- Portfolio transformation fully on track
- GAAP net loss margin of (3.9)% and GAAP loss per diluted share
of $(3.27) impacted by non-cash
charge associated with the EMEA transaction from seasonal working
capital changes
- Ongoing (non-GAAP) EBIT margin(1) of 5.4% with
sequential(2) improvement of approximately 200 basis
points; ongoing (non-GAAP) earnings per diluted share(3)
of $2.66
- The North America region
delivered EBIT(4) margins of 10%, over 400 basis point
sequential improvement alongside 1 point of share gains both
year-over-year and sequentially
- Revised full-year GAAP earnings per diluted share to
$13.00 to $15.00 and reaffirmed ongoing earnings per
diluted share(3) of $16.00
to $18.00
BENTON
HARBOR, Mich., April 24,
2023 /PRNewswire/ -- Whirlpool Corporation (NYSE:
WHR), today reported first-quarter 2023 financial results.
"In Q1, we delivered
significant sequential margin expansion, in particular in North
America. These results demonstrate our progress against our
operational priorities and put us on track to deliver a solid
2023," said Marc Bitzer, chairman and chief executive officer of
Whirlpool Corporation. "At the same time, we are continuing to
advance our ongoing portfolio transformation of investing in higher
growth and higher margin businesses and remain confident in our
ability to drive value over the long-term."
|
|
MARC
BITZER
|
KEY RESULTS
Quarterly Results
|
Sequential
|
|
Year-Over-Year
|
Q1 2023
|
Q4 2022
|
Change
|
|
Q1 2023
|
Q1 2022
|
Change
|
Net sales
($M)
|
$4,649
|
$4,923
|
(5.6) %
|
|
$4,649
|
$4,920
|
(5.5) %
|
Net sales excluding
currency ($M)
|
$4,605
|
$4,923
|
(6.5) %
|
|
$4,736
|
$4,920
|
(3.7) %
|
GAAP net earnings
(loss) available to
Whirlpool ($M)
|
$(179)
|
$(1,605)
|
88.8 %
|
|
$(179)
|
$313
|
nm
|
Ongoing
EBIT(1) ($M)
|
$251
|
$171
|
46.8 %
|
|
$251
|
$463
|
(45.8) %
|
GAAP earnings (loss)
per diluted
share(5)
|
$(3.27)
|
$(29.35)
|
88.9 %
|
|
$(3.27)
|
$5.33
|
nm
|
Ongoing earnings per
diluted
share(3,5)
|
$2.66
|
$3.89
|
(31.6) %
|
|
$2.66
|
$5.31
|
(49.9) %
|
CASH FLOW
Free Cash Flow
|
2023
|
2022
|
Change
|
Cash provided by (used
in) operating activities ($M)
|
$(477)
|
$(328)
|
$(149)
|
Free cash
flow(6) ($M)
|
$(573)
|
$(415)
|
$(158)
|
QUARTERLY HIGHLIGHTS
- Net sales decline of (5.5)%, excluding currency decline of
(3.7)%, year-over-year, impacted by global demand softness and
unfavorable product price/mix
- Cost takeout actions on track, delivering 50 basis points of
sequential margin expansion
- Declared second-quarter dividend of $1.75
|
|
"Our operational
priorities and cost takeout actions of $800-900 million give us
confidence in reaffirming our full-year ongoing guidance," said Jim
Peters, chief financial officer of Whirlpool Corporation. "With
$1.4 billion of cash on hand, we continue to have the flexibility
to execute a balanced capital allocation approach including funding
innovation and growth while also maintaining nearly 70 years of
dividends returned to our shareholders."
