Condensed Consolidating Financial Statements (Tables)

9 Months Ended

Sep. 30, 2016

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

Lennox International Inc. and Subsidiaries

Condensed Consolidating Balance Sheets

As of September 30, 2016



(Amounts in millions)	Parent			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated
ASSETS
Current Assets:
Cash and cash equivalents	$	4.5		$	15.9	$	27.4		$	—		$	47.8
Accounts and notes receivable, net	—			42.4		528.0			—			570.4
Inventories, net	—			361.3		119.3			(6.6		)	474.0
Other assets	4.8			50.5		80.1			(61.1		)	74.3
Total current assets	9.3			470.1		754.8			(67.7		)	1,166.5
Property, plant and equipment, net	—			269.0		77.2			—			346.2
Goodwill	—			134.9		63.6			—			198.5
Investment in subsidiaries	1,137.6			308.6		(0.6		)	(1,445.6		)	—
Deferred income taxes	5.0			129.0		28.5			(15.1		)	147.4
Other assets, net	2.1			38.6		28.8			(1.5		)	68.0
Intercompany receivables (payables), net	(450.8		)	439.0		85.1			(73.3		)	—
Total assets	$	703.2		$	1,789.2	$	1,037.4		$	(1,603.2	)	$	1,926.6
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Short-term debt	$	—		$	—	$	327.8		$	—		$	327.8
Current maturities of long-term debt	214.7			0.6		0.3			—			215.6
Accounts payable	18.5			283.0		70.2			—			371.7
Accrued expenses	6.1			208.3		57.8			—			272.2
Income taxes payable	(58.4		)	79.3		57.4			(77.5		)	0.8
Total current liabilities	180.9			571.2		513.5			(77.5		)	1,188.1
Long-term debt	497.6			14.6		0.3			—			512.5
Post-retirement benefits, other than pensions	—			2.2		—			—			2.2
Pensions	—			64.7		8.2			—			72.9
Other liabilities	0.5			120.2		10.7			(4.7		)	126.7
Total liabilities	679.0			772.9		532.7			(82.2		)	1,902.4
Commitments and contingencies
Total stockholders' equity	24.2			1,016.3		504.7			(1,521.0		)	24.2
Total liabilities and stockholders' equity	$	703.2		$	1,789.2	$	1,037.4		$	(1,603.2	)	$	1,926.6

Lennox International Inc. and Subsidiaries

Condensed Consolidating Balance Sheets

As of December 31, 2015



(Amounts in millions)	Parent			Guarantor Subsidiaries		Non- Guarantor Subsidiaries			Eliminations			Consolidated
ASSETS
Current Assets:
Cash and cash equivalents	$	0.5		$	7.8	$	30.6		$	—		$	38.9
Accounts and notes receivable, net	—			25.9		396.9			—			422.8
Inventories, net	—			324.3		98.9			(4.4		)	418.8
Other assets	3.3			46.9		67.4			(59.9		)	57.7
Total current assets	3.8			404.9		593.8			(64.3		)	938.2
Property, plant and equipment, net	—			261.8		77.8			—			339.6
Goodwill	—			134.9		60.2			—			195.1
Investment in subsidiaries	879.0			337.6		(0.6		)	(1,216.0		)	—
Deferred income taxes	5.4			126.6		28.4			(14.7		)	145.7
Other assets, net	1.5			38.2		20.6			(1.5		)	58.8
Intercompany (payables) receivables, net	(278.6		)	253.3		25.3			—			—
Total assets	$	611.1		$	1,557.3	$	805.5		$	(1,296.5	)	$	1,677.4
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Short-term debt	$	—		$	—	$	204.1		$	—		$	204.1
Current maturities of long-term debt	29.8			0.8		0.4			—			31.0
Accounts payable	16.1			237.9		66.1			—			320.1
Accrued expenses	15.8			176.7		50.1			—			242.6
Income taxes (receivable) payable	(43.0		)	106.6		37.9			(75.5		)	26.0
Total current liabilities	18.7			522.0		358.6			(75.5		)	823.8
Long-term debt	490.4			15.1		0.5			—			506.0
Post-retirement benefits, other than pensions	—			4.1		—			—			4.1
Pensions	—			111.9		8.9			—			120.8
Other liabilities	0.4			114.4		10.5			(4.2		)	121.1
Total liabilities	509.5			767.5		378.5			(79.7		)	1,575.8
Commitments and contingencies
Total stockholders' equity	101.6			789.8		427.0			(1,216.8		)	101.6
Total liabilities and stockholders' equity	$	611.1		$	1,557.3	$	805.5		$	(1,296.5	)	$	1,677.4

