What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2023-02-10 compared with 2022-02-10 · 546 added, 368 removed, 1423 unchanged (39% of the section changed)

10 unchanged sentences

4 Cash, Cash Equivalents and Restricted Cash

5 Inventories

6 Goodwill and Other Intangibles

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14 Restructuring Charges

15 Income Taxes

16 Segment Information

17 Acquisitions and Divestitures

Report of independent Registered Public Accounting Firm (PCAOB ID:

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(Gain) loss on sale and disposal of businesses 1,869 ( 105 ) ( 7 )

Operating profit 2,348 1,615 1,549

Operating profit (loss) ( 1,056 ) 2,348 1,615

Other (income) expense

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Interest expense 190 175 189

Earnings before income taxes 2,332 1,447 1,530

Earnings (loss) before income taxes ( 1,227 ) 2,332 1,447

Income tax expense (benefit) 265 518 382

Equity method investment income (loss), net of tax ( 19 ) ( 8 ) —

Net earnings 1,806 1,065 1,182

Net earnings (loss) ( 1,511 ) 1,806 1,065

Net earnings (loss) available to noncontrolling interests 8 23 ( 10 )

Net earnings available to Whirlpool $ 1,783 $ 1,075 $ 1,168

Net earnings (loss) available to Whirlpool $ ( 1,519 ) $ 1,783 $ 1,075

Per share of common stock

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Prepaid and other current assets 653 834

Assets held for sale 139 —

Total current assets 6,394 9,695

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Other current liabilities 550 750

Liabilities held for sale 490 —

Total current liabilities 5,931 8,510

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Operating activities

Net earnings $ 1,806 $ 1,065 $ 1,182

Net earnings (loss) $ ( 1,511 ) $ 1,806 $ 1,065

Adjustments to reconcile net earnings to cash provided by (used in) operating activities:

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Cash held by divested businesses ( 75 ) ( 393 ) —

Other 2 7 ( 6 )

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

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Effect of exchange rate changes on cash, cash equivalents and restricted cash ( 20 ) ( 67 ) ( 28 )

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

Increase (decrease) in cash, cash equivalents and restricted cash ( 1,086 ) 110 982

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

Adjustment to beginning retained earnings $ 61 $ 61

Stock issued (repurchased) 28 — — 27 1 —

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

Acquisitions and Divestitures ( 764 ) — — — — ( 764 )

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

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General Information

Whirlpool Corporation, a Delaware corporation, manufactures products in 10 countries and markets products in nearly every country around the world under brand names such as Whirlpool , KitchenAid , Maytag , Consul , Brastemp , Amana , Bauknecht , JennAir, Indesit, Yummly and Hotpoint *.

We conduct our business through four operating segments, which we define based on geography.

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Latin America and Asia.

On January 16, 2023, Whirlpool entered into a contribution agreement with Arçelik A.Ş (“Arcelik”) in alignment with Whirlpool’s portfolio transformation.

Under the terms of the agreement, Whirlpool will contribute its European major domestic appliance business, and Arcelik will contribute its major domestic appliance, consumer electronics, air conditioning, and small domestic appliance businesses into the newly formed entity of which Whirlpool will own 25 % and Arcelik 75 %, subject to an adjustment mechanism based on certain financial matters.

Separately, Whirlpool agreed in principle to the sale of Whirlpool’s Middle East and Africa business to Arcelik.

These transactions are collectively referred to as the European major domestic appliance business which was classified as held for sale in the fourth quarter of 2022.

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

The transaction is expected to close in the second half of 2023 and includes Whirlpool’s nine production sites located in Italy, Poland, Slovakia, and the UK, as well as Arçelik’s two production facilities in Romania.

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

Principles of Consolidation

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Risks and Uncertainties

D uring the first quarter of 2022, Russia commenced a military invasion of Ukraine, and the ensuing conflict has created disruption in the EMEA region and around the world.

While we continued experiencing some of this disruption during the quarter, the duration and severity of the effects on our business and the global economy are inherently unpredictable.

We continue to closely monitor the ongoing conflict which could materially impact our financial results in the future.

We have some sales and distribution operations in Ukraine, however, the revenues and net assets are not material to our EMEA operating segment and consolidated results.

On June 27, 2022, our subsidiary Whirlpool EMEA SpA entered into a share purchase agreement with Arçelik A.Ş.

(“Arcelik”) to sell our Russian business to Arcelik for contingent consideration.

The sale of the Russian business was completed on August 31, 2022.

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

Furthermore, COVID-19 and subsequent macroeconomic volatility, including supply chain disruptions, continue to impact countries across the world, and the duration and severity of the effects are currently unknown.

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

* 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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The Consolidated Financial Statements presented herein reflect estimates and assumptions made by management at December 31, 2022 and for the twelve months ended December 31, 2022.

Such estimates and assumptions affect, among other things, the Company’s goodwill, long-lived asset and indefinite-lived intangible asset valuation;

These estimates and assumptions affect, among other things, the Company’s goodwill, long-lived asset and indefinite-lived intangible asset valuation;

inventory valuation;

assessment of the annual effective tax rate;

valuation of deferred income taxes and income tax contingencies;

and the allowance for expected credit losses and bad debt.

Events and changes in circumstances arising after February 10, 2022, including those resulting from the impacts of COVID-19 pandemic or other macroeconomic factors, will be reflected in management’s estimates for future periods.

Events and changes in circumstances arising after February 10, 2023, including those resulting from the impacts of COVID-19 as well as the ongoing conflict in Ukraine or other macroeconomic factors, will be reflected in management’s estimates for future periods.

Goodwill and indefinite-lived intangible assets

We continue to monitor the significant global economic uncertainty to assess the outlook for demand for our products and the impact on our business and our overall financial performance.

The Maytag trademark continues to be at risk at December 31, 2021.

Our Maytag and JennAir trademarks are at risk at December 31, 2022.

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

The potential impact of demand disruptions, production impacts or supply constraints along with a number of other factors could negatively effect revenues for the Maytag trademark, but we remain committed to the strategic actions necessary to realize the long-term forecasted profitability and recover from the supply constraints.

A lack of recovery or further deterioration in market conditions, a sustained trend of weaker than expected financial performance in our Maytag trademark, among other factors, as a result of the COVID-19 pandemic, other macroeconomic factors or other unforeseen events could result in an impairment charge in future periods which could have a material adverse effect on our financial statements.

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

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The potential impact of demand disruptions, production impacts or supply constraints along with a number of other factors could negatively effect revenues for the Maytag and JennAir trademarks, but we remain committed to the strategic actions necessary to realize the long-term forecasted revenues and profitability of these trademarks.

A lack of recovery or further deterioration in market conditions, a sustained trend of weaker than expected financial performance for our Maytag and JennAir trademarks, among other factors, as a result of the COVID-19 pandemic, other macroeconomic factors or other unforeseen events could result in an impairment charge in future periods which could have a material adverse effect on our financial statements.

GAAP, the Company calculates its quarterly tax provision based on an estimated effective tax rate for the year and then adjusts this amount by certain discrete items each quarter.

Potential changing and volatile macro-economic conditions could cause fluctuations in forecasted earnings before income taxes.

As such, the Company's effective tax rate could be subject to volatility as forecasted earnings before income taxes are impacted by events which cannot be predicted.

In addition, potential future economic deterioration brought on by the pandemic, ongoing conflict in Ukraine, and related sanctions or other factors, such as potential sales of businesses and changes in tax rates may negatively impact the realizability and/or valuation of certain deferred tax assets.

Use of Estimates

We are required to make estimates and assumptions that affect the amounts reported in the Consolidated Financial Statements and accompanying Notes.

