2021
Annual Report
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2021
A RECORD
$22B
ANNUAL SALES
BRANDS WITH
7
$1B+
IN SALES
54
MANUFACTURING
AND TECHNOLOGY
CENTERS
69K
EMPLOYEES
SALES BY
REGION
● 57%
North America
● 23%
Europe, Middle East,
Africa
● 14%
Latin America
● 6%
Asia
SALES BY
CATEGORY
● 30%
Refrigeration
● 28%
Laundry Appliances
● 26%
Cooking Appliances
● 16%
Dishwashing and Other
Stockholder and
Other Information
Whirlpool Corporation’s Annual Report on
Form 10-K and other financial information
is available free of charge to stockholders.
The information contained in this Annual
Report should be read together with Whirlpool
Corporation’s Financial Statements and related
notes and “Management’s Discussion and Analysis”
and “Forward-Looking Statements.” This information
appears in the company’s 2021 Annual Report on
Form 10-K filed with the Securities and Exchange
Commission, which is included herewith and
available on the company’s website at Investors.
WhirlpoolCorp.com.
The Annual Report on Form 10-K and company
earnings releases for each quarter—typically
issued in April, July, October and January—can be
obtained by contacting:
Willyam K. Thomas
Senior Director, Investor Relations
Whirlpool Corporation
2000 N. M-63, Mail Drop 2609
Benton Harbor, MI 49022-2692
Telephone: 269-923-2641
Fax: 269-923-3525
Email: investor_relations@whirlpool.com
Stock Exchanges
Common stock of Whirlpool Corporation
(exchange symbol: WHR) is listed on the New York
and Chicago stock exchanges.
Trademarks
Acros, affresh, Amana, Ariston, Artisan, Bauknecht,
Brastemp, Care Counts, Consul, Elica, Eslabon de
Lujo, Everydrop, Gladiator, Hotpoint*, Ignis, Indesit,
JennAir, KitchenAid, Load & Go, Maytag, Privileg,
Roper, Speed Queen, Swash, Whirlpool, Yummly and
the design of the stand mixer are trademarks of
Whirlpool Corporation or its wholly or majority-
owned affiliates.
*Whirlpool Corporation ownership of the
Hotpoint brand in EMEA and Asia Pacific regions
is not affiliated with the Hotpoint brand sold in
the Americas.
Energy Star, United Way, Habitat For Humanity
International and certain other trademarks are
owned by their respective companies.
Whirlpool Corporation
Please visit our online Annual Report
at WhirlpoolCorp.com/2021Annual
WHO WE ARE. WHERE WE OPERATE.
As a 110-year old company with a legacy of success and vision anchored
on improving life at home, Whirlpool Corporation continues to deliver
long-term value to our consumers and shareholders. Whirlpool
Corporation (NYSE: WHR) is committed to being the best global kitchen
and laundry company, in constant pursuit of improving life at home. In an
increasingly digital world, the company is driving purposeful innovation to
meet the evolving needs of consumers through its iconic brand portfolio,
including Whirlpool, KitchenAid, Maytag, Hotpoint*, Consul, Brastemp, Amana,
Bauknecht, JennAir, Indesit and Yummly. In 2021, the company reported
approximately $22 billion in annual sales, 69,000 employees and
54 manufacturing and technology research centers. Additional
information about the company can be found at WhirlpoolCorp.com.
OUR VISION
Be the best kitchen
and laundry company,
in constant pursuit of
improving life at home.
OUR MISSION
Earn trust and create
demand for our brands
in a digital world.
OUR VALUES
Integrity, Respect,
Inclusion & Diversity,
One Whirlpool,
Spirit of Winning
2021 ANNUAL REPORT 1
A MESSAGE FROM
MARC BITZER
CHAIRMAN & CEO
It was my fervent hope that my message
to you last year about “2020 being a year
like none before,” would be a one-time
anomaly. The reality is that 2021 was
yet another year full of new business
challenges and learning to rationally
and emotionally deal with the continued
presence of COVID in our everyday lives.
Sadly, the human toll of the pandemic impacted
our company as global case numbers among our
employees mirrored the staggering global COVID
statistics in many ways. Despite all efforts to keep our
employees safe and the strong encouragement to get
vaccinated, we lost 32 colleagues to COVID,
a tragic loss for our Whirlpool family.
Our global economy was disrupted in different
ways as the pandemic’s intensity rippled around
the world. Massive supply chain challenges driven
by labor and component shortages coupled
with major transportation issues impacted our
factories throughout the entire year. This caused
understandable frustrations among our trade
customers and consumers waiting for our appliances
for far too long.
While difficult to find any bright side to a pandemic,
our company’s passion to succeed was fueled by the
fact that our consumers have needed and used our
appliances more than ever before. In fact, our connected
appliance data shows people are using washers 50%
more often and cooking products 150% more—this
dramatic increase in everyday usage will ultimately
lead to higher replacement rates in the future. Together
with the longer-term nesting trends we’re seeing
among consumers and a willingness to invest in
home-related products, the demand for appliances
and peripheries will be strong for years to come.
2 WHIRLPOOL CORPORATION
DOING THE RIGHT THING
During times like these, it’s not surprising that
employees and companies look for meaningful purpose
in what they are doing every day. At Whirlpool, ours is
crystal clear to all our employees: Being the best kitchen
and laundry company in the world, in constant pursuit
of improving life at home. Our vision has never been
more meaningful, and we celebrate that!
It is also during times like these that company values
are truly visible and relevant. Our 110 years of
history created exceptionally strong roots and values
which guide our everyday actions. Be it our public
commitment to achieving Net Zero by 2030, or the
continued support of United Way® and Habitat for
Humanity International®, our longstanding reputation
for “doing the right thing” is recognized everywhere.
We are particularly proud of recent accolades
including being named fourth among Newsweek’s
“America’s Most Responsible Companies.”
STAYING FOCUSED ON OUR
STRATEGIC IMPERATIVES
Keeping true to our plan….
1. Deliver Product Leadership
More than ever, we must invest in consumer-relevant
innovation and manufacturing on a global scale.
Leveraging innovation for premium and mass
categories in different launches, as we did this year
for the launch of the industry-first washer with 2-in-1
Removable Agitator, was very successful. With high
demand today in our premium products, we will
continue to expand our approach in product leadership.
2. Re-define What Product Is
We continue to enter and expand new ecosystems
and generate new revenue streams beyond our
traditional market shares, as IoT gains adoption. The
integration of both the Swash and Yummly brands in
our appliances are expected to provide high consumer
value, particularly as more people nest at home.
3. Win the Digital Consumer Journey
Due to consumer trends forged at the start of the
pandemic and as the world adapts to more digital
technologies, we are able to understand and serve
our consumers better than ever. Our direct to
consumer business has proved to be the fastest
growing sales channel globally.
4. Reinvent Our Value Chain
Our consumer service platforms and home delivery
networks created competitive advantages in all
regions, and World Class Manufacturing, digital and
industry 4.0 technologies in our factories allowed
us to make a step change in sustained cost and
quality competitiveness.
RAISING OUR LONG-TERM VALUE CREATION GOALS
Achieving These Goals Will Continue to Drive Significant Total Shareholder Return
SALES
ONGOING EBIT(a)
FCF(a)
ROIC
(Annual Organic
Net Sales Growth
Excluding Currency)
(Ongoing Earnings
Before Interest and
Taxes, % of Net Sales)
(Annual Free Cash Flow
as % of Net Sales)
(Return on Invested
Capital)
5-6%
11-12%
7-8%
15-16%
~3%
~10%
6%+
12-14%
UPDATED
LONG-TERM
(Annual Expectations)
PREVIOUS
LONG-TERM
(Annual Expectations)
2021 ANNUAL REPORT 3
DELIVERING AN ALL-TIME RECORD
FINANCIAL PERFORMANCE
2021 was the fourth all-time record year in a row—and
what a record it was: we grew our business by 13%
to $22B revenues, we delivered record ongoing EBIT
margins of 10.8%, and our adjusted free cash flow
came up to $2B.
We also returned $1.4B of this cash to shareholders
through dividends (the ninth consecutive year of
raising our dividend) and share buy-backs. The total
shareholder return (TSR) for 2021 was 33%, and the
three-year TSR was also solid at 141%.
Our updated long-term value creation goals which we
communicated in October of 2021 demonstrate our
confidence in being able to maintain and even improve
these impressive results in the future.
LOOKING INTO THE NEAR TERM FUTURE
As we turn the page to 2022, many macro uncertainties
remain, the accelerating inflation being the most
concerning one. We have taken decisive action on both
the cost and pricing side to mitigate the inflationary
pressures and feel confident about our ability to deliver
yet another great financial result in 2022.
At the same time we have invested resources toward
our strategic capabilities and expanded our supply
chain capacity to fully leverage the expected strong
consumer demand for years to come.
Last, let me take this opportunity to thank you, our
shareholders, for your continued trust in us, and I also
want to thank all our 69,000 employees around the
world for relentlessly working to improve life at home
for the millions of our loyal consumers.
TOTAL ANNUAL REVENUE
2021
2020
2019
$22.0B
$19.5B
$20.4B
ONGOING EBIT MARGIN(a)
10.8%
9.0%
6.8%
RETURN ON
INVESTED CAPITAL(b)
15.0%
10.8%
9.2%
2021
2020
2019
2021
2020
2019
2021
2020
2019
4 WHIRLPOOL CORPORATION
4 WHIRLPOOL CORPORATION
ADJUSTED FREE
CASH FLOW(a)
Sincerely,
$2.0B
$1.2B
$0.9B
Marc Bitzer
Chairman of the Board and
Chief Executive Officer
STRATEGIC IMPERATIVES
DELIVER
PRODUCT
LEADERSHIP
REDEFINE
WHAT
PRODUCT IS
WIN THE DIGITAL
CONSUMER
JOURNEY
REINVENT
OUR VALUE
CHAIN
UNIQUE STRUCTURAL POSITION
For consumers, we deliver value through innovative,
high-quality products and services. For shareholders,
we remain committed to our four fundamental pillars—
maintain our global leading scale, have the best brand
portfolio, fast pace of innovation and hold the best-cost
position in the home appliance industry.
• Global Leading Scale
• Best Brand Portfolio
• Fast Pace of Innovation
• Best-Cost Position
Best Brand Portfolio
7
BRANDS EACH WITH MORE THAN
$1B
IN SALES
Global Leading Scale
Best-Cost Position
#1
NORTH AMERICA
#1
LATIN AMERICA
#2
EUROPE, MIDDLE EAST
AND AFRICA
#2
WESTERN-BASED
COMPANY IN ASIA
We also hold the number one share position
in six of our 10 largest countries by revenue(c)
Our relentless approach to driving out cost and
complexity has proven our ability and agility to
execute in any operating environment. Whirlpool
Corporation remains in a unique position with global
leading scale, aggressive indirect spending discipline,
modularization in product architecture and expansion
of new ecosystems—and continues to structurally
improve the company’s margin profile.
We continue to adapt for consumer needs and
deliver the products our consumers want
and need to improve life at home.
2021 ANNUAL REPORT 5
A MESSAGE FROM
JOE LIOTINE,
PRESIDENT AND
CHIEF OPERATING
OFFICER
In the face of a challenging operating and
executed strategic divestitures and acquisitions,
macro environment in 2021, we reported
top-line growth driven by our focused
and successful execution of cost-based
price increases coupled with sustained
consumer demand. Combined with our
value-creating, go-to-market approach,
compelling product innovation and
invested in and delivered innovation across the globe,
achieving record margins in North America and
significantly improved EBIT contribution from our
international regions.
Globally, e-commerce trends continue to see strong
adoption and growth. Previous multi-year investments
in strategic digital transformation have delivered
accelerated growth, and we have tapped into new
dedicated focus on cost, we achieved
ecosystems with significant revenue generation
record performance for the fourth year in
a row in 2021, demonstrating our ability to
succeed in any environment.
Each region demonstrated progress toward our
strategic value creation initiatives, positioning us for the
future while also delivering exceptional 2021 results. We
opportunities. This was demonstrated by our launch
of SWASH brand detergent, marking our entry into the
liquid laundry detergent category. This product is just
one example that offers our consumers an end-to-end
experience. Additionally, leveraging our connected
appliance base, we enabled air-fry capabilities through
an over-the-air update, directly to our consumers.
delivered double-digit revenue growth in each region(a),
We continue to see our consumers engage with our
We reported top-line growth driven by
our focused and successful execution
appliances at increased levels. Along with our innovative
product offerings and positive consumer trends, our
business remains positioned for success and delivers
on our vision of improving life at home.
of cost-based price increases coupled with
sustained consumer demand.”
Sincerely,
Joe Liotine
President and
Chief Operating Officer
6 WHIRLPOOL CORPORATION
Regional Achievements
Achievements
Winn Everhart
EVP and President
Whirlpool North America
João Carlos Brega
EVP and President
Whirlpool Latin America
Our record revenue and record EBIT
margins demonstrate the strength and
agility of our teams and our business, as we
navigated significant supply chain disruptions
and unprecedented inflation.”
2021 represents our third
consecutive year of double-digit net
sales growth, led by our successful direct
to consumer business. Additionally, our
teams delivered very strong EBIT margins
of 8.4%, offsetting supply disruptions,
inflation and currency devaluation.”
Gilles Morel
EVP and President
Whirlpool EMEA
Shengpo (Samuel) Wu
EVP and President
Whirlpool Asia
We grew revenue 16% while also
expanding margins by 190 basis
points in a difficult operating environment,
demonstrating the effectiveness of our
actions and that our long-term profitable
growth strategy is on track.”
We successfully streamlined our
portfolio while restoring profitability
to the region, expanding margins by
590 basis points, despite significant COVID-
related disruptions.”
2021 ANNUAL REPORT 7
Fast Pace of Innovation
Innovation
Innovation began shaping the culture of Whirlpool Corporation with the invention of the first electric wringer
washing machine in 1911. Today, we continue to improve life at home with revolutionary products like our
industry-first washer with the 2-in-1 Removable Agitator, end-to-end consumer experiences and emerging
ecosystems for the home. Our investments in people, technology and growth are not only evidenced in the
design and delivery of our products and consumer-relevant innovation, but also demonstrated in our approach
to manufacturing.
8 WHIRLPOOL CORPORATION
TOP LOAD WASHER INNOVATION
Industry-First 2-in-1 Removable Agitator
The award-winning, smart top load washer with
the 2-in-1 Removable Agitator revolutionized
consumers’ ability to customize laundry loads
with a removable agitator post, freeing space
for bigger or bulkier loads of laundry. This
innovation was leveraged on two different
launches in both premium and mass categories
in North America, and was recognized by
Popular Science as one of the Top 100 “Best of
What’s New” innovations in 2021. Its extensive IP
strategy helps protect this and future evolutions
of our products.
• Industry-first 2-in-1 Removable Agitator
• Load & Go dispenser
• Stain Treat Faucet
• Connected washer and dryer
Dramatization: Washer does not have a front-facing window.
SWASH DETERGENT
• End-to-end laundry experience
• Digitally integrated for automatic
replenishment
• Ordered through app for convenient
at-home delivery
• Ultra-concentrated with Precision Pour Cap
• Ability for daily connections with consumers
YUMMLY SMART THERMOMETER
• Bluetooth® connected smart thermometer
wirelessly monitors temperature while cooking
• Integrated with select Whirlpool smart ovens,
Yummly controls the oven for desired results
• Pre-set assisted cooking eliminates guesswork
for consumers
• Built-in timers and alerts suggest when to flip
food, adjust heat, and how long to let meat rest
• Yummly app with over 2 million recipes, with
suggestions tailored to personal tastes
2021 ANNUAL REPORT 9
Best Brand Portfolio
WHIRLPOOL, KITCHENAID,
MAYTAG, INDESIT,
BRASTEMP, CONSUL &
HOTPOINT*
$1B+
BRANDS
SEVEN BRANDS, EACH
WITH MORE THAN
$1 BILLION IN SALES
Our consumers count on Whirlpool
Corporation’s industry-leading products
and services every day, year after year.
That’s why our brands deliver consumer-
centric solutions addressing the unique
needs and expectations of homes
throughout our ever-changing world,
utilizing insights to differentiate brand
personalities, shape engagement, and
measure satisfaction. We design and
manufacture on a global scale but remain
locally agile, enabling our brands to tailor
products for regional preferences and
maintain a competitive advantage.
*
10 WHIRLPOOL CORPORATION
Portfolio Our Brands and Products
Products
PRODUCTS THAT CREATE RICH
CONSUMER EXPERIENCES
Silence” laundry products, offering consumers our
quietest washer(d) and dryer(e) in the EMEA region.
As boundaries between life and work blurred and
people began spending more time at home, our
trusted brands maintained a relentless focus on
the consumer.
Embracing an increasing need for quiet and tranquil
home environments, Whirlpool delivered an ideal
balance of form and function with its “Supreme
KitchenAid launched a semi-automatic espresso
machine, making it easy for consumers to brew
quality espresso from home. This is the first
residential espresso machine that features dual
smart temperature sensors that communicate
with each other to maintain the perfect brewing
temperature for espressos, lattes and cappuccinos.
KitchenAid
Semi-Automatic
Espresso
Machine and
Automatic
Milk Frother
Attachment
Whirlpool Supreme
Silence Washing
Machine and
Tumble Dryer
Whirlpool 7-in-1 Air Fry Oven, flexibility with
air fry mode and true convection cooking
2021 ANNUAL REPORT 11
Our Operations
Operations
Our global manufacturing teams demonstrated our ability to advance in any operating environment as they
successfully adapted to “a different world, a different Whirlpool.” This did not come easy, but showcased the
remarkable resilience of Whirlpool Corporation’s global operations. Despite constrained supply chains, pandemic-
related challenges and supplier disruption, our Integrated Supply Chain executed strategic and organizational
agility to plan, source, manufacture, warehouse and deliver our products to our trade customers and consumers.
Our goal is to become the benchmark for global manufacturing excellence, deliver best-in-class manufactured
products at competitive cost and create a sustainable advantage for our company. This goal is driven by World
Class Manufacturing, a comprehensive methodology for improving productivity and quality, as well as reducing
losses in production systems. The implementation of real-time data and analytics, along with artificial intelligence
and connectivity among equipment continues to make our manufacturing and distribution network stronger,
delivering best-in-class operational excellence.
We know our ability to operate in the future depends on continuing our commitment to produce products
with purposeful innovation, without leaving a negative footprint, while helping protect our employees and the
communities in which we operate. It is our people who are the strength and backbone of our operations, and we
are committed to cultivating our talent to bring out the best in each employee, providing the support and tools to
grow, with health and safety remaining our number one priority.
12 WHIRLPOOL CORPORATION
People
Our People
There is something profoundly distinctive about
working at Whirlpool Corporation. Our humble
beginnings grounded us 110 years ago, and the
passion our people carry to improve life at home
moves us forward. Around the globe, we offer
leadership development and internship opportunities
to accelerate career growth and goals, and focus on
collaboration, engagement and teamwork. In our
manufacturing sites, World Class Manufacturing
includes a People Development pillar for employee
development, regulatory, safety and value-added
training. As a result, we were named to Forbes’ 2021
List of “World’s Best Employers” and ranked top 20 on
the list of “America’s Best Employers for New Grads.”
In 2021, we shifted our employee engagement survey
from an annual poll to quarterly surveys to allow for
continuous listening with quantitative and qualitative
feedback and a timely response. Our quarterly
Engagement Pulse provided feedback from nearly 83%
of global salaried and hourly employees.
At Whirlpool Corporation, we are steadfast in our
commitment to inclusion and diversity, resulting in
a perfect 100 score on the Corporate Equality
Index for the 18th consecutive year, and
once again we scored 100% on the 2021
Disability Equality Index.
AWARDED
100%
SCORE ON THE
2021 DISABILITY
EQUALITY INDEX
NAMED TO
FORBES’ 2021
“WORLD’S BEST
EMPLOYERS” LIST
8
UNIQUE EMPLOYEE
RESOURCE GROUPS
WOMEN’S NETWORK IN
4 REGIONS
PRIDE IN
3 REGIONS
YOUNG
PROFESSIONALS IN
3 REGIONS
2021 ANNUAL REPORT 13
Our Communities
Communities
Our founder Lou Upton began the long-standing
Maytag brand’s partnership with Boys & Girls Clubs
tradition of creating strong, lasting connections to the
of America®, Consul brand’s sponsorship of Instituto
community when he established our roots in Benton
Consulado da Mulher®, Whirlpool brand’s Care Counts
Harbor, Michigan. That tradition continues today,
Laundry Program and the Moments Not to Be Wasted
not only in our headquarters’ community, but in our
program in EMEA.
communities around the globe.
HOUSE+HOME
In collaboration with Habitat for Humanity®, we
created connections, built houses and invested in
neighborhoods in the United States, United Kingdom,
In 2021, Whirlpool Corporation strengthened our
Poland, Brazil and Argentina, and will expand our
collective impact and rolled out a worldwide corporate
reach in 2022. In the U.S. we launched a three-year
responsibility strategy called House+Home, recognizing
commitment with Habitat for Humanity’s BuildBetter
that both the “house”—a place to live—and “home”—
with Whirlpool initiative, a pledge to build 250 climate-
resilient neighborhoods focused on education and
resilient and energy-efficient homes and equip
community development—create thriving communities.
each with energy-efficient appliances. Whirlpool
To celebrate House+Home and create a One Whirlpool
experience, we launched the global strategy with our
House+Home World Tour. The Tour included already
established programs around the world, such as
Corporation sponsored three Habitat for Humanity
Global Housing Forums in Latin America, EMEA and
the Asia Pacific regions to address innovative solutions
for housing needs and changing climate norms.
14 WHIRLPOOL CORPORATION
14 WHIRLPOOL CORPORATION
UNITED WAY ®
COMPANY AND
EMPLOYEES GENERATED
$4.5M
FOR OUR LOCAL UNITED WAY CHAPTERS
IN THE UNITED STATES
Our work with United Way funds thousands of local
nonprofit affiliates within our communities that focus on
health, education and financial stability. Together in 2021,
our company and employee contributions generated
nearly $4.5 million for United Way of Southwest Michigan
and in each of our U.S. manufacturing plant communities.
Our Chairman and CEO Marc Bitzer serves on the United
Way Worldwide Board of Trustees.
Whirlpool Corporation and Habitat for Humanity have been working together for 22 years.
Donated more than
$130M to Habitat
Supports programs in
45 countries
Donated more than 210,000
ranges and refrigerators in new
Habitat homes in the U.S. and
Canada, and served approximately
120,000 families
Sponsored more than
190 homes and
donated 76,000
products to Habitat
families in EMEA
IMPACT CREATED THROUGH OUR
MULTI-YEAR RACIAL EQUALITY PLEDGE
• Broke ground on an 80-unit multi-family housing
development in the City of Benton Harbor
• Piloted new internship program and expanded an
apprenticeship program for local underserved high
school graduates
• Launched the “Benton Harbor First” initiative,
awarding new business to three Black-owned
suppliers
• Sponsored, organized and awarded grants for
Benton Harbor’s first pitch competition for Black
entrepreneurs and small business owners
2021 ANNUAL REPORT 15
Our Environmental Sustainability
Sustainability
Fulfilling our vision to be the best kitchen and laundry company, in constant pursuit of
improving life at home, requires us to think of our house and home not just in terms of our
four walls and the communities in which we live, but of the planet that sustains us.
Since the inception of our Office of Environment Affairs in 1970, our commitment to protecting our environment
and our communities has never been more critical than it is today. Our environmental sustainability approach
aggressively addresses the major challenges our planet and our consumers face. Our three focus areas are:
1. TECHNOLOGY AND INNOVATION INCLUSIVE OF DESIGN FOR THE ENVIRONMENT
Our Design for Environment (DFE) program connects product sustainability directly to our business goals
through designing and engineering high-performance goods and services that take less from the earth and are
better for people. In 2021, we created a Sustainable Product Playbook including chapters on recycled plastic content
in products, sustainable packaging and substances of concern in products to educate the broader organization
about how design decisions impact the sustainability attributes of products.
SCOPES 1 & 2
LOCATION-BASED(f)
(metric tons of CO2eq)
SCOPE 3 CATEGORY 11—
USE OF SOLD PRODUCTS(f)
(metric tons of CO2eq in millions)
2016(g)
241,266
591,405
832,671
2016(g)
2017
195,274
613,682
808,956
2017
2018
178,859
574,713
753,572
2019
182,097
502,314
684,411
2020
191,234
471,938
663,172
2021
172,392
438,325
610,717
SCOPE 1
SCOPE 2 Location-Based SCOPES 1 & 2
2018
2019
2020
2021
72
72
66
68
61
62
16 WHIRLPOOL CORPORATION
Some of Our Recent Eco-Efficient Products
The Whirlpool brand announced
the launch of a Top Load Washer
with 2-in-1 Removable Agitator in
the United States. ENERGY STAR®
certified washers like this one use
about 25% less energy and 33%
less water than regular washers(h).
The Whirlpool brand’s new
induction cooktop uses
electromagnetic energy to
heat up your cookware,
resulting in fast heating
and boiling and optimal
temperature control. A
smooth glass top surface
makes cleaning easy.
EMEA’s W Collection
refrigerator with No Frost
keeps fruit and vegetables
fresh up to 15 days thanks to
the Fresh Box + drawer with
humidity control.
2. ZERO IMPACT OPERATIONS
3. PRODUCT EFFICIENCY & INNOVATION
We are fully committed to a long-term view and to
Improving the lives of millions of our consumers
making the changes needed in our own operations
through purposeful innovation and efficient appliances
and in our supply chain to make production more
has been our priority over the last several decades.
sustainable—without shortcuts or excuses.
We do so by designing efficient product features that
After nearly two decades of consistent reductions in
GHG emissions, we accelerated our commitments
in 2021 and announced a Net Zero emissions
target in our plants and operations by 2030. Our
climate transition plan includes investments in
energy retrofits, onsite renewable energy and World
Class Manufacturing, which is a comprehensive
methodology for improving productivity and quality
and reducing losses in production systems through
strong employee involvement.
can help consumers decrease their energy and water
use while saving money, time and effort. We also look
beyond the design phase and consider the entire
environmental footprint of our products throughout
their life cycle, from the selection of raw materials
to the end of their useful life. We apply a range of
strategies that are aligned with a circular economy
model such as reducing, reusing and recycling, so that
growth can continue in a sustainable way.
2021 ANNUAL REPORT 17
ESG
WHIRLPOOL CORPORATION
Environmental, Social and
Governance (ESG) Scorecard
Additional information about ESG can be found in our Sustainability Report at WhirlpoolCorp.com.
Environmental
Our drive to create a sustainable planet through lower emissions in our plants and products
GHG Emissions Plants
(metric tons of CO2eq in thousands)
GHG EMISSIONS IN PLANTS(f)
1,000
NET ZERO
emissions target
in our plants
and operations
by 2030
.
7
2
3
8
.
7
0
1
6
0
2016
2021
(metric tons of
CO2eq in thousands)(g)
GHG Emissions Products
GHG EMISSIONS IN PRODUCTS
ZERO WASTE
80
0
20%
emissions reduction
in our products
by 2030
.
3
2
7
.
2
2
6
2016
2021
(metric tons of CO2eq
in millions)
90%
of sites achieved
Zero Waste to
Landfill Gold or
Platinum in 2021
Social
Our pursuit to improve life for employees and communities
WORKPLACE SAFETY
ZERO
work-related fatalities in 2021
GLOBAL FEMALE REPRESENTATION (i)
LOCAL COMMUNITIES
2020
2021
Director & Above
26%
29%
Total White Collar
47%
40%
Total Blue Collar
38%
39%
In the past 22 years, Whirlpool
has donated more than
$130 MILLION
to Habitat for Humanity®
and supports programs in
45
countries.
Governance and Ethics
Our steadfast commitment to sound corporate governance and ethics
OUR VIRTUAL
GLOBAL INTEGRITY WEEK
Included 12,000 attendees, 49 training
events, 79 Global Leadership videos
and 100% Executive Committee
member participation.
ENHANCED TRANSPARENCY
Applied robust frameworks to guide
our Sustainability Report disclosure
including GRI, SASB and TCFD.
18 WHIRLPOOL CORPORATION
RESPONSIBLE SOURCING
Global supplier audits conducted on
4 continents, 27 countries,
341 factories in 2021.
Fully deployed Global Material
Compliance Portal capability, sending
more than 43,000 material compliance
requests to over 1,300 suppliers
across the globe.
Obtained 100% of signatures from our
existing direct and finished product
sourcing suppliers for our Supplier
Code of Conduct.
BOARD DIVERSITY
(Independent Directors)
Gender Diversity
67%
Men
33%
Women
Racial/Ethnic Diversity
75%
White
17%
Asian/
South
Asian
8%
Black/
African
American
Awards
World’s Most
Admired Companies
FORTUNE magazine,
Eleventh consecutive year
World’s Best Employers
Forbes magazine
World’s Best Employers
for New Grads
Forbes magazine
Dow Jones
Sustainability Index,
North America
Corporate
Sustainability Index
Corporate Equality Index
Perfect score of 100 from
the Human Rights Campaign
Eighteenth consecutive year
Top Employer Europe
Top Employer Institute,
in six countries
Fourth consecutive year
America’s Most Just
Companies List
#1 in Household Goods
& Apparel Category,
Just Capital
America’s Most
Responsible Companies
Newsweek
Disability Equality Index
100% score
50 Best Companies
to Sell For
Selling Power magazine, Top five
EPA SmartWay®
Excellence Award
U.S. Environmental
Protection Agency
Seventh year
Red Dot Design Award
KitchenAid, Bauknecht brands
iF Design, 2021
Whirlpool, KitchenAid,
Bauknecht brands
Innovation By Design
Fast Company, Whirlpool brand
#1 in ‘Best of 2021’ Lists
U.S. News & World Report,
Maytag brand refrigerator
Best Products of 2021
U.S. News & World Report,
Whirlpool brand
Twice VIP
Whirlpool brand
Best Dryer of 2021
USA TODAY Network,
Maytag brand
Most Innovative
Washing Machine, 2021
Cleaning Awards, Good Housekeeping
Whirlpool brand
Best Places to Work
in Manufacturing
Whirlpool of India, Ltd.
Great Place to Work® Institute
2021 Best of What’s
New Award
Popular Science
Security and Environment
Promotion
Ecological Environment
Bureau of Shenzhen
Harmonious Labor
Promotion
Human Resources and Social
Security Bureau of Shenzhen
2021 ANNUAL REPORT 19
Awards Our Governance
Governance
Whirlpool is committed to operating sustainably and to creating shareholder value through the
highest standards of ethical and legal conduct over the long term. Our Board of Directors, sound
corporate governance structure and values-driven culture of integrity support us in delivering on
this commitment.
Our diverse and experienced Board is comprised of 13 directors including an independent Presiding Director and one
employee director, our Chairman and CEO Marc Bitzer. Our Board includes leaders with experience and demonstrated
expertise in many substantive areas that impact our business and align with our strategy, including product development,
digital marketing/branded consumer products, cybersecurity, and innovation, technology and engineering leadership.
During 2021, our Board had four committees: Audit, Corporate Governance and Nominating, Human Resources,
and Finance.
Each Board committee consists solely of independent directors and operates under a charter that provides the key
duties and responsibilities of each committee. Each director attended at least 75% of the total number of meetings of
the Board and the Board committees on which they served.
Our Board is responsible for overseeing Whirlpool Corporation’s integration of ESG principles throughout the company.
Senior leaders in key global functions comprise our ESG Councils which establish and oversee the company’s strategic
priorities on relevant ESG issues. We have a responsibility to leave the world a better place now and for generations to
come, and we forge ahead as we’ve always done: doing the right thing, the right way, with integrity.
BOARD OF DIRECTORS
Samuel R. Allen
Presiding Director, Corporate Governance
and Nominating Committee Chair,
Human Resources Committee
Former Chairman and Chief Executive Officer,
Deere & Company
Gerri T. Elliott
Finance Committee,
Human Resources Committee
Executive Vice President and
Chief Customer and Partner Officer,
Cisco Systems, Inc.
Marc R. Bitzer
Chairman and Chief Executive Officer,
Whirlpool Corporation
Greg Creed
Human Resources Committee Chair,
Finance Committee
Former Chief Executive Officer,
Yum! Brands, Inc.
Gary T. DiCamillo
Audit Committee, Finance Committee
Partner,
Eaglepoint Advisors, LLC
Diane M. Dietz
Finance Committee,
Human Resources Committee
Former President and Chief Executive Officer,
Rodan & Fields, LLC
20 WHIRLPOOL CORPORATION
Jennifer A. LaClair
Audit Committee, Corporate Governance
and Nominating Committee
Chief Financial Officer,
Ally Financial Inc.
John D. Liu
Finance Committee Chair,
Audit Committee
Managing Partner, Richmond Hill
Investments, Chief Executive Officer,
Essex Equity Management
James M. Loree
Audit Committee,
Human Resources Committee
President and Chief Executive Officer,
Stanley Black & Decker, Inc.
Harish Manwani
Corporate Governance and Nominating
Committee, Human Resources Committee
Senior Operating Partner,
The Blackstone Group
Patricia K. Poppe
Audit Committee, Corporate Governance
and Nominating Committee
Chief Executive Officer,
PG&E Corporation
Larry O. Spencer
Corporate Governance and Nominating
Committee, Finance Committee
President,
Armed Forces Benefit Association,
and 5Star Life Insurance Company
Michael D. White
Audit Committee Chair, Corporate
Governance and Nominating Committee
Former Chairman, President and
Chief Executive Officer,
DIRECTV
Executive Committee
Committee
Marc Bitzer
Chairman of the Board,
Chief Executive Officer
Pamela Klyn
Senior Vice President,
Communications, Public Affairs
and Sustainability
January 2022
João Carlos Brega
Executive Vice President and
President, Whirlpool Latin America
Joseph T. Liotine
President and
Chief Operating Officer
Roberto H. Campos
Senior Vice President,
Global Product Organization
Carey L. Martin
Senior Vice President and
Chief Human Resources Officer
Elizabeth A. Door
Senior Vice President,
Global Strategic Sourcing
Winn Everhart
Executive Vice President
and President,
Whirlpool North America
Holger Gottstein
Senior Vice President,
Strategy and Business
Development
Ava Harter
Senior Vice President and
Chief Legal Officer
Gilles Morel
Executive Vice President
and President,
Whirlpool Europe,
Middle East, Africa
D. Jeffrey Noel
Corporate Vice President,
Communications and
Public Affairs
2021
James W. Peters
Executive Vice President and
Chief Financial Officer
Shengpo (Samuel) Wu
Executive Vice President
and President,
Whirlpool Asia
2021 ANNUAL REPORT 21
Financial
Our Financial
Position
Jim Peters
EVP and Chief Financial Officer
OUR FINANCIAL POSITION
RETURNING CASH TO SHAREHOLDERS
In 2021, we delivered our fourth consecutive year of
record performance in a challenging environment,
serving as another proof point of our value-creating
business model. We delivered these results while
strengthening our balance sheet, streamlining our
portfolio, investing for growth and returning significant
levels of cash to our shareholders. This was made
possible by strong execution and decisive actions
taken by our global teams.
FINANCIAL SUMMARY
Our deep understanding of the business and the
actions we took early in 2021 enabled us to deliver
record revenues of $22 billion and record ongoing
EPS(a) of $26.59. We grew revenues by 13% while
delivering our highest-ever ongoing EBIT margin(a)
of 10.8%, fully offsetting $1 billion of raw material
inflation with cost-based price increases and cost-
takeout initiatives. We further strengthened our
balance sheet by achieving a debt leverage level below
our target of 2.0x; we also streamlined our portfolio
with the divestiture of our Whirlpool China and
Whirlpool Turkey businesses. Lastly, we successfully
generated record levels of cash delivering adjusted
free cash flow(a) of $2 billion, led by strong earnings.
We returned $1.4 billion to shareholders in 2021,
demonstrating our clear focus on shareholder returns.
We increased dividends for the ninth consecutive year
and repurchased $1 billion of shares in 2021.
INCREASED LONG-TERM VALUE
CREATION GOALS
In 2021, we announced new and increased long-term
value creation goals, as we consistently delivered
results at or above our previous long-term value
creation targets. We are a 110-year-old company
with a legacy of success and a vision anchored on
improving life at home. Our new value creation goals
build on our strong foundation, but reflect that we are,
today, a very different Whirlpool, operating in a very
different world. We now expect:
• Revenue to grow at a rate of 5% to 6%, almost
doubling our previous goal of approximately 3%;
• EBIT margin of 11% to 12%, up from previous
expectations of approximately 10%;
• Free cash flow as a percent of net sales of 7% to 8%,
up from 6% plus; and
• Return on invested capital of 15% to 16%, an
increase from our previous target of 12% to 14%.
We are confident in our future success and that
achieving these goals will continue to drive significant
shareholder return.
Our Financial Strength
9
CONSECUTIVE YEARS
OF DIVIDEND INCREASES
$1B
CAPITAL EXPENDITURES
AND R&D
$1.4B
RETURNED TO
SHAREHOLDERS
$2B
ADJUSTED FREE
CASH FLOW
22 WHIRLPOOL CORPORATION
FUNDING THE BUSINESS
Our commitment to fund innovation and growth in
the future remains unchanged, demonstrated by our
investment of over $1 billion in capital expenditures
and research and development in 2021. This includes
product innovations like our industry-leading, externally
recognized, first-of-its kind 2-in-1 Removable Agitator in
our top load laundry machine in North America and the
launch of new products in EMEA, such as our new built-
in refrigerator, which was recognized as the quietest
built-in refrigerator in the marketplace.
We have also funded business innovations like our
Whirlpool direct-to-consumer business, which represents
our fastest growing distribution channel—an area that
we will continue to expand moving forward.
Financial Highlights
In closing, and as we look beyond 2021, we have
continued to demonstrate that our business is a
structurally different Whirlpool from just 10 years
ago and well-positioned to, again, build on our record
results. Our new long-term value creation goals reflect
our confidence in a different Whirlpool and in our
commitment to fund innovation and growth, together
with a clear focus on returning significant levels of
cash to our shareholders.
Jim Peters
EVP and Chief Financial Officer
FULL-YEAR 2021, 2020 AND 2019 RETURN ON INVESTED CAPITAL
The reconciliation provided below compares the non-GAAP financial measure Return on Invested Capital (ROIC) with the most directly
comparable GAAP financial measure, Return on Assets (ROA), for the twelve months ended December 31, 2021, December 31, 2020
and December 31, 2019. The Company selected ROIC because it represents an important measure of capital efficiency, which is
considered a key driver of sustainable stockholder value creation. The Company defines ROIC as 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.
Net earnings (loss) available to Whirlpool Corporation
Total assets
Return on assets (ROA)
Ongoing earnings before interest and taxes*
Taxes @ 24%**
Ongoing EBIT after taxes
Total assets
Current liabilities
Current maturities on long-term debt
Notes payable
Total invested capital
Return on invested capital
Twelve Months Ended December 31,
2019
$1,168
18,973
6.2%
2019
$1,392
334
2020
$1,075
20,436
5.3%
2020
$1,760
422
2021
$1,783
20,285
8.8%
2021
$2,379
571
$1,058
$1,338
$1,808
2019
2020
2021
$18,973
$20,436
$20,285
(8,369)
(8,330)
(8,510)
559
294
298
12
298
10
$11,457
$12,416
$12,083
2019
9.2%
2020
10.8%
2021
15.0%
* Please see pages 36-40 of our Annual Report on Form 10-K for a reconciliation of the non-GAAP financial measure ongoing earnings before interest and
taxes, with the most directly comparable GAAP financial measure, net earnings available to Whirlpool.
** Taxes are calculated at a flat 24% tax rate to enable standard, consistent comparisons across years and remove variability of tax credits, allowances,
incentives and other tax-related items that can fluctuate on an annual basis.
2021 ANNUAL REPORT 23
PERFORMANCE GRAPH
The graph below compares the yearly dollar change in the cumulative total stockholder return on our common stock against the
cumulative total return of Standard & Poor’s [S&P] Composite 500 Stock Index and the cumulative total return of the S&P 500 Household
Durables Index for the last five fiscal years.** The graph assumes $100 was invested on December 31, 2016, in Whirlpool Corporation
common stock, the S&P 500 and the S&P 500 Household Durables Index.
** Cumulative total return is measured by dividing [1] the sum of [a] the cumulative amount of the dividends for the measurement period, assuming dividend
reinvestment, and [b] the difference between share price at the end and at the beginning of the measurement period by [2] the share price at the beginning
of the measurement period.
TOTAL RETURN TO SHAREHOLDERS
(Includes reinvestment of dividends)
Company/Index
Whirlpool Corporation
S&P 500 Index
S&P 500 Household Durables
Company/Index
Whirlpool Corporation
S&P 500 Index
S&P 500 Household Durables
ANNUAL RETURN PERCENTAGE Twelve Months Ended December 31,
2017
-4.89
21.83
18.65
2018
-34.50
-4.38
-34.18
2019
42.83
31.49
40.94
2020
26.52
18.40
20.37
2021
33.26
28.71
36.51
INDEXED RETURNS Twelve Months Ended December 31,
Base Period
2016
$ 100
$ 100
$ 100
2017
2018
2019
2020
2021
$ 95.11
$ 62.30
$ 121.83
$ 116.49
$ 88.99
$ 153.17
$ 112.58
$ 181.35
$ 150.03
$ 233.41
$ 118.65
$ 78.10
$ 110.07
$ 132.49
$ 180.87
Comparison of cumulative five-year total return
$250
$200
$150
$100
$ 50
S&P 500 Index
S&P 500
Household Durables
Whirlpool Corporation
2016
2017
2018
2019
2020
2021
FOOTNOTES:
PAGES 4, 6, 22
(a) For more information on the adjustments and additional
reconciliations of non-GAAP measures, such as adjusted free cash
flow, gross debt to ongoing EBITDA, ongoing earnings per share
and ongoing earnings before interest and taxes (EBIT), to the most
directly comparable GAAP financial measures, see pages 36-40 of
the 2021 Form 10-K included with this annual report, or the document
titled “GAAP Reconciliations” at Investors.WhirlpoolCorp.com/
financial-information/annual-reports. For a reconciliation of Asia
revenue growth excluding the impact of our Whirlpool China
divestiture, please see the “GAAP Reconciliations” document.
(b) See Financial Highlights above for the applicable non-GAAP to
GAAP reconciliations. Based on the change of our accounting
principle, we have recasted our financials, including ROIC for the
years 2019 and 2020, as set forth in our Form 8-K filed April 22, 2021.
PAGE 5
(c) Share positions based on 2021 T9 Euromonitor and AHAM data.
