--Fourth-quarter net sales growth of approximately 3% with 1
point of North America share gains
year-over-year
--Fourth-quarter GAAP net earnings margin of 9.7% compared to prior
year period of (32.6)%, impacted by the Europe transaction
--Fourth-quarter ongoing (non-GAAP) EBIT margin(1) of
5.2% (+170bps year-over-year)
--Full-year GAAP and ongoing (non-GAAP) earnings per diluted
share(2) of $8.72 and
$16.16, respectively, including
$800 million of cost take out
--Paid $384 million in dividends in
2023 and repaid $500 million of term
loan
--2024 outlook includes GAAP and ongoing earnings per diluted
share(2) of $8.50 to
$10.50 and $13.00 to $15.00,
respectively; cash provided by operating activities of $1.15 to $1.25
billion and free cash flow(3) of $550 to $650
million
BENTON
HARBOR, Mich., Jan. 29,
2024 /PRNewswire/ -- Whirlpool Corporation (NYSE:
WHR), today reported fourth-quarter and full-year 2023 financial
results.
"In 2023, we delivered over a point of North America share gains and approximately
$800 million of cost take out as
expected" said Marc Bitzer, chairman
and chief executive officer of Whirlpool Corporation "Looking
forward to 2024 we expect to further reset our cost structure with
an additional $300 - $400 million of cost take out, while our
portfolio transformation will unlock margin lift with the close of
the Europe transaction, expected
in April 2024."
MARC BITZER
KEY
RESULTS
|
Earnings
Results
|
Fourth Quarter
Results
|
|
Full Year
Results
|
Q4
2023
|
Q4
2022
|
Change
|
|
FY
2023
|
FY
2022
|
Change
|
Net sales
($M)
|
$5,088
|
$4,923
|
3.4 %
|
|
$19,455
|
$19,724
|
(1.4) %
|
Net sales excluding
currency ($M)
|
$4,999
|
$4,923
|
1.6 %
|
|
$19,393
|
$19,724
|
(1.7) %
|
GAAP net earnings
(loss) available to Whirlpool ($M)
|
$491
|
$(1,605)
|
nm
|
|
$481
|
$(1,519)
|
nm
|
Ongoing
EBIT(1) ($M)
|
$266
|
$171
|
55.6 %
|
|
$1,191
|
$1,360
|
(12.4) %
|
GAAP earnings (loss)
per diluted share
|
$8.90
|
$(29.35)
|
nm
|
|
$8.72
|
$(27.18)
|
nm
|
Ongoing earnings per
diluted share(2)
|
$3.85
|
$3.89
|
(1.0) %
|
|
$16.16
|
$19.64
|
(17.7) %
|
|
CASH
FLOW
|
Free Cash
Flow
|
2023
|
2022
|
Change
|
Cash provided by (used
in) operating activities ($M)
|
$915
|
$1,390
|
$(475)
|
Free cash
flow(3) ($M)
|
$366
|
$820
|
$(454)
|
QUARTERLY HIGHLIGHTS
- Approximately 170 basis points of margin expansion including 1
point of North America share gains
and approximately $350 million of
cost take out in the quarter
- Fourth-quarter GAAP and ongoing (non-GAAP) earnings per
diluted(2) share of $8.90
and $3.85, respectively
"We continue to create balance sheet flexibility and prioritize
debt reduction with $500 million
repayment of debt in 2023." said Jim
Peters, chief financial officer of Whirlpool Corporation.
"The strength of our balance sheet, with approximately $1.6 billion cash on hand as we exit the year
along with strong cash generation, positions us well to fund
approximately $400 million of
dividends in 2024 while further reducing debt by $500 million."
