BENTON HARBOR, Mich.,
July 21, 2021 /PRNewswire/
-- Whirlpool Corporation (NYSE: WHR), committed to being the
best global kitchen and laundry company, in constant pursuit of
improving life at home, today reported financial results for the
second quarter of 2021.
|
"We are significantly
raising guidance to reflect the strength of our business driven by
sustained consumer demand and the successful implementation of our
previously announced cost-based pricing initiatives," said Marc
Bitzer, chairman and chief executive officer of Whirlpool
Corporation. "Our Q2 results together with our record performance
over the past three years impressively demonstrate our ability to
perform in a volatile environment."
|
MARC
BITZER
|
KEY RESULTS
Second-Quarter
Results
|
2021
|
2020(5)
|
Change
|
Net sales
($M)
|
$5,324
|
$4,042
|
$1,282
|
31.7%
|
Net sales excluding
currency ($M)
|
5,186
|
4,042
|
1,144
|
28.3%
|
GAAP net earnings
available to Whirlpool ($M)
|
581
|
30
|
551
|
nm
|
Ongoing
EBIT(2) ($M)
|
607
|
204
|
403
|
197.5%
|
GAAP earnings per
diluted share
|
$9.15
|
$0.47
|
$8.68
|
nm
|
Ongoing earnings per
diluted share(1)
|
$6.64
|
$2.07
|
$4.57
|
220.8%
|
CASH FLOW
Full-Year Cash
Flow
|
2021
YTD
|
2020
YTD(5)
|
Change
|
Cash provided by
(used in) operating activities ($M)
|
$646
|
$(745)
|
$1,391
|
Free cash
flow(4) ($M)
|
$769
|
$(873)
|
$1,642
|
QUARTERLY HIGHLIGHTS
- Delivered Q2 GAAP earnings per diluted share(1) of
$9.15, driven by strong top-line
growth, the execution of our cost-based price increases, and a net
gain on divestment activity
- Ongoing (non-GAAP) earnings per diluted share(1) of
$6.64 were driven by strong top-line
growth and the execution of our cost-based price increases
|
"We delivered
double-digit revenue growth, expanded EBIT in every region across
the globe, and generated significant cash flow while navigating a
challenging macroeconomic environment," said Jim Peters, chief
financial officer of Whirlpool Corporation. "Looking ahead, we are
confident in our ability to capitalize on the structural
improvements we have made in our business over the last number of
years and continue to drive shareholder value."
|
JIM
PETERS
|
REGIONAL REVIEW
North
America
|
Q2
2021
|
Q2
2020(5)
|
Change
|
Change
excluding
currency
impact
|
Net sales
($M)
|
$3,042
|
$2,501
|
21.6%
|
20.5%
|
EBIT(3)
($M)
|
$557
|
$310
|
79.7%
|
-
|
- Significant top-line growth driven by sustained strong consumer
demand
- EBIT margin(3) of 18.3 percent, compared to 12.4
percent in the same prior-year period, driven by disciplined
execution of go-to-market initiatives
Europe, Middle
East and Africa
|
Q2
2021
|
Q2
2020
|
Change
|
Change
excluding
currency
impact
|
Net sales
($M)
|
$1,250
|
$836
|
49.5%
|
38.8%
|
EBIT(3)
($M)
|
$31
|
$(66)
|
nm
|
-
|
- Year-over-year double-digit volume growth across all key
countries
- EBIT margin(3) of 2.5 percent, compared to
(7.9) percent in the same prior-year period, driven by very strong
top-line growth and cost actions
Latin
America
|
Q2
2021
|
Q2
2020
|
Change
|
Change
excluding
currency
impact
|
Net sales
($M)
|
$763
|
$434
|
75.8%
|
73.3%
|
EBIT(3)
($M)
|
$74
|
$11
|
572.7%
|
-
|
- Top-line growth driven by strong industry in Brazil and Mexico
- EBIT margin(3) of 9.7 percent, compared to 2.5
percent in the same prior-year period, driven by continued demand
and execution of cost-based pricing, offsetting unfavorable
currency
Asia
|
Q2
2021
|
Q2
2020
|
Change
|
Change
excluding
currency
impact
|
Net sales
($M)
|
$269
|
$271
|
(0.7)%
|
(4.1)%
|
EBIT(3)
($M)
|
$4
|
$(18)
|
nm
|
-
|
- Revenue decline driven by Whirlpool China partial
divestiture(6) and COVID-related shutdown in
India
- EBIT margin(3) expansion led by cost-based pricing
and cost productivity actions, with early signs of demand recovery
in India in June
FULL-YEAR 2021 OUTLOOK
- Increased full-year 2021 net sales growth to ~16 percent
from ~13 percent
- Increased GAAP earnings per diluted share to ~$26.95 from $23.10
to $24.10
- Increased ongoing earnings per diluted share(1) to
~$26.00 from $22.50 to $23.50
- Increased cash provided by operating activities to $1.95 billion from $1.70
billion
- Increased free cash flow(4) to $1.70 billion from ~$1.25
billion
- GAAP tax rate of 22 to 24 percent from 24 to 26 percent and
adjusted tax rate (non-GAAP) is unchanged at 24 to 26 percent
(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 earnings before interest and taxes (EBIT) and ongoing EBIT,
non-GAAP financial measures, to reported net earnings available to
Whirlpool, and a reconciliation of EBIT margin and ongoing EBIT
margin, non-GAAP financial measures, to net earnings margin and
other important information, appears below.
|
(3)
|
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 $53 million and $(151)
million for the second quarters of 2021 and 2020,
respectively.
|
(4)
|
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.
|
(5)
|
As adjusted
reporting - effective January 1, 2021, the Company changed its
accounting principle for inventory valuation for inventories
located in the U.S. from a last-in, first-out ("LIFO") basis to a
first-in, first-out ("FIFO") basis. All prior periods presented
have been retrospectively adjusted to apply the effects of the
change. The information in the tables herein have been updated to
reflect the retrospective accounting change. For more information
see Notes 1 and 4 to Whirlpool's Quarterly Report on Form 10-Q for
the quarter ended March 31, 2021.
|
(6)
|
Partial tender
offer by Galanz for majority ownership of the Whirlpool China
business was closed May 6, 2021.
|
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 Yummly. In 2020, the company
reported approximately $19 billion in
annual sales, 78,000 employees and 57 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") 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 future financial results, long-term value
creation goals, restructuring expectations, productivity, raw
material prices and the impact of COVID-19 on our operations. Many
risks, contingencies and uncertainties could cause actual results
to differ materially from Whirlpool's forward-looking statements.
Among these factors are: (1) COVID-19 pandemic-related business
disruptions and economic uncertainty; (2) 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; (3) 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; (4) Whirlpool's ability to maintain its reputation and brand
image; (5) the ability of Whirlpool to achieve its business
objectives and leverage its global operating platform, and
accelerate the rate of innovation; (6) Whirlpool's ability to
understand consumer preferences and successfully develop new
products; (7) Whirlpool's ability to obtain and protect
intellectual property rights; (8) acquisition and
investment-related risks, including risks associated with our past
acquisitions, and risks associated with our presence in emerging
markets; (9) risks related to our international operations,
including changes in foreign regulations, regulatory compliance and
disruptions arising from political, legal and economic instability;
(10) information technology system failures, data security
breaches, data privacy compliance, network disruptions, and
cybersecurity attacks; (11) product liability and product recall
costs; (12) the ability of suppliers of critical parts, components
and manufacturing equipment to deliver sufficient quantities to
Whirlpool in a timely and cost-effective manner; (13) our ability
to attract, develop and retain executives and other qualified
employees; (14) the impact of labor relations; (15) fluctuations in
the cost of key materials (including steel, resins, copper and
aluminum) and components and the ability of Whirlpool to offset
cost increases; (16) Whirlpool's ability to manage foreign currency
fluctuations; (17) impacts from goodwill impairment and related
charges; (18) triggering events or circumstances impacting the
carrying value of our long-lived assets; (19) inventory and other
asset risk; (20) health care cost trends, regulatory changes and
variations between results and estimates that could increase future
funding obligations for pension and postretirement benefit plans;
(21) changes in LIBOR, or replacement of LIBOR with an alternative
reference rate; (22) 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; (23) the effects and costs of governmental investigations or
related actions by third parties; (24) changes in the legal and
regulatory environment including environmental, health and safety
regulations, and taxes and tariffs; and (25) the uncertain global
economy and changes in economic conditions which affect demand for
our products. 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. World's leading kitchen and laundry appliance company
claim is based on the most recently available publicly reported
annual product sales, parts, and support revenues.
