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What changed in WHIRLPOOL CORP /DE/'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of WHIRLPOOL CORP /DE/'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+370 added−366 removedSource: 10-K (2024-02-14) vs 10-K (2023-02-10)

Top changes in WHIRLPOOL CORP /DE/'s 2023 10-K

370 paragraphs added · 366 removed · 287 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

70 edited+25 added−24 removed21 unchanged
Biggest changeBrega Executive Vice President and President, Whirlpool Latin America 2012 59 Gilles Morel Executive Vice President and President, Whirlpool Europe, Middle East & Africa 2019 57 The executive officers named above were elected by our Board of Directors to serve in the office indicated until the first meeting of the Board of Directors following the annual meeting of stockholders in 2023 and until a successor is chosen and qualified or until the executive officer's earlier resignation or removal.
Biggest changePeters Executive Vice President and Chief Financial Officer and President, Whirlpool Asia 2016 54 Carey Martin Executive Vice President and Chief Human Resources Officer 2023 47 Gilles Morel Executive Vice President and President, Whirlpool Europe, Middle East & Africa 2019 58 Juan Carlos Puente Executive Vice President and President, Whirlpool Latin America 2023 49 Ava Harter Executive Vice President and Chief Legal Officer 2023 54 Ludovic Beaufils Executive Vice President and General Manager, KitchenAid Small Appliances 2024 51 Alessandro Perucchetti Executive Vice President and President, Whirlpool North America 2024 48 The executive officers named above were elected by our Board of Directors to serve in the office indicated until the first meeting of the Board of Directors following the annual meeting of stockholders in 2024 and until a successor is chosen and qualified or until the executive officer's earlier resignation or removal.
Whirlpool Corporation ("Whirlpool"), committed to being the best global kitchen and laundry company, in constant pursuit of improving life at home, was incorporated in 1955 under the laws of Delaware and was founded in 1911. Whirlpool manufactures products in 10 countries and markets products in nearly every country around the world.
Whirlpool Corporation ("Whirlpool"), committed to being the best kitchen and laundry company, in constant pursuit of improving life at home, was incorporated in 1955 under the laws of Delaware and was founded in 1911. Whirlpool manufactures products in 10 countries and markets products in nearly every country around the world.
Various municipal, state, and federal regulators have discussed, proposed, or enacted new regulations or bans on appliances that utilize natural gas citing climate change and other regulatory concerns, which would impose transition costs and impact our product mix and product offerings, among other impacts.
Various municipal, state, and federal regulators have discussed, proposed, or enacted new regulations or bans on appliances that utilize natural gas citing climate change and other concerns, which would impose transition costs and impact our product mix and product offerings, among other impacts.
As a leading connected appliance manufacturer, we are excited to bring new connected products and technologies to market, including voice control with a compatible smart home assistant, food recognition and automatic laundry detergent replenishment and over-the-air updates to qualified connected appliances.
As a leading connected appliance manufacturer, we are excited to bring connected products and technologies to market, including voice control with a compatible smart home assistant, food recognition and automatic laundry detergent replenishment and over-the-air updates to qualified connected appliances.
These include the first electric wringer washer in 1911, the first residential stand mixer in 1919, the first countertop microwave in 1967, the first energy and water efficient top-load washer in 1998 and the first top-load washer with a removable agitator in 2021, among others.
These include the first electric wringer washer in 1911, the first residential stand mixer in 1919, the first countertop microwave in 1967, the first energy and water efficient top-load washer in 1998 and the first top-load clothes washer with a removable agitator in 2021, among others.
Europe, Middle East and Africa (EMEA) • In Europe, we market and distribute our major domestic appliances to retailers, distributors and directly to consumers under the Whirlpool, Indesit, Hotpoint*, Bauknecht, Ignis, Maytag and Privileg brand names.
Europe, Middle East and Africa (EMEA) • In Europe, we market and distribute major domestic appliances to retailers, distributors and directly to consumers under the Whirlpool , Indesit, Hotpoint*, Bauknecht, Ignis, Maytag and Privileg brand names.
Asia • In Asia, we market and distribute our major home appliances and small domestic appliances in multiple countries, notably in India. • We market and distribute our products in Asia primarily under the Whirlpool , Maytag , KitchenAid , Ariston , Indesit , Bauknecht and Elica brand names through a combination of direct sales to appliance retailers and chain stores and through full-service distributors to a large network of retail stores. • In May 2021, we sold our majority interest in Whirlpool China and subsequently retained a non-controlling interest.
Asia • In Asia, we market and distribute our major home appliances and small domestic appliances in multiple countries, notably in India. • We market and distribute our products in Asia primarily under the Whirlpool , Elica , Maytag , KitchenAid , and Indesit brand names through a combination of direct sales to appliance retailers and chain stores and through full-service distributors to a large network of retail stores. • In May 2021, we sold our majority interest in Whirlpool China and subsequently retained a non-controlling interest.
Compliance with these environmental laws and regulations did not have a material effect on capital expenditures, earnings, or our competitive position during 2022 and is not expected to be material in 2023. The entire major home appliance industry, including Whirlpool, must contend with the adoption of stricter government energy and environmental standards.
Compliance with these environmental laws and regulations did not have a material effect on capital expenditures, earnings, or our competitive position during 2023 and is not expected to be material in 2024. The entire major home appliance industry, including Whirlpool, must contend with the adoption of stricter government energy and environmental standards.
At Whirlpool, we believe in “Leaders Teaching Leaders” where our senior leaders are expected to step up and embrace their role in developing our next generation of leaders. As a result, all of our formal leadership development programs are internally designed and facilitated by Whirlpool leaders themselves.
At Whirlpool, we believe in “Leaders Teaching Leaders'' where our senior leaders are expected to step up and embrace their role in developing our next generation of leaders. As a result, all of our formal leadership development programs are internally designed and facilitated by Whirlpool leaders themselves.
We are committed to being the best global kitchen and laundry company. Our global footprint includes a balance of developed countries and emerging markets, including a leading position in many of the key countries in which we operate.
We are committed to being the best kitchen and laundry company. Our global footprint includes developed countries and emerging markets, including a leading position in many of the key countries in which we expect to operate.
ITEM 1. BUSINESS Our Company Improving life at home has been at the heart of our business for 111 years – it is why we exist and why we are passionate about what we do.
ITEM 1. BUSINESS Our Company Improving life at home has been at the heart of our business for 112 years – it is why we exist and why we are passionate about what we do.
The benefits of this strategy are multi-fold; our senior leaders grow continually by playing the role of teachers, our next-level leaders learn from their role models’ personal experiences and in turn, our organization builds a leadership engine.
The benefits of this strategy are multifold; our senior leaders grow continually by playing the role of teachers, our next-level leaders learn from their role models’ personal experiences and in turn, our organization builds a leadership engine.
In 2021, the Company announced a global commitment to reach a net zero emissions target in its plants and operations (scopes 1 and 2) by 2030, which will cover more than 30 of Whirlpool Corporation's manufacturing sites and its large distribution centers around the world.
In 2021, the Company announced a global commitment to reach a net zero emissions target in its plants and operations (scopes 1 and 2) by 2030, which is expected to cover more than 20 of Whirlpool Corporation's manufacturing sites and its large distribution centers around the world, exclusive of the European manufacturing sites.
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.
Separately, Whirlpool subsequently reached an agreement for the sale of Whirlpool’s Middle East and Africa business to Arcelik. These transactions impact businesses that 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.
Latin America • In Latin America, we produce, market and distribute our major home appliances, small domestic appliances and other consumer products primarily under the Consul, Brastemp, Whirlpool, KitchenAid, Acros, Maytag and Eslabon de Lujo brand names primarily to retailers, distributors and directly to consumers. • We serve the countries of Brazil, Mexico, Bolivia, Paraguay, Uruguay, Argentina, Columbia, Chile, and certain Caribbean and Central America countries, via sales and distribution through accredited distributors. • In 2022, we opened a new manufacturing facility in Argentina which will produce washing machines primarily for the Brazilian marketplace.
Latin America • In Latin America, we produce, market and distribute our major home appliances, small domestic appliances and other consumer products primarily under the Consul, Brastemp, Whirlpool, KitchenAid, Acros, Maytag and Eslabon de Lujo brand names primarily to retailers, distributors and directly to consumers. • We serve the countries of Brazil, Mexico, Bolivia, Paraguay, Uruguay, Argentina, Colombia, Chile, and certain Caribbean and Central America countries, via sales and distribution through accredited distributors.
Each of our executive officers has held the position set forth in the table above or has served Whirlpool in various executive or administrative capacities for at least the past five years, except for Mr. Morel. Prior to joining Whirlpool in April 2019, Mr. Morel served for two years as CEO of Northern and Central Europe for Groupe Savencia.
Each of our executive officers has held the position set forth in the table above or has served Whirlpool in various executive or administrative capacities for at least the past five years, except for Mr. Morel and Ms. Harter. Prior to joining Whirlpool in April 2019, Mr.
In September 2021, we acquired an additional interest in Elica PB India. • In 2022, we opened a new manufacturing line in India which will produce front load washing machines primarily for India. * Whirlpool ownership of the Hotpoint brand in the EMEA and Asia Pacific regions is not affiliated with the Hotpoint brand sold in the Americas. 9 Competition Competition in the major home appliance industry is intense, including competitors such as BSH (Bosch), Electrolux, Haier, Hisense, LG, Mabe, Midea, Panasonic and Samsung, many of which are increasingly expanding beyond their existing manufacturing footprint.
In September 2021, we acquired a majority interest in Elica PB India. *Whirlpool ownership of the Hotpoint brand in the EMEA and Asia Pacific regions is not affiliated with the Hotpoint brand sold in the Americas. 9 Competition Competition in the major home appliance industry is intense, including competitors such as BSH (Bosch), Electrolux, Haier, Hisense, LG, Mabe, Midea, Panasonic and Samsung, among others, many of which are increasingly expanding beyond their existing manufacturing footprint.
In 2022, we launched a global well-being strategy focused on six main well-being pathways – Be healthy; Be you; Be balanced; Be curious; Be prepared; and Be connected, to further empower and support our employees to “Be Well” in all aspects of their lives.
Our global wellbeing strategy focuses on six main pathways– Be healthy; Be you; Be balanced; Be curious; Be prepared; and Be connected, to further empower and support our employees to “Be Well” in all aspects of their lives.
These requirements often provide broad discretion to government authorities, and they could be interpreted or revised in ways that delay production or make production more costly. The costs to comply, or associated with any noncompliance, are, or can be, significant and vary from period to period.
These requirements often provide broad discretion to government authorities, and they could be interpreted or revised in ways that delay production or make production more costly. The costs to comply, or associated with any noncompliance, are, or can be, significant and vary from period to period. Human Capital Management At Whirlpool, our enduring values guide everything we do.
Our long-term value-creation goals reflect our agile and resilient business model, which enables us to succeed in any operating environment.
Our long-term value-creation goals reflect our agile and resilient business model, which enables us to succeed in any operating environment with profitable growth, margin expansion, and cash conversion.
We are focused on producing as efficiently as possible and at scale throughout the world. As the macro environment continues to change, we believe our demonstrated ability to execute cost takeout allows us to effectively cope with macroeconomic challenges, and we see additional opportunities to further streamline our cost structure.
As the macro environment continues to change, we believe our demonstrated ability to execute cost takeout allows us to effectively cope with macroeconomic challenges, and we see additional opportunities to further streamline our cost structure.
Seasonality The Company's quarterly revenues have historically been affected by a variety of seasonal factors, including holiday-driven promotional periods. Historically, the Company's total revenue and operating margins have been highest in the third and fourth quarter.
Seasonality The Company's quarterly revenues have historically been affected by a variety of seasonal factors, including holiday-driven promotional periods. Historically, the Company's total revenue and operating margins have been highest in the third and fourth quarter, and this pattern is more pronounced in our Small Domestic Appliance Global business.
Information About Our Executive Officers The following table sets forth the names and ages of our executive officers on February 10, 2023, the positions and offices they held on that date, and the year they first became executive officers: Name Office First Became an Executive Officer Age Marc R.
For additional information, see Note 14 to the Consolidated Financial Statements. 14 Information About Our Executive Officers The following table sets forth the names and ages of our executive officers on February 14, 2024, the positions and offices they held on that date, and the year they first became executive officers: Name Office First Became an Executive Officer Age Marc R.
We have received worldwide recognition for accomplishments in a variety of business and social efforts, including leadership, diversity, innovative product design, business ethics, environmental sustainability, social responsibility and community involvement. We conduct our business through four operating segments, which we define based on geography.
We have received worldwide recognition for accomplishments in a variety of business and social efforts, including leadership, diversity, innovative product design, business ethics, environmental sustainability, social responsibility and community involvement. Whirlpool had approximately $19 billion in annual net sales and 59,000 employees in 2023. In 2023, we conducted our business through four operating segments, which we define based on geography.
Copies of our Form 10-K, 10-Q, and 8-K reports and amendments, if any, are available free of charge through our website on the same day they are filed with, or furnished to, the Securities and Exchange Commission. We routinely post important information for investors on our website, whirlpoolcorp.com, in the "Investors" section.
Available Information Financial results and investor information (including Whirlpool's Form 10-K, 10-Q, and 8-K reports) are accessible at Whirlpool's investor website: investors.whirlpoolcorp.com. Copies of our Form 10-K, 10-Q, and 8-K reports and amendments, if any, are available free of charge through our website on the same day they are filed with, or furnished to, the Securities and Exchange Commission.
Whirlpool is the owner of a number of trademarks in the United States and foreign countries. The most important trademarks to North America are Whirlpool, Maytag, JennAir, KitchenAid, InSinkErator, Yummly and Amana. The most important trademarks to EMEA are Whirlpool, KitchenAid, Bauknecht, Indesit, Hotpoint* and Ignis.
Whirlpool is the owner of a number of trademarks in the United States and foreign countries. The most important trademarks to North America are Whirlpool, Maytag, JennAir, KitchenAid, InSinkErator, and Amana . The most important trademarks to Latin America are Consul, Brastemp, Whirlpool, KitchenAid and Acros .
Our Integrity Manual was created to help our employees follow our commitment to win the right way. Additionally, our Supplier Code of Conduct formalizes the key principles under which Whirlpool’s suppliers are required to operate. Our Human Capital Strategy is built around three pillars: Agile Organization Our employees are a critical driver of Whirlpool’s global business results.
Additionally, our Supplier Code of Conduct formalizes the key principles under which Whirlpool’s suppliers are required to operate. Our Human Capital Strategy is built around three pillars: Effective and Efficient Organization Our employees are a critical driver of Whirlpool’s global business results.
In an increasingly digital world, the Company is driving purposeful innovation to meet the evolving needs of consumers through its iconic brand portfolio. 6 We aim to position these desirable brands across many consumer segments. Our sales are led by our global brands Whirlpool and KitchenAid .
