LENNOX INTERNATIONAL INC. DALLAS, July 24, 2017 /PRNewswire/ -- Lennox International Inc. (NYSE: LII) today reported financial results for the second quarter of 2017. All comparisons are to the prior-year period.
For the second quarter, revenue was up 8% to a record $1.102 billion. Foreign exchange was neutral to revenue. GAAP operating income was a record $175 million, up 9%. GAAP earnings per share from continuing operations was a record $2.71, up 8%. On an adjusted basis, total segment profit increased 14% to a record $183 million, and total segment margin expanded 80 basis points to a record 16.6%. Adjusted EPS from continuing operations rose 12% to a record $2.83.
"Lennox International posted strong revenue and profit growth in a record quarter for the company," said Chairman and CEO Todd Bluedorn. "The company hit new all-time highs for revenue, total segment margin and profit, and earnings per share.
"In our Residential business, revenue was up 14% on strength in both replacement and new construction business. Segment margin expanded 130 basis points to 21.5%, and segment profit rose 21%. Our Residential business set new all-time highs for revenue, segment margin and profit. In our Commercial business, we have seen lumpy customer demand and mix in the first half of the year. After a record first quarter with strong growth in revenue, margin, and profit, Commercial revenue was up 3% at constant currency in the second quarter, with segment margin of 17.3% down 140 basis points and segment profit down 6% from the record second quarter a year ago. Looking ahead at the second half of the year, we expect Commercial revenue, margin and profit to be up from the prior-year period. In Refrigeration, second-quarter revenue was down 1%, driven by a decline in Europe. Revenue was up in North America, South America, Australia, and Asia. Refrigeration margin expanded 30 basis points to 11.4%, and segment profit rose 1%.
"Looking ahead for the company overall, we continue to expect strong growth for a year of record revenue and profit, led by the strength in our Residential business. Given the company's first-half performance and outlook for the second half, we are raising the low end of our 2017 guidance for revenue and adjusted EPS from continuing operations, and we plan $75 million more of stock repurchases in the second half of the year."
FINANCIAL HIGHLIGHTS
Revenue: Revenue for the second quarter was $1.102 billion, up 8%. Foreign exchange was neutral to revenue. Volume was up, and price/mix was flat on a revenue basis.
Gross Profit: Gross profit in the second quarter was $341 million, up 8%. Gross margin was flat at 30.9%. Gross profit was positively impacted by higher volume, favorable price/mix, and sourcing and engineering-led cost reductions, with offsets from higher commodity costs, investments in distribution expansion, and foreign exchange.
Income from Continuing Operations: On a GAAP basis, income from continuing operations for the second quarter was $116.4 million, or $2.71 per share, compared to $111.2 million, or $2.52 per share, in the prior-year quarter.
Adjusted income from continuing operations in the second quarter was $121.0 million, or $2.83 per share, compared to $111.5 million, or $2.53 per share, in the prior-year quarter. Adjusted earnings from continuing operations for the second quarter of 2017 excludes net after-tax charges of $4.6 million: $3.4 million for special product quality adjustments, $1.0 million of special legal contingency charges, a total of $0.9 million for other items, and a benefit of $0.7 million for excess tax benefits from share-based compensation.
Free Cash Flow and Total Debt: Net cash from operations in the second quarter was $59 million compared to $76 million in the prior-year quarter. Capital expenditures were $18 million in the second quarter of 2017, flat with the second quarter of 2016. Free cash flow was $41 million compared to $58 million in the prior-year quarter. Total debt at the end of the second quarter was $1.189 billion. Total cash and cash equivalents were $61 million at the end of June. In the second quarter, the company paid $18 million in dividends and $100 million for stock repurchases.
BUSINESS SEGMENT HIGHLIGHTS
Residential Heating & Cooling
Revenue in the Residential Heating & Cooling business segment rose 14% to a record $654 million. Foreign exchange was neutral on a revenue basis. Segment profit was up 21% to a record $141 million. Segment profit margin expanded 130 basis points to a record 21.5%. Results were impacted by higher volume, favorable price/mix, sourcing and engineering-led cost reductions, and favorable warranty and other product costs. Partial offsets included investments in research and development, information technology, and other SG&A, investments in distribution expansion, higher commodity costs, and unfavorable foreign exchange.