JIM PETERS
REGIONAL REVIEW
North
America
|
Fourth
Quarter
|
Q4
2023
|
Q4
2022
|
Change
|
Net sales
($M)
|
$2,881
|
$2,845
|
1.3 %
|
EBIT(4)
($M)
|
$242
|
$166
|
45.8 %
|
- Excluding currency, net sales increase of 1.3 percent
year-over-year, driven by 1 point of share gains and improved
industry demand, partially offset by negative price/mix
- EBIT margin(4) of 8.4 percent compared to 5.8
percent in the same prior-year period, driven by reduced cost,
partially offset by unfavorable price/mix
Europe, Middle East
and Africa
|
Fourth
Quarter
|
Q4
2023
|
Q4
2022
|
Change
|
Net sales
($M)
|
$995
|
$1,028
|
(3.2) %
|
EBIT(4)
($M)
|
$33
|
$(4)
|
nm
|
- Excluding currency, net sales decline of (8.3) percent
year-over-year, impacted by continued demand weakness in
Europe, partially offset by
positive price/mix
- EBIT margin(4) of 3.3 percent compared to (0.4)
percent in the same prior-year period, driven by cost take out
actions and held for sale benefits
Latin
America
|
Fourth
Quarter
|
Q4
2023
|
Q4
2022
|
Change
|
Net sales
($M)
|
$974
|
$831
|
17.2 %
|
EBIT(4)
($M)
|
$58
|
$49
|
18.4 %
|
- Excluding currency, net sales increase of 12.5 percent
year-over-year, driven by strong industry recovery in Brazil and Mexico and share gains in Brazil
- EBIT margin(4) of 6.0 percent compared to 5.9
percent in the same prior-year period, driven by cost take out
actions offset by negative price/mix and losses in Argentina from currency devaluation and new
plant ramp-up
Asia
|
Fourth
Quarter
|
Q4
2023
|
Q4
2022
|
Change
|
Net sales
($M)
|
$238
|
$219
|
8.7 %
|
EBIT(4)
($M)
|
$3
|
$6
|
(50.0) %
|
- Excluding currency, net sales increase of 10.1 percent
year-over-year, driven by increased volumes from share gains and
improving industry
- EBIT margin(4) of 1.3 percent compared to 2.7
percent in the same prior-year period, impacted by negative
price/mix, partially offset by cost take out actions
FULL-YEAR 2024
OUTLOOK
|
|
Guidance
Summary
|
2023
Reported
|
2023 Like for Like
(5)
|
2024
Guidance
|
Net sales
($M)
|
$19,455
|
~$16,900
|
$16,900
|
Cash provided by
operating activities ($M)
|
$915
|
N/A
|
$1,150 -
$1,250
|
Free cash flow
($M)(3)
|
$366
|
N/A
|
$550 -
$650
|
GAAP net earnings
margin (%)
|
2.5 %
|
N/A
|
6.5 %
|
Ongoing EBIT margin
(%)(1)
|
6.1 %
|
~6.8
%
|
6.8 %
|
GAAP earning per
diluted share
|
$8.72
|
N/A
|
$8.50 -
$10.50
|
Ongoing earnings per
diluted share(2)
|
$16.16
|
N/A
|
$13.00 -
$15.00
|
- Resegmenting the business to reflect transformed portfolio;
2024 reporting segments now include major domestic appliances (MDA)
for North America, Europe, Latin
America and Asia along with
global small domestic appliances
- The Company expects the Europe
transaction to close by April 2024,
and full year guidance includes three months MDA Europe expected
results (approximately $700 million
of net sales and EBIT(4) margin of approximately
1.5%)
- Expect full-year 2024 net sales of approximately $16.9 billion (approximately flat on a
like-for-like(5) basis; down approximately 13 percent
compared to the prior year reported results)
- Full-year GAAP and ongoing(2) earnings per diluted
share of $8.50 to $10.50 and $13.00
to $15.00, respectively, including
$300-$400
million of cost actions
- Cash provided by operating activities of $1.15 to $1.25
billion and free cash flow(3) of approximately
$550 to $650
million; includes approximately $200 to $300
million of MDA Europe cash usage in 2024
- GAAP tax rate and adjusted (non-GAAP) tax rate of approximately
24 percent and 0 percent, respectively
- Expect to pay dividends of approximately $400 million in 2024 (subject to board approval)
and reduce debt by approximately $500
million
(1)
|
A
reconciliation of earnings before interest and taxes (EBIT) and
ongoing EBIT, non-GAAP financial measures, to reported net earnings
(loss) available to Whirlpool, and a reconciliation of EBIT margin
and ongoing EBIT margin, non-GAAP financial measures, to net
earnings (loss) margin and other important information, appears
below.
