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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_________________________________________________

FORM 10-Q

_________________________________________________


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2026


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____to ______

Commission file number 001-15149

_________________________________________________

LENNOX INTERNATIONAL INC.

Incorporated pursuant to the laws of the State of Delaware

_________________________________________________

Internal Revenue Service Employer Identification No. 42-0991521

2140 LAKE PARK BLVD., RICHARDSON, Texas, 75080

(972) 497-5000

_________________________________________________

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, $0.01 par value per share	LII	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company" in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer

☒

Accelerated Filer

☐

Non-Accelerated Filer

☐

Smaller Reporting Company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of April 22, 2026, the number of shares outstanding of the registrant’s common stock, par value $0.01 per share, was 34,799,968.

LENNOX INTERNATIONAL INC.

FORM 10-Q

For the three months ended March 31, 2026

INDEX


		Page
Part I	Financial Information
	Item 1. Financial Statements
	Consolidated Balance Sheets - March 31, 2026 (Unaudited) and December 31, 2025	1
	Consolidated Statements of Operations (Unaudited) - Three Months Ended March 31, 2026 and 2025	2
	Consolidated Statements of Comprehensive Income (Unaudited) - Three Months Ended March 31, 2026 and 2025	3
	Consolidated Statements of Stockholders' Equity (Unaudited) - Three Months Ended March 31, 2026 and 2025	4
	Consolidated Statements of Cash Flows (Unaudited) - Three Months Ended March 31, 2026 and 2025	5
	Notes to Consolidated Financial Statements (Unaudited)	6
	Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	20
	Item 3. Quantitative and Qualitative Disclosures About Market Risk	26
	Item 4. Controls and Procedures	26
Part II	Other Information
	Item 1. Legal Proceedings	27
	Item 1A. Risk Factors	27
	Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	27
	Item 5. Other Information	28
	Item 6. Exhibits	29

Part I - Financial Information

Item 1. Financial Statements

LENNOX INTERNATIONAL INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS


(Amounts in millions, except shares and par values)	As of March 31, 2026		As of December 31, 2025
	(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents	$	48.2	$	34.2
Short-term investments	2.0		0.5
Accounts and notes receivable, net of allowances of $9.1 and $8.5 in 2026 and 2025, respectively	647.9		578.8
Inventories, net	1,209.7		1,152.6

Other current assets	124.3		137.7
Total current assets	2,032.1		1,903.8
Restricted cash equivalents	19.0		18.5
Property, plant and equipment, net of accumulated depreciation of $1,064.3 and $1,043.9 in 2026 and 2025, respectively	917.6		887.2
Right-of-use assets from operating leases	404.4		356.3
Goodwill	503.7		497.2
Intangible assets, net of accumulated amortization of $42.4 and $38.3 in 2026 and 2025, respectively	269.7		273.0
Deferred income taxes	12.6		12.9
Other assets, net	133.6		132.9
Total assets	$	4,292.7	$	4,081.8

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable	$	464.6	$	438.0
Accrued expenses	301.5		374.2
Income taxes payable	63.4		46.4
Commercial paper	361.0		226.0
Current maturities of long-term debt	18.2		18.3
Current operating lease liabilities	83.8		88.9

Total current liabilities	1,292.5		1,191.8
Long-term debt	1,144.1		1,144.1
Long-term operating lease liabilities	347.8		293.4

Pensions	19.4		18.7
Other liabilities	275.0		270.7
Total liabilities	3,078.8		2,918.7
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.01 par value, 25,000,000 shares authorized, no shares issued or outstanding	—		—
Common stock, $0.01 par value, 200,000,000 shares authorized, 87,170,197 shares issued	0.9		0.9
Additional paid-in capital	1,249.7		1,243.0
Retained earnings	4,963.0		4,891.1
Accumulated other comprehensive loss	(48.0)		(48.5)
Treasury stock, at cost, 52,360,280 shares and 52,374,147 shares for 2026 and 2025, respectively	(4,951.7)		(4,923.4)
Total stockholders' equity	1,213.9		1,163.1
Total liabilities and stockholders' equity	$	4,292.7	$	4,081.8

The accompanying notes are an integral part of these consolidated financial statements.

LENNOX INTERNATIONAL INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)


(Amounts in millions, except per share data)	For the Three Months Ended March 31,

	2026		2025
Net sales	$	1,135.1	$	1,072.6
Cost of goods sold	783.8		731.7
Gross profit	351.3		340.9
Operating Expenses:
Selling, general and administrative expenses	185.2		171.3
Losses and other expenses, net	2.2		2.8







Loss (income) from equity method investments	0.4		(1.2)
Operating income	163.5		168.0
Pension settlements	0.5		0.1
Interest expense, net	15.2		6.2
Other expense, net	0.9		0.9
Net income before income taxes	146.9		160.8
Provision for income taxes	29.7		31.2
Net income	$	117.2	$	129.6




Earnings per share – Basic(1):	$	3.37	$	3.65



Earnings per share – Diluted(1):	$	3.35	$	3.63

Weighted Average Number of Shares Outstanding - Basic	34.8		35.5
Weighted Average Number of Shares Outstanding - Diluted	35.0		35.7

(1) Amounts may not recalculate due to rounding.

The accompanying notes are an integral part of these consolidated financial statements.

LENNOX INTERNATIONAL INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)


(Amounts in millions)	For the Three Months Ended March 31,
	2026		2025
Net income	$	117.2	$	129.6
Other comprehensive income (loss):
Foreign currency translation adjustments	(0.7)		4.2

Net change in pension and post-retirement liabilities	(1.0)		(0.2)
Reclassification of pension and post-retirement benefit losses into earnings	0.5		0.4
Pension settlements	0.5		0.1

Net change in fair value of cash flow hedges	12.8		10.7
Reclassification of cash flow hedge gains into earnings	(10.8)		(2.6)
Other comprehensive income before taxes	1.3		12.6
Tax (expense) benefit	(0.8)		0.5
Other comprehensive income, net of tax	0.5		13.1
Comprehensive income	$	117.7	$	142.7

The accompanying notes are an integral part of these consolidated financial statements.

LENNOX INTERNATIONAL INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

For the three months ended March 31, 2026 and 2025

(Unaudited)

(In millions, except per share data)


	Common Stock Issued		Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Treasury Stock at Cost			Total Stockholders' Equity
(For the three months ended March 31, 2026)									Shares	Amount
Balance as of December 31, 2025	$	0.9	$	1,243.0	$	4,891.1	$	(48.5)	52.4	$	(4,923.4)	$	1,163.1

Net income	—		—		117.2		—		—	—		117.2
Dividends, $1.30 per share	—		—		(45.3)		—		—	—		(45.3)
Foreign currency translation adjustments	—		—		—		(0.7)		—	—		(0.7)


Stock-based compensation expense	—		5.8		—		—		—	—		5.8
Purchase of common stock under Employee Stock Purchase Program	—		0.5		—		—		—	—		0.5
Change in cash flow hedges	—		—		—		1.2		—	—		1.2
Treasury shares reissued for common stock	—		0.4		—		—		(0.1)	2.2		2.6
Treasury stock purchases	—		—		—		—		0.1	(30.5)		(30.5)
Balance as of March 31, 2026	$	0.9	$	1,249.7	$	4,963.0	$	(48.0)	52.4	$	(4,951.7)	$	1,213.9


	Common Stock Issued		Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Treasury Stock at Cost			Total Stockholders' Equity
(For the three months ended March 31, 2025)									Shares	Amount
Balance as of December 31, 2024	$	0.9	$	1,213.3	$	4,262.7	$	(93.7)	51.6	$	(4,421.1)	$	962.1

Net income	—		—		129.6		—		—	—		129.6
Dividends, $1.15 per share	—		—		(40.8)		—		—	—		(40.8)
Foreign currency translation adjustments	—		—		—		4.2		—	—		4.2
Pension and post-retirement liability changes	—		—		—		0.2		—	—		0.2

Stock-based compensation expense	—		6.3		—		—		—	—		6.3
Change in cash flow hedges	—		—		—		8.7		—	—		8.7
Treasury shares reissued for common stock	—		(0.6)		—		—		(0.1)	1.7		1.1

Treasury stock purchases	—		—		—		—		0.2	(97.7)		(97.7)

Balance as of March 31, 2025	$	0.9	$	1,219.0	$	4,351.5	$	(80.6)	51.7	$	(4,517.1)	$	973.7

The accompanying notes are an integral part of these consolidated financial statements.

