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v3.23.1

Reportable Business Segments | 3 Months Ended
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Mar. 31, 2023
Segment Reporting, Measurement Disclosures [Abstract] |
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
Residential |  | Furnaces, air conditioners, heat pumps, packaged heating and cooling systems, indoor air quality equipment, comfort control products, replacement parts and supplies |  | Residential Replacement; Residential New Construction |  | United States Canada
Commercial |  | Unitary heating and air conditioning equipment, applied systems, controls, installation and service of commercial heating and cooling equipment, variable refrigerant flow commercial products, condensing units, unit coolers, fluid coolers, air cooled condensers, air handlers, controls, and compressorized racks |  | Light Commercial; Food Preservation; Non-Food/Industrial |  | United States Canada
Prior to January 1, 2023, we operated in three reportable business segments. In November 2022, we announced the decision to explore strategic alternatives for our European commercial HVAC and refrigeration businesses. We will continue to invest in our Heatcraft Worldwide Refrigeration business which became part of the Commercial segment effective on January 1, 2023 while the European portfolio will be presented with Corporate and Other until disposition. The consolidation of our Heatcraft business within the Commercial segment provides the opportunity to leverage synergies and create long-term growth opportunities by integrating entities with similar products, end consumers and financial performance metrics under the same management. The change in segment reporting better aligns with how the businesses are managed and evaluated given the change in portfolio. See "Recast Segment Results" below for both the previously presented segment results as well as the recast financial information to reflect the change in our segment presentation. 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 income taxes included in the accompanying Consolidated Statements of Operations, excluding certain items. The reconciliation in the table below details the items excluded. Our corporate costs include those costs related to our European operations, as well as our corporate functions such as legal, internal audit, treasury, human resources, tax compliance and senior executive staff. 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. Segment Data Net sales and segment profit (loss) for each segment, along with a reconciliation of segment profit (loss) to Operating income, are shown below (in millions):
| For the Three Months Ended March 31, |  |
| 2023 |  | 2022 (2) |  |  |  |
Net sales |  |  |  |  |  |  |
Residential | $ | 681.0 |  |  | $ | 682.2 |  |  |  |  |
Commercial | 308.7 |  |  | 279.5 |  |  |  |  |
Corporate and other | 59.7 |  |  | 51.7 |  |  |  |  |
| $ | 1,049.4 |  |  | $ | 1,013.4 |  |  |  |  |
Segment profit (loss) (1) |  |  |  |  |  |  |
Residential | $ | 111.1 |  |  | $ | 107.6 |  |  |  |  |
Commercial | 50.0 |  |  | 23.8 |  |  |  |  |
Corporate and other | (19.4) |  |  | (16.8) |  |  |  |  |
Total segment profit | 141.7 |  |  | 114.6 |  |  |  |  |
Reconciliation to Operating income: |  |  |  |  |  |  |
Items in Losses (gains) and other expenses, net that are excluded from segment profit (loss) (1) | 2.2 |  |  | 2.2 |  |  |  |  |
Restructuring charges | — |  |  | 0.5 |  |  |  |  |
Operating income | $ | 139.5 |  |  | $ | 111.9 |  |  |  |  |
(1) We define segment profit (loss) as a segment's operating income included in the accompanying Consolidated Statements of Operations, excluding: ◦The following items in Losses (gains) and other expenses, net: ▪Net change in unrealized gains (losses) on unsettled futures contracts, ▪Environmental liabilities and special litigation charges, ▪Charges incurred related to COVID-19 pandemic, and ▪Other items, net, ◦Restructuring charges. (2) 2022 results have been recast to reflect the realignment of our reportable segments. See Recast Segment Results for further detail. Recast Segment Results The following tables present the previously reported and recast financial results reflecting the change in segment reporting for the fiscal year 2022 and 2021.
