UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 _________________________________________________ FORM 10-Q _________________________________________________ ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____to ______ Commission file number 001-15149 _____________________ ...

Lennox International Inc. (NYSE:LII) Q2 2021 Earnings Conference Call July 26, 2021 9:30 AM ET Company Participants Todd Bluedorn - Chairman, Chief Executive Officer Joseph Reitmeier - Executive Vice President, Chief Financial Officer Steve Harrison - Vice President, Investor Relations Conference Call Participants Jeff Hammond - Keybanc Ryan Merkel - William Blair Gautam Khanna - Cowen Julian Mitchell - Barclays Tommy Moll - Stephens Nicole DeBlase - Deutsche Bank Joe Ritchie - Goldman Sachs Stephen Volkma ...

Lennox International Inc. (NYSE:LII) Q1 2021 Earnings Conference Call April 26, 2021 9:30 AM ET Company Participants Todd Bluedorn - Chairman and CEO Joe Reitmeier - EVP and CFO Steve Harrison - VP, IR Conference Call Participants Jeff Hammond - KeyBanc Capital Markets Tommy Moll - Stephens Stephen Volkmann - Jefferies Julian Mitchell - Barclays Jeff Sprague - Vertical Research Nicole DeBlase - Deutsche Bank Joe Ritchie - Goldman Sachs John Walsh - Credit Suisse Ryan Merkel - William Blair Josh Pokrzywinski ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 _________________________________________________ FORM 10-Q _________________________________________________ ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____to ______ Commission file number 001-15149 ____________________ ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2020 (Exact name of Registrant as specified in its charter) Delaware 42-0991521 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification Number) OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 2140 Lake Park Blvd. Richar ...

Lennox International Inc. (NYSE:LII) Q4 2020 Earnings Conference Call February 2, 2021 9:30 AM ET Company Participants Steve Harrison - VP, IR Todd Bluedorn - Chairman and CEO Joe Reitmeier - EVP and CFO Conference Call Participants Jeff Hammond - KeyBanc Julian Mitchell - Barclays John Walsh - Credit Suisse Gautam Khanna - Cowen Nicole DeBlase - Deutsche Bank Nigel Coe - Wolfe Research Steve Tusa - JP Morgan Joe Ritchie - Goldman Sachs Operator Ladies and gentlemen, thank you for standing by. Welcome to th ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 _________________________________________________ FORM 10-Q _________________________________________________ ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____to ______ Commission file number 001-15149 ________________ ...

Lennox International Inc. (NYSE:LII) Q3 2020 Earnings Conference Call October 19, 2020 9:30 AM ET Company Participants Steve Harrison - Vice President of Investor Relations Todd Bluedorn - Chairman and Chief Executive Officer Joe Reitmeier - Chief Financial Officer Conference Call Participants Julian Mitchell - Barclays Ryan Merkel - William Blair Jeff Hammond - KeyBanc Capital Markets Joe Ritchie - Goldman Sachs John Walsh - Credit Suisse Deepa Raghavan - Wells Fargo Securities Gautam Khanna - Cowen Nicole ...

Morgan Stanley 8 th Annual Laguna Conference (Virtual) September 2020 FORWARD-LOOKING STATEMENTS This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are subject to numerous risks and uncertainties that could cause actual results to differ materially from such statements. Such risks and uncertainties include, but are not limited to, the economic impact of the COVID-19 pandemic on the company and its employees, cust ...

