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Acquisitions | 12 Months Ended
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Dec. 31, 2014
Business Combinations [Abstract] |
Acquisitions | ACQUISITIONS Hefei Rongshida Sanyo Electric Co., Ltd. On October 24, 2014, Whirlpool's wholly-owned subsidiary, Whirlpool (China) Investment Co., Ltd., (“Whirlpool China”), completed its acquisition of a 51% equity stake in Hefei Sanyo, a joint stock company whose shares are listed and traded on the Shanghai Stock Exchange. Pursuant to a Share Purchase Agreement among Whirlpool China, SANYO Electric Co., Ltd. (“Sanyo Japan”), and SANYO Electric (China) Co., Ltd. (“Sanyo China”, and together with Sanyo Japan, the “Sellers”), on October 20, 2014, Whirlpool China completed its purchase of the 157 million shares (or 29.51%) of Hefei Sanyo currently held by the Sellers (such transaction, the “Share Purchase”) for RMB 1.4 billion (approximately $230 million at the date of purchase). On October 24, 2014, pursuant to a Share Subscription Agreement (the “Share Subscription Agreement”) between Whirlpool China and Hefei Sanyo, Whirlpool China completed its subscription for 234 million shares (which, together with shares purchased pursuant to the Share Purchase Agreement, aggregated 51%) of Hefei Sanyo pursuant to a private placement (such transaction, the “Share Subscription”) for RMB 2.0 billion (approximately $321 million at the date of purchase). Pursuant to the Share Subscription Agreement and as required by the law of the People’s Republic of China, Whirlpool China will be prevented from selling any shares of Hefei Sanyo for 36 months from the date of acquisition. The aggregate purchase price for the Share Purchase and the Share Subscription was RMB 3.4 billion (approximately $551 million at the dates of purchase). The purchase price for the Share Purchase was payable in USD based on the exchange rate as of August 9, 2013. The Company funded the total consideration for the shares with cash on hand. The cash paid for the Share Subscription is considered restricted cash, which will be used to fund capital and technical resources to enhance Hefei Sanyo’s research and development and working capital. Indesit Company S.p.A. On July 10, 2014, we entered into share purchase agreements with (i) Fineldo S.p.A. (“Fineldo”, and the share purchase agreement with Fineldo, the “Fineldo SPA”), a company incorporated under the laws of Italy, concerning the purchase and sale of 42.7% of the issued share capital (the “Fineldo Shares”) of Indesit, a joint stock company incorporated under the laws of Italy whose shares are listed on the stock market organized and managed by Borsa Italiana S.p.A., (ii) Ms. Franca Carloni, Mr. Aristide Merloni, Mr. Andrea Merloni, Ms. Maria Paola Merloni, Ms. Antonella Merloni, Ms. Ester Merloni, Fines S.p.A. and, following approval by the Court of Ancona, Mr. Vittorio Merloni (the “Family SPA”), collectively concerning the purchase and sale of 13.2% of Indesit’s issued share capital (the “Family Shares”), and (iii) Ms. Claudia Merloni (the “Claudia Merloni SPA” and, together with the Fineldo SPA and the Family SPA, the “Stock Purchase Agreements”) concerning the purchase and sale of 4.4% of Indesit’s issued share capital (the “Claudia Merloni Shares”). On October 14, 2014, we completed our acquisition of the Fineldo Shares under the Fineldo SPA and our acquisition of the Family Shares under the Family SPA. We completed our acquisition of the Claudia Merloni Shares under the Claudia Merloni SPA on July 17, 2014. In the aggregate, pursuant to the Stock Purchase Agreements, we acquired 60.4% of Indesit’s issued share capital. This represents 66.8% of Indesit’s issued and outstanding stock. The aggregate purchase price for the Fineldo Shares was €537 million (approximately $680 million at the date of purchase). The aggregate purchase price for the Family Shares was €166 million (approximately $210 million at the date of purchase). The aggregate purchase price for the Claudia Merloni Shares was €55 million (approximately $75 million at the date of purchase). The Company funded the aggregate purchase price for the Fineldo Shares and Family Shares through borrowings under our credit facility, and repaid a portion of such borrowings through the issuance of an aggregate principal amount of $650 million in senior notes on November 4, 2014. On November 26, 2014, we announced in Italy the final results for the mandatory tender offer for the