BENTON HARBOR, Mich.,
Oct. 28, 2014 /PRNewswire/ -- Whirlpool Corporation
(NYSE: WHR) announced today third-quarter GAAP net earnings of
$230 million, or $2.88 per diluted share, compared to $196 million, or $2.42 per diluted share, reported for the same
prior-year period. Ongoing business earnings per diluted
share(1) increased to a third-quarter record
$3.04, compared to $2.72 in the same prior-year period, mainly
driven by revenue growth, ongoing cost productivity and the benefit
of cost and capacity-reduction initiatives.
Net sales in the quarter were $4.8
billion compared to $4.7
billion during the same prior-year period. Excluding the
impact of both foreign currency and Brazilian (BEFIEX) tax credits,
sales increased 4 percent.
"Through continued investments in our industry leading brands
and innovative new products, along with disciplined management of
our operations, we have delivered another quarter of revenue
growth, margin expansion and record earnings," said
Jeff M. Fettig, chairman and chief
executive officer of Whirlpool Corporation. "With the
recent closings of our acquisitions of majority stakes in Indesit
and Hefei Sanyo, we are committed to
creating significant value for our shareholders by integrating our
technology leadership and broad offering of products to benefit
consumers around the globe."
Third-quarter GAAP operating profit totaled $335 million, compared to $313 million in the same prior-year period.
Record ongoing business operating profit(2) totaled
$387 million, or 8.0 percent of
sales, compared to $353 million, or
7.6 percent of sales, in the same prior-year period. Revenue
growth, ongoing cost productivity and the benefit of cost and
capacity-reduction initiatives were partially offset by higher
material costs and unfavorable currency.
During the nine months ended September 30, 2014, the
company reported cash used in operating activities of $(128) million compared to cash provided by
operating activities of $242 million
in the same prior-year period.
OUTLOOK
Whirlpool Corporation has adjusted its full-year 2014 GAAP net
earnings per diluted share guidance in order to reflect incremental
investment expenses and purchase price accounting (PPA) adjustments
related to the acquisitions of majority interests in Indesit
Company S.p.A and Hefei Rongshida Sanyo Electric Co., Ltd as
well as additional restructuring charges primarily related to
integration activities. The company now expects full-year GAAP net
earnings per diluted share of $9.40 to
$9.90. None of these adjustments impact the company's
expectations for ongoing business earnings per diluted share.
As such, the company continues to expect to report full-year
ongoing business earnings per diluted share of $11.50 to $12.00.
|
2014 EPS
Outlook
|
Prior GAAP Diluted
EPS(i)Guidance
|
$10.30–$10.80
|
Incremental
Restructuring Expense
|
(0.50)
|
Incremental
Investment Expenses
|
(0.30)
|
Inventory PPA
Adjustments
|
(0.10)
|
Current GAAP Diluted
EPS(i)Guidance
|
$9.40–$9.90
|
Restructuring
Expense
|
~ 1.45
|
Investment
Expense
|
~ 0.75
|
Inventory PPA
Adjustments
|
0.10
|
Brazilian (BEFIEX)
Tax Credits
|
(0.18)
|
Antitrust
Resolutions
|
0.04
|
Ongoing Business
Diluted EPS
|
$11.50–$12.00
|
(i) Diluted EPS
available to Whirlpool.
|
|
|
|
For the full-year 2014, the company now expects to generate free
cash flow(3) of $650 million to
$700 million. Included in this guidance are restructuring
cash outlays of up to $150 million,
capital spending of $675 million to $725
million, U.S. pension contributions of approximately
$125 million and the free cash flow
associated with the acquisitions of majority interests in Indesit
Company, S.p.A and Hefei Rongshida Sanyo Electric Co.,
Ltd.
"Given our recent acquisitions, the strong underlying
fundamentals of our business and growth opportunities in our
adjacent businesses, we have created an outstanding platform for
profitable growth," said Fettig. "We remain confident in
our ability to deliver a record level of performance in 2014 and we
will continue to execute our long-term growth strategy to increase
shareholder value. We plan to share the details of that
strategy at an Investor Day in December."
