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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



---



FORM 10-Q



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|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------------



For the quarterly period ended October 2, 2004



OR



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | -----------------------------------------------------------------------------------------



For the transition period from  to



Commission file number 1-655



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MAYTAG CORPORATION



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|                       |  |                                              
|---------------------- |  | ---------------------------------------------
|A Delaware Corporation |  | I.R.S. Employer Identification No. 42-0401785



403 West Fourth
Street North, Newton, Iowa 50208



Registrants
telephone number: 641-792-7000



---



Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No ̈



Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2 of the Exchange
Act).    Yes  x    No ̈



The number of shares outstanding of each of the issuers classes of
common stock, as of October 2, 2004:



Common Stock, $1.25 par
value  79,219,846



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##### Table of Contents

MAYTAG CORPORATION

Quarterly Report on Form 10-Q

Quarter Ended October 2, 2004



INDEX



|        |  |                                                                                       |  |   
|------- |  | ------------------------------------------------------------------------------------- |  | --
|PART I  |  | FINANCIAL INFORMATION                                                                 |  |   
|        |  |                                                                                      
|Item 1. |  | Financial Statements                                                                  |  |   
|        |  |                                                                                      
|        |  | Consolidated Statements of Income                                                     |  | 3 
|        |  |                                                                                      
|        |  | Consolidated Balance Sheets                                                           |  | 4 
|        |  |                                                                                      
|        |  | Consolidated Statements of Cash Flows                                                 |  | 6 
|        |  |                                                                                      
|        |  | Notes to Consolidated Financial Statements                                            |  | 7 
|        |  |                                                                                      
|Item 2. |  | Managements Discussion and Analysis of Financial Condition and Results of Operations |  | 16
|        |  |                                                                                      
|Item 3. |  | Quantitative and Qualitative Disclosures about Market Risk                            |  | 25
|        |  |                                                                                      
|Item 4. |  | Controls and Procedures                                                               |  | 25
|        |  |                                                                                      
|PART II |  | OTHER INFORMATION                                                                     |  |   
|        |  |                                                                                      
|Item 6. |  | Exhibits and Reports on Form 8-K                                                      |  | 26
|        |  |                                                                                      
|        |  | Signatures                                                                            |  | 27



2



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##### Table of Contents

|Part I | FINANCIAL INFORMATION
|------ | ---------------------

|Item 1. | Financial Statements
|------- | --------------------



Maytag Corporation

Consolidated Statements of Income



|                                                        |  |                    |           |   |                   |   |           |               |  |   |                  |   |  |   |           |  
|------------------------------------------------------- |  | ------------------ | --------- | - | ----------------- | - | --------- | ------------- |  | - | ---------------- | - |  | - | --------- | -
|                                                        |  | Three Months Ended |           |   | Nine Months Ended |  
|In thousands, except per share data                     |  | October 22004      |           |   | September 272003  |   |           | October 22004 |  |   | September 272003 |  
|Net sales                                               |  | $                  | 1,186,018 |   |                   | $ | 1,221,267 |               |  | $ | 3,557,190        |   |  | $ | 3,520,166 |  
|Cost of sales                                           |  |                    | 1,028,130 |   |                   |   | 1,000,269 |               |  |   | 3,039,678        |   |  |   | 2,885,035 |  
|                                                        |  |                    |           |   |                   |   |           |               |  |   |                  |   |  |   |           |  
|Gross profit                                            |  |                    | 157,888   |   |                   |   | 220,998   |               |  |   | 517,512          |   |  |   | 635,131   |  
|Selling, general and administrative expenses            |  |                    | 122,400   |   |                   |   | 146,492   |               |  |   | 387,883          |   |  |   | 403,712   |  
|Restructuring and related charges                       |  |                    | 19,062    |   |                   |   | 13,143    |               |  |   | 54,909           |   |  |   | 50,458    |  
|Goodwill impairment-Commercial Products                 |  |                    |          |   |                   |   |          |               |  |   | 9,600            |   |  |   |          |  
|Front-load washer litigation                            |  |                    |          |   |                   |   |          |               |  |   | 18,500           |   |  |   |          |  
|                                                        |  |                    |           |   |                   |   |           |               |  |   |                  |   |  |   |           |  
|Operating income                                        |  |                    | 16,426    |   |                   |   | 61,363    |               |  |   | 46,620           |   |  |   | 180,961   |  
|Interest expense                                        |  |                    | (14,736   | ) |                   |   | (12,728   | )             |  |   | (40,843          | ) |  |   | (40,786   | )
|Adverse judgment on pre-acquisition distributor lawsuit |  |                    |          |   |                   |   |          |               |  |   | (10,505          | ) |  |   |          |  
|Other income                                            |  |                    | 4,326     |   |                   |   | 4,078     |               |  |   | 7,248            |   |  |   | 2,265     |  
|                                                        |  |                    |           |   |                   |   |           |               |  |   |                  |   |  |   |           |  
|Income from continuing operations before income taxes   |  |                    | 6,016     |   |                   |   | 52,713    |               |  |   | 2,520            |   |  |   | 142,440   |  
|Income tax expense (benefit)                            |  |                    | (1,119    | ) |                   |   | 17,395    |               |  |   | (2,255           | ) |  |   | 47,005    |  
|                                                        |  |                    |           |   |                   |   |           |               |  |   |                  |   |  |   |           |  
|Income from continuing operations                       |  |                    | 7,135     |   |                   |   | 35,318    |               |  |   | 4,775            |   |  |   | 95,435    |  
|Income from discontinued operations, net of tax         |  |                    | 339       |   |                   |   | 1,247     |               |  |   | 339              |   |  |   | 844       |  
|                                                        |  |                    |           |   |                   |   |           |               |  |   |                  |   |  |   |           |  
|Net income                                              |  | $                  | 7,474     |   |                   | $ | 36,565    |               |  | $ | 5,114            |   |  | $ | 96,279    |  
|                                                        |  |                    |           |   |                   |   |           |               |  |   |                  |   |  |   |           |  
|Basic earnings per common share:                        |  |                    |           |   |                   |   |           |               |  |   |                  |   |  |   |           |  
|                                                        |  |                    |           |  
|Income from continuing operations                       |  | $                  | 0.09      |   |                   | $ | 0.45      |               |  | $ | 0.06             |   |  | $ | 1.22      |  
|Discontinued operations                                 |  |                    | 0.00      |   |                   |   | 0.02      |               |  |   | 0.00             |   |  |   | 0.01      |  
|Net income                                              |  | $                  | 0.09      |   |                   | $ | 0.47      |               |  | $ | 0.06             |   |  | $ | 1.23      |  
|                                                        |  |                    |           |  
|Diluted earnings per common share:                      |  |                    |           |   |                   |   |           |               |  |   |                  |   |  |   |           |  
|                                                        |  |                    |           |  
|Income from continuing operations                       |  | $                  | 0.09      |   |                   | $ | 0.45      |               |  | $ | 0.06             |   |  | $ | 1.21      |  
|Discontinued operations                                 |  |                    | 0.00      |   |                   |   | 0.02      |               |  |   | 0.00             |   |  |   | 0.01      |  
|Net income                                              |  | $                  | 0.09      |   |                   | $ | 0.46      |               |  | $ | 0.06             |   |  | $ | 1.22      |  
|                                                        |  |                    |           |  
|Cash dividends paid per share                           |  | $                  | 0.18      |   |                   | $ | 0.18      |               |  | $ | 0.54             |   |  | $ | 0.54      |  



3



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Maytag Corporation

Consolidated Balance Sheets



|                                    |  |               |           |               |   |          
|----------------------------------- |  | ------------- | --------- | ------------- | - | ---------
|In thousands, except share data     |  | October 22004 |           | January 32004
|Assets                              |  |               |           |               |   |          
|                                    |  |              
|Current assets                      |  |               |           |               |   |          
|Cash and cash equivalents           |  | $             | 57,758    |               | $ | 6,756    
|Accounts receivable-net             |  |               | 670,079   |               |   | 596,832  
|Inventories                         |  |               | 572,612   |               |   | 468,345  
|Deferred income taxes               |  |               | 48,943    |               |   | 63,185   
|Other current assets                |  |               | 57,114    |               |   | 94,030   
|Discontinued current assets         |  |               |          |               |   | 75,175   
|                                    |  |               |           |               |   |          
|Total current assets                |  |               | 1,406,506 |               |   | 1,304,323
|                                    |  |               |           |               |   |          
|Noncurrent assets                   |  |               |           |               |   |          
|Deferred income taxes               |  |               | 168,204   |               |   | 183,685  
|Prepaid pension cost                |  |               | 1,617     |               |   | 1,666    
|Intangible pension asset            |  |               | 66,615    |               |   | 66,615   
|Goodwill                            |  |               | 259,413   |               |   | 269,013  
|Other intangibles                   |  |               | 36,482    |               |   | 37,498   
|Other noncurrent assets             |  |               | 51,424    |               |   | 54,069   
|Discontinued noncurrent assets      |  |               |          |               |   | 60,336   
|                                    |  |               |           |               |   |          
|Total noncurrent assets             |  |               | 583,755   |               |   | 672,882  
|                                    |  |               |           |               |   |          
|Property, plant and equipment       |  |               |           |               |   |          
|Property, plant and equipment       |  |               | 2,557,056 |               |   | 2,628,985
|Less accumulated depreciation       |  |               | 1,607,296 |               |   | 1,582,050
|                                    |  |               |           |               |   |          
|Total property, plant and equipment |  |               | 949,760   |               |   | 1,046,935
|                                    |  |               |           |               |   |          
|Total assets                        |  | $             | 2,940,021 |               | $ | 3,024,140
|                                    |  |               |           |               |   |          



