ý | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Large Accelerated Filer | ý | Accelerated Filer | ¨ | |
Non-Accelerated Filer | ¨ | Smaller Reporting Company | ¨ |
Page | ||
Part I. | ||
Part II. | ||
Item 1. | Financial Statements. |
LENNOX INTERNATIONAL INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In millions, except share and per share data) | |||||||
As of September 30, 2012 | As of December 31, 2011 | ||||||
(unaudited) | |||||||
ASSETS | |||||||
CURRENT ASSETS: | |||||||
Cash and cash equivalents | $ | 48.8 | $ | 45.0 | |||
Accounts and notes receivable, net of allowances of $9.5 and $11.3 in 2012 and 2011, respectively | 450.3 | 387.0 | |||||
Inventories, net | 398.4 | 317.9 | |||||
Deferred income taxes, net | 32.8 | 33.8 | |||||
Other assets | 72.6 | 68.5 | |||||
Assets of discontinued operations | 108.7 | 160.5 | |||||
Total current assets | 1,111.6 | 1,012.7 | |||||
PROPERTY, PLANT AND EQUIPMENT, net of accumulated depreciation of $580.3 and $554.0 in 2012 and 2011, respectively | 289.4 | 300.7 | |||||
GOODWILL | 223.7 | 223.2 | |||||
DEFERRED INCOME TAXES | 87.3 | 90.7 | |||||
OTHER ASSETS, net | 81.5 | 78.4 | |||||
TOTAL ASSETS | $ | 1,793.5 | $ | 1,705.7 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
CURRENT LIABILITIES: | |||||||
Short-term debt | $ | 31.1 | $ | 4.7 | |||
Current maturities of long-term debt | 0.3 | 0.8 | |||||
Accounts payable | 277.6 | 254.9 | |||||
Accrued expenses | 258.7 | 239.4 | |||||
Income taxes payable | 8.5 | 5.7 | |||||
Liabilities of discontinued operations | 62.2 | 71.6 | |||||
Total current liabilities | 638.4 | 577.1 | |||||
LONG-TERM DEBT | 449.6 | 459.6 | |||||
POSTRETIREMENT BENEFITS, OTHER THAN PENSIONS | 17.1 | 18.6 | |||||
PENSIONS | 116.2 | 124.7 | |||||
OTHER LIABILITIES | 62.8 | 57.9 | |||||
Total liabilities | 1,284.1 | 1,237.9 | |||||
COMMITMENTS AND CONTINGENCIES | |||||||
STOCKHOLDERS’ EQUITY: | |||||||
Preferred stock, $.01 par value, 25,000,000 shares authorized, no shares issued or outstanding | — | — | |||||
Common stock, $.01 par value, 200,000,000 shares authorized, 87,170,197 shares and 86,938,004 shares issued for 2012 and 2011, respectively | 0.9 | 0.9 | |||||
Additional paid-in capital | 894.0 | 881.2 | |||||
Retained earnings | 732.6 | 692.9 | |||||
Accumulated other comprehensive loss | (10.2 | ) | (37.1 | ) | |||
Treasury stock, at cost, 36,885,101 shares and 36,093,966 shares for 2012 and 2011, respectively | (1,107.9 | ) | (1,070.1 | ) | |||
Total stockholders’ equity | 509.4 | 467.8 | |||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 1,793.5 | $ | 1,705.7 |
LENNOX INTERNATIONAL INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited, in millions, except per share data) | |||||||||||||||
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
NET SALES | $ | 809.7 | $ | 801.2 | $ | 2,264.5 | $ | 2,192.4 | |||||||
COST OF GOODS SOLD | 604.8 | 614.6 | 1,710.6 | 1,675.9 | |||||||||||
Gross profit | 204.9 | 186.6 | 553.9 | 516.5 | |||||||||||
OPERATING EXPENSES: | |||||||||||||||
Selling, general and administrative expenses | 125.9 | 122.4 | 379.8 | 372.9 | |||||||||||
Losses and other expenses, net | 0.3 | 2.6 | 0.2 | 3.6 | |||||||||||
Restructuring charges | 0.4 | 8.0 | 3.1 | 11.3 | |||||||||||
Income from equity method investments | (2.6 | ) | (3.0 | ) | (8.8 | ) | (9.0 | ) | |||||||
Operational income from continuing operations | 80.9 | 56.6 | 179.6 | 137.7 | |||||||||||
INTEREST EXPENSE, net | 4.4 | 4.1 | 13.4 | 12.5 | |||||||||||
OTHER EXPENSE, net | — | — | 0.1 | 0.1 | |||||||||||
Income from continuing operations before income taxes | 76.5 | 52.5 | 166.1 | 125.1 | |||||||||||
PROVISION FOR INCOME TAXES | 26.8 | 17.6 | 57.6 | 42.4 | |||||||||||
Income from continuing operations | 49.7 | 34.9 | 108.5 | 82.7 | |||||||||||
DISCONTINUED OPERATIONS: | |||||||||||||||
Loss from discontinued operations | (24.6 | ) | (2.1 | ) | (57.2 | ) | (17.7 | ) | |||||||
Benefit from income taxes | (4.3 | ) | (1.0 | ) | (16.7 | ) | (6.6 | ) | |||||||
Loss from discontinued operations | (20.3 | ) | (1.1 | ) | (40.5 | ) | (11.1 | ) | |||||||
Net income | $ | 29.4 | $ | 33.8 | $ | 68.0 | $ | 71.6 | |||||||
EARNINGS PER SHARE – BASIC: | |||||||||||||||
Income from continuing operations | $ | 0.98 | $ | 0.67 | $ | 2.13 | $ | 1.56 | |||||||
Loss from discontinued operations | (0.40 | ) | (0.02 | ) | (0.79 | ) | (0.21 | ) | |||||||
Net income | $ | 0.58 | $ | 0.65 | $ | 1.34 | $ | 1.35 | |||||||
EARNINGS PER SHARE – DILUTED: | |||||||||||||||
Income from continuing operations | $ | 0.97 | $ | 0.66 | $ | 2.11 | $ | 1.53 | |||||||
Loss from discontinued operations | (0.40 | ) | (0.02 | ) | (0.79 | ) | (0.20 | ) | |||||||
Net income | $ | 0.57 | $ | 0.64 | $ | 1.32 | $ | 1.33 | |||||||
AVERAGE SHARES OUTSTANDING: | |||||||||||||||
Basic | 50.6 | 52.2 | 50.8 | 53.0 | |||||||||||
Diluted | 51.3 | 52.8 | 51.5 | 53.9 | |||||||||||
CASH DIVIDENDS DECLARED PER SHARE | $ | 0.20 | $ | 0.18 | $ | 0.56 | $ | 0.54 |
LENNOX INTERNATIONAL INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited, in millions) | |||||||||||||||
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
NET INCOME | $ | 29.4 | $ | 33.8 | $ | 68.0 | $ | 71.6 | |||||||
OTHER COMPREHENSIVE INCOME (LOSS), net of tax: | |||||||||||||||
Foreign currency translation adjustments, net | 24.7 | (55.2 | ) | 19.5 | (27.4 | ) | |||||||||
Reclassification of foreign currency translation gains into earnings | — | — | (3.7 | ) | — | ||||||||||
Derivatives, net of tax expense (benefit) of $2.9 and $5.4 for the three and nine months ended September 30, 2012, respectively, and $(7.5) and $(11.9) for the three and nine months ended September 30, 2011, respectively | 2.0 | (18.6 | ) | 3.5 | (20.7 | ) | |||||||||
Reclassification of derivative losses (gains) into earnings | 2.8 | (2.3 | ) | 7.6 | (10.9 | ) | |||||||||
Other comprehensive income (loss) | $ | 29.5 | $ | (76.1 | ) | $ | 26.9 | $ | (59.0 | ) | |||||
Comprehensive income (loss) | $ | 58.9 | $ | (42.3 | ) | $ | 94.9 | $ | 12.6 |
LENNOX INTERNATIONAL INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS For the Nine Months Ended September 30, 2012 and 2011 (Unaudited, in millions) | |||||||
2012 | 2011 | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||
Net income | $ | 68.0 | $ | 71.6 | |||
Net loss from discontinued operations | 40.5 | 11.1 | |||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||||||
Income from equity method investments | (8.8 | ) | (9.0 | ) | |||
Dividends from affiliates | 6.9 | 8.6 | |||||
Restructuring expenses, net of cash paid | — | 5.0 | |||||
Provision for bad debts | 2.0 | 4.4 | |||||
Unrealized (gain) loss on derivative contracts | (1.4 | ) | 4.7 | ||||
Stock-based compensation expense | 10.4 | 12.6 | |||||
Depreciation and amortization | 41.1 | 42.3 | |||||
Deferred income taxes | 0.5 | 4.0 | |||||
Other items, net | 3.3 | (3.1 | ) | ||||
Changes in assets and liabilities, net of effects of acquisitions and divestitures: | |||||||
Accounts and notes receivable | (62.4 | ) | (66.6 | ) | |||
Inventories | (81.3 | ) | (82.6 | ) | |||
Other current assets | (5.0 | ) | (2.3 | ) | |||
Accounts payable | 20.8 | 61.6 | |||||
Accrued expenses | 32.1 | (27.9 | ) | ||||
Income taxes payable and receivable | 13.7 | 1.3 | |||||
Other | (3.6 | ) | (2.7 | ) | |||
Net cash used in discontinued operations | (12.4 | ) | (35.2 | ) | |||
Net cash provided by (used in) operating activities | 64.4 | (2.2 | ) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||
Proceeds from the disposal of property, plant and equipment | 0.1 | 0.2 | |||||
Purchases of property, plant and equipment | (28.0 | ) | (25.8 | ) | |||
Net proceeds from sale of businesses | 10.1 | 0.6 | |||||
Acquisition of businesses | — | (147.7 | ) | ||||
Change in restricted cash | — | 12.2 | |||||
Net cash used in discontinued operations | (0.3 | ) | (1.2 | ) | |||
Net cash used in investing activities | (18.1 | ) | (161.7 | ) | |||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
Short-term borrowings, net | 1.3 | 2.5 | |||||
Asset securitization borrowings | 480.0 | 220.0 | |||||
Asset securitization payments | (455.0 | ) | (220.0 | ) | |||
Long-term payments | (0.9 | ) | (0.7 | ) | |||
Borrowings from revolving credit facility | 696.0 | 1,090.0 | |||||
Payments on revolving credit facility | (706.0 | ) | (911.5 | ) | |||
Proceeds from stock option exercises | 0.3 | 1.5 | |||||
Repurchases of common stock | (38.4 | ) | (90.9 | ) | |||
