- Net sales growth of approximately 3% with share gains and
strong replacement and builder demand in North America
- GAAP net earnings margin of 1.7% (-130bps YoY) and ongoing
(non-GAAP) EBIT margin(1) of 6.5% (+100bps YoY) driven
by cost take out actions
- GAAP and ongoing (non-GAAP) earnings per diluted(2)
share of $1.53 and $5.45, respectively
- Cost take out actions delivered approximately $300 million of year-over-year benefit in the
quarter; on track to deliver over $800
million full-year benefit
- Expecting to return approximately $400
million of dividends to shareholders in 2023
- The Europe transaction is
approved by the European Commission, Germany, Austria, and China; U.K's Competition and Markets Authority
referred transaction to phase two; expect to close by April 2024
- European transaction to unlock significant value creation, post
closing expect approximately 150 basis points margin expansion and
approximately $250 million annual
increased free cash flow
- Revised full-year GAAP and ongoing(2) earnings per
diluted share to approximately $9.00
and approximately $16.00,
respectively; cash provided by operating activities of $1.1 billion and free cash flow(3) of
approximately $500 million
BENTON
HARBOR, Mich., Oct. 25,
2023 /PRNewswire/ -- Whirlpool Corporation (NYSE:
WHR), today reported third-quarter 2023 financial results.
"We continue to deliver
on our operational priorities," said Marc Bitzer, chairman and
chief executive officer of Whirlpool Corporation "with a 100 basis
point year-over-year ongoing margin expansion and over a point of
share gains in North America."
MARC
BITZER
|
KEY RESULTS
Quarterly
Results
|
Sequential(4)
|
|
Year-Over-Year
|
Q3
2023
|
Q2
2023
|
Change
|
|
Q3
2023
|
Q3
2022
|
Change
|
Net sales
($M)
|
$4,926
|
$4,792
|
2.8 %
|
|
$4,926
|
$4,784
|
3.0 %
|
Net sales excluding
currency ($M)
|
$4,918
|
$4,792
|
2.6 %
|
|
$4,844
|
$4,784
|
1.3 %
|
GAAP net earnings
(loss) available to
Whirlpool ($M)
|
$83
|
$85
|
(2.4) %
|
|
$83
|
$143
|
(42.0) %
|
Ongoing
EBIT(1) ($M)
|
$322
|
$352
|
(8.5) %
|
|
$322
|
$265
|
21.5 %
|
GAAP earnings (loss)
per diluted
share
|
$1.53
|
$1.55
|
(1.3) %
|
|
$1.53
|
$2.60
|
(41.2) %
|
Ongoing earnings per
diluted share(2)
|
$5.45
|
$4.21
|
29.5 %
|
|
$5.45
|
$4.49
|
21.4 %
|
CASH FLOW
Free Cash
Flow
|
2023
|
2022
|
Change
|
Cash provided by (used
in) operating activities ($M)
|
$(322)
|
$310
|
$(632)
|
Free cash
flow(3) ($M)
|
$(660)
|
$(24)
|
$(636)
|
QUARTERLY HIGHLIGHTS
- Net sales increase of 3.0% year-over-year and 2.8%
sequentially(4) driven by North America share gains and industry
strength, partially offset by normalizing promotional
environment
- Cost take out actions delivered approximately $300 million of year-over-year Q3 benefit, on
track to deliver at least $800
million for full year
- Declared fourth-quarter dividend of $1.75 per share
"Our cost
take out actions are on track to deliver over $800 million, as
expected, delivering approximately $300 million benefit this
quarter," said Jim Peters, chief financial officer of Whirlpool
Corporation. "These actions, combined with our value creating
portfolio transformation, gives us the confidence to continue to
fund innovation, growth, and shareholder returns."
JIM
PETERS
|
REGIONAL REVIEW
North
America
|
Sequential(4)
|
|
Year-Over-Year
|
Q3
2023
|
Q2
2023
|
Change
|
|
Q3
2023
|
Q3
2022
|
Change
|
Net sales
($M)
|
$2,977
|
$2,824
|
5.4 %
|
|
$2,977
|
$2,873
|
3.6 %
|
EBIT(5)
($M)
|
$298
|
$290
|
2.8 %
|
|
$298
|
$282
|
5.7 %
|
- Excluding currency, net sales increase of 3.8 percent
year-over-year, driven by share gains and the addition of
InSinkErator, partially offset by negative price/mix
- EBIT margin(5) of 10.0 percent compared to 9.8
percent in the same prior-year period, driven by cost take out
actions and InSinkErator, partially offset by unfavorable
price/mix
- Sequential net sales increase of 5.4 percent and EBIT impacted
by improved industry demand and cost take out actions, partially
offset by unfavorable price/mix
Europe, Middle
East and Africa
|
Sequential(4)
|
|
Year-Over-Year
|
Q3
2023
|
Q2
2023
|
Change
|
|
Q3
2023
|
Q3
2022
|
Change
|
Net sales
($M)
|
$863
|
$854
|
1.1 %
|
|
$863
|
$903
|
(4.4) %
|
EBIT(5)
($M)
|
$1
|
$17
|
(94.1) %
|
|
$1
|
$(28)
|
nm
|
- Excluding currency, net sales decline of 11.1 percent
year-over-year, impacted by continued demand weakness in
Europe, partially offset by
positive price/mix
- EBIT margin(5) of 0.1 percent compared to (3.1)
percent in the same prior-year period, driven by cost take out
actions and held for sale benefits
- Sequential net sales increase of 1.1 percent and EBIT impacted
by favorable currency and cost take out actions, partially offset
by unfavorable product price/mix
Latin
America
|
Sequential(4)
|
|
Year-Over-Year
|
Q3
2023
|
Q2
2023
|
Change
|
|
Q3
2023
|
Q3
2022
|
Change
|
Net sales
($M)
|
$857
|
$819
|
4.6 %
|
|
$857
|
$750
|
14.3 %
|
EBIT(5)
($M)
|
$54
|
$53
|
1.9 %
|
|
$54
|
$40
|
35.0 %
|
- Excluding currency, net sales increase of 9.8 percent
year-over-year, driven by strong share gains and industry recovery
in Brazil and Mexico
- EBIT margin(5) of 6.3 percent compared to 5.3
percent in the same prior-year period, driven by cost take out
actions and increased volumes
- Sequential net sales increase of 4.6 percent and EBIT impacted
by incremental share gains and favorable foreign currency
Asia
|
Sequential(4)
|
|
Year-Over-Year
|
Q3
2023
|
Q2
2023
|
Change
|
|
Q3
2023
|
Q3
2022
|
Change
|
Net sales
($M)
|
$229
|
$295
|
(22.4) %
|
|
$229
|
$258
|
(11.2) %
|
EBIT(5)
($M)
|
$5
|
$11
|
(54.5) %
|
|
$5
|
$12
|
(58.3) %
|
- Excluding currency, net sales decline of 8.4 percent
year-over-year, as soft consumer sentiment and negative demand
continues
- EBIT margin(5) of 2.2 percent compared to 4.7
percent in the same prior-year period, impacted by cost take out
actions offset by negative price/mix
- Sequential net sales decline of 22.4 percent and EBIT decline
with soft consumer sentiment impacting demand and unfavorable
price/mix partially offset by cost take out actions
FULL-YEAR 2023 OUTLOOK
Reaffirming full-year 2023 net sales of approximately
$19.4 billion
Updating full-year 2023 earnings guidance, including:
- Full-year GAAP and ongoing(2) earnings per diluted
share of approximately $9.00 and
approximately $16.00,
respectively
- Cash provided by operating activities of approximately
$1.1 billion and free cash
flow(3) of approximately $500
million
- GAAP tax rate and adjusted (non-GAAP) tax rate from 15 to 20
percent to approximately 0 to 5 percent and from 10 to 15 percent
to approximately (5) to 0 percent, respectively
European major domestic appliance transaction is subject to
certain closing conditions, including certain regulatory approvals.
We are working diligently with all parties to close the transaction
as soon as possible, and we expect it will close by April 2024.
(1)
|
A reconciliation of
earnings before interest and taxes (EBIT) and ongoing EBIT,
non-GAAP financial measures, to reported net earnings (loss)
available to Whirlpool, and a reconciliation of EBIT margin and
ongoing EBIT margin, non-GAAP financial measures, to net earnings
(loss) margin and other important information, appears
below.
|
(2)
|
A reconciliation of
ongoing earnings per diluted share, a non-GAAP financial measure,
to reported net earnings (loss) per diluted share available to
Whirlpool and other important information, appears
below.
|
(3)
|
A reconciliation of
free cash flow, a non-GAAP financial measure, to cash provided by
(used in) operating activities and other important information,
appears below.
|
(4)
|
Sequential refers to
a comparison of results between the three months ended June 30,
2023 and September 30, 2023. In the second half of 2022, Whirlpool
experienced significant global demand declines alongside
approximately $2 billion of full year cost inflation, that peaked
in the third quarter of 2022.
|
(5)
|
Segment EBIT
represents our consolidated EBIT broken down by the Company's
reportable segments and are metrics used by the chief operating
decision maker in accordance with ASC 280. Consolidated EBIT also
includes corporate "Other/Eliminations" of $(92) million and $(68)
million for the third quarters of 2023 and 2022, respectively, and
$(81) million for the second quarter of 2023.
|
ABOUT WHIRLPOOL CORPORATION
Whirlpool Corporation (NYSE: WHR) is committed to being the best
global kitchen and laundry company, in constant pursuit of
improving life at home. In an increasingly digital world, the
company is driving purposeful innovation to meet the evolving needs
of consumers through its iconic brand portfolio, including
Whirlpool, KitchenAid, Maytag, Consul, Brastemp, Amana,
Bauknecht, JennAir, Indesit, Yummly and InSinkErator. In
2022, the company reported approximately $20
billion in annual sales, 61,000 employees and 56
manufacturing and technology research centers. Additional
information about the company can be found at
WhirlpoolCorp.com.
WEBSITE DISCLOSURE
We routinely post important information for investors on our
website, WhirlpoolCorp.com, in the "Investors" section. We
also intend to update the "Hot Topics Q&A" portion of this
webpage as a means of disclosing material, non-public information
and for complying with our disclosure obligations under Regulation
FD. Accordingly, investors should monitor the "Investors" section
of our website, in addition to following our press releases, SEC
filings, public conference calls, presentations and webcasts. The
information contained on, or that may be accessed through, our
webpage is not incorporated by reference into, and is not a part
of, this document.
