LENNOX INTERNATIONAL INC. DALLAS, Oct. 17, 2016 /PRNewswire/ -- Lennox International Inc. (NYSE: LII) today reported financial results for the third quarter of 2016. All comparisons are against the prior-year quarter unless otherwise noted.
Revenue for the third quarter was $1.01 billion, up 6%. Foreign exchange was neutral to revenue in the quarter. GAAP operating income increased 24% to a third-quarter record $157 million. GAAP earnings per share from continuing operations was a third-quarter record $2.33, up 32%. Adjusted earnings per share from continuing operations was a third-quarter record $2.33, up 28%.
"Lennox International set new third-quarter records for operating margin and profit on strong revenue growth, led by our Residential business," said Chairman and CEO Todd Bluedorn. "We continued to drive significant margin expansion across all three of our businesses in the third quarter. Overall, total segment profit margin rose 190 basis points to a third-quarter record 15.6%.
"Our Residential business set third-quarter records for sales, margin and profit. Residential revenue was up 11% on strength in both replacement and new construction business. Residential profit rose 25% as segment margin expanded 230 basis points to 19.7%. Our Commercial business established new highs for margin and profit on 2% revenue growth. Commercial profit rose 9%, and segment margin expanded 130 basis points to 19.5%. In Refrigeration, profit rose 13% as segment margin expanded 160 basis points to 12.3%. Refrigeration revenue was down 2%, primarily on the timing of national account business and soft market conditions in Europe."
Looking ahead for the company overall, Bluedorn said, "As part of our ongoing strategy to de-risk the company's pension plan obligations, we expect to complete a one-time, lump sum pension buyout in the fourth quarter for certain vested participants. This action is expected to reduce the company's pension obligations by approximately $50 million. We expect to take a non-cash charge of approximately $20 million after-tax, and our updated 2016 guidance for GAAP EPS from continuing operations incorporates this.
"For adjusted EPS from continuing operations, we are raising 2016 guidance based on the company's strong operational performance and outlook, and we continue to expect strong margin expansion and profit growth as momentum continues."
FINANCIAL HIGHLIGHTS
Revenue: Revenue for the third quarter was $1.01 billion, up 6%. Foreign exchange was neutral to revenue. Volume and price/mix were up on a revenue basis.
Gross Profit: Gross profit in the third quarter was $310 million, up 13%. Gross margin was 30.7%, up 210 basis points. Gross profit was positively impacted by higher volume, higher factory productivity, and lower material costs, with partial offsets from investments in distribution expansion and other product costs.
Income from Continuing Operations: On a GAAP basis, income from continuing operations for the third quarter was $101.7 million, or $2.33 per share, compared to $80.3 million, or $1.76 per share, in the prior-year quarter.
Adjusted income from continuing operations in the third quarter was $101.9 million, or $2.33 per share, compared to $83.2 million, or $1.82 per share, in the prior-year quarter. Adjusted earnings from continuing operations for the third quarter of 2016 excludes $0.2 million in net after-tax charges: a $0.7 million gain for the net change in unrealized gains on unsettled future contracts, a charge of $0.4 million for restructuring activities, and charges of $0.5 million for other items, net.
Free Cash Flow and Total Debt: In the third quarter, net cash from operations was $148 million, capital expenditures totaled $18 million, and free cash flow was $130 million. This includes a $50 million use of cash for a discretionary pension contribution. In the prior-year quarter, net cash from operations was $159 million, capital expenditures totaled $14 million, and free cash flow was $145 million. Total debt at the end of the third quarter was $1.06 billion. Total cash and cash equivalents were $48 million at the end of the quarter. The company paid $19 million in dividends in the third quarter and paid $100 million in conjunction with an accelerated share repurchase program over the third and fourth quarters.
BUSINESS SEGMENT HIGHLIGHTS
Residential Heating & Cooling
Revenue in the Residential Heating & Cooling business segment was a third-quarter record $573 million, up 11%. Foreign exchange was neutral to revenue. Segment profit was a third-quarter record $113 million, up 25%. Segment profit margin was a third-quarter record 19.7%, up 230 basis points. Results were impacted by higher volume, favorable price/mix, lower material costs, and higher factory productivity, with partial offsets from investments in SG&A, distribution expansion, and other product costs.
Commercial Heating & Cooling
Revenue in the Commercial Heating & Cooling business segment was $251 million in the third quarter, up 2%. Foreign exchange was neutral to revenue. Segment profit was a record $49 million, up 9%. Segment profit margin was a record 19.5%, up 130 basis points. Results were impacted by higher volume, lower material costs, and lower freight costs, with partial offsets from factory productivity and other product costs, and investments in SG&A.
