BENTON HARBOR, Mich.,
Jan. 24, 2018 /PRNewswire/ -- Whirlpool Corporation (NYSE:
WHR) announced today fourth-quarter GAAP operating profit of
$267 million, or 4.7 percent of
sales, compared to $341 million, or
6.0 percent of sales, in the same prior-year period. Fourth-quarter
ongoing operating profit(2) was $392 million, or 6.9 percent of sales, compared
to $431 million, or 7.6 percent of
sales, in the same prior-year period. On a GAAP and ongoing basis,
the favorable impacts of cost productivity, product price/mix and
restructuring benefits were more than offset by unfavorable raw
material inflation and unit volume declines.
"Our unique global strategic position, coupled with favorable
macro-economic conditions, gives us strong confidence towards
our long-term value creation goals," said Marc Bitzer, chief executive officer of
Whirlpool Corporation. "The solid fourth-quarter exit run rates,
and faster than anticipated progress on price/mix and fixed cost
reduction, are very encouraging in that respect."
Fourth-quarter net sales were $5.7
billion, an increase of 1 percent compared to the same
prior-year period. Excluding the impact of currency, sales
decreased 1.6 percent.
Fourth-quarter GAAP net loss was $(268)
million, or $(3.69) per
diluted share, including a one-time non-cash charge of
approximately $420 million related to
tax reform, compared to GAAP net earnings of $180 million, or $2.36 per diluted share, reported for the same
prior-year period. Fourth-quarter ongoing earnings per diluted
share(1) were $4.10
compared to $4.33 in the same
prior-year period.
For the full year, net sales were $21.3
billion compared to $20.7
billion in 2016. Excluding the impact of currency, sales
increased 1.5 percent. Full-year GAAP operating profit was
$1.1 billion, or 5.3 percent of
sales, compared to $1.4 billion, or
6.6 percent of sales, in the prior year. Full-year ongoing
operating profit(2) was $1.5
billion, or 6.8 percent of sales, compared to $1.6 billion, or 7.8 percent of sales, in the
prior year. GAAP net earnings per diluted share were $4.70, compared to $11.50 in the prior year. GAAP net earnings per
diluted share in 2017 were adversely impacted by a one-time
non-cash charge of approximately $420
million related to tax reform. Ongoing earnings per diluted
share(1) were $13.74,
compared to $14.06 in the prior
year.
For the twelve months ended December 31, 2017, Whirlpool
Corporation reported cash provided by operating activities of
$1.3 billion compared to $1.2 billion in the same prior-year period. The
Company reported free cash flow(3) of $707 million for 2017 compared to $630 million in the prior year.
FOURTH-QUARTER REGIONAL REVIEW
Whirlpool North
America
Whirlpool North America
reported fourth-quarter net sales of $3.1
billion, in-line with the same prior-year period. Excluding
the impact of currency, sales decreased 0.8 percent.
The region reported fourth-quarter operating profit of
$368 million, or 11.8 percent of
sales, compared to $349 million, or
11.2 percent of sales, in the same prior-year period. During the
quarter, favorable product price/mix more than offset raw material
inflation.
Whirlpool Europe,
Middle East and Africa
Whirlpool Europe, Middle East and Africa reported fourth-quarter net sales of
$1.4 billion, an increase of 1.5
percent compared to the same prior-year period. Excluding the
impact of currency, sales decreased 5.6 percent.
The region reported fourth-quarter GAAP operating profit of
$4 million, or 0.3 percent of sales,
compared to GAAP operating profit of $17
million, or 1.3 percent of sales, in the same prior-year
period. Ongoing segment operating profit(4) was
$4 million, or 0.3 percent of sales,
compared to $45 million, or 3.3
percent of sales, in the same prior-year period. During the
quarter, unfavorable product price/mix and raw material inflation
more than offset favorable cost productivity and restructuring
benefits.
Whirlpool Latin
America
Whirlpool Latin America
reported fourth-quarter net sales of $905
million, compared to $860
million in the same prior-year period, an increase of 5.2
percent. Excluding the impact of currency, sales increased 4.4
percent.
The region reported fourth-quarter operating profit of
$64 million, or 7.1 percent of sales,
compared to $71 million, or 8.3
percent of sales, in the same prior-year period. During the
quarter, raw material inflation was partially offset by cost
productivity and the sale and monetization of certain tax
credits.
