Whirlpool (WHR) 25 Jan 182017 Q4 Earnings call transcript

Company Profile

Participants

Max Tunnicliff	IR
Marc Bitzer	CEO
Jim Peters	CFO
David MacGregor	Longbow Research
Susan Maklari	Credit Suisse
Curtis Nagle	Banc of America Merrill Lynch
Michael Rehaut	JPMorgan
Sam Darkatsh	Raymond James
Ken Zener	KeyBanc Capital
Sam Eisner	Goldman Sachs
Megan McGrath	MKM Partners
Alvaro Lacayo	Gabelli & Company

Call transcript

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Operator

Good morning, and welcome to Whirlpool Corporation's Fourth Quarter 2017 Earnings Release Call. Today's call is being recorded.

For opening remarks and introductions, I would like to turn the call over to Senior Director of Investor Relations, Max Tunnicliff.

Max Tunnicliff

Thank you and welcome to our fourth quarter 2017 conference call.

Joining me today are Marc Bitzer, our Chief Executive Officer, and Jim Peters, our Chief Financial Officer.

with website available at track section the today our of whirlpool.com. remarks the at presentation Investors Our

Before we forward-looking begin, expectations. we you conduct let understanding me remind call, in will you we be Corporation's making Whirlpool statements assist this to future that as

actual reports. from statements are We presentation remind that our many differ want due indicative XX-K and operations. includes materially our our unrelated operations items of of, exclude not today’s We indicators measures discussed to important in latest could believe non-GAAP our from results to results Our they these or factors other these ongoing to, may measures. periodic you business as that be

trends to think Listeners are measures directly We the the mode. in comparable GAAP of supplemental with the to participants will ongoing At adjusted non-GAAP listen-only a time, for website most business section package reconciliation Investor are Relations you of all the in operations. items this posted for our on directed also provide our information analyzing better measures. baseline the

opened remarks, be call will questions. analyst Following our prepared the for

As over that, questions. Marc. the let turn ask we call that more With than me ask a no reminder, two to participants

Marc Bitzer

X slide highlights. show Thanks, morning everyone. and good On our quarter fourth we

a one-time As charge per release, line a million you were of saw in our in approximately our earnings reform. were non-cash to share earnings related by press tax impacted $X.XX QX ongoing with GAAP $XXX expectations.

since ahead XXXX. global margins expansion for We will the region, our remain XXXX. delivered a progressing mix strong on and in Since of basis quarter well We initiatives. It price expectations significant global are are pleased that in into a price delivered in XX.X% positive and intensity in progress last catalyst and margin quarter’s global first be our mix countries, These confident improvement. fixed continued despite are quarter was our they going mix announcement, with of price reduction positive we we’ve made many QX promotional price mix in cost North points we XXXX. American XX positioned

to stock business, $X.X testament million dividends, the more continue common this billion $XXX in and a to As and strength returned we of $XXX in year. paid cash strong we We to million in returning than levels expect record underlying repurchased shareholders XXXX. our of

decision I for jobs manufacturing quickly discuss outcome an of Before US I announced point including washers. American plant. the to on new safeguard But here victory we early at nearly to our that it This Clyde, has thankful financial our and litigation, manufacturing petition is our this Whirlpool. a turn to in a any will workers decade is without a government catalyst want positive is results, jobs After of this enable on United are financial remedy. doubt effective [new announced have for however XXXX. too Ohio States, quantify the [ph] XXX] the impact we At

quarter to and goals. year X, slide of long revenue growth the approximately X% We our we results of delivered to a our relates X.X%. turning it as Now term during financial show full growth

weaker quarter, the was the X.X% were bit period lower XX margins basis US and a in growth than demand Ongoing year. by EBIT countries quarter last fourth Our certain impacted for in points Europe. the same

quarter contributed key own nearly expectations. softer million The full EBIT result the reason the next for but million cash fourth in XXXX year, focus and elevated was the that a earnings management versus as year, For weaker actions the will full an launched than flow below last improvement margin a the was of margin recovery slide flow significant of I coming slide. unexpected major we’ve X, we our free on $XX our the the improvement show and for expected inventory prior years. in drivers of and On the to the delivered free I’m inventory countries. flow confident reduced US cash quarter cash renewed margin. will industry ongoing Free X.X% and the on discuss in taken deliver year year demand that margins actions full our other several we factors including XXX performance.

significant the net inflation the material for delivered increased we price line cost inflation. improved than During Cost material take we in expectations, takeout raw out quarter, year positive and mix and year-over-year. full more were with offsetting raw

and in On our quarterly the [indiscernible] in compared infrastructure fourth I and compared we to to performance approximately of related the category points, mixed to In quarter North In fourth price basis the quarter expenses prior positively higher timing mix more X, had expenses. slide by Finally due technology the a the product certain KitchenAid total, towards primarily XX cooking detail. we discuss year, improved price year. and will America, brand. prior mix

promotions. In in participation addition we reduced Friday slightly some Black our