The most significant assumptions are estimates in determining the fair value of goodwill and indefinite-lived intangible assets, legal contingencies, income taxes and pension and other postretirement benefits.

The most significant assumptions are estimates in determining the fair value of goodwill and indefinite-lived intangible assets, assets held for sale, legal contingencies, income taxes and pension and other postretirement benefits.

Actual results could differ materially from those estimates.

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See Note 2 to the Consolidated Financial Statements for additional information.

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Sales Incentives

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We take into account a combination of specific customer circumstances, credit conditions, market conditions, reasonable and supportable forecasts of future economic conditions and the history of write-offs and collections in developing the reserve.

The adoption of the new credit loss standard did not have a material impact on the Consolidated Financial Statements.

We evaluate items on an individual basis when determining accounts receivable write-offs.

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Certain arrangements include servicing of transferred receivables by Whirlpool.

Under these arrangements the Company received cash proceeds of $ 594 million during the twelve months ended December 31, 2020.

The amount of cash proceeds received were immaterial for the twelve months ended December 31, 2021.

Outstanding accounts receivable transferred under arrangements where the Company continues to service the transferred asset were $ 30 million as of December 31, 2020.

These amounts were not material as of December 31, 2021.

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The amount of cash proceeds received under these arrangements was $ 80 million for the twelve months ended December 31, 2022.

The amount of cash proceeds received was immaterial for the twelve months ended December 31, 2021.

Outstanding accounts receivable transferred under arrangements where the Company continues to service the transferred asset was $ 80 million as of December 31, 2022.

These amounts were not material as of December 31, 2021, respectively.

Freight and Warehousing Costs

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

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Fair Value Measurements

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Property is stated at cost, net of accumulated depreciation.

For production machinery and equipment, we record depreciation based on units produced, unless units produced drop below a minimum threshold at which point depreciation is recorded using the straight-line method, excluding property acquired from the Hefei Sanyo (subsequently "Whirlpool China") acquisition and certain property acquired from the Indesit acquisition in 2014.

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

Property, plant and equipment and related accumulated depreciation of divested businesses have been removed in 2021.

For certain acquired production assets, we depreciate costs based on the straight-line method.

Property, plant and equipment with a net book value of $ 822 million associated with our European major domestic appliance business has been classified as assets held for sale in the fourth quarter of 2022.

Property, plant and equipment with a net book value of $ 141 million associated with our Russian business has been removed as part of the deconsolidation of the Russian operations in the third quarter of 2022.

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

Property, plant and equipment and related accumulated depreciation of all divested businesses have been removed.

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

Depreciation expense for property, including accelerated depreciation classified as restructuring expense in our Consolidated Statements of Income (Loss), was $ 440 million, $ 447 million and $ 506 million in 2022, 2021 and 2020, respectively.

Depreciation of our European major domestic appliance business has been suspended from December 2022 onwards due to the disposal group being classified as held for sale and measured at fair value less cost to sell.

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Property plant and equipment, net $ 2,102 $ 2,805

$ 2,805 $ 3,199

(1) Decrease of $ 379 million in property, plant and equipment, net, is due to the deconsolidation of Whirlpool China and divestment of Turkey manufacturing entity.

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

We classify gains and losses associated with asset dispositions in the same line item as the underlying depreciation of the disposed asset in the Consolidated Statements of Income (Loss).

During the twelve months ended December 31, 2022, we disposed of buildings, machinery and equipment with a net book value of $ 25 million, compared to $ 17 million in prior year.

The net gain on the other disposals were not material in 2021 or 2020.

During the twelve months ended December 31, 2020, we also retired land and buildings related to a sale-leaseback transaction and machinery and equipment with a net book value of approximately $ 26 million that was no longer in use.

During 2020, we recognized a gain of $ 113 million in cost of products sold ($ 74 million) and selling, general and administrative ($ 39 million) primarily related to the sale-leaseback transaction in the fourth quarter of 2020.

The net gain on the disposals is $ 54 million for the twelve months ended December 31, 2022 and was primarily driven by a sale-leaseback transaction.

The net gain on the disposals was no t material for the same period of 2021.

We record impairment losses on long-lived assets, excluding goodwill and indefinite-lived intangibles, when events and circumstances indicate the assets may be impaired and the estimated undiscounted future cash flows generated by those assets are less than their carrying amounts.

There were no significant impairments recorded during 2021, 2020 and 2019.

Excluding assets held for sale, there were no significant impairments recorded during 2022, 2021 and 2020, respectively.

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

We determine if an arrangement contains a lease at contract inception and determine the lease term by assuming the exercise of those renewal options that are reasonably assured.

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Additionally, certain lease agreements include lease payment adjustments for inflation.

Sale-leaseback transactions

There were no material sale-lease back transactions in 2021.

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

The initial total annual rent for the properties is approximately $ 10 million per year over an initial 14 year lease term and is subject to annual rent increases.

Under the terms of the lease agreement, the Company is responsible for all taxes, insurance and utilities and is required to adequately maintain the properties for the lease term.

The Company has four sequential five-year renewal options.

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The transaction met the requirements for sale-leaseback accounting.

Accordingly, the Company recorded the sale of the properties, which resulted in a gain of approximately $ 113 million ($ 89 million, net of tax) recorded in cost of products sold ($ 74 million) and selling, general and administrative expense ($ 39 million) in the Consolidated Statements of Income (Loss).

The related land and buildings were removed from property, plant and equipment, net and the appropriate right-of-use asset and lease liabilities of approximately $ 128 million were recorded in the Consolidated Balance Sheets.

In the fourth quarter of 2019, the Company sold and leased back a group of non-core properties for net proceeds of approximately $ 140 million.

The initial total annual rent for the properties is approximately $ 10 million per year over an initial 12 year lease term and is subject to annual rent increases.

Under the terms of the lease agreement, the Company is responsible for all taxes, insurance and utilities and is required to adequately maintain the properties for the lease term.

The Company has five sequential five-year renewal options.

The transaction met the requirements for sale-leaseback accounting.

Accordingly, the Company recorded the sale of the properties, which resulted in a gain of approximately $ 111 million ($ 88 million, net of tax) recorded in cost of products sold ($ 95 million) and selling, general and administrative expense ($ 16 million) in the Consolidated Statements of Income (Loss).

The related land and buildings were removed from property, plant and equipment, net and the appropriate right-of-use asset and lease liabilities of approximately $ 108 million were recorded in the Consolidated Balance Sheets.

Goodwill and Other Intangibles

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macroeconomic conditions, industry and market considerations, cost factors, overall financial performance, share price and other relevant factors.

We have four reporting units for which we assess for impairment which also represent our operating segments and are defined as North America, EMEA, Latin America and Asia.

In performing a quantitative assessment of goodwill, we estimate each reporting unit's fair value using the best information available to us, including market information and discounted cash flow projections, also referred to as the income approach.

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We have four reporting units for which we assess for impairment which also represent our operating segments and are defined as North America;

Europe, Middle East and Africa;

Latin America and Asia.

The goodwill in any of our reporting units are not presently at risk for future impairment and a qualitative annual impairment assessment was performed in 2022.

We evaluate 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, including goodwill.

When the qualitative assessment is not utilized and a quantitative test is performed, we estimate each reporting unit's fair value using the best information available to us, including market information and discounted cash flow projections, also referred to as the income approach.

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

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

There was no impairment of goodwill in 2021, 2020 and 2019.

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

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

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

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.

For additional information, see Notes 6 and 11 to the Consolidated Financial Statements.

Intangible Assets

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

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There was no impairment on other intangibles in 2021.

