BENTON HARBOR, Mich.,
Oct. 21, 2021 /PRNewswire/
-- Whirlpool Corporation (NYSE: WHR), committed to being the
best global kitchen and laundry company, in constant pursuit of
improving life at home, today reported financial results for the
third quarter of 2021.
|
|
"We are announcing
our increased long-term value creation targets as well as
increasing our earnings per share guidance to ~$26.25," said Marc
Bitzer, chairman and chief executive officer of Whirlpool
Corporation. "We have, and will continue to deliver strong
performance in a challenging environment."
MARC BITZER
|
LONG-TERM VALUE CREATION GOALS
Reconciliations to the
equivalent GAAP measures -- net sales, net earnings, cash provided
by (used in) operating activities, and return on assets -- for the
metrics below are not provided as they rely on market factors and
other assumptions outside of our control.
|
Long-Term
Value
Creation Goals
(Annual
Expectation)
|
Sales
(Annual Organic
Net Sales
Growth Excluding Currency)
|
EBIT
(Ongoing Earnings Before
Interest and Tax, % of Net
Sales)
|
Adjusted
FCF
(Adjusted Free Cash Flow as
% of Net Sales)
|
ROIC
(Return of Invested
Capital)
|
|
Updated
|
5-6%
|
11-12%
|
7-8%
|
15-16%
|
|
Previous
|
~3%
|
~10%
|
6%+
|
12-14%
|
- Strong brand portfolio and compelling innovation pipeline
position us to capitalize on positive demand trends across housing,
increased appliance usage, e-commerce and D2C
- Low fixed cost base structurally positioned to expand margins
and grow profitably
- Earnings growth and strong working capital discipline will
drive delivery of adjusted free cash flow and our continued
commitment to create shareholder value
KEY RESULTS
|
Third-Quarter
Results
|
2021
|
2020(5)
|
Change
|
|
Net sales
($M)
|
$5,488
|
$5,291
|
$197
|
3.7%
|
|
Net sales excluding
currency ($M)
|
$5,444
|
$5,291
|
$153
|
2.9%
|
|
GAAP net earnings
available to Whirlpool ($M)
|
$471
|
$392
|
$79
|
20.2%
|
|
Ongoing
EBIT(2) ($M)
|
$608
|
$628
|
$(20)
|
(3.2)%
|
|
GAAP earnings per
diluted share
|
$7.51
|
$6.19
|
$1.32
|
21.3%
|
|
Ongoing earnings per
diluted share(1)
|
$6.68
|
$6.83
|
$(0.15)
|
(2.2)%
|
CASH FLOW
|
Full-Year Adjusted
Cash Flow
|
2021
YTD
|
2020
YTD(5)
|
Change
|
|
Cash provided by
(used in) operating activities ($M)
|
$1,294
|
$407
|
$887
|
|
Adjusted free cash
flow(4) ($M)
|
$1,296
|
$170
|
$1,126
|
QUARTERLY HIGHLIGHTS
- Delivered Q3 GAAP earnings per diluted share of $7.51 and ongoing (non-GAAP) earnings per diluted
share(1) of $6.68, both
driven by strong top-line growth and cost-based pricing actions;
GAAP earnings per diluted share also impacted by the gain resulting
from our additional investment in Elica PB India(7)
- Significant cash generated by operating activities of
$1,294 million driven by strong
earnings; adjusted free cash flow(4) of $1,296 million driven by strong earnings and
positively impacted by the divestitures of Whirlpool
China(6) and Turkey
subsidiary
|
|
|
"We continue to
strengthen our balance sheet with exceptional cash generation,"
said Jim Peters, chief financial officer of Whirlpool Corporation.