LENNOX INTERNATIONAL INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


(Amounts in millions)	For the Three Months Ended March 31,
	2026		2025
Cash flows from operating activities:
Net income	$	117.2	$	129.6

Adjustments to reconcile net income to net cash provided by (used in) operating activities:





Loss (income) from equity method investments	0.4		(1.2)



Provision for credit losses	2.1		1.3
Unrealized losses (gains), net on derivative contracts	2.1		(0.5)
Stock-based compensation expense	6.3		6.3

Depreciation and amortization	29.2		25.6
Deferred income taxes	3.3		(1.1)
Pension expense	1.0		1.1
Pension contributions	(0.3)		(0.3)

Changes in assets and liabilities, net of effects of acquisitions and divestitures:
Accounts and notes receivable	(73.6)		8.3
Inventories	(62.6)		(209.4)
Other current assets	13.7		(1.7)
Accounts payable	31.0		85.2
Accrued expenses	(74.3)		(105.1)
Income taxes payable and receivable, net	18.8		27.1
Leases, net	1.3		3.4
Other, net	0.5		(4.4)


Net cash provided by (used in) operating activities	16.1		(35.8)
Cash flows from investing activities:
Proceeds from the disposal of property, plant and equipment	0.7		0.5
Purchases of property, plant and equipment	(55.5)		(25.5)

Acquisitions, net of cash	(0.2)		—

(Purchases of) proceeds from investments and other	(1.6)		1.5

Net cash used in investing activities	(56.6)		(23.5)
Cash flows from financing activities:
Commercial paper borrowings	434.1		—
Commercial paper payments	(299.1)		—

Payments on debt arrangements	(5.3)		(5.0)







Proceeds from employee stock purchases	2.6		1.2
Repurchases of common stock	(19.5)		(85.2)
Repurchases of common stock to satisfy employee withholding tax obligations	(10.5)		(11.3)
Cash dividends paid	(45.2)		(40.9)
Net cash provided by (used in) financing activities	57.1		(141.2)
Increase (decrease) in cash, cash equivalents and restricted cash	16.6		(200.5)

Effect of exchange rates on cash, cash equivalents and restricted cash equivalents	(2.1)		2.6
Cash, cash equivalents and restricted cash, beginning of period	52.7		415.1
Cash, cash equivalents and restricted cash, end of period	$	67.2	$	217.2

Supplemental disclosures of cash flow information:
Interest paid	$	23.5	$	19.2
Income taxes paid (net of refunds)	$	7.0	$	5.1

The accompanying notes are an integral part of these consolidated financial statements.

LENNOX INTERNATIONAL INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. General:

References in this Quarterly Report on Form 10-Q to "we","our","us","LII" or the "Company" refer to Lennox International Inc. and its subsidiaries, unless the context requires otherwise.

Basis of Presentation

The accompanying unaudited Consolidated Balance Sheet as of March 31, 2026 and the accompanying unaudited Consolidated Statements of Operations, Comprehensive Income, Stockholders' Equity, and Cash Flows for the three months ended March 31, 2026 and 2025 should be read in conjunction with our audited consolidated financial statements and footnotes included in our Annual Report on Form 10-K for the year ended December 31, 2025.

The unaudited consolidated financial statements for all comparable prior periods presented have been retrospectively adjusted to reflect the prior-year change in method of accounting for certain inventories from last-in-first-out ("LIFO") to first-in, first-out ("FIFO").

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. The accompanying consolidated financial statements contain all material adjustments, consisting principally of normal recurring adjustments, necessary for a fair presentation of our financial position, results of operations and cash flows. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to applicable rules and regulations, although we believe that the disclosures herein are adequate to make the information presented not misleading. The operating results for the interim periods are not necessarily indicative of the results that may be expected for a full year.

Our fiscal quarterly periods are comprised of approximately 13 weeks, but the number of days per quarter may vary year-over-year. Our quarterly reporting periods usually end on the Saturday closest to the last day of March, June, and September. Our fourth quarter and fiscal year ends on December 31, regardless of the day of the week on which December 31 falls. For convenience, the 13-week periods comprising each fiscal quarter are denoted by the last day of the respective calendar quarter.

Use of Estimates

The preparation of financial statements requires us to make estimates and assumptions about future events. These estimates and the underlying assumptions affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities, and reported amounts of revenues and expenses. Such estimates include the valuation of accounts receivable, inventories, goodwill, intangible assets and other long-lived assets, contingencies, guarantee obligations, indemnifications, and assumptions used in the calculation of income taxes, pension and post-retirement medical benefits, self-insurance and warranty reserves, and stock-based compensation, among others. These estimates and assumptions are based on our best estimates and judgment.

We evaluate these estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment. We believe these estimates and assumptions to be reasonable under the circumstances and will adjust such estimates and assumptions when facts and circumstances dictate. Volatile equity, foreign currency and commodity markets combine to increase the uncertainty inherent in such estimates and assumptions. Future events and their effects cannot be determined with precision and actual results could differ significantly from these estimates. Changes in these estimates will be reflected in the financial statements in future periods.

2. Reportable Business Segments:

We operate in two reportable business segments of the heating, ventilation, air conditioning and refrigeration (“HVACR”) industry. Our segments are organized primarily by the nature of the products and services we provide. The following table describes each segment:

Segment

Product or Services

Markets Served

Geographic Areas

Home Comfort Solutions

Furnaces, air conditioners, heat pumps, packaged heating and cooling systems, indoor air quality equipment, comfort control products, replacement parts and supplies

Residential Replacement;
Residential Parts and Supplies;
Residential New Construction

United States
Canada

Building Climate Solutions

Commercial heating, air conditioning and refrigeration systems. Products include rooftop packaged units, variable refrigerant flow systems, heat pumps, air cooled condensing units, air handlers, unit coolers, and process chillers. Services include installation, energy monitoring, service and maintenance, and HVAC recycling.

Light Commercial;
Commercial Parts and Supplies;
Food Preservation

United States
Canada

We use segment profit or loss as the primary measure of profitability to evaluate operating performance and to allocate capital resources. We define segment profit or loss as a segment’s income or loss from continuing operations before interest and income taxes included in the accompanying Consolidated Statements of Operations, excluding certain items. The reconciliation in the table below details the items excluded.

Any intercompany sales and associated profit (and any other intercompany items) are eliminated from segment results. There were no significant intercompany eliminations for the periods presented.

The chief operating decision maker uses segment profit or loss from operations, excluding certain items, to allocate resources (including employees, financial, or capital resources) for each segment predominantly in the annual budget and forecasting process. The chief operating decision maker considers budget-to-actual variances in segment profit or loss on a monthly basis when evaluating segment performance and making decisions about allocating resources to the segments.

Our chief operating decision maker is Alok Maskara, Chief Executive Officer.

Key financial information for each segment is shown below (in millions):


	Home Comfort Solutions		Business Climate Solutions		Total
Three months ended March 31, 2026
Net sales(1)	$	650.0	$	485.1	$	1,135.1
Cost of goods sold	467.8		316.2		784.0
Selling, general and administrative	97.2		74.0		171.2
Other income(2)	(1.5)		(0.7)		(2.2)
Segment profit(3)	$	86.5	$	95.6	$	182.1

Three months ended March 31, 2025
Net sales(1)	$	721.4	$	351.2	$	1,072.6
Cost of goods sold	500.1		231.8		731.9
Selling, general and administrative	98.4		60.4		158.8
Other (income) expense(2)	(1.0)		0.2		(0.8)
Segment profit(3)	$	123.9	$	58.8	$	182.7

(1) On a consolidated basis, no revenue from transactions with a single customer were 10% or greater of our consolidated net sales for any of the periods presented.

(2) Other (income) expense is primarily comprised of income from equity method investments and (gains) losses and other expenses, net.

(3) We define segment profit (loss) as a segment's operating income (loss) included in the accompanying Consolidated Statements of Operations, excluding:

•Restructuring charges, and

•Loss (gain) on sale from previous dispositions.

The reconciliations of segment profit to Operating income and Net income before income taxes are presented below (in millions):


	For the Three Months Ended March 31,
	2026		2025
Total segment profit(1)	$	182.1	$	182.7
Reconciliation to Operating income:

Restructuring charges	—		—
Gain on sale from previous dispositions	—		—




Corporate and other expenses(2)	(18.6)		(14.7)
Operating income	163.5		168.0
Reconciliation to income before income taxes:
Pension settlements	0.5		0.1
Interest expense, net	15.2		6.2
Other expense, net	0.9		0.9
Net income before income taxes	$	146.9	$	160.8

(1) We define segment profit as a segment's operating income (loss) included in the accompanying Consolidated Statements of Operations, excluding:

•Restructuring charges, and

•Loss (gain) on sale from previous dispositions.

(2) Corporate and other expenses include unallocated corporate costs related to corporate administrative functions such as tax, treasury, accounting, internal audit, legal and human resources.

