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Condensed Consolidating Financial Statements
12 Months Ended
Dec. 31, 2012
Condensed Consolidating Financial Statements [Abstract]  
Condensed Consolidating Financial Statements
Condensed Consolidating Financial Statements:

The Company’s senior unsecured notes are unconditionally guaranteed by certain of the Company’s subsidiaries (the “Guarantor
Subsidiaries”) and are not secured by our other subsidiaries (the “Non-Guarantor Subsidiaries”). The Guarantor Subsidiaries are 100% owned, all guarantees are full and unconditional, and all guarantees are joint and several. As a result of the guarantee arrangements, we are required to present the following condensed consolidating financial statements.

On March 22, 2013, the Company sold its Service Experts business to a majority-owned entity of American Capital, Ltd. The primary subsidiary for the U.S. Service Experts business had previously been included as a "Guarantor Subsidiary" and the Canada Service Experts subsidiary had previously been included as a "Non-Guarantor Subsidiary." As of March 31, 2013, the U.S. and Canada Service Experts businesses are included in discontinued operations of the condensed consolidating financial statements.

The condensed consolidating financial statements reflect the investments in subsidiaries of the Company using the equity method of accounting. Intercompany account balances have been included in Accounts and notes receivable, Other assets (Current), Other assets, net, Short-term debt, Accounts payable, and Long-term debt line items of the Parent, Guarantor and Non-Guarantor balance sheets. The principal elimination entries eliminate investments in subsidiaries and intercompany balances and transactions.

Condensed consolidating financial statements of the Company, its Guarantor Subsidiaries and Non-Guarantor Subsidiaries as of March 31, 2013 and December 31, 2012 and for the three months ended March 31, 2013 and 2012 are shown on the following pages:

Lennox International Inc. and Subsidiaries
Condensed Consolidating Balance Sheets
As of March 31, 2013
(In millions)
 
 
Parent
 
Guarantor
Subsidiaries
 
Non-Guarantor
Subsidiaries
 
Eliminations
 
Consolidated
ASSETS
Current Assets:
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$

 
$
14.0

 
$
20.9

 
$

 
$
34.9

Accounts and notes receivable, net
(990.1
)
 
873.3

 
471.1

 
52.7

 
407.0

Inventories, net

 
340.2

 
129.7

 
(5.6
)
 
464.3

Deferred income taxes, net
2.2

 
23.0

 
6.2

 
(1.7
)
 
29.7

Other assets
(14.5
)
 
26.3

 
113.2

 
(56.8
)
 
68.2

Assets of discontinued operations

 

 

 

 

Total current assets
(1,002.4
)
 
1,276.8

 
741.1

 
(11.4
)
 
1,004.1

Property, plant and equipment, net

 
235.5

 
59.6

 

 
295.1

Goodwill

 
131.8

 
91.6

 

 
223.4

Deferred income taxes
0.9

 
94.2

 
20.6

 
(5.8
)
 
109.9

Other assets, net(1)
2,190.2

 
534.8

 
27.8

 
(2,671.2
)
 
81.6

Total assets
$
1,188.7

 
$
2,273.1

 
$
940.7

 
$
(2,688.4
)
 
$
1,714.1

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
 
 
 
 
 
 
 
 
 
Short-term debt
$
86.5

 
$

 
$
(60.3
)
 
$
(0.2
)
 
$
26.0

Current maturities of long-term debt

 
0.4

 
0.2

 

 
0.6

Accounts payable
13.4

 
152.8

 
82.8

 
63.4

 
312.4

Accrued expenses
8.4

 
155.9

 
58.6

 
(0.3
)
 
222.6

Income taxes payable
2.6

 
4.5

 
49.5

 
(55.8
)
 
0.8

Liabilities of discontinued operations

 

 

 

 

Total current liabilities
110.9

 
313.6

 
130.8

 
7.1

 
562.4

Long-term debt
474.0

 
15.6

 
99.4

 
(99.2
)
 
489.8

Post-retirement benefits, other than pensions

 
5.8

 

 

 
5.8

Pensions

 
117.3

 
18.4

 

 
135.7

Other liabilities
1.3

 
63.9

 
10.4

 
(7.2
)
 
68.4

Total liabilities
586.2

 
516.2

 
259.0

 
(99.3
)
 
1,262.1

Commitments and contingencies
 
 
 
 
 
 
 
 
 
Total stockholders' equity
602.5

 
1,756.9

 
681.7

 
(2,589.1
)
 
452.0

Total liabilities and stockholders' equity
$
1,188.7

 
$
2,273.1

 
$
940.7

 
$
(2,688.4
)
 
$
1,714.1


(1) 
Other assets, net consists primarily of Investments in subsidiaries which eliminate upon consolidation.

