XML 47 R21.htm IDEA: XBRL DOCUMENT
v3.10.0.1

Goodwill and Other Intangibles | 9 Months Ended
--- | ---
Sep. 30, 2018
Goodwill and Intangible Assets Disclosure [Abstract] |
Goodwill and Other Intangibles | GOODWILL AND OTHER INTANGIBLES Goodwill The following table summarizes goodwill attributable to our reporting units for the periods presented:
Millions of dollars | North America |  | EMEA |  | Latin America |  | Asia |  | Total Whirlpool
Beginning balance December 31, 2017 | $ | 1,755 |  |  | $ | 920 |  |  | $ | 5 |  |  | $ | 438 |  |  | $ | 3,118 |
Reassignment of goodwill (1) | (54 | ) |  | — |  |  | 53 |  |  | 1 |  |  | — |
Impairment | — |  |  | (579 | ) |  | — |  |  | — |  |  | (579 | )
Reclassification of asset held for sale | — |  |  | — |  |  | (4 | ) |  | — |  |  | (4 | )
Currency translation adjustment | (6 | ) |  | (28 | ) |  | (1 | ) |  | (22 | ) |  | (57 | )
Ending net balance September 30, 2018 | $ | 1,695 |  |  | $ | 313 |  |  | $ | 53 |  |  | $ | 417 |  |  | $ | 2,478 |
(1) Effective January 1, 2018, we realigned the composition of certain segments to align with our new leadership reporting structure. We now report our Mexico business as a part of our Latin America segment. As a result, we reassigned approximately $53 million of goodwill, using a relative fair value approach, from the North America reporting unit to the Latin America reporting unit. For the three months ended September 30, 2018, there were no indicators of goodwill impairment for any of our reporting units based on our qualitative assessment. 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 are 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 are progressing, as of the impairment determination date, progress on market share recovery was slower than previously anticipated and the business has 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 during the second quarter of 2018 and for the nine-months ended September 30, 2018. Future impairments could result if the reporting unit experiences further deterioration in business performance or if there is a significant change in other qualitative or quantitative factors, including an increase in discount rates or a decrease in forecasted EBIT margin. Other Intangible Assets The following table summarizes other intangible assets for the periods presented:
|  | September 30, 2018 |  | December 31, 2017
Millions of dollars |  | Gross Carrying Amount |  | Accumulated Amortization |  | Net |  | Gross Carrying Amount |  | Accumulated Amortization |  | Net
Other intangible assets, finite lives: |  |  |  |  |  |  |  |  |  |  |  |
Customer relationships (1) |  | $ | 630 |  |  | $ | (324 | ) |  | $ | 306 |  |  | $ | 639 |  |  | $ | (297 | ) |  | $ | 342 |
Patents and other (2) |  | 322 |  |  | (188 | ) |  | 134 |  |  | 387 |  |  | (179 | ) |  | 208 |
Total other intangible assets, finite lives |  | $ | 952 |  |  | $ | (512 | ) |  | $ | 440 |  |  | $ | 1,026 |  |  | $ | (476 | ) |  | $ | 550 |
Trademarks, indefinite lives (3) |  | 1,885 |  |  | — |  |  | 1,885 |  |  | 2,041 |  |  | — |  |  | 2,041 |
Total other intangible assets |  | $ | 2,837 |  |  | $ | (512 | ) |  | $ | 2,325 |  |  | $ | 3,067 |  |  | $ | (476 | ) |  | $ | 2,591 |
(1) Customer relationships have an estimated useful life of 3 to 16 years. (2) Patents and other intangibles have an estimated useful life of 1 to 41 years. Includes impairment charges of $60 million at June 30, 2018. (3) Includes impairment charges of $108 million at June 30, 2018. For the three months ended September 30, 2018, there were no indicators of impairment associated with other intangible assets based on our qualitative assessment. 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 discount rate using a market-based 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 during the second quarter of 2018 and for the nine-months ended September 30, 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 10 to the Consolidated Condensed Financial Statements for additional information on the fair value measurement and disclosure related to the goodwill and other intangibles impairment. The estimates of future cash flows used in determining the fair value of goodwill and intangible assets involve significant management judgment and are based upon assumptions about expected future operating performance, economic conditions, market conditions and cost of capital. Inherent in estimating the future cash flows are uncertainties beyond our control, such as changes in capital markets. The actual cash flows could differ materially from management's estimates due to changes in business conditions, operating performance and economic conditions. *Whirlpool ownership of the Hotpoint brand in the EMEA and Asia Pacific regions is not affiliated with the Hotpoint brand sold in the Americas.

X
- References No definition available. + Details
Name: | us-gaap_GoodwillAndIntangibleAssetsDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for goodwill and intangible assets. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -URI http://asc.fasb.org/topic&trid=2144416 + Details
Name: | us-gaap_GoodwillAndIntangibleAssetsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration