Condensed Consolidating Financial Statements | 6 Months Ended |
Jun. 30, 2014 |
Condensed Consolidating Financial Statements [Abstract] | ' |
Condensed Consolidating Financial Statements | ' |
Condensed Consolidating Financial Statements: |
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The Company’s senior unsecured notes are unconditionally guaranteed by certain of the Company’s subsidiaries (the “Guarantor |
Subsidiaries”) and are not secured by our other subsidiaries (the “Non-Guarantor Subsidiaries”). The Guarantor Subsidiaries are 100% owned, all guarantees are full and unconditional, and all guarantees are joint and several. As a result of the guarantee arrangements, we are required to present the following condensed consolidating financial statements. |
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The condensed consolidating financial statements reflect the investments in subsidiaries of the Company using the equity method of accounting. The principal elimination entries eliminate investments in subsidiaries and intercompany balances and transactions. Condensed consolidating financial statements of the Company, its Guarantor Subsidiaries and Non-Guarantor Subsidiaries as of June 30, 2014 and December 31, 2013 and for the three and six months ended June 30, 2014 and 2013 are shown on the following pages. |
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Lennox International Inc. and Subsidiaries |
Condensed Consolidating Balance Sheets |
As of June 30, 2014 |
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(Amounts in millions) | Parent | | Guarantor | | Non-Guarantor | | Eliminations | | Consolidated |
Subsidiaries | Subsidiaries |
ASSETS |
Current Assets: | | | | | | | | | |
Cash and cash equivalents | $ | 0.9 | | | $ | 19.1 | | | $ | 29.6 | | | $ | — | | | $ | 49.6 | |
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Accounts and notes receivable, net | — | | | 19.8 | | | 556.7 | | | — | | | 576.5 | |
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Inventories, net | — | | | 376.3 | | | 144.1 | | | (5.5 | ) | | 514.9 | |
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Deferred income taxes, net | (0.4 | ) | | 21.2 | | | 6 | | | (3.3 | ) | | 23.5 | |
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Other assets | 3.5 | | | 46.7 | | | 75.6 | | | (67.6 | ) | | 58.2 | |
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Total current assets | 4 | | | 483.1 | | | 812 | | | (76.4 | ) | | 1,222.70 | |
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Property, plant and equipment, net | — | | | 252.6 | | | 97.9 | | | — | | | 350.5 | |
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Goodwill | — | | | 140.4 | | | 79.3 | | | — | | | 219.7 | |
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Investment in subsidiaries | 1,276.00 | | | 468.4 | | | (0.5 | ) | | (1,743.9 | ) | | — | |
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Deferred income taxes | 1 | | | 73.7 | | | 20.3 | | | (8.6 | ) | | 86.4 | |
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Other assets, net | 3.9 | | | 64.6 | | | 23.7 | | | (1.4 | ) | | 90.8 | |
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Intercompany receivables (payables), net | (305.2 | ) | | 299.4 | | | 5.8 | | | | | | — | |
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Total assets | $ | 979.7 | | | $ | 1,782.20 | | | $ | 1,038.50 | | | $ | (1,830.3 | ) | | $ | 1,970.10 | |
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
Current liabilities: | | | | | | | | | |
Short-term debt | $ | — | | | $ | — | | | $ | 185.6 | | | $ | — | | | $ | 185.6 | |
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Current maturities of long-term debt | — | | | 0.9 | | | 0.4 | | | — | | | 1.3 | |
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Accounts payable | 14.6 | | | 300.3 | | | 86 | | | — | | | 400.9 | |
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Accrued expenses | 3 | | | 169.1 | | | 64.7 | | | (0.2 | ) | | 236.6 | |
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Income taxes payable | 40.7 | | | 2.3 | | | 53 | | | (73.1 | ) | | 22.9 | |
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Total current liabilities | 58.3 | | | 472.6 | | | 389.7 | | | (73.3 | ) | | 847.3 | |
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Long-term debt | 403 | | | 16.5 | | | 0.3 | | | — | | | 419.8 | |
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Post-retirement benefits, other than pensions | — | | | 3.3 | | | — | | | — | | | 3.3 | |
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Pensions | — | | | 50.4 | | | 10.3 | | | — | | | 60.7 | |