WHIRLPOOL ADDITIONAL INFORMATION
This document contains forward-looking statements about
Whirlpool Corporation and its consolidated subsidiaries
("Whirlpool") within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended. Whirlpool intends such
forward-looking statements to be covered by the safe harbor
provisions for forward-looking statements contained in the Private
Securities Litigation Reform Act of 1995 and includes this
statement for purposes of complying with those safe harbor
provisions. Any statements made in this press release that are not
statements of historical fact, including statements regarding our
2023 financial performance, supply chain, cost take out, raw
material, portfolio transformation, and transaction-related
synergies, closing timing of the transaction and future cash flow
expectations are forward-looking statements and should be evaluated
as such. Such statements can be identified by the use of
terminology such as "may," "could," "will," "should," "possible,"
"plan," "predict," "forecast," "potential," "anticipate,"
"estimate," "expect," "project," "intend," "believe," "may impact,"
"on track," and similar words or expressions. Many risks,
contingencies and uncertainties could cause actual results to
differ materially from Whirlpool's forward-looking statements.
Among these factors are: (1) intense competition in the home
appliance industry reflecting the impact of both new and
established global competitors, including Asian and European
manufacturers, and the impact of the changing retail environment,
including direct-to-consumer sales; (2) Whirlpool's ability to
maintain or increase sales to significant trade customers; (3)
Whirlpool's ability to maintain its reputation and brand image; (4)
the ability of Whirlpool to achieve its business objectives and
leverage its global operating platform, and accelerate the rate of
innovation; (5) Whirlpool's ability to understand consumer
preferences and successfully develop new products; (6) Whirlpool's
ability to obtain and protect intellectual property rights; (7)
acquisition, divestiture, and investment-related risks, including
risks associated with our past acquisitions; (8) the ability of
suppliers of critical parts, components and manufacturing equipment
to deliver sufficient quantities to Whirlpool in a timely and cost
effective manner; (9) COVID-19 pandemic-related business
disruptions and economic uncertainty; (10) Whirlpool's ability to
navigate risks associated with our presence in emerging markets;
(11) risks related to our international operations, including
changes in foreign regulations; (12) Whirlpool's ability to respond
to unanticipated social, political and/or economic events; (13)
information technology system failures, data security breaches,
data privacy compliance, network disruptions, and cybersecurity
attacks; (14) product liability and product recall costs; (15) our
ability to attract, develop and retain executives and other
qualified employees; (16) the impact of labor relations; (17)
fluctuations in the cost of key materials (including steel, resins,
base metals) and components and the ability of Whirlpool to offset
cost increases; (18) Whirlpool's ability to manage foreign currency
fluctuations; (19) impacts from goodwill impairment and related
charges; (20) triggering events or circumstances impacting the
carrying value of our long-lived assets; (21) inventory and other
asset risk; (22) health care cost trends, regulatory changes and
variations between results and estimates that could increase future
funding obligations for pension and postretirement benefit plans;
(23) litigation, tax, and legal compliance risk and costs,
especially if materially different from the amount we expect to
incur or have accrued for, and any disruptions caused by the same;
(24) the effects and costs of governmental investigations or
related actions by third parties; (25) changes in the legal and
regulatory environment including environmental, health and safety
regulations, data privacy, and taxes and tariffs; (26) Whirlpool's
ability to respond to the impact of climate change and climate
change regulation; and (27) the uncertain global economy and
changes in economic conditions which affect demand for our
products. Price increases and/or actions referred to throughout the
document reflect previously announced cost-based price increases.
Additional information concerning these and other factors can be
found in Whirlpool's filings with the Securities and Exchange
Commission, including the most recent annual report on Form 10-K,
quarterly reports on Form 10-Q, and current reports on Form 8-K.
Price increases and/or actions referred to throughout the document
reflect previously announced cost-based price increases. These
cautionary statements should not be construed by you to be
exhaustive and the forward-looking statements are made only as of
the date of this press release. We undertake no obligation to
update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise, except as
required by applicable law.