Total assets by segment are shown below (in millions) as of:


	March 31, 2026		December 31, 2025
Total Assets:
Home Comfort Solutions	$	2,078.1	$	1,971.0
Building Climate Solutions	1,795.8		1,746.4
Total assets from reportable segments	$	3,873.9	$	3,717.4
Corporate and Other	418.8		364.4
Total assets	$	4,292.7	$	4,081.8

The assets in the Corporate and Other primarily consist of cash, property, plant and equipment, short-term investments, and deferred tax assets. Assets recorded in the operating segments represent those assets directly associated with those segments.

Total capital expenditures by segment are shown below (in millions):


	For the Three Months Ended March 31,
	2026		2025
Capital Expenditures:
Home Comfort Solutions	$	15.1	$	11.4
Building Climate Solutions	7.5		6.3
Total capital expenditures from reportable segments	$	22.6	$	17.7
Corporate and Other	32.9		7.8
Total capital expenditures	$	55.5	$	25.5

Depreciation and amortization expenses by segment are shown below (in millions):


	For the Three Months Ended March 31,
	2026		2025
Depreciation and Amortization:
Home Comfort Solutions	$	10.7	$	10.4
Building Climate Solutions	11.7		7.9
Total depreciation and amortization from reportable segments	$	22.4	$	18.3
Corporate and Other	6.8		7.3
Total depreciation and amortization	$	29.2	$	25.6

The income from equity method investments is shown below (in millions):


	For the Three Months Ended March 31,
	2026		2025
Income from Equity Method Investments:
Home Comfort Solutions	$	1.1	$	0.7
Building Climate Solutions	0.1		0.4
Total income from equity method investments from reportable segments	$	1.2	$	1.1
Corporate and Other	(1.6)		0.1
Total (loss) income from equity method investments	$	(0.4)	$	1.2

Geographic Information

Property, plant and equipment, net for each major geographic area in which we operate, based on the domicile of our operations, are shown below (in millions) as of:


	March 31, 2026		December 31, 2025
Property, Plant and Equipment, net:
United States	$	639.9	$	607.4
Mexico	267.7		269.2
Canada	4.1		4.2
Other international	5.9		6.4
Total Property, plant and equipment, net	$	917.6	$	887.2

3. Earnings Per Share:

Basic earnings per share are computed by dividing net income by the weighted-average number of common shares outstanding during the period. Diluted earnings per share are computed by dividing net income by the sum of the weighted-average number of shares and the number of equivalent shares assumed outstanding, if dilutive, under our stock-based compensation plans.

The computations of basic and diluted earnings per share were as follows (in millions, except per share data):


	For the Three Months Ended March 31,
	2026		2025
Net income	$	117.2	$	129.6



Weighted-average shares outstanding – basic	34.8		35.5
Add: Potential effect of dilutive securities attributable to stock-based payments	0.2		0.2
Weighted-average shares outstanding – diluted	35.0		35.7




Earnings per share – Basic(1):	$	3.37	$	3.65




Earnings per share – Diluted(1):	$	3.35	$	3.63

(1) Amounts may not recalculate due to rounding.

For the three months ended March 31, 2026 and 2025, there were no material stock appreciation rights or restricted stock units outstanding that were not included in the diluted earnings per share calculation as the assumed exercise of such rights would have been anti-dilutive.

4. Commitments and Contingencies:

Leases

We determine if an arrangement is a lease at inception. Operating leases are included in our Consolidated Balance Sheets as Right-of-use assets from operating leases, Current operating lease liabilities and Long-term operating lease liabilities. Finance leases are included in Property, plant and equipment, Current maturities of long-term debt and Long-term debt in our Consolidated Balance Sheets. We do not recognize a right-of-use asset and lease liability for leases with a term of 12 months or less. We do not separate non-lease components from lease components to which they relate and have accounted for the combined lease and non-lease components as a single lease component.

Many of our lease agreements contain renewal options; however, we do not recognize right-of-use assets or lease liabilities for renewal periods unless it is determined that we are reasonably certain of renewing the lease at inception or when a triggering event occurs. Some of our lease agreements contain rent escalation clauses (including index-based escalations), rent holidays, capital improvement funding or other lease concessions. We recognize our minimum rental expense on a straight-line basis based on the fixed components of a lease arrangement. We amortize this expense over the term of the lease beginning with the date of initial possession. Variable lease components represent amounts that are not fixed in nature and are not tied to an index or rate, and are recognized as incurred. Under certain of our third-party service agreements, we control a specific space or underlying asset used in providing the service by the third-party service provider. These arrangements meet the definition of a lease under ASC 842 and therefore are accounted for under ASC 842.

In determining our right-of-use assets and lease liabilities, we apply a discount rate to the minimum lease payments within each lease agreement. ASC 842 requires us to use the rate of interest that a lessee would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. When we cannot readily determine the discount rate implicit in the lease agreement, we utilize our incremental borrowing rate. To

estimate our specific incremental borrowing rates over various periods (ranging from 1-year through 30-years), a comparable market yield curve consistent with our credit quality was calibrated to our publicly outstanding debt instruments.

We lease certain real and personal property under non-cancelable operating leases. Approximately 84% of our right-of-use assets and lease liabilities relate to our leases of real estate with the remaining amounts primarily relating to our leases of IT equipment, fleet vehicles and manufacturing and distribution equipment.

Product Warranties and Product Related Contingencies

We provide warranties to customers for some of our products and record liabilities for the estimated future warranty-related costs based on failure rates, cost experience and other factors. We periodically review the assumptions used to determine the product warranty liabilities and will adjust the liabilities in future periods for changes in experience, as necessary.

Liabilities for estimated product warranty costs are included in the following captions on the accompanying Consolidated Balance Sheets (in millions) as of:


	March 31, 2026		December 31, 2025
Accrued expenses	$	56.2	$	53.1
Other liabilities	113.1		114.1
Total warranty liability	$	169.3	$	167.2

The changes in product warranty liabilities for the three months ended March 31, 2026 were as follows (in millions):



Total warranty liability as of December 31, 2025	$	167.2
Warranty claims paid	(10.5)
Changes resulting from issuance of new warranties	12.4
Changes in estimates associated with pre-existing liabilities	0.4
Changes in foreign currency translation rates and other	(0.2)

Total warranty liability as of March 31, 2026	$	169.3

Litigation

Antitrust Class Action

On March 20, 2026, seven HVAC equipment manufacturers (and certain of their affiliated companies), including the Company, were named as defendants in a complaint filed in the U.S. District Court for the Eastern District of Michigan on behalf of a putative class that alleges violations of Section 1 of the Sherman Antitrust Act of 1890, as amended, and certain state laws. Additional class action complaints were filed in April 2026 in the same court, based on similar allegations. The cases were consolidated under the caption In re HVAC Equipment Antitrust Litigation, No. 2:26-cv-10949 (E.D. Mich.).

The complaints allege that the defendants conspired to fix, raise, maintain, and/or stabilize prices of HVAC equipment. The alleged class is defined as including all persons who purchased HVAC equipment in the U.S. during the period from January 1, 2020 to the present which was manufactured by one or more defendants for end use in a residential or commercial building. The complaints seek to recover an unspecified amount of damages, injunctive relief, and attorneys’ fees on behalf of the putative class.

The Company disputes these allegations and plans to vigorously defend itself. At this stage of the antitrust litigation, the Company cannot reasonably estimate the range of possible loss, if any, or the timing, outcome, or consequence of this litigation. An adverse outcome in this litigation could have a material adverse impact on the Company’s business, financial position, results of operations, or cash flows.

Other Litigation

We are involved in a number of other claims and lawsuits incidental to the operation of our businesses. Insurance coverages are maintained and estimated costs are recorded for such claims and lawsuits, including costs to settle other claims and lawsuits, based on experience involving similar matters and specific facts known.

It is management's opinion that none of these claims or lawsuits or any threatened litigation will have a material adverse effect on our financial condition, results of operations or cash flows. Claims and lawsuits, however, involve uncertainties and it is possible that their eventual outcome could adversely affect our results of operations for a particular period.

5. Stock Repurchases:

Our Board of Directors has authorized a total of $5.0 billion to repurchase shares of our common stock (collectively referred to as the "Share Repurchase Plans"), including a $1.0 billion share repurchase authorization in May 2025. The Share Repurchase Plans allow us to repurchase shares from time to time in open market transactions and in privately negotiated transactions based on business, market, applicable legal requirements and other considerations. Such repurchases may also be made in compliance with Rule 10b5-1 trading plans entered into by us, which would permit common stock to be repurchased when we might otherwise be precluded from doing so under insider trading laws or self-imposed trading restrictions. The Share Repurchase Plans do not require the repurchase of a specific number of shares and may be terminated at any time. As of March 31, 2026, $989.5 million was available for repurchase under the Share Repurchase Plans.

