|
Large Accelerated Filer
|
[X]
|
|
Accelerated Filer
|
[ ]
|
Non-Accelerated Filer
|
[ ]
|
|
Smaller Reporting Company
|
[ ]
|
|
|
|
Emerging growth company
|
[ ]
|
|
|
|
Page
|
Part I
|
|
|
|
|
|
|
Consolidated Balance Sheets - March 31, 2019 (Unaudited) and December 31, 2018
|
|
|
Consolidated Statements of Operations (Unaudited) - Three Months Ended March 31, 2019 and 2018
|
|
|
Consolidated Statements of Comprehensive Income (Unaudited) - Three Months Ended March 31, 2019 and 2018
|
|
|
Consolidated Statements of Stockholders' (Deficit) Equity (Unaudited) - Three Months Ended March 31, 2019 and 2018
|
|
|
Consolidated Statements of Cash Flows (Unaudited) - Three Months Ended March 31, 2019 and 2018
|
|
|
||
|
||
|
||
|
||
Part II
|
|
|
|
||
|
||
|
||
|
LENNOX INTERNATIONAL INC. AND SUBSIDIARIES
Consolidated Balance Sheets
|
|||||||
(Amounts in millions, except shares and par values)
|
As of March 31, 2019
|
|
As of December 31, 2018
|
||||
|
(Unaudited)
|
|
|
||||
ASSETS
|
|
|
|
||||
Current Assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
31.7
|
|
|
$
|
46.3
|
|
Accounts and notes receivable, net of allowances of $7.2 and $6.3 in 2019 and 2018, respectively
|
502.6
|
|
|
472.7
|
|
||
Inventories, net
|
600.1
|
|
|
509.8
|
|
||
Other assets
|
86.5
|
|
|
60.6
|
|
||
Total current assets
|
1,220.9
|
|
|
1,089.4
|
|
||
Property, plant and equipment, net of accumulated depreciation of $785.1 and $778.5 in 2019 and 2018, respectively
|
411.7
|
|
|
408.3
|
|
||
Right-of-use assets from operating leases
|
170.1
|
|
|
—
|
|
||
Goodwill
|
186.5
|
|
|
186.6
|
|
||
Deferred income taxes
|
48.5
|
|
|
67.0
|
|
||
Other assets, net
|
68.0
|
|
|
65.9
|
|
||
Total assets
|
$
|
2,105.7
|
|
|
$
|
1,817.2
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
|
|
|
||||
Current Liabilities:
|
|
|
|
||||
Current maturities of long-term debt
|
$
|
237.6
|
|
|
$
|
300.8
|
|
Current operating lease liabilities
|
48.1
|
|
|
—
|
|
||
Accounts payable
|
411.9
|
|
|
433.3
|
|
||
Accrued expenses
|
219.8
|
|
|
272.3
|
|
||
Income taxes payable
|
—
|
|
|
2.1
|
|
||
Total current liabilities
|
917.4
|
|
|
1,008.5
|
|
||
Long-term debt
|
1,059.0
|
|
|
740.5
|
|
||
Long-term operating lease liabilities
|
122.6
|
|
|
—
|
|
||
Pensions
|
82.3
|
|
|
82.8
|
|
||
Other liabilities
|
129.2
|
|
|
135.0
|
|
||
Total liabilities
|
2,310.5
|
|
|
1,966.8
|
|
||
Commitments and contingencies
|
|
|
|
|
|
||
Stockholders' deficit:
|
|
|
|
||||
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
|
1,079.4
|
|
|
1,078.8
|
|
||
Retained earnings
|
1,898.7
|
|
|
1,855.0
|
|
||
Accumulated other comprehensive loss
|
(180.2
|
)
|
|
(188.8
|
)
|
||
Treasury stock, at cost, shares 47,609,360 and 47,312,248 shares for 2019 and 2018, respectively
|
(3,003.6
|
)
|
|
(2,895.5
|
)
|
||
Total stockholders' deficit
|
(204.8
|
)
|
|
(149.6
|
)
|
||
Total liabilities and stockholders' deficit
|
$
|
2,105.7
|
|
|
$
|
1,817.2
|
|
LENNOX INTERNATIONAL INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(Unaudited)
|
|||||||
(Amounts in millions, except per share data)
|
For the Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Net sales
|
$
|
790.3
|
|
|
$
|
834.8
|
|
Cost of goods sold
|
588.7
|
|
|
611.6
|
|
||
Gross profit
|
201.6
|
|
|
223.2
|
|
||
Operating Expenses:
|
|
|
|
||||
Selling, general and administrative expenses
|
145.8
|
|
|
155.2
|
|
||
Losses (gains) and other expenses, net
|
1.1
|
|
|
7.3
|
|
||
Restructuring charges
|
0.5
|
|
|
0.9
|
|
||
Loss on sale of business
|
8.5
|
|
|
—
|
|
||
Loss on assets held for sale
|
—
|
|
|
10.3
|
|
||
Insurance proceeds for lost profits
|
(39.5
|
)
|
|
—
|
|
||
Gain from insurance recoveries, net of losses incurred
|
(6.9
|
)
|
|
—
|
|
||
Income from equity method investments
|
(2.6
|
)
|
|
(3.5
|
)
|
||
Operating income
|
94.7
|
|
|
53.0
|
|
||
Interest expense, net
|
10.9
|
|
|
8.4
|
|
||
Other expense (income), net
|
0.8
|
|
|
0.6
|
|
||
Income from continuing operations before income taxes
|
83.0
|
|
|
44.0
|
|
||
Provision for income taxes
|
13.6
|
|
|
6.1
|
|
||
Income from continuing operations
|
69.4
|
|
|
37.9
|
|
||
Discontinued Operations:
|
|
|
|
||||
Loss from discontinued operations before income taxes
|
(0.1
|
)
|
|
—
|
|
||
Income tax benefit
|
—
|
|
|
—
|
|
||
Loss from discontinued operations
|
(0.1
|
)
|
|
—
|
|
||
Net income
|
$
|
69.3
|
|
|
$
|
37.9
|
|
|
|
|
|
||||
Earnings per share – Basic:
|
|
|
|
||||
Income from continuing operations
|
$
|
1.75
|
|
|
$
|
0.91
|
|
Loss from discontinued operations
|
—
|
|
|
—
|
|
||
Net income
|
$
|
1.75
|
|
|
$
|
0.91
|
|
Earnings per share – Diluted:
|
|
|
|
||||
Income from continuing operations
|
$
|
1.73
|
|
|
$
|
0.90
|
|
Loss from discontinued operations
|
—
|
|
|
—
|
|
||
Net income
|
$
|
1.73
|
|
|
$
|
0.90
|
|
|
|
|
|
||||
Weighted Average Number of Shares Outstanding - Basic
|
39.7
|
|
|
41.5
|
|
||
Weighted Average Number of Shares Outstanding - Diluted
|
40.1
|
|
|
42.1
|
|
||
|
|
|
|
LENNOX INTERNATIONAL INC. AND SUBSIDIARIES
Consolidated Statements of Comprehensive Income
(Unaudited)
|
|||||||
(Amounts in millions)
|
For the Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Net income
|
$
|
69.3
|
|
|
$
|
37.9
|
|
Other comprehensive income:
|
|
|
|
||||
Foreign currency translation adjustments
|
0.5
|
|
|
7.9
|
|
||
Reclassification of foreign currency translation adjustments into earnings
|
2.1
|
|
|
—
|
|
||
Net change in pension and post-retirement liabilities
|
(2.3
|
)
|
|
(2.3
|
)
|
||
Reclassification of pension and post-retirement benefit losses into earnings
|
2.0
|
|
|
2.3
|
|
||
Change in available-for-sale marketable equity securities
|
—
|
|
|
(1.8
|
)
|
||
Net change in fair value of cash flow hedges
|
6.2
|
|
|
(4.3
|
)
|
||
Reclassification of cash flow hedge losses (gains) into earnings
|
2.4
|
|
|
(4.6
|
)
|
||
Other comprehensive income (loss) before income taxes
|
10.9
|
|
|
(2.8
|
)
|
||
Income tax expense
|
(2.3
|
)
|
|
(21.1
|
)
|
||
Other comprehensive income (loss), net of tax
|
8.6
|
|
|
(23.9
|
)
|
||
Comprehensive income