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Other liabilities | 0.4 | | | 120.6 | | | 11.8 | | | (11.8 | ) | | 121 | |
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Total liabilities | 461.7 | | | 663.4 | | | 412.1 | | | (85.1 | ) | | 1,452.10 | |
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Commitments and contingencies | | | | | | | | | |
Total stockholders' equity | 518 | | | 1,118.80 | | | 626.4 | | | (1,745.2 | ) | | 518 | |
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Total liabilities and stockholders' equity | $ | 979.7 | | | $ | 1,782.20 | | | $ | 1,038.50 | | | $ | (1,830.3 | ) | | $ | 1,970.10 | |
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Lennox International Inc. and Subsidiaries |
Condensed Consolidating Balance Sheets |
As of December 31, 2013 |
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(Amounts in millions) | Parent | | Guarantor | | Non- | | Eliminations | | Consolidated |
Subsidiaries | Guarantor |
| Subsidiaries |
ASSETS |
Current Assets: | | | | | | | | | |
Cash and cash equivalents | $ | 1.1 | | | $ | 10.5 | | | $ | 26.4 | | | $ | — | | | $ | 38 | |
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Accounts and notes receivable, net | — | | | 12.8 | | | 395.3 | | | — | | | 408.1 | |
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Inventories, net | — | | | 253.6 | | | 128.4 | | | (3.2 | ) | | 378.8 | |
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Deferred income taxes, net | 0.9 | | | 21.2 | | | 5.7 | | | (3.3 | ) | | 24.5 | |
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Other assets | 3.4 | | | 38.4 | | | 70.2 | | | (59.0 | ) | | 53 | |
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Total current assets | 5.4 | | | 336.5 | | | 626 | | | (65.5 | ) | | 902.4 | |
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Property, plant and equipment, net | — | | | 246.4 | | | 89.1 | | | — | | | 335.5 | |
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Goodwill | — | | | 140.4 | | | 76.4 | | | — | | | 216.8 | |
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Investment in subsidiaries | 1,138.80 | | | 337.5 | | | (0.6 | ) | | (1,475.7 | ) | | — | |
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Deferred income taxes | — | | | 76.9 | | | 20.2 | | | (8.6 | ) | | 88.5 | |
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Other assets, net | 4.2 | | | 64.3 | | | 16.4 | | | (1.4 | ) | | 83.5 | |
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Intercompany receivables (payables), net | (460.6 | ) | | 434 | | | 26.6 | | | — | | | — | |
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Total assets | $ | 687.8 | | | $ | 1,636.00 | | | $ | 854.1 | | | $ | (1,551.2 | ) | | $ | 1,626.70 | |
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
Current liabilities: | | | | | | | | | |
Short-term debt | $ | — | | | $ | — | | | $ | 165.9 | | | $ | — | | | $ | 165.9 | |
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Current maturities of long-term debt | — | | | 1 | | | 0.3 | | | — | | | 1.3 | |
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Accounts payable | 11.8 | | | 187.8 | | | 83.5 | | | — | | | 283.1 | |
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Accrued expenses | 3.3 | | | 168.4 | | | 60.4 | | | — | | | 232.1 | |
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Income taxes payable | (30.3 | ) | | 75.7 | | | 49.9 | | | (63.7 | ) | | 31.6 | |
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Total current liabilities | (15.2 | ) | | 432.9 | | | 360 | | | (63.7 | ) | | 714 | |
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Long-term debt | 217 | | | 15.8 | | | 0.4 | | | — | | | 233.2 | |
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Post-retirement benefits, other than pensions | — | | | 4.6 | | | — | | | — | | | 4.6 | |
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Pensions | — | | | 58.4 | | | 11.6 | | | — | | | 70 | |
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Other liabilities | 0.3 | | | 119.4 | | | 11.3 | | | (11.8 | ) | | 119.2 | |
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Total liabilities | 202.1 | | | 631.1 | | | 383.3 | | | (75.5 | ) | | 1,141.00 | |
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Commitments and contingencies | | | | | | | | | |
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Total stockholders' equity | 485.7 | | | 1,004.90 | | | 470.8 | | | (1,475.7 | ) | | 485.7 | |
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Total liabilities and stockholders' equity | $ | 687.8 | | | $ | 1,636.00 | | | $ | 854.1 | | | $ | (1,551.2 | ) | | $ | 1,626.70 | |
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Lennox International Inc. and Subsidiaries |