For the three months ended March 31, 2026, we repurchased 39,000 shares, at an aggregate cost, inclusive of fees, of $20.0 million.

6. Revenue Recognition:

The following table disaggregates our revenue by business segment by geography which provides information as to the major source of revenue. See Note 2 for additional information on our reportable business segments and the products and services sold in each segment.


(Amounts in millions)	For the Three Months Ended March 31, 2026
Primary Geographic Markets	Home Comfort Solutions		Building Climate Solutions		Consolidated
United States	$	604.0	$	446.4	$	1,050.4
Canada	46.0		38.7		84.7

Total	$	650.0	$	485.1	$	1,135.1


	For the Three Months Ended March 31, 2025
Primary Geographic Markets	Home Comfort Solutions		Building Climate Solutions		Consolidated
United States	$	667.8	$	332.6	$	1,000.4
Canada	53.6		18.6		72.2

Total	$	721.4	$	351.2	$	1,072.6

Home Comfort Solutions - We manufacture and market a broad range of furnaces, air conditioners, heat pumps, packaged heating and cooling systems, equipment and accessories to improve indoor air quality, comfort control products, replacement parts and supplies and related products for both the residential replacement and new construction markets in North America. These products are sold under various brand names and are sold either through direct sales to a network of independent installing dealers, including through our network of Lennox stores or to independent distributors. For the three months ended March 31, 2026 and 2025, direct sales represented 75% and 73% of revenues, respectively, and sales to independent distributors represented the remainder. Given the nature of our business, customer product orders are fulfilled at a point in time and not over a period of time.

Building Climate Solutions - In North America, we manufacture and sell unitary heating and cooling equipment used in light commercial applications, such as low-rise office buildings, restaurants, retail centers, churches and schools. These products are distributed primarily through commercial contractors and directly to national account customers in the planned replacement, emergency replacement and new construction markets. We manufacture and market equipment for the commercial refrigeration markets under the Heatcraft Worldwide Refrigeration name. Our products are used in the food retail, food service, cold storage as well as non-food refrigeration markets. We sell these products to distributors, installing contractors, engineering design firms, original equipment manufacturers and end-users. We also provide installation, service and preventive maintenance for HVAC national account customers in the United States and Canada; manufacture curb, curb adapters, drop box diffusers;

offer HVAC recycling and salvage services; and focus on multi-family HVAC replacement for expired mechanical assets. Revenue related to service contracts is recognized as the services are performed under the contract based on the relative fair value of the services provided. For the three months ended March 31, 2026 and 2025, equipment sales represented 83% and 79% of revenues, respectively, and the remainder of our revenue was generated from our service business.

Contract Liabilities - Our contract liabilities consist of advance payments and deferred revenue. Net contract liabilities consisted of the following (in millions) as of:


	March 31, 2026		December 31, 2025
Contract assets	$	2.1	$	1.7
Contract liabilities - current	(10.0)		(10.5)
Contract liabilities - noncurrent	(10.4)		(10.3)
Total	$	(18.3)	$	(19.1)

For the three months ended March 31, 2026 and 2025, we recognized revenue of $0.6 million and $2.3 million related to our contract liabilities at January 1, 2026 and 2025, respectively. Impairment losses recognized in our receivables and contract assets were de minimis in 2026 and 2025.

7. Other Financial Statement Details:

Inventories:

The components of inventories are as follows (in millions) as of:


	March 31, 2026		December 31, 2025
Finished goods	$	742.3	$	719.1
Work in process	7.2		7.5
Raw materials and parts(1)	460.2		426.0


Total inventories, net	$	1,209.7	$	1,152.6

(1) Raw materials and parts includes materials for production and finished goods parts held for sale.

Goodwill:

The changes in the carrying amount of goodwill in 2026, in total and by segment, are summarized in the table below (in millions):


	Balance as of December 31, 2025		Goodwill Adjustment(1)		Balance as of March 31, 2026
Home Comfort Solutions	$	87.0	$	1.6	$	88.6
Building Climate Solutions	410.2		4.9		415.1


Total Goodwill	$	497.2	$	6.5	$	503.7

(1) As discussed in Note 13, an update to our purchase price allocation of Duro Dyne and Supco resulted in a $6.5 million increase in goodwill.

We monitor our reporting units for indicators of impairment throughout the year to determine if a change in facts or circumstances warrants a re-evaluation of our goodwill. We have not recorded any goodwill impairments for the three months ended March 31, 2026 or in any periods presented.

Derivatives:

Objectives and Strategies for Using Derivative Instruments

Commodity Price Risk - We utilize a cash flow hedging program to mitigate our exposure to volatility in the prices of metal commodities used in our production processes. Our hedging program includes the use of futures contracts to lock in prices, and as a result, we are subject to derivative losses should the metal commodity prices decrease and gains should the prices increase. We utilize a dollar cost averaging strategy so that a higher percentage of commodity price exposures are hedged near-term and

lower percentages are hedged at future dates. This strategy allows for protection against near-term price volatility while allowing us to adjust to market price movements over time.

Interest Rate Risk - A portion of our debt may bear interest at variable rates, and as a result, we are subject to variability in the cash paid for interest. To mitigate a portion of that risk, we may choose to engage in an interest rate swap hedging strategy to eliminate the variability of interest payment cash flows. We are not currently hedged against interest rate risk.

Foreign Currency Risk - Foreign currency exchange rate movements create a degree of risk by affecting the U.S. dollar value of assets and liabilities arising in foreign currencies. We seek to mitigate the impact of currency exchange rate movements on certain short-term transactions by periodically entering into foreign currency forward contracts.

Cash Flow Hedges

We have foreign exchange forward contracts and commodity futures contracts designated as cash flow hedges that are scheduled to mature through September 2027. Unrealized gains or losses from our cash flow hedges are included in Accumulated other comprehensive loss (“AOCL”) and are expected to be reclassified into earnings within the next 18 months based on the prices of the commodities and foreign currencies at the settlement dates. We recorded the following amounts in AOCL related to our cash flow hedges (in millions) as of:


	March 31, 2026		December 31, 2025
Unrealized (gains) losses, net on unsettled contracts	$	(25.4)	$	(23.3)
Income tax expense (benefit)	6.3		5.4
Unrealized (gains) losses, net included in AOCL, net of tax (1)	$	(19.1)	$	(17.9)

(1) Assuming commodity prices and foreign currency exchange rates remain constant, we expect to reclassify $17.8 million of derivative gain as of March 31, 2026 into earnings within the next 12 months.

Stock-Based Compensation:

We issue various long-term incentive awards, including performance share units, restricted stock units and stock appreciation rights under the Lennox International Inc. 2019 Equity and Incentive Plan, as it may be amended and restated from time to time. Stock-based compensation expense related to continuing operations is included in Selling, general and administrative expenses in the accompanying Consolidated Statements of Operations as follows (in millions):


	For the Three Months Ended March 31,
	2026		2025
Stock-based compensation expense	$	5.8	$	6.3

Equity awards granted in February 2026 were as follows:


	Shares	Weighted-Average Grant Date Fair Value Per Share
Performance Share Units	22,119	$	474.95
Restricted Stock Units	24,969	$	474.95
Stock Appreciation Rights	48,576	$	133.13

8. Pension Benefit Plans:

The components of net periodic benefit cost for pension benefits were as follows (in millions):


	For the Three Months Ended March 31,
	2026		2025
Service cost	$	0.2	$	0.3
Interest cost	2.0		2.1
Expected return on plan assets	(1.7)		(1.8)

Recognized actuarial loss	0.5		0.4

Settlements and curtailments	0.5		0.1
Net periodic benefit cost	$	1.5	$	1.1

9. Income Taxes:

As of March 31, 2026, we had approximately $5.2 million in total gross unrecognized tax benefits. If recognized, $5.2 million would be recorded through the Consolidated Statements of Operations.

Our effective tax rate was 20.2% for the three months ended March 31, 2026 compared to 19.4% for the three months ended March 31, 2025. The increase in rate is primarily due to income in higher tax jurisdictions.

We are currently under a limited scope audit by the Internal Revenue Service for our 2021 and 2022 tax years. There are also ongoing U.S. state and local audits and other foreign audits covering fiscal years 2019 through 2024. We are generally no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by taxing authorities for years prior to 2019.

