|
Large Accelerated Filer
|
[X]
|
|
Accelerated Filer
|
[ ]
|
Non-Accelerated Filer
|
[ ]
|
|
Smaller Reporting Company
|
[ ]
|
|
|
|
Page
|
Part I
|
|
|
|
|
|
|
Consolidated Balance Sheets - September 30, 2016 (Unaudited) and December 31, 2015
|
|
|
Consolidated Statements of Operations (Unaudited) - Three and Nine Months Ended September 30, 2016 and 2015
|
|
|
Consolidated Statements of Comprehensive Income (Unaudited) - Three and Nine Months Ended September 30, 2016 and 2015
|
|
|
Consolidated Statements of Cash Flows (Unaudited) - Nine Months Ended September 30, 2016 and 2015
|
|
|
||
|
||
|
||
|
||
Part II
|
|
|
|
||
|
||
|
||
|
LENNOX INTERNATIONAL INC. AND SUBSIDIARIES
Consolidated Balance Sheets
|
|||||||
(Amounts in millions, except shares and par values)
|
As of September 30, 2016
|
|
As of December 31, 2015
|
||||
|
(unaudited)
|
|
|
||||
ASSETS
|
|
|
|
||||
Current Assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
47.8
|
|
|
$
|
38.9
|
|
Accounts and notes receivable, net of allowances of $7.7 and $6.3 in 2016 and 2015, respectively
|
570.4
|
|
|
422.8
|
|
||
Inventories, net
|
474.0
|
|
|
418.8
|
|
||
Other assets
|
74.3
|
|
|
57.7
|
|
||
Total current assets
|
1,166.5
|
|
|
938.2
|
|
||
Property, plant and equipment, net of accumulated depreciation of $718 and $682.9 in 2016 and 2015, respectively
|
346.2
|
|
|
339.6
|
|
||
Goodwill
|
198.5
|
|
|
195.1
|
|
||
Deferred income taxes
|
147.4
|
|
|
145.7
|
|
||
Other assets, net
|
68.0
|
|
|
58.8
|
|
||
Total assets
|
$
|
1,926.6
|
|
|
$
|
1,677.4
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current Liabilities:
|
|
|
|
||||
Short-term debt
|
$
|
327.8
|
|
|
$
|
204.1
|
|
Current maturities of long-term debt
|
215.6
|
|
|
31.0
|
|
||
Accounts payable
|
371.7
|
|
|
320.1
|
|
||
Accrued expenses
|
272.2
|
|
|
242.6
|
|
||
Income taxes payable
|
0.8
|
|
|
26.0
|
|
||
Total current liabilities
|
1,188.1
|
|
|
823.8
|
|
||
Long-term debt
|
512.5
|
|
|
506.0
|
|
||
Post-retirement benefits, other than pensions
|
2.2
|
|
|
4.1
|
|
||
Pensions
|
72.9
|
|
|
120.8
|
|
||
Other liabilities
|
126.7
|
|
|
121.1
|
|
||
Total liabilities
|
1,902.4
|
|
|
1,575.8
|
|
||
Commitments and contingencies
|
|
|
|
|
|
||
Stockholders' equity:
|
|
|
|
||||
Preferred stock, $.01 par value, 25,000,000 shares authorized, no shares issued or outstanding
|
—
|
|
|
—
|
|
||
Common stock, $.01 par value, 200,000,000 shares authorized, 87,170,197 shares issued
|
0.9
|
|
|
0.9
|
|
||
Additional paid-in capital
|
1,017.5
|
|
|
1,002.4
|
|
||
Retained earnings
|
1,331.1
|
|
|
1,146.7
|
|
||
Accumulated other comprehensive loss
|
(187.0
|
)
|
|
(204.7
|
)
|
||
Treasury stock, at cost, 44,126,432 shares and 42,491,910 shares as of September 30, 2016 and December 31, 2015, respectively
|
(2,138.7
|
)
|
|
(1,844.1
|
)
|
||
Noncontrolling interests
|
0.4
|
|
|
0.4
|
|
||
Total stockholders’ equity
|
24.2
|
|
|
101.6
|
|
||
Total liabilities and stockholders' equity
|
$
|
1,926.6
|
|
|
$
|
1,677.4
|
|
LENNOX INTERNATIONAL INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(Unaudited)
|
|||||||||||||||
(Amounts in millions, except per share data)
|
For the Three Months Ended September 30,
|
|
For the Nine Months Ended September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Net sales
|
$
|
1,010.0
|
|
|
$
|
955.0
|
|
|
$
|
2,744.4
|
|
|
$
|
2,633.3
|
|
Cost of goods sold
|
699.7
|
|
|
681.6
|
|
|
1,935.5
|
|
|
1,913.5
|
|
||||
Gross profit
|
310.3
|
|
|
273.4
|
|
|
808.9
|
|
|
719.8
|
|
||||
Operating Expenses:
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative expenses
|
156.5
|
|
|
143.8
|
|
|
456.2
|
|
|
430.0
|
|
||||
Losses and other expenses, net
|
0.7
|
|
|
6.0
|
|
|
5.5
|
|
|
14.9
|
|
||||
Restructuring charges (gains)
|
0.6
|
|
|
(0.4
|
)
|
|
1.2
|
|
|
1.8
|
|
||||
Income from equity method investments
|
(4.4
|
)
|
|
(3.0
|
)
|
|
(15.3
|
)
|
|
(11.8
|
)
|
||||
Operating income
|
156.9
|
|
|
127.0
|
|
|
361.3
|
|
|
284.9
|
|
||||
Interest expense, net
|
7.0
|
|
|
5.7
|
|
|
19.6
|
|
|
17.9
|
|
||||
Other income, net
|
—
|
|
|
(0.7
|
)
|
|
(0.2
|
)
|
|
(0.7
|
)
|
||||
Income from continuing operations before income taxes
|
149.9
|
|
|
122.0
|
|
|
341.9
|
|
|
267.7
|
|
||||
Provision for income taxes
|
48.2
|
|
|
41.7
|
|
|
104.0
|
|
|
91.9
|
|
||||
Income from continuing operations
|
101.7
|
|
|
80.3
|
|
|
237.9
|
|
|
175.8
|
|
||||
Discontinued Operations:
|
|
|
|
|
|
|
|
||||||||
Loss from discontinued operations before income taxes
|
—
|
|
|
—
|
|
|
(0.9
|
)
|
|
(0.9
|
)
|
||||
Benefit from income taxes
|
—
|
|
|
—
|
|
|
(0.3
|
)
|
|
(0.4
|
)
|
||||
Loss from discontinued operations
|
—
|
|
|
—
|
|
|
(0.6
|
)
|
|
(0.5
|
)
|
||||
Net income
|
$
|
101.7
|
|
|
$
|
80.3
|
|
|
$
|
237.3
|
|
|
$
|
175.3
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings per share – Basic:
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations
|
$
|
2.35
|
|
|
$
|
1.78
|
|
|
$
|
5.46
|
|
|
$
|
3.92
|
|
