Condensed Consolidating Financial Statements (Tables)

9 Months Ended

Sep. 30, 2014

Condensed Consolidating Financial Statements [Abstract]

Lennox International Inc. and Subsidiaries

Condensed Consolidating Balance Sheets

As of September 30, 2014



(Amounts in millions)	Parent			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated
ASSETS
Current Assets:
Cash and cash equivalents	$	1.5		$	15.1	$	31.5		$	—		$	48.1
Accounts and notes receivable, net	—			11.8		489.7			—			501.5
Inventories, net	—			372.0		134.2			(4.7		)	501.5
Deferred income taxes, net	0.2			21.2		5.6			(3.2		)	23.8
Other assets	3.4			56.2		79.2			(77.2		)	61.6
Total current assets	5.1			476.3		740.2			(85.1		)	1,136.5
Property, plant and equipment, net	—			257.5		93.0			—			350.5
Goodwill	—			140.4		73.7			—			214.1
Investment in subsidiaries	1,320.7			344.5		(0.5		)	(1,664.7		)	—
Deferred income taxes	1.1			75.7		18.0			(8.6		)	86.2
Other assets, net	3.4			64.3		23.0			(1.5		)	89.2
Intercompany receivables (payables), net	(459.5		)	451.8		7.7						—
Total assets	$	870.8		$	1,810.5	$	955.1		$	(1,759.9	)	$	1,876.5
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Short-term debt	$	—		$	—	$	229.0		$	—		$	229.0
Current maturities of long-term debt	—			1.0		0.3			—			1.3
Accounts payable	14.4			245.2		73.5			—			333.1
Accrued expenses	6.7			176.9		65.1			—			248.7
Income taxes payable	(1.5		)	31.9		64.8			(82.4		)	12.8
Total current liabilities	19.6			455.0		432.7			(82.4		)	824.9
Long-term debt	349.0			16.7		—			—			365.7
Post-retirement benefits, other than pensions	—			2.7		—			—			2.7
Pensions	—			51.3		9.3			—			60.6
Other liabilities	0.5			120.7		11.5			(11.8		)	120.9
Total liabilities	369.1			646.4		453.5			(94.2		)	1,374.8
Commitments and contingencies
Total stockholders' equity	501.7			1,164.1		501.6			(1,665.7		)	501.7
Total liabilities and stockholders' equity	$	870.8		$	1,810.5	$	955.1		$	(1,759.9	)	$	1,876.5

Lennox International Inc. and Subsidiaries

Condensed Consolidating Balance Sheets

As of December 31, 2013



(Amounts in millions)	Parent			Guarantor Subsidiaries		Non- Guarantor Subsidiaries			Eliminations			Consolidated
ASSETS
Current Assets:
Cash and cash equivalents	$	1.1		$	10.5	$	26.4		$	—		$	38.0
Accounts and notes receivable, net	—			12.8		395.3			—			408.1
Inventories, net	—			253.6		128.4			(3.2		)	378.8
Deferred income taxes, net	0.9			21.2		5.7			(3.3		)	24.5
Other assets	3.4			38.4		70.2			(59.0		)	53.0
Total current assets	5.4			336.5		626.0			(65.5		)	902.4
Property, plant and equipment, net	—			246.4		89.1			—			335.5
Goodwill	—			140.4		76.4			—			216.8
Investment in subsidiaries	1,138.8			337.5		(0.6		)	(1,475.7		)	—
Deferred income taxes	—			76.9		20.2			(8.6		)	88.5
Other assets, net	4.2			64.3		16.4			(1.4		)	83.5
Intercompany receivables (payables), net	(460.6		)	434.0		26.6			—			—
Total assets	$	687.8		$	1,636.0	$	854.1		$	(1,551.2	)	$	1,626.7
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Short-term debt	$	—		$	—	$	165.9		$	—		$	165.9
Current maturities of long-term debt	—			1.0		0.3			—			1.3
Accounts payable	11.8			187.8		83.5			—			283.1
Accrued expenses	3.3			168.4		60.4			—			232.1
Income taxes payable	(30.3		)	75.7		49.9			(63.7		)	31.6
Total current liabilities	(15.2		)	432.9		360.0			(63.7		)	714.0
Long-term debt	217.0			15.8		0.4			—			233.2
Post-retirement benefits, other than pensions	—			4.6		—			—			4.6
Pensions	—			58.4		11.6			—			70.0
Other liabilities	0.3			119.4		11.3			(11.8		)	119.2
Total liabilities	202.1			631.1		383.3			(75.5		)	1,141.0
Commitments and contingencies
Total stockholders' equity	485.7			1,004.9		470.8			(1,475.7		)	485.7
Total liabilities and stockholders' equity	$	687.8		$	1,636.0	$	854.1		$	(1,551.2	)	$	1,626.7

