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Lennox International Announces Record Sales, Net Income and EPS For Full-Year 2006; Fourth Quarter Adjusted EPS of $0.46; Expects EPS of $2.50 to $2.60 in 2007

DALLAS, Feb. 8 /PRNewswire-FirstCall/ -- Lennox International Inc. (NYSE: LII) today announced results for fourth quarter and full-year 2006. "Despite a year of numerous challenges, Lennox International achieved record sales and profitability in 2006," said Bob Schjerven, chief executive officer. "We successfully managed commodity price increases, the transition to a new 13 SEER energy efficiency standard for residential air conditioning, a downturn in housing starts, and unfavorable heating season weather to chart the best financial performance in our 112-year history."

(Logo: http://www.newscom.com/cgi-bin/prnh/20020304/DAM053LOGO )

Sales for full-year 2006 increased 9% to $3.7 billion, with all business segments contributing to the growth. Net income was $166 million, or $2.26 per diluted share. For full-year 2006, adjusted income from continuing operations, a non-GAAP measure, was $160 million, or $2.18 per diluted share - a 19% increase over the $1.83 per share earned from adjusted income from continuing operations in 2005. A description and reconciliation of this measure to net income are provided in the attached table.

The company generated $200 million in cash from operations and invested $74 million in capital expenditures, resulting in full-year free cash flow of $126 million. LII used $156 million to repurchase almost six million shares of common stock in 2006, including $32 million in the fourth quarter. The company ended the year with a total debt to capitalization ratio of 12%, despite an approximate $24 million reduction in equity resulting primarily from the adoption of Statement of Financial Accounting Standards No. 158, "Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans".

Unseasonably warm winter weather and the decline in residential new construction contributed to lower demand in the fourth quarter. Fourth quarter sales decreased 1% to $862 million and net income was $41 million, or $0.58 per share. Adjusted income from continuing operations was $33 million or $0.46 per share, compared to adjusted income from continuing operations of $34 million, or $0.46 per share, in the previous year's fourth quarter.

Fourth quarter results include a pre-tax loss of $2 million related to futures contracts for copper and aluminum. This amount consists of $14 million in pre-tax gains on contracts that settled in the fourth quarter, and a $16 million pre-tax loss primarily reflecting net unrealized losses on open contracts that were marked to market and the offset for net unrealized gains recorded in prior periods for contracts that settled in the fourth quarter. In addition, the company recorded net tax benefits totaling $18 million related to the release of tax contingency reserves established in prior years and the revaluation of deferred tax asset valuation allowances. These tax benefits were excluded from adjusted results.

Fourth quarter and full-year 2006 financial statements reflect the adoption of Staff Accounting Bulletin No. 108, "Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements" ("SAB No. 108"). In accordance with SAB No. 108, the Company reduced retained earnings for 2006 by $12 million and increased net income for the second quarter of 2006 by $4 million to reflect understatements in product warranty reserves caused by misstatements that occurred in prior years, primarily for products no longer in production. The resulting adjustments do not affect previously reported cash flows from operations and the impact on prior years' results was concluded to be immaterial. Adjusted quarterly financial statements for 2006 are included with this release.

2007 Outlook

"Lennox International has established a positive earnings trend and we have opportunities in each of our businesses that will allow us to continue to grow and build shareholder value in 2007," said Schjerven. "We expect a 6% to 8% increase in LII's total revenue and an improvement of 50 basis points or more in the company's segment profit margin, resulting in 2007 earnings per share in the range of $2.50 to $2.60."

The company also reported a slow start to the year, particularly those businesses exposed to residential end markets, and consequently expects that first quarter earnings in 2007 could be below the prior year.

Fourth Quarter Segment Performance

Residential Heating & Cooling segment revenue decreased 11% during the quarter to $394 million. Industry unit volumes of heating and cooling equipment declined by an estimated 37%, as last year's fourth quarter received a significant boost from 13 SEER pre-buy activity making year-over-year comparisons difficult. Segment profit decreased to $43 million from $53 million last year due primarily to lower volume. Price improvement more than offset commodities cost increases during the quarter.