We recorded an immaterial impairment charge on other intangibles in 2020.

There was no impairment on other intangibles in 2019.

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

For additional information, see Notes 6 and 11 to the Consolidated Financial Statements.

Supply Chain Financing Arrangements

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All outstanding balances under these programs are recorded in accounts payable on our Consolidated Balance Sheets.

At December 31, 2021 and 2020, approximately $ 1.4 billion and $ 1.2 billion, respectively, have been issued to participating financial institutions.

At December 31, 2022, approximately $ 1.1 billion have been issued to participating financial institutions of which $ 368 million of the balance issued is related to our European major domestic appliance business which has been classified as held for sale in the fourth quarter of 2022.

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

At December 31, 2021, approximately $ 1.4 billion have been issued to participating financial institutions.

A downgrade in our credit rating or changes in the financial markets could limit the financial institutions’ willingness to commit funds to, and participate in, the programs.

We do not believe such risk would have a material impact on our working capital or cash flows.

Due to the completed partial tender offer for Whirlpool China and subsequent deconsolidation of the subsidiary during the second quarter of 2021, we no longer have material supply chain financing arrangements in China.

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

Derivative Financial Instruments

We use derivative instruments designated as cash flow, fair value and net investment hedges to manage our exposure to the volatility in material costs, foreign currency and interest rates on certain debt instruments.

Changes in the fair value of derivative assets or liabilities (i.e., gains or losses) are recognized depending upon the type of hedging relationship and whether a hedge has been designated.

Changes in the fair value of derivative assets or liabilities (i.e., gains or

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losses) are recognized depending upon the type of hedging relationship and whether a hedge has been designated.

For those derivative instruments that qualify for hedge accounting, we designate the hedging instrument, based upon the exposure being hedged, as a cash flow hedge, fair value hedge, or a hedge of a net investment in a foreign operation.

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Research and development costs are charged to expense and totaled $ 465 million, $ 485 million and $ 455 million in 2022, 2021 and 2020, respectively.

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Advertising Costs

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

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Stock Based Compensation

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

Out-of-Period Adjustment

During the third quarter of 2019, we recorded a net adjustment of $ 34 million related to prior years resulting from the one time transition tax deemed repatriation on earnings of certain foreign subsidiaries that were previously tax deferred and related impacts.

This adjustment resulted in a decrease of net earnings available to Whirlpool of $ 34 million and a decrease of $ 0.53 in diluted earnings per share.

The Company determined the impact was immaterial to prior periods and is not material to the Consolidated Statements of Income (Loss) for the year ended December 31, 2019.

We include the results of operations of the businesses in which we acquire a controlling financial interest in our Consolidated Financial Statements beginning as of the acquisition date.

On the acquisition date, we recognize, separate from goodwill, the assets acquired, including separately identifiable intangible assets, and the liabilities assumed 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 is recognized as goodwill.

Transaction costs are recognized separately from the acquisition and are expensed as incurred.

We may adjust preliminary amounts recognized at the acquisition date to their subsequently determined acquisition-date fair values during the measurement period which is twelve months from acquisition date.

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

Equity Method Investments

After May 6, 2021, Whirlpool holds an equity interest of approximately 20 % in Whirlpool China, an entity which was previously controlled by the Company.

Whirlpool holds an equity interest of 20 % in Whirlpool (China) Co., Ltd.

(Whirlpool China), an entity which was previously controlled by the Company.

We account for the remaining interest under equity method accounting and Whirlpool China and its subsidiaries continue to supply the Company in the normal course of business.

Whirlpool China was also granted a license to sell Whirlpool-branded products in China.

Subsequent to the completion of the partial tender offer for Whirlpool China and deconsolidation of the entity in the second quarter of 2021, we made purchases from Whirlpool China of $ 290 million for the twelve months ended December 31, 2021.

The outstanding amount due to Whirlpool China and its subsidiaries is $ 137 million as of December 31, 2021.

The licensing revenue and outstanding

The following tables summarize balances and transactions with Whirlpool China and its subsidiaries during the periods presented.

Millions of dollars December 31, 2022 December 31, 2021

Other noncurrent assets Carrying value of equity interest $ 201 $ 206

Accounts payable Outstanding amounts due $ 75 $ 137

Twelve Months Ended December 31,

Millions of dollars 2022 2021

Purchases from Whirlpool China $ 376 $ 290

The licensing revenue and outstanding accounts receivable from Whirlpool China and its subsidiaries are not material for the periods presented.

The Company’s share of the results of equity method investments and elimination of intra-entity results are included in the Equity method investment income (loss), net of tax in the Consolidated Statements of Income (Loss) and Other noncurrent assets in the Consolidated Balance Sheet.

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accounts receivable from Whirlpool China and its subsidiaries are not material for the periods presented.

As of December 31, 2021, the carrying value of the equity interest in Whirlpool China is $ 206 million and is included in Other noncurrent assets in the Consolidated Balance Sheet.

The Company’s share of the results of equity method investments and elimination of intra-entity results are included in the Equity method investment income (loss), net of tax in the Consolidated Income Statement and Other noncurrent assets in the Consolidated Balance Sheet.

The impact of equity method investments is not ma terial for the periods presented.

The market value of our 20 % investment in Whirlpool China, based on the quoted market price, is $ 151 million as of December 31, 2022.

Management has concluded that there are no indicators for an other-than-temporary impairment.

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

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This gain was recorded within Interest and sundry (income) expense during the third quarter of 2021.

The Company has finalized the independent appraisal for the purpose of allocating the purchase price to the individual assets acquired and liabilities assumed in the acquisition during the fourth quarter of 2021.

This resulted in adjustments to the carrying values of recorded assets and liabilities, and the determination of residual amounts allocated to goodwill.

The final allocation of the purchase prices included in the current period balance sheet is based on the final determination of asset fair values.

Goodwill of $ 100 million, which is not deductible for tax purposes, has been allocated to the Asia reportable segment.

Goodwill of $ 100 million, which is not deductible for tax purposes, arose from this transaction and is allocated to the Asia reportable segment.

The allocation has been made on the basis that the anticipated synergies identified will primarily benefit this reportable segment.

Elica PB India is a VIE for which the Company is the primary beneficiary.

The carrying amount of customer relationships, which are included in Other intangible assets, net of accumulated amortization, amounts to $ 36 million.

The carrying amount of customer relationships, which are included in Other intangible assets, net of accumulated amortization, amounts to $ 31 million as of December 31, 2022.

Other assets or liabilities of Elica PB India are not material to the Consolidated Financial Statements of the Company.

Both Whirlpool India and the non-controlling interest shareholders retain an option for Whirlpool India to purchase the remaining equity interest in Elica PB India for fair value, which could be material to the financial statements of the Company, depending on the performance of the business.

In the third quarter of 2019, we sold our 12.54 % ownership interest in Elica S.p.A.

for a nominal amount.

Adoption of New Accounting Standards

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

Standard Effective Date

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

Accounting Pronouncements Issued But Not Yet Effective

In March 2020, the FASB issued Update 2020-04, "Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting".

The amendments in Update 2020-04 are elective and apply to all entities that have contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued due to reference rate reform.

The new guidance provides the following optional expedients:

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accounting analyses under current U.S.

GAAP for contract modifications, simplify the assessment of hedge effectiveness, allow hedging relationships affected by reference rate reform to continue and allow a one-time election to sell or transfer debt securities classified as held to maturity that reference a rate affected by reference rate reform.

In January 2021, the FASB issued Update 2021-01, "Reference Rate Reform (Topic 848):

The update provides additional optional guidance on the transition from LIBOR to include derivative instruments that use an interest rate for margining, discounting or contract price alignment.