"We are on track to deliver yet another record ongoing earnings per
share and expect to return over $1.2 billion to shareholders in 2021. "
|
|
JIM
PETERS
|
REGIONAL REVIEW
|
North
America
|
Q3
2021
|
Q3
2020(5)
|
Change
|
Change
excluding
currency
impact
|
|
Net sales
($M)
|
$3,113
|
$2,961
|
5.1%
|
4.9%
|
|
EBIT(3)
($M)
|
$553
|
$560
|
(1.3)%
|
-
|
- Top-line growth driven by strong execution of cost-based
pricing actions while elevated supply constraints remain
- EBIT margin(3) of 17.7 percent, compared to 18.9
percent in the same prior-year period, impacted by inflation,
partially offset by positive price/mix
|
Europe, Middle
East and Africa
|
Q3
2021
|
Q3
2020
|
Change
|
Change
excluding
currency
impact
|
|
Net sales
($M)
|
$1,256
|
$1,258
|
(0.2)%
|
(1.6)%
|
|
EBIT(3)
($M)
|
$28
|
$43
|
(35.4)%
|
-
|
- Stable year-over-year top-line driven by cost-based pricing
actions offset by supply constraints
- EBIT margin(3) of 2.2 percent, compared to 3.4
percent in the same prior-year period, impacted by inflation,
partially offset by cost-based pricing actions
|
Latin
America
|
Q3
2021
|
Q3
2020
|
Change
|
Change
excluding
currency
impact
|
|
Net sales
($M)
|
$841
|
$719
|
17.0%
|
14.5%
|
|
EBIT(3)
($M)
|
$73
|
$77
|
(5.2)%
|
-
|
- Very strong top-line growth driven by cost-based pricing
actions and strong industry growth in Mexico
- Strong EBIT margin(3) of 8.7 percent, compared to
10.7 percent in the same prior-year period, impacted by inflation
and supply constraints, partially offset by cost-based pricing
actions
|
Asia
|
Q3
2021
|
Q3
2020
|
Change
|
Change
excluding
currency
impact
|
|
Net sales
($M)
|
$278
|
$353
|
(21.3)%
|
(21.5)%
|
|
EBIT(3)
($M)
|
$24
|
$6
|
269.1%
|
-
|
- Top-line decline driven by Whirlpool China
divestiture(6)
- EBIT margin(3) of 8.6 percent, compared to 1.8
percent in the same prior-year period, primarily driven by
cost-based pricing actions and Whirlpool China partial
divestiture(6)
FULL-YEAR 2021 OUTLOOK
- Expect full-year 2021 net sales growth of ~13 percent
- Increased GAAP earnings per diluted share to ~$27.80 from ~$26.95, driven by the gain resulting from our
additional investment in Elica PB India(7) and lower
restructuring charges
- Increased ongoing earnings per diluted share(1) to
~$26.25
- Cash provided by operating activities of $1.95 billion and adjusted free cash
flow(4) of $1.70 billion
remain unchanged
- GAAP tax rate of 22 to 24 percent and adjusted tax rate
(non-GAAP) of 24 to 26 percent remain unchanged
|
(1)
|
A reconciliation
of ongoing earnings per diluted share, a non-GAAP financial
measure, to reported net earnings per diluted share available to
Whirlpool and other important information, appears
below.
|
|
(2)
|
A reconciliation
of earnings before interest and taxes (EBIT) and ongoing EBIT,
non-GAAP financial measures, to reported net earnings available to
Whirlpool, and a reconciliation of EBIT margin and ongoing EBIT
margin, non-GAAP financial measures, to net earnings margin and
other important information, appears below.
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|
(3)
|
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 $(48) million and $(101)
million for the third quarters of 2021 and 2020,
respectively.
|
|
(4)
|
A reconciliation
of adjusted free cash flow, a non-GAAP financial measure, to cash
provided by (used in) operating activities and other important
information, appears below.
|
|
(5)
|
As adjusted
reporting - effective January 1, 2021, the Company changed its
accounting principle for inventory valuation for inventories
located in the U.S. from a last-in, first-out ("LIFO") basis to a
first-in, first-out ("FIFO") basis. All prior periods presented
have been retrospectively adjusted to apply the effects of the
change. The information in the tables herein have been updated to
reflect the retrospective accounting change. For more information
see Notes 1 and 4 to Whirlpool's Quarterly Report on Form 10-Q for
the quarter ended March 31, 2021.
