Lennox Reports 2026 Third Quarter Earnings Results
• GAAP Operating Income of $312 million – Total segment profit 1 of $323 million, down 2%
a leader in energy-efficient building and home comfort solutions, today reported third-quarter revenue of $1.6 billion, up 10%. GAAP operating income was $312 million, with an operating margin of 19.8%. Total segment profit¹ was $323 million, down 2%, and total segment margin declined 240 basis points to 20.6%. GAAP diluted earnings per share were $6.41, and adjusted diluted earnings per share were $6.84, down 7%.
“In the third-quarter, Building Climate Solutions continued to deliver strong revenue growth and residential end-markets began stabilizing. However, our margins and results fell short of our expectations, reflecting heightened competitive pressure and the impact of persistent inflation on our costs,” said Alok Maskara, Chief Executive Officer. “We are retooling our processes to more effectively pass through cost increases while accelerating productivity. Despite the near-term challenges, we remain confident in our strategy and the long-term resilience of our business model.”
Home Comfort Solutions revenue increased 3% in the third quarter, while segment margin declined 490 basis points. Targeted price adjustments in select market segments were implemented to defend and recapture share. Those actions, combined with inflation and tariff-related costs weighed on profitability. Looking ahead, priorities include mitigating share challenges, advancing productivity and tariff mitigation initiatives, and introducing new products in the entry-tier portfolio.
Building Climate Solutions revenue increased 24% in the third quarter, including organic growth of 15%, with continued strength across commercial HVAC, refrigeration, and services. Segment margin remained strong at 26.2%, despite a 110 basis point decline from record margins in the prior-year period. Growth was fueled by business development across the segment, and we still expect full year margins to expand despite inflation and tariff pressures.
Revenue: $1.6 billion, up 10%, driven by organic growth in Building Climate Solutions and contributions from completed acquisitions.
Operating Income: $312 million, down 5%, with an operating margin of 19.8%, down 320 basis points.
Total Segment Profit 1 : $323 million, down 2%, with total segment profit margin of 20.6%, down 240 basis points. Profitability was impacted by a $45 million headwind from product cost inflation, including tariffs, and lower factory absorption. Additional pressure came from $15 million of higher fuel costs, inflation across SG&A and distribution, and ongoing investments. These headwinds were partially offset by $13 million from higher sales volumes, $21 million of mix and price benefits, and $20 million contribution from completed acquisitions.
Net Income: $221 million, or $6.41 per share, compared to $260 million, or $7.38 per share, in the prior-year quarter.
Adjusted Net Income : $236 million, or $6.84 per share, compared to $260 million, or $7.38 per share, in the prior-year quarter.
Cash Flow: Operating cash flow was $395 million compared to $301 million in the prior-year quarter, driven by reduced inventory levels. Net capital expenditure was $33 million compared to $35 million in the prior-year quarter. Share repurchases totaled $151 million.
Home Comfort Solutions: Business segment revenue was $937 million, up 3%. Segment profit was $176 million, down 18%, and segment margin was 18.7%, down 490 basis points. Profits declined $40 million versus the prior-year quarter, primarily reflecting a $12 million profit headwind from lower sales volumes. Product cost inflation, including tariffs, and lower factory absorption resulted in a $32 million headwind. Profit was further impacted by $15 million of higher fuel costs, inflation across SG&A and distribution, and ongoing investments. These pressures were partially offset by $13 million of mix and price benefits and $6 million from completed acquisitions.
Building Climate Solutions: Business segment revenue was $635 million, up 24%. Segment profit was $167 million, up $26 million or 19%, and segment margin declined 110 basis points to 26.2%. The profit increase primarily reflected $24 million from higher sales volumes, $8 million of mix and price benefits, and $13 million from completed acquisitions. These benefits were partially offset by a $14 million headwind from product cost inflation, including tariffs, and lower factory absorption. Higher SG&A and distribution costs reduced profit by an additional $5 million.
Corporate and Other: Corporate expenses were $19 million, down $8 million from the prior-year quarter.
For full year 2026, we are revising the revenue growth guidance at approximately 6% growth, including 5% benefit from completed acquisitions.
