A. O. Smith

“■Because approximately 18 percent of our sales in 2025 were attributable to China, adverse economic conditions or changes in consumer behavior in China could impact our business Our third-party sales in China decreased twelve percent in local currency in 2025 compared to 2024. We derive a substantial portion of our sales in China from premium-tier products.”

Annual report 2025A · The company itself

“Changes in consumer preferences and purchasing behaviors including preferences for e-commerce and manufacturer emphasis on brand ecosystems and connectivity, weakening 8 Table of Contents consumer confidence and sentiment, as well as economic uncertainty, sociopolitical and demographic risks, availability of government incentives, and increased competition from Chinese-based companies may prompt Chinese consumers to postpone purchases, choose lower-priced products or different alternatives, or lengthen the cycle of replacement purchases.”

Annual report 2025A · The company itself

“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.”

Annual report 2025A · The company itself

“In our Rest of World segment, China third-party sales declined 12 percent in local currency in 2025 due to continued weak consumer demand and the cessation of the government appliance subsidy programs in the second half of the year.”

Annual report 2025A · The company itself

“Approximately 4,200 of our 11,500 employees as of December 31, 2025 were located in China.”

Annual report 2025A · The company itself

“In the third quarter of 2025, we initiated an assessment of strategic opportunities for our China business, including strategic partnerships and other alternatives.”

Annual report 2025A · The company itself

“Our trade name is important with respect to our products, particularly in China, India, and North America.”

Annual report 2025A · The company itself

“In 2025, we announced a strategic assessment of our China business. This may lead to uncertain outcomes, costs, and impacts that could negatively affect the company.”

Annual report 2025A · The company itself

“We manufacture and market residential water heater and water treatment products, primarily incorporating reverse osmosis technology, and commercial dispensing water treatment products. The Chinese water heater market is predominantly comprised of electric wall-hung, gas tankless, combi-boiler, heat pump and solar water heaters.”

Annual report 2025A · The company itself

“We sell our products in approximately 8,700 points of sale in China, of which approximately 3,800 are retail outlets in tier one through tier three cities and approximately 1,400 exclusively sell our products. We also sell our products through e-commerce channels.”

Annual report 2025A · The company itself

“We have operated in China for 30 years. In that time, we have established A. O. Smith brand recognition in the residential and commercial markets.”

Annual report 2025A · The company itself

“Business, Operational, and Strategic Risks ■We sell our products and operate outside the U.S., and to a lesser extent, rely on imports and exports, which may present additional risks to our business Approximately 31 percent of our sales in 2025 were attributable to products sold outside of the U.S., primarily in China and Canada, and to a lesser extent in India and Europe.”

Annual report 2025A · The company itself

“Net Sales $ 880.4 $ 918.6 Segment Earnings 76.4 64.5 Segment Margin 8.7 % 7.0 % Sales in our Rest of World segment were $880.4 million in 2025, or $38.2 million lower than sales of $918.6 million in 2024. Our net sales decrease in 2024 was due to lower volumes of our residential water treatment and water heater products in China that were partially offset by incremental sales of approximately $53 million related to our 2024 acquisition of Pureit.”

Annual report 2025A · The company itself

“■Our international operations are subject to risks related to foreign currencies We have a significant presence outside of the U.S., primarily in China and Canada and to a lesser extent India, Europe, and Mexico, and therefore, hold assets, including $83 million of cash and marketable securities denominated in Chinese renminbi, incur liabilities, earn revenues and pay expenses in a variety of currencies other than the U.S. dollar.”

Annual report 2025A · The company itself

“■A portion of our business could be adversely affected by a further decline in North American new residential or commercial construction or a decline in replacement-related volume of water heaters and boilers, including a decline in demand for commercial spaces Residential new construction activity in North America declined in 2025 and industry-wide replacement-related volume of water heaters was flat compared to 2024.”

Annual report 2025A · The company itself

“Commercial construction activity in North America grew in 2025.”

Annual report 2025A · The company itself

“Both segments manufacture and market comprehensive lines of residential and commercial gas, heat pump and electric water heaters, boilers, tanks, and water treatment products.”

Annual report 2025A · The company itself

“Our boiler sales grew eight percent in 2025 primarily due to higher volumes and pricing benefits.”

Annual report 2025A · The company itself

“In our North America segment, water heater sales increased one percent in 2025 compared to 2024 as pricing benefits and higher commercial volumes were partially offset by lower wholesale residential volumes.”

