EXHIBIT 1
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Contract: Christopher Wyse
616/923-3417
Christopher_J_Wyse@email.whirlpool.com
WHIRLPOOL CORPORATION, AS EXPECTED, REPORTS THIRD-QUARTER
LOSS FROM RESTRUCTURING; OPERATING IMPROVEMENTS CONTINUE
BENTON HARBOR, Mich. -- Oct. 15, 1997 -- Whirlpool Corporation (NYSE: WHR),
as expected, announced today a third-quarter 1997 net loss of $218 million, or
$2.90 per share, versus earnings of $21 million, or 28 cents per share, for the
same period in 1996; however, on an ongoing basis, the company posted a 55
percent increase in net earnings for the quarter.
Results for the period include a previously announced pre-tax charge of
$361 million to better align the company's cost structure within the global
home-appliance marketplace, which is expected to result in annual savings of
about $180 million when fully implemented by year 2000. In addition, the
results include a pre-tax charge of $36 million to provide a reserve for certain
Whirlpool Financial Corporation aerospace assets.
Excluding the charges, third-quarter 1997 net earnings were $62 million, or
82 cents per share. In the third quarter of 1996 net earnings were $40 million,
or 53 cents per share, excluding a pre-tax charge in that quarter. Net sales
for the most-recent quarter, were $2 billion, down 5 percent from the third
quarter of 1996. Removing the third quarter 1997 charges, nine-month earnings
were $173 million, or $2.30 per share, up 33 percent from $130 million, or $1.73
per share, through September 1996, excluding the third quarter 1996 pre-tax
charge. Year-to-date net sales reached $6.1 billion, down about 5 percent from
the first three quarters of 1996.
"Our recently announced plans to purchase majority interest in our Latin
American affiliate, Brasmotor S.A., combined with the realignment of our cost
structure and the pending sale of most of Whirlpool Financial's assets, position
Whirlpool for outstanding value creation going forward," said Whirlpool Chairman
and CEO David R. Whitwam.
In North America, Whirlpool's third-quarter product shipments increased
slightly, while revenues declined about 2 percent compared with the same period
- more -
[WHIRLPOOL LOGO] Administrative Center, Benton Harbor, Michigan 49022
in 1996. However, the company's operating profit and margins, excluding the
charges, remain strong. The company continues to perform well in this mature
marketplace, despite intense competitive and pricing pressures. The company
expects full-year industry volumes to be down slightly from 1996, largely due to
weak air conditioner sales resulting from a cool summer season.
Whirlpool's European results improved for the third consecutive quarter,
excluding the charge, as the company recorded higher unit shipments and
dramatically increased operating profit for the quarter, versus a small
operating loss in the third-quarter of 1996. The gains continue to be led by
the company's extensive new product line, which provides improved margins.
Whirlpool Europe's revenues were also about 8 percent higher, in local currency,
absent the effect of currency translations. The company expects to continue its
performance improvement even though full-year 1997 appliance-industry volumes
are expected to be flat.
Company earnings from Latin America fell 45 percent from a record high
third quarter in 1996. However, the company continues to maintain its leading
market position in Brazil and throughout Latin America, and it expects to see
solid operating improvements in the fourth quarter as the Latin markets come
into their traditionally strong appliance-buying season.
Purchases of major home appliances, in Latin America, should increase
solidly in the next decade with annual growth rates outpacing mature markets.
Whirlpool Asia, as anticipated, sustained an operating loss. By year's
end, the company expects to discontinue operations at two Chinese joint ventures
and lower its costs in the region. After this refocusing of resources in China,
the company currently expects to realize growth in both units and revenues, as
well as significant operating performance improvements.
A dramatic slowdown from prior years' growth levels, and increased
competition, have created a challenging operating environment in India, the
other major market in Whirlpool's Asian region. However, the company expects
performance improvements in the fourth quarter, when the purchases of white-
goods are historically strongest.
- more -
Whirlpool Financial Corporation (WFC), without the reserve charge, reported
a significant increase in revenue and operating profit for the third quarter
versus the same period in 1996. WFC is reflected as a discontinued operation,
and Whirlpool will no longer report results for WFC as it anticipates completing
the sale of most of WFC's assets to Transamerica Corporation, by year-end 1997.
