What changed in this filing

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Item 7. Management’s Discussion and Analysis

2022-02-10 compared with 2021-02-11 · 275 added, 270 removed, 369 unchanged (60% of the section changed)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Management Discussion and Analysis should be read in connection with the Consolidated Financial Statements, Notes to the Consolidated Financial Statements and Selected Financial Data included in this Form 10-K.

The 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.

Whirlpool delivered full-year GAAP net earnings available to Whirlpool of $1.1 billion (net earnings margin of 5.6%), or $17.07 per share, compared to GAAP net earnings available to Whirlpool of $1.2 billion (net earnings margin of 5.8%), or $18.45 per share in the same prior-year period.

On a GAAP basis, net earnings margins were impacted by increased restructuring costs.

In the same prior-year period, the approximately $511 million gain on the sale of our Embraco compressor business favorably impacted net earnings available to Whirlpool.

Solid cash provided by operating activities of $1.5 billion, compared to $1.2 billion in 2019, was driven by higher earnings and working capital improvement.

Despite ongoing disruptions from COVID-19, Whirlpool delivered ongoing (non-GAAP) earnings per share of $18.55 and full-year ongoing EBIT margin of 9.1%, compared to $16.00 and 6.9% in the same prior-year period.

These results were driven by positive price/mix, strong cost takeout, and raw material deflation, partially offset by increased brand investments and currency.

In addition, we delivered record free cash flow (non-GAAP) of $1.2 billion in 2020, compared to $912 million in 2019, primarily driven by strong earnings and lower capital expenditures.

Lastly, we strengthened our balance sheet and made strong progress toward our long-term gross debt leverage target.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS - (CONTINUED)

Whirlpool 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 successful execution of our go-to-market initiatives, new product introductions and the successful execution of our cost-takeout program.

Lastly, the strong actions

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 Goals

Reconciliations 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)

Updated 5-6% 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 AND

RESULTS OF OPERATIONS - (CONTINUED)

taken in EMEA have returned the region to profitability, in line with our expectations, demonstrating the effectiveness of our strategic actions to date.

Our strong 2020 results demonstrate the agility and resiliency of our business model and the effectiveness of our COVID-19 response plan.

This momentum provides us confidence that we will continue to deliver on our long-term financial goals in 2021.

RESULTS OF OPERATIONS

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Interest expense 175 7.4 189 (1.1) 187

Income tax expense 384 (8.7) 354 nm 138

Net earnings (loss) available to Whirlpool 1,081 (8.8) 1,184 nm (183)

Diluted net earnings (loss) available to Whirlpool per share $ 17.07 (7.5)% $ 18.45 nm $ (2.72)

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

not meaningful

Consolidated 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 (non-GAAP) for 2020 increased 1.1% compared to 2019.

Consolidated net sales for 2019 decreased 2.9% compared to 2018, primarily driven by the divestiture of the Embraco compressor business, unfavorable foreign currency and unit volume declines, partially offset by the favorable impact of product price/mix.

Organic net sales for 2019 increased 1.6% compared to 2018.

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.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS - (CONTINUED)

The chart below summarizes the balance of net sales by operating segment for 2020, 2019 and 2018, respectively.

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.

The consolidated gross margin percentage for 2019 increased to 17.3% compared to 16.8% in 2018, primarily driven by the favorable impact of product price/mix, cost reduction initiatives in the EMEA region and a gain on sale-leaseback, partially offset by lower unit volumes, cost inflation (raw material, tariff and freight costs) in the North America region, unfavorable foreign currency and product warranty expense related to certain EMEA-produced washers.

Results of Operating Segments

Our 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 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.

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.

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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 in 2020.

Additionally, operating segments have been impacted by disruptions in supply chains, distribution channels, and demand, among other COVID-19 related impacts.

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 AND

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Net Sales Summary

Net 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.

Net sales for 2019 increased 0.9% compared to 2018 primarily due to the favorable impact of product price/mix, partially offset by lower volumes.

Excluding the impact of foreign currency, net sales increased 1.1% in 2019.

EBIT margin for 2021 was 17.8% compared to 15.7% for 2020.

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.

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, partially offset by cost inflation (raw material, tariffs and freight costs).