PAGE 11
(d) In the FS Washer category 8kg 1400 rpm or above; comparing the
noise spin level declared by producers. Referred to Whirlpool model:
W6X W845WB FR (FRANCE), W6X W845WR FR (France), W7X W845WR
IT (Italy), W7X W845WR SPT (Spain and Portugal); W7X W845WB CS
(Czech Republic and Slovakia), W7X W845WB EE (Bulgaria, Croatia,
24 WHIRLPOOL CORPORATION
Czech Republic, Estonia, Latvia, Lithuania, Poland, Romania, Slovakia,
Slovenia) and W6X W845WB EE (Belgium, Bulgaria, Croatia, Czech
Republic, Estonia, Latvia, Lithuania, Luxembourg, Netherlands,
Poland, Romania, Slovakia, Slovenia) (November 2020).
(e) Comparing the drying noise declared by producers in the energy
label. Referred to Whirlpool Supreme Silence 8kg and 9kg TD with
59dbA (December 2020).
PAGES 16, 18
(f) Emissions data includes divested entities for the period in which
they were owned by Whirlpool during the year.
(g) The 2016 target base year was selected in accordance with the
SBTi Criteria and Recommendations.
PAGE 17
(h) Based on energystar.gov. See energystar.gov for further information
on ENERGY STAR® efficiency. ENERGY STAR is a registered trademark
owned by the U.S. Environmental Protection Agency.
PAGE 18
(i) 2020 includes the employee population of Whirlpool China Co. Ltd.
which the Company divested majority ownership of in 2021.
Excluding Whirlpool China, the 2020 gender diversity values were
26% director and above, 39% white collar, and 37% blue collar,
indicating an increase in gender diversity across all three segments
from 2020 to 2021.
(Mark One)
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
☒
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2021
OR
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______ to _______
Commission file number 1-3932
WHIRLPOOL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware
(State of Incorporation)
2000 North M-63
Benton Harbor, Michigan
(Address of principal executive offices)
38-1490038
(I.R.S. Employer Identification No.)
49022-2692
(Zip Code)
Registrant's telephone number, including area code (269) 923-5000
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Common stock, par value $1 per share
Trading symbol(s)
WHR
Name of each exchange on which registered
Chicago Stock Exchange and New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: NONE
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the
Exchange Act.
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the
Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be
submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such
shorter period that the registrant was required to submit such files).
Yes ☒
No ☐
Yes ☐
No ☒
Yes ☒
No ☐
Yes ☒
No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a
smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated
filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
(Check one)
Large accelerated filer ☒
Non-accelerated filer ☐ (Do not check if a smaller reporting company)
Accelerated filer ☐
Smaller reporting
company ☐
Emerging growth
company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or
revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of
the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C.
7262(b)) by the registered public accounting firm that prepared or issued its audit report.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
Yes ☒
Yes ☐
No ☐
No ☒
The aggregate market value of voting common stock of the registrant held by stockholders not including voting stock held by directors and executive officers
of the registrant and certain employee plans of the registrant (the exclusion of such shares shall not be deemed an admission by the registrant that any such
person is an affiliate of the registrant) at the close of business on June 30, 2021 (the last business day of the registrant's most recently completed second
fiscal quarter) was $13,381,984,844.
On February 4, 2022, the registrant had 58,611,212 shares of common stock outstanding.
Portions of the following documents are incorporated herein by reference into the Part of the Form 10-K indicated:
DOCUMENTS INCORPORATED BY REFERENCE
The registrant's proxy statement for the 2022 annual meeting of stockholders (the "Proxy Statement")
Part III
Document
Part of Form 10-K into which incorporated
WHIRLPOOL CORPORATION
ANNUAL REPORT ON FORM 10-K
For the fiscal year ended December 31, 2021
TABLE OF CONTENTS
PART I
Business
Item 1.
Item 1A. Risk Factors
Item 1B. Unresolved Staff Comments
Item 2.
Item 3.
Item 4. Mine Safety Disclosures
Properties
Legal Proceedings
PART II
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters
and Issuer Purchases of Equity Securities
[Reserved]
Item 6.
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
Item 8.
Financial Statements and Supplementary Data
Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
Item 9.
Item 9A. Controls and Procedures
Item 9B. Other Information
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
PART III
Item 10. Directors, Executive Officers and Corporate Governance
Item 11. Executive Compensation
Item 12. Security Ownership of Certain Beneficial Owners and Management
and Related Stockholder Matters
Item 13. Certain Relationships and Related Transactions, and Director
Independence
Item 14. Principal Accountant Fees and Services
PART IV
Item 15. Exhibits, Financial Statement Schedules
Item 16. Form 10-K Summary
SIGNATURES
PAGE
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26
27
27
27
28
28
28
51
53
109
109
109
109
110
110
111
111
111
112
112
119
PART IITEM 1.BUSINESSOur CompanyImproving life at home has been at the heart of our business for 110 years – it is why we exist and why we are passionate about what we do. Whirlpool Corporation ("Whirlpool"), committed to being the best global kitchen and laundry company, in constant pursuit of improving life at home, was incorporated in 1955 under the laws of Delaware and was founded in 1911. Whirlpool manufactures products in 10 countries and markets products in nearly every country around the world. We have received worldwide recognition for accomplishments in a variety of business and social efforts, including leadership, diversity, innovative product design, business ethics, social responsibility and community involvement. We conduct our business through four operating segments, which we define based on geography. Whirlpool's operating segments consist of North America; Europe, Middle East and Africa ("EMEA"); Latin America and Asia. Whirlpool had approximately $22 billion in annual net sales and 69,000 employees in 2021.As used herein, and except where the context otherwise requires, "Whirlpool," "the Company," "we," "us," and "our" refer to Whirlpool Corporation and its consolidated subsidiaries.Our Strategic ArchitectureOur strategic architecture is the foundational component that drives our shareholder value creation and strategy. Below are the key components of our strategic architecture.Unique Global PositionWhirlpool Corporation is committed to delivering significant, long-term value to both our consumers and our shareholders. For consumers, we deliver value through innovative, high-quality products that solve everyday problems while saving time, energy and water. 3 We have an agile and resilient business model which enables us to succeed in any operating
environment. Our proven value creating approach is enabled by our unique global position: global
leading scale, accelerating our pace of innovation, best brand portfolio and best cost position.
Global Leading Scale
We are committed to being the best global kitchen and laundry company.
Our global footprint includes a balance of developed countries and emerging markets, including a
leading market share position in many of the key countries in which we operate. We believe we are
well positioned to continue to convert demand into profitable growth.
Accelerating Our Pace of Innovation
Whirlpool Corporation has been responsible for a number of first-to-market innovations. These
include the first electric wringer washer in 1911, the first residential stand mixer in 1919, the first
countertop microwave in 1967, the first energy and water efficient top-load washer in 1998 and the
first top-load washer removable agitator in 2021, among others. In 2020, the KitchenAid brand
introduced its largest-capacity third rack dishwasher designed to help families load more dishes and
run the product less, promoting water and energy savings. Our holistic innovation approach, using
Design for Sustainability principles in our global platforms, connects product sustainability directly
with our business goals. We are proud of our track record of innovation and our progress on
sustainable innovation with eco-efficient products that reduce environmental impacts.
We are committed to continue innovating for a new generation of consumers. Our world-class
innovation pipeline has accelerated over the last few years, driven by consistent innovation and a
passionate culture of employees focused on bringing new technologies to market. In 2021, we
launched more than 100 new products throughout the world, demonstrating our commitment to
innovation, including our new premium top load washer in North America featuring the industry's
first removable agitator which was named one of the "100 greatest inventions" of 2021 by Popular
Science, new iF Design Award winner built-in steam oven in EMEA, and multiple new KitchenAid small
appliances including espresso makers and stand mixer attachments. We also expanded our
footprint in consumables with new scents of Swash detergent.
As the shift to digital continues, consumers continue to desire connected appliances which fit
seamlessly into the larger home ecosystem. As a leading connected appliance manufacturer, we are
excited to bring new connected products and technologies to market, including voice control with a
compatible smart home assistant, food recognition and automatic laundry detergent replenishment.
Additionally, in 2021, we enabled an over-the-air update to qualified connected appliances,
delighting the consumer with added Air Frying capabilities in their existing products. Whether
developed internally or with one of our many collaborators, we believe these digitally-enabled
products and services will increasingly enhance the appliance experience for our consumers, as
demonstrated by our highly rated mobile apps.
4
Whirlpool manufactures and markets a full line of major home appliances and related products. Our principal products are laundry appliances (including commercial laundry appliances), refrigerators and freezers, cooking appliances, and dishwashers. Additionally, the Company has a robust portfolio of small domestic appliances, including the KitchenAid stand mixer. Prior to the divestiture of our Embraco business on July 1, 2019, we also produced compressors for refrigeration systems. The following chart provides the percentage of net sales for each of our product categories which accounted for 10% or more of our consolidated net sales over the last three years:YearPercentageProduct Categories as % of Net Sales28%29%30%30%31%31%26%25%23%16% 15% 16%Laundry AppliancesRefrigerationCooking AppliancesDishwashing and Other2021 2020 20190%25%50%75%100%5 Best Brand Portfolio
We have the best brand portfolio in the industry, including seven brands with more than $1 billion in
revenue.
We aim to position these desirable brands across many consumer segments. Our sales are led by
our global brands Whirlpool and KitchenAid. Whirlpool is trusted throughout the world as a brand that
delivers innovative care daily. Our KitchenAid brand brings a combination of innovation and design
that inspires and fuels the passion of chefs, bakers and kitchen enthusiasts worldwide. These two
brands are the backbone of our strategy to offer differentiated products that provide exceptional
performance and desirable features while remaining affordable to consumers.
Additionally, we have a number of strong regional and local brands, including Maytag, Consul,
Brastemp, Amana, Bauknecht, JennAir, Indesit and Yummly. These brands add to our impressive depth
and breadth of kitchen and laundry product offerings and help us provide products that are tailored
to local consumer needs and preferences. Our best brand portfolio in the industry, paired with our
robust investment in research and development and consumer insights, positions us well to meet
trends in consumer preferences and market demand.
Best Cost Position
Our global footprint and scale provides a cost benefit on everything we do and we are committed to
a relentless focus on cost efficiency. The global scale enables our local-for-local production model.
We are focused on producing as efficiently as possible and at scale throughout the world.
As the global environment continues to change, we believe our demonstrated ability to execute cost
takeout allows us to effectively cope with macroeconomic challenges, and we see additional
opportunities to further streamline our cost structure. For example, we have already taken decisive
steps to further streamline our day-to-day manufacturing operations, with the divestitures of
Whirlpool China and our Turkey manufacturing location. We are also on a journey to reduce the
complexity of our design and product platforms. This initiative, among many others, will enable us to
utilize increased modular production and improved scale in global procurement.
We believe our cost position is clearly differentiated in the appliance industry and we are committed
to even further improvement, creating strong levels of value for our shareholders, regardless of the
external environment.
Value Creation Framework
Our long-term value creation framework is built upon the strong foundation we have in place: our
industry-leading brand portfolio and robust product innovation pipeline, supported by our global
operating platform and executed by our exceptional employees throughout the world. We first
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introduced this framework in 2017 with a clear focus on value creation and a balanced approach to grow profitability. We have consistently been delivering at or above all these targets and during the third quarter of 2021, we updated our value creation goals, which demonstrates our confidence in our long-term success, and are supported by strong underlying drivers, such as a positive outlook on housing, strong replacement demand and evolving consumer habits. Additionally, our demonstrated value-creating go-to-market approach, lower cost base and compelling innovation pipeline position us for continued success. Our new long-term value-creation goals reflect our agile and resilient business model, which enables us to succeed in any operating environment.Reconciliations to the equivalent GAAP measures — net sales, net earnings, return on assets "ROA" and cash provided by (used in) operating activities — for the metrics below are not provided as they rely on market factors and other assumptions outside of our control. We measure these value-creation components by focusing on the following key metrics:Profitable GrowthMargin ExpansionCash ConversionInnovation-fueled growth at or abovethe marketDrive cost and price/mix to grow profitabilityAsset efficiency converts profitable growth to cash5-6%11-12%7-8%Annual OrganicNet Sales GrowthOngoing EBIT MarginFCF(1) as % of Net Sales1) The Company defines free cash flow as cash provided by (used in) operating activities less capital expenditures.Capital Allocation StrategyWe take a balanced approach to capital allocation by focusing on the following key metrics:We remain confident in our ability to effectively manage our business through supply chain constraints, cost inflation and other macroeconomic factors and expect to continue delivering long-term value for our shareholders.7 Regional Business SummaryNorth America• In the United States, we market and distribute major home appliances and other consumer products primarily under the Whirlpool, KitchenAid, Maytag, Amana, JennAir, Roper, Affresh, Swash, everydrop and Gladiator brand names primarily to retailers, distributors and builders, as well as directly to consumers. We also market small domestic appliances under the KitchenAid brand name to retailers, distributors and directly to consumers.• We also market Yummly, a recipe app in the United States, through the Yummly brand website and phone application stores.• In Canada, we market and distribute major home appliances primarily under the Whirlpool, KitchenAid, Maytag, JennAir, Amana and Speed Queen brand names and small domestic appliances under the KitchenAid brand to retailers, distributors, builders, and directly to consumers.• We sell some products to other manufacturers, distributors, and retailers for resale in North America under those manufacturers' and retailers' respective brand names. Europe, Middle East and Africa(EMEA)• In Europe, we market and distribute our major home appliances to retailers, distributors and directly to consumers under the Whirlpool, Indesit, Hotpoint*, Bauknecht, Ignis, Maytag and Privileg brand names. We also market major home appliances and small domestic appliances under the KitchenAid brand name primarily to retailers and distributors, as well as directly to consumers.• We market and distribute products under the Whirlpool, Bauknecht, Maytag, Indesit, Amana and Ignis brand names to distributors and dealers in Africa and the Middle East. In Turkey, we exited our commercial operations in the second quarter of 2019 and sold our manufacturing entity in the second quarter of 2021.• In addition to our operations in Western, Central and Eastern Europe, and Russia, we have a sales subsidiary in Morocco.Latin America• In Latin America, we produce, market and distribute our major home appliances, small domestic appliances and other consumer products primarily under the Consul, Brastemp, Whirlpool, KitchenAid, Acros, Maytag and Eslabon de Lujo brand names primarily to retailers, distributors and directly to consumers.• We serve the countries of Brazil, Mexico, Bolivia, Paraguay, Uruguay, Venezuela, and certain Caribbean and Central America countries, via sales and distribution through accredited distributors.• In July 2019, our Latin America operations sold our compressors business to a third party.Asia• In Asia, we market and distribute our major home appliances and small domestic appliances in multiple countries, notably in India. • We market and distribute our products in Asia primarily under the Whirlpool, Maytag, KitchenAid, Ariston, Indesit, Bauknecht and Elica brand names through a combination of direct sales to appliance retailers and chain stores and through full-service distributors to a large network of retail stores. • In May 2021, we sold our majority interest in Whirlpool China and subsequently retained a non-controlling interest. Whirlpool China continues to sell Whirlpool-branded products through a licensing agreement in China. In September 2021, we acquired additional interest in Elica PB India.* Whirlpool ownership of the Hotpoint brand in the EMEA and Asia Pacific regions is not affiliated with the Hotpoint brand sold in the Americas.8 CompetitionCompetition in the major home appliance industry is intense, including competitors such as Arcelik, BSH (Bosch), Electrolux, Haier, Hisense, LG, Mabe, Midea, Panasonic and Samsung, many of which are increasingly expanding beyond their existing manufacturing footprint. The competitive environment includes the impact of a changing retail environment, including the shifting of consumer purchase practices towards e-commerce and other channels. Moreover, our customer base includes large, sophisticated trade customers who have many choices and demand competitive products, services and prices. We believe that we can best compete in the current environment by focusing on introducing new and innovative products, building strong brands, enhancing trade customer and consumer value with our product and service offerings, optimizing our regional footprint and trade distribution channels, increasing productivity, improving quality, lowering costs, and taking other efficiency-enhancing measures. SeasonalityThe Company's quarterly revenues have historically been affected by a variety of seasonal factors, including holiday-driven promotional periods. In each fiscal year, the Company's total revenue and operating margins are typically highest in the third and fourth quarter. In 2021 and 2020, we have realized a seasonality pattern that differed from historical periods due to the COVID-19 pandemic and other macroeconomic factors. In 2022, the Company expects the seasonal pattern of revenues and operating margins to return to historical norms. Raw Materials and Purchased ComponentsWe are generally not dependent upon any one source for raw materials or purchased components essential to our business. In areas where a single supplier is used, alternative sources are generally available and can be developed within the normal manufacturing environment. Some supply disruptions and unanticipated costs may be incurred in transitioning to a new supplier if a prior single supplier relationship was abruptly interrupted or terminated. In the event of a disruption, we believe that we will be able to leverage our global scale to qualify and use alternate materials, though sometimes at premium costs. In 2021 and 2020, our industry was impacted by supply constraints with our suppliers, factories and logistics providers, based in significant part on certain weather events and natural disasters out of our control. In 2022, we expect supply constraints and disruptions, inflation and other macroeconomic factors to continue to impact our business operations. Working CapitalThe Company maintains varying levels of working capital throughout the year to support business needs and customer requirements through various inventory management techniques, including demand forecasting and planning. See the Financial Condition and Liquidity section of the “Management's Discussion and Analysis” section of this Annual Report on Form 10-K for additional information on our working capital requirements and processes.Trademarks, Licenses and PatentsWe consider the trademarks, copyrights, patents, and trade secrets we own, and the licenses we hold, in the aggregate, to be a valuable asset. Whirlpool is the owner of a number of trademarks in the United States and foreign countries. The most important trademarks to North America are Whirlpool, Maytag, JennAir, KitchenAid and Amana. The most important trademarks to EMEA are Whirlpool, KitchenAid, Bauknecht, Indesit, Hotpoint* and Ignis. The most important trademarks to Latin America are Consul, Brastemp, Whirlpool, KitchenAid and Acros. The most important trademark to Asia is Whirlpool. We receive royalties from licensing our trademarks to third parties to manufacture, sell and service certain products bearing the Whirlpool, Maytag, KitchenAid and Amana brand names. We continually apply for and obtain patents globally. The primary purpose in obtaining patents is to protect our designs, technologies, products and services.*Whirlpool ownership of the Hotpoint brand in the EMEA and Asia Pacific regions is not affiliated with the Hotpoint brand sold in the Americas.9 Government Regulation and Protection of the Environment
At Whirlpool, we believe our vision to be the world’s best kitchen and laundry company, in constant
pursuit of improving life at home, is an urgent call to action. Our commitment to sustainability is
guided by this belief and brought to life through the choices and investments we make: to protect
our shared environment, to support our employees’ continuous growth and ensure their safety, and
to always do our best to uplift our communities. And we are uniquely placed to achieve that.
We know that an environmentally sustainable Whirlpool is a more competitive Whirlpool - a
company better positioned for long-term success. Our Environmental, Social and Governance (ESG)
strategy is an integral part of our long-term, globally aligned strategic imperatives and operating
priorities. It is deeply embedded in our vision, mission and values as an organization. We
continuously seek to identify ways to broaden our commitments to ESG efforts and make progress
on our goal of making life in our homes, our communities and our operations better today and in
the future.
We are committed to developing innovative products that drive efficiencies in water and energy use
and save our consumers’ time. Because we consider consumer preferences and cultural influences,
and differences in infrastructure and availability of resources (such as water and energy) around the
world, our approach and impact vary by region. In developed countries such as the U.S. and in
Europe, our journey in providing efficient appliances has been one of continuous success over
decades of delivering on innovation while not sacrificing performance. It is these purposeful
innovations that have improved the lives of millions of our consumers in meaningful ways.
Especially in developing countries, we have focused on the introduction of unique products, such as
the twin tub semiautomatic washer in India. The low-cost unit allows washing of more clothes with
better efficiency and significant time savings. These water and energy savings also help reduce our
consumers’ utility bills and protect our environment. Our consumers can spend these time and
financial savings taking care of their families in other ways.
In 2021, the Company announced a global commitment to reach a net zero emissions target in its
plants and operations (Scopes 1 and 2) by 2030, which will cover more than 30 of Whirlpool
Corporation's manufacturing sites and its large distribution centers around the world. We expect to
achieve this target by generating and consuming renewable energy, including installation of wind
turbines, solar panels and investing in off-site renewables through virtual power purchase
agreements, improvements in energy efficiency and leveraging carbon removal to offset emissions
that cannot be avoided. We are also committed to a 20 percent reduction in emissions linked to the
use of our products (Scope 3, Category 11) across the globe by 2030, compared to 2016 levels. This
target has been approved by the Science Based Targets initiative, and builds on the Company's
earlier reduction in emissions across all scopes since 2005. We are working to design products to
make them more energy and water efficient and we are investing in innovations that automate
water levels, utilize cold water settings as default, and help auto-dose detergents to further lower its
environmental impacts and save consumers time and money. The Company is also taking actions to
reduce waste material across all global manufacturing facilities and helping to prevent food waste
through educational campaigns. In April 2021, the Company issued an inaugural Sustainability Bond
to further advance
its global sustainability strategy focusing on actions to drive positive
environmental and social impacts.
We comply with all laws and regulations regarding protection of the environment, and in many cases
where laws and regulations are less restrictive, we have established and are following our own
standards, consistent with our commitment to environmental responsibility. These compliance
requirements tend to pair well with our ESG focus and we believe that we are in compliance, in all
material respects, with presently applicable governmental provisions relating to environmental
protection in the countries in which we have manufacturing operations. Compliance with these
environmental laws and regulations did not have a material effect on capital expenditures, earnings,
or our competitive position during 2021 and is not expected to be material in 2022.
The entire major home appliance industry, including Whirlpool, must contend with the adoption of
stricter government energy and environmental standards. These standards have been phased in
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over the past several years and continue to be phased in, and include the general phase-out of
ozone-depleting chemicals used in refrigeration, and energy and related standards for selected
major appliances, regulatory restrictions on the materials content specified for use in our products
by some jurisdictions and mandated recycling of our products at the end of their useful lives.
Compliance with these various standards, as they become effective, will require some product
redesign. However, we believe, based on our understanding of the current state of proposed
regulations, that we will be able to develop, manufacture, and market products that comply with
these regulations.
Our operations are also subject to numerous legal and regulatory requirements concerning product
energy usage, data privacy, cybersecurity, employment conditions and worksite health and safety.
These requirements often provide broad discretion to government authorities, and they could be
interpreted or revised in ways that delay production or make production more costly. The costs to
comply, or associated with any noncompliance, are, or can be, significant and variable from period
to period.
Specific to data privacy and cybersecurity, our Board exercises oversight for our global information
security and privacy programs. This includes understanding our business needs and associated
risks, and reviewing management's strategy and recommendations for managing cybersecurity and
privacy risks. In line with this oversight responsibility, the Audit Committee receives reports on cyber
program effectiveness periodically, and the Board of Directors receives a full presentation annually
on cybersecurity related trends and program updates. For our employees globally, we maintain a
cybersecurity and privacy training program that includes training, simulated phishing exercises, and
regular publications on our Company portal. Additionally, we maintain a privacy program that
manages compliance to privacy regulations globally.
Additionally, in line with the guidelines provided by health organizations around the world and
consistent with our commitment to employee health and safety as our highest priority, we have
added various health and safety measures in our manufacturing, service, sales and administrative
offices, warehouse and distribution spaces in response to the COVID-19 pandemic. These actions
include provision of personal protection equipment to employees, increased manufacturing line
spacing or protective barriers to accommodate physical distancing guidelines, temperature
screening, on-site COVID-19 vaccination clinics and increased enablement of remote working. We
may incur significant pandemic-related expenses for additional actions in the future, in line with our
commitment to employee health and safety.
Human Capital Management
At Whirlpool, our values guide everything we do. We are committed to the highest standards of
ethical and legal conduct and have created an environment where open and honest communication
is the expectation, not the exception. We hold our employees to this standard and offer the same in
return. Our Integrity Manual was created to help our employees follow our commitment to win the
right way. Additionally, our Supplier Code of Conduct formalizes the key principles under which
Whirlpool’s suppliers are required to operate.
Our Human Capital Strategy is built around three pillars:
Extraordinary Performance
Our employees are a critical driver of Whirlpool’s global business results. On December 31, 2021,
Whirlpool employed approximately 69,000 employees across 49 countries, with 30 percent located
within the United States. Outside of the United States, our largest employee populations were
located within Brazil and Mexico. We regularly monitor various key performance indicators around
the human capital priorities of attracting, retaining, and engaging our global talent. In addition, we
enable the execution of our strategic priorities by providing all employees with access to learning
opportunities to improve critical skills, and to develop professional and leadership acumen.
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Great People
We have a long tradition of measuring employee engagement through our employee engagement
surveys. We continued to use frequent global pulse surveys with coverage of broader engagement
and well-being topics.
Whirlpool offers a variety of programs globally to protect the health and safety of our employees.
While we maintain targets for year-over-year reduction of the total recordable incident rate and
serious injuries, our goal is always zero. In 2021, we continued to focus on the demands within the
context of COVID-19 challenges. While most employees continued to work on-site throughout the
pandemic in manufacturing plants or other locations where remote work was not feasible, many
service, sales and administrative employees returned to our workplaces from a remote work
environment, where possible. In addition, we implemented additional safeguards in our plants
consistent with the guidelines provided by the Centers for Disease Control and Prevention (CDC) and
other health organizations around the world.
Whirlpool has a proud history of providing our employees with comprehensive and competitive
benefits packages and we continue to invest in our employees' health and well being. In 2021, we
conducted a benefits survey to more closely tailor our offerings to the needs of our employees.
Winning Culture
Our culture is underpinned by our enduring values, which have long been pillared by inclusion and
diversity. Whirlpool has a history of prioritizing issues such as gender and racial equality among our
people. For the past 19 years, Whirlpool Corporation has achieved a perfect 100 on the Corporate
Equality Index, marking nearly two decades of commitment to inclusion in the workplace. This broad
organizational commitment was again demonstrated in 2021 with extensive participation in our
third annual global inclusion week. Additionally, Whirlpool’s employee resource groups (ERGs)
continue to raise awareness for an inclusive culture, representing eight under-represented groups in
North America; two in our Europe, Middle East, Africa region; four in the Latin America region; and
one in Asia.
In 2021, we progressed in our Pledge to Equality and Fairness for our Black Colleagues in the United
States, which we established in 2020. At its core, the pledge is a zero tolerance policy for racial
marginalization within the Company and the communities in which we operate. The pledge is a
multi-year action plan, comprising 16 work streams, each led by a senior leader, and overseen by a
steering committee of Executive Committee members. We also are launching robust Unconscious
Bias and Empathy training for all people leaders and broke ground on the building of a multi-family
housing development in the city of Benton Harbor, Michigan, as part of our housing commitment to
attract diverse occupants as residents of the community. While our actions focus on our “four walls”
and our local communities, we hope that these actions will have a ripple effect on society at large. In
2020, we announced that our Chairman and CEO Marc Bitzer is a founding member of OneTen, a
coalition of leading executives with the mission to train, hire and advance one million Black
Americans over the next 10 years into family-sustaining jobs with opportunities for advancement.
For additional information, please see Whirlpool’s website, and forthcoming 2022 Proxy Statement
and 2021 Sustainability Report, which we expect to release in early March 2022. The contents of our
Sustainability Report and the Company's website are not incorporated by reference into this Annual
Report on Form 10-K or in any other report or document we file with the SEC.
Other Information
For information about the challenges and risks associated with our foreign operations, see "Risk
Factors" under Item 1A.
Whirlpool is a major supplier of laundry, refrigeration, cooking and dishwasher home appliances to
Lowe's, a North American retailer. Net sales attributable to Lowe's in 2021, 2020 and 2019, were
approximately 13% of our consolidated net sales for each of the three years. Lowe's also
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represented approximately 21% and 14% of our consolidated accounts receivable as of December
31, 2021 and 2020, respectively. See Note 16 to the Consolidated Financial Statements.
For information on our global restructuring plans, and the impact of these plans on our operating
segments, see Note 14 to the Consolidated Financial Statements.
Information About Our Executive Officers
The following table sets forth the names and ages of our executive officers on February 10, 2022, the
positions and offices they held on that date, and the year they first became executive officers:
Name
Marc R. Bitzer
Office
Chairman of the Board and Chief Executive Officer
James W. Peters
Executive Vice President and Chief Financial Officer
Joseph T. Liotine
President and Chief Operating Officer
João C. Brega
Carl E. Winn Everhart
Gilles Morel
Shengpo (Samuel) Wu
Executive Vice President and President, Whirlpool
Latin America
Executive Vice President and President, Whirlpool
North America
Executive Vice President and President, Whirlpool
Europe, Middle East & Africa
Executive Vice President and President, Whirlpool
Asia
First Became
an Executive
Officer
2006
Age
57
2016
2014
2012
2021
2019
2019
52
49
58
44
56
55
The executive officers named above were elected by our Board of Directors to serve in the office
indicated until the first meeting of the Board of Directors following the annual meeting of
stockholders in 2022 and until a successor is chosen and qualified or until the executive officer's
earlier resignation or removal. Each of our executive officers has held the position set forth in the
table above or has served Whirlpool in various executive or administrative capacities for at least the
past five years, except for Mr. Morel and Mr. Everhart. Prior to joining Whirlpool in April 2019, Mr.
Morel served for two years as CEO of Northern and Central Europe for Groupe Savencia. Prior to
that, he worked for 27 years at Mars Inc. in various leadership positions, most recently as Regional
President, Europe & Eurasia for Mars Chocolate. Prior to joining Whirlpool in October 2020, Mr.
Everhart served The Coca-Cola Company in various leadership roles, most recently as the President
and General Manager of Coca-Cola Philippines.
Available Information
Financial results and investor information (including Whirlpool's Form 10-K, 10-Q, and 8-K reports)
are accessible at Whirlpool's investor website: investors.whirlpoolcorp.com. Copies of our Form 10-
K, 10-Q, and 8-K reports and amendments, if any, are available free of charge through our website
on the same day they are filed with, or furnished to, the Securities and Exchange Commission.
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 website 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 website is not
incorporated by reference into, and is not a part of, this document.
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ITEM 1A. RISK FACTORS
This report contains statements referring to Whirlpool that are not historical facts and are
considered "forward-looking statements" within the meaning of the Private Securities Litigation
Reform Act of 1995. These statements, which are intended to take advantage of the "safe harbor"
provisions of the Private Securities Litigation Reform Act of 1995, are based on current projections
about operations, industry conditions, financial condition and liquidity. Words that identify forward-
looking statements include words such as "may," "could," "will," "should," "possible," "plan,"
"predict," "forecast," "potential," "anticipate," "estimate," "expect," "project," "intend," "believe," "may
impact," "on track," “guarantee”, “seek” and the negative of these words and words and terms of
similar substance used in connection with any discussion of future operating or financial
performance, an acquisition or merger, or our businesses. In addition, any statements that refer to
expectations, projections, or other characterizations of future events or circumstances, including any
underlying assumptions, are forward-looking statements. Those statements are not guarantees and
are subject to risks, uncertainties, and assumptions that are difficult to predict. Therefore, actual
results could differ materially and adversely from these forward-looking statements.
We have listed below what we believe to be the most significant pandemic-related, strategic,
operational, financial, legal and compliance, and general risks relating to our business.
COVID-19 PANDEMIC RISKS
Our financial condition and results of operations have been impacted and may in the future
be adversely affected by the ongoing COVID-19 outbreak.
We continue to closely monitor the impact of the global COVID-19 pandemic on all aspects of our
operations and regions, including its effect on our consumers, operations, employees, trade
customers, suppliers and distribution channels. In 2020 and 2021, the pandemic created
significant business disruption and economic uncertainty which adversely
impacted our
manufacturing operations, supply chain, and distribution channels. While the immediate impacts
of the COVID-19 pandemic have been assessed, the long-term magnitude and duration of the
disruption, including supply chain disruption, and resulting impact in global business activity
remains uncertain. Many factors that have impacted us and others that may impact us in the
future, such as timing and availability of effective treatments and vaccines, as well as vaccination
rates among the population in the United States and many of the countries in which we operate,
are out of our control. The adverse impact of the pandemic is expected to continue and may
materially affect our financial statements in future periods.
The impacts of the pandemic include, but are not limited to, the following:
•
Production shutdowns and slowdowns because of COVID as well as COVID-related
government orders and supply or labor shortages, in individual or collective groups of
factories in impacted countries, which have and could in the future result in increased costs
and decreased efficiency, and which have and could impact our ability to respond to rapid
changes in demand;
• Uncertainty regarding production facility operational speed and production capacity;
•
•
•
Lack of availability of component materials in our supply chain and an increase in raw
material and component costs;
Recent and potential future reductions in trade customer sales volume, potential trade
customer financial restructuring or insolvency, and increases in accounts receivable balances
with our trade customer base;
Potential future impairment in value of certain tangible or intangible assets could be
recorded as a result of weaker economic conditions;
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•
•
Significant disruption of global financial markets, which could have a negative impact on our
ability to access capital in the future, and which, together with operational impacts noted
above, necessitated certain liquidity creation and preservation actions as a precautionary
measure at the outset of the pandemic;
Fluctuations in forecasted earnings before tax and corresponding volatility in our effective
tax rate;
• Uncertainty with respect to the application of economic stimulus legislation in the U.S. and
abroad, including uncertainty regarding impacts to our current global tax positions and
future tax planning;
• Operational risk, including but not limited to data privacy and cybersecurity incidents, as a
result of salaried workforce extended remote work arrangements, uncertainty regarding
return-to-office timing and duration at various administrative facilities around the world, and
operational delays as a result of salaried employee furlough and collective vacation actions
in certain countries, and restrictions on employee travel;
• Operational disruption if key employees terminate their employment or become ill, as well
as diversion of our management team's attention from non-COVID-19 related matters;
•
•
Potential investigations, legal claims or litigation against us for actions we have taken or may
take, or decisions we have made or may make, as a consequence of the pandemic; and
Potential delays in resolving pending legal matters as a result of court, administrative and
other closures and delays in many of our regions.
We have not yet determined with certainty the extent to which our existing insurance will respond
to these impacts. In addition, we cannot predict the impact that COVID-19 will have on our trade
customers, suppliers, consumers, and each of their financial conditions; however, any material
effect on these parties could adversely impact us. The impact of COVID-19 may also exacerbate
other risks discussed in Item 1A. Risk Factors in this Annual Report on Form 10-K, any of which
could have a material adverse effect on our financial statements.
STRATEGIC RISKS
We face intense competition in the major home appliance industry and failure to
successfully compete could negatively affect our business and financial performance.
Each of our operating segments operates in a highly competitive business environment and faces
intense competition from a significant number of competitors, many of which have strong
consumer brand equity. Several of these competitors, such as those set forth in the Business
section of this annual report, are large, well-established companies, ranking among the Global
Fortune 150. We also face competition that may be able to quickly adapt to changing consumer
preferences, particularly in the connected appliance space, or may be able to adapt more quickly
to changes brought about by the global pandemic, supply chain constraints, or other factors.
Moreover, our customer base includes large, sophisticated trade customers who have many
choices and demand competitive products, services and prices, and which have and may in the
future merge, consolidate, form alliances or further increase their relative purchasing scale.
Competition in the global appliance industry is based on a number of factors including selling
price, product features and design, consumer taste, performance, innovation, reputation, energy
efficiency, service, quality, cost, distribution, and financial incentives, such as promotional funds,
sales incentives, volume rebates and terms. Many of our competitors are increasingly expanding
beyond their existing manufacturing footprints. Our competitors, especially global competitors
with low-cost sources of supply, vertically integrated business models and/or highly protected
home countries outside the United States, have aggressively priced their products and/or
introduced new products to increase market share and expand into new geographies. Many of our
competitors have established and may expand their presence in the rapidly changing retail
environment, including the shifting of consumer purchasing practices towards e-commerce and
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other channels, and the increasing global prevalence of direct-to-consumer sales models. In
addition, technological innovation is a significant competitive factor for our products, as
consumers continually look for new product features that save time, effort and natural resources.
If we are unable to successfully compete in this highly competitive environment, our business and
financial performance could be negatively affected.
The loss of, or substantial decline in, volume of sales to any of our key trade customers,
major buying groups, and/or builders could adversely affect our financial performance.
We sell to a sophisticated customer base of large trade customers, including large domestic and
international trade customers, that have significant leverage as buyers over their suppliers. Most
of our products are not sold through long-term contracts, allowing trade customers to change
volume among suppliers like us. As the trade customers continue to become larger through
merger, consolidation or organic growth, they may seek and have sought to use their position to
improve their profitability by various means, including improved efficiency, lower pricing, and
increased promotional programs. If we are unable to meet their demand requirements, our
volume growth and financial results could be negatively affected. We also continue to pursue
direct-to-consumer sales globally, including the launch of direct-to-consumer sales on most of our
brand websites in recent years, which may impact our relationships with existing trade customers.
The loss or substantial decline in volume of sales to our key trade customers, major buying
groups, builders, or any other trade customers to which we sell a significant amount of products,
could adversely affect our financial performance. Additionally, the loss of market share or financial
difficulties, including bankruptcy and financial restructuring, by these trade customers could have
a material adverse effect on our financial statements.
Failure to maintain our reputation and brand image could negatively impact our business.
Our brands have worldwide recognition, and our success depends on our ability to maintain and
enhance our brand image and reputation. Maintaining, promoting and growing our brands
depends on our marketing efforts, including advertising and consumer campaigns, as well as
product innovation. We could be adversely impacted if we fail to achieve any of these objectives or
if, whether or not justified, the reputation or image of our company or any of our brands is
tarnished or receives negative publicity. In addition, adverse publicity about regulatory or legal
action against us, product safety, data privacy breaches or quality issues, or negative association
with any one brand could damage our reputation and brand image, undermine our customers'
confidence in us and reduce long-term demand for our products, even if the regulatory or legal
action is unfounded or not material to our operations.
In addition, our success in maintaining, extending and expanding our brand image depends on
our ability to adapt to a rapidly changing media environment, including an ever-increasing reliance
on social media and online dissemination of advertising campaigns. Inaccurate or negative posts
or comments about us on social networking and other websites that spread rapidly through such
forums could seriously damage our reputation and brand image. If we do not maintain, extend
and expand our brand image, then our financial statements could be materially adversely affected.
An inability to effectively execute and manage our business objectives and global operating
platform initiative could adversely affect our financial performance.
The highly competitive nature of our industry requires that we effectively execute and manage our
business objectives including our global operating platform initiative. Our global operating
platform initiative aims to reduce costs, expand margins, drive productivity and quality
improvements, accelerate our rate of innovation, generate free cash flow and drive shareholder
value. An inability to effectively control costs and drive productivity improvements could affect our
profitability. In addition, an inability to provide high-quality, innovative products could adversely
affect our ability to maintain or increase our sales, which could negatively affect our revenues and
overall financial performance.
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Our ability to understand consumers’ preferences and to timely identify, develop,
manufacture, market, and sell products that meet customer demand could significantly
affect our business.
Our success is dependent on anticipating and appropriately reacting to changes in consumer
preferences, including the shifting of consumer purchasing practices towards e-commerce, direct-
to-consumer and other channels, and on successful new product development, including in the
connected appliance space and the digital space (e.g. our Yummly recipe app), and process
development and product relaunches in response to such changes. Our future results and our
ability to maintain or improve our competitive position will depend on our capacity to gauge the
direction of our key product categories and geographic regions and upon our ability to
successfully and timely identify, develop, manufacture, market, and sell new or improved products
in these changing environments.
Our intellectual property rights are valuable, and any inability to protect them could reduce
the value of our products, services and brands.
We consider our intellectual property rights, including patents, trademarks, copyrights and trade
secrets, and the licenses we hold, to be a significant and valuable aspect of our business. We
attempt to protect our intellectual property rights through a combination of patent, trademark,
copyright and trade secret laws, as well as licensing agreements and third-party nondisclosure and
assignment agreements, as well as agreements and policies with our employees and other parties.
Our failure to obtain protection for or adequately protect our trademarks, products, new features
of our products, or our processes may diminish our competitiveness.
We have applied for intellectual property protection in the United States and other jurisdictions
with respect to certain innovations and new products, design patents, product features, and
processes. We cannot be assured that the U.S. Patent and Trademark Office or any similar
authority in other jurisdictions will approve any of our patent applications. Additionally, the
patents we own could be challenged or invalidated, others could design around our patents or the
patents may not be of sufficient scope or strength to provide us with any meaningful protection or
commercial advantage. Further, the laws of certain foreign countries in which we do business, or
contemplate doing business in the future, do not recognize intellectual property rights or protect
them to the same extent as United States law. These factors could weaken our competitive
advantage with respect to our products, services, and brands in foreign jurisdictions, which could
adversely affect our financial performance.
Moreover, while we do not believe that any of our products infringe on enforceable intellectual
property rights of third parties, others have in the past and may in the future assert intellectual
property rights that cover some of our technology, brands, products, or services. Any litigation
regarding patents or other intellectual property could be costly and time-consuming and could
divert the attention of our management and key personnel from our business operations. Claims
of intellectual property infringement might also require us to enter into costly license agreements
or modify our products or services. We also may be subject to significant damages, injunctions
against the development and sale of certain products or services, or limited in the use of our
brands.
OPERATIONAL RISKS
We face risks associated with our divestitures, acquisitions, other investments and joint
ventures.
From time to time, we make strategic divestitures, acquisitions, investments and participate in
joint ventures. For example, in 2021, we divested our majority interest in Whirlpool China (formerly
Hefei Sanyo) and sold our manufacturing entity in Turkey, and in 2019 we sold our Embraco
compressor business. In addition, we acquired Indesit in 2014. These transactions, and other
transactions that we have entered into or which we may enter into in the future, can involve
significant challenges and risks, including that the transaction does not advance our business
strategy or fails to produce a satisfactory return on our investment. We have encountered and
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may encounter difficulties in integrating acquisitions with our operations, undertaking post-
acquisition restructuring activities, applying our internal control processes to these acquisitions,
managing strategic investments, and in overseeing the operations, systems and controls of
acquired companies. Integrating acquisitions and carving out divestitures is often costly and may
require significant attention from management. There might also be differing or inadequate
cybersecurity and data protection controls, which could impact our exposure to data security
incidents and potentially increase anticipated costs or time to integrate the business. Furthermore,
we may not realize the degree, or timing, of benefits we anticipate when we first enter into a
transaction. While our evaluation of any potential transaction includes business, legal and financial
due diligence with the goal of identifying and evaluating the material risks involved, our due
diligence reviews may not identify all of the issues necessary to accurately estimate the cost and
potential loss contingencies of a particular transaction, including potential exposure to regulatory
sanctions resulting from an acquisition target's previous activities, costs associated with any
quality issues with an acquisition target's legacy products or difficulties and costs associated with
obtaining necessary regulatory approvals. In addition, certain liabilities may be retained by
Whirlpool when closing a facility, divesting an entity or selling physical assets, and such liabilities
may be material. For example, we agreed to retain certain liabilities relating to Embraco antitrust,
tax, environmental, labor and products in connection with the Embraco sale. In addition, the
current and proposed changes to the U.S. and foreign regulatory approval process and
requirements in connection with an acquisition may cause approvals to take longer than
anticipated to obtain, not be forthcoming or contain burdensome conditions, which may
jeopardize, delay or reduce the anticipated benefits of the transaction to us and could impede the
execution of our business strategy.