10. Lines of Credit and Financing Arrangements:

The following table summarizes our outstanding debt obligations and their classification in the accompanying Consolidated Balance Sheets (in millions) as of:



	March 31, 2026		December 31, 2025

Commercial paper	$	361.0	$	226.0


Current maturities of long-term debt:

Finance lease obligations	$	18.2	$	18.3



Total current maturities of long-term debt	$	18.2	$	18.3
Long-Term Debt:

Finance lease obligations	$	50.1	$	50.6
Term Loan	300.0		300.0
Senior unsecured notes	800.0		800.0
Debt issuance costs	(6.0)		(6.5)
Total long-term debt	$	1,144.1	$	1,144.1
Total debt	$	1,523.3	$	1,388.4

Commercial Paper Program

We utilize a commercial paper program (the “Program”) pursuant to which we may issue short-term, unsecured commercial paper notes (the “CP Notes”) under the exemption from registration contained in Section 4(a)(2) of the Securities Act of 1933, as amended. Amounts available under the Program may be borrowed, repaid, and re-borrowed from time to time, with the aggregate face or principal amount of the CP Notes outstanding under the Program at any time not to exceed $500.0 million. The CP Notes have maturities of up to 397 days from the date of issue and rank pari passu with all of our other unsecured and unsubordinated indebtedness. The net proceeds from issuances of the CP Notes are typically used for general corporate

purposes. Our revolving credit facility serves as a liquidity backstop for the repayment of CP Notes outstanding under the Program. There were $361.0 million CP Notes outstanding under the Program as of March 31, 2026.

Our weighted average borrowing rate on the Program was as follows as of:


	March 31, 2026		December 31, 2025
Weighted average borrowing rate	4.20	%	3.98	%

Long-Term Debt

Term Loan

On October 16, 2025, we entered into a Term Credit Agreement (the “Term Credit Agreement”) with Wells Fargo Bank, National Association, as administrative agent, and the other lenders party thereto. We borrowed $300.0 million pursuant to the Term Credit Agreement and used the net proceeds to repay existing borrowings under the Credit Agreement (as defined below). The Term Credit Agreement matures on October 16, 2027. Loans under the Term Credit Agreement bear interest at our election at a rate per annum equal to (i) a forward-looking term rate based on the secured overnight financing rate for the applicable interest period ("Term SOFR"), plus an applicable margin ranging between 0.90% and 1.025% per annum depending on our long-term unsecured debt rating, or (ii) the highest of the Wells Fargo Bank, National Association prime rate, the Federal Funds rate plus 0.50%, and Term SOFR for a one month tenor in effect on such day plus 1.00%, plus an applicable margin ranging between 0.00% and 0.025% per annum depending on our long-term unsecured debt rating.

The Term Credit Agreement contains customary covenants and events of default that are substantially similar to the existing covenants and events of default in our Credit Agreement.


	March 31, 2026		December 31, 2025
Weighted average borrowing rate	4.60	%	4.90	%

Credit Agreement

On May 9, 2025, we entered into an Amendment and Restatement Agreement (the "Credit Agreement") to our existing unsecured revolving credit facility with JPMorgan Chase Bank, N.A., as administrative agent, and the other lenders party thereto. The Credit Agreement decreased our total revolving commitments from $1.1 billion to $1.0 billion with an option to increase the revolving commitments by up to $350 million at our request, subject to the terms and conditions of the Credit Agreement. The Credit Agreement also extended the maturity date of the revolving commitments from July 2026 to May 2030. We had no outstanding borrowings and no amounts committed to standby letters of credit as of March 31, 2026. Subject to covenant limitations, $639.0 million was available for future borrowings after taking into consideration outstanding borrowings under our Program. Availability under the Credit Agreement is reduced by borrowings under the Program. The Credit Agreement includes a subfacility for swingline loans up to $65.0 million. Maturity of the Credit Agreement may be extended by the lenders pursuant to two one-year extension options that we may request under the Credit Agreement.

Our weighted average borrowing rate on the Credit Agreement was as follows as of:


	March 31, 2026		December 31, 2025
Weighted average borrowing rate	—	%	—	%

The Credit Agreement and the Term Credit Agreement (the "Credit Facilities") are guaranteed by certain of our subsidiaries (the "Guarantor Subsidiaries") and contain customary covenants applicable to us and our subsidiaries including limitations on indebtedness, liens, dividends, stock repurchases, mergers, and sales of all or substantially all of our assets. In addition, the Credit Facilities each contain a financial covenant requiring us to maintain, as of the last day of each fiscal quarter for the four prior fiscal quarters, a Total Net Leverage Ratio of no more than 3.50 to 1.00 (or, at our election, on up to two occasions following a material acquisition, 4.00 to 1.00).

Our Credit Facilities contain customary events of default. These events of default include nonpayment of principal or other amounts, material inaccuracy of representations and warranties, breach of covenants, default on certain other indebtedness or receivables securitizations (cross default), certain voluntary and involuntary bankruptcy events, and the occurrence of a change in control. A cross default under our Credit Facilities could occur if:

•We fail to pay any principal or interest when due on any other indebtedness or receivables securitization exceeding $75.0 million; or

•We are in default in the performance of, or compliance with any term of any other indebtedness in an aggregate principal amount exceeding $75.0 million, or any other condition exists which would give the holders the right to declare such indebtedness due and payable prior to its stated maturity.

Each of our major debt agreements contains provisions by which a default under one agreement causes a default in the others (a cross default). If a cross default under our Credit Facilities or our senior unsecured notes were to occur, it could have a wider impact on our liquidity than might otherwise occur from a default of a single debt instrument or lease commitment.

If any event of default occurs and is continuing, the administrative agent, or lenders with a majority of the aggregate commitments may require the administrative agent to terminate our right to borrow under our Credit Agreement and accelerate amounts due under our Credit Facilities (except for a bankruptcy event of default, in which case such amounts will automatically become due and payable and the lenders’ commitments will automatically terminate).

We are currently in compliance with all covenant requirements.

Senior Unsecured Notes

In September 2023, we issued $500.0 million of senior unsecured notes, which will mature in September 2028 (the "2028 Notes") with interest being paid semi-annually in March and September at 5.50%. In July 2020, we issued $300.0 million of senior unsecured notes, which will mature on August 1, 2027 (the "2027 Notes," and collectively with the 2028 Notes, the "Notes") with interest being paid semi-annually in February and August at 1.70% per annum. On August 1, 2025, we repaid upon maturity $300.0 million of senior unsecured notes originally issued in 2020.

In the event of a credit rating downgrade below investment grade resulting from a change of control, holders of our senior unsecured notes will have the right to require us to repurchase all or a portion of the senior unsecured notes at a repurchase price equal to 101% of the principal amount of the notes, plus accrued and unpaid interest, if any. The Notes are guaranteed, on a senior unsecured basis, by the Guarantor Subsidiaries. The indenture governing the Notes contains covenants that, among other things, limit our ability and the ability of the Guarantor Subsidiaries to: create or incur certain liens; enter into certain sale and leaseback transactions; and enter into certain mergers, consolidations and transfers of substantially all of our assets. The indenture also contains a cross default provision which is triggered if we default on other debt of at least $75.0 million in principal which is then accelerated, and such acceleration is not rescinded within 30 days of the notice date. We are currently in compliance with all covenant requirements.

11. Comprehensive Income (Loss):

The following table provides information on items reclassified from AOCL to Net income in the accompanying Consolidated Statements of Operations (in millions):


	For the Three Months Ended March 31,				Affected Line Item(s) in the Consolidated Statements of Operations
	2026		2025
Gains (Losses) on Cash Flow Hedges:
Derivatives contracts	$	10.8	$	2.6		Cost of goods sold; Losses and other expenses, net
Income tax (expense) benefit	(2.5)		(0.6)			Provision for income taxes
Net of tax	$	8.3	$	2.0

Defined Benefit Plan items:
Pension and post-retirement benefit costs	$	(0.5)	$	(0.4)		Other expense, net
Pension settlements	(0.5)		(0.1)			Pension settlements
Income tax benefit	0.2		0.1			Provision for income taxes
Net of tax	$	(0.7)	$	(0.4)






Total reclassifications from AOCL	$	7.6	$	1.6

The following table provides information on changes in AOCL, by component (net of tax), for the three months ended March 31, 2026 (in millions):


	Gains (Losses) on Cash Flow Hedges		Share of Equity Method Investments Other Comprehensive Income		Defined Benefit Pension Plan Items		Foreign Currency Translation Adjustments		Total AOCL
Balance as of December 31, 2025	$	17.9	$	0.2	$	(46.8)	$	(19.8)	$	(48.5)
Other comprehensive income (loss) before reclassifications	9.5		—		(0.7)		(0.7)		8.1
Amounts reclassified from AOCL	(8.3)		—		0.7		—		(7.6)
Net other comprehensive income (loss)	1.2		—		—		(0.7)		0.5
Balance as of March 31, 2026	$	19.1	$	0.2	$	(46.8)	$	(20.5)	$	(48.0)

12. Fair Value Measurements:

Fair Value Hierarchy

The methodologies used to determine the fair value of our financial assets and liabilities as of March 31, 2026 were the same as those used as of December 31, 2025.