Adjusted earnings per share guidance has been updated to a range of $21.00 to $21.50 compared to the prior range of $23.00 to $24.00.
A conference call to discuss the company’s 2026 third quarter results will be held this morning at 8:30 a.m. Central Time. To participate in the earnings conference, please call 800-347-6865 (U.S.) or +1 203-518-9757 (international) at least 10 minutes prior to the scheduled start time and use conference ID LIIQ326. The conference call also will be webcast live on the company’s investor relations website at investor.lennox.com. A replay of the conference call will be available until November 4, 2026, by calling toll-free 800-839-5490 (U.S.) or +1 402-220-2550 (international). The call will also be archived on the company's investor relations website at investor.lennox.com.
Lennox (NYSE: LII) is a leader in energy-efficient building solutions and is committed to creating healthier and more comfortable environments. Serving residential and commercial customers, the company delivers innovative heating, cooling, indoor air quality, refrigeration, and water heating systems. Through trusted products, parts, and services, and advanced technology, Lennox delivers connected solutions that support the full lifecycle of customer needs. Additional information on Lennox is available at Lennox.com or by contacting investor@lennox.com.
The statements in this document that are not historical statements, including statements regarding the 2026 full-year outlook and expected consolidated and segment financial results, as well as financial targets for future years, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on information currently available as well as management’s assumptions and beliefs today. These statements are subject to numerous risks and uncertainties that could cause actual results to differ materially from the results expressed or implied by the statements, and investors should not place undue reliance on them. Risks and uncertainties that could cause actual results to differ materially from such statements include risks that the North American HVAC and refrigeration markets perform worse than current assumptions. Additional risks include but are not limited to competition in the HVACR business; our ability to successfully develop and market new products or execute our business strategy; our ability to meet and anticipate customer demands; our ability to continue to license or enforce our intellectual property rights; our ability to attract, motivate, develop, and retain our employees, as well as labor relations problems; artificial intelligence technologies; a decline in new construction activity and related demand for our products and services; the impact of weather on our business; the impact of higher raw material prices and significant supply interruptions; product liability, warranty claims, or recalls; changes in environmental and climate-related legislation or government regulations or policies; changes in tax legislation; the impact of new or increased trade tariffs; improper conduct by any of our employees, agents, or business partners; litigation risks; general economic conditions in the United States and abroad; extraordinary events beyond our control; risks associated with our international operations; cyber-attacks and other disruptions or misuse of information systems; and our ability to successfully realize, complete and integrate acquisitions, including the acquisitions of Duro Dyne, Supco, and Heat Controller.
For information concerning these and other risks and uncertainties, see LII’s publicly available filings with the Securities and Exchange Commission. LII disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
A reconciliation of non-GAAP financial measures appearing in this document to financial measures prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP) are included in the Annex to this document.
This document includes forward-looking statements regarding segment profit, adjusted net income, adjusted diluted earnings per share, and free cash flow, which are non-GAAP financial measures. These non-GAAP financial measures are derived by excluding certain amounts from the corresponding financial measures determined in accordance with GAAP. The determination of the amounts excluded is a matter of management judgment and depends upon, among other factors, the nature of the underlying expense or income amounts recognized in a given period and the high variability of certain amounts, such as unusual gains and losses, the ultimate outcome of pending litigation, fluctuations in foreign currency exchange rates, changes in environmental liabilities, the impact and timing of potential acquisitions and divestitures, future restructuring costs, and other structural changes or
their probable significance. We are unable to present a quantitative reconciliation of the aforementioned forward-looking non-GAAP financial measures to their most directly comparable forward-looking GAAP financial measures because such information is not available, and management cannot reliably predict the necessary components of such GAAP measures without unreasonable effort or expense. The unavailable information could have a significant impact on LII’s full year GAAP financial results.
Note: The 2025 amounts are adjusted to reflect the accounting method change from LIFO to FIFO that occurred in the fourth quarter of 2025.
LENNOX INTERNATIONAL INC. AND SUBSIDIARIES Segment Net Sales and Profit (Unaudited)
(1) We define segment profit as a segment's operating income (loss) included in the accompanying Consolidated Statements of Operations, excluding:
(2) Recorded in Losses (gains) and other expenses, net in the accompanying Consolidated Statement of Operations.