We face risks associated with our presence in emerging markets.
Our growth plans include efforts to increase revenue from emerging markets, including through
acquisitions. Local business practices in these countries may not comply with U.S. laws, local laws
or other laws applicable to us or our compliance policies, and non-compliant practices may result
in increased liability risks. For example, we may incur unanticipated costs, expenses or other
liabilities as a result of an acquisition target's violation of applicable laws, such as the U.S. Foreign
Corrupt Practices Act (FCPA) or similar worldwide anti-bribery laws in non-U.S. jurisdictions. We
may incur unanticipated costs or expenses, including post-closing asset impairment charges,
expenses associated with eliminating duplicate facilities, litigation, and other liabilities. For
example, we incurred significant impairment and restructuring expenses in the years following our
acquisition of Indesit in 2014. In addition, our recent and future acquisitions may increase our
exposure to other risks associated with operating internationally, including foreign currency
exchange rate fluctuations; political, legal and economic instability; inflation; changes in tax rates
and tax laws; and work stoppages and labor relations, in addition to other risks described below
under "Risks associated with unanticipated social, political and/or economic events may materially
and adversely impact our business."
Risks associated with our international operations may decrease our revenues and increase
our costs.
For the year ended December 31, 2021, sales outside our North America region represented
approximately 43% of our net sales. We expect that international sales will continue to account for
a significant percentage of our net sales. Accordingly, we face numerous risks associated with
international operations, any of which could negatively affect our financial
conducting
performance. These risks include the following:
•
•
•
COVID-19-related shutdowns, the timing, availability and effectiveness of treatments and
vaccines, and other pandemic-related uncertainties in the countries in which we operate;
Political, legal, and economic instability and uncertainty;
Foreign currency exchange rate fluctuations;
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•
•
•
•
•
•
Changes in foreign tax rules, regulations and other requirements, such as changes in tax
rates and statutory and judicial interpretations of tax laws;
Changes in diplomatic and trade relationships, including sanctions resulting from the current
political situation in countries in which we do business;
Inflation and/or deflation;
Changes in foreign country regulatory requirements, including data privacy laws;
Various import/export restrictions and disruptions and the availability of required import/
export licenses;
Imposition of tariffs and other trade barriers;
• Managing widespread operations and enforcing internal policies and procedures such as
compliance with U.S. and foreign anti-bribery, anti-corruption regulations and anti-money
laundering, such as the FCPA, and antitrust laws;
•
Labor disputes and work stoppages at our operations and suppliers;
• Government price controls;
•
•
Trade customer insolvency and the inability to collect accounts receivable; and
Limitations on the repatriation or movement of earnings and cash
As a U.S. corporation, we are subject to the FCPA, which may place us at a competitive
disadvantage to foreign companies that are not subject to similar regulations. Additionally, any
determination that we have violated the FCPA or other anti-corruption laws could have a material
adverse effect on us.
Risks associated with unanticipated social, political and/or economic events may materially
and adversely impact our business.
Terrorist attacks, cyber events, armed conflicts, civil unrest, espionage, natural disasters,
governmental actions, epidemics and pandemics (including the impacts of COVID-19 discussed
elsewhere in Risk Factors) have and could affect our domestic and international sales, disrupt our
supply chain, and impair our ability to produce and deliver our products. Many of such events
have impacted and could directly impact our physical facilities or those of our suppliers or
customers.
We have been and may be subject to information technology system failures, network
disruptions, cybersecurity attacks and breaches in data security, which may materially
adversely affect our operations, financial condition and operating results.
We depend on information technology to improve the effectiveness of our operations, to interface
with our customers, consumers and employees, to maintain the continuity of our manufacturing
operations, and to maintain financial accuracy and efficiency. In addition, we collect, store, and
process confidential or sensitive data, including proprietary business information, personal data or
other information that is subject to privacy and security laws, regulations and/or customer-
imposed controls. Our business processes and data sharing across suppliers and vendors is
dependent on technology system availability. Our systems may depend, directly or indirectly, on
software developed by third parties (such as open source libraries or vendor software) and we
may have limited visibility into the robustness of the security practices followed during design,
development, or remediation of this third party software. The failure of any such systems, whether
internal or third-party, could disrupt our operations by causing transaction errors, processing
inefficiencies, delays or cancellation of customer orders, the loss of customers, impediments to
the manufacture or shipment of products, other financial and business disruptions, employee
relations issues, the loss of or damage to intellectual property and the unauthorized disclosure or
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compromise of personally identifiable data of consumers and employees or of commercially
sensitive information.
In addition, we have outsourced certain technology services and administrative functions to third-
party service providers and may outsource additional functions in the future. If these service
providers do not perform effectively or experience failures, we may experience similar issues
depending on the function involved. In addition, we may not achieve expected cost savings of
outsourcing and may incur additional costs to correct errors made by such service providers.
Our information systems, or those of our third-party service providers, have been in the past and
could be in the future impacted by malicious activity of threat actors intent on extracting or
corrupting information or disrupting business processes, or by unintentional data-compromising
activities by our employees or service providers.
Such unauthorized access has in the past and could in the future disrupt our business and result
in the loss of assets. Cyber attacks are becoming more sophisticated and include ransomware
attacks, attempts to gain unauthorized access to data, social engineering and other security
breaches that have in the past and could in the future lead to disruptions in availability of critical
systems, unauthorized release of confidential or otherwise protected information, and corruption
of data. Our growth in the areas of direct-to-consumer sales and connected appliances (the
"Internet of Things"), accompanied by increasing handling of consumer information, and our
reliance on pandemic-driven remote work arrangements, has increased these risks. These events
have in the past and could in the future impact our customers, consumers, employees, third-
parties and reputation and lead to financial losses from remediation actions, loss of business or
potential litigation or regulatory liability or an increase in expenses. While we have not
experienced any material impacts from a cyber attack, any one or more future cyber attacks could
have a material adverse effect on our financial statements.
Product-related liability or product recall costs could adversely affect our business and
financial performance.
We have been and may be exposed to product-related liabilities, which in some instances may
result in product redesigns, product recalls, or other corrective action. In addition, any claim,
product recall or other corrective action that results in significant adverse publicity, particularly if
those claims or recalls cause customers to question the safety or reliability of our products, may
negatively affect our financial statements. For example, we have undertaken corrective action
initiatives in EMEA related to certain legacy Indesit-designed washer and Indesit-produced dryers.
We maintain product liability insurance, but it may not be adequate to cover losses related to
product liability claims brought against us. Product liability insurance could become more
expensive and difficult to maintain and may not be available on commercially reasonable terms, if
at all. We may be involved in class action litigation or product recalls for which we generally have
not purchased insurance, and may be involved in other litigation or events for which insurance
products may have limitations.
We regularly engage in investigations of potential quality and safety issues as part of our ongoing
effort to deliver quality products to our customers. We are currently investigating certain potential
quality and safety issues globally, and as appropriate, we undertake to effect repair or
replacement of appliances in the event that an investigation leads to the conclusion that such
action is warranted. Actual costs of these and any future issues depend upon several factors,
including the number of consumers who respond to a particular recall, repair and administrative
costs, whether the cost of any corrective action is borne by us or the supplier, and, if borne by us,
whether we will be successful in recovering our costs from the supplier. The actual costs incurred
as a result of these issues and any future issues could have a material adverse effect on our
financial statements.
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The ability of suppliers to deliver parts, components and manufacturing equipment to our
manufacturing facilities, and our ability to manufacture without disruption, could affect
our global business performance.
We use a wide range of materials and components in the global production of our products, which
come from numerous suppliers around the world. Because not all of our business arrangements
provide for guaranteed supply and some key parts may be available only from a single supplier or
a limited group of suppliers, we are subject to supply and pricing risk. In addition, certain
proprietary component parts used in some of our products are provided by single-source
unaffiliated third-party suppliers. We would be unable to obtain these proprietary components for
an indeterminate period of time if these single-source suppliers were to cease or interrupt
production or otherwise fail to supply these components to us, which could adversely affect our
product sales and operating results.
Our operations and those of our suppliers are subject to disruption for a variety of reasons,
including COVID-19-related supplier plant shutdowns or slowdowns, transportation delays, work
stoppages,
intellectual
labor relations, governmental regulatory and enforcement actions,
property claims against suppliers, disputes with suppliers, distributors or transportation providers,
financial issues such as supplier bankruptcy, information technology failures, hazards such as fire,
earthquakes, flooding, or other natural disasters, including due to climate change, and increased
homeland security requirements in the U.S. and other countries. For example, we expect to
continue to be impacted by supply chain issues, due to factors largely beyond our control: a global
shortage of certain components, such as semiconductors, a strain on raw material and input cost
inflation, all of which could escalate in future quarters. These issues have and could delay
importation of products and/or components or require us to locate alternative providers to avoid
disruption to customers. These alternatives have not and in the future may not be available on
short notice and have and in the future could result in higher transit costs, which could have an
adverse impact on our business and financial statements.
Insurance for certain disruptions may not be available, affordable or adequate. The effects of
climate change, including extreme weather events, long-term changes in temperature levels and
water availability may exacerbate these risks. Such disruption has in the past and could in the
future interrupt our ability to manufacture certain products. Any significant disruption could have
a material adverse impact on our financial statements.
Our ability to attract, develop and retain executives and other qualified employees is
crucial to our results of operations and future growth.
We depend upon the continued services and performance of our key executives, senior
management and skilled personnel, particularly professionals with experience in our business,
operations, engineering, technology and the home appliance industry. While we strive to attract,
develop and retain these individuals through execution of our human capital strategy (see “Human
Capital Management” in Item 1), we cannot be sure that any of these individuals will continue to be
employed by us. In the case of talent losses, significant time is required to hire, develop and train
skilled replacement personnel. We must also attract, develop, and retain individuals with the
requisite engineering and technical expertise to develop new technologies and introduce new
products and services, particularly as we increase investment in our digital and “Internet of Things”
capabilities.
Like many other companies, we are subject to fluctuations in the availability of qualified labor in
certain key positions. As an example, in today's labor market, it is challenging to attract and retain
qualified talent for key roles within the company, which could lead to increased wage inflation or
impede our ability to execute certain key strategic initiatives as we respond to this labor shortage.
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A shortage of key employees can jeopardize the Company’s ability to implement its business
objectives, and changes in key executives can result in loss of continuity, loss of accumulated
knowledge, departures of other key employees, disruptions to our operations and inefficiency
during transition periods. In addition, if we are unable to enforce certain non-compete covenants
and confidentiality provisions when key employees leave for a competitor, we may lose a
competitive advantage arising from confidential and proprietary company information known to
such former employees. An inability to hire, develop, transfer retained knowledge, engage and
retain a sufficient number of qualified employees could materially hinder our business by, for
example, delaying our ability to bring new products and services to market or impairing the
success of our operations.
A deterioration in labor relations could adversely impact our global business.
As of December 31, 2021, we had approximately 69,000 employees. We are subject to separate
collective bargaining agreements with certain labor unions, as well as various other commitments
regarding our workforce. We periodically negotiate with certain unions representing our
employees and may be subject to work stoppages or may be unable to renew collective bargaining
agreements on the same or similar terms, or at all. In addition, our global restructuring activities
have in the past and may in the future be received negatively by governments and unions and
attract negative media attention, which may delay the implementation of such plans. A
deterioration in labor relations may have a material adverse effect on our financial statements.
FINANCIAL RISKS
Fluctuations and volatility in the cost and availability of raw materials and purchased
components could adversely affect our operating results.
The sources and prices of the primary materials (such as steel, resins, and base metals) used to
manufacture our products and components containing those materials are susceptible to
significant global and regional price fluctuations or availability due to supply and demand trends,
the COVID-19 pandemic, transportation and fuel costs, port and shipping capacity, labor costs or
disputes, government regulations, including increased homeland security requirements, and
tariffs, changes in currency exchange rates, price controls, the economic climate, severe weather,
climate change and other unforeseen circumstances. For example, we experienced raw material
inflation of approximately $1.0 billion in 2021, in addition to many other cost increases throughout
our business. In addition, we engage in contract negotiations and enter into commodity swap
contracts to manage risk associated with certain commodities purchases, and we have in the past
and may in the future experience losses based on commodity price changes. Significant increases
in materials cost and availability and other costs now and in the future could have a material
adverse effect on our financial statements. As an example, in recent years the company has
experienced and expects to continue to experience significant levels of commodity, logistics and
wage inflation across our businesses. We have responded to these inflationary factors with strong
cost reduction initiatives and cost-based price increases. An inability to respond to inflationary
pressures effectively could have a material adverse effect on our financial statements.
Foreign currency fluctuations may affect our financial performance.
We generate a significant portion of our revenue and incur a significant portion of our expenses in
foreign currencies. Changes in the exchange rates of functional currencies of those operations
affect the U.S. dollar value of our revenue and earnings from our foreign operations. We use
currency forwards, net investment hedges, and options to manage our foreign currency
transaction exposures. We cannot completely eliminate our exposure to foreign currency
fluctuations, which may adversely affect our financial performance. In addition, because our
consolidated financial results are reported in U.S. dollars, as we generate sales or earnings in
other currencies, the translation of those results into U.S. dollars can result in a significant
increase or decrease in the amount of those sales or earnings. Finally, the amount of legal
contingencies related to foreign operations may fluctuate significantly based upon changes in
exchange rates and usually cannot be managed with currency forwards, options or other
arrangements. Such fluctuations in exchange rates can significantly increase or decrease the
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amount of any legal contingency related to our foreign operations and make it difficult to assess
and manage the potential exposure.
Goodwill and indefinite-lived intangible asset impairment charges have in the past and may
in the future adversely affect our operating results.
We have a substantial amount of goodwill and indefinite-lived intangible assets, primarily
trademarks, on our balance sheet. We test the goodwill and intangible assets for impairment on
an annual basis and when events occur or circumstances change that indicate that the fair value of
the reporting unit or intangible asset may be below its carrying amount. Fair value determinations
require considerable judgment and are sensitive to inherent uncertainties and changes in
estimates and assumptions regarding revenue growth rates, EBIT margins, capital expenditures,
working capital requirements, tax rates, terminal growth rates, discount rates, royalty rates,
benefits associated with a taxable transaction and synergies available to market participants.
Declines in market conditions, a trend of weaker than anticipated financial performance for our
reporting units or declines in projected revenue for our trademarks, a decline in our share price
for a sustained period of time, an increase in the market-based weighted average cost of capital or
a decrease in royalty rates, among other factors, are indicators that the carrying value of our
goodwill or indefinite-life intangible assets may not be recoverable. We did not record any
impairment charges for the year ended December 31, 2021. We recorded an immaterial
impairment charge related to other intangibles for the year ended December 31, 2020 related to
the EMEA reporting unit. We may in the future be required to record a goodwill or intangible asset
impairment charge that, if incurred, could have a material adverse effect on our financial
statements.
Impairment of long-lived assets may adversely affect our operating results.
Our long-lived asset groups are subject to an impairment assessment when certain triggering
events or circumstances indicate that their carrying value may be impaired. If the carrying value
exceeds our estimate of future undiscounted cash flows of the operations related to the asset
group, an impairment is recorded for the difference between the carrying amount and the fair
value of the asset group. The results of these tests for potential impairment may be adversely
affected by unfavorable market conditions, our financial performance trends, or an increase in
interest rates, among other factors. If as a result of the impairment test we determine that the fair
value of any of our long-lived asset groups is less than its carrying amount, we may incur an
impairment charge that could have a material adverse effect on our financial statements.
We face inventory valuation risk.
We write down product and component inventories that have become obsolete or do not meet
anticipated demand or net realizable value. No assurance can be given that, given the
unpredictable pace of product obsolescence and business conditions with trade customers and in
general, we will not incur additional inventory related charges. Such charges could negatively
affect our financial statements.
Significant differences between actual results and estimates of the amount of future
funding for our pension plans and postretirement health care benefit programs, and
significant changes in funding assumptions or significant increases in funding obligations
due to regulatory changes, could adversely affect our financial results.
We have both funded and unfunded defined benefit pension plans that cover certain employees
around the world. We also have unfunded postretirement health care benefit plans for eligible
retired employees. The Employee Retirement Income Security Act of 1974 (ERISA) and the Internal
Revenue Code, as amended, govern the funding obligations for our U.S. pension plans, which are
our principal pension plans. Our U.S. defined benefit plans were frozen on or before December 31,
2006 for substantially all participants. Since 2007, U.S. employees have been eligible for an
enhanced employer contribution under Whirlpool's defined contribution (401(k)) plan.
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As of December 31, 2021, our projected benefit obligations under our pension plans and
postretirement health and welfare benefit programs exceeded the fair value of plan assets by an
aggregate of approximately $0.5 billion, including $0.3 billion of which was attributable to pension
plans and $0.2 billion of which was attributable to postretirement health care benefits. Estimates
for the amount and timing of the future funding obligations of these pension plans and
postretirement health and welfare benefit plans are based on various assumptions, including
discount rates, expected long-term rate of return on plan assets, life expectancies and health care
cost trend rates. These assumptions are subject to change based on changes in interest rates on
high quality bonds, stock and bond market returns, health care cost trend rates and regulatory
changes, all of which are largely outside our control. Significant differences in results or significant
changes in assumptions may materially affect our postretirement obligations and related future
contributions and expenses.
LEGAL & COMPLIANCE RISKS
Unfavorable results of legal and regulatory proceedings could materially adversely affect
our business and financial condition and performance.
We are or may in the future become subject to a variety of litigation and legal compliance risks
relating to, among other things: products; intellectual property rights; income and indirect taxes;
environmental matters (including matters related to climate change); corporate matters;
commercial matters; credit matters; competition laws; distribution, marketing and trade practice
matters; customs and duties; occupational health and safety (including matters related to the
COVID-19 pandemic), industrial accidents, anti–bribery and anti–corruption regulations; energy
regulations; data privacy regulations; financial and securities regulations; and employment and
benefit matters. For example, we are currently disputing certain income and indirect tax related
assessments issued by the Brazilian authorities (see Note 8 and Note 15); we are disputing a
proposed IRS income tax assessment in the United States Sixth Circuit Court of Appeals (see Note
15); and we are disputing certain income and indirect tax assessments in various legal proceedings
in Italy, India and other jurisdictions globally. Unfavorable outcomes regarding these assessments
could have a material adverse effect on our financial statements in any particular reporting period.
Results of legal and regulatory proceedings cannot be predicted with certainty and for some
matters, such as class actions, no insurance is cost-effectively available. Regardless of merit, legal
and regulatory proceedings may be both time-consuming and disruptive to our operations and
could divert the attention of our management and key personnel from our business operations.
Such proceedings could also generate significant adverse publicity and have a negative impact on
our reputation and brand image, regardless of the existence or amount of liability. We estimate
loss contingencies and establish accruals as required by generally accepted accounting principles,
based on our assessment of contingencies where liability is deemed probable and reasonably
estimable, in light of the facts and circumstances known to us at a particular point in time.
Subsequent developments in legal proceedings, volatility in foreign currency exchange rates and
other factors may affect our assessment and estimates of the loss contingency recorded and could
result in an adverse effect on our results of operations in the period in which a liability would be
recognized or cash flows for the period in which amounts would be paid. Actual results may
significantly vary from our reserves. We may experience additional delays in resolving these
matters as a result of COVID-19-related administrative and judicial system temporary delays.
We are subject to, and could be further subject to, governmental investigations or actions
by other third parties.
We are subject to various federal, foreign and state laws, including antitrust and product-related
laws and regulations, violations of which can involve civil or criminal sanctions. Responding to
governmental investigations or other actions may be both time-consuming and disruptive to our
operations and could divert the attention of our management and key personnel from our
business operations. For example, the second part of a French Competition Authority
investigation, which is expected to focus primarily on manufacturer interactions with retailers, is
ongoing. The impact of these and other investigations and lawsuits could have a material adverse
effect on our financial statements.
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Changes in the legal and regulatory environment, including data privacy and protection,
and changes in taxes and tariffs, could limit our business activities, increase our operating
costs, reduce demand for our products or result in litigation or regulatory action.
The conduct of our businesses, and the production, distribution, sale, advertising, labeling, safety,
transportation and use of many of our products, are subject to various laws and regulations
administered by federal, state and local governmental agencies in the United States, as well as to
foreign laws and regulations administered by government entities and agencies in countries in
which we operate. In addition, we operate in an environment in which there are different and
potentially conflicting data privacy and data protection laws in effect in the various U.S. states and
foreign jurisdictions in which we operate and we must understand and comply with each law and
standard in each of these jurisdictions. For example, the European Union’s General Data
Protection Regulation, which became effective in May 2018, the Brazilian General Data Protection
Law, which came into effect in September 2020 and various other privacy and data protection laws
that have been passed or are pending in other countries collectively impose or will impose new
regulatory data privacy and protection standards for which we must comply. Some of the laws
allow for significant fines, reaching several percentage points of global corporate revenues or
more. These laws and regulations may change, sometimes dramatically, as a result of political,
economic or social events. Changes in laws, regulations or governmental policy and the related
interpretations may alter the environment in which we do business and may impact our results or
increase our costs or liabilities. Additionally, we could be subjected to future liabilities, fines or
penalties or the suspension of product production for failing to comply, or being alleged as failing
to comply, with various laws and regulations, including environmental regulations.
Additionally, as a global company based in the United States, we are exposed to the impact of U.S.
and global tax changes, especially those that affect the effective corporate income tax rate. In
addition, the current domestic and international political environment, including government
shutdowns and changes to U.S. policies related to global trade and tariffs, has resulted in
uncertainty surrounding the future state of the global economy. Many of our most significant
competitors are global companies, and in an escalating global trade conflict or the imposition of
tariffs, their respective governments may
impose regulations that are favorable to our
competitors. The U.S. federal government may propose additional changes to international trade
agreements, tariffs, taxes, and other government rules and regulations. These regulatory changes
could significantly impact our business and financial performance. For additional information
about our consolidated tax provision, see Note 15 to the Consolidated Financial Statements, and
for additional information about global trade and tariffs, please see "Other Matters" in the
Management's Discussion and Analysis section of this Annual Report on Form 10-K.
The impact of climate change and climate change or other environmental regulation may
adversely impact our business.
The effects of climate change could have an impact on our business and cause us to incur capital
and other expenditures to comply with various laws and regulations, especially relating to the
protection of the environment, human health and safety, and water and energy efficiency. Climate
change regulations at the federal, state or local level, or in international jurisdictions could require
us to limit emissions, change our manufacturing processes or product offerings, or undertake
other costly activities. We are also subject to global regulations related to chemical substances and
materials in our products (such as the U.S. Toxic Substances Control Act), which may require us to
modify the materials used in our products or undertake activities which may have a cost impact.
There is also increased focus by governmental and non-governmental entities on sustainability
matters. In addition, a number of governmental bodies have finalized, proposed or are
contemplating additional legislative and regulatory changes in response to the potential effects of
climate change. In particular, cleanup obligations that might arise at any of our manufacturing
sites or the imposition of more stringent environmental laws in the future could adversely affect
our business.
We have set rigorous science-based targets for greenhouse gas reductions and related
sustainability goals, including a "net-zero" emissions target in our plants and operations that was
25
announced in 2021. Any failure to achieve our sustainability goals or reduce our impact on the
environment, any changes in the scientific or governmental metrics utilized to objectively measure
success, or the perception that we have failed to act responsibly regarding climate change could
result in negative publicity and adversely affect our business and reputation.
GENERAL RISKS
We are exposed to risks associated with the uncertain global economy.
The current domestic and international political and economic environment are posing challenges
to the industry in which we operate. A number of economic factors, including the impact of the
COVID-19 pandemic, gross domestic product, availability of consumer credit, interest rates,
consumer sentiment and debt levels, retail trends, housing starts, sales of existing homes, the
level of mortgage refinancing and defaults, fiscal and credit market uncertainty, and foreign
currency exchange rates, currency controls, inflation and deflation, generally affect demand for
our products in the U.S. and other countries which we operate.
Economic uncertainty and related factors exacerbate negative trends in business and consumer
spending and has caused and may cause certain customers to push out, cancel, or refrain from
placing orders for our products. Uncertain market conditions, difficulties in obtaining capital, or
reduced profitability has caused and may cause some customers to scale back operations, exit
markets, merge with other retailers, or file for bankruptcy protection and potentially cease
operations, which can also result in lower sales and/or additional inventory. These conditions have
affected and may similarly affect key suppliers, which could impair their ability to deliver parts and
result in delays for our products or added costs.
A decline in economic activity and conditions in certain areas in which we operate have had an
adverse effect on our financial condition and results of operations in recent years, and future
declines and adverse conditions could have a similar adverse effect. Regional, political and
economic instability in countries in which we do business may adversely affect business
conditions, disrupt our operations, and have an adverse effect on our financial condition and
results of operations. In addition, we expect to continue to be impacted by the global supply chain
issues discussed above under Operational Risks.
Uncertainty about future economic and industry conditions also makes it more challenging for us
to forecast our operating results, make business decisions, and identify and prioritize the risks that
may affect our businesses, sources and uses of cash, financial condition and results of operations.
We may be required to implement additional cost reduction efforts, including restructuring
activities, which may adversely affect our ability to capitalize on opportunities in a market
recovery. In addition, our operations are subject to general credit, liquidity, foreign exchange,
market and interest rate risks. Our ability to access liquidity or borrow to invest in our businesses,
fund strategic acquisitions and refinance maturing debt obligations depends in part on access to
the capital markets.
If we do not timely and appropriately adapt to changes resulting from the uncertain
macroeconomic environment and industry conditions, or to difficulties in the financial markets, or
if we are unable to continue to access the capital markets, our financial statements may be
materially and adversely affected.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
26
ITEM 2.
PROPERTIES
Our principal executive offices are located in Benton Harbor, Michigan. On December 31, 2021, our
principal manufacturing operations were carried on at 33 locations in 10 countries worldwide. We
occupied a total of approximately 71 million square feet devoted to manufacturing, service, sales
and administrative offices, warehouse and distribution space. Over 42 million square feet of such
space was occupied under lease. Whirlpool properties include facilities which are suitable and
adequate for the manufacture and distribution of Whirlpool's products.
The Company's principal manufacturing locations by operating segment were as follows:
Operating Segment
North America
Europe, Middle
East and Africa
Latin America
Manufacturing Locations
11
10
8
Asia
4
ITEM 3.
LEGAL PROCEEDINGS
Information regarding legal proceedings can be found in Note 8 to the Consolidated Financial
Statements and is incorporated herein by reference.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
27
PART IIITEM 5.MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIESWhirlpool's common stock is listed on the New York Stock Exchange and the Chicago Stock Exchange under the ticker symbol WHR. As of February 4, 2022, the number of holders of record of Whirlpool common stock was approximately 8,013.On April 19, 2021, our Board of Directors authorized a share repurchase program of up to $2 billion, which has no expiration date. At December 31, 2021, there were approximately $1.5 billion in remaining funds authorized under this program. For the year ended December 31, 2021, we repurchased 4,765,037 shares at an aggregate purchase price of approximately $1 billion under this program. Share repurchases are made from time to time on the open market as conditions warrant. These programs do not obligate us to repurchase any of our shares and they have no expiration date.The following table summarizes repurchases of Whirlpool's common stock in the three months ended December 31, 2021:Period (Millions of dollars, except number and price per share)Total Number of Shares PurchasedAverage Price Paid per ShareTotal Number of Shares Purchased as Part of Publicly Announced Plans or ProgramsApproximate Dollar Value of Shares that May Yet Be Purchased Under the PlansOctober 1, 2021 through October 31, 2021 187,924 $207.40 187,924 $ 1,851 November 1, 2021 through November 30, 2021 917,537 221.30 917,537 1,648 December 1, 2021 through December 31, 2021 690,521 228.72 690,521 $ 1,490 Total 1,795,982 $222.70 1,795,982 ITEM 6.[RESERVED]None.ITEM 7.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe following Management Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is intended to promote understanding of the results of operations and financial condition of the Company and generally discusses the results of operations for the current year compared to prior two years. MD&A is provided as a supplement to, and should be read in connection with, the Consolidated Financial Statements and Notes to the Consolidated Financial Statements included in this Form 10-K. Certain references to particular information in the Notes to the Consolidated Financial Statements are made to assist readers.28 OVERVIEWWhirlpool delivered record results through strong execution despite the impacts of global supply chain disruptions and inflation, alongside ongoing disruptions from COVID-19. Whirlpool delivered full-year net sales growth of 13% and GAAP net earnings available to Whirlpool of $1.8 billion (net earnings margin of 8.1%), or $28.36 per share, compared to GAAP net earnings available to Whirlpool of $1.1 billion (net earnings margin of 5.6%), or $16.98 per share in the same prior-year period. On a GAAP basis, net earnings margins were driven by price/mix and strong cost takeout actions more than offsetting $1 billion in raw material inflation costs in the period. Cash provided by operating activities of $2.2 billion, compared to $1.5 billion in 2020, was driven by higher earnings.Whirlpool delivered ongoing (non-GAAP) earnings per share of $26.59 and full-year ongoing EBIT margin of 10.8%, compared to $18.46 and 9.0% in the same prior-year period. These results were driven by positive price/mix and cost takeout actions more than offsetting inflation, in particular in raw materials and logistics. In addition, we delivered record adjusted free cash flow(1) (non-GAAP) of $2.0 billion in 2021, compared to $1.2 billion in 2020, primarily driven by strong earnings and disciplined working capital management. Additionally, we strengthened our balance sheet and delivered on our long-term gross debt leverage target 2x, with a 2021 result of 1.8x. Lastly, we returned $1.4 billion in cash to shareholders, including an increase in our dividend and $1 billion of share repurchases. Please see "Non-GAAP Financial Measures" elsewhere in this Management's Discussion and Analysis for a reconciliation of these non-GAAP financial measures.We are very pleased with the agility our organization has demonstrated to deliver record results in any operating environment. This includes the successful execution of our go-to-market initiatives, furthering our digital transformation strategy and dedicated cost management. The strong actions we have taken in our international regions have led to EMEA increasing margins by 200 basis points and returning the Asia region to profitability, in line with our expectations, demonstrating the effectiveness of our strategic actions to date.Lastly, after consistently delivering at or above our Long-term value creations goals we set in 2017, this year we introduced new, increased, long-term value creation goals. Our continued performance and strong consumer demand trends provides us confidence that we will continue to deliver strong shareholder returns in 2022.Long-Term Value Creation GoalsReconciliations to the equivalent GAAP measures -- net sales, net earnings, cash provided by (used in) operating activities, and return on assets -- for the metrics below are not provided as they rely on market factors and other assumptions outside of our control.Long-Term Value Creation Goals(Annual Expectation)Sales (Annual Organic Net Sales Growth Excluding Currency)Ongoing EBIT (Ongoing Earnings Before Interest and Tax, % of Net Sales)FCF (1) (Free Cash Flow as % of Net Sales)ROIC (Return of Invested Capital)Updated5-6%11-12%7-8%15-16%Previous~3%~10%6%+12-14%(1) Throughout 2021 and comparable periods, the Company defines adjusted free cash flow as cash provided by (used in) operating activities less capital expenditures and including proceeds from the sale of assets/businesses, and changes in restricted cash. Going forward, the Company presents free cash flow which is cash provided by (used in) operating activities less capital expenditures.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ANDRESULTS OF OPERATIONS - (CONTINUED)29 RESULTS OF OPERATIONSThe following table summarizes the consolidated results of operations:December 31,Consolidated - In Millions (except per share data) 2021Better/(Worse) % 2020Better/(Worse) % 2019Net sales $ 21,985 13.0%$ 19,456 (4.7)% $ 20,419 Gross margin 4,409 14.8 3,842 9.4 3,511 Selling, general and administrative 2,081 (10.9) 1,877 12.4 2,142 Restructuring costs 38 86.8 288 (53.2) 188 Impairment of goodwill and other intangibles — nm 7 nm — (Gain) loss on sale and disposal of businesses (105) nm (7) nm (437) Interest and sundry (income) expense (159) nm (21) (87.5) (168) Interest expense 175 7.4 189 (1.1) 187 Income tax expense 518 (35.6) 382 (9.8) 348 Net earnings available to Whirlpool 1,783 65.9 1,075 (8.0) 1,168 Diluted net earnings available to Whirlpool per share $ 28.36 67.0%$ 16.98 (6.7)% $ 18.19 nm: not meaningfulConsolidated net sales for 2021 increased 13.0% compared to 2020, primarily driven by the favorable impact of product price/mix. Excluding the impact of foreign currency, net sales for 2021 increased 12.3% compared to 2020. Consolidated net sales for 2020 decreased 4.7% compared to 2019, primarily driven by the divestiture of the Embraco compressor business, lower volumes and unfavorable foreign currency, partially offset by the favorable impact of product price/mix. Organic net sales (net sales excluding foreign currency and Embraco) for 2020 increased 1.1% compared to 2019. For additional information regarding non-GAAP financial measures including organic net sales and net sales excluding the impact of foreign currency, see the Non-GAAP Financial Measures section of this Management's Discussion and Analysis. The chart below summarizes the balance of net sales by operating segment for 2021, 2020 and 2019, respectively.% of Net Sales57%58%56%23%22%21%14%13%16%6%7%7%North AmericaEMEALatin AmericaAsia2021 2020 20190%10%20%30%40%50%60%MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (CONTINUED)30 The consolidated gross margin percentage for 2021 increased to 20.1% compared to 19.7% in 2020, primarily driven by the favorable impact of product price/mix, partially offset by raw material inflation and increased marketing and technology investments. The consolidated gross margin percentage for 2020 increased to 19.7% compared to 17.2% in 2019, primarily driven by the favorable impact of product price/mix, cost reduction initiatives, raw material deflation, and a gain on sale-leaseback, partially offset by unfavorable foreign currency and lower unit volumes.Results of Operating SegmentsOur operating segments are based upon geographical region and are defined as North America, EMEA, Latin America and Asia. These regions also represent our reportable segments. The chief operating decision maker, who is the Company's Chairman and Chief Executive Officer, evaluates performance based on each segment's earnings (loss) before interest and taxes (EBIT), which we define as operating profit less interest and sundry (income) expense and excluding restructuring costs, asset impairment charges and certain other items that management believes are not indicative of the region's ongoing performance, if any. See Note 16 to the Consolidated Financial Statements for additional information.The following is a discussion of results for each of our operating segments. Each of our operating segments has been impacted by COVID-19 in the areas of manufacturing operations such as a decrease in production levels resulting in production level below normal capacity. Excess capacity costs were not material for the twelve months ended December 31, 2021 or 2020. Additionally, operating segments have been impacted by disruptions in supply chains and distribution channels, among other macroeconomic impacts.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ANDRESULTS OF OPERATIONS - (CONTINUED)31 NORTH AMERICANet Sales ($ Millions)12,49111,21011,477202120202019EBIT ($ Millions)2,2201,7581,440202120202019Net Sales SummaryNet sales for 2021 increased 11.4% compared to 2020 primarily driven by the favorable impact of product price/mix. Excluding the impact of foreign currency, net sales increased 10.9% in 2021. Net sales for 2020 decreased 2.3% compared to 2019 primarily due to lower volumes. Excluding the impact of foreign currency, net sales decreased 2.3% in 2020. EBIT SummaryEBIT margin for 2021 was 17.8% compared to 15.7% for 2020. EBIT increased primarily due to the favorable impact of product price/mix, partially offset by the unfavorable impacts of inflation and increased marketing and technology investments. EBIT margin for 2020 was 15.7% compared to 12.5% for 2019. EBIT increased primarily due to the favorable impact of product price/mix, raw material deflation and cost reduction actions, partially offset by the impact of lower volumes.EMEANet Sales ($ Millions)5,0884,3894,296202120202019EBIT ($ Millions)1002(30)202120202019Net Sales SummaryNet sales for 2021 increased 15.9% compared to 2020 primarily due to higher volumes, the favorable impact of product price/mix, and foreign currency. Excluding the impact of foreign currency, net sales increased 12.5% in 2021. Net sales for 2020 increased 2.1% compared to 2019, primarily due to the favorable impact of product price/mix, partially offset by the unfavorable impact of lower volumes. Excluding the impact of foreign currency, net sales increased 1.8% in 2020.EBIT SummaryEBIT margin for 2021 was 2.0% compared to 0.0% for 2020. EBIT increased primarily due to cost productivity, the favorable impacts of product price/mix and higher volumes, partially offset by the unfavorable impacts of raw material inflation. EBIT margin for 2020 was 0.0% compared to (0.7%) for 2019. In 2020, EBIT increased primarily due to the cost reductions driven by fixed cost actions and favorable impact of raw material deflation, partially offset by foreign currency and increased marketing and technology investments. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (CONTINUED)32 LATIN AMERICANet Sales ($ Millions)3,1672,5923,177202120202019EBIT ($ Millions)265219172202120202019Net Sales SummaryNet sales for 2021 increased 22.2% compared to 2020 primarily driven by the favorable impact of product price/mix and higher volumes, partially offset by the unfavorable impact of foreign currency. Excluding the impact of foreign currency, net sales increased 25.6% in 2021. Net sales for 2020 decreased 18.4% compared to 2019 primarily due to the divestiture of the Embraco compressor business (completed in July 2019) and the unfavorable impact of foreign currency, partially offset by volume growth. Organic net sales increased 22.8% in 2020. EBIT SummaryEBIT margin for 2021 and 2020 was 8.4%. EBIT margin was unchanged primarily due to the favorable impact of product price/mix offset by raw material inflation, the unfavorable impact of foreign currency and unfavorable cost productivity. EBIT margin for 2020 was 8.4% compared to 5.4% for 2019. EBIT increased primarily due to the favorable impact of product price/mix, raw material deflation and increased volumes, partially offset by the divestiture of the Embraco compressor business and the unfavorable impact of foreign currency.ASIANet Sales ($ Millions)1,2391,2651,515202120202019EBIT ($ Millions)66(7)33202120202019Net Sales SummaryNet sales for 2021 decreased 2.1% compared to 2020 primarily due to the divestiture of Whirlpool China, partially offset by favorable product price/mix. Excluding the impact of foreign currency, net sales decreased 3.4% in 2021. Net sales for 2020 decreased 16.5% compared to 2019 primarily due to lower volumes and the unfavorable impacts of foreign currency, partially offset by the favorable impact of product price/mix. Excluding the impact of foreign currency, net sales decreased 14.6% in 2020. EBIT Summary EBIT margin for 2021 was 5.4% compared to (0.5)% for 2020. EBIT increased primarily due to the favorable product price/mix and the divestiture of Whirlpool China, partially offset by the unfavorable impact of raw material inflation. EBIT margin for 2020 was (0.5)% compared to 2.2% for 2019. EBIT decreased primarily due to lower volumes and the unfavorable impacts of product price/ mix, partially offset by cost takeout actions and raw material deflation.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (CONTINUED)33 Selling, General and AdministrativeThe following table summarizes selling, general and administrative expenses as a percentage of sales by operating segment:December 31,Millions of dollars2021As a %of Net Sales2020As a %of Net Sales2019As a %of Net SalesNorth America$ 860 6.9 %$ 733 6.5 %$ 826 7.2 %EMEA 502 9.9 472 10.8 497 11.6 Latin America 261 8.3 233 9.0 306 9.6 Asia 151 12.2 218 17.2 253 16.7 Corporate/other 307 — 221 — 260 — Consolidated$ 2,081 9.5 %$ 1,877 9.6 %$ 2,142 10.5 %Consolidated selling, general and administrative expenses as a percent of consolidated net sales in 2021 is comparable to 2020. Consolidated selling, general and administrative expenses as a percent of consolidated net sales in 2020 decreased compared to 2019 due to fixed cost actions and reduced marketing investments.RestructuringWe incurred restructuring charges of $38 million, $288 million and $188 million for the years ended December 31, 2021, 2020 and 2019, respectively. For the full year 2022, we expect to incur less than $50 million of restructuring charges, driven by our previously announced global cost reduction efforts. See Note 14 to the Consolidated Financial Statements for additional information.Impairment of Goodwill and Other IntangiblesNo impairment charges were recorded for the year ended December 31, 2021. We recorded an immaterial impairment charge related to other intangibles for the year ended December 31, 2020 related to a brand in the EMEA reporting unit.See Note 6 and Note 11 to the Consolidated Financial Statements and the Critical Accounting Policies and Estimates section of this Management's Discussion and Analysis for additional information.(Gain) Loss on Sale and Disposal of BusinessesOn May 6, 2021, the partial tender offer for Whirlpool China was completed and, subsequent to the deconsolidation of the entity, we recorded a gain of $284 million in the third quarter of 2021.On June 30 2021, we completed the sale of our Turkish subsidiary and incurred a loss of $164 million in the second quarter of 2021. During the third quarter of 2021, an additional loss of $13 million related to the final purchase price adjustments was recorded, increasing the total loss to $177 million. We recorded a pre-tax gain of $511 million on the sale of the Embraco compressor business for the year ended December 31, 2019. A $7 million gain related to final purchase price adjustments relating to the sale of the Embraco compressor business was recorded in the third quarter of 2020.We recorded a loss of $74 million for the year ended December 31, 2019 related to charges on the sale of the South Africa business ($63 million) and costs associated with the exit of the Turkey domestic sales operations ($11 million).See Note 17 to the Consolidated Financial Statements for additional information.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ANDRESULTS OF OPERATIONS - (CONTINUED)34 Interest and Sundry (Income) ExpenseInterest and sundry (income) expenses were $(159) million, $(21) million and $(168) million for the years ended December 31, 2021, 2020 and 2019, respectively.Net interest and sundry income increased $138 million in 2021 compared to 2020, primarily due to a gain of $42 million on previously held equity interest of 49% in Elica PB India and the higher expense of pension settlements and other postretirement benefit plans in the prior year.Net interest and sundry income decreased $147 million in 2020 compared to 2019, primarily due to the effect of Brazil indirect tax credits and trade customer insolvency claim settlement in 2019, partially offset by the favorable impact of foreign currency in 2020. See Note 8 to the Consolidated Financial Statements for additional information.Interest ExpenseInterest expense was $175 million, $189 million and $187 million for the years ended December 31, 2021, 2020 and 2019, respectively. Interest expense decreased in 2021 compared to 2020 primarily due to short-term debt reduction. Interest expense was comparable in 2020 to 2019. Income TaxesIncome tax expense was $518 million, $382 million and $348 million for the years ended December 31, 2021, 2020 and 2019, respectively. The increase in tax expense in 2021 compared to 2020 is primarily due to higher earnings and related tax expense, audits and settlements, partially offset by legal entity restructuring tax benefits. In the fourth quarter of 2021, we recorded a $98 million reserve related to an unfavorable ruling in our ongoing tax litigation described in Note 15.The increase in tax expense in 2020 compared to 2019 is primarily due to changes in valuation allowance, legal entity restructuring tax benefits, and earnings dispersion related to the sale of Embraco.See Note 15 to the Consolidated Financial Statements for additional information.