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ACQUISITIONS AND DIVESTITURES | 9 Months Ended
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Sep. 30, 2023
Business Combination, Asset Acquisition, Discontinued Operations and Disposal Groups [Abstract] |
ACQUISITIONS AND DIVESTITURES | ACQUISITIONS AND DIVESTITURES European Major Domestic Appliance Business Held for Sale On January 16, 2023, Whirlpool entered into a contribution agreement with Arçelik B.V. (“Arcelik”) to carve out and contribute our major domestic appliance European business operations into a newly formed European appliance company which constitutes a combination of Arcelik’s and Whirlpool's European businesses. Whirlpool will own approximately 25% and Arcelik will own approximately 75% of the European appliance company. The sale includes the Company's major domestic appliance business in EMEA, including nine production sites. On June 22, 2023, Whirlpool entered into a share purchase agreement with Arcelik for the sale of our Middle East and North Africa ("MENA") business. The sale was previously agreed upon in principle and announced on January 17, 2023, as part of the outcome of Whirlpool’s strategic review of the EMEA business. The financial impact of the MENA transaction has been included in the loss on sale and disposal of businesses related to the European major domestic appliance business transaction as discussed further below. Our European major domestic appliance business, including the MENA business, is reported within our EMEA reportable segment and met the criteria for held for sale accounting during the fourth quarter of 2022. The operations of the European disposal group did not meet the criteria to be presented as discontinued operations. The Europe transaction is subject to certain closing conditions, including regulatory approvals from the European Commission, Germany, Austria and China, which have been received, and the UK which remains. We are working diligently with all parties to close the transactions as soon as possible, and expect the transactions to be completed by April 2024. Upon closing, the transaction will result in the deconsolidation of the European major appliances business. In connection with the sale, we recorded a loss on disposal of $1.5 billion in the fourth quarter of 2022. The loss includes a write-down of the net assets of $1.2 billion of the disposal group to a fair value of $139 million and also includes $393 million of cumulative currency translation adjustments, $98 million release of other comprehensive loss on pension and $18 million of other transaction related costs. No goodwill is included in the disposal group. We recorded an adjustment of $286 million for the nine months ended September 30, 2023, of which $46 million was recorded during the third quarter, resulting in a total loss of $1.8 billion for the transaction. These adjustments are recorded in the loss on sale and disposal of businesses and reflect transaction costs and ongoing reassessment of the fair value less costs to sell of the disposal group which will continue to be evaluated each reporting period until completion of the transaction. Both Whirlpool and the post-closing controlling interest shareholder retain an option for Arcelik to purchase the remaining equity interest in a newly formed European appliance company for fair value, which could be material to the financial statements of the Company, depending on the performance of the business. The following table presents the carrying amounts of the major classes of the disposal group's assets and liabilities as of September 30, 2023 and December 31, 2022, respectively.
Millions of dollars |  |  |  |  |  |  | September 30, 2023 | December 31, 2022
Carrying amounts of major classes of assets |  |  |  |  |  |  |  |
Current Assets |  |  |  |  |  |  |  |
Cash and cash equivalents |  |  |  |  |  |  | $ | 89 |  | $ | 94 |
Accounts receivable, net of allowance of $27 and $32, respectively |  |  |  |  |  |  | 748 |  | 667 |
Inventories |  |  |  |  |  |  | 600 |  | 650 |
Prepaid and other current assets |  |  |  |  |  |  | 105 |  | 145 |
Total current assets |  |  |  |  |  |  | 1,542 |  | 1,556 |
Property, net of accumulated depreciation of $1,599 and $1,648, respectively |  |  |  |  |  |  | 871 |  | 822 |
Right of use assets |  |  |  |  |  |  | 160 |  | 163 |
Other intangibles, net of accumulated amortization of $142 and $141, respectively |  |  |  |  |  |  | 275 |  | 279 |
Deferred income taxes |  |  |  |  |  |  | 554 |  | 610 |
Other noncurrent assets |  |  |  |  |  |  | 15 |  | 17 |
Total noncurrent assets |  |  |  |  |  |  | 1,875 |  | 1,891 |
Total assets |  |  |  |  |  |  | $ | 3,417 |  | $ | 3,447 |
Carrying amounts of major classes of liabilities |  |  |  |  |  |  |  |
Current liabilities |  |  |  |  |  |  |  |
Accounts payable |  |  |  |  |  |  | $ | 1,109 |  | $ | 1,394 |
Accrued expenses |  |  |  |  |  |  | 232 |  | 152 |
Accrued advertising and promotions |  |  |  |  |  |  | 182 |  | 172 |
Employee compensation |  |  |  |  |  |  | 84 |  | 107 |
Notes payable |  |  |  |  |  |  | 2 |  | 3 |
Other current liabilities |  |  |  |  |  |  | 137 |  | 125 |
Total current liabilities |  |  |  |  |  |  | 1,746 |  | 1,953 |
Noncurrent liabilities |  |  |  |  |  |  |  |
Long-term debt |  |  |  |  |  |  | 1 |  | 2 |
Pension benefits |  |  |  |  |  |  | 105 |  | 122 |
Lease liabilities |  |  |  |  |  |  | 130 |  | 131 |
Other noncurrent liabilities |  |  |  |  |  |  | 32 |  | 88 |
Total noncurrent liabilities |  |  |  |  |  |  | 268 |  | 343 |
Total liabilities |  |  |  |  |  |  | $ | 2,014 |  | $ | 2,296 |
Total net assets of the disposal group classified as held for sale |  |  |  |  |  |  | $ | 1,403 |  | $ | 1,151 |
Assets held for sale | Fair value of interest retained | $ | 140 |  | $ | 139 |
