BENTON HARBOR, Mich.,
April 23, 2018 /PRNewswire/ -- Whirlpool Corporation
(NYSE: WHR) announced today first-quarter GAAP net earnings of
$94 million, or $1.30 per diluted share, compared to $153 million, or $2.01 per diluted share, reported for the same
prior-year period. First-quarter ongoing earnings per diluted
share(1) were $2.81,
compared to $2.50 in the same
prior-year period.
"We are pleased with the progress on our previously-announced
global cost-based price increases and fixed cost reduction
initiatives, which resulted in expansion of both ongoing
EBIT(2) and ongoing earnings per share(1),"
said Marc Bitzer, chief executive
officer of Whirlpool Corporation. "Our first-quarter results give
us further confidence in our long-term value creation strategy, and
we remain focused on delivering strong levels of margin expansion
and improved cash conversion this year."
First-quarter net sales were $4.9
billion, compared to $4.8
billion in the same prior-year period. Excluding the impact
of currency, sales decreased 0.7 percent.
First-quarter earnings before interest and taxes
(EBIT)(2) were $151
million, or 3.1 percent of sales, compared to $239 million, or 5.0 percent of sales, in the
same prior-year period. First-quarter ongoing EBIT(2)
was $295 million, or 6.0 percent of
sales, compared to $285 million, or
6.0 percent of sales, in the same prior-year period. During the
quarter, the favorable impacts of product price/mix and
restructuring benefits more than offset raw material inflation,
unit volume declines and foreign currency impacts.
For the three months ended March 31, 2018, the Company
reported cash used in operating activities of $(713) million, compared to $(435) million in the same prior-year period. The
Company reported free cash flow(4) of $(756) million for the first three months of
2018, compared to $(497) million in
the same prior-year period, primarily driven by the timing of
certain payments and accruals.
FIRST-QUARTER REGIONAL REVIEW
Whirlpool North
America
Whirlpool North America
reported first-quarter net sales of $2.5
billion, compared to $2.4
billion in the same prior-year period. Excluding the impact
of currency, sales increased 2.5 percent.
The region reported first-quarter EBIT(3) of
$288 million, or 11.4 percent of
sales, compared to $275 million, or
11.2 percent of sales, in the same prior-year period. During the
quarter, the favorable impacts of product price/mix and unit volume
growth more than offset raw material inflation.
Whirlpool Europe,
Middle East and Africa
Whirlpool Europe, Middle East and Africa reported first-quarter net sales of
$1.1 billion, compared to
$1.0 billion in the same prior-year
period. Excluding the impact of currency, sales decreased 8.1
percent.
The region reported first-quarter EBIT(3) of
$(27) million, or (2.5) percent of
sales, compared to $(23) million, or
(2.3) percent of sales, in the same prior-year period. During the
quarter, the favorable impacts of product price/mix and cost
productivity were more than offset by raw material inflation, unit
volume declines and foreign currency impacts.
Whirlpool Latin
America
Whirlpool Latin America
reported first-quarter net sales of $898
million, compared to $921
million in the same prior-year period. Excluding the impact
of currency, sales decreased 3.2 percent.
The region reported first-quarter EBIT(3) of
$57 million, or 6.3 percent of sales,
compared to $66 million, or 7.2
percent of sales, in the same prior-year period. During the
quarter, the favorable impacts of product price/mix and
restructuring benefits were more than offset by unfavorable cost
productivity and raw material inflation.
Whirlpool Asia
Whirlpool Asia reported
first-quarter net sales of $448
million, compared to $435
million in the same prior-year period. Excluding the impact
of currency, sales decreased 1.9 percent.
The region reported first-quarter EBIT(3) of
$19 million, or 4.2 percent of sales,
compared to $24 million, or 5.6
percent of sales, in the same prior-year period. During the
quarter, the favorable impact of cost productivity was more than
offset by raw material inflation and foreign currency impacts.
OUTLOOK
For the full-year 2018, the Company expects GAAP earnings per
diluted share of $12.30 to
$13.30 and continues to expect
ongoing earnings per diluted share(1) of $14.50 to $15.50,
as the Company's updated full-year expected tax rate of
approximately 20 percent and favorable product price/mix is
expected to be partially offset by lower global revenue growth and
increased raw material inflation.