THIRD-QUARTER REGIONAL REVIEW
Whirlpool North
America
Whirlpool North America
reported third-quarter net sales of $2.8
billion compared to $2.6
billion in the same prior-year period, an increase of 6.3
percent. Excluding the impact of currency, sales increased
approximately 7 percent.
The region reported a record third-quarter operating profit of
$304 million, or approximately 11
percent of sales, compared to $289
million, or 11 percent of sales, in the same prior-year
period. Ongoing cost productivity and higher unit volumes offset
the unfavorable impact of product transitions, higher material
costs and unfavorable currency.
The company expects full-year 2014 industry unit shipments to
increase by approximately 5 percent.
Whirlpool Europe,
Middle East and Africa
Whirlpool Europe, Middle East and Africa reported third-quarter net sales of
$785 million compared to $778 million in the same prior-year period.
Excluding the impact of currency, sales increased 1.2 percent.
The region reported third-quarter operating profit of
$9 million, compared to a break-even
operating profit in the same prior-year period. Higher unit
volumes, ongoing cost productivity and the benefit of cost and
capacity-reduction initiatives more than offset unfavorable product
price and mix and unfavorable currency.
The company expects full-year 2014 industry unit shipments to be
flat to up 2 percent.
Whirlpool Latin
America
Whirlpool Latin America
reported third-quarter net sales of $1.1
billion, compared to $1.1
billion in the same prior-year period. Excluding the impact
of currency and BEFIEX tax credits, sales increased 3.2
percent.
The region reported third-quarter GAAP operating profit of
$118 million, compared to
$133 million in the same prior-year
period. During the third-quarter of 2013, the company monetized
$29 million of BEFIEX tax credits.
Ongoing business segment operating profit(4) totaled a
third-quarter record of $118 million,
or 10.4 percent of sales, compared to $104
million, or 9.4 percent of sales, in the same prior-year
period. Improved product price and mix more than offset lower unit
volumes and higher material costs.
The company now expects full-year 2014 industry unit shipments
to be down 4 to 5 percent.
Whirlpool Asia
Whirlpool Asia reported
third-quarter net sales of $157
million compared to $197
million in the same prior-year period. Excluding the impact
of currency, sales decreased approximately 22 percent.
The region reported a third-quarter operating loss of
$(8) million, or (5.0) percent of
sales, compared to an operating profit of $7
million, or 3.8 percent of sales, in the same prior-year
period. Strong volume growth and improved product price and mix in
India along with ongoing cost
productivity were more than offset by a temporary reduction in
sales in China, higher material
costs and unfavorable currency.
The company expects full-year 2014 industry unit shipments to be
flat.
(1) A reconciliation of ongoing business earnings per
diluted share, a non-GAAP financial measure, to reported net
earnings per diluted share available to Whirlpool and other
important information, appears below.
(2) A reconciliation of ongoing business operating profit, a
non-GAAP financial measure, to reported operating profit and other
important information, appears below.
(3) A reconciliation of free cash flow, a non-GAAP financial
measure, to cash provided by (used in) operating activities and
other important information, appears below.
(4) A reconciliation of ongoing business segment operating
profit (loss), a non-GAAP financial measure, to reported segment
operating profit (loss) and other important information,
appears below.
THIRD-QUARTER 2014 PRODUCT LEADERSHIP, INNOVATION AND
AWARDS
Whirlpool Corporation is at the forefront of the home
appliance industry - with deep consumer insights and the strongest
portfolio of brands worldwide. Our products are uniquely positioned
with consumers because they are as inventive as they are practical.
We are offering compelling home solutions that expand beyond our
core appliance business, delivering innovation that matters to
consumers and positioning our company for continued growth and
profitability.
Awards and Recognition
- The KitchenAid brand ultra-fine filter
dishwasher with 100% micro filtration received the number one
dishwasher rating and recommendation by a leading U.S. consumer
publication. Breakthrough technology continuously removes food
particles from the wash water, resulting in 18 percent shorter
cycles and 35 percent less water use on heavy soils.