America, continue full flat In recent our saw exit Jim the selling price to I’d transitions mix our America XXXX. Latin and like strong price rate North the that demand results. quarter and in to year mix of confident the was year. or we we of the the we price improvement the mix inventory will mix and financial for as unfavorable that primarily our in unfavorable fourth in year, was With category approximately pleased rest turn to in obsolete earlier price in the For offset world, through impact rate Europe. brand the exit through it review to are are Overall, mix over with due

Jim Peters

good morning and Thanks Marc everyone.

our prior sales results US billion, Net industry we our review flat region. reduced the X, certain for year. in below our holiday in Turning grew and participation expectations to creating quarter. we to $X.X the The were North America fourth quarter non-value fourth slide promotions

North flat, headwinds. XX pleased to was XX basis margins from are raw despite Overall While XX.X%, our with points in we improved impact basis revenue performance America. material a points

mix maintaining and the up Africa were year. positions X On share year, experienced million region. Net quarter fourth impacted prior profit Operating key driving Europe, operating $XX raw demand our year, the the several executing the are down price billion, we inflation year. that or actions in coming holiday improved were prior by X.X% our to significantly right growth. approximately we material confident Compared was basis to review below sales slide Middle We of negatively appropriate and the while prior for East deliver margins million, countries. are the in $X.X versus expectations results X, points. XXX We versus

to price by offset transitions brand We unfavorable mix also progress of our $XX experienced through million, actions. partially continue as we approximately pricing

completing we obsolete remaining (inaudible) in inventory likely margins integration and This on unfavorably the will first our our the XXXX, the As half we enter year. clearing of during early are year. focused impact

up price in marketing mix, ramp to the We half. improved product and expect spend availability, second from efficiency

to region. Turning million year. America inflation price industry Raw XXX Net solid the of XX, by margins we increase our these an profit approximately slide lessening headwinds Despite to points. we shift from Operating pressures. and $XX prior impacted X.X%. were Latin the were basis $XXX washers, X% or material million refrigeration million, was back mix The began margins delivered to review quarter results sales fourth for versus $XX margins.

were are period. we recorded for compared fourth operating Net We impacted $X of prior in to to the $XXX margins for the realized million on raw turn certain million tax were by quarter $XXX We an $XX sales loss continued year of inflation in approximately and million material million. the Brazil. of now and shown region, credits the slide results our Additionally, selling XX. favorable which quarter monetizing impact Asia

intangibles. also results Our $XX from were to impacted million of related a revaluation by charge brand approximately the

continues perform as continued we we negatively growth, business mix margin focused well strong the expansion India but price volumes improvements, market In on China, profitability. impacted in share gains to and with Our were quarter. prioritized

I’d and Before remind will we guidance, that report regional earnings and basis taxes QX before with XXXX. everyone on like our turn starting we to interest XXXX results an guide to

with new of Asia have America company’s as structure. XXXX, realigned business North align to America the shift reporting January certain Additionally, Latin allow our the business adjacent part our to from as segment us Mexico leadership X, changes and These will segment. of segment we

Now I’d over to it for XXXX. to our back like Marc guidance to turn review

Marc Bitzer

Thanks Jim.

review we’ll XX, our assumptions guidance XXXX. slide to Turning for

with revenues line We our to expect of X%. goal term grow X% long to in

XXXX. our are which excited we announced compelling based have new cost to increases, global will price In are the and market will mix. strong previously bringing the we mix of In catalyst particular, which Kitchen to about a product our Suite, addition a in connected to for launch volumes positive impact new be

in to expect industry from major countries benefit we growth Brazil. the US of many and including continued Finally, our

to next guidance ongoing in points. We of our drivers slide. an of I XXXX, will the margin discuss X.X% of basis the approximately on improvement deliver margin EBIT expect XXX EBIT

to optimization majority focused a of XXXX, generate $XX.XX flow margin in growth We to to free of generate the share. and expect free we elevated addition Overall, at ongoing deliver to experienced primarily $XX.XX reducing growth earnings XXXX. earnings cash the for our for improvement we expect end flow working from levels capital we in inventories improvement expect cash on of per

the of EBIT our in Turning to drivers slide XX, we improvement XXXX. show margin

$XXX approximately expect our reduction price points. We by as XXX improve to fixed million improved initiative. we basis from cost million $XXX mix Together margins from this of as approximately expect well net a benefit

initiatives. incremental from in which delivering basis impact raw to also offset $XXX and XXX all cost million prior higher to deliver inflation We $XXX on The to which points million margin approximately the $XXX in to another cos is more will benefits, productivity to we our restructuring than continued expect fixed year. million expect of ongoing approximately material focus continue than deliver to $XXX combined and productivity improvement be million

with to introductions our including suite business a I product XXXX, plan which investing mentioned connected continue global we earlier. new in Finally, in increased

our and cover will priority Jim cash Now guidance for recent XXXX.

