-- Sequential margin expansion in MDA North America for
the second consecutive quarter, driven by promotional pricing
actions
-- Q3 GAAP net earnings margin of 2.7% (Q2 5.5%); GAAP
earnings per diluted share of $2.00;
GAAP tax rate of 25%
-- Ongoing (non-GAAP) EBIT margin(1) of 5.8%
(Q2 5.3%); ongoing earnings per diluted share(2) of
$3.43 supported by favorable adjusted
(non-GAAP) tax rate of (32)%
-- Revising full-year GAAP earnings per diluted share to
approximately $0.50, impacted by the
updated GAAP tax rate and non-cash losses related to the
Europe transaction
-- Reaffirming full-year ongoing earnings per diluted
share(2) of approximately $12.00, cash provided by operating activities of
approximately $1.05 billion and free
cash flow(3) of approximately $500 million
BENTON
HARBOR, Mich., Oct. 23,
2024 /PRNewswire/ -- Whirlpool Corporation (NYSE:
WHR), today reported third-quarter 2024 financial results.
"In Q3, we continued to deliver sequential ongoing EBIT
margin expansion despite the unfavorable macroeconomic environment
we are experiencing in North
America," said Marc Bitzer.
"We remain well positioned to benefit from the eventual U.S.
housing market recovery."
MARC
BITZER, CHAIRMAN AND CHIEF EXECUTIVE OFFICER
|
Third-Quarter
Results
|
2024*
|
2023
|
Change
|
|
Net sales
($M)
|
$3,993
|
$4,926
|
(18.9) %
|
|
Organic net sales
($M)(4)
|
$4,069
|
$4,097
|
(0.7) %
|
|
GAAP net earnings
(loss) available to Whirlpool ($M)
|
$109
|
$83
|
31.3 %
|
|
Ongoing
EBIT(1) ($M)
|
$233
|
$322
|
(27.6) %
|
|
GAAP earnings (loss)
per diluted share
|
$2.00
|
$1.53
|
30.7 %
|
|
Ongoing earnings per
diluted share(2)
|
$3.43
|
$5.45
|
(37.1) %
|
|
*Excludes net sales
from our previously-owned MDA Europe business
|
|
|
|
|
Free Cash
Flow
|
2024
|
2023
|
Change
|
|
Cash provided by (used
in) operating activities ($M)
|
$(271)
|
$(322)
|
$51
|
|
Free cash
flow(3) ($M)
|
$(586)
|
$(660)
|
$74
|
"I am pleased with our continued focus on working capital
management, resulting in structural inventory
efficiency."
JIM PETERS,
CHIEF FINANCIAL AND ADMINISTRATIVE OFFICER
SEGMENT REVIEW
|
SEGMENT INFORMATION
($M)
|
|
Q3
2024
|
Q3
2023
|
Change
|
|
MDA North
America
|
Net Sales
|
|
$2,647
|
$2,766
|
(4.3) %
|
|
EBIT
|
|
$194
|
$254
|
(23.6) %
|
|
% of sales
|
|
7.3 %
|
9.2 %
|
(1.9pts)
|
|
MDA Latin
America
|
Net Sales
|
|
$846
|
$843
|
0.4 %
|
|
EBIT
|
|
$58
|
$52
|
11.5 %
|
|
% of sales
|
|
6.9 %
|
6.2 %
|
0.7pts
|
|
MDA
Asia
|
Net Sales
|
|
$239
|
$219
|
9.1 %
|
|
EBIT
|
|
$7
|
$5
|
40.0 %
|
|
% of sales
|
|
2.9 %
|
2.3 %
|
0.6pts
|
|
SDA
Global
|
Net Sales
|
|
$261
|
$269
|
(3.0) %
|
|
EBIT
|
|
$37
|
$49
|
(24.5) %
|
|
% of sales
|
|
14.2 %
|
18.2 %
|
(4.0pts)
|
|
MDA: Major Domestic
Appliances; SDA: Small Domestic Appliances
|
|
|
|
|
MDA NORTH AMERICA
- Excluding currency, net sales decreased 4.2 percent
year-over-year, from unfavorable price/mix, which significantly
improved vs. last quarter
- EBIT margin(5) decreased year-over-year, driven by
unfavorable price/mix; however, sequentially up by 100 basis points
from Q2
MDA LATIN AMERICA
- Excluding currency, net sales increased 8.8 percent
year-over-year, with strong industry demand more than offsetting
unfavorable price/mix
- EBIT margin(5) increased year-over-year, driven by
fixed cost leverage and cost take out actions
MDA ASIA
- Excluding currency, net sales increased 10.3 percent
year-over-year, with increased volumes from share gains
