Company: AOS
Filing Date: 2025-07-24
Form Type: 10-Q
Source: 0000091142-25-000100
Chunk: 48

Company: SMITH A O CORP
Filing Date: 2025-07-24
Form: 10-Q
Item: Part I, Item 2
Chunk 48
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 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.

Liquidity & Capital Resources

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.

(dollars in millions)Six Months EndedJune 30,20252024Cash provided by operating activities$178.3 $164.0 Cash used in investing activities(1.8)(60.1)Cash used in financing activities(241.1)(223.7)

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