whirlpool 2004ar

2004 Annual Report

Customer Loyalty … the Core of our Strategy

Customer Passion … the Focus of our Business

About the cover:

“Because there are times when a few grass stains simplydon't matter.” The cover image (from Bauknecht's “LiveToday” campaign), and many photos throughout thisannual report are taken from Whirlpool's regional adver-tising campaigns. They reflect the essence of our brands,the lifestyles of our customers, and how our productsenhance their lives.

Table of Contents

President’s Letter 2Financial Highlights 4Business Overview 6New Product Innovation 12North America Operating Review 14Europe Operating Review 16Latin America Operating Review 17Asia Operating Review 18Financial Summary 23Consolidated Condensed

Financial Statements 27Reports of Independent

Auditors and Management 31Eleven-Year Consolidated

Statistical Review 32Shareholders’ and Other

Information 34

"Sensing the Difference" Whirlpool Europe's brand positioning campaign conveys thefeatures of the region's "6th Sense" line of innovative products.Represented here: "Origami," a new line of accessories thatenhance the performance of the cooking hob.

Fifteen years ago, Whirlpool began a strategy thathas continually grown from a focus on manufac-turing productivity and our global operating plat-form … and evolved through strong branding,innovative products, and now our more recentspotlight on customer loyalty. Today, our strategyis as much about winning the faith of consumersas it is a culmination of all the previous strategicinvestments we've made to earn and win theirloyalty. Even more so, in the face of today's dra-matically changed manufacturing environment,customer loyalty at Whirlpool remains the heartof the right strategy at the right time.

Over the years, we've transformed our businessfrom a regional, technology-centric and trade-driven approach to a global consumer strategythat balances branding requirements, brings con-sumers in at the earliest stage and makes sure wedeliver on our brand promise while leveraging ourglobal platform.

In short, at a time when those in manufactur-ing and industry are being forced to react to rapidand unexpected cost increases throughout theexternal environment, we expect to realize evenmore benefits and value from our customer-focused strategy.

Customer LoyaltyThe Core of Our Strategy

The benefits of our strategy provided us the capacity to offset unprecedented costs.

Chairman’s Letter

Our Business: the passion of our customersIn 2004, we experienced a dynamic global business environment with robust demand for appliances,higher costs for key materials, and a continued evolution of growing international competition. Againstthis backdrop, today's consumers and trade partners are more knowledgeable and more demanding thanever before.

In this challenging environment, the only companiesassured a chance at success will be those with a focus onunderstanding consumer needs, developing highly innova-tive branded solutions, the ability to effectively serve tradepartners big and small, and a relentless drive to improveproductivity and quality. These abilities are required tocreate value for shareholders, customers and employeesalike. And today, Whirlpool has in place a unique valuecreation strategy addressing each of these issues to suc-ceed against the challenges of the global marketplace mov-ing forward.

The core of our strategy is to create unmatched cus-tomer loyalty for our brands. The focus of our businessis the passion of our customers – their emotional andrational expectations when purchasing and owning homeappliances. Managing our resources to meet those expecta-tions is paramount both for our long-term success and ourability to adjust to short-term market fluctuations.

I am confident the transformation currently underwaywithin our company will create value for our shareholdersby placing us in the best cost, best trade partner and bestconsumer position in the industry.

2004: A Year of Rapid ChangeIn 2004, our business landscape changed rapidly as theyear progressed. In the first half of the year we aggressivelygrew our business and earnings by more than 10 percent.We continued our revenue growth in the second half,however we faced higher material cost increases in excessof $200 million – driven by steel, resins and other oil-related costs. We were successful in offsetting a significantportion of these cost increases by achieving record levels ofproductivity, cost controls, and introducing price increas-es. As a result, we delivered record revenues of $406 mil-lion, or $5.90 per diluted share, and $241 million in freecash flow.

Perhaps most important, it was the benefits of ourstrategy that provided us the capacity to offset theseunprecedented costs and we expect this to continue intothe future. Increasing consumer demand for our brands,growth through innovation, enhanced trade partner rela-tionships and record levels of controllable productivity arethe value-creation levers that will differentiate us from ourcompetitors and allow Whirlpool to better serve share-holders and our valued customers in the year ahead.

Jeff Fettig, Chairman, President and Chief Executive Officer

2

In 2004, business performance achievements were:

• Record world-wide revenue of $13.2 billion, anincrease of over 8.6 percent

• Continued global growth of the Whirlpool Brand,which remains the number one selling global appliancebrand worldwide

• Full-year earnings of $406 million

• $241 million in free cash flow (footnote 1)

• Reduced debt-to-capital ratio from 51 percent to 46 percent

• Returned $116 million to shareholders through dividends, which was $22 million or 26 percent morethan 2003

• Invested $251 million in repurchasing 3.7 millionshares

Three Components of Whirlpool Value CreationGlobal operating efficiency is a fundamental require-ment to exceed our customers' expectations and succeedagainst any competitor worldwide. At WhirlpoolCorporation, rigorous measurement tools ensure the effi-ciency of our global operating platform and leverage theassets of our 38 factories to keep ahead of competitors interms of overall cost, quality and asset utilization. By man-aging each of our facilities from a truly global prospective,our asset-utilization rates, productivity and quality assur-ance systems are not only best in-class within our busi-ness, but also are driving toward world-class bench marks.

To do this, we set aggressive goals and use a disciplinedapproach to evaluate progress. Tools such as Six Sigma andLean Manufacturing principles measure performance of allinvested assets from an Economic Value Added (footnote 2)

perspective. Today, 34 percent of our manufacturing foot-print is located in what are considered low-cost countries.

And our export sales from one region to the next now rep-resent 15 percent, which further improves our asset effi-ciency.

Trade partner management … that is, ensuring our cus-tomers have a positive experience with the trade partnerswho sell our products … is crucial to building life-longloyal customers for all our brands. Hence, we "partner"with the retailers and builders who share a similar com-mitment around delivering a positive customer experience.

The business model is built on developing efficient andeffective business-to-business systems and an integratedsupply chain that ensures products are available when andwhere our customers want them. Furthermore, this strate-gic alignment is built around innovation, training, cus-tomer service and total customer experience. These are theareas where customer loyalty begins, and this shared cus-tomer focus creates value for Whirlpool, our trade part-ners and for our customers.

Creating unmatched customer loyalty for our brandsis the cornerstone of our strategy. This simple idea is basedon the belief we must have an in-depth understanding ofour customers’ needs, wants and expectations, and canconsistently deliver unique, innovative solutions to meet orexceed these expectations. Only by satisfying the customerwill we create a unique and valuable brand franchise thatwill continue to reward all of our stakeholders over time.