- EBIT margin(5) increased year-over-year, driven by
improved price/mix and fixed cost leverage
SDA GLOBAL
- Excluding currency, net sales decreased 3.3 percent
year-over-year, with strong direct-to-consumer sales and product
launches offset by soft industry
- EBIT margin(5) decreased year-over-year, impacted by
continued marketing investments in new product launches
FULL-YEAR 2024 OUTLOOK
|
Guidance
Summary
|
2023
Reported
|
2023 Like for
Like (6)
|
2024
Guidance
|
|
Net sales
($M)
|
$19,455
|
~$16,900
|
~$16,900
|
|
Cash provided by
operating activities ($M)
|
$915
|
N/A
|
~$1,050
|
|
Free cash flow
($M)(3)
|
$366
|
N/A
|
~$500
|
|
GAAP net earnings
margin (%)
|
2.5 %
|
N/A
|
~1.0%
|
|
Ongoing EBIT margin
(%)(1)
|
6.1 %
|
~6.9%
|
~6.0%
|
|
GAAP earnings per
diluted share
|
$8.72
|
N/A
|
~$0.50
|
|
Ongoing earnings per
diluted share(2)
|
$16.16
|
N/A
|
~$12.00
|
|
GAAP tax
rate
|
13.0 %
|
N/A
|
~65%
|
|
Adjusted (non-GAAP) tax
rate
|
(6.7) %
|
N/A
|
(18) -
(22)%
|
- Revising full-year GAAP earnings per diluted share to
approximately $0.50, primarily
impacted by the non-cash charge related to the Europe transaction
- Reaffirming full-year ongoing earnings per diluted
share(2) of approximately $12.00, including ~$300
million of cost actions
- Reaffirming cash provided by operating activities of
approximately $1.05 billion and free
cash flow(3) of approximately $500 million; includes $250-$300 million
of MDA Europe cash usage in 2024
- Approximately $400 million of
2024 dividends
|
|
|
(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)
|
A reconciliation of
organic net sales, a non-GAAP financial measure, to reported net
sales and other important information, appears
below.
|
|
(5)
|
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 $(45) million and $(96)
million for the third quarters of 2024 and 2023,
respectively.
|
|
(6)
|
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
closed April 2024. The like-for-like GAAP net earnings margin and
corresponding reconciliation cannot be provided without
unreasonable effort or expense. 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 a leading kitchen and
laundry appliance company, in constant pursuit of improving life at
home and inspiring generations with our brands. The company is
driving meaningful innovation to meet the evolving needs of
consumers through its iconic brand portfolio, including
Whirlpool, KitchenAid, JennAir, Maytag,
Amana, Brastemp, Consul, 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
future financial results, long-term value creation goals,
restructuring expectations, productivity, raw material prices and
related costs, supply chain, portfolio transformation expectations,
asset impairment, debt repayment expectations, and housing
recovery-related benefits on our operations 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, 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, other public health
emergency-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; (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)
Whirlpool's 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; (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. 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 SEPTEMBER 30
(Millions of
dollars, except per share data)
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
Net
sales
|
$
3,993
|
|
$
4,926
|
|
$
12,471
|
|
$
14,367
|
|
Expenses
|
|
|
|
|