- In July, the Whirlpool brand French
door refrigeration category received a No. #1 rating by a leading
consumer satisfaction survey institute.
- Whirlpool Latin America was
recognized for the second consecutive year as the best company in
the electronics sector by Epoca Negocios
360 magazine, a leading electronics-focused trade magazine in
Brazil.
- Whirlpool Latin America was
recognized for the third consecutive year as a top consumer care
company by both Brazilian Consumer Relations
Institute & Exame and Consumidor Moderno
magazines.
- Consul and Brastemp brand products won Best Kitchen Product and Best
Interface Design in the Brazil
idea awards, an annual home electronics
innovation awards program.
Product Innovation
- In North America, the new
Whirlpool brand Cabrio top-load laundry pair keeps clothes looking newer
longer, effortlessly with Adaptive Wash technology and the industry
exclusive ColorLast option. Intuitive
touch controls make perfect clothes care simple.
- The No. 1 rated KitchenAid brand
Ultra-Fine Filter dishwasher, available in
North America, delivers
exceptional cleaning performance with breakthrough micro filtration
that continuously removes food particles from water.
- The new Whirlpool HybridCare clothes dryer with Hybrid Heat Pump technology
is designed to regenerate energy during the drying cycle to reduce
energy consumption while providing dryer speed and performance
flexibility.
- In Europe, the
Bauknecht brand PowerDry dishwasher uses the patented 3D airflow system to
deliver the ultimate in energy efficient cleaning and spotless
drying - even on plastic.
- The Whirlpool brand Jet Chef microwave oven, offered
in Europe, integrates seamlessly
into the kitchen with oven-like aesthetics and functionality and
the industry exclusive Chef Menu that provides 90 automatic recipes
for perfectly cooked dishes.
- The Brastemp brand B.Blend multi-beverage dispenser for the Latin America market is the first all-in-one
countertop beverage dispenser that allows consumers to create their
favorite hot, cold and carbonated drinks.
Product Line Growth & Growth Beyond the Core
- The revolutionary new portable SWASH
Clothing Care System freshens clothes, helps remove wrinkles and
restores fit that is lost after wear, in 10 minutes.
- The newly launched Whirlpool brand
premium front-control ranges extend the U.S. slide-in range
collection with the patented Fit system - ensuring the best fit in
any kitchen.
- The Whirlpool brand Sirius compact washer provides best-in-class capacity,
color protection and dosing features in the high-growth compact 7kg
European market segment.
- The Bauknecht brand Combi Cookceramic cooktops
leverage innovation from our European induction ranges to expand
cooking zones and accommodate a variety of pan sizes to deliver the
largest cooking area in the market.
- In India, Whirlpool brand's IceMagic
refrigerator mixes style with the latest innovations in food
preservation, including a PowerCool zone
with chilling gel that keeps contents cool up to 12 hours even
during power outages.
About Whirlpool Corporation
Whirlpool Corporation is
the world's leading global manufacturer and marketer of major home
appliances, with annual sales of approximately $19 billion in 2013, 69,000 employees and 59
manufacturing and technology research centers around the world. The
company markets Whirlpool, Maytag, KitchenAid, Jenn-Air,
Amana, Brastemp, Consul, Bauknecht and other major brand
names. Additional information about the company can be found
at http://www.whirlpoolcorp.com.