Lennox International Inc. and Subsidiaries
Condensed Consolidating Balance Sheets
As of December 31, 2012
(In millions)
 
 
Parent
 
Guarantor
Subsidiaries
 
Non-
Guarantor
Subsidiaries
 
Eliminations
 
Consolidated
ASSETS
Current Assets:
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
1.0

 
$
13.4

 
$
37.4

 
$

 
$
51.8

Accounts and notes receivable, net
(1,178.0
)
 
1,076.0

 
427.2

 
48.2

 
373.4

Inventories, net

 
257.3

 
121.5

 
(4.0
)
 
374.8

Deferred income taxes, net

 
22.9

 
6.3

 
(1.7
)
 
27.5

Other assets
(0.6
)
 
23.8

 
97.5

 
(59.7
)
 
61.0

Assets of discontinued operations

 
21.2

 
77.4

 

 
98.6

Total current assets
(1,177.6
)
 
1,414.6

 
767.3

 
(17.2
)
 
987.1

Property, plant and equipment, net

 
239.7

 
58.5

 

 
298.2

Goodwill

 
131.8

 
92.0

 

 
223.8

Deferred income taxes

 
87.8

 
20.8

 
(5.8
)
 
102.8

Other assets, net(1)
2,176.3

 
488.5

 
30.3

 
(2,615.1
)
 
80.0

Total assets
$
998.7

 
$
2,362.4

 
$
968.9

 
$
(2,638.1
)
 
$
1,691.9

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
 
 
 
 
 
 
 
 
 
Short-term debt
$
101.9

 
$

 
$
(51.0
)
 
$
(16.0
)
 
$
34.9

Current maturities of long-term debt

 
0.5

 
0.2

 

 
0.7

Accounts payable

 
133.7

 
92.0

 
59.0

 
284.7

Accrued expenses
2.5

 
196.6

 
60.8

 
(0.3
)
 
259.6

Income taxes payable
(27.3
)
 
35.1

 
38.5

 
(41.8
)
 
4.5

Liabilities of discontinued operations

 
42.3

 
12.9

 

 
55.2

Total current liabilities
77.1

 
408.2

 
153.4

 
0.9

 
639.6

Long-term debt
335.0

 
15.6

 
98.7

 
(98.3
)
 
351.0

Post-retirement benefits, other than pensions

 
6.1

 

 

 
6.1

Pensions

 
114.7

 
19.7

 

 
134.4

Other liabilities
0.5

 
60.1

 
10.6

 
(7.2
)
 
64.0

Total liabilities
412.6

 
604.7

 
282.4

 
(104.6
)
 
1,195.1

Commitments and contingencies

 

 

 

 

Total stockholders' equity
586.1

 
1,757.7

 
686.5

 
(2,533.5
)
 
496.8

Total liabilities and stockholders' equity
$
998.7

 
$
2,362.4

 
$
968.9

 
$
(2,638.1
)
 
$
1,691.9


(1) 
Other assets, net consists primarily of Investments in subsidiaries which eliminate upon consolidation.








Lennox International Inc. and Subsidiaries
Condensed Consolidating Statements of Operations
For the Three Months Ended March 31, 2013
(In millions)
 
 
Parent
 
Guarantor
Subsidiaries
 
Non-Guarantor
Subsidiaries
 
Eliminations
 
Consolidated
Net Sales
$

 
$
520.7

 
$
189.5

 
$
(41.8
)
 
$
668.4

Cost of goods sold

 
404.4

 
143.3

 
(41.3
)
 
506.4

Gross profit

 
116.3

 
46.2

 
(0.5
)
 
162.0

Operating expenses:
 
 
 
 
 
 
 
 
 
Selling, general and administrative expenses

 
102.6

 
33.0

 

 
135.6

Losses and other expenses, net
0.4

 
0.4

 
0.3

 

 
1.1

Restructuring charges

 
0.3

 
0.2

 

 
0.5

Income from equity method investments
(7.9
)
 
2.5

 
(2.8
)
 
5.1

 
(3.1
)
Operational income from continuing operations
7.5

 
10.5

 
15.5

 
(5.6
)
 
27.9

Interest expense, net
3.3

 
(0.5
)
 
0.6

 

 
3.4

Other expense, net

 

 
0.1

 

 
0.1

Income from continuing operations before income taxes
4.2

 
11.0

 
14.8

 
(5.6
)
 
24.4

Provision for income taxes
(1.3
)
 
4.8

 
5.3

 
(0.2
)
 
8.6

Income from continuing operations
5.5

 
6.2

 
9.5

 
(5.4
)
 
15.8

Loss from discontinued operations

 
(7.8
)
 

 

 
(7.8
)
Net income
$
5.5

 
$
(1.6
)
 
$
9.5

 
$
(5.4
)
 
$
8.0

Other comprehensive loss
$
(3.4
)
 
$
0.8

 
$
(46.0
)
 
$
(0.7
)
 
$
(49.3
)


 


Lennox International Inc. and Subsidiaries
Condensed Consolidating Statements of Operations
For the Three Months Ended March 31, 2012
(In millions)
 
 
Parent
 
Guarantor
Subsidiaries
 
Non-
Guarantor
Subsidiaries
 
Eliminations
 
Consolidated
Net Sales
$

 
$
472.0

 
$
189.5

 
$
(47.1
)
 
$
614.4

Cost of goods sold

 
375.9

 
144.5

 
(46.9
)
 
473.5

Gross profit

 
96.1

 
45.0

 
(0.2
)
 
140.9

Operating expenses:
 
 
 
 
 
 
 
 
 
Selling, general and administrative expenses

 
88.4

 
34.8

 

 
123.2

Losses and other expenses, net
(1.6
)
 
(0.7
)
 
0.9

 

 
(1.4
)
Restructuring charges

 
2.6

 

 

 
2.6

Income from equity method investments
6.8

 
2.1

 
(1.9
)
 
(9.4
)
 
(2.4
)
Operational income from continuing operations
(5.2
)
 
3.7

 
11.2

 
9.2

 
18.9

Interest expense, net
4.4

 
(0.5
)
 
0.8

 

 
4.7

Other expense, net

 

 

 

 

Income from continuing operations before income taxes
(9.6
)
 
4.2

 
10.4

 
9.2

 
14.2

Provision for income taxes
(1.0
)
 
2.6

 
2.8

 
0.5

 
4.9

Income from continuing operations
(8.6
)
 
1.6

 
7.6

 
8.7

 
9.3

Loss from discontinued operations

 
(10.8
)
 
(4.6
)
 

 
(15.4
)
Net loss
$
(8.6
)
 
$
(9.2
)
 
$
3.0

 
$
8.7

 
$
(6.1
)
Other comprehensive income
$
6.9

 
$
2.7

 
$
12.1

 
$
0.7

 
$
22.4


Lennox International Inc. and Subsidiaries
Condensed Consolidating Statements of Cash Flows
For the Three Months Ended March 31, 2013
(In millions)
 
 
Parent
 
Guarantor
Subsidiaries
 
Non-Guarantor
Subsidiaries
 
Eliminations
 
Consolidated
Cash flows from operating activities:
$
54.3

 
$
(168.3
)
 
$
(23.3
)
 
$

 
$
(137.3
)
Cash flows from investing activities:
 
 
 
 
 
 
 
 
 
Proceeds from the disposal of property, plant and equipment

 

 

 

 

Purchases of property, plant and equipment

 
(9.3
)
 
(2.8
)
 

 
(12.1
)
Net proceeds from sale of business
2.0

 

 
3.3

 

 
5.3

Net cash used in discontinued operations

 
(0.1
)
 

 

 
(0.1
)
Net cash used in investing activities
2.0

 
(9.4
)
 
0.5

 

 
(6.9
)
Cash flows from financing activities:
 
 
 
 
 
 
 
 
 
Short-term borrowings, net

 

 
1.2

 

 
1.2

Asset securitization borrowings

 

 
130.0

 

 
130.0

Asset securitization payments

 

 
(140.0
)
 

 
(140.0
)
Long-term debt payments

 
(0.2
)
 

 

 
(0.2
)
Borrowings from revolving credit facility
435.5

 

 

 

 
435.5

Payments on revolving credit facility
(296.5
)
 

 

 

 
(296.5
)
Proceeds from stock option exercises
0.5

 

 

 

 
0.5

Repurchases of common stock
(4.2
)
 

 

 

 
(4.2
)
Excess tax benefits related to share-based payments
2.3

 

 

 

 
2.3

Intercompany debt
(7.1
)
 
(0.7
)
 
7.8

 

 

Intercompany financing activity
(187.8
)
 
179.2

 
8.6

 

 

Cash dividends paid

 

 

 

 

Net cash provided by financing activities
(57.3
)
 
178.3

 
7.6

 

 
128.6

Decrease in cash and cash equivalents
(1.0
)
 
0.6

 
(15.2
)
 

 
(15.6
)
Effect of exchange rates on cash and cash equivalents

 

 
(1.3
)
 

 
(1.3
)
Cash and cash equivalents, beginning of period
1.0

 
13.4

 
37.4

 

 
51.8

Cash and cash equivalents, end of period
$

 
$
14.0

 
$
20.9

 
$

 
$
34.9

Lennox International Inc. and Subsidiaries
Condensed Consolidating Statements of Cash Flows
For the Three Months Ended March 31, 2012
(In millions)
 
 
Parent
 
Guarantor
Subsidiaries
 
Non-Guarantor
Subsidiaries
 
Eliminations
 
Consolidated
Cash flows from operating activities:
$
30.9

 
$
(71.5
)
 
$
6.3

 
$

 
$
(34.3
)
Cash flows from investing activities:
 
 
 
 
 
 
 
 
 
Proceeds from the disposal of property, plant and equipment

 
0.1

 

 

 
0.1

Purchases of property, plant and equipment

 
(5.5
)
 
(1.1
)
 

 
(6.6
)
Net proceeds from sale of business

 

 

 

 

Net cash used in discontinued operations

 
(0.3
)
 

 

 
(0.3
)
Net cash used in investing activities

 
(5.7
)
 
(1.1
)
 

 
(6.8
)
Cash flows from financing activities:
 
 
 
 
 
 
 
 
 
Short-term borrowings, net

 

 
6.6

 

 
6.6

Asset securitization borrowings

 

 
170.0

 

 
170.0

Asset securitization payments

 

 
(170.0
)
 

 
(170.0
)
Long-term debt payments

 
(0.2
)
 

 

 
(0.2
)
Borrowings from revolving credit facility
267.5

 

 

 

 
267.5

Payments on revolving credit facility
(215.5
)
 

 

 

 
(215.5
)
Proceeds from stock option exercises
0.1

 

 

 

 
0.1

Payments of deferred financing costs

 

 

 

 

Repurchases of common stock
(1.9
)
 

 

 

 
(1.9
)
Excess tax benefits related to share-based payments
0.8

 

 

 

 
0.8

Intercompany debt
8.5

 
(2.2
)
 
(6.3
)
 

 

Intercompany financing activity
(81.3
)
 
86.8

 
(5.5
)
 

 

Cash dividends paid
(9.2
)
 

 

 

 
(9.2
)
Net cash provided by financing activities
(31.0
)
 
84.4

 
(5.2
)
 

 
48.2

Increase in cash and cash equivalents
(0.1
)
 
7.2

 

 

 
7.1

Effect of exchange rates on cash and cash equivalents

 

 
2.6

 

 
2.6

Cash and cash equivalents, beginning of period
1.0

 
9.7

 
34.3

 

 
45.0

Cash and cash equivalents, end of period
$
0.9

 
$
16.9

 
$
36.9

 
$

 
$
54.7