Whirlpool Announces Second-Quarter Results; Delivers Sequential Margin Expansion
Whirlpool Corp. (NYSE: WHR) reported Q2 2024 results, highlighting global sequential margin expansion driven by improved promotional pricing in North America.
Key Highlights:
- GAAP net earnings margin of 5.5%; $3.96 GAAP EPS
- Ongoing EBIT margin of 5.3%; $2.39 ongoing EPS
- Net sales: $3.99 billion, a 16.8% decline YoY
- Solid performance in Latin America, Asia, and small domestic appliances with double-digit sales growth
- Cost reduction on track to achieve $300-$400 million in 2024
- Revised full-year ongoing EPS to approximately $12.00
- Cash flow from operations expected to be $1.05 billion, free cash flow around $500 million
CEO Marc Bitzer emphasized the company's strategic moves positioning it for a recovery in the U.S. housing market. CFO Jim Peters highlighted continued simplification actions, anticipating significant cost savings and strong working capital management.
Whirlpool Corp. (NYSE: WHR) ha riportato i risultati del secondo trimestre 2024, evidenziando un'espansione dei margini globali rispetto al trimestre precedente grazie al miglioramento della politica dei prezzi promozionali in Nord America.
Punti Chiave:
- Margine di utile netto GAAP del 5,5%; EPS GAAP di $3,96
- Margine EBIT ongoing del 5,3%; EPS ongoing di $2,39
- Vendite nette: $3,99 miliardi, un calo del 16,8% rispetto all’anno precedente
- Buone performance in America Latina, Asia e piccoli elettrodomestici con crescita delle vendite a doppia cifra
- Riduzione dei costi in linea con l’obiettivo di raggiungere $300-$400 milioni nel 2024
- EPS annuale rivisto a circa $12,00
- Flusso di cassa dalle operazioni previsto a $1,05 miliardi, flusso di cassa libero attorno ai $500 milioni
Il CEO Marc Bitzer ha sottolineato le mosse strategiche dell'azienda che la posizionano per una ripresa del mercato immobiliare negli Stati Uniti. Il CFO Jim Peters ha evidenziato le azioni di semplificazione continua, prevedendo significativi risparmi sui costi e una forte gestione del capitale circolante.
Whirlpool Corp. (NYSE: WHR) informó los resultados del segundo trimestre de 2024, destacando la expansión secuencial de márgenes globales impulsada por la mejora de los precios promocionales en América del Norte.
Puntos Clave:
- Margen de ganancias netas GAAP del 5,5%; EPS GAAP de $3,96
- Margen EBIT continuo del 5,3%; EPS continuo de $2,39
- Ventas netas: $3,99 mil millones, una disminución del 16,8% interanual
- Buen rendimiento en América Latina, Asia y pequeños electrodomésticos con crecimiento de ventas de dos dígitos
- Reducción de costos en camino para alcanzar entre $300 y $400 millones en 2024
- EPS continuo revisado a aproximadamente $12,00
- Flujo de efectivo operativo esperado en $1,05 mil millones, flujo de efectivo libre alrededor de $500 millones
El CEO Marc Bitzer enfatizó los movimientos estratégicos de la empresa que la posicionan para una recuperación en el mercado de vivienda de EE. UU. El CFO Jim Peters destacó las acciones de simplificación continuas, anticipando ahorros significativos en costos y una sólida gestión del capital de trabajo.
Whirlpool Corp. (NYSE: WHR)는 2024년 2분기 실적을 발표하며 북미에서 프로모션 가격 개선에 힘입어 글로벌 마진이 전 분기 대비 확장되었음을 강조하였습니다.
주요 하이라이트:
- GAAP 순익 마진 5.5%; GAAP EPS $3.96
- 지속적인 EBIT 마진 5.3%; 지속적 EPS $2.39
- 순 매출: $39억, 전년 대비 16.8% 감소
- 라틴 아메리카, 아시아 및 소형 가전에서 두 자릿수 매출 성장 실적
- 2024년 3억~4억 달러 비용 절감 목표
- 연간 지속적 EPS를 약 $12.00으로 수정
- 운영으로부터의 현금 흐름 예상: $10억, 자유 현금 흐름 약 $5억
CEO 마크 비처는 미국 주택 시장 회복을 위해 회사를 전략적으로 포지셔닝한 움직임을 강조했습니다. CFO 짐 피터스는 지속적인 단순화 조치를 강조하며 상당한 비용 절감과 강력한 운전 자본 관리를 예상했습니다.
Whirlpool Corp. (NYSE: WHR) a annoncé ses résultats pour le deuxième trimestre 2024, soulignant une expansion séquentielle des marges mondiales grâce à une amélioration des prix promotionnels en Amérique du Nord.
