Financial Analysis

17. Acquisitions: Duro Dyne and Supco In October 2025, we acquired 100% of the outstanding shares of common stock in Duro Dyne and Supco, a robust portfolio of HVAC parts and supplies that complement our existing residential and commercial offerings. Excluding cash received at the closing, the total cash consideration paid was $545.0 million, which was primarily funded by cash and borrowings under our financing arrangements. The purchase price was allocated to the assets acquired and liabilities assumed based on managements estimate of their respective fair values at the date of acquisition. Goodwill was calculated as the excess of the consideration transferred over the net assets recognized and represents the estimated future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. The factors contributing to the recognition of goodwill were the assembled workforce and strategic benefits that are expected to be realized from the acquisition. The purchase price allocation is preliminary and subject to revision as additional information about the fair value of assets acquired and liabilities assumed becomes available. Under the terms of the purchase agreement, a final working capital adjustment is due in the first quarter of 2026. The preliminary allocation of the purchase price as of the acquisition date was as follows: (Amounts in millions) Amount Total consideration paid $ 551.3 Cash and cash equivalents 6.3 A …

BusinessCombinationDisclosureTextBlock · excerpt; the full note is in the filing

Leases We lease certain real and personal property under non-cancelable leases. Approximately 81% of our right-of-use assets and lease liabilities relate to our leases of real estate with the remaining amounts relating to our leases of IT equipment, fleet vehicles and manufacturing and distribution equipment. The components of lease expense were as follows (in millions): For the Years Ended December 31, 2025 2024 2023 Finance lease cost: Amortization of right-of-use assets $ 19.3 $ 15.4 $ 14.5 Interest on lease liabilities 2.9 2.7 1.7 Operating lease cost 96.1 83.3 74.1 Short-term lease cost 6.4 5.0 5.3 Variable lease cost 31.0 27.6 26.8 Total lease cost $ 155.7 $ 134.0 $ 122.4 Other information Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 90.6 $ 76.6 $ 70.5 Financing cash flows from finance leases $ 21.8 $ 17.3 $ 15.8 Right-of-use assets obtained in exchange for new finance lease liabilities $ 36.2 $ 26.1 $ 21.3 Right-of-use assets obtained in exchange for new operating lease liabilities $ 107.7 $ 177.1 $ 56.4 As of December 31, 2025 2024 Finance lease right-of-use assets (1) $ 62.1 $ 48.1 Operating lease right-of-use assets $ 356.3 $ 327.2 Finance lease liability, current (2) $ 18.3 $ 14.9 Finance lease liability, non-current (3) $ 50.6 $ 39.5 Operating lease liability, current $ 88.9 $ 73.4 Operating lease liability, non-current $ 293.4 $ 267.6 Weighted-average remaining lease term finance leases 3.3 y …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

"13. Lines of Credit and Financing Arrangements: The following tables summarize our outstanding debt obligations and their classification in the accompanying Consolidated Balance Sheets (in millions): As of December 31, 2025 2024 Commercial paper: $ 226.0 $ Current maturities of long-term debt: Finance lease obligations $ 18.3 $ 14.9 Senior unsecured notes 300.0 Debt issuance costs (0.4) Total current maturities of long-term debt $ 18.3 $ 314.5 Long-Term Debt: Finance lease obligations 50.6 39.5 Term loan 300.0 Senior unsecured notes 800.0 800.0 Debt issuance costs (6.5) (6.4) Total long-term debt $ 1,144.1 $ 833.1 Total debt $ 1,388.4 $ 1,147.6 As of December 31, 2025, the aggregate amounts of required principal payments on total debt excluding finance lease obligations (see Note 5) were as follows (in millions): 2026 $ 2027 600.0 2028 500.0 Thereafter Commercial Paper Program On October 25, 2023, we established 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. 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 a …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