Condensed Consolidating Statements of Operations and Comprehensive Income (Loss)

Lennox International Inc. and Subsidiaries

Condensed Consolidating Statements of Operations and Comprehensive Income

For the Three Months Ended September 30, 2014



(Amounts in millions)	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net Sales	$	—		$	736.2		$	213.5		$	(51.3	)	$	898.4
Cost of goods sold	—			538.8			164.5			(52.0		)	651.3
Gross profit	—			197.4			49.0			0.7			247.1
Operating expenses:
Selling, general and administrative expenses	—			127.4			13.5			—			140.9
Losses (gains) and other expenses, net	(0.1		)	1.2			1.0			—			2.1
Restructuring charges	—			(0.1		)	1.1			—			1.0
Income from equity method investments	(69.7		)	(6.4		)	(2.7		)	75.3			(3.5		)
Operational income from continuing operations	69.8			75.3			36.1			(74.6		)	106.6
Interest expense, net	3.6			(0.7		)	1.1			—			4.0
Other expense, net	—			—			—			—			—
Income from continuing operations before income taxes	66.2			76.0			35.0			(74.6		)	102.6
Provision for income taxes	(1.2		)	24.1			11.9			0.3			35.1
Income from continuing operations	67.4			51.9			23.1			(74.9		)	67.5
Loss from discontinued operations	—			—			(0.1		)	—			(0.1		)
Net income	$	67.4		$	51.9		$	23.0		$	(74.9	)	$	67.4
Other comprehensive income (loss), net of tax	(1.1		)	(6.7		)	(17.2		)	(1.0		)	(26.0		)
Comprehensive income	$	66.3		$	45.2		$	5.8		$	(75.9	)	$	41.4

Lennox International Inc. and Subsidiaries

Condensed Consolidating Statements of Operations and Comprehensive Income

For the Nine Months Ended September 30, 2014



(Amounts in millions)	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net Sales	$	—		$	2,089.0		$	606.5		$	(140.9	)	$	2,554.6
Cost of goods sold	—			1,555.1			460.9			(139.3		)	1,876.7
Gross profit	—			533.9			145.6			(1.6		)	677.9
Operating expenses:
Selling, general and administrative expenses	—			362.9			62.6			—			425.5
Losses (gains) and other expenses, net	(0.3		)	2.3			1.5						3.5
Restructuring charges	—			—			1.3			—			1.3
Income from equity method investments	(167.6		)	(21.0		)	(9.8		)	186.4			(12.0		)
Operational income from continuing operations	167.9			189.7			90.0			(188.0		)	259.6
Interest expense, net	10.1			(2.2		)	3.1			—			11.0
Other expense, net	—			—			—			—			—
Income from continuing operations before income taxes	157.8			191.9			86.9			(188.0		)	248.6
Provision for income taxes	(3.4		)	60.0			30.5			(0.5		)	86.6
Income from continuing operations	161.2			131.9			56.4			(187.5		)	162.0
Loss from discontinued operations	—			—			(0.8		)	—			(0.8		)
Net income	$	161.2		$	131.9		$	55.6		$	(187.5	)	$	161.2
Other comprehensive income (loss), net of tax	(1.1		)	(1.8		)	(11.8		)	(1.1		)	(15.8		)
Comprehensive income	$	160.1		$	130.1		$	43.8		$	(188.6	)	$	145.4