|
|
(6)
|
Partial tender
offer by Galanz for majority ownership of the Whirlpool China
business was closed May 6, 2021.
|
|
(7)
|
Gain (loss) on
previously held equity interest - During the third quarter of 2021,
Whirlpool Corporation acquired an additional 38% equity interest in
Elica PB India Private Limited (Elica PB India) for $57 million,
which resulted in a controlling equity ownership of approximately
87%. The previously held equity interest of 49% in Elica PB India
was remeasured at fair value of $74 million on the acquisition
date, which resulted in a gain of $42 million. This gain was
recorded within Interest & sundry (income) expense during the
third quarter.
|
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 and Yummly. In 2020, the company
reported approximately $19 billion in
annual sales, 78,000 employees and 57 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") that speak only as of this date. Whirlpool disclaims
any obligation to update these statements. Forward-looking
statements in this document may include, but are not limited to,
statements regarding future financial results, long-term value
creation goals, restructuring expectations, productivity, raw
material prices and the impact of COVID-19 on our operations. Many
risks, contingencies and uncertainties could cause actual results
to differ materially from Whirlpool's forward-looking statements.
Among these factors are: (1) COVID-19 pandemic-related business
disruptions and economic uncertainty; (2) 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; (3) Whirlpool's ability to
maintain or increase sales to significant trade customers and the
ability of these trade customers to maintain or increase market
share; (4) Whirlpool's ability to maintain its reputation and brand
image; (5) the ability of Whirlpool to achieve its business
objectives and leverage its global operating platform, and
accelerate the rate of innovation; (6) Whirlpool's ability to
understand consumer preferences and successfully develop new
products; (7) Whirlpool's ability to obtain and protect
intellectual property rights; (8) acquisition and
investment-related risks, including risks associated with our past
acquisitions, and risks associated with our presence in emerging
markets; (9) risks related to our international operations,
including changes in foreign regulations, regulatory compliance and
disruptions arising from political, legal and economic instability;
(10) information technology system failures, data security
breaches, data privacy compliance, network disruptions, and
cybersecurity attacks; (11) product liability and product recall
costs; (12) the ability of suppliers of critical parts, components
and manufacturing equipment to deliver sufficient quantities to
Whirlpool in a timely and cost-effective manner; (13) our ability
to attract, develop and retain executives and other qualified
employees; (14) the impact of labor relations; (15) fluctuations in
the cost of key materials (including steel, resins, copper and
aluminum) and components and the ability of Whirlpool to offset
cost increases; (16) Whirlpool's ability to manage foreign currency
fluctuations; (17) impacts from goodwill impairment and related
charges; (18) triggering events or circumstances impacting the
carrying value of our long-lived assets; (19) inventory and other
asset risk; (20) health care cost trends, regulatory changes and
variations between results and estimates that could increase future
funding obligations for pension and postretirement benefit plans;
(21) changes in LIBOR, or replacement of LIBOR with an alternative
reference rate; (22) 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; (23) the effects and costs of governmental investigations or
related actions by third parties; (24) changes in the legal and
regulatory environment including environmental, health and safety
regulations, and taxes and tariffs; and (25) the uncertain global
economy and changes in economic conditions which affect demand for
our products. 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. World's leading kitchen and laundry appliance company
claim is based on the most recently available publicly reported
annual product sales, parts, and support revenues.
