Fitch Ratings Affirms Whirlpool's Senior Notes At 'A-'; Rating Outlook Stable.

Business Editors

NEW YORK--(BUSINESS WIRE)--May 12, 2003

Fitch Ratings has affirmed the rating on Whirlpool Corporation's (Whirlpool) senior unsecured notes at 'A-' and the rating on Whirlpool Corp.'s and Whirlpool Finance B.V.'s commercial paper programs at 'F2'. The Rating Outlook is Stable. About $1.4 billion of debt is affected by these affirmations.

Whirlpool benefits from its leading market positions throughout the world, its broad geographic diversity, and its strong distribution capabilities which together have led to the company's solid financial profile. The ratings also consider Whirlpool's debt financed acquisition activity and sensitivity to changes in consumer spending.

Whirlpool is the world's largest appliance manufacturer and holds the No. 1 market position in many regions including North America, Latin America, Central Europe, and India. Whirlpool benefits from its broad product line of highly recognized brands, its successful innovation, and manufacturing and marketing expertise. In addition, Whirlpool has strong distribution partnerships, particularly in North America which accounts for 66% of revenues and 79% of operating profit. The largest consumer appliance retailer in the U.S., Sears, is Whirlpool's largest customer accounting for 21% of 2002 sales.

Since 2000, Whirlpool's revenues have increased 8.1% to $11.2 billion as the company completed several acquisitions and continued to benefit from new products and the strength of its leading brands, despite difficult economic conditions and pricing pressure in many of Whirlpool's markets. In addition, Whirlpool's almost $375 million 2-year restructuring program begun in 2001 has aided the company in maintaining solid operating profitability with EBITDA margin of 11.6%. Cash flow generation has remained strong with net free cash flow after dividends (EBITDA less cash interest, cash taxes, capital expenditures, changes in working capital, and dividends) of $615 million for the latest twelve months ended March 31, 2003 versus $739 million in 2001 and $112 million in 2000.

Credit protection measures have also remained strong despite the company's acquisition activity as Whirlpool's cash flow generation and cash on the balance sheet funded a large portion of the two acquisitions it completed in 2002. During the second quarter 2002, Whirlpool acquired Polar, a home appliance manufacturer in Poland, and the 51% interest in Vitromatic, a home appliance manufacturer in Mexico, that it did not already own for a total of $184 million in cash and $237 million in assumed debt. As a result, total debt increased by approximately $60 million in 2002. At March 31, 2003, a seasonal borrowing peak, total debt was $1.8 billion, leverage, measured by total debt to EBITDA, was 1.4 times (x) and EBITDA coverage of interest was 9.0x.

Fitch remains concerned about the weakened economies in the U.S. and in Europe, the company's two largest geographies, and the prospect for continued spending on home renovation. Nonetheless, Fitch expects revenue to improve and operating profit and cash flow generation to remain strong as Whirlpool benefits from the incorporation of full year results for Vitromatic and Polar, the introduction of new higher priced products, and continued restructuring efforts. Total debt should decline from 2002 levels as cash flow generation is used to further reduce balances. While significant acquisition activity is not expected, a large debt financed transaction could place pressure on the rating.