Commercial Heating & Cooling segment revenue grew 17% to $190 million. Profit doubled from $10 million in 2005 to $20 million. Sales and profitability improved in both North America and Europe, with price improvement more than offsetting material cost increases. Profitability improvement in Europe was due to strong volume growth and lower freight costs.

Service Experts segment sales decreased 3% to $161 million, but segment profit increased 32% to $8 million from $6 million in the previous year. Lower insurance costs resulting from an emphasis on safety programs and lower advertising expenses drove the improvement.

Refrigeration segment revenue rose 13% to $134 million, led by strong sales growth in the company's international markets. Segment profit decreased to $12 million from $13 million in the previous year, primarily due to an increased environmental reserve accrual in South America.

Conference Call

Lennox International will hold a conference call to discuss financial results for the fourth quarter and full-year 2006 on Thursday, February 8, at 9:30 a.m. (CST). All interested parties are invited to listen as Bob Schjerven, CEO, and Sue Carter, CFO, comment on the company's operating results.

To listen, please call the conference call line at 612-234-9959 ten minutes prior to the scheduled start time and use reservation number 860925. The number of connections for this call is limited. This conference call will also be webcast on Lennox International's web site at http://www.lennoxinternational.com.

If you are unable to participate in this conference call, a replay will be available from 3:00 p.m. February 8 through February 15 by dialing 800-475- 6701, access code 860925. This call will also be archived on the company's web site.

Operating in over 100 countries, Lennox International Inc. is a global leader in the heating, air conditioning, and refrigeration markets. Lennox International stock is traded on the New York Stock Exchange under the symbol "LII". Additional information is available at: http://www.lennoxinternational.com or by contacting Bill Moltner, vice president, investor relations, at 972-497-6670.

This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are subject to numerous risks and uncertainties including the impact of higher raw material prices, LII's ability to implement price increases for its products and services, and the impact of unfavorable weather and a decline in new construction activity on the demand for products and services, that could cause actual results to differ materially from such statements. For information concerning these 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.



                  LENNOX INTERNATIONAL INC. AND SUBSIDIARIES

                    CONSOLIDATED STATEMENTS OF OPERATIONS
   For the Three Months and Twelve Months Ended December 31, 2006 and 2005
                     (In millions, except per share data)

                                     For the                  For the
                                Three Months Ended      Twelve Months Ended
                                   December 31,             December 31,
                                 2006         2005        2006         2005
                             (unaudited)  (unaudited) (unaudited)

    NET SALES                   $862.4       $870.6     $3,671.1     $3,366.2
    COST OF GOODS SOLD           594.2        585.0      2,515.9      2,258.2
       Gross Profit              268.2        285.6      1,155.2      1,108.0
    OPERATING EXPENSES:
    Selling, general and
     administrative
     expenses                    232.5        245.2        973.2        916.6
    (Gains), losses and
     other expenses, net           1.7        (18.8)       (45.7)       (50.2)
    Restructuring charges          0.1            -         13.3          2.4
    Equity in earnings of
     unconsolidated
     affiliates                   (0.5)        (2.2)        (8.0)       (14.2)
       Operational income from
        continuing operations     34.4         61.4        222.4        253.4
    INTEREST EXPENSE, net          0.8          1.0          4.4         15.4
    OTHER (INCOME) EXPENSE, net   (0.5)           -         (0.4)         3.0
       Income from continuing
        operations before
        income taxes and
        cumulative effect of
        accounting change         34.1         60.4        218.4        235.0
    (BENEFIT) PROVISION FOR
     INCOME TAXES                 (7.0)        18.4         52.4         83.0
       Income from continuing
        operations before
        cumulative effect of
        accounting change         41.1         42.0        166.0        152.0
    CUMULATIVE EFFECT OF
     ACCOUNTING CHANGE, NET          -          0.1            -         (0.1)
       Income from continuing
        operations                41.1         41.9        166.0        152.1
    DISCONTINUED OPERATIONS:
       Loss from operations of
        discontinued operations      -          0.1            -          2.0
       Income tax benefit            -            -            -         (0.5)
       Loss on disposal of
        discontinued operations      -            -            -          0.1
       Income tax benefit            -            -            -         (0.2)
          Loss from discontinued
           operations                -          0.1            -          1.4