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ANDRESULTS OF OPERATIONS - (CONTINUED)35 FORWARD-LOOKING PERSPECTIVEBased on internal projections for the industry and broader economy, we currently estimate earnings per diluted share and industry demand for 2022 to be within the following ranges:2022Current OutlookEstimated earnings per diluted share, for the year ending December 31, 2022$27.00—$29.00Industry demandNorth America 2%—%3%EMEA—%—%2%Latin America (4)%—%(2)%Asia5%—%6%For the full-year 2022, we expect the following key trends to continue and have incorporated our latest expectations of these in our guidance: continued supply constraints and elevated inflationary costs, as well as positive price/mix led by previously announced cost-based price increases. Our anticipated tax rate is between 24.0% and 26.0%. Additionally, we expect to generate cash from operating activities of $2.2 billion and free cash flow of $1.5 billion, including restructuring cash outlays of approximately $50 million and, with respect to free cash flow, capital expenditures of approximately $700 million.The table below reconciles projected 2022 cash provided by operating activities determined in accordance with GAAP to free cash flow, a non-GAAP measure. Management believes that free cash flow provides stockholders with a relevant measure of liquidity and a useful basis for assessing Whirlpool's ability to fund its activities and obligations. There are limitations to using non-GAAP financial measures, including the difficulty associated with comparing companies that use similarly named non-GAAP measures whose calculations may differ from our calculations. For 2022 we define free cash flow as cash provided by operating activities less capital expenditures. For additional information regarding non-GAAP financial measures, see the Non-GAAP Financial Measures section of Management's Discussion and Analysis.2022Millions of dollarsCurrent OutlookCash provided by (used in) operating activities(1)$2,200Capital expenditures(700)Free cash flow$1,500(1)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.The projections above are based on many estimates and are inherently subject to change based on future decisions made by management and the Board of Directors of Whirlpool, and significant economic, competitive and other uncertainties and contingencies.NON-GAAP FINANCIAL MEASURESWe 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 earnings per diluted shareMANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ANDRESULTS OF OPERATIONS - (CONTINUED)36 •Ongoing EBIT margin•Sales excluding foreign currency •Organic net sales (net sales excluding foreign currency and Embraco)•Free cash flow and adjusted free cash flow•Gross debt leverageOngoing measures, including ongoing earnings per diluted share and ongoing EBIT, 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. EBIT margin is calculated by dividing EBIT by net sales. 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. Organic net sales is calculated by excluding divestitures and foreign currency. Management believes that organic net sales and sales excluding foreign currency provides stockholders with a clearer basis to assess our results over time, excluding the impact of exchange rate fluctuations, and in the case of organic net sales, excluding the impact of our Embraco compressor business divested in July 2019. Management believes that Gross Debt Leverage (Gross Debt/Ongoing EBITDA) provides stockholders with a clearer basis to assess the Company's ability to pay off its incurred debt. We also disclose segment EBIT, which we define as operating profit less interest and sundry (income) expense and excluding restructuring costs, asset impairment charges and certain other items, if any, that management believes are not indicative of the region's ongoing performance, as the financial metric used by the Company's Chief Operating Decision Maker to evaluate performance and allocate resources in accordance with ASC 280, Segment Reporting. Management believes that free cash flow and adjusted free cash flow provides stockholders with a relevant measure of liquidity and a useful basis for assessing Whirlpool's ability to fund its activities and obligations. The Company provides free cash flow and adjusted free cash flow related metrics, such as free cash flow and adjusted 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 and adjusted free cash flow to cash provided by (used in) operating activities, the most directly comparable GAAP measure, for these long-term goal metrics. Any such reconciliation would rely on market factors and certain other conditions and assumptions that are outside of the Company's control. 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/Ongoing EBITDA, as such reconciliation would rely on market factors and certain other conditions and assumptions that are outside of the company’s control.We believe that these non-GAAP measures provide meaningful information to assist investors and stockholders in understanding our financial results and assessing our prospects for future performance, and reflect an additional way of viewing aspects of our operations that, when viewed with our GAAP financial measures, provide a more complete understanding of our business. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names. These non-GAAP financial measures should not be considered in isolation or as a substitute for reported net earnings (loss) available to Whirlpool, net sales, net earnings as a percentage of net sales (net earnings margin), net earnings (loss) per diluted share and cash provided by (used in) operating activities, the most directly comparable GAAP financial measures. 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.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ANDRESULTS OF OPERATIONS - (CONTINUED)37 Please refer to a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures below.Ongoing Earnings Before Interest & Taxes (EBIT) Reconciliation:in millionsTwelve Months Ended December 31, 202120202019Net earnings (loss) available to Whirlpool (1)$ 1,783 $ 1,075 $ 1,168 Net earnings (loss) available to noncontrolling interests 23 (10) 14 Income tax expense 518 382 348 Interest expense 175 189 187 Earnings before interest & taxes$ 2,499 $ 1,636 $ 1,717 Restructuring expense(a) 38 288 188 (Gain) loss on previously held equity interest(b) (42) — — (Gain) loss on sale and disposal of businesses(c) (107) (7) (437) Product warranty and liability (income) expense(d) (9) (30) 131 Corrective action recovery(e) — (14) — Sale-leaseback, real estate and receivable adjustments(f) — (113) (86) Trade customer insolvency claim settlement(g) — — 59 Brazil indirect tax credit(h) — — (180) Ongoing EBIT(2)$ 2,379 $ 1,760 $ 1,392 (1)Net earnings margin is approximately 8.1%, 5.5% and 5.7% for the twelve months ended December 31, 2021, 2020 and 2019, respectively, and is calculated by dividing net earnings (loss) available to Whirlpool by consolidated net sales for the twelve months ended December 31, 2021, 2020 and 2019, respectively.(2)Ongoing EBIT margin is approximately 10.8%, 9.0% and 6.8% for the twelve months ended December 31, 2021, 2020 and 2019, respectively. Ongoing EBIT margin is calculated by dividing Ongoing EBIT by consolidated net sales for the twelve months ended December 31, 2021, 2020 and 2019, respectively. Ongoing Earnings Per Diluted Share Reconciliation:Twelve Months Ended December 31, 20212020Earnings per diluted share$ 28.36 $ 16.98 Restructuring expense(a) 0.61 4.54 (Gain) loss on previously held equity interest(b) (0.50) — (Gain) loss on sale and disposal of businesses(c) (1.69) (0.10) Product warranty and liability (income) expense(d) (0.14) (0.47) Corrective action recovery(e) — (0.22) Sale-leaseback, real estate and receivable adjustments(f) — (1.77) Income tax impact 0.41 (0.53) Normalized tax rate adjustment(i) (0.46) 0.03 Ongoing earnings per diluted share$ 26.59 $ 18.46 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ANDRESULTS OF OPERATIONS - (CONTINUED)38 Throughout 2021 and comparable periods, the Company defines adjusted free cash flow as cash provided by (used in) operating activities less capital expenditures and including proceeds from the sale of assets/businesses, and changes in restricted cash. Going forward, the Company presents free cash flow which is cash provided by (used in) operating activities less capital expenditures.Adjusted Free Cash Flow (FCF) Reconciliation: in millionsTwelve Months Ended December 31, 202120202019Cash provided by (used in) operating activities$ 2,176 $ 1,500 $ 1,230 Capital expenditures (525) (410) (532) Proceeds from sale of assets and businesses (5) 302 166 1,174 Change in restricted cash (4) 10 (10) 40 Repayment of term loan (5) — — (1,000) Adjusted free cash flow$ 1,963 $ 1,246 $ 912 Cash provided by (used in) investing activities$ (660) $ (237) $ 636 Cash provided by (used in) financing activities$ (1,339) $ (253) $ (1,424) (3)See Note 4 to the Consolidated Financial Statements for additional information(4)Proceeds from the sale of assets and business for the twelve months ended December 31, 2019 include $1.0 billion of net cash proceeds received for the sale of the Embraco compressor business; $1.0 billion of these proceeds were used to repay an outstanding term loan in August 2019.Total Whirlpool Organic Net Sales Reconciliation:in millionsTwelve Months Ended December 31, 20202019ChangeNet sales$ 19,456 $ 20,419 (4.7) %Less: Embraco net sales — (635) Add-Back: currency 551 — Organic net sales$ 20,007 $ 19,784 1.1 %Latin America Organic Net Sales Reconciliation:in millionsTwelve Months Ended December 31, 20202019ChangeNet sales$ 2,592 $ 3,177 (18.4) %Less: Embraco net sales — (635) Add-Back: currency 530 — Organic net sales$ 3,122 $ 2,542 22.8 %MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ANDRESULTS OF OPERATIONS - (CONTINUED)39 The reconciliation provided below reconciles the non-GAAP financial measure ongoing EBITDA to net earnings available to Whirlpool, for the twelve months ended December 31, 2021. Twelve Months EndedOngoing earnings before interest, taxes, depreciation & amortization:December 31, 2021Net earnings (loss) available to Whirlpool$ 1,783 Net earnings (loss) available to noncontrolling interests 23 Income tax expense (benefit) 518 Interest expense 175 Earnings before interest & taxes$ 2,499 Restructuring costs(a) 38 (Gain) loss on previously held equity interest(b) (42) (Gain) loss on sale and disposal of businesses(c) (107) Product warranty and liability (income) expense(d) (9) Ongoing earnings before interest & taxes$ 2,379 Depreciation and amortization 494 Ongoing earnings before interest, taxes, depreciation & amortization$ 2,873 The reconciliation provided below reconciles Whirlpool's Gross Debt outstanding, for the twelve months ended December 31, 2021.Twelve Months EndedGross debt outstanding:December 31, 2021Long-term debt$ 4,929 Current maturities of long-term debt 298 Notes payable 10 Gross debt outstanding$ 5,237 The reconciliation provided below calculates Whirlpool's Gross Debt to ongoing EBITDA ratio, for the twelve months ended December 31, 2021.Twelve Months EndedGross debt to ongoing EBITDA ratio:December 31, 2021Gross debt outstanding$ 5,237 Ongoing earnings before interest, taxes, depreciation and amortization$ 2,873 Gross debt leverage (gross debt to ongoing EBITDA) ratio1.8Footnotes(a) RESTRUCTURING EXPENSE - In 2019, these costs were primarily related to actions that rightsize our EMEA business and certain other unique restructuring events, including restructuring of the Naples, Italy manufacturing plant.In 2020, these costs were primarily related to actions that right-size and reduce the fixed cost structure of our global business, attributable primarily to the macroeconomic uncertainties caused by COVID-19. This includes costs of approximately $100 million related to restructuring in the United States and approximately $188 million related to restructuring outside of the United States, including the exit of our Naples, Italy facility. In 2021, these costs were primarily related to actions that right-size and reduce the fixed cost structure of our EMEA business and other centralized functions.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ANDRESULTS OF OPERATIONS - (CONTINUED)40 (b) (GAIN) LOSS ON PREVIOUSLY HELD EQUITY INTEREST - During the third quarter of 2021, our subsidiary Whirlpool of India Ltd. acquired an additional 38% equity interest in Elica PB India Private Limited (Elica PB India) for $57 million, which resulted in a controlling equity ownership of approximately 87%. The previously held equity interest of 49% in Elica PB India was remeasured at fair value of $74 million on the acquisition date, which resulted in a gain of $42 million. This gain was recorded within Interest & sundry (income) expense during the third quarter. The earnings per diluted share impact is calculated net of minority interest. (c) (GAIN) LOSS ON SALE AND DISPOSAL OF BUSINESSES - On March 31, 2021, Galanz launched its partial tender offer for majority ownership of Whirlpool China. Our subsidiary tendered approximately 31% of Whirlpool China's outstanding shares in the tender offer, with the remainder representing a noncontrolling interest of approximately 20% in Whirlpool China. The transaction closed on May 6, 2021. In connection with the closing of the transaction, we received cash proceeds of $193 million and recognized a gain on sale of $284 million. On May 17, 2021, our subsidiary entered into a share purchase agreement to sell its Turkish subsidiary to Arçelik. As part of the agreement, Arçelik assumed responsibility for operating the manufacturing site in Manisa, Turkey, following closing. The transaction closed on June 30, 2021. In connection with the closing of the transaction, we received cash proceeds of $93 million and recognized a loss on sale of $164 million. During the third quarter of 2021, amounts for working capital and other customary post-closing adjustments were finalized and an additional $13 million loss related to the sale of business was recorded. The net impact realized for gain on sale and disposal of businesses included in the income statement for the twelve months ended December 31, 2021 is $105 million.During the third quarter of 2019, the Company reserved approximately $7 million for an expected change in purchase price for the sale of the Embraco compressor business. Adjustments to the final purchase price were finalized as of the third quarter 2020, with no resulting change to the final purchase price, and the reserve was released and recognized as a gain during the quarter.(d) PRODUCT WARRANTY AND LIABILITY (INCOME) EXPENSE - In September 2015, the Company recorded a liability related to a corrective action affecting certain legacy Indesit products. During the second and third quarters of 2019, the Company incurred additional product warranty expense related to this previously disclosed legacy Indesit dryer corrective action campaign in the UK for approximately $12 million and $14 million, respectively. In the third quarter of 2019, the Company recorded a charge of approximately $105 million for estimated product warranty expense related to certain EMEA-produced washers for which the Company commenced a recall in January 2020.During the fourth quarter of 2020, the Company released an accrual of approximately $30 million related to this EMEA-produced washer recall campaign. During the fourth quarter of 2021, the Company further released an accrual of approximately $9 million. These adjustments were made based on our revised expectations regarding future period cash expenditures for the campaign. (e) CORRECTIVE ACTION RECOVERY - The Company recorded a benefit of $13 million in the third quarter of 2020 and $1 million in the fourth quarter of 2020 related to a vendor recovery in our ongoing EMEA-produced washer corrective action.(f) SALE-LEASEBACK, REAL ESTATE AND RECEIVABLE ADJUSTMENTS - In the fourth quarter of 2019, the Company sold certain owned properties, primarily warehouses, while agreeing to lease these same properties from the purchaser. As part of the sale, the Company recognized a pre-tax gain on sale of the group of properties of approximately $111 million and a cash benefit of approximately $140 million. In addition, the Company wrote off the full loan receivable amount outstanding of approximately $18 million related to a previous loan between the Company and a not-for-profit entity in connection with a community and economic development project. The Company also wrote-down the book value of certain real estate properties, recognizing a loss of approximately $7 million. In the fourth quarter of 2020, the Company sold and leased back a group of properties for net proceeds of approximately $139 million. The transaction met the requirements for sale leaseback MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ANDRESULTS OF OPERATIONS - (CONTINUED)41 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS - (CONTINUED)
accounting. In the fourth quarter of 2020, the Company recorded the sale of the properties, which
resulted in a pre-tax gain of approximately $113 million.
(g) TRADE CUSTOMER INSOLVENCY CLAIM SETTLEMENT - In January 2020, the Company entered
into an agreement with the insolvency trustee for Alno AG, a former trade customer of a Company
subsidiary in which the Company subsidiary held a minority equity interest, to settle all potential
claims that the insolvency trustee may have against the Company subsidiary related to the Alno
insolvency, resulting in a one-time charge of €52.75 million ($59 million as of December 31, 2019).
(h) 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
and second quarter of 2019 in the amount of $127 million and $53 million, respectively, in
connection with these decisions.
(i) NORMALIZED TAX RATE ADJUSTMENT - For 2020 and 2021, the full-year effective tax rates were
26.3% and 23.5%, respectively.
FINANCIAL CONDITION AND LIQUIDITY
Our objective is to finance our business through operating cash flow and the appropriate mix of
long-term and short-term debt. By diversifying the maturity structure, we avoid concentrations of
debt, reducing liquidity risk. We have varying needs for short-term working capital financing as a
result of the nature of our business. We regularly review our capital structure and liquidity priorities,
which
innovation and growth through capital, research and development
expenditures as well as opportunistic mergers and acquisitions; and providing returns to
shareholders through dividends, share repurchases and maintaining our strong investment grade
rating.
include funding
The Company believes that free cash flow provides stockholders with a relevant measure of liquidity
and a useful basis for assessing Whirlpool's ability to fund its activities and obligations. Whirlpool
has historically been able to leverage its strong free cash flow generation to fund our operations,
pay for any debt servicing costs and allocate capital for reinvestment in our business, funding share
repurchases and dividend payments.
Our short term potential uses of
include funding our ongoing capital spending,
restructuring activities, and returns to shareholders. We also have $298 million of term debt
maturing in the next twelve months, and are currently evaluating our options in connection with this
maturing debt, which may include repayment through refinancing, free cash flow generation or cash
on hand.
liquidity
The Company had cash and cash equivalents of approximately $3.0 billion at December 31, 2021, of
which approximately half was held by subsidiaries in foreign countries. For each of its foreign
subsidiaries, the Company makes an assertion regarding the amount of earnings intended for
permanent reinvestment, with the balance available to be repatriated to the United States. The cash
held by foreign subsidiaries for permanent reinvestment is generally used to finance the
subsidiaries' operational activities and expected future foreign investments. Our intent is to
permanently reinvest these funds outside of the United States and our current plans do not
demonstrate a need to repatriate the cash to fund our U.S. operations. However, if these funds were
repatriated, we would be required to accrue and pay applicable United States taxes (if any) and
withholding taxes payable to various countries. It is not practical to estimate the amount of the
deferred tax liability associated with the repatriation of cash due to the complexity of its
hypothetical calculation.
At December 31, 2021, we had cash or cash equivalents greater than 1% of our consolidated assets
in the United States, Switzerland, Brazil and India, which represented 7.3%, 1.8%, 1.4%, and 1.0%,
respectively. In addition, we had third-party accounts receivable outside of the United States greater
than 1% of our consolidated assets in Brazil and Italy, which represented 1.4% and 1.3%,
respectively. We continue to monitor general financial instability and uncertainty globally.
42
Notes payable consists of short-term borrowings payable to banks and commercial paper, which are generally used to fund working capital requirements. At December 31, 2021, we had $10 million of notes payable outstanding. See Note 7 to the Consolidated Financial Statements for additional information.We monitor the credit ratings and market indicators of credit risk of our lending, depository, derivative counterparty banks and customers regularly, and take certain action to manage credit risk. We diversify our deposits and investments in short-term cash equivalents to limit the concentration of exposure by counterparty. We also continue to review customer conditions globally.In the past, when faced with a potential volume reduction from any one particular segment of our trade distribution network, we generally have been able to offset such declines through increased sales throughout our broad distribution network.For additional information on transfers and servicing of financial assets, accounts payable outsourcing and guarantees, see Note 1 and Note 8 to the Consolidated Financial Statements. Share Repurchase ProgramFor additional information about our share repurchase program, see Note 12 to the Consolidated Financial Statements.Sources and Uses of CashWe met our cash needs during 2021 through cash flows from operations, cash and cash equivalents, and financing arrangements. Our cash, cash equivalents and restricted cash at December 31, 2021 increased $110 million compared to the same period in 2020.The following table summarizes the net increase (decrease) in cash, cash equivalents and restricted cash for the periods presented. Significant drivers of changes in our cash and cash equivalents balance during 2021 are discussed below:Cash Flow SummaryMillions of dollars202120202019Cash provided by (used in):Operating activities$ 2,176 $ 1,500 $ 1,230 Investing activities (660) (237) 636 Financing activities (1,339) (253) (1,424) Effect of exchange rate changes (67) (28) (28) Net increase in cash, cash equivalents and restricted cash$ 110 $ 982 $ 414 Cash Flows from Operating ActivitiesCash provided by operating activities in 2021 increased compared to 2020. The increase was primarily driven by strong cash earnings and improvements in working capital. The improvement in working capital was driven by increased accounts payable due to raw material inflation, partially offset by increased inventory due to higher input costs and a modest inventory build.Cash provided by operating activities in 2020 increased compared to 2019. The increase was primarily driven by strong cash earnings partially offset by working capital initiatives. Working capital was impacted by our ongoing accounts receivable and credit management actions, along with inventory management. Additionally, working capital was impacted by increased accounts payable driven by higher year end production levels, partially offset by the timing of our year end payment schedule.The timing of cash flows from operations varies significantly throughout the year primarily due to changes in production levels, sales patterns, promotional programs, funding requirements, credit MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ANDRESULTS OF OPERATIONS - (CONTINUED)43 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS - (CONTINUED)
management, as well as receivable and payment terms. Depending on the timing of cash flows, the
location of cash balances, as well as the liquidity requirements of each country, external sources of
funding are used to support working capital requirements.
Cash Flows from Investing Activities
The increase in cash used in investing activities during 2021 primarily reflects the cash impacts from
the divestiture of Whirlpool China (approximately $341 million) and our Turkey manufacturing
subsidiary (approximately $52 million) as well as an increase in capital expenditures (approximately
$115 million).
The increase in cash provided by investing activities during 2020 primarily reflects the 2019 proceeds
from the sale of the Embraco compressor business (approximately $1 billion), partially offset by a
decrease in capital expenditures (approximately $122 million) and the proceeds from a real estate
sale-leaseback transaction (approximately $139 million).
The increase in cash provided by investing activities during 2019 primarily reflects proceeds from the
sale of the Embraco compressor business (approximately $1 billion) along with proceeds from a real
estate sale-leaseback transaction
in capital
expenditures (approximately $60 million).
(approximately $140 million) and a decrease
Cash Flows from Financing Activities
The increase in cash used in financing activities during 2021 primarily reflects lower debt issuance
proceeds (approximately $733 million) along with higher share repurchases (approximately $920
million) partially offset by lower repayments of long-term debt (increase of approximately $273
million) net effect of reduced short-term debt (increase of approximately $330 million).
The decrease in cash used in financing activities during 2020 primarily reflects higher debt issuance
proceeds (increase of approximately $300 million), lower repayments of long-term debt (increase of
approximately $400 million) net effect of reduced short-term debt (increase of approximately $400
million). Short-term debt reflects the activity on the $1 billion term loan that was borrowed in 2018
and repaid in 2019, offset by the reduced need to fund working capital through short term debt.
The increase in cash used in financing activities during 2019 primarily reflects higher repayments of
long-term debt (increase of approximately $550 million), net effect of changes in short-term debt
(increase of approximately $1.4 billion), partially offset by lower share repurchase activity (decrease
of approximately $1 billion). Short-term debt reflects the activity on the $1 billion term loan that was
borrowed in 2018 and repaid in 2019, offset by changes in commercial paper for funding normal
working capital requirements.
Dividends paid in financing activities were $338 million, $311 million, and $305 million during 2021,
2020 and 2019, respectively.
Financing Arrangements
At December 31, 2021, the Company had total committed credit facilities of approximately $3.7
billion and $4.2 billion at December 31, 2021 and 2020, respectively. The facilities are geographically
diverse and reflect the Company's global operations. The Company believes these facilities are
sufficient to support its global operations. We had no borrowings outstanding under the committed
credit facilities at December 31, 2021 and 2020, respectively.
See Note 7 to the Consolidated Financial Statements for additional information.
44
Other material obligations include off-balance sheet arrangements arising in the normal course of business. They primarily consist of agreements we enter into with financial institutions to issue bank guarantees, letters of credit and surety bonds. These agreements are primarily associated with unresolved tax matters in Brazil, as is customary under local regulations, and other governmental obligations and debt agreements. At December 31, 2021 and 2020, we had approximately $294 million and $423 million outstanding under these agreements, respectively.Additionally, we have material contractual obligations. They primarily consist of long-term debt obligations, operating lease obligations, purchase obligations, taxes, United States and foreign pension plans and other postretirement benefits. See Notes 1, 3, 7-10 and 15 to the Consolidated Financial Statements for additional information.DividendsIn April 2021, our Board of Directors approved a 12.0% increase in our quarterly dividend on our common stock to $1.40 per share from $1.25 per share, representing the 9th consecutive year of increased dividends.CRITICAL ACCOUNTING POLICIES AND ESTIMATESThe preparation of financial statements, in conformity with GAAP, requires management to make certain estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosures. We periodically evaluate these estimates and assumptions, which are based on historical experience, forecasted events, changes in the business environment and other factors that management believes to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions. The management believes the accounting policies below are critical in the portrayal of our financial condition and results of operations and require management's most difficult, subjective, or complex judgments. Pension and Other Postretirement BenefitsAccounting for pensions and other postretirement benefits involves estimating the costs of future benefits and attributing the cost over the employee's expected period of employment. The determination of our obligation and expense for these costs requires the use of certain assumptions. Those key assumptions include the discount rate, expected long-term rate of return on plan assets, life expectancy, and health care cost trend rates. These assumptions are subject to change based on interest rates on high quality bonds, stock and bond markets and medical cost inflation, respectively. Actual results that differ from our assumptions are accumulated and amortized over future periods and therefore, generally affect our recognized expense and accrued liability in such future periods. While we believe that our assumptions are appropriate given current economic conditions and actual experience, significant differences in results or significant changes in our assumptions may materially affect our pension and other postretirement benefit obligations and related future expense.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ANDRESULTS OF OPERATIONS - (CONTINUED)45 Our pension and other postretirement benefit obligations at December 31, 2021 and preliminary retirement benefit costs for 2022 were prepared using the assumptions that were determined as of December 31, 2021. The following table summarizes the sensitivity of our December 31, 2021 retirement obligations and 2022 retirement benefit costs of our United States plans to changes in the key assumptions used to determine those results: Estimated increase (decrease) inMillions of dollarsPercentageChange2022 ExpensePBO/APBO(1)for 2021United States Pension PlansDiscount rate+/-50bps1/(1)(150)/165Expected long-term rate of return on plan assets+/-50bps(13)/13–United States Other Postretirement Benefit PlanDiscount rate+/-50bps1/(1)(6)/7(1)Projected benefit obligation (PBO) for pension plans and accumulated postretirement benefit obligation (APBO) for other postretirement benefit plans.These sensitivities may not be appropriate to use for other years' financial results. Furthermore, the impact of assumption changes outside of the ranges shown above may not be approximated by using the above results. For additional information about our pension and other postretirement benefit obligations, see Note 9 to the Consolidated Financial Statements.Income TaxesWe estimate our income taxes in each of the taxing jurisdictions in which we operate. This involves estimating actual current tax expense together with assessing any temporary differences resulting from the different treatment of certain items, such as the timing for recognizing expenses, for tax and accounting purposes. These differences may result in deferred tax assets or liabilities, which are included in our Consolidated Balance Sheets. We are required to assess the likelihood that deferred tax assets, which include net operating loss carryforwards, general business credits and deductible temporary differences, will be realizable in future years. Realization of our net operating loss and general business credit deferred tax assets is supported by specific tax planning strategies and, where possible, considers projections of future profitability. If recovery is not more likely than not, we provide a valuation allowance based on estimates of future taxable income in the various taxing jurisdictions, for the amount of deferred taxes that are ultimately realizable. If future taxable income is lower than expected or if tax planning strategies are not available as anticipated, we may record additional valuation allowances through income tax expense in the period such determination is made. Likewise, if we determine that we are able to realize our deferred tax assets in the future in excess of net recorded amounts, an adjustment to the deferred tax asset will benefit income tax expense in the period such determination is made.At December 31, 2021 and 2020, we had total deferred tax assets of $3.0 billion and $3.4 billion, respectively, net of valuation allowances of $195 million and $214 million, respectively. The Company has established tax planning strategies and transfer pricing policies to provide sufficient future taxable income to realize these deferred tax assets. Our income tax expense has fluctuated considerably over the last five years. The tax expense has been influenced primarily by foreign tax credits, audit settlements and adjustments, tax planning strategies, enacted legislation, and dispersion of global income. Future changes in the effective tax rate will be subject to several factors, including business profitability, tax planning strategies, and enacted tax laws. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ANDRESULTS OF OPERATIONS - (CONTINUED)46 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS - (CONTINUED)
We have various tax filings with applicable jurisdictions to defend our positions with regards to the
timing and amount of deductions and credits as well as the allocation of income across various
jurisdictions. We regularly inventory, evaluate and measure all uncertain tax positions taken or
expected to be taken to ensure the timely recording of liabilities for tax positions that may not be
sustained or may only be partially sustained upon examination by the relevant taxing authorities.
We believe that our estimates and judgements with respect to uncertain tax positions are
reasonable and accurate at the time they are developed. However, actual results may differ due to
unforeseen future events and circumstances. If one or more of the applicable taxing authorities
were to successfully challenge our right to realize some or all of the tax benefits we have recorded, it
could have a material adverse effect on our financial statements.
In addition, we operate within multiple taxing jurisdictions and are subject to audit in these
jurisdictions. These audits can involve complex issues, which may require an extended period of
time to resolve and could result in outcomes that are unfavorable to the Company. For additional
information about income taxes, see Note 1, Note 8 and Note 15 to the Consolidated Financial
Statements.
Warranty Obligations
The estimation of warranty obligations is determined in the same period that revenue from the sale
of the related products is recognized. The warranty obligation is based on historical experience and
represents our best estimate of expected costs at the time products are sold. Warranty accruals are
adjusted for known or anticipated warranty claims as new information becomes available. New
product launches require a greater use of judgment in developing estimates until historical
experience becomes available. Future events and circumstances could materially change our
estimates and require adjustments to the warranty obligations. For the year ended December 31,
2021 and 2020, warranty expense as a percentage of consolidated Net sales approximated 1.5% and
1.4%, respectively. For additional information about warranty obligations, see Note 8 to the
Consolidated Financial Statements.
Goodwill and Indefinite-Lived Intangibles
Certain business acquisitions have resulted in the recording of goodwill and trademark assets which
are not amortized. At December 31, 2021 and 2020, we had goodwill of approximately $2.5 billion
and $2.5 billion, respectively. We have trademark assets with a carrying value of approximately $1.9
billion at December 31, 2021 and 2020.
We perform our annual impairment assessment for goodwill and other indefinite-lived intangible
assets as of October 1st or more frequently if events or changes in circumstances indicate that the
asset might be impaired. We consider qualitative factors to assess if it is more likely than not that
the fair value for goodwill or indefinite-lived intangible assets is below the carrying amount. We may
also elect to bypass the qualitative assessment and perform a quantitative assessment.
In conducting a qualitative assessment, the Company analyzes a variety of events or factors that
may influence the fair value of the reporting unit or indefinite-lived intangible, including, but not
limited to: the results of prior quantitative assessments performed; changes in the carrying amount
of the reporting unit or indefinite-lived intangible; actual and projected revenue and EBIT margin;
relevant market data for both the Company and
industry outlooks;
macroeconomic conditions; liquidity; changes in key personnel; and the Company's competitive
position. Significant judgment is used to evaluate the totality of these events and factors to make the
determination of whether it is more likely than not that the fair value of the reporting unit or
indefinite-lived intangible is less than its carrying value.
its peer companies;
For our annual impairment assessment as of October 1, 2021, the Company elected to bypass the
qualitative assessment and perform a quantitative assessment to evaluate goodwill and certain
brand trademarks. The Company elected to perform a qualitative assessment on the other
indefinite-lived intangible assets noting no events that indicated that the fair value was less than the
carrying value that would require a quantitative impairment assessment.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS - (CONTINUED)
Goodwill Valuations
In performing a quantitative assessment, we estimate each reporting unit's fair value primarily by
using the income approach. The income approach uses each reporting unit's projection of estimated
operating results and cash flows that are discounted using a market participant discount rate based
on a weighted-average cost of capital. The financial projections reflect management's best estimate
of economic and market conditions over the five-year projected period including forecasted revenue
growth, EBIT margin, tax rate, capital expenditures, depreciation and amortization and changes in
working capital requirements. Other assumptions include discount rate and terminal growth rate.
For one of our reporting units we use a blended approach that includes a market capitalization
methodology given publicly available information and a discounted cash flow approach. The
estimated fair value of each reporting unit is compared to their respective carrying values.
Additionally we validate our estimates of fair value under the income approach by comparing the
values to fair value estimates using a market approach. A market approach estimates fair value by
applying cash flow multiples to the operating performance of each reporting unit. The multiples are
derived from comparable publicly traded companies with operating and investment characteristics
similar to the reporting units. We also corroborate the fair value through a market capitalization
reconciliation to determine whether the implied control premium is reasonable based on recent
market transactions and other qualitative considerations.
Based on the results of our annual quantitative assessment performed as of October 1, 2021, the
fair values of our North America, Asia, EMEA and Latin America reporting units exceeded their
respective carrying values by 306%, 258%, 29% and 20%, respectively.
If actual results are not consistent with management's estimates and assumptions, a material
impairment charge of goodwill could occur, which would have a material adverse effect on our
consolidated financial statements.
Indefinite-Lived Intangible Valuations
In performing a quantitative assessment of indefinite-lived intangible assets other than goodwill,
primarily trademarks, we estimate the fair value of these intangible assets using the relief-from-
royalty method which requires assumptions related to projected revenues from our annual long-
range plan; assumed royalty rates that could be payable if we did not own the trademark; and a
market participant discount rate based on a weighted-average cost of capital. If the estimated fair
value of the indefinite-lived intangible asset is less than its carrying value, we would recognize an
impairment loss.
The fair value of the Maytag trademark exceeded its carrying value of $1,021 million by
approximately 11%. We expect future fiscal year revenue for this brand to improve as we recover
from temporary volume loss from supply chain disruptions and continue to execute our brand
leadership strategy and benefit from our new product investments.
The fair values of all other trademarks exceeded their carrying values by an amount sufficient to not
be deemed "at risk".
In performing the quantitative assessment on these assets, significant assumptions used in our
relief-from-royalty model included revenue growth rates, assumed royalty rates and the discount
rate, which are discussed further below.
Revenue growth rates relate to projected revenues from our financial planning and analysis process
and vary from brand to brand. Adverse changes in the operating environment or our inability to
grow revenues at the forecasted rates may result in a material impairment charge. We performed a
sensitivity analysis on our estimated fair values noting a 10% reduction of forecasted revenues in the
Maytag trademark would reduce the fair value of the trademark to its carrying value.
In determining royalty rates for the valuation of our trademarks, we considered factors that affect
the assumed royalty rates that would hypothetically be paid by a market participant for the use of
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS - (CONTINUED)
trademarks. The most significant factors in determining the assumed royalty rates include the
overall role and importance of the trademarks in the particular industry, the profitability of the
products utilizing the trademarks, and the position of the trademarked products in the given
product category. Based on this analysis, we determined a royalty rate of 4% for the Maytag
trademark. We performed a sensitivity analysis on our estimated fair value of Maytag, noting a 50
basis point reduction of the royalty rate would result in an impairment charge of approximately $24
million.
In developing discount rates for the valuation of our trademarks, we used a market participant
discount rate based on a weighted-average cost of capital, adjusted for higher relative level of risks
associated with doing business in other countries, as applicable, as well as the higher relative levels
of risks associated with intangible assets. Based on this analysis, we determined the discount rate to
be 10.25% for Maytag. We performed a sensitivity analysis on our estimated fair value for Maytag
noting a 100 basis point increase in the discount rate would result in an impairment charge of
approximately $8 million.
Based on our quantitative impairment assessment as of October 1, 2020, the carrying value of the
Hotpoint* trademark exceeded its fair value by €6 million, approximately $7 million USD, and we
recorded an intangible impairment charge in this amount during the fourth quarter of 2020. There
were no other impairments of indefinite-lived intangible assets in 2020 or 2021.
If actual results are not consistent with management's estimate and assumptions, a material
impairment charge of our trademarks could occur, which could have a material adverse effect on
our consolidated financial statements.
For additional information about goodwill and indefinite-life intangible valuations, see Note 6 and
Note 11 to the Consolidated Financial Statements.
The estimates of future cash flows used in determining the fair value of goodwill and intangible
assets involve significant management judgment and are based upon assumptions about expected
future operating performance, economic conditions, market conditions and cost of capital. Inherent
in estimating the future cash flows are uncertainties beyond our control, such as changes in capital
markets. The actual cash flows could differ materially from management's estimates due to changes
in business conditions, operating performance and economic conditions.
ISSUED BUT NOT YET EFFECTIVE ACCOUNTING PRONOUNCEMENTS
For additional information regarding recently issued accounting pronouncements, see Note 1 to the
Consolidated Financial Statements.
OTHER MATTERS
For additional information regarding certain of our loss contingencies/litigation, see Note 8 to the
Consolidated Financial Statements. Unfavorable outcomes in these proceedings could have a
material adverse effect on our financial statements in any particular reporting period.
Antidumping and Safeguard Petition
As previously reported, Whirlpool filed petitions in 2011 and 2015 alleging that Samsung, LG and
Electrolux violated U.S. and international trade laws by dumping large residential washers into the
U.S. Those petitions resulted in orders imposing antidumping duties on certain large residential
washers imported from South Korea, Mexico, and China, and countervailing duties on certain large
residential washers from South Korea. In March 2019, the order covering certain large residential
washers from Mexico was extended for an additional five years, while the order covering certain
large residential washers from South Korea was revoked. The order covering certain large residential
washers from China is currently subject to administrative review to determine whether the order
should be extended.
* Whirlpool ownership of the Hotpoint brand in the EMEA and Asia Pacific regions is not affiliated with the Hotpoint brand
sold in the Americas.
49
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS - (CONTINUED)
Whirlpool also filed a safeguard petition in May 2017 to address our concerns that Samsung and LG
were evading U.S. trade laws by moving production from countries covered by antidumping orders.
A safeguard remedy went into effect in February 2018, implementing tariffs on finished large
residential washers and certain covered parts for three years. In January 2021, the remedy was
extended for two years until February 2023. During the fourth year of the remedy, beginning
February 7, 2021, the remedy imposes a 15% tariff on the first 1.2 million large residential washers
imported into the United States (under tariff) and a 35% tariff on such imports in excess of 1.2
million, and also imposes a 35% tariff on washer tub, drum, and cabinet imports in excess of
110,000. Consistent with modifications to the order approved in 2020, the 1.2 million under tariff is
allocated by quarter (300,000 large residential washers per quarter). We cannot speculate on the
modification's impact in future quarters, which will depend on Samsung and LG's U.S. production
capabilities and import plans. These orders are subject to administrative reviews and possible
appeals.
Raw Materials and Global Economy
The current domestic and international political environment have contributed to uncertainty
surrounding the future state of the global economy. We have experienced raw material inflation in
certain prior years based on the impact of U.S. tariffs and other global macroeconomic factors. Due
to many factors beyond our control, we expect to continue to be impacted by the following factors:
global shortage of certain components, other supply chain constraints and cost inflation, all of which
we expect to continue in 2022. This could require us to modify our current business practices, and
could have a material adverse effect on our financial statements in any particular reporting period.
FORWARD-LOOKING STATEMENTS
The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking
statements made by us or on our behalf. Certain statements contained in this annual report,
including those within the forward-looking perspective section within the Management's Discussion
and Analysis section, and other written and oral statements made from time to time by us or on our
behalf do not relate strictly to historical or current facts and may contain forward-looking
statements that reflect our current views with respect to future events and financial performance. As
such, they are considered "forward-looking statements" which provide current expectations or
forecasts of future events. Such statements can be identified by the use of terminology such as
"may," "could," "will," "should," "possible," "plan," "predict," "forecast," "potential," "anticipate,"
"estimate," "expect," "project," "intend," "believe," "may impact," "on track," "guarantee," "seek," and
the negative of these words and words and terms of similar substance. Our forward-looking
statements generally relate to our growth strategies, financial results, product development, and
sales efforts. These forward-looking statements should be considered with the understanding that
such statements involve a variety of risks and uncertainties, known and unknown, and may be
affected by
inaccurate assumptions. Consequently, no forward-looking statement can be
guaranteed and actual results may vary materially.
This document contains forward-looking statements about Whirlpool Corporation and
its
consolidated subsidiaries ("Whirlpool") that speak only as of this date. Whirlpool disclaims any
obligation to update these statements. Forward-looking statements in this document may include,
but are not limited to, statements regarding future financial results, long-term value creation goals,
restructuring expectations, productivity, raw material prices and the impact of COVID-19 on our
operations. Many risks, contingencies and uncertainties could cause actual results to differ
materially from Whirlpool's forward-looking statements. Among these factors are: (1) COVID-19
pandemic-related business disruptions and economic uncertainty; (2) intense competition in the
home appliance industry reflecting the impact of both new and established global competitors,
including Asian and European manufacturers, and the impact of the changing retail environment,
including direct-to-consumer sales; (3) Whirlpool's ability to maintain or increase sales to significant
trade customers and the ability of these trade customers to maintain or increase market share; (4)
Whirlpool's ability to maintain its reputation and brand image; (5) the ability of Whirlpool to achieve
its business objectives and leverage its global operating platform, and accelerate the rate of
innovation; (6) Whirlpool’s ability to understand consumer preferences and successfully develop new
50
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS - (CONTINUED)
products; (7) Whirlpool's ability to obtain and protect intellectual property rights; (8) acquisition and
investment-related risks, including risks associated with our past acquisitions; (9) Whirlpool's ability
to navigate risks associated with our presence in emerging markets; (10) risks related to our
international operations, including changes in foreign regulations; (11) Whirlpool's ability to respond
to unanticipated social, political and/or economic events; (12) information technology system
failures, data security breaches, data privacy compliance, network disruptions, and cybersecurity
attacks; (13) product liability and product recall costs; (14) the ability of suppliers of critical parts,
components and manufacturing equipment to deliver sufficient quantities to Whirlpool in a timely
and cost-effective manner; (15) our ability to attract, develop and retain executives and other
qualified employees; (16) the impact of labor relations; (17) fluctuations in the cost of key materials
(including steel, resins, copper and aluminum) and components and the ability of Whirlpool to offset
cost increases; (18) Whirlpool's ability to manage foreign currency fluctuations; (19) impacts from
goodwill impairment and related charges; (20) triggering events or circumstances impacting the
carrying value of our long-lived assets; (21) inventory and other asset risk; (22) health care cost
trends, regulatory changes and variations between results and estimates that could increase future
funding obligations for pension and postretirement benefit plans; (23) 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; (24) the effects and costs of
governmental investigations or related actions by third parties; (25) changes in the legal and
regulatory environment including environmental, health and safety regulations, and taxes and
tariffs; (26) Whirlpool's ability to respond to the impact of climate change and climate change
regulation; and (27) the uncertain global economy and changes in economic conditions which affect
demand for our products.
We undertake no obligation to update any forward-looking statement, and investors are advised to
review disclosures in our filings with the SEC. It is not possible to foresee or identify all factors that
could cause actual results to differ from expected or historic results. Therefore, investors should not
consider the foregoing factors to be an exhaustive statement of all risks, uncertainties, or factors
that could potentially cause actual results to differ from forward-looking statements.
Additional information concerning these and other factors can be found in "Risk Factors" in Item 1A
of this report.
