What changed in this filing

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Item 7. Management’s Discussion and Analysis

2023-02-10 compared with 2022-02-10 · 222 added, 261 removed, 383 unchanged (56% of the section changed)

3 unchanged sentences

Certain references to particular information in the Notes to the Consolidated Financial Statements are made to assist readers.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS - (CONTINUED)

Whirlpool delivered record results through strong execution despite the impacts of global supply chain disruptions and inflation, alongside ongoing disruptions from COVID-19.

Whirlpool delivered full-year net sales growth of 13% and GAAP net earnings available to Whirlpool of $1.8 billion (net earnings margin of 8.1%), or $28.36 per share, compared to GAAP net earnings available to Whirlpool of $1.1 billion (net earnings margin of 5.6%), or $16.98 per share in the same prior-year period.

On a GAAP basis, net earnings margins were driven by price/mix and strong cost takeout actions more than offsetting $1 billion in raw material inflation costs in the period.

Cash provided by operating activities of $2.2 billion, compared to $1.5 billion in 2020, was driven by higher earnings.

Whirlpool delivered ongoing (non-GAAP) earnings per share of $26.59 and full-year ongoing EBIT margin of 10.8%, compared to $18.46 and 9.0% in the same prior-year period.

These results were driven by positive price/mix and cost takeout actions more than offsetting inflation, in particular in raw materials and logistics.

In addition, we delivered record adjusted free cash flow (1) (non-GAAP) of $2.0 billion in 2021, compared to $1.2 billion in 2020, primarily driven by strong earnings and disciplined working capital management.

Additionally, we strengthened our balance sheet and delivered on our long-term gross debt leverage target 2x, with a 2021 result of 1.8x.

Lastly, we returned $1.4 billion in cash to shareholders, including an increase in our dividend and $1 billion of share repurchases.

Whirlpool significantly accelerated its portfolio transformation with the divestiture of its Russia business, the acquisition of InSinkErator and the conclusion of the EMEA strategic review which resulted in an agreement to contribute Whirlpool's European major domestic appliance business to a newly formed entity.

Collectively, these actions are expected to deliver an enhanced financial profile as we transform our portfolio to a high-growth, high-margin business.

In a challenging macroeconomic cycle, including softening consumer sentiment and inflationary pressures, Whirlpool's full-year net sales declined 10%, including Whirlpool Russia net sales of $138 million in 2022 compared to $505 million of net sales in the prior year.

Whirlpool saw GAAP net loss available to Whirlpool of $1,519 million (net loss margin of (7.7)%), or $(27.18) per share, compared to GAAP net earnings available to Whirlpool of $1,783 (net earnings margin of 8.1%), or $28.36 per share in the same prior-year period.

Additionally, Whirlpool delivered ongoing (non-GAAP) earnings per share of $19.64 and full-year ongoing EBIT margin of 6.9%, compared to $26.59 and 10.8% in the same prior-year period.

On a GAAP basis, net loss margins were impacted by $1.9 billion due to primarily non-cash charges related to the divestiture of the Whirlpool Russia business and the conclusion of the strategic review of EMEA.

On a GAAP and ongoing basis Whirlpool's results were impacted by lower volumes and cost inflation partially offset by favorable price/mix and lower GAAP and adjusted tax rates.

Cash provided by operating activities of $1.4 billion, compared to $2.2 billion in 2021, alongside free cash flow (non-GAAP) of $820 million in 2022, compared to $1.7 billion in 2021, primarily driven by lower earnings, partially offset by favorable working capital and hedge settlements in the current period.

In 2022, Whirlpool returned $1.3 billion in cash to shareholders, including a twenty-five percent increase in our quarterly dividend and over $900 million of share repurchases, in addition to the $1.4 billion returned to shareholders in 2021.

Please see "Non-GAAP Financial Measures" elsewhere in this Management's Discussion and Analysis for a reconciliation of these non-GAAP financial measures.

We are very pleased with the agility our organization has demonstrated to deliver record results in any operating environment.

This includes the successful execution of our go-to-market initiatives, furthering our digital transformation strategy and dedicated cost management.

The strong actions we have taken in our international regions have led to EMEA increasing margins by 200 basis points and returning the Asia region to profitability, in line with our expectations, demonstrating the effectiveness of our strategic actions to date.

Lastly, after consistently delivering at or above our Long-term value creations goals we set in 2017, this year we introduced new, increased, long-term value creation goals.

Our continued performance and strong consumer demand trends provides us confidence that we will continue to deliver strong shareholder returns in 2022.

Long-Term Value Creation Goals

Reconciliations to the equivalent GAAP measures -- net sales, net earnings, cash provided by (used in) operating activities, and return on assets -- for the metrics below are not provided as they rely on market factors and other assumptions outside of our control.

Long-Term Value Creation Goals

(Annual Expectation)

Sales (Annual Organic Net Sales Growth Excluding Currency)

Ongoing EBIT (Ongoing Earnings Before Interest and Tax, % of Net Sales)

FCF (1) (Free Cash Flow as % of Net Sales)

ROIC (Return of Invested Capital)

Updated 5-6% 11-12% 7-8% 15-16%

Previous ~3% ~10% 6%+ 12-14%

(1) Throughout 2021 and comparable periods, the Company defines adjusted free cash flow as cash provided by (used in) operating activities less capital expenditures and including proceeds from the sale of assets/businesses, and changes in restricted cash.

Going forward, the Company presents free cash flow which is cash provided by (used in) operating activities less capital expenditures.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

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Income tax expense 265 48.8 518 (35.6) 382

Net earnings available to Whirlpool 1,783 65.9 1,075 (8.0) 1,168

Diluted net earnings available to Whirlpool per share $ 28.36 67.0% $ 16.98 (6.7)% $ 18.19

Net earnings available to Whirlpool (1,519) nm 1,783 65.9 1,075

Diluted net earnings available to Whirlpool per share $ (27.18) nm $ 28.36 67.0% $ 16.98

not meaningful

Consolidated net sales for 2022 decreased by 10.3% compared to 2021, primarily driven by lower volumes, divestiture of our Russia business and the impact of foreign currency, partially offset by the favorable impact of product/price mix.

Excluding the impact of foreign currency, net sales for 2022 decreased 8.1% compared to 2021.

Consolidated net sales for 2021 increased 13.0% compared to 2020, primarily driven by the favorable impact of product price/mix.

Excluding the impact of foreign currency, net sales for 2021 increased 12.3% compared to 2020.

Consolidated net sales for 2020 decreased 4.7% compared to 2019, primarily driven by the divestiture of the Embraco compressor business, lower volumes and unfavorable foreign currency, partially offset by the favorable impact of product price/mix.

Organic net sales (net sales excluding foreign currency and Embraco) for 2020 increased 1.1% compared to 2019.

For additional information regarding non-GAAP financial measures including organic net sales and net sales excluding the impact of foreign currency, see the Non-GAAP Financial Measures section of this Management's Discussion and Analysis.

The chart below summarizes the balance of net sales by operating segment for 2022, 2021 and 2020, respectively.

The consolidated gross margin percentage for 2022 decreased to 15.6% compared to 20.1% in 2021, primarily driven by lower volume, cost inflation and inventory reduction actions, partially offset by favorable product price/mix.

The consolidated gross margin percentage for 2021 increased to 20.1% compared to 19.7% in 2020, primarily driven by the favorable impact of product price/mix, partially offset by raw material inflation and increased marketing and technology investments.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS - (CONTINUED)

The consolidated gross margin percentage for 2020 increased to 19.7% compared to 17.2% in 2019, primarily driven by the favorable impact of product price/mix, cost reduction initiatives, raw material deflation, and a gain on sale-leaseback, partially offset by unfavorable foreign currency and lower unit volumes.

Results of Operating Segments

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See Note 16 to the Consolidated Financial Statements for additional information.