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.

Net Sales Summary

Net 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.

Net sales for 2019 decreased 5.3% compared to 2018, primarily due to unfavorable impacts of foreign currency and product price/mix.

Excluding the impact of foreign currency, net sales decreased 1.1% in 2019.

EBIT margin for 2021 was 2.0% compared to 0.0% for 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.

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 2019, EBIT increased primarily due to the favorable impact of cost reduction initiatives.

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

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Net Sales Summary

Net sales for 2020 decreased 18.4% compared to 2019 primarily driven by 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.

Net sales for 2019 decreased 12.2% compared to 2018 primarily due to the divestiture of the Embraco compressor business and the unfavorable impact of foreign currency, partially offset by volume growth.

Net 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 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.

EBIT margin for 2019 was 5.4% compared to 5.8% for 2018.

EBIT decreased primarily due to the divestiture of the Embraco compressor business and the unfavorable impact of foreign currency, partially offset by favorable product price/mix.

Net Sales Summary

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.

Net 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 2019 decreased 4.5% compared to 2018 primarily due to the unfavorable impacts of foreign currency and product price/mix, partially offset by volume growth.

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 margin for 2021 was 5.4% compared to (0.5)% for 2020.

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.

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 the unfavorable impacts of product price/mix and brand investments in China, partially offset by the favorable impacts of volume growth and cost productivity in India.

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

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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 2020 decreased compared to 2019 due to fixed cost actions and reduced investments in marketing.

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.

Restructuring

We 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 2021, we expect to incur approximately $100 million of restructuring charges, driven by our previously announced global cost reduction efforts.

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 Intangibles

No 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.

We recorded an impairment charge of $747 million related to goodwill ($579 million) and other intangibles ($168 million) for the year ended December 31, 2018 related to 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 Businesses

On 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.

The gain calculation is no longer subject to change, as amounts for working capital and other customary post-closing adjustments have been finalized.

A $7 million gain related to final purchase price adjustments was recorded in the third quarter of 2020.

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).

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Interest and sundry (income) expenses were $(159) million, $(21) million and $(168) million for the years ended December 31, 2021, 2020 and 2019, respectively.

Interest and sundry (income) expense decreased $147 million in 2020 compared to 2019, primarily due to the prior year effect of Brazil indirect tax credits and trade customer insolvency claim settlement, partially offset by the favorable impact of foreign currency.

Interest and sundry income decreased $276 million in 2019 compared to 2018, primarily due to the effect of Brazil indirect tax credits recorded of $180 million, which reflects $196 million of indirect tax credits, net of related fees, partially offset by a trade customer insolvency claim settlement of €52.75 million (approximately $59 million as of December 31, 2019) and foreign currency.

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.

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Interest expense was $175 million, $189 million and $187 million for the years ended December 31, 2021, 2020 and 2019, respectively.

Interest expense in 2020 was comparable to 2019 and 2018.

Interest expense decreased in 2021 compared to 2020 primarily due to short-term debt reduction.

Interest expense was comparable in 2020 to 2019.

Income 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.

The increase in tax expense in 2019 compared to 2018 is primarily due to higher earnings before tax, reduced foreign tax credits and the sale of Embraco, partially offset by net reductions in valuation allowances, and impacts from a statutory legal entity restructuring.

As part of ongoing efforts to reduce costs and simplify the Company's legal entity structure, the Company completed in 2019 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.

See Note 15 to the Consolidated Financial Statements for additional information.

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FORWARD-LOOKING PERSPECTIVE

Earnings per diluted share presented below are net of tax, while each adjustment is presented on a pre-tax basis.

The aggregate income tax impact of the taxable components of each adjustment is presented in the income tax impact line item at our anticipated 2021 full-year tax rate between 24.0% and 26.0%.

Based 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:

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Estimated earnings per diluted share, for the year ending December 31, 2022 $27.00 — $29.00

Restructuring Expense $(1.59)

Income Tax Impact $0.39

Industry demand

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Asia 5% —% 6%

For the full-year 2021, we expect to generate cash from operating activities of $1.6 billion and free cash flow of $1 billion or more, including restructuring cash outlays of approximately $225 million and, with respect to free cash flow, capital expenditures of approximately $600 million.

