Whirlpool Corporation

Good morning and welcome to Whirlpool Corporation's second quarter 2020 earnings release call. Today's call is being recorded. For opening remarks and introductions, I would like to turn the call over to Senior Director of Investor Relations, Roxanne Warner.

Thank you and welcome to our second quarter 2020 conference call. Joining me today are Marc Bitzer, our Chairman and Chief Executive Officer, and Jim Peters, our Chief Financial Officer. Our remarks today track with a presentation available on the investor section of our website at woolpoolcorp.com. Before we begin, I remind you that as we conduct this call, we will be making forward-looking statements to assist you in understanding Whirlpool Corporation's future expectations. Our actual results could differ materially from these statements due to many factors discussed in our latest 10Q and other periodic reports. We also want to remind you that today's presentation includes non-GAAP measures. We believe these measures are important indicators of our operations as they exclude items that may not be indicative of results from our ongoing business operations. We also think the adjusted measures will provide you a better baseline for analyzing trends in our ongoing business operations. Listeners are directed to the supplemental information package posted on the investor relations section of our website for the reconciliation of non-GAAP items to the most directly comparable GAAP measures. Also, as we highlight on slide two, there is significant uncertainty about the duration and potential impact of the COVID-19 pandemic. Therefore, our discussion of the potential impact of COVID-19 on the company's business results reflects our best estimate based on what we know today. At this time, all participants are in a listen-only mode. Following our prepared remarks, the call will be open for analyst questions. As a reminder, we ask that participants ask no more than two questions. With that, I'll turn the call over to Marc.

Thanks, Roxanne, and good morning, everyone. I hope you and your families are staying healthy and safe during these times. Before I begin, I want to acknowledge the hard work of all our employees throughout this year. I'm extremely proud of their unwavering dedication and commitment to Wopool and our customers through these difficult times. Now turning to slide four, we discuss our second quarter 2020 highlights. We delivered resilient results globally with ongoing earnings per diluted share of $2.15, an ongoing EBIT margin of 5.2%. despite significant and continued COVID-19 related challenges. In North America, we delivered a very strong performance of 12.6% EBIT margins, an expansion of 20 base points, and a clear indication of a region's strength and agility. Across the globe, we took decisive and meaningful actions, driving strong levels of cost takeout. Lastly, we delivered the over year free cash flow improvement of $124 million Due to strong working capital management, particularly in accounts receivable and inventory. Turning to slide 5, we show the drivers of our second quarter EBIT margins. Price mix negatively impacted margins by 75 basis points as unfavorable product mix shifts due to COVID-19 related consumer purchases were partially offset by effective promotion management in North America. Our cost takeout actions delivered approximately 150 basis points of margin expansion, partially offsetting a 300 basis point headwind from lower fixed cost absorption driven by COVID-19 production disruptions and inventory reduction. Additionally, continued favorable raw material trends positively benefited margins by approximately 100 basis points. Lastly, strong cost discipline related to marketing and technology investments partially offset the unfavorable impact of currency, primarily in our Latin America region. Overall, we are very pleased to deliver solid operating margins in what was undoubtedly the most difficult quarter of a global pandemic. This impressively demonstrates the strong execution of our global teams and resiliency of our business model. And now I'll turn it over to Jim to review our regional results.