10-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2014

Commission File Number 001-15149

LENNOX INTERNATIONAL INC.

(Exact name of Registrant as specified in its charter)

Delaware	42-0991521
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification Number)

2140 Lake Park Blvd.

Richardson, Texas 75080

(Address of principal executive offices, including zip code)

(Registrant's telephone number, including area code): (972) 497-5000

Securities Registered Pursuant to Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered
Common Stock, $.01 par value per share	New York Stock Exchange

Securities Registered Pursuant to Section 12(g) of the Act: None

Indicate by checkmark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes [X] No [ ]

Indicate by checkmark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act.

Yes [ ] No [X]

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the last 90 days. Yes [X] No [ ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X] No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer or a non-accelerated filer (see definition of “accelerated filer” and “large accelerated filer” in Rule 12b-2 of the Exchange Act).

Large Accelerated Filer [X] Accelerated Filer [ ] Non-Accelerated Filer [ ] Smaller Reporting Company [ ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes [ ] No [X]

As of June 30, 2014, the aggregate market value of the common stock held by non-affiliates of the registrant was approximately $4.2 billion based on the closing price of the registrant's common stock on the New York Stock Exchange. As of February 6, 2015, there were 44,676,927 shares of the registrant's common stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant's Definitive Proxy Statement to be filed with the Securities and Exchange Commission in connection with the registrant's 2015 Annual Meeting of Stockholders to be held on May 14, 2015 are incorporated by reference into Part III of this report.

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LENNOX INTERNATIONAL INC.

FORM 10-K

For the Fiscal Year Ended December 31, 2014

INDEX

		Page
PART I
ITEM 1.	Business	1
ITEM 1A.	Risk Factors	8
ITEM 1B.	Unresolved Staff Comments	12
ITEM 2.	Properties	13
ITEM 3.	Legal Proceedings	13
ITEM 4.	Mine Safety Disclosures	14
PART II
ITEM 5.	Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	14
ITEM 6.	Selected Financial Data	16
ITEM 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	17
ITEM 7A.	Quantitative and Qualitative Disclosures about Market Risk	32
ITEM 8.	Financial Statements and Supplementary Data	33
ITEM 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	88
ITEM 9A.	Controls and Procedures	88
ITEM 9B.	Other Information	88
PART III
ITEM 10.	Directors, Executive Officers and Corporate Governance	88
ITEM 11.	Executive Compensation	88
ITEM 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	88
ITEM 13.	Certain Relationships and Related Transactions, and Director Independence	89
ITEM 14.	Principal Accounting Fees and Services	89
PART IV
ITEM 15.	Exhibits and Financial Statement Schedules	89
	SIGNATURES	90
	SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES	91
	INDEX TO EXHIBITS	92

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PART I

Item 1. Business

References in this Annual Report on Form 10-K to “we,” “our,” “us,” “LII” or the “Company” refer to Lennox International Inc. and its subsidiaries, unless the context requires otherwise.

The Company

We are a leading global provider of climate control solutions and design, manufacture and market a broad range of products for the heating, ventilation, air conditioning and refrigeration (“HVACR”) markets. We have leveraged our expertise to become an industry leader known for innovation, quality and reliability. Our products and services are sold through multiple distribution channels under various brand names. The Company was founded in 1895, in Marshalltown, Iowa, by Dave Lennox, the owner of a machine repair business for railroads. He designed and patented a riveted steel coal-fired furnace, which led to numerous advancements in heating, cooling and climate control solutions.

Shown in the table below are our three business segments, the key products, services and well-known product and brand names within each segment and net sales in 2014 by segment. Segment financial data for 2014, 2013 and 2012, including financial information about foreign and domestic operations, is included in Note 19 of the Notes to our Consolidated Financial Statements in “Item 8. Financial Statements and Supplementary Data” and is incorporated herein by reference.

Segment	Products & Services	Product and Brand Names	2014 Net Sales (in millions)
Residential Heating & Cooling	Furnaces, air conditioners, heat pumps, packaged heating and cooling systems, indoor air quality equipment, comfort control products, replacement parts	Lennox, Dave Lennox Signature, Armstrong Air, Ducane, Aire-Flo, Air-Ease, Concord, Magic-Pak, ADP Advanced Distributor Products, iComfort and Lennox PartsPlus	$	1,736.5
Commercial Heating & Cooling	Unitary heating and air conditioning equipment, applied systems, controls, installation and service of commercial heating and cooling equipment	Lennox, Allied Commercial, Magic-Pak, Raider, Landmark, Prodigy, Strategos, Energence and Lennox National Account Services	878.5
Refrigeration	Condensing units, unit coolers, fluid coolers, air cooled condensers, air handlers, process chillers, controls, compressorized racks, supermarket display cases and systems	Heatcraft Worldwide Refrigeration, Bohn, Larkin, Climate Control, Chandler Refrigeration, Kysor/Warren, Friga-Bohn, HK Refrigeration, Hyfra, Kirby and Interlink	752.4
		Total	$	3,367.4

On March 22, 2013, the Company sold its Service Experts business to a majority-owned entity of American Capital, Ltd. in an all cash transaction for proceeds, excluding transaction costs, of $10.4 million. The Service Experts business had previously been reported within our Service Experts segment along with the Lennox National Account Services ("NAS") commercial services business. Beginning in the third quarter of 2012, the Service Experts business was included in discontinued operations, NAS was included in our Commercial Heating & Cooling segment, and the Service Experts reportable segment was eliminated. Segment results for all periods have been revised to reflect this new presentation.

Products and Services

Residential Heating & Cooling

Heating & Cooling Products. We manufacture and market a broad range of furnaces, air conditioners, heat pumps, packaged heating and cooling systems, comfort control products, accessories to improve indoor air quality, replacement parts and related products for both the residential replacement and new construction markets in North America. These products are available in a variety of designs and efficiency levels and at a range of price points, and are intended to provide a complete line of home comfort systems. We believe that by maintaining a broad product line marketed under multiple brand names, we can address different market segments and penetrate multiple distribution channels.

The “Lennox” and “Aire-Flo” brands are sold directly to a network of approximately 7,000 independent installing dealers,

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making us one of the largest wholesale distributors of residential heating and air conditioning products in North America. The Allied Air Enterprise brands (“Armstrong Air,” “Air-Ease,” “Concord,” “Ducane,” and “Magic-Pak”) include a full line of heating and air conditioning products and are sold through independent distributors in North America.

We are continuing to grow our network of over 160 Lennox PartsPlus stores across the United States and Canada. These stores provide an easy access solution for contractors and independent dealers to obtain universal service and replacement parts, supplies, convenience items, tools, Lennox equipment and OEM parts. 

Our Advanced Distributor Products (“ADP”) operation builds evaporator coils and air handlers under the “ADP Advanced Distributor Products” brand, as well as the “Lennox” brand. ADP sells its own ADP branded evaporator coils to over 400 HVAC wholesale distributors across North America as well as a full line of evaporator coils to Allied Air Enterprise.

Commercial Heating & Cooling

North America. In North America, we manufacture and sell unitary heating and cooling equipment used in light commercial applications, such as low-rise office buildings, restaurants, retail centers, churches and schools. Our product offerings for these applications include rooftop units ranging from 2 to 50 tons of cooling capacity and split system/air handler combinations, which range from 1.5 to 20 tons of cooling capacity. These products are distributed primarily through commercial contractors and directly to national account customers. In 2014, we launched Lennox-branded variable refrigerant flow ("VRF") commercial products through Lennox company-owned distribution. We believe the success of our products is attributable to their efficiency, design flexibility, total cost of ownership, low life-cycle cost, ease of service and advanced control technology.

National Account Services. NAS provides service and preventive maintenance for commercial HVAC national account customers in the United States and Canada.

Europe. In Europe, we manufacture and sell unitary products, which range from 2 to 70 tons of cooling capacity, and applied systems with up to 200 tons of cooling capacity. Our European products consist of small package units, rooftop units, chillers, air handlers and fan coils that serve medium-rise commercial buildings, shopping malls, other retail and entertainment buildings, institutional applications and other field-engineered applications. We manufacture heating and cooling products in several locations in Europe and market these products through both direct and indirect distribution channels in Europe, Russia, Turkey and the Middle East.

Refrigeration

We manufacture and market equipment for the global commercial refrigeration markets under the Heatcraft Worldwide Refrigeration name.  We sell these products to distributors, installing contractors, engineering design firms, original equipment manufacturers and end-users. Our global manufacturing, distribution, sales and marketing footprint serves customers in over 70 countries worldwide.

North America.  Our commercial refrigeration products for the North American market include condensing units, unit coolers, fluid coolers, air-cooled condensers, air handlers, display cases and refrigeration rack systems.  These products preserve food and other perishables in supermarkets, convenience stores, restaurants, warehouses and distribution centers.  In addition, our products are used to cool a wide variety of industrial processes, including data centers, cogeneration, machine tooling, and other critical cooling applications. We routinely provide application engineering for consulting engineers, contractors, store planners, end customers and others to support the sale of commercial refrigeration products. In addition to providing complete refrigeration systems and display cases, we also provide turnkey installations for our supermarket customers in Mexico.

International.  In international markets, we manufacture and market refrigeration products including condensing units, unit coolers, air-cooled condensers, fluid coolers, compressor racks and industrial process chillers.  We have manufacturing locations in Germany, France, Brazil and China.  In Australia and New Zealand, we are the leading wholesale distribution business serving the HVACR industry with more than 70 locations serving our customers, which also includes the sale of refrigerant. In addition, we own a 50% common stock interest in a joint venture in Mexico that produces unit coolers, air-cooled condensers, condensing units, compressors and compressor racks of the same design and quality as those manufactured by our U.S. business.  This joint venture product line is complemented with imports from the U.S., which are sold through the joint venture's distribution network.

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Business Strategy

Our business strategy is to sustain and expand our premium market position as well as offer a full spectrum of products to meet our customers' needs. We plan to expand our market position through organic growth and acquisitions while maintaining our focus on cost reductions to drive margin expansion and support growth in target business segments. This strategy is supported by the following five strategic priorities:

Innovative Product and System Solutions. In all of our markets, we are building on our heritage of innovation by developing residential, commercial, and refrigeration products that give families and business owners more precise control over more aspects of their indoor environments, while significantly lowering their energy costs.

Manufacturing and Sourcing Excellence. We maintain our commitment to manufacturing and sourcing excellence by driving low-cost assembly through rationalization of our facilities and product lines, maximizing factory efficiencies, and leveraging our purchasing power and sourcing initiatives to expand the use of lower-cost components that meet our high-quality requirements.

Distribution Excellence. By investing resources in expanding our distribution network, we are making products available to our customers in a timely, cost-efficient manner. Additionally, we provide enhanced dealer support through the use of technology, training, advertising and merchandising.

Geographic Expansion. We are growing our business by extending our successful business model and product knowledge into domestic and international markets.

Expense Reduction. Through our cost management initiatives, we are optimizing operating, manufacturing and administrative costs.

Marketing and Distribution

We utilize multiple channels of distribution and offer different brands at various price points in order to better penetrate the HVACR markets. Our products and services are sold through a combination of direct sales, distributors and company-owned parts and supplies stores. Dedicated sales forces and manufacturers' representatives are deployed across our business segments and brands in a manner designed to maximize our ability to service each distribution channel. To optimize enterprise-wide effectiveness, we have active cross-functional and cross-organizational teams coordinating approaches to pricing, product design, distribution and national account customers.

The North American residential heating and cooling market provides an example of the competitive strength of our marketing and distribution strategy. We use three distinct distribution approaches in this market: the company-owned distribution system, the independent distribution system and direct sales to end-users. We distribute our “Lennox” and “Aire-Flo” brands in a company-owned process directly to independent dealers that install these heating and cooling products. Also, we sell our products directly to customers through our Lennox PartsPlus stores. We distribute our “Armstrong Air,” “Ducane,” “Air-Ease,” “Concord,” “Magic-Pak” and “ADP Advanced Distributor Products” brands through the traditional independent distribution process pursuant to which we sell our products to distributors who, in turn, sell the products to installing contractors.

Over the years, the “Lennox” brand has become inextricably linked with “Dave Lennox,” a highly recognizable advertising icon in the heating and cooling industry. We utilize the “Dave Lennox” image in mass media advertising, as well as in numerous locally produced dealer advertisements, open houses and trade events.

Manufacturing

We operate manufacturing facilities worldwide and utilize the best available manufacturing techniques based on the needs of our businesses, including the use of lean manufacturing and Six Sigma principles. We use numerous metrics to track and manage annual efficiency improvements. Some facilities are impacted by seasonal production demand, and we manufacture both heating and cooling products in those facilities to balance production and maintain a relatively stable labor force. We may also hire temporary employees to meet changes in demand.

Strategic Sourcing

We rely on various suppliers to furnish the raw materials and components used in the manufacturing of our products. To maximize our buying effectiveness in the marketplace, our central strategic sourcing group consolidates purchases of certain materials, components and indirect items across business segments. The goal of the strategic sourcing group is to develop global

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strategies for a given component group, concentrate purchases with three to five suppliers and develop long-term relationships with these vendors. By developing these strategies and relationships, we seek to leverage our material needs to reduce costs and improve financial and operating performance. Our strategic sourcing group also works with selected suppliers to reduce costs and improve quality and delivery performance by employing lean manufacturing and Six Sigma, a disciplined, data-driven approach and methodology for improving quality.

Compressors, motors and controls constitute our most significant component purchases, while steel, copper and aluminum account for the bulk of our raw material purchases. We own equity interests in joint ventures that manufacture compressors. These joint ventures provide us with compressors for our residential, commercial and refrigeration businesses.

Research and Development and Technology

Research and development is a key pillar of our growth strategy.  We operate a global engineering and technology organization that focuses on new technology invention, product development, product quality improvements and process enhancements.  We leverage intellectual property and innovative designs across our businesses.  We also leverage product development cycle time improvements and product data management systems to commercialize new products to market more rapidly.  We use advanced, commercially available computer-aided design, computer-aided manufacturing, computational fluid dynamics and other sophisticated design tools to streamline the design and manufacturing processes. We use complex computer simulations and analyses in the conceptual design phase before functional prototypes are created.  We also operate a full line of prototype machine equipment and advanced laboratories certified by applicable industry associations. 

Seasonality

Our sales and related segment profit tend to be seasonally higher in the second and third quarters of the year because summer is the peak season for sales of air conditioning equipment and services in the U.S. and Canada. For the same reason, our working capital needs are generally greater in the first and second quarters, and we generally have higher operating cash inflows in the third and fourth quarters.

Our markets are driven by seasonal weather patterns. HVAC products and services are sold year round, but the volume and mix of product sales and service change significantly by season. The industry ships roughly twice as many units during June as it does in December. Overall, cooling equipment represents a substantial portion of the annual HVAC market. Between the heating season (roughly November through February) and cooling season (roughly May through August) are periods commonly referred to as "shoulder seasons" when the distribution channel transitions its buying patterns from one season to the next. These seasonal fluctuations in mix and volume drive our sales and related segment profit, resulting in somewhat higher sales in the second and third quarters due to the higher volume in the cooling season relative to the heating season.

Patents and Trademarks

We hold numerous patents that relate to the design and use of our products. We consider these patents important, but no single patent is material to the overall conduct of our business. We proactively obtain patents to further our strategic intellectual property objectives. We own or license several trademarks and service marks we consider important in the marketing of our products and services, and we protect our marks through national registrations and common law rights.

Competition

Substantially all markets in which we participate are competitive. The most significant competitive factors we face are product reliability, product performance, service and price, with the relative importance of these factors varying among our businesses. The following are some of the companies we view as significant competitors in each of our three business segments, with relevant brand names, when different from the company name, shown in parentheses. The marks below may be the registered or unregistered trademarks or trade names of their respective owners.

• Residential Heating & Cooling - United Technologies Corp. (Carrier, Bryant, Tempstar, Comfortmaker, Heil, Arcoaire, KeepRite, Day & Night); Ingersoll-Rand plc (Trane, American Standard); Paloma Industries, Inc. (Rheem, Ruud); Johnson Controls, Inc. (York); Daikin Industries, Ltd. (Goodman, Amana); and Nortek, Inc. (Maytag, Westinghouse, Frigidaire, Tappan, Philco, Kelvinator, Gibson, Broan, NuTone).

• Commercial Heating & Cooling - United Technologies Corp. (Carrier, ICP Commercial); Ingersoll-Rand plc (Trane); Paloma Industries, Inc. (Rheem, Ruud); Johnson Controls, Inc. (York); Daikin Industries, Ltd. (Goodman, McQuay); Nortek, Inc. (Mammoth); and AAON, Inc.

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• Refrigeration - Hussmann Corporation; Rheem Manufacturing Company (Heat Transfer Products Group); Emerson Electric Co. (Copeland); United Technologies Corp. (Carrier); GEA Group (Kuba, Searle, Goedhart); Alfa Laval; Guntner GmbH; and Panasonic Corp. (Sanyo).

Employees

As of February 6, 2015, we employed approximately 9,800 employees. Approximately 4,700 of these employees were salaried and 5,100 were hourly. The number of hourly workers we employ may vary in order to match our labor needs during periods of fluctuating demand. Approximately 2,400 employees are represented by unions. We believe we have good relationships with our employees and with the unions representing our employees. We currently do not anticipate any material adverse consequences resulting from negotiations to renew any collective bargaining agreements.

Environmental Regulation

Our operations are subject to evolving and often increasingly stringent international, federal, state and local laws and regulations concerning the environment. Environmental laws that affect or could affect our domestic operations include, among others, the National Appliance Energy Conservation Act of 1987, as amended (“NAECA”), the Energy Policy Act, the Clean Air Act, the Clean Water Act, the Resource Conservation and Recovery Act, the Comprehensive Environmental Response, Compensation and Liability Act, the National Environmental Policy Act, the Toxic Substances Control Act, any regulations promulgated under these acts and various other international, federal, state and local laws and regulations governing environmental matters. We believe we are in substantial compliance with such existing environmental laws and regulations.

Energy Efficiency. The U.S. Department of Energy published a direct final rule setting minimum efficiency standards for residential heating and cooling products. The standards for non-weatherized furnaces were to take effect in 2013, however, the direct final rule for furnace standards was vacated as the result of a negotiated settlement between the American Public Gas Association (APGA) and the Department of Energy (DOE). Standards for split cooling systems became effective January 1, 2015. We offer products that meet or exceed these new standards. The U.S. Department of Energy has numerous active rulemakings that impact residential and commercial heating, air conditioning and refrigeration equipment. We are actively involved in U.S. Department of Energy and Congressional activities related to energy efficiency standards. We believe we are prepared to have compliant products in place in advance of the effectiveness of all such regulations being considered by the U.S. Department of Energy or Congress.

Refrigerants. The use of hydrochlorofluorocarbons, “HCFCs,” and hydroflurocarbons “HFCs” as refrigerants for air conditioning and refrigeration equipment is common practice in the HVACR industry and is regulated. We believe we have complied with applicable rules and regulations in various countries governing the use of HCFCs and HFCs.  The United States Congress, Environmental Protection Agency and other international regulatory bodies are considering steps to phase down the future use of HFCs in HVACR products. We have been an active participant in the ongoing international and domestic dialogue on this subject and believe we are well positioned to react in a timely manner to any changes in the regulatory landscape.  In addition, we are taking proactive steps to implement responsible use principles and guidelines with respect to limiting refrigerants from escaping into the atmosphere throughout the life span of our HVACR equipment. 

Remediation Activity. In addition to affecting our ongoing operations, applicable environmental laws can impose obligations to remediate hazardous substances at our properties, at properties formerly owned or operated by us and at facilities to which we have sent or send waste for treatment or disposal. We are aware of contamination at some of our facilities; however, based on facts presently known, we do not believe that any future remediation costs at such facilities will be material to our results of operations. For more information, see Note 10 in the Notes to our Consolidated Financial Statements.

In the past, we have received notices that we are a potentially responsible party along with other potentially responsible parties in Superfund proceedings under the Comprehensive Environmental Response, Compensation and Liability Act for cleanup of hazardous substances at certain sites to which the potentially responsible parties are alleged to have sent waste. Based on the facts presently known, we do not believe environmental cleanup costs associated with any Superfund sites where we have received notice that we are a potentially responsible party will be material.

European WEEE and RoHS Compliance. In the European marketplace, electrical and electronic equipment is required to comply with the Directive on Waste Electrical and Electronic Equipment (“WEEE”) and the Directive on Restriction of Use of Certain Hazardous Substances (“RoHS”). WEEE aims to prevent waste by encouraging reuse and recycling and RoHS restricts the use of six hazardous substances in electrical and electronic products. All HVACR products and certain components of such products “put on the market” in the EU (whether or not manufactured in the EU) are potentially subject to WEEE and RoHS.

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Because all HVACR manufacturers selling within or from the EU are subject to the standards promulgated under WEEE and RoHS, we believe that neither WEEE nor RoHS uniquely impact us as compared to such other manufacturers. Similar directives are being introduced in other parts of the world, including the U.S. For example, California, China and Japan have all adopted standards possessing similar intent as RoHS. We are actively monitoring the development of such directives and believe we are well positioned to comply with such directives in the required time frames.

Available Information

Our web site address is www.lennoxinternational.com. We make available, free of charge through our web site, our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as soon as reasonably possible after such material is electronically filed with, or furnished to, the Securities and Exchange Commission. The information on our web site is not a part of, or incorporated by reference into, this annual report on Form 10-K.

You can also read and copy any document that we file, including this Annual Report on Form 10-K, at the Securities and Exchange Commission's Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. Call the Securities and Exchange Commission at 1-800-SEC-0330 for information on the operation of the Public Reference Room. In addition, the Securities and Exchange Commission maintains an Internet site at www.sec.gov that contains reports, proxy and information statements, and other information regarding issuers, including Lennox International, that file electronically with the Securities and Exchange Commission.

Executive Officers of the Company

Our executive officers, their present positions and their ages are as follows as of February 6, 2015:

Name	Age	Position
Todd M. Bluedorn	51	Chairman of the Board and Chief Executive Officer
Joseph W. Reitmeier	50	Executive Vice President and Chief Financial Officer
Douglas L. Young	52	Executive Vice President and President and Chief Operating Officer, LII Residential Heating & Cooling
Terry L. Johnston	57	Executive Vice President and President and Chief Operating Officer, LII North America Commercial Heating & Cooling
David W. Moon	53	Executive Vice President and President and Chief Operating Officer, LII Worldwide Refrigeration
Prakash Bedapudi	48	Executive Vice President and Chief Technology Officer
Daniel M. Sessa	50	Executive Vice President and Chief Human Resources Officer
John D. Torres	56	Executive Vice President, Chief Legal Officer and Secretary
Roy A. Rumbough, Jr.	59	Vice President, Controller and Chief Accounting Officer

Todd M. Bluedorn became Chief Executive Officer and was elected to our Board of Directors in April 2007. Mr. Bluedorn was elected Chairman of the Board of Directors in May 2012. Prior to joining the company, Mr. Bluedorn served in numerous senior management positions for United Technologies since 1995, including President, Americas - Otis Elevator Company; President, North America - Commercial Heating, Ventilation and Air Conditioning for Carrier Corporation; and President, Hamilton Sundstrand Industrial. He began his professional career with McKinsey & Company in 1992. A graduate of the United States Military Academy at West Point with a B.S. in electrical engineering, Mr. Bluedorn served in the United States Army as a combat engineer officer and United States Army Ranger from 1985 to 1990. He received his MBA from Harvard University School of Business in 1992. Mr. Bluedorn also serves on the Board of Directors of Eaton Corporation and on the Board of Trustees of Washington University in St. Louis.

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Joseph W. Reitmeier was appointed Executive Vice President and Chief Financial Officer in July 2012. He had previously served as Vice President of Finance for the Lennox Commercial business segment since 2007. Mr. Reitmeier first joined LII in 2005 and served as Director of Internal Audit. Before joining LII, Mr. Reitmeier held financial leadership roles at Cummins Inc. and PolyOne Corporation. He holds a BSA in Accounting from the University of Akron and an MBA from Case Western Reserve University.

Douglas L. Young was appointed Executive Vice President and President and Chief Operating Officer of LII's Residential Heating & Cooling segment in October 2006. Mr. Young had previously served as Vice President and General Manager of North American Residential Products since 2003 and as Vice President and General Manager of Lennox North American Residential Sales, Marketing, and Distribution from 1999 to 2003. Prior to his career with LII, Mr. Young was employed in the Appliances division of GE, where he held various management positions before serving as General Manager of Marketing for GE Appliance division's retail group from 1997 to 1999 and as General Manager of Strategic Initiatives in 1999. He holds a BSBA from Creighton University and an MS in Management from Purdue University. Mr. Young serves on the Board of Directors of Beacon Roofing Supply, a distributor of roofing materials and complementary building products.

Terry L. Johnston was appointed Executive Vice President and President and Chief Operating Officer of LII's North America Commercial Heating & Cooling segment in January 2013. He had previously served as Vice President and General Manager of LII's North America commercial equipment business, and before that, held marketing leadership roles in LII's residential and commercial businesses. Prior to joining LII in 2001, Mr. Johnston spent 20 years at General Electric Company in a variety of product management and sales and marketing roles. He holds a BS in Marketing from the University of Arkansas.

David W. Moon was appointed Executive Vice President and President and Chief Operating Officer of LII's Worldwide Refrigeration segment in August 2006. Mr. Moon had previously served as Vice President and General Manager of Worldwide Refrigeration, Americas Operations since 2002. Prior to serving in that position, he served as Managing Director in Australia beginning in 1999, where his responsibilities included heat transfer manufacturing and distribution, refrigeration wholesaling and manufacturing, and HVAC manufacturing and distribution in Australia and New Zealand. Mr. Moon originally joined LII in 1998 as Operations Director, Asia Pacific. Prior to that time, Mr. Moon held various management positions at Allied Signal, Inc., Case Corporation, and Tenneco Inc. in the United States, Hong Kong, Taiwan and Germany. He holds a BS in Civil Engineering and an MBA from Texas A&M University.

Prakash Bedapudi became Executive Vice President and Chief Technology Officer in July 2008. He had previously served as vice president, global engineering and program management for Trane Inc. Commercial Systems from 2006 through 2008, and as vice president, engineering and technology for Trane's Residential Systems division from 2003 through 2006. Prior to his career at Trane, Mr. Bedapudi served in senior engineering leadership positions for GE Transportation Systems, a division of General Electric Company, and for Cummins Engine Company. He holds a BS in Mechanical/Automotive Engineering from Karnataka University, India and an MS in Mechanical/Aeronautical Engineering from the University of Cincinnati.

Daniel M. Sessa was appointed Executive Vice President and Chief Human Resources Officer in June 2007. Mr. Sessa previously served in numerous senior human resources and legal leadership positions for United Technologies Corporation since 1996, including Vice President, Human Resources for Otis Elevator Company - Americas from 2005 to 2007, Director, Employee Benefits and Human Resources Systems for United Technologies Corporation from 2004 to 2005, and Director, Human Resources for Pratt & Whitney from 2002 to 2004. He holds a JD from the Hofstra University School of Law and a BA in Law & Society from the State University of New York at Binghamton.

John D. Torres was appointed Executive Vice President and Chief Legal Officer in December 2008. He had previously served as Senior Vice President, General Counsel and Secretary for Freescale Semiconductor, a semiconductor manufacturer that was originally part of Motorola. He joined Motorola's legal department as Senior Counsel in 1996 and was appointed Vice President, General Counsel of the company's semiconductor business in 2001. Prior to joining Motorola, Mr. Torres served 13 years in private practice in Phoenix, specializing in commercial law. He holds a BA from Notre Dame and a JD from the University of Chicago.

Roy A. Rumbough, Jr. was appointed Vice President, Controller and Chief Accounting Officer in July 2006. He had previously served as Vice President, Corporate Controller of Maytag Corporation, a position he held since 2002. From 1998 to 2002, he served as Vice President, Controller of Blodgett Corporation, a portfolio of food service equipment companies and former affiliate of Maytag. Mr. Rumbough's career at Maytag spanned 17 years and included internal audit, financial planning and analysis, and business unit controller roles. Prior to his career at Maytag, he worked for Deloitte and Touche, LLP. He holds a BA in Accounting from North Carolina State University and an MBA from the Kellogg School of Management, Northwestern University.

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Item 1A. Risk Factors

Forward-Looking Statements

This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act that are based on information currently available to management as well as management's assumptions and beliefs. All statements, other than statements of historical fact, included in this Annual Report on Form 10-K constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including but not limited to statements identified by the words “may,” “will,” “should,” “plan,” “predict,” “anticipate,” “believe,” “intend,” “estimate” and “expect” and similar expressions. Such statements reflect our current views with respect to future events, based on what we believe are reasonable assumptions; however, such statements are subject to certain risks and uncertainties. In addition to the specific uncertainties discussed elsewhere in this Annual Report on Form 10-K, the risk factors set forth in Item 1A. Risk Factors in this Annual Report on Form 10-K may affect our performance and results of operations. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may differ materially from those in the forward-looking statements. We disclaim any intention or obligation to update or review any forward-looking statements or information, whether as a result of new information, future events or otherwise unless required by law.

Risk Factors

The following risk factors and other information included in this Annual Report on Form 10-K should be carefully considered. We believe these are the principal material risks currently facing our business; however, additional risks and uncertainties not presently known to us or that we presently deem less significant may also impair our business operations. If any of the following risks or those disclosed in our other SEC filings actually occur, our business, financial condition or results of operations could be materially adversely affected.

We May Not be Able to Compete Favorably in the Competitive HVACR Business.

Substantially all of the markets in which we operate are competitive. The most significant competitive factors we face are product reliability, product performance, reputation of our company and brands, service and price, with the relative importance of these factors varying among our product lines. Other factors that affect competition in the HVACR market include the development and application of new technologies, an increasing emphasis on the development of more efficient HVACR products and new product introductions. We may not be able to adapt to market changes as quickly or effectively as our current and future competitors. Also, the establishment of manufacturing operations in low-cost countries could provide cost advantages to existing and emerging competitors. Some of our competitors may have greater financial resources than we have, allowing them to invest in more extensive research and development and/or marketing activity and making them better able to withstand adverse HVACR market conditions. Current and future competitive pressures may cause us to reduce our prices or lose market share, or could negatively affect our cash flow, all of which could have an adverse effect on our results of operations.

Our Financial Performance Is Affected by the Conditions of the U.S. Construction Industry.

Our business is affected by the performance of the U.S. construction industry. Our sales in the residential and commercial new construction market correlate to the number of new homes and buildings that are built, which in turn is influenced by cyclical factors such as interest rates, inflation, availability of financing, consumer spending habits and confidence, employment rates and other macroeconomic factors over which we have no control. Although the industry has improved for the last several years, our sales may not continue to improve or such improvement may be limited or lower than expected.

Cooler than Normal Summers and Warmer than Normal Winters May Depress Our Sales.

Demand for our products and for our services is seasonal and strongly affected by the weather. Cooler than normal summers depress our sales of replacement air conditioning and refrigeration products and services. Similarly, warmer than normal winters have the same effect on our heating products and services.

Changes in Legislation or Government Regulations or Policies Can Have a Significant Impact on Our Results of Operations.

The sales, gross margins and profitability for each of our segments could be directly impacted by changes in legislation or government regulations. Changes in environmental and energy efficiency standards and regulations, in particular, may have a significant impact on the types of products that we are allowed to develop and sell, and the types of products that are developed and sold by our competitors. Our inability or delay in developing or marketing products that match customer demand and that

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meet applicable efficiency and environmental standards may negatively impact our results. For example, the U.S. Department of Energy vacated certain regional efficiency standards for furnaces scheduled to take effect in May 2013, which delayed several expected changes to efficiency standards until November 2015. The demand for our products and services could also be affected by the size and availability of tax incentives for purchasers of our products and services. Future legislation or regulations, including environmental matters, product certification, product liability, taxes, tax incentives and other matters, may impact the results of each of our operating segments and our consolidated results.

Global General Business, Economic and Market Conditions Could Adversely Affect Our Financial Performance and Limit our Access to the Capital Markets.

Future disruptions in U.S. or global financial and credit markets or increases in the costs of capital might have an adverse impact on our business.  The tightening, unavailability or increased costs of credit adversely affects the ability of our customers to obtain financing for significant purchases and operations, which could result in a decrease in sales of our products and services and may impact the ability of our customers to make payments to us. Similarly, tightening of credit may adversely affect our supplier base and increase the potential for one or more of our suppliers to experience financial distress or bankruptcy. Our business may also be adversely affected by future decreases in the general level of economic activity and increases in borrowing costs, which may cause our customers to cancel, decrease or delay their purchases of our products and services. 

If financial markets were to deteriorate, or costs of capital were to increase significantly due to a lowering of our credit ratings, prevailing industry conditions, the volatility of the capital markets or other factors, we may be unable to obtain new financing on acceptable terms, or at all. A deterioration in our financial performance could also limit our future ability to access amounts currently available under our domestic credit facility.  In addition, availability under our asset securitization agreement may be adversely impacted by credit quality and performance of our customer accounts receivable. The availability under our asset securitization agreement is based on the amount of accounts receivable that meet the eligibility criteria of the asset securitization agreement.  If receivable losses increase or credit quality deteriorates, the amount of eligible receivables could decline and, in turn, lower the availability under the asset securitization.

We cannot predict the likelihood, duration or severity of any future disruption in financial markets or any adverse economic conditions in the U.S. and other countries.

Our International Operations Subject Us to Risks Including Foreign Currency Fluctuations, Regulations and Other Risks.

We earn revenue, pay expenses, own assets and incur liabilities in countries using currencies other than the U.S. dollar. Our consolidated financial statements are presented in U.S. dollars and we translate revenue, income, expenses, assets and liabilities into U.S. dollars at exchange rates in effect during or at the end of each reporting period. Therefore, increases or decreases in the value of the U.S. dollar relative to other currencies may affect our net operating revenues, operating income and the value of balance sheet items denominated in foreign currencies. Because of the geographic diversity of our operations, weaknesses in some currencies might be offset by strengths in others over time. However, we cannot assure that fluctuations in foreign currency exchange rates, particularly the strengthening of the U.S. dollar against major currencies, would not materially affect our financial results.

In addition to the currency exchange risks inherent in operating in foreign countries, our international sales and operations, including purchases of raw materials from international suppliers, are subject to risks associated with local government laws, regulations and policies (including those related to tariffs and trade barriers, investments, taxation, exchange controls, employment regulations and changes in laws and regulations). Our international sales and operations are also sensitive to changes in foreign national priorities, including government budgets, as well as to geopolitical and economic instability. International transactions may involve increased financial and legal risks due to differing legal systems and customs in foreign countries, as well as compliance with anti-corruption laws such as the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act. The ability to manage these risks could be difficult and may limit our operations and make the manufacture and sale of our products internationally more difficult, which could negatively affect our business and results of operations.

Conflicts, wars, natural disasters or terrorist acts could also cause significant damage or disruption to our operations, employees, facilities, systems, suppliers, distributors, resellers or customers in the United States and internationally for extended periods of time and could also affect demand for our products.

Net sales outside of the United States comprised 23.5% of our net sales in 2014.

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Our Ability to Meet Customer Demand may be Limited by Our Single-Location Production Facilities, Reliance on Certain Key Suppliers and Unanticipated Significant Shifts in Customer Demand.

We manufacture many of our products at single-location production facilities, and we rely on certain suppliers who also may concentrate production in single locations. Any significant interruptions in production at one or more of our facilities, or at a facility of one of our suppliers, could negatively impact our ability to deliver our products to our customers. Further, even with all of our facilities running at full production, we could potentially be unable to fully meet demand during an unanticipated period of exceptionally high demand. Our inability to meet our customers' demand for our products could have a material adverse impact on our business, financial condition and results of operations.

Price Volatility for Commodities and Components We Purchase or Significant Supply Interruptions Could Have an Adverse Effect on Our Cash Flow or Results of Operations.

We depend on raw materials, such as steel, copper and aluminum, and components purchased from third parties to manufacture our products. We generally concentrate purchases for a given raw material or component with a small number of suppliers. If a supplier is unable or unwilling to meet our supply requirements, including suffering any disruptions at its facilities or in its supply chain, we could experience supply interruptions or cost increases, either of which could have an adverse effect on our results of operations. Similarly, suppliers of components that we purchase for use in our products may be affected by rising material costs and pass these increased costs on to us. Although we regularly pre-purchase a portion of our raw materials at fixed prices each year to hedge against price increases, an increase in raw materials prices not covered by our fixed price arrangements could significantly increase our cost of goods sold and negatively impact our margins if we are unable to effectively pass such price increases on to our customers. Alternatively, if we increase our prices in response to increases in the prices or quantities of raw materials or components or if we encounter significant supply interruptions, our competitive position could be adversely affected, which may result in depressed sales and profitability.

In addition, we use derivatives to hedge price risk associated with forecasted purchases of certain raw materials.  Our hedged prices could result in paying higher or lower prices for commodities as compared to the market prices for those commodities when purchased. 

We May Incur Substantial Costs as a Result of Claims Which Could Have an Adverse Effect on Our Results of Operations.

The development, manufacture, sale and use of our products involve warranty, intellectual property infringement, product liability claim and other risks. In some cases, we may incur liability claims for the installation and service of our products. Our product liability insurance policies have limits that, if exceeded, may result in substantial costs that would have an adverse effect on our results of operations. In addition, warranty claims are not covered by our product liability insurance and certain product liability claims may also not be covered by our product liability insurance.

For some of our HVAC products, we provide warranty terms ranging from one to 20 years to customers for certain components such as compressors or heat exchangers. For certain limited products, we provided lifetime warranties for heat exchangers. Warranties of such extended lengths pose a risk to us as actual future costs may exceed our current estimates of those costs. Warranty expense is recorded on the date that revenue is recognized and requires significant assumptions about what costs will be incurred in the future. We may be required to record material adjustments to accruals and expense in the future if actual costs for these warranties are different from our assumptions.

If We Cannot Successfully Execute our Business Strategy, Our Results of Operations Could be Adversely Impacted

Our future success depends on our continued investment in research and new product development as well as our ability to commercialize new HVACR technological advances in domestic and global markets. If we are unable to continue to timely and successfully develop and market new products, achieve technological advances or extend our business model and technological advances into international markets, our business and results of operations could be adversely impacted.

We are engaged in various manufacturing rationalization actions designed to achieve our strategic priorities of manufacturing sourcing and distribution excellence and of lowering our cost structure. For example, we are continuing to reorganize our North American distribution network in order to better serve our customers' needs by deploying parts and equipment inventory closer to them and are expanding our sourcing activities outside of the U.S. We also continue to rationalize and reorganize various support and administrative functions in order to reduce ongoing selling and administrative expenses. If we cannot successfully implement such distribution and restructuring strategies or other cost savings plans, we may not achieve our expected cost savings in the time anticipated, or at all. In such case, our results of operations and profitability may be negatively impacted, making us less competitive and potentially causing us to lose market share.

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We May Not be Able to Successfully Integrate and Operate Businesses that We May Acquire nor Realize the Anticipated Benefits of Strategic Relationships We May Form.

From time to time, we may seek to complement or expand our businesses through strategic acquisitions, joint ventures and strategic relationships. The success of these transactions will depend, in part, on our ability to timely identify those relationships, negotiate and close the transactions and then integrate, manage and operate those businesses profitably. If we are unable to successfully do those things, we may not realize the anticipated benefits associated with such transactions, which could adversely affect our business and results of operations.

Because a Significant Percentage of Our Workforce is Unionized in Certain Manufacturing Facilities, We Face Risks of Work Stoppages and Other Labor Relations Problems.

As of February 7, 2014, approximately 24% of our workforce was unionized. The results of future negotiations with these unions and the effects of any production interruptions or labor stoppages could have an adverse effect on our results of operations.

We are Subject to Litigation and Tax, Environmental and Other Regulations that Could Have an Adverse Effect on Our Results of Operations.

We are involved in various claims and lawsuits incidental to our business, including those involving product liability, labor relations, alleged exposure to asbestos-containing materials and environmental matters, some of which claim significant damages. Estimates related to our claims and lawsuits, including estimates for asbestos-related claims and related insurance recoveries, involve numerous uncertainties. Given the inherent uncertainty of litigation and estimating, we cannot be certain that existing claims or litigation or any future adverse legal developments will not have a material adverse impact on our financial condition. In addition, we are subject to extensive and changing federal, state and local laws and regulations designed to protect the environment. These laws and regulations could impose liability for remediation costs and civil or criminal penalties in cases of non-compliance. Compliance with environmental laws increases our costs of doing business. Because these laws are subject to frequent change, we are unable to predict the future costs resulting from environmental compliance.

Any Future Determination that a Significant Impairment of the Value of Our Goodwill Intangible Asset Occurred Could Have a Material Adverse Effect on Our Results of Operations.

As of December 31, 2014, we had goodwill of $209.4 million on our Consolidated Balance Sheet. Any future determination that an impairment of the value of goodwill occurred would require a write-down of the impaired portion of goodwill to fair value and would reduce our assets and stockholders' equity and could have a material adverse effect on our results of operations.

Volatility in Capital Markets Could Necessitate Increased Cash Contributions by Us to Our Pension Plans to Maintain Required Levels of Funding.

Volatility in the capital markets may have a significant impact on the funding status of our defined benefit pension plans. If the performance of the capital markets depresses the value of our defined benefit pension plan assets or increases the liabilities, we would be required to make additional contributions to the pension plans. The amount of contributions we may be required to make to our pension plans in the future is uncertain and could be significant, which may have a material impact on our results of operations.

Security breaches and other disruptions or misuse of information systems we rely upon could affect our ability to conduct our business effectively.

Our information systems and those of our business partners are important to our business activities. We also outsource various information systems, including data management, to third party service providers. Despite our security measures as well as those of our business partners and third-party service providers, the information systems we rely upon may be vulnerable to interruption or damage from computer hackings, computer viruses, worms or other destructive or disruptive software, process breakdowns, denial of service attacks, malicious social engineering or other malicious activities, or any combination thereof. These information systems have been, and will likely continue to be, subject to attack. While we have implemented controls and taken other preventative actions to strengthen these systems against future attacks, we can give no assurance that these controls and preventative actions will be effective. Any breach of data security could result in a disruption of our services or improper disclosure of personal data or confidential information, which could harm our reputation, require us to expend resources to remedy such a security breach or defend against further attacks or subject us to liability under laws that protect personal data, resulting in increased operating costs or loss of revenue.

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Our results of operations may suffer if we cannot continue to license or enforce the intellectual property rights on which our businesses depend or if third parties assert that we violate their intellectual property rights.

We rely upon patent, copyright, trademark and trade secret laws and agreements to establish and maintain intellectual property rights in the products we sell. Our intellectual property rights could be challenged, invalidated, infringed, circumvented, or be insufficient to permit us to take advantage of current market trends or to otherwise provide competitive advantages. Further, the laws of certain countries do not protect proprietary rights to the same extent as the laws of the United States.

Third parties may also claim that we are infringing upon their intellectual property rights. If we do not license infringed intellectual property or if we are required to substitute similar technology from another source, our operations could be adversely affected. Even if we believe that intellectual property claims are without merit, they can be time consuming, require significant resources and be costly to defend. Claims of intellectual property infringement also might require us to redesign affected products, pay costly damage awards, or face injunction prohibiting us from manufacturing, importing, marketing or selling certain of our products. Even if we have agreements to indemnify us, indemnifying parties may be unable or unwilling to do so.

Item 1B. Unresolved Staff Comments

None.

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Item 2. Properties

The following chart lists our principal domestic and international manufacturing, distribution and office facilities as of February 6, 2015 and indicates the business segment that uses such facilities, the approximate size of such facilities and whether such facilities are owned or leased. Also included in the chart are large warehouses that hold significant inventory balances.

Location	Segment	Type or Use of Facility	Approx. Sq. Ft. (In thousands)	Owned/Leased
Marshalltown, IA	Residential Heating & Cooling	Manufacturing & Distribution	1,300	Owned & Leased
Orangeburg, SC	Residential Heating & Cooling	Manufacturing & Distribution	750	Owned & Leased
Grenada, MS	Residential Heating & Cooling	Manufacturing & Distribution	400	Leased
Saltillo, Mexico	Residential Heating & Cooling	Manufacturing	687	Owned
Columbus, OH	Residential Heating & Cooling	Distribution	278	Leased
McDonough, GA	Residential Heating & Cooling	Distribution	254	Leased
Romeoville, IL	Residential Heating & Cooling	Distribution	360	Leased
Brampton, Canada	Residential & Commercial Heating & Cooling	Distribution	129	Leased
Calgary, Canada	Residential & Commercial Heating & Cooling	Distribution	110	Leased
Lenexa, KS	Residential & Commercial Heating & Cooling	Distribution	115	Leased
Carrollton, TX	Residential & Commercial Heating & Cooling	Distribution	252	Leased
Houston, TX	Residential & Commercial Heating & Cooling	Distribution	49	Leased
Orlando, FL	Residential & Commercial Heating & Cooling	Distribution	52	Leased
Eastvale, CA	Residential & Commercial Heating & Cooling	Distribution	377	Leased
Middletown, PA	Residential & Commercial Heating & Cooling	Distribution	160	Leased
Stuttgart, AR	Commercial Heating & Cooling	Manufacturing	800	Owned
Longvic, France	Commercial Heating & Cooling	Manufacturing	149	Owned
Burgos, Spain	Commercial Heating & Cooling & Refrigeration	Manufacturing	130	Owned
Genas, France	Commercial Heating & Cooling & Refrigeration	Manufacturing, Distribution & Offices	190	Owned
Mions, France	Commercial Heating & Cooling & Refrigeration	Research & Development	129	Owned
Tifton, GA	Refrigeration	Manufacturing	570	Owned & Leased
Stone Mountain, GA	Refrigeration	Manufacturing & Business Unit Headquarters	120	Owned
Columbus, GA	Refrigeration	Manufacturing, Warehousing & Offices	679	Owned & Leased
Midland, GA	Refrigeration	Warehousing & Offices	138	Leased
Milperra, Australia	Refrigeration	Business Unit Headquarters & Distribution	415	Owned
Mt. Wellington, New Zealand	Refrigeration	Distribution & Offices	110	Owned
San Jose dos Campos, Brazil	Refrigeration	Manufacturing, Warehousing & Offices	150	Owned
Krunkel, Germany	Refrigeration	Manufacturing, Distribution & Offices	52	Owned
Wuxi, China	Refrigeration	Manufacturing	142	Owned & Leased
Carrollton, TX	Corporate and other	Research & Development	294	Owned
Richardson, TX	Corporate and other	Corporate Headquarters	375	Owned & Leased

In addition to the properties described above, we lease numerous facilities in the U.S. and worldwide for use as sales offices, service offices and district and regional warehouses. We routinely evaluate our facilities to ensure adequate capacity, effective cost structure, and consistency with our business strategy. We believe that our properties are in good condition, suitable and adequate for their present requirements and that our principal manufacturing plants are generally adequate to meet our production needs.

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Item 3. Legal Proceedings

We are involved in a number of claims and lawsuits incident to the operation of our businesses. Insurance coverages are maintained and estimated costs are recorded for such claims and lawsuits. It is management's opinion that none of these claims or lawsuits will have a material adverse effect, individually or in the aggregate, on our financial position, results of operations or cash flows. For more information, see Note 10 in the Notes to the Consolidated Financial Statements.

Item 4. Mine Safety Disclosures

Not applicable.

PART II

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market Price for Common Stock

Our common stock is listed for trading on the New York Stock Exchange under the symbol “LII.” The high and low sales prices for our common stock for each quarterly period during 2014 and 2013 were as follows:

	Price Range per Common Share
	2014				2013
	High		Low		High		Low
First Quarter	$	94.69	$	82.67	$	65.50	$	53.77
Second Quarter	93.82		81.88		65.96		59.26
Third Quarter	91.98		76.65		75.77		64.63
Fourth Quarter	96.72		72.91		86.14		70.05

Dividends

During 2014 and 2013, we declared quarterly cash dividends as set forth below:

	Dividends per Common Share
	2014		2013
First Quarter	$	0.24	$	0.20
Second Quarter	0.30		0.24
Third Quarter	0.30		0.24
Fourth Quarter	0.30		0.24
Fiscal Year	$	1.14	$	0.92

The amount and timing of dividend payments are determined by our Board of Directors and subject to certain restrictions under our domestic revolving credit facility.

Holders of Common Stock

As of the close of business on February 6, 2015, approximately 840 holders of record held our common stock.

Comparison of Total Stockholder Return

The following graph compares the cumulative total returns of LII's common stock with the cumulative total returns of the Standards & Poor's Midcap 400 Index, a broad index of mid-size U.S. companies of which the Company is a part, and with a peer group of U.S. industrial manufacturing and service companies in the HVACR businesses. The graph assumes that $100 was

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invested on December 31, 2009, with dividends reinvested. Our peer group includes AAON, Inc., Ingersoll-Rand plc, Comfort Systems USA, Inc., United Technologies Corporation, Johnson Controls Inc., and Watsco, Inc. Peer group returns are weighted by market capitalization.

This performance graph and other information furnished under this Comparison of Total Stockholder Return section shall not be deemed to be “soliciting material” or to be “filed” with the Securities and Exchange Commission or subject to Regulation 14A or 14C, or to the liabilities of Section 18 of the Exchange Act.

Our Purchases of LII Equity Securities

Our Board of Directors has authorized a total of $1.4 billion towards the repurchase of shares of our common stock (collectively referred to as the "Share Repurchase Plans"), including a $700.0 million share repurchase authorization in October 2014. The Share Repurchase Plans authorize open market repurchase transactions and do not have a stated expiration date.

In the fourth quarter of 2014, we purchased shares of our common stock as follows:

	Total Shares Purchased (1)	Average Price Paid per Share (including fees)		Shares Purchased As Part of Publicly Announced Plans	Approximate Dollar Value of Shares that may yet be Purchased Under the Plans (in millions) (3)
October 1 through October 31 (2)	3,644,030	$	86.86	3,626,526	$	395.9
November 1 through November 30	5,388	91.97		—	395.9
December 1 through December 31	84,923	95.24		—	395.9
	3,734,341			3,626,526

⁽¹⁾ Includes the surrender to LII of 107,815 shares of common stock to satisfy employee tax-withholding obligations in connection with the exercise of vested stock appreciation rights and the vesting of restricted stock units.

⁽²⁾ Excludes final settlement of shares repurchased in Accelerated Share Repurchase Plan (ASR) executed in the fourth quarter of 2014. Final settlement is expected in the second half of 2015.

⁽³⁾ After consideration of total payment of $450 million for Accelerated Share Repurchase Plan (ASR) executed in the fourth quarter of 2014. Final settlement is expected in the second half of 2015.

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Item 6. Selected Financial Data

The following table presents selected financial data for each of the five years ended December 31, 2010 to 2014 (in millions, except per share data):

	For the Years Ended December 31,
	2014		2013		2012		2011		2010
Statements of Operations Data:
Net Sales	$	3,367.4	$	3,199.1	$	2,949.4	$	2,840.9	$	2,585.2
Operational Income From Continuing Operations	334.7		289.0		219.1		184.4		204.5
Income From Continuing Operations	208.1		179.9		135.0		111.5		125.9
Net Income	205.8		171.8		90.0		88.3		116.2
Basic Earnings Per Share From Continuing Operations	4.35		3.61		2.66		2.12		2.31
Diluted Earnings Per Share From Continuing Operations	4.28		3.55		2.63		2.09		2.26
Cash Dividends Declared Per Share	1.14		0.92		0.76		0.72		0.60
Other Data:
Capital Expenditures (1)	$	88.4	$	78.3	$	50.2	$	41.4	$	43.1
Research and Development Expenses (1)	60.7		53.7		49.5		47.0		46.4
Balance Sheet Data at Period End:
Total Assets	$	1,764.3	$	1,626.7	$	1,691.9	$	1,705.7	$	1,692.0
Total Debt	925.6		400.4		386.6		465.1		319.0
Stockholders' Equity	9.0		485.7		498.3		467.8		589.7

⁽¹⁾ Amounts exclude capital expenditures and research and development expenses related to discontinued operations.

Information in the table above is not necessarily indicative of results of future operations. To understand the factors that may affect comparability, the financial data should be read in conjunction with Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations," and the Consolidated Financial Statements and the related Notes to the Consolidated Financial Statements in Item 8, "Financial Statements and Supplementary Data," of this Form 10-K.

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Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with the other sections of this report, including the consolidated financial statements and related notes contained in Item 8 of this Annual Report on Form 10-K.

Business Overview

We operate in three reportable business segments of the heating, ventilation, air conditioning and refrigeration (“HVACR”) industry. Our reportable segments are Residential Heating & Cooling, Commercial Heating & Cooling, and Refrigeration. For more detailed information regarding our reportable segments, see Note 19 in the Notes to the Consolidated Financial Statements.

We sell our products and services through a combination of direct sales, distributors and company-owned parts and supplies stores.The demand for our products and services is seasonal and significantly impacted by the weather. Warmer than normal summer temperatures generate demand for replacement air conditioning and refrigeration products and services, and colder than normal winter temperatures have a similar effect on heating products and services. Conversely, cooler than normal summers and warmer than normal winters depress the demand for HVACR products and services. In addition to weather, demand for our products and services is influenced by national and regional economic and demographic factors, such as interest rates, the availability of financing, regional population and employment trends, new construction, general economic conditions and consumer spending habits and confidence. A substantial portion of the sales in each of our business segments is attributable to replacement business, with the balance comprised of new construction business.

The principal elements of cost of goods sold are components, raw materials, factory overhead, labor, estimated costs of warranty expense and freight and distribution costs. The principal raw materials used in our manufacturing processes are steel, copper and aluminum. In recent years, pricing volatility for these commodities and related components has impacted us and the HVACR industry in general. We seek to mitigate the impact of higher commodity prices through a combination of price increases, commodity contracts, improved production efficiency and cost reduction initiatives. We also partially mitigate volatility in the prices of these commodities by entering into futures contracts and fixed forward contracts.

Financial Highlights

• Net sales increased $168 million, or 5%, to $3,367 million in 2014 from $3,199 million in 2013.

• Operational income from continuing operations in 2014 was $335 million compared to $289 million in 2013. The increase was primarily due to higher volumes, higher margins from improved price and material cost savings.

• Net income in 2014 increased to $206 million from $172 million in 2013.

• Diluted earnings per share from continuing operations were $4.28 per share in 2014 compared to $3.55 per share in 2013.

• We generated $185 million of cash flow from operating activities in 2014 compared to $210 million in 2013.

• In 2014, we returned $550 million to shareholders through share repurchases and $53 million through dividend payments.

Overview of Results

The Residential Heating & Cooling segment led our overall financial performance in 2014, with a 10% increase in net sales and a $56 million increase in segment profit compared to 2013. This segment's results benefited from industry growth in the replacement and new construction markets as well as market share gains. Our Commercial Heating & Cooling segment also performed well in 2014 with a 4% increase in net sales and a $6 million increase in segment profit compared to 2013. This segment's results benefited from market share gains, market growth in North America and material cost savings. Sales in our Refrigeration segment were down 3% and segment profit decreased $35 million compared to 2013. This segment's results were impacted by unfavorable mix, unfavorable Australian dollar exchange rates, increased investments in growth initiatives, and decreased profitability of our refrigerant business in Australia due to the repeal of the carbon tax.

On a consolidated basis, our gross profit margins were relatively flat at 26.8% in 2014 due primarily to favorable price and material cost savings across all of our segments. These improvements were offset by unfavorable foreign exchange rates, continued investment in distribution expansion across all segments, unfavorable mix in the Refrigeration and Commercial Heating & Cooling segments, and reduced profitability in our Australian wholesale business due to the repeal of the carbon tax.

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Results of Operations

The following table provides a summary of our financial results, including information presented as a percentage of net sales (dollars in millions):

	For the Years Ended December 31,
	2014					2013					2012
	Dollars			Percent		Dollars			Percent		Dollars			Percent
Net sales	$	3,367.4		100.0	%	$	3,199.1		100.0	%	$	2,949.4		100.0	%
Cost of goods sold	2,464.1			73.2	%	2,337.9			73.1	%	2,227.1			75.5	%
Gross profit	903.3			26.8	%	861.2			26.9	%	722.3			24.5	%
Selling, general and administrative expenses	573.7			17.0	%	570.1			17.8	%	507.0			17.2	%
Losses and other expenses, net	6.8			0.2	%	9.3			0.3	%	2.5			0.1	%
Restructuring charges	1.9			0.1	%	5.0			0.2	%	4.2			0.1	%
Income from equity method investments	(13.8		)	(0.4	)%	(12.2		)	(0.4	)%	(10.5		)	(0.4	)%
Operational income from continuing operations	$	334.7		9.9	%	$	289.0		9.0	%	$	219.1		7.4	%
Loss from discontinued operations	(2.3		)	(0.1	)%	(8.1		)	(0.3	)%	(45.0		)	(1.5	)%
Net income	$	205.8		6.1	%	$	171.8		5.4	%	$	90.0		3.1	%

The following table provides net sales by geographic market (dollars in millions):

	For the Years Ended December 31,
	2014				2013				2012
	Dollars		Percent		Dollars		Percent		Dollars		Percent
Net Sales by Geographic Market:
U.S.	$	2,576.4	76.5	%	$	2,382.0	74.5	%	$	2,147.2	72.8	%
Canada	236.3		7.0		232.3		7.3		226.7		7.8
International	554.7		16.5		584.8		18.3		575.5		19.5
Total net sales	$	3,367.4	100.0	%	$	3,199.1	100.0	%	$	2,949.4	100.0	%

Year Ended December 31, 2014 Compared to Year Ended December 31, 2013 - Consolidated Results

Net Sales

Net sales increased 5% in 2014 compared to 2013, with sales volumes up approximately 5% and price and mix up approximately 1%. The increase in volume was driven by our Residential Heating & Cooling and Commercial Heating & Cooling segments capturing additional replacement and new construction business. The benefit of price and mix was a combination of price increases across all segments and favorable product mix predominantly in our Residential Heating & Cooling segment. Partially offsetting these increases was a 1% decrease from foreign currency exchange rates.

Gross Profit

Gross profit margins were relatively flat at 26.8% in 2014 compared to 26.9% in 2013. Lower material costs increased our profit margin by 140 bps and reduced product warranty costs increased our profit margin by 10 bps. Offsetting these increases were decreases of 20 bps from unfavorable mix, 10 bps from lower refrigerant pricing on our Australia wholesale business when compared to the prior year, and 60 bps for investments in distribution and other growth initiatives with the balance from other cost changes.

Selling, General and Administrative Expenses

SG&A expenses increased by $4 million in 2014 compared to 2013. As a percentage of net sales, SG&A expenses decreased 80 bps from 17.8% to 17.0% in the same periods. The percentage decrease in SG&A expenses was principally due to lower

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employee incentive compensation.

Losses and Other Expenses, Net

Losses and other expenses, net for 2014 and 2013 included the following (in millions):

	For the Years Ended December 31,
	2014			2013
Realized losses on settled futures contracts	$	0.8		$	1.0
Foreign currency exchange losses	1.6			0.5
Gains on disposal of fixed assets	(0.3		)	(1.0		)
Net change in unrealized losses on unsettled futures contracts	0.6			0.4
Special legal contingency charges	0.9			1.2
Asbestos-related litigation	0.9			6.3
Environmental liabilities	2.0			—
Other items, net	0.3			0.9
Losses and other expenses, net	$	6.8		$	9.3

The decline in realized losses on settled futures contracts in 2014 was attributable to increases in commodity prices relative to our settled futures contract prices. Conversely, the change in unrealized losses on unsettled futures contracts was primarily due to lower commodity prices relative to the unsettled futures contract prices. For more information on our derivatives, see Note 8 in the Notes to the Consolidated Financial Statements.

The special legal contingency charges relate to patent litigation which was settled in early 2014. The asbestos-related litigation relates to known and estimated future asbestos matters. The environmental liabilities relate to estimated remediation costs for contamination at some of our facilities. Refer to Note 10 in the Notes to the Consolidated Financial Statements for more information on litigation, the asbestos charges, and the environmental liabilities.

Restructuring Charges

Restructuring charges were $2 million in 2014 compared to $5 million in 2013. 2014 charges were primarily for a new project to realign resources and enhance distribution capabilities in our Refrigeration segment. The charges in 2013 related to our Regional Distribution Network project as well as anticipated severance charges associated with a relocation of certain Residential Heating & Cooling manufacturing operations to lower cost facilities. For more information on our restructuring activities, see Note 16 in the Notes to the Consolidated Financial Statements.

Income from Equity Method Investments

Investments over which we do not exercise control but have significant influence are accounted for using the equity method of accounting. Income from equity method investments increased to $14 million in 2014 compared to $12 million in 2013 due to increases in earnings from our joint ventures.

Interest Expense, net

Net interest expense of $17 million in 2014 increased from $15 million in 2013 due to an increase in our weighted-average interest rates in the comparable periods as well as an increase in our average borrowings.

Income Taxes

The income tax provision was $110 million in 2014 compared to $94 million in 2013, and the effective tax rate was 34.5% in 2014 compared to 34.4% in 2013. Our effective tax rates differ from the statutory federal rate of 35% for certain items, including tax credits, state and local taxes, non-deductible expenses, foreign taxes at rates other than 35% and other permanent tax differences.

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Loss from Discontinued Operations

The Loss from discontinued operations related to the Service Experts business sold in March 2013 and the Hearth business sold in April 2012. The $4 million of pre-tax losses incurred in 2014 primary relate to changes in retained product liabilities and general liabilities for Service Experts and Hearth. In 2013, there were $13 million of pre-tax losses from discontinued operations consisting primarily of operating losses in the Service Experts business. The Hearth business had no significant gains or losses in 2013.

Year Ended December 31, 2014 Compared to Year Ended December 31, 2013 - Results by Segment

Residential Heating & Cooling

The following table presents our ResidentialHeating & Cooling segment's net sales and profit for 2014 and 2013 (dollars in millions):

	For the Years Ended December 31,
	2014			2013			Difference		% Change
Net sales	$	1,736.5		$	1,583.2		$	153.3	9.7	%
Profit	$	235.8		$	180.1		$	55.7	30.9	%
% of net sales	13.6		%	11.4		%

Residential Heating & Cooling net sales increased 10% in 2014 compared to 2013 driven by strong volume increases and favorable price and mix. Sales volume increases contributed 9% and were attributable to industry growth in new construction and replacement markets and market share gains. Benefits of price increases and favorable product mix contributed 2%. Changes in foreign currency exchange rates unfavorably impacted net sales by 1%.

Segment profit in 2014 increased $56 million due to $27 million contributed by incremental volume, $30 million from commodity and non-commodity material cost savings, $12 million from favorable price, $5 million from favorable mix, $4 million from lower warranty costs, and $1 million from favorable other product costs. Partially offsetting these increases was $7 million in distribution expenses related to continued investment in distribution expansion, unfavorable foreign exchange rates of $9 million, and a $7 million increase in SG&A expenses primarily due to higher wages and other administrative expenses.

Commercial Heating & Cooling

The following table presents our Commercial Heating & Cooling segment's net sales and profit for 2014 and 2013 (dollars in millions):

	For the Years Ended December 31,
	2014			2013			Difference		% Change
Net sales	$	878.5		$	844.4		$	34.1	4.0	%
Profit	$	124.0		$	118.1		$	5.9	5.0	%
% of net sales	14.1		%	14.0		%

Commercial Heating & Cooling net sales increased 4% in 2014 compared to 2013 driven by higher volumes. Sales volume increases contributed 5% and were attributable to market share gains and industry growth in the North American markets. Changes in foreign currency exchange rates unfavorably impacted net sales by 1%.

Segment profit in 2014 increased $6 million compared to 2013 due to $12 million from incremental volume, $11 million from material cost savings, $2 million from favorable price, and $4 million from increased factory productivity. These increases were offset by $7 million higher SG&A expenses primarily for start-up costs to enter the VRF market and to support product development, $3 million from unfavorable mix, $6 million from unfavorable foreign exchange rates, with the $7 million balance associated with other costs including investments in distribution expansion.

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Refrigeration

The following table presents our Refrigeration segment's net sales and profit for 2014 and 2013 (dollars in millions):

	For the Years Ended December 31,
	2014			2013			Difference			% Change
Net sales	$	752.4		$	771.5		$	(19.1	)	(2.5	)%
Profit	$	55.4		$	90.2		$	(34.8	)	(38.6	)%
% of net sales	7.4		%	11.7		%

Refrigeration net sales declined 3% in 2014 compared to 2013 primarily due to a 2% impact from unfavorable Australian and Brazilian foreign currency exchange rates and a 1% negative impact to our refrigerant business in Australia due to the repeal of the carbon tax. The North American supermarket and Australian wholesale businesses have been soft. We continue to expect

the North American supermarket business to improve in 2015 based on national account business won in 2014. In Australia,

with the repeal of the carbon tax, we expect a negative impact to the profitability of our refrigerant business as compared to

prior year periods through the second quarter of 2015.

Segment profit decreased $35 million in 2014 compared to 2013 primarily due to unfavorable price and mix of $13 million, unfavorable foreign exchange rates of $6 million, and $6 million of lower profitability in our Australia refrigerant business caused by the carbon tax repeal.  Also contributing to the decrease in profit was $7 million of investments in growth initiatives, $7 million of higher distribution and other costs, and $5 million of increased SG&A expenses primarily related to wages.  Partially offsetting the cost increases was $9 million of commodity and non-commodity material cost savings.

Corporate and Other

Corporate and other expenses decreased $14 million in 2014 to $74 million from $88 million in 2013 driven primarily by lower incentive compensation.

Year Ended December 31, 2013 Compared to Year Ended December 31, 2012 - Consolidated Results

Net Sales

Net sales increased 8% in 2013 compared to 2012, with sales volumes up approximately 8% and price and mix up approximately 1%. Also, foreign currency exchange rates had an unfavorable impact of less than 1%. The increase in volume was driven by our Residential Heating & Cooling and Commercial Heating & Cooling segments capturing additional replacement and new construction business. The benefit of price and mix was a combination of price increases across all segments and favorable product mix predominantly in our Residential Heating & Cooling segment.

Gross Profit

Gross profit margins improved 240 bps to 26.9% in 2013 compared to 24.5% in 2012. Increased volume, along with favorable price and mix contributed 200 bps to profit margin and lower commodity and non-commodity product costs contributed a collective 130 bps. Partially offsetting these improvements were 70 bps of higher distribution costs and 20 bps of higher warranty costs.

Selling, General and Administrative Expenses

SG&A expenses increased by $63 million in 2013 compared to 2012. As a percentage of net sales, SG&A expenses increased 60 bps from 17.2% to 17.8% in the same periods. The increase in SG&A expenses was principally due to higher employee compensation.

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Losses and Other Expenses, Net

Losses and other expenses, net for 2013 and 2012 included the following (in millions):

	For the Years Ended December 31,
	2013			2012
Realized losses (gains) on settled futures contracts	$	1.0		$	1.5
Foreign currency exchange losses	0.5			0.8
Losses (gains) on disposal of fixed assets	(1.0		)	0.4
Net change in unrealized losses (gains) on unsettled futures contracts	0.4			(2.2		)
Acquisition expenses	1.2			1.2
Special legal contingency charges	6.3			—
Other items, net	0.9			0.8
Losses and other expenses, net	$	9.3		$	2.5

The decline in realized losses on settled futures contracts in 2013 was attributable to increases in commodity prices relative to our settled futures contract prices. Conversely, the change in unrealized losses (gains) on unsettled futures contracts was primarily due to lower commodity prices relative to the unsettled futures contract prices. For more information on our derivatives, see Note 8 in the Notes to the Consolidated Financial Statements.

The special legal contingency charges relate to patent litigation which was settled in early 2014. We also recorded asbestos charges in the fourth quarter of 2013 for known and estimated future asbestos matters. Refer to Note 10 in the Notes to the Consolidated Financial Statements for more information on this litigation and the asbestos charges.

Restructuring Charges

Restructuring charges were $5 million in 2013 compared to $4 million in 2012. The charges in 2013 related to our Regional Distribution Network project as well as anticipated severance charges associated with a relocation of certain Residential Heating & Cooling manufacturing operations to lower cost facilities. The charges in 2012 related primarily to our Regional Distribution Network project. For more information on our restructuring activities, see Note 16 in the Notes to the Consolidated Financial Statements.

Income from Equity Method Investments

Investments over which we do not exercise control but have significant influence are accounted for using the equity method of accounting. Income from equity method investments increased to $12 million in 2013 compared to $10 million in 2012 due to increases in earnings from our joint ventures.

Interest Expense, net

Net interest expense of $15 million in 2013 declined from $17 million in 2012 due to a decrease in our weighted-average interest rates in the comparable periods, partially offset by a slight increase in our average borrowings.

Income Taxes

The income tax provision was $94 million in 2013 compared to $67 million in 2012, and the effective tax rate was 34.4% in 2013 compared to 33.1% in 2012. Our effective tax rates differ from the statutory federal rate of 35% for certain items, including tax credits, state and local taxes, non-deductible expenses, foreign taxes at rates other than 35% and other permanent tax differences.

Loss from Discontinued Operations

The Loss from discontinued operations related to the Service Experts business sold in March 2013 and the Hearth business sold in April 2012. In 2013, there were $13 million of pre-tax losses from discontinued operations consisting primarily of operating losses in the Service Experts business. The Hearth business had no significant gains or losses in 2013.

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In 2012, there were pre-tax losses of $65 million consisting of $51 million of losses related to the Service Experts business and $14 million of losses related to the Hearth business. The $51 million of Service Experts' losses included operating losses of $28 million, goodwill impairment charges of $21 million and $2 million of restructuring and other expenses. The $14 million of losses related to the Hearth business included operating losses of $3 million, a $6 million charge to write down certain long-lived assets to their fair value, a $6 million pension settlement charge for the realization of pension losses related to the transfer of a pension to the buyer of the business, a $1 million loss on the sale of the business, $2 million of other expenses and a $4 million gain for the realization of foreign currency translation adjustments.

Year Ended December 31, 2013 Compared to Year Ended December 31, 2012 - Results by Segment

Residential Heating & Cooling

The following table presents our ResidentialHeating & Cooling segment's net sales and profit for 2013 and 2012 (dollars in millions):

	Years Ended December 31,
	2013			2012			Difference		% Change
Net sales	$	1,583.2		$	1,375.8		$	207.4	15.1	%
Profit	$	180.1		$	102.9		$	77.2	75.0	%
% of net sales	11.4		%	7.5		%

Residential Heating & Cooling net sales increased 15% in 2013 compared to 2012 driven by strong volume increases and favorable price and mix. Sales volume increases contributed 13% and were attributable to industry growth in new construction and replacement markets and market share gains. Benefits of price increases and favorable product mix contributed 2%.

Segment profit in 2013 increased $77 million due to $57 million in higher sales volumes, $18 million from favorable price and mix, $33 million in commodity and non-commodity material cost savings and $3 million in favorable other product costs due primarily to factory efficiencies. Partially offsetting these increases were $13 million in higher SG&A costs due primarily to higher advertising and employee compensation costs, $17 million of higher distribution expenses due to continued investment in distribution initiatives and $4 million in adjustments to the product warranty accrual.

Commercial Heating & Cooling

The following table presents our Commercial Heating & Cooling segment's net sales and profit for 2013 and 2012 (dollars in millions):

	Years Ended December 31,
	2013			2012			Difference		% Change
Net sales	$	844.4		$	785.4		$	59.0	7.5	%
Profit	$	118.1		$	99.5		$	18.6	18.7	%
% of net sales	14.0		%	12.7		%

Commercial Heating & Cooling net sales increased 8% in 2013 compared to 2012 driven by higher volumes. The drivers of the volume increases were market share gains and industry growth in the North American markets. Also, foreign currency exchange rates had a favorable impact of less than 1%.

Segment profit in 2013 increased $19 million compared to 2012 due to increases of $19 million from higher volumes, $11 million for favorable commodity and non-commodity material costs and $4 million for favorable price and mix. Partially offsetting these increases were $4 million of higher distribution expenses due to continued investment in distribution initiatives, $6 million of higher SG&A expenses and $5 million of increases primarily to investments in our commercial services network.

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Refrigeration

The following table presents our Refrigeration segment's net sales and profit for 2013 and 2012 (dollars in millions):

	Years Ended December 31,
	2013			2012			Difference			% Change
Net sales	$	771.5		$	788.2		$	(16.7	)	(2.1	)%
Profit	$	90.2		$	81.9		$	8.3		10.1	%
% of net sales	11.7		%	10.4		%

Refrigeration net sales were down 2% in 2013 compared to 2012 due to volume declines and unfavorable foreign currency exchange rates, partially offset by growth in Australia. Volumes declined 2% primarily because of weakness in the North America grocery markets. Also, foreign currency exchange rates had a 1% unfavorable impact over the comparable period. These declines were partially offset by growth of 1% related to the Australia wholesale refrigerant business.

Segment profit for 2013 increased $8 million over 2012, with increases of $14 million from growth in the Australia wholesale refrigerant business which benefited from one-time purchases of lower cost inventory and from investments in related operations, increases of $10 million from favorable price and mix and increases of $11 million from favorable commodity and non-commodity material costs. Partially offsetting these increases were $13 million of higher SG&A expenses primarily related to investments in cost savings initiatives and increases in employee compensation, $11 million of volume-related declines, approximately $2 million from unfavorable foreign currency exchange rates and $1 million of higher distribution costs.

Corporate and Other

Corporate and other expenses increased $28 million in 2013 to $88 million from $60 million in 2012 driven primarily by an increase in incentive compensation due to improved operating results in 2013.

Accounting for Futures Contracts

Realized gains and losses on settled futures contracts are a component of segment profit (loss). Unrealized gains and losses on unsettled futures contracts are excluded from segment profit (loss) as they are subject to changes in fair value until their settlement date. Both realized and unrealized gains and losses on futures contracts are a component of Losses and other expenses, net in the accompanying Consolidated Statements of Operations. See Note 8 of the Notes to Consolidated Financial Statements for more information on our derivatives and Note 19 of the Notes to the Consolidated Financial Statements for more information on our segments and for a reconciliation of segment profit to income from continuing operations before income taxes.

Liquidity and Capital Resources

Our working capital and capital expenditure requirements are generally met through internally generated funds, bank lines of credit and an asset securitization arrangement. Working capital needs are generally greater in the first and second quarters due to the seasonal nature of our business cycle. During the fourth quarter, the company strategically built $77 million of inventory to support customers in the minimum-efficiency regulatory transition taking effect at the start of 2015 for certain products.

Statement of Cash Flows

The following table summarizes our cash flow activity for the years ended 2014, 2013 and 2012 (in millions):

	2014			2013			2012
Net cash provided by operating activities	$	184.8		$	210.3		$	221.4
Net cash used in investing activities	(87.3		)	(67.3		)	(40.4		)
Net cash used in financing activities	(89.5		)	(150.2		)	(180.1		)

Net Cash Provided by Operating Activities - Net cash provided by operating activities decreased $26 million to $185 million in 2014 compared to $210 million in 2013. This decrease was primarily attributable to an increase in working capital requirements and higher income tax payments in 2014 due to timing of payments, partially offset by higher net income. The majority of the increase in working capital in 2014 was related to increased inventory to support customers in the minimum-efficiency regulatory

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transition, partially offset by an increase in accounts payable due to the timing of payments.

Net Cash Used in Investing Activities -Capital expenditures were $88 million, $78 million and $50 million in 2014, 2013 and 2012, respectively. Capital expenditures in 2014 were primarily related to an expansion of manufacturing capacity for our Residential Heating & Cooling segment, investments in the operations of the Australia wholesale refrigerant business, investments in our North America distribution networks and other investments in systems and software to support the overall enterprise. Net cash used in investing activities for 2013 also included $9 million in net proceeds from the sale of the Service Experts business.

Net Cash Used in Financing Activities -Net cash used in financing activities declined to $90 million in 2014 from $150 million in 2013 primarily due to an increase in net borrowings and more dividend payments, partially offset by increased share repurchases. Net borrowings increased by $526 million in 2014 primarily to support the increased stock repurchases, dividend, and tax payments. Dividend payments increased because the fourth quarter 2012 dividend was paid in 2012, whereas the fourth quarter 2013 dividend was not paid until the first quarter of 2014. We also used $550 million in 2014 to acquire 5.2 million shares of stock under our share repurchase plans compared to purchases of $125 million for 1.7 million shares in 2013.

Debt Position

The following table details our lines of credit and financing arrangements as of December 31, 2014 (in millions):

	Maximum Capacity		Outstanding Borrowings		Available for Future Borrowings
Short-Term Debt:
Foreign Obligations	$	28.6	$	6.6	$	22.0
Asset Securitization Program (1)	220.0		220.0		—
Total short-term debt	248.6		226.6		22.0
Current Maturities:
Capital lease obligations	1.5		1.5		—
Domestic credit facility (2)	22.5		22.5		—
Long-Term Debt:
Capital lease obligations	15.5		15.5		—
Domestic credit facility (2)	927.5		459.5		440.8
Senior unsecured notes	200.0		200.0		—
Total long-term debt	1,143.0		675.0		440.8
Total debt	$	1,415.6	$	925.6	$	462.8

⁽¹⁾ In November 2014, we amended the Asset Securitization Program ("ASP"), extending its term to November 13, 2015 and increasing the maximum securitization amount from a range of $160.0 million to $220 million to a range of $180.0 million to $220.0 million, depending on the period. The maximum capacity of the ASP is the lesser of the maximum securitization amount or 100% of the net pool balance less reserves, as defined under the ASP.

⁽²⁾ In November 2014, we replaced our $650 million Domestic Revolving Credit Facility and our $200 million Short Term Facility with a $950 million Domestic Credit Facility, which consists of a $650 million revolving credit facility and a $300 million term loan and matures in November 2019. Quarterly principal repayments of $7.5 million are required for the term loan beginning on June 30, 2015. The available future borrowings on our domestic revolving credit facility are reduced by $27.2 million in outstanding standby letters of credit. We had an additional $26.4 million in standby letters of credit with other banks.

Financial Leverage

We periodically review our capital structure, including our primary bank facility, to ensure the appropriate levels of liquidity and leverage and to take advantage of favorable interest rate environments or other market conditions. We consider various other financing alternatives and may, from time to time, access the capital markets.

As of December 31, 2014, our senior credit ratings were Baa3 with a negative outlook, and BBB with a stable outlook, by Moody's Investors Service, Inc. ("Moody's") and Standard & Poor's Rating Group ("S&P"), respectively. The security ratings are

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not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time by the assigning rating agency. Each rating should be evaluated independently of any other rating. Our goal is to maintain investment grade ratings from Moody's and S&P to ensure the capital markets remain available to us.

Our debt-to-total-capital ratio increased to 99.0% at December 31, 2014 compared to 45.2% at December 31, 2013. The increase in the ratio in 2014 is primarily due to the increase in our net borrowings and our acquisition of shares of stock through share repurchase plans, as noted above. We evaluate our debt-to-EBITDA ratio in order to determine the appropriate targets for share repurchases under our share repurchase programs.

Liquidity

We believe our cash of $38 million, future cash generated from operations and available future borrowings are sufficient to fund our operations, planned capital expenditures, future contractual obligations, share repurchases, anticipated dividends and other needs in the foreseeable future. Included in our cash and cash equivalents of $38 million as of December 31, 2014 was $25 million of cash held in foreign locations. Our cash held in foreign locations is used for investing and operating activities in those locations, and we currently do not have the need or intent to repatriate those funds to the United States. If we were to repatriate this cash, we would be required to accrue and to pay taxes in the United States for the amounts that were repatriated.

No contributions are required to be made to our U.S. defined benefit plan in 2015. We made $10 million in contributions to pension plans in 2014.

On May 14, 2014, our Board of Directors approved a 25% increase in our quarterly dividend on common stock from $0.24 to $0.30 per share effective with the July 2014 dividend payment. Dividend payments were $53 million in 2014 compared to $34 million in 2013, with the increase due primarily to the timing of payments of declared dividends. Four quarterly dividends were declared in both 2014 and 2013, whereas four quarterly dividends were paid in 2014 compared to three payments in 2013.

We also continued to increase shareholder value through our share repurchase programs. In 2014 and 2013, we returned $550 million and $125 million to our investors through share repurchases, respectively. An additional $396 million of repurchases are still available under the programs.

Financial Covenants related to our Debt

Our domestic credit facility is guaranteed by certain of our subsidiaries and contains financial covenants relating to leverage and interest coverage. Other covenants contained in the domestic credit facility restrict, among other things, certain mergers, asset dispositions, guarantees, debt, liens, and affiliate transactions. The financial covenants require us to maintain a defined Consolidated Indebtedness to Adjusted EBITDA Ratio and a Cash Flow (defined as EBITDA minus capital expenditures) to Net Interest Expense Ratio. The required ratios under our domestic credit facility are detailed below:

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

Our domestic credit facility contains customary events of default. These events of default include nonpayment of principal or interest, breach of covenants or other restrictions or requirements, default on certain other indebtedness or receivables securitizations (cross default), and bankruptcy. A cross default under our credit facility could occur if:

• 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.

Each of our major debt agreements contains provisions by which a default under one agreement causes a default in the others (a cross default). If a cross default under the domestic credit facility, our senior unsecured notes, the Lake Park Renewal (as described below), or our ASP were to occur, it could have a wider impact on our liquidity than might otherwise occur from a default of a single debt instrument or lease commitment.

If any event of default occurs and is continuing, lenders with a majority of the aggregate commitments may require the administrative agent to terminate our right to borrow under our domestic credit facility and accelerate amounts due under our

26

domestic credit facility (except for a bankruptcy event of default, in which case such amounts will automatically become due and payable and the lenders' commitments will automatically terminate).

In the event of a credit rating downgrade below investment grade resulting from a change of control, holders of our senior unsecured notes will have the right to require us to repurchase all or a portion of the senior unsecured notes at a repurchase price equal to 101% of the principal amount of the notes, plus accrued and unpaid interest, if any. The notes are guaranteed, on a senior unsecured basis, by each of our domestic subsidiaries that guarantee payment by us of any indebtedness under our domestic 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.

As of December 31, 2014, we were in compliance with all covenant requirements. Delaware law limits the ability to pay dividends to surplus or, if there is no surplus, out of net profits for the fiscal year in which the dividend is declared and/or the preceding fiscal year. In addition, stock repurchases can only be made out of surplus.

Leasing Commitments

On March 22, 2013, we entered into an agreement with a financial institution to renew the lease of our corporate headquarters in Richardson, Texas for a term of approximately six years through March 1, 2019 (the "Lake Park Renewal"). The agreement provides for financial covenants consistent with our credit agreement and we were in compliance with those covenants as of December 31, 2014. The lease is classified as an operating lease and we realize annualized savings of approximately $2 million in net rent costs from this renewal compared to our previous leasing arrangement.

In 2008, we expanded our Tifton, Georgia manufacturing facility using the proceeds from Industrial Development Bonds (“IDBs”). We entered into a lease agreement with the owner of the property and the issuer of the IDBs, and through our lease payments fund the interest payments to investors in the IDBs. We also guaranteed the repayment of the IDBs and entered into letters of credit totaling $14.5 million to fund a potential repurchase of the IDBs in the event investors exercised their right to tender the IDBs to the Trustee. As of December 31, 2014 and 2013, we had a long-term capital lease obligation of $14.3 million related to these transactions.

Refer to Note 10 in the Notes to the Consolidated Financial Statements for more details on our leasing commitments.

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Off Balance Sheet Arrangements

In addition to the credit facilities, promissory notes and leasing commitments described above, we also lease real estate and machinery and equipment pursuant to operating leases that are not capitalized on the balance sheet, including high-turnover equipment such as autos and service vehicles and short-lived equipment such as personal computers. Rent expense for these leases was $51 million, $54 million, and $68 million in 2014, 2013, and 2012, respectively. Refer to Notes 10 and 23 of the Notes to the Consolidated Financial Statements for more information on our lease commitments and rent expense, respectively.

Contractual Obligations

Summarized below are our contractual obligations as of December 31, 2014 and their expected impact on our liquidity and cash flows in future periods (in millions):

	Payments Due by Period
	Total		1 Year or Less		1 - 3 Years		3 - 5 Years		More than 5 Years
Total long-term debt obligations (1)	$	925.6	$	250.6	$	261.2	$	402.1	$	11.7
Estimated interest payments on debt obligations	65.5		21.3		30.3		13.5		0.4
Operating leases	141.5		37.8		53.4		30.6		19.7
Uncertain tax positions (2)	1.4		1.0		0.4		—		—
Purchase obligations (3)	35.1		35.1		—		—		—
Total contractual obligations	$	1,169.1	$	345.8	$	345.3	$	446.2	$	31.8

⁽¹⁾ Contractual obligations related to capital leases are included as part of long-term debt.

⁽²⁾ The liability for uncertain tax positions includes interest and penalties.

⁽³⁾ Purchase obligations consist of aluminum commitments and inventory that is part of our third party logistics programs.

The table above does not include pension, post-retirement benefit and warranty liabilities because it is not certain when these liabilities will be funded. However, we do not expect to pay any contributions to our U.S. defined benefit plans in 2015. For additional information regarding our contractual obligations, see Notes 9, 10, and 11 of the Notes to the Consolidated Financial Statements. See Note 12 of the Notes to the Consolidated Financial Statements for more information on our pension and post-retirement benefits obligations.

Fair Value Measurements

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date and requires consideration of our creditworthiness when valuing certain liabilities. Our framework for measuring fair value is based on a three-level hierarchy for fair value measurements.

The three-level fair value hierarchy for disclosure of fair value measurements is defined as follows:

Level 1 -     Quoted prices for identical instruments in active markets at the measurement date.

Level 2 - Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets at the measurement date and for the anticipated term of the instrument.

Level 3 - Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable inputs that reflect the reporting entity's own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances.

Where available, the fair values were based upon quoted prices in active markets. However, if quoted prices were not available, then the fair values were based upon quoted prices for similar assets or liabilities or independently sourced market parameters, such as credit default swap spreads, yield curves, reported trades, broker/dealer quotes, interest rates and benchmark securities. For assets and liabilities without observable market activity, if any, the fair values were based upon discounted cash flow methodologies incorporating assumptions that, in our judgment, reflect the assumptions a marketplace participant would use. Valuation adjustments to reflect either party's creditworthiness and ability to pay were incorporated into our valuations, where appropriate, as of December 31, 2014 and 2013, the measurement dates.

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See Note 20 of the Notes to the Consolidated Financial Statements for more information on the assets and liabilities measured at fair value.

