News Column

WHIRLPOOL CORP /DE/ - 10-K - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

February 18, 2014

This Management Discussion and Analysis should be read in connection with the Consolidated Financial Statements, Notes to the Consolidated Financial Statements and Selected Financial Data included in this Form 10-K. Certain references to particular information in the Notes to the Consolidated Financial Statements are made to assist readers. ABOUT WHIRLPOOL Whirlpool Corporation ("Whirlpool") is the world's leading global manufacturer and marketer of major home appliances with net sales of approximately $19 billion and net earnings available to Whirlpool of $827 million in 2013. We are a leading producer of major home appliances in North America and Latin America and have a significant presence throughout Europe and India. We have received worldwide recognition for accomplishments in a variety of business and social efforts, including leadership, diversity, innovative product design, business ethics, social responsibility and community involvement. We conduct our business through four reportable segments, which we define based on geography. Our reportable segments consist of North America, Latin America, EMEA (Europe, Middle East and Africa) and Asia. Our customer base includes large, sophisticated trade customers who have many choices and demand competitive products, services and prices. The major home appliance industry operates in an intensely competitive environment, reflecting the impact of both new and established global competitors, including Asian and European manufacturers. The charts below summarize the balance of net sales by reportable segment for 2013, 2012 and 2011, respectively: [[Image Removed]] We monitor country-specific economic factors such as gross domestic product, unemployment, consumer confidence, retail trends, housing starts and completions, sales of existing homes and mortgage interest rates as key indicators of industry demand. In addition to profitability, we also focus on country, brand, product and channel sales when assessing and forecasting financial results. Our leading portfolio of brands includes Whirlpool, Maytag, KitchenAid, Brastemp and Consul, each of which have annual revenues in excess of $1 billion. Our global branded consumer products strategy is to introduce innovative new products, increase brand customer loyalty, expand our presence in foreign markets, enhance our trade management platform, improve total cost and quality by expanding and leveraging our global operating platform and, where appropriate, make strategic acquisitions and investments. As we grow revenues in our core products, our strategy is to extend our business by offering products and services that are dependent on and related to our core business and expand into adjacent products, such as Affresh cleaners and Gladiator GarageWorks, through stand-alone businesses that leverage our core competencies and business infrastructure. 15



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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS - (CONTINUED) 2013 OVERVIEW Whirlpool delivered very strong operating results in 2013 as we continued to execute our business priorities, which include continued investments in new product innovations, a focus on cost productivity programs and the execution of cost and capacity reduction initiatives. These priorities, which have been consistent for several years, placed us in a strong position to benefit from the improving consumer confidence and industry demand levels experienced in the United States during 2013. A continuation of the recessionary demand environment throughout the Eurozone, a slowdown in emerging markets and volatility in foreign currencies partially offset the positive results in the United States during 2013. We believe that continued execution of our business priorities and a focus on long-term growth will allow the Company to adapt to changes in the macroeconomic environment and maintain our position as the world's leading global manufacturer and marketer of major home appliances. RESULTS OF OPERATIONS The following table summarizes the consolidated results of operations: December 31, Consolidated - Millions of dollars (except per share data) 2013 Change 2012 Change 2011 Net sales $ 18,769 3.4% $ 18,143 (2.8)% $ 18,666 Gross margin 3,298 14.0 2,893 12.3 2,577 Selling, general and administrative 1,828 (4.0) 1,757 (8.4) 1,621 Restructuring costs 196 17.2 237 (74.3) 136 Interest and sundry income (expense) (155 ) (38.8) (112 ) nm (607 ) Interest expense (177 ) 11.0 (199 ) 6.7 (213 ) Income tax expense (benefit) 68 49.2 133 nm (436 ) Net earnings available to Whirlpool 827 106.0 401 3.0 390 Diluted net earnings available to Whirlpool per share $ 10.24 102.3% $ 5.06 1.5% $ 4.99 nm: not meaningful Consolidated Net Sales The following tables summarize units sold and consolidated net sales by operating segment: December 31, Units Sold - In thousands 2013 Change 2012 Change 2011 North America 25,895 6.6 % 24,291 (5.0 )% 25,575 Latin America 13,422 6.2 12,637 6.8 11,830 EMEA 11,907 3.1 11,546 (6.4 ) 12,334 Asia 3,917 (2.7 ) 4,028 0.4 4,014 Consolidated 55,141 5.0 % 52,502 (2.3 )% 53,753 December 31, Consolidated Net Sales - Millions of dollars 2013 Change 2012 Change 2011 North America $ 10,178 5.7 % $ 9,631 0.5 % $ 9,582 Latin America 4,928 (0.5 ) 4,950 (2.2 ) 5,062 EMEA 3,024 5.2 2,874 (13.1 ) 3,305 Asia 807 (4.8 ) 847 (3.8 ) 881 Other/eliminations (168 ) - (159 ) - (164 ) Consolidated $ 18,769 3.4 % $ 18,143 (2.8 )% $ 18,666 Consolidated net sales increased 3.4% compared to 2012 primarily due to higher unit shipments and BEFIEX credits, partially offset by the unfavorable impact of foreign currency and changes in product mix. Excluding the impact of foreign currency and BEFIEX credits, consolidated net sales increased 4.4% compared to 2012. Consolidated net sales for 2012 decreased 2.8% compared to 2011 primarily due to the unfavorable impact of foreign currency, lower BEFIEX credits recognized and lower unit shipments, which were largely offset by favorable pricing and mix. Excluding the impact of foreign currency and BEFIEX credits, consolidated net sales for 2012 increased 2.9% compared to 2011. 16



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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS - (CONTINUED) We provide the percentage change in net sales, excluding the impact of foreign currency and BEFIEX credits, as a supplement to the change in net sales as determined by U.S. generally accepted accounting principles ("GAAP") to provide stockholders with a clearer basis to assess Whirlpool's results over time. This measure is considered a non-GAAP financial measure and is calculated by translating the current period net sales excluding BEFIEX credits, in functional currency, to U.S. dollars using the prior-year period's exchange rate compared to the prior-year period net sales excluding BEFIEX credits. Significant regional trends were as follows:



North America net sales increased 5.7% compared to 2012 primarily due

to a 6.6% increase in units sold, partially offset by changes in product mix and foreign currency. North America net sales for 2012 increased 0.5% compared to 2011 primarily due to favorable product price/mix, partially offset by a 5.0% decrease in units sold.



Latin America net sales decreased 0.5% compared to 2012 primarily due

to the unfavorable impact of foreign currency, partially offset by a 6.2% increase in units sold and higher BEFIEX credits. Excluding the impact of foreign currency and BEFIEX credits, Latin America net sales



increased 4.1% in 2013. Latin America net sales for 2012 decreased 2.2%

compared to 2011 primarily due to the unfavorable impact of foreign currency, and lower BEFIEX credits recognized, partially offset by a



6.8% increase in units sold and favorable product price/mix. Excluding

the impact of foreign currency and BEFIEX credits, Latin America net sales increased 13.9% in 2012. We were able to recognize approximately $109 million, $37 million and $266 million of BEFIEX credits in 2013, 2012 and 2011, respectively. As of December 31, 2013, approximately $66 million of future cash monetization remained, including $52 million of related court awarded fees, which is not expected to be payable for several years. For additional information regarding BEFIEX credits, see Note 11 of the Notes to the Consolidated Financial Statements. EMEA net sales increased 5.2% compared to 2012, primarily due to the favorable impact of foreign currency and a 3.1% increase in units sold.