|
|
|
|
Cost of products
sold
|
3,350
|
|
4,127
|
|
10,561
|
|
11,989
|
|
Gross
margin
|
643
|
|
799
|
|
1,910
|
|
2,378
|
|
Selling, general and
administrative
|
395
|
|
473
|
|
1,266
|
|
1,436
|
|
Intangible
amortization
|
7
|
|
18
|
|
24
|
|
39
|
|
Restructuring
costs
|
8
|
|
5
|
|
81
|
|
14
|
|
Loss (gain) on sale and
disposal of businesses
|
(32)
|
|
46
|
|
260
|
|
286
|
|
Operating
profit
|
265
|
|
257
|
|
279
|
|
603
|
|
Other (income)
expense
|
|
|
|
|
|
|
|
|
Interest and sundry
(income) expense
|
(6)
|
|
(10)
|
|
(27)
|
|
77
|
|
Interest
expense
|
92
|
|
95
|
|
275
|
|
259
|
|
Earnings (loss) before
income taxes
|
179
|
|
172
|
|
31
|
|
267
|
|
Income tax expense
(benefit)
|
45
|
|
86
|
|
(85)
|
|
268
|
|
Equity method
investment income (loss), net of tax
|
(20)
|
|
(1)
|
|
(31)
|
|
(3)
|
|
Net earnings
(loss)
|
114
|
|
85
|
|
85
|
|
(4)
|
|
Less: Net
earnings (loss) available to noncontrolling interests
|
5
|
|
2
|
|
16
|
|
6
|
|
Net earnings (loss)
available to Whirlpool
|
$
109
|
|
$
83
|
|
$
69
|
|
$
(10)
|
|
Per share of common
stock
|
|
|
|
|
|
|
|
|
Basic net earnings
(loss) available to Whirlpool
|
$
2.01
|
|
$
1.53
|
|
$
1.27
|
|
$
(0.18)
|
|
Diluted net earnings
(loss) available to Whirlpool
|
$
2.00
|
|
$
1.53
|
|
$
1.26
|
|
$
(0.18)
|
|
Dividends
declared
|
$
1.75
|
|
$
1.75
|
|
$
5.25
|
|
$
5.25
|
|
Weighted-average
shares outstanding (in millions)
|
|
|
|
|
|
|
|
|
Basic
|
55.2
|
|
55.0
|
|
55.0
|
|
54.9
|
|
Diluted
|
55.2
|
|
55.3
|
|
55.0
|
|
54.9
|
|
WHIRLPOOL
CORPORATION
CONSOLIDATED
CONDENSED BALANCE SHEETS
(Millions of
dollars, except share data)
|
|
|
September
30, 2024
|
|
December
31, 2023
|
|
(Unaudited)
|
|
|
|
Assets
|
|
|
|
|
Current
assets
|
|
|
|
|
Cash and cash
equivalents
|
$
1,084
|
|
$
1,570
|
|
Accounts receivable,
net of allowance of $50 and $47, respectively
|
1,644
|
|
1,529
|
|
Inventories
|
2,277
|
|
2,247
|
|
Prepaid and other
current assets
|
577
|
|
717
|
|
Assets held for
sale
|
—
|
|
144
|
|
Total current
assets
|
5,582
|
|
6,207
|
|
Property, net of
accumulated depreciation of $5,426 and $5,259,
respectively
|
2,254
|
|
2,234
|
|
Right of use
assets
|
856
|
|
721
|
|
Goodwill
|
3,328
|
|
3,330
|
|
Other intangibles, net
of accumulated amortization of $461 and $440,
respectively
|
3,104
|
|
3,124
|
|
Deferred income
taxes
|
1,503
|
|
1,317
|
|
Other noncurrent
assets
|
533
|
|
379
|
|
Total assets
|
$
17,160
|
|
$
17,312
|
|
Liabilities and
stockholders' equity
|
|
|
|
|
Current
liabilities
|
|
|
|
|
Accounts
payable
|
$
3,456
|
|
$
3,598
|
|
Accrued
expenses
|
459
|
|
491
|
|
Accrued advertising
and promotions
|
496
|
|
603
|
|
Employee
compensation
|
189
|
|
238
|
|
Notes
payable
|
609
|
|
17
|
|
Current maturities of
long-term debt
|
350
|
|
800
|
|
Other current
liabilities
|
410
|
|
614
|
|
Liabilities held for
sale
|
—
|
|
587
|
|
Total current
liabilities
|
5,969
|
|
6,948
|
|
Noncurrent
liabilities
|
|
|
|
|
Long-term
debt
|
6,382
|
|
6,414
|
|
Pension
benefits
|
107
|
|
147
|
|
Postretirement
benefits
|
102
|
|
107
|
|
Lease
liabilities
|
737
|
|
612
|
|
Other noncurrent
liabilities
|
570
|
|
547
|
|
Total noncurrent
liabilities
|
7,898
|
|
7,827
|
|
Stockholders'
equity
|
|
|
|
|
Common stock, $1 par
value, 250 million shares authorized, 115 million and
114 million shares
issued, respectively, and 55 million and 55 million
shares
outstanding,
respectively
|
115
|
|
114
|
|
Additional paid-in
capital
|
3,453