Market Risk

Commodity Price Risk

We enter into commodity futures contracts to stabilize prices expected to be paid for raw materials and parts containing high copper and aluminum content. These contracts are for quantities equal to or less than quantities expected to be consumed in future production. Fluctuations in metal commodity prices impact the value of the futures contracts that we hold. When metal commodity prices rise, the fair value of our futures contracts increases. Conversely, when commodity prices fall, the fair value of our futures contracts decreases. Information about our exposure to metal commodity price market risks and a sensitivity analysis related to our metal commodity hedges is presented below (in millions):

Notional amount (pounds of aluminum and copper)	34.5
Carrying amount and fair value of net liability	$	8.1
Change in fair value from 10% change in forward prices	$	9.3

Refer to Note 8 of the Notes to the Consolidated Financial Statements for additional information regarding our commodity futures contracts.

Interest Rate Risk

Our results of operations can be affected by changes in interest rates due to variable rates of interest on our debt facilities, cash, cash equivalents and short-term investments. A 10% adverse movement in the levels of interest rates across the entire yield curve would have resulted in an increase to pre-tax interest expense of approximately $0.9 and $0.2 million for the years ended December 31, 2014 and 2013, respectively.

From time to time, we may use an interest rate swap hedging strategy to eliminate the variability of cash flows in a portion of our interest payments. This strategy, when employed, allows us to fix a portion of our interest payments while also taking advantage of historically low interest rates. As of December 31, 2014 and 2013, no interest rate swaps were in effect.

Foreign Currency Exchange Rate Risk

Our results of operations are affected by changes in foreign currency exchange rates. Net sales and expenses in foreign currencies are translated into U.S. dollars for financial reporting purposes based on the average exchange rate for the period. During 2014, 2013 and 2012, net sales from outside the U.S. represented 23.5%, 25.5% and 27.2%, respectively, of our total net sales. For the years ended December 31, 2014 and 2013, foreign currency transaction gains and losses did not have a material impact to our results of operations. A 10% change in foreign exchange rates would have had an estimated $4.1 million and $5.0 million impact to net income for the years ended December 31, 2014 and 2013, respectively.

We seek to mitigate the impact of currency exchange rate movements on certain short-term transactions by periodically entering into foreign currency forward contracts. By entering into forward contracts, we lock in exchange rates that would otherwise cause losses should the U.S. dollar appreciate and gains should the U.S. dollar depreciate. Refer to Note 8 of the Notes to the Consolidated Financial Statements for additional information regarding our foreign currency forward contracts.

Critical Accounting Estimates

A critical accounting estimate is one that requires difficult, subjective or complex estimates and assessments and is fundamental to our results of operations and financial condition. The following are our critical accounting estimates and describe how we develop our judgments, assumptions and estimates about future events and how such policies can impact our financial statements:

• Product warranties and product-related contingencies;

• Self-insurance expense;

• Pension benefits;

• Derivative accounting; and

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• Goodwill and intangible assets.

This discussion and analysis should be read in conjunction with our Consolidated Financial Statements and related Notes in “Item 8. Financial Statements and Supplementary Data.”

Product Warranties and Product-Related Contingencies

The estimate of our liability for future warranty costs requires us to make assumptions about the amount, timing and nature of future product-related costs. Some of the warranties we issue extend 10 years or more in duration and a relatively small adjustment to an assumption may have a significant impact on our overall liability. We may also incur costs related to our products that may not be covered under our warranties and are not covered by insurance, and, from time to time, we may repair or replace installed products experiencing quality issues in order to satisfy our customers and protect our brand.

We periodically review the assumptions used to determine the liabilities for product warranties and product-related contingencies and we adjust our assumptions based upon factors such as actual failure rates and cost experience. Numerous factors could affect actual failure rates and cost experience, including the amount and timing of new product introductions, changes in manufacturing techniques or locations, components or suppliers used. Should actual costs differ from our estimates, we may be required to adjust the liabilities and to record expense in future periods. See Note 10 in the Notes to the Consolidated Financial Statements for more information on our product warranties and product-related contingencies.

Self-Insurance Expense

We use a combination of third-party insurance and self-insurance plans to provide protection against claims relating to workers' compensation/employers' liability, general liability, product liability, auto liability, auto physical damage and other exposures. Many of these plans have large deductibles and may also include per occurrence and annual aggregate limits. As a result, we expect to incur costs related to these types of claims in future periods.

The estimates for self-insurance expense and liabilities involve assumptions about the amount, timing and nature of future claim costs. The amounts and timing of payments for future claims may vary depending on numerous factors, including the development and ultimate settlement of reported and unreported claims. We estimate these amounts actuarially based primarily on our historical claims information, as well as industry factors and trends. To the extent actuarial assumptions change and claims experience differ from historical rates, our liabilities may change. The self-insurance liabilities as of December 31, 2014 represent the best estimate of the future payments to be made on reported and unreported losses. See Note 10 in the Notes to the Consolidated Financial Statements for additional information on our self-insurance expense and liabilities.

Pension Benefits

Over the past several years, we have frozen many of our defined benefit pension and profit sharing plans and replaced them with defined contribution plans. We have a liability for the benefits earned under these inactive plans prior to the date the benefits were frozen. We also have several active defined benefit plans that provide benefits based on years of service. In each of the years ended December 31, 2014 and December 31, 2013, we contributed $10 million to our pension plans.

We make several assumptions to calculate our liability and the expense for these benefit plans, including the discount rate and expected return on assets. We used an assumed discount rate of 4.04% for pension benefits of our U.S.-based plans as of December 31, 2014. Our discount rates were selected using the yield curve for high-quality corporate bonds, which is dependent upon risk-free interest rates and current credit market conditions. In 2014 and 2013, we utilized an assumed long-term rate of return on assets of 8.00%. These are long-term estimates of equity values and are not dependent on short-term variations of the equity markets. Differences between actual experience and our assumptions are quantified as actuarial gains and losses. These actuarial gains and losses do not immediately impact our earnings as they are deferred in accumulated other comprehensive income (“AOCI”) and are amortized into net periodic benefit cost over the estimated service period. During the fourth quarter of 2014, we adopted the new mortality tables from the Society of Actuaries, which reflects increasing life expectancies in the United States. The adoption of the new mortality tables, along with the lower discount rate year over year, were the primary reasons for the increase in our projected benefit obligation from 2013 to 2014.

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The assumed long-term rate of return on assets and the discount rate have significant effects on the amounts reported for our defined benefit plans. A 25 bps decrease in the long-term rate of return on assets or discount rate would have the following effects (in millions):

	25 Basis Point Decrease in Long-Term Rate of Return		25 Basis Point Decrease in Discount Rate
Increase to net periodic benefit cost for U.S. pension plans	$	0.6	$	0.4
Increase to the pension benefit obligations for U.S. pension plans	n/a		14.9

Should actual results differ from our estimates and assumptions, revisions to the benefit plan liabilities and the related expenses would be required. Refer to Note 12 in the Notes to the Consolidated Financial Statements for more information on our pension benefits.

Derivative Accounting

We use futures contracts and fixed forward contracts to mitigate our exposure to volatility in commodity prices in the ordinary course of business. Fluctuations in metal commodity prices impact the value of the derivative instruments that we hold. When metal commodity prices rise, the fair value of our futures contracts increases and conversely, when commodity prices fall, the fair value of our futures contracts decreases. We are required to prepare and maintain contemporaneous documentation for futures contracts that are formally designated as cash flow hedges. Our failure to comply with the strict documentation requirements could result in the de-designation of cash flow hedges, which may significantly impact our consolidated financial statements. Refer to Note 8 in the Notes to the Consolidated Financial Statements for more information on our derivatives.

Goodwill and Intangible Assets

Goodwill represents the excess of cost over fair value of assets from acquired businesses. Goodwill is not amortized, but is reviewed for impairment annually in the fourth quarter and whenever events or changes in circumstances indicate the asset may be impaired. We assign goodwill to the reporting units that benefit from the synergies of our acquisitions. If we reorganize our management structure, the related goodwill is allocated to the affected reporting units based upon the relative fair values of those reporting units. Assets and liabilities, including deferred income taxes, are generally directly assigned to the reporting units. However, certain assets and liabilities, including intellectual property assets, information technology assets and pension, self-insurance and environmental liabilities, are centrally managed and are not allocated to the segments in the normal course of our financial reporting process, and therefore must be assigned to the reporting units based upon appropriate methods. Reporting units that we test are generally equivalent to our business segments, or in some cases one level below. Components that are determined to be reporting units are aggregated when those reporting units share similar economic characteristics. We review our reporting unit structure each year as part of our annual goodwill impairment testing.

The provisions of the accounting standard for goodwill allow us to first assess qualitative factors to determine whether it is necessary to perform a two-step quantitative goodwill impairment test. As part of our qualitative assessment, we monitor economic, legal, regulatory and other factors, industry trends, our market capitalization, recent and forecasted financial performance of our reporting units and the timing and nature of our restructuring activities for LII as a whole and for each reporting unit.

For those reporting units which require the two-step quantitative goodwill impairment test, we estimate reporting unit fair values using the discounted cash flow approach. The discounted cash flows used to estimate fair value are based on assumptions regarding each reporting unit’s estimated projected future cash flows and the estimated weighted-average cost of capital that a market participant would use in evaluating the reporting unit in a purchase transaction. The estimated weighted-average cost of capital is based on the risk-free interest rate and other factors such as equity risk premiums and the ratio of total debt to equity capital. In performing these impairment tests, we take steps to ensure that appropriate and reasonable cash flow projections and assumptions are used. We reconcile our estimated enterprise value to our market capitalization and determine the reasonableness of the cost of capital used by comparing to market data. We also perform sensitivity analyses on the key assumptions used, such as the weighted-average cost of capital and terminal growth rates. None of our reporting units with significant goodwill is at risk of failing step one of the goodwill impairment test.

We review our indefinite-lived intangible assets for impairment annually in the fourth quarter and whenever events or changes in circumstances indicate the asset may be impaired. The provisions of the accounting standard for indefinite-lived intangible assets allow us to first assess qualitative factors to determine whether it is necessary to perform a two-step quantitative impairment test. As part of our qualitative assessment, we monitor economic, legal, regulatory and other factors, industry trends, recent and

31

forecasted financial performance of our reporting units and the timing and nature of our restructuring activities for LII as a whole and as they relate to the fair value of the assets.

We also periodically review intangible assets with estimable useful lives for impairment as events or changes in circumstances indicate that the carrying amount of such assets might not be recoverable. We assess recoverability by comparing the estimated expected undiscounted future cash flows identified with each intangible asset or related asset group to the carrying amount of such assets. If the expected future cash flows do not exceed the carrying value of the asset or assets being reviewed, an impairment loss is recognized based on the excess of the carrying amount of the impaired assets over their fair value. In assessing the fair value of these intangible assets, we must make assumptions that a market participant would make regarding estimated future cash flows and other factors to determine the fair value of the respective assets. If these estimates or the related assumptions change, we may be required to record impairment charges for these assets in the future.

Refer to Note 4 of the Notes to the Consolidated Financial Statements for more information on our goodwill and intangible assets.

Recent Accounting Pronouncements

In July 2012, the FASB updated its guidance on the impairment testing of indefinite-lived intangible assets to allow companies to first assess qualitative factors when determining if it is more likely than not that indefinite-lived intangible assets are impaired. If, as a result of the qualitative assessment, it is determined that it is not more likely than not that the indefinite-lived intangible assets are impaired, then the Company is not required to take further action. This guidance was applicable to our annual impairment tests beginning in the first quarter of 2013.

In February 2013, the FASB updated its guidance related to the presentation of comprehensive income and accumulated other

comprehensive income ("AOCI"). The updated guidance requires additional footnote disclosure of items reclassified out of AOCI and into net income as well as the effect of the reclassifications on each affected Statement of Operations line item. This updated guidance was applicable beginning in the first quarter of 2013 on a prospective basis. The required disclosures can be found in Note 13 of the Notes to the Consolidated Financial Statements.

On May 28, 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The new standard is effective for us on January 1, 2017. Early application is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. We are evaluating the effect that ASU 2014-09 will have on our consolidated financial statements and related disclosures. We have not yet selected a transition method nor have we determined the effect of the standard on our ongoing financial reporting.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

The information required by this item is included under the caption “Market Risk” in Item 7 above.

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Item 8. Financial Statements and Supplementary Data

MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

      Our management is responsible for establishing and maintaining adequate internal control over financial reporting. As defined by the Securities and Exchange Commission, internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the consolidated financial statements in accordance with U.S. generally accepted accounting principles.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management, including our Chief Executive Officer and Chief Financial Officer, has undertaken an assessment of the effectiveness of the Company's internal control over financial reporting as of December 31, 2014, based on criteria established in Internal Control - Integrated Framework (1992) by the Committee of Sponsoring Organizations of the Treadway Commission. Management's assessment included an evaluation of the design of the Company's internal control over financial reporting and testing of the operational effectiveness of those controls.

Based on this assessment, management concluded that as of December 31, 2014, the Company's internal control over financial reporting was effective.

KPMG LLP, the independent registered public accounting firm that audited the Company's consolidated financial statements, has issued an audit report including an opinion on the effectiveness of our internal control over financial reporting as of December 31, 2014, a copy of which is included herein.

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders

Lennox International Inc.:

We have audited the accompanying consolidated balance sheets of Lennox International Inc. and subsidiaries (the Company) as of December 31, 2014 and 2013, and the related consolidated statements of operations, comprehensive income, stockholders' equity and cash flows for each of the years in the three-year period ended December 31, 2014. In connection with our audits of the consolidated financial statements, we have audited Schedule II - Valuation and Qualifying Accounts and Reserves (the Schedule). We also have audited the Company's internal control over financial reporting as of December 31, 2014, based on criteria established in Internal Control - Integrated Framework (1992) by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company's management is responsible for these consolidated financial statements, the Schedule, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on these consolidated financial statements, the Schedule and an opinion on the Company's internal control over financial reporting based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

A company's internal control over financial reporting is a process designed 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. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Lennox International Inc. and subsidiaries as of December 31, 2014 and 2013, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2014, in conformity with U.S. generally accepted accounting principles. Also in our opinion, Schedule II - Valuation and Qualifying Accounts and Reserves, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein. Also in our opinion, Lennox International Inc. maintained, in all material respects, effective internal control over financial reporting as of December 31, 2014, based on criteria established in Internal Control - Integrated Framework (1992) by the Committee of Sponsoring Organizations of the Treadway Commission.

/s/ KPMG LLP

Dallas, Texas

February 17, 2015

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LENNOX INTERNATIONAL INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In millions, except shares and par values)
	As of December 31,
	2014			2013
ASSETS
Current assets:
Cash and cash equivalents	$	37.5		$	38.0
Accounts and notes receivable, net of allowances of $7.9 and $9.8 in 2014 and 2013, respectively	421.4			408.1
Inventories, net	463.3			378.8
Deferred income taxes, net	32.5			24.5
Other assets	59.3			53.0
Total current assets	1,014.0			902.4
Property, plant and equipment, net	358.6			335.5
Goodwill	209.4			216.8
Deferred income taxes	97.5			88.5
Other assets, net	84.8			83.5
Total assets	$	1,764.3		$	1,626.7
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Short-term debt	$	226.6		$	165.9
Current maturities of long-term debt	24.0			1.3
Accounts payable	324.3			283.1
Accrued expenses	239.0			232.1
Income taxes payable	13.4			31.6
Total current liabilities	827.3			714.0
Long-term debt	675.0			233.2
Post-retirement benefits, other than pensions	4.5			4.6
Pensions	129.9			70.0
Other liabilities	118.6			119.2
Total liabilities	1,755.3			1,141.0
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 issued	0.9			0.9
Additional paid-in capital	824.9			912.7
Retained earnings	1,022.1			870.5
Accumulated other comprehensive loss	(153.5		)	(61.1		)
Treasury stock, at cost, 42,535,126 shares and 38,066,794 shares for 2014 and 2013, respectively	(1,686.0		)	(1,238.1		)
Noncontrolling interests	0.6			0.8
Total stockholders’ equity	9.0			485.7
Total liabilities and stockholders' equity	$	1,764.3		$	1,626.7

The accompanying notes are an integral part of these consolidated financial statements.

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LENNOX INTERNATIONAL INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (In millions, except per share data)
	For the Years Ended December 31,
	2014			2013			2012
Net sales	$	3,367.4		$	3,199.1		$	2,949.4
Cost of goods sold	2,464.1			2,337.9			2,227.1
Gross profit	903.3			861.2			722.3
Operating expenses:
Selling, general and administrative expenses	573.7			570.1			507.0
Losses and other expenses, net	6.8			9.3			2.5
Restructuring charges	1.9			5.0			4.2
Income from equity method investments	(13.8		)	(12.2		)	(10.5		)
Operational income from continuing operations	334.7			289.0			219.1
Interest expense, net	17.2			14.5			17.1
Other expense, net	(0.1		)	0.2			0.3
Income from continuing operations before income taxes	317.6			274.3			201.7
Provision for income taxes	109.5			94.4			66.7
Income from continuing operations	208.1			179.9			135.0
Discontinued operations:
Loss from discontinued operations before income taxes	(3.7		)	(13.3		)	(64.9		)
Benefit from income taxes	(1.4		)	(5.2		)	(19.9		)
Loss from discontinued operations	(2.3		)	(8.1		)	(45.0		)
Net income	$	205.8		$	171.8		$	90.0
Earnings per share – Basic:
Income from continuing operations	$	4.35		$	3.61		$	2.66
Loss from discontinued operations	(0.05		)	(0.16		)	(0.89		)
Net income	$	4.30		$	3.45		$	1.77
Earnings per share – Diluted:
Income from continuing operations	$	4.28		$	3.55		$	2.63
Loss from discontinued operations	(0.05		)	(0.16		)	(0.88		)
Net income	$	4.23		$	3.39		$	1.75
Average shares outstanding:
Basic	47.9			49.8			50.7
Diluted	48.6			50.6			51.4
Cash dividends declared per share	$	1.14		$	0.92		$	0.76

The accompanying notes are an integral part of these consolidated financial statements.

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LENNOX INTERNATIONAL INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In millions)
	For the Years Ended December 31,
	2014			2013			2012
Net income	$	205.8		$	171.8		$	90.0
Other comprehensive income (loss):
Foreign currency translation adjustments	(45.7		)	(30.7		)	14.8
Reclassification of foreign currency translation adjustments into earnings	—			(41.1		)	(3.7		)
Net change in pension and post-retirement benefit liabilities	(75.9		)	56.7			(24.1		)
Change in fair value of available-for-sale marketable equity securities	0.7			(6.8		)	1.9
Net change in fair value of cash flow hedges	(12.1		)	(6.8		)	5.2
Reclassification of pension and post-retirement benefit losses into earnings	6.9			9.5			14.9
Reclassification of cash flow hedge losses into earnings	5.7			4.2			7.9
Other comprehensive income (loss) before taxes	(120.4		)	(15.0		)	16.9
Tax (expense) benefit	28.0			(23.8		)	(2.1		)
Other comprehensive income (loss), net of tax	(92.4		)	(38.8		)	14.8
Comprehensive income	$	113.4		$	133.0		$	104.8

The accompanying notes are an integral part of these consolidated financial statements.

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LENNOX INTERNATIONAL INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

For the Years Ended December 31, 2014, 2013 and 2012

(In millions, except per share data)

	Common Stock Issued			Additional Paid-In Capital			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Treasury Stock at Cost					Non-controlling Interests			Total Stockholders' Equity
	Shares	Amount											Shares		Amount
Balance as of December 31, 2011	86.9	$	0.9	$	881.2		$	692.9		$	(37.1	)	36.1		$	(1,070.1	)	$	1.2		$	469.0
Net income	—	—		—			90.0			—					—			—			90.0
Dividends, $0.76 per share	—	—		—			(38.5		)	—					—			—			(38.5		)
Foreign currency translation adjustments	—	—		—			—			11.1					—			0.3			11.4
Pension and post-retirement liability changes, net of tax benefit of $2.7	—	—		—			—			(6.5		)			—			—			(6.5		)
Change in fair value of available-for-sale marketable equity securities	—	—		—			—			1.9					—			—			1.9
Stock-based compensation expense	—	—		16.3			—			—					—			—			16.3
Change in cash flow hedges, net of tax expense of $4.8	—	—		—			—			8.3					—			—			8.3
Common stock issued	0.3	—		0.2			—			—					—			—			0.2
Treasury stock purchases	—	—		(2.9		)	—			—			0.8		(54.4		)	—			(57.3		)
Tax benefits of stock-based compensation	—	—		3.5			—			—					—			—			3.5
Balance as of December 31, 2012	87.2	0.9		898.3			744.4			(22.3		)	36.9		(1,124.5		)	1.5			498.3
Net income	—	—		—			171.8			—					—			—			171.8
Dividends, $0.92 per share	—	—		—			(45.7		)	—					—			—			(45.7		)
Foreign currency translation adjustments	—	—		—			—			(71.8		)			—			(0.2		)	(72.0		)
Pension and post-retirement liability changes, net of tax expense of $24.7	—	—		—			—			41.5					—			—			41.5
Change in fair value of available-for-sale marketable equity securities	—	—		—			—			(6.8		)			—			—			(6.8		)
Stock-based compensation expense	—	—		29.5			—			—					—			—			29.5
Change in cash flow hedges, net of tax benefit of $1.0	—	—		—			—			(1.7		)			—			—			(1.7		)
Treasury shares reissued for common stock	—	—		(3.9		)	—			—			(0.5	)	5.7			—			1.8
Additional investment in subsidiary	—	—		—			—			—			—		—			(0.5		)	(0.5		)
Treasury stock purchases	—	—		(17.7		)	—			—			1.7		(119.3		)	—			(137.0		)
Tax benefits of stock-based compensation	—	—		6.5			—			—					—			—			6.5
Balance as of December 31, 2013	87.2	0.9		912.7			870.5			(61.1		)	38.1		(1,238.1		)	0.8			485.7
Net income	—	—		—			205.8			—			—		—			—			205.8
Dividends, $1.14 per share	—	—		—			(54.2		)	—			—		—			—			(54.2		)
Foreign currency translation adjustments	—	—		—			—			(45.7		)	—		—			—			(45.7		)
Pension and post-retirement liability changes, net of tax benefit of $25.6	—	—		—			—			(43.4		)	—		—			—			(43.4		)
Change in fair value of available-for-sale marketable equity securities	—	—		—			—			0.7			—		—			—			0.7
Stock-based compensation expense	—	—		23.3			—			—			—		—			—			23.3
Change in cash flow hedges, net of tax benefit of $2.3	—	—		—			—			(4.0		)	—		—			—			(4.0		)
Treasury shares reissued for common stock	—	—		(5.6		)	—			—			(0.8	)	7.5			—			1.9
Additional investment in subsidiary	—	—		—			—			—			—		—			(0.2		)	(0.2		)
Treasury stock purchases	—	—		(117.3		)	—			—			5.2		(455.4		)	—			(572.7		)
Tax benefits of stock-based compensation	—	—		11.8			—			—			—		—			—			11.8
Balance as of December 31, 2014	87.2	$	0.9	$	824.9		$	1,022.1		$	(153.5	)	42.5		$	(1,686.0	)	$	0.6		$	9.0

The accompanying notes are an integral part of these consolidated financial statements.

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LENNOX INTERNATIONAL INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS For the Years Ended December 31, 2014, 2013 and 2012 (In millions)
	2014			2013			2012
Cash flows from operating activities:
Net income	$	205.8		$	171.8		$	90.0
Net loss from discontinued operations	2.3			8.1			45.0
Adjustments to reconcile net income to net cash provided by operating activities:
Income from equity method investments	(13.8		)	(12.2		)	(10.5		)
Dividends from affiliates	9.1			10.3			9.3
Restructuring expenses, net of cash paid	0.2			0.1			0.1
Provision for bad debts	2.6			3.6			3.9
Unrealized losses on derivative contracts	0.3			0.3			(1.0		)
Stock-based compensation expense	23.3			29.3			15.2
Depreciation and amortization	60.8			58.9			55.4
Deferred income taxes	6.1			3.5			(2.7		)
Pension costs in excess of (less than) contributions	(8.0		)	1.7			(15.1		)
Other items, net	0.1			4.5			2.1
Changes in assets and liabilities, net of effects of acquisitions and divestitures:
Accounts and notes receivable	(32.6		)	(49.0		)	13.3
Inventories	(96.7		)	(19.5		)	(55.8		)
Other current assets	(8.3		)	(16.3		)	(1.5		)
Accounts payable	46.1			(10.9		)	37.1
Accrued expenses	6.7			15.4			35.8
Income taxes payable and receivable	(15.9		)	21.9			18.2
Other, net	(1.0		)	4.4			(2.2		)
Net cash used in discontinued operations	(2.3		)	(15.6		)	(15.2		)
Net cash provided by operating activities	184.8			210.3			221.4
Cash flows from investing activities:
Proceeds from the disposal of property, plant and equipment	1.1			2.4			0.1
Purchases of property, plant and equipment	(88.4		)	(78.3		)	(50.2		)
Net proceeds from sale of businesses	—			8.6			10.1
Net cash used in discontinued operations	—			—			(0.4		)
Net cash used in investing activities	(87.3		)	(67.3		)	(40.4		)
Cash flows from financing activities:
Short-term borrowings, net	1.5			2.0			0.2
Asset securitization borrowings	100.0			330.0			645.0
Asset securitization payments	(40.0		)	(200.0		)	(615.0		)
Term loan borrowings from credit facility	300.0			—			—
Long-term debt payments	(2.3		)	(1.0		)	(1.1		)
Borrowings from credit facility	2,073.5			1,425.5			967.0
Payments on credit facility	(1,908.5		)	(1,543.5		)	(1,075.0		)
Payments of deferred financing costs	(2.2		)	—			—
Additional investment in subsidiary	—			(0.5		)	—
Proceeds from employee stock purchases	2.0			1.8			0.8
Repurchases of common stock	(550.3		)	(125.0		)	(50.1		)
Repurchases of common stock to satisfy employee withholding tax obligations	(22.4		)	(12.0		)	(7.8		)
Excess tax benefits related to share-based payments	11.8			6.5			3.5
Cash dividends paid	(52.6		)	(34.0		)	(47.6		)
Net cash used in financing activities	(89.5		)	(150.2		)	(180.1		)
Increase (decrease) in cash and cash equivalents	8.0			(7.2		)	0.9
Effect of exchange rates on cash and cash equivalents	(8.5		)	(6.6		)	5.9
Cash and cash equivalents, beginning of year	38.0			51.8			45.0
Cash and cash equivalents, end of year	$	37.5		$	38.0		$	51.8
Supplementary disclosures of cash flow information:
Cash paid during the year for:
Interest, net	$	17.6		$	15.7		$	18.2
Income taxes (net of refunds)	$	105.3		$	56.8		$	30.1

The accompanying notes are an integral part of these consolidated financial statements.

39

LENNOX INTERNATIONAL INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Nature of Operations:

Lennox International Inc., a Delaware corporation, through its subsidiaries (referred to herein as "we," "our," "us," "LII," or the "Company"), is a leading global provider of climate control solutions. We design, manufacture, market and service a broad range of products for the heating, ventilation, air conditioning and refrigeration ("HVACR") markets and sell our products and services through a combination of direct sales, distributors and company-owned parts and supplies stores. We operate in three reportable business segments: Residential Heating & Cooling, Commercial Heating & Cooling, and Refrigeration. See Note 19 for financial information regarding our reportable segments.

2. Summary of Significant Accounting Policies:

Principles of Consolidation

The consolidated financial statements include the accounts of Lennox International Inc. and our majority-owned subsidiaries. All intercompany transactions, profits and balances have been eliminated.

Cash and Cash Equivalents

We consider all highly liquid temporary investments with original maturity dates of three months or less to be cash equivalents. Cash and cash equivalents consisted primarily of bank deposits.

Accounts and Notes Receivable

Accounts and notes receivable are shown in the accompanying Consolidated Balance Sheets, net of allowance for doubtful accounts. The allowance for doubtful accounts is generally established during the period in which receivables are recognized and is based on the age of the receivables and management's judgment on our ability to collect. Management considers the historical trends of write-offs and recoveries of previously written-off accounts, the financial strength of customers and projected economic and market conditions. We determine the delinquency status of receivables predominantly based on contractual terms and we write-off uncollectible receivables after management's review of our ability to collect, as noted above. We have no significant concentrations of credit risk within our accounts and notes receivable.

Inventories

Inventory costs include material, labor, depreciation and plant overhead. Inventories of $212.9 million and $187.3 million as of December 31, 2014 and 2013, respectively, were valued at the lower of cost or market using the last-in, first-out (“LIFO”) cost method. The remainder of inventory is valued at the lower of cost or market with cost determined primarily using either the first-in, first-out (“FIFO”) or average cost methods.

We elected to use the LIFO cost method for our domestic manufacturing companies in 1974 and continued to elect the LIFO cost method for new operations through the late 1980s. The types of inventory costs that use LIFO include raw materials, purchased components, work-in-process, repair parts and finished goods. Since the late 1990s, we have adopted the FIFO cost method for all new domestic manufacturing operations (primarily acquisitions). Our operating entities with a previous LIFO election continue to use the LIFO cost method. We use the FIFO cost method for our foreign-based manufacturing facilities. See Note 3 for more information on our inventories.

Property, Plant and Equipment

Property, plant and equipment is stated at cost, net of accumulated depreciation. Expenditures that increase the utility or extend the useful lives of fixed assets are capitalized while expenditures for maintenance and repairs are charged to expense as incurred.

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Depreciation is computed using the straight-line method over the following estimated useful lives:

Buildings and improvements:
Buildings and improvements	5 to 30 years
Leasehold improvements	1 to 20 years
Machinery and equipment:
Computer hardware	3 to 5 years
Computer software	3 to 10 years
Factory machinery and equipment	1 to 15 years
Research and development equipment	5 to 10 years
Vehicles	3 to 8 years

We periodically review long-lived assets for impairment as events or changes in circumstances indicate that the carrying amount of such assets might not be recoverable. To assess recoverability, we compare the estimated expected future undiscounted cash flows identified with each long-lived asset or related asset group to the carrying amount of such assets. If the expected future cash flows do not exceed the carrying value of the asset or assets being reviewed, an impairment loss is recognized based on the excess of the carrying amount of the impaired assets over their fair value. See Note 5 for additional information on our property, plant and equipment.

Goodwill

Goodwill represents the excess of cost over fair value of assets from acquired businesses. Goodwill is not amortized, but is reviewed for impairment annually and whenever events or changes in circumstances indicate the asset may be impaired.

The annual goodwill impairment test was performed during the first quarter of 2014, and no impairment was recognized. During the third quarter of 2014, we changed the date of our annual goodwill impairment test from March 31^st to December 31^st. The change was made to more closely align the impairment testing date with the year-end results. The change in goodwill impairment testing date was deemed a change in accounting principle and did not delay, accelerate, or avoid a goodwill impairment charge. Management determined that the change in accounting principle was preferable under the circumstances and did not result in adjustments to our financial statements when applied retrospectively.

The provisions of the accounting standard for goodwill allow us to first assess qualitative factors to determine whether it is necessary to perform a two-step quantitative goodwill impairment test. As part of our qualitative assessment, we monitor economic, legal, regulatory and other factors, industry trends, our market capitalization, recent and forecasted financial performance of our reporting units and the timing and nature of our restructuring activities for LII as a whole and for each reporting unit.

For those reporting units which are evaluated using the two-step quantitative goodwill impairment test, we estimate reporting unit fair values using the discounted cash flow approach. The discounted cash flows used to estimate fair value are based on assumptions regarding each reporting unit’s estimated projected future cash flows and the estimated weighted-average cost of capital that a market participant would use in evaluating the reporting unit in a purchase transaction. The estimated weighted-average cost of capital is based on the risk-free interest rate and other factors such as equity risk premiums and the ratio of total debt to equity capital. In performing these impairment tests, we take steps to ensure that appropriate and reasonable cash flow projections and assumptions are used. We reconcile our estimated enterprise value to our market capitalization and determine the reasonableness of the cost of capital used by comparing to market data. We also perform sensitivity analyses on the key assumptions used, such as the weighted-average cost of capital and terminal growth rates. See Note 4 for additional information on our goodwill.

Intangible Assets

We amortize intangible assets and other assets with finite lives over their respective estimated useful lives to their estimated residual values, as follows:

Asset	Useful Life
Deferred financing costs	Effective interest method
Customer relationships	Straight-line method up to 12 years
Patents and others	Straight-line method up to 20 years

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We periodically review intangible assets with estimable useful lives for impairment as events or changes in circumstances indicate that the carrying amount of such assets might not be recoverable. We assess recoverability by comparing the estimated expected undiscounted future cash flows identified with each intangible asset or related asset group to the carrying amount of such assets. If the expected future cash flows do not exceed the carrying value of the asset or assets being reviewed, an impairment loss is recognized based on the excess of the carrying amount of the impaired assets over their fair value. In assessing the fair value of these intangible assets, we must make assumptions that a market participant would make regarding estimated future cash flows and other factors to determine the fair value of the respective assets. If these estimates or the related assumptions change, we may be required to record impairment charges for these assets in the future.

We review our indefinite-lived intangible assets for impairment annually in the fourth quarter and whenever events or changes in circumstances indicate the asset may be impaired. The provisions of the accounting standard for indefinite-lived intangible assets allow us to first assess qualitative factors to determine whether it is necessary to perform a two-step quantitative impairment test. As part of our qualitative assessment, we monitor economic, legal, regulatory and other factors, industry trends, recent and forecasted financial performance of our reporting units and the timing and nature of our restructuring activities for LII as a whole and as they relate to the fair value of the assets. For those intangible assets which are evaluated using the two-step quantitative impairment test, we compare the estimated expected undiscounted future cash flows identified with each intangible asset or related asset group to the carrying amount of such assets. If the expected future cash flows do not exceed the carrying value of the asset or assets being reviewed, an impairment loss is recognized based on the excess of the carrying amount of the impaired assets over their fair value.

Product Warranties

For some of our heating, ventilation and air conditioning (“HVAC”) products, we provide warranty terms ranging from one to 20 years to customers for certain components such as compressors or heat exchangers. For select products, we also provide limited lifetime warranties. A liability for estimated warranty expense is recorded on the date that revenue is recognized. Our estimates of future warranty costs are determined by product line. The number of units we expect to repair or replace is determined by applying an estimated failure rate, which is generally based on historical experience, to the number of units that were sold and are still under warranty. The estimated units to be repaired under warranty are multiplied by the average cost to repair or replace such products to determine the estimated future warranty cost. We do not discount product warranty liabilities as the amounts are not fixed and the timing of future cash payments is neither fixed nor reliably determinable. We also provide for specifically-identified warranty obligations. Estimated future warranty costs are subject to adjustment depending on changes in actual failure rate and cost experience. Subsequent costs incurred for warranty claims serve to reduce the accrued product warranty liability. See Note 10 for more information on our estimated future warranty costs.

Pensions and Post-retirement Benefits

We provide pension and post-retirement medical benefits to eligible domestic and foreign employees and we recognize pension and post-retirement benefit costs over the estimated service life or average life expectancy of those employees. We also recognize the funded status of our benefit plans, as measured at year-end by the difference between plan assets at fair value and the benefit obligation, in the Consolidated Balance Sheets. Changes in the funded status are recognized in the year in which the changes occur through accumulated other comprehensive income (“AOCI”). Actuarial gains or losses are amortized into net period benefit cost over the estimated service life of covered employees or average life expectancy of participants depending on the plan.

The benefit plan assets and liabilities reflect assumptions about the long-range performance of our benefit plans. Should actual results differ from management's estimates, revisions to the benefit plan assets and liabilities would be required. See Note 12 for information regarding those estimates and additional disclosures on pension and post-retirement medical benefits.

Self-Insurance

Self-insurance expense and liabilities were actuarially determined based primarily on our historical claims information and industry factors and trends. The self-insurance liabilities as of December 31, 2014 represent the best estimate of the future payments to be made on reported and unreported losses for 2014 and prior years. The amounts and timing of payments for claims reserved may vary depending on various factors, including the development and ultimate settlement of reported and unreported claims. To the extent actuarial assumptions change and claims experience rates differ from historical rates, our liabilities may change. See Note 10 for additional information on our self-insured risks and liabilities.

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Derivatives

We use futures contracts and fixed forward contracts to mitigate our exposure to volatility in metal commodity prices and foreign exchange rates. We hedge only exposures in the ordinary course of business and do not hold or trade derivatives for profit. All derivatives are recognized in the Consolidated Balance Sheets at fair value and the classification of each derivative instrument is based upon whether the maturity of the instrument is less than or greater than 12 months. See Note 8 for more information on our derivatives.

Income Taxes

We recognize deferred tax assets and liabilities for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. Unrecognized tax benefits are accounted for as required by the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 740. See Note 9 for more information related to income taxes.

Revenue Recognition

Our revenue recognition practices for the sale of goods depend upon the shipping terms for each transaction. Shipping terms are primarily FOB Shipping Point and, therefore, revenue is recognized for these transactions when products are shipped to customers and title passes. Certain customers in our smaller operations, primarily outside of North America, have shipping terms where title and risk of ownership do not transfer until the product is delivered to the customer. For these transactions, revenue is recognized on the date that the product is received and accepted by such customers. We experience returns for miscellaneous reasons and record a reserve for these returns at the time we recognize revenue based on historical experience. Our historical rates of return are insignificant as a percentage of sales. We also recognize revenue net of sales taxes.

For our businesses that provide services, revenue is recognized at the time services are completed. Our Commercial Heating & Cooling segment also provides sales, installation, maintenance and repair services under fixed-price contracts. Revenue for these services is recognized over the life of the contract.

We engage in cooperative advertising, customer rebate, cash discount and other miscellaneous programs that result in payments or credits being issued to our customers. We record these customer discounts and incentives as a reduction of sales when the sales are recorded. For certain cooperative advertising programs, we also receive an identifiable benefit (goods or services) in exchange for the consideration given, and, accordingly, record a ratable portion of the expenditure to Selling, general and administrative (“SG&A”) expenses. All other advertising, promotions and marketing costs are expensed as incurred. See Note 23 for more information on these costs.

Cost of Goods Sold

The principal elements of cost of goods sold are components, raw materials, factory overhead, labor, estimated costs of warranty expense and freight and distribution costs.

Selling, General and Administrative Expenses

SG&A expenses include payroll and benefit costs, advertising, commissions, research and development, information technology costs, and other selling, general and administrative related costs such as insurance, travel, non-production depreciation and rent.

Stock-Based Compensation

We recognize compensation expense for stock-based arrangements over the required employee service periods. We measure stock-based compensation costs on the estimated grant-date fair value of the stock-based awards that are expected to ultimately vest and we adjust expected vesting rates to actual rates as additional information becomes known. For stock-based arrangements with performance conditions, we periodically adjust performance achievement rates based on our best estimates of those rates at the end of the performance period. See Note 14 for more information.

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Translation of Foreign Currencies

All assets and liabilities of foreign subsidiaries and joint ventures are translated into U.S. dollars using rates of exchange in effect at the balance sheet date. Revenue and expenses are translated at weighted average exchange rates during the year. Unrealized translation gains and losses are included in AOCI in the accompanying Consolidated Balance Sheets. Transaction gains and losses are included in Losses and other expenses, net in the accompanying Consolidated Statements of Operations.

Use of Estimates

The preparation of financial statements requires us to make estimates and assumptions about future events. These estimates and the underlying assumptions affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities, and reported amounts of revenue and expenses. Such estimates include the valuation of accounts receivable, inventories, goodwill, intangible assets and other long-lived assets, contingencies, product warranties, guarantee obligations, indemnifications, and assumptions used in the calculation of income taxes, pension and post-retirement medical benefits, and stock-based compensation among others. These estimates and assumptions are based on our best estimates and judgment.

We evaluate these estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment. We believe these estimates and assumptions to be reasonable under the circumstances and will adjust such estimates and assumptions when facts and circumstances dictate. Volatile equity, foreign currency and commodity markets and uncertain future economic conditions combine to increase the uncertainty inherent in such estimates and assumptions. Future events and their effects cannot be determined with precision and actual results could differ significantly from these estimates. Changes in these estimates resulting from continuing changes in the economic environment will be reflected in the financial statements in future periods.

Reclassifications

Certain amounts have been reclassified from the prior year presentation to conform to the current year presentation.

3. Inventories:

The components of inventories are as follows (in millions):

	As of December 31,
	2014			2013
Finished goods	$	338.2		$	251.4
Work in process	8.1			11.8
Raw materials and parts	182.6			188.9
Total	528.9			452.1
Excess of current cost over last-in, first-out cost	(65.6		)	(73.3		)
Total inventories, net	$	463.3		$	378.8

The Company recorded pre-tax loss of $0.9 million in 2014, pre-tax income of 0.3 million in 2013 and pre-tax loss of $0.1 million in 2012 from LIFO inventory liquidations.

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4. Goodwill and Intangible Assets:

Goodwill

The changes in the carrying amount of goodwill in 2014 and 2013, in total and by segment, are summarized in the table below (in millions):

Segment:	Balance at December 31, 2012 (2)		Acquisitions / (Dispositions)		Other(1)			Balance at December 31, 2013		Acquisitions / (Dispositions)		Other(1)			Balance at December 31, 2014
Residential Heating & Cooling	$	26.1	$	—	$	—		$	26.1	$	—	$	—		$	26.1
Commercial Heating & Cooling	63.8		—		0.8			64.6		—		(2.3		)	62.3
Refrigeration	133.9		—		(7.8		)	126.1		—		(5.1		)	121.0
	$	223.8	$	—	$	(7.0	)	$	216.8	$	—	$	(7.4	)	$	209.4

⁽¹⁾ Other consists of changes in foreign currency translation rates.

⁽²⁾ The goodwill balances in the table above are presented net of accumulated impairment charges of $15.7 million, all of which relate to impairments in periods prior to 2012.

We reviewed our reporting unit structure as part of our annual goodwill impairment testing. We identified several components one level below our operating segments which were determined to be reporting units. We then performed our analysis to determine the proper aggregation of our reporting units, which considered similar economic and other characteristics, including product types, gross profits, production processes, customer types, distribution processes, and regulatory environments. Our analysis incorporated qualitative and quantitative measures to evaluate economic similarity and concluded that our reporting units continue to be equivalent to our operating segments.

A qualitative review of impairment indicators was performed in 2014 for the Residential Heating & Cooling and the Commercial Heating & Cooling segments, and we determined that it was not more likely than not the fair values of our reporting units, individually or collectively, were less than their carrying values. Accordingly, a quantitative impairment analysis was not performed for these segments. Due to the softening of the North American supermarket and Australian wholesale businesses, a quantitative impairment analysis was performed for the Refrigeration segment using the discounted cash flow approach. The Refrigeration segment was not at risk of failing step one of the quantitative impairment test, and no impairments were recognized as part of the annual test. No other indicators of impairment were identified from the date of our annual impairment test through December 31, 2014. Also, we did not record any goodwill impairments related to continuing operations in 2012 or 2013. Refer to Note 17 for information on goodwill related to discontinued operations.

Intangible Assets

As of December 31,2014 and 2013, there were $9.4 million of indefinite-lived intangible assets recorded in Other assets, net in the accompanying Consolidated Balance Sheets. These intangible assets consisted primarily of trademarks and are not subject to amortization.

Identifiable intangible and other assets subject to amortization were recorded in Other assets, net in the accompanying Consolidated Balance Sheets and were comprised of the following (in millions):

	As of December 31,
	2014							2013
	Gross Amount		Accumulated Amortization			Net Amount		Gross Amount		Accumulated Amortization			Net Amount
Deferred financing costs	$	5.4	$	(1.5	)	$	3.9	$	5.0	$	(2.3	)	$	2.7
Customer relationships	42.6		(23.1		)	19.5		42.6		(20.6		)	22.0
Patents and others	12.0		(7.6		)	4.4		10.3		(7.2		)	3.1
Total	$	60.0	$	(32.2	)	$	27.8	$	57.9	$	(30.1	)	$	27.8

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Amortization expense related to these intangible and other assets was as follows (in millions):

	For the Years Ended December 31,
	2014		2013		2012
Amortization expense	$	3.9	$	3.9	$	3.8

Estimated amortization expense for the next five years and thereafter is as follows (in millions):

Estimated Future Amortization Expense:
2015	$	3.8
2016	3.7
2017	3.5
2018	3.4
2019	3.2
Thereafter	10.2

We did not have any impairments of intangible assets related to continuing operations in 2014, 2013, or 2012. See Note 17 for information on impairments of intangible assets related to discontinued operations.

5. Property, Plant and Equipment:

Components of Property, plant and equipment, net were as follows (in millions):

	As of December 31,
	2014			2013
Land	$	38.3		$	39.5
Buildings and improvements	215.0			202.5
Machinery and equipment	681.8			634.0
Capital leases	27.0			25.2
Construction in progress and equipment not yet in service	50.6			51.6
Total	1,012.7			952.8
Less accumulated depreciation	(654.1		)	(617.3		)
Property, plant and equipment, net	$	358.6		$	335.5

No impairment charges were recorded in 2014, 2013 or 2012.

6. Joint Ventures and Other Equity Investments:

We participate in two joint ventures, the largest located in the U.S. and the other in Mexico, that are engaged in the manufacture and sale of compressors, unit coolers and condensing units. We exert significant influence over these affiliates based upon our respective 25% and 50% ownerships, but do not control them due to venture partner participation. Accordingly, these joint ventures have been accounted for under the equity method and their financial position and results of operations are not consolidated.

The combined balance of equity method investments included in Other assets, net totaled (in millions):

	As of December 31,
	2014		2013
Equity method investments	$	30.9	$	28.0

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We purchase compressors from our U.S. joint venture for use in certain of our products. The amounts of purchases included in Cost of goods sold in the Consolidated Statements of Operations were as follows (in millions):

	For the Years Ended December 31,
	2014		2013		2012
Purchases of compressors from joint venture	$	114.7	$	96.7	$	90.4

7. Accrued Expenses:

The significant components of Accrued expenses are presented below (in millions):

	As of December 31,
	2014		2013
Accrued compensation and benefits	$	73.3	$	85.7
Self insurance reserves	13.0		13.4
Deferred income	11.6		9.8
Accrued warranties	27.3		28.7
Accrued product quality reserves	4.2		3.4
Accrued Sales, Use and VAT taxes	8.7		7.1
Accrued rebates and promotions	45.4		37.0
Derivative contracts	7.4		1.5
Other	48.1		45.5
Total Accrued expenses	$	239.0	$	232.1

8. Derivatives:

Objectives and Strategies for Using Derivative Instruments

Commodity Price Risk. We utilize a cash flow hedging program to mitigate our exposure to volatility in the prices of metal commodities used in our production processes. Our hedging program includes the use of futures contracts to lock in prices, and as a result, we are subject to derivative losses should the metal commodity prices decrease and gains should the prices increase. We utilize a dollar cost averaging strategy so that a higher percentage of commodity price exposures are hedged near-term with lower percentages hedged at future dates. This strategy allows for protection against near-term price volatility while allowing us to adjust to market price movements over time.

Interest Rate Risk. A portion of our debt bears interest at variable interest rates, and as a result, we are subject to variability in the cash paid for interest. To mitigate a portion of that risk, we may choose to engage in an interest rate swap hedging strategy to eliminate the variability of interest payment cash flows. Prior to 2013, we used an interest rate swap hedge to fix the interest payments associated with the first $100 million of the total variable-rate debt outstanding under our revolving credit facility tied to changes in the benchmark interest rate. The variable portion of the interest rate swap was tied to the 1-Month LIBOR (the benchmark interest rate). On a monthly basis, the interest rates for both the interest rate swap and the underlying debt were reset, the swap was settled with the counterparty, and the interest was paid. The interest rate swap was classified as a cash flow hedge and it expired on October 12, 2012. Subsequently, we have not hedged against interest rate risk.

Foreign Currency Risk. Foreign currency exchange rate movements create a degree of risk by affecting the U.S. dollar value of assets and liabilities arising in foreign currencies. We seek to mitigate the impact of currency exchange rate movements on certain short-term transactions by periodically entering into foreign currency forward contracts. These forward contracts are not designated as hedges and generally expire during the quarter that we enter into them. By entering into forward contracts, we lock in exchange rates that would otherwise cause losses should the U.S. dollar appreciate and gains should the U.S. dollar depreciate.

Cash Flow Hedges

We have commodity futures contracts designated as cash flows hedges that are scheduled to mature through June 2016. Unrealized gains or losses from our cash flow hedges are included in accumulated other comprehensive income (“AOCI”) and are expected to be reclassified into earnings within the next 18 months based on the prices of the commodities at the settlement dates.

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We recorded the following amounts related to our cash flow hedges in AOCI (in millions):

	As of December 31,
	2014			2013
Unrealized losses on unsettled contracts	$	7.2		$	0.8
Income tax expense (benefit)	(2.6		)	(0.2		)
Losses included in AOCI, net of tax (1)	$	4.6		$	0.6

⁽¹⁾ Assuming commodity prices remain constant, we expect to reclassify $4.2 million of derivative losses into earnings within the next 12 months.

We had the following outstanding commodity futures contracts designated as cash flow hedges (in millions of pounds):

	As of December 31,
	2014	2013
Copper	29.4	22.9

Derivatives not Designated as Cash Flow Hedges

For commodity derivatives not designated as cash flow hedges, we follow the same hedging strategy as derivatives designated as cash flow hedges, except that we elect not to designate them as cash flow hedges at the inception of the arrangement. We had

the following outstanding commodity futures contracts not designated as cash flow hedges (in millions of pounds):

	As of December 31,
	2014	2013
Copper	2.9	2.0
Aluminum	2.2	2.7

We had the following outstanding foreign currency forward contracts not designated as cash flow hedges (in millions):

	As of December 31,
	2014	2013
Notional amounts (in local currency):
Brazilian Real	8.7	1.2
Mexican Peso	229.7	130.0
United States Dollar	4.5	—
Euro	3.6	—
British Pound	—	3.4
Russian Ruble	80.8	—
Indian Rupee	—	28.0
Polish Zloty	30.6	32.6

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Information About the Locations and Amounts of Derivative Instruments

The following tables provide the locations and amounts of derivative fair values in the Consolidated Balance Sheets and derivative gains and losses in the Consolidated Statements of Operations (in millions):

	Fair Values of Derivative Instruments as of December 31 (1)
	Derivatives Designated as Hedging Instruments				Derivatives Not Designated  as Hedging Instruments
	2014		2013		2014		2013
Current Assets:
Other assets
Commodity futures contracts	$	—	$	0.1	$	—	$	—
Foreign currency forward contracts	—		—		0.3		0.1
Non-Current Assets:
Other assets, net
Commodity futures contracts	—		0.3		—		—
Total Assets	$	—	$	0.4	$	0.3	$	0.1
Current Liabilities:
Accrued expenses
Commodity futures contracts	$	6.7	$	1.2	$	0.7	$	0.3
Foreign currency forward contracts	—		—		—		—
Non-Current Liabilities:
Other liabilities
Commodity futures contracts	0.5		—		0.1		—
Total Liabilities	$	7.2	$	1.2	$	0.8	$	0.3

⁽¹⁾ All derivative instruments are classified as Level 2 within the fair value hierarchy. See Note 20 for more information on fair value measurements.

Derivatives in Cash Flow Hedging Relationships
	For the Years Ended December 31,
	2014		2013		2012
Amount of Loss (Gain) Reclassified from AOCI into Income (Effective Portion):
Commodity futures contracts (1)	$	5.8	$	4.2	$	6.0
Interest rate swap (2)	—		—		1.9
	$	5.8	$	4.2	$	7.9
Amount of (Gain) Loss Recognized in Income on Derivatives (Ineffective Portion):
Commodity futures contracts (3)	$	0.1	$	0.2	$	(0.1	)

Derivatives Not Designated as Hedging Instruments
	For the Years Ended December 31,
	2014			2013		2012
Amount of Loss (Gain) Recognized in Income on Derivatives:
Commodity futures contracts (3)	$	1.2		$	1.2	$	(0.5	)
Foreign currency forward contracts (3)	(0.8		)	0.1		0.4
	$	0.4		$	1.3	$	(0.1	)

⁽¹⁾ The loss (gain) was recorded in Cost of goods sold in the accompanying Consolidated Statements of Operations.

⁽²⁾ The loss was recorded in Interest expense, net in the accompanying Consolidated Statements of Operations.

⁽³⁾ The loss (gain) was recorded in Losses and other expenses, net in the accompanying Consolidated Statements of Operations.

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9. Income Taxes:

Our Provision for income taxes from continuing operations consisted of the following (in millions):

	For the Years Ended December 31,
	2014		2013			2012
Current:
Federal	$	84.3	$	71.9		$	47.5
State	10.1		8.5			7.3
Foreign	9.6		16.2			13.4
Total current	104.0		96.6			68.2
Deferred:
Federal	2.3		(4.0		)	0.7
State	1.0		2.5			(0.2		)
Foreign	2.2		(0.7		)	(2.0		)
Total deferred	5.5		(2.2		)	(1.5		)
Total provision for income taxes	$	109.5	$	94.4		$	66.7

Income from continuing operations before income taxes was comprised of the following (in millions):

	For the Years Ended December 31,
	2014		2013		2012
Domestic	$	283.7	$	231.1	$	169.9
Foreign	33.9		43.2		31.8
Total	$	317.6	$	274.3	$	201.7

The difference between the income tax provision from continuing operations computed at the statutory federal income tax rate and the financial statement Provision for income taxes is summarized as follows (in millions):

	For the Years Ended December 31,
	2014			2013			2012
Provision at the U.S. statutory rate of 35%	$	111.2		$	96.0		$	70.6
Increase (reduction) in tax expense resulting from:
State income tax, net of federal income tax benefit	8.8			7.1			5.9
Other permanent items	(8.2		)	(6.4		)	(3.1		)
Research tax credit	—			(0.5		)	—
Change in unrecognized tax benefits	0.2			0.7			(5.1		)
Change in valuation allowance	0.2			0.7			2.3
Foreign taxes at rates other than 35% and miscellaneous other	(2.7		)	(3.2		)	(3.9		)
Total provision for income taxes	$	109.5		$	94.4		$	66.7

Deferred income taxes reflect the tax consequences on future years of temporary differences between the tax basis of assets and liabilities and their financial reporting basis and are reflected as current or non-current depending on the classification of the asset or liability generating the deferred tax. The deferred tax provision for the periods shown represents the effect of changes in the amounts of temporary differences during those periods.

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Deferred tax assets (liabilities) were comprised of the following (in millions):

	As of December 31,
	2014			2013
Gross deferred tax assets:
Warranties	$	30.9		$	29.3
Loss carryforwards (foreign, U.S. and state)	23.6			28.2
Post-retirement and pension benefits	50.7			28.3
Inventory reserves	4.4			4.8
Receivables allowance	4.9			5.1
Compensation liabilities	19.6			22.6
Deferred income	1.0			0.9
Insurance liabilities	15.8			18.1
Legal reserves	11.1			10.7
Hedges	2.8			0.6
State credits, net of federal effect	8.8			8.7
Other	9.2			7.7
Total deferred tax assets	182.8			165.0
Valuation allowance	(21.2		)	(21.2		)
Total deferred tax assets, net of valuation allowance	161.6			143.8
Gross deferred tax liabilities:
Depreciation	(10.8		)	(12.4		)
Intangibles	(11.0		)	(8.7		)
Other	(9.9		)	(9.7		)
Total deferred tax liabilities	(31.7		)	(30.8		)
Net deferred tax assets	$	129.9		$	113.0

As of December 31, 2014 and 2013, we had $3.8 million and $5.0 million in tax-effected state net operating loss carryforwards, respectively, and $18.5 million and $21.8 million in tax-effected foreign net operating loss carryforwards, respectively. The state and foreign net operating loss carryforwards began expiring in 2014. The deferred tax asset valuation allowance relates primarily to the operating loss carryforwards in various states in the U.S., European and Asian tax jurisdictions. The remainder of the valuation allowance relates to state tax credits which began to expire in 2014.

In assessing whether a deferred tax asset will be realized, we consider whether it is more likely than not that some portion or all of the deferred tax asset will not be realized. We consider the reversal of existing taxable temporary differences, projected future taxable income and tax planning strategies in making this assessment. Based upon the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are deductible, we believe it is more likely than not we will realize the benefits of these deductible differences, net of the existing valuation allowances, as of December 31, 2014.

To realize the net deferred tax asset, we will need to generate future foreign taxable income of approximately $71.2 million during the periods in which those temporary differences become deductible. We do not need to generate additional U.S. federal income as we have sufficient carryback capacity to fully realize the federal deferred tax asset. U.S. taxable income for the years ended December 31, 2014 and 2013 was $201.6 million and $198.7 million, respectively.

No provision was made for income taxes which may become payable upon distribution of our foreign subsidiaries' earnings. These earnings were approximately $122.2 million as of December 31, 2014. It is not practicable to estimate the amount of tax that might be payable because our intent is to permanently reinvest these earnings or to repatriate earnings when it is tax effective to do so.

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A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in millions):

Balance as of December 31, 2012	$	1.0
Increases related to prior year tax positions	0.7
Decreases related to prior year tax positions	(0.1		)
Increases related to current year tax positions	0.1
Balance as of December 31, 2013	1.7
Increases related to prior year tax positions	0.7
Decreases related to prior year tax positions	(0.7		)
Increases related to current year tax positions	—
Settlement	$	(0.1	)
Balance as of December 31, 2014	$	1.6

Included in the balance of unrecognized tax benefits as of December 31, 2014 are potential benefits of $1.2 million that, if recognized, would affect the effective tax rate on income from continuing operations. As of December 31, 2014, we recognized $0.2 million (net of federal tax benefits) in interest and penalties in income tax expense.

We are currently under examination for our U.S. federal income taxes for 2014 and 2013 and are subject to examination by numerous other taxing authorities in the U.S. and in jurisdictions such as Australia, Belgium, France, Canada, and Germany. We are generally no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by taxing authorities for years before 2009.

Since January 1, 2013, numerous states, including New Mexico, North Carolina, North Dakota, Minnesota, Oregon, Texas and West Virginia enacted legislation effective for tax years beginning on or after January 1, 2013, including changes to rates and apportionment methods. The impact of these changes is immaterial.

10. Commitments and Contingencies:

Leases

We lease certain real and personal property under non-cancelable operating leases. Some of our lease agreements contain rent escalation clauses (including index-based escalations), rent holidays, capital improvement funding or other lease concessions. We recognize our minimum rental expense on a straight-line basis. We amortize this expense over the term of the lease beginning with the date of initial possession, which is the date we enter the leased space and begin to make improvements in preparation for its intended use.

Future annual minimum lease payments and capital lease commitments as of December 31, 2014 were as follows (in millions):

	Operating Leases		Capital Leases
2015	$	37.8	$	1.5
2016	29.4		0.8
2017	24.0		0.5
2018	18.5		0.3
2019	12.1		0.1
Thereafter	19.7		14.3
Total minimum lease payments	$	141.5	17.5
Less amount representing interest			(0.5		)
Present value of minimum payments			$	17.0

On March 22, 2013, we entered into an agreement with a financial institution to renew the lease of our corporate headquarters in Richardson, Texas for a term of approximately six years through March 1, 2019 (the “Lake Park Renewal”). The leased property consists of an office building of approximately 192,000 square feet, land and related improvements. During the lease term, the Lake Park Renewal requires us to pay base rent in quarterly installments, payable in arrears. At the end of the lease term, we must

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do one of the following: (i) purchase the property for $41.2 million; (ii) vacate the property and return it in good condition; (iii) arrange for the sale of the leased property to a third party; or (iv) renew the lease under mutually agreeable terms. If we elect to sell the property to a third party and the sales proceeds are less than the lease balance, we must pay any such deficit to the financial institution. Any such deficit payment cannot exceed 86% of the lease balance. The Lake Park Renewal is classified as an operating lease and its future annual minimum lease payments are included in the table above.

Our obligations under the Lake Park Lease are secured by a pledge of our interest in the leased property. The Lake Park Renewal contains customary lease covenants and events of default as well as events of default if (i) indebtedness of $75 million or more is not paid when due, (ii) there is a change of control or (iii) we fail to comply with certain covenants incorporated from our Fifth Amended and Restated Credit Facility Agreement. We were in compliance with these financial covenants as of December 31, 2014.

Environmental

Environmental laws and regulations in the locations we operate can potentially impose obligations to remediate hazardous substances at our properties, properties formerly owned or operated by us, and facilities to which we have sent or send waste for treatment or disposal. We are aware of contamination at some facilities, however, we do not believe that any future remediation related to those facilities will be material to our results of operations. Total environmental accruals are included in the following captions on the accompanying Consolidated Balance Sheets (in millions):

	As of December 31,
	2014		2013
Accrued expenses	$	1.7	$	1.4
Other liabilities	4.5		3.8
Total environmental accruals	$	6.2	$	5.2

Future environmental costs are estimates and may be subject to change due to changes in environmental remediation regulations, technology or site-specific requirements.

Product Warranties and Product Related Contingencies

We incur the risk of liability for claims related to the installation and service of heating and air conditioning products, and we maintain liabilities for those claims that we self-insure. We are involved in various claims and lawsuits related to our products. Our product liability insurance policies have limits that, if exceeded, may result in substantial costs that could have an adverse effect on our results of operations. In addition, warranty claims and certain product liability claims are not covered by our product liability insurance.

Total product warranty liabilities related to continuing operations are included in the following captions on the accompanying Consolidated Balance Sheets (in millions):

	As of December 31,
	2014		2013
Accrued expenses	$	27.3	$	28.7
Other liabilities	59.9		52.9
Total product warranty liabilities	$	87.2	$	81.6

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The changes in product warranty liabilities related to continuing operations for the years ended December 31, 2014 and 2013 were as follows (in millions):

Total warranty liability as of December 31, 2012	$	71.9
Payments made in 2013	(21.3		)
Changes resulting from issuance of new warranties	29.6
Changes in estimates associated with pre-existing liabilities	1.6
Changes in foreign currency translation rates and other	(0.2		)
Total warranty liability as of December 31, 2013	$	81.6
Payments made in 2014	(23.1		)
Changes resulting from issuance of new warranties	33.4
Changes in estimates associated with pre-existing liabilities	(3.5		)
Changes in foreign currency translation rates and other	(1.2		)
Total warranty liability as of December 31, 2014	$	87.2

We have incurred, and will likely continue to incur, product costs not covered by insurance or our suppliers’ warranties.   Also, to satisfy our customers and protect our brands,  we have repaired or replaced installed products experiencing quality-related issues, and will likely continue such repairs and replacements.   We currently estimate our probable liability for a supplier quality issue within a range of $2.2 million and $6 million; accordingly, we accrued, as of December 31, 2014, a $2.2 million liability in Accrued Expenses on the Consolidated Balance Sheet because all amounts in that range were equally likely. The supplier has agreed to reimburse our costs related to this liability; accordingly, we also recorded, as of December 31, 2014, a receivable of $2.2 million in Other Assets on the Consolidated Balance Sheet.  If additional costs are incurred, we expect the supplier will also reimburse those costs. The $2.2 million accrual is not included in the estimated warranty liabilities tables immediately above. 

Self Insurance

We use a combination of third-party insurance and self-insurance plans to provide protection against claims relating to workers' compensation/employers' liability, general liability, product liability, auto liability, auto physical damage and other exposures. We use large deductible insurance plans, written through third-party insurance providers, for workers' compensation/employers' liability, general liability, product liability and auto liability. We also carry umbrella or excess liability insurance for all third-party and self-insurance plans, except for directors' and officers' liability, property damage and certain other insurance programs. For directors' and officers' liability, property damage and certain other exposures, we use third-party insurance plans that may include per occurrence and annual aggregate limits. We believe the deductibles and liability limits for all of our insurance policies are appropriate for our business and are adequate for companies of our size in our industry.

We maintain safety and manufacturing programs that are designed to remove risk, improve the effectiveness of our business processes and reduce the likelihood and significance of our various retained and insured risks. In recent years, our actual claims experience has collectively trended favorably and, as a result, both self-insurance expense and the related liability have decreased.

Total self-insurance liabilities were included in the following captions on the accompanying Consolidated Balance Sheets (in millions):

	As of December 31,
	2014		2013
Accrued expenses	$	13.0	$	13.4
Other liabilities	25.8		32.0
Total self-insurance liabilities	$	38.8	$	45.4

Litigation

We are involved in a number of claims and lawsuits incident to the operation of our businesses. Insurance coverages are maintained and estimated costs are recorded for such claims and lawsuits, including costs to settle claims and lawsuits, based on experience involving similar matters and specific facts known.

Some of these claims and lawsuits allege personal injury or health problems resulting from exposure to asbestos that was integrated into certain of our products. We have never manufactured asbestos and have not incorporated asbestos-containing

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components into our products for several decades. A substantial majority of asbestos-related claims have been covered by insurance or other forms of indemnity or have been dismissed without payment. The remainder of our closed cases have been resolved for amounts that are not material, individually or in the aggregate. Our defense costs for asbestos-related claims are generally covered by insurance; however, our insurance coverage for settlements and judgments for asbestos-related claims vary depending on several factors, and are subject to policy limits, so we may have greater financial exposure for future settlements and judgments. For the years ended December 31, 2014 and 2013, we recorded expense of $0.9 million and $6.3 million, respectively, net of probable insurance recoveries, for known and future asbestos-related litigation.

We are the defendant in an attempted class action lawsuit which alleges that evaporator coils in our residential air conditioning products are susceptible to a type of corrosion that can result in coil leaks, and asserts claims for relief.  We dispute the allegations in the lawsuit.  The outcome related to this action is uncertain but we do not expect this lawsuit to have a material adverse effect on our financial condition or results of operations.

It is management's opinion that none of these claims or lawsuits or any threatened litigation will have a material adverse effect on our financial condition, results of operations or cash flows. Claims and lawsuits, however, involve uncertainties and it is possible that their eventual outcome could adversely affect our results of operations in a future period.

11. Lines of Credit and Financing Arrangements:

The following tables summarize our outstanding debt obligations and the classification in the accompanying Consolidated Balance Sheets (in millions):

	As of December 31,
	2014		2013
Short-Term Debt:
Asset Securitization Program	$	220.0	$	160.0
Foreign obligations	6.6		5.9
Total short-term debt	$	226.6	$	165.9
Current maturities of long-term debt:
Capital lease obligations	$	1.5	$	1.3
Domestic credit facility	$	22.5	$	—
Long-Term Debt:
Capital lease obligations	$	15.5	$	16.2
Domestic credit facility	459.5		17.0
Senior unsecured notes	200.0		200.0
Total long-term debt	$	675.0	$	233.2
Total debt	$	925.6	$	400.4

As of December 31, 2014, the aggregate amounts of required principal payments on total debt were as follows (in millions):

2015	$	250.6
2016	31.2
2017	230.0
2018	32.6
2019	369.5
Thereafter	11.7

Short-Term Debt

Short Term Facility

On October 20, 2014, Lennox International Inc. (the “Company”) entered into a short term loan agreement (the “Short-Term Facility”) with JPMorgan Chase Bank, N.A., as administrative agent, and Morgan Stanley Bank, N.A. and the other lenders named therein, to borrow $250.0 million. The Short-Term Facility had a maturity date of March 31, 2015, but was prepaid in full without

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penalty in November 2014. The term loan bore interest at a variable base rate or a variable rate based on the London interbank offered rate, at the Company’s election, plus a spread.

Foreign Obligations

Through several of our foreign subsidiaries, we have available to us facilities to assist in financing seasonal borrowing needs for our foreign locations. We had $6.6 million and $5.9 million of foreign obligations as of December 31, 2014 and 2013, respectively, that were primarily borrowings under non-committed facilities. Proceeds on these facilities were $18.1 million, $18.3 million and $18.5 million during the years ended December 31, 2014, 2013 and 2012, respectively. Repayments on the facilities were $16.6 million, $16.3 million and $18.3 million during the years ended December 31, 2014, 2013 and 2012, respectively.

Asset Securitization Program

Under the Asset Securitization Program (“ASP”), we are eligible to sell beneficial interests in a portion of our trade accounts receivable to participating financial institutions for cash. The ASP is subject to annual renewal and contains a provision whereby we retain the right to repurchase all of the outstanding beneficial interests transferred. Our continued involvement with the transferred assets includes servicing, collection and administration of the transferred beneficial interests. The accounts receivable securitized under the ASP are high-quality domestic customer accounts that have not aged significantly. The receivables represented by the retained interest that we service are exposed to the risk of loss for any uncollectible amounts in the pool of receivables sold under the ASP. The fair values assigned to the retained and transferred interests are based on the sold accounts receivable carrying value given the short term to maturity and low credit risk. The sale of the beneficial interests in our trade accounts receivable are reflected as secured borrowings in the accompanying Consolidated Balance Sheets and proceeds received are included in cash flows from financing activities in the accompanying Consolidated Statements of Cash Flows.

In November 2014, we amended the ASP, extending its term to November 13, 2015 and increasing the maximum securitization amount from a range of $160.0 million to $220.0 million to a range of $180.0 million to $220.0 million, depending on the period. The maximum capacity under the ASP is the lesser of the maximum securitization amount or 100% of the net pool balance less reserves, as defined by the ASP. Eligibility for securitization is limited based on the amount and quality of the qualifying accounts receivable and is calculated monthly. The eligible amounts available and beneficial interests sold were as follows (in millions):

	As of December 31,
	2014		2013
Eligible amount available under the ASP on qualified accounts receivable	$	220.0	$	160.0
Beneficial interest sold	220.0		160.0
Remaining amount available	$	—	$	—

We pay certain discount fees to use the ASP and to have the facility available to us. These fees relate to both the used and unused portions of the securitization. The used fee is based on the beneficial interest sold and calculated on either the average LIBOR rate or floating commercial paper rate determined by the purchaser of the beneficial interest, plus a program fee of 0.60%. The average rates as of December 31, 2014 and 2013 were 0.79% and 0.78%, respectively. The unused fee is based on 101% of the maximum available amount less the beneficial interest sold and calculated at a 0.30% fixed rate throughout the term of the agreement. In addition, a 0.05% unused fee is charged on incremental available amounts above $180.0 million during certain months of the year. We recorded these fees in Interest expense, net in the accompanying Consolidated Statements of Operations.

The ASP contains certain restrictive covenants relating to the quality of our accounts receivable and cross-default provisions with our Fifth Amended and Restated Credit Facility Agreement ("Domestic Credit Facility"), senior unsecured notes and any other indebtedness we may have over $75.0 million. The administrative agent under the ASP is also a participant in our Domestic Credit Facility. The participating financial institutions have investment grade credit ratings. We continue to evaluate their credit ratings and have no reason to believe they will not perform under the ASP. As of December 31, 2014, we were in compliance with all covenant requirements.

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Long-Term Debt

Domestic Credit Facility

On November 13, 2014, we replaced our $650 million Domestic Revolving Credit Facility with a $950 million Domestic Credit Facility, which consists of a $650 million revolving credit facility and a $300 million term loan and matures in November 2019. Under our $950 million Domestic Credit Facility, we had outstanding borrowings of $482.0 million as well as 27.2 million committed to standby letters of credit as of December 31, 2014. Subject to covenant limitations, $440.8 million was available for future borrowings. The unsecured $300 million term loan also matures on the Maturity Date and requires quarterly principal repayments of $7.5 million beginning on June 30, 2015. The revolving credit facility allows up to $150 million of letters of credit to be issued and also includes a subfacility for swingline loans of up to $65 million. Additionally, at our request and subject to certain conditions, the commitments under the Domestic Credit Facility may be increased by a maximum of $350 million as long as existing or new lenders agree to provide such additional commitments.

Our weighted average borrowing rate on the facility was as follows:

	As of December 31,
	2014		2013
Weighted average borrowing rate	1.88	%	1.17	%

Our Domestic Credit Facility is guaranteed by certain of our subsidiaries and contains financial covenants relating to leverage and interest coverage. Other covenants contained in the Domestic Credit Facility restrict, among other things, certain mergers, asset dispositions, guarantees, debt, liens, and affiliate transactions. The financial covenants require us to maintain a defined Consolidated Indebtedness to Adjusted EBITDA Ratio and a Cash Flow (defined as EBITDA minus capital expenditures) to Net Interest Expense Ratio. The required ratios under our Domestic Credit Facility are detailed below:

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

Our Domestic Credit Facility contains customary events of default. These events of default include nonpayment of principal or interest, breach of covenants or other restrictions or requirements, default on certain other indebtedness or receivables securitizations (cross default), and bankruptcy. A cross default under our Domestic Credit Facility could occur if:

• 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.

Each of our major debt agreements contains provisions by which a default under one agreement causes a default in the others (a cross default). If a cross default under the Domestic Credit Facility, our senior unsecured notes, the Lake Park Renewal or our ASP were to occur, it could have a wider impact on our liquidity than might otherwise occur from a default of a single debt instrument or lease commitment.

If any event of default occurs and is continuing, lenders with a majority of the aggregate commitments may require the administrative agent to terminate our right to borrow under our Domestic Credit Facility and accelerate amounts due under our Domestic Credit Facility (except for a bankruptcy event of default, in which case such amounts will automatically become due and payable and the lenders’ commitments will automatically terminate). As of December 31, 2014, we were in compliance with all covenant requirements.

Senior Unsecured Notes

We issued $200.0 million of senior unsecured notes in May 2010 through a public offering. Interest is paid semiannually on May 15 and November 15 at a fixed interest rate of 4.90% per annum. These notes mature on May 15, 2017. The notes are guaranteed, on a senior unsecured basis, by each of our domestic subsidiaries that guarantee payment by us of any indebtedness under our Domestic 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;

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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. As of December 31, 2014, we were in compliance with all covenant requirements.

12. Employee Benefit Plans:

Over the past several years, we have frozen many of our defined benefit pension and profit sharing plans and replaced them with defined contribution plans. We have a liability for the benefits earned under these inactive plans prior to the date the benefits were frozen. Our defined contribution plans generally include both company and employee contributions which are based on predetermined percentages of compensation earned by the employee. We also have several active defined benefit plans that provide benefits based on years of service.

In addition to freezing the benefits of our defined benefit pension plans, we have also eliminated nearly all of our post-retirement medical benefits. In 2012, we amended the post-retirement benefit plan to shift pre-65 medical coverage for the employees of our largest manufacturing plant so that by 2015, retirees would pay 100% of the cost of post-retirement medical coverage. This change resulted in a significant reduction in the projected benefit obligation for post-retirement medical benefits in 2012.

Defined Contribution Plans

We recorded the following expenses related to our contributions to the defined contribution plans (in millions):

	For the Years Ended December 31,
	2014		2013		2012
Contributions to defined contribution plans (1)	$	14.8	$	13.7	$	13.2

⁽¹⁾ Contributions of $0.4 million and $2.0 million were included in Loss from discontinued operations for the years ended December 31, 2013 and 2012, respectively. No contributions were included in Loss from discontinued operations in 2014.

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Pension and Post-retirement Benefit Plans

The following tables set forth amounts recognized in our financial statements and the plans' funded status for our pension and post-retirement benefit plans (dollars in millions):

	Pension Benefits						Other Benefits
	2014			2013			2014			2013
Accumulated benefit obligation	$	439.6		$	367.3		N/A			N/A
Changes in projected benefit obligation:
Benefit obligation at beginning of year	$	374.6		$	413.9		$	6.0		$	7.6
Service cost	4.2			5.2			—			—
Interest cost	17.7			16.2			0.2			0.2
Plan participants' contributions	—			—			0.6			0.7
Amendments	—			—			—			—
Other	—			0.1			—			—
Actuarial (gain) loss	77.0			(39.4		)	0.6			—
Effect of exchange rates	(4.3		)	(0.7		)	—			—
Divestiture	—			—			—			—
Settlements and curtailments	(0.8		)	(1.6		)	—			—
Benefits paid	(21.9		)	(19.1		)	(2.0		)	(2.5		)
Benefit obligation at end of year	$	446.5		$	374.6		$	5.4		$	6.0
Changes in plan assets:
Fair value of plan assets at beginning of year	$	302.8		$	276.8		$	—		$	—
Actual gain return on plan assets	23.3			37.4			—			—
Employer contribution	14.5			9.9			1.4			1.8
Plan participants' contributions	—			—			0.6			0.7
Effect of exchange rates	(2.9		)	(0.6		)	—			—
Divestiture	—			—			—			—
Plan settlements	(0.8		)	(1.6		)	—			—
Benefits paid	(21.9		)	(19.1		)	(2.0		)	(2.5		)
Fair value of plan assets at end of year	315.0			302.8			—			—
Funded status / net amount recognized	$	(131.5	)	$	(71.8	)	$	(5.4	)	$	(6.0	)
Net amount recognized consists of:
Current liability	$	(1.6	)	$	(1.8	)	$	(0.9	)	$	(1.4	)
Non-current liability	(129.9		)	(70.0		)	(4.5		)	(4.6		)
Net amount recognized	$	(131.5	)	$	(71.8	)	$	(5.4	)	$	(6.0	)

	For the Years Ended December 31,
	2014		2013
Pension plans with a benefit obligation in excess of plan assets:
Projected benefit obligation	$	446.5	$	374.6
Accumulated benefit obligation	439.6		367.3
Fair value of plan assets	315.0		302.8

Our U.S.-based pension plans comprised approximately 88% of the projected benefit obligation and 87% of plan assets as of December 31, 2014.

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	Pension Benefits									Other Benefits
	2014			2013			2012			2014			2013			2012
Components of net periodic benefit cost as of December 31:
Service cost	$	4.2		$	5.2		$	5.8		$	—		$	—		$	0.2
Interest cost	17.7			16.2			17.5			0.2			0.2			0.4
Expected return on plan assets	(22.7		)	(20.7		)	(19.0		)	—			—			—
Amortization of prior service cost	0.3			0.4			0.4			(3.1		)	(3.1		)	(2.7		)
Recognized actuarial loss	6.6			9.2			8.7			1.5			1.5			1.4
Settlements and curtailments	0.4			1.5			7.1			—			—			—
Net periodic benefit cost (1)	$	6.5		$	11.8		$	20.5		$	(1.4	)	$	(1.4	)	$	(0.7	)

⁽¹⁾ Pension expense of $0.2 million and $6.9 million was included in Loss for discontinued operations for the years ended December 31, 2013 and 2012, respectively. No pension expense was included in Loss from discontinued operations in 2014.

The following table sets forth amounts recognized in AOCI and Other comprehensive income (loss) in our financial statements for 2014 and 2013 (in millions):

	Pension Benefits						Other Benefits
	2014			2013			2014			2013
Amounts recognized in AOCI:
Prior service costs	$	(1.3	)	$	(1.7	)	$	18.1		$	21.1
Actuarial loss	(231.8		)	(164.4		)	(19.8		)	(20.7		)
Subtotal	(233.1		)	(166.1		)	(1.7		)	0.4
Deferred taxes	84.7			59.9			0.6			(0.2		)
Net amount recognized	$	(148.4	)	$	(106.2	)	$	(1.1	)	$	0.2
Changes recognized in other comprehensive income (loss):
Adjustment to OCI due to reclassification	$	—		$	—		$	—		$	—
Current year prior service costs	—			—			—			—
Current year actuarial (gain) loss	75.9			(56.1		)	0.6			—
Effect of exchange rates	(1.8		)	(0.6		)	—			—
Amortization of prior service (costs) credits	(0.3		)	(1.1		)	3.1			3.1
Amortization of actuarial loss	(7.0		)	(10.0		)	(1.5		)	(1.5		)
Total recognized in other comprehensive income	$	66.8		$	(67.8	)	$	2.2		$	1.6
Total recognized in net periodic benefit cost and other comprehensive income (loss)	$	73.3		$	(56.0	)	$	0.8		$	0.2

The estimated prior service (costs) credits and actuarial losses that will be amortized from AOCI in 2014 are $(0.2) million and $(10.3) million, respectively, for pension benefits and $2.8 million and $(1.4) million, respectively, for other benefits.

The following tables set forth the weighted-average assumptions used to determine Benefit Obligations and Net Periodic Benefit Cost for the U.S.-based plans in 2014 and 2013:

	Pension Benefits				Other Benefits
	2014		2013		2014		2013
Weighted-average assumptions used to determine benefit obligations as of December 31:
Discount rate	4.04	%	4.88	%	3.23	%	3.57	%
Rate of compensation increase	4.23	%	4.23	%	—		—

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	Pension Benefits						Other Benefits
	2014		2013		2012		2014		2013		2012
Weighted-average assumptions used to determine net periodic benefit cost for the years ended December 31:
Discount rate	4.88	%	3.97	%	4.83	%	3.57	%	2.72	%	4.64	%
Expected long-term return on plan assets	8.00	%	8.00	%	8.00	%	—		—		—
Rate of compensation increase	4.23	%	4.23	%	4.23	%	—		—		—

The following tables set forth the weighted-average assumptions used to determine Benefit Obligations and Net Periodic Benefit Cost for the non-U.S.-based plans in 2014 and 2013:

	Pension Benefits
	2014		2013
Weighted-average assumptions used to determine benefit obligations as of December 31:
Discount rate	3.45	%	4.38	%
Rate of compensation increase	3.66	%	3.31	%

	Pension Benefits
	2014		2013		2012
Weighted-average assumptions used to determine net periodic benefit cost for the years ended December 31:
Discount rate	4.38	%	4.12	%	4.93	%
Expected long-term return on plan assets	6.32	%	6.05	%	6.26	%
Rate of compensation increase	3.31	%	3.48	%	3.68	%

To develop the expected long-term rate of return on assets assumption for the U.S. plans, we considered the historical returns and the future expectations for returns for each asset category, as well as the target asset allocation of the pension portfolio and the effect of periodic balancing. These results were adjusted for the payment of reasonable expenses of the plan from plan assets. This resulted in the selection of the 8.0% long-term rate of return on assets assumption. A similar process was followed for the non-U.S.-based plans.

To select a discount rate for the purpose of valuing the plan obligations for the U.S. plans, we performed an analysis in which the duration of projected cash flows from defined benefit and retiree healthcare plans was matched with a yield curve based on the appropriate universe of high-quality corporate bonds that were available. We used the results of the yield curve analysis to select the discount rate that matched the duration and payment stream of the benefits in each plan. This resulted in the selection of the 4.94% discount rate assumption for the U.S. qualified pension plans, 4.30% for the U.S. non-qualified pension plans, and 3.23% for the other benefits. A similar process was followed for the non-U.S.-based plans.

Assumed health care cost trend rates have an effect on the amounts reported for our healthcare plan. The following table sets forth the healthcare trend rate assumptions used:

	2014		2013
Assumed health care cost trend rates as of December 31:
Health care cost trend rate assumed for next year	7.50	%	8.00	%
Rate to which the cost rate is assumed to decline (the ultimate trend rate)	5.00	%	5.00	%
Year that the rate reaches the ultimate trend rate	2020		2020

A one percentage-point change in assumed healthcare cost trend rates would have the following effects (in millions):

	1-Percentage-Point Increase		1-Percentage-Point Decrease
Effect on total of service and interest cost	$	—	$	—
Effect on the post-retirement benefit obligation	0.2		(0.2		)

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Expected future benefit payments are shown in the table below (in millions):

	For the Years Ended December 31,
	2015		2016		2017		2018		2019		2020-2024
Pension benefits	$	18.0	$	18.3	$	18.9	$	19.5	$	20.0	$	124.9
Other benefits	0.9		0.7		0.6		0.6		0.5		1.7

Pension Plan Assets

We believe asset returns can be optimized at an acceptable level of risk by adequately diversifying the plan assets between equity and fixed income. In the first quarter of 2014, in order to increase diversification, we changed the targeted allocations for our plan assets. The target allocations for fixed income, money market, cash and guaranteed investment contracts investments increased from 40% to 58% while targeted equity investment allocations declined from 60% to 42%. We decreased our exposure to International equity from 24% to 17% of total assets and reduced our exposure to domestic equity from 36% to 25%. These categories are further diversified among various asset classes including high yield and emerging markets debt, and international and emerging markets equities in order to avoid significant concentrations of risk. Our U.S. pension plan represents 88%, our Canadian pension plan 6%, and our United Kingdom (“U.K.”) pension plan 6% of the total fair value of our plan assets as of December 31, 2014.

Our U.S. pension plans' weighted-average asset allocations as of December 31, 2014 and 2013, by asset category, are as follows:

	Plan Assets as of December 31,
Asset Category:	2014		2013
U.S. equity	28.3	%	37.8	%
International equity	17.1	%	26.7	%
Fixed income	52.6	%	33.8	%
Money market/cash	2.0	%	1.7	%
Total	100.0	%	100.0	%

U.S. pension plan assets are invested within the following range targets:

Asset Category:	Target
U.S. equity	25.0	%
International equity	17.0	%
Fixed income	56.0	%
Money market/cash/guaranteed investment contracts	2.0	%

Our Canadian pension plan was invested solely in a balanced fund that maintains diversification among various asset classes, including Canadian common stocks, bonds and money market securities, international equities and fixed income investments. Our U.K. pension plan was invested in a broad mix of assets consisting of U.K., international equities, and U.K. fixed income securities, including corporate and government bonds.

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The fair values of our pension plan assets, by asset category, are as follows (in millions):

	Fair Value Measurements as of December 31, 2014
	Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)	Total
Asset Category:
Cash and cash equivalents	5.8	—	—	5.8
Commingled pools / Collective Trusts:
U.S. equity (1)	—	78.0	—	78.0
International equity (2)	—	47.3	—	47.3
Fixed income (3)	—	145.4	—	145.4
Balanced pension trust: (4)
International equity	—	4.7	—	4.7
Fixed income	—	14.2	—	14.2
Pension fund:
International equity (5)	—	11.4	—	11.4
Fixed income (6)	—	8.2	—	8.2
Total	5.8	309.2	—	315.0

	Fair Value Measurements as of December 31, 2013
	Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)	Total
Asset Category:
Cash and cash equivalents	8.2	—	—	8.2
Commingled pools / Collective Trusts:
U.S. equity (1)	—	100.1	—	100.1
International equity (2)	—	70.8	—	70.8
Fixed income (3)	—	89.4	—	89.4
Balanced pension trust: (4)
International equity	—	10.8	—	10.8
Fixed income	—	7.2	—	7.2
Pension fund:
International equity (5)	—	9.4	—	9.4
Fixed income (6)	—	6.9	—	6.9
Total	8.2	294.6	—	302.8

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Additional information about assets measured at Net Asset Value (“NAV”) per share (in millions):

	As of December 31, 2014
	Fair Value		Redemption Frequency  (if currently eligible)	Redemption Notice Period
Asset Category:
Commingled pools / Collective Trusts:
U.S. equity (1)	$	78.0	Daily	5 days
International equity (2)	47.3		Daily	5 days
Fixed income (3)	145.4		Daily	5-15 days
Balanced pension trust: (4)
International equity	4.7		Daily	3-5 days
Fixed income	14.2		Daily	3-5 days
Pension fund:
International equity (5)	11.4		Daily	1-7 days
Fixed income (6)	8.2		Daily	1-7 days
Total	$	309.2

	As of December 31, 2013
	Fair Value		Redemption Frequency  (if currently eligible)	Redemption Notice Period
Asset Category:
Commingled pools / Collective Trusts:
U.S. equity (1)	$	100.1	Daily	5 days
International equity (2)	70.8		Daily	5 days
Fixed income (3)	89.4		Daily	5-15 days
Balanced pension trust: (4)
International equity	10.8		Daily	3-5 days
Fixed income	7.2		Daily	3-5 days
Pension fund:
International equity (5)	9.4		Daily	7 days
Fixed income (6)	6.9		Daily	7 days
Total	$	294.6

(1)	This category includes investments primarily in U.S. equity securities that include large, mid and small capitalization companies.
(2)	This category includes investments primarily in international equity securities that include large, mid and small capitalization companies in large developed markets as well as emerging markets equities.
(3)	This category includes investments in U.S. investment grade and high yield fixed income securities, international fixed income securities and emerging markets fixed income securities.
(4)	The investment objectives of the fund are to provide long-term capital growth and income by investing primarily in a well-diversified, balanced portfolio of Canadian common stocks, bonds and money market securities. The fund also holds a portion of its assets in international equities.
(5)	This category includes investments in international equity securities and aims to provide returns consistent with the markets in which it invests and provide broad exposure to countries around the world.
(6)	This category includes investments in U.K. government index-linked securities (index-linked gilts) that have maturity periods of 5 years or longer and investment grade corporate bonds denominated in sterling.

