What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2022-02-10 compared with 2021-02-11 · 331 added, 348 removed, 1460 unchanged (32% of the section changed)

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Segment Information

Divestitures and Held for Sale

Quarterly Results of Operations (Unaudited)

Report of independent Registered Public Accounting Firm (PCAOB ID:

WHIRLPOOL CORPORATION

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Income tax expense (benefit) 518 382 348

Equity method investment income (loss), net of tax ( 8 ) — —

Net earnings 1,806 1,065 1,182

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Stockholders' equity

Common stock, $ 1 par value, 250 million shares authorized, 113 million shares issued, and 63 million and 63 million shares outstanding, respectively

Common 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

Additional paid-in capital 3,025 2,923

1 unchanged sentence

Accumulated other comprehensive loss ( 2,357 ) ( 2,811 )

Treasury stock, 50 and 49 million shares, respectively

Treasury stock, 55 million and 50 million shares, respectively

( 6,106 ) ( 5,065 )

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(Gain) loss on sale and disposal of businesses ( 105 ) ( 7 ) ( 437 )

(Gain) loss on previously held equity interest ( 42 ) — —

Changes in assets and liabilities:

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Capital expenditures ( 525 ) ( 410 ) ( 532 )

Proceeds from sale of assets and business 166 1,174 160

Proceeds from held-to-maturity securities — — 60

Investment in related businesses — — ( 25 )

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 )

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Net proceeds from borrowings of long-term debt 300 1,033 700

Repayments of long-term debt ( 569 ) ( 949 ) ( 386 )

Net proceeds (repayments) of long-term debt ( 300 ) ( 569 ) ( 949 )

Net proceeds (repayments) from short-term borrowings ( 1 ) ( 330 ) ( 723 )

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Repurchase of common stock ( 1,041 ) ( 121 ) ( 148 )

Purchase of noncontrolling interest shares — — ( 41 )

Common stock issued 76 44 8

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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 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 information

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Adjustment to beginning retained earnings $ 61 $ 61

Adjustment to beginning accumulated other comprehensive loss $ ( 17 ) $ ( 17 )

Stock issued (repurchased) ( 110 ) — — ( 110 ) — —

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Comprehensive income 874 1,075 ( 193 ) — — ( 8 )

Adjustment to beginning retained earnings 61 61 — — — —

Stock issued (repurchased) 28 — — 27 1 —

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Dividends declared ( 340 ) ( 338 ) — — — ( 2 )

Acquisitions and divestitures ( 764 ) — — — — ( 764 )

Balances, December 31, 2021 $ 5,013 $ 10,170 $ ( 2,357 ) $ ( 3,081 ) $ 114 $ 167

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

(1) SIGNIFICANT ACCOUNTING POLICIES

General Information

Whirlpool Corporation, a Delaware corporation, manufactures products in 13 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 and Hotpoint *.

Whirlpool 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.

Whirlpool Corporation's operating and reportable segments consist of North America;

Europe, Middle East and Africa ("EMEA");

Latin America and Asia.

Principles of Consolidation

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Risks and Uncertainties

COVID-19 continues to spread throughout the United States and other countries across the world, and the duration and severity of the effects are currently unknown.

The pandemic has impacted the Company and could materially impact our financial results in the future.

The 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.

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and the allowance for expected credit losses and bad debt.

Events and changes in circumstances arising after February 11, 2021, including those resulting from the impacts of COVID-19, will be reflected in management’s estimates for future periods.

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 assets

We continue to monitor the significant global economic uncertainty as a result of COVID-19 to assess the outlook for demand for our products and the impact on our business and our overall financial performance.

The goodwill in our EMEA reporting unit and our Indesit , Hotpoint* and Maytag trademarks continue to be at risk at December 31, 2020.

In addition, we have concluded our JennAir trademark (carrying value of $ 304 million) to be at risk at December 31, 2020.

The goodwill in our other reporting units or indefinite-lived intangible assets are not presently at risk for future impairment.

The potential impact of COVID-19 related demand disruptions, production impacts and supply constraint impacts on our operating results for the EMEA reporting unit in the short-term is uncertain, but we remain committed to the strategic actions necessary to realize the long-term forecasted EBIT margins and expect that the macroeconomic environment will recover in the medium to long-term.

The potential negative demand effect on revenues for the Indesit, Hotpoint *, Maytag and JennAir trademarks are also uncertain given the volatile environment, but we expect that demand and production levels will continue to recover.

A lack of recovery or further deterioration in market conditions, a sustained trend of weaker than expected financial performance in EMEA or for our Indesit , Hotpoint*, JennAir and Maytag trademarks or a significant decline in the Company’s market capitalization, among other factors,

We 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.

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as a result of the COVID-19 pandemic or other unforeseen events could result in an impairment charge in future periods which could have a material adverse effect on our financial statements.

Use of Estimates

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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 $ 0.6 billion and $ 1.0 billion during the twelve months ended December 31, 2020 and December 31, 2019, respectively, from the sales of accounts receivables.

These transfers primarily do not require continuing involvement from the Company.

Outstanding accounts receivable transferred under arrangements where the Company continues to

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.

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service the transferred asset were $ 30 million and $ 348 million as of December 31, 2020 and December 31, 2019, respectively.

Freight and Warehousing Costs

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See Note 11 to the Consolidated Financial Statements for additional information.

Restricted Cash

As of December 31, 2020, restricted cash of $ 10 million represents contributions held as part of the Company's Charitable Foundation that was consolidated in 2020.

