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PRE-MKT · 06:25 ET
Market ClerkRecap
Thu Oct 22 · pre-market2 signals on Oct 21108 insider buys this week · $250.3MCIRO short report next: Oct 31The week ahead

AOS

SMITH A O CORP
NYSE · CONSUMER DISCRETIONARY · HOUSEHOLD APPLIANCES
59.65
+0.11 +0.18%
USD · close Oct 21
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Work order
55
WATCH · shorts 55
Insiders, 90 days
0
no open-market filings in 90 days
Congress, 90 days
0 / 0
no disclosures naming it
Big money
1 / 15
tracked funds hold it
Calls on record
0
nobody we score has called it yet
MKT CAP $4.5BP/E 16.6DIV YIELD —FCF YIELD 14.15%REV TTM $3.8B +0.4%NET INCOME $500.3M −3.5%NET CASH $26.3M52W 55.34 – 80.47SEC XBRL · TTM TO Invalid Date

How AOS rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025
Text kept
41%
of sentences unchanged
Added
196
new sentences
Dropped
254
sentences removed
Length
−2,753
words, now 18,146

New in FY2025

  • At December 31, 2025, we had net foreign currency contracts outstanding with notional values of $93.3 million.
  • Assuming a hypothetical ten percent movement in the respective currencies, the potential foreign exchange gain or loss associated with the change in exchange rates would amount to $9.3 million.
  • Important factors that could cause actual results to differ materially from these expectations include, among other things, the following: further weakening in North American residential or commercial construction or instability in the Company’s replacement markets; failure to realize the expected benefits of acquisitions or expected synergies; difficulties in predicting results of operations of an acquired business; negative impact to the Company’s businesses from international tariffs, including any new or increased tariffs that could also trigger retaliatory responses from other countries, as well as trade disputes and geopolitical differences, including the conflicts in Ukraine and the Middle East; further softening in U.S. residential and commercial water heater demand; negative impacts to the Company, particularly the demand for its products, resulting from global inflationary pressures or a potential recession in one or more of the markets in which the Company participates; the Company’s ability to continue to obtain commodities, components, parts and accessories on a timely basis through its supply chain and at expected costs; inability of the Company to implement or maintain pricing actions; inconsistent recovery of the Chinese economy or a further decline in the growth rate of consumer spending or housing sales in China; the availability, timing or effects of China stimulus programs; uncertain outcomes and costs and other potential impacts of the Company’s assessment relating to the Company’s China business; potential weakening in the high-efficiency gas boiler segment in the U.S.; substantial defaults in payment by, material reduction in purchases by or the loss, bankruptcy or insolvency of a major customer; foreign currency fluctuations; failure to realize the expected benefits, timing and extent of regulatory changes; competitive pressures on the Company’s businesses, including new technologies and new competitors; the impact of potential information technology or data security breaches; negative impact of changes in government regulations or regulatory requirements; the inability to respond to secular trends toward decarbonization and energy efficiency; and adverse developments in general economic, political and business conditions in key regions of the world.
  • Smith Corporation (the Company) as of December 31, 2025 and 2024, the related consolidated statements of earnings, comprehensive earnings, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes and financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”).
  • In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles.
  • We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 10, 2026 expressed an unqualified opinion thereon.
  • The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosure to which it relates.
  • Product Warranty Liability Description of the Matter At December 31, 2025, the Company’s product warranty liability was $209.7 million.
  • Auditing the Company’s product warranty liability for certain of its products was complex due to the judgmental nature of the warranty loss experience assumptions, including the estimated product failure rate and the estimated cost of product replacement.
  • In particular, it is possible that future product failure rates may not be reflective of actual historical product failure rates, or that a product quality issue has not yet been identified.
  • To test certain products of the Company’s product warranty liability calculation, our audit procedures included, among others, evaluating the methodology used, and testing the significant assumptions discussed above and the underlying data used by the Company in its analysis.
  • We tested the completeness and accuracy of the claims settled data.
  • We recalculated the historical failure rates using actual claims settled data.
  • We also analyzed current year claims settled data to identify changes in failure trends and assessed the historical accuracy of the prior year liability. /s/ Ernst & Young LLP We have served as the Company’s auditor since 1917.