Annual report 2025A · The company itself

“The higher gross profit margin in 2025 compared to 2024 was primarily driven by the benefits of pricing actions implemented early in 2025 to address increased input costs in North America and higher mix of commercial water heaters and boilers.”

Annual report 2025A · The company itself

“There has been volatility in steel costs over the last several years.”

Annual report 2025A · The company itself

“Significant increases in the cost of any of the key materials and components we purchase would increase our cost of doing business and ultimately could lead to lower operating earnings if we are not able to recover these cost increases through price increases to our customers. Historically, there has been a lag in our ability to recover increased material costs from customers, and that lag, could negatively impact our profitability.”

Annual report 2025A · The company itself

“RAW MATERIALS Raw materials for our manufacturing operations, primarily consisting of steel, are generally available in adequate quantities.”

Annual report 2025A · The company itself

“■Our operations could be adversely impacted by material and component price volatility, as well as supplier concentration The market prices for certain materials and components we purchase, primarily steel, can be volatile. In recent years, we have also experienced inflation-related increases in our transportation and input costs.”

Annual report 2025A · The company itself

“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 continue to mitigate the impact of tariffs through footprint optimization, strategic sourcing actions and other cost containment initiatives.”

Annual report 2025A · The company itself

“A portion of our customers are contractually obligated to accept price changes based on fluctuations in steel prices.”

Annual report 2025A · The company itself

“■Our business could be adversely impacted by changes in consumer purchasing behavior, consumer preferences, technological changes, and market trends Consumer preferences for products and the methods in which they purchase products are constantly changing based on, among other factors, cost, performance, convenience, availability of government incentives, environmental and social concerns and perceptions. As consumer confidence changes, purchasing behavior may shift the product mix to lower priced models in the markets in which we participate or result in a shift to other distribution channels, for example e-commerce.”

Annual report 2025A · The company itself

“We sell our A. O. Smith branded water treatment products primarily through our water quality dealer network and Amazon.”

Annual report 2025A · The company itself

“Our Aquasana branded products are primarily sold directly to consumers through e-commerce channels.”

Annual report 2025A · The company itself

“We sell our products in approximately 8,700 points of sale in China, of which approximately 3,800 are retail outlets in tier one through tier three cities and approximately 1,400 exclusively sell our products. We also sell our products through e-commerce channels.”

Annual report 2025A · The company itself

“We believe that the significant majority of the markets we serve are for the replacement of existing products, and residential water heater replacement volume has been strong. In recent years, businesses and commercial spaces have experienced and may experience in the future, fluctuation in demand and in occupancy that may reduce demand for our products, and commercial sectors, such as the restaurant and hospitality industries in which we have customers, may experience long-term shifts in consumer behavior which could negatively impact demand or capacity.”

Annual report 2025A · The company itself

“Our residential and commercial boilers range in size from 45,000 British Thermal Units (BTUs) to 6.0 million BTUs. Boilers are closed loop water heating systems used primarily for space heating or hydronic heating. Our boilers are primarily used in applications in commercial settings for hospitals, schools, hotels and other large commercial buildings while residential boilers are used in homes, apartments and condominiums.”

Annual report 2025A · The company itself

“In our North America segment, we also manufacture expansion tanks, commercial solar water heating systems, swimming pool and spa heaters, related products and parts.”

Annual report 2025A · The company itself

“Typical applications for our water treatment products include residences, restaurants, schools and offices.”

Annual report 2025A · The company itself

“There is also increasing use of data analytics, machine learning, and artificial intelligence software, which our competitors may be able to use more effectively or implement more successfully than we are able to do.”

Annual report 2025A · The company itself

“Use of artificial intelligence software may also create risks from unintentional disclosure of proprietary, confidential, personal or otherwise sensitive information.”

Annual report 2025A · The company itself

“Our ability to respond to these trends, timely transition our product portfolio, develop new and innovative products, and acquire and protect the necessary intellectual property rights is essential to our continued success, but cannot reasonably be assured. It is possible that we will not be able to develop new technologies, products or distribution channels, or do so on a timely basis, to align with consumer purchasing behavior and consumer preferences, which could materially and adversely affect our financial condition, results of operations and cash flows.”

Annual report 2025A · The company itself

“Our trade name is important with respect to our products, particularly in China, India, and North America.”