remaining outstanding shares of Indesit. Settlement and closing of the mandatory tender offer occurred on November 28, 2014. We received tenders for a number of shares equal to 91.4% of the total shares available for purchase in the mandatory tender offer, increasing our aggregate ownership interest in Indesit’s issued share capital to 97.1%. The aggregate purchase price for the shares purchased at settlement of the mandatory tender offer was €344 million (approximately $429 million as of the date of purchase). On December 3, 2014, Whirlpool purchased all remaining shares of Indesit and Indesit delisted from the Electronic Stock Market organized and managed by Borsa Italiana S.p.A. Total consideration paid for Indesit was $1.4 billion in aggregate net of cash acquired. We funded the aggregate purchase price for the tender offer and remaining shares through borrowings under our credit facility and through borrowings under our commercial paper programs, and intend to repay such borrowings in the future through public debt financing. Purchase Price Allocations The Company is in the process of finalizing independent appraisals for the purpose of allocating the purchase price to the individual assets acquired and liabilities assumed in the Hefei Sanyo and Indesit acquisitions. This is expected to result in adjustments to the carrying values of recorded assets and liabilities, refinement of amounts recorded for certain intangible assets, revisions of the useful lives of intangible assets, some of which will have indefinite lives not subject to amortization, and the determination of any residual amount that will be allocated to goodwill. The preliminary allocation of the purchase prices included in the current period balance sheet is based on the best estimates of management and is subject to revision based on final determination of asset fair values and useful lives. The related depreciation and amortization expense from the acquired assets is also subject to such revisions on a prospective basis. The following table presents the preliminary allocation of purchase price related to the Hefei Sanyo and Indesit acquisitions, as of their respective dates of acquisition:
Millions of dollars |  | Hefei Sanyo(1) |  | Indesit
Cash |  | $ | 98 |  |  | $ | 77 |
Accounts receivable |  | 81 |  |  | 891 |
Inventory |  | 137 |  |  | 471 |
Other current assets |  | 354 |  |  | 288 |
Property, plant and equipment |  | 169 |  |  | 854 |
Goodwill |  | 451 |  |  | 667 |
Identified intangible assets |  | 372 |  |  | 822 |
Other non-current assets |  | 317 |  |  | 162 |
Total assets acquired |  | 1,979 |  |  | 4,232 |
Accounts payable |  | (181 | ) |  | (631 | )
Short-term notes payable |  | (226 | ) |  | (555 | )
Other current liabilities |  | (91 | ) |  | (622 | )
Non-current liabilities |  | (133 | ) |  | (987 | )
Total liabilities assumed |  | (631 | ) |  | (2,795 | )
Net assets acquired |  | $ | 1,348 |  |  | $ | 1,437 |
(1) We purchased a 51% controlling interest in Hefei Sanyo's net assets described in the table; the non-controlling interest was valued at $801 million, the market value of the stock price of the shares purchased on the date of acquisition Goodwill, which is not deductible for tax purposes, has been allocated to the Asia and EMEA operating segments on the basis that the cost efficiencies identified will primarily benefit these segments of the business based on the preliminary allocation of the purchase price of the respective acquisitions. Any changes to the initial estimates of the fair values of the assets and liabilities will be allocated to residual goodwill. The Company has preliminarily estimated the fair value of Hefei Sanyo and Indesit's identifiable intangible assets as follows:
|  | Hefei Sanyo |  | Indesit
Millions of dollars |  | Estimated Fair Value |  | Estimated Useful Life |  | Estimated Fair Value |  | Estimated Useful Life
Trademarks-indefinite lived |  | $ | 42 |  |  |  |  | $ | 535 |  |  |
Customer relationships |  | 230 |  |  | 13-16 years |  | 134 |  |  | 5-19 years
Patents and other intangibles |  | 100 |  |  | 3-10 years |  | 153 |  |  | 6-15 years
|  | $ | 372 |  |  |  |  | $ | 822 |  |  |