|
WHIRLPOOL
CORPORATION
|
|
CONSOLIDATED
CONDENSED STATEMENTS OF INCOME (UNAUDITED)
|
|
FOR THE PERIODS
ENDED SEPTEMBER 30
|
|
(Millions of
dollars, except per share data)
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
Net
sales
|
$
|
5,488
|
|
|
$
|
5,291
|
|
|
$
|
16,170
|
|
|
$
|
13,658
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
Cost of products
sold
|
4,380
|
|
|
4,143
|
|
|
12,823
|
|
|
11,182
|
|
|
Gross
margin
|
1,108
|
|
|
1,148
|
|
|
3,347
|
|
|
2,476
|
|
|
Selling, general and
administrative
|
524
|
|
|
513
|
|
|
1,526
|
|
|
1,354
|
|
|
Intangible
amortization
|
10
|
|
|
16
|
|
|
37
|
|
|
46
|
|
|
Restructuring
costs
|
7
|
|
|
63
|
|
|
35
|
|
|
186
|
|
|
(Gain) loss on sale
and disposal of businesses
|
15
|
|
|
(7)
|
|
|
(105)
|
|
|
(7)
|
|
|
Operating
profit
|
552
|
|
|
563
|
|
|
1,854
|
|
|
897
|
|
|
Other (income)
expense
|
|
|
|
|
|
|
|
|
Interest and sundry
(income) expense
|
(78)
|
|
|
(22)
|
|
|
(139)
|
|
|
(38)
|
|
|
Interest
expense
|
44
|
|
|
51
|
|
|
134
|
|
|
142
|
|
|
Earnings before income
taxes
|
586
|
|
|
534
|
|
|
1,859
|
|
|
793
|
|
|
Income tax expense
(benefit)
|
100
|
|
|
141
|
|
|
353
|
|
|
231
|
|
|
Net
earnings
|
486
|
|
|
393
|
|
|
1,506
|
|
|
562
|
|
|
Less: Net earnings
(loss) available to noncontrolling
interests
|
15
|
|
|
1
|
|
|
21
|
|
|
(14)
|
|
|
Net earnings available
to Whirlpool
|
$
|
471
|
|
|
$
|
392
|
|
|
$
|
1,485
|
|
|
$
|
576
|
|
|
Per share of
common stock
|
|
|
|
|
|
|
|
|
Basic net earnings
available to Whirlpool
|
$
|
7.56
|
|
|
$
|
6.27
|
|
|
$
|
23.67
|
|
|
$
|
9.21
|
|
|
Diluted net earnings
available to Whirlpool
|
$
|
7.51
|
|
|
$
|
6.19
|
|
|
$
|
23.47
|
|
|
$
|
9.14
|
|
|
Dividends
declared
|
$
|
1.40
|
|
|
$
|
1.20
|
|
|
$
|
4.05
|
|
|
$
|
3.60
|
|
|
Weighted-average
shares outstanding (in millions)
|
|
|
|
|
|
|
|
|
Basic
|
62.2
|
|
|
62.6
|
|
|
62.7
|
|
|
62.6
|
|
|
Diluted
|
62.7
|
|
|
63.3
|
|
|
63.2
|
|
|
63.1
|
|
|
WHIRLPOOL
CORPORATION
|
|
CONSOLIDATED
CONDENSED BALANCE SHEETS
|
|
(Millions of
dollars, except share data)
|
|
|
September 30,
2021
|
|
December 31,
2020
|
|
(Unaudited)
|
|
|
|
Assets
|
|
|
|
|
Current
assets
|
|
|
|
|
Cash and cash
equivalents
|
$
|
2,875
|
|
|
$
|
2,924
|
|
|
Accounts receivable,
net of allowance of $103 and $132, respectively
|
3,187
|
|
|
3,109
|
|
|
Inventories
|
2,876
|
|
|
2,301
|
|
|
Prepaid and other
current assets
|
788
|
|
|
795
|
|
|
Total current
assets
|
9,726
|
|
|
9,129
|
|
|
Property, net of
accumulated depreciation of $6,627 and $6,780,
respectively
|
2,713
|
|
|
3,199
|
|
|
Right of use
assets
|
973
|
|
|
989
|
|
|
Goodwill
|
2,492
|
|
|
2,496
|
|
|
Other intangibles,
net of accumulated amortization of $519 and $673,
respectively
|
1,993
|
|
|
2,194
|
|
|
Deferred income
taxes
|
2,061
|
|
|
2,189
|
|
|
Other noncurrent
assets
|
436
|
|
|
240
|
|
|
Total
assets
|
$
|
20,394
|
|
|
$
|
20,436
|
|
|
Liabilities and
stockholders' equity
|
|
|
|
|
Current
liabilities
|
|
|
|
|
Accounts
payable
|
$
|
5,127
|
|
|
$
|
4,834
|
|
|
Accrued
expenses
|
696
|
|
|
637
|
|
|
Accrued advertising
and promotions
|
810
|
|
|
831
|
|
|
Employee
compensation
|
587
|
|
|
648
|
|
|
Notes
payable
|
12
|
|
|
12
|
|
|
Current maturities of
long-term debt
|
298
|
|
|
298
|
|
|
Other current
liabilities
|
761
|
|
|
1,070
|
|
|
Total current
liabilities
|
8,291
|
|
|
8,330
|
|
|
Noncurrent
liabilities
|
|
|
|
|
Long-term
debt
|
4,961
|
|
|
5,059
|
|
|
Pension