WHIRLPOOL
CORPORATION
CONSOLIDATED
CONDENSED STATEMENTS OF INCOME (LOSS) (UNAUDITED)
FOR THE PERIODS
ENDED SEPTEMBER 30
(Millions of
dollars, except per share data)
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net
sales
|
$
4,926
|
|
$
4,784
|
|
$
14,367
|
|
$
14,801
|
Expenses
|
|
|
|
|
|
|
|
Cost of products
sold
|
4,127
|
|
4,104
|
|
11,989
|
|
12,373
|
Gross
margin
|
799
|
|
680
|
|
2,378
|
|
2,428
|
Selling, general and
administrative
|
473
|
|
446
|
|
1,436
|
|
1,283
|
Intangible
amortization
|
18
|
|
8
|
|
39
|
|
24
|
Restructuring
costs
|
5
|
|
3
|
|
14
|
|
13
|
Impairment of goodwill
and other intangibles
|
—
|
|
—
|
|
—
|
|
384
|
Loss on sale and
disposal of businesses
|
46
|
|
2
|
|
286
|
|
348
|
Operating
profit
|
257
|
|
221
|
|
603
|
|
376
|
Other (income)
expense
|
|
|
|
|
|
|
|
Interest and sundry
(income) expense
|
(10)
|
|
(19)
|
|
77
|
|
(45)
|
Interest
expense
|
95
|
|
40
|
|
259
|
|
126
|
Earnings (loss) before
income taxes
|
172
|
|
200
|
|
267
|
|
295
|
Income tax expense
(benefit)
|
86
|
|
53
|
|
268
|
|
196
|
Equity method
investment income (loss), net of tax
|
(1)
|
|
(2)
|
|
(3)
|
|
(6)
|
Net earnings
(loss)
|
85
|
|
145
|
|
(4)
|
|
93
|
Less: Net earnings
(loss) available to noncontrolling interests
|
2
|
|
2
|
|
6
|
|
8
|
Net earnings (loss)
available to Whirlpool
|
$
83
|
|
$
143
|
|
$
(10)
|
|
$
85
|
Per share of common
stock
|
|
|
|
|
|
|
|
Basic net earnings
(loss) available to Whirlpool
|
$
1.53
|
|
$
2.61
|
|
$
(0.18)
|
|
$
1.52
|
Diluted net earnings
available to Whirlpool
|
$
1.53
|
|
$
2.60
|
|
$
(0.18)
|
|
$
1.51
|
Dividends
declared
|
$
1.75
|
|
$
1.75
|
|
$
5.25
|
|
$
5.25
|
Weighted-average
shares outstanding (in millions)
|
|
|
|
|
|
|
|
Basic
|
55.0
|
|
54.7
|
|
54.9
|
|
56.3
|
Diluted
|
55.3
|
|
55.0
|
|
54.9
|
|
56.7
|
WHIRLPOOL
CORPORATION
CONSOLIDATED
CONDENSED BALANCE SHEETS
(Millions of
dollars, except share data)
|
|
|
September 30,
2023
|
|
December 31,
2022
|
|
(Unaudited)
|
|
|
Assets
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
1,123
|
|
$
1,958
|
Accounts receivable,
net of allowance of $49 and $49, respectively
|
1,841
|
|
1,555
|
Inventories
|
2,388
|
|
2,089
|
Prepaid and other
current assets
|
620
|
|
653
|
Assets held for
sale
|
140
|
|
139
|
Total current
assets
|
6,112
|
|
6,394
|
Property, net of
accumulated depreciation of $5,191 and $4,808,
respectively
|
2,150
|
|
2,102
|
Right of use
assets
|
692
|
|
691
|
Goodwill
|
3,329
|
|
3,314
|
Other intangibles, net
of accumulated amortization of $430 and $400,
respectively
|
3,134
|
|
3,164
|
Deferred income
taxes
|
1,072
|
|
1,063
|
Other noncurrent
assets
|
400
|
|
396
|
Total assets
|
$
16,889
|
|
$
17,124
|
Liabilities and
stockholders' equity
|
|
|
|
Current
liabilities
|
|
|
|
Accounts
payable
|
$
3,433
|
|
$
3,376
|
Accrued
expenses
|
428
|
|
481
|
Accrued advertising
and promotions
|
476
|
|
623
|
Employee
compensation
|
224
|
|
159
|
Notes
payable
|
23
|
|
4
|
Current maturities of
long-term debt
|
1,300
|
|
248
|
Other current
liabilities
|
661
|
|
550
|
Liabilities held for
sale
|
478
|
|
490
|
Total current
liabilities
|
7,023
|
|
5,931
|
Noncurrent
liabilities
|
|
|
|
Long-term
debt
|
6,341
|
|
7,363
|
Pension
benefits
|
142
|
|
184
|
Postretirement
benefits
|
87
|
|
96
|
Lease
liabilities
|
585
|
|
584
|
Other noncurrent
liabilities
|
471
|
|
460
|
Total noncurrent
liabilities
|
7,626
|
|
8,687
|
Stockholders'
equity
|
|
|
|
Common stock, $1 par
value, 250 million shares authorized, 114 million and
114 million shares issued, respectively, and 55 million and 54
million shares
outstanding, respectively
|
114
|
|
114
|
Additional paid-in
capital
|
3,074
|
|
3,061
|
Retained
earnings
|
7,961
|
|
8,261
|
Accumulated other
comprehensive loss
|
(2,075)
|
|
(2,090)
|
Treasury stock, 60
million and 60 million shares, respectively
|
(7,010)
|
|
(7,010)
|
Total Whirlpool
stockholders' equity
|
2,064
|
|
2,336
|
Noncontrolling
interests
|
176
|
|
170
|
Total stockholders'
equity
|
2,240
|
|
2,506
|
Total liabilities and
stockholders' equity
|
$
16,889
|
|
$
17,124
|
WHIRLPOOL
CORPORATION
CONSOLIDATED
CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE PERIODS
ENDED SEPTEMBER 30
(Millions of
dollars)
|
|
|
Nine Months
Ended
|
|
2023
|
|
2022
|
Operating
activities
|
|
|
|
Net earnings
(loss)
|
$
(4)
|
|
$
93
|
Adjustments to
reconcile net earnings to cash provided by (used in) operating
activities:
|
|
|
|
Depreciation and
amortization
|
262
|
|
344
|
Impairment of goodwill
and other intangibles
|
—
|
|
384
|
(Gain) loss on sale and
disposal of businesses
|
286
|
|
348
|
Changes in assets and
liabilities:
|
|
|
|
Accounts
receivable
|
(359)
|
|
510
|
Inventories
|
(282)
|
|
(359)
|
Accounts
payable
|
(274)
|
|
(745)
|
Accrued advertising
and promotions
|
(140)
|
|
(114)
|
Accrued expenses and
current liabilities
|
50
|
|
22
|
Taxes deferred and
payable, net
|
161
|
|
(10)
|
Accrued pension and
postretirement benefits
|
(45)
|
|
(81)
|
Employee
compensation
|
57
|
|
(297)
|
Other
|
(34)
|
|
215
|
Cash provided by (used
in) operating activities
|
(322)
|
|
310
|
Investing
activities
|
|
|
|
Capital
expenditures
|
(338)
|
|
(334)
|
Proceeds from sale of
assets and businesses
|
9
|
|
76