Excess tax benefits related to share-based payments | 1.7 | 1.5 | |||||
Cash dividends paid | (27.5 | ) | (27.2 | ) | |||
Net cash (used in) provided by financing activities | (48.5 | ) | 65.2 | ||||
DECREASE IN CASH AND CASH EQUIVALENTS | (2.2 | ) | (98.7 | ) | |||
EFFECT OF EXCHANGE RATES ON CASH AND CASH EQUIVALENTS | 6.0 | (3.4 | ) | ||||
CASH AND CASH EQUIVALENTS, beginning of period | 45.0 | 160.0 | |||||
CASH AND CASH EQUIVALENTS, end of period | $ | 48.8 | $ | 57.9 | |||
Supplementary disclosures of cash flow information: | |||||||
Cash paid during the year for: | |||||||
Interest, net | $ | 11.8 | $ | 10.7 | |||
Income taxes (net of refunds) | $ | 27.8 | $ | 28.9 |
As of September 30, 2012 | As of December 31, 2011 | ||||||
Finished goods | $ | 290.1 | $ | 222.3 | |||
Work in process | 14.8 | 13.2 | |||||
Raw materials and repair parts | 167.4 | 156.3 | |||||
472.3 | 391.8 | ||||||
Excess of current cost over last-in, first-out cost and other items | (73.9 | ) | (73.9 | ) | |||
Total inventories, net | $ | 398.4 | $ | 317.9 |
Balance at December 31, 2011 | Balance at September 30, 2012 | ||||||||||||||
Segment: | Goodwill | Acquisitions/ (Dispositions) | Other(1) | Goodwill | |||||||||||
Residential Heating & Cooling | $ | 26.1 | $ | — | $ | — | $ | 26.1 | |||||||
Commercial Heating & Cooling | 63.5 | — | (0.1 | ) | 63.4 | ||||||||||
Refrigeration | 133.6 | — | 0.6 | 134.2 | |||||||||||
$ | 223.2 | $ | — | $ | 0.5 | $ | 223.7 |
(1) | Other consists primarily of changes in foreign currency translation rates. |
As of September 30, 2012 | As of December 31, 2011 | ||||||
Commodity Price Hedges: | |||||||
(Gains) losses included in AOCI, net of tax | $ | (2.3 | ) | $ | 6.1 | ||
Expense for (benefit from) income taxes | 1.3 | (3.5 | ) | ||||
Interest Rate Swap: | |||||||
Losses included in AOCI, net of tax | $ | 0.1 | $ | 1.1 | |||
Benefit from income taxes | — | (0.6 | ) |
As of September 30, 2012 | As of December 31, 2011 | ||||
(pounds) | (pounds) | ||||
Copper | 21.4 | 23.3 |
As of September 30, 2012 | As of December 31, 2011 | ||||
(pounds) | (pounds) | ||||
Copper | 2.3 | 2.8 | |||
Aluminum | 2.6 | 3.0 |
As of September 30, 2012 | As of December 31, 2011 | ||||
Notional amounts: | |||||
Brazilian Real | 14.3 | 4.5 | |||
Mexican Peso | 143.7 | 199.0 | |||
Euro | 10.0 | 7.8 | |||
British Pound | 4.4 | 6.5 | |||
Indian Rupee | 78.0 | — |
Fair Values of Derivative Instruments(1) | |||||||||||||||
Derivatives Designated as Hedging Instruments | Derivatives Not Designated as Hedging Instruments | ||||||||||||||
As of September 30, 2012 | As of December 31, 2011 | As of September 30, 2012 | As of December 31, 2011 | ||||||||||||
Current Assets: | |||||||||||||||
Other Assets | |||||||||||||||
Commodity futures contracts | $ | 3.2 | $ | — | $ | 0.4 | $ | — | |||||||
Foreign currency forward contracts | — | — | — | 1.2 | |||||||||||
Non-Current Assets: | |||||||||||||||
Other Assets, net | |||||||||||||||
Commodity futures contracts | 0.7 | 0.1 | 0.1 | — | |||||||||||
Total Assets | $ | 3.9 | $ | 0.1 | $ | 0.5 | $ | 1.2 | |||||||
Current Liabilities: | |||||||||||||||
Accrued Expenses | |||||||||||||||
Commodity futures contracts | $ | — | $ | 9.4 | $ | 0.1 | $ | 1.8 | |||||||
Interest rate swap | 0.1 | 1.8 | — | — | |||||||||||
Foreign currency forward contracts | — | — | — | 0.1 | |||||||||||
Non-Current Liabilities: | |||||||||||||||
Other Liabilities | |||||||||||||||
Commodity futures contracts | — | 0.3 | — | 0.2 | |||||||||||
Interest rate swap | — | — | — | — | |||||||||||
Total Liabilities | $ | 0.1 | $ | 11.5 | $ | 0.1 | $ | 2.1 |
(1) | All derivative instruments are classified as Level 2 within the fair value hierarchy. For more information on other fair value measurements, see Note 15. |
Derivatives in Cash Flow Hedging Relationships | |||||||||||||||
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Amount of Loss or (Gain) Reclassified from AOCI into Income (Effective Portion): | |||||||||||||||
Commodity futures contracts(1) | $ | 2.2 | $ | (2.9 | ) | $ | 5.8 | $ | (12.8 | ) | |||||
Interest rate swap(2) | 0.6 | 0.6 | 1.8 | 1.9 | |||||||||||
$ | 2.8 | $ | (2.3 | ) | $ | 7.6 | $ | (10.9 | ) | ||||||
Amount of (Gain) or Loss Recognized in Income on Derivatives (Ineffective Portion): | |||||||||||||||
Commodity futures contracts(3) | $ | (0.1 | ) | $ | 0.1 | $ | (0.2 | ) | $ | 0.1 |
Derivatives Not Designated as Hedging Instruments | |||||||||||||||
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Amount of (Gain) or Loss Recognized in Income on Derivatives: | |||||||||||||||
Commodity futures contracts(3) | $ | (0.8 | ) | $ | 3.3 | $ | (0.9 | ) | $ | 3.8 | |||||
Foreign currency forward contracts(3) | 0.6 | (0.4 | ) | 0.3 | 0.9 | ||||||||||
$ | (0.2 | ) | $ | 2.9 | $ | (0.6 | ) | $ | 4.7 |
(1) | The loss (gain) is recorded in Cost of goods sold in the accompanying Consolidated Statements of Operations. |
(2) | The loss is recorded in Interest expense, net in the accompanying Consolidated Statements of Operations. |
(3) | The (gain) loss is recorded in Losses and other expenses, net in the accompanying Consolidated Statements of Operations. |
As of September 30, 2012 | As of December 31, 2011 | ||||||
Accrued expenses | $ | 25.5 | $ | 26.7 | |||
Other liabilities | 45.1 | 41.6 | |||||
$ | 70.6 | $ | 68.3 |
Total warranty liability as of December 31, 2011 | $ | 68.3 | |
Payments made in 2012 | (18.2 | ) | |
Changes resulting from issuance of new warranties | 20.0 | ||
Changes in estimates associated with pre-existing liabilities | 0.2 | ||
Changes in foreign currency translation rates and other | 0.3 | ||
Total warranty liability as of September 30, 2012 | $ | 70.6 |
Total accrued product quality issue as of December 31, 2011 | $ | 7.5 | |
Estimated expense for expected product quality claims | 1.7 | ||
Product quality claims | (2.1 | ) | |
Total accrued product quality issue as of September 30, 2012 | $ | 7.1 |
As of September 30, 2012 | As of December 31, 2011 | ||||||
Short-Term Debt: | |||||||
Asset Securitization Program | $ | 25.0 | $ | — | |||
Foreign obligations | 6.1 | 4.7 | |||||
Total short-term debt | $ | 31.1 | $ | 4.7 | |||
Current maturities of long-term debt: | $ | 0.3 | $ | 0.8 | |||
Long-Term Debt: | |||||||
Capital lease obligations | $ | 16.6 | $ | 16.6 | |||
Domestic revolving credit facility | 233.0 | 243.0 | |||||
Senior unsecured notes | 200.0 | 200.0 | |||||
Total long-term debt | $ | 449.6 | $ | 459.6 | |||
Total debt | $ | 481.0 | $ | 465.1 |
As of September 30, 2012 | As of December 31, 2011 | ||||||
Eligible amount available under the ASP on qualified accounts receivable | $ | 150.0 | $ | 150.0 | |||
Beneficial interest sold | 25.0 | — | |||||
Remaining amount available | $ | 125.0 | $ | 150.0 |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Interest expense (including fees) | $ | 0.3 | $ | 0.1 | $ | 0.9 | $ | 0.5 |
As of September 30, 2012 | As of December 31, 2011 | ||||
Weighted average borrowing rate | 1.47 | % | 1.53 | % |
Consolidated Indebtedness to Adjusted EBITDA Ratio no greater than | 3.5 : 1.0 |
Cash Flow to Net Interest Expense Ratio no less than | 3.0 : 1.0 |
• | We fail to pay any principal or interest when due on any other indebtedness or receivables securitization of at least $75.0 million; or |
• | We are in default in the performance of, or compliance with any term of any other indebtedness or receivables securitization in an aggregate principal amount of at least $75.0 million or any other condition exists which would give the holders the right to declare such indebtedness due and payable prior to its stated maturity. |
For the Three Months Ended September 30, | |||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Pension Benefits | Other Benefits | ||||||||||||||
Service cost | $ | 1.4 | $ | 1.3 | $ | — | $ | 0.2 | |||||||
Interest cost | 4.3 | 4.5 | 0.1 | 0.2 | |||||||||||
Expected return on plan assets | (4.7 | ) | (4.7 | ) | — | — | |||||||||
Amortization of prior service cost | 0.1 | 0.1 | (0.8 | ) | (0.4 | ) | |||||||||
Amortization of net loss | 2.1 | 1.7 | 0.4 | 0.3 | |||||||||||
Settlements or curtailments | 1.0 | 0.1 | — | — | |||||||||||
Total net periodic benefit cost | $ | 4.2 | $ | 3.0 | $ | (0.3 | ) | $ | 0.3 |
For the Nine Months Ended September 30, | |||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Pension Benefits | Other Benefits | ||||||||||||||
Service cost | $ | 4.1 | $ | 4.0 | $ | 0.2 | $ | 0.6 | |||||||