Loss from discontinued operations
|
—
|
|
|
—
|
|
|
(0.01
|
)
|
|
(0.01
|
)
|
||||
Net income
|
$
|
2.35
|
|
|
$
|
1.78
|
|
|
$
|
5.45
|
|
|
$
|
3.91
|
|
Earnings per share – Diluted:
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations
|
$
|
2.33
|
|
|
$
|
1.76
|
|
|
$
|
5.39
|
|
|
$
|
3.86
|
|
Loss from discontinued operations
|
—
|
|
|
—
|
|
|
(0.01
|
)
|
|
(0.01
|
)
|
||||
Net income
|
$
|
2.33
|
|
|
$
|
1.76
|
|
|
$
|
5.38
|
|
|
$
|
3.85
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted Average Number of Shares Outstanding - Basic
|
43.2
|
|
|
45.0
|
|
|
43.6
|
|
|
44.9
|
|
||||
Weighted Average Number of Shares Outstanding - Diluted
|
43.7
|
|
|
45.6
|
|
|
44.2
|
|
|
45.6
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Cash dividends declared per share
|
$
|
0.43
|
|
|
$
|
0.36
|
|
|
$
|
1.22
|
|
|
$
|
1.02
|
|
LENNOX INTERNATIONAL INC. AND SUBSIDIARIES
Consolidated Statements of Comprehensive Income
(Unaudited)
|
|||||||||||||||
(Amounts in millions)
|
For the Three Months Ended September 30,
|
|
For the Nine Months Ended September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Net income
|
$
|
101.7
|
|
|
$
|
80.3
|
|
|
$
|
237.3
|
|
|
$
|
175.3
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustments
|
(3.1
|
)
|
|
(28.6
|
)
|
|
11.3
|
|
|
(56.1
|
)
|
||||
Net change in pension and post-retirement liabilities
|
(0.4
|
)
|
|
(1.0
|
)
|
|
(4.5
|
)
|
|
(4.4
|
)
|
||||
Reclassification of pension and post-retirement benefit losses into earnings
|
1.6
|
|
|
2.0
|
|
|
4.8
|
|
|
6.2
|
|
||||
Change in fair value of available-for-sale marketable equity securities
|
(1.2
|
)
|
|
1.4
|
|
|
(1.8
|
)
|
|
1.8
|
|
||||
Net change in fair value of cash flow hedges
|
2.0
|
|
|
(10.2
|
)
|
|
1.4
|
|
|
(14.6
|
)
|
||||
Reclassification of cash flow hedge losses into earnings
|
2.4
|
|
|
3.2
|
|
|
10.6
|
|
|
9.4
|
|
||||
Other comprehensive income (loss) before income taxes
|
1.3
|
|
|
(33.2
|
)
|
|
21.8
|
|
|
(57.7
|
)
|
||||
Income tax expense
|
(1.7
|
)
|
|
2.3
|
|
|
(4.1
|
)
|
|
1.4
|
|
||||
Other comprehensive income (loss), net of tax
|
(0.4
|
)
|
|
(30.9
|
)
|
|
17.7
|
|
|
(56.3
|
)
|
||||
Comprehensive income
|
$
|
101.3
|
|
|
$
|
49.4
|
|
|
$
|
255.0
|
|
|
$
|
119.0
|
|
LENNOX INTERNATIONAL INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Unaudited)
|
|||||||
(Amounts in millions)
|
For the Nine Months Ended September 30,
|
||||||
|
2016
|
|
2015
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
237.3
|
|
|
$
|
175.3
|
|
Adjustments to reconcile net income to net cash used in operating activities:
|
|
|
|
||||
Income from equity method investments
|
(15.3
|
)
|
|
(11.8
|
)
|
||
Dividends from affiliates
|
3.9
|
|
|
7.4
|
|
||
Restructuring (gains) expenses, net of cash paid
|
(0.8
|
)
|
|
(0.2
|
)
|
||
Provision for bad debts
|
3.4
|
|
|
2.1
|
|
||
Unrealized (gains) losses on derivative contracts
|
(2.2
|
)
|
|
1.3
|
|
||
Stock-based compensation expense
|
24.8
|
|
|
18.5
|
|
||
Depreciation and amortization
|
43.4
|
|
|
46.6
|
|
||
Deferred income taxes
|
(2.6
|
)
|
|
(0.2
|
)
|
||
Pension expense
|
4.8
|
|
|
8.1
|
|
||
Pension contributions
|
(52.6
|
)
|
|
(3.8
|
)
|
||
Other items, net
|
0.4
|
|
|
0.3
|
|
||
Changes in assets and liabilities, net of effects of divestitures:
|
|
|
|
||||
Accounts and notes receivable
|
(146.2
|
)
|
|
(135.9
|
)
|
||
Inventories
|
(49.9
|
)
|
|
(41.0
|
)
|
||
Other current assets
|
(6.6
|
)
|
|
(2.8
|
)
|
||
Accounts payable
|
56.4
|
|
|
23.4
|
|
||
Accrued expenses
|
40.7
|
|
|
15.1
|
|
||
Income taxes payable and receivable
|
(35.0
|
)
|
|
(0.9
|
)
|
||
Other
|
3.0
|
|
|
5.4
|
|
||
Net cash provided by operating activities
|
106.9
|
|
|
106.9
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Purchases of property, plant and equipment
|
(59.4
|
)
|
|
(47.0
|
)
|
||
Net cash used in investing activities
|
(59.4
|
)
|
|
(47.0
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Short-term borrowings, net
|
(2.1
|
)
|
|
0.8
|
|
||
Asset securitization borrowings
|
145.0
|
|
|
40.0
|
|
||
Asset securitization payments
|
(20.0
|
)
|
|
(40.0
|
)
|
||
Long-term debt payments
|
(30.9
|
)
|
|
(23.5
|
)
|
||
Borrowings from credit facility
|
1,715.0
|
|
|
1,401.0
|
|
||
Payments on credit facility
|
(1,493.0
|
)
|
|
(1,385.0
|
)
|
||
Payments of deferred financing costs
|
(0.9
|
)
|
|
—
|
|
||
Proceeds from employee stock purchases
|
1.9
|
|
|
1.8
|
|
||
Repurchases of common stock
|
(300.0
|
)
|
|
—
|
|
||
Repurchases of common stock to satisfy employee withholding tax obligations
|
(26.3
|
)
|
|
(23.5
|
)
|
||
Excess tax benefits related to share-based payments
|
20.0
|
|
|
18.6
|
|
||
Cash dividends paid
|
(50.5
|
)
|
|
(43.1
|
)
|
||
Net cash used in financing activities
|
(41.8
|
)
|
|
(52.9
|
)
|
||
Increase in cash and cash equivalents
|
5.7
|
|
|
7.0
|
|
||
Effect of exchange rates on cash and cash equivalents
|
3.2
|
|
|
(9.4
|
)
|
||
Cash and cash equivalents, beginning of period
|
38.9
|