Jim Peters

coming industry we guidance XX, slide for the and provide regional year. margin EBIT On

benefit digit regions in world. throughout We growth from industry expect and businesses this will low-single growth our the all

cost also price favorable mix We from benefit to and strong take-outs. expect

North we product improved X% final mix transitions. result, in margins the America at deliver are in approximately In expect to expand brand margin least and to our XXXX. EMEA, a our of to completing through expected price phases As XX% and

X%, our mix Latin favorable improve continued America to and approximately to industry we as benefit expect cost price growth, margins We from in takeout.

to performance improved mix price takeout and we deliver and X% in strong margin continued Asia, cost India China. in Finally, with expect approximately in

the for and consumer on of outline view flow see other US Jobs and Whirlpool. the legislative positive I demand, changes guidance, positive impact to development to term of Before the and actions. Cuts are We to provisions cash get briefly tax and competitiveness significant reform. a free The reform Tax to fully long is broad the still and potential complex, we included medium tax act and expect there have the changes in for a benefit tax a Act impacts as me companies let for our & our

As estimates our a refine calculations. as we may result, change our

Our and rate the for mid-XX% for guidance XXXX the current both is rates. for tax tax effective cash

you We the as our call quarter first will impact accessing continue and on on rates update necessary. the tax

show the to XX, for drivers Turning of free slide our we cash XXXX. improved flow

majority We the expect improvement to cash of through drive stronger earnings. this

closure related to primarily related America is XXXX in in in and to expect free higher EMEA. XXXX We our a optimization, fixed on will announced outlays sales. total, of cash to flow capital higher with also Italy. cash we of our inclusive focus versus inventory In guidance of continue working This cost North restructuring conversion and drive global recently initiative approximately to X% facility reduction significantly compressor of

show XX, unchanged. priorities we slide our allocation for capital to largely which XXXX, Turning are

prudent business our investment about a fund fully growth for to be our capital rating. continue maintain strong structure and will grade to We

repurchasing be also currently we after cash have existing repurchasing year return repurchase plan this shares balanced our We our expect under in authorization in how remaining share to approximately and shareholders. to XXX continue we billion million $X of to We XXXX.

like over to turn to I’d back it Marc. Now

Marc Bitzer

Jim. Thanks

year. much to the Turning us not on long positioned goals get framework. term to have this on as term in long place I quarter back however, creation during review goals did the as our like We progress to would fourth in actions we XX, we expect track XXXX do those our value slide to make that expected; put

We our Connected the launch and goals, growth. in growth, availability drive Kitchen in line with Europe improved product growth positive expect to our compelling Suite industry of candidate be will global new for

we and implemented. achieving in be drive net percent are are focused actions and to primary margin be Global year. primary clear, these initiatives remain reduction that mix is we expansion, X% and ensuring To X% of our significant focus free fixed successfully price and expect the also will flow We improvement. XXXX fully effectively catalyst, EBIT our to cash on margin as our cost to committed a sales on goal this of

I questions. will open it our Now end formal remarks up and for

Operator

Research. David take Longbow We’ll Instructions] from [Operator our of questions MacGregor

David MacGregor

European with business. Let question a the on me just begin

You highlighted price obsolete out mix on inventory the negative called has had and impact the the Europe challenge.

last working highly and I guidance you’re on and X% product which pricing on, Now well cautious also analyst discussed pursuing year. realize on meeting you’re today your Marc, what you do EBIT you stance guidance EBIT last during to at you’re From May. need you our issues your there’s is availability meeting analyst at where exactly to goal margins taking that X% your deliver a below do stand

Marc Bitzer

that’s first Europe expectations and all not of in where as we breakeven, David, delivered our certainly should in but QX saw, was. you be above

that places day key said due we demand to the like a the We certain were UK first admit was expected promotion are at setback countries in bit some disruption which had market a the around a things strong XXXX that. result. consolidation. we of and to weak There and one Having was in end little Russia and

our think we we strongly and integration lost we believe our change Having as timeline the a evidenced as take or how system external and a challenges, competitive our can where think with reality. some some I also said that complexity performance. X.X but business, integration not and does we about of that’s year I on

So more state strongly we steady year in in of then complete where X% integration a a really we XXXX state believe will with the be the mode. we’re and still kind steady

by achievable to competitors. So there. path believe is as the strongly evidenced It I that X% is the

internal bit conservative conservative times very the more guidance. several particularly a honest missed we targets given them You Europe, are slightly more aggressive, on but and our we a little that call in X% took regional stand

