Whirlpool Corporation Reports Resilient First-quarter 2020 Results With Ample Liquidity To Withstand Current Economic Uncertainty
BENTON HARBOR, Mich., April 30, 2020 /PRNewswire/ -- Whirlpool Corporation (NYSE: WHR) today reported financial results for the first-quarter of 2020.
"Whirlpool has a 108 year history
of leading through challenges,
and we are leveraging our
leadership position to support
our employees, consumers, and
communities during this difficult
time, while driving our business
forward." said Marc Bitzer,
chairman and chief executive
officer of Whirlpool Corporation.
"Our strong performance in the
first quarter reflects the hard
work of our employees, our
relentless focus on delivering on
our commitment to consumers, and
the resilience of our business.
Our fixed cost discipline and
strong liquidity position enable
us to weather this crisis and
emerge in a position of strength.
Ultimately, we believe the
underlying momentum we saw early
in the quarter will return, and
we are well prepared to win in
the economic recovery."
-Marc Bitzer,
Chairman and
Chief Executive
Officer
KEY RESULTS
First-Quarter
Results 2020 2019 Change
---
Net sales ($M) $4,325 $4,760 $(435) (9.1)%
Organic net
sales(5) ($M) $4,433 $4,448 $(15) (0.3)%
GAAP net earnings
available to
Whirlpool ($M) $152 $471 $(319) (67.7)%
Ongoing EBIT(2)
($M) $266 $298 $(32) (10.7)%
GAAP earnings per
diluted share $2.41 $7.31 $(4.90) (67.0)%
Ongoing earnings
per diluted
share(1) $2.82 $3.11 $(0.29) (9.3)%
---
CASH FLOW
Full-Year Cash Flow 2020 2019 Change
YTD YTD
---
Cash provided by (used
in) operating activities
($M) $(814) $(895) 9.1%
Free Cash Flow(4) ($M) $(870) $(969) 10.2%
---
QUARTERLY HIGHLIGHTS
-- Q1 GAAP net earnings margin of 3.5 percent of sales, compared to 9.9
percent of sales, as prior year results were favorably impacted by a
$127 million gain related to a Brazil indirect tax credit and certain
favorable tax items.
-- Ongoing (non-GAAP) EBIT margin((2) )of 6.1 percent of sales, compared to
6.3 percent of sales in the same prior-year period as COVID-19 related
disruptions of nearly 150 basis points were nearly offset by aggressive
cost actions.
-- Strong liquidity position with a cash balance of $2.8 billion as of
March 31, 2020 and approximately $2 billion available in remaining
committed credit facilities.
"Our first quarter results
demonstrate the agility and
resiliency of our global operations,
highlighted by a solid performance
in North America and Latin America
and strong cash flow improvement."
said Jim Peters, chief financial
officer of Whirlpool Corporation.
"During the quarter, we continued to
build on our multi-year efforts to
strengthen our balance sheet and
ensure the long-term health of the
business. We took aggressive actions
to protect cash and build liquidity
to solidify our ability to manage
through the ongoing COVID-19
pandemic. We remain committed to
delivering long-term shareholder
value and recently declared a
quarterly dividend for the 74th
year, reflecting the confidence we
have in our business now and in the
future."
-Jim Peters,
Chief Financial
Officer
REGIONAL REVIEW
North America Q1 2020 Q1 2019 Change Change
excluding
currency
impact
---
Net sales ($M) $2,540 $2,535 0.2% 0.3%
EBIT(3) ($M) $303 $312 (3.0)%
---
-- Revenue growth and solid EBIT((3)), demonstrating the region's strength.
-- First-quarter EBIT margin((3)) was 11.9 percent of sales, compared to
12.3 percent of sales, in the same prior-year period, as strong cost
discipline partially offset negative price/mix.
Europe,
Middle
East
and
Africa Q1 2020 Q1 2019 Change Change
excluding
currency
impact
---
Net
sales
($M) $879 $1,004 (12.4)% (10.2)%
EBIT(3)
($M) $(15) $(21) 28.5%
---
-- Continued momentum from strategic initiatives delivers EBIT((3))
improvement for the fifth consecutive quarter, despite COVID-19
disruptions.
-- First-quarter EBIT margin((3)) was (1.7) percent of sales, compared to
(2.1) percent of sales, in the same prior-year period, driven by the
favorable impact of cost takeout actions.
Latin America Q1 2020 Q1 2019 Change Change
excluding
currency
impact
---
Net sales ($M) $618 $875 (29.4)% (20.7)%
EBIT(3) ($M) $31 $45 (29.7)%
---
-- Organic net sales (non-GAAP)((5)) increased 23.3 percent, driven by
share gains in Brazil.