Whirlpool Asia
Whirlpool Asia reported
fourth-quarter net sales of $333
million, compared to $352
million in the same prior-year period. Excluding the impact
of currency, sales decreased 8.3 percent.
The region reported a fourth-quarter GAAP operating loss of
$(1) million, or (0.4) percent of
sales, compared to GAAP operating profit of $18 million, or 4.9 percent of sales, in the same
prior-year period. Ongoing segment operating loss(4) was
$(1) million, or (0.4) percent of
sales, compared to ongoing segment operating profit(4)
of $19 million, or 5.3 percent of
sales, in the same prior-year period. On a GAAP and ongoing basis,
favorable impacts from product price/mix were more than offset by
unit volume declines and raw material inflation.
OUTLOOK
For the full-year 2018, the Company expects to generate cash
from operating activities of approximately $1.7 billion to $1.8
billion and free cash flow(3) of approximately
$1.0 billion to $1.1 billion. Included in this guidance are
restructuring cash outlays of up to $300
million, pension contributions of $35
million and, with respect to free cash flow(3),
capital spending of approximately $675
million.
For the full-year 2018, Whirlpool Corporation expects GAAP
earnings per diluted share of $12.45
to $13.45 and ongoing earnings per
diluted share(1) of $14.50
to $15.50.
"We are confident that our cost reduction initiatives and global
price/mix will be a catalyst for significant margin improvements in
the coming year," said Jim Peters,
chief financial officer of Whirlpool Corporation. "As a result, we
expect to achieve our cash conversion goal and continue returning
strong levels of cash to shareholders."
(1) A reconciliation of ongoing earnings per diluted
share, a non-GAAP financial measure, to reported net earnings per
diluted share available to Whirlpool and other important
information, appears below.
(2) A reconciliation of ongoing 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 segment operating profit
(loss), a non-GAAP financial measure, to reported segment operating
profit (loss) and other important information, appears
below.
About Whirlpool Corporation
Whirlpool Corporation
(NYSE: WHR) is the number one major appliance manufacturer in the
world, with approximately $21 billion
in annual sales, 92,000 employees and 70 manufacturing and
technology research centers in 2017. The company
markets Whirlpool, KitchenAid, Maytag, Consul, Brastemp,
Amana, Bauknecht, Jenn-Air, Indesit and other major brand
names in nearly every country throughout the world. 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)
Whirlpool's ability to maintain or increase sales to significant
trade customers and the ability of these trade customers to
maintain or increase market share; (3) Whirlpool's ability to
maintain its reputation and brand image; (4) the ability of
Whirlpool to achieve its business plans, productivity improvements,
and cost control objectives, and to leverage its global operating
platform, and accelerate the rate of innovation; (5)
Whirlpool's ability to obtain and protect intellectual property
rights; (6) acquisition and investment-related risks,
including risks associated with our past acquisitions, and risks
associated with our increased presence in emerging markets; (7)
risks related to our international operations, including changes in
foreign regulations, regulatory compliance and disruptions arising
from political, legal and economic instability; (8) information
technology system failures, data security breaches, network
disruptions, and cybersecurity attacks; (9) product liability and
product recall costs; (10) the ability of suppliers of
critical parts, components and manufacturing equipment to deliver
sufficient quantities to Whirlpool in a timely and cost-effective
manner; (11) our ability to attract, develop and retain executives
and other qualified employees; (12) the impact of labor
relations; (13) fluctuations in the cost of key materials
(including steel, resins, copper and aluminum) and components and
the ability of Whirlpool to offset cost increases; (14) Whirlpool's
ability to manage foreign currency fluctuations; (15)
inventory and other asset risk; (16) the uncertain
global economy and changes in economic conditions which affect
demand for our products; (17) health care cost trends,
regulatory changes and variations between results and estimates
that could increase future funding obligations for pension and
postretirement benefit plans; (18) 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; (19) the effects and costs of
governmental investigations or related actions by third parties;
and (20) changes in the legal and regulatory environment including
environmental, health and safety regulations.
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.
The number one major appliance manufacturer in the world is based
on most recently available publicly reported annual revenues among
leading appliance manufacturers.