On January 16, 2023, Whirlpool entered into a contribution agreement with Arçelik A.Ş (“Arcelik”) related to our European major domestic appliance business which is reported within our EMEA reportable segment.

The European disposal group met the criteria for held for sale accounting during the fourth quarter of 2022.

The operations of the disposal group did not meet the criteria to be presented as discontinued operations.

The transaction is expected to close in the second half of 2023 and the results of European major domestic appliance business will be included in our financials until closing of the transaction.

For additional information, see Note 17 to the Consolidated Financial Statements.

Whirlpool will retain ownership of its EMEA KitchenAid small domestic appliance business.

The following is a discussion of results for each of our operating segments.

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Net Sales Summary

Net sales for 2021 increased 11.4% compared to 2020 primarily driven by the favorable impact of product price/mix.

Excluding the impact of foreign currency, net sales increased 10.9% in 2021.

Net sales for 2020 decreased 2.3% compared to 2019 primarily due to lower volumes.

Net sales for 2022 decreased 8.1% compared to 2021 primarily driven by lower volume, partially offset by favorable impact of product price/mix.

Excluding the impact of foreign currency, net sales decreased 7.9% in 2022.

Ne t sales for 2021 increased 11.4% compared to 2020 primarily driven by the favorable impact of product price/mix.

Excluding the impact of foreign currency, net sales increased 10.9% in 2021.

EBIT margin for 2022 was 11.5% compared to 17.8% for 2021 .

EBIT increased primarily due to the favorable impact of product price/mix, partially offset by the unfavorable impacts of inflation and increased marketing and technology investments.

EBIT decreased primarily due to lower volume and cost inflation, partially offset by the favorable impact of product/price mix.

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

EBIT increased primarily due to the favorable impact of product price/mix, raw material deflation and cost reduction actions, partially offset by the impact of lower volumes.

EBIT increased primarily due to the favorable impact of price/mix, partially offset by the unfavorable impacts of inflation and increased marketing and technology investments.

Net Sales Summary

Net sales for 2022 decreased 20.9% compared to 2021 primarily driven by lower volume, unfavorable impact of foreign currency and divestiture of our Russia business, partially offset by product price/mix.

Excluding the impact of foreign currency, net sales decreased 11.8% in 2022.

Net sales for 2021 increased 15.9% compared to 2020 primarily due to higher volumes, the favorable impact of product price/mix, and foreign currency.

Excluding the impact of foreign currency, net sales increased 12.5% in 2021.

Net sales for 2020 increased 2.1% compared to 2019, primarily due to the favorable impact of product price/mix, partially offset by the unfavorable impact of lower volumes.

Excluding the impact of foreign currency, net sales increased 1.8% in 2020.

EBIT margin for 2022 was (1.4)% compared to 2.0% for 2021 .

EBIT increased primarily due to cost productivity, the favorable impacts of product price/mix and higher volumes, partially offset by the unfavorable impacts of raw material inflation.

EBIT decreased primarily due to lower volume and cost inflation, partially offset by the favorable impacts of product/price mix.

EBIT margin for 2021 was 2.0% compared to 0.0% for 2020.

In 2020, EBIT increased primarily due to the cost reductions driven by fixed cost actions and favorable impact of raw material deflation, partially offset by foreign currency and increased marketing and technology investments.

In 2021, EBIT increased primarily due to cost productivity, the favorable impacts of product price/mix and higher volumes, partially offset by the unfavorable impacts of raw material inflation.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

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Net Sales Summary

Net sales for 2022 decreased 1.3% compared to 2021 primarily driven by lower volume, partially offset by the favorable impact of product price/mix and the impact of foreign currency.

Excluding the impact of foreign currency, net sales decreased 3.5% in 2022.

Net sales for 2021 increased 22.2% compared to 2020 primarily driven by the favorable impact of product price/mix and higher volumes, partially offset by the unfavorable impact of foreign currency.

Excluding the impact of foreign currency, net sales increased 25.6% in 2021.

Net sales for 2020 decreased 18.4% compared to 2019 primarily due to the divestiture of the Embraco compressor business (completed in July 2019) and the unfavorable impact of foreign currency, partially offset by volume growth.

Organic net sales increased 22.8% in 2020.

EBIT margin for 2022 was 6.4% compared to 8.4% for 2021.

EBIT margin decreased primarily due to cost inflation and lower volume, partially offset by the favorable impacts of product/price mix.

EBIT margin for 2021 and 2020 was 8.4%.

EBIT margin was unchanged primarily due to the favorable impact of product price/mix offset by raw material inflation, the unfavorable impact of foreign currency and unfavorable cost productivity.

EBIT margin for 2020 was 8.4% compared to 5.4% for 2019.

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

Net Sales Summary

Net sales for 2021 decreased 2.1% compared to 2020 primarily due to the divestiture of Whirlpool China, partially offset by favorable product price/mix.

Net sales for 2022 decreased 11.2% compared to 2021 primarily due to the divestiture of Whirlpool China and unfavorable impact of foreign currency, partially offset by favorable product price/mix.

Excluding the impact of foreign currency, net sales decreased 6.8% in 2022.

Net sales for 2020 decreased 16.5% compared to 2019 primarily due to lower volumes and the unfavorable impacts of foreign currency, partially offset by the favorable impact of product price/mix.

Net sales for 2021 decreased 2.1% compared to 2020 primarily due to the divestiture of Whirlpool China, partially offset by favorable product price/mix.

Excluding the impact of foreign currency, net sales decreased 3.4% in 2021.

EBIT margin for 2022 was 4.9% compared to 5.4% for 2021.

EBIT increased primarily due to the favorable product price/mix and the divestiture of Whirlpool China, partially offset by the unfavorable impact of raw material inflation.

EBIT decreased primarily due to lower volume and cost inflation, partially offset by the favorable impact of product price/mix.

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

EBIT decreased primarily due to lower volumes and the unfavorable impacts of product price/mix, partially offset by cost takeout actions and raw material deflation.

EBIT increased primarily due to the favorable product price/mix and the divestiture of Whirlpool China, partially offset by the unfavorable impact of raw material inflation.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

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Consolidated $ 1,820 9.2 % $ 2,081 9.5 % $ 1,877 9.6 %

Consolidated selling, general and administrative expenses as a percent of consolidated net sales in 2022 decreased compared to 2021.

The decrease is primarily driven by a reduction in employee compensation related costs, reductions in marketing spend, a gain from a sale -leaseback transaction, divestiture of businesses and benefits of prior restructuring actions.

Consolidated selling, general and administrative expenses as a percent of consolidated net sales in 2021 is comparable to 2020.

Consolidated selling, general and administrative expenses as a percent of consolidated net sales in 2020 decreased compared to 2019 due to fixed cost actions and reduced marketing investments.

Restructuring

We incurred restructuring charges of $21 million, $38 million and $288 million for the years ended December 31, 2022, 2021 and 2020, respectively.

For the full year 2022, we expect to incur less than $50 million of restructuring charges, driven by our previously announced global cost reduction efforts.

For the full year 2023, we expect to incur less than $50 million of restructuring charges, similar to the past two years.

See Note 14 to the Consolidated Financial Statements for additional information.

Impairment of Goodwill and Other Intangibles

No impairment charges were recorded for the year ended December 31, 2021.

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

In the second quarter of 2022, we recorded an impairment loss of $384 million related to goodwill ($278 million) and other intangibles ($106 million) related to the EMEA reporting unit, Indesit and Hotpoint* trademarks, respectively.

The primary indicators of impairment were the adverse impacts from the continuation of the Russia and Ukraine conflict resulting in economic uncertainty in the EMEA region, the divestiture of our Russia operations and other macroeconomic factors.

No material impairment charges of goodwill or other intangibles were recorded for the years ended December 31, 2021 or 2020, respectively.

See Note 6 and Note 11 to the Consolidated Financial Statements and the Critical Accounting Policies and Estimates section of this Management's Discussion and Analysis for additional information.