              Net income         $41.1        $41.8       $166.0       $150.7

    INCOME PER SHARE FROM
     CONTINUING OPERATIONS
     BEFORE CUMULATIVE EFFECT OF
     ACCOUNTING CHANGE:
       Basic                     $0.61        $0.60        $2.37        $2.37
       Diluted                   $0.58        $0.56        $2.26        $2.13

    CUMULATIVE EFFECT OF
     ACCOUNTING CHANGE
     PER SHARE:
       Basic                        $-           $-           $-           $-
       Diluted                      $-           $-           $-           $-

    INCOME PER SHARE FROM
     CONTINUING OPERATIONS:
       Basic                     $0.61        $0.60        $2.37        $2.37
       Diluted                   $0.58        $0.56        $2.26        $2.13

    LOSS PER SHARE FROM
     DISCONTINUED OPERATIONS:
       Basic                        $-      $ (0.01)          $-      $ (0.02)
       Diluted                      $-      $ (0.01)          $-      $ (0.02)

    NET INCOME PER SHARE:
       Basic                     $0.61        $0.59        $2.37        $2.35
       Diluted                   $0.58        $0.55        $2.26        $2.11

    AVERAGE SHARES OUTSTANDING:
       Basic                      67.4         70.3         69.9         64.2
       Diluted                    71.1         75.5         73.5         73.7

    CASH DIVIDENDS DECLARED
     PER SHARE:                  $0.13        $0.11        $0.46        $0.41



                  LENNOX INTERNATIONAL INC. AND SUBSIDIARIES

                    SEGMENT REVENUES AND OPERATING PROFIT
   For the Three Months and Twelve Months Ended December 31, 2006 and 2005
                           (Unaudited, in millions)

                                       For the                For the
                                  Three Months Ended    Twelve Months Ended
                                      December 31,         December 31,
                                    2006     2005        2006         2005
    Net Sales
      Residential
       Heating & Cooling          $393.9   $443.5    $1,848.4     $1,685.8
      Commercial Heating &
       Cooling                     189.8    162.4       723.2        651.7
      Service Experts              161.3    165.9       654.1        641.4
      Refrigeration                134.4    118.8       526.4        467.2
      Eliminations (A)             (17.0)   (20.0)      (81.0)       (79.9)
                                  $862.4   $870.6    $3,671.1     $3,366.2

    Segment Profit (Loss) (B)
      Residential
       Heating & Cooling           $43.2    $53.0      $212.1       $206.9
       Commercial Heating &
        Cooling                     19.7     10.1        73.1         56.9
       Service Experts               8.2      6.2        19.2         17.0
       Refrigeration                11.9     13.5        52.3         44.4
       Corporate and other        (33.6)    (32.4)     (101.5)      (103.1)
       Eliminations (A)             0.5       0.2         0.8          0.2
                                   49.9      50.6       256.0        222.3

      Reconciliation to income
       from continuing operations
       before income taxes:

      (Gains), losses and
        other expenses, net         1.7     (18.8)      (45.7)       (50.2)
      Restructuring charges         0.1         -        13.3          2.4
      Interest expense, net         0.8       1.0         4.4         15.4
      Other (income) expense, net  (0.5)        -        (0.4)         3.0
                                   47.8      68.4       284.4        251.7

      Less: Realized gains on
       settled futures
       contracts                   13.7       8.0        66.0         16.7

                                  $34.1     $60.4      $218.4       $235.0

    (A) Eliminations consist of intercompany sales between business segments,
        such as products sold to Service Experts by the Residential Heating &
        Cooling segment.

