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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, 2024
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.
Incorporated pursuant to the laws of the State of Delaware
_________________________________________________ 
Internal Revenue Service Employer Identification No. 42-0991521
2140 LAKE PARK BLVD., RICHARDSON, Texas, 75080
(972) 497-5000
_________________________________________________ 
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common stock, $0.01 par value per shareLIINew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company" in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer☒Accelerated Filer☐
Non-Accelerated Filer☐Smaller Reporting Company☐
Emerging growth company☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐ No  ☒
As of October 14, 2024, the number of shares outstanding of the registrant’s common stock, par value $0.01 per share, was 35,623,280.




LENNOX INTERNATIONAL INC.
FORM 10-Q
For the three and nine months ended September 30, 2024

INDEX
Page
Part I
Consolidated Balance Sheets - September 30, 2024 (Unaudited) and December 31, 2023
Consolidated Statements of Operations (Unaudited) - Three and Nine Months Ended September 30, 2024 and 2023
Consolidated Statements of Comprehensive Income (Unaudited) - Three and Nine Months Ended September 30, 2024 and 2023
3
Consolidated Statements of Stockholders' Equity (Unaudited) - Three and Nine Months Ended September 30, 2024 and 2023
Consolidated Statements of Cash Flows (Unaudited) - Nine Months Ended September 30, 2024 and 2023
Part II

i

Part I - Financial Information
Item 1. Financial Statements

LENNOX INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Amounts in millions, except shares and par values)As of September 30, 2024As of December 31, 2023
(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents$243.1 $60.7 
Short-term investments12.6 8.4 
Accounts and notes receivable, net of allowances of $16.2 and $14.4 in 2024 and 2023, respectively
816.5 594.6 
Inventories, net689.2 699.1 
Other assets69.6 70.7 
Total current assets1,831.0 1,433.5 
Property, plant and equipment, net of accumulated depreciation of $952.6 and $910.8 in 2024 and 2023, respectively
754.8 720.4 
Right-of-use assets from operating leases270.5 213.6 
Goodwill219.9 222.1 
Deferred income taxes71.2 51.8 
Other assets, net165.8 156.9 
Total assets$3,313.2 $2,798.3 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable$477.5 $374.7 
Accrued expenses444.7 416.1 
Income taxes payable13.3 4.2 
Commercial paper— 150.0 
Current maturities of long-term debt312.7 12.1 
Current operating lease liabilities67.8 57.5 
Total current liabilities1,316.0 1,014.6 
Long-term debt827.6 1,143.1 
Long-term operating lease liabilities214.9 164.6 
Pensions16.3 22.5 
Other liabilities184.4 168.2 
Total liabilities2,559.2 2,513.0 
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.01 par value, 25,000,000 shares authorized, no shares issued or outstanding
— — 
Common stock, $0.01 par value, 200,000,000 shares authorized, 87,170,197 shares issued
0.9 0.9 
Additional paid-in capital1,204.9 1,184.6 
Retained earnings3,994.0 3,506.2 
Accumulated other comprehensive loss(70.7)(56.9)
Treasury stock, at cost, 51,537,964 shares and 51,588,103 shares for 2024 and 2023, respectively
(4,375.1)(4,349.5)
Total stockholders' equity754.0 285.3 
Total liabilities and stockholders' equity$3,313.2 $2,798.3 

The accompanying notes are an integral part of these consolidated financial statements.
1


LENNOX INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Amounts in millions, except per share data)For the Three Months Ended September 30,For the Nine Months Ended September 30,
 2024202320242023
Net sales$1,498.1 $1,366.3 $3,996.3 $3,827.1 
Cost of goods sold1,009.7 937.8 2,679.7 2,634.1 
Gross profit488.4 428.5 1,316.6 1,193.0 
Operating Expenses:
Selling, general and administrative expenses184.4 178.9 523.6 527.6 
Losses and other expenses, net3.1 3.5 10.5 5.2 
Restructuring charges— 0.3 — 0.2 
Gain on sale from previous dispositions— — (1.6)— 
Impairment on assets held for sale— 63.2 — 63.2 
Income from equity method investments(2.4)(4.2)(6.1)(8.0)
Operating income303.3 186.8 790.2 604.8 
Pension settlements0.1 0.3 0.4 0.4 
Interest expense, net8.9 11.2 33.2 40.4 
Other expense (income), net0.4 0.1 1.5 (0.1)
Net income before income taxes293.9 175.2 755.1 564.1 
Provision for income taxes54.9 44.8 145.9 118.5 
Net income$239.0 $130.4 $609.2 $445.6 
Earnings per share – Basic:$6.71 $3.67 $17.11 $12.55 
Earnings per share – Diluted:$6.68 $3.65 $17.02 $12.51 
Weighted Average Number of Shares Outstanding - Basic35.6 35.5 35.6 35.5 
Weighted Average Number of Shares Outstanding - Diluted35.8 35.7 35.8 35.6 

The accompanying notes are an integral part of these consolidated financial statements.


2

LENNOX INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
(Amounts in millions)For the Three Months Ended September 30,For the Nine Months Ended September 30,
 2024202320242023
Net income$239.0 $130.4 $609.2 $445.6 
Other comprehensive (loss) income:
Foreign currency translation adjustments(9.9)(5.7)(19.4)8.7 
Net change in pension and post-retirement liabilities(0.1)— (1.2)(0.8)
Reclassification of pension and post-retirement benefit losses into earnings0.3 — 0.7 0.6 
Pension settlements0.1 0.3 0.4 0.4 
Share of equity method investments other comprehensive income(0.2)1.1 (0.2)1.1 
Net change in fair value of cash flow hedges(0.6)3.1 5.3 3.6 
Reclassification of cash flow hedge losses into earnings0.8 0.8 1.2 1.2 
Other comprehensive (loss) income before taxes(9.6)(0.4)(13.2)14.8 
Tax benefit (expense)(0.3)(0.8)(0.6)(1.2)
Other comprehensive (loss) income, net of tax(9.9)(1.2)(13.8)13.6 
Comprehensive income$229.1 $129.2 $595.4 $459.2 
The accompanying notes are an integral part of these consolidated financial statements.
3

LENNOX INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
For the three and nine months ended September 30, 2024 and 2023
(Unaudited)
(In millions, except per share data)
Common Stock IssuedAdditional Paid-In CapitalRetained EarningsAccumulated Other Comprehensive LossTreasury Stock at CostTotal Stockholders' Equity
(For the three months ended September 30, 2024)
Shares Amount
Balance as of June 30, 2024$0.9 $1,197.9 $3,796.0 $(60.8)51.5 $(4,356.6)$577.4 
Net income— — 239.0 — — — 239.0 
Dividends, $1.15 per share
— — (41.0)— — — (41.0)
Foreign currency translation adjustments— — — (9.9)— — (9.9)
Pension and post-retirement liability changes— — — 0.2 — — 0.2 
Share of equity method investments other comprehensive income— — — (0.2)— — (0.2)
Stock-based compensation expense— 6.8 — — — — 6.8 
Treasury shares reissued for common stock— 0.2 — — — 0.9 1.1 
Treasury stock purchases— — — — — (19.4)(19.4)
Balance as of September 30, 2024$0.9 $1,204.9 $3,994.0 $(70.7)51.5 $(4,375.1)$754.0 
Common Stock IssuedAdditional Paid-In CapitalRetained EarningsAccumulated Other Comprehensive LossTreasury Stock at CostTotal Stockholders' Equity
(For the three months ended September 30, 2023)
Shares Amount
Balance as of June 30, 2023$0.9 $1,169.3 $3,309.0 $(75.8)51.7 $(4,340.8)$62.6 
Net income— — 130.4 — — — 130.4 
Dividends, $1.10 per share
— — (39.1)— — — (39.1)
Foreign currency translation adjustments— — — (5.7)— — (5.7)
Pension and post-retirement liability changes— — — 0.3 — — 0.3 
Share of equity method investments other comprehensive income— — — 1.1 — — 1.1 
Stock-based compensation expense— 9.7 — — — — 9.7 
Change in cash flow hedges— — — 3.1 — — 3.1 
Treasury shares reissued for common stock— (0.1)— — (0.1)1.2 1.1 
Treasury stock purchases— — — — — (4.0)(4.0)
Balance as of September 30, 2023$0.9 $1,178.9 $3,400.3 $(77.0)51.6 $(4,343.6)$159.5 

The accompanying notes are an integral part of these consolidated financial statements.


4

LENNOX INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
For the three and nine months ended September 30, 2024 and 2023 (Unaudited)
(In millions, except per share data)
Common Stock IssuedAdditional Paid-In CapitalRetained EarningsAccumulated Other Comprehensive LossTreasury Stock at CostTotal Stockholders' Equity
(For the nine months ended September 30, 2024)
SharesAmount
Balance as of December 31, 2023$0.9 $1,184.6 $3,506.2 $(56.9)51.6 $(4,349.5)$285.3 
Net income— — 609.2 — — — 609.2 
Dividends, $3.4 per share
— — (121.4)— — — (121.4)
Foreign currency translation adjustments— — — (19.4)— — (19.4)
Pension and post-retirement liability changes— — — (0.4)— — (0.4)
Share of equity method investments other comprehensive income— — — (0.2)— — (0.2)
Stock-based compensation expense— 20.1 — — — — 20.1 
Change in cash flow hedges— — — 6.2 — — 6.2 
Treasury shares reissued for common stock— 0.2 — — (0.1)3.0 3.2 
Treasury stock purchases— — — — — (28.6)(28.6)
Balance as of September 30, 2024$0.9 $1,204.9 $3,994.0 $(70.7)51.5 $(4,375.1)$754.0 
Common Stock IssuedAdditional Paid-In CapitalRetained EarningsAccumulated Other Comprehensive LossTreasury Stock at CostTotal Stockholders' Equity (Deficit)
(For the nine months ended September 30, 2023)
SharesAmount
Balance as of December 31, 2022$0.9 $1,155.2 $3,070.6 $(90.6)51.7 $(4,339.2)$(203.1)
Net income— — 445.6 — — — 445.6 
Dividends, $3.26 per share
— — (115.9)— — — (115.9)
Foreign currency translation adjustments— — — 8.7 — — 8.7 
Pension and post-retirement liability changes— — — 0.2 — — 0.2 
Share of equity method investments other comprehensive income— — — 1.1 — — 1.1 
Stock-based compensation expense— 23.5 — — — — 23.5 
Change in cash flow hedges— — — 3.6 — — 3.6 
Treasury shares reissued for common stock— 0.2 — — (0.1)2.7 2.9 
Treasury stock purchases— — — — — (7.1)(7.1)
Balance as of September 30, 2023$0.9 $1,178.9 $3,400.3 $(77.0)51.6 $(4,343.6)$159.5 

The accompanying notes are an integral part of these consolidated financial statements.
5

LENNOX INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Amounts in millions)For the Nine Months Ended September 30,
20242023
Cash flows from operating activities:
Net income$609.2 $445.6 
Adjustments to reconcile net income to net cash provided by operating activities:
Gain on sale from previous dispositions(1.6)— 
Income from equity method investments(6.1)(8.0)
Dividends from affiliates2.5 — 
Impairment on assets held for sale— 63.2 
Provision for credit losses4.6 4.7 
Unrealized (gains) losses, net on derivative contracts(6.7)5.6 
Stock-based compensation expense20.1 23.5 
Depreciation and amortization69.6 62.0 
Deferred income taxes(21.5)(24.9)
Pension expense3.5 2.4 
Pension contributions(9.1)(2.8)
Other items, net— (1.4)
Changes in assets and liabilities, net of effects of acquisitions and divestitures:
Accounts and notes receivable(229.1)(142.5)
Inventories9.1 (44.9)
Accounts payable104.6 (10.9)
Accrued expenses31.3 69.4 
Income taxes payable and receivable, net20.4 (6.7)
Leases, net3.8 3.4 
Other, net8.7 (7.8)
Net cash provided by operating activities613.3 429.9 
Cash flows from investing activities:
Proceeds from the disposal of property, plant and equipment1.9 1.6 
Purchases of property, plant and equipment(103.4)(125.0)
Net proceeds from previous disposition4.1 — 
Acquisitions, net of cash1.8 — 
Purchases of investments(12.5)(1.1)
Net cash used in investing activities(108.1)(124.5)
Cash flows from financing activities:
Commercial paper borrowings424.1 — 
Commercial paper payments(574.1)— 
Borrowings from debt arrangements156.7 1,737.5 
Payments on debt arrangements(190.2)(2,290.1)
Issuance of senior unsecured notes— 500.0 
Payments of deferred financing costs— (5.4)
Proceeds from employee stock purchases3.3 2.9 
Repurchases of common stock(12.9)— 
Repurchases of common stock to satisfy employee withholding tax obligations(15.0)(7.1)
Cash dividends paid(119.3)(153.4)
Net cash used in financing activities(327.4)(215.6)
Increase in cash and cash equivalents177.8 89.8 
Cash balances classified as assets held for sale— (7.6)
Effect of exchange rates on cash and cash equivalents4.6 (2.8)
Cash and cash equivalents, beginning of period60.7 52.6 
Cash and cash equivalents, end of period$243.1 $132.0 
Supplemental disclosures of cash flow information:
Interest paid$44.7 $42.0 
Income taxes paid (net of refunds)$145.5 $151.3 

The accompanying notes are an integral part of these consolidated financial statements.
6

LENNOX INTERNATIONAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. General:

References in this Quarterly Report on Form 10-Q to "we","our","us","LII" or the "Company" refer to Lennox International Inc. and its subsidiaries, unless the context requires otherwise.

Basis of Presentation

The accompanying unaudited Consolidated Balance Sheet as of September 30, 2024, the accompanying unaudited Consolidated Statements of Operations for the three and nine months ended September 30, 2024 and 2023, the accompanying unaudited Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2024 and 2023, the accompanying unaudited Consolidated Statements of Stockholders' Equity for the three and nine months ended September 30, 2024 and 2023, and the accompanying unaudited Consolidated Statements of Cash Flows for the nine months ended September 30, 2024 and 2023 should be read in conjunction with our audited consolidated financial statements and footnotes included in our Annual Report on Form 10-K for the year ended December 31, 2023.

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. The accompanying consolidated financial statements contain all material adjustments, consisting principally of normal recurring adjustments, necessary for a fair presentation of our financial position, results of operations and cash flows. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to applicable rules and regulations, although we believe that the disclosures herein are adequate to make the information presented not misleading. The operating results for the interim periods are not necessarily indicative of the results that may be expected for a full year.

Our fiscal quarterly periods are comprised of approximately 13 weeks, but the number of days per quarter may vary year-over-year. Our quarterly reporting periods usually end on the Saturday closest to the last day of March, June, and September. Our fourth quarter and fiscal year ends on December 31, regardless of the day of the week on which December 31 falls. For convenience, the 13-week periods comprising each fiscal quarter are denoted by the last day of the respective calendar quarter.

Use of Estimates

The preparation of financial statements requires us to make estimates and assumptions about future events. These estimates and the underlying assumptions affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities, and reported amounts of revenues and expenses. Such estimates include the valuation of accounts receivable, inventories, goodwill, intangible assets and other long-lived assets, contingencies, guarantee obligations, indemnifications, and assumptions used in the calculation of income taxes, pension and post-retirement medical benefits, self-insurance and warranty reserves, and stock-based compensation, among others. These estimates and assumptions are based on our best estimates and judgment.

We evaluate these estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment. We believe these estimates and assumptions to be reasonable under the circumstances and will adjust such estimates and assumptions when facts and circumstances dictate. Volatile equity, foreign currency and commodity markets combine to increase the uncertainty inherent in such estimates and assumptions. Future events and their effects cannot be determined with precision and actual results could differ significantly from these estimates. Changes in these estimates will be reflected in the financial statements in future periods.


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2. Reportable Business Segments:

We operate in two reportable business segments of the heating, ventilation, air conditioning and refrigeration (“HVACR”) industry. Our segments are organized primarily by the nature of the products and services we provide. The following table describes each segment:
 
SegmentProduct or ServicesMarkets ServedGeographic Areas
Home Comfort SolutionsFurnaces, air conditioners, heat pumps, packaged heating and cooling systems, indoor air quality equipment, comfort control products, replacement parts and suppliesResidential Replacement;
Residential New Construction		United States
Canada
Building Climate SolutionsCommercial heating, air conditioning and refrigeration systems. Products include rooftop packaged units, variable refrigerant flow systems, heat pumps, air cooled condensing units, air handlers, unit coolers, and process chillers. Services include installation, energy monitoring, service and maintenance, and HVAC recycling.Light Commercial;
Food Preservation;
Non-Food Industry		United States
Canada

We use segment profit or loss as the primary measure of profitability to evaluate operating performance and to allocate capital resources. We define segment profit or loss as a segment’s income or loss from continuing operations before income taxes included in the accompanying Consolidated Statements of Operations, excluding certain items. The reconciliation in the table below details the items excluded.

Our corporate costs include those costs related to corporate functions such as legal, internal audit, treasury, human resources, tax compliance and senior executive staff. Any intercompany sales and associated profit (and any other intercompany items) are eliminated from segment results. There were no significant intercompany eliminations for the periods presented.

Segment Net Sales and Profit (Loss)

Net sales and segment profit (loss) for each segment, along with a reconciliation of segment profit (loss) to Operating income, are shown below (in millions):
 For the Three Months Ended September 30,For the Nine Months Ended September 30,
 2024
2023
2024
2023
Net sales
Home Comfort Solutions$1,032.8 $896.3 $2,689.7 $2,513.6 
Business Climate Solutions
465.3 405.5 1,306.6 1,121.5 
Corporate and Other (1)
— 64.5 — 192.0 
Total segment net sales$1,498.1 $1,366.3 $3,996.3 $3,827.1 
Segment profit (loss) (2)
Home Comfort Solutions$226.5 $181.4 $567.1 $495.2 
Business Climate Solutions
105.9 97.3 298.1 250.3 
Corporate and Other
(29.1)(23.4)(76.6)(65.2)
Total segment profit303.3 255.3 788.6 680.3 
Reconciliation to Operating income:
Impairment on assets held for sale— 63.2 — 63.2 
Gain on sale from previous dispositions— — (1.6)— 
Items in Losses (gains) and other expenses, net that are excluded from segment profit (loss) (2)
— 5.0 — 12.1 
Restructuring charges— 0.3 — 0.2 
Operating income$303.3 $186.8 $790.2 $604.8 
(1) The Corporate and Other segment included our European portfolio. In the fourth quarter of 2023 we completed the divestiture of our European operations.
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(2) We define segment profit (loss) as a segment's operating income included in the accompanying Consolidated Statements of Operations, excluding:
◦The following items in Losses and other expenses, net:
▪Net change in unrealized losses (gains) on unsettled futures contracts,
▪Environmental liabilities and special litigation charges, and
▪Other items, net
◦Restructuring charges;
◦Impairment on assets held for sale; and
◦Gain on sale from previous dispositions

3. Earnings Per Share:

Basic earnings per share are computed by dividing net income by the weighted-average number of common shares outstanding during the period. Diluted earnings per share are computed by dividing net income by the sum of the weighted-average number of shares and the number of equivalent shares assumed outstanding, if dilutive, under our stock-based compensation plans.

The computations of basic and diluted earnings per share were as follows (in millions, except per share data):

 For the Three Months Ended September 30,For the Nine Months Ended September 30,
 2024202320242023
Net income $239.0 $130.4 $609.2 $445.6 
Weighted-average shares outstanding – basic35.6 35.5 35.6 35.5 
Add: Potential effect of dilutive securities attributable to stock-based payments0.2 0.2 0.2 0.1 
Weighted-average shares outstanding – diluted35.8 35.7 35.8 35.6 
Earnings per share – Basic:$6.71 $3.67 $17.11 $12.55 
Earnings per share – Diluted:$6.68 $3.65 $17.02 $12.51 

The following stock appreciation rights and restricted stock units were outstanding but not included in the diluted earnings per share calculation as the assumed exercise of such rights would have been anti-dilutive (in millions, except for per share data):

 For the Three Months Ended September 30,For the Nine Months Ended September 30,
 2024202320242023
Weighted-average number of shares— 0.1 — 0.1 
    
4. Commitments and Contingencies:

Leases
We determine if an arrangement is a lease at inception. Operating leases are included in our Consolidated Balance Sheets as Right-of-use assets from operating leases, Current operating lease liabilities and Long-term operating lease liabilities. Finance leases are included in Property, plant and equipment, Current maturities of long-term debt and Long-term debt in our Consolidated Balance Sheets. We do not recognize a right-of-use asset and lease liability for leases with a term of 12 months or less. We do 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.

