from 2005. The Company currently expects that U.S. pension costcosts for 20052006 will be approximately $66$72 million, based on a plan amendment,using an expected rate of return on assets assumption of 8.75%8.5% and a lower discount rate of 5.80%5.6%. The $66$72 million compares to pension cost of $68$66 million in 2004. Consolidated pension cost in 2005 is anticipated to be approximately $91 million, relatively unchanged from 2004.

2005.

U.S. pension plans comprise 86% of the Company’sCompany's projected benefit obligation. The discount rate and expected return on asset assumptions used in determining the Company’sCompany's U.S. pension benefit obligations and costs are as follows:

The Company’sCompany's expected return on assets assumption of 8.75%8.5% was based on historical asset returns for publicly traded equity and fixed income securities tracked between 1926 and 20032005 and the historical returns for private equity. The historical equity returns were adjusted downward to reflect future expectations. This adjustment was based on published academic research. The expected returns are weighted by the targeted asset allocations. The resulting weighted average return was rounded up to the nearest quarter of one percent. The Company uses a measurement date of December 31.

On November 14, 2005, the Company amended the Whirlpool Employees Pension Plan (the "WEPP"). The amendment will be reflected in the Company's 2006 pension cost and did not affect the accumulated benefit obligation (the "ABO") or projected benefit obligation (the "PBO") at December 31, 2005.

In January 2005, the Company amended the Whirlpool Employees Pension Plan.WEPP. The effectCompany remeasured the net periodic cost and funded status of thisthe plan at January 1, 2005 to reflect the amendment. The amendment will be to reducereduced the projected benefit obligation (“PBO”)PBO by approximately $80 million. The accumulated benefit obligation (“ABO”) willABO was not be affected by the amendment.

amendment since the accrued benefits as of December 31, 2005 were not affected by this change. See Note 14 to the Consolidated Financial Statements for additional information.

In addition to pension plans, the Company sponsors plans to provide postretirement health care benefits for eligible retired U.S. employees. Eligible retirees are those who were full-time employees with 10 years of service who attained age 55 while in service with the Company. The postretirement health care plans are generally contributory with participants’participants' contributions adjusted annually and include cost-sharing provisions that limit the Company’s

F-12

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS—(Continued)

Company's exposure for recent and future retirees. The plans are unfunded. The Company has reserved the right to modify the benefits. In June 2003, the Company announced a modification to its U.S. retiree health care plans that affects certain future and current retirees and is based on a Retiree Healthcare Savings Account (“RHSA”("RHSA"), where notional accounts will beare established for mosteligible active U.S. paid employees. The notional account reflectsaccounts reflect each year of service beginning at age 40 and is designed to provide employees who retire after December 31, 2003 from Whirlpool with notional fundscredits to apply towards health care premiums. In June 2003, the Company recorded a one-time curtailment gain of $13.5 million, net of tax, related to the modification of its retiree health care plan. The Company provides no significant postretirement medical benefits to non-U.S. employees.

At December 31, 2004 and 2005, discount rates were determined individually for each of its pension plans and the post-retirement plan based on the yield of AA rated non-callable (or callable with make whole provisions) bonds.

In December 2003, the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (the “Act”"Act") was enacted. The Act established a prescription drug benefit program under Medicare, known as Part D, and a federal subsidy to sponsors of retiree health care benefit plans that provide a benefit that is at least actuarially equivalent to Part D. At year-end 2003,In 2004, the Company elected to defer recognition of the accounting effects of the Act, as permitted by FASB Staff Position (“FSP”) 106-1. However, the requirement to remeasure its retiree medical plan caused the deferral to expire. The Company measured the effects of the Act following the guidance in FSPFASB Staff Position ("FSP") 106-2, Accounting"Accounting and Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003. The Company believes that benefits provided to certain participants will be at least actuarially equivalent to Part D and, accordingly," For the year ended December 31, 2004, the Company will be entitled to a subsidy. The Company adopted FSP 106-2 retroactively to the beginning of 2004. Accordingly, the Company has reflected the estimated federal subsidy under the Act as an actuarial gain as required by FSP 106-2, which reduced the existing unrecognized net loss. These changes caused the accumulated other postretirement benefit obligation to decrease by $104 million, and reduced the cost recognized by approximately $15 million for the year ended December 31, 2004.million.

During 2004, the Company’s independent auditor, Ernst & Young LLP (“E&Y”), disclosed to the Securities and Exchange Commission (the “SEC”), the Public Company Accounting Oversight Board, and the Audit Committee of the Company’s Board of Directors that certain non-audit work performed by an E&Y affiliate in China for a subsidiary of the Company has raised possible concerns regarding E&Y’s independence with respect to E&Y’s performance of audit services for the Company.