|
$
|
77.9
|
|
|
$
|
14.0
|
|
|
|
Common Stock Issued
|
|
Additional Paid-In Capital
|
|
Retained Earnings
|
|
Accumulated Other Comprehensive Loss
|
|
Treasury Stock at Cost
|
|
Total Stockholders' (Deficit) Equity
|
|||||||||||||||
|
|
|
|
Shares
|
|
Amount
|
|
||||||||||||||||||||
Balance as of December 31, 2017
|
|
$
|
0.9
|
|
|
$
|
1,061.5
|
|
|
$
|
1,575.9
|
|
|
$
|
(157.4
|
)
|
|
45.4
|
|
|
$
|
(2,430.8
|
)
|
|
$
|
50.1
|
|
Cumulative effect adjustment upon adoption of new accounting standards (ASU 2016-16), (ASU 2018-02), (ASU2016-1) and (ASC 606)
|
|
—
|
|
|
—
|
|
|
16.9
|
|
|
(24.5
|
)
|
|
—
|
|
|
—
|
|
|
(7.6
|
)
|
||||||
Net income
|
|
—
|
|
|
—
|
|
|
37.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
37.9
|
|
||||||
Dividends, $0.51 per share
|
|
—
|
|
|
—
|
|
|
(21.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(21.1
|
)
|
||||||
Foreign currency translation adjustments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7.9
|
|
|
—
|
|
|
—
|
|
|
7.9
|
|
||||||
Pension and post-retirement liability changes, net of tax expense of $0.1
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
||||||
Stock-based compensation expense
|
|
—
|
|
|
4.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4.8
|
|
||||||
Change in cash flow hedges, net of tax benefit of $1.7
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7.1
|
)
|
|
—
|
|
|
—
|
|
|
(7.1
|
)
|
||||||
Treasury shares reissued for common stock
|
|
—
|
|
|
(7.1
|
)
|
|
—
|
|
|
—
|
|
|
(0.3
|
)
|
|
7.9
|
|
|
0.8
|
|
||||||
Treasury stock purchases
|
|
—
|
|
|
(22.5
|
)
|
|
—
|
|
|
—
|
|
|
0.8
|
|
|
(145.6
|
)
|
|
(168.1
|
)
|
||||||
Balance as of March 31, 2018
|
|
$
|
0.9
|
|
|
$
|
1,036.7
|
|
|
$
|
1,609.6
|
|
|
$
|
(181.3
|
)
|
|
45.9
|
|
|
$
|
(2,568.5
|
)
|
|
$
|
(102.6
|
)
|
|
|
Common Stock Issued
|
|
Additional Paid-In Capital
|
|
Retained Earnings
|
|
Accumulated Other Comprehensive Loss
|
|
Treasury Stock at Cost
|
|
Total Stockholders' (Deficit) Equity
|
||||||||||||||||
|
|
|
|
Shares
|
|
Amount
|
|
|||||||||||||||||||||
Balance as of December 31, 2018
|
|
$
|
0.9
|
|
|
$
|
1,078.8
|
|
|
$
|
1,855.0
|
|
|
$
|
(188.8
|
)
|
|
47.3
|
|
|
$
|
(2,895.5
|
)
|
|
$
|
(149.6
|
)
|
|
Effect on adjustment upon adoption of new accounting standards (ASC 842)
|
|
—
|
|
|
—
|
|
|
(0.3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.3
|
)
|
|||||||
Net income
|
|
—
|
|
|
—
|
|
|
69.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
69.3
|
|
|||||||
Dividends, $0.64 per share
|
|
—
|
|
|
—
|
|
|
(25.3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(25.3
|
)
|
|||||||
Foreign currency translation adjustments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.6
|
|
|
—
|
|
|
—
|
|
|
2.6
|
|
|||||||
Pension and post-retirement liability changes
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
|||||||
Stock-based compensation expense
|
|
—
|
|
|
5.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5.2
|
|
|||||||
Change in cash flow hedges, net of tax expense of $2.3
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6.2
|
|
|
—
|
|
|
—
|
|
|
6.2
|
|
|||||||
Treasury shares reissued for common stock
|
|
—
|
|
|
(4.6
|
)
|
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
|
5.4
|
|
|
0.8
|
|
|||||||
Treasury stock purchases
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.5
|
|
|
(113.5
|
)
|
|
(113.5
|
)
|
|||||||
Balance as of March 31, 2019
|
|
$
|
0.9
|
|
|
$
|
1,079.4
|
|
|
$
|
1,898.7
|
|
|
$
|
(180.2
|
)
|
|
$
|
47.6
|
|
|
$
|
(3,003.6
|
)
|
|
$
|
(204.8
|
)
|
LENNOX INTERNATIONAL INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Unaudited)
|
|||||||
(Amounts in millions)
|
For the Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
69.3
|
|
|
$
|
37.9
|
|
Adjustments to reconcile net income to net cash used in operating activities:
|
|
|
|
||||
Loss on sale of business
|
8.5
|
|
|
—
|
|
||
Gain from insurance recoveries, net of losses incurred
|
(6.9
|
)
|
|
—
|
|
||
Income from equity method investments
|
(2.6
|
)
|
|
(3.5
|
)
|
||
Loss on assets held for sale
|
—
|
|
|
10.3
|
|
||
Restructuring charges, net of cash paid
|
0.3
|
|
|
0.6
|
|
||
Provision for bad debts
|
1.6
|
|
|
1.9
|
|
||
Unrealized losses (gains) on derivative contracts
|
(0.6
|
)
|
|
(0.1
|
)
|
||
Stock-based compensation expense
|
5.2
|
|
|
4.8
|
|
||
Depreciation and amortization
|
18.2
|
|
|
16.6
|
|
||
Deferred income taxes
|
15.5
|
|
|
(2.1
|
)
|
||
Pension expense
|
2.0
|
|
|
2.1
|
|
||
Pension contributions
|
(2.5
|
)
|
|
(0.7
|
)
|
||
Other items, net
|
0.2
|
|
|
0.1
|
|
||
Changes in assets and liabilities, net of effects of divestitures:
|
|
|
|
||||
Accounts and notes receivable
|
(62.7
|
)
|
|
(44.5
|
)
|
||
Inventories
|
(120.9
|
)
|
|
(124.3
|
)
|
||
Other current assets
|
4.5
|
|
|
(0.7
|
)
|
||
Accounts payable
|
(1.7
|
)
|
|
77.5
|
|
||
Accrued expenses
|
(35.0
|
)
|
|
(35.2
|
)
|
||
Income taxes payable and receivable
|
(34.1
|
)
|
|
(22.3
|
)
|
||
Other
|
0.7
|
|
|
(1.9
|
)
|
||
Net cash used in operating activities
|
(141.0
|
)
|
|
(83.5
|
)
|
||
Cash flows from investing activities:
|
|
|
|
||||
Proceeds from the disposal of property, plant and equipment
|
0.3
|
|
|
0.1
|
|
||
Purchases of property, plant and equipment
|
(37.2
|
)
|
|
(22.7
|
)
|
||
Net proceeds from sale of business
|
43.6
|
|
|
—
|
|
||
Insurance recoveries received for property damage incurred from natural disaster
|
6.9
|
|
|
—
|
|
||
Net cash provided by (used in) investing activities
|
13.6
|
|
|
(22.6
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Short-term borrowings, net
|
—
|
|
|
(0.1
|
)
|
||
Asset securitization payments
|
(43.5
|
)
|
|
(51.0
|
)
|
||
Long-term debt payments
|
(31.7
|
)
|
|
(10.2
|
)
|
||
Long-term debt borrowings
|
3.3
|
|
|
—
|
|
||
Borrowings from credit facility
|
844.5
|
|
|
790.0
|
|
||
Payments on credit facility
|
(525.5
|
)
|
|
(444.1
|
)
|
||
Proceeds from employee stock purchases
|
0.8
|
|
|
0.8
|
|
||
Repurchases of common stock
|
(100.0
|
)
|
|
(150.0
|
)
|
||