Excluding the impact of foreign currency, net sales increased 1.8%. In

2012 EMEA net sales decreased 13.1% compared to 2011, primarily due to the unfavorable impact of foreign currency and a 6.4% decrease in units



sold. Excluding the impact of foreign currency, net sales decreased

6.6%. Asia net sales decreased 4.8% compared to 2012 primarily due to the unfavorable impact of foreign currency and a 2.7% decrease in units sold, partially offset by favorable product price/mix. Excluding the impact of foreign currency, Asia net sales decreased 1.1%. Asia net sales for 2012 decreased 3.8% compared to 2011 primarily due to the



unfavorable impact of foreign currency, partially offset by favorable

product price/mix. Excluding the impact of foreign currency, Asia net sales increased 3.8%. Gross Margin The table below summarizes gross margin percentages by region: December 31, Percentage of net sales 2013 Change 2012 Change 2011 North America 18.1 % 1.7 pts 16.4 % 5.1 pts 11.3 % Latin America 19.4 1.7 17.7 (2.3 ) 20.0 EMEA 11.2 1.5 9.7 (0.4 ) 10.1 Asia 18.6 0.7 17.9 1.4 16.5 Consolidated 17.6 % 1.7 pts 15.9 % 2.1 pts 13.8 % The consolidated gross margin percentage increased 1.7 points to 17.6% compared to 2012, primarily due to productivity, restructuring initiatives, higher BEFIEX credits, and favorable price/mix, partially offset by higher material costs.



Significant regional trends were as follows:

North America gross margin increased compared to 2012 primarily due to

productivity and cost and capacity reduction initiatives, partially

offset by a 2012 curtailment gain in a postretirement benefit plan that

did not recur in 2013. North America gross margin for 2012 reflected

strong improvement compared to 2011 primarily due to the favorable

impact from previously announced cost-based price increases and cost

and capacity reduction initiatives, partially offset by higher material

costs and a supplier recovery payment received in the prior year that did not recur in 2012. 17



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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (CONTINUED) Latin America gross margin increased compared to 2012 primarily due to



favorable product price/mix, productivity and BEFIEX credits, partially

offset by higher material costs. During 2012, Latin America gross margin decreased compared to 2011 primarily due to $229 million in lower BEFIEX credits recognized due to a IPI sales tax holiday during 2012 and higher material costs, partially offset by favorable product



price/mix and continued productivity and cost reduction initiatives.

EMEA gross margin increased compared to 2012 primarily due to increased

productivity and benefits from restructuring initiatives, partially

offset by higher material costs. During 2012, EMEA gross margin decreased compared to 2011 primarily due to lower production levels related to the weak demand environment throughout Europe and higher



material costs, which were partially offset by the favorable impact of

product price/mix, productivity and benefits from restructuring initiatives.



Asia gross margin increased in 2013 and in 2012 when compared to the

prior year periods, primarily due to favorable product price/mix and

productivity, partially offset by the unfavorable impacts of higher

material costs and foreign currency.

Selling, General and Administrative The following table summarizes selling, general and administrative expenses as a percentage of sales by region: December 31, As a % As a % As a % Millions of dollars 2013 of Net Sales 2012 of Net Sales 2011 of Net Sales North America $ 758 7.5% $ 707 7.3% $ 658 6.9% Latin America 399 8.1 400 8.1 370 7.3 EMEA 338 11.2 332 11.5 333 10.1 Asia 116 14.4 115 13.6 115 13.1 Corporate/other 217 - 203 - 145 - Consolidated $ 1,828 9.7% $ 1,757 9.7% $ 1,621 8.7% Consolidated selling, general and administrative expenses in 2013 reflect an increased investment in consumer advertising compared to 2012 and remain flat as a percent of consolidated net sales due to leverage on increased sales. Selling, general and administrative expenses as a percent of consolidated net sales in 2012 increased compared to 2011, primarily due to higher employee incentive compensation. Restructuring During the fourth quarter 2011, the Company committed to restructuring plans (the "2011 Plan") to expand our operating margins and improve our earnings through substantial cost and capacity reductions, primarily within our North America and EMEA operating segments. All actions related to the 2011 Plan have been announced and are now substantially complete, with cumulative costs of $511 million incurred through December 31, 2013. Approximately $50 million in costs related to actions authorized under the 2011 Plan remain and will be recognized primarily during 2014. In January 2014, the Company announced the closure of a microwave oven manufacturing facility in EMEA by the end of 2014. This action, combined with other organizational efficiency actions in EMEA, are expected to result in charges of approximately $50 million in 2014 primarily related to employee termination costs, non-cash asset impairment costs and facility exit costs. We incurred restructuring charges of $196 million, $237 million, and $136 million for the years ended December 31, 2013, 2012 and 2011, respectively. Future cash expenditures relating to the 2011 Plan and the other actions discussed above are approximately $177 million, of which, we expect the majority to be paid in 2014. Additional information about restructuring activities can be found in Note 10 of the Notes to the Consolidated Financial Statements. 18



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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS - (CONTINUED) Interest and Sundry Income (Expense) Interest and sundry income (expense) increased $43 million compared to 2012, primarily driven by charges related to Embraco antitrust matters, a Brazilian government settlement, and investment expenses related to the pending acquisition of Hefei Rongshida Sanyo Electric Co., Ltd. ("Hefei Sanyo"). During 2012, interest and sundry income (expense) decreased $495 million compared to 2011, primarily driven by charges related to the 2011 settlement of the Brazilian collection dispute and lower charges related to Embraco antitrust matters, partially offset by 2012 expenses related to the conclusion of long-standing United States contract and patent resolutions. For additional information about the Embraco antitrust matters, the Brazilian collection dispute, and the Brazilian government settlement, see Note 6 of the Notes to the Consolidated Financial Statements. For additional information about the pending acquisition of Hefei Sanyo, see Note 15 of the Notes to the Consolidated Financial Statements. Interest Expense Interest expense decreased $22 million compared to 2012, primarily due to lower interest rates. During 2012, interest expense decreased $14 million compared to 2011, primarily due to lower interest rates, partially offset by higher average monthly debt levels. Income Taxes The income tax expense (benefit) was $68 million, $133 million, and ($436) million in 2013, 2012 and 2011, respectively. The decrease in tax expense in 2013 compared to 2012 is primarily due to United States energy tax credits recognized, partially offset by higher pre-tax earnings. The "American Taxpayer Relief Act of 2012," signed in January 2013, reinstated the energy tax credit for 2012 and 2013, and resulted in a tax credit benefit related to the production of qualifying appliances in 2012 and 2013 in the combined amount of $126 million, all of which was recognized in 2013. The increase in tax expense in 2012 compared to 2011 is primarily due to higher pre-tax earnings and the expiration of the United States energy tax credit in 2012. For additional information about our consolidated tax provision, see Note 11 of the Notes to the Consolidated Financial Statements. The following table summarizes the difference between income tax expense at the United States statutory rate of 35% and the income tax expense (benefit) at effective worldwide tax rates for the respective periods: Millions of dollars 2013 2012 2011 Earnings (loss) before income taxes United States $ 149$ 113$ (240 ) Foreign 768 445 212 Earnings (loss) before income taxes 917 558 (28 ) Income tax computed at United States statutory rate 321 195 (10 ) U.S. government tax incentives, including Energy Tax Credits (142 ) - (379 ) Foreign government tax incentives, including BEFIEX (63 ) (38 ) (100 ) Foreign tax rate differential (17 ) (2 ) (13 ) U.S. foreign tax credits (231 ) (31 ) (37 ) Valuation allowances 16 (86 ) 11 State and local taxes, net of federal tax benefit 7 2 (4 ) Foreign withholding taxes 29 12 10 Non-deductible government settlements - - 30 U.S. tax on foreign dividends and subpart F income 195 57 26 Settlement of global tax audits (54 ) 18 10 Other items, net 7 6 20 Income tax expense (benefit) computed at effective worldwide tax rates $ 68$ 133$ (436 ) 19



