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NEW YORK--([ BUSINESS WIRE ])--Fitch Ratings has affirmed Whirlpool Corporation's (NYSE: WHR) ratings, including the company's Issuer Default Rating (IDR) at 'BBB'. A full list of ratings follows at the end of this press release. The Rating Outlook is Stable.

WHR's ratings and Outlook reflect its position as the world's largest appliance manufacturer, with leading market positions in many regions. WHR's global operating platform, increased manufacturing efficiency and innovation capabilities have enabled it to improve its cost structure, compete more effectively around the world, and adjust to escalating material costs. Risks include intense global competition, volatility of raw material costs, sensitivity to business cycles, and ongoing regulatory and legal issues.

WHR's key credit metrics remain appropriate for the rating category. The company's leverage as measured by debt to EBITDA stood at 1.7x during the latest 12-month (LTM) period ending March 31, 2012, flat from year-end 2011 levels and up slightly from the 1.5x level reported at year-end 2010. Interest coverage was 7.0x during the LTM period ending March 31, 2012 compared with 7.0x for fiscal year 2011 and 7.3x for fiscal year 2010. Fitch expects these credit metrics to remain relatively stable during fiscal 2012.

Whirlpool's operating margins have been negatively affected by higher raw material costs, particularly for steel, plastic resins and base metals. Management estimates raw material costs will rise $300 million - $350 million in 2012. Nevertheless, the company reported improved margins during the first quarter of 2012 as cost-based price increases announced last year, as well as the benefits of business rationalization initiatives implemented in recent years more than offset the inflation in raw material costs. Fitch expects operating margins will improve slightly in 2012 compared to 2011 as higher prices and productivity improvements will continue to offset the inflation in raw material costs this year.

The near-term operating outlook for global appliance demand remains relatively stable despite continuing challenges in Europe, lingering difficulties in the U.S. housing market, and higher material and energy costs. In the U.S., Fitch expects appliance demand will increase slightly compared with last year's levels. Fitch currently projects U.S. housing starts will increase 11.2%, while new home sales will improve approximately 8% and existing home sales will grow 4% during the year. Home improvement spending in the U.S. is projected to advance 4.5% in 2012. Internationally, appliance shipments in Latin America and Asia are expected to show some improvement while demand in Europe will likely decline.

WHR has solid liquidity with cash of $583 million as of March 31, 2012, and no borrowings under its $1.725 billion revolving credit facility maturing in June 2016. Subsequent to the end of the first quarter, the company repaid $350 million of senior notes that matured on May 1, 2012 and issued $300 million of 4.7% senior notes due 2022. The company also has significant debt maturing over the next four years, with roughly $1.3 billion coming due between 2013 and 2015. While WHR has sufficient cash and revolver availability to repay debt coming due in the next few years, Fitch expects the company will again access the debt markets to refinance some of these upcoming debt maturities.

Fitch expects management will remain disciplined in prioritizing the uses of its cash and cash flow. Funding the business as well as pension contributions will be the primary uses of cash flow. Cash and cash flow will also be deployed to maintain dividends, fund remaining legacy legal liabilities and for debt reduction. Fitch does not expect Whirlpool to undertake meaningful share repurchases in the short term. The company has $350 million remaining under its current share repurchase authorization.

Fitch anticipates the company will be free cash flow (FCF) negative (cash flow from operations less capital expenditures and dividends) again during 2012, although at a slightly lower amount compared to the $226 million negative FCF realized during 2011. The negative FCF forecasted for 2012 is due primarily to the $275 million final installment to settle a Brazilian collection dispute, pension contributions of up to $250 million, $110 million for antitrust settlements and roughly $280 million of cash for restructuring initiatives.

The company has ongoing regulatory issues that could negatively affect the company's financial profile. In particular, there are antitrust investigations relating to WHR's compressor business. Government authorities in Brazil, Europe and the United States and other jurisdictions have entered into agreements with the company and concluded their investigations. In connection with these agreements, the company has incurred roughly $323 million of charges, of which $195 million remain accrued. The company has $171 million of installment payments (plus interest) remaining to be made to government authorities at various times through 2015. The company is also continuing to work toward a resolution of ongoing government investigations in other jurisdictions. Management indicated that it cannot reasonably estimate the amount it may incur and has not accrued charges relating to these ongoing investigations.

Fitch has affirmed the following ratings:

Whirlpool Corporation

--Long-Term IDR at 'BBB';

--Short-Term IDR at 'F2';

--Commercial paper at 'F2';

--Senior unsecured notes at 'BBB';

--Bank revolving credit facility at 'BBB' (Whirlpool Corp., Whirlpool Europe B.V., Whirlpool Finance B.V. and Whirlpool Canada Holding Company as borrowers).

Maytag Corporation

--Long-Term IDR at 'BBB';

--Senior unsecured notes at 'BBB'.

Whirlpool Finance B.V.

--Short-Term IDR at 'F2';

--Commercial paper (CP) at 'F2'.

Additional information is available at '[ www.fitchratings.com ]'. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.

Applicable Criteria and Related Research:

--'Corporate Rating Methodology' (Aug. 12, 2011);

--'Short-Term Rating Criteria for Non-Financial Corporates' (Jan. 18, 2012);

--'Liquidity Considerations for Corporate Issuers' (June 12, 2007.

Applicable Criteria and Related Research:

Liquidity Considerations for Corporate Issuers

[ http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=328666 ]

Short-Term Rating Criteria for Non-Financial Corporates

[ http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=663651 ]

Corporate Rating Methodology

[ http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=647229 ]

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