The Company is driving purposeful innovation to meet the evolving needs of consumers through its iconic brand portfolio, demonstrating our commitment to being the best kitchen and laundry company improving life at home for our consumers. 6 We aim to position these desirable brands across many consumer segments. Our sales are led by our global brands Whirlpool and KitchenAid .
We continually apply for and obtain patents globally. The primary purpose in obtaining patents is to protect our designs, technologies, products and services. Government Regulation and Protection of the Environment At Whirlpool, we believe our vision to be the world’s best kitchen and laundry company, in constant pursuit of improving life at home, is an urgent call to action.
Government Regulation and Protection of the Environment At Whirlpool, we believe our vision to be the world’s best kitchen and laundry company, in constant pursuit of improving life at home, is an urgent call to action.
Raw Materials and Purchased Components Our supplier performance is essential to our business. Some supply disruptions and unanticipated costs may be incurred in transitioning to a new supplier if a prior single supplier relationship was abruptly interrupted or terminated.
Some supply disruptions and unanticipated costs have been and may be incurred in transitioning to a new supplier if a prior single supplier relationship was abruptly interrupted or terminated.
We comply with all laws and regulations regarding protection of the environment, and in many cases where laws and regulations are less restrictive, we have established and are following our own 11 standards, consistent with our commitment to environmental responsibility.
Offset activation, verification, and brokerage was also immaterial in 2023 and is not expected to be material in 2024. We comply with all laws and regulations regarding protection of the environment, and in many cases where laws and regulations are less restrictive, we have established and are following our own standards, consistent with our commitment to environmental responsibility.
Whether developed internally or with 5 one of our many collaborators, we believe these digitally-enabled products and services will increasingly enhance the appliance experience for our consumers, as demonstrated by our highly rated mobile apps. Whirlpool manufactures and markets a full line of major home appliances and related products.
These digitally-enabled products and services will increasingly enhance the appliance experience for our consumers, as demonstrated by our highly rated mobile apps. Whirlpool manufactures and markets a full line of major home appliances and related products. Our principal products are laundry appliances, refrigerators and freezers, cooking appliances, and dishwashers.
We also intend to update the Hot Topics Q&A portion of this website as a means of disclosing material, non-public information and for complying with our disclosure obligations under Regulation FD. Accordingly, investors should monitor the Investors section of our website, in addition to following our press releases, SEC filings, public conference calls, presentations and webcasts.
We routinely post important information for investors on our website, whirlpoolcorp.com, in the "Investors" section. We also intend to update the Hot Topics Q&A portion of this website as a means of disclosing material, non-public information and for complying with our disclosure obligations under Regulation FD.
Working Capital The Company maintains varying levels of working capital throughout the year to support business needs and customer requirements through various inventory management techniques, including demand forecasting and planning.
In 2023, supply chain constraints and inflation moderated, while geopolitical and macroeconomic factors remained volatile in certain countries. Working Capital The Company maintains varying levels of working capital throughout the year to support business needs and customer requirements through various inventory management techniques, including demand forecasting and planning.
Throughout 2022 we continued to manage our fixed cost base across manufacturing, logistics and selling, general and administrative expenses while at the same time continuing our portfolio transformation through the divestiture of our Russia business and InSinkErator acquisition.
Throughout 2023 we continued to manage our fixed cost base across manufacturing, logistics and selling, general and administrative expenses while at the same time continuing our portfolio transformation journey. We also continue our journey to reduce the complexity of our design and product platforms.
Best Cost Position We have a culture of cost optimization and productivity, which we call productivity for growth, and it includes continuous focus on cost efficiency. Since 2017, we have delivered substantial gains through reduced complexity in all aspects of our business: research, design, reduced architectures, and reduced footprint. The regional scale enables our local-for-local production model.
Since 2017, we have delivered substantial gains through reduced complexity in all aspects of our business: research, design, reduced architectures, and reduced footprint. The regional scale enables our local-for-local production model as we continue to focus on producing as efficiently as possible.
In addition, we enabled access for all our employees to clinical counselors and guidance on relationships, finances, retirement planning, legal issues and emotional needs. All global employees, regardless of their full-time or part-time status, are eligible for this free well-being benefit. Winning Culture Our culture is underpinned by our enduring values, which have long been pillared by inclusion and diversity.
In addition, we provide access for all our employees to clinical counselors and guidance on relationships, finances, retirement planning, legal issues and emotional needs. All global employees, regardless of their full-time or part-time status, are eligible for this free well-being benefit. Whirlpool offers a variety of programs globally to protect the health and safety of our employees.
ACR is a leading carbon offset program that has developed environmentally rigorous, science-based offset methodologies for years. Our ACR-registered carbon offsets are sold to external buyers via a broker, and the funds are used to further our initiatives in reducing our carbon footprint through sustainable product development and emissions offsetting.
Our ACR-registered carbon offsets are sold to external buyers via a broker, and the funds are used to further our initiatives in reducing our carbon footprint through sustainable product development and emissions offsetting. The amount received for ACR credit sales in 2023 was immaterial.
In 2022, 2021, and 2020, we realized a seasonality pattern that differed from historical periods due to the COVID-19 pandemic, supply chain disruptions, and other macroeconomic factors. In 2023, the Company expects the seasonal pattern of revenue and operating margins to be more heavily weighted to the second half of the year, compared to historical norms.
In 2022 and 2021, we realized a seasonality pattern that differed from historical periods due to the COVID-19 pandemic, supply chain disruptions, and other macroeconomic factors.
We are committed to continue innovating for a new generation of consumers. Our world-class innovation pipeline has driven consistent innovation over the last few years, driven by a passionate culture of employees focused on bringing new technologies to market.
Our world-class innovation pipeline has driven consistent innovation over the last few years, driven by a passionate culture of employees focused on bringing new technologies to market. 5 As the shift to digital continues, consumers continue to desire connected appliances which fit seamlessly into the larger home ecosystem.
On December 31, 2022, Whirlpool employed approximately 61,000 employees across 48 countries, with 32% located within the United States. Outside of the United States, our largest employee populations were located within Brazil and Mexico. We regularly monitor various key performance indicators around the human capital priorities of attracting, retaining, and engaging our global talent.
On December 31, 2023, Whirlpool employed approximately 59,000 employees across 48 countries, with 32% located within 12 the United States. Outside of the United States, our largest employee populations were located within Brazil and Mexico.
The most important trademark to Asia is Whirlpool . * Whirlpool ownership of the Hotpoint brand in the EMEA and Asia Pacific regions is not affiliated with the Hotpoint brand sold in the Americas. 10 We receive royalties from licensing our trademarks to third parties to manufacture, sell and service certain products bearing the Whirlpool, Maytag, KitchenAid and Amana brand names.
We receive royalties from licensing our trademarks to third parties who manufacture, sell and service certain products bearing the Whirlpool, Maytag, KitchenAid and Amana brand names.
The contents of our 13 Sustainability Report and the Company's website are not incorporated by reference into this Annual Report on Form 10-K or in any other report or document we file with the SEC. Other Information For information about the challenges and risks associated with our foreign operations, see "Risk Factors" under Item 1A.
For additional information, please see Whirlpool’s website (www.whirlpoolcorp.com), and forthcoming 2024 Proxy Statement and 2023 Sustainability Report. The contents of our Sustainability Report, Proxy Statement (except where noted herein), and the Company's website are not incorporated by reference into this Annual Report on Form 10-K or in any other report or document we file with the SEC.
We also market major domestic appliances and small domestic appliances under the KitchenAid brand name primarily to retailers and distributors, as well as directly to consumers. • We market and distribute products under the Whirlpool, Bauknecht, Maytag, Indesit, Amana and Ignis brand names to distributors and dealers in Africa and the Middle East.
We also market major domestic appliances and small domestic appliances under the KitchenAid brand name primarily to retailers and distributors, as well as directly to consumers for small domestic appliances. • We market and distribute products under the Whirlpool, Bauknecht, Maytag, Indesit, Amana and Ignis brand names to distributors and dealers in Africa and the Middle East. • In 2023, we entered into the contribution agreement with Arçelik to contribute our European major domestic appliance business into a newly formed European appliance company and into a separate agreement for the sale of the Middle East and North Africa business, and expect to close both transactions by April 2024.
The information contained on, or that may be accessed through, our website is not incorporated by reference into, and is not a part of, this document.
Accordingly, investors should monitor the Investors section of our website, in addition to following our press releases, SEC filings, public conference calls, presentations and webcasts. The information contained on, or that may be accessed through, our website is not incorporated by reference into, and is not a part of, this document. 15 PART I
Whirlpool is a major supplier of laundry, refrigeration, cooking and dishwasher home appliances to Lowe's, a North American retailer. Sales to Lowe's represented approximately 14%, 13%, and 13% of our consolidated net sales in 2022, 2021 and 2020, respectively. Lowe's represented approximately 37% and 21% of our consolidated accounts receivable as of December 31, 2022 and 2021, respectively.
Other Information For information about the challenges and risks associated with our foreign operations, see "Risk Factors" under Item 1A. Whirlpool is a major supplier of laundry, refrigeration, cooking and dishwasher home appliances to Lowe's, a North American retailer. Sales to Lowe's represented approximately 13%, 14%, and 13% of our consolidated net sales in 2023, 2022 and 2021, respectively.
We also market small domestic appliances under the KitchenAid brand name to retailers, distributors and directly to consumers.
We also market small domestic appliances under the KitchenAid brand name to retailers, distributors and directly to consumers. • We sell some products to other manufacturers, distributors, and retailers for resale in North America under those manufacturers' and retailers' respective brand names.
While we maintain targets for year-over-year reduction of the total recordable incident rate and serious injuries, our goal is always zero. Whirlpool has a proud history of providing our employees with comprehensive and competitive benefits packages and we continue to invest in our employees' health and well being.
Our employees’ safety and wellbeing is of the utmost importance. Whirlpool has a proud history of providing our employees with comprehensive and competitive benefits packages and we continue to invest in our employees' health and wellbeing.
And we are committed to investing in businesses that support high growth and high margins. 4 Reconciliations to equivalent GAAP net earnings measures are not provided as EBIT percentages presented above represent our expectations for these business lines and are not provided with respect to results for any specific period.
In recognition of our portfolio transformation, including our pending European transaction, we have reorganized our operating segments effective January 1, 2024, including presenting our SDA Global business as a separate operating segment. 4 Reconciliations to equivalent GAAP net earnings measures are not provided as EBIT percentages presented above represent our expectations for these business lines and are not provided with respect to results for any specific period.
Leadership development is a crucial component of our overall organizational strategy, and will continue to be an area of focus in the coming years. Whirlpool offers a variety of programs globally to protect the health and safety of our employees.
Leadership development is a crucial component of our overall organizational strategy, and will continue to be an area of focus in the coming years. Winning Culture We continually strive to foster a “family feel” culture where we are accountable to each other.
Below are the key components of our strategic architecture. 3 Portfolio Transformation Whirlpool Corporation is committed to delivering significant, long-term value to both our consumers and our shareholders. We are conducting an overall portfolio review which we believe will transform the company into a high growth and high margin business.
Our Strategic Architecture Our strategic architecture is the foundational component that drives our shareholder value creation and strategy. Below are the key components of our strategic architecture. Portfolio Transformation Whirlpool Corporation is committed to delivering significant, long-term value to both our consumers and our shareholders.
In the event of a disruption, we believe that we would be able to leverage our global scale to qualify and use alternate materials, though sometimes at premium costs. In 2022 and 2021, our industry was impacted by supply constraints with our suppliers, factories, and logistics providers, based in significant part on geopolitical developments and macroeconomic factors beyond our control.
In the event of a disruption, we have been able and believe that we would be able to leverage our scale to qualify and use alternate materials, though sometimes at premium costs.
We continued to use frequent global pulse surveys with coverage of broader engagement and well-being topics. Development of leadership acumen within Whirlpool Corporation is critical in ensuring People Leaders at all levels are capable and confident in their ability to bring out the best in our people.
We provide robust and challenging career opportunities for employees, which ensures that we build a deep succession bench for our leadership roles. Development of leadership acumen within Whirlpool Corporation is critical in ensuring People Leaders at all levels are capable and confident in their ability to bring out the best in our people.
The transactions are 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 Arcelik’s two production facilities in Romania. For additional information, see Note 17 to the Consolidated Financial Statements.
The transactions are expected to close by April 2024 and include nine Whirlpool production sites located in Italy, Poland, Slovakia, and the UK, as well as two Arcelik production facilities in Romania.
Additionally, we maintain a privacy program that manages compliance to privacy regulations globally. Human Capital Management At Whirlpool, our values guide everything we do. We have created an environment where open and honest communication is the expectation, not the exception. We hold our employees to this standard and offer the same in return.
We have created an environment where open and honest communication is the expectation, not the exception. We hold our employees to this standard and offer the same in return. Our Integrity Manual helps our employees follow our commitment to win the right way.
Bitzer Chairman of the Board and Chief Executive Officer 2006 58 James W. Peters Executive Vice President and Chief Financial Officer and President, Whirlpool Asia 2016 53 João C.
Bitzer Chairman of the Board and Chief Executive Officer 2006 59 James W.
Reflective of that, we have successfully completed the acquisition of InSinkErator, divestiture of our Russia operations and the strategic assessment of the EMEA business. Our value creating approach is enabled by three strong pillars: small appliances, major appliances in the Americas and India and commercial appliances.
Our value creating approach is enabled by three strong pillars: small appliances, major appliances in the Americas and India and commercial appliances, and we are committed to investing in businesses that support higher growth and higher margins.
Additionally, we have a number of strong regional and local brands, including Maytag , Consul , Brastemp , Amana , Bauknecht , JennAir , Hotpoint *, Indesit , InSinkErator and Yummly .
Additionally, we have a number of strong regional and local brands, including Maytag, Consul, Brastemp, Amana, Bauknecht, JennAir, Hotpoint*, Indesit, and InSinkErator, among others. These brands add to our impressive depth and breadth of kitchen and laundry product offerings and help us provide products that are tailored to local consumer needs and preferences.
Ever mindful of our impact on the planet, our holistic innovation approach uses Design for Sustainability principles in our global platforms and connects product sustainability directly with our business goals. We are proud of our track record of innovation and our progress on sustainable innovation with eco-efficient products that reduce environmental impacts.
We also unveiled our SlimTech insulation technology, which we expect to deliver benefits ranging from increased capacity and quieter performance to the potential for increased sustainability and design flexibility. Ever mindful of our impact on the planet, our holistic innovation approach uses Design for Sustainability principles in our global platforms and connects product sustainability directly with our business goals.
Following the expected divestiture of our European major domestic appliance business (anticipated in the second half of 2023), we continue to be well positioned to convert demand into profitable growth. Our Sustained Investment in Innovation Whirlpool Corporation has been responsible for a number of first-to-market innovations.
Following the contribution of our European major domestic appliance business, we expect to continue to win in the Americas with our leading position in multiple countries and leading U.S. builder share, alongside over 100 new product introductions in 2023 and accelerating growth in India. Our Sustained Investment in Innovation Whirlpool Corporation has been responsible for a number of first-to-market innovations.