As of December 31, 2019, the Company had no restricted cash.

As of December 31, 2018, the Company had restricted cash of $ 40 million which represented cash required to be used to fund capital expenditures and technical resources to enhance Whirlpool China's research and development and working capital, as required by the terms of the Hefei Sanyo acquisition.

See Note 4 to the Consolidated Financial Statements for additional information.

Fair Value Measurements

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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.

United States production inventories are stated at last-in, first-out ("LIFO") cost.

North America and EMEA reporting segments use the FIFO method of inventory valuation.

Latin America and Asia inventories are stated at average cost.

The remaining inventories are stated at first-in, first-out ("FIFO") cost.

Costs include materials, labor and production overhead at normal production capacity.

Costs do not exceed net realizable values.

Changes in the amount that FIFO cost exceed LIFO cost are recognized in cost of goods sold.

See Note 5 to the Consolidated Financial Statements for additional information about inventories.

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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 acquisition and certain property acquired from the Indesit acquisition in 2014.

For non-production assets and assets acquired from Hefei Sanyo and certain production assets acquired from Indesit, we depreciate costs based on the straight-line method.

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.

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The following table summarizes our property at December 31, 2021 and 2020:

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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 2020, we primarily 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 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.

These gains were related to manufacturing and warehousing operations and administrative offices, respectively.

During 2019, we primarily retired land and buildings related to a sale-leaseback transaction and machinery and equipment with a net book value of approximately $ 41 million that was no longer in use.

During 2019, we recognized a gain of $ 106 million in cost of products sold primarily related to the sale-leaseback transaction in the fourth quarter of 2019.

During the twelve months ended December 31, 2020, we also disposed other buildings, machinery and equipment with a net book value of $ 25 million.

The net gain on the other disposals were not material.

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.

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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.

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Certain leases also include options to purchase the underlying asset at fair market value.

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Sale-leaseback transactions

There 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.

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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 4 sequential 5 -year renewal options.

The Company has four sequential five-year renewal options.

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The transaction met the requirements for sale-leaseback accounting.

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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

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under the income approach by comparing the values to fair value estimates using a market approach.

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.

In 2018, we recorded an impairment charge on goodwill of $ 579 million.

See Note 6 and Note 11 to the Consolidated Financial Statements for additional information about goodwill.

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Other definite-life intangible assets are amortized over their useful life and are assessed for impairment when impairment indicators are present.

We recorded an immaterial impairment charge on other intangibles in 2020 and $ 168 million in 2018.

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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.

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The 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.

Additionally, in China, as a common practice, we pay suppliers with banker's acceptance drafts.

Banker's acceptance drafts allow suppliers to sell their receivables to financial institutions at the sole discretion of both the supplier and the financial institution.

We have no economic interest in the sale of these receivables and no direct financial relationship with the financial institutions concerning these services.

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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 Instruments

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See Note 10 to the Consolidated Financial Statements for additional information about hedges and derivative financial instruments.

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Foreign Currency Translation and Transactions

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Research and development costs are charged to expense and totaled $ 485 million, $ 455 million and $ 541 million in 2021, 2020 and 2019, respectively.

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Advertising Costs

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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 be sustained upon examination based on its technical merits.

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.

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See Note 13 to the Consolidated Financial Statements for additional information.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

BEFIEX Credits

In 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, resulting in an increase in the operations' recorded net sales in 2017.

From 2018 on, these credits are reflected in interest and sundry income in line with ASC 606.

There was no material change to timing or amount of revenue recognition.

We recognized export credits as they were monetized.

See Note 8 and Note 15 to the Consolidated Financial Statements for additional information.

Out-of-Period Adjustment

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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.

In addition, during the third quarter of 2019 we recorded an adjustment of $ 22 million related to the first quarter of 2019 resulting from other foreign subsidiary income items and corresponding tax credit impacts.

The Consolidated Statements of Income (Loss) for the year ended December 31, 2019 is not impacted by this adjustment.

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

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 ma terial 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.

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.

In the third quarter of 2019, we sold our 12.54 % ownership interest in Elica S.p.A., the parent of Elica PB India, for a nominal amount.

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, 2020 we adopted Accounting Standards Update ("ASU") No.

2016-13, "Financial Instruments - Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments." The guidance in ASU 2016-13 creates a new impairment standard replacing the current "incurred loss" model.

The incurred loss model required that for a loss to be impaired and recognized on the financial statements it must be probable that it has been incurred at the measurement date.

The new standard utilizes an "expected credit loss" model also referred to as "the current expected credit loss" (CECL) model.

Under CECL, there is no threshold for impairment loss recognition, but it instead reflects a current estimate of all expected credit losses.

The adoption of this standard did not have a material impact to the Consolidated Financial Statements.

See Note 3 to the Consolidated Financial Statements for additional information.

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We adopted the following standards, none of which had a material impact on our Consolidated Financial Statements:

On January 1, 2021 we adopted the following standards, which did not have a material impact on our Consolidated Financial Statements:

Standard Effective Date

2018-13 Fair Value Measurement (Topic 820) Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement January 1, 2020

2018-14 Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20):

Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans January 1, 2020

2018-15 Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40) Customer's Accounting for Implementation Costs Incurred In a Cloud Computing Arrangement That Is a Service Contract January 1, 2020

2018-18 Collaborative Arrangements (Topic 808) - Clarifying the Interaction between Topic 808 and Topic 606 January 1, 2020

2019-12 Income Taxes (Topic 740) - Simplifying the Accounting for Income Taxes January 1, 2021

Accounting Pronouncements Issued But Not Yet Effective

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The new guidance provides the following optional expedients:

simplify accounting analyses under current U.S.