    (B) In the third quarter of 2006, the Company changed its definition of
        segment profit (loss) to include realized gains (losses) on settled
        futures contracts. Realized gains (losses) on settled futures
        contracts are a component of (gains), losses and other expenses, net
        in the accompanying Consolidated Statements of Operations. As a result
        of this change, the Company now defines segment profit (loss) as a
        segment's income (loss) from continuing operations before income taxes
        included in the accompanying Consolidated Statements of Operations;
        excluding (gains), losses and other expenses, net; restructuring
        charges; goodwill impairment; interest expense, net; and other
        (income) expense, net; less (plus) realized gains (losses) on settled
        futures contracts.



                  LENNOX INTERNATIONAL INC. AND SUBSIDIARIES

                         CONSOLIDATED BALANCE SHEETS
                As of December 31, 2006 and December 31, 2005
                (In millions, except share and per share data)

                                                      As of December 31,
                                                       2006          2005
                                                   (unaudited)
                            ASSETS
    CURRENT ASSETS:
      Cash and cash equivalents                      $144.3         $213.5
      Accounts and notes receivable, net              502.6          508.4
      Inventories                                     305.5          242.4
      Deferred income taxes                            22.2           20.3
      Other assets                                     43.8           62.6
         Total current assets                       1,018.4        1,047.2
    PROPERTY, PLANT AND EQUIPMENT, net                288.2          255.7
    GOODWILL                                          239.8          223.9
    DEFERRED INCOME TAXES                             104.3           71.9
    OTHER ASSETS                                       69.1          138.9
         TOTAL ASSETS                              $1,719.8       $1,737.6

            LIABILITIES AND STOCKHOLDERS' EQUITY
    CURRENT LIABILITIES:
      Short-term debt                                  $1.0           $1.2
      Current maturities of long-term debt             11.4           11.3
      Accounts payable                                278.6          296.8
      Accrued expenses                                326.3          321.7
      Income taxes payable                             33.8           24.8
      Liabilities held for sale                           -            0.7
         Total current liabilities                    651.1          656.5
    LONG-TERM DEBT                                     96.8          108.0
    POSTRETIREMENT BENEFITS, OTHER THAN PENSIONS       12.9           15.1
    PENSIONS                                           49.6           80.8
    OTHER LIABILITIES                                 105.0           82.8
         Total liabilities                            915.4          943.2

    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,
       76,974,791 shares and 74,671,494 shares issued
       for 2006 and 2005, respectively                  0.8            0.7
      Additional paid-in capital                      706.6          649.3
      Retained earnings                               312.5          191.0
      Accumulated other comprehensive (loss) income    (5.1)           0.4
      Treasury stock, at cost, 9,818,904 shares and
       3,635,947 for 2006 and 2005, respectively     (210.4)         (47.0)
         Total stockholders' equity                   804.4          794.4
         TOTAL LIABILITIES AND STOCKHOLDERS'
          EQUITY                                   $1,719.8       $1,737.6



                  LENNOX INTERNATIONAL INC. AND SUBSIDIARIES
    Reconciliation to U.S. GAAP (Generally Accepted Accounting Principles)
                                   Measures
          (Unaudited, in millions, except per share and ratio data)

    Reconciliation of net income to adjusted income from continuing operations

                                   For the Three Months Ended December 31,
                                2006    EPS     2005     EPS     2004     EPS
    Net income, as reported   $ 41.1  $ 0.58  $ 41.8   $ 0.55   $ 6.3   $ 0.11
      Loss from discontinued
       operations                  -       -     0.1     0.01    12.8     0.18
    Income from continuing
     operations                 41.1    0.58    41.9     0.56    19.1     0.29
      Goodwill impairment,
       net of income tax           -       -       -        -    (0.3)       -
      (Gains), losses and other
       expenses, net of
       income tax(1)             1.1    0.02   (12.6)   (0.17)      -        -
      Realized gains on
       settled futures
       contracts, net of
       income tax(1)             8.5    0.12     5.1     0.07       -        -
      Revaluation of deferred
       tax asset valuation
       allowances               (3.8)  (0.06)      -        -       -        -
      Release of income tax
       reserves related to
       prior years, net
       (excluding interest)    (14.3)  (0.20)      -        -       -        -
    Adjusted income from
     continuing operations    $ 32.6  $ 0.46  $ 34.4   $ 0.46  $ 18.8   $ 0.29

