10-K 0001069202-26-000028 (2026-02-17) vs 10-K 0001628280-25-004859 (2025-02-11)
| Section | Compared text | Words now | Changed |
|---|
| Risk Factors | Item 1A | 5,238 |
13.4% |
| MD&A | Item 7 | 6,448 |
20.7% |
| Legal Proceedings | Item 3, via Note 5 – Commitments and Contingencies: | 1,040 |
6.6% |
| Accounting Policies | Item 8, Note 2 – Summary of Significant Accounting Policies: | 3,040 |
13.7% |
The redline: what was cut and what was added
In each section, the paragraph that changed most, marked against last year's 10-K:
cut words struck through, new words highlighted and underlined.
Risk Factors 109 words changed in this paragraph; it is 64% similar to last year's version.
The U.S. government has made changes in U.S. trade policy over the past several years. These changes include renegotiating and terminating certain existing bilateral or multi-lateral trade agreements, such as the U.S.-Mexico-Canada Agreement, Agreement (“USMCA”), and initiating tariffs on certain foreign goods from a variety of countries and regions. countries. In addition, the new U.S. presidential administration has articulated that it may impose substantial new or imposed increased tariffs on foreign imports into the U.S., particularly from Canada and Mexico. Mexico for goods not covered by the USMCA. The USMCA is subject to review and renewal in 2026, and there can be no assurance that any newly negotiated terms in the USMCA will not adversely affect our business or operations. These changes in U.S. trade policy have historically resulted in, led, and may continue again lead, to result in, one or more foreign governments adopting enacting responsive trade policies that make it more difficult increase the difficulty or costly for us to do cost of doing international business in or import or export our products or components from those countries. The trade. As a consequence, the sales, gross margins, and profitability for each of our segments could be directly impacted by changes in tariffs and trade agreements.
Source: Item 1A, 10-K 0001069202-26-000028 vs Item 1A, 10-K 0001628280-25-004859
Accounting Policies 95 words changed in this paragraph; it is 35% similar to last year's version.
Inventory costs include material, labor, and capitalized overhead. Inventories of $494.3 million and $438.9 million as of December 31, 2024 and 2023, respectively, were valued at the lower of cost or net realizable value using the last-in, first-out (“LIFO”) cost method. The remainder of inventory is are valued at the lower of cost or net realizable value with cost costs determined primarily using either the standard cost, which approximates costs determined on a first-in, first-out (“FIFO”) or average cost methods. basis. See Note 9 for more information on our inventories. In the fourth quarter of 2025, we changed the method of accounting for certain of our inventories from last-in-first-out (“LIFO”) to FIFO. Refer to “Change in Accounting” below for further discussion.
Source: Item 8, Note 2 – Summary of Significant Accounting Policies:, 10-K 0001069202-26-000028 vs Item 8, Note 2 – Summary of Significant Accounting Policies:, 10-K 0001628280-25-004859
MD&A 90 words changed in this paragraph; it is 69% similar to last year's version.
All In the Notes 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. 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 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 $75 million in principal which is then accelerated, and such acceleration is not rescinded within 30 days of the notice date. As of December 31, 2024, we believe we were in compliance with all covenant requirements.
Source: Item 7, 10-K 0001069202-26-000028 vs Item 7, 10-K 0001628280-25-004859
Legal Proceedings 80 words changed in this paragraph; it is 56% similar to last year's version.
Total warranty liability as of December 31, 2022 $ 142.7 Payments made in 2023 (40.1) Changes resulting from issuance of new warranties 53.9 Changes in estimates associated with pre-existing liabilities (13.9) Changes in foreign currency translation rates and other 0.2 Total warranty liability as of December 31, 2023 $ 142.8 Payments made in 2024 (41.2) Changes resulting from issuance of new warranties 59.0 Changes in estimates associated with pre-existing liabilities (1.4) Changes in foreign currency translation rates and other (0.8) Total warranty liability as of December 31, 2024 $ 158.4 Payments made in 2025 (46.9) Changes resulting from issuance of new warranties 52.5 Changes in estimates associated with pre-existing liabilities 2.7 Changes in foreign currency translation rates and other 0.5 Total warranty liability as of December 31, 2025 $ 167.2
Source: Item 3, via Note 5 – Commitments and Contingencies:, 10-K 0001069202-26-000028 vs Item 3, via Note 5 – Commitments and Contingencies:, 10-K 0001628280-25-004859
Every change, by type
Sentences and paragraphs of LII's Risk Factors and MD&A, 10-K 2026-02-17 against 10-K 2025-02-11.