(Gain) Loss on Sale and Disposal of Businesses

In the fourth quarter of 2022, we incurred a loss of $1,521 million related to the planned divestiture of our European major domestic appliance business.

The loss includes a write-down of the net assets of $1,151 million of the disposal group to a fair value of $139 million and also includes $393 million of cumulative currency translation adjustments, $98 million release of other comprehensive loss on pension and $18 million of other transaction related costs.

The net assets of the disposal group also include the EMEA trademarks, Hotpoint* and Indesit , which were impaired as part of the write-down .

* Whirlpool ownership of the Hotpoint brand in the EMEA and Asia Pacific regions is not affiliated with the Hotpoint brand sold in the Americas.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS - (CONTINUED)

On June 27, 2022, our subsidiary Whirlpool EMEA SpA entered into a share purchase agreement with Arcelik to sell our Russian business to Arcelik for contingent consideration.

On August 31, 2022, we completed the sale to Arcelik.

We incurred a loss of $348 million for the twelve months ended December 31, 2022 related to the sale of the Russia business.

On May 6, 2021, the partial tender offer for Whirlpool China was completed and, subsequent to the deconsolidation of the entity, we recorded a gain of $284 million in the third quarter of 2021.

1 unchanged sentence

During the third quarter of 2021, an additional loss of $13 million related to the final purchase price adjustments was recorded, increasing the total loss to $177 million.

We recorded a pre-tax gain of $511 million on the sale of the Embraco compressor business for the year ended December 31, 2019.

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

We recorded a loss of $74 million for the year ended December 31, 2019 related to charges on the sale of the South Africa business ($63 million) and costs associated with the exit of the Turkey domestic sales operations ($11 million).

See Note 17 to the Consolidated Financial Statements for additional information.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS - (CONTINUED)

Interest and Sundry (Income) Expense

Interest and sundry (income) expenses were $(19) million, $(159) million and $(21) million for the years ended December 31, 2022, 2021 and 2020, respectively.

Net interest and sundry income increased $138 million in 2021 compared to 2020, primarily due to a gain of $42 million on previously held equity interest of 49% in Elica PB India and the higher expense of pension settlements and other postretirement benefit plans in the prior year.

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

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

Net interest and sundry income decreased $140 million in 2022 compared to 2021, primarily due to a substantial liquidation of an offshore subsidiary, resulting in a total charge of $84 million for a release of other comprehensive income on hedging and cumulative translation adjustments.

The remaining decrease is primarily due to a gain of $42 million on previously held equity interest of 49% in Elica PB India recorded in the prior year.

Net interest and sundry income increased $138 million in 2021 compared to 2020, primarily due a gain of $42 million on previously held equity interest of 49% in Elica PB India in 2021 and the higher expense of pension settlements and other postretirement benefit plans in 2020.

Interest Expense

Interest expense was $190 million, $175 million and $189 million for the years ended December 31, 2022, 2021 and 2020, respectively.

Interest expense increased in 2022 compared to 2021 primarily due to increase in long-term debt driven by the InSinkErator acquisition.

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

Interest expense was comparable in 2020 to 2019.

For additional information, see Note 7 to the Consolidated Financial Statements.

Income tax expense was $265 million, $518 million and $382 million for the years ended December 31, 2022, 2021 and 2020, respectively.

The change in tax expense in 2022 compared to 2021 is primarily due to overall lower level of earnings, partially offset by the impact of recorded impairments on the sale and disposal of businesses and goodwill which are not deductible, and increases in valuation allowances.

The increase in tax expense in 2021 compared to 2020 is primarily due to higher earnings and related tax expense, audits and settlements, partially offset by legal entity restructuring tax benefits.

In the fourth quarter of 2021, we recorded a $98 million reserve related to an unfavorable ruling in our ongoing tax litigation described in Note 15.

The increase in tax expense in 2020 compared to 2019 is primarily due to changes in valuation allowance, legal entity restructuring tax benefits, and earnings dispersion related to the sale of Embraco.

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

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Current Outlook

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

Estimated GAAP earnings per diluted share, for the year ending December 31 $16.00 — $18.00

Industry demand

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Latin America

Asia 5% —% 6%

For the full-year 2022, we expect the following key trends to continue and have incorporated our latest expectations of these in our guidance:

continued supply constraints and elevated inflationary costs, as well as positive price/mix led by previously announced cost-based price increases.

For the full-year 2023, we have incorporated our latest expectations of the following key trends in our guidance:

subdued demand with gradual improvement throughout the year, strong net cost takeout actions delivering $500 million benefit, as well as raw material inflation tailwinds combined for $800-$900 million cost benefits.

Our anticipated tax rate is between 14% and 16%.

Additionally, we expect to generate cash from operating activities of $2.2 billion and free cash flow of $1.5 billion, including restructuring cash outlays of approximately $50 million and, with respect to free cash flow, capital expenditures of approximately $700 million.

Additionally, we expect to generate cash from operating activities of approximately $1.4 billion and free cash flow of approximately $800 million, including restructuring cash outlays of approximately $25 million and, with respect to free cash flow, capital expenditures of approximately $600 million.

The table below reconciles projected 2023 cash provided by operating activities determined in accordance with GAAP to free cash flow, a non-GAAP measure.

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• Sales excluding foreign currency

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

• Free cash flow and adjusted free cash flow

• Free cash flow

• Gross debt leverage

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dollars using the prior-year period's exchange rate compared to the prior-year period net sales.

Organic net sales is calculated by excluding divestitures and foreign currency.

Management believes that organic net sales and sales excluding foreign currency provides stockholders with a clearer basis to assess our results over time, excluding the impact of exchange rate fluctuations, and in the case of organic net sales, excluding the impact of our Embraco compressor business divested in July 2019.

Management believes that sales excluding foreign currency provides stockholders with a clearer basis to assess our results over time, excluding the impact of exchange rate fluctuations.

Management believes that Gross Debt Leverage (Gross Debt/Ongoing EBITDA) provides stockholders with a clearer basis to assess the Company's ability to pay off its incurred debt.

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Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names.

These non-GAAP financial measures should not be considered in isolation or as a substitute for reported net earnings (loss) available to Whirlpool, net sales, net earnings as a percentage of net sales (net earnings margin), net earnings (loss) per diluted share and cash provided by (used in) operating activities, the most directly comparable GAAP financial measures.

These non-GAAP financial measures should not be considered in isolation or as a substitute for reported net earnings (loss) available to Whirlpool, net sales, net earnings (loss) as a percentage of net sales (net earnings margin), net earnings (loss) per diluted share and cash provided by (used in) operating activities, the most directly comparable GAAP financial measures.

We strongly encourage investors and stockholders to review our financial statements and publicly filed reports in their entirety and not to rely on any single financial measure.

12 unchanged sentences

Restructuring expense (a)

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

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

Impairment of goodwill, intangibles and other assets (b)

Impact of M&A transactions (c)

1,936 (107) (7)

Product warranty and liability (income) expense (d)

Corrective action recovery (e)

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

Trade customer insolvency claim settlement (g)

Brazil indirect tax credit (h)

Substantial liquidation of subsidiary (d)

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

Product warranty and liability (income) expense (f)

Corrective action recovery (g)

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

Ongoing EBIT (2)

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Restructuring expense (a)

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

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

(1.69) (0.10)

Product warranty and liability (income) expense (d)

(0.14) (0.47)

Corrective action recovery (e)

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

Impairment of goodwill and other intangibles (b)

Impact of M&A transactions (c)

Substantial liquidation of subsidiary (d)

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

Product warranty and liability (income) expense (f)

Income tax impact (1.89) 0.41

Normalized tax rate adjustment (i)

Share count adjustment (j)

Ongoing earnings per diluted share $ 19.64 $ 26.59

1 unchanged sentence

RESULTS OF OPERATIONS - (CONTINUED)

Throughout 2021 and comparable periods, the Company defines adjusted free cash flow as cash provided by (used in) operating activities less capital expenditures and including proceeds from the sale of assets/businesses, and changes in restricted cash.

