UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 ________________________________________________________
FORM 10-Q
  ________________________________________________________
 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended JuneSeptember 30, 2019
OR
 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number 1-3932
whirlpoolcorplogoa20.jpg
WHIRLPOOL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 38-1490038
(State of Incorporation) (I.R.S. Employer Identification No.)
    
2000 North M-63  
Benton Harbor,Michigan 49022-2692
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (269923-5000
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading symbol(s) Name of each exchange on which registered
Common stock, par value $1.00 per share WHR Chicago Stock ExchangeandNew York Stock Exchange
0.625% Senior Notes due 2020 WHR 20 New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes      No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes     No       
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
  Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes     No 
Number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date:
Class of common stock Shares outstanding at July 19,October 18, 2019
Common stock, par value $1 per share 63,527,40963,199,776




WHIRLPOOL CORPORATION

QUARTERLY REPORT ON FORM 10-Q
Three and SixNine Months Ended JuneSeptember 30, 2019
TABLE OF CONTENTS
 
  PAGE
 
Item 1. 
 
 
 
 
Item 2.
Item 3.
Item 4.
   
 
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.
   



FORWARD-LOOKING STATEMENTS
The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements made by us or on our behalf. Certain statements contained in this quarterly report, including those within the forward-looking perspective section within this report's Management's Discussion and Analysis, and other written and oral statements made from time to time by us or on our behalf do not relate strictly to historical or current facts and may contain forward-looking statements that reflect our current views with respect to future events and financial performance. As such, they are considered "forward-looking statements" which provide current expectations or forecasts of future events. Such statements can be identified by the use of terminology such as "may," "could," "will," "should," "possible," "plan," "predict," "forecast," "potential," "anticipate," "estimate," "expect," "project," "intend," "believe," "may impact," "on track," and similar words or expressions. Our forward-looking statements generally relate to our growth strategies, financial results, product development, and sales efforts. These forward-looking statements should be considered with the understanding that such statements involve a variety of risks and uncertainties, known and unknown, and may be affected by inaccurate assumptions. Consequently, no forward-looking statement can be guaranteed and actual results may vary materially.
This document contains forward-looking statements about Whirlpool Corporation and its consolidated subsidiaries ("Whirlpool") that speak only as of this date. Whirlpool disclaims any obligation to update these statements. Forward-looking statements in this document may include, but are not limited to, statements regarding expected earnings per share, cash flow, productivity and raw material prices. Many risks, contingencies and uncertainties could cause actual results to differ materially from Whirlpool's forward-looking statements. 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; (2) Whirlpool's ability to maintain or increase sales to significant trade customers and the ability of these trade customers to maintain or increase market share; (3) Whirlpool's ability to maintain its reputation and brand image; (4) the ability of Whirlpool to achieve its business plans, productivity improvements, and cost control objectives, and to leverage its global operating platform, and accelerate the rate of innovation; (5) Whirlpool's ability to obtain and protect intellectual property rights; (6) acquisition and investment-related risks, including risks associated with our past acquisitions, and risks associated with our increased presence in emerging markets; (7) risks related to our international operations, including changes in foreign regulations, regulatory compliance and disruptions arising from political, legal and economic instability; (8) information technology system failures, data security breaches, network disruptions, and cybersecurity attacks; (9) product liability and product recall costs; (10) the ability of suppliers of critical parts, components and manufacturing equipment to deliver sufficient quantities to Whirlpool in a timely and cost-effective manner; (11) our ability to attract, develop and retain executives and other qualified employees; (12) the impact of labor relations; (13) fluctuations in the cost of key materials (including steel, resins, copper and aluminum) and components and the ability of Whirlpool to offset cost increases; (14) Whirlpool's ability to manage foreign currency fluctuations; (15) impacts from goodwill impairment and related charges; (16) triggering events or circumstances impacting the carrying value of our long-lived assets; (17) inventory and other asset risk; (18) the uncertain global economy and changes in economic conditions which affect demand for our products; (19) health care cost trends, regulatory changes and variations between results and estimates that could increase future funding obligations for pension and postretirement benefit plans; (20) 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; (21) the effects and costs of governmental investigations or related actions by third parties; and (22) changes in the legal and regulatory environment including environmental, health and safety regulations, and taxes and tariffs.
We undertake no obligation to update any forward-looking statement, and investors are advised to review disclosures in our filings with the SEC. It is not possible to foresee or identify all factors that could cause actual results to differ from expected or historic results. Therefore, investors should not consider the foregoing factors to be an exhaustive statement of all risks, uncertainties, or factors that could potentially cause actual results to differ from forward-looking statements.
Additional information concerning these and other factors can be found in "Risk Factors" in Part II, Item 1A of this report.    
Unless otherwise indicated, the terms "Whirlpool," "the Company," "we," "us," and "our" refer to Whirlpool Corporation and its consolidated subsidiaries.




2


Website Disclosure
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 webpage 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. The information contained on, or that may be accessed through, our webpage is not incorporated by reference into, and is not a part of, this document.



3


PART I. FINANCIAL INFORMATION
ITEM 1.FINANCIAL STATEMENTS

TABLE OF CONTENTS
 PAGE
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 

 PAGE PAGE
NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.



4



WHIRLPOOL CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)
FOR THE PERIODS ENDED JUNESEPTEMBER 30
(Millions of dollars, except per share data)
 

Three Months Ended Six Months EndedThree Months Ended Nine Months Ended
2019 2018 2019 20182019 2018 2019 2018
Net sales$5,186
 $5,140
 $9,946
 $10,051
$5,091
 $5,326
 $15,037
 $15,377
Expenses              
Cost of products sold4,254
 4,260
 8,202
 8,359
4,350
 4,431
 12,552
 12,790
Gross margin932
 880
 1,744
 1,692
741
 895
 2,485
 2,587
Selling, general and administrative584
 541
 1,089
 1,046
491
 550
 1,580
 1,596
Intangible amortization18
 20
 36
 40
17
 18
 53
 58
Restructuring costs60
 44
 86
 188
56
 28
 142
 216
Impairment of goodwill and other intangibles
 747
 
 747

 
 
 747
Loss on disposal of businesses79
 
 79
 
(Gain) loss on sale and disposal of businesses(516) 
 (437) 
Operating profit (loss)191
 (472) 454
 (329)693
 299
 1,147
 (30)
Other (income) expense    
 
    
 
Interest and sundry (income) expense(63) 90
 (193) 82
(29) 24
 (222) 106
Interest expense52
 47
 103
 89
45
 52
 148
 141
Earnings (loss) before income taxes202
 (609) 544
 (500)677
 223
 1,221
 (277)
Income tax expense (benefit)130
 30
 (2) 45
Income tax expense313
 7
 311
 52
Net earnings (loss)72
 (639) 546
 (545)364
 216
 910
 (329)
Less: Net earnings available to noncontrolling interests5
 18
 8
 18
6
 6
 14
 24
Net earnings (loss) available to Whirlpool$67
 $(657) $538
 $(563)$358
 $210
 $896
 $(353)
Per share of common stock              
Basic net earnings (loss) available to Whirlpool$1.04
 $(9.50) $8.42
 $(8.03)$5.62
 $3.25
 $14.04
 $(5.18)
Diluted net earnings (loss) available to Whirlpool$1.04
 $(9.50) $8.35
 $(8.03)$5.57
 $3.22
 $13.93
 $(5.18)
Dividends declared$1.20
 $1.15
 $2.35
 $2.25
$1.20
 $1.15
 $3.55
 $3.40
Weighted-average shares outstanding (in millions)              
Basic63.8
 69.1
 63.9
 70.1
63.6
 64.5
 63.8
 68.2
Diluted64.3
 69.1
 64.4
 70.1
64.2
 65.3
 64.3
 68.2
              
Comprehensive income (loss)$16
 $(802) $583
 $(703)$419
 $130
 $1,002
 $(573)

The accompanying notes are an integral part of these Consolidated Condensed Financial Statements.


5


WHIRLPOOL CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
(Millions of dollars, except share data)
 
(Unaudited)  (Unaudited)  

June 30, 2019
December 31, 2018September 30, 2019
December 31, 2018
Assets





Current assets





Cash and cash equivalents$1,178

$1,498
$993

$1,498
Accounts receivable, net of allowance of $145 and $136, respectively2,387

2,210
Accounts receivable, net of allowance of $127 and $136, respectively2,588

2,210
Inventories3,008

2,533
2,883

2,533
Prepaid and other current assets961

839
911

839
Assets held for sale969
 818

 818
Total current assets8,503

7,898
7,375

7,898
Property, net of accumulated depreciation of $6,361 and $6,190, respectively3,318

3,414
Property, net of accumulated depreciation of $6,331 and $6,190, respectively3,203

3,414
Right of use assets788
 
746
 
Goodwill2,450

2,451
2,420

2,451
Other intangibles, net of accumulated amortization of $565 and $527, respectively2,260

2,296
Other intangibles, net of accumulated amortization of $572 and $527, respectively2,217

2,296
Deferred income taxes2,147

1,989
2,031

1,989
Other noncurrent assets389

299
414

299
Total assets$19,855

$18,347
$18,406

$18,347
Liabilities and stockholders' equity





Current liabilities





Accounts payable$4,270

$4,487
$4,229

$4,487
Accrued expenses634

690
626

690
Accrued advertising and promotions652

827
755

827
Employee compensation372

393
430

393
Notes payable2,157

1,034
941

1,034
Current maturities of long-term debt573

947
546

947
Other current liabilities878

811
973

811
Liabilities held for sale558
 489

 489
Total current liabilities10,094

9,678
8,500

9,678
Noncurrent liabilities





Long-term debt4,155

4,046
4,105

4,046
Pension benefits586

637
530

637
Postretirement benefits314

318
310

318
Lease liabilities660
 
617
 
Other noncurrent liabilities379

463
395

463
Total noncurrent liabilities6,094

5,464
5,957

5,464
Stockholders' equity





Common stock, $1 par value, 250 million shares authorized, 112 million shares issued, and 63 million and 64 million shares outstanding, respectively112

112
112

112
Additional paid-in capital2,790

2,768
2,786

2,768
Retained earnings7,380

6,933
7,659

6,933
Accumulated other comprehensive loss(2,657)
(2,695)(2,603)
(2,695)
Treasury stock, 49 million and 48 million shares, respectively(4,876)
(4,827)(4,926)
(4,827)
Total Whirlpool stockholders' equity2,749

2,291
3,028

2,291
Noncontrolling interests918

914
921

914
Total stockholders' equity3,667

3,205
3,949

3,205
Total liabilities and stockholders' equity$19,855

$18,347
$18,406

$18,347

The accompanying notes are an integral part of these Consolidated Condensed Financial Statements.


6


WHIRLPOOL CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE PERIODS ENDED JUNESEPTEMBER 30
(Millions of dollars)
 

Six Months EndedNine Months Ended

2019
20182019
2018
Operating activities





Net earnings (loss)$546

$(545)$910

$(329)
Adjustments to reconcile net earnings to cash provided by (used in) operating activities:





Depreciation and amortization302

339
443

491
Impairment of goodwill and other intangibles
 747

 747
Loss on disposal of businesses79
 
(Gain) loss on sale and disposal of businesses(437) 
Changes in assets and liabilities:





Accounts receivable(251)
(103)(517)
(585)
Inventories(574)
(399)(525)
(271)
Accounts payable(182)
(287)(110)
(122)
Accrued advertising and promotions(180)
(226)(62)
(95)
Accrued expenses and current liabilities(41)
191
29

196
Taxes deferred and payable, net(179)
(66)(59)
(105)
Accrued pension and postretirement benefits(39)
(46)(72)
(433)
Employee compensation7

(31)77

35
Other(309)
(158)(243)
(144)
Cash used in operating activities(821)
(584)(566)
(615)
Investing activities





Capital expenditures(197)
(194)(306)
(330)
Proceeds from sale of assets and business5

27
1,034

27
Proceeds from held-to-maturity securities
 60

 60
Investment in related businesses

(2)

(25)
Other(3)

(5)
(4)
Cash used in investing activities(195)
(109)
Cash provided by (used in) investing activities723

(272)
Financing activities





Net proceeds from borrowings of long-term debt697

700
699

703
Repayments of long-term debt(943)
(376)(946)
(381)
Net proceeds from short-term borrowings1,119

1,398
Net proceeds (repayments) from short-term borrowings(63)
1,761
Dividends paid(149)
(159)(229)
(232)
Repurchase of common stock(50)
(1,001)(100)
(1,102)
Common stock issued4

7
5

7
Cash provided by financing activities678

569
Other(7)
(6)
Cash provided by (used in) financing activities(641)
750
Effect of exchange rate changes on cash, cash equivalents and restricted cash9

(42)(55)
(74)
Decrease in cash, cash equivalents and restricted cash(329)
(166)(539)
(211)
Cash, cash equivalents and restricted cash at beginning of period1,538

1,293
1,538

1,293
Cash, cash equivalents and restricted cash at end of period$1,209

$1,127
$999

$1,082

The accompanying notes are an integral part of these Consolidated Condensed Financial Statements.


7


NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
(1)    BASIS OF PRESENTATION
General Information
The accompanying unaudited Consolidated Condensed Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information, and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all information or footnotes required by GAAP for complete financial statements. As a result, this Form 10-Q should be read in conjunction with the Consolidated Financial Statements and accompanying Notes in our Form 10-K for the year ended December 31, 2018.
Management believes that the accompanying Consolidated Condensed Financial Statements reflect all adjustments, including normal recurring items, considered necessary for a fair presentation of the interim periods.
We are required to make estimates and assumptions that affect the amounts reported in the Consolidated Condensed Financial Statements and accompanying Notes. Actual results could differ materially from those estimates.
Certain prior year amounts in the Consolidated Condensed Financial Statements have been reclassified to conform with current year presentation.
We have eliminated all material intercompany transactions in our Consolidated Condensed Financial Statements. We do not consolidate the financial statements of any company in which we have an ownership interest of 50% or less, unless that company is deemed to be a variable interest entity ("VIE") of which we are the primary beneficiary. VIEs are consolidated when the company is the primary beneficiary of these entities and has the ability to directly impact the activities of these entities.
Out-of-Period Adjustments
During the third quarter of 2019, we recorded a net adjustment of $34 million related to prior years resulting from the one time transition tax deemed repatriation on earnings of certain foreign subsidiaries that were previously tax deferred and related impacts. This adjustment resulted in a decrease of net earnings available to Whirlpool of $34 million and a decrease of $0.53 in diluted earnings per share for the three and nine months ended 2019. The Company determined the impact was not material to the prior years' financial statements and is not expected to be material to the Consolidated Statement of Comprehensive Income (Loss) for the year ending December 31, 2019.
In addition, during the third quarter of 2019 we recorded an adjustment of $22 million related to the first quarter of 2019 resulting from other foreign subsidiary income items and corresponding tax credit impacts. This adjustment resulted in a decrease of $22 million in net earnings available to Whirlpool and a decrease of $0.34 in diluted earnings per share for the three months ended September 30, 2019. The Consolidated Condensed Statement of Comprehensive Income (Loss) for the nine months ended September 30, 2019 is not impacted by this adjustment.
Adoption of New Accounting Standards
On January 1, 2019, we adopted Accounting Standards Update (“ASU”) No. 2017-12, "Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities." The adoption of this standard did not have a material impact on our Consolidated Condensed Financial Statements, however we have expanded our use of hedge accounting to hedge contractually specified components in commodity contracts designated as cash flow hedges. For additional information on the required disclosures related to the impact of adopting this standard, see Note 10 to the Consolidated Condensed Financial Statements.

On January 1, 2019, we adopted ASU No. 2016-02, "Leases (Topic 842)" and as part of that process the Company made the following elections:

The Company did not elect the hindsight practical expedient, for all leases.
The Company elected the package of practical expedients and, as a result, did not reassess prior conclusions related to contracts containing leases, lease classification and initial direct costs for all leases.
In March 2018, the FASB approved an optional transition method that allows companies to use the effective date as the date of initial application on transition. The Company elected this transition method, and as a


8



result, did not adjust its comparative period financial information or make the newly required lease disclosures for periods before the effective date.
The Company elected to make the accounting policy election for short-term leases resulting in lease payments being recorded as an expense on a straight-line basis over the lease term.
The Company elected to not separate lease and non-lease components for all leases.
The Company did not elect the land easement practical expedient.

Upon adoption, we recognized the cumulative effect of initially applying this new standard resulting in the addition of approximately $858 million of right of use assets, of which $46 million were classified as held for sale, as well as the corresponding short-term and long-term lease liabilities. Additionally, the Company has sold and leased back a group of properties in our Latin American region and, upon adoption, the Company recorded a cumulative adjustment to retained earnings of approximately $82 million related to deferred gains associated with these transactions.
For additional information on the required disclosures related to the impact of adopting this standard, see Note 3 to the Consolidated Condensed Financial Statements.


8



For additional information on held for sale assets, see Note 16 to the Consolidated Condensed Financial Statements.
We adopted the following standard, none of which have a material impact on our Consolidated Condensed Financial Statements:
StandardEffective Date
2019-07Codification Updates to SEC Sections: Amendments to SEC Paragraphs Pursuant to SEC Final Releases No. 33-10532, Disclosure Update and Simplification, and Nos. 33-10231 and 33-10441, Investment Company Reporting Modernization, and Miscellaneous UpdatesJuly 1, 2019


All other newly issued and effective accounting standards during 2019 were not relevant or material to the Company.
Accounting Pronouncements Issued But Not Yet Effective
In November 2018, the FASB issued ASU 2018-18, "Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606." The new standard clarifies that certain transactions between participants in a collaborative arrangement should be accounted for under Topic 606 when the counterparty is a customer for a good or service that is a distinct unit of account. The amendments also preclude entities from presenting consideration from transactions with a collaborator that is not a customer together with revenue recognized from contracts with customers. The new standard is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted in any interim period for entities that have adopted ASC 606. The standard should be applied retrospectively to the period when ASC 606 was initially adopted ASC 606.adopted. The Company is currently evaluating the impact of adopting this guidance.
The FASB has issued the following relevant standards, which are not expected to have a material impact on our Consolidated Condensed Financial Statements:
Standard Effective Date
2016-13Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial InstrumentsJanuary 1, 2020
2018-13Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value MeasurementJanuary 1, 2020
2018-14Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20): Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit PlansJanuary 1, 2021
2018-15Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred In a Cloud Computing Arrangement That Is a Service ContractJanuary 1, 2020
2018-17Consolidation (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest EntitiesJanuary 1, 2020

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


9




(2)    REVENUE RECOGNITION

Disaggregation of Revenue

The following table presents our disaggregated revenues by revenue source. We sell products within all product categories in each operating segment. Revenues related to compressors are fully reflected in our Latin America segment. For additional information on the disaggregated revenues by geographic regions, see Note 15 to the Consolidated Condensed Financial Statements.