For the full-year 2018, the Company continues to expect to
generate cash from operating activities of approximately
$1.7 billion to $1.8 billion and free cash flow(4) 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(4), capital spending of approximately
$675 million.
"We remain focused on maintaining appropriate flexibility to
manage external volatility and continue executing our balanced
approach to capital allocation," said Jim
Peters, chief financial officer of Whirlpool Corporation.
"This flexibility will enable us to return strong levels of cash to
shareholders this year through share repurchases and our increased
quarterly dividend."
(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 other important
information, appears below.
(3) Segment EBIT represents our consolidated EBIT broken down
by the Company's reportable segments. Consolidated EBIT also
includes corporate "Other/Eliminations" of $(186) million.
(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.
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.
Website Disclosure
We routinely post important
information for investors on our website,
whirlpoolcorp.com, in the "Investors" section. We intend to
use 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
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, and the impact of the changing retail
environment; (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) impacts from goodwill impairment and
related charges; (16) triggering events or circumstances impacting
the carrying value of our long-lived assets; (17) inventory and
other asset risk; (18) the uncertain global economy and changes in
economic conditions which affect demand for our products; (19)
health care cost trends, regulatory changes and variations between
results and estimates that could increase future funding
obligations for pension and postretirement benefit plans; (20)
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; (21) the
effects and costs of governmental investigations or related actions
by third parties; and (22) changes in the legal and regulatory
environment including environmental, health and safety regulations,
and taxes and tariffs.
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 claim is
based on most recently available publicly reported annual revenues
among leading appliance manufacturers.
WHIRLPOOL
CORPORATION
|
CONSOLIDATED
CONDENSED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)
|
FOR THE PERIODS
ENDED MARCH 31
|
(Millions of
dollars, except per share data)
|
|
|
Three Months
Ended
|
|
2018
|
|
2017
|
Net
sales
|
$
|
4,911
|
|
|
$
|
4,786
|
|
Expenses
|
|
|
|
Cost of products
sold
|
4,099
|
|
|
3,960
|
|
Gross
margin
|
812
|
|
|
826
|
|
Selling, general and
administrative
|
505
|
|
|
499
|
|
Intangible
amortization
|
20
|
|
|
17
|
|
Restructuring
costs
|
144
|
|
|
46
|
|
Operating
profit
|
143
|
|
|
264
|
|
Other (income)
expense
|
|
|
|
Interest and sundry
(income) expense
|
(8)
|
|
|
25
|
|
Interest
expense
|
42
|
|
|
41
|
|
Earnings before
income taxes
|
109
|
|
|
198
|
|
Income tax
expense
|
15
|
|
|
40
|
|
Net
earnings
|
94
|
|
|
158
|
|
Less: Net earnings
available to noncontrolling interests
|
—
|
|
|
5
|
|
Net earnings
available to Whirlpool
|
$
|
94
|
|
|
$
|
153
|
|
Per share of
common stock
|
|
|
|
Basic net earnings
available to Whirlpool
|
$
|
1.31
|
|
|
$
|
2.05
|
|
Diluted net earnings
available to Whirlpool
|
$
|
1.30
|
|
|
$
|
2.01
|
|
Dividends
declared
|
$
|
1.10
|
|
|
$
|
1.00
|
|
Weighted-average
shares outstanding (in millions)
|
|
|
|
Basic
|
71.2
|
|
|
74.8
|
|
Diluted
|
72.1
|
|
|
76.0
|
|
|
|
|
|
Comprehensive
income
|
$
|
82
|
|
|
$
|
238
|
|
WHIRLPOOL
CORPORATION
|
CONSOLIDATED
CONDENSED BALANCE SHEETS
|
(Millions of
dollars, except share data)
|
|
|
(Unaudited)
|
|
|
|
March 31,
2018
|
|
December 31,
2017
|
Assets
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
|
1,041
|
|
|
$
|
1,196
|
|
Accounts receivable,
net of allowance of $161 and $157, respectively
|
2,657
|
|
|
2,665
|
|
Inventories
|
3,346
|
|
|
2,988
|
|
Prepaid and other
current assets
|
1,047
|
|
|
1,081
|
|
Total current
assets
|
8,091
|
|
|
7,930
|
|
Property, net of
accumulated depreciation of $6,982 and $6,825,