Going forward, the Company presents free cash flow which is cash provided by (used in) operating activities less capital expenditures.

Adjusted Free Cash Flow (FCF) Reconciliation:

Throughout 2021 and comparable periods, the Company defined adjusted free cash flow as cash provided by (used in) operating activities less capital expenditures and including proceeds from the sale of assets/businesses, and changes in restricted cash.

Starting in 2022, the Company presents free cash flow which is cash provided by (used in) operating activities less capital expenditures.

Adjusted free cash flow of $1,963 million and $1,246 million in 2021 and 2020 has been restated to $1,651 million and $1,091 million free cash flow measure, respectively, to conform with current year presentation.

Free Cash Flow (FCF) Reconciliation:

Twelve Months Ended December 31,

2022 2021 2020

as adjusted as adjusted

Cash provided by (used in) operating activities $ 1,390 $ 2,176 $ 1,500

Capital expenditures (570) (525) (410)

Proceeds from sale of assets and businesses (5)

302 166 1,174

Change in restricted cash (4)

Repayment of term loan (5)

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

Free cash flow $ 820 $ 1,651 $ 1,090

Cash provided by (used in) investing activities $ (3,568) $ (660) $ (237)

Cash provided by (used in) financing activities $ 1,206 $ (1,339) $ (253)

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

(4) Proceeds from the sale of assets and business for the twelve months ended December 31, 2019 include $1.0 billion of net cash proceeds received for the sale of the Embraco compressor business;

$1.0 billion of these proceeds were used to repay an outstanding term loan in August 2019.

Total Whirlpool Organic Net Sales Reconciliation:

Twelve Months Ended December 31,

2020 2019 Change

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

Embraco net sales — (635)

currency 551 —

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

Latin America Organic Net Sales Reconciliation:

Adjusted Free Cash Flow (FCF) Reconciliation:

Twelve Months Ended December 31,

2020 2019 Change

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

Embraco net sales — (635)

currency 530 —

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

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS - (CONTINUED)

The reconciliation provided below reconciles the non-GAAP financial measure ongoing EBITDA to net earnings available to Whirlpool, for the twelve months ended December 31, 2021.

Twelve Months Ended

Ongoing earnings before interest, taxes, depreciation & amortization:

December 31, 2021

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

Net earnings (loss) available to noncontrolling interests 23

Income tax expense (benefit) 518

Interest expense 175

Earnings before interest & taxes $ 2,499

Restructuring costs (a)

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

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

Product warranty and liability (income) expense (d)

Ongoing earnings before interest & taxes $ 2,379

Depreciation and amortization 494

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

The reconciliation provided below reconciles Whirlpool's Gross Debt outstanding, for the twelve months ended December 31, 2021.

Twelve Months Ended

Gross debt outstanding:

December 31, 2021

Long-term debt $ 4,929

Current maturities of long-term debt 298

Notes payable 10

Gross debt outstanding $ 5,237

The reconciliation provided below calculates Whirlpool's Gross Debt to ongoing EBITDA ratio, for the twelve months ended December 31, 2021.

Twelve Months Ended

Gross debt to ongoing EBITDA ratio:

December 31, 2021

Gross debt outstanding $ 5,237

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

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

(a) RESTRUCTURING EXPENSE - In 2019, these costs were primarily related to actions that rightsize our EMEA business and certain other unique restructuring events, including restructuring of the Naples, Italy manufacturing plant.

Cash provided by (used in) operating activities $ 2,176 $ 1,500

Capital Expenditures (525) (410)

Proceeds from sale of assets and business 302 166

Change in restricted cash 10 (10)

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

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

Cash provided by (used in) financings activities $ (1,339) $ (253)

(a) RESTRUCTURING COSTS - In 2022, and moving forward, we will only exclude restructuring actions greater than $50 million from our ongoing results.

In 2021, these costs were primarily related to actions that right-size and reduce the fixed cost structure of our EMEA business and other centralized functions.

In 2020, these costs were primarily related to actions that right-size and reduce the fixed cost structure of our global business, attributable primarily to the macroeconomic uncertainties caused by COVID-19.

This includes costs of approximately $100 million related to restructuring in the United States and approximately $188 million related to restructuring outside of the United States, including the exit of our Naples, Italy facility.

In 2021, these costs were primarily related to actions that right-size and reduce the fixed cost structure of our EMEA business and other centralized functions.

(b) IMPAIRMENT OF GOODWILL, INTANGIBLES AND OTHER ASSETS - During the second quarter of 2022, the carrying value of the EMEA reporting unit and Indesit and Hotpoint* trademarks exceeded their fair values resulting in an impairment charge of $384 million which is recorded within Impairment of goodwill and other intangibles.

Additionally, during the fourth quarter of 2022 we recognized an impairment charge of $12M related to equity method investment in Brazil which is recorded within Equity method investment income (loss), net of tax.

* 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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(b) (GAIN) LOSS ON PREVIOUSLY HELD EQUITY INTEREST - During the third quarter of 2021, our subsidiary Whirlpool of India Ltd.

acquired an additional 38% equity interest in Elica PB India Private Limited (Elica PB India) for $57 million, which resulted in a controlling equity ownership of approximately 87%.

The previously held equity interest of 49% in Elica PB India was remeasured at fair value of $74 million on the acquisition date, which resulted in a gain of $42 million.

This gain was recorded within Interest & sundry (income) expense during the third quarter.

The earnings per diluted share impact is calculated net of minority interest.

(c) (GAIN) LOSS ON SALE AND DISPOSAL OF BUSINESSES - On March 31, 2021, Galanz launched its partial tender offer for majority ownership of Whirlpool China.

Our subsidiary tendered approximately 31% of Whirlpool China's outstanding shares in the tender offer, with the remainder representing a noncontrolling interest of approximately 20% in Whirlpool China.

The transaction closed on May 6, 2021.

In connection with the closing of the transaction, we received cash proceeds of $193 million and recognized a gain on sale of $284 million.

(c) IMPACT OF M&A TRANSACTIONS - On January 16, 2023, we signed a contribution agreement to contribute our European major domestic appliance business into a newly formed entity with Arçelik.

In connection with the transaction, the Company recorded a non-cash loss on disposal of $1,521 million in the fourth-quarter of 2022.

Whirlpool’s European major domestic appliance business met the criteria for held-for-sale accounting during the fourth-quarter of 2022 and will be included in the Company’s results until closing of the transaction.

During the second quarter of 2022, we entered into an agreement to sell our Russia business.

We classified this disposal group as held for sale and recorded an impairment loss of $346 million for the write-down of the assets to their fair value.

During the third quarter of 2022, the loss from disposal was adjusted by an immaterial amount resulting in a final loss amount of $348 million for the twelve months ended December 31, 2022.

Additionally, during the fourth-quarter 2022, we incurred unique transaction related costs of $25 million related to portfolio transformation for a total of $67 million for the twelve months ended December 31, 2022.

These transaction costs are recorded in Selling, General and Administrative expenses on our Consolidated Statements of Income (Loss).

On May 17, 2021, our subsidiary entered into a share purchase agreement to sell its Turkish subsidiary to Arçelik.

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During the third quarter of 2021, amounts for working capital and other customary post-closing adjustments were finalized and an additional $13 million loss related to the sale of business was recorded.

The net impact realized for gain on sale and disposal of businesses included in the income statement for the twelve months ended December 31, 2021 is $105 million.

During the third quarter of 2019, the Company reserved approximately $7 million for an expected change in purchase price for the sale of the Embraco compressor business.

Adjustments to the final purchase price were finalized as of the third quarter 2020, with no resulting change to the final purchase price, and the reserve was released and recognized as a gain during the quarter.