David MacGregor

sense. makes That

that speak been to the which ability Korean of leader. innovation industry a So to with premium are success price. the key bring my you consumes proven second question are anyone know really is innovations which is that almost is just has consumer they’ll attention in would for capture the contributing the product we that today market Whirlpool innovation regarding the and say there many there When out the innovation. a to pay prepared the factor leader, to manufacturing

now consistently its X.X company over spent question my innovation, I guess of has is, of the to I So are that’s guess you approaching investment, developing company’s of investors a in leadership billion a as that X% goals. what a the cost revenues year. that to from now taking number less do future X% need productivity CEO to you to new do the rely on the achieve financial cost higher reduction level annual that so productivity and a achieve the

Marc Bitzer

broad David that a obviously was very question.

First we new to in goes of not invest million XXX million year in is the but roughly total which in in numbers, invest engineering. all products all XXX and about every to capital, majority a products, roughly another we clarify XXX

So increase, That a the of been total, different percentage but steady as a items. sales. slight it’s steady, with line but just investment has it’s

and in this investor to have day earnings also may in both we Now referred calls.

realignment that our X.X pretty organization ago. and was entire product fundamental a done much systems and have development structure, We years of

place. obvious fact we’ve that innovation, done pipeline that we I is changes give that’s highly mentioned say start doesn’t competitive highly a changes the for fruits these our the in but massive you would the terms of it’s competitive I place, this companies very But actually is a me. So seeing innovation which But encouraging. market of change market wouldn’t to and the credit and

to run got you So faster.

our And the also of effectiveness development we’re what’s our very we’re internally but you innovation again these it the we’ve changes kitchen drive the also efficiency and that space, to well it’s done think to growth suite I positioned I investments. which on just product positioned you well comes in the when Show, see pipeline. have happening walked if would feel CES of

Operator

next Credit Susan Suisse. Maklari move to of We’ll

Your open. line is

Susan Maklari

you at your the I volumes. which that North wanted range. there. just industry guidance. on into in think you that we pieces together? pointed high you’re we slide should to quarter, to to opposed saw that more how what talk units ended a did price thinking end in about Can different maybe about of given coming to ’XX X% is X% little up ’XX towards talk some we bit shift X% about On In growth as and focusing fourth And about going see the America these you maybe how

Jim Peters

Susan is this Jim I’ll off and here. start

we expect As look obviously creating promotions new to, participate focus certain we will in sure expect you at or grow our the our any making value-creating. and that expect And continue are categories. launching, we industry. the slightly value to with But in we shares continue are that products also on XXXX to North to we America, promotions above again gain volumes for we to continue in line

So be of again our is overall within stable that as said, that we believe in see demand ahead and the with the it. for industry US and the unit will slightly maybe I we growth line

Marc Bitzer

of it’s was Susan, the of guidance much or below. digits end We the so it’s solid, to the continuation came focus at At the essentially in it a Jim’s year slightly and of day industry point. still in of add even on last see shipment maybe and low we’re initial to in robust Marc, terms to lower But our ’XX. the trade signaling end the demands pretty same. single

that housing think are supply you out growth and that But I move will we in confidence momentum Keep home of which progresses, X% and the still housing see be existing the related optimism factors consumer cycle look at factors which that sales we positive constraints, home could concerns increases on also new builds. spikes. we like. certain always and But a more could would growth of to there. to overall markets. of reform a roughly manufacturing there mind, are constraints X% tax If more It’s consider market, in on indicated perspective, confidence a positive, a stage and a us would all may to I to I a we as wage you annual rate healthy kind growth because positive, sense surprise be couple a also gives very would love we to from say, which rate; that a

Susan Maklari

inflation. And just maybe of terms of then the some in

to maybe for were sense in the we where maybe You’re that million to XXX the give million us on continuing how to going changed what’s to in and depending point that has Can of that to or you of Is year. to relative this just potential there year? XXX this some higher anything at that? lower move end things come

Marc Bitzer

Susan Marc it’s again. So

’XX So entered stepping inflation. we a back the lot little a on lower raw assumption material with bit,

XXX with the You may recall summer to the of we about to the entered we drastically that to and XXX. an estimate and had quite change in year XXX fall roughly

raw the why go So much saw year that on to culprits resins would us, of year first the typically say are I million it’s are fully and normal contract both on saw continuing. XXX we also want to summer ’XX-’XX you major you last - slowing very and ahead also know refer can’t roughly year, year-end, still too on out long be the it’s and The landscape, have XXX. we while initial which headwinds that that still for we contracts. steel on XXX if on of not two to steel material towards resins kind That’s say and we now elevated, down, pretty over is they we XXX over you period, shift the going around progressed as to of

know still mean parts. also what other around it with would we in don’t warehousing. freight creeping see aspects car and does happening say inflation heightened Unfortunately now what’s this and So oil for We like uncertainty I there’s resins. in

on would I be to and I material for if creeping confident say been the raw will just of to and uncertainty So current forecast side, weeks I months. wouldn’t lying chain. guide see now feel has several we parts we in that because you value our many inflation trends XXX of on about the there’s say XXX But internal stable