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Maytag Corporation

Consolidated Balance Sheets - Continued



|                                                                                  |  |               |            |   |               |   |            |  
|--------------------------------------------------------------------------------- |  | ------------- | ---------- | - | ------------- | - | ---------- | -
|In thousands, except share data                                                   |  | October 22004 |            |   | January 32004 |  
|Liabilities and Shareowners Equity                                               |  |               |            |   |               |   |            |  
|Current liabilities                                                               |  |               |            |   |               |   |            |  
|Notes payable                                                                     |  | $             |           |   |               | $ | 71,491     |  
|Accounts payable                                                                  |  |               | 471,812    |   |               |   | 466,734    |  
|Compensation to employees                                                         |  |               | 55,469     |   |               |   | 69,388     |  
|Accrued liabilities                                                               |  |               | 318,889    |   |               |   | 245,935    |  
|Current portion of long-term debt                                                 |  |               | 23,007     |   |               |   | 24,503     |  
|Discontinued current liability                                                    |  |               |           |   |               |   | 105,739    |  
|                                                                                  |  |               |            |   |               |   |            |  
|Total current liabilities                                                         |  |               | 869,177    |   |               |   | 983,790    |  
|Noncurrent liabilities                                                            |  |               |            |   |               |   |            |  
|Long-term debt, less current portion                                              |  |               | 973,278    |   |               |   | 874,832    |  
|Postretirement benefit liability                                                  |  |               | 535,343    |   |               |   | 538,105    |  
|Accrued pension cost                                                              |  |               | 351,874    |   |               |   | 398,495    |  
|Other noncurrent liabilities                                                      |  |               | 170,407    |   |               |   | 144,341    |  
|Discontinued noncurrent liability                                                 |  |               |           |   |               |   | 18,766     |  
|                                                                                  |  |               |            |   |               |   |            |  
|Total noncurrent liabilities                                                      |  |               | 2,030,902  |   |               |   | 1,974,539  |  
|                                                                                  |  |              
|Shareowners equity                                                               |  |               |            |   |               |   |            |  
|Preferred stock:                                                                  |  |               |            |   |               |   |            |  
|Authorized24,000,000 shares (par value $1.00)                                    |  |               |            |   |               |   |            |  
|Issuednone                                                                       |  |               |            |   |               |   |            |  
|Common stock:                                                                     |  |               |            |   |               |   |            |  
|Authorized200,000,000 shares (par value $1.25)                                   |  |               |            |   |               |   |            |  
|Issued117,150,593 shares, including shares in treasury                           |  |               | 146,438    |   |               |   | 146,438    |  
|Additional paid-in capital                                                        |  |               | 426,966    |   |               |   | 432,696    |  
|Retained earnings                                                                 |  |               | 1,322,819  |   |               |   | 1,360,361  |  
|Cost of common stock in treasury (200438,002,731 shares; 200338,410,885 shares) |  |               | (1,440,237 | ) |               |   | (1,455,706 | )
|Employee stock plans                                                              |  |               | 2,746      |   |               |   | (817       | )
|Accumulated other comprehensive loss                                              |  |               | (418,790   | ) |               |   | (417,161   | )
|                                                                                  |  |               |            |   |               |   |            |  
|Total shareowners equity                                                         |  |               | 39,942     |   |               |   | 65,811     |  
|                                                                                  |  |               |            |   |               |   |            |  
|Total liabilities and shareowners equity                                         |  | $             | 2,940,021  |   |               | $ | 3,024,140  |  
|                                                                                  |  |               |            |   |               |   |            |  



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Maytag Corporation

Consolidated Statements of Cash Flows



|                                                                                             |  |                   |          |   |                   |   |          |  
|-------------------------------------------------------------------------------------------- |  | ----------------- | -------- | - | ----------------- | - | -------- | -
|                                                                                             |  | Nine Months Ended |         
|In thousands                                                                                 |  | October 2 2004    |          |   | September 27 2003 |  
|Operating activities                                                                         |  |                   |          |   |                   |   |          |  
|Net income                                                                                   |  | $                 | 5,114    |   |                   | $ | 96,279   |  
|Adjustments to reconcile net income to net cash provided by continuing operating activities: |  |                   |          |   |                   |   |          |  
|Net income from discontinued operations                                                      |  |                   | (339     | ) |                   |   | (844     | )
|Depreciation                                                                                 |  |                   | 127,014  |   |                   |   | 121,342  |  
|Amortization                                                                                 |  |                   | 1,022    |   |                   |   | 843      |  
|Deferred income taxes                                                                        |  |                   | 29,723   |   |                   |   | 39,850   |  
|Gain on sale of property                                                                     |  |                   | (9,711   | ) |                   |   |         |  
|Restructuring and related charges, net of cash paid                                          |  |                   | 40,545   |   |                   |   | 36,258   |  
|Goodwill impairment-Commercial Products                                                      |  |                   | 9,600    |   |                   |   |         |  
|Front-load washer litigation, net of cash paid                                               |  |                   | 9,832    |   |                   |   |         |  
|Adverse judgment on pre-acquisition distributor lawsuit                                      |  |                   | 10,505   |   |                   |   |         |  
|Changes in working capital items                                                             |  |                   |          |   |                   |   |          |  
|Accounts receivable                                                                          |  |                   | (73,024  | ) |                   |   | (110,245 | )
|Inventories                                                                                  |  |                   | (105,996 | ) |                   |   | (10,819  | )
|Other current assets                                                                         |  |                   | 36,920   |   |                   |   | 76,717   |  
|Trade payables                                                                               |  |                   | 5,396    |   |                   |   | 34,059   |  
|Other current liabilities                                                                    |  |                   | 53,839   |   |                   |   | 30,850   |  
|Pension expense                                                                              |  |                   | 47,426   |   |                   |   | 48,025   |  
|Pension contributions                                                                        |  |                   | (93,471  | ) |                   |   | (137,444 | )
|Postretirement benefit liability                                                             |  |                   | (2,762   | ) |                   |   | 16,408   |  
|Other noncurrent liabilities                                                                 |  |                   | 5,071    |   |                   |   | (5,144   | )
|Other assets                                                                                 |  |                   | 4,450    |   |                   |   | (425     | )
|Other                                                                                        |  |                   | 6,543    |   |                   |   | 121      |  
|                                                                                             |  |                   |          |   |                   |   |          |  
|Net cash provided by continuing operating activities                                         |  | $                 | 107,697  |   |                   | $ | 235,831  |  
|                                                                                             |  |                  
|Investing activities                                                                         |  |                   |          |   |                   |   |          |  
|Capital expenditures-continuing operations                                                   |  | $                 | (67,036  | ) |                   | $ | (133,082 | )
|Proceeds from business disposition, net of transaction costs                                 |  |                   | 11,248   |   |                   |   | 13,168   |  
|Proceeds from property disposition, net of transaction costs                                 |  |                   | 14,251   |   |                   |   |         |  
|                                                                                             |  |                   |          |   |                   |   |          |  
|Investing activities-continuing operations                                                   |  | $                 | (41,537  | ) |                   | $ | (119,914 | )
|                                                                                             |  |                  
|Financing activities                                                                         |  |                   |          |   |                   |   |          |  
|Net reduction of notes payable                                                               |  | $                 | (71,491  | ) |                   | $ | (60,689  | )
|Proceeds from issuance of long-term debt                                                     |  |                   | 100,000  |   |                   |   | 200,000  |  
|Repayment of long-term debt                                                                  |  |                   | (4,020   | ) |                   |   | (216,522 | )
|Stock repurchases                                                                            |  |                   |         |   |                   |   | (1,021   | )
|Stock options and employee stock                                                             |  |                   | 3,361    |   |                   |   | 707      |  
|Dividends on common stock                                                                    |  |                   | (42,623  | ) |                   |   | (42,351  | )
|Cash to discontinued operations                                                              |  |                   | (283     | ) |                   |   | (1,038   | )
|                                                                                             |  |                   |          |   |                   |   |          |  
|Financing activities-continuing operations                                                   |  | $                 | (15,056  | ) |                   | $ | (120,914 | )
|                                                                                             |  |                  
|Effect of exchange rates on cash                                                             |  |                   | (102     | ) |                   |   | 36       |  
|                                                                                             |  |                   |          |   |                   |   |          |  
|Increase (decrease) in cash and cash equivalents                                             |  |                   | 51,002   |   |                   |   | (4,961   | )
|Cash and cash equivalents at beginning of year                                               |  |                   | 6,756    |   |                   |   | 8,106    |  
|                                                                                             |  |                   |          |   |                   |   |          |  
|Cash and cash equivalents at end of period                                                   |  | $                 | 57,758   |   |                   | $ | 3,145    |  
|                                                                                             |  |                   |          |   |                   |   |          |  



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MAYTAG CORPORATION

Notes to Consolidated Financial Statements

October 2, 2004



NOTE A  BASIS OF PRESENTATION



The
accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments
considered necessary for a fair presentation have been included and are of a normal and recurring nature. Operating results for the nine-month period ended October 2, 2004 are not necessarily indicative of the results that are expected for the
fiscal year ending January 1, 2005. For further information, refer to the consolidated financial statements and footnotes included in the Maytag Corporation annual report on Form 10-K for the year ended January 3, 2004.