15. Stock-Based Compensation: Stock-based compensation expense was included in Selling, general and administrative expenses in the accompanying Consolidated Statements of Operations as follows (in millions): For the Years Ended December 31, 2025 2024 2023 Compensation expense $ 28.4 $ 28.5 $ 30.1 Incentive Plan Under the Lennox International Inc. 2019 Equity and Incentive Compensation Plan, we are authorized to issue awards for 1.7 million shares of common stock. The plan provides for various long-term incentive awards, including performance share units, restricted stock units and stock appreciation rights. A description of these long-term incentive awards and related activity within each award category is provided below. As of December 31, 2025, there were 1.6 million shares available for future issuance. Historically our annual equity awards were granted in December. In 2023, we made the decision to move the annual grant for 2023 to February 2024. Thus, there were no equity grants in 2023. We also made the decision to award the Board of Directors fully vested shares on an annual basis. As a result, approximately $1.1 million and $1.3 million of compensation expense was recognized in 2025 for the 2025 director grant and in 2024 for the 2024 director grant, respectively. Performance Share Units Performance share units are granted to certain employees at the discretion of the Board of Directors with a three-year performance period beginning January 1 st of each year. Upon meet …

DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock · excerpt; the full note is in the filing

16. Fair Value Measurements: Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date and requires consideration of our creditworthiness when valuing certain liabilities. Our framework for measuring fair value is based on the following three-level hierarchy for fair value measurements: Level 1 - Quoted prices for identical instruments in active markets at the measurement date. Level 2 - Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets at the measurement date and for the anticipated term of the instrument. Level 3 - Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable inputs that reflect the reporting entitys own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. Where available, the fair values were based upon quoted prices in active markets. However, if quoted prices were not available, then the fair values were based upon quoted prices …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

Goodwill The changes in the carrying amount of goodwill in 2025 and 2024, in total and by segment, are summarized in the table below (in millions): Segment: Balance at December 31, 2023 (1) Goodwill adjustment (2) Balance at December 31, 2024 Goodwill from business acquisition (3) Balance at December 31, 2025 Home Comfort Solutions $ 26.1 $ $ 26.1 $ 60.9 $ 87.0 Building Climate Solutions 196.0 (2.1) 193.9 216.3 410.2 Corporate and Other $ 222.1 $ (2.1) $ 220.0 $ 277.2 $ 497.2 (1) The goodwill balances in the table above are presented net of accumulated impairment charges of $37.3 million, all of which related to impairments in periods prior to 2023. (2) On October 25, 2023, we announced the acquisition of AES. In connection with this acquisition, $40.4 million of goodwill was recorded in 2023 and included in the Building Climate Solutions reporting unit. In the first and fourth quarters of 2024, we made adjustments to our purchase price allocation of AES that resulted in a $2.1 million reduction of goodwill. (3) On October 15, 2025, we announced the acquisition of Duro Dyne and Supco. In connection with this acquisition, $277.2 million of goodwill was recorded, of which $216.3 million was included in the Building Climate Solutions reporting unit and $60.9 million was included in the Home Comfort Solutions reporting unit. Duro Dyne is included in our Business Climate Solutions segment and Supco is included in our Home Comfort Solutions segment. See Note 17 for additional infor …

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12. Income Taxes: Our provision for income taxes consisted of the following (in millions): For the Years Ended December 31, 2025 2024 As Adjusted 2023 As Adjusted Current: Federal $ 109.0 $ 159.2 $ 132.1 State 34.9 33.7 26.6 Foreign 27.0 20.0 14.5 Total current 170.9 212.9 173.2 Deferred: Federal 23.2 (19.6) (22.2) State (3.5) (4.0) (4.9) Foreign 0.4 (1.0) 1.6 Total deferred 20.1 (24.6) (25.5) Total provision for income taxes $ 191.0 $ 188.3 $ 147.7 Income before income taxes was comprised of the following (in millions): For the Years Ended December 31, 2025 2024 As Adjusted 2023 As Adjusted Domestic $ 584.9 $ 625.8 $ 472.8 Foreign 411.9 373.6 266.1 Total $ 996.8 $ 999.4 $ 738.9 The difference between the income tax provision computed at the statutory federal income tax rate and the financial statement Provision for income taxes is summarized as follows (in millions): For the Years Ended December 31, 2024 As Adjusted 2023 As Adjusted Provision at the U.S. statutory rate of 21% $ 209.9 $ 155.2 Increase (reduction) in tax expense resulting from: State income tax, net of federal income tax benefit 23.2 16.4 Tax credits, net of unrecognized tax benefits (5.3) (3.4) Change in unrecognized tax benefits 0.5 0.4 Change in valuation allowance 0.1 Foreign taxes at rates other than U.S. statutory rate (61.1) (40.3) Deemed inclusions 7.6 6.1 Global intangible low-taxed income 20.8 17.5 Change in rates from the Tax Act & other law changes 0.2 Excess tax benefits from stock-based compe …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