|
|
3,078
|
|
Retained
earnings
|
8,140
|
|
8,358
|
|
Accumulated other
comprehensive loss
|
(1,652)
|
|
(2,178)
|
|
Treasury stock, 60
million and 60 million shares, respectively
|
(7,014)
|
|
(7,010)
|
|
Total Whirlpool
stockholders' equity
|
3,042
|
|
2,362
|
|
Noncontrolling
interests
|
251
|
|
175
|
|
Total stockholders'
equity
|
3,293
|
|
2,537
|
|
Total liabilities and
stockholders' equity
|
$
17,160
|
|
$
17,312
|
|
WHIRLPOOL
CORPORATION
CONSOLIDATED
CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE PERIODS
ENDED SEPTEMBER 30
(Millions of
dollars)
|
|
|
Nine Months
Ended
|
|
2024
|
|
2023
|
|
Operating
activities
|
|
|
|
|
Net earnings
(loss)
|
$
85
|
|
$
(4)
|
|
Adjustments to
reconcile net earnings to cash provided by (used in) operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
249
|
|
262
|
|
Loss (gain) on sale and
disposal of businesses
|
260
|
|
286
|
|
Changes in assets and
liabilities:
|
|
|
|
|
Accounts
receivable
|
(275)
|
|
(359)
|
|
Inventories
|
(18)
|
|
(282)
|
|
Accounts
payable
|
(76)
|
|
(274)
|
|
Accrued advertising
and promotions
|
(137)
|
|
(140)
|
|
Accrued expenses and
current liabilities
|
(22)
|
|
50
|
|
Taxes deferred and
payable, net
|
(237)
|
|
161
|
|
Accrued pension and
postretirement benefits
|
(15)
|
|
(45)
|
|
Employee
compensation
|
22
|
|
57
|
|
Other
|
(107)
|
|
(34)
|
|
Cash provided by (used
in) operating activities
|
(271)
|
|
(322)
|
|
Investing
activities
|
|
|
|
|
Capital
expenditures
|
(315)
|
|
(338)
|
|
Proceeds from sale of
assets and businesses
|
95
|
|
9
|
|
Acquisition of
businesses, net of cash acquired
|
—
|
|
(14)
|
|
Cash held by divested
businesses
|
(245)
|
|
—
|
|
Other
|
(1)
|
|
—
|
|
Cash provided by (used
in) investing activities
|
(466)
|
|
(343)
|
|
Financing
activities
|
|
|
|
|
Net proceeds from
borrowings of long-term debt
|
300
|
|
304
|
|
Net repayments of
long-term debt
|
(801)
|
|
(250)
|
|
Net proceeds
(repayments) from short-term borrowings
|
613
|
|
30
|
|
Dividends
paid
|
(287)
|
|
(290)
|
|
Repurchase of common
stock
|
(50)
|
|
—
|
|
Sale of minority
interest in subsidiary
|
462
|
|
—
|
|
Common stock
issued
|
—
|
|
4
|
|
Other
|
(15)
|
|
(1)
|
|
Cash provided by (used
in) financing activities
|
222
|
|
(203)
|
|
Effect of exchange rate
changes on cash and cash equivalents
|
(68)
|
|
28
|
|
Less: change in cash
classified as held for sale
|
—
|
|
5
|
|
Increase (decrease) in
cash and cash equivalents
|
(583)
|
|
(835)
|
|
Cash and cash
equivalents at beginning of year (1)
|
1,667
|
|
1,958
|
|
Cash and cash
equivalents at end of period
|
$
1,084
|
|
$
1,123
|
|
|
(1) Cash and cash equivalent at the
beginning of 2024 include $1,570 million of cash and cash
equivalents and cash of $97 million classified as held for
sale as of December 31, 2023.
|
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, net debt leverage (Net
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.
Net debt leverage: Net debt to ongoing earnings before
interest, taxes, depreciation, and amortization (EBITDA) ratio is
net debt outstanding, including long-term debt, current maturities
of long-term debt, and notes payable, less cash and cash
equivalents, divided by ongoing EBITDA. Management believes that
net 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, future year free cash flow
benefit as a result of Europe
transaction closing, ROIC and net 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.
