JPMorgan SmallMid Cap Conference

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JPMorgan Small/Mid Cap Conference Boston, MA
November 13th, 2006
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FORWARD-LOOKING STATEMENTS
This presentation contains forward-looking
statements within the meaning of the Private
Securities Litigation Reform Act of 1995. These
statements are subject to numerous risks and
uncertainties that could cause actual results to
differ materially from such statements. For
information concerning these risks and
uncertainties, see Lennox Internationals
publicly available filings with the Securities
and Exchange Commission. LII disclaims any
intention or obligation to update or revise any
forward-looking statements, whether as a result
of new information, future events or
otherwise. A reconciliation of information
presented to U.S. Generally Accepted Accounting
Principles (GAAP) is posted on the companys
website at www.lennoxinternational.com.
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Investment Highlights

• Leading climate control solutions provider with
  111-year history of product innovation operating
  in over 100 countries
• Positive operating earnings growth trend with
  expected FY 06 adjusted EPS up 15
• A strong balance sheet with Debt Capitalization
  of 13 provides a solid foundation for growth
• Mitigating 60 mil in estimated commodities
  headwinds in 2006
• Successful transition to 13 SEER resulting in
  product mix benefits
• Exposure to residential new construction limited
  to an estimated 20 of total sales
• 4.7 million shares repurchased in first 9 months
  of 2006
• Dividend increased 10 in December 2005
• CEO succession plan for smooth transition

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Focused on Four Related BusinessesSTRONG BRANDS
SOLD THROUGH MULTI-CHANNEL DISTRIBUTION
Revenue
Segment Profit
ResidentialHeating Cooling
CommercialHeating Cooling
Refrigeration
Service Experts
Cold Storage Applications, Primarily for Food
Preservation
HVAC Equipment Sales, Installation, Maintenance,
and Service
Packaged Rooftop Units, Split Systems
Central Air Conditioning, Furnaces, Heat Pumps,
IAQ Equipment, Fireplaces
Notes Data is TTM to 09/30/06 segment profit
is before unallocated corporate expense
residential is net of eliminations
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Business Mix
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Source Company estimates
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Manufacturing Footprint27 PLANTS IN 11 COUNTRIES
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Residential Heating Cooling Commercial Heating
Cooling Refrigeration Joint Ventures
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HVACR Market Fundamentals

• Maturing markets with mid-single digit growth
• Increasing shift in end markets from new
  constructionto replacement
• Economic conditions, new construction, and
  weather drive demand
• Regulatory environment impacts product offering
• Strong competitive environment with some pricing
  power
• Value in brands and established distribution
  relationships

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LIIs Historical GrowthSALES IN MILLIONS
Clearing the decks
Service Experts
International
A new era of growth
Armstrong
Refrigeration
Note - 2004 sales from continuing operations
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Growth Profit Improvement Initiatives

• Residential Heating Cooling
• Continue to invest in product leadership
• Increase sales in under-penetrated sunbelt
  markets
• Commercial Heating Cooling
• Solidify new construction position
• Penetrate replacement market opportunities
• Service Experts
• Protection plans to strengthen relationship with
  homeowners
• Customer contact center to improve conversion
  rates
• Field automation to improve efficiency
• Refrigeration
• Extend successful domestic business model into
  developing markets
• Leverage internal and external intellectual
  property to drive innovation
• Explore acquisitions to enhance capabilities and
  extend product reach
• Acquisitions provide upside
• Strategic acquisitions
• Strong balance sheet
• Disciplined acquisition

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Replacements Drive Residential Growth NORTH
AMERICA RESIDENTIAL UNIT SHIPMENTS VS HOUSING
STARTS
Source ARI, GAMA, HRAI, NAHB, CMHC
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Multi-Channel Distribution
OEM
Distributor
Dealer
Home Owner
BY REVENUE
BY UNIT
1-Step
1-Step
2-Step
2-Step
Generating 1.5 billion
Delivering 2.8M units
2005 company data
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Product Innovation
XC21 The worlds first central air
conditioner rated at 20 SEER HSX15 The
quietest central air conditioning system G61V
The quietest gas furnace SignatureStat
Humidity and temperature control in one device
PureAir Cleans the air in your home better
than any other single system Humiditrol Whole
home dehumidification system
Approximately 30 of 2005 manufacturing equipment
revenue came from products introduced in the past
3 years
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LII Market ShareGROWTH OPPORTUNITY IN LARGE AND
GROWING SUNBELT MARKETS
Sunbelt Market Focus
At or above average market share
Lower than average market share
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Sunbelt Opportunity
2005 U.S. Industry Shipments