  • Milwaukee, Wisconsin February 10, 2026 CONSOLIDATED BALANCE SHEETS December 31 (dollars in millions) 2025 2024 Assets Current Assets Cash and cash equivalents $ 174.5 $ 239.6 Marketable securities 18.7 36.5 Receivables 582.3 541.4 Inventories 479.3 532.1 Other current assets 36.7 43.3 Total Current Assets 1,291.5 1,392.9 Net property, plant and equipment 635.1 628.7 Goodwill 710.6 761.7 Other intangibles 362.3 321.1 Operating lease assets 46.3 32.8 Other assets 97.0 102.8 Total Assets $ 3,142.8 $ 3,240.0 Liabilities Current Liabilities Trade payables $ 504.1 $ 588.7 Accrued payroll and benefits 93.6 78.5 Accrued liabilities 147.5 153.0 Product warranties 75.0 67.0 Long-term debt due within one year 42.3 10.0 Total Current Liabilities 862.5 897.2 Long-term debt 112.7 183.2 Product warranties 134.7 123.4 Pension liabilities 7.4 11.0 Long-term operating lease liabilities 37.1 23.5 Other liabilities 130.4 118.2 Total Liabilities 1,284.8 1,356.5 Commitments and contingencies — — Stockholders’ Equity Preferred Stock — — Class A Common Stock (shares issued 25,993,539 and 26,014,825 as of December 31, 2025 and 2024, respectively) 130.0 130.1 Common Stock (shares issued 164,714,053 and 164,692,769 as of December 31, 2025 and 2024, respectively) 164.7 164.7 Capital in excess of par value 614.4 601.3 Retained earnings 3,951.8 3,601.3 Accumulated other comprehensive loss ( 98.6 ) ( 111.9 ) Treasury stock at cost ( 2,904.3 ) ( 2,502.0 ) Total Stockholders’ Equity 1,858.0 1,883.5 Total Liabilities and Stockholders’ Equity $ 3,142.8 3,240.0 See accompanying notes which are an integral part of these statements.
  • CONSOLIDATED STATEMENTS OF EARNINGS Years ended December 31 (dollars in millions, except per share amounts) 2025 2024 2023 Net sales $ 3,830.2 $ 3,818.1 $ 3,852.8 Cost of products sold 2,342.8 2,362.0 2,368.0 Gross profit 1,487.4 1,456.1 1,484.8 Selling, general and administrative expenses 759.4 739.3 727.4 Restructuring and impairment expenses — 17.6 18.8 Interest expense 13.5 6.7 12.0 Other income, net ( 0.6 ) ( 8.5 ) ( 6.9 ) Earnings before provision for income taxes 715.1 701.0 733.5 Provision for income taxes 168.9 167.4 176.9 Net Earnings $ 546.2 $ 533.6 $ 556.6 Net Earnings Per Share of Common Stock (1) $ 3.87 $ 3.65 $ 3.71 Diluted Net Earnings Per Share of Common Stock (1) $ 3.85 $ 3.63 $ 3.69 (1) Earnings per share amounts are calculated discretely and, therefore, may not add up to the total due to rounding.
  • CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS Years ended December 31 (dollars in millions) 2025 2024 2023 Net Earnings $ 546.2 $ 533.6 $ 556.6 Other comprehensive earnings (loss) Foreign currency translation adjustments 13.1 ( 24.0 ) 3.8 Unrealized net gain (loss) on cash flow derivative instruments, less related income tax (provision) benefit of $( 0.4 ) in 2025, $ 0.7 in 2024 and $ 1.4 in 2023 1.3 ( 2.2 ) ( 4.2 ) Change in pension liability less related income tax benefit of $ 0.4 in 2025, $ 0.5 in 2024 and $ 0.5 in 2023 ( 1.1 ) ( 1.5 ) ( 1.4 ) Comprehensive Earnings $ 559.5 $ 505.9 $ 554.8 See accompanying notes which are an integral part of these statements.