Interest cost | 12.9 | 13.5 | 0.4 | 0.7 | |||||||||||
Expected return on plan assets | (14.1 | ) | (14.2 | ) | — | — | |||||||||
Amortization of prior service cost | 0.3 | 0.3 | (2.0 | ) | (1.4 | ) | |||||||||
Amortization of net loss | 6.5 | 5.2 | 1.0 | 0.9 | |||||||||||
Settlements or curtailments (1) | 7.3 | 1.7 | — | — | |||||||||||
Total net periodic benefit cost | $ | 17.0 | $ | 10.5 | $ | (0.4 | ) | $ | 0.8 |
(1) | Settlements and curtailments in the nine months ended September 30, 2012 include a $6.3 million settlement charge related to actuarial losses recognized upon transition of a pension obligation to the acquirer of the Lennox Hearth Products business (“Hearth business”). |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Net stock-based compensation expense | $ | 2.1 | $ | 3.5 | $ | 10.4 | $ | 12.6 |
Charges Incurred in 2012 | Charges Incurred to Date | Total Charges Expected to be Incurred | |||||||||
Severance and related expense | $ | 0.2 | $ | 23.3 | $ | 26.4 | |||||
Asset write-offs and accelerated depreciation | — | 10.1 | 10.1 | ||||||||
Equipment moves | 0.1 | 1.5 | 1.7 | ||||||||
Lease termination | 2.4 | 7.2 | 7.2 | ||||||||
Other | 0.4 | 12.2 | 13.1 | ||||||||
Total | $ | 3.1 | $ | 54.3 | $ | 58.5 |
Charges Incurred in 2012 | Charges Incurred to Date | Total Charges Expected to be Incurred | |||||||||
Residential Heating & Cooling | $ | 2.7 | $ | 17.9 | $ | 21.6 | |||||
Commercial Heating & Cooling | — | 7.8 | 7.8 | ||||||||
Refrigeration | 0.5 | 22.9 | 23.4 | ||||||||
Corporate & Other | (0.1 | ) | 5.7 | 5.7 | |||||||
Total | $ | 3.1 | $ | 54.3 | $ | 58.5 |
Description of Reserves | Balance as of December 31, 2011 | Charged to Earnings | Cash Utilization | Non-Cash Utilization and Other | Balance as of September 30, 2012 | ||||||||||||||
Severance and related expense | $ | 2.3 | $ | 0.2 | $ | (1.0 | ) | $ | — | $ | 1.5 | ||||||||
Asset write-offs and accelerated depreciation | — | — | — | — | — | ||||||||||||||
Equipment moves | — | 0.1 | — | — | 0.1 | ||||||||||||||
Lease termination | — | 2.4 | (1.9 | ) | — | 0.5 | |||||||||||||
Other | 0.1 | 0.4 | (0.2 | ) | — | 0.3 | |||||||||||||
Total restructuring reserves | $ | 2.4 | $ | 3.1 | $ | (3.1 | ) | $ | — | $ | 2.4 |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Net trade sales(1) | $ | 98.3 | $ | 120.4 | $ | 292.6 | $ | 346.6 | |||||||
Pre-tax operating (loss) income(1)(2) | (26.8 | ) | 0.1 | (42.7 | ) | (8.3 | ) |
(1) | Excludes eliminations of intercompany sales and any associated profit. |
(2) | Pre-tax operating loss for the three and nine months ended September, 30 2012 includes a $20.5 million goodwill impairment loss (see Note 3). |
As of September 30, 2012 | As of December 31, 2011 | ||||||
Assets of discontinued operations: | |||||||
Accounts receivable, net | $ | 14.5 | $ | 14.4 | |||
Inventories, net | 6.3 | 6.3 | |||||
Deferred income taxes | 9.7 | 10.1 | |||||
Property, Plant and Equipment | 3.7 | 3.8 | |||||
Goodwill and intangible assets, net | 67.1 | 83.2 | |||||
Other assets | 7.4 | 7.7 | |||||
Liabilities of discontinued operations: | |||||||
Accounts payable | 17.4 | 16.0 | |||||
Accrued expenses | 41.0 | 40.1 | |||||
Deferred income taxes | 3.7 | 3.7 | |||||
Other Liabilities | 0.1 | 0.2 |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Net trade sales | $ | — | $ | 19.8 | $ | 23.5 | $ | 61.1 | |||||||
Pre-tax operating loss (3) | (1.2 | ) | (2.3 | ) | (13.1 | ) | (9.7 | ) | |||||||
Gain (loss) on sale | 2.9 | — | (0.9 | ) | — |
(3) | Pre-tax operating loss includes a $6.3 million first quarter 2012 pre-tax charge for the write-down of net assets to their estimated fair value and a $6.3 million settlement charge in the second quarter of 2012 related to actuarial losses recognized upon transition of a pension obligation to the acquirer of the Hearth business (See Note 8). Offsetting these charges was a $3.5 million gain in the second quarter of 2012 related to realized foreign currency translation adjustments. |
As of September 30, 2012 | As of December 31, 2011 | ||||||
Assets of discontinued operations: | |||||||
Accounts receivable, net | $ | — | $ | 7.3 | |||
Inventories, net | — | 12.4 | |||||
Deferred income taxes | — | 9.1 | |||||
Property, Plant and Equipment | — | 5.4 | |||||
Other assets | — | 0.8 | |||||
Liabilities of discontinued operations: | |||||||
Accounts payable | — | 6.0 | |||||
Accrued expenses | — | 5.2 | |||||
Other Liabilities | — | 0.4 |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Net income | $ | 29.4 | $ | 33.8 | $ | 68.0 | $ | 71.6 | |||||||
Loss from discontinued operations | (20.3 | ) | (1.1 | ) | (40.5 | ) | (11.1 | ) | |||||||
Income from continuing operations | $ | 49.7 | $ | 34.9 | $ | 108.5 | $ | 82.7 | |||||||
Weighted-average shares outstanding – basic | 50.6 | 52.2 | 50.8 | 53.0 | |||||||||||
Effect of diluted securities attributable to stock-based payments | 0.7 | 0.6 | 0.7 | 0.9 | |||||||||||
Weighted-average shares outstanding – diluted | 51.3 | 52.8 | 51.5 | 53.9 | |||||||||||
Earnings per share from continuing operations: | |||||||||||||||
Basic | $ | 0.98 | $ | 0.67 | $ | 2.13 | $ | 1.56 | |||||||
Diluted | $ | 0.97 | $ | 0.66 | $ | 2.11 | $ | 1.53 |
For the Nine Months Ended September 30, | ||||||
2012 | 2011 | |||||
Weighted-average number of shares | 386,759 | 2,275,894 | ||||
Price ranges per share | $ | 46.78 | $28.24 - $46.78 |
Segment | Product or Services | Markets Served | Geographic Areas | |||
Residential Heating & Cooling | Heating Air Conditioning | Residential Replacement Residential New Construction | United States Canada | |||
Commercial Heating & Cooling | Rooftop Products Chillers Air Handlers Equipment Sales Installation Maintenance Repair | Light Commercial | United States Canada Europe | |||
Refrigeration | Unit Coolers Condensing Units Other Commercial Refrigeration Products Display Cases and Systems | Light Commercial Food Preservation and Non-Food/Industrial | United States Canada Europe Asia Pacific South America |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Net Sales | |||||||||||||||
Residential Heating & Cooling | $ | 386.3 | $ | 353.8 | $ | 1,070.7 | $ | 979.7 | |||||||
Commercial Heating & Cooling | 219.7 | 223.6 | 597.9 | 596.4 | |||||||||||
Refrigeration | 203.7 | 223.8 | 595.9 | 616.3 | |||||||||||
$ | 809.7 | $ | 801.2 | $ | 2,264.5 | $ | 2,192.4 | ||||||||
Segment Profit (Loss) | |||||||||||||||
Residential Heating & Cooling | $ | 37.7 | $ | 31.3 | $ | 90.7 | $ | 70.9 | |||||||
Commercial Heating & Cooling | 32.5 | 31.1 | 74.1 | 67.2 | |||||||||||
Refrigeration | 25.1 | 20.5 | 60.6 | 55.5 | |||||||||||
Corporate and other | (14.3 | ) | (15.1 | ) | (43.7 | ) | (41.5 | ) | |||||||
Subtotal that includes segment profit and eliminations | 81.0 | 67.8 | 181.7 | 152.1 | |||||||||||
Reconciliation to income from continuing operations before income taxes: | |||||||||||||||
Special product quality adjustment | 0.9 | — | 1.0 | (2.4 | ) | ||||||||||
Items in (Gains) losses and other expenses, net that are excluded from segment profit (1) | (1.2 | ) | 3.2 | (2.0 | ) | 5.5 | |||||||||
Restructuring charges | 0.4 | 8.0 | 3.1 | 11.3 | |||||||||||
Interest expense, net | 4.4 | 4.1 | 13.4 | 12.5 | |||||||||||
Other expense, net | — | — | 0.1 | 0.1 | |||||||||||
Income from continuing operations before income taxes | $ | 76.5 | $ | 52.5 | $ | 166.1 | $ | 125.1 |
(1) | Items in (Gains) losses and other expenses, net that are excluded from segment profit are net change in unrealized gains and/or losses on open futures contracts, discount fees on accounts sold, and realized gains and/or losses on marketable securities. |
Quoted Prices in Active Markets for Identical Assets (Level 1) | |||||||
As of September 30, 2012 | As of December 31, 2011 | ||||||
Assets: | |||||||
Investment in marketable equity securities (1) | $ | 10.1 | $ | 8.4 |
(1) | Investment in marketable equity securities is recorded in Other Assets, net in the accompanying Consolidated Balance Sheets. |
As of September 30, 2012 | As of December 31, 2011 | ||||||
Senior unsecured notes | $ | 219.4 | $ | 207.0 |
Parent | Guarantor Subsidiaries | Non- Guarantor Subsidiaries | Eliminations | Consolidated | |||||||||||||||
ASSETS | |||||||||||||||||||
CURRENT ASSETS: | |||||||||||||||||||
Cash and cash equivalents | $ | 1.0 | $ | 21.6 | $ | 26.2 | $ | — | $ | 48.8 | |||||||||
Accounts and notes receivable, net | (1,049.7 | ) | 998.2 | 465.9 | 35.9 | 450.3 | |||||||||||||