Condensed Consolidating Statements of Operations and Comprehensive Income |
For the Three Months Ended June 30, 2014 |
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(Amounts in millions) | Parent | | Guarantor | | Non-Guarantor | | Eliminations | | Consolidated |
Subsidiaries | Subsidiaries |
Net Sales | $ | — | | | $ | 793.6 | | | $ | 210.4 | | | $ | (43.3 | ) | | $ | 960.7 | |
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Cost of goods sold | — | | | 583 | | | 157 | | | (41.9 | ) | | 698.1 | |
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Gross profit | — | | | 210.6 | | | 53.4 | | | (1.4 | ) | | 262.6 | |
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Operating expenses: | | | | | | | | | |
Selling, general and administrative expenses | — | | | 131.2 | | | 17.7 | | | — | | | 148.9 | |
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Losses (gains) and other expenses, net | (1.1 | ) | | 0.3 | | | (0.2 | ) | | — | | | (1.0 | ) |
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Restructuring charges | — | | | 0.1 | | | 0.1 | | | — | | | 0.2 | |
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Income from equity method investments | (75.5 | ) | | (12.1 | ) | | (4.0 | ) | | 87 | | | (4.6 | ) |
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Operational income from continuing operations | 76.6 | | | 91.1 | | | 39.8 | | | (88.4 | ) | | 119.1 | |
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Interest expense, net | 3.5 | | | (0.9 | ) | | 1.1 | | | — | | | 3.7 | |
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Other expense, net | — | | | — | | | — | | | — | | | — | |
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Income from continuing operations before income taxes | 73.1 | | | 92 | | | 38.7 | | | (88.4 | ) | | 115.4 | |
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Provision for income taxes | (0.8 | ) | | 28.1 | | | 13.9 | | | (0.4 | ) | | 40.8 | |
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Income from continuing operations | 73.9 | | | 63.9 | | | 24.8 | | | (88.0 | ) | | 74.6 | |
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Loss from discontinued operations | — | | | — | | | (0.7 | ) | | — | | | (0.7 | ) |
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Net income | $ | 73.9 | | | $ | 63.9 | | | $ | 24.1 | | | $ | (88.0 | ) | | $ | 73.9 | |
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Other comprehensive income, net of tax | 10.2 | | | 1.6 | | | 4.1 | | | (5.7 | ) | | 10.2 | |
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Comprehensive income | $ | 84.1 | | | $ | 65.5 | | | $ | 28.2 | | | $ | (93.7 | ) | | $ | 84.1 | |
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Lennox International Inc. and Subsidiaries |
Condensed Consolidating Statements of Operations and Comprehensive Income |
For the Six Months Ended June 30, 2014 |
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(Amounts in millions) | Parent | | Guarantor | | Non-Guarantor | | Eliminations | | Consolidated |
Subsidiaries | Subsidiaries |
Net Sales | $ | — | | | $ | 1,352.80 | | | $ | 393 | | | $ | (89.7 | ) | | $ | 1,656.10 | |
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Cost of goods sold | — | | | 1,016.30 | | | 296.4 | | | (87.3 | ) | | 1,225.40 | |
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Gross profit | — | | | 336.5 | | | 96.6 | | | (2.4 | ) | | 430.7 | |
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Operating expenses: | | | | | | | | | |
Selling, general and administrative expenses | — | | | 235.5 | | | 49 | | | — | | | 284.5 | |
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Losses (gains) and other expenses, net | (0.2 | ) | | 1.1 | | | 0.5 | | | | | | 1.4 | |
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Restructuring charges | — | | | 0.1 | | | 0.2 | | | — | | | 0.3 | |
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Income from equity method investments | (97.9 | ) | | (14.6 | ) | | (7.1 | ) | | 111.1 | | | (8.5 | ) |
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Operational income from continuing operations | 98.1 | | | 114.4 | | | 54 | | | (113.5 | ) | | 153 | |
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Interest expense, net | 6.5 | | | (1.5 | ) | | 2 | | | — | | | 7 | |
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Other expense, net | — | | | — | | | — | | | — | | | — | |
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Income from continuing operations before income taxes | 91.6 | | | 115.9 | | | 52 | | | (113.5 | ) | | 146 | |