ITEM 7A.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
MARKET RISK
We have in place an enterprise risk management process that involves systematic risk identification
and mitigation covering the categories of enterprise, strategic, financial, operational and compliance
and reporting risks. The enterprise risk management process receives Board of Directors and
management oversight, drives risk mitigation decision-making and is fully integrated into our
internal audit planning and execution cycle.
We are exposed to market risk from changes in foreign currency exchange rates, domestic and
foreign interest rates, and commodity prices, which can affect our operating results and overall
financial condition. We manage exposure to these risks through our operating and financing
activities and, when deemed appropriate, through the use of derivatives. Derivatives are viewed as
risk management tools and are not used for speculation or for trading purposes. Derivatives are
generally contracted with a diversified group of investment grade counterparties to reduce exposure
to nonperformance on such instruments.
We use foreign currency forward contracts, currency options, currency swaps and cross-currency
swaps to hedge the price risk associated with firmly committed and forecasted cross-border
payments and receipts related to ongoing business and operational financing activities. At
December 31, 2021 and 2020, our most significant foreign currency exposures related to the
Brazilian Real, Canadian Dollar and British Pound. We also use forward or option contracts to hedge
our investment in the net assets of certain international subsidiaries to offset foreign currency
51
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS - (CONTINUED)
translation adjustments related to our net investment in those subsidiaries. These foreign currency
contracts are sensitive to changes in foreign currency exchange rates. At December 31, 2021, a 10%
favorable or unfavorable exchange rate movement in each currency in our portfolio of foreign
currency contracts would have resulted in an incremental unrealized gain of approximately $357
million or loss of approximately $365 million, respectively. Consistent with the use of these contracts
to mitigate the effect of exchange rate fluctuations, such unrealized losses or gains would be offset
by corresponding gains or losses, respectively, in the re-measurement of the underlying exposures.
We enter into interest rate swap and cross-currency swap agreements to manage our exposure to
interest rate risk from probable long-term debt issuances or cross-currency debt. At December 31,
2021, a 100 basis point increase or decrease in interest rates would have resulted in an incremental
unrealized gain of approximately $53 million or unrealized loss of approximately $74 million,
respectively, related to these contracts.
We enter into commodity swap contracts to hedge the price risk associated with firmly committed
and forecasted commodities purchases, the prices of which are not fixed directly through supply
contracts. At December 31, 2021, a 10% favorable or unfavorable shift in commodity prices would
have resulted in an incremental gain or loss of approximately $26 million, respectively, related to
these contracts.
There is no material change to market risk exposure other than foreign exchange, which is
attributable to a change in the size of the derivative portfolio year over year. For additional
information, see Note 10 to the Consolidated Financial Statements.
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ITEM 8.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
TABLE OF CONTENTS
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Consolidated Statements of Income (Loss)
Consolidated Statements of Comprehensive Income (Loss)
Consolidated Balance Sheets
Consolidated Statements of Cash Flows
Consolidated Statements of Changes in Stockholders' Equity
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1.
2.
3.
4.
5.
6.
7.
8.
Significant Accounting Policies
Revenue Recognition
Leases
Cash, Cash Equivalents and Restricted Cash
Inventories
Goodwill and Other Intangibles
Financing Arrangements
Commitments and Contingencies
Pension and Other Postretirement Benefit Plans
9.
10. Hedges and Derivative Financial Instruments
11.
12.
13.
Fair Value Measurements
Stockholders' Equity
Share-Based Incentive Plans
14.
Restructuring Charges
Income Taxes
Segment Information
15.
16.
17. Divestitures
Report of independent Registered Public Accounting Firm (PCAOB ID: 42)
53
WHIRLPOOL CORPORATIONCONSOLIDATED STATEMENTS OF INCOME (LOSS)Year Ended December 31, (Millions of dollars, except per share data)202120202019Net sales$ 21,985 $ 19,456 $ 20,419 ExpensesCost of products sold 17,576 15,614 16,908 Gross margin 4,409 3,842 3,511 Selling, general and administrative 2,081 1,877 2,142 Intangible amortization 47 62 69 Restructuring costs 38 288 188 Impairment of goodwill and other intangibles — 7 — (Gain) loss on sale and disposal of businesses (105) (7) (437) Operating profit 2,348 1,615 1,549 Other (income) expenseInterest and sundry (income) expense (159) (21) (168) Interest expense 175 189 187 Earnings before income taxes 2,332 1,447 1,530 Income tax expense (benefit) 518 382 348 Equity method investment income (loss), net of tax (8) — — Net earnings 1,806 1,065 1,182 Less: Net earnings (loss) available to noncontrolling interests 23 (10) 14 Net earnings available to Whirlpool$ 1,783 $ 1,075 $ 1,168 Per share of common stockBasic net earnings available to Whirlpool$ 28.73 $ 17.15 $ 18.34 Diluted net earnings available to Whirlpool$ 28.36 $ 16.98 $ 18.19 Weighted-average shares outstanding (in millions)Basic62.162.763.7Diluted62.963.364.2The accompanying notes are an integral part of these Consolidated Financial Statements.54 WHIRLPOOL CORPORATIONCONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)Year Ended December 31, (Millions of dollars)202120202019Net earnings (loss)$ 1,806 $ 1,065 $ 1,182 Other comprehensive income (loss), before tax: Foreign currency translation adjustments 364 (385) 54 Derivative instruments: Net gain (loss) arising during period 282 (43) 71 Less: reclassification adjustment for gain (loss) included in net earnings (loss) 255 (126) 88 Derivative instruments, net 27 83 (17) Defined benefit pension and postretirement plans: Prior service (cost) credit arising during period — 156 9 Net gain (loss) arising during period 56 (78) (6) Less: amortization of prior service credit (cost) and actuarial (loss) (48) (93) (49) Defined benefit pension and postretirement plans, net 104 171 52 Other comprehensive income (loss), before tax 495 (131) 89 Income tax benefit (expense) related to items of other comprehensive income (loss) (41) (60) (12) Other comprehensive income (loss), net of tax$ 454 $ (191) $ 77 Comprehensive income (loss)$ 2,260 $ 874 $ 1,259 Less: comprehensive income (loss), available to noncontrolling interests 23 (8) 14 Comprehensive income (loss) available to Whirlpool$ 2,237 $ 882 $ 1,245 The accompanying notes are an integral part of these Consolidated Financial Statements.55 WHIRLPOOL CORPORATIONCONSOLIDATED BALANCE SHEETSAt December 31, (Millions of dollars)20212020AssetsCurrent assetsCash and cash equivalents$ 3,044 $ 2,924 Accounts receivable, net of allowance of $98 and $132, respectively 3,100 3,109 Inventories 2,717 2,301 Prepaid and other current assets 834 795 Total current assets 9,695 9,129 Property, net of accumulated depreciation of $6,619 and $6,780, respectively 2,805 3,199 Right of use assets 946 989 Goodwill 2,485 2,496 Other intangibles, net of accumulated amortization of $522 and $673, respectively 1,981 2,194 Deferred income taxes 1,920 2,189 Other noncurrent assets 453 240 Total assets$ 20,285 $ 20,436 Liabilities and stockholders' equityCurrent liabilitiesAccounts payable$ 5,413 $ 4,834 Accrued expenses 609 637 Accrued advertising and promotions 854 831 Employee compensation 576 648 Notes payable 10 12 Current maturities of long-term debt 298 298 Other current liabilities 750 1,070 Total current liabilities 8,510 8,330 Noncurrent liabilitiesLong-term debt 4,929 5,059 Pension benefits 378 516 Postretirement benefits 142 166 Lease liabilities 794 838 Other noncurrent liabilities 519 732 Total noncurrent liabilities 6,762 7,311 Stockholders' equityCommon stock, $1 par value, 250 million shares authorized, 114 million and 113 million shares issued, respectively, and 59 million and 63 million shares outstanding, respectively 114 113 Additional paid-in capital 3,025 2,923 Retained earnings 10,170 8,725 Accumulated other comprehensive loss (2,357) (2,811) Treasury stock, 55 million and 50 million shares, respectively (6,106) (5,065) Total Whirlpool stockholders' equity 4,846 3,885 Noncontrolling interests 167 910 Total stockholders' equity 5,013 4,795 Total liabilities and stockholders' equity$ 20,285 $ 20,436 The accompanying notes are an integral part of these Consolidated Financial Statements.56 WHIRLPOOL CORPORATIONCONSOLIDATED STATEMENTS OF CASH FLOWSYear Ended December 31, (Millions of dollars)202120202019Operating activitiesNet earnings$ 1,806 $ 1,065 $ 1,182 Adjustments to reconcile net earnings to cash provided by (used in) operating activities:Depreciation and amortization 494 568 587 Impairment of goodwill and other intangibles — 7 — (Gain) loss on sale and disposal of businesses (105) (7) (437) (Gain) loss on previously held equity interest (42) — — Changes in assets and liabilities:Accounts receivable (232) (940) (87) Inventories (648) 249 (17) Accounts payable 949 341 140 Accrued advertising and promotions 70 (123) 118 Accrued expenses and current liabilities 125 (287) 22 Taxes deferred and payable, net 130 154 (122) Accrued pension and postretirement benefits (116) (30) (81) Employee compensation 16 303 106 Other (271) 200 (181) Cash provided by (used in) operating activities 2,176 1,500 1,230 Investing activitiesCapital expenditures (525) (410) (532) Proceeds from sale of assets and businesses 302 166 1,174 Acquisition of businesses, net of cash acquired (46) — — Cash held by divested businesses (393) — — Other 2 7 (6) Cash provided by (used in) investing activities (660) (237) 636 Financing activitiesNet proceeds from borrowings of long-term debt 300 1,033 700 Net proceeds (repayments) of long-term debt (300) (569) (949) Net proceeds (repayments) from short-term borrowings (1) (330) (723) Dividends paid (338) (311) (305) Repurchase of common stock (1,041) (121) (148) Common stock issued 76 44 8 Other (35) 1 (7) Cash provided by (used in) financing activities (1,339) (253) (1,424) Effect of exchange rate changes on cash, cash equivalents and restricted cash (67) (28) (28) Increase (decrease) in cash, cash equivalents and restricted cash 110 982 414 Cash, cash equivalents and restricted cash at beginning of year 2,934 1,952 1,538 Cash, cash equivalents and restricted cash at end of period$ 3,044 $ 2,934 $ 1,952 Supplemental disclosure of cash flow informationCash paid for interest$ 169 $ 193 $ 194 Cash paid for income taxes$ 388 $ 229 $ 469 The accompanying notes are an integral part of these Consolidated Financial Statements.57 WHIRLPOOL CORPORATIONCONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITYYear ended December 31,(Millions of dollars) Whirlpool Stockholders' Equity TotalRetainedEarningsAccumulated Other Comprehensive Income (Loss)Treasury Stock/Additional Paid-In-CapitalCommonStockNon-ControllingInterestsBalances, December 31, 2018$ 3,313 $ 7,041 $ (2,695) $ (2,059) $ 112 $ 914 Comprehensive incomeNet earnings (loss) 1,182 1,168 — — — 14 Other comprehensive income (loss) 77 — 77 — — — Comprehensive income 1,259 1,168 77 — — 14 Adjustment to beginning retained earnings$ 61 $ 61 Stock issued (repurchased) (110) — — (110) — — Dividends declared (313) (308) — — — (5) Balances, December 31, 2019 4,210 7,962 (2,618) (2,169) 112 923 Comprehensive incomeNet earnings (loss) 1,065 1,075 — — — (10) Other comprehensive income (loss) (191) — (193) — — 2 Comprehensive income 874 1,075 (193) — — (8) Stock issued (repurchased) 28 — — 27 1 — Dividends declared (317) (312) — — — (5) Balances, December 31, 2020 4,795 8,725 (2,811) (2,142) 113 910 Comprehensive incomeNet earnings 1,806 1,783 — — — 23 Other comprehensive income (loss) 454 — 454 — — — Comprehensive income 2,260 1,783 454 — — 23 Stock issued (repurchased) (938) — — (939) 1 — Dividends declared (340) (338) — — — (2) Acquisitions and divestitures (764) — — — — (764) Balances, December 31, 2021$ 5,013 $ 10,170 $ (2,357) $ (3,081) $ 114 $ 167 The accompanying notes are an integral part of these Consolidated Financial Statements.58 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(1) SIGNIFICANT ACCOUNTING POLICIES General InformationWhirlpool Corporation, a Delaware corporation, manufactures products in 10 countries and markets products in nearly every country around the world under brand names such as Whirlpool, KitchenAid, Maytag, Consul, Brastemp, Amana, Bauknecht, JennAir, Indesit, Yummly and Hotpoint*. We conduct our business through four operating segments, which we define based on geography. Whirlpool Corporation's operating and reportable segments consist of North America; Europe, Middle East and Africa ("EMEA"); Latin America and Asia. Principles of Consolidation The consolidated financial statements are prepared in conformity with GAAP, and include all majority-owned subsidiaries. All material intercompany transactions have been eliminated upon consolidation. We do not consolidate the financial statements of any company in which we have an ownership interest of 50% or less, unless that company is deemed to be a variable interest entity ("VIE") of which we are the primary beneficiary. VIEs are consolidated when the company is the primary beneficiary of these entities and has the ability to directly impact the activities of these entities. Our primary business purpose and involvement with VIEs is for product development and distribution. Risks and UncertaintiesThe Consolidated Financial Statements presented herein reflect estimates and assumptions made by management at December 31, 2021 and for the twelve months ended December 31, 2021.Such estimates and assumptions affect, among other things, the Company’s goodwill, long-lived asset and indefinite-lived intangible asset valuation; inventory valuation; valuation of deferred income taxes and income tax contingencies; and the allowance for expected credit losses and bad debt. Events and changes in circumstances arising after February 10, 2022, including those resulting from the impacts of COVID-19 pandemic or other macroeconomic factors, will be reflected in management’s estimates for future periods.Goodwill and indefinite-lived intangible assetsWe continue to monitor the significant global economic uncertainty to assess the outlook for demand for our products and the impact on our business and our overall financial performance. The Maytag trademark continues to be at risk at December 31, 2021. The goodwill in any of our reporting units or other indefinite-lived intangible assets are not presently at risk for future impairment.The potential impact of demand disruptions, production impacts or supply constraints along with a number of other factors could negatively effect revenues for the Maytag trademark, but we remain committed to the strategic actions necessary to realize the long-term forecasted profitability and recover from the supply constraints.A lack of recovery or further deterioration in market conditions, a sustained trend of weaker than expected financial performance in our Maytag trademark, among other factors, as a result of the COVID-19 pandemic, other macroeconomic factors or other unforeseen events could result in an impairment charge in future periods which could have a material adverse effect on our financial statements.*Whirlpool ownership of the Hotpoint brand in the EMEA and Asia Pacific regions is not affiliated with the Hotpoint brand sold in the Americas.59 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
Use of Estimates
We are required to make estimates and assumptions that affect the amounts reported in the
Consolidated Financial Statements and accompanying Notes. The most significant assumptions are
estimates in determining the fair value of goodwill and indefinite-lived intangible assets, legal
contingencies, income taxes and pension and other postretirement benefits. Actual results could
differ materially from those estimates.
Revenue Recognition
Revenue is recognized when performance obligations under the terms of a contract with our
customers are satisfied, the sales price is determinable, and the risk and rewards of ownership are
transferred. Generally the risk and rewards of ownership are transferred with the transfer of control
of our products and services. For the majority of our sales, control is transferred to the customer as
soon as products are shipped. For a portion of our sales, control is transferred to the customer upon
receipt of products at the customer's location. Sales are net of allowances for product returns, which
are based on historical return rates and certain promotions. See Note 2 to the Consolidated
Financial Statements for additional information.
Sales Incentives
The cost of sales incentives is accrued at the date at which revenue is recognized by Whirlpool as a
reduction of revenue. If new incentives are added after the product has been shipped, then they are
accrued at that time, also as a reduction of revenue. These accrued promotions are recognized
based on the expected value amount of incentives that will be ultimately claimed by trade
customers or consumers. The expected value is the sum of probability-weighted amounts in a range
of possible consideration amounts. If the amount of incentives cannot be reasonably estimated, an
accrued promotion liability is recognized for the maximum potential amount. See Note 2 to the
Consolidated Financial Statements for additional information.
Accounts Receivable and Allowance for Expected Credit Losses
We carry accounts receivable at sales value less an allowance for expected credit losses. We
estimate our expected credit losses primarily by using an aging methodology and establish
customer-specific reserves for higher risk trade customers. Our expected credit losses are evaluated
and controlled within each geographic region considering the unique credit risk specific to the
country, marketplace and economic environment. We take into account a combination of specific
customer circumstances, credit conditions, market conditions, reasonable and supportable forecasts
of future economic conditions and the history of write-offs and collections in developing the reserve.
The adoption of the new credit loss standard did not have a material impact on the Consolidated
Financial Statements. We evaluate items on an individual basis when determining accounts
receivable write-offs. In general, our policy is to not charge interest on trade receivables after the
invoice becomes past due. A receivable is considered past due if payment has not been received
within agreed upon invoice terms.
Transfers and Servicing of Financial Assets
In an effort to manage economic and geographic trade customer risk, from time to time, the
Company will transfer, primarily without recourse, accounts receivable balances of certain
customers to financial institutions resulting in a nominal impact recorded in interest and sundry
(income) expense. These transactions are accounted for as sales of the receivables resulting in the
receivables being de-recognized from the Consolidated Balance Sheets. These transfers do not
require continuing involvement from the Company.
Certain arrangements include servicing of transferred receivables by Whirlpool. Under these
arrangements the Company received cash proceeds of $594 million during the twelve months ended
December 31, 2020. The amount of cash proceeds received were immaterial for the twelve months
ended December 31, 2021. Outstanding accounts receivable transferred under arrangements where
the Company continues to service the transferred asset were $30 million as of December 31, 2020.
These amounts were not material as of December 31, 2021.
60
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
Freight and Warehousing Costs
We classify freight and warehousing costs within cost of products sold in our Consolidated
Statements of Income (Loss).
Cash and Cash Equivalents
All highly liquid debt instruments purchased with an initial maturity of three months or less are
considered cash equivalents. Short-term investments are primarily comprised of money market
funds and highly liquid, low risk investments with initial maturities less than 90 days. See Note 11 to
the Consolidated Financial Statements for additional information.
Fair Value Measurements
We measure fair value based on an exit price, representing the amount that would be received to
sell an asset or paid to transfer a liability in an orderly transaction between market participants. As
such, fair value is a market-based measurement that should be determined based on assumptions
that market participants would use in pricing an asset or liability. As a basis for considering such
assumptions, a three-tiered fair value hierarchy is established, which prioritizes the inputs used in
measuring fair value as follows: (Level 1) observable inputs such as quoted prices in active markets;
(Level 2) inputs, other than the quoted prices in active markets that are observable, either directly or
indirectly; and (Level 3) unobservable inputs in which there is little or no market data, which require
the reporting entity to develop its own assumptions. Certain investments are valued based on net
asset value (NAV), which approximates fair value. Such basis is determined by referencing the
respective fund's underlying assets. There are no unfunded commitments or other restrictions
associated with these investments. We had Level 3 assets at December 31, 2021 and 2020 that
included pension plan assets disclosed in Note 9 to the Consolidated Financial Statements. We had
no Level 3 liabilities at December 31, 2021 and 2020, respectively.
We measured fair value for money market funds, available for sale investments and held-to-maturity
securities using quoted market prices in active markets for identical or comparable assets. We
measured fair value for derivative contracts, all of which have counterparties with high credit ratings,
based on model driven valuations using significant inputs derived from observable market data. We
also measured fair value for disposal groups held for sale based on the expected proceeds received
from the sale. For assets measured at net asset values, we have no unfunded commitments or
significant restraints. We measured fair value (non-recurring) for goodwill and other intangibles
using a discounted cash flow model and a relief-from-royalty method, respectively, with inputs
based on both observable and unobservable market data.
Inventories
North America and EMEA reporting segments use the FIFO method of inventory valuation. Latin
America and Asia inventories are stated at average cost. Costs include materials, labor and
production overhead at normal production capacity. Costs do not exceed net realizable values.
Property
Property is stated at cost, net of accumulated depreciation. For production machinery and
equipment, we record depreciation based on units produced, unless units produced drop below a
minimum threshold at which point depreciation is recorded using the straight-line method,
excluding property acquired from the Hefei Sanyo (subsequently "Whirlpool China") acquisition and
certain property acquired from the Indesit acquisition in 2014. For certain production assets
acquired from Indesit, we depreciate costs based on the straight-line method.
Property, plant and equipment and related accumulated depreciation of divested businesses have
been removed in 2021. For additional information, see Note 17 to the Consolidated Financial
Statements.
Depreciation expense for property, including accelerated depreciation classified as restructuring
expense in our Consolidated Statements of Income (Loss), was $447 million, $506 million and $518
million in 2021, 2020 and 2019, respectively.
61
The following table summarizes our property at December 31, 2021 and 2020:Millions of dollars20212020Estimated Useful LifeLand$ 84 $ 92 n/aBuildings 1,249 1,517 10 to 50 yearsMachinery and equipment 8,091 8,370 3 to 20 yearsAccumulated depreciation (6,619) (6,780) Property plant and equipment, net (1)$ 2,805 $ 3,199 (1) Decrease of $379 million in property, plant and equipment, net, is due to the deconsolidation of Whirlpool China and divestment of Turkey manufacturing entity. For additional information, see Note 17 to the Consolidated Financial Statements.We classify gains and losses associated with asset dispositions in the same line item as the underlying depreciation of the disposed asset in the Consolidated Statements of Income (Loss). During the twelve months ended December 31, 2021, we disposed of buildings, machinery and equipment with a net book value of $17 million, compared to $25 million in prior year. The net gain on the other disposals were not material in 2021 or 2020.During the twelve months ended December 31, 2020, we also retired land and buildings related to a sale-leaseback transaction and machinery and equipment with a net book value of approximately $26 million that was no longer in use. During 2020, we recognized a gain of $113 million in cost of products sold ($74 million) and selling, general and administrative ($39 million) primarily related to the sale-leaseback transaction in the fourth quarter of 2020. We record impairment losses on long-lived assets, excluding goodwill and indefinite-lived intangibles, when events and circumstances indicate the assets may be impaired and the estimated undiscounted future cash flows generated by those assets are less than their carrying amounts. There were no significant impairments recorded during 2021, 2020 and 2019.LeasesWe determine if an arrangement contains a lease at contract inception and determine the lease term by assuming the exercise of those renewal options that are reasonably assured. Leases with an initial term of 12 months or less are not recorded in the Consolidated Balance Sheets and we recognize lease expense for these leases on a straight-line basis over the lease term. We elect to not separate lease and non-lease components for all leases.As the Company's lease agreements normally do not provide an implicit interest rate, we apply the Company's incremental borrowing rate based on the information available at commencement date in determining the present value of future lease payments. Relevant information used in determining the Company's incremental borrowing rate includes the duration of the lease, location of the lease, and the Company's credit risk relative to risk-free market rates.Certain leases also include options to purchase the underlying asset at fair market value. If leased assets have leasehold improvements, typically the depreciable life of those leasehold improvements are limited by the expected lease term. Additionally, certain lease agreements include lease payment adjustments for inflation.Sale-leaseback transactionsThere were no material sale-lease back transactions in 2021. In the fourth quarter of 2020, the Company sold and leased back a group of non-core properties for net proceeds of approximately $139 million. The initial total annual rent for the properties is approximately $10 million per year over an initial 14 year lease term and is subject to annual rent increases. Under the terms of the lease agreement, the Company is responsible for all taxes, insurance and utilities and is required to adequately maintain the properties for the lease term. The Company has four sequential five-year renewal options.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)62 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
The transaction met the requirements for sale-leaseback accounting. Accordingly, the Company
recorded the sale of the properties, which resulted in a gain of approximately $113 million
($89 million, net of tax) recorded in cost of products sold ($74 million) and selling, general and
administrative expense ($39 million) in the Consolidated Statements of Income (Loss). The related
land and buildings were removed from property, plant and equipment, net and the appropriate
right-of-use asset and lease liabilities of approximately $128 million were recorded in the
Consolidated Balance Sheets.
In the fourth quarter of 2019, the Company sold and leased back a group of non-core properties for
net proceeds of approximately $140 million. The initial total annual rent for the properties is
approximately $10 million per year over an initial 12 year lease term and is subject to annual rent
increases. Under the terms of the lease agreement, the Company is responsible for all taxes,
insurance and utilities and is required to adequately maintain the properties for the lease term. The
Company has five sequential five-year renewal options.
The transaction met the requirements for sale-leaseback accounting. Accordingly, the Company
recorded the sale of the properties, which resulted in a gain of approximately $111 million ($88
million, net of tax) recorded in cost of products sold ($95 million) and selling, general and
administrative expense ($16 million) in the Consolidated Statements of Income (Loss). The related
land and buildings were removed from property, plant and equipment, net and the appropriate
right-of-use asset and lease liabilities of approximately $108 million were recorded in the
Consolidated Balance Sheets.
Goodwill and Other Intangibles
We perform our annual impairment assessment for goodwill and indefinite-lived intangible assets as
of October 1st and more frequently if indicators of impairment exist. We consider qualitative factors
to assess if it is more likely than not that the fair value for goodwill or indefinite-lived intangible
assets is below the carrying amount. We may also elect to bypass the qualitative assessment and
perform a quantitative assessment.
In conducting a qualitative assessment, the Company analyzes a variety of events or factors that
may influence the fair value of the reporting unit or indefinite-lived intangible asset, including, but
not limited to: macroeconomic conditions, industry and market considerations, cost factors, overall
financial performance, share price and other relevant factors.
Goodwill
We have four reporting units for which we assess for impairment which also represent our operating
segments and are defined as North America, EMEA, Latin America and Asia. In performing a
quantitative assessment of goodwill, we estimate each reporting unit's fair value using the best
information available to us, including market information and discounted cash flow projections, also
referred to as the income approach. The income approach uses the reporting unit's projections of
estimated operating results and cash flows that are discounted using a market participant discount
rate based on a weighted-average cost of capital. Additionally, we validate our estimates of fair value
under the income approach by comparing the values to fair value estimates using a market
approach.
There was no impairment of goodwill in 2021, 2020 and 2019. See Note 6 and Note 11 to the
Consolidated Financial Statements for additional information about goodwill.
Intangible Assets
We perform a quantitative assessment of other indefinite-lived intangible assets, which are primarily
comprised of trademarks. We estimate the fair value of these intangible assets using the relief-from-
royalty method, which primarily requires assumptions related to projected revenues from our long-
range plan, assumed royalty rates that could be payable if we did not own the trademark, and a
market participant discount rate based on a weighted-average cost of capital.
Other definite-life intangible assets are amortized over their useful life and are assessed for
impairment when impairment indicators are present.
63
There was no impairment on other intangibles in 2021. We recorded an immaterial impairment charge on other intangibles in 2020. There was no impairment on other intangibles in 2019. See Note 6 and Note 11 to the Consolidated Financial Statements for additional information about other intangibles.Supply Chain Financing ArrangementsThe Company has ongoing agreements globally with various third-parties to allow certain suppliers the opportunity to sell receivables due from us to participating financial institutions at the sole discretion of both the suppliers and the financial institutions. We have no economic interest in the sale of these receivables and no direct financial relationship with the financial institutions concerning these services. Our obligations to suppliers, including amounts due and scheduled payment terms, are not impacted. All outstanding balances under these programs are recorded in accounts payable on our Consolidated Balance Sheets. At December 31, 2021 and 2020, approximately $1.4 billion and $1.2 billion, respectively, have been issued to participating financial institutions. A downgrade in our credit rating or changes in the financial markets could limit the financial institutions’ willingness to commit funds to, and participate in, the programs. We do not believe such risk would have a material impact on our working capital or cash flows.Due to the completed partial tender offer for Whirlpool China and subsequent deconsolidation of the subsidiary during the second quarter of 2021, we no longer have material supply chain financing arrangements in China. For additional information see Note 17 to the Consolidated Financial Statements.Derivative Financial InstrumentsWe use derivative instruments designated as cash flow, fair value and net investment hedges to manage our exposure to the volatility in material costs, foreign currency and interest rates on certain debt instruments. Changes in the fair value of derivative assets or liabilities (i.e., gains or losses) are recognized depending upon the type of hedging relationship and whether a hedge has been designated. For those derivative instruments that qualify for hedge accounting, we designate the hedging instrument, based upon the exposure being hedged, as a cash flow hedge, fair value hedge, or a hedge of a net investment in a foreign operation. For a derivative instrument designated as a fair value hedge, the gain or loss on the derivative is recognized in earnings immediately with the offsetting gain or loss on the hedged item. For a derivative instrument designated as a cash flow hedge, the effective portion of the derivative's gain or loss is initially reported as a component of Other Comprehensive Income (Loss) and is subsequently recognized in earnings when the hedged exposure affects earnings. For a derivative instrument designated as a hedge of a net investment in a foreign operation, the effective portion of the derivative's gain or loss is reported in Other Comprehensive Income (Loss) as part of the cumulative translation adjustment. Changes in fair value of derivative instruments that do not qualify for hedge accounting are recognized immediately in current net earnings. See Note 10 to the Consolidated Financial Statements for additional information about hedges and derivative financial instruments.Foreign Currency Translation and TransactionsForeign currency denominated assets and liabilities are translated into United States dollars at exchange rates existing at the respective balance sheet dates. Translation adjustments resulting from fluctuations in exchange rates are recorded as a separate component of Accumulated Other Comprehensive Income (Loss). The results of operations of foreign subsidiaries are translated at the average exchange rates during the respective periods. Gains and losses resulting from foreign currency transactions are included in net earnings.Research and Development CostsResearch and development costs are charged to expense and totaled $485 million, $455 million and $541 million in 2021, 2020 and 2019, respectively.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)64 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
Advertising Costs
Advertising costs are charged to expense when the advertisement is first communicated and totaled
$345 million, $273 million and $335 million in 2021, 2020 and 2019, respectively.
Income Taxes and Indirect Tax Matters
We account for income taxes using the asset and liability method. Under this method, deferred tax
assets and liabilities are recognized for the future tax consequences of temporary differences
between the financial statement and tax basis of assets and liabilities using enacted rates. The effect
of a change in tax rates on deferred tax assets is recognized in income in the period of the
enactment date.
We recognize, primarily in other noncurrent liabilities, in the Consolidated Balance Sheets, the
effects of uncertain income tax positions. Interest and penalties related to uncertain tax positions
are reflected in income tax expense. We record liabilities, net of the amount, after determining it is
more likely than not that the uncertain tax position will not be sustained upon examination based
on its technical merits. We accrue for indirect tax contingencies when we determine that a loss is
probable and the amount or range of loss is reasonably estimable.
Provision is made for taxes on undistributed earnings of foreign subsidiaries and related companies
to the extent that such earnings are not deemed to be permanently invested.
See Note 15 to the Consolidated Financial Statements for additional information.
Stock Based Compensation
Stock based compensation expense is based on the grant date fair value and is expensed over the
period during which an employee is required to provide service in exchange for the award (generally
the vesting period). The Company's stock based compensation includes stock options, performance
stock units, and restricted stock units, among other award types. The fair value of stock options are
determined using the Black-Scholes option-pricing model, which
incorporates assumptions
regarding the risk-free interest rate, expected volatility, expected option life, expected forfeitures
and dividend yield. Expected forfeitures are based on historical experience. Stock options are
granted with an exercise price equal to the closing stock price on the date of grant. The fair value of
restricted stock units and performance stock units is generally based on the closing market price of
Whirlpool common stock on the grant date. Stock based compensation is recorded in selling,
general and administrative expense on our Consolidated Statements of Income (Loss). See Note 13
to the Consolidated Financial Statements for additional information.
Out-of-Period Adjustment
During the third quarter of 2019, we recorded a net adjustment of $34 million related to prior years
resulting from the one time transition tax deemed repatriation on earnings of certain foreign
subsidiaries that were previously tax deferred and related impacts. This adjustment resulted in a
decrease of net earnings available to Whirlpool of $34 million and a decrease of $0.53 in diluted
earnings per share. The Company determined the impact was immaterial to prior periods and is not
material to the Consolidated Statements of Income (Loss) for the year ended December 31, 2019.
Equity Method Investments
After May 6, 2021, Whirlpool holds an equity interest of approximately 20% in Whirlpool China, an
entity which was previously controlled by the Company. We account for the remaining interest
under equity method accounting and Whirlpool China and its subsidiaries continue to supply the
Company in the normal course of business. Whirlpool China was also granted a license to sell
Whirlpool-branded products in China.
Subsequent to the completion of the partial tender offer for Whirlpool China and deconsolidation of
the entity in the second quarter of 2021, we made purchases from Whirlpool China of $290 million
for the twelve months ended December 31, 2021. The outstanding amount due to Whirlpool China
and its subsidiaries is $137 million as of December 31, 2021. The licensing revenue and outstanding
65
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
accounts receivable from Whirlpool China and its subsidiaries are not material for the periods
presented.
As of December 31, 2021, the carrying value of the equity interest in Whirlpool China is $206 million
and is included in Other noncurrent assets in the Consolidated Balance Sheet.
The Company’s share of the results of equity method investments and elimination of intra-entity
results are included in the Equity method investment income (loss), net of tax in the Consolidated
Income Statement and Other noncurrent assets in the Consolidated Balance Sheet. The impact of
equity method investments is not material for the periods presented.
For additional information, see Note 17 to the Consolidated Financial Statements.
Related Party Transaction
In 2018, Whirlpool of India Limited ("Whirlpool India"), a majority-owned subsidiary of Whirlpool
Corporation, acquired a 49% equity interest in Elica PB India for $22 million. On September 27, 2021,
Whirlpool India entered into a share purchase agreement to acquire an additional 38% equity
interest in Elica PB India for $57 million, which resulted in a controlling equity ownership of 87%.
Following the closing of the transaction on September 29, 2021, Elica PB India is consolidated in
Whirlpool Corporation's financial statements and is reported within our Asia reportable segment.
The transaction resulted in a gain of approximately $42 million on the Company’s previously held
equity interest. This gain was recorded within Interest and sundry (income) expense during the third
quarter of 2021.
The Company has finalized the independent appraisal for the purpose of allocating the purchase
price to the individual assets acquired and liabilities assumed in the acquisition during the fourth
quarter of 2021. This resulted in adjustments to the carrying values of recorded assets and liabilities,
and the determination of residual amounts allocated to goodwill. The final allocation of the
purchase prices included in the current period balance sheet is based on the final determination of
asset fair values. Goodwill of $100 million, which is not deductible for tax purposes, has been
allocated to the Asia reportable segment. The allocation has been made on the basis that the
anticipated synergies identified will primarily benefit this reportable segment.
Elica PB India is a VIE for which the Company is the primary beneficiary. The carrying amount of
customer relationships, which are included in Other intangible assets, net of accumulated
amortization, amounts to $36 million. Other assets or liabilities of Elica PB India are not material to
the Consolidated Financial Statements of the Company.
Both Whirlpool India and the non-controlling interest shareholders retain an option for Whirlpool
India to purchase the remaining equity interest in Elica PB India for fair value, which could be
material to the financial statements of the Company, depending on the performance of the
business.
In the third quarter of 2019, we sold our 12.54% ownership interest in Elica S.p.A. for a nominal
amount.
Adoption of New Accounting Standards
On January 1, 2021 we adopted the following standards, which did not have a material impact on our
Consolidated Financial Statements:
Standard
Effective Date
2019-12
Income Taxes (Topic 740) - Simplifying the Accounting for Income Taxes
January 1, 2021
Accounting Pronouncements Issued But Not Yet Effective
In March 2020, the FASB issued Update 2020-04, "Reference Rate Reform (Topic 848): Facilitation of
the Effects of Reference Rate Reform on Financial Reporting". The amendments in Update 2020-04
are elective and apply to all entities that have contracts, hedging relationships, and other
transactions that reference LIBOR or another reference rate expected to be discontinued due to
reference rate reform. The new guidance provides the following optional expedients: simplify
66
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
accounting analyses under current U.S. GAAP for contract modifications, simplify the assessment of
hedge effectiveness, allow hedging relationships affected by reference rate reform to continue and
allow a one-time election to sell or transfer debt securities classified as held to maturity that
reference a rate affected by reference rate reform. In January 2021, the FASB issued Update
2021-01, "Reference Rate Reform (Topic 848): Scope". The update provides additional optional
guidance on the transition from LIBOR to include derivative instruments that use an interest rate for
margining, discounting or contract price alignment. The standard will ease, if warranted, the
requirements for accounting for the future effects of the rate reform. An entity may elect to apply
the amendments prospectively through December 31, 2022. The standard is not expected to have a
material impact on our Consolidated Financial Statements.
The FASB has issued the following relevant standards, which are not expected to have a material
impact on our Consolidated Financial Statements:
Standard
2021-10
Government Assistance (Topic 832) - Disclosures by Business Entities about
Government Assistance
Effective Date
January 1, 2022
All other issued and not yet effective accounting standards are not relevant to the Company.
(2) REVENUE RECOGNITION
Revenue from Contracts with Customers
In accordance with Topic 606, revenue is recognized when performance obligations under the terms
of a contract with our customer are satisfied; generally this occurs with the transfer of control of our
products or services. Revenue is measured as the amount of consideration we expect to receive in
exchange for transferring products or providing services. Certain customers may receive cash and/
or non-cash incentives, which are accounted for as variable consideration. To achieve the core
principle, the Company applies the following five steps:
1. Identify the contract with a customer
A contract with a customer exists when (i) the Company enters into an agreement with a customer
that defines each party's rights regarding the products or services to be transferred and identifies
the payment terms related to these products or services, (ii) both parties to the contract are
committed to perform their respective obligations, (iii) the contract has commercial substance, and
(iv) the Company determines that collection of substantially all consideration for products or
services that are transferred is probable based on the customer's intent and ability to pay the
promised consideration. The Company applies judgment in determining the customer's ability and
intention to pay, which is based on a variety of factors including the customer's payment history or,
in the case of a new customer, published credit and financial information pertaining to the
customer.
2. Identify the performance obligations in the contract
Performance obligations promised in a contract are identified based on the products or services that
will be transferred to the customer that are both capable of being distinct, whereby the customer
can benefit from the product or service either on its own or together with other resources that are
readily available from third parties or from the Company, and are distinct in the context of the
contract, whereby the transfer of the products or services is separately identifiable from other
promises in the contract. To the extent a contract includes multiple promised products or services,
the Company must apply judgment to determine whether promised products or services are
capable of being distinct and distinct in the context of the contract. If these criteria are not met, the
promised products or services are accounted for as a combined performance obligation. The
Company has elected to account for shipping and handling activities as a fulfillment cost as
permitted by the standard.
67
3. Determine the transaction priceThe transaction price is determined based on the consideration to which the Company will be entitled in exchange for transferring products or services to the customer. To the extent the transaction price is variable, revenue is recognized at an amount equal to the consideration to which the Company expects to be entitled. This estimate includes customer sales incentives which are accounted for as a reduction to revenue and estimated primarily using the expected value method. Determining the transaction price requires significant judgment, which is discussed by revenue category in further detail below.In practice, we do not offer extended payment terms beyond one year to customers. As such, we do not adjust our consideration for financing arrangements.4. Allocate the transaction price to performance obligations in the contractIf the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation based on a relative standalone selling price basis unless a portion of the variable consideration related to the contract is allocated entirely to a performance obligation. The Company determines standalone selling price based on the price at which the performance obligation is sold separately.5. Recognize revenue when or as the Company satisfies a performance obligationThe Company generally satisfies performance obligations at a point in time. Revenue is recognized based on the transaction price at the time the related performance obligation is satisfied by transferring a promised product or service to a customer. The impact to revenue related to prior period performance obligations is less than 1% of global consolidated revenues for the twelve months ended December 31, 2021 and 2020, respectively.Disaggregation of RevenueThe following table presents our disaggregated revenues by revenue source. We sell products within all major product categories in each operating segment. For additional information on the disaggregated revenues by geographical regions, see Note 16 to the Consolidated Financial Statements.Twelve months endedMillions of dollars20212020Major product categories:Laundry$ 6,122 $ 5,675 Refrigeration 6,677 6,058 Cooking 5,639 4,782 Dishwashing 1,890 1,605 Total major product category net sales $ 20,327 $ 18,120 Spare parts and warranties 1,187 913 Other 470 423 Total net sales$ 21,985 $ 19,456 The impact to revenue related to prior period performance obligations is less than 1% of global consolidated revenues for the twelve months ended December 31, 2021. Major Product Category SalesWhirlpool Corporation manufactures and markets a full line of home appliances and related products and services. Our major product categories include the following: refrigeration, laundry, NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)68 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
cooking, and dishwashing. The refrigeration product category includes refrigerators, freezers, ice
makers and refrigerator water filters. The laundry product category includes laundry appliances,
commercial laundry products and related laundry accessories. The cooking category includes
cooking appliances and other small domestic appliances. The dishwashing product category includes
dishwasher appliances and related accessories.
For product sales, we transfer control and recognize a sale when we ship the product from our
manufacturing facility to our customer or when the customer receives the product based upon
agreed shipping terms. Each unit sold is considered an independent, unbundled performance
obligation. We do not have any additional performance obligations other than product sales that are
material in the context of the contract. The amount of consideration we receive and revenue we
recognize varies due to sales incentives and returns we offer to our customers. When we give our
customers the right to return eligible products, we reduce revenue for our estimate of the expected
returns which is primarily based on an analysis of historical experience.
Spare Parts & Warranties
Spare parts are primarily sold to parts distributors and retailers, with a small number of sales to end
consumers. For spare part sales, we transfer control and recognize a sale when we ship the product
to our customer or when the customer receives product based upon agreed shipping terms. Each
unit sold is considered an independent, unbundled performance obligation. We do not have any
additional performance obligations other than spare part sales that are material in the context of
the contract. The amount of consideration we receive and revenue we recognize varies due to sales
incentives and returns we offer to our customers. When we give our customers the right to return
eligible products, we reduce revenue for our estimate of the expected returns which is primarily
based on an analysis of historical experience.
Warranties are classified as either assurance type or service type warranties. A warranty is
considered an assurance type warranty if it provides the consumer with assurance that the product
will function as intended. A warranty that goes above and beyond ensuring basic functionality is
considered a service type warranty. The Company offers certain limited warranties that are
assurance type warranties and extended service arrangements that are service type warranties.
Assurance type warranties are not accounted for as separate performance obligations under the
revenue model. If a service type warranty is sold with a product or separately, revenue is recognized
over the life of the warranty. The Company evaluates warranty offerings in comparison to industry
standards and market expectations to determine appropriate warranty classification. Industry
standards and market expectations are determined by jurisdictional laws, competitor offerings and
customer expectations. Market expectations and industry standards can vary based on product type
and geography. The Company primarily offers assurance type warranties.
Whirlpool sells certain extended service arrangements separately from the sale of products.
Whirlpool acts as a sales agent under some of these arrangements whereby the Company receives a
fee that is recognized as revenue upon the sale of the extended service arrangement. The Company
is also the principal for certain extended service arrangements. Revenue related to these
arrangements is recognized ratably over the contract term.