|
Acquisition of
businesses, net of cash acquired
|
(14)
|
|
—
|
Cash held by divested
businesses
|
—
|
|
(75)
|
Cash provided by (used
in) investing activities
|
(343)
|
|
(333)
|
Financing
activities
|
|
|
|
Net proceeds from
borrowings of long-term debt
|
304
|
|
300
|
Net proceeds
(repayments) of long-term debt
|
(250)
|
|
(300)
|
Net proceeds
(repayments) from short-term borrowings
|
30
|
|
—
|
Dividends
paid
|
(290)
|
|
(295)
|
Repurchase of common
stock
|
—
|
|
(903)
|
Common stock
issued
|
4
|
|
3
|
Other
|
(1)
|
|
—
|
Cash provided by (used
in) financing activities
|
(203)
|
|
(1,195)
|
Effect of exchange rate
changes on cash, cash equivalents and restricted cash
|
28
|
|
(32)
|
Less: decrease in cash
classified as held for sale
|
5
|
|
—
|
Increase (decrease) in
cash, cash equivalents and restricted cash
|
(835)
|
|
(1,250)
|
Cash, cash equivalents
and restricted cash at beginning of year
|
1,958
|
|
3,044
|
Cash, cash equivalents
and restricted cash at end of period
|
$
1,123
|
|
$
1,794
|
SUPPLEMENTAL INFORMATION - CONSOLIDATED
FINANCIAL STATEMENTS RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL
MEASURES
(Millions of dollars except per share data)
(Unaudited)
We supplement the reporting of our financial information
determined under U.S. generally accepted accounting principles
(GAAP) with certain non-GAAP financial measures, some of which we
refer to as "ongoing" measures. These measures may include earnings
before interest and taxes (EBIT), EBIT margin, ongoing EBIT,
ongoing EBIT margin, ongoing earnings per diluted share, adjusted
effective tax rate, organic net sales, gross debt leverage (Gross
Debt/Ongoing EBITDA), return on invested capital (ROIC) and free
cash flow.
Ongoing measures exclude items that may not be indicative of, or
are unrelated to, results from our ongoing operations and provide a
better baseline for analyzing trends in our underlying
businesses.
Sales excluding foreign currency: Current period net
sales translated in functional currency, to U.S. dollars using the
applicable prior period's exchange rate compared to the applicable
prior period net sales. Management believes that sales excluding
foreign currency provides stockholders with a clearer basis to
assess our results over time, excluding the impact of exchange rate
fluctuations.
Organic net sales: Sales excluding the impact of
certain acquisitions or divestitures, and foreign currency.
Management believes that organic net sales provides stockholders
with a clearer basis to assess our results over time, excluding the
impact of exchange rate fluctuations and certain acquisitions
and/or divestitures.
Ongoing EBIT margin: Ongoing earnings before interest and
taxes divided by net sales. Ongoing measures exclude items that may
not be indicative of, or are unrelated to, results from our ongoing
operations and provide a better baseline for analyzing trends in
our underlying businesses.
Ongoing earnings per diluted share: Diluted net
earnings per share from continuing operations, adjusted to exclude
items that may not be indicative of, or are unrelated to, results
from our ongoing operations. Ongoing measures provide a better
baseline for analyzing trends in our underlying businesses.
Gross debt leverage: Gross debt to ongoing earnings
before interest, taxes, depreciation, and amortization (EBITDA)
ratio is gross debt outstanding, including long-term debt, current
maturities of long-term debt, and notes payable, divided by ongoing
EBITDA. Management believes that gross debt leverage provides
stockholders with a view of our ability to generate earnings
sufficient to service our debt.
Return on invested capital: Ongoing EBIT after taxes
divided by total invested capital, defined as total assets less
non-interest bearing current liabilities (NIBCLS). NIBCLS is
defined as current liabilities less current maturities of long-term
debt and notes payable. This ROIC definition may differ from other
companies' methods and therefore may not be comparable to those
used by other companies. Management believes that ROIC provides
stockholders with a view of capital efficiency, a key driver of
stockholder value creation.
Adjusted effective tax rate: Effective tax rate,
excluding pre-tax income and tax effect of certain unique items.
Management believes that adjusted tax rate provides stockholders
with a meaningful, consistent comparison of the Company's effective
tax rate, excluding the pre-tax income and tax effect of certain
unique items.
Free cash flow: Cash provided by (used in) operating
activities less capital expenditures. Management believes that free
cash flow provides stockholders with a relevant measure of
liquidity and a useful basis for assessing the company's ability to
fund its activities and obligations.
Whirlpool does not provide a non-GAAP reconciliation for its
forward-looking long-term value creation goals, such as organic net
sales, EBIT, free cash flow conversion, ROIC and gross debt
leverage, as these long-term management goals are not annual
guidance, and the reconciliation of these long-term measures would
rely on market factors and certain other conditions and assumptions
that are outside of the company's control.