Lennox International Inc. and Subsidiaries

Condensed Consolidating Statements of Operations and Comprehensive Income

For the Three Months Ended September 30, 2013



(Amounts in millions)	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Net Sales	$	—		$	668.4		$	221.7		$	(22.1	)	$	868.0
Cost of goods sold	—			494.5			161.7			(25.6		)	630.6
Gross profit	—			173.9			60.0			3.5			237.4
Operating expenses:
Selling, general and administrative expenses	—			107.5			29.4			—			136.9
Losses (gains) and other expenses, net	(1.7		)	2.0			(0.6		)	—			(0.3		)
Restructuring charges	—			0.1			0.2			—			0.3
Income from equity method investments	(65.5		)	(14.9		)	(2.5		)	79.6			(3.3		)
Operational income from continuing operations	67.2			79.2			33.5			(76.1		)	103.8
Interest expense, net	3.5			(0.4		)	0.7			—			3.8
Other expense, net	—			—			—			—			—
Income from continuing operations before income taxes	63.7			79.6			32.8			(76.1		)	100.0
Provision for income taxes	(0.6		)	22.7			10.7			1.4			34.2
Income from continuing operations	64.3			56.9			22.1			(77.5		)	65.8
Loss from discontinued operations	—			(1.5		)	—			—			(1.5		)
Net income	$	64.3		$	55.4		$	22.1		$	(77.5	)	$	64.3
Other comprehensive income, net of tax	4.5			0.8			3.5			0.4			9.2
Comprehensive income	$	68.8		$	56.2		$	25.6		$	(77.1	)	$	73.5

Lennox International Inc. and Subsidiaries

Condensed Consolidating Statements of Operations and Comprehensive Income

For the Nine Months Ended September 30, 2013



(Amounts in millions)	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Net Sales	$	—		$	1,984.5		$	619.3		$	(154.3	)	$	2,449.5
Cost of goods sold	—			1,473.9			474.9			(152.7		)	1,796.1
Gross profit	—			510.6			144.4			(1.6		)	653.4
Operating expenses:
Selling, general and administrative expenses	—			327.8			96.2			—			424.0
Losses and other expenses, net	0.8			2.2			—			(0.2		)	2.8
Restructuring charges	—			1.6			1.6			—			3.2
Income from equity method investments	(144.1		)	(6.0		)	(8.7		)	148.1			(10.7		)
Operational income from continuing operations	143.3			185.0			55.3			(149.5		)	234.1
Interest expense, net	10.6			(1.5		)	1.7			—			10.8
Other expense, net	—			—			(0.1		)	—			(0.1		)
Income from continuing operations before income taxes	132.7			186.5			53.7			(149.5		)	223.4
Provision for income taxes	(3.9		)	63.3			18.7			(0.6		)	77.5
Income from continuing operations	136.6			123.2			35.0			(148.9		)	145.9
Loss from discontinued operations	—			16.2			(25.5		)	—			(9.3		)
Net income	$	136.6		$	139.4		$	9.5		$	(148.9	)	$	136.6
Other comprehensive income (loss), net of tax	(3.1		)	1.9			(3.8		)	(66.6		)	(71.6		)
Comprehensive income	$	133.5		$	141.3		$	5.7		$	(215.5	)	$	65.0