The standard will ease, if warranted, the requirements for accounting for the future effects of the rate reform.

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

The standard is not expected to have a material impact on our Consolidated Financial Statements.

The FASB has issued the following relevant standards, which are not expected to have a material impact on our Consolidated Financial Statements:

We adopted the following standards for the year ended December 31, 2022 which did not have a material impact on our Consolidated Financial Statements:

Standard Effective Date

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

Government Assistance January 1, 2022

2020-04 Reference Rate Reform (Topic 848) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting March 12, 2020 to December 31, 2022

2021-01 Reference Rate Reform (Topic 848) - Scope January 7, 2021 to December 31, 2022

2021-10 Government Assistance (Topic 832) - Disclosures by Business Entities about Government Assistance January 1, 2022

2022-06 Reference Rate Reform (Topic 848) - Deferral of the Sunset Date of Topic 848 December 21, 2022 to December 31, 2024

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

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To achieve the core principle, the Company applies the following five steps:

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Identify the contract with a customer

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

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Determine the transaction price

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We sell products within all major product categories in each operating segment.

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

For additional information on the

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disaggregated revenues by geographical regions, see Note 16 to the Consolidated Financial Statements.

Twelve Months Ended

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Total net sales $ 19,724 $ 21,985 $ 19,456

The impact to revenue related to prior period performance obligations is less than 1% of global consolidated revenues for the twelve months ended December 31, 2021.

Major Product Category Sales

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Our major product categories include the following:

refrigeration, laundry,

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cooking, and dishwashing.

refrigeration, laundry, cooking, and dishwashing.

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

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The Company primarily offers assurance type warranties.

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Whirlpool sells certain extended service arrangements separately from the sale of products.

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Other Revenue

Other revenue sources include subscription arrangements and licenses as described below.

Other revenue sources include primarily the revenues from the newly acquired InSinkErator business, subscription arrangements and licenses as described below.

InSinkErator revenues consist primarily of food waste disposers and instant hot water dispensers.

We transfer control and recognize a sale when we ship the product from our manufacturing facility to our customer or when the customer receives the product based upon agreed shipping terms, in a similar manner as our major product category sales.

The Company has a water subscription business in our Latin America segment which provides the consumer with a water filtration system that is delivered to the consumer's home.

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the customer views all activities associated with the arrangement as one singular value proposition).

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

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

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

The contract term is generally less than one year for these arrangements and revenue is recognized based on the monthly invoiced amount which directly corresponds to the value of our performance completed to date.

We license our brands in arrangements that do not include other performance obligations.

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We take into account past events, current conditions and reasonable and supportable forecasts in developing the reserve.

The adoption of the new credit loss standard as of January 1, 2020 did not have a material impact on the Consolidated Financial Statements.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

The following table summarizes our allowance for doubtful accounts by operating segment for the twelve months ended December 31, 2022.

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Latin America $ 25 $ — $ — $ 2 $ — $ 27

Asia 21 — — — ( 21 ) —

$ 25 $ — $ — $ 2 $ — $ 27

Consolidated $ 123 $ 7 $ ( 9 ) $ 2 $ ( 47 ) $ 76

(1) Accounts receivable and financing receivable allowance of Whirlpool China which were previously classified under accounts receivable and noncurrent assets, respectively, have been removed as part of the deconsolidation of Whirlpool China during the second quarter.

(1) Accounts receivable allowance of our Russian operations has been removed as part of the deconsolidation of the Russian operations in the third quarter of 2022.

Additionally, accounts receivable allowance of our European major domestic appliance business has been transferred to assets held for sale in the fourth quarter of 2022.

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

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Leases with an initial term of 12 months or less are not recorded in the Consolidated Balance Sheets and we recognize lease expense for these leases on a straight-line basis over the lease term.

The Company had operating lease costs of approximately $ 234 million and $ 236 million for the years ended December 31, 2021 and December 31, 2020, respectively.

Non-cancelable operating lease commitments that had not yet commenced were $ 69 million and $ 49 million for the periods ended December 31, 2021 and December 31, 2020, respectively.

The Company had operating lease costs of approximatel y $ 218 million, $ 234 million and $ 236 million for the years ended December 31, 2022, 2021 and 2020, respectively.

Non-cancellable operating lease commitments that had not yet commenced were $ 69 million and $ 69 million for the periods ended December 31, 2022 and December 31, 2021, respectively.

These operating leases are expected to commence before the end of fiscal year 2023 with lease terms of up to 10 years.

At December 31, 2022 and 2021, we have no material leases classified as financing leases.

We have approximately $ 1.1 billion of non-cancellable operating lease commitments, excluding variable consideration at December 31, 2021 and $ 1.2 billion at December 31, 2020.

The undiscounted annual future minimum lease payments are summarized by year in the table below:

We have approximately $ 889 million of non-cancellable operating lease commitments, excluding variable consideration at December 31, 2022 and $ 1.1 billion at December 31, 2021.

The undiscounted annual future minimum lease payments are summarized by year in the table below and it excludes lease payments beyond 2023 related to our European major domestic appliance business classified as held for sale.

Maturity of Lease Liabilities Operating Leases

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The remainder of our lease liabilities are included in other current liabilities in the Consolidated Balance Sheets.

At December 31, 2021 and December 31, 2020, the weighted average remaining lease term and weighted average discount rate for operating leases was 7 years and 5 % and 8 years and 4 %, respectively.

At December 31, 2022 and December 31, 2021, the weighted average remaining lease term and weighted average discount rate for operating leases was 7 years and 5 %, respectively.

During the year ended December 31, 2022 the cash paid for amounts included in the measurement of the liabilities and the operating cash flows was $ 219 million .

The right of use assets obtained in exchange for new liabilities was $ 179 million partially offset by $ 40 million in terminations for the year ended December 31, 2021.

The right of use assets obtained in exchange for new liabilities was $ 79 million for the year ended December 31, 2022.

During the year ended December 31, 2021 the cash paid for amounts included in the measurement of the liabilities and the operating cash flows was $ 233 million .

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Our lease agreements do not contain any material residual value guarantees or material restrictive covenants, except for synthetic leases (see Synthetic lease arrangements).

We rent or sublease certain real estate to third parties.

Our sublease portfolio primarily consists of operating leases within our warehouses, resulting in a nominal amount of sublease income for the years ended December 31, 2021 and December 31, 2020.

We rent or sublease certain real estate to third parti es.

Our sublease portfolio primarily consists of operating leases within our warehouses, resulting in a nominal amount of sublease income for the years ended December 31, 2022, 2021 and 2020, respectively.

Sale-leaseback transactions

In the first quarter of 2022, the Company sold and leased back a group of non-core properties for net proceeds of approximately $ 52 million.

The initial total annual rent for the properties is approximately $ 2 million per year over an initial 15 year lease term and is subject to annual rent increases.

Under the terms of the lease agreement, the Company is responsible for all taxes, insurance and utilities and is required to adequately maintain the properties for the lease term.

The Company has two sequential 5-year renewal options.

The transaction met the requirements for sale-leaseback accounting.

Accordingly, the Company recorded the sale of the properties, which resulted in a gain of approximately $ 44 million ($ 36 million, net of tax) recorded in selling, general and administrative expense in the Consolidated Statements of Comprehensive Income (Loss) for the twelve months ended December 31, 2022.

The related land and buildings were removed from property, plant and equipment, net and the appropriate right-of-use asset and lease liabilities of approximately $ 32 million were recorded in the Consolidated Balance Sheets at the time of the transaction in the first quarter of 2022.