Commercial Heating & Cooling
Revenue in the Commercial Heating & Cooling business segment was a record $259 million, up 2%. At constant currency, revenue was up 3%. Segment margin was down 140 basis points to 17.3%, and segment profit declined 6% to $45 million. Results were impacted by unfavorable mix, higher commodity costs, investments in research and development, information technology, and other SG&A. Partial offsets included higher volume, sourcing and engineering-led cost reductions, and favorable price.
Refrigeration
Revenue in the Refrigeration business segment was $190 million, down 1%. Foreign exchange was neutral on a revenue basis. Segment margin expanded 30 basis points to 11.4%, and segment profit rose 1% to $22 million. Results were impacted by favorable price/mix and sourcing and engineering-led cost reductions, with partial offsets from factory productivity, investments in research and development, information technology, and other SG&A.
FULL-YEAR OUTLOOK
For 2017, the company is raising the low end of guidance for revenue and adjusted EPS from continuing operations.
-- Raising 2017 guidance for revenue growth from 3-7% to 4-7%; a minimal
impact from foreign exchange is still expected.
-- Narrowing guidance for GAAP EPS from continuing operations from
$7.65-$8.25 to $7.73-$8.13.
-- Raising the low end of adjusted EPS from continuing operations guidance
from $7.55-$8.15 to $7.75-$8.15.
-- Reiterating corporate expenses of approximately $85 million.
-- Updating guidance for the 2017 effective tax rate from approximately 32%
to a range of 31-32% on an adjusted basis for the full year.
-- Reiterating capital expenditures of approximately $100 million.
-- Reiterating guidance for a weighted average diluted share count of 42-43
million shares on a full-year basis, including plans for $250 million of
stock repurchases in total for 2017.
CONFERENCE CALL INFORMATION
A conference call to discuss the company's second quarter results will be held this morning at 8:30 a.m. Central time. To listen, call the conference call line at 612-332-1210 at least 10 minutes prior to the scheduled start time and use reservation number 426825. The conference call also will be webcast on Lennox International's web site at www.lennoxinternational.com. A replay will be available from 11:00 a.m. Central time on July 24 through August 7, 2017 by dialing 800-475-6701 (U.S.) or 320-365-3844 (international) and using access code 426825. The call also will be archived on the company's website.
About Lennox International
Lennox International Inc. is a global leader in the heating, air conditioning, and refrigeration markets. Lennox International is listed on the New York Stock Exchange and traded under the symbol "LII". Additional information is available at: www.lennoxinternational.com or by contacting Steve Harrison, Vice President, Investor Relations, at 972-497-6670.
Forward-Looking Statements
The statements in this news release that are not historical statements, including statements regarding the 2017 full-year outlook, expected consolidated and segment financial results for 2017, and expected share repurchases, 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, but are not limited to: the impact of higher raw material prices, LII's ability to implement price increases for its products and services, economic conditions in our markets, regulatory changes, the impact of unfavorable weather, and a decline in new construction activity and related demand for products and services. 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.
LENNOX INTERNATIONAL INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(Unaudited)
(Amounts in millions,
except per share data) For the Three Months Ended For the Six Months Ended
June 30, June 30,
2017 2016 2017 2016
---- ---- ---- ----
Net sales $1,102.1 $1,019.2 $1,895.6 $1,734.4
Cost of goods sold 761.3 704.2 1,343.8 1,235.8
----- ----- ------- -------
Gross profit 340.8 315.0 551.8 498.6
Operating Expenses:
Selling, general and
administrative