WHIRLPOOL
CORPORATION
CONSOLIDATED
STATEMENTS OF INCOME (LOSS) (UNAUDITED)
FOR THE PERIODS
ENDED JUNE 30
(Millions of
dollars, except per share data)
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
|
|
|
|
|
|
|
Net
sales
|
$
|
5,324
|
|
|
$
|
4,042
|
|
|
$
|
10,682
|
|
|
$
|
8,367
|
|
Expenses
|
|
|
|
|
|
|
|
Cost of products
sold
|
4,234
|
|
|
3,417
|
|
|
8,444
|
|
|
7,039
|
|
Gross
margin
|
1,090
|
|
|
625
|
|
|
2,238
|
|
|
1,328
|
|
Selling, general and
administrative
|
509
|
|
|
421
|
|
|
1,002
|
|
|
841
|
|
Intangible
amortization
|
10
|
|
|
15
|
|
|
27
|
|
|
30
|
|
Restructuring
costs
|
8
|
|
|
118
|
|
|
28
|
|
|
123
|
|
(Gain) loss on sale
and disposal of businesses
|
(120)
|
|
|
—
|
|
|
(120)
|
|
|
—
|
|
Operating
profit
|
683
|
|
|
71
|
|
|
1,301
|
|
|
334
|
|
Other (income)
expense
|
|
|
|
|
|
|
|
Interest and sundry
(income) expense
|
(36)
|
|
|
(15)
|
|
|
(62)
|
|
|
(16)
|
|
Interest
expense
|
45
|
|
|
49
|
|
|
90
|
|
|
92
|
|
Earnings before income
taxes
|
674
|
|
|
37
|
|
|
1,273
|
|
|
258
|
|
Income tax expense
(benefit)
|
94
|
|
|
17
|
|
|
253
|
|
|
89
|
|
Net
earnings
|
580
|
|
|
20
|
|
|
1,020
|
|
|
169
|
|
Less: Net earnings
(loss) available to noncontrolling interests
|
(1)
|
|
|
(10)
|
|
|
6
|
|
|
(15)
|
|
Net earnings available
to Whirlpool
|
$
|
581
|
|
|
$
|
30
|
|
|
$
|
1,014
|
|
|
$
|
184
|
|
Per share of
common stock
|
|
|
|
|
|
|
|
Basic net earnings
available to Whirlpool
|
$
|
9.23
|
|
|
$
|
0.47
|
|
|
$
|
16.10
|
|
|
$
|
2.94
|
|
Diluted net earnings
available to Whirlpool
|
$
|
9.15
|
|
|
$
|
0.47
|
|
|
$
|
15.96
|
|
|
$
|
2.93
|
|
Dividends
declared
|
$
|
1.40
|
|
|
$
|
1.20
|
|
|
$
|
2.65
|
|
|
$
|
2.40
|
|
Weighted-average
shares outstanding (in millions)
|
|
|
|
|
|
|
|
Basic
|
62.9
|
|
|
62.4
|
|
|
63.0
|
|
|
62.6
|
|
Diluted
|
63.5
|
|
|
62.7
|
|
|
63.5
|
|
|
63.0
|
|
WHIRLPOOL
CORPORATION
CONSOLIDATED
BALANCE SHEETS
(Millions of
dollars, except share data)
|
|
|
June 30,
2021
|
|
December 31,
2020
|
|
(Unaudited)
|
|
|
Assets
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
|
2,968
|
|
|
$
|
2,924
|
|
Accounts receivable,
net of allowance of $103 and $132, respectively
|
3,052
|
|
|
3,109
|
|
Inventories
|
2,652
|
|
|
2,301
|
|
Prepaid and other
current assets
|
731
|
|
|
795
|
|
Total current
assets
|
9,403
|
|
|
9,129
|
|
Property, net of
accumulated depreciation of $6,615 and $6,780,
respectively
|
2,734
|
|
|
3,199
|
|
Right of use
assets
|
984
|
|
|
989
|
|
Goodwill
|
2,400
|
|
|
2,496
|
|
Other intangibles,
net of accumulated amortization of $514 and $673,
respectively
|
1,976
|
|
|
2,194
|
|
Deferred income
taxes
|
2,072
|
|
|
2,189
|
|
Other noncurrent
assets
|
512
|
|
|
240
|
|
Total
assets
|
$
|
20,081
|
|
|
$
|
20,436
|
|
Liabilities and
stockholders' equity
|
|
|
|
Current
liabilities
|
|
|
|
Accounts
payable
|
$
|
4,874
|
|
|
$
|
4,834
|
|
Accrued
expenses
|
679
|
|
|
637
|
|
Accrued advertising
and promotions
|
701
|
|
|
831
|
|
Employee
compensation
|
485
|
|
|
648
|
|
Notes
payable
|
10
|
|
|
12
|
|
Current maturities of
long-term debt
|
298
|
|
|
298
|
|
Other current
liabilities
|
785
|
|
|
1,070
|
|
Total current
liabilities
|
7,832
|
|
|
8,330
|
|
Noncurrent
liabilities
|
|
|
|
Long-term
debt
|
5,001
|
|
|
5,059
|
|
Pension
benefits
|
476
|
|
|
516
|
|
Postretirement
benefits
|
158
|
|
|
166
|
|
Lease
liabilities
|
825
|
|
|
838
|
|
Other noncurrent
liabilities
|
704
|
|
|
732
|
|
Total noncurrent
liabilities
|
7,164
|
|
|
7,311
|
|
Stockholders'
equity
|
|
|
|
Common stock, $1 par
value, 250 million shares authorized, 114 million and 113 million
shares issued, respectively, and 63 million shares
outstanding
|
114
|
|
|
113
|
|
Additional paid-in
capital
|
2,989
|
|
|
2,923
|
|