Many of our lease agreements contain renewal options; however, we do not recognize right-of-use assets or lease liabilities for renewal periods unless it is determined that we are reasonably certain of renewing the lease at inception or when a triggering
9

event occurs. Some of our lease agreements contain rent escalation clauses (including index-based escalations), rent holidays, capital improvement funding or other lease concessions. We recognize our minimum rental expense on a straight-line basis based on the fixed components of a lease arrangement. We amortize this expense over the term of the lease beginning with the date of initial possession. Variable lease components represent amounts that are not fixed in nature and are not tied to an index or rate, and are recognized as incurred. Under certain of our third-party service agreements, we control a specific space or underlying asset used in providing the service by the third-party service provider. These arrangements meet the definition under ASC 842 and therefore are accounted for under ASC 842.

In determining our right-of-use assets and lease liabilities, we apply a discount rate to the minimum lease payments within each lease agreement. ASC 842 requires us to use the rate of interest that a lessee would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. When we cannot readily determine the discount rate implicit in the lease agreement, we utilize our incremental borrowing rate. To estimate our specific incremental borrowing rates over various periods (ranging from 1-year through 30-years), a comparable market yield curve consistent with our credit quality was calibrated to our publicly outstanding debt instruments.

We lease certain real and personal property under non-cancelable operating leases. Approximately 79% of our right-of-use assets and lease liabilities relate to our leases of real estate with the remaining amounts primarily relating to our leases of IT equipment, fleet vehicles and manufacturing and distribution equipment.     

Product Warranties and Product Related Contingencies

We provide warranties to customers for some of our products and record liabilities for the estimated future warranty-related costs based on failure rates, cost experience and other factors. We periodically review the assumptions used to determine the product warranty liabilities and will adjust the liabilities in future periods for changes in experience, as necessary.

Liabilities for estimated product warranty costs are included in the following captions on the accompanying Consolidated Balance Sheets (in millions) as of:
September 30, 2024December 31, 2023
Accrued expenses$47.8 $45.4 
Other liabilities109.1 97.4 
Total warranty liability$156.9 $142.8 
The changes in product warranty liabilities for the nine months ended September 30, 2024 were as follows (in millions):
Total warranty liability as of December 31, 2023$142.8 
Warranty claims paid(32.4)
Changes resulting from issuance of new warranties46.5 
Changes in estimates associated with pre-existing liabilities0.2 
Changes in foreign currency translation rates and other(0.2)
Total warranty liability as of September 30, 2024
$156.9 

Litigation

We are involved in a number of claims and lawsuits incidental to the operation of our businesses. Insurance coverages are maintained and estimated costs are recorded for such claims and lawsuits, including costs to settle claims and lawsuits, based on experience involving similar matters and specific facts known.

It is management's opinion that none of these claims or lawsuits or any threatened litigation will have a material adverse effect on our financial condition, results of operations or cash flows. Claims and lawsuits, however, involve uncertainties and it is possible that their eventual outcome could adversely affect our results of operations for a particular period.

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5. Stock Repurchases:

Our Board of Directors has authorized a total of $4.0 billion to repurchase shares of our common stock (collectively referred to as the "Share Repurchase Plans"), including a $1.0 billion share repurchase authorization in July 2021. The Share Repurchase Plans allow us to repurchase shares from time to time in open market transactions and in privately negotiated transactions based on business, market, applicable legal requirements and other considerations. Such repurchases may also be made in compliance with Rule 10b5-1 trading plans entered into by us, which would permit common stock to be repurchased when the Company might otherwise be precluded from doing so under insider trading laws or self-imposed trading restrictions. The Share Repurchase Plans do not require the repurchase of a specific number of shares and may be terminated at any time. As of September 30, 2024, $532.5 million was available for repurchase under the Share Repurchase Plans.

For the three and nine months ended September 30, 2024, we repurchased 23,000 shares at an aggregate cost, inclusive of fees, of $13.5 million.

6. Revenue Recognition:

The following table disaggregates our revenue by business segment by geography which provides information as to the major source of revenue. See Note 2 for additional information on our reportable business segments and the products and services sold in each segment. All amount presented reflect the revised segment presentation.

For the Three Months Ended September 30, 2024
Primary Geographic MarketsHome Comfort SolutionsBuilding Climate SolutionsCorporate and OtherConsolidated
United States$971.1 $441.9 $— $1,413.0 
Canada61.7 23.4 — 85.1 
Other international— — — — 
Total$1,032.8 $465.3 $— $1,498.1 

For the Three Months Ended September 30, 2023
Primary Geographic MarketsHome Comfort SolutionsBuilding Climate SolutionsCorporate and OtherConsolidated
United States$842.1 $376.8 $— $1,218.9 
Canada54.2 28.7 — 82.9 
Other international— — 64.5 64.5 
Total$896.3 $405.5 $64.5 $1,366.3 

For the Nine Months Ended September 30, 2024
Primary Geographic MarketsHome Comfort SolutionsBuilding Climate SolutionsCorporate and OtherConsolidated
United States$2,520.7 $1,244.2 $— $3,764.9 
Canada169.0 62.4 — 231.4 
Other international— — — — 
Total$2,689.7 $1,306.6 $— $3,996.3 

For the Nine Months Ended September 30, 2023
Primary Geographic MarketsHome Comfort SolutionsBuilding Climate SolutionsCorporate and OtherConsolidated
United States$2,350.0 $1,053.5 $— $3,403.5 
Canada163.6 68.0 — 231.6 
Other international— — 192.0 192.0 
Total$2,513.6 $1,121.5 $192.0 $3,827.1 
11


Home Comfort Solutions - We manufacture and market a broad range of furnaces, air conditioners, heat pumps, packaged heating and cooling systems, equipment and accessories to improve indoor air quality, comfort control products, replacement parts and supplies and related products for both the residential replacement and new construction markets in North America. These products are sold under various brand names and are sold either through direct sales to a network of independent installing dealers, including through our network of Lennox stores or to independent distributors. For the three months ended September 30, 2024 and 2023, direct sales represented 73% and 77% of revenues, and sales to independent distributors represented the remainder. For the nine months ended September 30, 2024 and 2023, direct sales represented 74% and 75% of revenues, and sales to independent distributors represented the remainder. Given the nature of our business, customer product orders are fulfilled at a point in time and not over a period of time.

Building Climate Solutions - In North America, we manufacture and sell unitary heating and cooling equipment used in light commercial applications, such as low-rise office buildings, restaurants, retail centers, churches and schools. These products are distributed primarily through commercial contractors and directly to national account customers in the planned replacement, emergency replacement and new construction markets. We manufacture and market equipment for the commercial refrigeration markets under the Heatcraft Worldwide Refrigeration name. Our products are used in the food retail, food service, cold storage as well as non-food refrigeration markets. We sell these products to distributors, installing contractors, engineering design firms, original equipment manufacturers and end-users. Lennox National Account Services provides installation, service and preventive maintenance for HVAC national account customers in the United States and Canada. AES manufactures curb, curb adapters, drop box diffusers, offers HVAC recycling and salvage services and focuses on multi-family HVAC replacement for expired mechanical assets. Revenue related to service contracts is recognized as the services are performed under the contract based on the relative fair value of the services provided. For the three months ended September 30, 2024 and 2023, equipment sales represented 80% and 88% of revenues and the remainder of our revenue was generated from our service business. For the nine months ended September 30, 2024 and 2023, equipment sales represented 81% and 87% of revenues and the remainder of our revenue was generated from our services business.

Corporate and Other - In Europe, we manufactured and marketed equipment for the global commercial refrigeration markets. We also manufactured and sold unitary heating and cooling products and applied systems. A de minimis amount of segment revenue related to services for start-up and commissioning activities. In the fourth quarter of 2023, we completed the divestiture of our European operations.
Contract Liabilities - Our contract liabilities consist of advance payments and deferred revenue. Net contract liabilities consisted of the following (in millions) as of:

September 30, 2024December 31, 2023
Contract assets$2.0 $2.2 
Contract liabilities - current(4.2)(4.7)
Contract liabilities - noncurrent(8.1)(7.5)
Total$(10.3)$(10.0)

For the three months ended September 30, 2024 and 2023, we recognized revenue of $0.7 million and $2.8 million and for the nine months ended September 30, 2024 and 2023, we recognized revenue of $6.8 million and $7.0 million related to our contract liabilities at January 1, 2024 and 2023, respectively. Impairment losses recognized in our receivables and contract assets were de minimis in 2024 and 2023.

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7. Other Financial Statement Details:
Inventories:
The components of inventories are as follows (in millions) as of:
September 30, 2024December 31, 2023
Finished goods$443.2 $509.4 
Work in process13.7 9.6 
Raw materials and parts369.3 314.2 
Subtotal826.2 833.2 
Excess of current cost over last-in, first-out cost(137.0)(134.1)
Total inventories, net$689.2 $699.1 

Goodwill:
The changes in the carrying amount of goodwill in 2024, in total and by segment, are summarized in the table below (in millions):
Balance as of December 31, 2023
Goodwill
   Adjustment (1)
Balance as of September 30, 2024
Home Comfort Solutions$26.1 $— $26.1 
Building Climate Solutions (1)
196.0 (2.2)193.8 
Total Goodwill$222.1 $(2.2)$219.9 

(1) As discussed in Note 13, an update to our purchase price allocation of AES in the first quarter of 2024 resulted in a $2.2 million reduction of goodwill.

We monitor our reporting units for indicators of impairment throughout the year to determine if a change in facts or circumstances warrants a re-evaluation of our goodwill. We have not recorded any goodwill impairments for the nine months ended September 30, 2024 or in any periods presented for our continuing businesses.

Derivatives:

Objectives and Strategies for Using Derivative Instruments

Commodity Price Risk - We utilize a cash flow hedging program to mitigate our exposure to volatility in the prices of metal commodities used in our production processes. Our hedging program includes the use of futures contracts to lock in prices, and as a result, we are subject to derivative losses should the metal commodity prices decrease and gains should the prices increase. We utilize a dollar cost averaging strategy so that a higher percentage of commodity price exposures are hedged near-term and lower percentages are hedged at future dates. This strategy allows for protection against near-term price volatility while allowing us to adjust to market price movements over time.

Interest Rate Risk - A portion of our debt bears interest at variable rates, and as a result, we are subject to variability in the cash paid for interest. To mitigate a portion of that risk, we may choose to engage in an interest rate swap hedging strategy to eliminate the variability of interest payment cash flows. We are not currently hedged against interest rate risk.

Foreign Currency Risk - Foreign currency exchange rate movements create a degree of risk by affecting the U.S. dollar value of assets and liabilities arising in foreign currencies. We seek to mitigate the impact of currency exchange rate movements on certain short-term transactions by periodically entering into foreign currency forward contracts.

Cash Flow Hedges

We have foreign exchange forward contracts and commodity futures contracts designated as cash flow hedges that are scheduled to mature through February 2026. Unrealized gains or losses from our cash flow hedges are included in Accumulated other comprehensive loss (“AOCL”) and are expected to be reclassified into earnings within the next 17 months
13

based on the prices of the commodities and foreign currencies at the settlement dates. We recorded the following amounts in AOCL related to our cash flow hedges (in millions) as of:
September 30, 2024December 31, 2023
Unrealized losses (gains), net on unsettled contracts$(5.5)$2.6 
Income tax (benefit) expense 1.3 (0.6)
Unrealized losses (gains), net included in AOCL, net of tax (1)
$(4.2)$2.0 
(1) Assuming commodity prices and foreign currency exchange rates remain constant, we expect to reclassify $4.0 million of derivative gain as of September 30, 2024 into earnings within the next 12 months.

Stock-Based Compensation:

We issue various long-term incentive awards, including performance share units, restricted stock units and stock appreciation rights under the Lennox International Inc. 2019 Equity and Incentive Plan, as it may be amended and restated from time to time. Stock-based compensation expense related to continuing operations is included in Selling, general and administrative expenses in the accompanying Consolidated Statements of Operations as follows (in millions):
For the Three Months Ended September 30,For the Nine Months Ended September 30,
2024202320242023
Stock-based compensation expense
$6.8 $9.7 $20.1 $23.5 

8. Pension Benefit Plans:

The components of net periodic benefit cost for pension benefits were as follows (in millions):
For the Three Months Ended September 30,For the Nine Months Ended September 30,
2024202320242023
Service cost$0.4 $0.5 $1.2 $1.6 
Interest cost2.2 2.2 6.5 6.7 
Expected return on plan assets(1.9)(2.4)(5.7)(7.1)
Recognized actuarial loss0.3 — 0.7 0.6 
Other— 0.3 — (0.1)
Settlements and curtailments0.1 0.3 0.4 0.4 
Net periodic benefit cost$1.1 $0.9 $3.1 $2.1 
9. Income Taxes:

As of September 30, 2024, we had approximately $4.5 million in total gross unrecognized tax benefits. If recognized, $4.5 million would be recorded through the Consolidated Statements of Operations.

Our effective tax rate was 19.3% for the nine months ended September 30, 2024 compared to 21.0% for the nine months ended September 30, 2023. The decrease in rate is primarily due to a discrete adjustment in the third quarter of 2023 related to the 2023 European divestiture.

We are currently under a limited scope audit by the Internal Revenue Service for our 2021 and 2022 tax years. There are also ongoing U.S. state and local audits and other foreign audits covering fiscal years 2017 through 2023. We are generally no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by taxing authorities for years prior to 2017.
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10. Lines of Credit and Financing Arrangements:

The following table summarizes our outstanding debt obligations and their classification in the accompanying Consolidated Balance Sheets (in millions) as of:

September 30, 2024December 31, 2023
Commercial paper$— $150.0 
Current maturities of long-term debt:
Finance lease obligations$13.2 $12.1 
Senior unsecured notes300.0 — 
Debt issuance costs(0.5)— 
    Total current maturities of long-term debt
$312.7 $12.1 
Long-Term Debt:
Finance lease obligations$34.6 $32.7 
Credit agreement— 20.0 
Senior unsecured notes800.0 1,100.0 
Debt issuance costs(7.0)(9.6)
Total long-term debt$827.6 $1,143.1 
Total debt$1,140.3 $1,305.2 

Foreign Obligations

Through several of our foreign subsidiaries, we have facilities available to assist us in financing seasonal borrowing needs for our foreign locations. We had no outstanding foreign obligations as of September 30, 2024 or December 31, 2023 and there were no borrowings or repayments on these facilities during the nine months ended September 30, 2024.

Commercial Paper Program

On October 25, 2023, we established a commercial paper program (the “Program”), as a replacement to our Asset Securitization Program which expired in November 2023, pursuant to which we may issue short-term, unsecured commercial paper notes (the “CP Notes”) under the exemption from registration contained in Section 4(a)(2) of the Securities Act of 1933, as amended. Amounts available under the Program may be borrowed, repaid, and re-borrowed from time to time, with the aggregate face or principal amount of the CP Notes outstanding under the Program at any time not to exceed $500.0 million. The CP Notes have maturities of up to 397 days from the date of issue and rank pari passu with all of our other unsecured and unsubordinated indebtedness. The net proceeds from issuances of the CP Notes are typically used for general corporate purposes. Our revolving credit facility serves as a liquidity backstop for the repayment of CP Notes outstanding under the Program. There were no CP Notes currently outstanding under the Program as of September 30, 2024.

Our weighted average borrowing rate on the Program was as follows as of:
September 30, 2024December 31, 2023
Weighted average borrowing rate— %5.66 %

Credit Agreement

We have an existing $1.1 billion unsecured revolving credit facility dated as of July 14, 2021 (as amended, the "Credit Agreement"), with JPMorgan Chase Bank, N.A., as administrative agent, and the other lenders party thereto. We had no outstanding borrowings and $1.7 million committed to standby letters of credit as of September 30, 2024. Subject to covenant limitations, $1,098.3 million was available for future borrowings after taking into consideration outstanding borrowings under our Program. The Credit Agreement includes a subfacility for swingline loans up to $65.0 million. The Credit Agreement will expire and outstanding loans will be required to be repaid in July 2026, unless maturity is extended by the lenders pursuant to two one-year extension options that we may request under the Credit Agreement.

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Our weighted average borrowing rate on the facility was as follows as of:
September 30, 2024December 31, 2023
Weighted average borrowing rate— %6.67 %

The Credit Agreement is guaranteed by certain of our subsidiaries and contains customary covenants applicable to us and our subsidiaries including limitations on indebtedness, liens, dividends, stock repurchases, mergers, and sales of all or substantially all of our assets. In addition, the Credit Agreement contains a financial covenant requiring us to maintain, as of the last day of each fiscal quarter for the four prior fiscal quarters, a Total Net Leverage Ratio of no more than 3.50 to 1.00 (or, at our election, on up to two occasions following a material acquisition, 4.00 to 1.00).

Our Credit Agreement contains customary events of default. These events of default include nonpayment of principal or other amounts, material inaccuracy of representations and warranties, breach of covenants, default on certain other indebtedness or receivables securitizations (cross default), certain voluntary and involuntary bankruptcy events, and the occurrence of a change in control. A cross default under our credit facility could occur if:

• We fail to pay any principal or interest when due on any other indebtedness or receivables securitization exceeding $75.0 million; or

• We are in default in the performance of, or compliance with any term of any other indebtedness in an aggregate principal amount exceeding $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.

Each of our major debt agreements contains provisions by which a default under one agreement causes a default in the others (a cross default). If a cross default under our Credit Agreement or our senior unsecured notes were to occur, it could have a wider impact on our liquidity than might otherwise occur from a default of a single debt instrument or lease commitment.

If any event of default occurs and is continuing, the administrative agent, or lenders with a majority of the aggregate commitments may require the administrative agent to, terminate our right to borrow under our Credit Agreement and accelerate amounts due under our Credit Agreement (except for a bankruptcy event of default, in which case such amounts will automatically become due and payable and the lenders’ commitments will automatically terminate).

We are currently in compliance with all covenant requirements.

Senior Unsecured Notes

In September 2023, we issued $500.0 million of senior unsecured notes, which will mature in September 2028 (the "2028 Notes") with interest being paid semi-annually in March and September at 5.50%. We issued two series of senior unsecured notes on July 30, 2020 for $300.0 million each, which will mature on August 1, 2025 (the "2025 Notes") and August 1, 2027 (the "2027 Notes," and collectively with the 2025 Notes and the 2028 Notes, the "Notes") with interest being paid semi-annually in February and August at 1.35% and 1.70% respectively, per annum.

In the event of a credit rating downgrade below investment grade resulting from a change of control, holders of our senior unsecured notes will have the right to require us to repurchase all or a portion of the senior unsecured notes at a repurchase price equal to 101% of the principal amount of the notes, plus accrued and unpaid interest, if any. All the Notes are guaranteed, on a senior unsecured basis, by certain of our subsidiaries that guarantee indebtedness under our Credit Agreement (the "Guarantor Subsidiaries"). The indenture governing the Notes contains covenants that, among other things, limit our ability and the ability of the subsidiary guarantors to: create or incur certain liens; enter into certain sale and leaseback transactions; and enter into certain mergers, consolidations and transfers of substantially all of our assets. The indenture also contains a cross default provision which is triggered if we default on other debt of at least $75.0 million in principal which is then accelerated, and such acceleration is not rescinded within 30 days of the notice date. We are currently in compliance with all covenant requirements.

