BENTON HARBOR, Mich.,
Oct. 23, 2015 /PRNewswire/
-- Whirlpool Corporation (NYSE: WHR) announced today
third-quarter GAAP net earnings of $235
million, or $2.95 per diluted
share, compared to $230 million, or
$2.88 per diluted share, reported for
the same prior-year period. Ongoing business earnings per diluted
share(1) totaled a record $3.45 compared to $3.04 in the same prior-year period, primarily
driven by the benefits of cost and capacity-reduction initiatives,
ongoing cost productivity, favorable price/mix and benefits from
acquisition integration activities.
Net sales in the quarter were a third-quarter record
$5.3 billion compared to $4.8 billion during the same prior-year period,
an increase of over 9 percent. Excluding the impact of currency,
sales increased nearly 25 percent.
"We are pleased with the strong financial results we delivered
in the third quarter," said Jeff M.
Fettig, chairman and chief executive officer of Whirlpool
Corporation. "Our operating plans and focused execution delivered
another quarter of record revenues, operating profit and earnings
in spite of a challenging operating environment in several key
emerging markets."
Third-quarter GAAP operating profit totaled $329 million compared to $335 million in the same prior-year period.
Record third-quarter ongoing business operating
profit(2) totaled $418
million, or 7.9 percent of sales, compared to $387 million in the same prior-year period.
Benefits from acquisition integration activities, cost and
capacity-reduction initiatives, ongoing cost productivity and
favorable price-mix more than offset unfavorable currency,
declining emerging market demand and increased investments in
marketing, technology and products.
For the nine months ended September 30,
2015, the company reported cash used in operating activities
of $(157) million compared to cash
used in operating activities of $(128)
million in the same prior-year period. Whirlpool Corporation
reported free cash flow(3) of $(492) million in the first nine months of 2015
compared to free cash flow(3) of $(532) million in the same prior-year period.
OUTLOOK
Whirlpool Corporation has updated its full year 2015 guidance
primarily to reflect continued weakness in emerging market demand
and negative currency impacts. As a result of these changes, along
with the benefits of previously announced actions to improve
margins, the company now expects to deliver GAAP earnings per
diluted share of $9.75 to $10.25 and
ongoing business earnings per diluted share of $12.00 to $12.50 for the full year 2015.
|
|
2015 EPS
Outlook
|
Prior GAAP Diluted
EPS(i)
|
|
$9.50-$10.50
|
Legacy Product
Warranty and Liability Expenses(ii)
|
|
(0.41)
|
Reduced Restructuring
Expenses(ii)
|
|
0.61
|
Additional Benefit
Plan Curtailment Gains(ii)
|
|
0.15
|
Brazil Demand and
Currency
|
|
(0.50)
|
Effective Tax Rate
Benefit
|
|
0.25
|
Current GAAP
Diluted EPS(i)
|
|
$9.75-$10.25
|
Benefit Plan
Curtailment Gain
|
|
(0.61)
|
Restructuring
Expense
|
|
2.24
|
Combined Acquisition
Related Transition Cost
|
|
0.57
|
Legacy Product
Warranty and Liability Expenses
|
|
0.41
|
Pension Settlement
Charges
|
|
0.15
|
Proceeds Related to a
Business Investment
|
|
(0.62)
|
Antitrust
Resolutions
|
|
0.13
|
Ongoing Business
Diluted EPS(i)
|
$12.00–$12.50
|
|
(i) Diluted EPS
available to Whirlpool.
|
(ii) These changes do
not impact Ongoing Business Diluted EPS.
|
For the full-year 2015, the company now expects to generate free
cash flow(3) of approximately $600 million to $700 million. Included in this
guidance are restructuring cash outlays of up to $200 million, capital spending of approximately
$700 million to $750 million and U.S.
pension contributions of approximately $72
million.
"We remain focused on value creation and executing our long-term
growth strategy," said Fettig, "and we will deploy additional
actions as necessary to continue delivering strong returns for our
shareholders."
THIRD-QUARTER REGIONAL REVIEW
Whirlpool North
America
Whirlpool North America
reported third-quarter net sales of $2.8
billion, unchanged from the same prior-year period.
Excluding the impact of currency, sales increased nearly 3
percent.