The majority of our commingled pool/collective trusts, mutual funds, balanced pension trusts and pension funds are managed by professional investment advisors. The NAVs per share are furnished in monthly and/or quarterly statements received from the

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investment advisors and reflect valuations based upon their pricing policies. We assessed the fair value classification of these investments as Level 2 for commingled pool/collective trusts, balanced pension trusts and pension funds based on an examination of their pricing policies and the related controls and procedures. The fair values we report are based on the pool, trust or fund's NAV per share. The NAVs per share are calculated periodically (daily or no less than one time per month) as the aggregate value of each pool or trust's underlying assets divided by the number of units owned. See Note 20 for information about our fair value hierarchies and valuation techniques.

13. Comprehensive Income:

The following table provides information on items not reclassified in their entirety from AOCI to Net Income in the accompanying Consolidated Statements of Operations (in millions):

	For the Years Ended December 31,
AOCI Component	2014			2013			Affected Line Item(s) in the Consolidated Statements of Operations
Losses on cash flow hedges:
Commodity derivative contracts	$	(5.8	)	$	(4.2	)	Cost of goods sold
Income tax benefit	2.0			1.5			Provision for income taxes
Net of tax	$	(3.8	)	$	(2.7	)
Defined Benefit Plan Items:
Pension and Post-Retirement Benefits costs	$	(6.9	)	$	(9.5	)	Cost of goods sold; Selling, general and administrative expenses
Income tax benefit	2.4			3.4			Provision for income taxes
Net of tax	$	(4.5	)	$	(6.1	)
Foreign currency translation adjustments:
Sale of foreign business (1)	$	—		$	41.1		Loss from discontinued operations
Total reclassifications from AOCI	$	(8.3	)	$	32.3

⁽¹⁾ The reclassification of foreign currency translation adjustments related to the sale of the Service Experts business in the first quarter of 2013. Refer to Note 17 for details.

The following tables provide information on changes in AOCI, by component (net of tax), for the years ended December 31, 2014 and 2013 (in millions):

	Gains (Losses) on Cash Flow Hedges			Unrealized Gains (Losses) on Available-for-Sale Securities		Defined Benefit Plan Items			Foreign Currency Translation Adjustments			Total AOCI
Balance as of December 31, 2013	$	(0.6	)	$	2.5	$	(106.0	)	$	43.0		$	(61.1	)
Other comprehensive (loss) income before reclassifications	(7.8		)	0.7		(47.9		)	(45.7		)	(100.7		)
Amounts reclassified from AOCI	3.8			—		4.5			—			8.3
Net other comprehensive (loss) income	(4.0		)	0.7		(43.4		)	(45.7		)	(92.4		)
Balance as of December 31, 2014	$	(4.6	)	$	3.2	$	(149.4	)	$	(2.7	)	$	(153.5	)

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	Gains (Losses) on Cash Flow Hedges			Unrealized Gains (Losses) on Available-for-Sale Securities			Defined Benefit Plan Items			Foreign Currency Translation Adjustments			Total AOCI
Balance as of December 31, 2012	$	1.1		$	9.3		$	(147.5	)	$	114.8		$	(22.3	)
Other comprehensive (loss) income before reclassifications	(4.4		)	(6.8		)	35.4			(30.7		)	(6.5		)
Amounts reclassified from AOCI	2.7			—			6.1			(41.1		)	(32.3		)
Net other comprehensive (loss) income	(1.7		)	(6.8		)	41.5			(71.8		)	(38.8		)
Balance as of December 31, 2013	$	(0.6	)	$	2.5		$	(106.0	)	$	43.0		$	(61.1	)

14. Stock-Based Compensation:

Stock-Based compensation expense related to continuing operations was included in Selling, general and administrative expenses in the accompanying Consolidated Statements of Operations as follows (in millions):

	For the Years Ended December 31,
	2014		2013		2012
Compensation expense(1)	$	23.3	$	29.3	$	15.2

⁽¹⁾ Stock-Based compensation expense was recorded in our Corporate and other business segment.

Incentive Plan

Under the Lennox International Inc. 2010 Incentive Plan, as amended and restated (the “2010 Incentive Plan”), we are authorized to issue awards for 24.3 million shares of common stock. The 2010 Incentive Plan provides for various long-term incentive awards, including performance share units, restricted stock units and stock appreciation rights. A description of these long-term incentive awards and related activity within each award category is provided below.

As of December 31, 2014, awards for 20.5 million shares of common stock had been granted, net of cancellations and repurchases, and there were 3.8 million shares available for future issuance.

Performance Share Units

Performance share units are granted to certain employees at the discretion of the Board of Directors with a three-year performance period beginning January 1^st of each year. Upon meeting the performance and vesting criteria, performance share units are converted to an equal number of shares of our common stock. Performance share units vest if, at the end of the three-year performance period, at least the threshold performance level has been attained. To the extent that the payout level attained is less than 100%, the difference between 100% and the units earned and distributed will be forfeited. Eligible participants may also earn additional units of our common stock, which would increase the potential payout up to 200% of the units granted, depending on LII's performance over the three-year performance period.

Performance share units are classified as equity awards. Compensation expense is recognized ratably over the service period and is based on the expected number of units to be earned and the fair value of the stock at the date of grant. The fair value of units is calculated as the average of the high and low market price of the stock on the date of grant discounted by the expected dividend rate over the service period. The number of units expected to be earned will be adjusted in future periods as necessary to reflect changes in the estimated number of award to be issued and, upon vesting, the actual number of units awarded. Our practice is to issue new shares of common stock or utilize treasury stock to satisfy performance share unit distributions.

The following table provides information on our performance share units:

	For the Years Ended December 31,
	2014			2013			2012
Compensation expense for performance share units (in millions)	$	11.5		$	17.1		$	5.7
Weighted-average fair value of grants, per share	$	88.26		$	78.00		$	48.64
Payout ratio for shares paid	153.2		%	86.9		%	52.5		%

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A summary of the status of our undistributed performance share units as of December 31, 2014, and changes during the year then ended, is presented below (in millions, except per share data):

	Shares		Weighted- Average Grant Date Fair Value per Share
Undistributed performance share units as of December 31, 2013	0.7		$	47.83
Granted	0.1		88.26
Adjustments to shares paid based on payout ratio	0.2		31.78
Distributed	(0.2	)	44.85
Forfeited	—		—
Undistributed performance share units as of December 31, 2014 (1)	0.8		$	49.47

⁽¹⁾ Undistributed performance share units include approximately 0.4 million units with a weighted-average grant date fair value of $68.27 per share that had not yet vested and 0.4 million units that have vested but were not yet distributed.

As of December 31, 2014, we had $15.9 million of total unrecognized compensation cost related to non-vested performance share units that is expected to be recognized over a weighted-average period of 2.2 years. Our estimated forfeiture rate for these performance share units was 16.5% as of December 31, 2014.

The total fair value of performance share units distributed and the resulting tax deductions to realize tax benefits were as follows (in millions):

	For the Years Ended December 31,
	2014		2013		2012
Fair value of performance share units distributed	$	19.6	$	9.9	$	6.0
Realized tax benefits from tax deductions	$	7.5	$	3.8	$	2.3

Restricted Stock Units

Restricted stock units are issued to attract and retain key employees. Generally, at the end of a three-year retention period, the units will vest and be distributed in shares of our common stock to the participant. Our practice is to issue new shares of common stock or utilize treasury stock to satisfy restricted stock unit vestings. Restricted stock units are classified as equity awards. The fair value of units granted is the average of the high and low market price of the stock on the date of grant discounted by the expected dividend rate over the service period. Units are amortized to compensation expense ratably over the service period.

The following table provides information on our restricted stock units (in millions, except per share data):

	For the Years Ended December 31,
	2014		2013		2012
Compensation expense for restricted stock units	$	7.0	$	6.8	$	5.0
Weighted-average fair value of grants, per share	$	88.26	$	77.26	$	48.45

A summary of our non-vested restricted stock units as of December 31, 2014 and changes during the year then ended is presented below (in millions, except per share data):

	Shares		Weighted- Average Grant Date Fair Value per Share
Non-vested restricted stock units as of December 31, 2013	0.5		$	48.83
Granted	0.1		88.26
Distributed	(0.2	)	32.42
Forfeited	—		—
Non-vested restricted stock units as of December 31, 2014	0.4		$	69.09

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As of December 31, 2014, we had $14.9 million of total unrecognized compensation cost related to non-vested restricted stock units that is expected to be recognized over a weighted-average period of 2.4 years. Our estimated forfeiture rate for restricted stock units was 16.9% as of December 31, 2014.

The total fair value of restricted stock units vested and the resulting tax deductions to realize tax benefits were as follows (in millions):

	For the Years Ended December 31,
	2014		2013		2012
Fair value of restricted stock units vested	$	19.5	$	11.1	$	8.6
Realized tax benefits from tax deductions	7.4		4.3		3.3

Stock Appreciation Rights

Stock appreciation rights are issued to certain key employees. Each recipient is given the “right” to receive a value, paid in shares of our common stock, equal to the future appreciation of our common stock price. Stock appreciation rights generally vest in one-third increments beginning on the first anniversary date after the grant date and expire after seven years. Our practice is to issue new shares of common stock or utilize treasury stock to satisfy the exercise of stock appreciation rights.

The following table provides information on our stock appreciation rights (in millions, except per share data):

	For the Years Ended December 31,
	2014		2013		2012
Compensation expense for stock appreciation rights	$	4.8	$	5.4	$	4.5
Weighted-average fair value of grants, per share	19.55		18.76		14.34

Compensation expense for stock appreciation rights is based on the fair value on the date of grant, estimated using the Black-Scholes-Merton valuation model, and is recognized over the service period. We used historical stock price data to estimate the expected volatility. We determined that the recipients of stock appreciation rights can be combined into one employee group that has similar historical exercise behavior and we used our historical pattern of award exercises to estimate the expected life of the awards for the employee group. The risk-free interest rate was based on the zero-coupon U.S. Treasury yield curve with a maturity equal to the expected life of the awards at the time of grant.

The fair value of the stock appreciation rights granted in 2014, 2013 and 2012 were estimated on the date of grant using the following assumptions:

	2014		2013		2012
Expected dividend yield	1.75	%	1.36	%	1.75	%
Risk-free interest rate	1.27	%	1.12	%	0.48	%
Expected volatility	29.60	%	31.50	%	40.42	%
Expected life (in years)	4.04		4.02		4.14

A summary of our stock appreciation rights as of December 31, 2014, and changes during the year then ended, is presented below (in millions, except per share data):

	Shares		Weighted-Average Exercise Price per Share
Outstanding stock appreciation rights as of December 31, 2013	1.8		$	45.58
Granted	0.2		92.64
Exercised	(0.5	)	35.91
Forfeited	—		—
Outstanding stock appreciation rights as of December 31, 2014	1.5		$	56.20
Exercisable stock appreciation rights as of December 31, 2014	1.0		$	43.65

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The following table summarizes information about stock appreciation rights outstanding as of December 31, 2014 (in millions, except per share data and years):

	Stock Appreciation Rights Outstanding				Stock Appreciation Rights Exercisable
Range of Exercise Prices	Shares	Weighted-Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value		Shares	Weighted-Average Remaining Contractual Life (in years)	Aggregate Intrinsic Value
$28.24 to $36.94	0.5	3.1	$	33.2	0.5	3.1	$	33.2
$46.78 to $51.40	0.5	4.3	$	22.3	0.4	4.1	$	17.6
$81.11 to $92.64	0.5	6.5	$	4.1	0.1	6.0	$	1.2

As of December 31, 2014, we had $8.5 million of unrecognized compensation cost related to non-vested stock appreciation rights that is expected to be recognized over a weighted-average period of 2.3 years. Our estimated forfeiture rate for stock appreciation rights was 15.6% as of December 31, 2014.

The total intrinsic value of stock appreciation rights exercised and the resulting tax deductions to realize tax benefits were as follows (in millions):

	For the Years Ended December 31,
	2014		2013		2012
Intrinsic value of stock appreciation rights exercised	$	27.3	$	16.7	$	14.4
Realized tax benefits from tax deductions	$	10.4	$	6.4	$	5.5

Employee Stock Purchase Plan

Under the 2012 Employee Stock Purchase Plan (“ESPP”), all employees who meet certain service requirements are eligible to purchase our common stock through payroll deductions at the end of three month offering periods. The purchase price for such shares is 95% of the fair market value of the stock on the last day of the offering period. A maximum of 2.5 million shares is authorized for purchase until the ESPP plan termination date of May 10, 2022, unless terminated earlier at the discretion of the Board of Directors. Employees purchased approximately 20,000 shares under the ESPP during the year ended December 31, 2014. Approximately 2.4 million shares remain available for purchase under the ESPP as of December 31, 2014.

15. Stock Repurchases:

Our Board of Directors has authorized a total of $1.4 billion towards the repurchase of shares of our common stock (collectively referred to as the "Share Repurchase Plans"), including a $700.0 million share repurchase authorization in October 2014. The Share Repurchase Plans authorize open market repurchase transactions and do not have a stated expiration date. As of December 31, 2014, $395.9 million of shares may still be repurchased under the Share Repurchase Plans.

On October 20, 2014, we announced our plans for a new $450.0 million accelerated share repurchase program. For the years ended December 31, 2014 and 2013, we repurchased 5.2 million shares for $550.3 million and 1.7 million shares for $125.0 million, respectively, under the Share Repurchase Plans. The final number of shares to be repurchased and the aggregate cost to LII will be based on LII's volume-weighted average stock price during the term of the transaction, which is expected to be completed in the second half of 2015.

We also repurchased 0.2 million shares for $22.4 million and 0.2 million shares for $12.0 million for the years ended December 31, 2014 and 2013, respectively, from employees who surrendered their shares to satisfy minimum tax withholding obligations upon the vesting of stock-based compensation awards.

16. Restructuring Charges:

We record restructuring charges associated with management-approved restructuring plans to reorganize or to remove duplicative headcount and infrastructure within our businesses. Restructuring charges include severance costs to eliminate a specified number of employees, infrastructure charges to vacate facilities and consolidate operations, contract cancellation costs and other related activities. The timing of associated cash payments is dependent upon the type of restructuring charge and can extend over a multi-year period. Restructuring charges are not included in our calculation of segment profit (loss), as more fully explained in Note 19.

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Restructuring Activities in 2014

Information regarding the restructuring charges for all ongoing activities are presented in the table below (in millions):

	Incurred in 2014		Incurred to Date		Total Expected to be Incurred
Severance and related expense	$	1.4	$	6.9	$	7.2
Asset write-offs and accelerated depreciation	0.3		1.8		1.8
Equipment moves	—		—		—
Lease termination	—		—		0.1
Other	0.2		1.9		2.3
Total	$	1.9	$	10.6	$	11.4

While restructuring charges are excluded from our calculation of segment profit (loss), the table below presents the restructuring charges associated with each segment (in millions):

	Incurred in 2014			Incurred to Date		Total Expected to be Incurred
Residential Heating & Cooling	$	0.4		$	1.5	$	1.5
Commercial Heating & Cooling	—			0.9		0.9
Refrigeration	1.6			8.2		9.0
Corporate & Other	(0.1		)	—		—
Total	$	1.9		$	10.6	$	11.4

Restructuring accruals are included in Accrued expenses in the accompanying Consolidated Balance Sheets. The activity within the restructuring accruals is summarized in the tables below (in millions):

Description of Reserves:	Balance as of December 31, 2013		Charged to Earnings		Cash Utilization			Non-Cash Utilization and Other			Balance as of December 31, 2014
Severance and related expense	$	1.6	$	1.4	$	(1.5	)	$	—		$	1.5
Asset write-offs and accelerated depreciation	—		0.3		—			(0.2		)	0.1
Equipment moves	—		—		—			—			—
Lease termination	—		—		—			—			—
Other	—		0.2		(0.2		)	—			—
Total restructuring reserves	$	1.6	$	1.9	$	(1.7	)	$	(0.2	)	$	1.6

Description of Reserves:	Balance as of December 31, 2012		Charged to Earnings		Cash Utilization			Non-Cash Utilization and Other			Balance as of December 31, 2013
Severance and related expense	$	0.7	$	2.7	$	(1.6	)	$	(0.2	)	$	1.6
Asset write-offs and accelerated depreciation	—		0.7		—			(0.7		)	—
Equipment moves	—		0.1		(0.1		)	—			—
Lease termination	1.2		—		(1.2		)	—			—
Other	0.5		1.5		(2.0		)	—			—
Total restructuring reserves	$	2.4	$	5.0	$	(4.9	)	$	(0.9	)	$	1.6

17. Discontinued Operations:

On March 22, 2013, we sold our Service Experts business to a majority-owned entity of American Capital, Ltd. (the "Buyer") in an all-cash transaction for net proceeds of $10.4 million, excluding transaction costs. We also entered into a two-year equipment and parts supply agreement with the Buyer. In April 2012, we sold our Hearth business to Comvest Investment Partners IV in an

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all-cash transaction for net proceeds of $10.1 million, excluding the transaction costs and cash transferred with the business. The gains and losses on the sale of these businesses and their operating results for all periods are presented in discontinued operations.

Service Experts

A summary of net sales and pre-tax gains and losses for the Service Experts business is detailed below (in millions):

	For the Years Ended December 31,
	2014		2013			2012
Net sales (1)	$	—	$	73.5		$	385.1
Pre-tax operating income (loss) (1)(2)	2.6		(15.1		)	(50.8		)
Gain on sale of business	—		1.4			—

⁽¹⁾ Excludes eliminations of intercompany sales and any associated profit.

⁽²⁾ Pre-tax operating loss for the year ended December 31, 2012 included a $20.5 million goodwill impairment loss.

There were no assets or liabilities related to the Service Experts business included in the accompanying Consolidated Balance Sheets as of December 31, 2014 or 2013.

Hearth

A summary of net sales and pre-tax gains and losses for the Hearth business is detailed below (in millions):

	For the Years Ended December 31,
	2014			2013		2012
Net sales (1)	$	—		$	—	$	23.5
Pre-tax operating income (loss) (1)(2)	(6.3		)	0.5		(13.7		)
Loss on sale of business	—			—		(0.9		)

⁽¹⁾ Excludes eliminations of intercompany sales and any associated profit.

⁽²⁾ Pre-tax operating loss in 2012 included a $6.3 million pre-tax impairment charge for the write-down of net assets to their estimated fair value, a $6.3 million settlement charge related to actuarial losses recognized upon transition of a pension obligation to the acquirer of the Hearth business and a $3.5 million gain related to realized foreign currency translation adjustments.

There were no assets or liabilities related to the Hearth business included in the accompanying Consolidated Balance Sheets as of December 31, 2014 or 2013.

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18. Earnings Per Share:

Basic earnings per share are computed by dividing net income by the weighted-average number of common shares outstanding during the period. Diluted earnings per share are computed by dividing net income by the sum of the weighted-average number of shares and the number of equivalent shares assumed outstanding, if dilutive, under our stock-based compensation plans.

The computations of basic and diluted earnings per share for Income from continuing operations were as follows (in millions, except per share data):

	For the Years Ended December 31,
	2014			2013			2012
Net income	$	205.8		$	171.8		$	90.0
Add: Loss from discontinued operations	2.3			8.1			45.0
Income from continuing operations	$	208.1		$	179.9		$	135.0
Weighted-average shares outstanding – basic	47.9			49.8			50.7
Add: Potential effect of diluted securities attributable to stock-based payments	0.7			0.8			0.7
Weighted-average shares outstanding – diluted	48.6			50.6			51.4
Earnings per share - Basic:
Income from continuing operations	$	4.35		$	3.61		$	2.66
Loss from discontinued operations	(0.05		)	(0.16		)	(0.89		)
Net income	$	4.30		$	3.45		$	1.77
Earnings per share - Diluted:
Income from continuing operations	$	4.28		$	3.55		$	2.63
Loss from discontinued operations	(0.05		)	(0.16		)	(0.88		)
Net income	$	4.23		$	3.39		$	1.75

The following stock appreciation rights were outstanding but not included in the diluted earnings per share calculation because the assumed exercise of such rights would have been anti-dilutive (in millions, except for per share data):

	For the Years Ended December 31,
	2014	2013	2012
Weighted-average number of shares	0.3	0.1	0.1
Price ranges per share	$81.11 - $92.64	$81.11 - $81.14	$51.11 - $51.40

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19. Reportable Business Segments:

Description of Segments

We operate in three reportable business segments of the heating, ventilation, air conditioning and refrigeration (“HVACR”) industry. Our segments are organized primarily by the nature of the products and services we provide. The following table describes each segment:

Segment	Products or Services	Markets Served	Geographic Areas
Residential Heating & Cooling	Furnaces, air conditioners, heat pumps, packaged heating and cooling systems, indoor air quality equipment, comfort control products, replacement parts	Residential Replacement; Residential New Construction	United States Canada
Commercial Heating & Cooling	Unitary heating and air conditioning equipment, applied systems, controls, installation and service of commercial heating and cooling equipment	Light Commercial	United States Canada Europe
Refrigeration	Condensing units, unit coolers, fluid coolers, air cooled condensers, air handlers, process chillers, controls, compressorized racks, supermarket display cases and systems	Light Commercial; Food Preservation; Non-Food/Industrial	United States Canada Europe Asia Pacific South America

In September 2012, we announced the planned sale of our Service Experts business. The Service Experts business had previously been reported within the Service Experts reportable segment along with the Lennox National Account Services ("NAS") business. Beginning in the third quarter of 2012, the Service Experts business was included in discontinued operations, NAS was included in our Commercial Heating & Cooling segment, and the Service Experts segment was eliminated. Results for all periods have been revised to reflect this new presentation.

Segment Data

We use segment profit or loss as the primary measure of profitability to evaluate operating performance and to allocate capital resources. We define segment profit or loss as a segment’s income or loss from continuing operations before income taxes included in the accompanying Consolidated Statements of Operations, excluding certain items. The reconciliation below details the items excluded.

Our corporate costs include those costs related to corporate functions such as legal, internal audit, treasury, human resources, tax compliance and senior executive staff. Corporate costs also include the long-term share-based incentive awards provided to employees throughout LII. We recorded these share-based awards as Corporate costs because they are determined at the discretion of the Board of Directors and based on the historical practice of doing so for internal reporting purposes.

As they arise, transactions between segments are recorded on an arm’s-length basis using the relevant market prices. Any intercompany sales and associated profit (and any other intercompany items) are eliminated from segment results. There were no significant intercompany eliminations included in the results presented in the table below.

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Net sales and segment profit (loss) by segment, along with a reconciliation of segment profit (loss) to Income from continuing operations before income taxes, are shown below (in millions):

	For the Years Ended December 31,
	2014			2013			2012
Net Sales (1)
Residential Heating & Cooling	$	1,736.5		$	1,583.2		$	1,375.8
Commercial Heating & Cooling	878.5			844.4			785.4
Refrigeration	752.4			771.5			788.2
	$	3,367.4		$	3,199.1		$	2,949.4
Segment Profit (Loss) (2)
Residential Heating & Cooling	$	235.8		$	180.1		$	102.9
Commercial Heating & Cooling	124.0			118.1			99.5
Refrigeration	55.4			90.2			81.9
Corporate and other	(74.3		)	(87.9		)	(60.1		)
Subtotal that includes segment profit and eliminations	340.9			300.5			224.2
Reconciliation to income from continuing operations before income taxes:
Special product quality adjustments	(1.4		)	(2.3		)	1.1
Items in Losses and other expenses, net that are excluded from segment profit (loss) (2)	4.7			8.8			(0.2		)
Restructuring charges	1.9			5.0			4.2
Interest expense, net	17.2			14.5			17.1
Special inventory write down	1.0			—			—
Other expense, net	(0.1		)	0.2			0.3
Income from continuing operations before income taxes	$	317.6		$	274.3		$	201.7

⁽¹⁾ On a consolidated basis, no revenue from transactions with a single customer were 10% or greater of our consolidated net sales for any of the periods presented.

⁽²⁾ The Company defines segment profit and loss as a segment's income or loss from continuing operations before income taxes included in the accompanying Consolidated Statements of Operations, excluding:

• Special product quality adjustments;

• The following items in Losses and other expenses, net:

◦ Net change in unrealized gains and/or losses on unsettled futures contracts,

◦ Special legal contingency charges,

◦ Asbestos-related litigation,

◦ Environmental liabilities, and

◦ Other items, net;

• Restructuring charges;

• Goodwill, long-lived asset, and equity method investment impairments;

• Interest expense, net;

• Special inventory write down; and

• Other expense, net.

The assets in the Corporate and other segment primarily consist of cash, short-term investments and deferred tax assets. Assets recorded in the operating segments represent those assets directly associated with those segments.

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Total assets by segment are shown below (in millions):

	As of December 31,
	2014		2013		2012
Total Assets:
Residential Heating & Cooling	$	632.3	$	500.0	$	457.5
Commercial Heating & Cooling	353.4		346.3		321.9
Refrigeration	551.5		572.0		585.3
Corporate and other	227.1		208.4		228.6
Assets for continuing operations	1,764.3		1,626.7		1,593.3
Discontinued operations (See Note 17)	—		—		98.6
Total assets	$	1,764.3	$	1,626.7	$	1,691.9

Total capital expenditures by segment are shown below (in millions):

	For the Years Ended December 31,
	2014		2013		2012
Capital Expenditures:
Residential Heating & Cooling	$	39.4	$	34.2	$	13.7
Commercial Heating & Cooling	14.1		11.2		8.7
Refrigeration	15.8		16.5		15.6
Corporate and other	19.1		16.4		12.2
Total capital expenditures (1)	$	88.4	$	78.3	$	50.2

⁽¹⁾ Includes amounts recorded under capital leases. There were no significant new capital leases in 2014, 2013 or 2012.

Depreciation and amortization expenses by segment are shown below (in millions):

	For the Years Ended December 31,
	2014		2013		2012
Depreciation and Amortization:
Residential Heating & Cooling	$	20.7	$	20.5	$	19.9
Commercial Heating & Cooling	9.3		9.0		8.5
Refrigeration	16.3		15.3		13.0
Corporate and other	14.5		14.1		14.0
Total depreciation and amortization	$	60.8	$	58.9	$	55.4

The equity method investments are shown below (in millions):

	For the Years Ended December 31,
	2014		2013		2012
Income from Equity Method Investments:
Refrigeration	$	2.5	$	2.5	$	2.6
Corporate and other (1)	11.3		9.7		7.9
Total income from equity method investments	$	13.8	$	12.2	$	10.5

⁽¹⁾ We allocated $11.7 million, $9.6 million and $5.0 million of income from equity method investments to our Residential Heating & Cooling and Commercial Heating & Cooling segments in 2014, 2013 and 2012, respectively. These allocations were recorded as reductions to the segments' Cost of goods sold in the Consolidated Statements of Operations.

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Geographic Information

Net sales for each major geographic area in which we operate are shown below (in millions):

	For the Years Ended December 31,
	2014		2013		2012
Net Sales to External Customers by Point of Shipment:
United States	$	2,576.4	$	2,382.0	$	2,147.2
Canada	236.3		232.3		226.7
International	554.7		584.8		575.5
Total net sales to external customers	$	3,367.4	$	3,199.1	$	2,949.4

Property, plant and equipment, net for each major geographic area in which we operate, based on the domicile of our operations, are shown below (in millions):

	As of December 31,
	2014		2013		2012
Property, Plant and Equipment, net:
United States	$	243.4	$	230.3	$	227.9
Mexico	52.4		39.7		28.0
Canada	0.6		0.6		0.6
International	62.2		64.9		41.7
Total Property, plant and equipment, net	$	358.6	$	335.5	$	298.2

20. Fair Value Measurements:

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date and requires consideration of our creditworthiness when valuing certain liabilities. Our framework for measuring fair value is based on the following three-level hierarchy for fair value measurements:

Level 1 -     Quoted prices for identical instruments in active markets at the measurement date.

Level 2 - Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets at the measurement date and for the anticipated term of the instrument.

Level 3 - Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable inputs that reflect the reporting entity's own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances.

Where available, the fair values were based upon quoted prices in active markets. However, if quoted prices were not available, then the fair values were based upon quoted prices for similar assets or liabilities or independently sourced market parameters, such as credit default swap spreads, yield curves, reported trades, broker/dealer quotes, interest rates and benchmark securities. For assets and liabilities without observable market activity, if any, the fair values were based upon discounted cash flow methodologies incorporating assumptions that, in our judgment, reflect the assumptions a marketplace participant would use. Valuation adjustments to reflect either party's creditworthiness and ability to pay were incorporated into our valuations, where appropriate, as of December 31, 2014 and 2013, the measurement dates. The methodologies used to determine the fair value of our financial assets and liabilities as of December 31, 2014 were the same as those used as of December 31, 2013.

Fair values are estimates and are not necessarily indicative of amounts for which we could settle such instruments currently nor indicative of our intent or ability to dispose of or liquidate them.

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Assets and Liabilities Carried at Fair Value on a Recurring Basis

Derivatives

Derivatives, classified as Level 2, were primarily valued using estimated future cash flows based on observed prices from exchange-traded derivatives. We also considered the counterparty's creditworthiness, or our own creditworthiness, as appropriate. Adjustments were recorded to reflect the risk of credit default, but they were insignificant to the overall value of the derivatives. Refer to Note 8 for more information related to our derivative instruments.

Marketable Equity Securities

The following table presents the fair values of an investment in marketable equity securities, related to publicly traded stock of a non-U.S. company, recorded in Other assets, net in the accompanying Consolidated Balance Sheets (in millions):

	As of December 31,
	2014		2013
Quoted Prices in Active Markets for Identical Assets (Level 1):
Investment in marketable equity securities	$	5.3	$	4.4

Other Fair Value Disclosures

The carrying amounts of Cash and cash equivalents, Accounts and notes receivable, net, Accounts payable, Other current liabilities, and Short-term debt approximate fair value due to the short maturities of these instruments. The carrying amount of our Domestic Credit Facility in Long-term debt also approximates fair value due to its variable-rate characteristics.

The fair value of our senior unsecured notes in Long-term debt was based on the amount of future cash flows using current market rates for debt instruments of similar maturities and credit risk. The following table presents the fair value for our senior unsecured notes in Long-term debt (in millions):

	As of December 31,
	2014		2013
Quoted Prices in Active Markets for Similar Instruments (Level 2):
Senior unsecured notes	$	210.6	$	214.0

21. Selected Quarterly Financial Information (unaudited):

The following tables provide information on Net sales, Gross profit, Net income, Earnings per share and Cash dividends declared per share by quarter (in millions, except per share data):

	Net Sales (1)				Gross Profit (1)				Net Income (Loss) (1)
	2014		2013		2014		2013		2014		2013
First Quarter	$	695.4	$	668.4	$	168.1	$	162.0	$	19.9	$	8.0
Second Quarter	960.7		913.1		262.6		254.0		73.9		64.3
Third Quarter	898.4		868.0		247.1		237.4		67.4		64.3
Fourth Quarter	812.8		749.5		225.4		207.7		44.6		35.2

	Basic Earnings (Loss) per Share (2)				Diluted Earnings (Loss) per Share (2)				Cash Dividends per Common Share
	2014		2013		2014		2013		2014		2013
First Quarter	$	0.41	$	0.16	$	0.40	$	0.16	$	0.24	$	0.20
Second Quarter	1.51		1.28		1.49		1.26		0.30		0.24
Third Quarter	1.40		1.29		1.38		1.27		0.30		0.24
Fourth Quarter	0.98		0.72		0.96		0.70		0.30		0.24

⁽¹⁾ The sum of the quarterly results for each of the four quarters may not equal the full year results due to rounding.

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⁽²⁾ EPS for each quarter is computed using the weighted-average number of shares outstanding during that quarter, while EPS for the fiscal year is computed using the weighted-average number of shares outstanding during the year. Thus, the sum of the EPS for each of the four quarters may not equal the EPS for the fiscal year.

Summary of 2014 Quarterly Results

The following unusual or infrequent pre-tax items were included in the 2014 quarterly results:

1st Quarter. No significant unusual or infrequent items.

2nd Quarter. No significant unusual or infrequent items.

3rd Quarter. We recorded restructuring charges of $1 million for a new project to realign resources and enhance distribution capabilities. Refer to Note 16 for more information related to our restructuring activities.

4th Quarter. We recorded restructuring charges of $0.6 million for our project to realign resources and enhance distribution capabilities.

Summary of 2013 Quarterly Results

The following unusual or infrequent pre-tax items were included in the 2013 quarterly results:

1st Quarter. On March 22, 2013, we sold our Service Experts business to a majority-owned entity of American Capital, Ltd. in an all-cash transaction for net proceeds of $10.4 million, excluding transaction costs. We recorded a 1.4 million gain on the sale of the business for the year ended December 31, 2013. Refer to Note 17 for more information.

2nd Quarter. We recorded restructuring charges of $2.4 million primarily related to the completion of the transition activities with our North American Parts Center in Des Moines, Iowa. Refer to Note 16 for more information related to our restructuring activities.

3rd Quarter. We recorded legal contingency charges of $0.8 million associated with ongoing patent litigation. Refer to Note 10 for more information on our legal contingencies.

4th Quarter. We recorded expenses of $6.3 million for asbestos-related litigation. Refer to Note 10 for more information. We also recorded restructuring charges of $1.8 million primarily related to anticipated severance charges associated with a relocation of certain Residential Heating & Cooling manufacturing operations to lower cost facilities.

22. Losses and Other Expenses, net:

Losses and other expenses, net in our Consolidated Statements of Operations were as follows (in millions):

	For the Years Ended December 31,
	2014			2013			2012
Realized losses on settled futures contracts	$	0.8		$	1.0		$	1.5
Foreign currency exchange losses	1.6			0.5			0.8
Losses (gains) on disposal of fixed assets	(0.3		)	(1.0		)	0.4
Net change in unrealized losses (gains) on unsettled futures contracts	0.6			0.4			(2.2		)
Asbestos-related litigation	0.9			6.3			—
Acquisition expenses	—			0.2			0.1
Special legal contingency charges	0.9			1.2			1.2
Environmental liabilities	2.0			—			—
Other items, net	0.3			0.7			0.7
Losses and other expenses, net	$	6.8		$	9.3		$	2.5

78

23. Supplemental Information:

Below is information about expenses included in our Consolidated Statements of Operations (in millions):

	For the Years Ended December 31,
	2014		2013		2012
Research and development (1)	$	60.7	$	53.7	$	50.7
Advertising, promotions and marketing (2)	41.9		45.2		59.4
Cooperative advertising expenditures (3)	13.1		10.9		9.5
Rent expense (4)	50.5		53.5		67.8

⁽¹⁾ Includes research and development costs related to discontinued operations of $1.2 million for the year ended December 31, 2012. No research and development costs related to discontinued operations were recorded for the years ended December 31, 2014 and 2013 .

⁽²⁾ Includes advertising, promotions and marketing costs related to discontinued operations of $4.1 million and $20.1 million for the years ended December 31, 2013 and 2012, respectively. No advertising costs related to discontinued operations were recorded for the year ended December 31, 2014. Cooperative advertising expenditures were not included in these amounts.

⁽³⁾ Cooperative advertising expenditures were included in Selling, general and administrative expenses in the Consolidated Statements of Operations.

⁽⁴⁾ Includes rent expense related to discontinued operations of $4.5 million and $20.1 million for the years ended December 31, 2013 and 2012, respectively. No rent costs related to discontinued operations were recorded for the year ended December 31, 2014.

Interest Expense, net

The components of Interest expense, net in our Consolidated Statements of Operations were as follows (in millions):

	For the Years Ended December 31,
	2014		2013		2012
Interest expense, net of capitalized interest	$	18.9	$	16.5	$	18.9
Interest income	1.7		2.0		1.8
Interest expense, net	$	17.2	$	14.5	$	17.1

24. 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 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 December 31, 2014, the U.S. and Canada Service Experts businesses were 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. 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 December 31, 2014 and December 31, 2013 and for the years ended December 31, 2014, 2013 and 2012 are shown on the following pages.

79

Condensed Consolidating Balance Sheets

As of December 31, 2014

(In millions)

	Parent			Guarantor Subsidiaries		Non- Guarantor Subsidiaries			Eliminations			Consolidated
ASSETS
Current Assets:
Cash and cash equivalents	$	1.0		$	11.5	$	25.0		$	—		$	37.5
Accounts and notes receivable, net	—			12.3		409.1			—			421.4
Inventories, net	—			350.6		119.7			(7.0		)	463.3
Deferred income taxes, net	2.8			27.3		7.4			(5.0		)	32.5
Other assets	3.6			45.7		67.2			(57.2		)	59.3
Total current assets	7.4			447.4		628.4			(69.2		)	1,014.0
Property, plant and equipment, net	—			269.0		89.6			—			358.6
Goodwill	—			140.4		69.0			—			209.4
Investment in subsidiaries	978.1			263.5		(0.6		)	(1,241.0		)	—
Deferred income taxes	0.5			90.8		15.8			(9.6		)	97.5
Other assets, net	5.2			61.0		20.1			(1.5		)	84.8
Intercompany receivables (payables), net	(280.4		)	302.4		(22.0		)	—			—
Total assets	$	710.8		$	1,574.5	$	800.3		$	(1,321.3	)	$	1,764.3
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Short-term debt	$	—		$	—	$	226.6		$	—		$	226.6
Current maturities of long-term debt	22.5			1.2		0.3			—			24.0
Accounts payable	13.4			237.8		73.1			—			324.3
Accrued expenses	9.0			175.5		54.5			—			239.0
Income taxes payable	(3.7		)	34.7		47.5			(65.1		)	13.4
Total current liabilities	41.2			449.2		402.0			(65.1		)	827.3
Long-term debt	659.5			15.3		0.2			—			675.0
Post-retirement benefits, other than pensions	—			4.5		—			—			4.5
Pensions	—			117.6		12.3			—			129.9
Other liabilities	1.1			118.7		11.7			(12.9		)	118.6
Total liabilities	701.8			705.3		426.2			(78.0		)	1,755.3
Commitments and contingencies
Total stockholders' equity	9.0			869.2		374.1			(1,243.3		)	9.0
Total liabilities and stockholders' equity	$	710.8		$	1,574.5	$	800.3		$	(1,321.3	)	$	1,764.3

80

Condensed Consolidating Balance Sheets

As of December 31, 2013

(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

81

Condensed Consolidating Statements of Operations and Comprehensive Income

For the Year Ended December 31, 2014

(In millions)

	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Net Sales	$	—		$	2,775.7		$	818.0		$	(226.3	)	$	3,367.4
Cost of goods sold	—			2,057.8			628.3			(222.0		)	2,464.1
Gross profit	—			717.9			189.7			(4.3		)	903.3
Operating expenses:
Selling, general and administrative expenses	—			454.5			119.2			—			573.7
Losses and other expenses, net	—			3.2			3.6			—			6.8
Restructuring charges	—			0.4			1.5			—			1.9
Income from equity method investments	(216.4		)	(25.4		)	(11.3		)	239.3			(13.8		)
Operational income from continuing operations	216.4			285.2			76.7			(243.6		)	334.7
Interest expense, net	16.0			(3.0		)	4.2			—			17.2
Other expense, net	—			—			(0.1		)	—			(0.1		)
Income from continuing operations before income taxes	200.4			288.2			72.6			(243.6		)	317.6
Provision for income taxes	(5.6		)	91.7			24.9			(1.5		)	109.5
Income from continuing operations	206.0			196.5			47.7			(242.1		)	208.1
Loss from discontinued operations	—			—			(2.3		)	—			(2.3		)
Net income	$	206.0		$	196.5		$	45.4		$	(242.1	)	$	205.8
Other comprehensive loss	$	(4.1	)	$	(51.2	)	$	(34.8	)	$	(2.3	)	$	(92.4	)
Comprehensive Income	$	201.9		$	145.3		$	10.6		$	(244.4	)	$	113.4

82

Condensed Consolidating Statements of Operations and Comprehensive Income

For the Year Ended December 31, 2013

(In millions)

	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	2,557.9		$	837.0		$	(195.8	)	$	3,199.1
Cost of goods sold	—			1,900.9			632.8			(195.8		)	2,337.9
Gross profit	—			657.0			204.2			—			861.2
Operating expenses:
Selling, general and administrative expenses	—			437.1			133.0			—			570.1
Losses and other expenses, net	1.1			7.9			0.3			—			9.3
Restructuring charges	—			2.9			2.1			—			5.0
Income from equity method investments	(181.7		)	(26.4		)	(9.7		)	205.6			(12.2		)
Operational income from continuing operations	180.6			235.5			78.5			(205.6		)	289.0
Interest expense, net	14.0			(2.1		)	2.6			—			14.5
Other expense, net	—			—			0.2			—			0.2
Income from continuing operations before income taxes	166.6			237.6			75.7			(205.6		)	274.3
Provision for income taxes	(5.2		)	73.7			25.9			—			94.4
Income from continuing operations	171.8			163.9			49.8			(205.6		)	179.9
Loss from discontinued operations	—			—			(8.1		)	—			(8.1		)
Net income	$	171.8		$	163.9		$	41.7		$	(205.6	)	$	171.8
Other comprehensive loss	$	(38.8	)	$	36.3		$	(6.1	)	$	(30.2	)	$	(38.8	)
Comprehensive income	$	133.0		$	200.2		$	35.6		$	(235.8	)	$	133.0

83

Condensed Consolidating Statements of Operations and Comprehensive Income

For the Year Ended December 31, 2012

(In millions)

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net Sales	$	—		$	2,327.7		$	824.0		$	(202.3	)	$	2,949.4
Cost of goods sold	0.2			1,799.6			629.2			(201.9		)	2,227.1
Gross profit	(0.2		)	528.1			194.8			(0.4		)	722.3
Operating expenses:
Selling, general and administrative expenses	—			374.3			132.7			—			507.0
Losses and other expenses, net	(1.7		)	1.1			3.2			(0.1		)	2.5
Restructuring charges	—			2.8			1.4			—			4.2
Income from equity method investments	(116.3		)	(17.0		)	(7.8		)	130.6			(10.5		)
Operational income from continuing operations	117.8			166.9			65.3			(130.9		)	219.1
Interest expense, net	16.6			(2.4		)	2.9			—			17.1
Other expense, net	—			—			0.3			—			0.3
Income from continuing operations before income taxes	101.2			169.3			62.1			(130.9		)	201.7
Provision for income taxes	(4.9		)	50.5			21.2			(0.1		)	66.7
Income from continuing operations	106.1			118.8			40.9			(130.8		)	135.0
Loss from discontinued operations	—			(18.5		)	(26.5		)	—			(45.0		)
Net income	$	106.1		$	100.3		$	14.4		$	(130.8	)	$	90.0
Other comprehensive income	$	6.7		$	(2.8	)	$	5.2		$	5.7		$	14.8
Comprehensive Income	$	112.8		$	97.5		$	19.6		$	(125.1	)	$	104.8

84

Condensed Consolidating Statements of Cash Flows

For the Year Ended December 31, 2014

(In millions)

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations		Consolidated
Cash flows from operating activities:	$	328.8		$	(97.2	)	$	(46.8	)	$	—	$	184.8
Cash flows from investing activities:
Proceeds from the disposal of property, plant and equipment	—			1.0			0.1			—		1.1
Purchases of property, plant and equipment	—			(70.5		)	(17.9		)	—		(88.4		)
Net cash used in investing activities	—			(69.5		)	(17.8		)	—		(87.3		)
Cash flows from financing activities:
Short-term borrowings, net	—			—			1.5			—		1.5
Asset securitization borrowings	—			—			100.0			—		100.0
Asset securitization payments	—			—			(40.0		)	—		(40.0		)
Term loan borrowings from credit facility	300.0			—			—			—		300.0
Long-term debt payments	—			(1.9		)	(0.4		)	—		(2.3		)
Borrowings from credit facility	2,073.5			—			—			—		2,073.5
Payments on credit facility	(1,908.5		)	—			—			—		(1,908.5		)
Payments of deferred financing costs	(2.2		)	—			—			—		(2.2		)
Proceeds from employee stock purchases	2.0			—			—			—		2.0
Repurchases of common stock	(550.3		)	—			—			—		(550.3		)
Repurchases of common stock to satisfy employee withholding tax obligations	(22.4		)	—			—			—		(22.4		)
Excess tax benefits related to share-based payments	11.8			—			—			—		11.8
Intercompany debt	(0.1		)	4.7			(4.6		)	—		—
Intercompany financing activity	(180.1		)	164.9			15.2			—		—
Cash dividends paid	(52.6		)	—			—			—		(52.6		)
Net cash provided by (used in) financing activities	(328.9		)	167.7			71.7			—		(89.5		)
Increase (decrease) in cash and cash equivalents	(0.1		)	1.0			7.1			—		8.0
Effect of exchange rates on cash and cash equivalents	—			—			(8.5		)	—		(8.5		)
Cash and cash equivalents, beginning of year	1.1			10.5			26.4			—		38.0
Cash and cash equivalents, end of year	$	1.0		$	11.5		$	25.0		$	—	$	37.5

85

Condensed Consolidating Statements of Cash Flows

For the Year Ended December 31, 2013

(In millions)

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations		Consolidated
Cash flows from operating activities:	$	(30.4	)	$	328.4		$	(87.7	)	$	—	$	210.3
Cash flows from investing activities:
Proceeds from the disposal of property, plant and equipment	—			2.4			—			—		2.4
Purchases of property, plant and equipment	—			(55.8		)	(22.5		)	—		(78.3		)
Net Proceeds from sale of business	5.3			—			3.3			—		8.6
Net cash used in investing activities	5.3			(53.4		)	(19.2		)	—		(67.3		)
Cash flows from financing activities:
Short-term borrowings, net	—			—			2.0			—		2.0
Asset securitization borrowings	—			—			330.0			—		330.0
Asset securitization payments	—			—			(200.0		)	—		(200.0		)
Long-term debt payments	—			(0.7		)	(0.3		)	—		(1.0		)
Borrowings from revolving credit facility	1,425.5			—			—			—		1,425.5
Payments on revolving credit facility	(1,543.5		)	—			—			—		(1,543.5		)
Proceeds from employee stock purchases	1.8			—			—			—		1.8
Additional investment in subsidiary	—			—			(0.5		)	—		(0.5		)
Repurchases of common stock	(125.0		)	—			—			—		(125.0		)
Repurchases of common stock to satisfy employee withholding tax obligations	(12.0		)	—			—			—		(12.0		)
Excess tax benefits related to share-based payments	6.5			—			—			—		6.5
Intercompany debt	(26.8		)	12.3			14.5			—		—
Intercompany financing activity	332.7			(289.5		)	(43.2		)	—		—
Cash dividends paid	(34.0		)	—			—			—		(34.0		)
Net cash provided by (used in) financing activities	25.2			(277.9		)	102.5			—		(150.2		)
Decrease in cash and cash equivalents	0.1			(2.9		)	(4.4		)	—		(7.2		)
Effect of exchange rates on cash and cash equivalents	—			—			(6.6		)	—		(6.6		)
Cash and cash equivalents, beginning of year	1.0			13.4			37.4			—		51.8
Cash and cash equivalents, end of year	$	1.1		$	10.5		$	26.4		$	—	$	38.0

86

Condensed Consolidating Statements of Cash Flows

For the Year Ended December 31, 2012

(In millions)

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations		Consolidated
Cash flows from operating activities:	$	20.7		$	207.3		$	(6.6	)	$	—	$	221.4
Cash flows from investing activities:
Proceeds from the disposal of property, plant and equipment	—			0.1			—			—		0.1
Purchases of property, plant and equipment	—			(37.7		)	(12.5		)	—		(50.2		)
Net proceeds from sale of business	—			10.1			—			—		10.1
Net cash used in discontinued operations	—			(0.5		)	0.1			—		(0.4		)
Net cash used in investing activities	—			(28.0		)	(12.4		)	—		(40.4		)
Cash flows from financing activities:
Short-term borrowings, net	—			—			0.2			—		0.2
Asset securitization borrowings	—			—			645.0			—		645.0
Asset securitization payments	—			—			(615.0		)	—		(615.0		)
Long-term debt payments	—			(0.7		)	(0.4		)	—		(1.1		)
Borrowings from revolving credit facility	967.0			—			—			—		967.0
Payments on revolving credit facility	(1,075.0		)	—			—			—		(1,075.0		)
Proceeds from stock option exercises	0.8			—			—			—		0.8
Repurchases of common stock	(50.1		)	—			—			—		(50.1		)
Repurchases of common stock to satisfy employee withholding tax obligations	(7.8		)	—			—			—		(7.8		)
Excess tax benefits related to share-based payments	3.5			—			—			—		3.5
Intercompany debt	2.4			(4.0		)	1.6			—		—
Intercompany financing activity	186.1			(170.9		)	(15.2		)	—		—
Cash dividends paid	(47.6		)	—			—			—		(47.6		)
Net cash provided by (used in) financing activities	(20.7		)	(175.6		)	16.2			—		(180.1		)
Increase (decrease) in cash and cash equivalents	—			3.7			(2.8		)	—		0.9
Effect of exchange rates on cash and cash equivalents	—			—			5.9			—		5.9
Cash and cash equivalents, beginning of year	1.0			9.7			34.3			—		45.0
Cash and cash equivalents, end of year	$	1.0		$	13.4		$	37.4		$	—	$	51.8

87

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures

Disclosure Controls and Procedures

As required by Rule 13a-15 under the Exchange Act, we carried out an evaluation, under the supervision and with the participation of our current management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of December 31, 2014, our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the applicable rules and forms, and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

Management's Annual Report on Internal Control Over Financial Reporting

See “Management's Report on Internal Control Over Financial Reporting” included in Item 8 “Financial Statements and Supplementary Data.”

Attestation Report of the Independent Registered Public Accounting Firm

See “Report of Independent Registered Public Accounting Firm” included in Item 8 “Financial Statements and Supplementary Data.”

Changes in Internal Control Over Financial Reporting

There were no changes during the fourth quarter ended December 31, 2014 in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. Other Information

None.

PART III

Item 10. Directors, Executive Officers and Corporate Governance

The information in the sections of our 2015 Proxy Statement captioned "Proposal 1: Election of Directors," "Section 16(a) Beneficial Ownership Reporting Compliance," and "Corporate Governance" is incorporated in this Item 10 by reference. Part I, Item 1 "Business - Executive Officers of the Company" of this Annual Report on Form 10-K identifies our executive officers and is incorporated in this Item 10 by reference.

Item 11. Executive Compensation

The sections of our 2015 Proxy Statement captioned "Executive Compensation," "Director Compensation," "Corporate Governance - Compensation and Human Resource Committee" and "Certain Relationships and Related Party Transactions - Compensation Committee Interlocks and Insider Participation" are incorporated in this Item 11 by reference.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The sections of our 2015 Proxy Statement captioned "Equity Compensation Plan Information" and "Ownership of Common Stock" are incorporated in this Item 12 by reference. Also, refer to Note 14 in the Notes to the Consolidated Financial Statements

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for additional information about our equity compensation plans.

Item 13. Certain Relationships and Related Transactions and Director Independence

The sections of our 2015 Proxy Statement captioned "Corporate Governance - Director Independence and - Board Committees" and "Certain Relationships and Related Party Transactions" are incorporated in this Item 13 by reference.

Item 14. Principal Accounting Fees and Services

The section of our 2015 Proxy Statement captioned "Proposal 2: Ratification of the Appointment of Independent Registered Public Accounting Firm" is incorporated in this Item 14 by reference.

PART IV

Item 15. Exhibits and Financial Statement Schedules

Financial Statements

The following financial statements are included in Part II, Item 8 of the Annual Report on Form 10-K:

• Report of Independent Registered Public Accounting Firm

• Consolidated Balance Sheets as of December 31, 2014 and 2013

• Consolidated Statements of Operations for the Years Ended December 31, 2014, 2013 and 2012

• Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2014, 2013 and 2012

• Consolidated Statements of Stockholders' Equity for the Years Ended December 31, 2014, 2013 and 2012

• Consolidated Statements of Cash Flows for the Years Ended December 31, 2014, 2013 and 2012

• Notes to the Consolidated Financial Statements for the Years Ended December 31, 2014, 2013 and 2012

Financial Statement Schedules

The financial statement schedule included in this Annual Report on Form 10-K is Schedule II - Valuation and Qualifying Accounts and Reserves for the Years Ended December 31, 2014, 2013 and 2012 (see Schedule II immediately following the signature page of this Annual Report on Form 10-K).

Financial statement schedules not included in this Annual Report on Form 10-K have been omitted because they are not applicable or the required information is shown in the Consolidated Financial Statements or Notes thereto.

Exhibits

A list of the exhibits required to be filed or furnished as part of this Annual Report on Form 10-K is set forth in the Index to Exhibits, which immediately precedes such exhibits, and is incorporated herein by reference.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

LENNOX INTERNATIONAL INC.

By: /s/ Todd M. Bluedorn

                            Todd M. Bluedorn

February 17, 2015                 Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant in the capacities and on the dates indicated.

SIGNATURE	TITLE	DATE
/s/ TODD M. BLUEDORN	Chief Executive Officer and Chairman of the Board of Directors	February 17, 2015
Todd M. Bluedorn	(Principal Executive Officer)
/s/ JOSEPH W. REITMEIER	Executive Vice President and Chief Financial Officer	February 17, 2015
Joseph W. Reitmeier	(Principal Financial Officer)
/s/ ROY A. RUMBOUGH	Vice President, Controller and Chief Accounting Officer	February 17, 2015
Roy A. Rumbough	(Principal Accounting Officer)
/s/ RICHARD L. THOMPSON	Lead Director	February 17, 2015
Richard L. Thompson
/s/ JANET K. COOPER	Director	February 17, 2015
Janet K. Cooper
/s/ C.L. (JERRY) HENRY	Director	February 17, 2015
C.L. (Jerry) Henry
/s/ JOHN E. MAJOR	Director	February 17, 2015
John E. Major
/s/ JOHN W. NORRIS, III	Director	February 17, 2015
John W. Norris, III
/s/ KAREN H. QUINTOS	Director	February 17, 2015
Karen. H. Quintos
/s/ PAUL W. SCHMIDT	Director	February 17, 2015
Paul W. Schmidt
/s/ TERRY D. STINSON	Director	February 17, 2015
Terry D. Stinson
/s/ GREGORY T. SWIENTON	Director	February 17, 2015
Gregory T. Swienton
/s/ TODD J. TESKE	Director	February 17, 2015
Todd J. Teske

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LENNOX INTERNATIONAL INC.

SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES

For the Years Ended December 31,2014, 2013 and 2012

(In millions)

	Balance at beginning of year		Additions charged to cost and expenses		Write-offs			Recoveries		Other			Balance at end of year
2012:
Allowance for doubtful accounts	$	11.3	$	3.9	$	(6.8	)	$	1.8	$	(0.7	)	$	9.5
2013:
Allowance for doubtful accounts	$	9.5	$	3.6	$	(4.6	)	$	1.6	$	(0.3	)	$	9.8
2014:
Allowance for doubtful accounts	$	9.8	$	2.6	$	(4.6	)	$	1.1	$	(1.0	)	$	7.9

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INDEX TO 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 December 16, 2013 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 then 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	Fourth Supplemental Indenture, dated as of December 10, 2013 among Lennox National Account Services LLC, LGL Australia (US) Inc., Lennox International Inc., each other existing Guarantor under the Indenture, dated as of May 3, 2010, as subsequently supplemented, and U.S. Bank National Association (filed as Exhibit 4.5 to LII's Current Report on Form 10-K filed on February 13, 2014 and incorporated herein by reference).
4.6	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).
10.1	Amendment No. 2 to Amended and Restated Receivables Purchase Agreement, effective as of November 15, 2013, among LPAC Corp., as the Seller, Lennox Industries Inc., as the Master Servicer, Victory Receivables Corporation, as a Purchaser, The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch, as Administrative Agent, a Liquidity Bank, and the BTMU Purchaser Agent, and PNC Bank, National Association as a Liquidity Bank and the PNC Purchaser Agent (filed as Exhibit 10.1 to LII's Current Report on Form 8-K filed on November 19, 2013 and incorporated herein by reference).
10.2	Omnibus Amendment No. 3 to the Amended and Restated Receivables Purchase agreement, effective as of November 21, 2014 among LPAC Corp., as the Seller, Lennox Industries Inc., as the Master Servicer, Victory Receivables Corporation, as a Purchaser, The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch, as Administrative Agent, a Liquidity Bank, and the BTMU Purchaser Agent, and PNC Bank, National Association, as a Liquidity Bank and the PNC Purchaser Agent (filed as Exhibit 10.1 to LII's Current Report on Form 8-K filed on November 21, 2014 and incorporated herein by reference).
10.3	Amendment to the Amended and Restated Receivables Purchase Agreement, effective as of December 15, 2014, among LPAC Corp., as the Seller, Lennox Industries Inc., as the Master Servicer, with Victory Receivables Corporation, as Purchaser, The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch, as Administrative Agent, a Liquidity Bank and the BTMU purchaser agent, and PNC Bank, National Association, as a Liquidity Bank and the PNC purchaser agent (filed as Exhibit 10.1 to LII's Current Report on Form 8-K filed on December 15, 2014 and incorporated herein by reference).
10.4	Fifth Amended and Restated Credit Facility Agreement dated as of November 13, 2014, among Lennox International Inc., a Delaware corporation, the Lenders party thereto, and JPMorgan Chase Bank, National Association, as Administrative Agent (filed as Exhibit 10.2 to LII's Current Report on Form 8-K filed on November 13, 2014 and incorporated herein by reference).
10.5	Fixed Dollar Accelerated Share Repurchase Transaction between J.P. Morgan Securities LLC, as agent for JPMorgan Chase Bank, National Association, London Branch, and Lennox International Inc. as of October 22, 2014 (filed herein).
10.6	Fixed Dollar Accelerated Share Repurchase Transaction between Morgan Stanley & Co. LLC and Lennox International Inc. (“Issuer”) as of October 22, 2014 (filed herein).

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10.7	Subsidiary Joinder Agreement dated as of December 10, 2013 signed by Lennox National Account Services LLC and LGL Australia (US) Inc. for the benefit of JPMorgan Chase Bank, National Association and the lenders under the Fourth Amended and Restated Revolving Credit Facility Agreement dated as of October 21, 2011 (filed as Exhibit 10.3 to LII's Current Report on Form 10-K filed on February 13, 2014 and incorporated herein by reference).
10.8	Amended and Restated Lease Agreement, dated as of March 22, 2013, by and between BTMU Capital Leasing & Finance, Inc., as lessor, and Lennox International Inc., as lessee (filed as Exhibit 10.1 to LII's Current Report on Form 8-K filed on March 25, 2013 and incorporated herein by reference).
10.9	Amended and Restated Participation Agreement, dated as of March 22, 2013, by and among Lennox International Inc., as lessee and BTMU Capital Leasing & Finance, Inc., as lessor (filed as Exhibit 10.2 to LII's Current Report on Form 8-K filed on March 25, 2013 and incorporated herein by reference).
10.10	Amended and Restated Memorandum of Lease, Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing, dated as of March 22, 2013, by and among Lennox International Inc., BTMU Capital Leasing and Finance, Inc. and David Parnell, as Deed of Trust Trustee, for the benefit of BTMU Capital Leasing & Finance, Inc. (filed as Exhibit 10.3 to LII's Current Report on Form 8-K filed on March 25, 2013 and incorporated herein by reference).
10.11	Mutual Release executed March 13, 2013 among JPMorgan Chase Bank, National Association, Service Experts LLC and Service Experts Heating & Air Conditioning LLC (filed as Exhibit 10.3 to LII's Current Report on Form 10-K filed on February 13, 2014 and incorporated herein by reference).
10.12*	Lennox International Inc. 2010 Incentive Plan, as amended and restated (filed as Exhibit 10.1 to LII's Current Report on Form 8-K filed on May 19, 2010 and incorporated herein by reference).
10.13*	Form of Long-Term Incentive Award Agreement for U.S. Employees - Vice President and Above (for use under the 2010 Incentive Plan) (filed herewith).
10.14*	Form of Restricted Stock Unit Award Agreement for Non-Employee Directors (for use under the 2010 Incentive Plan) (filed as Exhibit 10.9 to LII's Annual Report on Form 10-K filed on February 15, 2013 as incorporated herein by reference).
10.15*	Amendment of Long-Term Incentive Award Agreements for U.S. Employees -Vice President and Above and U.S. Employees- Directors (filed as Exhibit 10.11 to LII's Current Report on Form 10-K filed on February 13, 2014 and incorporated herein by reference).
10.16*	Amended and Restated 1998 Incentive Plan of Lennox International Inc. (filed as Exhibit 10.1 to LII's Quarterly Report on Form 10-Q for the quarter ended March 31, 2005 and incorporated herein by reference).
10.17*	Form of 2009 Long-Term Incentive Award Agreement for U.S. Employees of LII under the 1998 Incentive Plan of LII (filed as Exhibit 10.4 to LII's Current Report on Form 8-K filed on December 17, 2008 and incorporated herein by reference).
10.18*	Form of 2009 Long-Term Incentive Award Agreement Non-Employee Director under the 1998 Incentive Plan of LII (filed as Exhibit 10.9 to LII's Annual Report on Form 10-K for the year ended December 31, 2008 and incorporated by reference).
10.19*	Lennox International Inc. Profit Sharing Restoration Plan, as amended and restated effective January 1, 2009 (filed as Exhibit 10.3 to LII's Current Report on Form 8-K filed on December 17, 2008 and incorporated herein by reference).
10.20*	Lennox International Inc. Supplemental Retirement Plan, as amended and restated effective January 1, 2009 (filed as Exhibit 10.2 to LII's Current Report on Form 8-K filed on December 17, 2008 and incorporated herein by reference).
10.21*	Form of Indemnification Agreement entered into between LII and certain executive officers and directors of LII (filed as Exhibit 10.15 to LII's Registration Statement on Form S-1 (Registration No. 333-75725) filed on April 6, 1999 and incorporated herein by reference).
10.22*	Form of Employment Agreement entered into between LII and certain executive officers of LII (filed as Exhibit 10.30 to LII's Annual Report on Form 10-K for the year ended December 31, 2006 and incorporated herein by reference).
10.23*	Form of Amendment to Employment Agreement entered into between LII and certain executive officers of LII (filed as Exhibit 10.2 to LII's Current Report on Form 8-K filed on December 12, 2007 and incorporated herein by reference).
10.24*	Form of Change of Control Employment Agreement entered into between LII and certain executive officers of LII (filed as Exhibit 10.1 to LII's Current Report on Form 8-K filed on July 11, 2012 and incorporated herein by reference).
10.25*	Lennox International Inc. Directors' Retirement Plan (as Amended and Restated as of January 1, 2010) (filed as Exhibit 10.1 to LII's Current Report on Form 8-K filed on December 16, 2009 and incorporated herein by reference).

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10.26*	Form of Change of Control Employment Agreement entered into between LII and certain executive officers of LII (filed as Exhibit 10.1 to LII's Current Report on Form 8-K filed on December 17, 2008 and incorporated herein by reference).
21.1	Subsidiaries of LII (filed herewith).
23.1	Consent of KPMG LLP (filed herewith).
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 (furnished herewith).

Exhibit No. (101).INS XBRL Instance Document

Exhibit No. (101).SCH XBRL Taxonomy Extension Schema Document

Exhibit No. (101).CAL XBRL Taxonomy Extension Calculation Linkbase Document

Exhibit No. (101).LAB XBRL Taxonomy Extension Label Linkbase Document

Exhibit No. (101).PRE XBRL Taxonomy Extension Presentation Linkbase Document

Exhibit No. (101).DEF XBRL Taxonomy Extension Definition Linkbase Document

* Management contract or compensatory plan or arrangement.

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EX-10.5

Exhibit 10.5

JPMorgan Chase Bank, National Association
P.O. Box 161
60 Victoria Embankment
London EC4Y 0JP
England

October 22, 2014

Fixed Dollar Accelerated Share Repurchase Transaction

Lennox International Inc.

2140 Lake Park Boulevard

Richardson, Texas 75080

___________________________________________________________________________________

Dear Sir/Madam:

The purpose of this letter agreement (this “Confirmation”) is to confirm the terms and conditions of the Transaction entered into between J.P. Morgan Securities LLC (“JPMS”), as agent for JPMorgan Chase Bank, National Association, London Branch (“Dealer”), and Lennox International Inc. (“Issuer”) on the Trade Date specified below (the “Transaction”). This confirmation constitutes a “Confirmation” as referred to in the Agreement specified below.

The definitions and provisions contained in the 2002 ISDA Equity Derivatives Definitions (as published by the International Swaps and Derivatives Association, Inc. (“ISDA”)) (the “Equity Definitions”) are incorporated into this Confirmation. The Transaction is a Share Forward Transaction for purposes of the Equity Definitions. Any reference to a currency shall have the meaning contained in Section 1.7 of the 2006 ISDA Definitions, as published by ISDA.

This Confirmation evidences a complete and binding agreement between Dealer and Issuer as to the terms of the Transaction to which this Confirmation relates and shall supersede all prior or contemporaneous written or oral communications with respect thereto. This Confirmation shall be subject to an agreement (the “Agreement”) in the form of the 2002 ISDA Master Agreement as if Dealer and Issuer had executed an agreement in such form without any Schedule but with the elections set forth in this Confirmation (and the election of USD as the Termination Currency).

The Transaction shall be the only transaction under the Agreement. If there exists any ISDA Master Agreement between Dealer and Issuer or any confirmation or other agreement between Dealer and Issuer pursuant to which an ISDA Master Agreement is deemed to exist between Dealer and Issuer, then, notwithstanding anything to the contrary in such ISDA Master Agreement, such confirmation or agreement or any other agreement to which Dealer and Issuer are parties, the Transaction shall not be considered a transaction under, or otherwise governed by, such existing or deemed to be existing ISDA Master Agreement.

If there is any inconsistency between the Agreement, this Confirmation and the Equity Definitions, the following will prevail for purposes of the Transaction in the order of precedence indicated: (i) this Confirmation; (ii) the Equity Definitions; and (iii) the Agreement.

JPMorgan Chase Bank, National AssociationOrganised under the laws of the United States as a National Banking Association.Main Office 1111 Polaris Parkway, Columbus, Ohio 43240Registered as a branch in England & Wales branch No. BR000746Registered Branch Office 25 Bank Street, Canary Wharf, London E14 5JPAuthorised by the Office of the Comptroller of the Currency in the jurisdiction of the USA.Authorised by the Prudential Regulation Authority. Subject to regulation by the Financial ConductAuthority and to limited regulation by the Prudential Regulation Authority. Details about theextent of our regulation by the Prudential Regulation Authority are available from us on request.

Page 2

The terms of the particular Transaction to which this Confirmation relates are as follows:

GENERAL TERMS:

Trade Date: As specified in Schedule I.

Buyer: Issuer

Seller: Dealer

Shares: Common Stock, par value USD 0.01 per share, of Issuer (Ticker: LII)

Forward Price:	A price per Share (as determined by the Calculation Agent) equal to (i) the arithmetic mean (not a weighted average) of the 10b-18 VWAP on each Observation Date that is a Trading Day during the Calculation Period minus (ii) the Discount.
Discount:	As specified in Schedule I.
10b-18 VWAP:	For each Observation Date that is a Trading Day, a price per Share equal to the volume-weighted average price of the Rule 10b-18 eligible trades in the Shares for the entirety of such Trading Day as determined by the Calculation Agent by reference to the screen entitled “LII UN <Equity> AQR SEC” or any successor page as reported by Bloomberg L.P. or any successor (without regard to pre-open or after-hours trading outside of any regular trading session for such Trading Day or issuer block trades (as defined in Rule 10b-18(a)(5) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) on such Trading Day) or, if the price (i) is not reported on such Bloomberg page or successor page or (ii) is determined by the Calculation Agent to have been reported incorrectly, the price determined by the Calculation Agent in a commercially reasonable manner to substitute for the unreported or erroneous price on such day.
Observation Dates:	As specified in Schedule I. Notwithstanding anything to the contrary in this Confirmation or the Equity Definitions, the Calculation Agent shall not adjust any Observation Date.

Calculation Period: The period from, and including, the first Observation Date that is a Trading Day that occurs on or after the Prepayment Date to, but excluding, the relevant Valuation Date; provided, however, that if the Valuation Date is the Scheduled Valuation Date, then the Valuation Date shall be included in the Calculation Period.

Trading Day: Any Exchange Business Day that is not a Disrupted Day in whole.

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Initial Shares:	As specified in Schedule I.
Initial Share Delivery Date:	The second Exchange Business Day following the Trade Date. On the Initial Share Delivery Date, Seller shall deliver to Buyer a number of Shares equal to the Initial Shares in accordance with Section 9.4 of the Equity Definitions, with the Initial Share Delivery Date being deemed to be a “Settlement Date” for purposes of such Section 9.4.

Prepayment: Applicable

Prepayment Amount:	As specified in Schedule I.
Commission Amount:	As specified in Schedule I.
Adjustment Amount:	As specified in Schedule I.
Structuring Fee:	As specified in Schedule I.

Prepayment Date: One Exchange Business Day following the Trade Date. On the Prepayment Date, Buyer shall pay to Seller the Prepayment Amount, the Commission Amount, the Adjustment Amount and the Structuring Fee.

Exchange: New York Stock Exchange

Related Exchange: All Exchanges

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Market Disruption Event: The definition of “Market Disruption Event” in Section 6.3(a) of the Equity Definitions is hereby amended by deleting the words “at any time during the one-hour period that ends at the relevant Valuation Time, Latest Exercise Time, Knock-in Valuation Time or Knock-out Valuation Time, as the case may be,” starting in the third line thereof. Section 6.3(d) of the Equity Definitions is hereby amended by deleting the remainder of the provision following the term “Scheduled Closing Time” in the fourth line thereof. Notwithstanding anything to the contrary in the Equity Definitions, if any Observation Date in the Calculation Period is a Disrupted Day, the Calculation Agent shall have the option in its sole discretion either (i) to determine the weighting of each Rule 10b-18 eligible transaction in the Shares on the relevant Disrupted Day using its commercially reasonable judgment for purposes of calculating the Forward Price, as applicable, (ii) to elect to extend the Calculation Period by a number of Observation Dates equal to the number of Observation Dates that are Disrupted Days during the Calculation Period and/or (iii) to suspend the Calculation Period until the circumstances giving rise to such suspension have ceased. For the avoidance of doubt, if Calculation Agent elects the option described in clause (i) above, then such Disrupted Day shall be deemed to be a Trading Day for purposes of calculating the Forward Price. If a Disrupted Day occurs on any Observation Date during the Calculation Period and each of the nine immediately following Scheduled Trading Days is a Disrupted Day (a “Disruption Event”), then the Calculation Agent may, in its good faith and commercially reasonable discretion, deem such ninth Scheduled Trading Day (or, if such day is not a scheduled Observation Date, the next following scheduled Observation Date) to be an Observation Date that is not a Disrupted Day and determine the 10b-18 VWAP for such ninth Scheduled Trading Day (or such next following scheduled Observation Date) using its good faith and commercially reasonable estimate of the value of the Shares on such ninth Scheduled Trading Day (or such next following scheduled Observation Date) based on the volume, historical trading patterns and price of the Shares.

VALUATION:

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Valuation Date:	The earlier of (i) the Scheduled Valuation Date and (ii) any earlier accelerated Valuation Date resulting from Dealer’s election in accordance with the immediately succeeding paragraph. Dealer shall have the right, in its absolute discretion but subject to the limitation set forth in the immediately succeeding paragraph, to accelerate the Valuation Date, in whole or in part, to any Observation Date that is on or after the Lock-Out Date and prior to the Scheduled Valuation Date by notice (each such notice, an “Acceleration Notice”) to Issuer by 9:00 p.m., New York City time, on the Observation Date immediately following the accelerated Valuation Date. Dealer shall specify in each Acceleration Notice the portion of the Prepayment Amount that is subject to acceleration (which may be less than the full Prepayment Amount, but only so long as such portion is not less than USD $5,000,000). If the portion of the Prepayment Amount that is subject to acceleration is less than the full Prepayment Amount, then the Calculation Agent shall adjust the terms of the Transaction as appropriate in order to take into account the occurrence of such accelerated Valuation Date (including cumulative adjustments to take into account all prior accelerated Valuation Dates). On each Valuation Date, the Calculation Agent shall calculate the Settlement Amount.
Scheduled Valuation Date:	As specified in Schedule I, subject to postponement in accordance with “Market Disruption Event” above
Lock-Out Date:	As specified in Schedule I.

SETTLEMENT TERMS:

Physical Settlement: Applicable On the Settlement Date, Seller shall deliver to Buyer a number of Shares equal to (a) (i) the Prepayment Amount divided by (ii) the Forward Price, minus (b) the Initial Shares (such number of Shares, the “Settlement Amount”), rounded to the nearest whole number of Shares; provided, however, that if the Settlement Amount is less than zero, the terms of the Buyer Settlement Provisions in Annex A shall apply.

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Settlement Currency:	USD
Settlement Date:	The date that falls one Settlement Cycle after the Scheduled Valuation Date or the date on which the relevant Acceleration Notice is delivered, as the case may be.
Other Applicable Provisions:	The last sentence of Section 9.2, Sections 9.8, 9.9, 9.10 and 9.11 (except that the Representation and Agreement contained in Section 9.11 of the Equity Definitions shall be modified by excluding any representations therein relating to restrictions, obligations, limitations or requirements under applicable securities laws arising as a result of the fact that Buyer is the issuer of the Shares) and Section 9.12 of the Equity Definitions will be applicable to the Transaction.

SHARE ADJUSTMENTS:

Potential Adjustment Event:

Notwithstanding anything to the contrary in Section 11.2(e) of the Equity Definitions, an Extraordinary Dividend shall not constitute a Potential Adjustment Event. It shall constitute a Potential Adjustment Event if a Disrupted Day occurs or, pursuant to Section 10 below, is deemed to occur (in whole or in part) on any Trading Day on or prior to the Valuation Date.

Extraordinary Dividend:

Any dividend or distribution on the Shares with an ex-dividend date occurring during the period from, and including, the Trade Date to, and including, the last day of the Calculation Period or, if applicable, the Settlement Valuation Period (other than any dividend or distribution of the type described in Section 11.2(e)(i), Section 11.2(e)(ii)(A) or Section 11.2(e)(ii)(B) of the Equity Definitions).

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Method of Adjustment:	Calculation Agent Adjustment
Agreement Regarding Dividends:	Notwithstanding any other provision of this Confirmation, the Definitions or the Agreement to the contrary, in calculating any adjustment pursuant to Article 11 of the Equity Definitions or any amount payable in respect of any termination or cancellation of the Transaction pursuant to Article 12 of the Equity Definitions or Section 6 of the Agreement, the Calculation Agent shall not take into account changes to any dividends since the Trade Date. For the avoidance of doubt, if an Early Termination Date occurs in respect of the Transaction, the amount payable pursuant to Section 6 of the Agreement in respect of such Early Termination Date shall be determined without regard to the difference between actual dividends declared (including Extraordinary Dividends) and expected dividends as of the Trade Date.
Additional Termination Event(s):	Notwithstanding anything to the contrary in the Equity Definitions, the declaration or payment by the Issuer of any Extraordinary Dividend, other than an ordinary cash dividend of no more than the Ordinary Dividend Amount (as specified in Schedule I) per Share with a record date no earlier than the relevant Ordinary Dividend Record Date (as specified in Schedule I), will constitute an Additional Termination Event, with Counterparty as the sole Affected Party and all Transactions hereunder as the Affected Transactions.

EXTRAORDINARY EVENTS:

Consequences of Merger Events:

Share-for-Share: Modified Calculation Agent Adjustment

Share-for-Other: Cancellation and Payment on that portion of the Other Consideration that consists of cash; Modified Calculation Agent Adjustment on the remainder of the Other Consideration

Share-for-Combined:	Component Adjustment
Tender Offer:	Applicable

Consequences of Tender Offers:

Share-for-Share: Modified Calculation Agent Adjustment

Share-for-Other: Modified Calculation Agent Adjustment

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Share-for-Combined:	Modified Calculation Agent Adjustment
New Shares:	In the definition of New Shares in Section 12.1(i) of the Equity Definitions, the text in clause (i) thereof shall be deleted in its entirety (including the word “and” following such clause (i)) and replaced with “publicly quoted, traded or listed on any of the New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or their respective successors)”.

For purposes of the Transaction,

(i)     the definition of Merger Date in Section 12.1(c) of the Equity Definitions shall be amended to read, “Merger Date shall mean the Announcement Date.”;

(ii)    the definition of Tender Offer Date in Section 12.1(e) of the Equity Definitions shall be amended to read, “Tender Offer Date shall mean the Announcement Date.”;

(iii)     the definition of “Announcement Date” in Section 12.1(l) of the Equity Definitions is hereby amended by (a) replacing the words “a firm” with the word “any” in the second and fourth lines thereof, (b) replacing the word “leads to the” with the words “, if completed, would lead to a” in the third and the fifth lines thereof, (c) replacing the words “voting shares” with the word “Shares” in the fifth line thereof, (d) inserting the words “by any entity” after the word “announcement” in the second and the fourth lines thereof, (e) inserting the words “or to explore the possibility of engaging in” after the words “engage in” in the second line thereof and (f) inserting the words “or to explore the possibility of purchasing or otherwise obtaining” after the word “obtain” in the fourth line thereof;

(iv)    Section 12.2 of the Equity Definitions is hereby amended by inserting the words “Announcement Date in respect of any Merger Event or any potential” before the words “Merger Event” in the final line thereof;

Composition of Combined Consideration:        Not Applicable

Nationalization, Insolvency or Delisting: Cancellation and Payment; provided that in addition to the provisions of Section 12.6(a)(iii) of the Equity Definitions, it shall constitute a Delisting if the Exchange is located in the United States and the Shares are not immediately re-listed, re-traded or re-quoted on any of the New York Stock Exchange, The NASDAQ Global Market or The NASDAQ Global Select Market (or their respective successors); if the Shares are immediately re-listed, re-traded or re-quoted on any such exchange or quotation system, such exchange or quotation system shall thereafter be deemed to be the Exchange.

Additional Disruption Events:

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Change in Law: Applicable; provided that (i) any determination as to whether (A) the adoption of or any change in any applicable law or regulation (including, for the avoidance of doubt and without limitation, (x) any tax law or (y) adoption or promulgation of new regulations authorized or mandated by existing statute) or (B) the promulgation of or any change in the interpretation by any court, tribunal or regulatory authority with competent jurisdiction of any applicable law or regulation (including any action taken by a taxing authority), in each case, constitutes a “Change in Law” shall be made without regard to Section 739 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 or any similar legal certainty provision in any legislation enacted, or rule or regulation promulgated, on or after the Trade Date, and (ii) Section 12.9(a)(ii) of the Equity Definitions is hereby amended by replacing the parenthetical beginning after the word “regulation” in the second line thereof the words “(including, for the avoidance of doubt and without limitation, (x) any tax law or (y) adoption or promulgation of new regulations authorized or mandated by existing statute)”.

Failure to Deliver: Applicable

Insolvency Filing: Applicable

Hedging Disruption: Applicable; provided that Section 12.9(a)(v) of the Equity Definitions is amended by adding the following: “provided, however, that any such inability that occurs solely due to the deterioration of the creditworthiness of the Hedging Party shall not be a Hedging Disruption.”

Increased Cost of Hedging:	Applicable; provided that Section 12.9(a)(vi) of the Equity Definitions is amended by adding the following: “provided that any such materially increased amount that is incurred solely as a result of the deterioration of the creditworthiness of the Hedging Party shall not be an Increased Cost of Hedging.”
Loss of Stock Borrow:	Applicable
Maximum Stock Loan Rate:	200 bps

Increased Cost of Stock Borrow:	Applicable
Initial Stock Loan Rate:	50 bps

Determining Party: For all applicable events, Dealer; provided that following any determination hereunder and upon written request by Issuer, the Determining Party shall provide Issuer with a reasonably detailed explanation in writing of its determination including, where applicable, a description of the methodology and the basis for such determination.

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Hedging Party: For all applicable events, Dealer

Non-Reliance: Applicable

Agreements and Acknowledgements Regarding Hedging Activities: Applicable

Additional Acknowledgments: Applicable

Calculation Agent: Dealer

Account Details and Notices:

(a)    Account for delivery of Shares to Issuer:

Transfer Agent: Computershare

Method: DWAC (Deposit / Withdrawal at Custodian)

Account: [Redacted]

(b)     Account for payments to Issuer:

Lennox International Inc.

Northern Trust Bank

Account#  [Redacted]

ABA#   [Redacted]

(c)     Account for payments to Dealer:

Bank:    JPMorgan Chase Bank, N.A.

ABA#:     [Redacted]

Acct No.: [Redacted]

Beneficiary: [Redacted]

Ref:    [Redacted]

Account for delivery of Shares to Dealer:

DTC [Redacted]

(d)    For purposes of this Confirmation:

(i)    Address for notices or communications to Issuer:

Lennox International Inc.

2140 Lake Park Blvd.

Richardson, Texas 75080

Attention: Rick Pelini

Telephone: [Redacted]

Facsimile: [Redacted]

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(ii)    Address for notices or communications to Dealer:

JPMorgan Chase Bank, National Association

EDG Marketing Support

Email:     [Redacted]

With a copy to:

Attention:     Sanjeet S. Dewal

Title:         Executive Director, Equity Derivatives Group

Telephone No:     [Redacted]

Email Address:    [Redacted]

(iii)     The Office of Issuer for each Transaction is: Inapplicable, Issuer is not a Multibranch Party.

(iv)     The Office of Dealer for each Transaction is: London

JPMorgan Chase Bank, National Association

London Branch

P.O. Box 161

60 Victoria Embankment

London EC4Y 0JP

England

Amendments to the Equity Definitions.

(a)     Section 9.2(a)(iii) of the Equity Definitions is hereby amended by deleting the words “the Excess Dividend Amount, if any, and”.

(b)    Section 11.2(a) of the Equity Definitions is hereby amended by deleting the words “in the determination of the Calculation Agent, a diluting or concentrative effect on the theoretical value of the relevant Shares” and replacing them with the words “, in the commercially reasonable judgment of the Calculation Agent, a material economic effect on the relevant Transaction; provided that no such adjustment shall extend or accelerate the term of the Transaction on account of any event that is based on (a) an observable market, other than the market for Issuer’s own stock or (b) an observable index, other than an index calculated and measured solely by reference to the Issuer’s own operations”.

(c)    The first sentence of Section 11.2(c) of the Equity Definitions, prior to clause (A) thereof, is hereby amended to read as follows: ‘(c) If “Calculation Agent Adjustment” is specified as the Method of Adjustment in the related Confirmation of a Share Option Transaction or Share Forward Transaction, then, following the announcement or occurrence of any Potential Adjustment Event, the Calculation Agent will determine whether such Potential Adjustment Event has an economic effect on the Transaction and, if so, will (i) make appropriate adjustment(s), if any, to any one or more of:’ and the portion of such sentence immediately preceding clause (ii) thereof is hereby amended by deleting the words “diluting or concentrative” and the words “(provided that no adjustments will be made to account solely for changes in volatility, expected dividends, stock loan rate or liquidity relative to the relevant Share)” and replacing such latter phrase with the words “(provided that adjustments may be made to account for changes in volatility, stock loan rate or liquidity relevant to the Shares or to the Transaction)”.

(d)    Section 11.2(e)(vii) of the Equity Definitions is hereby amended by deleting the words “diluting or concentrative effect on the theoretical value of the relevant Shares” and replacing them with the words “, in the commercially reasonable judgment of the Calculation Agent, a material economic effect on the relevant Transaction; provided that no adjustment on account of such an event shall extend or accelerate the term of the Transaction if

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such event is based on (a) an observable market, other than the market for Issuer’s own stock or (b) an observable index, other than an index calculated and measured solely by reference to the Issuer’s own operations”.

(e)    Section 12.6(c)(ii) of the Equity Definitions is hereby amended by replacing the words “the Transaction will be cancelled,” in the first line with the words “Dealer will have the right to cancel the Transaction,”.

(f)    Section 12.9(b)(iv) of the Equity Definitions is hereby amended by (A) deleting (1) subsection (A) in its entirety, (2) the phrase “or (B)” following subsection (A) and (3) the phrase “in each case” in subsection (B); and (B) deleting the phrase “neither the Non-Hedging Party nor the Lending Party lends Shares in the amount of the Hedging Shares or” in the penultimate sentence.

(g)    Section 12.9(b)(v) of the Equity Definitions is hereby amended by (A) adding the word “or” immediately before subsection “(B)” and deleting the comma at the end of subsection (A); and (B)(1) deleting subsection (C) in its entirety, (2) deleting the word “or” immediately preceding subsection (C) and (3) replacing in the penultimate sentence the words “either party” with “the Hedging Party” and (4) deleting clause (X) in the final sentence.

Certain Payments and Deliveries by Dealer.