• Top 5 states represent 40 of all shipments
• Sunbelt states represent 60 of all shipments
• Growth in sunbelt outpacing others

Source ARI, GAMA
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The State of the RNC Industry
Units
New Construction Market Forecast Remains Above
Robust Years
Sources NAHB, single and multi-family
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Strong Position with 17 of Top 20 BuildersLENNOX
SHARE 1-33 34-66
67-100
Source 2005 GIANTS Listing, Builder Magazine
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Commercial End Market MixINCREASING MORE
PROFITABLE REPLACEMENT SALES
LennoxReplacement Sales Growth
Total Market
New Construction
Replacement
Source Industry data and company estimates
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Commercial Regional Distribution CentersINCREASE
PENETRATION IN REPLACEMENT MARKET
24 - 48 Hour Response
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Commercial Market SegmentationNEW CONSTRUCTION
(Square Footage)
Source 2Q06 Dodge Analytics company estimates
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A Strong Base in RetailNEW CONSTRUCTION (Square
Footage)
Retail
Education
Commercial Warehouses
Parking Garage/Auto Svc
Office and Bank
Other
Strengthen Position
Source 2Q06 Dodge Analytics company estimates
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New Segment OpportunitiesNEW CONSTRUCTION
(Square Footage)
Retail
Education
Commercial Warehouses
Parking Garage/Auto Svc
Office and Bank
Other
New Focus/New Products
Source 2Q06 Dodge Analytics company estimates
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Continuous Improvements at Service Experts

• Over 78 of sales focused on more profitable and
  stable service/replacement opportunities
• Common IT system, financial controls,and
  regional accounting centers deployed
• Inventory Management Replenishment
  programreducing working capital requirements to
  lt8 of sales

• 49 graduates of GM Fast Track development program
  adding bench strength
• Home Health Report Card - IAQ revenue growing
  over 40 in 2006
• Continued roll-out of common branding
  Standards of Excellence
• Profitable IBS commercial business model growing
  over 20 CAGR since 2000
• Over 85 of service technicians are NATE certified

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Protection Plan ProgramsONLY 1 IN 20 HOMEOWNERS
HAS A SERVICE AGREEMENT
Demand Service OPPORTUNITY
Renewals

Protection Plans
Replacement Sales
Accessories/IAQ Sales


Tune-Ups TRUST
Closing Rate More Than Double for Protection Plan
Customers
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Customer Contact Center

• Current situation
• First contact is with a local Customer Service
  Representative
• High CSR turnover (45)
• Little or no marketing intelligence collected on
  customers
• Inability to consistently implement sales and
  marketing initiatives
• Future situationConsolidate calls into two
  outsourced locations to exclusively support
  Service Experts
• Inbound calls
• Receive, handle or route all customer/prospect
  calls
• Warm transfer to local center
• Outbound calls
• Customer satisfaction survey
• Maintenance appointment setting
• Telemarketing

Net Result is Low Call Conversion Rates (52)
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Improve Technician Efficiency

• Project FAST (Field Automation for Service
  Technicians)
• Deploy mobile wireless solution to improve the
  efficiency (cost reduction) and effectiveness
  (revenue increase) of field technicians
• Strengthen Service Experts control environment
• Key Functionality
• Early phases
• Electronic service work orders
• Driving directions (with GPS)
• Interactive time stamps and enhanced paging
• Up-sell prompts
• Credit card, check, cash transactions with
  signature capture
• Future phases
• Full integration with business system
• Immediate revenue recognition
• Inventory management system with bar-coding
• Equipment diagnostics