A Differentiated Value Creation Strategy

Building Customer Loyalty Platform


Customer FocusBrand Focus

InnovationGrowth

Trade Management/Distribution Platform

PartnershipsCoverage

Balance of SaleCost to Serve

Operating Excellence Platform

Total Cost ProductivityQuality

Working CapitalFixed Asset Turnover

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InnovationGrowth







Val

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Value M

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InnovationGrowth







Val

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Value M

aintenanceA Differentiated Value Creation Strategy




InnovationGrowth







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3

0403020100

Operating Profit ($ in millions)

2004 Sales by Product Segment 2004 Sales by Geographic Region (in millions)

0403020100

Net Working Capital (% of sales)

0403020100

Total Debt ($ in billions)

Other

Dishwashing

Cooking

Refrigeration

Laundry

Asia

Latin America

Whirlpool Europe

North America

$807

$306

$692

$830

$758

15.6%

11.6%

11.2%

10.8%

10.9%

$1.8

$1.5

$1.5

$1.4

$1.4

31%

29%

$8,254

$3,062

$1,674

$382

15%

8%

17%

Footnote 1: Free cash flow is cash from operations after capital expenditures, proceedsfrom the sale of fixed assets and dividends.

Footnote 2: EVA is a measure of corporate value created with and beyond the cost ofinvested capital (shareholder equity and borrowed funds). It is calculated by taking netoperating profit after taxes (NOPAT) and subtracting the cost of capital.

Creating unmatched customer loyalty for our brands.

(Millions of dollars, except per share data) 2004 2003 % Change

Net sales $ 00,000 $ 12,176 00.0%Earnings from continuing operations $ 000 $ 414 00.0%

Per share on a diluted basis $ 0.00 $ 5.91 00.0%Net earnings (loss) $ 000 $ 414 NM1

Per share on a diluted basis $ 0.00 $ 5.91 NM1

Stockholders' equity $ 0,000 $ 1,301 00.0%Total assets $ 0,000 $ 7,361 00.0%Return on equity * 00.0% 42.9%Return on assets * 0.0% 6.1%Book value per share $ 00.00 $ 18.56 00.0%Dividends per share $ 0.00 $ 1.36 –Average dividend yield 0.0% 2.2%Total return to stockholders 00.0% 41.7%

Share priceHigh $ 00.00 $ 73.35 Low $ 00.00 $ 42.80 Close $ 00.00 $ 72.65 00.0%

Total return to stockholders (five-year annualized) 0.0% 8.1%Shares outstanding (in 000's) 00,000 68,931 0.0%Number of registered stockholders 0,000 8,178 0.0%Number of employees 00,000 68,407 0.0%

* Refer to Eleven-Year Consolidated Statistical Review (pages 32-33) for more information about return on equity and asset calculations.1 Not a meaningful comparison.

Financial Highlights

The benefits will be seen in the form of faster growth dueto repeat purchases, proactive recommendations amongconsumers, and higher margins due to the customer’s will-ingness to pay for the value they receive.

The success of this strategy lies in knowing the rationaland emotional drivers that build customer loyalty for abrand, and generating a continuous flow of consumer-rel-evant innovation that provides unique solutions for ourcustomers.

As a result, our organization is making the comprehen-sive understanding of the science around customer loyaltyone of our embedded core competencies. We have trans-lated our extensive customer-focused market research intotraining modules and practical applications so eachemployee and trade partner can better understand the cus-tomer and their role in building loyalty. Last year, morethan 10,000 employees attended customer loyaltytraining sessions or participated in unique customer-focused exercises, such as buying experiences and serving

as brand ambassadors for friends and families. We also are transforming our global enterprise to deliv-

er a cadence of innovation and value consumers seek with-in a brand experience that, today, is unmatched in the appliance industry. To accomplish this, employees at everylevel are harnessing creative thinking and turning it intomarket realities. Innovation has become part of theWhirlpool culture, with extensive training dedicated toinnovation processes. As a result, our employees have con-tributed thousands of ideas, with hundreds of commercialconcepts currently in the innovation pipeline at variousstages of evaluation and development. By the end of 2004,a broad range of consumer-relevant innovative productswere adding more than $200 million to Whirlpool’s rev-enue growth. And more than 5,000 Whirlpool people areactively involved in other innovative customer loyalty ini-tiatives for 2005.

4

2005 OutlookWhirlpool Corporation is well prepared to face the glob-al economic challenges that we forecast for 2005. Weexpect moderate growth, significant material and oil-related cost challenges and some continued volatility inglobal currencies.

Despite these challenges, we expect to drive earningsand cash flow improvement through the implementationof a series of decisions:

• We have implemented global price increases of approx-imately 5-to-10 percent, effective January 2005, inmost key markets around the world, including theUnited States.

• We have undertaken actions to drive record levels ofcontrollable productivity, leverage our global operatingplatform, and reduce non-product related spending.

• Lastly, we are accelerating our rate of innovation to themarket and plan to introduce a large number of newproducts from our innovation pipeline throughout theyear.

Corporate ResponsibilityWe have completed our first year under Section 404 ofthe Sarbanes-Oxley Act of 2002 and have assessed ourinternal controls over financial reporting as effective. Wehave leveraged these new requirements with our belief thatthere is no right way to do a wrong thing.

We continue to learn that customers worldwide consis-tently rank corporate social responsibility a primary driverof their brand loyalty. We couldn’t be more delighted asWhirlpool has a robust record of various social philan-thropic programs. This core value, central to our compa-ny’s culture, has remained constant during years of growthand change.

Most noteworthy is Whirlpool Corporation’s five-yearsponsorship of Habitat for Humanity International, whichreceived widespread recognition when linked to our spon-sorship of the Reba McEntire 2004 Concert Tour. Theproject has provided nearly 60,000 appliances to Habitathomes built in North America, and has recently expandedinto Europe and Central Asia. Broad employee participa-

tion in the program includes personal contributions ofmore than $1.25 million and more than 3,500 Whirlpoolpeople personally involved in building Habitat homes.The ideals of this program reflect Whirlpool’ s belief thatcommunities and individuals must work together tostrengthen families in ways that are measurable and sus-tainable.

Personal ThoughtsDuring my 24-year career at Whirlpool, I’ve learned thatthe power of this organization is embedded in the hearts,minds and spirit of my fellow 68,000 colleagues. And Iam proud to be associated with a team willing to face thechallenges of the global marketplace while remainingfocused on delivering innovative products that fulfill thepassions of our customers.

I know all of my colleagues join me in recognizing themany years of service and leadership provided to thisorganization by David Whitwam. It was Dave’s uniqueability to create a shared global vision that grew WhirlpoolCorporation from an $4.2 billion Midwest manufacturer,when he became chairman in 1987, to the $13.2 billionglobal leader that we are today. Despite these achieve-ments, it is the personal values Dave exhibited, and hisstandards for excellence, that will be remembered most.

I am honored to become the new Chairman, Presidentand CEO of Whirlpool Corporation. And on behalf ofthe entire Whirlpool leadership team, we are committedto creating value for our shareholders, our customers andfor our colleagues. We look forward to delivering on thiscommitment in 2005.

