Company: AOS
Filing Date: 2025-10-28
Form Type: 10-Q
Source: 0000091142-25-000150
Chunk: 48

Company: SMITH A O CORP
Filing Date: 2025-10-28
Form: 10-Q
Item: Part I, Item 2
Chunk 48
---
 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.

22

Liquidity & Capital Resources

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.

(dollars in millions)Nine Months EndedSeptember 30,20252024Cash provided by operating activities$433.7 $359.9 Cash used in investing activities(36.7)(111.1)Cash used in financing activities(486.6)(367.7)

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 202