Condensed consolidating financial statements of the Company, its Guarantor Subsidiaries and Non-Guarantor Subsidiaries as of June 30, 2013 and December 31, 2012 and for the three and six months ended June 30, 2013 and 2012 are shown on the following pages.

Lennox International Inc. and Subsidiaries

Condensed Consolidating Balance Sheets

As of June 30, 2013

(In millions)



	Parent			Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Consolidated
ASSETS
Current Assets:
Cash and cash equivalents	$	1.3		$	20.3	$	23.7	$	—		$	45.3
Accounts and notes receivable, net	—			1,082.8		561.5		(1,102.0		)	542.3
Inventories, net	—			342.2		137.2		(10.2		)	469.2
Deferred income taxes, net	4.7			23.0		5.7		(1.7		)	31.7
Other assets	—			36.7		82.1		(77.4		)	41.4
Assets of discontinued operations	—			—		—		—			—
Total current assets	6.0			1,505.0		810.2		(1,191.3		)	1,129.9
Property, plant and equipment, net	—			231.9		76.8		—			308.7
Goodwill	—			131.8		85.8		—			217.6
Deferred income taxes	0.3			99.8		19.6		(5.8		)	113.9
Other assets, net⁽¹⁾	2,293.5			529.6		24.0		(2,767.6		)	79.5
Total assets	$	2,299.8		$	2,498.1	$	1,016.4	$	(3,964.7	)	$	1,849.6
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Short-term debt	$	87.0		$	—	$	53.6	$	(14.7	)	$	125.9
Current maturities of long-term debt	—			0.3		0.1		—			0.4
Accounts payable	1,216.1			161.9		86.8		(1,091.2		)	373.6
Accrued expenses	13.5			183.3		60.6		(0.3		)	257.1
Income taxes payable	(4.1		)	49.6		41.0		(63.8		)	22.7
Liabilities of discontinued operations	—			—		—		—			—
Total current liabilities	1,312.5			395.1		242.1		(1,170.0		)	779.7
Long-term debt	395.0			15.7		91.5		(91.4		)	410.8
Post-retirement benefits, other than pensions	—			4.9		—		—			4.9
Pensions	—			119.0		18.5		—			137.5
Other liabilities	1.7			64.2		10.8		(7.2		)	69.5
Total liabilities	1,709.2			598.9		362.9		(1,268.6		)	1,402.4
Commitments and contingencies
Total stockholders' equity	590.6			1,899.2		653.5		(2,696.1		)	447.2
Total liabilities and stockholders' equity	$	2,299.8		$	2,498.1	$	1,016.4	$	(3,964.7	)	$	1,849.6


⁽¹⁾	Other assets, net consists primarily of Investments in subsidiaries which eliminate upon consolidation.

Lennox International Inc. and Subsidiaries

Condensed Consolidating Balance Sheets

As of December 31, 2012

(In millions)