Repurchases of common stock to satisfy employee withholding tax obligations
|
(13.5
|
)
|
|
(18.1
|
)
|
||
Cash dividends paid
|
(25.5
|
)
|
|
(21.3
|
)
|
||
Net cash provided by financing activities
|
108.9
|
|
|
96.0
|
|
||
Decrease in cash and cash equivalents
|
(18.5
|
)
|
|
(10.1
|
)
|
||
Effect of exchange rates on cash and cash equivalents
|
3.9
|
|
|
(1.0
|
)
|
||
Cash and cash equivalents, beginning of period
|
46.3
|
|
|
68.2
|
|
||
Cash and cash equivalents, end of period
|
$
|
31.7
|
|
|
$
|
57.1
|
|
|
|
|
|
||||
Supplemental disclosures of cash flow information:
|
|
|
|
||||
Interest paid
|
$
|
8.4
|
|
|
$
|
6.0
|
|
Income taxes paid (net of refunds)
|
$
|
32.0
|
|
|
$
|
32.7
|
|
Insurance recoveries received
|
$
|
76.0
|
|
|
$
|
—
|
|
|
For the Three Months Ended March 31, 2019
|
||||||||||||||
Primary Geographic Markets
|
Residential Heating & Cooling
|
|
Commercial Heating & Cooling
|
|
Refrigeration
|
|
Consolidated
|
||||||||
United States
|
$
|
433.2
|
|
|
$
|
157.3
|
|
|
$
|
91.6
|
|
|
$
|
682.1
|
|
Canada
|
32.4
|
|
|
15.9
|
|
|
0.7
|
|
|
49.0
|
|
||||
International
|
—
|
|
|
0.1
|
|
|
59.1
|
|
|
59.2
|
|
||||
Total
|
$
|
465.6
|
|
|
173.3
|
|
|
151.4
|
|
|
790.3
|
|
|
For the Three Months Ended March 31, 2018
|
||||||||||||||
Primary Geographic Markets
|
Residential Heating & Cooling
|
|
Commercial Heating & Cooling
|
|
Refrigeration
|
|
Consolidated
|
||||||||
United States
|
$
|
423.5
|
|
|
$
|
162.3
|
|
|
$
|
95.7
|
|
|
$
|
681.5
|
|
Canada
|
30.2
|
|
|
16.7
|
|
|
0.9
|
|
|
47.8
|
|
||||
International
|
—
|
|
|
0.1
|
|
|
105.4
|
|
|
105.5
|
|
||||
Total
|
$
|
453.7
|
|
|
179.1
|
|
|
202.0
|
|
|
834.8
|
|
|
March 31, 2019
|
|
December 31, 2018
|
|
$ Change
|
|
% Change
|
|||||||
Contract assets
|
—
|
|
|
$
|
2.5
|
|
|
$
|
(2.5
|
)
|
|
(100.0
|
)%
|
|
Contract liabilities - current
|
(5.4
|
)
|
|
(13.0
|
)
|
|
7.6
|
|
|
(58.5
|
)%
|
|||
Contract liabilities - noncurrent
|
(5.7
|
)
|
|
(5.9
|
)
|
|
0.2
|
|
|
(3.4
|
)%
|
|||
Total
|
$
|
(11.1
|
)
|
|
$
|
(16.4
|
)
|
|
$
|
5.3
|
|
|
|
|
As of March 31, 2019
|
|
As of December 31, 2018
|
||||
Finished goods
|
$
|
429.2
|
|
|
$
|
330.5
|
|
Work in process
|
5.4
|
|
|
10.0
|
|
||
Raw materials and parts
|
225.3
|
|
|
229.1
|
|
||
Subtotal
|
659.9
|
|
|
569.6
|
|
||
Excess of current cost over last-in, first-out cost
|
(59.8
|
)
|
|
(59.8
|
)
|
||
Total inventories, net
|
$
|
600.1
|
|
|
$
|
509.8
|
|
|
Balance at December 31, 2018
|
|
Goodwill Reallocation (1)
|
|
Changes in foreign currency translation rates
|
|
Balance at March 31, 2019
|
||||||||
Residential Heating & Cooling
|
$
|
26.1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
26.1
|
|
Commercial Heating & Cooling
|
61.4
|
|
|
(0.3
|
)
|
|
—
|
|
|
61.1
|
|
||||
Refrigeration
|
99.1
|
|
|
0.3
|
|
|
(0.1
|
)
|
|
99.3
|
|
||||
Total Goodwill
|
$
|
186.6
|
|
|
$
|
—
|
|
|
$
|
(0.1
|
)
|
|
$
|
186.5
|
|
|
As of March 31, 2019
|
|
As of December 31, 2018
|
||||
Unrealized losses on unsettled contracts
|
$
|
—
|
|
|
$
|
8.4
|
|
Income tax benefit
|
—
|
|
|
(2.2
|
)
|
||
Losses (gains) included in AOCL, net of tax (1)
|
$
|
—
|
|
|
$
|
6.2
|
|
•
|
We elected the package of practical expedients available for transition which allow us to not reassess:
|
◦
|
Whether expired or existing contracts contain leases under the new definition of a lease;
|
◦
|
Lease classification for expired or existing leases; and
|
◦
|
Whether previously capitalized initial direct costs would qualify for capitalization under ASC 842.
|
•
|
We did not elect to use hindsight for transition when considering judgments and estimates such as assessments of lessee options to extend or terminate a lease or purchase the underlying asset.
|
•
|
We did not elect to reassess whether land easements meet the definition of a lease if they were not accounted for as leases under the former rules.
|
•
|
For all asset classes, we elected to not recognize a right-of-use asset and lease liability for leases with a term of 12 months or less.
|
•
|
For all asset classes, we elected to not separate non-lease components from lease components to which they relate and have accounted for the combined lease and non-lease components as a single lease component.
|
|
For the Three Months Ended March 31, 2019
|
||
Finance lease cost:
|
|
||
Amortization of right-of-use assets
|
$
|
1.5
|
|
Interest on lease liabilities
|
0.2
|
|
|
Operating lease cost
|
14.8
|
|
|
Short-term lease cost
|
1.1
|
|
|
Variable lease cost
|
4.5
|
|
|
Total lease cost
|
$
|
22.1
|
|
|
|
||
Other information
|
|
||
Cash paid for amounts included in the measurement lease liabilities:
|
|
||
Operating cash flows from finance leases
|
$
|
1.0
|
|
Operating cash flows from operating leases
|
$
|
12.7
|
|
Financing cash flows from finance leases
|
$
|
1.6
|
|
Right-of-use assets obtained in exchange for new finance lease liabilities
|
$
|
3.2
|
|
Right-of-use assets obtained in exchange for new operating lease liabilities
|
$
|
16.6
|
|
|
As of March 31, 2019
|
|
Finance lease right-of-use assets
|
22.7
|
|
Operating lease right-of-use assets
|
170.1
|
|
Finance lease liability, current
|
6.3
|
|
Finance lease liability, non-current
|
22.3
|
|
Operating lease liability, current
|
48.1
|
|
Operating lease liability, non-current
|
122.6
|
|
Weighted-average remaining lease term - finance leases
|
5.46 years
|
|
Weighted-average remaining lease term - operating leases
|
4.37 years
|
|
Weighted-average discount rate - finance leases
|
2.23
|
%
|
Weighted-average discount rate – operating leases
|
4.05
|
%
|
|
Operating Leases
|
|
Finance Leases
|
||||
2019 (excluding the three months ended March 31, 2019)
|
$
|
41.5
|
|
|
$
|
5.5
|
|
2020
|
48.4
|
|
|
6.3
|
|
||
2021
|
35.7
|
|
|
4.5
|
|
||
2022
|
24.5
|
|
|
2.7
|
|
||
2023
|
18.7
|
|
|
1.3
|
|
||
2024 and thereafter
|
18.6
|
|
|
12.9
|
|
||
Total minimum lease payments
|
$
|
187.4
|
|
|
$
|
33.2
|
|
Less imputed interest
|
(16.7
|
)
|
|
(4.6
|
)
|
||
Lease liability
|
$
|
170.7
|
|
|
$
|
28.6
|
|
|
Operating Leases
|
|
Capital Leases
|
||||
2019
|
$
|
47.4
|
|
|
$
|
6.6
|
|
2020