(3) Corporate and other expenses include unallocated corporate costs related to corporate administrative functions such as tax, treasury, accounting, internal audit, legal and human resources.
Note: The 2025 amounts are adjusted to reflect the accounting method change from LIFO to FIFO that occurred in the fourth quarter of 2025.
(Amounts in millions, except shares and As of September As of December par values) 30, 2026 31, 2025 ────────────────────────────────────────────────────────────────────────────── -Unaudited ASSETS Current Assets: Cash and cash $ 43.3 $ 34.2 equivalents Short-term 2.2 0.5 investments Accounts and notes receivable, net of allowances of $8.0 881.3 578.8 and $8.5 in 2026 and 2025, respectively Inventories, net 1,176.8 1,152.6 Other current 121.9 137.7 assets Total current 2,225.5 1,903.8 assets Restricted cash 22.4 18.5 equivalents Property, plant and equipment, net of accumulated depreciation of 937.0 887.2 $1,106.1 and $1,043.9 in 2026 and 2025, respectively Right-of-use assets from operating 429.5 356.3 leases Goodwill 590.3 497.2 Intangible assets, net of accumulated amortization of $52.0 and $38.3 in 336.5 273.0 2026 and 2025, respectively Deferred income 12.3 12.9 taxes Other assets, net 135.8 132.9 Total assets $ 4,689.3 $ 4,081.8 LIABILITIES AND STOCKHOLDERS’ EQUITY Current Liabilities: Accounts payable $ 550.6 $ 438.0 Accrued expenses 418.4 374.2 Income taxes 5.6 46.4 payable Commercial paper 455.1 226.0 Current maturities 319.2 18.3 of long-term debt Current operating 87.3 88.9 lease liabilities Total current 1,836.2 1,191.8 liabilities Long-term debt 847.1 1,144.1 Long-term operating 375.9 293.4 lease liabilities Pensions 20.8 18.7 Other liabilities 292.4 270.7 Total liabilities 3,372.4 2,918.7 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 0.9 0.9 authorized, 87,170,197 shares issued Additional paid-in 1,262.3 1,243.0 capital Retained earnings 5,361.9 4,891.1 Accumulated other -71.4 -48.5 comprehensive loss Treasury stock, at cost, 52,962,480 shares and 52,374,147 shares -5,236.8 -4,923.4 for 2026 and 2025, respectively Total stockholders' 1,316.9 1,163.1 equity Total liabilities and stockholders' $ 4,689.3 $ 4,081.8 equity
(Amounts in millions) For the Nine Months Cash flows from Ended September 30, operating activities: 2026 2025 ────────────────────────────────────────────────────────────────────────────── Net income $ 607.4 $ 663.4 Adjustments to reconcile net income to net cash provided by operating activities: Gain on sale from -3.8 — previous dispositions Income from equity -2.0 -5.8 method investments Dividends from 4.9 6.1 affiliates Restructuring charges, 7.3 — net of cash paid Provision for credit 3.7 -1.8 losses (gains) Unrealized losses, net on derivative 4.4 2.3 contracts Stock-based 15.4 21.2 compensation expense Depreciation and 96.4 79.4 amortization Deferred income taxes 9.1 28.5 Pension expense 2.9 3.2 Pension contributions -0.7 -6.1 Changes in assets and liabilities, net of effects of acquisitions and divestitures:
Accounts and notes -289.2 -94.7 receivable Inventories 26.2 -310.2 Other current assets 4.3 -7.0 Accounts payable 94.0 -16.7 Accrued expenses 27.4 -37.3 Income taxes payable -40.7 27.7 and receivable, net Leases, net 7.7 5.2 Other, net 8.7 -5.7 Net cash provided by operating 583.4 351.7 activities Cash flows from investing activities: Proceeds from the disposal of property, 2.0 1.1 plant and equipment Purchases of property, plant and -124.4 -89.6 equipment Acquisitions, net of -209.9 — cash (Purchases of) proceeds from -1.8 0.9 investments and other Net cash used in -334.1 -87.6 investing activities Cash flows from financing activities: Commercial paper 1,311.0 677.1 borrowings Commercial paper -1,081.9 -520.1 payments Payments on debt -17.6 -14.2 arrangements Payment of senior — -300.0 unsecured notes Borrowings from credit 280.0 — facility Payments on credit -280.0 — facility Payments of deferred — -1.7 financing costs Proceeds from employee 5.8 4.0 stock purchases Repurchases of common -301.9 -331.8 stock Repurchases of common stock to satisfy -11.5 -13.3 employee withholding tax obligations Cash dividends paid -137.5 -127.4 Net cash used in -233.6 -627.4 financing activities Increase (decrease) in cash, cash 15.7 -363.3 equivalents and restricted cash Effect of exchange rates on cash, cash equivalents and -2.7 1.1 restricted cash equivalents Cash, cash equivalents and restricted 52.7 415.1 cash, beginning of period Cash, cash equivalents and restricted $ 65.7 $ 52.9 cash, end of period Supplemental disclosures of cash flow information: Interest paid $ 57.4 $ 39.7 Income taxes paid (net $ 198.2 $ 91.5 of refunds)
Note: The 2025 amounts are adjusted to reflect the accounting method change from LIFO to FIFO that occurred in the fourth quarter of 2025.