[Filing Information](index=1&type=section&id=Filing%20Information) Details the company's quarterly report filing, stock exchange listing, and outstanding shares as of a specific date - Lennox International Inc. filed a Quarterly Report on Form 10-Q for the period ended June 30, 2020[1](index=1&type=chunk)[2](index=2&type=chunk) - The company's common stock is registered on the New York Stock Exchange under the trading symbol **LII**[3](index=3&type=chunk) - As of July 10, 2020, there were **38,253,953 shares of common stock outstanding**[4](index=4&type=chunk) [Part I - Financial Information](index=4&type=section&id=Part%20I%20Financial%20Information) Presents the company's unaudited consolidated financial statements and management's discussion and analysis [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) Presents unaudited consolidated financial statements, including balance sheets, income, comprehensive income, stockholders' deficit, cash flows, and related notes [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) Summarizes the company's financial position, including assets, liabilities, and stockholders' deficit, at specific dates Consolidated Balance Sheet Highlights (Amounts in millions) | Metric | June 30, 2020 | December 31, 2019 | Change (2020 vs 2019) | % Change | | :-------------------------------- | :------------ | :---------------- | :-------------------- | :------- | | Total current assets | $1,226.9 | $1,120.9 | $106.0 | 9.5% | | Total assets | $2,124.3 | $2,034.9 | $89.4 | 4.4% | | Total current liabilities | $946.2 | $1,002.7 | $(56.5) | -5.6% | | Total liabilities | $2,353.2 | $2,205.1 | $148.1 | 6.7% | | Total stockholders' deficit | $(228.9) | $(170.2) | $(58.7) | 34.5% | [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations) Details the company's revenues, expenses, and net income over specific reporting periods Consolidated Statements of Operations Highlights (Amounts in millions, except per share data) | Metric | Three Months Ended June 30, 2020 | Three Months Ended June 30, 2019 | Change (2020 vs 2019) | % Change | | :----------------------------------- | :------------------------------- | :------------------------------- | :-------------------- | :------- | | Net sales | $941.3 | $1,099.1 | $(157.8) | -14.4% | | Gross profit | $275.7 | $332.1 | $(56.4) | -17.0% | | Operating income | $136.0 | $213.8 | $(77.8) | -36.4% | | Net income | $100.0 | $110.7 | $(10.7) | -9.7% | | Diluted EPS (continuing operations) | $2.62 | $2.81 | $(0.19) | -6.8% | | Diluted EPS (net income) | $2.60 | $2.80 | $(0.20) | -7.1% | | Metric | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | Change (2020 vs 2019) | % Change | | :----------------------------------- | :------------------------------- | :------------------------------- | :-------------------- | :------- | | Net sales | $1,665.1 | $1,889.4 | $(224.3) | -11.9% | | Gross profit | $441.4 | $533.6 | $(92.2) | -17.3% | | Operating income | $172.3 | $308.5 | $(136.2) | -44.1% | | Net income | $112.9 | $180.0 | $(67.1) | -37.3% | | Diluted EPS (continuing operations) | $2.93 | $4.53 | $(1.60) | -35.3% | | Diluted EPS (net income) | $2.93 | $4.52 | $(1.59) | -35.2% | [Consolidated Statements of Comprehensive Income](index=6&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) Presents net income and other comprehensive income components, reflecting total non-owner changes in equity Consolidated Statements of Comprehensive Income Highlights (Amounts in millions) | Metric | Three Months Ended June 30, 2020 | Three Months Ended June 30, 2019 | Change (2020 vs 2019) | % Change | | :----------------------------------- | :------------------------------- | :------------------------------- | :-------------------- | :------- | | Net income | $100.0 | $110.7 | $(10.7) | -9.7% | | Other comprehensive income (loss) | $11.4 | $50.6 | $(39.2) | -77.5% | | Comprehensive income | $111.4 | $161.3 | $(49.9) | -30.9% | | Metric | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | Change (2020 vs 2019) | % Change | | :----------------------------------- | :------------------------------- | :------------------------------- | :-------------------- | :------- | | Net income | $112.9 | $180.0 | $(67.1) | -37.3% | | Other comprehensive income (loss) | $(17.9) | $59.2 | $(77.1) | -130.2% | | Comprehensive income | $95.0 | $239.2 | $(144.2) | -60.3% | [Consolidated Statements of Stockholders' Deficit](index=7&type=section&id=Consolidated%20Statements%20of%20Stockholders'%20Deficit) Outlines changes in equity components, including net income, dividends, and treasury stock, over the period Stockholders' Deficit Changes (Six Months Ended June 30, 2020 vs. December 31, 2019) (Amounts in millions) | Component | Balance as of Dec 31, 2019 | Net Income | Dividends | Treasury Stock Purchases | Other Changes | Balance as of June 30, 2020 | | :-------------------------------- | :------------------------- | :--------- | :-------- | :----------------------- | :------------ | :-------------------------- | | Common Stock | $0.9 | — | — | — | — | $0.9 | | Additional Paid-In Capital | $1,093.5 | — | — | $(1.5) | $10.4 | $1,102.4 | | Retained Earnings | $2,148.7 | $112.9 | $(58.8) | — | $(1.3) | $2,201.5 | | Accumulated Other Comprehensive Loss | $(103.8) | — | — | — | $(17.9) | $(121.7) | | Treasury Stock, at cost | $(3,309.5) | — | — | $(105.6) | $3.1 | $(3,412.0) | | **Total Stockholders' Deficit** | **$(170.2)** | **$112.9** | **$(58.8)** | **$(105.6)** | **$(5.7)** | **$(228.9)** | - The company adopted ASU 2016-13, resulting in a **$1.3 million net decrease to retained earnings** as of January 1, 2020[18](index=18&type=chunk) [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Reports cash inflows and outflows from operating, investing, and financing activities for the period Consolidated Statements of Cash Flows Highlights (Six Months Ended June 30, 2020 vs 2019) (Amounts in millions) | Cash Flow Activity | 2020 | 2019 | Change (2020 vs 2019) | | :----------------------------------- | :--- | :--- | :-------------------- | | Net cash provided by (used in) operating activities | $6.5 | $(111.0) | $117.5 | | Net cash (used in) provided by investing activities | $(44.3) | $1.9 | $(46.2) | | Net cash provided by financing activities | $52.3 | $97.0 | $(44.7) | | Increase (decrease) in cash and cash equivalents | $14.5 | $(12.1) | $26.6 | | Cash and cash equivalents, end of period | $44.8 | $36.4 | $8.4 | [Notes to Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Provides detailed explanations of accounting policies, segment data, commitments, and other financial disclosures [Note 1. General](index=10&type=section&id=Note%201.%20General) Discusses the impact of the COVID-19 pandemic and recent accounting standard adoptions on the company - The **COVID-19 pandemic** has significantly disrupted business operations, causing unfavorable impacts on results, including supply chain disruptions, higher employee absenteeism, and short-term manufacturing facility suspensions[29](index=29&type=chunk)[30](index=30&type=chunk)[31](index=31&type=chunk) - The company adopted ASU 2016-13 (Credit Losses) on January 1, 2020, resulting in a **$1.3 million net decrease to retained earnings**[33](index=33&type=chunk) - The adoption of ASU 2017-04 (Goodwill Impairment) and ASU 2018-15 (Cloud Computing Arrangement Costs) did not have a material impact on financial statements[34](index=34&type=chunk)[35](index=35&type=chunk) [Note 2. Reportable Business Segments](index=11&type=section&id=Note%202.%20Reportable%20Business%20Segments) Outlines the company's operational segments and their respective net sales and profit contributions - The company operates in three HVACR segments: **Residential Heating & Cooling**, **Commercial Heating & Cooling**, and **Refrigeration**[36](index=36&type=chunk) Segment Net Sales (Amounts in millions) | Segment | Three Months Ended June 30, 2020 | Three Months Ended June 30, 2019 | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | | :-------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Residential Heating & Cooling | $644.8 | $689.1 | $1,086.9 | $1,154.6 | | Commercial Heating & Cooling | $188.3 | $261.3 | $366.7 | $434.7 | | Refrigeration | $108.2 | $148.7 | $211.5 | $300.1 | | **Total Net Sales** | **$941.3** | **$1,099.1** | **$1,665.1** | **$1,889.4** | Segment Profit (Amounts in millions) | Segment | Three Months Ended June 30, 2020 | Three Months Ended June 30, 2019 | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | | :-------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Residential Heating & Cooling | $127.3 | $153.4 | $159.8 | $240.1 | | Commercial Heating & Cooling | $35.6 | $53.9 | $54.3 | $68.9 | | Refrigeration | $8.9 | $19.1 | $9.6 | $27.5 | | Corporate and other | $(18.8) | $(24.1) | $(33.1) | $(36.2) | | **Total Segment Profit** | **$153.0** | **$202.3** | **$190.6** | **$300.3** | [Note 3. Earnings Per Share](index=14&type=section&id=Note%203.