Sincerely,

Jeff FettigChairman, President and Chief Executive Officer

5

0403020100

Operating Profit ($ in millions)

2004 Sales by Product Segment 2004 Sales by Geographic Region (in millions)

0403020100

Net Working Capital (% of sales)

0403020100

Total Debt ($ in billions)

Other

Dishwashing

Cooking

Refrigeration

Laundry

Asia

Latin America

Whirlpool Europe

North America

$807

$306

$692

$830

$758

15.6%

11.6%

11.2%

10.8%

10.9%

$1.8

$1.5

$1.5

$1.4

$1.4

31%

29%

$8,254

$3,062

$1,674

$382

15%

8%

17%

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A best in class global operating platform managing

overall costs, quality and asset efficiency.

Despite the rapid increase of raw material costs experi-enced during the second half of the year, we achieved sig-nificant gains in productivity and expect improvementsand cost savings to continue to drive our performancethroughout 2005. Why? In short, we have the world'sbest low-cost manufacturing platform, our cross-regionalproduct sales represent approximately XX percent, and arewell positioned to optimize and maintain the value in ourplatform moving forward.

During the year, Whirlpool made significant invest-ments in North American and European operations,specifically in the United States, Mexico and Poland. Theinvestments will continue the development and introduc-tion of innovative products, and expand the company'smanufacturing capabilities in cooking, refrigeration, dish-washing and clothes washing.

Our global manufacturing platform already providesthe best cost and quality solutions for our regional brands,markets and customers worldwide. And over the next

three to five years, we expect to further improve our prod-uct manufacturing capabilities by fully migrating them tothe best-cost locations for each of our global markets. Ourgoal is that 75 percent of our supply base will be managedand leveraged globally. Furthermore, we expect to increaseour capital efficiency by 25 percent.

During 2005, we expect to begin capitalizing on recentinvestments in our manufacturing footprint with somerobust product launches - particularly in the laundry cate-gory - that should provide a watershed period for thecompany through 2006 [note: here we are referring toMexico coming on-line (SxS) and the Sahara dryer, aswell as Oasis and Horizon (which will be launched in late2005)].

Over 90 years ago, and on the cusp of theemerging home appliance industry, Whirlpoolfirst made a name for itself in laundry care.Three years ago, Whirlpool made historyagain, introducing the Whirlpool brand Duetlaundry machine and growing it into the #1selling front-loader in the industry. History isabout to repeat itself again … as Whirlpoolinvests aggressively in the Duet laundry plat-form to ensure it's leadership into the future,and leverage our learnings about the productinto a new global platform that promotes cus-tomer loyalty and leads the industry in energyefficiency.

The Whirlpool Duet laundry machine wasthe first product to provide clear evidence thatcustomers decisions involve both rational toemotional decision factors, based on a

groundswell of consumer demand and prefer-ence unlike any we had seen previously.Today, three years after its introduction, Duetsales are rapidly approaching a 20 percentbalance of sale along a robust price/volumedemand curve. The results confirm that ourstrategy is working, and that loyal customersunderstand its value and are willing to pur-chase premium-priced products.

Innovative engineering efforts are managedby an international team of engineers that arepart of our worldwide operating platform -from Brazil, India, Mexico and the U.S. - todeliver the best products by managing knowl-edge globally and applying lower cost manu-facturing. The result will be a new platformcapable of producing laundry products appro-priate for sale in every region of the world.

Repeating HistoryLeveraging Whirlpool’s heritage of Laundry Leadership into the Future.

The strategic global operating network we've built and invested in over the years produced a series ofaccomplishments in 2004 that indicate our strategy is sound and we're on the right path. Inside thisannual report, you'll find reasons to believe we'll continue to differentiate our company from other manu-facturers and create value for our customers, shareholders, communities and employees.

“The Choice of the Brazilian Woman” Consul brand's new positioning campaign recognizes the importance of women in the home appliance decision-making process and includes products depicted in the artwork of four celebrity Brazilian female artists.

Whirlpool's Manufacturing Network DrivesCompetitive Advantage

Whirlpool's global manufacturing footprint enablesefficient and effective resource allocation and prod-uct distribution. The network is "best in class" forlow-cost manufacturing, quality and safety. Trans-regional sales have doubled in the past five years,resulting in more than six million products distrib-uted from Whirlpool manufacturing and technologycenters in 2004. 6 Million Products will Move Globally in 2004...and continue to grow each year.

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When Lowe's first approached us to providean exclusive new line of water softeners, fil-ters, coolers and heaters, it was a potentialopportunity to simultaneously leverage thestrength of both the Whirlpool brand and ourrelationship with a key trade partner. It wasalso a new opportunity we weren't completelyconvinced of - after all, we don't manufacturesuch products. Rather than let the opportunityslip through our fingers, we quickly executedone of Whirlpool's successful new initiatives:a licensing business providing over $6 millionin annual profit.

Lowe's was looking to introduce a solutionto their newly discovered customer insight:strong interest in water filtration. And they

sought the strength of the Whirlpool brand tosupport their new initiative. Our own brandelasticity study concluded that Whirlpool wasindeed a match.

Together with Lowe's, we identified licens-ee partners (including one of our refrigeratorfilter makers) evaluated their ability to manu-facture additional models, and launched anew program with record speed to market:only four months per product line. In return,Lowe's provided significant dedicated floorspace in their stores and a new televisionadvertisement (images seen here) leveragingthe strength of both brands, product ease ofuse, and exclusive launch at Lowe's.

In short, it's a good example of leveragingstrong Whirlpool relationships and brands intoa profitable $6 million dollar contribution toour bottom line … and it's a business man-aged by only three people.. The success of theprogram has convinced us that such partner-ships offer a huge opportunity for appropriateextensions of the Whirlpool brand. As such,we're aggressively expanding into new areassuch as air purification, HVAC, sump pumpsand vacuums, among others. If successful, weestimate the licensing business could grow tocontribute significant Whirlpool brand earn-ings in the near future.

Water, water…everywhere.Brand elasticity and a strong relationship creates an exclusive win-win.

"Two in One" The Dish Drawer, offering two dishwashers in the space ofone, was first launched under the Whirlpool brand in Europe,and more recently in the U.S. under KitchenAid brand.

9

Consolidating Trade & Distribution Relationships

Comparable to the pharmaceutical industry for example,where a smaller manufacturer markets their productthrough the sales capabilities of a global partner to turn itinto a blockbuster, so too is similar consolidation occur-ring within the home appliance sector. Whirlpool mightsource a product or component from one company for anew appliance - for example: Dish Drawer from Fisher &Paykel. We might assemble a team of water filter manu-facturers to serve the unmet needs of a major trade retailpartner. Or we may work with a high-end Italian kitchenmanufacturer to turn a forward looking design conceptinto reality, as we are with the exciting results ofin.kitchen - unveiled in 2004 by Whirlpool's GlobalDesign team.

The reputation of our innovative design, the strengthof our brands and our global reach enable us to form therelationships that enable us to bring the right players tothe table to create new solutions. Likewise, bringing theconsumer - that is, what we continue to learn about theirpreferences and habits - into the process at the earlieststages ensures that our new products warrant the kind ofinterest and loyalty that drive customers into the show-rooms of retailers seeking Whirlpool products. This

reduces our cost to serve retailers, increases our balance ofsale and has resulted in trade partnerships with most everymajor retailer around the world. As a result, theWhirlpool brand enjoys an all-time high marketshare andthe number one brand position among eight of the top10 appliance retailers in America.