Each links to the text at sec.gov.
Quiet changes are sentences kept from last year with one to four words changed, at least one of them a hedge, a modal or a qualifier
(may, could, will, not, significant, material…). A year or date rolling forward is not counted.
The full word list
adverse, adversely, all, although, anticipate, anticipates, any, approximately, believe, believes, can, cannot, certain, could, expect, expects, generally, however, if, intend, intends, largely, likely, many, material, materially, may, might, most, must, never, no, not, possible, primarily, probable, should, significant, significantly, some, substantial, substantially, unlikely, will, would
AddedRisk Factors
whether accurate or inaccurate, could damage our reputation and relationships with our customers and suppliers, cause customers and suppliers to terminate their relationship with us, or impair our ability to effectively compete, which could adversely affect our business, financial condition, results of operations and cash flows.
Read it in 10-K 2026-02-17 at sec.gov ↗
AddedRisk Factors
Lennox operates a direct-to-dealer network, meaning we manufacture products and sell them directly to select, independent home service companies. We rely on our direct sales channel for a substantial portion of our revenue. Our direct-to-dealer network also creates a large installed base of HVACR equipment, and creates opportunities for longer term service, monitoring, solutions, and retrofit revenue. If we are unable to continue to execute our strategy, whether due to changes in economic conditions, a failure to anticipate changing customer needs, entry of new competitors into the low-barrier distribution business, or for any other reason, our revenue could decline, which could in turn adversely impact our product pull-through and our ability to grow revenue.
Read it in 10-K 2026-02-17 at sec.gov ↗
AddedRisk Factors
selling certain of our products. Even if we have agreements to indemnify us, indemnifying parties may be unable or unwilling to do so.
Read it in 10-K 2026-02-17 at sec.gov ↗
RemovedRisk Factors
November 1, 2021; however, the results of future negotiations with unions are uncertain. If we are unsuccessful in meeting these challenges, our results of operations could be materially impacted.
Read it in 10-K 2025-02-11 at sec.gov ↗
RemovedRisk Factors
result in loss of business, regulatory penalties, litigation, and/or reputational damage. Further, we may face adverse reputational risks due to our products and manufacturing operations consuming energy or using refrigerants and hydroflurocarbons.
Read it in 10-K 2025-02-11 at sec.gov ↗
RewordedRisk Factors
We are regularly subject to audits by tax authorities, and such audits could result in changes in our tax reserves for our historic or future tax positions and transfer pricing policies, which could significantly adversely impact our effective tax rates and financial results.
Read it in 10-K 2026-02-17 at sec.gov ↗
RewordedRisk Factors
In addition, the new U.S. presidential administration has articulated that it may impose substantial new or imposed increased tariffs on foreign imports into the U.S., particularly from Canada and Mexico. Mexico for goods not covered by the USMCA.
Read it in 10-K 2026-02-17 at sec.gov ↗
RewordedRisk Factors
Conflicts, External disruptions, including, but not limited to, conflicts, wars, natural disasters (the nature and severity of which may be impacted by climate change), public health crises, terrorist acts, or terrorist acts other civil or political disruptions, may cause significant damage or disruption to our operations, employees, facilities, systems, suppliers, supply chain, distributors, resellers, or customers in the United States U.S. and internationally for extended periods of time and could also affect demand for our products.