%20Earnings%20Per%20Share) Provides detailed calculations for basic and diluted earnings per share from continuing operations Earnings Per Share (Amounts in millions, except per share data) | Metric | Three Months Ended June 30, 2020 | Three Months Ended June 30, 2019 | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | | :----------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Income from continuing operations | $100.6 | $111.0 | $113.1 | $180.4 | | Weighted-average shares outstanding – basic | 38.2 | 39.1 | 38.3 | 39.4 | | Weighted-average shares outstanding – diluted | 38.4 | 39.5 | 38.6 | 39.8 | | Basic EPS – Income from continuing operations | $2.63 | $2.84 | $2.95 | $4.58 | | Diluted EPS – Income from continuing operations | $2.62 | $2.81 | $2.93 | $4.53 | [Note 4. Commitments and Contingencies](index=14&type=section&id=Note%204.%20Commitments%20and%20Contingencies) Details product warranty liabilities, litigation expenses, and costs related to the Marshalltown tornado - Total product warranty liability increased to **$116.9 million** as of June 30, 2020, from $112.8 million at December 31, 2019[50](index=50&type=chunk) - Expenses for asbestos-related litigation, net of probable insurance recoveries, were **$1.2 million for Q2 2020** and **$(0.5) million for YTD 2020**[53](index=53&type=chunk) - The company incurred **$1.0 million in losses and expenses** related to the Marshalltown tornado in Q2 2020 and **$2.7 million for YTD 2020**[56](index=56&type=chunk) [Note 5. Stock Repurchases](index=17&type=section&id=Note%205.%20Stock%20Repurchases) Reports on remaining share repurchase authorization and recent accelerated share repurchase transactions - As of June 30, 2020, **$446 million of shares may still be repurchased** under the Share Repurchase Plans[57](index=57&type=chunk) - The company completed a **$100.0 million Accelerated Share Repurchase Transaction** in March 2020, repurchasing **0.4 million shares**[58](index=58&type=chunk) - An additional **$5.6 million in shares were repurchased** from employees to satisfy tax withholding obligations during the six months ended June 30, 2020[59](index=59&type=chunk) [Note 6. Divestitures](index=17&type=section&id=Note%206.%20Divestitures) Details the sale of the Kysor Warren business and its financial impact on the company - The sale of the Kysor Warren business was completed on March 29, 2019, resulting in a **net loss of $10.6 million** for the year ended December 31, 2019[60](index=60&type=chunk)[61](index=61&type=chunk) - There were no gains or losses on the sale of this business for the six months ended June 30, 2020[60](index=60&type=chunk) [Note 7. Restructuring Charges](index=18&type=section&id=Note%207.%20Restructuring%20Charges) Reports on restructuring charges incurred due to COVID-19, primarily for employee terminations and facility closures - The company recorded **$10.0 million in restructuring charges in Q2 2020** due to the economic impact of COVID-19, primarily for employee terminations, facility closures, and sales/marketing cancellations[64](index=64&type=chunk) Restructuring Charges by Type (Amounts in millions) | Type of Charge | Incurred in 2020 | Incurred to Date | Total Expected to be Incurred | | :-------------------------- | :--------------- | :--------------- | :---------------------------- | | Severance and related expense | $4.7 | $6.0 | $6.5 | | Asset write-offs and accelerated depreciation | $1.5 | $3.2 | $3.2 | | Lease termination | $0.1 | $1.2 | $1.2 | | Other | $4.2 | $4.7 | $5.4 | | **Total restructuring charges** | **$10.5** | **$15.1** | **$16.3** | [Note 8. Revenue Recognition](index=18&type=section&id=Note%208.%20Revenue%20Recognition) Presents consolidated revenue by geographic market and details changes in contract liabilities Consolidated Revenue by Geographic Market (Amounts in millions) | Geographic Market | Three Months Ended June 30, 2020 | Three Months Ended June 30, 2019 | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | | :------------------ | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | United States | $838.2 | $966.3 | $1,471.3 | $1,648.3 | | Canada | $56.0 | $63.8 | $102.7 | $112.8 | | Other international | $47.1 | $69.0 | $91.1 | $128.3 | | **Total** | **$941.3** | **$1,099.1** | **$1,665.1** | **$1,889.4** | - Contract liabilities (advance payments and deferred revenue) totaled **$12.4 million** as of June 30, 2020, a decrease from $14.3 million at December 31, 2019[76](index=76&type=chunk) [Note 9. Other Financial Statement Details](index=21&type=section&id=Note%209.