Annual report 2025A · The company itself

“We believe the China market has substantial long-term prospects and are committed to realizing the potential upside inherent in our China business In 2008, we established a sales office in India and began importing products specifically designed for India. We began manufacturing water heaters in India in 2010 and water treatment products in 2015. In 2024, we expanded our product offerings and geographic footprint with the acquisition of Pureit, formerly a Unilever PLC business. Pureit offers a broad range of residential water purification solutions in India and other South Asian markets.”

Annual report 2025A · The company itself

“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.”

Annual report 2025A · The company itself

“Consumer preferences and broader trends, such as decarbonization and electrification efforts in response to climate change, may result in reduced demand for gas or fossil fuel-powered products and increased demand for higher efficiency products and/or more electric powered products.”

Annual report 2025A · The company itself

“Our energy-efficient product offerings continue to be a sales driver for our business. Our condensing commercial water heaters and boilers continue to be an option for commercial customers looking for high-efficiency water and space heating with a short payback period through energy savings. We offer residential heat pumps, condensing tank-type and tankless 3 Table of Contents water heaters in North America, as well as other higher efficiency water heating solutions to round out our energy-efficient product offerings.”

Annual report 2025A · The company itself

“We offer a complete line of water and hydronic heating products, including electric-powered water heaters and boilers, and we believe that any reduction in fossil fuel-powered products would be counterbalanced by a corresponding increase in demand for our non-fossil fuel powered products. We are confident that our continued emphasis on product design and innovation, including energy efficiency, will keep us well positioned to deliver products demanded by customers, regardless of fuel source.”

Annual report 2025A · The company itself

“In addition, we are expanding our commercial water heater capacity in North America in preparation for the new efficiency rule for commercial water heaters that the Department of Energy (DOE) has adopted that will take effect in October 2026.”

Annual report 2025A · The company itself

“Our energy-efficient product offerings continue to be a sales driver for our business. Our condensing commercial water heaters and boilers continue to be an option for commercial customers looking for high-efficiency water and space heating with a short payback period through energy savings. We offer residential heat pumps, condensing tank-type and tankless 3 Table of Contents water heaters in North America, as well as other higher efficiency water heating solutions to round out our energy-efficient product offerings.”

Annual report 2025A · The company itself

“For example, the U.S. Department of Energy (DOE) has adopted a new efficiency rule for commercial water heaters that will take effect in October 2026. The DOE has also adopted a new efficiency rule for our residential water heaters that will take effect in 2029, which seeks to rapidly increase market adoption of heat pump water heating technology.”

Annual report 2025A · The company itself

“Our trade name is important with respect to our products, particularly in China, India, and North America.”

Annual report 2025A · The company itself

“NORTH AMERICA Sales in our North America segment accounted for approximately 78 percent of our total sales in 2025.”

Annual report 2025A · The company itself

“Our residential and commercial boilers range in size from 45,000 British Thermal Units (BTUs) to 6.0 million BTUs. Boilers are closed loop water heating systems used primarily for space heating or hydronic heating. Our boilers are primarily used in applications in commercial settings for hospitals, schools, hotels and other large commercial buildings while residential boilers are used in homes, apartments and condominiums.”

Annual report 2025A · The company itself

“Typical applications for our water treatment products include residences, restaurants, schools and offices.”

Annual report 2025A · The company itself

“Our residential and commercial boilers range in size from 45,000 British Thermal Units (BTUs) to 6.0 million BTUs. Boilers are closed loop water heating systems used primarily for space heating or hydronic heating. Our boilers are primarily used in applications in commercial settings for hospitals, schools, hotels and other large commercial buildings while residential boilers are used in homes, apartments and condominiums.”

Annual report 2025A · The company itself

“Both segments manufacture and market comprehensive lines of residential and commercial gas, heat pump and electric water heaters, boilers, tanks, and water treatment products.”

Annual report 2025A · The company itself

“There are also a number of foreign, federal, state and local governments adopting laws, regulations and codes in response to climate change that will require a mandatory transition to non-fossil fuel based sources of space and water heating equipment in the building sector.”

Annual report 2025A · The company itself

“We also recently introduced our internally designed and manufactured gas tankless water heaters in North America.”

Annual report 2025A · The company itself

“In the retail channel, our customers include four of the six largest national hardware and home center chains, including a long-standing exclusive relationship with Lowe’s where we sell A. O. Smith branded products.”