Notwithstanding anything to the contrary herein, or in the Equity Definitions, if at any time (i) an Early Termination Date occurs and Dealer would be required to make a payment pursuant to Section 6 of the Agreement or (ii) an Extraordinary Event occurs and Dealer would be required to make a payment pursuant to Article 12 of the Equity Definitions (the amount of any such payment obligation described in Section 6(i) or (ii) above, a “Dealer Payment Amount”), then Issuer shall have the option to require Dealer to settle such payment obligation in Shares in lieu of cash. If Issuer elects for Dealer to settle an Dealer Payment Amount in Shares, then on such date such Dealer Payment Amount is due, Dealer will deliver a number of Shares with a market value, as determined by the Calculation Agent, equal to all or a portion (which portion may be zero) of the Dealer Payment Amount. If the market value of such Shares equals a portion, but not all, of the Dealer Payment Amount, then, on the date such Dealer Payment Amount is due, a notional balance (the “Dealer Settlement Balance”) shall be established equal to the remaining portion of the Dealer Payment Amount, and Dealer shall commence purchasing Shares for delivery to Issuer on the Observation Date immediately following such date. At the end of each Observation Date on which Dealer purchases Shares pursuant to this Section 6, Dealer shall reduce the Settlement Balance by the amount paid by Dealer to purchase the Shares purchased on such Observation Date; provided, however, that if the amount paid by Dealer to purchase Shares exceeds the 10b-18 VWAP for that Observation Date, Dealer shall reduce the Settlement Balance by the amount equal to the product of (i) the number of Shares purchased on that Observation Date, and (ii) the 10b-18 VWAP. Dealer shall deliver any Shares purchased on an Observation Date pursuant to this Section 6 to Issuer on the third Exchange Business Day following such Observation Date. Dealer shall continue purchasing and delivering Shares on each subsequent Observation Date until the Settlement Balance has been reduced to zero. In making any purchases of Shares contemplated by this Section 6, Dealer shall use commercially reasonable efforts to purchase such Shares in a manner that would qualify for the safe harbor provided by Rule 10b-18 if such purchases were made by or on behalf of Issuer. The period until the Settlement Balance is reduced to zero shall be considered to be part of the Calculation Period for purposes of the representations, warranties and covenants and other provisions herein as the context requires.

Certain Payments and Deliveries by Issuer.

Notwithstanding anything to the contrary herein, or in the Equity Definitions, if at any time (i) an Early Termination Date occurs and Issuer would be required to make a payment pursuant to Section 6 of the Agreement or (ii) an Extraordinary Event occurs and Issuer would be required to make a payment pursuant to Article 12 of the Equity Definitions (any such payment described in Section 7(i) or (ii) above, an “Early Settlement Payment”), then Issuer shall have the option in lieu of making such cash payment, to settle such payment obligation in Shares (such Shares, “Early Settlement Shares”). In order to elect to deliver Early Settlement Shares, (i) Issuer must notify Dealer of its election by no later than 4:00 p.m., New York City time, on the date that is three Exchange Business Days before the date that the Early Settlement Payment is due, (ii) Issuer must specify whether such Early Settlement

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Shares are to be sold by means of a registered offering or by means of a private placement and (iii) Issuer must comply with Annex A below.

Special Provisions for Merger Transactions.

Notwithstanding anything to the contrary herein or in the Equity Definitions, Issuer agrees that:

(i)    It will not during the term of the Transaction make, or, to the extent within its control, permit to be made, any public announcement (as defined in Rule 165(f) under the Securities Act) of any Merger Transaction or potential Merger Transaction unless such public announcement is made prior to the open or after the close of the regular trading session on the Exchange for the Shares.

(ii)    To the extent that an announcement of a potential Merger Transaction occurs during the term of the Transaction and such announcement does not cause the Transaction to be cancelled or terminated in whole pursuant to “Extraordinary Events” in Section 2 above, then as soon as practicable following such announcement (but in any event prior to the next opening of the regular trading session on the Exchange), Issuer shall provide Dealer with written notice of such announcement; promptly (but in any event prior to the next opening of the regular trading session on the Exchange), Issuer shall provide Dealer with written notice specifying (x) Issuer’s average daily “Rule 10b-18 purchases” (as defined in Rule 10b-18) during the three full calendar months immediately preceding the date of such announcement that were not effected through Dealer or its Affiliates and (y) the number of Shares purchased pursuant to the block purchase proviso in Rule 10b-18(b)(4) under the Exchange Act for the three full calendar months preceding the date of such announcement. Such written notice shall be deemed to be a certification by Issuer to Dealer that such information is true and correct. Issuer understands that Dealer will use this information in calculating the trading volume for purposes of Rule 10b-18. In addition, Issuer shall promptly notify Dealer of the earlier to occur of the completion of such transaction and the completion of the vote by target shareholders. Issuer acknowledges that any such public announcement may trigger the provision set forth in Section 10 below. Accordingly, Issuer acknowledges that its actions in relation to any such announcement or transaction must comply with the standards set forth in Section 12(b) below.

“Merger Transaction” means any merger, acquisition or similar transaction involving a recapitalization of Issuer as contemplated by Rule 10b-18(a)(13)(iv) under the Exchange Act.

Special Provisions for Acquisition Transaction Announcements.

(a)     If an Acquisition Transaction Announcement occurs on or prior to the final Valuation Date, then the Calculation Agent shall make such adjustments to the exercise, settlement, payment or any other terms of such Transaction (including, without limitation, the Forward Price) as the Calculation Agent determines appropriate, at such time or at multiple times as the Calculation Agent determines appropriate, to account for the economic effect on such Transaction of such Acquisition Transaction Announcement (provided that adjustments may be made to account for changes in volatility, stock loan rate or liquidity relevant to the Shares or to the Transaction). If an Acquisition Transaction Announcement occurs after the Trade Date but prior to the Lock-Out Date, the Lock-Out Date shall be deemed to be the date of such Acquisition Transaction Announcement.

(b)     “Acquisition Transaction Announcement” means (i) the announcement of an Acquisition Transaction other than a Hostile Tender Offer, (ii) an announcement that Issuer or any of its subsidiaries has entered into an agreement, a letter of intent or an understanding designed to result in an Acquisition Transaction, (iii) the announcement of the intention to solicit or enter into, or to explore strategic alternatives or other similar undertaking that may include, an Acquisition Transaction, (iv) any other announcement that in the reasonable judgment of the Calculation Agent may result in an Acquisition Transaction or (v) any announcement subsequent to an Acquisition Transaction Announcement relating to an amendment, extension, withdrawal or other change to the subject matter of the previous Acquisition Transaction Announcement.

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(c)    “Acquisition Transaction” means (i) any Merger Event (for purposes of this definition, the definition of Merger Event shall be read with the references therein to “100%” being replaced by “20%” and to “50%” by “75%” and without reference to the clause beginning immediately following the definition of Reverse Merger therein to the end of such definition), Tender Offer or Merger Transaction or any other transaction involving the merger of Issuer with or into any third party, (ii) the sale or transfer of all or substantially all of the assets or liabilities of Issuer, (iii) a recapitalization, reclassification, binding share exchange or other similar transaction, (iv) any acquisition, lease, exchange, transfer, disposition (including by way of spin-off or distribution) of assets or liabilities (including any capital stock or other ownership interests in subsidiaries) or other similar event by Issuer or any of its subsidiaries where the consideration transferable or receivable by or to Issuer or its subsidiaries in respect of each transaction exceeds 50% of the market capitalization of Issuer and (v) any transaction with respect to which Issuer or its board of directors has a legal obligation to make a recommendation to its shareholders in respect of such transaction (whether pursuant to Rule 14e-2 under the Exchange Act or otherwise); provided, however, that notwithstanding anything to the contrary herein, a Hostile Tender Offer shall be excluded from the foregoing definition and shall not constitute an Acquisition Transaction.

(d)     “Hostile Tender Offer” means the announcement by any person or entity of any intention to purchase or otherwise obtain the requisite number of Shares (whether or not subsequently amended) that, if completed, would lead to a Tender Offer, where such transaction has not been initiated, approved by, agreed to, recommended by or otherwise consented to by Company or its board of directors, or negotiated by Company or any authorized representative of Company. Company agrees to immediately notify Dealer on any date (each, a “Reference Date”) after the occurrence of a Hostile Tender Offer on which Company or its board of directors approves, agrees to, recommends or otherwise consents to such transaction, or Company or an authorized representative of Company negotiates such transaction, or Company or its board of directors has a legal obligation to make a recommendation to Company’s shareholders in respect of such transaction and does not recommend the rejection thereof. Immediately following the occurrence of a Reference Date in respect of any Hostile Tender Offer, such transaction shall cease to constitute, and shall no longer be treated as, a Hostile Tender Offer for purposes of this section.

Dealer Adjustments.

In the event that Dealer reasonably determines, in its commercially reasonable discretion upon the advice of counsel, that it is appropriate with regard to any legal, regulatory or self-regulatory requirements or related policies and procedures (whether or not such requirements, policies or procedures are imposed by law or have been voluntarily adopted by Dealer, and including, without limitation, Rule 10b-18, Rule 10b-5, Regulations 13D-G and Regulations 14 D-E under the Exchange Act, but provided that such requirements, policies or procedures are generally applicable in similar situations and applied to the relevant Transaction in a non-discriminatory manner), for Dealer to refrain from purchasing Shares or engaging in other market activity or to purchase fewer than the number of Shares or to engage in fewer or smaller other market transactions than Dealer would otherwise purchase or engage in on any Trading Day on or prior to the last day of the Calculation Period or, if applicable, the Settlement Valuation Period, then Dealer may, in its discretion, elect that a Market Disruption Event shall be deemed to have occurred on such Trading Day. Dealer shall notify Issuer upon the exercise of Dealer’s rights pursuant to this Section 10 and shall subsequently notify Issuer on the day Dealer believes that the circumstances giving rise to such exercise have changed.

Covenants.

Issuer covenants and agrees that:

(a)     Until the end of the Potential Purchase Period (as defined below), neither it nor any of its affiliated purchasers (as defined in Rule 10b-18 under the Exchange Act) shall directly or indirectly (which shall be deemed to include the writing or purchase of any cash-settled or other derivative or structured Share repurchase transaction with a hedging period, calculation period or settlement valuation period or similar period that overlaps with the Transaction) purchase, offer to purchase, place any bid or limit order relating to a purchase of or commence any

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tender offer relating to Shares (or any security convertible into or exchangeable for Shares) without the prior written approval of Dealer or take any other action that would cause the purchase by Dealer of any Shares in connection with this Confirmation not to qualify for the safe harbor provided in Rule 10b-18 under the Exchange Act (assuming for the purposes of this paragraph that such safe harbor were otherwise available for such purchases), provided that Issuer may enter into a share repurchase transaction substantially identical to the Transaction with another dealer or its affiliate on the date hereof. “Potential Purchase Period” means the period from, and including, the Trade Date to, and including, the latest of (i) the last day of the Calculation Period, (ii) the earlier of (A) the last day of the Calculation Period and (B) the Scheduled Valuation Date and (iii) if an Early Termination Date occurs or the Transaction is cancelled pursuant to Article 12 of the Equity Definitions, a date determined by Dealer in its commercially reasonable discretion and communicated to Issuer no later than the Exchange Business Day immediately following such date.

(b)     It will comply with all laws, rules and regulations applicable to it (including, without limitation, the Securities Act and the Exchange Act) in connection with the transactions contemplated by this Confirmation.

(c)     Without limiting the generality of Section 13.1 of the Equity Definitions, it is not relying, and has not relied, upon Dealer or any of its representatives or advisors with respect to the legal, accounting, tax or other implications of this Confirmation and that it has conducted its own analyses of the legal, accounting, tax and other implications of this Confirmation, and that Dealer and its Affiliates may from time to time effect transactions for their own account or the account of customers and hold positions in securities or options on securities of Issuer and that Dealer and its Affiliates may continue to conduct such transactions during the term of this Confirmation. Without limiting the generality of the foregoing, Issuer acknowledges that Dealer is not making any representations or warranties or taking any position or expressing any view with respect to the treatment of the Transaction under any accounting standards including ASC Topic 260, Earnings Per Share, ASC Topic 815, Derivatives and Hedging, or ASC Topic 480, Distinguishing Liabilities from Equity and ASC 815-40, Derivatives and Hedging – Contracts in Entity’s Own Equity (or any successor issue statements) or under FASB’s Liabilities & Equity Project.

(d)    Neither it nor any Affiliates shall take any action that would cause a restricted period (as defined in Regulation M under the Exchange Act (“Regulation M”)) to be applicable to any purchases of Shares, or of any security for which Shares is a reference security (as defined in Regulation M), by Issuer or any affiliated purchasers (as defined in Regulation M) of Issuer during the Potential Purchase Period.

(e)    It will not make any election or take any other action in connection with the Transaction while aware of any material nonpublic information regarding Issuer or the Shares.

Representations, Warranties and Acknowledgments.

(a)     Issuer hereby represents and warrants to Dealer on the date hereof and on and as of the Initial Share Delivery Date that:

(i)    (A) None of Issuer and its officers and directors is aware of any material nonpublic information regarding Issuer or the Shares, and is entering into the Transaction in good faith and not as part of a plan or scheme to evade the prohibitions of federal securities laws, including, without limitation, Rule 10b-5 under the Exchange Act and (B) Issuer agrees not to alter or deviate from the terms of this Confirmation or enter into or alter a corresponding or hedging transaction or position with respect to the Shares (including, without limitation, with respect to any securities convertible or exchangeable into the Shares) during the term of this Confirmation. Without limiting the generality of the foregoing, all reports and other documents filed by Issuer with the Securities and Exchange Commission pursuant to the Exchange Act when considered as a whole (with the more recent such reports and documents deemed to amend inconsistent statements contained in any earlier such reports and documents) do not contain any untrue statement of a material fact or any omission of a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances in which they were made, not misleading.

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(ii)    The transactions contemplated by this Confirmation have been authorized under Issuer’s publicly announced program to repurchase Shares and, prior to the Trade Date, Dealer shall deliver to Issuer a resolution of Issuer’s board of directors authorizing the Transaction and such other certificate or certificates as Dealer shall reasonably request.

(iii)     Issuer is not entering into this Confirmation to facilitate a distribution of the Shares (or any security convertible into or exchangeable for Shares) or in connection with a future issuance of securities.

(iv)     Issuer is not entering into this Confirmation to create actual or apparent trading activity in the Shares (or any security convertible into or exchangeable for Shares) or to raise or depress the price of the Shares (or any security convertible into or exchangeable for Shares) in violation of the federal securities laws.

(v)     There have been no purchases of Shares in Rule 10b-18 purchases of blocks pursuant to the once-a-week block exception contained in Rule 10b-18(b)(4) by or for Issuer or any of its affiliated purchasers during each of the four calendar weeks preceding the Trade Date and during the calendar week in which the Trade Date occurs (“Rule 10b-18 purchase”, “blocks” and “affiliated purchaser” each being used as defined in Rule 10b-18).

(vi)    Issuer is as of the date hereof, and after giving effect to the transactions contemplated hereby and any concurrent repurchase transaction will be, Solvent. As used in this paragraph, the term “Solvent” means, with respect to a particular date, that on such date (A) the present fair market value (or present fair saleable value) of the assets of Issuer is not less than the total amount required to pay the liabilities of Issuer on its total existing debts and liabilities (including contingent liabilities) as they become absolute and matured, (B) Issuer is able to realize upon its assets and pay its debts and other liabilities, contingent obligations and commitments as they mature and become due in the normal course of business, (C) assuming consummation of the transactions as contemplated by this Confirmation, Issuer is not incurring debts or liabilities beyond its ability to pay as such debts and liabilities mature, (D) Issuer is not engaged in any business or transaction, and does not propose to engage in any business or transaction, for which its property would constitute unreasonably small capital after giving due consideration to the prevailing practice in the industry in which Issuer is engaged, (E) Issuer is not a defendant in any civil action that could reasonably be expected to result in a judgment that Issuer is or would become unable to satisfy, (F) Issuer is not “insolvent” (as such term is defined under Section 101(32) of the U.S. Bankruptcy Code (Title 11 of the United States Code) (the “Bankruptcy Code”)) and (G) Issuer would be able to purchase Shares with an aggregate purchase price equal to the Prepayment Amount in compliance with the corporate laws of the jurisdiction of its incorporation.

(vii)     Issuer is not, and after giving effect to the transactions contemplated hereby and any concurrent repurchase transaction will not be, required to register as an “investment company” as such term is defined in the Investment Company Act of 1940, as amended.

(viii)     No state or local (including non-U.S. jurisdictions) law, rule, regulation or regulatory order applicable to the Shares would give rise to any reporting, consent, registration or other requirement (including without limitation a requirement to obtain prior approval from any person or entity) as a result of Dealer or its Affiliates owning or holding (however defined) Shares.

(ix)    Issuer (A) is capable of evaluating investment risks independently, both in general and with regard to all transactions and investment strategies involving a security or securities, (B) will exercise independent judgment in evaluating the recommendations of any broker-dealer or its associated persons, unless it has otherwise notified the broker-dealer in writing, and (C) has total assets of at least USD 50 million.

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(b)    Issuer acknowledges and agrees that the Initial Shares may be sold short to Issuer. Issuer further acknowledges and agrees that Dealer may purchase Shares in connection with the Transaction, which Shares may be used to cover all or a portion of such short sale or may be delivered to Issuer. Such purchases and any other market activity by Dealer will be conducted independently of Issuer by Dealer as principal for its own account. All of the actions to be taken by Dealer in connection with the Transaction shall be taken by Dealer independently and without any advance or subsequent consultation with Issuer. It is the intent of the parties that the Transaction comply with the requirements of Rule 10b5-1(c)(1)(i)(B) of the Exchange Act, and the parties agree that this Confirmation shall be interpreted to comply with the requirements of such Rule, and Issuer shall not take any action that results in the Transaction not so complying with such requirements. Without limiting the generality of the preceding sentence, Issuer acknowledges and agrees that (A) Issuer does not have, and shall not attempt to exercise, any influence over how, when or whether Dealer effects any market transactions in connection with the Transaction and (B) neither Issuer nor its officers or employees shall, directly or indirectly, communicate any information regarding Issuer or the Shares to any employee of Dealer or its Affiliates, other than employees identified by Dealer to Issuer in writing as employees not responsible for executing market transactions in connection with the Transaction. Issuer also acknowledges and agrees that any amendment, modification, waiver or termination of this Confirmation must be effected in accordance with the requirements for the amendment or termination of a “plan” as defined in Rule 10b5-1(c) under the Exchange Act. Without limiting the generality of the foregoing, any such amendment, modification, waiver or termination shall be made in good faith and not as part of a plan or scheme to evade the prohibitions of Rule 10b-5 under the Exchange Act, and no such amendment, modification or waiver shall be made at any time at which Issuer or any officer or director of Issuer is aware of any material nonpublic information regarding Issuer or the Shares.

(c)    Each of Issuer and Dealer represents and warrants to the other that it is an “eligible contract participant” as defined in Section 1a(18) of the U.S. Commodity Exchange Act, as amended.

(d)     Each of Issuer and Dealer acknowledges that the offer and sale of the Transaction to it is intended to be exempt from registration under the Securities Act by virtue of Section 4(a)(2) thereof. Accordingly, it represents and warrants to the other party that (i) it has the financial ability to bear the economic risk of its investment in the Transaction and is able to bear a total loss of its investment, (ii) it is an “accredited investor” as that term is defined in Regulation D as promulgated under the Securities Act, (iii) it is entering into the Transaction for its own account and without a view to the distribution or resale thereof and (iv) the assignment, transfer or other disposition of the Transaction has not been and will not be registered under the Securities Act and is restricted under this Confirmation, the Securities Act and state securities laws.

Acknowledgements of Issuer Regarding Hedging and Market Activity.

Issuer agrees, understands and acknowledges that:

(a)    during the period from (and including) the Trade Date to (and including) the Settlement Date, Dealer and its Affiliates may buy or sell Shares or other securities or buy or sell options or futures contracts or enter into swaps or other derivative transactions in order to adjust its Hedge Position with respect to the Transaction;

(b)    Dealer and its Affiliates also may be active in the market for the Shares or options, futures contracts, swaps or other derivative transactions relating to the Shares other than in connection with hedging activities in relation to the Transaction;

(c)    Dealer shall make its own determination as to whether, when and in what manner any hedging or market activities in Issuer’s securities or other securities or transactions shall be conducted and shall do so in a manner that it deems appropriate to hedge its price and market risk with respect to the Transaction; and

(d)    any such market activities of Dealer and its Affiliates may affect the market price and volatility of the Shares, including the 10b-18 VWAP and the Forward Price, each in a manner that may be adverse to Issuer.

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Other Provisions.

(a)    Issuer agrees and acknowledges that Dealer is a “financial institution” and “financial participant” within the meaning of Sections 101(22) and 101(22A) of the Bankruptcy Code. The parties hereto further agree and acknowledge that it is the intent of the parties that (A) this Confirmation is a “securities contract,” as such term is defined in Section 741(7) of the Bankruptcy Code, with respect to which each payment and delivery hereunder or in connection herewith is a “termination value,” “payment amount” or “other transfer obligation” within the meaning of Section 362 of the Bankruptcy Code and a “settlement payment,” within the meaning of Section 546 of the Bankruptcy Code, and (B) Dealer is entitled to the protections afforded by, among other sections, Sections 362(b)(6), 362(b)(17), 362(o), 546(e), 555 and 561 of the Bankruptcy Code.

(b)    Dealer and Issuer hereby agree and acknowledge that Dealer has authorized Issuer to disclose the Transaction to any and all persons, and there are no express or implied agreements, arrangements or understandings to the contrary, and authorizes Issuer to use any information that Issuer receives or has received with respect to the Transaction in any manner.

(c)    In the event Issuer becomes the subject of proceedings (“Bankruptcy Proceedings”) under the Bankruptcy Code or any other applicable bankruptcy or insolvency statute, any rights or claims of Dealer hereunder in respect of the Transaction shall rank for all purposes no higher than, but on a parity with, the rights or claims of holders of Shares, and Dealer hereby agrees that its rights and claims hereunder shall be subordinated to those of all parties with claims or rights against Issuer (other than common stockholders) to the extent necessary to assure such ranking. Without limiting the generality of the foregoing, after the commencement of Bankruptcy Proceedings, the claims of Dealer hereunder shall for all purposes have rights equivalent to the rights of a holder of a percentage of the Shares equal to the aggregate amount of such claims (the “Claim Amount”) taken as a percentage of the sum of (i) the Claim Amount and (ii) the aggregate fair market value of all outstanding Shares on the record date for distributions made to the holders of such Shares in the related Bankruptcy Proceedings. Notwithstanding any right it might otherwise have to assert a higher priority claim in any such Bankruptcy Proceedings, Dealer shall be entitled to receive a distribution solely to the extent and only in the form that a holder of such percentage of the Shares would be entitled to receive in such Bankruptcy Proceedings, and, from and after the commencement of such Bankruptcy Proceedings, Dealer expressly waives (i) any other rights or distributions to which it might otherwise be entitled in such Bankruptcy Proceedings in respect of its rights and claims hereunder and (ii) any rights of setoff it might otherwise be entitled to assert in respect of such rights and claims.

(d)    Notwithstanding any provision of this Confirmation or any other agreement between the parties to the contrary, neither the obligations of Issuer nor the obligations of Dealer hereunder are secured by any collateral, security interest, pledge or lien.

(e)    Each party waives any and all rights it may have to set off obligations arising under the Agreement and the Transaction against other obligations between the parties, whether arising under any other agreement, applicable law or otherwise.

(f)    Notwithstanding anything to the contrary herein, Dealer may, by prior notice to Issuer, satisfy its obligation to deliver any Shares or other securities on any date due (an “Original Delivery Date”) by making separate deliveries of Shares or such securities, as the case may be, at more than one time on or prior to such Original Delivery Date, so long as the aggregate number of Shares and other securities so delivered on or prior to such Original Delivery Date is equal to the number required to be delivered on such Original Delivery Date.

(g)    It shall constitute an Additional Termination Event with respect to which the Transaction is the sole Affected Transaction and Issuer is the sole Affected Party and Dealer shall be the party entitled to designate an Early Termination Date pursuant to Section 6(b) of the Agreement if, at any time on or prior to the Valuation Date, the price per Share on the Exchange, as determined by the Calculation Agent, is at or below the Threshold Price (as specified in Schedule I).

Share Cap.

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Notwithstanding any other provision of this Confirmation or the Agreement to the contrary, in no event shall (i) Issuer be required to deliver to Dealer in the aggregate a number of Shares that exceeds the Issuer Share Cap as of the date of delivery (as specified in Schedule I) or (ii) Dealer be required to deliver to Issuer in the aggregate a number of Shares that exceeds the Dealer Share Cap as of the date of delivery (as specified in Schedule I).

Transfer and Assignment.

Dealer may transfer or assign its rights and obligations hereunder and under the Agreement, in whole or in part, to any of its Affiliates of equivalent credit quality (or whose obligations are guaranteed by an entity of equivalent credit quality) without the consent of Issuer.

Role of Agent.

Each party agrees and acknowledges that (a) JPMS, an Affiliate of Dealer, has acted solely as agent and not as principal with respect to this Master Confirmation and each Transaction and (b) JPMS has no obligation or liability, by way of guaranty, endorsement or otherwise, in any manner in respect of any Transaction (including, if applicable, in respect of the settlement thereof). Each party agrees it will look solely to the other party (or any guarantor in respect thereof) for performance of such other party’s obligations under any Transaction. JPMS is authorized to act as agent for Dealer.

Notwithstanding any other provision in this Confirmation to the contrary requiring or allowing Dealer to purchase, sell, receive or deliver any Shares or other securities to or from Issuer, Dealer may designate any of its Affiliates to purchase, sell, receive or deliver such Shares or other securities and otherwise to perform Dealer’s obligations in respect of the Transaction and any such designee may assume such obligations. Dealer may assign the right to receive Settlement Shares to any third party who may legally receive Settlement Shares. Dealer shall be discharged of its obligations to Issuer only to the extent of any such performance. For the avoidance of doubt, Dealer hereby acknowledges that notwithstanding any such designation hereunder, to the extent any of Dealer’s obligations in respect of the Transaction are not completed by its designee, Dealer shall be obligated to continue to perform or to cause any other of its designees to perform in respect of such obligations.

Governing Law; Jurisdiction; Waiver.

THIS CONFIRMATION AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS CONFIRMATION SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. THE PARTIES HERETO IRREVOCABLY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND THE UNITED STATES COURT FOR THE SOUTHERN DISTRICT OF NEW YORK IN CONNECTION WITH ALL MATTERS RELATING HERETO AND WAIVE ANY OBJECTION TO THE LAYING OF VENUE IN, AND ANY CLAIM OF INCONVENIENT FORUM WITH RESPECT TO, THESE COURTS.

EACH PARTY HEREBY IRREVOCABLY WAIVES (ON ITS OWN BEHALF AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ON BEHALF OF ITS STOCKHOLDERS) ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THE TRANSACTION OR THE ACTIONS OF ISSUER OR ITS AFFILIATES IN THE NEGOTIATION, PERFORMANCE OR ENFORCEMENT HEREOF.

Remainder of Page Intentionally Blank

_________________________________________________________________________________

Please confirm that the foregoing correctly sets forth the terms of our agreement by executing this Confirmation and returning it to us byfacsimile to the number provided on the attached facsimile cover page.

Confirmed as of the date first written above:

LENNOX INTERNATIONAL, INC.	J.P. MORGAN SECURITIES LLC, as agent for JPMorgan Chase Bank, National Association
By: _/Rick Pelini________________________    Name: Rick Pelini    Title: Vice President, Treasurer	By: _/s/ Sanjeet Dewal_________________    Name: Sanjeet Dewal    Title: Executive Director

ANNEX A

BUYER SETTLEMENT PROVISIONS

1.    The following Buyer Settlement Provisions shall apply to the extent indicated under the Confirmation:

Settlement Currency: USD

Settlement Method Election: Applicable; provided that (i) Section 7.1 of the Equity Definitions is hereby amended by deleting the word “Physical” in the sixth line thereof and replacing it with the words “Net Share” and (ii) the Electing Party may make a settlement method election only if the Electing Party represents and warrants to Seller in writing on the date it notifies Seller of its election that, as of such date, the Electing Party is not aware of any material non-public information concerning Buyer or the Shares and is electing the settlement method in good faith and not as part of a plan or scheme to evade compliance with the federal securities laws.

Electing Party: Buyer

Settlement Method

Election Date: The earlier of (i) the Scheduled Valuation Date and (ii) the second Scheduled Trading Day immediately following the Valuation Date (if different than the Scheduled Valuation Date, in which case the election under Section 7.1 of the Equity Definitions shall be made no later than 10 minutes prior to the open of trading on the Exchange on such second Scheduled Trading Day), as the case may be.

Default Settlement Method: Cash Settlement

Forward Cash Settlement

Amount: The Settlement Amount multiplied by the Settlement Price.

Settlement Price: The arithmetic mean of the 10b-18 VWAP for the Observation Dates in the Settlement Valuation Period, subject to a Market Disruption Event as specified in the Confirmation (with references under “Market Disruption Event” in the Confirmation to the “Calculation Period” or “Forward Price” being deemed to refer, for this purpose, to the “Settlement Valuation Period” or the “Settlement Price”, respectively).

Settlement Valuation Period: A number of Observation Dates selected by the Seller in its commercially reasonable discretion, beginning on the Observation Date immediately following the Settlement Method Election Date.

Cash Settlement: If Cash Settlement is applicable, then Buyer shall pay to Seller the absolute value of the Forward Cash Settlement Amount on the Cash Settlement Payment Date.

Cash Settlement

Payment Date: The date one Settlement Cycle following the last day of the Settlement Valuation Period.

Net Share Settlement

Procedures: If Net Share Settlement is applicable, Net Share Settlement shall be made in accordance with paragraphs 2 through 7 below.

2.    Net Share Settlement shall be made by delivery on the Cash Settlement Payment Date of a number of Shares satisfying the conditions set forth in paragraph 3 below (the “Registered Settlement Shares”), or a number of Shares not satisfying such conditions (the “Unregistered Settlement Shares”), in either case with a value equal to the absolute value of the Forward Cash Settlement Amount, with such Shares’ value based on the value thereof to Seller (which value shall, in the case of Unregistered Settlement Shares, take into account a commercially reasonable illiquidity discount not to exceed 1%), in each case as determined by the Seller in its commercially reasonable judgment acting in good faith.

3.    Buyer may only deliver Registered Settlement Shares pursuant to paragraph 2 above if:

(a)    a registration statement covering public resale of the Registered Settlement Shares by Seller (the “Registration Statement”) shall have been filed with the Securities and Exchange Commission under the Securities Act and been declared or otherwise become effective on or prior to the date of delivery, and no stop order shall be in effect with respect to the Registration Statement; a printed prospectus relating to the Registered Settlement Shares (including any prospectus supplement thereto, the “Prospectus”) shall have been delivered to Seller, in such quantities as Seller shall reasonably have requested, on or prior to the date of delivery;

(b)    the form and content of the Registration Statement and the Prospectus (including, without limitation, any sections describing the plan of distribution) shall be satisfactory to Seller;

(c)    as of or prior to the date of delivery, Seller and its Sellers shall have been afforded a reasonable opportunity to conduct a due diligence investigation with respect to Buyer customary in scope for underwritten offerings of equity securities and the results of such investigation are satisfactory to Seller, in its discretion; and

(d)    as of the date of delivery, an agreement (the “Underwriting Agreement”) shall have been entered into with Seller in connection with the public resale of the Registered Settlement Shares by Seller substantially similar to underwriting agreements customary for underwritten offerings of equity securities, in form and substance commercially reasonably satisfactory to Seller and Buyer, which Underwriting Agreement shall include, without limitation, provisions substantially similar to those contained in such underwriting agreements of a publicly traded company relating, without limitation, to the customary indemnification of, and contribution in connection with the liability of, Seller and its Affiliates and the provision of customary opinions, accountants’ comfort letters and lawyers’ negative assurance letters.

4.    If Buyer delivers Unregistered Settlement Shares pursuant to paragraph 2 above:

(a)    all Unregistered Settlement Shares shall be delivered to Seller (or any Affiliate of Seller designated by Seller) pursuant to the exemption from the registration requirements of the Securities Act provided by Section 4(a)(2) thereof;

(b)    as of or prior to the date of delivery, Seller and any potential purchaser of any such Shares from Seller (or any Affiliate of Seller designated by Seller) identified by Seller shall be afforded a commercially reasonable opportunity to conduct a due diligence investigation with respect to Buyer customary in scope for private placements of equity securities (including, without limitation, the right to have made available to them for inspection all financial and other records, pertinent corporate documents and other information reasonably requested by them);

(c)    as of the date of delivery, Buyer shall enter into an agreement (a “Private Placement Agreement”) with Seller (or any Affiliate of Seller designated by Seller) in connection with the private placement of such shares by Buyer to Seller (or any such Affiliate) and the private resale of such shares by Seller (or any such Affiliate), substantially similar to private placement purchase agreements customary for private placements of equity securities, in form and substance commercially reasonably satisfactory to Seller and Buyer, which Private Placement Agreement shall (i) include, without limitation, provisions substantially similar to those contained in such private placement purchase agreements relating to the customary indemnification of, and contribution in connection with the liability of, Seller and its Affiliates, (ii) provide for Buyer using best efforts to deliver documentation appropriate for a private placement of similar size, and the payment by Buyer of all fees and expenses in connection with such resale, including all fees and expenses of counsel for Seller, and (iii) contain representations, warranties, covenants and agreements of Buyer reasonably necessary or advisable to establish and maintain the availability of an exemption from the registration requirements of the Securities Act for such resales; and

(d)    in connection with the private placement of such shares by Buyer to Seller (or any such Affiliate) and the private resale of such shares by Seller (or any such Affiliate), Buyer shall, if so requested by Seller, prepare, in cooperation with Seller, a private placement memorandum in form and substance reasonably satisfactory to Seller and Buyer.

5.    Seller, itself or through an Affiliate (the “Selling Seller”) or any underwriter(s), will sell all, or such lesser portion as may be required hereunder, of the Registered Settlement Shares or Unregistered Settlement Shares and any Make-whole Shares (as defined below) (together, the “Settlement Shares”) delivered by Buyer to Seller pursuant to paragraph 6 below commencing on the Cash Settlement Payment Date and continuing until the date on which the aggregate Net Proceeds (as such term is defined below) of such sales, as determined by Seller, is equal to the absolute value of the Forward Cash Settlement Amount (such date, the “Final Resale Date”). If the proceeds of any sale(s) made by Seller, the Selling Seller or any underwriter(s), net of any fees and commissions (including, without limitation, underwriting or placement fees) customary for similar transactions under the circumstances at the time of the offering, together with carrying charges and expenses incurred in connection with the offer and sale of the Shares (including, but without limitation to, the covering of any over-allotment or short position (syndicate or otherwise)) (the “Net Proceeds”) exceed the absolute value of the Forward Cash Settlement Amount, Seller will refund, in USD or Shares at Buyer’s election, such excess to Buyer on the date that is three (3) Currency Business Days following the Final Resale Date, and, if any portion of the Settlement Shares remains unsold, Seller shall return to Buyer on that date such unsold Shares.

6.    If the Seller determines that the Net Proceeds received from the sale of the Registered Settlement Shares or Unregistered Settlement Shares or any Make-whole Shares, if any, pursuant to this paragraph 6 are less than the absolute value of the Forward Cash Settlement Amount (the amount in USD by which the Net Proceeds are less than the absolute value of the Forward Cash Settlement Amount being the “Shortfall”), Buyer shall, on the Exchange Business Day next succeeding the day on which such Shortfall is established (the “Make-whole Notice Date”), deliver to Seller a notice of Buyer’s election that Buyer shall either (i) pay an amount in cash equal to the Shortfall on the day that is one (1) Currency Business Day after the Make-whole Notice Date, or (ii) deliver additional Shares. If Buyer elects to deliver to Seller additional Shares, then Buyer shall deliver additional Shares in compliance with the terms and conditions of paragraph 3 or paragraph 4 above, as the case may be (the “Make-whole Shares”), on the first Clearance System Business Day which is also an Exchange Business Day following the Make-whole Notice Date in such number as the Seller reasonably believes would have a market value on that Exchange Business Day equal to the Shortfall. Such Make-whole Shares shall be sold by Seller in accordance with the provisions above; provided that if the sum of the Net Proceeds from the sale of the originally delivered Shares and the Net Proceeds from the sale of any Make-whole Shares is less than the absolute value of the Forward Cash Settlement Amount then Buyer shall, at its election, either make such cash payment or deliver to Seller further Make-whole Shares until such Shortfall has been reduced to zero.

7.    Notwithstanding the foregoing, in no event shall the aggregate number of Settlement Shares and Make-whole Shares be greater than the Reserved Shares minus the amount of any Shares actually delivered by Buyer under any other Transaction(s) under this Confirmation (the result of such calculation, the “Capped Number”). Buyer represents and warrants (which shall be deemed to be repeated on each day that a Transaction is outstanding) that the Capped Number is equal to or less than the number of Shares determined according to the following formula:

A – B

Where A = the number of authorized but unissued shares of the Buyer that are not reserved for future issuance on the date of the determination of the Capped Number; and

B = the maximum number of Shares required to be delivered to third parties if Buyer elected Net Share Settlement of all transactions in the Shares (other than Transactions in the Shares under this Confirmation) with all third parties that are then currently outstanding and unexercised.

“Reserved Shares” means 56,000,000Shares.

EX-10.6

MORGAN STANLEY & CO. LLC 1585 BROADWAY NEW YORK, NY 10036-8293 (212) 761-4000

Exhibit 10.6

October 22, 2014

Fixed Dollar Accelerated Share Repurchase Transaction

Lennox International Inc.

2140 Lake Park Boulevard

Richardson, Texas 75080

___________________________________________________________________________________

Dear Sir/Madam:

The purpose of this letter agreement (this “Confirmation”) is to confirm the terms and conditions of the Transaction entered into between Morgan Stanley & Co. LLC (“Dealer”) and Lennox International Inc. (“Issuer”) on the Trade Date specified below (the “Transaction”). This confirmation constitutes a “Confirmation” as referred to in the Agreement specified below.

The definitions and provisions contained in the 2002 ISDA Equity Derivatives Definitions (as published by the International Swaps and Derivatives Association, Inc. (“ISDA”)) (the “Equity Definitions”) are incorporated into this Confirmation. The Transaction is a Share Forward Transaction for purposes of the Equity Definitions. Any reference to a currency shall have the meaning contained in Section 1.7 of the 2006 ISDA Definitions, as published by ISDA.

This Confirmation evidences a complete and binding agreement between Dealer and Issuer as to the terms of the Transaction to which this Confirmation relates and shall supersede all prior or contemporaneous written or oral communications with respect thereto. This Confirmation shall be subject to an agreement (the “Agreement”) in the form of the 2002 ISDA Master Agreement as if Dealer and Issuer had executed an agreement in such form without any Schedule but with the elections set forth in this Confirmation (and the election of USD as the Termination Currency).

The Transaction shall be the only transaction under the Agreement. If there exists any ISDA Master Agreement between Dealer and Issuer or any confirmation or other agreement between Dealer and Issuer pursuant to which an ISDA Master Agreement is deemed to exist between Dealer and Issuer, then, notwithstanding anything to the contrary in such ISDA Master Agreement, such confirmation or agreement or any other agreement to which Dealer and Issuer are parties, the Transaction shall not be considered a transaction under, or otherwise governed by, such existing or deemed to be existing ISDA Master Agreement.

If there is any inconsistency between the Agreement, this Confirmation and the Equity Definitions, the following will prevail for purposes of the Transaction in the order of precedence indicated: (i) this Confirmation; (ii) the Equity Definitions; and (iii) the Agreement.

The terms of the particular Transaction to which this Confirmation relates are as follows:

GENERAL TERMS:

Trade Date: As specified in Schedule I.

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Buyer: Issuer

Seller: Dealer

Shares: Common Stock, par value USD 0.01 per share, of Issuer (Ticker: LII)

Forward Price:	A price per Share (as determined by the Calculation Agent) equal to (i) the arithmetic mean (not a weighted average) of the 10b-18 VWAP on each Observation Date that is a Trading Day during the Calculation Period minus (ii) the Discount.
Discount:	As specified in Schedule I.
10b-18 VWAP:	For each Observation Date that is a Trading Day, a price per Share equal to the volume-weighted average price of the Rule 10b-18 eligible trades in the Shares for the entirety of such Trading Day as determined by the Calculation Agent by reference to the screen entitled “LII UN <Equity> AQR SEC” or any successor page as reported by Bloomberg L.P. or any successor (without regard to pre-open or after-hours trading outside of any regular trading session for such Trading Day or issuer block trades (as defined in Rule 10b-18(a)(5) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) on such Trading Day) or, if the price (i) is not reported on such Bloomberg page or successor page or (ii) is determined by the Calculation Agent to have been reported incorrectly, the price determined by the Calculation Agent in a commercially reasonable manner to substitute for the unreported or erroneous price on such day.
Observation Dates:	As specified in Schedule I. Notwithstanding anything to the contrary in this Confirmation or the Equity Definitions, the Calculation Agent shall not adjust any Observation Date.

Calculation Period: The period from, and including, the first Observation Date that is a Trading Day that occurs on or after the Prepayment Date to, but excluding, the relevant Valuation Date; provided, however, that if the Valuation Date is the Scheduled Valuation Date, then the Valuation Date shall be included in the Calculation Period.

Trading Day: Any Exchange Business Day that is not a Disrupted Day in whole.

Initial Shares:	As specified in Schedule I.
Initial Share Delivery Date:	The first Exchange Business Day following the Trade Date. On the Initial Share Delivery Date, Seller shall deliver to Buyer a number of Shares equal to the Initial Shares in accordance with Section 9.4 of the Equity Definitions, with the Initial Share Delivery Date being deemed to be a “Settlement Date” for purposes of such Section 9.4.

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Prepayment: Applicable

Prepayment Amount:	As specified in Schedule I.
Commission Amount:	As specified in Schedule I.
Adjustment Amount:	As specified in Schedule I.
Structuring Fee:	As specified in Schedule I.

Prepayment Date: One Exchange Business Day following the Trade Date. On the Prepayment Date, Buyer shall pay to Seller the Prepayment Amount, the Commission Amount, the Adjustment Amount and the Structuring Fee.

Exchange: New York Stock Exchange

Related Exchange: All Exchanges

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Market Disruption Event: The definition of “Market Disruption Event” in Section 6.3(a) of the Equity Definitions is hereby amended by deleting the words “at any time during the one-hour period that ends at the relevant Valuation Time, Latest Exercise Time, Knock-in Valuation Time or Knock-out Valuation Time, as the case may be,” starting in the third line thereof. Section 6.3(d) of the Equity Definitions is hereby amended by deleting the remainder of the provision following the term “Scheduled Closing Time” in the fourth line thereof. Notwithstanding anything to the contrary in the Equity Definitions, if any Observation Date in the Calculation Period is a Disrupted Day, the Calculation Agent shall have the option in its sole discretion either (i) to determine the weighting of each Rule 10b-18 eligible transaction in the Shares on the relevant Disrupted Day using its commercially reasonable judgment for purposes of calculating the Forward Price, as applicable, (ii) to elect to extend the Calculation Period by a number of Observation Dates equal to the number of Observation Dates that are Disrupted Days during the Calculation Period and/or (iii) to suspend the Calculation Period until the circumstances giving rise to such suspension have ceased. For the avoidance of doubt, if Calculation Agent elects the option described in clause (i) above, then such Disrupted Day shall be deemed to be a Trading Day for purposes of calculating the Forward Price. If a Disrupted Day occurs on any Observation Date during the Calculation Period and each of the nine immediately following Scheduled Trading Days is a Disrupted Day (a “Disruption Event”), then the Calculation Agent may, in its good faith and commercially reasonable discretion, deem such ninth Scheduled Trading Day (or, if such day is not a scheduled Observation Date, the next following scheduled Observation Date) to be an Observation Date that is not a Disrupted Day and determine the 10b-18 VWAP for such ninth Scheduled Trading Day (or such next following scheduled Observation Date) using its good faith and commercially reasonable estimate of the value of the Shares on such ninth Scheduled Trading Day (or such next following scheduled Observation Date) based on the volume, historical trading patterns and price of the Shares.

VALUATION:

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Valuation Date:	The earlier of (i) the Scheduled Valuation Date and (ii) any earlier accelerated Valuation Date resulting from Dealer’s election in accordance with the immediately succeeding paragraph. Dealer shall have the right, in its absolute discretion but subject to the limitation set forth in the immediately succeeding paragraph, to accelerate the Valuation Date, in whole or in part, to any Observation Date that is on or after the Lock-Out Date and prior to the Scheduled Valuation Date by notice (each such notice, an “Acceleration Notice”) to Issuer by 9:00 p.m., New York City time, on the Observation Date immediately following the accelerated Valuation Date. Dealer shall specify in each Acceleration Notice the portion of the Prepayment Amount that is subject to acceleration (which may be less than the full Prepayment Amount, but only so long as such portion is not less than USD $5,000,000). If the portion of the Prepayment Amount that is subject to acceleration is less than the full Prepayment Amount, then the Calculation Agent shall adjust the terms of the Transaction as appropriate in order to take into account the occurrence of such accelerated Valuation Date (including cumulative adjustments to take into account all prior accelerated Valuation Dates). On each Valuation Date, the Calculation Agent shall calculate the Settlement Amount.
Scheduled Valuation Date:	As specified in Schedule I, subject to postponement in accordance with “Market Disruption Event” above
Lock-Out Date:	As specified in Schedule I.

SETTLEMENT TERMS:

Physical Settlement: Applicable On the Settlement Date, Seller shall deliver to Buyer a number of Shares equal to (a) (i) the Prepayment Amount divided by (ii) the Forward Price, minus (b) the Initial Shares (such number of Shares, the “Settlement Amount”), rounded to the nearest whole number of Shares; provided, however, that if the Settlement Amount is less than zero, the terms of the Buyer Settlement Provisions in Annex A shall apply.

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Settlement Currency:	USD
Settlement Date:	The date that falls one Settlement Cycle after the Scheduled Valuation Date or the date on which the relevant Acceleration Notice is delivered, as the case may be.
Other Applicable Provisions:	The last sentence of Section 9.2, Sections 9.8, 9.9, 9.10 and 9.11 (except that the Representation and Agreement contained in Section 9.11 of the Equity Definitions shall be modified by excluding any representations therein relating to restrictions, obligations, limitations or requirements under applicable securities laws arising as a result of the fact that Buyer is the issuer of the Shares) and Section 9.12 of the Equity Definitions will be applicable to the Transaction.

SHARE ADJUSTMENTS:

Potential Adjustment Event:

Notwithstanding anything to the contrary in Section 11.2(e) of the Equity Definitions, an Extraordinary Dividend shall not constitute a Potential Adjustment Event. It shall constitute a Potential Adjustment Event if a Disrupted Day occurs or, pursuant to Section 10 below, is deemed to occur (in whole or in part) on any Trading Day on or prior to the Valuation Date.

Extraordinary Dividend:

Any dividend or distribution on the Shares with an ex-dividend date occurring during the period from, and including, the Trade Date to, and including, the last day of the Calculation Period or, if applicable, the Settlement Valuation Period (other than any dividend or distribution of the type described in Section 11.2(e)(i), Section 11.2(e)(ii)(A) or Section 11.2(e)(ii)(B) of the Equity Definitions).

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Method of Adjustment:	Calculation Agent Adjustment
Agreement Regarding Dividends:	Notwithstanding any other provision of this Confirmation, the Definitions or the Agreement to the contrary, in calculating any adjustment pursuant to Article 11 of the Equity Definitions or any amount payable in respect of any termination or cancellation of the Transaction pursuant to Article 12 of the Equity Definitions or Section 6 of the Agreement, the Calculation Agent shall not take into account changes to any dividends since the Trade Date. For the avoidance of doubt, if an Early Termination Date occurs in respect of the Transaction, the amount payable pursuant to Section 6 of the Agreement in respect of such Early Termination Date shall be determined without regard to the difference between actual dividends declared (including Extraordinary Dividends) and expected dividends as of the Trade Date.
Additional Termination Event(s):	Notwithstanding anything to the contrary in the Equity Definitions, the declaration or payment by the Issuer of any Extraordinary Dividend, other than an ordinary cash dividend of no more than the Ordinary Dividend Amount (as specified in Schedule I) per Share with a record date no earlier than the relevant Ordinary Dividend Record Date (as specified in Schedule I), will constitute an Additional Termination Event, with Counterparty as the sole Affected Party and all Transactions hereunder as the Affected Transactions.

EXTRAORDINARY EVENTS:

Consequences of Merger Events:

Share-for-Share: Modified Calculation Agent Adjustment

Share-for-Other: Cancellation and Payment on that portion of the Other Consideration that consists of cash; Modified Calculation Agent Adjustment on the remainder of the Other Consideration

Share-for-Combined:	Component Adjustment
Tender Offer:	Applicable

Consequences of Tender Offers:

Share-for-Share: Modified Calculation Agent Adjustment

Share-for-Other: Modified Calculation Agent Adjustment

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Share-for-Combined:	Modified Calculation Agent Adjustment
New Shares:	In the definition of New Shares in Section 12.1(i) of the Equity Definitions, the text in clause (i) thereof shall be deleted in its entirety (including the word “and” following such clause (i)) and replaced with “publicly quoted, traded or listed on any of the New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or their respective successors)”.

For purposes of the Transaction,

(i)     the definition of Merger Date in Section 12.1(c) of the Equity Definitions shall be amended to read, “Merger Date shall mean the Announcement Date.”;

(ii)    the definition of Tender Offer Date in Section 12.1(e) of the Equity Definitions shall be amended to read, “Tender Offer Date shall mean the Announcement Date.”;

(iii)     the definition of “Announcement Date” in Section 12.1(l) of the Equity Definitions is hereby amended by (a) replacing the words “a firm” with the word “any” in the second and fourth lines thereof, (b) replacing the word “leads to the” with the words “, if completed, would lead to a” in the third and the fifth lines thereof, (c) replacing the words “voting shares” with the word “Shares” in the fifth line thereof, (d) inserting the words “by any entity” after the word “announcement” in the second and the fourth lines thereof, (e) inserting the words “or to explore the possibility of engaging in” after the words “engage in” in the second line thereof and (f) inserting the words “or to explore the possibility of purchasing or otherwise obtaining” after the word “obtain” in the fourth line thereof;

(iv)    Section 12.2 of the Equity Definitions is hereby amended by inserting the words “Announcement Date in respect of any Merger Event or any potential” before the words “Merger Event” in the final line thereof;

Composition of Combined Consideration:        Not Applicable

Nationalization, Insolvency or Delisting: Cancellation and Payment; provided that in addition to the provisions of Section 12.6(a)(iii) of the Equity Definitions, it shall constitute a Delisting if the Exchange is located in the United States and the Shares are not immediately re-listed, re-traded or re-quoted on any of the New York Stock Exchange, The NASDAQ Global Market or The NASDAQ Global Select Market (or their respective successors); if the Shares are immediately re-listed, re-traded or re-quoted on any such exchange or quotation system, such exchange or quotation system shall thereafter be deemed to be the Exchange.

Additional Disruption Events:

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Change in Law: Applicable; provided that (i) any determination as to whether (A) the adoption of or any change in any applicable law or regulation (including, for the avoidance of doubt and without limitation, (x) any tax law or (y) adoption or promulgation of new regulations authorized or mandated by existing statute) or (B) the promulgation of or any change in the interpretation by any court, tribunal or regulatory authority with competent jurisdiction of any applicable law or regulation (including any action taken by a taxing authority), in each case, constitutes a “Change in Law” shall be made without regard to Section 739 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 or any similar legal certainty provision in any legislation enacted, or rule or regulation promulgated, on or after the Trade Date, and (ii) Section 12.9(a)(ii) of the Equity Definitions is hereby amended by replacing the parenthetical beginning after the word “regulation” in the second line thereof the words “(including, for the avoidance of doubt and without limitation, (x) any tax law or (y) adoption or promulgation of new regulations authorized or mandated by existing statute)”.

Failure to Deliver: Applicable

Insolvency Filing: Applicable

Hedging Disruption: Applicable; provided that Section 12.9(a)(v) of the Equity Definitions is amended by adding the following: “provided, however, that any such inability that occurs solely due to the deterioration of the creditworthiness of the Hedging Party shall not be a Hedging Disruption.”

Increased Cost of Hedging:	Applicable; provided that Section 12.9(a)(vi) of the Equity Definitions is amended by adding the following: “provided that any such materially increased amount that is incurred solely as a result of the deterioration of the creditworthiness of the Hedging Party shall not be an Increased Cost of Hedging.”
Loss of Stock Borrow:	Applicable
Maximum Stock Loan Rate:	200 bps

Increased Cost of Stock Borrow:	Applicable
Initial Stock Loan Rate:	50 bps

Determining Party: For all applicable events, Dealer; provided that following any determination hereunder and upon written request by Issuer, the Determining Party shall provide Issuer with a reasonably detailed explanation in writing of its determination including, where applicable, a description of the methodology and the basis for such determination.

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Hedging Party: For all applicable events, Dealer

Non-Reliance: Applicable

Agreements and Acknowledgements Regarding Hedging Activities: Applicable

Additional Acknowledgments: Applicable

Calculation Agent: Dealer

Account Details and Notices:

(a)    Account for delivery of Shares to Issuer:

Transfer Agent: Computershare

Method: DWAC (Deposit / Withdrawal at Custodian)

Account: [Redacted]

(b)     Account for payments to Issuer:

Lennox International Inc.

Northern Trust Bank

Account#  [Redacted]

ABA#   [Redacted]

(c)     Account for payments to Dealer:

Citibank, NY

ABA # [Redacted]

Morgan Stanley & Co.

Account # [Redacted]

Lennox International

Account # [Redacted]

(d)    For purposes of this Confirmation:

(i)    Address for notices or communications to Issuer:

Lennox International Inc.

2140 Lake Park Blvd.

Richardson, Texas 75080

Attention: Rick Pelini

Telephone: [Redacted]

Facsimile: [Redacted]

(ii)    Address for notices or communications to Dealer:

Morgan Stanley & Co. LLC

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1585 Broadway

New York, New York 10036-8293

Attention: Arnaud Blanchard

Telephone: [Redacted]

Facsimile: [Redacted]

Email: [Redacted]

With a copy to:

Morgan Stanley & Co. LLC

1585 Broadway

5th Floor

New York, NY 10036

Attention: Anthony Cicia

Telephone: [Redacted]

Facsimile: [Redacted]

Email: [Redacted]

Amendments to the Equity Definitions.

(a)     Section 9.2(a)(iii) of the Equity Definitions is hereby amended by deleting the words “the Excess Dividend Amount, if any, and”.

(b)    Section 11.2(a) of the Equity Definitions is hereby amended by deleting the words “in the determination of the Calculation Agent, a diluting or concentrative effect on the theoretical value of the relevant Shares” and replacing them with the words “, in the commercially reasonable judgment of the Calculation Agent, a material economic effect on the relevant Transaction; provided that no such adjustment shall extend or accelerate the term of the Transaction on account of any event that is based on (a) an observable market, other than the market for Issuer’s own stock or (b) an observable index, other than an index calculated and measured solely by reference to the Issuer’s own operations”.

(c)    The first sentence of Section 11.2(c) of the Equity Definitions, prior to clause (A) thereof, is hereby amended to read as follows: ‘(c) If “Calculation Agent Adjustment” is specified as the Method of Adjustment in the related Confirmation of a Share Option Transaction or Share Forward Transaction, then, following the announcement or occurrence of any Potential Adjustment Event, the Calculation Agent will determine whether such Potential Adjustment Event has an economic effect on the Transaction and, if so, will (i) make appropriate adjustment(s), if any, to any one or more of:’ and the portion of such sentence immediately preceding clause (ii) thereof is hereby amended by deleting the words “diluting or concentrative” and the words “(provided that no adjustments will be made to account solely for changes in volatility, expected dividends, stock loan rate or liquidity relative to the relevant Share)” and replacing such latter phrase with the words “(provided that adjustments may be made to account for changes in volatility, stock loan rate or liquidity relevant to the Shares or to the Transaction)”.

(d)    Section 11.2(e)(vii) of the Equity Definitions is hereby amended by deleting the words “diluting or concentrative effect on the theoretical value of the relevant Shares” and replacing them with the words “, in the commercially reasonable judgment of the Calculation Agent, a material economic effect on the relevant Transaction; provided that no adjustment on account of such an event shall extend or accelerate the term of the Transaction if such event is based on (a) an observable market, other than the market for Issuer’s own stock or (b) an observable index, other than an index calculated and measured solely by reference to the Issuer’s own operations”.

(e)    Section 12.6(c)(ii) of the Equity Definitions is hereby amended by replacing the words “the Transaction will be cancelled,” in the first line with the words “Dealer will have the right to cancel the Transaction,”.

(f)    Section 12.9(b)(iv) of the Equity Definitions is hereby amended by (A) deleting (1) subsection (A) in its entirety, (2) the phrase “or (B)” following subsection (A) and (3) the phrase “in each case” in subsection

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(B); and (B) deleting the phrase “neither the Non-Hedging Party nor the Lending Party lends Shares in the amount of the Hedging Shares or” in the penultimate sentence.

(g)    Section 12.9(b)(v) of the Equity Definitions is hereby amended by (A) adding the word “or” immediately before subsection “(B)” and deleting the comma at the end of subsection (A); and (B)(1) deleting subsection (C) in its entirety, (2) deleting the word “or” immediately preceding subsection (C) and (3) replacing in the penultimate sentence the words “either party” with “the Hedging Party” and (4) deleting clause (X) in the final sentence.

Certain Payments and Deliveries by Dealer.

Notwithstanding anything to the contrary herein, or in the Equity Definitions, if at any time (i) an Early Termination Date occurs and Dealer would be required to make a payment pursuant to Section 6 of the Agreement or (ii) an Extraordinary Event occurs and Dealer would be required to make a payment pursuant to Article 12 of the Equity Definitions (the amount of any such payment obligation described in Section 6(i) or (ii) above, a “Dealer Payment Amount”), then Issuer shall have the option to require Dealer to settle such payment obligation in Shares in lieu of cash. If Issuer elects for Dealer to settle an Dealer Payment Amount in Shares, then on such date such Dealer Payment Amount is due, Dealer will deliver a number of Shares with a market value, as determined by the Calculation Agent, equal to all or a portion (which portion may be zero) of the Dealer Payment Amount. If the market value of such Shares equals a portion, but not all, of the Dealer Payment Amount, then, on the date such Dealer Payment Amount is due, a notional balance (the “Dealer Settlement Balance”) shall be established equal to the remaining portion of the Dealer Payment Amount, and Dealer shall commence purchasing Shares for delivery to Issuer on the Observation Date immediately following such date. At the end of each Observation Date on which Dealer purchases Shares pursuant to this Section 6, Dealer shall reduce the Settlement Balance by the amount paid by Dealer to purchase the Shares purchased on such Observation Date; provided, however, that if the amount paid by Dealer to purchase Shares exceeds the 10b-18 VWAP for that Observation Date, Dealer shall reduce the Settlement Balance by the amount equal to the product of (i) the number of Shares purchased on that Observation Date, and (ii) the 10b-18 VWAP. Dealer shall deliver any Shares purchased on an Observation Date pursuant to this Section 6 to Issuer on the third Exchange Business Day following such Observation Date. Dealer shall continue purchasing and delivering Shares on each subsequent Observation Date until the Settlement Balance has been reduced to zero. In making any purchases of Shares contemplated by this Section 6, Dealer shall use commercially reasonable efforts to purchase such Shares in a manner that would qualify for the safe harbor provided by Rule 10b-18 if such purchases were made by or on behalf of Issuer. The period until the Settlement Balance is reduced to zero shall be considered to be part of the Calculation Period for purposes of the representations, warranties and covenants and other provisions herein as the context requires.

Certain Payments and Deliveries by Issuer.

Notwithstanding anything to the contrary herein, or in the Equity Definitions, if at any time (i) an Early Termination Date occurs and Issuer would be required to make a payment pursuant to Section 6 of the Agreement or (ii) an Extraordinary Event occurs and Issuer would be required to make a payment pursuant to Article 12 of the Equity Definitions (any such payment described in Section 7(i) or (ii) above, an “Early Settlement Payment”), then Issuer shall have the option in lieu of making such cash payment, to settle such payment obligation in Shares (such Shares, “Early Settlement Shares”). In order to elect to deliver Early Settlement Shares, (i) Issuer must notify Dealer of its election by no later than 4:00 p.m., New York City time, on the date that is three Exchange Business Days before the date that the Early Settlement Payment is due, (ii) Issuer must specify whether such Early Settlement Shares are to be sold by means of a registered offering or by means of a private placement and (iii) Issuer must comply with Annex A below.

Special Provisions for Merger Transactions.

Notwithstanding anything to the contrary herein or in the Equity Definitions, Issuer agrees that:

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(i)    It will not during the term of the Transaction make, or, to the extent within its control, permit to be made, any public announcement (as defined in Rule 165(f) under the Securities Act) of any Merger Transaction or potential Merger Transaction unless such public announcement is made prior to the open or after the close of the regular trading session on the Exchange for the Shares.

(ii)    To the extent that an announcement of a potential Merger Transaction occurs during the term of the Transaction and such announcement does not cause the Transaction to be cancelled or terminated in whole pursuant to “Extraordinary Events” in Section 2 above, then as soon as practicable following such announcement (but in any event prior to the next opening of the regular trading session on the Exchange), Issuer shall provide Dealer with written notice of such announcement; promptly (but in any event prior to the next opening of the regular trading session on the Exchange), Issuer shall provide Dealer with written notice specifying (x) Issuer’s average daily “Rule 10b-18 purchases” (as defined in Rule 10b-18) during the three full calendar months immediately preceding the date of such announcement that were not effected through Dealer or its Affiliates and (y) the number of Shares purchased pursuant to the block purchase proviso in Rule 10b-18(b)(4) under the Exchange Act for the three full calendar months preceding the date of such announcement. Such written notice shall be deemed to be a certification by Issuer to Dealer that such information is true and correct. Issuer understands that Dealer will use this information in calculating the trading volume for purposes of Rule 10b-18. In addition, Issuer shall promptly notify Dealer of the earlier to occur of the completion of such transaction and the completion of the vote by target shareholders. Issuer acknowledges that any such public announcement may trigger the provision set forth in Section 10 below. Accordingly, Issuer acknowledges that its actions in relation to any such announcement or transaction must comply with the standards set forth in Section 12(b) below.

“Merger Transaction” means any merger, acquisition or similar transaction involving a recapitalization of Issuer as contemplated by Rule 10b-18(a)(13)(iv) under the Exchange Act.

Special Provisions for Acquisition Transaction Announcements.

(a)     If an Acquisition Transaction Announcement occurs on or prior to the final Valuation Date, then the Calculation Agent shall make such adjustments to the exercise, settlement, payment or any other terms of such Transaction (including, without limitation, the Forward Price) as the Calculation Agent determines appropriate, at such time or at multiple times as the Calculation Agent determines appropriate, to account for the economic effect on such Transaction of such Acquisition Transaction Announcement (provided that adjustments may be made to account for changes in volatility, stock loan rate or liquidity relevant to the Shares or to the Transaction). If an Acquisition Transaction Announcement occurs after the Trade Date but prior to the Lock-Out Date, the Lock-Out Date shall be deemed to be the date of such Acquisition Transaction Announcement.

(b)     “Acquisition Transaction Announcement” means (i) the announcement of an Acquisition Transaction other than a Hostile Tender Offer, (ii) an announcement that Issuer or any of its subsidiaries has entered into an agreement, a letter of intent or an understanding designed to result in an Acquisition Transaction, (iii) the announcement of the intention to solicit or enter into, or to explore strategic alternatives or other similar undertaking that may include, an Acquisition Transaction, (iv) any other announcement that in the reasonable judgment of the Calculation Agent may result in an Acquisition Transaction or (v) any announcement subsequent to an Acquisition Transaction Announcement relating to an amendment, extension, withdrawal or other change to the subject matter of the previous Acquisition Transaction Announcement.

(c)    “Acquisition Transaction” means (i) any Merger Event (for purposes of this definition, the definition of Merger Event shall be read with the references therein to “100%” being replaced by “20%” and to “50%” by “75%” and without reference to the clause beginning immediately following the definition of Reverse Merger therein to the end of such definition), Tender Offer or Merger Transaction or any other transaction involving the merger of Issuer with or into any third party, (ii) the sale or transfer of all or substantially all of the assets or liabilities of Issuer, (iii) a recapitalization, reclassification, binding share exchange or other similar transaction, (iv) any acquisition, lease, exchange, transfer, disposition (including by way of spin-off or distribution) of assets or liabilities (including any capital stock or other ownership interests in subsidiaries) or other similar event by

Page 14

Issuer or any of its subsidiaries where the consideration transferable or receivable by or to Issuer or its subsidiaries in respect of each transaction exceeds 50% of the market capitalization of Issuer and (v) any transaction with respect to which Issuer or its board of directors has a legal obligation to make a recommendation to its shareholders in respect of such transaction (whether pursuant to Rule 14e-2 under the Exchange Act or otherwise); provided, however, that notwithstanding anything to the contrary herein, a Hostile Tender Offer shall be excluded from the foregoing definition and shall not constitute an Acquisition Transaction.

(d)     “Hostile Tender Offer” means the announcement by any person or entity of any intention to purchase or otherwise obtain the requisite number of Shares (whether or not subsequently amended) that, if completed, would lead to a Tender Offer, where such transaction has not been initiated, approved by, agreed to, recommended by or otherwise consented to by Company or its board of directors, or negotiated by Company or any authorized representative of Company. Company agrees to immediately notify Dealer on any date (each, a “Reference Date”) after the occurrence of a Hostile Tender Offer on which Company or its board of directors approves, agrees to, recommends or otherwise consents to such transaction, or Company or an authorized representative of Company negotiates such transaction, or Company or its board of directors has a legal obligation to make a recommendation to Company’s shareholders in respect of such transaction and does not recommend the rejection thereof. Immediately following the occurrence of a Reference Date in respect of any Hostile Tender Offer, such transaction shall cease to constitute, and shall no longer be treated as, a Hostile Tender Offer for purposes of this section.

Dealer Adjustments.

In the event that Dealer reasonably determines, in its commercially reasonable discretion upon the advice of counsel, that it is appropriate with regard to any legal, regulatory or self-regulatory requirements or related policies and procedures (whether or not such requirements, policies or procedures are imposed by law or have been voluntarily adopted by Dealer, and including, without limitation, Rule 10b-18, Rule 10b-5, Regulations 13D-G and Regulations 14 D-E under the Exchange Act, but provided that such requirements, policies or procedures are generally applicable in similar situations and applied to the relevant Transaction in a non-discriminatory manner), for Dealer to refrain from purchasing Shares or engaging in other market activity or to purchase fewer than the number of Shares or to engage in fewer or smaller other market transactions than Dealer would otherwise purchase or engage in on any Trading Day on or prior to the last day of the Calculation Period or, if applicable, the Settlement Valuation Period, then Dealer may, in its discretion, elect that a Market Disruption Event shall be deemed to have occurred on such Trading Day. Dealer shall notify Issuer upon the exercise of Dealer’s rights pursuant to this Section 10 and shall subsequently notify Issuer on the day Dealer believes that the circumstances giving rise to such exercise have changed.

Covenants.

Issuer covenants and agrees that:

(a)     Until the end of the Potential Purchase Period (as defined below), neither it nor any of its affiliated purchasers (as defined in Rule 10b-18 under the Exchange Act) shall directly or indirectly (which shall be deemed to include the writing or purchase of any cash-settled or other derivative or structured Share repurchase transaction with a hedging period, calculation period or settlement valuation period or similar period that overlaps with the Transaction) purchase, offer to purchase, place any bid or limit order relating to a purchase of or commence any tender offer relating to Shares (or any security convertible into or exchangeable for Shares) without the prior written approval of Dealer or take any other action that would cause the purchase by Dealer of any Shares in connection with this Confirmation not to qualify for the safe harbor provided in Rule 10b-18 under the Exchange Act (assuming for the purposes of this paragraph that such safe harbor were otherwise available for such purchases), provided that Issuer may enter into a share repurchase transaction substantially identical to the Transaction with another dealer or its affiliate on the date hereof. “Potential Purchase Period” means the period from, and including, the Trade Date to, and including, the latest of (i) the last day of the Calculation Period, (ii) the earlier of (A) the last day of the Calculation Period and (B) the Scheduled Valuation Date and (iii) if an Early Termination Date

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occurs or the Transaction is cancelled pursuant to Article 12 of the Equity Definitions, a date determined by Dealer in its commercially reasonable discretion and communicated to Issuer no later than the Exchange Business Day immediately following such date.

(b)     It will comply with all laws, rules and regulations applicable to it (including, without limitation, the Securities Act and the Exchange Act) in connection with the transactions contemplated by this Confirmation.

(c)     Without limiting the generality of Section 13.1 of the Equity Definitions, it is not relying, and has not relied, upon Dealer or any of its representatives or advisors with respect to the legal, accounting, tax or other implications of this Confirmation and that it has conducted its own analyses of the legal, accounting, tax and other implications of this Confirmation, and that Dealer and its Affiliates may from time to time effect transactions for their own account or the account of customers and hold positions in securities or options on securities of Issuer and that Dealer and its Affiliates may continue to conduct such transactions during the term of this Confirmation. Without limiting the generality of the foregoing, Issuer acknowledges that Dealer is not making any representations or warranties or taking any position or expressing any view with respect to the treatment of the Transaction under any accounting standards including ASC Topic 260, Earnings Per Share, ASC Topic 815, Derivatives and Hedging, or ASC Topic 480, Distinguishing Liabilities from Equity and ASC 815-40, Derivatives and Hedging – Contracts in Entity’s Own Equity (or any successor issue statements) or under FASB’s Liabilities & Equity Project.

(d)    Neither it nor any Affiliates shall take any action that would cause a restricted period (as defined in Regulation M under the Exchange Act (“Regulation M”)) to be applicable to any purchases of Shares, or of any security for which Shares is a reference security (as defined in Regulation M), by Issuer or any affiliated purchasers (as defined in Regulation M) of Issuer during the Potential Purchase Period.

(e)    It will not make any election or take any other action in connection with the Transaction while aware of any material nonpublic information regarding Issuer or the Shares.

Representations, Warranties and Acknowledgments.

(a)     Issuer hereby represents and warrants to Dealer on the date hereof and on and as of the Initial Share Delivery Date that:

(i)    (A) None of Issuer and its officers and directors is aware of any material nonpublic information regarding Issuer or the Shares, and is entering into the Transaction in good faith and not as part of a plan or scheme to evade the prohibitions of federal securities laws, including, without limitation, Rule 10b-5 under the Exchange Act and (B) Issuer agrees not to alter or deviate from the terms of this Confirmation or enter into or alter a corresponding or hedging transaction or position with respect to the Shares (including, without limitation, with respect to any securities convertible or exchangeable into the Shares) during the term of this Confirmation. Without limiting the generality of the foregoing, all reports and other documents filed by Issuer with the Securities and Exchange Commission pursuant to the Exchange Act when considered as a whole (with the more recent such reports and documents deemed to amend inconsistent statements contained in any earlier such reports and documents) do not contain any untrue statement of a material fact or any omission of a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances in which they were made, not misleading.

(ii)    The transactions contemplated by this Confirmation have been authorized under Issuer’s publicly announced program to repurchase Shares and, prior to the Trade Date, Dealer shall deliver to Issuer a resolution of Issuer’s board of directors authorizing the Transaction and such other certificate or certificates as Dealer shall reasonably request.

(iii)     Issuer is not entering into this Confirmation to facilitate a distribution of the Shares (or any security convertible into or exchangeable for Shares) or in connection with a future issuance of securities.

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(iv)     Issuer is not entering into this Confirmation to create actual or apparent trading activity in the Shares (or any security convertible into or exchangeable for Shares) or to raise or depress the price of the Shares (or any security convertible into or exchangeable for Shares) in violation of the federal securities laws.

(v)     There have been no purchases of Shares in Rule 10b-18 purchases of blocks pursuant to the once-a-week block exception contained in Rule 10b-18(b)(4) by or for Issuer or any of its affiliated purchasers during each of the four calendar weeks preceding the Trade Date and during the calendar week in which the Trade Date occurs (“Rule 10b-18 purchase”, “blocks” and “affiliated purchaser” each being used as defined in Rule 10b-18).

(vi)    Issuer is as of the date hereof, and after giving effect to the transactions contemplated hereby and any concurrent repurchase transaction will be, Solvent. As used in this paragraph, the term “Solvent” means, with respect to a particular date, that on such date (A) the present fair market value (or present fair saleable value) of the assets of Issuer is not less than the total amount required to pay the liabilities of Issuer on its total existing debts and liabilities (including contingent liabilities) as they become absolute and matured, (B) Issuer is able to realize upon its assets and pay its debts and other liabilities, contingent obligations and commitments as they mature and become due in the normal course of business, (C) assuming consummation of the transactions as contemplated by this Confirmation, Issuer is not incurring debts or liabilities beyond its ability to pay as such debts and liabilities mature, (D) Issuer is not engaged in any business or transaction, and does not propose to engage in any business or transaction, for which its property would constitute unreasonably small capital after giving due consideration to the prevailing practice in the industry in which Issuer is engaged, (E) Issuer is not a defendant in any civil action that could reasonably be expected to result in a judgment that Issuer is or would become unable to satisfy, (F) Issuer is not “insolvent” (as such term is defined under Section 101(32) of the U.S. Bankruptcy Code (Title 11 of the United States Code) (the “Bankruptcy Code”)) and (G) Issuer would be able to purchase Shares with an aggregate purchase price equal to the Prepayment Amount in compliance with the corporate laws of the jurisdiction of its incorporation.

(vii)     Issuer is not, and after giving effect to the transactions contemplated hereby and any concurrent repurchase transaction will not be, required to register as an “investment company” as such term is defined in the Investment Company Act of 1940, as amended.

(viii)     No state or local (including non-U.S. jurisdictions) law, rule, regulation or regulatory order applicable to the Shares would give rise to any reporting, consent, registration or other requirement (including without limitation a requirement to obtain prior approval from any person or entity) as a result of Dealer or its Affiliates owning or holding (however defined) Shares.

(ix)    Issuer (A) is capable of evaluating investment risks independently, both in general and with regard to all transactions and investment strategies involving a security or securities, (B) will exercise independent judgment in evaluating the recommendations of any broker-dealer or its associated persons, unless it has otherwise notified the broker-dealer in writing, and (C) has total assets of at least USD 50 million.

(b)    Issuer acknowledges and agrees that the Initial Shares may be sold short to Issuer. Issuer further acknowledges and agrees that Dealer may purchase Shares in connection with the Transaction, which Shares may be used to cover all or a portion of such short sale or may be delivered to Issuer. Such purchases and any other market activity by Dealer will be conducted independently of Issuer by Dealer as principal for its own account. All of the actions to be taken by Dealer in connection with the Transaction shall be taken by Dealer independently and without any advance or subsequent consultation with Issuer. It is the intent of the parties that the Transaction comply with the requirements of Rule 10b5-1(c)(1)(i)(B) of the Exchange Act, and the parties agree that this Confirmation shall be interpreted to comply with the requirements of such Rule, and Issuer shall not take any action that results in the Transaction not so complying with such requirements. Without limiting the generality of

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the preceding sentence, Issuer acknowledges and agrees that (A) Issuer does not have, and shall not attempt to exercise, any influence over how, when or whether Dealer effects any market transactions in connection with the Transaction and (B) neither Issuer nor its officers or employees shall, directly or indirectly, communicate any information regarding Issuer or the Shares to any employee of Dealer or its Affiliates, other than employees identified by Dealer to Issuer in writing as employees not responsible for executing market transactions in connection with the Transaction. Issuer also acknowledges and agrees that any amendment, modification, waiver or termination of this Confirmation must be effected in accordance with the requirements for the amendment or termination of a “plan” as defined in Rule 10b5-1(c) under the Exchange Act. Without limiting the generality of the foregoing, any such amendment, modification, waiver or termination shall be made in good faith and not as part of a plan or scheme to evade the prohibitions of Rule 10b-5 under the Exchange Act, and no such amendment, modification or waiver shall be made at any time at which Issuer or any officer or director of Issuer is aware of any material nonpublic information regarding Issuer or the Shares.

(c)    Each of Issuer and Dealer represents and warrants to the other that it is an “eligible contract participant” as defined in Section 1a(18) of the U.S. Commodity Exchange Act, as amended.

(d)     Each of Issuer and Dealer acknowledges that the offer and sale of the Transaction to it is intended to be exempt from registration under the Securities Act by virtue of Section 4(a)(2) thereof. Accordingly, it represents and warrants to the other party that (i) it has the financial ability to bear the economic risk of its investment in the Transaction and is able to bear a total loss of its investment, (ii) it is an “accredited investor” as that term is defined in Regulation D as promulgated under the Securities Act, (iii) it is entering into the Transaction for its own account and without a view to the distribution or resale thereof and (iv) the assignment, transfer or other disposition of the Transaction has not been and will not be registered under the Securities Act and is restricted under this Confirmation, the Securities Act and state securities laws.

Acknowledgements of Issuer Regarding Hedging and Market Activity.

Issuer agrees, understands and acknowledges that:

(a)    during the period from (and including) the Trade Date to (and including) the Settlement Date, Dealer and its Affiliates may buy or sell Shares or other securities or buy or sell options or futures contracts or enter into swaps or other derivative transactions in order to adjust its Hedge Position with respect to the Transaction;

(b)    Dealer and its Affiliates also may be active in the market for the Shares or options, futures contracts, swaps or other derivative transactions relating to the Shares other than in connection with hedging activities in relation to the Transaction;

(c)    Dealer shall make its own determination as to whether, when and in what manner any hedging or market activities in Issuer’s securities or other securities or transactions shall be conducted and shall do so in a manner that it deems appropriate to hedge its price and market risk with respect to the Transaction; and

(d)    any such market activities of Dealer and its Affiliates may affect the market price and volatility of the Shares, including the 10b-18 VWAP and the Forward Price, each in a manner that may be adverse to Issuer.

Other Provisions.

(a)    Issuer agrees and acknowledges that Dealer is a “financial institution” and “financial participant” within the meaning of Sections 101(22) and 101(22A) of the Bankruptcy Code. The parties hereto further agree and acknowledge that it is the intent of the parties that (A) this Confirmation is a “securities contract,” as such term is defined in Section 741(7) of the Bankruptcy Code, with respect to which each payment and delivery hereunder or in connection herewith is a “termination value,” “payment amount” or “other transfer obligation” within the meaning of Section 362 of the Bankruptcy Code and a “settlement payment,” within the meaning of Section 546 of the Bankruptcy Code, and (B) Dealer is entitled to the protections afforded by, among other sections, Sections 362(b)(6), 362(b)(17), 362(o), 546(e), 555 and 561 of the Bankruptcy Code.

Page 18

(b)    Dealer and Issuer hereby agree and acknowledge that Dealer has authorized Issuer to disclose the Transaction to any and all persons, and there are no express or implied agreements, arrangements or understandings to the contrary, and authorizes Issuer to use any information that Issuer receives or has received with respect to the Transaction in any manner.

(c)    In the event Issuer becomes the subject of proceedings (“Bankruptcy Proceedings”) under the Bankruptcy Code or any other applicable bankruptcy or insolvency statute, any rights or claims of Dealer hereunder in respect of the Transaction shall rank for all purposes no higher than, but on a parity with, the rights or claims of holders of Shares, and Dealer hereby agrees that its rights and claims hereunder shall be subordinated to those of all parties with claims or rights against Issuer (other than common stockholders) to the extent necessary to assure such ranking. Without limiting the generality of the foregoing, after the commencement of Bankruptcy Proceedings, the claims of Dealer hereunder shall for all purposes have rights equivalent to the rights of a holder of a percentage of the Shares equal to the aggregate amount of such claims (the “Claim Amount”) taken as a percentage of the sum of (i) the Claim Amount and (ii) the aggregate fair market value of all outstanding Shares on the record date for distributions made to the holders of such Shares in the related Bankruptcy Proceedings. Notwithstanding any right it might otherwise have to assert a higher priority claim in any such Bankruptcy Proceedings, Dealer shall be entitled to receive a distribution solely to the extent and only in the form that a holder of such percentage of the Shares would be entitled to receive in such Bankruptcy Proceedings, and, from and after the commencement of such Bankruptcy Proceedings, Dealer expressly waives (i) any other rights or distributions to which it might otherwise be entitled in such Bankruptcy Proceedings in respect of its rights and claims hereunder and (ii) any rights of setoff it might otherwise be entitled to assert in respect of such rights and claims.

(d)    Notwithstanding any provision of this Confirmation or any other agreement between the parties to the contrary, neither the obligations of Issuer nor the obligations of Dealer hereunder are secured by any collateral, security interest, pledge or lien.

(e)    Each party waives any and all rights it may have to set off obligations arising under the Agreement and the Transaction against other obligations between the parties, whether arising under any other agreement, applicable law or otherwise.

(f)    Notwithstanding anything to the contrary herein, Dealer may, by prior notice to Issuer, satisfy its obligation to deliver any Shares or other securities on any date due (an “Original Delivery Date”) by making separate deliveries of Shares or such securities, as the case may be, at more than one time on or prior to such Original Delivery Date, so long as the aggregate number of Shares and other securities so delivered on or prior to such Original Delivery Date is equal to the number required to be delivered on such Original Delivery Date.

(g)    It shall constitute an Additional Termination Event with respect to which the Transaction is the sole Affected Transaction and Issuer is the sole Affected Party and Dealer shall be the party entitled to designate an Early Termination Date pursuant to Section 6(b) of the Agreement if, at any time on or prior to the Valuation Date, the price per Share on the Exchange, as determined by the Calculation Agent, is at or below the Threshold Price (as specified in Schedule I).

Share Cap.

Notwithstanding any other provision of this Confirmation or the Agreement to the contrary, in no event shall (i) Issuer be required to deliver to Dealer in the aggregate a number of Shares that exceeds the Issuer Share Cap as of the date of delivery (as specified in Schedule I) or (ii) Dealer be required to deliver to Issuer in the aggregate a number of Shares that exceeds the Dealer Share Cap as of the date of delivery (as specified in Schedule I).

Transfer and Assignment.

Page 19

Dealer may transfer or assign its rights and obligations hereunder and under the Agreement, in whole or in part, to any of its Affiliates of equivalent credit quality (or whose obligations are guaranteed by an entity of equivalent credit quality) without the consent of Issuer.

Governing Law; Jurisdiction; Waiver.

THIS CONFIRMATION AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS CONFIRMATION SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. THE PARTIES HERETO IRREVOCABLY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND THE UNITED STATES COURT FOR THE SOUTHERN DISTRICT OF NEW YORK IN CONNECTION WITH ALL MATTERS RELATING HERETO AND WAIVE ANY OBJECTION TO THE LAYING OF VENUE IN, AND ANY CLAIM OF INCONVENIENT FORUM WITH RESPECT TO, THESE COURTS.

EACH PARTY HEREBY IRREVOCABLY WAIVES (ON ITS OWN BEHALF AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ON BEHALF OF ITS STOCKHOLDERS) ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THE TRANSACTION OR THE ACTIONS OF ISSUER OR ITS AFFILIATES IN THE NEGOTIATION, PERFORMANCE OR ENFORCEMENT HEREOF.

Remainder of Page Intentionally Blank

Page 20

_________________________________________________________________________________

Please confirm that the foregoing correctly sets forth the terms of our agreement by executing this Confirmation and returning it to us byfacsimile to the number provided on the attached facsimile cover page.

Confirmed as of the date first written above:

LENNOX INTERNATIONAL, INC.	MORGAN STANLEY & CO. LLC
By: ___/s/ Rick Pelini____________________    Name: Rick Pelini    Title: Vice President, Treasurer	By: _/s/ Scott McDavid__________________    Name: Scott McDavid    Title: Managing Director

ANNEX A

BUYER SETTLEMENT PROVISIONS

1.    The following Buyer Settlement Provisions shall apply to the extent indicated under the Confirmation:

Settlement Currency: USD

Settlement Method Election: Applicable; provided that (i) Section 7.1 of the Equity Definitions is hereby amended by deleting the word “Physical” in the sixth line thereof and replacing it with the words “Net Share” and (ii) the Electing Party may make a settlement method election only if the Electing Party represents and warrants to Seller in writing on the date it notifies Seller of its election that, as of such date, the Electing Party is not aware of any material non-public information concerning Buyer or the Shares and is electing the settlement method in good faith and not as part of a plan or scheme to evade compliance with the federal securities laws.

Electing Party: Buyer

Settlement Method

Election Date: The earlier of (i) the Scheduled Valuation Date and (ii) the second Scheduled Trading Day immediately following the Valuation Date (if different than the Scheduled Valuation Date, in which case the election under Section 7.1 of the Equity Definitions shall be made no later than 10 minutes prior to the open of trading on the Exchange on such second Scheduled Trading Day), as the case may be.

Default Settlement Method: Cash Settlement

Forward Cash Settlement

Amount: The Settlement Amount multiplied by the Settlement Price.

Settlement Price: The arithmetic mean of the 10b-18 VWAP for the Observation Dates in the Settlement Valuation Period, subject to a Market Disruption Event as specified in the Confirmation (with references under “Market Disruption Event” in the Confirmation to the “Calculation Period” or “Forward Price” being deemed to refer, for this purpose, to the “Settlement Valuation Period” or the “Settlement Price”, respectively).

Settlement Valuation Period: A number of Observation Dates selected by the Seller in its commercially reasonable discretion, beginning on the Observation Date immediately following the Settlement Method Election Date.

Cash Settlement: If Cash Settlement is applicable, then Buyer shall pay to Seller the absolute value of the Forward Cash Settlement Amount on the Cash Settlement Payment Date.

Cash Settlement

Payment Date: The date one Settlement Cycle following the last day of the Settlement Valuation Period.

Net Share Settlement

Procedures: If Net Share Settlement is applicable, Net Share Settlement shall be made in accordance with paragraphs 2 through 7 below.

2.    Net Share Settlement shall be made by delivery on the Cash Settlement Payment Date of a number of Shares satisfying the conditions set forth in paragraph 3 below (the “Registered Settlement Shares”), or a number of Shares not satisfying such conditions (the “Unregistered Settlement Shares”), in either case with a value equal to the absolute value of the Forward Cash Settlement Amount, with such Shares’ value based on the value thereof to Seller (which value shall, in the case of Unregistered Settlement Shares, take into account a commercially reasonable illiquidity discount not to exceed 1%), in each case as determined by the Seller in its commercially reasonable judgment acting in good faith.

