What changed in this filing

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Item 1A. Risk Factors

2023-02-10 compared with 2022-02-10 · 137 added, 103 removed, 222 unchanged (52% of the section changed)

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Therefore, actual results could differ materially and adversely from these forward-looking statements.

We have listed below what we believe to be the most significant pandemic-related, strategic, operational, financial, legal and compliance, and general risks relating to our business.

COVID-19 PANDEMIC RISKS

Our financial condition and results of operations have been impacted and may in the future be adversely affected by the ongoing COVID-19 outbreak.

We continue to closely monitor the impact of the global COVID-19 pandemic on all aspects of our operations and regions, including its effect on our consumers, operations, employees, trade customers, suppliers and distribution channels.

In 2020 and 2021, the pandemic created significant business disruption and economic uncertainty which adversely impacted our manufacturing operations, supply chain, and distribution channels.

While the immediate impacts of the COVID-19 pandemic have been assessed, the long-term magnitude and duration of the disruption, including supply chain disruption, and resulting impact in global business activity remains uncertain.

Many factors that have impacted us and others that may impact us in the future, such as timing and availability of effective treatments and vaccines, as well as vaccination rates among the population in the United States and many of the countries in which we operate, are out of our control.

The adverse impact of the pandemic is expected to continue and may materially affect our financial statements in future periods.

The impacts of the pandemic include, but are not limited to, the following:

• Production shutdowns and slowdowns because of COVID as well as COVID-related government orders and supply or labor shortages, in individual or collective groups of factories in impacted countries, which have and could in the future result in increased costs and decreased efficiency, and which have and could impact our ability to respond to rapid changes in demand;

• Uncertainty regarding production facility operational speed and production capacity;

• Lack of availability of component materials in our supply chain and an increase in raw material and component costs;

• Recent and potential future reductions in trade customer sales volume, potential trade customer financial restructuring or insolvency, and increases in accounts receivable balances with our trade customer base;

• Potential future impairment in value of certain tangible or intangible assets could be recorded as a result of weaker economic conditions;

• Significant disruption of global financial markets, which could have a negative impact on our ability to access capital in the future, and which, together with operational impacts noted above, necessitated certain liquidity creation and preservation actions as a precautionary measure at the outset of the pandemic;

• Fluctuations in forecasted earnings before tax and corresponding volatility in our effective tax rate;

• Uncertainty with respect to the application of economic stimulus legislation in the U.S.

and abroad, including uncertainty regarding impacts to our current global tax positions and future tax planning;

• Operational risk, including but not limited to data privacy and cybersecurity incidents, as a result of salaried workforce extended remote work arrangements, uncertainty regarding return-to-office timing and duration at various administrative facilities around the world, and operational delays as a result of salaried employee furlough and collective vacation actions in certain countries, and restrictions on employee travel;

• Operational disruption if key employees terminate their employment or become ill, as well as diversion of our management team's attention from non-COVID-19 related matters;

• Potential investigations, legal claims or litigation against us for actions we have taken or may take, or decisions we have made or may make, as a consequence of the pandemic;

• Potential delays in resolving pending legal matters as a result of court, administrative and other closures and delays in many of our regions.

We have not yet determined with certainty the extent to which our existing insurance will respond to these impacts.

In addition, we cannot predict the impact that COVID-19 will have on our trade customers, suppliers, consumers, and each of their financial conditions;

however, any material effect on these parties could adversely impact us.

The impact of COVID-19 may also exacerbate other risks discussed in Item 1A.

Risk Factors in this Annual Report on Form 10-K, any of which could have a material adverse effect on our financial statements.

We have listed below what we believe to be the most significant strategic, operational, financial, legal and compliance, and general risks relating to our business.

STRATEGIC RISKS

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Each of our operating segments operates in a highly competitive business environment and faces intense competition from a significant number of competitors, many of which have strong consumer brand equity.

Several of these competitors, such as those set forth in the Business section of this annual report, are large, well-established companies, ranking among the Global Fortune 150.

We also face competition that may be able to quickly adapt to changing consumer preferences, particularly in the connected appliance space, or may be able to adapt more quickly to changes brought about by the global pandemic, supply chain constraints, or other factors.

Several of these competitors, such as those set forth in the Business section of this annual report on Form 10-K, are large, well-established companies, ranking among the Global Fortune 500.

Moreover, our customer base includes large, sophisticated trade customers who have many choices and demand competitive products, services and prices, and which have and may in the future merge, consolidate, form alliances or further increase their relative purchasing scale.

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Many of our competitors are increasingly expanding beyond their existing manufacturing footprints.

Our competitors, especially global competitors with low-cost sources of supply, vertically integrated business models and/or highly protected home countries outside the United States, have aggressively priced their products and/or introduced new products to increase market share and expand into new geographies.

Many of our competitors have established and may expand their presence in the rapidly changing retail environment, including the shifting of consumer purchasing practices towards e-commerce and

other channels, and the increasing global prevalence of direct-to-consumer sales models.

In addition, technological innovation is a significant competitive factor for our products, as consumers continually look for new product features that save time, effort and natural resources.

market share and expand into new geographies.

Many of our competitors have established and may expand their presence in the rapidly changing retail environment, including the shifting of consumer purchasing practices towards e-commerce and other channels, and the increasing global prevalence of direct-to-consumer sales models.

In addition, technological innovation is a significant competitive factor for our products, as consumers continually look for new product features that save time, effort, water and energy.