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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.

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An entity may elect to apply the amendments prospectively through December 31, 2022.

We continue to monitor the impact the discontinuance of LIBOR or another reference rate will have on our contracts, hedging relationships and other transactions.

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 Effective Date

2019-12 Income Taxes (Topic 740) - Simplifying the Accounting for Income Taxes January 1, 2021

2020-06 Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entities Own Equity (Subtopic 815-40):

Accounting for Convertible Instruments and Contracts in an Entities Own Equity January 1, 2022

2021-10 Government Assistance (Topic 832) - Disclosures by Business Entities about

Government Assistance January 1, 2022

All other issued and not yet effective accounting standards are not relevant to the Company.

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(2) REVENUE RECOGNITION

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The Company has elected to account for shipping and handling activities as a fulfillment cost as permitted by the standard.

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Determine the transaction price

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If 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

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entirely to a performance obligation.

The Company determines standalone selling price based on the price at which the performance obligation is sold separately.

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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 in the twelve months ended December 31, 2020 is immaterial.

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 Revenue

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For additional information on the disaggregated revenues by geographical regions, see Note 16 to the Consolidated Financial Statements.

Revenues related to our former compressor business were fully reflected in our Latin America segment through June 30, 2019.

We completed the sale of our compressor business on July 1, 2019.

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

Twelve months ended

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Total major product category net sales $ 20,327 $ 18,120

Compressors — 557

Spare parts and warranties 1,187 913

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Total net sales $ 21,985 $ 19,456

The impact to revenue related to prior period performance obligations was not material for the year ended December 31, 2020.

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 Sales

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Our major product categories include the following:

refrigeration, laundry, cooking, and dishwashing.

refrigeration, laundry,

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cooking, and dishwashing.

The refrigeration product category includes refrigerators, freezers, ice makers and refrigerator water filters.

The laundry product category includes laundry appliances and related laundry accessories.

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.

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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

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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.

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

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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 monthly invoiced amount which directly corresponds to the value of our performance completed to date.

The contract term is generally less than one year for these arrangements and revenue is recognized based on the

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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.

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As a result, we recognize revenue for these contracts at the amount which directly corresponds to the value provided to the customer.

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Costs to Obtain or Fulfill a Contract

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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 did not have a material impact on the Consolidated Financial Statements.

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 dollars December 31, 2020

Charged to Earnings Write-offs Foreign Currency December 31, 2020

Charged to Earnings Write-offs Foreign Currency Other (1)

December 31, 2021

Accounts receivable allowance

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Consolidated $ 180 $ 6 $ ( 22 ) $ ( 9 ) $ ( 32 ) $ 123

We recorded an immaterial amount of bad debt expense for the year ended December 31, 2020 and 2019, respectively.

(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.

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We lease certain manufacturing facilities, warehouses/distribution centers, office space, land, vehicles, and equipment.

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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 $ 49 million for the periods ended December 31, 2020 and December 31, 2019.

These operating leases are expected to commence by the end of fiscal year 2021 with lease terms of up to 10 years.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

At December 31, 2020, we have no material leases classified as financing leases and we have approximately $ 1.2 billion of non-cancellable operating lease commitments, excluding variable consideration.

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:

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Present value of lease liabilities 970

The long-term portion of the lease liabilities included in the amounts above is $ 838 million.

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, 2020, the weighted average remaining lease term and weighted average discount rate for operating leases was 8 years and 4 %, respectively.

At December 31, 2019 the weighted average remaining lease term and weighted average discount rate for operating leases was 7 years and 4 %, respectively.

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.

4 unchanged sentences

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

Many of our leases include renewal options that can extend the lease term.

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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.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

Rent expense under the Company's operating leases during the year ended December 31, 2018, prior to the Company's adoption of ASC 842, was $ 250 million.

Synthetic lease arrangements

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The leases contain provisions for options to purchase, extend the original term for additional periods or return the property.

As of December 31, 2020, these arrangements include residual value guarantees of up to $ 220 million that could potentially come due in future periods.

We do not believe it is probable that any amounts will be owed under these guarantees.

Therefore, no 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 was not material to the Consolidated Financial Statements at December 31, 2019.

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.

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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 LIBOR rate plus a margin.

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.

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Restricted cash included in prepaid and other current assets — 10 —

Restricted cash included in other noncurrent assets — — —

Cash, cash equivalents and restricted cash as presented in our Consolidated Statements of Cash Flows $ 3,044 $ 2,934 $ 1,952

See Financial Condition and Liquidity in the Management's Discussion and Analysis section for additional information on cash and cash equivalents.

See Significant Accounting Policies for additional information on restricted cash.

(5) INVENTORIES

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Raw materials and work in process 759 666

excess of FIFO cost over LIFO cost ( 120 ) ( 143 )

Total inventories $ 2,717 $ 2,301

LIFO inventories represented 41 % and 43 % of total inventories at December 31, 2020 and 2019, respectively.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

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Ending 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 assessment

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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.

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(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 a nnual impairment assessment

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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 recorded an immaterial intangible impairment charge in the EMEA region.

We completed our annual impairment assessment for other intangible assets as of October 1, 2019.