Prior to that, he worked for 27 years at Mars Inc. in various leadership positions, most recently as Regional President, Europe & Eurasia for Mars Chocolate. On January 31, 2023, Joseph T. Liotine, President and Chief Operating Officer of the Company, transitioned to an advisory role. Mr.
Morel served for two years as CEO of Northern and Central Europe for Groupe Savencia. Prior to that, he worked for 27 years at Mars Inc. in various leadership positions, most recently as Regional President, Europe & Eurasia for Mars Chocolate. Prior to joining Whirlpool in December 2020, Ms.
We continued a carbon offsetting initiative based on our use of advanced formulation blowing agents with lower global warming potential in refrigerators produced in North America. These conversions allow us to generate tradable environmental assets and operate in the voluntary carbon offsets market by following an approved American Carbon Registry (ACR) methodology.
These conversions allow us to generate tradable environmental assets and operate in the voluntary carbon offsets market by following an approved American Carbon Registry (ACR) methodology. ACR is a leading carbon offset program that has developed environmentally rigorous, science-based offset methodologies for years.
Capital Allocation Strategy We take a balanced approach to capital allocation by focusing on the following key metrics: We remain confident in our ability to effectively manage our business through supply chain constraints, cost inflation and other macroeconomic factors and expect to continue delivering long-term value for our shareholders. 8 Regional Business Summary North America • In the United States, we market and distribute major home appliances and other consumer products primarily under the Whirlpool, KitchenAid, Maytag, Amana, JennAir, affresh, Swash, everydrop and Gladiator brand names primarily to retailers, distributors and builders, as well as directly to consumers.
For additional information, see Note 14 to the Consolidated Financial Statements. North America • In the United States and Canada, we market and distribute major home appliances and other consumer products primarily under the Whirlpool, KitchenAid, Maytag, Amana, InSinkErator, JennAir, affresh, Swash, everydrop and Gladiator brand names primarily to retailers, distributors and builders, as well as directly to consumers.
These brands add to our impressive depth and breadth of kitchen and laundry product offerings and help us provide products that are tailored to local consumer needs and preferences. Our best brand portfolio in the industry, paired with our robust investment in research and development and consumer insights, positions us well to meet trends in consumer preferences and market demand.
Our best brand portfolio in the industry, paired with our robust investment in research and development and consumer insights, positions us well to meet trends in consumer preferences and market demand. Strong Cost Position We have a culture of cost optimization and productivity, which we call productivity for growth, and it includes continuous focus on cost efficiency.
More specifically, in the fourth quarter of 2022, we experienced a one-off supply chain disruption driving revenue decline in the North America operating segment. We believe we have the organization well positioned to succeed throughout the year and to benefit from mid to long term opportunities.
In 2022 and 2021, our industry was impacted by supply constraints with our suppliers, factories, and logistics providers, based in significant part on geopolitical developments and macroeconomic factors beyond our control. More specifically, in the fourth quarter of 2022, we experienced a one-off supply chain disruption driving revenue decline in the North America operating segment.
The most important trademarks to Latin America are Consul, Brastemp, Whirlpool, KitchenAid and Acros .
The most important trademark to Asia is Whirlpool . 10 The most important trademarks to EMEA are Whirlpool, KitchenAid, Bauknecht, Indesit, Hotpoint* and Ignis .
For information on our global restructuring plans, and the impact of these plans on our operating segments, see Note 14 to the Consolidated Financial Statements.
For additional information, see Note 15 to the Consolidated Financial Statements.
As used herein, and except where the context otherwise requires, "Whirlpool," "the Company," "we," "us," and "our" refer to Whirlpool Corporation and its consolidated subsidiaries. Our Strategic Architecture Our strategic architecture is the foundational component that drives our shareholder value creation and strategy.
The MDA Europe business will be deconsolidated upon the completion of the European contribution agreement transaction with Arcelik, and it does not qualify for reporting as discontinued operations. 3 As used herein, and except where the context otherwise requires, "Whirlpool," "the Company," "we," "us," and "our" refer to Whirlpool Corporation and its consolidated subsidiaries.
Our principal products are laundry appliances (including commercial laundry appliances), refrigerators and freezers, cooking appliances, and dishwashers. Additionally, the Company has a robust portfolio of small domestic appliances, including the KitchenAid stand mixer.
Additionally, the Company has a strong portfolio of small domestic appliances, including the KitchenAid stand mixer, and a strong line of commercial laundry appliances. We have successfully integrated the InSinkErator business into our North America operations, expanding our portfolio of products to include food waste disposers and instant hot water dispensers for home and commercial use.
In the fourth quarter of 2022, we completed the acquisition of InSinkErator, expanding our portfolio of products to include food waste disposers and instant hot water dispensers for home and commercial use. InSinkErator net sales are reported under the 'Other' product category which are aggregated under the 'Dishwashing and Other' category on the chart below.
InSinkErator net sales are reported under the 'Other' product category which are aggregated under the 'Dishwashing and Other' category on the chart below. KitchenAid Small Domestic Appliance net sales are reported under the 'Cooking Appliances' product category.
Removed
Whirlpool's operating segments consist of North America; Europe, Middle East and Africa ("EMEA"); Latin America and Asia. Whirlpool had approximately $20 billion in annual net sales and 61,000 employees in 2022. On January 16, 2023, Whirlpool entered into a contribution agreement with Arçelik A.Ş (“Arcelik”) in alignment with Whirlpool’s portfolio transformation.
Added
Whirlpool's operating segments in 2023 consisted of North America; Europe, Middle East and Africa ("EMEA"); Latin America and Asia. Beginning January 1, 2024, we are conducting our business through five operating segments, which consist of Major Domestic Appliances (“MDA”) North America; MDA Europe, MDA Latin America; MDA Asia; and Small Domestic Appliances (“SDA”) Global.
Removed
In 2022, Maytag brand introduced the Pet Pro System, with a Pet Pro filter in the washer that removes pet hair while a XL lint trap in the dryer traps and removes additional pet hair.
Added
For additional information, see Note 14 to the Consolidated Financial Statements. On January 16, 2023, Whirlpool entered into a contribution agreement with Arçelik A.Ş (“Arcelik”) in alignment with Whirlpool’s portfolio transformation.
Removed
In 2022, we launched more than 100 new products throughout the world, demonstrating our commitment to innovation, including the Pet Pro System, our new 26-inch Brastemp washer, and multiple new KitchenAid small appliances including semi-automatic espresso makers, burr coffee grinders and a shave ice stand mixer attachment.
Added
The Europe transaction is subject to certain closing conditions, including regulatory approvals from the European Commission, Germany, Austria and China, which have been received, and the UK which remains. On February 8, 2024, the U.K. Competition and Markets Authority (“CMA”) provisionally cleared the Transaction. The CMA is expected to issue its final decision by March 26, 2024.
Removed
As the shift to digital continues, consumers continue to desire connected appliances which fit seamlessly into the larger home ecosystem.
Added
In 2023 we continued our multi-year portfolio transformation journey, which we expect to transform the company into a higher-growth and higher-margin business. In reflection of this, we have successfully integrated the InSinkErator business into our North America operations and are nearing the expected completion of the contribution agreement transaction with Arcelik for our European major domestic appliance business.
Removed
Following our InSinkErator acquisition, Whirlpool expects to generate additional revenue through a recurring sales profile primarily from its strong brand and position, and an expansion of the InSinkErator brand into new countries and product offerings.
Added
In 2023, we launched more than 100 new products throughout the world, demonstrating our commitment to innovation, including the KitchenAid Go cordless system, a 70 centimeter built-in bottom mount refrigerator with leading capacity and noise reduction, and our over-the-range flush microwave hood combination.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

98 edited+28 added−12 removed86 unchanged
Biggest changeThese risks include the following: • COVID-19-related shutdowns, the timing, availability and effectiveness of treatments and vaccines, and other pandemic-related uncertainties in the countries in which we operate; • Political, legal, and economic instability and uncertainty; • Foreign currency exchange rate fluctuations; • Changes in foreign tax rules, regulations and other requirements, such as changes in tax rates and statutory and judicial interpretations of tax laws; • Changes in diplomatic and trade relationships, including sanctions and related regulations resulting from the current political situation in countries in which we do business; • Inflation and/or deflation, and changes in interest rates; • Changes in foreign country regulatory requirements, including data privacy laws; • Various import/export restrictions and disruptions and the availability of required import/export licenses; • Imposition of tariffs and other trade barriers; • Managing widespread operations and enforcing internal policies and procedures such as compliance with U.S. and foreign anti-bribery, anti-corruption regulations and anti-money laundering regulations, such as the FCPA, and antitrust laws; • Labor disputes and work stoppages at our operations and suppliers; • Government price controls; • Trade customer insolvency and the inability to collect accounts receivable; and • Limitations on the repatriation or movement of earnings and cash As a U.S. corporation, we are subject to the FCPA, which may place us at a competitive disadvantage to foreign companies that are not subject to similar regulations.
Biggest changeThese risks include the following: • Pandemic-related shutdowns, the timing, availability and effectiveness of treatments and vaccines, and other pandemic-related uncertainties in the countries in which we operate; • Political, legal, and economic instability and uncertainty, including the ongoing conflict between Russia and Ukraine, Israel and Palestine, the Red Sea conflict and its impact on shipping and logistics and other global conflicts, including tensions between China and the United States; • Foreign currency exchange rate fluctuations; • Changes in foreign tax rules, regulations and other requirements, such as changes in tax rates and statutory and judicial interpretations of tax laws; • Changes in diplomatic and trade relationships, including sanctions and related regulations resulting from the current political situation in countries in which we do business; • Inflation and/or deflation, and changes in interest rates; • Changes in foreign country regulatory requirements, including data privacy laws; • Various import/export restrictions and disruptions and the availability of required import/export licenses; • Imposition of tariffs and other trade barriers; • Managing widespread operations and enforcing internal policies and procedures such as compliance with U.S. and foreign anti-bribery, anti-corruption regulations, and anti-money laundering regulations, such as the FCPA, U.K.
In addition, certain liabilities have in the past and may be retained by Whirlpool when closing a facility, divesting an entity or selling physical assets, and certain of these retained liabilities have been in the past and may be in the future material.
In addition, certain liabilities have in the past and may be in the future retained by Whirlpool when closing a facility, divesting an entity or selling physical assets, and certain of these retained liabilities have been in the past and may be in the future material.
These events have in the past and could in the future impact our customers, consumers, employees, third-parties and reputation and lead to financial losses from remediation actions, loss of business or potential litigation or regulatory liability or an increase in expenses.
These events have in the past and could in the future impact our customers, consumers, employees, third parties and reputation and have in the past and could in the future lead to financial losses from remediation actions, loss of business or potential litigation or regulatory liability or an increase in expenses.
In addition, adverse publicity about regulatory or legal action against us, product safety, data privacy breaches or quality issues, inability to meet our net zero or other sustainability goals, or negative association with any brand could damage our reputation and brand image, undermine our customers' confidence in us and reduce long-term demand for our products, even if the regulatory or legal action is unfounded or not material to our operations.
In addition, adverse publicity about regulatory or legal action against us, product safety concerns, data privacy breaches or quality issues, inability to meet our net zero or other sustainability goals, or negative association with any brand could damage our reputation and brand image, undermine our customers' confidence in us and reduce long-term demand for our products, even if the regulatory or legal action is unfounded or not material to our operations.
The failure of any such systems, whether internal or third-party, could disrupt our operations by causing transaction errors, processing inefficiencies, delays or cancellation of customer orders, the loss of customers, impediments to the manufacture or shipment of products, other financial and business disruptions, employee relations issues, the loss of or damage to intellectual property and the unauthorized disclosure or compromise of personal data of consumers and employees or of commercially sensitive information.
The failure of any such systems, whether internal or third-party, could disrupt our operations by causing transaction errors, processing inefficiencies, delays or cancellation of customer orders, the loss of customers, impediments to the manufacture or shipment of products, other financial and business disruptions, employee relations issues, the 22 loss of or damage to intellectual property and the unauthorized disclosure or compromise of personal data of consumers and employees or of commercially sensitive information.
Risk Factors in this Annual Report on Form 10-K. Uncertainty about future economic and industry conditions also makes it more challenging for us to forecast our operating results, make business decisions, and identify and prioritize the risks that may affect our businesses, sources and uses of cash, financial condition and results of operations.
Risk Factors in this Annual Report on Form 10-K. Uncertainty about future economic and industry conditions also makes it more challenging for us to forecast our operating results, make business decisions, and identify and prioritize the risks that may adversely affect our businesses, sources and uses of cash, financial condition and results of operations.
Local business practices in these countries may not comply with U.S. laws, local laws or other laws applicable to us or our compliance policies, and non-compliant practices may result in 19 increased liability risks. For example, we may incur unanticipated costs, expenses or other liabilities as a result of an acquisition target's violation of applicable laws, such as the U.S.
Local business practices in these countries may not comply with U.S. laws, local laws or other laws applicable to us or our compliance policies, and non-compliant practices may result in increased liability risks. For example, we may incur unanticipated costs, expenses or other liabilities as a result of an acquisition target's violation of applicable laws, such as the U.S.
Additionally, any failure in our procedures to monitor climate related regulatory and policy changes in the jurisdictions in which we operate or in our processes and tools to track our greenhouse gas emissions and assess both operational and financial impacts of climate-related regulations, and any failure to comply with any such regulations and policies, could subject us to additional costs and penalties and harm to our reputation.
Additionally, any failure in our procedures to monitor climate-related regulatory and policy changes in the jurisdictions in which we operate or in our processes and tools to track our greenhouse gas emissions and assess both operational and financial impacts of climate-related regulations, and any failure to comply with any such regulations and policies, could subject us to additional costs and 29 penalties and harm to our reputation.
Risk Factors in this Annual Report on Form 10-K, any of which could have a material adverse effect on our financial statements. We face risks associated with our presence in emerging markets. Our growth plans include efforts to increase revenue from emerging markets, including through acquisitions.
Risk Factors in this Annual Report on Form 10-K, any of which could have a material adverse effect on our financial statements. 20 We face risks associated with our presence in emerging markets. Our growth plans include efforts to increase revenue from emerging markets, including through acquisitions.
If we do not timely and appropriately adapt to changes resulting from the uncertain macroeconomic environment and industry conditions, or to difficulties in the financial markets, or if we are unable to continue to access the capital markets, our financial statements may be materially and adversely affected. ITEM 1B. UNRESOLVED STAFF COMMENTS None.
If we do not timely and appropriately adapt to changes resulting from the uncertain macroeconomic environment and industry conditions, or to difficulties in the financial markets, or if we are unable to continue to access the capital markets, our financial statements may be materially and adversely affected. 30 ITEM 1B. UNRESOLVED STAFF COMMENTS None.
In addition, our recent acquisitions have and future acquisitions may increase our exposure to other risks associated with operating internationally, including foreign currency exchange rate fluctuations; political, legal and economic instability; inflation; changes in tax rates and tax laws; and work stoppages and labor relations, in addition to other risks elsewhere in Item 1A.