benefits
|
441
|
|
|
516
|
|
|
Postretirement
benefits
|
153
|
|
|
166
|
|
|
Lease
liabilities
|
813
|
|
|
838
|
|
|
Other noncurrent
liabilities
|
606
|
|
|
732
|
|
|
Total noncurrent
liabilities
|
6,974
|
|
|
7,311
|
|
|
Stockholders'
equity
|
|
|
|
|
Common stock, $1 par
value, 250 million shares authorized, 114 million and
113 million shares issued, respectively, and 61 million and 63
million shares
outstanding, respectively
|
114
|
|
|
113
|
|
|
Additional paid-in
capital
|
3,011
|
|
|
2,923
|
|
|
Retained
earnings
|
9,957
|
|
|
8,725
|
|
|
Accumulated other
comprehensive loss
|
(2,412)
|
|
|
(2,811)
|
|
|
Treasury stock, 53
million and 50 million shares, respectively
|
(5,706)
|
|
|
(5,065)
|
|
|
Total Whirlpool
stockholders' equity
|
4,964
|
|
|
3,885
|
|
|
Noncontrolling
interests
|
165
|
|
|
910
|
|
|
Total stockholders'
equity
|
5,129
|
|
|
4,795
|
|
|
Total liabilities and
stockholders' equity
|
$
|
20,394
|
|
|
$
|
20,436
|
|
|
WHIRLPOOL
CORPORATION
|
|
CONSOLIDATED
CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
|
|
FOR THE PERIODS
ENDED SEPTEMBER 30
|
|
(Millions of
dollars)
|
|
|
Nine Months
Ended
|
|
2021
|
|
2020
|
|
|
|
|
|
Operating
activities
|
|
|
|
|
Net
earnings
|
$
|
1,506
|
|
|
$
|
562
|
|
|
Adjustments to
reconcile net earnings to cash provided by (used in) operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
378
|
|
|
414
|
|
|
(Gain) loss on sale
and disposal of businesses
|
(105)
|
|
|
—
|
|
|
(Gain) loss on
previously held equity interest
|
(42)
|
|
|
—
|
|
|
Changes in assets and
liabilities:
|
|
|
|
|
Accounts
receivable
|
(289)
|
|
|
(663)
|
|
|
Inventories
|
(785)
|
|
|
168
|
|
|
Accounts
payable
|
617
|
|
|
(162)
|
|
|
Accrued advertising
and promotions
|
20
|
|
|
(179)
|
|
|
Accrued expenses and
current liabilities
|
207
|
|
|
(163)
|
|
|
Taxes deferred and
payable, net
|
50
|
|
|
88
|
|
|
Accrued pension and
postretirement benefits
|
(89)
|
|
|
(55)
|
|
|
Employee
compensation
|
10
|
|
|
137
|
|
|
Other
|
(184)
|
|
|
260
|
|
|
Cash provided by (used
in) operating activities
|
1,294
|
|
|
407
|
|
|
Investing
activities
|
|
|
|
|
Capital
expenditures
|
(306)
|
|
|
(251)
|
|
|
Proceeds from sale of
assets and businesses
|
299
|
|
|
27
|
|
|
Acquisition of
businesses, net of cash acquired
|
(46)
|
|
|
—
|
|
|
Cash held by divested
businesses
|
(393)
|
|
|
—
|
|
|
Cash provided by (used
in) investing activities
|
(446)
|
|
|
(224)
|
|
|
Financing
activities
|
|
|
|
|
Net proceeds from
borrowings of long-term debt
|
300
|
|
|
1,031
|
|
|
Net proceeds
(repayments) of long-term debt
|
(300)
|
|
|
(568)
|
|
|
Net proceeds
(repayments) from short-term borrowings
|
1
|
|
|
1,405
|
|
|
Dividends
paid
|
(253)
|
|
|
(232)
|
|
|
Repurchase of common
stock
|
(641)
|
|
|
(121)
|
|
|
Common stock
issued
|
76
|
|
|
16
|
|
|
Other
|
(39)
|
|
|
—
|
|
|
Cash provided by (used
in) financing activities
|
(856)
|
|
|
1,531
|
|
|
Effect of exchange
rate changes on cash, cash equivalents and restricted
cash
|
(51)
|
|
|
(125)
|
|
|
Increase (decrease)
in cash, cash equivalents and restricted cash
|
(59)
|
|
|
1,589
|
|
|
Cash, cash
equivalents and restricted cash at beginning of year
|
2,934
|
|
|
1,952
|
|
|
Cash, cash
equivalents and restricted cash at end of period
|
$
|
2,875
|
|
|
$
|
3,541
|
|
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, including earnings before interest
and taxes (EBIT), EBIT margin, ongoing EBIT, ongoing EBIT margin,