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Provision for income taxes | (2.2 | ) | | 35.9 | | | 18.6 | | | (0.8 | ) | | 51.5 | |
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Income from continuing operations | 93.8 | | | 80 | | | 33.4 | | | (112.7 | ) | | 94.5 | |
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Loss from discontinued operations | — | | | — | | | (0.7 | ) | | — | | | (0.7 | ) |
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Net income | $ | 93.8 | | | $ | 80 | | | $ | 32.7 | | | $ | (112.7 | ) | | $ | 93.8 | |
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Other comprehensive income, net of tax | 10.2 | | | 4.9 | | | 5.4 | | | (10.3 | ) | | 10.2 | |
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Comprehensive income | $ | 104 | | | $ | 84.9 | | | $ | 38.1 | | | $ | (123.0 | ) | | $ | 104 | |
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Lennox International Inc. and Subsidiaries |
Condensed Consolidating Statements of Operations and Comprehensive Income (Loss) |
For the Three Months Ended June 30, 2013 |
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(Amounts in millions) | Parent | | Guarantor | | Non- | | Eliminations | | Consolidated |
Subsidiaries | Guarantor |
| Subsidiaries |
Net Sales | $ | — | | | $ | 795.4 | | | $ | 208.2 | | | $ | (90.5 | ) | | $ | 913.1 | |
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Cost of goods sold | 0.1 | | | 575 | | | 169.9 | | | (85.9 | ) | | 659.1 | |
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Gross profit | (0.1 | ) | | 220.4 | | | 38.3 | | | (4.6 | ) | | 254 | |
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Operating expenses: | | | | | | | | | |
Selling, general and administrative expenses | — | | | 117.6 | | | 33.7 | | | — | | | 151.3 | |
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Losses (gains) and other expenses, net | 2 | | | (0.3 | ) | | 0.4 | | | — | | | 2.1 | |
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Restructuring charges | — | | | 1.2 | | | 1.2 | | | — | | | 2.4 | |
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Income from equity method investments | (63.7 | ) | | 6.5 | | | (3.4 | ) | | 56.4 | | | (4.2 | ) |
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Operational income from continuing operations | 61.6 | | | 95.4 | | | 6.4 | | | (61.0 | ) | | 102.4 | |
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Interest expense, net | 3.7 | | | (0.6 | ) | | 0.5 | | | — | | | 3.6 | |
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Other expense, net | — | | | — | | | (0.2 | ) | | — | | | (0.2 | ) |
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Income from continuing operations before income taxes | 57.9 | | | 96 | | | 6.1 | | | (61.0 | ) | | 99 | |
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Provision for income taxes | (2.0 | ) | | 35.3 | | | 3.1 | | | (1.7 | ) | | 34.7 | |
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Income from continuing operations | 59.9 | | | 60.7 | | | 3 | | | (59.3 | ) | | 64.3 | |
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Loss from discontinued operations | — | | | 25.4 | | | (25.4 | ) | | — | | | — | |
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Net income | $ | 59.9 | | | $ | 86.1 | | | $ | (22.4 | ) | | $ | (59.3 | ) | | $ | 64.3 | |
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Other comprehensive income (loss), net of tax | (4.2 | ) | | 0.3 | | | 38.7 | | | (66.3 | ) | | (31.5 | ) |
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Comprehensive income (loss) | $ | 55.7 | | | $ | 86.4 | | | $ | 16.3 | | | $ | (125.6 | ) | | $ | 32.8 | |
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Lennox International Inc. and Subsidiaries |
Condensed Consolidating Statements of Operations and Comprehensive Income (Loss) |
For the Six Months Ended June 30, 2013 |
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(Amounts in millions) | Parent | | Guarantor | | Non- | | Eliminations | | Consolidated |
Subsidiaries | Guarantor |
| Subsidiaries |
Net Sales | $ | — | | | $ | 1,316.10 | | | $ | 397.7 | | | $ | (132.3 | ) | | $ | 1,581.50 | |
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Cost of goods sold | 0.1 | | | 979.4 | | | 313.2 | | | (127.2 | ) | | 1,165.50 | |
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Gross profit | (0.1 | ) | | 336.7 | | | 84.5 | | | (5.1 | ) | | 416 | |
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Operating expenses: | | | | | | | | | |
Selling, general and administrative expenses | — | | | 220.3 | | | 66.7 | | | — | | | 287 | |
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Losses and other expenses, net | 2.4 | | | 0.1 | | | 0.7 | | | — | | | 3.2 | |
