A O Smith Corporation
Our company is comprised of two reporting segments: North America and Rest
of World. Our Rest of World segment is primarily comprised of China, Europe
and India. Both segments manufacture and market comprehensive lines of residential
and commercial gas, gas tankless and electric water heaters. Both segments primarily
manufacture and market in their respective regions of the world. Our North America
segment also manufactures and globally markets specialty commercial water heating
equipment, condensing and non-condensing boilers and water systems tanks. Primarily
for Asia, our Rest of World segment also manufactures and markets water treatment
products. We also market in-home air purification products in China.
On August 22, 2011, we sold our Electrical Products business (EPC) to Regal
Beloit Corporation (RBC) for approximately $760 million in cash and approximately
2.83 million shares of RBC common stock valued at $140.6 million as of that
date. Due to the sale, EPC has been reflected as a discontinued operation in
the accompanying financial information for all periods presented.
The following table summarizes our sales from continuing operations. This summary
and all other information presented in this section should be read in conjunction
with the Consolidated Financial Statements and Notes to Consolidated Financial
Statements, which appear in Item 8 in this document.
To improve our competitiveness by generating new products and processes, we
conduct research and development at our Corporate Technology Center in Milwaukee,
Wisconsin, at our Global Engineering Center in Nanjing, China, and at our operating
locations.
We are the largest manufacturer and marketer of water heaters in North America,
and we have a leading share in both the residential and commercial markets.
In the commercial market, we believe our comprehensive product line including
boilers and our high-efficiency products give us a competitive advantage in
this portion of the water heating industry. Our wholesale distribution channel
includes more than 1,200 independent wholesale plumbing distributors with more
than 4,400 selling locations serving residential and commercial end markets.
We also sell our residential water heaters through the retail channel. In this
channel, our customers include five of the seven largest national hardware and
home center chains, including long-standing exclusive relationships with both
Lowe’s and Sears. Our boiler distribution channel is primarily comprised
of manufacturer representative firms.
Our Lochinvar brand is one of the leading brands of residential and commercial
boilers in the U.S.
We sell water heaters in more than 8,000 retail outlets in China, of which
over 2,000 exclusively sell our products. Our water treatment products and air
purification products are sold in over 5,500 and 1,200 retail outlets in China,
respectively.