(d) PRODUCT WARRANTY AND LIABILITY (INCOME) EXPENSE - In September 2015, the Company recorded a liability related to a corrective action affecting certain legacy Indesit products.

During the second and third quarters of 2019, the Company incurred additional product warranty expense related to this previously disclosed legacy Indesit dryer corrective action campaign in the UK for approximately $12 million and $14 million, respectively.

In the third quarter of 2019, the Company recorded a charge of approximately $105 million for estimated product warranty expense related to certain EMEA-produced washers for which the Company commenced a recall in January 2020.

During the fourth quarter of 2020, the Company released an accrual of approximately $30 million related to this EMEA-produced washer recall campaign.

On March 31, 2021, Galanz launched its partial tender offer for majority ownership of Whirlpool China.

The transaction closed on May 6, 2021.

In connection with the closing of the transaction, we received cash proceeds of $193 million and recognized a gain on sale of $284 million.

The net impact realized for gain on sale and disposal of Turkey and China businesses included in the income statement for the twelve months ended December 31, 2021 is $105 million.

(d) SUBSTANTIAL LIQUIDATION OF SUBSIDIARY - During the fourth quarter of 2022, the Company liquidated an offshore subsidiary and recorded a one-time charge of $84 million for a release of the other comprehensive income on hedging and cumulative translation adjustments.

(e) (GAIN) LOSS ON PREVIOUSLY HELD EQUITY INTEREST - During the third quarter of 2021, Whirlpool Corporation acquired an additional 38% equity interest in Elica PB India Private Limited (Elica PB India) for $57 million, which resulted in a controlling equity ownership of approximately 87%.

The previously held equity interest of 49% in Elica PB India was remeasured at fair value of $74 million on the acquisition date, which resulted in a gain of $42 million.

This gain was recorded within Interest & sundry (income) expense during the third quarter.

The earnings per diluted share impact is calculated net of minority interest.

(f) PRODUCT WARRANTY AND LIABILITY (INCOME) EXPENSE - During the fourth quarter of 2020, the Company released an accrual of approximately $30 million related to an EMEA-produced washer recall campaign.

During the fourth quarter of 2021, the Company further released an accrual of approximately $9 million.

These adjustments were made based on our revised expectations regarding future period cash expenditures for the campaign.

(e) CORRECTIVE ACTION RECOVERY - The Company recorded a benefit of $13 million in the third quarter of 2020 and $1 million in the fourth quarter of 2020 related to a vendor recovery in our ongoing EMEA-produced washer corrective action.

(f) SALE-LEASEBACK, REAL ESTATE AND RECEIVABLE ADJUSTMENTS - In the fourth quarter of 2019, the Company sold certain owned properties, primarily warehouses, while agreeing to lease these same properties from the purchaser.

As part of the sale, the Company recognized a pre-tax gain on sale of the group of properties of approximately $111 million and a cash benefit of approximately $140 million.

In addition, the Company wrote off the full loan receivable amount outstanding of approximately $18 million related to a previous loan between the Company and a not-for-profit entity in connection with a community and economic development project.

The Company also wrote-down the book value of certain real estate properties, recognizing a loss of approximately $7 million.

In the fourth quarter of 2020, the Company sold and leased back a group of properties for net proceeds of approximately $139 million.

The transaction met the requirements for sale leaseback

(g) CORRECTIVE ACTION RECOVERY - The Company recorded a benefit of $13 million in the third quarter of 2020 and $1 million in the fourth quarter of 2020 related to a vendor recovery in our EMEA-produced washer corrective action.

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RESULTS OF OPERATIONS - (CONTINUED)

(h) SALE-LEASEBACK, REAL ESTATE AND RECEIVABLE ADJUSTMENTS - In the fourth quarter of 2020, the Company sold and leased back a group of properties for net proceeds of approximately $139 million.

The transaction met the requirements for sale leaseback accounting.

In the fourth quarter of 2020, the Company recorded the sale of the properties, which resulted in a pre-tax gain of approximately $113 million.

(g) TRADE CUSTOMER INSOLVENCY CLAIM SETTLEMENT - In January 2020, the Company entered into an agreement with the insolvency trustee for Alno AG, a former trade customer of a Company subsidiary in which the Company subsidiary held a minority equity interest, to settle all potential claims that the insolvency trustee may have against the Company subsidiary related to the Alno insolvency, resulting in a one-time charge of €52.75 million ($59 million as of December 31, 2019).

(h) BRAZIL INDIRECT TAX CREDIT - During the first half of 2019, the Company received favorable, non-appealable decisions related to the recovery of certain taxes previously paid over gross sales.

As a result, the Company recorded a gain in interest and sundry (income) expense during the first and second quarter of 2019 in the amount of $127 million and $53 million, respectively, in connection with these decisions.

(i) NORMALIZED TAX RATE ADJUSTMENT - For 2020 and 2021, the full-year effective tax rates were 26.3% and 23.5%, respectively.

(i) NORMALIZED TAX RATE ADJUSTMENT - During the full-year of 2021, the Company calculated ongoing earnings per share using an adjusted tax rate of 23.5%.

During the full-year of 2022, the Company calculated ongoing earnings per share using an adjusted tax rate of 4.4%, which excludes the impacts of the non-tax deductible loss on sale of the Russia business of $348 million and impairment of goodwill of $278 million recorded in the second quarter of 2022, along with the impact of M&A transactions of approximately $1.5 billion recorded in the fourth quarter of 2022.

(j) NORMALIZED SHARE COUNT ADJUSTMENT - As a result of our current period GAAP earnings loss, the impact of antidilutive shares was excluded from the loss per share calculation on a GAAP basis.

The share count adjustment used in the calculation of the full-year ongoing earnings per diluted share includes basic shares outstanding of 55.9 million plus the impact of antidilutive shares of 0.6 million which were excluded on a GAAP basis.

FINANCIAL CONDITION AND LIQUIDITY

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We also have $248 million of term debt maturing in the next twelve months, and are currently evaluating our options in connection with this maturing debt, which may include repayment through refinancing, free cash flow generation or cash on hand.

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.

The Company had cash and cash equivalents of approximately $2.0 billion at December 31, 2022, of which 64% was held by subsidiaries in foreign countries.

For each of its foreign subsidiaries, the Company makes an assertion regarding the amount of earnings intended for permanent reinvestment, with the balance available to be repatriated to the United States.

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It is not practical to estimate the amount of the deferred tax liability associated with the repatriation of cash due to the complexity of its hypothetical calculation.

At December 31, 2021, we had cash or cash equivalents greater than 1% of our consolidated assets in the United States, Switzerland, Brazil and India, which represented 7.3%, 1.8%, 1.4%, and 1.0%, respectively.

In addition, we had third-party accounts receivable outside of the United States greater than 1% of our consolidated assets in Brazil and Italy, which represented 1.4% and 1.3%, respectively.

At December 31, 2022, we had cash or cash equivalents greater than 1% of our consolidated assets in the United States, Brazil, Mexico, Switzerland and India which represented 4.1%, 1.7%, 1.3%, 1.3% and 1.2%, respectively.

In addition, we had third-party accounts receivable outside of the United States greater than 1% of our consolidated assets in Brazil, which represented 1.3%.

We continue to monitor general financial instability and uncertainty globally.

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We met our cash needs during 2022 through cash flows from operations, cash and cash equivalents, and financing arrangements.

Our cash, cash equivalents and restricted cash at December 31, 2021 increased $110 million compa red to the same period in 2020.

Our cash, cash equivalents and restricted cash at December 31, 2022 decreased $1,086 million compared to the same period in 2021.

The following table summarizes the net increase (decrease) in cash, cash equivalents and restricted cash for the periods presented.