ongoing earnings per diluted share, organic net sales, adjusted
effective tax rate, sales excluding currency and adjusted 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 is calculated by
translating the current period net sales, in functional currency,
to U.S. dollars using the prior-year period's exchange rate
compared to the prior-year 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. Management believes that adjusted
tax rate provides investors with a meaningful, consistent
comparison of the Company's effective tax rate, excluding the
pre-tax income and tax effect of certain unique items. Management
believes that adjusted free cash flow provides investors and
stockholders with a relevant measure of liquidity and a useful
basis for assessing the company's ability to fund its activities
and obligations. The Company provides adjusted free cash flow
related metrics, such as adjusted free cash flow as a percentage of
net sales, as long-term management goals, not an element of its
annual financial guidance, and as such does not provide a
reconciliation of adjusted free cash flow to cash provided by (used
in) operating activities, the most directly comparable GAAP
measure, for these long-term goal metrics. Whirlpool does not
provide a non-GAAP reconciliation for its forward-looking long-term
value creation goals, such as organic net sales, EBIT, adjusted
free cash flow conversion, ROIC and gross debt/EBITDA, 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, 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 important financial metrics 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
diluted share 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 2021 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 three months ended September 30, 2021. Net earnings margin is
calculated by dividing net earnings 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
17.1%. 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 25.0%.
|
Three Months
Ended
|
|
Earnings Before
Interest & Taxes Reconciliation:
|
September 30,
2021
|
|
Net earnings (loss)
available to Whirlpool
|
$
|
471
|
|
|
Net earnings (loss)
available to noncontrolling interests
|
15
|
|
|
Income tax expense
(benefit)
|
100
|
|
|
Interest
expense
|
44
|
|
|
Earnings before
interest & taxes
|
$
|
630
|
|
|
Net sales
|
$
|
5,488
|
|
|
Net earnings
margin
|
8.6
|
%
|
|
Results
classification
|
|
Earnings before
interest & taxes
|
|
Earnings per
diluted share
|
|
Reported
measure
|
|
|
$
|
630
|
|
|
$
|
7.51
|
|
|
Restructuring
costs(a)
|
Restructuring
costs
|
|
7
|
|
|
0.10
|
|
|
(Gain) loss on sale
and
disposal of businesses(b)
|
(Gain) loss on sale
and
disposal of businesses
|
|
13
|
|
|
0.21
|
|
|
(Gain) loss on
previously
held equity interest(c)
|
(Gain) loss on
previously
held equity interest
|
|
(42)
|
|
|
(0.50)
|
|
|
Income tax
impact
|
|
|
|
|
0.05
|
|
|
Normalized tax
rate
adjustment(d)
|
|
|
|
|
(0.69)
|
|
|
Ongoing
measure
|
|
|
$
|
608
|
|
|
$
|
6.68
|
|
|
Net sales
|
|
|
$
|
5,488
|
|
|
|
|
Ongoing EBIT
margin
|
|
|
11.1
|
%
|
|
|
|
|
Note: Numbers may not
reconcile due to rounding
|
THIRD-QUARTER 2020 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 three months ended September 30, 2020. Net earnings margin is
calculated by dividing net earnings 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
26.4%. 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 25.0%.