|
|
JIM
PETERS
|
REGIONAL REVIEW
North America
|
Sequential
|
|
Year-Over-Year
|
Q1 2023
|
Q4 2022
|
Change
|
|
Q1 2023
|
Q1 2022
|
Change
|
Net sales
($M)
|
$2,747
|
$2,845
|
(3.4) %
|
|
$2,747
|
$2,791
|
(1.6) %
|
EBIT(4)
($M)
|
$274
|
$166
|
65.1 %
|
|
$274
|
$454
|
(39.6) %
|
- Net sales decline negatively impacted by lower industry volumes
and price/mix, partially offset by InSinkErator and share
gains
- EBIT margin(4) of 10.0 percent compared to 16.3
percent in the same prior-year period, impacted by unfavorable
price/mix partially offset by the addition of InSinkErator
Europe, Middle
East and Africa
|
Sequential
|
|
Year-Over-Year
|
Q1 2023
|
Q4 2022
|
Change
|
|
Q1 2023
|
Q1 2022
|
Change
|
Net sales
($M)
|
$889
|
$1,028
|
(13.5) %
|
|
$889
|
$1,084
|
(18.0) %
|
EBIT(4)
($M)
|
$5
|
$(4)
|
nm
|
|
$5
|
$(27)
|
nm
|
- Organic net sales(7) decline of (7.7) percent
year-over-year, impacted by continued demand weakness, partially
offset by positive price/mix
- 0.6 percent EBIT margin(4) compared to (2.5) percent
in the same prior-year period, driven by positive price/mix and
held for sale benefits partially offset by raw material
inflation
Latin America
|
Sequential
|
|
Year-Over-Year
|
Q1 2023
|
Q4 2022
|
Change
|
|
Q1 2023
|
Q1 2022
|
Change
|
Net sales
($M)
|
$757
|
$831
|
(8.9) %
|
|
$757
|
$760
|
(0.4) %
|
EBIT(4)
($M)
|
$39
|
$49
|
(20.4) %
|
|
$39
|
$54
|
(27.8) %
|
- Continued signs of demand improvement in Mexico, with softer demand in Brazil offset by cost-based pricing
actions
- EBIT margin(4) of 5.2 percent compared to 7.1
percent in the same prior-year period, impacted by cost inflation
and foreign currency
Asia
|
Sequential
|
|
Year-Over-Year
|
Q1 2023
|
Q4 2022
|
Change
|
|
Q1 2023
|
Q1 2022
|
Change
|
Net sales
($M)
|
$256
|
$219
|
16.9 %
|
|
$256
|
$285
|
(10.2) %
|
EBIT(4)
($M)
|
$8
|
$6
|
33.3 %
|
|
$8
|
$14
|
(42.9) %
|
- Excluding currency, net sales decline of (3.4) percent
year-over-year, as consumer demand has not yet fully recovered
- EBIT margin(4) of 3.1 percent compared to 4.8
percent in the same prior-year period, impacted by negative
price/mix and foreign currency partially offset by reduced cost
inflation
FULL-YEAR 2023 OUTLOOK
- Reaffirming full-year expectations for 2023 net sales of
approximately $19.4 billion (down 1
to 2 percent compared to the prior year)
- Revising GAAP earnings per diluted share from $16.00 to $18.00 to
$13.00 to $15.00
- Reaffirming ongoing earnings per diluted share(3) of
$16.00 to $18.00
- Cash provided by operating activities of approximately
$1.4 billion and free cash
flow(6) of approximately $800
million remains unchanged
- Revising GAAP tax rate from 14 to 16 percent to 19 to 21
percent; adjusted (non-GAAP) tax rate of 14 to 16 percent remains
unchanged
|
|
(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)
|
Sequential refers to
a comparison of results between the three months ended December 31,
2022 and March 31, 2023.
|
(3)
|
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.
|
(4)
|
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 $(359) million and $(32)
million for the first quarters of 2023 and 2022, respectively, and
$(1,688) million for the fourth quarter of 2022.
|
(5)
|
First-quarter 2023
GAAP tax rate was (62.4)%, fourth-quarter 2022 GAAP tax rate was
(4.5)%, first-quarter 2022 GAAP tax rate was 24.8%. The
first-quarter 2023 adjusted tax rate (non-GAAP) of 15.0%,
fourth-quarter 2022 adjusted tax rate (non-GAAP) was (101.8)%, and
first-quarter 2022 adjusted tax rate (non-GAAP) was 25.0%. GAAP
earnings per share for Q4 2022 and Q1 2023 reflects GAAP earnings
per basic share. Please see the non-GAAP reconciliation below for
further information.
|
(6)
|
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.
|
(7)
|
A reconciliation of
regional organic net sales, non-GAAP financial measures, to
reported regional net sales and other information, appears
below.