|
38.4
|
|
|
5.4
|
|
||
2021
|
27.2
|
|
|
3.8
|
|
||
2022
|
17.9
|
|
|
2.1
|
|
||
2023
|
12.7
|
|
|
0.9
|
|
||
Thereafter
|
16.1
|
|
|
12.8
|
|
||
Total minimum lease payments
|
$
|
159.7
|
|
|
$
|
31.6
|
|
Less amount representing interest
|
|
|
2.1
|
|
|||
Present value of minimum payments
|
|
|
$
|
29.5
|
|
|
As of March 31, 2019
|
|
As of December 31, 2018
|
||||
Accrued expenses
|
$
|
37.4
|
|
|
$
|
37.9
|
|
Other liabilities
|
76.4
|
|
|
73.7
|
|
||
Total warranty liability
|
$
|
113.8
|
|
|
$
|
111.6
|
|
Total warranty liability as of December 31, 2018
|
$
|
111.6
|
|
Warranty claims paid
|
(5.9
|
)
|
|
Changes resulting from issuance of new warranties
|
8.7
|
|
|
Warranty liability from divestitures
|
(0.6
|
)
|
|
Total warranty liability as of March 31, 2019
|
$
|
113.8
|
|
(Amounts in millions)
|
For the Three months Ended March 31, 2019
|
||
Insurance recoveries received
|
$
|
76.0
|
|
Less losses and expenses incurred:
|
|
||
Site clean-up and remediation
|
17.1
|
|
|
Factory inefficiencies due to lower productivity
|
4.0
|
|
|
Other
|
8.5
|
|
|
Total losses and expenses
|
$
|
29.6
|
|
Total gain from insurance recoveries
|
$
|
46.4
|
|
Presentation in the Consolidated Statements of Operations:
|
|
||
Gain from insurance recoveries, net of losses incurred
|
$
|
(6.9
|
)
|
Insurance proceeds for lost profits
|
$
|
(39.5
|
)
|
|
As of March 31, 2019
|
|
As of December 31, 2018
|
||||
Current maturities of long-term debt:
|
|
|
|
||||
Asset Securitization Program
|
$
|
224.5
|
|
|
$
|
268.0
|
|
Finance lease obligations
|
$
|
6.3
|
|
|
$
|
3.5
|
|
Domestic credit facility
|
7.5
|
|
|
30.0
|
|
||
Debt issuance costs
|
(0.7
|
)
|
|
(0.7
|
)
|
||
Total current maturities of long-term debt
|
$
|
237.6
|
|
|
$
|
300.8
|
|
Long-Term Debt:
|
|
|
|
||||
Finance lease obligations
|
22.3
|
|
|
15.7
|
|
||
Domestic credit facility
|
689.5
|
|
|
378.0
|
|
||
Senior unsecured notes
|
350.0
|
|
|
350.0
|
|
||
Debt issuance costs
|
(2.8
|
)
|
|
(3.2
|
)
|
||
Total long-term debt
|
$
|
1,059.0
|
|
|
$
|
740.5
|
|
Total debt
|
$
|
1,296.6
|
|
|
$
|
1,041.3
|
|
|
As of March 31, 2019
|
|
As of December 31, 2018
|
||||
Eligible amount available under the ASP on qualified accounts receivable
|
$
|
225.0
|
|
|
$
|
290.0
|
|
Less: Beneficial interest transferred
|
(224.5
|
)
|
|
(268.0
|
)
|
||
Remaining amount available
|
$
|
0.5
|
|
|
$
|
22.0
|
|
|
As of March 31, 2019
|
|
As of December 31, 2018
|
||
Weighted average borrowing rate
|
3.68
|
%
|
|
3.74
|
%
|
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 March 31,
|
||||||
|
2019
|
|
2018
|
||||
|
Pension Benefits
|
||||||
Service cost
|
$
|
1.2
|
|
|
$
|
1.4
|
|
Interest cost
|
3.5
|
|
|
3.1
|
|
||
Expected return on plan assets
|
(4.7
|
)
|
|
(4.7
|
)
|
||
Recognized actuarial loss
|
2.0
|
|
|
2.3
|
|
||
Net periodic benefit cost
|
$
|
2.0
|
|
|
$
|
2.1
|
|
|
For the Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Stock-based compensation expense (1)
|
$
|
5.2
|
|
|
$
|
4.8
|
|
|
|
For the Three Months Ended March 31,
|
|
Affected Line Item(s) in the Consolidated Statements of Operations
|
||||||
|
|
2019
|
|
2018
|
|
|||||
Gains/(Losses) on cash flow hedges:
|
|
|
|
|
|
|
||||
Commodity futures contracts/foreign exchange forward contracts
|
|
$
|
(2.4
|
)
|
|
$
|
4.6
|
|
|
Cost of goods sold
|
Income tax benefit (expense)
|
|
0.6
|
|
|
(1.1
|
)
|
|
Provision for income taxes
|
||
Net of tax
|
|
$
|
(1.8
|
)
|
|
$
|
3.5
|
|
|
|
|
|
|
|
|
|
|
||||
Defined Benefit Plan items:
|
|
|
|
|
|
|
||||
Pension and post-retirement benefit costs
|
|
$
|
(2.0
|
)
|
|
$
|
(2.3
|
)
|
|
Cost of goods sold; Selling, general and administrative expenses
|
Income tax benefit
|
|
0.5
|
|
|
0.6
|
|
|
Provision for income taxes
|
||
Net of tax
|
|
$
|
(1.5
|
)
|
|
$
|
(1.7
|
)
|
|
|
|
|
|
|
|
|
|
||||
Foreign Currency Translation Adjustments:
|
|
|
|
|
|
|
||||
Foreign currency adjustments upon sale of business
|
|
$
|
(2.1
|
)
|
|
$
|
—
|
|
|
Loss (gain), net on sale of businesses and related property
|
Net of tax
|
|
$
|
(2.1
|
)
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
||||
Total reclassifications from AOCL
|
|
$
|
(5.4
|
)
|
|
$
|
1.8
|
|
|
|
|
|
Gains (Losses) on Cash Flow Hedges
|
|
Defined Benefit Pension Plan Items
|
|
Foreign Currency Translation Adjustments
|
|
Total AOCL
|
||||||||
Balance as of December 31, 2018
|
|
$
|
(6.2
|
)
|
|
$
|
(154.5
|
)
|
|
$
|
(28.1
|
)
|
|
$
|
(188.8
|
)
|
Other comprehensive income (loss) before reclassifications
|
|
4.4
|
|
|
(1.7
|
)
|
|
0.5
|
|
|
3.2
|
|
||||
Amounts reclassified from AOCL
|
|
1.8
|
|
|
1.5
|
|
|
2.1
|
|
|
5.4
|
|
||||
Net other comprehensive (loss) income
|
|
6.2
|
|
|
(0.2
|
)
|
|
2.6
|
|
|
8.6
|
|
||||
Balance as of March 31, 2019
|
|
$
|
—
|
|
|
$
|
(154.7
|
)
|
|
$
|
(25.5
|
)
|
|
$
|
(180.2
|
)
|
|
Charges Incurred in 2019
|
|
Charges Incurred to Date
|
|
Total Charges Expected to be Incurred
|
||||||
Severance and related expense
|
$
|
0.6
|
|
|
$
|
13.6
|
|
|
$
|
14.0
|
|
Asset write-offs and accelerated depreciation
|
—
|
|
|
3.2
|
|
|
3.2
|
|
|||
Lease termination
|
(0.1
|
)
|
|
0.8
|
|
|
0.8
|
|
|||
Other
|
—
|
|
|
4.7
|
|
|
4.7
|
|
|||
Total restructuring charges
|
$
|
0.5
|
|
|
$
|
22.3
|
|
|
$
|
22.7
|
|
|
Charges Incurred in 2019
|
|
Charges Incurred to Date
|
|
Total Charges Expected to be Incurred
|
||||||
Residential Heating & Cooling
|
$
|
—
|
|
|
$
|
2.0
|
|
|
$
|
2.0
|
|
Commercial Heating & Cooling
|
(0.1
|
)
|
|
2.5
|
|
|
2.5
|
|
|||
Refrigeration
|
0.6
|
|
|
15.5
|
|
|
15.9
|
|
|||
Corporate & Other
|
—
|
|
|
2.3
|
|
|
2.3
|
|
|||
Total restructuring charges
|
$
|
0.5
|
|
|
$
|
22.3
|
|
|
$
|
22.7
|
|
(Amounts in millions)
|
For the Three Months Ended March 31, 2019
|
||
Cash received from the buyer
|
$
|
49.0
|
|
Net assets sold
|
(50.0
|
)
|
|
AOCI reclassification adjustments, primarily foreign currency translation
|
(2.1
|
)
|
|
Direct costs to sell
|
(5.4
|
)
|
|
Loss on sale of business
|
$
|
(8.5
|
)
|
(Amounts in millions)
|
For the Year Ended December 31, 2018
|
||
Cash received from the buyer