WHIRLPOOL
CORPORATION
CONSOLIDATED
STATEMENTS OF INCOME
FOR THE PERIODS
ENDED DECEMBER 31
(Millions of
dollars, except per share data)
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
Net
sales
|
$
|
5,702
|
|
|
$
|
5,656
|
|
|
$
|
21,253
|
|
|
$
|
20,718
|
|
Expenses
|
|
|
|
|
|
|
|
Cost of products
sold
|
4,717
|
|
|
4,696
|
|
|
17,651
|
|
|
17,026
|
|
Gross
margin
|
985
|
|
|
960
|
|
|
3,602
|
|
|
3,692
|
|
Selling, general and
administrative
|
566
|
|
|
545
|
|
|
2,112
|
|
|
2,080
|
|
Intangible
amortization
|
27
|
|
|
17
|
|
|
79
|
|
|
71
|
|
Restructuring
costs
|
125
|
|
|
57
|
|
|
275
|
|
|
173
|
|
Operating
profit
|
267
|
|
|
341
|
|
|
1,136
|
|
|
1,368
|
|
Other (income)
expense
|
|
|
|
|
|
|
|
Interest and sundry
(income) expense
|
18
|
|
|
(10)
|
|
|
87
|
|
|
93
|
|
Interest
expense
|
40
|
|
|
43
|
|
|
162
|
|
|
161
|
|
Earnings before
income taxes
|
209
|
|
|
308
|
|
|
887
|
|
|
1,114
|
|
Income tax
expense
|
481
|
|
|
122
|
|
|
550
|
|
|
186
|
|
Net earnings
(loss)
|
(272)
|
|
|
186
|
|
|
337
|
|
|
928
|
|
Less: Net earnings
(loss) available to noncontrolling interests
|
(4)
|
|
|
6
|
|
|
(13)
|
|
|
40
|
|
Net earnings (loss)
available to Whirlpool
|
$
|
(268)
|
|
|
$
|
180
|
|
|
$
|
350
|
|
|
$
|
888
|
|
Per share of
common stock
|
|
|
|
|
|
|
|
Basic net earnings
(loss) available to Whirlpool
|
$
|
(3.74)
|
|
|
$
|
2.40
|
|
|
$
|
4.78
|
|
|
$
|
11.67
|
|
Diluted net earnings
(loss) available to Whirlpool
|
$
|
(3.69)
|
|
|
$
|
2.36
|
|
|
$
|
4.70
|
|
|
$
|
11.50
|
|
Weighted-average
shares outstanding (in millions)
|
|
|
|
|
|
|
|
Basic
|
71.5
|
|
|
75.2
|
|
|
73.3
|
|
|
76.1
|
|
Diluted
|
72.5
|
|
|
76.3
|
|
|
74.4
|
|
|
77.2
|
|
WHIRLPOOL
CORPORATION
CONSOLIDATED
BALANCE SHEETS
AT DECEMBER
31
(Millions of
dollars)
|
|
|
|
|
|
2017
|
|
2016
|
|
(Unaudited)
|
|
|
Assets
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
|
1,196
|
|
|
$
|
1,085
|
|
Accounts receivable,
net of allowance of $157 and $185, respectively
|
2,665
|
|
|
2,711
|
|
Inventories
|
2,988
|
|
|
2,623
|
|
Prepaid and other
current assets
|
1,086
|
|
|
920
|
|
Total current
assets
|
7,935
|
|
|
7,339
|
|
Property, net of
accumulated depreciation of $6,825 and $6,055,
respectively
|
4,033
|
|
|
3,810
|
|
Goodwill
|
3,118
|
|
|
2,956
|
|
Other intangibles,
net of accumulated amortization of $476 and $387,
respectively
|
2,591
|
|
|
2,552
|
|
Deferred income
taxes
|
2,013
|
|
|
2,154
|
|
Other noncurrent
assets
|
315
|
|
|
342
|
|
Total
assets
|
$
|
20,005
|
|
|
$
|
19,153
|
|
Liabilities and
stockholders' equity
|
|
|
|
Current
liabilities
|
|
|
|
Accounts
payable
|
$
|
4,797
|
|
|
$
|
4,416
|
|
Accrued
expenses
|
641
|
|
|
649
|
|
Accrued advertising
and promotions
|
853
|
|
|
742
|
|
Employee
compensation
|
414
|
|
|
390
|
|
Notes
payable
|
450
|
|
|
34
|
|
Current maturities of
long-term debt
|
376
|
|
|
560
|
|
Other current
liabilities
|
941
|
|
|
871
|
|
Total current
liabilities
|
8,472
|
|
|
7,662
|
|
Noncurrent
liabilities
|
|
|
|
Long-term
debt
|
4,392
|
|
|
3,876
|
|
Pension
benefits
|
1,029
|
|
|
1,074
|
|
Postretirement
benefits
|
352
|
|
|
334
|
|
Other noncurrent
liabilities
|
632
|
|
|
479
|
|
Total noncurrent
liabilities
|
6,405
|
|
|
5,763
|
|
Stockholders'
equity
|
|
|
|
Common stock, $1 par
value, 250 million shares authorized, 112 million and 111
million shares issued, and 71 million and 74 million shares
outstanding, respectively
|
112
|
|
|
111
|
|
Additional paid-in
capital
|
2,739
|
|
|
2,672
|
|
Retained
earnings
|
7,352
|
|
|
7,314
|
|
Accumulated other
comprehensive loss
|
(2,331)
|
|
|
(2,400)
|
|
Treasury stock, 41
million and 37 million shares, respectively
|
(3,674)
|
|
|
(2,924)
|
|
Total Whirlpool