Full text with the tables
Exhibit 99.1
Lennox Reports 2026 Third Quarter Earnings Results
____________________________________________________________________________
Highlights
(All comparisons are year-over-year, unless otherwise noted)
• Revenue of $1.6 billion, up 10%
• GAAP Operating Income of $312 million – Total segment profit 1 of $323
million, down 2%
• GAAP diluted EPS of $6.41 – Adjusted diluted EPS of $6.84, down 7%
• Updated full year adjusted EPS guidance of $21.00 to $21.50
________________________________________________________________________________
__
DALLAS, October 28, 2026 – Lennox (NYSE: LII),
a leader in energy-efficient building and home comfort solutions, today reported
third-quarter revenue of $1.6 billion, up 10%. GAAP operating income was $312
million, with an operating margin of 19.8%. Total segment profit¹ was $323
million, down 2%, and total segment margin declined 240 basis points to 20.6%.
GAAP diluted earnings per share were $6.41, and adjusted diluted earnings per
share were $6.84, down 7%.
“In the third-quarter, Building Climate Solutions continued to deliver strong
revenue growth and residential end-markets began stabilizing. However, our
margins and results fell short of our expectations, reflecting heightened
competitive pressure and the impact of persistent inflation on our costs,” said
Alok Maskara, Chief Executive Officer. “We are retooling our processes to more
effectively pass through cost increases while accelerating productivity. Despite
the near-term challenges, we remain confident in our strategy and the long-term
resilience of our business model.”
Home Comfort Solutions revenue increased 3% in the third quarter, while segment
margin declined 490 basis points. Targeted price adjustments in select market
segments were implemented to defend and recapture share. Those actions, combined
with inflation and tariff-related costs weighed on profitability. Looking ahead,
priorities include mitigating share challenges, advancing productivity and
tariff mitigation initiatives, and introducing new products in the entry-tier
portfolio.
Building Climate Solutions revenue increased 24% in the third quarter, including
organic growth of 15%, with continued strength across commercial HVAC,
refrigeration, and services. Segment margin remained strong at 26.2%, despite a
110 basis point decline from record margins in the prior-year period. Growth was
fueled by business development across the segment, and we still expect full year
margins to expand despite inflation and tariff pressures.
1 Includes unallocated corporate expenses
THIRD QUARTER 2026 FINANCIAL HIGHLIGHTS
(All comparisons are year-over-year, unless otherwise noted)
Revenue: $1.6 billion, up 10%, driven by organic growth in Building Climate
Solutions and contributions from completed acquisitions.
Operating Income: $312 million, down 5%, with an operating margin of 19.8%, down
320 basis points.
Total Segment Profit 1 : $323 million, down 2%, with total segment profit margin
of 20.6%, down 240 basis points. Profitability was impacted by a $45 million
headwind from product cost inflation, including tariffs, and lower factory
absorption. Additional pressure came from $15 million of higher fuel costs,
inflation across SG&A and distribution, and ongoing investments. These headwinds
were partially offset by $13 million from higher sales volumes, $21 million of
mix and price benefits, and $20 million contribution from completed
acquisitions.