3.    Buyer may only deliver Registered Settlement Shares pursuant to paragraph 2 above if:

(a)    a registration statement covering public resale of the Registered Settlement Shares by Seller (the “Registration Statement”) shall have been filed with the Securities and Exchange Commission under the Securities Act and been declared or otherwise become effective on or prior to the date of delivery, and no stop order shall be in effect with respect to the Registration Statement; a printed prospectus relating to the Registered Settlement Shares (including any prospectus supplement thereto, the “Prospectus”) shall have been delivered to Seller, in such quantities as Seller shall reasonably have requested, on or prior to the date of delivery;

(b)    the form and content of the Registration Statement and the Prospectus (including, without limitation, any sections describing the plan of distribution) shall be satisfactory to Seller;

(c)    as of or prior to the date of delivery, Seller and its Sellers shall have been afforded a reasonable opportunity to conduct a due diligence investigation with respect to Buyer customary in scope for underwritten offerings of equity securities and the results of such investigation are satisfactory to Seller, in its discretion; and

(d)    as of the date of delivery, an agreement (the “Underwriting Agreement”) shall have been entered into with Seller in connection with the public resale of the Registered Settlement Shares by Seller substantially similar to underwriting agreements customary for underwritten offerings of equity securities, in form and substance commercially reasonably satisfactory to Seller and Buyer, which Underwriting Agreement shall include, without limitation, provisions substantially similar to those contained in such underwriting agreements of a publicly traded company relating, without limitation, to the customary indemnification of, and contribution in connection with the liability of, Seller and its Affiliates and the provision of customary opinions, accountants’ comfort letters and lawyers’ negative assurance letters.

4.    If Buyer delivers Unregistered Settlement Shares pursuant to paragraph 2 above:

(a)    all Unregistered Settlement Shares shall be delivered to Seller (or any Affiliate of Seller designated by Seller) pursuant to the exemption from the registration requirements of the Securities Act provided by Section 4(a)(2) thereof;

(b)    as of or prior to the date of delivery, Seller and any potential purchaser of any such Shares from Seller (or any Affiliate of Seller designated by Seller) identified by Seller shall be afforded a commercially reasonable opportunity to conduct a due diligence investigation with respect to Buyer customary in scope for private placements of equity securities (including, without limitation, the right to have made available to them for inspection all financial and other records, pertinent corporate documents and other information reasonably requested by them);

(c)    as of the date of delivery, Buyer shall enter into an agreement (a “Private Placement Agreement”) with Seller (or any Affiliate of Seller designated by Seller) in connection with the private placement of such shares by Buyer to Seller (or any such Affiliate) and the private resale of such shares by Seller (or any such Affiliate), substantially similar to private placement purchase agreements customary for private placements of equity securities, in form and substance commercially reasonably satisfactory to Seller and Buyer, which Private Placement Agreement shall (i) include, without limitation, provisions substantially similar to those contained in such private placement purchase agreements relating to the customary indemnification of, and contribution in connection with the liability of, Seller and its Affiliates, (ii) provide for Buyer using best efforts to deliver documentation appropriate for a private placement of similar size, and the payment by Buyer of all fees and expenses in connection with such resale, including all fees and expenses of counsel for Seller, and (iii) contain representations, warranties, covenants and agreements of Buyer reasonably necessary or advisable to establish and maintain the availability of an exemption from the registration requirements of the Securities Act for such resales; and

(d)    in connection with the private placement of such shares by Buyer to Seller (or any such Affiliate) and the private resale of such shares by Seller (or any such Affiliate), Buyer shall, if so requested by Seller, prepare, in cooperation with Seller, a private placement memorandum in form and substance reasonably satisfactory to Seller and Buyer.

5.    Seller, itself or through an Affiliate (the “Selling Seller”) or any underwriter(s), will sell all, or such lesser portion as may be required hereunder, of the Registered Settlement Shares or Unregistered Settlement Shares and any Make-whole Shares (as defined below) (together, the “Settlement Shares”) delivered by Buyer to Seller pursuant to paragraph 6 below commencing on the Cash Settlement Payment Date and continuing until the date on which the aggregate Net Proceeds (as such term is defined below) of such sales, as determined by Seller, is equal to the absolute value of the Forward Cash Settlement Amount (such date, the “Final Resale Date”). If the proceeds of any sale(s) made by Seller, the Selling Seller or any underwriter(s), net of any fees and commissions (including, without limitation, underwriting or placement fees) customary for similar transactions under the circumstances at the time of the offering, together with carrying charges and expenses incurred in connection with the offer and sale of the Shares (including, but without limitation to, the covering of any over-allotment or short position (syndicate or otherwise)) (the “Net Proceeds”) exceed the absolute value of the Forward Cash Settlement Amount, Seller will refund, in USD or Shares at Buyer’s election, such excess to Buyer on the date that is three (3) Currency Business Days following the Final Resale Date, and, if any portion of the Settlement Shares remains unsold, Seller shall return to Buyer on that date such unsold Shares.

6.    If the Seller determines that the Net Proceeds received from the sale of the Registered Settlement Shares or Unregistered Settlement Shares or any Make-whole Shares, if any, pursuant to this paragraph 6 are less than the absolute value of the Forward Cash Settlement Amount (the amount in USD by which the Net Proceeds are less than the absolute value of the Forward Cash Settlement Amount being the “Shortfall”), Buyer shall, on the Exchange Business Day next succeeding the day on which such Shortfall is established (the “Make-whole Notice Date”), deliver to Seller a notice of Buyer’s election that Buyer shall either (i) pay an amount in cash equal to the Shortfall on the day that is one (1) Currency Business Day after the Make-whole Notice Date, or (ii) deliver additional Shares. If Buyer elects to deliver to Seller additional Shares, then Buyer shall deliver additional Shares in compliance with the terms and conditions of paragraph 3 or paragraph 4 above, as the case may be (the “Make-whole Shares”), on the first Clearance System Business Day which is also an Exchange Business Day following the Make-whole Notice Date in such number as the Seller reasonably believes would have a market value on that Exchange Business Day equal to the Shortfall. Such Make-whole Shares shall be sold by Seller in accordance with the provisions above; provided that if the sum of the Net Proceeds from the sale of the originally delivered Shares and the Net Proceeds from the sale of any Make-whole Shares is less than the absolute value of the Forward Cash Settlement Amount then Buyer shall, at its election, either make such cash payment or deliver to Seller further Make-whole Shares until such Shortfall has been reduced to zero.

7.    Notwithstanding the foregoing, in no event shall the aggregate number of Settlement Shares and Make-whole Shares be greater than the Reserved Shares minus the amount of any Shares actually delivered by Buyer under any other Transaction(s) under this Confirmation (the result of such calculation, the “Capped Number”). Buyer represents and warrants (which shall be deemed to be repeated on each day that a Transaction is outstanding) that the Capped Number is equal to or less than the number of Shares determined according to the following formula:

A – B

Where A = the number of authorized but unissued shares of the Buyer that are not reserved for future issuance on the date of the determination of the Capped Number; and

B = the maximum number of Shares required to be delivered to third parties if Buyer elected Net Share Settlement of all transactions in the Shares (other than Transactions in the Shares under this Confirmation) with all third parties that are then currently outstanding and unexercised.

“Reserved Shares” means 56,000,000Shares.

EX-10.13

Exhibit 10.13

LENNOX INTERNATIONAL INC.

Long-Term Incentive Award Agreement

U.S. Employees - Vice President and Above

THIS AGREEMENT (“Agreement”) is made as of December 12, 2014 (the “Award Date”), by and between Lennox International Inc., a Delaware corporation (the “Company”), and __________ (“Participant”).

The Company has adopted the Lennox International Inc. 2010 Incentive Plan, as amended and restated (the “Plan”), the terms of which are incorporated by reference and made a part of this Agreement, for the benefit of eligible employees, directors, consultants or advisors of the Company and its Subsidiaries (together, “LII”). Capitalized terms used and not otherwise defined in this Agreement have the meanings set forth in the Plan.

Pursuant to the Plan, the Committee, which has responsibility for administering the Plan, has determined that it is in the interest of the Company and its stockholders to make the awards provided in this Agreement in order to increase Participant's personal interest in the continued success and progress of the Company, to foster and enhance the long-term profitability of the Company for the benefit of its shareholders by offering the incentive of long-term rewards, and to encourage Participant to remain in the employ of LII.

The Company and Participant therefore agree as follows:

1.Grant of Awards. Subject to the terms and conditions in this Agreement, the Company grants to Participant on the Award Date:

(a)PSU Award - for the period beginning on January 1, 2015 and ending on December 31, 2017 (the “Performance Period”), an award of __________ performance share units (“PSUs” and such award, the “PSU Award”);

(b)RSU Award - for the period beginning on December 12, 2014 and ending on December 12, 2017 (except as provided below, the “Retention Period”), an award of __________ Restricted Stock Units (“RSUs” and such award, the “RSU Award”); and

(c)SAR Award - for the period beginning on December 12, 2014 and ending on December 12, 2021 (the “SAR Period”), __________ Stock Appreciation Rights (“SARs” and such award, the “SAR Award”) at a grant price of $__________ per share of Common Stock (the Fair Market Value of a share of Common Stock on the date of grant).

1. Conditions for Vesting.

(a)PSU Award - Fifty percent (50%) of the PSU Award is based upon achievement of core net income growth rate performance goals (“Net Income”) for the Performance Period, and fifty percent (50%) of the PSU Award is based upon achievement of return on invested capital performance goals (“ROIC”) for the Performance Period. Subject to Section 5 of this Agreement, at the end of the Performance Period, the Committee will evaluate the Company’s attained levels of performance with respect to Core Net Income and ROIC to determine the number of whole PSUs earned, if any, by Participant (the “Earned PSUs”). The Committee will determine Participant's total Earned PSUs for such period by reference to the following performance matrix:

PSU Award - Performance Goals
	Threshold	Target	Maximum
Earned PSUs Payout Levels	50%	100%	200%
Core Net Income: 3-year compound annual growth rate	6%	12%	22%
ROIC: 3-year weighted average*	14%	20%	26%

*lowest-year ROIC weighted 20%, remaining years weighted 40% each

If, at the end of the Performance Period, the threshold, target or maximum performance goal has been attained for either or both Core Net Income or ROIC, Participant will vest in Earned PSUs as provided in the matrix. If the attained level of performance for either goal is between the threshold and target, or between target and maximum, Earned PSUs will be determined by linear interpolation.

(b)RSU Award - Subject to Section 5 of this Agreement, at the end of the Retention Period, the RSU Award will vest (the “Earned RSUs”). If the last day of the Retention Period is not a day on which shares of Common Stock are traded on a U.S. national securities exchange or quoted in an inter-dealer quotation system, then the Retention Period will end on the last preceding day on which sales of shares of Common Stock were reported.

(c)SAR Award - Subject to Section 5 of this Agreement, the SAR Award may be exercised only to the extent the SAR Award has become vested (the “Earned SARs”) according to the following schedule:

DateSARs Vested

December 12, 201533 1/3%

December 12, 201666 2/3%

December 12, 2017100%

Earned SARs may be exercised in whole or in part at any time until expiration of the SAR Period, subject to Section 5 of this Agreement.

3.Method and Time of Payment.

(a)PSU Award - Except as otherwise provided in Section 5, Earned PSUs will be paid within 2.5 months following the end of the Performance Period, minus any shares of Common Stock withheld for taxes pursuant to Section 4 below. Earned PSUs will be paid in the form of the nearest number of whole shares of Common Stock which is equal to or less than the Earned PSUs determined by the reference to the performance matrix specified in Section 2(a) above.

(b)RSU Awards - Except as otherwise provided in Section 5, Earned RSUs will be paid within 30 days following the end of the Retention Period. Earned RSUs will be paid in whole shares of Common Stock equal to the number of Earned RSUs, minus any shares of Common Stock withheld for taxes pursuant to Section 4 below.

(c)SAR Award - Subject to withholding for taxes pursuant to Section 4 below, within 30 days of the date of exercise, the Company will deliver to Participant for each Earned SAR that is being exercised (“Exercised SAR”) a number of shares of Common Stock, in the form of the nearest number of whole shares of Common Stock, equal to the excess (if any) of the most recent publicly quoted sale price of a share of Common Stock at the time of exercise over the grant price of the SAR on the Award Date. If on the last day of the SAR Period (i) the Fair Market Value of a share of Common Stock exceeds the grant price of the SAR on the Award Date, (ii) Participant has not exercised the Earned SARs and (iii) the SAR Award has not otherwise been cancelled, then the Earned SARs will be deemed to have been exercised by Participant as of such day, and the Company will settle the Exercised SARs in accordance with this Section 3(c).

4.Withholding for Taxes. Participant acknowledges and agrees that the Company may deduct from the shares of Common Stock otherwise deliverable in connection with Earned PSUs, Earned RSUs and Exercised SARs a number of whole shares of Common Stock (in the case of Earned PSUs and Earned RSUs, valued at the Fair Market Value of Common Stock on the date of distribution of the Earned PSUs and Earned RSUs; in the case of Earned SARs, valued at the most recent publicly quoted sale price of Common Stock at the time of exercise of the Earned SARs) that is equal to no more than the minimum statutory amount of all Federal, state and local taxes required to be withheld by the Company in connection with such delivery,as determined by the Company.

5.Termination of Employment. Unless otherwise determined by the Committee in its sole discretion, the PSU Award, the RSU Award and the SAR Award will terminate at the times specified below:

(a)If, prior to the end of the Performance Period, Retention Period or SAR Period, Participant is terminated by LII for Cause (as defined in any applicable employment agreement between LII and Participant or as determined by the Committee in its sole discretion in the absence of any such employment agreement), then, immediately after Participant’s termination, the PSU Award, RSU Award or SAR Award will be cancelled.

(b)If, prior to the end of the Performance Period, Retention Period or SAR Period, Participant terminates employment with LII voluntarily or Participant’s employment with LII is terminated by LII not for Cause, then, (i) immediately after Participant’s termination, the PSU Award or RSU Award will be cancelled, and (ii) immediately after Participant’s termination, the Earned SARs will continue to be exercisable subject to the SAR Period for 90 days following Participant’s termination, and the remainder of the SAR Award will be cancelled.

(c)If, prior to the end of the SAR Period, Participant’s employment with LII is terminated by LII for any reason within one year following a Change in Control, then the Earned SARs will continue to be exercisable subject to the SAR Period for 90 days following Participant’s termination, and the remainder of the SAR Award will be cancelled.

(d)If, prior to the end of the Performance Period, Retention Period or SAR Period, Participant’s employment with LII terminates by reason of Participant’s retirement, and in connection with such termination of employment (i) Participant is at least 65 years of age, (ii) Participant is at least 62 years of age and has achieved at least 10 years of service with LII or (iii) the number of years of service Participant has achieved with LII plus Participant’s age equals at least 80, then (x) Participant will earn a pro rata amount of the PSU Award based upon the Company’s attainment of its performance goals in accordance with the performance matrix described in Section 2(a) above, determined at the end of the Performance Period, and

the remainder of the PSU Award will be cancelled, (y) Participant will earn a pro rata amount of the RSU Award based upon the portion of the Retention Period during which Participant served as an employee of LII, determined as of the date of such retirement, and the remainder of the RSU Award will be cancelled, and (z) the Earned SARs will continue to be exercisable for the remainder of the SAR Period, and the remainder of the SAR Award will be cancelled. In the case of the PSU Award, any pro rata amount earned will be payable within 2.5 months after the end of the Performance Period, and in the case of the RSU Award, any pro rata amount earned will be payable within 30 days after the end of the Retention Period.

(e)If, prior to the end of the Performance Period, Retention Period or SAR Period, Participant dies or incurs a Disability, then (i) Participant, or in the event of Participant’s death, Participant’s beneficiary, will earn a pro rata amount of the PSU Award based upon the Company’s attainment of its performance goals in accordance with the performance matrix described in Section 2(a) above (as determined in the sole discretion of the Committee), determined as of the date of death or Disability, and the remainder of the PSU Award will be cancelled, (ii) Participant, or in the event of Participant’s death, Participant’s beneficiary, will earn a pro rata amount of the RSU Award based upon the portion of the Retention Period during which Participant served as an employee of LII, determined as of the date of death or Disability, and the remainder of the RSU Award will be cancelled, and (iii) the SAR Award will become fully vested and exercisable and will continue to be exercisable for the remainder of the SAR Period. Any pro rata amounts earned will be payable within 2.5 months after the date of death or Disability.

6.No Stockholder Rights. Participant will not be deemed for any purpose, including voting rights and dividends or dividend equivalents, to be, or to have any of the rights of, a stockholder of the Company with respect to any shares of Common Stock as to which the PSU Award, the RSU Award or the SAR Award relate until such shares are issued to Participant by the Company. The existence of this Agreement will not affect the right or power of the Company or its stockholders to accomplish any corporate act.

7.Restrictions Imposed by Law. Participant agrees that the Company will not be obligated to deliver any shares of Common Stock if counsel to the Company determines that such delivery would violate any applicable law or any rule or regulation of any governmental authority or any rule or regulation of, or agreement of the Company with, any securities exchange or association upon which the Common Stock may be listed or quoted. The Company will not be obligated to take any affirmative action to cause the delivery of shares of Common Stock to comply with any such law, rule, regulation or agreement.

8.Notice. Unless the Company notifies Participant in writing of a different procedure, any notice or other communication to the Company with respect to this Agreement must be in writing and delivered personally or by first class mail, postage prepaid, to the following address:

Lennox International Inc.

c/o Corporate Secretary

2140 Lake Park Boulevard

Richardson, Texas 75080

Any notice or other communication to Participant with respect to this Agreement must be in writing and delivered personally, or sent electronically to Participant or by first class mail, postage prepaid, to Participant's address as listed in the records of the Company on the Award Date, unless the Company has received written notification from Participant of a change of address.

9.Amendment. This Agreement may be supplemented or amended from time to time as approved by the Committee as contemplated by Section 4.2 of the Plan.

10.Participant Employment. Nothing contained in this Agreement, and no action of the Company or the Committee, will confer or be construed to confer on Participant any right to continue in the employ of LII or interfere in any way with the right of LII to terminate Participant's employment at any time, with or without cause, subject, however, to the provisions of any employment agreement between Participant and LII.

11.Governing Law. This Agreement is governed by Delaware law.

12.Construction. This Agreement is entered into, and the PSU Award, RSU Award and SAR Award are granted, pursuant to the Plan and are governed by and construed in accordance with the Plan and the administrative interpretations adopted under the Plan. In the event of any inconsistency between the terms of the Plan and this Agreement, the terms of the Plan will control.

13.Entire Agreement. Subject to the provisions of any applicable written employment agreement or change in control agreement between Participant and LII, this Agreement contains the entire agreement between the parties to this Agreement with respect to the PSU Award, the RSU Award and the SAR Award and replaces and makes null and void any prior agreements, oral or written, between Participant and the Company regarding the PSU Award, the RSU Award and the SAR Award.

14.Participant Acceptance. Participant must accept the terms and conditions of this Agreement by electronic signature or by signing in the space below and returning a signed copy to the Company.

ACCEPTED:

Signed: _________________________________________

«First» «Last»

Date: _________________________________________

EX-21.1

EXHIBIT 21.1

Lennox International Inc. Subsidiaries

The following are the subsidiaries of Lennox International Inc. and the states or jurisdictions in which they are organized. Subsidiaries are indented below their immediate parent entity. The names of certain subsidiaries have been omitted because, considered in the aggregate as a single subsidiary, they would not constitute, as of the end of the year covered by this report, a “significant subsidiary” as that term is defined in Rule 1-02(w) of Regulation S-X under the Securities Exchange Act of 1934.

Name	Ownership	Jurisdiction
Lennox Industries Inc.	100%	Delaware
SEE ANNEX A
Heatcraft Inc.	100%	Delaware
Bohn de Mexico S.A. de C.V.	50%	Mexico
Frigus-Bohn S.A. de C.V.	50%	Mexico
Kysor/Warren de Mexico, S. de R.L. de C.V.	0.00005%	Mexico
Kysor/Warren Services, S. de R.L. de C.V.	1%	Mexico
Kysor-Warren Instalaciones, S. de R.L. de C.V.	1%	Mexico
Lennox Participações Ltda.	0.66%	Brazil
Heatcraft do Brasil Ltda.	56.2%	Brazil
Advanced Distributor Products LLC	100%	Delaware
Heatcraft Refrigeration Products LLC	100%	Delaware
Kysor/Warren de Mexico, S. de R.L. de C.V.	99.99995%	Mexico
Kysor/Warren Services, S. de R.L. de C.V.	99%	Mexico
Kysor-Warren Instalaciones, S. de R.L. de C.V.	99%	Mexico
Heatcraft Technologies Inc.	100%	Delaware
Alliance Compressor LLC	24.5%	Delaware
Lennox Industries	0.045%	United Kingdom
LGL France S.A.S.	0.00013%	France
Lennox Global Ltd.	100%	Delaware
SEE ANNEX B
Lennox Procurement Company Inc.	100%	Delaware

ANNEX A

TO

EXHIBIT 21.1

Lennox Industries Inc. Subsidiaries

Name	Ownership	Jurisdiction
Allied Air Enterprises LLC	100%	Delaware
Lennox Industries (Canada) Ltd.	100%	Canada
LII United Products, S. de R.L. de C.V.	99.97%	Mexico
LII United Comfort Systems, S. de R.L. de C.V.	99%	Mexico
1372247 Ontario Inc.	100%	Canada
LPAC Corp.	100%	Delaware
LII United Products, S. de R.L. de C.V.	0.03%	Mexico
LII Comercial de Mexico,S. de R.L. de C.V.	0.03%	Mexico
LII United Comfort Systems, S. de R.L. de C.V.	1%	Mexico
Lennox National Account Services Inc.	100%	California
Lennox National Account Services LLC	100%	Florida

ANNEX B

TO

EXHIBIT 21.1

Lennox Global Ltd. Subsidiaries

Name	Ownership	Jurisdiction
Heatcraft Refrigeration Asia Pte Ltd.	100%	Rep. of Singapore
Lennox (Shanghai) Refrigeration Technology Consulting Co Ltd.	100%	China
LGL Europe Holding Co.	100%	Delaware
SEE ANNEX C
Lennox Participações Ltda.	99.34%	Brazil
LGL Australia (US) Inc.	100%	Delaware
SEE ANNEX D
LII Comercial de Mexico, S. de R.L. de C.V.	99.97%	Mexico
Lennox India Technology Centre Private Ltd.	0.0005%	India
Heatcraft do Brasil Ltda.	43.8%	Brazil

ANNEX C

TO

EXHIBIT 21.1

LGL Europe Holding Co. Subsidiaries

Name	Ownership	Jurisdiction
LGL Holland B.V.	100%	Netherlands
Lennox Benelux N.V./S.A.	0.024%	Belgium
Lennox Ukraine LLC	99%	Ukraine
Lennox India Technology Centre Private Ltd.	99.9995%	India
Etablissements Brancher S.A.S.	100%	France
LGL France S.A.S.	99.99964%	France
Hyfra Ind. GmbH	0.1%	Germany
Lennox France S.A.S.	100%	France
Lennox Refac, S.A.	0.02%	Spain
LGL Germany GmbH	100%	Germany
Hyfra Ind. GmbH	99.9%	Germany
Lennox Deutschland GmbH	100%	Germany
LGL Deutschland GmbH	100%	Germany
Lennox Global Spain S.L.	100%	Spain
LGL Refrigeration Spain S.A.	100%	Spain
Lennox Refac, S.A.	99.98%	Spain
Lennox Portugal Lda	100%	Portugal
Lennox Polska sp. z.o.o.	99.5%	Poland
Lennox Benelux B.V.	100%	Netherlands
Lennox Benelux N.V./S.A.	99.976%	Belgium
Lennox Polska sp. z.o.o.	0.5%	Poland
Lennox Zao	0.5%	Russia
Lennox Ukraine LLC	1%	Ukraine
HCF-Lennox Limited	100%	United Kingdom
Lennox Industries	99.955%	United Kingdom
Lennox Zao	99.5%	Russia

ANNEX D

TO

EXHIBIT 21.1

LGL Australia (US) Inc. Subsidiaries

Name	Ownership	Jurisdiction
LGL Co Pty Ltd	100%	Australia
IGLL Pty Ltd	100%	Australia
LGL Australia Finance Pty Ltd	10%	Australia
LGL Australia Finance Pty Ltd	90%	Australia
LGL Australia Holdings Pty Ltd	100%	Australia
Heatcraft Australia Pty Ltd	100%	Australia
Heatcraft Albury Pty Ltd	100%	Australia
Heatcraft Geelong Pty Ltd	100%	Australia
Heatcraft Tasmania Pty Ltd	75%	Australia
Kulthorn Kirby Public Company Limited	6.5%	Thailand
Heatcraft New Zealand Limited	100%	New Zealand
Heatcraft Refrigeration (Wuxi) Co. Ltd.	100%	China

EX-23.1

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

The Board of Directors

Lennox International Inc.:

We consent to the incorporation by reference in the Registration Statement Nos. 333-181369, 333-127540, 333-91130, 333-91128, 333-71416, 333-60122, 333-52046, 333-86989, 333-83961 and 333-83959 on Form S-8 of Lennox International Inc. and subsidiaries of our report dated February 17, 2015, with respect to the consolidated balance sheets of Lennox International Inc. and subsidiaries as of December 31, 2014 and 2013, and the related consolidated statements of operations, comprehensive income, stockholders' equity and cash flows for each of the years in the three-year period ended December 31, 2014, and Schedule II - Valuation and Qualifying Accounts and Reserves, and the effectiveness of internal control over financial reporting as of December 31, 2014, which report appears in the December 31, 2014 annual report on Form 10-K of Lennox International Inc.

/s/ KPMG LLP

Dallas, Texas

February 17, 2015

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Todd M. Bluedorn, certify that:

1. I have reviewed this annual report on Form 10-K 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.

Date: February 17, 2015

/s/ Todd M. Bluedorn

Todd M. Bluedorn

Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Joseph W. Reitmeier, certify that:

1. I have reviewed this annual report on Form 10-K 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.

Date: February 17, 2015

/s/ Joseph W. Reitmeier

Joseph W. Reitmeier

Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Lennox International Inc. (the “Company”) on Form 10-K for the fiscal year ended December 31, 2014 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned, Todd M. Bluedorn, Chief Executive Officer of the Company, and Joseph W. Reitmeier, Chief Financial Officer of the Company, certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that to his or her knowledge:

(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

February 17, 2015

/s/ Joseph W. Reitmeier

Joseph W. Reitmeier

Chief Financial Officer

February 17, 2015

A signed original of this written statement has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request. The foregoing certification is being furnished to the Securities and Exchange Commission as an exhibit to the report.

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Joint Ventures and Other Equity Investments (Tables)

12 Months Ended

Dec. 31, 2014

Equity Method Investments and Joint Ventures [Abstract]

Summary of combined balance of equity method investments included in other assets, net

The combined balance of equity method investments included in Other assets, net totaled (in millions):

	As of December 31,
	2014		2013
Equity method investments	$	30.9	$	28.0

Summary of cost of goods sold in the consolidated statements of operations

The amounts of purchases included in Cost of goods sold in the Consolidated Statements of Operations were as follows (in millions):

	For the Years Ended December 31,
	2014		2013		2012
Purchases of compressors from joint venture	$	114.7	$	96.7	$	90.4

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Reportable Business Segments (Details 4) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Summary of depreciation and amortization expense by business segment
Total depreciation and amortization	$ 60.8	$ 58.9	$ 55.4
Residential Heating and Cooling [Member]
Summary of depreciation and amortization expense by business segment
Total depreciation and amortization	20.7	20.5	19.9
Commercial Heating and Cooling [Member]
Summary of depreciation and amortization expense by business segment
Total depreciation and amortization	9.3	9.0	8.5
Refrigeration [Member]
Summary of depreciation and amortization expense by business segment
Total depreciation and amortization	16.3	15.3	13.0
Corporate and Other [Member]
Summary of depreciation and amortization expense by business segment
Total depreciation and amortization	$ 14.5	$ 14.1	$ 14.0

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Employee Benefit Plans (Details 11)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Equity Securities [Member]
Summary of target allocation percentage of assets
Target	42.00%	60.00%
U.S. equity [Member]
Summary of target allocation percentage of assets
Target	25.00%	36.00%
International equity [Member]
Summary of target allocation percentage of assets
Target	17.00%	24.00%
Fixed Income, Money Market, Cash and Guaranteed Investment Contracts [Member]
Summary of target allocation percentage of assets
Target	58.00%	40.00%
Fixed income [Member]
Summary of target allocation percentage of assets
Target	56.00%
Money market/cash/guaranteed investments contract [Member]
Summary of target allocation percentage of assets
Target	2.00%

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Losses and Other Expenses, net (Tables)

12 Months Ended

Dec. 31, 2014

Losses (Gains) and Other Expenses, net [Abstract]

Summary of Losses (Gains) and Other Expenses, net

Losses and other expenses, net in our Consolidated Statements of Operations were as follows (in millions):

	For the Years Ended December 31,
	2014			2013			2012
Realized losses on settled futures contracts	$	0.8		$	1.0		$	1.5
Foreign currency exchange losses	1.6			0.5			0.8
Losses (gains) on disposal of fixed assets	(0.3		)	(1.0		)	0.4
Net change in unrealized losses (gains) on unsettled futures contracts	0.6			0.4			(2.2		)
Asbestos-related litigation	0.9			6.3			—
Acquisition expenses	—			0.2			0.1
Special legal contingency charges	0.9			1.2			1.2
Environmental liabilities	2.0			—			—
Other items, net	0.3			0.7			0.7
Losses and other expenses, net	$	6.8		$	9.3		$	2.5

Below is information about expenses included in our Consolidated Statements of Operations (in millions):

	For the Years Ended December 31,
	2014		2013		2012
Research and development (1)	$	60.7	$	53.7	$	50.7
Advertising, promotions and marketing (2)	41.9		45.2		59.4
Cooperative advertising expenditures (3)	13.1		10.9		9.5
Rent expense (4)	50.5		53.5		67.8

⁽¹⁾ Includes research and development costs related to discontinued operations of $1.2 million for the year ended December 31, 2012. No research and development costs related to discontinued operations were recorded for the years ended December 31, 2014 and 2013 .

⁽²⁾ Includes advertising, promotions and marketing costs related to discontinued operations of $4.1 million and $20.1 million for the years ended December 31, 2013 and 2012, respectively. No advertising costs related to discontinued operations were recorded for the year ended December 31, 2014. Cooperative advertising expenditures were not included in these amounts.

⁽³⁾ Cooperative advertising expenditures were included in Selling, general and administrative expenses in the Consolidated Statements of Operations.

⁽⁴⁾ Includes rent expense related to discontinued operations of $4.5 million and $20.1 million for the years ended December 31, 2013 and 2012, respectively. No rent costs related to discontinued operations were recorded for the year ended December 31, 2014.

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Supplemental Information (Details 1) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Summary of Components of Interest Expense
Interest expense, net of capitalized interest	$ 18.9	$ 16.5	$ 18.9
Interest income	1.7	2.0	1.8
Interest expense, net	$ 17.2	$ 14.5	$ 17.1

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Restructuring Charges (Tables)

12 Months Ended

Dec. 31, 2014

Restructuring Charges [Abstract]

Information regarding restructuring charges

Information regarding the restructuring charges for all ongoing activities are presented in the table below (in millions):

	Incurred in 2014		Incurred to Date		Total Expected to be Incurred
Severance and related expense	$	1.4	$	6.9	$	7.2
Asset write-offs and accelerated depreciation	0.3		1.8		1.8
Equipment moves	—		—		—
Lease termination	—		—		0.1
Other	0.2		1.9		2.3
Total	$	1.9	$	10.6	$	11.4

Information regarding restructuring charges by segment

While restructuring charges are excluded from our calculation of segment profit (loss), the table below presents the restructuring charges associated with each segment (in millions):

	Incurred in 2014			Incurred to Date		Total Expected to be Incurred
Residential Heating & Cooling	$	0.4		$	1.5	$	1.5
Commercial Heating & Cooling	—			0.9		0.9
Refrigeration	1.6			8.2		9.0
Corporate & Other	(0.1		)	—		—
Total	$	1.9		$	10.6	$	11.4

We operate in three reportable business segments of the heating, ventilation, air conditioning and refrigeration (“HVACR”) industry. Our segments are organized primarily by the nature of the products and services we provide. The following table describes each segment:

Segment	Products or Services	Markets Served	Geographic Areas
Residential Heating & Cooling	Furnaces, air conditioners, heat pumps, packaged heating and cooling systems, indoor air quality equipment, comfort control products, replacement parts	Residential Replacement; Residential New Construction	United States Canada
Commercial Heating & Cooling	Unitary heating and air conditioning equipment, applied systems, controls, installation and service of commercial heating and cooling equipment	Light Commercial	United States Canada Europe
Refrigeration	Condensing units, unit coolers, fluid coolers, air cooled condensers, air handlers, process chillers, controls, compressorized racks, supermarket display cases and systems	Light Commercial; Food Preservation; Non-Food/Industrial	United States Canada Europe Asia Pacific South America

Details activity within the restructuring reserves

The activity within the restructuring accruals is summarized in the tables below (in millions):

Description of Reserves:	Balance as of December 31, 2013		Charged to Earnings		Cash Utilization			Non-Cash Utilization and Other			Balance as of December 31, 2014
Severance and related expense	$	1.6	$	1.4	$	(1.5	)	$	—		$	1.5
Asset write-offs and accelerated depreciation	—		0.3		—			(0.2		)	0.1
Equipment moves	—		—		—			—			—
Lease termination	—		—		—			—			—
Other	—		0.2		(0.2		)	—			—
Total restructuring reserves	$	1.6	$	1.9	$	(1.7	)	$	(0.2	)	$	1.6

Description of Reserves:	Balance as of December 31, 2012		Charged to Earnings		Cash Utilization			Non-Cash Utilization and Other			Balance as of December 31, 2013
Severance and related expense	$	0.7	$	2.7	$	(1.6	)	$	(0.2	)	$	1.6
Asset write-offs and accelerated depreciation	—		0.7		—			(0.7		)	—
Equipment moves	—		0.1		(0.1		)	—			—
Lease termination	1.2		—		(1.2		)	—			—
Other	0.5		1.5		(2.0		)	—			—
Total restructuring reserves	$	2.4	$	5.0	$	(4.9	)	$	(0.9	)	$	1.6

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Stock-based Compensation (Details 3) (Performance Shares [Member], USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Performance Shares [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Fair value of shares or units distributed	$ 19.6	$ 9.9	$ 6.0
Realized tax benefits from tax deductions	$ 7.5	$ 3.8	$ 2.3

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Joint Ventures and Other Equity Investments (Details 1) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Equity Method Investments and Joint Ventures [Abstract]
Purchase of compressors from joint venture	$ 114.7	$ 96.7	$ 90.4

XML

Stock-Based Compensation (Details 6) (Restricted Stock [Member], USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Restricted Stock [Member]
Fair value of share units and tax deductions
Fair value of shares or units distributed	$ 19.5	$ 11.1	$ 8.6
Realized tax benefits from tax deductions	$ 7.4	$ 4.3	$ 3.3

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Supplemental Information (Tables)

12 Months Ended

Dec. 31, 2014

Supplemental Information [Abstract]

Summary of expenses in statements of operations

Losses and other expenses, net in our Consolidated Statements of Operations were as follows (in millions):

	For the Years Ended December 31,
	2014			2013			2012
Realized losses on settled futures contracts	$	0.8		$	1.0		$	1.5
Foreign currency exchange losses	1.6			0.5			0.8
Losses (gains) on disposal of fixed assets	(0.3		)	(1.0		)	0.4
Net change in unrealized losses (gains) on unsettled futures contracts	0.6			0.4			(2.2		)
Asbestos-related litigation	0.9			6.3			—
Acquisition expenses	—			0.2			0.1
Special legal contingency charges	0.9			1.2			1.2
Environmental liabilities	2.0			—			—
Other items, net	0.3			0.7			0.7
Losses and other expenses, net	$	6.8		$	9.3		$	2.5

Below is information about expenses included in our Consolidated Statements of Operations (in millions):

	For the Years Ended December 31,
	2014		2013		2012
Research and development (1)	$	60.7	$	53.7	$	50.7
Advertising, promotions and marketing (2)	41.9		45.2		59.4
Cooperative advertising expenditures (3)	13.1		10.9		9.5
Rent expense (4)	50.5		53.5		67.8

⁽¹⁾ Includes research and development costs related to discontinued operations of $1.2 million for the year ended December 31, 2012. No research and development costs related to discontinued operations were recorded for the years ended December 31, 2014 and 2013 .

⁽²⁾ Includes advertising, promotions and marketing costs related to discontinued operations of $4.1 million and $20.1 million for the years ended December 31, 2013 and 2012, respectively. No advertising costs related to discontinued operations were recorded for the year ended December 31, 2014. Cooperative advertising expenditures were not included in these amounts.

⁽³⁾ Cooperative advertising expenditures were included in Selling, general and administrative expenses in the Consolidated Statements of Operations.

⁽⁴⁾ Includes rent expense related to discontinued operations of $4.5 million and $20.1 million for the years ended December 31, 2013 and 2012, respectively. No rent costs related to discontinued operations were recorded for the year ended December 31, 2014.

Summary of Components of Interest Expense

Our Provision for income taxes from continuing operations consisted of the following (in millions):

	For the Years Ended December 31,
	2014		2013			2012
Current:
Federal	$	84.3	$	71.9		$	47.5
State	10.1		8.5			7.3
Foreign	9.6		16.2			13.4
Total current	104.0		96.6			68.2
Deferred:
Federal	2.3		(4.0		)	0.7
State	1.0		2.5			(0.2		)
Foreign	2.2		(0.7		)	(2.0		)
Total deferred	5.5		(2.2		)	(1.5		)
Total provision for income taxes	$	109.5	$	94.4		$	66.7

The components of Interest expense, net in our Consolidated Statements of Operations were as follows (in millions):

	For the Years Ended December 31,
	2014		2013		2012
Interest expense, net of capitalized interest	$	18.9	$	16.5	$	18.9
Interest income	1.7		2.0		1.8
Interest expense, net	$	17.2	$	14.5	$	17.1

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Derivatives (Details Textual) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Oct. 11, 2012
Derivative Instruments, Gain (Loss) [Line Items]
Cash flow hedge derivative gains (losses) expected to be reclassified into earnings within the next 12 months	$ 4.2
Revolving Credit Facility [Member] | Interest Rate Swap [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Amount of hedged item		$ 100

XML

Condensed Consolidating Financial Statements (Details 1) (USD $) In Millions, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2014		Dec. 31, 2013		Dec. 31, 2012
Condensed Consolidating Statements of Operations
Net sales	$ 812.8	$ 898.4	$ 960.7	$ 695.4	$ 749.5	$ 868.0	$ 913.1	$ 668.4	$ 3,367.4	[1]	$ 3,199.1	[1]	$ 2,949.4	[1]
Cost of goods sold									2,464.1		2,337.9		2,227.1
Gross profit	225.4	247.1	262.6	168.1	207.7	237.4	254.0	162.0	903.3		861.2		722.3
Operating expenses:
Selling, general and administrative expenses									573.7		570.1		507.0
Other Operating Income (Expense), Net									6.8		9.3		2.5
Restructuring charges	0.6	1.0			1.8		2.4		1.9		5.0		4.2
(Income) loss from equity method investments									(13.8)		(12.2)		(10.5)
Operational income from continuing operations									334.7		289.0		219.1
Interest expense, net									17.2		14.5		17.1
Other expense, net									(0.1)		0.2		0.3
Income from continuing operations before income taxes									317.6		274.3		201.7
Provision for income taxes									109.5		94.4		66.7
Income from continuing operations									208.1		179.9		135.0
Loss from discontinued operations									(2.3)		(8.1)		(45.0)
Net income	44.6	67.4	73.9	19.9	35.2	64.3	64.3	8.0	205.8		171.8		90.0
Other comprehensive income (loss), net of tax									(92.4)		(38.8)		14.8
Comprehensive income									113.4		133.0		104.8
Parent [Member]
Condensed Consolidating Statements of Operations
Net sales									0		0		0
Cost of goods sold									0		0		0.2
Gross profit									0		0		(0.2)
Operating expenses:
Selling, general and administrative expenses									0		0		0
Other Operating Income (Expense), Net									0		1.1		(1.7)
Restructuring charges									0		0		0
(Income) loss from equity method investments									(216.4)		(181.7)		(116.3)
Operational income from continuing operations									216.4		180.6		117.8
Interest expense, net									16.0		14.0		16.6
Other expense, net									0		0		0
Income from continuing operations before income taxes									200.4		166.6		101.2
Provision for income taxes									(5.6)		(5.2)		(4.9)
Income from continuing operations									206.0		171.8		106.1
Loss from discontinued operations									0		0		0
Net income									206.0		171.8		106.1
Other comprehensive income (loss), net of tax									(4.1)		(38.8)		6.7
Comprehensive income									201.9		133.0		112.8
Guarantor Subsidiaries [Member]
Condensed Consolidating Statements of Operations
Net sales									2,775.7		2,557.9		2,327.7
Cost of goods sold									2,057.8		1,900.9		1,799.6
Gross profit									717.9		657.0		528.1
Operating expenses:
Selling, general and administrative expenses									454.5		437.1		374.3
Other Operating Income (Expense), Net									3.2		7.9		1.1
Restructuring charges									0.4		2.9		2.8
(Income) loss from equity method investments									(25.4)		(26.4)		(17.0)
Operational income from continuing operations									285.2		235.5		166.9
Interest expense, net									(3.0)		(2.1)		(2.4)
Other expense, net									0		0		0
Income from continuing operations before income taxes									288.2		237.6		169.3
Provision for income taxes									91.7		73.7		50.5
Income from continuing operations									196.5		163.9		118.8
Loss from discontinued operations									0		0		(18.5)
Net income									196.5		163.9		100.3
Other comprehensive income (loss), net of tax									(51.2)		36.3		(2.8)
Comprehensive income									145.3		200.2		97.5
Non-Guarantor Subsidiaries [Member]
Condensed Consolidating Statements of Operations
Net sales									818.0		837.0		824.0
Cost of goods sold									628.3		632.8		629.2
Gross profit									189.7		204.2		194.8
Operating expenses:
Selling, general and administrative expenses									119.2		133.0		132.7
Other Operating Income (Expense), Net									3.6		0.3		3.2
Restructuring charges									1.5		2.1		1.4
(Income) loss from equity method investments									(11.3)		(9.7)		(7.8)
Operational income from continuing operations									76.7		78.5		65.3
Interest expense, net									4.2		2.6		2.9
Other expense, net									(0.1)		0.2		0.3
Income from continuing operations before income taxes									72.6		75.7		62.1
Provision for income taxes									24.9		25.9		21.2
Income from continuing operations									47.7		49.8		40.9
Loss from discontinued operations									(2.3)		(8.1)		(26.5)
Net income									45.4		41.7		14.4
Other comprehensive income (loss), net of tax									(34.8)		(6.1)		5.2
Comprehensive income									10.6		35.6		19.6
Eliminations [Member]
Condensed Consolidating Statements of Operations
Net sales									(226.3)		(195.8)		(202.3)
Cost of goods sold									(222.0)		(195.8)		(201.9)
Gross profit									(4.3)		0		(0.4)
Operating expenses:
Selling, general and administrative expenses									0		0		0
Other Operating Income (Expense), Net									0		0		(0.1)
Restructuring charges									0		0		0
(Income) loss from equity method investments									239.3		205.6		130.6
Operational income from continuing operations									(243.6)		(205.6)		(130.9)
Interest expense, net									0		0		0
Other expense, net									0		0		0
Income from continuing operations before income taxes									(243.6)		(205.6)		(130.9)
Provision for income taxes									(1.5)		0		(0.1)
Income from continuing operations									(242.1)		(205.6)		(130.8)
Loss from discontinued operations									0		0		0
Net income									(242.1)		(205.6)		(130.8)
Other comprehensive income (loss), net of tax									(2.3)		(30.2)		5.7
Comprehensive income									$ (244.4)		$ (235.8)		$ (125.1)

[1] On a consolidated basis, no revenue from transactions with a single customer were 10% or greater of our consolidated net sales for any of the periods presented.

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Employee Benefit Plans (Details 3) (USD $)	12 Months Ended
	Dec. 31, 2014		Dec. 31, 2013		Dec. 31, 2012
Pension Benefits [Member]
Components of net periodic benefit cost
Service cost	$ 4,200,000		$ 5,200,000		$ 5,800,000
Interest cost	17,700,000		16,200,000		17,500,000
Expected return on plan assets	(22,700,000)		(20,700,000)		(19,000,000)
Amortization of prior service cost	300,000		400,000		400,000
Amortization of net loss	6,600,000		9,200,000		8,700,000
Settlements or curtailments	400,000		1,500,000		7,100,000
Total net periodic benefit cost	6,500,000	[1]	11,800,000	[1]	20,500,000	[1]
Other Postretirement Benefit Plan [Member]
Components of net periodic benefit cost
Service cost	0		0		200,000
Interest cost	200,000		200,000		400,000
Expected return on plan assets	0		0		0
Amortization of prior service cost	(3,100,000)		(3,100,000)		(2,700,000)
Amortization of net loss	1,500,000		1,500,000		1,400,000
Settlements or curtailments	0		0		0
Total net periodic benefit cost	$ (1,400,000)	[1]	$ (1,400,000)	[1]	$ (700,000)	[1]

[1] Pension expense of $0.2 million and $6.9 million was included in Loss for discontinued operations for the years ended December 31, 2013 and 2012, respectively.

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Comprehensive Income (Tables)

12 Months Ended

Dec. 31, 2014

Equity [Abstract]

Items not reclassified in their entirety from Accumulated Other Comprehensive Income to Net Income

The following table provides information on items not reclassified in their entirety from AOCI to Net Income in the accompanying Consolidated Statements of Operations (in millions):

	For the Years Ended December 31,
AOCI Component	2014			2013			Affected Line Item(s) in the Consolidated Statements of Operations
Losses on cash flow hedges:
Commodity derivative contracts	$	(5.8	)	$	(4.2	)	Cost of goods sold
Income tax benefit	2.0			1.5			Provision for income taxes
Net of tax	$	(3.8	)	$	(2.7	)
Defined Benefit Plan Items:
Pension and Post-Retirement Benefits costs	$	(6.9	)	$	(9.5	)	Cost of goods sold; Selling, general and administrative expenses
Income tax benefit	2.4			3.4			Provision for income taxes
Net of tax	$	(4.5	)	$	(6.1	)
Foreign currency translation adjustments:
Sale of foreign business (1)	$	—		$	41.1		Loss from discontinued operations
Total reclassifications from AOCI	$	(8.3	)	$	32.3

⁽¹⁾ The reclassification of foreign currency translation adjustments related to the sale of the Service Experts business in the first quarter of 2013. Refer to Note 17 for details.

Changes in AOCI by component (net of tax)

The following tables provide information on changes in AOCI, by component (net of tax), for the years ended December 31, 2014 and 2013 (in millions):

	Gains (Losses) on Cash Flow Hedges			Unrealized Gains (Losses) on Available-for-Sale Securities		Defined Benefit Plan Items			Foreign Currency Translation Adjustments			Total AOCI
Balance as of December 31, 2013	$	(0.6	)	$	2.5	$	(106.0	)	$	43.0		$	(61.1	)
Other comprehensive (loss) income before reclassifications	(7.8		)	0.7		(47.9		)	(45.7		)	(100.7		)
Amounts reclassified from AOCI	3.8			—		4.5			—			8.3
Net other comprehensive (loss) income	(4.0		)	0.7		(43.4		)	(45.7		)	(92.4		)
Balance as of December 31, 2014	$	(4.6	)	$	3.2	$	(149.4	)	$	(2.7	)	$	(153.5	)

	Gains (Losses) on Cash Flow Hedges			Unrealized Gains (Losses) on Available-for-Sale Securities			Defined Benefit Plan Items			Foreign Currency Translation Adjustments			Total AOCI
Balance as of December 31, 2012	$	1.1		$	9.3		$	(147.5	)	$	114.8		$	(22.3	)
Other comprehensive (loss) income before reclassifications	(4.4		)	(6.8		)	35.4			(30.7		)	(6.5		)
Amounts reclassified from AOCI	2.7			—			6.1			(41.1		)	(32.3		)
Net other comprehensive (loss) income	(1.7		)	(6.8		)	41.5			(71.8		)	(38.8		)
Balance as of December 31, 2013	$	(0.6	)	$	2.5		$	(106.0	)	$	43.0		$	(61.1	)

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Schedule II - Valuation and Qualifying Accounts and Reserves (Notes)

12 Months Ended

Dec. 31, 2014

Valuation and Qualifying Accounts [Abstract]

Schedule II - Valuation and Qualifying Accounts and Reserves

SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES

For the Years Ended December 31,2014, 2013 and 2012

(In millions)

	Balance at beginning of year		Additions charged to cost and expenses		Write-offs			Recoveries		Other			Balance at end of year
2012:
Allowance for doubtful accounts	$	11.3	$	3.9	$	(6.8	)	$	1.8	$	(0.7	)	$	9.5
2013:
Allowance for doubtful accounts	$	9.5	$	3.6	$	(4.6	)	$	1.6	$	(0.3	)	$	9.8
2014:
Allowance for doubtful accounts	$	9.8	$	2.6	$	(4.6	)	$	1.1	$	(1.0	)	$	7.9

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Income Taxes (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Current:
Federal	$ 84.3	$ 71.9	$ 47.5
State	10.1	8.5	7.3
Foreign	9.6	16.2	13.4
Total current	104.0	96.6	68.2
Deferred:
Federal	2.3	(4.0)	0.7
State	1.0	2.5	(0.2)
Foreign	2.2	(0.7)	(2.0)
Total deferred	5.5	(2.2)	(1.5)
Total income tax provision	$ 109.5	$ 94.4	$ 66.7

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Stock-Based Compensation (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2014		Dec. 31, 2013		Dec. 31, 2012
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Compensation expense	$ 23.3	[1]	$ 29.3	[1]	$ 15.2	[1]

[1] Stock-Based compensation expense was recorded in our Corporate and other business segment.

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Stock-Based Compensation (Details 9) (Stock Appreciation Rights [Member], USD $) In Millions, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2014
Stock Appreciation Rights [Member]
Schedule of information on stock units
Outstanding awards, beginning of period	1.8
Outstanding, Weighted-Average Exercise Price per Share, beginning of period	$ 45.58	$ 56.20
Granted	0.2
Granted, Weighted-Average Excercise Price per Share	$ 92.64
Exercised	(0.5)
Exercised, Weighted-Average Exercise Price per Share	$ 35.91
Forfeited	0
Forfeited, Weighted-Average Exercise Price per Share	$ 0.00
Outstanding awards, end of period	1.5
Exercisable at end of year, shares	1.0
Exercisable at end of year, Weighted-Average Exercise Price per Share	$ 43.65

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Restructuring Charges (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended				12 Months Ended
	Dec. 31, 2014	Sep. 30, 2014	Dec. 31, 2013	Jun. 30, 2013	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Information regarding restructuring charges
Charges Incurred in 2014					$ 1.9
Charges Incurred to Date	10.6				10.6
Total Charges Expected to be Incurred	11.4				11.4
Details activity within the restructuring reserves
Beginning balance					1.6	2.4
Charged to Earnings	0.6	1.0	1.8	2.4	1.9	5.0	4.2
Cash Utilization					(1.7)	(4.9)
Non-Cash Utilization and Other					(0.2)	(0.9)
Ending balance	1.6		1.6		1.6	1.6	2.4
Severance and related expense [Member]
Information regarding restructuring charges
Charges Incurred in 2014					1.4
Charges Incurred to Date	6.9				6.9
Total Charges Expected to be Incurred	7.2				7.2
Details activity within the restructuring reserves
Beginning balance					1.6	0.7
Charged to Earnings						2.7
Cash Utilization					(1.5)	(1.6)
Non-Cash Utilization and Other					0	(0.2)
Ending balance	1.5		1.6		1.5	1.6
Asset write-offs and accelerated depreciation [Member]
Information regarding restructuring charges
Charges Incurred in 2014					0.3
Charges Incurred to Date	1.8				1.8
Total Charges Expected to be Incurred	1.8				1.8
Details activity within the restructuring reserves
Beginning balance					0	0
Charged to Earnings						0.7
Cash Utilization					0	0
Non-Cash Utilization and Other					(0.2)	(0.7)
Ending balance	0.1		0		0.1	0
Equipment moves [Member]
Information regarding restructuring charges
Charges Incurred in 2014					0
Charges Incurred to Date	0				0
Total Charges Expected to be Incurred	0				0
Details activity within the restructuring reserves
Beginning balance					0	0
Charged to Earnings						0.1
Cash Utilization					0	(0.1)
Non-Cash Utilization and Other					0	0
Ending balance	0		0		0	0
Lease termination [Member]
Information regarding restructuring charges
Charges Incurred in 2014					0
Charges Incurred to Date	0				0
Total Charges Expected to be Incurred	0.1				0.1
Details activity within the restructuring reserves
Beginning balance					0	1.2
Charged to Earnings						0
Cash Utilization					0	(1.2)
Non-Cash Utilization and Other					0	0
Ending balance	0		0		0	0
Other [Member]
Information regarding restructuring charges
Charges Incurred in 2014					0.2
Charges Incurred to Date	1.9				1.9
Total Charges Expected to be Incurred	2.3				2.3
Details activity within the restructuring reserves
Beginning balance					0	0.5
Charged to Earnings						1.5
Cash Utilization					(0.2)	(2.0)
Non-Cash Utilization and Other					0	0
Ending balance	0		0		0	0
Residential Heating & Cooling [Member]
Information regarding restructuring charges
Charges Incurred in 2014					0.4
Charges Incurred to Date	1.5				1.5
Total Charges Expected to be Incurred	1.5				1.5
Commercial Heating & Cooling [Member]
Information regarding restructuring charges
Charges Incurred in 2014					0
Charges Incurred to Date	0.9				0.9
Total Charges Expected to be Incurred	0.9				0.9
Refrigeration [Member]
Information regarding restructuring charges
Charges Incurred in 2014					1.6
Charges Incurred to Date	8.2				8.2
Total Charges Expected to be Incurred	9.0				9.0
Corporate & other [Member]
Information regarding restructuring charges
Charges Incurred in 2014					(0.1)
Charges Incurred to Date	0				0
Total Charges Expected to be Incurred	$ 0				$ 0

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Derivatives (Details) (Commodity Price Hedges [Member], Cash Flow Hedging [Member], USD $) In Millions, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Commodity Price Hedges [Member] | Cash Flow Hedging [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Accumulated Other Comprehensive Income (Loss), before Tax	$ 7.2	$ 0.8
Expense for (benefit from) income taxes	(2.6)	(0.2)
(Gains) losses included in AOCI, net of tax	$ 4.6	$ 0.6

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Commitments and Contingencies (Details 4) (USD $) In Millions, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Commitments and Contingencies Disclosure [Abstract]
Accrued expenses	$ 13.0	$ 13.4
Other liabilities	25.8	32.0
Total self-insurance liabilities	$ 38.8	$ 45.4

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Nature of Operations Nature of Operations Textual (Details)	12 Months Ended
	Dec. 31, 2014 Segment
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of reportable business segments	3

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Employee Benefit Plans (Details 8) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2014
Summary of one percentage-point change in assumed healthcare cost trend rate
Effect of one percentage point increase on total of service and interest cost	$ 0
Effect of one percentage point decrease on total of service and interest cost	0
Effect of one percentage point increase on the postretirement benefit obligation	0.2
Effect of one percentage point decrease on the postretirement benefit obligation	$ (0.2)

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Discontinued Operations (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2014		Dec. 31, 2013		Dec. 31, 2012
Summary of net trade sales and pre-tax operating losses
Pre-tax operating income (loss)	$ (3.7)		$ (13.3)		$ (64.9)
Service Experts [Member]
Summary of net trade sales and pre-tax operating losses
Net trade sales	0	[1]	73.5	[1]	385.1	[1]
Pre-tax operating income (loss)	2.6	[2]	(15.1)	[2]	(50.8)	[2]
Gain (loss) on sale of disposal group	0		1.4		0
Hearth [Member]
Summary of net trade sales and pre-tax operating losses
Net trade sales	0		0		23.5
Pre-tax operating income (loss)	(6.3)	[2]	0.5	[2]	(13.7)	[2]
Gain (loss) on sale of disposal group	$ 0		$ 0		$ (0.9)

[1] Excludes eliminations of intercompany sales and any associated profit.

[2] Pre-tax operating loss in 2012 included a $6.3 million pre-tax impairment charge for the write-down of net assets to their estimated fair value, a $6.3 million settlement charge related to actuarial losses recognized upon transition of a pension obligation to the acquirer of the Hearth business and a $3.5 million gain related to realized foreign currency translation adjustments.

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Derivatives (Details 3) (Fair Value, Inputs, Level 2 [Member], USD $) In Millions, unless otherwise specified	Dec. 31, 2014		Dec. 31, 2013
Designated as Hedging Instrument [Member]
Derivatives, Fair Value [Line Items]
Derivative Asset, Fair Value	$ 0	[1]	$ 0.4	[1]
Derivative Liability, Fair Value	7.2	[1]	1.2	[1]
Designated as Hedging Instrument [Member] | Commodity Futures Contracts [Member] | Current Assets [Member]
Derivatives, Fair Value [Line Items]
Derivative Asset, Fair Value	0	[1]	0.1	[1]
Designated as Hedging Instrument [Member] | Commodity Futures Contracts [Member] | Non-Current Assets [Member]
Derivatives, Fair Value [Line Items]
Derivative Asset, Fair Value	0	[1]	0.3	[1]
Designated as Hedging Instrument [Member] | Commodity Futures Contracts [Member] | Current Liabilities [Member]
Derivatives, Fair Value [Line Items]
Derivative Liability, Fair Value	6.7	[1]	1.2	[1]
Designated as Hedging Instrument [Member] | Commodity Futures Contracts [Member] | Non-Current Liabilities [Member]
Derivatives, Fair Value [Line Items]
Derivative Liability, Fair Value	0.5	[1]	0	[1]
Designated as Hedging Instrument [Member] | Foreign Currency Forward Contracts [Member] | Current Assets [Member]
Derivatives, Fair Value [Line Items]
Derivative Asset, Fair Value	0	[1]	0	[1]
Designated as Hedging Instrument [Member] | Foreign Currency Forward Contracts [Member] | Current Liabilities [Member]
Derivatives, Fair Value [Line Items]
Derivative Liability, Fair Value	0	[1]	0	[1]
Not Designated as Hedging Instrument [Member]
Derivatives, Fair Value [Line Items]
Derivative Asset, Fair Value	0.3	[1]	0.1	[1]
Derivative Liability, Fair Value	0.8	[1]	0.3	[1]
Not Designated as Hedging Instrument [Member] | Commodity Futures Contracts [Member] | Current Assets [Member]
Derivatives, Fair Value [Line Items]
Derivative Asset, Fair Value	0	[1]	0	[1]
Not Designated as Hedging Instrument [Member] | Commodity Futures Contracts [Member] | Non-Current Assets [Member]
Derivatives, Fair Value [Line Items]
Derivative Asset, Fair Value	0	[1]	0	[1]
Not Designated as Hedging Instrument [Member] | Commodity Futures Contracts [Member] | Current Liabilities [Member]
Derivatives, Fair Value [Line Items]
Derivative Liability, Fair Value	0.7	[1]	0.3	[1]
Not Designated as Hedging Instrument [Member] | Commodity Futures Contracts [Member] | Non-Current Liabilities [Member]
Derivatives, Fair Value [Line Items]
Derivative Liability, Fair Value	0.1	[1]	0	[1]
Not Designated as Hedging Instrument [Member] | Foreign Currency Forward Contracts [Member] | Current Assets [Member]
Derivatives, Fair Value [Line Items]
Derivative Asset, Fair Value	0.3	[1]	0.1	[1]
Not Designated as Hedging Instrument [Member] | Foreign Currency Forward Contracts [Member] | Current Liabilities [Member]
Derivatives, Fair Value [Line Items]
Derivative Liability, Fair Value	$ 0	[1]	$ 0	[1]

[1] All derivative instruments are classified as Level 2 within the fair value hierarchy. See Note 20 for more information on fair value measurements.

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Selected Quarterly Financial Information (unaudited) (Details) (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2014		Dec. 31, 2013		Dec. 31, 2012
Summary of information on net sales, gross profit, net income, earnings per share and dividends per share
Net Sales	$ 812.8	$ 898.4	$ 960.7	$ 695.4	$ 749.5	$ 868.0	$ 913.1	$ 668.4	$ 3,367.4	[1]	$ 3,199.1	[1]	$ 2,949.4	[1]
Gross Profit	225.4	247.1	262.6	168.1	207.7	237.4	254.0	162.0	903.3		861.2		722.3
Net income	$ 44.6	$ 67.4	$ 73.9	$ 19.9	$ 35.2	$ 64.3	$ 64.3	$ 8.0	$ 205.8		$ 171.8		$ 90.0
Basic Earnings (Loss) per Share	$ 0.98	$ 1.40	$ 1.51	$ 0.41	$ 0.72	$ 1.29	$ 1.28	$ 0.16	$ 4.30		$ 3.45		$ 1.77
Diluted Earnings (Loss) per Share	$ 0.96	$ 1.38	$ 1.49	$ 0.40	$ 0.70	$ 1.27	$ 1.26	$ 0.16	$ 4.23		$ 3.39		$ 1.75
Dividends per Common Share	$ 0.3	$ 0.3	$ 0.3	$ 0.24	$ 0.24	$ 0.24	$ 0.24	$ 0.2	$ 1.14		$ 0.92		$ 0.76

[1] On a consolidated basis, no revenue from transactions with a single customer were 10% or greater of our consolidated net sales for any of the periods presented.

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Commitments and Contingencies (Details 1) (USD $) In Millions, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Commitments and Contingencies Disclosure [Abstract]
Accrued expenses	$ 1.7	$ 1.4
Other liabilities	4.5	3.8
Total	$ 6.2	$ 5.2

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Reportable Business Segments (Details Textual) (USD $)	12 Months Ended
	Dec. 31, 2014 Segment		Dec. 31, 2013		Dec. 31, 2012
Segment Reporting Information [Line Items]
Number of reportable business segments	3
Revenue From Transactions With Major Customers	$ 0		$ 0		$ 0
Minimum Percentage Of Consolidated Net Sales From Single Customer	10.00%		10.00%		10.00%
Capital Lease Obligations	0		0		0
Income from Equity Method Investments	13,800,000		12,200,000		10,500,000
Residential Heating & Cooling and Commercial Heating & Cooling [Member]
Segment Reporting Information [Line Items]
Income from Equity Method Investments	$ 11,700,000	[1]	$ 9,600,000	[1]	$ 5,000,000	[1]

[1] $11.7 million, $9.6 million and $5.0 million of income from equity method investments to our Residential Heating & Cooling and Commercial Heating & Cooling segments in 2014, 2013 and 2012, respectively. These allocations were recorded as reductions to the segments' Cost of goods sold in the Consolidated Statements of Operations.

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Selected Quarterly Financial Information (unaudited) (Details Textual) (USD $) In Millions, unless otherwise specified	3 Months Ended					12 Months Ended			0 Months Ended
	Dec. 31, 2014	Sep. 30, 2014	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	Mar. 22, 2013
Restructuring charges	$ 0.6	$ 1.0	$ 1.8		$ 2.4	$ 1.9	$ 5.0	$ 4.2
Loss Contingency, Loss in Period				0.8
Liability for Asbestos and Environmental Claims, Net, Incurred Loss			6.3			0.9	6.3
Service Experts [Member]
Proceeds from sale of business									10.4
Gain (loss) on sale of disposal group						$ 0	$ 1.4	$ 0

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Income Taxes (Details 2) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Income Tax Disclosure [Abstract]
Provision at the U.S. statutory rate of 35%	$ 111.2	$ 96.0	$ 70.6
U.S. statutory rate	35.00%	35.00%	35.00%
Increase (reduction) in tax expense resulting from:
State income tax, net of federal income tax benefit	8.8	7.1	5.9
Other permanent items	(8.2)	(6.4)	(3.1)
Research tax credit	0	(0.5)	0
Change in unrecognized tax benefits	0.2	0.7	(5.1)
Change in valuation allowance	0.2	0.7	2.3
Foreign taxes at rates other than 35% and miscellaneous other	(2.7)	(3.2)	(3.9)
Total income tax provision	$ 109.5	$ 94.4	$ 66.7

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Commitments and Contingencies (Details 2) (USD $) In Millions, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Commitments and Contingencies Disclosure [Abstract]
Accrued expenses	$ 27.3	$ 28.7
Other liabilities	59.9	52.9
Total product warranty liabilities	$ 87.2	$ 81.6	$ 71.9

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Derivatives (Details 4) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2014		Dec. 31, 2013		Dec. 31, 2012
Cash Flow Hedging [Member]
Effect of Derivative Instruments on Consolidated Statements of Operations
Amount of Loss (Gain) Reclassified from AOCI into Income (Effective Portion)	$ 5.8		$ 4.2		$ 7.9
Cash Flow Hedging [Member] | Cost of Goods Sold [Member] | Commodity Futures Contracts [Member]
Effect of Derivative Instruments on Consolidated Statements of Operations
Amount of Loss (Gain) Reclassified from AOCI into Income (Effective Portion)	5.8	[1]	4.2	[1]	6.0	[1]
Cash Flow Hedging [Member] | Interest Expense Net [Member] | Interest Rate Swap [Member]
Effect of Derivative Instruments on Consolidated Statements of Operations
Amount of Loss (Gain) Reclassified from AOCI into Income (Effective Portion)	0	[2]	0	[2]	1.9	[2]
Cash Flow Hedging [Member] | Other Expense [Member] | Commodity Futures Contracts [Member]
Effect of Derivative Instruments on Consolidated Statements of Operations
Amount of (Gain) Loss Recognized in Income on Derivatives (Ineffective Portion)	0.1	[3]	0.2	[3]	(0.1)	[3]
Not Designated as Hedging Instrument [Member]
Effect of Derivative Instruments on Consolidated Statements of Operations
Amount of Loss (Gain) Recognized in Income on Derivatives	0.4		1.3		(0.1)
Not Designated as Hedging Instrument [Member] | Other Expense [Member] | Commodity Futures Contracts [Member]
Effect of Derivative Instruments on Consolidated Statements of Operations
Amount of Loss (Gain) Recognized in Income on Derivatives	1.2	[3]	1.2	[3]	(0.5)	[3]
Not Designated as Hedging Instrument [Member] | Other Expense [Member] | Foreign Currency Forward Contracts [Member]
Effect of Derivative Instruments on Consolidated Statements of Operations
Amount of Loss (Gain) Recognized in Income on Derivatives	$ (0.8)	[3]	$ 0.1	[3]	$ 0.4	[3]

[1] The loss (gain) was recorded in Cost of goods sold in the accompanying Consolidated Statements of Operations.

[2] The loss was recorded in Interest expense, net in the accompanying Consolidated Statements of Operations.

[3] The loss (gain) was recorded in Losses and other expenses, net in the accompanying Consolidated Statements of Operations.

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Joint Ventures and Other Equity Investments Joint Ventures and Other Equity Investments (Details Textuals)	Dec. 31, 2014 joint_venture
Schedule of Equity Method Investments [Line Items]
Number of joint ventures	2
United States [Member]
Schedule of Equity Method Investments [Line Items]
Percentage of ownership in joint ventures	25.00%
Mexico [Member]
Schedule of Equity Method Investments [Line Items]
Percentage of ownership in joint ventures	50.00%

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Discontinued Operations

12 Months Ended

Dec. 31, 2014

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

Discontinued Operations:

On March 22, 2013, we sold our Service Experts business to a majority-owned entity of American Capital, Ltd. (the "Buyer") in an all-cash transaction for net proceeds of $10.4 million, excluding transaction costs. We also entered into a two-year equipment and parts supply agreement with the Buyer. In April 2012, we sold our Hearth business to Comvest Investment Partners IV in an all-cash transaction for net proceeds of $10.1 million, excluding the transaction costs and cash transferred with the business. The gains and losses on the sale of these businesses and their operating results for all periods are presented in discontinued operations.

Service Experts

A summary of net sales and pre-tax gains and losses for the Service Experts business is detailed below (in millions):

	For the Years Ended December 31,
	2014		2013			2012
Net sales (1)	$	—	$	73.5		$	385.1
Pre-tax operating income (loss) (1)(2)	2.6		(15.1		)	(50.8		)
Gain on sale of business	—		1.4			—

⁽¹⁾ Excludes eliminations of intercompany sales and any associated profit.

⁽²⁾ Pre-tax operating loss for the year ended December 31, 2012 included a $20.5 million goodwill impairment loss.

There were no assets or liabilities related to the Service Experts business included in the accompanying Consolidated Balance Sheets as of December 31, 2014 or 2013.

Hearth

A summary of net sales and pre-tax gains and losses for the Hearth business is detailed below (in millions):

	For the Years Ended December 31,
	2014			2013		2012
Net sales (1)	$	—		$	—	$	23.5
Pre-tax operating income (loss) (1)(2)	(6.3		)	0.5		(13.7		)
Loss on sale of business	—			—		(0.9		)

⁽¹⁾ Excludes eliminations of intercompany sales and any associated profit.

⁽²⁾ Pre-tax operating loss in 2012 included a $6.3 million pre-tax impairment charge for the write-down of net assets to their estimated fair value, a $6.3 million settlement charge related to actuarial losses recognized upon transition of a pension obligation to the acquirer of the Hearth business and a $3.5 million gain related to realized foreign currency translation adjustments.

There were no assets or liabilities related to the Hearth business included in the accompanying Consolidated Balance Sheets as of December 31, 2014 or 2013.

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Reportable Business Segments (Details 3) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Segment Reporting Information [Line Items]
Total capital expenditures	$ 88.4	$ 78.3	$ 50.2
Residential Heating and Cooling [Member]
Segment Reporting Information [Line Items]
Total capital expenditures	39.4	34.2	13.7
Commercial Heating and Cooling [Member]
Segment Reporting Information [Line Items]
Total capital expenditures	14.1	11.2	8.7
Refrigeration [Member]
Segment Reporting Information [Line Items]
Total capital expenditures	15.8	16.5	15.6
Corporate and Other [Member]
Segment Reporting Information [Line Items]
Total capital expenditures	$ 19.1	$ 16.4	$ 12.2

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Earnings per Share (Tables)

12 Months Ended

Dec. 31, 2014

Earnings Per Share [Abstract]

Computations of basic and diluted loss per share for Loss from Continuing Operations

The computations of basic and diluted earnings per share for Income from continuing operations were as follows (in millions, except per share data):

	For the Years Ended December 31,
	2014			2013			2012
Net income	$	205.8		$	171.8		$	90.0
Add: Loss from discontinued operations	2.3			8.1			45.0
Income from continuing operations	$	208.1		$	179.9		$	135.0
Weighted-average shares outstanding – basic	47.9			49.8			50.7
Add: Potential effect of diluted securities attributable to stock-based payments	0.7			0.8			0.7
Weighted-average shares outstanding – diluted	48.6			50.6			51.4
Earnings per share - Basic:
Income from continuing operations	$	4.35		$	3.61		$	2.66
Loss from discontinued operations	(0.05		)	(0.16		)	(0.89		)
Net income	$	4.30		$	3.45		$	1.77
Earnings per share - Diluted:
Income from continuing operations	$	4.28		$	3.55		$	2.63
Loss from discontinued operations	(0.05		)	(0.16		)	(0.88		)
Net income	$	4.23		$	3.39		$	1.75

Stock appreciation rights were outstanding, but not included in the diluted loss per share calculation

The following stock appreciation rights were outstanding but not included in the diluted earnings per share calculation because the assumed exercise of such rights would have been anti-dilutive (in millions, except for per share data):

	For the Years Ended December 31,
	2014	2013	2012
Weighted-average number of shares	0.3	0.1	0.1
Price ranges per share	$81.11 - $92.64	$81.11 - $81.14	$51.11 - $51.40

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Condensed Consolidating Financial Statements (Details 2) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Condensed Consolidating Statements of Cash Flows
Cash flows from operating activities:	$ 184.8	$ 210.3	$ 221.4
Cash flows from investing activities:
Proceeds from the disposal of property, plant and equipment	1.1	2.4	0.1
Purchases of property, plant and equipment	(88.4)	(78.3)	(50.2)
Net proceeds from sale of businesses	0	8.6	10.1
Net cash used in discontinued operations	0	0	(0.4)
Net cash used in investing activities	(87.3)	(67.3)	(40.4)
Cash flows from financing activities:
Short-term borrowings, net	1.5	2.0	0.2
Asset securitization borrowings	100.0	330.0	645.0
Asset securitization payments	(40.0)	(200.0)	(615.0)
Term loan borrowings from credit facility	300.0	0	0
Long-term debt payments	(2.3)	(1.0)	(1.1)
Borrowings from credit facility	2,073.5	1,425.5	967.0
Payments on credit facility	(1,908.5)	(1,543.5)	(1,075.0)
Proceeds from employee stock purchases	2.0	1.8	0.8
Payments to Acquire Interest in Subsidiaries and Affiliates		(0.5)
Payments of deferred financing costs	(2.2)	0	0
Repurchases of common stock	(550.3)	(125.0)	(50.1)
Repurchases of common stock to satisfy employee withholding tax obligations	(22.4)	(12.0)	(7.8)
Excess tax benefits related to share-based payments	11.8	6.5	3.5
Intercompany debt	0	0	0
Intercompany financing activity	0	0	0
Intercompany investments
Cash dividends paid	(52.6)	(34.0)	(47.6)
Net cash used in financing activities	(89.5)	(150.2)	(180.1)
Increase (decrease) in cash and cash equivalents	8.0	(7.2)	0.9
Effect of exchange rates on cash and cash equivalents	(8.5)	(6.6)	5.9
Cash and cash equivalents, beginning of year	38.0	51.8	45.0
Cash and cash equivalents, end of year	37.5	38.0	51.8
Parent [Member]
Condensed Consolidating Statements of Cash Flows
Cash flows from operating activities:	328.8	(30.4)	20.7
Cash flows from investing activities:
Proceeds from the disposal of property, plant and equipment	0	0	0
Purchases of property, plant and equipment	0	0	0
Net proceeds from sale of businesses		5.3	0
Net cash used in discontinued operations			0
Net cash used in investing activities	0	5.3	0
Cash flows from financing activities:
Short-term borrowings, net	0	0	0
Asset securitization borrowings	0	0	0
Asset securitization payments	0	0	0
Term loan borrowings from credit facility	300.0
Long-term debt payments	0	0	0
Borrowings from credit facility	2,073.5	1,425.5	967.0
Payments on credit facility	(1,908.5)	(1,543.5)	(1,075.0)
Proceeds from employee stock purchases	2.0	1.8	0.8
Additional investment in affiliates		0
Payments of deferred financing costs	(2.2)
Repurchases of common stock	(550.3)	(125.0)	(50.1)
Repurchases of common stock to satisfy employee withholding tax obligations	(22.4)	(12.0)	(7.8)
Excess tax benefits related to share-based payments	11.8	6.5	3.5
Intercompany debt	(0.1)	(26.8)	2.4
Intercompany financing activity	(180.1)	332.7	186.1
Intercompany investments
Cash dividends paid	(52.6)	(34.0)	(47.6)
Net cash used in financing activities	(328.9)	25.2	(20.7)
Increase (decrease) in cash and cash equivalents	(0.1)	0.1	0
Effect of exchange rates on cash and cash equivalents	0	0	0
Cash and cash equivalents, beginning of year	1.1	1.0	1.0
Cash and cash equivalents, end of year	1.0	1.1	1.0
Guarantor Subsidiaries [Member]
Condensed Consolidating Statements of Cash Flows
Cash flows from operating activities:	(97.2)	328.4	207.3
Cash flows from investing activities:
Proceeds from the disposal of property, plant and equipment	1.0	2.4	0.1
Purchases of property, plant and equipment	(70.5)	(55.8)	(37.7)
Net proceeds from sale of businesses		0	10.1
Net cash used in discontinued operations			(0.5)
Net cash used in investing activities	(69.5)	(53.4)	(28.0)
Cash flows from financing activities:
Short-term borrowings, net	0	0	0
Asset securitization borrowings	0	0	0
Asset securitization payments	0	0	0
Term loan borrowings from credit facility	0
Long-term debt payments	(1.9)	(0.7)	(0.7)
Borrowings from credit facility	0	0	0
Payments on credit facility	0	0	0
Proceeds from employee stock purchases	0	0	0
Additional investment in affiliates		0
Payments of deferred financing costs	0
Repurchases of common stock	0	0	0
Repurchases of common stock to satisfy employee withholding tax obligations	0	0	0
Excess tax benefits related to share-based payments	0	0	0
Intercompany debt	4.7	12.3	(4.0)
Intercompany financing activity	164.9	(289.5)	(170.9)
Intercompany investments
Cash dividends paid	0	0	0
Net cash used in financing activities	167.7	(277.9)	(175.6)
Increase (decrease) in cash and cash equivalents	1.0	(2.9)	3.7
Effect of exchange rates on cash and cash equivalents	0	0	0
Cash and cash equivalents, beginning of year	10.5	13.4	9.7
Cash and cash equivalents, end of year	11.5	10.5	13.4
Non-Guarantor Subsidiaries [Member]
Condensed Consolidating Statements of Cash Flows
Cash flows from operating activities:	(46.8)	(87.7)	(6.6)
Cash flows from investing activities:
Proceeds from the disposal of property, plant and equipment	0.1	0	0
Purchases of property, plant and equipment	(17.9)	(22.5)	(12.5)
Net proceeds from sale of businesses		3.3	0
Net cash used in discontinued operations			0.1
Net cash used in investing activities	(17.8)	(19.2)	(12.4)
Cash flows from financing activities:
Short-term borrowings, net	1.5	2.0	0.2
Asset securitization borrowings	100.0	330.0	645.0
Asset securitization payments	(40.0)	(200.0)	(615.0)
Term loan borrowings from credit facility	0
Long-term debt payments	(0.4)	(0.3)	(0.4)
Borrowings from credit facility	0	0	0
Payments on credit facility	0	0	0
Proceeds from employee stock purchases	0	0	0
Payments to Acquire Interest in Subsidiaries and Affiliates		(0.5)
Payments of deferred financing costs	0
Repurchases of common stock	0	0	0
Repurchases of common stock to satisfy employee withholding tax obligations	0	0	0
Excess tax benefits related to share-based payments	0	0	0
Intercompany debt	(4.6)	14.5	1.6
Intercompany financing activity	15.2	(43.2)	(15.2)
Intercompany investments
Cash dividends paid	0	0	0
Net cash used in financing activities	71.7	102.5	16.2
Increase (decrease) in cash and cash equivalents	7.1	(4.4)	(2.8)
Effect of exchange rates on cash and cash equivalents	(8.5)	(6.6)	5.9
Cash and cash equivalents, beginning of year	26.4	37.4	34.3
Cash and cash equivalents, end of year	25.0	26.4	37.4
Eliminations [Member]
Condensed Consolidating Statements of Cash Flows
Cash flows from operating activities:	0	0	0
Cash flows from investing activities:
Proceeds from the disposal of property, plant and equipment	0	0	0
Purchases of property, plant and equipment	0	0	0
Net proceeds from sale of businesses		0	0
Net cash used in discontinued operations			0
Net cash used in investing activities	0	0	0
Cash flows from financing activities:
Short-term borrowings, net	0	0	0
Asset securitization borrowings	0	0	0
Asset securitization payments	0	0	0
Term loan borrowings from credit facility	0
Long-term debt payments	0	0	0
Borrowings from credit facility	0	0	0
Payments on credit facility	0	0	0
Proceeds from employee stock purchases	0	0	0
Additional investment in affiliates		0
Payments of deferred financing costs	0
Repurchases of common stock	0	0	0
Repurchases of common stock to satisfy employee withholding tax obligations	0	0	0
Excess tax benefits related to share-based payments	0	0	0
Intercompany debt	0	0	0
Intercompany financing activity	0	0	0
Intercompany investments
Cash dividends paid	0	0	0
Net cash used in financing activities	0	0	0
Increase (decrease) in cash and cash equivalents	0	0	0
Effect of exchange rates on cash and cash equivalents	0	0	0
Cash and cash equivalents, beginning of year	0	0	0
Cash and cash equivalents, end of year	$ 0	$ 0	$ 0

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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2014

Income Tax Disclosure [Abstract]

Components of income tax provision (benefits) from continuing operations

Our Provision for income taxes from continuing operations consisted of the following (in millions):

	For the Years Ended December 31,
	2014		2013			2012
Current:
Federal	$	84.3	$	71.9		$	47.5
State	10.1		8.5			7.3
Foreign	9.6		16.2			13.4
Total current	104.0		96.6			68.2
Deferred:
Federal	2.3		(4.0		)	0.7
State	1.0		2.5			(0.2		)
Foreign	2.2		(0.7		)	(2.0		)
Total deferred	5.5		(2.2		)	(1.5		)
Total provision for income taxes	$	109.5	$	94.4		$	66.7

The components of Interest expense, net in our Consolidated Statements of Operations were as follows (in millions):

	For the Years Ended December 31,
	2014		2013		2012
Interest expense, net of capitalized interest	$	18.9	$	16.5	$	18.9
Interest income	1.7		2.0		1.8
Interest expense, net	$	17.2	$	14.5	$	17.1

Income from continuing operations before income taxes

Income from continuing operations before income taxes was comprised of the following (in millions):

	For the Years Ended December 31,
	2014		2013		2012
Domestic	$	283.7	$	231.1	$	169.9
Foreign	33.9		43.2		31.8
Total	$	317.6	$	274.3	$	201.7

Summary of difference between the income tax provision from continuing operations computed at the statutory federal income tax rate and the financial statement provision for taxes

The difference between the income tax provision from continuing operations computed at the statutory federal income tax rate and the financial statement Provision for income taxes is summarized as follows (in millions):

	For the Years Ended December 31,
	2014			2013			2012
Provision at the U.S. statutory rate of 35%	$	111.2		$	96.0		$	70.6
Increase (reduction) in tax expense resulting from:
State income tax, net of federal income tax benefit	8.8			7.1			5.9
Other permanent items	(8.2		)	(6.4		)	(3.1		)
Research tax credit	—			(0.5		)	—
Change in unrecognized tax benefits	0.2			0.7			(5.1		)
Change in valuation allowance	0.2			0.7			2.3
Foreign taxes at rates other than 35% and miscellaneous other	(2.7		)	(3.2		)	(3.9		)
Total provision for income taxes	$	109.5		$	94.4		$	66.7

Summary of deferred tax assets (liabilities)

Deferred tax assets (liabilities) were comprised of the following (in millions):

	As of December 31,
	2014			2013
Gross deferred tax assets:
Warranties	$	30.9		$	29.3
Loss carryforwards (foreign, U.S. and state)	23.6			28.2
Post-retirement and pension benefits	50.7			28.3
Inventory reserves	4.4			4.8
Receivables allowance	4.9			5.1
Compensation liabilities	19.6			22.6
Deferred income	1.0			0.9
Insurance liabilities	15.8			18.1
Legal reserves	11.1			10.7
Hedges	2.8			0.6
State credits, net of federal effect	8.8			8.7
Other	9.2			7.7
Total deferred tax assets	182.8			165.0
Valuation allowance	(21.2		)	(21.2		)
Total deferred tax assets, net of valuation allowance	161.6			143.8
Gross deferred tax liabilities:
Depreciation	(10.8		)	(12.4		)
Intangibles	(11.0		)	(8.7		)
Other	(9.9		)	(9.7		)
Total deferred tax liabilities	(31.7		)	(30.8		)
Net deferred tax assets	$	129.9		$	113.0

Summary of reconciliation of the beginning and ending amount of unrecognized tax benefits

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in millions):

Balance as of December 31, 2012	$	1.0
Increases related to prior year tax positions	0.7
Decreases related to prior year tax positions	(0.1		)
Increases related to current year tax positions	0.1
Balance as of December 31, 2013	1.7
Increases related to prior year tax positions	0.7
Decreases related to prior year tax positions	(0.7		)
Increases related to current year tax positions	—
Settlement	$	(0.1	)
Balance as of December 31, 2014	$	1.6

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Derivatives (Details 2) (Foreign Exchange Forward [Member], Not Designated as Hedging Instrument [Member]) In Millions, unless otherwise specified	Dec. 31, 2014 Brazilian Real BRL	Dec. 31, 2013 Brazilian Real BRL	Dec. 31, 2014 Mexican Peso MXN	Dec. 31, 2013 Mexican Peso MXN	Dec. 31, 2014 United States Dollar USD ($)	Dec. 31, 2013 United States Dollar USD ($)	Dec. 31, 2014 Euro EUR (€)	Dec. 31, 2013 Euro EUR (€)	Dec. 31, 2014 British Pound GBP (£)	Dec. 31, 2013 British Pound GBP (£)	Dec. 31, 2014 Russian Ruble RUB	Dec. 31, 2013 Russian Ruble RUB	Dec. 31, 2014 Indian Rupee INR	Dec. 31, 2013 Indian Rupee INR	Dec. 31, 2014 Polish Zloty PLN	Dec. 31, 2013 Polish Zloty PLN
Derivative [Line Items]
Derivative, monetary notional amount	8.7	1.2	229.7	130.0	$ 4.5	$ 0	€ 3.6	€ 0	£ 0	£ 3.4	80.8	0	0	28.0	30.6	32.6

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Lines of Credit and Financing Arrangements (Details Textual 1) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Nov. 13, 2014	Nov. 30, 2013	Nov. 12, 2014
Line of Credit Facility [Line Items]
Maximum securitization as percentage of net pool balance	100.00%
Program fee	0.60%
Average floating commercial paper rate	0.79%	0.78%
Unused fee	101.00%
Fixed rate of agreement	0.30%
Unused fee charged on incremental available amounts	0.05%
Minimum [Member]
Line of Credit Facility [Line Items]
Maximum securitization, amount			$ 180,000,000	$ 160,000,000
Maximum [Member]
Line of Credit Facility [Line Items]
Maximum securitization, amount			220,000,000	220,000,000
Domestic Credit Facility [Member]
Line of Credit Facility [Line Items]
Maximum borrowing capacity	950,000,000
Outstanding borrowings	482,000,000
Letters of credit	27,200,000
Remaining borrowing capacity	440,800,000
Maximum increase in borrowings under Domestic Revolving Credit Facility	350,000,000
Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Maximum borrowing capacity	650,000,000				650,000,000
Letter of Credit [Member]
Line of Credit Facility [Line Items]
Maximum borrowing capacity	150,000,000
Subfacility for Swingline Loans [Member]
Line of Credit Facility [Line Items]
Maximum borrowing capacity	65,000,000
Term Loan [Member] | Domestic Credit Facility [Member]
Line of Credit Facility [Line Items]
Debt Instrument, Face Amount	300,000,000
Quarterly principal payment	7,500,000

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Goodwill and Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

The changes in the carrying amount of goodwill in 2014 and 2013, in total and by segment, are summarized in the table below (in millions):

Segment:	Balance at December 31, 2012 (2)		Acquisitions / (Dispositions)		Other(1)			Balance at December 31, 2013		Acquisitions / (Dispositions)		Other(1)			Balance at December 31, 2014
Residential Heating & Cooling	$	26.1	$	—	$	—		$	26.1	$	—	$	—		$	26.1
Commercial Heating & Cooling	63.8		—		0.8			64.6		—		(2.3		)	62.3
Refrigeration	133.9		—		(7.8		)	126.1		—		(5.1		)	121.0
	$	223.8	$	—	$	(7.0	)	$	216.8	$	—	$	(7.4	)	$	209.4

⁽¹⁾ Other consists of changes in foreign currency translation rates.