|
(2)
|
A reconciliation of
ongoing earnings per diluted share, a non-GAAP financial measure,
to reported net earnings (loss) per diluted share available to
Whirlpool and other important information, appears
below.
|
(3)
|
A reconciliation of
free cash flow, a non-GAAP financial measure, to cash provided by
(used in) operating activities and other important information,
appears below.
|
(4)
|
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 $59 million and $(1,688)
million for the fourth quarters of 2023 and 2022,
respectively.
|
(5)
|
Like-for-like refers
to a comparison between the 2024 guidance and pro forma results for
2023, which exclude the second through fourth quarter resegmented
results for the historical Europe major domestic appliances
business (MDA Europe under new segment operating structure). This
comparison uses a prior period baseline that is aligned to the
ongoing business expectations for 2024, with the Europe transaction
expected to close by April 2024. The like-for-like GAAP net
earnings margin and corresponding reconciliation are not provided
as there is no equivalent GAAP measure. Please see below for a
reconciliation of ongoing EBIT for the full year to GAAP net
earnings.
|
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 InSinkErator. In 2023,
the company reported approximately $19
billion in annual net sales, 59,000 employees and 55
manufacturing and technology research centers. Additional
information about the company can be found at
WhirlpoolCorp.com.
WEBSITE DISCLOSURE
We routinely post important information for investors on our
website, WhirlpoolCorp.com, in the "Investors" section. We
also intend to update the "Hot Topics Q&A" portion of this
webpage as a means of disclosing material, non-public information
and for complying with our disclosure obligations under Regulation
FD. Accordingly, investors should monitor the "Investors" section
of our website, in addition to following our press releases, SEC
filings, public conference calls, presentations and webcasts. The
information contained on, or that may be accessed through, our
webpage is not incorporated by reference into, and is not a part
of, this document.
WHIRLPOOL ADDITIONAL INFORMATION
This document contains forward-looking statements about
Whirlpool Corporation and its consolidated subsidiaries
("Whirlpool") within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended. Whirlpool intends such
forward-looking statements to be covered by the safe harbor
provisions for forward-looking statements contained in the Private
Securities Litigation Reform Act of 1995 and includes this
statement for purposes of complying with those safe harbor
provisions. Any statements made in this press release that are not
statements of historical fact, including statements regarding our
2023 financial performance, supply chain, cost take out, raw
material, portfolio transformation, and transaction-related
synergies, closing timing of the transaction and future cash flow
expectations are forward-looking statements and should be evaluated
as such. Such statements can be identified by the use of
terminology such as "may," "could," "will," "should," "possible,"
"plan," "predict," "forecast," "potential," "anticipate,"
"estimate," "expect," "project," "intend," "believe," "may impact,"
"on track," "margin lift," 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 DECEMBER 31
