SMITH A O CORP

Previous wording

We continue to seek acquisitions that enable geographic growth, expand our core business, and establish adjacencies. On November 1, 2024, we acquired Pureit from Unilever for approximately $125 million, subject to customary adjustments. Pureit, a leading water purification business in South Asia, offers a broad range of residential water purification solutions. Pureit contributed $28 million to sales in the first half of 2025 and is expected to have sales of approximately USD $50 million for the full year 2025. The acquisition fits squarely in our core capabilities and doubles our market penetration in the South Asia region. In the first quarter of 2024, we acquired Impact Water Products, a privately-held water treatment company. The acquisition supports our geographic expansion and growth strategy by expanding the West Coast presence of our water treatment business.

Current wording

We continue to seek acquisitions that enable geographic growth, expand our core business, and establish adjacencies. On November 1, 2024, we acquired Pureit from Unilever for approximately $125 million, subject to customary adjustments. Pureit, a leading water purification business in South Asia, offers a broad range of residential water purification solutions. Pureit contributed $45 million to sales in the first nine months of 2025 and is expected to have sales of approximately USD $55 million for the full year 2025. The acquisition fits squarely in our core capabilities and doubles our market penetration in the South Asia region. In the first quarter of 2024, we acquired Impact Water Products, a privately-held water treatment company. The acquisition supports our geographic expansion and growth strategy by expanding the West Coast presence of our water treatment business.

Previous wording

In our North America segment, we saw lower water heater volumes in the first half of 2025 against a difficult comparison in the same period last year. We believe that a pre-buy ahead of our March 2024 price increase pulled forward some demand into the first half of 2024. In 2025, while we believe we benefited from some pre-tariff and price increase pull ahead, we actively worked with our customers to limit the impact to help enable greater operational efficiencies, a key 2025 company initiative. 2024 residential industry unit volumes were flat compared to the prior year and we project 2025 industry residential unit volumes will be flat as well. We anticipate that commercial water heater industry volumes will also be approximately flat in 2025 after minimal growth in 2024. In response to higher steel and other input costs, including tariffs, we announced price increases on most of our water heater and boiler products in the first half of 2025. In addition to pricing, we intend to mitigate the impact of tariffs through footprint optimization, strategic sourcing actions and other cost containment initiatives. We expect our boiler sales to grow between four and six percent in 2025 compared to 2024 as we continue to benefit from the transition to higher efficiency boilers. We anticipate sales of our North America water treatment products will be between $235 million and $245 million, a year-over-year decrease of approximately five percent as we de-emphasize certain channels and focus on our more profitable channels.

Current wording

In our North America segment, water heater sales were essentially flat in the first nine months of 2025 compared to the same period last year as pricing benefits and higher commercial volumes we achieved in the third quarter were offset by lower residential volumes in the first half of the year. We believe we underperformed the market in the first half of the year as we limited prebuy ahead of our May 2025 price increase however we believe we outperformed the market in the third quarter and we expect to continue to strengthen our share through the fourth quarter. 2024 residential industry unit volumes were flat compared to the prior year and we project 2025 industry residential unit volumes will be flat to slightly down as new construction completions leads to softness in the wholesale residential channel. We anticipate that commercial water heater industry volumes will increase low single digits in 2025 after minimal growth in 2024. In response to higher steel and other input costs, including tariffs, we announced price increases on most of our water heater and boiler products in the first half of 2025. In addition to pricing, we intend to mitigate the impact of tariffs through footprint optimization, strategic sourcing actions and other cost containment initiatives. We expect our boiler sales to grow between four and six percent in 2025 compared to 2024 as we continue to benefit from the transition to higher efficiency boilers. We anticipate sales of our North America water treatment products will be between $235 million and $245 million, a year-over-year decrease of approximately five percent as we de-emphasize less attractive channels and focus on our more profitable channels.

Previous wording

In our Rest of World segment, China sales declined eight percent in the first half of 2025 due to continued weak consumer demand. For the full year 2025, we project our third-party sales in China to decrease between five to eight percent in local currency compared to 2024 as we expect economic challenges will persist in 2025. We are initiating an assessment of strategic opportunities for our China business, including strategic partnerships and other alternatives. We believe the China market has substantial long-term prospects and are committed to realizing the potential upside inherent in our China business.