Other Revenue
Other revenue sources include subscription arrangements and licenses as described below.
The Company has a water subscription business in our Latin America segment which provides the
consumer with a water filtration system that is delivered to the consumer's home. Our water
subscription contracts represent a performance obligation that is satisfied over time and revenue is
recognized as the performance obligation is completed. The installation and maintenance of the
water filtration system are not distinct services in the context of the contract (i.e. the customer views
all activities associated with the arrangement as one singular value proposition). The contract term is
generally less than one year for these arrangements and revenue is recognized based on the
69
monthly invoiced amount which directly corresponds to the value of our performance completed to date.We license our brands in arrangements that do not include other performance obligations. Whirlpool licensing provides a right of access to the Company's intellectual property throughout the license period. Whirlpool recognizes licensing revenue over the life of the license contract as the underlying sale or usage occurs. As a result, we recognize revenue for these contracts at the amount which directly corresponds to the value provided to the customer.Costs to Obtain or Fulfill a ContractWe do not capitalize costs to obtain a contract because a nominal number of contracts have terms that extend beyond one year. The Company does not have a significant amount of capitalized costs related to fulfillment.Sales Tax and Indirect TaxesThe Company is subject to certain indirect taxes in certain jurisdictions including but not limited to sales tax, value added tax, excise tax and other taxes we collect concurrent with revenue-producing activities that are excluded from the transaction price, and therefore, excluded from revenue.Allowance for Expected Credit Losses and Bad Debt ExpenseWe estimate our expected credit losses primarily by using an aging methodology and establish customer-specific reserves for higher risk trade customers. Our expected credit losses are evaluated and controlled within each geographic region considering the unique credit risk specific to the country, marketplace and economic environment. We take into account past events, current conditions and reasonable and supportable forecasts in developing the reserve. The adoption of the new credit loss standard as of January 1, 2020 did not have a material impact on the Consolidated Financial Statements. The following table summarizes our allowance for doubtful accounts by operating segment for the twelve months ended December 31, 2021. Millions of dollarsDecember 31, 2020Charged to EarningsWrite-offsForeign CurrencyOther (1)December 31, 2021Accounts receivable allowanceNorth America$ 7 $ 3 $ (3) $ — $ — $ 7 EMEA 67 — (16) (6) — 45 Latin America 44 3 (3) (1) — 43 Asia 14 — — — (11) 3 $ 132 $ 6 $ (22) $ (7) $ (11) $ 98 Financing receivable allowanceLatin America$ 27 $ — $ — $ (2) $ — $ 25 Asia 21 — — — (21) — $ 48 $ — $ — $ (2) $ (21) $ 25 Consolidated$ 180 $ 6 $ (22) $ (9) $ (32) $ 123 (1)Accounts receivable and financing receivable allowance of Whirlpool China which were previously classified under accounts receivable and noncurrent assets, respectively, have been removed as part of the deconsolidation of Whirlpool China during the second quarter. For additional information, see Note 17 to the Consolidated Financial Statements.We recorded an immaterial amount of bad debt expense for the years ended December 31, 2021 and 2020, respectively.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)70 (3) LEASES Leases We lease certain manufacturing facilities, warehouses/distribution centers, office space, land, vehicles, and equipment. At lease inception, we determine the lease term by assuming the exercise of those renewal options that are reasonably assured. Leases with an initial term of 12 months or less are not recorded in the Consolidated Balance Sheets and we recognize lease expense for these leases on a straight-line basis over the lease term. The Company had operating lease costs of approximately $234 million and $236 million for the years ended December 31, 2021 and December 31, 2020, respectively.Non-cancelable operating lease commitments that had not yet commenced were $69 million and $49 million for the periods ended December 31, 2021 and December 31, 2020, respectively. These operating leases are expected to commence before the end of fiscal year 2023 with lease terms of up to 10 years. At December 31, 2021 and 2020, we have no material leases classified as financing leases. We have approximately $1.1 billion of non-cancellable operating lease commitments, excluding variable consideration at December 31, 2021 and $1.2 billion at December 31, 2020. The undiscounted annual future minimum lease payments are summarized by year in the table below:Maturity of Lease LiabilitiesOperating Leases(in millions)2022$ 212 2023 184 2024 156 2025 122 2026 108 Thereafter 359 Total lease payments$ 1,141 Less: interest 171 Present value of lease liabilities 970 The long-term portion of the lease liabilities included in the amounts above is $794 million as of December 31, 2021. The remainder of our lease liabilities are included in other current liabilities in the Consolidated Balance Sheets.At December 31, 2021 and December 31, 2020, the weighted average remaining lease term and weighted average discount rate for operating leases was 7 years and 5% and 8 years and 4%, respectively. During the year ended December 31, 2021 the cash paid for amounts included in the measurement of the liabilities and the operating cash flows was $233 million. The right of use assets obtained in exchange for new liabilities was $179 million partially offset by $40 million in terminations for the year ended December 31, 2021.During the year ended December 31, 2020 the cash paid for amounts included in the measurement of the liabilities and the operating cash flows was $234 million. The right of use assets obtained in exchange for new liabilities was $315 million partially offset by $68 million in terminations for the year ended December 31, 2020. As the Company's lease agreements normally do not provide an implicit interest rate, we apply the Company's incremental borrowing rate based on the information available at commencement date in determining the present value of future lease payments. Relevant information used in determining the Company's incremental borrowing rate includes the duration of the lease, location of the lease, and the Company's credit risk relative to risk-free market rates.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)71 Many of our leases include renewal options that can extend the lease term. The execution of those renewal options is at our sole discretion and reflected in the lease term when they are reasonably certain to be exercised.Certain leases also include options to purchase the underlying asset at fair market value. If leased assets have leasehold improvements, typically the depreciable life of those leasehold improvements are limited by the expected lease term. Additionally, certain lease agreements include lease payment adjustments for inflation.Our lease agreements do not contain any material residual value guarantees or material restrictive covenants, except for synthetic leases (see Synthetic lease arrangements). We rent or sublease certain real estate to third parties. Our sublease portfolio primarily consists of operating leases within our warehouses, resulting in a nominal amount of sublease income for the years ended December 31, 2021 and December 31, 2020.Synthetic lease arrangementsWe have a number of synthetic lease arrangements with financial institutions for non-core properties. The leases contain provisions for options to purchase, extend the original term for additional periods or return the property. As of December 31, 2021, these arrangements include residual value guarantees of up to approximately $264 million that could potentially come due in future periods. We do not believe it is probable that any material amounts will be owed under these guarantees. Therefore, no material amounts related to the residual value guarantees are included in the lease payments used to measure the right-of-use assets and lease liabilities. The residual value guarantee amounted to $220 million as of December 31, 2020.The majority of these leases are classified as operating leases. We have assessed the reasonable certainty of these provisions to determine the appropriate lease term. The leases were measured using our incremental borrowing rate and are included in our right of use assets and lease liabilities in the Consolidated Balance Sheets. Rental payments are calculated at the applicable reference rate plus a margin. The impact to the Consolidated Balance Sheets and Consolidated Statements of Income (Loss) are nominal.(4) CASH, CASH EQUIVALENTS AND RESTRICTED CASH The following table provides a reconciliation of cash, cash equivalents and restricted cash as reported within our Consolidated Statements of Cash Flows: December 31,Millions of dollars202120202019Cash and cash equivalents as presented in our Consolidated Balance Sheets$ 3,044 $ 2,924 $ 1,952 Restricted cash included in prepaid and other current assets — 10 — Cash, cash equivalents and restricted cash as presented in our Consolidated Statements of Cash Flows$ 3,044 $ 2,934 $ 1,952 (5) INVENTORIES The following table summarizes our inventories at December 31, 2021 and 2020:Millions of dollars20212020Finished products$ 1,958 $ 1,635 Raw materials and work in process 759 666 Total inventories$ 2,717 $ 2,301 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)72 (6) GOODWILL AND OTHER INTANGIBLES GoodwillThe following table summarizes goodwill attributable to our reporting units for the periods presented:Millions of dollarsNorthAmericaEMEALatinAmericaAsiaTotalWhirlpoolEnding balance December 31, 2019$ 1,695 $ 302 $ 33 $ 410 $ 2,440 Currency translation adjustment — 27 1 28 56 Ending balance December 31, 2020$ 1,695 $ 329 $ 34 $ 438 $ 2,496 Currency translation adjustment — (22) (1) 3 (20) Divestitures and acquisitions (1) — (11) — 20 9 Ending balance December 31, 2021$ 1,695 $ 296 $ 33 $ 461 $ 2,485 (1)The net change in goodwill is due to the divestiture of Turkey manufacturing entity, deconsolidation of Whirlpool China and consolidation of Elica PB India. For additional information, see Notes 1 and 17 to the Consolidated Financial Statements.2021 and 2020 annual impairment assessmentWe completed our annual impairment test for goodwill as of October 1, 2021 and 2020. The Company elected to bypass the qualitative assessment and perform a quantitative assessment to evaluate goodwill for all our reporting units. Based on the quantitative assessment we determined there was no impairment of goodwill.Other Intangible AssetsThe following table summarizes other intangible assets for the period presented:December 31, 2021December 31, 2020Millions of dollarsGross Carrying AmountAccumulated AmortizationNetGross Carrying AmountAccumulated AmortizationNetOther intangible assets, finite lives:Customer relationships (1)$ 443 $ (334) $ 109 $ 647 $ (430) $ 217 Patents and other (2) 191 (188) 3 327 (241) 86 Total other intangible assets, finite lives$ 634 $ (522) $ 112 $ 974 $ (671) $ 303 Trademarks, indefinite lives (3) 1,869 — 1,869 1,893 (2) 1,891 Total other intangible assets (4)$ 2,503 $ (522) $ 1,981 $ 2,867 $ (673) $ 2,194 (1)Customer relationships have an estimated useful life of 5 to 19 years.(2)Patents and other intangibles have an estimated useful life of 3 to 43 years.(3)Includes impairment charge of $7 million at December 31, 2020. (4)Decrease of $184 million in net other intangible assets is due to the deconsolidation of Whirlpool China. For additional information, see Note 17 to the Consolidated Financial Statements.2021 and 2020 annual impairment assessmentWe completed our annual impairment assessment for other intangible assets as of October 1, 2021. The Company elected to bypass the qualitative assessment and perform a quantitative assessment to evaluate certain indefinite-lived intangible assets. Based on the results of the quantitative assessment, we determined there was no impairment of intangible assets.We completed our annual impairment assessment for other intangible assets as of October 1, 2020. The Company elected to bypass the qualitative assessment and perform a quantitative assessment NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)73 to evaluate certain indefinite-life intangible assets. Based on the results of the quantitative assessment, we recorded an immaterial intangible impairment charge in the EMEA region. See Note 11 to the Consolidated Financial Statements for additional information.Amortization expense was $47 million, $62 million and $69 million for the years ended December 31, 2021, 2020 and 2019, respectively. The following table summarizes our future estimated amortization expense by year:Millions of dollars 2022$ 27 2023 24 2024 22 2025 10 2026 3 (7)FINANCING ARRANGEMENTS Long-Term DebtThe following table summarizes our long-term debt at December 31, 2021 and 2020:Millions of dollars20212020Senior Note - 4.85%, maturing 2021$ — $ 300 Senior Note - 4.70%, maturing 2022 300 300 Senior Note - 3.70%, maturing 2023 250 250 Senior Note - 4.00%, maturing 2024 300 300 Senior Note - 3.70%, maturing 2025 350 350 Senior Note - 1.25%, maturing 2026(1) 566 606 Senior Note - 1.10%, maturing 2027(1) 679 727 Senior Note - 0.50%, maturing 2028(1) 566 607 Senior Note - 4.75%, maturing 2029 694 693 Senior Note - 2.40%, maturing 2031 300 — Senior Note - 5.15%, maturing 2043 249 249 Senior Note - 4.50%, maturing 2046 497 497 Senior Note - 4.60%, maturing 2050 493 493 Other, net (17) (15) $ 5,227 $ 5,357 Less current maturities 298 298 Total long-term debt$ 4,929 $ 5,059 (1)Euro denominated debt reflects impact of currencyFor outstanding notes issued by our wholly-owned subsidiaries the debt is fully and unconditionally guaranteed by the Company. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)74 The following table summarizes the contractual maturities of our long-term debt, including current maturities, at December 31, 2021:Millions of dollars 2022$ 298 2023 247 2024 297 2025 347 2026 563 Thereafter 3,475 Long-term debt, including current maturities$ 5,227 Debt OfferingOn April 29, 2021, Whirlpool Corporation (the “Company”), completed its inaugural Sustainability Bond offering of $300 million in principal amount of 2.400% Senior Notes due 2031 (the “2031 Notes”), in a public offering pursuant to a registration statement on Form S-3 (File No. 333-255372). The 2031 Notes were issued under an indenture (the “Indenture”), dated March 20, 2000, between the Company, as issuer, and U.S. Bank National Association (as successor to Citibank, N.A.), as trustee. The sale of the 2031 Notes was made pursuant to the terms of an Underwriting Agreement, dated April 26, 2021 (the “Underwriting Agreement”), among the Company, as issuer, and BNP Paribas Securities Corp., BofA Securities, Inc., J.P. Morgan Securities LLC, and Wells Fargo Securities, LLC, as representatives of the several underwriters in connection with the offering and sales of the 2031 Notes. The 2031 Notes contain covenants that limit the Company's ability to incur certain liens or enter into certain sale and lease-back transactions. In addition, if we experience a specific kind of change of control, we are required to make an offer to purchase all of the notes at a purchase price of 101% of the principal amount thereof, plus accrued and unpaid interest. The Company used the net proceeds from the sale of the 2031 Notes to redeem $300 million aggregate principal amount of 4.850% senior notes which was paid June 15, 2021. Consistent with the Company’s Sustainability Bond Framework, the Company intends to allocate an amount equal to the net proceeds from the sale of the 2031 Notes to fund one or more new or existing environmental and social Eligible Projects, as defined in the Company’s prospectus supplement dated April 26, 2021.On May 7, 2020, the Company completed its offering of $500 million in principal amount of 4.60% Senior Notes due 2050 (the "2050 Notes"), in a public offering pursuant to a registration statement on Form S-3 (File No. 333-224381). The 2050 Notes were issued under the Indenture. The 2050 Notes contain covenants that limit the Company's ability to incur certain liens or enter into certain sale and lease-back transactions. In addition, if we experience a specific kind of change of control, we are required to make an offer to purchase all of the notes at a purchase price of 101% of the principal amount thereof, plus accrued and unpaid interest. The Company used the net proceeds from the sale of the 2050 Notes to repay a portion of the outstanding borrowings under the Company’s revolving credit facility, as amended and restated, dated as of August 6, 2019, among the Company, certain other borrowers, the lenders referred to therein, JPMorgan Chase Bank, N.A. as administrative agent and Citibank, N.A., as syndication agent.On February 21, 2020, Whirlpool EMEA Finance S.à r.l., an indirect, wholly-owned finance subsidiary of Whirlpool Corporation, completed a bond offering consisting of €500 million (approximately $540 million at closing) in principal amount of 0.50% Senior Notes due in 2028 (the "2028 Notes") in a public offering pursuant to a registration statement on Form S-3 (File No. 333-224381). The 2028 Notes were issued under an indenture, dated February 21, 2020, among Whirlpool EMEA Finance S.à r.l, as issuer, the Company, as parent guarantor, and U.S. Bank National Association, as trustee. Whirlpool Corporation has fully and unconditionally guaranteed the Notes on a senior unsecured basis. The 2028 Notes contain covenants that limit Whirlpool Corporation's ability to incur certain liens or enter into certain sale and lease-back transactions. In addition, if we experience a specific kind of change of control, we are required to make an offer to purchase all of the 2028 Notes at a purchase price of 101% of the principal amount thereof, plus accrued and unpaid interest. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)75 Credit FacilitiesOn August 6, 2019, Whirlpool Corporation entered into a Fourth Amended and Restated Long-Term Credit Agreement (the "Amended Long-Term Facility", or "revolving credit facility") by and among the Company, certain other borrowers, the lenders referred to therein, JPMorgan Chase Bank, N.A. as Administrative Agent, and Citibank, N.A., as Syndication Agent. The Amended Long-Term Facility provides aggregate borrowing capacity of $3.5 billion. On December 7, 2021, Whirlpool Corporation entered into Amendment No. 1 to the Fourth Amended and Restated Long-Term Credit Agreement to address the cessation of EUR LIBOR and GBP LIBOR on December 31, 2021 by defining EURIBOR and SONIA as the replacement rates, respectively. The Amended Long-Term Facility has a maturity date of August 6, 2024, unless earlier terminated. The interest and fee rates payable with respect to the Amended Long-Term Facility based on our current debt rating are as follows: (1) the spread over Eurocurrency Rate is 1.125%; (2) the spread over prime is 0.125%; and (3) the unused commitment fee is 0.100%. The Amended Long-Term Facility contains customary covenants and warranties including, among other things, a debt to capitalization ratio of less than or equal to 0.65 as of the last day of each fiscal quarter, and a rolling twelve month interest coverage ratio required to be greater than or equal to 3.0 for each fiscal quarter. In addition, the covenants limit our ability to (or to permit any subsidiaries to), subject to various exceptions and limitations: (i) merge with other companies; (ii) create liens on our property; (iii) incur debt at the subsidiary level. We are in compliance with both our debt to capitalization ratio and interest coverage ratio under the revolving credit facility as of December 31, 2021.On April 27, 2020, Whirlpool Corporation entered into a revolving 364-Day Credit Agreement (the “364-Day Facility”) by and among the Company, the lenders referred to therein, and Citibank, N.A. as Administrative Agent. The 364-Day Facility provided aggregate borrowing capacity of $500 million, and expired on its termination date of April 26, 2021 with no outstanding borrowings.In addition to the committed $3.5 billion Amended Long-Term Facility, we have committed credit facilities in Brazil and India. These committed credit facilities provide borrowings up to approximately $193 million at December 31, 2021 and $206 million at December 31, 2020, based on exchange rates then in effect, respectively. These committed credit facilities have maturities that run through 2023. We had no borrowings outstanding under the committed credit facilities at December 31, 2021 and 2020, respectively. Facility BorrowingsOn March 13, 2020, we initiated a borrowing of approximately $2.2 billion under the Amended Long-Term Facility, for which a portion of the proceeds from the borrowing were used to fund commercial paper repayment. We repaid $500 million of this Amended Long-Term Facility borrowing with the proceeds from our May 2020 Notes offering. The Company repaid an additional $500 million of this Amended Long-Term Facility borrowing by drawing on the full amount of the 364-Day Facility. All facility borrowing were repaid as of December 31, 2020 and no amounts were borrowed on the facility during the twelve months ended December 31, 2021. Notes PayableNotes payable, which consist of short-term borrowings payable to banks or commercial paper, are generally used to fund working capital requirements. The fair value of our notes payable approximates the carrying amount due to the short maturity of these obligations. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)76 The following table summarizes the carrying value of notes payable at December 31, 2021 and 2020, respectively. Millions of dollars20212020Short-term borrowings to banks 10 12 Total notes payable$ 10 $ 12 (8) COMMITMENTS AND CONTINGENCIES OTHER MATTERSEmbraco Antitrust MattersBeginning in February 2009, our former Embraco compressor business headquartered in Brazil ("Embraco") was notified of antitrust investigations of the global compressor industry by government authorities in various jurisdictions. Embraco resolved the government investigations and related claims in various jurisdictions and certain other claims remain pending.Whirlpool agreed to retain potential liabilities related to this matter following closing of the Embraco sale transaction. We continue to defend these actions. While it is currently not possible to reasonably estimate the aggregate amount of costs which we may incur in connection with these matters, such costs could have a material adverse effect on our financial statements in any particular reporting period.BEFIEX Credits and Other Brazil Tax MattersIn previous years, our Brazilian operations earned tax credits under the Brazilian government's export incentive program (BEFIEX). These credits reduced Brazilian federal excise taxes on domestic sales.Our Brazilian operations have received tax assessments for income and social contribution taxes associated with certain monetized BEFIEX credits. We do not believe BEFIEX credits are subject to income or social contribution taxes. We believe these tax assessments are without merit and are vigorously defending our positions. We have not provided for income or social contribution taxes on these BEFIEX credits, and based on the opinions of tax and legal advisors, we have not accrued any amount related to these assessments at December 31, 2021. The total amount of outstanding tax assessments received for income and social contribution taxes relating to the BEFIEX credits, including interest and penalties, is approximately 2.0 billion Brazilian reais (approximately $362 million at December 31, 2021).Relying on existing Brazilian legal precedent, in 2003 and 2004, we recognized tax credits in an aggregate amount of $26 million, adjusted for currency, on the purchase of raw materials used in production ("IPI tax credits"). The Brazilian tax authority subsequently challenged the recording of IPI tax credits. No such credits have been recognized since 2004. In 2009, we entered into a Brazilian government program ("IPI Amnesty") which provided extended payment terms and reduced penalties and interest to encourage taxpayers to resolve this and certain other disputed tax credit amounts. As permitted by the program, we elected to settle certain debts through the use of other existing tax credits and recorded charges of approximately $34 million in 2009 associated with these matters. In July 2012, the Brazilian revenue authority notified us that a portion of our proposed settlement was rejected and we received tax assessments of 261 million Brazilian reais (approximately $47 million at December 31, 2021), reflecting interest and penalties to date. We believe these tax assessments are without merit and we are vigorously defending our position. The government's assessment in this case relies heavily on its arguments regarding taxability of BEFIEX credits for certain years, which we are disputing in one of the BEFIEX government assessment cases cited in the prior paragraph. Because the IPI Amnesty case is moving faster than the BEFIEX taxability case, we could be required to pay the IPI Amnesty assessment before obtaining a final decision in the BEFIEX taxability case.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)77 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
We have received tax assessments from the Brazilian federal tax authorities relating to amounts
allegedly due regarding unemployment/social security insurance taxes (PIS/COFINS) for tax credits
recognized since 2007. These credits were recognized for inputs to certain manufacturing and other
business processes. These assessments are being challenged at the administrative and judicial levels
in Brazil. The total amount of outstanding tax assessments received for credits recognized for PIS/
COFINS inputs is approximately 308 million Brazilian reais (approximately $55 million at December
31, 2021). We believe these tax assessments are without merit and are vigorously defending our
positions. Based on the opinion of our tax and legal advisors, we have not accrued any amount
related to these assessments.
In addition to the BEFIEX, IPI tax credit and PIS/COFINS inputs matters noted above, other
assessments issued by the Brazilian tax authorities related to indirect and income tax matters, and
other matters, are at various stages of review in numerous administrative and judicial proceedings.
The amounts related to these assessments will continue to be increased by monetary adjustments
at the Selic rate, which is the benchmark rate set by the Brazilian Central Bank. In accordance with
our accounting policies, we routinely assess these matters and, when necessary, record our best
estimate of a loss. We believe these tax assessments are without merit and are vigorously defending
our positions.
Litigation is inherently unpredictable and the conclusion of these matters may take many years to
ultimately resolve. We may experience additional delays in resolving these matters as a result of
COVID-19-related administrative and judicial system temporary delays and closures in Brazil.
Amounts at issue in potential future litigation could increase as a result of interest and penalties in
future periods. Accordingly, it is possible that an unfavorable outcome in these proceedings could
have a material adverse effect on our financial statements in any particular reporting period.
ICMS Credits
We also filed legal actions in Brazil to recover certain social integration and social contribution taxes
paid over gross sales including ICMS receipts, which is a form of Value Added Tax in Brazil. During
2017, we sold the rights to certain portions of this litigation to a third party for 90 million Brazilian
reais (approximately $27 million at December 31, 2017). In the first quarter of 2019, we received a
favorable decision in the largest of these ICMS legal actions. This decision is final and not subject to
appeals. Based on the opinion of our tax and legal advisors, we recognized a gain of approximately
$84 million, after related taxes and fees and based on exchange rates then in effect, during the first
quarter of 2019 in connection with this decision. This amount reflects approximately $142 million in
indirect tax credits ("credits") that we are entitled to monetize in future periods, offset by
approximately $58 million in taxes and fees, which have been paid.
In the second quarter of 2019, we received favorable final, non-appealable decisions in two smaller
ICMS legal actions. Based on the opinion of our tax and legal advisors, we recognized a gain of
approximately $35 million, after related taxes and fees and based on exchange rates then in effect,
during the second quarter of 2019 in connection with this decision. This amount reflects
approximately $54 million in credits that we are entitled to monetize in future periods, offset by
approximately $19 million in taxes and fees, which have been paid. The ICMS credits and related
fees were recorded in interest and sundry (income) expense in our Consolidated Statements of
Comprehensive Income (Loss).
The Brazilian tax authorities sought clarification before the Brazilian Supreme Court (in a leading
case involving another taxpayer) of certain matters, including the amount of these credits (i.e., the
gross rate or net credit amount), and other matters that could have affected the rights of Brazilian
taxpayers regarding these credits. In May 2021, the Supreme Court ruled that the gross rate, which
is the rate Whirlpool applied, is the appropriate rate, and that taxpayers that filed legal actions prior
to the Supreme Court's original decision in 2017, such as Whirlpool, were entitled to credits for
amounts paid prior to the original decision. The Supreme Court's ruling is final, and a formal written
opinion has been issued. This favorable ruling affirms the position we have taken with respect to the
credits at issue in our ICMS legal actions noted above, and our actions in recognizing and monetizing
these credits.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
Competition Investigation
In 2013, the French Competition Authority ("FCA") commenced an investigation of appliance
manufacturers and retailers in France, including Whirlpool and Indesit. The FCA investigation was
split into two parts, and in December 2018, we finalized a settlement with the FCA on the first part of
the investigation. The second part of the FCA investigation, which is expected to focus primarily on
manufacturer interactions with retailers, is ongoing. The Company is cooperating with this
investigation.
Although it is currently not possible to assess the impact, if any, that matters related to the FCA
investigation may have on our financial statements, matters related to the FCA investigation could
have a material adverse effect on our financial statements in any particular reporting period.
Trade Customer Insolvency
The Company was a former indirect minority shareholder of Alno AG, a longstanding trade customer
that filed for insolvency protection in Germany. In 2020, we paid a settlement of €52.75 million
(approximately $59 million at the time of payment) to resolve any potential claims the insolvency
trustee might have against the Company. We are also defending third-party claims related to Alno's
insolvency that we believe are without merit, and believe the ultimate resolution of these claims will
not have a material adverse effect on our financial statements.
Grenfell Tower
On June 23, 2017, London's Metropolitan Police Service released a statement that it had identified a
Hotpoint–branded refrigerator as the initial source of the Grenfell Tower fire in West London. U.K.
authorities are conducting investigations, including regarding the cause and spread of the fire. The
model in question was manufactured by Indesit Company between 2006 and 2009, prior to
Whirlpool's acquisition of Indesit in 2014. We are fully cooperating with the investigating authorities.
Whirlpool was named as a defendant in a product liability suit in Pennsylvania federal court related
to this matter. The federal court dismissed the case with prejudice in September 2020. The dismissal
is being appealed. In December 2020, lawsuits related to Grenfell Tower were filed in the U.K.
against approximately 20 defendants, including Whirlpool Corporation and certain Whirlpool
subsidiaries. Given the preliminary stage of the proceedings, we cannot speculate on their eventual
outcomes or potential impact on our financial statements; accordingly, we have not recorded any
significant charges as of December 31, 2021. Additional claims may be filed related to this incident.
Other Litigation
See Note 15 for information on certain U.S. income tax litigation. In addition, we are currently
defending against two lawsuits that have been certified for treatment as class actions in U.S. federal
court, relating to two top-load washing machine models. In December 2019, the court in one of
these lawsuits entered summary judgment in Whirlpool's favor. That ruling remains subject to
appeal, and the other lawsuit is ongoing. We believe the lawsuits are without merit and are
vigorously defending them. Given the preliminary stage of the proceedings, we cannot reasonably
estimate a range of loss, if any, at this time. The resolution of these matters could have a material
adverse effect on our financial statements in any particular reporting period.
We are currently vigorously defending a number of other lawsuits related to the manufacture and
sale of our products which include class action allegations, and may become involved in similar
actions. These lawsuits allege claims which include negligence, breach of contract, breach of
warranty, product liability and safety claims, false advertising, fraud, and violation of federal and
state regulations, including consumer protection laws. In general, we do not have insurance
coverage for class action lawsuits. We are also involved in various other legal actions arising in the
normal course of business, for which insurance coverage may or may not be available depending on
the nature of the action. We dispute the merits of these suits and actions, and intend to vigorously
defend them. Management believes, based upon
into
consideration legal counsel's evaluation of such suits and actions, and after taking into account
current litigation accruals, that the outcome of these matters currently pending against Whirlpool
its current knowledge, after taking
79
should not have a material adverse effect, if any, on our financial statements. We may experience additional delays in resolving these and other pending litigation matters as a result of COVID-19-related temporary court and administrative body closures and postponements.Product Warranty and Legacy Product Corrective Action ReservesProduct warranty reserves are included in other current and other noncurrent liabilities in our Consolidated Balance Sheets. The following table summarizes the changes in total product warranty reserves for the periods presented:Product WarrantyMillions of dollars20212020Balance at January 1$ 273 $ 383 Issuances/accruals during the period 307 226 Settlements made during the period/other(1) (294) (336) Balance at December 31$ 286 $ 273 Current portion$ 194 $ 184 Non-current portion 92 89 Total$ 286 $ 273 (1)Includes updated reserve assumptions noted below.In the normal course of business, we engage in investigations of potential quality and safety issues. As part of our ongoing effort to deliver quality products to consumers, we are currently investigating certain potential quality and safety issues globally. As necessary, we undertake to effect repair or replacement of appliances in the event that an investigation leads to the conclusion that such action is warranted.As part of this process, we investigated incident reports associated with a particular component in certain Indesit-designed horizontal axis washers produced in EMEA. In January 2020, we commenced a product recall in the U.K. and Ireland for these EMEA-produced washers, for which the recall is ongoing. In the third quarter of 2019, we accrued approximately $105 million in estimated product warranty expense related to this matter. During the fourth quarter of 2020, the Company released an accrual of approximately $30 million related to this campaign. During the fourth quarter of 2021, the Company further released an accrual of approximately $9 million. These adjustments were made based on the latest available data including take rate assumptions and unit population. These estimates are based on several assumptions which are inherently unpredictable and which we may need to materially revise in the future. For the year ended December 31, 2021, settlements of approximately $5 million have been incurred. The total settlements since the beginning of this campaign are approximately $61 million. In 2020, we recorded a benefit of $14 million related to a vendor recovery for this corrective action. The amount of vendor recovery was immaterial in 2021. For the year ended December 31, 2019, we incurred approximately $26 million of additional product warranty expense related to our previously disclosed legacy Indesit dryer corrective action campaign in the U.K. For the year ended December 31, 2021 and for the year ended December 31, 2020, additional product warranty expenses related to this campaign were immaterial. We continue to voluntarily cooperate with the U.K. regulator with respect to the washer and dryer actions. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)80 GuaranteesWe have guarantee arrangements in a Brazilian subsidiary. For certain creditworthy customers, the subsidiary guarantees customer lines of credit at commercial banks to support purchases following its normal credit policies. If a customer were to default on its line of credit with the bank, our subsidiary would be required to assume the line of credit and satisfy the obligation with the bank. At December 31, 2021 and December 31, 2020, the guaranteed amounts totaled 1,183 million Brazilian reais (approximately $212 million at December 31, 2021) and 297 million Brazilian reais (approximately $57 million at December 31, 2020), respectively. The fair value of these guarantees were nominal at December 31, 2021 and December 31, 2020. Our subsidiary insures against a significant portion of this credit risk for these guarantees, under normal operating conditions, through policies purchased from high-quality underwriters.We provide guarantees of indebtedness and lines of credit for various consolidated subsidiaries. The maximum contractual amount of indebtedness and lines of credit available under these lines for consolidated subsidiaries totaled approximately $3.3 billion at December 31, 2021 and $3.5 billion at December 31, 2020. Our total short-term outstanding bank indebtedness under guarantees was nominal at both December 31, 2021 and 2020.Purchase ObligationsOur expected cash outflows resulting from non-cancellable purchase obligations are summarized by year in the table below:Millions of dollars 2022$ 206 2023 92 2024 61 2025 35 2026 15 Thereafter 30 Total purchase obligations$ 439 (9)PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS We have funded and unfunded defined benefit pension plans that cover certain employees in North America, Europe, Asia and Brazil. The United States plans comprise the majority of our obligation. All but one of these plans are frozen for all participants. The primary formula for United States salaried employees covered under the qualified defined benefit plan and the unfunded, nonqualifed Retirement Benefits Restoration Plan was based on years of service and final average salary, while the primary formula for United States hourly employees covered under the defined benefit plans was based on specific dollar amounts for each year of service. There were multiple formulas for employees covered under the qualified and nonqualified defined benefit plans that were sponsored by Maytag, including a cash balance formula. We have foreign pension plans that accrue benefits. The plans generally provide benefit payments using a formula that is based upon employee compensation and length of service.In addition, we sponsor an unfunded Supplemental Executive Retirement Plan that remains open to new participants and additional benefit accruals. This plan is nonqualified and provides certain key employees additional defined pension benefits that supplement those provided by the Company's other retirement plans. A defined contribution plan is provided to all United States employees and is not classified within the net periodic benefit cost. The Company provides annual match and automatic company contributions, in cash or Company stock, of up to 7% of employees' eligible pay. Our contributions during 2021, 2020 and 2019 were $91 million, $83 million and $84 million, respectively. $48 million NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)81 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
of our Company matching contributions to our defined contribution plan during 2020 were made in
Company stock from May 2020 to December 2020.
We provide postretirement health care benefits for eligible retired employees in the United States,
Canada and Brazil. For our United States plan, which comprises the majority of our obligation,
eligible retirees include those who were full-time employees with 10 years of service who attained
age 55 while in service with us and those union retirees who met the eligibility requirements of their
collective bargaining agreements. In general, the postretirement health and welfare benefit plans
include cost-sharing provisions that limit our exposure for recent and future retirees and are
contributory, with participants' contributions adjusted annually. In the United States, benefits for
certain retiree populations follow a defined contribution model that allocates certain monthly or
annual amounts to a retiree's account under the plan.
During the third quarter of 2020, the Company announced changes to a postretirement medical
benefit program for certain groups of retirees. These plan amendments were effective January 1,
2021 and reduced reimbursement amounts available under certain postretirement medical benefit
programs and eliminated these benefits effective January 1, 2024 for these same retiree groups.
During the second quarter of 2020, the Company announced changes to a postretirement medical
benefit program for certain groups of active employees. These plan amendments were effective July
1, 2020 and reduced medical benefits for these pre-Medicare eligible and Medicare-eligible active
employees who retire on or after July 1, 2020 and eliminate certain benefits effective January 1,
2024.
These plan amendments resulted in a reduction in the accumulated postretirement benefit
obligation of approximately $156 million with a corresponding adjustment of $118 million in other
comprehensive income, net of $39 million in deferred taxes for the nine months ended September
30, 2020. This amount is being amortized as a reduction of future net periodic cost over
approximately 3.4 years, which represents the future remaining service period of eligible active
employees. The interim plan remeasurement associated with these amendments resulted in an
actuarial loss of $12 million recorded in the Other Comprehensive Income (Loss).
For additional information, see Note 12 to the Consolidated Financial Statements.
The postretirement medical benefit programs are unfunded. We reserve the right to modify these
benefits in the future.
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Defined Benefit - Pensions and Other Postretirement Benefit PlansObligations and Funded Status at End of Year United StatesPension BenefitsForeignPension BenefitsOther PostretirementBenefitsMillions of dollars202120202021202020212020Funded statusFair value of plan assets$ 2,904 $ 3,103 $ 665 $ 632 $ — $ — Benefit obligations 2,968 3,237 924 1,029 166 191 Funded status$ (64) $ (134) $ (259) $ (397) $ (166) $ (191) Amounts recognized in the consolidated balance sheetsNoncurrent asset$ 56 $ 37 $ 20 $ 14 $ — $ — Current liability (9) (18) (12) (12) (24) (25) Noncurrent liability (111) (153) (267) (399) (142) (166) Amount recognized$ (64) $ (134) $ (259) $ (397) $ (166) $ (191) Amounts recognized in accumulated other comprehensive loss (pre-tax)Net actuarial loss$ 1,180 $ 1,227 $ 184 $ 279 $ 14 $ 23 Prior service (credit) cost 1 1 3 3 (93) (140) Amount recognized$ 1,181 $ 1,228 $ 187 $ 282 $ (79) $ (117) Change in Benefit Obligation United StatesPension BenefitsForeignPension BenefitsOther PostretirementBenefitsMillions of dollars202120202021202020212020Benefit obligation, beginning of year$ 3,237 $ 3,141 $ 1,029 $ 941 $ 191 $ 355 Service cost 3 3 5 6 — 4 Interest cost 77 94 14 17 5 8 Plan participants' contributions — — 1 1 — — Actuarial (gain) loss (99) 282 (45) 96 (8) 9 Benefits paid (234) (186) (29) (33) (21) (24) Plan amendments — — — — — (156) Transfer of liabilities — — (23) — — — Other adjustments — — — — — — Special termination benefit — — — — — — Settlements / curtailment (gain) (16) (97) (18) (37) — — Foreign currency exchange rates — — (10) 38 (1) (5) Reclassification of obligation to held for sale — — — — — — Benefit obligation, end of year$ 2,968 $ 3,237 $ 924 $ 1,029 $ 166 $ 191 Accumulated benefit obligation, end of year$ 2,955 $ 3,222 $ 891 $ 987 N/AN/AThe actuarial (gain) loss for all pension and other postretirement benefit plans in 2021 and 2020 was primarily related to a change in the discount rate used to measure the benefit obligation of those plans. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)83 Change in Plan Assets United States Pension BenefitsForeignPension BenefitsOther PostretirementBenefitsMillions of dollars202120202021202020212020Fair value of plan assets, beginning of year$ 3,103 $ 2,934 $ 632 $ 593 $ — $ — Actual return on plan assets 31 447 56 58 — — Employer contribution 20 5 30 29 21 24 Plan participants' contributions — — 1 1 — — Benefits paid (234) (186) (29) (33) (21) (24) Transfer of plan assets — — — — — — Other adjustments — — — — — — Settlements (16) (97) (17) (37) — — Foreign currency exchange rates — — (8) 21 — — Reclassification of plan assets to held for sale — — — — — — Fair value of plan assets, end of year$ 2,904 $ 3,103 $ 665 $ 632 $ — $ — Components of Net Periodic Benefit Cost United StatesPension BenefitsForeignPension BenefitsOther PostretirementBenefitsMillions of dollars202120202019202120202019202120202019Service cost$ 3 $ 3 $ 2 $ 5 $ 6 $ 6 $ — $ 4 $ 6 Interest cost 77 94 123 14 17 23 5 8 16 Expected return on plan assets (158) (165) $ (177) (34) (30) (29) — — — Amortization:Actuarial loss 69 62 $ 47 19 12 8 — — 1 Prior service cost (credit) — — (2) — — — (46) (28) (16) Special termination benefit — — $ — — — — — — — Curtailment (gain) / loss — — — — — — — (3) — Settlement loss 5 39 9 2 11 2 — — — Net periodic benefit cost$ (4) $ 33 $ 2 $ 6 $ 16 $ 10 $ (41) $ (19) $ 7 The following table summarizes the net periodic cost recognized in operating profit and interest and sundry (income) expense for the years ending December 31, 2021, 2020 and 2019: United StatesPension BenefitsForeignPension BenefitsOther PostretirementBenefitsMillions of dollars202120202019202120202019202120202019Operating profit (loss)$ 3 $ 3 $ 2 $ 5 $ 6 $ 6 $ — $ 4 $ 6 Interest and sundry (income) expense (7) 30 — 1 10 4 (41) (23) 1 Net periodic benefit cost$ (4) $ 33 $ 2 $ 6 $ 16 $ 10 $ (41) $ (19) $ 7 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)84 Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income (Loss) (Pre-Tax) in 2021 Millions of dollarsUnited StatesPension BenefitsForeignPension BenefitsOther PostretirementBenefitsCurrent year actuarial loss / (gain)$ 27 $ (74) $ (9) Actuarial (loss) recognized during the year (74) (21) — Current year prior service cost (credit) — — — Prior service credit (cost) recognized during the year — — 47 Total recognized in other comprehensive income (loss) (pre-tax)$ (47) $ (95) $ 38 Total recognized in net periodic benefit costs and other comprehensive income (loss) (pre-tax)$ (51) $ (89) $ (3) We amortize actuarial losses and prior service costs (credits) over a period of up to 21 years and 13 years, respectively.AssumptionsWeighted-Average Assumptions used to Determine Benefit Obligation at End of Year United StatesPension BenefitsForeignPension BenefitsOther PostretirementBenefits 202120202021202020212020Discount rate 2.85 % 2.50 % 1.89 % 1.55 % 3.41 % 2.98 %Rate of compensation increase 4.50 % 4.50 % 3.59 % 3.47 %N/AN/AInterest crediting rate for cash balance plans 1.60 % 1.25 % 2.36 % 1.99 %N/AN/AWeighted-Average Assumptions used to Determine Net Periodic Cost United StatesPension BenefitsForeignPension BenefitsOther PostretirementBenefits 202120202019202120202019202120202019Discount rate2.50%3.13%4.30%1.55%2.04%2.90%3.66%3.35%4.80%Expected long-term rate of return on plan assets6.00%6.25%6.50%5.48%5.39%5.56%N/AN/AN/ARate of compensation increase4.50%4.50%4.50%3.47%3.10%3.29%N/AN/AN/AInterest crediting rate for cash balance plans1.25%2.05%3.05%1.99%1.80%2.19%N/AN/AN/AHealth care cost trend rateInitial rateN/AN/AN/AN/AN/AN/A6.00%6.25%6.50%Ultimate rateN/AN/AN/AN/AN/AN/A5.00%5.00%5.00%Year that ultimate rate will be reachedN/AN/AN/AN/AN/AN/A202520252025NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)85 Discount RateFor our United States pension and postretirement benefit plans, the discount rate was selected using a hypothetical portfolio of high quality bonds outstanding at December 31 that would provide the necessary cash flows to match our projected benefit payments. For our foreign pension and postretirement benefit plans, the discount rate was primarily selected using high quality bond yields for the respective country or region covered by the plan.Expected Return on Plan AssetsIn the United States, the expected return on plan assets is developed considering asset mix, historical asset class data and long-term expectations. The resulting weighted-average return was rounded to the nearest quarter of one percent and applied to the fair value of plan assets at December 31, 2021.For foreign pension plans, the expected rate of return on plan assets was primarily determined by observing historical returns in the local fixed income and equity markets and computing the weighted average returns with the weights being the asset allocation of each plan.Cash FlowsFunding PolicyOur funding policy is to contribute to our qualified United States pension plans amounts sufficient to meet the minimum funding requirement as defined by employee benefit and tax laws, plus additional amounts which we may determine to be appropriate. In certain countries other than the United States, the funding of pension plans is not common practice. Contributions to our United States pension plans may be made in the form of cash or, in the case of our defined contribution plan in our discretion, company stock. We pay for retiree medical benefits as they are incurred.There have been no contributions to the pension trust for our U.S. defined benefit plans during the twelve months ended December 31, 2021 and 2020. Expected Employer Contributions to Funded PlansMillions of dollarsUnited StatesPension BenefitsForeignPension Benefits2022$ — $ 19 Expected Benefit PaymentsMillions of dollarsUnited StatesPension BenefitsForeignPension BenefitsOther Postretirement Benefits2022$ 291 $ 36 $ 24 20232353624202423136122025220401020262153892027-2031$ 950 $ 209 $ 41 Plan AssetsOur overall investment strategy is to achieve an appropriate mix of investments for long-term growth and for near-term benefit payments with a wide diversification of asset types, fund strategies, and investment fund managers. The target allocation for our plans is approximately 20% in growth assets and 80% in immunizing fixed income securities, with exceptions for foreign pension plans. The fixed income securities duration is intended to match that of our United States pension liabilities.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)86 Plan assets are reported at fair value based on an exit price, representing the amount that would be received to sell an asset in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset. As a basis for considering such assumptions, a three-tiered fair value hierarchy is established, which prioritizes the inputs used in measuring fair value as follows: (Level 1) observable inputs such as quoted prices in active markets; (Level 2) inputs, other than the quoted prices in active markets that are observable, either directly or indirectly; and (Level 3) unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. Certain investments are valued based on net asset value (NAV), which approximates fair value. Such basis is determined by referencing the respective fund's underlying assets. There are no unfunded commitments or other restrictions associated with these investments. We manage the process and approve the results of a third-party pricing service to value the majority of our securities and to determine the appropriate level in the fair value hierarchy.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)87 The fair values of our pension plan assets at December 31, 2021 and 2020, by asset category were as follows:December 31,Quoted prices(Level 1)Other significantobservable inputs(Level 2)Significantunobservable inputs(Level 3)Net Asset ValueTotalMillions of dollars2021202020212020202120202021202020212020Cash and cash equivalents$ — $ — $ 162 $ 281 $ — $ — $ — $ — $ 162 $ 281 Government and government agency securities (1)U.S. securities — — 264 182 — — — — 264 182 International securities — — 92 99 — — — — 92 99 Corporate bonds and notes (1)U.S. companies — — 1,585 1,691 — — — — 1,585 1,691 International companies — — 286 279 — — — — 286 279 Equity securities (2)U.S. companies — — — — — — — — — — International companies 36 47 — — — — — — 36 47 Mutual funds (3) — — 103 108 — — — — 103 108 Investments at net asset valueU.S. equity securities (4) — — — — — — 308 448 308 448 International equity securities (4) — — — — — — 177 180 177 180 Short-term investment fund (4) — — — — — — 43 24 43 24 International debt securities (5) — — — — — — 178 208 178 208 International equity securities (5) — — — — — — 62 53 62 53 Real estate (6) — — — — — — 55 13 55 13 Limited partnerships (7)U.S. private equity investments — — — — 26 38 — — 26 38 Diversified fund of funds — — — — 3 3 — — 3 3 Emerging growth — — — — 3 3 — — 3 3 All other investments — — 29 48 — — 157 30 186 78 $ 36 $ 47 $ 2,521 $ 2,688 $ 32 $ 44 $ 980 $ 956 $ 3,569 $ 3,735 (1)Valued using pricing vendors who use proprietary models to estimate the price a dealer would pay to buy a security using significant observable inputs, such as interest rates, yield curves, and credit risk. (2)Valued using the closing stock price on a national securities exchange, which reflects the last reported sales price on the last business day of the year.(3)Valued using the net asset value (NAV) of the fund, which is based on the fair value of underlying securities. The fund primarily invests in a diversified portfolio of equity securities, fixed income debt securities and real estate issued by non-U.S. companies.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)88 (4)Common and collective trust funds valued using the NAV of the fund, which is based on the fair value of underlying securities.(5)Fund of funds valued using the NAV of the fund, which is based on the fair value of underlying securities. International debt securities includes corporate bonds and notes and government and government agency securities.(6)Valued using the NAV of the fund, which is based on the fair value of underlying assets.(7)Valued at estimated fair value based on the proportionate share of the limited partnership's fair value, as determined by the general partner.Fair Value Measurements Using Significant Unobservable Inputs (Level 3)Millions of dollarsLimitedPartnershipsBalance, December 31, 2020$ 44 Realized gain / (loss) (net) 13 Unrealized gain / (loss) (net) 2 Purchases — Settlements (27) Balance, December 31, 2021$ 32 Additional InformationThe projected benefit obligation and fair value of plan assets for pension plans with a projected benefit obligation in excess of plan assets at December 31, 2021 and 2020 were as follows: United StatesPension BenefitsForeignPension BenefitsMillions of dollars2021202020212020Projected benefit obligation$ 2,507 $ 2,718 $ 851 $ 951 Fair value of plan assets$ 2,386 $ 2,547 $ 578 $ 546 The projected benefit obligation, accumulated benefit obligation and fair value of plan assets for pension plans with an accumulated benefit obligation in excess of plan assets at December 31, 2021 and 2020 were as follows: United StatesPension BenefitsForeignPension BenefitsMillions of dollars 2021202020212020Projected benefit obligation$ 2,507 $ 2,718 $ 851 $ 951 Accumulated benefit obligation 2,494 2,703 831 921 Fair value of plan assets$ 2,386 $ 2,547 $ 578 $ 546 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)89 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
(10) HEDGES AND DERIVATIVE FINANCIAL INSTRUMENTS
Derivative instruments are accounted for at fair value based on market rates. Derivatives where we
elect hedge accounting are designated as either cash flow, fair value or net investment hedges.