stockholders' equity
|
4,198
|
|
|
4,773
|
|
Noncontrolling
interests
|
930
|
|
|
955
|
|
Total stockholders'
equity
|
5,128
|
|
|
5,728
|
|
Total liabilities and
stockholders' equity
|
$
|
20,005
|
|
|
$
|
19,153
|
|
WHIRLPOOL
CORPORATION
CONSOLIDATED
STATEMENTS OF CASH FLOWS
FOR THE PERIODS
ENDED DECEMBER 31
(Millions of
dollars)
|
|
|
|
Twelve Months
Ended
|
|
2017
|
|
2016
|
|
(Unaudited)
|
|
|
Operating
activities
|
|
|
|
Net
earnings
|
$
|
337
|
|
|
$
|
928
|
|
Adjustments to
reconcile net earnings to cash provided by (used in) operating
activities:
|
|
|
|
Depreciation and
amortization
|
654
|
|
|
655
|
|
Changes in assets and
liabilities:
|
|
|
|
Accounts
receivable
|
160
|
|
|
(291)
|
|
Inventories
|
(229)
|
|
|
(18)
|
|
Accounts
payable
|
180
|
|
|
37
|
|
Accrued advertising
and promotions
|
76
|
|
|
46
|
|
Accrued expenses and
current liabilities
|
(263)
|
|
|
46
|
|
Taxes deferred and
payable, net
|
239
|
|
|
(116)
|
|
Accrued pension and
postretirement benefits
|
(58)
|
|
|
(43)
|
|
Employee
compensation
|
36
|
|
|
(38)
|
|
Other
|
132
|
|
|
(3)
|
|
Cash provided by
operating activities
|
1,264
|
|
|
1,203
|
|
Investing
activities
|
|
|
|
Capital
expenditures
|
(684)
|
|
|
(660)
|
|
Proceeds from sale of
assets and business
|
61
|
|
|
63
|
|
Change in restricted
cash
|
66
|
|
|
24
|
|
Purchase of held to
maturity securities
|
(173)
|
|
|
—
|
|
Proceeds from held to
maturity securities
|
113
|
|
|
—
|
|
Investment in related
businesses
|
(35)
|
|
|
(12)
|
|
Other
|
(3)
|
|
|
(3)
|
|
Cash used in
investing activities
|
(655)
|
|
|
(588)
|
|
Financing
activities
|
|
|
|
Proceeds from
borrowings of long-term debt
|
691
|
|
|
1,012
|
|
Repayments of
long-term debt
|
(564)
|
|
|
(522)
|
|
Net proceeds from
short-term borrowings
|
367
|
|
|
55
|
|
Dividends
paid
|
(312)
|
|
|
(294)
|
|
Repurchase of common
stock
|
(750)
|
|
|
(525)
|
|
Purchase of
noncontrolling interest shares
|
(5)
|
|
|
(25)
|
|
Common stock
issued
|
34
|
|
|
26
|
|
Other
|
(14)
|
|
|
(5)
|
|
Cash used in
financing activities
|
(553)
|
|
|
(278)
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
55
|
|
|
(24)
|
|
Increase in cash and
cash equivalents
|
111
|
|
|
313
|
|
Cash and cash
equivalents at beginning of period
|
1,085
|
|
|
772
|
|
Cash and cash
equivalents at end of period
|
$
|
1,196
|
|
|
$
|
1,085
|
|
SUPPLEMENTAL INFORMATION - CONSOLIDATED
FINANCIAL STATEMENTS RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL
MEASURES
(Millions of dollars except per share data)
(Unaudited)
We supplement the reporting of our financial information
determined under U.S. generally accepted accounting principles
(GAAP) with certain non-GAAP financial measures, some of which we
refer to as "ongoing" measures, including ongoing operating profit
(loss), ongoing operating margin, earnings before interest and
taxes (EBIT), EBIT margin, ongoing EBIT, ongoing EBIT margin,
ongoing earnings, ongoing earnings per diluted share, ongoing
segment operating profit (loss), ongoing segment operating margin,
ongoing segment EBIT, ongoing segment EBIT margin, sales excluding
currency, ongoing net sales 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 is calculated by translating the current period
net sales, in functional currency, to U.S. dollars using the
prior-year period's exchange rate compared to the prior-year period
net sales. Management believes that sales excluding foreign
currency provides stockholders with a clearer basis to assess our
results over time, excluding the impact of exchange rate
fluctuations. Management believes that free cash flow provides
investors and stockholders with a relevant measure of liquidity and