|  | Q1 2022 |  | Q2 2022 |  | Q3 2022 |  | Q4 2022 |  | 2022
|  | As Reported |  | As Adjusted |  | As Reported |  | As Adjusted |  | As Reported |  | As Adjusted |  | As Reported |  | As Adjusted |  | As Reported |  | As Adjusted
Residential segment net sales |  | $ | 682.2 |  |  | $ | 682.2 |  |  | $ | 977.5 |  |  | $ | 977.5 |  |  | $ | 835.3 |  |  | $ | 835.3 |  |  | $ | 703.4 |  |  | $ | 703.4 |  |  | $ | 3,198.3 |  |  | $ | 3,198.3 |
Residential segment profit |  | $ | 107.6 |  |  | $ | 107.6 |  |  | $ | 216.3 |  |  | $ | 216.3 |  |  | $ | 153.8 |  |  | $ | 153.8 |  |  | $ | 119.2 |  |  | $ | 119.2 |  |  | $ | 596.9 |  |  | $ | 596.9 |
Commercial segment net sales |  | $ | 187.7 |  |  | $ | 279.5 |  |  | $ | 219.6 |  |  | $ | 327.4 |  |  | $ | 252.9 |  |  | $ | 352.3 |  |  | $ | 240.5 |  |  | $ | 327.2 |  |  | $ | 900.7 |  |  | $ | 1,286.4 |
Commercial segment profit |  | $ | 6.3 |  |  | $ | 23.8 |  |  | $ | 17.2 |  |  | $ | 41.2 |  |  | $ | 29.6 |  |  | $ | 52.4 |  |  | $ | 27.9 |  |  | $ | 45.6 |  |  | $ | 80.9 |  |  | $ | 163.0 |
Refrigeration segment net sales |  | $ | 143.5 |  |  | $ | — |  |  | $ | 169.2 |  |  | $ | — |  |  | $ | 156.7 |  |  | $ | — |  |  | $ | 149.9 |  |  | $ | — |  |  | $ | 619.4 |  |  | $ | — |
Refrigeration segment profit |  | $ | 14.1 |  |  | $ | — |  |  | $ | 23.4 |  |  | $ | — |  |  | $ | 22.4 |  |  | $ | — |  |  | $ | 18.8 |  |  | $ | — |  |  | $ | 78.8 |  |  | $ | — |
Corporate net sales |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Net sales from European operations |  | $ | — |  |  | $ | 51.7 |  |  | $ | — |  |  | $ | 61.4 |  |  | $ | — |  |  | $ | 57.3 |  |  | $ | — |  |  | $ | 63.2 |  |  | $ | — |  |  | $ | 233.7 |
Corporate and other net sales |  | $ | — |  |  | $ | 51.7 |  |  | $ | — |  |  | $ | 61.4 |  |  | $ | — |  |  | $ | 57.3 |  |  | $ | — |  |  | $ | 63.2 |  |  | $ | — |  |  | $ | 233.7 |
Corporate costs |  | $ | (13.4) |  |  | $ | (13.4) |  |  | $ | (27.1) |  |  | $ | (27.1) |  |  | $ | (16.5) |  |  | $ | (16.5) |  |  | $ | (33.7) |  |  | $ | (33.7) |  |  | $ | (90.8) |  |  | $ | (90.8) |
Segment profit from European operations |  | $ | — |  |  | $ | (3.4) |  |  | $ | — |  |  | $ | (0.6) |  |  | $ | — |  |  | $ | (0.4) |  |  | $ | — |  |  | $ | 1.1 |  |  | $ | — |  |  | $ | (3.3) |
Corporate and other segment profit |  | $ | (13.4) |  |  | $ | (16.8) |  |  | $ | (27.1) |  |  | $ | (27.7) |  |  | $ | (16.5) |  |  | $ | (16.9) |  |  | $ | (33.7) |  |  | $ | (32.6) |  |  | $ | (90.8) |  |  | $ | (94.1) |
LII net sales |  | $ | 1,013.4 |  |  | $ | 1,013.4 |  |  | $ | 1,366.3 |  |  | $ | 1,366.3 |  |  | $ | 1,244.9 |  |  | $ | 1,244.9 |  |  | $ | 1,093.8 |  |  | $ | 1,093.8 |  |  | $ | 4,718.4 |  |  | $ | 4,718.4 |
LII total segment profit |  | $ | 114.6 |  |  | $ | 114.6 |  |  | $ | 229.8 |  |  | $ | 229.8 |  |  | $ | 189.3 |  |  | $ | 189.3 |  |  | $ | 132.2 |  |  | $ | 132.2 |  |  | $ | 665.8 |  |  | $ | 665.8 |
|  | Q1 2021 |  | Q2 2021 |  | Q3 2021 |  | Q4 2021 |  | 2021
|  | As Reported |  | As Adjusted |  | As Reported |  | As Adjusted |  | As Reported |  | As Adjusted |  | As Reported |  | As Adjusted |  | As Reported |  | As Adjusted
Residential segment net sales |  | $ | 606.3 |  |  | $ | 606.3 |  |  | $ | 838.0 |  |  | $ | 838.0 |  |  | $ | 711.0 |  |  | $ | 711.0 |  |  | $ | 620.3 |  |  | $ | 620.3 |  |  | $ | 2,775.6 |  |  | $ | 2,775.6 |