The region reported a third-quarter operating profit of
$349 million, compared to
$304 million in the same prior-year
period. Ongoing business segment operating profit(4)
totaled a third-quarter record of $336
million, or 12.0 percent of sales, compared to $304 million, or 10.9 percent of sales, in the
same prior-year period. Ongoing cost productivity and favorable raw
materials more than offset unfavorable currency and increased
investments in marketing, technology and products.
The company expects full-year 2015 industry unit shipments to
increase by approximately 5 percent.
Whirlpool Europe,
Middle East and Africa
Whirlpool Europe, Middle East and Africa reported third-quarter net sales of
$1.5 billion, compared to
$0.8 billion in the same prior-year
period, an increase of 85 percent. Excluding the impact of
currency, sales increased over 127 percent.
The region reported third-quarter operating profit of
$32 million, compared to $9 million in the same prior-year period. Ongoing
business segment operating profit(4) totaled a third
quarter record $71 million, or 4.9
percent of sales, compared to $9
million, or 1.2 percent of sales, in the same prior-year
period. The benefits from acquisition integration activities,
favorable price-mix, ongoing cost productivity and the benefits of
cost and capacity-reduction initiatives more than offset
unfavorable currency and increased investment in marketing,
technology and products.
The company expects full-year 2015 industry unit shipments to be
flat to up 2 percent.
Whirlpool Latin
America
Whirlpool Latin America
reported third-quarter net sales of $0.8
billion, compared to $1.1
billion in the same prior-year period. Excluding the impact
of currency, sales decreased by 7 percent.
The region reported third-quarter GAAP operating profit of
$31 million, or 4.2 percent of sales,
compared to $118 million, or 10.4
percent of sales, in the same prior-year period. Improved product
price/mix and the benefit of cost and capacity reductions were more
than offset by unfavorable currency and lower unit volumes due to a
weaker demand environment in Brazil.
The company expects full-year 2015 industry unit shipments in
Brazil to decrease by
approximately 20 percent.
Whirlpool Asia
Whirlpool Asia reported
third-quarter net sales of $346
million, compared to $157
million in the same prior-year period, an increase of 120
percent. Excluding the impact of currency, sales increased over 127
percent.
The region reported a third-quarter GAAP operating profit of
$24 million, compared to an operating
loss of $(8) million in the same
prior-year period. Ongoing business segment operating
profit(4) totaled a third quarter record $27 million, or 7.7 percent of sales, compared to
$(8) million, or (5.0) percent of
sales, in the same prior-year period. Benefits from acquisition
integration activities, favorable raw materials and the benefits of
cost and capacity-reduction initiatives positively impacted
margins.
The company expects full-year 2015 industry unit shipments to
decrease by approximately 2 percent.
(1) A reconciliation of ongoing business 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 ongoing business operating profit, a
non-GAAP financial measure, to reported operating profit 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) A reconciliation of ongoing business segment operating
profit (loss), a non-GAAP financial measure, to reported
segment operating profit (loss) and other important information,
appears below.
THIRD-QUARTER 2015 // PRODUCT LEADERSHIP, INNOVATION AND
AWARDS
Whirlpool Corporation is the global home appliance industry
leader with deep consumer insights and a strong portfolio of brands
worldwide. We offer compelling home solutions both within and
beyond our core appliance business, delivering innovation that
matters to consumers and positioning our company for continued
growth and profitability.
Company Awards & Recognition
- Whirlpool Corporation was named as one of the "50 Best
Companies to Sell For" by Selling Power magazine.
- Hispanic Network Magazine named Whirlpool Corporation to its
"Best of the Best" list as a leading company for Hispanic
employees.
- Whirlpool Canada received the
2015 ENERGY STAR® Manufacturer of the Year award from Natural
Resources Canada.
- Forbes Brazil magazine
recognized Whirlpool as one of the ten most innovative companies in
Brazil.
- Whirlpool Corporation was recognized for its commitment to
sustainability and natural resource efficiency with inclusion in
the 2015 Dow Jones Sustainability North America Index.
Product Innovation
- Swash 10 Minute Clothing Care System (from Whirlpool and
Procter & Gamble) was named a finalist for Fast Company's 2015
Innovation By Design Awards.