E&Y disclosed that from 1995 through June 2002, its affiliate in China heldde minimus funds owned by a subsidiary of the Company and used these funds to make employment tax related payments to the applicable tax authority for several expatriate and foreign employees of the Company’s subsidiary. E&Y recently informed the Company that a Malaysian affiliate was also holdingde minimus funds, transferred through a former Arthur Andersen affiliate acting as a court appointed liquidator. Maintaining custody of the assets of an audit client is not permitted under the auditor independence rules set forth in Regulation S-X promulgated by the SEC. In addition, E&Y provided certain expatriate tax services in Italy from approximately 1997 through 1999. The Company made deposits to an E&Y account for payment of taxes, and that account has been inactive since 1999. The balance in the account was refunded to the Company in 2005. These actions in China, Malaysia and Italy are not permitted under the SEC rules and regulations. The activities were discontinued in China in 2002, the activities in Malaysia have been suspended pending appointment of a successor liquidator and the services in Italy were discontinued in 1999. The Audit Committee of the Board of Directors of the Company met and considered the effect of all three matters on the independence of E&Y as external auditor for the Company. Both the Audit Committee and E&Y have considered the impact that the holding and paying of these funds may have had on E&Y’s independence with respect to the Company and each has independently concluded that there has been no impairment of E&Y’s independence. In making its determination, the Audit Committee considered thede minimus amounts involved, the ministerial nature of the activities, and the fact that the financial position or results of operations of the subsidiaries involved were not material to the consolidated financial position and consolidated results of operations.

F-13

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ANDLegal Proceedings

RESULTS OF OPERATIONS—(Continued)

In September 2003, the Company completed the sale of Wellmann to Alno, a prominent German kitchen cabinet manufacturer. Previously, the Company held a 49.5% ownership interest in Wellmann. The Company has a 13% interest in Alno. The sale did not have a material impact to the Company’s financial position or results of operations. The Company analyzed the provisions of FASB Interpretation No. (“FIN”) 46, “Consolidation of Variable Interest Entities”, with respect to its 13% interest in Alno and determined that Alno did not meet the definition of a variable interest entity under FIN 46.

The Company is currently a defendant in 11 purported class action lawsuits in 11 states related to its Calypso clothes washing machine. Two of the original purported class actions have been dismissed. The complaints in these lawsuits generally allege violations of state consumer fraud acts, unjust enrichment, and breach of warranty based on the allegations that the washing machines have various defects. There are no allegations of any personal injury, catastrophic property damage, or safety risk. The complaints generally seek unspecified compensatory, consequential, and punitive damages. The Company believes these suits are without merit and intends to vigorously defend these actions. At this point, the Company cannot reasonably estimate a possible range of loss, if any.

In early 2004, Maytag Corporation filed a claimlawsuit against the Company for patent infringement. The claim alsosuit seeks unspecified damages and an injunction against the continued production or sale of the alleged infringed patented product. A trial date has been set for July 11, 2005. The Company believes this suit is without merit, intends to vigorously defend this suit and at this point cannot reasonably estimate a possible range of loss, if any.

The suit has been stayed pending the outcome of the pending Maytag acquisition.

In 1989, a Brazilian affiliate (now a subsidiary) of the Company brought an action against a financial institution in Brazil seeking a “Declaration"Declaration of Non-Enforceability of Obligations”Obligations" relating to loan documentation entered into without authority by a senior officer of the affiliate. The original amount in dispute was approximately $25 million. In September 2000, a decision in the declaratory action adverse to the Company became final. In 2001, the financial institution began a collection action, and the Company responded with a counterclaim. The lower court dismissed the counterclaim in 2002 and a discretionary appeal of this dismissal was requested in 2003, but no decision on this request has been made. A finalthe Superior Court confirmed the lower court decision in the collection action is not expected for several years.December 2005. The Company plans to continue to aggressively defendprovided for the potential exposure resulting from this matter, and at this point cannot reasonably estimate a possible range of loss.

litigation during 2005.

The Company is involved in various other legal actions arising in the normal course of business. Management, after taking into consideration legal counsel’scounsel's evaluation of such actions, is of the opinion that the outcome of these matters will not have a material adverse effect on the Company’sCompany's financial position or results of operations.