NOTE B  COMPREHENSIVE INCOME



Total comprehensive income and its components, net of related tax are as follows:



|                                                                                               |  |                    |        |   |                   |   |        |  
|---------------------------------------------------------------------------------------------- |  | ------------------ | ------ | - | ----------------- | - | ------ | -
|                                                                                               |  | Three Months Ended |       
|In thousands                                                                                   |  | October 2 2004     |        |   | September 27 2003 |  
|Net income                                                                                     |  | $                  | 7,474  |   |                   | $ | 36,565 |  
|Other comprehensive income (loss) items, net of income taxes                                   |  |                    |        |   |                   |   |        |  
|Unrealized gains on securities                                                                 |  |                    | 333    |   |                   |   | 395    |  
|Less: Reclassification adjustment for (gain) loss included in net income                       |  |                    | (1,066 | ) |                   |   | 381    |  
|Foreign currency translation gain (loss)                                                       |  |                    | 1,979  |   |                   |   | (737   | )
|Less: Reclassification adjustment for foreign currency translation gain included in net income |  |                    | (379   | ) |                   |   |       |  
|                                                                                               |  |                    |        |   |                   |   |        |  
|Total other comprehensive income                                                               |  |                    | 867    |   |                   |   | 39     |  
|                                                                                               |  |                    |        |   |                   |   |        |  
|Comprehensive income                                                                           |  | $                  | 8,341  |   |                   | $ | 36,604 |  
|                                                                                               |  |                    |        |   |                   |   |        |  



|                                                                                               |  |                   |        |   |                   |   |        
|---------------------------------------------------------------------------------------------- |  | ----------------- | ------ | - | ----------------- | - | -------
|                                                                                               |  | Nine Months Ended
|In thousands                                                                                   |  | October 2 2004    |        |   | September 27 2003
|Net income                                                                                     |  | $                 | 5,114  |   |                   | $ | 96,279 
|Other comprehensive income (loss) items, net of income taxes                                   |  |                   |        |   |                   |   |        
|Unrealized gains on securities                                                                 |  |                   | 434    |   |                   |   | 186    
|Less: Reclassification adjustment for (gain) loss included in net income                       |  |                   | (1,801 | ) |                   |   | 381    
|Foreign currency translation gain (loss)                                                       |  |                   | 117    |   |                   |   | 4,851  
|Less: Reclassification adjustment for foreign currency translation gain included in net income |  |                   | (379   | ) |                   |   |       
|                                                                                               |  |                   |        |   |                   |   |        
|Total other comprehensive income (loss)                                                        |  |                   | (1,629 | ) |                   |   | 5,418  
|                                                                                               |  |                   |        |   |                   |   |        
|Comprehensive income                                                                           |  | $                 | 3,485  |   |                   | $ | 101,697
|                                                                                               |  |                   |        |   |                   |   |        



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The components of accumulated other comprehensive loss, net of related tax are as follows:



|                                     |  |                |          |   |                |   |          |  
|------------------------------------ |  | -------------- | -------- | - | -------------- | - | -------- | -
|In thousands                         |  | October 2 2004 |          |   | January 3 2004 |  
|Minimum pension liability adjustment |  | $              | (416,538 | ) |                | $ | (416,538 | )
|Unrealized gains on securities       |  |                |         |   |                |   | 1,367    |  
|Foreign currency translation loss    |  |                | (2,252   | ) |                |   | (1,990   | )
|                                     |  |                |          |   |                |   |          |  
|Accumulated other comprehensive loss |  | $              | (418,790 | ) |                | $ | (417,161 | )
|                                     |  |                |          |   |                |   |          |  



NOTE C  INVENTORIES



Inventories consisted of the following:



|                                   |  |                |         |                |   |        
|---------------------------------- |  | -------------- | ------- | -------------- | - | -------
|In thousands                       |  | October 2 2004 |         | January 3 2004
|                                   | 
|Raw materials                      |  | $              | 70,593  |                | $ | 76,024 
|Work in process                    |  |                | 54,181  |                |   | 51,422 
|Finished goods                     |  |                | 522,391 |                |   | 415,767
|Supplies                           |  |                | 10,815  |                |   | 9,423  
|                                   |  |                |         |                |   |        
|Total FIFO cost                    |  |                | 657,980 |                |   | 552,636
|Less excess of FIFO cost over LIFO |  |                | 85,368  |                |   | 84,291 
|                                   |  |                |         |                |   |        
|Inventories                        |  | $              | 572,612 |                | $ | 468,345
|                                   |  |                |         |                |   |        



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NOTE D  EARNINGS PER SHARE



The following table sets forth the components for computing basic and diluted earnings per share:



|                                                                                       |  |                    |        |                   |   |               |  |                  |        |  |   |       
|-------------------------------------------------------------------------------------- |  | ------------------ | ------ | ----------------- | - | ------------- |  | ---------------- | ------ |  | - | ------
|                                                                                       |  | Three Months Ended |        | Nine Months Ended
|In thousands                                                                           |  | October 22004      |        | September 27 2003 |   | October 22004 |  | September 272003
|Numerator for basic and diluted earnings per share - income from continuing operations |  | $                  | 7,135  |                   | $ | 35,318        |  | $                | 4,775  |  | $ | 95,435
|                                                                                       |  |                    |        |                   |   |               |  |                  |        |  |   |       
|Numerator for basic and diluted earnings per share - discontinued operations           |  | $                  | 339    |                   | $ | 1,247         |  | $                | 339    |  | $ | 844   
|                                                                                       |  |                    |        |                   |   |               |  |                  |        |  |   |       
|Numerator for basic and diluted earnings per share - net income                        |  | $                  | 7,474  |                   | $ | 36,565        |  | $                | 5,114  |  | $ | 96,279
|                                                                                       |  |                    |        |                   |   |               |  |                  |        |  |   |       
|Denominator for basic earnings per share - weighted-average shares                     |  |                    | 79,116 |                   |   | 78,588        |  |                  | 78,992 |  |   | 78,473
|Effect of dilutive securities: Stock option plans                                      |  |                    | 66     |                   |   | 225           |  |                  | 232    |  |   | 196   
|                                                                                       |  |                    |        |                   |   |               |  |                  |        |  |   |       
|Denominator for diluted earnings per share - adjusted weighted-average shares          |  |                    | 79,182 |                   |   | 78,813        |  |                  | 79,224 |  |   | 78,669
|                                                                                       |  |                    |        |                   |   |               |  |                  |        |  |   |       



NOTE ECONTINGENCIES



In 2003, a $12.1 million judgment (composed of $2.1 million compensatory and $10 million
punitive damages) was entered against Amana Company, LP, the entity from which Maytag purchased the Amana business in 2001. The case which was assumed by Maytag in the purchase agreement involved the termination of a commercial distributorship prior
to Maytags acquisition of the Amana business. In May 2004, the 8th Circuit Court of Appeals upheld the earlier judgment. As a result, Maytag recorded a charge of $10.5 million in the second quarter of 2004, bringing its reserve to cover this
matter to $12.8 million. The charge is disclosed as a separate line item on the Consolidated Statements of Income. Maytag is pursuing an appeal of this decision.



A charge of $18.5 million was recorded in the second quarter of 2004 for the anticipated resolution of product related litigation. This
litigation related primarily to early generation front-load washers. The charge was recorded in the Home Appliances segment on a separate line on the Consolidated Statements of Income.



The Internal Revenue Service (IRS) is currently examining the companys federal income tax returns for 2000 and 2001. The IRS has
proposed, or is expected to propose adjustments to Maytags income and tax credits for tax years 1998 through 2001 that would result in additional tax. The company disagrees with most of these adjustments. Accordingly, the company will
vigorously contest all such adjustments at the Appeals level of the IRS, if necessary.



Maytag has contingent liabilities arising in the normal course of business, including: guarantees, repurchase agreements, pending litigation, environmental remediation, taxes and other claims which are not considered to be significant in
relation to Maytags consolidated financial position, results of operations or cash flows.



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NOTE F  SEGMENT REPORTING



In the third quarter of 2004, Maytag has changed its segment reporting to reflect a reorganization announced in the second quarter. It now discloses two reporting
segments: Home Appliances and Commercial Products. The Home Appliances segment manufactures, sells and services major appliances and floor care products. These products are sold primarily to major national retailers and independent retail dealers in
North America and targeted international markets. The Commercial Products segment manufactures and sells vending equipment and commercial cooking products. These products are sold primarily to distributors and soft drink bottlers in North America
and targeted international markets. Segment information in this report has been reclassified for comparative purposes to reflect the reporting change.



Financial information for reportable segments consisted of the following:



|                        |  |                    |           |                   |   |               |  |   |                   |   |  |   |          
|----------------------- |  | ------------------ | --------- | ----------------- | - | ------------- |  | - | ----------------- | - |  | - | ---------
|                        |  | Three Months Ended |           | Nine Months Ended
|In thousands            |  | October 22004      |           | September 272003  |   | October 22004 |  |   | September 27 2003
|Net sales               |  |                    |           |                   |   |               |  |   |                   |   |  |   |          
|Home Appliances         |  | $                  | 1,123,801 |                   | $ | 1,145,856     |  | $ | 3,346,229         |   |  | $ | 3,283,726
|Commercial Products     |  |                    | 62,217    |                   |   | 75,411        |  |   | 210,961           |   |  |   | 236,440  
|                        |  |                    |           |                   |   |               |  |   |                   |   |  |   |          
|Consolidated Total      |  | $                  | 1,186,018 |                   | $ | 1,221,267     |  | $ | 3,557,190         |   |  | $ | 3,520,166
|                        |  |                    |           |                   |   |               |  |   |                   |   |  |   |          
|Operating income (loss) |  |                    |           |                   |   |               |  |   |                   |   |  |   |          
|Home Appliances         |  | $                  | 15,715    |                   | $ | 55,813        |  | $ | 52,319            |   |  | $ | 161,565  
|Commercial Products     |  |                    | 711       |                   |   | 5,550         |  |   | (5,699            | ) |  |   | 19,396   
|                        |  |                    |           |                   |   |               |  |   |                   |   |  |   |          
|Consolidated Total      |  | $                  | 16,426    |                   | $ | 61,363        |  | $ | 46,620            |   |  | $ | 180,961  
|                        |  |                    |           |                   |   |               |  |   |                   |   |  |   |          