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11. Comprehensive Income (Loss):

The following table provides information on items reclassified from AOCL to Net income in the accompanying Consolidated Statements of Operations (in millions):
For the Three Months Ended September 30,For the Nine Months Ended September 30,Affected Line Item(s) in the Consolidated Statements of Operations
2024202320242023
(Losses) Gains on Cash Flow Hedges:
Derivatives contracts$(0.8)$(0.8)$(1.2)$(1.2)Cost of goods sold; Losses (gains) and other expenses, net
Income tax (expense) benefit(0.2)0.2 (0.3)0.3 Provision for income taxes
Net of tax$(0.6)$(0.6)$(0.9)$(0.9)
Defined Benefit Plan items:
Pension and post-retirement benefit costs$(0.3)$— $(0.7)$(0.6)Other expense (income), net
Pension settlements(0.1)(0.3)(0.4)(0.4)Pension settlements
Income tax (expense) benefit(0.1)0.1 (0.3)0.2 Provision for income taxes
Net of tax$(0.3)$(0.2)$(0.8)$(0.8)
Total reclassifications from AOCL$(0.9)$(0.8)$(1.7)$(1.7)

The following table provides information on changes in AOCL, by component (net of tax), for the nine months ended September 30, 2024 (in millions):
(Losses) Gains on Cash Flow HedgesShare of Equity Method Investments Other Comprehensive IncomeDefined Benefit Pension Plan ItemsForeign Currency Translation AdjustmentsTotal AOCL
Balance as of December 31, 2023
$(2.0)$0.6 $(44.2)$(11.3)$(56.9)
Other comprehensive income (loss) before reclassifications5.3 (0.2)(1.2)(19.4)(15.5)
Amounts reclassified from AOCL0.9 — 0.8 — 1.7 
Net other comprehensive income (loss)6.2 (0.2)(0.4)(19.4)(13.8)
Balance as of September 30, 2024
$4.2 $0.4 $(44.6)$(30.7)$(70.7)

12. Fair Value Measurements:

Fair Value Hierarchy

The methodologies used to determine the fair value of our financial assets and liabilities as of September 30, 2024 were the same as those used as of December 31, 2023.
Assets and Liabilities Carried at Fair Value on a Recurring Basis

Derivatives were classified as Level 2 and primarily valued using estimated future cash flows based on observed prices from exchange-traded derivatives. We also considered the counterparty's creditworthiness, or our own creditworthiness, as appropriate. Adjustments were recorded to reflect the risk of credit default, however, they were insignificant to the overall value of the derivatives. Refer to Note 7 for more information related to our derivative instruments.

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Other Fair Value Disclosures

The carrying amounts of Cash and cash equivalents, Short-term investments, Accounts and notes receivable, net, Accounts payable, and Short-term debt approximate fair value due to the short maturities of these instruments. The carrying amount of our Credit Agreement in Long-term debt also approximates fair value due to its variable-rate characteristics.

The fair value of our senior unsecured notes in Long-term debt, classified as Level 2, was based on the amount of future cash flows using current market rates for debt instruments of similar maturities and credit risk. The following table presents their fair value (in millions) as of:
September 30, 2024December 31, 2023
Senior unsecured notes$1,098.0 $1,079.3 

13. Prior Year Acquisition:

In October 2023, we completed the acquisition of AES, a company dedicated to service and sustainability in the light commercial market. Under the terms of the purchase agreement, a final working capital adjustment was completed in the first quarter of 2024. This working capital adjustment resulted in a $1.8 million reduction in the purchase price. Additionally, during the first quarter of 2024 we made certain purchase price adjustments. The following table details the purchase price adjustments that were made during the first quarter of 2024 (in millions):
December 31, 2023AdjustmentSeptember 30, 2024
Net tangible assets acquired$17.6 $(1.7)$15.9 
Intangible assets acquired36.9 2.1 39.0 
Goodwill40.4 (2.2)38.2 
Total investment$94.9 $(1.8)$93.1 
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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that are based on information currently available to management as well as management’s assumptions and beliefs as of the date such statements were made. All statements, other than statements of historical fact, included in this Quarterly Report on Form 10-Q constitute forward-looking statements, including but not limited to statements identified by forward-looking terminology, such as the words “may,” “will,” “should,” “plan,” “anticipate,” “believe,” “intend,” “estimate,” and “expect” and similar expressions. Such statements reflect our current views with respect to future events, based on what we believe are reasonable assumptions; however, such statements are subject to certain risks and uncertainties.

In addition to the specific uncertainties discussed elsewhere in this Quarterly Report on Form 10-Q, the risk factors set forth in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023, and those set forth in Part II, “Item 1A. Risk Factors” of this report, if any, may affect our performance and results of operations. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may differ materially from those in the forward-looking statements. We disclaim any intention or obligation to update or review any forward-looking statements or information, whether as a result of new information, future events or otherwise, except as required by law.

Business Overview

We operate in two reportable business segments of the HVACR industry, Home Comfort Solutions and Building Climate Solutions. In addition to the two major business segments, Corporate and Other is also reported as a segment. For more detailed information regarding our reportable segments, see Note 2 in the Notes to the Consolidated Financial Statements.

Our fiscal quarterly periods are comprised of approximately 13 weeks, but the number of days per quarter may vary year-over-year. Our quarterly reporting periods usually end on the Saturday closest to the last day of March, June, and September. Our fourth quarter and fiscal year ends on December 31, regardless of the day of the week on which December 31 falls. For convenience, throughout this Management’s Discussion and Analysis of Financial Condition and Results of Operations, the 13-week periods comprising each fiscal quarter are denoted by the last day of the respective calendar quarter.

We sell our products and services through a combination of direct sales, distributors and company-owned stores. The demand for our products and services is seasonal and can be significantly impacted by the weather. Warmer than normal summer temperatures generate demand for replacement air conditioning and refrigeration products and services, and colder than normal winter temperatures have a similar effect on heating products and services. Conversely, cooler than normal summers and warmer than normal winters depress the demand for HVACR products and services. In addition to weather, demand for our products and services is influenced by national and regional economic and demographic factors, such as interest rates, the availability of financing, regional population and employment trends, new construction, general economic conditions, and consumer spending habits and confidence. A substantial portion of the sales in each of our business segments is attributable to replacement business, with the balance comprised of new construction business.

The principal elements of cost of goods sold are components, raw materials, factory overhead, labor, estimated costs of warranty expense, and freight and distribution costs. The principal raw materials used in our manufacturing processes are steel, aluminum and copper. In recent years, pricing volatility for these commodities and related components has impacted us and the HVACR industry in general. We seek to mitigate the impact of certain commodity price volatility through a combination of pricing actions, vendor contracts, improved production efficiency, and cost reduction initiatives. We also partially mitigate volatility in the prices of these commodities by entering into futures contracts and fixed forward contracts.

Financial Overview

Results for the third quarter of 2024 were driven by overall year-over-year sales and profit increases. Net sales increased 15% and segment profit increased $45 million for our Home Comfort Solutions segment. Net sales increased 15% and segment profit increased $9 million for our Building Climate Solutions segment. Net sales decreased $65 million and segment loss increased $6 million for our Corporate and Other segment. Our European businesses were sold in the fourth quarter of 2023 and generated $65 million in net sales with segment profit of $4 million in the third quarter of 2023.

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Financial Highlights

•Net sales of $1,498 million in the third quarter of 2024 reflected a 10% increase as compared to the same period in 2023.
•Operating income in the third quarter of 2024 increased $117 million to $303 million primarily driven by favorable price and mix and higher sales volumes.
•Net income for the third quarter of 2024 was $239 million.
•Diluted earnings per share was $6.68 per share in the third quarter of 2024 as compared to $3.65 per share in the same period in 2023.
•For the nine months ended September 30, 2024, we returned $119 million to shareholders through dividend payments.

Three Months Ended September 30, 2024 Compared to Three Months Ended September 30, 2023 - Consolidated Results

The following table provides a summary of our financial results, including information presented as a percentage of net sales:
 For the Three Months Ended September 30,
 Dollars (in millions)Percent
Change
Fav/(Unfav)		Percent of Sales
 2024202320242023
Net sales$1,498.1 $1,366.3 9.6 %100.0 %100.0 %
Cost of goods sold1,009.7 937.8 (7.7)67.4 68.6 
Gross profit488.4 428.5 14.0 32.6 31.4 
Selling, general and administrative expenses184.4 178.9 (3.1)12.3 13.1 
Losses and other expenses, net3.1 3.5 11.4 0.2 0.3 
Restructuring charges— 0.3 100.0 — — 
Impairment on assets held for sale— 63.2 100.0 — 4.6 
Income from equity method investments(2.4)(4.2)(42.9)(0.2)(0.3)
Operating income$303.3 $186.8 62.4 %20.2 %13.7 %

Net Sales

Net sales for the third quarter of 2024 increased 10% as compared to the same period in 2023. This was primarily due to higher sales volumes of 9%, favorable price and mix of 4%, and an increase in sales volumes of 2% from our AES acquisition, which were partially offset by a 5% reduction in sales due to the fourth quarter 2023 sale of our European businesses.

Gross Profit

Gross profit margins in the third quarter of 2024 increased 120 basis points ("bps") to 32.6% as compared to 31.4% in the same period in 2023. Gross margins increased 250 bps from favorable price and mix, which was partially offset by 70 bps from higher material and product costs, including LIFO, 40 bps from higher freight and distribution costs, and 20 bps from miscellaneous other items.

Selling, General and Administrative Expenses

Selling, general and administrative expenses ("SG&A") increased $6 million to $184 million in the third quarter of 2024 as compared to $179 million in the same period in 2023 primarily due to higher employee related costs including increased incentive compensation, which was partially offset by a $14 million reduction in SG&A expenses from our 2023 divestiture of our European businesses. SG&A decreased 80 bps to 12.3%.
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Losses (gains) and Other Expenses, Net

Losses (gains) and other expenses, net for the third quarter of 2024 and 2023 included the following (in millions):
For the Three Months Ended September 30,
20242023
Foreign currency exchange losses (gains)
1.6 (1.2)
Gain on disposal of fixed assets
(0.7)(0.2)
Other operating income
(0.5)(0.1)
Net change in unrealized losses (gains) on unsettled futures contracts
0.1 — 
Environmental liabilities and special litigation charges
2.6 3.9 
Other items, net
— 1.1 
Losses (gains) and other expenses, net (pre-tax)$3.1 $3.5 

Income from Equity Method Investments

We participate in two joint ventures that are engaged in the manufacture and sale of compressors, unit coolers, and condensing units. We exert significant influence over these affiliates based upon our ownership, but do not control them due to venture partner participation. Accordingly, these joint ventures are accounted for under the equity method and their financial position and results of operations are not consolidated. We recognized income from equity method investments of $2 million in the third quarter of 2024 and $4 million in the third quarter of 2023.

Interest Expense, net

Interest expense, net decreased to $9 million in the third quarter of 2024 from $11 million in the same period in 2023 due to lower borrowings.

Income Taxes

Our effective tax rate was 18.7% for the third quarter of 2024 as compared to 25.6% in the same period in 2023. The decrease in rate is primarily due to a discrete adjustment in the third quarter of 2023 related to the 2023 European divestiture.

Third Quarter of 2024 Compared to Third Quarter of 2023 - Results by Segment

Home Comfort Solutions

The following table presents our Home Comfort Solutions segment's net sales and profit for the third quarter of 2024 and 2023 (dollars in millions):
For the Three Months Ended September 30,
20242023Difference% Change
Net sales$1,032.8 $896.3 $136.5 15 %
Profit$226.5 $181.4 $45.1 25 %
% of net sales21.9 %20.2 %
Net sales increased 15% in the third quarter of 2024 as compared to the same period in 2023 primarily due to higher sales volumes of 11% and favorable price and mix of 4%.

Segment profit in the third quarter of 2024 increased by $45 million as compared to the same period in 2023, primarily due to $35 million from higher sales volumes, and $33 million from favorable price and mix, which were partially offset by $8 million from higher SG&A costs, $7 million in higher costs primarily driven by the upcoming regulatory transition and rising commodity prices, and $8 million from miscellaneous other items.

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Building Climate Solutions

The following table presents our Building Climate Solutions segment's net sales and profit for the third quarter of 2024 and 2023 (dollars in millions):
For the Three Months Ended September 30,
2024
2023
Difference% Change
Net sales$465.3 $405.5 $59.8 15 %
Profit$105.9 $97.3 $8.6 9 %
% of net sales22.8 %24.0 %

Net sales increased 15% in the third quarter of 2024 as compared to the same period in 2023 primarily due to higher sales volumes of 7%, favorable price and mix of 2%, and a 6% increase in sales volumes from our AES acquisition.

Segment profit in the third quarter of 2024 increased $9 million as compared to the same period in 2023 primarily due to $10 million from favorable price and mix, $8 million from higher sales volumes, $4 million from our acquisition of AES, and $3 million from miscellaneous other items, which were partially offset by $10 million in higher factory inefficiencies, including costs related to the ramp up of our new factory in Mexico, and $6 million in increased SG&A expenses.

Corporate and Other

The following table presents our Corporate and Other segment's net sales and loss for the third quarter of 2024 and 2023 (dollars in millions):
For the Three Months Ended September 30,
2024
2023
Difference% Change
Net sales$— $64.5 $(64.5)(100)%
Loss$(29.1)$(23.4)$(5.7)(24)%

Net sales decreased $65 million and segment loss increased $6 million in the third quarter of 2024 as compared to the same period in 2023. Our European businesses, which were sold in 2023, generated $65 million in net sales and $4 million in segment profit in the third quarter of 2023. Excluding our European businesses, Corporate and Other costs increased $2 million in the third quarter of 2024 as compared to the same period in 2023 primarily due to higher employee related costs.


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Year-to-Date through September 30, 2024 Compared to Year-to-Date through September 30, 2023 - Consolidated Results

The following table provides a summary of our financial results, including information presented as a percentage of net sales:
 For the Nine Months Ended September 30,
 Dollars (in millions)Percent
Change
Fav/(Unfav)		Percent of Sales
 2024202320242023
Net sales$3,996.3 $3,827.1 4.4 %100.0 %100.0 %
Cost of goods sold2,679.7 2,634.1 (1.7)67.1 68.8 
Gross profit1,316.6 1,193.0 10.4 32.9 31.2 
Selling, general and administrative expenses523.6 527.6 0.8 13.1 13.8 
Losses (gains) and other expenses, net10.5 5.2 (101.9)0.3 0.1 
Restructuring charges— 0.2 100.0 — — 
Impairment on assets held for sale— 63.2 100.0 — 1.7 
Gain on sale from previous dispositions(1.6)— (100.0)— — 
Income from equity method investments(6.1)(8.0)(23.8)(0.2)(0.2)
Operating income$790.2 $604.8 30.7 %19.8 %15.8 %

Net Sales

Net sales increased 4% for the nine months ended September 30, 2024 as compared to the same period in 2023. This was primarily due to higher sales volumes of 5%, favorable price and mix of 3%, and an increase in sales volumes of 1% from our AES acquisition, which were partially offset by a 5% reduction in sales due to the fourth quarter 2023 sale of our European businesses.
Gross Profit

Gross profit margins for the nine months ended September 30, 2024 increased 170 bps to 32.9% as compared to 31.2% in the same period in 2023. Gross margins increased 270 bps from higher price and favorable mix, which was partially offset by 50 bps from higher material and product costs, including LIFO, and 50 bps from higher freight and distribution costs.

Selling, General and Administrative Expenses
SG&A decreased $4 million to $524 million for the nine months ended September 30, 2024 as compared to $528 million in the same period in 2023 primarily due to a $45 million reduction in SG&A expenses from our 2023 divestiture of our European businesses, which was partially offset by higher employee-related costs including increased incentive compensation. As a percentage of net sales, SG&A decreased 70 bps to 13.1% from 13.8%.

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Losses (gains) and Other Expenses, Net

Losses (gains) and other expenses, net for the nine months ended September 30, 2024 and 2023 included the following (in millions):
For the Nine Months Ended September 30,
20242023
Realized losses on settled future contracts$— $0.1 
Foreign currency exchange losses (gains)4.4 (4.2)
Gain on disposal of fixed assets(1.7)(1.4)
Other operating loss (income)0.4 (1.4)
Net change in unrealized losses (gains) on unsettled futures contracts0.1 (0.1)
Environmental liabilities and special litigation charges7.3 11.1 
Other items, net— 1.1 
Losses (gains) and other expenses, net (pre-tax)$10.5 $5.2 

Income from Equity Method Investments
Income from equity method investments decreased slightly to $6 million for the nine months ended September 30, 2024 as compared to $8 million in the same period in 2023.

Interest Expense, net

Interest expense, net decreased $7 million for the nine months ended September 30, 2024 to $33 million as compared to $40 million in the same period in 2023 primarily due to lower borrowings.

Income Taxes

Our effective tax rate was 19.3% for the nine months ended September 30, 2024 as compared to 21.0% in the same period in 2023. The decrease in rate was primarily due to a discrete adjustment in the third quarter of 2023 related to the 2023 European divestiture.

Year-to-Date through September 30, 2024 Compared to Year-to-Date through September 30, 2023 - Results by Segment

Home Comfort Solutions

The following table presents our Home Comfort Solutions segment's net sales and profit for the nine months ended September 30, 2024 and 2023 (dollars in millions):

For the Nine Months Ended September 30,
20242023Difference% Change
Net sales$2,689.7 $2,513.6 $176.1 7 %
Profit$567.1 $495.2 $71.9 15 %
% of net sales21.1 %19.7 %
Net sales increased 7% for the nine months ended September 30, 2024 as compared to the same period in 2023. This was primarily due to higher sales volumes of 4% and favorable price and mix of 3%.

Segment profit for the first nine months of 2024 increased $72 million as compared to the same period in 2023 primarily due to $95 million from favorable price and mix, and $33 million from higher sales volumes, which were partially offset by $23 million from higher SG&A costs, $19 million from higher freight and distribution costs, $5 million in higher costs primarily driven by the upcoming regulatory transition and rising commodity prices, and $9 million from miscellaneous other items.

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Building Climate Solutions

The following table presents our Building Climate Solutions segment's net sales and profit for the nine months ended September 30, 2024 and 2023 (dollars in millions):

For the Nine Months Ended September 30,
2024
2023
Difference% Change
Net sales$1,306.6 $1,121.5 $185.1 17 %
Profit$298.1 $250.3 $47.8 19 %
% of net sales22.8 %22.3 %

Net sales increased 17% for the nine months ended September 30, 2024 as compared to the same period in 2023. This was primarily due to higher sales volumes of 8%, favorable price and mix of 3%, and a 6% increase in sales volumes from our AES acquisition.
Segment profit for the first nine months of 2024 increased $48 million as compared to the same period in 2023 primarily due to $32 million from higher price and mix, $28 million from higher sales volumes, $13 million from our acquisition of AES, and $2 million from miscellaneous other items, which were partially offset by $17 million from higher factory inefficiencies, which includes costs related to the ramp up of our new facility in Mexico, and $10 million from higher SG&A costs.

Corporate and Other

The following table presents our Corporate and Other segment's net sales and loss for the nine months ended September 30, 2024 and 2023 (dollars in millions):

For the Nine Months Ended September 30,
2024
2023
Difference% Change
Net sales$— $192.0 $(192.0)(100)%
Loss$(76.6)$(65.2)$(11.4)(17)%

Net sales decreased $192 million and segment loss increased $11 million during the nine months ended September 30, 2024 as compared to the same period in 2023. Our European businesses, which were sold in 2023, generated net sales of $192 million and a profit of $6 million in the nine months ended September 30, 2023. Excluding our European businesses, Corporate and Other costs increased $5 million in the first nine months of 2024 as compared to the same period in 2023 primarily due to higher incentive compensation and other employee costs and wage inflation.


Liquidity and Capital Resources

Our working capital and capital expenditure requirements are generally met through internally generated funds, bank lines of credit and a commercial paper program (as described below). Working capital needs are generally greater in the first and second quarters due to the seasonal nature of our business cycle.