expenses 168.5 159.4 320.9 299.7
Losses and other
expenses, net 2.3 0.4 5.4 4.7
Restructuring charges 0.1 0.8 0.2 0.6
Income from equity
method investments (5.5) (6.3) (10.9) (10.8)
---- ---- ----- -----
Operating income 175.4 160.7 236.2 204.4
Interest expense, net 8.2 6.8 15.7 12.7
Other income, net (0.1) (0.2) (0.1) (0.3)
Income from continuing
operations before
income taxes 167.3 154.1 220.6 192.0
Provision for income
taxes 50.9 42.9 60.7 55.9
---- ---- ---- ----
Income from continuing
operations 116.4 111.2 159.9 136.1
Discontinued Operations:
Loss from discontinued
operations before
income taxes (1.5) (0.8) (1.5) (0.8)
Benefit from income
taxes (0.6) (0.3) (0.6) (0.3)
---- ---- ---- ----
Loss from discontinued
operations (0.9) (0.5) (0.9) (0.5)
---- ---- ---- ----
Net income $115.5 $110.7 $159.0 $135.6
====== ====== ====== ======
Earnings per share - Basic:
Income from continuing
operations $2.75 $2.55 $3.76 $3.11
Loss from discontinued
operations (0.02) (0.01) (0.02) (0.01)
----- ----- ----- -----
Net income $2.73 $2.54 $3.74 $3.10
===== ===== ===== =====
Earnings per share - Diluted:
Income from continuing
operations $2.71 $2.52 $3.70 $3.07
Loss from discontinued
operations (0.02) (0.01) (0.02) (0.01)
----- ----- ----- -----
Net income $2.69 $2.51 $3.68 $3.06
===== ===== ===== =====
Weighted Average Number
of Shares Outstanding
-Basic 42.3 43.6 42.6 43.8
Weighted Average Number
of Shares Outstanding
-Diluted 42.9 44.1 43.2 44.4
Cash dividends declared
per share $0.51 $0.43 $0.94 $0.79
LENNOX INTERNATIONAL INC. AND SUBSIDIARIES
Segment Net Sales and Profit (Loss)
(Unaudited)
(Amounts in millions) For the Three Months Ended For the Six Months Ended
June 30, June 30,
2017 2016 2017 2016
---- ---- ---- ----
Net sales
Residential Heating &
Cooling $653.5 $574.5 $1,073.3 $951.8
Commercial Heating &
Cooling 258.6 252.9 454.1 423.3
Refrigeration 190.0 191.8 368.2 359.3
----- ----- -----
$1,102.1 $1,019.2 $1,895.6 $1,734.4
======== ======== ======== ========
Segment Profit (Loss)
(1)
Residential Heating &
Cooling $140.5 $115.9 $182.9 $154.1
Commercial Heating &
Cooling 44.7 47.4 63.8 61.7
Refrigeration 21.6 21.3 35.7 30.3
Corporate and other (23.9) (23.5) (34.8) (38.4)
----- ----- ----- -----
Total segment profit 182.9 161.1 247.6 207.7
Reconciliation to
Operating income:
Special product
quality adjustments 5.2 - 5.2 (0.4)
Items in Losses and
other expenses, net
that are excluded
from 2.2 (0.4) 6.0 3.1
segment profit (loss)
(1)
Restructuring charges 0.1 0.8 0.2 0.6
Operating income $175.4 $160.7 $236.2 $204.4
====== ====== ====== ======
(1) We define segment profit and loss as a
segment's operating income included in the
accompanying Consolidated Statements of
Operations, excluding:
-- Special product
quality
adjustments;
-- The following
items in Losses
and other
expenses, net:
° Net change in unrealized losses
(gains) on unsettled futures
contracts,
° Special legal contingency
charges,
° Asbestos-related litigation,
° Contractor tax payments,
° Environmental liabilities,
° Acquisition costs,
° Other items, net; and,
-- Restructuring
charges.
LENNOX INTERNATIONAL INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(Amounts in millions,
except shares and par
values) As of June 30, As of December 31,
2017 2016
---- ----
(unaudited)
ASSETS
Current Assets:
Cash and cash equivalents $61.3 $50.2
Accounts and notes
receivable, net of
allowances of $6.9 and
$6.7 in 2017 and 2016,
respectively 689.9 469.8
Inventories, net 538.8 418.5
Other assets 76.7 67.4
---- ----
Total current assets 1,366.7 1,005.9
Property, plant and
equipment, net of
accumulated depreciation
of $750.3 and $717.2 in
2017 and 2016,
respectively 371.7 361.4
Goodwill 199.0 195.1
Deferred income taxes 141.3 136.7
Other assets, net 67.1 61.2
---- ----
Total assets $2,145.8 $1,760.3
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Short-term debt $251.3 $52.4
Current maturities of long-
term debt 15.0 200.1
Accounts payable 442.5 361.2
Accrued expenses 257.2 265.9
Income taxes payable 23.5 9.0
---- ---
Total current liabilities 989.5 888.6