THIRD-QUARTER 2024 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 September 30, 2024. 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 third-quarter GAAP tax rate was
25%. The aggregate income tax impact of the taxable components of
each adjustment is presented in the income tax impact line item at
our third-quarter adjusted tax rate (non-GAAP) of (32)%.
|
Three Months
Ended
|
|
Earnings Before
Interest & Taxes Reconciliation:
|
September 30,
2024
|
|
Net earnings (loss)
available to Whirlpool
|
$
109
|
|
Net earnings (loss)
available to noncontrolling interests
|
5
|
|
Income tax expense
(benefit)
|
45
|
|
Interest
expense
|
92
|
|
Earnings before
interest & taxes
|
$
251
|
|
Net sales
|
$
3,993
|
|
Net earnings (loss)
margin
|
2.7 %
|
|
Results
classification
|
|
Earnings before
interest & taxes
|
|
Earnings per
diluted share
|
|
Reported
measure
|
|
|
$
251
|
|
$
2.00
|
|
Restructuring
expense(a)
|
Restructuring
expense
|
|
8
|
|
0.14
|
|
Impact of M&A
transactions(b)
|
(Gain) loss on sale
and
disposal of businesses &
Selling, general and
administrative
|
|
(26)
|
|
(0.47)
|
|
Total income tax
impact
|
|
|
|
|
(0.10)
|
|
Normalized tax rate
adjustment(c)
|
|
|
|
|
1.86
|
|
Ongoing
measure
|
|
|
$
233
|
|
$
3.43
|
|
Net sales
|
|
|
$
3,993
|
|
|
|
Ongoing EBIT
margin
|
|
|
5.8 %
|
|
|
Note: Numbers may not reconcile due to rounding.
THIRD-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 September 30, 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 third-quarter GAAP tax rate was
49.4%. The aggregate income tax impact of the taxable components of
each adjustment is presented in the income tax impact line item at
our third-quarter adjusted tax rate (non-GAAP) of (33.0)%.
|
Three Months
Ended
|
|
Earnings Before
Interest & Taxes Reconciliation:
|
September 30,
2023
|
|
Net earnings (loss)
available to Whirlpool
|
$
83
|
|
Net earnings (loss)
available to noncontrolling interests
|
2
|
|
Income tax expense
(benefit)
|
86
|
|
Interest
expense
|
95
|
|
Earnings before
interest & taxes
|
$
266
|
|
Net sales
|
$
4,926
|
|
Net earnings (loss)
margin
|
1.7 %
|
|
Results
classification
|
|
Earnings before
interest & taxes
|
|
Earnings per
diluted share
|
|
Reported
measure
|
|
|
$
266
|
|
$
1.53
|
|
Impact of M&A
transactions(b)
|
(Gain) loss on sale
and
disposal of businesses &
Selling, general and
administrative
|
|
56
|
|
1.02
|
|
Total income tax
impact
|
|
|
|
|
0.34
|
|
Normalized tax rate
adjustment(c)
|
|
|
|
|
2.56
|
|
Ongoing
measure
|
|
|
$
322
|
|
$
5.45
|
|
Net sales
|
|
|
$
4,926
|
|
|
|
Ongoing EBIT
margin
|
|
|
6.5 %
|
|
|
Note: Numbers may not reconcile due to rounding.
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. Net
earnings margin is calculated by dividing net earnings available to
Whirlpool by net sales. Ongoing EBIT margin is calculated by
dividing ongoing EBIT by net sales. EBIT margin is calculated by
dividing EBIT by net sales. The earnings per diluted share GAAP
measure and ongoing measure are presented net of tax, while each
adjustment is presented on a pre-tax basis. Our anticipated
full-year GAAP tax rate is approximately 65%. 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 (18) - (22)%.