We believe that these non-GAAP measures provide meaningful
information to assist investors and stockholders in understanding
our financial results and assessing our prospects for future
performance, and reflect an additional way of viewing aspects of
our operations that, when viewed with our GAAP financial measures,
provide a more complete understanding of our business. Because
non-GAAP financial measures are not standardized, it may not be
possible to compare these financial measures with other companies'
non-GAAP financial measures having the same or similar names. These
ongoing financial measures should not be considered in isolation or
as a substitute for reported net earnings available to Whirlpool
per diluted share, net earnings, net earnings available to
Whirlpool, net earnings margin, return on assets, net sales,
effective tax rate and cash provided by (used in) operating
activities, the most directly comparable GAAP financial
measures.
We also disclose segment EBIT as an important financial metric
used by the Company's Chief Operating Decision Maker to evaluate
performance and allocate resources in accordance with ASC 280 -
Segment Reporting.
GAAP net earnings available to Whirlpool per basic or diluted
share (as applicable) and ongoing earnings per diluted share are
presented net of tax, while individual adjustments in each
reconciliation are presented on a pre-tax basis; the income tax
impact line item aggregates the tax impact for these adjustments.
The tax impact of individual line item adjustments may not foot
precisely to the aggregate income tax impact amount, as each line
item adjustment may include non-taxable components. Historical
quarterly earnings per share amounts are presented based on a
normalized tax rate adjustment to reconcile quarterly tax rates to
full-year tax rate expectations. We strongly encourage investors
and stockholders to review our financial statements and
publicly-filed reports in their entirety and not to rely on any
single financial measure.
THIRD-QUARTER 2023 ONGOING EARNINGS BEFORE INTEREST AND TAXES
AND ONGOING EARNINGS PER DILUTED SHARE
The reconciliation provided below reconciles the non-GAAP
financial measures ongoing earnings before interest and taxes and
ongoing earnings per diluted share, with the most directly
comparable GAAP financial measures, net earnings (loss) available
to Whirlpool and net earnings (loss) per diluted share available to
Whirlpool, for the three months ended September 30, 2023. Net earnings (loss) margin is
calculated by dividing net earnings (loss) available to Whirlpool
by net sales. Ongoing EBIT margin is calculated by dividing ongoing
EBIT by net sales. EBIT margin is calculated by dividing EBIT by
net sales. The earnings per diluted share GAAP measure and ongoing
measure are presented net of tax, while each adjustment is
presented on a pre-tax basis. Our third-quarter GAAP tax rate was
49.4%. The aggregate income tax impact of the taxable components of
each adjustment is presented in the income tax impact line item at
our third-quarter adjusted tax rate (non-GAAP) of (33.0)%.
|
Three Months
Ended
|
Earnings Before
Interest & Taxes Reconciliation:
|
September 30,
2023
|
Net earnings (loss)
available to Whirlpool
|
$
83
|
Net earnings (loss)
available to noncontrolling interests
|
2
|
Income tax expense
(benefit)
|
86
|
Interest
expense
|
95
|
Earnings before
interest & taxes
|
$
266
|
Net sales
|
$
4,926
|
Net earnings (loss)
margin
|
1.7 %
|
|
Results
classification
|
|
Earnings before
interest & taxes
|
|
Earnings per
diluted share
|
Reported
measure
|
|
|
$
266
|
|
$
1.53
|
Impact of M&A
transactions(a)
|
(Gain) loss on sale
and
disposal of businesses &
Selling, general and
administrative
|
|
56
|
|
1.02
|
Total income tax
impact
|
|
|
|
|
0.34
|
Normalized tax rate
adjustment(c)
|
|
|
|
|
2.56
|
Ongoing
measure
|
|
|
$
322
|
|
$
5.45
|
Net sales
|
|
|
$
4,926
|
|
|
Ongoing EBIT
margin
|
|
|
6.5 %
|
|
|
Note: Numbers may not
reconcile due to rounding
|
THIRD-QUARTER 2022 ONGOING EARNINGS BEFORE INTEREST AND TAXES
AND ONGOING EARNINGS PER DILUTED SHARE
The reconciliation provided below reconciles the non-GAAP
financial measures ongoing earnings before interest and taxes and
ongoing earnings per diluted share, with the most directly
comparable GAAP financial measures, net earnings (loss) available
to Whirlpool and net earnings (loss) per diluted share available to
Whirlpool, for the three months ended September 30, 2022. Net earnings (loss) margin is
calculated by dividing net earnings (loss) available to Whirlpool
by net sales. Ongoing EBIT margin is calculated by dividing ongoing
EBIT by net sales. EBIT margin is calculated by dividing EBIT by
net sales. The earnings per diluted share GAAP measure and ongoing
measure are presented net of tax, while each adjustment is
presented on a pre-tax basis. Our third-quarter GAAP tax rate was
26.5%. The aggregate income tax impact of the taxable components of
each adjustment is presented in the income tax impact line item at
our third-quarter adjusted tax rate (non-GAAP) of (10.8)%.