Assets and Liabilities Carried at Fair Value on a Recurring Basis

Derivatives were classified as Level 2 and primarily valued using estimated future cash flows based on observed prices from exchange-traded derivatives. We also considered the counterparty's creditworthiness, or our own creditworthiness, as appropriate. Adjustments were recorded to reflect the risk of credit default, however, they were insignificant to the overall value of the derivatives. Refer to Note 7 for more information related to our derivative instruments.

Other Fair Value Disclosures

The carrying amounts of Cash and cash equivalents, Short-term investments, Accounts and notes receivable, net, Accounts payable, and Short-term debt approximate fair value due to the short maturities of these instruments. The carrying amount of our Credit Facilities and CP Notes in Long-term debt also approximates fair value due to its variable-rate characteristics.

The fair value of our senior unsecured notes in Long-term debt, classified as Level 2, was based on the amount of future cash flows using current market rates for debt instruments of similar maturities and credit risk. The following table presents their fair value (in millions) as of:


	March 31, 2026		December 31, 2025
Senior unsecured notes	$	804.3	$	817.4

13. Prior Year Acquisition:

In October 2025, we completed the acquisition of Duro Dyne and Supco, a robust portfolio of HVAC parts and supplies that complement our existing residential and commercial offerings. Under the terms of the purchase agreement, a final working capital adjustment was completed in the first quarter of 2026. This working capital adjustment resulted in a $2.3 million increase in the purchase price. Additionally, during the first quarter of 2026 we made certain purchase price adjustments. The following table details the purchase price adjustments that were made during the first quarter of 2026 (in millions):


	December 31, 2025		Adjustment		March 31, 2026
Net tangible assets acquired	$	39.1	$	(4.2)	$	34.9
Intangible assets acquired(1)	235.0		—		235.0
Goodwill	277.2		6.5		283.7
Total investment	$	551.3	$	2.3	$	553.6

(1) The intangible assets acquired were estimated using the income approach through a discounted cash flow analysis. The estimates are based on inputs that are not observable in the market, and therefore represent non-recurring Level 3 inputs.

The Company has substantially completed the purchase price allocation for the acquisition of Duro Dyne and Supco. While management believes the allocation reflects its best estimates as of March 31, 2026, the purchase price allocation remains subject to adjustment as additional information becomes available during the measurement period, which may extend up to one year from the acquisition date in accordance with ASC 805.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934 (the "Exchange Act"), as amended, that are based on information currently available to management as well as management’s assumptions and beliefs as of the date such statements were made. All statements, other than statements of historical fact, included in this Quarterly Report on Form 10-Q constitute forward-looking statements, including but not limited to statements identified by forward-looking terminology, such as the words “may,” “will,” “should,” “plan,” “anticipate,” “believe,” “intend,” “estimate,” and “expect” and similar expressions. Such statements reflect our current views with respect to future events, based on what we believe are reasonable assumptions; however, such statements are subject to certain risks and uncertainties.

In addition to the specific uncertainties discussed elsewhere in this Quarterly Report on Form 10-Q, the risk factors set forth in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025, and those set forth in Part II, “Item 1A. Risk Factors” of this report, if any, may affect our performance and results of operations. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may differ materially from those in the forward-looking statements. We disclaim any intention or obligation to update or review any forward-looking statements or information, whether as a result of new information, future events or otherwise, except as required by law.

Business Overview

We operate in two reportable business segments of the HVACR industry, Home Comfort Solutions and Building Climate Solutions. For more detailed information regarding our reportable segments, see Note 2 in the Notes to the Consolidated Financial Statements.

Our fiscal quarterly periods are comprised of approximately 13 weeks, but the number of days per quarter may vary year-over-year. Our quarterly reporting periods usually end on the Saturday closest to the last day of March, June, and September. Our fourth quarter and fiscal year ends on December 31, regardless of the day of the week on which December 31 falls. For convenience, throughout this Management’s Discussion and Analysis of Financial Condition and Results of Operations, the 13-week periods comprising each fiscal quarter are denoted by the last day of the respective calendar quarter.

We sell our products and services through a combination of direct sales, distributors and company-owned stores. The demand for our products and services is seasonal and can be significantly impacted by the weather. Warmer than normal summer temperatures generate demand for replacement air conditioning and refrigeration products and services, and colder than normal winter temperatures have a similar effect on heating products and services. Conversely, cooler than normal summers and warmer than normal winters depress the demand for HVACR products and services. In addition to weather, demand for our products and services is influenced by national and regional economic and demographic factors, such as interest rates, the availability of financing, regional population and employment trends, new construction, general economic conditions, and consumer spending habits and confidence. A substantial portion of the sales in each of our business segments is attributable to replacement business, with the balance comprised of new construction business.

The principal elements of cost of goods sold are components, raw materials, factory overhead, labor, estimated costs of warranty expense, and freight and distribution costs. The principal raw materials used in our manufacturing processes are steel, aluminum and copper. In recent years, pricing volatility for these commodities and related components has impacted us and the HVACR industry in general. We seek to mitigate the impact of certain commodity price volatility and tariffs through a combination of pricing actions, vendor contracts, improved production efficiency, and cost reduction initiatives. We also partially mitigate volatility in the prices of these commodities by entering into futures contracts and fixed forward contracts.

Financial Overview

Results for the first quarter of 2026 were mixed as our Home Comfort Solutions segment faced volume headwinds driven by market softness. Overall our net sales increased 6% and our segment profit was relatively flat as compared to prior year. For our Home Comfort Solutions segment, net sales decreased 10% and segment profit decreased $37 million. For our Building Climate Solutions segment, net sales increased 38% and segment profit increased $37 million.

Financial Highlights

•Net sales of $1,135 million in the first quarter of 2026 reflected a 6% increase as compared to the same period in 2025.

•Operating income in the first quarter of 2026 decreased $5 million to $163 million as lower sales volumes and higher product costs were partially offset by favorable mix and price.

•Net income for the first quarter of 2026 was $117 million.

•Diluted earnings per share was $3.35 per share in the first quarter of 2026 as compared to $3.63 per share in the same period in 2025.

•For the three months ended March 31, 2026, we returned $45 million to shareholders through dividend payments and repurchased $20 million of common stock through our share repurchase program.

Recent Developments

Throughout 2025, the U.S. government implemented new tariff measures under various authorities, including the International Emergency Economic Powers Act ("IEEPA") and Section 232 of the Trade Expansion Act of 1962 (“Section 232”).

In February 2026, the U.S. Supreme Court ruled against tariffs imposed under IEEPA. The ruling did not address refunds of tariffs paid, nor did it repeal Section 232 tariffs on steel and aluminum. Following this ruling, the U.S. presidential administration imposed a temporary surcharge, known as Section 122, which applies a 10 percent global tariff on most imported products. These tariffs apply broadly to manufactured goods and component parts. Section 232 tariffs on steel and aluminum also continued to evolve, with modifications implemented in April 2026. The Company is evaluating the potential impact of all tariff actions on future material costs and sourcing decisions.

Three Months Ended March 31, 2026 Compared to Three Months Ended March 31, 2025 - Consolidated Results

The following table provides a summary of our financial results, including information presented as a percentage of net sales:


	For the Three Months Ended March 31,
	Dollars (in millions)				Percent Change Fav/(Unfav)		Percent of Sales
	2026		2025				2026		2025
Net sales	$	1,135.1	$	1,072.6	5.8	%	100.0	%	100.0	%
Cost of goods sold	783.8		731.7		(7.1)		69.1		68.2
Gross profit	351.3		340.9		3.1		30.9		31.8
Selling, general and administrative expenses	185.2		171.3		(8.1)		16.3		16.0
Losses and other expenses, net	2.2		2.8		21.4		0.2		0.3




Loss (income) from equity method investments	0.4		(1.2)		(133.3)		—		(0.1)
Operating income	$	163.5	$	168.0	(2.7)	%	14.4	%	15.7	%

Net Sales

Net sales for the first quarter of 2026 increased 6% as compared to the same period in 2025 primarily due to a 9% increase from favorable mix and price and a 5% increase in sales volumes from completed acquisitions, which were partially offset by an 8% decrease in sales volumes.

Gross Profit

Gross profit margins in the first quarter of 2026 decreased 90 basis points ("bps") to 30.9% as compared to 31.8% in the same period in 2025. Gross margins decreased 300 bps from higher product costs, primarily related to inflationary impacts and

factory under absorption, and 40 bps from higher freight and distribution inflation and investments, which were partially offset by 250 bps from favorable mix and price.