Statement of Cash Flows

The following table summarizes our cash flow activity for the nine months ended September 30, 2024 and 2023 (in millions):
For the Nine Months Ended September 30,
20242023
Net cash provided by operating activities$613.3 $429.9 
Net cash used in investing activities(108.1)(124.5)
Net cash used in financing activities(327.4)(215.6)
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Net Cash Provided By Operating Activities - The change in net cash provided by operating activities for the nine months ended September 30, 2024 compared to the net cash provided by operating activities for the same period in 2023 primarily reflects changes in working capital and an increase in net income.

Net Cash Used In Investing Activities - Capital expenditures were $103 million for the nine months ended September 30, 2024 compared to $125 million in the same period of 2023. Capital expenditures in 2024 were related to our Commercial factory in Mexico, the general expansion of manufacturing capacity and equipment, and investments in systems and software to support the overall enterprise.

Net Cash Used In Financing Activities - Net cash used in financing activities for the nine months ended September 30, 2024 increased to $327 million as compared to $216 million in the same period of 2023. The change was primarily due to changes in net borrowings and repayments of long-term debt and repurchase of common stock through our share repurchase program. We returned $119 million to shareholders through dividend payments for the nine months ended September 30, 2024 and $153 million in the same period of 2023.

Debt Position

The following table details our lines of credit and financing arrangements as of September 30, 2024 (in millions):
Outstanding Borrowings
Commercial paper:$— 
Current maturities of long-term debt:
Finance lease obligations$13.2 
Senior unsecured notes300.0 
Debt issuance costs(0.5)
     Total current maturities of long-term debt$312.7 
Long-term debt:
Finance lease obligations$34.6 
Credit agreement— 
Senior unsecured notes800.0 
Debt issuance costs(7.0)
     Total long-term debt$827.6 
Total debt$1,140.3 

Commercial Paper Program

On October 25, 2023, we established a commercial paper program, as a replacement to our Asset Securitization Program which expired in November 2023, pursuant to which we may issue short-term, unsecured commercial paper notes under the exemption from registration contained in Section 4(a)(2) of the Securities Act of 1933, as amended. Amounts available under the Program may be borrowed, repaid, and re-borrowed from time to time, with the aggregate face or principal amount of the CP Notes outstanding under the Program at any time not to exceed $500.0 million. The CP Notes have maturities of up to 397 days from the date of issue and rank pari passu with all of our other unsecured and unsubordinated indebtedness. The net proceeds from issuances of the CP Notes are typically used for general corporate purposes. Our revolving credit facility serves as a liquidity backstop for the repayment of CP Notes outstanding under the Program. There are no CP Notes currently outstanding under the Program as of September 30, 2024.

Credit Agreement

We have an existing $1.1 billion unsecured revolving credit facility dated as of July 14, 2021 (as amended, the "Credit Agreement"), with JPMorgan Chase Bank, N.A., as administrative agent, and the other lenders party thereto. We had no outstanding borrowings and $1.7 million committed to standby letters of credit as of September 30, 2024. Subject to covenant
26

limitations, $1,098.3 million was available for future borrowings after taking into consideration outstanding borrowings under our Program. The Credit Agreement includes a subfacility for swingline loans up to $65.0 million. The Credit Agreement will expire and outstanding loans will be required to be repaid in July 2026, unless maturity is extended by the lenders pursuant to two one-year extension options that we may request under the Credit Agreement.

Senior Unsecured Notes

In September 2023, we issued $500.0 million of senior unsecured notes, which will mature in September 2028 (the "2028 Notes") with interest being paid semi-annually in March and September at 5.50%. We issued two series of senior unsecured notes on July 30, 2020 for $300.0 million each, which will mature on August 1, 2025 (the "2025 Notes") and August 1, 2027 (the "2027 Notes," and collectively with the 2025 Notes and the 2028 Notes, the "Notes") with interest being paid semi-annually in February and August at 1.35% and 1.70% respectively, per annum.

In the event of a credit rating downgrade below investment grade resulting from a change of control, holders of our senior unsecured notes will have the right to require us to repurchase all or a portion of the senior unsecured notes at a repurchase price equal to 101% of the principal amount of the notes, plus accrued and unpaid interest, if any. All the Notes are guaranteed, on a senior unsecured basis, by the Guarantor Subsidiaries. The indenture governing the Notes contains covenants that, among other things, limit our ability and the ability of the Guarantor Subsidiaries to: create or incur certain liens; enter into certain sale and leaseback transactions; and enter into certain mergers, consolidations and transfers of substantially all of our assets. The indenture also contains a cross default provision which is triggered if we default on other debt of at least $75.0 million in principal which is then accelerated, and such acceleration is not rescinded within 30 days of the notice date. As of September 30, 2024, we believe we were in compliance with all covenant requirements.

Financial Leverage

We periodically review our capital structure to ensure the appropriate levels of leverage and liquidity. We may access the capital markets, as necessary, based on business needs and to take advantage of favorable interest rate environments or other market conditions. We also evaluate our debt-to-capital and debt-to-EBITDA ratios to determine, among other considerations, the appropriate targets for capital expenditures and share repurchases under our share repurchase programs. Our debt-to-total-capital ratio decreased to 60% as of September 30, 2024 from 82% as of December 31, 2023.

As of September 30, 2024, our senior credit ratings were Baa2 with a stable outlook, and BBB with a stable outlook, by Moody's Investors Service, Inc. ("Moody's") and Standard & Poor's Rating Group ("S&P"), respectively. The security ratings are not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time by the assigning rating agency. Each rating should be evaluated independently of any other rating. Our goal is to maintain investment grade ratings from Moody's and S&P to help ensure the capital markets remain available to us.

Liquidity

We believe our cash and cash equivalents of $243.1 million, future cash generated from operations and available borrowing capacity are sufficient to fund operations, planned capital expenditures, future contractual obligations, potential share repurchases and dividends, and other needs in the foreseeable future. Included in our cash and cash equivalents of $243.1 million as of September 30, 2024 was $25 million of cash held in foreign locations. Our cash held in foreign locations is used for investing and operating activities in those locations, and we generally do not have the need or intent to repatriate those funds to the United States. An actual repatriation in the future from our non-U.S. subsidiaries could be subject to foreign withholding taxes and U.S. state taxes.

Guarantees Related to Our Debt Obligations

Our senior unsecured notes were issued by Lennox International Inc. ("Parent") and are unconditionally guaranteed by the Guarantor Subsidiaries. The Guarantor Subsidiaries are 100% owned and consolidated, all guarantees are full and unconditional, and all guarantees are joint and several.

The following combined Parent and Guarantor Subsidiaries financial information is presented as of September 30, 2024 and December 31, 2023 and for the three and nine months ended September 30, 2024 (in millions):

27

September 30, 2024December 31, 2023
Current assets$1,646.7 $1,291.0 
Non-current assets6,734.9 5,737.1 
Current liabilities1,082.7 843.3 
Non-current liabilities1,216.8 1,477.3 
Amounts due to non-guarantor subsidiaries(581.7)(472.3)
For the Three Months Ended September 30, 2024For the Nine Months Ended September 30, 2024
Net Sales$1,470.4 $3,936.3 
Gross Profit403.4 1,065.2 
Net Income521.1 1,366.9 

Off Balance Sheet Arrangements

We have no off-balance sheet arrangements that we believe may have a material current or future effect on our financial condition, liquidity or results of operations.

Commitments, Contingencies, and Guarantees

For information regarding our commitments, contingencies, and guarantees, see Note 4 in the Notes to the Consolidated Financial Statements.

Recent Accounting Pronouncements

There were no recent accounting pronouncements that are expected to have a material impact on our financial statements and disclosures.

Item 3. Quantitative and Qualitative Disclosures About Market Risk
For quantitative and qualitative disclosures about market risk affecting LII, see "Quantitative and Qualitative Disclosures About Market Risk" in Item 7A of Part II of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023. Our exposure to market risk has not changed materially since December 31, 2023.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

As required by Rule 13a-15 under the Exchange Act, we carried out an evaluation, under the supervision and with the participation of our current management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that, as of September 30, 2024, our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the applicable rules and forms, and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Part II - Other Information
28


Item 1. Legal Proceedings

We are involved in a number of claims and lawsuits incidental to the operation of our businesses. Where appropriate, insurance coverages are maintained and estimated costs are recorded for such claims and lawsuits. It is management's opinion that none of these claims or lawsuits will have a material adverse effect, individually or in the aggregate, on our financial position, results of operations or cash flows.

Item 1A. Risk Factors
In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the risk factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023, which could materially affect our business, financial condition or results of operations. There have been no material changes to our risk factors from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
In the third quarter of 2024, we purchased shares of our common stock as follows:
Total Number of Shares Purchased
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) (1)
July 1 through July 31— $— — $546.0 
August 1 through August 313,000 $579.50 3,000 $544.3 
September 1 through September 3020,000 $588.77 20,000 $532.5 
23,000 23,000 

(1) Since the inception of the Company’s share repurchase program in 2008, the Board has authorized share repurchases in an amount not to exceed $4.0 billion (the "Share Repurchase Plans"). The Share Repurchase Plans do not have an expiration date. See Note 5 in the Notes to the Consolidated Financial Statement for further details.

Item 5. Other Information

Rule 10b5-1 Plan Elections

During the quarter ended September 30, 2024, none of our directors or officers adopted, modified, or terminated any Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement, as such terms are defined in Item 408(a) of Regulation S-K.
29

Item 6. Exhibits
3.1
3.2
4.1
4.2
4.3
4.5
4.6
4.7
4.8
22.1
31.1
31.2
32.1
101INS Inline XBRL Instance Document
101SCH Inline XBRL Taxonomy Extension Schema Document
101CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document
101LAB Inline XBRL Taxonomy Extension Label Linkbase Document
101PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document
101DEF Inline XBRL Taxonomy Extension Definition Linkbase Document
104Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)
30


SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

LENNOX INTERNATIONAL INC.

By: /s/ Michael P. Quenzer
Michael P. Quenzer
Chief Financial Officer
(on behalf of registrant and as principal financial officer)


Date: October 23, 2024            



31

Exhibit 31.1
CERTIFICATION
I, Alok Maskara, certify that:
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.
Date: October 23, 2024
/s/ Alok Maskara
Alok Maskara
Chief Executive Officer



Exhibit 31.2
CERTIFICATION
I, Michael P. Quenzer, certify that:
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.
Date: October 23, 2024
/s/ Michael P. Quenzer
Michael P. Quenzer
Chief Financial Officer



Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Lennox International Inc. (the “Company”) on Form 10-Q for the quarter ended September 30, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned, Alok Maskara, Chief Executive Officer of the Company, and Michael P. Quenzer, Chief Financial Officer of the Company, certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that to his or her knowledge:
(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/ Alok Maskara
Alok Maskara
Chief Executive Officer
October 23, 2024
/s/ Michael P. Quenzer
Michael P. Quenzer
Chief Financial Officer
October 23, 2024
A signed original of this written statement has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request. The foregoing certification is being furnished to the Securities and Exchange Commission as an exhibit to the report.


v3.24.3
Cover - shares
 9 Months Ended
Sep. 30, 2024
Oct. 14, 2024
Cover [Abstract]    
Document Type 10-Q  
Document Quarterly Report true  
Document Period End Date Sep. 30, 2024  
Document Transition Report false  
Entity File Number 001-15149  
Entity Registrant Name LENNOX INTERNATIONAL INC  
Entity Incorporation, State or Country Code DE  
Entity Tax Identification Number 42-0991521  
Entity Address, Address Line One 2140 LAKE PARK BLVD.  
Entity Address, City or Town RICHARDSON  
Entity Address, State or Province TX  
Entity Address, Postal Zip Code 75080  
City Area Code 972  
Local Phone Number 497-5000  
Title of 12(b) Security Common stock, $0.01 par value per share  
Trading Symbol LII  
Security Exchange Name NYSE  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Large Accelerated Filer  
Entity Small Business false  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   35,623,280
Entity Central Index Key 0001069202  
Amendment Flag false  
Document Fiscal Year Focus 2024  
Document Fiscal Period Focus Q3  
Current Fiscal Year End Date --12-31  
v3.24.3
Consolidated Balance Sheets - USD ($)
$ in Millions
Sep. 30, 2024
Dec. 31, 2023
Current Assets:    
Cash and cash equivalents $ 243.1 $ 60.7
Short-term investments 12.6 8.4
Accounts and notes receivable, net of allowances of $16.2 and $14.4 in 2024 and 2023, respectively 816.5 594.6
Inventories, net 689.2 699.1
Other assets 69.6 70.7
Total current assets 1,831.0 1,433.5
Property, plant and equipment, net of accumulated depreciation of $952.6 and $910.8 in 2024 and 2023, respectively 754.8 720.4
Right-of-use assets from operating leases 270.5 213.6
Goodwill 219.9 222.1
Deferred income taxes 71.2 51.8
Other assets, net 165.8 156.9
Total assets 3,313.2 2,798.3
Current Liabilities:    
Accounts payable 477.5 374.7
Accrued expenses 444.7 416.1
Income taxes payable 13.3 4.2
Commercial paper 0.0 150.0
Current maturities of long-term debt 312.7 12.1
Current operating lease liabilities 67.8 57.5
Total current liabilities 1,316.0 1,014.6
Long-term debt 827.6 1,143.1
Long-term operating lease liabilities 214.9 164.6
Pensions 16.3 22.5
Other liabilities 184.4 168.2
Total liabilities 2,559.2 2,513.0
Commitments and contingencies
Stockholders' equity:    
Preferred stock, $0.01 par value, 25,000,000 shares authorized, no shares issued or outstanding 0.0 0.0
Common stock, $0.01 par value, 200,000,000 shares authorized, 87,170,197 shares issued 0.9 0.9
Additional paid-in capital 1,204.9 1,184.6
Retained earnings 3,994.0 3,506.2
Accumulated other comprehensive loss (70.7) (56.9)
Treasury stock, at cost, 51,537,964 shares and 51,588,103 shares for 2024 and 2023, respectively 4,375.1 4,349.5
Total stockholders' equity 754.0 285.3
Total liabilities and stockholders' equity $ 3,313.2 $ 2,798.3
v3.24.3
Consolidated Balance Sheets (Parenthetical) - USD ($)
$ in Millions
Sep. 30, 2024
Dec. 31, 2023
Current Assets:    
Allowances, accounts and notes receivable $ 16.2 $ 14.4
Accumulated depreciation $ 952.6 $ 910.8
Stockholders' equity:    
Preferred stock, par value $ 0.01 $ 0.01
Preferred stock, shares authorized 25,000,000 25,000,000
Preferred stock, shares issued 0 0
Preferred stock, shares outstanding 0 0
Common stock, par value $ 0.01 $ 0.01
Common stock, shares authorized 200,000,000 200,000,000
Common stock, shares issued 87,170,197 87,170,197
Treasury stock, shares 51,537,964 51,588,103
v3.24.3
Consolidated Statements of Operations - USD ($)
shares in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Income Statement [Abstract]        
Net sales $ 1,498,100,000 $ 1,366,300,000 $ 3,996,300,000 $ 3,827,100,000
Cost of goods sold 1,009,700,000 937,800,000 2,679,700,000 2,634,100,000
Gross profit 488,400,000 428,500,000 1,316,600,000 1,193,000,000
Operating Expenses:        
Selling, general and administrative expenses 184,400,000 178,900,000 523,600,000 527,600,000
Losses and other expenses, net 3,100,000 3,500,000 10,500,000 5,200,000
Restructuring charges 0 300,000 0 200,000
Gain on sale from previous dispositions 0 0 1,600,000 0
Impairment on assets held for sale 0 63,200,000 0 63,200,000
Income from equity method investments (2,400,000) (4,200,000) (6,100,000) (8,000,000.0)
Operating income 303,300,000 186,800,000 790,200,000 604,800,000
Pension settlements 100,000 300,000 400,000 400,000
Interest expense, net 8,900,000 11,200,000 33,200,000 40,400,000
Other expense (income), net 400,000 100,000 1,500,000 (100,000)
Net income before income taxes 293,900,000 175,200,000 755,100,000 564,100,000
Provision for income taxes 54,900,000 44,800,000 145,900,000 118,500,000
Net income $ 239,000,000.0 $ 130,400,000 $ 609,200,000 $ 445,600,000
Earnings per share - Basic (in dollars per share) $ 6.71 $ 3.67 $ 17.11 $ 12.55
Earnings per share - Diluted (in dollars per share) $ 6.68 $ 3.65 $ 17.02 $ 12.51
Weighted average number of shares outstanding, basic (in shares) 35.6 35.5 35.6 35.5
Weighted average number of shares outstanding, diluted (in shares) 35.8 35.7 35.8 35.6
v3.24.3
Consolidated Statements of Comprehensive Income - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Statement of Comprehensive Income [Abstract]        
Net income $ 239.0 $ 130.4 $ 609.2 $ 445.6
Other comprehensive (loss) income:        
Foreign currency translation adjustments (9.9) (5.7) (19.4) 8.7
Net change in pension and post-retirement liabilities (0.1) 0.0 (1.2) (0.8)
Reclassification of pension and post-retirement benefit losses into earnings 0.3 0.0 0.7 0.6
Pension settlements 0.1 0.3 0.4 0.4
Share of equity method investments other comprehensive income (0.2) 1.1 (0.2) 1.1
Net change in fair value of cash flow hedges (0.6) 3.1 5.3 3.6
Reclassification of cash flow hedge losses into earnings 0.8 0.8 1.2 1.2
Other comprehensive (loss) income before taxes (9.6) (0.4) (13.2) 14.8
Tax benefit (expense) (0.3) (0.8) (0.6) (1.2)
Other comprehensive (loss) income, net of tax (9.9) (1.2) (13.8) 13.6
Comprehensive income $ 229.1 $ 129.2 $ 595.4 $ 459.2
v3.24.3
Consolidated Statements of Stockholders' Deficit - USD ($)
$ in Millions
Total
Common Stock Issued
Additional Paid-In Capital
Retained Earnings
Accumulated Other Comprehensive Loss
Treasury Stock at Cost
Beginning balance at Dec. 31, 2022 $ (203.1) $ 0.9 $ 1,155.2 $ 3,070.6 $ (90.6) $ (4,339.2)
Beginning balance (in shares) at Dec. 31, 2022           51,700,000
Net income 445.6     445.6    
Dividends (115.9)     (115.9)    
Foreign currency translation adjustments 8.7       8.7  
Pension and post-retirement liability changes, net of tax 0.2       0.2  
Share of equity method investments other comprehensive income (1.1)       (1.1)  
Stock-based compensation expense 23.5   23.5      
Change in cash flow hedges, net of tax 3.6       3.6  
Treasury shares reissued for common stock 2.9   0.2     $ 2.7
Treasury shares reissued for common stock (in shares)           (100,000)
Treasury stock purchases (7.1)         $ (7.1)
Ending balance at Sep. 30, 2023 159.5 0.9 1,178.9 3,400.3 (77.0) $ (4,343.6)
Ending balance (in shares) at Sep. 30, 2023           51,600,000
Beginning balance at Jun. 30, 2023 62.6 0.9 1,169.3 3,309.0 (75.8) $ (4,340.8)
Beginning balance (in shares) at Jun. 30, 2023           51,700,000
Net income 130.4     130.4    
Dividends (39.1)     (39.1)    
Foreign currency translation adjustments (5.7)       (5.7)  
Pension and post-retirement liability changes, net of tax 0.3       0.3  
Share of equity method investments other comprehensive income (1.1)       (1.1)  
Stock-based compensation expense 9.7   9.7      
Change in cash flow hedges, net of tax 3.1       3.1  
Treasury shares reissued for common stock 1.1   (0.1)     $ 1.2
Treasury shares reissued for common stock (in shares)           (100,000)
Treasury stock purchases (4.0)         $ (4.0)
Ending balance at Sep. 30, 2023 159.5 0.9 1,178.9 3,400.3 (77.0) $ (4,343.6)
Ending balance (in shares) at Sep. 30, 2023           51,600,000
Beginning balance at Dec. 31, 2023 $ 285.3 0.9 1,184.6 3,506.2 (56.9) $ (4,349.5)
Beginning balance (in shares) at Dec. 31, 2023 51,588,103         51,600,000
Net income $ 609.2     609.2    
Dividends (121.4)     (121.4)    
Foreign currency translation adjustments (19.4)       (19.4)  
Pension and post-retirement liability changes, net of tax (0.4)       (0.4)  
Share of equity method investments other comprehensive income (0.2)       (0.2)  
Stock-based compensation expense 20.1   20.1      
Change in cash flow hedges, net of tax 6.2       6.2  
Treasury shares reissued for common stock 3.2         $ 3.0
Treasury shares reissued for common stock (in shares)           (100,000)
Treasury stock purchases (28.6)         $ (28.6)
Ending balance at Sep. 30, 2024 $ 754.0 0.9 1,204.9 3,994.0 (70.7) $ (4,375.1)
Ending balance (in shares) at Sep. 30, 2024 51,537,964         51,500,000
Beginning balance at Jun. 30, 2024 $ 577.4 0.9 1,197.9 3,796.0 (60.8) $ (4,356.6)
Beginning balance (in shares) at Jun. 30, 2024           51,500,000
Net income 239.0     239.0    
Dividends (41.0)     (41.0)    
Foreign currency translation adjustments (9.9)       (9.9)  
Pension and post-retirement liability changes, net of tax 0.2       0.2  
Share of equity method investments other comprehensive income (0.2)       (0.2)  
Stock-based compensation expense 6.8   6.8      
Treasury shares reissued for common stock 1.1   0.2     $ 0.9
Treasury stock purchases (19.4)         (19.4)
Ending balance at Sep. 30, 2024 $ 754.0 $ 0.9 $ 1,204.9 $ 3,994.0 $ (70.7) $ (4,375.1)
Ending balance (in shares) at Sep. 30, 2024 51,537,964         51,500,000
v3.24.3
Consolidated Statements of Stockholders' Deficit (Parenthetical) - USD ($)
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Statement of Stockholders' Equity [Abstract]        
Dividends $ 1.15 $ 1.10 $ 3.4 $ 3.26
v3.24.3
Consolidated Statements of Cash Flows - USD ($)
 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Cash flows from operating activities:    
Net income $ 609,200,000 $ 445,600,000
Adjustments to reconcile net income to net cash provided by operating activities:    
Gain on sale from previous dispositions 1,600,000 0
Income from equity method investments (6,100,000) (8,000,000.0)
Dividends from affiliates 2,500,000 0
Gain on sale from previous dispositions 0 63,200,000
Provision for credit losses 4,600,000 4,700,000
Unrealized (gains) losses, net on derivative contracts (6,700,000) 5,600,000
Stock-based compensation expense 20,100,000 23,500,000
Depreciation and amortization 69,600,000 62,000,000.0
Deferred income taxes (21,500,000) (24,900,000)
Pension expense 3,500,000 2,400,000
Pension contributions (9,100,000) (2,800,000)
Other items, net 0 (1,400,000)
Changes in assets and liabilities, net of effects of acquisitions and divestitures:    
Accounts and notes receivable (229,100,000) (142,500,000)
Inventories 9,100,000 (44,900,000)
Accounts payable 104,600,000 (10,900,000)
Accrued expenses 31,300,000 69,400,000
Income taxes payable and receivable, net 20,400,000 (6,700,000)
Leases, net 3,800,000 3,400,000
Other, net 8,700,000 (7,800,000)
Net cash provided by operating activities 613,300,000 429,900,000
Cash flows from investing activities:    
Proceeds from the disposal of property, plant and equipment 1,900,000 1,600,000
Purchases of property, plant and equipment (103,400,000) (125,000,000.0)
Purchases of property, plant and equipment 4,100,000 0
Acquisitions, net of cash 1,800,000 0
Purchases of investments (12,500,000) (1,100,000)
Net cash used in investing activities (108,100,000) (124,500,000)
Cash flows from financing activities:    
Commercial paper borrowings 424,100,000 0
Commercial paper payments (574,100,000) 0
Borrowings from debt arrangements 156,700,000 1,737,500,000
Payments on debt arrangements (190,200,000) (2,290,100,000)
Issuance of senior unsecured notes 0 500,000,000.0
Payments of deferred financing costs 0 (5,400,000)
Proceeds from employee stock purchases 3,300,000 2,900,000
Repurchases of common stock (12,900,000) 0
Repurchases of common stock to satisfy employee withholding tax obligations (15,000,000.0) (7,100,000)
Cash dividends paid (119,300,000) (153,400,000)
Net cash used in financing activities (327,400,000) (215,600,000)
Increase in cash and cash equivalents 177,800,000 89,800,000
Cash balances classified as assets held for sale 0 (7,600,000)
Effect of exchange rates on cash and cash equivalents 4,600,000 (2,800,000)
Cash and cash equivalents, beginning of period 60,700,000 52,600,000
Cash and cash equivalents, end of period 243,100,000 132,000,000.0
Supplemental disclosures of cash flow information:    
Interest paid 44,700,000 42,000,000.0
Income taxes paid (net of refunds) $ 145,500,000 $ 151,300,000
v3.24.3
General
 9 Months Ended
Sep. 30, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
General
1. General:

References in this Quarterly Report on Form 10-Q to "we","our","us","LII" or the "Company" refer to Lennox International Inc. and its subsidiaries, unless the context requires otherwise.

Basis of Presentation

The accompanying unaudited Consolidated Balance Sheet as of September 30, 2024, the accompanying unaudited Consolidated Statements of Operations for the three and nine months ended September 30, 2024 and 2023, the accompanying unaudited Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2024 and 2023, the accompanying unaudited Consolidated Statements of Stockholders' Equity for the three and nine months ended September 30, 2024 and 2023, and the accompanying unaudited Consolidated Statements of Cash Flows for the nine months ended September 30, 2024 and 2023 should be read in conjunction with our audited consolidated financial statements and footnotes included in our Annual Report on Form 10-K for the year ended December 31, 2023.

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. The accompanying consolidated financial statements contain all material adjustments, consisting principally of normal recurring adjustments, necessary for a fair presentation of our financial position, results of operations and cash flows. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to applicable rules and regulations, although we believe that the disclosures herein are adequate to make the information presented not misleading. The operating results for the interim periods are not necessarily indicative of the results that may be expected for a full year.

Our fiscal quarterly periods are comprised of approximately 13 weeks, but the number of days per quarter may vary year-over-year. Our quarterly reporting periods usually end on the Saturday closest to the last day of March, June, and September. Our fourth quarter and fiscal year ends on December 31, regardless of the day of the week on which December 31 falls. For convenience, the 13-week periods comprising each fiscal quarter are denoted by the last day of the respective calendar quarter.

Use of Estimates

The preparation of financial statements requires us to make estimates and assumptions about future events. These estimates and the underlying assumptions affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities, and reported amounts of revenues and expenses. Such estimates include the valuation of accounts receivable, inventories, goodwill, intangible assets and other long-lived assets, contingencies, guarantee obligations, indemnifications, and assumptions used in the calculation of income taxes, pension and post-retirement medical benefits, self-insurance and warranty reserves, and stock-based compensation, among others. These estimates and assumptions are based on our best estimates and judgment.
We evaluate these estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment. We believe these estimates and assumptions to be reasonable under the circumstances and will adjust such estimates and assumptions when facts and circumstances dictate. Volatile equity, foreign currency and commodity markets combine to increase the uncertainty inherent in such estimates and assumptions. Future events and their effects cannot be determined with precision and actual results could differ significantly from these estimates. Changes in these estimates will be reflected in the financial statements in future periods.
v3.24.3
Reportable Business Segments
 9 Months Ended
Sep. 30, 2024
Segment Reporting, Measurement Disclosures [Abstract]  
Reportable Business Segments
2. Reportable Business Segments:

We operate in two reportable business segments of the heating, ventilation, air conditioning and refrigeration (“HVACR”) industry. Our segments are organized primarily by the nature of the products and services we provide. The following table describes each segment:
 
SegmentProduct or ServicesMarkets ServedGeographic Areas
Home Comfort SolutionsFurnaces, air conditioners, heat pumps, packaged heating and cooling systems, indoor air quality equipment, comfort control products, replacement parts and suppliesResidential Replacement;
Residential New Construction		United States
Canada
Building Climate SolutionsCommercial heating, air conditioning and refrigeration systems. Products include rooftop packaged units, variable refrigerant flow systems, heat pumps, air cooled condensing units, air handlers, unit coolers, and process chillers. Services include installation, energy monitoring, service and maintenance, and HVAC recycling.Light Commercial;
Food Preservation;
Non-Food Industry		United States
Canada

We use segment profit or loss as the primary measure of profitability to evaluate operating performance and to allocate capital resources. We define segment profit or loss as a segment’s income or loss from continuing operations before income taxes included in the accompanying Consolidated Statements of Operations, excluding certain items. The reconciliation in the table below details the items excluded.

Our corporate costs include those costs related to corporate functions such as legal, internal audit, treasury, human resources, tax compliance and senior executive staff. Any intercompany sales and associated profit (and any other intercompany items) are eliminated from segment results. There were no significant intercompany eliminations for the periods presented.

Segment Net Sales and Profit (Loss)

Net sales and segment profit (loss) for each segment, along with a reconciliation of segment profit (loss) to Operating income, are shown below (in millions):
 For the Three Months Ended September 30,For the Nine Months Ended September 30,
 2024
2023
2024
2023
Net sales
Home Comfort Solutions$1,032.8 $896.3 $2,689.7 $2,513.6 
Business Climate Solutions
465.3 405.5 1,306.6 1,121.5 
Corporate and Other (1)
— 64.5 — 192.0 
Total segment net sales$1,498.1 $1,366.3 $3,996.3 $3,827.1 
Segment profit (loss) (2)
Home Comfort Solutions$226.5 $181.4 $567.1 $495.2 
Business Climate Solutions
105.9 97.3 298.1 250.3 
Corporate and Other
(29.1)(23.4)(76.6)(65.2)
Total segment profit303.3 255.3 788.6 680.3 
Reconciliation to Operating income:
Impairment on assets held for sale— 63.2 — 63.2 
Gain on sale from previous dispositions— — (1.6)— 
Items in Losses (gains) and other expenses, net that are excluded from segment profit (loss) (2)
— 5.0 — 12.1 
Restructuring charges— 0.3 — 0.2 
Operating income$303.3 $186.8 $790.2 $604.8 
(1) The Corporate and Other segment included our European portfolio. In the fourth quarter of 2023 we completed the divestiture of our European operations.
(2) We define segment profit (loss) as a segment's operating income included in the accompanying Consolidated Statements of Operations, excluding:
◦The following items in Losses and other expenses, net:
▪Net change in unrealized losses (gains) on unsettled futures contracts,
▪Environmental liabilities and special litigation charges, and
▪Other items, net
◦R
v3.24.3
Earnings Per Share
 9 Months Ended
Sep. 30, 2024
Earnings Per Share [Abstract]  
Earnings Per Share
3. Earnings Per Share:

Basic earnings per share are computed by dividing net income by the weighted-average number of common shares outstanding during the period. Diluted earnings per share are computed by dividing net income by the sum of the weighted-average number of shares and the number of equivalent shares assumed outstanding, if dilutive, under our stock-based compensation plans.

The computations of basic and diluted earnings per share were as follows (in millions, except per share data):

 For the Three Months Ended September 30,For the Nine Months Ended September 30,
 2024202320242023
Net income $239.0 $130.4 $609.2 $445.6 
Weighted-average shares outstanding – basic35.6 35.5 35.6 35.5 
Add: Potential effect of dilutive securities attributable to stock-based payments0.2 0.2 0.2 0.1 
Weighted-average shares outstanding – diluted35.8 35.7 35.8 35.6 
Earnings per share – Basic:$6.71 $3.67 $17.11 $12.55 
Earnings per share – Diluted:$6.68 $3.65 $17.02 $12.51 

The following stock appreciation rights and restricted stock units were outstanding but not included in the diluted earnings per share calculation as the assumed exercise of such rights would have been anti-dilutive (in millions, except for per share data):

 For the Three Months Ended September 30,For the Nine Months Ended September 30,
 2024202320242023
Weighted-average number of shares— 0.1 — 0.1 
v3.24.3
Commitments and Contingencies
 9 Months Ended
Sep. 30, 2024
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies
4. Commitments and Contingencies:

Leases
We determine if an arrangement is a lease at inception. Operating leases are included in our Consolidated Balance Sheets as Right-of-use assets from operating leases, Current operating lease liabilities and Long-term operating lease liabilities. Finance leases are included in Property, plant and equipment, Current maturities of long-term debt and Long-term debt in our Consolidated Balance Sheets. We do not recognize a right-of-use asset and lease liability for leases with a term of 12 months or less. We do 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.

Many of our lease agreements contain renewal options; however, we do not recognize right-of-use assets or lease liabilities for renewal periods unless it is determined that we are reasonably certain of renewing the lease at inception or when a triggering
event occurs. Some of our lease agreements contain rent escalation clauses (including index-based escalations), rent holidays, capital improvement funding or other lease concessions. We recognize our minimum rental expense on a straight-line basis based on the fixed components of a lease arrangement. We amortize this expense over the term of the lease beginning with the date of initial possession. Variable lease components represent amounts that are not fixed in nature and are not tied to an index or rate, and are recognized as incurred. Under certain of our third-party service agreements, we control a specific space or underlying asset used in providing the service by the third-party service provider. These arrangements meet the definition under ASC 842 and therefore are accounted for under ASC 842.

In determining our right-of-use assets and lease liabilities, we apply a discount rate to the minimum lease payments within each lease agreement. ASC 842 requires us to use the rate of interest that a lessee would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. When we cannot readily determine the discount rate implicit in the lease agreement, we utilize our incremental borrowing rate. To estimate our specific incremental borrowing rates over various periods (ranging from 1-year through 30-years), a comparable market yield curve consistent with our credit quality was calibrated to our publicly outstanding debt instruments.

We lease certain real and personal property under non-cancelable operating leases. Approximately 79% of our right-of-use assets and lease liabilities relate to our leases of real estate with the remaining amounts primarily relating to our leases of IT equipment, fleet vehicles and manufacturing and distribution equipment.     

Product Warranties and Product Related Contingencies

We provide warranties to customers for some of our products and record liabilities for the estimated future warranty-related costs based on failure rates, cost experience and other factors. We periodically review the assumptions used to determine the product warranty liabilities and will adjust the liabilities in future periods for changes in experience, as necessary.

Liabilities for estimated product warranty costs are included in the following captions on the accompanying Consolidated Balance Sheets (in millions) as of:
September 30, 2024December 31, 2023
Accrued expenses$47.8 $45.4 
Other liabilities109.1 97.4 
Total warranty liability$156.9 $142.8 
The changes in product warranty liabilities for the nine months ended September 30, 2024 were as follows (in millions):
Total warranty liability as of December 31, 2023$142.8 
Warranty claims paid(32.4)
Changes resulting from issuance of new warranties46.5 
Changes in estimates associated with pre-existing liabilities0.2 
Changes in foreign currency translation rates and other(0.2)
Total warranty liability as of September 30, 2024
$156.9 

Litigation

We are involved in a number of claims and lawsuits incidental to the operation of our businesses. Insurance coverages are maintained and estimated costs are recorded for such claims and lawsuits, including costs to settle claims and lawsuits, based on experience involving similar matters and specific facts known.

It is management's opinion that none of these claims or lawsuits or any threatened litigation will have a material adverse effect on our financial condition, results of operations or cash flows. Claims and lawsuits, however, involve uncertainties and it is possible that their eventual outcome could adversely affect our results of operations for a particular period.
v3.24.3
Stock Repurchases
 9 Months Ended
Sep. 30, 2024
Stockholders' Equity Note [Abstract]  
Stock Repurchases
5. Stock Repurchases:

Our Board of Directors has authorized a total of $4.0 billion to repurchase shares of our common stock (collectively referred to as the "Share Repurchase Plans"), including a $1.0 billion share repurchase authorization in July 2021. The Share Repurchase Plans allow us to repurchase shares from time to time in open market transactions and in privately negotiated transactions based on business, market, applicable legal requirements and other considerations. Such repurchases may also be made in compliance with Rule 10b5-1 trading plans entered into by us, which would permit common stock to be repurchased when the Company might otherwise be precluded from doing so under insider trading laws or self-imposed trading restrictions. The Share Repurchase Plans do not require the repurchase of a specific number of shares and may be terminated at any time. As of September 30, 2024, $532.5 million was available for repurchase under the Share Repurchase Plans.

For the three and nine months ended September 30, 2024, we repurchased 23,000 shares at an aggregate cost, inclusive of fees, of $13.5 million.
v3.24.3
Revenue Recognition
 9 Months Ended
Sep. 30, 2024
Revenue Recognition and Deferred Revenue [Abstract]  
Revenue Recognition
6. Revenue Recognition:

The following table disaggregates our revenue by business segment by geography which provides information as to the major source of revenue. See Note 2 for additional information on our reportable business segments and the products and services sold in each segment. All amount presented reflect the revised segment presentation.

For the Three Months Ended September 30, 2024
Primary Geographic MarketsHome Comfort SolutionsBuilding Climate SolutionsCorporate and OtherConsolidated
United States$971.1 $441.9 $— $1,413.0 
Canada61.7 23.4 — 85.1 
Other international— — — — 
Total$1,032.8 $465.3 $— $1,498.1 

For the Three Months Ended September 30, 2023
Primary Geographic MarketsHome Comfort SolutionsBuilding Climate SolutionsCorporate and OtherConsolidated
United States$842.1 $376.8 $— $1,218.9 
Canada54.2 28.7 — 82.9 
Other international— — 64.5 64.5 
Total$896.3 $405.5 $64.5 $1,366.3 

For the Nine Months Ended September 30, 2024
Primary Geographic MarketsHome Comfort SolutionsBuilding Climate SolutionsCorporate and OtherConsolidated
United States$2,520.7 $1,244.2 $— $3,764.9 
Canada169.0 62.4 — 231.4 
Other international— — — — 
Total$2,689.7 $1,306.6 $— $3,996.3 

For the Nine Months Ended September 30, 2023
Primary Geographic MarketsHome Comfort SolutionsBuilding Climate SolutionsCorporate and OtherConsolidated
United States$2,350.0 $1,053.5 $— $3,403.5 
Canada163.6 68.0 — 231.6 
Other international— — 192.0 192.0 
Total$2,513.6 $1,121.5 $192.0 $3,827.1 
Home Comfort Solutions - We manufacture and market a broad range of furnaces, air conditioners, heat pumps, packaged heating and cooling systems, equipment and accessories to improve indoor air quality, comfort control products, replacement parts and supplies and related products for both the residential replacement and new construction markets in North America. These products are sold under various brand names and are sold either through direct sales to a network of independent installing dealers, including through our network of Lennox stores or to independent distributors. For the three months ended September 30, 2024 and 2023, direct sales represented 73% and 77% of revenues, and sales to independent distributors represented the remainder. For the nine months ended September 30, 2024 and 2023, direct sales represented 74% and 75% of revenues, and sales to independent distributors represented the remainder. Given the nature of our business, customer product orders are fulfilled at a point in time and not over a period of time.