Global pressures are forcing industry consolidation among the companies that serve the domesticity needsof consumers, and only those players with sufficient global reach and innovative solutions will be able tocompete efficiently and differentiate themselves. To accomplish this, a global network of partnerships isforming among industry players - between kitchen designers and appliance manufacturers, between man-ufacturers and retailers, and between retailers and their peers.

Design Innovation:Changing the face of the built-inkitchen industry2004 marked 15 years of business forWhirlpool Europe, and during itsmilestone anniversary the organiza-tion unveiled the critically acclaimedseries of revolutionary built-inkitchen concepts entitled “in.kitchen:design landscapes for a new built-inexperience.”

Based on deep consumer insightsand trends research, in.kitchen isWhirlpool's vision for built-inkitchens that are based on the culi-nary level and domestic space of indi-

vidual users, and are more highlyintegrated solutions than those cur-rently available in the marketplace.Rather than design distant producthopes, the project team createdglimpses of possible domestic experi-ences that could be achieved in thenear future through well-orchestratedpartnerships within the kitchenindustry.

In creating in.kitchen, Whirlpool ispromoting greater dialogue withinthe industry - kitchen makers, cabinetmanufacturers, and others - to movebeyond Whirlpool's traditional role ofproviding a high-tech appliance 'box'to fill a functional 'hole' inside theconsumer's kitchen. The effort hasalready attracted the attention of onehigh-end Italian kitchen manufacturerto turn the in.kitchen concept into areality, thus dramatically changingthe face of built-in kitchens and howpeople experience the domestic“heart” of their homes. Stay tuned.

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The Value of Customer Loyalty

(A) Winning the loyalty of customersmeans more than hoping they're sat-isfied enough at the end of the prod-uct life cycle to repurchase the samebrand.

(B) For Whirlpool, it means leveragingthe strength of our brands and inno-vative products to create an emo-tional link with customers wherethey cross-purchase the brand forother home appliance needs.

(C) The ultimate level of customer loyal-ty is achieved when appliance own-ers, impressed with their products,become “evangelists” recommend-ing the brand to others who begincross-purchasing behavior, thus dra-matically influencing sales growththrough repeat purchases and brandextensions. Likewise, improved prof-it margins deliver better shareholdervalue because of lower costs for cus-tomer acquisition and retention, andhigher profitability from customerswho are willing to pay for relevantinnovation and brand value.

The Evolution of Customer Loyalty

Year 1Behavior Year 10

Retention

Cross-Purchase

Recommendation

Beh

avio

r

The Evolution of Customer Loyalty

Year 1 Year 10

Retention

Cross-Purchase

Recommendation

Whirlpool's customer loyalty strategy is a long-term commitment built upon the roots of strategic invest-ments in global manufacturing productivity, trade partner management, and the development of innova-tive products and strong brands. Each of those investments were significant steps during the evolution ofa strategy that has evolved to produce the corporate foundation required to successfully differentiate our-selves in the marketplace.

Of course, focusing on the customer is the foundationof most companies interested in success. However,Whirlpool's focus on customer loyalty is recognition thatwinning the emotional loyalty of consumer purchasingbehavior is critical to differentiating ourselves in an indus-try that's been stuck in the status quo of similar productsand services. Loyalty is a behavior, not a satisfaction orattitude. And securing consumer's loyalty for our portfo-lio of products (versus single appliances) will ultimatelytransform Whirlpool from a home appliance maker into aconsumer goods company.

Building unmatched customer loyalty requires uniquesolutions … built on a platform of innovation. As such,we're relying more than ever on innovation to carry usthrough the cycles of our industry, rather than limitinvestment in this area during downturns in the industry.As such, in 2005 we will be accelerating the rate of newproduct introduction from our innovation pipeline. -included on page X. The pipeline is robust, and is expect-ed to represent innovations that will generate more than$3 billion in annual revenues by the end of 2005.

Today, Whirlpool's industry leading infrastructure,innovative product pipeline and deep understanding ofthe needs of customers enable us to consistently deliverunique and innovative solutions to meet or exceed theirexpectations. We believe we're only starting to see the

fruits of our labor in this strategy. And we made some ofour greatest gains in understanding and acting upon cus-tomer loyalty drivers during 2004 - accomplishments wemust move upon and leverage moving forward. As aresult, we're strengthening the value of our brand fran-chise that is paying, and will continue to pay, dividends toour shareholders over time.

Perhaps the most compelling explanation of this strat-egy is in the expected results. What is customer loyaltyworth? We believe every 10 points of increased customerloyalty will create approximately $2.75 billion in revenueand improved operating profit. Accordingly, we've setambitious business goals to double our customer loyaltyperformance in seven years.

This year we made monumental advances instillingthe customer loyalty concept throughout the entire net-work of Whirlpool people worldwide, leading to greaterintegration of the concept within our short and long-termstrategic planning processes. Today, our people clearlyunderstand the difference between, and are shifting theirwork from “customer focus” to “customer loyalty.”

Customer loyalty is about winning the hearts andminds of millions of consumers worldwide. Indeed, it'sthe heart of our strategy and the heart of Whirlpool peo-ple everywhere.

Customer Loyalty is a Behavior, not a Satisfaction or Attitude

(A)

(B)

(C)

11

Cook for the Cure

The KitchenAid Cook for the Cure®

was created to give passionate cooksa way to support the Susan G. KomenBreast Cancer Foundation and thefight against breast cancer. To date,the program has raised over $2.3 mil-lion dollars for the cause throughdonation-with-purchase programs,special fundrasing events, auctionsand grass roots initiatives.

The Woman's Consulate

A Consul brand initiative and socialresponsibility project for WhirlpoolLatin America, the Woman'sCounsulate creates employment andincome opportunities for women withlow levels of income and schooling.

Participants receive guidance onhow to open businesses and coopera-tives, and promotes citizenship devel-opment for women through access toinformation and permanent educa-tion, stimulating their participation inand contribution to the community.The result is improved quality of lifefor the women and a transformationin gender relations.

Case Study: Doubling Customer LoyaltyWho would have thought that the single biggest applica-tion of customer loyalty learnings would be a country musicstar? But that's exactly what happened when ongoing con-sumer research showed that social responsibility consis-tently ranks high as a loyalty driver among customers, andthat the emotional connection to the Whirlpool brand istwice as powerful as the rational connection.

Brand positioning around social responsibility camenaturally for Whirlpool because we already had a success-ful story to tell: Whirlpool's ongoing philanthropic effortswith Habitat for Humanity International. Leveraging our

philanthropic efforts into a brand asset meant mixing itwith the broad appeal of country music. Thus we tappedReba McEntire for a new advertising campaign to spreadthe word about our partnership with Habitat for Humanity.