Read it in 10-K 2026-02-17 at sec.gov ↗
RewordedRisk Factors
The continuing adoption or expansion of trade restrictions, the occurrence of a trade war, tensions, or other governmental action actions related to tariffs or trade agreements or policies has the potential to adversely impact trade policies, may negatively affect demand for our products, our costs, our customers, our suppliers, and the U.S. economy, which in turn could have a material adverse effect on our business, results of operations, and financial condition.
Read it in 10-K 2026-02-17 at sec.gov ↗
RewordedRisk Factors
This inability to fully meet demand would be exacerbated if a single-location production facility is disrupted due to external factors including, but not limited to, a climate-related disaster, pandemic, pandemic or epidemic, geopolitical political instability, or war, among other things. war.
Read it in 10-K 2026-02-17 at sec.gov ↗
RewordedRisk Factors
A number of factors may adversely affect the labor force available or increase labor costs, including labor shortages from high employment levels and related competition. competition or labor stoppages due to disputes or strikes.
Read it in 10-K 2026-02-17 at sec.gov ↗
RewordedRisk Factors
Our Marshalltown, Iowa-based union ratified a five-year labor agreement on November 1, 2021; however, the results of future negotiations with unions are uncertain.
Read it in 10-K 2026-02-17 at sec.gov ↗
RewordedRisk Factors
The We have begun to incorporate AI capabilities into our operations and the introduction of these technologies, particularly generative AI, into internal processes, customer engagements, and/or new and existing product offerings may result in new or expanded risks and liabilities, including due to enhanced governmental or regulatory scrutiny, litigation, compliance issues, ethical concerns, confidentiality or security risks, as well as other factors that could adversely affect our business, reputation, and financial results.
Read it in 10-K 2026-02-17 at sec.gov ↗
RewordedRisk Factors
In December 2022, the European Council attained a consensus on Pillar Two to implement a global minimum corporate tax rate of 15%, and many European Union and G20 countries have specified their plan to adhere to the began incorporating and implementing OECD guidelines starting in 2024.
Read it in 10-K 2026-02-17 at sec.gov ↗
RewordedRisk Factors
Likewise, a failure to comply with any current or future sustainability-related reporting requirements, as established by U.S. and international regulators, may result in loss of business, regulatory penalties, litigation, and/or reputational damage.
Read it in 10-K 2026-02-17 at sec.gov ↗
RewordedRisk Factors
Stakeholders are increasingly scrutinizing environmental, social and governance (“ESG”) practices, and stakeholders’ expectations regarding ESG practices are diverse diverse, rapidly changing, and rapidly changing. sometimes in conflict.
Read it in 10-K 2026-02-17 at sec.gov ↗
RewordedRisk Factors
Our inability or delay in developing or marketing products that match customer demand while also meeting applicable LRPs may negatively impact our results. financial condition and results of operations.
Read it in 10-K 2026-02-17 at sec.gov ↗
AddedMD&A
In October 2025, we completed the acquisition of Duro Dyne and Supco, a robust portfolio of HVAC parts and supplies that complement our existing residential and commercial offerings. Duro Dyne is reported in our Business Climate Solutions segment, and Supco is reported in our Home Comfort Solutions segment.
Read it in 10-K 2026-02-17 at sec.gov ↗
AddedMD&A
In October 2023, we completed the acquisition of AES, which is included in our Building Climate Solutions segment. AES is a company dedicated to service and sustainability in the light commercial markets across North America.
Read it in 10-K 2026-02-17 at sec.gov ↗
AddedMD&A
In the fourth quarter of 2025, we changed the method of accounting for our inventories from last-in-first-out (“LIFO”) to first-in-first-out (“FIFO”). We believe the FIFO method is preferable because it more closely matches the physical flow of materials through purchasing, receiving, warehousing, production and order fulfillment, it results in a more consistent method to value inventory across the Company, and it improves comparability with industry peers. This change increased Retained Earnings by $106.6 million as of January 1, 2023, and increased net income by $1.1 million and $4.2 million for the years ended December 31, 2023 and 2024, respectively. All prior amounts have been adjusted.
