NEWS RELEASE
[LOGO OF WHIRLPOOL]
CONTACT: Whirlpool Corporation
Media: Tom Kline, 616/923-3738
thomas_e_kline@email.whirlpool.com
Financial: Thomas Filstrup, 616/923-3189
thomas_c_filstrup@email.whirlpool.com
WHIRLPOOL CORP. REPORTS FOURTH QUARTER AND
FULL-YEAR CORE EARNINGS IN LINE WITH EXPECTATIONS
BENTON HARBOR, Mich., Feb. 5, 2002--Whirlpool Corporation (NYSE:WHR) today
announced 2001 fourth quarter core earnings of $109 million, or $1.58 per
diluted share, compared with $67 million, or $1.00 per diluted share, in fourth
quarter 2000. Full-year core earnings were $371 million, or $5.45 per diluted
share, compared with $367 million, or $5.20 per diluted share, in 2000. The core
earnings were in line with expectations.
"Despite a period of unprecedented challenges to economies and markets
worldwide, our global business delivered solid fourth quarter and full-year
operating results," said David R. Whitwam, chairman and chief executive officer,
Whirlpool Corporation.
Fourth quarter net sales of $2.6 billion increased 3 percent, or 5 percent
absent currency translations, from the previous year quarter. Full-year sales of
$10.3 billion were level with 2000, or increased 3 percent absent currency
translations.
Full-year free cash flow of $533 million was a record for the company.
"These results reflect our global organization's success in differentiating
Whirlpool's brands and innovative products, and the cost savings from our
productivity improvements and restructuring activities," Whitwam said.
"Whirlpool North America, which is our largest business unit, delivered
exceptional full-year performance and achieved record market share and operating
results within a weak industry environment."
Fourth Quarter/Full-Year Results
The following table reconciles the company's core earnings performance with
net earnings (GAAP), providing a view of the underlying strength of its
operations. Items reconciled in the table include 2001 charges, after tax, for
restructuring and previously announced product recalls.
Earnings Reconciliation Fourth Qtr. 2001 Full-Year 2001
------------------------- -------------------------
Earnings EPS Earnings EPS
---------- -------- ---------- ---------
in millions in millions
Core earnings from operations $ 109 1.58 $ 371 5.45
Restructuring and related charges (91) (1.32) (156) (2.29)
Product recall charges 3 0.05 (181) (2.66)
----- ----- ----- -----
Earnings from continuing operations 21 0.31 34 0.50
----- ----- ----- -----
Discontinued operations - - (21) (0.31)
Adoption of SFAS No. 133 - - 8 0.12
----- ----- ----- -----
Net earnings (GAAP) 21 0.31 21 0.31
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--more--
ADMINISTRATIVE CENTER . BENTON HARBOR, MICHIGAN 49022 . TELEPHONE: 616-923-6000
. www.whirlpoolcorp.com
PAGE TWO/ WHIRLPOOL CORP. REPORTS FOURTH QUARTER AND
FULL-YEAR CORE EARNINGS IN LINE WITH EXPECTATIONS
Fourth-Quarter Region Review
Whirlpool North America posted significant improvement in operating
performance during the quarter. Sales increased 11 percent versus fourth quarter
2000, and core operating profits improved 55 percent from last year's period.
Strong brand demand continued in the quarter as new products sold through the
company's value-added distribution channels led to higher fourth quarter volumes
and higher average selling prices. Continued cost reductions and productivity
gains also contributed to the improvement. Appliance industry unit shipments
increased approximately 10 percent compared to fourth quarter 2000.
The new Whirlpool brand Duet(TM) washer and dryer continued to generate
strong consumer demand as trade partner distribution expanded throughout the
quarter. Duet represents the best performing and most energy efficient
front-loading washer technology on the market today.
Whirlpool Europe's performance improved, despite continuing economic
challenges in the region. In this environment, fourth-quarter sales increased 6
percent, or up 3 percent excluding currency translations, as the Euro
strengthened during the quarter. Core operating profit improved over 4 points as
a percent of sales versus fourth quarter 2000, due to an improved product mix,
productivity gains and benefits from restructuring efforts, partially offset by
an inventory write-down. Appliance industry unit shipments were flat compared to
fourth quarter 2000. The successful rollout of the new Whirlpool brand
Maximo(TM) microwave oven contributed significantly to the Whirlpool brand
growth during the quarter and helped Whirlpool strengthen its position as the
No. 1 appliance brand in Europe.
Whirlpool Latin America's performance was affected by economic conditions
throughout the region. Fourth quarter sales declined 24 percent, or 9 percent
excluding currency translations. Appliance industry unit shipments declined an
estimated 7 percent compared to last year's quarter. In this environment, core
operating profits remained solid, but were negatively affected by exchange rate
translation, lower tax credits and bad debt reserves established for potential
losses in the Argentina market. These issues were partially offset by a
reduction in pension liabilities.