-- First-quarter EBIT margin((3)) was flat to prior year, as strong cost
discipline offset unfavorable currency. The Latin America region's
first-quarter 2019 results include $24 million of EBIT((3)) related to
the Embraco compressor business.
Asia Q1 2020 Q1 2019 Change Change
excluding
currency
impact
---
Net sales ($M) $288 $371 (22.3)% (20.2)%
EBIT(3) ($M) $(16) $7
nm
---
-- China demand declined sharply in the quarter due to COVID-19 related
disruptions, significantly impacting business results. China showing
early signs of recovery with manufacturing plants now operating at
normal levels.
-- India business operations negatively impacted by COVID-19 related
disruptions, including the government-enforced shutdown.
2020 PERSPECTIVE
While the full impact of COVID-19 on business results remains uncertain, the Company is providing the following perspective on 2020:
-- Expects full-year 2020 net sales decline of approximately 13 percent to
18 percent (organic net sales((5)) decline of 10 percent to 15 percent).
-- Targeting over $500 million in net cost takeout (including raw materials
savings) in 2020 through the following actions:
-- Adjust supply chain and labor levels to match demand environment
-- Aggressively reduce structural and discretionary costs
-- Capture raw material deflation opportunity
-- Continue to effectively and efficiently manage working capital
(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 and Ongoing 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
$(42) million and $50 million for the first
quarters of 2020 and 2019, respectively.
Ongoing segment EBIT includes certain
adjustments to segment EBIT, and a
reconciliation and other important information,
appears below.
(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) Organic net sales excludes the impact of foreign
currency and the Embraco divestiture.
About Whirlpool Corporation
Whirlpool Corporation (NYSE: WHR) is the leading major appliance manufacturer in the world, with approximately $20 billion in annual sales, 77,000 employees and 59 manufacturing and technology research centers in 2019. The company markets Whirlpool, KitchenAid, Maytag, Consul, Brastemp, Amana, Bauknecht, JennAir, 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 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 expected earnings per share, cash flow, productivity, capital allocation commitments, and raw material prices, and the impact of the COVID-19 pandemic on our operations and financial condition, our ability to weather the COVID-19 crisis, protect margins and liquidity in 2020, achieve net cost and raw material savings in 2020, capture raw material deflation opportunities, mitigate volume deleveraging and margin deterioration during the crisis, and the adequacy of our liquidity resources and financial covenant buffers during the crisis, and our continued investment, pension repayment, rebound actions and recovery timing expectations and ability to win in the economic recovery following the crisis. 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, including direct-to-consumer sales; (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, data privacy compliance, 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) changes in LIBOR, or replacement of LIBOR with an alternative reference rate; (21) 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; (22) the effects and costs of governmental investigations or related actions by third parties; and (23) changes in the legal and regulatory environment including environmental, health and safety regulations, and taxes and tariffs; and (24) COVID-19 pandemic-related business disruption and economic uncertainty. 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.
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
2020 2019
Net sales $
4,325 $
4,760
Expenses
Cost of products sold 3,625 3,948
Gross margin 700 812
Selling, general and
administrative 420 505
Intangible amortization 15 18
Restructuring costs 5 26
Operating profit 260 263
Other (income) expense
Interest and sundry
(income) expense (1) (130)
Interest expense 42 51
Earnings before income
taxes 219 342
Income tax expense
(benefit) 72 (132)
Net earnings 147 474
Less: Net earnings (loss)
available to
noncontrolling interests (5) 3
Net earnings available to
Whirlpool $
152 $
471
Per share of common stock
Basic net earnings
available to Whirlpool $
2.42 $
7.36
Diluted net earnings
available to Whirlpool $
2.41 $
7.31
Dividends declared $
1.20 $
1.15
Weighted-average shares outstanding (in
millions)
Basic 62.8 64.0
Diluted 63.3 64.5
Comprehensive income $
52 $
567
WHIRLPOOL CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
(Millions of dollars, except share data)
(Unaudited)
March 31, December 31,
2019
2020
Assets
Current assets
Cash and cash equivalents $
2,837 $
1,952
Accounts receivable, net of
allowance of $124 and $132,
respectively 1,931 2,198
Inventories 2,543 2,438
Prepaid and other current assets 851 810
Total current assets 8,162 7,398
Property, net of accumulated
depreciation of $6,388 and $6,444,
respectively 3,156 3,301
Right of use assets 886 921
Goodwill 2,424 2,440
Other intangibles, net of
accumulated amortization of $600
and $593, respectively 2,185 2,225
Deferred income taxes 2,132 2,238
Other noncurrent assets 450 358
Total assets $
19,395 $
18,881
Liabilities and stockholders' equity
Current liabilities
Accounts payable $