The Company elected to bypass the qualitative assessment and perform a quantitative assessment to evaluate certain indefinite-life 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)

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.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

The following table summarizes our future estimated amortization expense by year:

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For 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)

The following table summarizes the contractual maturities of our long-term debt, including current maturities, at December 31, 2021:

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Long-term debt, including current maturities $ 5,227

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

Debt Offering

On May 7, 2020, the Company completed its offering of $ 500 million in principal amount of 4.60 % Senior Notes due 2050 in a public offering pursuant to a registration statement on Form S-3 (File No.

The notes were issued under an indenture dated March 20, 2000, between the Company, as issuer, and U.S.

On 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.

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.

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.

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.

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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.

The Company used the net proceeds from the sale of the Notes to redeem Whirlpool Corporation's 0.625 % Senior Notes due in 2020 (see Debt Repayment).

On February 26, 2019, the Company completed a bond offering consisting of $ 700 million in principal amount of 4.75 % Senior Notes due in 2029.

The notes were issued under an 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 notes contain covenants that limit Whirlpool Corporation's ability to incur certain liens or enter into certain sale-leaseback transactions.

The notes are registered under the Securities Act of 1933, as amended, pursuant to our Registration Statement on Form S-3 (File No.333-224381).

The Company used the net proceeds from the sale of the notes to repay the Whirlpool EMEA Finance Term Loan (see Debt Repayment).

Debt Repayment

On March 12, 2020, € 500 million (approximately $ 566 million at repayment) of 0.625 % senior notes matured and were repaid.

On August 9, 2019, we repaid $ 1.0 billion pursuant to our April 23, 2018 Term Loan Agreement with Citibank, N.A., as Administrative Agent, and certain other financial institutions, representing full repayment of amounts borrowed under the term loan.

As previously disclosed, we agreed to repay this term loan amount with the net cash proceeds received from the sale of our Embraco business unit to Nidec Corporation, which closed on July 1, 2019.

On February 27, 2019, we repaid € 600 million (approximately $ 673 million as of that date) pursuant to our June 5, 2018 Term Loan Agreement with Wells Fargo Bank, National Association, as Administrative Agent, and certain other financial institutions (the "Whirlpool EMEA Finance Term Loan"), representing full repayment of amounts borrowed under the Whirlpool EMEA Finance Term Loan.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

On March 1, 2019, $ 250 million of 2.40 % senior notes matured and were repaid.

On April 26, 2018, $ 363 million of 4.50 % senior notes matured and were repaid.

Credit Facilities

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 provides aggregate borrowing capacity of $ 500 million, and has a termination date of April 26, 2021.

The interest and fee rates payable with respect to the 364-Day Facility based on the Company’s current debt rating are as follows:

(1) the Eurodollar Margin is 1.625 %;

(2) the spread over prime is 0.625 %;

and (3) the unused commitment fee is 0.400 %.

The 364-Day Facility contains customary covenants and warranties which are consistent with the Company’s $ 3.5 billion revolving credit facility, 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 the Company’s ability to (or to permit any subsidiaries to), subject to various exceptions and limitations:

(i) merge with other companies;

(ii) create liens on its property;

and (iii) incur debt at the subsidiary level.

On August 6, 2019, Whirlpool Corporation entered into a Fourth Amended and Restated Long-Term Credit Agreement (the "Amended Long-Term Facility") by and among the Company, certain other borrowers, the lenders referred to therein, JPMorgan Chase Bank, N.A.

On 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, an increase of $ 500 million from the Company's prior amended and restated credit agreement.

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 EURIBOR is 1.125 %;

(1) the spread over Eurocurrency Rate is 1.125 %;

(2) the spread over prime is 0.125 %;

and (3) the ticking fee is 0.100 %.

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.

3 unchanged sentences

(iii) incur debt at the subsidiary level.

In addition to the committed $ 3.5 billion Amended Long-Term Facility and the $ 500 million 364-day Credit Agreement, we have committed credit facilities in Brazil and India.

The committed credit facilities in Brazil provide borrowings up to 1.0 billion Brazilian reais (approximately $ 192 million at December 31, 2020), maturing through 2022.

On August 5, 2019 we terminated a € 250 million European revolving credit facility that we entered into in July 2015.

The termination of this facility did not have a material impact on our Consolidated Financial Statements.

We had no borrowings outstanding under the committed credit facilities at December 31, 2020 and 2019, respectively.

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

Facility Borrowings

1 unchanged sentence

We repaid $ 500 million of this Amended Long-Term Facility borrowing with the proceeds from our May 2020 Notes offering.

We repaid an additional $ 500 million of this Amended Long-Term Facility borrowing by drawing on the full amount of the 364-Day Facility.

As of December 31, 2020, all credit facility borrowings have been repaid.

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, 2 020 and no amounts were borrowed on t he facility during the twelve months ended December 31, 2021.

Notes Payable

2 unchanged sentences

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

Included in short-term borrowing at December 31, 2019 was $ 274 million of commercial paper that was repaid in early 2020.

Included in short-term borrowings at December 31, 2018 were the proceeds of the $ 1.0 billion term loan, which were used to fund accelerated share repurchases through a modified Dutch auction tender offer in the second quarter of 2018.

During the third quarter of 2019 we repaid the term loan with the proceeds from the sale of Embraco.

The following table summarizes the carrying value of notes payable at December 31, 2021 and 2020, respectively.