Operator

Curtis to of of America Merrill Lynch. Banc move We’ll Nagle

Curtis Nagle

Just tax on the quickly rate.

tax guys If mid-XXs are corporate could you in for clarify guys US what rate you XXXX? the embedding guide the in

Jim Peters

the new trying and effects US we’re strategies rate obviously to there of those the our are assuming of will some of impact parts globally, The But is tax understand rate that tax still impact on planning that it our the legislation certain tax with especially we’re rate. on how XX%. that how tax

keep months of sit. we keeping to is better coming have we’ll as very always in tax tax have that mind the you understanding a But believe positive XX% the and the much see thing as thing over I a taxable other in reform we our opportunities next US. also is mind The where generated income those planning outside said, of

So the that rate also the that to have US portion we still when is of together, a you blend remember large US. higher than outside have the rates countries that you have our start a to business tax in now

run, And rate a the impact but right be this see having now in so on term. as long we it it’s expect don’t our perspective. fact the to a in from cash mid-to-longer forward, positive to negative impact we And only look in we going partial have tax

Curtis Nagle

aren’t America. kind quick expecting a curious in Latin why you higher I then a follow-up, And guys just was margin of as

I than growth. a point implies think it a bit about, less I of little think

you the guys have a needed of cost do have markets Just growth, be or given the and more a I positioning maybe to done higher some perhaps you other the would little to say rate? touch higher, and Brazil volume bit to all market volume it taking get intended some

Marc Bitzer

a expect probably elections the of Brazilian the rebound you areas, outcome. to Marc, It’s two demand we described from coming prior do or the what one, conservative the significant election in is as background not probably

one year but single elections. don’t the going So in double in Brazil get digit strong not digit we see as growth in to the I progresses more or the would say short That’s term, factor. it worse, both certainly maybe

is of business Latin a the just highly are environment our And it you as sits compressor quite in other capacity. the with growth that global America a where success for bit know opportunities business The is significant factor competitive limited.

Operator

to of We’ll move Michael JPMorgan. next Rehaut

Michael Rehaut

to want bit petition the obviously spot question First continued to a decision. be you in may occur America, of down which for safeguard what a North drill following competitive just continue backdrop little bright the despite outside

if if volume XX% kind of at to you’ve and possible And least that. or it’s guidance rollout, the break I other. steady leverage reduction. year the a With kitchen productivity one-half cost hoping if of that margins XX%, it was should in weighted the down maybe throughout drivers to and sense mix between talked mix is or get over if pre there positive to Obviously to of – to the improvement additional suite key versus of is perhaps there be or the price

Marc Bitzer

America to of part me our the of benefits in and know America volume some (inaudible). That in October. give is Having drivers answer base, kitchen of different it’s timing. said with when to that what I i.e. age America, a us new recent for And or let some the business, that, mix to give in similar we we world to Marc, it. have year-over-year a these driver to might a as in cost more are detailed America product maybe by see mean its we Michael, fundamental you North opportunities maybe and that breakdown. rest North a further North levers for little is, slightly try we’ve bit don’t mix and kitchen and the And try and the on announced global, very our price lift the that done true coupled even early North price increase

and heard for industry also we is forecast, side, America. true volume North the On you said our what

line growth. or industry We to the grow in expect above

trends the overall but raw are So similar, very exposure. materials terms of in again, also

certain with what a gave timing. in North globe So is way we true slightly a maybe the for America, different the also margin for

Michael Rehaut

So that little half get the more I’m from of I perhaps a heard benefit that kind hearing if first might price right. in it

getting the skew UK. promotional that in better getting terms fix of to a going the looking spectrum how kind guidance getting count, out an Europe, it’s putting you not been a right challenges that. throughout exception inventory at level, been has in – put fourth from environment challenge to to looking guidance terms work-down, forward. issue in just tougher had in set the matter end of the together and it or it you’ve that biggest bigger of of in the given picture quarter Marc lot with or expectations the the you’ve fourth in you picture are your the a revise information But continued bigger has better a to that in to And this wanted the you been downwardly change to of segment. a the of enumerated, that to the Is that better quarter you’re at not a all of other Certainly XXXX, mentioned Secondly, and on, terms been the guidance that? personnel execution of what in a the get row I there’s able going hit. for a being you factors region of is a kind challenges it integration, disappointment are where