|
Three Months
Ended
|
|
Earnings Before
Interest & Taxes Reconciliation:
|
September 30,
2020(5)
|
|
Net earnings (loss)
available to Whirlpool
|
$
|
392
|
|
|
Net earnings (loss)
available to noncontrolling interests
|
1
|
|
|
Income tax expense
(benefit)
|
141
|
|
|
Interest
expense
|
51
|
|
|
Earnings (loss)
before interest & taxes
|
$
|
585
|
|
|
Net sales
|
$
|
5,291
|
|
|
Net earnings
margin
|
7.4
|
%
|
|
Results
classification
|
|
Earnings before
interest &
taxes(5)
|
|
Earnings per
diluted share(5)
|
|
Reported
measure
|
|
|
$
|
585
|
|
|
$
|
6.19
|
|
|
Restructuring
costs(a)
|
Restructuring
costs
|
|
63
|
|
|
1.00
|
|
|
Corrective action
recovery(e)
|
Cost of products
sold
|
|
(13)
|
|
|
(0.20)
|
|
|
(Gain) loss on sale
and disposal of
businesses(b)
|
(Gain) loss on sale
and
disposal of businesses
|
|
(7)
|
|
|
(0.10)
|
|
|
Income tax
impact
|
|
|
—
|
|
|
(0.17)
|
|
|
Normalized tax rate
adjustment(d)
|
|
|
—
|
|
|
0.11
|
|
|
Ongoing
measure
|
|
|
$
|
628
|
|
|
$
|
6.83
|
|
|
Net sales
|
|
|
$
|
5,291
|
|
|
|
|
Ongoing EBIT
margin
|
|
|
11.9
|
%
|
|
|
|
|
Note: Numbers may not
reconcile due to rounding
|
FULL-YEAR 2021 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, 2021.
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 22.0% to
24.0%. 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 between
24.0% and 26.0%.
|
|
|
Twelve Months
Ending
|
|
|
|
December 31,
2021
|
|
Results
classification
|
|
Earnings before
interest & taxes*
|
|
Earnings (loss)
per diluted
share
|
|
Reported
measure*
|
|
|
$2,485
|
|
~$27.80
|
|
Restructuring
costs(a)
|
Restructuring
costs
|
|
54
|
|
0.86
|
|
(Gain) loss on sale
and
disposal of businesses(b)
|
(Gain) loss on sale
and
disposal of businesses
|
|
(107)
|
|
(1.71)
|
|
(Gain) loss on
previously
held equity interest(c)
|
(Gain) loss on
previously held
equity interest
|
|
(42)
|
|
(0.50)
|
|
Income tax
impact
|
|
|
—
|
|
0.34
|
|
Normalized tax rate
adjustment(d)
|
|
|
|
|
(0.54)
|
|
Ongoing
measure
|
|
|
~$2,390
|
|
~$26.25
|
|
|
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.
|
RESTRUCTURING
COSTS - In the third quarter of 2020, these costs
were primarily related to actions that right-sized and reduced the
fixed cost structure of our North America business and certain
other centralized functions, attributable primarily to the
macroeconomic uncertainties caused by COVID-19. In the third
quarter of 2021, these costs were primarily related to actions that
right-size and reduce the fixed cost structure of our EMEA business
and other centralized functions.
|
|
|
|
b.