Points Clés :
- Marge de bénéfices nets GAAP de 5,5 % ; BPA GAAP de 3,96 $
- Marge EBIT ongoing de 5,3 % ; BPA ongoing de 2,39 $
- Ventes nettes : 3,99 milliards de dollars, une baisse de 16,8 % par rapport à l'année précédente
- Bonnes performances en Amérique Latine, en Asie et pour les petits appareils électroménagers avec une croissance des ventes à deux chiffres
- Réduction des coûts en bonne voie pour atteindre entre 300 et 400 millions de dollars en 2024
- BPA annuel ongoing révisé à environ 12,00 $
- Flux de trésorerie provenant des opérations attendu à 1,05 milliard de dollars, flux de trésorerie libre autour de 500 millions de dollars
Le PDG Marc Bitzer a souligné les mesures stratégiques de l'entreprise qui la positionnent pour une reprise du marché immobilier aux États-Unis. Le directeur financier Jim Peters a souligné les actions de simplification continue, anticipant d'importantes économies de coûts et une gestion solide du fonds de roulement.
Whirlpool Corp. (NYSE: WHR) hat die Ergebnisse des zweiten Quartals 2024 bekannt gegeben und dabei eine globale sequenzielle Margenausweitung hervorgehoben, die durch verbesserte Aktionspreise in Nordamerika vorangetrieben wurde.
Wesentliche Punkte:
- GAAP Nettogewinnmarge von 5,5%; GAAP EPS von $3,96
- Fortlaufende EBIT-Marge von 5,3%; laufendes EPS von $2,39
- Nettoumsatz: 3,99 Milliarden USD, ein Rückgang von 16,8% im Jahresvergleich
- Starke Leistung in Lateinamerika, Asien und bei kleinen Haushaltsgeräten mit zweistelligem Verkaufswachstum
- Kostensenkungen auf Kurs, um 300 bis 400 Millionen USD im Jahr 2024 zu erreichen
- Revidiertes fortlaufendes EPS auf ca. $12,00
- Cashflow aus operativer Tätigkeit wird auf 1,05 Milliarden USD, freier Cashflow auf rund 500 Millionen USD geschätzt
CEO Marc Bitzer betonte die strategischen Schritte des Unternehmens, die es für eine Erholung des US-Wohnungsmarktes positionieren. CFO Jim Peters hob die fortwährenden Vereinfachungsmaßnahmen hervor und erwartet erhebliche Kosteneinsparungen sowie ein starkes Management des Working Capitals.
- GAAP net earnings increased by 157.6% YoY to $219 million.
- GAAP earnings per diluted share surged 155.5% YoY to $3.96.
- Double-digit net sales growth in Latin America (11.3%), Asia (19.7%), and small domestic appliances (11.3%).
- Cost reduction goals on track for $300-$400 million savings by 2024.
- Revised full-year ongoing EPS to approximately $12.00.
- Strong working capital management generating over $250 million in cash.
- Net sales declined 16.8% YoY to $3.99 billion.
- Ongoing EBIT decreased 39.8% YoY to $212 million.
- Ongoing earnings per diluted share dropped 43.2% YoY to $2.39.
- Free cash flow decreased by $126 million YoY to -$713 million.
- MDA North America net sales fell by 5.7% YoY.
- MDA North America EBIT margin dropped by 3.8 points YoY to 6.3%.
Whirlpool's Q2 2024 results present a mixed picture. While the company shows signs of margin improvement, overall financial performance has declined year-over-year. Here are the key takeaways:
- Net sales decreased by
16.8% to$3,989 million , primarily due to the divestiture of the European business. - GAAP net earnings increased significantly by
157.6% to$219 million , but this was largely due to one-time factors. - Ongoing EBIT declined by
39.8% to$212 million , indicating challenges in core operations. - The company revised its full-year ongoing earnings per share guidance downward to approximately
$12.00 .
The sequential margin expansion, particularly in North America, is a positive sign. However, the substantial year-over-year declines in sales and ongoing EBIT suggest that Whirlpool is still navigating a challenging market environment. The company's cost-cutting initiatives, aiming to save
Investors should closely monitor Whirlpool's ability to execute its cost reduction strategy and capitalize on the eventual recovery of the U.S. housing market, which remains a key driver for appliance demand.
Whirlpool's Q2 results reveal interesting market dynamics across different regions:
- North America: The
5.7% sales decline and40.7% EBIT drop highlight ongoing challenges in the company's largest market. The improvement in promotional pricing actions suggests a highly competitive landscape. - Latin America: Strong
11.3% sales growth and market share gains demonstrate Whirlpool's resilience in emerging markets. However, the slight EBIT margin decline indicates pricing pressures. - Asia: Impressive
19.7% sales growth and doubled EBIT showcase Whirlpool's successful expansion strategies in this region. - SDA Global: The
11.3% sales increase, driven by new product launches and direct-to-consumer business, highlights the importance of innovation and omnichannel strategies in the small appliance segment.
These regional variations underscore the importance of a diversified global presence in mitigating market-specific risks. The strong performance in Latin America and Asia partially offsets the weakness in North America, Whirlpool's traditional stronghold.
