Condensed Consolidating Financial Statements (Tables)

6 Months Ended

Jun. 30, 2017

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

Lennox International Inc. and Subsidiaries

Condensed Consolidating Balance Sheets

As of June 30, 2017



(Amounts in millions)	Parent			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated
ASSETS
Current Assets:
Cash and cash equivalents	$	3.4		$	24.9	$	33.0		$	—		$	61.3
Accounts and notes receivable, net	—			49.0		640.9			—			689.9
Inventories, net	—			414.2		136.9			(12.3		)	538.8
Other assets	14.5			52.4		63.8			(54.0		)	76.7
Total current assets	17.9			540.5		874.6			(66.3		)	1,366.7
Property, plant and equipment, net	—			243.8		132.5			(4.6		)	371.7
Goodwill	—			134.9		64.1			—			199.0
Investment in subsidiaries	1,095.6			531.1		(0.6		)	(1,626.1		)	—
Deferred income taxes	11.9			112.3		31.8			(14.7		)	141.3
Other assets, net	1.7			40.4		27.1			(2.1		)	67.1
Intercompany receivables (payables), net	(161.4		)	153.6		81.0			(73.2		)	—
Total assets	$	965.7		$	1,756.6	$	1,210.5		$	(1,787.0	)	$	2,145.8
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Short-term debt	$	—		$	—	$	251.3		$	—		$	251.3
Current maturities of long-term debt	14.4			0.3		0.3			—			15.0
Accounts payable	21.5			291.6		130.0			(0.6		)	442.5
Accrued expenses	2.0			201.2		54.0			—			257.2
Income taxes payable	9.2			51.1		42.4			(79.2		)	23.5
Total current liabilities	47.1			544.2		478.0			(79.8		)	989.5
Long-term debt	907.9			14.4		0.3			—			922.6
Post-retirement benefits, other than pensions	—			2.1		—			—			2.1
Pensions	—			76.5		13.0			—			89.5
Other liabilities	—			122.6		11.4			(2.5		)	131.5
Total liabilities	955.0			759.8		502.7			(82.3		)	2,135.2
Commitments and contingencies
Total stockholders' equity	10.7			996.8		707.8			(1,704.7		)	10.6
Total liabilities and stockholders' equity	$	965.7		$	1,756.6	$	1,210.5		$	(1,787.0	)	$	2,145.8

Lennox International Inc. and Subsidiaries

Condensed Consolidating Balance Sheets

As of December 31, 2016



(Amounts in millions)	Parent			Guarantor Subsidiaries		Non- Guarantor Subsidiaries			Eliminations			Consolidated
ASSETS
Current Assets:
Cash and cash equivalents	$	1.2		$	17.1	$	31.9		$	—		$	50.2
Accounts and notes receivable, net	—			30.6		439.2			—			469.8
Inventories, net	—			314.7		108.9			(5.1		)	418.5
Other assets	12.8			48.8		67.5			(61.7		)	67.4
Total current assets	14.0			411.2		647.5			(66.8		)	1,005.9
Property, plant and equipment, net	—			237.6		123.8			—			361.4
Goodwill	—			134.9		60.2			—			195.1
Investment in subsidiaries	1,166.9			524.7		(0.5		)	(1,691.1		)	—
Deferred income taxes	6.8			113.5		31.1			(14.7		)	136.7
Other assets, net	3.6			40.0		19.0			(1.4		)	61.2
Intercompany (payables) receivables, net	(382.4		)	375.2		80.4			(73.2		)	—
Total assets	$	808.9		$	1,837.1	$	961.5		$	(1,847.2	)	$	1,760.3
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Short-term debt	$	—		$	—	$	52.4		$	—		$	52.4
Current maturities of long-term debt	199.3			0.4		0.4			—			200.1
Accounts payable	18.5			248.5		94.2			—			361.2
Accrued expenses	6.3			206.3		53.3			—			265.9
Income taxes (receivable) payable	(54.0		)	89.8		52.5			(79.3		)	9.0
Total current liabilities	170.1			545.0		252.8			(79.3		)	888.6
Long-term debt	600.9			14.5		0.3			—			615.7
Post-retirement benefits, other than pensions	—			2.8		—			—			2.8
Pensions	—			75.5		12.0			—			87.5
Other liabilities	—			119.1		11.1			(2.5		)	127.7
Total liabilities	771.0			756.9		276.2			(81.8		)	1,722.3
Commitments and contingencies
Total stockholders' equity	37.9			1,080.2		685.3			(1,765.4		)	38.0
Total liabilities and stockholders' equity	$	808.9		$	1,837.1	$	961.5		$	(1,847.2	)	$	1,760.3