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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS - (CONTINUED) FORWARD-LOOKING PERSPECTIVE We currently estimate earnings per diluted share and industry demand for 2014 to be within the following ranges: 2014 Millions of dollars, except per share data Current



Outlook

Estimated earnings per diluted share, for the year ending December 31, 2014 $11.05 - $11.55 Including: BEFIEX credits $0.21 Restructuring expense $(0.95) Investment expense $(0.21) Industry demand North America 5% - 7% Latin America Flat EMEA 0% - 2% Asia 0% - 3% For the full-year 2014, we expect to generate free cash flow of approximately $700 million, including restructuring cash outlays of up to $150 million, capital spending of $625 million to $675 million and U.S. pension contributions of approximately $160 million. The table below reconciles projected 2014 cash provided by operations determined in accordance with GAAP to free cash flow, a non-GAAP measure. Management believes that free cash flow provides stockholders with a relevant measure of liquidity and a useful basis for assessing Whirlpool's ability to fund its activities and obligations. There are limitations to using non-GAAP financial measures, including the difficulty associated with comparing companies that use similarly named non-GAAP measures whose calculations may differ from our calculations. We define free cash flow as cash provided by continuing operations less capital expenditures and including proceeds from the sale of assets/businesses. 2014 Millions of dollars Current Outlook Cash provided by operating activities $ 1,325 - $ 1,375 Capital expenditures and proceeds from sale of assets/businesses (625 ) - (675 ) Free cash flow $ 700 - $ 700 The projections above are based on many estimates and are inherently subject to change based on future decisions made by management and the Board of Directors of Whirlpool, and significant economic, competitive and other uncertainties and contingencies. FINANCIAL CONDITION AND LIQUIDITY Our objective is to finance our business through operating cash flow and the appropriate mix of long-term and short-term debt. By diversifying the maturity structure, we avoid concentrations of debt, reducing liquidity risk. We have varying needs for short-term working capital financing as a result of the nature of our business. We regularly review our capital structure and liquidity priorities, which include funding the business through capital and engineering spending to support innovation and productivity initiatives, funding our pension plan and term debt liabilities, providing return to shareholders and potential acquisitions. In the last 12 months Whirlpool's credit rating was upgraded by S&P to BBB and by Moody's to Baa2, returning to pre-recession levels. Recent improvements in consumer confidence and housing within the United States have begun a trend away from the recessionary demand environment experienced in recent years. These improvements have offset the financial impact from higher global material costs and economic weakness throughout the Eurozone. While we continue to expect that we will operate under uncertain and volatile global economic conditions, we believe that the improving trends in the United States and our recently executed and announced cost and capacity reductions will allow us to generate operating cash flow, together with access to sufficient sources of liquidity, that will be adequate to meet our ongoing requirements to fund our operations. 20



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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS - (CONTINUED) As disclosed on our current report on Form 8-K, which we filed with the SEC on August 13, 2013, on August 12, 2013, Whirlpool's wholly-owned Chinese subsidiary entered into agreements to acquire a 51 % equity stake in Hefei Rongshida Sanyo Electric Co., Ltd. ("Hefei Sanyo"), through two transactions, for an aggregate purchase price of RMB 3.4 billion (approximately $555 million as of December 31, 2013). The Company currently intends to fund the total consideration for the shares with cash on hand or other public or private debt financing depending on the timing of the closing and market conditions. The acquisition, which has been approved by Hefei Sanyo's board of directors, is subject to certain closing conditions. Approvals from the Ministry of Commerce of the People's Republic of China (antitrust and foreign strategic investment), the State-owned Assets Supervision and Administration Commission of the State Council, and Hefei Sanyo shareholders (share purchase and private placement transactions) have been received. The China Securities Regulatory Commission approval (including waiver of a tender offer), as well as regulatory reviews and approvals by other governmental authorities, have not yet been received. The acquisition is also subject to a $20 million breakup fee. Whirlpool currently expects to close the transactions anytime between the end of the second quarter and the end of 2014. Additionally, the transaction includes the commitment of capital and technical resources to enhance Hefei Sanyo's research and development and product innovation. Additional information about the transaction can be found in Note 15 of the Notes to the Consolidated Financial Statements. Our short term potential uses of liquidity include funding our ongoing capital spending, restructuring activities, our United States pension plans and returns to shareholders. We also have $607 million of term debt maturing in the next twelve months. We monitor the credit ratings and market indicators of credit risk of our lending, depository, and derivative counterparty banks regularly. In addition, we diversify our deposits and investments in short term cash equivalents to limit the concentration of exposure by counterparty. We continue to monitor the general financial instability and uncertainty throughout Europe. At December 31, 2013, we had cash, cash equivalents and third-party receivables of approximately $385 million in Belgium, which was the only country in Europe with exposure for cash, cash equivalents and third party receivables greater than 1% of our consolidated assets. In addition, as of December 31, 2013, we had $76 million in outstanding trade and other receivables associated with Alno AG, a long-standing European customer. Alno took steps to strengthen its financial position during 2013, including the successful issuance in 45 million public bonds during the second quarter. Additionally, in April 2013, we agreed to convert 30 million (equivalent to $41 million as of December 31, 2013) of past due receivables into a note receivable, at a fair market interest rate, with 10 million due in 2014 and 20 million due in 2017. This transaction did not have a material impact on our results of operations based on our assessment of the fair value of the receivables. As of December 31, 2013, we had $1.4 billion of cash and equivalents on hand, of which $1.3 billion was held outside of the United States. Our cash balance in the United States at December 31, 2013 decreased from the prior year primarily due to higher return to shareholders through higher dividends paid and the resumption of our share repurchase program during 2013. Our intent is to permanently reinvest these funds outside of the United States and our current plans do not demonstrate a need to repatriate these funds to fund our U.S. operations. However, if these funds were repatriated, then we would be required to accrue and pay applicable U.S. taxes (subject to an adjustment for foreign tax credits) and withholding taxes payable to various countries. Sources and Uses of Cash We met our cash needs during 2013 through cash flows from operations, cash and equivalents, and financing arrangements. Our cash and equivalents at December 31, 2013 increased $212 million compared to the same period in 2012. Significant drivers of changes in our cash and equivalents balance during 2013 are discussed below: Cash Flow Summary Millions of dollars 2013 2012 2011 Cash provided by (used in): Operating activities $ 1,262$ 696$ 530 Investing activities (582 ) (494 ) (596 ) Financing activities (434 ) (148 ) (166 ) Effect of exchange rate changes (34 ) 5