|
|
37.5
|
|
||
Cash and cash equivalents, end of period
|
$
|
47.8
|
|
|
$
|
35.1
|
|
|
|
|
|
||||
Supplemental disclosures of cash flow information:
|
|
|
|
||||
Interest paid
|
$
|
17.0
|
|
|
$
|
15.9
|
|
Income taxes paid (net of refunds)
|
$
|
120.9
|
|
|
$
|
73.4
|
|
|
As of September 30, 2016
|
|
As of December 31, 2015
|
||||
Finished goods
|
$
|
335.5
|
|
|
$
|
300.0
|
|
Work in process
|
6.8
|
|
|
4.2
|
|
||
Raw materials and parts
|
193.8
|
|
|
178.3
|
|
||
Subtotal
|
536.1
|
|
|
482.5
|
|
||
Excess of current cost over last-in, first-out cost
|
(62.1
|
)
|
|
(63.7
|
)
|
||
Total inventories, net
|
$
|
474.0
|
|
|
$
|
418.8
|
|
|
Balance at December 31, 2015
|
|
Acquisitions / (Dispositions)
|
|
Other
(1)
|
|
Balance at September 30, 2016
|
||||||||
Residential Heating & Cooling
|
$
|
26.1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
26.1
|
|
Commercial Heating & Cooling
|
60.6
|
|
|
—
|
|
|
0.5
|
|
|
61.1
|
|
||||
Refrigeration
|
108.4
|
|
|
—
|
|
|
2.9
|
|
|
111.3
|
|
||||
Total Goodwill
|
$
|
195.1
|
|
|
$
|
—
|
|
|
$
|
3.4
|
|
|
$
|
198.5
|
|
|
As of September 30, 2016
|
|
As of December 31, 2015
|
||||
Unrealized losses on unsettled futures contracts
|
$
|
1.2
|
|
|
$
|
13.2
|
|
Income tax benefit
|
(0.4
|
)
|
|
(4.8
|
)
|
||
Losses included in AOCL, net of tax
(1)
|
$
|
0.8
|
|
|
$
|
8.4
|
|
|
As of September 30, 2016
|
|
As of December 31, 2015
|
||
Copper
|
31.6
|
|
|
34.7
|
|
|
As of September 30, 2016
|
|
As of December 31, 2015
|
||
Notional Amounts (in local currency):
|
|
|
|
||
Mexican Peso
|
230.6
|
|
|
201.4
|
|
Canadian Dollar
|
16.4
|
|
|
—
|
|
|
As of September 30, 2016
|
|
As of December 31, 2015
|
||
Copper
|
2.6
|
|
|
3.3
|
|
Aluminum
|
3.1
|
|
|
3.2
|
|
|
As of September 30, 2016
|
|
As of December 31, 2015
|
||
Notional Amounts (in local currency):
|
|
|
|
||
Mexican Peso
|
34.7
|
|
|
53.0
|
|
Indian Rupee
|
218.5
|
|
|
30.8
|
|
Euro
|
51.1
|
|
|
3.2
|
|
Chinese Yuan
|
14.0
|
|
|
—
|
|
Polish Zloty
|
—
|
|
|
25.4
|
|
Great Britain Pound
|
1.9
|
|
|
—
|
|
New Zealand Dollar
|
3.0
|
|
|
—
|
|
Australian Dollar
|
28.0
|
|
|
—
|
|
|
Fair Values of Derivative Instruments
(1)
|
||||||||||||||
|
Derivatives Designated as Hedging Instruments
|
|
Derivatives Not Designated as Hedging Instruments
|
||||||||||||
|
As of September 30, 2016
|
|
As of December 31, 2015
|
|
As of September 30, 2016
|
|
As of December 31, 2015
|
||||||||
Current Assets:
|
|
|
|
|
|
|
|
||||||||
Other Assets
|
|
|
|
|
|
|
|
||||||||
Commodity futures contracts
|
$
|
1.1
|
|
|
$
|
—
|
|
|
$
|
0.1
|
|
|
$
|
—
|
|
Foreign currency forward contracts
|
—
|
|
|
—
|
|
|
0.4
|
|
|
0.2
|
|
||||
Non-Current Assets:
|
|
|
|
|
|
|
|
||||||||
Other Assets, net
|
|
|
|
|
|
|
|
||||||||
Commodity futures contracts
|
0.6
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
||||
Total Assets
|
$
|
1.7
|
|
|
$
|
—
|
|
|
$
|
0.6
|
|
|
$
|
0.2
|
|
Current Liabilities:
|
|
|
|
|
|
|
|
||||||||
Accrued Expenses
|
|
|
|
|
|
|
|
||||||||
Commodity futures contracts
|
$
|
2.0
|
|
|
$
|
12.5
|
|
|
$
|
0.2
|
|
|
$
|
1.5
|
|
Foreign currency forward contracts
|
0.4
|
|
|
0.4
|
|
|
0.1
|
|
|
—
|
|
||||
Non-Current Liabilities:
|
|
|
|
|
|
|
|
||||||||
Other Liabilities
|
|
|
|
|
|
|
|
||||||||
Commodity futures contracts
|
0.1
|
|
|
0.4
|
|
|
—
|
|
|
—
|
|
||||
Foreign currency forward contracts
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total Liabilities
|
$
|
2.5
|
|
|
$
|
13.3
|
|
|
$
|
0.3
|
|
|
$
|
1.5
|
|
Derivatives Designated as Cash Flow Hedges
|
|
For the Three Months Ended September 30,
|
|
For the Nine Months Ended September 30,
|
||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Amount of Loss reclassified from AOCL into Income (effective portion)
(1)
|
|
$
|
2.4
|
|
|
$
|
3.2
|
|
|
$
|
10.6
|
|
|
$
|
9.4
|
|
Amount of Loss recognized in Net income (ineffective portion)
(2)
|
|
$
|
(0.5
|
)
|
|
$
|
—
|
|
|
$
|
(0.4
|
)
|
|
$
|
—
|
|
Derivatives Not Designated as Hedging Instruments
|
|
For the Three Months Ended September 30,
|
|
For the Nine Months Ended September 30,
|
||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Amount of Loss (Gain) Recognized in Net Income:
|
|
|
|
|
|
|
|
|
||||||||
Commodity futures contracts
(2)
|
|
$
|
(0.3
|
)
|
|
$
|
1.4
|
|
|
$
|
(0.2
|
)
|
|
$
|
2.2
|
|
Foreign currency forward contracts
(2)
|
|
0.4
|
|
|
—
|
|
|
0.3
|
|
|
0.2
|
|
||||
|
|
$
|
0.1
|
|
|
$
|
1.4
|
|
|
$
|
0.1
|
|
|
$
|
2.4
|
|
|
As of September 30, 2016
|
|
As of December 31, 2015
|
||||
Accrued expenses
|
$
|
30.3
|
|
|
$
|
26.7
|
|
Other liabilities
|
69.9
|
|
|
65.6
|
|
||
Total warranty liability
|
$
|
100.2
|
|
|
$
|
92.3
|
|
Total warranty liability as of December 31, 2015
|
$
|
92.3
|
|
Warranty claims paid
|
(20.4
|
)
|
|
Changes resulting from issuance of new warranties
|
31.6
|
|
|
Changes in estimates associated with pre-existing liabilities
|
(3.9
|
)
|
|
Changes in foreign currency translation rates and other
|
0.6
|
|
|