Retained
earnings
|
9,572
|
|
|
8,725
|
|
Accumulated other
comprehensive loss
|
(2,459)
|
|
|
(2,811)
|
|
Treasury stock, 50
million and 49 million shares, respectively
|
(5,265)
|
|
|
(5,065)
|
|
Total Whirlpool
stockholders' equity
|
4,951
|
|
|
3,885
|
|
Noncontrolling
interests
|
134
|
|
|
910
|
|
Total stockholders'
equity
|
5,085
|
|
|
4,795
|
|
Total liabilities and
stockholders' equity
|
$
|
20,081
|
|
|
$
|
20,436
|
|
WHIRLPOOL
CORPORATION
CONSOLIDATED
STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE PERIODS
ENDED JUNE 30
(Millions of
dollars)
|
|
|
Six Months
Ended
|
|
2021
|
|
2020
|
|
|
|
|
Operating
activities
|
|
|
|
Net
earnings
|
$
|
1,020
|
|
|
$
|
169
|
|
Adjustments to
reconcile net earnings to cash provided by (used in) operating
activities:
|
|
|
|
Depreciation and
amortization
|
259
|
|
|
268
|
|
(Gain) loss on sale
and disposal of businesses
|
(120)
|
|
|
—
|
|
Changes in assets and
liabilities:
|
|
|
|
Accounts
receivable
|
(100)
|
|
|
56
|
|
Inventories
|
(527)
|
|
|
226
|
|
Accounts
payable
|
260
|
|
|
(982)
|
|
Accrued advertising
and promotions
|
(100)
|
|
|
(414)
|
|
Accrued expenses and
current liabilities
|
142
|
|
|
(135)
|
|
Taxes deferred and
payable, net
|
83
|
|
|
33
|
|
Accrued pension and
postretirement benefits
|
(61)
|
|
|
(27)
|
|
Employee
compensation
|
(119)
|
|
|
(70)
|
|
Other
|
(91)
|
|
|
131
|
|
Cash provided by (used
in) operating activities
|
646
|
|
|
(745)
|
|
Investing
activities
|
|
|
|
Capital
expenditures
|
(184)
|
|
|
(155)
|
|
Proceeds from sale of
assets and businesses
|
298
|
|
|
27
|
|
Cash held by divested
businesses
|
(393)
|
|
|
—
|
|
Cash provided by (used
in) investing activities
|
(279)
|
|
|
(128)
|
|
Financing
activities
|
|
|
|
Net proceeds from
borrowings of long-term debt
|
300
|
|
|
1,029
|
|
Net proceeds
(repayments) of long-term debt
|
(300)
|
|
|
(568)
|
|
Net proceeds
(repayments) from short-term borrowings
|
(2)
|
|
|
1,417
|
|
Dividends
paid
|
(167)
|
|
|
(155)
|
|
Repurchase of common
stock
|
(200)
|
|
|
(121)
|
|
Common stock
issued
|
75
|
|
|
3
|
|
Other
|
(38)
|
|
|
—
|
|
Cash provided by (used
in) financing activities
|
(332)
|
|
|
1,605
|
|
Effect of exchange
rate changes on cash, cash equivalents and restricted
cash
|
(1)
|
|
|
(138)
|
|
Increase (decrease)
in cash, cash equivalents and restricted cash
|
34
|
|
|
594
|
|
Cash, cash
equivalents and restricted cash at beginning of year
|
2,934
|
|
|
1,952
|
|
Cash, cash
equivalents and restricted cash at end of period
|
$
|
2,968
|
|
|
$
|
2,546
|
|
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 earnings before interest
and taxes (EBIT), EBIT margin, ongoing EBIT, ongoing EBIT margin,
ongoing earnings per diluted share, organic net sales, adjusted
effective tax rate, sales excluding currency 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 adjusted tax
rate provides investors with a meaningful, consistent comparison of
the Company's effective tax rate, excluding the pre-tax income and
tax effect of certain unique items. 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. Whirlpool does not
provide a non-GAAP reconciliation for its other forward-looking
long-term value creation and other goals, such as organic net
sales, EBIT, and gross debt leverage (gross debt/ongoing EBITDA),
as 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 net earnings available to Whirlpool
per diluted share, net earnings, net earnings available to
Whirlpool, net earnings margin, 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 important financial metrics 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 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. 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.
