Exhibit 99.2
A. O. SMITH CORPORATION
(condensed consolidated financial statements -
dollars in millions, except per share data)
Statement of Earnings
(unaudited)
Three Months ended March 31 | ||||||||
2012 | 2011 | |||||||
Net sales | $ | 468.6 | $ | 417.4 | ||||
Cost of products sold | 319.5 | 290.4 | ||||||
|
|
|
| |||||
Gross profit | 149.1 | 127.0 | ||||||
Selling, general and administrative | 105.3 | 89.3 | ||||||
Interest expense | 3.0 | 1.8 | ||||||
Other (income) expense | (29.1 | ) | 2.2 | |||||
|
|
|
| |||||
69.9 | 33.7 | |||||||
Provision for income taxes | 22.4 | 9.5 | ||||||
|
|
|
| |||||
Earnings from continuing operations | 47.5 | 24.2 | ||||||
Earnings from discontinued EPC operations, net of tax | — | 16.8 | ||||||
|
|
|
| |||||
Net earnings | $ | 47.5 | $ | 41.0 | ||||
|
|
|
| |||||
Diluted earnings per share of common stock | ||||||||
Continuing operations | $ | 1.02 | $ | 0.52 | ||||
Discontinued operations | — | 0.36 | ||||||
|
|
|
| |||||
Net | $ | 1.02 | $ | 0.88 | ||||
|
|
|
| |||||
Average common shares outstanding (000's omitted) | 46,488 | 46,540 |
A. O. SMITH CORPORATION
Balance Sheet
(dollars in millions)
(unaudited) March 31 2012 | December 31 2011 | |||||||
ASSETS: | ||||||||
Cash and cash equivalents | $ | 367.2 | $ | 463.4 | ||||
Marketable securities | 60.9 | — | ||||||
Receivable from sale of securities | 64.7 | — | ||||||
Receivables | 386.7 | 368.4 | ||||||
Inventories | 172.2 | 168.4 | ||||||
Deferred income taxes | 32.0 | 24.6 | ||||||
Investments | — | 162.4 | ||||||
Other current assets | 23.0 | 21.5 | ||||||
|
|
|
| |||||
Total Current Assets | 1,106.7 | 1,208.7 | ||||||
Net property, plant and equipment | 319.9 | 315.3 | ||||||
Goodwill and other intangibles | 784.7 | 786.5 | ||||||
Other assets | 38.9 | 38.5 | ||||||
|
|
|
| |||||
Total Assets | $ | 2,250.2 | $ | 2,349.0 | ||||
|
|
|
| |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY: | ||||||||
Trade payables | $ | 302.8 | $ | 302.5 | ||||
Accrued payroll and benefits | 32.8 | 41.9 | �� | |||||
Accrued liabilities | 66.5 | 69.6 | ||||||
Income taxes | 24.2 | 4.5 | ||||||
Product warranties | 44.1 | 43.7 | ||||||
Long-term debt due within one year | 18.6 | 18.6 | ||||||
Current tax and other liabilities - discontinued EPC operations | 13.4 | 31.5 | ||||||
|
|
|
| |||||
Total Current Liabilities | 502.4 | 512.3 | ||||||
Long-term debt | 300.6 | 443.0 | ||||||
Pension liabilities | 142.1 | 139.5 | ||||||
Other liabilities | 156.1 | 159.7 | ||||||
Long-term liabilities - discontinued EPC operations | 8.3 | 8.7 | ||||||
Stockholders’ equity | 1,140.7 | 1,085.8 | ||||||
|
|
|
| |||||
Total Liabilities and Stockholders’ Equity | $ | 2,250.2 | $ | 2,349.0 | ||||
|
|
|
|
A. O. SMITH CORPORATION
Statement of Cash Flows
(dollars in millions)
(unaudited)
Three Months ended March 31 | ||||||||
2012 | 2011 | |||||||
Operating Activities | ||||||||
Net earnings | $ | 47.5 | $ | 41.0 | ||||
Less earnings from discontinued operations | — | (16.8 | ) | |||||
Adjustments to reconcile net earnings to net cash provided by (used in) operating activities: | ||||||||
Depreciation & amortization | 13.4 | 10.8 | ||||||
Loss on disposal of assets | 0.1 | 0.2 | ||||||
Gain on investments | (27.2 | ) | — | |||||
Net changes in operating assets and liabilities, net of acquisitions: | ||||||||
Current assets and liabilities | (21.5 | ) | (45.8 | ) | ||||
Noncurrent assets and liabilities | 2.7 | (41.7 | ) | |||||
|
|
|
| |||||
Cash Provided by (Used in) Operating Activities - continuing operations | 15.0 | (52.3 | ) | |||||
Cash (Used in) Provided by Operating Activities - discontinued operations | (18.5 | ) | 0.1 | |||||
|
|
|
| |||||
Cash Used in Operating Activities | (3.5 | ) | (52.2 | ) | ||||
Investing Activities | ||||||||
Capital expenditures | (13.1 | ) | (12.4 | ) | ||||
Investment in marketable securities | (60.9 | ) | — | |||||
Net proceeds from sale of securities | 122.9 | — | ||||||
|
|
|
| |||||
Cash Provided by (Used in) Investing Activities - continuing operations | 48.9 | (12.4 | ) | |||||
Cash Provided by (Used in) Investing Activities - discontinued operations | — | (3.1 | ) | |||||
|
|
|
| |||||
Cash Provided by (Used in) Investing Activities | 48.9 | (15.5 | ) | |||||
Financing Activities | ||||||||
Long-term debt (retired) incurred | (143.1 | ) | 77.2 | |||||
Common stock repurchase | — | (5.7 | ) | |||||
Net proceeds from stock option activity | 8.8 | 7.9 | ||||||
Dividends paid | (7.3 | ) | (6.4 | ) | ||||
|
|
|
| |||||
Cash (Used in) Provided by Financing Activities - continuing operations | (141.6 | ) | 73.0 | |||||
Cash Provided by Financing Activities - discontinued operations | — | — | ||||||
|
|
|
| |||||
Cash (Used in) Provided by Financing Activities | (141.6 | ) | 73.0 | |||||
Net (decrease) increase in cash and cash equivalents | (96.2 | ) | 5.3 | |||||
Cash and cash equivalents - beginning of period | 463.4 | 118.9 | ||||||
|
|
|
| |||||
Cash and Cash Equivalents - End of Period | $ | 367.2 | $ | 124.2 | ||||
|
|
|
|
A. O. SMITH CORPORATION
Business Segments
(dollars in millions)
(unaudited)
Three Months ended March 31 | ||||||||
2012 | 2011 | |||||||
Net sales | ||||||||
North America | $ | 353.3 | $ | 321.7 | ||||
Rest of World | 124.2 | 105.2 | ||||||
Inter-segment sales | (8.9 | ) | (9.5 | ) | ||||
|
|
|
| |||||
$ | 468.6 | $ | 417.4 | |||||
|
|
|
| |||||
Earnings | ||||||||
North America | $ | 42.2 | $ | 38.1 | ||||
Rest of World | 14.2 | 10.8 | ||||||
|
|
|
| |||||
56.4 | 48.9 | |||||||
Corporate income (expense)(1) | 16.5 | (13.4 | ) | |||||
Interest expense | (3.0 | ) | (1.8 | ) | ||||
|
|
|
| |||||
Earnings before income taxes | 69.9 | 33.7 | ||||||
Tax provision | 22.4 | 9.5 | ||||||
|
|
|
| |||||
Earnings from continuing operations | $ | 47.5 | $ | 24.2 | ||||
|
|
|
| |||||
(1) includes net gain (loss) on investments of: | $ | 27.2 | $ | (1.6 | ) |
Quarterly Sales and Earnings by Segment
2011 and 2010
(dollars in millions)
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | Total Year | ||||||||||||||||||||||||||||||||||||
2011 | 2010 | 2011 | 2010 | 2011 | 2010 | 2011 | 2010 | 2011 | 2010 | |||||||||||||||||||||||||||||||
Sales | ||||||||||||||||||||||||||||||||||||||||
North America | $ | 321.7 | $ | 297.8 | $ | 303.6 | $ | 287.4 | $ | 310.5 | $ | 288.6 | $ | 353.7 | $ | 281.6 | $ | 1,289.5 | $ | 1,155.4 | ||||||||||||||||||||
Rest of World | 105.2 | 75.3 | 110.4 | 95.9 | 110.5 | 99.1 | 129.5 | 98.6 | 455.6 | 368.9 | ||||||||||||||||||||||||||||||
Inter-segment | (9.5 | ) | (6.4 | ) | (8.8 | ) | (8.3 | ) | (9.0 | ) | (10.2 | ) | (7.4 | ) | (10.1 | ) | (34.6 | ) | (35.0 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||
417.4 | 366.7 | 405.2 | 375.0 | 412.0 | 377.5 | 475.8 | 370.1 | 1,710.5 | 1,489.3 | |||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||
Earnings | ||||||||||||||||||||||||||||||||||||||||
North America | 38.1 | 35.8 | 38.3 | (5.2 | ) | 30.8 | 25.9 | 46.8 | 34.6 | 154.0 | 91.2 | |||||||||||||||||||||||||||||
Rest of World | 10.8 | 8.2 | 11.0 | 13.0 | 9.0 | 11.8 | 11.8 | 9.6 | 42.7 | 42.4 | ||||||||||||||||||||||||||||||
Inter-segment | — | — | — | — | — | (0.2 | ) | (0.7 | ) | (0.2 | ) | (0.7 | ) | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||
48.9 | 44.0 | 49.3 | 7.8 | 39.8 | 37.7 | 58.4 | 43.5 | 196.5 | 132.9 | |||||||||||||||||||||||||||||||
Corporate (expense) income | (13.4 | ) | (13.3 | ) | (6.3 | ) | (12.8 | ) | 2.5 | (12.6 | ) | (8.5 | ) | (13.0 | ) | (25.7 | ) | (51.6 | ) | |||||||||||||||||||||
Interest expense | (1.8 | ) | (1.7 | ) | (2.1 | ) | (1.6 | ) | (2.5 | ) | (1.8 | ) | (2.9 | ) | (1.8 | ) | (9.3 | ) | (6.9 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||
Earnings (loss) before income taxes | 33.7 | 29.0 | 40.9 | (6.6 | ) | 39.8 | 23.3 | 47.0 | 28.7 | 161.5 | 74.4 | |||||||||||||||||||||||||||||
Tax provision (credit) | 9.5 | 7.7 | 12.3 | (5.7 | ) | 12.9 | 7.1 | 15.5 | 8.2 | 50.3 | 17.3 | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||
Earnings (loss) from continuing operations | $ | 24.2 | $ | 21.3 | $ | 28.6 | $ | (0.9 | ) | $ | 26.9 | $ | 16.2 | $ | 31.5 | $ | 20.5 | $ | 111.2 | $ | 57.1 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||
EPS—Continuing Operations | $ | 0.52 | $ | 0.46 | $ | 0.62 | $ | (0.02 | ) | $ | 0.58 | $ | 0.35 | $ | 0.68 | $ | 0.44 | $ | 2.39 | $ | 1.24 | |||||||||||||||||||
Operating Margin | ||||||||||||||||||||||||||||||||||||||||
North America | 11.8 | % | 12.0 | % | 12.6 | % | -1.8 | % | 9.9 | % | 9.0 | % | 13.2 | % | 12.3 | % | 11.9 | % | 7.9 | % | ||||||||||||||||||||
Rest of World | 10.3 | % | 10.9 | % | 10.0 | % | 13.6 | % | 8.1 | % | 11.9 | % | 9.1 | % | 9.7 | % | 9.4 | % | 11.5 | % |