Total warranty liability as of September 30, 2016
|
$
|
100.2
|
|
|
As of September 30, 2016
|
|
As of December 31, 2015
|
||||
Short-Term Debt:
|
|
|
|
||||
Asset Securitization Program
|
$
|
325.0
|
|
|
$
|
200.0
|
|
Foreign obligations
|
2.8
|
|
|
4.1
|
|
||
Total short-term debt
|
$
|
327.8
|
|
|
$
|
204.1
|
|
Current maturities of long-term debt:
|
|
|
|
||||
Capital lease obligations
|
$
|
0.9
|
|
|
$
|
1.2
|
|
Domestic credit facility
|
15.0
|
|
|
30.0
|
|
||
Senior unsecured notes
|
200.0
|
|
|
—
|
|
||
Debt issuance costs
|
(0.3
|
)
|
|
(0.2
|
)
|
||
Total current maturities of long-term debt
|
$
|
215.6
|
|
|
$
|
31.0
|
|
Long-Term Debt:
|
|
|
|
||||
Capital lease obligations
|
$
|
15.1
|
|
|
$
|
15.6
|
|
Domestic credit facility
|
500.0
|
|
|
293.0
|
|
||
Senior unsecured notes
|
—
|
|
|
200.0
|
|
||
Debt issuance costs
|
(2.6
|
)
|
|
(2.6
|
)
|
||
Total long-term debt
|
$
|
512.5
|
|
|
$
|
506.0
|
|
Total debt
|
$
|
1,055.9
|
|
|
$
|
741.1
|
|
|
As of September 30, 2016
|
|
As of December 31, 2015
|
||||
Eligible amount available under the ASP on qualified accounts receivable
|
$
|
325.0
|
|
|
$
|
220.0
|
|
Beneficial interest sold
|
325.0
|
|
|
200.0
|
|
||
Remaining amount available
|
$
|
—
|
|
|
$
|
20.0
|
|
|
As of September 30, 2016
|
|
As of December 31, 2015
|
||
Weighted average borrowing rate
|
1.70
|
%
|
|
1.90
|
%
|
Consolidated Indebtedness to Adjusted EBITDA Ratio no greater than
|
3.5 : 1.0
|
Cash Flow to Net Interest Expense Ratio no less than
|
3.0 : 1.0
|
•
|
We fail to pay any principal or interest when due on any other indebtedness or receivables securitization of at least
$75.0 million
; or
|
•
|
We are in default in the performance of, or compliance with any term of any other indebtedness or receivables securitization in an aggregate principal amount of at least
$75.0 million
or any other condition exists which would give the holders the right to declare such indebtedness due and payable prior to its stated maturity.
|
|
For the Three Months Ended September 30,
|
||||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
Pension Benefits
|
|
Other Benefits
|
||||||||||||
Service cost
|
$
|
1.1
|
|
|
$
|
1.2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest cost
|
3.8
|
|
|
4.3
|
|
|
—
|
|
|
0.1
|
|
||||
Expected return on plan assets
|
(5.4
|
)
|
|
(5.3
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of prior service cost
|
0.1
|
|
|
—
|
|
|
(0.8
|
)
|
|
(0.8
|
)
|
||||
Recognized actuarial loss
|
1.9
|
|
|
2.4
|
|
|
0.4
|
|
|
0.4
|
|
||||
Settlements and curtailments
|
0.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net periodic benefit cost
(1)
|
$
|
1.7
|
|
|
$
|
2.6
|
|
|
$
|
(0.4
|
)
|
|
$
|
(0.3
|
)
|
|
For the Nine Months Ended September 30,
|
||||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
Pension Benefits
|
|
Other Benefits
|
||||||||||||
Service cost
|
$
|
3.3
|
|
|
$
|
3.6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest cost
|
11.5
|
|
|
12.9
|
|
|
0.1
|
|
|
0.2
|
|
||||
Expected return on plan assets
|
(16.2
|
)
|
|
(16.0
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of prior service cost
|
0.2
|
|
|
—
|
|
|
(2.3
|
)
|
|
(2.4
|
)
|
||||
Recognized actuarial loss
|
5.7
|
|
|
7.2
|
|
|
1.1
|
|
|
1.2
|
|
||||
Settlements and curtailments
|
0.2
|
|
|
0.4
|
|
|
—
|
|
|
—
|
|
||||
Net periodic benefit cost
(1)
|
$
|
4.7
|
|
|
$
|
8.1
|
|
|
$
|
(1.1
|
)
|
|
$
|
(1.0
|
)
|
|
For the Three Months Ended September 30,
|
|
For the Nine Months Ended September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Stock-based compensation expense
(1)
|
$
|
9.9
|
|
|
$
|
7.7
|
|
|
$
|
24.8
|
|
|
$
|
18.5
|
|
|
|
For the Three Months Ended September 30,
|
|
For the Nine Months Ended September 30,
|
|
Affected Line Item(s) in the Consolidated Statements of Operations
|
||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|||||||||
(Losses)/Gains on cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Commodity futures contracts
|
|
$
|
(2.4
|
)
|
|
$
|
(3.2
|
)
|
|
$
|
(10.6
|
)
|
|
$
|
(9.4
|
)
|
|
Cost of goods sold
|
Income tax benefit
|
|
0.8
|
|
|
1.2
|
|
|
3.7
|
|
|
3.2
|
|
|
Provision for income taxes
|
||||
Net of tax
|
|
$
|
(1.6
|
)
|
|
$
|
(2.0
|
)
|
|
$
|
(6.9
|
)
|
|
$
|
(6.2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Defined Benefit Plan items:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Pension and post-retirement benefit costs
|
|
$
|
(1.6
|
)
|
|
$
|
(2.0
|
)
|
|
$
|
(4.8
|
)
|
|
$
|
(6.1
|
)
|
|
Cost of goods sold; Selling, general and administrative expenses
|
Income tax benefit
|
|
0.6
|
|
|
0.7
|
|
|
1.7
|
|
|
2.2
|
|
|
Provision for income taxes
|
||||
Net of tax
|
|
$
|
(1.0
|
)
|
|
$
|
(1.3
|
)
|
|
$
|
(3.1
|
)
|
|
$
|
(3.9
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total reclassifications from AOCL
|
|
$
|
(2.6
|
)
|
|
$
|
(3.3
|
)
|
|
$
|
(10.0
|
)
|
|
$
|
(10.1
|
)
|
|
|
|
|
(Losses) Gains on Cash Flow Hedges
|
|
Unrealized Gains (Losses) on Available-for-Sale Securities