The reconciliation of segment profit
to consolidated income from continuing operations before income taxes consisted of the following:



|                                                        |  |                    |         |   |                   |   |         |                |  |   |                   |   |  |   |         |  
|------------------------------------------------------- |  | ------------------ | ------- | - | ----------------- | - | ------- | -------------- |  | - | ----------------- | - |  | - | ------- | -
|                                                        |  | Three Months Ended |         |   | Nine Months Ended |  
|In thousands                                            |  | October 22004      |         |   | September 27 2003 |   |         | October 2 2004 |  |   | September 27 2003 |  
|Total operating income for reportable segments          |  | $                  | 16,426  |   |                   | $ | 61,363  |                |  | $ | 46,620            |   |  | $ | 180,961 |  
|Interest expense                                        |  |                    | (14,736 | ) |                   |   | (12,728 | )              |  |   | (40,843           | ) |  |   | (40,786 | )
|Adverse judgment on pre-acquisition distributor lawsuit |  |                    |        |   |                   |   |        |                |  |   | (10,505           | ) |  |   |        |  
|Other - net                                             |  |                    | 4,326   |   |                   |   | 4,078   |                |  |   | 7,248             |   |  |   | 2,265   |  
|                                                        |  |                    |         |   |                   |   |         |                |  |   |                   |   |  |   |         |  
|Income from continuing operations before income tax     |  | $                  | 6,016   |   |                   | $ | 52,713  |                |  | $ | 2,520             |   |  | $ | 142,440 |  
|                                                        |  |                    |         |   |                   |   |         |                |  |   |                   |   |  |   |         |  



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Asset information for Maytags reportable segments consisted of the following:



|                              |  |                      |           |               |   |          
|----------------------------- |  | -------------------- | --------- | ------------- | - | ---------
|                              |  | For the Period Ended
|In thousands                  |  | October 22004        |           | January 32004
|Total Assets                  |  |                      |           |               |   |          
|Home Appliances               |  | $                    | 2,811,912 |               |   | 2,753,914
|Commercial Products           |  |                      | 128,109   |               |   | 134,715  
|                              |  |                      |           |               |   |          
|Total for reportable segments |  |                      | 2,940,021 |               |   | 2,888,629
|Discontinued Operations       |  |                      |          |               |   | 135,511  
|                              |  |                      |           |               |   |          
|Consolidated Total            |  | $                    | 2,940,021 |               | $ | 3,024,140
|                              |  |                      |           |               |   |          



NOTE G  RESTRUCTURING AND
RELATED CHARGES



Restructuring and related charges reserve activity for the
nine months ended October 2, 2004 consisted of the following:



|                                      |  |                        |        |                         |   |                                |  |   |                 |   |  |                     |         |   |                         |   |         |   |  |   |       
|------------------------------------- |  | ---------------------- | ------ | ----------------------- | - | ------------------------------ |  | - | --------------- | - |  | ------------------- | ------- | - | ----------------------- | - | ------- | - |  | - | ------
|Description of reserve (in thousands) |  | Balance January 3,2004 |        | Charged to Earnings2004 |   | Reversal ofPrior PeriodCharges |  |   | CashUtilization |   |  | Non-CashUtilization |         |   | Balance October 2, 2004
|Severance and related expense         |  | $                      | 15,326 |                         | $ | 25,468                         |  | $ |                |   |  | $                   | (13,616 | ) |                         | $ |        |   |  | $ | 27,178
|Moving of equipment                   |  |                        |       |                         |   | 748                            |  |   |                |   |  |                     | (748    | ) |                         |   |        |   |  |   |      
|Accelerated depreciation              |  |                        |       |                         |   | 24,983                         |  |   |                |   |  |                     |        |   |                         |   | (24,983 | ) |  |   |      
|Asset impairment                      |  |                        |       |                         |   | 2,617                          |  |   |                |   |  |                     |        |   |                         |   | (2,617  | ) |  |   |      
|Excess inventory                      |  |                        |       |                         |   | 1,453                          |  |   |                |   |  |                     |        |   |                         |   | (1,453  | ) |  |   |      
|Purchase commitment                   |  |                        |       |                         |   | 1,210                          |  |   |                |   |  |                     |        |   |                         |   |        |   |  |   | 1,210 
|Reserve on asset held-for-sale        |  |                        | 1,570  |                         |   |                               |  |   | (1,570          | ) |  |                     |        |   |                         |   |        |   |  |   |      
|                                      |  |                        |        |                         |   |                                |  |   |                 |   |  |                     |         |   |                         |   |         |   |  |   |       
|Total                                 |  | $                      | 16,896 |                         | $ | 56,479                         |  | $ | (1,570          | ) |  | $                   | (14,364 | ) |                         | $ | (29,053 | ) |  | $ | 28,388
|                                      |  |                        |        |                         |   |                                |  |   |                 |   |  |                     |         |   |                         |   |         |   |  |   |       



In the fourth quarter of 2002, Maytag
announced that it would close its refrigeration manufacturing facility in Galesburg, Illinois by December 2004, and it ceased production there in September 2004. In connection therewith, the Company recorded $48.4 million and $67.1 million in
pre-tax restructuring and related charges in 2003 and 2002, respectively, including $48.4 million and $32.8 million for asset impairments, accelerated depreciation and severance and related costs. The remaining $34.3 million charge in 2002 involved
pension and postretirement health care benefit curtailments that were charged to Accrued pension cost and Postretirement benefit liability on the Consolidated Balance Sheets. Pre-tax restructuring and related charges of $11.9 million and $36.4
million were recorded in the third quarter and first nine months of 2004, respectively. Cash expenditures for the three and nine months ended October 2, 2004, were $0.5 million and $3.7 million, respectively. The closure of the facility has resulted
in a workforce reduction of approximately 1,420 positions through the end of the third quarter of 2004. Hourly production workers held the majority of these positions. Approximately 180 positions remain, most of them until the first quarter of 2005.



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In the first quarter of 2004, the Company sold a former cooking appliance manufacturing facility in Indianapolis,
Indiana. In 1996 the Company had ceased production at the facility, classified the net assets as held-for-sale and reduced the propertys carrying value to its estimated realizable value. The ultimate amount realized resulted in a $1.6 million
reversal of the reserve recorded against those net assets. This reversal was netted against the pre-tax restructuring and related charges within the Home Appliances segment.



In the second quarter of 2004, the Company announced a comprehensive restructuring plan to consolidate the Hoover Floor Care, Maytag
Appliances, and Corporate Headquarters organizations. Pre-tax restructuring and related charges of $7.2 million and $20.1 million were recorded in the third quarter and first nine months of 2004, respectively. Cash expenditures for the three and
nine months ended October 2, 2004, were $7.0 million and $10.7 million, respectively. It is anticipated that the restructuring plan will result in a workforce reduction of approximately 1,100 positions by the end of 2004. Approximately 750 positions
have been eliminated through October 2, 2004. The majority of the expenses were recorded in the Home Appliances segment.



NOTE H  STOCK PLANS



The Company has elected to follow Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees (APB 25), and related interpretations in accounting for its employee stock options and
awards. Under APB 25, employee stock options are valued using the intrinsic method, and no compensation expense is recorded when the exercise price of options equals or is greater than the fair market value of the underlying stock on the date of
grant. The following table shows the effect on net income and earnings per share if the Company had applied the fair value recognition provision of FASB Statement No. 123, Accounting for Stock-Based Compensation.



The fair value of stock options is estimated at the date of grant using the Black-Scholes
option pricing model.



|                                                                                                                                            |  |                    |       |   |                   |   |        |               |  |   |                  |   |  |   |        |  
|------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------ | ----- | - | ----------------- | - | ------ | ------------- |  | - | ---------------- | - |  | - | ------ | -
|                                                                                                                                            |  | Three Months Ended |       |   | Nine Months Ended |  
|In thousands except per share data                                                                                                          |  | October 22004      |       |   | September 272003  |   |        | October 22004 |  |   | September 272003 |  
|Net income, as reported                                                                                                                     |  | $                  | 7,474 |   |                   | $ | 36,565 |               |  | $ | 5,114            |   |  | $ | 96,279 |  
|Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax
effects |  |                    | (613  | ) |                   |   | (753   | )             |  |   | (2,264           | ) |  |   | (3,633 | )
|                                                                                                                                            |  |                    |       |   |                   |   |        |               |  |   |                  |   |  |   |        |  
|Pro forma net income                                                                                                                        |  | $                  | 6,861 |   |                   | $ | 35,812 |               |  | $ | 2,850            |   |  | $ | 92,646 |  
|                                                                                                                                            |  |                    |       |   |                   |   |        |               |  |   |                  |   |  |   |        |  
|Basic earnings per share - as reported                                                                                                      |  | $                  | 0.09  |   |                   | $ | 0.47   |               |  | $ | 0.06             |   |  | $ | 1.23   |  
|Diluted earnings per share-as reported                                                                                                      |  | $                  | 0.09  |   |                   | $ | 0.46   |               |  | $ | 0.06             |   |  | $ | 1.22   |  
|Basic earnings per share - pro forma                                                                                                        |  | $                  | 0.09  |   |                   | $ | 0.46   |               |  | $ | 0.04             |   |  | $ | 1.18   |  
|Diluted earnings per share-pro forma                                                                                                        |  | $                  | 0.09  |   |                   | $ | 0.45   |               |  | $ | 0.04             |   |  | $ | 1.18   |  



The Companys weighted-average
assumptions used in this model have not changed from January 3, 2004.



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NOTE I  WARRANTY RESERVE



Maytag provides a basic limited warranty for all of its major appliance, floor care and
commercial products. The specific terms and conditions of those warranties vary depending upon the product sold. Maytag estimates the costs that may be incurred and records a liability in the amount of such costs at the time product revenue is
recognized. Factors that affect Maytags warranty liability include the number of units shipped to customers, historical and anticipated rates of warranty claims and cost per claim. Maytag periodically assesses the adequacy of its recorded
warranty liability and adjusts the amount as necessary.



