Condensed Consolidating Financial Statements (Tables)

6 Months Ended

Jun. 30, 2018

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

Lennox International Inc. and Subsidiaries

Condensed Consolidating Balance Sheets

As of June 30, 2018



(Amounts in millions)	Parent			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated
ASSETS
Current Assets:
Cash and cash equivalents	$	1.6		$	22.6	$	15.2		$	—		$	39.4
Accounts and notes receivable, net	—			67.5		673.8			—			741.3
Inventories, net	—			442.9		102.5			(5.2		)	540.2
Assets held for sale	—			—		11.6			—			11.6
Other assets	4.0			27.5		55.5			(33.7		)	53.3
Total current assets	5.6			560.5		858.6			(38.9		)	1,385.8
Property, plant and equipment, net	—			260.7		114.2			(3.9		)	371.0
Goodwill	—			166.2		20.6			—			186.8
Investment in subsidiaries	1,668.2			598.5		(0.5		)	(2,266.2		)	—
Deferred income taxes	7.4			69.0		25.0			(12.2		)	89.2
Other assets, net	1.5			46.9		19.7			(1.5		)	66.6
Intercompany (payables) receivables, net	(771.2		)	718.9		126.0			(73.7		)	—
Total assets	$	911.5		$	2,420.7	$	1,163.6		$	(2,396.4	)	$	2,099.4
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Short-term debt	$	—		$	—	$	3.8		$	—		$	3.8
Current maturities of long-term debt	29.4			0.1		0.3			—			29.8
Accounts payable	25.8			301.1		110.6			—			437.5
Accrued expenses	4.3			208.5		40.8			—			253.6
Liabilities held for sale	—			—		7.4			—			7.4
Income taxes payable (receivable)	14.8			11.4		36.7			(50.9		)	12.0
Total current liabilities	74.3			521.1		199.6			(50.9		)	744.1
Long-term debt	1,017.4			11.6		290.0			—			1,319.0
Post-retirement benefits, other than pensions	—			2.5		—			—			2.5
Pensions	—			77.8		8.7			—			86.5
Other liabilities	—			119.7		7.8			—			127.5
Total liabilities	1,091.7			732.7		506.1			(50.9		)	2,279.6
Commitments and contingencies
Total stockholders' equity	(180.2		)	1,688.0		657.5			(2,345.5		)	(180.2		)
Total liabilities and stockholders' equity	$	911.5		$	2,420.7	$	1,163.6		$	(2,396.4	)	$	2,099.4

Lennox International Inc. and Subsidiaries

Condensed Consolidating Balance Sheets

As of December 31, 2017



(Amounts in millions)	Parent			Guarantor Subsidiaries		Non- Guarantor Subsidiaries			Eliminations			Consolidated
ASSETS
Current Assets:
Cash and cash equivalents	$	1.6		$	28.0	$	38.6		$	—		$	68.2
Accounts and notes receivable, net	—			35.3		471.2			—			506.5
Inventories, net	—			355.7		131.9			(3.4		)	484.2
Other assets	16.2			23.1		67.5			(28.4		)	78.4
Total current assets	17.8			442.1		709.2			(31.8		)	1,137.3
Property, plant and equipment, net	—			257.6		144.4			(4.2		)	397.8
Goodwill	—			134.9		65.6			—			200.5
Investment in subsidiaries	1,257.7			365.8		(0.6		)	(1,622.9		)	—
Deferred income taxes	3.9			69.1		33.6			(12.2		)	94.4
Other assets, net	2.1			41.3		19.6			(1.5		)	61.5
Intercompany (payables) receivables, net	(559.3		)	554.7		107.4			(102.8		)	—
Total assets	$	722.2		$	1,865.5	$	1,079.2		$	(1,775.4	)	$	1,891.5
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Short-term debt	$	—		$	—	$	0.9		$	—		$	0.9
Current maturities of long-term debt	29.4			2.9		0.3			—			32.6
Accounts payable	21.3			228.0		99.3			—			348.6
Accrued expenses	3.1			209.4		57.8			—			270.3
Income taxes (receivable) payable	(64.5		)	56.5		60.9			(50.8		)	2.1
Total current liabilities	(10.7		)	496.8		219.2			(50.8		)	654.5
Long-term debt	682.8			11.7		276.0			—			970.5
Post-retirement benefits, other than pensions	—			2.6		—			—			2.6
Pensions	—			74.7		9.8			—			84.5
Other liabilities	—			120.6		8.7			—			129.3
Total liabilities	672.1			706.4		513.7			(50.8		)	1,841.4
Commitments and contingencies
Total stockholders' equity	50.1			1,159.1		565.5			(1,724.6		)	50.1
Total liabilities and stockholders' equity	$	722.2		$	1,865.5	$	1,079.2		$	(1,775.4	)	$	1,891.5