(Millions of
dollars, except per share data)
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net
sales
|
$
5,088
|
|
$
4,923
|
|
$
19,455
|
|
$
19,724
|
Expenses
|
|
|
|
|
|
|
|
Cost of products
sold
|
4,296
|
|
4,278
|
|
16,285
|
|
16,651
|
Gross
margin
|
792
|
|
645
|
|
3,170
|
|
3,073
|
Selling, general and
administrative
|
557
|
|
537
|
|
1,993
|
|
1,820
|
Intangible
amortization
|
1
|
|
11
|
|
40
|
|
35
|
Restructuring
costs
|
2
|
|
8
|
|
16
|
|
21
|
Impairment of goodwill
and other intangibles
|
—
|
|
—
|
|
—
|
|
384
|
Loss (gain) on sale and
disposal of businesses
|
(180)
|
|
1,521
|
|
106
|
|
1,869
|
Operating profit
(loss)
|
412
|
|
(1,432)
|
|
1,015
|
|
(1,056)
|
Other (income)
expense
|
|
|
|
|
|
|
|
Interest and sundry
(income) expense
|
(6)
|
|
27
|
|
71
|
|
(19)
|
Interest
expense
|
92
|
|
64
|
|
351
|
|
190
|
Earnings (loss) before
income taxes
|
326
|
|
(1,523)
|
|
593
|
|
(1,227)
|
Income tax expense
(benefit)
|
(191)
|
|
69
|
|
77
|
|
265
|
Equity method
investment income (loss), net of tax
|
(25)
|
|
(12)
|
|
(28)
|
|
(19)
|
Net earnings
(loss)
|
492
|
|
(1,604)
|
|
488
|
|
(1,511)
|
Less: Net earnings
(loss) available to noncontrolling interests
|
1
|
|
1
|
|
7
|
|
8
|
Net earnings (loss)
available to Whirlpool
|
$
491
|
|
$ (1,605)
|
|
$
481
|
|
$
(1,519)
|
Per share of common
stock
|
|
|
|
|
|
|
|
Basic net earnings
(loss) available to Whirlpool
|
$
8.93
|
|
$ (29.35)
|
|
$
8.76
|
|
$
(27.18)
|
Diluted net earnings
available to Whirlpool
|
$
8.90
|
|
$ (29.35)
|
|
$
8.72
|
|
$
(27.18)
|
Dividends
declared
|
$
1.75
|
|
$
1.75
|
|
$
7.00
|
|
$
7.00
|
Weighted-average
shares outstanding (in millions)
|
|
|
|
|
|
|
|
Basic
|
55.1
|
|
54.7
|
|
55.0
|
|
55.9
|
Diluted
|
55.2
|
|
54.7
|
|
55.2
|
|
55.9
|
WHIRLPOOL
CORPORATION
CONSOLIDATED
CONDENSED BALANCE SHEETS
(Millions of
dollars, except share data)
|
|
December 31,
2023
|
|
December 31,
2022
|
|
(Unaudited)
|
|
|
Assets
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
1,570
|
|
$
1,958
|
Accounts receivable,
net of allowance of $47 and $49, respectively
|
1,529
|
|
1,555
|
Inventories
|
2,247
|
|
2,089
|
Prepaid and other
current assets
|
717
|
|
653
|
Assets held for
sale
|
144
|
|
139
|
Total current
assets
|
6,207
|
|
6,394
|
Property, net of
accumulated depreciation of $5,259 and $4,808,
respectively
|
2,234
|
|
2,102
|
Right of use
assets
|
721
|
|
691
|
Goodwill
|
3,330
|
|
3,314
|
Other intangibles, net
of accumulated amortization of $440 and $400,
respectively
|
3,124
|
|
3,164
|
Deferred income
taxes
|
1,317
|
|
1,063
|
Other noncurrent
assets
|
379
|
|
396
|
Total assets
|
$
17,312
|
|
$
17,124
|
Liabilities and
stockholders' equity
|
|
|
|
Current
liabilities
|
|
|
|
Accounts
payable
|
$
3,598
|
|
$
3,376
|
Accrued
expenses
|
491
|
|
481
|
Accrued advertising
and promotions
|
603
|
|
623
|
Employee
compensation
|
238
|
|
159
|
Notes
payable
|
17
|
|
4
|
Current maturities of
long-term debt
|
800
|
|
248
|
Other current
liabilities
|
614
|
|
550
|
Liabilities held for
sale
|
587
|
|
490
|
Total current
liabilities
|
6,948
|
|
5,931
|
Noncurrent
liabilities
|
|
|
|
Long-term
debt
|
6,414
|
|
7,363
|
Pension
benefits
|
147
|
|
184
|
Postretirement
benefits
|
107
|
|
96
|
Lease
liabilities
|
612
|
|
584
|
Other noncurrent
liabilities
|
547
|
|
460
|
Total noncurrent
liabilities