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.

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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 2021 we define free cash flow as cash provided by operating activities less capital expenditures and including proceeds from the sale of assets/businesses.

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.

Millions of dollars Current Outlook

Cash provided by operating activities (1)

Capital expenditures and proceeds from sale of assets/businesses (550)

Cash provided by (used in) operating activities (1)

Capital expenditures (700)

Free cash flow $1,500

6 unchanged sentences

• EBIT margin

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS - (CONTINUED)

• Ongoing EBIT

• Ongoing earnings per diluted share

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS - (CONTINUED)

• Ongoing EBIT margin

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• Organic net sales (net sales excluding foreign currency and Embraco)

• Free cash flow

• Free cash flow and adjusted free cash flow

• Gross debt leverage

Ongoing 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.

Ongoing EBIT margin is calculated by dividing ongoing EBIT by net sales for 2020, 2019 and 2018.

Sales excluding foreign currency is calculated by translating the current period net sales, in functional currency, to U.S.

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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 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 related metrics, such as free cash flow as a percentage of net sales, as long-term management goals, not an element of its annual financial guidance, and as such does not provide a reconciliation of free cash flow to cash provided by (used in) operating activities, the most directly comparable GAAP measure, for these long-term goal metrics.

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/EBITDA, as 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.

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Please refer to a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures below.

Total Whirlpool Organic Net Sales Reconciliation:

Twelve Months Ended December 31,

2020 2019 Change

Net sales $ 19,456 $ 20,419 (4.7) %

Embraco net sales — (635)

currency 551 —

Organic net sales $ 20,007 $ 19,784 1.1 %

Total Whirlpool Organic Net Sales Reconciliation:

Twelve Months Ended December 31,

2019 2018 Change

Net sales $ 20,419 $ 21,037 (2.9) %

Embraco net sales (635) (1,135)

currency 430 —

Organic net sales $ 20,214 $ 19,902 1.6 %

Latin America Organic Net Sales Reconciliation:

Twelve Months Ended December 31,

2020 2019 Change

Net sales $ 2,592 $ 3,177 (18.4) %

Embraco net sales — (635)

currency 530 —

Organic net sales $ 3,122 $ 2,542 22.8 %

Latin America Organic Net Sales Reconciliation:

Twelve Months Ended December 31,

2019 2018 Change

Net sales $ 3,177 $ 3,618 (12.2) %

Embraco net sales (635) (1,135)

currency 171 —

Organic net sales $ 2,713 $ 2,483 9.3 %

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS - (CONTINUED)

Ongoing Earnings Before Interest & Taxes (EBIT) Reconciliation:

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Earnings before interest & taxes $ 2,499 $ 1,636 $ 1,717

Restructuring expense 288 188 247

Corrective action recovery (14) — —

Product warranty and liability (income) expense (30) 131 —

(Gain) loss on sale and disposal of businesses (7) (437) —

Sale-leaseback, real estate and receivable adjustments (113) (86) —

Trade customer insolvency claim settlement — 59 —

Brazil indirect tax credit — (180) —

Impairment of goodwill and intangibles — — 747

France antitrust settlement — — 103

Trade customer insolvency — — 30

Divestiture related transition costs — — 21

Restructuring expense (a)

(Gain) loss on previously held equity interest (b)

(Gain) loss on sale and disposal of businesses (c)

(107) (7) (437)

Product warranty and liability (income) expense (d)

Corrective action recovery (e)

Sale-leaseback, real estate and receivable adjustments (f)

Trade customer insolvency claim settlement (g)

Brazil indirect tax credit (h)

Ongoing EBIT (2)

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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.

(3) Additional information about each of our adjustments for ongoing EBIT is available under Supplemental Information on our Investor Relations website at investors.whirlpoolcorp.com.

The contents of this 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.