|
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 takeout, 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 MARCH 31
(Millions of dollars, except per share data)
|
|
|
|
Three Months Ended
|
|
2023
|
|
2022
|
Net sales
|
$
4,649
|
|
$
4,920
|
Expenses
|
|
|
|
Cost of products
sold
|
3,886
|
|
4,069
|
Gross
margin
|
763
|
|
851
|
Selling, general and
administrative
|
487
|
|
376
|
Intangible
amortization
|
11
|
|
9
|
Restructuring
costs
|
—
|
|
5
|
(Gain) loss on sale and
disposal of businesses
|
222
|
|
—
|
Operating profit
(loss)
|
43
|
|
461
|
Other (income) expense
|
|
|
|
Interest and sundry
(income) expense
|
77
|
|
(7)
|
Interest
expense
|
75
|
|
41
|
Earnings (loss) before
income taxes
|
(109)
|
|
427
|
Income tax expense
(benefit)
|
68
|
|
106
|
Equity method
investment income (loss), net of tax
|
1
|
|
(5)
|
Net earnings
(loss)
|
(176)
|
|
316
|
Less: Net earnings
(loss) available to noncontrolling interests
|
3
|
|
3
|
Net earnings (loss)
available to Whirlpool
|
$
(179)
|
|
$
313
|
Per share of common stock
|
|
|
|
Basic net earnings
available to Whirlpool
|
$
(3.27)
|
|
$
5.37
|
Diluted net earnings
available to Whirlpool
|
$
(3.27)
|
|
$
5.33
|
Dividends
declared
|
$
1.75
|
|
$
1.75
|
Weighted-average shares outstanding (in
millions)
|
|
|
|
Basic
|
54.8
|
|
58.3
|
Diluted
|
54.8
|
|
58.7
|
WHIRLPOOL
CORPORATION CONSOLIDATED CONDENSED BALANCE
SHEETS (Millions of dollars, except share
data)
|
|
|
|
|
|
March 31,
2023
|
|
December
31, 2022
|
|
(Unaudited)
|
|
|
Assets
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
1,359
|
|
$
1,958
|
Accounts receivable,
net of allowance of $49 and $49, respectively
|
1,612
|
|
1,555
|
Inventories
|
2,351
|
|
2,089
|
Prepaid and other
current assets
|
630
|
|
653
|
Assets held for
sale
|
143
|
|
139
|
Total current
assets
|
6,095
|
|
6,394
|
Property, net of
accumulated depreciation of $5,064 and $4,808,
respectively
|
2,104
|
|
2,102
|
Right of use
assets
|
697
|
|
691
|
Goodwill
|
3,328
|
|
3,314
|
Other intangibles, net
of accumulated amortization of $410 and $400,
respectively
|
3,154
|
|
3,164
|
Deferred income
taxes
|
1,096
|
|
1,063
|
Other noncurrent
assets
|
390
|
|
396
|
Total assets
|
$
16,864
|
|
$
17,124
|
Liabilities and stockholders'
equity
|
|
|
|
Current
liabilities
|
|
|
|
Accounts
payable
|
$
3,467
|
|
$
3,376
|
Accrued
expenses
|
542
|
|
481
|
Accrued advertising
and promotions
|
421
|
|
623
|
Employee
compensation
|
151
|
|
159
|
Notes
payable
|
9
|
|
4
|
Current maturities of
long-term debt
|
300
|
|
248
|
Other current
liabilities
|
631
|
|
550
|
Liabilities held for
sale
|
461
|
|
490
|
Total current
liabilities
|
5,982
|
|
5,931
|
Noncurrent
liabilities
|
|
|
|
Long-term
debt
|
7,382
|
|
7,363
|
Pension
benefits
|
156
|
|
184
|
Postretirement
benefits
|
93
|
|
96
|
Lease
liabilities
|
594
|
|
584
|
Other noncurrent
liabilities
|
423
|
|
460
|
Total noncurrent
liabilities
|
8,648
|
|
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
|
3,064
|
|
3,061
|
Retained
earnings
|
7,985
|
|
8,261
|
Accumulated other
comprehensive loss
|
(2,091)
|
|
(2,090)
|
Treasury stock, 60
million and 60 million shares, respectively
|
(7,011)
|
|
(7,010)
|
Total Whirlpool
stockholders' equity
|
2,061
|
|
2,336
|
Noncontrolling
interests
|
173
|
|
170
|
Total stockholders'
equity
|
2,234
|
|
2,506
|
Total liabilities and
stockholders' equity
|
$
16,864
|
|
$
17,124
|
WHIRLPOOL
CORPORATION CONSOLIDATED CONDENSED STATEMENTS OF CASH
FLOWS (UNAUDITED) FOR THE PERIODS ENDED MARCH 31
(Millions of dollars)
|
|
|
|
Three Months Ended
|
|
2023
|
|
2022
|
Operating activities
|
|
|
|
Net earnings
(loss)
|
$
(176)
|
|
$
316
|
Adjustments to
reconcile net earnings to cash provided by (used in) operating