Refrigeration
Revenue in the Refrigeration business segment was $186 million in the third quarter, down 2%. Foreign exchange was neutral to revenue. Segment profit was $23 million, up 13%. Segment profit margin was 12.3%, up 160 basis points. Results were impacted by lower material costs, lower factory costs and higher productivity, with partial offsets from lower volume, unfavorable price/mix, unfavorable foreign exchange, and higher SG&A.
FULL-YEAR OUTLOOK
For 2016, the company is updating guidance for revenue growth and EPS from continuing operations.
-- Narrowing guidance for 2016 revenue growth from 3-7% to 4-6%. The
company still expects foreign exchange to be neutral to revenue on a
full-year basis.
-- Updating guidance for 2016 GAAP EPS from continuing operations from
$6.45-$6.85 to a range of $6.25-$6.45, including special items to-date
and the approximate $20 million after-tax ($30 million pre-tax) pension
charge expected in the fourth quarter as a result of the one-time,
lump-sum pension buyout program to certain vested participants.
-- Raising guidance for 2016 adjusted EPS from continuing operations from
$6.50-$6.90 to a range of $6.75-$6.95.
-- Reiterating effective tax rate guidance of approximately 31% on a
full-year basis for 2016 and 32% for future years.
-- Reiterating fully diluted share count guidance of approximately 44
million shares on a full-year basis.
-- Reiterating 2016 capital expenditure guidance of approximately $95
million.
CONFERENCE CALL INFORMATION
A conference call to discuss the company's third-quarter results will be held this morning at 8:30 a.m. Central time. To listen, call the conference call line at 612-288-0340 at least 10 minutes prior to the scheduled start time and use reservation number 403686. 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 October 17 through midnight October 31, 2016 by dialing 800-475-6701 (U.S.) or 320-365-3844 (international) and using access code 403686. The call also will be archived on the company's web site.
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 2016 full-year outlook, expected financial results for 2016, and the expected pension buyout and its related effects, 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 these 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 Nine Months Ended
September 30, September 30,
------------- -------------
2016 2015 2016 2015
---- ---- ---- ----
Net sales $1,010.0 $955.0 $2,744.4 $2,633.3
Cost of goods sold 699.7 681.6 1,935.5 1,913.5
----- ----- ------- -------
Gross profit 310.3 273.4 808.9 719.8
Operating Expenses:
Selling, general and
administrative expenses 156.5 143.8 456.2 430.0
Losses and other
expenses, net 0.7 6.0 5.5 14.9
Restructuring charges
(gains) 0.6 (0.4) 1.2 1.8
Income from equity
method investments (4.4) (3.0) (15.3) (11.8)
---- ---- ----- -----
Operating income 156.9 127.0 361.3 284.9
Interest expense, net 7.0 5.7 19.6 17.9
Other income, net - (0.7) (0.2) (0.7)
--- ---- ---- ----
Income from continuing
operations before
income taxes 149.9 122.0 341.9 267.7
Provision for income
taxes 48.2 41.7 104.0 91.9
---- ---- ----- ----
Income from continuing
operations 101.7 80.3 237.9 175.8
Discontinued Operations:
Loss from discontinued
operations before
income taxes - - (0.9) (0.9)
Benefit from income
taxes - - (0.3) (0.4)
--- --- ---- ----
Loss from discontinued
operations - - (0.6) (0.5)
--- --- ---- ----
Net income $101.7 $80.3 $237.3 $175.3
====== ===== ====== ======
Earnings per share - Basic:
Income from continuing
operations $2.35 $1.78 $5.46 $3.92
Loss from discontinued
operations - - (0.01) (0.01)
--- --- ----- -----
Net income $2.35 $1.78 $5.45 $3.91
===== ===== ===== =====
Earnings per share - Diluted:
Income from continuing
operations $2.33 $1.76 $5.39 $3.86
Loss from discontinued
operations - - (0.01) (0.01)
