2019 ANNUAL REPORT 2019 ANNUAL Whirlpool Corporation 2019 ANNUAL REPORT Please visit our online Annual Report at WhirlpoolCorp.com/2019Annual Whirlpool Corporation (NYSE: WHR) is the leading major appliance manufacturer in the world(a), with approximately $20 billion in annual sales, 77,000 STOCKHOLDER AND OTHER INFORMATION employees and 59 manufacturing and technology Whirlpool Corporation’s Annual Report The Annual Report on Form 10-K and Stock Exchanges research centers in 2019. The company markets on Form 10-K and other financial company earnings releases for each Common stock of Whirlpool Corporation Whirlpool, KitchenAid, Maytag, Consul, Brastemp, information is available free of charge quarter—typically issued in April, July, (exchange symbol: WHR) is listed on the to stockholders. October and January—can be obtained New York and Chicago stock exchanges. Amana, Bauknecht, JennAir, Indesit and other major by contacting: The financial summary information Trademarks brand names in nearly every country throughout contained in this Annual Report Roxanne Warner Acros, Admiral, Affresh, Amana, Ariston, should be read together with Whirlpool Senior Director, Investor Relations the world. Bauknecht, Brastemp, Care Counts, Corporation’s Financial Statements and Whirlpool Corporation Consul, Diqua, Gladiator, Hotpoint*, Ignis, related notes and “Management’s 2000 N. M-63, Mail Drop 2609 Indesit, JennAir, KIC, KitchenAid, Laden, Discussion and Analysis” and “Forward- Benton Harbor, MI 49022-2692 Load & Go, Maytag, Privileg, Roper, Looking Statements.” This information Telephone: 269-923-2641 Royalstar, Sanyo, Speed Queen, appears in the company’s 2019 Annual Fax: 269-923-3525 Whirlpool, Yummly and the design of the Report on Form 10-K filed with the Email: [email protected] Who Are. We Operate. Where We 56 stand mixer are trademarks of Whirlpool Securities and Exchange Commission, NRTH ERC Corporation or its wholly or majority- which is available on the company’s owned affiliates. 21 website at Investors.WhirlpoolCorp.com. Sales by ERE, E EST, RC Region 16 TN ERC 7% S 31 RERERTRS REEERS Sales by 30 Product NRY Category 23 CN NCES 16 THER FOOTNOTES: Inside Front Cover, (a) Based on most recently available publicly reported annual revenues among leading appliance manufacturers. Page 3, (b) See table on page 128 of the 2019 Form 10-K for a reconciliation of the non-GAAP financial measure ROIC. SIX 59 Page 3, (c) See table on page 21 of this annual report for a reconciliation of the BRANDS WITH MANUFACTURING & non-GAAP financial measure Ongoing Earnings Per Share. TECHNOLOGY Page 7, (d) Based on 2019 Euromonitor data. $1B+ RESEARCH CENTERS Page 9, page 13, Inside Back Cover, *Whirlpool Corporation ownership of the Hotpoint brand in EMEA and Asia Pacific regions is not affiliated with the Hotpoint brand sold IN NET SALES in the Americas. Page 16, (e) Female representation of manager level and above as of December, 2019. Page 17, page 24, Habitat for Humanity International, United Way, SmartWay and certain other trademarks are owned by their respective companies. 67M 77,000 ©2020 Whirlpool Corporation. All rights reserved. PRODUCTS SOLD EMPLOYEES In the competitive global kitchen and laundry appliance industry, Whirlpool Corporation continues to lead the way with a relatively simple goal—we are in constant pursuit of improving life at home. For over 108 years we have set the bar that others follow because our products, work- place environments, practices, policies, and governance remain committed to improving life for our consumers, employees, and communities. Innovation permeates our culture, not only because we possess the right blend of talent and technologies, but because it drives us to meet the constantly evolving needs of our consumers throughout the world. Whirlpool Corporation | 2019 ANNUAL REPORT 1 2019 Letter to Shareholders A MESSAGE FROM MARC BITZER, CHAIRMAN AND CHIEF EXECUTIVE OFFICER Dear Shareholder, The very same principle is the reason why we adopted ESG policies more than 50 years ago. To illustrate this, I would like to share a quote from Elisha Gray in his annual letter to During this past year we saw a shareholders from 1969: public debate around “shareholder “1969 saw continuation of determined efforts on the part of Whirlpool and its subsidiaries to make meaningful contributions versus stakeholder” and the purpose to the improvement of the social climate in the communities where our facilities are located. We have long held that no of companies. At Whirlpool, we business can separate itself from the affairs and problems of the consider all stakeholders, but never society of which it is a part and hope to grow and prosper.” The current debate was brought about by the Business at the expense of our long-term Roundtable statement on company purpose that was signed by nearly 200 U.S. CEOs, including myself. This public shareholders. This principle has commitment to lead our respective companies for the benefit guided our company for 108 years of all stakeholders—our customers, employees, suppliers, communities and shareholders—includes the following tenets: and will do so in the future. • To our consumers, we commit to meeting or exceeding consumer expectations. • To our employees, we commit to fair compensation, benefits, training/development, and to provide a work environment that fosters inclusion and diversity, dignity and respect. 