Marc Bitzer

that again, push back in terms a its Michael, of me Marc European let integration.

system, is in some coupled with which the currency like our may recall, had where an of of our integration, our a the milestones. even accumulation As internal kind Russia first altogether. XXXX. you a all as where a we was and you ’XX what which integration as two hit have issues, We complexity well, is it we And we frankly we would out, take recall almost pointed And expectations. of brands, long years, of that’s once terms very It going X.X had the ahead would it’s perfect le like And have I couple combination coup XX-XX, products, Brexit, always what now, a factories, of lot side had I really can doesn’t or hindsight the where call you unforeseen comes change quarters but external of term say we in why events we we disappointed. in a of disappointing a know you five a margins. quarters four

achieve and So the strongly can X% believe X% we of we that.

I would more comes to predictability to back achieved disruption, get the is had order think stability a we of changes predictability. the to better that chain how it than we’re and and a forth. internal go down chain we fair have our want pre-conditioned management given to an and higher lot And a next air internally side. is we’ve last, I feel better to a The on probably essentially frankly stability before, get as really system mentioned where QX supply because in through our and targets entire of already get in this a of in I We’ve region we we year. guidance, news on also the one are systems I some to number more and good supply lot external lot in done conservative more say in the to lot

Operator

next our James. take We’ll Raymond Darkatsh question from Sam of

Sam Darkatsh

the of back that There’s crafted getting a guide. and EMEA is conservatively questions, to margin I see couple first

which to have for very obviously production target going competitor euro the based EMEA gives really you used currency don’t Lira aggressively you the weak continues moving the the contemplated the slide I its you Specifically if Turkish that spit-balling the here, confidence already labor Turkish euro Lira has your what forward. and/or just versus question, hedging margin the challenging conditions versus I’m Turkey. in has and exacerbates but one do the you. to My think folks UK, to number price cost and

Marc Bitzer

Sam that’s obviously a question. very detailed

and the weak the it’s longer only and UK, in on creeps Turkish protection but probably inflation gave pound all a we also them of significant competition, a to competitor ultimately factor currencies. right know Turkish who yes versus very forms not about your British lira also First

raw etcetera input the show rise market Turkish very So material on the will ultimately the of QX like hedging, a up a we inflation of about do Having also soft the cost. the UK that part it’s nothing lot said that ultimately more still business. steel that was can it’s in in one. in also will But production all

margin So feel in our we about better price UK. realization

even soft, promotional December in softer previous than more the So was have surprisingly the been quarter. markets UK actually in

January to early If way we pressure it’s see you say how takes of obviously point early want But of over evolves the to pound pound got that next see months. strength in some I way, the regained course read our of the which early, to In data margins. British too some British encouragement, any the would and couple it. but

Sam Darkatsh

simplistic, My your other too X% be question company-wide FX. that and as include but will broad probably does growth or more exclude sales guide much

price as have tail have FX the maybe much and your imagined with industry guide including two been growth along you’re you with be, would three think higher gave growth sales might I expectations as overall would points that that FX. wind a point than if

Jim Peters

out FX put Sam, when and to we assuming but we that were neutral. slightly closer this right Jim, is now was positive

and it’s where now throughout think sales. have currently So as But the we yes I and progress things are right FX say, again will rates they would we January a on year. would know tailwind

kind any a changes. assume not significant or of currency does that from now tailwind right So FX

Marc Bitzer

be that’s may to And in just (inaudible) remarks. add a what also prepared my had I and Sam

last slight margin on one and has is, Our fixed increases reduction EBIT our above number the point come lost which we the the is one one program, and focus from we this year X.X% that’s focus. to margin that’s number which already and announced mix is our that and focus cost expansion,

Operator

of Ken next Capital. We’ll KeyBanc move Zener to

Ken Zener

you do expletive could you you going fall XX% that wondered I think you mid-XXs, Jim comment, EPS have around to what your split mean guys’ will guys and is then a to everyone’s assume? assume how second us rate. within if I half first, be in want earnings I guidance terms tax could of

Jim Peters

where what will in an we strategies. for be. that’s our rate assumption what mid-XX, the term terms think of mid-term be say the impacts we say we as be I’d give structural historical now, and when believe further we thought used will longer kind That’s line XX% planning tax I tax is will the And said run right and safe we from so on once that’s we think a with say could we update to in rate to get in at. of year, Ken we it

of up have announced of year, of in have much any seasonality don’t some second right than year that quarter. we based first launched the ramp here some to took the and previously be and initiatives between us launching as are think half cost well our the is reduction in first cost half of of in that now, we some the as that pricing we’re Obviously to prior split beginning run In terms of half years. first our different affects going of I and the the

significantly been from little again of prior where the tailwind see it of range. that think between a in second of the a So, type of half year, we’ve the in but to be won’t XX to dissimilar a XX you’ll years some coming I anywhere bit