a useful basis for assessing the company's ability to fund its
activities and obligations.The Company provides free cash flow
related metrics, such as free cash flow as a percentage of net
sales, as long-term management goals, not an element of its annual
financial guidance, and as such does not provide a reconciliation
of free cash flow to cash provided by (used in) operating
activities, the most directly comparable GAAP measure, for these
long-term goal metrics. Any such reconciliation 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 operating profit (loss), net earnings available to
Whirlpool per diluted share, net earnings, net earnings available
to Whirlpool, net sales, reported operating profit (loss) by
segment, and cash provided by (used in) operating activities, the
most directly comparable GAAP financial measures. GAAP net earnings
available to Whirlpool per diluted share and ongoing earnings per
diluted share are presented net of tax, while individual
adjustments in each reconciliation are presented on a pre-tax
basis; the income tax impact line item aggregates the tax impact
for these adjustments. The tax impact of individual line item
adjustments may not foot precisely to the aggregate income tax
impact amount, as each line item adjustment may include non-taxable
components. Prior-period comparisons have been recast to reflect
the tax impact of adjustments as a single adjustment. 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 2017 Ongoing Operating Profit, Ongoing
Earnings Before Interest and Taxes and Ongoing Earnings per Diluted
Share
The reconciliation provided below reconciles the non-GAAP
financial measures ongoing operating profit, ongoing earnings
before interest and taxes and ongoing earnings per diluted share,
with the most directly comparable GAAP financial measures,
operating profit, net earnings available to Whirlpool and net
earnings per diluted share available to Whirlpool, for the three
months ended December 31, 2017. Ongoing operating margin is
calculated by dividing ongoing operating profit (loss) by net
sales. Ongoing EBIT margin is calculated by dividing ongoing 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. 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
effective tax rate of 11.3%.
|
Three Months
Ended
|
|
December 31,
2017
|
|
Operating
profit
|
|
Earnings before
interest & taxes(5)
|
|
Earnings per
diluted share
|
Reported GAAP
measure
|
$
|
267
|
|
|
$
|
249
|
|
|
$
|
(3.69)
|
|
Restructuring
expense(a)
|
125
|
|
|
125
|
|
|
1.72
|
|
Income tax
impact
|
—
|
|
|
—
|
|
|
(0.19)
|
|
Normalized tax rate
adjustment(b)
|
—
|
|
|
—
|
|
|
6.26
|
|
Ongoing
measure
|
$
|
392
|
|
|
$
|
374
|
|
|
$
|
4.10
|
|
Earnings Before
Interest & Taxes Reconciliation:
|
|
|
|
|
|
|
|
Net earnings (loss)
available to Whirlpool
|
$
|
(268)
|
|
Net earnings (loss)
available to noncontrolling interests
|
(4)
|
|
Income tax expense
(benefit)
|
481
|
|
Interest
expense
|
40
|
|
Earnings before
interest & taxes(5)
|
$
|
249
|
|
|
|
|
|
Note: Numbers may not
reconcile due to rounding
|
|
|
|
Fourth-Quarter 2016 Ongoing Operating Profit, Ongoing
Earnings Before Interest and Taxes and Ongoing Earnings per Diluted
Share
The reconciliation provided below reconciles the non-GAAP
financial measures ongoing operating profit, ongoing earnings
before interest and taxes and ongoing earnings per diluted share,
with the most directly comparable GAAP financial measures,
operating profit, net earnings available to Whirlpool and net
earnings per diluted share available to Whirlpool, for the three
months ended December 31, 2016. Ongoing operating margin is
calculated by dividing ongoing operating profit by net sales.
