Company: AOS
Filing Date: 2025-04-29
Form Type: 10-Q
Source: 0000091142-25-000075
Chunk: 32

Company: SMITH A O CORP
Filing Date: 2025-04-29
Form: 10-Q
Item: Part I, Item 8
Chunk 32
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 record on April 30, 2025.

21

Non-GAAP Financial Information

We provide non-GAAP measures of free cash flow. We define free cash flow as cash provided by operating activities less capital expenditures. We believe that free cash flow provides useful additional information concerning cash flow available to meet future debt service obligations and working capital requirements. 

A. O. SMITH CORPORATION

Free Cash Flow

(dollars in millions)

(unaudited)

The following is a reconciliation of reported cash flow from operating activities to free cash flow (non-GAAP):

Three Months EndedMarch 31,20252024Cash provided by operating activities (GAAP)$38.7 $106.6 Less: Capital expenditures(21.3)(22.0)Free cash flow (non-GAAP)$17.4 $84.6 

A. O. SMITH CORPORATION

2025 EPS Guidance and 2024 Adjusted EPS

(unaudited)

The following is a reconciliation of diluted EPS to adjusted EPS (non-GAAP) (all items are net of tax):

2025Guidance2024Diluted EPS (GAAP)$3.60-3.90$3.63 Restructuring and impairment expense— 0.10 (1)Adjusted EPS (non-GAAP)$3.60-3.90$3.73 

(1)Includes pre-tax restructuring and impairment expenses of $11.3 million and $6.3 million, within the Rest of World segment and North America segment, respectively.

22

Critical Accounting Policies 

Our consolidated financial statements are prepared in conformity with accounting principles generally accepted in the U.S., which requires the use of estimates and assumptions about future events that affect the amounts reported in the financial statements and accompanying notes. Future events and their effects cannot be determined with absolute certainty. Therefore, the determination of estimates requires the exercise of judgment. Actual results inevitably will differ from those estimates, and such differences may be material to the financial statements. The critical accounting policies that we believe could have the most significant effect on our reported results or require complex judgment by management are contained in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, of our Annual Report on Form 10-K for the year ended December 31, 2024. We believe that at March 31, 2025, there was no material change to this information.

Recent Accounting Pronouncements 

Refer to Recent Accounting Pronouncements in Note 1 – Basis of