|
$
|
82.9
|
|
Net assets sold (1)
|
(87.2
|
)
|
|
AOCI reclassification adjustments, primarily foreign currency translation
|
(3.2
|
)
|
|
Direct costs to sell
|
(5.8
|
)
|
|
Loss on sale of business
|
$
|
(13.3
|
)
|
(Amounts in millions)
|
For the Year Ended December 31, 2018
|
||
Cash received from the buyer
|
$
|
4.2
|
|
Net assets sold (2)
|
(14.1
|
)
|
|
AOCI reclassification adjustments, primarily foreign currency translation
|
(24.7
|
)
|
|
Direct costs to sell
|
(2.9
|
)
|
|
Loss on sale of business
|
$
|
(37.5
|
)
|
|
For the Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Net income
|
$
|
69.3
|
|
|
$
|
37.9
|
|
Add: Loss from discontinued operations
|
0.1
|
|
|
—
|
|
||
Income from continuing operations
|
$
|
69.4
|
|
|
$
|
37.9
|
|
|
|
|
|
||||
Weighted-average shares outstanding – basic
|
39.7
|
|
|
41.5
|
|
||
Add: Potential effect of dilutive securities attributable to stock-based payments
|
0.4
|
|
|
0.6
|
|
||
Weighted-average shares outstanding – diluted
|
40.1
|
|
|
42.1
|
|
||
|
|
|
|
||||
Earnings per share – Basic:
|
|
|
|
||||
Income from continuing operations
|
$
|
1.75
|
|
|
$
|
0.91
|
|
Loss from discontinued operations
|
—
|
|
|
—
|
|
||
Net income
|
$
|
1.75
|
|
|
$
|
0.91
|
|
|
|
|
|
||||
Earnings per share – Diluted:
|
|
|
|
||||
Income from continuing operations
|
$
|
1.73
|
|
|
$
|
0.90
|
|
Loss from discontinued operations
|
—
|
|
|
—
|
|
||
Net income
|
$
|
1.73
|
|
|
$
|
0.90
|
|
|
For the Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Weighted-average number of shares
|
0.1
|
|
|
0.2
|
|
||
Price per share
|
$
|
214.63
|
|
|
$
|
205.53
|
|
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
Central America
South America
|
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(1)
Asia Pacific(2)
South America(2)
Central America
|
|
For the Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Net sales
|
|
|
|
||||
Residential Heating & Cooling
|
$
|
465.6
|
|
|
$
|
453.7
|
|
Commercial Heating & Cooling
|
173.3
|
|
|
179.1
|
|
||
Refrigeration
|
151.4
|
|
|
202.0
|
|
||
|
$
|
790.3
|
|
|
$
|
834.8
|
|
|
|
|
|
||||
Segment profit (loss) (1)
|
|
|
|
||||
Residential Heating & Cooling
|
$
|
86.7
|
|
|
$
|
51.3
|
|
Commercial Heating & Cooling
|
15.1
|
|
|
22.0
|
|
||
Refrigeration
|
8.4
|
|
|
8.7
|
|
||
Corporate and other
|
(12.1
|
)
|
|
(11.2
|
)
|
||
Total segment profit
|
98.1
|
|
|
70.8
|
|
||
Reconciliation to Operating income:
|
|
|
|
||||
Special inventory write down
|
—
|
|
|
0.1
|
|
||
Loss on sale of business
|
8.5
|
|
|
—
|
|
||
Loss on assets held for sale
|
—
|
|
|
10.3
|
|
||
Gain from insurance recoveries, net of losses incurred
|
(6.9
|
)
|
|
—
|
|
||
Items in losses (gains) and other expenses, net that are excluded from segment profit (loss) (1)
|
1.3
|
|
|
6.5
|
|
||
Restructuring charges
|
0.5
|
|
|
0.9
|
|
||
Operating income
|
$
|
94.7
|
|
|
$
|
53.0
|
|
•
|
The following items in Losses (gains) and other expenses, net:
|
◦
|
Net change in unrealized losses (gains) on unsettled futures contracts,
|
◦
|
Special legal contingency charges,
|
◦
|
Asbestos-related litigation,
|
◦
|
Environmental liabilities,
|
◦
|
Divestiture costs,
|
◦
|
Other items, net,
|
•
|
Special inventory write down,
|
•
|
Loss on sale of business,
|
•
|
Loss on assets held for sale,
|
•
|
Gain from insurance recoveries, net of losses incurred; and,
|
•
|
Restructuring charges.
|
|
As of March 31, 2019
|
|
As of December 31, 2018
|
||||
Total Assets:
|
|
|
|
||||
Residential Heating & Cooling
|
$
|
1,108.1
|
|
|
$
|
837.4
|
|
Commercial Heating & Cooling
|
371.0
|
|
|
349.5
|
|
||
Refrigeration
|
386.2
|
|
|
462.9
|
|
||
Corporate and other
|
240.4
|
|
|
167.4
|
|
||
Total assets
|
$
|
2,105.7
|
|
|
$
|
1,817.2
|
|
|
As of March 31, 2019
|
|
As of December 31, 2018
|
||||
Senior unsecured notes
|
$
|
314.1
|
|
|
$
|
302.9
|
|
(Amounts in millions)
|
Parent
|
|
Guarantor
Subsidiaries |
|
Non-Guarantor
Subsidiaries |
|
Eliminations
|
|
Consolidated
|
||||||||||
ASSETS
|
|||||||||||||||||||
Current Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
2.0
|
|
|
$
|
13.0
|
|
|
$
|
16.7
|
|
|
$
|
—
|
|
|
$
|
31.7
|
|
Accounts and notes receivable, net
|
—
|
|
|
64.2
|
|
|
438.4
|
|
|
—
|
|
|
502.6
|
|
|||||
Inventories, net
|
—
|
|
|
497.5
|
|
|
104.5
|
|
|
(1.9
|
)
|
|
600.1
|
|
|||||
Other assets
|
4.5
|
|
|
63.2
|
|
|
52.2
|
|
|
(33.4
|
)
|
|
86.5
|
|
|||||
Total current assets
|
6.5
|
|
|
637.9
|
|
|
611.8
|
|
|
(35.3
|
)
|
|
1,220.9
|
|
|||||
Property, plant and equipment, net
|
—
|
|
|
295.3
|
|
|
116.4
|
|
|
—
|
|
|
411.7
|
|
|||||
Right-of-use assets from operating leases
|
—
|
|
|
146.2
|
|
|
23.9
|
|
|
—
|
|
|
170.1
|
|
|||||
Goodwill
|
—
|
|
|
166.1
|
|
|
20.4
|
|
|
—
|
|
|
186.5
|
|
|||||
Investment in subsidiaries
|
1,367.2
|
|
|
454.9
|
|
|
50.2
|
|
|
(1,872.3
|
)
|
|
—
|
|
|||||
Deferred income taxes
|
(12.5
|
)
|
|
50.7
|
|
|
22.5
|
|
|
(12.2
|
)
|
|
48.5
|
|
|||||
Other assets, net
|
1.7
|
|
|
49.8
|
|
|
2.3
|
|
|
14.2
|
|
|
68.0
|
|
|||||
Intercompany (payables) receivables, net
|
(497.9
|
)
|
|
438.2
|
|
|
179.6
|
|
|
(119.9
|
)
|
|
—
|
|
|||||
Total assets
|
$
|
865.0
|
|
|
$
|
2,239.1
|
|
|
$
|
1,027.1
|
|
|
$
|
(2,025.5
|
)
|
|
$
|
2,105.7
|
|
LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY
|
|||||||||||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Current maturities of long-term debt
|
6.9
|
|
|
5.6
|
|
|
225.1
|
|
|
—
|
|
|
237.6
|
|
|||||
Current operating lease liabilities
|
—
|
|
|
41.7
|
|
|
6.4
|
|
|
—
|
|
|
48.1
|
|
|||||
Accounts payable
|
25.6
|
|
|
276.6
|
|
|
109.7
|
|
|
—
|
|
|
411.9
|
|
|||||
Accrued expenses
|
7.5
|
|
|
175.0
|
|
|
37.3
|
|
|
—
|
|
|
219.8
|
|
|||||
Income taxes (receivable) payable
|
(7.2
|
)
|
|
19.8
|
|
|
38.0
|
|
|
(50.6
|
)
|
|
—
|
|
|||||
Total current liabilities
|
32.8
|
|
|
518.7
|
|
|
416.5
|
|
|
(50.6
|
)
|
|
917.4
|
|
|||||
Long-term debt
|
1,036.7
|
|
|
21.7
|
|
|
0.6
|
|
|
—
|
|
|
1,059.0
|
|
|||||
Long-term operating lease liabilities
|
—
|
|
|
105.0
|
|
|
17.6
|
|
|
—
|
|
|
122.6
|
|
|||||
Pensions
|
—
|
|
