CoverWhirlpoolFinance 200, Asst Prof Matt WigerAs of: 04/30/14

Cell Color KeyNoted Discrepancy or Problem AreaMissing InputBlue font used for all direct inputsKey AssumptionsDiscount rate 9%Tax rate 40%Others as specified in case1997 sales as base year with no growth anticipated until ERP implementedPrice per unit holds at 1997 levelAssumes all according to plan with no cost overrunsShortcomingsThis sheet does not include changes in working capital -- inventory levels --- due to ERP

Consolidated Stmts & DCFWHIREPOOL-Projected Data Income Statement /AUAF by Rahmati ID13596

Whirepool Income Statement Projected As per Class Data1,9992,0002,0012,0022,0032,0042,0052,0062,007Total Revenue1,227,8591,233,383,0001,244,532,0001,257,865,0001,264,805,0001,268,753,0001,270,011,0001,270,011,0001,270,011,000Cost of Good Sold$1,049,263$1,053,602$1,065,682$1,086,409$1,110,198$1,134,232$1,156,230$1,178,228$1,200,226Gross Margin2,277,1221,232,329,3981,243,466,3181,256,778,5911,263,694,8021,267,618,7681,268,854,7701,268,832,7721,268,810,774ExpensesOperating Cost(56,112,000)(55,132,000)(61,436,000)(55,392,000)(4,000,000)(3,700,000)(3,400,000)(3,400,000)(3,400,000)Depreciation$0($980,000)($2,760,000)($4,140,000)($4,960,000)($4,960,000)($3,980,000)($2,200,000)($820,000)Total Expenses(56,112,000)(56,112,000)(64,196,000)(59,532,000)(8,960,000)(8,660,000)(7,380,000)(5,600,000)(4,220,000)EBIT(53,834,878)1,176,217,3981,179,270,3181,197,246,5911,254,734,8021,258,958,7681,261,474,7701,263,232,7721,264,590,774Income Tax0.0(470,486,959)(471,708,127)(478,898,637)(501,893,921)(503,583,507)(504,589,908)(505,293,109)(505,836,310)Net Income($53,834,878)$1,646,704,357$1,650,978,445$1,676,145,228$1,756,628,723$1,762,542,275$1,766,064,678$1,768,525,881$1,770,427,084

Tax rate40.0%40.0%40.0%40.0%40.0%40.0%40.0%40.0%40.0%

Capital Expenditure and Expenses1,9992,0002,0012,0022,0032,0042,0052,0062,007Capital Expenditures4,300,0008,600,0006,900,0004,100,000Software Licenses600,000300,0000.00.0TOTAL CAPEX4,900,0008,900,0006,900,0004,100,000Depreciation on CAPEX 99(860,000)(860,000)(860,000)(860,000)(860,000)0.00.00.0Depreciation on CAPEX 000.0(1,720,000)(1,720,000)(1,720,000)(1,720,000)(1,720,000)0.00.0Depreciation on CAPEX 010.00.0(1,380,000)(1,380,000)(1,380,000)(1,380,000)(1,380,000)0.0Depreciation on CAPEX 020.00.00.0(820,000)(820,000)(820,000)(820,000)(820,000)Depreciation on Software Lic 99(120,000)(120,000)(120,000)(120,000)(120,000)0.00.00.0Depreciation on Software Lic 000.0(60,000)(60,000)(60,000)(60,000)(60,000)0.00.0Depreciation(980,000)(2,760,000)(4,140,000)(4,960,000)(4,960,000)(3,980,000)(2,200,000)(820,000)Book value of PPE12,820,00016,960,00016,920,00011,960,0007,000,0003,020,000820,0000.0

OPERATING COSTSAll Numbers are in Real Figures Number of consultants19974 Cost per consultant184,800184,800184,800184,800Consulting costs3,511,2001,663,2001,293,600739,200 Number of waves ongoing0.671.001.000.67 Additional employees per wave50505050 Cost per employee45,00045,00045,00045,000Employee costs1,500,0002,250,0002,250,0001,500,000 Number of years0.501.001.001.000.50 Annual cost600,000600,000600,000600,000600,000Task Force costs300,000600,000600,000600,000300,000Maintenance expense600,0001,200,0001,800,0002,400,0003,000,0003,000,0003,000,0003,000,0003,000,000License Maintenance expense0.0100,000200,000300,000400,000400,000400,000400,000400,000TOTAL OPERATING COSTS56,112,00055,132,00061,436,00055,392,0004,000,0003,700,0003,400,0003,400,0003,400,000

DSI1,9992,0002,0012,0022,0032,0042,0052,0062,007451,227,8591,233,383,0001,244,532,0001,257,865,0001,264,805,0001,268,753,0001,270,011,0001,270,011,0001,270,011,00051183,338184,162,667185,827,381187,818,199188,854,445189,443,941189,631,779189,631,779189,631,779675555