The program was designed to unleash the emotionalpower of our brand, link it to loyalty and drive a businessbehavior. As a result, the Whirlpool/Reba McEntire adver-tising campaign was named to Ad Age's Top 10 list, andcustomers exposed to the campaign are twice as likely toremain loyal to the Whirlpool brand. Rarely can a corpora-tion make such a clear connection between its social phil-anthropic efforts and customer loyalty.

NewBusiness

Generate and develop opportunities to create

new customers, channels and business models.

New Platforms

New manufacturing platforms providing completely new product

lines that solve previously unmet consumer needs.

Merchandisable Innovation

Novel innovative features designed to update existing products and present

new product attributes to the marketplace.

Platform Replacement

Existing product lines are replaced with new manufacturing platforms.

New product innovation at Whirlpool begins withsignificant brand input and positioning combinedwith ongoing research results on consumer loyalty

drivers. This approach is applied to both existingproduct lines and new business opportunities.

New Product Innovation

– NORTH AMERICA – LATIN AMERICA – EUROPE – ASIANA LA EU AA

13

Building unmatched customer loyaltyrequires unique solutions…

built on a platform of innovation.

In.kitchen: RitualCurrently under development witha high-end Italian kitchen manufac-turer, Ritual is one of Whirlpool'scritically acclaimed built-in kitchenconcepts (unveiled in 2004). Ritualblends two environments - thekitchen and the dining room - intoa single unit that hosts all kitchenappliances and a table upon whichto present a meal. It is expected toenter the marketplace in 2006.

“Athena” Speed Cook ApplianceLeveraging the success ofWhirlpool's '04 launch of the G2Microven, Athena incorporatesgrilling, high speed and convectioncooking qualities with the indus-try's largest turntable, best ventila-tion system and high-end built-inlook. It is designed to positionWhirlpool brand as a leader withinthis emerging product category.

Niagara Advanced DispenserAn advanced ice and water dispenser,Niagara fills any size container twice asfast*. The oversized dispenser cavityaccommodated both large and smallcontainers. The patented filtration sys-tem includes touch-button measuredfilling (in ounces, cups or liters), and aslide-out dispenser tray provides a stur-dy platform for hands-free filling froma 180º rotating faucet.

*compared to previous Whirlpool models

In 1999, Whirlpool began investing in a significant inno-vation strategy applied across all product categories.Between 2001 and 2004, the fruits of that investmentstrategy became evident in an innovation pipeline thatintroduced 33 new products into the marketplace, collect-ing over $200 million of innovation revenue last year. In2005 alone, Whirlpool is planning the launch of 14 newinnovative products aiming to double innovation revenue.

Our investment strategy for the pipeline is simple …maintain a planned rate of compelling, sustainable, anddifferentiated product innovation that:• Delivers new and differentiated solutions to consumers • Establishes sustainable competitive advantage• Creates differentiated shareholder valueAs a result, today's pipeline is estimated to be worth apotential $XXX through the end of 20XX.

NewBusiness

Generate and develop opportunities to create

new customers, channels and business models.

New Platforms

New manufacturing platforms providing completely new product lines that solve previously unmet

consumer needs.

Merchandisable Innovation

Novel innovative features designed to update existing products and present

new product attributes to the marketplace.

Platform Replacement

Existing product lines are replaced with new manufacturing platforms.

New product innovation at Whirlpool begins withsignificant brand input and positioning combinedwith ongoing research results on consumer loyalty

drivers, and is applied to both existing product linesand new business opportunities.

New Product Innovation

– NORTH AMERICA – LATIN AMERICA – EUROPE – ASIANA LA EU AA

Family Studio 1First in a family offabric care centers

GladiatorGarageWorksGarage organizingsolutions and appliances

Economic HouseA water solution service that provides filtered, chilled water replacing bottled water

PureDelivering filtered,chilled and carbonatedwater above the sink,countertop and undersink water dispensing

KitchenAidOutdoorEntertainingStainless steel free-standing and built-in

KitchenAid Brand Licensing Extends the brandreach through gadg-ets, bakeware, cook-ware, linens, etc.

Water DomainMulti-phase licensing project including watersoftners, filters, dispensers

PolaraRefrigerated free-

standing range

ACCESS PedestalPedestal for Access front loading washer and matching dryer

brivaIn-sink dishwasher

Access/ADOTTSemi-professional fabric care package & after sales service

TrolleyStandard washing machine pedestalwith removable trolley to improve loading & unloading

Dish DrawersDishwasher in single or double drawersthrough partnership with Fisher-Paykel

Mini Built-inMicrowavesEasy to install andfrees up neededcounter space

JetchefFamily size/space saving multi-purposeoven with high speed,wide range of cookingfeatures and ease of programming

Dish pedestal Dishwasher pedestal with drawer

TwinRevolutionary 3M fullyintegrated built-inmicrowave

JobimImproved ovens & burners with differentpower, more convenience and new cook-ing experience due to the product'sunique performance

Big/DreamspaceLarge capacity machine designed for big items

Pro LineAppliances

Pro Line CoffeeGrinder (A-9)Reintroduction of theworld's first Burr coffeegrinder - model A-9

2001 200434 Product Introductions

Text Assistant Display (TAD) OvenUser-friendly LCD inter-face including assisted,manual, memo & demo-modes

Design Your Own SinkCustom designed sinks

Design Your Own Refrigerator Customizable refrigerator

Design Your Own Dishwasher Capability to design your own dishwasher

One Touch Sensor Advanced sensor (40°-70° C) dishwasher control for clean dishes for any load

Scrubber Lid forVolcan washer Innovative scrubberlid feature instead ofcurrent metal lid

KitchenAid Portables Custom colors

Turbo WashDishwasher Intensified wash zone for heavily soiled dishes

6th SenseRefrigerator that recognizes events - door open, temporaryblack-out, etc.

Pro Line MajorsTLC and new sellingprocess

Max! Fitness,Magnum, Moka A Max! with uniqueaccessory algorithmsto prepare healthy food, dense hot chocolate and brew fresh expresso

Ikea Kid Kid-friendlycustomizable oventhat matches Ikea'sLiving with Childrentheme

Á FOOD PREPARATION ª FABRIC CARE £ CLEANING ¢ FOOD STREAM · OTHER

NA

NA

NA

NA

NA

NA

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EU

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EU

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LA

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EU £

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BrutusCommercial laundry projectthat focuses on a central-ized payment station

2005Estimate 14 new product introductions

Fabric RefresherCollapsible in-home clothes vitalizing systemthat is easily stored & provides wrinkle and odorremoval

Pro LaundryCommercial-like durabilitylaundry pair with stainlesssteel finish

Double Drawers -Ingredient Center New refrigerated appliancefor fresh produce at countertop

HE Wash 1Soak andPulse Filterfor easycleaning and2x Cenelecperformance

Soft Dry CD DR (Hanger)New condenser dryerequipped space-savingaccessories to dry garments

NiagaraNew ice and water dispenser

OrigamiMulti-functional cooktopaccessories

TitaniumRange andLineBuilt in cook-ing applianceline with tita-nium material

Hygienic Refrigerator Anti-bacterial air filtrationsolution for freezer andrefrigerator

AthenaHi-speedmicro-wave-hood combowith built-inlook andincreasedcapacity

Moka II A Max!microwavewith a unique'EspressoMoka' acces-sory

Crystal CoatingProtective layer that reduces thermal & abrasion effects onstainless steel & aluminumcooktops

EU ª

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ªNA

EU £EU Á

EU Á

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** Please note: This innovation

pipeline originally contained a

column for product launches

expected for 2006. It has since

been removed and the 2005

pipeline is being revised

accordingly across this page.