Whirlpool Asia's sales decreased by 9 percent, or down 7 percent excluding
currency translations, as performance was influenced by continuing economic
weakness in regional markets and currency devaluation in Australia. Increased
shipments and core operating profit in India and China were offset by declines
in other Whirlpool markets in the Asian region. Contributing to the solid
performance in India and China was the success of new product introductions,
including the Whirlpool brand top loading clothes washer and frost-free
refrigerator in India, and the Jupiter(TM) clothes washer in China.
Restructuring Activities
As part of the company's global restructuring effort, announced in December
2000, the company recorded a charge of $107 million before tax for restructuring
and related activities in the fourth quarter 2001. Most of the charge related to
European activities that will eliminate approximately 770 positions in the
region. The largest initiative involves the transfer of countertop microwave
oven production lines from Sweden to Whirlpool's production facility in China.
For the year, the restructuring activities have resulted in a pre-tax
charge of $212 million. The activities, which produced savings of about $47
million in 2001, are expected to produce savings of approximately $135 million
on an annualized basis.
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PAGE THREE/ WHIRLPOOL CORP. REPORTS FOURTH QUARTER AND
FULL-YEAR CORE EARNINGS IN LINE WITH EXPECTATIONS
In total, the company's global restructuring effort is expected to result
in pre-tax charges of between $300 million to $350 million and produce
annualized savings of between $225 million and $250 million. The company expects
the global restructuring effort to be completed by the end of 2002.
Product Recall
On Oct. 16, 2001, the company announced a recall of certain microwave oven
hood-combination products and recognized a $300 million pre-tax charge in the
third quarter to cover estimated costs to conduct the recall. Since October, the
company has been able to reduce the costs associated with the recall by $79
million, due to the development of a more efficient service repair procedure,
which enables faster repairs and reduced costs.
On Jan. 31, 2002, the company announced the recall of certain dehumidifier
products and recorded a fourth-quarter pre-tax charge of $74 million for
estimated costs associated with the recall. Consequently, the net effect of
these two events had no material impact on fourth quarter earnings.
2002 Outlook
"We do not anticipate a broad-based recovery in the global economies until
the second half of the year," said Whitwam. "However, based on introductions of
differentiated products and services, brand building and innovation activities,
and cost savings through restructuring activities and productivity improvements,
we expect to build on our 2001 performance and deliver 5-to-10 percent core
earnings improvement in 2002."
Whirlpool North America's performance is expected to continue to be strong
throughout 2002, and Latin America's performance is expected to strengthen in
the second half. Operating profits in Europe and Asia are expected to improve on
a quarter-by-quarter basis in 2002.
In 2002, appliance industry shipments are expected to be flat in North
America, Europe and Asia, and up slightly in Latin America.
At 9:00 a.m. (EST) Tuesday, February 5, the company will be hosting a
conference call, which can be heard by visiting www.whirlpoolcorp.com and
clicking on the "Investors" button and then the "Conference Call Audio" menu
item.
Whirlpool Corporation is the world's leading manufacturer and marketer of
major home appliances. Headquartered in Benton Harbor, the company manufactures
in 13 countries and markets products under 11 major brand names in more than 170
countries. Additional information about the company can be found on the Internet
at www.whirlpoolcorp.com.
This news release contains forward-looking statements, as that term is
defined in the Private Securities Litigation Reform Act of 1995. In addition to
the expected appliance industry results for 2002 noted in this news release,
there are certain factors that could cause results to differ materially from
those anticipated by some of the statements made. These factors are listed in
the company's most recently filed Form 10-Q and/or Form 10-K.