Changes in the basic
limited warranty liability for the nine months ended October 2, 2004 were as follows:



|                                                                              |  |                |         |  
|----------------------------------------------------------------------------- |  | -------------- | ------- | -
|Warranty reserve (in thousands)                                               |  | October 2 2004 |        
|Balance at beginning of period                                                |  | $              | 103,227 |  
|Warranties accrued during the period                                          |  |                | 98,176  |  
|Settlements made during the period                                            |  |                | (91,442 | )
|Changes in liability for adjustments during the period, including expirations |  |                | 5,899   |  
|                                                                              |  |                |         |  
|Balance at end of period                                                      |  | $              | 115,860 |  
|                                                                              |  |                |         |  



In addition to the basic limited
warranty, an optional extended warranty is offered to retail purchasers of the Companys major appliances. Sales of extended warranties are recorded as deferred revenue within accrued liabilities on the Consolidated Balance Sheet. Deferred
revenue is amortized into income on a straight-line basis over the length of the extended warranty contracts. Payments on extended warranty contracts are expensed as incurred.



NOTE JSALE OF RONGSHIDA-MAYTAG



During 2001, the Company committed to a plan to dispose of its interest in Rongshida-Maytag, a joint venture in China. Total charges of
$45.6 million were recorded to write down the Companys interest in the net assets of Rongshida-Maytag to its estimated fair value less costs to dispose. No tax benefit was recorded on the $45.6 million capital loss as the recognition of a
future tax benefit from this loss is uncertain. In the third quarter of 2004, Maytag completed the sale of its interest in the joint venture for net proceeds of $11.2 million, resulting in an after-tax gain on sale of $0.3 million which is recorded
in income from discontinued operations.



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##### Table of Contents

NOTE K PENSION AND POSTRETIREMENT MEDICAL BENEFIT EXPENSES



The components of net periodic pension cost consisted of the following:



|                                            |  |                    |         |   |                   |   |         |               |  |   |                   |   |  |   |         |  
|------------------------------------------- |  | ------------------ | ------- | - | ----------------- | - | ------- | ------------- |  | - | ----------------- | - |  | - | ------- | -
|                                            |  | Three Months Ended |         |   | Nine Months Ended |  
|In thousands                                |  | October 22004      |         |   | September 27 2003 |   |         | October 22004 |  |   | September 27 2003 |  
|Components of net periodic pension cost:    |  |                    |         |   |                   |   |         |               |  |   |                   |   |  |   |         |  
|Service cost                                |  | $                  | 6,781   |   |                   | $ | 6,304   |               |  | $ | 21,542            |   |  | $ | 23,414  |  
|Interest cost                               |  |                    | 25,879  |   |                   |   | 25,395  |               |  |   | 77,403            |   |  |   | 76,109  |  
|Expected return on plan assets              |  |                    | (28,602 | ) |                   |   | (25,107 | )             |  |   | (85,798           | ) |  |   | (75,704 | )
|Amortization of transition assets           |  |                    | (5      | ) |                   |   | (3      | )             |  |   | (19               | ) |  |   | (10     | )
|Amortization of prior service cost          |  |                    | 2,818   |   |                   |   | 3,381   |               |  |   | 8,903             |   |  |   | 9,954   |  
|Amortization of unrecognized actuarial loss |  |                    | 8,691   |   |                   |   | 4,756   |               |  |   | 25,395            |   |  |   | 14,262  |  
|                                            |  |                    |         |   |                   |   |         |               |  |   |                   |   |  |   |         |  
|Net periodic pension cost                   |  | $                  | 15,561  |   |                   | $ | 14,726  |               |  | $ | 47,426            |   |  | $ | 48,025  |  
|                                            |  |                    |         |   |                   |   |         |               |  |   |                   |   |  |   |         |  



The Company made $93.5 million in
pension contributions in the first nine months of 2004, of which $90.2 million were voluntary contributions to the qualified pension plan. For the remainder of 2004, the Company does not expect to make additional contributions to the qualified
pension plan, and contributions to nonqualified pension plans are not expected to be significant.



The components of net periodic postretirement medical cost consisted of the following:



|                                                |  |                    |        |   |                   |   |        |               |  |   |                  |   |  |   |        |  
|----------------------------------------------- |  | ------------------ | ------ | - | ----------------- | - | ------ | ------------- |  | - | ---------------- | - |  | - | ------ | -
|                                                |  | Three Months Ended |        |   | Nine Months Ended |  
|In thousands                                    |  | October 22004      |        |   | September 272003  |   |        | October 22004 |  |   | September 272003 |  
|Components of net periodic postretirement cost: |  |                    |        |   |                   |   |        |               |  |   |                  |   |  |   |        |  
|Service cost                                    |  | $                  | 1,308  |   |                   | $ | 5,034  |               |  | $ | 7,898            |   |  | $ | 15,103 |  
|Interest cost                                   |  |                    | 9,294  |   |                   |   | 11,635 |               |  |   | 32,308           |   |  |   | 34,904 |  
|Amortization of prior service benefit           |  |                    | (7,732 | ) |                   |   | (1,757 | )             |  |   | (13,297          | ) |  |   | (5,272 | )
|Amortization of unrecognized actuarial loss     |  |                    | 4,005  |   |                   |   | 2,766  |               |  |   | 11,716           |   |  |   | 8,297  |  
|                                                |  |                    |        |   |                   |   |        |               |  |   |                  |   |  |   |        |  
|Net periodic postretirement cost                |  | $                  | 6,875  |   |                   | $ | 17,678 |               |  | $ | 38,625           |   |  | $ | 53,032 |  
|                                                |  |                    |        |   |                   |   |        |               |  |   |                  |   |  |   |        |  



Net periodic postretirement medical
expense decreased in 2004 as the result of new collective bargaining agreements being in effect at the North Canton, Ohio, floor care production facility and the Newton, Iowa, laundry production facility that provides for the elimination of
postretirement medical benefits on a transitional basis. During the third quarter of 2004, Maytag also recorded a decrease in ongoing postretirement medical expenses associated with the Galesburg, Illinois, refrigeration production facility.



Net periodic postretirement medical cost also decreased in 2004 as the result
of the elimination of postretirement benefits for certain salaried employees in 2003. Finally, Maytags adoption of FSP 106-b in conjunction with the change in Medicare prescription drug coverage further reduced these costs (see Impact of
Recently Issued Accounting Standards note below for further information).



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##### Table of Contents

NOTE L  GOODWILL IMPAIRMENT



In the second quarter of 2004, Maytag recorded a $9.6 million charge for goodwill impairment
related to the commercial cooking equipment business. Maytags policy for goodwill impairment testing is to calculate the fair value of reporting units on an annual basis in the fourth quarter. The fair value is calculated as the net present
value of future cash flows that are determined from Maytags annual business planning process. However, the commercial cooking reporting unit experienced significant unanticipated operating losses in the first half of 2004. The magnitude of the
losses was an indication of potential goodwill impairment, and the Company performed a goodwill impairment test in the second quarter. As a result of this test, goodwill in the commercial cooking business was reduced from $14.1 million to $4.5
million. The charge is reported as a separate line item on the Consolidated Statements of Income and was recorded in the Commercial Products segment.



NOTE M  IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS



ACCOUNTING FOR MEDICARE ACT



On December 8, 2003, the Medicare Prescription Drug Improvement and Modernization Act of 2003 (the Act) was signed
into law. The Act introduces a prescription drug benefit under Medicare as well as a federal subsidy to sponsors of retiree health care benefit plans that provide a benefit that is at least actuarially equivalent to Medicare Part D.



In the second quarter of 2004, a Financial Accounting Standards Board (FASB)
Staff Position (FSP FAS106-2, Accounting and Disclosure Requirements Related to the Medicare Prescription Drug Improvement and Modernization Act of 2003) was issued providing guidance on the accounting for the effects of the Act for
employers that sponsor postretirement health care plans that provide prescription drug benefits. This FSP superseded FSP FAS 106-1, Accounting and Disclosure Requirements Related to the Medicare Prescription Drug Improvement and Modernization
Act of 2003. The FSP is effective for the first interim or annual period beginning after June 15, 2004.



The guidance in this FSP applies only to the sponsor of a single-employer defined benefit postretirement health plan for which the employer has concluded that prescription drug benefits available under the plan are
actuarially equivalent and thus qualify for the subsidy under the Act and the expected subsidy will offset or reduce the employers share of the costs of postretirement prescription drug coverage provided by the plan. Maytag determined that its
plan was actuarially equivalent and elected to adopt the provisions of FSP FAS 106-1 at April 3, 2004. Maytag compared the Medicare Part D plan to its retiree prescription drug coverage using actuarial equivalencies and reflecting the retiree
premiums and cost sharing provisions of the various plans. This analysis showed Maytags plans provide more valuable benefits to retirees than the Medicare Part D plan. The final guidance of FSP FAS 106-2 did not differ materially from FSP FAS
106-1. Based on our understanding of the intent of the Act and subsequent proposed regulations, the Company still believes its plans will meet the actuarial equivalence requirements necessary to receive the Medicare reimbursement.



For retirees with post-65 prescription drug benefits, Maytag estimates the net effect on
post-65 per capita medical and prescription drug costs to be a reduction of approximately 11-14% due to the Medicare reimbursement. The changes are assumed to have no impact on future participation rates in Maytags post-65 prescription drug
programs.



The Company has reduced its accumulated benefit obligation (ABO) for
the subsidy related to benefits attributed to past service by $52.8 million. The reduction will be recognized on the balance sheet through amortization. The effect of the subsidy on the measurement of net periodic postretirement cost for 2004 is
expected to be $8.6 million and will be recognized evenly throughout the fiscal year. The effect will include lower amortization of actuarial losses of $4.3 million, lower service costs of $0.8 million, and lower interest costs on the ABO of $3.5
million. For further information on postretirement costs, see Pension and Postretirement Medical Benefit Expenses note above.