- Whirlpool Protton World Series Refrigerator has been
selected for the prestigious Good Design Awards 2015 in
Japan.
- Whirlpool brand's Supreme Care front load washing
machine received the prestigious Quiet Mark for delivering
exceptional performance while being the quietest machine available
in Europe.
About Whirlpool Corporation
Whirlpool Corporation (NYSE: WHR) is the number one major
appliance manufacturer in the world, with approximately
$20 billion in annual sales, 100,000
employees and 70 manufacturing and technology research centers
throughout the world in 2014. The company markets Whirlpool,
KitchenAid, Maytag, Consul, Brastemp, Amana, Bauknecht,
Jenn-Air, Indesit and other major brand names in more
than 170 countries. Additional information about the company can be
found at whirlpoolcorp.com, or find us on Twitter at
@WhirlpoolCorp.
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 expected earnings per share, cash flow,
productivity and raw material prices. 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; (2) acquisition and
investment-related risk, including risk associated with our
acquisitions of Hefei Sanyo and
Indesit, and risk associated with our increased presence in
emerging markets; (3) Whirlpool's ability to continue its
relationship with significant trade customers and the ability of
these trade customers to maintain or increase market share; (4)
risks related to our international operations, including changes in
foreign regulations, regulatory compliance and disruptions arising
from natural disasters or terrorist attacks; (5) fluctuations in
the cost of key materials (including steel, plastic, resins, copper
and aluminum) and components and the ability of Whirlpool to offset
cost increases; (6) the ability of Whirlpool to manage foreign
currency fluctuations; (7) litigation, tax, and legal compliance
risk and costs, especially costs which may be materially different
from the amount we expect to incur or have accrued for; (8) the
effects and costs of governmental investigations or related actions
by third parties; (9) changes in the legal and regulatory
environment including environmental and health and safety
regulations; (10) Whirlpool's ability to maintain its reputation
and brand image; (11) the ability of Whirlpool to achieve its
business plans, productivity improvements, cost control, price
increases, leveraging of its global operating platform, and
acceleration of the rate of innovation; (12) information technology
system failures and data security breaches; (13) product liability
and product recall costs; (14) inventory and other asset risk; (15)
changes in economic conditions which affect demand for our
products, including the strength of the building industry and the
level of interest rates; (16) the ability of suppliers of critical
parts, components and manufacturing equipment to deliver sufficient
quantities to Whirlpool in a timely and cost-effective manner; (17)
the uncertain global economy; (18) our ability to attract, develop
and retain executives and other qualified employees; (19) the
impact of labor relations; (20) Whirlpool's ability to obtain and
protect intellectual property rights; and (21) health care cost
trends, regulatory changes and variations between results and
estimates that could increase future funding obligations for
pension and postretirement benefit plans.
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.
WHIRLPOOL
CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30
(Millions of dollars, except share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Nine Months
Ended
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Net
sales
|
$
|
5,277
|
|
$
|
4,824
|
|
$
|
15,331
|
|
$
|
13,869
|
Expenses
|
|
|
|
|
|
|
|
Cost of products
sold
|
4,347
|
|
3,997
|
|
12,643
|
|
11,500
|
Gross
margin
|
930
|
|
827
|
|
2,688
|
|
2,369
|
Selling, general and
administrative
|
529
|
|
448
|
|
1,583
|
|
1,344
|
Intangible
amortization
|
18
|
|
6
|
|
55
|
|
17
|
Restructuring
costs
|
54
|
|
38
|
|
145
|
|
101
|
Operating
profit
|
329
|
|
335
|
|
905
|
|
907
|
Other income
(expense)
|
|
|
|
|
|
|
|
Interest and sundry
income (expense)
|
(21)
|
|
(39)
|
|
(32)
|
|
(78)
|