The company's ability to gain market share in growing regions while maintaining profitability will be important for long-term success, especially as it navigates the challenges in the North American market and adapts to the post-European divestiture landscape.
-- Sequential margin expansion globally and in MDA North America, driven by MDA North America promotional pricing actions
-- Solid performance in SDA Global, MDA Latin America, and MDA Asia, all delivering double-digit net sales growth in the quarter
-- Continued progress toward cost take out goals; on track to deliver
-- Q2 GAAP net earnings margin of
-- Ongoing (non-GAAP) EBIT margin(1) of
-- Expect full-year GAAP earnings per diluted share of approximately
-- Revised full-year ongoing earnings per diluted share(2) to approximately
"Our solid Q2 results and actions put us firmly on track towards expanding our margins sequentially throughout 2024," said Marc Bitzer, "setting up our business well for the eventual recovery of the
MARC BITZER, CHAIRMAN AND CHIEF EXECUTIVE OFFICER
Second-Quarter Results | 2024* | 2023 | Change |
Net sales ($M) | (16.8) % | ||
Net sales excluding currency ($M) | (16.0) % | ||
GAAP net earnings (loss) available to Whirlpool ($M) | 157.6 % | ||
Ongoing EBIT(1) ($M) | (39.8) % | ||
GAAP earnings (loss) per diluted share | 155.5 % | ||
Ongoing earnings per diluted share(2) | (43.2) % | ||
*Excludes net sales from our previously-owned MDA Europe business | |||
Free Cash Flow | 2024 | 2023 | Change |
Cash provided by (used in) operating activities ($M) | |||
Free cash flow(3) ($M) |
"We completed our organizational simplification actions in the second quarter, putting us on track to deliver our cost take out goal of
JIM PETERS, CHIEF FINANCIAL AND ADMINISTRATIVE OFFICER
SEGMENT REVIEW
SEGMENT INFORMATION ($M) | Q2 2024 | Q2 2023 | Change | ||
MDA North America | Net Sales | (5.7) % | |||
EBIT | (40.7) % | ||||
% of sales | 6.3 % | 10.1 % | (3.8pts) | ||
MDA Latin America | Net Sales | 11.3 % | |||
EBIT | 6.1 % | ||||
% of sales | 5.8 % | 6.1 % | (0.3pts) | ||
MDA Asia | Net Sales | 19.7 % | |||
EBIT | 110.0 % | ||||
% of sales | 6.2 % | 3.5 % | 2.7pts | ||
SDA Global | Net Sales | 11.3 % | |||
EBIT | 23.8 % | ||||
% of sales | 13.9 % | 12.5 % | 1.4pts | ||
MDA: Major Domestic Appliances; SDA: Small Domestic Appliances | |||||
MDA
- Excluding currency, net sales decline of 5.6 percent year-over-year from unfavorable price/mix, which significantly improved throughout the quarter from promotional pricing actions
- EBIT margin(4) decreased compared to the same prior-year period, driven by unfavorable price/mix partially offset by cost take out actions
MDA
- Excluding currency, net sales increase of 14.9 percent year-over-year, with strong share gains in the segment more than offsetting unfavorable price/mix
- EBIT margin(4) decreased compared to the same prior-year period, driven by unfavorable price/mix partially offset by fixed cost leverage and cost take out actions
MDA
- Excluding currency, net sales increase of 21.5 percent year-over-year, with increased volumes from share gains partially offset by unfavorable price/mix
- EBIT margin(4) increased compared to the same prior-year period, driven by cost take out actions and fixed cost leverage
SDA GLOBAL
- Excluding currency, net sales increase of 11.9 percent year-over-year, with growth from new product launches and direct to consumer business more than offsetting unfavorable price/mix
- EBIT margin(4) increased compared to the same prior-year period, driven by cost take out actions and volume growth
FULL-YEAR 2024 OUTLOOK
Guidance Summary | 2023 Reported | 2023 Like for | 2024 Guidance |
Net sales ($M) | |||
Cash provided by operating activities ($M) | N/A | ||
Free cash flow ($M)(3) | N/A | ||
GAAP net earnings margin (%) | 2.5 % | N/A | ~ |
Ongoing EBIT margin (%)(1) | 6.1 % | ~ | ~ |
GAAP earnings per diluted share | N/A | ||
Ongoing earnings per diluted share(2) | N/A |
Europe transaction closed April 1, 2024, as expected- Reaffirm full-year 2024 net sales expectations of approximately
$16.9 billion - Full-year GAAP earnings per diluted share of approximately
$3.00 Europe transaction and organization simplification restructuring expense - Adjusted full-year ongoing earnings per diluted share(2) to approximately
$12.00 $300 -$400 million - Adjusted full-year cash provided by operating activities to approximately
$1.05 billion $500 million $250 -$300 million - Expect full-year 2024 GAAP tax rate of approximately 25 percent and adjusted (non-GAAP) tax rate of approximately (8) percent