  • CONSOLIDATED STATEMENTS OF CASH FLOWS Years ended December 31 (dollars in millions) 2025 2024 2023 Operating Activities Net earnings $ 546.2 $ 533.6 $ 556.6 Adjustments to reconcile earnings to cash provided by (used in) operating activities: Depreciation and amortization 85.1 78.8 78.3 Stock based compensation expense 13.8 14.9 11.5 Deferred income taxes 8.9 ( 4.6 ) ( 3.8 ) Non-cash impairments — 4.7 15.6 Pension settlement income — — ( 0.9 ) Pension settlement non-cash taxes — — 0.2 Net changes in operating assets and liabilities, net of acquisitions: Current assets and liabilities ( 55.7 ) ( 22.6 ) 20.0 Noncurrent assets and liabilities 18.5 ( 23.0 ) ( 7.2 ) Cash Provided by Operating Activities 616.8 581.8 670.3 Investing Activities Capital expenditures ( 70.8 ) ( 108.0 ) ( 72.6 ) Acquisitions — ( 145.9 ) ( 16.8 ) Investments in marketable securities ( 42.7 ) ( 73.7 ) ( 63.1 ) Net proceeds from sales of marketable securities 60.5 60.5 128.4 Cash Used in Investing Activities ( 53.0 ) ( 267.1 ) ( 24.1 ) Financing Activities Proceeds from debt 1,087.3 1,100.1 688.0 Repayments of debt ( 1,124.9 ) ( 1,030.4 ) ( 906.1 ) Common stock repurchases ( 400.8 ) ( 305.8 ) ( 306.5 ) Net proceeds from stock option activity 1.0 18.1 23.4 Dividends paid ( 195.7 ) ( 190.4 ) ( 183.5 ) Cash Used in Financing Activities ( 633.1 ) ( 408.4 ) ( 684.7 ) Effect of exchange rate changes on cash and cash equivalents 4.2 ( 6.6 ) ( 12.8 ) Net decrease in cash and cash equivalents ( 65.1 ) ( 100.3 ) ( 51.3 ) Cash and cash equivalents-beginning of year 239.6 339.9 391.2 Cash and Cash Equivalents-End of Year $ 174.5 $ 239.6 $ 339.9 See accompanying notes, which are an integral part of these statements.
  • CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY Years ended December 31 (dollars in millions) 2025 2024 2023 Class A Common Stock Balance at the beginning of the year $ 130.1 $ 130.1 $ 130.2 Conversion of Class A Common Stock ( 0.1 ) — ( 0.1 ) Balance at the end of the year $ 130.0 $ 130.1 $ 130.1 Common Stock Balance at the beginning of the year $ 164.7 $ 164.7 $ 164.7 Conversion of Class A Common Stock — — — Balance at the end of the year $ 164.7 $ 164.7 $ 164.7 Capital in Excess of Par Value Balance at the beginning of the year $ 601.3 $ 578.2 $ 555.9 Conversion of Class A Common Stock 0.1 — 0.1 Issuance of share units ( 16.7 ) ( 15.0 ) ( 10.3 ) Vesting of share units ( 2.5 ) ( 2.5 ) ( 3.7 ) Stock based compensation expense 13.2 13.1 10.4 Exercises of stock options 1.3 11.4 14.5 Issuance of share based compensation 17.7 16.1 11.3 Balance at the end of the year $ 614.4 $ 601.3 $ 578.2 Retained Earnings Balance at the beginning of the year $ 3,601.3 $ 3,258.1 $ 2,885.0 Net earnings 546.2 533.6 556.6 Dividends on stock ( 195.7 ) ( 190.4 ) ( 183.5 ) Balance at the end of the year $ 3,951.8 $ 3,601.3 $ 3,258.1 Accumulated Other Comprehensive Loss Balance at the beginning of the year $ ( 111.9 ) $ ( 84.2 ) $ ( 82.4 ) Foreign currency translation adjustments 13.1 ( 24.0 ) 3.8 Unrealized net gain (loss) on cash flow derivative instruments, less related income tax (provision) benefit of $( 0.4 ) in 2025, $ 0.7 in 2024 and $ 1.4 in 2023 1.3 ( 2.2 ) ( 4.2 ) Change in pension liability less related income tax benefit of $ 0.4 in 2025, $ 0.5 in 2024 and $ 0.5 in 2023 ( 1.1 ) ( 1.5 ) ( 1.4 ) Balance at the end of the year $ ( 98.6 ) $ ( 111.9 ) $ ( 84.2 ) Treasury Stock Balance at the beginning of the year $ ( 2,502.0 ) $ ( 2,202.5 ) $ ( 1,905.7 ) Exercise of stock options, net of 32,203 , 36,300 and 61,605 shares surrendered as proceeds and to pay taxes in 2025, 2024 and 2023, respectively ( 0.2 ) 6.6 8.8 Stock incentives and directors’ compensation 0.3 0.2 0.3 Shares repurchased ( 400.8 ) ( 305.8 ) ( 306.5 ) Excise tax on repurchases of common stock ( 4.0 ) ( 3.0 ) ( 3.1 ) Vesting of share units 2.4 2.5 3.7 Balance at the end of the year $ ( 2,904.3 ) $ ( 2,502.0 ) $ ( 2,202.5 ) Total Stockholders’ Equity $ 1,858.0 $ 1,883.5 $ 1,844.4 See accompanying notes which are an integral part of these statements.