|
|
Defined Benefit Pension Plan Items
|
|
Foreign Currency Translation Adjustments
|
|
Total AOCL
|
||||||||||
Balance as of December 31, 2015
|
|
$
|
(8.4
|
)
|
|
$
|
4.4
|
|
|
$
|
(139.3
|
)
|
|
$
|
(61.4
|
)
|
|
$
|
(204.7
|
)
|
Other comprehensive (loss) income before reclassifications
|
|
0.8
|
|
|
(1.8
|
)
|
|
(2.6
|
)
|
|
11.3
|
|
|
7.7
|
|
|||||
Amounts reclassified from AOCL
|
|
6.9
|
|
|
—
|
|
|
3.1
|
|
|
—
|
|
|
10.0
|
|
|||||
Net other comprehensive (loss) income
|
|
7.7
|
|
|
(1.8
|
)
|
|
0.5
|
|
|
11.3
|
|
|
17.7
|
|
|||||
Balance as of September 30, 2016
|
|
$
|
(0.7
|
)
|
|
$
|
2.6
|
|
|
$
|
(138.8
|
)
|
|
$
|
(50.1
|
)
|
|
$
|
(187.0
|
)
|
|
Charges Incurred in 2016
|
|
Charges Incurred to Date
|
|
Total Charges Expected to be Incurred
|
||||||
Severance and related (gains) expense
|
$
|
(0.3
|
)
|
|
$
|
9.2
|
|
|
$
|
9.2
|
|
Asset write-offs and accelerated depreciation
|
0.2
|
|
|
2.3
|
|
|
2.3
|
|
|||
Equipment moves
|
—
|
|
|
—
|
|
|
—
|
|
|||
Lease termination
|
—
|
|
|
0.2
|
|
|
0.2
|
|
|||
Other
|
1.3
|
|
|
3.3
|
|
|
4.1
|
|
|||
Total restructuring charges
|
$
|
1.2
|
|
|
$
|
15.0
|
|
|
$
|
15.8
|
|
|
Charges Incurred in 2016
|
|
Charges Incurred to Date
|
|
Total Charges Expected to be Incurred
|
||||||
Residential Heating & Cooling
|
$
|
—
|
|
|
$
|
0.9
|
|
|
$
|
0.9
|
|
Commercial Heating & Cooling
|
—
|
|
|
0.9
|
|
|
0.9
|
|
|||
Refrigeration
|
(0.2
|
)
|
|
11.8
|
|
|
11.8
|
|
|||
Corporate & Other
|
1.4
|
|
|
1.4
|
|
|
2.2
|
|
|||
Total restructuring charges
|
$
|
1.2
|
|
|
$
|
15.0
|
|
|
$
|
15.8
|
|
|
Balance as of
December 31, 2015 |
|
Included in
Earnings |
|
Cash
Utilization |
|
Non-Cash Utilization and Other
|
|
Balance as of September 30, 2016
|
||||||||||
Severance and related expense
|
$
|
0.7
|
|
|
$
|
(0.3
|
)
|
|
$
|
(0.4
|
)
|
|
$
|
0.1
|
|
|
$
|
0.1
|
|
Asset write-offs and accelerated depreciation
|
—
|
|
|
0.2
|
|
|
(0.1
|
)
|
|
(0.1
|
)
|
|
—
|
|
|||||
Equipment moves
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Lease termination
|
0.2
|
|
|
—
|
|
|
—
|
|
|
|
|
|
0.2
|
|
|||||
Other
|
—
|
|
|
1.3
|
|
|
(1.5
|
)
|
|
—
|
|
|
(0.2
|
)
|
|||||
Total restructuring accruals
|
$
|
0.9
|
|
|
$
|
1.2
|
|
|
$
|
(2.0
|
)
|
|
$
|
—
|
|
|
$
|
0.1
|
|
|
For the Three Months Ended September 30,
|
|
For the Nine Months Ended September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Net income
|
$
|
101.7
|
|
|
$
|
80.3
|
|
|
$
|
237.3
|
|
|
$
|
175.3
|
|
Add: Loss from discontinued operations
|
—
|
|
|
—
|
|
|
0.6
|
|
|
0.5
|
|
||||
Income from continuing operations
|
$
|
101.7
|
|
|
$
|
80.3
|
|
|
$
|
237.9
|
|
|
$
|
175.8
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average shares outstanding – basic
|
43.2
|
|
|
45.0
|
|
|
43.6
|
|
|
44.9
|
|
||||
Add: Potential effect of dilutive securities attributable to stock-based payments
|
0.5
|
|
|
0.6
|
|
|
0.6
|
|
|
0.7
|
|
||||
Weighted-average shares outstanding – diluted
|
43.7
|
|
|
45.6
|
|
|
44.2
|
|
|
45.6
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Earnings per share – Basic:
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations
|
$
|
2.35
|
|
|
$
|
1.78
|
|
|
$
|
5.46
|
|
|
$
|
3.92
|
|
Loss from discontinued operations
|
—
|
|
|
—
|
|
|
(0.01
|
)
|
|
(0.01
|
)
|
||||
Net income
|
$
|
2.35
|
|
|
$
|
1.78
|
|
|
$
|
5.45
|
|
|
$
|
3.91
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings per share – Diluted:
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations
|
$
|
2.33
|
|
|
$
|
1.76
|
|
|
$
|
5.39
|
|
|
$
|
3.86
|
|
Loss from discontinued operations
|
—
|
|
|
—
|
|
|
(0.01
|
)
|
|
(0.01
|
)
|
||||
Net income
|
$
|
2.33
|
|
|
$
|
1.76
|
|
|
$
|
5.38
|
|
|
$
|
3.85
|
|
Segment
|
|
Product or Services
|
|
Markets Served
|
|
Geographic Areas
|
Residential Heating & Cooling
|
|
Furnaces, air conditioners, heat pumps, packaged heating and cooling systems, indoor air quality equipment, comfort control products, replacement parts
|
|
Residential Replacement;
Residential New Construction
|
|
United States
Canada
|
Commercial Heating & Cooling
|
|
Unitary heating and air conditioning equipment, applied systems, controls, installation and service of commercial heating and cooling equipment
|
|
Light Commercial
|
|
United States
Canada
Europe
|
Refrigeration
|
|
Condensing units, unit coolers, fluid coolers, air cooled condensers, air handlers, process chillers, controls, compressorized racks, supermarket display cases and systems
|
|
Light Commercial;
Food Preservation;
Non-Food/Industrial
|
|
United States
Canada
Europe
Asia Pacific
South America
|
|
For the Three Months Ended September 30,
|
|
For the Nine Months Ended September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Net sales
|
|
|
|
|
|
|
|
||||||||
Residential Heating & Cooling
|
$
|
572.7
|
|
|
$
|
517.9
|
|
|
$
|
1,524.5
|
|
|
$
|
1,435.6
|
|
Commercial Heating & Cooling
|
251.4
|
|
|
246.8
|
|
|
674.7
|
|
|
660.3
|
|
||||
Refrigeration
|