  Three Months Ended June 30, Six Months Ended June 30,
Millions of dollars 2019 2018 2019 2018
Major product categories:        
Laundry $1,492
 $1,463
 $2,975
 $3,025
Refrigeration 1,656
 1,606
 3,019
 2,897
Cooking 1,075
 1,089
 2,119
 2,138
Dishwashing 398
 412
 762
 808
Total major product category net sales $4,621
 $4,570
 $8,875
 $8,868
Compressors 323
 285
 635
 581
Spare parts and warranties 180
 249
 371
 522
Other 62
 36
 65
 80
Total net sales $5,186
 $5,140
 $9,946
 $10,051
Revenues related to our former compressor business were fully reflected in our Latin America segment through June 30, 2019. We completed the sale of our compressor business on July 1, 2019. For additional information on the sale of Embraco, see Note 16 to the Consolidated Condensed Financial Statements.

  Three Months Ended September 30, Nine Months Ended September 30,
Millions of dollars 2019 2018 2019 2018
Major product categories:        
Laundry $1,576
 $1,580
 $4,531
 $4,605
Refrigeration 1,673
 1,577
 4,694
 4,474
Cooking 1,183
 1,204
 3,289
 3,342
Dishwashing 414
 421
 1,169
 1,229
Total major product category net sales $4,846
 $4,782
 $13,683
 $13,650
Compressors 
 266
 557
 847
Spare parts and warranties 227
 246
 749
 768
Other 18
 32
 48
 112
Total net sales $5,091
 $5,326
 $15,037
 $15,377


The impact to revenue related to prior period performance obligations was not material for the three and sixnine months ended JuneSeptember 30, 2019.



9



Bad Debt Expense

Bad debt expense was not material for the three and sixnine months ended JuneSeptember 30, 2019.
(3)    LEASES

Leases

We lease certain manufacturing facilities, warehouses/distribution centers, office space, land, vehicles, and equipment. At lease inception, we determine the lease term by assuming the exercise of those renewal options that are reasonably assured. Leases with an initial term of 12 months or less are not recorded in the Consolidated Condensed Balance Sheets and we recognize lease expense for these leases on a straight-line basis over the lease term. The Company hashad operating lease costs of approximately $104$150 million for the sixnine months ended JuneSeptember 30, 2019.

As of JuneSeptember 30, 2019, we have approximately $82 million of non-cancelable operating lease commitments, primarily for warehouses, that have not yet commenced. These operating leases willare expected to commence between fiscal year 2019 and fiscal year 2020 with lease terms of up to 15 years.

At JuneSeptember 30, 2019, we have no0 leases classified as financing leases and we have approximately $993$885 million of non-cancelable operating lease commitments, excluding variable consideration. The undiscounted annual future minimum lease payments are summarized by year in the table below:


10



Maturity of Lease Liabilities
Operating Leases
(in millions)
2019$99
2020179
2021148
2022124
2023112
After 2023331
Total lease payments$993
Less: interest144
Present value of lease liabilities (1)
$849
(1) Present value of lease liabilities includes liabilities held for sale of $36 million.
Maturity of Lease Liabilities
Operating Leases
(in millions)
2019$45
2020166
2021139
2022119
2023107
After 2023309
Total lease payments$885
Less: interest123
Present value of lease liabilities$762

The long-term portion of the lease liabilities included in the amounts above is $660 million, excluding held for sale liabilities, and the$617 million. The remainder of our lease liabilities, excluding held for sale liabilities are included in other current liabilities in the Consolidated Condensed Balance Sheets.

At JuneSeptember 30, 2019, the weighted average remaining lease term and weighted average discount rate for operating leases was 7 years and 5%, respectively.

During the sixnine months ended JuneSeptember 30, 2019 the cash paid for amounts included in the measurement of the liabilities and the operating cash flows was $100$147 million. The right of use assets obtained in exchange for new liabilities was $61$39 million in the sixnine months ended.

As the Company's lease agreements normally do not provide an implicit interest rate, we apply the Company's incremental borrowing rate based on the information available at commencement date in determining the present value of future lease payments. Relevant information used in determining the Company’sCompany's incremental borrowing rate includes the duration of the lease, location of the lease, and the Company’sCompany's credit risk relative to risk-free market rates.

Many of our leases include renewal options that can extend the lease term. The execution of those renewal options is at our sole discretion and reflected in the lease term when they are reasonably certain to be exercised.

Certain leases also include options to purchase the underlying asset at fair market value. If leased assets have leasehold improvements, typically the depreciable life of those leasehold improvements are limited by the expected lease term. Additionally, certain lease agreements include lease payment adjustments for inflation.

Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.


10




We rent or sublease certain real estate to third parties. Our sublease portfolio primarily consists of operating leases within our warehouses, resulting in a nominal amount of sublease income in 2019.
(4)    CASH, CASH EQUIVALENTS AND RESTRICTED CASH
The following table provides a reconciliation of cash, cash equivalents and restricted cash as reported within our Consolidated Condensed Statements of Cash Flows:
June 30,September 30,
Millions of dollars2019 20182019 2018
Cash and cash equivalents as presented in our Consolidated Condensed Balance Sheets$1,178
 $1,057
$993
 $1,032
Restricted cash included in prepaid and other current assets (1)
25
 47
6
 45
Restricted cash included in other noncurrent assets (1)

 23

 5
Cash included in assets held for sale6
 
Cash, cash equivalents and restricted cash as presented in our Consolidated Condensed Statements of Cash Flows$1,209
 $1,127
$999
 $1,082
(1)Change in restricted cash reflects realization of foreign currency translation adjustments of $(1)$1 million and $1$3 million, respectively, for the sixnine months ended JuneSeptember 30, 2019 and 2018 compared to the prior fiscal year end.


11



 December 31,
Millions of dollars2018 2017
Cash and cash equivalents as presented in our Consolidated Balance Sheets$1,498
 $1,196
Restricted cash included in prepaid and other current assets40
 48
Restricted cash included in other noncurrent assets
 49
Cash, cash equivalents and restricted cash as presented in our Consolidated Statements of Cash Flows$1,538
 $1,293


Restricted cash can only be used to fund capital expenditures and technical resources to enhance Whirlpool China's research and development and working capital, as required by the terms of the Whirlpool China (formerly Hefei Sanyo) acquisition completed in October 2014. 
(5)    INVENTORIES
The following table summarizes our inventory at JuneSeptember 30, 2019 and December 31, 2018:
Millions of dollars
June 30, 2019
December 31, 2018
September 30, 2019
December 31, 2018
Finished products
$2,547

$2,076

$2,414

$2,076
Raw materials and work in process
618

617

627

617


3,165

2,693

3,041

2,693
Less: excess of FIFO cost over LIFO cost
(157)
(160)
(158)
(160)
Total inventories
$3,008

$2,533

$2,883

$2,533

LIFO inventories represented 46%44% and 41% of total inventories at JuneSeptember 30, 2019 and December 31, 2018, respectively.


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(6)    PROPERTY, PLANT & EQUIPMENT
The following table summarizes our property, plant and equipment at JuneSeptember 30, 2019 and December 31, 2018:
Millions of dollars
June 30, 2019
December 31, 2018
September 30, 2019
December 31, 2018
Land
$101

$102

$98

$102
Buildings
1,607

1,593

1,585

1,593
Machinery and equipment
7,971

7,909

7,851

7,909
Accumulated depreciation
(6,361)
(6,190)
(6,331)
(6,190)
Property, plant and equipment, net
$3,318

$3,414

$3,203

$3,414

During the sixnine months ended JuneSeptember 30, 2019, we disposed of buildings, machinery and equipment no longer in use with a net book value of $6$57 million, andprimarily related to the loss onNaples asset impairment charges.
For additional information, see Note 13 to the disposal was not material.Consolidated Condensed Financial Statements.
(7)    FINANCING ARRANGEMENTS
Debt Offering
On February 26, 2019, Whirlpool Corporation completed a bond offering consisting of $700 million in principal amount of 4.75% Senior Notes due in 2029. The notes contain covenants that limit Whirlpool Corporation's ability to incur certain liens or enter into certain sale and lease-back transactions. In addition, if we experience a specific kind of change of control, we are required to make an offer to purchase all of the notes at a purchase price of 101% of the principal amount thereof, plus accrued and unpaid interest. The notes are registered under the Securities Act of 1933, as amended, pursuant to our Registration Statement on Form S-3 (File No.333-224381) previously filed with the Securities and Exchange Commission. 


12



Debt Repayment
On August 9, 2019, we repaid $1.0 billion pursuant to our April 23, 2018 Term Loan Agreement with Citibank, N.A., as Administrative Agent, and certain other financial institutions, representing full repayment of amounts borrowed under the term loan. As previously disclosed, we agreed to repay this term loan amount with the net cash proceeds received from the sale of our Embraco business unit to Nidec Corporation, which closed on July 1, 2019.
On February 27, 2019, we repaid €600 million (approximately $673 million) pursuant to our June 5, 2018 term loan agreementTerm Loan Agreement with Wells Fargo Bank, National Association, as Administrative Agent, and certain other financial institutions (the "Whirlpool EMEA Finance Term Loan"), representing full repayment of amounts borrowed under the Whirlpool EMEA Finance Term Loan. On March 1, 2019, $250 million of 2.40% senior notes matured and were repaid. On April 26, 2018, $363 million of 4.50% senior notes matured and were repaid.
Term Loan Agreements

On April 23, 2018 the Company entered into, and on May 14, 2018 and August 30, 2018 the Company amended, a Term Loan Agreement (the "Term Loan Agreement") by and among the Company, Citibank, N.A., as Administrative Agent, JPMorgan Chase Bank, N.A. as Syndication Agent, and certain other financial institutions. Citibank, N.A., JPMorgan Chase Bank, N.A., BNP Paribas Securities Corp., Mizuho Bank, Ltd., and Wells Fargo Securities, LLC acted as Joint Lead Arrangers and Joint Bookrunners for the Term Loan Agreement. The Term Loan Agreement provides for an aggregate lender commitment of $1.0 billion and is recorded in notes payable in our Consolidated Condensed Balance Sheets. The Term Loan Agreement had a maturity date of April 22, 2019. On March 27, 2019 the Company extended the Termination Date of the Term Loan Agreement for an additional six months to October 23, 2019. The Company also has agreed to repay the outstanding term loan amounts with the net cash proceeds received from the closing of the Embraco sale transaction which will occur in the third quarter of 2019. The Embraco sale transaction closed on July 1, 2019. The proceeds of the Term Loan Agreement were used to fund accelerated share repurchases through a modified Dutch auction tender offer.
The interest and fee rates payable with respect to the term loan facility based on the Company's current debt rating are as follows: (1) the spread over LIBOR is 1.125%; (2) the spread over prime is 0.125%; and (3) the ticking fee is 0.125%, as of the date hereof. The Term Loan Agreement, as amended, contains customary covenants and warranties including, among other things, a debt to capitalization ratio of less than or equal to 0.65 to 1.00 as of the last day of each fiscal quarter, and a rolling twelve month interest coverage ratio required to be greater than or equal to 3.0 to 1.0 for each fiscal quarter. In addition, the covenants limit the Company's ability to (or to permit any subsidiaries to), subject to various exceptions and limitations: (i) merge with other companies; (ii) create liens on its property; (iii) incur debt or off-balance sheet obligations at the subsidiary level; (iv) enter into transactions with affiliates, except on an arms-length basis or with or between subsidiaries; (v) enter into agreements restricting the payment of subsidiary dividends


12



or restricting the making of loans or repayment of debt by subsidiaries to the Company or other subsidiaries; and (vi) enter into agreements restricting the creation of liens on its assets.
Credit Facilities
On September 27, 2017,August 6, 2019, Whirlpool Corporation exercised its commitment increase and term extension rights under the Thirdentered into a Fourth Amended and Restated Long-Term Credit Agreement (the "Amended Long-Term Facility") by and among the Company, certain other borrowers, the lenders referred to therein, JPMorgan Chase Bank, N.A. as Administrative Agent, and Citibank, N.A., as Syndication Agent. In connection with this exercise, the Company entered into a Consent to Commitment Increase agreement with the Administrative Agent, which increasesThe Amended Long-Term Facility provides aggregate borrowing capacity underof $3.5 billion, an increase of $500 million from the Company's prior amended and restated credit agreement. The Amended Long-Term Facility from $2.5 billion to $3.0 billion, and the Administrative Agent received extension request consents fromhas a majority of lenders, which extends the terminationmaturity date of theAugust 6, 2024, unless earlier terminated, and amends and restates in its entirety our previously existing Third Amended and Restated Long-Term Facility by one year, toCredit Agreement, dated May 17, 2022. On March 28, 2019, the Amended Long-Term Facility was amended to add one of the Company's U.K. subsidiaries2016, as an additional borrower.amended.
The interest and fee rates payable with respect to the Amended Long-Term Facility based on our current debt rating are as follows: (1) the spread over LIBOREURIBOR is 1.125%; (2) the spread over prime is 0.125%; and (3) the unused commitmentticking fee is 0.125%0.100%. The Amended Long-Term Facility as amended, contains customary covenants and warranties including, among other things, a debt to capitalization ratio of less than or equal to 0.65 to 1.00 as of the last day of each fiscal quarter, and a rolling twelve month interest coverage ratio required to be greater than or equal to 3.0 to 1.0 for each fiscal quarter. In addition, the covenants limit our ability to (or to permit any subsidiaries to), subject to various exceptions and limitations: (i) merge with other companies; (ii) create liens on our property; (iii) incur debt or off-balance sheet obligations at the subsidiary level; (iv) enter into transactions with affiliates, except on an arms-length basis or with or between subsidiaries; (v) enter into agreements restricting the payment of subsidiary dividends or restricting the making of loans or repayment of debt by subsidiaries to the Company or other subsidiaries; and (vi) enter into agreements restricting the creation of liens on our assets.level.
In addition to the committed $3.0$3.5 billion Amended Long-Term Facility, we have a committed European facility and committed credit facilities in Brazil. The European facility provides borrowings up to €250 million (approximately $284 million at June 30, 2019 and $286 million at December 31, 2018), maturing on September 26, 2019. The committed credit facilities in Brazil provide borrowings up to 1.0 billion Brazilian reais (approximately $261$240 million at JuneSeptember 30, 2019 and $258 million at December 31, 2018), maturing through 2022. On August 5, 2019 we terminated a €250 million European revolving credit facility that we entered into in July 2015. The termination of this facility did not have a material impact on our Consolidated Condensed Financial Statements.
We had no0 borrowings outstanding under the committed credit facilities at JuneSeptember 30, 2019 or December 31, 2018.
Notes Payable
Notes payable, which consist of short-term borrowings payable to banks or commercial paper, are generally used to fund working capital requirements. The fair value of our notes payable approximates the carrying amount due to the short maturity of these obligations. As previously disclosed, during the third quarter of 2019 we repaid the $1 billion term loan.
The following table summarizes the carrying value of notes payable at JuneSeptember 30, 2019 and December 31, 2018:
Millions of dollars June 30, 2019 December 31, 2018 September 30, 2019 December 31, 2018
Commercial paper $947
 $
 $711
 $
Short-term borrowings due to banks 1,210
 1,034
 230
 1,034
Total notes payable $2,157
 $1,034
 $941
 $1,034

Transfers and Servicing of Financial Assets
In an effort to manage economic and geographic trade customer risk, from time to time, the Company will transfer, primarily without recourse, accounts receivable balances of certain customers to financial institutions resulting in a nominal impact recorded in interest and sundry (income) expense. These transactions are accounted for as sales of the receivables resulting in the receivables being de-recognized from the Consolidated Condensed Balance Sheets.


13



These transfers primarily do not require continuing involvement from the Company, however certain arrangements include servicing of transferred receivables by Whirlpool. Outstanding accounts receivable transferred under arrangements where the Company continues to service the transferred asset were $255$203 million and $161 million as of JuneSeptember 30, 2019 and December 31, 2018, respectively.