Building Climate Solutions - In North America, we manufacture and sell unitary heating and cooling equipment used in light commercial applications, such as low-rise office buildings, restaurants, retail centers, churches and schools. These products are distributed primarily through commercial contractors and directly to national account customers in the planned replacement, emergency replacement and new construction markets. We manufacture and market equipment for the commercial refrigeration markets under the Heatcraft Worldwide Refrigeration name. Our products are used in the food retail, food service, cold storage as well as non-food refrigeration markets. We sell these products to distributors, installing contractors, engineering design firms, original equipment manufacturers and end-users. Lennox National Account Services provides installation, service and preventive maintenance for HVAC national account customers in the United States and Canada. AES manufactures curb, curb adapters, drop box diffusers, offers HVAC recycling and salvage services and focuses on multi-family HVAC replacement for expired mechanical assets. Revenue related to service contracts is recognized as the services are performed under the contract based on the relative fair value of the services provided. For the three months ended September 30, 2024 and 2023, equipment sales represented 80% and 88% of revenues and the remainder of our revenue was generated from our service business. For the nine months ended September 30, 2024 and 2023, equipment sales represented 81% and 87% of revenues and the remainder of our revenue was generated from our services business.

Corporate and Other - In Europe, we manufactured and marketed equipment for the global commercial refrigeration markets. We also manufactured and sold unitary heating and cooling products and applied systems. A de minimis amount of segment revenue related to services for start-up and commissioning activities. In the fourth quarter of 2023, we completed the divestiture of our European operations.
Contract Liabilities - Our contract liabilities consist of advance payments and deferred revenue. Net contract liabilities consisted of the following (in millions) as of:

September 30, 2024December 31, 2023
Contract assets$2.0 $2.2 
Contract liabilities - current(4.2)(4.7)
Contract liabilities - noncurrent(8.1)(7.5)
Total$(10.3)$(10.0)

For the three months ended September 30, 2024 and 2023, we recognized revenue of $0.7 million and $2.8 million and for the nine months ended September 30, 2024 and 2023, we recognized revenue of $6.8 million and $7.0 million related to our contract liabilities at January 1, 2024 and 2023, respectively. Impairment losses recognized in our receivables and contract assets were de minimis in 2024 and 2023.
v3.24.3
Inventories
 9 Months Ended
Sep. 30, 2024
Inventory Disclosure [Abstract]  
Inventories
Inventories:
The components of inventories are as follows (in millions) as of:
September 30, 2024December 31, 2023
Finished goods$443.2 $509.4 
Work in process13.7 9.6 
Raw materials and parts369.3 314.2 
Subtotal826.2 833.2 
Excess of current cost over last-in, first-out cost(137.0)(134.1)
Total inventories, net$689.2 $699.1 
v3.24.3
Goodwill
 9 Months Ended
Sep. 30, 2024
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill
Goodwill:
The changes in the carrying amount of goodwill in 2024, in total and by segment, are summarized in the table below (in millions):
Balance as of December 31, 2023
Goodwill
   Adjustment (1)
Balance as of September 30, 2024
Home Comfort Solutions$26.1 $— $26.1 
Building Climate Solutions (1)
196.0 (2.2)193.8 
Total Goodwill$222.1 $(2.2)$219.9 

(1) As discussed in Note 13, an update to our purchase price allocation of AES in the first quarter of 2024 resulted in a $2.2 million reduction of goodwill.

We monitor our reporting units for indicators of impairment throughout the year to determine if a change in facts or circumstances warrants a re-evaluation of our goodwill. We have not recorded any goodwill impairments for the nine months ended September 30, 2024 or in any periods presented for our continuing businesses.
v3.24.3
Derivatives
 9 Months Ended
Sep. 30, 2024
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivatives
Derivatives:

Objectives and Strategies for Using Derivative Instruments

Commodity Price Risk - We utilize a cash flow hedging program to mitigate our exposure to volatility in the prices of metal commodities used in our production processes. Our hedging program includes the use of futures contracts to lock in prices, and as a result, we are subject to derivative losses should the metal commodity prices decrease and gains should the prices increase. We utilize a dollar cost averaging strategy so that a higher percentage of commodity price exposures are hedged near-term and lower percentages are hedged at future dates. This strategy allows for protection against near-term price volatility while allowing us to adjust to market price movements over time.

Interest Rate Risk - A portion of our debt bears interest at variable rates, and as a result, we are subject to variability in the cash paid for interest. To mitigate a portion of that risk, we may choose to engage in an interest rate swap hedging strategy to eliminate the variability of interest payment cash flows. We are not currently hedged against interest rate risk.

Foreign Currency Risk - Foreign currency exchange rate movements create a degree of risk by affecting the U.S. dollar value of assets and liabilities arising in foreign currencies. We seek to mitigate the impact of currency exchange rate movements on certain short-term transactions by periodically entering into foreign currency forward contracts.

Cash Flow Hedges

We have foreign exchange forward contracts and commodity futures contracts designated as cash flow hedges that are scheduled to mature through February 2026. Unrealized gains or losses from our cash flow hedges are included in Accumulated other comprehensive loss (“AOCL”) and are expected to be reclassified into earnings within the next 17 months
based on the prices of the commodities and foreign currencies at the settlement dates. We recorded the following amounts in AOCL related to our cash flow hedges (in millions) as of:
September 30, 2024December 31, 2023
Unrealized losses (gains), net on unsettled contracts$(5.5)$2.6 
Income tax (benefit) expense 1.3 (0.6)
Unrealized losses (gains), net included in AOCL, net of tax (1)
$(4.2)$2.0 
(1) Assuming commodity prices and foreign currency exchange rates remain constant, we expect to reclassify $4.0 million of derivative gain as of September 30, 2024 into earnings within the next 12 months.
v3.24.3
Stock-Based Compensation
 9 Months Ended
Sep. 30, 2024
Share-Based Payment Arrangement [Abstract]  
Stock-Based Compensation
Stock-Based Compensation:

We issue various long-term incentive awards, including performance share units, restricted stock units and stock appreciation rights under the Lennox International Inc. 2019 Equity and Incentive Plan, as it may be amended and restated from time to time. Stock-based compensation expense related to continuing operations is included in Selling, general and administrative expenses in the accompanying Consolidated Statements of Operations as follows (in millions):
For the Three Months Ended September 30,For the Nine Months Ended September 30,
2024202320242023
Stock-based compensation expense
$6.8 $9.7 $20.1 $23.5 
v3.24.3
Pension Benefit Plans
 9 Months Ended
Sep. 30, 2024
Retirement Benefits [Abstract]  
Pension Benefit Plans
8. Pension Benefit Plans:

The components of net periodic benefit cost for pension benefits were as follows (in millions):
For the Three Months Ended September 30,For the Nine Months Ended September 30,
2024202320242023
Service cost$0.4 $0.5 $1.2 $1.6 
Interest cost2.2 2.2 6.5 6.7 
Expected return on plan assets(1.9)(2.4)(5.7)(7.1)
Recognized actuarial loss0.3 — 0.7 0.6 
Other— 0.3 — (0.1)
Settlements and curtailments0.1 0.3 0.4 0.4 
Net periodic benefit cost$1.1 $0.9 $3.1 $2.1 
v3.24.3
Income Taxes
 9 Months Ended
Sep. 30, 2024
Income Tax Disclosure [Abstract]  
Income Taxes
9. Income Taxes:

As of September 30, 2024, we had approximately $4.5 million in total gross unrecognized tax benefits. If recognized, $4.5 million would be recorded through the Consolidated Statements of Operations.

Our effective tax rate was 19.3% for the nine months ended September 30, 2024 compared to 21.0% for the nine months ended September 30, 2023. The decrease in rate is primarily due to a discrete adjustment in the third quarter of 2023 related to the 2023 European divestiture.

We are currently under a limited scope audit by the Internal Revenue Service for our 2021 and 2022 tax years. There are also ongoing U.S. state and local audits and other foreign audits covering fiscal years 2017 through 2023. We are generally no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by taxing authorities for years prior to 2017.
v3.24.3
Lines of Credit and Financing Arrangements
 9 Months Ended
Sep. 30, 2024
Debt Disclosure [Abstract]  
Lines of Credit and Financing Arrangements
10. Lines of Credit and Financing Arrangements:

The following table summarizes our outstanding debt obligations and their classification in the accompanying Consolidated Balance Sheets (in millions) as of:

September 30, 2024December 31, 2023
Commercial paper$— $150.0 
Current maturities of long-term debt:
Finance lease obligations$13.2 $12.1 
Senior unsecured notes300.0 — 
Debt issuance costs(0.5)— 
    Total current maturities of long-term debt
$312.7 $12.1 
Long-Term Debt:
Finance lease obligations$34.6 $32.7 
Credit agreement— 20.0 
Senior unsecured notes800.0 1,100.0 
Debt issuance costs(7.0)(9.6)
Total long-term debt$827.6 $1,143.1 
Total debt$1,140.3 $1,305.2 

Foreign Obligations

Through several of our foreign subsidiaries, we have facilities available to assist us in financing seasonal borrowing needs for our foreign locations. We had no outstanding foreign obligations as of September 30, 2024 or December 31, 2023 and there were no borrowings or repayments on these facilities during the nine months ended September 30, 2024.

Commercial Paper Program

On October 25, 2023, we established a commercial paper program (the “Program”), as a replacement to our Asset Securitization Program which expired in November 2023, pursuant to which we may issue short-term, unsecured commercial paper notes (the “CP Notes”) under the exemption from registration contained in Section 4(a)(2) of the Securities Act of 1933, as amended. Amounts available under the Program may be borrowed, repaid, and re-borrowed from time to time, with the aggregate face or principal amount of the CP Notes outstanding under the Program at any time not to exceed $500.0 million. The CP Notes have maturities of up to 397 days from the date of issue and rank pari passu with all of our other unsecured and unsubordinated indebtedness. The net proceeds from issuances of the CP Notes are typically used for general corporate purposes. Our revolving credit facility serves as a liquidity backstop for the repayment of CP Notes outstanding under the Program. There were no CP Notes currently outstanding under the Program as of September 30, 2024.

Our weighted average borrowing rate on the Program was as follows as of:
September 30, 2024December 31, 2023
Weighted average borrowing rate— %5.66 %

Credit Agreement

We have an existing $1.1 billion unsecured revolving credit facility dated as of July 14, 2021 (as amended, the "Credit Agreement"), with JPMorgan Chase Bank, N.A., as administrative agent, and the other lenders party thereto. We had no outstanding borrowings and $1.7 million committed to standby letters of credit as of September 30, 2024. Subject to covenant limitations, $1,098.3 million was available for future borrowings after taking into consideration outstanding borrowings under our Program. The Credit Agreement includes a subfacility for swingline loans up to $65.0 million. The Credit Agreement will expire and outstanding loans will be required to be repaid in July 2026, unless maturity is extended by the lenders pursuant to two one-year extension options that we may request under the Credit Agreement.
Our weighted average borrowing rate on the facility was as follows as of:
September 30, 2024December 31, 2023
Weighted average borrowing rate— %6.67 %

The Credit Agreement is guaranteed by certain of our subsidiaries and contains customary covenants applicable to us and our subsidiaries including limitations on indebtedness, liens, dividends, stock repurchases, mergers, and sales of all or substantially all of our assets. In addition, the Credit Agreement contains a financial covenant requiring us to maintain, as of the last day of each fiscal quarter for the four prior fiscal quarters, a Total Net Leverage Ratio of no more than 3.50 to 1.00 (or, at our election, on up to two occasions following a material acquisition, 4.00 to 1.00).

Our Credit Agreement contains customary events of default. These events of default include nonpayment of principal or other amounts, material inaccuracy of representations and warranties, breach of covenants, default on certain other indebtedness or receivables securitizations (cross default), certain voluntary and involuntary bankruptcy events, and the occurrence of a change in control. A cross default under our credit facility could occur if:

• We fail to pay any principal or interest when due on any other indebtedness or receivables securitization exceeding $75.0 million; or

• We are in default in the performance of, or compliance with any term of any other indebtedness in an aggregate principal amount exceeding $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.

Each of our major debt agreements contains provisions by which a default under one agreement causes a default in the others (a cross default). If a cross default under our Credit Agreement or our senior unsecured notes were to occur, it could have a wider impact on our liquidity than might otherwise occur from a default of a single debt instrument or lease commitment.

If any event of default occurs and is continuing, the administrative agent, or lenders with a majority of the aggregate commitments may require the administrative agent to, terminate our right to borrow under our Credit Agreement and accelerate amounts due under our Credit Agreement (except for a bankruptcy event of default, in which case such amounts will automatically become due and payable and the lenders’ commitments will automatically terminate).

We are currently in compliance with all covenant requirements.

Senior Unsecured Notes

In September 2023, we issued $500.0 million of senior unsecured notes, which will mature in September 2028 (the "2028 Notes") with interest being paid semi-annually in March and September at 5.50%. We issued two series of senior unsecured notes on July 30, 2020 for $300.0 million each, which will mature on August 1, 2025 (the "2025 Notes") and August 1, 2027 (the "2027 Notes," and collectively with the 2025 Notes and the 2028 Notes, the "Notes") with interest being paid semi-annually in February and August at 1.35% and 1.70% respectively, per annum.
In the event of a credit rating downgrade below investment grade resulting from a change of control, holders of our senior unsecured notes will have the right to require us to repurchase all or a portion of the senior unsecured notes at a repurchase price equal to 101% of the principal amount of the notes, plus accrued and unpaid interest, if any. All the Notes are guaranteed, on a senior unsecured basis, by certain of our subsidiaries that guarantee indebtedness under our Credit Agreement (the "Guarantor Subsidiaries"). The indenture governing the Notes contains covenants that, among other things, limit our ability and the ability of the subsidiary guarantors to: create or incur certain liens; enter into certain sale and leaseback transactions; and enter into certain mergers, consolidations and transfers of substantially all of our assets. The indenture also contains a cross default provision which is triggered if we default on other debt of at least $75.0 million in principal which is then accelerated, and such acceleration is not rescinded within 30 days of the notice date. We are currently in compliance with all covenant requirements.
v3.24.3
Comprehensive Income (Loss)
 9 Months Ended
Sep. 30, 2024
Equity [Abstract]  
Comprehensive Income (Loss)
11. Comprehensive Income (Loss):

The following table provides information on items reclassified from AOCL to Net income in the accompanying Consolidated Statements of Operations (in millions):
For the Three Months Ended September 30,For the Nine Months Ended September 30,Affected Line Item(s) in the Consolidated Statements of Operations
2024202320242023
(Losses) Gains on Cash Flow Hedges:
Derivatives contracts$(0.8)$(0.8)$(1.2)$(1.2)Cost of goods sold; Losses (gains) and other expenses, net
Income tax (expense) benefit(0.2)0.2 (0.3)0.3 Provision for income taxes
Net of tax$(0.6)$(0.6)$(0.9)$(0.9)
Defined Benefit Plan items:
Pension and post-retirement benefit costs$(0.3)$— $(0.7)$(0.6)Other expense (income), net
Pension settlements(0.1)(0.3)(0.4)(0.4)Pension settlements
Income tax (expense) benefit(0.1)0.1 (0.3)0.2 Provision for income taxes
Net of tax$(0.3)$(0.2)$(0.8)$(0.8)
Total reclassifications from AOCL$(0.9)$(0.8)$(1.7)$(1.7)

The following table provides information on changes in AOCL, by component (net of tax), for the nine months ended September 30, 2024 (in millions):
(Losses) Gains on Cash Flow HedgesShare of Equity Method Investments Other Comprehensive IncomeDefined Benefit Pension Plan ItemsForeign Currency Translation AdjustmentsTotal AOCL
Balance as of December 31, 2023
$(2.0)$0.6 $(44.2)$(11.3)$(56.9)
Other comprehensive income (loss) before reclassifications5.3 (0.2)(1.2)(19.4)(15.5)
Amounts reclassified from AOCL0.9 — 0.8 — 1.7 
Net other comprehensive income (loss)6.2 (0.2)(0.4)(19.4)(13.8)
Balance as of September 30, 2024
$4.2 $0.4 $(44.6)$(30.7)$(70.7)
v3.24.3
Fair Value Measurements
 9 Months Ended
Sep. 30, 2024
Fair Value Disclosures [Abstract]  
Fair Value Measurements
12. Fair Value Measurements:

Fair Value Hierarchy

The methodologies used to determine the fair value of our financial assets and liabilities as of September 30, 2024 were the same as those used as of December 31, 2023.
Assets and Liabilities Carried at Fair Value on a Recurring Basis

Derivatives were classified as Level 2 and primarily valued using estimated future cash flows based on observed prices from exchange-traded derivatives. We also considered the counterparty's creditworthiness, or our own creditworthiness, as appropriate. Adjustments were recorded to reflect the risk of credit default, however, they were insignificant to the overall value of the derivatives. Refer to Note 7 for more information related to our derivative instruments.
Other Fair Value Disclosures

The carrying amounts of Cash and cash equivalents, Short-term investments, Accounts and notes receivable, net, Accounts payable, and Short-term debt approximate fair value due to the short maturities of these instruments. The carrying amount of our Credit Agreement in Long-term debt also approximates fair value due to its variable-rate characteristics.

The fair value of our senior unsecured notes in Long-term debt, classified as Level 2, was based on the amount of future cash flows using current market rates for debt instruments of similar maturities and credit risk. The following table presents their fair value (in millions) as of:
September 30, 2024December 31, 2023
Senior unsecured notes$1,098.0 $1,079.3 
v3.24.3
Prior Year Acquisition
 9 Months Ended
Sep. 30, 2024
Business Combination and Asset Acquisition [Abstract]  
Prior Year Acquisition
13. Prior Year Acquisition:

In October 2023, we completed the acquisition of AES, a company dedicated to service and sustainability in the light commercial market. Under the terms of the purchase agreement, a final working capital adjustment was completed in the first quarter of 2024. This working capital adjustment resulted in a $1.8 million reduction in the purchase price. Additionally, during the first quarter of 2024 we made certain purchase price adjustments. The following table details the purchase price adjustments that were made during the first quarter of 2024 (in millions):
December 31, 2023AdjustmentSeptember 30, 2024
Net tangible assets acquired$17.6 $(1.7)$15.9 
Intangible assets acquired36.9 2.1 39.0 
Goodwill40.4 (2.2)38.2 
Total investment$94.9 $(1.8)$93.1 
v3.24.3
Pay vs Performance Disclosure - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Pay vs Performance Disclosure        
Net income $ 239.0 $ 130.4 $ 609.2 $ 445.6
v3.24.3
Insider Trading Arrangements
 3 Months Ended
Sep. 30, 2024
Trading Arrangements, by Individual  
Rule 10b5-1 Arrangement Adopted false
Non-Rule 10b5-1 Arrangement Adopted false
Rule 10b5-1 Arrangement Terminated false
Non-Rule 10b5-1 Arrangement Terminated false
v3.24.3
General (Policies)
 9 Months Ended
Sep. 30, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Basis of Presentation
Basis of Presentation

The accompanying unaudited Consolidated Balance Sheet as of September 30, 2024, the accompanying unaudited Consolidated Statements of Operations for the three and nine months ended September 30, 2024 and 2023, the accompanying unaudited Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2024 and 2023, the accompanying unaudited Consolidated Statements of Stockholders' Equity for the three and nine months ended September 30, 2024 and 2023, and the accompanying unaudited Consolidated Statements of Cash Flows for the nine months ended September 30, 2024 and 2023 should be read in conjunction with our audited consolidated financial statements and footnotes included in our Annual Report on Form 10-K for the year ended December 31, 2023.