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Restructuring charges | — | | | 1.5 | | | 1.4 | | | — | | | 2.9 | |
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Income from equity method investments | (71.6 | ) | | 8.9 | | | (6.2 | ) | | 61.5 | | | (7.4 | ) |
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Operational income from continuing operations | 69.1 | | | 105.9 | | | 21.9 | | | (66.6 | ) | | 130.3 | |
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Interest expense, net | 7 | | | (1.1 | ) | | 1.1 | | | — | | | 7 | |
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Other expense, net | — | | | — | | | (0.1 | ) | | — | | | (0.1 | ) |
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Income from continuing operations before income taxes | 62.1 | | | 107 | | | 20.9 | | | (66.6 | ) | | 123.4 | |
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Provision for income taxes | (3.3 | ) | | 40.1 | | | 8.4 | | | (1.9 | ) | | 43.3 | |
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Income from continuing operations | 65.4 | | | 66.9 | | | 12.5 | | | (64.7 | ) | | 80.1 | |
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Loss from discontinued operations | — | | | 17.6 | | | (25.4 | ) | | — | | | (7.8 | ) |
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Net income | $ | 65.4 | | | $ | 84.5 | | | $ | (12.9 | ) | | $ | (64.7 | ) | | $ | 72.3 | |
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Other comprehensive income (loss), net of tax | (7.6 | ) | | 1.1 | | | (7.3 | ) | | (67.0 | ) | | (80.8 | ) |
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Comprehensive income (loss) | $ | 57.8 | | | $ | 85.6 | | | $ | (20.2 | ) | | $ | (131.7 | ) | | $ | (8.5 | ) |
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Lennox International Inc. and Subsidiaries |
Condensed Consolidating Statements of Cash Flows |
For the Six Months Ended June 30, 2014 |
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(Amounts in millions) | Parent | | Guarantor | | Non-Guarantor | | Eliminations | | Consolidated |
Subsidiaries | Subsidiaries |
Cash flows from operating activities | $ | 48.6 | | | $ | (92.5 | ) | | $ | (29.5 | ) | | $ | — | | | $ | (73.4 | ) |
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Cash flows from investing activities: | | | | | | | | | |
Purchases of property, plant and equipment | — | | | (29.9 | ) | | (11.3 | ) | | — | | | (41.2 | ) |
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Net proceeds from sale of business | — | | | — | | | — | | | — | | | — | |
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Net cash used in discontinued operations | — | | | — | | | — | | | — | | | — | |
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Net cash used in investing activities | — | | | (29.9 | ) | | (11.3 | ) | | — | | | (41.2 | ) |
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Cash flows from financing activities: | | | | | | | | | |
Short-term borrowings, net | — | | | — | | | (0.6 | ) | | — | | | (0.6 | ) |
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Asset securitization borrowings | — | | | — | | | 20 | | | — | | | 20 | |
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Asset securitization payments | — | | | — | | | — | | | — | | | — | |
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Long-term debt payments | — | | | (0.7 | ) | | (0.2 | ) | | — | | | (0.9 | ) |
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Borrowings from revolving credit facility | 1,018.50 | | | — | | | — | | | — | | | 1,018.50 | |
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Payments on revolving credit facility | (832.5 | ) | | — | | | — | | | — | | | (832.5 | ) |
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Proceeds from employee stock purchases | 1 | | | — | | | — | | | — | | | 1 | |
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Repurchases of common stock | (50.0 | ) | | — | | | — | | | — | | | (50.0 | ) |
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Repurchases of common stock to satisfy employee withholding tax obligations | (10.8 | ) | | — | | | — | | | — | | | (10.8 | ) |
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Excess tax benefits related to share-based payments | 4 | | | — | | | — | | | — | | | 4 | |
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Intercompany debt | (5.6 | ) | | (6.3 | ) | | 11.9 | | | — | | | — | |
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Intercompany financing activity | (149.8 | ) | | 141 | | | 8.8 | | | — | | | — | |
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Intercompany investments | — | | | (3.0 | ) | | 3 | | | — | | | — | |