  • The Rest of World segment is primarily comprised of China, India, and Europe.
  • The carrying amounts of cash, cash equivalents, marketable securities, receivables, floating rate debt and trade payables approximated fair value as of December 31, 2025 and 2024, due to the short maturities or frequent rate resets of these instruments.
  • The fair value of term notes with financial institutions included in Long-term debt within the consolidated balance sheets was approximately $ 139.0 million as of December 31, 2025 compared with the carrying amount of $ 155.0 million for the same date.
  • The fair value of term notes with financial institutions was approximately $ 143.6 million as of December 31, 2024 compared with the carrying amount of $ 163.2 million.
  • Gains and losses from foreign currency transactions were included in net earnings and were not significant in 2025, 2024, or 2023.
  • At December 31, 2025, the Company’s marketable securities consisted of bank time deposits with original maturities ranging from 180 days to 12 months and were primarily located at investment grade rated banks in China and Hong Kong.
  • Cost is determined on the last-in, first-out (LIFO) method for a certain portion of the Company’s domestic inventories, which comprised 40 percent and 43 percent of the Company’s total inventory at December 31, 2025 and 2024, respectively.
  • Separable intangible assets, primarily comprised of customer relationships, that are not deemed to have an indefinite life are amortized on a straight-line basis over their estimated useful lives which range from two to 25 years.
  • The following table presents the Company’s product warranty liability activity in 2025 and 2024: Years ended December 31 (dollars in millions) 2025 2024 Balance at beginning of year $ 190.4 $ 188.1 Expense 84.2 81.1 Claims settled ( 66.0 ) ( 78.8 ) Acquired obligations 1.1 — Balance at end of year $ 209.7 $ 190.4 Derivative instruments.
  • See Note 13, “Derivative Instruments” for disclosure of the Company’s derivative instruments and hedging activities.
  • Assets (liabilities) measured at fair value on a recurring basis are as follows (dollars in millions): Fair Value Measurement Using Balance Sheet Location December 31, 2025 December 31, 2024 Quoted prices in active markets for identical assets (Level 1) Marketable Securities $ 18.7 $ 36.5 Significant other observable inputs (Level 2) Accrued liabilities — ( 1.9 ) There were no changes in the valuation techniques used to measure fair values on a recurring basis.
  • The majority of advertising costs are charged to operations as incurred and totaled $ 101.1 million, $ 100.3 million and $ 93.9 million during 2025, 2024 and 2023, respectively.
  • Included in total advertising costs are expenses associated with store displays for water heater, water treatment products, and kitchen products in China that are amortized over 12 to 48 months which totaled $ 24.0 million, $ 21.1 million and $ 15.2 million during 2025, 2024 and 2023, respectively. 1.
  • Research and development costs are charged to operations as incurred and amounted to $ 95.0 million, $ 101.7 million and $ 97.5 million during 2025, 2024 and 2023, respectively.
  • In accordance with amended ASC 718 Compensation-Stock Compensation , the Company recognized $ 0.6 million, $ 4.1 million, and $ 3.2 million of discrete income tax benefits on settled stock based compensation awards during 2025, 2024, and 2023 respectively.
  • The Company is not required to use the two-class method of calculating earnings per share because its Class A Common Stock and Common Stock have equal dividend rights.
  • The following table sets forth the computation of basic and diluted weighted-average shares used in the earnings per share calculations: 2025 2024 2023 Denominator for basic earnings per share - weighted-average shares outstanding 141,029,845 145,997,584 149,952,679 Effect of dilutive stock options, restricted stock and share units 884,995 1,086,496 1,062,895 Denominator for diluted earnings per share 141,914,840 147,084,080 151,015,574 Recent Accounting Pronouncements In September 2025, the FASB issued ASU No. 2025-06, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40), which modernizes the accounting guidance for internal-use software costs by eliminating the requirement to assess software development stages and introduces a new capitalization threshold.