Current wording

In our Rest of World segment, China sales declined nine percent in local currency in the first nine months of 2025 due to continued weak consumer demand and the cessation of the appliance government subsidy programs in the third quarter. For the full year 2025, we project our third-party sales in China to decrease approximately 10 percent in local currency compared to 2024 as we expect economic challenges will persist in 2025. In the third quarter, we initiated an assessment of strategic opportunities for our China business, including strategic partnerships and other alternatives. We believe the China market has substantial long-term prospects and are committed to realizing the potential upside inherent in our China business.

Previous wording

Combining all of these factors, we expect our 2025 consolidated sales to increase between one to three percent compared to 2024. Our guidance excludes the impacts from potential future acquisitions and any potential outcomes of the assessment of the China business.

Current wording

Combining all of these factors, we expect our 2025 consolidated sales to be flat to up one percent compared to 2024. Our guidance excludes the impacts from potential future acquisitions and any potential outcomes of the assessment of the China business.

Previous wording

Our sales in the second quarter of 2025 were $1,011.3 million, and lower than the second quarter of 2024 sales of $1,024.3 million. Sales in the first six months of 2025 were $1,975.2 million, and lower than sales of $2,003.1 million in the same period last year. Compared to the prior year quarter, our net sales decrease was primarily driven by lower residential water heater volumes in North America, and lower sales in China, which more than offset our higher sales of boilers and incremental sales related to the 2024 acquisition of Pureit which added approximately $16 million in the second quarter. Our net sales decrease in the first six months of 2025 was primarily driven by lower residential water heater volumes in North America, lower sales in China, and unfavorable currency translation of approximately $8 million due to the depreciation of foreign currencies compared to the U.S. dollar, which more than offset our higher sales of boilers and incremental sales related to the 2024 acquisition of Pureit which added approximately $28 million in the first six months of 2025.

Current wording

Our sales in the third quarter of 2025 were $942.5 million, and were higher than the third quarter of 2024 sales of $902.6 million. Sales in the first nine months of 2025 were $2,917.7 million, and were higher than sales of $2,905.7 million in the same period last year. Compared to the prior year quarter, our net sales increase was primarily driven by price increases in response to higher input costs, including tariffs, and higher commercial water heater and boiler volumes, partially offset by lower volumes in China and the incremental sales related to the 2024 acquisition of Pureit which added approximately $17 million in the third quarter of 2025. Our net sales increase in the first nine months of 2025 was primarily driven by the price increases mentioned above, higher commercial water heater and boiler volumes, and incremental sales related to the 2024 acquisition of Pureit which added approximately $45 million in the first nine months of 2025. This more than offset lower volumes in China, lower residential water heater volumes in North America and unfavorable currency translation of approximately $9 million due to the depreciation of foreign currencies compared to the U.S. dollar.

Previous wording

Our gross profit margin in the second quarter of 2025 was 39.3 percent, up compared to 38.7 percent in the second quarter of 2024. Gross profit margin in the first six months of 2025 was 39.1 percent essentially flat compared to the gross profit margin of 39.0 percent in the first six months of 2024. The increase in gross profit margin in the second quarter was primarily driven by mix benefits toward more profitable channels in water treatment.

Current wording

Our gross profit margin in the third quarter of 2025 was 38.7 percent, up compared to 37.4 percent in the third quarter of 2024. Gross profit margin in the first nine months of 2025 was 39.0 percent, up compared to the gross profit margin of 38.5 percent in the first nine months of 2024. The increases in gross profit margin in the third quarter and first nine months were primarily driven by the benefits of pricing actions implemented earlier this year to address increased input costs in North America.

Previous wording

Selling, general, and administrative (SG&A) expenses in the second quarter of 2025 increased $2.8 million compared to the second quarter of 2024. SG&A expenses increased $3.2 million in the first six months of 2025 compared to the prior year. The increase in SG&A expenses in the second quarter and first six months of 2025 compared to the prior year periods was primarily due to higher employee costs from management incentives and higher selling expenses to support our sales initiatives.

Current wording

Selling, general, and administrative (SG&A) expenses in the third quarter of 2025 increased $12.3 million compared to the third quarter of 2024. SG&A expenses increased $15.5 million in the first nine months of 2025 compared to the prior year. The increases in SG&A expenses in the third quarter and first nine months of 2025 compared to the prior year periods were primarily due to higher employee costs, partially offset by benefits of our 2024 China restructuring actions.

Previous wording

Interest expense in the second quarter of 2025 was $4.6 million compared to $1.8 million in the same period last year. Interest expense in the first six months of 2025 was $7.5 million compared to $2.8 million in the same period the previous year. The increase in interest expense in the second quarter and first six months of 2025 was primarily due to higher debt levels.