Net Income: $221 million, or $6.41 per share, compared to $260 million, or $7.38
per share, in the prior-year quarter.
Adjusted Net Income : $236 million, or $6.84 per share, compared to $260
million, or $7.38 per share, in the prior-year quarter.
Cash Flow: Operating cash flow was $395 million compared to $301 million in the
prior-year quarter, driven by reduced inventory levels. Net capital expenditure
was $33 million compared to $35 million in the prior-year quarter. Share
repurchases totaled $151 million.
Home Comfort Solutions: Business segment revenue was $937 million, up 3%.
Segment profit was $176 million, down 18%, and segment margin was 18.7%, down
490 basis points. Profits declined $40 million versus the prior-year quarter,
primarily reflecting a $12 million profit headwind from lower sales volumes.
Product cost inflation, including tariffs, and lower factory absorption resulted
in a $32 million headwind. Profit was further impacted by $15 million of higher
fuel costs, inflation across SG&A and distribution, and ongoing investments.
These pressures were partially offset by $13 million of mix and price benefits
and $6 million from completed acquisitions.
Building Climate Solutions: Business segment revenue was $635 million, up 24%.
Segment profit was $167 million, up $26 million or 19%, and segment margin
declined 110 basis points to 26.2%. The profit increase primarily reflected $24
million from higher sales volumes, $8 million of mix and price benefits, and $13
million from completed acquisitions. These benefits were partially offset by a
$14 million headwind from product cost inflation, including tariffs, and lower
factory absorption. Higher SG&A and distribution costs reduced profit by an
additional $5 million.
Corporate and Other: Corporate expenses were $19 million, down $8 million from
the prior-year quarter.
1 Includes unallocated corporate expenses
FULL YEAR 2026 GUIDANCE
For full year 2026, we are revising the revenue growth guidance at approximately
6% growth, including 5% benefit from completed acquisitions.
Adjusted earnings per share guidance has been updated to a range of $21.00 to
$21.50 compared to the prior range of $23.00 to $24.00.
Free cash flow guidance updated to $700 million to $750 million.
CONFERENCE CALL INFORMATION
A conference call to discuss the company’s 2026 third quarter results will be
held this morning at 8:30 a.m. Central Time. To participate in the earnings
conference, please call 800-347-6865 (U.S.) or +1 203-518-9757 (international)
at least 10 minutes prior to the scheduled start time and use conference ID
LIIQ326. The conference call also will be webcast live on the company’s investor
relations website at investor.lennox.com. A replay of the conference call will
be available until November 4, 2026, by calling toll-free 800-839-5490 (U.S.) or
+1 402-220-2550 (international). The call will also be archived on the company's
investor relations website at investor.lennox.com.
ABOUT LENNOX
Lennox (NYSE: LII) is a leader in energy-efficient building solutions and is
committed to creating healthier and more comfortable environments. Serving
residential and commercial customers, the company delivers innovative heating,
cooling, indoor air quality, refrigeration, and water heating systems. Through
trusted products, parts, and services, and advanced technology, Lennox delivers
connected solutions that support the full lifecycle of customer needs.
Additional information on Lennox is available at Lennox.com or by contacting
investor@lennox.com.
FORWARD-LOOKING STATEMENTS & NON-GAAP FINANCIAL MEASURES
The statements in this document that are not historical statements, including
statements regarding the 2026 full-year outlook and expected consolidated and
segment financial results, as well as financial targets for future years, are
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements are based on
information currently available as well as management’s assumptions and beliefs
today. These statements are subject to numerous risks and uncertainties that
could cause actual results to differ materially from the results expressed or
implied by the statements, and investors should not place undue reliance on
them. Risks and uncertainties that could cause actual results to differ
materially from such statements include risks that the North American HVAC and
refrigeration markets perform worse than current assumptions. Additional risks
include but are not limited to competition in the HVACR business; our ability to
successfully develop and market new products or execute our business strategy;
our ability to meet and anticipate customer demands; our ability to continue to
license or enforce our intellectual property rights; our ability to attract,
motivate, develop, and retain our employees, as well as labor relations
problems; artificial intelligence technologies; a decline in new construction
activity and related demand for our products and services; the impact of weather
on our business; the impact of higher raw material prices and significant supply
interruptions; product liability, warranty claims, or recalls; changes in
environmental and climate-related legislation or government regulations or
policies; changes in tax legislation; the impact of new or increased trade
tariffs; improper conduct by any of our employees, agents, or business partners;
litigation risks; general economic conditions in the United States and abroad;
extraordinary events beyond our control; risks associated with our international
operations; cyber-attacks and other disruptions or misuse of information
systems; and our ability to successfully realize, complete and integrate
acquisitions, including the acquisitions of Duro Dyne, Supco, and Heat
Controller.