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 September 30, 2016



(Amounts in millions)	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net Sales	$	—		$	870.5		$	186.9		$	(47.4	)	$	1,010.0
Cost of goods sold	—			603.4			143.7			(47.4		)	699.7
Gross profit	—			267.1			43.2			—			310.3
Operating expenses:
Selling, general and administrative expenses	—			135.9			20.6			—			156.5
Losses (gains) and other expenses, net	(1.1		)	1.1			0.7			—			0.7
Restructuring charges	—			0.5			0.1			—			0.6
Income from equity method investments	(105.0		)	(10.0		)	(3.2		)	113.8			(4.4		)
Operating income	106.1			139.6			25.0			(113.8		)	156.9
Interest expense, net	6.1			(0.5		)	1.4			—			7.0
Other expense, net	—			—			—			—			—
Income from continuing operations before income taxes	100.0			140.1			23.6			(113.8		)	149.9
Provision for income taxes	(1.7		)	42.3			7.6			—			48.2
Income from continuing operations	101.7			97.8			16.0			(113.8		)	101.7
Loss from discontinued operations	—			—			—			—			—
Net income	$	101.7		$	97.8		$	16.0		$	(113.8	)	$	101.7
Other comprehensive income (loss), net of tax	2.7			(0.4		)	(2.3		)	(0.4		)	(0.4		)
Comprehensive income	$	104.4		$	97.4		$	13.7		$	(114.2	)	$	101.3

Lennox International Inc. and Subsidiaries

Condensed Consolidating Statements of Operations and Comprehensive Income

For the Nine Months Ended September 30, 2016



(Amounts in millions)	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net Sales	$	—		$	2,368.8		$	514.1		$	(138.5	)	$	2,744.4
Cost of goods sold	—			1,675.6			396.3			(136.4		)	1,935.5
Gross profit	—			693.2			117.8			(2.1		)	808.9
Operating expenses:
Selling, general and administrative expenses	—			394.6			61.6			—			456.2
Losses (gains) and other expenses, net	(1.7		)	4.3			3.0			(0.1		)	5.5
Restructuring charges	—			1.5			(0.3		)	—			1.2
Income from equity method investments	(248.5		)	(19.5		)	(12.4		)	265.1			(15.3		)
Operating income	250.2			312.3			65.9			(267.1		)	361.3
Interest expense, net	17.7			(1.5		)	3.4			—			19.6
Other expense, net	—			—			(0.2		)	—			(0.2		)
Income from continuing operations before income taxes	232.5			313.8			62.7			(267.1		)	341.9
Provision for income taxes	(4.9		)	89.1			20.5			(0.7		)	104.0
Income from continuing operations	237.4			224.7			42.2			(266.4		)	237.9
Loss from discontinued operations	—			—			0.6			—			0.6
Net income	$	237.4		$	224.7		$	41.6		$	(266.4	)	$	237.3
Other comprehensive income (loss), net of tax	7.7			2.0			6.7			1.3			17.7
Comprehensive income	$	245.1		$	226.7		$	48.3		$	(265.1	)	$	255.0

Lennox International Inc. and Subsidiaries

Condensed Consolidating Statements of Operations and Comprehensive Income

For the Three Months Ended September 30, 2015



(Amounts in millions)	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Net Sales	$	—		$	827.9		$	185.2		$	(58.1	)	$	955.0
Cost of goods sold	—			589.9			150.2			(58.5		)	681.6
Gross profit	—			238.0			35.0			0.4			273.4
Operating expenses:
Selling, general and administrative expenses	—			124.0			19.8			—			143.8
Losses and other expenses, net	0.6			2.7			2.7			—			6.0
Restructuring gains	—			(0.2		)	(0.2		)	—			(0.4		)
Income from equity method investments	(84.2		)	(2.7		)	(2.1		)	86.0			(3.0		)
Operating income	83.6			114.2			14.8			(85.6		)	127.0
Interest expense, net	5.4			(0.4		)	0.7			—			5.7
Other expense, net	—			—			(0.7		)	—			(0.7		)
Income from continuing operations before income taxes	78.2			114.6			14.8			(85.6		)	122.0
Provision for income taxes	(2.1		)	39.0			4.6			0.2			41.7
Income from continuing operations	80.3			75.6			10.2			(85.8		)	80.3
Loss from discontinued operations	—			—			—			—			—
Net income	$	80.3		$	75.6		$	10.2		$	(85.8	)	$	80.3
Other comprehensive loss, net of tax	(4.3		)	(8.6		)	(16.2		)	(1.8		)	(30.9		)
Comprehensive income (loss)	$	76.0		$	67.0		$	(6.0	)	$	(87.6	)	$	49.4