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 material
and oil-related prices. Many risks, contingencies and uncertainties
could cause actual results to differ materially from Whirlpool's
forward-looking statements. Among these factors are:
(1) intense competition in the home appliance industry
reflecting the impact of both new and established global
competitors, including Asian and European manufacturers;
(2) Whirlpool's ability to continue its relationship with
significant trade customers and the ability of these trade
customers to maintain or increase market share; (3) acquisition and
investment-related risk, including risks associated with our
acquisitions of Hefei Sanyo and
Indesit; (4) changes in economic conditions which affect
demand for our products, including the strength of the building
industry and the level of interest rates; (5) product liability and
product recall costs; (6) inventory and other asset risk;
(7) risks related to our international operations, including
changes in foreign regulations, regulatory compliance and
disruptions arising from natural disasters or terrorist attacks;
(8) the uncertain global economy; (9) the ability of
Whirlpool to achieve its business plans, productivity improvements,
cost control, price increases, leveraging of its global operating
platform, and acceleration of the rate of innovation;
(10) Whirlpool's ability to maintain its reputation and brand
image; (11) fluctuations in the cost of key materials (including
steel, plastic, resins, copper and aluminum) and components and the
ability of Whirlpool to offset cost increases;
(12) litigation, tax, and legal compliance risk and costs,
especially costs which may be materially different from the amount
we expect to incur or have accrued for; (13) the effects and
costs of governmental investigations or related actions by third
parties; (14) Whirlpool's ability to obtain and protect
intellectual property rights; (15) the ability of suppliers of
critical parts, components and manufacturing equipment to deliver
sufficient quantities to Whirlpool in a timely and cost-effective
manner; (16) health care cost trends, regulatory changes and
variations between results and estimates that could increase future
funding obligations for pension and postretirement benefit
plans; (17) information technology system failures and
data security breaches; (18) the impact of labor relations;
(19) our ability to attract, develop and retain executives and
other qualified employees; (20) changes in the legal and
regulatory environment including environmental and health and
safety regulations; and (21) the ability of Whirlpool to manage
foreign currency fluctuations.
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.
WHIRLPOOL
CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30
(Millions of dollars, except share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Nine Months
Ended
|
|
|
2014
|
|
|
2013
|
|
|
2014
|
|
|
2013
|
Net
sales
|
$
|
4,824
|
|
$
|
4,683
|
|
$
|
13,869
|
|
$
|
13,679
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
Cost of products
sold
|
|
3,997
|
|
|
3,837
|
|
|
11,500
|
|
|
11,290
|
Gross
margin
|
|
827
|
|
|
846
|
|
|
2,369
|
|
|
2,389
|
Selling, general and
administrative
|
|
448
|
|
|
460
|
|
|
1,344
|
|
|
1,334
|
Intangible
amortization
|
|
6
|
|
|
5
|
|
|
17
|
|
|
19
|
Restructuring
costs
|
|
38
|
|
|
68
|
|
|
101
|
|
|
141
|
Operating
profit
|
|
335
|
|
|
313
|
|
|
907
|
|
|
895
|
Other income
(expense)
|
|
|
|
|
|
|
|
|
|
|
|
Interest and sundry
income (expense)
|
|
(39)
|
|
|
(16)
|
|
|
(78)
|
|
|
(73)
|
Interest
expense
|
|
(35)
|
|
|
(43)
|
|
|
(119)
|
|
|
(133)
|
Earnings before
income taxes
|
|
261
|
|
|
254
|
|
|
710
|
|
|
689
|
Income tax
expense
|
|
26
|
|
|
55
|
|
|
126
|
|
|
27
|
Net
earnings
|
|
235
|
|
|
199
|
|
|
584
|
|
|
662
|
Less: Net earnings
available to noncontrolling interests
|
|
5
|
|
|
3
|
|
|
15
|
|
|
16
|
Net earnings
available to Whirlpool
|
$
|
230
|
|
$
|
196
|
|
$
|
569
|
|
$
|
646
|
Per share of
common stock
|
|
|
|
|
|
|
|
|
|
|
|
Basic net earnings