Condensed Consolidating Statements of Operations and Comprehensive Income

Lennox International Inc. and Subsidiaries

Condensed Consolidating Statements of Operations and Comprehensive Income

For the Three Months Ended June 30, 2017



(Amounts in millions)	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net Sales	$	—		$	968.7		$	310.9		$	(177.5	)	$	1,102.1
Cost of goods sold	—			672.7			264.5			(175.9		)	761.3
Gross profit	—			296.0			46.4			(1.6		)	340.8
Operating expenses:
Selling, general and administrative expenses	—			147.9			20.8			(0.2		)	168.5
Losses (gains) and other expenses, net	0.3			1.9			0.2			(0.1		)	2.3
Restructuring charges	—			—			0.1			—			0.1
Income from equity method investments	(120.6		)	(17.5		)	(4.5		)	137.1			(5.5		)
Operating income	120.3			163.7			29.8			(138.4		)	175.4
Interest expense, net	7.4			(0.8		)	1.6			—			8.2
Other expense, net	—			—			(0.1		)	—			(0.1		)
Income from continuing operations before income taxes	112.9			164.5			28.3			(138.4		)	167.3
Provision for income taxes	(2.6		)	47.2			6.5			(0.2		)	50.9
Income from continuing operations	115.5			117.3			21.8			(138.2		)	116.4
Loss from discontinued operations, net of tax	—			—			(0.9		)	—			(0.9		)
Net income	$	115.5		$	117.3		$	20.9		$	(138.2	)	$	115.5
Other comprehensive income (loss), net of tax	(1.5		)	0.3			10.2			1.1			10.1
Comprehensive income	$	114.0		$	117.6		$	31.1		$	(137.1	)	$	125.6

Lennox International Inc. and Subsidiaries

Condensed Consolidating Statements of Operations and Comprehensive Income

For the Six Months Ended June 30, 2017



(Amounts in millions)	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Net Sales	$	—		$	1,655.0		$	569.7		$	(329.1	)	$	1,895.6
Cost of goods sold	—			1,186.0			482.1			(324.3		)	1,343.8
Gross profit	—			469.0			87.6			(4.8		)	551.8
Operating expenses:
Selling, general and administrative expenses	—			278.5			42.8			(0.4		)	320.9
Losses (gains) and other expenses, net	0.9			3.8			0.8			(0.1		)	5.4
Restructuring charges	—			0.1			0.1			—			0.2
Income from equity method investments	(169.3		)	(30.1		)	(9.3		)	197.8			(10.9		)
Operating income	168.4			216.7			53.2			(202.1		)	236.2
Interest expense, net	14.7			(1.7		)	2.7			—			15.7
Other expense, net	—			—			(0.1		)	—			(0.1		)
Income from continuing operations before income taxes	153.7			218.4			50.6			(202.1		)	220.6
Provision for income taxes	(5.3		)	54.3			12.7			(1.0		)	60.7
Income from continuing operations	159.0			164.1			37.9			(201.1		)	159.9
Loss from discontinued operations, net of tax	—			—			(0.9		)	—			(0.9		)
Net income	$	159.0		$	164.1		$	37.0		$	(201.1	)	$	159.0
Other comprehensive income (loss), net of tax	$	(72.8	)	$	(29.1	)	$	21.0		$	109.5		$	28.6
Comprehensive income	$	86.2		$	135.0		$	58.0		$	(91.6	)	$	187.6

Lennox International Inc. and Subsidiaries

Condensed Consolidating Statements of Operations and Comprehensive Income

For the Three Months Ended June 30, 2016



(Amounts in millions)	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Net Sales	$	—		$	884.5		$	183.4		$	(48.7	)	$	1,019.2
Cost of goods sold	—			611.7			141.2			(48.7		)	704.2
Gross profit	—			272.8			42.2			—			315.0
Operating expenses:
Selling, general and administrative expenses	—			139.9			19.5			—			159.4
Losses and other expenses, net	—			0.7			(0.2		)	(0.1		)	0.4
Restructuring gains	—			1.0			(0.2		)	—			0.8
Income from equity method investments	(115.5		)	(9.5		)	(5.2		)	123.9			(6.3		)
Operating income	115.5			140.7			28.3			(123.8		)	160.7
Interest expense, net	6.3			(0.5		)	1.0			—			6.8
Other expense, net	—			—			(0.2		)	—			(0.2		)
Income from continuing operations before income taxes	109.2			141.2			27.5			(123.8		)	154.1
Provision for income taxes	(1.5		)	34.8			9.5			0.1			42.9
Income from continuing operations	110.7			106.4			18.0			(123.9		)	111.2
Loss from discontinued operations, net of tax	—			—			(0.5		)	—			(0.5		)
Net income	$	110.7		$	106.4		$	17.5		$	(123.9	)	$	110.7
Other comprehensive loss, net of tax	0.3			0.3			2.7			0.8			4.1
Comprehensive income (loss)	$	111.0		$	106.7		$	20.2		$	(123.1	)	$	114.8