- Continue to expect to pay approximately
$400 million
(1) | A reconciliation of earnings before interest and taxes (EBIT) and ongoing EBIT, non-GAAP financial measures, to reported net earnings (loss) available to Whirlpool, and a reconciliation of EBIT margin and ongoing EBIT margin, non-GAAP financial measures, to net earnings (loss) margin and other important information, appears below. |
(2) | A reconciliation of ongoing earnings per diluted share, a non-GAAP financial measure, to reported net earnings (loss) per diluted share available to Whirlpool and other important information, appears below. |
(3) | A reconciliation of free cash flow, a non-GAAP financial measure, to cash provided by (used in) operating activities and other important information, appears below. |
(4) | 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 |
(5) | Like-for-like refers to a comparison between the 2024 guidance and pro forma results for 2023, which exclude the second through fourth quarter resegmented results for the historical |
ABOUT WHIRLPOOL CORPORATION
Whirlpool Corporation (NYSE: WHR) is a leading kitchen and laundry appliance company, in constant pursuit of improving life at home and inspiring generations with our brands. The company is driving meaningful innovation to meet the evolving needs of consumers through its iconic brand portfolio, including Whirlpool, KitchenAid, JennAir, Maytag, Amana, Brastemp, Consul, and InSinkErator. In 2023, the company reported approximately
WEBSITE DISCLOSURE
We routinely post important information for investors on our website, WhirlpoolCorp.com, in the "Investors" section. We also intend to update the "Hot Topics Q&A" portion of this webpage as a means of disclosing material, non-public information and for complying with our disclosure obligations under Regulation FD. Accordingly, investors should monitor the "Investors" section of our website, in addition to following our press releases, SEC filings, public conference calls, presentations and webcasts. The information contained on, or that may be accessed through, our webpage is not incorporated by reference into, and is not a part of, this document.
WHIRLPOOL ADDITIONAL INFORMATION
This document contains forward-looking statements about Whirlpool Corporation and its consolidated subsidiaries ("Whirlpool") within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Whirlpool intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and includes this statement for purposes of complying with those safe harbor provisions. Any statements made in this press release that are not statements of historical fact, including statements regarding future financial results, long-term value creation goals, restructuring and resegmentation expectations, productivity, raw material prices and related costs, supply chain, transaction-related closing and synergies expectations, asset impairment, litigation, ESG efforts, debt repayment expectations, and the impact of COVID-19 and the
WHIRLPOOL CORPORATION CONSOLIDATED CONDENSED STATEMENTS OF INCOME (LOSS) (UNAUDITED) FOR THE PERIODS ENDED JUNE 30 (Millions of dollars, except per share data) | |||||||
Three Months Ended | Six Months Ended | ||||||
2024 | 2023 | 2024 | 2023 | ||||
Net sales | $ 3,989 | $ 4,792 | $ 8,478 | $ 9,441 | |||
Expenses | |||||||
Cost of products sold | 3,363 | 3,976 | 7,211 | 7,862 | |||
Gross margin | 626 | 816 | 1,267 | 1,579 | |||
Selling, general and administrative | 394 | 476 | 871 | 963 | |||
Intangible amortization | 7 | 10 | 17 | 21 | |||
Restructuring costs | 50 | 9 | 73 | 9 | |||
Loss (gain) on sale and disposal of businesses | 45 | 18 | 292 | 240 | |||
Operating profit | 130 | 303 | 14 | 346 | |||
Other (income) expense | |||||||
Interest and sundry (income) expense | 7 | 10 | (21) | 87 | |||
Interest expense | 93 | 89 | 183 | 164 | |||
Earnings (loss) before income taxes | 30 | 204 | (148) | 95 | |||
Income tax expense (benefit) | (206) | 114 | (130) | 182 | |||
Equity method investment income (loss), net of tax | (11) | (3) | (11) | (2) | |||
Net earnings (loss) | 225 | 87 | (29) | (89) | |||
Less: Net earnings (loss) available to noncontrolling interests | 6 | 2 | 11 | 5 | |||
Net earnings (loss) available to Whirlpool | $ 219 | $ 85 | $ (40) | $ (94) | |||
Per share of common stock | |||||||
Basic net earnings (loss) available to Whirlpool | $ 3.96 | $ 1.56 | $ (0.75) | $ (1.71) | |||
Diluted net earnings (loss) available to Whirlpool | $ 3.96 | $ 1.55 | $ (0.75) | $ (1.71) | |||
Dividends declared | $ 1.75 | $ 1.75 | $ 3.50 | $ 3.50 | |||