13


(8)    COMMITMENTS AND CONTINGENCIES
Embraco Antitrust Matters
Beginning in February 2009, ourthe Embraco compressor business headquartered in Brazil ("Embraco") was notified of antitrust investigations of the global compressor industry by government authorities in various jurisdictions. Embraco has resolved government investigations and related claims in various jurisdictions and certain other claims remain pending.
Whirlpool has agreed to retain potential liabilities related to this matter following closing of the Embraco sale transaction. We continue to defend these actions. While it is currently not possible to reasonably estimate the aggregate amount of costs which we may incur in connection with these matters, such costs could have a material adverse effect on our financial statements in any particular reporting period.
BEFIEX Credits and Other Brazil Tax Matters
In previous years, our Brazilian operations earned tax credits under the Brazilian government's export incentive program (BEFIEX). These credits reduced Brazilian federal excise taxes on domestic sales. Prior to the adoption of Topic 606, the excise taxes in our Brazilian operations were reflected in revenue. In accordance with Topic 606, we made a policy election to exclude non-income taxes from the transaction price. As a result, these credits were reflected in interest and sundry (income) expense as they were monetized in 2017 and 2018.
In December 2013, the Brazilian government reinstituted the monetary adjustment index applicable to BEFIEX credits that existed prior to July 2009, when the Brazilian government required companies to apply a different monetary adjustment index to BEFIEX credits. Whether use of the reinstituted index should be given retroactive effect for the July 2009 to December 2013 period has been subject to review by the Brazilian courts. In the third quarter of 2017, the Brazilian Supreme Court ruled that the reinstituted index should be given retroactive effect for the July 2009 to December 2013 period, which ruling has been appealedwas subsequently affirmed by the Brazilian government.Supreme Court, but remains subject to further proceedings. Based on this ruling, we were entitled to recognize $72 million in additional credits, which were recognized in prior periods. As of JuneSeptember 30, 2019, no BEFIEX credits remain to be monetized.
Our Brazilian operations have received tax assessments for income and social contribution taxes associated with certain monetized BEFIEX credits. We do not believe BEFIEX credits are subject to income or social contribution taxes. We believe these tax assessments are without merit and are vigorously defending our positions. We have not provided for income or social contribution taxes on these BEFIEX credits, and based on the opinions of tax and legal advisors, we have not accrued any amount related to these assessments as of JuneSeptember 30, 2019. The total amount of outstanding tax assessments received for income and social contribution taxes relating to the BEFIEX credits, including interest and penalties, is approximately 1.9 billion Brazilian reais (approximately $499$465 million as of JuneSeptember 30, 2019).
Relying on existing Brazilian legal precedent, in 2003 and 2004, we recognized tax credits in an aggregate amount of $26 million, adjusted for currency, on the purchase of raw materials used in production ("IPI tax credits"). The Brazilian tax authority subsequently challenged the recording of IPI tax credits. No such credits have been recognized since 2004. In 2009, we entered into a Brazilian government program ("IPI Amnesty") which provided extended payment terms and reduced penalties and interest to encourage tax payers to resolve this and certain other disputed tax credit amounts. As permitted by the program, we elected to settle certain debts through the use of other existing tax credits and recorded charges of approximately $34 million in 2009 associated with these matters. In July 2012, the Brazilian revenue authority notified us that a portion of our proposed settlement was rejected and we received tax assessments of 251253 million Brazilian reais (approximately $66$61 million as of JuneSeptember 30, 2019), reflecting interest and penalties to date. We believe these tax assessments are without merit and we are vigorously defending our position. The government's assessment in this case relies heavily on its arguments regarding taxability of BEFIEX credits for certain years, which we are disputing in one of the BEFIEX government assessment cases cited in the prior paragraph. Because the IPI Amnesty case is moving faster than the BEFIEX taxability case, we could be required to pay the IPI Amnesty assessment before obtaining a final decision in the BEFIEX taxability case.


14


In 2001, Brazil adopted a law making the profits of controlled foreign corporations of Brazilian entities subject to income and social contribution tax regardless of whether the profits were repatriated ("CFC Tax"). Our Brazilian subsidiary, along with other corporations, challenged tax assessments on foreign profits on constitutionality and other grounds. In April 2013, the Brazilian Supreme Court ruled on one of our cases, finding that the law is constitutional, but remanded the case to a lower court for consideration of other arguments raised in our appeal, including the existence of tax treaties with jurisdictions in which controlled foreign corporations are domiciled. As of JuneSeptember 30, 2019, our potential exposure for income and social contribution taxes relating to profits of controlled foreign corporations, including interest and penalties and net of expected foreign tax credits, is approximately 210114 million Brazilian reais


14


(approximately $55 (approximately $27 million as of JuneSeptember 30, 2019). We believe these tax assessments are without merit and are vigorously defending our positions. Based on the opinion of our tax and legal advisors, we have not0t accrued any amount related to these assessments as of JuneSeptember 30, 2019.
In addition to the IPI tax credit and CFC Tax matters noted above, other assessments issued to us by the Brazilian tax authorities related to non-income and income tax matters, and other matters, are at various stages of review in numerous administrative and judicial proceedings. The amounts related to these assessments will continue to be increased by monetary adjustments at the Selic rate, which is the benchmark rate set by the Brazilian Central Bank. In accordance with our accounting policies, we routinely assess these matters and, when necessary, record our best estimate of a loss. We believe these tax assessments are without merit and are vigorously defending our positions.
Litigation is inherently unpredictable and the conclusion of these matters may take many years to ultimately resolve. Amounts at issue in potential future litigation could increase as a result of interest and penalties in future periods. Accordingly, it is possible that an unfavorable outcome in these proceedings could have a material adverse effect on our financial statements in any particular reporting period.
ICMS Credits
We also filed legal actions in Brazil to recover certain social integration and social contribution taxes paid over gross sales including ICMS receipts, which is a form of Value Added Tax in Brazil. During 2017, we sold the rights to certain portions of this litigation to a third party for 90 million Brazilian reais (approximately $27 million at December 31, 2017). In the first quarter of 2019, we received a favorable decision in the largest of these ICMS legal actions. This decision is final and not subject to appeals. Based on the opinion of our tax and legal advisors, we recognized a gain of approximately $84 million, after related taxes and fees, during the first quarter in connection with this decision. This amount reflects approximately $142 million in indirect tax credits ("credits") that we are entitled to monetize in future periods, offset by approximately $43 million in taxes, which have been paid, and $15 million in taxes and fees respectively, that we anticipate will be fully paid in 2019.

In the second quarter of 2019, we received favorable final, non-appealable decisions in two2 smaller ICMS legal actions. Based on the opinion of our tax and legal advisors, we recognized a gain of approximately $35 million, after related taxes and fees, during the second quarter in connection with this decision. This amount reflects approximately $54 million in credits that we are entitled to monetize in future periods, offset by approximately $18 million in taxes, which have been paid, and $1 million in taxes and fees respectively, that we anticipate will be paid in 2019.
The ICMS credits and related fees are recorded in interest and sundry (income) expense in our Consolidated Condensed Statements of Comprehensive Income.Income (Loss). The Brazilian tax authorities have sought clarification before the Brazilian Supreme Court (in a leading case involving another taxpayer) of certain matters, including the amount of these credits (i.e., the gross rate or net credit amount), and certain other matters that could affect the rights of Brazilian taxpayers regarding these credits.credits, and a hearing is scheduled for December 2019. If the Brazilian tax authorities challenge our rights to these credits, we may become subject to new litigation related to credits already monetized and/or disallowance of further credit monetization. Based on the opinions of our tax and legal advisors, we have not accrued any amounts related to potential future litigation regarding these credits.
The Company has similar cases with other Brazilian subsidiaries related to approximately $15 million in potential ICMS credits for which we have yet to receive a ruling. There is substantial uncertainty about both the amount and timing of any recovery, and as such, no amounts have been recognized.
Competition Investigation
In 2013, the French Competition Authority ("FCA") commenced an investigation of appliance manufacturers and retailers in France. The investigation includes a number of manufacturers, including the Whirlpool and Indesit operations in France.



15


On June 26, 2018, Whirlpool France SAS, a subsidiary of the Company, reached an agreement with the staff of the FCA to settle the first part of its investigation, which relates to a 14-month period during parts of 2006-07 and 2008-09. In the third quarter of 2018, we accrued €95 million after entering into a preliminary settlement agreement with the FCA. On December 6, 2018, the FCA's college issued its final decision, setting the final amount of the fine at €102 million, with €56 million attributable to Whirlpool's France business and €46 million attributable to Indesit's France business. Payment of the Indesit portion of the FCA fine (€46 million, or approximately $52 million at March 31, 2019) was made in the first quarter of 2019 and payment of the Whirlpool portion of the FCA fine (€56 million, or approximately $63 million) was made in April 2019. Under the terms of a settlement with Indesit's former owners, the former owners paid €17 million out of escrow to the Company in the second quarter of 2019.


15



The second part of the FCA investigation, which is expected to focus primarily on manufacturer interactions with retailers, is ongoing. The Company is cooperating with this investigation. Although it is currently not possible to assess the impact, if any, this matter may have on our financial statements, the resolution of the second part of the FCA investigation could have a material adverse effect on our financial statements in any particular reporting period.
Trade Customer Insolvency

In 2017, Alno AG and certain affiliated companies filed for insolvency protection in Germany. Bauknecht Hausgeräte GmbH, a subsidiary of the Company, was a long-standing supplier to Alno and certain of its affiliated companies. The Company was also a former indirect minority shareholder of Alno. In August 2018, the insolvency trustee asserted €174.5 million in clawback and related claims against Bauknecht. We are reviewing the claims made by the insolvency trustee. Based on our preliminary understanding of the facts and the applicable law, we expect to vigorously defend against the claims. Although it is currently not possible to assess the impact this matter may have on our Consolidated Condensed Financial Statements, the resolution of this matter could have a material adverse effect on our financial statements in any particular reporting period.

Other Litigation
We are currently defending against two lawsuits that have been certified for class action treatment in U.S. federal court, relating to two top-load washing machine models. We believe the lawsuits are without merit and are vigorously defending them. Given the preliminary stage of the proceedings, we cannot reasonably estimate a range of loss, if any, at this time. The resolution of this matter could have a material adverse effect on our financial statements in any particular reporting period.
We are currently vigorously defending a number of other lawsuits related to the manufacture and sale of our products which include class action allegations, and may become involved in similar actions. These lawsuits allege claims which include negligence, breach of contract, breach of warranty, product liability and safety claims, false advertising, fraud, and violation of federal and state regulations, including consumer protection laws. In general, we do not have insurance coverage for class action lawsuits. We are also involved in various other legal actions arising in the normal course of business, for which insurance coverage may or may not be available depending on the nature of the action. We dispute the merits of these suits and actions, and intend to vigorously defend them. Management believes, based upon its current knowledge, after taking into consideration legal counsel's evaluation of such suits and actions, and after taking into account current litigation accruals, that the outcome of these matters currently pending against Whirlpool should not have a material adverse effect, if any, on our financial statements.


16


Product Warranty and Legacy Product Corrective Action Reserves
Product warranty reserves are included in other current and other noncurrent liabilities in our Consolidated Condensed Balance Sheets. The following table summarizes the changes in total product warranty liability reserves for the periods presented:


Product Warranty
Product Warranty
Millions of dollars
2019
2018
2019
2018
Balance at January 1
$268

$277

$268

$277
Issuances/accruals during the period
128

145

329

218
Settlements made during the period/other
(143)
(147)
(208)
(216)
Balance at June 30
$253

$275
Balance at September 30
$389

$279
        
Current portion
$178

$200

$262

$204
Non-current portion
75

75

127

75
Total
$253

$275

$389

$279


In the normal course of business, we engage in investigations of potential quality and safety issues. As part of our ongoing effort to deliver quality products to consumers, we are currently investigating certain potential quality and


16


safety issues globally. As necessary, we undertake to effect repair or replacement of appliances in the event that an investigation leads to the conclusion that such action is warranted.

As part of this process, we investigated incident reports associated with a particular component in certain Indesit-designed horizontal axis washers produced in EMEA. Whirlpool is discussing the issue with the appropriate regulatory authorities, and is assessing corrective action. In the secondthird quarter of 2019, we accrued approximately $105 million in estimated product warranty expense related to this matter. This estimate is based on several assumptions which are inherently unpredictable and which we may need to materially revise in the future.

For the three and nine months ended September 2019, we incurred approximately $12$14 million and $26 million, respectively, of additional product warranty expense related to our previously disclosed legacy Indesit dryer corrective action campaign in the UK. We continue to cooperate with the UK regulator, which continues to review the overall effectiveness of the modification program.

Guarantees

We have guarantee arrangements in a Brazilian subsidiary. For certain credit worthy customers, the subsidiary guarantees customer lines of credit at commercial banks to support purchases following its normal credit policies. If a customer were to default on its line of credit with the bank, our subsidiary would be required to assume the line of credit and satisfy the obligation with the bank. At JuneSeptember 30, 2019 and December 31, 2018, the guaranteed amounts totaled $107$116 million and $146 million, respectively. The fair value of these guarantees were nominal at JuneSeptember 30, 2019 and December 31, 2018. Our subsidiary insures against a significant portion of this credit risk for these guarantees, under normal operating conditions, through policies purchased from high-quality underwriters.
We provide guarantees of indebtedness and lines of credit for various consolidated subsidiaries. The maximum contractual amount of indebtedness and credit facilities available under these lines for consolidated subsidiaries totaled $2.6$2.7 billion and $3.5 billion at JuneSeptember 30, 2019 and December 31, 2018, respectively. Our total short-term outstanding bank indebtedness under guarantees was nominal$19 million at JuneSeptember 30, 2019 and $21 million at December 31, 2018.


17


(9)    PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS
The following table summarizes the components of net periodic pension cost and the cost of other postretirement benefits for the periods presented:


Three Months Ended June 30,
Three Months Ended September 30,


United States
Pension Benefits

Foreign
Pension Benefits

Other Postretirement
Benefits

United States
Pension Benefits

Foreign
Pension Benefits

Other Postretirement
Benefits
Millions of dollars
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
Service cost
$

$

$2

$2

$1

$1

$1

$1

$1

$1

$2

$2
Interest cost
31

29

6

6

4

3

30

30

5

5

4

3
Expected return on plan assets
(45)
(42)
(8)
(9)




(44)
(43)
(6)
(8)



Amortization:























Actuarial loss
12

13

2

2





11

14

2

2




Prior service credit








(3)
(2)
(1)
(1)




(2)
(3)
Settlement and curtailment (gain) loss






(3)




10





1



4
Net periodic benefit cost (credit)
$(2)
$

$2

$(2)
$2

$2
Net periodic cost
$7

$1

$2

$1

$4

$6

                        
 Six Months Ended June 30, Nine Months Ended September 30,
 United States
Pension Benefits
 Foreign
Pension Benefits
 Other Postretirement
Benefits
 United States
Pension Benefits
 Foreign
Pension Benefits
 Other Postretirement
Benefits
Millions of dollars 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018
Service cost $1
 $1
 $3
 $3
 $3
 $3
 $2
 $2
 $4
 $4
 $5
 $5
Interest cost 62
 59
 12
 12
 8
 7
 92
 89
 17
 17
 12
 10
Expected return on plan assets (89) (85) (15) (17) 
 
 (133) (128) (21) (25) 
 
Amortization: 
           
          
Actuarial loss 24
 26
 4
 5
 
 
 35
 40
 6
 7
 
 
Prior service credit (1) (1) 
 
 (5) 1
 (2) (2) 
 
 (7) (2)
Settlement and curtailment (gain) loss 
 
 1
 (3) (7) 
 10
 
 1
 (2) (7) 4
Net periodic benefit cost (credit) $(3) $
 $5
 $
 $(1) $11
Net periodic cost $4
 $1
 $7
 $1
 $3
 $17



17


The following table summarizes the net periodic cost recognized in operating profit and interest and sundry (income) expense for the periods presented:
  Three Months Ended June 30,
  United States
Pension Benefits
 Foreign
Pension Benefits
 Other Postretirement
Benefits
Millions of dollars 2019 2018 2019 2018 2019 2018
Operating profit (loss) $
 $
 $2
 $2
 $1
 $1
Interest and sundry (income) expense (2) 
 
 (4) 1
 1
Net periodic benefit cost $(2) $
 $2
 $(2) $2
 $2
            
 Six Months Ended June 30, Three Months Ended September 30,
 United States
Pension Benefits
 Foreign
Pension Benefits
 Other Postretirement
Benefits
 United States
Pension Benefits
 Foreign
Pension Benefits
 Other Postretirement
Benefits
Millions of dollars 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018
Operating profit (loss) $1
 $1
 $3
 $3
 $3
 $3
 $1
 $1
 $1
 $1
 $2
 $2
Interest and sundry (income) expense (4) (1) 2
 (3) (4) 8
 6
 
 1
 
 2
 4
Net periodic benefit cost $(3) $
 $5
 $
 $(1) $11
 $7
 $1
 $2
 $1
 $4
 $6
             
  Nine Months Ended September 30,
  United States
Pension Benefits
 Foreign
Pension Benefits
 Other Postretirement
Benefits
Millions of dollars 2019 2018 2019 2018 2019 2018
Operating profit (loss) $2
 $2
 $4
 $4
 $5
 $5
Interest and sundry (income) expense 2
 (1) 3
 (3) (2) 12
Net periodic benefit cost $4
 $1
 $7
 $1
 $3
 $17

During

18


On September 15, 2018, we contributed $358 million in cash contributions to the second quarter 2011, we modified retiree medical benefitspension trust for certain retirees to be consistent with those benefits provided by the Whirlpool Corporation Group Benefit Plan. We accounted for these changes as a plan amendment in 2011, resulting in a reduction in the postretirementour U.S. defined benefit obligation of $138pension plans, which included $350 million of which approximately $89 million of benefit hasdiscretionary contributions. There have been recognized in net earnings since 2011, with an offset to accumulated other comprehensive loss, net of tax. In response, a group of retirees initiated legal proceedings against Whirlpool asserting the above benefits are vested and changesno contributions to the pension trust for our U.S. defined benefit plan are not permitted.
On February 15, 2019, we received a favorable decision fromduring the United States Court of Appeals for the Sixth Circuit, which held that the benefits at issue are not vested for life and may be altered. On April 4, 2019, the Sixth Circuit Court issued a mandate to the district court, requiring it to take steps to implement this decision. The impact to the financial statements in 2019 related to this decision was not material and we do not expect a material financial impact in future periods.nine months ended September 30, 2019.
(10)    HEDGES AND DERIVATIVE FINANCIAL INSTRUMENTS
Derivative instruments are accounted for at fair value based on market rates. Derivatives where we elect hedge accounting are designated as either cash flow, fair value or net investment hedges. Derivatives that are not accounted for based on hedge accounting are marked to market through earnings. The accounting for changes in the fair value of a derivative depends on the intended use and designation of the derivative instrument. Hedging ineffectiveness and a net earnings impact occur when the change in the fair value of the hedge does not offset the change in the fair value of the hedged item. The ineffective portion of the gain or loss is recognized in earnings. The fair value of the hedge asset or liability is presented in either other current assets/liabilities or other noncurrent assets/liabilities in the Consolidated Condensed Balance Sheets and in other within cash used in operating activities in the Consolidated Condensed Statements of Cash Flows.
Using derivative instruments means assuming counterparty credit risk. Counterparty credit risk relates to the loss we could incur if a counterparty were to default on a derivative contract. We generally deal with investment grade counterparties and monitor the overall credit risk and exposure to individual counterparties. We do not anticipate nonperformance by any counterparties. The amount of counterparty credit exposure is limited to the unrealized gains, if any, on such derivative contracts. We do not require nor do we post collateral on such contracts.
Hedging Strategy
In the normal course of business, we manage risks relating to our ongoing business operations including those arising from changes in foreign exchange rates, interest rates and commodity prices. Fluctuations in these rates and prices can affect our operating results and financial condition. We use a variety of strategies, including the use of derivative instruments, to manage these risks. We do not enter into derivative financial instruments for trading or speculative purposes.