Free Cash Flow of Whirepool

CASH FLOW STATEMENT1,9992,0002,0012,0022,0032,0042,0052,0062,007EBIAT($53,834,878)$1,176,217,398$1,179,270,318$1,197,246,591$1,254,734,802$1,258,958,768$1,261,474,770$1,263,232,772$1,264,590,774Add: Depreciation$980,000$2,760,000$4,140,000$4,960,000$4,960,000$3,980,000$2,200,000$820,000Less: Changes in Working Capital0.0183,979,3291,664,7141,990,8181,036,247589,496187,8380.00.0Less: Capital Expenditures(4,900,000)(8,900,000)(6,900,000)(4,100,000)0.00.00.00.00.0FREE CASH FLOW(58,734,878)1,352,276,7271,176,795,0321,199,277,4091,260,731,0491,264,508,2641,265,642,6081,265,432,7721,265,410,774

Time period123456789Discount rate9.0%9.0%9.0%9.0%9.0%9.0%9.0%9.0%9.0%PV of FCF(53,885,209)1,138,184,267908,701,683849,598,352819,388,678753,984,962692,349,848635,078,037582,630,273Sum of PVs of FCFs6,326,030,892Net Present Value6,326,030,892

Revenue & Margin BuildRevenue & Margin Assumption (As per Class Work)

Projected Data (Exactly as discussed and done in the Class)1,9992,0002,0012,0022,0032,0042,0052,0062,007

Western DivisionData Starting Product Availability73.5% Ending Product Availability92.0% Total Improvement in Product Availability18.5%% of Total Improvement by Year25.0%40.0%35.0%Projected Improvement4.6%7.4%6.5%Sales Improvement % of Improvement in Availability25.0%25.0%25.0%Projected Sales Improvement1.1562500%1.8500%1.6187500%

Units Sold in 19972,271Revenues in 1997477,784Price per unit210210210210210210210210210210Units Sold2,2712,2972,3402,3782,3782,3782,3782,3782,378Projected Revenues477,784483,308492,250500,218500,218500,218500,218500,218500,218

Base Revenues477,784477,784477,784477,784477,784477,784477,784477,784477,784New Revenues due to ERP5,52414,46622,43422,43422,43422,43422,43422,434

Gross Margin in 199758,859Gross Margin % in 199712.32%Projected cumulative margin improvement annualy0.00%0.06%0.25%0.25%0.25%0.25%0.25%0.25%0.25%Projected gross margin percentage12.32%12.38%12.57%12.57%12.57%12.57%12.57%12.57%12.57%

Margin on new revenues0.06841,8182,8202,8202,8202,8202,8202,820Additional margin on existing revenues0.02871,1941,1941,1941,1941,1941,1941,194Total Increase in margin0.09713,0134,0144,0144,0144,0144,0144,014

Southern Division Starting Product Availability83.1% Ending Product Availability92.0% Total Improvement in Product Availability8.9%% of Total Improvement by Year35.0%40.0%25.0%Projected Improvement3.1%3.6%2.2%Sales Improvement % of Improvement in Availability25.0%25.0%25.0%Projected Sales Improvement0.8%0.9%0.6%

Units Sold in 19971,416Revenues in 1997283,549Price per unit200200200200200200200200200200Units Sold1,4161,4161,4271,4401,4481,4481,4481,4481,448Projected Revenues283,549283,549285,757288,300289,904289,904289,904289,904289,904

Base Revenues283,549283,549283,549283,549283,549283,549283,549283,549283,549New Revenues due to ERP0.02,2084,7516,3556,3556,3556,3556,355

Gross Margin in 199746,241Gross Margin % in 199716.31%Projected cumulative margin improvement by year0.00%0.00%0.10%0.25%0.25%0.25%0.25%0.25%0.25%Projected gross margin percentage16.31%16.31%16.41%16.56%16.56%16.56%16.56%16.56%16.56%

Margin on new revenues0.00.03627871,0521,0521,0521,0521,052Additional margin on existing revenues0.00.0284709709709709709709Total Increase in margin0.00.06461,4961,7611,7611,7611,7611,761

Central Division Starting Product Availability76.8% Ending Product Availability92.0% Total Improvement in Product Availability15.2%% of Total Improvement by Year40.0%40.0%20.0%Projected Improvement6.1%6.1%3.0%Sales Improvement % of Improvement in Availability25.0%25.0%25.0%Projected Sales Improvement1.5%1.5%0.7600%

