GOODWILL AND OTHER INTANGIBLES

9 Months Ended

Sep. 30, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

The following table summarizes goodwill attributable to our reporting units for the periods presented:


Millions of dollars	North America		Latin America		Asia		Total Whirlpool
Beginning balance December 31, 2022	$	2,829	$	33	$	452	$	3,314


Acquisitions(1)	16		—		—		16
Currency translation	(1)		—		—		(1)

Ending net balance September 30, 2023	$	2,844	$	33	$	452	$	3,329

(1)Increase in goodwill is related to the purchase of InSinkErator business. For additional information, see Notes 9 and 13 to the Consolidated Condensed Financial Statements.

For the nine months ended September 30, 2023, there no indicators of goodwill impairment for any of our reporting units based on our qualitative assessment.

In the second quarter of 2022, we identified indicators of goodwill impairment for our EMEA reporting unit, which required us to complete an interim impairment assessment. The primary indicators of impairment were the adverse impacts from the continuation of the Russia and Ukraine conflict, including the impact on demand, the pending divestiture of our Russian operations and other ongoing adverse macroeconomic impacts such as raw material inflation, supply chain disruption and unfavorable demand. As a result of these factors, the operating results for the three-months ended June 30, 2022 were significantly lower than expected and our expectations of attaining our long term plans for the region had been delayed.

In performing our quantitative assessment of goodwill, 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 include revenue growth, EBIT margins and the discount rate. The financial projections reflected 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, 2022, the carrying value of the EMEA reporting unit exceeded its fair value and we recorded a goodwill impairment charge for the full amount of the goodwill's carrying value of $278 million during the second quarter of 2022.

See Note 9 to the Consolidated Condensed Financial Statements for additional information.

Other Intangible Assets

The following table summarizes other intangible assets for the periods presented:


	September 30, 2023						December 31, 2022
Millions of dollars	Gross Carrying Amount		Accumulated Amortization		Net		Gross Carrying Amount		Accumulated Amortization		Net
Other intangible assets, finite lives
Customer relationships (1)	$	668	$	(316)	$	352	$	668	$	(287)	$	381
Patents and other (2)	116		(114)		2		116		(113)		3
Total other intangible assets, finite lives	$	784	$	(430)	$	354	$	784	$	(400)	$	384
Trademarks, indefinite lives	2,780		—		2,780		2,780		—		2,780
Total other intangible assets	$	3,564	$	(430)	$	3,134	$	3,564	$	(400)	$	3,164

(1) Customer relationships have an estimated useful life of 5 to 19 years.

(2) Patents and other intangibles have an estimated useful life of 3 to 43 years.

For the nine months ended September 30, 2023, there were no indicators of impairment associated with other intangible assets based on our qualitative assessment.

In the second quarter of 2022, we identified indicators of impairment associated with other intangible assets in our EMEA reporting unit, which required us to complete an interim impairment assessment. The primary indicators of impairment were the same as those identified for EMEA reporting unit and resulted in the actual revenues for the three-months ended June 30, 2022 being significantly lower than forecasted for Indesit and Hotpoint* trademarks.

In performing our quantitative assessment of other intangible assets, primarily trademarks, we estimated 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 trademark; and a discount rate using a market-based weighted-average cost of capital. Based on our interim quantitative impairment assessment as of June 30, 2022, the carrying value of certain other intangible assets, including Indesit and Hotpoint*, exceeded their fair value, and we recorded an impairment charge of $106 million during the second quarter of 2022. See Note 9 to the Consolidated Condensed Financial Statements for additional information.

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.