If we are unable to successfully compete in this highly competitive environment, our business and financial performance could be negatively affected.

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As the trade customers continue to become larger through merger, consolidation or organic growth, they may seek and have sought to use their position to improve their profitability by various means, including improved efficiency, lower pricing, and increased promotional programs.

If we are unable to meet their demand requirements, our volume growth and financial results could be negatively affected.

As has occurred in the past, if we are unable to meet their demand requirements, our volume growth and financial results could be negatively affected.

We also continue to pursue direct-to-consumer sales globally, including the launch of direct-to-consumer sales on most of our brand websites in recent years, which may impact our relationships with existing trade customers.

The loss or substantial decline in volume of sales to our key trade customers, major buying groups, builders, or any other trade customers to which we sell a significant amount of products, could adversely affect our financial performance.

Additionally, the loss of market share or financial difficulties, including bankruptcy and financial restructuring, by these trade customers could have a material adverse effect on our financial statements.

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We could be adversely impacted if we fail to achieve any of these objectives or if, whether or not justified, the reputation or image of our company or any of our brands is tarnished or receives negative publicity.

In addition, adverse publicity about regulatory or legal action against us, product safety, data privacy breaches or quality issues, or negative association with any one brand could damage our reputation and brand image, undermine our customers' confidence in us and reduce long-term demand for our products, even if the regulatory or legal action is unfounded or not material to our operations.

In addition, adverse publicity about regulatory or legal action against us, product safety, data privacy breaches or quality issues, inability to meet our net zero or other sustainability goals, or negative association with any brand could damage our reputation and brand image, undermine our customers' confidence in us and reduce long-term demand for our products, even if the regulatory or legal action is unfounded or not material to our operations.

In addition, our success in maintaining, extending and expanding our brand image depends on our ability to adapt to a rapidly changing media environment, including an ever-increasing reliance on social media and online dissemination of advertising campaigns.

Inaccurate or negative posts or comments about us on social networking and other websites that spread rapidly through such forums could seriously damage our reputation and brand image.

If we do not maintain, extend and expand our brand image, then our financial statements could be materially adversely affected.

If we do not protect, maintain, extend and expand our brand image, then our financial statements could be materially adversely affected.

An inability to effectively execute and manage our business objectives and global operating platform initiative could adversely affect our financial performance.

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Our global operating platform initiative aims to reduce costs, expand margins, drive productivity and quality improvements, accelerate our rate of innovation, generate free cash flow and drive shareholder value.

An inability to effectively control costs and drive productivity improvements could affect our profitability.

In addition, an inability to provide high-quality, innovative products could adversely affect our ability to maintain or increase our sales, which could negatively affect our revenues and overall financial performance.

An inability to effectively control costs and drive productivity improvements could adversely affect our profitability.

In addition, an inability to provide high-quality, innovative products could adversely affect our ability

to maintain or increase our sales, which could negatively affect our revenues and overall financial performance.

Our ability to understand consumers’ preferences and to timely identify, develop, manufacture, market, and sell products that meet customer demand could significantly affect our business.

Our success is dependent on anticipating and appropriately reacting to changes in consumer preferences, including the shifting of consumer purchasing practices towards e-commerce, direct-to-consumer and other channels, and on successful new product development, including in the connected appliance space and the digital space (e.g.

our Yummly recipe app), and process development and product relaunches in response to such changes.

Our success is dependent on anticipating and appropriately reacting to changes in consumer preferences, including the shifting of consumer purchasing practices towards e-commerce, direct-to-consumer and other channels, and on successful new product development, including in the eco-efficiency space, the connected appliance space and the digital space (for example, our Yummly recipe app), and process development and product relaunches in response to such changes.

Our future results and our ability to maintain or improve our competitive position will depend on our capacity to gauge the direction of our key product categories and geographic regions and upon our ability to successfully and timely identify, develop, manufacture, market, and sell new or improved products in these changing environments.

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We consider our intellectual property rights, including patents, trademarks, copyrights and trade secrets, and the licenses we hold, to be a significant and valuable aspect of our business.

We attempt to protect our intellectual property rights through a combination of patent, trademark, copyright and trade secret laws, as well as licensing agreements and third-party nondisclosure and assignment agreements, as well as agreements and policies with our employees and other parties.

Our failure to obtain protection for or adequately protect our trademarks, products, new features of our products, or our processes may diminish our competitiveness.

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From time to time, we make strategic divestitures, acquisitions, investments and participate in joint ventures.

For example, in 2021, we divested our majority interest in Whirlpool China (formerly Hefei Sanyo) and sold our manufacturing entity in Turkey, and in 2019 we sold our Embraco compressor business.

In addition, we acquired Indesit in 2014.

For example, in 2022, we divested our operations in Russia and acquired our InSinkErator business from Emerson Electric Co..

During the fourth quarter of 2022, we also classified our

European major domestic appliance business as held for sale, and signed an agreement in January 2023 to contribute our European major domestic appliance business to a newly formed entity with Arcelik.

In 2021, we divested our majority interest in Whirlpool China (formerly Hefei Sanyo) and sold our manufacturing entity in Turkey.

These transactions, and other transactions that we have entered into or which we may enter into in the future, can involve significant challenges and risks, including that the transaction does not advance our business strategy or fails to produce a satisfactory return on our investment.

We have encountered and

may encounter difficulties in integrating acquisitions with our operations, undertaking post-acquisition restructuring activities, applying our internal control processes to these acquisitions, managing strategic investments, and in overseeing the operations, systems and controls of acquired companies.

