SMITH A O CORPAOS
SMITH A O CORP Segments Disclosure
Operations by Segment
The Company is comprised of two reporting segments: North America and Rest of World. The Rest of World segment is primarily comprised of China, India, and Europe. Both segments manufacture and market comprehensive lines of residential and commercial gas and electric water heaters, boilers, tanks and water treatment products. Both segments primarily manufacture and market in their respective regions of the world.
The Company’s Chief Executive Officer (CEO) is the Chief Operating Decision Maker (CODM). The CODM allocates resources and makes operating decisions based on the financial information presented by the two reporting segments. The measures regularly reviewed by our CODM include segment sales, earnings, and segment margin. Segment earnings, defined by the Company as earnings before interest expense, taxes, corporate expense, and corporate research and development expenses, were used to measure the performance of the segments. Our CODM uses these financial measures to evaluate and allocate capital and company resources as critical determinants of segment performance.
The accounting policies of the reportable segments are the same as those described in the “Summary of Significant Accounting Policies” outlined in Note 1 - Organization and Significant Accounting Policies.
| December 31, 2025 | |||||||||||||||||||||||||||||||||||
| (dollars in millions) | North America | Rest of World | Inter-segment Elimination | Total Segments | Less: Corporate Expenses | Total | |||||||||||||||||||||||||||||
| Sales from external customers | $ | 2,964.4 | $ | 865.8 | $ | — | $ | 3,830.2 | $ | — | $ | 3,830.2 | |||||||||||||||||||||||
| Inter-segment sales | 19.8 | 14.6 | — | 34.4 | — | 34.4 | |||||||||||||||||||||||||||||
| 2,984.2 | 880.4 | — | 3,864.6 | — | 3,864.6 | ||||||||||||||||||||||||||||||
| Elimination of Inter-segment sales | (19.8) | (14.6) | — | (34.4) | — | (34.4) | |||||||||||||||||||||||||||||
| Net Sales | 2,964.4 | 865.8 | — | 3,830.2 | — | 3,830.2 | |||||||||||||||||||||||||||||
| Cost of products sold | 1,792.2 | 550.6 | — | 2,342.8 | — | 2,342.8 | |||||||||||||||||||||||||||||
| Gross Profit | 1,172.2 | 315.2 | — | 1,487.4 | — | 1,487.4 | |||||||||||||||||||||||||||||
| Inter-segment Profit | — | 0.2 | (0.2) | — | — | — | |||||||||||||||||||||||||||||
| Selling, general and administrative expenses | 444.3 | 235.9 | — | 680.2 | 79.2 | 759.4 | |||||||||||||||||||||||||||||
Other expense (income), net(1) | — | 3.1 | — | 3.1 | (3.7) | (0.6) | |||||||||||||||||||||||||||||
| Earnings | $ | 727.9 | $ | 76.4 | $ | (0.2) | $ | 804.1 | $ | (75.5) | $ | 728.6 | |||||||||||||||||||||||
| Interest expense | (13.5) | ||||||||||||||||||||||||||||||||||
| Earnings before provision for income taxes | $ | 715.1 | |||||||||||||||||||||||||||||||||
(1)Other expense (income), net consists primarily of interest income that is located within Corporate Expenses.