available to Whirlpool
|
$
|
2.92
|
|
$
|
2.46
|
|
$
|
7.26
|
|
$
|
8.11
|
Diluted net earnings
available to Whirlpool
|
$
|
2.88
|
|
$
|
2.42
|
|
$
|
7.16
|
|
$
|
7.97
|
Dividends
declared
|
$
|
0.75
|
|
$
|
0.625
|
|
$
|
2.125
|
|
$
|
1.750
|
Weighted-average
shares outstanding (in millions)
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
78.4
|
|
|
79.7
|
|
|
78.3
|
|
|
79.6
|
Diluted
|
|
79.6
|
|
|
81.0
|
|
|
79.4
|
|
|
81.0
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
income
|
$
|
39
|
|
$
|
271
|
|
$
|
429
|
|
$
|
612
|
WHIRLPOOL
CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
(Millions of dollars, except share data)
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
September 30,
2014
|
|
December 31,
2013
|
Assets
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
Cash and
equivalents
|
$
|
987
|
|
$
|
1,380
|
Accounts receivable,
net of allowance of $82 and $73, respectively
|
|
2,213
|
|
|
2,005
|
Inventories
|
|
2,720
|
|
|
2,408
|
Deferred income
taxes
|
|
314
|
|
|
549
|
Prepaid and other
current assets
|
|
725
|
|
|
680
|
Total current
assets
|
|
6,959
|
|
|
7,022
|
Property, net of
accumulated depreciation of $6,162 and $6,278,
respectively
|
|
2,986
|
|
|
3,041
|
Goodwill
|
|
1,721
|
|
|
1,724
|
Other intangibles,
net of accumulated amortization of $252 and $237,
respectively
|
|
1,682
|
|
|
1,702
|
Deferred income
taxes
|
|
1,758
|
|
|
1,764
|
Other noncurrent
assets
|
|
602
|
|
|
291
|
Total
assets
|
$
|
15,708
|
|
$
|
15,544
|
Liabilities and
stockholders' equity
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
Accounts
payable
|
$
|
3,789
|
|
$
|
3,865
|
Accrued
expenses
|
|
618
|
|
|
710
|
Accrued advertising
and promotions
|
|
409
|
|
|
441
|
Employee
compensation
|
|
366
|
|
|
456
|
Notes
payable
|
|
486
|
|
|
10
|
Current maturities of
long-term debt
|
|
213
|
|
|
607
|
Other current
liabilities
|
|
521
|
|
|
705
|
Total current
liabilities
|
|
6,402
|
|
|
6,794
|
Noncurrent
liabilities
|
|
|
|
|
|
Long-term
debt
|
|
2,450
|
|
|
1,846
|
Pension
benefits
|
|
760
|
|
|
930
|
Postretirement
benefits
|
|
458
|
|
|
458
|
Other noncurrent
liabilities
|
|
327
|
|
|
482
|
Total noncurrent
liabilities
|
|
3,995
|
|
|
3,716
|
Stockholders'
equity
|
|
|
|
|
|
Common stock, $1 par
value, 250 million shares authorized, 110 million and 109
million shares issued, and 78 million and 77 million shares
outstanding, respectively
|
|
110
|
|
|
109
|
Additional paid-in
capital
|
|
2,502
|
|
|
2,453
|
Retained
earnings
|
|
6,186
|
|
|
5,784
|
Accumulated other
comprehensive loss
|
|
(1,451)
|
|
|
(1,298)
|
Treasury stock, 32
million shares
|
|
(2,149)
|
|
|
(2,124)
|
Total Whirlpool
stockholders' equity
|
|
5,198
|
|
|
4,924
|
Noncontrolling
interests
|
|
113
|
|
|
110
|
Total stockholders'
equity
|
|
5,311
|
|
|
5,034
|
Total liabilities and
stockholders' equity
|
$
|
15,708
|
|
$
|
15,544
|
WHIRLPOOL
CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE PERIODS ENDED SEPTEMBER 30
(Millions of dollars)
|
|
|
|
|
|
|
|
|
Nine Months
Ended
|
|
|
2014
|
|
|
2013
|
Operating
activities
|
|
|
|
|
|
Net
earnings
|
$
|
584
|
|
$
|
662
|
Adjustments to
reconcile net earnings to cash provided by (used in) operating
activities:
|
|
|
|
|
|
Depreciation and
amortization
|
|
397
|
|
|
397
|
Changes in assets and
liabilities:
|
|
|
|
|
|
Accounts
receivable
|
|
(302)
|
|
|
(268)
|
Inventories
|
|
(399)
|
|
|
(335)
|
Accounts
payable
|
|
44
|
|
|
160
|
Accrued advertising
and promotions
|
|
(18)
|
|
|
(1)
|
Accrued expenses and
current liabilities
|
|
(161)
|
|
|
9
|
Taxes deferred and
payable, net
|
|
40
|
|
|
(101)
|
Accrued pension and
postretirement benefits
|
|
(165)
|
|
|
(147)
|
Employee
compensation
|
|
(55)
|
|
|
(73)
|
Other
|
|
(93)
|
|
|
(61)
|
Cash provided by
(used in) operating activities
|
|
(128)
|
|
|
242
|
Investing
activities
|
|
|
|
|
|
Capital
expenditures
|
|
(422)
|
|
|
(317)
|
Proceeds from sale of
assets
|
|
18
|
|
|
3
|
Investment in related
businesses
|
|
(16)
|
|
|
-
|
Deposit related to
acquisition of Hefei Rongshida Sanyo Electric Co., Ltd.