|
7,827
|
|
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
|
3,078
|
|
3,061
|
Retained
earnings
|
8,358
|
|
8,261
|
Accumulated other
comprehensive loss
|
(2,178)
|
|
(2,090)
|
Treasury stock, 60
million and 60 million shares, respectively
|
(7,010)
|
|
(7,010)
|
Total Whirlpool
stockholders' equity
|
2,362
|
|
2,336
|
Noncontrolling
interests
|
175
|
|
170
|
Total stockholders'
equity
|
2,537
|
|
2,506
|
Total liabilities and
stockholders' equity
|
$
17,312
|
|
$
17,124
|
WHIRLPOOL
CORPORATION
CONSOLIDATED
CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE PERIODS
ENDED DECEMBER 31
(Millions of
dollars)
|
|
Twelve Months
Ended
|
|
2023
|
|
2022
|
Operating
activities
|
|
|
|
Net earnings
(loss)
|
$
488
|
|
$
(1,511)
|
Adjustments to
reconcile net earnings to cash provided by (used in) operating
activities:
|
|
|
|
Depreciation and
amortization
|
361
|
|
475
|
Impairment of goodwill
and other intangibles
|
—
|
|
384
|
Loss (gain) on sale and
disposal of businesses
|
106
|
|
1,869
|
Changes in assets and
liabilities:
|
|
|
|
Accounts
receivable
|
159
|
|
854
|
Inventories
|
(123)
|
|
(49)
|
Accounts
payable
|
1
|
|
(612)
|
Accrued advertising
and promotions
|
(37)
|
|
(51)
|
Accrued expenses and
current liabilities
|
122
|
|
113
|
Taxes deferred and
payable, net
|
(97)
|
|
18
|
Accrued pension and
postretirement benefits
|
(59)
|
|
(105)
|
Employee
compensation
|
103
|
|
(288)
|
Other
|
(109)
|
|
293
|
Cash provided by (used
in) operating activities
|
915
|
|
1,390
|
Investing
activities
|
|
|
|
Capital
expenditures
|
(549)
|
|
(570)
|
Proceeds from sale of
assets and businesses
|
10
|
|
77
|
Acquisition of
businesses, net of cash acquired
|
(14)
|
|
(3,000)
|
Cash held by divested
businesses
|
—
|
|
(75)
|
Cash provided by (used
in) investing activities
|
(553)
|
|
(3,568)
|
Financing
activities
|
|
|
|
Net proceeds from
borrowings of long-term debt
|
304
|
|
2,800
|
Net proceeds
(repayments) of long-term debt
|
(750)
|
|
(300)
|
Net proceeds
(repayments) from short-term borrowings
|
34
|
|
(4)
|
Dividends
paid
|
(384)
|
|
(390)
|
Repurchase of common
stock
|
—
|
|
(903)
|
Common stock
issued
|
4
|
|
3
|
Other
|
—
|
|
—
|
Cash provided by (used
in) financing activities
|
(792)
|
|
1,206
|
Effect of exchange rate
changes on cash, cash equivalents and restricted cash
|
45
|
|
(20)
|
Less: decrease in cash
classified as held for sale
|
(3)
|
|
(94)
|
Increase (decrease) in
cash, cash equivalents and restricted cash
|
(388)
|
|
(1,086)
|
Cash, cash equivalents
and restricted cash at beginning of year
|
1,958
|
|
3,044
|
Cash, cash equivalents
and restricted cash at end of period
|
$
1,570
|
|
$
1,958
|
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.
FOURTH-QUARTER 2023 ONGOING EARNINGS BEFORE INTEREST AND
TAXES AND ONGOING EARNINGS PER DILUTED SHARE
The reconciliation provided below reconciles the non-GAAP
financial measures ongoing earnings before interest and taxes and
ongoing earnings per diluted share, with the most directly
comparable GAAP financial measures, net earnings (loss) available
to Whirlpool and net earnings (loss) per diluted share available to
Whirlpool, for the three months ended December 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 diluted 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
(58.6)%. 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 (19.0)%.
