Release Details

LENNOX INTERNATIONAL INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited, in millions, except per share data)

For the Three Months
Ended March 31,

2011

2010

NET SALES

$

687.8

$

644.1

COST OF GOODS SOLD

522.6

469.8

Gross profit

165.2

174.3

OPERATING EXPENSES:

Selling, general and administrative expenses

173.9

168.9

Gains and other expenses, net

(0.3)

(0.3)

Restructuring charges

1.2

7.2

Income from equity method investments

(2.6)

(2.0)

Operational (loss) income from continuing operations

(7.0)

0.5

INTEREST EXPENSE, net

4.1

2.5

Loss from continuing operations before income taxes

(11.1)

(2.0)

BENEFIT FROM INCOME TAXES

(3.9)

(0.7)

Loss from continuing operations

(7.2)

(1.3)

DISCONTINUED OPERATIONS:

Operational loss from discontinued operations

-

0.4

Income tax benefit

-

(0.1)

Loss from discontinued operations

-

0.3

Net loss

$

(7.2)

$

(1.6)

LOSS PER SHARE - BASIC AND DILUTED:

Loss from continuing operations

$

(0.13)

$

(0.02)

Loss from discontinued operations

-

(0.01)

Net loss

$

(0.13)

$

(0.03)

AVERAGE SHARES OUTSTANDING - BASIC AND DILUTED

53.6

56.0

CASH DIVIDENDS DECLARED PER SHARE

$

0.18

$

0.15

LENNOX INTERNATIONAL INC. AND SUBSIDIARIES

SEGMENT NET SALES AND (LOSS) PROFIT

(Unaudited, in millions)

For the Three Months
Ended March 31,

2011

2010

Net Sales

Residential Heating & Cooling

$

272.0

$

284.2

Commercial Heating & Cooling

138.8

119.7

Service Experts

116.5

127.1

Refrigeration

175.1

131.4

Eliminations (A)

(14.6)

(18.3)

$

687.8

$

644.1

Segment (Loss) Profit (B)

Residential Heating & Cooling

$

(1.2)

$

7.1

Commercial Heating & Cooling

5.9

3.4

Service Experts

(8.2)

(4.6)

Refrigeration

13.5

14.9

Corporate and other

(14.5)

(13.2)

Eliminations (A)

(0.4)

0.2

Subtotal that includes segment (loss) profit and eliminations

(4.9)

7.8

Reconciliation to loss from continuing operations before income taxes:

Items in gains and other expenses, net that are excluded from segment (loss) profit (C)

0.9

0.1

Restructuring charges

1.2

7.2

Interest expense, net

4.1

2.5

Loss from continuing operations before income taxes

$

(11.1)

$

(2.0)

(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 and lossas a segment's income or lossfrom continuing operations before income taxes included in the accompanying Consolidated Statements of Operations:

Excluding:

o Special product quality adjustment.

o Items within Gains and/or losses and other expenses, net that are noted in (C) .

o Restructuring charges.

o Goodwill and equity method investment impairments.

o Interest expense, net.

o Other expense, net.

(C) Items in Gains and/or losses and other expenses, net that are excluded from segment profit or loss are net change in unrealized gains and/or losses on open future contracts, discount fee on accounts sold, realized gains and/or losses on marketable securities, special legal contingency charge, and other items.

LENNOX INTERNATIONAL INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In millions, except share and per share data)

As of
March 31,
2011

As of
December 31,
2010

(unaudited)

ASSETS

CURRENT ASSETS:

Cash and cash equivalents

$

55.2

$

160.0

Restricted cash

10.5

12.2

Accounts and notes receivable, net of allowances of $16.4
and $12.8 in 2011 and 2010, respectively

404.6

384.8

Inventories, net

453.2

286.2

Deferred income taxes

41.2

36.7

Other assets

82.3

67.0

Total current assets

1,047.0

946.9

PROPERTY, PLANT AND EQUIPMENT, net of accumulated
depreciation of $596.3 and $584.7 in 2011 and 2010, respectively

348.4

324.3

GOODWILL

321.3

271.8

DEFERRED INCOME TAXES

88.6

87.2

OTHER ASSETS, net

95.1

61.8

TOTAL ASSETS

$

1,900.4

$

1,692.0

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:

Short-term debt

$

2.7

$

1.4

Asset securitization borrowings

50.0

-

Current maturities of long-term debt

0.4

0.6

Accounts payable

340.8

273.8

Accrued expenses

281.8

334.5

Income taxes payable

0.9

5.3

Total current liabilities

676.6

615.6

LONG-TERM DEBT

488.5

317.0

POSTRETIREMENT BENEFITS, OTHER THAN PENSIONS

15.8

15.9

PENSIONS

88.7

88.1

OTHER LIABILITIES

64.4

65.7

Total liabilities

1,334.0

1,102.3

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,
86,594,374 shares and 86,480,816 shares issued for 2011 and
2010, respectively

0.9

0.9

Additional paid-in capital

870.6

863.5

Retained earnings

625.4

642.2

Accumulated other comprehensive income

41.4

30.2

Treasury stock, at cost, 33,274,352 shares and 32,784,503
shares for 2011 and 2010, respectively

(971.9)

(947.1)

Total stockholders' equity

566.4

589.7

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

1,900.4

$

1,692.0

LENNOX INTERNATIONAL INC. AND SUBSIDIARIES

Reconciliation to U.S. GAAP (Generally Accepted Accounting Principles) Measures

(Unaudited, in millions, except per share, ratio, sales growth rate and margin 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. 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 Loss From Continuing Operations, a GAAP measure, to Adjusted (Loss) Income From Continuing Operations, a Non-GAAP measure

For The Three Months

Ended March 31,

2011

2010

Loss from continuing operations, a GAAP measure

$ (7.2)

$ (1.3)

Restructuring charges, after tax

0.8

4.6

Net change in unrealized losses on open future contracts, after tax (a)

0.5

-

Acquisition expenses, after-tax (a)

0.1

-

Other items, net, after tax (a)

-

0.1

Adjusted (loss) income from continuing operations, a non-GAAP measure

$ (5.8)

$ 3.4

Loss per share from continuing operations - basic and diluted, a GAAP measure

$ (0.13)

$ (0.02)

Restructuring charges

0.01

0.08

Net change in unrealized losses on open future contracts (a)

0.01

-

Adjusted (loss) earnings per share from continuing operations - basic and diluted, a non-GAAP measure

$ (0.11)

$ 0.06

(a) Recorded in Gains and other expenses, net in the Consolidated Statements of Operations

For The Three Months

Ended March 31,

Components of Gains and other expenses, net (pre-tax):

2011

2010

Realized gains on settled future contracts (a)

$ (0.6)

$ (0.4)

Foreign currency exchange loss (gain) (a)

0.1

(0.1)

(Gain) loss on disposal of fixed assets (a)

(0.7)

0.1

Net change in unrealized losses on open futures contracts (b)

0.7

-

Acquisition expenses (b)

0.2

-

Gain on sale of entity (b)

-

(0.1)

Other items, net (b)

-

0.2

Gains and other expenses, net (pre-tax)

$ (0.3)

$ (0.3)

(a) Included in segment (loss) profit and adjusted (loss) income from continuing operations

(b) Excluded from segment (loss) profit and adjusted (loss) income from continuing operations

Reconciliation of Estimated Adjusted Income per Share from Continuing Operations - Diluted, a Non-GAAP Measure, to

Income per Share from Continuing Operations - Diluted, a GAAP Measure

For the

Year Ended

December 31,

2011

ESTIMATED

Adjusted income per share from continuing operations - diluted, a Non-GAAP measure

$2.80 - $3.10

Restructuring charges

(0.05)

Income per share from continuing operations - diluted, a GAAP measure

$2.75 - $3.05

Reconciliation of Net Cash Used in Operating Activities, a GAAP Measure, to Free Cash Flow, a Non-GAAP Measure

For the Three Months

Ended March 31,

2011

2010

Net cash used in operating activities, a GAAP measure

$ (148.3)

$ (40.3)

Purchase of property, plant and equipment

(8.2)

(10.7)

Free cash flow, a Non-GAAP measure

$ (156.5)

$ (51.0)

Calculation of Debt to EBITDA Ratio:

Trailing

Twelve

Months to

March 31,

2011

EBIT (a)