	Parent			Guarantor Subsidiaries		Non- Guarantor Subsidiaries			Eliminations			Consolidated
ASSETS
Current Assets:
Cash and cash equivalents	$	1.0		$	13.4	$	37.4		$	—		$	51.8
Accounts and notes receivable, net	—			1,076.0		427.2			(1,129.8		)	373.4
Inventories, net	—			257.3		121.5			(4.0		)	374.8
Deferred income taxes, net	—			22.9		6.3			(1.7		)	27.5
Other assets	(0.6		)	23.8		97.5			(59.7		)	61.0
Assets of discontinued operations	—			21.2		77.4			—			98.6
Total current assets	0.4			1,414.6		767.3			(1,195.2		)	987.1
Property, plant and equipment, net	—			239.7		58.5			—			298.2
Goodwill	—			131.8		92.0			—			223.8
Deferred income taxes	—			87.8		20.8			(5.8		)	102.8
Other assets, net⁽¹⁾	2,176.3			488.5		30.3			(2,615.1		)	80.0
Total assets	$	2,176.7		$	2,362.4	$	968.9		$	(3,816.1	)	$	1,691.9
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Short-term debt	$	101.9		$	—	$	(51.0	)	$	(16.0	)	$	34.9
Current maturities of long-term debt	—			0.5		0.2			—			0.7
Accounts payable	1,178.0			133.7		92.0			(1,119.0		)	284.7
Accrued expenses	2.5			196.6		60.8			(0.3		)	259.6
Income taxes payable	(27.3		)	35.1		38.5			(41.8		)	4.5
Liabilities of discontinued operations	—			42.3		12.9			—			55.2
Total current liabilities	1,255.1			408.2		153.4			(1,177.1		)	639.6
Long-term debt	335.0			15.6		98.7			(98.3		)	351.0
Post-retirement benefits, other than pensions	—			6.1		—			—			6.1
Pensions	—			114.7		19.7			—			134.4
Other liabilities	0.5			60.1		10.6			(7.2		)	64.0
Total liabilities	1,590.6			604.7		282.4			(1,282.6		)	1,195.1
Commitments and contingencies
Total stockholders' equity	586.1			1,757.7		686.5			(2,533.5		)	496.8
Total liabilities and stockholders' equity	$	2,176.7		$	2,362.4	$	968.9		$	(3,816.1	)	$	1,691.9


⁽¹⁾	Other assets, net consists primarily of Investments in subsidiaries which eliminate upon consolidation.

Lennox International Inc. and Subsidiaries

Condensed Consolidating Statements of Operations

For the Three Months Ended June 30, 2013

(In millions)



	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net Sales	$	—		$	795.4		$	208.2		$	(90.5	)	$	913.1
Cost of goods sold	0.1			575.0			169.9			(85.9		)	659.1
Gross profit	(0.1		)	220.4			38.3			(4.6		)	254.0
Operating expenses:
Selling, general and administrative expenses	—			117.6			33.7			—			151.3
Losses and other expenses, net	2.0			(0.3		)	0.4			—			2.1
Restructuring charges	—			1.2			1.2			—			2.4
Income from equity method investments	(63.7		)	6.5			(3.4		)	56.4			(4.2		)
Operational income from continuing operations	61.6			95.4			6.4			(61.0		)	102.4
Interest expense, net	3.7			(0.6		)	0.5			—			3.6
Other expense, net	—			—			(0.2		)	—			(0.2		)
Income from continuing operations before income taxes	57.9			96.0			6.1			(61.0		)	99.0
Provision for income taxes	(2.0		)	35.3			3.1			(1.7		)	34.7
Income from continuing operations	59.9			60.7			3.0			(59.3		)	64.3
Loss from discontinued operations	—			25.4			(25.4		)	—			—
Net income	$	59.9		$	86.1		$	(22.4	)	$	(59.3	)	$	64.3
Other comprehensive loss	$	(4.2	)	$	0.3		$	38.7		$	(66.3	)	$	(31.5	)

Lennox International Inc. and Subsidiaries

Condensed Consolidating Statements of Operations

For the Six Months Ended June 30, 2013

(In millions)



	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net Sales	$	—		$	1,316.1		$	397.7		$	(132.3	)	$	1,581.5
Cost of goods sold	0.1			979.4			313.2			(127.2		)	1,165.5
Gross profit	(0.1		)	336.7			84.5			(5.1		)	416.0
Operating expenses:
Selling, general and administrative expenses	—			220.3			66.7			—			287.0
Losses and other expenses, net	2.4			0.1			0.7			—			3.2
Restructuring charges	—			1.5			1.4			—			2.9
Income from equity method investments	(71.6		)	8.9			(6.2		)	61.5			(7.4		)
Operational income from continuing operations	69.1			105.9			21.9			(66.6		)	130.3
Interest expense, net	7.0			(1.1		)	1.1			—			7.0
Other expense, net	—			—			(0.1		)	—			(0.1		)
Income from continuing operations before income taxes	62.1			107.0			20.9			(66.6		)	123.4
Provision for income taxes	(3.3		)	40.1			8.4			(1.9		)	43.3
Income from continuing operations	65.4			66.9			12.5			(64.7		)	80.1
Loss from discontinued operations	—			17.6			(25.4		)	—			(7.8		)
Net income	$	65.4		$	84.5		$	(12.9	)	$	(64.7	)	$	72.3
Other comprehensive loss	$	(7.6	)	$	1.1		$	(7.3	)	$	(67.0	)	$	(80.8	)