Inventories, net | — | 278.6 | 126.2 | (6.4 | ) | 398.4 | |||||||||||||
Deferred income taxes, net | 6.5 | 21.9 | 5.7 | (1.3 | ) | 32.8 | |||||||||||||
Other assets | (4.5 | ) | 26.3 | 114.0 | (63.2 | ) | 72.6 | ||||||||||||
Assets of discontinued operations | — | (10.7 | ) | 119.4 | — | 108.7 | |||||||||||||
Total current assets | (1,046.7 | ) | 1,335.9 | 857.4 | (35.0 | ) | 1,111.6 | ||||||||||||
PROPERTY, PLANT AND EQUIPMENT, net | — | 235.2 | 54.2 | — | 289.4 | ||||||||||||||
GOODWILL | — | 131.8 | 91.9 | — | 223.7 | ||||||||||||||
DEFERRED INCOME TAXES | (1.7 | ) | 81.9 | 16.8 | (9.7 | ) | 87.3 | ||||||||||||
OTHER ASSETS, net(1) | 2,151.5 | 547.8 | 24.2 | (2,642.0 | ) | 81.5 | |||||||||||||
TOTAL ASSETS | $ | 1,103.1 | $ | 2,332.6 | $ | 1,044.5 | $ | (2,686.7 | ) | $ | 1,793.5 | ||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||||||||||
CURRENT LIABILITIES: | |||||||||||||||||||
Short-term debt | $ | 97.3 | $ | — | $ | (50.2 | ) | $ | (16.0 | ) | $ | 31.1 | |||||||
Current maturities of long-term debt | — | 0.2 | 0.1 | — | 0.3 | ||||||||||||||
Accounts payable | 10.1 | 133.5 | 87.3 | 46.7 | 277.6 | ||||||||||||||
Accrued expenses | 4.8 | 191.8 | 62.2 | (0.1 | ) | 258.7 | |||||||||||||
Income taxes payable | (20.9 | ) | 36.1 | 41.8 | (48.5 | ) | 8.5 | ||||||||||||
Liabilities of discontinued operations | — | 49.7 | 12.5 | — | 62.2 | ||||||||||||||
Total current liabilities | 91.3 | 411.3 | 153.7 | (17.9 | ) | 638.4 | |||||||||||||
LONG-TERM DEBT | 433.0 | 16.2 | 100.2 | (99.8 | ) | 449.6 | |||||||||||||
POSTRETIREMENT BENEFITS, OTHER THAN PENSIONS | — | 17.1 | — | — | 17.1 | ||||||||||||||
PENSIONS | — | 104.4 | 11.8 | — | 116.2 | ||||||||||||||
OTHER LIABILITIES | 0.7 | 58.9 | 14.2 | (11.0 | ) | 62.8 | |||||||||||||
Total liabilities | 525.0 | 607.9 | 279.9 | (128.7 | ) | 1,284.1 | |||||||||||||
COMMITMENTS AND CONTINGENCIES | |||||||||||||||||||
TOTAL STOCKHOLDERS’ EQUITY | 578.1 | 1,724.7 | 764.6 | (2,558.0 | ) | 509.4 | |||||||||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 1,103.1 | $ | 2,332.6 | $ | 1,044.5 | $ | (2,686.7 | ) | $ | 1,793.5 |
(1) | OTHER ASSETS, net consists primarily of Investments in Subsidiaries which eliminate upon consolidation. |
Parent | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Consolidated | |||||||||||||||
NET SALES | $ | — | $ | 654.5 | $ | 214.3 | $ | (59.1 | ) | $ | 809.7 | ||||||||
COST OF GOODS SOLD | — | 499.7 | 163.9 | (58.8 | ) | 604.8 | |||||||||||||
Gross profit | — | 154.8 | 50.4 | (0.3 | ) | 204.9 | |||||||||||||
OPERATING EXPENSES: | |||||||||||||||||||
Selling, general and administrative expenses | — | 99.2 | 26.8 | (0.1 | ) | 125.9 | |||||||||||||
(Gains) losses and other expenses, net | 0.1 | (1.0 | ) | 1.2 | — | 0.3 | |||||||||||||
Restructuring charges | — | 0.1 | 0.3 | — | 0.4 | ||||||||||||||
(Income) loss from equity method investments | (38.4 | ) | (6.5 | ) | (1.9 | ) | 44.2 | (2.6 | ) | ||||||||||
Operational income (loss) from continuing operations | 38.3 | 63.0 | 24.0 | (44.4 | ) | 80.9 | |||||||||||||
INTEREST EXPENSE (INCOME), net | 4.3 | (0.6 | ) | 0.7 | — | 4.4 | |||||||||||||
OTHER EXPENSE, net | — | — | — | — | — | ||||||||||||||
Income (loss) from continuing operations before income taxes | 34.0 | 63.6 | 23.3 | (44.4 | ) | 76.5 | |||||||||||||
(BENEFIT FROM) PROVISION FOR INCOME TAXES | (1.6 | ) | 20.1 | 10.0 | (1.7 | ) | 26.8 | ||||||||||||
Income (loss) from continuing operations | 35.6 | 43.5 | 13.3 | (42.7 | ) | 49.7 | |||||||||||||
Loss from discontinued operations | — | (12.6 | ) | (7.7 | ) | — | (20.3 | ) | |||||||||||
Net income (loss) | $ | 35.6 | $ | 30.9 | $ | 5.6 | $ | (42.7 | ) | $ | 29.4 | ||||||||
OTHER COMPREHENSIVE INCOME | $ | 5.6 | $ | 4.6 | $ | 17.4 | $ | 1.9 | $ | 29.5 |
Parent | Guarantor Subsidiaries | Non- Guarantor Subsidiaries | Eliminations | Consolidated | |||||||||||||||
NET SALES | $ | — | $ | 1,814.5 | $ | 610.2 | $ | (160.2 | ) | $ | 2,264.5 | ||||||||
COST OF GOODS SOLD | 0.1 | 1,401.7 | 468.4 | (159.6 | ) | 1,710.6 | |||||||||||||
Gross profit | (0.1 | ) | 412.8 | 141.8 | (0.6 | ) | 553.9 | ||||||||||||
OPERATING EXPENSES: | |||||||||||||||||||
Selling, general and administrative expenses | — | 286.5 | 93.3 | — | 379.8 | ||||||||||||||
(Gains) losses and other expenses, net | (2.1 | ) | (0.4 | ) | 2.7 | — | 0.2 | ||||||||||||
Restructuring charges | — | 2.6 | 0.5 | — | 3.1 | ||||||||||||||
(Income) loss from equity method investments | (81.9 | ) | (8.1 | ) | (6.9 | ) | 88.1 | (8.8 | ) | ||||||||||
Operational income (loss) from continuing operations | 83.9 | 132.2 | 52.2 | (88.7 | ) | 179.6 | |||||||||||||
INTEREST EXPENSE (INCOME), net | 13.1 | (1.8 | ) | 2.1 | — | 13.4 | |||||||||||||
OTHER EXPENSE, net | — | — | 0.1 | — | 0.1 | ||||||||||||||
Income (loss) from continuing operations before income taxes | 70.8 | 134.0 | 50.0 | (88.7 | ) | 166.1 | |||||||||||||
(BENEFIT FROM) PROVISION FOR INCOME TAXES | (4.0 | ) | 45.1 | 16.7 | (0.2 | ) | 57.6 | ||||||||||||
Income (loss) from continuing operations | 74.8 | 88.9 | 33.3 | (88.5 | ) | 108.5 | |||||||||||||
Loss from discontinued operations | — | (27.9 | ) | (12.6 | ) | — | (40.5 | ) | |||||||||||
Net income (loss) | $ | 74.8 | $ | 61.0 | $ | 20.7 | $ | (88.5 | ) | $ | 68.0 | ||||||||
OTHER COMPREHENSIVE INCOME | $ | 7.9 | $ | 4.4 | $ | 8.4 | $ | 6.2 | $ | 26.9 |
Parent | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Consolidated | |||||||||||||||
ASSETS | |||||||||||||||||||
CURRENT ASSETS: | |||||||||||||||||||
Cash and cash equivalents | $ | 1.0 | $ | 9.7 | $ | 34.4 | $ | (0.1 | ) | $ | 45.0 | ||||||||
Accounts and notes receivable, net | (991.9 | ) | 944.5 | 413.8 | 20.6 | 387.0 | |||||||||||||
Inventories, net | — | 217.1 | 105.5 | (4.7 | ) | 317.9 | |||||||||||||
Deferred income taxes, net | 4.7 | 22.0 | 8.4 | (1.3 | ) | 33.8 | |||||||||||||
Other assets | 1.6 | 16.5 | 106.9 | (56.5 | ) | 68.5 | |||||||||||||
Assets of discontinued operations | — | 55.7 | 104.8 | — | 160.5 | ||||||||||||||
Total current assets | (984.6 | ) | 1,265.5 | 773.8 | (42.0 | ) | 1,012.7 | ||||||||||||
PROPERTY, PLANT AND EQUIPMENT, net | — | 248.2 | 52.5 | — | 300.7 | ||||||||||||||
GOODWILL | — | 104.1 | 119.1 | — | 223.2 | ||||||||||||||
DEFERRED INCOME TAXES | 0.2 | 82.0 | 18.2 | (9.7 | ) | 90.7 | |||||||||||||
OTHER ASSETS, net(1) | 2,174.1 | 531.2 | 22.1 | (2,649.0 | ) | 78.4 | |||||||||||||
TOTAL ASSETS | $ | 1,189.7 | $ | 2,231.0 | $ | 985.7 | $ | (2,700.7 | ) | $ | 1,705.7 | ||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||||||||||
CURRENT LIABILITIES: | |||||||||||||||||||
Short-term debt | $ | 112.1 | $ | — | $ | (67.3 | ) | $ | (40.1 | ) | $ | 4.7 | |||||||
Current maturities of long-term debt | — | 0.6 | 0.2 | — | 0.8 | ||||||||||||||
Accounts payable | 9.2 | 120.9 | 93.4 | 31.4 | 254.9 | ||||||||||||||
Accrued expenses | 15.2 | 146.7 | 77.5 | — | 239.4 | ||||||||||||||
Income taxes payable | (29.9 | ) | 28.0 | 24.7 | (17.1 | ) | 5.7 | ||||||||||||
Liabilities of discontinued operations | — | 54.9 | 16.7 | — | 71.6 | ||||||||||||||
Total current liabilities | 106.6 | 351.1 | 145.2 | (25.8 | ) | 577.1 | |||||||||||||
LONG-TERM DEBT | 443.0 | 16.2 | 97.3 | (96.9 | ) | 459.6 | |||||||||||||
POSTRETIREMENT BENEFITS, OTHER THAN PENSIONS | — | 18.6 | — | — | 18.6 | ||||||||||||||
PENSIONS | — | 111.9 | 12.8 | — | 124.7 | ||||||||||||||
OTHER LIABILITIES | 0.8 | 54.8 | 13.3 | (11.0 | ) | 57.9 | |||||||||||||
Total liabilities | 550.4 | 552.6 | 268.6 | (133.7 | ) | 1,237.9 | |||||||||||||
COMMITMENTS AND CONTINGENCIES | |||||||||||||||||||
TOTAL STOCKHOLDERS’ EQUITY | 639.3 | 1,678.4 | 717.1 | (2,567.0 | ) | 467.8 | |||||||||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 1,189.7 | $ | 2,231.0 | $ | 985.7 | $ | (2,700.7 | ) | $ | 1,705.7 |
(1) | OTHER ASSETS, net consists primarily of Investments in Subsidiaries which eliminate upon consolidation. |
Parent | Guarantor Subsidiaries | Non- Guarantor Subsidiaries | Eliminations | Consolidated | |||||||||||||||
NET SALES | $ | — | $ | 629.0 | $ | 226.9 | $ | (54.7 | ) | $ | 801.2 | ||||||||
COST OF GOODS SOLD | — | 496.4 | 173.6 | (55.4 | ) | 614.6 | |||||||||||||
Gross profit | — | 132.6 | 53.3 | 0.7 | 186.6 | ||||||||||||||
OPERATING EXPENSES: | |||||||||||||||||||
Selling, general and administrative expenses | — | 87.9 | 34.5 | — | 122.4 | ||||||||||||||
Losses (gains) and other expenses, net | 2.3 | 0.8 | (0.5 | ) | — | 2.6 | |||||||||||||
Restructuring charges | — | 7.1 | 0.9 | — | 8.0 | ||||||||||||||
(Income) loss from equity method investments | (47.6 | ) | (11.1 | ) | (2.1 | ) | 57.8 | (3.0 | ) | ||||||||||
Operational income (loss) from continuing operations | 45.3 | 47.9 | 20.5 | (57.1 | ) | 56.6 | |||||||||||||
INTEREST EXPENSE (INCOME), net | 4.0 | (0.9 | ) | 1.0 | — | 4.1 | |||||||||||||
OTHER EXPENSE, net | — | — | — | — | — | ||||||||||||||
Income (loss) from continuing operations before income taxes | 41.3 | 48.8 | 19.5 | (57.1 | ) | 52.5 | |||||||||||||
(BENEFIT FROM) PROVISION FOR INCOME TAXES | (2.3 | ) | 13.6 | 5.7 | 0.6 | 17.6 | |||||||||||||
Income (loss) from continuing operations | 43.6 | 35.2 | 13.8 | (57.7 | ) | 34.9 | |||||||||||||
(Loss) income from discontinued operations | — | (2.4 | ) | 1.3 | — | (1.1 | ) | ||||||||||||
Net income (loss) | $ | 43.6 | $ | 32.8 | $ | 15.1 | $ | (57.7 | ) | $ | 33.8 | ||||||||
OTHER COMPREHENSIVE LOSS | $ | (14.5 | ) | $ | (12.5 | ) | $ | (46.4 | ) | $ | (2.7 | ) | $ | (76.1 | ) |
Parent | Guarantor Subsidiaries | Non- Guarantor Subsidiaries | Eliminations | Consolidated | |||||||||||||||
NET SALES | $ | — | $ | 1,710.3 | $ | 633.3 | $ | (151.2 | ) | $ | 2,192.4 | ||||||||
COST OF GOODS SOLD | 0.1 | 1,341.2 | 487.1 | (152.5 | ) | 1,675.9 | |||||||||||||
Gross profit | (0.1 | ) | 369.1 | 146.2 | 1.3 | 516.5 | |||||||||||||
OPERATING EXPENSES: | |||||||||||||||||||
Selling, general and administrative expenses | — | 264.1 | 108.8 | — | 372.9 | ||||||||||||||
Losses (gains) and other expenses, net | 4.5 | (0.4 | ) | (0.5 | ) | — | 3.6 | ||||||||||||
Restructuring charges | — | 10.0 | 1.3 | — | 11.3 | ||||||||||||||
(Income) loss from equity method investments | (96.5 | ) | (16.8 | ) | (7.0 | ) | 111.3 | (9.0 | ) | ||||||||||
Operational income (loss) from continuing operations | 91.9 | 112.2 | 43.6 | (110.0 | ) | 137.7 | |||||||||||||
INTEREST EXPENSE (INCOME), net | 12.0 | (2.7 | ) | 3.2 | — | 12.5 | |||||||||||||
OTHER EXPENSE, net | — | — | 0.1 | — | 0.1 | ||||||||||||||
Income (loss) from continuing operations before income taxes | 79.9 | 114.9 | 40.3 | (110.0 | ) | 125.1 | |||||||||||||
(BENEFIT FROM) PROVISION FOR INCOME TAXES | (5.8 | ) | 35.9 | 11.2 | 1.1 | 42.4 | |||||||||||||
Income (loss) from continuing operations | 85.7 | 79.0 | 29.1 | (111.1 | ) | 82.7 | |||||||||||||
(Loss) income from discontinued operations | — | (11.9 | ) | 0.8 | — | (11.1 | ) | ||||||||||||
Net income (loss) | $ | 85.7 | $ | 67.1 | $ | 29.9 | $ | (111.1 | ) | $ | 71.6 | ||||||||
OTHER COMPREHENSIVE LOSS | $ | (21.2 | ) | $ | (6.8 | ) | $ | (29.6 | ) | $ | (1.4 | ) | $ | (59.0 | ) |
Parent | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Consolidated | |||||||||||||||
Net cash provided by (used in) operating activities | $ | 21.4 | $ | 83.4 | $ | (40.4 | ) | $ | — | $ | 64.4 | ||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||||||||||
Proceeds from the disposal of property, plant and equipment | — | 0.1 | — | — | 0.1 | ||||||||||||||
Purchases of property, plant and equipment | — | (21.5 | ) | (6.5 | ) | — | (28.0 | ) | |||||||||||
Net proceeds from sale of business | — | 10.1 | — | — | 10.1 | ||||||||||||||
Net cash (used in) provided by discontinued operations | — | (0.4 | ) | 0.1 | — | (0.3 | ) | ||||||||||||
Net cash used in investing activities | — | (11.7 | ) | (6.4 | ) | — | (18.1 | ) | |||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||||||||||
Short-term borrowings, net | — | — | 1.3 | — | 1.3 | ||||||||||||||
Asset securitization borrowings | — | — | 480.0 | — | 480.0 | ||||||||||||||
Asset securitization payments | — | — | (455.0 | ) | — | (455.0 | ) | ||||||||||||
Long-term payments | — | (0.6 | ) | (0.3 | ) | — | (0.9 | ) | |||||||||||
Borrowings from revolving credit facility | 696.0 | — | — | — | 696.0 | ||||||||||||||
Payments on revolving credit facility | (706.0 | ) | — | — | — | (706.0 | ) | ||||||||||||
Proceeds from stock option exercises | 0.3 | — | — | — | 0.3 | ||||||||||||||
Repurchases of common stock | (38.4 | ) | — | — | — | (38.4 | ) | ||||||||||||
Excess tax benefits related to share-based payments | 1.7 | — | — | — | 1.7 | ||||||||||||||
Intercompany debt | (5.3 | ) | (3.9 | ) | 9.2 | — | — | ||||||||||||
Intercompany financing activity | 57.8 | (55.3 | ) | (2.5 | ) | — | — | ||||||||||||
Cash dividends paid | (27.5 | ) | — | — | — | (27.5 | ) | ||||||||||||
Net cash (used in) provided by financing activities | (21.4 | ) | (59.8 | ) | 32.7 | — | (48.5 | ) | |||||||||||
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | — | 11.9 | (14.1 | ) | — | (2.2 | ) | ||||||||||||
EFFECT OF EXCHANGE RATES ON CASH AND CASH EQUIVALENTS | — | — | 6.0 | — | 6.0 | ||||||||||||||
CASH AND CASH EQUIVALENTS, beginning of period | 1.0 | 9.7 | 34.3 | — | 45.0 | ||||||||||||||
CASH AND CASH EQUIVALENTS, end of period | $ | 1.0 | $ | 21.6 | $ | 26.2 | $ | — | $ | 48.8 |
Parent | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Consolidated | |||||||||||||||
Net cash provided by (used in) operating activities | $ | 31.8 | $ | (64.2 | ) | $ | 30.2 | $ | — | $ | (2.2 | ) | |||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||||||||||
Proceeds from the disposal of property, plant and equipment | — | 0.1 | 0.1 | — | 0.2 | ||||||||||||||
Purchases of property, plant and equipment | — | (22.4 | ) | (3.4 | ) | — | (25.8 | ) | |||||||||||
Net proceeds from sale of business | — | — | 0.6 | — | 0.6 | ||||||||||||||
Acquisition of business | — | (147.7 | ) | — | — | (147.7 | ) | ||||||||||||
Change in restricted cash | — | — | 12.2 | — | 12.2 | ||||||||||||||
Net cash used in discontinued operations | — | (1.1 | ) | (0.1 | ) | — | (1.2 | ) | |||||||||||
Net cash (used in) provided by investing activities | — | (171.1 | ) | 9.4 | — | (161.7 | ) | ||||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||||||||||
Short-term borrowings, net | — | — | 2.5 | — | 2.5 | ||||||||||||||
Asset securitization borrowings | — | — | 220.0 | — | 220.0 | ||||||||||||||
Asset securitization payments | — | — | (220.0 | ) | — | (220.0 | ) | ||||||||||||
Long-term payments | — | (0.7 | ) | — | — | (0.7 | ) | ||||||||||||
Borrowings from revolving credit facility | 1,090.0 | — | — | — | 1,090.0 | ||||||||||||||
Payments on revolving credit facility | (911.5 | ) | — | — | — | (911.5 | ) | ||||||||||||
Proceeds from stock option exercises | 1.5 | — | — | — | 1.5 | ||||||||||||||
Repurchases of common stock | (90.9 | ) | — | — | — | (90.9 | ) | ||||||||||||
Excess tax benefits related to share-based payments | 1.5 | — | — | — | 1.5 | ||||||||||||||
Intercompany debt | 76.7 | (2.3 | ) | (74.4 | ) | — | — | ||||||||||||
Intercompany financing activity | (252.7 | ) | 242.7 | 10.0 | — | — | |||||||||||||
Cash dividends paid | (27.2 | ) | — | — | — | (27.2 | ) | ||||||||||||
Net cash (used in) provided by financing activities | (112.6 | ) | 239.7 | (61.9 | ) | — | 65.2 | ||||||||||||
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | (80.8 | ) | 4.4 | (22.3 | ) | — | (98.7 | ) | |||||||||||
EFFECT OF EXCHANGE RATES ON CASH AND CASH EQUIVALENTS | — | — | (3.4 | ) | — | (3.4 | ) | ||||||||||||
CASH AND CASH EQUIVALENTS, beginning of period | 81.1 | 14.7 | 64.2 | — | 160.0 | ||||||||||||||
CASH AND CASH EQUIVALENTS, end of period | $ | 0.3 | $ | 19.1 | $ | 38.5 | $ | — | $ | 57.9 |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations. |
• | Net sales for the third quarter of 2012 increased to $809.7 million compared to $801.2 million in 2011, or a 1% increase. Net sales increased 3% excluding a 2% unfavorable foreign currency exchange rate impact. |
• | Operational income from continuing operations ("operational income") for the third quarter of 2012 increased to $80.9 million as compared to $56.6 million in 2011. The increase in operational income was primarily due to higher volume and higher margins from material cost savings and a reduction in restructuring costs as cost saving initiatives wind down. |
• | Net income for the third quarter of 2012 was $29.4 million compared to $33.8 million in 2011. Diluted earnings per share from continuing operations were $0.97 in the third quarter of 2012 compared to diluted earnings per share from continuing operations of $0.66 in 2011. |