Changes in Accounting Standards Effective for Future Reporting Periods In November 2024, the FASB issued ASU No. 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40) , which will require public entities to disclose additional information about specific expense categories in the notes to the financial statements at interim and annual reporting periods. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. We are currently evaluating the impact of this standard on our financial statements. Recently Adopted Accounting Pronouncements In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures , which updates income tax disclosure requirements, primarily through enhanced disclosures regarding income rate reconciliation and income taxes paid. This is effective for fiscal years beginning after December 15, 2024. ASU 2023-09 requires that, on an annual basis, entities disclose specific categories in the rate reconciliation and additional information for reconciling items that meet a certain quantitative threshold. The amendment also requires enhanced disclosures around taxes paid and income tax expense by federal, state and foreign jurisdictions. We adopted the standard on a prospective basis in the current period. See Note 12 for more information.

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10. Employee Benefit Plans: Many of our defined benefit pension and profit sharing plans have been frozen and replaced with defined contribution plans. We have a liability for the benefits earned under these inactive plans prior to the date the benefits were frozen. We also have several active defined benefit plans that provide benefits based on years of service. Our defined contribution plans generally include both company and employee contributions which are based on predetermined percentages of compensation earned by the employee. In addition to freezing the benefits of our defined benefit pension plans, we have also eliminated nearly all of our post-retirement medical benefits. Defined Contribution Plans We recorded the following contributions to our defined contribution plans (in millions): For the Years Ended December 31, 2025 2024 2023 Contributions to defined contribution plans $ 25.8 $ 26.9 $ 22.5 Pension and Post-retirement Benefit Plans Benefit Obligations, Fair Value of Plan Assets, Funded Status, and Balance Sheet Position The following tables set forth amounts recognized in our financial statements and the plans funded status for our pension and post-retirement benefit plans (dollars in millions): Pension Benefits 2025 2024 Accumulated benefit obligation $ 162.0 $ 161.4 Changes in projected benefit obligation: Benefit obligation at beginning of year $ 162.1 $ 179.1 Service cost 1.1 1.5 Interest cost 8.4 8.5 Actuarial loss (gain) 4.4 (9.9) Effect of exchange rate …

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7. Restructuring Charges: We record restructuring charges associated with management-approved restructuring plans to reorganize or to remove duplicative headcount and infrastructure within our businesses. Restructuring charges include severance costs to eliminate a specified number of employees, infrastructure charges to vacate facilities and consolidate operations, contract cancellation costs and other related activities. The timing of associated cash payments is dependent upon the type of restructuring charge and can extend over a multi-year period. Restructuring charges are not included in our calculation of segment profit (loss), as more fully explained in Note 3. We recorded restructuring charges of $6.8 million in 2025 to realize SG&A and distribution efficiencies and $3.1 million in 2023 to reorganize or remove duplicative headcount and infrastructure. There were no restructuring charges in 2024. Restructuring accruals are included in Accrued expenses in the accompanying Consolidated Balance Sheets.