Integrating acquisitions and carving out divestitures is often costly and may require significant attention from management.

We have encountered and may encounter difficulties in integrating acquisitions with our operations, undertaking post-acquisition restructuring activities, applying our internal control processes to these acquisitions, managing strategic investments, and in overseeing the operations, systems and controls of acquired companies.

Integrating acquisitions and carving out divestitures is often costly, may be dilutive to earnings and may require significant attention from management.

There might also be differing or inadequate cybersecurity and data protection controls, which could impact our exposure to data security incidents and potentially increase anticipated costs or time to integrate the business.

Furthermore, we may not realize the degree, or timing, of benefits we anticipate when we first enter into a transaction.

While our evaluation of any potential transaction includes business, legal and financial due diligence with the goal of identifying and evaluating the material risks involved, our due diligence reviews may not identify all of the issues necessary to accurately estimate the cost and potential loss contingencies of a particular transaction, including potential exposure to regulatory sanctions resulting from an acquisition target's previous activities, costs associated with any quality issues with an acquisition target's legacy products or difficulties and costs associated with obtaining necessary regulatory approvals.

In addition, certain liabilities may be retained by Whirlpool when closing a facility, divesting an entity or selling physical assets, and such liabilities may be material.

While our evaluation of any potential transaction includes business, legal and financial due diligence with the goal of identifying and evaluating the material risks involved, our due diligence reviews have not always in the past and may not always in the future identify all of the issues necessary to accurately estimate the cost and potential loss contingencies of a particular transaction, including potential exposure to regulatory sanctions resulting from an acquisition target's previous activities, costs associated with any quality issues with an acquisition target's legacy products or difficulties and costs associated with obtaining necessary regulatory approvals.

In addition, certain liabilities have in the past and may be retained by Whirlpool when closing a facility, divesting an entity or selling physical assets, and certain of these retained liabilities have been in the past and may be in the future material.

For example, we agreed to retain certain liabilities relating to Embraco antitrust, tax, environmental, labor and products in connection with the Embraco sale.

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and foreign regulatory approval process and requirements in connection with an acquisition may cause approvals to take longer than anticipated to obtain, not be forthcoming or contain burdensome conditions, which may jeopardize, delay or reduce the anticipated benefits of the transaction to us and could impede the execution of our business strategy.

The ability of our suppliers to deliver parts, components and manufacturing equipment to our manufacturing facilities according to schedule and quality required may impact our ability to manufacture without disruption and could affect product availability and sales.

We use a wide range of materials and components in the global production of our products, which come from numerous suppliers around the world.

Because not all of our business arrangements provide for guaranteed supply, and our suppliers also are subject to the economic, social and political conditions in the countries in which they operate and, moreover, some key parts may be available only from single-source unaffiliated third-party suppliers or a limited group of suppliers, we are subject to supply chain risk.

In addition, certain proprietary component parts used in some of our products are provided by single-source unaffiliated third-party suppliers.

We would be unable to obtain these proprietary components for an indeterminate period of time if these single-source suppliers were to cease or interrupt production or otherwise fail to supply these components to us as agreed, which could adversely affect our product sales and operating results.

Our operations and those of our suppliers are subject to disruption for a variety of unexpected reasons, including, but not limited to, COVID-19-related disruptions, sudden changes in business conditions, supplier plant shutdowns or slowdowns, transportation delays due to port delays or any disruption on the supply chain, work stoppages, labor shortages, labor relations, global geopolitical instability, price inflation, governmental regulatory and enforcement actions, intellectual property claims against suppliers, disputes with suppliers, distributors or transportation providers, financial issues such as supplier bankruptcy, information technology failures, hazards such as fire, earthquakes, flooding, or other natural disasters, including due to climate change, and increased homeland security requirements in the U.S.

and other countries.

For example, we expect to continue to be impacted by supply chain issues, due to factors largely beyond our control:

a global shortage of certain components, such as semiconductors, a strain on raw material and input cost inflation, all of which began easing towards the end of 2022, but could escalate again in future quarters.

issues have and could delay importation and increase the cost of products and/or components or require us to locate alternative providers to avoid disruption to customers.

These alternatives have not always been and in the future may not be available on short notice and have and in the future could result in higher transit costs and stock availability, which could have an adverse impact on our business and financial statements.

Additionally, we are subject to our suppliers’ capabilities to accurately forecast and manage their production and supply chains and consistently supply us with parts and other raw materials, which can impact our operations given the combination of potential issues including sourcing thousands of parts globally from numerous suppliers in multiple countries.

The inability to timely convert our backlog due to supply chain disruptions subjects us to pricing and product availability risks and its conversion into revenue.

If our suppliers are unable to effectively recover parts and components and we are unable to effectively manage the impacts of price inflation and timely convert our backlog, our results of operations, financial condition and cash flows could materially and adversely be affected.

The lack of availability of any parts, components or equipment has and could result in production delays and sales disruptions, as well as our ability to fulfil contractual obligations.

Unexpected disruption risks as such can not be completely eliminated due to our reliance on suppliers’ performance to consistently build and ship products to customers.

Our ability to continue to identify and to eliminate single failure points within the supply chain remains one of our priorities in order to reduce risks related to third party suppliers and macroeconomic, environmental, political or social potential unforecastable disruptions.

Insurance for certain disruptions may not be available, affordable or adequate.

The effects of climate change, including extreme weather events, long-term changes in temperature levels and water availability may exacerbate these risks.

