[LOGO]
WHIRLPOOL CORPORATION
[LETTERHEAD WHIRLPOOL CORPORATION]
WHIRLPOOL CORP. REPORTS FIRST QUARTER 2002 RESULTS;
CORE EARNINGS PER SHARE UP 20 PERCENT
--NORTH AMERICA UNIT DELIVERS STRONG OPERATING PERFORMANCE--
BENTON HARBOR, Mich., April 17, 2002--Whirlpool Corporation (NYSE:WHR) today
announced 2002 first quarter core earnings of $92 million, or $1.32 per diluted
share, compared with core earnings of $73 million, or $1.10 per diluted share,
in the first quarter of 2001.
First quarter net earnings were $84 million, or $1.21 per diluted
share, compared with net earnings of $41 million, or $0.61 per diluted share, in
the same period last year. Net sales of $2.6 billion increased 2 percent, or 5
percent absent currency translations, from the first quarter of 2001.
"These results underscore the solid and consistent performance of our
global operations as they deliver innovation to consumers worldwide," said David
R. Whitwam, chairman and chief executive officer, Whirlpool Corporation.
"Whirlpool North America continued to build on its record 2001 performance and
delivered outstanding results, including a significant improvement in core
operating profit and first quarter records in sales and unit shipments. Our
operations also contributed to the results by driving cost savings from
productivity improvements and our previously announced restructuring
initiative."
Whitwam added: "During the quarter, we announced our intent to acquire
home appliance manufacturers Vitromatic S.A. de C.V., based in Mexico, and Polar
S.A., based in Poland. These businesses and their brands will give us
significant new growth opportunities."
First-Quarter Results
The following table reconciles 2002 and 2001 core earnings performance
with net earnings (GAAP), and provides a view of the underlying strength of the
company's operations. Items reconciled in the table include charges (after tax)
for restructuring and related charges and a change in accounting principle.
Earnings Reconciliation First Qtr. 2002 First Qtr. 2001
-------------------------- --------------------------
Earnings EPS Earnings EPS
------------ ------------ ------------ ------------
in millions in millions
Core earnings from continuing operations $ 92 $ 1.32 $ 73 $ 1.10
Restructuring and related charges (8) (0.11) (40) (0.61)
------------ ------------ ------------ ------------
Earnings from continuing operations 84 1.21 33 0.49
Adoption of SFAS No. 133 - - 8 0.12
------------ ------------ ------------ ------------
Net earnings (GAAP) $ 84 $ 1.21 $ 41 $ 0.61
============ ============ ============ ============
The company adopted the non-amortization provisions of SFAS No. 142, "Goodwill
and Other Intangible Assets," as of Jan. 1, 2002. The accounting change resulted
in a first quarter earnings improvement of $0.08 per diluted share, which was
offset by a reduction in pension credits.
--more--
PAGE TWO/WHIRLPOOL CORP. REPORTS FIRST QUARTER 2002 RESULTS
First-Quarter Region Review
Whirlpool North America posted a significant year-over-year improvement in
operating performance as the U.S. economy continued to expand on the strength of
consumer spending. Net sales increased 12 percent from the prior year period as
appliance industry unit shipments increased 6 percent. Based on the successes of
recent kitchen and laundry introductions--such as the Whirlpool brand Duet(TM)
washer/dryer pair and the KitchenAid brand Pro Line(TM) series of premium ranges
and cooktops--Whirlpool North America increased its market share from 2001
year-end record levels. Restructuring related cost savings and productivity
gains from the company's ongoing Operational Excellence process helped improve
core operating profit by 20 percent.
During the quarter, Whirlpool introduced a number of appliance
innovations. For example, Whirlpool brand introduced Polara, the world's first
refrigerated range that offers meal preparation flexibility to consumers with
busy schedules. Polara combines refrigeration, cooking and control technologies
in a standard-size range, which keeps prepared meals cool for up to 24 hours and
then automatically converts to an oven that bakes the food at times convenient
to consumers. KitchenAid brand introduced the new Briva in-sink dishwasher,
which cleans up to three times faster than standard-size dishwashers. Briva
uniquely matches the space constraints of small kitchens, and serves as a
cleaning companion to full-size dishwashers for consumers who enjoy cooking and
entertaining in the home.