Current wording

Interest expense in the third quarter of 2025 was $3.6 million compared to $1.5 million in the same period last year. Interest expense in the first nine months of 2025 was $11.1 million compared to $4.3 million in the same period the previous year. The increase in interest expense in the third quarter and first nine months of 2025 was primarily due to higher debt levels.

Previous wording

Other income, net was $0.4 million in the second quarter of 2025 compared to $0.9 million in the second quarter of 2024. Other income, net was $1.6 million in the first six months of 2025 compared to $2.1 million in the same period last year. The decrease in Other income, net in the second quarter and first six months of 2025 was primarily due to lower interest income.

Current wording

Other expense (income), net for the third quarter of 2025 was expense of $0.2 million, compared to expense of $2.6 million for the third quarter of 2024. Other expense (income), net for the first nine months of 2025 was income of $1.4 million compared to expense of $0.5 million in the same period last year. The change in Other expense (income), net in the third quarter of 2025 was primarily due to lower foreign currency translation losses and lower interest income. The change in Other expense (income), net in the first nine months of 2025 was primarily due to lower foreign currency translation losses.

Previous wording

Our effective income tax rate for the three and six months ended June 30, 2025 was 24.5 percent. The effective income tax rate for the three and six months ended June 30, 2024 was 24.4 percent and 23.9 percent, respectively. The change in the effective income tax rate for the three and six months ended June 30, 2025 compared to the effective income tax rate for the three and six months ended June 30, 2024 was primarily due to the geographical earnings mix. We estimate that our annual effective income tax rate for the full year of 2025 will be approximately 24 to 24.5 percent.

Current wording

Our effective income tax rate for the three and nine months ended September 30, 2025 was 23.2 percent and 24.1 percent, respectively. The effective income tax rate for the three and nine months ended September 30, 2024 was 23.3 percent and 23.7 percent, respectively. The change in the effective income tax rate for the three and nine months ended September 30, 2025 compared to the effective income tax rate for the three and nine months ended September 30, 2024 was primarily due to the geographical earnings mix. We estimate that our annual effective income tax rate for the full year of 2025 will be approximately 24 percent.

Previous wording

Sales in our North America segment were $779.0 million in the second quarter of 2025, a decrease of $11.7 million from $790.7 million in the second quarter of 2024. Sales in the first six months of 2025 were $1,527.7 million, or $29.3 million lower than sales of $1,557.0 million in the same period last year. Compared to the prior year quarter, our net sales decrease was primarily driven by lower residential water heater volumes and partially offset by favorable pricing actions and higher boiler sales. Our net sales decrease in the first six months of 2025 was driven by lower residential water heater volumes and an unfavorable currency translation of approximately $6 million which more than offset our favorable pricing actions and higher boiler sales.

Current wording

Sales in our North America segment were $742.8 million in the third quarter of 2025, an increase of $39.5 million from $703.3 million in the third quarter of 2024. Sales in the first nine months of 2025 were $2,270.5 million, or $10.2 million higher than sales of $2,260.3 million in the same period last year. Compared to the prior year quarter, our net sales increase was primarily driven by the benefits of pricing actions as well as higher commercial water heater and boiler volumes. Our net sales increase in the first nine months of 2025 was driven by the pricing actions and higher commercial water heater and boiler volumes as mentioned above, that were partially offset by unfavorable currency translation of approximately $6 million and lower residential water heater volumes.

Previous wording

North America segment earnings were $198.1 million in the second quarter of 2025, or $0.3 million lower than segment earnings of $198.4 million in the second quarter of 2024. Segment earnings in the first six months of 2025 were $383.3 million, a decrease of $13.8 million compared to segment earnings of $397.1 million in the first six months of 2024. Segment margins were 25.4 percent and 25.1 percent in the second quarter of 2025 and 2024, respectively. Segment margins were 25.1 percent and 25.5 percent in the first six months of 2025 and 2024, respectively. Lower segment earnings in the second quarter of 2025 compared to the prior year quarter were primarily due to lower water heater volumes that were partially offset by higher boiler sales. Higher segment margin in the second quarter of 2025 compared to the prior year quarter were primarily driven by mix benefits toward more profitable channels in water treatment as well as growth in high efficiency water heaters. Lower segment earnings and margin in the first six months of 2025 compared to the prior year were primarily due to lower water heater volumes, lower volume-related absorption, and continued strategic investments, which were partially offset by favorable pricing actions and higher boiler volumes. We estimate our 2025 North America segment margin will be approximately 24 to 24.5 percent.