Annual report 2025A · The company itself

“We continue to look for opportunities to add to our existing product portfolio in high growth regions demonstrated by our previous introductions of kitchen products and connected product technologies in China.”

Annual report 2025A · The company itself

“In addition, evolving national drinking water standards regulating per- and poly-fluoroalkyl substances (PFAS), as well as mandatory lead pipe replacements by public water utilities, could affect the demand for our water filtration products.”

Annual report 2025A · The company itself

“We anticipate sales of our North America water treatment products will grow between 10 and 12 percent primarily due to tariff-related pricing benefits and as we continue to expand our dealer network.”

Annual report 2025A · The company itself

“Our ability to respond to these trends, timely transition our product portfolio, develop new and innovative products, and acquire and protect the necessary intellectual property rights is essential to our continued success, but cannot reasonably be assured. It is possible that we will not be able to develop new technologies, products or distribution channels, or do so on a timely basis, to align with consumer purchasing behavior and consumer preferences, which could materially and adversely affect our financial condition, results of operations and cash flows.”

Annual report 2025A · The company itself

“Consistent with our stated strategic priorities, we continue to seek acquisitions that enable growth, expand our core business, and establish adjacencies. In November 2025, we announced that we signed a definitive agreement to acquire LVC Holdco LLC (Leonard Valve) for $470 million, subject to customary adjustments, and was funded with cash borrowed under a new term loan with a group of eight banks.”

Annual report 2025A · The company itself

“Our wholesale distribution channel, where we sell our products primarily under the A. O. Smith and State brands, includes approximately 800 independent wholesale plumbing distributors serving residential and commercial end markets. We also sell our residential water heaters through the retail and maintenance, repair and operations (MRO) channels.”

Annual report 2025A · The company itself

“Both segments manufacture and market comprehensive lines of residential and commercial gas, heat pump and electric water heaters, boilers, tanks, and water treatment products.”

Annual report 2025A · The company itself

“In addition, tariffs have increased volatility in input materials.”

Annual report 2025A · The company itself

“■Import tariffs, taxes, customs duties and other trading regulations imposed by the U.S. government and retaliatory responses from other countries, could significantly increase the prices we pay for raw materials that are critical to our ability to manufacture our products Import tariffs, taxes, customs duties and other trading regulations imposed by the U.S. government on foreign countries, or by foreign countries on the U.S., could significantly increase the prices we pay for raw materials that are critical to our ability to manufacture our products. In addition, we may be unable to find a domestic supplier to provide the necessary raw materials on an economical basis in the amounts we require. Also, the current U.S. administration has imposed new tariffs and raised the possibility of imposing additional new or increased tariffs.”

Annual report 2025A · The company itself

“Any widespread imposition of additional new or increased tariffs could increase the cost of and reduce the demand for our products and any cost increases will require us to increase prices, foreclose our sales into impacted markets or negatively impact our profit margins.”

Annual report 2025A · The company itself

“In addition tariffs could potentially increase volatility in prices of steel and other input materials.”

Annual report 2025A · The company itself

“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 continue to mitigate the impact of tariffs through footprint optimization, strategic sourcing actions and other cost containment initiatives.”

Annual report 2025A · The company itself

“Economic and Industry Risks ■The effects of global and regional economic conditions could have a material adverse effect on our business A decline in economic activity, such as a recession or economic downturn, in the U.S., China, and other regions in the world in which we do business, could further adversely affect consumer confidence and spending patterns which could result in decreased demand for the products we sell, a delay in purchases, increased price competition, or slower adoption of energy-efficient water heaters and boilers, or high-quality water treatment products, which could negatively impact our profitability and cash flows.”

Annual report 2025A · The company itself

“New or increased tariffs could also negatively affect U.S. national or regional economies, which could negatively affect the demand for our products.”

Annual report 2025A · The company itself

“We estimate that 2025 residential industry unit volumes were approximately flat compared to the prior year and we project 2026 industry residential unit volumes will be flat to down, driven by softness in new construction.”

Annual report 2025A · The company itself

“In our Rest of World segment, China third-party sales declined 12 percent in local currency in 2025 due to continued weak consumer demand and the cessation of the government appliance subsidy programs in the second half of the year. For the full year 2026, we project our third-party sales in China to decrease mid-single digits in local currency compared to 2025 due to continued softness in consumer demand.”