18


Foreign Currency Exchange Rate Risk
We incur expenses associated with the procurement and production of products in a limited number of countries, while we sell in the local currencies of a large number of countries. Our primary foreign currency exchange exposures result from cross-currency sales of products. As a result, we enter into foreign exchange contracts to hedge certain firm commitments and forecasted transactions to acquire products and services that are denominated in foreign currencies.
We enter into certain undesignated non-functional currency asset and liability hedges that relate primarily to short-term payables, receivables and intercompany loans. These forecasted cross-currency cash flows relate primarily to foreign currency denominated expenditures and intercompany financing agreements, royalty agreements and dividends. When we hedge a foreign currency denominated payable or receivable with a derivative, the effect of changes in the foreign exchange rates are reflected in interest and sundry (income) expense for both the payable/receivable and the derivative. Therefore, as a result of this economic hedge, we do not elect hedge accounting.
Commodity Price Risk
We enter into commodity derivative contracts on various commodities to manage the price risk associated with forecasted purchases of materials used in our manufacturing process. The objective of these hedges is to reduce the variability of cash flows associated with the forecasted purchase of commodities.


19


Interest Rate Risk
We may enter into interest rate swap agreements to manage interest rate risk exposure. Our interest rate swap agreements, if any, effectively modify our exposure to interest rate risk, primarily through converting certain floating rate debt to a fixed rate basis, and certain fixed rate debt to a floating rate basis. These agreements involve either the receipt or payment of floating rate amounts in exchange for fixed rate interest payments or receipts, respectively, over the life of the agreements without an exchange of the underlying principal amounts. We also may utilize a cross-currency interest rate swap agreement to manage our exposure relating to certain intercompany debt denominated in one foreign currency that will be repaid in another foreign currency. At JuneSeptember 30, 2019 there was $700 milliona notional amount of $1,275 million of outstanding interest rate swap agreements. At December 31, 2018 there were no0 outstanding interest rate swap agreements. The increase in the notional amount of cross-currency interest rate swaps during the nine months ended September 30, 2019 was designed to mitigate the risk from newly created intercompany debt agreements.
We may enter into swap rate lock agreements to effectively modifyreduce our exposure to interest rate risk by locking in interest rates on probable long-term debt issuances.
Net Investment Hedging
The following table summarizes our foreign currency denominated debt and foreign exchange forwards/options designated as net investment hedges at JuneSeptember 30, 2019 and December 31, 2018:
 Notional (Local) Notional (USD) Current Maturity Notional (Local) Notional (USD) Current Maturity
Instrument 2019 2018 2019 2018  2019 2018 2019 2018 
Senior note - 0.625% 500
 500
 $569
 $573
 March 2020 500
 500
 $545
 $573
 March 2020
Commercial Paper 296
 
 $337
 $
 July 2019
Foreign exchange forwards/options MXN 7,200
 MXN 7,200
 $375
 $366
 August 2022 MXN 7,200
 MXN 7,200
 $365
 $366
 August 2022

For instruments that are designated and qualify as a net investment hedge, the effective portion of the instruments' gain or loss is reported as a component of other comprehensive income (OCI) and recorded in accumulated other comprehensive loss. The gain or loss will be subsequently reclassified into net earnings when the hedged net investment is either sold or substantially liquidated. The remaining change in fair value of the hedge instruments represents the ineffective portion, which is immediately recognized in interest and sundry (income) expense in our Consolidated Condensed Statements of Comprehensive Income.Income (Loss). As of JuneSeptember 30, 2019 and December 31, 2018, there was no0 ineffectiveness on hedges designated as net investment hedges.


1920


The following table summarizes our outstanding derivative contracts and their effects in our Consolidated Condensed Balance Sheets at JuneSeptember 30, 2019 and December 31, 2018:

 
Fair Value of
Type 
of
Hedge
(1)

 
 
Fair Value of
Type 
of
Hedge
(1)

 


Notional Amount
Hedge Assets
Hedge Liabilities
Maximum Term (Months)
Notional Amount
Hedge Assets
Hedge Liabilities
Maximum Term (Months)
Millions of dollars
2019
2018
2019
2018
2019
2018

2019
2018
2019
2018
2019
2018
2019
2018

2019
2018
Derivatives accounted for as hedges

























Foreign exchange forwards/options
$3,108

$3,126

$43

$49

$44

$48

(CF/NI)
38
44
$3,093

$3,126

$113

$49

$43

$48

(CF/NI)
35
44
Commodity swaps/options
235

216

4

1

21

27

(CF)
24
30
181

216

4

1

18

27

(CF)
21
30
Interest rate derivatives 700
 
 14
 
 36
 
 (CF) 116 0 1,275
 
 27
 
 3
 
 (CF) 113 0
Total derivatives accounted for as hedges






$61

$50

$101

$75









$144

$50

$64

$75


Derivatives not accounted for as hedges

























Foreign exchange forwards/options
$2,804

$4,382

$20

$27

$23

$69

N/A
15
21
$2,952

$4,382

$46

$27

$22

$69

N/A
13
21
Commodity swaps/options
4

3









N/A
24
0
3

3









N/A
10
0
Total derivatives not accounted for as hedges






20

27

23

69









46

27

22

69


Total derivatives




$81

$77

$124

$144







$190

$77

$86

$144



Current




$40

$60

$52

$95







$97

$60

$48

$95


Noncurrent






41

17

72

49









93

17

38

49


Total derivatives




$81

$77

$124

$144







$190

$77

$86

$144



(1) Derivatives accounted for as hedges are considered either cash flow (CF) or net investment (NI) hedges.



2021


The following tables summarize the effects of derivative instruments and foreign currency debt designated as net investment hedges in our Consolidated Condensed Statements of Comprehensive Income (Loss) for the periods presented:
   Three Months Ended June 30,   Three Months Ended September 30,
 
Gain (Loss)
Recognized in OCI
(Effective Portion )
(2)
 
Gain (Loss)
Recognized in OCI
(Effective Portion )
(2)
Cash Flow Hedges - Millions of dollars 2019 2018 2019 2018
Foreign exchange forwards/optionsForeign exchange forwards/options $(4) $76
Foreign exchange forwards/options $79
 $11
Commodity swaps/optionsCommodity swaps/options (22) 
Commodity swaps/options (5) (19)
Interest rate derivativesInterest rate derivatives (5) 
Interest rate derivatives 54
 (2)
         
Net Investment HedgesNet Investment Hedges    Net Investment Hedges    
Foreign currencyForeign currency (20) 69
Foreign currency 55
 (14)
 $(51) $145
 $183
 $(24)
        
 Three Months Ended June 30, Three Months Ended September 30,
 
Location of Gain (Loss) Reclassified from
OCI into Earnings
(Effective Portion)
 
Gain (Loss) Reclassified from
OCI into Earnings
(Effective Portion)
 
Location of Gain (Loss) Reclassified from
OCI into Earnings
(Effective Portion)
 
Gain (Loss) Reclassified from
OCI into Earnings
(Effective Portion)
Cash Flow Hedges - Millions of dollars 2019 2018 2019 2018
Foreign exchange forwards/options Net sales $(1) $
 Net sales $(1) $(1)
Foreign exchange forwards/options Cost of products sold 6
 (6) Cost of products sold 5
 1
Foreign exchange forwards/options Interest and sundry (income) expense (4) 50
 Interest and sundry (income) expense 49
 33
Commodity swaps/options (3)
 Cost of products sold $(6) $10
 Cost of products sold (7) 1
Interest rate derivatives Interest expense $3
 $(1) Interest expense 3
 
Interest rate derivatives Interest and sundry (income) expense (8) 
 Interest and sundry (income) expense 47
 
   $(10) $53
   $96
 $34
        
 Three Months Ended June 30, Three Months Ended September 30,
 Location of Gain (Loss) Recognized on Derivatives not
Accounted for as Hedges
 
Gain (Loss) Recognized on Derivatives not
Accounted for as Hedges
 Location of Gain (Loss) Recognized on Derivatives not
Accounted for as Hedges
 
Gain (Loss) Recognized on Derivatives not
Accounted for as Hedges
Derivatives not Accounted for as Hedges - Millions of dollars 2019 2018 2019 2018
Foreign exchange forwards/options Interest and sundry (income) expense $(35) $134
 Interest and sundry (income) expense $53
 $(1)
(2) The tax impact of the cash flow hedges was $5$(8) million and $(5)$11 million for the three months ended JuneSeptember 30, 2019 and 2018.2018, respectively. The tax impact of the net investment hedges was $5$(15) million and $(13)$4 million for the three months ended JuneSeptember 30, 2019 and 2018, respectively.
(3) Cost for commodity swaps/options are recognized in cost of sales as products are sold.


2122


 Six Months Ended June 30, Nine Months Ended September 30,
 
Gain (Loss)
Recognized in OCI
(Effective Portion)
(4)
 
Gain (Loss)
Recognized in OCI
(Effective Portion)
(4)
Cash Flow Hedges - Millions of dollars 2019 2018 2019 2018
Foreign exchangeForeign exchange $24
 $76
Foreign exchange $103
 $87
Commodity swaps/optionsCommodity swaps/options 
 (15)Commodity swaps/options (5) (34)
Interest rate derivativesInterest rate derivatives (22) 

Interest rate derivatives 32
 (2)
         
Net Investment HedgesNet Investment Hedges    Net Investment Hedges    
Foreign currencyForeign currency (19) 6
Foreign currency 36
 (8)
 $(17) $67
 $166
 $43
        
 Six Months Ended June 30, Nine Months Ended September 30,
 
Location of Gain (Loss) Reclassified from
OCI into Earnings
(Effective Portion)
 
Gain (Loss) Reclassified from
OCI into Earnings
(Effective Portion)
 
Location of Gain (Loss) Reclassified from
OCI into Earnings
(Effective Portion)
 
Gain (Loss) Reclassified from
OCI into Earnings
(Effective Portion)
Cash Flow Hedges - Millions of dollars 2019 2018 2019 2018
Foreign exchange forwards/options Net sales $(2) $(2) Net sales $(3) $(3)
Foreign exchange forwards/options Cost of products sold 11
 (12) Cost of products sold 16
 (11)
Foreign exchange forwards/options Interest and sundry (income) expense 33
 56
 Interest and sundry (income) expense 82
 89
Commodity swaps/options (3)
 Cost of products sold (9) 23
 Cost of products sold (16) 24
Interest rate derivatives Interest expense 4
 (1) Interest expense 7
 (1)
Interest rate derivatives Interest and sundry (income) expense 
 

 Interest and sundry (income) expense 47
 
   $37
 $64
   $133
 $98
        
 Six Months Ended June 30, Nine Months Ended September 30,
 Location of Gain (Loss) Recognized on Derivatives not
Accounted for as Hedges
 
Gain (Loss) Recognized on Derivatives not
Accounted for as Hedges (2)
 Location of Gain (Loss) Recognized on Derivatives not
Accounted for as Hedges
 
Gain (Loss) Recognized on Derivatives not
Accounted for as Hedges (2)
Derivatives not Accounted for as Hedges - Millions of dollars 2019 2018 2019 2018
Foreign exchange forwards/options Interest and sundry (income) expense $(6) $63
 Interest and sundry (income) expense $47
 $(6)

(4) The tax impact of the cash flow hedges was $10$2 million and $0$11 million for the sixnine months ended JuneSeptember 30, 2019 and 2018.2018, respectively. The tax impact of the net investment hedges was $6$(9) million and $(1)$3 million for the sixnine months ended JuneSeptember 30, 2019 and 2018, respectively.
For cash flow hedges, the amount of ineffectiveness recognized in interest and sundry (income) expense was nominal for the periods ended JuneSeptember 30, 2019 and 2018. There were no hedges designated as fair value for the periods ended JuneSeptember 30, 2019 and 2018. The net amount of unrealized gain or loss on derivative instruments included in accumulated OCI related to contracts maturing and expected to be realized during the next twelve months is nominal.a gain of $22 million at September 30, 2019.
(11)    FAIR VALUE MEASUREMENTS
Fair value is measured based on an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions market participants would use in pricing an asset or liability. Assets and liabilities measured at fair value are based on a market valuation approach using prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. As a basis for considering such assumptions, a three-tiered fair value hierarchy is established, which prioritizes the inputs used in measuring fair value as follows: (Level 1) observable inputs such as quoted prices in active markets; (Level 2) inputs, other than the quoted prices in active markets that are observable, either directly or indirectly; and (Level 3) unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.


23


The non-recurring fair values represent only those assets whose carrying values were adjusted to fair value during the reporting period. See Note 17 to the Consolidated Condensed Financial Statements for additional information on the goodwill and other intangible impairment during the second quarter of 2018.



22


The following table summarizes the valuation of our assets and liabilities measured at fair value on a recurring basis at JuneSeptember 30, 2019 and December 31, 2018 are as follows:






Fair Value




Fair Value
Millions of dollars
Total Cost Basis
Level 1
Level 2
Total
Total Cost Basis
Level 1
Level 2
Total
Measured at fair value on a recurring basis:
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
Money market funds(1)

$634

$511

$3

$5

$631

$506

$634

$511
Short-term investments(1)

$620

$578

$1

$5

$619

$573

$620

$578
Net derivative contracts








(43)
(67)
(43)
(67)








104

(67)
104

(67)
Available for sale investments
7

7

18

12





18

12



7



12







12
(1) MoneyShort-term investments are primarily comprised of money market funds are comprised primarily of government obligations or time deposits with banks and other first tier obligations.highly liquid, low risk investments less than 90 days.
The following table summarizes the valuation of our assets measured at fair value on a non-recurring basis as of June 30, 2018:
  Fair Value
Millions of dollars Level 3
Measured at fair value on a non-recurring basis: 2018
Assets:  
Goodwill (2)
 $315
Indefinite-lived intangible assets (3)
 384
Definite-lived intangible assets (4)
 
Total level 3 assets $699

(2) Goodwill with a carrying amount of $894 million was written down to a fair value of $315 million resulting in a goodwill impairment charge of $579 million during the second quarter of 2018.

(3) Indefinite-lived intangible assets with a carrying amount of approximately $492 million were written down to a fair value of $384 million resulting in an impairment charge of $108 million during the second quarter of 2018.

(4) A definite-lived intangible asset with a carrying amount of approximately $60 million was written down to a fair value of $0 million resulting in an impairment charge of $60 million during the second quarter of 2018.

Goodwill

We have four4 reporting units for which we assess for impairment. We use a discounted cash flow analysis to determine fair value and consistent projected financial information in our analysis of goodwill and intangible assets. The discounted cash flow analysis for the quantitative impairment assessment for the EMEA reporting unit during the second quarter of 2018 utilized a discount rate of 12%. Based on the quantitative assessment performed, the carrying value of the EMEA reporting unit exceeded its fair value resulting in a goodwill impairment charge of $579 million during the second quarter of 2018.

Other Intangible Assets

The relief-from-royalty method for the quantitative impairment assessment for other intangible assets in the EMEA reporting unit during the second quarter of 2018 utilized discount rates ranging from 11.5% - 16% and royalty rates ranging from 1.5% - 3.5%. Based on the quantitative impairment assessment performed, the carrying value of certain other intangible assets, primarily the Indesit and Hotpoint* brands, exceeded their fair value, resulting in an impairment charge of $168 million during the second quarter of 2018.

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




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


24



South Africa Business Disposal Group

During the second quarter of 2019, we entered into an agreement to sell our South Africa business. WeAt the time of the agreement we classified this disposal group as held for sale and recorded it at fair value because it was lower than the carrying amount. Fair value was estimated based on the cash purchase price (Level 2 input) and we recorded an impairment charge of $35 million for the write-down of the assets to the fair value of $5 million.


*Whirlpool ownership During the third quarter of 2019, we completed the Hotpoint brand insale of our South Africa business and adjusted the EMEA and Asia Pacific regions isloss on disposal based on the carrying amount at the closing date. The adjustment was not affiliated withmaterial to the Hotpoint brand sold in the Americas.Consolidated Condensed Financial Statements


23


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

Naples Manufacturing Plant Restructuring Action

During the third quarter of 2019, we entered into a preliminary purchase agreement with a third-party purchaser for the reconversion of our Naples, Italy manufacturing plant. We recorded an impairment charge of $25 million for the write-down of certain assets to their fair value of $0. Fair value was based on a feasibility study considering future use internally and marketability externally (Level 2 input). These assets were fully impaired because they were determined to have no alternative use or salvage value and insufficient cash flows to support recoverability of the carrying amount.

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

Other Fair Value Measurements
The fair value of long-term debt (including current maturities) was $4.92$4.97 billion and $4.17 billion at JuneSeptember 30, 2019 and December 31, 2018, respectively, and was estimated using discounted cash flow analysis based on incremental borrowing rates for similar types of borrowing arrangements (Level 2 input).