%20Other%20Financial%20Statement%20Details) Covers inventory, goodwill, hedging activities, and stock-based compensation expenses Inventories, Net (Amounts in millions) | Component | June 30, 2020 | December 31, 2019 | | :---------------------- | :------------ | :---------------- | | Finished goods | $350.7 | $402.9 | | Work in process | $5.8 | $6.0 | | Raw materials and parts | $206.7 | $198.8 | | **Total inventories, net** | **$499.7** | **$544.1** | - Goodwill remained stable at **$186.5 million** as of June 30, 2020, with no impairment indicators identified[78](index=78&type=chunk) - The company uses cash flow hedges for commodity price risk (futures contracts) and foreign currency risk (forward contracts), with **$0.6 million in net losses** included in AOCL as of June 30, 2020[79](index=79&type=chunk)[81](index=81&type=chunk)[83](index=83&type=chunk) - Stock-based compensation expense was **$6.7 million for Q2 2020** and **$10.4 million for YTD 2020**[84](index=84&type=chunk) [Note 10. Pension Benefit Plans](index=22&type=section&id=Note%2010.%20Pension%20Benefit%20Plans) Details the net periodic pension benefit cost, including service, interest, and actuarial components Net Periodic Pension Benefit Cost (Amounts in millions) | Component | Three Months Ended June 30, 2020 | Three Months Ended June 30, 2019 | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | | :-------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Service cost | $1.4 | $1.2 | $2.8 | $2.4 | | Interest cost | $1.6 | $1.9 | $3.3 | $5.4 | | Expected return on plan assets | $(2.0) | $(2.5) | $(4.2) | $(7.2) | | Recognized actuarial loss | $1.4 | $0.9 | $2.9 | $2.9 | | Settlements and curtailments | — | $60.6 | — | $60.6 | | **Net periodic benefit cost** | **$2.4** | **$62.2** | **$4.9** | **$64.2** | [Note 11. Income Taxes](index=22&type=section&id=Note%2011.%20Income%20Taxes) Discusses unrecognized tax benefits and the company's status regarding U.S. federal income tax examinations - As of June 30, 2020, the company had **$3.1 million in total gross unrecognized tax benefits**[86](index=86&type=chunk) - The company is under examination for U.S. federal income taxes for 2019 and generally not subject to examinations for years prior to 2012[87](index=87&type=chunk) [Note 12. Lines of Credit and Financing Arrangements](index=23&type=section&id=Note%2012.%20Lines%20of%20Credit%20and%20Financing%20Arrangements) Outlines outstanding debt obligations, credit facilities, and senior unsecured notes Outstanding Debt Obligations (Amounts in millions) | Debt Type | June 30, 2020 | December 31, 2019 | | :-------------------------- | :------------ | :---------------- | | Current maturities of long-term debt | $343.6 | $321.9 | | Long-term debt | $1,047.2 | $849.3 | | **Total debt** | **$1,390.8** | **$1,171.2** | - The Asset Securitization Program (ASP) was renewed to November 2021, increasing the maximum securitization amount to a range of **$250.0 million to $400.0 million**[91](index=91&type=chunk) - The Domestic Credit Facility consists of a **$1,000.0 million unsecured revolving credit facility** and a **$160.0 million unsecured term loan**, maturing in August 2021[95](index=95&type=chunk) - The company had **$702.5 million outstanding borrowings** under its Domestic Credit Facility as of June 30, 2020, with **$440.1 million available for future borrowings**[96](index=96&type=chunk) - Senior unsecured notes of **$350.0 million** mature on November 15, 2023, with a **3.00% interest rate**[100](index=100&type=chunk) [Note 13. Comprehensive Income](index=27&type=section&id=Note%2013.