| December 31, 2024 | |||||||||||||||||||||||||||||||||||
| (dollars in millions) | North America | Rest of World | Inter-segment Elimination | Total Segments | Less: Corporate Expenses | Total | |||||||||||||||||||||||||||||
| Sales from external customers | $ | 2,928.1 | $ | 890.0 | $ | — | $ | 3,818.1 | $ | — | $ | 3,818.1 | |||||||||||||||||||||||
| Inter-segment sales | 22.0 | 28.6 | — | 50.6 | — | 50.6 | |||||||||||||||||||||||||||||
| 2,950.1 | 918.6 | — | 3,868.7 | — | 3,868.7 | ||||||||||||||||||||||||||||||
| Elimination of Inter-segment sales | (22.0) | (28.6) | — | (50.6) | — | (50.6) | |||||||||||||||||||||||||||||
| Net Sales | 2,928.1 | 890.0 | — | 3,818.1 | — | 3,818.1 | |||||||||||||||||||||||||||||
| Cost of products sold | 1,780.1 | 581.9 | — | 2,362.0 | — | 2,362.0 | |||||||||||||||||||||||||||||
| Gross Profit | 1,148.0 | 308.1 | — | 1,456.1 | — | 1,456.1 | |||||||||||||||||||||||||||||
| Inter-segment Profit | — | 0.4 | (0.4) | — | — | — | |||||||||||||||||||||||||||||
| Selling, general and administrative expenses | 433.2 | 235.0 | — | 668.2 | 71.1 | 739.3 | |||||||||||||||||||||||||||||
| Restructuring and impairment expense | 6.3 | 11.3 | — | 17.6 | — | 17.6 | |||||||||||||||||||||||||||||
Other expense (income), net(2) | 1.0 | (2.3) | — | (1.3) | (7.2) | (8.5) | |||||||||||||||||||||||||||||
| Earnings | $ | 707.5 | $ | 64.5 | $ | (0.4) | $ | 771.6 | $ | (63.9) | $ | 707.7 | |||||||||||||||||||||||
| Interest expense | (6.7) | ||||||||||||||||||||||||||||||||||
| Earnings before provision for income taxes | $ | 701.0 | |||||||||||||||||||||||||||||||||
(2)Other expense (income), net consists primarily of interest income that is located within Corporate Expenses.
| December 31, 2023 | |||||||||||||||||||||||||||||||||||
| (dollars in millions) | North America | Rest of World | Inter-segment Elimination | Total Segments | Less: Corporate Expenses | Total | |||||||||||||||||||||||||||||
| Sales from external customers | $ | 2,904.3 | $ | 948.5 | $ | — | $ | 3,852.8 | $ | — | $ | 3,852.8 | |||||||||||||||||||||||
| Inter-segment sales | 18.6 | 8.4 | — | 27.0 | — | 27.0 | |||||||||||||||||||||||||||||
| 2,922.9 | 956.9 | — | 3,879.8 | — | 3,879.8 | ||||||||||||||||||||||||||||||
| Elimination of Inter-segment sales | (18.6) | (8.4) | — | (27.0) | — | (27.0) | |||||||||||||||||||||||||||||
| Net Sales | 2,904.3 | 948.5 | — | 3,852.8 | — | 3,852.8 | |||||||||||||||||||||||||||||
| Cost of products sold | 1,761.1 | 607.0 | — | 2,368.1 | (0.1) | 2,368.0 | |||||||||||||||||||||||||||||
| Gross Profit | 1,143.2 | 341.5 | — | 1,484.7 | 0.1 | 1,484.8 | |||||||||||||||||||||||||||||
| Inter-segment Profit | — | 0.5 | (0.5) | — | — | — | |||||||||||||||||||||||||||||
| Selling, general and administrative expenses | 411.6 | 243.0 | — | 654.6 | 72.8 | 727.4 | |||||||||||||||||||||||||||||
| Restructuring and impairment expense | — | 15.7 | — | 15.7 | 3.1 | 18.8 | |||||||||||||||||||||||||||||
Other expense (income), net(3) | 4.9 | (0.1) | — | 4.8 | (11.7) | (6.9) | |||||||||||||||||||||||||||||
| Earnings | $ | 726.7 | $ | 83.4 | $ | (0.5) | $ | 809.6 | $ | (64.1) | $ | 745.5 | |||||||||||||||||||||||
| Interest expense | (12.0) | ||||||||||||||||||||||||||||||||||
| Earnings before provision for income taxes | $ | 733.5 | |||||||||||||||||||||||||||||||||
(3)Other expense (income), net consists primarily of interest income that is located within Corporate Expenses.
