CHICAGO, May 2 /PRNewswire/ -- Duff & Phelps Credit Rating Co. (DCR) has
reaffirmed the 'A-' (Single-A-Minus) senior debt rating of Whirlpool
Corporation. The company's commercial paper is rated 'D-1-' (D-One-Minus).
The Rating Outlook is Stable.
Earnings and cash flow trends for Whirlpool are positive, with the company
benefiting from sustained strength in the North American appliance business,
continued improvements in the company's European operations, and the
elimination of losses from the restructured Asian operations. South American
operations, which were significantly affected by the devaluation of the
Brazilian real in the first quarter of 1999, are also recovering. The company
has further benefited from a major restructuring of worldwide operations
initiated at the end of 1997, which has reduced its operating cost structure.
The restructuring program included reductions in worldwide headcount of 7,900,
which were effectively completed in 1999. Quantitative credit measures have
also improved, reflecting stronger earnings and lower average debt levels.
A continued expansion of margins from present record levels is expected to
be driven externally by worldwide volume growth and internally by productivity
programs, global platform standardization, and global procurement and product
development. The company is at the front end of a major new product cycle in
both developed and emerging markets, characterized by significant new design
features, higher technology content, and a broadened product line.
Reflecting the favorable earnings and cash flow trends for the company,
quantitative credit measures are expected to remain consistent with current
ratings, despite moderate increases in debt to support an expanded share
repurchase program and to complete the acquisition of the publicly held
minority interests in the Brazilian subsidiaries. The company announced a new
$750 million share repurchase authorization in February 2000, which extended
the existing $250 million repurchase authorization. Share repurchases under
the new authorization, along with $83 million remaining from the previous
$250 million authorization, are expected to be completed over the next 18
months. Funds for the expanded share repurchases are expected to be provided
by free cash flow and by moderate increases in debt levels over the duration
of the program. In February, the company completed a public tender for
$283 million to increase its aggregate equity interests in its Brazilian
subsidiaries from 55 percent to 87 percent. No additional acquisitions are
anticipated.
SOURCE Duff & Phelps Credit Rating Co.
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Related links:
http://www.dcrco.com
CONTACT:
Albert E. Turner, CFA of DCR, 312-368-3208,
turner@dcrco.com
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