In addition, our recent acquisitions have and future acquisitions may increase our exposure to other risks associated with operating internationally, including foreign currency exchange rate fluctuations; political, legal and economic instability; inflation; changes in tax rates and tax laws; and work stoppages and labor relations, in addition to other risks discussed elsewhere in Item 1A.
Our competitors, especially global competitors with low-cost sources of supply, vertically integrated business models and/or highly protected home countries outside the United States, have aggressively priced their products and/or introduced new products to increase 15 market share and expand into new geographies.
Our competitors, especially global competitors with low-cost sources of supply, vertically integrated business models and/or highly protected home countries outside the United States, have aggressively priced their products and/or introduced new products to increase market share and expand into new geographies.
The loss or substantial decline in volume of sales to our key trade customers, major buying groups, builders, or any other trade customers to which we sell a significant amount of products, has and in the future could adversely affect our financial performance.
The loss or substantial decline in volume of sales to our key trade customers, major buying groups, builders, or any other trade customers to which we sell a significant amount of products, has adversely affected and in the future could adversely affect our financial performance.
We maintain product liability insurance, but it may not be adequate to cover losses related to product liability claims brought against us. Product liability insurance could become more expensive and difficult to maintain and may not be available on commercially reasonable terms, if at all.
We maintain product liability insurance, but it may not be adequate to cover losses related to product liability claims brought against us. Product liability insurance could become more expensive and difficult to maintain or may not be available on commercially reasonable terms, if at all.
We are or may in the future become subject to a variety of litigation and legal compliance risks relating to, among other things: products; intellectual property rights; income and indirect taxes; environmental matters (including matters related to climate change); corporate matters; commercial matters; credit matters; competition laws; distribution, marketing and trade practice matters; customs and duties; occupational health and safety (including matters related to the COVID-19 pandemic), industrial accidents, anti–bribery and anti–corruption regulations; energy regulations; data privacy regulations; financial and securities regulations; and employment and benefit matters.
We are or may in the future become subject to a variety of litigation and legal compliance risks relating to, among other things: products; intellectual property rights; income and indirect taxes; environmental matters (including matters related to climate change); corporate matters; commercial 26 matters; credit matters; competition laws; distribution, marketing and trade practice matters; customs and duties; occupational health and safety (including matters related to the COVID-19 pandemic), industrial accidents, anti–bribery and anti–corruption regulations; energy regulations; data privacy and cybersecurity regulations; financial and securities regulations; and employment and benefit matters.
In addition, because our consolidated financial results are reported in U.S. dollars, as we generate sales or earnings in other currencies, 23 the translation of those results into U.S. dollars can result in a significant increase or decrease in the amount of those sales or earnings.
In addition, because our consolidated financial results are reported in U.S. dollars, as we generate sales or earnings in other currencies, the translation of those results into U.S. dollars can result in a significant increase or decrease in the amount of those sales or earnings.
These alternatives have not always been and in the future may not be available on short notice and have and in the future could result in higher transit costs and stock availability, which could have an adverse impact on our business and financial statements.
These alternatives have not always been and in the future may not be available on short notice and have in the past and in the future could result in higher transit costs and stock availability, which could have an adverse impact on our business and financial statements.
If inflation increases costs beyond our ability to control, we may not be able to adjust prices or use our portfolio strategy to sufficiently offset the effect without negatively 28 impacting consumer demand or our gross margin.
If inflation increases costs beyond our ability to control, we may not be able to adjust prices or use our portfolio strategy to sufficiently offset the effect without negatively impacting consumer demand or our gross margin.
Words that identify forward-looking statements include words such as "may," "could," "will," "should," "possible," "plan," "predict," "forecast," "potential," "anticipate," "estimate," "expect," "project," "intend," "believe," "may impact," "on track," “guarantee”, “seek” and the negative of these words and words and terms of similar substance used in connection with any discussion of future operating or financial performance, an acquisition or merger, or our businesses.
Words that identify forward-looking statements include words such as "may," "could," "will," "should," "possible," "plan," "predict," "forecast," "potential," "anticipate," "determine," "estimate," "expect," "project," "intend," "believe," "may impact," "on track," "may affect," “guarantee”, “seek” and the negative of these words and words and terms of similar substance used in connection with any discussion of future operating or financial performance, an acquisition or merger, or our businesses.
We write down product and component inventories that have become obsolete or do not meet anticipated demand or net realizable value. No assurance can be given that, given the unpredictable pace of product obsolescence and business conditions with trade customers and in general, we will not incur additional inventory related charges. Such charges could negatively affect our financial statements.
We write down product and component inventories that have become obsolete or do not meet anticipated demand or net realizable value. No assurance can be given that, given the unpredictable pace of product obsolescence and business conditions with trade customers and in general, we will not incur additional inventory related charges. Such charges could adversely affect our financial statements.
As has occurred in the past, if we are unable to meet their demand requirements, our volume growth and financial results could be negatively affected. We also continue to pursue direct-to-consumer sales globally, including the launch of direct-to-consumer sales on most of our brand websites in recent years, which may impact our relationships with existing trade customers.
As has occurred in the past, if we are unable to meet their demand requirements, our volume growth and financial results could be adversely affected. We also continue to pursue direct-to-consumer sales globally, including the launch of direct-to-consumer sales on most of our brand websites in recent years, which may impact our relationships with existing trade customers.
Among these are the risk that our more efficient product offerings are not competitive in terms of price or consumer perception; the risk that our upstream suppliers are unable to deliver lower emissions sources of supply that are cost and quality-competitive; the risk that we fail to continually innovate to develop products and manufacturing processes with a lower carbon footprint; and, specific to our recycled plastics initiative (a pledge in our EMEA region to use an average 18% recycled plastic content by 2025), the risk that we fail to develop solutions to incorporate reformulated plastics materials that meet our rigorous quality and safety standards.
Among these are the risk that our more efficient product offerings are not competitive in terms of price or consumer perception; the risk that our upstream suppliers are unable to deliver lower emissions sources of supply that are cost and quality-competitive; the risk that we fail to continually innovate to develop products and manufacturing processes with a lower carbon footprint; and, specific to our recycled plastics initiative (a pledge in EMEA to use an average 30% recycled plastic content by 2025), the risk that we fail to develop solutions to incorporate reformulated plastics materials that meet our rigorous quality and safety standards.
For example, we agreed to retain certain liabilities relating to Embraco antitrust, tax, environmental, labor and products in connection with the Embraco sale.
For example, we agreed to retain certain liabilities relating to Embraco antitrust, tax, environmental, labor and products in connection with the Embraco sale in 2019.
The impact of the conflict in Ukraine and resulting sanctions and export controls, include, but are not limited to, macro financial impacts resulting from the exclusion of Russian financial institutions from the global banking system; operational risks, including potential logistics, sales, distribution, and energy related challenges; and reductions in consumer and trade customer demand.
The impact of the conflict between Russia and Ukraine and resulting sanctions and export controls, include, but are not limited to, macro financial impacts resulting from the exclusion of Russian financial institutions from the global banking system; operational risks, including potential logistics, sales, distribution, and energy related challenges; and reductions in consumer and trade customer demand.
Compliance with these regulations may be require us to, among other things, change our manufacturing processes or product offerings, or undertake other costly activities.
Compliance with these regulations may require us to, among other things, change our manufacturing processes or product offerings, or undertake other costly activities.
For example, the European Union’s General Data Protection Regulation, the California Consumer Privacy Act and the Brazilian General Data Protection Law, and various other privacy and data protection laws that have been passed or are pending in other countries collectively impose or will impose new regulatory data privacy and protection standards for which we must comply.
For example, the European Union’s General Data Protection Regulation, the California Consumer Privacy Act and the Brazilian General Data Protection Law, and various other privacy and data protection laws that have been passed or are pending in other states and countries collectively impose or will impose new regulatory data privacy and protection standards with which we must comply.
A number of economic factors, including the impact of the COVID-19 pandemic, gross domestic product, availability of consumer credit, interest rates, consumer sentiment and debt levels, retail trends, housing starts, sales of existing homes, the level of mortgage refinancing and defaults, fiscal and credit market uncertainty, and foreign currency exchange rates, currency controls, inflation and deflation, generally affect demand for our products in the U.S. and other countries which we operate.
A number of economic factors, including the impact of gross domestic product, availability of consumer credit, interest rates, consumer sentiment and debt levels, retail trends, housing starts, sales of existing homes, the level of mortgage refinancing and defaults, fiscal and credit market uncertainty, and foreign currency exchange rates, currency controls, inflation and deflation, generally affect demand for our products in the U.S. and other countries which we operate.
Additionally, the loss of market share or financial difficulties, including bankruptcy and financial restructuring, by these trade customers could have a material adverse effect on our financial statements. Failure to maintain our reputation and brand image could negatively impact our business.
Additionally, the loss of market share or financial difficulties, including bankruptcy and financial restructuring, by these trade customers could have a material adverse effect on our financial statements. Failure to maintain our reputation and brand image could adversely impact our business.
For example, we expect to continue to be impacted by supply chain issues, due to factors largely beyond our control: a global shortage of certain components, such as semiconductors, a strain on raw material and input cost inflation, all of which began easing towards the end of 2022, but could escalate again in future quarters.
For example, we expect to continue to be impacted by supply chain issues, due to factors largely beyond our control: a global shortage of certain components, such as select semiconductors, a strain on raw materials and input cost inflation, all of which began easing towards the end of 2022, but could escalate again in future quarters.
Foreign Corrupt Practices Act (FCPA) or similar worldwide anti-bribery laws in non-U.S. jurisdictions. We may incur unanticipated costs or expenses, including post-closing asset impairment charges, expenses associated with eliminating duplicate facilities, litigation, and other liabilities. For example, we incurred significant impairment and restructuring expenses in the years following our acquisition of Indesit in 2014.
Foreign Corrupt Practices Act (FCPA), the U.K. Bribery Act, and/or similar anti-bribery/anti-corruption laws in non-U.S. jurisdictions. We may incur unanticipated costs or expenses, including post-closing asset impairment charges, expenses associated with eliminating duplicate facilities, litigation, and other liabilities. For example, we incurred significant impairment and restructuring expenses in the years following our acquisition of Indesit in 2014.
While our evaluation of any potential transaction includes business, legal and financial due diligence with the goal of identifying and evaluating the material risks involved, our due diligence reviews have not always in the past and may not always in the future identify all of the issues necessary to accurately estimate the cost and potential loss contingencies of a particular transaction, including potential exposure to regulatory sanctions resulting from an acquisition target's previous activities, costs associated with any quality issues with an acquisition target's legacy products or difficulties and costs associated with obtaining necessary regulatory approvals.
While our evaluation of any potential transaction includes business, legal, regulatory and financial due diligence with the goal of identifying and evaluating the material risks involved, our due diligence reviews have not always or consistently identified and may not always or consistently in the future identify all of the issues necessary to accurately estimate the cost, time and potential loss contingencies of a particular transaction, including potential exposure to regulatory sanctions resulting from an acquisition target's previous activities, costs associated with any quality issues with an acquisition target's legacy products or difficulties and costs associated with obtaining necessary regulatory approvals.
We have set rigorous science-based targets for greenhouse gas reductions and related sustainability goals, including a net zero emissions target in our plants and operations that was announced in 2021.
We have set rigorous targets for greenhouse gas reductions and related sustainability goals, including a net zero emissions target in our plants and operations that was announced in 2021.
In addition, an inability to provide high-quality, innovative products could adversely affect our ability 16 to maintain or increase our sales, which could negatively affect our revenues and overall financial performance. Our ability to understand consumers’ preferences and to timely identify, develop, manufacture, market, and sell products that meet customer demand could significantly affect our business.
In addition, an inability to provide high-quality, innovative products could adversely affect our ability to maintain or increase our sales, which could negatively affect our revenues and overall financial performance. 17 An inability to understand consumers’ preferences and to timely identify, develop, manufacture, market, and sell products that meet customer demand could adversely affect our business.
Many of our most significant competitors are global companies, and in an escalating global trade conflict or the imposition of tariffs, their respective governments may impose regulations that are favorable to our competitors. The U.S. federal government may propose additional changes to international trade agreements, tariffs, taxes, and other government rules and regulations.
Many of our most significant competitors are global companies, and in an escalating global trade conflict or the imposition of tariffs, sanctions or other trade restrictions their respective governments may impose regulations or policies that are favorable to our competitors. The U.S. federal government may propose additional changes to international trade agreements, tariffs, taxes, and other government rules and regulations.
We continue to closely monitor the impact of the ongoing conflict in Ukraine on all aspects of our operations, including most importantly, the safety and security of our employees in the region.
We continue to closely monitor the impact of the ongoing conflict between Russia and Ukraine on all aspects of our operations, including most importantly, the safety and security of our employees in the region.
Risk Factors in this Annual Report on Form 10-K. Risks associated with our international operations may decrease our revenues and increase our costs. For the year ended December 31, 2022, sales outside our North America region represented approximately 42% of our net sales. We expect that international sales will continue to account for a significant percentage of our net sales.
Risk Factors in this Annual Report on Form 10-K. Risks associated with our international operations may decrease our revenues and increase our costs. For the year ended December 31, 2023, sales outside our North America region represented approximately 41% of our net sales. We expect that international sales will continue to account for a significant percentage of our net sales.
We have listed below what we believe to be the most significant strategic, operational, financial, legal and compliance, and general risks relating to our business. STRATEGIC RISKS We face intense competition in the major home appliance industry and failure to successfully compete could negatively affect our business and financial performance.
We have listed below what we believe to be the most significant strategic, operational, financial, legal and compliance, and general risks relating to our business. STRATEGIC RISKS We face intense competition in the home appliance industry and failure to successfully compete could adversely affect our business and financial performance.
Economic uncertainty and related factors, including a potential recession or recession, may exacerbate negative trends in business and consumer spending and has caused and may cause certain customers to push out, cancel, or refrain from placing orders for our products.
Economic uncertainty and related factors, including a potential recession, may exacerbate negative trends in business and consumer spending and has caused in the past and may cause in the future certain customers to push out, cancel, or refrain from placing orders for our products.
Terrorist attacks, cyber events, armed conflicts (including the war in Ukraine discussed elsewhere in Risk Factors), civil unrest, espionage, natural disasters, governmental actions, epidemics and pandemics (including the impacts of COVID-19 discussed elsewhere in Risk Factors) have and could affect our domestic and international sales, disrupt our supply chain, and impair our ability to produce and deliver our products.
Terrorist attacks, cyber events, armed conflicts (including the war in Ukraine discussed elsewhere in Risk Factors and other global conflicts), bank failures, civil unrest, espionage, natural disasters, governmental actions, epidemics and pandemics (including the impacts of COVID-19 discussed elsewhere in Risk Factors) have and could affect our domestic and international sales, disrupt our supply chain, and impair our ability to produce and deliver our products.