Such disruption has in the past and could in the future interrupt our ability to manufacture certain products.

Any significant supply chain disruption for the reasons stated above or otherwise could have a material adverse impact on our financial statements.

Our financial condition and results of operations have been impacted and may in the future be adversely affected by the ongoing COVID-19 pandemic.

Beginning in 2020, the pandemic created significant business disruption and economic uncertainty which adversely impacted and continues to adversely impact our manufacturing operations, supply chain, and distribution channels.

The adverse impact of the pandemic is expected to continue and may materially affect our financial statements in future periods.

We have not yet determined with certainty the extent to which our existing insurance will respond to pandemic-related impacts.

In addition, we cannot predict the impact that COVID-19 will have on our trade customers, suppliers, consumers, and each of their financial conditions;

however, any material effect on these parties could adversely impact us.

The impact of COVID-19 may also exacerbate other risks discussed elsewhere in Item 1A.

Risk Factors in this Annual Report on Form 10-K, any of which could have a material adverse effect on our financial statements.

We face risks associated with our presence in emerging markets.

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Local business practices in these countries may not comply with U.S.

laws, local laws or other laws applicable to us or our compliance policies, and non-compliant practices may result in increased liability risks.

laws, local laws or other laws applicable to us or our compliance policies, and non-compliant practices may result in

increased liability risks.

For example, we may incur unanticipated costs, expenses or other liabilities as a result of an acquisition target's violation of applicable laws, such as the U.S.

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For example, we incurred significant impairment and restructuring expenses in the years following our acquisition of Indesit in 2014.

In addition, our recent and future acquisitions may increase our exposure to other risks associated with operating internationally, including foreign currency exchange rate fluctuations;

In addition, our recent acquisitions have and future acquisitions may increase our exposure to other risks associated with operating internationally, including foreign currency exchange rate fluctuations;

political, legal and economic instability;

changes in tax rates and tax laws;

and work stoppages and labor relations, in addition to other risks described below under "Risks associated with unanticipated social, political and/or economic events may materially and adversely impact our business."

and work stoppages and labor relations, in addition to other risks elsewhere in Item 1A.

Risk Factors in this Annual Report on Form 10-K.

Risks associated with our international operations may decrease our revenues and increase our costs.

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We expect that international sales will continue to account for a significant percentage of our net sales.

Accordingly, we face numerous risks associated with conducting international operations, any of which could negatively affect our financial performance.

Accordingly, we have faced and continue to face numerous risks associated with conducting international operations, any of which could negatively affect our financial performance.

These risks include the following:

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• Changes in foreign tax rules, regulations and other requirements, such as changes in tax rates and statutory and judicial interpretations of tax laws;

• Changes in diplomatic and trade relationships, including sanctions resulting from the current political situation in countries in which we do business;

• Inflation and/or deflation;

• Changes in diplomatic and trade relationships, including sanctions and related regulations resulting from the current political situation in countries in which we do business;

• Inflation and/or deflation, and changes in interest rates;

• Changes in foreign country regulatory requirements, including data privacy laws;

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• Managing widespread operations and enforcing internal policies and procedures such as compliance with U.S.

and foreign anti-bribery, anti-corruption regulations and anti-money laundering, such as the FCPA, and antitrust laws;

and foreign anti-bribery, anti-corruption regulations and anti-money laundering regulations, such as the FCPA, and antitrust laws;

• Labor disputes and work stoppages at our operations and suppliers;

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corporation, we are subject to the FCPA, which may place us at a competitive disadvantage to foreign companies that are not subject to similar regulations.

Additionally, any determination that we have violated the FCPA or other anti-corruption laws could have a material adverse effect on us.

Additionally, any suspicion or determination that we have violated the FCPA or other anti-corruption laws could have a material adverse effect on us.

On August 31, 2022, we completed the sale of our Russian business to Arcelik and recorded a loss on disposal.

We continue to closely monitor the impact of the ongoing conflict in Ukraine on all aspects of our operations, including most importantly, the safety and security of our employees in the region.

The impact of the conflict in Ukraine and resulting sanctions and export controls, include, but are not limited to, macro financial impacts resulting from the exclusion of Russian financial institutions from the global banking system;

operational risks, including potential logistics, sales, distribution, and energy related challenges;

and reductions in consumer and trade customer demand.

Sanctions and export control laws may also have an indirect adverse effect on our business.

Sanctions against Russia have contributed to adverse changes in the global price and availability of certain raw materials, which has and could reduce our sales and earnings or otherwise have an adverse effect on our operations, and any future additional export controls or sanctions imposed by the United States, United Kingdom, the European Union, or other countries could further exacerbate these effects.

We may also experience potential additional impacts in the future.

We have not determined the extent to which our existing insurance coverage will respond to these impacts, or the extent to which any of the United States, European Union or other government actions may mitigate these impacts, if at all.

Risks associated with unanticipated social, political and/or economic events may materially and adversely impact our business.

Terrorist attacks, cyber events, armed conflicts, civil unrest, espionage, natural disasters, governmental actions, epidemics and pandemics (including the impacts of COVID-19 discussed elsewhere in Risk Factors) have and could affect our domestic and international sales, disrupt our supply chain, and impair our ability to produce and deliver our products.

Terrorist attacks, cyber events, armed conflicts (including the war in Ukraine discussed elsewhere in Risk Factors), civil unrest, espionage, natural disasters, governmental actions, epidemics and pandemics (including the impacts of COVID-19 discussed elsewhere in Risk Factors) have and could affect our domestic and international sales, disrupt our supply chain, and impair our ability to produce and deliver our products.