Read it in 10-K 2026-02-17 at sec.gov ↗
AddedMD&A
On July 4, 2025, the One Big Beautiful Bill Act (the “OBBBA”) was enacted into law, introducing significant changes to corporate income tax rates and deductions. For fiscal year 2025, the OBBBA did not have a material impact on our effective tax rate. We continue to evaluate the future impact of the OBBBA for those provisions that are effective after fiscal year 2025.
Read it in 10-K 2026-02-17 at sec.gov ↗
AddedMD&A
Foreign currency exchange gains increased in 2025 primarily due to changes in foreign exchange rates in our primary markets. Acquisition costs are related to the acquisition of Duro Dyne and Supco. The acquisition occurred in the fourth quarter
Read it in 10-K 2026-02-17 at sec.gov ↗
AddedMD&A
On October 16, 2025, we entered into a Term Credit Agreement (the “Term Credit Agreement”) with Wells Fargo Bank, National Association, as administrative agent, and the other lenders party thereto. We borrowed $300.0 million pursuant to the Term Credit Agreement and used the net proceeds to repay existing borrowings under the Credit Agreement. The Term Credit Agreement matures on October 16, 2027. Loans under the Term Credit Agreement bear interest at our election at a rate per annum equal to (i) a forward-looking term rate based on the secured overnight financing rate for the applicable interest period ("Term SOFR"), plus an applicable margin ranging between 0.90% and 1.025% per annum depending on our long-term unsecured debt rating, or (ii) the highest of the Wells Fargo Bank, National Association prime rate, the Federal Funds rate plus
Read it in 10-K 2026-02-17 at sec.gov ↗
AddedMD&A
0.50%, and Term SOFR for a one month tenor in effect on such day plus 1.00%, plus an applicable margin ranging between 0.00% and 0.025% per annum depending on our long-term unsecured debt rating.
Read it in 10-K 2026-02-17 at sec.gov ↗
AddedMD&A
The Term Credit Agreement contains customary covenants and events of default that are substantially similar to the existing covenants and events of default in our Credit Agreement.
Read it in 10-K 2026-02-17 at sec.gov ↗
AddedMD&A
For the Year Ended December 31, 2025 Net sales $ 5,113.8 Gross profit 1,324.4 Net income 406.3
Read it in 10-K 2026-02-17 at sec.gov ↗
RemovedMD&A
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.
Read it in 10-K 2025-02-11 at sec.gov ↗
RemovedMD&A
(1) The total capacity on the facility is $1.1 billion. The amount available for future borrowings on our Credit Agreement (as defined below) is $1,098 million after being reduced by $2 million in outstanding standby letters of credit as of December 31, 2024.
Read it in 10-K 2025-02-11 at sec.gov ↗
RemovedMD&A
In August 2023, we entered into the Second Amendment (the “Second Amendment”) to our existing Credit Agreement, 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. Under the Second Amendment, the revolving commitments were increased by $350 million
Read it in 10-K 2025-02-11 at sec.gov ↗
RemovedMD&A
and certain representations required to be made as conditions precedent to borrowing were revised to provide us greater flexibility to enter into additional future financings.
Read it in 10-K 2025-02-11 at sec.gov ↗
RewordedMD&A
We In July 2020, we issued two series of senior unsecured notes on July 30, 2020 for $300.0 million each, million, which will mature on August 1, 2025 (the "2025 Notes") and August 1, 2027 (the "2027 Notes") Notes" and collectively with the 2028 Notes, the "Notes") with interest being paid semi-annually in February and August at 1.35% and 1.70% respectively, per annum (the 2025 Notes, the 2027 Notes, and the 2028 Notes, collectively the “Notes”). annum.
Read it in 10-K 2026-02-17 at sec.gov ↗
RewordedMD&A
As a percentage of net sales, SG&A expenses decreased 50 60 bps from 14.2% 13.7% to 13.7% 13.1% in the same periods, primarily due to higher lower employee-related costs including increased reduced incentive compensation, which was partially offset by a $62 million reduction in SG&A expenses from our 2023 divestiture of our European businesses. compensation and reduced discretionary expenses.