|
|
|
Twelve Months
Ending
December 31,
2024
|
|
Results
classification
|
|
Earnings before
interest & taxes
|
|
Earnings per
diluted share
|
|
Reported
measure
|
|
|
~$600
|
|
~$0.50
|
|
Restructuring
Expense(a)
|
|
|
~$85
|
|
~$1.50
|
|
Impact of M&A
transactions(b)
|
(Gain) loss on sale
and
disposal of businesses &
Selling, general and
administrative
|
|
~$290
|
|
~$5.25
|
|
Total income tax
impact
|
|
|
|
|
~$1.25
|
|
Normalized tax rate
adjustment(c)
|
|
|
|
|
~$3.25
|
|
Ongoing
measure
|
|
|
~$1,000
|
|
~$12.00
|
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 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 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(b)
|
(Gain) loss on sale
and
disposal of businesses &
Selling, general and
administrative & including
equity method investment
|
|
181
|
|
3.27
|
|
Legacy EMEA legal
matters
|
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
SECOND-QUARTER 2024 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 June
30, 2024. 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 second-quarter GAAP tax rate was (687)%. The
aggregate income tax impact of the taxable components of each
adjustment is presented in the income tax impact line item at our
second-quarter adjusted tax rate (non-GAAP) of (14)%.
|
Three Months
Ended
|
|
Earnings Before
Interest & Taxes Reconciliation:
|
June 30,
2024
|
|
Net earnings (loss)
available to Whirlpool
|
$
219
|
|
Net earnings (loss)
available to noncontrolling interests
|
6
|
|
Income tax expense
(benefit)
|
(206)
|
|
Interest
expense
|
93
|
|
Earnings before
interest & taxes
|
$
112
|
|
Net sales
|
$
3,989
|
|
Net earnings (loss)
margin
|
5.5 %
|
|
Results
classification
|
|
Earnings before
interest & taxes
|
|
Earnings per
diluted share
|
|
Reported
measure
|
|
|
$
112
|
|
$
3.96
|
|
Restructuring
expense(a)
|
Restructuring
expense
|
|
50
|
|
0.91
|
|
Impact of M&A
transactions(b)
|
(Gain) loss on sale
and
disposal of businesses &
Selling, general and
administrative
|
|
50
|
|
0.90
|
|
Total income tax
impact
|
|
|
|
|
0.26
|
|
Normalized tax rate
adjustment(c)
|
|
|
|
|
(3.64)
|
|
Ongoing
measure
|
|
|
$
212
|
|
$
2.39
|
|
Net sales
|
|
|
$
3,989
|
|
|
|
Ongoing EBIT
margin
|
|
|
5.3 %
|
|
|
Note: Numbers may not reconcile due to rounding.
|
FOOTNOTES
|
|
|
a.
|
RESTRUCTURING
EXPENSE - In March 2024, the Company committed to workforce
reduction plans. $23 million was recorded during the first quarter,
of which $14 million was employee termination costs and $9 million
was other associated exit costs. During the second quarter of 2024,
the Company evaluated additional restructuring actions as part of
the Company's organizational simplification efforts. Total costs
for these actions were $58 million, of which $8 million
was recorded during the third quarter of 2024. These costs were
primarily for employee termination costs.
|
|
|
|
b.
|
IMPACT OF M&A
TRANSACTIONS - On January 16, 2023, the Company signed a
contribution agreement to contribute our European major domestic
appliance business into a newly formed entity with Arcelik. In
connection with the transaction, the Company recorded a loss on
disposal of $294 million for the nine months ended September
30, 2024, of which $2 million was incurred in the third
quarter of 2024.
|
|
|
|
The Company also
recorded a gain of approximately $34 million during the third
quarter of 2024 related to the sale of the Company's
Brastemp-branded water filtration subscription business related to
our portfolio transformation.
|
|
|
|
Additionally, the
Company incurred other unique transaction related costs related to
portfolio transformation for a total of $23 million for the nine
months ended September 30, 2024, of which $6 million was incurred
in the third quarter of 2024. These transaction costs are recorded
in Selling, General and Administrative expenses on our Consolidated
Condensed Statements of Comprehensive Income (Loss).
|
|
|
|
For the nine months
ended September 30, 2023, a loss on disposal of $286 million was
recorded, of which $46 million was recorded during the third
quarter. Additionally, the Company incurred other unique
transaction related costs related to portfolio transformation for a
total of $10 million for the three months ended September 30, 2023.