respectively
|
3,970
|
|
|
4,033
|
|
Goodwill
|
3,157
|
|
|
3,118
|
|
Other intangibles,
net of accumulated amortization of $503 and $476,
respectively
|
2,604
|
|
|
2,591
|
|
Deferred income
taxes
|
2,170
|
|
|
2,013
|
|
Other noncurrent
assets
|
347
|
|
|
353
|
|
Total
assets
|
$
|
20,339
|
|
|
$
|
20,038
|
|
Liabilities and
stockholders' equity
|
|
|
|
Current
liabilities
|
|
|
|
Accounts
payable
|
$
|
4,643
|
|
|
$
|
4,797
|
|
Accrued
expenses
|
695
|
|
|
674
|
|
Accrued advertising
and promotions
|
574
|
|
|
853
|
|
Employee
compensation
|
382
|
|
|
414
|
|
Notes
payable
|
1,060
|
|
|
450
|
|
Current maturities of
long-term debt
|
632
|
|
|
376
|
|
Other current
liabilities
|
957
|
|
|
941
|
|
Total current
liabilities
|
8,943
|
|
|
8,505
|
|
Noncurrent
liabilities
|
|
|
|
Long-term
debt
|
4,190
|
|
|
4,392
|
|
Pension
benefits
|
996
|
|
|
1,029
|
|
Postretirement
benefits
|
348
|
|
|
352
|
|
Other noncurrent
liabilities
|
642
|
|
|
632
|
|
Total noncurrent
liabilities
|
6,176
|
|
|
6,405
|
|
Stockholders'
equity
|
|
|
|
Common stock, $1 par
value, 250 million shares authorized, 112 million shares
issued, and 71 million shares outstanding
|
112
|
|
|
112
|
|
Additional paid-in
capital
|
2,754
|
|
|
2,739
|
|
Retained
earnings
|
7,440
|
|
|
7,352
|
|
Accumulated other
comprehensive loss
|
(2,344)
|
|
|
(2,331)
|
|
Treasury stock, 41
million shares
|
(3,673)
|
|
|
(3,674)
|
|
Total Whirlpool
stockholders' equity
|
4,289
|
|
|
4,198
|
|
Noncontrolling
interests
|
931
|
|
|
930
|
|
Total stockholders'
equity
|
5,220
|
|
|
5,128
|
|
Total liabilities and
stockholders' equity
|
$
|
20,339
|
|
|
$
|
20,038
|
|
WHIRLPOOL
CORPORATION
|
CONSOLIDATED
CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
|
FOR THE PERIODS
ENDED MARCH 31
|
(Millions of
dollars)
|
|
|
Three Months
Ended
|
|
2018
|
|
2017
|
Operating
activities
|
|
|
|
Net
earnings
|
$
|
94
|
|
|
$
|
158
|
|
Adjustments to
reconcile net earnings to cash provided by (used in) operating
activities:
|
|
|
|
Depreciation and
amortization
|
177
|
|
|
163
|
|
Changes in assets and
liabilities:
|
|
|
|
Accounts
receivable
|
85
|
|
|
14
|
|
Inventories
|
(375)
|
|
|
(415)
|
|
Accounts
payable
|
(259)
|
|
|
(159)
|
|
Accrued advertising
and promotions
|
(287)
|
|
|
(228)
|
|
Accrued expenses and
current liabilities
|
(28)
|
|
|
6
|
|
Taxes deferred and
payable, net
|
(40)
|
|
|
(38)
|
|
Accrued pension and
postretirement benefits
|
(16)
|
|
|
(18)
|
|
Employee
compensation
|
(24)
|
|
|
65
|
|
Other
|
(40)
|
|
|
17
|
|
Cash used in
operating activities
|
(713)
|
|
|
(435)
|
|
Investing
activities
|
|
|
|
Capital
expenditures
|
(66)
|
|
|
(88)
|
|
Proceeds from sale of
assets and business
|
6
|
|
|
3
|
|
Proceeds from
held-to-maturity securities
|
60
|
|
|
—
|
|
Investment in related
businesses
|
(2)
|
|
|
—
|
|
Other
|
(1)
|
|
|
(1)
|
|
Cash used in
investing activities
|
(3)
|
|
|
(86)
|
|
Financing
activities
|
|
|
|
Repayments of
long-term debt
|
(4)
|
|
|
(255)
|
|
Net proceeds from
short-term borrowings
|
599
|
|
|
800
|
|
Dividends
paid
|
(78)
|
|
|
(73)
|
|
Repurchase of common
stock
|
—
|
|
|
(150)
|
|
Common stock
issued
|
5
|
|
|
23
|
|
Other
|
—
|
|
|
(6)
|
|
Cash provided by
financing activities
|
522
|
|
|
339
|
|
Effect of exchange
rate changes on cash, cash equivalents and restricted
cash
|
25
|
|
|
26
|
|
Decrease in cash,
cash equivalents and restricted cash
|
(169)
|
|
|
(156)
|
|
Cash, cash
equivalents and restricted cash at beginning of period
|
1,293
|
|
|
1,240
|
|
Cash, cash
equivalents and restricted cash at end of period
|
$
|
1,124
|
|
|
$
|
1,084
|
|
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, ongoing earnings per diluted share, 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, net earnings available to Whirlpool per diluted
share, net earnings, net earnings available to Whirlpool, net
sales, and cash provided by (used in) operating activities, the
most directly comparable GAAP financial measures. We also disclose
ongoing segment EBIT and segment EBIT as important financial
metrics used by the Company 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. 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.