25


(12)    STOCKHOLDERS' EQUITY
The following table summarizes the changes in stockholders' equity for the periods presented:
   Whirlpool Stockholders' Equity     Whirlpool Stockholders' Equity  
 Total 
Retained
Earnings
 
Accumulated Other
Comprehensive Income (Loss)
 
Treasury Stock/
Additional Paid-
in-Capital
 
Common
Stock
 
Non-
Controlling
Interests
 Total 
Retained
Earnings
 
Accumulated Other
Comprehensive Income (Loss)
 
Treasury Stock/
Additional Paid-
in-Capital
 
Common
Stock
 
Non-
Controlling
Interests
Balances, December 31, 2018 $3,205
 $6,933
 $(2,695) $(2,059) $112
 $914
 $3,205
 $6,933
 $(2,695) $(2,059) $112
 $914
Comprehensive income                        
Net earnings 474
 471
 
 
 
 3
 474
 471
 
 
 
 3
Other comprehensive income 93
 
 93
 
 
 
 93
 
 93
 
 
 
Comprehensive income 567
 471
 93
 
 
 3
 567
 471
 93
 
 
 3
Adjustment to beginning retained earnings (1)
 61
 61
 
 
 
 
 61
 61
 
 
 
 
Stock issued (repurchased) (40) 
 
 (40) 
 
 (40) 
 
 (40) 
 
Dividends declared (74) (74) 
 
 
 
 (74) (74) 
 
 
 
Balances, March 31, 2019 3,719
 7,391
 (2,602) (2,099) 112
 917
 3,719
 7,391
 (2,602) (2,099) 112
 917
Comprehensive income                        
Net earnings 72
 67
 
 
 
 5
 72
 67
 
 
 
 5
Other comprehensive income (56) 
 (55) 
 
 (1) (56) 
 (55) 
 
 (1)
Comprehensive income 16
 67
 (55) 
 
 4
 16
 67
 (55) 
 
 4
Stock issued (repurchased) 13
 
 
 13
 
 
 13
 
 
 13
 
 
Dividends declared (81) (78) 
 
 
 (3) (81) (78) 
 
 
 (3)
Balances, June 30, 2019 3,667
 7,380
 (2,657) (2,086) 112
 918
 3,667
 7,380
 (2,657) (2,086) 112
 918
Comprehensive income            
Net earnings 364
 358
 
 
 
 6
Other comprehensive income 55
 
 54
 
 
 1
Comprehensive income 419
 358
 54
 
 
 7
Stock issued (repurchased) (54) 
 
 (54) 
 
Dividends declared (83) (79) 
 
 
 (4)
Balances, September 30, 2019 $3,949
 $7,659
 $(2,603) $(2,140) $112
 $921

(1) Increase to beginning retained earnings is due to the adoption of ASU 2016-02 [increase of approximately $61 million (net of tax)]. For additional information regarding the adoption of this accounting standard, see Notes 1 and 3 to the Consolidated Condensed Financial Statements.


2426


   Whirlpool Stockholders' Equity     Whirlpool Stockholders' Equity  
 Total 
Retained
Earnings
 
Accumulated Other
Comprehensive Income (Loss)
 
Treasury Stock/
Additional Paid-
in-Capital
 
Common
Stock
 
Non-
Controlling
Interests
 Total 
Retained
Earnings
 
Accumulated Other
Comprehensive Income (Loss)
 
Treasury Stock/
Additional Paid-
in-Capital
 
Common
Stock
 
Non-
Controlling
Interests
Balances, December 31, 2017 $5,128
 $7,352
 $(2,331) $(935) $112
 $930
 $5,128
 $7,352
 $(2,331) $(935) $112
 $930
Comprehensive income                        
Net earnings 94
 94
 
 
 
 
 94
 94
 
 
 
 
Other comprehensive income 5
 
 4
 
 
 1
 5
 
 4
 
 
 1
Comprehensive income 99
 94
 4
 
 
 1
 99
 94
 4
 
 
 1
Adjustment to beginning retained earnings (2)
 72
 72
 
 
 
 
 72
 72
 
 
 
 
Adjustment to beginning accumulated other comprehensive loss (17) 
 (17) 
 
 
 (17) 
 (17) 
 
 
Stock issued (repurchased) 16
 
 
 16
 
 
 16
 
 
 16
 
 
Dividends declared (78) (78) 
 
 
 
 (78) (78) 
 
 
 
Balances, March 31, 2018 5,220
 7,440
 (2,344) (919) 112
 931
 5,220
 7,440
 (2,344) (919) 112
 931
Comprehensive income                        
Net earnings (639) (657) 
 
 
 18
 (639) (657) 
 
 
 18
Other comprehensive income (163) $
 (162) $
 $
 $(1) (163) 
 (162) 
 
 (1)
Comprehensive income (802) (657) (162) 
 
 17
 (802) (657) (162) 
 
 17
Stock issued (repurchased) (990) $
 
 $(990) $
 $
 (990) 
 
 (990) 
 
Dividends declared (84) (82) 
 
 
 (2) (84) (82) 
 
 
 (2)
Balances, June 30, 2018 3,344
 6,701
 (2,506) (1,909) 112
 946
 3,344
 6,701
 (2,506) (1,909) 112
 946
Comprehensive income            
Net earnings 216
 210







6
Other comprehensive income (86) 

(84)




(2)
Comprehensive income 130
 210
 (84) 
 
 4
Stock issued (repurchased) (90) 



(90)



Dividends declared (76) (74)






(2)
Balances, September 30, 2018 $3,308
 $6,837
 $(2,590) $(1,999) $112
 $948

(2) Increase to beginning retained earnings is due to the following accounting standard adoptions: ASU 2014-09 [increase of approximately $0.4 million], ASU 2016-01 [increase of approximately $17 million] and ASU 2016-16 [increase of approximately $56 million].


2527


Other Comprehensive Income (Loss)
The following table summarizes our other comprehensive income (loss) and related tax effects for the periods presented:
 Three Months Ended June 30, Three Months Ended September 30,
 2019 2018 2019 2018
Millions of dollars Pre-taxTax EffectNet Pre-taxTax EffectNet Pre-taxTax EffectNet Pre-taxTax EffectNet
Currency translation adjustments (3)
 $(54)$5
$(49) $(177)$(13)$(190) $35
$(15)$20
 $(82)$4
$(78)
Cash flow hedges (21)5
(16) 23
(5)18
 32
(8)24
 (44)11
(33)
Pension and other postretirement benefits plans 11
(2)9
 13
(4)9
 17
(6)11
 32
(7)25
Other comprehensive income (loss) (64)8
(56) (141)(22)(163) 84
(29)55
 (94)8
(86)
Less: Other comprehensive income (loss) available to noncontrolling interests (1)
(1) (1)
(1) 1

1
 (2)
(2)
Other comprehensive income (loss) available to Whirlpool $(63)$8
$(55) $(140)$(22)$(162) $83
$(29)$54
 $(92)$8
$(84)
        
 Six Months Ended June 30, Nine Months Ended September 30,
 2019
2018 2019
2018
Millions of dollars Pre-taxTax EffectNet Pre-taxTax EffectNet Pre-taxTax EffectNet Pre-taxTax EffectNet
Currency translation adjustments(3)
 $38
$6
$44
 $(189)$(1)$(190) $73
$(9)$64
 $(271)$3
$(268)
Cash flow (35)10
(25) (3)
(3)
Cash flow hedges (3)2
(1) (47)11
(36)
Pension and other postretirement benefits plans 22
(4)18
 50
(15)35
 39
(10)29
 82
(22)60
Other comprehensive income (loss) 25
12
37
 (142)(16)(158) 109
(17)92
 (236)(8)(244)
Less: Other comprehensive income (loss) available to noncontrolling interests (1)

(1) 


 


 (2)
(2)
Other comprehensive income (loss) available to Whirlpool $26
$12
$38
 $(142)$(16)$(158) $109
$(17)$92
 $(234)$(8)$(242)
`(3) Currency translation adjustments includes net investment hedges.
Reclassifications Out of Accumulated Other Comprehensive Income (Loss)
The following table provides the reclassification adjustments out of accumulated other comprehensive income (loss), by component, which was included in net earnings for the three and sixnine months ended JuneSeptember 30, 2019:
 Three Months Ended Six Months Ended  Three Months Ended Nine Months Ended 
Millions of dollars (Gain) Loss Reclassified (Gain) Loss Reclassified Classification in Earnings (Gain) Loss Reclassified (Gain) Loss Reclassified Classification in Earnings
Pension and postretirement benefits, pre-tax 11
 22
 Interest and sundry (income) expense 21
 43
 Interest and sundry (income) expense



2628


Net Earnings per Share
Diluted net earnings per share of common stock include the dilutive effect of stock options and other share-based compensation plans. Basic and diluted net earnings per share of common stock for the periods presented were calculated as follows:
 Three Months Ended June 30, Six Months Ended June 30, Three Months Ended September 30, Nine Months Ended September 30,
Millions of dollars and shares 2019
2018 2019 2018 2019
2018 2019 2018
Numerator for basic and diluted earnings per share - Net earnings (loss) available to Whirlpool $67
 $(657) $538
 $(563) $358
 $210
 $896
 $(353)
Denominator for basic earnings per share - weighted-average shares 63.8
 69.1
 63.9
 70.1
 63.6
 64.5
 63.8
 68.2
Effect of dilutive securities - share-based compensation 0.5
 
 0.5
 
 0.6
 0.8
 0.5
 
Denominator for diluted earnings per share - adjusted weighted-average shares 64.3
 69.1
 64.4
 70.1
 64.2
 65.3
 64.3
 68.2
Anti-dilutive stock options/awards excluded from earnings per share 1.5
 2.0
 1.5
 1.9
 1.3
 1.7
 1.5
 1.9

Share Repurchase Program
On July 25, 2017, our Board of Directors authorized a share repurchase program of up to $2 billion. During the sixnine months ended JuneSeptember 30, 2019, we repurchased 360,326718,421 shares under this share repurchase program at an aggregate price of approximately $50100 million. At JuneSeptember 30, 2019, there were approximately $750700 million in remaining funds authorized under this program.
Share repurchases are made from time to time on the open market as conditions warrant. These programs doThe program does not obligate us to repurchase any of our shares and they haveit has no expiration date.
(13)    RESTRUCTURING CHARGES
We periodically take action to improve operating efficiencies, typically in connection with business acquisitions or changes in the economic environment. Our footprint and headcount reductions and organizational integration actions relate to discrete, unique restructuring events, primarily reflected in the following plans:
In 2015, we committed to a restructuring plan to integrate our Italian legacy operations with those of Indesit. The industrial restructuring plan which was approved by the relevant labor unions and signed by the Italian government in 2015, provided for the closure or repurposing of certain manufacturing facilities and headcount reductions at other facilities. In addition, the restructuring plan provided for headcount reductions in the salaried employee workforce. These actions are substantially complete.complete as of September 30, 2019.
In 2018, we announced actions in EMEA to reduce fixed costs by $50 million. The initiatives primarily include headcount reductions throughout the EMEA region. Additionally, we exited domestic sales operations in Turkey. We expect these actions will be substantially complete in 2019 with approximately $26 million expense remaining.
The following table summarizes the restructuring actions above for the six months ended June2019. As of September 30, 2019, and the total costsapproximately $21 million remains to date for each plan:
Millions of dollars2019Total
Indesit$8
$236
EMEA fixed cost actions$38
$52








27


The following table summarizes the changes to our restructuring liability during the six months ended June 30, 2019:
Millions of dollarsDecember 31, 2018Charges to EarningsCash PaidNon-Cash and OtherJune 30, 2019
Employee termination costs$84
$49
$(80)$
$53
Asset impairment costs
28
(7)(12)9
Facility exit costs(9)4
(11)
(16)
Other exit costs21
5
(3)
23
Total$96
$86
$(101)$(12)$69

The following table summarizes the restructuring charges by operating segment for the period presented:
 Six Months Ended
Millions of dollarsJune 30, 2019
North America$
EMEA77
Latin America8
Asia1
Corporate / Other
Total$86

be expensed.

On May 31, 2019, we announced our intention to reconvert our Naples, Italy manufacturing plant and potentially sell the plant to a third party. Such actions areOn September 16, 2019, we entered into a preliminary agreement to sell the plant to a third-party purchaser and to support costs associated with the transition. Finalization of the transaction is subject to continued negotiation and discussionsatisfaction of certain conditions precedent, including consultation with the Italian government certain labor unions and potential third-party purchasers,unions.

In connection with this action, we incurred approximately $25 million in asset impairment costs and are subject to regulatoryapproximately $4 million in other associated costs during the nine months ended September 30, 2019. We anticipate that we will incur approximately $19 million in employee-related costs and legal review, as well as final approvalapproximately $79 million in other associated costs in connection with this action. We estimate that $98 million of the relevant parties. Asestimated $127 million total costs will result in future cash expenditures. We estimate that approximately $122 million of June 30,the $127 million total costs will be incurred in 2019 and that approximately $73 million of the Company has not committedestimated $98 million total cash expenditures will occur in 2019. We expect these actions to a specific restructuring plan, therefore no liability has been incurred related to this matter.be completed in 2020.




2829


The following table summarizes the restructuring actions above for the nine months ended September 30, 2019 and the total costs to date for each plan:
Millions of dollars2019Total
Indesit$9
$237
EMEA fixed cost actions$45
$59
Naples$29
$29

The following table summarizes the changes to our restructuring liability during the nine months ended September 30, 2019:
Millions of dollarsDecember 31, 2018Charges to EarningsCash PaidNon-Cash and OtherSeptember 30, 2019
Employee termination costs$84
$66
$(101)$
$49
Asset impairment costs
56
(7)(41)8
Facility exit costs(9)15
(19)
(13)
Other exit costs21
5
(4)(3)19
Total$96
$142
$(131)$(44)$63

The following table summarizes the restructuring charges by operating segment for the period presented:
 Nine Months Ended
Millions of dollarsSeptember 30, 2019
North America$
EMEA132
Latin America7
Asia3
Corporate / Other
Total$142





30


(14)    INCOME TAXES
Income tax expense (benefit) was $130313 million and $(2)$311 million for the three and sixnine months ended JuneSeptember 30, 2019, respectively, compared to income tax expense of $30$7 million and $45$52 million in the same periods of 2018. For the three months ended JuneSeptember 30, 2019,, the increase in the effective tax rate from the prior period is due primarily to a higher levelthe impact of earnings and related tax expensethe sale of Embraco, prior period adjustments and impact of changes in enacted tax rates. For the sixnine months ended JuneSeptember 30, 2019, the decreaseincrease in the effective tax rate from the prior period is due to valuation allowance releases, partially offset by higher leveltax expense on the sale of earnings and related tax expense,Embraco, prior period adjustments , non-deductible impairments and government payments.payments, partially offset by valuation allowance releases. Total tax expense related to the sale of Embraco was $150 million and $161 million for the three and nine months ended September 30, 2019, respectively, of which approximately $107 million was calculated based on the US statutory tax rate.
For additional information on prior period adjustments, see Note 1 to the Consolidated Condensed Financial Statements.
The following table summarizes the difference between income tax expense (benefit) at the U.S. statutory rate of 21% and the income tax expense (benefit) at effective worldwide tax rates for the respective periods:


Three Months Ended June 30,
Six Months Ended June 30,
Three Months Ended September 30,
Nine Months Ended September 30,
Millions of dollars
2019
2018
2019
2018
2019
2018
2019
2018
Earnings (loss) before income taxes
$202

$(609)
$544

$(500)
$677

$223

$1,221

$(277)

Income tax expense (benefit) computed at United States statutory tax rate
42

(128)
114

(105)
Income tax expense computed at United States statutory tax rate
142

47

256

(58)
Valuation allowances
39

39

(196)
39

1

4

(195)
43
U.S. transition tax and prior period adjustments 56
 78
 56
 78
Audits and settlements (13) (3) (13) (3) 7
 
 (6) 
U.S. foreign income items, net of credits
4

(34)
11

(45)
8

(108)
19

(146)
Changes in enacted tax rates 25
 
 25
 
 41
 (54) 66
 (54)
Non deductible impairments 
 138
 
 138
 
 
 
 138
Non deductible government payments 
 37
 
 37
 
 
 
 37
Sale of Embraco 43
 
 54
 
Other
33

(19)
57

(16)
15

40

61

14
Income tax expense (benefit) computed at effective worldwide tax rates
$130

$30

$(2)
$45
Income tax expense computed at effective worldwide tax rates
$313

$7

$311

$52

At the end of each interim period, we estimate the effective tax rate expected to be applicable for the full fiscal year and the impact of discrete items, if any, and adjust the quarterly rate as necessary.
Valuation Allowances
We routinely review the future realization of deferred tax assets based on projected future reversal of taxable temporary differences, available tax planning strategies and projected future taxable income.  We have reduced the valuation allowance to reflect the estimated amount of certain deferred tax assets associated with net operating losses and other deferred tax assets we believe are now more-likely-than-not to be realized.  During the first quarter of 2019, upon completion of our $700 million bond offering, we used the proceeds to refinance and recapitalize various entities in the EMEA region. Based upon our existing transfer pricing policies, these actions are expected to provide sufficient future taxable income to realize the deferred tax assets. In addition, these actions injectinjected additional internal capital into certain EMEA entities to meet local country capitalization requirements repayand we repaid all outstanding borrowings under the Whirlpool EMEA Finance Term Loan, and prepare forin advance of the recently completed Embraco divestiture. Accordingly, we reduced the valuation allowance by $235 million during the first quarter of 2019. During the second quarter of 2019, we increased our total valuation allowance by $39 million related to disposalsthe exit of businesses inour Turkey domestic sales operations and sale of our South Africa business and tax planning strategies that arewere deemed to no longer be prudent.


2931


(15)    SEGMENT INFORMATION
Our reportable segments are based upon geographical region and are defined as North America, EMEA, Latin America and Asia. These regions also represent our operating segments. Each segment manufactures home appliances and related components, but serves strategically different marketplaces. The chief operating decision maker evaluates performance based on each segment's earnings (loss) before interest and taxes (EBIT), which we define as operating profit less interest and sundry (income) expense and excluding restructuring costs, asset impairment charges and certain other items that management believes are not indicative of the region's ongoing performance, if any. Total assets by segment are those assets directly associated with the respective operating activities. The "Other/Eliminations" column primarily includes corporate expenses, assets and eliminations, as well as restructuring costs, asset impairment charges and certain other items that management believes are not indicative of the region's ongoing performance, if any. Intersegment sales are eliminated within each region except compressor sales out of Latin America through June 30, 2019, which arewere included in Other/Eliminations.