Long-term debt 922.6 615.7
Post-retirement benefits,
other than pensions 2.1 2.8
Pensions 89.5 87.5
Other liabilities 131.5 127.7
----- -----
Total liabilities 2,135.2 1,722.3
Commitments and contingencies
Stockholders' equity:
Preferred stock, $.01 par
value, 25,000,000 shares
authorized, no shares
issued or outstanding - -
Common stock, $.01 par
value, 200,000,000 shares
authorized, 87,170,197
shares issued 0.9 0.9
Additional paid-in capital 1,038.1 1,046.2
Retained earnings 1,472.2 1,353.0
Accumulated other
comprehensive loss (166.5) (195.1)
Treasury stock, at cost,
44,992,520 shares and
44,195,250 shares as of
June 30, 2017 and December
31, 2016, respectively (2,334.5) (2,167.4)
Noncontrolling interests 0.4 0.4
--- ---
Total stockholders' equity 10.6 38.0
---- ----
Total liabilities and
stockholders' equity $2,145.8 $1,760.3
======== ========
LENNOX INTERNATIONAL INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Unaudited)
(Amounts in
millions) For the Six Months Ended
June 30,
2017 2016
---- ----
Cash flows from operating
activities:
Net income $159.0 $135.6
Adjustments to reconcile net
income to net cash used in
operating activities:
Income from
equity method
investments (10.9) (10.8)
Dividends from
affiliates 2.5 3.9
Restructuring
gains, net of
cash paid - (1.0)
Provision for
bad debts 2.7 2.7
Unrealized gains
on derivative
contracts (3.0) (1.9)
Stock-based
compensation
expense 12.5 14.8
Depreciation and
amortization 32.0 28.5
Deferred income
taxes (4.9) (1.9)
Other items, net 0.2 0.3
Changes in assets and
liabilities, net of effects of
divestitures:
Accounts and
notes
receivable (213.8) (216.2)
Inventories (114.1) (80.6)
Other current
assets (5.7) (6.7)
Accounts payable 81.3 82.6
Accrued expenses (9.9) 20.1
Income taxes
payable and
receivable 16.2 1.5
Other 7.6 3.8
Net cash used in
operating
activities (48.3) (25.3)
Cash flows from investing
activities:
Proceeds from
the disposal of
property, plant
and equipment 0.2 -
Purchases of
property, plant
and equipment (43.4) (41.7)
----- -----
Net cash used in
investing
activities (43.2) (41.7)
Cash flows from financing
activities:
Short-term
borrowings, net (1.1) 0.5
Asset
securitization
borrowings 200.0 40.0
Asset
securitization
payments - (20.0)
Long-term debt
payments (200.5) (8.2)
Borrowings from
credit facility 1,352.5 1,184.5
Payments on
credit facility (1,031.0) (864.0)
Proceeds from
employee stock
purchases 1.5 1.3
Repurchases of
common stock (175.0) (200.0)
Repurchases of
common stock to
satisfy
employee
withholding tax
obligations (14.1) (21.4)
Cash dividends
paid (36.9) (31.8)
----- -----
Net cash
provided by
financing
activities 95.4 80.9
Increase in cash
and cash
equivalents 3.9 13.9
Effect of
exchange rates
on cash and
cash
equivalents 7.2 1.9
Cash and cash
equivalents,
beginning of
period 50.2 38.9
---- ----
Cash and cash
equivalents,
end of period $61.3 $54.7
===== =====
Supplemental disclosures of
cash flow information:
Interest paid $17.1 $12.4
===== =====
Income taxes
paid (net of
refunds) $47.8 $55.8
===== =====
LENNOX INTERNATIONAL INC. AND SUBSIDIARIES
Reconciliation to U.S. GAAP (Generally Accepted Accounting Principles) Measures
(Unaudited, in millions, except per share and ratio data)
Use of Non-GAAP Financial Measures
To supplement the Company's consolidated financial statements and segment net sales and profit presented in accordance with U.S. GAAP, additional non-GAAP financial measures are provided and reconciled in the following tables. In addition to these non-GAAP measures, the Company also provides rates of revenue change at
constant currency on a consolidated and segment basis if different than the reported measures. The Company believes that these non-GAAP financial measures, when considered together with the GAAP financial measures, provide information that is useful to investors in understanding period-over-period operating results. The
Company believes that these non-GAAP financial measures enhance the ability of investors to analyze the Company's business trends and operating performance.