185.9
|
|
|
190.3
|
|
|
545.2
|
|
|
537.4
|
|
||||
|
$
|
1,010.0
|
|
|
$
|
955.0
|
|
|
$
|
2,744.4
|
|
|
$
|
2,633.3
|
|
|
|
|
|
|
|
|
|
||||||||
Segment profit (loss)
(1)
|
|
|
|
|
|
|
|
||||||||
Residential Heating & Cooling
|
$
|
112.7
|
|
|
$
|
90.1
|
|
|
$
|
266.9
|
|
|
$
|
221.3
|
|
Commercial Heating & Cooling
|
48.9
|
|
|
44.8
|
|
|
110.6
|
|
|
95.5
|
|
||||
Refrigeration
|
22.9
|
|
|
20.3
|
|
|
53.2
|
|
|
37.5
|
|
||||
Corporate and other
|
(27.3
|
)
|
|
(24.0
|
)
|
|
(65.7
|
)
|
|
(57.4
|
)
|
||||
Total segment profit
|
157.2
|
|
|
131.2
|
|
|
365.0
|
|
|
296.9
|
|
||||
Reconciliation to Operating income:
|
|
|
|
|
|
|
|
||||||||
Special product quality adjustments
|
—
|
|
|
0.7
|
|
|
(0.4
|
)
|
|
(0.6
|
)
|
||||
Items in Losses (gains) and other expenses, net that are excluded from segment profit (loss) (1)
|
(0.3
|
)
|
|
3.9
|
|
|
2.9
|
|
|
10.8
|
|
||||
Restructuring charges (gains)
|
0.6
|
|
|
(0.4
|
)
|
|
1.2
|
|
|
1.8
|
|
||||
Operating income
|
$
|
156.9
|
|
|
$
|
127.0
|
|
|
$
|
361.3
|
|
|
$
|
284.9
|
|
•
|
Special product quality adjustments;
|
•
|
The following items in Losses (gains) and other expenses, net:
|
◦
|
Net change in unrealized gains and/or losses on unsettled futures contracts,
|
◦
|
Special legal contingency charges,
|
◦
|
Asbestos-related litigation,
|
◦
|
Contractor tax payments,
|
◦
|
Environmental liabilities, and
|
◦
|
Other items, net;
|
•
|
Restructuring charges; and
|
•
|
Goodwill, long-lived asset, and equity method investment impairments.
|
|
As of September 30, 2016
|
|
As of December 31, 2015
|
||||
Investment in marketable equity securities
|
$
|
4.6
|
|
|
$
|
6.5
|
|
|
As of September 30, 2016
|
|
As of December 31, 2015
|
||||
Senior unsecured notes
|
$
|
207.2
|
|
|
$
|
207.3
|
|
(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
|
|
(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
|
|
(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
|
|
(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
|
|
(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
|
|
(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
|
|
(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
|
|
(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
|
|
•
|
Net sales increased
$55 million
, or
6%
, to
$1,010 million
in the third quarter of 2016 compared to
$955 million
in the third quarter of 2015.
|
•
|
Operating income in the third quarter of 2016 increased
$30 million
to
$157 million
from
$127 million
in the third quarter of 2015.
|
•
|
Net income for the third quarter of 2016 increased $22 million to
$102 million
from
$80 million
in the third quarter of 2015.
|
•
|
Diluted earnings per share from continuing operations were
$2.33
per share in the third quarter of 2016 compared to
$1.76
per share in the third quarter of 2015.
|
•
|
During the third quarter of 2016, we returned $19 million to shareholders through dividend payments.
|
•
|
Cash provided by operating activities was flat at
$107 million
in the first nine months of 2016 and 2015, although we made a discretionary $50 million pension contribution into our U.S. qualified plan in the third quarter of 2016.
|
|
For the Three Months Ended September 30,
|
|||||||||||||||
|
Dollars (in millions)
|
|
Percent
Change Fav/(Unfav) |
|
Percent of Sales
|
|||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|||||||||
Net sales
|
$
|
1,010.0
|
|
|
$
|
955.0
|
|
|
5.8
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
Cost of goods sold
|
699.7
|
|
|
681.6
|
|
|
(2.7
|
)
|
|
69.3
|
|
|
71.4
|
|
||
Gross profit
|
310.3
|
|
|
273.4
|
|
|
13.5
|
|
|
30.7
|
|
|
28.6
|
|
||
Selling, general and administrative expenses
|
156.5
|
|
|
143.8
|
|
|
(8.8
|
)
|
|
15.5
|
|
|
15.1
|
|
||
Losses and other expenses, net
|
0.7
|
|
|
6.0
|
|
|
88.3
|
|
|
0.1
|
|
|
0.6
|
|
||
Restructuring charges
|
0.6
|
|
|
(0.4
|
)
|
|
(250.0
|
)
|
|
0.1
|
|
|
—
|
|
||
Income from equity method investments
|
(4.4
|
)
|
|
(3.0
|
)
|
|
46.7
|
|
|
(0.4
|
)
|
|
(0.3
|
)
|
||
Operating income
|
$
|
156.9
|
|
|
$
|
127.0
|
|
|
23.5
|
%
|
|
15.5
|
%
|
|
13.3
|
%
|
|
For the Three Months Ended September 30,
|
||||||
|
2016
|
|
2015
|
||||
Realized losses on settled future contracts
|
$
|
0.3
|
|
|
$
|
0.6
|
|
Foreign currency exchange losses
|
0.5
|
|
|
1.4
|
|
||
Loss on disposal of fixed assets
|
0.2
|
|
|
0.1
|
|
||
Net change in unrealized (gains) losses on unsettled futures contracts
|
(1.2
|
)
|
|
0.8
|
|
||
Special legal contingency charges
|
0.5
|
|
|
1.3
|
|
||
Asbestos-related litigation
|
0.4
|
|
|
0.4
|
|
||
Contractor tax payments
|
—
|
|
|
0.8
|
|
||
Environmental liabilities
|
—
|
|
|
0.3
|
|
||
Other items, net
|
—
|
|
|
0.3
|
|
||
Losses and other expenses, net (pre-tax)
|
$
|
0.7
|
|
|
$
|
6.0
|
|
|
For the Three Months Ended September 30,
|
|
|
|
|
|||||||||
|
2016
|
|
2015
|
|
Difference
|
|
% Change
|
|||||||
Net sales
|
$
|
572.7
|
|
|
$
|
517.9
|
|
|
$
|
54.8
|
|
|
10.6
|
%
|
Profit