Derivatives that are not accounted for based on hedge accounting are marked to market through
earnings. If the designated cash flow hedges are highly effective, the gains and losses are recorded
in other comprehensive income (loss) and subsequently reclassified to earnings to offset the impact
of the hedged items when they occur. In the event it becomes probable the forecasted transaction
to which a cash flow hedge relates will not occur, the derivative would be terminated and the
amount in accumulated other comprehensive income (loss) would be recognized in earnings. The
fair value of the hedge asset or liability is present in either other current assets/liabilities or other
noncurrent assets/liabilities on the Consolidated Balance Sheets and in other within cash provided
by (used in) operating activities in the Consolidated Statements of Cash Flows. Using derivative
instruments means assuming counterparty credit risk. Counterparty credit risk relates to the loss we
could incur if a counterparty were to default on a derivative contract. We generally deal with
investment grade counterparties and monitor the overall credit risk and exposure to individual
counterparties. We do not anticipate nonperformance by any counterparties. The amount of
counterparty credit exposure is limited to the unrealized gains, if any, on such derivative contracts.
We do not require nor do we post collateral on such contracts.
Hedging Strategy
In the normal course of business, we manage risks relating to our ongoing business operations
including those arising from changes in commodity prices, foreign exchange rates and interest rates.
Fluctuations in these rates and prices can affect our operating results and financial condition. We
use a variety of strategies, including the use of derivative instruments, to manage these risks. We do
not enter into derivative financial instruments for trading or speculative purposes.
Commodity Price Risk
We enter into commodity derivative contracts on various commodities to manage the price risk
associated with forecasted purchases of materials used in our manufacturing process. The objective
of these hedges is to reduce the variability of cash flows associated with the forecasted purchase of
commodities.
Foreign Currency and Interest Rate Risk
We incur expenses associated with the procurement and production of products in a limited
number of countries, while we sell in the local currencies of a large number of countries. Our
primary foreign currency exchange exposures result from cross-currency sales of products. As a
result, we enter into foreign exchange contracts to hedge certain firm commitments and forecasted
transactions to acquire products and services that are denominated in foreign currencies. We enter
into certain undesignated non-functional currency asset and liability hedges that relate primarily to
short-term payables, receivables, intercompany loans and dividends. When we hedge a foreign
currency denominated payable or receivable with a derivative, the effect of changes in the foreign
exchange rates are reflected currently in interest and sundry (income) expense for both the payable/
receivable and the derivative. Therefore, as a result of the economic hedge, we do not elect hedge
accounting.
We also enter into hedges to mitigate currency risk primarily related to forecasted foreign currency
denominated expenditures, intercompany financing agreements and royalty agreements and
designate them as cash flow hedges. Gains and losses on derivatives designated as cash flow
hedges, to the extent they are included in the assessment of effectiveness, are recorded in other
comprehensive income (loss) and subsequently reclassified to earnings to offset the impact of the
hedged items when they occur.
We may enter into cross-currency interest rate swaps to manage our exposure relating to cross-
currency debt. Outstanding notional amounts of cross-currency interest rate swap agreements were
$1,275 million at December 31, 2021 and 2020, respectively.
90
We may enter into interest rate swap agreements to manage interest rate risk exposure. Our interest rate swap agreements, if any, effectively modify our exposure to interest rate risk, primarily through converting certain floating rate debt to a fixed rate basis, and certain fixed rate debt to a floating rate basis. These agreements involve either the receipt or payment of floating rate amounts in exchange for fixed rate interest payments or receipts, respectively, over the life of the agreements without an exchange of the underlying principal amounts. We may enter into swap rate lock agreements to effectively reduce our exposure to interest rate risk by locking in interest rates on probable long-term debt issuances. Outstanding notional amounts of interest rate swap agreements were $300 million at December 31, 2021 and 2020, respectively. Net Investment HedgingThe following table summarizes our foreign currency denominated debt and foreign exchange forwards/options designated as net investment hedges at December 31, 2021 and 2020: Notional (local)Notional (USD)Current MaturityInstrument2021202020212020Foreign exchange forwards/optionsMXN 7,200 MXN 7,200 $ 352 $ 362 August 2022For instruments that are designated and qualify as a net investment hedge, the effective portion of the instruments' gain or loss is reported as a component of other comprehensive income (loss) and recorded in accumulated other comprehensive loss. The gain or loss will be subsequently reclassified into net earnings when the hedged net investment is either sold or substantially liquidated. The remaining change in fair value of the hedge instruments represents the ineffective portion, which is immediately recognized in interest and sundry (income) expense on our Consolidated Statements of Income. As of December 31, 2021, there was no ineffectiveness on hedges designated as net investment hedges. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)91 The following table summarizes our outstanding derivative contracts and their effects on our Consolidated Balance Sheets at December 31, 2021 and 2020: Fair Value ofType ofHedge Notional AmountHedge AssetsHedge LiabilitiesMaximum Term (Months)Millions of dollars20212020202120202021202020212020Derivatives accounted for as hedges(1)Commodity swaps/options$ 297 $ 215 $ 40 $ 39 $ 13 $ 4 (CF)2130Foreign exchange forwards/options 2,872 3,028 91 58 64 110 (CF/NI)122134Cross-currency swaps 1,275 1,275 31 23 7 86 (CF)8698Interest rate derivatives 300 300 — — 14 28 (CF)4153Total derivatives accounted for as hedges$ 162 $ 120 $ 98 $ 228 Derivatives not accounted for as hedgesCommodity swaps/options$ 2 $ 1 $ — $ — $ — $ — N/A140Foreign exchange forwards/options(2) 2,240 4,161 20 25 18 96 N/A1212Total derivatives not accounted for as hedges$ 20 $ 25 $ 18 $ 96 Total derivatives$ 182 $ 145 $ 116 $ 324 Current$ 170 $ 103 $ 93 $ 152 Noncurrent 12 42 23 172 Total derivatives$ 182 $ 145 $ 116 $ 324 (1)Derivatives accounted for as hedges are considered either cash flow (CF) or net investment (NI) hedges. (2)Foreign exchange forwards/options have decreased due to repayment of intercompany loans.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)92 The following tables summarize the effects of derivative instruments on our Consolidated Statements of Income (Loss) and Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2021 and 2020:Gain (Loss)Recognized in OCI(Effective Portion) (3) Millions of dollars20212020Cash flow hedges Commodity swaps/options$ 66 $ 22 Foreign exchange forwards/options 92 9 Cross-currency swaps 110 (40) Interest rate derivatives 14 (34) Net investment hedges Foreign currency 1 1 $ 283 $ (42) Location of Gain (Loss) Reclassified fromOCI into Earnings(Effective Portion)Gain (Loss) Reclassified fromOCI into Earnings(Effective Portion)(4)Cash Flow Hedges - Millions of dollars20212020Commodity swaps/options (3)Cost of products sold$ 68 $ (20) Foreign exchange forwards/optionsNet sales 2 7 Foreign exchange forwards/optionsCost of products sold (3) 30 Foreign exchange forwards/optionsInterest and sundry (income) expense 71 (54) Cross-currency swaps(5)Interest and sundry (income) expense 117 (89) $ 255 $ (126) Location of Gain (Loss) Recognized on Derivatives notAccounted for as HedgesGain (Loss) Recognized on Derivatives notAccounted for as Hedges (3)Derivatives not Accounted for as Hedges - Millions of dollars20212020Foreign exchange forwards/optionsInterest and sundry (income) expense$ 74 $ (1) (3)Change in gain (loss) recognized in OCI (effective portion) is primarily driven by increases in commodity prices and fluctuations in currency and interest rates. The tax impact of the cash flow hedges was $(14) million and $(16) million in 2021 and 2020, respectively. The tax impact of the net investment hedges was $(1) million and $1 million in 2021 and 2020, respectively.(4)Change in gain (loss) reclassified from OCI into earnings (effective portion) was primarily driven by fluctuations in currency and commodity prices and interest rates compared to prior year. (5)Change in cross-currency swaps is primarily driven by the currency change in the Euro year-over-year.For cash flow hedges, the amount of ineffectiveness recognized in interest and sundry (income) expense was nominal during 2021 and 2020. There were no hedges designated as fair value in 2021 and 2020. The net amount of unrealized gain or loss on derivative instruments included in accumulated other comprehensive income (loss) related to contracts maturing and expected to be realized during the next twelve months is a gain of approximately $46 million at December 31, 2021.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)93 (11) FAIR VALUE MEASUREMENTS Fair value is measured based on an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions market participants would use in pricing an asset or liability. Assets and liabilities measured at fair value are based on a market valuation approach using prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. As a basis for considering such assumptions, a three-tiered fair value hierarchy is established, which prioritizes the inputs used in measuring fair value as follows: (Level 1) observable inputs such as quoted prices in active markets; (Level 2) inputs, other than the quoted prices in active markets that are observable, either directly or indirectly; and (Level 3) unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. The non-recurring fair values represent only those assets whose carrying values were adjusted to fair value during the reporting period. See Note 6 to the Consolidated Financial Statements for additional information on the goodwill and other intangibles. Assets and liabilities measured at fair value on a recurring basis at December 31, 2021 and 2020 are as follows:Total Cost BasisQuoted Prices InActive Markets forIdentical Assets(Level 1)Significant OtherObservable Inputs(Level 2)Total Fair ValueMillions of dollars20212020202120202021202020212020Short-term investments (1)$ 1,905 $ 2,164 $ 1,697 $ 1,603 $ 208 $ 561 $ 1,905 $ 2,164 Net derivative contracts — — — — 66 (179) 66 (179) (1)Short-term investments are primarily comprised of money market funds and highly liquid, low risk investments with initial maturities less than 90 days.The following table summarizes the valuation of our assets measured at fair value on a non-recurring basis as of December 31, 2020, which is the balance sheet date at the end of the period in which the impairment charge was recorded. No impairment charge was recorded as of December 31, 2021.Fair ValueMillions of dollarsLevel 3Measured at fair value on a non-recurring basis:2020Assets:Indefinite-lived intangible assets (2) 158 Total level 3 assets$ 158 (2)Indefinite-lived intangible assets with a carrying amount of approximately $165 million were written down to a fair value of $158 million resulting in an impairment charge of $7 million in 2020.Other Intangible Assets The relief-from-royalty method for the quantitative impairment assessment for other intangible assets in the EMEA reporting unit during the fourth quarter of 2020 utilized discount rates ranging from 14.75% - 15% and royalty rates ranging from 1.5% - 3.5%. Based on the quantitative impairment assessment performed, the carrying value of other intangible assets of Hotpoint* brand, exceeded its fair value, resulting in an impairment charge of €6 million ($7 million) in 2020. See Note 6 to the Consolidated Financial Statements for additional information.*Whirlpool ownership of the Hotpoint brand in the EMEA and Asia Pacific regions is not affiliated with the Hotpoint brand sold in the Americas.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)94 Elica PB India AcquisitionAs of September 30, 2021, the Company consolidated Elica PB India. As a result, the previously held equity interest of 49% was remeasured at a fair value of $74 million (Level 2 input) on the acquisition date, resulting in an implied fair value of approximately $150 million.For additional information, see Note 1 to the Consolidated Financial Statements.Whirlpool China Equity Method InvestmentDuring the second quarter of 2021, the partial tender offer for Whirlpool China was completed and the entity was deconsolidated. Subsequent to the share transfer, which was completed on May 6, 2021, the Company holds an equity interest of approximately 20% in Whirlpool China. The fair value of the retained investment in Whirlpool China at the date of deconsolidation was calculated based on the Whirlpool China stock price (Level 1 input), the portion of interest retained and the shares outstanding, resulting in a fair value of $214 million.For additional information see Note 17 to the Consolidated Financial Statements.Turkey Subsidiary DivestmentDuring the second quarter of 2021, we entered into a share transfer agreement to sell our Turkish subsidiary and the sale was completed on June 30, 2021. Fair value was calculated based on the cash purchase price, subject to customary adjustments at closing (Level 2 input), and we recorded a loss on sale and disposal of businesses of $40 million for the write-down of the assets to the fair value of $111 million. An immaterial adjustment to the loss on sale and disposal of business was recorded in the third quarter of 2021.For additional information see Note 17 to the Consolidated Financial Statements.South Africa Business Disposal During the second quarter of 2019, we entered into an agreement to sell our South Africa business. At the time of the agreement we classified this disposal group as held for sale and recorded it at fair value because it was lower than the carrying amount. Fair value was estimated based on the cash purchase price (Level 2 input) and we recorded an impairment charge of $35 million for the write-down of the assets to the fair value of $5 million. During the third quarter of 2019, we completed the sale of our South Africa business and adjusted the loss on disposal based on the carrying amount at the closing date. The adjustment was not material to the Consolidated Financial Statements.See Note 17 to the Consolidated Financial Statements for additional information.Naples Manufacturing Plant Restructuring ActionIn the fourth quarter of 2020, we ceased production and exited our Naples, Italy manufacturing plant. In connection with these restructuring actions, we recorded an impairment charge of $43 million for the write-down of certain assets to their fair value of $0 in 2019. Fair value was based on a feasibility study considering future use internally and marketability externally (Level 2 input). These assets were fully impaired because they were determined to have no alternative use or salvage value and insufficient cash flows to support recoverability of the carrying amount. See Note 14 to the Consolidated Financial Statements for additional information.Other Fair Value MeasurementsThe fair value of long-term debt (including current maturities) was $5.76 billion and $6.13 billion at December 31, 2021 and 2020, respectively, and was estimated using a discounted cash flow analysis based on incremental borrowing rates for similar types of borrowing arrangements (Level 2 input).NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)95 (12) STOCKHOLDERS' EQUITY Comprehensive Income (Loss)Comprehensive income (loss) primarily includes (1) our reported net earnings (loss), (2) foreign currency translation, including net investment hedges, (3) changes in the effective portion of our open derivative contracts designated as cash flow hedges, (4) changes in our unrecognized pension and other postretirement benefits and (5) changes in fair value of our available for sale marketable securities (prior to the adoption of ASU 2016-01 in 2018).The following table shows the components of accumulated other comprehensive income (loss) available to Whirlpool at December 31, 2019, 2020, and 2021, and the activity for the years then ended:Millions of dollarsForeignCurrencyDerivativeInstrumentsPension andPostretirementLiabilityTotalDecember 31, 2018$ (1,588) $ (33) $ (1,074) (2,695) Unrealized gain (loss) 54 (17) — 37 Unrealized actuarial gain(loss) and prior service credit (cost) — — 52 52 Tax effect 2 4 (18) (12) Other comprehensive income (loss), net of tax 56 (13) 34 77 Less: Other comprehensive loss available to noncontrolling interests — — — — Other comprehensive income (loss) available to Whirlpool 56 (13) 34 77 December 31, 2019$ (1,532) $ (46) $ (1,040) $ (2,618) Unrealized gain (loss) (385) 83 — (302) Unrealized actuarial gain (loss) and prior service credit (cost) — — 171 171 Tax effect 1 (16) (45) (60) Other comprehensive income (loss), net of tax (384) 67 126 (191) Less: Other comprehensive loss available to noncontrolling interests 2 — — 2 Other comprehensive income (loss) available to Whirlpool (386) 67 126 (193) December 31, 2020$ (1,918) $ 21 $ (914) $ (2,811) Unrealized gain (loss) 364 27 — 391 Unrealized actuarial gain (loss) and prior service credit (cost) — — 104 104 Tax effect (1) (14) (26) (41) Other comprehensive income (loss), net of tax 363 13 78 454 Less: Other comprehensive loss available to noncontrolling interests — — — — Other comprehensive income (loss) available to Whirlpool 363 13 78 454 December 31, 2021$ (1,555) $ 34 $ (836) $ (2,357) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)96 Net Earnings per ShareDiluted net earnings per share of common stock include the dilutive effect of stock options and other share-based compensation plans. Basic and diluted net earnings per share of common stock were calculated as follows:Millions of dollars and shares202120202019Numerator for basic and diluted earnings per share – net earnings (loss) available to Whirlpool$ 1,783 $ 1,075 $ 1,168 Denominator for basic earnings per share – weighted-average shares 62.1 62.7 63.7 Effect of dilutive securities – stock-based compensation 0.8 0.6 0.5 Denominator for diluted earnings per share – adjusted weighted-average shares 62.9 63.3 64.2 Anti-dilutive stock options/awards excluded from earnings per share 0.1 1.3 1.3 Dividends Dividends per share paid to shareholders were $5.45, $4.85 and $4.75 during 2021, 2020 and 2019, respectively. Share Repurchase ProgramOn April 19, 2021, our Board of Directors authorized a share repurchase program of up to $2 billion, which has no expiration date. For the year ended December 31, 2021, we repurchased approximately 4.8 million shares at an aggregate purchase price of approximately $1 billion under this program. At December 31, 2021, there were approximately $1.5 billion in remaining funds authorized under this program. Share repurchases are made from time to time on the open market as conditions warrant. The program does not obligate us to repurchase any of our shares and it has no expiration date.(13) SHARE-BASED INCENTIVE PLANS We sponsor several share-based employee incentive plans. Share-based compensation expense for grants awarded under these plans was $82 million, $67 million and $50 million in 2021, 2020, and 2019, respectively. Related income tax benefits recognized in earnings were $10 million, $9 million and $6 million in 2021, 2020, and 2019, respectively.At December 31, 2021, unrecognized compensation cost related to non-vested stock option and stock unit awards totaled $89 million. The cost of these non-vested awards is expected to be recognized over a weighted-average remaining vesting period of 28 months.Share-Based Employee Incentive PlansOn April 17, 2018, our stockholders approved the 2018 Omnibus Stock and Incentive Plan ("2018 OSIP"). This plan was adopted by our Board of Directors on February 20, 2018 and provides for the issuance of stock options, performance stock units, and restricted stock units, among other award types. No new awards may be granted under the 2018 OSIP after the tenth anniversary of the date that the stockholders approved the plan. However, the term and exercise of awards granted before then may extend beyond that date. At December 31, 2021, approximately 2.4 million shares remain available for issuance under the 2018 OSIP.Stock OptionsEligible employees may receive stock options as a portion of their total compensation. Such options generally become exercisable over a 3-year period in substantially equal increments, expire 10 years from the date of grant and are subject to forfeiture upon termination of employment, other than by death, Disability, Retirement, or with the consent of the Committee (as defined in the award NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)97 agreement). We use the Black-Scholes option-pricing model to measure the fair value of stock options granted to employees. Granted options have exercise prices equal to the market price of Whirlpool common stock on the grant date. The principal assumptions used in valuing options include: (1) risk-free interest rate - an estimate based on the yield of United States zero coupon securities with a maturity equal to the expected life of the option; (2) expected volatility - an estimate based on the historical volatility of Whirlpool common stock for a period equal to the expected life of the option; and (3) expected option life - an estimate based on historical experience. Stock options are expensed on a straight-line basis, net of estimated forfeitures. Based on the results of the model, the weighted-average grant date fair value of stock options granted for 2021, 2020, and 2019 were $52.44, $29.53 and $27.89, respectively, using the following assumptions: Weighted Average Black-Scholes Assumptions202120202019Risk-free interest rate 0.5 % 1.4 % 2.5 %Expected volatility 37.7 % 29.3 % 28.5 %Expected dividend yield 2.5 % 3.2 % 3.4 %Expected option life, in years555Stock Option ActivityThe following table summarizes stock option activity during 2021:In thousands, except per share dataNumberof OptionsWeighted-AverageExercise PriceOutstanding at January 1 2,268 $ 144.54 Granted 165 199.93 Exercised (1,548) 133.77 Canceled or expired (41) 186.88 Outstanding at December 31 844 $ 173.08 Exercisable at December 31 448 $ 176.20 The total intrinsic value of stock options exercised was $121 million, $13 million and $4 million for 2021, 2020, and 2019, respectively. The related tax benefits were $23 million, $3 million and $1 million for 2021, 2020, and 2019, respectively. Cash received from the exercise of stock options was $77 million, $44 million, and $8 million for 2021, 2020, and 2019, respectively.The table below summarizes additional information related to stock options outstanding at December 31, 2021:Options in thousands / dollars in millions, except per-share dataOutstanding Net ofExpected ForfeituresOptionsExercisableNumber of options 837 448 Weighted-average exercise price per share$ 173.01 $ 176.20 Aggregate intrinsic value$ 52 $ 26 Weighted-average remaining contractual term, in years64Stock UnitsEligible employees may receive restricted stock units or performance stock units as a portion of their total compensation.Restricted stock units are typically granted to selected management employees on an annual basis and vest over three years. Periodically, restricted stock units may be granted to selected employees based on special recognition or retention circumstances and generally vest from three years to seven years. Previously granted awards accrue dividend equivalents on outstanding units (in the NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)98 form of additional stock units) based on dividends declared on Whirlpool common stock. These awards convert to unrestricted common stock at the conclusion of the vesting period.Performance stock units are granted to management employees on an annual basis and generally vest at the end of a three year performance period, converting to unrestricted common stock at the conclusion of the vesting period. The final award may equal 0% to 200% of the target grant, based on Whirlpool performance results relative to pre-established goals. We measure compensation cost for stock units based on the closing market price of Whirlpool common stock at the grant date, with adjustments for performance stock units to reflect the final award granted. The weighted average grant date fair values of awards granted during 2021, 2020, and 2019 were $191.64, $141.38 and $127.26, respectively. The total fair value of stock units vested during 2021, 2020, and 2019 was $43 million, $37 million and $28 million, respectively.The following table summarizes stock unit activity during 2021:Stock units in thousands, except per-share dataNumber ofStock UnitsWeighted- AverageGrant Date FairValueNon-vested, at January 1 1,003 $ 139.62 Granted 381 191.64 Canceled (113) 147.05 Vested and transferred to unrestricted (249) 148.22 Non-vested, at December 31 1,022 $ 155.92 Non-employee Director Equity AwardsIn 2021, each non-employee director received an annual grant of unrestricted Whirlpool common stock, with the number of shares issued to the director determined by dividing $150,000 by the closing price of Whirlpool common stock on the date of the annual meeting of our stockholders.(14) RESTRUCTURING CHARGES We periodically take action to improve operating efficiencies, typically in connection with business acquisitions or changes in the economic environment. Our footprint and headcount reductions and organizational integration actions relate to discrete, unique restructuring events, primarily reflected in the following plans:On June 26, 2020, the Company committed to a workforce reduction plan in the United States, as part of the Company's continued cost reduction efforts. The workforce reduction plan included a voluntary retirement program and involuntary severance actions which were effective as of the end of the second quarter of 2020. These actions were substantially completed in 2020 and the Company incurred $102 million in employee termination costs related to these actions. The remaining cash settlement of $13 million will occur throughout 2022 and 2023.During the third quarter of 2020, the Company committed to additional workforce reductions outside of the United States, as part of the Company's previously announced continued cost reduction efforts. The company has incurred $97 million of the approximate $148 million total costs through 2021 and the remaining expense will primarily occur in 2022. Cash settlement of $84 million has been paid to date with the remaining cash settlement expected to be paid over the duration of 2022 and 2023.On May 31, 2019, we announced our intention to reconvert our Naples, Italy manufacturing plant and potentially sell the plant to a third party. On September 16, 2019, we entered into a preliminary agreement to sell the plant to a third-party purchaser and to support costs associated with the transition. In October 2019, we announced that, based on further discussions with unions and the Italian government, we will continue production at the Naples manufacturing plant in the near-term and resume negotiations with unions and the Italian government related to our exit of the plant. Our preliminary agreement to sell the plant to a third-party purchaser terminated in accordance with its NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)99 terms in March 2020. We ceased production in the plant and exited the facility in 2020 as previously disclosed and commenced the collective dismissal procedure in 2021.In the fourth quarter of 2021, the Company obtained a favorable court decision in litigation commenced by the unions which confirmed the validity of the collective dismissal procedure. The Company subsequently reached an agreement with the unions for the withdrawal of the litigation, completed the collective dismissal process, and reached individual settlements with all impacted personnel. In connection with this action, we have incurred approximately $143 million total costs comprised of $43 million in asset impairment costs, $27 million in other associated costs and $73 million in employee-related costs through December 31, 2021. Cash settlement of $69 million has been paid in 2021 with a nominal amount still to be paid in 2022.The following tables summarize the changes to our restructuring liability for the years ended December 31, 2021 and 2020:Millions of dollars12/31/2020Charges to EarningsCash PaidNon-Cash and Other12/31/2021Employee termination costs$ 145 $ 30 $ (122) $ — $ 53 Asset impairment costs 8 1 — (1) 8 Facility exit costs — 2 (2) — — Other exit costs 20 5 (22) (7) (4) Total$ 173 $ 38 $ (146) $ (8) $ 57 Millions of dollars12/31/2019Charge to EarningsCash PaidNon-cash and Other12/31/2020Employee termination costs$ 57 $ 253 $ (165) $ — $ 145 Asset impairment costs 8 1 — (1) 8 Facility exit costs — 4 (4) — — Other exit costs 12 30 (27) 5 20 Total$ 77 $ 288 $ (196) $ 4 $ 173 The following table summarizes 2021 and 2020 restructuring charges by operating segment:Millions of dollars2021 Charges2020 ChargesNorth America$ — $ 81 EMEA 38 154 Latin America — 20 Asia — 10 Corporate / Other — 23 Total$ 38 $ 288 (15) INCOME TAXES Income tax expense was $518 million, $382 million, and $348 million in 2021, 2020 and 2019, respectively. The increase in tax expense in 2021 compared to 2020 is primarily due to higher earnings and related tax expense, audits and settlements, partially offset by legal entity restructuring tax benefits. Included in Settlements and changes in unrecognized tax benefits in the table below is $98 million of net tax expense and interest related to an unfavorable ruling discussed in Other Income Tax Matters. The increase in tax expense in 2020 compared to 2019 is primarily due to changes in valuation allowance, legal entity restructuring tax benefits, and earnings dispersion related to the sale of Embraco. As part of ongoing efforts to reduce costs and simplify the Company's legal entity structure, the Company has completed a statutory legal entity restructuring within our EMEA business. The completion of the restructuring created a tax-deductible loss which was recognized in the fourth quarter of 2019, and resulted in a $147 million tax benefit. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)100 The following table summarizes the difference between an income tax benefit at the United States statutory rate of 21% in 2021, 2020, and 2019, respectively, and the income tax expense at effective worldwide tax rates for the respective periods:Millions of dollars202120202019Earnings (loss) before income taxesUnited States$ 1,287 $ 1,020 $ 652 Foreign 1,045 427 878 Earnings (loss) before income taxes$ 2,332 $ 1,447 $ 1,530 Income tax (benefit) expense computed at United States statutory rate$ 490 $ 304 $ 321 U.S. government tax incentives (19) (17) (21) Foreign government tax incentives (23) (20) (13) Foreign tax rate differential 66 30 70 U.S. foreign tax credits (29) (25) (86) Valuation allowances 1 15 (150) State and local taxes, net of federal tax benefit 57 40 41 Foreign withholding taxes 19 8 54 U.S. tax on foreign dividends and subpart F income 9 34 67 Settlements and changes in unrecognized tax benefits 113 53 113 U.S. Transition Tax — — 26 Changes in enacted tax rates (14) (6) 42 Divestiture tax impact (35) — 58 Legal entity restructuring tax impact (98) (82) (147) Other items, net (19) 48 (27) Income tax computed at effective worldwide tax rates$ 518 $ 382 $ 348 Current and Deferred Tax ProvisionThe following table summarizes our income tax (benefit) provision for 2021, 2020 and 2019: 202120202019Millions of dollarsCurrentDeferredCurrentDeferredCurrentDeferredUnited States$ 132 $ 251 $ 90 $ 81 $ 203 $ 69 Foreign 184 (126) 182 (24) 432 (406) State and local 80 (3) 42 11 42 8 $ 396 $ 122 $ 314 $ 68 $ 677 $ (329) Total income tax expense$ 518 $ 382 $ 348 United States Tax on Foreign DividendsWe have historically reinvested all unremitted earnings of the majority of our foreign subsidiaries and affiliates, and therefore have not recognized any U.S. deferred tax liability on those earnings. The Company had cash and cash equivalents of approximately $3.0 billion at December 31, 2021, of which approximately half was held by subsidiaries in foreign countries. Our intent is to permanently reinvest substantially all of these funds outside of the United States and our current plans do not demonstrate a need to repatriate the cash to fund our U.S. operations. However, if these funds were repatriated, they would likely not be subject to United States federal income tax under the previously taxed income or the dividend exemption rules. We would likely be required to accrue and pay United States state and local taxes and withholding taxes payable to various countries. It is not practicable to estimate the tax impact of the reversal of the outside basis difference, or the repatriation of cash due to the complexity of its hypothetical calculation. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)101 Valuation AllowancesAt December 31, 2021, we had net operating loss carryforwards of $5.8 billion, $306 million of which were U.S. state net operating loss carryforwards, compared to $5.9 billion and $512 million at December 31, 2020, respectively. Of the total net operating loss carryforwards at December 31, 2021, $3.6 billion do not expire, with substantially all of the remaining carryforwards expiring in various years through 2038. At December 31, 2021, we had $386 million of United States general business credit carryforwards available to offset future payments of federal income taxes, expiring between 2031 and 2041.We routinely review the future realization of deferred tax assets based on projected future reversal of taxable temporary differences, available tax planning strategies and projected future taxable income. We have recorded a valuation allowance to reflect the net estimated amount of certain deferred tax assets associated with net operating loss and other deferred tax assets we believe will be realized. Our recorded valuation allowance of $195 million at December 31, 2021 consists of $131 million of net operating loss carryforward deferred tax assets and $64 million of other deferred tax assets. Our recorded valuation allowance was $214 million at December 31, 2020 and consisted of $126 million of net operating loss carryforward deferred tax assets and $88 million of other deferred tax assets. The increase in our valuation allowance includes $1 million recognized in net earnings, with the remaining change related to reclassification within our net deferred tax asset. During 2019, the Company used proceeds from a bond offering to recapitalize various entities in EMEA which resulted in a reduction in the valuation allowance. In addition, the Company has established tax planning strategies and transfer pricing policies to provide sufficient future taxable income to realize these deferred tax assets. We believe that it is more likely than not that we will realize the benefit of existing deferred tax assets, net of valuation allowances mentioned above.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)102 Deferred Tax Liabilities and AssetsDeferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities used for financial reporting purposes and the amounts used for income tax purposes. The following table summarizes the significant components of our deferred tax liabilities and assets at December 31, 2021 and 2020:Millions of dollars20212020Deferred tax liabilitiesIntangibles$ 404 $ 461 Property, net 181 196 Right of use assets 245 265 Inventory Reserves 41 116 Other 207 252 Total deferred tax liabilities$ 1,078 $ 1,290 Deferred tax assetsU.S. general business credit carryforwards, including Energy Tax Credits$ 386 $ 680 Lease liabilities 255 275 Pensions 70 114 Loss carryforwards 1,347 1,336 Postretirement obligations 41 49 Foreign tax credit carryforwards 33 25 Research and development capitalization 130 121 Employee payroll and benefits 104 118 Accrued expenses 80 96 Product warranty accrual 54 76 Receivable and inventory allowances 61 112 Other 597 646 Total deferred tax assets 3,158 3,648 Valuation allowances for deferred tax assets (195) (214) Deferred tax assets, net of valuation allowances 2,963 3,434 Net deferred tax assets$ 1,885 $ 2,144 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)103 Unrecognized Tax BenefitsThe following table represents a reconciliation of the beginning and ending amount of unrecognized tax benefits that if recognized would impact the effective tax rate, excluding federal benefits of state and local tax positions, and interest and penalties:Millions of dollars202120202019Balance, January 1$ 427 $ 394 $ 278 Additions for tax positions of the current year 17 17 20 Additions for tax positions of prior years 179 21 138 Reductions for tax positions of prior years (34) (2) (26) Settlements during the period (7) — (4) Lapses of applicable statute of limitation (2) (3) (12) Balance, December 31$ 580 $ 427 $ 394 Interest and penalties associated with unrecognized tax benefits resulted in a net expense of $14 million at December 31, 2021, a net expense of $10 million and net benefit of $(4) million in 2020 and 2019, respectively. We have accrued a total of $66 million, $52 million and $42 million at December 31, 2021, 2020 and 2019, respectively.It is reasonably possible that certain unrecognized tax benefits of $74 million could be settled with various related jurisdictions during the next 12 months.We are in various stages of tax disputes (including audits, appeals and litigation) with certain governmental tax authorities. We establish liabilities for the difference between tax return provisions and the benefits recognized in our financial statements. Such amounts represent a reasonable provision for taxes ultimately expected to be paid, and may need to be adjusted over time as more information becomes known. We are no longer subject to any significant tax disputes (including audits, appeals and litigation) for the years before 2009 relating to US Federal income taxes and for the years before 2003 relating to any state, local or foreign income taxes.Other Income Tax MattersAs previously disclosed, during its examination of Whirlpool’s 2009 U.S. federal income tax return, the IRS asserted that income earned by a Luxembourg subsidiary via its Mexican branch should be recognized as income on its 2009 U.S. federal income tax return. The Company believed the proposed assessment was without merit and contested the matter in United States Tax Court (US Tax Court). Both Whirlpool and the IRS moved for partial summary judgment on this issue. On May 5, 2020, the US Tax Court granted the IRS’s motion for partial summary judgment and denied Whirlpool’s. The Company appealed the US Tax Court decision to the United States Court of Appeals for the Sixth Circuit, and, on December 6, 2021, a three-judge panel, in a divided decision, affirmed the U.S. Tax Court decision (the “Ruling”). On January 20, 2022, the Company filed a petition for rehearing with the Sixth Circuit. The Company recorded a reserve of $98 million in the fourth quarter of 2021, which represents the expected increase in the Company’s net income tax expense, plus interest, for 2009 through 2019, which represents all of the Company’s tax years that were affected by the Ruling.(16) SEGMENT INFORMATION Our reportable segments are based upon geographic region and are defined as North America, EMEA, Latin America and Asia. These regions also represent our operating segments. Each segment manufactures home appliances and related components, but serves strategically different marketplaces. The chief operating decision maker evaluates performance based upon each segment's earnings (loss) before interest and taxes (EBIT), which we define as operating profit less interest and sundry (income) expense and excluding restructuring costs, asset impairment charges and certain other items that management believes are not indicative of the region's ongoing performance, if any. Total assets by segment are those assets directly associated with the respective NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)104 operating activities. The "Other/Eliminations" column primarily includes corporate expenses, assets and eliminations, as well as restructuring costs, asset impairments and certain other items that management believes are not indicative of the region's ongoing performance, if any. Intersegment sales are eliminated within each region except compressor sales out of Latin America through June 30, 2019, which are included in Other/Eliminations.Sales to Lowe's, a North American retailer, represented approximately 13% of our consolidated net sales in 2021, 2020 and 2019, respectively. Lowe's represented approximately 21% and 14% of our consolidated accounts receivable as of December 31, 2021 and 2020, respectively.The United States individually comprised at least 10% of consolidated net sales in 2021, 2020 and 2019 in the amounts of $11.5 billion, $10.3 billion and $10.7 billion, respectively.The following table summarizes the countries that represent at least 10% of consolidated long-lived assets for the years ended December 31, 2021 and 2020. Long-lived assets includes property, plant and equipment and right-of-use assets at December 31, 2021 and 2020.Millions of dollarsUnited StatesItalyMexicoPolandAll Other CountriesTotal2021Long-lived assets$ 1,758 $ 473 $ 408 $ 389 $ 723 $ 3,751 2020Long-lived assets$ 1,790 $ 526 $ 403 $ 428 $ 1,040 $ 4,187 OPERATING SEGMENTSMillions of dollarsNorthAmericaEMEALatinAmericaAsiaOther/EliminationsTotalWhirlpoolNet sales2021$ 12,491 $ 5,088 $ 3,167 $ 1,239 $ — $ 21,985 2020 11,210 4,389 2,592 1,265 — 19,456 2019 11,477 4,296 3,177 1,515 (46) 20,419 Intersegment sales2021$ 312 $ 102 $ 1,277 $ 252 $ (1,943) $ — 2020 249 93 1,227 379 (1,948) — 2019 238 83 1,321 334 (1,976) — Depreciation and amortization2021$ 175 $ 168 $ 63 $ 26 $ 62 $ 494 2020 193 177 62 70 66 568 2019 195 187 65 67 73 587 EBIT2021$ 2,220 $ 100 $ 265 $ 66 $ (152) $ 2,499 2020 1,758 2 219 (7) (336) 1,636 2019 1,440 (30) 172 33 102 1,717 Total assets2021$ 7,980 $ 10,210 $ 4,716 $ 1,565 $ (4,186) $ 20,285 2020 7,597 11,296 4,244 2,573 (5,274) 20,436 2019 7,883 9,450 4,226 2,581 (5,167) 18,973 Capital expenditures2021$ 169 $ 152 $ 133 $ 30 $ 41 $ 525 2020 137 116 64 50 43 410 2019 179 124 97 80 52 532 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)105 The following table summarizes the reconciling items in the Other/Eliminations column for total EBIT for the periods presented:Twelve Months Ended December 31, in millions202120202019Items not allocated to segments:Restructuring costs$ (38) $ (288) $ (188) Gain (loss) on previously held equity interest 42 — — Gain (loss) on sale and disposal of businesses 107 7 437 Product warranty and liability income (expense) 9 30 (131) Corrective action recovery — 14 — Sale-leaseback, real estate and receivable adjustment — 113 86 Trade customer insolvency claim settlement — — (59) Brazil indirect tax credit — — 180 Corporate expenses and other (272) (212) (223) Total other/eliminations$ (152) $ (336) $ 102 A reconciliation of our segment information for total EBIT to the corresponding amounts in the Consolidated Statements of Income (Loss) is shown in the table below for the periods presented:Twelve Months Ended December 31, in millions202120202019Operating profit$ 2,348 $ 1,615 $ 1,549 Interest and sundry (income) expense$ (159) $ (21) $ (168) Equity method investment income (loss), net of tax (8) — — Total EBIT$ 2,499 $ 1,636 $ 1,717 Interest expense 175 189 187 Income tax expense 518 382 348 Net earnings (loss)$ 1,806 $ 1,065 $ 1,182 Less: Net earnings (loss) available to noncontrolling interests 23 (10) 14 Net earnings (loss) available to Whirlpool$ 1,783 $ 1,075 $ 1,168 (17) DIVESTITURES Whirlpool China Partial Tender OfferOn August 25, 2020, Guangdong Galanz Household Appliances Manufacturing Co., Ltd. (“Galanz”) announced its intention to pursue a tender offer for majority control of Whirlpool China Co. Ltd. (“Whirlpool China”), a majority-owned subsidiary of the Company with shares listed on the Shanghai Stock Exchange. In its announcement, Galanz noted that it expected to offer RMB 5.23 per share (approximately $0.76 per share as of August 25, 2020) to obtain no less than 51% and no more than 61% of Whirlpool China’s outstanding shares. This share price offer was equal to the daily weighted average trading price for Whirlpool China stock over the 30 trading days prior to the announcement.In the first quarter of 2021, our Board of Directors approved the sale of Whirlpool China, which was reported within our Asia reportable segment and met the criteria for held for sale accounting during the first quarter of 2021. The operations of Whirlpool China did not meet the criteria to be presented as discontinued operations.On May 6, 2021, the tender offer was completed and the share transfer was executed for a consideration of RMB 1.25 billion (approximately $193 million on the date of completion). Subsequent to the share transfer, the Company holds an equity interest of approximately 20% in Whirlpool China.