There were no material sale-leaseback transactions in 2021.

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

The initial total annual rent for the properties is approximately $ 10 million per year over an initial 14 year lease term and is subject to annual rent increases.

Under the terms of the lease agreement, the Company is responsible for all taxes, insurance and utilities and is required to adequately maintain the properties for the lease term.

The Company has four sequential five-year renewal options.

The transaction met the requirements for sale-leaseback accounting.

Synthetic lease arrangements

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The residual value guarantee amounted to $ 264 million as of December 31, 2021.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

The majority of these leases are classified as operating leases.

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Rental payments are calculated at the applicable reference rate plus a margin.

The impact to the Consolidated Balance Sheets and Consolidated Statements of Income (Loss) are nominal.

The impact to the Consolidated Balance Sheets and Consolidated Statements of Income (Loss) is nominal.

(4) CASH, CASH EQUIVALENTS AND RESTRICTED CASH

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Total inventories (1)

$ 2,089 $ 2,717

(1) $ 650 million of inventories of the European major appliance business has been classified as assets held for sale.

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

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

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Currency translation adjustment — ( 22 ) ( 1 ) 3 ( 20 )

Divestitures and acquisitions (1)

$ — $ ( 11 ) $ — $ 20 $ 9

Ending balance December 31, 2021

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1,137 — — — 1,137

Impairment (3)

$ — $ ( 278 ) $ — $ — $ ( 278 )

Ending balance December 31, 2022

$ 2,829 $ — $ 33 $ 452 $ 3,314

(1) The net change in goodwill is due to the divestiture of Turkey manufacturing entity, deconsolidation of Whirlpool China and consolidation of Elica PB India.

(1) The net change in goodwill in 2021 is due to the divestiture of Turkey manufacturing entity, deconsolidation of Whirlpool China and consolidation of Elica PB India.

For additional information, see Notes 1 and 17 to the Consolidated Financial Statements.

2021 and 2020 annual impairment assessment

We completed our annual impairment test for goodwill as of October 1, 2021 and 2020.

The Company elected to bypass the qualitative assessment and perform a quantitative assessment to evaluate goodwill for all our reporting units.

(2) Increase in goodwill is related to the purchase of InSinkErator business.

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

(3) Full impairment of EMEA goodwill recorded in the second quarter of 2022.

For additional information, See Note 11 to the Consolidated Financial Statements.

Interim impairment assessment

In connection with the preparation of our Consolidated Condensed Financial Statements for three months ended June 30, 2022, we identified indicators of goodwill impairment for our EMEA reporting unit, which required us to complete an interim impairment assessment.

The primary indicators of impairment were the adverse impacts from the continuation of the Russia and Ukraine conflict, including the impact on demand, the divestiture of our Russian operations and other ongoing adverse macroeconomic impacts such as raw material inflation, supply chain disruption and unfavorable demand.

As a result of these factors, the operating results for the three-months ended June 30, 2022 were significantly lower than expected and our expectations of attaining our long term plans for the region were delayed.

In performing our quantitative assessment of goodwill, we estimated the reporting unit's fair value under an income approach using a discounted cash flow model.

The income approach used the reporting unit's projections of estimated operating results and cash flows that were discounted using a market participant discount rate based on the weighted-average cost of capital.

The main assumptions supporting the cash flow projections include revenue growth, EBIT margins and the discount rate.

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

Based on our interim quantitative impairment assessment as of June 30, 2022, the carrying value of the EMEA reporting unit exceeded its fair value and we recorded a goodwill impairment charge for the full amount of the goodwill's carrying value of $ 278 million during the second quarter of 2022.

For additional information, see Note 11 to the Consolidated Financial Statements.

A nnual impairment assessment

We completed our annual test for goodwill as of October 1, 2022.

The Company performed a qualitative assessment for all our reporting units and determined no impairment was indicated, other than the amounts recorded during the second quarter of 2022.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

For the annual impairment test for goodwill as of October 1, 2021, the Company elected to bypass the qualitative assessment and perform a quantitative assessment to evaluate goodwill for all our reporting units.

Based on the quantitative assessment we determined there was no impairment of goodwill.

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Total other intangible assets $ 3,564 $ ( 400 ) $ 3,164 $ 2,503 $ ( 522 ) $ 1,981

$ 2,503 $ ( 522 ) $ 1,981 $ 2,867 $ ( 673 ) $ 2,194

(1) Customer relationships have an estimated useful life of 5 to 19 years.

Includes $ 327 million of customer relationships, net of accumulated amortization, acquired as part of InSinkErator acquisition.

(2) Patents and other intangibles have an estimated useful life of 3 to 43 years.

(3) Includes impairment charge of $ 7 million at December 31, 2020.

(4) Decrease of $ 184 million in net other intangible assets is due to the deconsolidation of Whirlpool China.

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

2021 and 2020 a nnual impairment assessment

(3) Impairment loss of $ 70 million and $ 36 million was recorded for Indesit and Hotpoint* trademarks, respectively, in the second quarter of 2022.

In the fourth quarter of 2022, the remaining carrying value of $ 225 million for these trademarks was classified as held for sale.

(4) Trademarks valued at $ 1.3 billion were acquired as part of the InSinkErator acquisition.

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

(5) Includes Maytag and JennAir trademarks with carrying values of $ 1,021 million and $ 304 million, respectively.

Interim impairment assessment

Similarly to the review of EMEA reporting unit, and in connection with the preparation of our Consolidated Condensed Financial Statements for three months ended June 30, 2022, we identified indicators of impairment associated with other intangible assets in our EMEA reporting unit, which required us to complete an interim impairment assessment.

The primary indicators of impairment were the same as those identified for EMEA reporting unit and resulted in the actual revenues for the three-months ended June 30, 2022 being significantly lower than forecasted for Indesit and Hotpoint * trademarks.

In performing our quantitative assessment of other intangible assets, primarily trademarks, we estimate the fair value using the relief-from-royalty method which requires assumptions related to projected revenues from our long-range plans;

assumed royalty rates that could be payable if we did not own the trademark;

and a discount rate using a market-based weighted-average cost of capital.

Based on our interim quantitative impairment assessment as of June 30, 2022, the carrying value of certain other intangible assets, including Indesit and Hotpoint *, exceeded their fair value, and we recorded an impairment charge of $ 106 million during the second quarter of 2022.

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

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.

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

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

A nnual impairment assessment

We completed our annual impairment assessment for other intangible assets as of October 1, 2022.

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

Based on the results of the quantitative annual assessment, we determined there was no further impairment of the carrying values of intangible assets, other than the amounts recorded during the second quarter of 2022.

In the fourth quarter of 2022, and in connection with the classification of our European major domestic appliance business to held for sale, we recorded a loss of $ 1,521 million for the write-down of the disposal group to its estimated fair value of $ 139 million.

The loss from the transaction includes the remaining carrying values of Hotpoint* and Indesit trademarks for $ 92 million and $ 133 million, respectively, and write-down of other intangible assets of $ 54 million.

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

We completed our annual impairment assessment for other intangible assets as of October 1, 2021.

The Company elected to bypass the qualitative assessment and perform a quantitative assessment to evaluate certain indefinite-lived intangible assets.

Based on the results of the quantitative assessment, we determined there was no impairment of intangible assets.

We completed our annual impairment assessment for other intangible assets as of October 1, 2020.

The Company elected to bypass the qualitative assessment and perform a quantitative assessment

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

to evaluate certain indefinite-life intangible assets.

Based on the results of the quantitative assessment, we recorded an immaterial intangible impairment charge in the EMEA region.