The customer relationship intangibles of Hefei Sanyo were mainly allocated to its traditional trade distributors, which have an estimated useful life of up to 16 years based on low historical and projected customer attrition rates among its retailers. The majority of the intangible asset valuation for Indesit relates to the Indesit and Hotpoint brands (Whirlpool ownership of the Hotpoint brand in EMEA and Asia Pacific regions is not affiliated with the Hotpoint brand sold in the Americas), which are indefinite lived intangibles. The Company’s preliminary assessment as to trademarks having an indefinite life was based on a number of factors, including competitive environment, market share, brand history and product life cycles. The patents and other intangibles have an estimated useful life that varies based on the estimate of the expected life of the technology and the products associated with the technology. The estimated useful lives of the finite-lived intangible assets will be amortized using a straight-line method of amortization. Pro Forma Results of Operations The results of Hefei Sanyo and Indesit’s operations have been included in the Consolidated Financial Statements beginning October 24, 2014 and October 14, 2014, respectively. Within Whirlpool's Consolidated Statement of Income for 2014, Hefei Sanyo and Indesit represented $994 million of net sales and $15 million of net earnings, which excludes certain non-recurring acquisition-related costs and investment expenses. The following table provides pro forma results of operations for the years ended December 31, 2014 and 2013, as if Hefei Sanyo and Indesit had been acquired as of January 1, 2013. The pro forma results include certain purchase accounting adjustments such as the estimated changes in depreciation and amortization expense on acquired tangible and intangible assets as well as interest expense on borrowings used to finance the acquisitions. Additionally, the pro forma results include adjustments to convert Hefei Sanyo and Indesit’s historical results from local accounting standards to U.S. GAAP. Pro forma results do not include any anticipated cost savings or other effects of the planned integration of these acquisitions. Accordingly, such amounts are not necessarily indicative of the results that would have occurred if the acquisition had occurred on the dates indicated or that may result in the future.
|  | Year Ended December 31,
Millions of dollars, except per share data |  | 2014 |  | 2013
Net sales |  | $ | 23,204 |  |  | $ | 23,109 |
Net earnings available to Whirlpool |  | 691 |  |  | 791 |
Diluted net earnings per share |  | $ | 8.68 |  |  | $ | 9.79 |
Certain non-recurring acquisition-related costs and investment expenses of $30 million and $60 million were recorded by Whirlpool during 2014 related to the acquisitions of Hefei Sanyo and Indesit, respectively. Of these costs, $55 million were recorded in interest and sundry income (expense), with the remaining being recorded in selling, general and administrative. In 2013, we incurred $21 million of non-recurring acquisition-related costs and investment expenses, all of which related to Hefei Sanyo. Of these costs, $15 million were recorded in interest and sundry income (expense), with the remaining being recorded in selling, general and administrative. These costs have been eliminated from the pro forma information presented above in both periods.

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- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1383-128463 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=35744584&loc=d3e6996-128479 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=39739317&loc=d3e4922-128472 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=39739317&loc=d3e4934-128472 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=39739317&loc=d3e4926-128472 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=35744584&loc=d3e7000-128479 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1392-128463 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1486-128463 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=35744584&loc=d3e6927-128479 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1497-128463 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1490-128463 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 30 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=35744584&loc=d3e7008-128479 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=39739317&loc=d3e4845-128472 Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 6 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1500-128463 Reference 15: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 7 -URI http://asc.fasb.org/extlink&oid=25497992&loc=d3e1524-128463 + Details
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