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, 2018



(Amounts in millions)	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net Sales	$	—		$	1,057.8		$	303.8		$	(186.2	)	$	1,175.4
Cost of goods sold	—			745.0			255.3			(186.5		)	813.8
Gross profit	—			312.8			48.5			0.3			361.6
Operating expenses:
Selling, general and administrative expenses	—			151.0			10.7			(0.3		)	161.4
Losses (gains) and other expenses, net	0.3			(3.3		)	3.3			(0.1		)	0.2
Restructuring charges	—			—			0.5			—			0.5
(Gain) loss, net on sale of business and related property	—			(0.9		)	(21.2		)	—			(22.1		)
Loss on assets held for sale	—			—			31.4			—			31.4
Income from equity method investments	(139.6		)	(17.1		)	(3.7		)	155.5			(4.9		)
Operating income	139.3			183.1			27.5			(154.8		)	195.1
Interest expense, net	2.4			5.2			2.2			—			9.8
Other expense, net	—			0.7			0.1			—			0.8
Income (loss) from continuing operations before income taxes	136.9			177.2			25.2			(154.8		)	184.5
Provision for income tax (benefit) expense	(0.7		)	43.8			2.3			(0.1		)	45.3
Income (loss) from continuing operations	137.6			133.4			22.9			(154.7		)	139.2
Loss from discontinued operations, net of tax	—			—			(1.6		)	—			(1.6		)
Net income (loss)	$	137.6		$	133.4		$	21.3		$	(154.7	)	$	137.6
Other comprehensive (loss) income, net of tax	(2.3		)	11.9			(9.3		)	—			0.3
Comprehensive income (loss)	$	135.3		$	145.3		$	12.0		$	(154.7	)	$	137.9

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 tax (benefit) expense	(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 (loss) income, net of tax	(1.5		)	0.3			10.2			1.1			10.1
Comprehensive (loss) income	$	114.0		$	117.6		$	31.1		$	(137.1	)	$	125.6

Condensed Consolidating Statements of Cash Flows

Lennox International Inc. and Subsidiaries

Condensed Consolidating Statements of Cash Flows

For the Six Months Ended June 30, 2018



(Amounts in millions)	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations		Consolidated
Cash flows from operating activities	$	87.2		$	(7.9	)	$	(114.3	)	$	—	$	(35.0	)
Cash flows from investing activities:
Proceeds from the disposal of property, plant and equipment	—			—			0.1			—		0.1
Purchases of property, plant and equipment	—			(33.0		)	(10.4		)	—		(43.4		)
Proceeds from sale of businesses	—			—			111.8			—		111.8
Net cash (used in) provided by investing activities	—			(33.0		)	101.5			—		68.5
Cash flows from financing activities:
Short-term borrowings, net	—			—			2.9			—		2.9
Asset securitization borrowings	—			—			65.0			—		65.0
Asset securitization payments	—			—			(51.0		)	—		(51.0		)
Long-term debt payments	(15.0		)	(2.7		)	(0.1		)	—		(17.8		)
Long-term borrowings	—			—			—			—		—
Borrowings from credit facility	1,391.0			—			—			—		1,391.0
Payments on credit facility	(1,042.0		)	—			—			—		(1,042.0		)
Proceeds from employee stock purchases	1.2			—			—			—		1.2
Repurchases of common stock	(350.2		)	—			—			—		(350.2		)
Repurchases of common stock to satisfy employee withholding tax obligations	(18.6		)	—			—			—		(18.6		)
Intercompany debt	(53.0		)	83.5			(30.5		)	—		—
Intercompany financing activity	41.8			(45.3		)	3.5			—		—
Cash dividends paid	(42.4		)	—			—			—		(42.4		)
Net cash (used in) provided by financing activities	(87.2		)	35.5			(10.2		)	—		(61.9		)
Decrease in cash and cash equivalents	—			(5.4		)	(23.0		)	—		(28.4		)
Effect of exchange rates on cash and cash equivalents	—			—			(0.4		)	—		(0.4		)
Cash and cash equivalents, beginning of period	1.6			28.0			38.6			—		68.2
Cash and cash equivalents, end of period	$	1.6		$	22.6		$	15.2		$	—	$	39.4

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 (used in) provided by financing activities	(323.9		)	236.3			183.0			—		95.4
Increase (decrease) 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