Weighted-average shares outstanding (in millions) | |||||||
Basic | 54.9 | 55.0 | 54.9 | 54.9 | |||
Diluted | 55.0 | 55.2 | 54.9 | 54.9 | |||
WHIRLPOOL CORPORATION CONSOLIDATED CONDENSED BALANCE SHEETS (Millions of dollars, except share data) | |||
June 30, 2024 | December 31, 2023 | ||
(Unaudited) | |||
Assets | |||
Current assets | |||
Cash and cash equivalents | $ 1,179 | $ 1,570 | |
Accounts receivable, net of allowance of | 1,595 | 1,529 | |
Inventories | 2,309 | 2,247 | |
Prepaid and other current assets | 777 | 717 | |
Assets held for sale | — | 144 | |
Total current assets | 5,860 | 6,207 | |
Property, net of accumulated depreciation of | 2,254 | 2,234 | |
Right of use assets | 882 | 721 | |
Goodwill | 3,328 | 3,330 | |
Other intangibles, net of accumulated amortization of | 3,110 | 3,124 | |
Deferred income taxes | 1,376 | 1,317 | |
Other noncurrent assets | 533 | 379 | |
Total assets | $ 17,343 | $ 17,312 | |
Liabilities and stockholders' equity | |||
Current liabilities | |||
Accounts payable | $ 3,420 | $ 3,598 | |
Accrued expenses | 448 | 491 | |
Accrued advertising and promotions | 480 | 603 | |
Employee compensation | 172 | 238 | |
Notes payable | 778 | 17 | |
Current maturities of long-term debt | 350 | 800 | |
Other current liabilities | 481 | 614 | |
Liabilities held for sale | — | 587 | |
Total current liabilities | 6,129 | 6,948 | |
Noncurrent liabilities | |||
Long-term debt | 6,313 | 6,414 | |
Pension benefits | 120 | 147 | |
Postretirement benefits | 103 | 107 | |
Lease liabilities | 776 | 612 | |
Other noncurrent liabilities | 543 | 547 | |
Total noncurrent liabilities | 7,855 | 7,827 | |
Stockholders' equity | |||
Common stock, | 115 | 114 | |
Additional paid-in capital | 3,455 | 3,078 | |
Retained earnings | 8,127 | 8,358 | |
Accumulated other comprehensive loss | (1,563) | (2,178) | |
Treasury stock, 60 million and 60 million shares, respectively | (7,037) | (7,010) | |
Total Whirlpool stockholders' equity | 3,097 | 2,362 | |
Noncontrolling interests | 262 | 175 | |
Total stockholders' equity | 3,359 | 2,537 | |
Total liabilities and stockholders' equity | $ 17,343 | $ 17,312 | |
WHIRLPOOL CORPORATION CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED) FOR THE PERIODS ENDED JUNE 30 (Millions of dollars) | |||
Six Months Ended | |||
2024 | 2023 | ||
Operating activities | |||
Net earnings (loss) | $ (29) | $ (89) | |
Adjustments to reconcile net earnings to cash provided by (used in) operating activities: | |||
Depreciation and amortization | 170 | 178 | |
Loss (gain) on sale and disposal of businesses | 292 | 240 | |
Changes in assets and liabilities: | |||
Accounts receivable | (211) | (161) | |
Inventories | (54) | (384) | |
Accounts payable | (123) | (146) | |
Accrued advertising and promotions | (154) | (182) | |
Accrued expenses and current liabilities | (170) | 50 | |
Taxes deferred and payable, net | (209) | 113 | |
Accrued pension and postretirement benefits | (14) | (29) | |
Employee compensation | (22) | 47 | |
Other | 39 | (7) | |
Cash provided by (used in) operating activities | (485) | (370) | |
Investing activities | |||
Capital expenditures | (228) | (217) | |
Proceeds from sale of assets and businesses | 42 | 9 | |
Acquisition of businesses, net of cash acquired | — | (14) | |
Cash held by divested businesses | (245) | — | |
Other | (1) | — | |
Cash provided by (used in) investing activities | (432) | (222) | |
Financing activities | |||
Net proceeds from borrowings of long-term debt | 300 | 303 | |
Net proceeds (repayments) of long-term debt | (801) | (250) | |
Net proceeds (repayments) from short-term borrowings | 780 | 28 | |
Dividends paid | (191) | (193) | |
Repurchase of common stock | (50) | — | |
Sale of minority interest in subsidiary | 462 | — | |
Common stock issued | — | 4 | |
Other | 1 | (2) | |
Cash provided by (used in) financing activities | 501 | (110) | |
Effect of exchange rate changes on cash and cash equivalents | (72) | 55 | |
Less: change in cash classified as held for sale | — | (2) | |
Increase (decrease) in cash and cash equivalents | (488) | (649) | |
Cash and cash equivalents at beginning of year (1) | 1,667 | 1,958 | |
Cash and cash equivalents at end of period | $ 1,179 | $ 1,309 | |
(1) Cash and cash equivalent at the beginning of 2024 include |
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
Ongoing measures exclude items that may not be indicative of, or are unrelated to, results from our ongoing operations and provide a better baseline for analyzing trends in our underlying businesses.