Lennox International Inc. and Subsidiaries

Condensed Consolidating Statements of Operations and Comprehensive Income

For the Six Months Ended June 30, 2016



(Amounts in millions)	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Net Sales	$	—		$	1,498.3		$	327.2		$	(91.1	)	$	1,734.4
Cost of goods sold	—			1,072.4			252.5			(89.1		)	1,235.8
Gross profit	—			425.9			74.7			(2.0		)	498.6
Operating expenses:
Selling, general and administrative expenses	—			258.6			41.1			—			299.7
Losses and other expenses, net	(0.6		)	3.1			2.2			—			4.7
Restructuring gains	—			1.0			(0.4		)	—			0.6
Income from equity method investments	(143.5		)	(9.5		)	(9.2		)	151.4			(10.8		)
Operating income	144.1			172.7			41.0			(153.4		)	204.4
Interest expense, net	11.7			(1.0		)	2.0			—			12.7
Other expense, net	—			—			(0.3		)	—			(0.3		)
Income from continuing operations before income taxes	132.4			173.7			39.3			(153.4		)	192.0
Provision for income taxes	(3.1		)	46.8			12.9			(0.7		)	55.9
Income from continuing operations	135.5			126.9			26.4			(152.7		)	136.1
Loss from discontinued operations, net of tax	—			—			0.5			—			0.5
Net income	$	135.5		$	126.9		$	25.9		$	(152.7	)	$	135.6
Other comprehensive loss, net of tax	4.9			2.4			9.0			1.8			18.1
Comprehensive income (loss)	$	140.4		$	129.3		$	34.9		$	(150.9	)	$	153.7

Condensed Consolidating Statements of Cash Flows

Lennox International Inc. and Subsidiaries

Condensed Consolidating Statements of Cash Flows

For the Six Months Ended June 30, 2017



(Amounts in millions)	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations		Consolidated
Cash flows from operating activities	$	326.1		$	(191.4	)	$	(183.0	)	$	—	$	(48.3	)
Cash flows from investing activities:
Proceeds from the disposal of property, plant and equipment	—			0.1			0.1			—		0.2
Purchases of property, plant and equipment	—			(37.2		)	(6.2		)	—		(43.4		)
Net cash used in investing activities	—			(37.1		)	(6.1		)	—		(43.2		)
Cash flows from financing activities:
Short-term borrowings, net	—			—			(1.1		)	—		(1.1		)
Asset securitization borrowings	—			—			200.0			—		200.0
Asset securitization payments	—			—			—			—		—
Long-term debt payments	(200.0		)	(0.2		)	(0.3		)	—		(200.5		)
Borrowings from credit facility	1,352.5			—			—			—		1,352.5
Payments on credit facility	(1,031.0		)	—			—			—		(1,031.0		)
Proceeds from employee stock purchases	1.5			—			—			—		1.5
Repurchases of common stock	(175.0		)	—			—			—		(175.0		)
Repurchases of common stock to satisfy employee withholding tax obligations	(14.1		)	—			—			—		(14.1		)
Intercompany debt	(25.5		)	6.4			19.1			—		—
Intercompany financing activity	(195.4		)	230.1			(34.7		)	—		—
Cash dividends paid	(36.9		)	—			—			—		(36.9		)
Net cash provided by financing activities	(323.9		)	236.3			183.0			—		95.4
Increase in cash and cash equivalents	2.2			7.8			(6.1		)	—		3.9
Effect of exchange rates on cash and cash equivalents	—			—			7.2			—		7.2
Cash and cash equivalents, beginning of period	1.2			17.1			31.9			—		50.2
Cash and cash equivalents, end of period	$	3.4		$	24.9		$	33.0		$	—	$	61.3

Lennox International Inc. and Subsidiaries

Condensed Consolidating Statements of Cash Flows

For the Six Months Ended June 30, 2016



(Amounts in millions)	Parent				Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations		Consolidated
Cash flows from operating activities	$	62.1			$	(51.3	)	$	(36.1	)	$	—	$	(25.3	)
Cash flows from investing activities:
Purchases of property, plant and equipment	—				(36.8		)	(4.9		)	—		(41.7		)
Net cash used in investing activities	—				(36.8		)	(4.9		)	—		(41.7		)
Cash flows from financing activities:
Short-term borrowings, net	—				—			0.5			—		0.5
Asset securitization borrowings	—				—			40.0			—		40.0
Asset securitization payments	—				—			(20.0		)	—		(20.0		)
Long-term debt payments	(7.5		)		(0.5		)	(0.2		)	—		(8.2		)
Borrowings from credit facility	1,184.5				—			—			—		1,184.5
Payments on credit facility	(864.0		)		—			—			—		(864.0		)
Proceeds from employee stock purchases	1.3				—			—			—		1.3
Repurchases of common stock	(200.0		)		—			—			—		(200.0		)
Repurchases of common stock to satisfy employee withholding tax obligations	(21.4		)		—			—			—		(21.4		)
Intercompany debt	(11.9		)		(4.3		)	16.2			—		—
Intercompany financing activity	(110.2		)		109.1			1.1			—		—
Intercompany investments	—			—	—			—			—		—
Cash dividends paid	(31.8		)		—			—			—		(31.8		)
Net cash provided by financing activities	(61.0		)		104.3			37.6			—		80.9
Increase in cash and cash equivalents	1.1				16.2			(3.4		)	—		13.9
Effect of exchange rates on cash and cash equivalents	—				—			1.9			—		1.9
Cash and cash equivalents, beginning of period	0.5				7.8			30.6			—		38.9
Cash and cash equivalents, end of period	$	1.6			$	24.0		$	29.1		$	—	$	54.7