|
|
(250)
|
|
|
-
|
Purchase of interest
in Indesit Company S.p.A.
|
|
(75)
|
|
|
-
|
Other
|
|
(3)
|
|
|
(39)
|
Cash used in
investing activities
|
|
(748)
|
|
|
(353)
|
Financing
activities
|
|
|
|
|
|
Proceeds from
borrowings of long-term debt
|
|
818
|
|
|
499
|
Repayments of
long-term debt
|
|
(606)
|
|
|
(507)
|
Dividends
paid
|
|
(165)
|
|
|
(139)
|
Net proceeds from
(repayments of) short-term borrowings
|
|
476
|
|
|
(3)
|
Common stock
issued
|
|
31
|
|
|
80
|
Purchase of treasury
stock
|
|
(25)
|
|
|
(140)
|
Purchase of
noncontrolling interest shares
|
|
(5)
|
|
|
-
|
Other
|
|
(13)
|
|
|
(9)
|
Cash provided by
(used in) financing activities
|
|
511
|
|
|
(219)
|
Effect of exchange
rate changes on cash and equivalents
|
|
(28)
|
|
|
(12)
|
Decrease in cash and
equivalents
|
|
(393)
|
|
|
(342)
|
Cash and equivalents
at beginning of period
|
|
1,380
|
|
|
1,168
|
Cash and equivalents
at end of period
|
$
|
987
|
|
$
|
826
|
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 business" measures, including ongoing business
operating profit (loss), ongoing business operating margin, ongoing
business earnings (loss) before income taxes, ongoing business
earnings per diluted share, ongoing business segment operating
profit (loss), ongoing business segment operating margin, sales
excluding foreign currency and BEFIEX, and free cash flow. Ongoing
business measures exclude items that may not be indicative of, or
are unrelated to, results from our ongoing business operations and
provide a better baseline for analyzing trends in our underlying
businesses. Sales excluding foreign currency and BEFIEX is
calculated by translating the current period net sales excluding
BEFIEX, in functional currency, to U.S. dollars using the
prior-year period's exchange rate compared to the prior-year period
net sales excluding BEFIEX. Management believes that sales
excluding foreign currency and BEFIEX provides stockholders with a
clearer basis to assess our results over time. 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. 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. 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 business financial
measures should not be considered in isolation or as a substitute
for reported operating profit (loss), earnings (loss) before income
taxes, net earnings per diluted share available to Whirlpool,
reported operating profit (loss) by segment, net sales, and cash
provided by (used in) operating activities, the most directly
comparable GAAP financial measures. These non-GAAP financial
measures reflect an additional way of viewing aspects of our
operations that, when viewed with our GAAP results and the
following reconciliations to corresponding GAAP financial measures,
provide a more complete understanding of our business. 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.