These transaction costs are recorded in Selling, General and
Administrative expenses on our Consolidated Condensed Statements of
Comprehensive Income (Loss).
|
|
|
|
c.
|
NORMALIZED TAX RATE
ADJUSTMENT - During the third quarter of 2024, the Company
calculated a GAAP tax rate of 25%. Ongoing earnings per share was
calculated using an adjusted tax rate of (32)%, which excludes the
non-taxable impact of M&A transactions of approximately $(26)
million recorded in the third quarter of 2024 and certain other tax
impacts related to Europe transaction. The Company expects a
full-year GAAP tax rate of approximately 65% and adjusted effective
tax rate of (18) - (22)%, revised from the prior quarter estimate
of 25% and (8)%, respectively, primarily due to updated legal
entity restructuring impacts as we have further refined the
estimated benefits of our tax planning strategies since closing the
Europe transaction.
|
|
|
|
During the third
quarter of 2023, the Company calculated ongoing earnings per share
using an adjusted effective tax rate of (33)%, to reconcile to our
full-year ongoing 2023 adjusted effective tax rate between (5.0)%
to 0%, which excludes the non-tax deductible impact of M&A
transactions and reflects certain expected tax benefits related to
legal entity restructuring transactions.
|
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.
|
In billions
|
2023 As
Reported
|
Q2-Q4 2023
MDA
Europe*
|
2023 Like
for Like
|
|
Net Sales
|
$
19.46
|
$
2.56
|
$
16.90
|
|
Ongoing EBIT
|
$
1.19
|
$
0.03
|
$
1.16
|
|
Ongoing EBIT
Margin
|
6.1 %
|
1.2 %
|
~6.9%
|
Note: Numbers may not reconcile due to rounding
*Q2-Q4 historical segment financial data (unaudited).
FREE CASH FLOW
Free cash flow is cash provided by (used in) operating
activities after capital expenditures. The reconciliation provided
below reconciles nine months ended September
30, 2024 and 2023 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.
|
Nine Months
Ended
|
|
|
|
September
30,
|
|
|
|
(millions of
dollars)
|
2024
|
|
2023
|
|
2024
Outlook
|
|
Cash provided by (used
in) operating activities
|
$(271)
|
|
$(322)
|
|
~$1,050
|
|
Capital
expenditures
|
(315)
|
|
(338)
|
|
~(550)
|
|
Free cash
flow
|
$(586)
|
|
$(660)
|
|
~$500
|
|
|
|
|
|
|
|
Cash provided by (used
in) investing activities*
|
(466)
|
|
(343)
|
|
|
|
Cash provided by (used
in) financing activities*
|
222
|
|
(203)
|
|
|
|
|
*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.
|
Free cash flow is cash provided by (used in) operating
activities after capital expenditures. The reconciliation provided
below reconciles three months ended September 30, 2024 free cash flow with cash
provided by (used in) operating activities, the most directly
comparable GAAP financial measure. Free cash flow as a percentage
of net sales is calculated by dividing free cash flow by net
sales.
|
Three Months
Ended
|
|
(millions of
dollars)
|
September 30,
2024
|
|
Cash provided by (used
in) operating activities
|
$
214
|
|
Capital
expenditures
|
(87)
|
|
Free cash
flow
|
$
127
|
|
|
|
Cash provided by (used
in) investing activities
|
(34)
|
|
Cash provided by (used
in) financing activities
|
(279)
|
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 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
|
|
(millions of
dollars)
|
December 31,
2023
|
|
Cash provided by (used
in) operating activities
|
$915
|
|
Capital
expenditures
|
(549)
|
|
Free cash
flow
|
$366
|
|
|
|
Cash provided by (used
in) investing activities
|
(553)
|
|
Cash provided by (used
in) financing activities
|
(792)
|
ORGANIC NET SALES
The reconciliation provided below reconciles the non-GAAP
financial measure organic net sales to GAAP reported net sales, for
three months ended September 30, 2023
and 2024 for the Whirlpool business.
|
Three Months
Ended
|
|
|
|
September
30,
|
|
|
|
(Approximate impact
in dollars)
|
2023
|
|
2024
|
|
Change
|
|
Net Sales
|
$4,926
|
|
$3,993
|
|
(18.9) %
|
|
Less: EMEA Divested
Business
|
829
|
|
—
|
|
|
|
Less:
Currency
|
—
|
|
(76)
|
|
|
|
Organic Net
Sales
|
4,097
|
|
4,069
|
|
(0.7) %
|
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SOURCE Whirlpool Corporation