activities:
|
|
|
|
Depreciation and
amortization
|
89
|
|
112
|
(Gain) loss on sale and
disposal of businesses
|
222
|
|
—
|
Changes in assets and
liabilities:
|
|
|
|
Accounts
receivable
|
(155)
|
|
248
|
Inventories
|
(284)
|
|
(384)
|
Accounts
payable
|
(24)
|
|
(217)
|
Accrued advertising
and promotions
|
(229)
|
|
(272)
|
Accrued expenses and
current liabilities
|
99
|
|
186
|
Taxes deferred and
payable, net
|
43
|
|
79
|
Accrued pension and
postretirement benefits
|
(14)
|
|
(28)
|
Employee
compensation
|
3
|
|
(234)
|
Other
|
(51)
|
|
(134)
|
Cash provided by (used
in) operating activities
|
(477)
|
|
(328)
|
Investing activities
|
|
|
|
Capital
expenditures
|
(96)
|
|
(87)
|
Proceeds from sale of
assets and businesses
|
—
|
|
75
|
Acquisition of
businesses, net of cash acquired
|
(14)
|
|
—
|
Cash provided by (used
in) investing activities
|
(110)
|
|
(12)
|
Financing activities
|
|
|
|
Net proceeds from
borrowings of long-term debt
|
303
|
|
—
|
Net proceeds
(repayments) of long-term debt
|
(250)
|
|
—
|
Net proceeds
(repayments) from short-term borrowings
|
9
|
|
—
|
Dividends
paid
|
(97)
|
|
(103)
|
Repurchase of common
stock
|
—
|
|
(533)
|
Common stock
issued
|
1
|
|
2
|
Other
|
(4)
|
|
3
|
Cash provided by (used
in) financing activities
|
(38)
|
|
(631)
|
Effect of exchange rate
changes on cash, cash equivalents and restricted cash
|
27
|
|
41
|
Less: decrease in cash
classified as held for sale
|
(1)
|
|
—
|
Increase (decrease) in
cash, cash equivalents and restricted cash
|
(599)
|
|
(930)
|
Cash, cash equivalents
and restricted cash at beginning of year
|
1,958
|
|
3,044
|
Cash, cash equivalents
and restricted cash at end of period
|
$
1,359
|
|
$
2,114
|
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.
FIRST-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 basic share available to
Whirlpool, for the three months ended March
31, 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 basic share GAAP measure and ongoing measure are
presented net of tax, while each adjustment is presented on a
pre-tax basis. Our first-quarter GAAP tax rate was (62.4)%. The
aggregate income tax impact of the taxable components of each
adjustment is presented in the income tax impact line item at our
first-quarter adjusted tax rate (non-GAAP) of 15.0%.
|
Three Months
Ended
|
Earnings Before
Interest & Taxes Reconciliation:
|
March 31,
2023
|
Net earnings (loss)
available to Whirlpool
|
$
(179)
|
Net earnings (loss)
available to noncontrolling interests
|
3
|
Income tax expense
(benefit)
|
68
|
Interest
expense
|
75
|
Earnings before
interest & taxes
|
$
(33)
|
Net sales
|
$
4,649
|
Net earnings (loss)
margin
|
(3.9) %
|
|
Results
classification
|
|
Earnings before
interest & taxes
|
|
Earnings per
diluted share
|
Reported
measure
|
|
|
$
(33)
|
|
$
(3.27)
|
Impact of M&A
transactions(a)
|
(Gain) loss on sale
and
disposal of businesses
|
|
222
|
|
4.05
|
Legacy EMEA legal
matters(b)
|
Interest and sundry
(income) expense
|
|
62
|
|
1.14
|
Total income tax
impact
|
|
|
|
|
(0.78)
|
Normalized tax rate
adjustment(c)
|
|
|
|
|
1.54
|
Share
adjustment*
|
|
|
|
|
(0.02)
|
Ongoing
measure
|
|
|
$
251
|
|
$
2.66
|
Net sales
|
|
|
$
4,649
|
|
|
Ongoing EBIT
margin
|
|
|
5.4 %
|
|
|
|
Note: Numbers may not
reconcile due to rounding
|
|
*As a result of
our current period GAAP earnings loss, the impact of antidilutive
shares was excluded from the loss per share calculation on a GAAP
basis. The share count adjustment used in the calculation of the
first-quarter ongoing earnings per diluted share includes basic
shares outstanding of 54.8 million plus the impact of antidilutive
shares of 0.4 million which were excluded on a GAAP
basis.