|
Three Months
Ended
|
Earnings Before
Interest & Taxes Reconciliation:
|
December 31,
2023
|
Net earnings (loss)
available to Whirlpool
|
$
491
|
Net earnings (loss)
available to noncontrolling interests
|
1
|
Income tax expense
(benefit)
|
(191)
|
Interest
expense
|
92
|
Earnings before
interest & taxes
|
$
393
|
Net sales
|
$
5,088
|
Net earnings (loss)
margin
|
9.7 %
|
|
|
|
|
|
|
|
Results
classification
|
|
Earnings
before
interest &
taxes
|
|
Earnings per
diluted
share
|
Reported
measure
|
|
|
$
393
|
|
$
8.90
|
Impact of M&A
transactions(a)
|
(Gain) loss on sale
and
disposal of businesses
&
Selling, general
and
administrative &
including
equity method
investment
|
|
(123)
|
|
(2.23)
|
Legacy EMEA legal
matters(b)
|
Interest and
sundry
(income)
expense
|
|
(4)
|
|
(0.06)
|
Total income tax
impact
|
|
|
|
|
(0.44)
|
Normalized tax rate
adjustment(c)
|
|
|
|
|
(2.32)
|
Ongoing
measure
|
|
|
$
266
|
|
$
3.85
|
Net sales
|
|
|
$
5,088
|
|
|
Ongoing EBIT
margin
|
|
|
5.2 %
|
|
|
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 diluted 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 diluted 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(a)
|
Interest and
sundry
(income)
expense
|
|
84
|
|
1.54
|
Impairment of goodwill,
intangibles and other intangibles(d)
|
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
FULL-YEAR 2023 ONGOING EARNINGS BEFORE INTEREST AND TAXES AND
ONGOING EARNINGS PER DILUTED SHARE
The reconciliation provided below reconciles the non-GAAP
financial measures ongoing earnings before interest and taxes and
ongoing earnings per diluted share, with the most directly
comparable GAAP financial measures, net earnings (loss) available
to Whirlpool and net earnings (loss) per diluted share available to
Whirlpool, for the twelve months ending December 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 diluted share GAAP measure and ongoing
measure are presented net of tax, while each adjustment is
presented on a pre-tax basis. Our full-year GAAP tax rate was
13.0%. The aggregate income tax impact of the taxable components of
each adjustment is presented in the income tax impact line item at
our full-year adjusted tax (non-GAAP) rate of (6.7)%.
|
Twelve Months
Ended
|
Earnings Before
Interest & Taxes Reconciliation:
|
December 31,
2023
|
Net earnings (loss)
available to Whirlpool
|
$
481
|
Net earnings (loss)
available to noncontrolling interests
|
7
|
Income tax expense
(benefit)
|
77
|
Interest
expense
|
351
|
Earnings before
interest & taxes
|
$
916
|
Net sales
|
$
19,455
|
Net earnings (loss)
margin
|
2.5 %
|
|
|
|
|
|
|
|
Results
classification
|
|
Earnings
before
interest
&
taxes*
|
|
Earnings per
diluted
share
|
Reported
measure
|
|
|
$
916
|
|
$
8.72
|
Impact of M&A
transactions(a)
|
(Gain) loss on sale
and
disposal of businesses
&
Selling, general
and
administrative &
including
equity method
investment
|
|
181
|
|
3.27
|
Legacy EMEA legal
matters(b)
|
Interest and
sundry
(income)
expense
|
|
94
|
|
1.71
|
Total income tax
impact
|
|
|
|
|
0.35
|
Normalized tax rate
adjustment(c)
|
|
|
|
|
2.11
|
Ongoing
measure
|
|
|
$
1,191
|
|
$
16.16
|
Net Sales
|
|
|
$
19,455
|
|
|
Ongoing EBIT
Margin
|
|
|
6.1 %
|
|
|
Note: Numbers may not reconcile due to rounding
FULL-YEAR 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 twelve months ending 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 full-year GAAP tax rate was
(21.6)%. The aggregate income tax impact of the taxable components
of each adjustment is presented in the income tax impact line item
at our full-year adjusted tax (non-GAAP) rate of 4.4%.
