Beat butter and shortening at medium speed with an electric mixer until creamy; gradually add sugar, beating well.
Combine flour, baking powder, and salt; add to butter mixture alternately with milk and water, beginning and ending with flour mixture. Beat at low speed until blended after each addition. Stir in extracts.
Beat egg whites at high speed with an electric mixer until stiff peaks form; fold about one-third of egg whites into batter. Gradually fold in remaining egg whites.