• | Cash provided by operating activities was $64 million in the first nine months of 2012 compared to net cash used in operations of $2 million in the first nine months of 2011. The increase in cash provided by operating activities was due primarily to higher income from continuing operations and an increase in accrued expenses in 2012. The increase in accrued expenses was due to an increase in incentive compensation from our improved operating results. These increases were partially offset by unfavorable working capital requirements in the first nine months of 2012 compared to the same period of 2011. |
For the Three Months Ended September 30, | ||||||||||||||||
Dollars | Percent Change Fav/(Unfav) | Percent Sales | ||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
Net sales | $ | 809.7 | $ | 801.2 | 1.1 | % | 100.0 | % | 100.0 | % | ||||||
Cost of goods sold | 604.8 | 614.6 | 1.6 | 74.7 | 76.7 | |||||||||||
Gross profit | 204.9 | 186.6 | 9.8 | 25.3 | 23.3 | |||||||||||
Selling, general and administrative expenses | 125.9 | 122.4 | (2.9 | ) | 15.5 | 15.3 | ||||||||||
Losses and other expenses, net | 0.3 | 2.6 | 88.5 | — | 0.3 | |||||||||||
Restructuring charges | 0.4 | 8.0 | 95.0 | — | 1.0 | |||||||||||
Income from equity method investments | (2.6 | ) | (3.0 | ) | (13.3 | ) | (0.3 | ) | (0.4 | ) | ||||||
Operational income | $ | 80.9 | $ | 56.6 | 42.9 | % | 10.0 | % | 7.1 | % |
For the Three Months Ended September 30, | |||||||
2012 | 2011 | ||||||
Realized losses (gains) on settled futures contracts | $ | 0.5 | $ | (0.1 | ) | ||
Unrealized losses (gains) on unsettled futures contracts not designated as cash flow hedges | (1.4 | ) | 3.5 | ||||
Foreign currency exchange losses (gains) | 1.0 | (0.6 | ) | ||||
Other items, net | 0.2 | (0.2 | ) | ||||
Losses and other expenses, net | $ | 0.3 | $ | 2.6 |
For the Three Months Ended September 30, | ||||||||||||||
2012 | 2011 | Difference | % Change | |||||||||||
Net sales | $ | 386.3 | $ | 353.8 | $ | 32.5 | 9.2 | % | ||||||
Profit | 37.7 | 31.3 | 6.4 | 20.4 | % | |||||||||
% of net sales | 9.8 | % | 8.8 | % |
For the Three Months Ended September 30, | ||||||||||||||
2012 | 2011 | Difference | % Change | |||||||||||
Net sales | $ | 219.7 | $ | 223.6 | $ | (3.9 | ) | (1.7 | )% | |||||
Profit | 32.5 | 31.1 | 1.4 | 4.5 | % | |||||||||
% of net sales | 14.8 | % | 13.9 | % |
For the Three Months Ended September 30, | ||||||||||||||
2012 | 2011 | Difference | % Change | |||||||||||
Net sales | $ | 203.7 | $ | 223.8 | $ | (20.1 | ) | (9.0 | )% | |||||
Profit | 25.1 | 20.5 | 4.6 | 22.4 | % | |||||||||
% of net sales | 12.3 | % | 9.2 | % |
For the Nine Months Ended September 30, | ||||||||||||||||
Dollars | Percent Change Fav/(Unfav) | Percent Sales | ||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
Net sales | $ | 2,264.5 | $ | 2,192.4 | 3.3 | % | 100.0 | % | 100.0 | % | ||||||
Cost of goods sold | 1,710.6 | 1,675.9 | (2.1 | ) | 75.5 | 76.4 | ||||||||||
Gross profit | 553.9 | 516.5 | 7.2 | 24.5 | 23.6 | |||||||||||
Selling, general and administrative expenses | 379.8 | 372.9 | (1.9 | ) | 16.8 | 17.0 | ||||||||||
Losses and other expenses, net | 0.2 | 3.6 | 94.4 | — | 0.2 | |||||||||||
Restructuring charges | 3.1 | 11.3 | 72.6 | 0.1 | 0.5 | |||||||||||
Income from equity method investments | (8.8 | ) | (9.0 | ) | (2.2 | ) | (0.4 | ) | (0.4 | ) | ||||||
Operational income | $ | 179.6 | $ | 137.7 | 30.4 | % | 7.9 | % | 6.3 | % |
For the Nine Months Ended September 30, | |||||||
2012 | 2011 | ||||||
Realized losses (gains) on settled futures contracts | $ | 1.4 | $ | (1.0 | ) | ||
Unrealized losses (gains) on unsettled futures contracts not designated as cash flow hedges | (2.5 | ) | 4.9 | ||||
Foreign currency exchange losses (gains) | 0.7 | — | |||||
Other items, net | 0.6 | (0.3 | ) | ||||
Losses and other expenses, net | $ | 0.2 | $ | 3.6 |
For the Nine Months Ended September 30, | ||||||||||||||
2012 | 2011 | Difference | % Change | |||||||||||
Net sales | $ | 1,070.7 | $ | 979.7 | $ | 91.0 | 9.3 | % | ||||||
Profit | 90.7 | 70.9 | 19.8 | 27.9 | % | |||||||||
% of net sales | 8.5 | % | 7.2 | % |
For the Nine Months Ended September 30, | ||||||||||||||
2012 | 2011 | Difference | % Change | |||||||||||
Net sales | $ | 597.9 | $ | 596.4 | $ | 1.5 | 0.3 | % | ||||||
Profit | 74.1 | 67.2 | 6.9 | 10.3 | % | |||||||||
% of net sales | 12.4 | % | 11.3 | % |
For the Nine Months Ended September 30, | ||||||||||||||
2012 | 2011 | Difference | % Change | |||||||||||
Net sales | $ | 595.9 | $ | 616.3 | $ | (20.4 | ) | (3.3 | )% | |||||
Profit | 60.6 | 55.5 | 5.1 | 9.2 | % | |||||||||
% of net sales | 10.2 | % | 9.0 | % |
For the Nine Months Ended September 30, | |||||||
2012 | 2011 | ||||||
Net cash provided by (used in) operating activities | $ | 64.4 | $ | (2.2 | ) | ||
Net cash used in investing activities | (18.1 | ) | (161.7 | ) | |||
Net cash provided by (used in) financing activities | (48.5 | ) | 65.2 |
Maximum Capacity | Outstanding Borrowings | Available for Future Borrowings | |||||||||
Short-Term Debt: | |||||||||||
Foreign Obligations | $ | 6.1 | $ | 6.1 | $ | — | |||||
Asset Securitization (1) | 150.0 | 25.0 | 125.0 | ||||||||
Total short-term debt | $ | 156.1 | $ | 31.1 | $ | 125.0 | |||||
Current Maturities of Long-Term Debt: | $ | 0.3 | $ | 0.3 | $ | — | |||||
Long-Term Debt: | |||||||||||
Capital lease obligations | $ | 16.6 | $ | 16.6 | $ | — | |||||
Domestic revolving credit facility (2) | 650.0 | 233.0 | 367.1 | ||||||||
Senior unsecured notes | 200.0 | 200.0 | — | ||||||||
Total long-term debt | $ | 866.6 | $ | 449.6 | $ | 367.1 | |||||
Total | $ | 1,023.0 | $ | 481.0 | $ | 492.1 |
(1) | The maximum capacity under the asset securitization arrangement (“ASA”) is the lesser of $150.0 million or 100% of the net pool balance defined under the ASA. |
(2) | The available future borrowings on our domestic revolving credit facility exclude $49.9 million in standby letters of credit. We had an additional $20.0 million in stand-by letters of credit with other banks. |
Item 3. | Quantitative and Qualitative Disclosures About Market Risk. |
Item 4. | Controls and Procedures. |
Item 1. | Legal Proceedings. |
Item 1A. | Risk Factors. |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds. |
Period | Total Number of Shares Purchased (1) | Average Price Paid per Share (including fees) | Total Number of Shares Purchased As Part of Publicly Announced Plans or Programs | Approximate Dollar Value of Shares that may yet be Purchased Under the Plans or Programs (in millions) | |||||||||
July 1 through July 31 | 3,036 | $ | 44.94 | — | $ | 121.3 | |||||||
August 1 through August 31 | 791,672 | $ | 44.60 | 785,095 | $ | 86.3 | |||||||
September 1 through September 30 | 7,198 | $ | 50.09 | — | $ | 86.3 | |||||||
801,906 | $ | 44.65 | 785,095 |
(1) | This column reflects the shares purchased under the 2008 Share Repurchase Program and the surrender to LII of 16,811 shares of common stock to satisfy tax-withholding obligations in connection with the vesting of restricted stock and performance share units. |
Item 6. | Exhibits. |
3.1 | – | Restated Certificate of Incorporation of Lennox International Inc. (“LII”) (filed as Exhibit 3.1 to LII’s Registration Statement on Form S-1 (Registration Statement No. 333-75725) filed on April 6, 1999 and incorporated herein by reference). |
3.2 | – | Amended and Restated Bylaws of LII (filed as Exhibit 3.1 to LII’s Current Report on Form 8-K filed on September 21, 2012 and incorporated herein by reference). |
4.1 | – | Specimen Stock Certificate for the Common Stock, par value $.01 per share, of LII (filed as Exhibit 4.1 to LII’s Amendment to Registration Statement on Form S-1/A (Registration No. 333-75725) filed on June 16, 1999 and incorporated herein by reference). |
4.2 | – | Indenture, dated as of May 3, 2010, between LII and U.S. Bank National Association, as trustee (filed as Exhibit 4.3 to LII’s Post-Effective Amendment No. 1 to Registration Statement on S-3 (Registration No. 333-155796) filed on May 3, 2010, and incorporated herein by reference). |
4.3 | – | Form of First Supplemental Indenture among LII, the guarantors party thereto and U.S. Bank National Association, as trustee (filed as Exhibit 4.11 to LII’s Post-Effective Amendment No. 1 to Registration Statement on S-3 (Registration No. 333-155796) filed on May 3, 2010, and incorporated herein by reference). |
4.4 | – | Second Supplemental Indenture dated as of March 28, 2011, among Heatcraft Inc., a Mississippi corporation, Heatcraft Refrigeration Products LLC, a Delaware limited liability company and Advanced Distributor Products LLC, a Delaware limited liability company (the “Guarantors”), LII, and each other than existing Guarantor under the Indenture dated as of May 3, 2010, and U.S. Bank National Association as Trustee (filed as Exhibit 4.4 to LII’s Quarterly Report on Form 10-Q filed on April 26, 2011, and incorporated herein by reference). |