Lennox International Inc. and Subsidiaries

Condensed Consolidating Statements of Operations and Comprehensive Income

For the Nine Months Ended September 30, 2015



(Amounts in millions)	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Net Sales	$	—		$	2,268.6		$	520.7		$	(156.0	)	$	2,633.3
Cost of goods sold	—			1,650.7			418.2			(155.4		)	1,913.5
Gross profit	—			617.9			102.5			(0.6		)	719.8
Operating expenses:
Selling, general and administrative expenses	—			362.0			68.0			—			430.0
Losses and other expenses, net	1.1			7.7			6.2			(0.1		)	14.9
Restructuring charges	—			(0.5		)	2.3			—			1.8
Income from equity method investments	(187.2		)	(0.3		)	(9.3		)	185.0			(11.8		)
Operating income	186.1			249.0			35.3			(185.5		)	284.9
Interest expense, net	17.1			(1.5		)	2.3			—			17.9
Other expense, net	—			—			(0.7		)	—			(0.7		)
Income from continuing operations before income taxes	169.0			250.5			33.7			(185.5		)	267.7
Provision for income taxes	(6.3		)	87.2			11.2			(0.2		)	91.9
Income from continuing operations	175.3			163.3			22.5			(185.3		)	175.8
Loss from discontinued operations	—			—			(0.5		)	—			(0.5		)
Net income	$	175.3		$	163.3		$	22.0		$	(185.3	)	$	175.3
Other comprehensive income (loss), net of tax	(2.9		)	(13.8		)	(36.4		)	(3.2		)	(56.3		)
Comprehensive income	$	172.4		$	149.5		$	(14.4	)	$	(188.5	)	$	119.0

Condensed Consolidating Statements of Cash Flows

Lennox International Inc. and Subsidiaries

Condensed Consolidating Statements of Cash Flows

For the Nine Months Ended September 30, 2016



(Amounts in millions)	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations		Consolidated
Cash flows from operating activities	$	(4.5	)	$	262.2		$	(150.8	)	$	—	$	106.9
Cash flows from investing activities:
Purchases of property, plant and equipment	—			(52.4		)	(7.0		)	—		(59.4		)
Net cash used in investing activities	—			(52.4		)	(7.0		)	—		(59.4		)
Cash flows from financing activities:
Short-term borrowings, net	—			—			(2.1		)	—		(2.1		)
Asset securitization borrowings	—			—			145.0			—		145.0
Asset securitization payments	—			—			(20.0		)	—		(20.0		)
Long-term debt payments	(30.0		)	(0.6		)	(0.3		)	—		(30.9		)
Borrowings from credit facility	1,715.0			—			—			—		1,715.0
Payments on credit facility	(1,493.0		)	—			—			—		(1,493.0		)
Proceeds from employee stock purchases	1.9			—			—			—		1.9
Payments of deferred financing costs	(0.9		)	—			—			—		(0.9		)
Repurchases of common stock	(300.0		)	—			—			—		(300.0		)
Repurchases of common stock to satisfy employee withholding tax obligations	(26.3		)	—			—			—		(26.3		)
Excess tax benefits related to share-based payments	20.0			—			—			—		20.0
Intercompany debt	(6.6		)	(5.1		)	11.7			—		—
Intercompany financing activity	178.9			(196.0		)	17.1			—		—
Cash dividends paid	(50.5		)	—			—			—		(50.5		)
Net cash provided by financing activities	8.5			(201.7		)	151.4			—		(41.8		)
Increase in cash and cash equivalents	4.0			8.1			(6.4		)	—		5.7
Effect of exchange rates on cash and cash equivalents	—			—			3.2			—		3.2
Cash and cash equivalents, beginning of period	0.5			7.8			30.6			—		38.9
Cash and cash equivalents, end of period	$	4.5		$	15.9		$	27.4		$	—	$	47.8

Lennox International Inc. and Subsidiaries

Condensed Consolidating Statements of Cash Flows

For the Nine Months Ended September 30, 2015



(Amounts in millions)	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations		Consolidated
Cash flows from operating activities	$	(27.3	)	$	138.2		$	(4.0	)	$	—	$	106.9
Cash flows from investing activities:
Purchases of property, plant and equipment	—			(40.3		)	(6.7		)	—		(47.0		)
Net cash used in investing activities	—			(40.3		)	(6.7		)	—		(47.0		)
Cash flows from financing activities:
Short-term borrowings, net	—			—			0.8			—		0.8
Asset securitization borrowings	—			—			40.0			—		40.0
Asset securitization payments	—			—			(40.0		)	—		(40.0		)
Long-term debt payments	(22.5		)	(0.8		)	(0.2		)	—		(23.5		)
Borrowings from revolving credit facility	1,401.0			—			—			—		1,401.0
Payments on revolving credit facility	(1,385.0		)	—			—			—		(1,385.0		)
Proceeds from employee stock purchases	1.8			—			—			—		1.8
Repurchases of common stock to satisfy employee withholding tax obligations	(23.5		)	—			—			—		(23.5		)
Payments of deferred financing costs	—			—			—			—		—
Excess tax benefits related to share-based payments	18.6			—			—			—		18.6
Intercompany financing activity	(37.7		)	10.2			27.5			—		—
Intercompany investments	118.0			(106.3		)	(11.7		)	—		—
Cash dividends paid	(43.1		)	—			—			—		(43.1		)
Net cash provided by financing activities	27.6			(96.9		)	16.4			—		(52.9		)
Increase in cash and cash equivalents	0.3			1.0			5.7			—		7.0
Effect of exchange rates on cash and cash equivalents	—			—			(9.4		)	—		(9.4		)
Cash and cash equivalents, beginning of period	1.0			11.5			25.0			—		37.5
Cash and cash equivalents, end of period	$	1.3		$	12.5		$	21.3		$	—	$	35.1