|
Twelve Months
Ended
|
Earnings Before
Interest & Taxes Reconciliation:
|
December 31,
2022
|
Net earnings (loss)
available to Whirlpool
|
$
(1,519)
|
Net earnings (loss)
available to noncontrolling interests
|
8
|
Income tax expense
(benefit)
|
265
|
Interest
expense
|
190
|
Earnings before
interest & taxes
|
$
(1,056)
|
Net sales
|
$
19,724
|
Net earnings (loss)
margin
|
(7.7) %
|
|
|
Results
classification
|
Earnings
before
interest &
taxes*
|
Earnings per
diluted
share
|
Reported
measure
|
|
$
(1,056)
|
$
(27.18)
|
Impairment of
goodwill,
intangibles and
other
assets(d)
|
Impairment of
goodwill
and other intangibles
&
Equity method
investment
income (loss), net of
tax
|
396
|
7.08
|
Impact of M&A
transactions(a)
|
(Gain) loss on sale
and
disposal of businesses
&
Selling, general
and
administrative
|
1,936
|
34.63
|
Substantial liquidation
of
subsidiary(e)
|
Interest and
sundry
(income)
expense
|
84
|
1.51
|
Total income tax
impact
|
Interest and
sundry
(income)
expense
|
|
(1.89)
|
Normalized tax rate
adjustment(c)
|
|
|
5.69
|
Share
adjustment
|
|
|
(0.20)
|
Ongoing
measure
|
|
$
1,360
|
$
19.64
|
Net Sales
|
|
$
19,724
|
|
Ongoing EBIT
Margin
|
|
6.9 %
|
|
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 55.9
million plus the impact of antidilutive shares of 0.6 million which
were excluded on a GAAP basis.
FULL-YEAR 2024 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, 2024.
Ongoing EBIT margin is calculated by dividing ongoing EBIT by net
sales. EBIT margin is calculated by dividing EBIT by net sales. The
earnings per diluted share GAAP measure and ongoing measure are
presented net of tax, while each adjustment is presented on a
pre-tax basis. Our anticipated full-year GAAP tax rate is
approximately 24%. The aggregate income tax impact of the taxable
components of each adjustment is presented in the income tax impact
line item at our anticipated full-year adjusted tax (non-GAAP) rate
of approximately 0.0%.
|
|
|
Twelve Months
Ending
|
|
|
|
December 31,
2024
|
|
Results
classification
|
|
Earnings before
interest & taxes*
|
|
Earnings per diluted
share
|
Reported
measure
|
|
|
∼$1,100
|
|
∼$9.50
|
Restructuring
Expense
|
|
|
∼50
|
|
∼1.00
|
Total income tax
impact
|
|
|
|
|
—
|
Normalized tax rate
adjustment(c)
|
|
|
|
|
∼3.50
|
Ongoing
measure
|
|
|
∼$1,150
|
|
∼$14.00
|
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 $1.5 billion in the fourth-quarter of 2022.
The loss includes a write-down of the net assets of $1.2 billion of the disposal group to a fair
value of $139 million and also includes $393 million of
cumulative currency translation adjustments, $98 million
release of other comprehensive loss on pension and $18 million
of other transaction related costs. Whirlpool's European major
domestic appliance business met the criteria for held-for-sale
accounting during the fourth-quarter of 2022 and will be included
in the Company's results until closing of the transaction. We
recorded a loss of $106 million related to the planned
divestiture of our European major domestic appliance business for
the twelve months ended December 31,
2023, inclusive of a gain of $180 million in the fourth
quarter of 2023, resulting in a total loss of $1.6 billion for the transaction.
Additionally, we incurred other identifiable costs related to
portfolio transformation, totaling $75
million in 2023, of which $57
million was recorded in the fourth quarter. This amount
consisted of the following costs: an impairment charge of
$27 million related to the equity
method investment in Brazil, which
is recorded within Equity method investment income (loss), net of
tax, and an impairment charge along with other business
closing-related costs of $20 million
in North America, which is
primarily recorded in Selling, General and Administrative expenses.
Furthermore, during the fourth-quarter 2023, we incurred other
unique transaction related costs of $10 million related to
portfolio transformation. These other transaction costs are
recorded in Selling, General and Administrative expenses on our
Consolidated Statements of Income (Loss).
During the second quarter of 2022, we entered into an agreement
to sell our Russia business. We classified this disposal group
as held for sale and recorded an impairment loss of $346 million for the write-down of the assets to
their fair value. During the third quarter of 2022, the loss from
disposal was adjusted by an immaterial amount resulting in a final
loss amount of $348 million for
the twelve months ended December 31,
2022.