|
FIRST-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 available to
Whirlpool and net earnings per diluted share available to
Whirlpool, for the three months ended March
31, 2022. 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
first-quarter GAAP tax rate was 24.8%. The aggregate income tax
impact of the taxable components of each adjustment is presented in
the income tax impact line item at our first-quarter adjusted tax
rate (non-GAAP) of 25.0%.
|
Three Months
Ended
|
Earnings Before
Interest & Taxes Reconciliation:
|
March 31,
2022
|
Net earnings (loss)
available to Whirlpool
|
$
313
|
Net earnings (loss)
available to noncontrolling interests
|
3
|
Income tax expense
(benefit)
|
106
|
Interest
expense
|
41
|
Earnings (loss) before
interest & taxes
|
$
463
|
Net sales
|
$
4,920
|
Net earnings
margin
|
6.4 %
|
|
Results
classification
|
|
Earnings before
interest & taxes
|
|
Earnings per
diluted share
|
Reported
measure
|
|
|
$
463
|
|
$
5.33
|
Normalized tax rate
adjustment(c)
|
|
|
|
|
(0.02)
|
Ongoing
measure
|
|
|
$
463
|
|
$
5.31
|
Net sales
|
|
|
$
4,920
|
|
|
Ongoing EBIT
margin
|
|
|
9.4 %
|
|
|
|
Note: Numbers may not
reconcile due to rounding
|
FOURTH-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 basic share available to
Whirlpool, for the three months ended December 31, 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 basic share GAAP measure and ongoing
measure are presented net of tax, while each adjustment is
presented on a pre-tax basis. Our fourth-quarter GAAP tax rate was
(4.5)%. The aggregate income tax impact of the taxable components
of each adjustment is presented in the income tax impact line item
at our fourth-quarter adjusted tax rate (non-GAAP) of (101.8)%.
|
Three Months
Ended
|
Earnings Before
Interest & Taxes Reconciliation:
|
December 31,
2022
|
Net earnings (loss)
available to Whirlpool
|
$
(1,605)
|
Net earnings (loss)
available to noncontrolling interests
|
1
|
Income tax expense
(benefit)
|
69
|
Interest
expense
|
64
|
Earnings before
interest & taxes
|
$
(1,471)
|
Net sales
|
$
4,923
|
Net earnings (loss)
margin
|
(32.6) %
|
|
Results
classification
|
|
Earnings before
interest & taxes
|
|
Earnings per
diluted share
|
Reported
measure
|
|
|
$
(1,471)
|
|
$
(29.35)
|
Impact of M&A
transactions(a)
|
(Gain) loss on sale
and
disposal of businesses &
Selling, general and administrative
|
|
1,546
|
|
28.27
|
Substantial liquidation
of subsidiary(d)
|
Interest and sundry
(income) expense
|
|
84
|
|
1.54
|
Impairment of goodwill,
intangibles and other assets(e)
|
Equity method
investment
income (loss), net of tax
|
|
12
|
|
0.22
|
Total income tax
impact
|
|
|
|
|
30.36
|
Normalized tax rate
adjustment(c)
|
|
|
|
|
(27.12)
|
Share
adjustment*
|
|
|
|
|
(0.03)
|
Ongoing
measure
|
|
|
$
171
|
|
$
3.89
|
Net sales
|
|
|
$
4,923
|
|
|
Ongoing EBIT
margin
|
|
|
3.5 %
|
|
|
|
Note: Numbers may not
reconcile due to rounding
|
|
*As a result of
our current period GAAP earnings loss, the impact of antidilutive
shares was excluded from the loss per share calculation on a GAAP
basis. The share count adjustment used in the calculation of the
full-year ongoing earnings per diluted share includes basic shares
outstanding of 54.7 million plus the impact of antidilutive shares
of 0.4 million which were excluded on a GAAP basis.
|
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 19.0% to
21.0%. 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
14.0% and 16.0%.