3032


The tables below summarize performance by operating segment for the periods presented:


Three Months Ended June 30,
Three Months Ended September 30,

OPERATING SEGMENTS
OPERATING SEGMENTS

Millions of dollars

North
America

EMEA
Latin
America

Asia
Other/
Eliminations
Total
Whirlpool

North
America

EMEA
Latin
America

Asia
Other/
Eliminations
Total
Whirlpool
Net sales



















2019
$2,858

$1,032

$888

$430

$(22)$5,186

$3,010

$1,090

$632

$358

$1
$5,091
2018
2,782

1,096

852

428

(18)5,140

2,994

1,134

878

339

(19)5,326
Intersegment sales



















2019
$45

22

342

87

(496)

70

20

331

87

(508)
2018
70

26

341

84

(521)

66

19

371

100

(556)
Depreciation and amortization

































2019
$55

$58

$13

$17

$17
$160

$45

$46

$17

$17

$16
$141
2018
47

57

26

16

16
162

46

44

29

17

16
152
EBIT



















2019
$353

(16)
56

15

(154)254

387

(4)
29

9

301
722
2018
331

(25)
33

43

(944)(562)
360

(39)
61

13

(120)275
Total assets

































June 30, 2019
$7,988

$9,432

$5,119

$2,640

$(5,324)$19,855
September 30, 2019
$8,004

$9,345

$4,062

$2,524

$(5,529)$18,406
December 31, 2018
7,161

7,299

4,745

2,636

(3,494)18,347

7,161

7,299

4,745

2,636

(3,494)18,347
Capital expenditures



















2019
$43

17

21

19

12
112

35

24

23

17

10
109
2018
41

34

18

16

19
128

46

36

24

16

14
136
                    


Six Months Ended June 30,
Nine Months Ended September 30,

OPERATING SEGMENTS
OPERATING SEGMENTS

Millions of dollars

North
America

EMEA
Latin
America

Asia
Other/
Eliminations
Total
Whirlpool

North
America

EMEA
Latin
America

Asia
Other/
Eliminations
Total
Whirlpool
Net sales



















2019
$5,393

$2,036

$1,763

$801

$(47)$9,946

$8,403

$3,126

$2,395

$1,159

$(46)$15,037
2018
5,298

2,164

1,750

876

(37)10,051

8,292

3,298

2,628

1,215

(56)15,377
Intersegment sales



















2019
$111

43

679

171

(1,004)

181

63

1,010

258

(1,512)
2018
137

64

627

159

(987)

203

83

998

259

(1,543)
Depreciation and amortization

































2019
$104

$101

$31

$34

$32
$302

$149

$147

$48

$51

$48
$443
2018
96

114

64

34

31
339

142

158

93

51

47
491
EBIT



















2019
$665

(37)
101

22

(104)647

1,052

(41)
130

31

197
1,369
2018
619

(52)
90

62

(1,130)(411)
979

(91)
151

75

(1,250)(136)
Total assets

































June 30, 2019
$7,988

$9,432

$5,119

$2,640

$(5,324)$19,855
September 30, 2019
$8,004

$9,345

$4,062

$2,524

$(5,529)$18,406
December 31, 2018
7,161

7,299

4,745

2,636

(3,494)18,347

7,161

7,299

4,745

2,636

(3,494)18,347
Capital expenditures



















2019
$78

27

45

29

18
197

113

51

68

46

28
306
2018
64

40

31

27

32
194

110

76

55

43

46
330






3133


The following table summarizes the reconciling items in the Other/Eliminations column for total EBIT for the periods presented:
Three Months Ended June 30, Six Months Ended June 30,Three Months Ended September 30, Nine Months Ended September 30,
in millions20192018 2019201820192018 20192018
Items not allocated to segments:      
Restructuring costs$(60)$(44) $(86)$(188)$(56)$(28) $(142)$(216)
Divestiture related transition costs(11)
 (17)
Brazil indirect tax credit53

 180



 180

Product warranty and liability expense(119)
 (131)
(Gain) loss on sale and disposal of businesses516

 437

French antitrust settlement
(114) 
(114)

 
(114)
Impairment of goodwill and intangibles
(747) 
(747)

 
(747)
Legacy product warranty and liability expense

(12)
 (12)
Loss on disposal of businesses(79)
 (79)
Trade customer insolvency
(29) 
(29)
Corporate expenses and other(45)(39) (90)(81)(40)(63) (147)(144)
Total other/eliminations$(154)$(944) $(104)$(1,130)$301
$(120) $197
$(1,250)

A reconciliation of our segment information for total EBIT to the corresponding amounts in the Consolidated Condensed Statements of Comprehensive Income (Loss) is shown in the table below for the periods presented:
 Three Months Ended June 30, Six Months Ended June 30, Three Months Ended September 30, Nine Months Ended September 30,
in millions 20192018 20192018 20192018 20192018
Operating profit $191
$(472) $454
$(329) $693
$299
 $1,147
$(30)
Interest and sundry (income) expense (63)90
 (193)82
 (29)24
 (222)106
Total EBIT $254
$(562) $647
$(411) $722
$275
 $1,369
$(136)
Interest expense 52
47
 103
89
 45
52
 148
141
Income tax expense (benefit) 130
30
 (2)45
Income tax expense 313
7
 311
52
Net earnings (loss) $72
$(639) $546
$(545) $364
$216
 $910
$(329)
Less: Net earnings available to noncontrolling interests 5
18
 8
18
 6
6
 14
24
Net earnings available to Whirlpool $67
$(657) $538
$(563)
Net earnings (loss) available to Whirlpool $358
$210
 $896
$(353)

(16)    DIVESTITURES AND HELD FOR SALE
Embraco Sale Transaction
On April 23, 2018, our Board of Directors approved the sale of Embraco and we subsequently entered into an agreement to sell the compressor business for a cash purchase price of $1.08 billion, subject to customary adjustments including for indebtedness, cash and working capital at closing.

On July 1, 2019, we closedcompleted the sale of Embraco. BasedEmbraco and received cash proceeds of $1.1 billion inclusive of anticipated cash on hand at the cash purchase price, we estimate a gain, nettime of taxes, in the range of approximately $375 to $425 million.closing. With the proceeds from this transaction, we will repayrepaid the outstanding term loan amount recorded in notes payable of approximately $1 billion as required under the April 23, 2018 Term Loan Agreement.Agreement with Citibank, N.A., as Administrative Agent.
In connection with the sale, we recorded a pre-tax gain, net of transaction and other costs, of $511 million ($350 million net of taxes) during the three and nine months ended September 30, 2019. The recognition of the gain and repayment of the outstanding term loan will occur in the third quarter of 2019.

The estimated gaincalculation is subject to change based on the final transaction amounts, including the net book value of held for sale assets at the closing date and the finalization of the amounts for closing costs, taxesworking capital and other customary adjustments for indebtedness, cash and working capital. Please see "Embraco Sale Transaction" in the Management's Discussion and Analysis section for additional information on the agreement.post-closing adjustments.
Embraco iswas reported within our Latin America reportable segment and meetsmet the criteria for held for sale accounting.accounting through the closing date. The operations of Embraco dodid not meet the criteria to be presented as discontinued operations. The assets and liabilities of Embraco were de-consolidated as of the closing date and there are no remaining carrying amounts in the Consolidated Condensed Balance Sheets as of September 30, 2019.




3234



The carrying amounts of the major classes of Embraco's assets and liabilities at JuneSeptember 30, 2019 and December 31, 2018 include the following:

Millions of dollars
June 30, 2019
December 31, 2018September 30, 2019
December 31, 2018
Accounts receivable, net of allowance of $2 and $8, respectively232
 198
Accounts receivable, net of allowance of $0 and $8, respectively
 198
Inventories234
 165

 165
Prepaid and other current assets30
 42

 42
Property, net of accumulated depreciation of $532 and $616, respectively386
 364
Property, net of accumulated depreciation of $0 and $616, respectively
 364
Right of use assets43
 

 
Other noncurrent assets38
 49

 49
Total assets$963
 $818
$
 $818
      
Accounts payable$394
 $361
$
 $361
Accrued expenses15
 27

 27
Accrued advertising and promotion8
 12

 12
Other current liabilities56
 55

 55
Lease liabilities36
 

 
Other noncurrent liabilities15
 34

 34
Total liabilities$524
 $489
$
 $489

The following table summarizes Embraco's earnings before income taxes for the periods presented:
Three Months Ended June 30, Six Months Ended June 30,Three Months Ended September 30, Nine Months Ended September 30,
Millions of dollars2019 2018 2019 20182019 2018 2019 2018
Earnings before income taxes$24
 $9
 $47
 $16
$
 $21
 $47
 $37

South Africa Sale TransactionBusiness Disposal

On June 28, 2019, we entered into an agreement to sell our South Africa operations for a cash purchase price of $5 million, subject to customary adjustments at closing.

TheOn September 5, 2019, we completed the sale of our South Africa businessoperations. In connection with the sale, we finalized the loss on disposal of $63 million which is reported within our EMEA reportable segment and meets the criteria for held for sale accounting. The operations of South Africa do not meet the criteria to be presented as discontinued operations.

We recorded a charge of $68 million in the Consolidated Condensed Statements of Comprehensive Income during the second quarter of 2019 associated with this transaction.nine months ended September 30, 2019. The loss includes a charge of $35$29 million for the write-down of the assets of the disposal group to fair value and $33$34 million of cumulative foreign currency translation adjustments included in the carrying amount of the disposal group to calculate the impairment.

The carrying amount ofSouth Africa business was reported within our EMEA reportable segment and met the criteria for held for sale assets and liabilitiesaccounting through the closing date. The operations of South Africa did not meet the criteria to be presented as of June 30, 2019 is $6 million and $34 million, respectively. Held for sale liabilities primarily includes the cumulative foreign currency translation adjustments that will be released upon closing of the transaction which will result in substantial liquidation of this foreign entity.
Earnings before income taxes for South Africa were immaterial for the periods presented.discontinued operations.
For additional information see Note 11 to the Consolidated Condensed Financial Statements.
Divestiture of Turkey Divestiture CostsDomestic Sales Operations
For the sixnine months ended JuneSeptember 30, 2019, we incurred approximately $11 million of divestiture related costs, primarily inventory liquidation costs, related to the exit from our domestic sales operations in Turkey.
For additional information see Note 13 to the Consolidated Condensed Financial Statements.





33

35


(17) GOODWILL AND OTHER INTANGIBLES

Goodwill

In connection with the preparation of our Consolidated Condensed Financial Statements for three months ended June 30, 2018, we identified indicators of goodwill impairment for our EMEA reporting unit based on our qualitative assessment, which required us to complete an interim quantitative impairment assessment. The primary indicator of impairment for our EMEA reporting unit was the segment's continuing negative financial performance in 2018 that did not improve as anticipated, primarily driven by significant volume loss. The actual operating results for the three months ended June 30, 2018 were significantly lower than forecasted resulting in weak business performance. While the Indesit integration activities were substantially complete, as of the impairment date, the operating and macro-environment in the EMEA region continued to be very challenging and had not improved as anticipated. While our commercial transformation and supply chain initiatives were progressing, as of the impairment determination date, progress on market share recovery was slower than previously anticipated and the business had been impacted by raw material inflation and currency headwinds.

In performing our quantitative assessment of goodwill during the second quarter of 2018, we estimated the reporting unit's fair value under an income approach using a discounted cash flow model. The income approach used the reporting unit's projections of estimated operating results and cash flows that were discounted using a market participant discount rate based on the weighted-average cost of capital. The main assumptions supporting the cash flow projections included revenue growth, EBIT margins and the discount rate. The financial projections reflect management's best estimate of economic and market conditions over the projected period including forecasted revenue growth, EBIT margins, tax rate, capital expenditures, depreciation and amortization, changes in working capital requirements and the terminal growth rate.

Based on our interim quantitative impairment assessment as of June 30, 2018, the carrying value of the EMEA reporting unit exceeded its fair value by $579 million and we recorded a goodwill impairment charge in this amount in 2018.

Other Intangible Assets

In connection with the preparation of our Consolidated Condensed Financial Statements for three months ended June 30, 2018, we identified indicators of impairment associated with other intangible assets in our EMEA reporting unit based on our qualitative assessment, which required us to complete an interim quantitative impairment assessment. The primary indicator of impairment was the continuing decline in revenue from weaker volumes through the six months ended June 30, 2018 that did not improve as anticipated. The actual operating results for the three months ended June 30, 2018 were significantly lower than forecasted.

In performing our quantitative assessment of other intangible assets, primarily brands, we estimate the fair value using the relief-from-royalty method which requires assumptions related to projected revenues from our long-range plans; assumed royalty rates that could be payable if we did not own the brand; and a market participant discount rate based on a weighted-average cost of capital.

Based on our interim quantitative impairment assessment as of June 30, 2018, the carrying value of certain other intangible assets, including Indesit and Hotpoint*, exceeded their fair value, and we recorded an impairment charge of $168 million in 2018.

The estimated undiscounted cash flows for all other long-lived assets, excluding goodwill and indefinite-life intangibles, exceeded their carrying value as of June 30, 2018.

See Note 11 to the Consolidated Condensed Financial Statements for additional information on the fair value measurement and disclosure related to the goodwill and other intangibles impairment.






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



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The estimates of future cash flows used in determining the fair value of goodwill and intangible assets involve significant management judgment and are based upon assumptions about expected future operating performance, economic conditions, market conditions and cost of capital. Inherent in estimating the future cash flows are uncertainties beyond our control, such as changes in capital markets. The actual cash flows could differ materially from management's estimates due to changes in business conditions, operating performance and economic conditions.
ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
ABOUT WHIRLPOOL
Whirlpool Corporation ("Whirlpool"), the world's leading major home appliance company, was incorporated in 1955 under the laws of Delaware and was founded in 1911. Whirlpool manufactures products in 14 countries and markets products in nearly every country around the world. We have received worldwide recognition for accomplishments in a variety of business and social efforts, including leadership, diversity, innovative product design, business ethics, social responsibility and community involvement. We conduct our business through four operating segments, which we define based on geography. Whirlpool's operating segments consist of North America, Europe, Middle East and Africa ("EMEA"), Latin America and Asia. Whirlpool had approximately $21 billion in annual sales and 92,000 employees in 2018. The world's leading major home appliance company claim is based on most recently available publicly reported annual revenues among leading appliance manufacturers.  
OVERVIEW

Whirlpool had strong second-quarterthird-quarter GAAP net earnings available to Whirlpool of $67$358 million (net earnings margin of 7.0%), or $1.04$5.57 per share, compared to a GAAP net lossearnings available to Whirlpool of $(657)$210 million (net earnings margin of 3.9%), or $3.22 per share, in the same prior-year period. Non-recurring items negativelyOn a GAAP basis, net earnings margin was favorably impacted prior-year net loss available to Whirlpool by a gain on the sale of the Embraco compressor business of approximately $860$511 million and previously-announced global cost-based pricing benefits, partially offset by product warranty and liability expense of $119 million.

Whirlpool delivered record second-quartera strong global performance with ongoing (non-GAAP) earnings per share of $4.01 and EBIT margin expansion of approximately 30 basis points,7.2%, driven by strong price/mix results in North America, positive price/mixAmerican and sustained fixed cost discipline.significant margin improvement in EMEA resulting from execution of strategic actions to restore profitability. These results were partially offset by continued cost inflationtrade inventory timing and increased brand investments.soft industry demand in certain markets.

In addition, we completed the sale of our Embraco business unit and will use the proceeds to paypaid down our outstanding term loan, in the third quarter, making significant progress towards our long-term Gross Debt/Debt to EBITDA goal of 2.0.

Our second-quarterthird-quarter results strengthendemonstrate continued progress towards delivering our confidence in delivering onlong term goals and our full-year financial commitments of margin expansion and improved free cash conversion.














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RESULTS OF OPERATIONS
The following table summarizes the consolidated results of operations for the periods presented:
Three Months Ended June 30, Six Months Ended June 30,Three Months Ended September 30, Nine Months Ended September 30,
Consolidated - Millions of dollars, except per share data2019 2018 Better/(Worse) 2019 2018 Better/(Worse)2019 2018 Better/(Worse) 2019 2018 Better/(Worse)
Units (in thousands)16,249
 16,120
 0.8% 31,241
 31,413
 (0.5)%17,093
 17,658
 (3.2)% 48,334
 49,071
 (1.5)%
Net sales$5,186
 $5,140
 0.9 $9,946
 $10,051
 (1.0)$5,091
 $5,326
 (4.4) $15,037
 $15,377
 (2.2)
Gross margin932
 880
 5.9 1,744
 1,692
 3.1741
 895
 (17.2) 2,485
 2,587
 (3.9)
Selling, general and administrative584
 541
 (8.1) 1,089
 1,046
 (4.3)491
 550
 11.0 1,580
 1,596
 1.0
Restructuring costs60
 44
 (37.0) 86
 188
 54.556
 28
 nm 142
 216
 34.3
Impairment of goodwill and other intangibles
 
  
 747
 nm
(Gain) loss on sale and disposal of businesses(516) 
 nm (437) 
 nm
Interest and sundry (income) expense(63) 90
 nm (193) 82
 nm(29) 24
 nm (222) 106
 nm
Interest expense52
 47
 (11.1) 103
 89
 (16.0)45
 52
 14.6 148
 141
 (4.7)
Income tax expense (benefit)130
 30
 nm (2) 45
 nm
Income tax expense313
 7
 nm 311
 52
 nm
Net earnings (loss) available to Whirlpool67
 (657) nm 538
 (563) nm358
 210
 70.5% 896
 (353) nm
Diluted net earnings available to Whirlpool per share$1.04
 $(9.50) nm $8.35
 $(8.03) nm$5.57
 $3.22
 73.2% $13.93
 $(5.18) nm
nm = not meaningful
Consolidated net sales increased 0.9%decreased 4.4% and decreased 1.0%2.2% for the three and sixnine months ended JuneSeptember 30, 2019, respectively, compared to the same periods in 2018. The increasedecrease for the three months ended was primarily driven by favorable product price/mix andthe unfavorable impacts of unit volume growth, partially offset by unfavorable impacts fromdeclines, foreign currency.currency and the divestiture of the Embraco compressor business. The decrease for the sixnine months ended was primarily driven by the unfavorable impacts fromof unit volume declines, foreign currency and unit volume declines,the divestiture of the Embraco compressor business, partially offset by the favorable impact of product price/mix. Excluding the impact of foreign currency, consolidated net sales increaseddecreased 3.5% and 2.3%increased 0.2% for the three and sixnine months ended JuneSeptember 30, 2019, respectively, compared to the same periods in 2018.
For additional information regarding non-GAAP financial measures including net sales excluding the impact of foreign currency, see the Non-GAAP Financial Measures section of this Management's Discussion and Analysis.
The consolidated gross margin percentage increased to 18.0% and 17.5% for the three months and sixnine months ended JuneSeptember 30, 2019 , respectively, compareddecreased to 14.5% and 16.5% from 16.8% and 16.8% for the same periods in 2018, respectively, which reflects favorablethe unfavorable impacts from unit volume declines, raw material inflation, foreign currency and estimated product price/mix,warranty expense related to washers produced in EMEA, partially offset by lower unit volumes, raw material inflation andthe favorable impact of foreign currency.product price/mix.
Our reportable operating segments are based upon geographical region and are defined as North America, EMEA, Latin America and Asia. The chief operating decision maker evaluates performance based on each segment's earnings (loss) before interest and taxes (EBIT), which we define as operating profit less interest and sundry (income) expense and excluding restructuring costs, asset impairment charges and certain other items that management believes are not indicative of the region's ongoing performance, if any. For additional information, see Note 15 to the Consolidated Condensed Financial Statements.
The following is a discussion of results for each of our operating segments.