Annual report 2025A · The company itself

“In 2024, we launched our newly designed ADAPT condensing gas tankless water heater and VERITUS air source commercial heat pump water heater to align with greenhouse gas emission reduction trends across the U.S. The VERITUS and ADAPT model lines were further expanded in 2025. We also recently launched our Cyclone Flex commercial condensing water heater with advanced features ahead of the upcoming October 2026 Department of Energy (DOE) commercial rule that will require all commercial water heaters to be condensing.”

Annual report 2025A · The company itself

“In recent years, a number of states and local authorities have proposed or implemented bans on gas-fired products in new construction in an effort to address greenhouse gas emissions. Similar laws and regulations have been adopted by government authorities in other countries in which we manufacture, distribute, and sell our products.”

Annual report 2025A · The company itself

“Department of Energy (DOE) has adopted a new efficiency rule for commercial water heaters that will take effect in October 2026. The DOE has also adopted a new efficiency rule for our residential water heaters that will take effect in 2029, which seeks to rapidly increase market adoption of heat pump water heating technology.”

Annual report 2025A · The company itself

“There are also a number of foreign, federal, state and local governments adopting laws, regulations and codes in response to climate change that will require a mandatory transition to non-fossil fuel based sources of space and water heating equipment in the building sector.”

Annual report 2025A · The company itself

“Economic and Industry Risks ■The effects of global and regional economic conditions could have a material adverse effect on our business A decline in economic activity, such as a recession or economic downturn, in the U.S., China, and other regions in the world in which we do business, could further adversely affect consumer confidence and spending patterns which could result in decreased demand for the products we sell, a delay in purchases, increased price competition, or slower adoption of energy-efficient water heaters and boilers, or high-quality water treatment products, which could negatively impact our profitability and cash flows.”

Annual report 2025A · The company itself

“In our Rest of World segment, China third-party sales declined 12 percent in local currency in 2025 due to continued weak consumer demand and the cessation of the government appliance subsidy programs in the second half of the year.”

Annual report 2025A · The company itself

“Such deterioration in economic conditions could arise from many factors or fears including public health crises, further deterioration in the property market, political instability or risk of government default.”

Annual report 2025A · The company itself

“■The occurrence or threat of extraordinary events, including natural disasters, political disruptions, terrorist attacks, public health issues, and acts of war, could significantly disrupt production, or impact consumer spending As a global company with a large international footprint, we are subject to increased risk of damage or disruption to us and our employees, facilities, suppliers, distributors, or customers. Extraordinary events, including natural disasters, resulting from but not limited to climate change, political disruptions, terrorist attacks, public health issues and acts of war may disrupt our business and operations and impact our supply chain and access to necessary raw materials or could adversely affect the economy generally, resulting in a loss of sales and customers.”

Annual report 2025A · The company itself

“■A portion of our business could be adversely affected by a further decline in North American new residential or commercial construction or a decline in replacement-related volume of water heaters and boilers, including a decline in demand for commercial spaces Residential new construction activity in North America declined in 2025 and industry-wide replacement-related volume of water heaters was flat compared to 2024.”

Annual report 2025A · The company itself

“HUMAN CAPITAL We employed approximately 11,500 employees as of December 31, 2025 with approximately 6,500 in North America and 5,000 in Rest of World.”

Annual report 2025A · The company itself

“Approximately 4,200 of our 11,500 employees as of December 31, 2025 were located in China.”

Annual report 2025A · The company itself

“The increase in SG&A expenses in 2025 compared to the prior year was primarily due to higher employee costs, partially offset by benefits of our 2024 China restructuring actions.”

Annual report 2025A · The company itself

“A significant portion of our North America sales is derived from the replacement of existing products.”

Annual report 2025A · The company itself

“Such deterioration in economic conditions could arise from many factors or fears including public health crises, further deterioration in the property market, political instability or risk of government default.”

Annual report 2025A · The company itself

“In addition, an increase in price levels generally or in particular industries, could result in a consumer shift away from the products we offer, including electing to purchase lower priced models, which could adversely affect our revenues and, at the same time, increase our costs.”

Annual report 2025A · The company itself

“A deterioration in economic conditions also could negatively impact our vendors and customers, which could result in an increase in bad debt expense, customer and vendor bankruptcies, interruption or delay in supply of materials, or increased material prices, which could negatively impact our ability to distribute, market and sell our products and our financial condition, results of operations and cash flows.”

