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1. What are the incremental FCF for Project Atlantic that is being proposed by Whirlpool for years 1999-2007? 2. What is the NPV of Project

1. What are the incremental FCF for Project Atlantic" that is being proposed by Whirlpool for years 1999-2007? 2. What is the NPV of Project Atlantic without the terminal value? 3. What is the NPV of Project Atlantic with the terminal value? 4. According to your analysis should Whirlpool undertake Project Atlantic? What if it does not get the terminal value?

Exhibit 2B Wave Implementation Schedule
West South Central North
Start Date: MAY 1999 MAY 2000 MAR 2001 JAN 2002
End Date: APR 2000 FEB 2001 DEC 2001

AUG 2002
Exhibit 3 1997 Data for Whirlpool Europe
Wave DSI Product Availability Units Sold Revenue (000s US$) Margin (000s US$)
West 45 73.5% 2,271,139 477,784 58,859
South 51 83.1% 1,415,949 283,549 46,241
Central 67 76.8% 977,665 185,625 43,678
North 55 83.2% 1,443,156 280,901 29,818
Exhibit 4 Improvements in DSI and Availability by Year and Wave
Improvements by Year by Wave
Wave 2000 2001 2002 2003 2004 2005
West 25% 40% 35%
South 35% 40% 25%
Central 40% 40% 20%
North 40% 40% 20%
Exhibit 5 Margin Improvements by Year by Wave
Cumulative Margin Improvements by Year by Wave
Wave 2000 2001 2002 2003 2004 2005
West 0.06% 0.25% 0.25% 0.25% 0.25% 0.25%
South 0.10% 0.25% 0.25% 0.25% 0.25%
Central 0.13% 0.25% 0.25% 0.25%
North 0.13% 0.25%

0.25%
Exhibit 6 Forecasted Other Expense Savings by Year (000s US$)
2000 2001 2002 2003 2004 2005 2006 2007
Order Desk Headcount 0 190 411 442 474 506 537 569
Finance Headcount 81 135 216 324 405 405 405 405
Warehouse Space 18 72 155 230 274 288 288 288
Bad Debt Expense 102 512 922 1,024 1,024 1,024 1,024 1,024
Information Systems 420 840 840 1,280 1,280 1,280 1,280 1,280
621 1,749 2,544 3,300 3,457 3,503 3,534 3,566

West

1 2 3 4 5 6
2000 2001 2002 2003 2004 2005
EX 3 West 2,271 2,271 2,271 2,271 2,271 2,271
EX 3 477,784 477,784 477,784 477,784 477,784 477,784
Revenue - margin 418,925 418,925 418,925 418,925 418,925 418,925
EX 3 58,859 58,859 58,859 58,859 58,859 58,859
Revenue/units 210.37 210.37 210.37 210.37 210.37 210.37
Cogs/units 184.5 184 184 184 184 184
Margin/units 26 26 26 26 26 26
Margin/revenue 12.3% 12.3% 12.3% 12.3% 12.3% 12.3%
EX 3 45 45 45 45 45 45
COGS*(DSI/365) 51648 51648 51648 51648 51648 51648

South

time line 1 2 3 4 5 6
West division
Forecast without ERP 2000 2001 2002 2003 2004 2005
Units EX 3 South 1,416 1,416 1,416 1,416 1,416 1,416
Revenue EX 3 283,549 283,549 283,549 283,549 283,549 283,549
COGS Revenue - margin 237,308 237,308 237,308 237,308 237,308 237,308
Margin EX 3 46,241 46,241 46,241 46,241 46,241 46,241
Price per unit Revenue/units 200.25 200.25 200.25 200.25 200.25 200.25
COGS per unit Cogs/units 167.6 168 168 168 168 168
Margin per unit Margin/units 33 33 33 33 33 33
Percentage margin Margin/revenue 16.3% 16.3% 16.3% 16.3% 16.3% 16.3%
DSI EX 3 51 51 51 51 51 51
Inventory COGS*(DSI/365) 33158 33158 33158 33158 33158 33158
Additional units from ERP
Pre-ERP availability EX 3 83.1% 83.1% 83.1% 83.1% 83.1% 83.1%
Target availability 92% 92% 92% 92% 92% 92% 92%
Increase in availability Target/Pre -1 11% 11% 11% 11% 11% 11%
Percentage of improvement EX 4 0% 35% 40% 25% 0% 0%
Percent of improvement in new sales We only sale 25% of the improvement 25% 25% 25% 25% 25% 25% 25%
New units in year 0.0 13.3 15.2 9.5 0.0 0.0
New units 0.0 13.3 28.4 37.9 37.9 37.9
Calculation of inventory savings
Target DSI reduction 12 12 12 12 12 12 12
Percentage improvement EX 4 0% 35% 40% 25% 0% 0%
DSI reduction in year 0 4.2 4.8 3 0 0
DSI reduction 0 4.2 9 12 12 12
Forecast with ERP 2000 2001 2002 2003 2004 2005
Units 1,416 1,429 1,444 1,454 1,454 1,454
Additional margin EX 5 0.00% 0.10% 0.25% 0.25% 0.25% 0.25%
New margin 16.3% 16.4% 16.6% 16.6% 16.6% 16.6%
New price per unit COGS per unit /(1-new margin) 200.25 200.49 200.85 200.85 200.85 200.85
Revenue Units*price 283,549 286,549 290,110 292,013 292,013 292,013
COGS Units*COGS per unit above 237,308 239,532 242,073 243,662 243,662 243,662
Margin Revenue - COGS 46,241 47,017 48,036 48,351 48,351 48,351
DSI 51 47 42 39 39 39
Inventory COGS*(DSI/365) 33158.10 30712.58 27855.03 26035.11 26035.11 26035.11

