Commercial Heating & Cooling. HARRY BIZIOS President & Chief Operating Officer

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1 HARRY BIZIOS President & Chief Operating Officer 1

2 Financial Summary COMMERCIAL HEATING & COOLING Est. Sales $508 $581 $652 Segment Profit $38 $51 $57 Segment Profit Margin 7.5% 8.8% 8.7% Sales CAGR* 12% Segment Profit CAGR* 21% 2 * CAGR from 2003 to 2006 estimate

3 Segment Profit Target COMMERCIAL HEATING & COOLING Est. Sales $508 $581 $652 Segment Profit $38 $51 $57 Segment Profit Margin 7.5% 8.8% 8.7% Long-term Segment Profit Target 11-13% 3

4 Manufacturing Facilities 5 PLANTS IN 4 COUNTRIES North America Europe Prague, Czech Republic Stuttgart, AR Burgos, Spain Mions, France Longvic, France 4

5 Geographic Revenue Mix North America Europe Stuttgart, AR 72% 28% Burgos, Spain Prague, Czech Republic Mions, France Longvic, France 5

6 Strengths NORTH AMERICA Continued market share increase 5 year CAGR 13% revenue 5 year CAGR 26% EBIT Strong position with national accounts provides a solid new construction base Growing replacement opportunities Industry leading products/continued focus on innovation Manufacturing excellence/expanding capacity to support growth EUROPE Lennox rooftops hold the #1 position in Europe Unacceptable profitability 6

7 7 Residential 550, , , , , , ,000 16% 14% 12% LII Market Share 10% Jan-00 Apr-00 Jul-00 Oct-00 Jan-01 Apr-01 Jul-01 Oct-01 Jan-02 Apr-02 Jul-02 Oct-02 Jan-03 Apr-03 Jul-03 Oct-03 Jan-04 Apr-04 Jul-04 Oct-04 Jan-05 Apr-05 Jul-05 Oct-05 Jan-06 Apr-06 LII Market Share Growth Industry Shipments (up to 30 ton) LII Share - 12 month moving average Source: ARI and company sources Industry Shipments (units)

8 Customer Segmentation Owners Owners Engineers Architects Owner / Occupier / National Account Developer Purchasing Contractors 8 Construction Manager Facility Manager Contactors Design Build Plan / Spec Service

9 Successful Business Model Owners Owners National Accounts Engineers Architects Owner / Occupier / National Account Developer Consultants Territory Managers Purchasing Contractors 9 Construction Manager Facility Manager Contactors Design Build Plan / Spec Service

10 Successful Business Model Owners Engineers Architects Technical Support Customer Service Contractors 10

11 11 National Account Focus of of the the top National Accounts representing approximately 75% of of the the total square footage are are Lennox Customers Source: Chain Store Age Millions of Square Feet Rank Company Wal-Mart Stores The Home Depot Lowe's Companies Target Kohl's Department Stores SUPERVALU Dollar General Walgreen TJX Family Dollar CVS Corp Best Buy Dollar Tree Ross Gap May Department Stores PetSmart JCPenney Costco Publix Bed, Bath & Beyond Staples Big Lots Linens 'n Things Kroger

12 Rooftop Awards and Recognition Energy Star Manufacturing Partner of the Year 2003, 2004, 2005 L Series wins Department of Energy lifecycle cost competition 2002 McDonald s Construction Vendor of the Year 2003 Contracting Business Innovation Award for Humiditrol 2004 ACHR News Gold Dealer Design Award of the L Series Wal*Mart s Vendor of the Year May 2006 Outback Restaurants Purveyor of the Year 2004 & ACHR News Gold Dealer Design Award for the S-Class Buildings Magazine 2006 Editors' Choice Top Product Picks L Connection Network Lennox ranked highest in the first ever JD Power HVAC subcontractor satisfaction survey 12

13 Key Initiatives AMERICAS Solidify new construction market position Increase replacement market penetration Continue manufacturing excellence and expansion Maintain product leadership EUROPE Sales growth Expand rooftop market Focus on Eastern Europe Focus on cost reduction and improve factory efficiencies Rationalize product offering 13

14 Regional Distribution Centers INCREASE PENETRATION IN REPLACEMENT MARKET Hour Response

15 End Market Mix INCREASING MORE PROFITABLE REPLACEMENT SALES Total Market Lennox Replacement Sales Growth New Construction 35 36% CAGR Replacement Est 15 Source: Industry data and company estimates

16 Market Segmentation NEW CONSTRUCTION (Square Footage) 14% 16% 19% Retail Education Warehouses 12% 27% Parking Garage/Auto Svc 12% Office and Bank Other 16 Source: 2Q06 Dodge Analytics & company estimates

17 A Strong Base in Retail NEW CONSTRUCTION (Square Footage) 14% 16% 19% Retail Education Warehouses 12% 27% Parking Garage/Auto Svc 12% Office and Bank Other Strengthen Position 17 Source: 2Q06 Dodge Analytics & company estimates

18 Residential New Segment Opportunities NEW CONSTRUCTION (Square Footage) 16% Retail 19% Education 14% Warehouses 27% 12% 12% Parking Garage/Auto Svc Office and Bank Other New NewFocus/New Focus/NewProducts Products 18 Source: 2Q06 Dodge Analytics & company estimates

19 Percent of High Efficiency Sales MEETING THE ENERGY STAR STANDARD 100% 80% 82% 60% 53% 40% 27% 20% 19 0% Industry Lennox Lennox National Accounts Source: ARI and company sources

20 100% Percent of R410A Sales WORLDWIDE COMMERCIAL LEADER IN ENVIRONMENTALLY FRIENDLY REFRIGERANTS 100% 80% 60% 40% 20% 7% 20% 0% Industry Today Lennox Today Source: Copeland and company sources

21 Stuttgart, Arkansas POSITIONED FOR CONTINUED GROWTH Industry leading configure-to-order lead times of 3-4 weeks Lean initiatives have increased productivity 40% 11 consecutive external ISO audits with zero findings Non-finished goods turnover rate = 39 60% domestic sales growth in past 3 years 250,000 sq ft building addition to accommodate continued growth 21

22 Summary Strengthen the core business Focus on the replacement market Maintain product leadership Invest for future growth 22