Current wording

North America segment earnings were $179.7 million in the third quarter of 2025, or $17.2 million higher than segment earnings of $162.5 million in the third quarter of 2024. Segment earnings in the first nine months of 2025 were $563.0 million, an increase of $3.4 million compared to segment earnings of $559.6 million in the first nine months of 2024. Segment margins were 24.2 percent and 23.1 percent in the third quarter of 2025 and 2024, respectively. Segment margins were 24.8 percent in the first nine months of both 2025 and 2024. Higher segment earnings and segment margin in the third quarter of 2025 and higher segment earnings for the first nine months of 2025 compared to the prior year periods were primarily due to pricing actions and higher commercial water heater and boiler volumes that more than offset higher material and other input costs. We estimate our 2025 North America segment margin will be approximately 24 to 24.5 percent.

Previous wording

Sales in the Rest of World segment were $240.1 million in the second quarter of 2025, compared to $244.8 million in the second quarter of 2024. Sales in the first six months of 2025 were $466.8 million, or $4.9 million lower than sales of $471.7 million in the same period last year. Compared to the prior year quarter, the decrease in sales was primarily due to lower volumes of our residential water treatment and water heater products in China that were partially offset by incremental sales related to our 2024 acquisition of Pureit which added approximately $16 million in net sales. Our net sales decrease in the first six months of 2025 was due to lower volumes of our residential water treatment and water heater products in China that were partially offset by incremental sales related to our 2024 acquisition of Pureit which added approximately $28 million in net sales.

Current wording

Sales in the Rest of World segment were $207.9 million in the third quarter of 2025, compared to $210.3 million in the third quarter of 2024. Sales in the first nine months of 2025 were $674.7 million, or $7.3 million lower than sales of $682.0 million in the same period last year. The decreases in sales in the third quarter and first nine months of 2025 compared to same periods in 2024 were primarily due to lower volumes of our residential water treatment and water heater products in China that were partially offset by incremental sales related to our 2024 acquisition of Pureit, which added approximately $17 million and $45 million in net sales in the third quarter and first nine month of 2025 respectively.

Previous wording

Rest of World segment earnings were $25.3 million in the second quarter of 2025, or $0.6 million lower compared to $25.9 million in the second quarter of 2024. Segment earnings in the first six months of 2025 were $45.0 million, an increase of $1.9 million compared to segment earnings of $43.1 million in the first six months of 2024. Segment margins were 10.5 percent and 10.6 percent in the second quarter of 2025 and 2024, respectively. Segment margins were 9.6 percent and 9.1 percent in the first six months of 2025 and 2024, respectively. The lower segment earnings and segment margin in the second quarter of 2025 compared to the prior quarter were primarily driven by lower volumes in China, which were partially offset by cost reduction actions. The higher segment earnings and segment margin in the first six months of 2025 compared to the prior year were primarily driven by cost reduction actions and benefits from our fourth quarter of 2024 restructuring actions which more than offset lower volumes in China. We estimate our 2025 Rest of World segment margin will be approximately eight to nine percent.

Current wording

Rest of World segment earnings were $15.4 million in the third quarter of 2025, or $1.8 million higher compared to $13.6 million in the third quarter of 2024. Segment earnings in the first nine months of 2025 were $60.4 million, an increase of $3.7 million compared to segment earnings of $56.7 million in the first nine months of 2024. Segment margins were 7.4 percent and 6.5 percent in the third quarter of 2025 and 2024, respectively. Segment margins were 9.0 percent and 8.3 percent in the first nine months of 2025 and 2024, respectively. The higher segment earnings and segment margin in the third quarter and first nine months of 2025 compared to the prior quarter and prior year were primarily driven by benefits of our 2024 restructuring actions and tight spending controls in China that more than offset the lower China volumes. We estimate our 2025 Rest of World segment margin will be approximately eight percent.

Previous wording

We expect our consolidated sales in 2025 to increase between one and three percent compared to 2024. Our projection is driven by expected boiler sales growth of between four and six percent and flat industry residential and commercial volumes in North America in 2025 compared to 2024. In our Rest of the World segment, after a challenging 2024, we expect consumer demand softness will persist in 2025 in China and a decline in third-party sales. We intend to mitigate the impact of tariffs through pricing actions, footprint optimization, strategic sourcing actions and other cost containment initiatives We expect full-year earnings of between $3.70 and $3.90 per share. Our guidance excludes the impacts from potential future acquisitions and any potential outcomes of the assessment of the China business.