$ 204.3

Depreciation and amortization expense (b)

55.4

EBITDA (a + b)

$ 259.7

Total debt at March 31, 2011 (c)

$ 541.6

Total debt to EBITDA ratio ((c / (a + b))

2.1

Reconciliation of EBIT, a Non-GAAP Measure, to Income From Continuing Operations Before Income Taxes, a GAAP

measure

Trailing

Twelve

Months to

March 31,

2011

EBIT per above, a Non-GAAP measure

$ 204.3

Special product quality adjustment

(0.2)

Items in gains and other expenses, net that are excluded from segment profit

12.0

Restructuring charges

9.6

Other expenses, net

1.0

Interest expense, net

14.4

Income from continuing operations before income taxes, a GAAP measure

$ 167.5

Reconciliation of Reported Revenue Growth, a GAAP measure, to Organic Revenue Growth, a non-GAAP measure

Translational

Net Sales

Net Sales

Currency

Growth %

For The Three Months

Net

Net

Impact

Excluding

Ended March 31,

Sales

Sales

Favorable

Currency

2011

2010

Variance

Growth %

(Unfavorable)

Impact

Lennox International Inc. and Subsidiaries

Net Sales, as reported - a GAAP measure

$ 687.8

$ 644.1

$ 43.7

6.8%

$ 10.0

5.2%

Less: Kysor/Warren acquisition

(34.0)

-

(34.0)

(0.4)

Net Sales, organic - a non-GAAP measure

$ 653.8

$ 644.1

$ 9.7

1.5%

$ 9.6

0.0%

Refrigeration Segment

Net Sales, as reported - a GAAP measure

$ 175.1

$ 131.4

$ 43.7

33.3%

$ 6.3

28.5%

Less: Kysor/Warren acquisition

(34.0)

-

(34.0)

(0.4)

Net Sales, organic - a non-GAAP measure

$ 141.1

$ 131.4

$ 9.7

7.4%

$ 5.9

2.9%

Reconciliation of Reported Refrigeration Segment Profit Margin to Organic Segment Profit Margin

For the Three Months Ended

March 31, 2011

For the Three Months Ended

March 31, 2010

Segment

Segment

Net

Segment

Profit

Net

Segment

Profit

Sales

Profit

Margin

Sales

Profit

Margin

Refrigeration Segment, as reported

$ 175.1

$ 13.5

7.7%

$ 131.4

$ 14.9

11.3%

Less: Kysor/Warren acquisition

(34.0)

1.5

4.4%

-

-

-

Refrigeration Segment, organic

$ 141.1

$ 15.0

10.6%

$ 131.4

$ 14.9

11.3%

Reconciliation of Operational Working Capital, a Non-GAAP Measure, to GAAP Balance Sheet Line Items

March 31,

March 31,

2011

2010

March 31,

Trailing

March 31,

Trailing

2011 (c)

12 Mo. Avg. (c)

2010

12 Mo. Avg.

Accounts and Notes Receivable, Net

$ 370.9

$ 349.5

Allowance for Doubtful Accounts

13.7

15.7

Accounts and Notes Receivable, Gross

384.6

$ 412.4

365.2

$ 404.6

Inventories

418.9

326.4

Excess of Current Cost Over Last-in,

First-out

70.9

71.7

Inventories as Adjusted

489.8

419.4

398.1

358.1

Accounts Payable

(321.8)

(288.5)

(286.1)

(259.5)

Operating Working Capital (a)

552.6

543.3

477.2

503.2

Net Sales, Trailing Twelve Months (b)

3,106.1

3,106.1

2,911.0

2,911.0

Operational Working Capital Ratio (a / b)

17.8%

17.5%

16.4%

17.3%

(c) Excludes the impact of the Kysor/Warren acquisition completed in January 2011. Including the impact of the Kysor/Warren

acquisition to the March 31, 2011 operational working capital items above would increase Accounts and Notes Receivable,

Gross from $384.6 to $421.0, Inventories as Adjusted from $489.8 to $524.1 and Accounts Payable from $(321.8) to $(340.8).

Net Sales, Trailing Twelve Months would increase $34.0 (representing approximately two and a half months of Net Sales)

to $3,140.1 resulting in an Operational Working Capital Ratio of 19.2%.