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##### Table of Contents

Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations



Company Profile



We design, manufacture and market residential and commercial products under the Maytag, Hoover, Jenn-Air, Amana, Dixie-Narco, Jade and other brand names. In the third quarter, we changed our segment reporting due to a
major restructuring to consolidate the Hoover floor care, Maytag Appliances and corporate headquarters organizations. We now have two reporting segments: Home Appliances and Commercial Products. Our Home Appliances segment manufactures, sells and
services major appliances and floor care products. These products are sold primarily to major national retailers and independent retail dealers in North America and targeted international markets. Our Commercial Products segment manufactures and
sells vending equipment and commercial cooking products. These products are sold primarily to distributors and soft drink bottlers in North America and targeted international markets.



Our principal competition is from other appliance manufacturers including Whirlpool, General Electric and Electrolux although new
competitors from Asia and Europe have entered the domestic market. Product quality, price and functionality are the important areas of competitive differentiation. Maytag has positioned itself as a premium and mid-priced player in the industry based
on product quality and innovative features. In addition, our brands are some of the most recognizable and respected names in the industry.



Third Quarter Overview



| |  | Net sales decreased 2.9% in the third quarter of 2004 as compared to the prior year. Net sales declined 1.9% in Home Appliances and 17.5% in Commercial Products. A market share
decline in floor care products was the primary reason for the sales decline in Home Appliances. Commercial Products net sales were down due to significant weakness in vending industry unit sales.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Operating income for the third quarter was $16.4 million compared to $61.4 million in the prior year. The primary reasons for the operating income decline were:
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Lower volume and margins for floor care products,
| | - | -------------------------------------------------



| |  | Increased costs, primarily for steel and energy related items, and higher distribution costs, partially offset by lower selling, general and administrative expenses and a gain on
sale of a Canadian warehouse, and
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Higher restructuring charges.
| | - | -----------------------------



| |  | Pre-tax restructuring and related charges of $19.1 million were recorded in the third quarter of 2004 that included $11.9 million related to closing the Galesburg, Illinois,
refrigeration facility and $7.2 million for the costs related to a major restructuring to consolidate the Hoover floor care, Maytag Appliances, and corporate headquarters organizations. In the third quarter of the prior year, we recorded pre-tax
restructuring and related charges of $13.1 million, all related to the Galesburg plant closing.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Operating income for the third quarter included a pre-tax gain of $9.7 million resulting from the sale of a warehouse in Burlington, Ontario, for $14.3 million.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | In the third quarter of 2004, we completed the sale of our interest in a joint venture in China for net proceeds of $11.2 million, resulting in an after-tax gain on sale of $0.3
million which is recorded in discontinued operations.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Net income for the third quarter of 2004 was $7.5 million or $0.09 per share compared to net income of $36.6 million or $0.46 per share in the prior year. The results per share for
the third quarter of 2004 and 2003 included the following items:
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                                                            |  |               |       |   |      |   |       |  
|----------------------------------------------------------- |  | ------------- | ----- | - | ---- | - | ----- | -
|                                                            |  | Third Quarter |      
|                                                            |  | 2004          |       |   | 2003 |  
|Restructuring and related charges  Galesburg plant closing |  | $             | 0.10  |   |      | $ | 0.11  |  
|Restructuring and related charges  reorganizations         |  |               | 0.06  |   |      |   |      |  
|Gain on sale of property  Home Appliances                  |  |               | (0.10 | ) |      |   |      |  
|Income from discontinued operations                         |  |               |      |   |      |   | (0.02 | )
|                                                            |  |               |       |   |      |   |       |  
|                                                            |  | $             | 0.06  |   |      | $ | 0.10  |  



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##### Table of Contents

First Nine Months and Cash Flow Overview



| |  | Net sales increased 1.1% in the first nine months of 2004 compared to the prior year. A 1.9% increase in Home Appliances net sales was partially offset by a 10.8% decline in
Commercial Products net sales.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Operating income declined to $46.6 million in the first nine months of 2004 compared to $181.0 million in the prior year.
| | - | -------------------------------------------------------------------------------------------------------------------------



| |  | Operating income included pre-tax restructuring and related charges of $54.9 million in the first nine months of 2004 and $50.5 million in the prior year. We incurred restructuring
charges for Galesburg in both 2004 and 2003. The additional restructuring charges in 2004 were due to a major restructuring to consolidate operations. The additional restructuring charges in 2003 resulted from severance costs related to a reduction
in salaried workforce in that year.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Net income for the first nine months of 2004 was $5.1 million or $0.06 per share compared to net income of $96.3 million or $1.22 per share in the prior year. The results per share
for the first nine months of 2004 and 2003 included the following items:
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                                                            |  |                   |       |   |      |   |       |  
|----------------------------------------------------------- |  | ----------------- | ----- | - | ---- | - | ----- | -
|                                                            |  | First Nine Months |      
|                                                            |  | 2004              |       |   | 2003 |  
|Restructuring and related charges  Galesburg plant closing |  | $                 | 0.29  |   |      | $ | 0.29  |  
|Restructuring and related charges  reorganizations         |  |                   | 0.18  |   |      |   | 0.14  |  
|Goodwill impairment  Commercial Products                   |  |                   | 0.12  |   |      |   |      |  
|Front-load washer litigation                                |  |                   | 0.16  |   |      |   |      |  
|Adverse judgment on pre-acquisition distributor lawsuit     |  |                   | 0.09  |   |      |   |      |  
|Gain on sale of property  Home Appliances                  |  |                   | (0.10 | ) |      |   |      |  
|Income from discontinued operations                         |  |                   |      |   |      |   | (0.01 | )
|                                                            |  |                   |       |   |      |   |       |  
|                                                            |  | $                 | 0.73  |   |      | $ | 0.42  |  



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##### Table of Contents

| |  | Cash flow from continuing operations was $107.7 million for the first nine months of 2004 compared to $235.8 million in the prior year. The lower cash flow from operations in 2004
resulted from a decline in net income and greater increases in working capital in the first nine months of 2004 compared to 2003. Cash flows from operations improved significantly in the third quarter of 2004 as compared to the prior quarter due to
a reduction in inventory and an increase in accounts payable.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Total debt (defined as notes payable and long-term debt) increased to $996.3 million at the end of the third quarter from $970.8 million at the end of 2003. Net debt (defined as
total debt less cash and cash equivalents) decreased by $25.5 million from the end of 2003 due to a $51.0 million increase in cash and cash equivalents. During the third quarter of 2004, Maytag issued $100 million of medium-term notes and ended the
quarter with no commercial paper outstanding.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Results
of Operations  Third Quarter 2004 vs. Third Quarter 2003



|                                          |  |                    |           |   |                  |   |           |  
|----------------------------------------- |  | ------------------ | --------- | - | ---------------- | - | --------- | -
|                                          |  | Three Months Ended |          
|In thousands, except per share data       |  | October 22004      |           |   | September 272003 |  
|Net sales                                 |  | $                  | 1,186,018 |   |                  | $ | 1,221,267 |  
|Gross profit as a percentage of sales     |  |                    | 13.3      | % |                  |   | 18.1      | %
|Operating income                          |  | $                  | 16,426    |   |                  | $ | 61,363    |  
|Operating income as a percentage of sales |  |                    | 1.4       | % |                  |   | 5.0       | %
|Net income                                |  | $                  | 7,474     |   |                  | $ | 36,565    |  
|Diluted earnings per share                |  | $                  | 0.09      |   |                  | $ | 0.46      |  



Net sales in the third quarter of 2004
decreased by $35.2 million or 2.9% compared to the prior year. In Home Appliances, a significant reduction in floor care sales was the primary contributor to an overall decline of 1.9%, as sales of major appliances were essentially flat for the
third quarter compared to the prior year. International export sales and service revenues increased in the third quarter of 2004 compared to the prior year. Commercial Products sales declined by 17.5% as a result of weakness in the vending equipment
industry.



Gross profit declined to 13.3% of net sales in the third quarter of
2004 from 18.1% in the third quarter of 2003 due to increased costs, primarily related to steel and energy related items, lower average selling prices in floor care, and higher distribution costs. Increases in steel costs in the third quarter were
significantly greater than the first half and are expected to continue to have an adverse impact on gross margins in the fourth quarter. Cost reductions are expected to partially offset these unfavorable cost impacts. Gross profit for the third
quarter of 2004 included a $9.7 million gain from the sale of the Burlington, Ontario, warehouse.



Selling, general and administrative expenses for the third quarter declined to 10.3% of sales compared to 12.0% of sales for the prior year. The reduction in these costs, both as a percentage of sales and in absolute
terms, is the result of cost reduction initiatives such as reductions in national advertising as well as lower incentive compensation expense.



As a result of lower gross profit margins and higher restructuring charges, partially offset by a gain on sale of the Burlington, Ontario, warehouse, operating income
declined to $16.4 million in the third quarter of 2004 compared to $61.4 million in the prior year.



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##### Table of Contents

Operating results for the third quarter of 2004 were also impacted by the following charges recorded in the quarter:



| |  | Restructuring and related charges of $7.2 million were recorded in connection with the plan announced in the second quarter of 2004 to consolidate the Hoover floor care, Maytag
Appliances, and corporate headquarters organizations. The total restructuring charges related to this consolidation of selling and administrative functions are expected to be between $50 and $75 million, with approximately $35 to $45 million
expected to be cash expenditures. Charges of $20.3 million have been recorded to date, of which $10.7 million were cash expenditures. We expect this plan to result in annual savings of approximately $150 million. We realized a portion of these
savings in the third quarter and expect to realize additional savings in the fourth quarter of 2004.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Restructuring charges of $11.9 million were recorded in conjunction with closing the Galesburg, Illinois, refrigeration plant. The total restructuring charges for closing the
Galesburg plant are anticipated to be $160 to $170 million, with approximately $50 million being cash expenditures. Charges of $150.3 million have been recorded to date, of which $11.8 million were cash expenditures. The annual savings from the
closing of this facility are anticipated to be $30 million starting in the fourth quarter of 2004.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Interest expense for the third quarter of 2004 increased to $14.7 million compared to $12.7 million for the prior year as a result of higher interest rates and lower
capitalized interest, partially offset by lower average total debt levels during the third quarter.