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 about 140
countries.
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CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS (UNAUDITED)
WHIRLPOOL CORPORATION AND SUBSIDIARIES
FOR THE PERIOD ENDED SEPTEMBER 30
(millions of dollars except share and dividend data)
Third Quarter Nine Months
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1997 1996 1997 1996
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Net sales $ 2,043 $ 2,155 $ 6,107 $ 6,397
EXPENSES:
Cost of products sold 1,593 1,679 4,717 4,979
Selling and administrative 398 383 1,152 1,154
Intangible amortization 8 9 25 27
Restructuring costs 308 30 308 30
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2,307 2,101 6,202 6,190
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OPERATING PROFIT (LOSS) (264) 54 (95) 207
OTHER INCOME (EXPENSE):
Interest and sundry income (expense) (7) (1) (10) (8)
Interest expense (37) (39) (110) (117)
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EARNINGS (LOSS) BEFORE INCOME TAXES
AND OTHER ITEMS (308) 14 (215) 82
Income taxes (71) 18 (26) 51
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EARNINGS (LOSS) FROM CONTINUING OPERATIONS
BEFORE EQUITY EARNINGS AND MINORITY INTERESTS (237) (4) (189) 31
Equity in affiliated companies 15 20 61 61
Minority interests 22 4 32 9
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EARNINGS (LOSS) FROM CONTINUING OPERATIONS (200) 20 (96) 101
Discontinued operations less applicable taxes (18) 1 (11) 10
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NET EARNINGS (LOSS) $ (218) $ 21 $ (107) $ 111
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Per share of common stock:
Primary earnings (loss) from continuing operations $ (2.66) $ 0.27 $ (1.28) $ 1.35
Primary earnings (loss) from discontinued operations (0.24) 0.01 (0.14) 0.13
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Primary earnings (loss) $ (2.90) $ 0.28 $ (1.42) $ 1.48
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Cash dividends $ 0.34 $ 0.34 $ 1.02 $ 1.02
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See notes to consolidated condensed financial statements.
CONSOLIDATED CONDENSED BALANCE SHEETS
WHIRLPOOL CORPORATION AND SUBSIDIARIES
(millions of dollars)
Whirlpool Corporation
(Consolidated)
--------------------------
September 30 December 31
1997 1996
(Unaudited) (Audited)
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ASSETS
CURRENT ASSETS
Cash and equivalents $ 90 $ 129
Trade receivables, less allowances
(1997: $63 ;1996: $45) 1,312 966
Financing receivables and leases,
less allowances
(1997: - ;1996: $12) - 1,400
Inventories 911 1,034
Other current assets 380 283
Net assets of discontinued operations 1,594 -
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TOTAL CURRENT ASSETS 4,287 3,812
Investments and other assets 1,026 830
Financing receivables and leases,
less allowances
(1997: - ;1996: $38) - 705
Intangibles, net 757 870
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1,783 2,405
Property, plant and equipment 3,683 3,839
Accumulated depreciation (2,119) (2,041)
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1,564 1,798
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TOTAL ASSETS $ 7,634 $ 8,015
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Whirlpool Corporation
(Consolidated)
----------------------------
September 30 December 31
1997 1996
(Unaudited) (Audited)
----------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Notes payable $2,055 $2,157
Accounts payable 810 983
Other current liabilities 1,128 882
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TOTAL CURRENT LIABILITIES 3,993 4,022
Long-term debt 900 955
Postemployment benefits 573 563
Other liabilities 326 367
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1,799 1,885
Minority interests 131 182
STOCKHOLDERS' EQUITY
Common stock 82 81
Paid-in capital 271 246
Retained earnings 1,734 1,918
Unearned restricted stock (6) (7)
Currency translation adjustments (133) (76)
Treasury stock - at cost (237) (236)
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TOTAL STOCKHOLDERS' EQUITY 1,711 1,926
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TOTAL LIABILITIES AND EQUITY $7,634 $8,015
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See notes to consolidated condensed financial statements.