Central

time line 1 2 3 4 5 6
West division
Forecast without ERP 2000 2001 2002 2003 2004 2005
Units EX 3 Central 978 978 978 978 978 978
Revenue EX 3 185,625 185,625 185,625 185,625 185,625 185,625
COGS Revenue - margin 141,947 141,947 141,947 141,947 141,947 141,947
Margin EX 3 43,678 43,678 43,678 43,678 43,678 43,678
Price per unit Revenue/units 189.87 189.87 189.87 189.87 189.87 189.87
COGS per unit Cogs/units 145.2 145 145 145 145 145
Margin per unit Margin/units 45 45 45 45 45 45
Percentage margin Margin/revenue 23.5% 23.5% 23.5% 23.5% 23.5% 23.5%
DSI EX 3 67 67 67 67 67 67
Inventory COGS*(DSI/365) 26056 26056 26056 26056 26056 26056
Additional units from ERP
Pre-ERP availability EX 3 76.8% 76.8% 76.8% 76.8% 76.8% 76.8%
Target availability 92% 92% 92% 92% 92% 92% 92%
Increase in availability Target/Pre -1 20% 20% 20% 20% 20% 20%
Percentage of improvement EX 4 0% 0% 40% 40% 20% 0%
Percent of improvement in new sales We only sale 25% of the improvement 25% 25% 25% 25% 25% 25% 25%
New units in year 0.0 0.0 19.3 19.3 9.7 0.0
New units 0.0 0.0 19.3 38.7 48.4 48.4
Calculation of inventory savings
Target DSI reduction 12 12 12 12 12 12 12
Percentage improvement EX 4 0% 0% 40% 40% 20% 0%
DSI reduction in year 0 0 4.8 4.8 2.4 0
DSI reduction 0 0 4.8 9.6 12 12
Forecast with ERP 2000 2001 2002 2003 2004 2005
Units 978 978 997 1,016 1,026 1,026
Additional margin EX 5 0.00% 0.00% 0.13% 0.25% 0.25% 0.25%
New margin 23.5% 23.5% 23.7% 23.8% 23.8% 23.8%
New price per unit COGS per unit /(1-new margin) 189.87 189.87 190.19 190.49 190.49 190.49
Revenue Units*price 185,625 185,625 189,621 193,606 195,449 195,449
COGS Units*COGS per unit above 141,947 141,947 144,756 147,566 148,970 148,970
Margin Revenue - COGS 43,678 43,678 44,865 46,040 46,478 46,478
DSI 67 67 62 57 55 55
Inventory COGS*(DSI/365) 26056.02 26056.02 24668.07 23206.23 22447.60 22447.60