Many of our competitors have established and may expand their presence in the rapidly changing retail environment, including the shifting of consumer purchasing practices towards e-commerce and other channels, and the increasing global prevalence of direct-to-consumer sales models.
Many of our competitors have established and may expand their presence in the rapidly changing retail environment, including the continued shift of consumer purchasing practices towards e-commerce and other channels, and the increasing global prevalence of direct-to-consumer sales models.
Our ability to access liquidity or borrow to invest in our businesses, fund strategic acquisitions and refinance maturing debt obligations depends in part on access to the capital markets. For example, the United States Federal Reserve began raising its benchmark rate in March 2022, increasing the rate by a total of 3.75% since the start of 2022.
Our ability to access liquidity or borrow to invest in our businesses, fund strategic acquisitions and refinance maturing debt obligations depends in part on access to the capital markets. For example, the United States Federal Reserve began raising its benchmark rate in March 2022, increasing the rate by a total of 5.25% since the start of 2022.
These regulatory changes could significantly impact our business and financial performance. For additional information about our consolidated tax provision, see Note 15 to the Consolidated Financial Statements. The impact of climate change and climate change or other environmental regulation may adversely impact our business.
These regulatory or policy changes could significantly impact our business and financial performance. For additional information about our consolidated tax provision, see Note 13 to the Consolidated Financial Statements. The impact of climate change and climate change or other environmental regulation may adversely impact our business.
Uncertain market conditions, difficulties in obtaining capital, or reduced profitability has caused and may cause some customers to scale back operations, exit markets, merge with other retailers, or file for bankruptcy protection and potentially cease operations, which can also result in lower sales and/or additional inventory.
Uncertain market conditions, inflation, increases in interest rates, difficulties in obtaining capital, or reduced profitability has caused and may cause some customers to scale back operations, exit markets, merge with other retailers, or file for bankruptcy protection and potentially cease operations, which can also result in lower sales and/or additional inventory.
We also face competition that may be able to quickly adapt to changing consumer preferences, particularly in the connected appliance space, or may be able to adapt more quickly to changes brought about by the global pandemic, supply chain constraints, inflationary pressures, currency fluctuations, geopolitical uncertainty, increased interest rates or other factors.
We also face competition that may be able to quickly adapt to changing consumer preferences, particularly in the connected appliance space, or may be able to adapt more quickly to changes brought about by supply chain constraints, inflationary pressures, currency fluctuations, geopolitical uncertainty, epidemics or pandemics, increased interest rates or other factors.
Significant increases in materials cost and availability and other costs now and in the future could have a material adverse effect on our financial statements. As an example, in recent years the company has experienced and expects to continue to experience significant levels of commodity, logistics and wage inflation across our businesses.
Significant increases in materials cost and availability and other costs now and in the future could have a material adverse effect on our financial statements. As an example, in recent years the company has experienced and may in the future experience significant levels of commodity, logistics and wage inflation across our businesses.
A deterioration in labor relations could adversely impact our global business. As of December 31, 2022, we had approximately 61,000 employees globally. We are subject to separate collective bargaining agreements with certain labor unions, as well as various other commitments regarding our workforce.
A deterioration in labor relations could adversely impact our global business. As of December 31, 2023, we had approximately 59,000 employees globally. We are subject to separate collective bargaining agreements with certain labor unions, as well as various other commitments regarding our workforce.
As of December 31, 2022, our projected benefit obligations under our pension plans and postretirement health and welfare benefit programs exceeded the fair value of plan assets by an aggregate of approximately $0.4 billion , including $0.3 billion of which was attributable to pension plans and $0.1 billion of which was attributable to postretirement health care benefits.
As of December 31, 2023, our projected benefit obligations under our pension plans and postretirement health and welfare benefit programs exceeded the fair value of plan assets by an aggregate of approximately $0.3 billion, including $0.2 billion of which was attributable to pension plans and $0.1 billion of which was attributable to postretirement health care benefits.
We may also experience potential additional impacts in the future. We have not determined the extent to which our existing insurance coverage will respond to these impacts, or the extent to which any of the United States, European Union or other government actions may mitigate these impacts, if at all.
We may also experience potential additional impacts in the future. We have not determined the extent to which any of the United States, European Union or other government actions may mitigate these impacts, if at all. Moreover, our insurance coverage may not respond to many of these impacts.
While we strive to attract, develop and retain these individuals through execution of our human capital strategy (see “Human Capital Management” in Item 1), we cannot be sure that any of these individuals will continue to be employed by us. In the case of talent losses, significant time is required to hire, develop and train skilled replacement personnel.
While we strive to attract, develop and retain these individuals through execution of our human capital strategy, we cannot be sure that any of these individuals will continue to be employed by us. In the case of talent losses, significant time is required to hire, develop and train skilled replacement personnel.
Our success is dependent on anticipating and appropriately reacting to changes in consumer preferences, including the shifting of consumer purchasing practices towards e-commerce, direct-to-consumer and other channels, and on successful new product development, including in the eco-efficiency space, the connected appliance space and the digital space (for example, our Yummly recipe app), and process development and product relaunches in response to such changes.
Our success is dependent on anticipating and appropriately reacting to changes in consumer preferences, including the shifting of consumer purchasing practices towards e-commerce, direct-to-consumer and other channels, and on successful new product development, including in the eco-efficiency space, the connected appliance space and the digital space, and process development and product relaunches in response to such changes.
We may be involved in class action litigation or product recalls for which we generally have not purchased insurance, and may be involved in other litigation or events for which insurance products may have limitations. We regularly engage in investigations of potential quality and safety issues as part of our ongoing effort to deliver quality products to our customers.
We are now and may in the future be involved in class action litigation and may be involved in product recalls for which we generally have not purchased insurance, and may be involved in other litigation or events for which insurance products may have limitations. 23 We regularly engage in investigations of potential quality and safety issues as part of our ongoing effort to deliver quality products to our customers.
For example, various municipal, state, and federal regulators have discussed, proposed, or enacted new regulations or bans on appliances that utilize natural gas citing climate change and other regulatory concerns, which would impose transition costs and impact our product mix and product offerings, among other impacts.
In addition, various municipal, state, and federal regulators have discussed, proposed, or enacted new regulations or bans on appliances that utilize natural gas citing climate change and other concerns, which would impose transition costs and impact our product mix and product offerings, among other impacts.
The results of these tests for potential impairment may be adversely affected by unfavorable market conditions, our financial performance trends, or an increase in interest rates, among other factors.
The results of these tests for potential impairment have in the past and may in the future be adversely affected by unfavorable market conditions, our financial performance trends, or an increase in interest rates, among other factors.
For example, we are currently disputing certain income and indirect tax related assessments issued by the Brazilian authorities (see Note 8 and Note 15); and we are disputing certain income and indirect tax assessments in various legal proceedings in Italy, India and other jurisdictions globally.
For example, we are currently disputing certain income and indirect tax related assessments issued by the Brazilian authorities; and we are disputing certain income and indirect tax assessments in various legal proceedings in Italy, India and other jurisdictions globally.
The lack of availability of any parts, components or equipment has and could result in production delays and sales disruptions, as well as our ability to fulfil contractual obligations. Unexpected disruption risks as such can not be completely eliminated due to our reliance on suppliers’ performance to consistently build and ship products to customers.
The lack of availability of any parts, components or equipment has resulted and could in the future result in production delays and sales disruptions, as well as our ability to fulfill contractual obligations. Unexpected disruption risks as such cannot be completely eliminated due to our reliance on suppliers’ performance to consistently build and ship products to customers.
A shortage of key employees can jeopardize the Company’s ability to implement its business objectives, and changes in key executives can result in loss of continuity, loss of accumulated knowledge, departures of other key employees, disruptions to our operations and inefficiency during transition periods.
A shortage of key employees can jeopardize our ability to implement our business objectives, and changes in key executives can result in loss of continuity, loss of accumulated knowledge, departures of other key employees, disruptions to our operations and inefficiencies during transition periods.
These 18 issues have and could delay importation and increase the cost of products and/or components or require us to locate alternative providers to avoid disruption to customers.
These issues have delayed and could in the future delay importation and increase the cost of products and/or components or require us to locate alternative providers to avoid disruption to customers.
Any significant supply chain disruption for the reasons stated above or otherwise could have a material adverse impact on our financial statements. Our financial condition and results of operations have been impacted and may in the future be adversely affected by the ongoing COVID-19 pandemic.
Any significant supply chain disruption for the reasons stated above or otherwise could have a material adverse impact on our financial statements. Our financial condition and results of operations have been impacted by the COVID-19 pandemic and may in the future be adversely affected by other public health emergencies, epidemics or pandemics.
Additionally, as a global company headquartered in the United States, we are exposed to the impact of U.S. and global tax changes, especially those that affect the effective corporate income tax rate.
Additionally, as a global company headquartered in the United States, we are exposed to the impact of U.S. and global tax changes, especially those that affect our effective corporate income tax rate and various non-income taxes that impact our business operations.
If our suppliers are unable to effectively recover parts and components and we are unable to effectively manage the impacts of price inflation and timely convert our backlog, our results of operations, financial condition and cash flows could materially and adversely be affected.
If our suppliers are unable to effectively recover parts and components and we are unable to effectively manage the impacts of price inflation and timely convert our backlog, our financial statements could materially and adversely be affected.
During the fourth quarter of 2022, we also classified our 17 European major domestic appliance business as held for sale, and signed an agreement in January 2023 to contribute our European major domestic appliance business to a newly formed entity with Arcelik.
During the fourth quarter of 2022, we also classified our European major domestic appliance business as held for sale, and signed an agreement in January 2023 to contribute our European major domestic appliance business to a newly formed entity with Arcelik, which transaction we expect to complete by April 2024.
Our information systems, or those of our third-party service providers, have been in the past and could be in the future impacted by malicious activity of threat actors intent on extracting or corrupting information or disrupting business processes, or by unintentional data-compromising activities by our employees or service providers. 21 Such unauthorized access has in the past and could in the future disrupt our business and result in the loss of assets.
Our information systems, or those of our third-party service providers, have been in the past and could be in the future impacted by malicious activity of threat actors intent on extracting or corrupting information or disrupting business processes, or by unintentional data-compromising activities by our employees or service providers.
The effects of climate change, whether involving physical risks or transition risks, could have an impact on our business and have in the past and could in the future cause us to incur capital and other expenditures to comply with various laws and regulations, especially relating to the protection of the environment, human health and safety, and water and energy efficiency, and may also exacerbate other risks discussed elsewhere in Item 1A.
The effects of climate change, whether involving physical risks (such as extreme weather events, long-term changes in temperature levels, water availability and risk sea levels) or transition risks, could have an impact on our business and have in the past and could in the future impact our business and cause us to incur capital and other expenditures to comply with various laws and regulations, especially relating to the protection of the environment, human health and safety, and water and energy efficiency, and may also exacerbate other risks discussed elsewhere in Item 1A.
Any failure to achieve our sustainability goals or reduce our impact on the environment, any changes in the scientific or governmental metrics utilized to objectively measure success, or the perception that we have failed to act responsibly regarding climate change could result in negative publicity and adversely affect our reputation as well as our relationships with customers, investors and other stakeholders, which could in turn adversely affect our business operations, reputation, including a reduction in customer and consumer sentiment and negatively impact our financial 27 condition, including our access to capital and cost of debt.
Whether as a result of cost, operational or technological limitations, or if such targets or our progress against them are not perceived to be sufficiently robust, any failure to achieve our sustainability goals or reduce our impact on the environment, any changes in the scientific or governmental metrics utilized to objectively measure success, or the perception that we have failed to act responsibly regarding climate change could result in negative publicity and adversely affect our reputation as well as our relationships with customers, investors and other stakeholders, which could in turn adversely affect our business operations, reputation, including a reduction in customer and consumer sentiment and negatively impact our financial condition, including our access to capital and cost of debt.
Our failure to obtain protection for or adequately protect our trademarks, products, new features of our products, or our processes may diminish our competitiveness. We have applied for intellectual property protection in the United States and other jurisdictions with respect to certain innovations and new products, design patents, product features, and processes. We cannot be assured that the U.S.
Our failure to secure and maintain protection for or adequately protect our trademarks, products, new features of our products, or our processes may diminish our competitiveness. We have applied for intellectual property protection in the United States and other key jurisdictions with respect to certain innovations and new products, design patents, product features, and processes.
Additionally, any suspicion or determination that we have violated the FCPA or other anti-corruption laws could have a material adverse effect on us. 20 On August 31, 2022, we completed the sale of our Russian business to Arcelik and recorded a loss on disposal.
Bribery Act, or other anti-bribery and/or anti-corruption laws could have a material adverse effect on us. On August 31, 2022, we completed the sale of our Russian business to Arcelik and recorded a loss on disposal.
In addition, the current domestic and international political environment, including government shutdowns and changes to U.S. policies related to global trade and tariffs, has resulted in uncertainty surrounding the future state of the global economy.
In addition, the current domestic and international political environment, including government shutdowns and changes to trade laws, regulations and policies, including tariffs, sanctions, and import/export controls, has resulted in uncertainty surrounding the future state of the global economy.
In addition, our global restructuring activities have in the past and may in the future be received negatively by governments and unions and attract negative media attention, which may delay the implementation of such plans. A deterioration in labor relations may have a material adverse effect on our financial statements.
In addition, our global restructuring activities have in the past and may in the future be received negatively by governments and unions and attract negative media attention, which may delay the implementation of such plans.
Significant differences between actual results and estimates of the amount of future funding for our pension plans and postretirement health care benefit programs, and significant changes in funding assumptions or significant increases in funding obligations due to regulatory changes, could adversely affect our financial results. 24 We have both funded and unfunded defined benefit pension plans that cover certain employees around the world.
Significant differences between actual results and estimates of the amount of future funding for our pension plans and postretirement health care benefit programs, and significant changes in funding assumptions or significant increases in funding obligations due to regulatory changes, could adversely affect our financial results.
These expanding privacy and data protection laws may affect our collection, processing, and cross-border transfer of consumer information and other personal data, such as in connection with our growth in the areas of direct-to-consumer sales, Internet of Things, and the digital space. Some of the laws allow for significant fines, reaching several percentage points of global corporate revenues or more.
These expanding privacy and data protection laws may affect our collection, processing, and cross-border transfer of consumer information and other personal data, such as in connection with our growth in the areas of direct-to-consumer sales, Internet of Things, and the digital space.
We have encountered and may encounter difficulties in integrating acquisitions with our operations, undertaking post-acquisition restructuring activities, applying our internal control processes to these acquisitions, managing strategic investments, and in overseeing the operations, systems and controls of acquired companies. Integrating acquisitions and carving out divestitures is often costly, may be dilutive to earnings and may require significant attention from management.
We have encountered and may encounter difficulties in integrating acquisitions with our operations, undertaking post-acquisition restructuring activities, applying our internal control processes to these acquisitions, managing strategic investments, and in overseeing the operations, systems, and controls of acquired companies.