Liabilities held for sale | Cumulative currency translation adjustment and Other comprehensive income on pension | $ | 478 |  | $ | 490 |
The following table summarizes European major appliances business' earnings (loss) available to Whirlpool before income taxes for the nine months ended September 30, 2023 and September 30, 2022 respectively:
|  | Nine Months Ended September 30, |  |
in millions |  | 2023 | 2022 |  |  |  |
Earnings (loss) before income taxes |  | $ | 12 |  | $ | (89) |  |  |  |  |
Earnings (loss) before income taxes excludes intercompany other income and expense which eliminates at Total Whirlpool level. Additionally, the EMEA operating segment includes other businesses which are not classified as held for sale. InSinkErator Acquisition On August 7, 2022, the Company entered into an Asset and Stock Purchase Agreement (the “Purchase Agreement”) with Emerson Electric Co. (“Emerson”) to purchase Emerson’s InSinkErator business, a manufacturer of food waste disposers and instant hot water dispensers for home and commercial use, for a purchase price of $3 billion in cash, subject to customary adjustments. On October 31, 2022, we completed the acquisition of the InSinkErator business pursuant to the terms of the Purchase Agreement. We used the net proceeds from a $2.5 billion borrowing under our delayed draw term loan facility and $500 million of cash on hand to fund the acquisition. See Note 5 to the Consolidated Condensed Financial Statements for additional information about the term loan facility. Purchase Price Allocation The acquisition has been accounted for as a business combination under the acquisition method of accounting. This requires allocation of the purchase price to the estimated fair values of the identifiable assets acquired and liabilities assumed, including goodwill and other intangible assets. The Company is in the process of finalizing third-party valuations for the preliminary purchase price allocation which are subject to change. Purchase accounting adjustments during the period were not material. The Company expects to finalize any further purchase accounting adjustments as soon as practicable, but no later than one year from the acquisition date. The following table presents the preliminary allocation of purchase price related to the InSinkErator acquisition as of September 30, 2023. Purchase accounting adjustments recorded during the third quarter of 2023 were not material.
(in millions) | Amount
Cash and cash equivalents | $ | 7 |
Receivables, net | 74 |
Inventories | 93 |
Other current assets | 1 |
Property, plant and equipment, net | 173 |
Goodwill | 1,152 |
Other intangible assets | 1,630 |
Other assets | 11 |
Accounts payable | 49 |
Accrued expenses | 26 |
Other current liabilities | 34 |
Deferred income taxes | 1 |
Other long-term liabilities | 10 |
Total Estimated Purchase Consideration | $ | 3,021 |
Russia Sale Transaction On June 27, 2022, Whirlpool EMEA SpA, a subsidiary of the Company, entered into a share purchase agreement to sell the Company’s Russia business to Arcelik, subject to customary conditions at closing. The sale included the entirety of the Company’s operations in Russia, including the Company’s manufacturing facility in Lipetsk, Russia, and the sales organization in Moscow, Russia, as well as sales operations in Kazakhstan and other select CIS countries. On August 31, 2022, we completed the sale to Arcelik. The consideration includes contingent consideration based on future business and other conditions of the Russia operations. We will recognize the benefit of the contingent consideration when received due to the uncertainty in the Russia marketplace. Additionally, the contingent consideration is subject to a cap based on the agreed net asset value of the Russia business of €261 million at closing (approximately $262 million at August 31, 2022). The Russia business was reported within our EMEA reportable segment and met the criteria for held for sale accounting. The operations of Russia did not meet the criteria to be presented as discontinued operations. In connection with the sale, we recorded a loss on disposal of $346 million in the second quarter of 2022. The loss includes a charge of $333 million for the write-down of the net assets of the disposal group to fair value and $13 million of cumulative currency translation adjustments. On the closing date of August 31, 2022, we recorded an immaterial adjustment to the final loss amount, resulting in a total loss of $348 million for the nine months ended September 30, 2022. Earnings before income taxes for Russia were immaterial to the Consolidated Condensed Financial Statements for the periods presented. For additional information see Note 9 to the Consolidated Condensed Financial Statements.

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- Definition The entire disclosure for business combinations, including leverage buyout transactions (as applicable), and divestitures. This may include a description of a business combination or divestiture (or series of individually immaterial business combinations or divestitures) completed during the period, including background, timing, and assets and liabilities recognized and reclassified or sold. This element does not include fixed asset sales and plant closings. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 805 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//805/tableOfContent Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 205 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//205-20/tableOfContent + Details
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- Definition Business Combination, Asset Acquisition, Discontinued Operations and Disposal Groups + References No definition available. + Details
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