⁽²⁾ The goodwill balances in the table above are presented net of accumulated impairment charges of $15.7 million, all of which relate to impairments in periods prior to 2012.

Summary of amortization of intangible assets

Identifiable intangible and other assets subject to amortization were recorded in Other assets, net in the accompanying Consolidated Balance Sheets and were comprised of the following (in millions):

	As of December 31,
	2014							2013
	Gross Amount		Accumulated Amortization			Net Amount		Gross Amount		Accumulated Amortization			Net Amount
Deferred financing costs	$	5.4	$	(1.5	)	$	3.9	$	5.0	$	(2.3	)	$	2.7
Customer relationships	42.6		(23.1		)	19.5		42.6		(20.6		)	22.0
Patents and others	12.0		(7.6		)	4.4		10.3		(7.2		)	3.1
Total	$	60.0	$	(32.2	)	$	27.8	$	57.9	$	(30.1	)	$	27.8

Amortization expense

Amortization expense related to these intangible and other assets was as follows (in millions):

	For the Years Ended December 31,
	2014		2013		2012
Amortization expense	$	3.9	$	3.9	$	3.8

Summary of estimated intangible amortization expense for the next five years

Estimated amortization expense for the next five years and thereafter is as follows (in millions):

Estimated Future Amortization Expense:
2015	$	3.8
2016	3.7
2017	3.5
2018	3.4
2019	3.2
Thereafter	10.2

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Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2014

Fair Value Disclosures [Abstract]

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table presents the fair values of an investment in marketable equity securities, related to publicly traded stock of a non-U.S. company, recorded in Other assets, net in the accompanying Consolidated Balance Sheets (in millions):

	As of December 31,
	2014		2013
Quoted Prices in Active Markets for Identical Assets (Level 1):
Investment in marketable equity securities	$	5.3	$	4.4

Other Fair Value Measurements

The following table presents the fair value for our senior unsecured notes in Long-term debt (in millions):

	As of December 31,
	2014		2013
Quoted Prices in Active Markets for Similar Instruments (Level 2):
Senior unsecured notes	$	210.6	$	214.0

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Property, Plant and Equipment (Details) (USD $) In Millions, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Property, Plant and Equipment [Abstract]
Land	$ 38.3	$ 39.5
Buildings and improvements	215.0	202.5
Machinery and equipment	681.8	634.0
Capital Leased Assets, Gross	27.0	25.2
Construction in progress and equipment not yet in service	50.6	51.6
Total	1,012.7	952.8
Less accumulated depreciation	(654.1)	(617.3)
Property, plant and equipment, net	$ 358.6	$ 335.5	$ 298.2

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Schedule II - Valuation and Qualifying Accounts and Reserves (Details) (Allowance for Doubtful Accounts [Member], USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Allowance for Doubtful Accounts [Member]
Movement in Valuation Allowances and Reserves [Roll Forward]
Balance at beginning of year	$ 9.8	$ 9.5	$ 11.3
Additions charged to cost and expenses	2.6	3.6	3.9
Write-offs	(4.6)	(4.6)	(6.8)
Recoveries	1.1	1.6	1.8
Other	(1.0)	(0.3)	(0.7)
Balance at end of year	$ 7.9	$ 9.8	$ 9.5

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Employee Benefit Plans (Details 10)	Dec. 31, 2014	Dec. 31, 2013
Defined Benefit Plan, Information about Plan Assets [Abstract]
Weighted average asset allocations	100.00%	100.00%
U.S. equity [Member]
Defined Benefit Plan, Information about Plan Assets [Abstract]
Weighted average asset allocations	28.30%	37.80%
International equity [Member]
Defined Benefit Plan, Information about Plan Assets [Abstract]
Weighted average asset allocations	17.10%	26.70%
Fixed income [Member]
Defined Benefit Plan, Information about Plan Assets [Abstract]
Weighted average asset allocations	52.60%	33.80%
Money market
Defined Benefit Plan, Information about Plan Assets [Abstract]
Weighted average asset allocations	2.00%	1.70%

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Supplemental Information (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2014		Dec. 31, 2013		Dec. 31, 2012
Summary of expenses in statements of operations
Research and development	$ 60.7	[1]	$ 53.7	[1]	$ 50.7	[1]
Advertising, promotions and marketing	41.9	[2]	45.2	[2]	59.4	[2]
Cooperative advertising expenditures	13.1	[3]	10.9	[3]	9.5	[3]
Rent expense	$ 50.5	[4]	$ 53.5	[4]	$ 67.8	[4]

[1] esearch and development costs related to discontinued operations of $1.2 million for the year ended December 31, 2012.

[2] dvertising, promotions and marketing costs related to discontinued operations of $4.1 million and $20.1 million for the years ended December 31, 2013 and 2012, respectively. No advertising costs related to discontinued operations were recorded for the year ended December 31, 2014. Cooperative advertising expenditures were not included in these amounts.

[3] Cooperative advertising expenditures were included in Selling, general and administrative expenses in the Consolidated Statements of Operations.

[4] ent expense related to discontinued operations of $4.5 million and $20.1 million for the years ended December 31, 2013 and 2012, respectively.

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Inventories (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Components of inventories
Finished goods	$ 338.2	$ 251.4
Work in process	8.1	11.8
Raw materials and repair parts	182.6	188.9
Gross inventories	528.9	452.1
Excess of current cost over last-in, first-out cost	(65.6)	(73.3)
Total inventories, net	463.3	378.8
Inventories (Textual) [Abstract]
Pre-tax income (loss) from LIFO inventory liquidations	$ 0	$ 0.3	$ (0.1)

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Stock-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2014

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Schedule of stock -based compensation expense in operations

Stock-Based compensation expense related to continuing operations was included in Selling, general and administrative expenses in the accompanying Consolidated Statements of Operations as follows (in millions):

	For the Years Ended December 31,
	2014		2013		2012
Compensation expense(1)	$	23.3	$	29.3	$	15.2

⁽¹⁾ Stock-Based compensation expense was recorded in our Corporate and other business segment.

Summary of status of undistributed performance share units

A summary of the status of our undistributed performance share units as of December 31, 2014, and changes during the year then ended, is presented below (in millions, except per share data):

	Shares		Weighted- Average Grant Date Fair Value per Share
Undistributed performance share units as of December 31, 2013	0.7		$	47.83
Granted	0.1		88.26
Adjustments to shares paid based on payout ratio	0.2		31.78
Distributed	(0.2	)	44.85
Forfeited	—		—
Undistributed performance share units as of December 31, 2014 (1)	0.8		$	49.47

⁽¹⁾ Undistributed performance share units include approximately 0.4 million units with a weighted-average grant date fair value of $68.27 per share that had not yet vested and 0.4 million units that have vested but were not yet distributed.

Fair value of performance share units and tax deductions

The total fair value of performance share units distributed and the resulting tax deductions to realize tax benefits were as follows (in millions):

	For the Years Ended December 31,
	2014		2013		2012
Fair value of performance share units distributed	$	19.6	$	9.9	$	6.0
Realized tax benefits from tax deductions	$	7.5	$	3.8	$	2.3

Summary of non vested restricted stock units

A summary of our non-vested restricted stock units as of December 31, 2014 and changes during the year then ended is presented below (in millions, except per share data):

	Shares		Weighted- Average Grant Date Fair Value per Share
Non-vested restricted stock units as of December 31, 2013	0.5		$	48.83
Granted	0.1		88.26
Distributed	(0.2	)	32.42
Forfeited	—		—
Non-vested restricted stock units as of December 31, 2014	0.4		$	69.09

Fair value of restricted stock units and tax deductions

The total fair value of restricted stock units vested and the resulting tax deductions to realize tax benefits were as follows (in millions):

	For the Years Ended December 31,
	2014		2013		2012
Fair value of restricted stock units vested	$	19.5	$	11.1	$	8.6
Realized tax benefits from tax deductions	7.4		4.3		3.3

Summary of stock appreciation rights activity

A summary of our stock appreciation rights as of December 31, 2014, and changes during the year then ended, is presented below (in millions, except per share data):

	Shares		Weighted-Average Exercise Price per Share
Outstanding stock appreciation rights as of December 31, 2013	1.8		$	45.58
Granted	0.2		92.64
Exercised	(0.5	)	35.91
Forfeited	—		—
Outstanding stock appreciation rights as of December 31, 2014	1.5		$	56.20
Exercisable stock appreciation rights as of December 31, 2014	1.0		$	43.65

Summary of stock appreciation rights outstanding

The following table summarizes information about stock appreciation rights outstanding as of December 31, 2014 (in millions, except per share data and years):

	Stock Appreciation Rights Outstanding				Stock Appreciation Rights Exercisable
Range of Exercise Prices	Shares	Weighted-Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value		Shares	Weighted-Average Remaining Contractual Life (in years)	Aggregate Intrinsic Value
$28.24 to $36.94	0.5	3.1	$	33.2	0.5	3.1	$	33.2
$46.78 to $51.40	0.5	4.3	$	22.3	0.4	4.1	$	17.6
$81.11 to $92.64	0.5	6.5	$	4.1	0.1	6.0	$	1.2

The Schedule of total intrinsic value of stock appreciation rights exercised

The total intrinsic value of stock appreciation rights exercised and the resulting tax deductions to realize tax benefits were as follows (in millions):

	For the Years Ended December 31,
	2014		2013		2012
Intrinsic value of stock appreciation rights exercised	$	27.3	$	16.7	$	14.4
Realized tax benefits from tax deductions	$	10.4	$	6.4	$	5.5

Performance Shares [Member]

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Summary of stock appreciation rights

The following table provides information on our performance share units:

	For the Years Ended December 31,
	2014			2013			2012
Compensation expense for performance share units (in millions)	$	11.5		$	17.1		$	5.7
Weighted-average fair value of grants, per share	$	88.26		$	78.00		$	48.64
Payout ratio for shares paid	153.2		%	86.9		%	52.5		%

Restricted Stock Units (RSUs) [Member]

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Summary of stock appreciation rights

The following table provides information on our restricted stock units (in millions, except per share data):

	For the Years Ended December 31,
	2014		2013		2012
Compensation expense for restricted stock units	$	7.0	$	6.8	$	5.0
Weighted-average fair value of grants, per share	$	88.26	$	77.26	$	48.45

Stock Appreciation Rights (SARs) [Member]

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Summary of stock appreciation rights

The following table provides information on our stock appreciation rights (in millions, except per share data):

	For the Years Ended December 31,
	2014		2013		2012
Compensation expense for stock appreciation rights	$	4.8	$	5.4	$	4.5
Weighted-average fair value of grants, per share	19.55		18.76		14.34

Schedule of Assumptions Used [Table Text Block]

The fair value of the stock appreciation rights granted in 2014, 2013 and 2012 were estimated on the date of grant using the following assumptions:

	2014		2013		2012
Expected dividend yield	1.75	%	1.36	%	1.75	%
Risk-free interest rate	1.27	%	1.12	%	0.48	%
Expected volatility	29.60	%	31.50	%	40.42	%
Expected life (in years)	4.04		4.02		4.14

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Nature of Operations

12 Months Ended

Dec. 31, 2014

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Nature of Operations

Nature of Operations:

Lennox International Inc., a Delaware corporation, through its subsidiaries (referred to herein as "we," "our," "us," "LII," or the "Company"), is a leading global provider of climate control solutions. We design, manufacture, market and service a broad range of products for the heating, ventilation, air conditioning and refrigeration ("HVACR") markets and sell our products and services through a combination of direct sales, distributors and company-owned parts and supplies stores. We operate in three reportable business segments: Residential Heating & Cooling, Commercial Heating & Cooling, and Refrigeration. See Note 19 for financial information regarding our reportable segments.

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Reportable Business Segments (Details 1) (USD $) In Millions, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2014		Dec. 31, 2013		Dec. 31, 2012
Net Sales
Net Sales	$ 812.8	$ 898.4	$ 960.7	$ 695.4	$ 749.5	$ 868.0	$ 913.1	$ 668.4	$ 3,367.4	[1]	$ 3,199.1	[1]	$ 2,949.4	[1]
Segment Profit (Loss)
Subtotal that includes segment profit and eliminations									340.9	[2]	300.5	[2]	224.2	[2]
Reconciliation to income from continuing operations before income taxes:
Special product quality adjustment									(1.4)		(2.3)		1.1
Items in (Gains) losses and other expenses, net that are excluded from segment profit									4.7	[3]	8.8	[3]	(0.2)	[3]
Restructuring charges	0.6	1.0			1.8		2.4		1.9		5.0		4.2
Interest expense, net									17.2		14.5		17.1
Special inventory write down									1.0		0		0
Other expense, net									(0.1)		0.2		0.3
Income from continuing operations before income taxes									317.6		274.3		201.7
Residential Heating & Cooling [Member]
Net Sales
Net Sales									1,736.5	[1]	1,583.2	[1]	1,375.8	[1]
Segment Profit (Loss)
Subtotal that includes segment profit and eliminations									235.8	[2]	180.1	[2]	102.9	[2]
Commercial Heating & Cooling [Member]
Net Sales
Net Sales									878.5	[1]	844.4	[1]	785.4	[1]
Segment Profit (Loss)
Subtotal that includes segment profit and eliminations									124.0	[2]	118.1	[2]	99.5	[2]
Refrigeration [Member]
Net Sales
Net Sales									752.4	[1]	771.5	[1]	788.2	[1]
Segment Profit (Loss)
Subtotal that includes segment profit and eliminations									55.4	[2]	90.2	[2]	81.9	[2]
Corporate & other [Member]
Segment Profit (Loss)
Subtotal that includes segment profit and eliminations									$ (74.3)	[2]	$ (87.9)	[2]	$ (60.1)	[2]

[1] On a consolidated basis, no revenue from transactions with a single customer were 10% or greater of our consolidated net sales for any of the periods presented.

[2] {F|ahBzfndlYmZpbGluZ3MtaHJkcmoLEgZYTUxEb2MiXlhCUkxEb2NHZW5JbmZvOjliNTE5Yjk5NWZhYTRmM2VhODYwMDM3NWRhZGE1YmM5fFRleHRTZWxlY3Rpb246OTAyMDBCNTE1RjkxRkQyMUYzQkQ1QzQ4MjAzRUQyQTkM}

[3] .

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Comprehensive Income (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Cost of goods sold	$ (2,464.1)	$ (2,337.9)	$ (2,227.1)
Income tax expense	(109.5)	(94.4)	(66.7)
Discontinued operations	2.3	8.1	45.0
Reclassification out of Accumulated Other Comprehensive Income [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Total reclassifications from AOCI	(8.3)	32.3
Gains/(Losses) on cash flow hedges [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Income tax expense	2.0	1.5
Total reclassifications from AOCI	(3.8)	(2.7)
Defined Benefit Pension Plan Items [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Cost of goods sold	(6.9)	(9.5)
Income tax expense	2.4	3.4
Total reclassifications from AOCI	(4.5)	(6.1)
Foreign currency translation adjustments [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Discontinued operations	0	41.1
Commodity Contract [Member] | Gains/(Losses) on cash flow hedges [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Cost of goods sold	$ (5.8)	$ (4.2)

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Goodwill and Intangible Assets (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2014		Dec. 31, 2013
Goodwill
Goodwill, Beginning Balance	$ 216.8		$ 223.8
Acquisitions/(Dispositions)	0		0
Other	(7.4)	[1]	(7.0)
Goodwill, Ending Balance	209.4		216.8
Residential Heating & Cooling [Member]
Goodwill
Goodwill, Beginning Balance	26.1		26.1	[2]
Acquisitions/(Dispositions)	0		0
Other	0	[1]	0	[1]
Goodwill, Ending Balance	26.1		26.1
Commercial Heating & Cooling [Member]
Goodwill
Goodwill, Beginning Balance	64.6		63.8	[2]
Acquisitions/(Dispositions)	0		0
Other	(2.3)	[1]	0.8	[1]
Goodwill, Ending Balance	62.3		64.6
Refrigeration [Member]
Goodwill
Goodwill, Beginning Balance	126.1		133.9	[2]
Acquisitions/(Dispositions)	0		0
Other	(5.1)	[1]	(7.8)	[1]
Goodwill, Ending Balance	$ 121.0		$ 126.1

[1] Other consists of changes in foreign currency translation rates.

[2] The goodwill balances in the table above are presented net of accumulated impairment charges of $15.7 million, all of which relate to impairments in periods prior to 2012.

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Stock-Based Compensation (Details 10) (Stock Appreciation Rights [Member], USD $) In Millions, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Outstanding awards, shares	1.5	1.8
Exercisable, shares	1.0
$28.24 to $36.935 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Range of Exercise Prices per Share, lower range limit	$ 28.24
Range of Exercise Prices per Share, upper range limit	$ 36.94
Outstanding awards, shares	0.5
Outstanding awards, weighted-average remaining contractual term	4 years 3 months 20 days
Outstanding awards, aggregate intrinsic value	$ 22.3
Exercisable, shares	0.4
Exercisable, weighted-average remaining contractual term	4 years 1 month 5 days
Exercisable, aggregate intrinsic value	17.6
$46.78 to $51.395 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Range of Exercise Prices per Share, lower range limit	$ 46.78
Range of Exercise Prices per Share, upper range limit	$ 51.40
Outstanding awards, shares	0.5
Outstanding awards, weighted-average remaining contractual term	6 years 6 months 0 days
Outstanding awards, aggregate intrinsic value	4.1
Exercisable, shares	0.1
Exercisable, weighted-average remaining contractual term	6 years 0 months 0 days
Exercisable, aggregate intrinsic value	1.2
$81.105 to $81.14 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Range of Exercise Prices per Share, lower range limit	$ 81.105
Range of Exercise Prices per Share, upper range limit	$ 92.64
Outstanding awards, shares	0.5
Outstanding awards, weighted-average remaining contractual term	3 years 1 month 5 days
Outstanding awards, aggregate intrinsic value	33.2
Exercisable, shares	0.5
Exercisable, weighted-average remaining contractual term	3 years 1 month 5 days
Exercisable, aggregate intrinsic value	$ 33.2

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Earnings Per Share (Details) (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Earnings Per Share [Abstract]
Net income	$ 44.6	$ 67.4	$ 73.9	$ 19.9	$ 35.2	$ 64.3	$ 64.3	$ 8.0	$ 205.8	$ 171.8	$ 90.0
Net loss from discontinued operations									2.3	8.1	45.0
Income from continuing operations									$ 208.1	$ 179.9	$ 135.0
Weighted-average shares outstanding - basic									47.9	49.8	50.7
Effect of diluted securities attributable to stock-based payments									0.7	0.8	0.7
Weighted-average shares outstanding - diluted									48.6	50.6	51.4
Earnings per share – Basic:
Income from continuing operations									$ 4.35	$ 3.61	$ 2.66
Loss from discontinued operations									$ (0.05)	$ (0.16)	$ (0.89)
Net income	$ 0.98	$ 1.40	$ 1.51	$ 0.41	$ 0.72	$ 1.29	$ 1.28	$ 0.16	$ 4.30	$ 3.45	$ 1.77
Earnings per share – Diluted:
Income from continuing operations									$ 4.28	$ 3.55	$ 2.63
Loss from discontinued operations									$ (0.05)	$ (0.16)	$ (0.88)
Net income	$ 0.96	$ 1.38	$ 1.49	$ 0.40	$ 0.70	$ 1.27	$ 1.26	$ 0.16	$ 4.23	$ 3.39	$ 1.75

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Commitments and Contingencies (Tables)

12 Months Ended

Dec. 31, 2014

Commitments and Contingencies Disclosure [Abstract]

Summary of approximate minimum commitments under all non-cancelable leases outstanding

Future annual minimum lease payments and capital lease commitments as of December 31, 2014 were as follows (in millions):

	Operating Leases		Capital Leases
2015	$	37.8	$	1.5
2016	29.4		0.8
2017	24.0		0.5
2018	18.5		0.3
2019	12.1		0.1
Thereafter	19.7		14.3
Total minimum lease payments	$	141.5	17.5
Less amount representing interest			(0.5		)
Present value of minimum payments			$	17.0

Summary of information related to our environmental reserve

Total environmental accruals are included in the following captions on the accompanying Consolidated Balance Sheets (in millions):

	As of December 31,
	2014		2013
Accrued expenses	$	1.7	$	1.4
Other liabilities	4.5		3.8
Total environmental accruals	$	6.2	$	5.2

Summary of changes in the total warranty liabilities

Total product warranty liabilities related to continuing operations are included in the following captions on the accompanying Consolidated Balance Sheets (in millions):

	As of December 31,
	2014		2013
Accrued expenses	$	27.3	$	28.7
Other liabilities	59.9		52.9
Total product warranty liabilities	$	87.2	$	81.6

The changes in product warranty liabilities related to continuing operations for the years ended December 31, 2014 and 2013 were as follows (in millions):

Total warranty liability as of December 31, 2012	$	71.9
Payments made in 2013	(21.3		)
Changes resulting from issuance of new warranties	29.6
Changes in estimates associated with pre-existing liabilities	1.6
Changes in foreign currency translation rates and other	(0.2		)
Total warranty liability as of December 31, 2013	$	81.6
Payments made in 2014	(23.1		)
Changes resulting from issuance of new warranties	33.4
Changes in estimates associated with pre-existing liabilities	(3.5		)
Changes in foreign currency translation rates and other	(1.2		)
Total warranty liability as of December 31, 2014	$	87.2

Self-insurance Liabilities

Total self-insurance liabilities were included in the following captions on the accompanying Consolidated Balance Sheets (in millions):

	As of December 31,
	2014		2013
Accrued expenses	$	13.0	$	13.4
Other liabilities	25.8		32.0
Total self-insurance liabilities	$	38.8	$	45.4

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Selected Quarterly Financial Information (unaudited)

12 Months Ended

Dec. 31, 2014

Quarterly Financial Information Disclosure [Abstract]

Selected Quarterly Financial Information (unaudited)

Quarterly Financial Information (unaudited):

The following tables provide information on Net sales, Gross profit, Net income, Earnings per share and Cash dividends declared per share by quarter (in millions, except per share data):

	Net Sales (1)				Gross Profit (1)				Net Income (Loss) (1)
	2014		2013		2014		2013		2014		2013
First Quarter	$	695.4	$	668.4	$	168.1	$	162.0	$	19.9	$	8.0
Second Quarter	960.7		913.1		262.6		254.0		73.9		64.3
Third Quarter	898.4		868.0		247.1		237.4		67.4		64.3
Fourth Quarter	812.8		749.5		225.4		207.7		44.6		35.2

	Basic Earnings (Loss) per Share (2)				Diluted Earnings (Loss) per Share (2)				Cash Dividends per Common Share
	2014		2013		2014		2013		2014		2013
First Quarter	$	0.41	$	0.16	$	0.40	$	0.16	$	0.24	$	0.20
Second Quarter	1.51		1.28		1.49		1.26		0.30		0.24
Third Quarter	1.40		1.29		1.38		1.27		0.30		0.24
Fourth Quarter	0.98		0.72		0.96		0.70		0.30		0.24

⁽¹⁾ The sum of the quarterly results for each of the four quarters may not equal the full year results due to rounding.

⁽²⁾ EPS for each quarter is computed using the weighted-average number of shares outstanding during that quarter, while EPS for the fiscal year is computed using the weighted-average number of shares outstanding during the year. Thus, the sum of the EPS for each of the four quarters may not equal the EPS for the fiscal year.

Summary of 2014 Quarterly Results

The following unusual or infrequent pre-tax items were included in the 2014 quarterly results:

1st Quarter. No significant unusual or infrequent items.

2nd Quarter. No significant unusual or infrequent items.

3rd Quarter. We recorded restructuring charges of $1 million for a new project to realign resources and enhance distribution capabilities. Refer to Note 16 for more information related to our restructuring activities.

4th Quarter. We recorded restructuring charges of $0.6 million for our project to realign resources and enhance distribution capabilities.

Summary of 2013 Quarterly Results

The following unusual or infrequent pre-tax items were included in the 2013 quarterly results:

1st Quarter. On March 22, 2013, we sold our Service Experts business to a majority-owned entity of American Capital, Ltd. in an all-cash transaction for net proceeds of $10.4 million, excluding transaction costs. We recorded a 1.4 million gain on the sale of the business for the year ended December 31, 2013. Refer to Note 17 for more information.

2nd Quarter. We recorded restructuring charges of $2.4 million primarily related to the completion of the transition activities with our North American Parts Center in Des Moines, Iowa. Refer to Note 16 for more information related to our restructuring activities.

3rd Quarter. We recorded legal contingency charges of $0.8 million associated with ongoing patent litigation. Refer to Note 10 for more information on our legal contingencies.

4th Quarter. We recorded expenses of $6.3 million for asbestos-related litigation. Refer to Note 10 for more information. We also recorded restructuring charges of $1.8 million primarily related to anticipated severance charges associated with a relocation of certain Residential Heating & Cooling manufacturing operations to lower cost facilities.

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Fair Value Measurements

12 Months Ended

Dec. 31, 2014

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements:

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date and requires consideration of our creditworthiness when valuing certain liabilities. Our framework for measuring fair value is based on the following three-level hierarchy for fair value measurements:

Level 1 -     Quoted prices for identical instruments in active markets at the measurement date.

Level 2 - Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets at the measurement date and for the anticipated term of the instrument.

Level 3 - Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable inputs that reflect the reporting entity's own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances.

Where available, the fair values were based upon quoted prices in active markets. However, if quoted prices were not available, then the fair values were based upon quoted prices for similar assets or liabilities or independently sourced market parameters, such as credit default swap spreads, yield curves, reported trades, broker/dealer quotes, interest rates and benchmark securities. For assets and liabilities without observable market activity, if any, the fair values were based upon discounted cash flow methodologies incorporating assumptions that, in our judgment, reflect the assumptions a marketplace participant would use. Valuation adjustments to reflect either party's creditworthiness and ability to pay were incorporated into our valuations, where appropriate, as of December 31, 2014 and 2013, the measurement dates. The methodologies used to determine the fair value of our financial assets and liabilities as of December 31, 2014 were the same as those used as of December 31, 2013.

Fair values are estimates and are not necessarily indicative of amounts for which we could settle such instruments currently nor indicative of our intent or ability to dispose of or liquidate them.

Assets and Liabilities Carried at Fair Value on a Recurring Basis

Derivatives

Derivatives, classified as Level 2, were primarily valued using estimated future cash flows based on observed prices from exchange-traded derivatives. We also considered the counterparty's creditworthiness, or our own creditworthiness, as appropriate. Adjustments were recorded to reflect the risk of credit default, but they were insignificant to the overall value of the derivatives. Refer to Note 8 for more information related to our derivative instruments.

Marketable Equity Securities

The following table presents the fair values of an investment in marketable equity securities, related to publicly traded stock of a non-U.S. company, recorded in Other assets, net in the accompanying Consolidated Balance Sheets (in millions):

	As of December 31,
	2014		2013
Quoted Prices in Active Markets for Identical Assets (Level 1):
Investment in marketable equity securities	$	5.3	$	4.4

Other Fair Value Disclosures

The carrying amounts of Cash and cash equivalents, Accounts and notes receivable, net, Accounts payable, Other current liabilities, and Short-term debt approximate fair value due to the short maturities of these instruments. The carrying amount of our Domestic Credit Facility in Long-term debt also approximates fair value due to its variable-rate characteristics.

The fair value of our senior unsecured notes in Long-term debt was based on the amount of future cash flows using current market rates for debt instruments of similar maturities and credit risk. The following table presents the fair value for our senior unsecured notes in Long-term debt (in millions):

	As of December 31,
	2014		2013
Quoted Prices in Active Markets for Similar Instruments (Level 2):
Senior unsecured notes	$	210.6	$	214.0

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Lines of Credit and Financing Arrangements Debt Repayments (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
debt repayments [Line Items]
Proceeds from (Repayments of) Debt	$ 18.1	$ 18.3	$ 18.5
debt repayments [Table Text Block]	16.6	16.3	18.3

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Condensed Consolidating Financial Statements (Tables)

12 Months Ended

Dec. 31, 2014

Condensed Consolidating Financial Statements [Abstract]

Condensed Balance Sheet

Condensed Consolidating Balance Sheets

As of December 31, 2014

(In millions)

	Parent			Guarantor Subsidiaries		Non- Guarantor Subsidiaries			Eliminations			Consolidated
ASSETS
Current Assets:
Cash and cash equivalents	$	1.0		$	11.5	$	25.0		$	—		$	37.5
Accounts and notes receivable, net	—			12.3		409.1			—			421.4
Inventories, net	—			350.6		119.7			(7.0		)	463.3
Deferred income taxes, net	2.8			27.3		7.4			(5.0		)	32.5
Other assets	3.6			45.7		67.2			(57.2		)	59.3
Total current assets	7.4			447.4		628.4			(69.2		)	1,014.0
Property, plant and equipment, net	—			269.0		89.6			—			358.6
Goodwill	—			140.4		69.0			—			209.4
Investment in subsidiaries	978.1			263.5		(0.6		)	(1,241.0		)	—
Deferred income taxes	0.5			90.8		15.8			(9.6		)	97.5
Other assets, net	5.2			61.0		20.1			(1.5		)	84.8
Intercompany receivables (payables), net	(280.4		)	302.4		(22.0		)	—			—
Total assets	$	710.8		$	1,574.5	$	800.3		$	(1,321.3	)	$	1,764.3
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Short-term debt	$	—		$	—	$	226.6		$	—		$	226.6
Current maturities of long-term debt	22.5			1.2		0.3			—			24.0
Accounts payable	13.4			237.8		73.1			—			324.3
Accrued expenses	9.0			175.5		54.5			—			239.0
Income taxes payable	(3.7		)	34.7		47.5			(65.1		)	13.4
Total current liabilities	41.2			449.2		402.0			(65.1		)	827.3
Long-term debt	659.5			15.3		0.2			—			675.0
Post-retirement benefits, other than pensions	—			4.5		—			—			4.5
Pensions	—			117.6		12.3			—			129.9
Other liabilities	1.1			118.7		11.7			(12.9		)	118.6
Total liabilities	701.8			705.3		426.2			(78.0		)	1,755.3
Commitments and contingencies
Total stockholders' equity	9.0			869.2		374.1			(1,243.3		)	9.0
Total liabilities and stockholders' equity	$	710.8		$	1,574.5	$	800.3		$	(1,321.3	)	$	1,764.3

Condensed Consolidating Balance Sheets

As of December 31, 2013

(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 Statement of Operations and Comprehensive Income

Condensed Consolidating Statements of Operations and Comprehensive Income

For the Year Ended December 31, 2014

(In millions)

	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Net Sales	$	—		$	2,775.7		$	818.0		$	(226.3	)	$	3,367.4
Cost of goods sold	—			2,057.8			628.3			(222.0		)	2,464.1
Gross profit	—			717.9			189.7			(4.3		)	903.3
Operating expenses:
Selling, general and administrative expenses	—			454.5			119.2			—			573.7
Losses and other expenses, net	—			3.2			3.6			—			6.8
Restructuring charges	—			0.4			1.5			—			1.9
Income from equity method investments	(216.4		)	(25.4		)	(11.3		)	239.3			(13.8		)
Operational income from continuing operations	216.4			285.2			76.7			(243.6		)	334.7
Interest expense, net	16.0			(3.0		)	4.2			—			17.2
Other expense, net	—			—			(0.1		)	—			(0.1		)
Income from continuing operations before income taxes	200.4			288.2			72.6			(243.6		)	317.6
Provision for income taxes	(5.6		)	91.7			24.9			(1.5		)	109.5
Income from continuing operations	206.0			196.5			47.7			(242.1		)	208.1
Loss from discontinued operations	—			—			(2.3		)	—			(2.3		)
Net income	$	206.0		$	196.5		$	45.4		$	(242.1	)	$	205.8
Other comprehensive loss	$	(4.1	)	$	(51.2	)	$	(34.8	)	$	(2.3	)	$	(92.4	)
Comprehensive Income	$	201.9		$	145.3		$	10.6		$	(244.4	)	$	113.4

Condensed Consolidating Statements of Operations and Comprehensive Income

For the Year Ended December 31, 2013

(In millions)

	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	2,557.9		$	837.0		$	(195.8	)	$	3,199.1
Cost of goods sold	—			1,900.9			632.8			(195.8		)	2,337.9
Gross profit	—			657.0			204.2			—			861.2
Operating expenses:
Selling, general and administrative expenses	—			437.1			133.0			—			570.1
Losses and other expenses, net	1.1			7.9			0.3			—			9.3
Restructuring charges	—			2.9			2.1			—			5.0
Income from equity method investments	(181.7		)	(26.4		)	(9.7		)	205.6			(12.2		)
Operational income from continuing operations	180.6			235.5			78.5			(205.6		)	289.0
Interest expense, net	14.0			(2.1		)	2.6			—			14.5
Other expense, net	—			—			0.2			—			0.2
Income from continuing operations before income taxes	166.6			237.6			75.7			(205.6		)	274.3
Provision for income taxes	(5.2		)	73.7			25.9			—			94.4
Income from continuing operations	171.8			163.9			49.8			(205.6		)	179.9
Loss from discontinued operations	—			—			(8.1		)	—			(8.1		)
Net income	$	171.8		$	163.9		$	41.7		$	(205.6	)	$	171.8
Other comprehensive loss	$	(38.8	)	$	36.3		$	(6.1	)	$	(30.2	)	$	(38.8	)
Comprehensive income	$	133.0		$	200.2		$	35.6		$	(235.8	)	$	133.0

Condensed Consolidating Statements of Operations and Comprehensive Income

For the Year Ended December 31, 2012

(In millions)

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net Sales	$	—		$	2,327.7		$	824.0		$	(202.3	)	$	2,949.4
Cost of goods sold	0.2			1,799.6			629.2			(201.9		)	2,227.1
Gross profit	(0.2		)	528.1			194.8			(0.4		)	722.3
Operating expenses:
Selling, general and administrative expenses	—			374.3			132.7			—			507.0
Losses and other expenses, net	(1.7		)	1.1			3.2			(0.1		)	2.5
Restructuring charges	—			2.8			1.4			—			4.2
Income from equity method investments	(116.3		)	(17.0		)	(7.8		)	130.6			(10.5		)
Operational income from continuing operations	117.8			166.9			65.3			(130.9		)	219.1
Interest expense, net	16.6			(2.4		)	2.9			—			17.1
Other expense, net	—			—			0.3			—			0.3
Income from continuing operations before income taxes	101.2			169.3			62.1			(130.9		)	201.7
Provision for income taxes	(4.9		)	50.5			21.2			(0.1		)	66.7
Income from continuing operations	106.1			118.8			40.9			(130.8		)	135.0
Loss from discontinued operations	—			(18.5		)	(26.5		)	—			(45.0		)
Net income	$	106.1		$	100.3		$	14.4		$	(130.8	)	$	90.0
Other comprehensive income	$	6.7		$	(2.8	)	$	5.2		$	5.7		$	14.8
Comprehensive Income	$	112.8		$	97.5		$	19.6		$	(125.1	)	$	104.8

Condensed Statements of Cash Flows

Condensed Consolidating Statements of Cash Flows

For the Year Ended December 31, 2014

(In millions)

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations		Consolidated
Cash flows from operating activities:	$	328.8		$	(97.2	)	$	(46.8	)	$	—	$	184.8
Cash flows from investing activities:
Proceeds from the disposal of property, plant and equipment	—			1.0			0.1			—		1.1
Purchases of property, plant and equipment	—			(70.5		)	(17.9		)	—		(88.4		)
Net cash used in investing activities	—			(69.5		)	(17.8		)	—		(87.3		)
Cash flows from financing activities:
Short-term borrowings, net	—			—			1.5			—		1.5
Asset securitization borrowings	—			—			100.0			—		100.0
Asset securitization payments	—			—			(40.0		)	—		(40.0		)
Term loan borrowings from credit facility	300.0			—			—			—		300.0
Long-term debt payments	—			(1.9		)	(0.4		)	—		(2.3		)
Borrowings from credit facility	2,073.5			—			—			—		2,073.5
Payments on credit facility	(1,908.5		)	—			—			—		(1,908.5		)
Payments of deferred financing costs	(2.2		)	—			—			—		(2.2		)
Proceeds from employee stock purchases	2.0			—			—			—		2.0
Repurchases of common stock	(550.3		)	—			—			—		(550.3		)
Repurchases of common stock to satisfy employee withholding tax obligations	(22.4		)	—			—			—		(22.4		)
Excess tax benefits related to share-based payments	11.8			—			—			—		11.8
Intercompany debt	(0.1		)	4.7			(4.6		)	—		—
Intercompany financing activity	(180.1		)	164.9			15.2			—		—
Cash dividends paid	(52.6		)	—			—			—		(52.6		)
Net cash provided by (used in) financing activities	(328.9		)	167.7			71.7			—		(89.5		)
Increase (decrease) in cash and cash equivalents	(0.1		)	1.0			7.1			—		8.0
Effect of exchange rates on cash and cash equivalents	—			—			(8.5		)	—		(8.5		)
Cash and cash equivalents, beginning of year	1.1			10.5			26.4			—		38.0
Cash and cash equivalents, end of year	$	1.0		$	11.5		$	25.0		$	—	$	37.5

Condensed Consolidating Statements of Cash Flows

For the Year Ended December 31, 2013

(In millions)

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations		Consolidated
Cash flows from operating activities:	$	(30.4	)	$	328.4		$	(87.7	)	$	—	$	210.3
Cash flows from investing activities:
Proceeds from the disposal of property, plant and equipment	—			2.4			—			—		2.4
Purchases of property, plant and equipment	—			(55.8		)	(22.5		)	—		(78.3		)
Net Proceeds from sale of business	5.3			—			3.3			—		8.6
Net cash used in investing activities	5.3			(53.4		)	(19.2		)	—		(67.3		)
Cash flows from financing activities:
Short-term borrowings, net	—			—			2.0			—		2.0
Asset securitization borrowings	—			—			330.0			—		330.0
Asset securitization payments	—			—			(200.0		)	—		(200.0		)
Long-term debt payments	—			(0.7		)	(0.3		)	—		(1.0		)
Borrowings from revolving credit facility	1,425.5			—			—			—		1,425.5
Payments on revolving credit facility	(1,543.5		)	—			—			—		(1,543.5		)
Proceeds from employee stock purchases	1.8			—			—			—		1.8
Additional investment in subsidiary	—			—			(0.5		)	—		(0.5		)
Repurchases of common stock	(125.0		)	—			—			—		(125.0		)
Repurchases of common stock to satisfy employee withholding tax obligations	(12.0		)	—			—			—		(12.0		)
Excess tax benefits related to share-based payments	6.5			—			—			—		6.5
Intercompany debt	(26.8		)	12.3			14.5			—		—
Intercompany financing activity	332.7			(289.5		)	(43.2		)	—		—
Cash dividends paid	(34.0		)	—			—			—		(34.0		)
Net cash provided by (used in) financing activities	25.2			(277.9		)	102.5			—		(150.2		)
Decrease in cash and cash equivalents	0.1			(2.9		)	(4.4		)	—		(7.2		)
Effect of exchange rates on cash and cash equivalents	—			—			(6.6		)	—		(6.6		)
Cash and cash equivalents, beginning of year	1.0			13.4			37.4			—		51.8
Cash and cash equivalents, end of year	$	1.1		$	10.5		$	26.4		$	—	$	38.0

Condensed Consolidating Statements of Cash Flows

For the Year Ended December 31, 2012

(In millions)

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations		Consolidated
Cash flows from operating activities:	$	20.7		$	207.3		$	(6.6	)	$	—	$	221.4
Cash flows from investing activities:
Proceeds from the disposal of property, plant and equipment	—			0.1			—			—		0.1
Purchases of property, plant and equipment	—			(37.7		)	(12.5		)	—		(50.2		)
Net proceeds from sale of business	—			10.1			—			—		10.1
Net cash used in discontinued operations	—			(0.5		)	0.1			—		(0.4		)
Net cash used in investing activities	—			(28.0		)	(12.4		)	—		(40.4		)
Cash flows from financing activities:
Short-term borrowings, net	—			—			0.2			—		0.2
Asset securitization borrowings	—			—			645.0			—		645.0
Asset securitization payments	—			—			(615.0		)	—		(615.0		)
Long-term debt payments	—			(0.7		)	(0.4		)	—		(1.1		)
Borrowings from revolving credit facility	967.0			—			—			—		967.0
Payments on revolving credit facility	(1,075.0		)	—			—			—		(1,075.0		)
Proceeds from stock option exercises	0.8			—			—			—		0.8
Repurchases of common stock	(50.1		)	—			—			—		(50.1		)
Repurchases of common stock to satisfy employee withholding tax obligations	(7.8		)	—			—			—		(7.8		)
Excess tax benefits related to share-based payments	3.5			—			—			—		3.5
Intercompany debt	2.4			(4.0		)	1.6			—		—
Intercompany financing activity	186.1			(170.9		)	(15.2		)	—		—
Cash dividends paid	(47.6		)	—			—			—		(47.6		)
Net cash provided by (used in) financing activities	(20.7		)	(175.6		)	16.2			—		(180.1		)
Increase (decrease) in cash and cash equivalents	—			3.7			(2.8		)	—		0.9
Effect of exchange rates on cash and cash equivalents	—			—			5.9			—		5.9
Cash and cash equivalents, beginning of year	1.0			9.7			34.3			—		45.0
Cash and cash equivalents, end of year	$	1.0		$	13.4		$	37.4		$	—	$	51.8

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Lines of Credit and Financing Arrangements (Tables)

12 Months Ended

Dec. 31, 2014

Debt Disclosure [Abstract]

Outstanding debt obligations

The following tables summarize our outstanding debt obligations and the classification in the accompanying Consolidated Balance Sheets (in millions):

	As of December 31,
	2014		2013
Short-Term Debt:
Asset Securitization Program	$	220.0	$	160.0
Foreign obligations	6.6		5.9
Total short-term debt	$	226.6	$	165.9
Current maturities of long-term debt:
Capital lease obligations	$	1.5	$	1.3
Domestic credit facility	$	22.5	$	—
Long-Term Debt:
Capital lease obligations	$	15.5	$	16.2
Domestic credit facility	459.5		17.0
Senior unsecured notes	200.0		200.0
Total long-term debt	$	675.0	$	233.2
Total debt	$	925.6	$	400.4

Aggregate principal amount of long-term debt

As of December 31, 2014, the aggregate amounts of required principal payments on total debt were as follows (in millions):

2015	$	250.6
2016	31.2
2017	230.0
2018	32.6
2019	369.5
Thereafter	11.7

Eligible amounts available and beneficial interests sold

The eligible amounts available and beneficial interests sold were as follows (in millions):

	As of December 31,
	2014		2013
Eligible amount available under the ASP on qualified accounts receivable	$	220.0	$	160.0
Beneficial interest sold	220.0		160.0
Remaining amount available	$	—	$	—

Summary of weighted average borrowing rate facility

Our weighted average borrowing rate on the facility was as follows:

	As of December 31,
	2014		2013
Weighted average borrowing rate	1.88	%	1.17	%

Financial Covenants, Leverage and Interest Coverage

The required ratios under our Domestic Credit Facility are detailed below:

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

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Losses and Other Expenses, net (Notes)

12 Months Ended

Dec. 31, 2014

Losses (Gains) and Other Expenses, net [Abstract]

Losses and Other Expenses, net

Losses and Other Expenses, net:

Losses and other expenses, net in our Consolidated Statements of Operations were as follows (in millions):

	For the Years Ended December 31,
	2014			2013			2012
Realized losses on settled futures contracts	$	0.8		$	1.0		$	1.5
Foreign currency exchange losses	1.6			0.5			0.8
Losses (gains) on disposal of fixed assets	(0.3		)	(1.0		)	0.4
Net change in unrealized losses (gains) on unsettled futures contracts	0.6			0.4			(2.2		)
Asbestos-related litigation	0.9			6.3			—
Acquisition expenses	—			0.2			0.1
Special legal contingency charges	0.9			1.2			1.2
Environmental liabilities	2.0			—			—
Other items, net	0.3			0.7			0.7
Losses and other expenses, net	$	6.8		$	9.3		$	2.5

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Supplemental Information (Notes)

12 Months Ended

Dec. 31, 2014

Supplemental Information [Abstract]

Supplemental Information

Supplemental Information:

Below is information about expenses included in our Consolidated Statements of Operations (in millions):

	For the Years Ended December 31,
	2014		2013		2012
Research and development (1)	$	60.7	$	53.7	$	50.7
Advertising, promotions and marketing (2)	41.9		45.2		59.4
Cooperative advertising expenditures (3)	13.1		10.9		9.5
Rent expense (4)	50.5		53.5		67.8

⁽¹⁾ Includes research and development costs related to discontinued operations of $1.2 million for the year ended December 31, 2012. No research and development costs related to discontinued operations were recorded for the years ended December 31, 2014 and 2013 .

⁽²⁾ Includes advertising, promotions and marketing costs related to discontinued operations of $4.1 million and $20.1 million for the years ended December 31, 2013 and 2012, respectively. No advertising costs related to discontinued operations were recorded for the year ended December 31, 2014. Cooperative advertising expenditures were not included in these amounts.

⁽³⁾ Cooperative advertising expenditures were included in Selling, general and administrative expenses in the Consolidated Statements of Operations.

⁽⁴⁾ Includes rent expense related to discontinued operations of $4.5 million and $20.1 million for the years ended December 31, 2013 and 2012, respectively. No rent costs related to discontinued operations were recorded for the year ended December 31, 2014.

Interest Expense, net

The components of Interest expense, net in our Consolidated Statements of Operations were as follows (in millions):

	For the Years Ended December 31,
	2014		2013		2012
Interest expense, net of capitalized interest	$	18.9	$	16.5	$	18.9
Interest income	1.7		2.0		1.8
Interest expense, net	$	17.2	$	14.5	$	17.1

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Consolidated Statements of Stockholders' Equity (Parenthetical) (USD $) In Millions, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Dividends per share	$ 1.14	$ 0.92	$ 0.76
Retained Earnings [Member]
Dividends per share	$ 1.14	$ 0.92	$ 0.76
Accumulated Other Comprehensive Income (Loss) [Member]
Benefit for tax, pension and postretirement liability changes	$ 25.6	$ (24.7)	$ 2.7
Provision for tax, derivatives	$ (2.3)	$ (1.0)	$ 4.8

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Condensed Consolidating Financial Statements

12 Months Ended

Dec. 31, 2014

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 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 December 31, 2014, the U.S. and Canada Service Experts businesses were 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. 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 December 31, 2014 and December 31, 2013 and for the years ended December 31, 2014, 2013 and 2012 are shown on the following pages.

Condensed Consolidating Balance Sheets

As of December 31, 2014

(In millions)

	Parent			Guarantor Subsidiaries		Non- Guarantor Subsidiaries			Eliminations			Consolidated
ASSETS
Current Assets:
Cash and cash equivalents	$	1.0		$	11.5	$	25.0		$	—		$	37.5
Accounts and notes receivable, net	—			12.3		409.1			—			421.4
Inventories, net	—			350.6		119.7			(7.0		)	463.3
Deferred income taxes, net	2.8			27.3		7.4			(5.0		)	32.5
Other assets	3.6			45.7		67.2			(57.2		)	59.3
Total current assets	7.4			447.4		628.4			(69.2		)	1,014.0
Property, plant and equipment, net	—			269.0		89.6			—			358.6
Goodwill	—			140.4		69.0			—			209.4
Investment in subsidiaries	978.1			263.5		(0.6		)	(1,241.0		)	—
Deferred income taxes	0.5			90.8		15.8			(9.6		)	97.5
Other assets, net	5.2			61.0		20.1			(1.5		)	84.8
Intercompany receivables (payables), net	(280.4		)	302.4		(22.0		)	—			—
Total assets	$	710.8		$	1,574.5	$	800.3		$	(1,321.3	)	$	1,764.3
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Short-term debt	$	—		$	—	$	226.6		$	—		$	226.6
Current maturities of long-term debt	22.5			1.2		0.3			—			24.0
Accounts payable	13.4			237.8		73.1			—			324.3
Accrued expenses	9.0			175.5		54.5			—			239.0
Income taxes payable	(3.7		)	34.7		47.5			(65.1		)	13.4
Total current liabilities	41.2			449.2		402.0			(65.1		)	827.3
Long-term debt	659.5			15.3		0.2			—			675.0
Post-retirement benefits, other than pensions	—			4.5		—			—			4.5
Pensions	—			117.6		12.3			—			129.9
Other liabilities	1.1			118.7		11.7			(12.9		)	118.6
Total liabilities	701.8			705.3		426.2			(78.0		)	1,755.3
Commitments and contingencies
Total stockholders' equity	9.0			869.2		374.1			(1,243.3		)	9.0
Total liabilities and stockholders' equity	$	710.8		$	1,574.5	$	800.3		$	(1,321.3	)	$	1,764.3

Condensed Consolidating Balance Sheets

As of December 31, 2013

(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

For the Year Ended December 31, 2014

(In millions)

	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Net Sales	$	—		$	2,775.7		$	818.0		$	(226.3	)	$	3,367.4
Cost of goods sold	—			2,057.8			628.3			(222.0		)	2,464.1
Gross profit	—			717.9			189.7			(4.3		)	903.3
Operating expenses:
Selling, general and administrative expenses	—			454.5			119.2			—			573.7
Losses and other expenses, net	—			3.2			3.6			—			6.8
Restructuring charges	—			0.4			1.5			—			1.9
Income from equity method investments	(216.4		)	(25.4		)	(11.3		)	239.3			(13.8		)
Operational income from continuing operations	216.4			285.2			76.7			(243.6		)	334.7
Interest expense, net	16.0			(3.0		)	4.2			—			17.2
Other expense, net	—			—			(0.1		)	—			(0.1		)
Income from continuing operations before income taxes	200.4			288.2			72.6			(243.6		)	317.6
Provision for income taxes	(5.6		)	91.7			24.9			(1.5		)	109.5
Income from continuing operations	206.0			196.5			47.7			(242.1		)	208.1
Loss from discontinued operations	—			—			(2.3		)	—			(2.3		)
Net income	$	206.0		$	196.5		$	45.4		$	(242.1	)	$	205.8
Other comprehensive loss	$	(4.1	)	$	(51.2	)	$	(34.8	)	$	(2.3	)	$	(92.4	)
Comprehensive Income	$	201.9		$	145.3		$	10.6		$	(244.4	)	$	113.4

Condensed Consolidating Statements of Operations and Comprehensive Income

For the Year Ended December 31, 2013

(In millions)

	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	2,557.9		$	837.0		$	(195.8	)	$	3,199.1
Cost of goods sold	—			1,900.9			632.8			(195.8		)	2,337.9
Gross profit	—			657.0			204.2			—			861.2
Operating expenses:
Selling, general and administrative expenses	—			437.1			133.0			—			570.1
Losses and other expenses, net	1.1			7.9			0.3			—			9.3
Restructuring charges	—			2.9			2.1			—			5.0
Income from equity method investments	(181.7		)	(26.4		)	(9.7		)	205.6			(12.2		)
Operational income from continuing operations	180.6			235.5			78.5			(205.6		)	289.0
Interest expense, net	14.0			(2.1		)	2.6			—			14.5
Other expense, net	—			—			0.2			—			0.2
Income from continuing operations before income taxes	166.6			237.6			75.7			(205.6		)	274.3
Provision for income taxes	(5.2		)	73.7			25.9			—			94.4
Income from continuing operations	171.8			163.9			49.8			(205.6		)	179.9
Loss from discontinued operations	—			—			(8.1		)	—			(8.1		)
Net income	$	171.8		$	163.9		$	41.7		$	(205.6	)	$	171.8
Other comprehensive loss	$	(38.8	)	$	36.3		$	(6.1	)	$	(30.2	)	$	(38.8	)
Comprehensive income	$	133.0		$	200.2		$	35.6		$	(235.8	)	$	133.0

Condensed Consolidating Statements of Operations and Comprehensive Income

For the Year Ended December 31, 2012

(In millions)

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net Sales	$	—		$	2,327.7		$	824.0		$	(202.3	)	$	2,949.4
Cost of goods sold	0.2			1,799.6			629.2			(201.9		)	2,227.1
Gross profit	(0.2		)	528.1			194.8			(0.4		)	722.3
Operating expenses:
Selling, general and administrative expenses	—			374.3			132.7			—			507.0
Losses and other expenses, net	(1.7		)	1.1			3.2			(0.1		)	2.5
Restructuring charges	—			2.8			1.4			—			4.2
Income from equity method investments	(116.3		)	(17.0		)	(7.8		)	130.6			(10.5		)
Operational income from continuing operations	117.8			166.9			65.3			(130.9		)	219.1
Interest expense, net	16.6			(2.4		)	2.9			—			17.1
Other expense, net	—			—			0.3			—			0.3
Income from continuing operations before income taxes	101.2			169.3			62.1			(130.9		)	201.7
Provision for income taxes	(4.9		)	50.5			21.2			(0.1		)	66.7
Income from continuing operations	106.1			118.8			40.9			(130.8		)	135.0
Loss from discontinued operations	—			(18.5		)	(26.5		)	—			(45.0		)
Net income	$	106.1		$	100.3		$	14.4		$	(130.8	)	$	90.0
Other comprehensive income	$	6.7		$	(2.8	)	$	5.2		$	5.7		$	14.8
Comprehensive Income	$	112.8		$	97.5		$	19.6		$	(125.1	)	$	104.8

Condensed Consolidating Statements of Cash Flows

For the Year Ended December 31, 2014

(In millions)

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations		Consolidated
Cash flows from operating activities:	$	328.8		$	(97.2	)	$	(46.8	)	$	—	$	184.8
Cash flows from investing activities:
Proceeds from the disposal of property, plant and equipment	—			1.0			0.1			—		1.1
Purchases of property, plant and equipment	—			(70.5		)	(17.9		)	—		(88.4		)
Net cash used in investing activities	—			(69.5		)	(17.8		)	—		(87.3		)
Cash flows from financing activities:
Short-term borrowings, net	—			—			1.5			—		1.5
Asset securitization borrowings	—			—			100.0			—		100.0
Asset securitization payments	—			—			(40.0		)	—		(40.0		)
Term loan borrowings from credit facility	300.0			—			—			—		300.0
Long-term debt payments	—			(1.9		)	(0.4		)	—		(2.3		)
Borrowings from credit facility	2,073.5			—			—			—		2,073.5
Payments on credit facility	(1,908.5		)	—			—			—		(1,908.5		)
Payments of deferred financing costs	(2.2		)	—			—			—		(2.2		)
Proceeds from employee stock purchases	2.0			—			—			—		2.0
Repurchases of common stock	(550.3		)	—			—			—		(550.3		)
Repurchases of common stock to satisfy employee withholding tax obligations	(22.4		)	—			—			—		(22.4		)
Excess tax benefits related to share-based payments	11.8			—			—			—		11.8
Intercompany debt	(0.1		)	4.7			(4.6		)	—		—
Intercompany financing activity	(180.1		)	164.9			15.2			—		—
Cash dividends paid	(52.6		)	—			—			—		(52.6		)
Net cash provided by (used in) financing activities	(328.9		)	167.7			71.7			—		(89.5		)
Increase (decrease) in cash and cash equivalents	(0.1		)	1.0			7.1			—		8.0
Effect of exchange rates on cash and cash equivalents	—			—			(8.5		)	—		(8.5		)
Cash and cash equivalents, beginning of year	1.1			10.5			26.4			—		38.0
Cash and cash equivalents, end of year	$	1.0		$	11.5		$	25.0		$	—	$	37.5

Condensed Consolidating Statements of Cash Flows

For the Year Ended December 31, 2013

(In millions)

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations		Consolidated
Cash flows from operating activities:	$	(30.4	)	$	328.4		$	(87.7	)	$	—	$	210.3
Cash flows from investing activities:
Proceeds from the disposal of property, plant and equipment	—			2.4			—			—		2.4
Purchases of property, plant and equipment	—			(55.8		)	(22.5		)	—		(78.3		)
Net Proceeds from sale of business	5.3			—			3.3			—		8.6
Net cash used in investing activities	5.3			(53.4		)	(19.2		)	—		(67.3		)
Cash flows from financing activities:
Short-term borrowings, net	—			—			2.0			—		2.0
Asset securitization borrowings	—			—			330.0			—		330.0
Asset securitization payments	—			—			(200.0		)	—		(200.0		)
Long-term debt payments	—			(0.7		)	(0.3		)	—		(1.0		)
Borrowings from revolving credit facility	1,425.5			—			—			—		1,425.5
Payments on revolving credit facility	(1,543.5		)	—			—			—		(1,543.5		)
Proceeds from employee stock purchases	1.8			—			—			—		1.8
Additional investment in subsidiary	—			—			(0.5		)	—		(0.5		)
Repurchases of common stock	(125.0		)	—			—			—		(125.0		)
Repurchases of common stock to satisfy employee withholding tax obligations	(12.0		)	—			—			—		(12.0		)
Excess tax benefits related to share-based payments	6.5			—			—			—		6.5
Intercompany debt	(26.8		)	12.3			14.5			—		—
Intercompany financing activity	332.7			(289.5		)	(43.2		)	—		—
Cash dividends paid	(34.0		)	—			—			—		(34.0		)
Net cash provided by (used in) financing activities	25.2			(277.9		)	102.5			—		(150.2		)
Decrease in cash and cash equivalents	0.1			(2.9		)	(4.4		)	—		(7.2		)
Effect of exchange rates on cash and cash equivalents	—			—			(6.6		)	—		(6.6		)
Cash and cash equivalents, beginning of year	1.0			13.4			37.4			—		51.8
Cash and cash equivalents, end of year	$	1.1		$	10.5		$	26.4		$	—	$	38.0

Condensed Consolidating Statements of Cash Flows

For the Year Ended December 31, 2012

(In millions)

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations		Consolidated
Cash flows from operating activities:	$	20.7		$	207.3		$	(6.6	)	$	—	$	221.4
Cash flows from investing activities:
Proceeds from the disposal of property, plant and equipment	—			0.1			—			—		0.1
Purchases of property, plant and equipment	—			(37.7		)	(12.5		)	—		(50.2		)
Net proceeds from sale of business	—			10.1			—			—		10.1
Net cash used in discontinued operations	—			(0.5		)	0.1			—		(0.4		)
Net cash used in investing activities	—			(28.0		)	(12.4		)	—		(40.4		)
Cash flows from financing activities:
Short-term borrowings, net	—			—			0.2			—		0.2
Asset securitization borrowings	—			—			645.0			—		645.0
Asset securitization payments	—			—			(615.0		)	—		(615.0		)
Long-term debt payments	—			(0.7		)	(0.4		)	—		(1.1		)
Borrowings from revolving credit facility	967.0			—			—			—		967.0
Payments on revolving credit facility	(1,075.0		)	—			—			—		(1,075.0		)
Proceeds from stock option exercises	0.8			—			—			—		0.8
Repurchases of common stock	(50.1		)	—			—			—		(50.1		)
Repurchases of common stock to satisfy employee withholding tax obligations	(7.8		)	—			—			—		(7.8		)
Excess tax benefits related to share-based payments	3.5			—			—			—		3.5
Intercompany debt	2.4			(4.0		)	1.6			—		—
Intercompany financing activity	186.1			(170.9		)	(15.2		)	—		—
Cash dividends paid	(47.6		)	—			—			—		(47.6		)
Net cash provided by (used in) financing activities	(20.7		)	(175.6		)	16.2			—		(180.1		)
Increase (decrease) in cash and cash equivalents	—			3.7			(2.8		)	—		0.9
Effect of exchange rates on cash and cash equivalents	—			—			5.9			—		5.9
Cash and cash equivalents, beginning of year	1.0			9.7			34.3			—		45.0
Cash and cash equivalents, end of year	$	1.0		$	13.4		$	37.4		$	—	$	51.8

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Income Taxes (Details 4) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Reconciliation of the beginning and ending amount of unrecognized tax benefits
Beginning Balance	$ 1.7	$ 1.0
Increases related to prior year tax positions	0.7	0.7
Decreases related to prior year tax positions	(0.7)	(0.1)
Increases related to current year tax positions	0	0.1
Settlement	(0.1)
Ending Balance	$ 1.6	$ 1.7

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Employee Benefit Plans (Details 13) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2014		Dec. 31, 2013
Assets Category:
Fair value	$ 315.0		$ 302.8
NAV [Member]
Assets Category:
Fair value	309.2		294.6
Commingled Pools / Collective Trusts [Member] | U.S. Equity [Member]
Assets Category:
Fair value	78.0	[1]	100.1	[1]
Redemption Frequency (if currently eligible)	Daily	[2]	Daily	[2]
Redemption Notice Period	5 days	[2]	5 days	[2]
Commingled Pools / Collective Trusts [Member] | International Equity [Member]
Assets Category:
Fair value	47.3	[1]	70.8	[1]
Redemption Frequency (if currently eligible)	Daily	[1]	Daily	[1]
Redemption Notice Period	5 days	[1]	5 days	[1]
Commingled Pools / Collective Trusts [Member] | Fixed income [Member]
Assets Category:
Fair value	145.4	[3]	89.4	[3]
Redemption Frequency (if currently eligible)	Daily	[3]	Daily	[3]
Balanced pension trusts [Member] | International Equity [Member]
Assets Category:
Fair value	4.7	[4]	10.8	[4]
Redemption Frequency (if currently eligible)	Daily	[4]	Daily	[4]
Balanced pension trusts [Member] | Fixed income [Member]
Assets Category:
Fair value	14.2	[4]	7.2	[4]
Redemption Frequency (if currently eligible)	Daily	[4]	Daily	[4]
Pension Funds [Member] | International Equity [Member]
Assets Category:
Fair value	11.4	[5]	9.4	[5]
Redemption Frequency (if currently eligible)	Daily	[5]	Daily	[5]
Redemption Notice Period			7 days	[4]
Pension Funds [Member] | Fixed income [Member]
Assets Category:
Fair value	$ 8.2	[6]	$ 6.9	[6]
Redemption Frequency (if currently eligible)	Daily	[6]	Daily	[6]
Redemption Notice Period			7 days	[4]
Minimum [Member] | Commingled Pools / Collective Trusts [Member] | Fixed income [Member]
Assets Category:
Redemption Notice Period	5 days		5 days
Minimum [Member] | Balanced pension trusts [Member] | International Equity [Member]
Assets Category:
Redemption Notice Period	3 days		3 days
Minimum [Member] | Balanced pension trusts [Member] | Fixed income [Member]
Assets Category:
Redemption Notice Period	3 days		3 days
Minimum [Member] | Pension Funds [Member] | International Equity [Member]
Assets Category:
Redemption Notice Period	1 day
Minimum [Member] | Pension Funds [Member] | Fixed income [Member]
Assets Category:
Redemption Notice Period	1 day
Maximum [Member] | Commingled Pools / Collective Trusts [Member] | Fixed income [Member]
Assets Category:
Redemption Notice Period	15 days		15 days
Maximum [Member] | Balanced pension trusts [Member] | International Equity [Member]
Assets Category:
Redemption Notice Period	5 days		5 days
Maximum [Member] | Balanced pension trusts [Member] | Fixed income [Member]
Assets Category:
Redemption Notice Period	5 days		5 days
Maximum [Member] | Pension Funds [Member] | International Equity [Member]
Assets Category:
Redemption Notice Period	7 days
Maximum [Member] | Pension Funds [Member] | Fixed income [Member]
Assets Category:
Redemption Notice Period	7 days

[1] This category includes investments primarily in international equity securities that include large, mid and small capitalization companies in large developed markets as well as emerging markets equities.

[2] This category includes investments primarily in U.S. equity securities that include large, mid and small capitalization companies.

[3] This category includes investments in U.S. investment grade and high yield fixed income securities, international fixed income securities and emerging markets fixed income securities.

[4] The investment objectives of the fund are to provide long-term capital growth and income by investing primarily in a well-diversified, balanced portfolio of Canadian common stocks, bonds and money market securities. The fund also holds a portion of its assets in international equities.

[5] This category includes investments in international equity securities and aims to provide returns consistent with the markets in which it invests and provide broad exposure to countries around the world.

[6] This category includes investments in U.K. government index-linked securities (index-linked gilts) that have maturity periods of 5 years or longer and investment grade corporate bonds denominated in sterling.

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Accrued Expenses (Tables)

12 Months Ended

Dec. 31, 2014

Payables and Accruals [Abstract]

Components of accrued expenses

The significant components of Accrued expenses are presented below (in millions):

	As of December 31,
	2014		2013
Accrued compensation and benefits	$	73.3	$	85.7
Self insurance reserves	13.0		13.4
Deferred income	11.6		9.8
Accrued warranties	27.3		28.7
Accrued product quality reserves	4.2		3.4
Accrued Sales, Use and VAT taxes	8.7		7.1
Accrued rebates and promotions	45.4		37.0
Derivative contracts	7.4		1.5
Other	48.1		45.5
Total Accrued expenses	$	239.0	$	232.1

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Selected Quarterly Financial Information (unaudited) (Tables)

12 Months Ended

Dec. 31, 2014

Quarterly Financial Information Disclosure [Abstract]

Summary of information on net sales, gross profit, net income, earnings per share and dividends per share

The following tables provide information on Net sales, Gross profit, Net income, Earnings per share and Cash dividends declared per share by quarter (in millions, except per share data):

	Net Sales (1)				Gross Profit (1)				Net Income (Loss) (1)
	2014		2013		2014		2013		2014		2013
First Quarter	$	695.4	$	668.4	$	168.1	$	162.0	$	19.9	$	8.0
Second Quarter	960.7		913.1		262.6		254.0		73.9		64.3
Third Quarter	898.4		868.0		247.1		237.4		67.4		64.3
Fourth Quarter	812.8		749.5		225.4		207.7		44.6		35.2

	Basic Earnings (Loss) per Share (2)				Diluted Earnings (Loss) per Share (2)				Cash Dividends per Common Share
	2014		2013		2014		2013		2014		2013
First Quarter	$	0.41	$	0.16	$	0.40	$	0.16	$	0.24	$	0.20
Second Quarter	1.51		1.28		1.49		1.26		0.30		0.24
Third Quarter	1.40		1.29		1.38		1.27		0.30		0.24
Fourth Quarter	0.98		0.72		0.96		0.70		0.30		0.24

⁽¹⁾ The sum of the quarterly results for each of the four quarters may not equal the full year results due to rounding.

⁽²⁾ EPS for each quarter is computed using the weighted-average number of shares outstanding during that quarter, while EPS for the fiscal year is computed using the weighted-average number of shares outstanding during the year. Thus, the sum of the EPS for each of the four quarters may not equal the EPS for the fiscal year.

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Accrued Expenses (Details) (USD $) In Millions, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Payables and Accruals [Abstract]
Accrued compensation and benefits	$ 73.3	$ 85.7
Self insurance reserves	13.0	13.4
Deferred income	11.6	9.8
Accrued warranties	27.3	28.7
Accrued product quality issue	4.2	3.4
Accrued Sales, Use and VAT taxes	8.7	7.1
Accrued rebates and promotions	45.4	37.0
Derivative contracts	7.4	1.5
Other	48.1	45.5
Total Accrued expenses	$ 239.0	$ 232.1

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Consolidated Balance Sheets (USD $) In Millions, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Current assets:
Cash and cash equivalents	$ 37.5	$ 38.0
Accounts and notes receivable, net of allowances of $7.9 and $9.8 in 2014 and 2013, respectively	421.4	408.1
Inventories, net	463.3	378.8
Deferred income taxes, net	32.5	24.5
Other assets	59.3	53.0
Total current assets	1,014.0	902.4
Property, plant and equipment, net	358.6	335.5
Goodwill	209.4	216.8
Deferred income taxes	97.5	88.5
Other assets, net	84.8	83.5
Total assets	1,764.3	1,626.7
Current Liabilities:
Short-term debt	226.6	165.9
Current maturities of long-term debt	24.0	1.3
Accounts payable	324.3	283.1
Accrued expenses	239.0	232.1
Income taxes payable	13.4	31.6
Total current liabilities	827.3	714.0
Long-term debt	675.0	233.2
Post-retirement benefits, other than pensions	4.5	4.6
Pensions	129.9	70.0
Other liabilities	118.6	119.2
Total liabilities	1,755.3	1,141.0
Commitments and contingencies
Stockholders' equity
Preferred stock, $.01 par value, 25,000,000 shares authorized, no shares issued or outstanding	0	0
Common stock, $.01 par value, 200,000,000 shares authorized, 87,170,197 shares issued	0.9	0.9
Additional paid-in capital	824.9	912.7
Retained earnings	1,022.1	870.5
Accumulated other comprehensive loss	(153.5)	(61.1)
Treasury stock, at cost, 42,535,126 shares and 38,066,794 shares for 2014 and 2013, respectively	(1,686.0)	(1,238.1)
Noncontrolling interests	0.6	0.8
Total stockholders’ equity	9.0	485.7
Total liabilities and stockholders' equity	$ 1,764.3	$ 1,626.7

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Employee Benefit Plans (Tables)

12 Months Ended

Dec. 31, 2014

Defined Benefit Plan Disclosure [Line Items]

Defined Contribution Plans

We recorded the following expenses related to our contributions to the defined contribution plans (in millions):

	For the Years Ended December 31,
	2014		2013		2012
Contributions to defined contribution plans (1)	$	14.8	$	13.7	$	13.2

⁽¹⁾ Contributions of $0.4 million and $2.0 million were included in Loss from discontinued operations for the years ended December 31, 2013 and 2012, respectively. No contributions were included in Loss from discontinued operations in 2014.

Pension and Postretirement Benefit Plans recognized in financial statements

The following tables set forth amounts recognized in our financial statements and the plans' funded status for our pension and post-retirement benefit plans (dollars in millions):

	Pension Benefits						Other Benefits
	2014			2013			2014			2013
Accumulated benefit obligation	$	439.6		$	367.3		N/A			N/A
Changes in projected benefit obligation:
Benefit obligation at beginning of year	$	374.6		$	413.9		$	6.0		$	7.6
Service cost	4.2			5.2			—			—
Interest cost	17.7			16.2			0.2			0.2
Plan participants' contributions	—			—			0.6			0.7
Amendments	—			—			—			—
Other	—			0.1			—			—
Actuarial (gain) loss	77.0			(39.4		)	0.6			—
Effect of exchange rates	(4.3		)	(0.7		)	—			—
Divestiture	—			—			—			—
Settlements and curtailments	(0.8		)	(1.6		)	—			—
Benefits paid	(21.9		)	(19.1		)	(2.0		)	(2.5		)
Benefit obligation at end of year	$	446.5		$	374.6		$	5.4		$	6.0
Changes in plan assets:
Fair value of plan assets at beginning of year	$	302.8		$	276.8		$	—		$	—
Actual gain return on plan assets	23.3			37.4			—			—
Employer contribution	14.5			9.9			1.4			1.8
Plan participants' contributions	—			—			0.6			0.7
Effect of exchange rates	(2.9		)	(0.6		)	—			—
Divestiture	—			—			—			—
Plan settlements	(0.8		)	(1.6		)	—			—
Benefits paid	(21.9		)	(19.1		)	(2.0		)	(2.5		)
Fair value of plan assets at end of year	315.0			302.8			—			—
Funded status / net amount recognized	$	(131.5	)	$	(71.8	)	$	(5.4	)	$	(6.0	)
Net amount recognized consists of:
Current liability	$	(1.6	)	$	(1.8	)	$	(0.9	)	$	(1.4	)
Non-current liability	(129.9		)	(70.0		)	(4.5		)	(4.6		)
Net amount recognized	$	(131.5	)	$	(71.8	)	$	(5.4	)	$	(6.0	)

Schedule of Non-current pension liability plan

	For the Years Ended December 31,
	2014		2013
Pension plans with a benefit obligation in excess of plan assets:
Projected benefit obligation	$	446.5	$	374.6
Accumulated benefit obligation	439.6		367.3
Fair value of plan assets	315.0		302.8

Components of net periodic benefit cost

Our U.S.-based pension plans comprised approximately 88% of the projected benefit obligation and 87% of plan assets as of December 31, 2014.

	Pension Benefits									Other Benefits
	2014			2013			2012			2014			2013			2012
Components of net periodic benefit cost as of December 31:
Service cost	$	4.2		$	5.2		$	5.8		$	—		$	—		$	0.2
Interest cost	17.7			16.2			17.5			0.2			0.2			0.4
Expected return on plan assets	(22.7		)	(20.7		)	(19.0		)	—			—			—
Amortization of prior service cost	0.3			0.4			0.4			(3.1		)	(3.1		)	(2.7		)
Recognized actuarial loss	6.6			9.2			8.7			1.5			1.5			1.4
Settlements and curtailments	0.4			1.5			7.1			—			—			—
Net periodic benefit cost (1)	$	6.5		$	11.8		$	20.5		$	(1.4	)	$	(1.4	)	$	(0.7	)

⁽¹⁾ Pension expense of $0.2 million and $6.9 million was included in Loss for discontinued operations for the years ended December 31, 2013 and 2012, respectively. No pension expense was included in Loss from discontinued operations in 2014.

Summary of amounts recognized in AOCI in our financial statements

The following table sets forth amounts recognized in AOCI and Other comprehensive income (loss) in our financial statements for 2014 and 2013 (in millions):

	Pension Benefits						Other Benefits
	2014			2013			2014			2013
Amounts recognized in AOCI:
Prior service costs	$	(1.3	)	$	(1.7	)	$	18.1		$	21.1
Actuarial loss	(231.8		)	(164.4		)	(19.8		)	(20.7		)
Subtotal	(233.1		)	(166.1		)	(1.7		)	0.4
Deferred taxes	84.7			59.9			0.6			(0.2		)
Net amount recognized	$	(148.4	)	$	(106.2	)	$	(1.1	)	$	0.2
Changes recognized in other comprehensive income (loss):
Adjustment to OCI due to reclassification	$	—		$	—		$	—		$	—
Current year prior service costs	—			—			—			—
Current year actuarial (gain) loss	75.9			(56.1		)	0.6			—
Effect of exchange rates	(1.8		)	(0.6		)	—			—
Amortization of prior service (costs) credits	(0.3		)	(1.1		)	3.1			3.1
Amortization of actuarial loss	(7.0		)	(10.0		)	(1.5		)	(1.5		)
Total recognized in other comprehensive income	$	66.8		$	(67.8	)	$	2.2		$	1.6
Total recognized in net periodic benefit cost and other comprehensive income (loss)	$	73.3		$	(56.0	)	$	0.8		$	0.2

Summary of health care cost trend rates

The following table sets forth the healthcare trend rate assumptions used:

	2014		2013
Assumed health care cost trend rates as of December 31:
Health care cost trend rate assumed for next year	7.50	%	8.00	%
Rate to which the cost rate is assumed to decline (the ultimate trend rate)	5.00	%	5.00	%
Year that the rate reaches the ultimate trend rate	2020		2020

Summary of one percentage-point change in assumed healthcare cost trend rate

A one percentage-point change in assumed healthcare cost trend rates would have the following effects (in millions):

	1-Percentage-Point Increase		1-Percentage-Point Decrease
Effect on total of service and interest cost	$	—	$	—
Effect on the post-retirement benefit obligation	0.2		(0.2		)

Summary of expected future benefit payments

Expected future benefit payments are shown in the table below (in millions):

	For the Years Ended December 31,
	2015		2016		2017		2018		2019		2020-2024
Pension benefits	$	18.0	$	18.3	$	18.9	$	19.5	$	20.0	$	124.9
Other benefits	0.9		0.7		0.6		0.6		0.5		1.7

Summary of weighted-average asset allocations

Our U.S. pension plans' weighted-average asset allocations as of December 31, 2014 and 2013, by asset category, are as follows:

	Plan Assets as of December 31,
Asset Category:	2014		2013
U.S. equity	28.3	%	37.8	%
International equity	17.1	%	26.7	%
Fixed income	52.6	%	33.8	%
Money market/cash	2.0	%	1.7	%
Total	100.0	%	100.0	%

Summary of target allocation percentage of assets

U.S. pension plan assets are invested within the following range targets:

Asset Category:	Target
U.S. equity	25.0	%
International equity	17.0	%
Fixed income	56.0	%
Money market/cash/guaranteed investment contracts	2.0	%

Summary of fair value of pension plan asset, by asset category

The fair values of our pension plan assets, by asset category, are as follows (in millions):

	Fair Value Measurements as of December 31, 2014
	Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)	Total
Asset Category:
Cash and cash equivalents	5.8	—	—	5.8
Commingled pools / Collective Trusts:
U.S. equity (1)	—	78.0	—	78.0
International equity (2)	—	47.3	—	47.3
Fixed income (3)	—	145.4	—	145.4
Balanced pension trust: (4)
International equity	—	4.7	—	4.7
Fixed income	—	14.2	—	14.2
Pension fund:
International equity (5)	—	11.4	—	11.4
Fixed income (6)	—	8.2	—	8.2
Total	5.8	309.2	—	315.0

	Fair Value Measurements as of December 31, 2013
	Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)	Total
Asset Category:
Cash and cash equivalents	8.2	—	—	8.2
Commingled pools / Collective Trusts:
U.S. equity (1)	—	100.1	—	100.1
International equity (2)	—	70.8	—	70.8
Fixed income (3)	—	89.4	—	89.4
Balanced pension trust: (4)
International equity	—	10.8	—	10.8
Fixed income	—	7.2	—	7.2
Pension fund:
International equity (5)	—	9.4	—	9.4
Fixed income (6)	—	6.9	—	6.9
Total	8.2	294.6	—	302.8

Summary of additional information about asset measured at net asset value per share

Additional information about assets measured at Net Asset Value (“NAV”) per share (in millions):

	As of December 31, 2014
	Fair Value		Redemption Frequency  (if currently eligible)	Redemption Notice Period
Asset Category:
Commingled pools / Collective Trusts:
U.S. equity (1)	$	78.0	Daily	5 days
International equity (2)	47.3		Daily	5 days
Fixed income (3)	145.4		Daily	5-15 days
Balanced pension trust: (4)
International equity	4.7		Daily	3-5 days
Fixed income	14.2		Daily	3-5 days
Pension fund:
International equity (5)	11.4		Daily	1-7 days
Fixed income (6)	8.2		Daily	1-7 days
Total	$	309.2

	As of December 31, 2013
	Fair Value		Redemption Frequency  (if currently eligible)	Redemption Notice Period
Asset Category:
Commingled pools / Collective Trusts:
U.S. equity (1)	$	100.1	Daily	5 days
International equity (2)	70.8		Daily	5 days
Fixed income (3)	89.4		Daily	5-15 days
Balanced pension trust: (4)
International equity	10.8		Daily	3-5 days
Fixed income	7.2		Daily	3-5 days
Pension fund:
International equity (5)	9.4		Daily	7 days
Fixed income (6)	6.9		Daily	7 days
Total	$	294.6

(1)	This category includes investments primarily in U.S. equity securities that include large, mid and small capitalization companies.
(2)	This category includes investments primarily in international equity securities that include large, mid and small capitalization companies in large developed markets as well as emerging markets equities.
(3)	This category includes investments in U.S. investment grade and high yield fixed income securities, international fixed income securities and emerging markets fixed income securities.
(4)	The investment objectives of the fund are to provide long-term capital growth and income by investing primarily in a well-diversified, balanced portfolio of Canadian common stocks, bonds and money market securities. The fund also holds a portion of its assets in international equities.
(5)	This category includes investments in international equity securities and aims to provide returns consistent with the markets in which it invests and provide broad exposure to countries around the world.
(6)	This category includes investments in U.K. government index-linked securities (index-linked gilts) that have maturity periods of 5 years or longer and investment grade corporate bonds denominated in sterling.

U.S.-based pension plans [Member]

Defined Benefit Plan Disclosure [Line Items]

Weighted-average assumptions used to determine Benefit Obligations and Net Periodic Benefit Cost for the U.S. and Non-U.S.-based plans

The following tables set forth the weighted-average assumptions used to determine Benefit Obligations and Net Periodic Benefit Cost for the U.S.-based plans in 2014 and 2013:

	Pension Benefits				Other Benefits
	2014		2013		2014		2013
Weighted-average assumptions used to determine benefit obligations as of December 31:
Discount rate	4.04	%	4.88	%	3.23	%	3.57	%
Rate of compensation increase	4.23	%	4.23	%	—		—

	Pension Benefits						Other Benefits
	2014		2013		2012		2014		2013		2012
Weighted-average assumptions used to determine net periodic benefit cost for the years ended December 31:
Discount rate	4.88	%	3.97	%	4.83	%	3.57	%	2.72	%	4.64	%
Expected long-term return on plan assets	8.00	%	8.00	%	8.00	%	—		—		—
Rate of compensation increase	4.23	%	4.23	%	4.23	%	—		—		—

Foreign Pension Plan [Member]

Defined Benefit Plan Disclosure [Line Items]

Weighted-average assumptions used to determine Benefit Obligations and Net Periodic Benefit Cost for the U.S. and Non-U.S.-based plans

The following tables set forth the weighted-average assumptions used to determine Benefit Obligations and Net Periodic Benefit Cost for the non-U.S.-based plans in 2014 and 2013:

	Pension Benefits
	2014		2013
Weighted-average assumptions used to determine benefit obligations as of December 31:
Discount rate	3.45	%	4.38	%
Rate of compensation increase	3.66	%	3.31	%

	Pension Benefits
	2014		2013		2012
Weighted-average assumptions used to determine net periodic benefit cost for the years ended December 31:
Discount rate	4.38	%	4.12	%	4.93	%
Expected long-term return on plan assets	6.32	%	6.05	%	6.26	%
Rate of compensation increase	3.31	%	3.48	%	3.68	%

XML

Lines of Credit and Financing Arrangements (Details Textual) (USD $) In Millions, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Short-term Debt [Line Items]
Short-term Debt	$ 226.6	$ 165.9
Short-term Debt [Member]
Short-term Debt [Line Items]
Short-term Debt	250.0
Foreign Line of Credit [Member]
Short-term Debt [Line Items]
Short-term Debt	$ 6.6	$ 5.9

XML

Discontinued Operations (Details Textual) (USD $) In Millions, unless otherwise specified	0 Months Ended	12 Months Ended	1 Months Ended
	Mar. 22, 2013	Dec. 31, 2012	Apr. 30, 2012
Service Experts [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Proceeds from sale of business	$ 10.4
Service Experts [Member] | Goodwill in assets of discontinued operations [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Goodwill impairment		20.5
Hearth [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Proceeds from sale of business			10.1
Pre-tax charge for write-down of net assets to estimated fair market value		6.3
Settlement charge related to recognized actuarial losses		6.3
Discontinued operation gain in settlement of foreign currency translation		$ 3.5

XML

Employee Benefit Plans (Details 12) (USD $) In Millions, unless otherwise specified	Dec. 31, 2014		Dec. 31, 2013
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Fair Value of Plan Assets	$ 315.0		$ 302.8
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Fair Value of Plan Assets	5.8		8.2
Significant Other Observable Inputs (Level 2) [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Fair Value of Plan Assets	309.2		294.6
Significant Unobservable Inputs (Level 3) [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Fair Value of Plan Assets	0		0
Cash and Cash Equivalents [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Fair Value of Plan Assets	5.8		8.2
Cash and Cash Equivalents [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Fair Value of Plan Assets	5.8		8.2
Cash and Cash Equivalents [Member] | Significant Other Observable Inputs (Level 2) [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Fair Value of Plan Assets	0		0
Cash and Cash Equivalents [Member] | Significant Unobservable Inputs (Level 3) [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Fair Value of Plan Assets	0		0
Commingled Pools / Collective Trusts [Member] | U.S. equity [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Fair Value of Plan Assets	78.0		100.1
Commingled Pools / Collective Trusts [Member] | U.S. equity [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Fair Value of Plan Assets	0		0
Commingled Pools / Collective Trusts [Member] | U.S. equity [Member] | Significant Other Observable Inputs (Level 2) [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Fair Value of Plan Assets	78.0		100.1
Commingled Pools / Collective Trusts [Member] | U.S. equity [Member] | Significant Unobservable Inputs (Level 3) [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Fair Value of Plan Assets	0		0
Commingled Pools / Collective Trusts [Member] | International equity [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Fair Value of Plan Assets	47.3	[1]	70.8	[1]
Commingled Pools / Collective Trusts [Member] | International equity [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Fair Value of Plan Assets	0	[1]	0	[1]
Commingled Pools / Collective Trusts [Member] | International equity [Member] | Significant Other Observable Inputs (Level 2) [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Fair Value of Plan Assets	47.3	[1]	70.8	[1]
Commingled Pools / Collective Trusts [Member] | International equity [Member] | Significant Unobservable Inputs (Level 3) [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Fair Value of Plan Assets	0	[1]	0	[1]
Commingled Pools / Collective Trusts [Member] | Fixed income [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Fair Value of Plan Assets	145.4	[2]	89.4	[2]
Commingled Pools / Collective Trusts [Member] | Fixed income [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Fair Value of Plan Assets	0	[2]	0	[2]
Commingled Pools / Collective Trusts [Member] | Fixed income [Member] | Significant Other Observable Inputs (Level 2) [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Fair Value of Plan Assets	145.4	[2]	89.4	[2]
Commingled Pools / Collective Trusts [Member] | Fixed income [Member] | Significant Unobservable Inputs (Level 3) [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Fair Value of Plan Assets	0	[2]	0	[2]
Trust for Benefit of Employees [Member] | International equity [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Fair Value of Plan Assets	4.7	[3]	10.8	[3]
Trust for Benefit of Employees [Member] | International equity [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Fair Value of Plan Assets	0	[3]	0	[3]
Trust for Benefit of Employees [Member] | International equity [Member] | Significant Other Observable Inputs (Level 2) [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Fair Value of Plan Assets	4.7	[3]	10.8	[3]
Trust for Benefit of Employees [Member] | International equity [Member] | Significant Unobservable Inputs (Level 3) [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Fair Value of Plan Assets	0	[3]	0	[3]
Trust for Benefit of Employees [Member] | Fixed income [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Fair Value of Plan Assets	14.2	[3]	7.2	[3]
Trust for Benefit of Employees [Member] | Fixed income [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Fair Value of Plan Assets	0	[3]	0	[3]
Trust for Benefit of Employees [Member] | Fixed income [Member] | Significant Other Observable Inputs (Level 2) [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Fair Value of Plan Assets	14.2	[3]	7.2	[3]
Trust for Benefit of Employees [Member] | Fixed income [Member] | Significant Unobservable Inputs (Level 3) [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Fair Value of Plan Assets	0	[3]	0	[3]
Pension Fund [Member] | International equity [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Fair Value of Plan Assets	11.4	[4]	9.4	[4]
Pension Fund [Member] | International equity [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Fair Value of Plan Assets	0	[4]	0	[4]
Pension Fund [Member] | International equity [Member] | Significant Other Observable Inputs (Level 2) [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Fair Value of Plan Assets	11.4	[4]	9.4	[4]
Pension Fund [Member] | International equity [Member] | Significant Unobservable Inputs (Level 3) [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Fair Value of Plan Assets	0	[4]	0	[4]
Pension Fund [Member] | Fixed income [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Fair Value of Plan Assets	8.2	[5]	6.9	[5]
Pension Fund [Member] | Fixed income [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Fair Value of Plan Assets	0	[5]	0	[5]
Pension Fund [Member] | Fixed income [Member] | Significant Other Observable Inputs (Level 2) [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Fair Value of Plan Assets	8.2	[5]	6.9	[5]
Pension Fund [Member] | Fixed income [Member] | Significant Unobservable Inputs (Level 3) [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Fair Value of Plan Assets	$ 0	[5]	$ 0	[5]

[1] This category includes investments primarily in international equity securities that include large, mid and small capitalization companies in large developed markets as well as emerging markets equities.