Patent and Trademark Office or any similar authority in other jurisdictions will approve any of our patent applications. Additionally, the patents we own could be challenged or invalidated, others could design around our patents or the patents may not be of sufficient scope or strength to provide us with any meaningful protection or commercial advantage.
Additionally, the patents we own could be challenged or invalidated, others could design around our patents or the patents may not be of sufficient scope or strength to provide us with any meaningful protection or commercial advantage.
Our operations and those of our suppliers are subject to disruption for a variety of unexpected reasons, including, but not limited to, COVID-19-related disruptions, sudden changes in business conditions, supplier plant shutdowns or slowdowns, transportation delays due to port delays or any disruption on the supply chain, work stoppages, labor shortages, labor relations, global geopolitical instability, price inflation, governmental regulatory and enforcement actions, intellectual property claims against suppliers, disputes with suppliers, distributors or transportation providers, financial issues such as supplier bankruptcy, information technology failures, hazards such as fire, earthquakes, flooding, or other natural disasters, including due to climate change, and increased homeland security requirements in the U.S. and other countries.
We would be unable to obtain these proprietary components for an indeterminate period of time if these single-source suppliers were to cease or interrupt production or otherwise fail to supply these components to us as agreed, which could adversely affect our product sales and operating results. 19 Our operations and those of our suppliers are subject to disruption for a variety of unexpected reasons, including, but not limited to, sudden changes in business conditions, supplier plant shutdowns or slowdowns, transportation delays due to port delays or any disruption on the supply chain, work stoppages, epidemics and pandemics, labor shortages, labor relations, global geopolitical instability, price inflation, governmental regulatory and enforcement actions, intellectual property claims against suppliers, disputes with suppliers, distributors or transportation providers, financial issues such as supplier bankruptcy, information technology failures, hazards such as fire, earthquakes, flooding, or other natural disasters, including due to climate change, and increased homeland security requirements in the U.S. and other countries.
In the fourth quarter of 2022, and in connection with the planned divestiture of our European major domestic appliance business, the remaining carrying value of $255 million for the EMEA trademarks was classified as held for sale. We did not record any impairment charges for the year ended December 31, 2021.
In the fourth quarter of 2022, and in connection with the planned divestiture of our European major domestic appliance business, the remaining carrying value of $255 million for the EMEA trademarks 25 was classified as held for sale.
We do not expect the Act to have a material impact on our effective tax rate; however, it is possible that the U.S. or another jurisdiction could enact tax legislation in the future that could have a material impact on our tax rate.
It is possible that the U.S. or another jurisdiction could enact tax legislation in the future that could have a material impact on our tax rate, our operations or both.
Most of our products are not sold through long-term contracts, allowing trade customers to change volume among suppliers like us. As the trade customers continue to become larger through merger, consolidation or organic growth, they may seek and have sought to use their position to improve their profitability by various means, including improved efficiency, lower pricing, and increased promotional programs.
As the trade customers continue to become larger through merger, consolidation or organic growth, they have sought and may seek to use their position to improve their profitability by various means, including improved efficiency, lower pricing, and increased promotional programs.
Changes in the legal and regulatory environment, including data privacy and protection, and changes in taxes and tariffs, could limit our business activities, increase our operating costs, reduce demand for our products or result in litigation or regulatory action.
Changes in the legal and regulatory environment, including data privacy and protection, corporate governance and securities disclosure, and changes to tax and foreign trade laws, regulations and policy, could limit our business activities, increase our operating costs, reduce demand for our products or result in litigation or regulatory action.
These laws and regulations may change, sometimes dramatically, as a result of political, economic or social events. Changes in laws, regulations or governmental policy and the related interpretations may alter the environment in which we do business and may impact our results or increase our costs or liabilities.
Changes in laws, regulations or governmental policy and the related interpretations may alter the environment in which we do business and may impact our results or increase our costs or liabilities.
In addition, any claim, product recall or other corrective action that results in significant adverse publicity, particularly if those claims or recalls cause customers to question the safety or reliability of our products, may negatively affect our financial statements. For example, we have undertaken corrective action initiatives in EMEA related to certain legacy Indesit-designed washer and Indesit-produced dryers.
In addition, any claim, product recall or other corrective action that results in significant adverse publicity, particularly if those claims or recalls cause customers to question the safety or reliability of our products, may adversely affect our financial statements.
The Organization for Economic Co-operation and Development (the “OECD”) is currently working on the base erosion and profit shifting 2.0 project (the “BEPS Project”), which is intended to modernize the international tax system by, among other measures, ensuring that large multinational enterprises pay a minimum level of tax in each of the jurisdictions in which they operate (such minimum tax proposal, “Pillar Two”).
The Organization for Economic Co-operation and Development (the “OECD”) continues to design its base erosion and profit shifting initiatives (the “BEPS”), which is intended to modernize the international tax system by, among other measures, ensuring that large multinational enterprises pay a minimum level of tax in each of the jurisdictions in which they operate.The minimum tax aspects of BEPS, referred to as “Pillar Two”, is scheduled to become effective in 2024.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeOver 43 million square feet of such space was occupied under lease. Whirlpool properties include facilities which are suitable and adequate for the manufacture and distribution of Whirlpool's products. The Company's principal manufacturing locations by operating segment were as follows: Operating Segment North America Europe, Middle East and Africa Latin America Asia Manufacturing Locations 12 9 8 6
Biggest changeOver 44 million square feet of such space was occupied under lease. Whirlpool properties include facilities which are suitable and adequate for the manufacture and distribution of Whirlpool's products. 32 The Company's principal manufacturing locations by operating segment were as follows: Operating Segment North America Europe, Middle East and Africa Latin America Asia Manufacturing Locations 11 9 8 6
ITEM 2. PROPERTIES Our principal executive offices are located in Benton Harbor, Michigan. On December 31, 2022, our principal manufacturing operations were carried on at 35 locations in 10 countries worldwide. We occupied a total of approximately 68 million square feet devoted to manufacturing, service, sales and administrative offices, warehouse and distribution space.
ITEM 2. PROPERTIES Our principal executive offices are located in Benton Harbor, Michigan. On December 31, 2023, our principal manufacturing operations were carried on at 34 locations in 10 countries worldwide. We occupied a total of approximately 66 million square feet devoted to manufacturing, service, sales and administrative offices, warehouse and distribution space.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeDuring the twelve months ended December 31, 2022, we repurchased approximately 4.8 million shares under these share repurchase programs at an aggregate purchase price of approximately $903 million. At December 31, 2022, there were approximately $2.6 billion in remaining funds authorized under this program. Share repurchases are made from time to time on the open market as conditions warrant.
Biggest changeAt December 31, 2023, there were approximately $2.6 billion in remaining funds authorized under these programs. Share repurchases are made from time to time on the open market as conditions warrant. These programs do not obligate us to repurchase any of our shares and they have no expiration date.
The following table summarizes repurchases of Whirlpool's common stock in the three months ended December 31, 2022: Period (Millions of dollars, except number and price per share) Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans October 1, 2022 through October 31, 2022 — $ — — $ 2,587 November 1, 2022 through November 30, 2022 — — — 2,587 December 1, 2022 through December 31, 2022 — — — $ 2,587 Total — $ —
The following table summarizes repurchases of Whirlpool's common stock in the three months ended December 31, 2023: Period (Millions of dollars, except number and price per share) Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans October 1, 2023 through October 31, 2023 — — — $ 2,587 November 1, 2023 through November 30, 2023 — — — 2,587 December 1, 2023 through December 31, 2023 — — — 2,587 Total — —
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Whirlpool's common stock is listed on the New York Stock Exchange and the NYSE Chicago under the ticker symbol WHR. As of February 3, 2023, the number of holders of record of Whirlpool common stock was approximately 7,742.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Whirlpool's common stock is listed on the New York Stock Exchange and the NYSE Chicago under the ticker symbol WHR. As of February 9, 2024, the number of holders of record of Whirlpool common stock was approximately 7,426.
On April 19, 2021, our Board of Directors authorized a share repurchase program of up to $2 billion, which has no expiration date. On February 14, 2022, the Board of Directors authorized an additional $2 billion in share repurchases under the Company's ongoing share repurchase program.
On April 19, 2021, our Board of Directors authorized a share repurchase program of up to $2 billion, which has no expiration date. On February 14, 2022, the Board of Directors authorized an additional $2 billion in share repurchases under the Company's ongoing share repurchase program. We did not repurchase any shares during the twelve months ended December 31, 2023.
Removed
These programs do not obligate us to repurchase any of our shares and they have no expiration date.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeOngoing Earnings Per Diluted Share Reconciliation: Twelve Months Ended December 31, 2022 2021 Earnings per diluted share $ (27.18) $ 28.36 Restructuring expense (a) — 0.61 Impairment of goodwill and other intangibles (b) 7.08 — Impact of M&A transactions (c) 34.63 (1.69) Substantial liquidation of subsidiary (d) 1.51 — (Gain) loss on previously held equity interest (e) — (0.50) Product warranty and liability (income) expense (f) — (0.14) Income tax impact (1.89) 0.41 Normalized tax rate adjustment (i) 5.69 (0.46) Share count adjustment (j) (0.20) — Ongoing earnings per diluted share $ 19.64 $ 26.59 41 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (CONTINUED) 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.
Biggest changeOngoing Earnings Per Diluted Share Reconciliation: Twelve Months Ended December 31, 2023 2022 Earnings per diluted share $ 8.72 $ (27.18) Impairment of goodwill and other intangibles (a) — 7.08 Impact of M&A transactions (b) 3.27 34.63 Legacy EMEA legal matters (c) 1.71 — Substantial liquidation of subsidiary (d) — 1.51 Income tax impact 0.35 (1.89) Normalized tax rate adjustment (e) 2.11 5.69 Share count adjustment (f) — (0.20) Ongoing earnings per diluted share $ 16.16 $ 19.64 Free Cash Flow (FCF) Reconciliation: in millions Twelve Months Ended December 31, 2023 2022 Cash provided by (used in) operating activities $ 915 $ 1,390 Capital expenditures (549) (570) Free cash flow $ 366 $ 820 Cash provided by (used in) investing activities $ (553) $ (3,568) Cash provided by (used in) financing activities $ (792) $ 1,206 44 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (CONTINUED) Footnotes (a) 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.
Impairment of Goodwill and Other Intangibles 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.
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, and Indesit and Hotpoint* trademarks, respectively.
The Company provides free cash flow and adjusted free cash flow related metrics, such as free cash flow and adjusted free cash flow as a percentage of net sales, as long-term management goals, not an element of its annual financial guidance, and as such does not provide a reconciliation of free cash flow and adjusted free cash flow to cash provided by (used in) operating activities, the most directly comparable GAAP measure, for these long-term goal metrics.
The Company provides free cash flow related metrics, such as free cash flow as a percentage of net sales, as long-term management goals, not an element of its annual financial guidance, and as such does not provide a reconciliation of free cash flow and adjusted free cash flow to cash provided by (used in) operating activities, the most directly comparable GAAP measure, for these long-term goal metrics.
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 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 no further testing is required.
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.
See Note 14 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.
NON-GAAP FINANCIAL MEASURES We supplement the reporting of our financial information determined under U.S. generally accepted accounting principles (GAAP) with certain non-GAAP financial measures, some of which we refer to as "ongoing" measures, including: • Earnings before interest and taxes (EBIT) • EBIT margin • Ongoing EBIT • Ongoing earnings per diluted share 39 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (CONTINUED) • Ongoing EBIT margin • Sales excluding foreign currency • Free cash flow • Gross debt leverage Ongoing measures, including ongoing earnings per diluted share and ongoing EBIT, exclude items that may not be indicative of, or are unrelated to, results from our ongoing operations and provide a better baseline for analyzing trends in our underlying businesses.
NON-GAAP FINANCIAL MEASURES We supplement the reporting of our financial information determined under U.S. generally accepted accounting principles (GAAP) with certain non-GAAP financial measures, some of which we refer to as "ongoing" measures, including: • Earnings before interest and taxes (EBIT) 42 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (CONTINUED) • EBIT margin • Ongoing EBIT • Ongoing earnings per diluted share • Ongoing EBIT margin • Sales excluding foreign currency • Free cash flow • Gross debt leverage Ongoing measures, including ongoing earnings per diluted share and ongoing EBIT, exclude items that may not be indicative of, or are unrelated to, results from our ongoing operations and provide a better baseline for analyzing trends in our underlying businesses.
Management believes that free cash flow and adjusted free cash flow provides stockholders with a relevant measure of liquidity and a useful basis for assessing Whirlpool's ability to fund its activities and obligations.
Management believes that free cash flow provides stockholders with a relevant measure of liquidity and a useful basis for assessing Whirlpool's ability to fund its activities and obligations.
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.
For the full-year 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.
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. 40 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (CONTINUED) Please refer to a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures below.
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. 43 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (CONTINUED) Please refer to a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures below.
The table below reconciles projected 2023 cash provided by operating activities determined in accordance with GAAP to free cash flow, a non-GAAP measure. Management believes that free cash flow provides stockholders with a relevant measure of liquidity and a useful basis for assessing Whirlpool's ability to fund its activities and obligations.
The table below reconciles projected 2024 cash provided by operating activities determined in accordance with GAAP to free cash flow, a non-GAAP measure. Management believes that free cash flow provides stockholders with a relevant measure of liquidity and a useful basis for assessing Whirlpool's ability to fund its activities and obligations.
There are limitations to using non-GAAP financial measures, including the difficulty associated with comparing companies that use similarly named non-GAAP measures whose calculations may differ from our calculations. For 2023 we define free cash flow as cash provided by operating activities less capital expenditures.
There are limitations to using non-GAAP financial measures, including the difficulty associated with comparing companies that use similarly named non-GAAP measures whose calculations may differ from our calculations. We define free cash flow as cash provided by operating activities less capital expenditures.
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 decrease 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.
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.
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, 2023.
OTHER MATTERS For additional information regarding certain of our loss contingencies/litigation, see Note 8 to the Consolidated Financial Statements. Unfavorable outcomes in these proceedings could have a material adverse effect on our financial statements in any particular reporting period.
OTHER MATTERS For additional information regarding certain of our loss contingencies/litigation, see Note 7 to the Consolidated Financial Statements. Unfavorable outcomes in these proceedings could have a material adverse effect on our financial statements in any particular reporting period.
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.
Goodwill Valuations In 2023, 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.
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. See Note 17 to the Consolidated Financial Statements for additional information.
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. See Note 15 to the Consolidated Financial Statements for additional information.
Antidumping and Safeguard Petition As previously reported, Whirlpool filed petitions in 2011 and 2015 alleging that Samsung, LG and Electrolux violated U.S. and international trade laws by dumping large residential washers into the U.S.
Antidumping As previously reported, Whirlpool filed petitions in 2011 and 2015 alleging that Samsung, LG and Electrolux violated U.S. and international trade laws by dumping large residential washers into the U.S.
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.
For our annual impairment assessment as of October 1, 2023, 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.
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.