Many of such events have impacted and could directly impact our physical facilities or those of our suppliers or customers.

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Our systems may depend, directly or indirectly, on software developed by third parties (such as open source libraries or vendor software) and we may have limited visibility into the robustness of the security practices followed during design, development, or remediation of this third party software.

The failure of any such systems, whether internal or third-party, could disrupt our operations by causing transaction errors, processing inefficiencies, delays or cancellation of customer orders, the loss of customers, impediments to the manufacture or shipment of products, other financial and business disruptions, employee relations issues, the loss of or damage to intellectual property and the unauthorized disclosure or

compromise of personally identifiable data of consumers and employees or of commercially sensitive information.

In addition, we have outsourced certain technology services and administrative functions to third-party service providers and may outsource additional functions in the future.

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Cyber attacks are becoming more sophisticated and include ransomware attacks, attempts to gain unauthorized access to data, social engineering and other security breaches that have in the past and could in the future lead to disruptions in availability of critical systems, unauthorized release of confidential or otherwise protected information, and corruption of data.

Our growth in the areas of direct-to-consumer sales and connected appliances (the "Internet of Things"), accompanied by increasing handling of consumer information, and our reliance on pandemic-driven remote work arrangements, has increased these risks.

Our growth in the areas of direct-to-consumer sales and connected appliances (the "Internet of Things"), and increasingly advanced data processing capabilities, accompanied by increasing handling of consumer information, and our reliance on remote work arrangements, has increased these risks.

These events have in the past and could in the future impact our customers, consumers, employees, third-parties and reputation and lead to financial losses from remediation actions, loss of business or potential litigation or regulatory liability or an increase in expenses.

While we have not experienced any material impacts from a cyber attack, any one or more future cyber attacks could have a material adverse effect on our financial statements.

While we have not yet experienced any material impacts from a cyber attack, any one or more future cyber attacks could have a material adverse effect on our financial statements.

Further, market dynamics are increasingly driving heightened cybersecurity protections and mandating cybersecurity standards in our products, and we may incur additional costs to address these increased risks and to comply with such demands.

Product-related liability or product recall costs could adversely affect our business and financial performance.

We have been and may be exposed to product-related liabilities, which in some instances may result in product redesigns, product recalls, or other corrective action.

We have been and may in the future be exposed to product-related liabilities, which in some instances may result in product redesigns, product recalls, or other corrective action.

In addition, any claim, product recall or other corrective action that results in significant adverse publicity, particularly if those claims or recalls cause customers to question the safety or reliability of our products, may negatively affect our financial statements.

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The actual costs incurred as a result of these issues and any future issues could have a material adverse effect on our financial statements.

The ability of suppliers to deliver parts, components and manufacturing equipment to our manufacturing facilities, and our ability to manufacture without disruption, could affect our global business performance.

We use a wide range of materials and components in the global production of our products, which come from numerous suppliers around the world.

Because not all of our business arrangements provide for guaranteed supply and some key parts may be available only from a single supplier or a limited group of suppliers, we are subject to supply and pricing risk.

In addition, certain proprietary component parts used in some of our products are provided by single-source unaffiliated third-party suppliers.

We would be unable to obtain these proprietary components for an indeterminate period of time if these single-source suppliers were to cease or interrupt production or otherwise fail to supply these components to us, which could adversely affect our product sales and operating results.

Our operations and those of our suppliers are subject to disruption for a variety of reasons, including COVID-19-related supplier plant shutdowns or slowdowns, transportation delays, work stoppages, labor relations, governmental regulatory and enforcement actions, intellectual property claims against suppliers, disputes with suppliers, distributors or transportation providers, financial issues such as supplier bankruptcy, information technology failures, hazards such as fire, earthquakes, flooding, or other natural disasters, including due to climate change, and increased homeland security requirements in the U.S.

and other countries.

For example, we expect to continue to be impacted by supply chain issues, due to factors largely beyond our control:

a global shortage of certain components, such as semiconductors, a strain on raw material and input cost inflation, all of which could escalate in future quarters.

These issues have and could delay importation of products and/or components or require us to locate alternative providers to avoid disruption to customers.

These alternatives have not and in the future may not be available on short notice and have and in the future could result in higher transit costs, which could have an adverse impact on our business and financial statements.

Insurance for certain disruptions may not be available, affordable or adequate.

The effects of climate change, including extreme weather events, long-term changes in temperature levels and water availability may exacerbate these risks.

Such disruption has in the past and could in the future interrupt our ability to manufacture certain products.

Any significant disruption could have a material adverse impact on our financial statements.

Our ability to attract, develop and retain executives and other qualified employees is crucial to our results of operations and future growth.

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In addition, if we are unable to enforce certain non-compete covenants and confidentiality provisions when key employees leave for a competitor, we may lose a competitive advantage arising from confidential and proprietary company information known to such former employees.

An inability to hire, develop, transfer retained knowledge, engage and retain a sufficient number of qualified employees could materially hinder our business by, for example, delaying our ability to bring new products and services to market or impairing the success of our operations.

A deterioration in labor relations could adversely impact our global business.

As of December 31, 2021, we had approximately 69,000 employees.

As of December 31, 2022, we had approximately 61,000 employees globally.

We are subject to separate collective bargaining agreements with certain labor unions, as well as various other commitments regarding our workforce.