For information concerning these and other risks and uncertainties, see LII’s
publicly available filings with the Securities and Exchange Commission. LII
disclaims any intention or obligation to update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise,
except as required by law.
A reconciliation of non-GAAP financial measures appearing in this document to
financial measures prepared in accordance with U.S. Generally Accepted
Accounting Principles (GAAP) are included in the Annex to this document.
This document includes forward-looking statements regarding segment profit,
adjusted net income, adjusted diluted earnings per share, and free cash flow,
which are non-GAAP financial measures. These non-GAAP financial measures are
derived by excluding certain amounts from the corresponding financial measures
determined in accordance with GAAP. The determination of the amounts excluded is
a matter of management judgment and depends upon, among other factors, the
nature of the underlying expense or income amounts recognized in a given period
and the high variability of certain amounts, such as unusual gains and losses,
the ultimate outcome of pending litigation, fluctuations in foreign currency
exchange rates, changes in environmental liabilities, the impact and timing of
potential acquisitions and divestitures, future restructuring costs, and other
structural changes or
their probable significance. We are unable to present a quantitative
reconciliation of the aforementioned forward-looking non-GAAP financial measures
to their most directly comparable forward-looking GAAP financial measures
because such information is not available, and management cannot reliably
predict the necessary components of such GAAP measures without unreasonable
effort or expense. The unavailable information could have a significant impact
on LII’s full year GAAP financial results.
LENNOX INTERNATIONAL INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(Unaudited)
(Amou… For
in the For the
milli… Three Nine
except Months Months
per Ended Ended
share Septe… Septem…
data) 2026 30, 2025 2026 30, 2025
──────────────────────────────────────────────────────────────────────────────
Net $ 1,572… $ 1,426… $ 4,252.9 $ 4,000…
sales
Cost
of 1,075… 939.6 2,864.9 2,654…
goods
sold
Gross 497.2 487.2 1,388.0 1,345…
prof…
Oper…
Expe…
Sell…
gene…
and 177.3 161.6 545.6 506.2
admi…
expe…
Loss…
(gai…
and 4.8 -0.7 9.4 -0.6
other
expe…
net
Rest… 8.2 — 8.2 —
char…
Gain
on
sale -3.8 — -3.8 —
from
prev…
disp…
Inco…
from
equi… -1.4 -2.5 -2.0 -5.8
meth…
inve…
Oper… 312.1 328.8 830.6 845.8
inco…
Pens… — 0.1 0.6 0.3
sett…
Inte…
expe… 17.5 10.5 47.4 25.0
net
Other
expe… 1.3 0.8 2.8 2.3
net
Net
inco…
befo… 293.3 317.4 779.8 818.2
inco…
taxes
Prov…
for 72.1 57.5 172.4 154.8
inco…
taxes
Net $ 221.2 $ 259.9 $ 607.4 $ 663.4
inco…
Earn…
per
share $ 6.43 $ 7.41 $ 17.54 $ 18.78
–
Basi…
Earn…
per
share $ 6.41 $ 7.38 $ 17.47 $ 18.70
–
Dilu…
Weig…
Aver…
Numb…
of 34.4 35.1 34.6 35.3
Shar…
Outs…
-
Basic
Weig…
Aver…
Numb…
of 34.5 35.2 34.8 35.5
Shar…
Outs…
-
Dilu…
(1) Amounts may not recalculate due to rounding.
Note: The 2025 amounts are adjusted to reflect the accounting method change from
LIFO to FIFO that occurred in the fourth quarter of 2025.