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8. Revenue Recognition: The following table disaggregates our revenue by business segment by geography to provide information as to the major sources of revenue. See Note 3 for additional description of our reportable business segments and the products and services being sold in each segment. For the Year Ended December 31, 2025 Primary Geographic Markets Home Comfort Solutions Building Climate Solutions Corporate and Other Consolidated United States $ 3,097.4 $ 1,724.5 $ $ 4,821.9 Canada 246.0 127.4 373.4 Total $ 3,343.4 $ 1,851.9 $ $ 5,195.3 For the Year Ended December 31, 2024 Primary Geographic Markets Home Comfort Solutions Building Climate Solutions Corporate and Other Consolidated United States $ 3,346.0 $ 1,675.8 $ $ 5,021.8 Canada 231.1 88.4 319.5 Total $ 3,577.1 $ 1,764.2 $ $ 5,341.3 For the Year Ended December 31, 2023 Primary Geographic Markets Home Comfort Solutions Building Climate Solutions Corporate and Other Consolidated United States $ 3,001.3 $ 1,415.6 $ $ 4,416.9 Canada 221.6 95.8 317.4 International 247.6 247.6 Total $ 3,222.9 $ 1,511.4 $ 247.6 $ 4,981.9 For our businesses that provide services, revenue is recognized at the time services are completed. Our Building Climate Solutions segment also provides sales, installation, maintenance and repair services under fixed-price contracts. Revenue for services is recognized as the services are performed under the contract based on the relative fair value of the services provided. We allocate a portion of the r …

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3. Reportable Business Segments: Description of Segments We operate in two reportable business segments of the HVACR industry. Our segments are organized primarily by the nature of the products and services we provide. The following table describes each segment: Segment Products 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 New Construction United States Canada Building Climate Solutions Unitary heating and air conditioning equipment, applied systems, controls, installation and service of commercial heating and cooling equipment, variable refrigerant flow commercial products, curb, curb adapters, drop box diffusers, HVAC recycling and salvage service, condensing units, unit coolers, fluid coolers, air cooled condensers, air handlers, process chillers, controls, compressorized racks, replacement parts and supplies Light Commercial; Food Preservation; Non-Food Industry 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 continue to invest in our Heatcraft Worldwide Refrigeration business which is included in the Building Climate Solutions segment. The consolidation of our …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

2. Summary of Significant Accounting Policies: Principles of Consolidation The consolidated financial statements include the accounts of Lennox International Inc. and our majority-owned subsidiaries. All intercompany transactions, profits and balances have been eliminated. Cash and Cash Equivalents We consider all highly liquid temporary investments with original maturity dates of three months or less to be cash equivalents. Cash and cash equivalents consisted primarily of bank deposits. Restricted Cash Equivalents Restricted cash equivalents relate to amounts restricted for payment of certain indemnities and is recorded within long-term assets on the accompanying Consolidated Balance Sheets. Short-term Investments Short-term investments include all investments, exclusive of cash equivalents, with a stated maturity date of one year or less from the balance sheet date. Accounts and Notes Receivable Accounts and notes receivable are shown in the accompanying Consolidated Balance Sheets, net of allowance for doubtful accounts. The allowance for doubtful accounts is generally established during the period in which receivables are recognized and is based on the age of the receivables and managements judgment on our ability to collect. Management considers the historical trends of write-offs and recoveries of previously written-off accounts, the financial strength of customers and projected economic and market conditions. We determine the delinquency status of receivables predomina …

SignificantAccountingPoliciesTextBlock · excerpt; the full note is in the filing

6. Stock Repurchases: Our Board of Directors have authorized a total of $5 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 the Company 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 December 31, 2025, $1,009.6 million of shares are available for repurchase under the Share Repurchase Plans. We repurchased 0.9 million shares at an aggregate cost, inclusive of fees, of $482.3 million in 2025 and 0.1 million shares for $54.2 million in 2024. No shares were repurchased in 2023. The shares repurchased are held as treasury shares. …

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13. Prior Year Acquisitions: Duro Dyne and Supco 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 June 30, 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 …

BusinessCombinationDisclosureTextBlock · excerpt; the full note is in the filing

"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 ar …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

"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: June 30, 2026 December 31, 2025 Commercial paper $ 412.0 $ 226.0 Current maturities of long-term debt: Finance lease obligations $ 20.1 $ 18.3 Total current maturities of long-term debt $ 20.1 $ 18.3 Long-Term Debt: Finance lease obligations $ 54.6 $ 50.6 Term Loan 300.0 300.0 Senior unsecured notes 800.0 800.0 Debt issuance costs (5.4) (6.5) Total long-term debt $ 1,149.2 $ 1,144.1 Total debt $ 1,581.3 $ 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 Pro …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

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 June 30, For the Six Months Ended June 30, 2026 2025 2026 2025 Stock-based compensation expense $ 5.4 $ 8.2 $ 11.2 $ 14.5

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12. Fair Value Measurements: Fair Value Hierarchy The methodologies used to determine the fair value of our financial assets and liabilities as of June 30, 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: June 30, 2026 December 31, 2025 Senior unsecured notes $ 811.3 $ 81 …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

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 June 30, 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 six months ended June 30, 2026 or in any periods presented.