(27 ) Net increase (decrease) in cash and equivalents $ 212$ 59$ (259 )

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS - (CONTINUED) Cash Flows from Operating Activities The increase in cash provided by operations during 2013 reflects higher cash earnings and working capital improvements, which were partially offset by $116 million to fund our United States qualified pension plans. The increase in cash provided by operations during 2012 reflects strong cash earnings and working capital improvements, which were partially offset by approximately $400 million for legal settlements and $167 million to fund our United States qualified pension plans. The timing of cash flows from operations varies significantly within a quarter primarily due to changes in production levels, sales patterns, promotional programs, funding requirements as well as receivable and payment terms. Dependent on timing of cash flows, the location of cash balances, as well as the liquidity requirements of each country, external sources of funding are used to support working capital requirements throughout the year. Due to the variables discussed above, cash flow used in operations during the year may significantly exceed our quarter and year-end balances. We offer our suppliers access to third party payables processors. Independent of Whirlpool, the processors allow suppliers to sell their receivables to financial institutions at the discretion of only the supplier and the financial institution. We have no economic interest in the sale of these receivables and no direct financial relationship with the financial institutions concerning these services. All of our obligations, including amounts due, remain to our suppliers as stated in our supplier agreements. As of December 31, 2013 and 2012, approximately $1.3 billion and $1.2 billion, respectively, have been sold by suppliers to participating financial institutions. Cash Flows from Investing Activities Cash used in investing activities of $582 million during 2013 increased $88 million from 2012, primarily driven by higher capital investment to support new product innovations. Cash used in investing activities of $494 million during 2012 decreased $102 million from 2011, primarily driven by lower capital investment due to project timing and the completion of a significant investment in a new cooking facility in the United States during 2011. Cash Flows from Financing Activities Cash used in financing activities during 2013 increased compared to 2012 primarily due to the resumption of our share repurchase program and higher cash dividends, partially offset by increased proceeds from the issuance of common stock associated with stock option exercises. Cash used in financing activities during 2012 decreased compared to 2011, reflecting increased proceeds from the issuance of common stock associated with stock options, partially offset by a net reduction in long-term debt levels and higher cash dividends. Financing Arrangements We have a $1.725 billion committed credit facility maturing on June 28, 2016, which includes a $200 million letter of credit sub-facility. Borrowings under the credit facility are available to us and designated subsidiaries for general corporate purposes, including commercial paper support. Subsidiary borrowings under this facility, if any, are guaranteed by Whirlpool Corporation. Interest under the credit facility accrues at a variable annual rate based on LIBOR plus a margin or the prime rate plus a margin. The margin is dependent on our credit rating at that time. The credit facility requires us to meet certain leverage and interest coverage requirements. We will incur a commitment fee based on Whirlpool's credit rating for any unused portion of the credit facility. At December 31, 2013 and 2012, we had no borrowings outstanding under this credit agreement and are in compliance with all financial covenant requirements. We have committed credit facilities in Brazil, which provide borrowings up to 1,120 million Brazilian reais (approximately $478 million as of December 31, 2013) maturing in 2014 and in 2015. The credit facilities contain no financial covenants and we had no borrowings outstanding under these credit facilities at December 31, 2013 and 2012. In March 2013, $500 million of 5.50% notes matured and were repaid. On February 27, 2013, we completed a debt offering of $250 million principal amount of 3.70% notes due in 2023 and $250 million principal amount of 5.15% notes due in 2043 (collectively, the "Notes"). The Notes contain covenants that limit our ability to incur certain liens or enter into certain sale and lease-back transactions. In addition, if we experience a specific kind of change of control, we are required to make an offer to purchase all of the Notes at a purchase price of 101% of the principal amount thereof, plus accrued and unpaid interest. The Notes are registered under the Securities Act of 1933, as amended, pursuant to the Company's Registration Statement on Form S-3 (File No. 333-181339) filed with the SEC on May 11, 2012. 22



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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS - (CONTINUED) During 2012 we completed a debt offering comprised of $300 million aggregate principal amount of 4.70% notes due June 1, 2022. Proceeds from the issuance were used to partially repay $350 million in term debt that matured in May 2012. The notes contain customary covenants that limit our ability to incur certain liens or enter into certain sale and lease-back transactions. In addition, if we experience a specific kind of change of control, we are required to make an offer to purchase all of the notes at a purchase price of 101% of the principal amount thereof, plus accrued and unpaid interest. For additional information about our financing arrangements, see Note 5 of the Notes to the Consolidated Financial Statements. 401(k) Defined Contribution Plan During January 2012, we began contributing company stock to fund the company match and automatic company contributions, equal to up to 7% of employees' eligible pay, in our 401(k) defined contribution plan covering all U.S. employees. We contributed $49 million of company stock to our 401(k) defined contribution plan during 2012. We resumed funding the company match and automatic contribution in cash during the fourth quarter 2012.



CONTRACTUAL OBLIGATIONS AND FORWARD-LOOKING CASH REQUIREMENTS The following table summarizes our expected cash outflows resulting from financial contracts and commitments:

Payments due by period Millions of 2015 & 2017 & dollars Total 2014 2016 2018 Thereafter Long-term debt obligations(1) $ 3,269$ 725$ 882$ 122$ 1,540 Operating lease obligations 851 201 298 208 144 Purchase obligations(2) 1,027 225 340 243 219 Brazilian government settlement(3) 51 21 30 - - United States pension plans(4) 708 160 211 179 158 Foreign pension plans(5) 11 11 - - - Other postretirement benefits(6) 434 51 103 93 187 Legal settlements(7) 66 45 21 - - Total(8) $ 6,417$ 1,439$ 1,885$ 845$ 2,248 (1) Interest payments related to long-term debt are included in the table above. For additional information about our financing arrangements, see Note 5 of the Notes to the Consolidated Financial Statements.



(2) Purchase obligations include our "take-or-pay" contracts with materials

vendors and minimum payment obligations to other suppliers. (3) Represents payments agreed to under a Brazil government settlement



program. See Note 6 of the Notes to the Consolidated Financial Statements

for additional information. (4) Represents the minimum contributions required by law estimated based on



current interest rates, asset return assumptions, legislative requirements

and other actuarial assumptions at December 31, 2013. Management may elect to contribute amounts in addition to those required by law. See Note 12 of the Notes to the Consolidated Financial Statements for additional information. (5) Represents required contributions to our foreign funded pension plans



only. See Note 12 of the Notes to the Consolidated Financial Statements

for additional information.

(6) Represents our portion of expected benefit payments under our retiree

healthcare plans.

(7) For additional information regarding legal settlements, see Note 6 of the

Notes to the Consolidated Financial Statements.