Reconciliation of Income from Continuing Operations, a GAAP measure, to Adjusted Income from Continuing Operations, a
Non-GAAP measure
For the Three Months Ended June 30,
2017 2016
Pre-Tax Tax Impact (e) After Tax Pre-Tax Tax Impact (e) After Tax
------- ------------- --------- ------- ------------- ---------
Income from continuing operations, a GAAP $167.3 $(50.9) $116.4 $154.1 $(42.9) $111.2
measure
Restructuring charges 0.1 - 0.1 0.8 (0.3) 0.5
Special product quality adjustments (b) 5.2 (1.8) 3.4 - - -
Special legal contingency charges (a) 1.2 (0.2) 1.0 (1.7) 0.6 (1.1)
Asbestos-related litigation (a) 0.7 (0.2) 0.5 1.1 (0.4) 0.7
Net change in unrealized losses (gains) 0.1 - 0.1 (0.3) 0.1 (0.2)
on unsettled future contracts (a)
Environmental liabilities(a) 0.2 - 0.2 0.5 (0.1) 0.4
Excess tax benefits from share-based - (0.7) (0.7) - - -
compensation (c)
Contractor tax payments (a) - - - - - -
Other items, net (a) - - - - - -
Adjusted income from continuing operations, $174.8 $(53.8) $121.0 $154.5 $(43.0) $111.5
a non-GAAP measure
Earnings per share from continuing $2.71 $2.52
operations - diluted, a GAAP measure
Restructuring charges - 0.01
Special product quality adjustments (b) 0.08 -
Special legal contingency charges(a) 0.02 (0.03)
Asbestos-related litigation(a) 0.01 0.02
Net change in unrealized losses (gains) on - -
unsettled future contracts (a)
Environmental liabilities (a) 0.01 0.01
Excess tax benefits from share-based (0.02) -
compensation (c)
Contractor tax payments (a) - -
Other items, net (a) - -
Change in share counts from share-based 0.02 -
compensation (d)
Adjusted earnings per share from continuing $2.83 $2.53
operations - diluted, a non-GAAP measure
(a) Recorded in Losses (gains) and
other expenses, net in the
Consolidated Statements of
Operations
(b) Recorded in Cost of goods sold
in the Consolidated Statements of
Operations
(c) Recorded in Provision for
income taxes in the Consolidated
Statements of Operations
(d) The impact of excess tax
benefits from the change in share-
based compensation also impacts
our diluted share counts. The
reconciliation of average
outstanding diluted shares on a
GAAP and non-GAAP basis is
included in this document.
(e) Tax impact based on the
applicable tax rate relevant to
the location and nature of the
adjustment.
For the Six Months Ended June 30,
2017 2016
Pre-Tax Tax Impact (e) After Tax Pre-Tax Tax Impact (e) After Tax
------- ------------- --------- ------- ------------- ---------
Income from continuing operations, a GAAP $220.6 $(60.7) $159.9 $192.0 $(55.9) $136.1
measure
Restructuring charges 0.2 - 0.2 0.6 (0.2) 0.4
Special product quality adjustments (b) 5.2 (1.8) 3.4 (0.4) 0.1 (0.3)
Special legal contingency charges (a) 2.0 (0.1) 1.9 - 0.1 0.1
Asbestos-related litigation (a) 2.4 (0.8) 1.6 1.9 (0.7) 1.2
Net change in unrealized losses (gains) 0.9 (0.4) 0.5 (0.7) 0.2 (0.5)
on unsettled future contracts (a)
Inventory write down, after tax (b) - - - - -
-
Environmental liabilities (a) 0.7 (0.2) 0.5 1.1 (0.2) 0.9
Excess tax benefits from share-based - (8.1) (8.1) - - -
compensation (c)
Contractor tax payments (a) - - - 0.5 (0.2) 0.3
Other items (a) - - - 0.4 (0.1) 0.3
Adjusted income from continuing operations, $232.0 $(72.1) $159.9 $195.4 $(56.9) $138.5
a non-GAAP measure
Earnings per share from continuing $3.70 $3.07
operations - diluted, a GAAP measure
Restructuring charges - 0.01
Special product quality adjustments (b) 0.08 (0.01)
Special legal contingency charges (a) 0.04 -
Asbestos-related litigation (a) 0.04 0.02
Net change in unrealized losses (gains) 0.01 (0.01)
on unsettled future contracts (a)
Inventory write down, after tax (b) - -
Environmental liabilities (a) 0.02 0.02
Excess tax benefits from share-based (0.19)
compensation (c)
-
Contractor tax payments (a) - 0.01
Other items, net (a) - 0.01
Change in share counts from share-based 0.02 -
compensation (d)
Adjusted earnings per share from continuing operations - diluted, a non-GAAP measure $3.72 $3.12
===== =====
(a) Recorded in Losses (gains) and
other expenses, net in the
Consolidated Statements of
Operations
(b) Recorded in Cost of goods sold
in the Consolidated Statements of
Operations
(c) Recorded in Provision for
income taxes in the Consolidated
Statements of Operations
(d) The impact of excess tax
benefits from the change in share-
based compensation also impacts
our diluted share counts. The
reconciliation of average
outstanding diluted shares on a
GAAP and non-GAAP basis is
included in this document.