|
Three Months
Ended
|
Earnings Before
Interest & Taxes Reconciliation:
|
September 30,
2022
|
Net earnings (loss)
available to Whirlpool
|
$
143
|
Net earnings (loss)
available to noncontrolling interests
|
2
|
Income tax expense
(benefit)
|
53
|
Interest
expense
|
40
|
Earnings before
interest & taxes
|
$
238
|
Net sales
|
$
4,784
|
Net earnings (loss)
margin
|
3.0 %
|
|
Results
classification
|
|
Earnings before
interest & taxes
|
|
Earnings per
diluted share
|
Reported
measure
|
|
|
$
238
|
|
$
2.60
|
Impact of M&A
transactions(a)
|
Selling, general
and
administrative
|
|
27
|
|
0.49
|
Total income tax
impact
|
|
|
|
|
0.05
|
Normalized tax rate
adjustment(c)
|
|
|
|
|
1.35
|
Ongoing
measure
|
|
|
$
265
|
|
$
4.49
|
Net sales
|
|
|
$
4,784
|
|
|
Ongoing EBIT
margin
|
|
|
5.5 %
|
|
|
Note: Numbers may not
reconcile due to rounding
|
SECOND-QUARTER 2023 ONGOING EARNINGS BEFORE INTEREST AND
TAXES AND ONGOING EARNINGS PER DILUTED SHARE
The reconciliation provided below reconciles the non-GAAP
financial measures ongoing earnings before interest and taxes and
ongoing earnings per diluted share, with the most directly
comparable GAAP financial measures, net earnings (loss) available
to Whirlpool and net earnings (loss) per diluted share available to
Whirlpool, for the three months ended June
30, 2023. Net earnings (loss) margin is calculated by
dividing net earnings (loss) available to Whirlpool by net sales.
Ongoing EBIT margin is calculated by dividing ongoing EBIT by net
sales. EBIT margin is calculated by dividing EBIT by net sales. The
earnings per diluted share GAAP measure and ongoing measure are
presented net of tax, while each adjustment is presented on a
pre-tax basis. Our second-quarter GAAP tax rate was 55.9%. The
aggregate income tax impact of the taxable components of each
adjustment is presented in the income tax impact line item at our
second-quarter adjusted tax rate (non-GAAP) of 10.9%.
|
Three Months
Ended
|
Earnings Before
Interest & Taxes Reconciliation:
|
June 30,
2023
|
Net earnings (loss)
available to Whirlpool
|
$
85
|
Net earnings (loss)
available to noncontrolling interests
|
2
|
Income tax expense
(benefit)
|
114
|
Interest
expense
|
89
|
Earnings before
interest & taxes
|
$
290
|
Net sales
|
$
4,792
|
Net earnings (loss)
margin
|
1.8 %
|
|
Results
classification
|
|
Earnings before
interest & taxes
|
|
Earnings per
diluted share
|
Reported
measure
|
|
|
$
290
|
|
$
1.55
|
Impact of M&A
transactions(a)
|
(Gain) loss on sale
and
disposal of businesses &
Selling, general and
administrative
|
|
26
|
|
0.47
|
Legacy EMEA legal
matters(b)
|
Interest and sundry
(income) expense
|
|
36
|
|
0.65
|
Total income tax
impact
|
|
|
|
|
(0.12)
|
Normalized tax rate
adjustment(c)
|
|
|
|
|
1.66
|
Ongoing
measure
|
|
|
$
352
|
|
$
4.21
|
Net sales
|
|
|
$
4,792
|
|
|
Ongoing EBIT
margin
|
|
|
7.3 %
|
|
|
Note: Numbers may not
reconcile due to rounding
|
FULL-YEAR 2023 OUTLOOK FOR ONGOING EARNINGS BEFORE INTEREST
AND TAXES AND ONGOING EARNINGS PER DILUTED SHARE
The reconciliation provided below reconciles the non-GAAP
financial measures ongoing earnings before interest and taxes and
ongoing earnings per diluted share, with the most directly
comparable GAAP financial measures, net earnings available to
Whirlpool and net earnings per diluted share available to
Whirlpool, for the twelve months ending December 31, 2023.
Ongoing EBIT margin is calculated by dividing ongoing EBIT by net
sales. EBIT margin is calculated by dividing EBIT by net sales. The
earnings per diluted share GAAP measure and ongoing measure are
presented net of tax, while each adjustment is presented on a
pre-tax basis. Our anticipated full-year GAAP tax rate is
approximately 0.0% to 5.0%. The aggregate income tax impact of the
taxable components of each adjustment is presented in the income
tax impact line item at our anticipated full-year adjusted tax
(non-GAAP) rate of approximately (5.0)% to 0.0%.
|
|
|
Twelve Months
Ending
|
|
|
|
December 31,
2023
|
|
Results
classification
|
|
Earnings before
interest & taxes*
|
|
Earnings per
diluted share
|
Reported
measure
|
|
|
$
882
|
|
~$9.00
|
Impact of M&A
transactions(a)
|
(Gain) loss on sale
and
disposal of businesses &
Selling, general and
administrative
|
|
250
|
|
4.52
|
Legacy EMEA legal
matters(b)
|
Interest and sundry
(income) expense
|
|
98
|
|
1.78
|
Total income tax
impact
|
|
|
|
|
0.19
|
Normalized tax rate
adjustment(c)
|
|
|
|
|
0.51
|
Ongoing
measure
|
|
|
$
1,230
|
|
~$16.00
|
Note: Numbers may not
reconcile due to rounding
|
*Earnings Before Interest & Taxes (EBIT) is a non-GAAP
measure. The Company does not provide a forward-looking
quantitative reconciliation of EBIT to the most directly comparable
GAAP financial measure, net earnings available to Whirlpool,
because the net earnings available to noncontrolling interests item
of such reconciliation -- which has historically represented a
relatively insignificant amount of the Company's overall net
earnings -- implicates the Company's projections regarding the
earnings of the Company's non wholly-owned subsidiaries and joint
ventures that cannot be quantified precisely or without
unreasonable efforts.