SECOND-QUARTER 2021 ONGOING EARNINGS BEFORE INTEREST AND
TAXES AND ONGOING EARNINGS PER DILUTED SHARE
The reconciliation provided below reconciles the non-GAAP
financial measures ongoing earnings before interest and taxes and
ongoing earnings per diluted share, with the most directly
comparable GAAP financial measures, net earnings available to
Whirlpool and net earnings per diluted share available to
Whirlpool, for the three months ended June
30, 2021. 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
second-quarter GAAP tax rate was 13.9%. 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 25.0%.
|
Three Months
Ended
|
Earnings Before
Interest & Taxes Reconciliation:
|
June 30,
2021
|
Net earnings (loss)
available to Whirlpool
|
$
|
581
|
|
Net earnings (loss)
available to noncontrolling interests
|
(1)
|
|
Income tax expense
(benefit)
|
94
|
|
Interest
expense
|
45
|
|
Earnings before
interest & taxes
|
$
|
719
|
|
Net sales
|
$
|
5,324
|
|
Net earnings
margin
|
10.9
|
%
|
|
Results
classification
|
|
Earnings before
interest & taxes
|
|
Earnings per
diluted share
|
Reported
measure
|
|
|
$
|
719
|
|
|
$
|
9.15
|
|
Restructuring
costs(a)
|
Restructuring
costs
|
|
8
|
|
|
0.13
|
|
(Gain) loss on sale
and
disposal of businesses(b)
|
(Gain) loss on sale
and
disposal of businesses
|
|
(120)
|
|
|
(1.89)
|
|
Income tax
impact
|
|
|
|
|
0.44
|
|
Normalized tax
rate
adjustment(c)
|
|
|
|
|
(1.19)
|
|
Ongoing
measure
|
|
|
$
|
607
|
|
|
$
|
6.64
|
|
Net sales
|
|
|
$
|
5,324
|
|
|
|
Ongoing EBIT
margin
|
|
|
11.4
|
%
|
|
|
|
Note: Numbers may not
reconcile due to rounding
|
SECOND-QUARTER 2020 ONGOING EARNINGS BEFORE INTEREST AND
TAXES AND ONGOING EARNINGS PER DILUTED SHARE
The reconciliation provided below reconciles the non-GAAP
financial measures ongoing earnings before interest and taxes and
ongoing earnings per diluted share, with the most directly
comparable GAAP financial measures, net earnings available to
Whirlpool and net earnings per diluted share available to
Whirlpool, for the three months ended June
30, 2020. 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
second-quarter GAAP tax rate was 45.9%. 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 22.5%.
|
Three Months
Ended
|
Earnings Before
Interest & Taxes Reconciliation:
|
June 30,
2020(5)
|
Net earnings (loss)
available to Whirlpool
|
$
|
30
|
|
Net earnings (loss)
available to noncontrolling interests
|
(10)
|
|
Income tax expense
(benefit)
|
17
|
|
Interest
expense
|
49
|
|
Earnings (loss)
before interest & taxes
|
$
|
86
|
|
Net sales
|
$
|
4,042
|
|
Net earnings
margin
|
0.7
|
%
|
|
Results
classification
|
|
Earnings before
interest & taxes(5)
|
|
Earnings per
diluted share(5)
|
Reported
measure
|
|
|
$
|
86
|
|
|
$
|
0.47
|
|
Restructuring
costs(a)
|
Restructuring
costs
|
|
118
|
|
|
1.89
|
|
Income tax
impact
|
|
|
—
|
|
|
(0.42)
|
|
Normalized tax
rate
adjustment(c)
|
|
|
—
|
|
|
0.13
|
|
Ongoing
measure
|
|
|
$
|
204
|
|
|
$
|
2.07
|
|
Net sales
|
|
|
$
|
4,042
|
|
|
|
Ongoing EBIT
margin
|
|
|
5.0
|
%
|
|
|
|
Note: Numbers may not
reconcile due to rounding
|
FULL-YEAR 2021 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, 2021.