Interest
expense
|
(41)
|
|
(35)
|
|
(124)
|
|
(119)
|
Earnings
before income taxes
|
267
|
|
261
|
|
749
|
|
710
|
Income tax
expense
|
17
|
|
26
|
|
116
|
|
126
|
Net
earnings
|
250
|
|
235
|
|
633
|
|
584
|
Less: Net
earnings available to noncontrolling interests
|
15
|
|
5
|
|
30
|
|
15
|
Net earnings
available to Whirlpool
|
$
|
235
|
|
$
|
230
|
|
$
|
603
|
|
$
|
569
|
Per share of
common stock
|
|
|
|
|
|
|
|
Basic net earnings
available to Whirlpool
|
$
|
2.98
|
|
$
|
2.92
|
|
$
|
7.64
|
|
$
|
7.26
|
Diluted net earnings
available to Whirlpool
|
$
|
2.95
|
|
$
|
2.88
|
|
$
|
7.54
|
|
$
|
7.16
|
Dividends
declared
|
$
|
0.90
|
|
$
|
0.75
|
|
$
|
2.55
|
|
$
|
2.125
|
Weighted-average
shares outstanding (in millions)
|
|
|
|
|
|
|
|
Basic
|
78.8
|
|
78.4
|
|
78.9
|
|
78.3
|
Diluted
|
79.7
|
|
79.6
|
|
79.9
|
|
79.4
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
income
|
$
|
45
|
|
$
|
39
|
|
$
|
254
|
|
$
|
429
|
WHIRLPOOL
CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
(Millions of dollars, except share data)
|
|
|
|
|
|
|
September 30,
2015
|
|
December 31,
2014
|
|
(Unaudited)
|
|
|
|
Assets
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
Cash and
equivalents
|
$
|
698
|
|
$
|
1,026
|
Accounts receivable,
net of allowance of $165 and $154, respectively
|
2,914
|
|
2,768
|
Inventories
|
2,943
|
|
2,740
|
Deferred income
taxes
|
341
|
|
417
|
Prepaid and other
current assets
|
983
|
|
1,147
|
Total current
assets
|
7,879
|
|
8,098
|
Property, net of
accumulated depreciation of $5,964 and $5,959,
respectively
|
3,684
|
|
3,981
|
Goodwill
|
3,039
|
|
2,807
|
Other intangibles,
net of accumulated amortization of $309 and $267,
respectively
|
2,705
|
|
2,803
|
Deferred income
taxes
|
1,917
|
|
1,900
|
Other noncurrent
assets
|
399
|
|
413
|
Total
assets
|
$
|
19,623
|
|
$
|
20,002
|
Liabilities and
stockholders' equity
|
|
|
|
Current
liabilities
|
|
|
|
Accounts
payable
|
$
|
4,162
|
|
$
|
4,730
|
Accrued
expenses
|
693
|
|
852
|
Accrued advertising
and promotions
|
614
|
|
673
|
Employee
compensation
|
426
|
|
499
|
Notes
payable
|
803
|
|
569
|
Current maturities of
long-term debt
|
507
|
|
234
|
Other current
liabilities
|
1,006
|
|
846
|
Total current
liabilities
|
8,211
|
|
8,403
|
Noncurrent
liabilities
|
|
|
|
Long-term
debt
|
3,502
|
|
3,544
|
Pension
benefits
|
976
|
|
1,123
|
Postretirement
benefits
|
405
|
|
446
|
Other noncurrent
liabilities
|
740
|
|
690
|
Total noncurrent
liabilities
|
5,623
|
|
5,803
|
Stockholders'
equity
|
|
|
|
Common stock, $1 par
value, 250 million shares authorized, 110 million shares
issued, and 78 million shares outstanding
|
110
|
|
110
|
Additional paid-in
capital
|
2,597
|
|
2,555
|
Retained
earnings
|
6,611
|
|
6,209
|
Accumulated other
comprehensive loss
|
(2,211)
|
|
(1,840)
|
Treasury stock, 32
million shares
|
(2,244)
|
|
(2,149)
|
Total Whirlpool
stockholders' equity
|
4,863
|
|
4,885
|
Noncontrolling
interests
|
926
|
|
911
|
Total stockholders'
equity
|
5,789
|
|
5,796
|
Total liabilities and
stockholders' equity
|
$
|
19,623
|
|
$
|
20,002
|
WHIRLPOOL
CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30
(Millions of dollars)
|
|
|
|
|
|
|
|
|
|
Nine Months
Ended
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
Operating
activities
|
|
|
|
Net
earnings
|
$
|
633
|
|
|
$
|
584
|
Adjustments to
reconcile net earnings to cash used in operating
activities:
|
|
|
|
Depreciation and
amortization
|
496
|
|
|
397
|
Curtailment
gain
|
(63)
|
|
|
—
|
Changes in assets and
liabilities:
|
|
|
|
Accounts
receivable
|
(405)
|
|
|
(302)
|
Inventories
|
(397)
|
|
|
(399)
|
Accounts
payable
|
(288)
|
|
|
44
|
Accrued advertising
and promotions
|
(34)
|
|
|
(18)
|
Accrued expenses and
current liabilities
|
(26)
|
|
|
(161)
|
Taxes deferred and
payable, net
|
(44)
|
|
|
40
|
Accrued pension and
postretirement benefits
|
(109)
|
|
|
(165)
|
Employee
compensation
|
(31)
|
|
|
(55)
|
Other
|
111
|
|
|
(93)
|
Cash used in
operating activities
|
(157)
|
|
|
(128)
|
Investing
activities
|
|
|
|
Capital
expenditures
|
(391)
|
|
|
(422)
|
Proceeds from sale of
assets and business
|
35
|
|
|
18
|
Change in restricted
cash
|
21
|
|
|
—
|
Acquisition of
Indesit Company S.p.A.