Our pension and other postretirement benefit obligations at December 31, 2023 and preliminary retirement benefit costs for 2024 were prepared using the assumptions that were determined as of December 31, 2023.
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 loss includes a write-down of the net assets of $1.2 billion 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.
These audits can involve complex issues, which may require an extended period of time to resolve and could result in outcomes that are unfavorable to the Company. For additional information about income taxes, see Note 1, Note 8 and Note 15 to the Consolidated Financial Statements.
These audits can involve complex issues, which may require an extended period of time to resolve and could result in outcomes that are unfavorable to the Company. For additional information about income taxes, see Note 1, Note 7 and Note 13 to the Consolidated Financial Statements.
Whirlpool does not provide a non-GAAP reconciliation for its other forward looking long-term value creation and other goals, such as organic net sales, EBIT, and gross debt/Ongoing EBITDA, as such reconciliation would rely on market factors and certain other conditions and assumptions that are outside of the company’s control.
Whirlpool does not provide a non-GAAP reconciliation for its other forward looking long-term value creation and other goals, such as organic net sales, EBIT, and gross debt/Ongoing EBITDA, as such reconciliations related to longer-term metrics would rely on market factors and certain other conditions and assumptions that are outside of the company’s control.
Whirlpool has historically been able to leverage its strong free cash flow generation to fund our operations, pay for any debt servicing costs and allocate capital for reinvestment in our business, funding share repurchases and dividend payments. Our short term potential uses of liquidity include funding our ongoing capital spending, restructuring activities, and returns to shareholders.
Whirlpool has historically been able to leverage its strong free cash flow generation to fund our operations, pay for any debt servicing costs and allocate capital for reinvestment in our business, funding share repurchases and dividend payments. Our short term potential uses of liquidity include funding our ongoing capital and research and development spending, debt repayment, and returns to shareholders.
For additional information regarding non-GAAP financial measures, see the Non-GAAP Financial Measures section of Management's Discussion and Analysis. 2023 Millions of dollars Current Outlook Cash provided by (used in) operating activities (1) ~ $1,400 Capital expenditures ~ (600) Free cash flow ~ $800 (1) Financial guidance on a GAAP basis for cash provided by (used in) financing activities and cash provided by (used in) investing activities has not been provided because in order to prepare any such estimate or projection, the Company would need to rely on market factors and certain other conditions and assumptions that are outside of its control.
For additional information regarding non-GAAP financial measures, see the Non-GAAP Financial Measures section of Management's Discussion and Analysis. 2024 Millions of dollars Current Outlook Cash provided by (used in) operating activities (1) $1,150 - $1,250 Capital expenditures ~ (600) Free cash flow ~$550 - $650 (1) Financial guidance on a GAAP basis for cash provided by (used in) financing activities and cash provided by (used in) investing activities has not been provided because in order to prepare any such estimate or projection, the Company would need to rely on market factors and certain other conditions and assumptions that are outside of its control.
EBIT Summary 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 Summary EBIT margin for 2023 was 6.0% compared to 6.4% for 2022. EBIT margin decreased primarily due to cost inflation, partially offset by higher volume. 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 is calculated by dividing EBIT by net sales. Sales excluding foreign currency is calculated by translating the current period net sales, in functional currency, to U.S. dollars using the prior-year period's exchange rate compared to the prior-year period net sales.
Ongoing EBIT margin and EBIT margin are calculated by dividing ongoing EBIT and EBIT, respectively, by net sales. Sales excluding foreign currency is calculated by translating the current period net sales, in functional currency, to U.S. dollars using the prior-year period's exchange rate compared to the prior-year period net sales.
For additional information on transfers and servicing of financial assets, accounts payable outsourcing and guarantees, see Note 1 and Note 8 to the Consolidated Financial Statements. Share Repurchase Program For additional information about our share repurchase program, see Note 12 to the Consolidated Financial Statements.
For additional information on transfers and servicing of financial assets, accounts payable outsourcing and guarantees, see Note 1 and Note 7 to the Consolidated Financial Statements. Share Repurchase Program For additional information about our share repurchase program, see Note 11 to the Consolidated Financial 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.
Forward-looking statements in this document may include, but are not limited to, statements regarding future financial results, long-term value creation goals, restructuring and resegmentation expectations, productivity, raw material prices and related costs, supply chain, transaction-related closing and synergies expectations, asset impairment, litigation, ESG efforts, debt repayment expectations, and the impact of COVID-19 and the Russia/Ukraine, Israel and Red Sea conflicts on our operations.
The following table summarizes the sensitivity of our December 31, 2022 retirement obligations and 2023 retirement benefit costs of our United States plans to changes in the key assumptions used to determine those results: Estimated increase (decrease) in Millions of dollars Percentage Change 2023 Expense PBO/APBO (1) for 2022 United States Pension Plans Discount rate +/-50bps 1/(1) (89)/97 Expected long-term rate of return on plan assets +/-50bps (12)/12 – United States Other Postretirement Benefit Plan Discount rate +/-50bps 0/0 (3)/4 (1) Projected benefit obligation (PBO) for pension plans and accumulated postretirement benefit obligation (APBO) for other postretirement benefit plans.
The following table summarizes the sensitivity of our December 31, 2023 retirement obligations and 2024 retirement benefit costs of our United States plans to changes in the key assumptions used to determine those results: Estimated increase (decrease) in Millions of dollars Percentage Change 2024 Expense PBO/APBO (1) for 2023 United States Pension Plans Discount rate +/-50bps 1/(1) (84)/91 Expected long-term rate of return on plan assets +/-50bps (11)/11 – United States Other Postretirement Benefit Plan Discount rate +/-50bps 0/0 (4)/4 (1) Projected benefit obligation (PBO) for pension plans and accumulated postretirement benefit obligation (APBO) for other postretirement benefit plans.
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. ISSUED BUT NOT YET EFFECTIVE ACCOUNTING PRONOUNCEMENTS For additional information regarding recently issued accounting pronouncements, see Note 1 to the Consolidated Financial Statements.
There were no other impairments of indefinite-lived intangible assets in 2023 or 2022. For additional information about goodwill and indefinite-life intangible valuations, see Note 5 and Note 10 to the Consolidated Financial Statements. ISSUED BUT NOT YET EFFECTIVE ACCOUNTING PRONOUNCEMENTS For additional information regarding recently issued accounting pronouncements, see Note 1 to the Consolidated Financial Statements.
Sources and Uses of Cash 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, 2022 decreased $1,086 million compared to the same period in 2021.
Sources and Uses of Cash We met our cash needs during 2023 through cash flows from operations, cash and cash equivalents, and financing arrangements. Our cash, cash equivalents and restricted cash at December 31, 2023 decreased $388 million compared to the same period in 2022.
We also continue to review customer conditions globally. In the past, when faced with a potential volume reduction from any one particular segment of our trade distribution network, we generally have been able to offset such declines through increased sales throughout our broad distribution network.
In the past, when faced with a potential volume reduction from any one particular segment of our trade distribution network, we generally have been able to offset such declines through increased sales throughout our broad distribution network.
At December 31, 2022 and 2021, we had total deferred tax assets of $2.6 billion and $3.0 billion, respectively, net of valuation allowances of $412 million and $195 million, respectively. The Company has established tax planning strategies and transfer pricing policies to provide sufficient future taxable income to realize these deferred tax assets.
At December 31, 2023 and 2022, we had total deferred tax assets of $2.9 billion and $2.6 billion, respectively, net of valuation allowances of $490 million and $412 million, respectively. The Company has established tax planning strategies and transfer pricing policies to provide sufficient future taxable income to realize these deferred tax assets.
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.
See Note 5 and Note 10 to the Consolidated Financial Statements and the Critical Accounting Policies and Estimates section of this Management's Discussion and Analysis for additional information.
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.
The operations of the disposal group did not meet the criteria to be presented as discontinued operations. The transaction is expected to close by April 2024 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 15 to the Consolidated Financial Statements.
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. Revenue growth rates relate to projected revenues from our financial planning and analysis process and vary from brand to brand.
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. 51 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (CONTINUED) Revenue growth rates relate to projected revenues from our financial planning and analysis process and vary from brand to brand.
Among these factors are: (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; (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; (5) Whirlpool’s ability to understand consumer preferences and successfully develop new products; (6) Whirlpool's ability to obtain and protect intellectual property rights; (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; (11) risks related to our international operations, including changes in foreign regulations; (12) Whirlpool's ability to respond to unanticipated social, political and/or economic events; (13) information technology system failures, data security breaches, data privacy compliance, network disruptions, and cybersecurity attacks; (14) product liability and product recall costs; (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, base metals) and components and the ability of Whirlpool to offset cost increases; (18) Whirlpool's ability to manage foreign currency fluctuations; (19) impacts from goodwill impairment and related charges; (20) triggering events or circumstances impacting the carrying value of our long-lived assets; (21) inventory and other asset risk; (22) health care cost trends, regulatory changes and variations between results and estimates that could increase future funding obligations for pension and postretirement benefit plans; (23) litigation, tax, and legal compliance risk and costs, especially if materially different from the amount we expect to incur or have accrued for, and any disruptions caused by the same; (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, 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. 53 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.
Among these factors are: (1) intense competition in the home appliance industry, and the impact of the changing retail environment, including direct-to-consumer sales; (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; (5) Whirlpool’s ability to understand consumer preferences and successfully develop new products; (6) Whirlpool's ability to obtain and protect intellectual property rights; (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, other public health emergency-related business disruptions and economic uncertainty; (10) Whirlpool's ability to navigate risks associated with our presence in emerging markets; (11) risks related to our international operations; (12) Whirlpool's ability to respond to unanticipated social, political and/or economic events; (13) information technology system failures, data security breaches, data privacy compliance, network disruptions, and cybersecurity attacks; (14) product liability and product recall costs; (15) Whirlpool's 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, base metals) and components and the ability of Whirlpool to offset cost increases; (18) Whirlpool's ability to manage foreign currency fluctuations; (19) impacts from goodwill impairment and related charges; (20) triggering events or circumstances impacting the carrying value of our long-lived assets; (21) inventory and other asset risk; (22) health care cost trends, regulatory changes and variations between results and estimates that could increase future funding obligations for pension and postretirement benefit plans; (23) litigation, tax, and legal compliance risk and costs; (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, 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.
(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.
(f) NORMALIZED SHARE COUNT ADJUSTMENT - As a result of our 2022 GAAP earnings loss, the impact of antidilutive shares was excluded from the loss per share calculation on a GAAP basis.
Significant drivers of changes in our cash and cash equivalents balance during 2022 are discussed below: Cash Flow Summary Millions of dollars 2022 2021 2020 Cash provided by (used in): Operating activities $ 1,390 $ 2,176 $ 1,500 Investing activities (3,568) (660) (237) Financing activities 1,206 (1,339) (253) Effect of exchange rate changes (20) (67) (28) Less: 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 operating activities in 2022 decreased compared to 2021.
Significant drivers of changes in our cash and cash equivalents balance during 2023 are discussed below: Cash Flow Summary Millions of dollars 2023 2022 2021 Cash provided by (used in): Operating activities $ 915 $ 1,390 $ 2,176 Investing activities (553) (3,568) (660) Financing activities (792) 1,206 (1,339) Effect of exchange rate changes 45 (20) (67) Less: change in cash classified as held for sale (3) (94) — Net increase in cash, cash equivalents and restricted cash $ (388) $ (1,086) $ 110 Cash Flows from Operating Activities Cash provided by operating activities in 2023 decreased compared to 2022.
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.
Whirlpool delivered ongoing (non-GAAP) earnings per share of $16.16 and full-year ongoing EBIT margin of 6.1%, compared to $19.64 and 6.9% in the same prior-year period.
EMEA 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 2022 decreased 20.9% compared to 2021 primarily due to 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. EBIT Summary EBIT margin for 2023 was 1.6% compared to (1.4)% for 2022 .
(2) Ongoing EBIT margin is approximately 6.9%, 10.8% and 9.0% for the twelve months ended December 31, 2022, 2021 and 2020, respectively. Ongoing EBIT margin is calculated by dividing Ongoing EBIT by consolidated net sales for the twelve months ended December 31, 2022, 2021 and 2020, respectively.
(2) Ongoing EBIT margin is approximately 6.1% and 6.9% for the twelve months ended December 31, 2023 and 2022, respectively. Ongoing EBIT margin is calculated by dividing Ongoing EBIT by consolidated net sales for the twelve months ended December 31, 2023 and 2022, respectively.
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. 35 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (CONTINUED) LATIN AMERICA 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.
In 2022, EBIT decreased primarily due to cost inflation and lower volume, partially offset by the favorable impacts of product price/mix. 38 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (CONTINUED) LATIN AMERICA Net Sales Summary Net sales for 2023 increased 9.0% compared to 2022 primarily driven by higher volume and the impact of foreign currency.
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.
The fair value of the Maytag trademark exceeded its carrying value of $1,021 million by approximately 9%. A 10% reduction of forecasted Maytag revenues would result in an impairment charge of approximately $24 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 royalty rate of 12% for the InSinkErator trademark, noting that a 50 basis point reduction of the royalty rate would result in an impairment charge of approximately $21 million.
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. 36 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (CONTINUED) Selling, General and Administrative The following table summarizes selling, general and administrative expenses as a percentage of sales by operating segment: December 31, Millions of dollars 2022 As a % of Net Sales 2021 As a % of Net Sales 2020 As a % of Net Sales North America $ 837 7.3 % $ 860 6.9 % $ 733 6.5 % EMEA 366 9.1 502 9.9 472 10.8 Latin America 272 8.7 261 8.3 233 9.0 Asia 124 11.3 151 12.2 218 17.2 Corporate/other 221 — 307 — 221 — 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.
EBIT decreased primarily due to lower volume and cost inflation, partially offset by the favorable impact of product price/mix. 39 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (CONTINUED) Selling, General and Administrative The following table summarizes selling, general and administrative expenses as a percentage of sales by operating segment: December 31, Millions of dollars 2023 As a % of Net Sales 2022 As a % of Net Sales 2021 As a % of Net Sales North America $ 936 8.2 % $ 837 7.3 % $ 860 6.9 % EMEA 381 10.6 366 9.1 502 9.9 Latin America 323 9.5 272 8.7 261 8.3 Asia 114 11.2 124 11.3 151 12.2 Corporate/other 239 — 221 — 307 — Consolidated $ 1,993 10.2 % $ 1,820 9.2 % $ 2,081 9.5 % Consolidated selling, general and administrative expenses as a percent of consolidated net sales in 2023 increased compared to 2022 .
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. 46 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (CONTINUED) CRITICAL ACCOUNTING POLICIES AND ESTIMATES The preparation of financial statements, in conformity with GAAP, requires management to make certain estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosures.
Dividends On October 16, 2023, our Board of Directors approved a quarterly dividend on our common stock of $1.75 per share. 48 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (CONTINUED) CRITICAL ACCOUNTING POLICIES AND ESTIMATES The preparation of financial statements, in conformity with GAAP, requires management to make certain estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosures.
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.
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.