Residential segment profit |  | $ | 96.4 |  |  | $ | 96.4 |  |  | $ | 189.7 |  |  | $ | 189.7 |  |  | $ | 144.0 |  |  | $ | 144.0 |  |  | $ | 110.3 |  |  | $ | 110.3 |  |  | $ | 540.3 |  |  | $ | 540.3 |
Commercial segment net sales |  | $ | 199.2 |  |  | $ | 274.8 |  |  | $ | 252.8 |  |  | $ | 335.0 |  |  | $ | 211.5 |  |  | $ | 292.7 |  |  | $ | 201.4 |  |  | $ | 286.3 |  |  | $ | 864.8 |  |  | $ | 1,188.8 |
Commercial segment profit |  | $ | 27.4 |  |  | $ | 39.6 |  |  | $ | 45.3 |  |  | $ | 58.9 |  |  | $ | 22.6 |  |  | $ | 36.3 |  |  | $ | 15.6 |  |  | $ | 29.8 |  |  | $ | 110.9 |  |  | $ | 164.6 |
Refrigeration segment net sales |  | $ | 125.0 |  |  | $ | — |  |  | $ | 148.2 |  |  | $ | — |  |  | $ | 137.4 |  |  | $ | — |  |  | $ | 143.1 |  |  | $ | — |  |  | $ | 553.7 |  |  | $ | — |
Refrigeration segment profit |  | $ | 7.9 |  |  | $ | — |  |  | $ | 13.5 |  |  | $ | — |  |  | $ | 14.5 |  |  | $ | — |  |  | $ | 13.2 |  |  | $ | — |  |  | $ | 49.1 |  |  | $ | — |
Corporate net sales |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Net sales from European operations |  | $ | — |  |  | $ | 49.4 |  |  | $ | — |  |  | $ | 66.0 |  |  | $ | — |  |  | $ | 56.2 |  |  | $ | — |  |  | $ | 58.2 |  |  | $ | — |  |  | $ | 229.7 |
Corporate and other net sales |  | $ | — |  |  | $ | 49.4 |  |  | $ | — |  |  | $ | 66.0 |  |  | $ | — |  |  | $ | 56.2 |  |  | $ | — |  |  | $ | 58.2 |  |  | $ | — |  |  | $ | 229.7 |
Corporate costs |  | $ | (16.0) |  |  | $ | (16.0) |  |  | $ | (26.9) |  |  | $ | (26.9) |  |  | $ | (16.3) |  |  | $ | (16.3) |  |  | $ | (37.2) |  |  | $ | (37.2) |  |  | $ | (96.4) |  |  | $ | (96.4) |
Segment profit from European operations |  | $ | — |  |  | $ | (4.3) |  |  | $ | — |  |  | $ | (0.1) |  |  | $ | — |  |  | $ | 0.8 |  |  | $ | — |  |  | $ | (1.0) |  |  | $ | — |  |  | $ | (4.6) |
Corporate and other segment profit |  | $ | (16.0) |  |  | $ | (20.3) |  |  | $ | (26.9) |  |  | $ | (27.0) |  |  | $ | (16.3) |  |  | $ | (15.5) |  |  | $ | (37.2) |  |  | $ | (38.2) |  |  | $ | (96.4) |  |  | $ | (101.0) |
LII net sales |  | $ | 930.5 |  |  | $ | 930.5 |  |  | $ | 1,239.0 |  |  | $ | 1,239.0 |  |  | $ | 1,059.9 |  |  | $ | 1,059.9 |  |  | $ | 964.8 |  |  | $ | 964.8 |  |  | $ | 4,194.1 |  |  | $ | 4,194.1 |
LII total segment profit |  | $ | 115.7 |  |  | $ | 115.7 |  |  | $ | 221.6 |  |  | $ | 221.6 |  |  | $ | 164.8 |  |  | $ | 164.8 |  |  | $ | 101.9 |  |  | $ | 101.9 |  |  | $ | 603.9 |  |  | $ | 603.9 |

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8924-108599 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8981-108599 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8721-108599 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9031-108599 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (f) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (e) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8844-108599 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9038-108599 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (d) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 22 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8736-108599 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9054-108599 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8657-108599 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8721-108599 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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