Annual report 2025A · The company itself

“The majority of our foreign currency transaction risk results from sales of our products in Canada, a portion of which we manufacture in the U.S., and to a lesser extent from component purchases in India and Europe and payroll in Mexico.”

Annual report 2025A · The company itself

“■Our business may be adversely impacted by product defects Product defects can occur through our own product development, design and manufacturing processes or through our reliance on third parties for component design and manufacturing activities. We may incur various expenses related to product defects, including product warranty costs, product liability and recall or retrofit costs.”

Annual report 2025A · The company itself

“Natural disasters and extreme weather conditions may disrupt the productivity of our facilities. For example, two of our manufacturing plants are located within a floodplain that has experienced past flooding events. We also have other manufacturing facilities located in hurricane and earthquake zones.”

Annual report 2025A · The company itself

“Our information systems are susceptible to outages due to system failures, cybersecurity threats, failures on the part of third-party information system providers, natural disasters, power loss, telecommunications failures, viruses, fraud, theft, malicious actors or breaches of security. Like many companies, we, and some third parties upon which we rely, have experienced cybersecurity incidents and attacks on information technology networks and systems, products and services in the past but, to date, none have resulted in a material breach or had a material adverse impact on our financial condition, results of operations, or cash flows.”

Annual report 2025A · The company itself

“Although we intend to meet these strategies, commitments and targets, and we are committed to advancing sustainable innovations in our industry, we may be unable to achieve them due to availability of resources, significant increases in operational costs, and technological changes. Failure to meet these sustainability requirements or targets could adversely impact our reputation as well as the demand for our products and adversely affect our business, financial condition and results of operations.”

Annual report 2025A · The company itself

“Extraordinary events, including natural disasters, resulting from but not limited to climate change, political disruptions, terrorist attacks, public health issues and acts of war may disrupt our business and operations and impact our supply chain and access to necessary raw materials or could adversely affect the economy generally, resulting in a loss of sales and customers.”

Annual report 2025A · The company itself

“The majority of our foreign currency transaction risk results from sales of our products in Canada, a portion of which we manufacture in the U.S., and to a lesser extent from component purchases in India and Europe and payroll in Mexico.”

Annual report 2025A · The company itself

“Business, Operational, and Strategic Risks ■We sell our products and operate outside the U.S., and to a lesser extent, rely on imports and exports, which may present additional risks to our business Approximately 31 percent of our sales in 2025 were attributable to products sold outside of the U.S., primarily in China and Canada, and to a lesser extent in India and Europe.”

Annual report 2025A · The company itself

“North America Segment Years ended December 31 (dollars in millions) 2025 2024 Net Sales $ 2,984.2 $ 2,950.1 Segment Earnings 727.9 707.5 Segment Margin 24.4 % 24.0 % Sales in our North America segment were $2,984.2 million in 2025, or $34.1 million higher than sales of $2,950.1 million in 2024. Our net sales increase in 2025 was driven by pricing actions and higher commercial water heater and boiler volumes, which were partially offset by lower residential water heater volumes and unfavorable currency translation of approximately $6 million.”

Annual report 2025A · The company itself

“Business, Operational, and Strategic Risks ■We sell our products and operate outside the U.S., and to a lesser extent, rely on imports and exports, which may present additional risks to our business Approximately 31 percent of our sales in 2025 were attributable to products sold outside of the U.S., primarily in China and Canada, and to a lesser extent in India and Europe.”

Annual report 2025A · The company itself

“North America Segment Years ended December 31 (dollars in millions) 2025 2024 Net Sales $ 2,984.2 $ 2,950.1 Segment Earnings 727.9 707.5 Segment Margin 24.4 % 24.0 % Sales in our North America segment were $2,984.2 million in 2025, or $34.1 million higher than sales of $2,950.1 million in 2024. Our net sales increase in 2025 was driven by pricing actions and higher commercial water heater and boiler volumes, which were partially offset by lower residential water heater volumes and unfavorable currency translation of approximately $6 million.”

Annual report 2025A · The company itself

“REST OF WORLD Sales in our Rest of World segment accounted for approximately 22 percent of our total sales in 2025, a majority of which were in China.”

Annual report 2025A · The company itself

“In addition, the acceptance of remote work arrangements could negatively impact demand for commercial construction.”

Annual report 2025A · The company itself