North

time line 1 2 3 4 5 6
West division
Forecast without ERP 2000 2001 2002 2003 2004 2005
Units EX 3 North 1,443 1,443 1,443 1,443 1,443 1,443
Revenue EX 3 280,901 280,901 280,901 280,901 280,901 280,901
COGS Revenue - margin 251,083 251,083 251,083 251,083 251,083 251,083
Margin EX 3 29,818 29,818 29,818 29,818 29,818 29,818
Price per unit Revenue/units 194.64 194.64 194.64 194.64 194.64 194.64
COGS per unit Cogs/units 174.0 174 174 174 174 174
Margin per unit Margin/units 21 21 21 21 21 21
Percentage margin Margin/revenue 10.6% 10.6% 10.6% 10.6% 10.6% 10.6%
DSI EX 3 55 55 55 55 55 55
Inventory COGS*(DSI/365) 37834 37834 37834 37834 37834 37834
Additional units from ERP
Pre-ERP availability EX 3 83.2% 83.2% 83.2% 83.2% 83.2% 83.2%
Target availability 92% 92% 92% 92% 92% 92% 92%
Increase in availability Target/Pre -1 11% 11% 11% 11% 11% 11%
Percentage of improvement EX 4 0% 0% 0% 40% 40% 20%
Percent of improvement in new sales We only sale 25% of the improvement 25% 25% 25% 25% 25% 25% 25%
New units in year 0.0 0.0 0.0 15.3 15.3 7.6
New units 0.0 0.0 0.0 15.3 30.5 38.2
Calculation of inventory savings
Target DSI reduction 12 12 12 12 12 12 12
Percentage improvement EX 4 0% 0% 0% 40% 40% 20%
DSI reduction in year 0 0 0 4.8 4.8 2.4
DSI reduction 0 0 0 4.8 9.6 12
Forecast with ERP 2000 2001 2002 2003 2004 2005
Units 1,443 1,443 1,443 1,458 1,474 1,481
Additional margin EX 5 0.00% 0.00% 0.00% 0.13% 0.25% 0.25%
New margin 10.6% 10.6% 10.6% 10.7% 10.9% 10.9%
New price per unit COGS per unit /(1-new margin) 194.64 194.64 194.64 194.93 195.19 195.19
Revenue Units*price 280,901 280,901 280,901 284,286 287,648 289,137
COGS Units*COGS per unit above 251,083 251,083 251,083 253,739 256,394 257,722
Margin Revenue - COGS 29,818 29,818 29,818 30,547 31,253 31,415
DSI 55 55 55 50 45 43
Inventory COGS*(DSI/365) 37834.42 37834.42 37834.42 34897.76 31891.25 30361.80

Incremental Revenue

time line 1 2 3 4 5 6
All Combined
Forecast without ERP 2000 2001 2002 2003 2004 2005
Units 6,108 6,108 6,108 6,108 6,108 6,108
Revenue 1,227,859 1,227,859 1,227,859 1,227,859 1,227,859 1,227,859
COGS 1,049,263 1,049,263 1,049,263 1,049,263 1,049,263 1,049,263
Margin 178,596 178,596 178,596 178,596 178,596 178,596
Inventory 148,697 148,697 148,697 148,697 148,697 148,697
Forecast with ERP 2000 2001 2002 2003 2004 2005
Units 6,144 6,214 6,299 6,343 6,368 6,375
Revenue 1,235,707 1,251,823 1,269,933 1,279,205 1,284,410 1,285,900
COGS 1,055,853 1,068,621 1,083,199 1,090,252 1,094,313 1,095,640
Margin 179,854 183,201 186,734 188,953 190,098 190,260
Inventory 146,012 139,045 130,616 124,398 120,633 119,103
Incremental 2000 2001 2002 2003 2004 2005
Units 36 106 191 235 260 267
Revenue 7,848 23,964 42,074 51,346 56,551 58,041
COGS 6,590 19,358 33,936 40,989 45,050 46,377
Margin 1,258 4,605 8,138 10,357 11,502 11,664
Inventory -2,685 -9,652 -18,081 -24,299 -28,064 -29,594
Investment in inventory -2,685 -6,967 -8,429 -6,218 -3,765 -1,529

CAPEX

1999 2000 2001 2002 2003 2004 2005 2006 2007
Capital equipment 4300 8600 6900 4100
Software licenses 600 300
Capital expenditures 4900 8900 6900 4100
Depreciation
1999 assets S\L 5 years 980 980 980 980 980
2000 assets S\L 5 years 1780 1780 1780 1780 1780
2001 assets S\L 5 years 1380 1380 1380 1380 1380
2002 assets S\L 5 years 820 820 820 820 820
Incremental Depreciation 980 2760 4140 4960 4960 3980 2200 820

Operating Expense

rate
1999 2000 2001 2002 2003 2004 2005 2006 2007
Employees 50 50 50 50
Employees salary 45 2250 2250 2250 2250
Consultants 19 9 7 4
Consultants salary (annual) 184.8 3511.2 1663.2 1293.6 739.2
Task force 300 600 600 600 300
On going operational 600 1200 1800 2400 3000 3000 3000 3000 3000
License maintenance 100 200 300 400 400 400 400 400
Implementation Costs 6361.2 5513.2 6143.6 6289.2 4000 3700 3400 3400 3400
Other expense savings EX 6 621 1749 2544 3300 3457 3503 3534 3566
Incremental Operating Expenses 6361.2 4892.2 4394.6 3745.2 700 243 -103 -134 -166

DCF

0 1 2 3 4 5 6 7 8
Year 1999 2000 2001 2002 2003 2004 2005 2006 2007
Revenue 0 0 <-don't change this stuff
COGS 0 0
Operating Expense
Depreciation
EBIT
Taxes 40%
EBITAT
Cash flow adjustments
+ depreciation
- CAPX
- working capital investment
Cash Flow
Discount Factor 9%
Discounted cash flow
Terminal value 3% 0
Sum of discounted cash flow 0
PV(Terminal value) 0
NPV 0

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