    (1)(Gains), losses and other expenses, net include the following:


                                              For the Three Months Ended
                                                  December 31, 2006
                                           Pre-tax   Tax(Benefit)  After-tax
                                         (Gain) Loss  Provision   (Gain) Loss
    Realized gains on settled
     futures contracts                     $(13.7)      $5.2         $(8.5)
    Net change in unrealized losses on
     open futures contracts                  15.6       (5.8)          9.8
    Other items, net                         (0.2)         -          (0.2)
    (Gains), losses and other expenses, net  $1.7      $(0.6)         $1.1


                                              For the Three Months Ended
                                                 December 31, 2005
                                           Pre-tax                 After-tax
                                             Gain   Tax Provision     Gain
    Realized gains on settled
     futures contracts                      $(8.0)      $2.9         $(5.1)
    Net change in unrealized gains
     on open futures contracts               (9.3)       3.3          (6.0)
    Other items, net                         (1.5)         -          (1.5)
    (Gains), losses and other
     expenses, net                        $ (18.8)      $6.2        $(12.6)



                                    For the Twelve Months Ended December 31,
                                          2006     EPS        2005     EPS
    Net income, as reported            $ 166.0    $2.26    $ 150.7    $2.11
      Loss from discontinued
       operations                            -        -        1.4     0.02
    Income from continuing
      operations                         166.0     2.26      152.1     2.13
      (Gains), losses and other
       expenses, net of income tax(2)    (28.4)   (0.39)     (34.1)   (0.46)
      Realized gains on settled
       futures contracts, net of
       income tax(2)                      41.2     0.56       10.7     0.14
      Restructuring charges, net of
       income tax                          8.5     0.12        1.6     0.02
      Reversal of valuation allowance
       on deferred tax assets, offset
       by other related charges           (8.9)   (0.12)         -        -
      Revaluation of deferred tax asset
       valuation allowances               (3.8)   (0.05)         -        -
      Release of income tax reserves
       related to prior years, net
       (excluding interest)              (14.3)   (0.20)         -        -
    Adjusted income from continuing
     operations                         $160.3    $2.18     $130.3    $1.83

    (2) (Gains), losses and other expenses, net include the following:


                                             For the Twelve Months Ended
                                                 December 31, 2006
                                           Pre-tax   Tax(Benefit)  After-tax
                                         (Gain) Loss  Provision   (Gain) Loss
    Realized gains on settled
     futures contracts                    $ (66.0)       $24.8      $(41.2)
    Net change in unrealized losses
     on open futures contracts               20.8         (7.7)       13.1
    Other items, net                         (0.5)         0.2        (0.3)
    (Gains), losses and other
     expenses, net                        $ (45.7)       $17.3      $(28.4)


                                             For the Twelve Months Ended
                                                  December 31, 2005
                                           Pre-tax   Tax(Benefit)  After-tax
                                         (Gain) Loss  Provision   (Gain) Loss
    Realized gains on settled
     futures contracts                     $(16.7)        $6.0      $(10.7)
    Net change in unrealized gains
     on open futures contracts              (23.3)         8.4       (14.9)
    Gain on sale of LII's 45% interest
     in its heat transfer joint venture
     to Outokumpu                            (9.3)         2.3        (7.0)
    Estimated on-going remediation costs
     in conjunction with the joint
     remediation agreement LII entered
     into with Outokumpu                      2.2         (0.8)        1.4
    Other items, net                         (3.1)         0.2        (2.9)
    (Gains), losses and other expenses,
     net                                   $(50.2)       $16.1      $(34.1)

Note: Management uses adjusted income from continuing operations, which is not defined by U.S. GAAP, to measure the Company's operating performance and to analyze year-over-year changes in operating income with and without the effects of goodwill impairment, certain (gains), losses and other expenses, net, restructuring charges, the revaluation of deferred tax asset valuation allowances, the reversal of valuation allowance on deferred tax assets, offset by other related charges and the release of income tax reserves related to prior years, net (excluding interest). Management believes that excluding these effects is helpful in assessing the overall performance of the Company.