###
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS (UNAUDITED)
WHIRLPOOL CORPORATION
FOR THE PERIOD ENDED DECEMBER 31
(millions of dollars except share and dividend data)
Three Months Ended Full Year
------------------ --------------
2001 Pro-forma 2001 2000 2001 Pro-forma 2001 2000
-------------- ---- ---- -------------- ---- ----
Net sales $ 2,647 $ 2,647 $ 2,579 $ 10,343 $ 10,343 $ 10,325
EXPENSES:
Cost of products sold 1,971 1,989 1,966 7,872 7,925 7,838
Selling and administrative 430 436 440 1,630 1,639 1,651
Intangible amortization 7 7 7 28 28 29
Product recall costs - (5) - - 295 -
Restructuring costs - 83 - - 150 -
------- -------- -------- -------- -------- --------
2,408 2,510 2,413 9,530 10,037 9,518
------- -------- -------- -------- -------- --------
OPERATING PROFIT 239 137 166 813 306 807
OTHER INCOME (EXPENSE):
Interest and sundry income (expense) (25) (25) (25) (51) (51) (50)
Interest expense (34) (34) (48) (162) (162) (180)
------- -------- -------- -------- -------- --------
EARNINGS BEFORE INCOME TAXES
AND OTHER ITEMS 180 78 93 600 93 577
Income taxes 58 46 24 207 43 200
------- -------- -------- -------- -------- --------
EARNINGS BEFORE EQUITY EARNINGS
AND MINORITY INTERESTS 122 32 69 393 50 377
Equity in earnings of affiliated companies (6) (6) 1 (4) (4) 3
Minority interests (7) (5) (3) (18) (12) (13)
------- -------- -------- -------- -------- --------
EARNINGS FROM CONTINUING OPERATIONS BEFORE CUMULATIVE 109 21 67 371 34 367
EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE
Loss from discontinued operations, net of tax - - - - (21) -
Cumulative effect of change in accounting
principle, net of tax - - - - 8 -
------- -------- -------- -------- -------- --------
NET EARNINGS $ 109 $ 21 $ 67 $ 371 $ 21 $ 367
======= ======== ======== ======== ======== ========
Per share of common stock:
Basic earnings from continuing operations $ 1.62 $ 0.31 $ 1.01 $ 5.56 $ 0.51 $ 5.24
Loss from discontinued operations, net of tax - - - - (0.32) -
Cumulative effect of change in accounting
principle, net of tax - - - - 0.12 -
------- -------- -------- -------- -------- --------
Basic net earnings $ 1.62 $ 0.31 $ 1.01 $ 5.56 $ 0.31 $ 5.24
======= ======== ======== ======== ======== ========
Diluted earnings from continuing operations $ 1.58 $ 0.31 $ 1.00 $ 5.45 $ 0.50 $ 5.20
Loss from discontinued operations, net of tax - - - - (0.31) -
Cumulative effect of change in accounting
principle, net of tax - - - - 0.12 -
------- -------- -------- -------- -------- --------
Diluted net earnings $ 1.58 $ 0.31 $ 1.00 $ 5.45 $ 0.31 $ 5.20
======= ======== ======== ======== ======== ========
Dividends declared $ 0.34 $ 0.34 $ 0.34 $ 1.36 $ 1.36 $ 1.36
======= ======== ======== ======== ======== ========
Note: 2001 Pro-forma results exclude a loss from discontinued operations, a change in accounting principle, restructuring, and
one-time charges related to restructuring within COGS and SG&A, and product recall charges.
CONSOLIDATED CONDENSED BALANCE SHEETS
WHIRLPOOL CORPORATION
As of December 31
(millions of dollars)
2001 2000
------- -------
ASSETS
Current Assets
- --------------
Cash and equivalents $ 316 $ 114
Trade receivables, less allowances of
(2001: $93; 2000: $103) 1,515 1,748
Inventories 1,110 1,119
Prepaid expenses and other 185 206
Derivative financial instruments 9 -
Deferred income taxes 176 50
------- -------
Total Current Assets 3,311 3,237
Other Assets
- ------------
Investment in affiliated companies 117 113
Intangibles, net 703 762
Deferred income taxes 354 253
Derivative financial instruments 7 -
Other 423 403
------- -------
1,604 1,531
Property, Plant and Equipment
- -----------------------------
Land 56 64
Buildings 886 838
Machinery and equipment 4,372 4,374
Accumulated depreciation (3,262) (3,142)
------- -------
2,052 2,134
------- -------
Total Assets $ 6,967 $ 6,902
======= =======
2001 2000
---- ----
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
- -------------------
Notes payable $ 148 $ 961
Accounts payable 1,427 1,257
Employee compensation 252 256
Accrued expenses 931 795
Product recall liability 239 -
Derivative financial instruments 9 -
Restructuring costs 77 5
Current maturities of long-term debt 19 29
------- -------
Total Current Liabilities 3,102 3,303
Other Liabilities
- -----------------
Deferred income taxes 177 175
Derivative financial instruments 13 -
Postemployment benefits 623 630
Other liabilities 172 168
Long-term debt 1,295 795
------- -------
2,280 1,768
Minority Interests 127 147
Stockholders' Equity
- --------------------
Common stock 86 84
Paid-in capital 480 393
Retained earnings 2,470 2,539
Unearned restricted stock - (11)
Accumulated other comprehensive income (697) (495)
Treasury stock - at cost (881) (826)
------- -------
Total Stockholders' Equity 1,458 1,684
------- -------
Total Liabilities and Stockholders' Equity $ 6,967 $ 6,902
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