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. The accompanying consolidated financial statements contain all material adjustments, consisting principally of normal recurring adjustments, necessary for a fair presentation of our financial position, results of operations and cash flows. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to applicable rules and regulations, although we believe that the disclosures herein are adequate to make the information presented not misleading. The operating results for the interim periods are not necessarily indicative of the results that may be expected for a full year.
Our fiscal quarterly periods are comprised of approximately 13 weeks, but the number of days per quarter may vary year-over-year. Our quarterly reporting periods usually end on the Saturday closest to the last day of March, June, and September. Our fourth quarter and fiscal year ends on December 31, regardless of the day of the week on which December 31 falls. For convenience, the 13-week periods comprising each fiscal quarter are denoted by the last day of the respective calendar quarter.
Use of Estimates
Use of Estimates

The preparation of financial statements requires us to make estimates and assumptions about future events. These estimates and the underlying assumptions affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities, and reported amounts of revenues and expenses. Such estimates include the valuation of accounts receivable, inventories, goodwill, intangible assets and other long-lived assets, contingencies, guarantee obligations, indemnifications, and assumptions used in the calculation of income taxes, pension and post-retirement medical benefits, self-insurance and warranty reserves, and stock-based compensation, among others. These estimates and assumptions are based on our best estimates and judgment.
We evaluate these estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment. We believe these estimates and assumptions to be reasonable under the circumstances and will adjust such estimates and assumptions when facts and circumstances dictate. Volatile equity, foreign currency and commodity markets combine to increase the uncertainty inherent in such estimates and assumptions. Future events and their effects cannot be determined with precision and actual results could differ significantly from these estimates. Changes in these estimates will be reflected in the financial statements in future periods.
Recent Accounting Pronouncements
Leases
Leases
We determine if an arrangement is a lease at inception. Operating leases are included in our Consolidated Balance Sheets as Right-of-use assets from operating leases, Current operating lease liabilities and Long-term operating lease liabilities. Finance leases are included in Property, plant and equipment, Current maturities of long-term debt and Long-term debt in our Consolidated Balance Sheets. We do not recognize a right-of-use asset and lease liability for leases with a term of 12 months or less. We do 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.

Many of our lease agreements contain renewal options; however, we do not recognize right-of-use assets or lease liabilities for renewal periods unless it is determined that we are reasonably certain of renewing the lease at inception or when a triggering
event occurs. Some of our lease agreements contain rent escalation clauses (including index-based escalations), rent holidays, capital improvement funding or other lease concessions. We recognize our minimum rental expense on a straight-line basis based on the fixed components of a lease arrangement. We amortize this expense over the term of the lease beginning with the date of initial possession. Variable lease components represent amounts that are not fixed in nature and are not tied to an index or rate, and are recognized as incurred. Under certain of our third-party service agreements, we control a specific space or underlying asset used in providing the service by the third-party service provider. These arrangements meet the definition under ASC 842 and therefore are accounted for under ASC 842.

In determining our right-of-use assets and lease liabilities, we apply a discount rate to the minimum lease payments within each lease agreement. ASC 842 requires us to use the rate of interest that a lessee would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. When we cannot readily determine the discount rate implicit in the lease agreement, we utilize our incremental borrowing rate. To estimate our specific incremental borrowing rates over various periods (ranging from 1-year through 30-years), a comparable market yield curve consistent with our credit quality was calibrated to our publicly outstanding debt instruments.
We lease certain real and personal property under non-cancelable operating leases. Approximately 79% of our right-of-use assets and lease liabilities relate to our leases of real estate with the remaining amounts primarily relating to our leases of IT equipment, fleet vehicles and manufacturing and distribution equipment.
v3.24.3
Commitment and Contingencies (Policies)
 9 Months Ended
Sep. 30, 2024
Commitments and Contingencies Disclosure [Abstract]  
Leases
Leases
We determine if an arrangement is a lease at inception. Operating leases are included in our Consolidated Balance Sheets as Right-of-use assets from operating leases, Current operating lease liabilities and Long-term operating lease liabilities. Finance leases are included in Property, plant and equipment, Current maturities of long-term debt and Long-term debt in our Consolidated Balance Sheets. We do not recognize a right-of-use asset and lease liability for leases with a term of 12 months or less. We do 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.

Many of our lease agreements contain renewal options; however, we do not recognize right-of-use assets or lease liabilities for renewal periods unless it is determined that we are reasonably certain of renewing the lease at inception or when a triggering
event occurs. Some of our lease agreements contain rent escalation clauses (including index-based escalations), rent holidays, capital improvement funding or other lease concessions. We recognize our minimum rental expense on a straight-line basis based on the fixed components of a lease arrangement. We amortize this expense over the term of the lease beginning with the date of initial possession. Variable lease components represent amounts that are not fixed in nature and are not tied to an index or rate, and are recognized as incurred. Under certain of our third-party service agreements, we control a specific space or underlying asset used in providing the service by the third-party service provider. These arrangements meet the definition under ASC 842 and therefore are accounted for under ASC 842.

In determining our right-of-use assets and lease liabilities, we apply a discount rate to the minimum lease payments within each lease agreement. ASC 842 requires us to use the rate of interest that a lessee would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. When we cannot readily determine the discount rate implicit in the lease agreement, we utilize our incremental borrowing rate. To estimate our specific incremental borrowing rates over various periods (ranging from 1-year through 30-years), a comparable market yield curve consistent with our credit quality was calibrated to our publicly outstanding debt instruments.
We lease certain real and personal property under non-cancelable operating leases. Approximately 79% of our right-of-use assets and lease liabilities relate to our leases of real estate with the remaining amounts primarily relating to our leases of IT equipment, fleet vehicles and manufacturing and distribution equipment.
v3.24.3
Reportable Business Segments (Tables)
 9 Months Ended
Sep. 30, 2024
Segment Reporting, Measurement Disclosures [Abstract]  
Summary of segment description The following table describes each segment:
 
SegmentProduct or ServicesMarkets ServedGeographic Areas
Home Comfort SolutionsFurnaces, air conditioners, heat pumps, packaged heating and cooling systems, indoor air quality equipment, comfort control products, replacement parts and suppliesResidential Replacement;
Residential New Construction		United States
Canada
Building Climate SolutionsCommercial heating, air conditioning and refrigeration systems. Products include rooftop packaged units, variable refrigerant flow systems, heat pumps, air cooled condensing units, air handlers, unit coolers, and process chillers. Services include installation, energy monitoring, service and maintenance, and HVAC recycling.Light Commercial;
Food Preservation;
Non-Food Industry		United States
Canada
Net sales and segment profit (loss) and reconciliation of segment profit (loss) to income from continuing operations before income taxes
Net sales and segment profit (loss) for each segment, along with a reconciliation of segment profit (loss) to Operating income, are shown below (in millions):
 For the Three Months Ended September 30,For the Nine Months Ended September 30,
 2024
2023
2024
2023
Net sales
Home Comfort Solutions$1,032.8 $896.3 $2,689.7 $2,513.6 
Business Climate Solutions
465.3 405.5 1,306.6 1,121.5 
Corporate and Other (1)
— 64.5 — 192.0 
Total segment net sales$1,498.1 $1,366.3 $3,996.3 $3,827.1 
Segment profit (loss) (2)
Home Comfort Solutions$226.5 $181.4 $567.1 $495.2 
Business Climate Solutions
105.9 97.3 298.1 250.3 
Corporate and Other
(29.1)(23.4)(76.6)(65.2)
Total segment profit303.3 255.3 788.6 680.3 
Reconciliation to Operating income:
Impairment on assets held for sale— 63.2 — 63.2 
Gain on sale from previous dispositions— — (1.6)— 
Items in Losses (gains) and other expenses, net that are excluded from segment profit (loss) (2)
— 5.0 — 12.1 
Restructuring charges— 0.3 — 0.2 
Operating income$303.3 $186.8 $790.2 $604.8 
(1) The Corporate and Other segment included our European portfolio. In the fourth quarter of 2023 we completed the divestiture of our European operations.
(2) We define segment profit (loss) as a segment's operating income included in the accompanying Consolidated Statements of Operations, excluding:
◦The following items in Losses and other expenses, net:
▪Net change in unrealized losses (gains) on unsettled futures contracts,
▪Environmental liabilities and special litigation charges, and
▪Other items, net
◦R
v3.24.3
Earnings Per Share (Tables)
 9 Months Ended
Sep. 30, 2024
Earnings Per Share [Abstract]  
Computations of basic and diluted loss per share for loss from continuing operations
The computations of basic and diluted earnings per share were as follows (in millions, except per share data):

 For the Three Months Ended September 30,For the Nine Months Ended September 30,
 2024202320242023
Net income $239.0 $130.4 $609.2 $445.6 
Weighted-average shares outstanding – basic35.6 35.5 35.6 35.5 
Add: Potential effect of dilutive securities attributable to stock-based payments0.2 0.2 0.2 0.1 
Weighted-average shares outstanding – diluted35.8 35.7 35.8 35.6 
Earnings per share – Basic:$6.71 $3.67 $17.11 $12.55 
Earnings per share – Diluted:$6.68 $3.65 $17.02 $12.51 
Stock appreciation rights were outstanding, but not included in the diluted loss per share calculation
The following stock appreciation rights and restricted stock units were outstanding but not included in the diluted earnings per share calculation as the assumed exercise of such rights would have been anti-dilutive (in millions, except for per share data):

 For the Three Months Ended September 30,For the Nine Months Ended September 30,
 2024202320242023
Weighted-average number of shares— 0.1 — 0.1 
v3.24.3
Commitments and Contingencies (Tables)
 9 Months Ended
Sep. 30, 2024
Commitments and Contingencies Disclosure [Abstract]  
Summary of changes in the total warranty liabilities
Liabilities for estimated product warranty costs are included in the following captions on the accompanying Consolidated Balance Sheets (in millions) as of:
September 30, 2024December 31, 2023
Accrued expenses$47.8 $45.4 
Other liabilities109.1 97.4 
Total warranty liability$156.9 $142.8 
The changes in product warranty liabilities for the nine months ended September 30, 2024 were as follows (in millions):
Total warranty liability as of December 31, 2023$142.8 
Warranty claims paid(32.4)
Changes resulting from issuance of new warranties46.5 
Changes in estimates associated with pre-existing liabilities0.2 
Changes in foreign currency translation rates and other(0.2)
Total warranty liability as of September 30, 2024
$156.9 
Schedule of probable insurance recoveries
v3.24.3
Revenue Recognition (Tables)
 9 Months Ended
Sep. 30, 2024
Revenue Recognition and Deferred Revenue [Abstract]  
Revenue from External Customers by Geographic Areas
The following table disaggregates our revenue by business segment by geography which provides information as to the major source of revenue. See Note 2 for additional information on our reportable business segments and the products and services sold in each segment. All amount presented reflect the revised segment presentation.

For the Three Months Ended September 30, 2024
Primary Geographic MarketsHome Comfort SolutionsBuilding Climate SolutionsCorporate and OtherConsolidated
United States$971.1 $441.9 $— $1,413.0 
Canada61.7 23.4 — 85.1 
Other international— — — — 
Total$1,032.8 $465.3 $— $1,498.1 

For the Three Months Ended September 30, 2023
Primary Geographic MarketsHome Comfort SolutionsBuilding Climate SolutionsCorporate and OtherConsolidated
United States$842.1 $376.8 $— $1,218.9 
Canada54.2 28.7 — 82.9 
Other international— — 64.5 64.5 
Total$896.3 $405.5 $64.5 $1,366.3 

For the Nine Months Ended September 30, 2024
Primary Geographic MarketsHome Comfort SolutionsBuilding Climate SolutionsCorporate and OtherConsolidated
United States$2,520.7 $1,244.2 $— $3,764.9 
Canada169.0 62.4 — 231.4 
Other international— — — — 
Total$2,689.7 $1,306.6 $— $3,996.3 

For the Nine Months Ended September 30, 2023
Primary Geographic MarketsHome Comfort SolutionsBuilding Climate SolutionsCorporate and OtherConsolidated
United States$2,350.0 $1,053.5 $— $3,403.5 
Canada163.6 68.0 — 231.6 
Other international— — 192.0 192.0 
Total$2,513.6 $1,121.5 $192.0 $3,827.1 
Contract with Customer, Asset and Liability Net contract liabilities consisted of the following (in millions) as of:
September 30, 2024December 31, 2023
Contract assets$2.0 $2.2 
Contract liabilities - current(4.2)(4.7)
Contract liabilities - noncurrent(8.1)(7.5)
Total$(10.3)$(10.0)
v3.24.3
Inventories (Tables)
 9 Months Ended
Sep. 30, 2024
Inventory Disclosure [Abstract]  
Components of inventories
The components of inventories are as follows (in millions) as of:
September 30, 2024December 31, 2023
Finished goods$443.2 $509.4 
Work in process13.7 9.6 
Raw materials and parts369.3 314.2 
Subtotal826.2 833.2 
Excess of current cost over last-in, first-out cost(137.0)(134.1)
Total inventories, net$689.2 $699.1 
v3.24.3
Goodwill (Tables)
 9 Months Ended
Sep. 30, 2024
Goodwill and Intangible Assets Disclosure [Abstract]  
Schedule of changes in the carrying amount of goodwill
The changes in the carrying amount of goodwill in 2024, in total and by segment, are summarized in the table below (in millions):
Balance as of December 31, 2023
Goodwill
   Adjustment (1)
Balance as of September 30, 2024
Home Comfort Solutions$26.1 $— $26.1 
Building Climate Solutions (1)
196.0 (2.2)193.8 
Total Goodwill$222.1 $(2.2)$219.9 

(1) As discussed in Note 13, an update to our purchase price allocation of AES in the first quarter of 2024 resulted in a $2.2 million reduction of goodwill.
v3.24.3
Derivatives (Tables)
 9 Months Ended
Sep. 30, 2024
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Amounts related to cash flow hedges We recorded the following amounts in AOCL related to our cash flow hedges (in millions) as of:
September 30, 2024December 31, 2023
Unrealized losses (gains), net on unsettled contracts$(5.5)$2.6 
Income tax (benefit) expense 1.3 (0.6)
Unrealized losses (gains), net included in AOCL, net of tax (1)
$(4.2)$2.0 
(1) Assuming commodity prices and foreign currency exchange rates remain constant, we expect to reclassify $4.0 million of derivative gain as of September 30, 2024 into earnings within the next 12 months.
v3.24.3
Stock-Based Compensation (Tables)
 9 Months Ended
Sep. 30, 2024
Share-Based Payment Arrangement [Abstract]  
Schedule of stock -based compensation expense in operations Stock-based compensation expense related to continuing operations is included in Selling, general and administrative expenses in the accompanying Consolidated Statements of Operations as follows (in millions):
For the Three Months Ended September 30,For the Nine Months Ended September 30,
2024202320242023
Stock-based compensation expense
$6.8 $9.7 $20.1 $23.5 
v3.24.3
Pension Benefit Plans (Tables)
 9 Months Ended
Sep. 30, 2024
Retirement Benefits [Abstract]  
Components of net periodic benefit cost
The components of net periodic benefit cost for pension benefits were as follows (in millions):
For the Three Months Ended September 30,For the Nine Months Ended September 30,
2024202320242023
Service cost$0.4 $0.5 $1.2 $1.6 
Interest cost2.2 2.2 6.5 6.7 
Expected return on plan assets(1.9)(2.4)(5.7)(7.1)
Recognized actuarial loss0.3 — 0.7 0.6 
Other— 0.3 — (0.1)
Settlements and curtailments0.1 0.3 0.4 0.4 
Net periodic benefit cost$1.1 $0.9 $3.1 $2.1 
v3.24.3
Lines of Credit and Financing Arrangements (Tables)
 9 Months Ended
Sep. 30, 2024
Debt Disclosure [Abstract]  
Summary of outstanding debt obligations
The following table summarizes our outstanding debt obligations and their classification in the accompanying Consolidated Balance Sheets (in millions) as of:

September 30, 2024December 31, 2023
Commercial paper$— $150.0 
Current maturities of long-term debt:
Finance lease obligations$13.2 $12.1 
Senior unsecured notes300.0 — 
Debt issuance costs(0.5)— 
    Total current maturities of long-term debt
$312.7 $12.1 
Long-Term Debt:
Finance lease obligations$34.6 $32.7 
Credit agreement— 20.0 
Senior unsecured notes800.0 1,100.0 
Debt issuance costs(7.0)(9.6)
Total long-term debt$827.6 $1,143.1 
Total debt$1,140.3 $1,305.2 
Summary of weighted average borrowing rate facility
Our weighted average borrowing rate on the Program was as follows as of:
September 30, 2024December 31, 2023
Weighted average borrowing rate— %5.66 %
Our weighted average borrowing rate on the facility was as follows as of:
September 30, 2024December 31, 2023
Weighted average borrowing rate— %6.67 %
v3.24.3
Comprehensive Income (Loss) (Tables)
 9 Months Ended
Sep. 30, 2024
Equity [Abstract]  
Reclassification out of accumulated other comprehensive income
The following table provides information on items reclassified from AOCL to Net income in the accompanying Consolidated Statements of Operations (in millions):
For the Three Months Ended September 30,For the Nine Months Ended September 30,Affected Line Item(s) in the Consolidated Statements of Operations
2024202320242023
(Losses) Gains on Cash Flow Hedges:
Derivatives contracts$(0.8)$(0.8)$(1.2)$(1.2)Cost of goods sold; Losses (gains) and other expenses, net
Income tax (expense) benefit(0.2)0.2 (0.3)0.3 Provision for income taxes
Net of tax$(0.6)$(0.6)$(0.9)$(0.9)
Defined Benefit Plan items:
Pension and post-retirement benefit costs$(0.3)$— $(0.7)$(0.6)Other expense (income), net
Pension settlements(0.1)(0.3)(0.4)(0.4)Pension settlements
Income tax (expense) benefit(0.1)0.1 (0.3)0.2 Provision for income taxes
Net of tax$(0.3)$(0.2)$(0.8)$(0.8)
Total reclassifications from AOCL$(0.9)$(0.8)$(1.7)$(1.7)
Changes in AOCI by component (net of tax)
The following table provides information on changes in AOCL, by component (net of tax), for the nine months ended September 30, 2024 (in millions):
(Losses) Gains on Cash Flow HedgesShare of Equity Method Investments Other Comprehensive IncomeDefined Benefit Pension Plan ItemsForeign Currency Translation AdjustmentsTotal AOCL
Balance as of December 31, 2023
$(2.0)$0.6 $(44.2)$(11.3)$(56.9)
Other comprehensive income (loss) before reclassifications5.3 (0.2)(1.2)(19.4)(15.5)
Amounts reclassified from AOCL0.9 — 0.8 — 1.7 
Net other comprehensive income (loss)6.2 (0.2)(0.4)(19.4)(13.8)
Balance as of September 30, 2024
$4.2 $0.4 $(44.6)$(30.7)$(70.7)
v3.24.3
Fair Value Measurements (Tables)
 9 Months Ended
Sep. 30, 2024
Fair Value Disclosures [Abstract]  
Other fair value measurements The following table presents their fair value (in millions) as of:
September 30, 2024December 31, 2023
Senior unsecured notes$1,098.0 $1,079.3 
v3.24.3
Prior Year Acquisition (Tables)
 9 Months Ended
Sep. 30, 2024
Business Combination and Asset Acquisition [Abstract]  
Schedule of Business Acquisitions, by Acquisition The following table details the purchase price adjustments that were made during the first quarter of 2024 (in millions):
December 31, 2023AdjustmentSeptember 30, 2024
Net tangible assets acquired$17.6 $(1.7)$15.9 
Intangible assets acquired36.9 2.1 39.0 
Goodwill40.4 (2.2)38.2 
Total investment$94.9 $(1.8)$93.1 
v3.24.3
Reportable Business Segments (Segment Data) (Details)
 3 Months Ended 9 Months Ended
Sep. 30, 2024
USD ($)
Sep. 30, 2023
USD ($)
Sep. 30, 2024
USD ($)
segment
Sep. 30, 2023
USD ($)
Segment Reporting Information [Line Items]        
Number of Reportable Segments | segment     2  
Net sales        
Net sales $ 1,498,100,000 $ 1,366,300,000 $ 3,996,300,000 $ 3,827,100,000
Segment profit (loss)        
Total segment profit 303,300,000 255,300,000 788,600,000 680,300,000
Gain on sale from previous dispositions 0 63,200,000 0 63,200,000
Reconciliation to Operating income:        
Gain on sale from previous dispositions 0 0 (1,600,000) 0
Items in Losses (gains) and other expenses, net that are excluded from segment profit (loss) 0 5,000,000.0 0 12,100,000
Operating income 303,300,000 186,800,000 790,200,000 604,800,000
Home Comfort Solutions        
Net sales        
Net sales 1,032,800,000 896,300,000 2,689,700,000 2,513,600,000
Segment profit (loss)        
Total segment profit 226,500,000 181,400,000 567,100,000 495,200,000
Building Climate Solutions        
Net sales        
Net sales 465,300,000 405,500,000 1,306,600,000 1,121,500,000
Segment profit (loss)        
Total segment profit 105,900,000 97,300,000 298,100,000 250,300,000
Corporate and Other        
Net sales        
Net sales 0 64,500,000 0 192,000,000.0
Segment profit (loss)        
Total segment profit $ (29,100,000) $ (23,400,000) $ (76,600,000) $ (65,200,000)
v3.24.3
Earnings Per Share (Computation of Basic and Diluted Earnings Per Share) (Details) - USD ($)
$ / shares in Units, shares in Millions, $ in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Earnings Per Share [Abstract]        
Net income $ 239.0 $ 130.4 $ 609.2 $ 445.6
Weighted average number of shares outstanding, basic (in shares) 35.6 35.5 35.6 35.5
Add: Potential effect of dilutive securities attributable to stock-based payments 0.2 0.2 0.2 0.1
Weighted-average shares outstanding – diluted 35.8 35.7 35.8 35.6
Earnings per share - Basic (in dollars per share) $ 6.71 $ 3.67 $ 17.11 $ 12.55
Earnings per share - Diluted (in dollars per share) $ 6.68 $ 3.65 $ 17.02 $ 12.51
v3.24.3
Earnings Per Share (Excluded from Diluted Earnings Per Share Calculation) (Details) - shares
shares in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Earnings Per Share [Abstract]        
Weighted-average number of shares 0.0 0.1 0.0 0.1
v3.24.3
Commitments and Contingencies (Liabilities for Estimated Product Warranty Costs) (Details) - USD ($)
$ in Millions
Sep. 30, 2024
Dec. 31, 2023
Total liabilities for estimated warranty    
Accrued expenses $ 47.8 $ 45.4
Other liabilities 109.1 97.4
Total warranty liability $ 156.9 $ 142.8
v3.24.3
Commitments and Contingencies (Changes in Product Warranty Liabilities) (Details)
$ in Millions
 9 Months Ended
Sep. 30, 2024
USD ($)
Loss Contingencies [Line Items]  
Standard and Extended Product Warranty Accrual, Foreign Currency Translation Gain (Loss) $ (0.2)
Movement in Standard and Extended Product Warranty Accrual, Increase (Decrease) [Roll Forward]  
Total warranty liability, beginning balance (142.8)
Warranty claims paid (32.4)
Standard and Extended Product Warranty Accrual, Increase (Decrease) for Preexisting Warranties 0.2
Changes resulting from issuance of new warranties 46.5
Total warranty liability, ending balance $ (156.9)
v3.24.3
Commitments and Contingencies (Narrative) (Details)
Sep. 30, 2024
Loss Contingencies [Line Items]  
Operating lease, right-of-use asset, percentage related to leases of real estate 0.79
v3.24.3
Stock Repurchases (Details) - USD ($)
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2024
Sep. 30, 2023
Jul. 09, 2021
Stockholders' Equity Note [Abstract]        
Stock repurchase program, authorized amount $ 4,000,000,000.0 $ 4,000,000,000.0   $ 1,000,000,000
Stock repurchase program, remaining authorized amount $ 532,500,000 532,500,000    
Shares repurchased from employees who surrendered shares to satisfy minimum tax withholding obligations, value   $ 15,000,000.0 $ 7,100,000  
Shares repurchased during period (in shares) 23,000 23,000    
Shares repurchased during period, amount $ 13,500,000 $ 13,500,000    
v3.24.3
Revenue Recognition (Narrative) (Details) - USD ($)
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2023
Disaggregation of Revenue [Line Items]    
Contract with Customer, Liability, Revenue Recognized $ 2,800,000 $ 7,000,000
Home Comfort Solutions | Sales Channel, Directly to Consumer    
Disaggregation of Revenue [Line Items]    
Revenue from Contract with Customer, Excluding Assessed Tax 0.77 0.75
Commercial Heating and Cooling | Equipment Sales    
Disaggregation of Revenue [Line Items]    
Revenue from Contract with Customer, Excluding Assessed Tax $ 0.88 $ 0.87
v3.24.3
Revenue Recognition (Revenue by Business Segment by Geography) (Details) - USD ($)
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Disaggregation of Revenue [Line Items]        
Contract with Customer, Liability, Revenue Recognized   $ 2,800,000   $ 7,000,000
Revenue, Net $ 1,498,100,000 1,366,300,000 $ 3,996,300,000 3,827,100,000
Residential Heating and Cooling [Member]        
Disaggregation of Revenue [Line Items]        
Revenue, Net 1,032,800,000 896,300,000 2,689,700,000 2,513,600,000
Commercial Heating and Cooling        
Disaggregation of Revenue [Line Items]        
Revenue, Net 465,300,000 405,500,000 1,306,600,000 1,121,500,000
Corporate & Other        
Disaggregation of Revenue [Line Items]        
Revenue, Net 0 64,500,000 0 192,000,000.0
Sales Channel, Directly to Consumer | Residential Heating and Cooling [Member]        
Disaggregation of Revenue [Line Items]        
Revenue from Contract with Customer, Excluding Assessed Tax   0.77   0.75
Equipment Sales | Commercial Heating and Cooling        
Disaggregation of Revenue [Line Items]        
Revenue from Contract with Customer, Excluding Assessed Tax   0.88   0.87
International [Member]        
Disaggregation of Revenue [Line Items]        
Revenue, Net 0 64,500,000 0 192,000,000.0
International [Member] | Residential Heating and Cooling [Member]        
Disaggregation of Revenue [Line Items]        
Revenue, Net 0 0 0 0
International [Member] | Commercial Heating and Cooling        
Disaggregation of Revenue [Line Items]        
Revenue, Net 0 0 0 0
International [Member] | Corporate & Other        
Disaggregation of Revenue [Line Items]        
Revenue, Net 0 64,500,000 0 192,000,000.0
CANADA        
Disaggregation of Revenue [Line Items]        
Revenue, Net 85,100,000 82,900,000 231,400,000 231,600,000
CANADA | Residential Heating and Cooling [Member]        
Disaggregation of Revenue [Line Items]        
Revenue, Net 61,700,000 54,200,000 169,000,000.0 163,600,000
CANADA | Commercial Heating and Cooling        
Disaggregation of Revenue [Line Items]        
Revenue, Net 23,400,000 28,700,000 62,400,000 68,000,000.0
CANADA | Corporate & Other        
Disaggregation of Revenue [Line Items]        
Revenue, Net 0 0 0 0
UNITED STATES        
Disaggregation of Revenue [Line Items]        
Revenue, Net 1,413,000,000 1,218,900,000 3,764,900,000 3,403,500,000
UNITED STATES | Residential Heating and Cooling [Member]        
Disaggregation of Revenue [Line Items]        
Revenue, Net 971,100,000 842,100,000 2,520,700,000 2,350,000,000
UNITED STATES | Commercial Heating and Cooling        
Disaggregation of Revenue [Line Items]        
Revenue, Net 441,900,000 376,800,000 1,244,200,000 1,053,500,000
UNITED STATES | Corporate & Other        
Disaggregation of Revenue [Line Items]        
Revenue, Net $ 0 $ 0 $ 0 $ 0
v3.24.3
Revenue Recognition (Net Contract Assets (Liabilities)) (Details) - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2023
Sep. 30, 2024
Dec. 31, 2023
Revenue Recognition and Deferred Revenue [Abstract]        
Contract assets     $ 2.0 $ 2.2
Contract liabilities - current     (4.2) (4.7)
Contract liabilities - noncurrent     (8.1) (7.5)
Total     $ (10.3) $ (10.0)
Contract with Customer, Liability, Revenue Recognized $ 2.8 $ 7.0    
v3.24.3
Inventories (Details) - USD ($)
$ in Millions
Sep. 30, 2024
Dec. 31, 2023
Components of inventories    
Finished goods $ 443.2 $ 509.4
Work in process 13.7 9.6
Raw materials and parts 369.3 314.2
Subtotal 826.2 833.2
Excess of current cost over last-in, first-out cost (137.0) (134.1)
Total inventories, net $ 689.2 $ 699.1
v3.24.3
Goodwill (Details) - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Jun. 30, 2024
Sep. 30, 2024
Goodwill [Roll Forward]    
Goodwill, Beginning Balance   $ 222.1
Goodwill adjustment   (2.2)
Goodwill, Ending Balance   219.9
AES    
Goodwill [Roll Forward]    
Goodwill, Beginning Balance   40.4
Goodwill adjustment $ 2.2 2.2
Goodwill, Ending Balance   38.2
Home Comfort Solutions    
Goodwill [Roll Forward]    
Goodwill, Beginning Balance   26.1
Goodwill adjustment   0.0
Goodwill, Ending Balance   26.1
Building Climate Solutions    
Goodwill [Roll Forward]    
Goodwill, Beginning Balance   196.0
Goodwill adjustment   (2.2)
Goodwill, Ending Balance   $ 193.8
v3.24.3
Derivatives (AOCL Related to Cash Flow Hedges) (Details) - Cash Flow Hedge [Member] - USD ($)
$ in Millions
 9 Months Ended
Sep. 30, 2024
Dec. 31, 2023
Derivative Instruments, Gain (Loss) [Line Items]    
Unrealized losses (gains), net on unsettled contracts $ (5.5) $ 2.6
Income tax (benefit) expense 1.3 (0.6)
Losses included in AOCL, net of tax (4.2) $ 2.0
Cash flow hedge derivative losses expected to be reclassified into earnings within the next 12 months $ 4.0  
v3.24.3
Stock-Based Compensation (Details) - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Share-Based Payment Arrangement [Abstract]        
Stock-based compensation expense $ 6.8 $ 9.7 $ 20.1 $ 23.5
v3.24.3
Stock-Based Compensation - Schedule of Equity Awards Granted in Period (Details) - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Share-Based Payment Arrangement [Abstract]        
Stock-based compensation expense $ 6.8 $ 9.7 $ 20.1 $ 23.5
v3.24.3
Pension Benefit Plans (Details) - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Retirement Benefits [Abstract]        
Service cost $ 0.4 $ 0.5 $ 1.2 $ 1.6
Interest cost 2.2 2.2 6.5 6.7
Expected return on plan assets (1.9) (2.4) (5.7) (7.1)
Recognized actuarial loss 0.3 0.0 0.7 0.6
Other 0.0 0.3 0.0 (0.1)
Settlements and curtailments 0.1 0.3 0.4 0.4
Net periodic benefit cost $ 1.1 $ 0.9 $ 3.1 $ 2.1
v3.24.3
Income Taxes (Details) - USD ($)
$ in Millions
 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Income Tax Disclosure [Abstract]    
Unrecognized tax benefits $ 4.5  
Effective tax rate 19.30% 21.00%
v3.24.3
Lines of Credit and Financing Arrangements (Outstanding Debt Obligations) (Details) - USD ($)
Sep. 30, 2024
Dec. 31, 2023
Debt Instrument [Line Items]    
Commercial paper $ 0 $ 150,000,000.0
Current maturities of long-term debt:    
Finance lease obligations 13,200,000 12,100,000
Debt issuance costs (500,000) 0
Total current maturities of long-term debt 312,700,000 12,100,000
Long-Term Debt:    
Finance lease obligations 34,600,000 32,700,000
Debt issuance costs (7,000,000.0) (9,600,000)
Total long-term debt 827,600,000 1,143,100,000
Total debt 1,140,300,000 1,305,200,000
Senior Unsecured Notes    
Current maturities of long-term debt:    
Senior unsecured notes 300,000,000.0 0
Long-Term Debt:    
Domestic credit facility and senior unsecured notes 800,000,000.0 1,100,000,000
Domestic Credit Facility    
Long-Term Debt:    
Domestic credit facility and senior unsecured notes 0 20,000,000.0
Foreign Obligations    
Long-Term Debt:    
Short-term Debt $ 0 $ 0
v3.24.3
Lines of Credit and Financing Arrangements (Foreign Obligations) (Details) - Foreign Obligations - USD ($)
 9 Months Ended
Sep. 30, 2024
Dec. 31, 2023
Short-term Debt [Line Items]    
Short-term Debt $ 0 $ 0
Proceeds from Short-Term Debt $ 0  
v3.24.3
Lines of Credit and Financing Arrangements (Commercial Paper Program) (Details) - USD ($)
$ in Millions
Oct. 25, 2023
Sep. 30, 2024
Dec. 31, 2023
Line of Credit Facility [Line Items]      
Commercial paper   $ 0.0 $ 150.0
Commercial Paper      
Line of Credit Facility [Line Items]      
Maximum borrowing capacity $ 500.0    
Debt instrument term 397 days    
v3.24.3
Lines of Credit and Financing Arrangements (Domestic Credit Facility) (Details)
 1 Months Ended 9 Months Ended
Aug. 31, 2023
USD ($)
Sep. 30, 2024
USD ($)
extension
Jul. 31, 2021
Jul. 30, 2020
USD ($)
Subfacility for Swingline Loans        
Line of Credit Facility [Line Items]        
Maximum borrowing capacity   $ 65,000,000    
Medium-term Notes | Domestic Credit Facility        
Line of Credit Facility [Line Items]        
Face amount of debt       $ 1,100,000,000
Senior Notes [Member]        
Line of Credit Facility [Line Items]        
Minimum principal amount accelerated $ 75,000,000 75,000,000.0    
Revolving Credit Facility        
Line of Credit Facility [Line Items]        
Outstanding borrowings   0    
Committed standby letters of credit   1,700,000    
Available for future borrowings   $ 1,098,300,000    
Debt instrument, number of extension options | extension   2    
Debt instrument, term of extension options   1 year    
Debt instrument, covenant, net leverage ratio     3.50  
Debt instrument, covenant, net leverage ratio following material acquisition     4.00  
2025 Notes [Member] | Senior Notes [Member]        
Line of Credit Facility [Line Items]        
Face amount of debt       $ 300,000,000
Debt instrument, interest rate, stated percentage       1.35%
2027 Notes [Member] | Senior Notes [Member]        
Line of Credit Facility [Line Items]        
Face amount of debt       $ 300,000,000
Debt instrument, interest rate, stated percentage       1.70%
v3.24.3
Lines of Credit and Financing Arrangements (Weighted Average Borrowing Rate) (Details)
Sep. 30, 2024
Dec. 31, 2023
Revolving Credit Facility    
Line of Credit Facility [Line Items]    
Weighted average borrowing rate 0.00% 6.67%
Commercial Paper    
Line of Credit Facility [Line Items]    
Weighted average borrowing rate 0.00% 5.66%
v3.24.3
Lines of Credit and Financing Arrangements (Senior Unsecured Notes) (Details) - Senior Unsecured Notes
 1 Months Ended 9 Months Ended
Aug. 31, 2023
USD ($)
Sep. 30, 2024
USD ($)
Sep. 30, 2023
USD ($)
Jul. 30, 2020
USD ($)
Nov. 01, 2016
debtSeries
Debt Instrument [Line Items]          
Minimum principal amount accelerated $ 75,000,000 $ 75,000,000.0      
Notice period   30 days      
Redemption price (percentage) 101.00%        
2025 Notes [Member]          
Debt Instrument [Line Items]          
Senior unsecured notes       $ 300,000,000  
Fixed interest rate for senior unsecured notes (as a percent)       1.35%  
2027 Notes [Member]          
Debt Instrument [Line Items]          
Senior unsecured notes       $ 300,000,000  
Fixed interest rate for senior unsecured notes (as a percent)       1.70%  
2023 Notes [Member]          
Debt Instrument [Line Items]          
Number of senior unsecured notes | debtSeries         2
2028 Notes          
Debt Instrument [Line Items]          
Senior unsecured notes     $ 500,000,000    
Fixed interest rate for senior unsecured notes (as a percent)     5.50%    
v3.24.3
Comprehensive Income (Loss) (Reclassification out of AOCL) (Details) - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]        
Other expense (income), net $ (1,009.7) $ (937.8) $ (2,679.7) $ (2,634.1)
Income tax (expense) benefit (54.9) (44.8) (145.9) (118.5)
Reclassification out of Accumulated Other Comprehensive Loss [Member]        
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]        
Net of tax (0.9) (0.8) (1.7) (1.7)
Reclassification out of Accumulated Other Comprehensive Loss [Member] | (Losses)/Gains on Cash Flow Hedges [Member]        
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]        
Income tax (expense) benefit (0.2) 0.2 (0.3) 0.3
Net of tax (0.6) (0.6) (0.9) (0.9)
Reclassification out of Accumulated Other Comprehensive Loss [Member] | (Losses)/Gains on Cash Flow Hedges [Member] | Commodity Futures Contracts [Member]        
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]        
Other expense (income), net (0.8) (0.8) (1.2) (1.2)
Reclassification out of Accumulated Other Comprehensive Loss [Member] | Defined Benefit Plan Items [Member]        
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]        
Other expense (income), net (0.3) 0.0 (0.7) (0.6)
Income tax (expense) benefit (0.1) 0.1 (0.3) 0.2
Net of tax $ (0.3) $ (0.2) $ (0.8) $ (0.8)
v3.24.3
Comprehensive Income (Loss) (Changes in AOCL) (Details)
$ in Millions
 9 Months Ended
Sep. 30, 2024
USD ($)
Changes in AOCI by component (net of tax) [Roll Forward]  
Balance as of beginning of period $ (56.9)
Other comprehensive income (loss) before reclassifications (15.5)
Amounts reclassified from AOCL 1.7
Net other comprehensive income (loss) (13.8)
Balance as of end of period (70.7)
Gains (Losses) on Cash Flow Hedges [Member]  
Changes in AOCI by component (net of tax) [Roll Forward]  
Balance as of beginning of period (2.0)
Other comprehensive income (loss) before reclassifications 5.3
Amounts reclassified from AOCL 0.9
Net other comprehensive income (loss) 6.2
Balance as of end of period 4.2
Defined Benefit Pension Plan Items [Member]  
Changes in AOCI by component (net of tax) [Roll Forward]  
Balance as of beginning of period (44.2)
Other comprehensive income (loss) before reclassifications (1.2)
Amounts reclassified from AOCL 0.8
Net other comprehensive income (loss) (0.4)
Balance as of end of period (44.6)
Accumulated Foreign Currency Adjustment Attributable to Parent [Member]  
Changes in AOCI by component (net of tax) [Roll Forward]  
Balance as of beginning of period (11.3)
Other comprehensive income (loss) before reclassifications (19.4)
Amounts reclassified from AOCL 0.0
Net other comprehensive income (loss) (19.4)
Balance as of end of period (30.7)
Accumulated Defined Benefit Plans Adjustment Attributable to Noncontrolling Interest  
Changes in AOCI by component (net of tax) [Roll Forward]  
Balance as of beginning of period 0.6
Other comprehensive income (loss) before reclassifications (0.2)
Amounts reclassified from AOCL 0.0
Net other comprehensive income (loss) (0.2)
Balance as of end of period $ 0.4
v3.24.3
Fair Value Measurements (Other Fair Value Disclosures) (Details) - USD ($)
$ in Millions
Sep. 30, 2024
Dec. 31, 2023
Level 2 [Member] | Senior Unsecured Notes [Member]    
Other Fair Value Measurements    
Senior unsecured notes $ 1,098.0 $ 1,079.3
v3.24.3
Business Combinations and Asset Acquisitions (Details) - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Jun. 30, 2024
Sep. 30, 2024
Dec. 31, 2023
Business Acquisition [Line Items]      
Goodwill   $ 219.9 $ 222.1
Goodwill adjustment   2.2  
AES      
Business Acquisition [Line Items]      
Net tangible assets acquired   15.9 17.6
Net tangible assets acquired, adjustment   (1.7)  
Intangible assets acquired   39.0 36.9
Intangible assets acquired, adjustment   2.1  
Goodwill   38.2 40.4
Goodwill adjustment $ (2.2) (2.2)  
Total investment   93.1 $ 94.9
Total investment, adjustment   $ (1.8)  
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