4,065 4,547
Accrued expenses 527 652
Accrued advertising and promotions 505 949
Employee compensation 285 450
Notes payable 2,392 294
Current maturities of long-term
debt - 559
Other current liabilities 802 918
Total current liabilities 8,576 8,369
Noncurrent liabilities
Long-term debt 4,662 4,140
Pension benefits 501 542
Postretirement benefits 315 322
Lease liabilities 720 778
Other noncurrent liabilities 641 612
Total noncurrent liabilities 6,839 6,394
Stockholders' equity
Common stock, $1 par value, 250
million shares authorized, 112
million shares issued, and 62
million and 63 million shares
outstanding, respectively 112 112
Additional paid-in capital 2,811 2,806
Retained earnings 7,947 7,870
Accumulated other comprehensive loss (2,715) (2,618)
Treasury stock, 50 million and 49
million shares, respectively (5,095) (4,975)
Total Whirlpool stockholders' equity 3,060 3,195
Noncontrolling interests 920 923
Total stockholders' equity 3,980 4,118
Total liabilities and stockholders'
equity $
19,395 $
18,881
WHIRLPOOL CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE PERIODS ENDED MARCH 31
(
Millions of dollars)
Three Months Ended
2020 2019
Operating activities
Net earnings $
147 $
474
Adjustments to reconcile net earnings to
cash provided by (used in) operating
activities:
Depreciation and amortization 135 142
Changes in assets and liabilities:
Accounts receivable 125 (39)
Inventories (203) (475)
Accounts payable (244) (182)
Accrued advertising and
promotions (415) (271)
Accrued expenses and current
liabilities (193) 29
Taxes deferred and payable,
net 40 (190)
Accrued pension and
postretirement benefits (11) (23)
Employee compensation (145) (44)
Other (50) (316)
Cash provided by (used in)
operating activities (814) (895)
Investing activities
Capital expenditures (82) (85)
Proceeds from sale of assets
and business 26 2
Other - (3)
Cash provided by (used in)
investing activities (56) (86)
Financing activities
Net proceeds from borrowings
of long-term debt 541 695
Repayments of long-term debt (566) (939)
Net proceeds (repayments)
from short-term borrowings 2,111 991
Dividends paid (75) (73)
Repurchase of common stock (121) (50)
Common stock issued 3 3
Cash provided by (used in)
financing activities 1,893 627
Effect of exchange rate
changes on cash, cash
equivalents and restricted
cash (138) 11
Increase (decrease) in cash,
cash equivalents and
restricted cash 885 (343)
Cash, cash equivalents and
restricted cash at beginning
of year 1,952 1,538
Cash, cash equivalents and
restricted cash at end of
year $
2,837 $
1,195
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 organic net sales provides stockholders with a clearer basis to assess our results over time, excluding the impact of exchange rate fluctuations and divestitures. 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 the items noted below. 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/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 and ongoing 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.
First-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 March 31, 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 first- quarter GAAP tax rate was 32.6%. 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 tax rate (non-GAAP) of 22.5%.
Three Months
Ended
Earnings Before Interest & Taxes March 31,
Reconciliation: 2020
Net earnings (loss) available to
Whirlpool $
152
Net earnings (loss) available to
noncontrolling interests (5)
Income tax expense (benefit) 72
Interest expense 42
Earnings before interest & taxes $
261
Net sales $
4,325
Net earnings margin 3.5
%
Results classification Earnings before Earnings per
interest & diluted share
taxes
Reported measure $
261 $
2.41
Restructuring
costs(a)
Restructuring costs 5 0.08
Income tax impact (0.02)
Normalized tax rate adjustment(b) 0.35
Ongoing measure $
266 $
2.82
Net sales $
4,325
Ongoing EBIT margin 6.1
%
Note: Numbers may not reconcile due to rounding
First-Quarter 2019 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, 2019. 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 first- quarter GAAP tax rate was (38.5)%. 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 tax rate (non-GAAP) of 17.5%.
Three Months
Ended
Earnings Before Interest & Taxes
Reconciliation: March 31, 2019
Net earnings (loss) available to
Whirlpool $
471
Net earnings (loss) available to
noncontrolling interests 3
Income tax expense (benefit) (132)
Interest expense 51
Earnings (loss) before interest &
taxes $
393
Net sales $
4,760
Net earnings margin 9.9
%
Results classification Earnings before Earnings per
interest & diluted share
taxes
Reported measure $
393 $
7.31
Restructuring costs(a)
Restructuring costs 26 0.40
Brazil indirect tax credit(c) Interest and sundry (income)
expense (127) (1.97)
Divestiture related transition costs(d) Selling, general and administrative 6 0.09
Income tax impact 0.26
Normalized tax rate adjustment(b) (2.98)
Ongoing measure $
298 $
3.11
Net sales $
4,760
Ongoing EBIT margin 6.3
%
Note: Numbers may not reconcile due to rounding
Ongoing Segment Earnings Before Interest and Taxes
The reconciliation provided below reconciles ongoing segment EBIT with segment EBIT, for the three months ended March 31, 2020. Ongoing segment EBIT margin is calculated by dividing ongoing segment EBIT by segment net sales. Segment EBIT margin is calculated by dividing segment EBIT by segment net sales.