%20Comprehensive%20Income) Details reclassifications from Accumulated Other Comprehensive Loss (AOCL) and changes in AOCL components Total Reclassifications from AOCL to Net Income (Amounts in millions) | Item | Three Months Ended June 30, 2020 | Three Months Ended June 30, 2019 | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | | :----------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Losses (Gains) on Cash Flow Hedges, net of tax | $(4.3) | $(1.5) | $(5.2) | $(3.3) | | Defined Benefit Plan items, net of tax | $(1.1) | $(46.3) | $(2.3) | $(47.8) | | Foreign Currency Translation Adjustments, net of tax | — | — | — | $(2.1) | | **Total reclassifications from AOCL** | **$(5.4)** | **$(47.8)** | **$(7.5)** | **$(53.2)** | Changes in AOCL by Component (Net of Tax) (Six Months Ended June 30, 2020) (Amounts in millions) | Component | Balance as of Dec 31, 2019 | Other comprehensive loss before reclassifications | Amounts reclassified from AOCL | Net other comprehensive (loss) income | Balance as of June 30, 2020 | | :-------------------------- | :------------------------- | :-------------------------------------- | :----------------------------- | :------------------------------------ | :-------------------------- | | Gains (Losses) on Cash Flow Hedges | $— | $(5.8) | $5.2 | $(0.6) | $(0.6) | | Defined Benefit Pension Plan Items | $(81.5) | $(1.8) | $2.3 | $0.5 | $(81.0) | | Foreign Currency Translation Adjustments | $(22.3) | $(17.8) | — | $(17.8) | $(40.1) | | **Total AOCL** | **$(103.8)** | **$(25.4)** | **$7.5** | **$(17.9)** | **$(121.7)** | [Note 14. Fair Value Measurements](index=28&type=section&id=Note%2014.%20Fair%20Value%20Measurements) Explains the fair value hierarchy for derivatives and the fair value of senior unsecured notes - Derivatives are classified as **Level 2** in the fair value hierarchy, valued using estimated future cash flows based on observed prices from exchange-traded derivatives[104](index=104&type=chunk) - The fair value of senior unsecured notes was **$362.7 million** as of June 30, 2020, compared to a carrying amount of $350.0 million[106](index=106&type=chunk)[88](index=88&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial performance, condition, and outlook, emphasizing COVID-19 impact, segment results, and liquidity strategies [Business Overview](index=29&type=section&id=Business%20Overview) Describes the company's operational segments, seasonal demand factors, and influences on cost of goods sold - The company operates in three HVACR segments: **Residential Heating & Cooling**, **Commercial Heating & Cooling**, and **Refrigeration**[109](index=109&type=chunk) - Demand for products and services is seasonal, heavily influenced by weather, and national/regional economic factors[111](index=111&type=chunk) - Cost of goods sold is primarily influenced by steel, copper, and aluminum prices, with volatility mitigated through price increases, commodity contracts, and efficiency improvements[112](index=112&type=chunk) [Impact of COVID-19 Pandemic and the Resulting Changes to our 2020 Financial Outlook](index=29&type=section&id=Impact%20of%20COVID-19%20Pandemic%20and%20the%20Resulting%20Changes%20to%20our%202020%20Financial%20Outlook) Details the disruptions caused by COVID-19, cost reduction actions, and revised 2020 financial projections - The **COVID-19 pandemic** has caused significant disruptions, including supply chain issues, employee absenteeism, and short-term manufacturing suspensions[113](index=113&type=chunk)[114](index=114&type=chunk)[115](index=115&type=chunk) - Cost reduction actions in Q2 2020 included **$10 million in restructuring charges** and **$3 million for health and safety measures**[116](index=116&type=chunk) - Revised 2020 financial outlook: revenue expected to be **down 10% to 15%** (previously 4% to 8% growth), and Diluted EPS from continuing operations in the range of **$7.31 to $8.11**[118](index=118&type=chunk) - Projected **$460 million in cash flows from operations** for 2020, reduced capital expenditure plans to **$120 million**, and placed remaining 2020 share repurchase plans on hold[119](index=119&type=chunk) [Financial Overview - Consolidated Results](index=31&type=section&id=Financial%20Overview%20-%20Consolidated%20Results) Analyzes consolidated net sales, gross profit margin, operating income, interest expense, and effective tax rate - Q2 2020 net sales decreased **14% to $941 million**, driven by a **15% volume decline**[122](index=122&type=chunk)[124](index=124&type=chunk) - Q2 2020 gross profit margin decreased **90 bps to 29.3%**, primarily due to lower price/mix and factory inefficiencies[125](index=125&type=chunk) - YTD 