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North America

Following are the results for the North America region:
chart-f6ea8406e07d524b921.jpg
chart-403f990a678656959b8.jpg
chart-197080598f565d12912.jpgchart-f303f503ff0b5c36a73.jpg


chart-d1f4ea515fd35211b6c.jpg


chart-aa3bcf7e496254e8abe.jpg

 





2019 compared to 2018
Units sold decreased 1.1%6.9% and 4.0%5.1% for the three and sixnine months ended JuneSeptember 30, 2019, respectively, compared to the same periods in 2018.









2019 compared to 2018
Net sales increased 0.5% and 1.3% for the three and nine months ended September 30, 2019, respectively, compared to the same periods in 2018. The increase for the three and nine months ended September 30, 2019 was primarily driven by the favorable impact from product price/mix, partially offset by lower unit volumes. Excluding the impact from foreign currency, net sales increased 0.6% and 1.6% for the three and nine months ended September 30, 2019, respectively, compared to the same periods in 2018.







2019 compared to 2018
Net sales increased 2.8%EBIT margin was 12.8% and 1.8%12.5% for the three and sixnine months ended JuneSeptember 30, 2019, respectively, compared to the same periods in 2018. The increase for the three12.0% and six months ended June 30, 2019 was primarily driven by favorable impacts from product price/mix, partially offset by lower unit volumes. Excluding the impact from foreign currency, net sales increased 3.0% and 2.1% for the three and six months ended June 30, 2019, respectively, compared to the same periods in 2018.






2019 compared to 2018
EBIT margin was 12.4% and 12.3% for the three and six months ended June 30, 2019, respectively, compared to 11.9% and 11.7%11.8% for the same periods in 2018. EBIT increased for the three and sixnine months ended JuneSeptember 30, 2019 compared to the same periods in 2018 primarily due to the favorable impact of product price/mix, partially offset by cost inflation (raw materials, tariffs and freight) and lower unit volumes.







3739


EMEA

Following are the results for the EMEA region:
chart-9b251add66435661b5a.jpgchart-ff37fac4f5255208a41.jpg
chart-6f1a308cf2f25721925.jpg
chart-aa92277262e95339b3d.jpgchart-273909aef9a853b1895.jpg

chart-67923ace026957d4b8a.jpg


 




2019 compared to 2018
Units sold increased 2.0%decreased 0.6% and 3.3%increased1.9% for the three and sixnine months ended JuneSeptember 30, 2019, respectively, compared to the same periods in 2018.









2019 compared to 2018
Net sales decreased 5.8%3.8% and 5.9%5.2% for the three and sixnine months ended JuneSeptember 30, 2019, respectively, compared to the same periods in 2018. The decrease for the three months ended JuneSeptember 30, 2019 was primarily driven by unfavorable impacts from foreign currency and product price/mix,unit volume decline, partially offset by unit volume growth.product price/mix. The decrease for the sixnine months ended JuneSeptember 30, 2019 was primarily driven by unfavorable impacts from foreign currency and product price/mix, partially offset by unit volume growth. Excluding the impact from foreign currency, net sales decreased 0.2%0.5% and increased 0.1% for the three and nine months ended September 30, 2019, respectively, compared to the same periods in 2018.







2019 compared to 2018
EBIT margin was (0.4)% and (1.3)% for the three and nine months ended September 30, 2019, respectively, compared to (3.4)% and (2.7)% for the same periods in 2018. EBIT increased for the three months ended September 30, 2019 compared to the same periods in 2018 primarily due to the favorable impacts of restructuring benefits. EBIT increased for the nine months ended September 30, 2019 primarily due to the favorable impacts of unit volume growth and restructuring benefits.



40


Latin America

Following are the results for the Latin America region:
chart-ca6465887ac65c7b951.jpg

chart-e842b505781e5e3c827.jpg


chart-d43cf26359f0530b9c9.jpg










2019 compared to 2018
Units sold decreased 8.2% and 0.7% for the three and sixnine months ended JuneSeptember 30, 2019, respectively, compared to the same periods in 2018.







2019 compared to 2018
Net sales decreased 27.9% and 8.9% for the three and nine months ended September 30, 2019, respectively, compared to the same periods in 2018. The decrease for the three and nine months ended September 30, 2019 was primarily driven by the divestiture of the Embraco compressor business and the unfavorable impact of foreign currency. Excluding the impact from foreign currency, net sales decreased 27.4% and 3.8% for the three and nine months ended September 30, 2019, respectively, compared to the same periods in 2018.











2019 compared to 2018
EBIT margin was 4.6% and 5.4% for the three and nine months ended September 30, 2019, respectively, compared to 7.0% and 5.7% for the same periods in 2018. The decrease in EBIT for the three and nine months ended September 30, 2019 was primarily due to the unfavorable impact of foreign currency and the divestiture of the Embraco compressor business, partially offset by the favorable impact of product price/mix in the home appliance business. Prior period results for the nine months ended were negatively impacted by a Brazil truck drivers' strike.


41


Asia

Following are the results for the Asia region:
chart-92e70cf0cb6c53918aa.jpg


chart-bc58033ca37059b89ca.jpg


chart-c74214df217453d4b55.jpg








2019 compared to 2018
Units sold increased 11.6% and 0.6% for the three and nine months ended September 30, 2019, respectively, compared to the same periods in 2018.







2019 compared to 2018
Net sales increased 5.7% and decreased 4.6% for the three and nine months ended September 30, 2019, respectively, compared to the same periods in 2018. The increase for the three months ended September 30, 2019 was primarily driven by the favorable impacts of unit volume growth in India, partially offset by the unfavorable impact of product price/mix and foreign currency. The decrease for the nine months ended September 30, 2019 was primarily driven by unfavorable impacts from foreign currency and product price/mix, partially offset by unit volume growth in India. Excluding the impact from foreign currency, net sales increased 7.1% and decreased 0.6% for the three and nine months ended September 30, 2019, respectively, compared to the same periods in 2018.






2019 compared to 2018
EBIT margin was (1.6)%2.4% and (1.8)%2.7% for the three and sixnine months ended June 30, 2019, respectively, compared to (2.3)% and (2.4)% for the same periods in 2018. EBIT increased for the three and six months ended June 30, 2019 compared to the same periods in 2018 primarily due to the favorable impacts of restructuring benefits.






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Latin America

Following are the results for the Latin America region:
chart-428910b2e991503d969.jpg
chart-770fb5869de554bc92e.jpg
chart-a85b21daca395da0a91.jpg











2019 compared to 2018
Units sold increased 1.7% and 3.8% for the three and six months ended June 30, 2019, respectively, compared to the same periods in 2018.






2019 compared to 2018
Net sales increased 4.1% and 0.7% for the three and six months ended June 30, 2019, respectively, compared to the same periods in 2018. The increase for the three and six months ended June 30, 2019 was primarily driven by favorable impacts from product price/mix and unit volume growth, partially offset by unfavorable impacts from foreign currency. Excluding the impact from foreign currency, net sales increased 9.6% and 8.1% for the three and six months ended June 30, 2019, respectively, compared to the same periods in 2018.





2019 compared to 2018
EBIT margin was 6.3% and 5.7% for the three and six months ended JuneSeptember 30, 2019, respectively, compared to 3.8% and 5.1%6.2% for the same periods in 2018. The favorableunfavorable impacts of product price/mix and brand investments in China were partially offset by the unfavorable impact of foreign currency. Prior period results were negatively impacted by the Brazil truck drivers' strike.





39


Asia

Following are the results for the Asia region:
chart-079ec7d56a2d5791bc9.jpg
chart-ff72cbcf48525f338e2.jpg
chart-b0a8a44b04cf5860a02.jpg









2019 compared to 2018
Units sold increased 2.3% and decreased 3.9% for the three and six months ended June 30, 2019, respectively, compared to the same periods in 2018.






2019 compared to 2018
Net sales increased 0.5% and decreased 8.6% for the three and six months ended June 30, 2019, respectively, compared to the same periods in 2018. For the three months ended June 30, 2019 net sales was comparable to the prior year and includes the favorable impacts of unit volume growth and cost productivity in India and product price/mix offset by the unfavorable impact of foreign currency. The decreaseIndia. Prior period results for the sixnine months ended June 30, 2019 was primarily driven by unfavorable impacts from lower unit volumes in China and foreign currency. Excluding the impact from foreign currency, net sales increased 4.7% and decreased 3.6% for the three and six months ended June 30, 2019, respectively, compared to the same periods in 2018.




2019 compared to 2018
EBIT margin was 3.6% and 2.8% for the three and six months ended June 30, 2019 compared to 10.1% and 7.1% for the same periods in 2018. The favorable impact of unit volume growth in India and product price/mix was offset by the unfavorable impact of lower unit volumes and brand investments in China. Prior period results were positively impacted by Chinese government incentives.



4042


Selling, General and Administrative
The following table summarizes selling, general and administrative expenses as a percentage of net sales by region for the periods presented:
 Three Months Ended June 30, Six Months Ended June 30, Three Months Ended September 30, Nine Months Ended September 30,
Millions of dollars 2019 
As a %
of Net Sales
2018 
As a %
of Net Sales
2019 
As a %
of Net Sales
2018 
As a %
of Net Sales
 2019 
As a %
of Net Sales
2018 
As a %
of Net Sales
2019 
As a %
of Net Sales
2018 
As a %
of Net Sales
North America $227 7.9% $206 7.4% $403 7.5% $367 6.9% $214 7.1% $211 7.1% $617 7.3% $578 7.0%
EMEA 126 12.2% 139 12.7% 250 12.3% 282 13.0% 119 10.9% 140 12.4% 369 11.8% 422 12.8%
Latin America 90 10.1% 84 9.8% 168 9.5% 170 9.7% 61 9.7% 95 10.8% 229 9.6% 265 10.1%
Asia 75 17.5% 64 14.8% 136 17.0% 127 14.5% 57 15.9% 54 16.0% 193 16.6% 181 14.9%
Corporate/other 66  48  132  100  40  50  172  150 
Consolidated $584 11.3% $541 10.5% $1,089 11.0% $1,046 10.4% $491 9.6% $550 10.3% $1,580 10.5% $1,596 10.4%
Consolidated selling, general and administrative expenses for the three and six months ended JuneSeptember 30, 2019 increaseddecreased compared to the same period in 2018 due to brand investments.ongoing restructuring activities and the divestiture of the Embraco compressor business. Consolidated selling, general and administrative expenses for the nine months ended September 30, 2019 is comparable.
Restructuring
We incurred restructuring charges of $60$56 million and $86$142 million for the three and sixnine months ended JuneSeptember 30, 2019, respectively, compared to $44$28 million and $188$216 million for the same periods in 2018. For the full year 2019, we expect to incur approximately $200 million of restructuring charges, as we reduce fixed costs primarily in the EMEA region.
For additional information, see Note 13 to the Consolidated Condensed Financial Statements.
Impairment of Goodwill and Other Intangibles
We recorded an impairment charge of $747 million related to goodwill ($579 million) and other intangibles ($168 million) for the three and sixnine months ended JuneSeptember 30, 2018 related to the EMEA reporting unit.
For additional information, see Note 11 and Note 17 to the Consolidated Condensed Financial Statements.
(Gain) Loss on Sale and Disposal of Businesses
We recorded a pre-tax gain of $511 million on the sale of the Embraco compressor business for the three and nine months ended September 30, 2019.
We incurred a loss of $79$74 million for the three and sixnine months ended JuneSeptember 30, 2019 related to charges on the pending sale of the South Africa business ($6863 million) and costs associated with the exit of the Turkey domestic sales operations ($11 million).
For additional information, see Note 16 to the Consolidated Condensed Financial Statements.
Interest and Sundry (Income) Expense
Interest and sundry (income) expense for the three and sixnine months ended JuneSeptember 30, 2019 increased compared to the same periods in 2018. The increase in interest and sundry income(income) expense for the three and six months ended September 30, 2019 was primarily due to foreign currency and the results of a legal settlement. The increase in interest and sundry (income) expense for the nine months ended September 30, 2019 was primarily due to Brazil indirect tax credits recorded of $53 million and $180 million respectively. These amounts reflect $54 million andwhich reflects $196 million of indirect tax credits, net of related fees. The comparable period in the prior year includes charges related to the preliminary FCA settlement of $111 million.
For additional information, see Note 8 and Note 10 to the Consolidated Condensed Financial Statements.


43


Interest Expense
Interest expense for the three and sixnine months ended JuneSeptember 30, 2019 increased comparedwas comparable to the same periods in 2018 primarily due to higher average short-term debt balances.





41


2018.
Income Taxes
Income tax expense (benefit) was $130313 million and $(2)$311 million for the three and sixnine months ended JuneSeptember 30, 2019 compared to income tax expense of $30$7 million and $45$52 million in the same periods of 2018. For the three months ended JuneSeptember 30, 2019,, the increase in the effective tax rate from the prior period is due primarily to a higher levelthe impact of earnings and related tax expensethe sale of Embraco, prior period adjustments and impact of changes in enacted tax rates. For the sixnine months ended JuneSeptember 30, 2019, the decreaseincrease in the effective tax rate from the prior period is due to valuation allowance releases, partially offset by higher leveltax expense on the sale of earnings and related tax expense,Embraco, prior period adjustments , non-deductible impairments and government payments.payments, partially offset by valuation allowance releases. Total tax expense related to the sale of Embraco was $150 million and $161 million for the three and nine months ended September 30, 2019, respectively, of which approximately $107 million was calculated based on the US statutory tax rate.
For additional information, see Note 1 and Note 14 to the Consolidated Condensed Financial Statements.
FINANCIAL CONDITION AND LIQUIDITY
Our objective is to finance our business through operating cash flow and the appropriate mix of long-term and short-term debt. By diversifying the maturity structure, we avoid concentrations of debt, reducing liquidity risk. We have varying needs for short-term working capital financing as a result of the nature of our business. We regularly review our capital structure and liquidity priorities, which include funding the business through capital and engineering spending to support innovation and productivity initiatives, funding our pension plan and term debt liabilities, providing return to shareholders and potential acquisitions.
Our short-term potential uses of liquidity include funding our ongoing capital spending, restructuring activities and returns to shareholders. We also have $573$546 million of long-term debt maturing in the next twelve months, and are currently evaluating our options in connection with this maturing debt, which may include repayment through refinancing, free cash flow generation, or cash on hand.
At JuneSeptember 30, 2019, we have $2,157$941 million of notes payable which consist of short-term borrowings payable to banks and commercial paper, which are generally used to fund working capital requirements. For additional information, see Note 7 to the Consolidated Condensed Financial Statements.
We monitor the credit ratings and market indicators of credit risk of our lending, depository, derivative counterparty banks, and customers regularly, and take certain actions to manage credit risk. We diversify our deposits and investments in short-term cash equivalents to limit the concentration of exposure by counterparty.
At JuneSeptember 30, 2019, we had cash or cash equivalents greater than 1% of our consolidated assets in China and Brazil,India, which represented 2.2% and 1.4%1.0%, respectively. In addition, we did not have any third-party accounts receivable greater than 1% of our consolidated assets in any single country outside of the United States, with the exceptions of Italy, which represented 1.1%.States. We continue to monitor general financial instability and uncertainty globally.
The Company had cash and cash equivalents of approximately $1.2$1.0 billion at JuneSeptember 30, 2019, of which substantially all was held by subsidiaries in foreign countries. For each of its foreign subsidiaries, the Company makes an assertion regarding the amount of earnings intended for permanent reinvestment, with the balance available to be repatriated to the United States. 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. However, if these funds were repatriated, we would be required to accrue and pay applicable United States taxes (if any) and withholding taxes payable to various countries. It is not practical to estimate the amount of the deferred tax liability associated with the repatriation of cash due to the complexity of its hypothetical calculation.

We continue to review customer conditions globally. At JuneSeptember 30, 2019, we had 280276 million Brazilian reais (approximately $73$66 million) in short and long-term receivables due to us from Maquina de Vendas S.A. In 2018, as part of their extrajudicial recovery plan, we agreed to receive payment of our outstanding receivable, plus interest, over


44


eight years under a tiered payment schedule. At JuneSeptember 30, 2019, we have 129134 million Brazilian reais (approximately $34$32 million) of insurance against this credit risk through policies purchased from high-quality underwriters.
For additional information on guarantees, see Note 8 to the Consolidated Condensed Financial Statements.
Embraco Sale Transaction

On April 24, 2018, we and certain of our subsidiaries entered into a purchase agreement with Nidec Corporation, a leading manufacturer of electric motors incorporated under the laws of Japan, to sell our Embraco business unit (the "Transaction").