Lennox International Inc. and Subsidiaries

Condensed Consolidating Statements of Operations

For the Three Months Ended June 30, 2012

(In millions)



	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Net Sales	$	—		$	688.0		$	206.4		$	(54.0	)	$	840.4
Cost of goods sold	0.1			526.1			160.0			(53.9		)	632.3
Gross profit	(0.1		)	161.9			46.4			(0.1		)	208.1
Operating expenses:
Selling, general and administrative expenses	—			98.9			31.7			0.1			130.7
Losses and other expenses, net	(0.6		)	1.3			0.6			0.1			1.4
Restructuring charges	—			(0.1		)	0.2			—			0.1
Income from equity method investments	(50.3		)	(3.7		)	(3.1		)	53.2			(3.9		)
Operational income from continuing operations	50.8			65.5			17.0			(53.5		)	79.8
Interest expense, net	4.4			(0.7		)	0.6			—			4.3
Other expense, net	—			—			0.1			—			0.1
Income from continuing operations before income taxes	46.4			66.2			16.3			(53.5		)	75.4
Provision for income taxes	(1.4		)	22.4			3.9			1.0			25.9
Income from continuing operations	47.8			43.8			12.4			(54.5		)	49.5
Loss from discontinued operations	—			(2.9		)	(1.9		)	—			(4.8		)
Net income	$	47.8		$	40.9		$	10.5		$	(54.5	)	$	44.7
Other comprehensive loss	$	(4.5	)	$	(2.9	)	$	(21.1	)	$	3.5		$	(25.0	)

Lennox International Inc. and Subsidiaries

Condensed Consolidating Statements of Operations

For the Six Months Ended June 30, 2012

(In millions)



	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Net Sales	$	—		$	1,160.0		$	395.9		$	(101.1	)	$	1,454.8
Cost of goods sold	0.1			902.0			304.5			(100.8		)	1,105.8
Gross profit	(0.1		)	258.0			91.4			(0.3		)	349.0
Operating expenses:
Selling, general and administrative expenses	—			187.3			66.5			0.1			253.9
Losses and other expenses, net	(2.2		)	0.6			1.5			0.1			—
Restructuring charges	—			2.5			0.2			—			2.7
Income from equity method investments	(43.5		)	(1.6		)	(5.0		)	43.8			(6.3		)
Operational income from continuing operations	45.6			69.2			28.2			(44.3		)	98.7
Interest expense, net	8.8			(1.2		)	1.4			—			9.0
Other expense, net	—			—			0.1			—			0.1
Income from continuing operations before income taxes	36.8			70.4			26.7			(44.3		)	89.6
Provision for income taxes	(2.4		)	25.0			6.7			1.5			30.8
Income from continuing operations	39.2			45.4			20.0			(45.8		)	58.8
Loss from discontinued operations	—			(13.7		)	(6.5		)	—			(20.2		)
Net income	$	39.2		$	31.7		$	13.5		$	(45.8	)	$	38.6
Other comprehensive loss	$	2.3		$	(0.2	)	$	(9.0	)	$	4.4		$	(2.5	)

Lennox International Inc. and Subsidiaries

Condensed Consolidating Statements of Cash Flows

For the Six Months Ended June 30, 2013

(In millions)



