ACQUISITIONS AND DIVESTITURES

6 Months Ended

Jun. 30, 2023

Business Combination, Asset Acquisition, Discontinued Operations and Disposal Groups [Abstract]

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.

Both transactions are subject to certain closing conditions and expected to be completed concurrently in the fourth quarter of 2023.

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 $1,521 million in the fourth quarter of 2022. The loss includes a write-down of the net assets of $1,151 million 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 $240 million for the six months ended June 30, 2023, of which $18 million was recorded during the second quarter, resulting in a total loss of $1,761 million 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 June 30, 2023 and December 31, 2022, respectively.



Millions of dollars	June 30, 2023		December 31, 2022
Carrying amounts of major classes of assets
Current Assets
Cash and cash equivalents	$	96	$	94
Accounts receivable, net of allowance of $31 and $32, respectively	756		667
Inventories	655		650
Prepaid and other current assets	128		145
Total current assets	1,635		1,556
Property, net of accumulated depreciation of $1,670 and $1,648, respectively	877		822
Right of use assets	166		163

Other intangibles, net of accumulated amortization of $146 and $141, respectively	285		279
Deferred income taxes	608		610
Other noncurrent assets	16		17
Total noncurrent assets	1,952		1,891
Total assets	$	3,587	$	3,447
Carrying amounts of major classes of liabilities
Current liabilities
Accounts payable	$	1,220	$	1,394
Accrued expenses	245		152
Accrued advertising and promotions	170		172
Employee compensation	99		107
Notes payable	3		3
Other current liabilities	107		125
Total current liabilities	1,844		1,953
Noncurrent liabilities
Long-term debt	1		2
Pension benefits	114		122
Lease liabilities	136		131
Other noncurrent liabilities	100		88
Total noncurrent liabilities	351		343
Total liabilities	$	2,195	$	2,296

Total net assets of the disposal group classified as held for sale	$	1,392	$	1,151


Assets held for sale	Fair value of interest retained	$	144	$	139
Liabilities held for sale	Cumulative currency translation adjustment and Other comprehensive income on pension	$	468	$	490

The following table summarizes European major appliances business' earnings (loss) available to Whirlpool before income taxes for the six months ended June 30, 2023 and June 30, 2022 respectively:


	Six Months Ended June 30,
in millions	2023		2022
Earnings (loss) before income taxes	$	12	$	(70)

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 June 30, 2023. Purchase accounting adjustments recorded during the second 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 Whirlpool Corporation (the “Company”), entered into a share purchase agreement to sell the Company’s Russia business to Arçelik A.Ş. (“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.