2020 net sales decreased **12% to $1,665.1 million**, due to an **11% volume decline** and a **2% impact from the Kysor Warren divestiture**[147](index=147&type=chunk) - YTD 2020 gross profit margin decreased **170 bps to 26.5%**, mainly from unfavorable price/mix and factory inefficiencies[147](index=147&type=chunk) - Operating income for Q2 2020 decreased **$78 million to $136 million**, and for YTD 2020 decreased **$136 million to $172.3 million**[122](index=122&type=chunk)[146](index=146&type=chunk) - Interest expense, net, decreased by **$6 million in Q2 2020** and **$8 million in YTD 2020** due to lower borrowing costs and lower borrowings[135](index=135&type=chunk)[158](index=158&type=chunk) - The effective tax rate increased to **21.4% for Q2 2020** and **26.8% for YTD 2020**, primarily due to lower excess tax benefits and an $8 million valuation allowance on foreign deferred tax assets in Q1 2020[136](index=136&type=chunk)[159](index=159&type=chunk) [Financial Overview - Results by Segment](index=36&type=section&id=Financial%20Overview%20-%20Results%20by%20Segment) Analyzes net sales and profit performance for Residential, Commercial, and Refrigeration segments Segment Performance Highlights (Q2 2020 vs Q2 2019) (Amounts in millions) | Segment | Net Sales (2020) | Net Sales (2019) | % Change Sales | Profit (2020) | Profit (2019) | % Change Profit | | :-------------------------- | :--------------- | :--------------- | :------------- | :------------ | :------------ | :-------------- | | Residential Heating & Cooling | $644.8 | $689.1 | -6.4% | $127.3 | $153.4 | -17.0% | | Commercial Heating & Cooling | $188.3 | $261.3 | -27.9% | $35.6 | $53.9 | -34.0% | | Refrigeration | $108.2 | $148.7 | -27.2% | $8.9 | $19.1 | -53.4% | Segment Performance Highlights (YTD 2020 vs YTD 2019) (Amounts in millions) | Segment | Net Sales (2020) | Net Sales (2019) | % Change Sales | Profit (2020) | Profit (2019) | % Change Profit | | :-------------------------- | :--------------- | :--------------- | :------------- | :------------ | :------------ | :-------------- | | Residential Heating & Cooling | $1,086.9 | $1,154.6 | -5.9% | $159.8 | $240.1 | -33.4% | | Commercial Heating & Cooling | $366.7 | $434.7 | -15.6% | $54.3 | $68.9 | -21.2% | | Refrigeration | $211.5 | $300.1 | -29.5% | $9.6 | $27.5 | -65.1% | - Residential Heating & Cooling profit declined due to lower sales volumes, non-recurring insurance proceeds, factory inefficiencies, and warranty adjustments[139](index=139&type=chunk)[161](index=161&type=chunk) - Commercial Heating & Cooling profit decreased primarily due to lower sales volumes and unfavorable mix[141](index=141&type=chunk)[164](index=164&type=chunk) - Refrigeration profit declined significantly due to lower sales volumes, factory inefficiencies, and other product costs[144](index=144&type=chunk)[166](index=166&type=chunk) - Corporate and other expenses decreased by **$5 million in Q2 2020** and **$3 million YTD 2020** due to lower salary, incentive compensation, and discretionary expenses[145](index=145&type=chunk)[167](index=167&type=chunk) [Liquidity and Capital Resources](index=42&type=section&id=Liquidity%20and%20Capital%20Resources) Examines cash flow activities, capital expenditures, debt levels, and credit ratings to assess financial flexibility - Net cash provided by operating activities was **$6.5 million for YTD 2020**, a significant improvement from $(111.0) million used in YTD 2019, primarily due to lower working capital requirements from the COVID-19 downturn[170](index=170&type=chunk) - Capital expenditures were **$44 million for YTD 2020**, down from $54 million in YTD 2019, focused on manufacturing capacity expansion and system investments[171](index=171&type=chunk) - Net cash provided by financing activities decreased to **$52 million for YTD 2020** from $97 million in YTD 2019, mainly due to lower net borrowings on the revolving credit facility and fewer stock repurchases[172](index=172&type=chunk) - Total debt increased to **$1,390.8 million** at June 30, 2020, from $1,171.2 million at December 31, 2019[173](index=173&type=chunk) - The debt-to-total-capital ratio increased to **119.7%** at June 30, 2020, from 117.0% at December 31, 2019[176](index=176&type=chunk) - The company maintains **investment-grade credit ratings** (Baa3 stable by Moody's, BBB stable by S&P) and