Additionally, during the fourth-quarter 2022, we incurred unique
transaction related costs of $25
million related to portfolio transformation for a total of
$67 million for the twelve months
ended December 31, 2022. 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 the France Competition
Investigation and other legacy legal matters of our European major
domestic appliance business was $94
million, for the twelve months ended December 31, 2023, respectively.
c. NORMALIZED TAX RATE ADJUSTMENT
- During the fourth quarter of 2022, the Company
calculated ongoing earnings per share using an adjusted tax rate of
(101.8)%. During the fourth quarter of 2023, the Company calculated
ongoing earnings per share using an adjusted tax rate of (19.0)%.
During the full year of 2022, the Company calculated ongoing
earnings per share using an adjusted tax rate of 4.4%. During the
full-year of 2023, the Company calculated ongoing earnings per
share using an adjusted tax rate of (6.7)% which excludes the
non-tax deductible impact of M&A transactions of approximately
$25 million recorded in the fourth quarter of 2023 and which
reflects certain tax benefits related to legal entity restructuring
transactions in the fourth quarter of 2023.
Additionally, in the full-year 2024 outlook, the Company
calculated ongoing earnings per share using a full-year adjusted
tax (non-GAAP) rate of approximately 0.0%. The company expects to
recognize tax benefits, contingent upon the closure of the
Europe transaction, that are
expected to provide a significant tax benefit. Reconciling from our
expected full-year GAAP tax rate of approximately 24%, certain
Europe transaction tax impacts
have been adjusted from our full-year adjusted tax (non-GAAP) rate
of approximately 0.0%.
d. IMPAIRMENT OF GOODWILL, INTANGIBLES AND OTHER
ASSETS - During the second quarter of 2022, the carrying
value of the EMEA reporting unit and Indesit and
Hotpoint trademarks exceeded their fair values resulting in
an impairment charge of $384 million
which is recorded within Impairment of goodwill and other
intangibles. Additionally, 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.
e. 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.
ONGOING EBIT EXCLUDING MDA EUROPE SECOND QUARTER THROUGH FOURTH
QUARTER
The reconciliation provided below reconciles the impact of
removing MDA Europe from our Q2 through Q4 net sales and ongoing
EBIT, for twelve months ended December 31,
2023 for the Whirlpool business.
|
2023 As
Reported
|
Q2-Q4 2023
MDA
Europe*
|
2023 Like
for Like
|
Net Sales (in
billions)
|
$
19.5
|
$
~2.6
|
$
~16.9
|
Ongoing EBIT (in
millions)
|
$
1,191
|
$
~33
|
$
~1,158
|
Ongoing EBIT
Margin
|
6.1 %
|
~1.3 %
|
~6.8 %
|
Note: Numbers may not reconcile due to rounding
*Q2-Q3 historical segment financial data (unaudited); Q4 estimated
as historical segment financial data is not yet available.
FREE CASH FLOW
Free cash flow is cash provided by (used in) operating
activities after capital expenditures. The reconciliation provided
below reconciles twelve months ended December 31, 2023 and 2022 and 2024
full-year free cash flow with cash provided by (used in) operating
activities, the most directly comparable GAAP financial measure.
Free cash flow as a percentage of net sales is calculated by
dividing free cash flow by net sales.
|
|
|
|
|
|
|
Twelve Months
Ended
|
|
|
|
December 31,
|
|
|
(millions of
dollars)
|
2023
|
|
2022
|
|
2024 Outlook
|
Cash provided by (used
in) operating activities
|
$915
|
|
$1,390
|
|
$1,150 -
$1,250
|
Capital
expenditures
|
(549)
|
|
(570)
|
|
(600)
|
Free cash
flow
|
$366
|
|
$820
|
|
$550 - $650
|
|
|
|
|
|
|
Cash provided by (used
in) investing activities*
|
(553)
|
|
(3,568)
|
|
|
Cash provided by (used
in) financing activities*
|
(792)
|
|
1,206
|
|
|
*Financial guidance on a GAAP basis for cash provided by
(used in) financing activities and cash provided by (used in)
investing activities has not been provided because in order to
prepare any such estimate or projection, the Company would need to
rely on market factors and certain other conditions and assumptions
that are outside of its control.
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SOURCE Whirlpool Corporation