Please see "Non-GAAP Financial Measures" elsewhere in this Management's Discussion and Analysis for a reconciliation of these non-GAAP financial measures. 32 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (CONTINUED) RESULTS OF OPERATIONS The following table summarizes the consolidated results of operations: December 31, Consolidated - In Millions (except per share data) 2022 Better/(Worse) % 2021 Better/(Worse) % 2020 Net sales $ 19,724 (10.3)% $ 21,985 13.0% $ 19,456 Gross margin 3,073 (30.3) 4,409 14.8 3,842 Selling, general and administrative 1,820 12.5 2,081 (10.9) 1,877 Restructuring costs 21 44.7 38 86.8 288 Impairment of goodwill and other intangibles 384 nm — nm 7 (Gain) loss on sale and disposal of businesses 1,869 nm (105) nm (7) Interest and sundry (income) expense (19) (88.1) (159) nm (21) Interest expense 190 (8.6) 175 7.4 189 Income tax expense 265 48.8 518 (35.6) 382 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 nm: 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.
Please see "Non-GAAP Financial Measures" elsewhere in this Management's Discussion and Analysis for a reconciliation of these non-GAAP financial measures to their equivalent GAAP measures. 35 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (CONTINUED) RESULTS OF OPERATIONS The following table summarizes the consolidated results of operations: December 31, Consolidated - In Millions (except per share data) 2023 Better/(Worse) % 2022 Better/(Worse) % 2021 Net sales $ 19,455 (1.4)% $ 19,724 (10.3)% $ 21,985 Gross margin 3,170 3.2 3,073 (30.3) 4,409 Selling, general and administrative 1,993 (9.5) 1,820 12.5 2,081 Restructuring costs 16 23.8 21 44.7 38 Impairment of goodwill and other intangibles — nm 384 nm — (Gain) loss on sale and disposal of businesses 106 nm 1,869 nm (105) Interest and sundry (income) expense 71 nm (19) (88.1) (159) Interest expense 351 (84.7) 190 (8.6) 175 Income tax expense 77 70.9 265 48.8 518 Net earnings available to Whirlpool 481 nm (1,519) nm 1,783 Diluted net earnings available to Whirlpool per share $ 8.72 nm $ (27.18) nm $ 28.36 nm: not meaningful Consolidated net sales for 2023 decreased by 1.4% compared to 2022, primarily driven by the unfavorable impact of product price/mix, partially offset by increased volume and the acquisition of the InSinkErator business.
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 margin decreased primarily due to the unfavorable impact of product price/mix, partially offset by the favorable impact of raw material inflation and cost productivity. EBIT margin for 2022 was 4.9% compared to 5.4% for 2021.
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.
Excluding the impact of foreign currency, net sales increased 6.8% in 2023. 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.
We regularly review our capital structure and liquidity priorities, which include funding innovation and growth through capital, research and development expenditures as well as opportunistic mergers and acquisitions; and providing returns to shareholders through dividends, share repurchases and maintaining our strong investment grade rating.
We regularly review our capital structure through the lens of maintaining our strong investment grade credit rating. We also regularly review our capital allocation priorities, which include funding innovation and growth through capital and research and development expenditures; opportunistic mergers and acquisitions; returns to shareholders through dividends and/or share repurchases; and debt repayment.
Cash Flows from Investing Activities The increase in cash used in investing activities during 2022 primarily reflects the $3 billion cash outflow for the purchase of InSinkErator business.
The decrease was primarily driven by the $3 billion cash outflow for the purchase of the InSinkErator business that occurred in 2022. The increase in cash used in investing activities during 2022 primarily reflects the $3 billion cash outflow for the purchase of the InSinkErator business.
Our anticipated tax rate is between 14% and 16%. 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.
Our anticipated GAAP tax rate is approximately 24%. Additionally, we expect to generate cash from operating activities of approximately $1,150 - $1,250 and free cash flow of between $550 million and $650 million, including restructuring cash outlays of approximately $50 million and, with respect to free cash flow, capital expenditures of approximately $600 million.
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 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 $60 million. We determined a discount rate of 9.50% for Maytag, noting that a 50 basis point increase in the discount rate would result in a breakeven scenario.
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 provided by financing activities during 2022 primarily reflects the proceeds of $2.5 billion from borrowings of long-term debt related to the InSinkErator acquisition. Dividends paid in financing activities were $384 million, $390 million, and $338 million during 2023, 2022 and 2021, respectively.
We have trademark assets with a carrying value of approximately $3.0 billion and $1.9 billion at December 31, 2022 and 2021, respectively.
At December 31, 2023 and 2022, we had goodwill of approximately $3.3 billion and $3.3 billion, respectively. We have trademark assets with a carrying value of approximately $2.8 billion and $2.8 billion at December 31, 2023 and 2022, respectively.
These sensitivities may not be appropriate to use for other years' financial results. Furthermore, the impact of assumption changes outside of the ranges shown above may not be approximated by using the above results.
These sensitivities may not be appropriate to use for other years' financial results. Furthermore, the impact of assumption changes outside of the ranges shown above may not be approximated by using the above results. For additional information about our pension and other postretirement benefit obligations, see Note 8 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.
For additional information, see Notes 10 and 15 to the Consolidated Financial Statements. 50 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (CONTINUED) 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.
See Note 15 to the Consolidated Financial Statements for additional information. 38 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (CONTINUED) FORWARD-LOOKING PERSPECTIVE Based on internal projections for the industry and broader economy, we currently estimate earnings per diluted share and industry demand for 2023 to be within the following ranges: 2023 Current Outlook Estimated GAAP earnings per diluted share, for the year ending December 31 $16.00 — $18.00 Industry demand North America (6)% — (4)% EMEA (6)% — (4)% Latin America (3)% — (1)% Asia 2% — 4% 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.
See Note 13 to the Consolidated Financial Statements for additional information. 41 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (CONTINUED) FORWARD-LOOKING PERSPECTIVE Based on internal projections for the industry and broader economy, we currently estimate earnings per diluted share and industry demand for 2024 to be within the following ranges: 2024 Current Outlook Estimated GAAP earnings per diluted share, for the year ending December 31 $8.50 — $10.50 Industry demand MDA North America 0% —% 2% MDA Latin America 0% —% 3% MDA Asia 4% —% 6% SDA Global 2% —% 4% MDA Europe (Q1) (8)% —% (6)% For the full-year 2024, 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 $300 million to $400 million of benefit, and margin expansion from our refocused portfolio following our contribution of the European major domestic appliance business.
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.
Due to many factors beyond our control, including the conflict in Ukraine and related sanctions, the Israel-Palestinian conflict, the Red Sea conflict and its impact on shipping and logistics and government actions in China, among other factors, 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, and fluctuations in logistics availability, timing and costs, all of which began easing in 2023 but remain volatile.
ASIA Net Sales Summary 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 2022 decreased 11.2% compared to 2021 primarily due to the divestiture of Whirlpool China and unfavorable impact of foreign currency. Excluding the impact of foreign currency, net sales decreased 6.8% in 2022. EBIT Summary EBIT margin for 2023 was 2.7% compared to 4.9% for 2022.
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.
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.
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.
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 prior period.
The cash held by foreign subsidiaries for permanent reinvestment is generally used to finance the subsidiaries' operational activities and expected future foreign investments. Our intent is to permanently reinvest these funds outside of the United States and our current plans do not demonstrate a need to repatriate the cash to fund our U.S. operations.
Our intent is to permanently reinvest these funds outside of the United States and our current plans do not demonstrate a need to repatriate the cash to fund our U.S. operations.
(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.
(Gain) Loss on Sale and Disposal of Businesses We recorded a loss of $106 million related to the planned divestiture of our European major domestic appliance business for the twelve months ended December 31, 2023, inclusive of a gain of $180 million in the fourth quarter of 2023.
This involves estimating actual current tax expense together with assessing any temporary differences resulting from the different treatment of certain items, such as the timing for recognizing expenses, for tax and accounting purposes. These differences may result in deferred tax assets or liabilities, which are included in our Consolidated Balance Sheets.
Income Taxes We estimate our income taxes in each of the taxing jurisdictions in which we operate. This involves estimating actual current tax expense together with assessing any temporary differences resulting from the different treatment of certain items, such as the timing for recognizing expenses, for tax and accounting purposes.
Additionally, operating segments have been impacted by disruptions in supply chains and distribution channels, among other macroeconomic impacts. 34 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (CONTINUED) NORTH AMERICA Net Sales Summary Net sales for 2022 decreased 8.1% compared to 2021 primarily driven by lower volume, partially offset by favorable impact of product price/mix.
Each of our operating segments has been impacted by disruptions in supply chains and distribution channels, which largely stabilized in the first quarter of 2023, among other macroeconomic impacts which continued throughout 2023. 37 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (CONTINUED) NORTH AMERICA Net Sales Summary Net sales for 2023 decreased 0.4% compared to 2022 primarily driven by the unfavorable impact of product price/mix, partially offset by increased volume and the acquisition of the InSinkErator business.
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. 33 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (CONTINUED) Results of Operating Segments Our operating segments are based upon geographical region and are defined as North America, EMEA, Latin America and Asia.
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. 36 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (CONTINUED) Results of Operating Segments In 2023, 2022 and 2021, respectively, our operating segments were based on geographical region and were defined as North America, EMEA, Latin America and Asia.
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.
Cash provided by operating activities of $915 million, compared to $1.4 billion in 2022, alongside free cash flow (non-GAAP) of $366 million in 2023, compared to $820 million in 2022, was primarily driven by lower earnings and reduced working capital conversion.
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.
Excluding the impact of foreign currency, net sales decreased 0.1% in 2023. Ne t sales for 2022 decreased 8.1% compared to 2021 primarily driven by lower volume, partially offset by the favorable impact of product/price mix . Excluding the impact of foreign currency, net sales decreased 7.9% in 2022.
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 price/mix, partially offset by the unfavorable impacts of inflation and increased marketing and technology investments.
EBIT Summary EBIT margin for 2023 was 9.7% compared to 11.5% for 2022 . EBIT decreased primarily due to the unfavorable impact of product price/mix, partially offset by decreased raw material inflation and favorable impact of cost productivity. EBIT margin for 2022 was 11.5% compared to 17.8% for 2021.
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.
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.
See Note 7 to the Consolidated Financial Statements for additional information. Other material obligations include off-balance sheet arrangements arising in the normal course of business. They primarily consist of agreements we enter into with financial institutions to issue bank guarantees, letters of credit and surety bonds.
Other material obligations include off-balance sheet arrangements arising in the normal course of business. They primarily consist of agreements we enter into with financial institutions to issue bank guarantees, letters of credit and surety bonds. These agreements are primarily associated with unresolved tax matters in Brazil, as is customary under local regulations, and other governmental obligations and debt agreements.
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.
We determined a discount rate of 8.25% for InSinkErator, noting that a 50 basis point increase in the discount rate would result in an impairment charge of approximately $98 million. 52 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (CONTINUED) 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.
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.
EBIT margin increased primarily due to the favorable impacts of held-for-sale treatment and reduced raw material inflation, partially offset by lower volume. EBIT margin for 2022 was (1.4)% compared to 2.0% for 2021.
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.
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 2021. Interest Expense Interest expense was $351 million, $190 million and $175 million for the years ended December 31, 2023, 2022 and 2021, respectively.
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. 37 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.
This adjustment is recorded in the loss on sale and disposal of businesses and reflects transaction costs and ongoing reassessment of the fair value less costs to sell of the disposal group which will continue to be evaluated each reporting period until completion of the transaction. *Whirlpool ownership of the Hotpoint brand in the EMEA and Asia Pacific regions is not affiliated with the Hotpoint brand sold in the Americas. 40 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.
We are required to assess the likelihood that deferred tax assets, which include net operating loss carryforwards, general business credits and deductible temporary differences, will be realizable in future years. Realization of our net operating loss and general business credit deferred tax assets is supported by specific tax planning strategies and, where possible, considers projections of future profitability.
These differences may result in deferred tax assets or liabilities, which are included in our Consolidated Balance Sheets. We are required to assess the likelihood that deferred tax assets, which include net operating loss carryforwards, general business credits and deductible temporary differences, will be realizable in future years.
Depending on the timing of cash flows, the 45 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (CONTINUED) location of cash balances, as well as the liquidity requirements of each country, external sources of funding are used to support working capital requirements.
Depending on the timing of cash flows, the location of cash balances, as well as the liquidity requirements of each country, external sources of funding are used to support working capital requirements. Cash Flows from Investing Activities Cash used in investing activities in 2023 decreased compared to 2022.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeAt December 31, 2022, a 100 basis point increase or decrease in interest rates would have resulted in an incremental unrealized gain of approximately $4 million or unrealized loss of approximately $5 million, respectively, related to these contracts.
Biggest changeAt December 31, 2023, a 100 basis point increase or decrease in interest rates would have resulted in an incremental unrealized gain of approximately $3 million or unrealized loss of approximately $4 million, respectively, related to these contracts.
At December 31, 2022, a 10% favorable or unfavorable shift in commodity prices would have resulted in an incremental gain or loss of approximately $18 million, respectively, related to these contracts. There is no material change to market risk exposure other than foreign exchange, which is attributable to a change in the size of the derivative portfolio year over year.
At December 31, 2023, a 10% favorable or unfavorable shift in commodity prices would have resulted in an incremental gain or loss of approximately $18 million, respectively, related to these contracts. There is no material change to market risk exposure other than foreign exchange, which is attributable to a change in the size of the derivative portfolio year over year.
We use foreign currency forward contracts, currency options, currency swaps and cross-currency swaps to hedge the price risk associated with firmly committed and forecasted cross-border payments and receipts related to ongoing business and operational financing activities. At December 31, 2022 and 2021, our most significant foreign currency exposures related to the Brazilian Real, Canadian Dollar and British Pound.
We use foreign currency forward contracts, currency options, currency swaps and cross-currency swaps to hedge the price risk associated with firmly committed and forecasted cross-border payments and receipts related to ongoing business and operational financing activities. At December 31, 2023 and 2022, our most significant foreign currency exposures related to the Brazilian Real, Canadian Dollar and British Pound.
We enter into interest rate swap and cross-currency swap agreements to manage our exposure to interest rate risk from probable long-term debt issuances or cross-currency debt.
We enter into interest rate swap and cross-currency swap agreements to manage our exposure to interest rate risk from long-term debt issuances or cross-currency debt.
At December 31, 2022, a 10% favorable or unfavorable exchange rate movement in each currency in our portfolio of foreign currency contracts would have resulted in an incremental unrealized gain of approximately $258 million or loss of approximately $267 million, respectively.
At December 31, 2023, a 10% favorable or unfavorable exchange rate movement in each currency in our portfolio of foreign currency contracts would have resulted in an incremental unrealized gain of approximately $195 million or loss of approximately $215 million, respectively.
For additional information, see Note 10 to the Consolidated Financial Statements. 55
For additional information, see Note 9 to the Consolidated Financial Statements. 56

Other WHR 10-K year-over-year comparisons