|
|
|
Twelve Months
Ending
|
|
|
|
December 31,
2023
|
|
Results
classification
|
|
Earnings before
interest &
taxes*
|
|
Earnings per
diluted share
|
Reported
measure
|
|
|
~$1,300
|
|
$13.00 -
$15.00
|
Impact of M&A
transactions(a)
|
(Gain) loss on sale
and
disposal of businesses
|
|
92
|
|
1.67
|
Legacy EMEA legal
matters(b)
|
Interest and sundry
(income) expense
|
|
62
|
|
1.13
|
Total income tax
impact
|
|
|
|
|
(0.42)
|
Normalized tax rate
adjustment(c)
|
|
|
|
|
0.62
|
Ongoing
measure
|
|
|
~$1,450
|
|
$16.00 -
$18.00
|
|
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, the Company recorded a non-cash
loss on disposal of $1,521 million in the fourth-quarter of
2022. During the first quarter of 2023 we recorded an adjustment of
$222 million to the loss on sale and disposal of businesses
increasing the total non-cash loss on disposal to
$1,743 million for the transaction. The adjustment reflects
ongoing reassessment of the fair value less costs to sell of the
disposal group.
|
|
|
|
During the
fourth-quarter 2022, we incurred unique transaction related costs
of $25 million related to portfolio transformation. These
transaction costs are recorded in Selling, General and
Administrative expenses on our Consolidated Statements of Income
(Loss).
|
|
|
b.
|
LEGACY EMEA LEGAL
MATTERS - The aggregate amount accrued by the Company related
to certain legacy legal matters of our European major domestic
appliance business was $62 million for the three months ended
March 31, 2023.
|
|
|
c.
|
NORMALIZED TAX RATE
ADJUSTMENT - During the first quarter of 2023, the Company
calculated ongoing earnings per share using an adjusted tax rate of
15.0%, which excludes the non-tax deductible impact of M&A
transactions of approximately $222 million recorded in the first
quarter of 2023, to reconcile to our anticipated full-year
ongoing effective tax rate between 14.0% and 16.0%. During
the first quarter of 2022, the Company calculated ongoing earnings
per share using an adjusted tax rate of 25.0% to reconcile to our
anticipated full-year ongoing 2022 effective tax rate between 24%
and 26%. During the fourth-quarter of 2022, the Company calculated
ongoing earnings per share using an adjusted tax rate of
(101.8)%.
|
|
|
d.
|
SUBSTANTIAL
LIQUIDATION OF SUBSIDIARY - During the fourth-quarter of
2022, the Company liquidated an offshore subsidiary and recorded a
one-time charge of $84 million for a release of other
comprehensive income on hedging and cumulative translation
adjustments.
|
|
|
e.
|
IMPAIRMENT OF
GOODWILL, INTANGIBLES AND OTHER ASSETS - During the fourth
quarter of 2022 we recognized an impairment charge of $12M
related to equity method investment in Brazil which is recorded
within Equity method investment income (loss), net of
tax.
|
ORGANIC NET SALES
The reconciliation provided below reconciles the non-GAAP
financial measure organic net sales to GAAP reported net sales, for
three months ended March 31, 2022 and
2023 for the Whirlpool EMEA business.
|
Three Months
Ended
|
|
|
March 31,
|
|
(Approximate impact
in millions)
|
2022
|
2023
|
Change
|
Net Sales
|
$
1,084
|
$
889
|
(18.0) %
|
Less: Russia Divested
Business
|
64
|
—
|
|
Less:
Currency
|
—
|
(52)
|
|
Organic Net
Sales
|
$
1,020
|
$
941
|
(7.7) %
|
|
Note: Numbers may not
reconcile due to rounding
|
FREE CASH FLOW
Free cash flow is cash provided by (used in) operating
activities after capital expenditures. The reconciliation provided
below reconciles three months ended March
31, 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.
|
Three Months
Ended
|
|
|
|
March 31,
|
|
|
(millions of
dollars)
|
2023
|
|
2022
|
|
2023
Outlook
|
Cash provided by (used
in) operating activities
|
$(477)
|
|
$(328)
|
|
~$1,400
|
Capital
expenditures
|
(96)
|
|
(87)
|
|
~(600)
|
Free cash
flow
|
$(573)
|
|
$(415)
|
|
~$800
|
|
|
|
|
|
|
Cash provided by (used
in) investing activities*
|
(110)
|
|
(12)
|
|
|
Cash provided by (used
in) financing activities*
|
(38)
|
|
(631)
|
|
|
|
*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