Units Sold in 1997978Revenues in 1997185,625Price per unit190190190190190190190190190190Units Sold9789789789931,0081,0151,0151,0151,015Projected Revenues185,625185,625185,625188,447191,311192,765192,765192,765192,765

Base Revenues185,625185,625185,625185,625185,625185,625185,625185,625185,625New Revenues due to ERP0.00.02,8225,6867,1407,1407,1407,140

Gross Margin in 199743,678Gross Margin % in 199723.53%Projected cumulative margin improvement by year0.00%0.00%0.00%0.13%0.25%0.25%0.25%0.25%0.25%Projected gross margin percentage23.53%23.53%23.53%23.66%23.78%23.78%23.78%23.78%23.78%

Margin on new revenues0.00.00.06681,3521,6981,6981,6981,698Additional margin on existing revenues0.00.00.0241464464464464464Total Increase in margin0.00.00.09091,8162,1622,1622,1622,162

Northern Division Starting Product Availability83.2% Ending Product Availability92.0% Total Improvement in Product Availability8.8%% of Total Improvement by Year40.0%40.0%20.0%Projected Improvement3.5%3.5%1.8%Sales Improvement % of Improvement in Availability25.0%25.0%25.0%Projected Sales Improvement0.9%0.9%0.4%

Units Sold in 19971,443Revenues in 1997280,901Price per unit195195195195195195195195195195Units Sold1,4431,4431,4431,4431,4561,4691,4751,4751,475Projected Revenues280,901280,901280,901280,901283,373285,867287,124287,124287,124

Base Revenues280,901280,901280,901280,901280,901280,901280,901280,901280,901New Revenues due to ERP0.00.00.02,4724,9666,2236,2236,223

Gross Margin in 199729,818Gross Margin % in 199710.62%Projected cumulative margin improvement by year0.00%0.00%0.00%0.00%0.13%0.25%0.25%0.25%0.25%Projected gross margin percentage10.62%10.62%10.62%10.62%10.75%10.87%10.87%10.87%10.87%

Margin on new revenues0.00.00.00.0266540676676676Additional margin on existing revenues0.00.00.00.0365702702702702Total Increase in margin0.00.00.00.06311,2421,3781,3781,378

Extra Data Total Additional Profit$0$971$3,659$6,419$8,222$9,179$9,316$9,316$9,316

Class Revs WorksheetWhirepool Projected Revenue and Margin by Rahmati ID: 13596

Revenue and Margin Projected (As per Class Data)FY99FY00FY01FY02FY03FY04FY05FY06FY07FY08FY09REVENUES AND MARGINSWestern Division Starting Product Availability73.5% Ending Product Availability92.0% Total Improvement in Product Availability18.5%% of Total Improvement by Year25.0%40.0%35.0%Projected Improvement4.6%7.4%6.5%Sales Improvement % of Improvement in Availability25.0%25.0%25.0%Projected Sales Improvement1.2%1.9%1.6%Units Sold in 19972,271Revenues in 1997477,784Price per unit210210210210210210210210210210210210Units Sold2,2712,2972,3402,3782,3782,3782,3782,3782,3782,3782,378Projected Revenues477,784483,308492,250500,218500,218500,218500,218500,218500,218500,218500,218Base Revenues477,784477,784477,784477,784477,784477,784477,784477,784477,784477,784477,784New Revenues due to ERP5,52414,46622,43422,43422,43422,43422,43422,43422,43422,434Gross Margin in 199758,859Gross Margin % in 199712.32%Projected cumulative margin improvement by year0.00%0.06%0.25%0.25%0.25%0.25%0.25%0.25%0.25%0.25%0.25%Projected gross margin percentage12.32%12.38%12.57%12.57%12.57%12.57%12.57%12.57%12.57%12.57%12.57%Margin on new revenues06841,8182,8202,8202,8202,8202,8202,8202,8202,820Additional margin on existing revenues0.02901,2311,2511,2511,2511,2511,2511,2511,2511,251Total Increase in margin09743,0494,0704,0704,0704,0704,0704,0704,0704,070

Class Expense WorksheetWhirlpool(in thousands of USD)ProjectedFY99FY00FY01FY02FY03FY04FY05FY06FY07FY08FY09

INVESTMENTS / COSTS

Capital Expenditures0000Software Licenses0.00.00.00.0TOTAL CAPEX0000

OPERATING COSTS Number of consultants0000 Cost per consultant0.00.00.00.0Consulting costs0000 Number of waves ongoing0.000.000.000.00 Additional employees per wave0000 Cost per employee0.00.00.00.0Employee costs0000 Number of years0.000.000.000.000.00 Annual cost0.00.00.00.00.0Task Force costs00000Maintenance expense00000000000License Maintenance expense0.00.00.00.00.00.00.00.00.00.00.0TOTAL OPERATING COSTS00000000000