--- --- ----- -----
Net income $2.33 $1.76 $5.38 $3.85
===== ===== ===== =====
Weighted Average Number
of Shares Outstanding -
Basic 43.2 45.0 43.6 44.9
Weighted Average Number
of Shares Outstanding -
Diluted 43.7 45.6 44.2 45.6
Cash dividends declared
per share $0.43 $0.36 $1.22 $1.02
LENNOX INTERNATIONAL INC. AND SUBSIDIARIES
Segment Net Sales and Profit (Loss)
(Unaudited)
(Amounts in millions) For the Three Months Ended For the Nine Months Ended
September 30, September 30,
------------- -------------
2016 2015 2016 2015
---- ---- ---- ----
Net sales
Residential Heating & Cooling $572.7 $517.9 $1,524.5 $1,435.6
Commercial Heating & Cooling 251.4 246.8 674.7 660.3
Refrigeration 185.9 190.3 545.2 537.4
$1,010.0 $955.0 $2,744.4 $2,633.3
======== ====== ======== ========
Segment Profit (Loss) (1)
Residential Heating & Cooling $112.7 $90.1 $266.9 $221.3
Commercial Heating & Cooling 48.9 44.8 110.6 95.5
Refrigeration 22.9 20.3 53.2 37.5
Corporate and other (27.3) (24.0) (65.7) (57.4)
----- ----- ----- -----
Total segment profit 157.2 131.2 365.0 296.9
Reconciliation to Operating income:
Special product quality adjustments - 0.7 (0.4) (0.6)
Items in Losses (gains) and other
expenses, net that are excluded from
segment profit (loss) (1) (0.3) 3.9 2.9 10.8
Restructuring charges 0.6 (0.4) 1.2 1.8
Operating income $156.9 $127.0 $361.3 $284.9
====== ====== ====== ======
((1) ) The Company defines 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 (gains) and other expenses, net:
-- Net change in unrealized gains and/or losses on unsettled futures
contracts,
-- Special legal contingency charges,
-- Asbestos-related litigation,
-- Contractor tax payments,
-- Environmental liabilities, and
-- Other items, net;
-- Restructuring charges; and,
-- Goodwill, long-lived asset, and equity method investment impairments.
LENNOX INTERNATIONAL INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(Amounts in millions, except
shares and par values) As of September 30, As of December 31,
2016 2015
---- ----
(unaudited)
ASSETS
Current Assets:
Cash and cash equivalents $47.8 $38.9
Accounts and notes
receivable, net of
allowances of $7.7 and $6.3
in 2016 and 2015,
respectively 570.4 422.8
Inventories, net 474.0 418.8
Other assets 74.3 57.7
---- ----
Total current assets 1,166.5 938.2
Property, plant and
equipment, net of
accumulated depreciation of
$718 and $682.9 in 2016 and
2015, respectively 346.2 339.6
Goodwill 198.5 195.1
Deferred income taxes 147.4 145.7
Other assets, net 68.0 58.8
---- ----
Total assets $1,926.6 $1,677.4
======== ========
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current Liabilities:
Short-term debt $327.8 $204.1
Current maturities of long-
term debt 215.6 31.0
Accounts payable 371.7 320.1
Accrued expenses 272.2 242.6
Income taxes payable 0.8 26.0
--- ----
Total current liabilities 1,188.1 823.8
Long-term debt 512.5 506.0
Post-retirement benefits,
other than pensions 2.2 4.1
Pensions 72.9 120.8
Other liabilities 126.7 121.1
----- -----
Total liabilities 1,902.4 1,575.8
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 1,017.5 1,002.4
Retained earnings 1,331.1 1,146.7
Accumulated other
comprehensive loss (187.0) (204.7)
Treasury stock, at cost,
44,126,432 shares and
42,491,910 shares as of
September 30, 2016 and
December 31, 2015,
respectively (2,138.7) (1,844.1)
Noncontrolling interests 0.4 0.4
--- ---
Total stockholders' equity 24.2 101.6
---- -----
Total liabilities and
stockholders' equity $1,926.6 $1,677.4
======== ========
LENNOX INTERNATIONAL INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Unaudited)
(Amounts in
millions) For the Nine Months Ended
September 30,
-------------
2016 2015
---- ----
Cash flows from operating
activities:
Net income $237.3 $175.3
Adjustments to reconcile net
income to net cash used in