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Demand Enablers
Customer Contact Center Driving Demand
Field Application for Service Technicians
Exploiting Demand Efficiently
ConversionRate Improvement 10 20 30
Service Revenue Opportunity 18m 36m 54m
Additional Calls Per Tech 2/week 3/week 4/week
Service Revenue Opportunity 24m 36m 48m
Creating a World Class Service Organization
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Worldwide Product Segments17.5 BILLION TOTAL
MARKET ( BILLIONS)
2.2 Commercial Systems
3.1 Transport Refrigeration
2.9 Refrigerated Cases/Display
1.0 Non-Food Ultra Low Temp
1.2 Walk-in Coolers
2.3 Industrial/Ammonia
1.9 Vending Ice Machines
2.1 Self Contained/Reach-In
0.8 Specialty Chillers
Sources Fredonia, Census Bureau, Frost and
Sullivan, company estimates
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Organic RoadmapSTRATEGIC DRIVERS
Plan development and execution

• Product Development Strategy
• 3 year roadmap
• Stage Gate
• Open innovation
• Brand strategy

gt8 revenue growth/year
Product Leadership
Plan development and execution

• Customer Interface Strategy
• Service alignment
• Customer segmentation

Unparalleled customer service
Customer Intimacy
Plan development and execution

• Manufacturing Excellence Strategy
• Low-cost product platforms
• Open innovation

gt15 cost reduction
Operational Excellence
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Developing MarketsSTRATEGIC DRIVERS

• Represent approximately 20-25 of global
  refrigeration market today
• Developing refrigeration infrastructure
• Development of retail food channels
• Average per capita spend 10 of developed
  markets
• Emerging economies and infrastructure offer
  attractive market growth rates
• China 12-14
• India 12-14
• Southeast Asia 9-11
• South America 6-9

Heatcraft Model in Place in Brazil
Source McKinsey report, internal estimates
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Potential Adjacent Markets

• Common customer base and channels
• Leverage technology and manufacturing processes
• Supporting services and technology
• Expands our influence to key end use sectors
• Expands available market

Food Retail
Food Production
Food Service
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Worldwide Product Segments17.5 BILLION TOTAL
MARKET ( BILLIONS)
9.5 Expanded MarketOpportunity
2.2 Commercial Systems
3.1 Transport Refrigeration
2.9 Refrigerated Cases/Display
1.0 Non-Food Ultra Low Temp
1.2 Walk-in Coolers
2.3 Industrial/Ammonia
1.9 Vending Ice Machines
2.1 Self Contained/Reach-In
0.8 Specialty Chillers
Sources Fredonia, Census Bureau, Frost and
Sullivan, company estimates
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Financial Overview
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5 Years of Sales Profit Growth MILLIONS
EXCEPT PER SHARE DATA
Adjusted Income From Continuing Operations
Sales
Adjusted EPS
Exclusive of restructuring, non-recurring
items, non-operating gains/losses and goodwill
impairment charges
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Solid First 9 Months Performance MILLIONS
EXCEPT PER SHARE AND RATIO DATA
2006 2005 Chg Sales 2,808.7
2,495.6 13 Net Income 120.6 108.9
Discontinued Operations ---- 1.3
(Gains), losses other expenses 3.1 (15.9)
Restructuring charge 8.5 1.6 Tax
items (8.8) ---- Cumulative effect of
accounting change ---- (0.2) Adjusted Income
from Continuing Operations 123.4 95.7 29 Dilut
ed EPS, as adjusted 1.65 1.37 20 Total Debt
at 09/30 120.0 236.1 -49 Debt Cap at
09/30 13 27
Net of realized gains on settled futures
contracts Net of income tax
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A Stronger Balance Sheet
Reduced Total Debt by 570 Million in Past 5 Years
As of September 30, 2006
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Financial Objectives

• FULL-YEAR 2006 GUIDANCE (provided 10/26/06)
• GAAP EPS of 2.00 to 2.10 adjusted EPS
  exceeding this range
• Revenue growth of approximately 10
• Capital expenditures of approximately 70 million
• LONG-TERM
• Annual revenue growth of 6 to 8 plus acquisition
  activity
• 10 segment profit margina minimum of 50 bps
  improvement per year
• ROIC 5 greater than cost of capital
• Debt Capitalization below 40

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