Correct: Fitch Rts Whirlpool's $300MM Euro Nts `A-'; On Rtg Outlook Neg.Business Editors NEW YORK--(BUSINESS WIRE)--June 19, 2001 (In a press release issued earlier, the commercial paper program rating was incorrectly stated as 'F1' when it is 'F2'. The correct press release follows.) Fitch rates Whirlpool whirlpool, revolving current in an ocean, river, or lake. It may be caused by the configuration of the shore, irregularities in the bottom of the body of water, the meeting of opposing currents or tides, or the action of the wind upon the water. Corp.'s 5.875% $300 million Euro 5-year notes 'A-'. Whirlpool's existing 'A-' rated $900 million senior debt and its $1.5 billion 'F2' rated commercial paper program are affirmed. The Rating Outlook remains Negative. The ratings reflect Whirlpool's leading market position, broad geographic diversity, and strong distribution capabilities as well as the expected improvement in credit measures through the end of 2001. Also considered is the company's sensitivity to changes in consumer spending Consumer demand or consumption is also known as personal consumption expenditure. It is the largest part of aggregate demand or effective demand at the macroeconomic level. as well as the changing patterns of retail distribution. In the second half of 2000 and into the first quarter of 2001, the U.S.'s slowing economy impacted Whirlpool's operating results. In addition, Whirlpool's total debt increased to about $2.0 billion on March 31, 2001 from about $1.4 billion at year-end 1999 as a result of both share repurchases Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. and acquisition activity. As a result, credit measures weakened with leverage, measured by total debt/EBITDA, increasing to 1.9 times (x) for the latest twelve months ended March 31, 2001 from 1.1x in 1999, and EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become coverage of interest declining to 6.0x from 7.8x, over the same period. In December 2000, Whirlpool announced a 12-18 month restructuring program with total expected charges between $300 million and $350 million to eliminate 6,000 positions worldwide, resulting in annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. savings between $225 million and $250 million. These actions combined with expected debt reduction should allow Whirlpool to improve credit measures to levels in line with the assigned rating category. The negative rating outlook recognizes weakening economic conditions which could affect the company's operating performance in the second half of 2001. Fitch does not expect any significant share repurchase or acquisition activity for the balance of the year. Whirlpool is the largest worldwide home appliance manufacturer holding the No. 1 market position in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. and Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. and the No. 3 position in Europe. In the North America, the company's largest market, which accounted for 59% of 2000 sales, Whirlpool is the principal appliance supplier to Sears Roebuck & Co., the largest appliance retailer in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . The company's second largest market is Europe, which accounted for 21% of 2000 sales, followed by Latin America 16% of sales and Asia 4% of sales. |
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