  • ASU 2025-06 is effective for fiscal years beginning after December 15, 2027, with early adoption permitted.
  • The Company is currently in the process of reviewing the guidance and evaluating its impact on its financial statements.
  • In November 2024, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2024-03 “Income Statement - Reporting Comprehensive Income (Topic 220): Disaggregation of Income Statement Expenses.” The ASU requires additional disclosures by disaggregating the costs and expense line items that are presented on the face of the income statement.
  • The update is effective for the Company beginning with its 2025 annual disclosures and interim periods beginning in 2026.

and 156 more.

Gone since FY2024

  • At December 31, 2024, we had net foreign currency contracts outstanding with notional values of $70.1 million.
  • Assuming a hypothetical ten percent movement in the respective currencies, the potential foreign exchange gain or loss associated with the change in exchange rates would amount to $7.0 million.
  • Important factors that could cause actual results to differ materially from these expectations include, among other things, the following: further softening in U.S. residential and commercial water heater demand; negative impacts to the Company, particularly the demand for its products, resulting from global inflationary pressures or a potential recession in one or more of the markets in which the Company participates; the Company’s ability to continue to obtain commodities, components, parts and accessories on a timely basis through its supply chain and at expected costs; negative impacts to demand for the Company’s products, particularly commercial products, as a result of changes in commercial property usage that followed the COVID-19 pandemic; further weakening in North American residential or commercial construction or instability in the Company's replacement markets; inability of the Company to implement or maintain pricing actions; inconsistent recovery of the Chinese economy or a further decline in the growth rate of consumer spending or housing sales in China; the availability, timing or effects of China stimulus programs; negative impact to the Company’s businesses from international tariffs, trade disputes and geopolitical differences, including the conflicts in Ukraine and the Middle East; potential weakening in the high-efficiency gas boiler segment in the U.S.; substantial defaults in payment by, material reduction in purchases by or the loss, bankruptcy or insolvency of a major customer; foreign currency fluctuations; the Company’s inability to successfully integrate or achieve its strategic objectives resulting from acquisitions; failure to realize the expected benefits of acquisitions or expected synergies; failure to realize the expected benefits, timing and extent, of regulatory changes; competitive pressures on the Company’s businesses; including new technologies and new competitors; the impact of potential information technology or data security breaches; negative impact of changes in government regulations or regulatory requirements; the inability to respond to secular trends toward decarbonization and energy efficiency and adverse developments in general economic, political and business conditions in key regions of the world.
  • Smith Corporation (the Company) as of December 31, 2024 and 2023, the related consolidated statements of earnings, comprehensive earnings, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2024, and the related notes and financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”).
  • In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with U.S. generally accepted accounting principles.
  • We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 11, 2025 expressed an unqualified opinion thereon.
  • The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
  • Product Warranty Liability Valuation Description of the Matter At December 31, 2024, the Company’s product warranty liability was $190.4 million.
  • Auditing the product warranty liability was complex due to the judgmental nature of the warranty loss experience assumptions, including the estimated product failure rate and the estimated cost of product replacement.
  • In particular, it is possible that future product failure rates may not be reflective of historical product failure rates, or that a product quality issue has not yet been identified as of the financial statement date.
  • To test the Company’s calculation of the product warranty liability, our audit procedures included, among others, evaluating the methodology used, and testing the significant assumptions discussed above and the underlying data used by the Company in its analysis.
  • We tested the validity of claims within the calculation and tested the completeness and accuracy of the claims settled data.
  • We recalculated the historical failure rates using actual claims data.
  • We also analyzed current year claims data to identify changes in failure trends and assessed the historical accuracy of the prior year liability.
  • Further, we inquired of operational and quality control personnel regarding quality issues and trends. /s/ Ernst & Young LLP We have served as the Company’s auditor since 1917.