Operator

of move next Goldman Sachs. We’ll Sam Eisner to

Sam Eisner

cash free to million generated you walk are your flow haven’t so that X have free going million reconcile in to point there’s a terms I for to understand think moving It yet. items, that of using. trying inclusive really to I other you it What of that that flow, about looks the year. I’m cash and from like starting it’s want pieces $XXX starting we you’re in like discussed point for X.X of year. this there, I Just different just do $XXX to feels but the year what see next guys billion this roughly how

make just I So to want are sure apples-to-apples. we

Jim Peters

on on and guide capital show we part expensive to them, that we asset talked in got one think the to XXX is very of working about or working you go credits. things value least even sale ended that benefit in inventory, of sure if on don’t assume obviously that assets strategy some but look the as for significant we’ve I base them right like we Again and have continuously of tax business. where things our that creation that we we’re there make and the mixture on here thing, you already think to Sam up we there’s there million, as at be see a we our

that have terms cash will So that I don’t of year-over-year impact a our significant in think flow.

Sam Eisner

other billion to to fair way, said flow your items, free So is so about $XXX billion of that X.X cash say? of or million include does another $X

Jim Peters

any assumption there this opportunities significant them. are But if there on I an we coming things of see obviously based it assumes advantage would will had we that say we headwinds year. take against that it don’t

Sam Eisner

helpful. XX% of then up That’s materials, prices And are XX% steel Those commodity maybe are almost just prices are going November, roughly your since XX%. so combined COGS. up to buckets two raw oil

October how bit significant particularly yet been guidance of benzene confused your portion your little holding in benzene, oil which, there’s in you’re major a I’m COGS. in moves from goes So oil to to

the confident Just should help million me XXX better understand [debt]. in why we feel

Marc Bitzer

Marc. its Sam,

the all development. to based is about indication we in spot cost of we internally about the October. That October our not First was XXX based have which that models in on gave also clarify which raw on projected material prices million

So if we you our in supply-demand etcetera. we to take where take [steel], consideration, models cost input have

complex a it’s model. So fairly complicated and

was or yet, know our that’s have, about that up with XXX But in slightly is that see much were mentioned the risks, active is but the pretty best amounts what price maybe is the pretty don’t There forecast. And kind we spot line be now So actually higher to not our in before, our view I price. even in the right as doesn’t we year. XXX current we could of than forecast firm. XXX our spot mean prediction. today forecast, that That

Operator

Partners. We’ll move to Megan McGrath of MKM

Megan McGrath

is wanted of I strategy a big your little to pricing this such and more color. guidance tactical a get part year, Since

mix of how if much in how how In do can more the and big mix just make was pricing, some mix you market, is how quarter, a is this, were perspective out you the terms to positive marketing price coming practical us, you there to much a apples-to-apples towards you’re sort better it really able mix happen. more expensive new mix want that products of or products raise to how from fourth And of tell if much effort much Is to? of sort with doing of of was the price part mix? that’s you the

Marc Bitzer

we too certain QX what first answer our in so parts of [burn] was to internally a positive say announced publish and call we much we Asia. We in I what price that, was was already to reveal which amount Let investments. we is world tools would price of we like-for-like as portion certain where intensity. me over mix, pricing, all don’t of mixed promotional little like I try information. a related from us it, competitive A probably comes trade bit some indicated, know and said exactly promotional less Having the would because I one, or investments think what increases typically this from have

didn’t indicated As and see didn’t America, and saw particularly for certain we before which value I we North promotions we creating participate.

know We quite reward would mixed benefits lastly it’s give introductions. Kitchen as that extremely combination We KitchenAid new product next we’ll we more last and we really of is us mean Whirlpool the say have over We well. suite I we launched probably year opportunities. a intensity had a will know a it’s list So flying, promotional going bit a the see and I benefits. of which price suite will carry some new from year less increases see of still and

new necessarily up, richer is products to your new price, do mix it’s with no. we to with mean the price So typically people products involve are prices, doesn’t higher a do and a where to to question, features on people but mix try large What up. encouraged voluntarily product like-for-like

Megan McGrath

levels of felt Do as early or your you sense in you any about loading that announcements where products but US I And the was ahead get a maybe much too the sense understand tariff in channel that the feel for the of a think stuff have do inventory get on too to to are? I there to (inaudible), you some talk it’s really wanted that?