|
$
|
112.7
|
|
|
$
|
90.1
|
|
|
$
|
22.6
|
|
|
25.1
|
%
|
% of net sales
|
19.7
|
%
|
|
17.4
|
%
|
|
|
|
|
|
For the Three Months Ended September 30,
|
|
|
|
|
|||||||||
|
2016
|
|
2015
|
|
Difference
|
|
% Change
|
|||||||
Net sales
|
$
|
251.4
|
|
|
$
|
246.8
|
|
|
$
|
4.6
|
|
|
1.9
|
%
|
Profit
|
$
|
48.9
|
|
|
$
|
44.8
|
|
|
$
|
4.1
|
|
|
9.2
|
%
|
% of net sales
|
19.5
|
%
|
|
18.2
|
%
|
|
|
|
|
|
For the Three Months Ended September 30,
|
|
|
|
|
|||||||||
|
2016
|
|
2015
|
|
Difference
|
|
% Change
|
|||||||
Net sales
|
$
|
185.9
|
|
|
$
|
190.3
|
|
|
$
|
(4.4
|
)
|
|
(2.3
|
)%
|
Profit
|
$
|
22.9
|
|
|
$
|
20.3
|
|
|
$
|
2.6
|
|
|
12.8
|
%
|
% of net sales
|
12.3
|
%
|
|
10.7
|
%
|
|
|
|
|
|
For the Nine Months Ended September 30,
|
|||||||||||||||
|
Dollars (in millions)
|
|
Percent
Change Fav/(Unfav) |
|
Percent of Sales
|
|||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|||||||||
Net sales
|
$
|
2,744.4
|
|
|
$
|
2,633.3
|
|
|
4.2
|
|
|
100.0
|
%
|
|
100.0
|
%
|
Cost of goods sold
|
1,935.5
|
|
|
1,913.5
|
|
|
(1.1
|
)
|
|
70.5
|
|
|
72.7
|
|
||
Gross profit
|
808.9
|
|
|
719.8
|
|
|
12.4
|
|
|
29.5
|
|
|
27.3
|
|
||
Selling, general and administrative expenses
|
456.2
|
|
|
430.0
|
|
|
(6.1
|
)
|
|
16.6
|
|
|
16.3
|
|
||
Losses and other expenses, net
|
5.5
|
|
|
14.9
|
|
|
63.1
|
|
|
0.2
|
|
|
0.6
|
|
||
Restructuring charges
|
1.2
|
|
|
1.8
|
|
|
33.3
|
|
|
—
|
|
|
0.1
|
|
||
Income from equity method investments
|
(15.3
|
)
|
|
(11.8
|
)
|
|
29.7
|
|
|
(0.6
|
)
|
|
(0.4
|
)
|
||
Operating income
|
$
|
361.3
|
|
|
$
|
284.9
|
|
|
26.8
|
|
|
13.2
|
%
|
|
10.8
|
%
|
|
For the Nine Months Ended September 30,
|
||||||
|
2016
|
|
2015
|
||||
Realized losses on settled future contracts
|
$
|
1.2
|
|
|
$
|
1.3
|
|
Foreign currency exchange losses
|
1.1
|
|
|
2.7
|
|
||
Loss on disposal of fixed assets
|
0.3
|
|
|
0.1
|
|
||
Net change in unrealized (gains) losses on unsettled futures contracts
|
(1.9
|
)
|
|
0.9
|
|
||
Special legal contingency charges
|
0.5
|
|
|
5.5
|
|
||
Asbestos-related litigation
|
2.3
|
|
|
1.0
|
|
||
Environmental liabilities
|
1.1
|
|
|
0.7
|
|
||
Contractor tax payments
|
0.5
|
|
|
2.4
|
|
||
Acquisition costs
|
0.4
|
|
|
—
|
|
||
Other items, net
|
—
|
|
|
0.3
|
|
||
Losses and other expenses, net (pre-tax)
|
$
|
5.5
|
|
|
$
|
14.9
|
|
|
For the Nine Months Ended September 30,
|
|
|
|
|
|||||||||
|
2016
|
|
2015
|
|
Difference
|
|
% Change
|
|||||||
Net sales
|
$
|
1,524.5
|
|
|
$
|
1,435.6
|
|
|
$
|
88.9
|
|
|
6.2
|
%
|
Profit
|
$
|
266.9
|
|
|
$
|
221.3
|
|
|
$
|
45.6
|
|
|
20.6
|
%
|
% of net sales
|
17.5
|
%
|
|
15.4
|
%
|
|
|
|
|
|
For the Nine Months Ended September 30,
|
|
|
|
|
|||||||||
|
2016
|
|
2015
|
|
Difference
|
|
% Change
|
|||||||
Net sales
|
$
|
674.7
|
|
|
$
|
660.3
|
|
|
$
|
14.4
|
|
|
2.2
|
%
|
Profit
|
$
|
110.6
|
|
|
$
|
95.5
|
|
|
$
|
15.1
|
|
|
15.8
|
%
|
% of net sales
|
16.4
|
%
|
|
14.5
|
%
|
|
|
|
|
|
For the Nine Months Ended September 30,
|
|
|
|
|
|||||||||
|
2016
|
|
2015
|
|
Difference
|
|
% Change
|
|||||||
Net sales
|
$
|
545.2
|
|
|
$
|
537.4
|
|
|
$
|
7.8
|
|
|
1.5
|
%
|
Profit
|
$
|
53.2
|
|
|
$
|
37.5
|
|
|
$
|
15.7
|
|
|
41.9
|
%
|
% of net sales
|
9.8
|
%
|
|
7.0
|
%
|
|
|
|
|
|
For the Nine Months Ended September 30,
|
||||||
|
2016
|
|
2015
|
||||
Net cash provided by operating activities
|
$
|
106.9
|
|
|
$
|
106.9
|
|
Net cash used in investing activities
|
(59.4
|
)
|
|
(47.0
|
)
|
||
Net cash used in financing activities
|
(41.8
|
)
|
|
(52.9
|
)
|
|
Outstanding Borrowings
|
||
Short-term debt:
|
|
||
Foreign obligations
|
$
|
2.8
|
|
Asset Securitization Program
(1)
|
325.0
|
|
|
Total short-term debt
|
$
|
327.8
|
|
Current maturities of long-term debt:
|
|
||
Capital lease obligations
|
0.9
|
|
|
Domestic credit facility
(2)
|
15.0
|
|
|
Senior unsecured notes
|
200.0
|
|
|
Debt issuance costs
|
(0.3
|
)
|
|
Total current maturities of long-term debt
|
$
|
215.6
|
|
Long-term debt:
|
|
||
Capital lease obligations
|
15.1
|
|
|
Domestic credit facility
(2)
|
500.0
|
|
|
Debt issuance costs
|
(2.6
|
)
|
|
Total long-term debt
|
512.5
|
|
|
Total debt
|
$
|
1,055.9
|
|
|
Total Number of Shares Purchased
(1)
|
|
Average Price Paid per Share (including fees)
|
|
Total Number of Shares Purchased As Part of Publicly Announced Plans
|
|
Approximate Dollar Value of Shares that may yet be Purchased under our Share Repurchase Plans
(in millions)
(2)
|
||||||
July 1 through July 23
|
200,803
|
|
|
$
|
132.64
|
|
|
196,269
|
|
|
$
|
196.2
|
|
July 24 through August 20
|
505,079
|
|
|
156.56
|
|
|
478,316
|
|
|
96.2
|
|
||
August 21 through September 30
|
1,268
|
|
|
158.59
|
|
|
—
|
|
|
96.2
|
|
||
|
707,150
|
|
|
|
|
674,585
|
|
|
|
3.1
|
Restated Certificate of Incorporation of Lennox International Inc. (“LII”) (filed as Exhibit 3.1 to LII’s Registration Statement on Form S-1 (Registration Statement No. 333-75725) filed on April 6, 1999 and incorporated herein by reference).