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

1 unchanged sentence

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

Amortization expense related to intangible assets transferred to held for sale of our European major appliance business are excluded beyond 2023.

Millions of dollars

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

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

(7) FINANCING ARRANGEMENTS

5 unchanged sentences

Senior Note - 4.00 %, maturing 2024

Term Loan - SOFR + 85 bps, maturing 2024

Term Loan - SOFR + 110 bps, maturing 2025

Senior Note - 3.70 %, maturing 2025

14 unchanged sentences

For outstanding notes issued by our wholly-owned subsidiaries the debt is fully and unconditionally guaranteed by the Company.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

The following table summarizes the contractual maturities of our long-term debt, including current maturities, at December 31, 2022:

2 unchanged sentences

Long-term debt, including current maturities 7,611

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

Term Loan Agreement

On September 23, 2022, the Company entered into a Term Loan Agreement by and among the Company, Sumitomo Mitsui Banking Corporation (“SMBC”), as Administrative Agent and Syndication Agent and as lender, and certain other financial institutions as lenders.

SMBC, BNP Paribas, ING Bank N.V., Dublin Branch, Mizuho Bank, Ltd., and Societe Generale acted as Joint Lead Arrangers and Syndication Agents;

The Bank of Nova Scotia and Bank of China, Chicago Branch acted as Documentation Agents;

and SMBC acted as Sole Bookrunner for the Term Loan Agreement.

The Term Loan Agreement provides for an aggregate lender commitment of $ 2.5 billion.

The Company utilized proceeds from the term loan facility on a delayed draw basis to fund a majority of the $ 3.0 billion purchase price consideration for the Company’s acquisition from Emerson Corporation (“Emerson”) of Emerson’s InSinkErator business, as set forth in the Asset and Stock Purchase Agreement between Whirlpool and Emerson dated as of August 7, 2022 (the “Acquisition Agreement”).

The term loan facility is divided into two tranches:

a $ 1 billion tranche with a maturity date 18 months following the date that funds were borrowed (October 31, 2022), and a $ 1.5 billion tranche with a maturity date three years following the date that funds were borrowed.

The interest and fee rates payable with respect to the term loan facility based on the Company's current debt rating are as follows:

(1) the spread over secured overnight financing rate ("SOFR") for the 18-month tranche is 0.75 %;

(2) the spread over SOFR for the three-year tranche is 1.00 %;

(3) the spread over prime for both tranches is zero ;

and (4) the ticking fee for both tranches is 0.10 %, as of the date hereof.

The Term Loan Agreement contains customary covenants and warranties including, among other things, a rolling twelve month interest coverage ratio required to be greater than or equal to 3.0 to 1.0 for each fiscal quarter.

In addition, the covenants limit the Company's ability to (or to permit any subsidiaries to), subject to various exceptions and limitations:

(i) merge with other companies;

(ii) create liens on its property;

and (iii) incur debt at the subsidiary level.

We were in compliance with our interest coverage ratio under the term loan agreement as of December 31, 2022.

The outstanding amount for this term loan agreement at December 31, 2022 was $ 2.5 billion.

Debt Offering

On April 29, 2021, Whirlpool Corporation (the “Company”), completed its inaugural Sustainability Bond offering of $ 300 million in principal amount of 2.400 % Senior Notes due 2031 (the “2031 Notes”), in a public offering pursuant to a registration statement on Form S-3 (File No.

On May 4, 2022, the Company completed its offering of $ 300 million in principal amount of 4.7 % Senior Notes due 2032 (the “2032 Notes”), in a public offering pursuant to a registration statement on Form S-3 (File No.

The 2032 Notes were issued under an indenture (the “Indenture”), dated March 20, 2000, between the Company, as issuer, and U.S.

Bank National Association (as successor to Citibank, N.A.), as trustee.

The sale of the 2031 Notes was made pursuant to the terms of an Underwriting Agreement, dated April 26, 2021 (the “Underwriting Agreement”), among the Company, as issuer, and BNP Paribas Securities Corp., BofA Securities, Inc., J.P.

Morgan Securities LLC, and Wells Fargo Securities, LLC, as representatives of the several underwriters in connection with the offering and sales of the 2031 Notes.

The sale of the 2032 Notes was made pursuant to the terms of an Underwriting Agreement, dated May 2, 2022 (the “Underwriting Agreement”), among the Company, as issuer, and BNP Paribas Securities Corp., Citigroup Global Markets Inc., Goldman Sachs & Co.

LLC, Mizuho Securities USA LLC and Wells Fargo Securities, LLC, as representatives of the several underwriters in connection with the offering and sales of the 2032 Notes.

The 2032 Notes contain covenants that limit the Company's ability to incur certain liens or enter into certain sale and lease-back transactions.

In addition, if we experience a specific kind of change of control, we are required to make an offer to purchase all of the notes at a purchase price of 101 % of the principal amount thereof, plus accrued and unpaid interest.

The Company used the net proceeds from the sale of the 2031 Notes to redeem $ 300 million aggregate principal amount of 4.850 % senior notes which was paid June 15, 2021.

Consistent with the Company’s Sustainability Bond Framework, the Company intends to allocate an amount equal to the net proceeds from the sale of the 2031 Notes to fund one or more new or existing environmental and social Eligible Projects, as defined in the Company’s prospectus supplement dated April 26, 2021.

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

The Company used the net proceeds from the sale of the 2032 Notes to redeem $ 300 million aggregate principal amount of 4.7 % Notes which were paid on June 1, 2022.

On April 29, 2021, the Company completed its inaugural Sustainability Bond offering of $ 300 million in principal amount of 2.4 % Senior Notes due 2031 (the “2031 Notes”), in a public offering pursuant to a registration statement on Form S-3 (File No.

The 2031 Notes were issued under the Indenture.

The sale of the 2031 Notes was made pursuant to the terms of an Underwriting Agreement, dated April 26, 2021, among the Company, as issuer, and BNP Paribas Securities Corp., BofA Securities, Inc., J.P.

Morgan Securities LLC, and Wells Fargo Securities, LLC, as representatives of the several underwriters in connection with the offering and sales of the 2031 Notes.

The 2031 Notes contain covenants that limit the Company's ability to incur certain liens or enter into certain sale and lease-back transactions.

The Company used the net proceeds from the sale of the 2050 Notes to repay a portion of the outstanding borrowings under the Company’s revolving credit facility, as amended and restated, dated as of August 6, 2019, among the Company, certain other borrowers, the lenders referred to therein, JPMorgan Chase Bank, N.A.

as administrative agent and Citibank, N.A., as syndication agent.

On February 21, 2020, Whirlpool EMEA Finance S.à r.l., an indirect, wholly-owned finance subsidiary of Whirlpool Corporation, completed a bond offering consisting of € 500 million (approximately $ 540 million at closing) in principal amount of 0.50 % Senior Notes due in 2028 (the "2028 Notes") in a public offering pursuant to a registration statement on Form S-3 (File No.

The 2028 Notes were issued under an indenture, dated February 21, 2020, among Whirlpool EMEA Finance S.à r.l, as issuer, the Company, as parent guarantor, and U.S.

Bank National Association, as trustee.

Whirlpool Corporation has fully and unconditionally guaranteed the Notes on a senior unsecured basis.

The 2028 Notes contain covenants that limit Whirlpool Corporation's ability to incur certain liens or enter into certain sale and lease-back transactions.

In addition, if we experience a specific kind of change of control, we are required to make an offer to purchase all of the 2028 Notes at a purchase price of 101 % of the principal amount thereof, plus accrued and unpaid interest.