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Fluctuations and volatility in the cost and availability of raw materials and purchased components could adversely affect our operating results.

The sources and prices of the primary materials (such as steel, resins, and base metals) used to manufacture our products and components containing those materials are susceptible to significant global and regional price fluctuations or availability due to supply and demand trends, the COVID-19 pandemic, transportation and fuel costs, port and shipping capacity, labor costs or disputes, government regulations, including increased homeland security requirements, and tariffs, changes in currency exchange rates, price controls, the economic climate, severe weather, climate change and other unforeseen circumstances.

For example, we experienced raw material inflation of approximately $1.0 billion in 2021, in addition to many other cost increases throughout our business.

The sources and prices of the primary materials (such as steel, resins, and base metals) used to manufacture our products and components containing those materials are susceptible to significant global and regional price fluctuations or availability due to inflation, supply and demand trends, the COVID-19 pandemic, transportation and fuel costs, port and shipping capacity, labor costs or disputes, government regulations, including increased homeland security requirements, and tariffs, changes in currency exchange rates and interest rates, price controls, the economic climate, severe weather, climate change and other unforeseen circumstances.

For example, we experienced significant raw material inflation in 2021 and 2022, respectively, in addition to many other cost increases throughout our business.

In addition, we engage in contract negotiations and enter into commodity swap contracts to manage risk associated with certain commodities purchases, and we have in the past and may in the future experience losses based on commodity price changes.

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We use currency forwards, net investment hedges, and options to manage our foreign currency transaction exposures.

We cannot completely eliminate our exposure to foreign currency fluctuations, which may adversely affect our financial performance.

We cannot completely eliminate our exposure to foreign currency fluctuations, which have and may adversely affect our financial performance.

In addition, because our consolidated financial results are reported in U.S.

dollars, as we generate sales or earnings in other currencies, the translation of those results into U.S.

dollars, as we generate sales or earnings in other currencies,

the translation of those results into U.S.

dollars can result in a significant increase or decrease in the amount of those sales or earnings.

Finally, the amount of legal contingencies related to foreign operations may fluctuate significantly based upon changes in exchange rates and usually cannot be managed with currency forwards, options or other arrangements.

Such fluctuations in exchange rates can significantly increase or decrease the

amount of any legal contingency related to our foreign operations and make it difficult to assess and manage the potential exposure.

Such fluctuations in exchange rates can significantly increase or decrease the amount of any legal contingency related to our foreign operations and make it difficult to assess and manage the potential exposure.

Goodwill and indefinite-lived intangible asset impairment charges have in the past and may in the future adversely affect our operating results.

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Fair value determinations require considerable judgment and are sensitive to inherent uncertainties and changes in estimates and assumptions regarding revenue growth rates, EBIT margins, capital expenditures, working capital requirements, tax rates, terminal growth rates, discount rates, royalty rates, benefits associated with a taxable transaction and synergies available to market participants.

Declines in market conditions, a trend of weaker than anticipated financial performance for our reporting units or declines in projected revenue for our trademarks, a decline in our share price for a sustained period of time, an increase in the market-based weighted average cost of capital or a decrease in royalty rates, among other factors, are indicators that the carrying value of our goodwill or indefinite-life intangible assets may not be recoverable.

We recorded a goodwill impairment charge for our EMEA reporting unit of $278 million and recorded an impairment charge of $106 million for certain other intangible assets, each during the second quarter of 2022.

In the fourth quarter of 2022, and in connection with the planned divestiture of our European major domestic appliance business, the remaining carrying value of $255 million for the EMEA trademarks was classified as held for sale.

We did not record any impairment charges for the year ended December 31, 2021.

We recorded an immaterial impairment charge related to other intangibles for the year ended December 31, 2020 related to the EMEA reporting unit.

During the fourth quarter of 2022, we completed the acquisition of the InSinkErator business and as a result recorded an increase in goodwill of $1.1 billion and an increase of intangible assets of $1.6 billion.

We may in the future be required to record a goodwill or intangible asset impairment charge that, if incurred, could have a material adverse effect on our financial statements.

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For example, we are currently disputing certain income and indirect tax related assessments issued by the Brazilian authorities (see Note 8 and Note 15);

we are disputing a proposed IRS income tax assessment in the United States Sixth Circuit Court of Appeals (see Note 15);

and we are disputing certain income and indirect tax assessments in various legal proceedings in Italy, India and other jurisdictions globally.

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Such proceedings could also generate significant adverse publicity and have a negative impact on our reputation and brand image, regardless of the existence or amount of liability.

We estimate loss contingencies and establish accruals as required by generally accepted accounting principles, based on our assessment of contingencies where liability is deemed probable and reasonably estimable, in light of the facts and circumstances known to us at a particular point in time.

We estimate loss contingencies and establish accruals as required by GAAP, based on our assessment of contingencies where liability is deemed probable and reasonably estimable, in light of the facts and circumstances known to us at a particular point in time.

Subsequent developments in legal proceedings, volatility in foreign currency exchange rates and other factors may affect our assessment and estimates of the loss contingency recorded and could result in an adverse effect on our results of operations in the period in which a liability would be recognized or cash flows for the period in which amounts would be paid.

Actual results may significantly vary from our reserves.

We may experience additional delays in resolving these matters as a result of COVID-19-related administrative and judicial system temporary delays.

We are subject to, and could be further subject to, governmental investigations or actions by other third parties.

