SMITH A O CORP (AOS) Risk Factors

Recent key developments

Concrete developments — dated events, named agreements and instruments, legal proceedings — that SMITH A O CORP surfaced in its latest filing.

• Two of our manufacturing plants are located within a floodplain that has experienced past flooding events.
• Approximately 18 percent of our sales in 2025 were attributable to China.2025
• Our third-party sales in China decreased twelve percent in local currency in 2025 compared to 2024.2025
• In 2025, we announced a strategic assessment of our China business.2025
• Approximately 4,200 of our 11,500 employees as of December 31, 2025 were located in China.2025-12-31
• At December 31, 2025, approximately $140 million of cash and marketable securities were held by our foreign subsidiaries, substantially all of which were located in China.2025-12-31
• Sales to our five largest customers represented approximately 41 percent of our sales in 2025.2025
• Residential new construction activity in North America declined in 2025.2025
• Industry-wide replacement-related volume of water heaters was flat compared to 2024.2024
• U.S. new residential housing starts are projected to be approximately flat in 2026 compared to 2025.2026
• U.S. housing completions are expected to decrease in 2026 compared to 2025.2026
• Commercial construction activity in North America grew in 2025.2025
• We hold $83 million of cash and marketable securities denominated in Chinese renminbi.
• DOE adopted a new efficiency rule for commercial water heaters taking effect in October 2026.2026-10
• DOE adopted a new efficiency rule for residential water heaters taking effect in 2029.2029
• As of December 31, 2025, the Smith Family voting trust owns approximately 67.8% of total voting power of both classes combined and approximately 97.0% of voting power of Class A Common Stock.2025-12-31