|
76.5
|
|
|
5.8
|
|
|
—
|
|
|
82.3
|
|
|||||
Other liabilities
|
0.3
|
|
|
122.0
|
|
|
6.9
|
|
|
—
|
|
|
129.2
|
|
|||||
Total liabilities
|
1,069.8
|
|
|
843.9
|
|
|
447.4
|
|
|
(50.6
|
)
|
|
2,310.5
|
|
|||||
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
||||||||||
Total stockholders' (deficit) equity
|
(204.8
|
)
|
|
1,395.2
|
|
|
579.7
|
|
|
(1,974.9
|
)
|
|
(204.8
|
)
|
|||||
Total liabilities and stockholders' (deficit) equity
|
$
|
865.0
|
|
|
$
|
2,239.1
|
|
|
$
|
1,027.1
|
|
|
$
|
(2,025.5
|
)
|
|
$
|
2,105.7
|
|
(Amounts in millions)
|
Parent
|
|
Guarantor
Subsidiaries |
|
Non-
Guarantor Subsidiaries |
|
Eliminations
|
|
Consolidated
|
||||||||||
ASSETS
|
|||||||||||||||||||
Current Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
1.8
|
|
|
$
|
15.4
|
|
|
$
|
29.1
|
|
|
$
|
—
|
|
|
$
|
46.3
|
|
Accounts and notes receivable, net
|
—
|
|
|
44.3
|
|
|
428.4
|
|
|
—
|
|
|
472.7
|
|
|||||
Inventories, net
|
—
|
|
|
411.4
|
|
|
103.9
|
|
|
(5.5
|
)
|
|
509.8
|
|
|||||
Other assets
|
3.3
|
|
|
36.2
|
|
|
54.7
|
|
|
(33.6
|
)
|
|
60.6
|
|
|||||
Total current assets
|
5.1
|
|
|
507.3
|
|
|
616.1
|
|
|
(39.1
|
)
|
|
1,089.4
|
|
|||||
Property, plant and equipment, net
|
—
|
|
|
293.3
|
|
|
118.6
|
|
|
(3.6
|
)
|
|
408.3
|
|
|||||
Goodwill
|
—
|
|
|
166.1
|
|
|
20.5
|
|
|
—
|
|
|
186.6
|
|
|||||
Investment in subsidiaries
|
1,311.9
|
|
|
357.8
|
|
|
(0.5
|
)
|
|
(1,669.2
|
)
|
|
—
|
|
|||||
Deferred income taxes
|
1.4
|
|
|
54.4
|
|
|
23.4
|
|
|
(12.2
|
)
|
|
67.0
|
|
|||||
Other assets, net
|
1.5
|
|
|
48.1
|
|
|
17.8
|
|
|
(1.5
|
)
|
|
65.9
|
|
|||||
Intercompany (payables) receivables, net
|
(715.5
|
)
|
|
675.8
|
|
|
142.6
|
|
|
(102.9
|
)
|
|
—
|
|
|||||
Total assets
|
$
|
604.4
|
|
|
$
|
2,102.8
|
|
|
$
|
938.5
|
|
|
$
|
(1,828.5
|
)
|
|
$
|
1,817.2
|
|
LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY
|
|||||||||||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Short-term debt
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Current maturities of long-term debt
|
29.4
|
|
|
2.8
|
|
|
268.6
|
|
|
—
|
|
|
300.8
|
|
|||||
Accounts payable
|
25.5
|
|
|
295.7
|
|
|
112.1
|
|
|
—
|
|
|
433.3
|
|
|||||
Accrued expenses
|
12.1
|
|
|
213.8
|
|
|
46.4
|
|
|
—
|
|
|
272.3
|
|
|||||
Income taxes (receivable) payable
|
(38.5
|
)
|
|
40.6
|
|
|
50.8
|
|
|
(50.8
|
)
|
|
2.1
|
|
|||||
Total current liabilities
|
28.5
|
|
|
552.9
|
|
|
477.9
|
|
|
(50.8
|
)
|
|
1,008.5
|
|
|||||
Long-term debt
|
724.9
|
|
|
15.0
|
|
|
0.6
|
|
|
—
|
|
|
740.5
|
|
|||||
Pensions
|
—
|
|
|
75.1
|
|
|
7.7
|
|
|
—
|
|
|
82.8
|
|
|||||
Other liabilities
|
0.6
|
|
|
126.4
|
|
|
8.0
|
|
|
—
|
|
|
135.0
|
|
|||||
Total liabilities
|
754.0
|
|
|
769.4
|
|
|
494.2
|
|
|
(50.8
|
)
|
|
1,966.8
|
|
|||||
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
||||||||||
Total stockholders' (deficit) equity
|
(149.6
|
)
|
|
1,333.4
|
|
|
444.3
|
|
|
(1,777.7
|
)
|
|
(149.6
|
)
|
|||||
Total liabilities and stockholders' (deficit) equity
|
$
|
604.4
|
|
|
$
|
2,102.8
|
|
|
$
|
938.5
|
|
|
$
|
(1,828.5
|
)
|
|
$
|
1,817.2
|
|
(Amounts in millions)
|
Parent
|
|
Guarantor
Subsidiaries |
|
Non-Guarantor
Subsidiaries |
|
Eliminations
|
|
Consolidated
|
||||||||||
Net Sales
|
$
|
—
|
|
|
$
|
722.9
|
|
|
$
|
121.2
|
|
|
$
|
(53.8
|
)
|
|
$
|
790.3
|
|
Cost of goods sold
|
—
|
|
|
530.8
|
|
|
51.1
|
|
|
6.8
|
|
|
588.7
|
|
|||||
Gross profit
|
—
|
|
|
192.1
|
|
|
70.1
|
|
|
(60.6
|
)
|
|
201.6
|
|
|||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Selling, general and administrative expenses
|
—
|
|
|
136.5
|
|
|
9.5
|
|
|
(0.2
|
)
|
|
145.8
|
|
|||||
Losses (gains) and other expenses, net
|
(0.6
|
)
|
|
1.7
|
|
|
0.1
|
|
|
(0.1
|
)
|
|
1.1
|
|
|||||
Restructuring charges
|
—
|
|
|
0.3
|
|
|
0.2
|
|
|
—
|
|
|
0.5
|
|
|||||
Loss on sale of business
|
—
|
|
|
0.8
|
|
|
7.7
|
|
|
—
|
|
|
8.5
|
|
|||||
Insurance proceeds for lost profits
|
—
|
|
|
(39.5
|
)
|
|
—
|
|
|
—
|
|
|
(39.5
|
)
|
|||||
Gain from insurance recoveries, net of losses incurred
|
—
|
|
|
(6.9
|
)
|
|
—
|
|
|
—
|
|
|
(6.9
|
)
|
|||||
Income from equity method investments
|
(70.6
|
)
|
|
(41.1
|
)
|
|
(2.0
|
)
|
|
111.1
|
|
|
(2.6
|
)
|
|||||
Operating income
|
71.2
|
|
|
140.3
|
|
|
54.6
|
|
|
(171.4
|
)
|
|
94.7
|
|
|||||
Interest expense, net
|
2.4
|
|
|
6.1
|
|
|
2.4
|
|
|
—
|
|
|
10.9
|
|
|||||
Other (income) expense, net
|
—
|
|
|
(5.8
|
)
|
|
6.6
|
|
|
—
|
|
|
0.8
|
|
|||||
Income (loss) from continuing operations before income taxes
|
68.8
|
|
|
140.0
|
|
|
45.6
|
|
|
(171.4
|
)
|
|
83.0
|
|
|||||
Provision for income tax (benefit) expense
|
(0.5
|
)
|
|
10.1
|
|
|
4.2
|
|
|
(0.2
|
)
|
|
13.6
|
|
|||||
Income (loss) from continuing operations
|
69.3
|
|
|
129.9
|
|
|
41.4
|
|
|
(171.2
|
)
|
|
69.4
|
|
|||||
Loss from discontinued operations, net of tax
|
—
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
0.1
|
|
|||||
Net income (loss)
|
$
|
69.3
|
|
|
$
|
129.9
|
|
|
$
|
41.3
|
|
|
$
|
(171.2
|
)
|
|
$
|
69.3
|
|
Other comprehensive income, net of tax
|
6.4
|
|
|
0.4
|
|
|
1.8
|
|
|
—
|
|
|
8.6
|
|
|||||
Comprehensive income (loss)
|
$
|
75.7
|
|
|
$
|
130.3
|
|
|
$
|
43.1
|
|
|
$
|
(171.2
|
)
|
|
$
|
77.9
|
|
(Amounts in millions)
|
Parent
|
|
Guarantor
Subsidiaries |
|
Non-Guarantor
Subsidiaries |
|
Eliminations
|
|
Consolidated
|
||||||||||
Net Sales
|
$
|
—
|
|
|
$
|
716.3
|
|
|
$
|
279.0
|
|
|
$
|
(160.5
|
)
|
|
$
|
834.8
|
|
Cost of goods sold
|
—
|
|
|
533.4
|
|
|
236.5
|
|
|
(158.3
|
)
|
|
611.6
|
|
|||||
Gross profit
|
—
|
|
|
182.9
|
|
|
42.5
|
|
|
(2.2
|
)
|
|
223.2
|
|
|||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Selling, general and administrative expenses
|
—
|
|
|
133.7
|
|
|
21.7
|
|
|
(0.2
|
)
|
|
155.2
|
|
|||||
Losses (gains) and other expenses, net
|
1.2
|
|
|
4.0
|
|
|
2.2
|
|
|
(0.1
|
)
|
|
7.3
|
|
|||||
Restructuring charges
|
—
|
|
|
0.7
|
|
|
0.2
|
|
|
—
|
|
|
0.9
|
|
|||||
Loss on assets held for sale
|
—
|
|
|
—
|
|
|
10.3
|
|
|
—
|
|
|
10.3
|
|
|||||
Income from equity method investments
|
(40.6
|
)
|
|
(4.6
|
)
|
|
(3.0
|
)
|
|