In February, Whirlpool announced that it intends to acquire the
outstanding 51 percent equity interest in Vitromatic S.A. de C.V., an appliance
manufacturing and distribution joint venture in Mexico, currently co-owned by
Whirlpool and Vitro S.A. As a wholly owned subsidiary, the Vitromatic business
will give Whirlpool North America the ability to directly serve Mexico's growing
domestic market and expand export opportunities. Vitromatic manufactures ranges,
refrigerators and laundry equipment under the Whirlpool, Acros, Supermatic and
Crolls brand names.
The company has revised its forecast for U.S. industry demand for the
year to 5 percent from 2 percent growth, based on current economic projections
and consumer spending trends. Whirlpool Europe's operating performance improved
in the quarter, despite continuing economic challenges in the region. Net sales
decreased 8 percent, or 3 percent excluding currency translations, as appliance
industry unit shipments declined between 4 and 5 percent from the first quarter
of 2001. In this environment, Whirlpool Europe's core operating margin improved
more than 1 point, compared to the same period last year.
In March, the company announced its intent to acquire Polar S.A., a
leading home appliance manufacturer based in Poland. The acquisition is expected
to expand Whirlpool Europe's manufacturing operations and opportunities within
Poland's domestic market and throughout Europe. Polar will join Whirlpool
Europe's portfolio of leading brands, which includes Whirlpool, Bauknecht and
Ignis.
Whirlpool Latin America's performance reflected the economic conditions within
the region. First-quarter net sales decreased 19 percent, or 11 percent
excluding currency translations. Appliance industry unit shipments within the
region declined approximately 14 percent compared to last year's quarter.
Despite the challenging environment, core operating profit margins improved
slightly due to cost savings from productivity improvements and restructuring
efforts.
Whirlpool Asia's first quarter sales were down 2 percent from the first quarter
of 2001, or up slightly excluding currency translations. Despite challenging
economic and industry environments within the region, unit shipments improved
from the same period last year. New Whirlpool brand laundry products introduced
in China, as well as air conditioning products introduced in India and Thailand,
contributed to the results.
--more--
PAGE THREE/WHIRLPOOL CORP. REPORTS FIRST QUARTER 2002 RESULTS
Restructuring
The company recorded first quarter pre-tax charges of $12 million for
restructuring and related activities as a part of its global restructuring
effort announced in December 2000. The first-quarter charges relate to
previously announced activities.
During the quarter, the company announced a new restructuring
initiative involving the closure of its Canadian cooking products facility in
2004 and the transfer of production to the United States. The company expects to
record a pre-tax charge of approximately $16 million for the initiative in the
fourth quarter of 2002.
In total, the company's global restructuring effort is expected to
result in pre-tax charges of between $300 million to $350 million. To date, the
restructuring effort has resulted in pre-tax charges of $224 million. The
remaining charges will be announced by the end of 2002. When fully implemented,
the restructuring effort is expected to yield annualized savings of between $225
million and $250 million.
Outlook
"Our operations will continue to drive improved performance worldwide,
with ongoing introductions of differentiated products and cost savings from
restructuring activities and productivity improvements," Whitwam said. "Based on
the current forecasts of global economies and industry conditions, we expect to
deliver a 10 percent improvement in second-quarter and full-year core earnings
in 2002."