Three Months Ended
March 31, 2020
Segment Restructuring Ongoing
earnings costs(a) segment
(loss) before earnings
interest and (loss) before
taxes interest and
taxes
North America $
303
$ $
303
EMEA (15) (15)
Latin America 31 31
Asia (16) (16)
Other/Eliminations (42) 5 (37)
Total Whirlpool Corporation $
261 $
5 $
266
The reconciliation provided below reconciles ongoing segment EBIT with segment EBIT, for the three months ended March 31, 2019. Ongoing segment EBIT margin is calculated by dividing ongoing segment EBIT by segment net sales. Segment EBIT margin is calculated by dividing segment EBIT by segment net sales.
Three Months Ended
March 31, 2019
Segment Restructuring Brazil Divestiture Ongoing
earnings costs(a) indirect tax related segment
(loss) before credit(c) transition earnings
interest and costs(d) (loss) before
taxes interest and
taxes
North America $
312
$
$
$ $
312
EMEA (21) (21)
Latin America 45 45
Asia 7 7
Other/Eliminations 50 26 (127) 6 (45)
Total Whirlpool Corporation $
393 $
26 $
(127) $
6 $
298
Note: Numbers may not reconcile due to rounding
Organic Net Sales
The reconciliation provided below reconciles the non-GAAP financial measure organic net sales with reported net sales, for the twelve months ending December 31, 2020 for the Company.
Twelve Months Ending
December 31, 2020
GAAP net sales (%
decline) 13% - 18%
Less: Embraco net sales ~(3)%
Organic net sales (%
decline) 10% - 15%
The reconciliation provided below reconciles the non-GAAP financial measure organic net sales with reported net sales, for the three months ended March 31, 2020 and March 31, 2019 for the Company.
Three Months Ended
March 31,
2020 2019 Change
Net sales $
4,325 $
4,760 (9.1)
%
Less: Embraco
net sales (312)
Add-Back:
currency 108
Organic net $
4,433 $
4,448 (0.3)
sales
%
The reconciliation provided below reconciles the non-GAAP financial measure organic net sales with reported net sales, for the three months ended March 31, 2020 and March 31, 2019 for Whirlpool Latin America.
Three Months Ended
March 31,
2020 2019 Change
Net sales $
618 $
875 (29.4)
%
Less:
Embraco
net sales (312)
Add-Back:
currency 76
Organic $
694 $
563 23.3
net sales %
Note: Numbers may not reconcile due to rounding
Footnotes:
a. RESTRUCTURING COSTS - In 2019 and 2020, these
costs are primarily related to actions that
right-size our EMEA business and certain
other unique restructuring events, including
restructuring of the Naples, Italy
manufacturing plant.
b. NORMALIZED TAX RATE ADJUSTMENT - During the
first 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 effective tax rate
between 20% and 25%. During the first quarter
of 2019, the Company calculated ongoing
earnings per share using an adjusted tax rate
of 17.5%, to reconcile to our anticipated
full-year 2019 effective tax rate between
15% and 20%, which includes the tax impact of
a valuation allowance release and the Brazil
indirect tax credit.
c. BRAZIL INDIRECT TAX CREDIT - During the first
half of 2019, the Company received favorable,
non-appealable decisions related to the
recovery of certain taxes previously paid
over gross sales. As a result, the Company
recorded a gain in interest and sundry
(income) expense during the first quarter of
2019 in the amount of $127 million in
connection with these decisions.
d. DIVESTITURE RELATED TRANSITION COSTS -During
the first quarter of 2019, the Company
recognized transition costs of approximately
$6 million associated with the sale of its
Embraco compressor business.
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, 2020 and 2019 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) 2020 2019
Cash provided by (used in) operating
activities $(814) $(895)
Capital expenditures, proceeds from sale of
assets/businesses and change in
restricted cash* (56) (74)
Free cash flow $(870) $(969)
Cash provided by (used in) investing
activities (56) (86)
Cash provided by (used in) financing
activities 1,893 627
* 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.
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SOURCE Whirlpool Corporation