  • Milwaukee, Wisconsin February 11, 2025 CONSOLIDATED BALANCE SHEETS December 31 (dollars in millions) 2024 2023 Assets Current Assets Cash and cash equivalents $ 239.6 $ 339.9 Marketable securities 36.5 23.5 Receivables 541.4 596.0 Inventories 532.1 497.4 Other current assets 43.3 43.5 Total Current Assets 1,392.9 1,500.3 Net property, plant and equipment 628.7 597.5 Goodwill 761.7 633.4 Other intangibles 321.1 336.7 Operating lease assets 32.8 37.3 Other assets 102.8 108.7 Total Assets $ 3,240.0 $ 3,213.9 Liabilities Current Liabilities Trade payables $ 588.7 $ 600.4 Accrued payroll and benefits 78.5 92.2 Accrued liabilities 153.0 177.4 Product warranties 67.0 65.3 Long-term debt due within one year 10.0 10.0 Total Current Liabilities 897.2 945.3 Long-term debt 183.2 117.3 Product warranties 123.4 122.8 Pension liabilities 11.0 10.5 Long-term operating lease liabilities 23.5 27.9 Other liabilities 118.2 145.7 Total Liabilities 1,356.5 1,369.5 Commitments and contingencies — — Stockholders’ Equity Preferred Stock — — Class A Common Stock (shares issued 26,014,825 and 26,023,132 as of December 31, 2024 and 2023, respectively) 130.1 130.1 Common Stock (shares issued 164,692,769 and 164,684,460 as of December 31, 2024 and 2023, respectively) 164.7 164.7 Capital in excess of par value 601.3 578.2 Retained earnings 3,601.3 3,258.1 Accumulated other comprehensive loss ( 111.9 ) ( 84.2 ) Treasury stock at cost ( 2,502.0 ) ( 2,202.5 ) Total Stockholders’ Equity 1,883.5 1,844.4 Total Liabilities and Stockholders’ Equity $ 3,240.0 $ 3,213.9 See accompanying notes which are an integral part of these statements.
  • CONSOLIDATED STATEMENT OF EARNINGS Years ended December 31 (dollars in millions, except per share amounts) 2024 2023 2022 Net sales $ 3,818.1 $ 3,852.8 $ 3,753.9 Cost of products sold 2,362.0 2,368.0 2,424.3 Gross profit 1,456.1 1,484.8 1,329.6 Selling, general and administrative expenses 739.3 727.4 670.9 Restructuring and impairment expenses 17.6 18.8 — Interest expense 6.7 12.0 9.4 Other (income) expense, net ( 8.5 ) ( 6.9 ) 425.6 Earnings before provision for income taxes 701.0 733.5 223.7 Provision for (benefit from) income taxes 167.4 176.9 ( 12.0 ) Net Earnings $ 533.6 $ 556.6 $ 235.7 Net Earnings Per Share of Common Stock (1) $ 3.65 $ 3.71 $ 1.52 Diluted Net Earnings Per Share of Common Stock (1) $ 3.63 $ 3.69 $ 1.51 (1) Earnings per share amounts are calculated discretely and, therefore, may not add up to the total due to rounding.
  • CONSOLIDATED STATEMENT OF COMPREHENSIVE EARNINGS Years ended December 31 (dollars in millions) 2024 2023 2022 Net Earnings $ 533.6 $ 556.6 $ 235.7 Other comprehensive earnings (loss) Foreign currency translation adjustments ( 24.0 ) 3.8 ( 39.4 ) Unrealized net (loss) gain on cash flow derivative instruments, less related income tax benefit (provision) of $ 0.7 in 2024, $ 1.4 in 2023 and $( 1.4 ) in 2022 ( 2.2 ) ( 4.2 ) 4.3 Change in pension liability less related income tax benefit (provision) of $ 0.5 in 2024, $ 0.5 in 2023 and $( 179.0 ) in 2022 ( 1.5 ) ( 1.4 ) 284.1 Comprehensive Earnings $ 505.9 $ 554.8 $ 484.7 See accompanying notes which are an integral part of these statements.