|
—
|
|
|
(75)
|
Acquisition of Hefei
Rongshida Sanyo Electric Co., Ltd.
|
—
|
|
|
(250)
|
Investment in related
businesses
|
(72)
|
|
|
(16)
|
Other
|
—
|
|
|
(3)
|
Cash used in
investing activities
|
(407)
|
|
|
(748)
|
Financing
activities
|
|
|
|
Proceeds from
borrowings of long-term debt
|
531
|
|
|
818
|
Repayments of
long-term debt
|
(278)
|
|
|
(606)
|
Dividends
paid
|
(200)
|
|
|
(165)
|
Net proceeds from
short-term borrowings
|
307
|
|
|
476
|
Common stock
issued
|
36
|
|
|
31
|
Repurchase of common
stock
|
(95)
|
|
|
(25)
|
Purchase of
noncontrolling interest shares
|
—
|
|
|
(5)
|
Other
|
(5)
|
|
|
(13)
|
Cash provided by
financing activities
|
296
|
|
|
511
|
Effect of exchange
rate changes on cash and equivalents
|
(60)
|
|
|
(28)
|
Decrease in cash and
equivalents
|
(328)
|
|
|
(393)
|
Cash and equivalents
at beginning of period
|
1,026
|
|
|
1,380
|
Cash and equivalents
at end of period
|
$
|
698
|
|
|
$
|
987
|
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 business" measures, including ongoing business
operating profit (loss), ongoing business operating margin,
earnings before interest and taxes (EBIT), earnings before interest
and taxes (EBIT) margin, ongoing business earnings before interest
and taxes (EBIT), ongoing business earnings before interest and
taxes (EBIT) margin, ongoing business earnings (loss) before income
taxes, ongoing business earnings per diluted share, ongoing
business segment operating profit (loss), ongoing business segment
operating margin, and free cash flow. Ongoing business measures
exclude items that may not be indicative of, or are unrelated to,
results from our ongoing business operations and provide a better
baseline for analyzing trends in our underlying businesses.
Management believes that 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. 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. 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 business financial
measures should not be considered in isolation or as a substitute
for reported operating profit (loss), net earnings per diluted
share available to Whirlpool, reported operating profit (loss) by
segment, and cash provided by (used in) operating activities, the
most directly comparable GAAP financial measures. These non-GAAP
financial measures reflect an additional way of viewing aspects of
our operations that, when viewed with our GAAP results and the
following reconciliations to corresponding GAAP financial measures,
provide a more complete understanding of our business. 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.