    Free Cash Flow

                                    For the Three Months For the Twelve Months
                                          Ended                Ended
                                      December 31, 2006    December 31, 2006
    Net cash provided by
     operating activities                  $115.0               $199.7
    Purchase of property,
     plant and equipment                    (24.0)               (73.8)
    Free cash flow                          $91.0               $125.9



    Operational Working Capital - Continuing Operations

                                           December 31,           December 31,
                                               2006                   2005
                               December 31,  Trailing  December 31, Trailing
                                   2006    12 Mo. Avg.    2005     12 Mo. Avg.
    Accounts and Notes
     Receivable, Net              $502.6                 $508.4
       Allowance for Doubtful
        Accounts                    16.7                   16.7
    Accounts and Notes
     Receivable, Gross             519.3     $565.9       525.1      $526.7

    Inventories                    305.5                  242.4
       Excess of current Cost
        Over Last-in, First-out     56.9                   55.1
    Inventories as Adjusted        362.4      397.4       297.5       323.3

    Accounts Payable              (278.6)    (336.6)     (296.8)     (292.9)

    Operating Working Capital (a)  603.1      626.7       525.8       557.1

    Net Sales, Trailing
     Twelve Months (b)           3,671.1    3,671.1     3,366.2     3,366.2

    Operational Working
     Capital Ratio (a/b)            16.4%      17.1%       15.6%       16.5%

Note: Management uses free cash flow and operational working capital, which are not defined by U.S. GAAP, to measure the Company's operating performance. Free cash flow and operational working capital are also two of several measures used to determine incentive compensation for certain employees.



                  LENNOX INTERNATIONAL INC. AND SUBSIDIARIES

              SAB No. 108 Impact on Previously Reported Amounts
                           (Unaudited, in millions)

During the fourth quarter of 2006, the Company adopted Staff Accounting Bulletin No. 108, "Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements" ("SAB No. 108"). In accordance with SAB No. 108, the Company increased net income for the second quarter of 2006 by approximately $4.3 million to reflect understatements in product warranty reserves caused by misstatements that occurred in prior years, primarily for products no longer in production. The resulting adjustments do not affect previously reported cash flows from operations and the impact on prior years' results was concluded to be immaterial. Additionally, the resulting adjustments had no impact on the previously reported June 30, 2006 consolidated balance sheet. The adoption of SAB No. 108 had no impact on the previously reported amounts for three months ended March 31, 2006 and the three months ended September 30, 2006.

    The following provides the impact on previously reported amounts within
the Company's second quarter of 2006 related to the adoption of SFAS No. 108
(amounts in millions):

                                           For the Three Months and
                                                Six Months Ended
                                            June 30, 2006 and for the
                                       Nine Months Ended September 30, 2006
                                                Increase (Decrease)
    Cost of goods sold                                 $(6.8)

    Gross profit                                         6.8

    Operational income                                   6.8

    Income from operations before income taxes           6.8

    Provision for income taxes                           2.5

    Net income                                           4.3



                  LENNOX INTERNATIONAL INC. AND SUBSIDIARIES

                    CONSOLIDATED STATEMENTS OF OPERATIONS
 For the Three Months and Six Months Ended June 30, 2006 and the Nine Months
                           Ended September 30, 2006
               (Unaudited, in millions, except per share data)