Selling, General and Administrative Expenses

Selling, general and administrative expenses ("SG&A") increased $14 million to $185 million in the first quarter of 2026 as compared to $171 million in the same period in 2025, primarily attributable to higher discretionary and employee-related costs and the acquisition of Duro Dyne and Supco in the fourth quarter of 2025.

(Gains) losses and Other Expenses, Net

Losses (gains) and other expenses, net for the first quarter of 2026 and 2025 included the following (in millions):


	For the Three Months Ended March 31,
	2026		2025

Foreign currency exchange (gains) losses	$	(0.3)	$	0.8
Gain on disposal of fixed assets	(0.6)		(0.1)


Environmental liabilities and special litigation charges	3.1		2.1


Losses (gains) and other expenses, net (pre-tax)	$	2.2	$	2.8

Income from Equity Method Investments

Investments over which we do not exercise control but have significant influence are accounted for using the equity method of accounting. Income from equity method investments was de minimis in the first quarter of 2026, consistent with 2025.

Interest Expense, net

Interest expense, net increased to $15 million in the first quarter of 2026 from $6 million in the same period in 2025 primarily due to increased borrowings on our commercial paper facility and our term loan agreement entered into in October of 2025.

Income Taxes

Our effective tax rate was 20.2% for the first quarter of 2026 as compared to 19.4% in the same period in 2025. The increase in rate is primarily due to income in higher tax jurisdictions.

First Quarter of 2026 Compared to First Quarter of 2025 - Results by Segment

Home Comfort Solutions

The following table presents our Home Comfort Solutions segment's net sales and profit for the first quarter of 2026 and 2025 (dollars in millions):


	For the Three Months Ended March 31,
	2026			2025			Difference		% Change
Net sales	$	650.0		$	721.4		$	(71.4)	(10)	%
Profit	$	86.5		$	123.9		$	(37.4)	(30)	%
% of net sales	13.3		%	17.2		%

Net sales decreased 10% in the first quarter of 2026 as compared to the same period in 2025 primarily due to a 21% decrease in sales volumes, which was partially offset by a 9% increase from favorable mix and price and a 2% increase in sales volumes from completed acquisitions.

Segment profit in the first quarter of 2026 decreased $37 million as compared to the same period in 2025, primarily due to lower sales volumes, resulting in a $56 million profit headwind, $23 million in product cost inflation and lower factory absorption, and $1 million in other costs. These impacts were partially offset by a $41 million benefit from favorable mix and price and $2 million from completed acquisitions.

Building Climate Solutions

The following table presents our Building Climate Solutions segment's net sales and profit for the first quarter of 2026 and 2025 (dollars in millions):


	For the Three Months Ended March 31,
	2026			2025			Difference		% Change
Net sales	$	485.1		$	351.2		$	133.9	38	%
Profit	$	95.6		$	58.8		$	36.8	63	%
% of net sales	19.7		%	16.7		%

Net sales increased 38% in the first quarter of 2026 as compared to the same period in 2025 primarily due to a 17% increase in sales volumes, a 12% increase in sales volumes from completed acquisitions, and 9% from favorable mix and price.

Segment profit in the first quarter of 2026 increased $37 million as compared to the same period in 2025 primarily due to $24 million profit benefit from higher sales volumes and $22 million increase in favorable mix and price, and $7 million profit benefit from sales volumes from completed acquisitions, which were partially offset by $8 million in product cost inflation and lower factory absorption, and $8 million from other costs.

Liquidity and Capital Resources

Our working capital and capital expenditure requirements are generally met through internally generated funds, bank lines of credit and a commercial paper program (as described below). Working capital needs are generally greater in the first and second quarters due to the seasonal nature of our business cycle.

Statement of Cash Flows

The following table summarizes our cash flow activity for the three months ended March 31, 2026 and 2025 (in millions):


	For the Three Months Ended March 31,
	2026		2025
Net cash provided by (used in) operating activities	$	16.1	$	(35.8)
Net cash used in investing activities	(56.6)		(23.5)
Net cash provided by (used in) financing activities	57.1		(141.2)

Net Cash Provided By (Used In) Operating Activities - The change in net cash provided by operating activities for the three months ended March 31, 2026 compared to the net cash used in operating activities for the same period in 2025 is primarily due to favorable working capital changes.

Net Cash Used In Investing Activities - Capital expenditures were $56 million for the three months ended March 31, 2026 compared to $26 million in the same period of 2025. The increase in capital expenditures was primarily related to land and building purchases.

Net Cash Provided By (Used In) Financing Activities - Net cash provided by financing activities for the three months ended March 31, 2026 increased to $57 million as compared to $141 million used in during the same period of 2025. The change was primarily due to changes in net borrowings and repayments of long-term debt and repurchases of common stock through our share repurchase program. We repurchased $20 million of shares for the three months ended March 31, 2026 and returned $45 million to shareholders through dividend payments.

Debt Position

The following table details our lines of credit and financing arrangements as of March 31, 2026 (in millions):


	Outstanding Borrowings






Commercial paper:	$	361.0

Current maturities of long-term debt:

Finance lease obligations	$	18.2



Total current maturities of long-term debt	$	18.2
Long-term debt:

Finance lease obligations	$	50.1
Term Loan	300.0
Senior unsecured notes	800.0
Debt issuance costs	(6.0)
Total long-term debt	$	1,144.1
Total debt	$	1,523.3

Commercial Paper Program

We utilize a commercial paper program (the "Program") pursuant to which we may issue short-term, unsecured commercial paper notes (the "CP Notes") under the exemption from registration contained in Section 4(a)(2) of the Securities Act of 1933, as amended. Amounts available under the Program may be borrowed, repaid, and re-borrowed from time to time, with the aggregate face or principal amount of the CP Notes outstanding under the Program at any time not to exceed $500.0 million. The CP Notes have maturities of up to 397 days from the date of issue and rank pari passu with all of our other unsecured and unsubordinated indebtedness. The net proceeds from issuances of the CP Notes are typically used for general corporate purposes. Our revolving credit facility serves as a liquidity backstop for the repayment of CP Notes outstanding under the Program. There are $361.0 million CP Notes outstanding under the Program as of March 31, 2026.

Credit Agreement

Term Loan

On October 16, 2025, we entered into a Term Credit Agreement (the “Term Credit Agreement”) with Wells Fargo Bank, National Association, as administrative agent, and the other lenders party thereto. We borrowed $300.0 million pursuant to the Term Credit Agreement and used the net proceeds to repay existing borrowings under the Credit Agreement. The Term Credit Agreement matures on October 16, 2027. Loans under the Term Credit Agreement bear interest at our election at a rate per annum equal to (i) a forward-looking term rate based on the secured overnight financing rate for the applicable interest period ("Term SOFR"), plus an applicable margin ranging between 0.90% and 1.025% per annum depending on our long-term unsecured debt rating, or (ii) the highest of the Wells Fargo Bank, National Association prime rate, the Federal Funds rate plus 0.50%, and Term SOFR for a one month tenor in effect on such day plus 1.00%, plus an applicable margin ranging between 0.00% and 0.025% per annum depending on our long-term unsecured debt rating.

The Term Credit Agreement contains customary covenants and events of default that are substantially similar to the existing covenants and events of default in our Credit Agreement.

Senior Unsecured Notes

In the event of a credit rating downgrade below investment grade resulting from a change of control, holders of our senior unsecured notes will have the right to require us to repurchase all or a portion of the senior unsecured notes at a repurchase price equal to 101% of the principal amount of the notes, plus accrued and unpaid interest, if any. All the Notes are guaranteed, on a senior unsecured basis, by certain of our subsidiaries that guarantee indebtedness under our Credit Agreement (the "Guarantor Subsidiaries"). The indenture governing the Notes contains covenants that, among other things, limit our ability and the ability of the Guarantor Subsidiaries to: create or incur certain liens; enter into certain sale and leaseback transactions; and enter into certain mergers, consolidations and transfers of substantially all of our assets. The indenture also contains a cross default provision which is triggered if we default on other debt of at least $75.0 million in principal which is then accelerated, and such acceleration is not rescinded within 30 days of the notice date. We are currently in compliance with all covenant requirements.

Financial Leverage

We periodically review our capital structure to ensure the appropriate levels of leverage and liquidity. We may access the capital markets, as necessary, based on business needs and to take advantage of favorable interest rate environments or other market conditions. We also evaluate our debt-to-capital and debt-to-EBITDA ratios to determine, among other considerations, the appropriate targets for capital expenditures and share repurchases under our share repurchase programs. Our debt-to-total-capital ratio increased to 56% at March 31, 2026, as compared to 54% at December 31, 2025.