44.7
|
|
|
(3.5
|
)
|
|||||
Operating income
|
39.4
|
|
|
49.1
|
|
|
11.1
|
|
|
(46.6
|
)
|
|
53.0
|
|
|||||
Interest expense, net
|
2.4
|
|
|
4.1
|
|
|
1.9
|
|
|
—
|
|
|
8.4
|
|
|||||
Other expense, net
|
—
|
|
|
0.6
|
|
|
—
|
|
|
—
|
|
|
0.6
|
|
|||||
Income (loss) from continuing operations before income taxes
|
37.0
|
|
|
44.4
|
|
|
9.2
|
|
|
(46.6
|
)
|
|
44.0
|
|
|||||
Provision for income tax (benefit) expense
|
(0.9
|
)
|
|
5.5
|
|
|
1.3
|
|
|
0.2
|
|
|
6.1
|
|
|||||
Income (loss) from continuing operations
|
37.9
|
|
|
38.9
|
|
|
7.9
|
|
|
(46.8
|
)
|
|
37.9
|
|
|||||
Loss from discontinued operations, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net income (loss)
|
$
|
37.9
|
|
|
$
|
38.9
|
|
|
$
|
7.9
|
|
|
$
|
(46.8
|
)
|
|
$
|
37.9
|
|
Other comprehensive (loss) income, net of tax
|
(7.1
|
)
|
|
(20.7
|
)
|
|
3.9
|
|
|
—
|
|
|
(23.9
|
)
|
|||||
Comprehensive income (loss)
|
$
|
30.8
|
|
|
$
|
18.2
|
|
|
$
|
11.8
|
|
|
$
|
(46.8
|
)
|
|
$
|
14.0
|
|
(Amounts in millions)
|
Parent
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Cash flows provided by (used in) operating activities
|
$
|
49.9
|
|
|
$
|
(258.3
|
)
|
|
$
|
67.4
|
|
|
$
|
—
|
|
|
$
|
(141.0
|
)
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Proceeds from the disposal of property, plant and equipment
|
—
|
|
|
0.3
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
|||||
Purchases of property, plant and equipment
|
—
|
|
|
(33.5
|
)
|
|
(3.7
|
)
|
|
—
|
|
|
(37.2
|
)
|
|||||
Net proceeds from sale of business
|
—
|
|
|
43.0
|
|
|
0.6
|
|
|
—
|
|
|
43.6
|
|
|||||
Insurance recoveries received for property damage incurred from natural disaster
|
|
|
|
6.9
|
|
|
—
|
|
|
—
|
|
|
6.9
|
|
|||||
Net cash provided by (used in) by investing activities
|
—
|
|
|
16.7
|
|
|
(3.1
|
)
|
|
—
|
|
|
13.6
|
|
|||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Asset securitization payments
|
|
|
|
|
|
|
(43.5
|
)
|
|
—
|
|
|
(43.5
|
)
|
|||||
Long-term debt payments
|
(30.0
|
)
|
|
(0.5
|
)
|
|
(1.2
|
)
|
|
—
|
|
|
(31.7
|
)
|
|||||
Long-term borrowings
|
—
|
|
|
2.7
|
|
|
0.6
|
|
|
—
|
|
|
3.3
|
|
|||||
Borrowings from credit facility
|
844.5
|
|
|
|
|
|
|
|
|
—
|
|
|
844.5
|
|
|||||
Payments on credit facility
|
(525.5
|
)
|
|
|
|
|
|
|
|
—
|
|
|
(525.5
|
)
|
|||||
Proceeds from employee stock purchases
|
0.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.8
|
|
|||||
Repurchases of common stock
|
(100.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(100.0
|
)
|
|||||
Repurchases of common stock to satisfy employee withholding tax obligations
|
(13.5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(13.5
|
)
|
|||||
Intercompany debt
|
(7.9
|
)
|
|
(0.2
|
)
|
|
8.1
|
|
|
—
|
|
|
—
|
|
|||||
Intercompany financing activity
|
(192.6
|
)
|
|
237.2
|
|
|
(44.6
|
)
|
|
—
|
|
|
—
|
|
|||||
Cash dividends paid
|
(25.5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(25.5
|
)
|
|||||
Net cash (used in) provided by financing activities
|
(49.7
|
)
|
|
239.2
|
|
|
(80.6
|
)
|
|
—
|
|
|
108.9
|
|
|||||
Increase (decrease) in cash and cash equivalents
|
0.2
|
|
|
(2.4
|
)
|
|
(16.3
|
)
|
|
—
|
|
|
(18.5
|
)
|
|||||
Effect of exchange rates on cash and cash equivalents
|
—
|
|
|
—
|
|
|
3.9
|
|
|
—
|
|
|
3.9
|
|
|||||
Cash and cash equivalents, beginning of period
|
1.8
|
|
|
15.4
|
|
|
29.1
|
|
|
—
|
|
|
46.3
|
|
|||||
Cash and cash equivalents, end of period
|
$
|
2.0
|
|
|
$
|
13.0
|
|
|
$
|
16.7
|
|
|
$
|
—
|
|
|
$
|
31.7
|
|
(Amounts in millions)
|
Parent
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Cash flows provided by (used in) operating activities
|
$
|
104.4
|
|
|
$
|
(158.6
|
)
|
|
$
|
(29.3
|
)
|
|
$
|
—
|
|
|
$
|
(83.5
|
)
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Proceeds from the disposal of property, plant and equipment
|
—
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
0.1
|
|
|||||
Purchases of property, plant and equipment
|
—
|
|
|
(17.3
|
)
|
|
(5.4
|
)
|
|
—
|
|
|
(22.7
|
)
|
|||||
Net cash used in investing activities
|
—
|
|
|
(17.3
|
)
|
|
(5.3
|
)
|
|
—
|
|
|
(22.6
|
)
|
|||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Short-term borrowings, net
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|
—
|
|
|
(0.1
|
)
|
|||||
Asset securitization payments
|
—
|
|
|
—
|
|
|
(51.0
|
)
|
|
—
|
|
|
(51.0
|
)
|
|||||
Long-term debt payments
|
(7.5
|
)
|
|
(2.7
|
)
|
|
—
|
|
|
—
|
|
|
(10.2
|
)
|
|||||
Borrowings from credit facility
|
790.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
790.0
|
|
|||||
Payments on credit facility
|
(444.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(444.1
|
)
|
|||||
Proceeds from employee stock purchases
|
0.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.8
|
|
|||||
Repurchases of common stock
|
(150.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(150.0
|
)
|
|||||
Repurchases of common stock to satisfy employee withholding tax obligations
|
(18.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(18.1
|
)
|
|||||
Intercompany debt
|
(47.5
|
)
|
|
37.9
|
|
|
9.6
|
|
|
—
|
|
|
—
|
|
|||||
Intercompany financing activity
|
(206.9
|
)
|
|
127.7
|
|
|
79.2
|
|
|
—
|
|
|
—
|
|
|||||
Cash dividends paid
|
(21.3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(21.3
|
)
|
|||||
Net cash (used in) provided by financing activities
|
(104.6
|
)
|
|
162.9
|
|
|
37.7
|
|
|
—
|
|
|
96.0
|
|
|||||
(Decrease) increase in cash and cash equivalents
|
(0.2
|
)
|
|
(13.0
|
)
|
|
3.1
|
|
|
—
|
|
|
(10.1
|
)
|
|||||
Effect of exchange rates on cash and cash equivalents
|
—
|
|
|
—
|
|
|
(1.0
|
)
|
|
—
|
|
|
(1.0
|
)
|
|||||
Cash and cash equivalents, beginning of period
|
1.6
|
|
|
28.0
|
|
|
38.6
|
|
|
—
|
|
|
68.2
|
|
|||||
Cash and cash equivalents, end of period
|
$
|
1.4
|
|
|
$
|
15.0
|
|
|
$
|
40.7
|
|
|
$
|
—
|
|
|
$
|
57.1
|
|
•
|
Net sales decreased $45 million, or 5%, to $790 million in the first quarter of 2019 primarily due to the sale of our Australia, New Zealand, Asia and Brazil businesses in the second and third quarters of 2018.
