XML 56 R21.htm IDEA: XBRL DOCUMENT
v3.24.0.1

INCOME TAXES | 12 Months Ended
--- | ---
Dec. 31, 2023
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES Income tax expense was $77 million, $265 million, and $518 million in 2023, 2022 and 2021, respectively. The decrease in tax expense in 2023 compared to 2022 includes legal entity restructuring tax benefits, related to simplifying our legal entity structure to reduce administrative costs associated with the prior structure. The completion of the restructuring created a tax-deductible loss which was recognized in the fourth quarter of 2023, and resulted in a $172 million net tax benefit, partially offset by increases in valuation allowances. The decrease in tax expense in 2022 compared to 2021 is primarily due to lower earnings, partially offset by the impact of non-deductible charges, including loss on sale and disposal as well as goodwill impairment, and increases in valuation allowances. The following table summarizes the difference between an income tax benefit and tax expense at the United States statutory rate of 21% in 2023, 2022, and 2021, respectively, and the income tax expense at effective worldwide tax rates for the respective periods:
Millions of dollars |  | 2023 |  | 2022 |  | 2021
Earnings (loss) before income taxes |  |  |  |  |  |
United States |  | $ | 9 |  |  | $ | (158) |  |  | $ | 1,287 |
Foreign |  | 584 |  |  | (1,069) |  |  | 1,045 |
Earnings (loss) before income taxes |  | $ | 593 |  |  | $ | (1,227) |  |  | $ | 2,332 |
Income tax (benefit) expense computed at United States statutory rate |  | $ | 125 |  |  | $ | (258) |  |  | $ | 490 |
U.S. government tax incentives |  | (20) |  |  | (19) |  |  | (19) |
Foreign government tax incentives |  | (30) |  |  | (23) |  |  | (23) |
Foreign tax rate differential |  | 41 |  |  | (3) |  |  | 66 |
U.S. foreign tax credits |  | (43) |  |  | 11 |  |  | (29) |
Valuation allowances |  | 78 |  |  | 222 |  |  | 1 |
State and local taxes, net of federal tax benefit |  | (43) |  |  | (21) |  |  | 57 |
Foreign withholding taxes |  | 13 |  |  | 52 |  |  | 19 |
U.S. tax on foreign dividends and subpart F income |  | 36 |  |  | 22 |  |  | 9 |
Settlements and changes in unrecognized tax benefits |  | 43 |  |  | 3 |  |  | 100 |
Changes in enacted tax rates |  | 1 |  |  | (2) |  |  | (14) |
Nondeductible loss on sale and disposal of businesses |  | 5 |  |  | 421 |  |  | — |
Nondeductible fines and penalties |  | 18 |  |  | — |  |  | — |
Nondeductible goodwill impairments |  | — |  |  | 59 |  |  | — |
Legal Entity Debt Restructuring |  | — |  |  | (159) |  |  | — |
Divestiture tax impact |  | — |  |  | — |  |  | (35) |
Legal entity restructuring tax impact |  | (172) |  |  | — |  |  | (98) |
Other items, net |  | 25 |  |  | (40) |  |  | (6) |
Income tax computed at effective worldwide tax rates |  | $ | 77 |  |  | $ | 265 |  |  | $ | 518 |
Current and Deferred Tax Provision The following table summarizes our income tax (benefit) provision for 2023, 2022 and 2021:
| 2023 |  | 2022 |  | 2021
Millions of dollars | Current |  | Deferred |  | Current |  | Deferred |  | Current |  | Deferred
United States | $ | (27) |  |  | $ | (212) |  |  | $ | (40) |  |  | $ | 65 |  |  | $ | 132 |  |  | $ | 251 |
Foreign | 197 |  |  | 155 |  |  | 180 |  |  | 85 |  |  | 184 |  |  | (126) |
State and local | (3) |  |  | (33) |  |  | (9) |  |  | (16) |  |  | 80 |  |  | (3) |
| $ | 167 |  |  | $ | (90) |  |  | $ | 131 |  |  | $ | 134 |  |  | $ | 396 |  |  | $ | 122 |
Total income tax expense |  |  | $ | 77 |  |  |  |  | $ | 265 |  |  |  |  | $ | 518 |
United States Tax on Foreign Dividends We have historically reinvested all unremitted earnings of the majority of our foreign subsidiaries and affiliates, and therefore have not recognized any U.S. deferred tax liability on those earnings. The Company had cash and cash equivalents of approximately $1.6 billion at December 31, 2023, of which approximately $1.1 billion was held by subsidiaries in foreign countries. Our intent is to permanently reinvest substantially all of these funds outside of the United States and our current plans do not demonstrate a need to repatriate the cash to fund our U.S. operations. However, if these funds were repatriated, they would likely not be subject to United States federal income tax under the previously taxed income or the dividend exemption rules. We would likely be required to accrue and pay United States state and local taxes and withholding taxes payable to various countries. It is not practicable to estimate the tax impact of the reversal of the outside basis difference, or the repatriation of cash due to the complexity of its hypothetical calculation. Valuation Allowances