Other

The Brazilian Constitution provides the basis for a tax creditcredits on purchases of raw materials used in production. The credit allows for both the seller and the purchaserapplies to purchases of raw materials to bethat are tax exempt or to have a zero tax rate on sales or purchases of finished product.rate. Several court decisions supported thethat tax credit and, during 2003 and 2004, the Company calculated tax credits under this provision. The original amount recorded as tax credits as of December 31, 2004 is approximately $22 million. The recorded tax credits are currently being challenged in Brazilian courts and atcourts. At this point, the Company cannot reasonably estimate the potential impact, if any, to its consolidated financial position or consolidated results of operations.

On February 13, 2003 the European Union adopted the Waste Electrical and Electronic Equipment (“WEEE”) directive. Among other provisions, the directive stipulates that “producers” will be responsible for the cost of collection, disposal and recycling of waste (“recycling schemes”) for many electrical and electronic products as of August 13, No tax credits were recorded in 2005. The directive required all European Union member states to introduce it into

F-14

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS—(Continued)

national law by no later than August 2004. However, as of February 2005 many member states were still in the drafting stage and had not passed national legislation. As a consequence many of the details concerning responsibilities, costs of the recycling schemes and ability to recover through a visible fee to the end consumer are yet to be determined. The Company is, therefore, presently unable to estimate the potential cost of complying with the directive.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Management has evaluated the accounting policies used in the preparation of the accompanying Consolidated Financial Statements and related notes and believes those policies to be reasonable and appropriate. The Company’sCompany's accounting policies are described in Note 1 to the Consolidated Financial Statements. Certain of these accounting policies require the application of significant judgment by management in selecting the appropriate assumptions for calculating financial estimates. By their nature, these judgments are subject to an inherent degree of uncertainty. The Company’sCompany's critical accounting policies include the following:

Pension and Other Postretirement Benefits

— Accounting for pensions and other postretirement benefits involves estimating the costs of future benefits and attributing the cost over the employee’semployee's expected period of employment with the Company. The determination of the Company’sCompany's obligation and expense for

these costs requires the use of certain assumptions. Those assumptions are included in Note 1614 to the Consolidated Financial Statements and include, among others, the discount rate, expected long-term rate of return on plan assets and health care cost trend rates. These assumptions are subject to change based on, stock and bond market returns, interest rates on high quality bonds, stock and bond markets and medical cost inflation, respectively. As permitted by generally accepted accounting principles,GAAP, actual results that differ from the Company’sCompany's assumptions are accumulated and amortized over future periods and therefore, generally affect its recognized expense and accrued liability in such future periods. While the Company believes that its assumptions are appropriate given current economic conditions and its actual experience, significant differences in results or significant changes in the Company’sCompany's assumptions may materially affect its pension and other postretirement obligations and related future expense. As required by SFASStatements of Financial Accounting Standards ("SFAS") No. 87, SFAS No. 132 (revised 2003) and SFAS No. 106, Whirlpool’sWhirlpool's pension and other postretirement benefit obligations as of December 31, 20042005 and preliminary retirement benefit costs for the 20052006 fiscal year were prepared using the assumptions that arewere determined as ofat December 31, 2004.2005. The following table highlights the sensitivity of Whirlpool’sWhirlpool's December 31, 20042005 retirement obligations and 20052006 retirement benefit costs of its U.S. plans to changes in the key assumptions used to determine those results:

F-15

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ANDMillions of dollars

RESULTS OF OPERATIONS—(Continued)

The analysis is an estimate only. These sensitivities may not be appropriate to use for other years’years' financial results. Furthermore, the impact of assumption changes outside of the ranges shown above may not be approximated by using the above results.

Income Taxes

— As part of the process of preparing its Consolidated Financial Statements, the Company estimates its income taxes in each of the taxing jurisdictions in which itsit operates. This process involves estimating actual current tax expense together with assessing any temporary differences resulting from the different treatment of certain items, such as the timing for recognizing expenses, for tax and accounting purposes in accordance with SFAS No. 109, “Accounting"Accounting for Income Taxes.”" These differences may result in deferred tax assets and liabilities, which are included in the Company’s consolidated balance sheets.Company's Consolidated Balance Sheets. The Company is required to assess the likelihood that its deferred tax assets, which include net operating loss carryforwards and temporary differences that are expected to be deductible in future years, will be recoverable. Realization of the Company’sCompany's net operating loss deferred tax assets is supported by specific