Current wording

We expect our consolidated sales in 2025 to be flat to up one percent compared to 2024. Our projection is driven by expected boiler sales growth of between four and six percent, low single digit growth in commercial industry volumes, offset by flat to slightly down residential industry volumes in North America in 2025 compared to 2024. In our Rest of the World segment, after a challenging 2024, we expect consumer demand softness will persist in 2025 in China leading to a decline in third-party sales. We expect full-year earnings of between $3.70 and $3.85 per share. Our guidance excludes the impacts from potential future acquisitions and any potential outcomes of the assessment of the China business.

Previous wording

Our working capital was $545.5 million at June 30, 2025, compared with $495.7 million at December 31, 2024. The increase in working capital was primarily related to higher receivable balances and lower accounts payable and partially offset by lower cash balances. As of June 30, 2025, cash balances were positively impacted by $2.9 million due to changes in foreign currency during the quarter. Cash and cash equivalents used to fund our operations are primarily generated through operating activities and our existing credit facilities. We believe our available cash and existing credit facilities are sufficient to cover our cash needs for the foreseeable future. We use a global cash pooling arrangement, intercompany borrowing, and some local credit lines to meet funding needs and allocate capital resources among various entities. We have historically made and anticipate future cash repatriations from certain foreign subsidiaries. In the first six months of 2025, we repatriated approximately $72 million of cash from our foreign subsidiaries and used the proceeds to pay down outstanding debt balances.

Current wording

Our working capital was $463.6 million at September 30, 2025, compared with $495.7 million at December 31, 2024. The decrease in working capital was primarily related to lower inventory and cash balances. As of September 30, 2025, cash balances were positively impacted by changes in foreign currency during the quarter of $2.7 million. Cash and cash equivalents used to fund our operations are primarily generated through operating activities and our existing credit facilities. We believe our available cash and existing credit facilities are sufficient to cover our cash needs for the foreseeable future. We use a global cash pooling arrangement, intercompany borrowing, and some local credit lines to meet funding needs and allocate capital resources among various entities. We have historically made and anticipate future cash repatriations from certain foreign subsidiaries. In the first nine months of 2025, we repatriated approximately $93 million of cash from our foreign subsidiaries and used the proceeds to pay down outstanding debt balances.

Previous wording

Cash provided by operations in the first six months of 2025 was $178.3 million and higher than $164.0 million in the first six months of 2024, primarily due to lower cash outlays for working capital needs in 2025 that were partially offset by lower current year earnings. Our free cash flow in the first six months of 2025 and 2024 was $139.9 million and $119.1 million, respectively. We expect cash provided by operating activities to be between $600 million and $625 million in 2025. We expect free cash flow to be between $500 million and $525 million in 2025. Free cash flow is a non-GAAP measure described in more detail in the Non-GAAP Measures section below.

Current wording

Cash provided by operations in the first nine months of 2025 was $433.7 million and higher than $359.9 million in the first nine months of 2024, primarily due to lower inventory balances that were partially offset by other working capital outlays including lower customer deposits in China. Our free cash flow in the first nine months of 2025 and 2024 was $380.5 million and $282.5 million, respectively. We expect cash provided by operating activities to be approximately $600 million in 2025. We expect free cash flow to be approximately $500 million in 2025. Free cash flow is a non-GAAP measure described in more detail in the Non-GAAP Measures section below.

Previous wording

Capital expenditures totaled $38.4 million in the first six months of 2025 compared with $44.9 million in the same period last year. We project that 2025 capital expenditures will be between $90 million and $100 million and full-year depreciation and amortization expense will be approximately $80 million.

Current wording

Capital expenditures totaled $53.2 million in the first nine months of 2025 compared with $77.4 million in the same period last year. We project that 2025 capital expenditures will be approximately $75 million and full-year depreciation and amortization expense will be approximately $80 million.

Previous wording

In 2024, we renewed and amended our $500 million revolving credit facility ("renewed facility") which now expires on August 23, 2029. The renewed facility is with a group of nine banks and has an accordion provision that allows it to be increased up to $1 billion if certain conditions (including lender approval) are satisfied. Borrowing rates under the renewed facility are determined by our leverage ratio. The renewed facility requires us to maintain two financial covenants, a leverage ratio test and an interest coverage test, and we were in compliance with the covenants as of June 30, 2025, and expect to be in compliance for the foreseeable future. The renewed facility backs up commercial paper and credit line borrowings. At June 30, 2025, we had $145.0 million of borrowings outstanding under the renewed facility and an available borrowing capacity of $355.0 million. We believe the combination of available borrowing capacity and operating cash flows will provide sufficient funds to finance our existing operations for the foreseeable future.