(8) The table does not include any payments related to the pending acquisition

of a 51% equity interest in Hefei Sanyo, which is expected to close in 2014. For additional information about the pending acquisition, see Note 15 of the Notes to the Consolidated Financial Statements. This table also does not include short-term credit facility and commercial paper borrowings. For additional information about short-term borrowings, see Note 5 of the Notes to the Consolidated Financial Statements. OFF-BALANCE SHEET ARRANGEMENTS We have guarantee arrangements in a Brazilian subsidiary. As a standard business practice in Brazil, the subsidiary guarantees customer lines of credit at commercial banks to support purchases, following its normal credit policies. If a customer were to default on its line of credit with the bank, our subsidiary would be required to satisfy the obligation with the bank and the receivable would revert back to the subsidiary. As of December 31, 2013 and 2012, the guaranteed amounts totaled $485 million and $449 million, respectively. Our subsidiary insures against credit risk for these guarantees, under normal operating conditions, through policies purchased from high-quality underwriters. We had no losses associated with these guarantees in 2013 or 2012. 23



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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS - (CONTINUED) We have guaranteed a $50 million five year revolving credit facility between certain financial institutions and a not-for-profit entity in connection with a community and economic development project ("Harbor Shores"). The credit facility, which originated in 2008, was refinanced in December 2012 and we renewed our guarantee through 2017. The fair value of the guarantee was nominal. The purpose of Harbor Shores is to stimulate employment and growth in the areas of Benton Harbor and St. Joseph, Michigan. In the event of default, we must satisfy the guarantee of the credit facility up to the amount borrowed at the date of default. In the ordinary course of business, we enter into agreements with financial institutions to issue bank guarantees, letters of credit and surety bonds. These agreements are primarily associated with unresolved tax matters in Brazil, as is customary under local regulations, and governmental obligations related to certain employee benefit arrangements. As of December 31, 2013 and 2012 we had approximately $404 million and $600 million outstanding under these agreements, respectively. CRITICAL ACCOUNTING POLICIES AND ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles in the United States (GAAP) requires management to make certain estimates and assumptions. We periodically evaluate these estimates and assumptions, which are based on historical experience, changes in the business environment and other factors that management believes to be reasonable under the circumstances. Actual results may differ materially from these estimates. Pension and Other Postretirement Benefits Accounting for pensions and other postretirement benefits involves estimating the costs of future benefits and attributing the cost over the employee's expected period of employment. The determination of our obligation and expense for these costs requires the use of certain assumptions. Those assumptions include the discount rate, expected long-term rate of return on plan assets and health care cost trend rates. These assumptions are subject to change based on interest rates on high quality bonds, stock and bond markets and medical cost inflation, respectively. Actual results that differ from our assumptions are accumulated and amortized over future periods and therefore, generally affect our recognized expense and accrued liability in such future periods. While we believe that our assumptions are appropriate given current economic conditions and actual experience, significant differences in results or significant changes in our assumptions may materially affect our pension and other postretirement benefit obligations and related future expense. Our pension and other postretirement benefit obligations at December 31, 2013 and preliminary retirement benefit costs for 2014 were prepared using the assumptions that were determined at December 31, 2013. The following table summarizes the sensitivity of our December 31, 2013 retirement obligations and 2014 retirement benefit costs of our United States plans to changes in the key assumptions used to determine those results: Estimated increase (decrease) in Percentage PBO/APBO* Millions of dollars Change 2014 Expense for 2013 United States Pension Plans Discount rate +/-50bps $ (1)/- $ (188)/199 Expected long-term rate of return on plan assets +/-50bps (13)/13 - United States Other Postretirement Benefit Plan Discount rate +/-50bps 1/(2) (18)/13 Health care cost trend rate +/-100bps - 2/(2) * Projected benefit obligation (PBO) for pension plans and accumulated



postretirement benefit obligation (APBO) for other postretirement benefit

plans.

These sensitivities may not be appropriate to use for other years' financial results. Furthermore, the impact of assumption changes outside of the ranges shown above may not be approximated by using the above results. For additional information about our pension and other postretirement benefit obligations, see Note 12 of the Notes to the Consolidated Financial Statements. 24



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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS - (CONTINUED) Income Taxes We estimate our income taxes in each of the taxing jurisdictions in which we operate. This involves estimating actual current tax expense together with assessing any temporary differences resulting from the different treatment of certain items, such as the timing for recognizing expenses, for tax and accounting purposes. These differences may result in deferred tax assets or liabilities, which are included in our Consolidated Balance Sheets. We are required to assess the likelihood that deferred tax assets, which include net operating loss carryforwards, foreign tax credits and deductible temporary differences, are expected to be realizable in future years. Realization of our net operating loss and foreign tax credit deferred tax assets is supported by specific tax planning strategies and, where possible, considers projections of future profitability. If recovery is not more likely than not, we provide a valuation allowance based on estimates of future taxable income in the various taxing jurisdictions, and the amount of deferred taxes that are ultimately realizable. If future taxable income is lower than expected or if tax planning strategies are not available as anticipated, we may record additional valuation allowances through income tax expense in the period such determination is made. Likewise, if we determine that we are able to realize our deferred tax assets in the future in excess of net recorded amounts, an adjustment to the deferred tax asset will benefit income tax expense in the period such determination is made. As of December 31, 2013 and 2012, we had total deferred tax assets of $3.0 billion and $3.1 billion, respectively, net of valuation allowances of $186 million and $130 million, respectively. Our income tax benefit or expense has fluctuated considerably over the last five years from a tax benefit of $436 million in 2011 to the current year tax expense of $68 million and has been influenced primarily by U.S. energy tax credits, audit settlements and adjustments, tax planning strategies, enacted legislation, and dispersion of global income. Future changes in the effective tax rate will be subject to several factors, including remaining BEFIEX credits, business profitability, tax planning strategies, and enacted tax laws. In addition, we operate within multiple taxing jurisdictions and are subject to audit in these jurisdictions. These audits can involve complex issues, which may require an extended period of time to resolve. For additional information about income taxes, see Notes 1, 6 and 11 of the Notes to the Consolidated Financial Statements. BEFIEX Credits In previous years, our Brazilian operations earned tax credits under the Brazilian government's export incentive program (BEFIEX). These credits reduce Brazilian federal excise taxes on domestic sales, resulting in an increase in the operations' recorded net sales. We recognize BEFIEX credits as they are monetized; however, future actions by the Brazilian government could limit our ability to monetize these export credits. For additional information regarding BEFIEX credits, see Note 11 of the Notes to the Consolidated Financial Statements. Warranty Obligations The estimation of warranty obligations is determined in the same period that revenue from the sale of the related products is recognized. The warranty obligation is based on historical experience and represents our best estimate of expected costs at the time products are sold. Warranty accruals are adjusted for known or anticipated warranty claims as new information becomes available. New product launches require a greater use of judgment in developing estimates until historical experience becomes available. Future events and circumstances could materially change our estimates and require adjustments to the warranty obligations. For additional information about warranty obligations, see Note 6 of the Notes to the Consolidated Financial Statements. Goodwill and Intangibles Certain business acquisitions have resulted in the recording of goodwill and trademark assets. Upon acquisition, the purchase price is first allocated to identifiable assets and liabilities, including trademark assets, based on estimated fair value, with any remaining purchase price recorded as goodwill. Most trademarks and goodwill are considered indefinite lived intangible assets and as such are not amortized. At December 31, 2013, we have goodwill of $1,724 million, which is primarily recorded within our North America reporting unit. There have been no changes to our reporting units or allocations of goodwill by reporting units. We have trademark assets in our North America and EMEA operating segments with a carrying value of $1,470 million and $53 million, respectively, as of December 31, 2013. We perform our annual impairment assessment for goodwill and other indefinite-lived intangible assets as of October 1st and more frequently if indicators of impairment exist. Goodwill Valuations We evaluate goodwill using a qualitative assessment to determine whether it is more likely than not that the fair value of any reporting unit is less than its carrying amount. If we determine that the fair value of the reporting unit may be less than its carrying amount, we evaluate goodwill using a two-step impairment test. Otherwise, we conclude that no impairment is indicated and we do not perform the two-step impairment test. 25