[2] This category includes investments in U.S. investment grade and high yield fixed income securities, international fixed income securities and emerging markets fixed income securities.

[3] The investment objectives of the fund are to provide long-term capital growth and income by investing primarily in a well-diversified, balanced portfolio of Canadian common stocks, bonds and money market securities. The fund also holds a portion of its assets in international equities.

[4] This category includes investments in international equity securities and aims to provide returns consistent with the markets in which it invests and provide broad exposure to countries around the world.

[5] This category includes investments in U.K. government index-linked securities (index-linked gilts) that have maturity periods of 5 years or longer and investment grade corporate bonds denominated in sterling.

XML

Consolidated Statements of Cash Flows (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Cash flows from operating activities:
Net income	$ 205.8	$ 171.8	$ 90.0
Net loss from discontinued operations	2.3	8.1	45.0
Adjustments to reconcile net income to net cash provided by operating activities:
Income from equity method investments	(13.8)	(12.2)	(10.5)
Dividends from affiliates	9.1	10.3	9.3
Restructuring expenses, net of cash paid	0.2	0.1	0.1
Provision for bad debts	2.6	3.6	3.9
Unrealized losses on derivative contracts	0.3	0.3	(1.0)
Stock-based compensation expense	23.3	29.3	15.2
Depreciation and amortization	60.8	58.9	55.4
Deferred Income Taxes and Tax Credits	6.1	3.5	(2.7)
Pension costs in excess of (less than) contributions	(8.0)	1.7	(15.1)
Other items, net	0.1	4.5	2.1
Changes in assets and liabilities, net of effects of acquisitions and divestitures:
Accounts and notes receivable	(32.6)	(49.0)	13.3
Inventories	(96.7)	(19.5)	(55.8)
Other current assets	(8.3)	(16.3)	(1.5)
Accounts payable	46.1	(10.9)	37.1
Accrued expenses	6.7	15.4	35.8
Income taxes payable and receivable	(15.9)	21.9	18.2
Other, net	(1.0)	4.4	(2.2)
Net cash used in discontinued operations	(2.3)	(15.6)	(15.2)
Net cash provided by operating activities	184.8	210.3	221.4
Cash flows from investing activities:
Proceeds from the disposal of property, plant and equipment	1.1	2.4	0.1
Purchases of property, plant and equipment	(88.4)	(78.3)	(50.2)
Net proceeds from sale of businesses	0	8.6	10.1
Net cash used in discontinued operations	0	0	(0.4)
Net cash used in investing activities	(87.3)	(67.3)	(40.4)
Cash flows from financing activities:
Short-term borrowings, net	1.5	2.0	0.2
Asset securitization borrowings	100.0	330.0	645.0
Asset securitization payments	(40.0)	(200.0)	(615.0)
Term loan borrowings from credit facility	300.0	0	0
Long-term debt payments	(2.3)	(1.0)	(1.1)
Borrowings from credit facility	2,073.5	1,425.5	967.0
Payments on credit facility	(1,908.5)	(1,543.5)	(1,075.0)
Payments of deferred financing costs	(2.2)	0	0
Additional investment in subsidiary	0	(0.5)	0
Proceeds from employee stock purchases	2.0	1.8	0.8
Repurchases of common stock	(550.3)	(125.0)	(50.1)
Repurchases of common stock to satisfy employee withholding tax obligations	(22.4)	(12.0)	(7.8)
Excess tax benefits related to share-based payments	(11.8)	(6.5)	(3.5)
Cash dividends paid	(52.6)	(34.0)	(47.6)
Net cash used in financing activities	(89.5)	(150.2)	(180.1)
Increase (decrease) in cash and cash equivalents	8.0	(7.2)	0.9
Effect of exchange rates on cash and cash equivalents	(8.5)	(6.6)	5.9
Cash and cash equivalents, beginning of year	38.0	51.8	45.0
Cash and cash equivalents, end of year	37.5	38.0	51.8
Cash paid during the year for:
Interest, net	17.6	15.7	18.2
Income taxes (net of refunds)	$ 105.3	$ 56.8	$ 30.1

XML

Lines of Credit and Financing Arrangements (Details 3) (Revolving Credit Facility [Member])	Dec. 31, 2014	Dec. 31, 2013
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Weighted average borrowing rate	1.88%	1.17%

XML

Reportable Business Segments (Details)	12 Months Ended
	Dec. 31, 2014
Residential Heating & Cooling [Member] | United States [Member]
Summary of nature of operations of reportable segment
Product or Services	Furnaces, air conditioners, heat pumps, packaged heating and cooling systems, indoor air quality equipment, comfort control products, replacement parts
Markets Served	Residential Replacement; Residential New Construction
Residential Heating & Cooling [Member] | Canada [Member]
Summary of nature of operations of reportable segment
Product or Services	Furnaces, air conditioners, heat pumps, packaged heating and cooling systems, indoor air quality equipment, comfort control products, replacement parts
Markets Served	Residential Replacement; Residential New Construction
Commercial Heating & Cooling [Member] | United States [Member]
Summary of nature of operations of reportable segment
Product or Services	Unitary heating and air conditioning equipment, applied systems, controls, installation and service of commercial heating and cooling equipment
Markets Served	Light Commercial
Commercial Heating & Cooling [Member] | Canada [Member]
Summary of nature of operations of reportable segment
Product or Services	Unitary heating and air conditioning equipment, applied systems, controls, installation and service of commercial heating and cooling equipment
Markets Served	Light Commercial
Commercial Heating & Cooling [Member] | Europe [Member]
Summary of nature of operations of reportable segment
Product or Services	Unitary heating and air conditioning equipment, applied systems, controls, installation and service of commercial heating and cooling equipment
Markets Served	Light Commercial
Refrigeration [Member] | United States [Member]
Summary of nature of operations of reportable segment
Product or Services	Condensing units, unit coolers, fluid coolers, air cooled condensers, air handlers, process chillers, controls, compressorized racks, supermarket display cases and systems
Markets Served	Light Commercial; Food Preservation; Non-Food/Industrial
Refrigeration [Member] | Canada [Member]
Summary of nature of operations of reportable segment
Product or Services	Condensing units, unit coolers, fluid coolers, air cooled condensers, air handlers, process chillers, controls, compressorized racks, supermarket display cases and systems
Markets Served	Light Commercial Food Preservation; Non-Food/Industrial
Refrigeration [Member] | Europe [Member]
Summary of nature of operations of reportable segment
Product or Services	Condensing units, unit coolers, fluid coolers, air cooled condensers, air handlers, process chillers, controls, compressorized racks, supermarket display cases and systems
Markets Served	Light Commercial Food Preservation; Non-Food/Industrial
Refrigeration [Member] | Asia Pacific [Member]
Summary of nature of operations of reportable segment
Product or Services	Condensing units, unit coolers, fluid coolers, air cooled condensers, air handlers, process chillers, controls, compressorized racks, supermarket display cases and systems
Markets Served	Light Commercial Food Preservation; Non-Food/Industrial
Refrigeration [Member] | South America [Member]
Summary of nature of operations of reportable segment
Product or Services	Condensing units, unit coolers, fluid coolers, air cooled condensers, air handlers, process chillers, controls, compressorized racks, supermarket display cases and systems
Markets Served	Light Commercial Food Preservation; Non-Food/Industrial

XML

Reportable Business Segments (Details 2) (USD $) In Millions, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Total assets by business segment
Total assets, excluding discontinued operations	$ 1,764.3	$ 1,626.7	$ 1,593.3
Total assets, discontinued operations	0	0	98.6
Total assets	1,764.3	1,626.7	1,691.9
Residential Heating and Cooling [Member]
Total assets by business segment
Total assets	632.3	500.0	457.5
Commercial Heating and Cooling [Member]
Total assets by business segment
Total assets	353.4	346.3	321.9
Refrigeration [Member]
Total assets by business segment
Total assets	551.5	572.0	585.3
Corporate and Other [Member]
Total assets by business segment
Total assets	$ 227.1	$ 208.4	$ 228.6

XML

Summary of Significant Accounting Policies (Details 2) (Maximum [Member])	12 Months Ended
	Dec. 31, 2014
Customer relationships [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Asset, Useful Life	12 years
Patents and others [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Asset, Useful Life	20 years

XML

Lines of Credit and Financing Arrangements (Details Textual 3) (Senior Notes [Member], USD $)	12 Months Ended
	Dec. 31, 2014	May 31, 2010
Senior Notes [Member]
Debt Instrument [Line Items]
Debt issued		$ 200,000,000
Fixed interest rate for senior unsecured notes	4.90%
Maturity date of senior unsecured notes	May 15, 2017
Minimum amount of principal or interest due on indebtedness or receivable securitization	$ 75,000,000
Number of days within notice date acceleration is not rescinded	30 days

XML

Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2014

Accounting Policies [Abstract]

Estimated useful lives of property, plant and equipment

Depreciation is computed using the straight-line method over the following estimated useful lives:

Buildings and improvements:
Buildings and improvements	5 to 30 years
Leasehold improvements	1 to 20 years
Machinery and equipment:
Computer hardware	3 to 5 years
Computer software	3 to 10 years
Factory machinery and equipment	1 to 15 years
Research and development equipment	5 to 10 years
Vehicles	3 to 8 years

Components of Property, plant and equipment, net were as follows (in millions):

	As of December 31,
	2014			2013
Land	$	38.3		$	39.5
Buildings and improvements	215.0			202.5
Machinery and equipment	681.8			634.0
Capital leases	27.0			25.2
Construction in progress and equipment not yet in service	50.6			51.6
Total	1,012.7			952.8
Less accumulated depreciation	(654.1		)	(617.3		)
Property, plant and equipment, net	$	358.6		$	335.5

Identifiable intangible and other assets that have finite lives are amortized over their estimated useful lives

We amortize intangible assets and other assets with finite lives over their respective estimated useful lives to their estimated residual values, as follows:

Asset	Useful Life
Deferred financing costs	Effective interest method
Customer relationships	Straight-line method up to 12 years
Patents and others	Straight-line method up to 20 years

XML

Fair Value Measurements (Details 1) (Quoted Prices in Active Markets for Similar Instruments (Level 2), Senior unsecured notes [Member], USD $) In Millions, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Quoted Prices in Active Markets for Similar Instruments (Level 2) | Senior unsecured notes [Member]
Other Fair Value Measurements
Senior unsecured notes	$ 210.6	$ 214.0

XML

Stock-Based Compensation (Details Textual) (USD $) In Millions, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Number of common stock shares which are authorized to issue awards	24.3
Common Stock, Capital Shares Reserved for Future Issuance	20.5
Shares available for future issuance	3.8
Payout Percentage	100.00%
Undistributed performance share units	0.4
Weighted-average grant date fair value of undistributed performance share units	$ 68.27
Undistributed and vested performance share units	0.4
Maximum [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Potential increase for payout percentage	200.00%
Performance Shares [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Award service period	3 years
Payout Percentage	153.20%	86.90%	52.50%
Total unrecognized compensation cost	$ 15.9
Weighted average period of recognition	2 years 2 months 24 days
Estimated forfeiture rate	16.50%
Restricted Stock Units (RSUs) [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Award service period	3 years
Total unrecognized compensation cost	14.9
Weighted average period of recognition	2 years 4 months 18 days
Estimated forfeiture rate	16.90%
Stock Appreciation Rights [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Award expiration period	7 years
Vesting percentage	33.33%
Total unrecognized compensation cost	$ 8.5
Weighted average period of recognition	2 years 3 months 24 days
Estimated forfeiture rate	15.60%

XML

Goodwill and Intangible Assets (Details 3) (USD $) In Millions, unless otherwise specified	Dec. 31, 2014
Goodwill and Intangible Assets Disclosure [Abstract]
2015	$ 3.8
2016	3.7
2017	3.5
2018	3.4
2019	3.2
Thereafter	$ 10.2

XML

Stock-Based Compensation

12 Months Ended

Dec. 31, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-Based Compensation

Stock-Based Compensation:

Stock-Based compensation expense related to continuing operations was included in Selling, general and administrative expenses in the accompanying Consolidated Statements of Operations as follows (in millions):

	For the Years Ended December 31,
	2014		2013		2012
Compensation expense(1)	$	23.3	$	29.3	$	15.2

⁽¹⁾ Stock-Based compensation expense was recorded in our Corporate and other business segment.

Incentive Plan

Under the Lennox International Inc. 2010 Incentive Plan, as amended and restated (the “2010 Incentive Plan”), we are authorized to issue awards for 24.3 million shares of common stock. The 2010 Incentive Plan provides for various long-term incentive awards, including performance share units, restricted stock units and stock appreciation rights. A description of these long-term incentive awards and related activity within each award category is provided below.

As of December 31, 2014, awards for 20.5 million shares of common stock had been granted, net of cancellations and repurchases, and there were 3.8 million shares available for future issuance.

Performance Share Units

Performance share units are granted to certain employees at the discretion of the Board of Directors with a three-year performance period beginning January 1^st of each year. Upon meeting the performance and vesting criteria, performance share units are converted to an equal number of shares of our common stock. Performance share units vest if, at the end of the three-year performance period, at least the threshold performance level has been attained. To the extent that the payout level attained is less than 100%, the difference between 100% and the units earned and distributed will be forfeited. Eligible participants may also earn additional units of our common stock, which would increase the potential payout up to 200% of the units granted, depending on LII's performance over the three-year performance period.

Performance share units are classified as equity awards. Compensation expense is recognized ratably over the service period and is based on the expected number of units to be earned and the fair value of the stock at the date of grant. The fair value of units is calculated as the average of the high and low market price of the stock on the date of grant discounted by the expected dividend rate over the service period. The number of units expected to be earned will be adjusted in future periods as necessary to reflect changes in the estimated number of award to be issued and, upon vesting, the actual number of units awarded. Our practice is to issue new shares of common stock or utilize treasury stock to satisfy performance share unit distributions.

The following table provides information on our performance share units:

	For the Years Ended December 31,
	2014			2013			2012
Compensation expense for performance share units (in millions)	$	11.5		$	17.1		$	5.7
Weighted-average fair value of grants, per share	$	88.26		$	78.00		$	48.64
Payout ratio for shares paid	153.2		%	86.9		%	52.5		%

A summary of the status of our undistributed performance share units as of December 31, 2014, and changes during the year then ended, is presented below (in millions, except per share data):

	Shares		Weighted- Average Grant Date Fair Value per Share
Undistributed performance share units as of December 31, 2013	0.7		$	47.83
Granted	0.1		88.26
Adjustments to shares paid based on payout ratio	0.2		31.78
Distributed	(0.2	)	44.85
Forfeited	—		—
Undistributed performance share units as of December 31, 2014 (1)	0.8		$	49.47

⁽¹⁾ Undistributed performance share units include approximately 0.4 million units with a weighted-average grant date fair value of $68.27 per share that had not yet vested and 0.4 million units that have vested but were not yet distributed.

As of December 31, 2014, we had $15.9 million of total unrecognized compensation cost related to non-vested performance share units that is expected to be recognized over a weighted-average period of 2.2 years. Our estimated forfeiture rate for these performance share units was 16.5% as of December 31, 2014.

The total fair value of performance share units distributed and the resulting tax deductions to realize tax benefits were as follows (in millions):

	For the Years Ended December 31,
	2014		2013		2012
Fair value of performance share units distributed	$	19.6	$	9.9	$	6.0
Realized tax benefits from tax deductions	$	7.5	$	3.8	$	2.3

Restricted Stock Units

Restricted stock units are issued to attract and retain key employees. Generally, at the end of a three-year retention period, the units will vest and be distributed in shares of our common stock to the participant. Our practice is to issue new shares of common stock or utilize treasury stock to satisfy restricted stock unit vestings. Restricted stock units are classified as equity awards. The fair value of units granted is the average of the high and low market price of the stock on the date of grant discounted by the expected dividend rate over the service period. Units are amortized to compensation expense ratably over the service period.

The following table provides information on our restricted stock units (in millions, except per share data):

	For the Years Ended December 31,
	2014		2013		2012
Compensation expense for restricted stock units	$	7.0	$	6.8	$	5.0
Weighted-average fair value of grants, per share	$	88.26	$	77.26	$	48.45

A summary of our non-vested restricted stock units as of December 31, 2014 and changes during the year then ended is presented below (in millions, except per share data):

	Shares		Weighted- Average Grant Date Fair Value per Share
Non-vested restricted stock units as of December 31, 2013	0.5		$	48.83
Granted	0.1		88.26
Distributed	(0.2	)	32.42
Forfeited	—		—
Non-vested restricted stock units as of December 31, 2014	0.4		$	69.09

As of December 31, 2014, we had $14.9 million of total unrecognized compensation cost related to non-vested restricted stock units that is expected to be recognized over a weighted-average period of 2.4 years. Our estimated forfeiture rate for restricted stock units was 16.9% as of December 31, 2014.

The total fair value of restricted stock units vested and the resulting tax deductions to realize tax benefits were as follows (in millions):

	For the Years Ended December 31,
	2014		2013		2012
Fair value of restricted stock units vested	$	19.5	$	11.1	$	8.6
Realized tax benefits from tax deductions	7.4		4.3		3.3

Stock Appreciation Rights

Stock appreciation rights are issued to certain key employees. Each recipient is given the “right” to receive a value, paid in shares of our common stock, equal to the future appreciation of our common stock price. Stock appreciation rights generally vest in one-third increments beginning on the first anniversary date after the grant date and expire after seven years. Our practice is to issue new shares of common stock or utilize treasury stock to satisfy the exercise of stock appreciation rights.

The following table provides information on our stock appreciation rights (in millions, except per share data):

	For the Years Ended December 31,
	2014		2013		2012
Compensation expense for stock appreciation rights	$	4.8	$	5.4	$	4.5
Weighted-average fair value of grants, per share	19.55		18.76		14.34

Compensation expense for stock appreciation rights is based on the fair value on the date of grant, estimated using the Black-Scholes-Merton valuation model, and is recognized over the service period. We used historical stock price data to estimate the expected volatility. We determined that the recipients of stock appreciation rights can be combined into one employee group that has similar historical exercise behavior and we used our historical pattern of award exercises to estimate the expected life of the awards for the employee group. The risk-free interest rate was based on the zero-coupon U.S. Treasury yield curve with a maturity equal to the expected life of the awards at the time of grant.

The fair value of the stock appreciation rights granted in 2014, 2013 and 2012 were estimated on the date of grant using the following assumptions:

	2014		2013		2012
Expected dividend yield	1.75	%	1.36	%	1.75	%
Risk-free interest rate	1.27	%	1.12	%	0.48	%
Expected volatility	29.60	%	31.50	%	40.42	%
Expected life (in years)	4.04		4.02		4.14

A summary of our stock appreciation rights as of December 31, 2014, and changes during the year then ended, is presented below (in millions, except per share data):

	Shares		Weighted-Average Exercise Price per Share
Outstanding stock appreciation rights as of December 31, 2013	1.8		$	45.58
Granted	0.2		92.64
Exercised	(0.5	)	35.91
Forfeited	—		—
Outstanding stock appreciation rights as of December 31, 2014	1.5		$	56.20
Exercisable stock appreciation rights as of December 31, 2014	1.0		$	43.65

The following table summarizes information about stock appreciation rights outstanding as of December 31, 2014 (in millions, except per share data and years):

	Stock Appreciation Rights Outstanding				Stock Appreciation Rights Exercisable
Range of Exercise Prices	Shares	Weighted-Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value		Shares	Weighted-Average Remaining Contractual Life (in years)	Aggregate Intrinsic Value
$28.24 to $36.94	0.5	3.1	$	33.2	0.5	3.1	$	33.2
$46.78 to $51.40	0.5	4.3	$	22.3	0.4	4.1	$	17.6
$81.11 to $92.64	0.5	6.5	$	4.1	0.1	6.0	$	1.2

As of December 31, 2014, we had $8.5 million of unrecognized compensation cost related to non-vested stock appreciation rights that is expected to be recognized over a weighted-average period of 2.3 years. Our estimated forfeiture rate for stock appreciation rights was 15.6% as of December 31, 2014.

The total intrinsic value of stock appreciation rights exercised and the resulting tax deductions to realize tax benefits were as follows (in millions):

	For the Years Ended December 31,
	2014		2013		2012
Intrinsic value of stock appreciation rights exercised	$	27.3	$	16.7	$	14.4
Realized tax benefits from tax deductions	$	10.4	$	6.4	$	5.5

Employee Stock Purchase Plan

Under the 2012 Employee Stock Purchase Plan (“ESPP”), all employees who meet certain service requirements are eligible to purchase our common stock through payroll deductions at the end of three month offering periods. The purchase price for such shares is 95% of the fair market value of the stock on the last day of the offering period. A maximum of 2.5 million shares is authorized for purchase until the ESPP plan termination date of May 10, 2022, unless terminated earlier at the discretion of the Board of Directors. Employees purchased approximately 20,000 shares under the ESPP during the year ended December 31, 2014. Approximately 2.4 million shares remain available for purchase under the ESPP as of December 31, 2014.

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Inventories (Tables)

12 Months Ended

Dec. 31, 2014

Inventory Disclosure [Abstract]

Components of inventories

The components of inventories are as follows (in millions):

	As of December 31,
	2014			2013
Finished goods	$	338.2		$	251.4
Work in process	8.1			11.8
Raw materials and parts	182.6			188.9
Total	528.9			452.1
Excess of current cost over last-in, first-out cost	(65.6		)	(73.3		)
Total inventories, net	$	463.3		$	378.8

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Lines of Credit and Financing Arrangements (Details Textual 2) (Line of Credit [Member], USD $)	12 Months Ended
	Dec. 31, 2014
Line of Credit [Member]
Line of Credit Facility [Line Items]
Minimum amount of principal or interest due on indebtedness or receivable securitization	$ 75,000,000

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Stock-based Compensation (Details 5) (Restricted Stock [Member], USD $) In Millions, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Restricted Stock [Member]
Schedule of information on stock units
Undistributed, Beginning Balance	0.5
Undistributed, Weighted-Average Grant Date Fair Value per Share, Beginning Balance	$ 48.83
Granted	0.1
Granted, Weighted-Average Grant Date Fair Value per Share	$ 88.26	$ 77.26	$ 48.45
Distributed	(0.2)
Distributed, Weighted-Average Grant Date Fair Value per Share	$ 32.42
Forfeited	0
Forfeited, Weighted-Average Grant Date Fair Value per Share	$ 0.00
Undistributed, Ending Balance	0.4	0.5
Undistributed, Weighted-Average Grant Date Fair Value per Share, Ending Balance	$ 69.09	$ 48.83

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Restructuring Charges

12 Months Ended

Dec. 31, 2014

Restructuring Charges [Abstract]

Restructuring Charges

Restructuring Charges:

We record restructuring charges associated with management-approved restructuring plans to reorganize or to remove duplicative headcount and infrastructure within our businesses. Restructuring charges include severance costs to eliminate a specified number of employees, infrastructure charges to vacate facilities and consolidate operations, contract cancellation costs and other related activities. The timing of associated cash payments is dependent upon the type of restructuring charge and can extend over a multi-year period. Restructuring charges are not included in our calculation of segment profit (loss), as more fully explained in Note 19.

Restructuring Activities in 2014

Information regarding the restructuring charges for all ongoing activities are presented in the table below (in millions):

	Incurred in 2014		Incurred to Date		Total Expected to be Incurred
Severance and related expense	$	1.4	$	6.9	$	7.2
Asset write-offs and accelerated depreciation	0.3		1.8		1.8
Equipment moves	—		—		—
Lease termination	—		—		0.1
Other	0.2		1.9		2.3
Total	$	1.9	$	10.6	$	11.4

While restructuring charges are excluded from our calculation of segment profit (loss), the table below presents the restructuring charges associated with each segment (in millions):

	Incurred in 2014			Incurred to Date		Total Expected to be Incurred
Residential Heating & Cooling	$	0.4		$	1.5	$	1.5
Commercial Heating & Cooling	—			0.9		0.9
Refrigeration	1.6			8.2		9.0
Corporate & Other	(0.1		)	—		—
Total	$	1.9		$	10.6	$	11.4

Restructuring accruals are included in Accrued expenses in the accompanying Consolidated Balance Sheets. The activity within the restructuring accruals is summarized in the tables below (in millions):

Description of Reserves:	Balance as of December 31, 2013		Charged to Earnings		Cash Utilization			Non-Cash Utilization and Other			Balance as of December 31, 2014
Severance and related expense	$	1.6	$	1.4	$	(1.5	)	$	—		$	1.5
Asset write-offs and accelerated depreciation	—		0.3		—			(0.2		)	0.1
Equipment moves	—		—		—			—			—
Lease termination	—		—		—			—			—
Other	—		0.2		(0.2		)	—			—
Total restructuring reserves	$	1.6	$	1.9	$	(1.7	)	$	(0.2	)	$	1.6

Description of Reserves:	Balance as of December 31, 2012		Charged to Earnings		Cash Utilization			Non-Cash Utilization and Other			Balance as of December 31, 2013
Severance and related expense	$	0.7	$	2.7	$	(1.6	)	$	(0.2	)	$	1.6
Asset write-offs and accelerated depreciation	—		0.7		—			(0.7		)	—
Equipment moves	—		0.1		(0.1		)	—			—
Lease termination	1.2		—		(1.2		)	—			—
Other	0.5		1.5		(2.0		)	—			—
Total restructuring reserves	$	2.4	$	5.0	$	(4.9	)	$	(0.9	)	$	1.6

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Property, Plant and Equipment (Details Textual) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Property, Plant and Equipment [Abstract]
Impairment charges	$ 0	$ 0	$ 0

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Employee Benefit Plans (Details 7)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Assumed Health Care Cost Trend Rates
Health care cost trend rate assumed for next year	7.50%	8.00%
Rate to which the cost rate is assumed to decline (the ultimate trend rate)	5.00%	5.00%
Year that the rate reaches the ultimate trend rate	2020	2020

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Supplemental Information (Details Textual) (USD $)	12 Months Ended
	Dec. 31, 2014		Dec. 31, 2013		Dec. 31, 2012
Research and development	$ 60,700,000	[1]	$ 53,700,000	[1]	$ 50,700,000	[1]
Advertising, promotions and marketing	41,900,000	[2]	45,200,000	[2]	59,400,000	[2]
Rent expense	50,500,000	[3]	53,500,000	[3]	67,800,000	[3]
Discontinued Operations [Member]
Research and development	0		0		1,200,000
Advertising, promotions and marketing	0		4,100,000		20,100,000
Rent expense	$ 0		$ 4,500,000		$ 20,100,000

[1] esearch and development costs related to discontinued operations of $1.2 million for the year ended December 31, 2012.

[2] dvertising, promotions and marketing costs related to discontinued operations of $4.1 million and $20.1 million for the years ended December 31, 2013 and 2012, respectively. No advertising costs related to discontinued operations were recorded for the year ended December 31, 2014. Cooperative advertising expenditures were not included in these amounts.

[3] ent expense related to discontinued operations of $4.5 million and $20.1 million for the years ended December 31, 2013 and 2012, respectively.

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Consolidated Statements of Stockholders' Equity (USD $) In Millions, except Share data, unless otherwise specified	Total	Common Stock Issued [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Treasury Stock at Cost [Member]	Noncontrolling Interest [Member]
Beginning Balance at Dec. 31, 2011	$ 469.0	$ 0.9	$ 881.2	$ 692.9	$ (37.1)	$ (1,070.1)	$ 1.2
Beginning balance, Treasury shares at Dec. 31, 2011						36,100,000
Beginning balance, shares at Dec. 31, 2011		86,900,000
Stockholders' Equity [Roll Forward]
Net income	90.0			90.0
Dividends	(38.5)			(38.5)
Foreign currency translation adjustments, net	11.4				11.1
Foreign currency translation adjustments, net							0.3
Pension and postretirement liability changes, net of tax expense (benefit)	(6.5)				(6.5)
Change in fair value of available-for-sale marketable equity securities changes	1.9				1.9
Stock-based compensation expense	16.3		16.3
Change in cash flow hedges, net of tax expense (benefit)	8.3				8.3
Common stock issued	0.2		0.2
Common stock issued, shares		300,000
Treasury stock purchases	(57.3)		(2.9)			(54.4)
Treasury stock purchases, shares						800,000
Tax benefits of stock-based compensation	3.5		3.5			0
Ending Balance at Dec. 31, 2012	498.3	0.9	898.3	744.4	(22.3)	(1,124.5)	1.5
Ending balance, Treasury shares at Dec. 31, 2012						36,900,000
Ending balance, shares at Dec. 31, 2012		87,200,000
Stockholders' Equity [Roll Forward]
Net income	171.8			171.8
Dividends	(45.7)			(45.7)
Foreign currency translation adjustments, net	(72.0)				(71.8)
Foreign currency translation adjustments, net							(0.2)
Pension and postretirement liability changes, net of tax expense (benefit)	41.5				41.5
Change in fair value of available-for-sale marketable equity securities changes	(6.8)				(6.8)
Stock-based compensation expense	29.5		29.5
Change in cash flow hedges, net of tax expense (benefit)	(1.7)				(1.7)
Treasury shares reissued for common stock	1.8		(3.9)			5.7	0
Treasury shares reissued for common stock, shares						(500,000)
Treasury stock purchases	(137.0)		(17.7)			(119.3)
Treasury stock purchases, shares	1,700,000					1,700,000
Tax benefits of stock-based compensation	6.5		6.5
Ending Balance at Dec. 31, 2013	485.7	0.9	912.7	870.5	(61.1)	(1,238.1)	0.8
Ending balance, Treasury shares at Dec. 31, 2013	38,066,794					38,100,000
Ending balance, shares at Dec. 31, 2013		87,200,000
Stockholders' Equity [Roll Forward]
Net income	205.8			205.8
Dividends	(54.2)			(54.2)
Foreign currency translation adjustments, net	(45.7)				(45.7)
Foreign currency translation adjustments, net							0
Pension and postretirement liability changes, net of tax expense (benefit)	(43.4)				(43.4)
Change in fair value of available-for-sale marketable equity securities changes	0.7				0.7
Stock-based compensation expense	23.3		23.3
Change in cash flow hedges, net of tax expense (benefit)	(4.0)				(4.0)
Treasury shares reissued for common stock	1.9		(5.6)			7.5
Treasury shares reissued for common stock, shares						(800,000)
Additional investment in subsidiary	0.2						0.2
Treasury stock purchases	(572.7)		(117.3)			(455.4)
Treasury stock purchases, shares	5,200,000					5,200,000
Tax benefits of stock-based compensation	11.8		11.8			0
Ending Balance at Dec. 31, 2014	$ 9.0	$ 0.9	$ 824.9	$ 1,022.1	$ (153.5)	$ (1,686.0)	$ 0.6
Ending balance, Treasury shares at Dec. 31, 2014	42,535,126					42,500,000
Ending balance, shares at Dec. 31, 2014		87,200,000

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Consolidated Balance Sheets (Parenthetical) (USD $) In Millions, except Share data, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Statement of Financial Position [Abstract]
Allowances, accounts and notes receivable	$ 7.9	$ 9.8
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	25,000,000	25,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	200,000,000	200,000,000
Common stock, shares issued	87,170,197	87,170,197
Treasury stock, shares	42,535,126	38,066,794

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Income Taxes

12 Months Ended

Dec. 31, 2014

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes:

Our Provision for income taxes from continuing operations consisted of the following (in millions):

	For the Years Ended December 31,
	2014		2013			2012
Current:
Federal	$	84.3	$	71.9		$	47.5
State	10.1		8.5			7.3
Foreign	9.6		16.2			13.4
Total current	104.0		96.6			68.2
Deferred:
Federal	2.3		(4.0		)	0.7
State	1.0		2.5			(0.2		)
Foreign	2.2		(0.7		)	(2.0		)
Total deferred	5.5		(2.2		)	(1.5		)
Total provision for income taxes	$	109.5	$	94.4		$	66.7

Income from continuing operations before income taxes was comprised of the following (in millions):

	For the Years Ended December 31,
	2014		2013		2012
Domestic	$	283.7	$	231.1	$	169.9
Foreign	33.9		43.2		31.8
Total	$	317.6	$	274.3	$	201.7

The difference between the income tax provision from continuing operations computed at the statutory federal income tax rate and the financial statement Provision for income taxes is summarized as follows (in millions):

	For the Years Ended December 31,
	2014			2013			2012
Provision at the U.S. statutory rate of 35%	$	111.2		$	96.0		$	70.6
Increase (reduction) in tax expense resulting from:
State income tax, net of federal income tax benefit	8.8			7.1			5.9
Other permanent items	(8.2		)	(6.4		)	(3.1		)
Research tax credit	—			(0.5		)	—
Change in unrecognized tax benefits	0.2			0.7			(5.1		)
Change in valuation allowance	0.2			0.7			2.3
Foreign taxes at rates other than 35% and miscellaneous other	(2.7		)	(3.2		)	(3.9		)
Total provision for income taxes	$	109.5		$	94.4		$	66.7

Deferred income taxes reflect the tax consequences on future years of temporary differences between the tax basis of assets and liabilities and their financial reporting basis and are reflected as current or non-current depending on the classification of the asset or liability generating the deferred tax. The deferred tax provision for the periods shown represents the effect of changes in the amounts of temporary differences during those periods.

Deferred tax assets (liabilities) were comprised of the following (in millions):

	As of December 31,
	2014			2013
Gross deferred tax assets:
Warranties	$	30.9		$	29.3
Loss carryforwards (foreign, U.S. and state)	23.6			28.2
Post-retirement and pension benefits	50.7			28.3
Inventory reserves	4.4			4.8
Receivables allowance	4.9			5.1
Compensation liabilities	19.6			22.6
Deferred income	1.0			0.9
Insurance liabilities	15.8			18.1
Legal reserves	11.1			10.7
Hedges	2.8			0.6
State credits, net of federal effect	8.8			8.7
Other	9.2			7.7
Total deferred tax assets	182.8			165.0
Valuation allowance	(21.2		)	(21.2		)
Total deferred tax assets, net of valuation allowance	161.6			143.8
Gross deferred tax liabilities:
Depreciation	(10.8		)	(12.4		)
Intangibles	(11.0		)	(8.7		)
Other	(9.9		)	(9.7		)
Total deferred tax liabilities	(31.7		)	(30.8		)
Net deferred tax assets	$	129.9		$	113.0

As of December 31, 2014 and 2013, we had $3.8 million and $5.0 million in tax-effected state net operating loss carryforwards, respectively, and $18.5 million and $21.8 million in tax-effected foreign net operating loss carryforwards, respectively. The state and foreign net operating loss carryforwards began expiring in 2014. The deferred tax asset valuation allowance relates primarily to the operating loss carryforwards in various states in the U.S., European and Asian tax jurisdictions. The remainder of the valuation allowance relates to state tax credits which began to expire in 2014.

In assessing whether a deferred tax asset will be realized, we consider whether it is more likely than not that some portion or all of the deferred tax asset will not be realized. We consider the reversal of existing taxable temporary differences, projected future taxable income and tax planning strategies in making this assessment. Based upon the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are deductible, we believe it is more likely than not we will realize the benefits of these deductible differences, net of the existing valuation allowances, as of December 31, 2014.

To realize the net deferred tax asset, we will need to generate future foreign taxable income of approximately $71.2 million during the periods in which those temporary differences become deductible. We do not need to generate additional U.S. federal income as we have sufficient carryback capacity to fully realize the federal deferred tax asset. U.S. taxable income for the years ended December 31, 2014 and 2013 was $201.6 million and $198.7 million, respectively.

No provision was made for income taxes which may become payable upon distribution of our foreign subsidiaries' earnings. These earnings were approximately $122.2 million as of December 31, 2014. It is not practicable to estimate the amount of tax that might be payable because our intent is to permanently reinvest these earnings or to repatriate earnings when it is tax effective to do so.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in millions):

Balance as of December 31, 2012	$	1.0
Increases related to prior year tax positions	0.7
Decreases related to prior year tax positions	(0.1		)
Increases related to current year tax positions	0.1
Balance as of December 31, 2013	1.7
Increases related to prior year tax positions	0.7
Decreases related to prior year tax positions	(0.7		)
Increases related to current year tax positions	—
Settlement	$	(0.1	)
Balance as of December 31, 2014	$	1.6

Included in the balance of unrecognized tax benefits as of December 31, 2014 are potential benefits of $1.2 million that, if recognized, would affect the effective tax rate on income from continuing operations. As of December 31, 2014, we recognized $0.2 million (net of federal tax benefits) in interest and penalties in income tax expense.

We are currently under examination for our U.S. federal income taxes for 2014 and 2013 and are subject to examination by numerous other taxing authorities in the U.S. and in jurisdictions such as Australia, Belgium, France, Canada, and Germany. We are generally no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by taxing authorities for years before 2009.

Since January 1, 2013, numerous states, including New Mexico, North Carolina, North Dakota, Minnesota, Oregon, Texas and West Virginia enacted legislation effective for tax years beginning on or after January 1, 2013, including changes to rates and apportionment methods. The impact of these changes is immaterial.

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Employee Benefit Plans (Details 2) (USD $) In Millions, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Pension plans with a benefit obligation in excess of plan assets:
Projected benefit obligation	$ 446.5	$ 374.6
Accumulated benefit obligation	439.6	367.3
Fair value of plan assets	$ 315.0	$ 302.8

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Lines of Credit and Financing Arrangements (Details 2) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Debt Proceeds [Line Items]
Proceeds from (Repayments of) Debt	$ 18.1	$ 18.3	$ 18.5
Eligible amounts available and beneficial interests sold
Eligible amount available under the ASP on qualified accounts receivable	220.0	160.0
Beneficial interest sold	220.0	160.0
Remaining amount available	$ 0	$ 0

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Lines of Credit and Financing Arrangements (Details) (USD $) In Millions, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Short-Term Debt:
Short-term debt	$ 226.6	$ 165.9
Current maturities of long-term debt:
Capital lease obligations	1.5	1.3
Long-Term Debt:
Capital lease obligations	15.5	16.2
Total long-term debt	675.0	233.2
Total debt	925.6	400.4
Domestic Credit Facility [Member]
Current maturities of long-term debt:
Long-term Debt, Current Maturities	22.5	0
Long-Term Debt:
Total long-term debt	459.5	17.0
Senior Unsecured Notes [Member]
Long-Term Debt:
Total long-term debt	200.0	200.0
Asset Securitization Program [Member]
Short-Term Debt:
Short-term debt	220.0	160.0
Foreign Obligations [Member]
Short-Term Debt:
Short-term debt	$ 6.6	$ 5.9

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Stock-based Compensation (Details 4) (USD $) In Millions, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2014		Dec. 31, 2013		Dec. 31, 2012
Schedule of information on restricted stock units
Compensation expense	$ 23.3	[1]	$ 29.3	[1]	$ 15.2	[1]
Restricted Stock [Member]
Schedule of information on restricted stock units
Compensation expense	$ 7.0		$ 6.8		$ 5.0
Weighted-average fair value of grants, per share	$ 88.26		$ 77.26		$ 48.45

[1] Stock-Based compensation expense was recorded in our Corporate and other business segment.

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Stock Repurchases (Details Textual) (USD $) In Millions, unless otherwise specified	3 Months Ended	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	Oct. 21, 2014
Stockholders' Equity Note [Abstract]
Authorized amount for share repurchase	$ 1,400.0	$ 1,400.0			$ 700.0
Remaining authorized amount for share repurchase	395.9	395.9
Accelerated share repurchase program announced	450.0
Treasury stock purchases, shares		5.2	1.7
Payments for Repurchase of Common Stock		550.3	125.0	50.1
Payments Related to Tax Withholding for Share-based Compensation		$ 22.4	$ 12.0	$ 7.8
Shares Paid for Tax Withholding for Share Based Compensation		0.2	0.2

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Fair Value Measurements (Details) (Quoted Prices in Active Markets for Identical Assets (Level 1) [Member], USD $) In Millions, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Assets and Liabilities Measured at Fair Value on a Recurring Basis
Investment in marketable equity securities	$ 5.3	$ 4.4

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Stock-Based Compensation (Details 1) (USD $) In Millions, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2014		Dec. 31, 2013		Dec. 31, 2012
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation expense	$ 23.3	[1]	$ 29.3	[1]	$ 15.2	[1]
Payout ratio for shares paid	100.00%
Performance Shares [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation expense	$ 11.5		$ 17.1		$ 5.7
Weighted-average fair value of grants, per share	$ 88.26		$ 78.00		$ 48.64
Payout ratio for shares paid	153.20%		86.90%		52.50%

[1] Stock-Based compensation expense was recorded in our Corporate and other business segment.

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Document and Entity Information (USD $) In Billions, except Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Feb. 06, 2015	Jun. 30, 2014
Document and Entity Information [Abstract]
Entity Registrant Name	LENNOX INTERNATIONAL INC
Entity Central Index Key	0001069202
Document Type	10-K
Document Period End Date	Dec. 31, 2014
Amendment Flag	false
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	FY
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float			$ 4.2
Entity Common Stock, Shares Outstanding		44,676,927

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Stock-based Compensation (Details 7) (USD $) In Millions, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2014		Dec. 31, 2013		Dec. 31, 2012
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation expense	$ 23.3	[1]	$ 29.3	[1]	$ 15.2	[1]
Stock Appreciation Rights [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation expense	$ 4.8		$ 5.4		$ 4.5
Weighted-average fair value of grants, per share	$ 19.55		$ 18.76		$ 14.34

[1] Stock-Based compensation expense was recorded in our Corporate and other business segment.

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Commitments and Contingencies

12 Months Ended

Dec. 31, 2014

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies:

Leases

We lease certain real and personal property under non-cancelable operating leases. Some of our lease agreements contain rent escalation clauses (including index-based escalations), rent holidays, capital improvement funding or other lease concessions. We recognize our minimum rental expense on a straight-line basis. We amortize this expense over the term of the lease beginning with the date of initial possession, which is the date we enter the leased space and begin to make improvements in preparation for its intended use.

Future annual minimum lease payments and capital lease commitments as of December 31, 2014 were as follows (in millions):

	Operating Leases		Capital Leases
2015	$	37.8	$	1.5
2016	29.4		0.8
2017	24.0		0.5
2018	18.5		0.3
2019	12.1		0.1
Thereafter	19.7		14.3
Total minimum lease payments	$	141.5	17.5
Less amount representing interest			(0.5		)
Present value of minimum payments			$	17.0

On March 22, 2013, we entered into an agreement with a financial institution to renew the lease of our corporate headquarters in Richardson, Texas for a term of approximately six years through March 1, 2019 (the “Lake Park Renewal”). The leased property consists of an office building of approximately 192,000 square feet, land and related improvements. During the lease term, the Lake Park Renewal requires us to pay base rent in quarterly installments, payable in arrears. At the end of the lease term, we must do one of the following: (i) purchase the property for $41.2 million; (ii) vacate the property and return it in good condition; (iii) arrange for the sale of the leased property to a third party; or (iv) renew the lease under mutually agreeable terms. If we elect to sell the property to a third party and the sales proceeds are less than the lease balance, we must pay any such deficit to the financial institution. Any such deficit payment cannot exceed 86% of the lease balance. The Lake Park Renewal is classified as an operating lease and its future annual minimum lease payments are included in the table above.

Our obligations under the Lake Park Lease are secured by a pledge of our interest in the leased property. The Lake Park Renewal contains customary lease covenants and events of default as well as events of default if (i) indebtedness of $75 million or more is not paid when due, (ii) there is a change of control or (iii) we fail to comply with certain covenants incorporated from our Fifth Amended and Restated Credit Facility Agreement. We were in compliance with these financial covenants as of December 31, 2014.

Environmental

Environmental laws and regulations in the locations we operate can potentially impose obligations to remediate hazardous substances at our properties, properties formerly owned or operated by us, and facilities to which we have sent or send waste for treatment or disposal. We are aware of contamination at some facilities, however, we do not believe that any future remediation related to those facilities will be material to our results of operations. Total environmental accruals are included in the following captions on the accompanying Consolidated Balance Sheets (in millions):

	As of December 31,
	2014		2013
Accrued expenses	$	1.7	$	1.4
Other liabilities	4.5		3.8
Total environmental accruals	$	6.2	$	5.2

Future environmental costs are estimates and may be subject to change due to changes in environmental remediation regulations, technology or site-specific requirements.

Product Warranties and Product Related Contingencies

We incur the risk of liability for claims related to the installation and service of heating and air conditioning products, and we maintain liabilities for those claims that we self-insure. We are involved in various claims and lawsuits related to our products. Our product liability insurance policies have limits that, if exceeded, may result in substantial costs that could have an adverse effect on our results of operations. In addition, warranty claims and certain product liability claims are not covered by our product liability insurance.

Total product warranty liabilities related to continuing operations are included in the following captions on the accompanying Consolidated Balance Sheets (in millions):

	As of December 31,
	2014		2013
Accrued expenses	$	27.3	$	28.7
Other liabilities	59.9		52.9
Total product warranty liabilities	$	87.2	$	81.6

The changes in product warranty liabilities related to continuing operations for the years ended December 31, 2014 and 2013 were as follows (in millions):

Total warranty liability as of December 31, 2012	$	71.9
Payments made in 2013	(21.3		)
Changes resulting from issuance of new warranties	29.6
Changes in estimates associated with pre-existing liabilities	1.6
Changes in foreign currency translation rates and other	(0.2		)
Total warranty liability as of December 31, 2013	$	81.6
Payments made in 2014	(23.1		)
Changes resulting from issuance of new warranties	33.4
Changes in estimates associated with pre-existing liabilities	(3.5		)
Changes in foreign currency translation rates and other	(1.2		)
Total warranty liability as of December 31, 2014	$	87.2

We have incurred, and will likely continue to incur, product costs not covered by insurance or our suppliers’ warranties.   Also, to satisfy our customers and protect our brands,  we have repaired or replaced installed products experiencing quality-related issues, and will likely continue such repairs and replacements.   We currently estimate our probable liability for a supplier quality issue within a range of $2.2 million and $6 million; accordingly, we accrued, as of December 31, 2014, a $2.2 million liability in Accrued Expenses on the Consolidated Balance Sheet because all amounts in that range were equally likely. The supplier has agreed to reimburse our costs related to this liability; accordingly, we also recorded, as of December 31, 2014, a receivable of $2.2 million in Other Assets on the Consolidated Balance Sheet.  If additional costs are incurred, we expect the supplier will also reimburse those costs. The $2.2 million accrual is not included in the estimated warranty liabilities tables immediately above. 

Self Insurance

We use a combination of third-party insurance and self-insurance plans to provide protection against claims relating to workers' compensation/employers' liability, general liability, product liability, auto liability, auto physical damage and other exposures. We use large deductible insurance plans, written through third-party insurance providers, for workers' compensation/employers' liability, general liability, product liability and auto liability. We also carry umbrella or excess liability insurance for all third-party and self-insurance plans, except for directors' and officers' liability, property damage and certain other insurance programs. For directors' and officers' liability, property damage and certain other exposures, we use third-party insurance plans that may include per occurrence and annual aggregate limits. We believe the deductibles and liability limits for all of our insurance policies are appropriate for our business and are adequate for companies of our size in our industry.

We maintain safety and manufacturing programs that are designed to remove risk, improve the effectiveness of our business processes and reduce the likelihood and significance of our various retained and insured risks. In recent years, our actual claims experience has collectively trended favorably and, as a result, both self-insurance expense and the related liability have decreased.

Total self-insurance liabilities were included in the following captions on the accompanying Consolidated Balance Sheets (in millions):

	As of December 31,
	2014		2013
Accrued expenses	$	13.0	$	13.4
Other liabilities	25.8		32.0
Total self-insurance liabilities	$	38.8	$	45.4

Litigation

We are involved in a number of claims and lawsuits incident to the operation of our businesses. Insurance coverages are maintained and estimated costs are recorded for such claims and lawsuits, including costs to settle claims and lawsuits, based on experience involving similar matters and specific facts known.

Some of these claims and lawsuits allege personal injury or health problems resulting from exposure to asbestos that was integrated into certain of our products. We have never manufactured asbestos and have not incorporated asbestos-containing components into our products for several decades. A substantial majority of asbestos-related claims have been covered by insurance or other forms of indemnity or have been dismissed without payment. The remainder of our closed cases have been resolved for amounts that are not material, individually or in the aggregate. Our defense costs for asbestos-related claims are generally covered by insurance; however, our insurance coverage for settlements and judgments for asbestos-related claims vary depending on several factors, and are subject to policy limits, so we may have greater financial exposure for future settlements and judgments. For the years ended December 31, 2014 and 2013, we recorded expense of $0.9 million and $6.3 million, respectively, net of probable insurance recoveries, for known and future asbestos-related litigation.

We are the defendant in an attempted class action lawsuit which alleges that evaporator coils in our residential air conditioning products are susceptible to a type of corrosion that can result in coil leaks, and asserts claims for relief.  We dispute the allegations in the lawsuit.  The outcome related to this action is uncertain but we do not expect this lawsuit to have a material adverse effect on our financial condition or results of operations.

It is management's opinion that none of these claims or lawsuits or any threatened litigation will have a material adverse effect on our financial condition, results of operations or cash flows. Claims and lawsuits, however, involve uncertainties and it is possible that their eventual outcome could adversely affect our results of operations in a future period.

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Income Taxes (Details 1) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Extraordinary Items, Noncontrolling Interest [Abstract]
Domestic	$ 283.7	$ 231.1	$ 169.9
Foreign	33.9	43.2	31.8
Income from continuing operations before income taxes	$ 317.6	$ 274.3	$ 201.7

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Commitments and Contingencies (Details Textual) (USD $) In Millions, unless otherwise specified	0 Months Ended	3 Months Ended	12 Months Ended
	Mar. 22, 2013 sqft	Dec. 31, 2013	Dec. 31, 2014	Dec. 31, 2013	Mar. 31, 2013
Commitments and Contingencies Disclosure [Abstract]
Number of years of lease of corporate headquarters	6 years
Area of leased office building	192,000
Purchase price of property at end of Lease Term					$ 41.2
Percentage of Lease Balance as final payment end of lease term					86.00%
Expense for known and future asbestos-related litigation		6.3	0.9	6.3
Estimated probable liability for a supplier quality issue, minimum			2.2
Estimated probable liability for a supplier quality issue, maximum			6
Accrued product liability			2.2
Reimbursement receivable from supplier			$ 2.2

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Consolidated Statements of Operations (USD $) In Millions, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2014		Dec. 31, 2013		Dec. 31, 2012
Income Statement [Abstract]
Net sales	$ 3,367.4	[1]	$ 3,199.1	[1]	$ 2,949.4	[1]
Cost of goods sold	2,464.1		2,337.9		2,227.1
Gross profit	903.3		861.2		722.3
Operating expenses:
Selling, general and administrative expenses	573.7		570.1		507.0
Other items, net	6.8		9.3		2.5
Restructuring charges	1.9		5.0		4.2
Income from equity method investments	(13.8)		(12.2)		(10.5)
Operational income from continuing operations	334.7		289.0		219.1
Interest expense, net	17.2		14.5		17.1
Other expense, net	(0.1)		0.2		0.3
Income from continuing operations before income taxes	317.6		274.3		201.7
Provision for income taxes	109.5		94.4		66.7
Income from continuing operations	208.1		179.9		135.0
Discontinued operations:
Loss from discontinued operations before income taxes	(3.7)		(13.3)		(64.9)
Benefit from income taxes	(1.4)		(5.2)		(19.9)
Loss from discontinued operations	(2.3)		(8.1)		(45.0)
Net income	$ 205.8		$ 171.8		$ 90.0
Earnings per share – Basic:
Income from continuing operations	$ 4.35		$ 3.61		$ 2.66
Loss from discontinued operations	$ (0.05)		$ (0.16)		$ (0.89)
Net income	$ 4.30		$ 3.45		$ 1.77
Earnings per share – Diluted:
Income from continuing operations	$ 4.28		$ 3.55		$ 2.63
Loss from discontinued operations	$ (0.05)		$ (0.16)		$ (0.88)
Net income	$ 4.23		$ 3.39		$ 1.75
Average shares outstanding:
Basic	47.9		49.8		50.7
Diluted	48.6		50.6		51.4
Cash dividends declared per share	$ 1.14		$ 0.92		$ 0.76

[1] On a consolidated basis, no revenue from transactions with a single customer were 10% or greater of our consolidated net sales for any of the periods presented.

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Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

Goodwill and Intangible Assets:

Goodwill

The changes in the carrying amount of goodwill in 2014 and 2013, in total and by segment, are summarized in the table below (in millions):

Segment:	Balance at December 31, 2012 (2)		Acquisitions / (Dispositions)		Other(1)			Balance at December 31, 2013		Acquisitions / (Dispositions)		Other(1)			Balance at December 31, 2014
Residential Heating & Cooling	$	26.1	$	—	$	—		$	26.1	$	—	$	—		$	26.1
Commercial Heating & Cooling	63.8		—		0.8			64.6		—		(2.3		)	62.3
Refrigeration	133.9		—		(7.8		)	126.1		—		(5.1		)	121.0
	$	223.8	$	—	$	(7.0	)	$	216.8	$	—	$	(7.4	)	$	209.4

⁽¹⁾ Other consists of changes in foreign currency translation rates.

⁽²⁾ The goodwill balances in the table above are presented net of accumulated impairment charges of $15.7 million, all of which relate to impairments in periods prior to 2012.

We reviewed our reporting unit structure as part of our annual goodwill impairment testing. We identified several components one level below our operating segments which were determined to be reporting units. We then performed our analysis to determine the proper aggregation of our reporting units, which considered similar economic and other characteristics, including product types, gross profits, production processes, customer types, distribution processes, and regulatory environments. Our analysis incorporated qualitative and quantitative measures to evaluate economic similarity and concluded that our reporting units continue to be equivalent to our operating segments.

A qualitative review of impairment indicators was performed in 2014 for the Residential Heating & Cooling and the Commercial Heating & Cooling segments, and we determined that it was not more likely than not the fair values of our reporting units, individually or collectively, were less than their carrying values. Accordingly, a quantitative impairment analysis was not performed for these segments. Due to the softening of the North American supermarket and Australian wholesale businesses, a quantitative impairment analysis was performed for the Refrigeration segment using the discounted cash flow approach. The Refrigeration segment was not at risk of failing step one of the quantitative impairment test, and no impairments were recognized as part of the annual test. No other indicators of impairment were identified from the date of our annual impairment test through December 31, 2014. Also, we did not record any goodwill impairments related to continuing operations in 2012 or 2013. Refer to Note 17 for information on goodwill related to discontinued operations.

Intangible Assets

As of December 31,2014 and 2013, there were $9.4 million of indefinite-lived intangible assets recorded in Other assets, net in the accompanying Consolidated Balance Sheets. These intangible assets consisted primarily of trademarks and are not subject to amortization.

Identifiable intangible and other assets subject to amortization were recorded in Other assets, net in the accompanying Consolidated Balance Sheets and were comprised of the following (in millions):

	As of December 31,
	2014							2013
	Gross Amount		Accumulated Amortization			Net Amount		Gross Amount		Accumulated Amortization			Net Amount
Deferred financing costs	$	5.4	$	(1.5	)	$	3.9	$	5.0	$	(2.3	)	$	2.7
Customer relationships	42.6		(23.1		)	19.5		42.6		(20.6		)	22.0
Patents and others	12.0		(7.6		)	4.4		10.3		(7.2		)	3.1
Total	$	60.0	$	(32.2	)	$	27.8	$	57.9	$	(30.1	)	$	27.8

Amortization expense related to these intangible and other assets was as follows (in millions):

	For the Years Ended December 31,
	2014		2013		2012
Amortization expense	$	3.9	$	3.9	$	3.8

Estimated amortization expense for the next five years and thereafter is as follows (in millions):

Estimated Future Amortization Expense:
2015	$	3.8
2016	3.7
2017	3.5
2018	3.4
2019	3.2
Thereafter	10.2

We did not have any impairments of intangible assets related to continuing operations in 2014, 2013, or 2012. See Note 17 for information on impairments of intangible assets related to discontinued operations.

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Inventories

12 Months Ended

Dec. 31, 2014

Inventory Disclosure [Abstract]

Inventories

Inventories:

The components of inventories are as follows (in millions):

	As of December 31,
	2014			2013
Finished goods	$	338.2		$	251.4
Work in process	8.1			11.8
Raw materials and parts	182.6			188.9
Total	528.9			452.1
Excess of current cost over last-in, first-out cost	(65.6		)	(73.3		)
Total inventories, net	$	463.3		$	378.8

The Company recorded pre-tax loss of $0.9 million in 2014, pre-tax income of 0.3 million in 2013 and pre-tax loss of $0.1 million in 2012 from LIFO inventory liquidations.

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Reportable Business Segments (Details 6) (USD $) In Millions, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2014		Dec. 31, 2013		Dec. 31, 2012
Summary of financial information relating to geographic area based operations
Total net sales to external customers	$ 812.8	$ 898.4	$ 960.7	$ 695.4	$ 749.5	$ 868.0	$ 913.1	$ 668.4	$ 3,367.4	[1]	$ 3,199.1	[1]	$ 2,949.4	[1]
Total property, plant and equipment, net	358.6				335.5				358.6		335.5		298.2
United States [Member]
Summary of financial information relating to geographic area based operations
Total net sales to external customers									2,576.4		2,382.0		2,147.2
Total property, plant and equipment, net	243.4				230.3				243.4		230.3		227.9
Mexico [Member]
Summary of financial information relating to geographic area based operations
Total property, plant and equipment, net	52.4				39.7				52.4		39.7		28.0
Canada [Member]
Summary of financial information relating to geographic area based operations
Total net sales to external customers									236.3		232.3		226.7
Total property, plant and equipment, net	0.6				0.6				0.6		0.6		0.6
International [Member]
Summary of financial information relating to geographic area based operations
Total net sales to external customers									554.7		584.8		575.5
Total property, plant and equipment, net	$ 62.2				$ 64.9				$ 62.2		$ 64.9		$ 41.7

[1] On a consolidated basis, no revenue from transactions with a single customer were 10% or greater of our consolidated net sales for any of the periods presented.

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Stock Repurchases

12 Months Ended

Dec. 31, 2014

Stockholders' Equity Note [Abstract]

Stock Repurchases

Stock Repurchases:

Our Board of Directors has authorized a total of $1.4 billion towards the repurchase of shares of our common stock (collectively referred to as the "Share Repurchase Plans"), including a $700.0 million share repurchase authorization in October 2014. The Share Repurchase Plans authorize open market repurchase transactions and do not have a stated expiration date. As of December 31, 2014, $395.9 million of shares may still be repurchased under the Share Repurchase Plans.

On October 20, 2014, we announced our plans for a new $450.0 million accelerated share repurchase program. For the years ended December 31, 2014 and 2013, we repurchased 5.2 million shares for $550.3 million and 1.7 million shares for $125.0 million, respectively, under the Share Repurchase Plans. The final number of shares to be repurchased and the aggregate cost to LII will be based on LII's volume-weighted average stock price during the term of the transaction, which is expected to be completed in the second half of 2015.

We also repurchased 0.2 million shares for $22.4 million and 0.2 million shares for $12.0 million for the years ended December 31, 2014 and 2013, respectively, from employees who surrendered their shares to satisfy minimum tax withholding obligations upon the vesting of stock-based compensation awards.

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Lines of Credit and Financing Arrangements

12 Months Ended

Dec. 31, 2014

Debt Disclosure [Abstract]

Lines of Credit and Financing Arrangements

Lines of Credit and Financing Arrangements:

The following tables summarize our outstanding debt obligations and the classification in the accompanying Consolidated Balance Sheets (in millions):

	As of December 31,
	2014		2013
Short-Term Debt:
Asset Securitization Program	$	220.0	$	160.0
Foreign obligations	6.6		5.9
Total short-term debt	$	226.6	$	165.9
Current maturities of long-term debt:
Capital lease obligations	$	1.5	$	1.3
Domestic credit facility	$	22.5	$	—
Long-Term Debt:
Capital lease obligations	$	15.5	$	16.2
Domestic credit facility	459.5		17.0
Senior unsecured notes	200.0		200.0
Total long-term debt	$	675.0	$	233.2
Total debt	$	925.6	$	400.4

As of December 31, 2014, the aggregate amounts of required principal payments on total debt were as follows (in millions):

2015	$	250.6
2016	31.2
2017	230.0
2018	32.6
2019	369.5
Thereafter	11.7

Short-Term Debt

Short Term Facility

On October 20, 2014, Lennox International Inc. (the “Company”) entered into a short term loan agreement (the “Short-Term Facility”) with JPMorgan Chase Bank, N.A., as administrative agent, and Morgan Stanley Bank, N.A. and the other lenders named therein, to borrow $250.0 million. The Short-Term Facility had a maturity date of March 31, 2015, but was prepaid in full without penalty in November 2014. The term loan bore interest at a variable base rate or a variable rate based on the London interbank offered rate, at the Company’s election, plus a spread.

Foreign Obligations

Through several of our foreign subsidiaries, we have available to us facilities to assist in financing seasonal borrowing needs for our foreign locations. We had $6.6 million and $5.9 million of foreign obligations as of December 31, 2014 and 2013, respectively, that were primarily borrowings under non-committed facilities. Proceeds on these facilities were $18.1 million, $18.3 million and $18.5 million during the years ended December 31, 2014, 2013 and 2012, respectively. Repayments on the facilities were $16.6 million, $16.3 million and $18.3 million during the years ended December 31, 2014, 2013 and 2012, respectively.

Asset Securitization Program

Under the Asset Securitization Program (“ASP”), we are eligible to sell beneficial interests in a portion of our trade accounts receivable to participating financial institutions for cash. The ASP is subject to annual renewal and contains a provision whereby we retain the right to repurchase all of the outstanding beneficial interests transferred. Our continued involvement with the transferred assets includes servicing, collection and administration of the transferred beneficial interests. The accounts receivable securitized under the ASP are high-quality domestic customer accounts that have not aged significantly. The receivables represented by the retained interest that we service are exposed to the risk of loss for any uncollectible amounts in the pool of receivables sold under the ASP. The fair values assigned to the retained and transferred interests are based on the sold accounts receivable carrying value given the short term to maturity and low credit risk. The sale of the beneficial interests in our trade accounts receivable are reflected as secured borrowings in the accompanying Consolidated Balance Sheets and proceeds received are included in cash flows from financing activities in the accompanying Consolidated Statements of Cash Flows.

In November 2014, we amended the ASP, extending its term to November 13, 2015 and increasing the maximum securitization amount from a range of $160.0 million to $220.0 million to a range of $180.0 million to $220.0 million, depending on the period. The maximum capacity under the ASP is the lesser of the maximum securitization amount or 100% of the net pool balance less reserves, as defined by the ASP. Eligibility for securitization is limited based on the amount and quality of the qualifying accounts receivable and is calculated monthly. The eligible amounts available and beneficial interests sold were as follows (in millions):

	As of December 31,
	2014		2013
Eligible amount available under the ASP on qualified accounts receivable	$	220.0	$	160.0
Beneficial interest sold	220.0		160.0
Remaining amount available	$	—	$	—

We pay certain discount fees to use the ASP and to have the facility available to us. These fees relate to both the used and unused portions of the securitization. The used fee is based on the beneficial interest sold and calculated on either the average LIBOR rate or floating commercial paper rate determined by the purchaser of the beneficial interest, plus a program fee of 0.60%. The average rates as of December 31, 2014 and 2013 were 0.79% and 0.78%, respectively. The unused fee is based on 101% of the maximum available amount less the beneficial interest sold and calculated at a 0.30% fixed rate throughout the term of the agreement. In addition, a 0.05% unused fee is charged on incremental available amounts above $180.0 million during certain months of the year. We recorded these fees in Interest expense, net in the accompanying Consolidated Statements of Operations.

The ASP contains certain restrictive covenants relating to the quality of our accounts receivable and cross-default provisions with our Fifth Amended and Restated Credit Facility Agreement ("Domestic Credit Facility"), senior unsecured notes and any other indebtedness we may have over $75.0 million. The administrative agent under the ASP is also a participant in our Domestic Credit Facility. The participating financial institutions have investment grade credit ratings. We continue to evaluate their credit ratings and have no reason to believe they will not perform under the ASP. As of December 31, 2014, we were in compliance with all covenant requirements.

Long-Term Debt

Domestic Credit Facility

On November 13, 2014, we replaced our $650 million Domestic Revolving Credit Facility with a $950 million Domestic Credit Facility, which consists of a $650 million revolving credit facility and a $300 million term loan and matures in November 2019. Under our $950 million Domestic Credit Facility, we had outstanding borrowings of $482.0 million as well as 27.2 million committed to standby letters of credit as of December 31, 2014. Subject to covenant limitations, $440.8 million was available for future borrowings. The unsecured $300 million term loan also matures on the Maturity Date and requires quarterly principal repayments of $7.5 million beginning on June 30, 2015. The revolving credit facility allows up to $150 million of letters of credit to be issued and also includes a subfacility for swingline loans of up to $65 million. Additionally, at our request and subject to certain conditions, the commitments under the Domestic Credit Facility may be increased by a maximum of $350 million as long as existing or new lenders agree to provide such additional commitments.

Our weighted average borrowing rate on the facility was as follows:

	As of December 31,
	2014		2013
Weighted average borrowing rate	1.88	%	1.17	%

Our Domestic Credit Facility is guaranteed by certain of our subsidiaries and contains financial covenants relating to leverage and interest coverage. Other covenants contained in the Domestic Credit Facility restrict, among other things, certain mergers, asset dispositions, guarantees, debt, liens, and affiliate transactions. The financial covenants require us to maintain a defined Consolidated Indebtedness to Adjusted EBITDA Ratio and a Cash Flow (defined as EBITDA minus capital expenditures) to Net Interest Expense Ratio. The required ratios under our Domestic Credit Facility are detailed below:

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

Our Domestic Credit Facility contains customary events of default. These events of default include nonpayment of principal or interest, breach of covenants or other restrictions or requirements, default on certain other indebtedness or receivables securitizations (cross default), and bankruptcy. A cross default under our Domestic Credit Facility could occur if:

• 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.

Each of our major debt agreements contains provisions by which a default under one agreement causes a default in the others (a cross default). If a cross default under the Domestic Credit Facility, our senior unsecured notes, the Lake Park Renewal or our ASP were to occur, it could have a wider impact on our liquidity than might otherwise occur from a default of a single debt instrument or lease commitment.

If any event of default occurs and is continuing, lenders with a majority of the aggregate commitments may require the administrative agent to terminate our right to borrow under our Domestic Credit Facility and accelerate amounts due under our Domestic Credit Facility (except for a bankruptcy event of default, in which case such amounts will automatically become due and payable and the lenders’ commitments will automatically terminate). As of December 31, 2014, we were in compliance with all covenant requirements.

Senior Unsecured Notes

We issued $200.0 million of senior unsecured notes in May 2010 through a public offering. Interest is paid semiannually on May 15 and November 15 at a fixed interest rate of 4.90% per annum. These notes mature on May 15, 2017. The notes are guaranteed, on a senior unsecured basis, by each of our domestic subsidiaries that guarantee payment by us of any indebtedness under our Domestic 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. As of December 31, 2014, we were in compliance with all covenant requirements.

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Income Taxes (Details Textual) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Income Tax Disclosure [Abstract]
Undistributed Earnings of Foreign Subsidiaries	$ 122
Tax effected in state net operating loss carryforwards	3.8	5.0
Tax effected in foreign net operating loss carryforwards	18.5	21.8
Future foreign taxable income	71.2
Domestic Taxable Income	201.6	198.7
Unrecognized tax benefits that would impact the effective tax rate	1.2
Interest and penalties in income tax expense	$ 0.2

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Accrued Expenses (Notes)

12 Months Ended

Dec. 31, 2014

Payables and Accruals [Abstract]

Accrued Expenses

Accrued Expenses:

The significant components of Accrued expenses are presented below (in millions):

	As of December 31,
	2014		2013
Accrued compensation and benefits	$	73.3	$	85.7
Self insurance reserves	13.0		13.4
Deferred income	11.6		9.8
Accrued warranties	27.3		28.7
Accrued product quality reserves	4.2		3.4
Accrued Sales, Use and VAT taxes	8.7		7.1
Accrued rebates and promotions	45.4		37.0
Derivative contracts	7.4		1.5
Other	48.1		45.5
Total Accrued expenses	$	239.0	$	232.1

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Losses and Other Expenses, net (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Summary of Losses (Gains) and Other Expenses, net
Realized losses on settled futures contracts	$ 0.8	$ 1.0	$ 1.5
Foreign currency exchange losses	1.6	0.5	0.8
Losses (gains) on disposal of fixed assets	(0.3)	(1.0)	0.4
Unrealized Gain (Loss) on Derivatives and Commodity Contracts	(0.6)	(0.4)	2.2
Liability for Asbestos and Environmental Claims, Net, Incurred Loss	0.9	6.3	0
Acquisition expenses	0	0.2	0.1
Special legal contingency charge	0.9	1.2	1.2
Environmental Remediation Expense	2.0	0	0
Other Expenses	0.3	0.7	0.7
Other Operating Income (Expense), Net	$ 6.8	$ 9.3	$ 2.5

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Summary of Significant Accounting Policies (Details Textual) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Accounting Policies [Abstract]
LIFO Inventory Amount	$ 212.9	$ 187.3
Minimum Product Warranties	1 year
Maximum Product Warranties	20 years

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Condensed Consolidating Financial Statements (Details) (USD $) In Millions, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Current assets:
Cash and cash equivalents	$ 37.5	$ 38.0	$ 51.8	$ 45.0
Accounts and notes receivable, net	421.4	408.1
Inventories, net	463.3	378.8
Deferred income taxes, net	32.5	24.5
Other assets	59.3	53.0
Total current assets	1,014.0	902.4
Property, plant and equipment, net	358.6	335.5	298.2
Goodwill	209.4	216.8	223.8
Investments in subsidiaries	0	0
Deferred income taxes	97.5	88.5
Other assets, net	84.8	83.5
Intercompany receivables (payables), net	0	0
Total assets	1,764.3	1,626.7	1,691.9
Current Liabilities:
Short-term debt	226.6	165.9
Current maturities of long-term debt	24.0	1.3
Accounts payable	324.3	283.1
Accrued expenses	239.0	232.1
Income taxes payable	13.4	31.6
Total current liabilities	827.3	714.0
Long-term debt	675.0	233.2
Post-retirement benefits, other than pensions	4.5	4.6
Pensions	129.9	70.0
Other liabilities	118.6	119.2
Total liabilities	1,755.3	1,141.0
Commitments and contingencies
Total stockholders’ equity	9.0	485.7	498.3	469.0
Total liabilities and stockholders' equity	1,764.3	1,626.7
Parent [Member]
Current assets:
Cash and cash equivalents	1.0	1.1	1.0	1.0
Accounts and notes receivable, net	0	0
Inventories, net	0	0
Deferred income taxes, net	2.8	0.9
Other assets	3.6	3.4
Total current assets	7.4	5.4
Property, plant and equipment, net	0	0
Goodwill	0	0
Investments in subsidiaries	978.1	1,138.8
Deferred income taxes	0.5	0
Other assets, net	5.2	4.2
Intercompany receivables (payables), net	(280.4)	(460.6)
Total assets	710.8	687.8
Current Liabilities:
Short-term debt	0	0
Current maturities of long-term debt	22.5	0
Accounts payable	13.4	11.8
Accrued expenses	9.0	3.3
Income taxes payable	(3.7)	(30.3)
Total current liabilities	41.2	(15.2)
Long-term debt	659.5	217.0
Post-retirement benefits, other than pensions	0	0
Pensions	0	0
Other liabilities	1.1	0.3
Total liabilities	701.8	202.1
Total stockholders’ equity	9.0	485.7
Total liabilities and stockholders' equity	710.8	687.8
Guarantor Subsidiaries [Member]
Current assets:
Cash and cash equivalents	11.5	10.5	13.4	9.7
Accounts and notes receivable, net	12.3	12.8
Inventories, net	350.6	253.6
Deferred income taxes, net	27.3	21.2
Other assets	45.7	38.4
Total current assets	447.4	336.5
Property, plant and equipment, net	269.0	246.4
Goodwill	140.4	140.4
Investments in subsidiaries	263.5	337.5
Deferred income taxes	90.8	76.9
Other assets, net	61.0	64.3
Intercompany receivables (payables), net	302.4	434.0
Total assets	1,574.5	1,636.0
Current Liabilities:
Short-term debt	0	0
Current maturities of long-term debt	1.2	1.0
Accounts payable	237.8	187.8
Accrued expenses	175.5	168.4
Income taxes payable	34.7	75.7
Total current liabilities	449.2	432.9
Long-term debt	15.3	15.8
Post-retirement benefits, other than pensions	4.5	4.6
Pensions	117.6	58.4
Other liabilities	118.7	119.4
Total liabilities	705.3	631.1
Total stockholders’ equity	869.2	1,004.9
Total liabilities and stockholders' equity	1,574.5	1,636.0
Non-Guarantor Subsidiaries [Member]
Current assets:
Cash and cash equivalents	25.0	26.4	37.4	34.3
Accounts and notes receivable, net	409.1	395.3
Inventories, net	119.7	128.4
Deferred income taxes, net	7.4	5.7
Other assets	67.2	70.2
Total current assets	628.4	626.0
Property, plant and equipment, net	89.6	89.1
Goodwill	69.0	76.4
Investments in subsidiaries	(0.6)	(0.6)
Deferred income taxes	15.8	20.2
Other assets, net	20.1	16.4
Intercompany receivables (payables), net	(22.0)	26.6
Total assets	800.3	854.1
Current Liabilities:
Short-term debt	226.6	165.9
Current maturities of long-term debt	0.3	0.3
Accounts payable	73.1	83.5
Accrued expenses	54.5	60.4
Income taxes payable	47.5	49.9
Total current liabilities	402.0	360.0
Long-term debt	0.2	0.4
Post-retirement benefits, other than pensions	0	0
Pensions	12.3	11.6
Other liabilities	11.7	11.3
Total liabilities	426.2	383.3
Total stockholders’ equity	374.1	470.8
Total liabilities and stockholders' equity	800.3	854.1
Eliminations [Member]
Current assets:
Cash and cash equivalents	0	0	0	0
Accounts and notes receivable, net	0	0
Inventories, net	(7.0)	(3.2)
Deferred income taxes, net	(5.0)	(3.3)
Other assets	(57.2)	(59.0)
Total current assets	(69.2)	(65.5)
Property, plant and equipment, net	0	0
Goodwill	0	0
Investments in subsidiaries	(1,241.0)	(1,475.7)
Deferred income taxes	(9.6)	(8.6)
Other assets, net	(1.5)	(1.4)
Intercompany receivables (payables), net	0	0
Total assets	(1,321.3)	(1,551.2)
Current Liabilities:
Short-term debt	0	0
Current maturities of long-term debt	0	0
Accounts payable	0	0
Accrued expenses	0	0
Income taxes payable	(65.1)	(63.7)
Total current liabilities	(65.1)	(63.7)
Long-term debt	0	0
Post-retirement benefits, other than pensions	0	0
Pensions	0	0
Other liabilities	(12.9)	(11.8)
Total liabilities	(78.0)	(75.5)
Total stockholders’ equity	(1,243.3)	(1,475.7)
Total liabilities and stockholders' equity	$ (1,321.3)	$ (1,551.2)

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Employee Benefit Plans (Details 9) (USD $) In Millions, unless otherwise specified	Dec. 31, 2014
Pension Benefits [Member]
Summary of expected future benefit payments
2015	$ 18.0
2016	18.3
2017	18.9
2018	19.5
2019	20.0
2020-2024	124.9
Other Postretirement Benefit Plan [Member]
Summary of expected future benefit payments
2015	0.9
2016	0.7
2017	0.6
2018	0.6
2019	0.5
2020-2024	$ 1.7

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Property, Plant and Equipment

12 Months Ended

Dec. 31, 2014

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment

Property, Plant and Equipment:

Components of Property, plant and equipment, net were as follows (in millions):

	As of December 31,
	2014			2013
Land	$	38.3		$	39.5
Buildings and improvements	215.0			202.5
Machinery and equipment	681.8			634.0
Capital leases	27.0			25.2
Construction in progress and equipment not yet in service	50.6			51.6
Total	1,012.7			952.8
Less accumulated depreciation	(654.1		)	(617.3		)
Property, plant and equipment, net	$	358.6		$	335.5

No impairment charges were recorded in 2014, 2013 or 2012.

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Joint Ventures and Other Equity Investments

12 Months Ended

Dec. 31, 2014

Equity Method Investments and Joint Ventures [Abstract]

Joint Ventures and Other Equity Investments

Joint Ventures and Other Equity Investments:

We participate in two joint ventures, the largest located in the U.S. and the other in Mexico, that are engaged in the manufacture and sale of compressors, unit coolers and condensing units. We exert significant influence over these affiliates based upon our respective 25% and 50% ownerships, but do not control them due to venture partner participation. Accordingly, these joint ventures have been accounted for under the equity method and their financial position and results of operations are not consolidated.

The combined balance of equity method investments included in Other assets, net totaled (in millions):

	As of December 31,
	2014		2013
Equity method investments	$	30.9	$	28.0

We purchase compressors from our U.S. joint venture for use in certain of our products. The amounts of purchases included in Cost of goods sold in the Consolidated Statements of Operations were as follows (in millions):

	For the Years Ended December 31,
	2014		2013		2012
Purchases of compressors from joint venture	$	114.7	$	96.7	$	90.4

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Earnings Per Share (Details 1) (USD $) In Millions, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Weighted-average number of shares	0.3	0.1	0.1
Minimum [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities Excluded from Computation of Net Income, Per Outstanding Unit, Amount	81.11	81.11	51.11
Maximum [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities Excluded from Computation of Net Income, Per Outstanding Unit, Amount	92.64	81.14	51.40

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Derivatives

12 Months Ended

Dec. 31, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives

Derivatives:

Objectives and Strategies for Using Derivative Instruments

Commodity Price Risk. We utilize a cash flow hedging program to mitigate our exposure to volatility in the prices of metal commodities used in our production processes. Our hedging program includes the use of futures contracts to lock in prices, and as a result, we are subject to derivative losses should the metal commodity prices decrease and gains should the prices increase. We utilize a dollar cost averaging strategy so that a higher percentage of commodity price exposures are hedged near-term with lower percentages hedged at future dates. This strategy allows for protection against near-term price volatility while allowing us to adjust to market price movements over time.

Interest Rate Risk. A portion of our debt bears interest at variable interest rates, and as a result, we are subject to variability in the cash paid for interest. To mitigate a portion of that risk, we may choose to engage in an interest rate swap hedging strategy to eliminate the variability of interest payment cash flows. Prior to 2013, we used an interest rate swap hedge to fix the interest payments associated with the first $100 million of the total variable-rate debt outstanding under our revolving credit facility tied to changes in the benchmark interest rate. The variable portion of the interest rate swap was tied to the 1-Month LIBOR (the benchmark interest rate). On a monthly basis, the interest rates for both the interest rate swap and the underlying debt were reset, the swap was settled with the counterparty, and the interest was paid. The interest rate swap was classified as a cash flow hedge and it expired on October 12, 2012. Subsequently, we have not hedged against interest rate risk.

Foreign Currency Risk. Foreign currency exchange rate movements create a degree of risk by affecting the U.S. dollar value of assets and liabilities arising in foreign currencies. We seek to mitigate the impact of currency exchange rate movements on certain short-term transactions by periodically entering into foreign currency forward contracts. These forward contracts are not designated as hedges and generally expire during the quarter that we enter into them. By entering into forward contracts, we lock in exchange rates that would otherwise cause losses should the U.S. dollar appreciate and gains should the U.S. dollar depreciate.

Cash Flow Hedges

We have commodity futures contracts designated as cash flows hedges that are scheduled to mature through June 2016. Unrealized gains or losses from our cash flow hedges are included in accumulated other comprehensive income (“AOCI”) and are expected to be reclassified into earnings within the next 18 months based on the prices of the commodities at the settlement dates.

We recorded the following amounts related to our cash flow hedges in AOCI (in millions):

	As of December 31,
	2014			2013
Unrealized losses on unsettled contracts	$	7.2		$	0.8
Income tax expense (benefit)	(2.6		)	(0.2		)
Losses included in AOCI, net of tax (1)	$	4.6		$	0.6

⁽¹⁾ Assuming commodity prices remain constant, we expect to reclassify $4.2 million of derivative losses into earnings within the next 12 months.

We had the following outstanding commodity futures contracts designated as cash flow hedges (in millions of pounds):

	As of December 31,
	2014	2013
Copper	29.4	22.9

Derivatives not Designated as Cash Flow Hedges

For commodity derivatives not designated as cash flow hedges, we follow the same hedging strategy as derivatives designated as cash flow hedges, except that we elect not to designate them as cash flow hedges at the inception of the arrangement. We had

the following outstanding commodity futures contracts not designated as cash flow hedges (in millions of pounds):

	As of December 31,
	2014	2013
Copper	2.9	2.0
Aluminum	2.2	2.7

We had the following outstanding foreign currency forward contracts not designated as cash flow hedges (in millions):

	As of December 31,
	2014	2013
Notional amounts (in local currency):
Brazilian Real	8.7	1.2
Mexican Peso	229.7	130.0
United States Dollar	4.5	—
Euro	3.6	—
British Pound	—	3.4
Russian Ruble	80.8	—
Indian Rupee	—	28.0
Polish Zloty	30.6	32.6

Information About the Locations and Amounts of Derivative Instruments

The following tables provide the locations and amounts of derivative fair values in the Consolidated Balance Sheets and derivative gains and losses in the Consolidated Statements of Operations (in millions):

	Fair Values of Derivative Instruments as of December 31 (1)
	Derivatives Designated as Hedging Instruments				Derivatives Not Designated  as Hedging Instruments
	2014		2013		2014		2013
Current Assets:
Other assets
Commodity futures contracts	$	—	$	0.1	$	—	$	—
Foreign currency forward contracts	—		—		0.3		0.1
Non-Current Assets:
Other assets, net
Commodity futures contracts	—		0.3		—		—
Total Assets	$	—	$	0.4	$	0.3	$	0.1
Current Liabilities:
Accrued expenses
Commodity futures contracts	$	6.7	$	1.2	$	0.7	$	0.3
Foreign currency forward contracts	—		—		—		—
Non-Current Liabilities:
Other liabilities
Commodity futures contracts	0.5		—		0.1		—
Total Liabilities	$	7.2	$	1.2	$	0.8	$	0.3

⁽¹⁾ All derivative instruments are classified as Level 2 within the fair value hierarchy. See Note 20 for more information on fair value measurements.

Derivatives in Cash Flow Hedging Relationships
	For the Years Ended December 31,
	2014		2013		2012
Amount of Loss (Gain) Reclassified from AOCI into Income (Effective Portion):
Commodity futures contracts (1)	$	5.8	$	4.2	$	6.0
Interest rate swap (2)	—		—		1.9
	$	5.8	$	4.2	$	7.9
Amount of (Gain) Loss Recognized in Income on Derivatives (Ineffective Portion):
Commodity futures contracts (3)	$	0.1	$	0.2	$	(0.1	)

Derivatives Not Designated as Hedging Instruments
	For the Years Ended December 31,
	2014			2013		2012
Amount of Loss (Gain) Recognized in Income on Derivatives:
Commodity futures contracts (3)	$	1.2		$	1.2	$	(0.5	)
Foreign currency forward contracts (3)	(0.8		)	0.1		0.4
	$	0.4		$	1.3	$	(0.1	)

⁽¹⁾ The loss (gain) was recorded in Cost of goods sold in the accompanying Consolidated Statements of Operations.

⁽²⁾ The loss was recorded in Interest expense, net in the accompanying Consolidated Statements of Operations.

⁽³⁾ The loss (gain) was recorded in Losses and other expenses, net in the accompanying Consolidated Statements of Operations.

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Goodwill and Intangible Assets (Details 2) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization expense	$ 3.9	$ 3.9	$ 3.8

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Stock-based Compensation (Details 2) (Performance Shares [Member], USD $) In Millions, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2014		Dec. 31, 2013	Dec. 31, 2012
Performance Shares [Member]
Schedule of information on stock units
Undistributed, Beginning Balance	0.7
Undistributed, Weighted-Average Grant Date Fair Value per Share, Beginning Balance	$ 47.83
Granted	0.1
Granted, Weighted-Average Grant Date Fair Value per Share	$ 88.26		$ 78.00	$ 48.64
Additional shares earned	0.2
Additional shares earned, Weighted-Average Grant Date Fair Value per Share	$ 31.78
Distributed	(0.2)
Distributed, Weighted-Average Grant Date Fair Value per Share	$ 44.85
Forfeited	0
Forfeited, Weighted-Average Grant Date Fair Value per Share	$ 0.00
Undistributed, Ending Balance	0.8	[1]	0.7
Undistributed, Weighted-Average Grant Date Fair Value per Share, Ending Balance	$ 49.47	[1]	$ 47.83

[1] Undistributed performance share units include approximately 0.4 million units with a weighted-average grant date fair value of $68.27 per share that had not yet vested and 0.4 million units that have vested but were not yet distributed.