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Cash dividends paid | (23.6 | ) | | — | | | — | | | — | | | (23.6 | ) |
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Net cash provided by financing activities | (48.8 | ) | | 131 | | | 42.9 | | | — | | | 125.1 | |
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Increase in cash and cash equivalents | (0.2 | ) | | 8.6 | | | 2.1 | | | — | | | 10.5 | |
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Effect of exchange rates on cash and cash equivalents | — | | | — | | | 1.1 | | | — | | | 1.1 | |
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Cash and cash equivalents, beginning of period | 1.1 | | | 10.5 | | | 26.4 | | | — | | | 38 | |
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Cash and cash equivalents, end of period | $ | 0.9 | | | $ | 19.1 | | | $ | 29.6 | | | $ | — | | | $ | 49.6 | |
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Lennox International Inc. and Subsidiaries |
Condensed Consolidating Statements of Cash Flows |
For the Six Months Ended June 30, 2013 |
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(Amounts in millions) | Parent | | Guarantor | | Non-Guarantor | | Eliminations | | Consolidated |
Subsidiaries | Subsidiaries |
Cash flows from operating activities | $ | (15.8 | ) | | $ | 70.3 | | | $ | (142.8 | ) | | $ | — | | | $ | (88.3 | ) |
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Cash flows from investing activities: | | | | | | | | | |
Purchases of property, plant and equipment | — | | | (17.5 | ) | | (5.9 | ) | | — | | | (23.4 | ) |
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Net proceeds from sale of business | 1.5 | | | — | | | 3.3 | | | — | | | 4.8 | |
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Net cash used in discontinued operations | — | | | (0.1 | ) | | — | | | — | | | (0.1 | ) |
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Net cash used in investing activities | 1.5 | | | (17.6 | ) | | (2.6 | ) | | — | | | (18.7 | ) |
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Cash flows from financing activities: | | | | | | | | | |
Short-term borrowings, net | — | | | — | | | 1.6 | | | — | | | 1.6 | |
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Asset securitization borrowings | — | | | — | | | 270 | | | — | | | 270 | |
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Asset securitization payments | — | | | — | | | (180.0 | ) | | — | | | (180.0 | ) |
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Long-term debt payments | — | | | (0.3 | ) | | (0.2 | ) | | — | | | (0.5 | ) |
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Borrowings from revolving credit facility | 700.5 | | | — | | | — | | | — | | | 700.5 | |
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Payments on revolving credit facility | (640.5 | ) | | — | | | — | | | — | | | (640.5 | ) |
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Proceeds from employee stock purchases | 1 | | | — | | | — | | | — | | | 1 | |
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Repurchases of common stock | (33.0 | ) | | — | | | — | | | — | | | (33.0 | ) |
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Repurchases of common stock to satisfy employee withholding tax obligations | (5.8 | ) | | — | | | — | | | — | | | (5.8 | ) |
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Excess tax benefits related to share-based payments | 3.4 | | | — | | | — | | | — | | | 3.4 | |
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Intercompany debt | (27.0 | ) | | 9.7 | | | 17.3 | | | — | | | — | |
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Intercompany financing activity | 26.1 | | | (55.2 | ) | | 29.1 | | | — | | | — | |
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Cash dividends paid | (10.1 | ) | | — | | | — | | | — | | | (10.1 | ) |
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Net cash provided by financing activities | 14.6 | | | (45.8 | ) | | 137.8 | | | — | | | 106.6 | |
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Decrease in cash and cash equivalents | 0.3 | | | 6.9 | | | (7.6 | ) | | — | | | (0.4 | ) |
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Effect of exchange rates on cash and cash equivalents | — | | | — | | | (6.1 | ) | | — | | | (6.1 | ) |
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Cash and cash equivalents, beginning of period | 1 | | | 13.4 | | | 37.4 | | | — | | | 51.8 | |
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Cash and cash equivalents, end of period | $ | 1.3 | | | $ | 20.3 | | | $ | 23.7 | | | $ | — | | | $ | 45.3 | |
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