Ongoing Earnings Per Diluted Share Reconciliation:

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Earnings per diluted share $ 28.36 $ 16.98

Restructuring expense 4.54 2.93

Corrective action recovery (0.22) —

Sale-leaseback, real estate and receivable adjustments (1.77) (1.34)

(Gain) loss on sale and disposal of businesses (0.10) (6.79)

Product warranty and liability expense (0.47) 2.04

Brazil indirect tax credit — (2.80)

Trade customer insolvency claim settlement — 0.92

Restructuring expense (a)

(Gain) loss on previously held equity interest (b)

(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)

Sale-leaseback, real estate and receivable adjustments (f)

Income tax impact 0.41 (0.53)

Normalized tax rate adjustment 0.03 1.84

Normalized tax rate adjustment (i)

Ongoing earnings per diluted share $ 26.59 $ 18.46

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RESULTS OF OPERATIONS - (CONTINUED)

Free Cash Flow (FCF) Reconciliation:

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:

Twelve Months Ended December 31,

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Repayment of term loan (5)

Free cash flow $ 1,246 $ 912 $ 853

Adjusted free cash flow $ 1,963 $ 1,246 $ 912

Cash provided by (used in) investing activities $ (660) $ (237) $ 636

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(3) See Note 4 to the Consolidated Financial Statements for additional information

(5) 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 to date for the sale of the Embraco compressor business;

(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:

Twelve Months Ended December 31,

2020 2019 Change

Net sales $ 19,456 $ 20,419 (4.7) %

Embraco net sales — (635)

currency 551 —

Organic net sales $ 20,007 $ 19,784 1.1 %

Latin America Organic Net Sales Reconciliation:

Twelve Months Ended December 31,

2020 2019 Change

Net sales $ 2,592 $ 3,177 (18.4) %

Embraco net sales — (635)

currency 530 —

Organic net sales $ 3,122 $ 2,542 22.8 %

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS - (CONTINUED)

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 Ended

Ongoing earnings before interest, taxes, depreciation & amortization:

December 31, 2021

Net 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)

(Gain) loss on previously held equity interest (b)

(Gain) loss on sale and disposal of businesses (c)

Product warranty and liability (income) expense (d)

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 Ended

Gross debt outstanding:

December 31, 2021

Long-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 Ended

Gross debt to ongoing EBITDA ratio:

December 31, 2021

Gross debt outstanding $ 5,237

Ongoing earnings before interest, taxes, depreciation and amortization $ 2,873

Gross debt leverage (gross debt to ongoing EBITDA) ratio 1.8

(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 AND

RESULTS OF OPERATIONS - (CONTINUED)

(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 AND

RESULTS OF OPERATIONS - (CONTINUED)

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

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and providing returns to shareholders through dividends, share repurchases and maintaining our strong investment grade rating.

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 liquidity include funding our ongoing capital spending, restructuring activities, and returns to shareholders.

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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, 2020, we had cash or cash equivalents greater than 1% of our consolidated assets in the United States, China, Brazil, India and Mexico, which represented 6.5%, 1.7%, 1.7%, 1.4% and 1.4%, respectively.

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.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS - (CONTINUED)

Notes payable consists of short-term borrowings payable to banks and commercial paper, which are generally used to fund working capital requirements.

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See Note 7 to the Consolidated Financial Statements for additional information.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS - (CONTINUED)

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.

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.

Whirlpool India has an option to acquire the remaining equity interest in the future for fair value, and the non-Whirlpool India shareholders of Elica PB India received an option to sell their remaining equity interest to Whirlpool India in the future for fair value, which could be material to the financial statements depending on the performance of the venture.

We account for our minority interest under the equity method of accounting.

We continue to review customer conditions globally.

At December 31, 2020, we had 173 million Brazilian reais (approximately $33 million at December 31, 2020) in short and long-term receivables due to us from Maquina de Vendas S.A., a trade customer in Brazil.

In 2018, as part of their extrajudicial recovery plan, we agreed to receive payment of our outstanding receivable, plus interest, over eight years under a tiered payment schedule.

During the third quarter of 2020, we received insurance proceeds of 129 million Brazilian reais (approximately $23 million at September 30, 2020) related to this matter.

After consideration of the allowance for expected credit losses, we do not expect this matter to have a material impact on financial results in future periods.

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.

Embraco Sale Transaction

On April 24, 2018, we and certain of our subsidiaries entered into a purchase agreement with Nidec Corporation, a leading manufacturer of electric motors incorporated under the laws of Japan, to sell our Embraco business unit (the "Transaction").