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Commitments and Contingencies (Details) (USD $) In Millions, unless otherwise specified	Dec. 31, 2014
Operating Leases
2015, Operating leases	$ 37.8
2016, Operating leases	29.4
2017, Operating leases	24.0
2018, Operating leases	18.5
2019, Operating leases	12.1
Thereafter, Operating Leases	19.7
Total minimum lease payments	141.5
Capital Leases
2015, Capital leases	1.5
2016, Capital leases	0.8
2017, Capital leases	0.5
2018, Capital leases	0.3
2019, Capital leases	0.1
Thereafter, Capital leases	14.3
Total minimum lease payments, Capital leases	17.5
Less amount representing interest	(0.5)
Present value of minimum payments	$ 17.0

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Goodwill and Intangible Assets (Details Textual) (USD $) In Millions, unless otherwise specified	Dec. 31, 2014
Goodwill and Intangible Assets Disclosure [Abstract]
Accumulated impairment losses	$ 15.7
Intangible assets, primarily consisting of trademarks	$ 9.4

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Employee Benefit Plans (Details 1) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Changes in plan assets:
Fair value of plan assets at end of year	$ 315.0	$ 302.8
Pension Plans, Defined Benefit [Member]
Pension and Postretirement Benefit Plans recognized in financial statements
Accumulated benefit obligation	439.6	367.3
Changes in projected benefit obligation:
Benefit obligation at beginning of year	374.6	413.9
Service cost	4.2	5.2	5.8
Interest cost	17.7	16.2	17.5
Plan participants' contributions	0	0
Amendments	0	0
Other	0	0.1
Actuarial (gain) loss	77.0	(39.4)
Effect of exchange rates	(4.3)	(0.7)
Divestiture	0	0
Settlements and curtailments	(0.8)	(1.6)
Benefits paid	(21.9)	(19.1)
Benefit obligation at end of year	446.5	374.6	413.9
Changes in plan assets:
Fair value of plan assets at beginning of year	302.8	276.8
Actual gain return on plan assets	23.3	37.4
Employer contribution	14.5	9.9
Plan participants' contributions	0	0
Effect of exchange rates	(2.9)	(0.6)
Divestiture	0	0
Plan settlements	(0.8)	(1.6)
Benefits paid	(21.9)	(19.1)
Fair value of plan assets at end of year	315.0	302.8	276.8
Funded status / net amount recognized	(131.5)	(71.8)
Net amount recognized consists of:
Current liability	(1.6)	(1.8)
Non-current liability	(129.9)	(70.0)
Net amount recognized	(131.5)	(71.8)
Other Postretirement Benefit Plan [Member]
Changes in projected benefit obligation:
Benefit obligation at beginning of year	6.0	7.6
Service cost	0	0	0.2
Interest cost	0.2	0.2	0.4
Plan participants' contributions	0.6	0.7
Amendments	0	0
Other	0	0
Actuarial (gain) loss	0.6	0
Effect of exchange rates	0	0
Divestiture	0	0
Settlements and curtailments	0	0
Benefits paid	(2.0)	(2.5)
Benefit obligation at end of year	5.4	6.0	7.6
Changes in plan assets:
Fair value of plan assets at beginning of year	0	0
Actual gain return on plan assets	0	0
Employer contribution	1.4	1.8
Plan participants' contributions	0.6	0.7
Effect of exchange rates	0	0
Divestiture	0	0
Plan settlements	0	0
Benefits paid	(2.0)	(2.5)
Fair value of plan assets at end of year	0	0	0
Funded status / net amount recognized	(5.4)	(6.0)
Net amount recognized consists of:
Current liability	(0.9)	(1.4)
Non-current liability	(4.5)	(4.6)
Net amount recognized	$ (5.4)	$ (6.0)

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Goodwill and Intangible Assets (Details 1) (USD $) In Millions, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Finite-Lived Intangible Assets [Line Items]
Gross Amount	$ 60.0	$ 57.9
Accumulated Amortization	(32.2)	(30.1)
Net Amount	27.8	27.8
Deferred financing costs [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Amount	5.4	5.0
Accumulated Amortization	(1.5)	(2.3)
Net Amount	3.9	2.7
Customer Relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Amount	42.6	42.6
Accumulated Amortization	(23.1)	(20.6)
Net Amount	19.5	22.0
Patents and others [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Amount	12.0	10.3
Accumulated Amortization	(7.6)	(7.2)
Net Amount	$ 4.4	$ 3.1

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Lines of Credit and Financing Arrangements (Details 1) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Debt Proceeds [Line Items]
Proceeds from (Repayments of) Debt	$ 18.1	$ 18.3	$ 18.5
2014	250.6
2015	31.2
2016	230.0
2017	32.6
2018	369.5
Thereafter	$ 11.7

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Stock-Based Compensation (Details 11) (Stock Appreciation Rights [Member], USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Stock Appreciation Rights [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Instrinsic value of stock appreciation rights exercised	$ 27.3	$ 16.7	$ 14.4
Realized tax benefits from tax deductions	$ 10.4	$ 6.4	$ 5.5

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Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2014

Accounting Policies [Abstract]

Principles of Consolidation

Principles of Consolidation

The consolidated financial statements include the accounts of Lennox International Inc. and our majority-owned subsidiaries. All intercompany transactions, profits and balances have been eliminated.

Cash and Cash Equivalents

Cash and Cash Equivalents

We consider all highly liquid temporary investments with original maturity dates of three months or less to be cash equivalents. Cash and cash equivalents consisted primarily of bank deposits.

Accounts and Notes Receivable

Accounts and Notes Receivable

Accounts and notes receivable are shown in the accompanying Consolidated Balance Sheets, net of allowance for doubtful accounts. The allowance for doubtful accounts is generally established during the period in which receivables are recognized and is based on the age of the receivables and management's judgment on our ability to collect. Management considers the historical trends of write-offs and recoveries of previously written-off accounts, the financial strength of customers and projected economic and market conditions. We determine the delinquency status of receivables predominantly based on contractual terms and we write-off uncollectible receivables after management's review of our ability to collect, as noted above. We have no significant concentrations of credit risk within our accounts and notes receivable.

Inventories

Inventories

Inventory costs include material, labor, depreciation and plant overhead. Inventories of $212.9 million and $187.3 million as of December 31, 2014 and 2013, respectively, were valued at the lower of cost or market using the last-in, first-out (“LIFO”) cost method. The remainder of inventory is valued at the lower of cost or market with cost determined primarily using either the first-in, first-out (“FIFO”) or average cost methods.

We elected to use the LIFO cost method for our domestic manufacturing companies in 1974 and continued to elect the LIFO cost method for new operations through the late 1980s. The types of inventory costs that use LIFO include raw materials, purchased components, work-in-process, repair parts and finished goods. Since the late 1990s, we have adopted the FIFO cost method for all new domestic manufacturing operations (primarily acquisitions). Our operating entities with a previous LIFO election continue to use the LIFO cost method. We use the FIFO cost method for our foreign-based manufacturing facilities.

Property, Plant and Equipment

Property, Plant and Equipment

Property, plant and equipment is stated at cost, net of accumulated depreciation. Expenditures that increase the utility or extend the useful lives of fixed assets are capitalized while expenditures for maintenance and repairs are charged to expense as incurred.

Depreciation is computed using the straight-line method over the following estimated useful lives:

Buildings and improvements:
Buildings and improvements	5 to 30 years
Leasehold improvements	1 to 20 years
Machinery and equipment:
Computer hardware	3 to 5 years
Computer software	3 to 10 years
Factory machinery and equipment	1 to 15 years
Research and development equipment	5 to 10 years
Vehicles	3 to 8 years

We periodically review long-lived assets for impairment as events or changes in circumstances indicate that the carrying amount of such assets might not be recoverable. To assess recoverability, we compare the estimated expected future undiscounted cash flows identified with each long-lived asset or related asset group to the carrying amount of such assets. If the expected future cash flows do not exceed the carrying value of the asset or assets being reviewed, an impairment loss is recognized based on the excess of the carrying amount of the impaired assets over their fair value. See Note 5 for additional information on our property, plant and equipment.

Goodwill

Goodwill

Goodwill represents the excess of cost over fair value of assets from acquired businesses. Goodwill is not amortized, but is reviewed for impairment annually and whenever events or changes in circumstances indicate the asset may be impaired.

The annual goodwill impairment test was performed during the first quarter of 2014, and no impairment was recognized. During the third quarter of 2014, we changed the date of our annual goodwill impairment test from March 31^st to December 31^st. The change was made to more closely align the impairment testing date with the year-end results. The change in goodwill impairment testing date was deemed a change in accounting principle and did not delay, accelerate, or avoid a goodwill impairment charge. Management determined that the change in accounting principle was preferable under the circumstances and did not result in adjustments to our financial statements when applied retrospectively.

The provisions of the accounting standard for goodwill allow us to first assess qualitative factors to determine whether it is necessary to perform a two-step quantitative goodwill impairment test. As part of our qualitative assessment, we monitor economic, legal, regulatory and other factors, industry trends, our market capitalization, recent and forecasted financial performance of our reporting units and the timing and nature of our restructuring activities for LII as a whole and for each reporting unit.

For those reporting units which are evaluated using the two-step quantitative goodwill impairment test, we estimate reporting unit fair values using the discounted cash flow approach. The discounted cash flows used to estimate fair value are based on assumptions regarding each reporting unit’s estimated projected future cash flows and the estimated weighted-average cost of capital that a market participant would use in evaluating the reporting unit in a purchase transaction. The estimated weighted-average cost of capital is based on the risk-free interest rate and other factors such as equity risk premiums and the ratio of total debt to equity capital. In performing these impairment tests, we take steps to ensure that appropriate and reasonable cash flow projections and assumptions are used. We reconcile our estimated enterprise value to our market capitalization and determine the reasonableness of the cost of capital used by comparing to market data. We also perform sensitivity analyses on the key assumptions used, such as the weighted-average cost of capital and terminal growth rates. See Note 4 for additional information on our goodwill.

Intangible Assets

Intangible Assets

We amortize intangible assets and other assets with finite lives over their respective estimated useful lives to their estimated residual values, as follows:

Asset	Useful Life
Deferred financing costs	Effective interest method
Customer relationships	Straight-line method up to 12 years
Patents and others	Straight-line method up to 20 years

We periodically review intangible assets with estimable useful lives for impairment as events or changes in circumstances indicate that the carrying amount of such assets might not be recoverable. We assess recoverability by comparing the estimated expected undiscounted future cash flows identified with each intangible asset or related asset group to the carrying amount of such assets. If the expected future cash flows do not exceed the carrying value of the asset or assets being reviewed, an impairment loss is recognized based on the excess of the carrying amount of the impaired assets over their fair value. In assessing the fair value of these intangible assets, we must make assumptions that a market participant would make regarding estimated future cash flows and other factors to determine the fair value of the respective assets. If these estimates or the related assumptions change, we may be required to record impairment charges for these assets in the future.

We review our indefinite-lived intangible assets for impairment annually in the fourth quarter and whenever events or changes in circumstances indicate the asset may be impaired. The provisions of the accounting standard for indefinite-lived intangible assets allow us to first assess qualitative factors to determine whether it is necessary to perform a two-step quantitative impairment test. As part of our qualitative assessment, we monitor economic, legal, regulatory and other factors, industry trends, recent and forecasted financial performance of our reporting units and the timing and nature of our restructuring activities for LII as a whole and as they relate to the fair value of the assets. For those intangible assets which are evaluated using the two-step quantitative impairment test, we compare the estimated expected undiscounted future cash flows identified with each intangible asset or related asset group to the carrying amount of such assets. If the expected future cash flows do not exceed the carrying value of the asset or assets being reviewed, an impairment loss is recognized based on the excess of the carrying amount of the impaired assets over their fair value.

Product Warranties

Product Warranties

For some of our heating, ventilation and air conditioning (“HVAC”) products, we provide warranty terms ranging from one to 20 years to customers for certain components such as compressors or heat exchangers. For select products, we also provide limited lifetime warranties. A liability for estimated warranty expense is recorded on the date that revenue is recognized. Our estimates of future warranty costs are determined by product line. The number of units we expect to repair or replace is determined by applying an estimated failure rate, which is generally based on historical experience, to the number of units that were sold and are still under warranty. The estimated units to be repaired under warranty are multiplied by the average cost to repair or replace such products to determine the estimated future warranty cost. We do not discount product warranty liabilities as the amounts are not fixed and the timing of future cash payments is neither fixed nor reliably determinable. We also provide for specifically-identified warranty obligations. Estimated future warranty costs are subject to adjustment depending on changes in actual failure rate and cost experience. Subsequent costs incurred for warranty claims serve to reduce the accrued product warranty liability. See Note 10 for more information on our estimated future warranty costs.

Pensions and Post-retirement Benefits

Pensions and Post-retirement Benefits

We provide pension and post-retirement medical benefits to eligible domestic and foreign employees and we recognize pension and post-retirement benefit costs over the estimated service life or average life expectancy of those employees. We also recognize the funded status of our benefit plans, as measured at year-end by the difference between plan assets at fair value and the benefit obligation, in the Consolidated Balance Sheets. Changes in the funded status are recognized in the year in which the changes occur through accumulated other comprehensive income (“AOCI”). Actuarial gains or losses are amortized into net period benefit cost over the estimated service life of covered employees or average life expectancy of participants depending on the plan.

The benefit plan assets and liabilities reflect assumptions about the long-range performance of our benefit plans. Should actual results differ from management's estimates, revisions to the benefit plan assets and liabilities would be required. See Note 12 for information regarding those estimates and additional disclosures on pension and post-retirement medical benefits.

Self Insurance

Self-Insurance

Self-insurance expense and liabilities were actuarially determined based primarily on our historical claims information and industry factors and trends. The self-insurance liabilities as of December 31, 2014 represent the best estimate of the future payments to be made on reported and unreported losses for 2014 and prior years. The amounts and timing of payments for claims reserved may vary depending on various factors, including the development and ultimate settlement of reported and unreported claims. To the extent actuarial assumptions change and claims experience rates differ from historical rates, our liabilities may change. See Note 10 for additional information on our self-insured risks and liabilities.

Derivatives

Derivatives

We use futures contracts and fixed forward contracts to mitigate our exposure to volatility in metal commodity prices and foreign exchange rates. We hedge only exposures in the ordinary course of business and do not hold or trade derivatives for profit. All derivatives are recognized in the Consolidated Balance Sheets at fair value and the classification of each derivative instrument is based upon whether the maturity of the instrument is less than or greater than 12 months. See Note 8 for more information on our derivatives.

Income Taxes

Income Taxes

We recognize deferred tax assets and liabilities for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. Unrecognized tax benefits are accounted for as required by the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 740. See Note 9 for more information related to income taxes.

Revenue Recognition

Revenue Recognition

Our revenue recognition practices for the sale of goods depend upon the shipping terms for each transaction. Shipping terms are primarily FOB Shipping Point and, therefore, revenue is recognized for these transactions when products are shipped to customers and title passes. Certain customers in our smaller operations, primarily outside of North America, have shipping terms where title and risk of ownership do not transfer until the product is delivered to the customer. For these transactions, revenue is recognized on the date that the product is received and accepted by such customers. We experience returns for miscellaneous reasons and record a reserve for these returns at the time we recognize revenue based on historical experience. Our historical rates of return are insignificant as a percentage of sales. We also recognize revenue net of sales taxes.

For our businesses that provide services, revenue is recognized at the time services are completed. Our Commercial Heating & Cooling segment also provides sales, installation, maintenance and repair services under fixed-price contracts. Revenue for these services is recognized over the life of the contract.

We engage in cooperative advertising, customer rebate, cash discount and other miscellaneous programs that result in payments or credits being issued to our customers. We record these customer discounts and incentives as a reduction of sales when the sales are recorded. For certain cooperative advertising programs, we also receive an identifiable benefit (goods or services) in exchange for the consideration given, and, accordingly, record a ratable portion of the expenditure to Selling, general and administrative (“SG&A”) expenses. All other advertising, promotions and marketing costs are expensed as incurred. See Note 23 for more information on these costs.

Cost of Goods Sold

Cost of Goods Sold

The principal elements of cost of goods sold are components, raw materials, factory overhead, labor, estimated costs of warranty expense and freight and distribution costs.

Selling, General and Administrative Expenses

Selling, General and Administrative Expenses

SG&A expenses include payroll and benefit costs, advertising, commissions, research and development, information technology costs, and other selling, general and administrative related costs such as insurance, travel, non-production depreciation and rent.

Stock-Based Compensation

Stock-Based Compensation

We recognize compensation expense for stock-based arrangements over the required employee service periods. We measure stock-based compensation costs on the estimated grant-date fair value of the stock-based awards that are expected to ultimately vest and we adjust expected vesting rates to actual rates as additional information becomes known. For stock-based arrangements with performance conditions, we periodically adjust performance achievement rates based on our best estimates of those rates at the end of the performance period. See Note 14 for more information.

Translation of Foreign Currencies

Translation of Foreign Currencies

All assets and liabilities of foreign subsidiaries and joint ventures are translated into U.S. dollars using rates of exchange in effect at the balance sheet date. Revenue and expenses are translated at weighted average exchange rates during the year. Unrealized translation gains and losses are included in AOCI in the accompanying Consolidated Balance Sheets. Transaction gains and losses are included in Losses and other expenses, net in the accompanying Consolidated Statements of Operations.

Use of Estimates

Use of Estimates

The preparation of financial statements requires us to make estimates and assumptions about future events. These estimates and the underlying assumptions affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities, and reported amounts of revenue and expenses. Such estimates include the valuation of accounts receivable, inventories, goodwill, intangible assets and other long-lived assets, contingencies, product warranties, guarantee obligations, indemnifications, and assumptions used in the calculation of income taxes, pension and post-retirement medical benefits, and stock-based compensation among others. These estimates and assumptions are based on our best estimates and judgment.

We evaluate these estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment. We believe these estimates and assumptions to be reasonable under the circumstances and will adjust such estimates and assumptions when facts and circumstances dictate. Volatile equity, foreign currency and commodity markets and uncertain future economic conditions combine to increase the uncertainty inherent in such estimates and assumptions. Future events and their effects cannot be determined with precision and actual results could differ significantly from these estimates. Changes in these estimates resulting from continuing changes in the economic environment will be reflected in the financial statements in future periods.

Reclassifications

Reclassifications

Certain amounts have been reclassified from the prior year presentation to conform to the current year presentation.

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Reportable Business Segments (Details 5) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2014		Dec. 31, 2013		Dec. 31, 2012
Schedule of equity method investees
Total income from equity method investments	$ 13.8		$ 12.2		$ 10.5
Refrigeration [Member]
Schedule of equity method investees
Total income from equity method investments	2.5		2.5		2.6
Corporate and Other [Member]
Schedule of equity method investees
Total income from equity method investments	$ 11.3	[1]	$ 9.7	[1]	$ 7.9	[1]

[1] $11.7 million, $9.6 million and $5.0 million of income from equity method investments to our Residential Heating & Cooling and Commercial Heating & Cooling segments in 2014, 2013 and 2012, respectively. These allocations were recorded as reductions to the segments' Cost of goods sold in the Consolidated Statements of Operations.

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Reportable Business Segments (Tables)

12 Months Ended

Dec. 31, 2014

Segment Reporting, Measurement Disclosures [Abstract]

Net sales, segment profit (loss) by business segment and reconciliation of segment profit (loss) to Income from Continuing Operations before Income Taxes

While restructuring charges are excluded from our calculation of segment profit (loss), the table below presents the restructuring charges associated with each segment (in millions):

	Incurred in 2014			Incurred to Date		Total Expected to be Incurred
Residential Heating & Cooling	$	0.4		$	1.5	$	1.5
Commercial Heating & Cooling	—			0.9		0.9
Refrigeration	1.6			8.2		9.0
Corporate & Other	(0.1		)	—		—
Total	$	1.9		$	10.6	$	11.4

We operate in three reportable business segments of the heating, ventilation, air conditioning and refrigeration (“HVACR”) industry. Our segments are organized primarily by the nature of the products and services we provide. The following table describes each segment:

Segment	Products or Services	Markets Served	Geographic Areas
Residential Heating & Cooling	Furnaces, air conditioners, heat pumps, packaged heating and cooling systems, indoor air quality equipment, comfort control products, replacement parts	Residential Replacement; Residential New Construction	United States Canada
Commercial Heating & Cooling	Unitary heating and air conditioning equipment, applied systems, controls, installation and service of commercial heating and cooling equipment	Light Commercial	United States Canada Europe
Refrigeration	Condensing units, unit coolers, fluid coolers, air cooled condensers, air handlers, process chillers, controls, compressorized racks, supermarket display cases and systems	Light Commercial; Food Preservation; Non-Food/Industrial	United States Canada Europe Asia Pacific South America

Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Table Text Block]

Net sales and segment profit (loss) by segment, along with a reconciliation of segment profit (loss) to Income from continuing operations before income taxes, are shown below (in millions):

	For the Years Ended December 31,
	2014			2013			2012
Net Sales (1)
Residential Heating & Cooling	$	1,736.5		$	1,583.2		$	1,375.8
Commercial Heating & Cooling	878.5			844.4			785.4
Refrigeration	752.4			771.5			788.2
	$	3,367.4		$	3,199.1		$	2,949.4
Segment Profit (Loss) (2)
Residential Heating & Cooling	$	235.8		$	180.1		$	102.9
Commercial Heating & Cooling	124.0			118.1			99.5
Refrigeration	55.4			90.2			81.9
Corporate and other	(74.3		)	(87.9		)	(60.1		)
Subtotal that includes segment profit and eliminations	340.9			300.5			224.2
Reconciliation to income from continuing operations before income taxes:
Special product quality adjustments	(1.4		)	(2.3		)	1.1
Items in Losses and other expenses, net that are excluded from segment profit (loss) (2)	4.7			8.8			(0.2		)
Restructuring charges	1.9			5.0			4.2
Interest expense, net	17.2			14.5			17.1
Special inventory write down	1.0			—			—
Other expense, net	(0.1		)	0.2			0.3
Income from continuing operations before income taxes	$	317.6		$	274.3		$	201.7

⁽¹⁾ On a consolidated basis, no revenue from transactions with a single customer were 10% or greater of our consolidated net sales for any of the periods presented.

⁽²⁾ The Company defines segment profit and loss as a segment's income or loss from continuing operations before income taxes included in the accompanying Consolidated Statements of Operations, excluding:

• Special product quality adjustments;

• The following items in Losses and other expenses, net:

◦ Net change in unrealized gains and/or losses on unsettled futures contracts,

◦ Special legal contingency charges,

◦ Asbestos-related litigation,

◦ Environmental liabilities, and

◦ Other items, net;

• Restructuring charges;

• Goodwill, long-lived asset, and equity method investment impairments;

• Interest expense, net;

• Special inventory write down; and

• Other expense, net.

Total assets by business segment

Total assets by segment are shown below (in millions):

	As of December 31,
	2014		2013		2012
Total Assets:
Residential Heating & Cooling	$	632.3	$	500.0	$	457.5
Commercial Heating & Cooling	353.4		346.3		321.9
Refrigeration	551.5		572.0		585.3
Corporate and other	227.1		208.4		228.6
Assets for continuing operations	1,764.3		1,626.7		1,593.3
Discontinued operations (See Note 17)	—		—		98.6
Total assets	$	1,764.3	$	1,626.7	$	1,691.9

Summary of capital expenditures, depreciation and amortization, and income from equity method investments expense by business segment

Total capital expenditures by segment are shown below (in millions):

	For the Years Ended December 31,
	2014		2013		2012
Capital Expenditures:
Residential Heating & Cooling	$	39.4	$	34.2	$	13.7
Commercial Heating & Cooling	14.1		11.2		8.7
Refrigeration	15.8		16.5		15.6
Corporate and other	19.1		16.4		12.2
Total capital expenditures (1)	$	88.4	$	78.3	$	50.2

⁽¹⁾ Includes amounts recorded under capital leases. There were no significant new capital leases in 2014, 2013 or 2012.

Depreciation and amortization expenses by segment are shown below (in millions):

	For the Years Ended December 31,
	2014		2013		2012
Depreciation and Amortization:
Residential Heating & Cooling	$	20.7	$	20.5	$	19.9
Commercial Heating & Cooling	9.3		9.0		8.5
Refrigeration	16.3		15.3		13.0
Corporate and other	14.5		14.1		14.0
Total depreciation and amortization	$	60.8	$	58.9	$	55.4

The equity method investments are shown below (in millions):

	For the Years Ended December 31,
	2014		2013		2012
Income from Equity Method Investments:
Refrigeration	$	2.5	$	2.5	$	2.6
Corporate and other (1)	11.3		9.7		7.9
Total income from equity method investments	$	13.8	$	12.2	$	10.5

⁽¹⁾ We allocated $11.7 million, $9.6 million and $5.0 million of income from equity method investments to our Residential Heating & Cooling and Commercial Heating & Cooling segments in 2014, 2013 and 2012, respectively. These allocations were recorded as reductions to the segments' Cost of goods sold in the Consolidated Statements of Operations.

Summary of financial information relating to geographic area based operations

Net sales for each major geographic area in which we operate are shown below (in millions):

	For the Years Ended December 31,
	2014		2013		2012
Net Sales to External Customers by Point of Shipment:
United States	$	2,576.4	$	2,382.0	$	2,147.2
Canada	236.3		232.3		226.7
International	554.7		584.8		575.5
Total net sales to external customers	$	3,367.4	$	3,199.1	$	2,949.4

Property, plant, and equipment, net for each major geographic area

Property, plant and equipment, net for each major geographic area in which we operate, based on the domicile of our operations, are shown below (in millions):

	As of December 31,
	2014		2013		2012
Property, Plant and Equipment, net:
United States	$	243.4	$	230.3	$	227.9
Mexico	52.4		39.7		28.0
Canada	0.6		0.6		0.6
International	62.2		64.9		41.7
Total Property, plant and equipment, net	$	358.6	$	335.5	$	298.2

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Comprehensive Income (Notes)

12 Months Ended

Dec. 31, 2014

Equity [Abstract]

Comprehensive Income

Comprehensive Income:

The following table provides information on items not reclassified in their entirety from AOCI to Net Income in the accompanying Consolidated Statements of Operations (in millions):

	For the Years Ended December 31,
AOCI Component	2014			2013			Affected Line Item(s) in the Consolidated Statements of Operations
Losses on cash flow hedges:
Commodity derivative contracts	$	(5.8	)	$	(4.2	)	Cost of goods sold
Income tax benefit	2.0			1.5			Provision for income taxes
Net of tax	$	(3.8	)	$	(2.7	)
Defined Benefit Plan Items:
Pension and Post-Retirement Benefits costs	$	(6.9	)	$	(9.5	)	Cost of goods sold; Selling, general and administrative expenses
Income tax benefit	2.4			3.4			Provision for income taxes
Net of tax	$	(4.5	)	$	(6.1	)
Foreign currency translation adjustments:
Sale of foreign business (1)	$	—		$	41.1		Loss from discontinued operations
Total reclassifications from AOCI	$	(8.3	)	$	32.3

⁽¹⁾ The reclassification of foreign currency translation adjustments related to the sale of the Service Experts business in the first quarter of 2013. Refer to Note 17 for details.

The following tables provide information on changes in AOCI, by component (net of tax), for the years ended December 31, 2014 and 2013 (in millions):

	Gains (Losses) on Cash Flow Hedges			Unrealized Gains (Losses) on Available-for-Sale Securities		Defined Benefit Plan Items			Foreign Currency Translation Adjustments			Total AOCI
Balance as of December 31, 2013	$	(0.6	)	$	2.5	$	(106.0	)	$	43.0		$	(61.1	)
Other comprehensive (loss) income before reclassifications	(7.8		)	0.7		(47.9		)	(45.7		)	(100.7		)
Amounts reclassified from AOCI	3.8			—		4.5			—			8.3
Net other comprehensive (loss) income	(4.0		)	0.7		(43.4		)	(45.7		)	(92.4		)
Balance as of December 31, 2014	$	(4.6	)	$	3.2	$	(149.4	)	$	(2.7	)	$	(153.5	)

	Gains (Losses) on Cash Flow Hedges			Unrealized Gains (Losses) on Available-for-Sale Securities			Defined Benefit Plan Items			Foreign Currency Translation Adjustments			Total AOCI
Balance as of December 31, 2012	$	1.1		$	9.3		$	(147.5	)	$	114.8		$	(22.3	)
Other comprehensive (loss) income before reclassifications	(4.4		)	(6.8		)	35.4			(30.7		)	(6.5		)
Amounts reclassified from AOCI	2.7			—			6.1			(41.1		)	(32.3		)
Net other comprehensive (loss) income	(1.7		)	(6.8		)	41.5			(71.8		)	(38.8		)
Balance as of December 31, 2013	$	(0.6	)	$	2.5		$	(106.0	)	$	43.0		$	(61.1	)

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Employee Benefit Plans (Details Textual) (USD $)	12 Months Ended
	Dec. 31, 2014		Dec. 31, 2013		Dec. 31, 2012
Defined Benefit Plan Disclosure [Line Items]
Percentage of Medical Coverage Cost Payable by Participants	100.00%
Contributions to defined contribution plans	$ 14,800,000	[1]	$ 13,700,000	[1]	$ 13,200,000	[1]
U.S.-based pension plans [Member]
Defined Benefit Plan Disclosure [Line Items]
Projected benefit obligation	88.00%
Plan assets	87.00%
Long-term rate of return on assets assumption	8.00%
Defined Benefit Plan, Assumptions Used Calculating Benefit Obligation, Discount Rate	4.94%
Components of fair value in our plan assets	88.00%
Pension Benefits [Member]
Defined Benefit Plan Disclosure [Line Items]
Pension expense	6,500,000	[2]	11,800,000	[2]	20,500,000	[2]
Estimated prior service (cost) credits	(200,000)
Estimated actuarial gains (losses)	(10,300,000)
Long-term rate of return on assets assumption	8.00%		8.00%		8.00%
Defined Benefit Plan, Assumptions Used Calculating Benefit Obligation, Discount Rate	4.04%		4.88%
U.S. non-qualified pension plans [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Assumptions Used Calculating Benefit Obligation, Discount Rate	4.30%
Other Postretirement Benefit Plan [Member]
Defined Benefit Plan Disclosure [Line Items]
Pension expense	(1,400,000)	[2]	(1,400,000)	[2]	(700,000)	[2]
Estimated prior service (cost) credits	2,800,000
Estimated actuarial gains (losses)	(1,400,000)
Long-term rate of return on assets assumption	0.00%		0.00%		0.00%
Defined Benefit Plan, Assumptions Used Calculating Benefit Obligation, Discount Rate	3.23%		3.57%
Canadian Pension Plans [Member]
Defined Benefit Plan Disclosure [Line Items]
Components of fair value in our plan assets	6.00%
United Kingdom Pension Plans [Member]
Defined Benefit Plan Disclosure [Line Items]
Components of fair value in our plan assets	6.00%
Fixed income [Member] | United Kingdom Pension Plans [Member]
Defined Benefit Plan Disclosure [Line Items]
Weighted average maturity period	5 years
Discontinued Operations [Member]
Defined Benefit Plan Disclosure [Line Items]
Contributions to defined contribution plans	0		400,000		2,000,000
Pension expense	$ 0	[2]	$ 200,000	[2]	$ 6,900,000	[2]

[1] Contributions of $0.4 million and $2.0 million were included in Loss from discontinued operations for the years ended December 31, 2013 and 2012, respectively.

[2] Pension expense of $0.2 million and $6.9 million was included in Loss for discontinued operations for the years ended December 31, 2013 and 2012, respectively.

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Earnings Per Share

12 Months Ended

Dec. 31, 2014

Earnings Per Share [Abstract]

Earnings Per Share

Earnings Per Share:

Basic earnings per share are computed by dividing net income by the weighted-average number of common shares outstanding during the period. Diluted earnings per share are computed by dividing net income by the sum of the weighted-average number of shares and the number of equivalent shares assumed outstanding, if dilutive, under our stock-based compensation plans.

The computations of basic and diluted earnings per share for Income from continuing operations were as follows (in millions, except per share data):

	For the Years Ended December 31,
	2014			2013			2012
Net income	$	205.8		$	171.8		$	90.0
Add: Loss from discontinued operations	2.3			8.1			45.0
Income from continuing operations	$	208.1		$	179.9		$	135.0
Weighted-average shares outstanding – basic	47.9			49.8			50.7
Add: Potential effect of diluted securities attributable to stock-based payments	0.7			0.8			0.7
Weighted-average shares outstanding – diluted	48.6			50.6			51.4
Earnings per share - Basic:
Income from continuing operations	$	4.35		$	3.61		$	2.66
Loss from discontinued operations	(0.05		)	(0.16		)	(0.89		)
Net income	$	4.30		$	3.45		$	1.77
Earnings per share - Diluted:
Income from continuing operations	$	4.28		$	3.55		$	2.63
Loss from discontinued operations	(0.05		)	(0.16		)	(0.88		)
Net income	$	4.23		$	3.39		$	1.75

The following stock appreciation rights were outstanding but not included in the diluted earnings per share calculation because the assumed exercise of such rights would have been anti-dilutive (in millions, except for per share data):

	For the Years Ended December 31,
	2014	2013	2012
Weighted-average number of shares	0.3	0.1	0.1
Price ranges per share	$81.11 - $92.64	$81.11 - $81.14	$51.11 - $51.40

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Lines of Credit and Financing Arrangements (Details 4) (Revolving Credit Facility [Member])	12 Months Ended
	Dec. 31, 2014
Maximum [Member]
Line of Credit Facility [Line Items]
Indebtedness To Adjusted EBITDA Ratio	3.5
Minimum [Member]
Line of Credit Facility [Line Items]
Cash Flow To Net Interest Expense Ratio	3.0

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Discontinued Operations (Tables)

12 Months Ended

Dec. 31, 2014

Service Experts [Member]

Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]

Assets and liabilities of the discontinued operations

A summary of net sales and pre-tax gains and losses for the Service Experts business is detailed below (in millions):

	For the Years Ended December 31,
	2014		2013			2012
Net sales (1)	$	—	$	73.5		$	385.1
Pre-tax operating income (loss) (1)(2)	2.6		(15.1		)	(50.8		)
Gain on sale of business	—		1.4			—

⁽¹⁾ Excludes eliminations of intercompany sales and any associated profit.

⁽²⁾ Pre-tax operating loss for the year ended December 31, 2012 included a $20.5 million goodwill impairment loss.

Hearth [Member]

Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]

Assets and liabilities of the discontinued operations

A summary of net sales and pre-tax gains and losses for the Hearth business is detailed below (in millions):

	For the Years Ended December 31,
	2014			2013		2012
Net sales (1)	$	—		$	—	$	23.5
Pre-tax operating income (loss) (1)(2)	(6.3		)	0.5		(13.7		)
Loss on sale of business	—			—		(0.9		)

⁽¹⁾ Excludes eliminations of intercompany sales and any associated profit.

⁽²⁾ Pre-tax operating loss in 2012 included a $6.3 million pre-tax impairment charge for the write-down of net assets to their estimated fair value, a $6.3 million settlement charge related to actuarial losses recognized upon transition of a pension obligation to the acquirer of the Hearth business and a $3.5 million gain related to realized foreign currency translation adjustments.

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Employee Benefit Plans (Details 4) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Changes recognized in other comprehensive income (loss):
Total recognized in other comprehensive income	$ (6.9)	$ (9.5)	$ (14.9)
Pension Benefits [Member]
Amounts recognized in other comprehensive income (loss):
Prior service costs	(1.3)	(1.7)
Actuarial loss	(231.8)	(164.4)
Subtotal	(233.1)	(166.1)
Deferred taxes	84.7	59.9
Net amount recognized	(148.4)	(106.2)
Changes recognized in other comprehensive income (loss):
Adjustment to OCI due to reclassification	0	0
Current year prior service costs	0	0
Current year actuarial loss	75.9	(56.1)
Effect of exchange rates	1.8	0.6
Amortization of prior service (costs) credits	(0.3)	(1.1)
Amortization of actuarial loss	(7.0)	(10.0)
Total recognized in other comprehensive income	66.8	(67.8)
Total recognized in net periodic benefit cost and other comprehensive income (loss)	73.3	(56.0)
Other Benefits [Member]
Amounts recognized in other comprehensive income (loss):
Prior service costs	18.1	21.1
Actuarial loss	(19.8)	(20.7)
Subtotal	(1.7)	0.4
Deferred taxes	0.6	(0.2)
Net amount recognized	(1.1)	0.2
Changes recognized in other comprehensive income (loss):
Adjustment to OCI due to reclassification	0	0
Current year prior service costs	0	0
Current year actuarial loss	0.6	0
Effect of exchange rates	0	0
Amortization of prior service (costs) credits	3.1	3.1
Amortization of actuarial loss	(1.5)	(1.5)
Total recognized in other comprehensive income	2.2	1.6
Total recognized in net periodic benefit cost and other comprehensive income (loss)	$ 0.8	$ 0.2

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Derivatives (Tables)

12 Months Ended

Dec. 31, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Amounts related to cash flow hedges

We recorded the following amounts related to our cash flow hedges in AOCI (in millions):

	As of December 31,
	2014			2013
Unrealized losses on unsettled contracts	$	7.2		$	0.8
Income tax expense (benefit)	(2.6		)	(0.2		)
Losses included in AOCI, net of tax (1)	$	4.6		$	0.6

⁽¹⁾ Assuming commodity prices remain constant, we expect to reclassify $4.2 million of derivative losses into earnings within the next 12 months.

Outstanding foreign currency forward contracts not designated as cash flow hedges

We had the following outstanding commodity futures contracts designated as cash flow hedges (in millions of pounds):

	As of December 31,
	2014	2013
Copper	29.4	22.9

Derivatives not Designated as Cash Flow Hedges

For commodity derivatives not designated as cash flow hedges, we follow the same hedging strategy as derivatives designated as cash flow hedges, except that we elect not to designate them as cash flow hedges at the inception of the arrangement. We had

the following outstanding commodity futures contracts not designated as cash flow hedges (in millions of pounds):

	As of December 31,
	2014	2013
Copper	2.9	2.0
Aluminum	2.2	2.7

We had the following outstanding foreign currency forward contracts not designated as cash flow hedges (in millions):

	As of December 31,
	2014	2013
Notional amounts (in local currency):
Brazilian Real	8.7	1.2
Mexican Peso	229.7	130.0
United States Dollar	4.5	—
Euro	3.6	—
British Pound	—	3.4
Russian Ruble	80.8	—
Indian Rupee	—	28.0
Polish Zloty	30.6	32.6

Location and amounts of derivative fair values in Consolidated Balance Sheets and derivative gains and losses in Consolidated Statements of Operations

The following tables provide the locations and amounts of derivative fair values in the Consolidated Balance Sheets and derivative gains and losses in the Consolidated Statements of Operations (in millions):

	Fair Values of Derivative Instruments as of December 31 (1)
	Derivatives Designated as Hedging Instruments				Derivatives Not Designated  as Hedging Instruments
	2014		2013		2014		2013
Current Assets:
Other assets
Commodity futures contracts	$	—	$	0.1	$	—	$	—
Foreign currency forward contracts	—		—		0.3		0.1
Non-Current Assets:
Other assets, net
Commodity futures contracts	—		0.3		—		—
Total Assets	$	—	$	0.4	$	0.3	$	0.1
Current Liabilities:
Accrued expenses
Commodity futures contracts	$	6.7	$	1.2	$	0.7	$	0.3
Foreign currency forward contracts	—		—		—		—
Non-Current Liabilities:
Other liabilities
Commodity futures contracts	0.5		—		0.1		—
Total Liabilities	$	7.2	$	1.2	$	0.8	$	0.3

⁽¹⁾ All derivative instruments are classified as Level 2 within the fair value hierarchy. See Note 20 for more information on fair value measurements.

Effect of Derivative Instruments on Consolidated Statements of Operations

Derivatives in Cash Flow Hedging Relationships
	For the Years Ended December 31,
	2014		2013		2012
Amount of Loss (Gain) Reclassified from AOCI into Income (Effective Portion):
Commodity futures contracts (1)	$	5.8	$	4.2	$	6.0
Interest rate swap (2)	—		—		1.9
	$	5.8	$	4.2	$	7.9
Amount of (Gain) Loss Recognized in Income on Derivatives (Ineffective Portion):
Commodity futures contracts (3)	$	0.1	$	0.2	$	(0.1	)

Derivatives Not Designated as Hedging Instruments
	For the Years Ended December 31,
	2014			2013		2012
Amount of Loss (Gain) Recognized in Income on Derivatives:
Commodity futures contracts (3)	$	1.2		$	1.2	$	(0.5	)
Foreign currency forward contracts (3)	(0.8		)	0.1		0.4
	$	0.4		$	1.3	$	(0.1	)

⁽¹⁾ The loss (gain) was recorded in Cost of goods sold in the accompanying Consolidated Statements of Operations.

⁽²⁾ The loss was recorded in Interest expense, net in the accompanying Consolidated Statements of Operations.

⁽³⁾ The loss (gain) was recorded in Losses and other expenses, net in the accompanying Consolidated Statements of Operations.

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Employee Benefit Plans (Details 6) (Foreign Pension Plan [Member])	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Foreign Pension Plan [Member]
Weighted-average assumptions used to determine benefit obligations as of December 31:
Defined Benefit Plan, Assumptions Used Calculating Benefit Obligation, Discount Rate	3.45%	4.38%
Rate of compensation increase	3.66%	3.31%
Weighted-average assumptions used to determine net periodic benefit cost for the years ended December 31:
Discount rate	4.38%	4.12%	4.93%
Expected long-term return on plan assets	6.32%	6.05%	6.26%
Rate of compensation increase	3.31%	3.48%	3.68%

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Consolidated Statements of Comprehensive Income (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Statement of Comprehensive Income [Abstract]
Net income	$ 205.8	$ 171.8	$ 90.0
Other comprehensive income (loss):
Foreign currency translation adjustments	(45.7)	(30.7)	14.8
Reclassification of foreign currency translation adjustments into earnings	0	(41.1)	(3.7)
Net change in pension and post-retirement benefit liabilities	75.9	(56.7)	24.1
Change in fair value of available-for-sale marketable equity securities	0.7	(6.8)	1.9
Net change in fair value of cash flow hedges	(12.1)	(6.8)	5.2
Reclassification of pension and post-retirement benefit losses into earnings	6.9	9.5	14.9
Reclassification of cash flow hedge losses into earnings	5.7	4.2	7.9
Other comprehensive income (loss) before taxes	(120.4)	(15.0)	16.9
Tax (expense) benefit	28.0	(23.8)	(2.1)
Other comprehensive income (loss), net of tax	(92.4)	(38.8)	14.8
Comprehensive income	$ 113.4	$ 133.0	$ 104.8

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Commitments and Contingencies (Details 3) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Changes in the total warranty liabilities
Total warranty liability, Beginning Balance	$ 81.6	$ 71.9
Payments made	(23.1)	(21.3)
Changes resulting from issuance of new warranties	33.4	29.6
Change in estimates associated with pre-existing liabilities	(3.5)	1.6
Changes in foreign currency translation rates and other	(1.2)	(0.2)
Total warranty liability, Ending Balance	$ 87.2	$ 81.6

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Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2014

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies:

Principles of Consolidation

The consolidated financial statements include the accounts of Lennox International Inc. and our majority-owned subsidiaries. All intercompany transactions, profits and balances have been eliminated.

Cash and Cash Equivalents

We consider all highly liquid temporary investments with original maturity dates of three months or less to be cash equivalents. Cash and cash equivalents consisted primarily of bank deposits.

Accounts and Notes Receivable

Accounts and notes receivable are shown in the accompanying Consolidated Balance Sheets, net of allowance for doubtful accounts. The allowance for doubtful accounts is generally established during the period in which receivables are recognized and is based on the age of the receivables and management's judgment on our ability to collect. Management considers the historical trends of write-offs and recoveries of previously written-off accounts, the financial strength of customers and projected economic and market conditions. We determine the delinquency status of receivables predominantly based on contractual terms and we write-off uncollectible receivables after management's review of our ability to collect, as noted above. We have no significant concentrations of credit risk within our accounts and notes receivable.

Inventories

Inventory costs include material, labor, depreciation and plant overhead. Inventories of $212.9 million and $187.3 million as of December 31, 2014 and 2013, respectively, were valued at the lower of cost or market using the last-in, first-out (“LIFO”) cost method. The remainder of inventory is valued at the lower of cost or market with cost determined primarily using either the first-in, first-out (“FIFO”) or average cost methods.

We elected to use the LIFO cost method for our domestic manufacturing companies in 1974 and continued to elect the LIFO cost method for new operations through the late 1980s. The types of inventory costs that use LIFO include raw materials, purchased components, work-in-process, repair parts and finished goods. Since the late 1990s, we have adopted the FIFO cost method for all new domestic manufacturing operations (primarily acquisitions). Our operating entities with a previous LIFO election continue to use the LIFO cost method. We use the FIFO cost method for our foreign-based manufacturing facilities. See Note 3 for more information on our inventories.

Property, Plant and Equipment

Property, plant and equipment is stated at cost, net of accumulated depreciation. Expenditures that increase the utility or extend the useful lives of fixed assets are capitalized while expenditures for maintenance and repairs are charged to expense as incurred.

Depreciation is computed using the straight-line method over the following estimated useful lives:

Buildings and improvements:
Buildings and improvements	5 to 30 years
Leasehold improvements	1 to 20 years
Machinery and equipment:
Computer hardware	3 to 5 years
Computer software	3 to 10 years
Factory machinery and equipment	1 to 15 years
Research and development equipment	5 to 10 years
Vehicles	3 to 8 years

We periodically review long-lived assets for impairment as events or changes in circumstances indicate that the carrying amount of such assets might not be recoverable. To assess recoverability, we compare the estimated expected future undiscounted cash flows identified with each long-lived asset or related asset group to the carrying amount of such assets. If the expected future cash flows do not exceed the carrying value of the asset or assets being reviewed, an impairment loss is recognized based on the excess of the carrying amount of the impaired assets over their fair value. See Note 5 for additional information on our property, plant and equipment.

Goodwill

Goodwill represents the excess of cost over fair value of assets from acquired businesses. Goodwill is not amortized, but is reviewed for impairment annually and whenever events or changes in circumstances indicate the asset may be impaired.

The annual goodwill impairment test was performed during the first quarter of 2014, and no impairment was recognized. During the third quarter of 2014, we changed the date of our annual goodwill impairment test from March 31^st to December 31^st. The change was made to more closely align the impairment testing date with the year-end results. The change in goodwill impairment testing date was deemed a change in accounting principle and did not delay, accelerate, or avoid a goodwill impairment charge. Management determined that the change in accounting principle was preferable under the circumstances and did not result in adjustments to our financial statements when applied retrospectively.

The provisions of the accounting standard for goodwill allow us to first assess qualitative factors to determine whether it is necessary to perform a two-step quantitative goodwill impairment test. As part of our qualitative assessment, we monitor economic, legal, regulatory and other factors, industry trends, our market capitalization, recent and forecasted financial performance of our reporting units and the timing and nature of our restructuring activities for LII as a whole and for each reporting unit.

For those reporting units which are evaluated using the two-step quantitative goodwill impairment test, we estimate reporting unit fair values using the discounted cash flow approach. The discounted cash flows used to estimate fair value are based on assumptions regarding each reporting unit’s estimated projected future cash flows and the estimated weighted-average cost of capital that a market participant would use in evaluating the reporting unit in a purchase transaction. The estimated weighted-average cost of capital is based on the risk-free interest rate and other factors such as equity risk premiums and the ratio of total debt to equity capital. In performing these impairment tests, we take steps to ensure that appropriate and reasonable cash flow projections and assumptions are used. We reconcile our estimated enterprise value to our market capitalization and determine the reasonableness of the cost of capital used by comparing to market data. We also perform sensitivity analyses on the key assumptions used, such as the weighted-average cost of capital and terminal growth rates. See Note 4 for additional information on our goodwill.

Intangible Assets

We amortize intangible assets and other assets with finite lives over their respective estimated useful lives to their estimated residual values, as follows:

Asset	Useful Life
Deferred financing costs	Effective interest method
Customer relationships	Straight-line method up to 12 years
Patents and others	Straight-line method up to 20 years

We periodically review intangible assets with estimable useful lives for impairment as events or changes in circumstances indicate that the carrying amount of such assets might not be recoverable. We assess recoverability by comparing the estimated expected undiscounted future cash flows identified with each intangible asset or related asset group to the carrying amount of such assets. If the expected future cash flows do not exceed the carrying value of the asset or assets being reviewed, an impairment loss is recognized based on the excess of the carrying amount of the impaired assets over their fair value. In assessing the fair value of these intangible assets, we must make assumptions that a market participant would make regarding estimated future cash flows and other factors to determine the fair value of the respective assets. If these estimates or the related assumptions change, we may be required to record impairment charges for these assets in the future.

We review our indefinite-lived intangible assets for impairment annually in the fourth quarter and whenever events or changes in circumstances indicate the asset may be impaired. The provisions of the accounting standard for indefinite-lived intangible assets allow us to first assess qualitative factors to determine whether it is necessary to perform a two-step quantitative impairment test. As part of our qualitative assessment, we monitor economic, legal, regulatory and other factors, industry trends, recent and forecasted financial performance of our reporting units and the timing and nature of our restructuring activities for LII as a whole and as they relate to the fair value of the assets. For those intangible assets which are evaluated using the two-step quantitative impairment test, we compare the estimated expected undiscounted future cash flows identified with each intangible asset or related asset group to the carrying amount of such assets. If the expected future cash flows do not exceed the carrying value of the asset or assets being reviewed, an impairment loss is recognized based on the excess of the carrying amount of the impaired assets over their fair value.

Product Warranties

For some of our heating, ventilation and air conditioning (“HVAC”) products, we provide warranty terms ranging from one to 20 years to customers for certain components such as compressors or heat exchangers. For select products, we also provide limited lifetime warranties. A liability for estimated warranty expense is recorded on the date that revenue is recognized. Our estimates of future warranty costs are determined by product line. The number of units we expect to repair or replace is determined by applying an estimated failure rate, which is generally based on historical experience, to the number of units that were sold and are still under warranty. The estimated units to be repaired under warranty are multiplied by the average cost to repair or replace such products to determine the estimated future warranty cost. We do not discount product warranty liabilities as the amounts are not fixed and the timing of future cash payments is neither fixed nor reliably determinable. We also provide for specifically-identified warranty obligations. Estimated future warranty costs are subject to adjustment depending on changes in actual failure rate and cost experience. Subsequent costs incurred for warranty claims serve to reduce the accrued product warranty liability. See Note 10 for more information on our estimated future warranty costs.

Pensions and Post-retirement Benefits

We provide pension and post-retirement medical benefits to eligible domestic and foreign employees and we recognize pension and post-retirement benefit costs over the estimated service life or average life expectancy of those employees. We also recognize the funded status of our benefit plans, as measured at year-end by the difference between plan assets at fair value and the benefit obligation, in the Consolidated Balance Sheets. Changes in the funded status are recognized in the year in which the changes occur through accumulated other comprehensive income (“AOCI”). Actuarial gains or losses are amortized into net period benefit cost over the estimated service life of covered employees or average life expectancy of participants depending on the plan.

The benefit plan assets and liabilities reflect assumptions about the long-range performance of our benefit plans. Should actual results differ from management's estimates, revisions to the benefit plan assets and liabilities would be required. See Note 12 for information regarding those estimates and additional disclosures on pension and post-retirement medical benefits.

Self-Insurance

Self-insurance expense and liabilities were actuarially determined based primarily on our historical claims information and industry factors and trends. The self-insurance liabilities as of December 31, 2014 represent the best estimate of the future payments to be made on reported and unreported losses for 2014 and prior years. The amounts and timing of payments for claims reserved may vary depending on various factors, including the development and ultimate settlement of reported and unreported claims. To the extent actuarial assumptions change and claims experience rates differ from historical rates, our liabilities may change. See Note 10 for additional information on our self-insured risks and liabilities.

Derivatives

We use futures contracts and fixed forward contracts to mitigate our exposure to volatility in metal commodity prices and foreign exchange rates. We hedge only exposures in the ordinary course of business and do not hold or trade derivatives for profit. All derivatives are recognized in the Consolidated Balance Sheets at fair value and the classification of each derivative instrument is based upon whether the maturity of the instrument is less than or greater than 12 months. See Note 8 for more information on our derivatives.

Income Taxes

We recognize deferred tax assets and liabilities for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. Unrecognized tax benefits are accounted for as required by the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 740. See Note 9 for more information related to income taxes.

Revenue Recognition

Our revenue recognition practices for the sale of goods depend upon the shipping terms for each transaction. Shipping terms are primarily FOB Shipping Point and, therefore, revenue is recognized for these transactions when products are shipped to customers and title passes. Certain customers in our smaller operations, primarily outside of North America, have shipping terms where title and risk of ownership do not transfer until the product is delivered to the customer. For these transactions, revenue is recognized on the date that the product is received and accepted by such customers. We experience returns for miscellaneous reasons and record a reserve for these returns at the time we recognize revenue based on historical experience. Our historical rates of return are insignificant as a percentage of sales. We also recognize revenue net of sales taxes.

For our businesses that provide services, revenue is recognized at the time services are completed. Our Commercial Heating & Cooling segment also provides sales, installation, maintenance and repair services under fixed-price contracts. Revenue for these services is recognized over the life of the contract.

We engage in cooperative advertising, customer rebate, cash discount and other miscellaneous programs that result in payments or credits being issued to our customers. We record these customer discounts and incentives as a reduction of sales when the sales are recorded. For certain cooperative advertising programs, we also receive an identifiable benefit (goods or services) in exchange for the consideration given, and, accordingly, record a ratable portion of the expenditure to Selling, general and administrative (“SG&A”) expenses. All other advertising, promotions and marketing costs are expensed as incurred. See Note 23 for more information on these costs.

Cost of Goods Sold

The principal elements of cost of goods sold are components, raw materials, factory overhead, labor, estimated costs of warranty expense and freight and distribution costs.

Selling, General and Administrative Expenses

SG&A expenses include payroll and benefit costs, advertising, commissions, research and development, information technology costs, and other selling, general and administrative related costs such as insurance, travel, non-production depreciation and rent.

Stock-Based Compensation

We recognize compensation expense for stock-based arrangements over the required employee service periods. We measure stock-based compensation costs on the estimated grant-date fair value of the stock-based awards that are expected to ultimately vest and we adjust expected vesting rates to actual rates as additional information becomes known. For stock-based arrangements with performance conditions, we periodically adjust performance achievement rates based on our best estimates of those rates at the end of the performance period. See Note 14 for more information.

Translation of Foreign Currencies

All assets and liabilities of foreign subsidiaries and joint ventures are translated into U.S. dollars using rates of exchange in effect at the balance sheet date. Revenue and expenses are translated at weighted average exchange rates during the year. Unrealized translation gains and losses are included in AOCI in the accompanying Consolidated Balance Sheets. Transaction gains and losses are included in Losses and other expenses, net in the accompanying Consolidated Statements of Operations.

Use of Estimates

The preparation of financial statements requires us to make estimates and assumptions about future events. These estimates and the underlying assumptions affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities, and reported amounts of revenue and expenses. Such estimates include the valuation of accounts receivable, inventories, goodwill, intangible assets and other long-lived assets, contingencies, product warranties, guarantee obligations, indemnifications, and assumptions used in the calculation of income taxes, pension and post-retirement medical benefits, and stock-based compensation among others. These estimates and assumptions are based on our best estimates and judgment.

We evaluate these estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment. We believe these estimates and assumptions to be reasonable under the circumstances and will adjust such estimates and assumptions when facts and circumstances dictate. Volatile equity, foreign currency and commodity markets and uncertain future economic conditions combine to increase the uncertainty inherent in such estimates and assumptions. Future events and their effects cannot be determined with precision and actual results could differ significantly from these estimates. Changes in these estimates resulting from continuing changes in the economic environment will be reflected in the financial statements in future periods.

Reclassifications

Certain amounts have been reclassified from the prior year presentation to conform to the current year presentation.

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Summary of Significant Accounting Policies (Details)	12 Months Ended
	Dec. 31, 2014
Building and improvements [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives of property, plant and equipment	5 years
Building and improvements [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives of property, plant and equipment	30 years
Leasehold improvements [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives of property, plant and equipment	1 year
Leasehold improvements [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives of property, plant and equipment	20 years
Computer hardware [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives of property, plant and equipment	3 years
Computer hardware [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives of property, plant and equipment	5 years
Computer software [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives of property, plant and equipment	3 years
Computer software [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives of property, plant and equipment	10 years
Factory machinery and equipment [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives of property, plant and equipment	1 year
Factory machinery and equipment [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives of property, plant and equipment	15 years
Research and development equipment [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives of property, plant and equipment	5 years
Research and development equipment [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives of property, plant and equipment	15 years
Vehicles [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives of property, plant and equipment	3 years
Vehicles [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives of property, plant and equipment	8 years

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Income Taxes (Details 3) (USD $) In Millions, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Gross deferred tax assets:
Warranties	$ 30.9	$ 29.3
Net operating losses (foreign and U.S. state)	23.6	28.2
Post-retirement and pension benefits	50.7	28.3
Inventory reserves	4.4	4.8
Receivables allowance	4.9	5.1
Compensation liabilities	19.6	22.6
Deferred income	1.0	0.9
Insurance liabilities	15.8	18.1
Legal reserves	11.1	10.7
Hedges	2.8	0.6
State credits, net of federal effect	8.8	8.7
Other	9.2	7.7
Total deferred tax assets	182.8	165.0
Valuation allowance	(21.2)	(21.2)
Total deferred tax assets, net of valuation allowance	161.6	143.8
Gross deferred tax liabilities:
Depreciation	(10.8)	(12.4)
Intangibles	(11.0)	(8.7)
Other	(9.9)	(9.7)
Total deferred tax liabilities	(31.7)	(30.8)
Net deferred tax assets	$ 129.9	$ 113.0

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Employee Benefit Plans (Details 5)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Pension Benefits [Member]
Weighted-average assumptions used to determine benefit obligations as of December 31:
Defined Benefit Plan, Assumptions Used Calculating Benefit Obligation, Discount Rate	4.04%	4.88%
Rate of compensation increase	4.23%	4.23%
Weighted-average assumptions used to determine net periodic benefit cost for the years ended December 31:
Discount rate	4.88%	3.97%	4.83%
Expected long-term return on plan assets	8.00%	8.00%	8.00%
Rate of compensation increase	4.23%	4.23%	4.23%
Other Postretirement Benefit Plan [Member]
Weighted-average assumptions used to determine benefit obligations as of December 31:
Defined Benefit Plan, Assumptions Used Calculating Benefit Obligation, Discount Rate	3.23%	3.57%
Rate of compensation increase	0.00%	0.00%
Weighted-average assumptions used to determine net periodic benefit cost for the years ended December 31:
Discount rate	3.57%	2.72%	4.64%
Expected long-term return on plan assets	0.00%	0.00%	0.00%
Rate of compensation increase	0.00%	0.00%	0.00%

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Joint Ventures and Other Equity Investments (Details) (USD $) In Millions, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Equity Method Investments and Joint Ventures [Abstract]
Equity method investments	$ 30.9	$ 28.0

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Reportable Business Segments

12 Months Ended

Dec. 31, 2014

Segment Reporting, Measurement Disclosures [Abstract]

Reportable Business Segments

Reportable Business Segments:

Description of Segments

We operate in three reportable business segments of the heating, ventilation, air conditioning and refrigeration (“HVACR”) industry. Our segments are organized primarily by the nature of the products and services we provide. The following table describes each segment:

Segment	Products or Services	Markets Served	Geographic Areas
Residential Heating & Cooling	Furnaces, air conditioners, heat pumps, packaged heating and cooling systems, indoor air quality equipment, comfort control products, replacement parts	Residential Replacement; Residential New Construction	United States Canada
Commercial Heating & Cooling	Unitary heating and air conditioning equipment, applied systems, controls, installation and service of commercial heating and cooling equipment	Light Commercial	United States Canada Europe
Refrigeration	Condensing units, unit coolers, fluid coolers, air cooled condensers, air handlers, process chillers, controls, compressorized racks, supermarket display cases and systems	Light Commercial; Food Preservation; Non-Food/Industrial	United States Canada Europe Asia Pacific South America

In September 2012, we announced the planned sale of our Service Experts business. The Service Experts business had previously been reported within the Service Experts reportable segment along with the Lennox National Account Services ("NAS") business. Beginning in the third quarter of 2012, the Service Experts business was included in discontinued operations, NAS was included in our Commercial Heating & Cooling segment, and the Service Experts segment was eliminated. Results for all periods have been revised to reflect this new presentation.

Segment Data

We use segment profit or loss as the primary measure of profitability to evaluate operating performance and to allocate capital resources. We define segment profit or loss as a segment’s income or loss from continuing operations before income taxes included in the accompanying Consolidated Statements of Operations, excluding certain items. The reconciliation below details the items excluded.

Our corporate costs include those costs related to corporate functions such as legal, internal audit, treasury, human resources, tax compliance and senior executive staff. Corporate costs also include the long-term share-based incentive awards provided to employees throughout LII. We recorded these share-based awards as Corporate costs because they are determined at the discretion of the Board of Directors and based on the historical practice of doing so for internal reporting purposes.

As they arise, transactions between segments are recorded on an arm’s-length basis using the relevant market prices. Any intercompany sales and associated profit (and any other intercompany items) are eliminated from segment results. There were no significant intercompany eliminations included in the results presented in the table below.

Net sales and segment profit (loss) by segment, along with a reconciliation of segment profit (loss) to Income from continuing operations before income taxes, are shown below (in millions):

	For the Years Ended December 31,
	2014			2013			2012
Net Sales (1)
Residential Heating & Cooling	$	1,736.5		$	1,583.2		$	1,375.8
Commercial Heating & Cooling	878.5			844.4			785.4
Refrigeration	752.4			771.5			788.2
	$	3,367.4		$	3,199.1		$	2,949.4
Segment Profit (Loss) (2)
Residential Heating & Cooling	$	235.8		$	180.1		$	102.9
Commercial Heating & Cooling	124.0			118.1			99.5
Refrigeration	55.4			90.2			81.9
Corporate and other	(74.3		)	(87.9		)	(60.1		)
Subtotal that includes segment profit and eliminations	340.9			300.5			224.2
Reconciliation to income from continuing operations before income taxes:
Special product quality adjustments	(1.4		)	(2.3		)	1.1
Items in Losses and other expenses, net that are excluded from segment profit (loss) (2)	4.7			8.8			(0.2		)
Restructuring charges	1.9			5.0			4.2
Interest expense, net	17.2			14.5			17.1
Special inventory write down	1.0			—			—
Other expense, net	(0.1		)	0.2			0.3
Income from continuing operations before income taxes	$	317.6		$	274.3		$	201.7

⁽¹⁾ On a consolidated basis, no revenue from transactions with a single customer were 10% or greater of our consolidated net sales for any of the periods presented.

⁽²⁾ The Company defines segment profit and loss as a segment's income or loss from continuing operations before income taxes included in the accompanying Consolidated Statements of Operations, excluding:

• Special product quality adjustments;

• The following items in Losses and other expenses, net:

◦ Net change in unrealized gains and/or losses on unsettled futures contracts,

◦ Special legal contingency charges,

◦ Asbestos-related litigation,

◦ Environmental liabilities, and

◦ Other items, net;

• Restructuring charges;

• Goodwill, long-lived asset, and equity method investment impairments;

• Interest expense, net;

• Special inventory write down; and

• Other expense, net.

The assets in the Corporate and other segment primarily consist of cash, short-term investments and deferred tax assets. Assets recorded in the operating segments represent those assets directly associated with those segments.

Total assets by segment are shown below (in millions):

	As of December 31,
	2014		2013		2012
Total Assets:
Residential Heating & Cooling	$	632.3	$	500.0	$	457.5
Commercial Heating & Cooling	353.4		346.3		321.9
Refrigeration	551.5		572.0		585.3
Corporate and other	227.1		208.4		228.6
Assets for continuing operations	1,764.3		1,626.7		1,593.3
Discontinued operations (See Note 17)	—		—		98.6
Total assets	$	1,764.3	$	1,626.7	$	1,691.9

Total capital expenditures by segment are shown below (in millions):

	For the Years Ended December 31,
	2014		2013		2012
Capital Expenditures:
Residential Heating & Cooling	$	39.4	$	34.2	$	13.7
Commercial Heating & Cooling	14.1		11.2		8.7
Refrigeration	15.8		16.5		15.6
Corporate and other	19.1		16.4		12.2
Total capital expenditures (1)	$	88.4	$	78.3	$	50.2

⁽¹⁾ Includes amounts recorded under capital leases. There were no significant new capital leases in 2014, 2013 or 2012.

Depreciation and amortization expenses by segment are shown below (in millions):

	For the Years Ended December 31,
	2014		2013		2012
Depreciation and Amortization:
Residential Heating & Cooling	$	20.7	$	20.5	$	19.9
Commercial Heating & Cooling	9.3		9.0		8.5
Refrigeration	16.3		15.3		13.0
Corporate and other	14.5		14.1		14.0
Total depreciation and amortization	$	60.8	$	58.9	$	55.4

The equity method investments are shown below (in millions):

	For the Years Ended December 31,
	2014		2013		2012
Income from Equity Method Investments:
Refrigeration	$	2.5	$	2.5	$	2.6
Corporate and other (1)	11.3		9.7		7.9
Total income from equity method investments	$	13.8	$	12.2	$	10.5

⁽¹⁾ We allocated $11.7 million, $9.6 million and $5.0 million of income from equity method investments to our Residential Heating & Cooling and Commercial Heating & Cooling segments in 2014, 2013 and 2012, respectively. These allocations were recorded as reductions to the segments' Cost of goods sold in the Consolidated Statements of Operations.

Geographic Information

Net sales for each major geographic area in which we operate are shown below (in millions):

	For the Years Ended December 31,
	2014		2013		2012
Net Sales to External Customers by Point of Shipment:
United States	$	2,576.4	$	2,382.0	$	2,147.2
Canada	236.3		232.3		226.7
International	554.7		584.8		575.5
Total net sales to external customers	$	3,367.4	$	3,199.1	$	2,949.4

Property, plant and equipment, net for each major geographic area in which we operate, based on the domicile of our operations, are shown below (in millions):

	As of December 31,
	2014		2013		2012
Property, Plant and Equipment, net:
United States	$	243.4	$	230.3	$	227.9
Mexico	52.4		39.7		28.0
Canada	0.6		0.6		0.6
International	62.2		64.9		41.7
Total Property, plant and equipment, net	$	358.6	$	335.5	$	298.2

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Comprehensive Income (Details 1) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Changes in AOCI by component (net of tax) [Roll Forward]
Beginning balance	$ (61.1)	$ (22.3)
Other comprehensive income/(loss) before reclassifications	(100.7)	(6.5)
Amounts reclassified from AOCI	8.3	(32.3)
Net other comprehensive (loss) income	(92.4)	(38.8)
Ending balance	(153.5)	(61.1)
Gains / (Losses) on Cash Flow Hedges [Member]
Changes in AOCI by component (net of tax) [Roll Forward]
Beginning balance	(0.6)	1.1
Other comprehensive income/(loss) before reclassifications	(7.8)	(4.4)
Amounts reclassified from AOCI	3.8	2.7
Net other comprehensive (loss) income	(4.0)	(1.7)
Ending balance	(4.6)	(0.6)
Unrealized Gains / (Losses) on Available-for-Sale Securities [Member]
Changes in AOCI by component (net of tax) [Roll Forward]
Beginning balance	2.5	9.3
Other comprehensive income/(loss) before reclassifications	0.7	(6.8)
Amounts reclassified from AOCI	0	0
Net other comprehensive (loss) income	0.7	(6.8)
Ending balance	3.2	2.5
Defined Benefit Pension Plan Items [Member]
Changes in AOCI by component (net of tax) [Roll Forward]
Beginning balance	(106.0)	(147.5)
Other comprehensive income/(loss) before reclassifications	(47.9)	35.4
Amounts reclassified from AOCI	4.5	6.1
Net other comprehensive (loss) income	(43.4)	41.5
Ending balance	(149.4)	(106.0)
Foreign Currency Translation Adjustments [Member]
Changes in AOCI by component (net of tax) [Roll Forward]
Beginning balance	43.0	114.8
Other comprehensive income/(loss) before reclassifications	(45.7)	(30.7)
Amounts reclassified from AOCI	0	(41.1)
Net other comprehensive (loss) income	(45.7)	(71.8)
Ending balance	$ (2.7)	$ 43.0

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Stock-Based Compensation (Details 12)	12 Months Ended
	Dec. 31, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Maximum shares authorized	24,300,000
Shares available for future issuance	3,800,000
2012 Employee Stock Purchase Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Offering periods	3 months
Purchase price	95.00%
Maximum shares authorized	2,500,000
Employee purchased shares	20,000
Shares available for future issuance	2,400,000

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Stock-Based Compensation (Details 8) (Stock Appreciation Rights [Member])	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Stock Appreciation Rights [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected dividend yield	1.75%	1.36%	1.75%
Risk-free interest rate	1.27%	1.12%	0.48%
Expected volatility	29.60%	31.50%	40.42%
Expected life (in years)	4 years 0 months 15 days	4 years 0 months 8 days	4 years 1 month 21 days

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Derivatives (Details 1)	Dec. 31, 2014 lb	Dec. 31, 2013 lb
Copper [Member] | Designated as Hedging Instrument [Member]
Derivative [Line Items]
Derivative, nonmonetary notional amount	29,400,000	22,900,000
Copper [Member] | Not Designated as Hedging Instrument [Member]
Derivative [Line Items]
Derivative, nonmonetary notional amount	2,900,000	2,000,000
Aluminum [Member] | Not Designated as Hedging Instrument [Member]
Derivative [Line Items]
Derivative, nonmonetary notional amount	2,200,000	2,700,000

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Condensed Consolidating Financial Statements (Details Textual)	12 Months Ended
	Dec. 31, 2014
Condensed Financial Statements, Captions [Line Items]
Other Parent Company Disclosures	1

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Property, Plant and Equipment (Tables)

12 Months Ended

Dec. 31, 2014

Property, Plant and Equipment [Abstract]

Components of property, plant and equipment

Depreciation is computed using the straight-line method over the following estimated useful lives:

Buildings and improvements:
Buildings and improvements	5 to 30 years
Leasehold improvements	1 to 20 years
Machinery and equipment:
Computer hardware	3 to 5 years
Computer software	3 to 10 years
Factory machinery and equipment	1 to 15 years
Research and development equipment	5 to 10 years
Vehicles	3 to 8 years

Components of Property, plant and equipment, net were as follows (in millions):

	As of December 31,
	2014			2013
Land	$	38.3		$	39.5
Buildings and improvements	215.0			202.5
Machinery and equipment	681.8			634.0
Capital leases	27.0			25.2
Construction in progress and equipment not yet in service	50.6			51.6
Total	1,012.7			952.8
Less accumulated depreciation	(654.1		)	(617.3		)
Property, plant and equipment, net	$	358.6		$	335.5

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Employee Benefit Plans

12 Months Ended

Dec. 31, 2014

Compensation and Retirement Disclosure [Abstract]

Employee Benefit Plans

Employee Benefit Plans:

Over the past several years, we have frozen many of our defined benefit pension and profit sharing plans and replaced them with defined contribution plans. We have a liability for the benefits earned under these inactive plans prior to the date the benefits were frozen. Our defined contribution plans generally include both company and employee contributions which are based on predetermined percentages of compensation earned by the employee. We also have several active defined benefit plans that provide benefits based on years of service.

In addition to freezing the benefits of our defined benefit pension plans, we have also eliminated nearly all of our post-retirement medical benefits. In 2012, we amended the post-retirement benefit plan to shift pre-65 medical coverage for the employees of our largest manufacturing plant so that by 2015, retirees would pay 100% of the cost of post-retirement medical coverage. This change resulted in a significant reduction in the projected benefit obligation for post-retirement medical benefits in 2012.

Defined Contribution Plans

We recorded the following expenses related to our contributions to the defined contribution plans (in millions):

	For the Years Ended December 31,
	2014		2013		2012
Contributions to defined contribution plans (1)	$	14.8	$	13.7	$	13.2

⁽¹⁾ Contributions of $0.4 million and $2.0 million were included in Loss from discontinued operations for the years ended December 31, 2013 and 2012, respectively. No contributions were included in Loss from discontinued operations in 2014.

Pension and Post-retirement Benefit Plans

The following tables set forth amounts recognized in our financial statements and the plans' funded status for our pension and post-retirement benefit plans (dollars in millions):

	Pension Benefits						Other Benefits
	2014			2013			2014			2013
Accumulated benefit obligation	$	439.6		$	367.3		N/A			N/A
Changes in projected benefit obligation:
Benefit obligation at beginning of year	$	374.6		$	413.9		$	6.0		$	7.6
Service cost	4.2			5.2			—			—
Interest cost	17.7			16.2			0.2			0.2
Plan participants' contributions	—			—			0.6			0.7
Amendments	—			—			—			—
Other	—			0.1			—			—
Actuarial (gain) loss	77.0			(39.4		)	0.6			—
Effect of exchange rates	(4.3		)	(0.7		)	—			—
Divestiture	—			—			—			—
Settlements and curtailments	(0.8		)	(1.6		)	—			—
Benefits paid	(21.9		)	(19.1		)	(2.0		)	(2.5		)
Benefit obligation at end of year	$	446.5		$	374.6		$	5.4		$	6.0
Changes in plan assets:
Fair value of plan assets at beginning of year	$	302.8		$	276.8		$	—		$	—
Actual gain return on plan assets	23.3			37.4			—			—
Employer contribution	14.5			9.9			1.4			1.8
Plan participants' contributions	—			—			0.6			0.7
Effect of exchange rates	(2.9		)	(0.6		)	—			—
Divestiture	—			—			—			—
Plan settlements	(0.8		)	(1.6		)	—			—
Benefits paid	(21.9		)	(19.1		)	(2.0		)	(2.5		)
Fair value of plan assets at end of year	315.0			302.8			—			—
Funded status / net amount recognized	$	(131.5	)	$	(71.8	)	$	(5.4	)	$	(6.0	)
Net amount recognized consists of:
Current liability	$	(1.6	)	$	(1.8	)	$	(0.9	)	$	(1.4	)
Non-current liability	(129.9		)	(70.0		)	(4.5		)	(4.6		)
Net amount recognized	$	(131.5	)	$	(71.8	)	$	(5.4	)	$	(6.0	)

	For the Years Ended December 31,
	2014		2013
Pension plans with a benefit obligation in excess of plan assets:
Projected benefit obligation	$	446.5	$	374.6
Accumulated benefit obligation	439.6		367.3
Fair value of plan assets	315.0		302.8

Our U.S.-based pension plans comprised approximately 88% of the projected benefit obligation and 87% of plan assets as of December 31, 2014.

	Pension Benefits									Other Benefits
	2014			2013			2012			2014			2013			2012
Components of net periodic benefit cost as of December 31:
Service cost	$	4.2		$	5.2		$	5.8		$	—		$	—		$	0.2
Interest cost	17.7			16.2			17.5			0.2			0.2			0.4
Expected return on plan assets	(22.7		)	(20.7		)	(19.0		)	—			—			—
Amortization of prior service cost	0.3			0.4			0.4			(3.1		)	(3.1		)	(2.7		)
Recognized actuarial loss	6.6			9.2			8.7			1.5			1.5			1.4
Settlements and curtailments	0.4			1.5			7.1			—			—			—
Net periodic benefit cost (1)	$	6.5		$	11.8		$	20.5		$	(1.4	)	$	(1.4	)	$	(0.7	)

⁽¹⁾ Pension expense of $0.2 million and $6.9 million was included in Loss for discontinued operations for the years ended December 31, 2013 and 2012, respectively. No pension expense was included in Loss from discontinued operations in 2014.

The following table sets forth amounts recognized in AOCI and Other comprehensive income (loss) in our financial statements for 2014 and 2013 (in millions):

	Pension Benefits						Other Benefits
	2014			2013			2014			2013
Amounts recognized in AOCI:
Prior service costs	$	(1.3	)	$	(1.7	)	$	18.1		$	21.1
Actuarial loss	(231.8		)	(164.4		)	(19.8		)	(20.7		)
Subtotal	(233.1		)	(166.1		)	(1.7		)	0.4
Deferred taxes	84.7			59.9			0.6			(0.2		)
Net amount recognized	$	(148.4	)	$	(106.2	)	$	(1.1	)	$	0.2
Changes recognized in other comprehensive income (loss):
Adjustment to OCI due to reclassification	$	—		$	—		$	—		$	—
Current year prior service costs	—			—			—			—
Current year actuarial (gain) loss	75.9			(56.1		)	0.6			—
Effect of exchange rates	(1.8		)	(0.6		)	—			—
Amortization of prior service (costs) credits	(0.3		)	(1.1		)	3.1			3.1
Amortization of actuarial loss	(7.0		)	(10.0		)	(1.5		)	(1.5		)
Total recognized in other comprehensive income	$	66.8		$	(67.8	)	$	2.2		$	1.6
Total recognized in net periodic benefit cost and other comprehensive income (loss)	$	73.3		$	(56.0	)	$	0.8		$	0.2

The estimated prior service (costs) credits and actuarial losses that will be amortized from AOCI in 2014 are $(0.2) million and $(10.3) million, respectively, for pension benefits and $2.8 million and $(1.4) million, respectively, for other benefits.

The following tables set forth the weighted-average assumptions used to determine Benefit Obligations and Net Periodic Benefit Cost for the U.S.-based plans in 2014 and 2013:

	Pension Benefits				Other Benefits
	2014		2013		2014		2013
Weighted-average assumptions used to determine benefit obligations as of December 31:
Discount rate	4.04	%	4.88	%	3.23	%	3.57	%
Rate of compensation increase	4.23	%	4.23	%	—		—

	Pension Benefits						Other Benefits
	2014		2013		2012		2014		2013		2012
Weighted-average assumptions used to determine net periodic benefit cost for the years ended December 31:
Discount rate	4.88	%	3.97	%	4.83	%	3.57	%	2.72	%	4.64	%
Expected long-term return on plan assets	8.00	%	8.00	%	8.00	%	—		—		—
Rate of compensation increase	4.23	%	4.23	%	4.23	%	—		—		—

The following tables set forth the weighted-average assumptions used to determine Benefit Obligations and Net Periodic Benefit Cost for the non-U.S.-based plans in 2014 and 2013:

	Pension Benefits
	2014		2013
Weighted-average assumptions used to determine benefit obligations as of December 31:
Discount rate	3.45	%	4.38	%
Rate of compensation increase	3.66	%	3.31	%

	Pension Benefits
	2014		2013		2012
Weighted-average assumptions used to determine net periodic benefit cost for the years ended December 31:
Discount rate	4.38	%	4.12	%	4.93	%
Expected long-term return on plan assets	6.32	%	6.05	%	6.26	%
Rate of compensation increase	3.31	%	3.48	%	3.68	%

To develop the expected long-term rate of return on assets assumption for the U.S. plans, we considered the historical returns and the future expectations for returns for each asset category, as well as the target asset allocation of the pension portfolio and the effect of periodic balancing. These results were adjusted for the payment of reasonable expenses of the plan from plan assets. This resulted in the selection of the 8.0% long-term rate of return on assets assumption. A similar process was followed for the non-U.S.-based plans.

To select a discount rate for the purpose of valuing the plan obligations for the U.S. plans, we performed an analysis in which the duration of projected cash flows from defined benefit and retiree healthcare plans was matched with a yield curve based on the appropriate universe of high-quality corporate bonds that were available. We used the results of the yield curve analysis to select the discount rate that matched the duration and payment stream of the benefits in each plan. This resulted in the selection of the 4.94% discount rate assumption for the U.S. qualified pension plans, 4.30% for the U.S. non-qualified pension plans, and 3.23% for the other benefits. A similar process was followed for the non-U.S.-based plans.

Assumed health care cost trend rates have an effect on the amounts reported for our healthcare plan. The following table sets forth the healthcare trend rate assumptions used:

	2014		2013
Assumed health care cost trend rates as of December 31:
Health care cost trend rate assumed for next year	7.50	%	8.00	%
Rate to which the cost rate is assumed to decline (the ultimate trend rate)	5.00	%	5.00	%
Year that the rate reaches the ultimate trend rate	2020		2020

A one percentage-point change in assumed healthcare cost trend rates would have the following effects (in millions):

	1-Percentage-Point Increase		1-Percentage-Point Decrease
Effect on total of service and interest cost	$	—	$	—
Effect on the post-retirement benefit obligation	0.2		(0.2		)

Expected future benefit payments are shown in the table below (in millions):

	For the Years Ended December 31,
	2015		2016		2017		2018		2019		2020-2024
Pension benefits	$	18.0	$	18.3	$	18.9	$	19.5	$	20.0	$	124.9
Other benefits	0.9		0.7		0.6		0.6		0.5		1.7

Pension Plan Assets

We believe asset returns can be optimized at an acceptable level of risk by adequately diversifying the plan assets between equity and fixed income. In the first quarter of 2014, in order to increase diversification, we changed the targeted allocations for our plan assets. The target allocations for fixed income, money market, cash and guaranteed investment contracts investments increased from 40% to 58% while targeted equity investment allocations declined from 60% to 42%. We decreased our exposure to International equity from 24% to 17% of total assets and reduced our exposure to domestic equity from 36% to 25%. These categories are further diversified among various asset classes including high yield and emerging markets debt, and international and emerging markets equities in order to avoid significant concentrations of risk. Our U.S. pension plan represents 88%, our Canadian pension plan 6%, and our United Kingdom (“U.K.”) pension plan 6% of the total fair value of our plan assets as of December 31, 2014.

Our U.S. pension plans' weighted-average asset allocations as of December 31, 2014 and 2013, by asset category, are as follows:

	Plan Assets as of December 31,
Asset Category:	2014		2013
U.S. equity	28.3	%	37.8	%
International equity	17.1	%	26.7	%
Fixed income	52.6	%	33.8	%
Money market/cash	2.0	%	1.7	%
Total	100.0	%	100.0	%

U.S. pension plan assets are invested within the following range targets:

Asset Category:	Target
U.S. equity	25.0	%
International equity	17.0	%
Fixed income	56.0	%
Money market/cash/guaranteed investment contracts	2.0	%

Our Canadian pension plan was invested solely in a balanced fund that maintains diversification among various asset classes, including Canadian common stocks, bonds and money market securities, international equities and fixed income investments. Our U.K. pension plan was invested in a broad mix of assets consisting of U.K., international equities, and U.K. fixed income securities, including corporate and government bonds.

The fair values of our pension plan assets, by asset category, are as follows (in millions):

	Fair Value Measurements as of December 31, 2014
	Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)	Total
Asset Category:
Cash and cash equivalents	5.8	—	—	5.8
Commingled pools / Collective Trusts:
U.S. equity (1)	—	78.0	—	78.0
International equity (2)	—	47.3	—	47.3
Fixed income (3)	—	145.4	—	145.4
Balanced pension trust: (4)
International equity	—	4.7	—	4.7
Fixed income	—	14.2	—	14.2
Pension fund:
International equity (5)	—	11.4	—	11.4
Fixed income (6)	—	8.2	—	8.2
Total	5.8	309.2	—	315.0

	Fair Value Measurements as of December 31, 2013
	Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)	Total
Asset Category:
Cash and cash equivalents	8.2	—	—	8.2
Commingled pools / Collective Trusts:
U.S. equity (1)	—	100.1	—	100.1
International equity (2)	—	70.8	—	70.8
Fixed income (3)	—	89.4	—	89.4
Balanced pension trust: (4)
International equity	—	10.8	—	10.8
Fixed income	—	7.2	—	7.2
Pension fund:
International equity (5)	—	9.4	—	9.4
Fixed income (6)	—	6.9	—	6.9
Total	8.2	294.6	—	302.8

Additional information about assets measured at Net Asset Value (“NAV”) per share (in millions):

	As of December 31, 2014
	Fair Value		Redemption Frequency  (if currently eligible)	Redemption Notice Period
Asset Category:
Commingled pools / Collective Trusts:
U.S. equity (1)	$	78.0	Daily	5 days
International equity (2)	47.3		Daily	5 days
Fixed income (3)	145.4		Daily	5-15 days
Balanced pension trust: (4)
International equity	4.7		Daily	3-5 days
Fixed income	14.2		Daily	3-5 days
Pension fund:
International equity (5)	11.4		Daily	1-7 days
Fixed income (6)	8.2		Daily	1-7 days
Total	$	309.2

	As of December 31, 2013
	Fair Value		Redemption Frequency  (if currently eligible)	Redemption Notice Period
Asset Category:
Commingled pools / Collective Trusts:
U.S. equity (1)	$	100.1	Daily	5 days
International equity (2)	70.8		Daily	5 days
Fixed income (3)	89.4		Daily	5-15 days
Balanced pension trust: (4)
International equity	10.8		Daily	3-5 days
Fixed income	7.2		Daily	3-5 days
Pension fund:
International equity (5)	9.4		Daily	7 days
Fixed income (6)	6.9		Daily	7 days
Total	$	294.6

(1)	This category includes investments primarily in U.S. equity securities that include large, mid and small capitalization companies.
(2)	This category includes investments primarily in international equity securities that include large, mid and small capitalization companies in large developed markets as well as emerging markets equities.
(3)	This category includes investments in U.S. investment grade and high yield fixed income securities, international fixed income securities and emerging markets fixed income securities.
(4)	The investment objectives of the fund are to provide long-term capital growth and income by investing primarily in a well-diversified, balanced portfolio of Canadian common stocks, bonds and money market securities. The fund also holds a portion of its assets in international equities.
(5)	This category includes investments in international equity securities and aims to provide returns consistent with the markets in which it invests and provide broad exposure to countries around the world.
(6)	This category includes investments in U.K. government index-linked securities (index-linked gilts) that have maturity periods of 5 years or longer and investment grade corporate bonds denominated in sterling.

The majority of our commingled pool/collective trusts, mutual funds, balanced pension trusts and pension funds are managed by professional investment advisors. The NAVs per share are furnished in monthly and/or quarterly statements received from the investment advisors and reflect valuations based upon their pricing policies. We assessed the fair value classification of these investments as Level 2 for commingled pool/collective trusts, balanced pension trusts and pension funds based on an examination of their pricing policies and the related controls and procedures. The fair values we report are based on the pool, trust or fund's NAV per share. The NAVs per share are calculated periodically (daily or no less than one time per month) as the aggregate value of each pool or trust's underlying assets divided by the number of units owned. See Note 20 for information about our fair value hierarchies and valuation techniques.

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Employee Benefit Plans (Details) (USD $)	12 Months Ended
	Dec. 31, 2014		Dec. 31, 2013		Dec. 31, 2012
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Contributions to defined contribution plans	$ 14,800,000	[1]	$ 13,700,000	[1]	$ 13,200,000	[1]
Other Postretirement Benefit Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Defined Benefit Plan, Assumptions Used Calculating Benefit Obligation, Discount Rate	3.23%		3.57%

[1] Contributions of $0.4 million and $2.0 million were included in Loss from discontinued operations for the years ended December 31, 2013 and 2012, respectively.