In 2025, sales to the Company's North America segment’s two largest customers were $599.7 million and $467.8 million which represented 16 percent and 12 percent of the Company’s net sales, respectively. In 2024, sales to the Company's North America segment’s two largest customers were $586.6 million and $495.8 million which represented 15 percent and 13 percent of the Company’s net sales, respectively. In 2023, sales to the Company's North America segment’s two largest customers were $604.5 million and $509.0 million which represented 16 percent and 13 percent of the Company’s net sales, respectively.
Assets, depreciation and capital expenditures by segment
| Total Assets (December 31) | Depreciation and Amortization (Years Ended December 31) | Capital Expenditures (Years Ended December 31) | |||||||||||||||||||||||||||||||||||||||||||||||||||
| (dollars in millions) | 2025 | 2024 | 2023 | 2025 | 2024 | 2023 | 2025 | 2024 | 2023 | ||||||||||||||||||||||||||||||||||||||||||||
| North America | $ | 2,325.7 | $ | 2,315.2 | $ | 2,297.4 | $ | 64.1 | $ | 60.4 | $ | 58.6 | $ | 60.6 | $ | 100.3 | $ | 58.4 | |||||||||||||||||||||||||||||||||||
| Rest of World | 547.3 | 592.1 | 475.0 | 19.6 | 17.0 | 18.3 | 10.2 | 7.6 | 11.0 | ||||||||||||||||||||||||||||||||||||||||||||
| Total Segments | 2,873.0 | 2,907.3 | 2,772.4 | 83.7 | 77.4 | 76.9 | 70.8 | 107.9 | 69.4 | ||||||||||||||||||||||||||||||||||||||||||||
Corporate(1) | 269.8 | 332.7 | 441.5 | 1.4 | 1.4 | 1.4 | — | 0.1 | 3.2 | ||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | 3,142.8 | $ | 3,240.0 | $ | 3,213.9 | $ | 85.1 | $ | 78.8 | $ | 78.3 | $ | 70.8 | $ | 108.0 | $ | 72.6 | |||||||||||||||||||||||||||||||||||
(1)The majority of corporate assets consist of cash, cash equivalents, marketable securities, and deferred income taxes.
Net sales and long-lived assets by geographic location
The following data by geographic area includes net sales based on product shipment destination and long-lived assets based on physical location. Long-lived assets include net property, plant and equipment, operating lease assets and other long-term assets.
| Long-lived Assets (December 31) | Net Sales (Years Ended December 31) | |||||||||||||||||||||||||||||||||||||
| (dollars in millions) | 2025 | 2024 | 2023 | 2025 | 2024 | 2023 | ||||||||||||||||||||||||||||||||
| United States | $ | 447.7 | $ | 441.4 | $ | 422.6 | United States | $ | 2,619.1 | $ | 2,573.7 | $ | 2,547.1 | |||||||||||||||||||||||||
| China | 193.6 | 193.8 | 210.6 | China | 672.8 | 760.0 | 827.4 | |||||||||||||||||||||||||||||||
| Canada | 56.7 | 54.0 | 58.1 | Canada | 326.5 | 331.2 | 335.3 | |||||||||||||||||||||||||||||||
| Other Foreign | 80.4 | 75.1 | 52.1 | Other Foreign | 211.8 | 153.2 | 143.0 | |||||||||||||||||||||||||||||||
| Total | $ | 778.4 | $ | 764.3 | $ | 743.4 | Total | $ | 3,830.2 | $ | 3,818.1 | $ | 3,852.8 | |||||||||||||||||||||||||
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Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 10, 2026 | Showing above |
| 2024 | Feb 11, 2025 | |
| 2023 | Feb 13, 2024 | |
| 2022 | Feb 14, 2023 | |
| 2021 | Feb 11, 2022 | |
| 2020 | Feb 12, 2021 | |
| 2019 | Feb 24, 2020 | |
| 2018 | Feb 15, 2019 | |
| 2017 | Feb 16, 2018 | |
| 2016 | Feb 17, 2017 | |
| 2015 | Feb 17, 2016 | |
About Segments Disclosures
Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.
Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.