Ongoing Business Operating Profit, Ongoing Business Earnings
Before Income Taxes and Ongoing Business Earnings Per Diluted
Share
The reconciliation provided below reconciles the non-GAAP
financial measures ongoing business operating profit, ongoing
business earnings before income taxes and ongoing business earnings
per diluted share, with the most directly comparable GAAP financial
measures, operating profit, earnings before income taxes and net
earnings per diluted share available to Whirlpool, for the three
months ended September 30, 2014. Ongoing business operating
margin is calculated by dividing ongoing business operating profit
by net sales.
|
Three Months
Ended
|
|
September 30,
2014
|
|
Operating
Profit
|
|
Earnings
Before Income
Taxes
|
|
Earnings Per
Diluted Share
|
Reported GAAP
Measure
|
$
|
335
|
|
|
$
|
261
|
|
|
$
|
2.88
|
|
Restructuring
Expense(a)
|
|
38
|
|
|
|
38
|
|
|
|
0.36
|
|
Investment
Expense(b)
|
|
14
|
|
|
|
25
|
|
|
|
0.24
|
|
Antitrust
Resolutions(c)
|
|
—
|
|
|
|
2
|
|
|
|
0.02
|
|
Normalized Tax Rate
Adjustment(d)
|
|
—
|
|
|
|
—
|
|
|
|
(0.46)
|
|
Ongoing Business
Measure
|
$
|
387
|
|
|
$
|
326
|
|
|
$
|
3.04
|
|
Ongoing Business Operating Profit, Ongoing Business Earnings
Before Income Taxes and Ongoing Business Earnings Per Diluted
Share
The reconciliation provided below reconciles the non-GAAP
financial measures ongoing business operating profit, ongoing
business earnings before income taxes and ongoing business earnings
per diluted share, with the most directly comparable GAAP financial
measures, operating profit, earnings before income taxes and net
earnings per diluted share available to Whirlpool, for the three
months ended September 30, 2013. Ongoing business operating
margin is calculated by dividing ongoing business operating profit
by net sales excluding BEFIEX.
|
Three Months
Ended
|
|
September 30,
2013
|
|
Operating
Profit
|
|
Earnings
Before Income
Taxes
|
|
Earnings Per
Diluted Share
|
Reported GAAP
Measure
|
$
|
313
|
|
|
$
|
254
|
|
|
$
|
2.42
|
|
Restructuring
Expense(a)
|
68
|
|
|
|
68
|
|
|
|
0.64
|
|
Brazilian (BEFIEX)
Tax Credits(e)
|
|
(29)
|
|
|
|
(29)
|
|
|
|
(0.36)
|
|
Investment
Expense(b)
|
|
1
|
|
|
|
5
|
|
|
|
0.04
|
|
Antitrust and
Contract Resolutions(c)
|
|
—
|
|
|
|
(3)
|
|
|
|
(0.03)
|
|
U.S. Energy Tax
Credits(f)
|
|
—
|
|
|
|
—
|
|
|
|
(0.18)
|
|
Normalized Tax Rate
Adjustment(d)
|
—
|
|
|
—
|
|
|
|
0.19
|
|
Ongoing Business
Measure
|
$
|
353
|
|
|
$
|
295
|
|
|
$
|
2.72
|
|
Ongoing Business Segment Operating Profit
(Loss)
The reconciliation provided below reconciles the non-GAAP
financial measure ongoing business segment operating profit (loss)
with the most directly comparable GAAP financial measure, segment
operating profit (loss), for the three months ended
September 30, 2014. Ongoing business segment operating margin
is calculated by dividing ongoing business segment operating profit
(loss) by segment net sales.
|
Three Months
Ended
|
|
|
September 30,
2014
|
|
|
Segment
Operating
Profit (Loss)
|
|
Restructuring
Expense(a)
|
|
Investment
Expense(b)
|
|
Ongoing
Business
Segment
Operating
Profit (Loss)
|
North
America
|
$
|
304
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
304
|
|
Latin
America
|
118
|
|
|
—
|
|
|
—
|
|
|
|
118
|
|
EMEA
|
9
|
|
|
—
|
|
|
—
|
|
|
|
9
|
|
Asia
|
(8)
|
|
|
—
|
|
|
—
|
|
|
|
(8)
|
|
Other/Eliminations
|
(88)
|
|
|
38
|
|
|
14
|
|
|
|
(36)
|
|
Total Whirlpool
Corporation
|
$
|
335
|
|
|
$
|
38
|
|
|
$
|
14
|
|
|
$
|
387
|
|
The reconciliation provided below reconciles the non-GAAP
financial measure ongoing business segment operating profit with
the most directly comparable GAAP financial measure, reported
segment operating profit, for the three months ended
September 30, 2013. Ongoing business segment operating margin
is calculated by dividing ongoing business segment operating profit
by segment net sales excluding BEFIEX.