Ongoing EBIT margin is calculated by dividing ongoing 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. 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
effective tax rate of 7.5%.
|
Three Months
Ended
|
|
December 31,
2016
|
|
Operating
profit
|
|
Earnings before
interest & taxes(5)
|
|
Earnings per
diluted share
|
Reported GAAP
measure
|
$
|
341
|
|
|
$
|
351
|
|
|
$
|
2.36
|
|
Restructuring
expense(a)
|
57
|
|
|
57
|
|
|
0.75
|
|
Acquisition related
transition costs
|
33
|
|
|
34
|
|
|
0.45
|
|
Legacy product
warranty and liability expense
|
—
|
|
|
(29)
|
|
|
(0.37)
|
|
Income tax
impact
|
—
|
|
|
—
|
|
|
(0.07)
|
|
Normalized tax rate
adjustment(b)
|
—
|
|
|
—
|
|
|
1.21
|
|
Ongoing
measure
|
$
|
431
|
|
|
$
|
413
|
|
|
$
|
4.33
|
|
Earnings Before
Interest & Taxes Reconciliation:
|
|
|
|
|
|
|
|
Net earnings
available to Whirlpool
|
$
|
180
|
|
Net earnings
available to noncontrolling interests
|
6
|
|
Income tax expense
(benefit)
|
122
|
|
Interest
expense
|
43
|
|
Earnings before
interest & taxes(5)
|
$
|
351
|
|
|
|
|
|
Note: Numbers may not
reconcile due to rounding
|
|
|
|
Ongoing Segment Operating Profit (Loss)
The reconciliation provided below reconciles the non-GAAP
financial measure ongoing segment operating profit (loss) with the
most directly comparable GAAP financial measure, reported segment
operating profit (loss), for the three months ended
December 31, 2017. Ongoing segment operating margin is
calculated by dividing ongoing segment operating profit (loss) by
segment net sales.
|
Three Months
Ended
|
|
December 31,
2017
|
|
Segment
operating
profit (loss)
|
|
Restructuring
expense(a)
|
|
Ongoing
segment
operating
profit (loss)
|
North
America
|
$
|
368
|
|
|
$
|
—
|
|
|
$
|
368
|
|
EMEA
|
4
|
|
|
—
|
|
|
4
|
|
Latin
America
|
64
|
|
|
—
|
|
|
64
|
|
Asia
|
(1)
|
|
|
—
|
|
|
(1)
|
|
Other/Eliminations
|
(168)
|
|
|
125
|
|
|
(43)
|
|
Total Whirlpool
Corporation
|
$
|
267
|
|
|
$
|
125
|
|
|
$
|
392
|
|
The reconciliation provided below reconciles the non-GAAP
financial measure ongoing segment operating profit (loss) with the
most directly comparable GAAP financial measure, reported segment
operating profit (loss), for the three months ended
December 31, 2016. Ongoing segment operating margin is
calculated by dividing ongoing segment operating profit (loss) by
segment net sales.
|
Three Months
Ended
|
|
December 31,
2016
|
|
Segment
operating
profit (loss)
|
|
Restructuring
expense(a)
|
|
Acquisition
related
transition
costs
|
|
Ongoing
segment
operating
profit (loss)
|
North
America(c)
|
$
|
349
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
349
|
|
EMEA
|
17
|
|
|
—
|
|
|
28
|
|
|
45
|
|
Latin
America(c)
|
71
|
|
|
—
|
|
|
—
|
|
|
71
|
|
Asia
|
18
|
|
|
—
|
|
|
1
|
|
|
19
|
|
Other/Eliminations(c)
|
(114)
|
|
|
57
|
|
|
4
|
|
|
(53)
|
|
Total Whirlpool
Corporation
|
$
|
341
|
|
|
$
|
57
|
|
|
$
|
33
|
|
|
$
|
431
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: Numbers may not
reconcile due to rounding
|
|
|
|
|
|
|
|
|
|
|
Full-Year 2017 Ongoing Operating Profit, Ongoing Earnings
Before Interest and Taxes and Ongoing Earnings per Diluted
Share
The reconciliation provided below reconciles the non-GAAP
financial measures ongoing operating profit, ongoing earnings
before interest and taxes and ongoing earnings per diluted share,
with the most directly comparable GAAP financial measures,
operating profit, net earnings available to Whirlpool and net
earnings per diluted share available to Whirlpool, for the twelve
months ended December 31, 2017. Ongoing operating margin is
calculated by dividing ongoing operating profit (loss) by ongoing
net sales. Ongoing EBIT margin is calculated by dividing ongoing
EBIT by ongoing net sales. Ongoing net sales excludes $(32) million primarily related to an adjustment
for trade promotion accruals in prior periods. 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. 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 tax rate of 14.7%.