  • CONSOLIDATED STATEMENT OF CASH FLOWS Years ended December 31 (dollars in millions) 2024 2023 2022 Operating Activities Net earnings $ 533.6 $ 556.6 $ 235.7 Adjustments to reconcile earnings to cash provided by (used in) operating activities: Depreciation and amortization 78.8 78.3 76.9 Stock based compensation expense 14.9 11.5 11.1 Deferred income taxes ( 4.6 ) ( 3.8 ) — Non-cash impairments 4.7 15.6 — Pension settlement (income) expense — ( 0.9 ) 417.3 Pension settlement non-cash taxes — 0.2 ( 167.7 ) Net changes in operating assets and liabilities, net of acquisitions: Current assets and liabilities ( 22.6 ) 20.0 ( 194.1 ) Noncurrent assets and liabilities ( 23.0 ) ( 7.2 ) 12.2 Cash Provided by Operating Activities 581.8 670.3 391.4 Investing Activities Capital expenditures ( 108.0 ) ( 72.6 ) ( 70.3 ) Acquisitions ( 145.9 ) ( 16.8 ) ( 8.0 ) Investments in marketable securities ( 73.7 ) ( 63.1 ) ( 91.6 ) Net proceeds from sales of marketable securities 60.5 128.4 178.0 Cash (Used in) Provided by Investing Activities ( 267.1 ) ( 24.1 ) 8.1 Financing Activities Long-term debt incurred (repaid) 69.7 ( 218.1 ) 150.6 Common stock repurchases ( 305.8 ) ( 306.5 ) ( 403.5 ) Net proceeds (payments) from stock option activity 18.1 23.4 ( 0.7 ) Dividends paid ( 190.4 ) ( 183.5 ) ( 177.2 ) Cash Used in Financing Activities ( 408.4 ) ( 684.7 ) ( 430.8 ) Effect of exchange rate changes on cash and cash equivalents ( 6.6 ) ( 12.8 ) ( 20.8 ) Net decrease in cash and cash equivalents ( 100.3 ) ( 51.3 ) ( 52.1 ) Cash and cash equivalents-beginning of year 339.9 391.2 443.3 Cash and Cash Equivalents-End of Year $ 239.6 $ 339.9 $ 391.2 See accompanying notes, which are an integral part of these statements.
  • CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY Years ended December 31 (dollars in millions) 2024 2023 2022 Class A Common Stock Balance at the beginning of the year $ 130.1 $ 130.2 $ 130.5 Conversion of Class A Common Stock — ( 0.1 ) ( 0.3 ) Balance at the end of the year $ 130.1 $ 130.1 $ 130.2 Common Stock Balance at the beginning of the year $ 164.7 $ 164.7 $ 164.7 Conversion of Class A Common Stock — — — Balance at the end of the year $ 164.7 $ 164.7 $ 164.7 Capital in Excess of Par Value Balance at the beginning of the year $ 578.2 $ 555.9 $ 545.2 Conversion of Class A Common Stock — 0.1 0.3 Issuance of share units ( 15.0 ) ( 10.3 ) ( 6.0 ) Vesting of share units ( 2.5 ) ( 3.7 ) ( 3.0 ) Stock based compensation expense 13.1 10.4 11.1 Exercises of stock options 11.4 14.5 1.3 Issuance of share based compensation 16.1 11.3 7.0 Balance at the end of the year $ 601.3 $ 578.2 $ 555.9 Retained Earnings Balance at the beginning of the year $ 3,258.1 $ 2,885.0 $ 2,826.6 Net earnings 533.6 556.6 235.7 Dividends on stock ( 190.4 ) ( 183.5 ) ( 177.3 ) Balance at the end of the year $ 3,601.3 $ 3,258.1 $ 2,885.0 Accumulated Other Comprehensive Loss Balance at the beginning of the year $ ( 84.2 ) $ ( 82.4 ) $ ( 331.4 ) Foreign currency translation adjustments ( 24.0 ) 3.8 ( 39.4 ) Unrealized net (loss) gain on cash flow derivative instruments, less related income tax benefit (provision) of $ 0.7 in 2024, $ 1.4 in 2023 and $( 1.4 ) in 2022 ( 2.2 ) ( 4.2 ) 4.3 Change in pension liability less related income tax benefit (provision) of $ 0.5 in 2024, $ 0.5 in 2023 and $( 179.0 ) in 2022 ( 1.5 ) ( 1.4 ) 284.1 Balance at the end of the year $ ( 111.9 ) $ ( 84.2 ) $ ( 82.4 ) Treasury Stock Balance at the beginning of the year $ ( 2,202.5 ) $ ( 1,905.7 ) $ ( 1,503.4 ) Exercise of stock options, net of 36,300 , 61,605 and 47,309 shares surrendered as proceeds and to pay taxes in 2024, 2023 and 2022, respectively 6.6 8.8 ( 2.1 ) Stock incentives and directors’ compensation 0.2 0.3 0.3 Shares repurchased ( 305.8 ) ( 306.5 ) ( 403.5 ) Excise tax on repurchases of common stock ( 3.0 ) ( 3.1 ) — Vesting of share units 2.5 3.7 3.0 Balance at the end of the year $ ( 2,502.0 ) $ ( 2,202.5 ) $ ( 1,905.7 ) Total Stockholders’ Equity $ 1,883.5 $ 1,844.4 $ 1,747.7 See accompanying notes which are an integral part of these statements.