In addition, if we experience a specific kind of change of control,

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

we are required to make an offer to purchase all of the notes at a purchase price of 101 % of the principal amount thereof, plus accrued and unpaid interest.

The Company used the net proceeds from the sale of the 2031 Notes to redeem $ 300 million aggregate principal amount of 4.85 % senior notes which was paid June 15, 2021.

Consistent with the Company’s Sustainability Bond Framework, the Company allocated an amount equal to the net proceeds from the sale of the 2031 Notes to fund one or more new or existing environmental and social Eligible Projects, as defined in the Company’s prospectus supplement dated April 26, 2021.

Credit Facilities

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

On May 3, 2022, the Company entered into a Fifth Amended and Restated Long-Term Credit Agreement (the “Amended Long-Term Facility”) by and among the Company, certain other borrowers, the lenders referred to therein, JPMorgan Chase Bank, N.A.

as Administrative Agent, and Citibank, N.A., as Syndication Agent.

The Amended Long-Term Facility provides aggregate borrowing capacity of $ 3.5 billion.

On December 7, 2021, Whirlpool Corporation entered into Amendment No.

1 to the Fourth Amended and Restated Long-Term Credit Agreement to address the cessation of EUR LIBOR and GBP LIBOR on December 31, 2021 by defining EURIBOR and SONIA as the replacement rates, respectively.

The Amended Long-Term Facility has a maturity date of August 6, 2024, unless earlier terminated.

The interest and fee rates payable with respect to the Amended Long-Term Facility based on our current debt rating are as follows:

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

(2) the spread over prime is 0.125 %;

and (3) the unused commitment fee is 0.100 %.

The Amended Long-Term Facility contains customary covenants and warranties including, among other things, a debt to capitalization ratio of less than or equal to 0.65 as of the last day of each fiscal quarter, and a rolling twelve month interest coverage ratio required to be greater than or equal to 3.0 for each fiscal quarter.

In addition, the covenants limit our ability to (or to permit any subsidiaries to), subject to various exceptions and limitations:

BNP Paribas, Mizuho Bank, Ltd.

and Wells Fargo Bank, National Association acted as Documentation Agents.

JPMorgan Chase Bank, N.A., BNP Paribas Securities Corp., Citibank, N.A., Mizuho Bank, Ltd.

and Wells Fargo Securities, LLC acted as Joint Lead Arrangers and Joint Bookrunners for the Amended Long-Term Facility.

Consistent with the Company’s prior credit agreement, the Amended Long-Term Facility provides an aggregate borrowing capacity of $ 3.5 billion.

The interest rate payable with respect to the Amended Long-Term Facility reflect a decrease of 0.125 % in the interest rate margin from the Company’s prior credit facility, and is based on the Company’s current debt rating, Term SOFR + 1.00 % interest rate margin per annum (with a 0.10 % SOFR spread adjustment) or the Alternate Base Rate + 0.00 % per annum, at the Company’s election.

The Amended Long-Term Facility contains customary covenants and warranties, such as, among other things, a rolling four quarter interest coverage ratio required to be greater than or equal to 3.0 as of the end of each fiscal quarter.

The Amended Long-Term Facility removes the second financial covenant, a debt-to-capitalization ratio, that was in the Company’s prior credit agreement.

The Amended Long-Term Facility also includes limitations on the Company’s ability to (or to permit any subsidiaries to), subject to various exceptions and limitations:

(i) merge with other companies;

(ii) create liens on our property;

(iii) incur debt at the subsidiary level.

We are in compliance with both our debt to capitalization ratio and interest coverage ratio under the revolving credit facility as of December 31, 2021.

On April 27, 2020, Whirlpool Corporation entered into a revolving 364 -Day Credit Agreement (the “ 364 -Day Facility”) by and among the Company, the lenders referred to therein, and Citibank, N.A.

as Administrative Agent.

The 364 -Day Facility provided aggregate borrowing capacity of $ 500 million, and expired on its termination date of April 26, 2021 w ith no outstanding borrowings.

In addition to the committed $ 3.5 billion Amended Long-Term Facility, we have committed credit facilities in Brazil and India.

These committed credit facilities provide borrowings up to approximately $ 193 million a t December 31, 2021 and $ 206 million at December 31, 2020, based on exchange rates then in effect, respectively.

(ii) create liens on its property;

and (iii) incur debt at the subsidiary level.

Many of the lenders have in the past performed, and may in the future from time to time perform, investment banking, financial advisory, lending and/or commercial banking services, or other services for Whirlpool Corporation and its subsidiaries, for which they have received, and may in the future receive, customary compensation and expense reimbursement.

We were in compliance with our interest coverage ratio under the revolving credit facility as of December 31, 2022.

In addition to the committed $ 3.5 billion Amended Long-Term Facility and the committed $ 2.5 billion term loan, we have committed credit facilities in Brazil and India which provide borrowings up to approximately $ 204 million a t December 31, 2022 and $ 193 million at December 31, 2021, based on exchange rates then in effect, respectively.

These committed credit facilities have maturities that run through 2024.

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

Facility Borrowings

On March 13, 2020, we initiated a borrowing of approximately $ 2.2 billion under the Amended Long-Term Facility, for which a portion of the proceeds from the borrowing were used to fund commercial paper repayment.

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

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

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

We had $ 2.5 billion drawn on the committed credit facilities at December 31, 2022.

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

Notes Payable

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We continue to defend these actions.

While it is currently not possible to reasonably estimate the aggregate amount of costs which we may incur in connection with these matters, such costs could have a material adverse effect on our financial statements in any particular reporting period.

While it is currently not possible to reasonably estimate the aggregate amount of costs which we may incur in connection with these matters, such costs could have a material adverse effect on our consolidated financial statements in any particular reporting period.

BEFIEX Credits and Other Brazil Tax Matters

16 unchanged sentences

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

We have received tax assessments from the Brazilian federal tax authorities relating to amounts allegedly due regarding unemployment/social security insurance taxes (PIS/COFINS) for tax credits recognized since 2007.

We have received tax assessments from the Brazilian federal tax authorities relating to amounts allegedly due regarding insurance taxes (PIS/COFINS) for tax credits recognized since 2007.

These credits were recognized for inputs to certain manufacturing and other business processes.

8 unchanged sentences

Litigation is inherently unpredictable and the conclusion of these matters may take many years to ultimately resolve.

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

Amounts at issue in potential future litigation could increase as a result of interest and penalties in future periods.

Accordingly, it is possible that an unfavorable outcome in these proceedings could have a material adverse effect on our financial statements in any particular reporting period.

We also filed legal actions in Brazil to recover certain social integration and social contribution taxes paid over gross sales including ICMS receipts, which is a form of Value Added Tax in Brazil.

During 2017, we sold the rights to certain portions of this litigation to a third party for 90 million Brazilian reais (approximately $ 27 million at December 31, 2017).

In the first quarter of 2019, we received a favorable decision in the largest of these ICMS legal actions.

This decision is final and not subject to appeals.

Based on the opinion of our tax and legal advisors, we recognized a gain of approximately $ 84 million, after related taxes and fees and based on exchange rates then in effect, during the first quarter of 2019 in connection with this decision.

This amount reflects approximately $ 142 million in indirect tax credits ("credits") that we are entitled to monetize in future periods, offset by approximately $ 58 million in taxes and fees, which have been paid.

In the second quarter of 2019, we received favorable final, non-appealable decisions in two smaller ICMS legal actions.

Based on the opinion of our tax and legal advisors, we recognized a gain of approximately $ 35 million, after related taxes and fees and based on exchange rates then in effect, during the second quarter of 2019 in connection with this decision.