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Effect of exchange rate changes (20) (67) (28)

decrease in cash classified as held for sale (94) — —

Net increase in cash, cash equivalents and restricted cash $ (1,086) $ 110 $ 982

Cash Flows from Operating Activities

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

The increase was primarily driven by stro ng cash earnings and improvements in working capital.

The improvement in working capital was driven by increased accounts payable due to raw material inflation, partially offset by increased inventory due to higher input costs and a modest inventory build.

Cash provided by operating activities in 2022 decreased compared to 2021.

The decrease was primarily driven by reduced cash earnings partially offset by the favorable cash impact of improved working capital and hedge settlements in the current period.

Cash provided by operating activities in 2021 increased compared to 2020.

The increase was primarily driven by strong cash earnings partially offset by working capital initiatives.

Working capital was impacted by our ongoing accounts receivable and credit management actions, along with inventory management.

Additionally, working capital was impacted by increased accounts payable driven by higher year end production levels, partially offset by the timing of our year end payment schedule.

The timing of cash flows from operations varies significantly throughout the year primarily due to changes in production levels, sales patterns, promotional programs, funding requirements, credit

The timing of cash flows from operations varies significantly throughout the year primarily due to changes in production levels, sales patterns, promotional programs, funding requirements, credit management, as well as receivable and payment terms.

Depending on the timing of cash flows, the

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS - (CONTINUED)

management, as well as receivable and payment terms.

Depending on the timing of cash flows, the location of cash balances, as well as the liquidity requirements of each country, external sources of funding are used to support working capital requirements.

location of cash balances, as well as the liquidity requirements of each country, external sources of funding are used to support working capital requirements.

Cash Flows from Investing Activities

The increase in cash used in investing activities during 2021 primarily reflects the cash impacts from the divestiture of Whirlpool China (approximately $341 million) and our Turkey manufacturing subsidiary (approximately $52 million) as well as an increase in capital expenditures (approximately $115 million).

The increase in cash provided by investing activities during 2020 primarily reflects the 2019 proceeds from the sale of the Embraco compressor business (approximately $1 billion), partially offset by a decrease in capital expenditures (approximately $122 million) and the proceeds from a real estate sale-leaseback transaction (approximately $139 million).

The increase in cash provided by investing activities during 2019 primarily reflects proceeds from the sale of the Embraco compressor business (approximately $1 billion) along with proceeds from a real estate sale-leaseback transaction (approximately $140 million) and a decrease in capital expenditures (approximately $60 million).

The increase in cash used in investing activities during 2022 primarily reflects the $3 billion cash outflow for the purchase of InSinkErator business.

The increase in cash provided by investing activities during 2021 primarily reflects the cash impacts from the divestiture of Whirlpool China (approximately $341 million) and our Turkey manufacturing subsidiary (approximately $52 million) as well as an increase in capital expenditures (approximately $115 million).

Cash Flows from Financing Activities

The increase in cash provided by financing activities during 2022 primarily reflects the proceeds ($2.5 billion) from borrowings of long-term debt related to InSinkErator acquisition.

The increase in cash used in financing activities during 2021 primarily reflects lower debt issuance proceeds (approximately $733 million) along with higher share repurchases (approximately $920 million) partially offset by lower repayments of long-term debt (increase of approximately $273 million) net effect of reduced short-term debt (increase of approximately $330 million).

The decrease in cash used in financing activities during 2020 primarily reflects higher debt issuance proceeds (increase of approximately $300 million), lower repayments of long-term debt (increase of approximately $400 million) net effect of reduced short-term debt (increase of approximately $400 million).

Short-term debt reflects the activity on the $1 billion term loan that was borrowed in 2018 and repaid in 2019, offset by the reduced need to fund working capital through short term debt.

The increase in cash used in financing activities during 2019 primarily reflects higher repayments of long-term debt (increase of approximately $550 million), net effect of changes in short-term debt (increase of approximately $1.4 billion), partially offset by lower share repurchase activity (decrease of approximately $1 billion).

Short-term debt reflects the activity on the $1 billion term loan that was borrowed in 2018 and repaid in 2019, offset by changes in commercial paper for funding normal working capital requirements.

Dividends paid in financing activities were $390 million, $338 million, and $311 million during 2022, 2021 and 2020, respectively.

Financing Arrangements

At December 31, 2021, the Company had total committed credit facilities of approximately $3.7 billion and $4.2 billion at December 31, 2021 and 2020, respectively.

The Company had total committed credit facilities of approximately $6.2 billion and $3.7 billion at December 31, 2022 and 2021, respectively.

The facilities are geographically diverse and reflect the Company's global operations.

The Company believes these facilities are sufficient to support its global operations.

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

We had $2.5 billion drawn on the committed credit facilities at December 31, 2022 which were used to fund the InSinkErator acquisition in the fourth quarter of 2022.

We had no borrowings outstanding under the committed credit facilities at December 31, 2021.

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

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

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Other material obligations include off-balance sheet arrangements arising in the normal course of business.

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See Notes 1, 3, 7-10 and 15 to the Consolidated Financial Statements for additional information.

In April 2021, our Board of Directors approved a 12.0% increase in our quarterly dividend on our common stock to $1.40 per share from $1.25 per share, representing the 9th consecutive year of increased dividends.

In February 2022, our Board of Directors approved a 25.0% increase in our quarterly dividend on our common stock to $1.75 per share from $1.40 per share representing the 10th consecutive year of increased dividends.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

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CRITICAL ACCOUNTING POLICIES AND ESTIMATES

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Actual results may differ materially from these estimates under different assumptions or conditions.

The management believes the accounting policies below are critical in the portrayal of our financial condition and results of operations and require management's most difficult, subjective, or complex judgments.

Management believes the accounting policies below are critical in the portrayal of our financial condition and results of operations and require management's most difficult, subjective, or complex judgments.

Pension and Other Postretirement Benefits

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Those key assumptions include the discount rate, expected long-term rate of return on plan assets, life expectancy, and health care cost trend rates.

These assumptions are subject to change based on interest rates on high quality bonds, stock and bond markets and medical cost inflation, respectively.

These assumptions are subject to change based on interest rates on high quality bonds and stock, and medical cost inflation.

Actual results that differ from our assumptions are accumulated and amortized over future periods and therefore, generally affect our recognized expense and accrued liability in such future periods.

While we believe that our assumptions are appropriate given current economic conditions and actual experience, significant differences in results or significant changes in our assumptions may materially affect our pension and other postretirement benefit obligations and related future expense.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

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Our pension and other postretirement benefit obligations at December 31, 2022 and preliminary retirement benefit costs for 2023 were prepared using the assumptions that were determined as of December 31, 2022.

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Millions of dollars Percentage

Change 2022 Expense PBO/APBO (1)

Change 2023 Expense

United States Pension Plans

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For additional information about our pension and other postretirement benefit obligations, see Note 9 to the Consolidated Financial Statements.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

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We estimate our income taxes in each of the taxing jurisdictions in which we operate.

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Future changes in the effective tax rate will be subject to several factors, including business profitability, tax planning strategies, and enacted tax laws.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

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We have various tax filings with applicable jurisdictions to defend our positions with regards to the timing and amount of deductions and credits as well as the allocation of income across various jurisdictions.

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For additional information about warranty obligations, see Note 8 to the Consolidated Financial Statements.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

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Goodwill and Indefinite-Lived Intangibles

Certain business acquisitions have resulted in the recording of goodwill and trademark assets which are not amortized.

At December 31, 2021 and 2020, we had goodwill of approximate ly $2.5 billion and $2.5 billion, respectively.

We have trademark assets with a carrying value of approximately $1.9 billion at December 31, 2021 and 2020.

We perform our annual impairment assessment for goodwill and other indefinite-lived intangible assets as of October 1st or more frequently if events or changes in circumstances indicate that the asset might be impaired.

At December 31, 2022 and 2021, we had goodwill of approximately $3.3 billion and $2.5 billion, respectively.