Millions of dollars 2021 2020

Commercial paper $ — $ 274

Short-term borrowings to banks 10 12

Total notes payable $ 10 $ 12

See Financial Condition and Liquidity in the Management's Discussion and Analysis section for additional information on notes payable.

(8) COMMITMENTS AND CONTINGENCIES

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These credits reduced Brazilian federal excise taxes on domestic sales.

In December 2013, the Brazilian government reinstituted the monetary adjustment index applicable to BEFIEX credits that existed prior to July 2009, when the Brazilian government required companies to apply a different monetary adjustment index to BEFIEX credits.

Whether use of the reinstituted index should be given retroactive effect for the July 2009 to December 2013 period was subject to review by the Brazilian courts.

In the third quarter of 2017, the Brazilian Supreme Court ruled that the reinstituted index should be given retroactive effect for the July 2009 to December 2013 period, which ruling was subsequently affirmed by the Brazilian Supreme Court, and is now final.

Based on this ruling, we were entitled to recognize $ 72 million in additional credits, which were recognized in prior periods.

At December 31, 2020 , no BEFIEX credits remain to be monetized.

Our Brazilian operations have received tax assessments for income and social contribution taxes associated with certain monetized BEFIEX credits.

2 unchanged sentences

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

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

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 $ 381 million at December 31, 2020).

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").

7 unchanged sentences

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)

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.

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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

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

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.

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.

2 unchanged sentences

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 have 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 certain other matters that could affect the rights of Brazilian taxpayers regarding these credits, and a scheduled hearing has been delayed and it is not known when such hearing will be rescheduled.

If the Brazilian tax authorities challenge our rights to these credits, we may become subject to new litigation related to credits already monetized and/or disallowance of further credit monetization.

Based on the opinions of our tax and legal advisors, we have not accrued any amounts related to potential future litigation regarding these credits.

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.

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 settlement with the FCA on the first part for a total fine of € 102 million, with € 56 million attributable to Whirlpool's France business and € 46 million attributable to Indesit's France business.

Payment of final amounts were made in 2019, including payment by Indesit's previous owners of € 17 million out of escrow to the Company.

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.

2 unchanged sentences

Trade Customer Insolvency

In 2017, Alno AG and certain affiliated companies filed for insolvency protection in Germany.

Bauknecht Hausgeräte GmbH, a subsidiary of the Company, was a long-standing supplier to Alno and certain of its affiliated companies.

The Company was also a former indirect minority shareholder of Alno.

In August 2018, the insolvency trustee asserted € 174.5 million in clawback and related claims against Bauknecht.

In January 2020, we entered into an agreement to settle all potential claims that the insolvency trustee may have related to this matter, resulting in a one-time charge of € 52.75 million (approximately $ 59 million as of December 31, 2019), which was recorded in interest and sundry (income) expense in the Consolidated Statements of Income for the year ended December 31, 2019 and paid in 2020 as planned.

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.

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

8 unchanged sentences

The resolution of these matters could have a material adverse effect on our financial statements in any particular reporting period.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

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.

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We dispute the merits of these suits and actions, and intend to vigorously defend them.

Management believes, based upon its current knowledge, after taking 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 should not have a material adverse effect, if any, on our financial statements.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

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.

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In the third quarter of 2019, we accrued approximately $ 105 million in estimated product warranty expense related to this matter.

Reserve assumptions were updated in the fourth quarter of 2020 based on the latest available data including take rate assumptions and unit population resulting in a $ 30 million release to the reserve.

This estimate is 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, 2020, settlements of approximately $ 56 million have been incurred related to this product recall.

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.

We continue to cooperate with the U.K.

regulator, which continues to review the overall effectiveness of the corrective action campaign.

For the year ended December 31, 2020, we incurred no additional material product warranty expense related to this campaign.

We continue to

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)

cooperate with the U.K.

regulator, which continues to review the overall effectiveness of the modification program.

We have guarantee arrangements in a Brazilian subsidiary.

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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 $ 3.5 billion at December 31, 2020 and $ 2.6 billion at December 31, 2019.

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.

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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 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.

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.

3 unchanged sentences

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 being provided to all United States employees and is not classified within the net periodic benefit cost.

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.

7 unchanged sentences

During the third quarter of 2020, the Company announced changes to a postretirement medical benefit program for certain groups of retirees.

These plan amendments are effective January 1, 2021 and reduce reimbursement amounts available under certain postretirement medical benefit programs and eliminate these benefits effective January 1, 2024 for these same retiree groups.

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.

4 unchanged sentences

For additional information, see Note 12 to the Consolidated Financial Statements.

The plans are unfunded.

The postretirement medical benefit programs are unfunded.

We reserve the right to modify these benefits in the future.

28 unchanged sentences

Plan participants' contributions — — 1 1 — —

Actuarial loss (gain) 282 279 96 85 9 14

Actuarial (gain) loss ( 99 ) 282 ( 45 ) 96 ( 8 ) 9

Benefits paid ( 234 ) ( 186 ) ( 29 ) ( 33 ) ( 21 ) ( 24 )

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Accumulated benefit obligation, end of year $ 2,955 $ 3,222 $ 891 $ 987 N/A N/A

The 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)

14 unchanged sentences

Fair value of plan assets, end of year $ 2,904 $ 3,103 $ 665 $ 632 $ — $ —

The actuarial (gain) loss for all pension and other postretirement benefit plans in 2020 and 2019 was primarily related to a change in the discount rate used to measure the benefit obligation of those plans.