We recorded a tax benefit of $1.1 million in the third quarter of 2004 on income from continuing operations before tax of $6.0 million. This tax benefit was due to favorable Canadian capital gains tax rates on the
sale of the Burlington, Ontario, warehouse, a decrease in the valuation allowance on capital losses, and tax savings on returns filed for 2003 and prior years.



We completed the sale of our interest in a joint venture in China for net proceeds of $11.2 million, with a gain on sale of $0.3 million which is recorded in
discontinued operations.



For the reasons outlined above, net income declined
to $7.5 million or $0.09 per share in the third quarter of 2004 as compared to net income of $36.6 million or $0.46 per share in the prior year.



Negotiations with the hourly employees at Maytags Amana Refrigeration Products operation resulted in a new contract during the third quarter. The financial impact
of this contract is anticipated to be minimal



Operating Results by Segment
for the Third Quarter



Home Appliances:



|                 |  |                    |           |   |                  |   |           |  
|---------------- |  | ------------------ | --------- | - | ---------------- | - | --------- | -
|                 |  | Three Months Ended |          
|In thousands     |  | October 22004      |           |   | September 272003 |  
|Net sales        |  | $                  | 1,123,801 |   |                  | $ | 1,145,856 |  
|Operating income |  | $                  | 15,715    |   |                  | $ | 55,813    |  
|Percent of sales |  |                    | 1.4       | % |                  |   | 4.9       | %



Net sales in the third quarter of 2004
for Home Appliances decreased year-over-year by $22.1 million or 1.9%. The revenue decline resulted primarily from a significant decline in market share for floor care products. Floor



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##### Table of Contents

care sales were adversely impacted by reductions in product placements at large national retailers in the lower priced
product categories. In addition, market share declined in the higher priced categories due to increased foreign competition. Sales of major appliances for the third quarter were essentially flat versus the prior year. However, market share declined
as major appliance industry unit sales were higher in the third quarter of 2004 compared to the prior year. International export sales and service revenues increased in the third quarter of 2004 compared to the prior year.



Home Appliances recorded operating income of $15.7 million in the third quarter of 2004
compared to operating income of $55.8 million in the prior year. Lower sales of floor care products, increased steel and energy related costs, higher restructuring charges, and higher distribution costs were the primary reasons for the decline in
operating income. Operating results included restructuring and related charges of $19.0 million in the third quarter of 2004 as compared to $13.1 million in the prior year. Operating results for the third quarter of 2004 included a $9.7 million
pre-tax gain on the sale of the Burlington, Ontario, warehouse.



Commercial
Products:



|                 |  |                    |        |   |                  |   |        |  
|---------------- |  | ------------------ | ------ | - | ---------------- | - | ------ | -
|                 |  | Three Months Ended |       
|In thousands     |  | October 22004      |        |   | September 272003 |  
|Net sales        |  | $                  | 62,217 |   |                  | $ | 75,411 |  
|Operating income |  | $                  | 711    |   |                  | $ | 5,550  |  
|Percent of sales |  |                    | 1.1    | % |                  |   | 7.4    | %



Net sales of Commercial Products
declined by $13.2 million or 17.5% in the third quarter of 2004 compared to the prior year. The unfavorable trends in vending industry unit sales in 2003 have continued throughout 2004.



Operating income for Commercial Products was $0.7 million in the third quarter of 2004 compared to $5.6 million in the prior year. Lower
vending sales and increased material costs were the primary reasons for lower operating income in 2004.



Results of Operations  First Nine Months of 2004 vs. First Nine Months of 2003



|                                          |  |                   |           |   |                  |   |           |  
|----------------------------------------- |  | ----------------- | --------- | - | ---------------- | - | --------- | -
|                                          |  | Nine Months Ended |          
|In thousands, except per share data       |  | October 22004     |           |   | September 272003 |  
|Net sales                                 |  | $                 | 3,557,190 |   |                  | $ | 3,520,166 |  
|Gross profit as a percentage of sales     |  |                   | 14.5      | % |                  |   | 18.0      | %
|Operating income                          |  | $                 | 46,620    |   |                  | $ | 180,961   |  
|Operating income as a percentage of sales |  |                   | 1.3       | % |                  |   | 5.1       | %
|Net income                                |  | $                 | 5,114     |   |                  | $ | 96,279    |  
|Diluted earnings per share                |  | $                 | 0.06      |   |                  | $ | 1.22      |  



Net sales increased 1.1% in the first
nine months of 2004 compared to the prior year. A 1.9% increase in Home Appliances net sales was partially offset by a 10.9% decline in Commercial Products net sales. Increased



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##### Table of Contents

sales of major appliances offset lower sales of floor care products in Home Appliances. International export sales and
service revenues were also higher in the first nine months of 2004 compared to the prior year. Commercial Products sales comparisons were adversely impacted by lower vending equipment industry shipments in 2004.



Gross margin declined to 14.5% in the first nine months of 2004 compared to 18.0% in the
prior year due to higher material costs primarily related to steel, lower average selling prices for floor care products, increased energy related costs, and higher distribution costs.



Operating income declined to $46.6 million or 1.3% of net sales in the first nine months of 2004 compared to $181.0 million or 5.1% of net
sales in the first nine months of 2003. The first nine months of 2004 were adversely affected by lower gross margins, restructuring and related charges, a goodwill impairment charge, and a charge for front-load washer litigation. These unfavorable
items were partially offset by cost reductions and the gain on sale of the Burlington, Ontario, warehouse. We recorded pre-tax restructuring and related charges of $54.9 million in the first nine months of 2004 as compared to $50.5 million in the
prior year.



In the first quarter of 2004, we elected to start recording the
benefits of a federal reimbursement for retiree prescription drug costs that will emanate from the Medicare legislation enacted in December 2003. The annual reduction in postretirement medical expenses as a result of this federal reimbursement is
anticipated to be $8.6 million, of which $6.4 million was recorded in the first nine months of 2004. Postretirement medical expense for the first nine months has also been reduced as a result of new collective bargaining agreements at the North
Canton, Ohio, floor care production facility and the Newton, Iowa, laundry production facility that provide for the elimination of postretirement medical benefits on a transitional basis. During the third quarter, Maytag also recorded a decrease in
ongoing postretirement medical expenses associated with the closing of the Galesburg, Illinois refrigeration production facility. For 2005, pension and postretirement medical expenses may increase as a result of changes in actuarial assumptions with
respect to discount rates and health care cost trend rates.



Interest expense
for the first nine months of 2004 and 2003 was $40.8 million.



We recorded a
tax benefit of $2.3 million in the first nine months of 2004 on income from continuing operations before income taxes of $2.5 million. This tax benefit was due to lower income, reduced income taxes on tax returns filed for 2003, refunds received
from amended tax returns filed for prior years, the nontaxable status of the federal reimbursement for retiree drug costs, and favorable Canadian capital gains tax rates on the sale of the Burlington, Ontario, warehouse. These favorable effects to
the tax rate were partially offset by not recording a tax benefit on the goodwill impairment charge and establishing a valuation allowance for potentially unusable capital losses realized in 2004.



For the reasons outlined above, net income for the first nine months of 2004 was $5.1 million
or $0.06 per share compared to net income of $96.3 million or $1.22 per share in the first nine months of 2003.



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##### Table of Contents

Liquidity and Capital Resources



|                                           |  |                   |         |   |                  |   |          |  
|------------------------------------------ |  | ----------------- | ------- | - | ---------------- | - | -------- | -
|                                           |  | Nine Months Ended |        
|In thousands                               |  | October 22004     |         |   | September 272003 |  
|Net cash provided by continuing operations |  | $                 | 107,697 |   |                  | $ | 235,831  |  
|Net cash used in investing activities      |  |                   | (41,537 | ) |                  |   | (119,914 | )
|Net cash used in financing activities      |  |                   | (15,056 | ) |                  |   | (120,914 | )



Net cash used in or provided by
continuing operating activities:



Cash flow provided by continuing
operations in the first nine months of 2004 was $107.7 million compared to $235.8 million provided by continuing operations in the first nine months of 2003. The decline in cash flow from operations was due to lower net income and a greater increase
in working capital in the first nine months of 2004 as compared to the first nine months of 2003. The primary driver of the working capital increase was a $106 million increase in inventory from year-end as compared to an $11 million increase in
inventories in the first nine months of 2003. Inventories are higher than planned levels due to inventory builds related to new product introductions and lower than expected sales in the first nine months of 2004. We expect to reduce inventories
during the fourth quarter of 2004. We made $93.5 million in pension contributions in the first nine months of 2004, of which $90.2 million were voluntary contributions to the qualified pension plan. In the prior year, pension contributions in the
first nine months were $137.4 million, of which $135.0 million were voluntary contributions to the qualified pension plan. For the remainder of 2004, we do not expect to make additional contributions to the qualified pension plan and contributions
to the nonqualified pension plans are not expected to be significant.



Net
cash used in investing activities:



Capital expenditures in the first nine
months of 2004 were $67.0 million compared to $133.1 million in the prior year. These capital expenditures represent investments for new product designs, cost reduction programs, replacement of equipment, and government mandated product
requirements. For the full year of 2004, we expect capital expenditures to be $110 million compared to $199 million for the prior year. Net cash used in investing activities was also impacted by the net cash proceeds of $14.3 million from the sale
of the Burlington, Ontario, warehouse and $11.2 million from the sale of our interest in a joint venture in China.



Net cash used in or provided by financing activities:



The primary source of cash that is utilized to fund investments is the cash generated from operations. Requirements in excess of the cash generated internally are funded
by debt. Total debt (defined as notes payable and long-term debt) increased to $996.3 million at the end of the third quarter from $970.8 million at the end of 2003. Maytags net debt (defined as total debt less cash and cash equivalents)
decreased by $25.5 million from the end of 2003 due to a $51.0 million increase in cash and cash equivalents.