Read it in 10-K 2026-02-17 at sec.gov ↗
RewordedMD&A
In addition, the Credit Agreement contains Facilities each contain 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).
Read it in 10-K 2026-02-17 at sec.gov ↗
RewordedMD&A
Net Cash Used In Investing Activities - Net cash used in investing activities decreased $145 increased $481 million from 2023 2024 to 2024 2025 primarily due to lower capital expenditures and $95 $545 million related to our acquisition of AES in the fourth quarter of 2023. Duro Dyne and Supco, which was partially offset by lower capital expenditures.
Read it in 10-K 2026-02-17 at sec.gov ↗
RewordedMD&A
The following table presents our Home Comfort Solutions segment’s net sales and profit for 2025 and 2024 and 2023 (dollars in millions):For the Years Ended December 31, 2025 2024 2023 Difference % Change Net sales $ 3,577.1 $3,222.9 $354.2 11% Profit 3,343.4 $3,577.1 $ 759.7 $610.2 $149.5 25% (233.7) (7)% Segment profit $ 728.5 $760.5 $ (32.0) (4)% % of net sales 21.2 21.8 % 18.9% 21.3%
Read it in 10-K 2026-02-17 at sec.gov ↗
RewordedMD&A
Net sales increased 1% 5% in 2023 2025 compared to 2022 as a 6% 2024 due to an 8% increase in product favorable price and mix and a 2% increase in price sales volumes from our Duro Dyne acquisition, which were partially offset by a 7% 5% decrease in sales volume. volumes.
Read it in 10-K 2026-02-17 at sec.gov ↗
RewordedMD&A
December 31, 2024 December 31, 2023 2025 Current assets $ 1,713.9 $ 1,291.0 1,676.4 Non-current assets 6,995.0 5,737.1 1,824.9 Current liabilities 1,084.9 843.3 1,000.7 Non-current liabilities 1,266.8 1,477.3 1,689.4 Amounts due to non-guarantor subsidiaries (536.8) (472.3) non-Guarantor Subsidiaries (463.7)
Read it in 10-K 2026-02-17 at sec.gov ↗
RewordedMD&A
The Home Comfort Solutions segment experienced an 11% increase a 7% decrease in net sales and a $150 $32 million increase decrease in segment profit in 2024 2025 as compared to 2023 2024 primarily driven by favorable price and mix and higher lower sales volumes.
Read it in 10-K 2026-02-17 at sec.gov ↗
RewordedMD&A
Net interest expense of $41 million in 2025 increased slightly from $39 million in 2024 decreased from $52 million in 2023 primarily due to decreased increased borrowings on our revolving credit facility as a result of increased decreased cash flow.
Read it in 10-K 2026-02-17 at sec.gov ↗
RewordedMD&A
The Credit Agreement is and Term Credit Agreement (the “Credit Facilities”) are guaranteed by certain of our subsidiaries the Guarantor Subsidiaries (as defined below) and contains contain 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.
Read it in 10-K 2026-02-17 at sec.gov ↗
RewordedMD&A
The following table presents our Home Comfort Solutions segment’s net sales and profit for 2024 and 2023 (dollars in millions):For the Years Ended December 31, 2024 2023 Difference % Change Net sales $ 3,577.1 $3,222.9 $ 3,222.9 $354.2 11% Profit Segment profit $ 759.7 $610.2 $149.5 25% 760.5 $ 611.6 $148.9 24% % of net sales 21.2 21.3 % 18.9% 19.0 %
Read it in 10-K 2026-02-17 at sec.gov ↗
RewordedMD&A
Net Cash Provided By Operating Activities - Net cash provided by operating activities activities increased $210 decreased $188 million to $758 million in 2025 compared to $946 million in 2024 compared to $736 million in 2023. 2024.
Read it in 10-K 2026-02-17 at sec.gov ↗