14

Whirlpool North America performed solidly in 2004, mak-ing advances in our customer loyalty strategy even whileconfronting unprecedented increases in raw-material andoil-related costs. Our people met these challenges by deliv-ering strong manufacturing productivity gains, new productintroductions, and effective brand and product mix.

Despite the prevailing global and economic uncertainty, con-sumer demand remained strong as low interest rates in the UnitedStates helped maintain the momentum of new-housing starts, salesof existing homes and spending on durable goods. WhirlpoolNorth America posted record revenue of $8.25 billion in 2004.Operating profit, however, declined four percent to $778 million,largely because of the sharp increases in the costs of key commodi-ties and logistics.

During 2004, we made a commitment for a $180 million multi-year investment to strengthen our North American manufacturingbase and extend our leadership position in the U.S. applianceindustry. The investment is expected to deliver a series of innova-tive new product introductions to consumers in the U.S. domesticmarket and throughout the world. In addition, the investment willhelp us improve efficiency and productivity across our NorthAmerican manufacturing platform.

During the year, we made significant progress across the regionwith another year of record sales in Canada and further integrationof Whirlpool Mexico into its regional operations. In 2005 and inthe years ahead, Whirlpool Mexico will be a strategically significantbusiness within Whirlpool Corporation's global operating plat-form, serving as an important product export, manufacturing and

supply-chain provider for all of North America and beyond. Aprime example of Whirlpool Mexico's growing importance is thepending launch of a super efficient and affordable front-loadingclothes washer for Mexico and export markets at the company'sexpanded Monterrey facility.

More important for the long-term direction of the company, wecontinued to make significant inroads with our strategy of focusingour operations on our customers. Meeting their needs and simpli-fying their lives are the linchpins in building loyalty to the compa-ny's brands, particularly the Whirlpool and KitchenAid brands inNorth America. In line with this strategy, teams of Whirlpool engi-neers, designers and marketers are constantly undertaking dozens ofcustomer-loyalty initiatives to deliver unique solutions to customers(many of which are listed above).

During 2004, Whirlpool North America continued to makerapid strides in broadening our innovation strategy through part-nerships, exclusive arrangements and licensing agreements withlike-minded innovative companies. These affiliations speed upWhirlpool's introduction of unique solutions that better fulfill cus-tomer needs and desires. Our on-going relationship with NewZealand-based Fisher & Paykel is a good example of how thesepartnerships help with global sourcing of unique appliances such asDish Drawer (launched in Europe and the U.S.), and other innova-tive technologies and products planned for the future.

The strength of our brands and our relationships with trade part-ners have secured leadership positions with the top American retail-ers and buying groups, representing more than 80 percent marketshare of all appliances purchased in the U.S. Likewise, our strong

North America Operating Review

David L. SwiftExecutive Vice President,North American Region

• The stylish new KitchenAidEnsemble front-loadingwasher and dryer delivershigh water and energy effi-ciency and extends theKitchenAid brand into otherareas of the home.

• KitchenAid brand expandedits Pro Line® series of profes-sional-style countertopappliances with the intro-duction of a commercialquality food processor.

Significant New Product Introductions:

Locations

Headquarters:Benton Harbor, MI

Manufacturing Locations:

United StatesLaVergne, TN; Findlay, OH;Marion, OH; Greenville, OH;Clyde, OH; Benton Harbor, MI;Evansville, IN; Fort Smith, AR;Tulsa, OK; Oxford, MS

MexicoMonterrey, Reynosa,Celaya, Puebla

Principle Products

Air Purifiers, Automatic Dryers,

Automatic Washers, Built-in

Ovens, Countertop Appliances,

Dehumidifiers, Dishwashers,

Freezers, Hot Water Heaters,

Ice Makers, Microwave Ovens,

Ranges, Refrigerators, Room

Air Conditioners, Trash

Compactors, Water Dispensers

and Fabric Fresheners

Key Statistics

• No. 1 position in theindustry

• $8.3 billion in 2004sales

• $778 million in 2004 operating profit

• Approximately 28,000 employees

Brands

United StatesWhirlpool, KitchenAid,Gladiator, Roper byWhirlpool Corporation,Estate

MexicoWhirlpool, Acros,Supermatic, Crolls

15

position with contract builders continues to grow, with KitchenAidbrand channel revenue growing 20 percent in 2004. Total sales havegrown at an average annual growth rate of 10-percent each of thepast five years. Additionally, our market share among the top 30national builders was up 33 percent in 2004 vs. 2002.

Energy and water conservation continue to be a primary concernof Whirlpool, and we are working closely with the U.S.Environmental Protection Agency and the U.S. Department ofEnergy to reduce greenhouse gas emissions through the introduc-tion of energy efficient, Energy Star® qualified appliances.

In 2004 we upgraded our commitment to Habitat for Humanitythrough increased donations, products and employee involvement.Once a partnership only in North America, where the companywould donate an Energy Star® qualified refrigerator and range forevery Habitat home, Whirlpool now partners with Habitat in 18countries around the world. In addition to sponsoring a summerconcert tour for Reba McEntire on behalf of Habitat, we cospon-sored the 2004 Jimmy Carter Work Project (JCWP) in Mexico tohelp generate enthusiasm for the 2005 JCWP in Whirlpool's head-quarters community of Benton Harbor (where we will build 24homes in two weeks).

Our commitment to social causes also extended to KitchenAidbrand's fundraising partnership with the Susan G. Komen BreastCancer Foundation for the fight against breast cancer. In 2004alone, KitchenAid raised more than $750,000 for the foundationthrough the sale of special pink-colored KitchenAid products andother fund-raising efforts for a total of $2.3 million in donationssince 2001.

OutlookIn 2005, Whirlpool North America expects to continue successfullyexecuting our customer loyalty strategy, with strong brands andinnovative products attracting and retaining customers for life. Weexpect modest growth of two-percent in industry shipments in theUnited States.

To reduce the impact of those costs, we have announced priceincreases ranging from five-to-ten percent, effective in early January2005. We are also implementing additional productivity initiatives,reducing non-product related spending, and increasing the pace ofinnovative product introduction in 2005.

• The rugged design ofthe new GladiatorGarageWorksFreezerator™ refriger-ator, enables it tocope with tempera-ture extremes in thegarage.

• The new Whirlpool®

Gold super capacitydishwasher withAccuSense® adaptivewash cycle automatical-ly selects the right washcycle based on load sizeand food deposits.