2 Whirlpool Corporation | 2019 ANNUAL REPORT Total Annual Revenue $25B $20B $15B $10B $5B $21.3B $20.4B $21.0B $0B 2017 2018 2019 Total Annual Revenue Ongoing EBIT Margin $25B 7.00% $20B 6.75% $15B 6.50% $10B 6.25% $5B $21.3B $20.4B $21.0B $0B 6.00% 2017 2018 2019 2017 2018 2019 Total Annual Revenue Ongoing EBIT Margin Return on Invested Capital(b) $25B 10% 7.00% $20B 8% 6.75% $15B 6% 6.50% $10B 4% $5B 6.25% 2% $21.3B 9.4% 8.4% $20.4B 9.5% $21.0B $0B 6.00% 0% 2017 2018 2019 2017 2018 2019 2017 2018 2019 Total Annual Revenue Ongoing EBIT Margin Return on Invested Capital(b) Free Cash Flow $25B 7.00% 10% $1,000M $20B 6.75% 8% $800M $15B 6% $600M 6.50% $10B 4% $400M 6.25% $5B 2% $200M $21.3B $20.4B 9.4% $912M 8.4% $21.0B $707M 9.5% $0B 6.00% 0% $0 $853M 2017 2018 2019 2017 2018 2019 2017 2018 2019 2017 2018 2019 (b) Ongoing EBIT Margin Return on Invested Capital Free Cash Flow 10% 7.00% $1,000M 8% 6.75% $800M • To our trade customers, we commit to innovative, the back half of the year. Both India and Brazil demonstrated 6% $600M 6.50%quality products. strong performance in a positive demand environment, while 4% $400M 6.25% our China business was challenged with a market decline and • To our suppliers, we commit to a fair2% and ethical $200M 9.4% 8.4% 9.5% the increased brand investments to facilitate the growth of the $912M $707M working relationship. $853M 6.00% 0% $0 2017 2018 2019 2017 2018 2019 Whirlpool brand. • To our communities, we commit to respecting all people 2017 2018 2019 and protecting the environment. Despite softness in the demand environment, we remained focused on our operational priorities, executed our price increases • And finally to our shareholders, those who help our company Return on Invested Capital(b) Free Cash Flow and started to successfully reduce our cost base. All while invest, grow and innovate: we commit to generating long-term 10% $1,000M increasing investments in our brands and products. The rigor value, transparency and effective engagement. 8% $800M in our operational execution throughout our global operations Turning to 2019, I’m very pleased to confirm that we are indeed allowed us to deliver yet another all-time record year—both 6% $600M generating long-term value for all those investing in Whirlpool from a GAAP earnings per share of $18.45 and from an 4% $400M Corporation and remain true to our mission of earning trust and ongoing earnings per share of $16.00(c). This strong perfor- creating2% demand for our brands. Let$200M me share a few highlights mance also showed up in Free Cash Flow of $912M 9.4% 8.4% 9.5% $912M $707M $853M of0% the year and our outlook for the future.$0 (~7% improvement versus prior year). 2017 2018 2019 2017 2018 2019 2019 in review Long-term shareholder value creation In short, our employees delivered yet another all-time record In May of 2019 we had the opportunity to present our plans Free Cash Flow earnings per share and achieved a TSR which was well ahead for long-term shareholder creation to the investor community. $1,000M of the broader market. Our long-term goals include: $800M The business environment we faced during 2019 was unique • ~3% annual organic net sales growth $600M compared to the prior year, presenting us with both positives • ~10% EBIT margin $400M and negatives. On the plus side, we saw a slowdown of the • 6%+ free cash flow as a percent of net sales $200Mbroader inflationary pressures which burdened us for the past • 12-14% return on invested capital $912M $707M $853M two$0 years. Raw materials have started to moderate and tariffs, As evidenced during last year, we are getting close to driving 2017 2018 2019 while still being a headwind for us, have stabilized. At the same the organic sales growth and the levels of free cash flow we time, consumer demand remained subdued in most major had committed to. We improved our ongoing EBIT margin markets throughout the world with the notable exception of 60 basis points and made progress toward our long-term India and Brazil during the latter half of the year. margin targets, however, we still have work ahead of us to From a regional perspective North America had another very reach our 10% EBIT target.