Components of Net Periodic Benefit Cost

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Funding Policy

Our funding policy is to contribute to our 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.

Our 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 defined contribution plan in narrow circumstances, company stock.

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, 2020.

defined benefit plans during the twelve months ended December 31, 2021 and 2020.

Expected Employer Contributions to Funded Plans

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Balance, December 31, 2020

Realized gains (net) 17

Unrealized losses (net) ( 16 )

Realized gain / (loss) (net) 13

Unrealized gain / (loss) (net) 2

Settlements ( 27 )

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Fair value of plan assets $ 2,386 $ 2,547 $ 578 $ 546

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

(10) HEDGES AND DERIVATIVE FINANCIAL INSTRUMENTS

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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.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

Using derivative instruments means assuming counterparty credit risk.

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Outstanding notional amounts of cross-currency interest rate swap agreements were $ 1,275 million at December 31, 2021 and 2020, respectively.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

We may enter into interest rate swap agreements to manage interest rate risk exposure.

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Outstanding notional amounts of interest rate swap agreements were $ 300 million at December 31, 2021 and 2020, respectively.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

Net Investment Hedging

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Instrument 2021 2020 2021 2020

Senior note - 0.625 %

€ — € 500 $ — $ 561 March 2020

Foreign exchange forwards/options MXN 7,200 MXN 7,200 $ 352 $ 362 August 2022

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As of December 31, 2021, there was no ineffectiveness on hedges designated as net investment hedges.

Due to the volatility in the macroeconomic environment caused by the COVID-19 pandemic, we evaluated and dedesignated a nominal amount of certain foreign exchange cash flow hedges in the first quarter of 2020.

No material amount was dedesignated during the twelve months ended December 31, 2020.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

The following table summarizes our outstanding derivative contracts and their effects on our Consolidated Balance Sheets at December 31, 2021 and 2020:

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(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)

(2) Foreign exchange forwards/options have increased due to hedging of future intercompany loan.

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:

1 unchanged sentence

(Effective Portion) (3)

Cash Flow Hedges - Millions of dollars 2020 2019

Millions of dollars 2021 2020

Cash flow hedges

Commodity swaps/options $ 66 $ 22

2 unchanged sentences

Interest rate derivatives 14 ( 34 )

Net investment hedges - foreign currency 1 5

Net investment hedges

Foreign currency 1 1

$ 283 $ ( 42 )

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Foreign exchange forwards/options Interest and sundry (income) expense 71 ( 54 )

Cross-currency swaps Interest and sundry (income) expense ( 89 ) 26

Interest rate derivatives Interest expense — ( 1 )

Cross-currency swaps (5)

Interest and sundry (income) expense 117 ( 89 )

$ 255 $ ( 126 )

4 unchanged sentences

Foreign exchange forwards/options Interest and sundry (income) expense $ 74 $ ( 1 )

(3) Change in gain (loss) recognized in OCI (effective portion) is primarily driven by currency fluctuations and declines in commodity prices and interest rates compared to the prior year.

(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.

1 unchanged sentence

(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.

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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 impairment during 2020.

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:

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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.

Millions of dollars Level 3

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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.

(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

4 unchanged sentences

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

Elica PB India Acquisition

As 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 Investment

During 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 Divestment

During 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.

Durin g 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.

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Naples Manufacturing Plant Restructuring Action

In the fourth quarter of 2020, the Company ceased production and exited the Naples, Italy manufacturing plant.

In 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.

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The 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)

(12) STOCKHOLDERS' EQUITY

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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).

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

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:

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Postretirement

Liability Marketable

Securities Total

Liability Total

December 31, 2018 $ ( 1,588 ) $ ( 33 ) $ ( 1,074 ) ( 2,695 )

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Other comprehensive income (loss) available to Whirlpool 56 ( 13 ) 34 77

Adjustment to beginning accumulated other comprehensive loss 21 ( 21 ) — ( 17 ) ( 17 )

December 31, 2019 $ ( 1,532 ) $ ( 46 ) $ ( 1,040 ) $ ( 2,618 )

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Share Repurchase Program

On July 25, 2017, our Board of Directors authorized an additional share repurchase program of up to $ 2 billion.

For the year ended December 31, 2020, we repurchased 902,000 shares at an aggregate purchase price of approximately $ 121 million under this program.

At December 31, 2020, there were approximately $ 531 million in remaining funds authorized under this program.

On 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.

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Related income tax benefits recognized in earnings were $ 10 million , $ 9 million and $ 6 million in 2021, 2020, and 2019, respectively.

At December 31, 2020, unrecognized compensation cost related to non-vested stock option and stock unit awards totaled $ 77 million.

At December 31, 2021, unrecognized compensation cost related to non-vested stock option and stock unit awards totale d $ 89 million.

The cost of these non-vested awards is expected to be recognized over a weighted-average remaining vesting period of 28 months.

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However, the term and exercise of awards granted before then may extend beyond that date.

At December 31, 2020, approximately 3.2 million shares remain available for issuance under the 2018 OSIP.

At December 31, 2021, approximatel y 2.4 million s hares remain available for issuance under the 2018 OSIP.

Stock Options

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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 2020, 2019, and 2018 were $ 29.53 , $ 27.89 and $ 38.34 , respectively, using the following assumptions:

Based on the results of the model, the weighted-average grant date fair value of stock options granted for 2021, 2020, and 2019 wer e $ 52.44 , $ 29.53 and $ 27.89 , respectively, using the following assumptions:

Weighted Average Black-Scholes Assumptions 2021 2020 2019

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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 $ 3 million, $ 1 million and $ 7 million for 2020, 2019, and 2018, respectively.