|
•
|
Operating income in the first quarter of 2019 increased $42 million to $95 million, including $40 million of insurance proceeds for lost profits.
|
•
|
Net income for the first quarter of 2019 increased $31 million to $69 million.
|
•
|
Diluted earnings per share from continuing operations were $1.73 per share in the first quarter of 2019 compared to $0.90 per share in the first quarter of 2018.
|
•
|
During the three months ended March 31, 2019, we returned $26 million to shareholders through dividend payments and have repurchased $100 million of common stock. We also received $44 million in net proceeds from the sale of our Kysor Warren business.
|
|
For the Three Months Ended March 31,
|
|||||||||||||||
|
Dollars (in millions)
|
|
Percent
Change Fav/(Unfav) |
|
Percent of Sales
|
|||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|||||||||
Net sales
|
$
|
790.3
|
|
|
$
|
834.8
|
|
|
(5.3
|
)%
|
|
100.0
|
%
|
|
100.0
|
%
|
Cost of goods sold
|
588.7
|
|
|
611.6
|
|
|
3.7
|
|
|
74.5
|
|
|
73.3
|
|
||
Gross profit
|
201.6
|
|
|
223.2
|
|
|
(9.7
|
)
|
|
25.5
|
|
|
26.7
|
|
||
Selling, general and administrative expenses
|
145.8
|
|
|
155.2
|
|
|
6.1
|
|
|
18.4
|
|
|
18.6
|
|
||
Losses (gains) and other expenses, net
|
1.1
|
|
|
7.3
|
|
|
84.9
|
|
|
0.1
|
|
|
0.9
|
|
||
Restructuring charges
|
0.5
|
|
|
0.9
|
|
|
44.4
|
|
|
0.1
|
|
|
0.1
|
|
||
Loss on sale of business
|
8.5
|
|
|
—
|
|
|
N/A
|
|
1.1
|
|
|
—
|
|
|||
Loss on assets held for sale
|
—
|
|
|
10.3
|
|
|
N/A
|
|
—
|
|
|
1.2
|
|
|||
Insurance proceeds for lost profits
|
(39.5
|
)
|
|
—
|
|
|
N/A
|
|
(5.0
|
)
|
|
—
|
|
|||
Gain from insurance recoveries, net of losses incurred
|
(6.9
|
)
|
|
—
|
|
|
N/A
|
|
(0.9
|
)
|
|
—
|
|
|||
Income from equity method investments
|
(2.6
|
)
|
|
(3.5
|
)
|
|
(25.7
|
)
|
|
(0.3
|
)
|
|
(0.4
|
)
|
||
Operating income
|
$
|
94.7
|
|
|
$
|
53.0
|
|
|
78.7
|
%
|
|
12.0
|
%
|
|
6.3
|
%
|
|
For the Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Realized losses (gains) on settled future contracts
|
$
|
0.1
|
|
|
$
|
(0.5
|
)
|
Foreign currency exchange losses (gains)
|
(0.5
|
)
|
|
1.3
|
|
||
Loss on disposal of fixed assets
|
0.2
|
|
|
—
|
|
||
Net change in unrealized losses (gains) on unsettled futures contracts
|
(0.4
|
)
|
|
1.1
|
|
||
Special legal contingency charges
|
0.2
|
|
|
0.2
|
|
||
Asbestos-related litigation
|
1.4
|
|
|
2.1
|
|
||
Environmental liabilities
|
—
|
|
|
0.3
|
|
||
Divestiture costs
|
—
|
|
|
2.5
|
|
||
Other items, net
|
0.1
|
|
|
0.3
|
|
||
Losses (gains) and other expenses, net (pre-tax)
|
$
|
1.1
|
|
|
$
|
7.3
|
|
|
For the Three Months Ended March 31,
|
|
|
|
|
|||||||||
|
2019
|
|
2018
|
|
Difference
|
|
% Change
|
|||||||
Net sales
|
$
|
465.6
|
|
|
$
|
453.7
|
|
|
$
|
11.9
|
|
|
2.6
|
%
|
Profit
|
$
|
86.7
|
|
|
$
|
51.3
|
|
|
$
|
35.4
|
|
|
69.0
|
%
|
% of net sales
|
18.6
|
%
|
|
11.3
|
%
|
|
|
|
|
|
For the Three Months Ended March 31,
|
|
|
|
|
|||||||||
|
2019
|
|
2018
|
|
Difference
|
|
% Change
|
|||||||
Net sales
|
$
|
173.3
|
|
|
$
|
179.1
|
|
|
$
|
(5.8
|
)
|
|
(3.2
|
)%
|
Profit
|
$
|
15.1
|
|
|
$
|
22.0
|
|
|
$
|
(6.9
|
)
|
|
(31.4
|
)%
|
% of net sales
|
8.7
|
%
|
|
12.3
|
%
|
|
|
|
|
|
For the Three Months Ended March 31,
|
|
|
|
|
|||||||||
|
2019
|
|
2018
|
|
Difference
|
|
% Change
|
|||||||
Net sales
|
$
|
151.4
|
|
|
$
|
202.0
|
|
|
$
|
(50.6
|
)
|
|
(25.0
|
)%
|
Profit
|
$
|
8.4
|
|
|
$
|
8.7
|
|
|
$
|
(0.3
|
)
|
|
(3.4
|
)%
|
% of net sales
|
5.5
|
%
|
|
4.3
|
%
|
|
|
|
|
|
For the Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Net cash used in operating activities
|
$
|
(141.0
|
)
|
|
$
|
(83.5
|
)
|
Net cash provided by (used in) investing activities
|
13.6
|
|
|
(22.6
|
)
|
||
Net cash provided by financing activities
|
108.9
|
|
|
96.0
|
|
|
Outstanding Borrowings
|
||
Current maturities of long-term debt:
|
|
||
Asset Securitization Program
|
$
|
224.5
|
|
Capital lease obligations
|
$
|
6.3
|
|
Domestic credit facility(1)
|
7.5
|
|
|
Debt issuance costs
|
(0.7
|
)
|
|
Total current maturities of long-term debt
|
$
|
237.6
|
|
Long-term debt:
|
|
||
Asset Securitization Program (2)
|
—
|
|
|
Capital lease obligations
|
22.3
|
|
|
Domestic credit facility(1)
|
689.5
|
|
|
Senior unsecured notes
|
350.0
|
|
|
Debt issuance costs
|
(2.8
|
)
|
|
Total long-term debt
|
1,059.0
|
|
|
Total debt
|
$
|
1,296.6
|
|
|
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)
|
|||||
January 1 through February 2
|
1,377
|
|
|
$
|
221.40
|
|
|
—
|
|
|
445.8
|
|
February 3 through February 23
|
423,103
|
|
|
243.90
|
|
|
410,085
|
|
|
345.8
|
|
|
February 24 through March 30
|
40,024
|
|
|
250.21
|
|
|
—
|
|
|
345.8
|
|
|
|
464,504
|
|
|
|
|
410,085
|
|
|
|
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
|
|
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).
|
4.2
|
|
4.3
|
|
4.4
|
|
4.5
|
|
4.6
|
|
10.1
|
|
31.1
|
|
31.2
|
|
32.1
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Lennox International Inc.;
|
2.
|
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;
|
3.
|
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;
|
4.
|
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:
|
(a)
|
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;
|
(b)
|
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;
|
(c)
|
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
|
(d)
|
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
|
5.
|
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):
|
(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
|
(b)
|
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.
|
|
/s/ Todd M. Bluedorn
|
|
Todd M. Bluedorn
|
|
Chief Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Lennox International Inc.;
|
2.
|
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;
|
3.
|
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;
|
4.
|
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:
|
(a)
|
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;
|
(b)
|
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;
|
(c)
|
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
|
(d)
|
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
|
5.
|
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):
|
(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
|
(b)
|
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.
|
|
/s/ Joseph W. Reitmeier
|
|
Joseph W. Reitmeier
|
|
Chief Financial Officer
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
|
|
|
/s/ Todd M. Bluedorn
|
|
Todd M. Bluedorn
|
|
Chief Executive Officer
|
|
|
|
|
|
/s/ Joseph W. Reitmeier
|
|
Joseph W. Reitmeier
|
|
Chief Financial Officer
|
|