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 22.0% to
24.0%. The aggregate income tax impact of the taxable components of
each adjustment is presented in the income tax impact line item at
our anticipated full-year adjusted tax (non-GAAP) rate between
24.0% and 26.0%.
|
|
|
Twelve Months
Ending
|
|
|
|
December 31,
2021
|
|
Results
classification
|
|
Earnings before
interest & taxes*
|
|
Earnings (loss)
per
diluted share
|
Reported
measure*
|
|
|
$2,420
|
|
~$26.95
|
Restructuring
costs(a)
|
Restructuring
costs
|
|
100
|
|
1.57
|
(Gain) loss on sale
and
disposal of businesses(b)
|
(Gain) loss on sale
and
disposal of businesses
|
|
(120)
|
|
(1.89)
|
Income tax
impact
|
|
|
—
|
|
0.08
|
Normalized tax
rate
adjustment(c)
|
|
|
|
|
(0.71)
|
Ongoing
measure
|
|
|
$2,400
|
|
~$26.00
|
|
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.
|
RESTRUCTURING
COSTS - In the second quarter of 2020, these costs
were primarily related to actions that right-size and reduce the
fixed cost structure of our North America business and certain
other centralized functions, attributable primarily to the
macroeconomic uncertainties caused by COVID-19. In the second
quarter of 2021, these costs were primarily related to actions that
right-size and reduce the fixed cost structure of our EMEA business
and other centralized functions.
|
|
|
b.
|
(GAIN) LOSS ON
SALE AND DISPOSAL OF BUSINESSES - On March 31, 2021, Galanz
launched its partial tender offer for majority ownership of
Whirlpool China. Our subsidiary tendered approximately 31% of
Whirlpool China's outstanding shares in the tender offer, with the
remainder representing a noncontrolling interest of approximately
20% in Whirlpool China. The transaction closed on May 6, 2021. In
connection with the closing of the transaction, we received cash
proceeds of $193 million and recognized a gain on sale of $284
million.
|
|
On May 17, 2021, our
subsidiary entered into a share purchase agreement to sell its
Turkish subsidiary to Arçelik. As part of the agreement, Arçelik
will assume responsibility for operating the manufacturing site in
Manisa, Turkey, following closing. The transaction closed on June
30, 2021. In connection with the closing of the transaction, we
received cash proceeds of $93 million and recognized a loss on sale
of $164 million.
|
|
The net impact
realized in our second quarter income statement is a gain on sale
of $120 million.
|
|
|
c.
|
NORMALIZED TAX
RATE ADJUSTMENT - During the second quarter of
2021, the Company calculated ongoing earnings per share using an
adjusted tax rate of 25.0% to reconcile to our anticipated
full-year effective tax rate between 24.0% and 26.0%, which
excludes the gain on sale and disposal of businesses. During the
second quarter of 2020, the Company calculated ongoing earnings per
share using an adjusted tax rate of 22.5%, to reconcile to our
anticipated full-year 2020 effective tax between 20.0% and
25.0%.
|
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 six months ended
June 30, 2021 and 2020 and 2021
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.
|
|
|
|
|
|
Six Months
Ended
|
|
|
June 30,
|
|
(millions of
dollars)
|
2021
|
|
2020
|
2021
Outlook
|
Cash provided by
(used in) operating activities
|
$646
|
|
$(745)
|
$1,950
|
Capital expenditures,
proceeds from sale of assets/businesses and change in restricted
cash
|
123
|
|
(128)
|
(250)
|
Free cash
flow
|
$769
|
|
$(873)
|
$1,700
|
|
|
|
|
|
Cash provided by
(used in) investing activities*
|
(279)
|
|
(128)
|
|
Cash provided by
(used in) financing activities*
|
(332)
|
|
1,605
|
|
|
*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