|
(GAIN) LOSS ON
SALE AND DISPOSAL OF BUSINESSES - On March 31, 2021, Galanz
launched its partial tender offer for majority ownership of
Whirlpool China. Our subsidiary tendered approximately 31% of
Whirlpool China's outstanding shares in the tender offer, with the
remainder representing a noncontrolling interest of approximately
20% in Whirlpool China. The transaction closed on May 6, 2021. In
connection with the closing of the transaction, we received cash
proceeds of $193 million and recognized a gain on sale of $284
million.
|
|
|
|
On May 17, 2021, our
subsidiary entered into a share purchase agreement to sell its
Turkish subsidiary to Arçelik. As part of the agreement, Arçelik
will assume responsibility for operating the manufacturing site in
Manisa, Turkey, following closing. The transaction closed on June
30, 2021. In connection with the closing of the transaction, we
received cash proceeds of $93 million and recognized a loss on sale
of $164 million. During the third quarter of 2021, amounts for
working capital and other customary post-closing adjustments were
finalized and an additional $13 million loss related to the
sale of business was recorded.
|
|
|
|
The net impact
realized for gain on sale and disposal of businesses included in
the income statement for the nine months ended September 30,
2021 is $105 million.
|
|
|
|
During the third
quarter of 2019, the Company reserved approximately $7 million for
an expected change in purchase price for the sale of the Embraco
compressor business. Adjustments to the final purchase price were
finalized as of the third quarter 2020, with no resulting change to
the final purchase price, and the reserve was released and
recognized as a gain during the quarter.
|
|
|
|
c.
|
(GAIN) LOSS ON
PREVIOUSLY HELD EQUITY INTEREST - During the third quarter
of 2021, Whirlpool Corporation acquired an additional 38% equity
interest in Elica PB India Private Limited (Elica PB India) for $57
million, which resulted in a controlling equity ownership of
approximately 87%. The previously held equity interest of 49% in
Elica PB India was remeasured at fair value of $74 million on the
acquisition date, which resulted in a gain of $42 million. This
gain was recorded within Interest & sundry (income) expense
during the third quarter. The earnings per diluted share impact is
calculated net of minority interest.
|
|
|
|
d.
|
NORMALIZED TAX
RATE ADJUSTMENT - During the third quarter of 2021,
the Company calculated ongoing earnings per share using an adjusted
tax rate of 25.0% to reconcile to our anticipated full-year
effective tax rate between 24.0% and 26.0%, which excludes the gain
on sale and disposal of businesses. During the third quarter of
2020, the Company calculated ongoing earnings per share using an
adjusted tax rate of 25.0%, to reconcile to our anticipated
full-year 2020 effective tax between 23.0% and 25.0%.
|
|
|
|
e.
|
CORRECTIVE ACTION
RECOVERY - In Q3 2020, the Company recorded a benefit of
$13 million related to a vendor recovery in our ongoing
EMEA-produced washer corrective action.
|
ADJUSTED FREE CASH FLOW
As defined by the Company, adjusted free cash flow is cash
provided by (used in) operating activities after capital
expenditures, proceeds from the sale of assets and businesses, and
changes in restricted cash. The reconciliation provided below
reconciles nine months ended September 30,
2021 and 2020 and 2021 full-year adjusted free cash flow
with cash provided by (used in) operating activities, the most
directly comparable GAAP financial measure. Adjusted free cash flow
as a percentage of net sales is calculated by dividing adjusted
free cash flow by net sales.
|
|
|
|
|
|
Nine Months
Ended
|
|
|
September
30,
|
|
|
(millions of
dollars)
|
2021
|
|
2020
|
2021
Outlook
|
|
Cash provided by
(used in) operating activities
|
$1,294
|
|
$407
|
$1,950
|
|
Capital expenditures,
proceeds from sale of
assets/businesses and change in restricted cash
|
2
|
|
(237)
|
(250)
|
|
Adjusted free cash
flow
|
$1,296
|
|
$170
|
$1,700
|
|
|
|
|
|
|
Cash provided by
(used in) investing activities*
|
(446)
|
|
(224)
|
|
|
Cash provided by
(used in) financing activities*
|
(856)
|
|
1,531
|
|
*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.
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SOURCE Whirlpool Corporation