First-Quarter 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 three months ended March 31, 2018. 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. The aggregate income tax impact of the taxable
components of each adjustment is presented in the income tax impact
line item at our first-quarter adjusted effective tax rate of
20%.
|
Three Months
Ended
|
|
March 31,
2018
|
|
Earnings before
interest & taxes(5)
|
|
Earnings per
diluted share
|
Reported
measure
|
$
|
151
|
|
|
$
|
1.30
|
|
Restructuring
expense(a)
|
144
|
|
|
2.00
|
|
Income tax
impact
|
—
|
|
|
(0.40)
|
|
Normalized tax rate
adjustment(b)
|
—
|
|
|
(0.09)
|
|
Ongoing
measure
|
$
|
295
|
|
|
$
|
2.81
|
|
Earnings Before Interest & Taxes Reconciliation:
Net earnings (loss)
available to Whirlpool
|
$
|
94
|
|
Net earnings (loss)
available to noncontrolling interests
|
—
|
|
Income tax expense
(benefit)
|
15
|
|
Interest
expense
|
42
|
|
Earnings before
interest & taxes(5)
|
$
|
151
|
|
|
Note: Numbers may not
reconcile due to rounding
|
First-Quarter 2017 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 March 31, 2017. 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. The aggregate income tax impact of the taxable
components of each adjustment is presented in the income tax impact
line item at our first-quarter adjusted effective tax rate of
20%.
|
Three Months
Ended
|
|
March 31,
2017
|
|
Earnings before
interest & taxes(5)
|
|
Earnings per
diluted share
|
Reported
measure
|
$
|
239
|
|
|
$
|
2.01
|
|
Restructuring
expense(a)
|
46
|
|
|
0.61
|
|
Income tax
impact
|
—
|
|
|
(0.12)
|
|
Ongoing
measure
|
$
|
285
|
|
|
$
|
2.50
|
|
Earnings Before
Interest & Taxes Reconciliation:
|
|
Net earnings (loss)
available to Whirlpool
|
$
|
153
|
|
Net earnings (loss)
available to noncontrolling interests
|
5
|
|
Income tax expense
(benefit)
|
40
|
|
Interest
expense
|
41
|
|
Earnings before
interest & taxes(5)
|
$
|
239
|
|
|
Note: Numbers may not
reconcile due to rounding
|
Ongoing Segment Earnings Before Interest and Taxes
The reconciliation provided below reconciles the non-GAAP
financial measure ongoing segment EBIT with reported EBIT, for the
three months ended March 31, 2018. Ongoing segment EBIT margin
is calculated by dividing ongoing segment EBIT by segment net
sales.