                                    For the Three  For the Six   For the Nine
                                     Months Ended  Months Ended  Months Ended
                                       June 30,      June 30,    September 30,
                                         2006          2006          2006
                                       Adjusted      Adjusted      Adjusted
    NET SALES                          $1,002.0      $1,801.5      $2,808.7
    COST OF GOODS SOLD                    679.4       1,225.5       1,921.7
         Gross Profit                     322.6         576.0         887.0
    OPERATING EXPENSES:
      Selling, general and
       administrative expenses            253.5         485.7         740.7
      (Gains), losses and other
       expenses, net                      (27.2)        (45.3)        (47.3)
      Restructuring charges                 2.3           8.6          13.1
      Equity in earnings of
       unconsolidated affiliates           (2.9)         (5.0)         (7.5)
         Operational income                96.9         132.0         188.0
    INTEREST EXPENSE, net                   1.8           2.4           3.6
    OTHER EXPENSE (INCOME), net               -           1.0           0.1
         Income from operations before
          income taxes                     95.1         128.6         184.3
    PROVISION FOR INCOME TAXES             26.8          39.3          59.4
             Net income                   $68.3         $89.3        $124.9

    NET INCOME PER SHARE:
      Basic                               $0.96         $1.25         $1.77
      Diluted                             $0.91         $1.18         $1.67

    AVERAGE SHARES OUTSTANDING:
      Basic                                71.5          71.4          70.7
      Diluted                              75.2          75.4          74.6

    CASH DIVIDENDS DECLARED PER SHARE     $0.11         $0.22         $0.33



                  LENNOX INTERNATIONAL INC. AND SUBSIDIARIES

                    SEGMENT REVENUES AND OPERATING PROFIT
 For the Three Months and Six Months Ended June 30, 2006 and the Nine Months
              Ended September 30, 2006 (Unaudited, in millions)

                                        For the      For the         For the
                                      Three Months  Six Months     Nine Months
                                         Ended        Ended           Ended
                                        June 30,     June 30,    September 30,
                                          2006         2006            2006
                                        Adjusted     Adjusted        Adjusted
    Net Sales
      Residential                        $539.2       $955.6         $1,454.5
      Commercial                          181.1        314.0            533.4
      Service Experts                     177.8        318.8            492.8
      Refrigeration                       129.9        255.7            392.0
      Eliminations (A)                    (26.0)       (42.6)           (64.0)
                                       $1,002.0     $1,801.5         $2,808.7

    Segment Profit (Loss) (B)
      Residential                         $73.1       $115.3           $168.9
      Commercial                           19.4         27.7             53.4
      Service Experts                       9.5          3.3             11.0
      Refrigeration                        14.3         26.4             40.4
      Corporate and other                 (21.0)       (45.1)           (67.9)
      Eliminations (A)                     (0.4)        (0.3)             0.3
                                           94.9        127.3            206.1

    Reconciliation to income from
     operations before income taxes:
        (Gains), losses and other
         expenses, net                    (27.2)       (45.3)           (47.3)
        Restructuring charges               2.3          8.6             13.1
        Interest expense, net               1.8          2.4              3.6
        Other expense (income), net           -          1.0              0.1
                                          118.0        160.6            236.6
    Less: Realized gains on settled
     futures contracts                     22.9         32.0             52.3
                                          $95.1       $128.6           $184.3

    (A) Eliminations consist of intercompany sales between business segments,
        such as products sold to Service Experts by the Residential Heating &
        Cooling segment.

    (B) The Company defines segment profit (loss) as a segment's income (loss)
        from continuing operations before income taxes included in the
        accompanying Consolidated Statements of Operations; excluding (gains),
        losses and other expenses, net; restructuring charges; goodwill
        impairment; interest expense, net; and other (income) expense, net;
        less (plus) realized gains (losses) on settled futures contracts.

There was no impact on the Company's Consolidated Balance Sheets as of June 30, 2006 and September 30, 2006 due to SAB No. 108 adjustments. The following table shows the effects of SAB No. 108 on Retained Earnings (unaudited, in millions):

                                                     June 30,    September 30,
                                                       2006           2006
    Retained earnings, as previously reported         $260.3         $288.3
    Change in net income                                 4.3            4.3
    SAB No. 108 cumulative effect                       (4.3)          (4.3)
    Retained earnings, adjusted                       $260.3         $288.3

SOURCE Lennox International Inc.

CONTACT: Bill Moltner, vice president, investor relations, Lennox International Inc., +1-972-497-6670