(e) Tax impact based on the
applicable tax rate relevant to
the location and nature of the
adjustment.
For the Three Months For the Six Months
Ended June 30, Ended June 30,
2017 2016 2017 2016
---- ---- ---- ----
Components of Losses and other
expenses, net (pre-tax):
Realized (gains)
losses on settled
future contracts
(a) $(0.4) $0.4 $(0.8) $0.9
Foreign currency
exchange (gains)
losses (a) 0.5 0.3 0.2 0.5
Gains on disposal of
fixed assets (a) - 0.1 - 0.1
Net change in
unrealized losses
(gains) on
unsettled futures
contracts (b) 0.1 (0.3) 0.9 (0.7)
Special legal
contingency charges
(b) 1.2 (1.7) 2.0 -
Asbestos-related
litigation (b) 0.7 1.1 2.4 1.9
Environmental
liabilities (b) 0.2 0.5 0.7 1.1
Contractor tax
payments (b) - - - 0.5
Acquisition costs
(b) - - - 0.4
Other items, net (b) - - - -
--- ---
Losses and other
expenses, net (pre-
tax) $2.3 $0.4 $5.4 $4.7
==== ==== ==== ====
(a) Included in both segment profit (loss) and Adjusted income from continuing operations
(b) Excluded from both segment profit (loss) and Adjusted income from continuing operations
Reconciliation of Earnings per Share from Continuing Operations - Diluted, a GAAP measure, to Estimated Adjusted
Earnings per Share from Continuing Operations - Diluted, a Non-GAAP measure
For the Year
Ended
December 31,
2017
ESTIMATED
---------
Earnings per share from continuing operations - diluted, a GAAP measure $7.73 - $8.13
Excess tax benefits from share-based compensation and other items 0.02
Adjusted Earnings per share from continuing operations - diluted, a Non-GAAP measure $7.75 - $8.15
=============
Reconciliation of Average Shares Outstanding - Diluted, a GAAP measure, to Adjusted Average Shares Outstanding -
Diluted, a Non-GAAP measure (shares in millions):
For the Three Months Ended For the Six Months Ended
June 30, June 30,
2017 2016 2017 2016
---- ---- ---- ----
Average shares outstanding - diluted, a GAAP 42.9 44.1 43.2 44.4
measure
Impact on diluted shares from excess tax benefits from (0.2) - (0.2) -
share-based compensation
Adjusted average shares outstanding - diluted, a Non- 42.7 44.1 43.0 44.4
GAAP measure
Reconciliation of Net Cash Used in Operating Activities, a GAAP measure, to Free Cash Flow, a Non-GAAP measure
(dollars in millions)
For the Three Months Ended For the Six Months Ended
June 30, June 30,
2017 2016 2017 2016
Net cash provided by (used in) operating activities, a $59.3 $76.3 $(48.3) $(25.3)
GAAP measure
Purchases of property, plant and equipment (18.5) (17.9) (43.4) (41.7)
Proceeds from the disposal of property, plant and 0.1 - 0.2 -
equipment
Free cash flow, a Non-GAAP measure $40.9 $58.4 $(91.5) $(67.0)
===== ===== ====== ======
Calculation of Debt to EBITDA Ratio (dollars in Trailing
millions): Twelve
Months to
June 30, 2017
-------------
Adjusted EBIT (a) $509.4
Depreciation and amortization expense (b) 61.6
EBITDA (a + b) $571.0
------
Total debt at June 30, 2017 (c) $1,188.9
--------
Total Debt to EBITDA ratio ((c / (a + b)) 2.1
===
Reconciliation of Adjusted EBIT, a Non-GAAP measure, to Income From Continuing Operations Before Income Taxes,
a GAAP measure (dollars in millions)
Trailing
Twelve
Months to
June 30, 2017
-------------
Adjusted EBIT per above, a Non-GAAP measure $509.4
Special product quality adjustments 5.2
Items in Losses (gains) and other expenses, net that are excluded from segment profit 10.3
Restructuring charges 1.5
Interest expense, net 29.9
Pension Settlement 31.4
Other expenses, net (0.2)
Income from continuing operations before income taxes, a GAAP measure $431.3
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SOURCE Lennox International Inc.