The related tax benefits wer e $ 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.

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The remaining cash settlement of $ 13 million will occur throughout 2022 and 2023.

During the third quarter, 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 incurred $ 74 million of the approximately $ 148 million total costs in 2020 and the remaining expense will occur in 2021.

Cash settlement of $ 50 million was paid in 2020 with the remaining cash settlement expected to be paid in 2021.

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 would 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

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)

accordance with its terms in March 2020.

We ceased production in the plant and exited the facility in 2020 as previously disclosed.

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.

The Company expects all of the remaining $ 71 million cash settlement to occur in 2021.

In 2018, we announced actions in EMEA to reduce fixed costs by $ 50 million.

The initiatives primarily included headcount reductions throughout the EMEA region.

Additionally, we exited domestic sales operations in Turkey in 2019.

These combined actions from 2018-2020 totaled $ 83 million and were complete as of June 30, 2020.

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:

11 unchanged sentences

Total $ 77 $ 288 $ ( 196 ) $ 4 $ 173

The following table summarizes 2020 restructuring charges by operating segment:

Millions of dollars 2020 Charges

The following table summarizes 2021 and 2020 restructuring charges by operating segment:

Millions of dollars 2021 Charges 2020 Charges

North America $ — $ 81

1 unchanged sentence

Corporate / Other — 23

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

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.

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, offset by net reductions in valuation allowances, and impacts from a legal entity restructuring.

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)

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:

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government tax incentives ( 19 ) ( 17 ) ( 21 )

Foreign government tax incentives, including BEFIEX ( 20 ) ( 13 ) ( 21 )

Foreign government tax incentives ( 23 ) ( 20 ) ( 13 )

Foreign tax rate differential 66 30 70

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Changes in enacted tax rates ( 14 ) ( 6 ) 42

Nondeductible goodwill — — 139

Nondeductible fines & penalties — — 30

Sale of Embraco — 58 —

Divestiture tax impact ( 35 ) — 58

Legal entity restructuring tax impact ( 98 ) ( 82 ) ( 147 )

1 unchanged sentence

Income tax computed at effective worldwide tax rates $ 518 $ 382 $ 348

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

Current and Deferred Tax Provision

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Total income tax expense $ 518 $ 382 $ 348

United States Government Tax Legislation

On December 22, 2017, H.R.1 (the “Tax Cuts and Jobs Act”) was signed into law.

Significant provisions impacting Whirlpool's 2017 and 2018 effective tax rate include the reduction in corporate tax rate from 35% to 21% effective in 2018, a one-time deemed repatriation (“Transition Tax”) on earnings of certain foreign subsidiaries that were previously tax deferred, and the creation of new taxes on certain foreign sourced earnings.

At December 31, 2017, pursuant to the SEC guidance under SAB118, the Company made a reasonable estimate of the provisional effects of the rate reduction on its existing deferred tax balances and the impact of the one-time Transition Tax.

At December 31, 2018, the Company revised these estimated amounts and recognized an additional tax benefit in the amount of $ 54 million on the difference between the 2017 U.S.

enacted tax rate of 35%, and the 2018 enacted tax rate of 21%, primarily related to a $ 350 million tax deductible pension plan contribution included on the Company's 2017 U.S.

Corporation income tax return.

The Company recognized additional tax expense of $ 95 million related to the Transition Tax, including $ 55 million of unrecognized tax benefits during the fourth quarter.

For the full year 2019, we recognized $ 26 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.

At December 31, 2019, we have recognized $ 299 million tax expense related to the Transition Tax, net of unrecognized tax benefits and other correlative adjustments.

During 2019, the government issued additional clarifying regulations related to tax reform.

As a result, the Company recorded an additional income tax liability related to an uncertain tax position in the amount of $ 117 million.

United States Tax on Foreign Dividends

1 unchanged sentence

deferred tax liability on those earnings.

However, upon the enactment of the Tax Cuts and Jobs Act, the unremitted earnings and profits of our foreign subsidiaries and affiliates, subsequent to 1986, are subject to U.S.

tax under the Transition Tax provision.

Under the Transition Tax provision, the Company recognized a deemed remittance of $ 3.5 billion.

The Company had cash and cash equivalents of approximately $ 2.9 billion at December 31, 2020, of w hich $ 1.6 billion was held by subsidiaries in foreign countries.

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.

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At 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.

Of the total net operating loss carryforwards, $ 3.7 billion do not expire, with substantially all of the remaining carryforwards expiring in various years through 2037.

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.

16 unchanged sentences

Right of use assets 245 265

LIFO inventory 88 89

Inventory Reserves 41 116

Other 207 252

28 unchanged sentences

Balance, December 31 $ 580 $ 427 $ 394

Interest and penalties associated with unrecognized tax benefits resulted in a net expense of $ 10 million at December 31, 2020, a net benefit of $( 4 ) million and net expense of $ 2 million in 2019 and 2018, respectively.

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.

5 unchanged sentences

Other Income Tax Matters

During its examination of Whirlpool’s 2009 U.S.

As 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 (U.S.

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 U.S.

Tax Court granted the IRS’s motion for partial summary judgment and denied Whirlpool’s.

The Company has appealed the U.S.

Tax Court decision to the United States Sixth Circuit Court of Appeals.