We issued $100 million of 10-year medium term notes during the third quarter. As of the end of the third quarter of 2004, we had no commercial paper outstanding.



During the first quarter of 2004, we entered into a new three-year $400 million credit
agreement that expires March 5, 2007. The credit agreement includes financial covenants related to interest coverage and the ratio of debt to earnings before interest, taxes, depreciation and amortization. A failure to meet these covenants or any
other event of default under the credit agreement would adversely impact our ability to borrow funds through the sale of commercial paper. We recently obtained an amendment to the credit agreement that provided us with additional flexibility for
compliance with debt covenants. We were in compliance with these covenants at the end of the third quarter. As a result of the issuance of $100 million in medium term notes, the availability under the credit agreement has been reduced from $400
million to $300 million.



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##### Table of Contents

Dividend payments on common stock were $42.6 million in the first nine months of 2004 as compared to $42.4 million in the
prior year.



Shareholders equity:



Shareholders equity remains at a low level due to a share repurchase program that
increased the cost of treasury stock held from $219 thousand at December 31, 1994, to $1.5 billion at December 31, 2000. Shareholders equity has also been reduced by minimum pension liability adjustments of $416.5 million required by FASB
Statement No. 87 due to the underfunded status of our pension plans that reduced equity in each of the last three fiscal years. The low level of equity is not expected to pose a risk to liquidity as cash flows are anticipated to be sufficient and
there are no covenants in any of our debt instruments that include equity or debt-to-equity ratios.



Contingencies



Our Company has
contingent liabilities arising in the normal course of business, including pending litigation, environmental remediation, taxes, and other claims. The legal department estimates the costs to settle pending litigation, including legal expenses, based
on experience involving similar cases, specific facts known, and, if applicable, based on judgments of outside counsel. The Internal Revenue Service (IRS) is currently examining the companys federal income tax returns for 2000 and 2001. The
IRS has proposed, or is expected to propose adjustments to Maytags income and tax credits for tax years 1998 through 2001 that would result in additional tax. The company disagrees with most of these adjustments. Accordingly, the company will
vigorously contest all such adjustments at the Appeals level of the IRS, if necessary. The outcome of these matters is not expected to have a materially adverse effect on our consolidated financial position, results of operations, or cash flows.



As of October 2, 2004, approximately $49.8 million in undrawn stand-by letters
of credit were available which are primarily utilized to back workers compensation claims, extended service contracts and environmental costs if we were to fail to fund these obligations.



Market Risks



Our Company is exposed to foreign currency exchange risk related to its transactions, assets, and liabilities denominated in foreign currencies. Foreign currency forward
and option contracts are entered into to manage certain foreign currency exchange exposures. We hedge a portion of our anticipated foreign currency denominated export sales transactions, which are predominately in Canadian dollars.



We are exposed to commodity price risk related to our purchase of selected commodities used
in the manufacturing of our products. We have entered into commodity swap agreements to reduce the effect of changing raw material prices for selected commodities including natural gas. Our largest exposure is for steel prices, which have increased
in the third quarter of 2004 after significant increases earlier this year. Our commodity swap agreements do not provide any hedge for the increase in steel prices.



Interest rate risk for debt securities also poses a risk to our Company. We utilize interest rate swap contracts to adjust the proportion of
total debt that is subject to variable and fixed interest rates. The swaps involve the exchange of fixed and variable rate payments without exchanging the notional principal amount.



With the exception of increased material and energy related costs, there have been no material changes in the reported market risks since
January 3, 2004. See further discussion of these market risks and related financial instruments in the Maytag Corporation annual report on Form 10-K for the year ended January 3, 2004.



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##### Table of Contents

Forward Looking Statements and Business Risks



This Managements Discussion and Analysis contains statements that are not historical
facts and are considered forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are identified by their use of the terms: expect(s), intend(s),
may impact, plan(s), should, believe(s), anticipate(s), on track, or similar terms. We or our representatives may also make similar forward-looking statements from time to time
orally or in writing. The reader is cautioned that these forward-looking statements are subject to a number of risks, uncertainties, or other factors that may cause (and in some cases have caused) actual results to differ materially from those
described in the forward-looking statements. These risks and uncertainties include, but are not limited to, the following:



| |  | Business conditions in the industries in which Maytag competes, including changes in economic conditions in the geographic areas where its operations are located or where products
are sold.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Timing, start-up and customer acceptance of newly designed products.
| | - | --------------------------------------------------------------------



| |  | Unanticipated costs or market disruptions due to the start-up of the new refrigeration plant in Reynosa, Mexico.
| | - | ----------------------------------------------------------------------------------------------------------------



| |  | Shortages of manufacturing capacity.
| | - | ------------------------------------



| |  | Competitive factors, such as price competition and new product introductions.
| | - | -----------------------------------------------------------------------------



| |  | Significant loss of business or inability to collect accounts receivable from a major national retailer.
| | - | --------------------------------------------------------------------------------------------------------



| |  | The cost and availability of raw materials and purchased components, including the impact of tariffs.
| | - | -----------------------------------------------------------------------------------------------------



| |  | The timing and progress of activities initiated to achieve further cost reductions and savings.
| | - | -----------------------------------------------------------------------------------------------



| |  | Financial viability of customers, suppliers, contractors, or insurers.
| | - | ----------------------------------------------------------------------



| |  | Union labor relationships
| | - | -------------------------



| |  | The impact of business acquisitions or dispositions.
| | - | ----------------------------------------------------



| |  | Increasing pension and postretirement health care costs due to changes in interest rates, the market value of assets held in trust to pay these obligations, or inflationary health
care trend rates.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Costs of complying with governmental regulations.
| | - | -------------------------------------------------



| |  | Litigation including product liability, environmental remediation, taxes, and other claims or lawsuits.
| | - | -------------------------------------------------------------------------------------------------------



| |  | Product warranty claims.
| | - | ------------------------



| |  | Energy supply, including the availability and cost of energy necessary for the manufacturing process and the cost of fuel used in the distribution of products.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | The impact of foreign currency exchange rate fluctuations.
| | - | ----------------------------------------------------------



These factors may not constitute all factors that could cause actual results to differ materially from those discussed in any forward-looking statement. Our company
operates in a continually changing business environment and new factors emerge from time to time. We cannot predict such factors nor can we assess the impact, if any, of such factors on our financial position or our results of operations.
Accordingly, forward-looking statements should not be relied upon as a predictor of actual results. We disclaim any responsibility to update any forward-looking statement provided in this document.



Use of Non-GAAP Financial Measures



Net debt is defined as notes payable plus long-term debt (including current portion of the
long-term debt) less cash and cash equivalents. Net debt is a non-GAAP financial measure and should not be viewed as a replacement for the GAAP measure of total debt. Management believes that net debt is an important measure of liquidity which it
uses to measure its ability to meet its future debt obligations.



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##### Table of Contents

A reconciliation of total debt and net debt is provided in the following table:



|                                    |  |                      |         |               |   |        
|----------------------------------- |  | -------------------- | ------- | ------------- | - | -------
|                                    |  | For the period ended
|In thousands                        |  | October 22004        |         | January 32003
|Notes payable                       |  | $                    |        |               | $ | 71,491 
|Long term debt - current portion    |  | $                    | 23,007  |               | $ | 24,503 
|Long-term debt less current portion |  | $                    | 973,278 |               | $ | 874,832
|                                    |  |                      |         |               |   |        
|Total debt                          |  | $                    | 996,285 |               | $ | 970,826
|Less: Cash and cash equivalents     |  | $                    | 57,758  |               | $ | 6,756  
|                                    |  |                      |         |               |   |        
|Net debt                            |  | $                    | 938,527 |               | $ | 964,070
|                                    |  |                      |         |               |   |        



Item 3. Quantitative and Qualitative Disclosures about Market Risk.



See discussion of quantitative and qualitative disclosures about market risk in Market Risks section of Managements Discussion and Analysis of Financial Condition and Results of Operations.



Item 4. Controls and Procedures



The Company carried
out an evaluation, under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the disclosure controls and procedures pursuant
to Rule 13a-15 under the Exchange Act of 1934 as of the end of the third quarter of 2004. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures are effective in
timely alerting them to material information required to be included in the periodic SEC filings for Maytag (including its consolidated subsidiaries).



There was no change in internal control over financial reporting that occurred during the third quarter of 2004 that has materially affected or is reasonably likely to
materially affect Maytags internal control over financial reporting.



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##### Table of Contents

Part II OTHER INFORMATION



MAYTAG
CORPORATION

Exhibits and Reports on Form 8-K



Item 6. Exhibits and Reports on Form 8-K.



|        |  |                                                                                                                                               
|------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |  | Description                                                                                                                                   
|31.1    |  | Certification by Ralph F. Hake, Chief Executive Officer, required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934  
|        | 
|31.2    |  | Certification by George C. Moore, Chief Financial Officer, required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934
|        | 
|32.1    |  | Certification by Ralph F. Hake, Chief Executive Officer, pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code         
|        | 
|32.2    |  | Certification by George C. Moore, Chief Financial Officer, pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code       



|(b) | Reports on Form 8-K
|--- | -------------------



Form 8-K dated July 23, 2004 furnishing earnings release for three and six months ended July 3, 2004 under Item 12.



Form 8-K dated August 17, 2004, which filed under Item 7, an opinion letter
from Sidley Austin Brown & Wood LLP as an exhibit to Registration Statement on Form S-3 previously filed by Maytag.



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##### Table of Contents

MAYTAG CORPORATION

Signatures



Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.



|                       |  |                             
|---------------------- |  | ----------------------------
|                       |  | MAYTAG CORPORATION          
|                       | 
|Date: October 21, 2004 |  | /s/ George C. Moore         
|                       |  | George C. Moore             
|                       |  | Executive Vice President and
|                       |  | Chief Financial Officer     
|                       |  | (Duly Authorized Officer and
|                       |  | Principal Financial Officer)



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