operating activities:
Income from
equity method
investments (15.3) (11.8)
Dividends from
affiliates 3.9 7.4
Restructuring
(gains)
expenses, net
of cash paid (0.8) (0.2)
Provision for
bad debts 3.4 2.1
Unrealized
(gains)
losses on
derivative
contracts (2.2) 1.3
Stock-based
compensation
expense 24.8 18.5
Depreciation
and
amortization 43.4 46.6
Deferred
income taxes (2.6) (0.2)
Pension
expense 4.8 8.1
Pension
contributions (52.6) (3.8)
Other items,
net 0.4 0.3
Changes in assets and
liabilities, net of effects
of divestitures:
Accounts and
notes
receivable (146.2) (135.9)
Inventories (49.9) (41.0)
Other current
assets (6.6) (2.8)
Accounts
payable 56.4 23.4
Accrued
expenses 40.7 15.1
Income taxes
payable and
receivable (35.0) (0.9)
Other 3.0 5.4
Net cash
provided by
operating
activities 106.9 106.9
Cash flows from investing
activities:
Purchases of
property,
plant and
equipment (59.4) (47.0)
----- -----
Net cash used
in investing
activities (59.4) (47.0)
Cash flows from financing
activities:
Short-term
borrowings,
net (2.1) 0.8
Asset
securitization
borrowings 145.0 40.0
Asset
securitization
payments (20.0) (40.0)
Long-term
debt payments (30.9) (23.5)
Borrowings
from credit
facility 1,715.0 1,401.0
Payments on
credit
facility (1,493.0) (1,385.0)
Payments of
deferred
financing
costs (0.9) -
Proceeds from
employee
stock
purchases 1.9 1.8
Repurchases of
common stock (300.0) -
Repurchases of
common stock
to satisfy
employee
withholding
tax
obligations (26.3) (23.5)
Excess tax
benefits
related to
share-based
payments 20.0 18.6
Cash dividends
paid (50.5) (43.1)
----- -----
Net cash used
in financing
activities (41.8) (52.9)
Increase in
cash and cash
equivalents 5.7 7.0
Effect of
exchange
rates on cash
and cash
equivalents 3.2 (9.4)
Cash and cash
equivalents,
beginning of
period 38.9 37.5
---- ----
Cash and cash
equivalents,
end of period $47.8 $35.1
===== =====
Supplemental disclosures of
cash flow information:
Interest paid $17.0 $15.9
===== =====
Income taxes
paid (net of
refunds) $120.9 $73.4
====== =====
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
Reconciliation of Income from Continuing Operations, a GAAP measure, to Adjusted Income from Continuing Operations, a Non-GAAP measure
For the Three Months Ended September 30,
2016 2015
Pre-Tax Tax Impact (c) After Tax Pre-Tax Tax Impact (c) After Tax
------- ------------- --------- ------- ------------- ---------
Income from
continuing
operations, a GAAP
measure $149.9 $(48.2) $101.7 $122.0 $(41.7) $80.3
Restructuring charges 0.6 (0.2) 0.4 (0.4) 0.1 (0.3)
Special product
quality adjustments
(b) - - - 0.7 (0.2) 0.5
Special legal
contingency charges
(a) 0.5 (0.2) 0.3 1.3 (0.5) 0.8
Asbestos-related
litigation (a) 0.4 (0.1) 0.3 0.4 (0.1) 0.3
Net change in
unrealized losses
(gains) on unsettled
future contracts (a) (1.2) 0.5 (0.7) 0.8 (0.3) 0.5
Environmental
liabilities(a) - (0.1) (0.1) 0.3 - 0.3
Contractor tax
payments (a) - - - 0.8 (0.1) 0.7
Other items, net (a) - - - 0.3 (0.2) 0.1
Adjusted income from
continuing
operations, a non-
GAAP measure $150.2 $(48.3) $101.9 $126.2 $(43.0) $83.2
====== ====== ====== ====== ====== =====
Earnings per share from continuing
operations -diluted, a GAAP
measure $2.33 $1.76
Restructuring charges 0.01 (0.01)
Special product quality adjustments
(b) - 0.01
Special legal contingency charges(a) 0.01 0.02
Asbestos-related litigation(a) 0.01 0.01
Net change in unrealized losses
(gains) on unsettled future
contracts (a) (0.02) 0.01
Environmental liabilities (a) (0.01) 0.01
Contractor tax payments (a) - 0.01
Other items, net (a) - -
Adjusted earnings per share from
continuing operations - diluted, a
non-GAAP measure $2.33 $1.82
===== =====
(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) Tax impact based on the applicable tax rate relevant to the location and nature of the adjustment.