|
Twelve Months
Ended
|
|
December 31,
2017
|
|
Operating
profit
|
|
Earnings before
interest & taxes(5)
|
|
Earnings per
diluted share
|
Reported GAAP
measure
|
$
|
1,136
|
|
|
$
|
1,049
|
|
|
$
|
4.70
|
|
Restructuring
expense(a)
|
275
|
|
|
275
|
|
|
3.70
|
|
Out-of-period
adjustment(d)
|
40
|
|
|
40
|
|
|
0.27
|
|
Income tax
impact
|
—
|
|
|
—
|
|
|
(0.56)
|
|
Normalized tax rate
adjustment(b)
|
—
|
|
|
—
|
|
|
5.63
|
|
Ongoing
measure
|
$
|
1,451
|
|
|
$
|
1,364
|
|
|
$
|
13.74
|
|
Earnings Before
Interest & Taxes Reconciliation:
|
|
|
|
|
|
|
|
Net earnings
available to Whirlpool
|
$
|
350
|
|
Net earnings (loss)
available to noncontrolling interests
|
(13)
|
|
Income tax expense
(benefit)
|
550
|
|
Interest
expense
|
162
|
|
Earnings before
interest & taxes(5)
|
$
|
1,049
|
|
|
|
|
|
Note: Numbers may not
reconcile due to rounding
|
|
|
|
Full-Year 2016 Ongoing Operating Profit, Ongoing Earnings
Before Interest and Taxes and Ongoing Earnings per Diluted
Share
The reconciliation provided below reconciles the non-GAAP
financial measures ongoing operating profit, ongoing earnings
before interest and taxes and ongoing earnings per diluted share,
with the most directly comparable GAAP financial measures,
operating profit, net earnings available to Whirlpool and net
earnings per diluted share available to Whirlpool, for the twelve
months ended December 31, 2016. Ongoing operating margin is
calculated by dividing ongoing operating profit by net sales.
Ongoing EBIT margin is calculated by dividing ongoing 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. 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 tax rate of 16.6%.
|
Twelve Months
Ended
|
|
December 31,
2016
|
|
Operating
profit
|
|
Earnings before
interest & taxes(5)
|
|
Earnings per
diluted share
|
Reported GAAP
measure(c)
|
$
|
1,368
|
|
|
$
|
1,275
|
|
|
$
|
11.50
|
|
Restructuring
expense(a)
|
173
|
|
|
173
|
|
|
2.24
|
|
Acquisition related
transition costs
|
82
|
|
|
86
|
|
|
1.11
|
|
Legacy product
warranty and liability expense
|
3
|
|
|
(23)
|
|
|
(0.30)
|
|
Income tax
impact
|
—
|
|
|
—
|
|
|
(0.49)
|
|
Ongoing
measure
|
$
|
1,626
|
|
|
$
|
1,511
|
|
|
$
|
14.06
|
|
Earnings Before
Interest & Taxes Reconciliation:
|
|
|
|
|
|
|
|
Net earnings
available to Whirlpool
|
$
|
888
|
|
Net earnings (loss)
available to noncontrolling interests
|
40
|
|
Income tax expense
(benefit)
|
186
|
|
Interest
expense
|
161
|
|
Earnings before
interest & taxes(5)
|
$
|
1,275
|
|
|
|
|
|
Note: Numbers may not
reconcile due to rounding
|
|
|
|
Full-Year 2018 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, 2018.