The increase in goodwill in 2022 was driven by the InSinkErator acquisition in the fourth quarter of 2022, partially offset by full impairment of EMEA goodwill in the second quarter of 2022.

We have trademark assets with a carrying value of approximately $3.0 billion and $1.9 billion at December 31, 2022 and 2021, respectively.

The trademark assets increase in 2022 was driven by the InSinkErator acquisition, partially offset by EMEA trademarks that were partially impaired in the second quarter of 2022 and subsequently classified as held for sale in the fourth quarter of 2022.

The InSinkErator acquisition has been accounted for as a business combination under the acquisition method of accounting.

On the acquisition date, we recognized the separately identifiable intangible assets based on the preliminary purchase price allocation.

The excess of the consideration transferred over the fair values assigned to the net identifiable assets and liabilities of the acquired business was recognized as goodwill.

For additional information, see Notes 11 and 17 to the Consolidated Financial Statements.

We perform our annual impairment assessment for goodwill and other indefinite-lived intangible assets as of October 1 or more frequently if events or changes in circumstances indicate that the asset might be impaired.

We consider qualitative factors to assess if it is more likely than not that the fair value for goodwill or indefinite-lived intangible assets is below the carrying amount.

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Significant judgment is used to evaluate the totality of these events and factors to make the determination of whether it is more likely than not that the fair value of the reporting unit or indefinite-lived intangible is less than its carrying value.

For our annual impairment assessment as of October 1, 2021, the Company elected to bypass the qualitative assessment and perform a quantitative assessment to evaluate goodwill and certain brand trademarks.

For our annual impairment assessment as of October 1, 2022, the Company performed a qualitative impairment assessment for goodwill and elected to bypass the qualitative assessment and perform a quantitative assessment to evaluate certain brand trademarks.

The Company elected to perform a qualitative assessment on the other indefinite-lived intangible assets noting no events that indicated that the fair value was less than the carrying value that would require a quantitative impairment assessment.

Goodwill Valuations

In 2022, we evaluated goodwill using a qualitative assessment to determine whether it is more likely than not that the fair value of any reporting unit is less than its carrying amount.

If we determine that the fair value of the reporting unit may be less than its carrying amount, a goodwill impairment test is performed to identify potential impairment.

The goodwill impairment test compares a reporting unit’s fair value to its carrying amount.

If the carrying amount of a reporting unit exceeds the reporting unit’s fair value, then a goodwill impairment loss is measured at the amount by which a reporting unit’s carrying amount exceeds its fair value, not to exceed the carrying amount of goodwill.

Otherwise, we conclude that no impairment is indicated and and no further testing is required.

If the fair value of the reporting unit exceeds its carrying amount, no impairment loss is measured.

In conducting a qualitative assessment, the Company analyzes a variety of events or factors that may influence the fair value of the reporting unit, including, but not limited to:

the results of prior quantitative tests performed;

changes in the carrying amount of the reporting unit;

actual and projected operating results;

relevant market data for both the company and its peer companies;

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Goodwill Valuations

In performing a quantitative assessment, we estimate each reporting unit's fair value primarily by using the income approach.

The income approach uses each reporting unit's projection of estimated operating results and cash flows that are discounted using a market participant discount rate based on a weighted-average cost of capital.

The financial projections reflect management's best estimate of economic and market conditions over the five-year projected period including forecasted revenue growth, EBIT margin, tax rate, capital expenditures, depreciation and amortization and changes in working capital requirements.

Other assumptions include discount rate and terminal growth rate.

For one of our reporting units we use a blended approach that includes a market capitalization methodology given publicly available information and a discounted cash flow approach.

The estimated fair value of each reporting unit is compared to their respective carrying values.

Additionally we validate our estimates of fair value under the income approach by comparing the values to fair value estimates using a market approach.

A market approach estimates fair value by applying cash flow multiples to the operating performance of each reporting unit.

The multiples are derived from comparable publicly traded companies with operating and investment characteristics similar to the reporting units.

We also corroborate the fair value through a market capitalization reconciliation to determine whether the implied control premium is reasonable based on recent market transactions and other qualitative considerations.

Based on the results of our annual quantitative assessment performed as of October 1, 2021, the fair values of our North America, Asia, EMEA and Latin America reporting units exceeded their respective carrying values by 306%, 258%, 29% and 20%, respectively.

If actual results are not consistent with management's estimates and assumptions, a material impairment charge of goodwill could occur, which would have a material adverse effect on our consolidated financial statements.

industry outlooks;

macroeconomic conditions;

changes in key personnel;

and the Company's competitive position.

Indefinite-Lived Intangible Valuations

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If the estimated fair value of the indefinite-lived intangible asset is less than its carrying value, we would recognize an impairment loss.

The fair value of the Maytag trademark exceeded its carrying value of $1,021 million by approximately 11%.

We expect future fiscal year revenue for this brand to improve as we recover from temporary volume loss from supply chain disruptions and continue to execute our brand leadership strategy and benefit from our new product investments.

The fair values of all other trademarks exceeded their carrying values by an amount sufficient to not be deemed "at risk".

The estimates of future cash flows used in determining the fair value of intangible assets involve significant management judgment and are based upon assumptions about expected future operating performance, economic conditions, market conditions and cost of capital.

Inherent in estimating the future cash flows are uncertainties beyond our control, such as changes in capital markets.

The actual cash flows could differ materially from management's estimates due to changes in business conditions, operating performance and economic conditions.

In performing the quantitative assessment on these assets, significant assumptions used in our relief-from-royalty model included revenue growth rates, assumed royalty rates and the discount rate, which are discussed further below.

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Adverse changes in the operating environment or our inability to grow revenues at the forecasted rates may result in a material impairment charge.

We performed a sensitivity analysis on our estimated fair values noting a 10% reduction of forecasted revenues in the Maytag trademark would reduce the fair value of the trademark to its carrying value.

In determining royalty rates for the valuation of our trademarks, we considered factors that affect the assumed royalty rates that would hypothetically be paid by a market participant for the use of

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

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In determining royalty rates for the valuation of our trademarks, we considered factors that affect the assumed royalty rates that would hypothetically be paid by a market participant for the use of trademarks.

The most significant factors in determining the assumed royalty rates include the overall role and importance of the trademarks in the particular industry, the profitability of the products utilizing the trademarks, and the position of the trademarked products in the given product category.

Based on this analysis, we determined a royalty rate of 4% for the Maytag trademark.

We performed a sensitivity analysis on our estimated fair value of Maytag , noting a 50 basis point reduction of the royalty rate would result in an impairment charge of approximately $24 million.

In developing discount rates for the valuation of our trademarks, we used a market participant discount rate based on a weighted-average cost of capital, adjusted for higher relative level of risks associated with doing business in other countries, as applicable, as well as the higher relative levels of risks associated with intangible assets.

Based on this analysis, we determined the discount rate to be 10.25% for Maytag .

We performed a sensitivity analysis on our estimated fair value for Maytag noting a 100 basis point increase in the discount rate would result in an impairment charge of approximately $8 million.

Based on our quantitative impairment assessment as of October 1, 2020, the carrying value of the Hotpoint* trademark exceeded its fair value by €6 million, approximately $7 million USD, and we recorded an intangible impairment charge in this amount during the fourth quarter of 2020.

There were no other impairments of indefinite-lived intangible assets in 2020 or 2021.

If actual results are not consistent with management's estimate and assumptions, a material impairment charge of our trademarks could occur, which could have a material adverse effect on our consolidated financial statements.

Maytag trademark

Our Maytag trademark is at risk at December 31, 2022.

The fair value of the Maytag trademark exceeded its carrying value of $1,021 million by approximately 6%.

We expect future fiscal year revenues for this brand to improve as we recover from temporary volume loss and continue to execute our brand leadership strategy and benefit from our new product investments.

A 10% reduction of forecasted Maytag revenues would result in an impairment charge of approximately $49 million.