For the Nine Months Ended September 30,
2016 2015
Pre-Tax Tax Impact (c) After Tax Pre-Tax Tax Impact (c) After Tax
------- ------------- --------- ------- ------------- ---------
Income from
continuing
operations, a GAAP
measure $341.9 $(104.0) $237.9 $267.7 $(91.9) $175.8
Restructuring charges 1.2 (0.4) 0.8 1.8 (0.6) 1.2
Special product
quality adjustments
(b) (0.4) 0.1 (0.3) (0.6) 0.2 (0.4)
Special legal
contingency charges
(a) 0.5 (0.2) 0.3 5.5 (2.1) 3.4
Asbestos-related
litigation (a) 2.3 (0.8) 1.5 1.0 (0.3) 0.7
Net change in
unrealized losses
(gains) on unsettled
future contracts (a) (1.9) 0.7 (1.2) 0.9 (0.4) 0.5
Environmental
liabilities (a) 1.1 (0.3) 0.8 0.7 (0.1) 0.6
Contractor tax
payments (a) 0.5 (0.1) 0.4 2.4 (0.6) 1.8
Other items (a) 0.4 (0.2) 0.2 0.3 (0.2) 0.1
Adjusted income from
continuing
operations, a non-
GAAP measure $345.6 $(105.2) $240.4 $279.7 $(96.0) $183.7
====== ======= ====== ====== ====== ======
Earnings per share from continuing
operations -diluted, a GAAP
measure $5.39 $3.86
Restructuring charges 0.02 0.02
Special product quality adjustments
(b) (0.01) -
Special legal contingency charges
(a) 0.01 0.08
Asbestos-related litigation (a) 0.03 0.02
Net change in unrealized losses
(gains) on unsettled future
contracts (a) (0.03) 0.01
Environmental liabilities (a) 0.02 0.02
Contractor tax payments (a) 0.01 0.03
Other items, net (a) - -
--- ---
Adjusted earnings per share from
continuing operations - diluted, a
non-GAAP measure $5.44 $4.04
===== =====
(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) Tax impact based on the
applicable tax rate relevant to
the location and nature of the
adjustment.
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
2016 2015 2016 2015
---- ---- ---- ----
Components of Losses
and other expenses,
net (pre-tax):
Realized losses on
settled future
contracts (a) $0.3 $0.6 $1.2 $1.3
Foreign currency
exchange losses (a) 0.5 1.4 1.1 2.7
Loss on disposal of
fixed assets (a) 0.2 0.1 0.3 0.1
Net change in
unrealized (gains)
losses on unsettled
futures contracts
(b) (1.2) 0.8 (1.9) 0.9
Special legal
contingency (gains)
charges (b) 0.5 1.3 0.5 5.5
Asbestos-related
litigation (b) 0.4 0.4 2.3 1.0
Environmental
liabilities
(benefits) (b) - 0.3 1.1 0.7
Contractor tax
payments (b) - 0.8 0.5 2.4
Acquisition costs (b) - - 0.4 -
Other items, net (b) - 0.3 - 0.3
--- ---
Losses and other
expenses, net (pre-
tax) $0.7 $6.0 $5.5 $14.9
==== ==== ==== =====
(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 Estimated Adjusted Earnings per Share from Continuing Operations - Diluted, a Non-GAAP measure, to Earnings per Share from Continuing Operations - Diluted, a GAAP measure
For the Year
Ended
December 31,
2016
ESTIMATED
---------
Adjusted Earnings per share from continuing operations - diluted, a Non-GAAP measure $6.75 - $6.95
Pension buyout and other items (0.50)
Earnings per share from continuing operations - diluted, a GAAP measure $6.25-$6.45
===========
Reconciliation of Net Cash Provided by Operating Activities, a GAAP measure, to Free Cash Flow, a Non-GAAP measure (dollars in millions)
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
2016 2015 2016 2015
---- ----
Net cash provided
by (used in)
operating
activities, a
GAAP measure $147.9 $159.1 $106.9 $106.9
Purchases of
property, plant
and equipment $(17.7) $(13.9) $(59.4) $(47.0)
Free cash flow, a
Non-GAAP
measure $130.2 $145.2 $47.5 $59.9
====== ====== ===== =====
Calculation of Debt to EBITDA
Ratio (dollars in millions): Trailing
Twelve
Months to
September 30,
2016
----
Adjusted EBIT (a) $445.8
Depreciation and amortization
expense (b) 59.5
EBITDA (a + b) $505.3
------
Total debt at September 30, 2016
(c) 1,055.9
-------
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
September 30,
2016
----
Adjusted EBIT per above, a Non-GAAP measure $445.8
Special product quality adjustments (1.9)
Items in Losses (gains) and other expenses, net that are excluded from segment profit 7.7
Restructuring charges 2.6
Interest expense, net 25.3
Special inventory write down 5.6
Goodwill impairment 5.5
Asset impairment 44.5
Other expenses, net (0.4)
Income from continuing operations before income taxes, a GAAP measure $356.9
======
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SOURCE Lennox International Inc.