LENNOX INTERNATIONAL INC. AND SUBSIDIARIES
Segment Net Sales and Profit
(Unaudited)
For
For the the
Three Nine
(Amo… Months Months
in Ended Ended
mill… Septem… Septe…
Net 30, 30,
Sales 2026 2025 2026 2025
──────────────────────────────────────────────────────────────────────────────
Home
Comf… $ 937.2 $ 912.9 $ 2,522.8 $ 2,643…
Solu…
Buil…
Clim… 635.3 513.9 1,730.1 1,356…
Solu…
Total
net $ 1,572… $ 1,426.8 $ 4,252.9 $ 4,000…
sales
Segm…
Prof…
Home
Comf… $ 175.7 $ 215.3 $ 484.0 $ 591.2
Solu…
Buil…
Clim… 166.5 140.3 417.4 319.7
Solu…
Total
segm… 342.2 355.6 901.4 910.9
prof…
Corp…
and -18.9 -26.8 -59.6 -65.1
other
expe…
Total
segm…
prof…
incl…
unal… 323.3 328.8 841.8 845.8
Corp…
and
other
expe…
Reco…
to
Oper…
inco…
Rest… 8.2 — 8.2 —
char…
Gain
on
sale -3.8 — -3.8 —
from
prev…
disp…
Spec…
liti… 3.0 — 3.0 —
char…
Acqu… 3.8 — 3.8 —
cost…
Oper… $ 312.1 $ 328.8 $ 830.6 $ 845.8
inco…
(1) We define segment profit as a segment's operating income (loss) included in
the accompanying Consolidated Statements of Operations, excluding:
• Restructuring charges,
• Gain on sale of previous dispositions,
• Special litigation charges, and;
• Acquisition costs
(2) Recorded in Losses (gains) and other expenses, net in the accompanying
Consolidated Statement of Operations.
(3) Corporate and other expenses include unallocated corporate costs related to
corporate administrative functions such as tax, treasury, accounting, internal
audit, legal and human resources.
Note: The 2025 amounts are adjusted to reflect the accounting method change from
LIFO to FIFO that occurred in the fourth quarter of 2025.
LENNOX INTERNATIONAL INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(Amounts in
millions, except
shares and As of September As of December
par values) 30, 2026 31, 2025
──────────────────────────────────────────────────────────────────────────────
-Unaudited
ASSETS
Current Assets:
Cash and cash $ 43.3 $ 34.2
equivalents
Short-term 2.2 0.5
investments
Accounts and notes
receivable, net of
allowances of $8.0 881.3 578.8
and $8.5 in 2026
and
2025, respectively
Inventories, net 1,176.8 1,152.6
Other current 121.9 137.7
assets
Total current 2,225.5 1,903.8
assets
Restricted cash 22.4 18.5
equivalents
Property, plant and
equipment, net of
accumulated
depreciation of 937.0 887.2
$1,106.1 and
$1,043.9 in 2026
and 2025,
respectively
Right-of-use assets
from operating 429.5 356.3
leases
Goodwill 590.3 497.2
Intangible assets,
net of accumulated
amortization of
$52.0 and $38.3 in 336.5 273.0
2026
and 2025,
respectively
Deferred income 12.3 12.9
taxes
Other assets, net 135.8 132.9
Total assets $ 4,689.3 $ 4,081.8
LIABILITIES AND
STOCKHOLDERS’
EQUITY
Current
Liabilities:
Accounts payable $ 550.6 $ 438.0
Accrued expenses 418.4 374.2
Income taxes 5.6 46.4
payable
Commercial paper 455.1 226.0
Current maturities 319.2 18.3
of long-term debt
Current operating 87.3 88.9
lease liabilities
Total current 1,836.2 1,191.8
liabilities
Long-term debt 847.1 1,144.1
Long-term operating 375.9 293.4
lease liabilities
Pensions 20.8 18.7
Other liabilities 292.4 270.7
Total liabilities 3,372.4 2,918.7
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 0.9 0.9
authorized,
87,170,197 shares
issued
Additional paid-in 1,262.3 1,243.0
capital
Retained earnings 5,361.9 4,891.1
Accumulated other -71.4 -48.5
comprehensive loss
Treasury stock, at
cost, 52,962,480
shares and
52,374,147 shares -5,236.8 -4,923.4
for 2026
and 2025,