Ongoing Business Operating Profit, Ongoing Business Earnings
Before Interest and Taxes and Ongoing Business Earnings Per
Diluted Share
The reconciliation provided below reconciles the non-GAAP
financial measures ongoing business operating profit, ongoing
business earnings before interest and taxes and ongoing business
earnings per diluted share, with the most directly comparable GAAP
financial measures, operating profit and net earnings per diluted
share available to Whirlpool, for the three months ended
September 30, 2015. Ongoing business
operating margin is calculated by dividing ongoing business
operating profit by net sales.
|
Three Months
Ended
|
|
September 30,
2015
|
|
Operating
Profit
|
|
Earnings
Before
Interest
&
Taxes(5)
|
|
Earnings
per
Diluted
Share
|
Reported GAAP
Measure
|
$
|
329
|
|
|
$
|
308
|
|
|
$
|
2.95
|
|
Restructuring
Expense(a)
|
54
|
|
|
54
|
|
|
0.54
|
|
Acquisition Related
Transition Cost(b)
|
9
|
|
|
9
|
|
|
0.11
|
|
Benefit Plan
Curtailment Gain(c)
|
(16)
|
|
|
(16)
|
|
|
(0.16)
|
|
Gain Related to a
Business Investment(d)
|
—
|
|
|
1
|
|
|
0.01
|
|
Legacy Product
Warranty and Liability Expenses(e)
|
42
|
|
|
42
|
|
|
0.42
|
|
Normalized Tax Rate
Adjustment(f)
|
—
|
|
|
—
|
|
|
(0.42)
|
|
Ongoing Business
Measure
|
$
|
418
|
|
|
$
|
398
|
|
|
$
|
3.45
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(5) Earnings Before Interest & Taxes is a non-GAAP measure
calculated by adding Interest and sundry income (expense)
[approximately $(21) million] and
Operating Profit.
Ongoing Business Operating Profit, Ongoing Business Earnings
Before Interest and Taxes and Ongoing Business Earnings Per
Diluted Share
The reconciliation provided below reconciles the non-GAAP
financial measures ongoing business operating profit, ongoing
business earnings before interest and taxes and ongoing business
earnings per diluted share, with the most directly comparable GAAP
financial measures, operating profit and net earnings per diluted
share available to Whirlpool, for the three months ended
September 30, 2014. Ongoing business
operating margin is calculated by dividing ongoing business
operating profit by net sales.
|
Three Months
Ended
|
|
September 30,
2014
|
|
Operating
Profit
|
|
Earnings
Before
Interest
&
Taxes(5)
|
|
Earnings
Per
Diluted
Share
|
Reported GAAP
Measure
|
$
|
335
|
|
|
$
|
296
|
|
|
$
|
2.88
|
|
Restructuring
Expense(a)
|
|
38
|
|
|
|
38
|
|
|
|
0.36
|
|
Investment
Expense(g)
|
|
14
|
|
|
|
25
|
|
|
|
0.24
|
|
Antitrust
Resolutions(h)
|
|
—
|
|
|
|
2
|
|
|
|
0.02
|
|
Normalized Tax Rate
Adjustment(f)
|
|
—
|
|
|
|
—
|
|
|
|
(0.46)
|
|
Ongoing Business
Measure
|
$
|
387
|
|
|
$
|
361
|
|
|
$
|
3.04
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(5) Earnings Before Interest & Taxes is a non-GAAP measure
calculated by adding Interest and sundry income (expense)
[approximately $(39) million] and
Operating Profit.
Ongoing Business Segment Operating Profit (Loss)
The reconciliation provided below reconciles the non-GAAP
financial measure ongoing business segment operating profit (loss)
with the most directly comparable GAAP financial measure, reported
segment operating profit (loss), for the three months ended
September 30, 2015. Ongoing business
segment operating margin is calculated by dividing ongoing business
segment operating profit (loss) by segment net sales.
|
Three Months
Ended
|
|
September 30,
2015
|
|
Segment Operating
Profit
(Loss)
|
|
Restructuring
Expense(a)
|
|
Acquisition Related
Transition Cost(b)
|
|
Benefit
Plan Curtailment
Gain(c)
|
|
Legacy Product
Warranty and Liability Expenses(e)
|
|
Ongoing Business
Segment Operating Profit (Loss)
|
North
America
|
$
|
349
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(16)
|
|
|
$
|
3
|
|
|
$
|
336
|
|
Latin
America
|
31
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
31
|
|
EMEA
|
32
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
39
|
|
|
71
|
|
Asia
|
24
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
27
|
|
Other/Eliminations
|
(107)
|
|
|
54
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
(47)
|
|
Total Whirlpool
Corporation
|
$
|
329
|
|
|
$
|
54
|
|
|
$
|
9
|
|
|
$
|
(16)
|
|
|
$
|
42
|
|
|
$
|
418
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The reconciliation provided below reconciles the non-GAAP
financial measure ongoing business segment operating profit (loss)
with the most directly comparable GAAP financial measure, reported
segment operating profit (loss), for the three months ended
September 30, 2014. Ongoing business
segment operating margin is calculated by dividing ongoing business
segment operating profit (loss) by segment net sales.