Current wording

In 2024, we renewed and amended our $500 million revolving credit facility ("renewed facility") which now expires on August 23, 2029. The renewed facility is with a group of nine banks and has an accordion provision that allows it to be increased up to $1 billion if certain conditions (including lender approval) are satisfied. Borrowing rates under the renewed facility are determined by our leverage ratio. The renewed facility requires us to maintain two financial covenants, a leverage ratio test and an interest coverage test, and we were in compliance with the covenants as of September 30, 2025, and expect to be in compliance for the foreseeable future. The renewed facility backs up commercial paper and credit line borrowings. At September 30, 2025, we had $30.0 million of borrowings outstanding under the renewed facility and an available borrowing capacity of $470.0 million. We believe the combination of available borrowing capacity and operating cash flows will provide sufficient funds to finance our existing operations for the foreseeable future.

Previous wording

Our total debt increased by $110.2 million in the first six months of 2025 as we used available cash to fund our stock repurchase program. Our leverage, as measured by the ratio of total debt to total capitalization, was 14.1 percent at June 30, 2025, compared with 9.3 percent at December 31, 2024.

Current wording

Our total debt decreased by $7.4 million in the first nine months of 2025 as we used available cash to pay down outstanding debt balances. Our leverage, as measured by the ratio of total debt to total capitalization, was 9.2 percent at September 30, 2025, compared with 9.3 percent at December 31, 2024.

Previous wording

In the first quarter of 2025, our Board of Directors approved adding 5,000,000 shares of common stock to the existing discretionary share repurchase authority. Under the share repurchase program, the common stock may be purchased through a combination of Rule 10b5-1 automatic trading plan and discretionary purchases in accordance with applicable securities laws. The stock repurchase authorization remains effective until terminated by our Board of Directors which may occur at any time, subject to the parameters of any Rule 10b5-1 automatic trading plan that we may then have in effect. During the first six months of 2025, we repurchased 3,786,073 shares at an average price of $66.37 per share and at a total cost of $251.3 million. As of

Current wording

In the first quarter of 2025, our Board of Directors approved adding 5,000,000 shares of common stock to the existing discretionary share repurchase authority. Under the share repurchase program, common stock may be purchased through a combination of Rule 10b5-1 automatic trading plan and discretionary purchases in accordance with applicable securities laws. The stock repurchase authorization remains effective until terminated by our Board of Directors which may occur at any time, subject to the parameters of any Rule 10b5-1 automatic trading plan that we may then have in effect. During the first nine months of 2025, we repurchased 4,976,377 shares at an average price of $67.39 per share and at a total cost of $335.4 million. As of September 30, 2025, there were 1,769,748 shares remaining on the existing repurchase authorization. Depending on factors such as stock price, working capital requirements, and alternative investment opportunities, we expect to spend approximately $400 million on stock repurchases in 2025 through a combination of any Rule 10b5-1 automatic trading plan and open market repurchases.

Previous wording

On July 7, 2025, our Board of Directors declared a regular quarterly cash dividend of $0.34 per share on our Common Stock and Class A common stock. The dividend is payable on August 15, 2025, to shareholders of record on July 31, 2025.

Current wording

On October 13, 2025, our Board of Directors declared a regular quarterly cash dividend of $0.36 per share on our Common Stock and Class A common stock. The dividend is payable on November 17, 2025, to shareholders of record on October 31, 2025.

Previous wording

This filing contains statements that the Company believes are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally can be identified by the use of words such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe,” “forecast,” “continue,” “guidance,” “outlook” or words of similar meaning. All forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those anticipated as of the date of this filing. Important factors that could cause actual results to differ materially from these expectations include, among other things, the following: 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; 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; 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; 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 …

Excerpt shortened here; the source contains the full paragraph.

Current wording

This filing contains statements that the Company believes are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally can be identified by the use of words such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe,” “forecast,” “continue,” “guidance,” “outlook” or words of similar meaning. All forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those anticipated as of the date of this filing. Important factors that could cause actual results to differ materially from these expectations include, among other things, the following: 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; 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; 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; 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. A more detailed description of these risks is contained under the hea…

Excerpt shortened here; the source contains the full paragraph.