Sales excluding foreign currency: Current period net sales translated in functional currency, to
Organic net sales: Sales excluding the impact of certain acquisitions or divestitures, and foreign currency. Management believes that organic net sales provides stockholders with a clearer basis to assess our results over time, excluding the impact of exchange rate fluctuations and certain acquisitions and/or divestitures.
Ongoing EBIT margin: Ongoing earnings before interest and taxes divided by net sales. Ongoing measures exclude items that may not be indicative of, or are unrelated to, results from our ongoing operations and provide a better baseline for analyzing trends in our underlying businesses.
Ongoing earnings per diluted share: Diluted net earnings per share from continuing operations, adjusted to exclude items that may not be indicative of, or are unrelated to, results from our ongoing operations. Ongoing measures provide a better baseline for analyzing trends in our underlying businesses.
Net debt leverage: Net debt to ongoing earnings before interest, taxes, depreciation, and amortization (EBITDA) ratio is net debt outstanding, including long-term debt, current maturities of long-term debt, and notes payable, less cash and cash equivalents, divided by ongoing EBITDA. Management believes that net debt leverage provides stockholders with a view of our ability to generate earnings sufficient to service our debt.
Return on invested capital: Ongoing EBIT after taxes divided by total invested capital, defined as total assets less non-interest bearing current liabilities (NIBCLS). NIBCLS is defined as current liabilities less current maturities of long-term debt and notes payable. This ROIC definition may differ from other companies' methods and therefore may not be comparable to those used by other companies. Management believes that ROIC provides stockholders with a view of capital efficiency, a key driver of stockholder value creation.
Adjusted effective tax rate: Effective tax rate, excluding pre-tax income and tax effect of certain unique items. Management believes that adjusted tax rate provides stockholders with a meaningful, consistent comparison of the Company's effective tax rate, excluding the pre-tax income and tax effect of certain unique items.
Free cash flow: Cash provided by (used in) operating activities less capital expenditures. Management believes that free cash flow provides stockholders with a relevant measure of liquidity and a useful basis for assessing the company's ability to fund its activities and obligations.
Whirlpool does not provide a non-GAAP reconciliation for its forward-looking long-term value creation goals, such as organic net sales, EBIT, free cash flow conversion, future year free cash flow benefit as a result of
We believe that these non-GAAP measures provide meaningful information to assist investors and stockholders in understanding our financial results and assessing our prospects for future performance, and reflect an additional way of viewing aspects of our operations that, when viewed with our GAAP financial measures, provide a more complete understanding of our business. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names. These ongoing financial measures should not be considered in isolation or as a substitute for reported net earnings available to Whirlpool per diluted share, net earnings, net earnings available to Whirlpool, net earnings margin, return on assets, net sales, effective tax rate and cash provided by (used in) operating activities, the most directly comparable GAAP financial measures.
We also disclose segment EBIT as an important financial metric used by the Company's Chief Operating Decision Maker to evaluate performance and allocate resources in accordance with ASC 280 - Segment Reporting.
GAAP net earnings available to Whirlpool per basic or diluted share (as applicable) and ongoing earnings per diluted share are presented net of tax, while individual adjustments in each reconciliation are presented on a pre-tax basis; the income tax impact line item aggregates the tax impact for these adjustments. The tax impact of individual line item adjustments may not foot precisely to the aggregate income tax impact amount, as each line item adjustment may include non-taxable components. Historical quarterly earnings per share amounts are presented based on a normalized tax rate adjustment to reconcile quarterly tax rates to full-year tax rate expectations. We strongly encourage investors and stockholders to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure.
SECOND-QUARTER 2024 ONGOING EARNINGS BEFORE INTEREST AND TAXES AND ONGOING EARNINGS PER DILUTED SHARE
The reconciliation provided below reconciles the non-GAAP financial measures ongoing earnings before interest and taxes and ongoing earnings per diluted share, with the most directly comparable GAAP financial measures, net earnings (loss) available to Whirlpool and net earnings (loss) per diluted share available to Whirlpool, for the three months ended June 30, 2024. Net earnings (loss) margin is calculated by dividing net earnings (loss) available to Whirlpool by net sales. Ongoing EBIT margin is calculated by dividing ongoing EBIT by net sales. EBIT margin is calculated by dividing EBIT by net sales. The earnings per diluted share GAAP measure and ongoing measure are presented net of tax, while each adjustment is presented on a pre-tax basis. Our second-quarter GAAP tax rate was (687)%. The aggregate income tax impact of the taxable components of each adjustment is presented in the income tax impact line item at our second-quarter adjusted tax rate (non-GAAP) of (14)%.