4.5 | Form of 4.900% Note due 2017 (filed as Exhibit 4.3 to LII’s Current Report on Form 8-K filed on May 6, 2010 and incorporated herein by reference). | |
31.1 | – | Certification of the principal executive officer (filed herewith). |
31.2 | – | Certification of the principal financial officer (filed herewith). |
32.1 | – | Certification of the principal executive officer and the principal financial officer pursuant to 18 U.S.C. Section 1350 (filed herewith). |
LENNOX INTERNATIONAL INC. | |
Date: October 22, 2012 | |
/s/ Joseph W. Reitmeier | |
Joseph W. Reitmeier | |
Chief Financial Officer | |
(on behalf of registrant and as principal financial officer) |
1. | I have reviewed this quarterly report on Form 10-Q of Lennox International Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Todd M. Bluedorn | |
Todd M. Bluedorn | |
Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q of Lennox International Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Joseph W. Reitmeier | |
Joseph W. Reitmeier | |
Chief Financial Officer |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Todd M. Bluedorn | |
Todd M. Bluedorn | |
Chief Executive Officer |
/s/ Joseph W. Reitmeier | |
Joseph W. Reitmeier | |
Chief Financial Officer |
Goodwill (Details) (USD $)
In Millions, unless otherwise specified |
9 Months Ended | |||
---|---|---|---|---|
Sep. 30, 2012
|
||||
Goodwill | ||||
Goodwill, Beginning Balance | $ 223.2 | |||
Acquisitions/(Dispositions) | 0 | |||
Other | 0.5 | [1] | ||
Goodwill, Ending Balance | 223.7 | |||
Residential Heating & Cooling [Member]
|
||||
Goodwill | ||||
Goodwill, Beginning Balance | 26.1 | |||
Acquisitions/(Dispositions) | 0 | |||
Other | 0 | [1] | ||
Goodwill, Ending Balance | 26.1 | |||
Commercial Heating & Cooling [Member]
|
||||
Goodwill | ||||
Goodwill, Beginning Balance | 63.5 | |||
Acquisitions/(Dispositions) | 0 | |||
Other | (0.1) | [1] | ||
Goodwill, Ending Balance | 63.4 | |||
Refrigeration [Member]
|
||||
Goodwill | ||||
Goodwill, Beginning Balance | 133.6 | |||
Acquisitions/(Dispositions) | 0 | |||
Other | 0.6 | [1] | ||
Goodwill, Ending Balance | $ 134.2 | |||
|
Lines of Credit and Financing Arrangements (Details 2) (USD $)
In Millions, unless otherwise specified |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2012
|
Sep. 30, 2011
|
Sep. 30, 2012
|
Sep. 30, 2011
|
|
Discount fees in Selling, General and Administrative Expenses | ||||
Interest expense, net | $ 4.4 | $ 4.1 | $ 13.4 | $ 12.5 |
Asset Securitization [Member]
|
||||
Discount fees in Selling, General and Administrative Expenses | ||||
Interest expense, net | $ 0.3 | $ 0.1 | $ 0.9 | $ 0.5 |
Commitments and Contingencies (Details) (USD $)
In Millions, unless otherwise specified |
Sep. 30, 2012
|
Dec. 31, 2011
|
---|---|---|
Total liabilities for estimated warranty | ||
Accrued expenses | $ 25.5 | $ 26.7 |
Other liabilities | 45.1 | 41.6 |
Total liabilities for estimated warranty | $ 70.6 | $ 68.3 |
Earnings Per Share (Details) (USD $)
In Millions, except Per Share data, unless otherwise specified |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2012
|
Sep. 30, 2011
|
Sep. 30, 2012
|
Sep. 30, 2011
|
|
Computations of basic and diluted earnings per share for income from continuing operations | ||||
Net income | $ 29.4 | $ 33.8 | $ 68.0 | $ 71.6 |
Loss from discontinued operations | (20.3) | (1.1) | (40.5) | (11.1) |
Income from continuing operations | $ 49.7 | $ 34.9 | $ 108.5 | $ 82.7 |
Weighted-average shares outstanding - basic | 50.6 | 52.2 | 50.8 | 53.0 |
Effect of diluted securities attributable to stock-based payments | 0.7 | 0.6 | 0.7 | 0.9 |
Weighted-average shares outstanding - diluted | 51.3 | 52.8 | 51.5 | 53.9 |
Earnings per share from continuing operations: | ||||
Basic | $ 0.98 | $ 0.67 | $ 2.13 | $ 1.56 |
Diluted | $ 0.97 | $ 0.66 | $ 2.11 | $ 1.53 |
Lines of Credit and Financing Arrangements (Details 3)
|
Sep. 30, 2012
|
Dec. 31, 2011
|
---|---|---|
Summary of weighted average borrowing rate facility | ||
Weighted average borrowing rate | 1.47% | 1.53% |
Derivatives (Details Textual) (USD $)
In Millions, unless otherwise specified |
9 Months Ended | |
---|---|---|
Sep. 30, 2012
|
Jun. 12, 2009
|
|
Derivatives (Textual) [Abstract] | ||
Hedged value of revolving credit facility | $ 100 | |
Variable Interest Rate Swap Expiration Date | Oct. 12, 2012 | |
Variable portion of the interest rate swap tied | 1-Month LIBOR | |
Commodity Futures Contracts [Member]
|
||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivatives scheduled to mature | February 2014 | |
Cash flow hedge derivative gains (losses) expected to be reclassified into earnings within the next 12 months | 1.9 | |
Interest Rate Swap [Member]
|
||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional amount of Interest rate risk hedge | 100 | |
Variable interest rate swap with financial institution at fixed interest rate | 2.66% | |
Notional amount cash flow Hedge | 100 | |
Cash flow hedge derivative gains (losses) expected to be reclassified into earnings within the next 12 months | $ (0.1) |
Discontinued Operations (Tables)
|
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2012
|
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Service Experts [Member]
|
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Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of net trade sales and pre-tax operating losses | A summary of net trade sales and pre-tax operating income (losses) for our Service Experts business is detailed below (in millions):
|
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Assets and liabilities of the discontinued operations | The assets and liabilities of the Service Experts business are presented as follows in the accompanying Consolidated Balance Sheets (in millions):
|
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Hearth [Member]
|
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Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of net trade sales and pre-tax operating losses | A summary of net trade sales and pre-tax operating losses for our Hearth business is detailed below (in millions):
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Assets and liabilities of the discontinued operations | The assets and liabilities of the Hearth business are presented as follows in the accompanying Consolidated Balance Sheets (in millions):
|
Reportable Business Segments (Details 1) (USD $)
In Millions, unless otherwise specified |
3 Months Ended | 9 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2012
|
Sep. 30, 2011
|
Sep. 30, 2012
|
Sep. 30, 2011
|
|||||||
Net Sales | ||||||||||
Net Sales | $ 809.7 | $ 801.2 | $ 2,264.5 | $ 2,192.4 | ||||||
Segment Profit (Loss) | ||||||||||
Subtotal that includes segment profit and eliminations | 81.0 | 67.8 | 181.7 | 152.1 | ||||||
Reconciliation to income from continuing operations before income taxes: | ||||||||||
Special product quality adjustment | 0.9 | 0 | 1.0 | (2.4) | ||||||
Items in (Gains) losses and other expenses, net that are excluded from segment profit | (1.2) | [1] | 3.2 | [1] | (2.0) | [1] | 5.5 | [1] | ||
Restructuring charges | 0.4 | 8.0 | 3.1 | 11.3 | ||||||
Interest expense, net | 4.4 | 4.1 | 13.4 | 12.5 | ||||||
Other expense, net | 0 | 0 | 0.1 | 0.1 | ||||||
Income from continuing operations before income taxes | 76.5 | 52.5 | 166.1 | 125.1 | ||||||
Residential Heating & Cooling [Member]
|
||||||||||
Net Sales | ||||||||||
Net Sales | 386.3 | 353.8 | 1,070.7 | 979.7 | ||||||
Segment Profit (Loss) | ||||||||||
Subtotal that includes segment profit and eliminations | 37.7 | 31.3 | 90.7 | 70.9 | ||||||
Commercial Heating & Cooling [Member]
|
||||||||||
Net Sales | ||||||||||
Net Sales | 219.7 | 223.6 | 597.9 | 596.4 | ||||||
Segment Profit (Loss) | ||||||||||
Subtotal that includes segment profit and eliminations | 32.5 | 31.1 | 74.1 | 67.2 | ||||||
Refrigeration [Member]
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||||||||||
Net Sales | ||||||||||
Net Sales | 203.7 | 223.8 | 595.9 | 616.3 | ||||||
Segment Profit (Loss) | ||||||||||
Subtotal that includes segment profit and eliminations | 25.1 | 20.5 | 60.6 | 55.5 | ||||||
Corporate & other [Member]
|
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Segment Profit (Loss) | ||||||||||