  • The Rest of World segment is primarily comprised of China, Europe and India.
  • The carrying amounts of cash, cash equivalents, marketable securities, receivables, floating rate debt and trade payables approximated fair value as of December 31, 2024 and 2023, due to the short maturities or frequent rate resets of these instruments.
  • The fair value of term notes with financial institutions included in Long-term debt within the consolidated balance sheets was approximately $ 143.6 million as of December 31, 2024 compared with the carrying amount of $ 163.2 million for the same date.
  • The fair value of term notes with financial institutions was approximately $ 116.5 million as of December 31, 2023 compared with the carrying amount of $ 127.3 million.
  • Gains and losses from foreign currency transactions were included in net earnings and were not significant in 2024, 2023, or 2022.
  • At December 31, 2024, the Company’s marketable securities consisted of bank time deposits with original maturities ranging from 180 days to 12 months and were primarily located at investment grade rated banks in China and Hong Kong.
  • Cost is determined on the last-in, first-out (LIFO) method for a certain portion of the Company’s domestic inventories, which comprised 43 percent and 39 percent of the Company’s total inventory at December 31, 2024 and 2023, respectively.
  • Separable intangible assets, primarily comprised of customer relationships, that are not deemed to have an indefinite life are amortized on a straight-line basis over their estimated useful lives which range from four to 25 years.
  • The following table presents the Company’s product warranty liability activity in 2024 and 2023: Years ended December 31 (dollars in millions) 2024 2023 Balance at beginning of year $ 188.1 $ 182.5 Expense 81.1 79.9 Claims settled ( 78.8 ) ( 74.3 ) Balance at end of year $ 190.4 $ 188.1 Derivative instruments.
  • See Note 14, “Derivative Instruments” for disclosure of the Company’s derivative instruments and hedging activities.
  • Assets (liabilities) measured at fair value on a recurring basis are as follows (dollars in millions): Fair Value Measurement Using Balance Sheet Location December 31, 2024 December 31, 2023 Quoted prices in active markets for identical assets (Level 1) Marketable Securities $ 36.5 $ 23.5 Significant other observable inputs (Level 2) (Accrued liabilities) / Other current assets ( 1.9 ) ( 4.1 ) There were no changes in the valuation techniques used to measure fair values on a recurring basis.
  • The majority of advertising costs are charged to operations as incurred and totaled $ 100.3 million, $ 93.9 million and $ 100.4 million during 2024, 2023 and 2022, respectively.
  • Included in total advertising costs are expenses associated with store displays for water heater, water treatment products, and kitchen products in China that are amortized over 12 to 48 months which totaled $ 21.1 million, $ 15.2 million and $ 17.2 million during 2024, 2023 and 2022, respectively. 1.
  • Research and development costs are charged to operations as incurred and amounted to $ 101.7 million, $ 97.5 million and $ 89.0 million during 2024, 2023 and 2022, respectively.
  • In accordance with amended ASC 718 Compensation-Stock Compensation , the Company recognized $ 4.1 million, $ 3.2 million, and $ 1.1 million of discrete income tax benefits on settled stock based compensation awards during 2024, 2023, and 2022 respectively.
  • The Company is not required to use the two-class method of calculating earnings per share since its Class A Common Stock and Common Stock have equal dividend rights.
  • The following table sets forth the computation of basic and diluted weighted-average shares used in the earnings per share calculations: 2024 2023 2022 Denominator for basic earnings per share - weighted-average shares outstanding 145,997,584 149,952,679 154,786,327 Effect of dilutive stock options, restricted stock and share units 1,086,496 1,062,895 993,037 Denominator for diluted earnings per share 147,084,080 151,015,574 155,779,364 Recent Accounting Pronouncements In November 2024, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2024-03 “Income Statement - Reporting Comprehensive Income (Topic 220): Disaggregation of Income Statement Expenses.” The ASU requires additional disclosures by disaggregating the costs and expense line items that are presented on the face of the income statement.
  • The amendment is effective for the Company beginning with its 2025 annual disclosures with early adoption permitted and should be applied on a prospective basis.
  • The Company is currently evaluating the impact the adoption of ASU 2023-09 will have on its annual disclosures.
  • In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures.” The update is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant expenses.

and 214 more.

Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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