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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS - (CONTINUED) In conducting a qualitative assessment, the Company analyzes a variety of events or factors that may influence the fair value of the reporting unit, including, but not limited to: the results of prior quantitative tests performed; changes in the carrying amount of the reporting unit; actual and projected operating results; relevant market data for both the company and its peer companies; industry outlooks; macroeconomic conditions; liquidity; changes in key personnel; and the Company's competitive position. Significant judgment is used to evaluate the totality of these events and factors to make the determination of whether it is more likely than not that the fair value of the reporting unit is less than its carrying value. If the qualitative assessment concludes that the two-step impairment test is necessary, we first compare the book value of a reporting unit, including goodwill, with its fair value. The fair value is estimated based on a market approach and a discounted cash flow analysis, also known as the income approach, and is reconciled back to the current market capitalization for Whirlpool to ensure that the implied control premium is reasonable. If the book value of a reporting unit exceeds its fair value, we perform the second step to estimate an implied fair value of the reporting unit's goodwill by allocating the fair value of the reporting unit to all of the assets and liabilities other than goodwill (including any unrecognized intangible assets). The difference between the total fair value of the reporting unit and the fair value of all the assets and liabilities other than goodwill is the implied fair value of that goodwill. The amount of impairment loss is equal to the excess of the book value of the goodwill over the implied fair value of that goodwill. Evaluating Goodwill - Results and Significant Assumptions Based on the favorable results of the qualitative assessment conducted on October 1, 2013, there was no goodwill impairment charge recorded in 2013. For our North America reporting unit, where the majority of our goodwill is held, our qualitative assessment included a review of the events and factors outlined above. Our last quantitative test was performed in 2011. Significant weight was provided to the following factors, as we determined that these items have the most significant impact on the fair value of this reporting unit. Operating profit margins improved for the second consecutive year to



10.5% in 2013 compared to 8.8% and 4.2% in 2012 and 2011, respectively.

The improvements have been driven by higher net sales, ongoing cost

productivity, the benefit of cost and capacity-reduction initiatives,

as well as our continued ability to deliver innovative and consumer

relevant products to the marketplace. The improvements in operating

margins compared to the prior quantitative assessment performed in 2011

provides significant positive evidence for the qualitative assessment.

We experienced a 175 basis point decrease in the discount rate from our last quantitative assessment performed in 2011, primarily driven by a decline in our company specific risk premium. The decrease in the company specific risk premium is driven largely by the structural improvement in our operating model delivered through successful execution of our cost and capacity reductions and implementation of previously announced cost-based price increases since 2011. The decrease in the discount rate provides significant positive evidence for the qualitative assessment. The implied increases to the fair value of our North America reporting unit noted above are further supported by an increase in our overall market capitalization of approximately $7.7 billion, or 200%, as of October 1, 2013, compared to the prior quantitative assessment in 2011. This increase is largely attributable to the improved operating performance of the North America reporting unit. Intangible Valuations We evaluate certain indefinite-lived intangibles using a qualitative assessment to determine whether it is more likely than not that the fair value of the indefinite lived intangible asset is less than its carrying amount. If we determine that the fair value may be less than its carrying amount, the fair value of the trademark is estimated and compared to its carrying value to determine if an impairment exists. Otherwise, we conclude that no impairment is indicated and we do not perform the quantitative test. When the qualitative assessment is not utilized and a quantitative test is performed, we estimate the fair value of these intangible assets using the relief-from-royalty method, which requires assumptions related to projected revenues from our annual long-range plan; assumed royalty rates that could be payable if we did not own the trademark; and a discount rate based on our weighted average cost of capital. We recognize an impairment loss when the estimated fair value of the indefinite-lived intangible asset is less than its carrying value. Evaluating Trademarks - Results and Significant Assumptions We performed a qualitative assessment for one trademark, with a value of approximately $20 million. Our prior quantitative test performed in 2011 indicated that the fair value for this trademark exceeded its respective carrying value by approximately 400%. Based on the qualitative assessment conducted on October 1, 2013, we concluded that it was more likely than not that the fair value of this trademark was greater than its respective carrying value, therefore no impairment was recorded. 26



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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS - (CONTINUED) We performed a quantitative test for our remaining trademarks. Based on the results of our test as of October 1, 2013, we determined that no impairment existed for our trademarks. In performing the quantitative test, significant assumptions used in our relief from royalty model as of October 1, 2013 included revenue growth rates, assumed royalty rates and the discount rate, which are discussed further below.



Revenue growth rates relate to projected revenues from our annual long

range plan and vary from brand to brand. Adverse changes in the operating

environment for the appliance industry or our inability to grow revenues

at the forecasted rates may result in a future impairment charge. We

performed a sensitivity analysis on our estimated fair value noting that a

10% reduction of forecasted revenues would result in an impairment of

approximately $5 million.

In determining royalty rates for the valuation of our trademarks, we

considered factors that affect the intrinsic royalty rates that would

hypothetically be paid for the use of the trademark. The most significant

factors in determining the intrinsic royalty rates include the overall

role and importance of the trademarks in the particular industry, the

profitability of the products utilizing the trademarks, and the position

of the trademarked products in a given market segment. Based on this

analysis, we determined royalty rates of 2-3% for our value brands, 3.5%

to 4% for our mass market brands and 6% for our super premium brand. We

performed a sensitivity analysis on our estimated fair value noting that a

100 basis point reduction of the royalty rates for each brand would result

in an impairment of approximately $150 million.