42



On June 26, 2019, Whirlpool and Nidec received the European Commission's final approval of the Transaction, and the parties closed the Transaction on July 1, 2019. At closing, pursuant to the purchase agreement and a subsequent agreement memorializing the purchase price adjustment, the Company received $1.08$1.1 billion inclusive of anticipated cash on hand at the time of closing, with final purchase price amounts subject to customary post-closing working capital and indebtednessother customary post-closing adjustments. Whirlpool has agreed to retain certain liabilities relating to tax, environmental, labor and products following closing of the Transaction.

On August 9, 2019, the Company repaid $1.0 billion pursuant to the Company's April 23, 2018 Term Loan Agreement by and among the Company, Citibank, N.A., as Administrative Agent, JPMorgan Chase Bank, N.A. as Syndication Agent, and certain other financial institutions, representing full repayment of amounts borrowed under the term loan. As previously disclosed, the Company agreed to repay this outstanding term loan amount with the net cash proceeds received from the sale of Embraco.
For additional information on the Transaction, see Note 16 to the Consolidated Condensed Financial Statements.
Share Repurchase Program
For additional information about our share repurchase program, see Note 12 to the Consolidated Condensed Financial Statements.
Sources and Uses of Cash
The following table summarizes the net increase (decrease) in cash, cash equivalents and restricted cash for the periods presented:
 Six Months Ended June 30, Nine Months Ended September 30,
Millions of dollars 2019 2018 2019 2018
Cash provided by (used in):        
Operating activities $(821) $(584) $(566) $(615)
Investing activities (195) (109) 723
 (272)
Financing activities 678
 569
 (641) 750
Effect of exchange rate changes 9
 (42) (55) (74)
Net change in cash, cash equivalents and restricted cash $(329) $(166) $(539) $(211)
Cash Flows from Operating Activities
Cash used in operating activities during the sixnine months ended JuneSeptember 30, 2019 increaseddecreased compared to the same period in 2018, which primarily reflects the plannedimpact of the FCA settlement and payment, $350 million of discretionary pension funding in the prior year and temporarily higherthe impact of changes in working capital.capital, including seasonal production timing, inventory reduction efforts in the fourth quarter of 2018, shifts in trade customer mix, improved credit management activities and the divestiture of the Embraco compressor business.


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The timing of cash flows from operations varies significantly throughout the year primarily due to changes in production levels, sales patterns, promotional programs, funding requirements, credit management, as well as receivable and payment terms. Depending on the timing of cash flows, the 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 inprovided by investing activities during the sixnine months ended JuneSeptember 30, 2019 increased compared to the same period in 2018, which primarily reflects cash proceeds related to held-to-maturity securities (approximately $60 million) in 2018.the sale of Embraco.
Cash Flows from Financing Activities
Cash provided byused in financing activities during the sixnine months ended JuneSeptember 30, 2019 increased compared to the same period in 2018, which primarily reflects higher repayments of long-term debt (approximately $570(increase of $565 million), lower proceeds from borrowings of short-term and long-term debt (decrease of approximately $280 million)$1.8 billion) and lower stock repurchases under our share repurchase program primarily due to the 2018 modified Dutch auction tender offer (decrease of approximately $950 million)$1.0 billion).
Dividends paid in financing activities during the sixnine months ended JuneSeptember 30, 2019 was comparable to the same period in 2018.





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Financing Arrangements
The Company had total committed credit facilities of approximately $3.6$3.8 billion at JuneSeptember 30, 2019. The facilities are geographically diverse and reflect the Company's growing global operations. The Company believes these facilities are sufficient to support its global operations. We had no borrowings outstanding under the committed credit facilities at JuneSeptember 30, 2019 or December 31, 2018.
We anticipate amending the Amended Long-Term Facility in the near term to increase borrowing capacity and extend its duration.
For additional information about our financing arrangements, see Note 7 to the Consolidated Condensed Financial Statements.
Dividends
In April 2019, our Board of Directors approved a 4.3% increase in our quarterly dividend on our common stock to $1.20 per share from $1.15 per share.
Off-Balance Sheet Arrangements
In the ordinary course of business, we enter into agreements 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. At JuneSeptember 30, 2019, we had approximately $333$342 million outstanding under these agreements.
For additional information about our off-balance sheet arrangements, see Notes 7 and 8 to the Consolidated Condensed Financial Statements.
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 EBIT margin
Sales excluding foreign currency
Free cash flow


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Non-GAAP measures 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. EBIT margin is calculated by dividing EBIT by net sales for 2019 and 2018.sales. Ongoing EBIT margin is calculated by dividing ongoing EBIT by net sales for 2019 and 2018.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. Management believes that sales excluding foreign currency provides stockholders with a clearer basis to assess our results over time, excluding the impact of exchange rate fluctuations. We also disclose segment EBIT, which we define as operating profit less interest and sundry (income) expense and excluding restructuring costs, asset impairment charges and certain other items that management believes are not indicative of the region's ongoing performance, if any, as the financial metric used by the Company's Chief Operating Decision Maker to evaluate performance and allocate resources in accordance with ASC 280, Segment Reporting.
We believe that these non-GAAP measures provide meaningful information to assist investors and stockholders in understanding our financial results and assessing our prospects for future performance, and reflect an additional way of viewing aspects of our operations that, when viewed with our GAAP financial measures, provide a more complete understanding of our business. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names. These non-GAAP financial measures should not be considered in isolation or as a substitute for reported net


44


sales, net earnings available to Whirlpool, net earnings as a percentage of net sales and cash provided by (used in) operating activities, the most directly comparable GAAP financial measures. We strongly encourage investors and stockholders to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure.
Please refer to a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures below.
Ongoing Earnings Before Interest & Taxes (EBIT) Reconciliation:
in millions

Three Months Ended Six Months EndedThree Months Ended Nine Months Ended
20192018 2019201820192018 20192018
Net earnings (loss) available to Whirlpool(1)$67
$(657) $538
$(563)$358
$210
 $896
$(353)
Net earnings available to noncontrolling interests5
18
 8
18
6
6
 14
24
Income tax expense (benefit)130
30
 (2)45
Income tax expense313
7
 311
52
Interest expense52
47
 103
89
45
52
 148
141
Earnings (loss) before interest & taxes$254
$(562) $647
$(411)$722
$275
 $1,369
$(136)
Restructuring expense60
44
 86
188
56
28
 142
216
Trade customer insolvency
29
 
29
Divestiture related transition costs11

 17

(17)
 

Brazil indirect tax credit(53)
 (180)


 (180)
Loss on disposal of businesses79

 79

Legacy product warranty and liability expense12

 12

(Gain) loss on sale and disposal of businesses(516)
 (437)
Product warranty and liability expense119

 131

French antitrust settlement
114
 
114


 
114
Impairment of goodwill and other intangibles
747
 
747


 
747
Ongoing EBIT$363
$343
 $661
$638
$364
$332
 $1,025
$970
Free Cash Flow (FCF) Reconciliation:
in millions
Six Months Ended
20192018
Cash used in operating activities$(821)$(584)
Capital expenditures(197)(194)
Proceeds from sale of assets and business5
27
Change in restricted cash (1)
16
26
Free cash flow$(997)$(725)
   
Cash used in investing activities$(195)$(109)
Cash provided by financing activities$678
$569

(1) Net earnings margin is approximately 7.0% and 3.9% for the three months ended September 30, 2019 and September 30, 2018, respectively, and is calculated by dividing net earnings (loss) available to Whirlpool by consolidated net sales for the three months ended September 30, 2019 and September 30, 2018 of $5,091 and $5,326, respectively.


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Free Cash Flow (FCF) Reconciliation:
in millions
Nine Months Ended
20192018
Cash used in operating activities (2)
$(566)$(615)
Capital expenditures(306)(330)
Proceeds from sale of assets and business (3)
1,034
27
Change in restricted cash (4)
33
44
Repayment of term loan(1,000)
Free cash flow$(805)$(874)
   
Cash provided by (used in) investing activities$723
$(272)
Cash provided by (used in) financing activities$(641)$750
(2) Cash used in operating activities for the nine months ended September 30, 2019 includes $136 million of cash taxes paid for the sale of the Embraco compressor business.

(3) Proceeds from sale of assets and business for the nine months ended September 30, 2019 includes $1,011 million of net cash proceeds received to date for the sale of the Embraco compressor business.

(4) For additional information regarding restricted cash, see Note 4 to the Consolidated Condensed Financial Statements.


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FORWARD-LOOKING PERSPECTIVE
Earnings per diluted share presented below are net of tax, while each adjustment is presented on a pre-tax basis. TheOur anticipated full-year GAAP tax rate of approximately 25% includes the impact of the gain on sale of Embraco.The aggregate income tax impact of the taxable components of each adjustment is presented in the income tax impact line item at our anticipated 2019 full-year adjusted tax rate between 15% and 20%. We currently estimate earnings per diluted share and industry demand for 2019 to be within the following ranges:
20192019
Current OutlookCurrent Outlook
Estimated earnings per diluted share, for the year ending December 31, 2019$17.80$18.55$16.80$17.55
Including:  
Restructuring expense$(3.11)$(3.11)
Brazil indirect tax credit2.792.79
Divestiture related transition costs(0.49)
Loss on disposal of businesses(1.23)
Legacy product warranty and liability expense(0.19)
Gain on sale of business7.76
(Gain) loss on sale and disposal of businesses6.79
Product warranty and liability expense(2.03)
Income tax impact(0.97)(0.77)
Normalized tax adjustment(1.52)(1.62)
  
Industry demand  
North America(2)%—%(2)%—%
EMEA(1)%1%(1)%1%
Latin America~ 5%3%4%
Asia1%2%1%2%
For the full-year 2019, we continue to 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 up to $200 million and capital expenditures of approximately $625 million.
The table below reconciles projected 2019 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. We define free cash flow as cash provided by operating activities less capital expenditures and including proceeds from the sale of assets/businesses, and changes in restricted cash. The 2019 free cash flow outlook excludesincludes the net proceeds fromand the term loan repayment related to the sale of the Embraco business.business of approximately $1 billion. The change in restricted cash relates to the private placement funds paid by Whirlpool to acquire majority control of Whirlpool China (formerly Hefei Sanyo) in 2014 and which are used to fund capital and technical resources to enhance Whirlpool China's research and development and working capital, as required by the terms of the Hefei Sanyo acquisition completed in October 2014. For additional information regarding non-GAAP financial measures, see the Non-GAAP Financial Measures section of this Management's Discussion and Analysis.
 2019
Millions of dollarsCurrent Outlook
Cash provided by operating activities (1)
~$1,425
Capital expenditures, proceeds from sale of assets/businesses and changes in restricted cash(625)375
Repayment of term loan(1,000)
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.


49


The projections above are based on many estimates and are inherently subject to change based on future decisions made by management and the Board of Directors of Whirlpool, and significant economic, competitive and other uncertainties and contingencies.


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OTHER MATTERS
For additional information regarding certain of our loss contingencies/litigation, see Note 8 to the Consolidated Condensed Financial Statements.
Grenfell Tower
On June 23, 2017, London's Metropolitan Police Service released a statement that it had identified a Hotpoint–branded refrigerator as the initial source of the Grenfell Tower fire in West London. U.K. authorities are conducting investigations, including regarding the cause and spread of the fire. The model in question was manufactured by Indesit Company between 2006 and 2009, prior to Whirlpool's acquisition of Indesit in 2014. We are fully cooperating with the investigating authorities. Whirlpool has been named as a defendant in a product liability suit related to this matter, which suit is currently pending in Pennsylvania federal court. As these matters are ongoing, we cannot speculate on their eventual outcomes or potential impact on our financial statements; accordingly, we have not recorded any significant charges in 2018 or the sixnine months ended JuneSeptember 30, 2019. Additional claims may be filed related to this incident.
Antidumping and Safeguard Petitions
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 washers into the U.S. Those petitions resulted in orders imposing antidumping duties on certain washers imported from South Korea, Mexico, and China, and countervailing duties on certain washers from South Korea. These orders could be subject to administrative reviews and possible appeals. In March 2019, the order covering certain washers from Mexico was extended for an additional five years, while the order covering certain washers from South Korea was revoked.
Whirlpool also filed a safeguard petition in May 2017 to address our concerns that Samsung and LG are evading U.S. trade laws by moving production from countries covered by antidumping orders. A safeguard remedy went into effect in February 2018, implementing tariffs on finished washers and certain covered parts for three years. During the second year of the remedy, beginning February 7, 2019, the remedy imposes an 18% tariff on the first 1.2 million large residential washing machines imported into the United States and a 45% tariff on such imports in excess of 1.2 million, and also imposes a 45% tariff on washer tub, drum, and cabinet imports in excess of 70,000 units. The tariff rates on washers and covered parts will decline slightly during the third year of the remedy. The safeguard remedy is subject to an interim review was completed by the International Trade Commission during 2019. The President maintains discretion to modify the remedy.
U.S. Tariffs and Global Economy
The current domestic and international political environment, including existing and potential changes to U.S. policies related to global trade and tariffs, have resulted in uncertainty surrounding the future state of the global economy. The impact of previously-announced U.S. tariffs was a component of increased raw material costs during the quarter ended JuneSeptember 30, 2019. We expect these and other tariffs to impact material and freight costs in future quarters, which could require us to modify our current business practices and could have a material adverse effect on our financial statements in any particular reporting period.
Post-Retirement Benefit LitigationBrexit
For additional information regarding post-retirement benefit litigation, see Note 9In 2016, the UK held a referendum, the outcome of which was an expressed public desire to exit the European Union (“Brexit”), which has resulted in greater uncertainty related to the Consolidated Condensed Financial Statements.free movement of goods, services, people and capital between the UK and the EU. Many potential future impacts of Brexit remain unclear and could adversely impact certain areas of our business, including, but not limited to, an increase in duties and delays in the delivery of products, and adverse impacts to our suppliers and financing institutions. In order to mitigate the risks associated with Brexit, we are preparing for potential adverse impacts by collaborating across Company functions and working with external partners to develop the necessary contingency plans.



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ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
There have been no material changes to our exposures to market risk since December 31, 2018.
ITEM 4.CONTROLS AND PROCEDURES
(a)Evaluation of disclosure controls and procedures
Prior to filing this report, we completed an evaluation under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934) as of JuneSeptember 30, 2019. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of JuneSeptember 30, 2019.
(b)Changes in internal control over financial reporting
There were no changes in our internal control over financial reporting that occurred during the most recent quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.



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PART II. OTHER INFORMATION


ITEM 1.LEGAL PROCEEDINGS
Information with respect to legal proceedings can be found under the heading "Commitments and Contingencies" in Note 8 to the Consolidated Condensed Financial Statements contained in Part I, Item 1 of this report.
ITEM 1A.RISK FACTORS
There have been no material changes in our risk factors from those disclosed in Part I, Item 1A to our Annual Report on Form 10-K for the fiscal year ended December 31, 2018.
ITEM 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
On July 25, 2017, our Board of Directors authorized a share repurchase program of up to $2 billion. During the sixnine months ended JuneSeptember 30, 2019, we repurchased 360,326718,421 shares under this share repurchase program at an aggregate price of approximately $50100 million. At JuneSeptember 30, 2019, there were approximately $750700 million in remaining funds authorized under this program.
The following table summarizes repurchases of Whirlpool's common stock in the three months ended JuneSeptember 30, 2019:
Period (Millions of dollars, except number and price per share)Total Number of Shares PurchasedAverage Price Paid per ShareTotal Number of Shares Purchased as Part of Publicly Announced Plans or ProgramsApproximate Dollar Value of Shares that May Yet Be Purchased Under the Plans
April 1, 2019 through April 30, 2019
$

$750
May 1, 2019 through May 31, 2019
$

$750
June 1, 2019 through June 30, 2019
$
$
$750
       Total
$

 
Period (Millions of dollars, except number and price per share)Total Number of Shares PurchasedAverage Price Paid per ShareTotal Number of Shares Purchased as Part of Publicly Announced Plans or ProgramsApproximate Dollar Value of Shares that May Yet Be Purchased Under the Plans
July 1, 2019 through July 31, 201918,200
$148.29
18,200
$747
August 1, 2019 through August 31, 2019237,000
$137.05
237,000
$715
September 1, 2019 through September 30, 2019102,895
$143.96
102,895
$700
       Total358,095
$139.61
358,095
 
Share repurchases are made from time to time on the open market as conditions warrant. These programs doThe program does not obligate us to repurchase any of our shares and they haveit has no expiration date.
ITEM 3.DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4.MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5.OTHER INFORMATION
None.


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ITEM 6.EXHIBITS
Exhibit 2.1*10.1
Exhibit 10.2
  
Exhibit 31.1
  
Exhibit 31.2
  
Exhibit 32.1
  
101.INSExhibit 101XBRL Instance Document -The following financial statements from the instance document does not appearCompany’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2019, formatted in the Interactive Data File because its XBRLInline XBRL: (i) Consolidated Condensed Statements of Comprehensive Income (Loss), (ii) Consolidated Condensed Balance Sheets; (iii) Consolidated Condensed Statements of Cash Flows, and (iv) Notes to Consolidated Condensed Financial Statements, tagged as blocks of text and including detailed tags are embedded within the Inline XBRL document
  
101.SCHExhibit 104Cover Page Interactive Data File (formatted as Inline XBRL Taxonomy Extension Schema Document
101.CALXBRL Taxonomy Extension Calculation Linkbase Document
101.LABXBRL Taxonomy Extension Label Linkbase Document
101.PREXBRL Taxonomy Extension Presentation Linkbase Document
101.DEFXBRL Taxonomy Extension Definition Linkbase Documentand contained in Exhibit 101)
* Schedules (or similar attachments) to the Amendment to Purchase Agreement have been omitted from this filing pursuant to Item 601(a)(5) of Regulation S-K. The Company will furnish supplementally copies of such omitted schedules (or similar attachments) to the Securities and Exchange Commission upon request.


5053


SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
   WHIRLPOOL CORPORATION
   (Registrant)
 By: /s/ JAMES W. PETERS
 Name: James W. Peters
 Title: 
Executive Vice President
and Chief Financial Officer
 Date: JulyOctober 23, 2019



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