Ongoing EBIT margin is calculated by dividing ongoing 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. 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 tax rate
in the mid 20's.
|
Twelve Months
Ending
|
|
December 31,
2018
|
|
Earnings before
interest & taxes(5)
|
|
Earnings per
diluted share
|
Reported GAAP
measure(c)
|
$1,445
|
|
$12.45 -
$13.45
|
Restructuring
expense(a)
|
200
|
|
2.76
|
Income tax
impact
|
|
|
(0.71)
|
Ongoing
measure
|
$1,645
|
|
$14.50 -
$15.50
|
(5) Earnings Before Interest & Taxes (EBIT) is a non-GAAP
measure. Whirlpool 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 Whirlpool's overall net earnings
-- implicates Whirlpool's projections regarding the earnings
of Whirlpool's non wholly-owned subsidiaries and joint ventures
that cannot be quantified precisely or without unreasonable
efforts.
Note: Numbers may not reconcile due to rounding
Footnotes:
|
|
|
a.
|
RESTRUCTURING
EXPENSE - During the fourth quarter of 2014, we completed the
acquisition of Indesit S.p.A., which, due to its size, materially
changed our European footprint. In 2016 and 2017, these costs are
primarily related to Indesit restructuring and creating a more
streamlined and efficient European operation, and also relate to
certain other unique restructuring events. In 2018, these costs are
primarily related to Indesit restructuring and Embraco plant
closure in Italy, and also relate to certain other unique
restructuring events.
|
b.
|
NORMALIZED TAX
RATE ADJUSTMENT - During the fourth quarter of 2017 and 2016,
we calculated ongoing diluted EPS using an adjusted tax rate of
11.3% and 7.5%, respectively, to reconcile our full-year effective
tax rates of 14.7% and 16.6%, respectively. Normalized tax rate
adjustment for full-year 2017 includes a one-time non-cash charge
of approximately $420 million related to tax reform.
|
c.
|
ADOPTION OF NEW
ACCOUNTING STANDARDS - In 2017, the FASB issued ASU No.
2017-07, "Compensation - Retirement Benefits (Topic 715): Improving
the Presentation of Net Periodic Pension Cost and Net Periodic
Postretirement Benefit Cost". The guidance in ASU 2017-07 requires
that the service cost component of net periodic benefit cost for
pension and postretirement benefits is recorded in the same income
statement line items as other employee compensation costs arising
from services rendered during the period. Service cost is included
in cost of products sold and selling, general and administrative
expense. The other components of net periodic pension cost and
postretirement benefits cost (other components of net periodic
cost) are recorded in interest and sundry (income) expense in
2017. We retrospectively adopted the new accounting standard.
For the full year ended December 31, 2016, the
reclassification of other components of net periodic cost, from
cost of products sold and selling, general and administrative
expense to interest and sundry (income) expense was approximately
$14 million. For the three months ended December 31, 2016, the
reclassification of other components of net periodic cost, from
cost of products sold and selling, general and administrative
expense to interest and sundry (income) expense was approximately
$6 million.
|
d.
|
OUT-OF-PERIOD
ADJUSTMENT - During the year, we finalized our prior period
recorded adjustments in our Asia operating segment primarily
related to out-of-period trade promotion accruals. The 2017
total impact of these out-of-period adjustments was a decrease to
net sales of approximately $35 million and an increase to other
operating expenses of approximately $8 million, before tax. These
adjustments resulted in a decrease to net earnings available to
Whirlpool of approximately $16 million and a decrease of $0.22 in
diluted earnings per share.
|
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 twelve months
ended December 31, 2017 and 2016 and projected 2018 full-year
free cash flow with cash provided by (used in) operating
activities, the most directly comparable GAAP financial
measure.
|
|
|
|
|
|
|
|
Twelve Months
Ended December 31,
|
|
|
|
|
(millions of
dollars)
|
2017
|
2016
|
|
2018
Outlook
|
Cash provided by
(used in) operating activities
|
$1,264
|
$1,203
|
|
$1,675 -
$1,775
|
Capital expenditures,
proceeds from sale of
assets/businesses and change in restricted cash*
|
(557)
|
(573)
|
|
~(675)
|
Free cash
flow
|
$707
|
$630
|
|
$1,000 -
$1,100
|
|
|
|
|
|
Cash used in
investing activities**
|
$(655)
|
$(588)
|
|
|
Cash provided by
financing activities**
|
$(553)
|
$(278)
|
|
|
*The change in restricted cash relates to the private placement
funds paid by Whirlpool to acquire majority control of Whirlpool
China (formerly Hefei Sanyo) and which are used to fund capital and
technical resources to enhance Whirlpool China's research and
development and working capital, as required by the terms of the
Hefei Sanyo acquisition completed in October 2014.
**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