In developing discount rates for the valuation of our trademarks, we used

the industry average weighted average cost of capital as the base,

adjusted for the higher relative level of risks associated with doing

business in other countries, as applicable, as well as the higher relative

levels of risks associated with intangible assets. Based on this analysis,

we determined discount rates ranging from 9.0% to 13.0%. We performed a

sensitivity analysis on our estimated fair value noting that an increase

in the discount rates used for the valuation of 100 basis points would result in an impairment of approximately $20 million. Many of the factors used in assessing fair value are outside the control of management and it is reasonably likely that assumptions and estimates can change in future periods. These changes can result in future impairments. For additional information about goodwill and intangible valuations, see Note 2 of the Notes to the Consolidated Financial Statements. ISSUED BUT NOT YET EFFECTIVE ACCOUNTING PRONOUNCEMENTS Issued but not yet effective accounting pronouncements are not expected to have a material effect on our consolidated financial statements. OTHER MATTERS Embraco Antitrust Matters Beginning in February 2009, our compressor business headquartered in Brazil ("Embraco") was notified of investigations of the global compressor industry by government authorities in various jurisdictions. In 2013, Embraco sales represented approximately 8% of our global net sales. Government authorities in Brazil, Europe, the United States, and other jurisdictions have entered into agreements with Embraco and concluded their investigations of the Company. In connection with these agreements, Embraco has acknowledged violations of antitrust law with respect to the sale of compressors at various times from 2004 through 2007 and agreed to pay fines or settlement payments. Since the government investigations commenced in February 2009, Embraco, and other compressor manufacturers, have been named as defendants in related antitrust lawsuits in various jurisdictions seeking damages in connection with the pricing of compressors during certain periods beginning in 1996 or later. We have resolved certain claims and certain claims remain pending. In February 2013, Embraco entered into a settlement agreement with plaintiffs representing a proposed settlement class of U.S. "direct purchasers" of compressors which provides for, among other things, the payment by Embraco of up to $30 million (subject to reduction for opt-outs) in exchange for a release by all settlement class members. The settlement agreement, which was preliminarily approved by the court on January 9, 2014 and remains subject to final court approval, does not cover any claims by direct purchasers which opt out of the proposed settlement class or claims by "indirect purchaser" plaintiffs. Other lawsuits are also pending and additional lawsuits may be filed by purported purchasers of compressors or other plaintiffs. 27



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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS - (CONTINUED) In connection with the defense and resolution of the Embraco antitrust matters, we have incurred cumulative charges of approximately $409 million since 2009, including fines, defense costs and other expenses. These charges have been recorded within interest and sundry income (expense). At December 31, 2013, $117 million remains accrued, with installment payments of $46 million, plus interest, remaining to be made to government authorities at various times through 2015. We continue to defend these actions and take other steps to minimize our potential exposure. The final outcome and impact of these matters, and any related claims and investigations that may be brought in the future are subject to many variables, and cannot be predicted. We establish accruals only for those matters where we determine that a loss is probable and the amount of loss can be reasonably estimated. While it is currently not possible to reasonably estimate the aggregate amount of costs which we may incur in connection with these matters, such costs could have a material adverse effect on our financial position, liquidity, or results of operations. Brazilian Collection Dispute We reached an agreement in June 2011 to settle all claims arising from our long-standing dispute in Brazil with Banco Safra S.A. Such settlement was subsequently approved by a Brazilian court in July 2011. Pursuant to the settlement, our subsidiary agreed to pay Banco Safra S.A. 959 million Brazilian reais, in two installments, the first of 469 million reais (equivalent to $301 million) was made in July 2011, and the second of 490 million reais (equivalent to $275 million) was made during January 2012. BEFIEX Credits In previous years, our Brazilian operations earned tax credits under the Brazilian government's export incentive program (BEFIEX). These credits reduced Brazilian federal excise taxes on domestic sales, resulting in an increase in the operations' recorded net sales. We began recognizing BEFIEX credits in accordance with prior favorable court decisions allowing for the credits to be recognized. We were able to recognize approximately $109 million, $37 million and $266 million of export credits in 2013, 2012 and 2011, respectively. We recognize export credits as they are monetized; however, future actions by the Brazilian government could limit our ability to monetize these export credits. In December 2013, the Brazilian government reinstituted the monetary adjustment index applicable to BEFIEX credits that existed prior to July 2009, when the Brazilian government required companies to apply a different monetary adjustment index to BEFIEX credits. It is unknown whether Brazilian courts will require that use of the reinstituted index be given retroactive effect for the July 2009 to December 2013 period, the effect of which would be to increase the amount of BEFIEX credits we would be entitled to recognize. Our Brazilian operations have received governmental assessments related to claims for income and social contribution taxes associated with BEFIEX credits monetized from 2000 through 2002 and 2007 through 2011. We do not believe BEFIEX export credits are subject to income or social contribution taxes. We are disputing these tax matters in various courts and intend to vigorously defend our positions. We have not provided for income or social contribution taxes on these export credits, and based on the opinions of tax and legal advisors, we have not accrued any amount related to these assessments as of December 31, 2013. The total amount of outstanding tax assessments received for income and social contribution taxes relating to the BEFIEX credits, including interest and penalties, is approximately 1.2 billion Brazilian reais (equivalent to $530 million) as of December 31, 2013. Litigation is inherently unpredictable and the conclusion of these matters may take many years to ultimately resolve, during which time the amounts related to these assessments will continue to be increased by monetary adjustments at the Selic rate, which is the benchmark rate set by the Brazilian Central Bank. Accordingly, it is possible that an unfavorable outcome in these proceedings could have a material adverse effect on our financial position, liquidity, or results of operations in any particular reporting period. Brazil Tax Matters Relying on existing Brazilian legal precedent, in 2003 and 2004, we recognized tax credits in an aggregate amount of $26 million, adjusted for currency, on the purchase of raw materials used in production ("IPI tax credits"). The Brazilian tax authority subsequently challenged the recording of IPI tax credits. No credits have been recognized since 2004. In 2009, we entered into a Brazilian government program which provided extended payment terms and reduced penalties and interest to encourage tax payers to resolve this and certain other disputed tax credit amounts. As permitted by the program, we elected to settle certain debts through the use of other existing tax credits and recorded charges of approximately $34 million in 2009 associated with these matters. In July 2012, the Brazilian revenue authority notified us that a portion of our proposed settlement was rejected and we received tax assessments of 197 million Brazilian reais (equivalent to $84 million as of December 31, 2013), reflecting the original assessment, plus interest and penalties. We are disputing these assessments and we intend to vigorously defend our position. Based on the opinion of our tax and legal advisors, we have not recorded an additional reserve related to these matters. 28



