Revenue Recognition

3 Months Ended

Mar. 31, 2024

Revenue Recognition and Deferred Revenue [Abstract]

Revenue Recognition

6. Revenue Recognition:

The following table disaggregates our revenue by business segment by geography which provides information as to the major source of revenue. See Note 2 for additional information on our reportable business segments and the products and services sold in each segment. All amount presented reflect the revised segment presentation.

	For the Three Months Ended March 31, 2024
Primary Geographic Markets	Home Comfort Solutions		Building Climate Solutions		Corporate and Other		Consolidated
United States	$	626.1	$	357.3	$	—	$	983.4
Canada	48.5		15.2		—		63.7
Other international	—		—		—		—
Total	$	674.6	$	372.5	$	—	$	1,047.1

	For the Three Months Ended March 31, 2023
Primary Geographic Markets	Home Comfort Solutions		Building Climate Solutions		Corporate and Other		Consolidated
United States	$	639.3	$	294.6	$	—	$	933.9
Canada	41.7		14.1		—		55.8
Other international	—		—		59.7		59.7
Total	$	681.0	$	308.7	$	59.7	$	1,049.4

Home Comfort Solutions - We manufacture and market a broad range of furnaces, air conditioners, heat pumps, packaged heating and cooling systems, equipment and accessories to improve indoor air quality, comfort control products, replacement parts and supplies and related products for both the residential replacement and new construction markets in North America. These products are sold under various brand names and are sold either through direct sales to a network of independent installing dealers, including through our network of Lennox stores or to independent distributors. For the three months ended March 31, 2024 and 2023, direct sales represented 74% and 70% of revenues, and sales to independent distributors represented the remainder. Given the nature of our business, customer product orders are fulfilled at a point in time and not over a period of time.

Building Climate Solutions - 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. These products are distributed primarily through commercial contractors and directly to national account customers in the planned replacement, emergency replacement and new construction markets. We manufacture and market equipment for the commercial refrigeration markets under the Heatcraft Worldwide Refrigeration name. Our products are used in the food retail, food service, cold storage as well as non-food refrigeration markets. We sell these products to distributors, installing contractors, engineering design firms, original equipment manufacturers and end-users. Lennox National Account Services provides installation, service and preventive maintenance for HVAC national account customers in the United States and Canada. AES manufactures curb, curb adapters, drop box diffusers, offers HVAC recycling and salvage services and focuses on multi-family HVAC replacement for expired mechanical assets. Revenue related to service contracts is recognized as the services are performed under the contract based on the relative fair value of the services provided. For the three months ended March 31, 2024 and 2023, equipment sales represented 83% and 85% of revenues and the remainder of our revenue was generated from our service business.

Corporate and Other - In Europe, we manufactured and marketed equipment for the global commercial refrigeration markets. We also manufactured and sold unitary heating and cooling products and applied systems. A de minimis amount of segment revenue related to services for start-up and commissioning activities. In the fourth quarter of 2023, we completed the divestiture of our European operations.

Contract Liabilities - Our contract liabilities consist of advance payments and deferred revenue. Net contract liabilities consisted of the following (in millions) as of:

	March 31, 2024		December 31, 2023
Contract assets	$	1.9	$	2.2
Contract liabilities - current	(3.6)		(4.7)
Contract liabilities - noncurrent	(7.5)		(7.5)
Total	$	(9.2)	$	(10.0)

For the three months ended March 31, 2024 and 2023, we recognized revenue of $5.7 million and $3.0 million related to our contract liabilities at January 1, 2024 and 2023, respectively. Impairment losses recognized in our receivables and contract assets were de minimis in 2024 and 2023.