As of March 31, 2026, our senior credit ratings were Baa1 with a stable outlook, and BBB with a stable outlook, by Moody's Investors Service, Inc. ("Moody's") and Standard & Poor's Rating Group ("S&P"), respectively. The security ratings are not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time by the assigning rating agency. Each rating should be evaluated independently of any other rating. Our goal is to maintain investment grade ratings from Moody's and S&P to help ensure the capital markets remain available to us.

Liquidity

We believe our cash and cash equivalents of $48.2 million, future cash generated from operations and available borrowing capacity are sufficient to fund operations, planned capital expenditures, future contractual obligations, potential share repurchases and dividends, and other needs in the foreseeable future. Included in our cash and cash equivalents of $48.2 million as of March 31, 2026 was $19.3 million of cash held in foreign locations. Our cash held in foreign locations is used for investing and operating activities in those locations, and we generally do not have the need or intent to repatriate those funds to the United States. An actual repatriation in the future from our non-U.S. subsidiaries could be subject to foreign withholding taxes and U.S. state taxes.

Guarantees Related to Our Debt Obligations

Our senior unsecured notes were issued by Lennox International Inc. ("Parent") and are unconditionally guaranteed by the Guarantor Subsidiaries (and together with Lennox International Inc., the “Obligor Group”). The Guarantor Subsidiaries are 100% owned and consolidated, all guarantees are full and unconditional, and all guarantees are joint and several.

Summarized financial information is presented below for the Obligor Group on a combined basis after elimination of intercompany transactions and balances within the Obligor Group and equity in the earnings from and investments in any non-Guarantor Subsidiary. The revenue amounts presented in the summarized financial information include substantially all of our condensed consolidated revenue, and there is no intercompany revenue from the non-Guarantor Subsidiaries. This summarized financial information has been prepared and presented pursuant to Regulation S-X Rule 13-01, “Financial Disclosures about Guarantors and Issuers of Guaranteed Securities” and is not intended to present the financial position or results of operations of the Obligor Group in accordance with U.S. GAAP.

The following combined Parent and Guarantor Subsidiaries financial information is presented as of March 31, 2026 and December 31, 2025 and for the three months ended March 31, 2026 (in millions):


	March 31, 2026		December 31, 2025
Current assets	$	1,853.5	$	1,676.4
Non-current assets	1,912.0		1,824.9
Current liabilities	1,111.6		1,000.7
Non-current liabilities	1,751.1		1,689.4
Amounts due to non-Guarantor Subsidiaries	(522.1)		(463.7)

	Three months ended March 31, 2026		For the Year Ended December 31, 2025
Net sales	$	1,050.5	$	5,113.8
Gross profit	326.3		1,324.4
Net income	53.6		406.3

Off Balance Sheet Arrangements

We have no off-balance sheet arrangements that we believe may have a material current or future effect on our financial condition, liquidity or results of operations.

Commitments, Contingencies, and Guarantees

For information regarding our commitments, contingencies, and guarantees, see Note 4 in the Notes to the Consolidated Financial Statements.

Recent Accounting Pronouncements

There were no recent accounting pronouncements that are expected to have a material impact on our financial statements and disclosures.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

For quantitative and qualitative disclosures about market risk affecting LII, see "Quantitative and Qualitative Disclosures About Market Risk" in Item 7A of Part II of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025. Our exposure to market risk has not changed materially since December 31, 2025.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

As required by Rule 13a-15 under the Exchange Act, we carried out an evaluation, under the supervision and with the participation of our current management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that, as of March 31, 2026, our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the applicable rules and forms, and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Part II - Other Information

Item 1. Legal Proceedings

Antitrust Class Actions

Other Claims

We are involved in a number of other claims and lawsuits incidental to the operation of our businesses. Where appropriate, insurance coverages are maintained and estimated costs are recorded for such claims and lawsuits. It is management's opinion that none of these other claims or lawsuits will have a material adverse effect, individually or in the aggregate, on our financial position, results of operations or cash flows.

Item 1A. Risk Factors

In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the risk factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025, which could materially affect our business, financial condition or results of operations. There have been no material changes to our risk factors from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

In the first quarter of 2026, we purchased shares of our common stock as follows:


	Total Number of Shares Purchased	Average Price Paid per Share (including fees)		Total Number of Shares Purchased As Part of Publicly Announced Plans	Approximate Dollar Value of Shares that may yet be Purchased under our Share Repurchase Plans (in millions) (1)


January 1 through January 31	1,000	$	530.88	1,000	$	1,009.0
February 1 through February 28	14,000	$	552.69	14,000	$	1,001.3
March 1 through March 31	24,000	$	490.41	24,000	$	989.5
	39,000			39,000

(1) Since the inception of the Company’s share repurchase program in 2008, the Board has authorized share repurchases in an amount not to exceed $5.0 billion (the "Share Repurchase Plans"). The Share Repurchase Plans do not have an expiration date. See Note 5 in the Notes to the Consolidated Financial Statements for further details.

Item 5. Other Information

Rule 10b5-1 Plan Elections

Sivasankaran Somasundaram, a director, adopted a non-Rule 10b5-1 trading arrangement on February 11, 2026, pursuant to which he elected to receive all of his director retainer to be paid between July 1, 2026 and June 30, 2027 in shares of the Company's common stock. The amount of shares to be awarded will be determined based on the closing price of the Company's common stock on the second Friday of each quarter during the payment period. This trading plan was entered into during an open insider trading window and is intended to satisfy the affirmative defense of Rule 10b5-1(c) under the Exchange Act and the Company's policies regarding transactions in the Company's securities.

Item 6. Exhibits


3.1			Restated Certificate of Incorporation of Lennox International Inc. (“LII”) (filed as Exhibit 3.1 to LII's Annual Report on Form 10-K filed on February 15, 2022 and incorporated herein by reference).
3.2			Amended and Restated Bylaws of LII (filed as Exhibit 3.2 to LII's Annual Report on Form 10-K filed on February 15, 2022 and incorporated herein by reference).
4.1			Indenture, dated as of May 3, 2010, between LII and U.S. Bank National Association, as trustee (filed as Exhibit 4.3 to LII’s Post-Effective Amendment No. 1 to Registration Statement on S-3 filed on May 3, 2010 and incorporated herein by reference).
4.2			Ninth Supplemental Indenture, dated as of July 30, 2020, among LII, each existing Guarantor under the Indenture, dated as of May 3, 2010, as subsequently supplemented, and U.S. Bank National Association, as trustee (filed as Exhibit 4.2 to LII’s Current Report on Form 8-K filed on July 30, 2020 and incorporated herein by reference).
4.3			Form of 1.700% Notes due 2027 (filed as Exhibit B in Exhibit 4.2 to LII’s Current Report on Form 8-K filed on July 30, 2020 and incorporated herein by reference).
4.4			Tenth Supplemental Indenture, dated as of July 14, 2021, among LII, each existing Guarantor under the Indenture, dated as of May 3, 2010, as subsequently supplemented, and U.S. Bank National Association, as trustee (filed as Exhibit 4.7 to LII's Annual Report on Form 10-K filed on February 15, 2022 and incorporated herein by reference).
4.5			Eleventh Supplemental Indenture, dated as of September 15, 2023, among LII, the guarantors party thereto and U.S. Bank Trust Company, National Association, as trustee (filed as Exhibit 4.2 to LII's Current Report on Form 8-K filed on September 15, 2023 and incorporated herein by reference).
4.6			Form of 5.500% Notes due 2028 (filed as Exhibit A in Exhibit 4.2 to LII's Current Report on Form 8-K filed on September 15, 2023 and incorporated herein by reference).
22.1			List of Guarantor Subsidiaries (filed as Exhibit 22.1 to LII’s Quarterly Report on Form 10-Q filed on October 22, 2025 and incorporated herein by reference).
31.1			Certification of the principal executive officer (filed herewith).
31.2			Certification of the principal financial officer (filed herewith).
32.1			Certification of the principal executive officer and the principal financial officer pursuant to 18 U.S.C. Section 1350 (furnished herewith).
101			INS Inline XBRL Instance Document
101			SCH Inline XBRL Taxonomy Extension Schema Document
101			CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document
101			LAB Inline XBRL Taxonomy Extension Label Linkbase Document
101			PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document
101			DEF Inline XBRL Taxonomy Extension Definition Linkbase Document
104			Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

LENNOX INTERNATIONAL INC.

By: /s/ Michael P. Quenzer

Michael P. Quenzer

Chief Financial Officer

(on behalf of registrant and as principal financial officer)

Date: April 29, 2026

LENNOX INTERNATIONAL INC 10-Q