The Company believes that it will be successful upon appeal and has not recorded any impact of the U.S.

Tax Court’s decision in its consolidated financial statements.

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

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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 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.

Total assets by segment are those assets directly associated with the respective

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

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 %, 13 % and 12 % of our consolidated net sales in 2020, 2019 and 2018, respectively.

Lowe's represented approximately 14 % of our consolidated accounts receivable as of December 31, 2020 and 2019, respectively.

operating activities.

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.

1 unchanged sentence

Long-lived assets includes property, plant and equipment and right-of-use assets at December 31, 2021 and 2020.

Millions of dollars United States Mexico Italy Poland All Other Countries Total

Millions of dollars United States Italy Mexico Poland All Other Countries Total

Long-lived assets $ 1,758 $ 473 $ 408 $ 389 $ 723 $ 3,751

32 unchanged sentences

Restructuring costs $ ( 38 ) $ ( 288 ) $ ( 188 )

Corrective action recovery 14 — —

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

1 unchanged sentence

Brazil indirect tax credit — — 180

Impairment of goodwill and intangibles — — ( 747 )

French antitrust settlement — — ( 103 )

Trade customer insolvency — — ( 30 )

Divestiture related transition costs — — ( 21 )

Corporate expenses and other ( 272 ) ( 212 ) ( 223 )

5 unchanged sentences

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

4 unchanged sentences

Net earnings (loss) available to Whirlpool $ 1,783 $ 1,075 $ 1,168

(17) DIVESTITURES AND HELD FOR SALE

(17) DIVESTITURES

Whirlpool China Partial Tender Offer

On August 25, 2020, Guangdong Galanz Household Appliances Manufacturing Co., Ltd.

(“Galanz”) announced its intention to pursue a partial tender offer for majority control of Whirlpool China Co.

(“Galanz”) announced its intention to pursue a tender offer for majority control of Whirlpool China Co.

(“Whirlpool China”), a majority-owned subsidiary of the Company with shares listed on the Shanghai Stock Exchange.

In its announcement, Galanz notes that it expects 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 is equal to the daily weighted average trading price for Whirlpool China stock over the 30 trading days prior to the announcement.

The Company is considering the terms of the offer and other aspects of this potential strategic relationship along with any potential impact on the Company's financial statements and other aspects of its operations.

Formal partial tender offer is not expected until regulatory approvals are obtained, and the regulatory approval process remains ongoing.

If an offer is launched, tender of our shares is subject to Company board approval of the transaction.

We have not recorded any impact relating to this announcement as of December 31, 2020.

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)

Embraco Sale Transaction

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 dollars December 31,

Cash and cash equivalents $ — $ 324

Accounts receivable, net of allowance of $ 0 and $ 11 , respectively

Inventories — 98

Prepaid and other current assets — 93

Property, net of accumulated depreciation of $ 0 and $ 189 , respectively

Other noncurrent assets (1)

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 Divestiture

On 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)

Embraco Divestiture

On 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.

2 unchanged sentences

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.

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

An immaterial adjustment related to final purchase price was recorded in 2020.

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.

4 unchanged sentences

Earnings before income taxes $ — $ — $ 47

South Africa Business Disposal

South Africa Divestiture

On 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.

5 unchanged sentences

See Note 11 to the Consolidated Financial Statements for additional information.

Divestiture of Turkey Domestic Sales Operations

Turkey Domestic Sales Operations Divestiture

For 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)

(18) QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

Three months ended

December 31, September 30, June 30, March 31,

Millions of dollars, except per share data 2020 (4)

Net sales $ 5,798 $ 5,382 $ 5,291 $ 5,091 $ 4,042 $ 5,186 $ 4,325 $ 4,760

Cost of products sold 4,434 4,334 4,136 4,350 3,411 4,254 3,625 3,948

Gross margin 1,364 1,048 1,155 741 631 932 700 812

Operating profit (loss) 716 424 570 693 77 191 260 263

Interest and sundry (income) expense 17 54 ( 22 ) ( 29 ) ( 15 ) ( 63 ) ( 1 ) ( 130 )

Net earnings (loss) 501 288 398 364 25 72 147 474

Net earnings (loss) available to Whirlpool 497 288 397 358 35 67 152 471

Per share of common stock:

Basic net earnings (loss) $ 7.90 $ 4.56 $ 6.35 $ 5.62 $ 0.55 $ 1.04 $ 2.42 $ 7.36

Diluted net earnings (loss) 7.77 4.52 6.27 5.57 0.55 1.04 2.41 7.31

Dividends 1.25 1.20 1.20 1.20 1.20 1.20 1.20 1.15

(1) The quarterly earnings per share amounts will not necessarily add to the earnings per share computed for the year due to the method used in calculating per share data.

(2) The operating profit and net earnings for the three months ended September 30, 2019 includes a gain on sale and disposal of businesses of $ 437 million, a $ 180 million gain related to Brazil indirect tax credits and a $ 105 million charge related to product warranty expense on EMEA- produced washers.

See Note 8, Note 11, Note 14 and Note 17 to the Consolidated Financial Statements for additional information.

(3) The gross margin for the three months ended December 31, 2019 includes a gain of $ 95 million related to a sale and leaseback transaction.

See Note 1 to the Consolidated Financial Statements for additional information.

(4) The gross margin for the three months ended December 31, 2020 includes a gain of $ 113 million related to a sale and leaseback transaction.

See Note 1 to the Consolidated Financial Statements for additional information.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data