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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS - (CONTINUED) In 2001, Brazil adopted a law making the profits of controlled foreign corporations of Brazilian entities subject to income and social contribution tax regardless of whether the profits were repatriated ("CFC Tax"). Our Brazilian subsidiary, along with other corporations, challenged tax assessments on foreign profits on constitutionality and other grounds. In April 2013, the Brazilian Supreme Court ruled in our case, finding that the law is constitutional, but remanding the case to a lower court for consideration of other arguments raised in our appeal, including the existence of tax treaties with jurisdictions in which controlled foreign corporations are domiciled. As of December 31, 2013, our potential exposure for income and social contribution taxes relating to profits of controlled foreign corporations, including interest and penalties and net of expected foreign tax credits, is approximately 108 million reais (equivalent to $46 million). We believe these assessments are without merit and we intend to continue to vigorously dispute them. Based on the opinion of our tax and legal advisors, we have not accrued any amount related to these assessments as of December 31, 2013. In December 2013, we entered into a Brazilian government program to settle long standing disputes. Participation in the program removed uncertainty related to 16 assessments that were previously under dispute and significantly reduces potential penalties and interest associated with these matters. Our participation will result in payments, including principal and discounted interest and penalties, of 123 million reais (equivalent to $53 million as of December 31, 2013), with $2 million paid in 2013 and the remainder in 30 monthly installments, increased by monetary adjustments at the Selic rate. During the fourth quarter 2013, we recognized pre-tax charges of $11 million in cost of products sold and $17 million in interest and sundry income (expense) related to this program. In addition to the IPI tax credit and CFC Tax matters noted above, we are currently disputing other assessments issued by the Brazilian tax authorities related to non-income and income tax matters, including BEFIEX credits, which are at various stages of review in numerous administrative and judicial proceedings. In accordance with our accounting policies, we routinely assess these matters and, when necessary, record our best estimate of a loss. We believe these tax assessments are without merit and are vigorously defending our positions, however, each of these matters may take several years to resolve and the outcome of litigation is inherently unpredictable. For additional information regarding BEFIEX credits, see Note 11 of the Consolidated Financial Statements. Other Litigation We are currently defending against numerous lawsuits pending in federal and state courts in the United States relating to certain of our front load washing machines. Some of these lawsuits have been certified for treatment as class actions. The complaints in these lawsuits generally allege violations of state consumer fraud acts, unjust enrichment, and breach of warranty. The complaints generally seek unspecified compensatory, consequential and punitive damages. We believe these suits are without merit and are vigorously defending them. Given the preliminary stage of these proceedings, the Company cannot reasonably estimate a possible range of loss, if any, at this time. The resolution of one or more of these matters could have a material adverse effect on our Consolidated Financial Statements. In addition, we are currently defending a number of other lawsuits in federal and state courts in the United States related to the manufacturing and sale of our products which include class action allegations. These lawsuits allege claims which include breach of contract, breach of warranty, product defect, fraud, violation of federal and state consumer protection acts and negligence. We do not have insurance coverage for class action lawsuits. We are also involved in various other legal actions arising in the normal course of business, for which insurance coverage may or may not be available depending on the nature of the action. We dispute the merits of these suits and actions, and intend to vigorously defend them. Management believes, based upon its current knowledge, after taking into consideration legal counsel's evaluation of such suits and actions, and after taking into account current litigation accruals, that the outcome of these matters currently pending against Whirlpool should not have a material adverse effect, if any, on our Consolidated Financial Statements. Antidumping Actions In January 2014, the U.S. Court of International Trade ("CIT") ruled on our appeal from a 2012 determination by the U.S. International Trade Commission ("ITC") that dumped and subsidized bottom-mount refrigerators imported from South Korea into the United States did not cause material injury to domestic producers. The CIT found errors in the ITC's decision and remanded the case for reconsideration. Following the CIT ruling, we decided to no longer pursue appeals related to the bottom mount refrigerator action. In January 2014, the CIT granted our request to dismiss the appeal and, consequently, we expect the other pending appeals concerning the bottom-mount refrigerator case to be dismissed. In December 2011, we filed petitions requesting that the Department of Commerce ("DOC") and the ITC initiate antidumping and countervailing duty investigations against large residential washers from South Korea, and an antidumping investigation against the same products from Mexico. In December 2012, the DOC issued final determinations that several Korean and Mexican 29



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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS - (CONTINUED) producers had engaged in dumping and that certain Korean producers received countervailable government subsidies. In January 2013, the ITC unanimously determined that dumped and subsidized imports caused material injury to domestic producers. In February 2013, the DOC issued final orders requiring certain South Korean and Mexican producers to pay cash deposits on imports of large residential washers into the United States. Various appeals challenging all or part of the DOC and ITC final determinations have been filed. These appeals may take several years to resolve. During the pendency of these appeals, the DOC orders remain in effect and the DOC will continue to conduct administrative reviews to determine the amount of dumping and countervailing duties to be paid by these importers. The amounts owed will depend on the extent to which foreign producers price these products below fair value and receive subsidies on these products during the periods under review. Conflict Minerals In August 2012, the SEC issued final rules requiring disclosure of the use of conflict minerals (tantalum, tin, tungsten and gold) originating in the Democratic Republic of Congo and adjoining countries. We are currently analyzing whether conflict minerals are necessary to the functionality or production of our products and if so, the most efficient and effective means of complying with the due diligence and reporting requirements of the rules. The first disclosure reporting period is for the 2013 calendar year, with a final report to be filed no later than May 31, 2014. FORWARD-LOOKING STATEMENTS The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements made by us or on our behalf. Certain statements contained in this annual report, including those within the forward-looking perspective section within this Management's Discussion and Analysis, and other written and oral statements made from time to time by us or on our behalf do not relate strictly to historical or current facts and may contain forward-looking statements that reflect our current views with respect to future events and financial performance. As such, they are considered "forward-looking statements" which provide current expectations or forecasts of future events. Such statements can be identified by the use of terminology such as "may," "could," "will," "should," "possible," "plan," "predict," "forecast," "potential," "anticipate," "estimate," "expect," "project," "intend," "believe," "may impact," "on track," and similar words or expressions. Our forward-looking statements generally relate to our growth strategies, financial results, product development, and sales efforts. These forward-looking statements should be considered with the understanding that such statements involve a variety of risks and uncertainties, known and unknown, and may be affected by inaccurate assumptions. Consequently, no forward-looking statement can be guaranteed and actual results may vary materially. This document contains forward-looking statements about Whirlpool Corporation and its consolidated subsidiaries ("Whirlpool") that speak only as of this date. Whirlpool disclaims any obligation to update these statements. Forward-looking statements in this document may include, but are not limited to, statements regarding expected earnings per share, cash flow, productivity and material and oil-related prices. Many risks, contingencies and uncertainties could cause actual results to differ materially from Whirlpool's forward-looking statements. Among these factors are: (1) intense competition in the home appliance industry reflecting the impact of both new and established global competitors, including Asian and European manufacturers; (2) Whirlpool's ability to continue its relationship with significant trade customers and the ability of these trade customers to maintain or increase market share; (3) acquisition and investment-related risk; (4) changes in economic conditions which affect demand for our products, including the strength of the building industry and the level of interest rates; (5) product liability and product recall costs; (6) inventory and other asset risk; (7) risks related to our international operations, including changes in foreign regulations, regulatory compliance and disruptions arising from natural disasters or terrorist attacks; (8) the uncertain global economy; (9) the ability of Whirlpool to achieve its business plans, productivity improvements, cost control, price increases, leveraging of its global operating platform, and acceleration of the rate of innovation; (10) Whirlpool's ability to maintain its reputation and brand image; (11) fluctuations in the cost of key materials (including steel, plastic, resins, copper and aluminum) and components and the ability of Whirlpool to offset cost increases; (12) litigation, tax, and legal compliance risk and costs, especially costs which may be materially different from the amount we expect to incur or have accrued for; (13) the effects and costs of governmental investigations or related actions by third parties; (14) Whirlpool's ability to obtain and protect intellectual property rights; (15) the ability of suppliers of critical parts, components and manufacturing equipment to deliver sufficient quantities to Whirlpool in a timely and cost-effective manner; (16) health care cost trends, regulatory changes and variations between results and estimates that could increase future funding obligations for pension and postretirement benefit plans; (17) information technology system failures and data security breaches; (18) the impact of labor relations; (19) our ability to attract, develop and retain executives and other qualified employees; (20) changes in the legal and regulatory environment including environmental and health and safety regulations; and (21) the ability of Whirlpool to manage foreign currency fluctuations. 30



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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS - (CONTINUED) We undertake no obligation to update any forward-looking statement, and investors are advised to review disclosures in our filings with the SEC. It is not possible to foresee or identify all factors that could cause actual results to differ from expected or historic results. Therefore, investors should not consider the foregoing factors to be an exhaustive statement of all risks, uncertainties, or factors that could potentially cause actual results to differ from forward-looking statements. Additional information concerning these and other factors can be found in "Risk Factors" in Item 1A of this report.


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