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)106 In connection with the sale, we recorded a gain, net of transaction and other costs, of $284 million during the second quarter of 2021. The gain on sale is equal to the difference between the total transaction amount and carrying value of Whirlpool China, which includes $74 million of cumulative foreign currency translation adjustments and $80 million of goodwill allocated to the disposal group. The total transaction amount includes $193 million of consideration received from the sale of Whirlpool China shares, $214 million for the fair value of the interest retained and the $783 million carrying value of the equity interest in Whirlpool China. The fair value of the interest retained was based on the ownership amount and the stock price of Whirlpool China as of the closing date of the transaction and we account for the remaining equity interest under the equity method accounting as of June 30, 2021.Earnings before income taxes prior to the share transfer of Whirlpool China were not material to the Company for the period presented.The following table presents the carrying amounts of the major classes of Whirlpool China’s assets and liabilities as of December 30, 2021 and December 31, 2020.Millions of dollarsDecember 31,20212020Cash and cash equivalents$ — $ 324 Accounts receivable, net of allowance of $0 and $11, respectively — 85 Inventories — 98 Prepaid and other current assets — 93 Property, net of accumulated depreciation of $0 and $189, respectively — 309 Other noncurrent assets (1) — 283 Total assets$ — $ 1,192 Accounts payable$ — $ 216 Accrued expenses — 53 Other current liabilities — 254 Other noncurrent liabilities — 7 Total liabilities$ — $ 530 (1) Other non current assets include allocated goodwill of $80 million.Turkey Subsidiary DivestitureOn May 17, 2021, we entered into a share transfer agreement with Arçelik A.Ş. ("Arçelik") to sell our Turkish subsidiary for a cash purchase price of €78 million (approximately $93 million on June 30, 2021), subject to customary adjustments at closing.On June 30, 2021, we completed the sale of the Turkish subsidiary. In connection with the sale, we recorded a loss on disposal of $164 million in the second quarter of 2021. The loss includes a charge of $40 million for the write-down of the assets of the disposal group to fair value and allocated goodwill, and $124 million of cumulative foreign currency translation adjustments included in the carrying amount of the disposal group. During the third quarter of 2021, amounts for working capital and other customary post-closing adjustments were finalized and an additional $13 million loss related to the sale of business was recorded.The Turkish subsidiary, whose primary asset was a manufacturing plant, was reported within our EMEA reportable segment. The operations of Turkey did not meet the criteria to be presented as discontinued operations. Earnings before income taxes for Turkey were not material for the periods presented.For additional information see Note 11 to the Consolidated Financial Statements.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)107 Embraco DivestitureOn April 23, 2018, our Board of Directors approved the sale of Embraco and we subsequently entered into an agreement to sell the compressor business for a cash purchase price of $1.08 billion, subject to customary adjustments including for indebtedness, cash and working capital at closing. On July 1, 2019, we completed the sale of Embraco and received cash proceeds of $1.1 billion inclusive of anticipated cash on hand at the time of closing. With the proceeds from this transaction, we repaid the outstanding term loan amount of approximately $1 billion as required under the April 23, 2018 Term Loan Agreement with Citibank, N.A., as Administrative Agent. In connection with the sale, we recorded a pre-tax gain, net of transaction and other costs, of $511 million ($350 million net of taxes) during the twelve months ended December 31, 2019. An immaterial adjustment related to finalization of the purchase price and related gain calculation was recorded in 2020.Embraco was reported within our Latin America reportable segment and met the criteria for held for sale accounting through the closing date. The operations of Embraco did not meet the criteria to be presented as discontinued operations. The assets and liabilities of Embraco were de-consolidated as of the closing date and there are no remaining carrying amounts in the Consolidated Balance Sheets at December 31, 2019.The following table summarizes Embraco's earnings before income taxes for the twelve months ended December 31, 2021, 2020 and 2019:Millions of dollars202120202019Earnings before income taxes$ — $ — $ 47 South Africa DivestitureOn June 28, 2019, we entered into an agreement to sell our South Africa operations for a cash purchase price of $5 million, subject to customary adjustments at closing.On September 5, 2019, we completed the sale of our South Africa operations. In connection with the sale, we finalized the loss on disposal of $63 million which is recorded in the year ended December 31, 2019. The loss includes a charge of $29 million for the write-down of the assets of the disposal group to fair value and $34 million of cumulative foreign currency translation adjustments included in the carrying amount of the disposal group to calculate the impairment.The South Africa business was reported within our EMEA reportable segment and met the criteria for held for sale accounting through the closing date. The operations of South Africa did not meet the criteria to be presented as discontinued operations.See Note 11 to the Consolidated Financial Statements for additional information.Turkey Domestic Sales Operations DivestitureFor the year ended December 31, 2019, we incurred approximately $11 million of divestiture related costs, primarily inventory liquidation costs, related to the exit from our domestic sales operations in Turkey.See Note 14 to the Consolidated Financial Statements for additional information.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)108 ITEM 9.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURENone.ITEM 9A.CONTROLS AND PROCEDURESDisclosure controls and procedures. Whirlpool maintains disclosure controls and procedures (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended (the "Securities Exchange Act")) that are designed to provide reasonable assurance that information required to be disclosed in our filings under the Securities Exchange Act is recorded, processed, summarized, and reported within the periods specified in the rules and forms of the SEC and that such information is accumulated and communicated to Whirlpool's management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.Prior to filing this report, we completed an evaluation under the supervision and with the participation of Whirlpool management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of December 31, 2021. Based on this evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of December 31, 2021.Management's annual report on internal control over financial reporting. Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 and the rules and regulations adopted pursuant thereto, we included a report of management's assessment of the effectiveness of our internal control over financial reporting as part of this report. Management's report is included on page 121 of this report under the caption entitled "Management's Report on Internal Control Over Financial Reporting" and is incorporated herein by reference.Our internal control over financial reporting as of December 31, 2021 has been audited by Ernst & Young LLP, an independent registered public accounting firm, as stated in their report, which is included on page 125 of this report under the caption entitled "Report of Independent Registered Public Accounting Firm" and is incorporated herein by reference.There were no changes in our internal control over financial reporting during the quarter ended December 31, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.ITEM 9B.OTHER INFORMATIONNone.ITEM 9C.DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONSNot Applicable.109 PART IIIITEM 10.DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCEInformation regarding our executive officers is included in ITEM 1 of PART I of this report under "Information About Our Executive Officers."Information regarding the background of the directors, matters related to the Audit Committee, and the process by which our shareholders may recommend nominees to our Board of Directors can be found under the captions "Directors and Nominees for Election as Directors," "Board of Directors and Corporate Governance - Board of Directors and Committees," and "Board of Directors and Corporate Governance - Director Nominations by Stockholders" in the proxy statement, which will be filed pursuant to SEC Regulation 14A not later than 120 days after the end of the Company's fiscal year ended December 31, 2021 ("Proxy Statement").We have adopted a code of ethics that applies to all of our employees, officers and directors, including our principal executive officer, principal financial officer and principal accounting officer. The text of our code of ethics, titled "Our Integrity Manual", is posted on our website at whirlpoolcorp.com/ethics. Whirlpool intends to disclose future amendments to, or waivers from, certain provisions of the code of ethics for executive officers and directors on this website within four business days following the date of such amendment or waiver. Stockholders may request a free copy of Our Integrity Manual from:Investor RelationsWhirlpool Corporation2000 North M-63Mail Drop 2609Benton Harbor, MI 49022-2692Telephone: (269) 923-2641Whirlpool has also adopted Corporate Governance Guidelines and written charters for its Audit, Finance, Human Resources and Corporate Governance and Nominating Committees, all of which are posted on our website: whirlpoolcorp.com (scroll to the bottom of the main page and click on "Policies.") Stockholders may request a free copy of the charters and guidelines from the address or telephone number set forth above.ITEM 11.EXECUTIVE COMPENSATIONInformation regarding compensation of our executive officers and directors can be found under the captions "Non-employee Director Compensation," "Compensation Discussion and Analysis," "2021 Executive Compensation Tables," "Pay Ratio Disclosure," "Compensation Risk Assessment," and "Human Resources Committee Interlocks and Insider Participation" in the Proxy Statement, which is incorporated herein by reference. See also the information under the caption "Human Resources Committee Report" in the Proxy Statement, which is incorporated herein by reference; however, such information is only "furnished" hereunder and not deemed "soliciting material" or "filed" with the SEC or subject to Regulation 14A or 14C or to the liabilities of Section 18 of the Securities Exchange Act of 1934.110 ITEM 12.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERSInformation regarding the security ownership of any person that we know to beneficially own more than 5% of Whirlpool stock and by each Whirlpool director, each Whirlpool named executive officer, and all directors and executive officers as a group, can be found under the captions "Security Ownership" and "Beneficial Ownership" in the Proxy Statement, which is incorporated herein by reference. Information relating to securities authorized under equity compensation plans can be found under the caption "Equity Compensation Plan Information" in the Proxy Statement, which is incorporated herein by reference.ITEM 13.CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCEInformation regarding certain relationships and related transactions (if any) and the independence of Whirlpool's directors, can be found under the captions "Related Person Transactions" and "Board of Directors and Corporate Governance - Board of Directors and Committees" in the Proxy Statement, which is incorporated herein by reference.ITEM 14.PRINCIPAL ACCOUNTANT FEES AND SERVICESInformation regarding our auditors and the Audit Committee's pre-approval policies can be found under the caption "Matters Relating to Independent Registered Public Accounting Firm" in the Proxy Statement, which is incorporated herein by reference.111 PART IVITEM 15.EXHIBITS, FINANCIAL STATEMENT SCHEDULES(a) The following documents are filed as a part of this report:1. Financial statementsPAGEConsolidated Statements of Income (Loss)54Consolidated Statements of Comprehensive Income (Loss)55Consolidated Balance Sheets56Consolidated Statements of Cash Flows57Consolidated Statements of Changes in Stockholders' Equity58Notes to the Consolidated Financial Statements59Report by Management on the Consolidated Financial Statements120Report of Independent Registered Public Accounting Firm1222. Financial Statement Schedules - "Schedule II - Valuation and Qualifying Accounts" is contained on page 126 of this report. Certain schedules for which provisions are made in the applicable accounting regulations of the Securities and Exchange Commission are not required under the related instructions or are inapplicable, and therefore have been omitted.(b) The exhibits listed in the "Exhibit Index" is contained on page 113 of this report.(c) Individual financial statements of the registrant's affiliated foreign companies, accounted for by the equity method, have been omitted since no such company individually constitutes a significant subsidiary.ITEM 16.Form 10-K SummaryNone.112 ANNUAL REPORT ON FORM 10-KITEMS 15(a)(3) and 15(b)EXHIBIT INDEXYEAR ENDED DECEMBER 31, 2021 The following exhibits are submitted herewith or incorporated herein by reference in response to Items 15(a)(3) and 15(b). Each exhibit that is considered a management contract or compensatory plan or arrangement required to be filed pursuant to Item 15(a)(3) of Form 10-K is identified by a "(Z)."Number and Description of Exhibit 2(i)**Purchase Agreement dated April 24, 2018 by and among Whirlpool Corporation, certain subsidiaries thereof, and Nidec Corporation [Incorporated by reference from Exhibit 2.1 to the Company's Form 8-K (Commission file number 1-3932) filed on April 24, 2018]2(ii)**Amendment dated May 3, 2019 to Purchase Agreement dated April 24, 2018 by and among Whirlpool Corporation, certain subsidiaries thereof, and Nidec Corporation [Incorporated by reference from Exhibit 2.1 to the Company's Form 10-Q (Commission file number 1-3932) for the quarter ended June 30, 2019]3(i)Restated Certificate of Incorporation of Whirlpool Corporation (amended and restated as of April 22, 2009) [Incorporated by reference from Exhibit 3.1 to the Company's Form 8-K (Commission file number 1-3932) filed on April 23, 2009]3(ii)By-Laws of Whirlpool Corporation (amended and restated effective October 18, 2016) [Incorporated by reference from Exhibit 3.2 to the Company's Form 8-K (Commission file number 1-3932) filed on October 21, 2016]4(i)The registrant hereby agrees to furnish to the Securities and Exchange Commission, upon request, a copy of instruments defining the rights of holders of each issue of long-term debt of the registrant and its subsidiaries.4(ii)Indenture dated as of April 15, 1990 between Whirlpool Corporation and Citibank, N.A. [Incorporated by reference from Exhibit 4(a) to the Company's Registration Statement on Form S-3 (Commission file number 33-40249) filed on May 6, 1991]4(iii)Indenture dated as of March 20, 2000 between Whirlpool Corporation and U.S. Bank, National Association (as successor to Citibank, N.A.) [Incorporated by reference from Exhibit 4(a) to the Company's Registration Statement on Form S-3 (Commission file number 333-32886) filed on March 21, 2000]4(iv)Indenture dated as of June 15, 1987 between Maytag Corporation and The First National Bank of Chicago [Incorporated by reference from Maytag Corporation's Quarterly Report on Form 10-Q (Commission file number 1-00655) for the quarter ended June 30, 1987]4(v)Ninth Supplemental Indenture dated as of October 30, 2001 between Maytag Corporation and Bank One, National Association [Incorporated by reference from Exhibit 4.1 to Maytag Corporation's Form 8-K (Commission file number 1-00655) filed on October 31, 2001]4(vi)Tenth Supplemental Indenture dated as of December 30, 2010, between Maytag Corporation, Whirlpool Corporation and The Bank of New York Mellon Trust Company, N.A. [Incorporated by reference from Exhibit 4(vi) to the Company's Annual Report on Form 10-K (Commission file number 1-3932) for the fiscal year ended December 31, 2010]113 4(vii)
Indenture, dated November 2, 2016, among Whirlpool Finance Luxembourg S.à. r.l.,
Whirlpool Corporation and U.S. Bank National Association [Incorporated by reference
from Exhibit 4.1 to the Company's Form 8-K (Commission file number 1-3932) filed on
November 2, 2016]
4(viii)*
Description of Whirlpool Corporation's securities
4(ix)
10(i)(a)
Indenture, dated February 21, 2020, among Whirlpool EMEA Finance S.à. r.l., Whirlpool
Corporation and U.S. National Bank Association [Incorporated by reference from
Exhibit 4.1 to the Company’s Form 8-K (Commission file number 1-3932) filed on
February 21, 2020].
Fourth Amended and Restated Long Term Credit Agreement dated as of August 6,
2019 among Whirlpool Corporation, Whirlpool Europe B.V., Whirlpool Canada Holding
Co., Whirlpool Global B.V., Whirlpool UK Appliances Limited, the other borrowers party
thereto, the lenders party thereto, JPMorgan Chase Bank, N.A., as Administrative
Agent, Citibank, N.A., as Syndication Agent, and BNP Paribas, Mizuho Bank, Ltd. and
Wells Fargo Bank, National Association, as Documentation Agents [Incorporated by
reference from Exhibit 10.2 to the Company's Form 10-Q (Commission file number
1-3932) for the quarter ended September 30, 2019]
10(i)(b)*
Amendment No. 1 to Fourth Amended and Restated Long-Term Credit Agreement
dated as of December 7, 2021.
10(iii)(a)
10(iii)(b)
10(iii)(c)
10(iii)(d)
Whirlpool Corporation Nonemployee Director Stock Ownership Plan (amended as of
February 16, 1999, effective April 20, 1999) (Z) [Incorporated by reference from Exhibit
A to the Company's Proxy Statement (Commission file number 1-3932) for the 1999
annual meeting of stockholders]
Whirlpool Corporation Charitable Award Contribution and Additional Life Insurance
Plan for Directors (effective April 20, 1993) (Z) [Incorporated by reference from Exhibit
10(iii)(p) to the Company's Annual Report on Form 10-K (Commission file number
1-3932) for the fiscal year ended December 31, 1994]
Whirlpool Corporation Deferred Compensation Plan for Directors (as amended
effective January 1, 1992 and April 20, 1993) (Z) [Incorporated by reference from
Exhibit 10(iii)(f) to the Company's Annual Report on Form 10-K (Commission file
number 1-3932) for the fiscal year ended December 31, 1993]
Whirlpool Corporation Deferred Compensation Plan II for Non-Employee Directors (as
amended and restated, effective January 1, 2009) (Z) [Incorporated by reference from
Exhibit 10(iii)(e) to the Company's Annual Report on Form 10-K (Commission file
number 1-3932) for the fiscal year ended December 31, 2008]
10(iii)(e)
Whirlpool Corporation Nonemployee Director Equity Plan (effective January 1, 2005) (Z)
[Incorporated by reference from Exhibit 99.1 to the Company's Form 8-K (Commission
file number 1-3932) filed on April 21, 2005]
10(iii)(f)
Amendment of the Whirlpool Corporation Nonemployee Director Equity Plan (effective
January 1, 2008) (Z) [Incorporated by reference to Exhibit 10(iii)(a) to the Company's
Quarterly Report on Form 10-Q (Commission file number 1-3932) filed on April 24,
2008]
114
10(iii)(g)Nonemployee Director Stock Option Form of Agreement (Z) [Incorporated by reference from Exhibit 10(iii)(b) to the Company's Quarterly Report on Form 10-Q (Commission file number 1-3932) filed on April 24, 2008]10(iii)(h)Nonemployee Director Stock Option Form of Agreement (Z) [Incorporated by reference from Exhibit 10.2 to the Company's Form 8-K (Commission file number 1-3932) filed on April 26, 2010]10(iii)(i)Whirlpool Corporation 2007 Omnibus Stock and Incentive Plan (effective January 1, 2007) (Z) [Incorporated by reference from Annex A to the Company's Proxy Statement (Commission file number 1-3932) for the 2007 annual meeting of stockholders filed on March 12, 2007]10(iii)(j)Omnibus Equity Plans 409A Amendment (effective December 19, 2008) (Z) [Incorporated by reference from Exhibit 10(iii)(n) to the Company's Annual Report on Form 10-K (Commission file number 1-3932) for the fiscal year ended December 31, 2008] 10(iii)(k)Whirlpool Corporation 2010 Omnibus Stock and Incentive Plan (Z) [Incorporated by reference from Exhibit 10.1 to the Company's Form 8-K (Commission file number 1-3932) filed on April 26, 2010]10(iii)(l)Whirlpool Corporation Amended and Restated 2010 Omnibus Stock and Incentive Plan (Z) [Incorporated by reference from Exhibit 10.1 to the Company's Registration Statement on Form S-8 (Commission file number 333-187948) filed on April 16, 2013]10(iii)(m)Form of Agreement for the Whirlpool Corporation Career Stock Grant Program (pursuant to one or more of Whirlpool's Omnibus Stock and Incentive Plans) (Z) [Incorporated by reference from Exhibit 10(iii)(q) to the Company's Annual Report on Form 10-K (Commission file number 1-3932) for the fiscal year ended December 31, 1995]10(iii)(n)Form of Amendment to Whirlpool Corporation Career Stock Grant Agreement (Z) [Incorporated by reference from Exhibit 10(iii)(p) to the Company's Annual Report on Form 10-K (Commission file number 1-3932) for the fiscal year ended December 31, 2008]10(iii)(o)Form of Stock Option Grant Document for the Whirlpool Corporation Stock Option Program (pursuant to one or more of Whirlpool's Omnibus Stock and Incentive Plans)(Rev. 02/17/04) (Z) [Incorporated by reference from Exhibit 10(i) to the Company's Form 8-K (Commission file number 1-3932) filed on January 25, 2005]10(iii)(p)Form of Restricted Stock Unit Agreement (pursuant to one or more of Whirlpool's Omnibus Stock and Incentive Plans) (Z) [Incorporated by reference from Exhibit 10.1 to the Company's Form 8-K (Commission file number 1-3932) filed on June 21, 2010]10(iii)(q)Whirlpool Corporation 2010 Omnibus Stock and Incentive Plan Restricted Stock Unit Award (Z) [Incorporated by reference from Exhibit 10(iii)(a) to the Company's Form 10-Q (Commission file number 1-3932) for the quarter ended March 31, 2011]10(iii)(r)Whirlpool Corporation 2010 Omnibus Stock and Incentive Plan Strategic Excellence Program Performance Unit Award (Z) [Incorporated by reference from Exhibit 10(iii)(b) to the Company's Form 10-Q (Commission file number 1-3932) for the quarter ended March 31, 2011]115 10(iii)(s)
10(iii)(t)
10(iii)(u)
10(iii)(v)
Whirlpool Corporation 2010 Omnibus Stock and Incentive Plan Strategic Excellence
Program Stock Option Grant (Z) [Incorporated by reference from Exhibit 10(iii)(c) to the
Company's Form 10-Q (Commission file number 1-3932) for the quarter ended March
31, 2011]
Whirlpool Corporation 2010 Omnibus Stock and Incentive Plan Strategic Excellence
Program Restricted Stock Unit Award (Z) [Incorporated by reference from Exhibit
10(iii)(d) to the Company's Form 10-Q (Commission file number 1-3932) for the quarter
ended March 31, 2011]
Whirlpool Corporation 2010 Omnibus Stock and Incentive Plan Strategic Excellence
Program Stock Option Grant Document (Z) [Incorporated by reference from Exhibit
10(iii)(a) to the Company's form 10-Q (Commission file number 1-3932) for the quarter
ended March 31, 2012]
Whirlpool Corporation 2010 Omnibus Stock and Incentive Plan Strategic Excellence
Program Performance Restricted Stock Unit / Performance Unit Grant Document (Z)
[Incorporated by reference from Exhibit 10(iii)(b) to the Company's form 10-Q
(Commission file number 1-3932) for the quarter ended March 31, 2012]
10(iii)(w)
Whirlpool Corporation Amended and Restated 2010 Omnibus Stock and Incentive Plan
Strategic Excellence Program Performance Unit Award for Executive Chairman (Z)
[Incorporated by reference from Exhibit 10.2 to the Company's Form 10-Q
(Commission file number 1-3932) for the quarter ended March 31, 2018]
10(iii)(x)
Whirlpool Corporation 2018 Omnibus Stock and Incentive Plan (Z) [Incorporated by
reference from Exhibit 10.1 to the Company's Form 8-K (Commission file number
1-3932) filed on April 18, 2018]
10(iii)(y)
Form of Compensation and Benefits Assurance Agreements (Z) [Incorporated by
reference from Exhibit 10.1 to the Company's Form 8-K (Commission file number
1-3932) filed on August 23, 2010]
10(iii)(z)
Whirlpool Corporation Executive Deferred Savings Plan (as amended effective January
1, 1992) (Z) [Incorporated by reference from Exhibit 10(iii)(n) to the Company's Annual
Report on Form 10-K (Commission file number 1-3932) for the fiscal year ended
December 31, 1993]
10(iii)(aa) Whirlpool Corporation Executive Deferred Savings Plan II (as amended and restated,
effective January 1, 2009), including Supplement A, Whirlpool Executive Restoration
Plan (as amended and restated, effective January 1, 2009) (Z) [Incorporated by
reference from Exhibit 10(iii)(y) to the Company's Annual Report on Form 10-K
(Commission file number 1-3932) for the fiscal year ended December 31, 2008]
10(iii)(bb)
Amendment to the Whirlpool Corporation Executive Deferred Savings Plan II (dated
December 21, 2009) (Z) [Incorporated by reference from Exhibit 10(iii)(x) to the
Company's Annual Report on Form 10-K (Commission file number 1-3932) for the fiscal
year ended December 31, 2009]
10(iii)(cc)
Whirlpool Retirement Benefits Restoration Plan (as amended and restated effective
January 1, 2009) (Z) [Incorporated by reference from Exhibit 10(iii)(dd) to the
Company's Annual Report on Form 10-K (Commission file number 1-3932) for the fiscal
year ended December 31, 2008]
116
10(iii)(dd) Whirlpool Supplemental Executive Retirement Plan (as amended and restated,
effective January 1, 2009) (Z) [Incorporated by reference from Exhibit 10(iii)(ee) to the
Company's Annual Report on Form 10-K (Commission file number 1-3932) for the fiscal
year ended December 31, 2008]
10(iii)(ee) Whirlpool Corporation Form of Indemnity Agreement (Z) [Incorporated by reference
from Exhibit 10.1 to the Company's Form 8-K (Commission file number 1-3932) filed on
February 23, 2006]
10(iii)(ff)
Whirlpool Corporation Performance Excellence Plan (Z) [Incorporated by reference
from Exhibit 10(iii)(a) to the Company's Quarterly Report on Form 10-Q (Commission
file number 1-3932) for the quarter ended March 31, 2014]
10(iii)(gg) Whirlpool Corporation 2014 Executive Performance Excellence Plan (Z) [Incorporated
by reference from Exhibit 10.1 to the Company's Form 8-K (Commission file number
1-3932) filed on April 17, 2014]
10(iii)(hh)
Agreement dated May 1, 2012 by and between Whirlpool Corporation and Mr. João
Carlos Costa Brega (Z) [Incorporated by reference from Exhibit 10(iii)(ii) to the
Company's Annual Report on Form 10-K (Commission file number 1-3932) for the fiscal
year ended December 31, 2015]
10(iii)(ii)
10(iii)(jj)
Permanent Employment Contract dated April 1, 2019, between Whirlpool EMEA S.p.A.
and Gilles Morel (Z) [Incorporated by reference from Exhibit 10(iii)(ii) to the Company’s
Annual Report on Form 10-K (Commission file number 1-3932) for the fiscal year
ended December 31, 2019]
Whirlpool Corporation 2018 Omnibus Stock and Incentive Plan Strategic Excellence
Program Performance Restricted Stock Unit Award Document (Z) [Incorporated by
reference from Exhibit 10.1 to the Company's Form 10-Q (Commission file number
1-3932) for the quarter ended March 31, 2019]
10(iii)(kk) Whirlpool Corporation 2018 Omnibus Stock and Incentive Plan Strategic Excellence
Program Stock Option Grant Document (Z) [Incorporated by reference from Exhibit
10.2 to the Company's Form 10-Q (Commission file number 1-3932) for the quarter
ended March 31, 2019]
10(iii)(ll)
Whirlpool Corporation 2018 Omnibus Stock and Incentive Plan Strategic Excellence
Program Restricted Stock Unit Award Document (Z) [Incorporated by reference from
Exhibit 10.3 to the Company's Form 10-Q (Commission file number 1-3932) for the
quarter ended March 31, 2019]
10(iii)(mm) Aircraft Time Sharing Agreement dated as of July 29, 2019 by and between Whirlpool
Corporation and Marc Bitzer [Incorporated by reference from Exhibit 10.1 to the
Company's Form 10-Q (Commission file number 1-3932) for the quarter ended
September 30, 2019]
18.1
21*
22*
Letter from Ernst & Young LLP dated April 22, 2021 [Incorporated by reference from
Exhibit 18.1 to the Company’s Form 10-Q (Commission file number 1-3932) for the
quarter ended March 31, 2021]
List of Subsidiaries
List of Guarantors and Subsidiary Issuers of Guaranteed Securities
117
23*
24*
31.1*
31.2*
32*
Consent of Independent Registered Public Accounting Firm
Power of Attorney
Certification of Chief Executive Officer, Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002
Certification of Chief Financial Officer, Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002
Certifications Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906
of the Sarbanes-Oxley Act of 2002
101.INS*
XBRL Instance Document - the instance document does not appear in the Interactive
Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH*
Inline XBRL Taxonomy Extension Schema Document
101.CAL*
Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*
Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*
Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE*
Inline XBRL Taxonomy Extension Presentation Linkbase Document
104*
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit
101)
* Filed Herewith
** Schedules (or similar attachments) have been omitted pursuant to Item 601(a)(5) of Regulation S-
K. The Company will furnish supplementally copies of such omitted schedules (or similar
attachments) to the Securities and Exchange Commission upon request.
118
SIGNATURESPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.WHIRLPOOL CORPORATION(Registrant)By: /s/ JAMES W. PETERSFebruary 10, 2022 James W. PetersExecutive Vice President and Chief Financial OfficerPursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated.Signature Title/s/ MARC R. BITZERChairman of the Board, President and Chief Executive Officer(Principal Executive Officer)Marc R. Bitzer /s/ JAMES W. PETERSExecutive Vice President and Chief Financial Officer(Principal Financial Officer)James W. Peters /s/ CHRISTOPHER S. CONLEYVice President and Corporate Controller(Principal Accounting Officer)Christopher S. ConleySAMUEL R. ALLEN*DirectorSamuel R. Allen GREG CREED*DirectorGreg Creed GARY T. DICAMILLO*DirectorGary T. DiCamillo DIANE M. DIETZ*DirectorDiane M. DietzGERRI T. ELLIOTT*DirectorGerri T. ElliottJENNIFER A. LACLAIR*DirectorJennifer A. LaClair JOHN D. LIU*DirectorJohn D. LiuJAMES M. LOREE*DirectorJames M. LoreeHARISH MANWANI*DirectorHarish ManwaniPATRICIA K. POPPE*DirectorPatricia K. PoppeLARRY O. SPENCER*DirectorLarry O. SpencerMICHAEL D. WHITE*DirectorMichael D. White *By: /s/ JAMES W. PETERS Attorney-in-Fact February 10, 2022 James W. Peters 119 REPORT BY MANAGEMENT ON THE CONSOLIDATED FINANCIAL STATEMENTSThe management of Whirlpool Corporation has prepared the accompanying financial statements. The financial statements have been audited by Ernst & Young LLP, an independent registered public accounting firm, whose report, based upon their audits, expresses the opinion that these financial statements present fairly the consolidated financial position, statements of income and cash flows of Whirlpool and its subsidiaries in accordance with accounting principles generally accepted in the United States. Their audits are conducted in conformity with the auditing standards of the Public Company Accounting Oversight Board (United States). The financial statements were prepared from the Company's accounting records, books and accounts which, in reasonable detail, accurately and fairly reflect all material transactions. The Company maintains a system of internal controls designed to provide reasonable assurance that the Company's books and records, and the Company's assets are maintained and accounted for, in accordance with management's authorizations. The Company's accounting records, compliance with policies and internal controls are regularly reviewed by an internal audit staff. The audit committee of the Board of Directors of the Company is composed of six independent directors who, in the opinion of the board, meet the relevant financial experience, literacy, and expertise requirements. The audit committee provides independent and objective oversight of the Company's accounting functions and internal controls and monitors (1) the integrity of the Company's financial statements, (2) the Company's compliance with legal and regulatory requirements, (3) the independent registered public accounting firm's qualifications and independence, and (4) the performance of the Company's internal audit function and independent registered public accounting firm. In performing these functions, the committee has the responsibility to review and discuss the annual audited financial statements and quarterly financial statements and related reports with management and the independent registered public accounting firm, including the Company's disclosures under "Management's Discussion and Analysis of Financial Condition and Results of Operations," to monitor the adequacy of financial disclosure. The committee also has the responsibility to retain and terminate the Company's independent registered public accounting firm and exercise the committee's sole authority to review and approve all audit engagement fees and terms and pre-approve the nature, extent, and cost of all non-audit services provided by the independent registered public accounting firm. /s/ JAMES W. PETERSJames W. PetersExecutive Vice President and Chief Financial OfficerFebruary 10, 2022120 MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTINGThe management of Whirlpool Corporation is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a – 15(f) and 15d – 15(f) under the Securities Exchange Act of 1934. Whirlpool's internal control system is designed to provide reasonable assurance to Whirlpool's management and board of directors regarding the reliability of financial reporting and the preparation and fair presentation of published financial statements. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. The management of Whirlpool assessed the effectiveness of Whirlpool's internal control over financial reporting as of December 31, 2021. In making this assessment, it used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control—Integrated Framework (2013 Framework). Based on the assessment and those criteria, management believes that Whirlpool maintained effective internal control over financial reporting as of December 31, 2021.Whirlpool's independent registered public accounting firm has issued an audit report on its assessment of Whirlpool's internal control over financial reporting. This report appears on page 125./s/ MARC R. BITZER /s/ JAMES W. PETERSMarc R. Bitzer James W. PetersChairman of the Board, President and Chief Executive Officer Executive Vice President and Chief Financial OfficerFebruary 10, 2022 February 10, 2022121 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTo the Shareholders and Board of Directors of Whirlpool CorporationOpinion on the Financial StatementsWe have audited the accompanying consolidated balance sheets of Whirlpool Corporation (the Company) as of December 31, 2021 and 2020, the related consolidated statements of income (loss), comprehensive income (loss), stockholders' equity and cash flows for each of the three years in the period ended December 31, 2021, and the related notes and financial statement schedule listed in the index at Item 15(a) (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company at December 31, 2021 and 2020, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2021, in conformity with U.S. generally accepted accounting principles.We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 10, 2022 expressed an unqualified opinion thereon.Basis for OpinionThese financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.Critical Audit MattersThe critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.122 Valuation of Unrecognized Income Tax BenefitsDescription of the MatterAs of December 31, 2021, the Company has Unrecognized Income Tax Benefits of $580 million as described in Note 15 to the consolidated financial statements. The Company records the benefits of an uncertain tax position in the consolidated financial statements after determining it is more likely than not that the uncertain tax position will be sustained upon examination based on its technical merits. Auditing management’s accounting and disclosure for these unrecognized tax benefits was complex because the evaluation is based on interpretations of domestic and international tax laws, is subjective, and requires significant judgement.How We Addressed the Matter in Our AuditWe identified and tested controls that address the risk of material misstatement relating to the valuation of these income tax matters. This included, among others, testing controls over the Company’s process to assess the technical merits and measurement of these positions. We also tested the Company’s process to determine the disclosure for these matters.With the assistance of our income tax professionals, we performed audit procedures that included, among others, evaluating the technical merits, measurement and related disclosure for the Company’s positions. For example, we assessed the inputs utilized and the conclusions reached in the assessments performed by management. We also examined the Company’s communications with the relevant tax authorities and read the minutes of the meetings of the committees of the board of directors. In addition, we used our knowledge of historical settlement activity, tax laws, and other market information to evaluate the technical merits of the Company’s positions.123 Revenue Recognition - Completeness and Valuation of Customer Sales Incentives (Promotions Liabilities)Description of the MatterAs of December 31, 2021, the Company’s accrued promotional liability was $854 million. As discussed in Note 2 to the consolidated financial statements, the Company recognizes a reduction to revenue and a corresponding accrued promotional liability based on the amount of customer sales incentives to be paid to trade customers. This estimate is accounted for as a reduction to revenue in the period incurred and primarily calculated using the expected value method. Auditing the accrued promotions liability was complex and subjective due to the large volume of activity, the manual nature of adjustments made to the liability in certain countries, and the inherent estimation uncertainty in the process performed to estimate the reduction to revenue and corresponding promotional liability. In addition, assessing the completeness of the accrual required significant auditor judgment.How We Addressed the Matter in Our AuditWe obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the completeness and valuation of the reduction to revenue and corresponding promotional liability. For example, we tested controls over management’s review of adjustments to the accrual, as well as their review of significant assumptions to the accrual, including the validation of third-party sales data.Our audit procedures over completeness and valuation included, among others, testing a sample of key inputs to the promotional liability, including reviewing key customer contractual agreements and third-party sales data. We performed testing over activity subsequent to the balance sheet date to determine the impact, if any, these items have on the 2021 financial statements. In addition, to assess management’s estimation accuracy, we perform a lookback analysis which compares the amount accrued in the prior year to the amount subsequently paid. We also performed analytical procedures on a disaggregated level and performed inquiries of sales personnel and key finance management personnel. /s/ Ernst & Young LLP We have served as the Company's auditor since 1927.Chicago, IllinoisFebruary 10, 2022124 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and Board of Directors of Whirlpool Corporation
Opinion on Internal Control over Financial Reporting
We have audited Whirlpool Corporation's internal control over financial reporting as of December 31, 2021,
based on criteria established in Internal Control-Integrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our
opinion, Whirlpool Corporation (the Company) maintained, in all material respects, effective internal control
over financial reporting as of December 31, 2021, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board
(United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2021 and
2020, the related consolidated statements of income (loss), comprehensive income (loss), stockholders'
equity and cash flows for each of the three years in the period ended December 31, 2021, and the related
notes and financial statement schedule listed in the index at Item 15(a) and our report dated February 10,
2022 expressed an unqualified opinion thereon.
Basis for Opinion
The Company's management is responsible for maintaining effective internal control over financial
reporting and for its assessment of the effectiveness of internal control over financial reporting included in
the accompanying Management's Report on Internal Control over Financial Reporting. Our responsibility is
to express an opinion on the Company's internal control over financial reporting based on our audit. We are
a public accounting firm registered with the PCAOB and are required to be independent with respect to the
Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the
Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether effective internal control over
financial reporting was maintained in all material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk
that a material weakness exists, testing and evaluating the design and operating effectiveness of internal
control based on the assessed risk, and performing such other procedures as we considered necessary in
the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company's internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles. A company's internal control over
financial reporting includes those policies and procedures that (1) pertain to the maintenance of records
that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the
company; (2) provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting principles, and that
receipts and expenditures of the company are being made only in accordance with authorizations of
management and directors of the company; and (3) provide reasonable assurance regarding prevention or
timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a
material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk
that controls may become inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.
/s/ Ernst & Young LLP
Chicago, Illinois
February 10, 2022
125
SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS
WHIRLPOOL CORPORATION AND SUBSIDIARIES
Years Ended December 31, 2021, 2020 and 2019
(Millions of dollars)
Description
Allowance for doubtful accounts
Year Ended December 31, 2021:
Year Ended December 31, 2020:
Year Ended December 31, 2019:
Deferred tax valuation allowance (2)
Balance at
Beginning
of Period
Charged to
Cost and
and Expenses
Deductions(1)
Balance at
End
of Period
$
132 $
132
136
6 $
42
16
(41) $
(42)
(20)
97
132
132
Year Ended December 31, 2021:
Year Ended December 31, 2020:
Year Ended December 31, 2019:
195
214
192
(1) With respect to allowance for doubtful accounts, the amounts represent accounts charged off, net of translation
(20) $
12
(150)
214 $
192
348
10
(6)
1 $
$
adjustments and transfers. Recoveries were nominal for 2021, 2020 and 2019.
(2)
For additional information about our deferred tax valuation allowances, refer to Note 15 to the Consolidated Financial
Statements.
126
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A RECORD
$22B
ANNUAL SALES
BRANDS WITH
7
$1B+
IN SALES
54
MANUFACTURING
AND TECHNOLOGY
CENTERS
69K
EMPLOYEES
SALES BY
REGION
● 57%
North America
● 23%
Europe, Middle East,
Africa
● 14%
Latin America
● 6%
Asia
SALES BY
CATEGORY
● 30%
Refrigeration
● 28%
Laundry Appliances
● 26%
Cooking Appliances
● 16%
Dishwashing and Other
Stockholder and
Other Information
Whirlpool Corporation’s Annual Report on
Form 10-K and other financial information
is available free of charge to stockholders.
The information contained in this Annual
Report should be read together with Whirlpool
Corporation’s Financial Statements and related
notes and “Management’s Discussion and Analysis”
and “Forward-Looking Statements.” This information
appears in the company’s 2021 Annual Report on
Form 10-K filed with the Securities and Exchange
Commission, which is included herewith and
available on the company’s website at Investors.
WhirlpoolCorp.com.
The Annual Report on Form 10-K and company
earnings releases for each quarter—typically
issued in April, July, October and January—can be
obtained by contacting:
Willyam K. Thomas
Senior Director, Investor Relations
Whirlpool Corporation
2000 N. M-63, Mail Drop 2609
Benton Harbor, MI 49022-2692
Telephone: 269-923-2641
Fax: 269-923-3525
Email: investor_relations@whirlpool.com
Stock Exchanges
Common stock of Whirlpool Corporation
(exchange symbol: WHR) is listed on the New York
and Chicago stock exchanges.
Trademarks
Acros, affresh, Amana, Ariston, Artisan, Bauknecht,
Brastemp, Care Counts, Consul, Elica, Eslabon de
Lujo, Everydrop, Gladiator, Hotpoint*, Ignis, Indesit,
JennAir, KitchenAid, Load & Go, Maytag, Privileg,
Roper, Speed Queen, Swash, Whirlpool, Yummly and
the design of the stand mixer are trademarks of
Whirlpool Corporation or its wholly or majority-
owned affiliates.
*Whirlpool Corporation ownership of the
Hotpoint brand in EMEA and Asia Pacific regions
is not affiliated with the Hotpoint brand sold in
the Americas.
Energy Star, United Way, Habitat For Humanity
International and certain other trademarks are
owned by their respective companies.
Whirlpool Corporation
Please visit our online Annual Report
at WhirlpoolCorp.com/2021Annual
2021
Annual Report
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