|
3.2
|
Amended and Restated Bylaws of LII (filed as Exhibit 3.1 to LII’s Current Report on Form 8-K filed on December 16, 2013 and incorporated herein by reference).
|
4.1
|
Specimen Stock Certificate for the Common Stock, par value $.01 per share, of LII (filed as Exhibit 4.1 to LII’s Amendment to Registration Statement on Form S-1/A (Registration No. 333-75725) filed on June 16, 1999 and incorporated herein by reference).
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4.2
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Indenture, dated as of May 3, 2010, between LII and U.S. Bank National Association, as trustee (filed as Exhibit 4.3 to LII’s Post-Effective Amendment No. 1 to Registration Statement on S-3 (Registration No. 333-155796) filed on May 3, 2010, and incorporated herein by reference).
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4.3
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Form of First Supplemental Indenture among LII, the guarantors party thereto and U.S. Bank National Association, as trustee (filed as Exhibit 4.11 to LII’s Post-Effective Amendment No. 1 to Registration Statement on S-3 (Registration No. 333-155796) filed on May 3, 2010, and incorporated herein by reference).
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4.4
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Second Supplemental Indenture dated as of March 28, 2011, among Heatcraft Inc., a Mississippi corporation, Heatcraft Refrigeration Products LLC, a Delaware limited liability company and Advanced Distributor Products LLC, a Delaware limited liability company (the “Guarantors”), LII, and each other existing Guarantor under the Indenture dated as of May 3, 2010, and U.S. Bank National Association as Trustee (filed as Exhibit 4.4 to LII’s Quarterly Report on Form 10-Q filed on April 26, 2011, and incorporated herein by reference).
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4.5
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Fourth Supplemental Indenture, dated as of December 10, 2013 among Lennox National Account Services LLC, LGL Australia (US) Inc., Lennox International Inc., each other existing Guarantor under the Indenture, dated as of May 3, 2010, as subsequently supplemented, and U.S. Bank National Association (filed as Exhibit 4.5 to LII's Annual Report on Form 10-K filed on February 13, 2014 and incorporated herein by reference).
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4.6
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Fifth Supplemental Indenture, dated as of August 30, 2016 among LGL Europe Holding Co., each other existing Guarantor under the Indenture, dated as of May 3, 2010, as subsequently supplemented, and U.S. Bank National Association (filed herewith).
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4.7
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Form of 4.900% Note due 2017 (filed as Exhibit 4.3 to LII’s Current Report on Form 8-K filed on May 6, 2010 and incorporated herein by reference).
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10.1
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Amendment No. 5 to Amended and Restated Receivables Purchase Agreement, dated as of June 30, 2016, among LPAC Corp., as the Seller, Lennox Industries Inc., as the Master Servicer, Victory Receivables Corporation, as a Purchaser and The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch, as Administrative Agent for the Investors, the Purchaser Agent for the BTMU Purchaser Group and a BTMU Liquidity Bank (filed as Exhibit 10.1 to LII’s Current Report on Form 8-K filed on July 6, 2016 and incorporated herein by reference).
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10.2
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Sixth Amended and Restated Credit Facility Agreement dated as of August 30, 2016, among Lennox International Inc., a Delaware corporation, the Lenders party thereto, and JPMorgan Chase Bank, National Association, as Administrative Agent (filed as Exhibit 10.1 to LII’s Current Report on Form 8-K filed on September 2, 2016 and incorporated herein by reference).
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31.1
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Certification of the principal executive officer (filed herewith).
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31.2
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Certification of the principal financial officer (filed herewith).
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32.1
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Certification of the principal executive officer and the principal financial officer pursuant to 18 U.S.C. Section 1350 (furnished herewith).
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LENNOX INDUSTRIES INC.
ALLIED AIR ENTERPRISES INC.
LENNOX GLOBAL LTD.
HEATCRAFT INC.
HEATCRAFT REFRIGERATION PRODUCTS LLC
ADVANCED DISTRIBUTOR PRODUCTS LLC
LENNOX NATIONAL ACCOUNT SERVICES LLC
LGL AUSTRALIA (US) INC.
LGL EUROPE HOLDING CO.
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By:
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/s/ Rick Pelini
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Name:
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Rick Pelini
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Title:
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Vice President and Treasurer
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LENNOX INTERNATIONAL INC.
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By:
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/s/ Rick Pelini
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Name:
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Rick Pelini
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Title:
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Vice President and Treasurer
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U.S. BANK NATIONAL ASSOCIATION, as Trustee
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By:
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Name:
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s/ Brad Hounsel
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Title:
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Vice President
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1.
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I have reviewed this quarterly report on Form 10-Q of Lennox International Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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/s/ Todd M. Bluedorn
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Todd M. Bluedorn
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Chief Executive Officer
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1.
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I have reviewed this quarterly report on Form 10-Q of Lennox International Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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/s/ Joseph W. Reitmeier
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Joseph W. Reitmeier
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Chief Financial Officer
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(1)
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ Todd M. Bluedorn
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Todd M. Bluedorn
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Chief Executive Officer
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/s/ Joseph W. Reitmeier
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Joseph W. Reitmeier
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Chief Financial Officer
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