Subtotal that includes segment profit and eliminations | $ (14.3) | $ (15.1) | $ (43.7) | $ (41.5) | ||||||
|
Lines of Credit and Financing Arrangements (Details Textual 1) (Senior Notes [Member], USD $)
In Millions, unless otherwise specified |
9 Months Ended | ||
---|---|---|---|
Sep. 30, 2012
|
Dec. 31, 2011
|
May 31, 2010
|
|
Senior Notes [Member]
|
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Debt Instrument [Line Items] | |||
Senior unsecured notes | $ 200.0 | $ 200.0 | $ 200.0 |
Fixed interest rate for senior unsecured notes | 4.90% | ||
Maturity date of senior unsecured notes | May 15, 2017 | ||
Default long term debt description of violation or event of default of revolving credit facility | The indenture governing the notes contains covenants that, among other things, limit our ability and the ability of the subsidiary guarantors to: create or incur certain liens; enter into certain sale and leaseback transactions; enter into certain mergers, consolidations and transfers of substantially all of our assets; and transfer certain properties. The indenture also contains a cross default provision which is triggered if we default on other debt of at least $75 million in principal which is then accelerated, and such acceleration is not rescinded within 30 days of the notice date | ||
Minimum principal amount accelerated | $ 75 | ||
Notice Date | 30 days |
Fair Value Measurements (Details 1) (Senior unsecured notes [Member], USD $)
In Millions, unless otherwise specified |
Sep. 30, 2012
|
Dec. 31, 2011
|
---|---|---|
Senior unsecured notes [Member]
|
||
Other Fair Value Measurements | ||
Senior unsecured notes | $ 219.4 | $ 207.0 |
Earnings Per Share (Details 1) (USD $)
|
9 Months Ended | |
---|---|---|
Sep. 30, 2012
|
Sep. 30, 2011
|
|
Stock appreciation rights were outstanding, but not included in the diluted loss per share calculation | ||
Weighted-average number of shares | 386,759 | 2,275,894 |
Price ranges per share | $ 46.78 | |
Price ranges per share, minimum | $ 28.24 | |
Price ranges per share, maximum | $ 46.78 |
Inventories (Tables)
|
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2012
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of inventories | The components of inventories are as follows (in millions):
|
Commitments and Contingencies (Details 2) (USD $)
In Millions, unless otherwise specified |
9 Months Ended |
---|---|
Sep. 30, 2012
|
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Changes in the accrued product quality issue | |
Total accrued product quality issue as of December 31, 2011 | $ 7.5 |
Estimated expense for expected product quality claims | 1.7 |
Product quality claims | (2.1) |
Total accrued product quality issue as of September 30, 2012 | $ 7.1 |
Derivatives (Details 1)
|
Sep. 30, 2012
lb
|
Dec. 31, 2011
lb
|
---|---|---|
Copper [Member]
|
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Outstanding commodity futures contracts designated as cash flow hedges | ||
Notional amounts | 21,400,000 | 23,300,000 |
Outstanding commodity futures contracts not designated as cash flow hedges | ||
Notional amounts | 2,300,000 | 2,800,000 |
Aluminum [Member]
|
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Outstanding commodity futures contracts not designated as cash flow hedges | ||
Notional amounts | 2,600,000 | 3,000,000 |
Fair Value Measurements (Details) (Fair Value, Inputs, Level 1 [Member], USD $)
In Millions, unless otherwise specified |
Sep. 30, 2012
|
Dec. 31, 2011
|
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---|---|---|---|---|---|---|
Fair Value, Inputs, Level 1 [Member]
|
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Assets and Liabilities Measured at Fair Value on a Recurring Basis | ||||||
Investment in marketable equity securities | $ 10.1 | [1] | $ 8.4 | [1] | ||
|
Condensed Consolidating Financial Statements (Tables)
|
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2012
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Condensed Consolidating Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Consolidating Financial Statements | Condensed consolidating financial statements of the Company, its Guarantor Subsidiaries and Non-Guarantor Subsidiaries as of September 30, 2012 and December 31, 2011 and for the three and nine months ended September 30, 2012 and 2011 are shown below: Condensed Consolidating Balance Sheets As of September 30, 2012 (In millions)
Condensed Consolidating Statements of Operations For the Three Months Ended September 30, 2012 (In millions)
Condensed Consolidating Statements of Operations For the Nine Months Ended September 30, 2012 (In millions)
Condensed Consolidating Balance Sheets As of December 31, 2011 (In millions)
Condensed Consolidating Statements of Operations For the Three Months Ended September 30, 2011 (In millions)
Condensed Consolidating Statements of Operations For the Nine Months Ended September 30, 2011 (In millions)
Condensed Consolidating Statements of Cash Flows For the Nine Months Ended September 30, 2012 (In millions)
Condensed Consolidating Statements of Cash Flows For the Nine Months Ended September 30, 2011 (In millions)
|
Lines of Credit and Financing Arrangements (Details) (USD $)
In Millions, unless otherwise specified |
Sep. 30, 2012
|
Dec. 31, 2011
|
May 31, 2010
|
---|---|---|---|
Short-Term Debt: | |||
Asset Securitization Program | $ 25.0 | $ 0 | |
Foreign obligations | 6.1 | 4.7 | |
Total short-term debt | 31.1 | 4.7 | |
Current maturities of long-term debt | 0.3 | 0.8 | |
Long-Term Debt: | |||
Capital lease obligations | 16.6 | 16.6 | |
Domestic revolving credit facility | 233.0 | 243.0 | |
Total long-term debt | 449.6 | 459.6 | |
Total debt | 481.0 | 465.1 | |
Senior Notes [Member]
|
|||
Long-Term Debt: | |||
Senior unsecured notes | $ 200.0 | $ 200.0 | $ 200.0 |
Discontinued Operations (Details) (USD $)
In Millions, unless otherwise specified |
3 Months Ended | 9 Months Ended | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2012
|
Sep. 30, 2011
|
Sep. 30, 2012
|
Sep. 30, 2011
|
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Service Experts [Member]
|
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Summary of net trade sales and pre-tax operating losses | ||||||||||||
Net trade sales | $ 98.3 | [1] | $ 120.4 | [1] | $ 292.6 | [1] | $ 346.6 | [1] | ||||
Pre-tax operating (loss) income | (26.8) | [1],[2] | 0.1 | [1],[2] | (42.7) | [1],[2] | (8.3) | [1],[2] | ||||
Hearth [Member]
|
||||||||||||
Summary of net trade sales and pre-tax operating losses | ||||||||||||
Net trade sales | 0 | 19.8 | 23.5 | 61.1 | ||||||||
Pre-tax operating (loss) income | (1.2) | [2] | (2.3) | [2] | (13.1) | [2] | (9.7) | [2] | ||||
Gain (loss) on sale | $ 2.9 | $ 0 | $ (0.9) | $ 0 | ||||||||
|
Pension and Postretirement Benefit Plans (Details Textual) (USD $)
In Millions, unless otherwise specified |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2012
|
Sep. 30, 2011
|
Sep. 30, 2012
|
Sep. 30, 2011
|
|
Defined Benefit Plan Disclosure [Line Items] | ||||
Settlement Charge Related to Recognized Actuarial Losses | $ 6.3 | |||
Pension and Postretirement Benefit Plans (Textual) [Abstract] | ||||
Income from continuing operations | 49.7 | 34.9 | 108.5 | 82.7 |
Loss from discontinued operations | (20.3) | (1.1) | (40.5) | (11.1) |
Pension Benefits [Member]
|
||||
Pension and Postretirement Benefit Plans (Textual) [Abstract] | ||||
Income from continuing operations | 3.6 | 2.9 | 10.0 | 9.9 |
Loss from discontinued operations | $ 0.6 | $ 0.1 | $ 7.0 | $ 0.6 |
Income Taxes (Details) (USD $)
In Millions, unless otherwise specified |
9 Months Ended |
---|---|
Sep. 30, 2012
|
|
Income Taxes (Textual) [Abstract] | |
Total gross unrecognized tax benefits | $ 6.0 |
Amount of unrecognized tax benefits that would be recorded through consolidated statement of operation | 5.9 |
Interest and penalties in income tax expenses | $ 0.1 |
Inventories
|
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2012
|
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | Inventories: The components of inventories are as follows (in millions):
|
Stock-Based Compensation (Details) (USD $)
In Millions, unless otherwise specified |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2012
|
Sep. 30, 2011
|
Sep. 30, 2012
|
Sep. 30, 2011
|
|
Schedule of stock -based compensation expense in operations | ||||
Net stock-based compensation expense | $ 2.1 | $ 3.5 | $ 10.4 | $ 12.6 |