Condensed Consolidating Statements of Cash Flows

Lennox International Inc. and Subsidiaries

Condensed Consolidating Statements of Cash Flows

For the Nine Months Ended September 30, 2014



(Amounts in millions)	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations		Consolidated
Cash flows from operating activities	$	13.4		$	72.1		$	(62.0	)	$	—	$	23.5
Cash flows from investing activities:
Proceeds from the disposal of property, plant and equipment	—			0.2			—			—		0.2
Purchases of property, plant and equipment	—			(45.5		)	(14.4		)	—		(59.9		)
Net proceeds from sale of business	—			—			—			—		—
Net cash used in discontinued operations	—			—			—			—		—
Net cash used in investing activities	—			(45.3		)	(14.4		)	—		(59.7		)
Cash flows from financing activities:
Short-term borrowings, net	—			—			3.4			—		3.4
Asset securitization borrowings	—			—			60.0			—		60.0
Asset securitization payments	—			—			—			—		—
Long-term debt payments	—			(1.4		)	(0.3		)	—		(1.7		)
Borrowings from revolving credit facility	1,483.0			—			—			—		1,483.0
Payments on revolving credit facility	(1,351.0		)	—			—			—		(1,351.0		)
Proceeds from employee stock purchases	1.5			—			—			—		1.5
Repurchases of common stock	(100.3		)	—			—			—		(100.3		)
Repurchases of common stock to satisfy employee withholding tax obligations	(12.3		)	—			—			—		(12.3		)
Excess tax benefits related to share-based payments	5.3			—			—			—		5.3
Intercompany debt	(12.5		)	(0.8		)	13.3			—		—
Intercompany financing activity	11.5			(17.0		)	5.5			—		—
Intercompany investments	—			(3.0		)	3.0			—		—
Cash dividends paid	(38.2		)	—			—			—		(38.2		)
Net cash provided by financing activities	(13.0		)	(22.2		)	84.9			—		49.7
Increase in cash and cash equivalents	0.4			4.6			8.5			—		13.5
Effect of exchange rates on cash and cash equivalents	—			—			(3.4		)	—		(3.4		)
Cash and cash equivalents, beginning of period	1.1			10.5			26.4			—		38.0
Cash and cash equivalents, end of period	$	1.5		$	15.1		$	31.5		$	—	$	48.1

Lennox International Inc. and Subsidiaries

Condensed Consolidating Statements of Cash Flows

For the Nine Months Ended September 30, 2013



(Amounts in millions)	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations		Consolidated
Cash flows from operating activities	$	(41.6	)	$	267.0		$	(160.4	)	$	—	$	65.0
Cash flows from investing activities:
Proceeds from the disposal of property, plant and equipment	—			0.1			—			—		0.1
Purchases of property, plant and equipment	—			(30.3		)	(10.7		)	—		(41.0		)
Net proceeds from sale of business	4.8			—			3.3			—		8.1
Net cash used in discontinued operations	—			(0.1		)	—			—		(0.1		)
Net cash used in investing activities	4.8			(30.3		)	(7.4		)	—		(32.9		)
Cash flows from financing activities:
Short-term borrowings, net	—			—			3.8			—		3.8
Asset securitization borrowings	—			—			330.0			—		330.0
Asset securitization payments	—			—			(200.0		)	—		(200.0		)
Long-term debt payments	—			(0.5		)	(0.2		)	—		(0.7		)
Borrowings from revolving credit facility	998.0			—			—			—		998.0
Payments on revolving credit facility	(1,083.5		)	—			—			—		(1,083.5		)
Proceeds from employee stock purchases	1.3			—			—			—		1.3
Repurchases of common stock	(66.0		)	—			—			—		(66.0		)
Repurchases of common stock to satisfy employee withholding tax obligations	(7.7		)	—			—			—		(7.7		)
Excess tax benefits related to share-based payments	4.7			—			—			—		4.7
Intercompany debt	(44.4		)	8.4			36.0			—		—
Intercompany financing activity	257.0			(242.7		)	(14.3		)	—		—
Cash dividends paid	(22.1		)	—			—			—		(22.1		)
Net cash used in financing activities	37.3			(234.8		)	155.3			—		(42.2		)
Decrease in cash and cash equivalents	0.5			1.9			(12.5		)	—		(10.1		)
Effect of exchange rates on cash and cash equivalents	—			—			(3.9		)	—		(3.9		)
Cash and cash equivalents, beginning of period	1.0			13.4			37.4			—		51.8
Cash and cash equivalents, end of period	$	1.5		$	15.3		$	21.0		$	—	$	37.8