At 9:30 a.m. (EDT) Wednesday, April 17, 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, Michigan, 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 MARCH 31
(millions of dollars except share and dividend data)
Three Months Ended Three Months Ended
---------------------------------- ----------------------
2002 Pro-forma 2001 Pro-forma 2002 2001
---------------- ---------------- ---------- ----------
Net sales $ 2,574 $ 2,517 $ 2,574 $ 2,517
EXPENSES:
Cost of products sold 1,973 1,939 1,982 1,959
Selling and administrative 404 404 406 406
Intangible amortization 1 7 1 7
Restructuring costs - - 1 48
---------------- ---------------- ---------- ----------
2,378 2,350 2,390 2,420
---------------- ---------------- ---------- ----------
OPERATING PROFIT 196 167 184 97
OTHER INCOME (EXPENSE):
Interest and sundry income (expense) (20) (5) (20) (5)
Interest expense (34) (44) (34) (44)
---------------- ---------------- ---------- ----------
EARNINGS BEFORE INCOME TAXES AND OTHER ITEMS 142 118 130 48
Income taxes 49 43 45 17
---------------- ---------------- ---------- ----------
EARNINGS BEFORE EQUITY EARNINGS AND MINORITY INTERESTS 93 75 85 31
Equity in earnings of affiliated companies - 1 - 1
Minority interests (1) (3) (1) 1
---------------- ---------------- ---------- ----------
EARNINGS BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGE 92 73 84 33
Cumulative effect of change in accounting principle, net of tax - - - 8
---------------- ---------------- ---------- ----------
NET EARNINGS $ 92 $ 73 $ 84 $ 41
================ ================ ========== ==========
Per share of common stock:
Basic earnings before cumulative effect of accounting change $ 1.36 $ 1.11 $ 1.25 $ .49
Cumulative effect of change in accounting principle, net of tax - - - .13
---------------- ---------------- ---------- ----------
Basic net earnings $ 1.36 $ 1.11 $ 1.25 $ .62
================ ================ ========== ==========
Diluted earnings before cumulative effect of accounting change $ 1.32 $ 1.10 $ 1.21 $ .49
Cumulative effect of change in accounting principle, net of tax - - - .12
---------------- ---------------- ---------- ----------
Diluted net earnings $ 1.32 $ 1.10 $ 1.21 $ .61
================ ================ ========== ==========
Dividends declared $ .34 $ .34 $ .34 $ .34
================ ================ ========== ==========
Note: Pro-forma results exclude a change in accounting principle, restructuring,
and one-time charges related to restructuring within COGS and SG&A.
CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED)
WHIRLPOOL CORPORATION
(millions of dollars)
March 31 December 31 March 31 December 31
2002 2001 2002 2001
--------- ----------- ---------- -----------
ASSETS LIABILITIES AND STOCKHOLDERS' EQUITY
Current Assets Current Liabilities
- -------------- -------------------
Cash and equivalents $ 138 $ 316 Notes payable $ 469 $ 148
Trade receivables, less allowances of Accounts payable 1,351 1,427
(2002: $84 ;2001: $93) 1,620 1,515 Employee compensation 207 252
Inventories 1,205 1,110 Deferred income taxes 111 102
Prepaid expenses and other 223 194 Accrued expenses 577 623
Deferred income taxes 117 176 Accrued product recalls 93 239
--------- ----------
Total Current Assets 3,303 3,311 Restructuring costs 65 77
--------- ----------
Other current liabilities 98 195
Current maturities of long-term debt 214 19
---------- ---------
Total Current Liabilities 3,185 3,082
---------- ---------
Other Liabilities
-----------------
Deferred income taxes 177 177
Other Assets Postemployment benefits 628 623
- ------------
Investment in affiliated companies 117 117 Other liabilities 236 205
Intangibles, net 17 18 Long-term debt 1,055 1,295
---------- ---------
Goodwill 678 685 2,096 2,300
---------- ---------
Deferred income taxes 354 354
Prepaid pension costs 217 208
Other 215 222 Minority Interests 101 127
--------- ----------
1,598 1,604
--------- ----------
Stockholders' Equity
--------------------
Property, Plant and Equipment Common stock 87 86
- -----------------------------
Land 62 56 Paid-in capital 547 480
Buildings 885 886 Retained earnings 2,531 2,470
Machinery and equipment 4,380 4,372 Accumulated other comprehensive income (730) (697)
Accumulated depreciation (3,327) (3,262) Treasury stock - at cost (916) (881)
--------- ---------- ---------- ---------
2,000 2,052 Total Stockholders' Equity 1,519 1,458
--------- ---------- ---------- ---------
Total Assets $ 6,901 $ 6,967 Total Liabilities and Stockholders' Equity $ 6,901 $ 6,967
========= ========== ========== =========