Marc Bitzer

bit we a and first the Let talk me little about further expand at position. maybe safeguards

USDR with very this before, of the all, people ITC, story said an few we thankful a end the victims. to I administration has put are press as and First this finally reported, Recently long of sometimes dumping. confuse that offenders

evidence has and seen years, decisions been proof and LG that confirmed. been Samsung for number several there’ve a we’ve and the been times So dumping have dumping

So end an the the we call hopping what puts and finally country this safeguard to dumping.

good encouraging exactly the mind, One what being of couldn’t couple we are laws know how specify outcome, that finally much a why reasons. Whirlpool incredibly is we So exactly it’s in the impact not up. bottom company on It’s has is your a built been do line Corporation. catalyst it’s also for reason point, an good to that has is, With our enforced. trade inventory

data. that January saw We to probably have already December certain have January. , amount in the customs significant continued and data but preloading We we December don’t until of

that’s means. in couple important months think terms would thirdly, yet lot quota weeks certainty. question to preload. the we dumping three So you couple more certain next factors that all course a our can’t together, mechanics have would most answer, we we all but would the But to say the or don’t these know ultimately the comes of that can and the give we quota in down of it unfold, the maybe of finally question, by we are measure is offender clarity key specified come terms around we I you safeguard it of about that’s of few its which a stop thing give fully the estimate, of of ends. a course kind a competitor. picture will see the dumping. And by how expect country and I the that can’t as Two, a I months better of around with would but exactly place what in not firmly

Operator

of move We’ll to Gabelli next Alvaro & Company. Lacayo

Alvaro Lacayo

had a and a anticipation. long on victories, followed sort done that from business of the loadings inventory trade past I impacted think they how similar the and the follow-up petition in saw when could loading the a around related about little on you how they’ve those Maybe and past Just bit inventory effect of was if In dynamics chatter the the you where in were of the you felt? talk that safeguard competitors. playbook sort what

Marc Bitzer

do again levels. we not know Alvaro inventory its the Marc again. exactly And

may on to dumping customs market a just way December. inventory We couple the until to the typically would of weeks couple the couple found depending I from a of past, of actions over say, have which data a judging months. in a typically months which were

timeline. to this different. factories in past move that safeguard and time the of kind that a That other in is sort the think all start countries. I for used of bridge we out, know impossible, not they think of it’s It’s different positive respect just possible. and way country of to a certain US a is our measure kind in which only The that it’s they I in producing is

it, should say, that next of level you that’s expect would that probably expect, should couple the inventory and of and months, through probably I So (inaudible) flushes in supply. just the

Alvaro Lacayo

the to the North those And then mix you the America magnitude, to from those footprint. have time, guide about levers bit of, you’ve this employed, in mix what a sort confidence numbers. price an just the had you have levers you of across the of which of and global see price and terms order cost hit been secondly on mix in terms that price mix drive years in based think of just thoughts you on you just over a have on different the and mentioned product been of stubborn. of could increases what’s price price but just I had think few the basis, last big if little in terms gives before focused highlight Maybe most more what where launches you And do past then you benefits happening more and

Marc Bitzer

little region bit different. a by Again region it’s

somewhat raw increases. the limited, example behind and pretty cost big on heavily investment But us. already or also mix relied us. regions for based material price some cost To in behind in example, That regions it’s already we actions give in opportunities and one we a it on triparty region are because work all First based In you of of opportunities much all, investments. promotional mix China, price differs are like-for-like region. the is by so increases cost price terms

we portfolio. the brand pipeline have US in think I in and particularly product the

available We us in mix markets. opportunities have more to other than

of combination With] of It’s benefit, lot suite maybe the products know, impacts they already are product QX, launching year-end a to very if mix are see saying and kitchen I I suite throughout probably and the would you mentioned so lot a and of also we certain which a and which but mix It QX US it. we connected it not for it again of is they why not about come we we effect the price – will that’s know inside we a keep product launches, confident [Work have. but And launch increase are up. about opportunities the drive carryover significant us. that in gives again us but pipeline So the early, and

Operator

turn Executive to Bitzer to and At closing Chief the Officer, this time, Marc like over comments. call I for President would

Marc Bitzer

if Let me XX summarize just call, key from again slide just to message this may and look you be that’s want on it up.

year. initiatives of and last expectations announced very encouraged ahead good we And in this again, are very we by First all margins to in exit EBIT expansion committed mix that’s mix, to improvement global and are we margin the expect North of are to year coming and strong progressing significant news. and rate and price we further deliver price cost margin quarter the fixed a America,

in strong levels a cash returning continue margin And a as free way. strong of cash expect also we of balanced this growth to We to result to shareholders expect a year flow improvement.

with you So forward again our we thank first on us look quarter joining XX. to on April you call for Thanks. and earnings today, speaking

Operator

today’s fourth release quarter conclude call. does XXXX Whirlpool This earnings Corporation’s

and have your disconnect everyone lines now a may You great day.

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