|
Three Months
Ended
|
|
March 31,
2018
|
|
Segment earnings
before interest and taxes
|
|
Restructuring
expense(a)
|
|
Ongoing segment
earnings before interest and taxes
|
North
America
|
$
|
288
|
|
|
$
|
—
|
|
|
$
|
288
|
|
EMEA
|
(27)
|
|
|
—
|
|
|
(27)
|
|
Latin
America
|
57
|
|
|
—
|
|
|
57
|
|
Asia
|
19
|
|
|
—
|
|
|
19
|
|
Other/Eliminations
|
(186)
|
|
|
144
|
|
|
(42)
|
|
Total Whirlpool
Corporation
|
$
|
151
|
|
|
$
|
144
|
|
|
$
|
295
|
|
The reconciliation provided below reconciles the non-GAAP
financial measure ongoing segment EBIT with reported EBIT, for the
three months ended March 31, 2017. Ongoing segment EBIT margin
is calculated by dividing ongoing segment EBIT by segment net
sales.
|
Three Months
Ended
|
|
March 31,
2017
|
|
Segment earnings
before interest and taxes
|
|
Restructuring
expense(a)
|
|
Ongoing segment
earnings before interest and taxes
|
North
America
|
$
|
275
|
|
|
$
|
—
|
|
|
$
|
275
|
|
EMEA
|
(23)
|
|
|
—
|
|
|
(23)
|
|
Latin
America
|
66
|
|
|
—
|
|
|
66
|
|
Asia
|
24
|
|
|
—
|
|
|
24
|
|
Other/Eliminations
|
(103)
|
|
|
46
|
|
|
(57)
|
|
Total Whirlpool
Corporation
|
$
|
239
|
|
|
$
|
46
|
|
|
$
|
285
|
|
|
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. 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. 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 of approximately
20%.
|
Twelve Months
Ending
|
|
December 31,
2018
|
|
Earnings before
interest & taxes(5)
|
|
Earnings per
diluted share
|
Reported
measure
|
$1,415
|
|
$12.30 -
$13.30
|
Restructuring
expense(a)
|
200
|
|
2.77
|
Income tax
impact
|
—
|
|
$(0.57)
|
Ongoing
measure
|
$1,615
|
|
$14.50 -
$15.50
|
|
(5) 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.
|
|
Note: Numbers may not
reconcile due to rounding
|
Full-Year 2017 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 ended December 31, 2017.
Ongoing EBIT margin is calculated by dividing ongoing EBIT by
ongoing net sales. EBIT margin is calculated by dividing EBIT by
net sales. Ongoing net sales excludes $(35)
million primarily related to an adjustment for trade
promotion accruals in the second and third quarters. 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
|
|
Earnings before
interest & taxes(5)
|
|
Earnings per
diluted share
|
Reported
measure
|
$
|
1,049
|
|
|
$
|
4.70
|
|
Restructuring
expense(a)
|
275
|
|
|
3.70
|
|
Out-of-period
adjustment(c)
|
40
|
|
|
0.27
|
|
Income tax
impact
|
—
|
|
|
(0.56)
|
|
Normalized tax rate
adjustment(b)
|
—
|
|
|
5.63
|
|
Ongoing
measure
|
$
|
1,364
|
|
|
$
|
13.74
|
|
Earnings Before Interest & Taxes Reconciliation:
Net earnings (loss)
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
|
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 2017, these costs were 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 an Embraco plant closure in
Italy, and also relate to certain other unique restructuring
events.
|
b.
|
NORMALIZED TAX
RATE ADJUSTMENT - During the first quarter of 2018, we
calculated ongoing diluted EPS using an adjusted tax rate of 20% to
reconcile to our anticipated full-year effective tax rate of
approximately 20%. Normalized tax rate adjustment for full-year
2017 includes a one-time non-cash charge of approximately $420
million related to tax reform.
|
c.
|
OUT-OF-PERIOD
ADJUSTMENT - During 2017, we adjusted our Asia operating
segment results for 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 three months
ended March 31, 2018 and 2017 and projected 2018 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.
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
|
|
(millions of
dollars)
|
2018
|
2017
|
|
2018 Outlook
|
Cash provided by
(used in) operating activities
|
$(713)
|
$(435)
|
|
$1,675 -
$1,775
|
Capital expenditures,
proceeds from sale of assets/businesses and change in restricted
cash*
|
(43)
|
(62)
|
|
~(675)
|
Free cash
flow
|
$(756)
|
$(497)
|
|
$1,000 -
$1,100
|
|
|
|
|
|
Cash provided by
(used in) investing activities**
|
$(3)
|
$(86)
|
|
|
Cash provided by
financing activities**
|
$522
|
$339
|
|
|
*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