This amount reflects approximately $ 54 million in credits that we are entitled to monetize in future periods, offset by approximately $ 19 million in taxes and fees, which have been paid.

The ICMS credits and related fees were recorded in interest and sundry (income) expense in our Consolidated Statements of Comprehensive Income (Loss).

The Brazilian tax authorities sought clarification before the Brazilian Supreme Court (in a leading case involving another taxpayer) of certain matters, including the amount of these credits (i.e., the gross rate or net credit amount), and other matters that could have affected the rights of Brazilian taxpayers regarding these credits.

In May 2021, the Supreme Court ruled that the gross rate, which is the rate Whirlpool applied, is the appropriate rate, and that taxpayers that filed legal actions prior to the Supreme Court's original decision in 2017, such as Whirlpool, were entitled to credits for amounts paid prior to the original decision.

The Supreme Court's ruling is final, and a formal written opinion has been issued.

This favorable ruling affirms the position we have taken with respect to the credits at issue in our ICMS legal actions noted above, and our actions in recognizing and monetizing these credits.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

Competition Investigation

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Whirlpool was named as a defendant in a product liability suit in Pennsylvania federal court related to this matter.

The federal court dismissed the case with prejudice in September 2020.

The dismissal is being appealed.

The federal court dismissed the case with prejudice in September 2020 and the dismissal was affirmed on appeal in July 2022.

Plaintiffs filed a petition with the U.S.

Supreme Court in January 2023.

In December 2020, lawsuits related to Grenfell Tower were filed in the U.K.

against approximately 20 defendants, including Whirlpool Corporation and certain Whirlpool subsidiaries.

Given the preliminary stage of the proceedings, we cannot speculate on their eventual outcomes or potential impact on our financial statements;

accordingly, we have not recorded any significant charges as of December 31, 2021.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

In the fourth quarter of 2022, we accrued an immaterial amount related to these claims in our financial statements.

Additional claims may be filed related to this incident.

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federal court, relating to two top-load washing machine models.

In December 2019, the court in one of these lawsuits entered summary judgment in Whirlpool's favor.

In December 2019, the court in one of these lawsuits entered summary judgement in Whirlpool's favor.

That ruling remains subject to appeal, and the other lawsuit is ongoing.

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

Management believes, based upon its current knowledge, after taking into consideration legal counsel's evaluation of such suits and actions, and after taking into account current litigation accruals, that the outcome of these matters currently pending against Whirlpool

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

should not have a material adverse effect, if any, on our financial statements.

We may experience additional delays in resolving these and other pending litigation matters as a result of COVID-19-related temporary court and administrative body closures and postponements.

Product Warranty and Legacy Product Corrective Action Reserves

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( 304 ) ( 294 )

Liabilities classified to held for sale (2)

Balance at December 31 $ 190 $ 286

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(1) Includes updated reserve assumptions noted below.

(2) Product warranty reserve of our European major domestic appliance business has been transferred to liabilities held for sale in the fourth quarter of 2022.

In the normal course of business, we engage in investigations of potential quality and safety issues.

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and Ireland for these EMEA-produced washers, for which the recall is ongoing.

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

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

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

In the third quarter of 2019, we accrued approximately $ 105 million in estimated product

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

warranty expense related to this matter.

During the fourth quarters of 2021 and 2020, the Company released accruals of approximately $ 9 million and $ 30 million, respectively, related to this campaign.

These adjustments were made based on the latest available data including take rate assumptions and unit population.

These estimates are based on several assumptions which are inherently unpredictable and which we may need to materially revise in the future.

For the year ended December 31, 2021, settlements of approximately $ 5 million have been incurred.

Settlements related to this product recall are immaterial for the twelve months ended December 31, 2022.

The total settlements since the beginning of this campaign are approximately $ 63 million.

In 2020, we recorded a benefit of $ 14 million related to a vendor recovery for this corrective action.

The amount of vendor recovery was immaterial in 2021.

For the year ended December 31, 2019, we incurred approximately $ 26 million of additional product warranty expense related to our previously disclosed legacy Indesit dryer corrective action campaign in the U.K.

For the year ended December 31, 2021 and for the year ended December 31, 2020, additional product warranty expenses related to this campaign were immaterial.

We continue to voluntarily cooperate with the U.K.

regulator with respect to the washer and dryer actions.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

We have guarantee arrangements in a Brazilian subsidiary.

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Our expected cash outflows resulting from non-cancellable purchase obligations are summarized by year in the table below.

Non-cancellable purchase obligations related to European major domestic appliance business classified as held for sale are excluded beyond 2023.

Millions of dollars

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The plans generally provide benefit payments using a formula that is based upon employee compensation and length of service.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

In addition, we sponsor an unfunded Supplemental Executive Retirement Plan that remains open to new participants and additional benefit accruals.

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Our contributions during 2022, 2021 and 2020 were $ 90 million, $ 91 million and $ 83 million, respectively.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

of our Company matching contributions to our defined contribution plan during 2020 were made in Company stock from May 2020 to December 2020.

We provide postretirement health care benefits for eligible retired employees in the United States, Canada and Brazil.

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In the United States, benefits for certain retiree populations follow a defined contribution model that allocates certain monthly or annual amounts to a retiree's account under the plan.

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

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

During the second quarter of 2020, the Company announced changes to a postretirement medical benefit program for certain groups of active employees.

These plan amendments were effective July 1, 2020 and reduced medical benefits for these pre-Medicare eligible and Medicare-eligible active employees who retire on or after July 1, 2020 and eliminate certain benefits effective January 1, 2024.

These plan amendments resulted in a reduction in the accumulated postretirement benefit obligation of approximately $ 156 million with a corresponding adjustment of $ 118 million in other comprehensive income, net of $ 39 million in deferred taxes for the nine months ended September 30, 2020.

This amount is being amortized as a reduction of future net periodic cost over approximately 3.4 years, which represents the future remaining service period of eligible active employees.

The interim plan remeasurement associated with these amendments resulted in an actuarial loss of $ 12 million recorded in the Other Comprehensive Income (Loss).

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

Pension assets and liabilities related to the European major domestic appliance business have been classified as held for sale in the fourth quarter of 2022.

The postretirement medical benefit programs are unfunded.

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Other adjustments — — 11 — — —

Special termination benefit — — — — — —

Settlements / curtailment (gain) ( 6 ) ( 16 ) ( 7 ) ( 18 ) — —

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Transfer of plan assets — — — — — —

Other adjustments — — — — — —

Settlements ( 6 ) ( 16 ) ( 7 ) ( 17 ) — —

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Fair value of plan assets, end of year (1)

$ 2,072 $ 2,904 $ 30 $ 665 $ — $ —

(1) Decrease in fair value of plan assets was primarily driven by market fluctuations during the current period.

Components of Net Periodic Benefit Cost

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Prior service cost (credit) — — — — — — ( 46 ) ( 46 ) ( 28 )

Special termination benefit — — $ — — — — — — —

Curtailment (gain) / loss — — — ( 1 ) — — — — ( 3 )

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Net periodic benefit cost $ ( 1 ) $ ( 4 ) $ 33 $ ( 2 ) $ 6 $ 16 $ ( 41 ) $ ( 41 ) $ ( 19 )

The following table summarizes the net periodic cost recognized in operating profit and interest and sundry (income) expense for the years ending December 31, 2021, 2020 and 2019:

The following table summarizes the net periodic cost recognized in operating profit and interest and sundry (income) expense for the years ended December 31, 2022, 2021 and 2020:

United States

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Pension Benefits Foreign

Pension Benefits Other Postretirement

Pension Benefits (1)

What changed 10-K

Item 8. Financial Statements and Supplementary Data