• A variety of newWhirlpool ovens andranges were introducedin 2004 with unique fea-tures such as sophisti-cated glass touch con-trols for ease of use andcleaning.

Awards:• International Design magazine named Whirlpool as one of the ten

best companies for global design leadership, citing “visionary scenar-ios” created by the company for what the future may hold in the areasof fabric care and the kitchen.

• Whirlpool Corporation was, for the fifth time, named “Energy Star®

Partner of the Year” by the U.S. Department of Energy and U.S.Environmental Protection Agency.

• Whirlpool Corporation is the first recipient of the Home Safety CouncilProduct Innovation for Consumer Safety Award, recognizing outstand-ing product innovations that help reduce the risk of injury andenhance consumer safety at home.

• Whirlpool Canada named one of top 50 places to work in Canadaamong a national survey of employers.

16

Whirlpool Europe achieved significant performance improvementsin 2004, with revenue of $3.1 billion up 13.8 percent and an oper-ating profit increase of $167 million, 34.5 percent over 2003.

The continued performance improvement is due in part to the suc-cessful pan-European expansion of our built-in appliance business,with a 17-percent increase in units sold year over year. The stronggrowth rates of our two major pan-European kitchen trade part-ners, IKEA and Alno, contributed to the success of our built-inproducts. Innovative products like the 6th Sense product line, thenew JetChef three-in-one oven and the Mini BI built-in oven droveperformance improvement, while record levels of productivity dur-ing 2004 also helped offset increased costs in the region.

Whirlpool Europe's core strategy continues to focus on effective-ly building life-long customer loyalty across all the varied marketsof the region. In 2004, we began consolidation of the company's32 different market organizations into a few key “market regions”to serve this customer loyalty goal. The new organization of com-bined markets will also reduce complexity, improve execution andbring about cost efficiencies.

During 2004, we continued our strategy to drive sustainablecompetitive advantage in all of our European operations. Throughmanufacturing footprint changes and continued implementation ofleading edge productivity and efficiency tools such as LeanManufacturing and Six Sigma, our people drove record productivityimprovement across all operations during the year. Additionally,continued expansion of our Central European facilities resulted inincreased production of existing refrigeration and dishwasher pro-duction lines and construction of a new cooking facility at ourWroclaw, Poland, site.

We significantly strengthened our trade-partner relationships in'04 while marking our 15th anniversary of business and our region-al brand leadership. Whirlpool Europe welcomed more than 2,000European retail trade partners and media at an award-winningevent that strengthened brand positioning in the region, unveiled“in.kitchen” - our concept kitchens of the future - and presentedproduct innovations such as the new Whirlpool brand Progressiveline of kitchen appliances.

Lastly, we're proud to have leveraged Whirlpool Corporation'slong-standing commitment to social causes and its successful rela-tionship with Habitat for Humanity International in 2004 bylaunching a building and product donation program in Europe.

OutlookFacing the challenges of the market environment in 2005,Whirlpool Europe has solid plans to mitigate raw material costsand commodity increases through region-wide price increases. Weexpect continued sales growth through Whirlpool innovation andcontinued emphasis on product and brand mix management inresponse to consumer demand. Growth of our built-in appliancebusiness, expansion of the Whirlpool brand, and significant costsavings from continued productivity gains are also expected to con-tribute to performance improvements. We expect modest growth ofone-percent in industry shipments across Europe.

Europe Operating Review

Michael A. TodmanExecutive Vice President andPresident, Whirlpool Europe

Awards:• The EIBTM (European Incentive & Business Travel & Meeting Exhibition)

granted Whirlpool Europe the "Best Business to Business Event" for"Experience the Vision", Whirlpool Europe's 15th anniversary event heldin Cannes, France, in March 2004.

• Whirlpool France won the 2004 Janus de la Santé award in partnershipwith Handicap Zero, a well-known French charity dedicated to the blind.


• 6th Sense Technology:Introduced in 2004,Whirlpool's unique 6thSense technology hasbeen applied accross allproduct lines (such as thisrefrigerator) to save timeand energy for users,while also providing themchoice, flexibility, simplici-ty and excellent results intheir household tasks.

• The Whirlpool® JetChef three-in-oneoven combines conventional, steamand microwave technology for high-speed cooking, while 6th Sense tech-nology adjusts the settings for thebest results based on the food type.

• The Whirlpool® ProgressiveCollection provides cutting-edgetechnology in a complete range ofinnovative products with clean,essential design, using stylish, func-tional glass and stainless steel.

Locations

Operations Center:Comerio, Italy

Manufacturing Locations:

France Amiens

Germany Neunkirchen,Schorndorf

Italy Naples, Siena,Cassinetta, Trento

Poland Wroclaw

Slovakia Poprad

South Africa Isithebe

Sweden Norrköping

Principle Products

Automatic Dryers, Automatic

Washers, Built-in Hobs, Built-in

Ovens, Compressors,

Dishwashers, Free-standing

Cookers, Freezers, Microwave

Ovens, Ranges, Refrigerators

Key Statistics

• No. 3 position inWestern and CentralEurope

• $3.1 billion in 2004 sales

• $166 million in 2004operating profit

• Approximately 15,000employees

Brands

Whirlpool, Bauknecht,Ignis, Polar, Laden inFrance, KIC in South Africa

17

Whirlpool's Brazilian home appliances operation successfullyincreased market share during 2004, sustained by strong demandfor our brands, several innovative new product launches and tar-geted customer loyalty actions. Whirlpool Latin America alsoreaffirmed the growing importance of its manufacturing positionwithin Whirlpool's global operating platform during 2004,exporting more than 27 percent of our production to Whirlpoolmarkets worldwide.

While the Latin American economic environment in 2004 wasfavorable growth-wise for Whirlpool, higher steel and freight costsas well as unfavorable currency conditions presented significantchallenges. Despite adverse market conditions, the companyresponded well, growing revenues by 24 percent to $1.6 billion.Operating profit, however, declined 27-percent to $65 million,largely due to the sharp increases in the costs of key commoditiesand logistics.

Significant new product introductions included the introductionof 6th Sense appliance control technology across the Brastempportfolio (refrigerators, ranges and washing machines), and the suc-cessful introduction of the “Brastemp You” Refrigerator - the firstcustomizable refrigerator in Latin America. Consul brand expandedits fabric care line in 2004 with the introduction of the brand's firstclothes spin-dryer. Other new Consul brand product introductionsincluded a new water-dispensing refrigerator, and Consul's firstceiling fan - an extension of the brand into new product areas.

Consul brand, present in 50 percent of Brazilian homes, also unveiledits new brand positioning campaign: "The choice of the Brazilianwoman." The new concept, recognizing the importance of women inthe home appliance decision-making process, included Consul productsdepicted in the artwork of four Brazilian female artists.

2004 was another year of successful progress in our customer loyalty transformation process. Our Multibrás subsidiary launchedan integrated management system for direct suppliers, whichdefines standards to achieve continuous product and service qualityimprovements, permanent technological enhancements and pro-ductivity gains.