	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations		Consolidated
Cash flows from operating activities:	$	(15.8	)	$	70.3		$	(142.8	)	$	—	$	(88.3	)
Cash flows from investing activities:
Proceeds from the disposal of property, plant and equipment	—			—			—			—		—
Purchases of property, plant and equipment	—			(17.5		)	(5.9		)	—		(23.4		)
Net proceeds from sale of businesses	1.5			—			3.3			—		4.8
Net cash used in discontinued operations	—			(0.1		)	—			—		(0.1		)
Net cash used in investing activities	1.5			(17.6		)	(2.6		)	—		(18.7		)
Cash flows from financing activities:
Short-term borrowings, net	—			—			1.6			—		1.6
Asset securitization borrowings	—			—			270.0			—		270.0
Asset securitization payments	—			—			(180.0		)	—		(180.0		)
Long-term debt payments	—			(0.3		)	(0.2		)	—		(0.5		)
Borrowings from revolving credit facility	700.5			—			—			—		700.5
Payments on revolving credit facility	(640.5		)	—			—			—		(640.5		)
Proceeds from employee stock purchases	1.0			—			—			—		1.0
Repurchases of common stock	(33.0		)	—			—			—		(33.0		)
Repurchases of common stock to satisfy employee withholding tax obligations	(5.8		)	—			—			—		(5.8		)
Excess tax benefits related to share-based payments	3.4			—			—			—		3.4
Intercompany debt	(27.0		)	9.7			17.3			—		—
Intercompany financing activity	26.1			(55.2		)	29.1			—		—
Cash dividends paid	(10.1		)	—			—			—		(10.1		)
Net cash provided by financing activities	14.6			(45.8		)	137.8			—		106.6
Decrease in cash and cash equivalents	0.3			6.9			(7.6		)	—		(0.4		)
Effect of exchange rates on cash and cash equivalents	—			—			(6.1		)	—		(6.1		)
Cash and cash equivalents, beginning of period	1.0			13.4			37.4			—		51.8
Cash and cash equivalents, end of period	$	1.3		$	20.3		$	23.7		$	—	$	45.3

Lennox International Inc. and Subsidiaries

Condensed Consolidating Statements of Cash Flows

For the Six Months Ended June 30, 2012

(In millions)



	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations		Consolidated
Cash flows from operating activities:	$	34.6		$	(51.6	)	$	6.4		$	—	$	(10.6	)
Cash flows from investing activities:
Proceeds from the disposal of property, plant and equipment	—			0.1			—			—		0.1
Purchases of property, plant and equipment	—			(13.9		)	(2.5		)	—		(16.4		)
Net proceeds from sale of businesses	—			7.2			—			—		7.2
Net cash used in discontinued operations	—			(0.4		)	—			—		(0.4		)
Net cash used in investing activities	—			(7.0		)	(2.5		)	—		(9.5		)
Cash flows from financing activities:
Short-term borrowings, net	—			—			9.9			—		9.9
Asset securitization borrowings	—			—			310.0			—		310.0
Asset securitization payments	—			—			(310.0		)	—		(310.0		)
Long-term debt payments	—			(0.4		)	(0.2		)	—		(0.6		)
Borrowings from revolving credit facility	526.0			—			—			—		526.0
Payments on revolving credit facility	(471.5		)	—			—			—		(471.5		)
Proceeds from employee stock purchases	0.2			—			—			—		0.2
Payments of deferred financing costs	—			—			—			—		—
Repurchases of common stock to satisfy employee withholding tax obligations	(2.6		)	—			—			—		(2.6		)
Excess tax benefits related to share-based payments	1.2			—			—			—		1.2
Intercompany debt	0.8			0.4			(1.2		)	—		—
Intercompany financing activity	(70.4		)	73.1			(2.7		)	—		—
Cash dividends paid	(18.3		)	—			—			—		(18.3		)
Net cash provided by financing activities	(34.6		)	73.1			5.8			—		44.3
Increase in cash and cash equivalents	—			14.5			9.7			—		24.2
Effect of exchange rates on cash and cash equivalents	—			—			(0.1		)	—		(0.1		)
Cash and cash equivalents, beginning of period	1.0			9.7			34.3			—		45.0
Cash and cash equivalents, end of period	$	1.0		$	24.2		$	43.9		$	—	$	69.1