At December 31, 2023, we had net operating loss carryforwards of $5.4 billion, $1.2 billion of which were U.S. state net operating loss carryforwards, compared to $5.8 billion and $578 million at December 31, 2022, respectively. The increase in U.S. state net operating loss carryforwards was primarily driven by the legal entity restructuring actions in 2023. Of the total net operating loss carryforwards at December 31, 2023, $3.3 billion do not expire, with substantially all of the remaining carryforwards expiring in various years through 2043. At December 31, 2023, we had $365 million of United States general business credit carryforwards available to offset future payments of federal income taxes, expiring between 2031 and 2043. We routinely review the future realization of deferred tax assets based on projected future reversal of taxable temporary differences, available tax planning strategies and projected future taxable income. We have recorded a valuation allowance to reflect the net estimated amount of certain deferred tax assets associated with net operating loss and other deferred tax assets we believe will be realized. Our recorded valuation allowance of $490 million at December 31, 2023 consists of $393 million of net operating loss carryforward deferred tax assets and $97 million of other deferred tax assets. Our recorded valuation allowance was $412 million at December 31, 2022 and consisted of $334 million of net operating loss carryforward deferred tax assets and $78 million of other deferred tax assets. The increase in our valuation allowance was primarily driven by the European major domestic appliance business transaction and includes $78 million recognized in net earnings. Net operating loss carryforwards of $2.1 billion relates to the European major domestic appliance business as of December 31, 2023. Net deferred tax assets of $512 million, including $106 million of valuation allowances, associated with the disposal group has been transferred to assets held for sale in the fourth quarter of 2023. For additional information, see Notes 10 and 15 to the Consolidated Financial Statements. Deferred Tax Liabilities and Assets Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities used for financial reporting purposes and the amounts used for income tax purposes. The following table summarizes the significant components of our deferred tax liabilities and assets at December 31, 2023 and 2022:
Millions of dollars |  | 2023 |  | 2022
Deferred tax liabilities |  |  |  |
Intangibles |  | $ | 429 |  |  | $ | 329 |
Property, net |  | 224 |  |  | 185 |
Right of use assets |  | 190 |  |  | 220 |
Inventory Reserves |  | (3) |  |  | 20 |
Other |  | 238 |  |  | 168 |
Total deferred tax liabilities |  | $ | 1,078 |  |  | $ | 922 |
Deferred tax assets |  |  |  |
U.S. general business credit carryforwards, including Energy Tax Credits |  | $ | 365 |  |  | $ | 421 |
Corporate Alternative Minimum Tax credits |  | 28 |  |  | — |
Lease liabilities |  | 200 |  |  | 231 |
Pensions |  | 64 |  |  | 40 |
Loss carryforwards |  | 1,388 |  |  | 1,300 |
Postretirement obligations |  | 29 |  |  | 30 |
Foreign tax credit carryforwards |  | 94 |  |  | 9 |
Research and development capitalization |  | 315 |  |  | 194 |
Employee payroll and benefits |  | 48 |  |  | 46 |
Accrued expenses |  | 52 |  |  | 52 |
Product warranty accrual |  | 49 |  |  | 48 |
Receivable and inventory allowances |  | 67 |  |  | 61 |
Other |  | 676 |  |  | 552 |
Total deferred tax assets |  | 3,375 |  |  | 2,984 |
Valuation allowances for deferred tax assets |  | (490) |  |  | (412) |
Deferred tax assets, net of valuation allowances |  | 2,885 |  |  | 2,572 |
Reclassification of net deferred tax assets to held for sale |  | (515) |  |  | (602) |
Net deferred tax assets |  | $ | 1,292 |  |  | $ | 1,048 |
On August 16, 2022, the Inflation Reduction Act of 2022 (the “IRA”) was enacted into law. Among other changes to the Internal Revenue Code of 1986, as amended (the “Code”), the IRA imposes a 15% corporate alternative minimum tax on certain corporations (the “CAMT”). To the extent a corporation is subject to the CAMT in a prior taxable year and in a later taxable year is subject to the regular corporate tax, such corporation may apply the prior amounts paid under the CAMT against its regular tax liability to the extent such credits do not reduce the regular tax liability below the CAMT applicable in such taxable year. We have recognized a $28 million CAMT liability and related deferred tax asset carryforward as of December 31, 2023. Unrecognized Tax Benefits The following table represents a reconciliation of the beginning and ending amount of unrecognized tax benefits that if recognized would impact the effective tax rate, excluding federal benefits of state and local tax positions, and interest and penalties:
Millions of dollars |  | 2023 |  | 2022 |  | 2021
Balance, January 1 |  | $ | 589 |  |  | $ | 580 |  |  | $ | 427 |
Additions for tax positions of the current year |  | 13 |  |  | 24 |  |  | 17 |
Additions for tax positions of prior years |  | 22 |  |  | 32 |  |  | 179 |
Reductions for tax positions of prior years |  | (56) |  |  | (45) |  |  | (34) |
Settlements during the period (1) |  | (188) |  |  | (1) |  |  | (7) |
Lapses of applicable statute of limitation |  | — |  |  | (1) |  |  | (2) |
Balance, December 31 |  | $ | 380 |  |  | $ | 589 |  |  | $ | 580 |
(1) During the fourth quarter of 2023, the Company resolved a number of disputed tax positions with the U.S. and other tax authorities. The Company had previously recorded reserves for the risk associated with these tax positions, and the settlement of these matters resulted in a reduction in the Company's unrecognized tax benefits, which is shown in the table above. Interest and penalties associated with unrecognized tax benefits resulted in a net benefit of $12 million, net expense of $24 million and $14 million in December 31, 2023, 2022 and 2021, respectively. We have accrued a total of $78 million, $90 million and $66 million at December 31, 2023, 2022 and 2021, respectively. It is reasonably possible that certain unrecognized tax benefits of $30 million could be settled with various related jurisdictions during the next 12 months. We are in various stages of tax disputes (including audits, appeals and litigation) with certain governmental tax authorities. We establish liabilities for the difference between tax return provisions and the benefits recognized in our financial statements. Such amounts represent a reasonable provision for taxes ultimately expected to be paid, and may need to be adjusted over time as more information becomes known. We are no longer subject to any significant tax disputes (including audits, appeals and litigation) for the years before 2010 relating to US Federal income taxes and for the years before 2003 relating to any state, local or foreign income taxes. Other Income Tax Matters During its examination of Whirlpool’s 2009 U.S. federal income tax return, the IRS asserted that income earned by a Luxembourg subsidiary via its Mexican branch should be recognized as income on its 2009 U.S. federal income tax return. The Company believed the proposed assessment was without merit and contested the matter in United States Tax Court (US Tax Court). Both Whirlpool and the IRS moved for partial summary judgment on this issue. On May 5, 2020, the US Tax Court granted the IRS’s motion for partial summary judgment and denied Whirlpool’s. The Company appealed the US Tax Court decision to the United States Court of Appeals for the Sixth Circuit, and, on December 6, 2021, the three-judge panel, in a divided decision, affirmed the U.S. Tax Court decision (the "Ruling"). The Company recorded a reserve of $98 million in the fourth quarter of 2021, which represents the expected increase in the Company’s net income tax expense, plus interest, for 2009 through 2019, which represents all of the Company’s tax years that were affected by the Ruling. On January 20, 2022, the Company filed a petition for rehearing with the Sixth Circuit, which was denied on March 2, 2022. On June 30, 2022, the Company filed a petition for certiorari with the U.S. Supreme Court, which was denied on November 21, 2022. The Company considers this tax dispute settled and no adjustments to the reserve have been recognized.

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

X
- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 946 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Publisher FASB -URI https://asc.fasb.org//1943274/2147480990/946-20-50-13 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//740/tableOfContent Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 14 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-14 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-21 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 270 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482526/740-270-50-1 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 17 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-17 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479360/740-10-S99-1 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479360/740-10-S99-2 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 30 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482603/740-30-50-2 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration