Letter to Shareholders Dear Shareholders: 2024 was a milestone year for A. O. Smith as we celebrated the company’s 150th anniversary—a true testament to our values and the strength of the organization. We completed two acquisitions, made significant investments in our North American operations, emphasized our focus on continuous improvement and continued our dedication to the development of new sustainable technologies—all while honoring our rich history and the milestones that led us to today. We celebrated our anniversary with more than 12,000 employees, Smith family members and community partners in more than 30 locations around the world. It was a time to celebrate our company values, highlight our relentless commitment to innovation and emphasize our position as a global water technology leader. We also celebrated by making two significant donations through the A. O. Smith Foundation to high-impact service organizations in the communities where we operate. It was certainly a year that reconnected us all to the history and culture that makes A. O. Smith such a special company. As we look to the future, our commitment to leading the industry forward and supporting our customers through an ever-changing business environment remains steadfast. In 2024, we delivered $3.8 billion in sales. Sales in our North America segment increased slightly compared to last year. The water heating business saw a strong first half of the year and was balanced out by a lower second half as volumes were influenced by a first-quarter price increase. Our boiler business increased 8%, and we are particularly pleased with the strong demand for the Crest® commercial boiler with Hellcat™ Combustion Technology. North America Water Treatment sales increased 10%, mainly driven by acquisition-related dealer growth. In addition, we have actions in place this year to focus on higher growth and more profitable water treatment channels with a profit improvement plan to expand margins in 2025. Our business in China is experiencing one of the most difficult economic times in decades. With sales down 6% in local currency, our teams are taking the necessary steps to reduce costs by optimizing the business structure and maximizing our resources to ensure we have the right products in place to meet customer needs. With these actions, we are confident we’re positioning ourselves for profitable growth when the economy improves. Kevin J. Wheeler (left) Chairman & Chief Executive Officer Stephen M. Shafer President & Chief Operating Officer Our India operations outperformed the market with a 13% increase in local currency. Consumers are looking for products that combine technology, modern aesthetics and state-of-the-art features, which continue to be the focus of our products in India. The acquisition of Pureit, which offers a broad range of residential water purification solutions, will further strengthen our brand and expand our reach in India and across South Asia. We continue to bring innovative products to market, including the Adapt® gas tankless water heater with X3® Scale Prevention Technology, an ENERGY STAR®- certified product that prevents scale buildup. We also launched the Voltex® MAX heat pump water heater (HPWH), an addition to our growing residential HPWH line. Within our commercial business, we launched the Veritus® commercial HPWH and the Lectrus® commercial boiler, which have allowed us to pave the way for a more sustainable and efficient future. Making critical investments to prepare the company for the future has long been part of our strategy. We are investing more than $80 million in capital, roughly half of which was spent in 2024, in Ciudad Juárez, Mexico; Lebanon, Tennessee; and McBee, South Carolina. These investments will further position us to lead the industry through upcoming regulatory changes and drive innovation within our core products. We are bringing our newly launched gas tankless water heater production to North America for the first time, which will shorten the supply chain and improve service levels. We’ve increased production of our commercial HPWHs and doubled our residential HPWH capacity to meet growing demand. We are increasing our capacity to produce high-efficiency, condensing water heaters. We’ve also made investments in our operations through automation, robotics and other testing capabilities to ensure the products we’re producing continue to exceed our customers’ expectations. We published our fourth Sustainability Report in November, highlighting our enduring commitment to sustainability and water stewardship, and announced our first public water goal—an annual water savings of 40 million gallons by 2030. We are also proud to share that we surpassed our greenhouse gas emissions reduction goal set in 2021 by 17%. This report further demonstrates our commitment to providing our customers with sustainable, efficient solutions. In March, we were recognized as a 2024 World’s Most Ethical Company by Ethisphere, a global leader in defining and advancing the standards of ethical business practices. We have long believed our culture—namely our values and guiding principles—is a differentiator for our employees and customers. We are proud to be one of the top global water technology companies leading the market through uncertainty, growth and change with ethics top of mind. We are proud to share that for more than 30 consecutive years, we’ve increased our dividend to shareholders. In October, we announced a 6% increase in the dividend rate that resulted in a five-year compound annual dividend growth rate of approximately 8%. We also repurchased approximately 3.8 million shares of common stock, totaling approximately $306 million in 2024. In today’s environment of constant change, one thing will always remain—A. O. Smith will continue to build things that matter and will always do business with honesty and integrity. We truly believe these values will sustain us for another 150 years! Sincerely, Kevin J. Wheeler Chairman and Chief Executive Officer Stephen M. Shafer President and Chief Operating Officer A. O. Smith 2024 Sustainability Report Growing Our North American Footprint Our plant in Ciudad Juárez, Mexico, not only celebrated the company’s 150th anniversary but also the opening of its third plant and an additional building expansion in September 2024. The new plant will shorten the supply chain for faster response and allow the company to manufacture tankless units for the first time in North America, further strengthening our position as a leader in water heating. An additional line was also added to double our heat pump water heater production capacity. To help us further prepare for upcoming commercial regulatory changes, we’re also expanding our operations in McBee, South Carolina. Updates will include a new coil line furnace, a robotic weld cell for the coil line, a coil line blaster, coil forming machines and other material handling equipment. These additions will increase production of our condensing commercial water heaters and storage capacity to quickly meet customers’ needs. This project is being conducted in two phases with the first phase completion scheduled for Q3 2025 and the second phase in Q3 2026. A heat pump water heater rolls off the new line in Ciudad Juárez, Mexico. A third plant in Ciudad Juárez, Mexico, opened in September 2024, and has started producing tankless water heaters. The robotic welding cell for the new coil line in McBee, South Carolina, was installed in February 2025. A. O. Smith Product Development Center In 2023, we broke ground on the new A. O. Smith Product Development Center in Lebanon, Tennessee, and in August 2024, we welcomed more than 50 key individuals for a sneak preview of the space under construction. This project combines a mix of new construction and existing facility renovation to create an environment where innovation and collaboration will thrive. The new center brings together the company’s North America Water Heating commercial engineering and platform electronics functions with Lochinvar engineering and product management to support future commercial product production, including heat pump water heaters, boilers and other condensing technology. The A. O. Smith Product Development Center is designed to enhance knowledge-sharing across the organization and foster new ideas in a space conducive to collaboration. Once completed in April 2025, the facility will play a critical role in advancing product innovation and future sustainability efforts to help customers meet regulatory requirements and efficiency goals. When fully operational, the center will house more than 140 new and existing employees with room for future growth. Select individuals received a sneak preview of the space under construction in August 2024. The new A. O. Smith Product Development Center in Lebanon, Tennessee, will celebrate its grand opening in April 2025. The center’s new product development lab is designed to test and analyze unit performance using real-world conditions. % $#$$# #%"$# ( ## '*<1270=87 " % " "$ %"#% $$ #$ " - $#%"$#( $ BEG;89)?468 &88 0=<=*7-270 *7>*;B *6.8/*,1A,1*70.87 '12,1".02<=.;.- ?4FF B@@BA,GB6> C4EI4?H8 C8EF;4E8 'BA8 'BG? 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