believes current cash, future operations, and available borrowings are sufficient for foreseeable needs[177](index=177&type=chunk)[178](index=178&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=46&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Refers to the Annual Report on Form 10-K for market risk disclosures, noting no material changes since December 31, 2019 - The company's exposure to market risk has not materially changed since December 31, 2019[183](index=183&type=chunk) [Item 4. Controls and Procedures](index=46&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were effective as of June 30, 2020, with no material changes in internal control over financial reporting - Disclosure controls and procedures were effective as of June 30, 2020, providing reasonable assurance that required information is recorded, processed, summarized, and reported timely[184](index=184&type=chunk) - There were no material changes in internal control over financial reporting during the period[185](index=185&type=chunk) [Part II - Other Information](index=46&type=section&id=Part%20II%20Other%20Information) Covers legal proceedings, risk factors, equity security sales, and a list of exhibits filed with the report [Item 1. Legal Proceedings](index=46&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various claims and lawsuits, none expected to materially affect financial condition or results - Management believes that current claims and lawsuits will not have a material adverse effect on the company's financial position, results of operations, or cash flows[186](index=186&type=chunk) [Item 1A. Risk Factors](index=47&type=section&id=Item%201A.%20Risk%20Factors) Updates risk factors from the Annual Report on Form 10-K, emphasizing the material adverse effects of the COVID-19 pandemic - The **COVID-19 pandemic** has disrupted business operations and is expected to continue to impact results, financial position, and cash flows due to demand effects, supply chain issues, and employee absenteeism[189](index=189&type=chunk)[190](index=190&type=chunk) - Cost reduction actions and an **$8 million valuation allowance** on foreign deferred tax assets were implemented in response to the pandemic's adverse impact[192](index=192&type=chunk) - The impact of the COVID-19 pandemic could have a **material adverse effect** on the results of operations, financial position, and cash flows for the year ended December 31, 2020[193](index=193&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=48&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Details common stock repurchases in Q2 2020, including shares for tax obligations, and remaining repurchase authorization Common Stock Repurchases (Q2 2020) | Period | Total Number of Shares Purchased (1) | Average Price Paid per Share (including fees) | | :------------------- | :----------------------------------- | :-------------------------------------------- | | April 1 through April 24 | — | $— | | April 24 through May 22 | 249 | $188.9 | | May 22 through June 30 | 323 | $228.2 | | **Total** | **572** | | - The repurchased shares include **572 shares surrendered by employees** to satisfy tax-withholding obligations[195](index=195&type=chunk) - After a **$100.0 million accelerated share repurchase** in February 2020, approximately **$446.0 million remains authorized** under the share repurchase plans[196](index=196&type=chunk) [Item 6. Exhibits](index=49&type=section&id=Item%206.%20Exhibits) Lists all exhibits filed with the Form 10-Q, including corporate governance documents, indentures, and certifications - The exhibits include the Restated Certificate of Incorporation, Amended and Restated Bylaws, various Indentures and Supplemental Indentures, Specimen Stock Certificate, Certifications (31.1, 31.2, 32.1), and XBRL-related documents[199](index=199&type=chunk) - An Eighth Supplemental Indenture, dated May 22, 2020, among Lennox Switzerland GmbH, Lennox International Inc., and US Bank National Association, as trustee, is furnished with this report[199](index=199&type=chunk) [SIGNATURE](index=50&type=section&id=SIGNATURE) Confirms the official signing of the report by the Chief Financial Officer on July 20, 2020 - The report was signed by **Joseph W. Reitmeier, Chief Financial Officer**, on behalf of Lennox International Inc. on July 20, 2020[202](index=202&type=chunk)