|
Three Months
Ended
|
|
|
September 30,
2014
|
|
|
Segment
Operating
Profit
(Loss)
|
|
Restructuring
Expense(a)
|
|
Investment
Expense(g)
|
|
Ongoing
Business
Segment
Operating
Profit
(Loss)
|
North
America
|
$
|
304
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
304
|
|
Latin
America
|
118
|
|
|
—
|
|
|
—
|
|
|
|
118
|
|
EMEA
|
9
|
|
|
—
|
|
|
—
|
|
|
|
9
|
|
Asia
|
(8)
|
|
|
—
|
|
|
—
|
|
|
|
(8)
|
|
Other/Eliminations
|
(88)
|
|
|
38
|
|
|
14
|
|
|
|
(36)
|
|
Total Whirlpool
Corporation
|
$
|
335
|
|
|
$
|
38
|
|
|
$
|
14
|
|
|
$
|
387
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Footnotes:
a. During the third quarters of 2015 and 2014, we recorded
restructuring charges of $54 million
and $38 million, respectively. The
earnings per diluted share impacts are calculated based on income
tax impacts of $12 million and
$9 million, respectively.
b. During the third quarter of 2015, we recognized acquisition
related transition costs of $9
million associated with the acquisition of a majority
interest in Hefei Sanyo and the
acquisition of Indesit. The earnings per diluted share impact is
calculated based on an income tax impact of $2 million.
c. During the third quarter of 2015, we recorded a benefit plan
curtailment gain of $16 million. The
earnings per diluted share impact is calculated based on an income
tax impact of $4 million.
d. During the third quarter of 2015, we recognized an expense
related to a business investment of $1
million. The earnings per diluted share impact is calculated
based on an income tax impact of $0
million.
e. During the third quarter of 2015, we recognized expenses of
$39 million related to legacy product
warranty and liability actions on heritage Indesit product in
Europe and a $3 million charge associated with a separate
product recall in North America.
The earnings per diluted share impact is calculated based on an
income tax impact of $9 million.
f. During the third quarter of 2014, we made adjustments to
ongoing business diluted EPS to reconcile specific items reported
to anticipated full-year effective tax rates of approximately 24%.
During the third quarter of 2015, we made adjustments to ongoing
business diluted EPS to reconcile specific items reported to
anticipated full-year effective tax rates of approximately 22%.
g. During the third quarter of 2014 we recognized an investment
expense of $25 million related to the
pending acquisition of a majority interest in Hefei Sanyo completed in the fourth quarter of
2014 and the pending acquisition of Indesit completed in the fourth
quarter of 2014. The earnings per diluted share impact is
calculated based on an income tax impact of $6 million.
h. During the third quarter of 2014, we recognized expenses of
approximately $2 million related to
antitrust resolutions. The earnings per diluted share impact is
calculated based on income tax impact of $0
million.
Free Cash Flow
As defined by the company, 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-month ended
September 30, 2015 and 2014 and
projected full-year free cash flow with cash provided by (used in)
operating activities, the most directly comparable GAAP financial
measure.
|
Nine Months Ended
September 30,
|
|
|
(millions of
dollars)
|
2015
|
2014
|
|
2015
Outlook
|
Cash Provided by
(Used in) Operating Activities
|
$(157)
|
$(128)
|
|
$1,300 -
$1,450
|
Capital expenditures,
proceeds from sale of assets/businesses and change in restricted
cash*
|
(335)
|
(404)
|
|
(700) -
(750)
|
Free Cash
Flow
|
$(492)
|
$(532)
|
|
~$600 -
$700
|
*The change in restricted cash relates to the private placement
funds paid by Whirlpool to acquire majority control of Whirlpool
China and which are used to fund capital and technical resources to
enhance Whirlpool China's research and development and working
capital.
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SOURCE Whirlpool Corporation