tax strategies and consider planned projections of future profitability. If recovery is not likely, the Company provides a valuation allowance based on its estimates of future taxable income in the various taxing jurisdictions, and the amount of deferred taxes that are ultimately realizable. If future taxable income was lower than expected or if tax-planning strategies were not available as anticipated, the Company may record additional valuation allowances through income tax expense in the period such determination is made. Likewise, if the Company determines that it would be able to realize its deferred tax assets in the future in excess of their net recorded amounts, an adjustment to the deferred tax asset would increase income in the period such determination is made. As of December 31, 20042005 and 2003,2004, the Company had total deferred tax assets of $851$923 million and $703$885 million, respectively, net of valuation allowances of $94$114 million and $88$105 million, respectively (see Note 1513 to the Consolidated Financial Statements). The Company’sCompany's effective tax rate has ranged from 33.9%28.6% to 46.2% over the past five years and has been influenced by audit settlements, tax planning strategies, enacted legislation, and dispersion of global income. A 1% change toincrease in the Company’sCompany's effective tax rate would have decreased 2005 earnings by approximately $6.2 million based on 2004 earnings.$6 million. Future changes in the effective tax rate will be subject to several factors, including enacted laws, tax planning strategies, and business profitability.

In addition, the Company operates within multiple taxing jurisdictions and is subject to audit in these jurisdictions. These audits can involve complex issues, which may require an extended period of time to resolve. In the opinion of management, adequate provisions for income taxes have been made for all years.

Product Recall

— The establishment of a liability for product recall expenses is occasionally required and is impacted by several factors such as customer response rate, consumer options, field repair costs, inventory repair costs, extended warranty costs, communication structure and other miscellaneous costs such as legal, logistics and consulting. The customer response rate, which represents an estimate of the total number of units to be serviced as a percentage of the total number of units impactedaffected by the recall, is the most significant factor in estimating the total cost of each recall. This rate is impacted byreflects several factors, including the type of product, the year manufactured, age of the product sold and current and past experience factors. Significant differences between the Company’sCompany's assumptions and its actual experience or significant changes in its assumptions could have a material impact on the Company’sCompany's product recall reserves.

Befiex Credits

— As discussed above, prior to 2004,2005, the Company’sCompany's Brazilian subsidiariesoperations had been recognizing benefitsrecognized tax credits under the Brazilian government’s export incentive program (“Befiex”) as an offset againstBefiex, which reduces Brazilian federal excise taxtaxes on domestic sales, resulting in an increase in the operations' recorded net sales. SinceBased on a recalculation of available credits and a favorable court decision in the initial grantingfourth quarter of these2005, the Company recognized approximately $23 million of export credits in 1996, it has beenDecember 2005 that is expected to be monetized by the Company’s policy

F-16

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ANDend of the first quarter of 2006.

RESULTS OF OPERATIONS—(Continued)

to recognize these credits as they have been monetized. There have, however, been ongoing legal proceedings relating to this program and it is presently under review within the Brazilian court system. The Company has chosen not to recognize any of our remaining credits of approximately $316 million under the program until the Brazilian courts have confirmed the method used to calculate those remaining credits.

Warranty Obligations

— The estimation of warranty obligations is determined in the same period that revenue from the sale of the related products is recognized. The warranty obligation is based on historical experience and reflects management’smanagement's best estimate of expected costs at the time products are sold. Warranty accruals are adjusted for known or anticipated warranty claims as new information becomes available. Future events and circumstances could materially change the Company’sCompany's estimates and require adjustments to the warranty obligation. New product launches require a greater use of judgment in developing estimates until historical experience becomes available. See Note 97 to the Consolidated Financial Statements for a summary of the activity in the Company’sCompany's product warranty accounts for 20042005 and 2003.

2004.

NEW ACCOUNTING PRONOUNCEMENTS

The American Jobs Creation Act ofIn December 2004, (the “Act”) was signed into law on October 22, 2004. The Company is considering the implications of the Act on repatriation of foreign earnings, which reduces the Federal income tax rate on dividends from non-U.S. subsidiaries. The Financial Accounting Standards Board (“FASB”("FASB") issued FSP 109-2 in December 2004 which requires the recording of tax expense if and when an entity decides to repatriate foreign earnings subject to the Act. As of December 31, 2004, management has not decided whether, and to what extent, the Company would repatriate foreign earnings under the Act, and accordingly, the financial statements do not reflect any provision for tax on undistributed foreign earnings which may be repatriated subject to the provisions of the Act. See Note 15 of the Notes to Consolidated Financial Statements for further discussion of the potential impact of the Act on the financial statements.

In December 2004, the FASB issued SFAS No. 123(R)123 (R), “Share-Based Payments”. "Share-Based Payments." SFAS No. 123(R) would require123 (R) requires the Company to measure all employee stock-based compensation awards using a fair-value method and record such expense in its consolidated financial