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9. Income Taxes: As of June 30, 2026, we had approximately $5.3 million in total gross unrecognized tax benefits. If recognized, $5.3 million would be recorded through the Consolidated Statements of Operations. Our effective tax rate was 20.8% for the three months ended June 30, 2026 compared to 19.4% for the three months ended June 30, 2025. The increase in rate is primarily due to higher income in higher tax jurisdictions. The Internal Revenue Service is currently auditing certain aspects of our U.S. federal income tax returns for 2021 and 2022, including cross border transactions. 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. We believe that the positions taken on our tax returns are more likely than not to prevail on technical merits and that adequate amounts have been reserved for these audits. However, final resolution of ongoing audits could result in settlements or judgments in excess of our reserves, and such settlements or judgments could have a material adverse impact on our financial position, results of operations, and cash flows.

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8. Pension Benefit Plans: The components of net periodic benefit cost for pension benefits were as follows (in millions): For the Three Months Ended June 30, For the Six Months Ended June 30, 2026 2025 2026 2025 Service cost $ 0.1 $ 0.3 $ 0.3 $ 0.6 Interest cost 1.9 2.0 3.9 4.1 Expected return on plan assets (1.6) (1.8) (3.3) (3.6) Amortization of prior service cost (0.1) (0.1) (0.1) (0.1) Recognized actuarial loss 0.6 0.5 1.1 0.9 Settlements and curtailments 0.1 0.1 0.6 0.2 Net periodic benefit cost $ 1.0 $ 1.0 $ 2.5 $ 2.1

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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 June 30, 2026 Primary Geographic Markets Home Comfort Solutions Building Climate Solutions Consolidated United States $ 875.4 $ 565.5 $ 1,440.9 Canada 60.2 44.2 104.4 Total $ 935.6 $ 609.7 $ 1,545.3 For the Three Months Ended June 30, 2025 Primary Geographic Markets Home Comfort Solutions Building Climate Solutions Consolidated United States $ 941.0 $ 455.6 $ 1,396.6 Canada 68.3 36.0 104.3 Total $ 1,009.3 $ 491.6 $ 1,500.9 (Amounts in millions) For the Six Months Ended June 30, 2026 Primary Geographic Markets Home Comfort Solutions Building Climate Solutions Consolidated United States $ 1,479.4 $ 1,011.9 $ 2,491.3 Canada 106.2 82.9 189.1 Total $ 1,585.6 $ 1,094.8 $ 2,680.4 (Amounts in millions) For the Six Months Ended June 30, 2025 Primary Geographic Markets Home Comfort Solutions Building Climate Solutions Consolidated United States $ 1,608.9 $ 788.3 $ 2,397.2 Canada 121.8 54.5 176.3 Total $ 1,730.7 $ 842.8 $ 2,573.5 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 …

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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, water heaters Residential Replacement; Residential Parts and Supplies; Residential New Construction United States Canada Building Climate Solutions Unitary heating and air conditioning equipment, applied systems, controls, installation and service of commercial heating and cooling equipment, variable refrigerant flow commercial products, curb, curb adapters, drop box diffusers, HVAC recycling and salvage service, condensing units, unit coolers, fluid coolers, air cooled condensers, air handlers, process chillers, controls, compressorized racks, replacement parts and supplies Light Commercial; Commercial Parts and Supplies; Food Preservation; Non-Food Industry; Cold Storage and Light Industrial 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 segments income or loss from continuing operations b …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

"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 June 30, 2026, $857.7 million was available for repurchase under the Share Repurchase Plans. For the three and six months ended June 30, 2026, we repurchased 260,627 and 299,627 shares, at an aggregate cost, inclusive of fees, of $131.9 million and $151.9 million respectively."

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