Three Months Ended | |
Earnings Before Interest & Taxes Reconciliation: | June 30, 2024 |
Net earnings (loss) available to Whirlpool | $ 219 |
Net earnings (loss) available to noncontrolling interests | 6 |
Income tax expense (benefit) | (206) |
Interest expense | 93 |
Earnings before interest & taxes | $ 112 |
Net sales | $ 3,989 |
Net earnings (loss) margin | 5.5 % |
Results classification | Earnings before | Earnings per | |||
Reported measure | $ 112 | $ 3.96 | |||
Restructuring expense(a) | Restructuring expense | 50 | 0.91 | ||
Impact of M&A | (Gain) loss on sale and | 50 | 0.90 | ||
Total income tax impact | 0.26 | ||||
Normalized tax rate | (3.64) | ||||
Ongoing measure | $ 212 | $ 2.39 | |||
Net sales | $ 3,989 | ||||
Ongoing EBIT margin | 5.3 % |
Note: Numbers may not reconcile due to rounding.
SECOND-QUARTER 2023 ONGOING EARNINGS BEFORE INTEREST AND TAXES AND ONGOING EARNINGS PER DILUTED SHARE
The reconciliation provided below reconciles the non-GAAP financial measures ongoing earnings before interest and taxes and ongoing earnings per diluted share, with the most directly comparable GAAP financial measures, net earnings (loss) available to Whirlpool and net earnings (loss) per diluted share available to Whirlpool, for the three months ended June 30, 2023. Net earnings (loss) margin is calculated by dividing net earnings (loss) available to Whirlpool by net sales. Ongoing EBIT margin is calculated by dividing ongoing EBIT by net sales. EBIT margin is calculated by dividing EBIT by net sales. The earnings per diluted share GAAP measure and ongoing measure are presented net of tax, while each adjustment is presented on a pre-tax basis. Our second-quarter GAAP tax rate was
Three Months Ended | |
Earnings Before Interest & Taxes Reconciliation: | June 30, 2023 |
Net earnings (loss) available to Whirlpool | $ 85 |
Net earnings (loss) available to noncontrolling interests | 2 |
Income tax expense (benefit) | 114 |
Interest expense | 89 |
Earnings before interest & taxes | $ 290 |
Net sales | $ 4,792 |
Net earnings (loss) margin | 1.8 % |
Results classification | Earnings before | Earnings per | |||
Reported measure | $ 290 | $ 1.55 | |||
Impact of M&A | (Gain) loss on sale and | 26 | 0.47 | ||
Legacy EMEA legal matters(b) | Interest and sundry | 36 | 0.65 | ||
Total income tax impact | (0.12) | ||||
Normalized tax rate | — | 1.66 | |||
Ongoing measure | $ 352 | $ 4.21 | |||
Net sales | $ 4,792 | ||||
Ongoing EBIT margin | 7.3 % |
Note: Numbers may not reconcile due to rounding
FULL-YEAR 2024 OUTLOOK FOR ONGOING EARNINGS BEFORE INTEREST AND TAXES AND ONGOING EARNINGS PER DILUTED SHARE
The reconciliation provided below reconciles the non-GAAP financial measures ongoing earnings before interest and taxes and ongoing earnings per diluted share, with the most directly comparable GAAP financial measures, net earnings available to Whirlpool and net earnings per diluted share available to Whirlpool, for the twelve months ending December 31, 2024. Net earnings margin is calculated by dividing net earnings available to Whirlpool by net sales. Ongoing EBIT margin is calculated by dividing ongoing EBIT by net sales. EBIT margin is calculated by dividing EBIT by net sales. The earnings per diluted share GAAP measure and ongoing measure are presented net of tax, while each adjustment is presented on a pre-tax basis. Our anticipated full-year GAAP tax rate is approximately
Twelve Months Ending | |
Earnings Before Interest & Taxes Reconciliation: | December 31, 2024 |
Net earnings available to Whirlpool | |
Net earnings available to noncontrolling interests | |
Income tax expense (benefit) | |
Interest expense | |
Earnings before interest & taxes | |
Net sales | |
Net earnings margin | 3.6 % |
Results classification | Earnings before | Earnings per | |||
Reported measure | |||||
Restructuring Expense(a) | ~75 | ~1.25 | |||
Impact of M&A | (Gain) loss on sale and | ~315 | ~5.75 | ||
Total income tax impact | — | ||||
Normalized tax rate adjustment(d) | ~1.50 | ||||
Ongoing measure |
Note: Numbers may not reconcile due to rounding
FULL-YEAR 2023 ONGOING EARNINGS BEFORE INTEREST AND TAXES AND ONGOING EARNINGS PER DILUTED SHARE
The reconciliation provided below reconciles the non-GAAP financial measures ongoing earnings before interest and taxes and ongoing earnings per diluted share, with the most directly comparable GAAP financial measures, net earnings (loss) available to Whirlpool and net earnings (loss) per diluted share available to Whirlpool, for the twelve months ended December 31, 2023. Net earnings (loss) margin is calculated by dividing net earnings (loss) available to Whirlpool by net sales. Ongoing EBIT margin is calculated by dividing ongoing EBIT by net sales. EBIT margin is calculated by dividing EBIT by net sales. The earnings per diluted share GAAP measure and ongoing measure are presented net of tax, while each adjustment is presented on a pre-tax basis. Our full-year GAAP tax rate was
Twelve Months Ended | |
Earnings Before Interest & Taxes Reconciliation: | December 31, 2023 |
Net earnings (loss) available to Whirlpool | $ 481 |
Net earnings (loss) available to noncontrolling interests | 7 |
Income tax expense (benefit) | 77 |
Interest expense | 351 |
Earnings before interest & taxes | $ 916 |
Net sales | $ 19,455 |
Net earnings (loss) margin | 2.5 % |
Results classification | Earnings before | Earnings per | |||
Reported measure | $ 916 | $ 8.72 | |||
Impact of M&A | (Gain) loss on sale and | 181 | 3.27 | ||
Legacy EMEA legal matters(c) | Interest and sundry | 94 | 1.71 | ||
Total income tax impact | 0.35 | ||||
Normalized tax rate adjustment(d) | 2.11 | ||||
Ongoing measure | $ 1,191 | $ 16.16 | |||
Net Sales | $ 19,455 | ||||
Ongoing EBIT Margin | 6.1 % |
Note: Numbers may not reconcile due to rounding
FOOTNOTES
a. RESTRUCTURING EXPENSE - In March 2024, the Company committed to workforce reduction plans.