We determined a royalty rate of 4% for the Maytag trademark, noting that a 50 basis point reduction of the royalty rate would result in an impairment charge of approximately $75 million.

We determined a discount rate of 10.25% for Maytag, noting that a 50 basis point increase in the discount rate would result in an impairment charge of approximately $9 million.

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JennAir trademark

Our JennAir trademark is at risk at December 31, 2022.

The fair value of the JennAir trademark exceeded its carrying value of $304 million by approximately 8%.

A 10% reduction of forecasted JennAir revenues would result in an impairment charge of approximately $9 million.

We determined a royalty rate of 6% for JennAir , noting that a 50 basis point reduction of the royalty rate would result in an impairment charge of approximately $3 million.

We determined a discount rate of 11.25% for JennAir , noting that a 50 basis point increase in the discount rate would reduce the fair value of the trademark to breakeven with its carrying value.

Other indefinite-lived intangible assets

Based on our quantitative impairment assessment as of May 31, 2022, the carrying values of the Hotpoint* and Indesit trademarks exceeded their fair values by $36 million and $70 million, respectively, and we recorded intangible impairment charges for these amounts during the second quarter of 2022.

The remaining carrying values of the Hotpoint* and Indesit trademarks were included in the European major domestic appliance disposal group which was classified as held for sale in the fourth quarter of 2022.

The fair values of all other trademarks exceeded their carrying values by an amount sufficient to not be deemed "at risk".

There were no other impairments of indefinite-lived intangible assets in 2022 or 2021.

For additional information about goodwill and indefinite-life intangible valuations, see Note 6 and Note 11 to the Consolidated Financial Statements.

The estimates of future cash flows used in determining the fair value of goodwill and intangible assets involve significant management judgment and are based upon assumptions about expected future operating performance, economic conditions, market conditions and cost of capital.

Inherent in estimating the future cash flows are uncertainties beyond our control, such as changes in capital markets.

The actual cash flows could differ materially from management's estimates due to changes in business conditions, operating performance and economic conditions.

ISSUED BUT NOT YET EFFECTIVE ACCOUNTING PRONOUNCEMENTS

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In March 2019, the order covering certain large residential washers from Mexico was extended for an additional five years, while the order covering certain large residential washers from South Korea was revoked.

The order covering certain large residential washers from China is currently subject to administrative review to determine whether the order should be extended.

In August 2022, the order covering certain large residential washers from China was extended for an additional five years.

The order is subject to administrative reviews, possible appeals, and other potential modifications.

* 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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A safeguard remedy went into effect in February 2018, implementing tariffs on finished large residential washers and certain covered parts for three years.

In January 2021, the remedy was extended for two years until February 2023.

During the fourth year of the remedy, beginning February 7, 2021, the remedy imposes a 15% tariff on the first 1.2 million large residential washers imported into the United States (under tariff) and a 35% tariff on such imports in excess of 1.2 million, and also imposes a 35% tariff on washer tub, drum, and cabinet imports in excess of 110,000.

Consistent with modifications to the order approved in 2020, the 1.2 million under tariff is allocated by quarter (300,000 large residential washers per quarter).

We cannot speculate on the modification's impact in future quarters, which will depend on Samsung and LG's U.S.

production capabilities and import plans.

These orders are subject to administrative reviews and possible appeals.

The remedy expired in accordance with its terms and as scheduled in February 2023.

Raw Materials and Global Economy

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tariffs and other global macroeconomic factors.

Due to many factors beyond our control, we expect to continue to be impacted by the following factors:

global shortage of certain components, other supply chain constraints and cost inflation, all of which we expect to continue in 2022.

Due to many factors beyond our control, including the conflict in Ukraine and related sanctions, COVID-related shutdowns and government actions in China, we expect to continue to be impacted by the following factors:

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 are expected to continue throughout the first half of 2023.

This could require us to modify our current business practices, and could have a material adverse effect on our financial statements in any particular reporting period.

In addition, we are pursuing a business interruption insurance claim related to the 2021 Texas freeze, amounts related to which could be a material gain in a future period.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS - (CONTINUED)

FORWARD-LOOKING STATEMENTS

The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements made by us or on our behalf.

Certain statements contained in this annual report, including those within the forward-looking perspective section within the Management's Discussion and Analysis section, and other written and oral statements made from time to time by us or on our behalf do not relate strictly to historical or current facts and may contain forward-looking statements that reflect our current views with respect to future events and financial performance.

Certain statements contained in this quarterly report, including those within the forward-looking perspective section within the Management's Discussion and Analysis section, and other written and oral statements made from time to time by us or on our behalf do not relate strictly to historical or current facts and may contain forward-looking statements that reflect our current views with respect to future events and financial performance.

As such, they are considered "forward-looking statements" which provide current expectations or forecasts of future events.

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Whirlpool disclaims any obligation to update these statements.

Forward-looking statements in this document may include, but are not limited to, statements regarding future financial results, long-term value creation goals, restructuring expectations, productivity, raw material prices and related costs, supply chain, transaction-related closing and synergies expectations, asset impairment, litigation, ESG efforts, and the impact of COVID-19 and the Russia/Ukraine conflict on our operations.

Many risks, contingencies and uncertainties could cause actual results to differ materially from Whirlpool's forward-looking statements.

Among these factors are:

(1) COVID-19 pandemic-related business disruptions and economic uncertainty;

(1) intense competition in the home appliance industry reflecting the impact of both new and established global competitors, including Asian and European manufacturers, and the impact of the changing retail environment, including direct-to-consumer sales;

(3) Whirlpool's ability to maintain or increase sales to significant trade customers and the ability of these trade customers to maintain or increase market share;

(2) Whirlpool's ability to maintain or increase sales to significant trade customers;

(3) Whirlpool's ability to maintain its reputation and brand image;

(4) the ability of Whirlpool to achieve its business objectives and leverage its global operating platform, and accelerate the rate of innovation;

(6) Whirlpool’s ability to understand consumer preferences and successfully develop new

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS - (CONTINUED)

(5) Whirlpool’s ability to understand consumer preferences and successfully develop new products;

(6) Whirlpool's ability to obtain and protect intellectual property rights;

(8) acquisition and investment-related risks, including risks associated with our past acquisitions;

(7) acquisition, divestiture, and investment-related risks, including risks associated with our past acquisitions;

(8) the ability of suppliers of critical parts, components and manufacturing equipment to deliver sufficient quantities to Whirlpool in a timely and cost-effective manner;

(9) COVID-19 pandemic-related business disruptions and economic uncertainty;

(10) Whirlpool's ability to navigate risks associated with our presence in emerging markets;

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(14) product liability and product recall costs;

(14) the ability of suppliers of critical parts, components and manufacturing equipment to deliver sufficient quantities to Whirlpool in a timely and cost-effective manner;

(15) our ability to attract, develop and retain executives and other qualified employees;

(16) the impact of labor relations;

(17) fluctuations in the cost of key materials (including steel, resins, copper and aluminum) and components and the ability of Whirlpool to offset cost increases;

(17) fluctuations in the cost of key materials (including steel, resins, base metals) and components and the ability of Whirlpool to offset cost increases;

(18) Whirlpool's ability to manage foreign currency fluctuations;

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(24) the effects and costs of governmental investigations or related actions by third parties;

(25) changes in the legal and regulatory environment including environmental, health and safety regulations, and taxes and tariffs;

(25) changes in the legal and regulatory environment including environmental, health and safety regulations, data privacy, and taxes and tariffs;

(26) Whirlpool's ability to respond to the impact of climate change and climate change regulation;

and (27) the uncertain global economy and changes in economic conditions which affect demand for our products.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS - (CONTINUED)

We undertake no obligation to update any forward-looking statement, and investors are advised to review disclosures in our filings with the SEC.

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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 7. Management’s Discussion and Analysis