|
Three Months
Ended
|
|
|
|
|
|
|
September 30,
2013
|
|
|
|
|
|
|
Segment
Operating
Profit
|
|
Restructuring
Expense(a)
|
|
Investment
Expense(b)
|
|
Brazilian
(BEFIEX)
Tax
Credits(e)
|
|
Ongoing
Business
Segment
Operating
Profit
|
North
America
|
$
|
289
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
289
|
|
Latin
America
|
133
|
|
|
—
|
|
|
—
|
|
|
|
(29)
|
|
|
|
104
|
|
EMEA
|
—
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Asia
|
7
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
|
7
|
|
Other/Eliminations
|
(116)
|
|
|
68
|
|
|
1
|
|
|
|
—
|
|
|
|
(47)
|
|
Total Whirlpool
Corporation
|
$
|
313
|
|
|
$
|
68
|
|
|
$
|
1
|
|
|
$
|
(29)
|
|
|
$
|
353
|
|
Footnotes:
|
|
|
a.
|
During the third
quarters of 2014 and 2013, we recorded restructuring charges of $38
million and $68 million, respectively. The earnings per diluted
share impacts are calculated based on income tax impacts of $9
million and $17 million, respectively.
|
|
|
b.
|
During the third
quarters of 2014 and 2013, we recognized investment expenses of $25
million and $5 million, respectively, primarily related to the
acquisitions of majority interests in Hefei Sanyo and, specifically
for 2014, Indesit. The earnings per diluted share impacts are
calculated based on income tax impacts of $6 million and $1
million, respectively.
|
|
|
c.
|
During the third
quarter of 2014, we recognized expenses of approximately $2 million
related to antitrust resolutions. The earnings per diluted share
impact is calculated based on an income tax impact of $0 million.
During the third quarter of 2013, we reduced expenses related to
antitrust and long-standing contract resolutions by $3 million. The
diluted earnings per share impact is calculated based on an income
tax impact of $1 million.
|
|
|
d.
|
During the third
quarters of 2014 and 2013, we made adjustments to ongoing business
diluted EPS to reconcile specific items reported to a full-year
effective tax rate of 24%.
|
|
|
e.
|
During the third
quarter of 2013, we monetized Brazilian (BEFIEX) tax credits of $29
million. The earnings per diluted share impact is calculated based
on an income tax impact of $0 million.
|
|
|
f.
|
During the third
quarter of 2013, we recognized $15 million of U.S. energy tax
credits. The earnings per diluted share impact is calculated based
on an income tax benefit of $15 million.
|
Free Cash Flow
As defined by the company, free cash flow is cash provided by
(used in) operating activities after capital expenditures and
proceeds from the sale of assets and businesses. The reconciliation
provided below reconciles nine-month actual 2014 and 2013 and
projected full-year free cash flow with cash provided by (used in)
operating activities, the most directly comparable GAAP financial
measure.
|
Nine Months
Ended
September 30,
|
|
|
|
|
|
|
(millions of
dollars)
|
2014
|
2013
|
|
2014
Outlook
|
Cash Provided by
(Used In) Operating Activities
|
$
|
(128)
|
|
$
|
242
|
|
|
$
|
1,325
|
–
|
$
|
1,425
|
Capital Expenditures
and Proceeds from Sale of Assets/Businesses
|
|
(404)
|
|
|
(314)
|
|
|
|
(675)
|
–
|
|
(725)
|
Free Cash
Flow
|
$
|
(532)
|
|
$
|
(72)
|
|
|
$
|
650
|
–
|
$
|
700
|
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SOURCE Whirlpool Corporation