Multibrás also created a new commercial structure to better servetrade partners, as we expect them to make significant investmentsin new store openings or acquisitions in Latin America. The newstructure evolved from our channel strategy, and is adapted to thisnew trade scenario.

Multibrás exceeded its manufacturing productivity targets anddelivered $4.8 million in improvements during 2004, largely due tothe successful implementation of Lean Manufacturing. Lean cultureguidelines were also applied to the first phases of new productdevelopment.

Whirlpool's Brazil-based compressors operation, Embraco, main-tained its global market leadership during 2004, with 25-percent ofmarket share, and improved its position in the commercial refriger-ation segment by offering 17 new products to the market andlaunching environmentally compliant C02 compressors.

OutlookWhirlpool Latin America expects continued sales growth driven bymoderate increase in overall demand, strong brands and innovativeproduct launches in 2005. Exports will continue to be a priority forthe region, as we anticipate the continued consolidation of ourposition within Whirlpool's global operating platform.

The region's profitability is also expected to improve significantlybased on achieving further price increases and delivering significantproductivity gains. During January 2005, the region implemented asix-percent price increase to mitigate higher costs, and announced anadditional six percent increase effective in April 2005. We expectindustry shipments in 2005 to increase by approximately five percent.

Latin America Operating Review

Paulo F. M. PeriquitoExecutive Vice President andPresident, Latin America

• The Brastemp Sixth SenseTechnology Line is a new portfolioof refrigerators, ranges and wash-ing machines - each one withunmatched design, technologyand performance.

• The “Brastemp You” Refrigeratoris the first fully customizablerefrigerator in Latin America.Currently sold exclusively throughthe Brastemp website, the unitwill be offered as a businessopportunity for trade partners inthe near future.

• The Consul Frost-Free Refrigeratorwith water dis-pensing com-bines conven-ience ease of use and anaffordable price.

• The new Consul Séc Fácil isthe brand's first laundry dryerand combines drasticallyreduced clothes drying timewith low energy consumption.

Awards:• Brastemp was again recognized as one of the most recognized brands in

Brazil in 2004. The brand ranked fourth for the 14th consecutive year.Consul was the most mentioned brand in the refrigerator category for the13th year.

• Multibrás was once again recognized by the Carta Capital Magazine andthe Interscience Informação e Tecnologia Aplicada as one of “The mostadmired (companies) in Brazil”, in the home appliances segment.

• Multibras was recognized for the eighth time on the list of “Top 100 BestCompanies to Work for” in Brazil, by Exame Magazine, the major businessmagazine in Brazil.


Locations

Headquaters::São Paulo,

Brazil; Buenos Aires,

Argentina; Santiago, Chile

Manufacturing Locations:Brazil Manaus, Rio Claro,

Joinville, São Paulo

International (Embraco)Riva di Chieri, Italy; Spisska

Nova Ves, Slovakia; Beijing,

China

Principle Products

Automatic Washers,Compressors, CountertopAppliances, Dishwashers,Freezers, Microwave Ovens,Ranges, Refrigerators, RoomAir Conditioners, Fabric Dryer

Key Statistics

• No. 1 market position inthe industry

• $1.7 billion in 2004 sales

• $65 million in 2004operating profit


Brands

Whirlpool, Brastemp,Consul, Embraco, Eslabón de Lujo

18

Whirlpool Asia coped with an array of challenges in 2004,ranging from rising commodity prices and trade distribu-tion issues to price pressures and increasing industry com-petition. The region reported sales of $382 million, an 8.2percent decrease from the year before. Operating profitdeclined for the year, reflecting the difficult operating envi-ronment and appliance over capacity in Asia.

China and India are Whirlpool's largest markets in the region andamong the most competitive. The company initiated a new trademanagement strategy, which included revised trade terms andbroader distribution channels outside urban hubs. The strategy isexpected to spur renewed market share gains in the world's fastestgrowing region.

In India, for instance, Whirlpool India entered into a strategicalliance with Faber S.p.A. (Italy) to sell and distribute Whirlpoolcooking appliances, such as ranges, ovens and electric kitchen chim-neys. The new organization's products are the largest selling premi-um brand in the cooking segment and the global leader in kitchenchimneys. The partnership gives the company an opportunity toextend the Whirlpool brand, a leading brand among clothes wash-ers and refrigerators, to the cooking category.

In fending off the intense competition, Whirlpool introduced anumber of innovative appliances (many of them new to the mar-ket) including: two new frost control refrigerators with 6th SenseTechnology in India, and a new line of Whirlpool Mercury high-capacity clothes washers. For these and other innovative products,Whirlpool brand was featured by SUPERBRANDS, a globalbrand-ranking organization, in its first edition of India'sSuperbrands.

Whirlpool's manufacturing facilities in India and China havebecome key procurement and product sources for the company'sglobal operating platform. China-based technology centers play asignificant role in Whirlpool's global technology organization, andincreasingly serve markets worldwide with efficient manufacturingand innovation. For example. Whirlpool's plant in Shunde, China,is the company's primary manufacturer for microwave ovens global-ly, while the washer facility in Shanghai has started exporting prod-ucts to the Middle East. Exports from Whirlpool India increased18 percent in 2004, adding another 10 national markets to itsexpanding export network.

OutlookFor 2005, Whirlpool Asia anticipates steady revenue growth andimproved operating margins as new, innovative products are intro-duced in the region and as the company's product distribution net-work continues to expand. Exports from Asia will continue to fuelgrowth as a significant source for Whirlpool's sales networks.

Price increases have been implemented across the region toaddress rising material costs. Based on current economic condi-tions, the company expects full-year industry unit shipments toincrease 3-to-5 percent.

Asia Operating Review

Mark HuExecutive Vice President, Whirlpool Asia

• The innovativeWhirlpool Mercuryline of high capaci-ty clothes washershas quickly becomeone of China's top-selling washers.

• The Ice Magic frost-freerefrigerator with 6thSense technology isthe only refrigerator onthe Indian market thatsenses the loss of coldair and lowers the tem-perature through itsDynamic AirflowControl System.

• Whirlpool India intro-duced the world's firstFrost Control refrigera-tor with 6th Sensetechnology, a highcapacity, single-doorrefrigerator that auto-matically defrosts thefreezer.


Locations

Headquaters: Shanghai, PRC

Manufacturing Locations:India Faridabad, Pune,

Pondicherry

China Shanghai, Shunde

Principle Products

Air Conditioners, Compressors,

Microwave Ovens,

Refrigerators, Washers

Key Statistics

• Leader among Westerncompanies

• $382 million in 2004sales

• $(25) million in 2004operating loss


Brands

Whirlpool

Awards:• Whirlpool Asia's clothes washers were recognized by the Chinese govern-

ment's product-standard agency as among the best performing, highquality appliances on the market.

• Whirlpool brand was featured by SUPERBRANDS, a global brand-rankingorganization, in its first edition of India's Superbrands.

whirlpool 2004ar

Documents

europe operating review

statistical review

customerfocused strategy

right strategy

manufacturing environment

theexternal environment

challenging environment

global operating platform