On June 26, 2019, Whirlpool and Nidec received the European Commission's final approval of the Transaction, and the parties closed the Transaction on July 1, 2019.

At closing, pursuant to the purchase agreement and a subsequent agreement memorializing the purchase price adjustment, the Company received $1.1 billion inclusive of anticipated cash on hand at the time of closing, with final purchase price amounts subject to working capital and other customary post-closing adjustments.

These adjustments have been finalized with an immaterial adjustment to the final purchase price amounts in 2020.

Whirlpool has agreed to retain certain liabilities relating to tax, environmental, labor and products following closing of the Transaction.

On August 9, 2019, the Company repaid $1.0 billion pursuant to the Company's April 23, 2018 Term Loan Agreement by and among the Company, Citibank, N.A., as Administrative Agent, JPMorgan Chase Bank, N.A.

as Syndication Agent, and certain other financial institutions, representing full repayment of amounts borrowed under the term loan.

As previously disclosed, the Company agreed to repay this outstanding term loan amount with the net cash proceeds received from the sale of Embraco.

For additional information on the Embraco sale transaction, see Note 17 to the Consolidated Financial Statements.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS - (CONTINUED)

Share Repurchase Program

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We 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, 2020 increased $982 million compared to the same period in 2019.

Our cash, cash equivalents and restricted cash at December 31, 2021 increased $110 million compa red 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.

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Cash Flows from Operating Activities

Cash provided by o perating activities in 2021 increased compared to 2020.

The increase was primarily driven by stro ng 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.

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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.

Cash provided by operating activities in 2019 was comparable to 2018.

The impact of working capital primarily includes inventory reductions efforts, credit management activities and the divestiture of the Embraco compressor business.

Net earnings includes the non-cash impacts from the gain on sale and disposal of businesses.

The decrease in cash provided by operating activities during 2018 primarily reflects $350 million of discretionary pension funding, partially offset by the working capital impact from inventory reduction efforts, lower volumes and credit management activities.

Net loss includes the non-cash impacts from impairment of goodwill and other intangibles.

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, 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 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 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 AND

RESULTS OF OPERATIONS - (CONTINUED)

management, as well as receivable and payment terms.

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 (approximately $140 million) and a decrease in capital expenditures (approximately $60 million).

The decrease in cash used in investing activities during 2018 primarily reflects proceeds from a real estate sale-leaseback transaction (approximately $130 million), a decrease in capital expenditures (approximately $95 million), and the proceeds related to held-to-maturity securities (approximately $60 million).

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).

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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.

The decrease in cash used in financing activities during 2018 primarily reflects higher proceeds from borrowings of short-term debt (increase of approximately $300 million) and lower repayments of long-term debt (decrease of approximately $175 million), partially offset by higher share repurchase activity (increase of approximately $400 million).

We also acquired a minority interest in Elica PB India.

Dividends paid in financing activities approximated $300 million during 2020, 2019 and 2018.

Dividends paid in financing activities were $338 million, $311 million, and $305 million during 2021, 2020 and 2019, respectively.

Financing Arrangements

The Company had total committed credit facilities of approximately $4.2 billion at December 31, 2020.

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, 2020 and 2019, respectively.

We ha d no borro wings outstanding under the committed credit facilities at December 31, 2021 and 2020, respectively.

See Note 7 to the Consolidated Financial Statements for additional information.

In October 2020, our Board of Directors approved a 4.2% increase in our quarterly dividend on our common stock to $1.25 per share from $1.20 per share.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS - (CONTINUED)

CONTRACTUAL OBLIGATIONS AND FORWARD-LOOKING CASH REQUIREMENTS

The following table summarizes our expected cash outflows resulting from financial contracts and commitments:

Payments due by period

Millions of dollars Total 2021 2022 & 2023 2024 & 2025 Thereafter

Long-term debt obligations (1)

$ 7,448 $ 463 $ 831 $ 884 $ 5,270

Operating lease obligations (2)

1,210 211 349 253 397

Purchase obligations (3)

556 214 221 79 42

United States and foreign pension plans (4)

107 18 37 40 12

What changed 10-K

Item 7. Management’s Discussion and Analysis