respectively
Total stockholders' 1,316.9 1,163.1
equity
Total liabilities
and stockholders' $ 4,689.3 $ 4,081.8
equity
LENNOX INTERNATIONAL INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Unaudited)
(Amounts in millions) For the Nine Months
Cash flows from Ended September 30,
operating activities: 2026 2025
──────────────────────────────────────────────────────────────────────────────
Net income $ 607.4 $ 663.4
Adjustments to
reconcile net income
to
net cash provided by
operating
activities:
Gain on sale from -3.8 —
previous dispositions
Income from equity -2.0 -5.8
method investments
Dividends from 4.9 6.1
affiliates
Restructuring charges, 7.3 —
net of cash paid
Provision for credit 3.7 -1.8
losses (gains)
Unrealized losses, net
on derivative 4.4 2.3
contracts
Stock-based 15.4 21.2
compensation expense
Depreciation and 96.4 79.4
amortization
Deferred income taxes 9.1 28.5
Pension expense 2.9 3.2
Pension contributions -0.7 -6.1
Changes in assets and
liabilities, net
of effects of
acquisitions and
divestitures:
Accounts and notes -289.2 -94.7
receivable
Inventories 26.2 -310.2
Other current assets 4.3 -7.0
Accounts payable 94.0 -16.7
Accrued expenses 27.4 -37.3
Income taxes payable -40.7 27.7
and receivable, net
Leases, net 7.7 5.2
Other, net 8.7 -5.7
Net cash provided by
operating 583.4 351.7
activities
Cash flows from
investing activities:
Proceeds from the
disposal of property, 2.0 1.1
plant and equipment
Purchases of property,
plant and -124.4 -89.6
equipment
Acquisitions, net of -209.9 —
cash
(Purchases of)
proceeds from -1.8 0.9
investments
and other
Net cash used in -334.1 -87.6
investing activities
Cash flows from
financing activities:
Commercial paper 1,311.0 677.1
borrowings
Commercial paper -1,081.9 -520.1
payments
Payments on debt -17.6 -14.2
arrangements
Payment of senior — -300.0
unsecured notes
Borrowings from credit 280.0 —
facility
Payments on credit -280.0 —
facility
Payments of deferred — -1.7
financing costs
Proceeds from employee 5.8 4.0
stock purchases
Repurchases of common -301.9 -331.8
stock
Repurchases of common
stock to satisfy -11.5 -13.3
employee withholding
tax obligations
Cash dividends paid -137.5 -127.4
Net cash used in -233.6 -627.4
financing activities
Increase (decrease) in
cash, cash 15.7 -363.3
equivalents and
restricted cash
Effect of exchange
rates on cash, cash
equivalents and -2.7 1.1
restricted cash
equivalents
Cash, cash equivalents
and restricted 52.7 415.1
cash, beginning of
period
Cash, cash equivalents
and restricted $ 65.7 $ 52.9
cash, end of period
Supplemental
disclosures of cash
flow
information:
Interest paid $ 57.4 $ 39.7
Income taxes paid (net $ 198.2 $ 91.5
of refunds)
Note: The 2025 amounts are adjusted to reflect the accounting method change from
LIFO to FIFO that occurred in the fourth quarter of 2025.
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Reconci…
of Net
Cash
Provided
by
Operati…
Activit…
a GAAP
measure,
to For the For the
Free Three Nine
Cash Months Months
Flow, a Ended Ended
Non-GAAP September September
measure 2026 30, 2025 2026 30, 2025
──────────────────────────────────────────────────────────────────────────────
Net cash
provided
by $ 395.3 $ 300.7 $ 583.4 $ 351.7
operati…
activit…
Purchas…
of
propert… -33.2 -35.6 -124.4 -89.6
plant
and
equipme…
Proceeds
from the
disposal
of 0.6 0.2 2.0 1.1
propert…
plant
and
equipme…
Free
cash
flow, a $ 362.7 $ 265.3 $ 461.0 $ 263.2
Non-GAAP
measure