b. IMPACT OF M&A TRANSACTIONS - On January 16, 2023, we signed a contribution agreement to contribute our European major domestic appliance business into a newly formed entity with Arçelik. In connection with the transaction, we recorded a loss on disposal of
For the six months ended June 30, 2023, a loss on disposal of
c. LEGACY MDA
d. NORMALIZED TAX RATE ADJUSTMENT - During the second quarter of 2024, the Company calculated a GAAP tax rate of (687)%. Ongoing earnings per share was calculated using an adjusted tax rate of (14)%, which excludes the non-tax deductible impact of M&A transactions of approximately
During the second quarter of 2023, the Company calculated ongoing earnings per share using an adjusted tax rate of
Additionally, in the full-year 2024 outlook, the Company calculated ongoing earnings per share using a full-year adjusted tax (non-GAAP) rate of approximately (8)%. Subsequent to the closure of the
ONGOING EBIT EXCLUDING MDA
The reconciliation provided below reconciles the impact of removing MDA Europe from our Q2 through Q4 net sales and ongoing EBIT, for twelve months ended December 31, 2023 for the Whirlpool business.
In billions | 2023 As | Q2-Q4 2023 | 2023 Like |
Net Sales | $ 19.46 | $ 2.56 | $ 16.90 |
Ongoing EBIT | $ 1.19 | $ 0.03 | $ 1.16 |
Ongoing EBIT Margin | 6.1 % | 1.2 % | ~ |
Note: Numbers may not reconcile due to rounding
*Q2-Q4 historical segment financial data (unaudited).
FREE CASH FLOW
Free cash flow is cash provided by (used in) operating activities after capital expenditures. The reconciliation provided below reconciles six months ended June 30, 2024 and 2023 and 2024 full-year free cash flow with cash provided by (used in) operating activities, the most directly comparable GAAP financial measure. Free cash flow as a percentage of net sales is calculated by dividing free cash flow by net sales.
Six Months Ended | |||||
June 30, | |||||
(millions of dollars) | 2024 | 2023 | 2024 | ||
Cash provided by (used in) operating activities | |||||
Capital expenditures | (228) | (217) | ~(550) | ||
Free cash flow | |||||
Cash provided by (used in) investing activities* | (432) | (222) | |||
Cash provided by (used in) financing activities* | 501 | (110) | |||
*Financial guidance on a GAAP basis for cash provided by (used in) financing activities and cash provided by (used in) investing activities has not been provided because in order to prepare any such estimate or projection, the Company would need to rely on market factors and certain other conditions and assumptions that are outside of its control. |
Free cash flow is cash provided by (used in) operating activities after capital expenditures. The reconciliation provided below reconciles three months ended June 30, 2024 free cash flow with cash provided by (used in) operating activities, the most directly comparable GAAP financial measure. Free cash flow as a percentage of net sales is calculated by dividing free cash flow by net sales.
Three Months Ended | |
(millions of dollars) | June 30, 2024 |
Cash provided by (used in) operating activities | |
Capital expenditures | (113) |
Free cash flow | |
Cash provided by (used in) investing activities | 121 |
Cash provided by (used in) financing activities | 1,293 |
Free cash flow is cash provided by (used in) operating activities after capital expenditures. The reconciliation provided below reconciles twelve months ended December 31, 2023 full-year free cash flow with cash provided by (used in) operating activities, the most directly comparable GAAP financial measure. Free cash flow as a percentage of net sales is calculated by dividing free cash flow by net sales.
Twelve Months Ended | |
December 31, | |
(millions of dollars) | 2023 |
Cash provided by (used in) operating activities | |
Capital expenditures | (549) |
Free cash flow | |
Cash provided by (used in) investing activities | (553) |
Cash provided by (used in) financing activities | (792) |
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SOURCE Whirlpool Corporation
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