FOOTNOTES
|
|
|
a.
|
IMPACT OF M&A
TRANSACTIONS - On January 16, 2023, we signed a contribution
agreement to contribute our European major domestic appliance
business into a newly formed entity with Arçelik. In connection
with the transaction, we recorded a non-cash loss on disposal of
$286 million for the nine months ended September 30, 2023, of
which $46 million was recorded during the third quarter, and
$18 million was recorded in the second quarter, resulting in a
total loss of $1,807 million for the transaction.
|
|
|
|
Additionally, we have
incurred other unique transaction related costs related to
portfolio transformation for a total of $10 million for the
three months ended September 30, 2023 and $8 million for the three
months ended June 30, 2023. These transaction costs are recorded in
Selling, General and Administrative expenses on our Consolidated
Condensed Statements of Comprehensive Income (Loss).
|
|
|
|
During the third
quarter of 2022, the loss from disposal of our Russia business was
adjusted by an immaterial amount resulting in a final loss amount
of $348 million for the nine months ended September 30, 2022.
Additionally, we incurred unique transaction related costs of $25
million related to portfolio transformation and EMEA strategic
assessment expenses for the three months ended September 30,
2022
|
|
|
b.
|
LEGACY EMEA LEGAL
MATTERS - The aggregate amount accrued by the Company related
to the France Competition Investigation and other legacy legal
matters of our European major domestic appliance business was $36
million and $98 million, for the three and six months ended June
30, 2023, respectively.
|
|
|
c.
|
NORMALIZED TAX RATE
ADJUSTMENT - During the third quarter of 2023, the Company
calculated ongoing earnings per share using an adjusted tax rate of
(33.0)%, which excludes the non-tax deductible impact of M&A
transactions of approximately $25 million recorded in the
third quarter of 2023 and which reflects certain expected tax
benefits related to legal entity restructuring transactions that
are expected to be completed in the fourth quarter of 2023. The
Company expects these restructuring steps to cause our full-year
adjusted effective tax rate to be between (5.0)% to 0%. During
the third quarter of 2022, the Company calculated ongoing earnings
per share using an adjusted tax rate of (10.8)% to reconcile to our
anticipated full-year adjusted 2022 effective tax rate between
14.0% and 16.0%. During the second quarter of 2023, the Company
calculated ongoing earnings per share using an adjusted tax rate of
10.9%, which excludes the non-tax deductible impact of M&A
transactions of approximately $26 million recorded in the second
quarter of 2023, to reconcile to our anticipated full-year
ongoing effective tax rate between 10.0% and 15.0%.
|
FREE CASH FLOW
Free cash flow is cash provided by (used in) operating
activities after capital expenditures. The reconciliation provided
below reconciles nine months ended September
30, 2023 and 2022 and 2023 full-year free cash flow with
cash provided by (used in) operating activities, the most directly
comparable GAAP financial measure. Free cash flow as a percentage
of net sales is calculated by dividing free cash flow by net
sales.
|
|
|
|
|
|
|
Nine Months
Ended
|
|
|
|
September
30,
|
|
|
(millions of
dollars)
|
2023
|
|
2022
|
|
2023
Outlook
|
Cash provided by (used
in) operating activities
|
$(322)
|
|
$310
|
|
~$1,100
|
Capital
expenditures
|
(338)
|
|
(334)
|
|
~(600)
|
Free cash
flow
|
$(660)
|
|
$(24)
|
|
~$500
|
|
|
|
|
|
|
Cash provided by (used
in) investing activities*
|
(343)
|
|
(333)
|
|
|
Cash provided by (used
in) financing activities*
|
(203)
|
|
(1,195)
|
|
|
Free cash flow is cash provided by (used in) operating
activities after capital expenditures. The reconciliation provided
below reconciles twelve months ended December 31, 2022 full-year free cash flow with
cash provided by (used in) operating activities, the most directly
comparable GAAP financial measure. Free cash flow as a percentage
of net sales is calculated by dividing free cash flow by net
sales.
|
|
|
Twelve Months
Ended
|
|
December 31,
|
(millions of
dollars)
|
2022
|
Cash provided by (used
in) operating activities
|
$1,390
|
Capital
expenditures
|
(570)
|
Free cash
flow
|
$820
|
|
|
Cash provided by (used
in) investing activities*
|
(3,568)
|
Cash provided by (used
in) financing activities*
|
1,206
|
*Financial guidance on a GAAP basis for cash provided by
(used in) financing activities and cash provided by (used in)
investing activities has not been provided because in order to
prepare any such estimate or projection, the Company would need to
rely on market factors and certain other conditions and assumptions
that are outside of its control.
View original content to download
multimedia:https://www.prnewswire.com/news-releases/whirlpool-announces-third-quarter-results-europe-transaction-clears-major-milestone-operational-priorities-on-track-and-delivering-substantial-cost-take-out-301967517.html
SOURCE Whirlpool Corporation