We are subject to various federal, foreign and state laws, including antitrust and product-related laws and regulations, violations of which can involve civil or criminal sanctions.

Responding to governmental investigations or other actions may be both time-consuming and disruptive to our operations and could divert the attention of our management and key personnel from our business operations.

For example, the second part of a French Competition Authority investigation, which is expected to focus primarily on manufacturer interactions with retailers, is ongoing.

The impact of these and other investigations and lawsuits could have a material adverse effect on our financial statements.

The impact of these and other investigations and lawsuits could have a material adverse effect on our financial statements and harm our reputation.

Changes in the legal and regulatory environment, including data privacy and protection, and changes in taxes and tariffs, could limit our business activities, increase our operating costs, reduce demand for our products or result in litigation or regulatory action.

The conduct of our businesses, and the production, distribution, sale, advertising, labeling, safety, transportation and use of many of our products, are subject to various laws and regulations administered by federal, state and local governmental agencies in the United States, as well as to foreign laws and regulations administered by government entities and agencies in countries in which we operate.

Compliance with these regulations may be require us to, among other things, change our manufacturing processes or product offerings, or undertake other costly activities.

In addition, we operate in an environment in which there are different and potentially conflicting data privacy and data protection laws in effect in the various U.S.

states and foreign jurisdictions in which we operate and we must understand and comply with each law and standard in each of these jurisdictions.

For example, the European Union’s General Data Protection Regulation, which became effective in May 2018, the Brazilian General Data Protection Law, which came into effect in September 2020 and various other privacy and data protection laws that have been passed or are pending in other countries collectively impose or will impose new regulatory data privacy and protection standards for which we must comply.

For example, the European Union’s General Data Protection Regulation, the California Consumer Privacy Act and the Brazilian General Data Protection Law, and various other privacy and data protection laws that have been passed or are pending in other countries collectively impose or will impose new regulatory data privacy and protection standards for which we must comply.

These expanding privacy and data protection laws may affect our collection, processing, and cross-border transfer of consumer information and other personal data, such as in connection with our growth in the areas of direct-to-consumer sales, Internet of Things, and the digital space.

Some of the laws allow for significant fines, reaching several percentage points of global corporate revenues or more.

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Additionally, we could be subjected to future liabilities, fines or penalties or the suspension of product production for failing to comply, or being alleged as failing to comply, with various laws and regulations, including environmental regulations.

Additionally, as a global company based in the United States, we are exposed to the impact of U.S.

Additionally, as a global company headquartered in the United States, we are exposed to the impact of U.S.

and global tax changes, especially those that affect the effective corporate income tax rate.

In August 2022, the United States enacted the Inflation Reduction Act of 2022 (“the Act”), which, among other provisions, created a 1% excise tax on share repurchases and a new corporate minimum tax for certain corporations with regular corporate income tax liabilities below, in general, 15% of their consolidated GAAP pre-tax income.

We do not expect the Act to have a material impact on our effective tax rate;

however, it is possible that the U.S.

or another jurisdiction could enact tax legislation in the future that could have a material impact on our tax rate.

The Organization for Economic Co-operation and Development (the “OECD”) is currently working on the base erosion and profit shifting 2.0 project (the “BEPS Project”), which is intended to modernize the international tax system by, among other measures, ensuring that large multinational enterprises pay a minimum level of tax in each of the jurisdictions in which they operate (such minimum tax proposal, “Pillar Two”).

Pillar Two addresses the risk of profit shifting to entities in low tax jurisdictions by introducing a global minimum tax rate of 15%.

In December 2021, the OECD released model rules in respect of Pillar Two (the “GloBE Rules”).

If implemented in their current form by the members of the OECD/G20 Inclusive Framework on BEPS, the GloBE rules would impose a top-up tax on profits arising in a jurisdiction whenever the effective tax rate of a large multinational enterprise, determined on a jurisdictional basis, is below the 15% minimum rate.

In December 2022, the European Union member states formally adopted the European Commission’s proposal for a Directive ensuring a 15% minimum effective tax rate for large multinational groups (the “Pillar Two Directive”).

The Pillar Two Directive is expected to be implemented in the national law of the European Union member states by December 31, 2023.

If Pillar Two (including the GloBE rules) and the Pillar Two Directive are implemented in the domestic laws of any jurisdictions in which we operate, or via international treaties entered into between such jurisdictions, we expect they

would apply to our subsidiaries and could impact our consolidated effective corporate income tax rate as well as increase our tax compliance costs incurred to track and collect such taxes.

Until the OECD’s proposals on Pillar Two (including the GloBE Rules), and the Pillar Two Directive for the EU member states, have been implemented under domestic laws and/or international treaties, the extent of any impact on our tax liabilities and operations cannot be determined accurately and remains uncertain.

In addition, the current domestic and international political environment, including government shutdowns and changes to U.S.

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These regulatory changes could significantly impact our business and financial performance.

For additional information about our consolidated tax provision, see Note 15 to the Consolidated Financial Statements, and for additional information about global trade and tariffs, please see "Other Matters" in the Management's Discussion and Analysis section of this Annual Report on Form 10-K.

For additional information about our consolidated tax provision, see Note 15 to the Consolidated Financial Statements.

The impact of climate change and climate change or other environmental regulation may adversely impact our business.

The effects of climate change could have an impact on our business and cause us to incur capital and other expenditures to comply with various laws and regulations, especially relating to the protection of the environment, human health and safety, and water and energy efficiency.

Climate change regulations at the federal, state or local level, or in international jurisdictions could require us to limit emissions, change our manufacturing processes or product offerings, or undertake other costly activities.

The effects of climate change, whether involving physical risks or transition risks, could have an impact on our business and have in the past and could in the future cause us to incur capital and other expenditures to comply with various laws and regulations, especially relating to the protection of the environment, human health and safety, and water and energy efficiency, and may also exacerbate other risks discussed elsewhere in Item 1A.

Risk Factors in this Annual Report on Form 10-K, which could have an adverse effect on our business.

Climate change regulations at the federal, state or local level, or in international jurisdictions, or customer or consumer preferences or expectations, could require us to limit emissions, change our manufacturing processes or product offerings, or undertake other costly activities.

For example, various municipal, state, and federal regulators have discussed, proposed, or enacted new regulations or bans on appliances that utilize natural gas citing climate change and other regulatory concerns, which would impose transition costs and impact our product mix and product offerings, among other impacts.

We recognize that making changes to our supply chain, manufacturing processes and product offerings can and does introduce transition risks.

Among these are the risk that our more efficient product offerings are not competitive in terms of price or consumer perception;

the risk that our upstream suppliers are unable to deliver lower emissions sources of supply that are cost and quality-competitive;

the risk that we fail to continually innovate to develop products and manufacturing processes with a lower carbon footprint;

and, specific to our recycled plastics initiative (a pledge in our EMEA region to use an average 18% recycled plastic content by 2025), the risk that we fail to develop solutions to incorporate reformulated plastics materials that meet our rigorous quality and safety standards.

We are also subject to global regulations related to chemical substances and materials in our products (such as the U.S.

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In particular, cleanup obligations that might arise at any of our manufacturing sites or the imposition of more stringent environmental laws in the future could adversely affect our business.

We have set rigorous science-based targets for greenhouse gas reductions and related sustainability goals, including a "net-zero" emissions target in our plants and operations that was

announced in 2021.

We have set rigorous science-based targets for greenhouse gas reductions and related sustainability goals, including a net zero emissions target in our plants and operations that was announced in 2021.

Any failure to achieve our sustainability goals or reduce our impact on the environment, any changes in the scientific or governmental metrics utilized to objectively measure success, or the perception that we have failed to act responsibly regarding climate change could result in negative publicity and adversely affect our reputation as well as our relationships with customers, investors and other stakeholders, which could in turn adversely affect our business operations, reputation, including a reduction in customer and consumer sentiment and negatively impact our financial

condition, including our access to capital and cost of debt.

In addition, not all of our competitors may seek to establish climate or other ESG targets and goals, or at a comparable level to ours, which could result in our competitors achieving competitive advantages through lower supply chain or operating costs, which could adversely affect our business, results of operations, financial condition and prospects.

Additionally, any failure in our procedures to monitor climate related regulatory and policy changes in the jurisdictions in which we operate or in our processes and tools to track our greenhouse gas emissions and assess both operational and financial impacts of climate-related regulations, and any failure to comply with any such regulations and policies, could subject us to additional costs and penalties and harm to our reputation.

Violations of environmental, health and safety laws are subject to civil, and, in some cases, criminal sanctions.

As a result of these various uncertainties, we may incur unexpected interruptions to operations, fines, penalties or other reductions in income which could adversely affect our business, financial condition and results of operations, and harm our reputation.

GENERAL RISKS

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and other countries which we operate.

Economic uncertainty and related factors exacerbate negative trends in business and consumer spending and has caused and may cause certain customers to push out, cancel, or refrain from placing orders for our products.

Economic uncertainty and related factors, including a potential recession or recession, may exacerbate negative trends in business and consumer spending and has caused and may cause certain customers to push out, cancel, or refrain from placing orders for our products.

Uncertain market conditions, difficulties in obtaining capital, or reduced profitability has caused and may cause some customers to scale back operations, exit markets, merge with other retailers, or file for bankruptcy protection and potentially cease operations, which can also result in lower sales and/or additional inventory.

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Regional, political and economic instability in countries in which we do business may adversely affect business conditions, disrupt our operations, and have an adverse effect on our financial condition and results of operations.

In addition, we expect to continue to be impacted by the global supply chain issues discussed above under Operational Risks.

In addition, we expect to continue to be impacted by the global supply chain issues discussed elsewhere in Item 1A.

Risk Factors in this Annual Report on Form 10-K.

Uncertainty about future economic and industry conditions also makes it more challenging for us to forecast our operating results, make business decisions, and identify and prioritize the risks that may affect our businesses, sources and uses of cash, financial condition and results of operations.

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Our ability to access liquidity or borrow to invest in our businesses, fund strategic acquisitions and refinance maturing debt obligations depends in part on access to the capital markets.

For example, the United States Federal Reserve began raising its benchmark rate in March 2022, increasing the rate by a total of 3.75% since the start of 2022.

Such increases and any future increases may, among other things, reduce the availability and increase the costs of obtaining new variable rate debt and refinancing existing indebtedness, and adversely affect our financial condition and results of operations.

If inflation increases costs beyond our ability to control, we may not be able to adjust prices or use our portfolio strategy to sufficiently offset the effect without negatively

impacting consumer demand or our gross margin.

If we do not timely and appropriately adapt to changes resulting from the uncertain macroeconomic environment and industry conditions, or to difficulties in the financial markets, or if we are unable to continue to access the capital markets, our financial statements may be materially and adversely affected.

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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 1A. Risk Factors