SEC Filing | A. O. Smith Corporation

SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1999 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ Commission File Number 1-475 A.O. SMITH CORPORATION Delaware 39-0619790 (State of Incorporation) (IRS Employer ID Number) P. O. Box 245008, Milwaukee, Wisconsin 53224-9508 Telephone: (414) 359-4000 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days. Yes _X_ No ___ Class A Common Stock Outstanding as of September 30, 2000 8,690,125 shares Common Stock Outstanding as of September 30, 2000 14,847,142 shares Exhibit Index Page 15

Index A.O. Smith Corporation Part I. Financial Information Item 1. Financial Statements (Unaudited) Condensed Consolidated Statements of Earnings and Retained Earnings - Three and nine months ended September 30, 2000 and 1999 3 Condensed Consolidated Balance Sheet - September 30, 2000 and December 31, 1999 4 Condensed Consolidated Statement of Cash Flows - Nine months ended September 30, 2000 and 1999 5 Notes to Condensed Consolidated Financial Statements - September 30, 2000 6-8 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 9-11 Item 3. Quantitative and Qualitative Disclosure of Market Risk 12 Part II. Other Information Item 1. Legal Proceedings 13 Item 4. Submission of Matters to a Vote of Security Holders 13 Item 5. Other Information 13 Item 6. Exhibits and Reports on Form 8-K 13 Signatures 14 Index to Exhibits 15 2

PART I--FINANCIAL INFORMATION - ----------------------------- ITEM 1--FINANCIAL STATEMENTS - ---------------------------- A.O. SMITH CORPORATION CONDENSED CONSOLIDATED STATEMENT OF EARNINGS AND RETAINED EARNINGS Three and Nine Months ended September 30, 2000 and 1999 (000 omitted except for per share data) (unaudited) Three Months Ended Nine Months Ended September 30 September 30 ------------ ------------ 2000 1999 2000 1999 ---- ---- ---- ---- Continuing Operations Electric Motor Technologies $ 206,567 $ 211,609 $ 702,688 $ 516,148 Water Systems Technologies 75,018 75,797 245,221 236,536 -------- -------- -------- -------- Net sales 281,585 287,406 947,909 752,684 Cost of products sold 233,196 232,678 765,167 602,566 -------- -------- -------- -------- Gross profit 48,389 54,728 182,742 150,118 Selling, general and administrative expenses 29,281 31,017 97,715 78,616 Interest expense 5,595 3,866 16,759 7,851 Interest income (88) (498) (492) (1,018) Other expense - net 2,127 1,854 7,680 5,031 -------- -------- -------- -------- 11,474 18,489 61,080 59,638 Provision for income taxes 4,131 6,011 21,989 20,991 -------- -------- -------- -------- Earnings from Continuing Operations 7,343 12,478 39,091 38,647 Discontinued Operations (note 4) Earnings (loss) from operations less related income tax provision (benefit) 2000 - $977 & $2,051; 1999 - ($34) & ($522) 1,493 (112) 3,139 (964) Loss on disposition less related income tax benefit 2000 - $798 - - (1,222) - -------- -------- -------- -------- Net Earnings 8,836 12,366 41,008 37,683 ======== ======== ======== ======== Retained Earnings Balance at beginning of period 557,759 519,693 531,204 499,954 Net Earnings 8,836 12,366 41,008 37,683 Cash dividends on common shares (3,044) (2,786) (8,661) (8,364) -------- -------- -------- -------- Balance at End of Period $ 563,551 $ 529,273 $ 563,551 $ 529,273 ======== ======== ======== ======== Basic Earnings (Loss) per Common Share (note 8) Continuing Operations $0.31 $0.54 $1.68 $1.67 Discontinued Operations 0.07 (0.01) 0.08 (0.04) -------- -------- -------- -------- Net Earnings $0.38 $0.53 $1.76 $1.63 ======== ======== ======== ======== Diluted Earnings (Loss) per Common Share (note 8) Continuing Operations $0.31 $0.52 $1.65 $1.63 Discontinued Operations 0.06 - 0.08 (0.04) -------- -------- -------- -------- Net Earnings $0.37 $0.52 $1.73 $1.59 ======== ======== ======== ======== Dividends per Common Share $0.13 $0.12 $0.37 $0.36 See accompanying notes to unaudited condensed consolidated financial statements. 3

PART I--FINANCIAL INFORMATION - ----------------------------- ITEM 1--FINANCIAL STATEMENTS - ---------------------------- A.O. SMITH CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS September 30, 2000 and December 31, 1999 (000 omitted) (unaudited) September 30, 2000 December 31, 1999 ------------------ ----------------- Assets Current Assets Cash and cash equivalents (note 2) $ 8,496 $ 14,761 Receivables 186,891 183,442 Inventories (note 5) 171,547 163,443 Deferred income taxes 11,464 11,323 Other current assets 11,224 5,253 Net current assets - discontinued operations (note 4) 21,576 10,405 ----------- ----------- Total Current Assets 411,198 388,627 Property, plant and equipment 541,323 518,741 Less accumulated depreciation 260,113 235,248 ----------- ----------- Net property, plant and equipment 281,210 283,493 Goodwill and other intangibles 246,555 251,085 Other assets 104,346 88,990 Net long-term assets - discontinued operations (note 4) 48,669 51,791 ----------- ----------- Total Assets $ 1,091,978 $ 1,063,986 =========== =========== Liabilities Current Liabilities Trade payables $ 97,986 $ 81,221 Accrued payroll and benefits 31,952 32,272 Accrued liabilities 26,448 27,301 Product warranty 11,665 10,847 Income taxes 580 7,170 Long-term debt due within one year 9,629 9,629 ----------- ----------- Total Current Liabilities 178,260 168,440 Long-term debt (note 6) 321,662 351,251 Other liabilities 67,609 64,536 Deferred income taxes 62,596 48,675 ----------- ----------- Total Liabilities 630,127 632,902 Stockholders' Equity Class A common stock, $5 par value: authorized 14,000,000 shares; issued 8,722,720 43,614 43,615 Common stock, $1 par value: authorized 60,000,000 shares; issued 23,826,642 23,827 23,826 Capital in excess of par value 53,407 53,026 Retained earnings (note 6) 563,551 531,204 Accumulated other comprehensive loss (note 7) (6,098) (3,238) Treasury stock at cost (216,450) (217,349) ----------- ----------- Total Stockholders' Equity 461,851 431,084 ----------- ----------- Total Liabilities and Stockholders' Equity $ 1,091,978 $ 1,063,986 =========== =========== See accompanying notes to unaudited condensed consolidated financial statements. 4

PART I--FINANCIAL INFORMATION - ----------------------------- ITEM 1--FINANCIAL STATEMENTS - ---------------------------- A.O. SMITH CORPORATION CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS Nine Months Ended September 30, 2000 and 1999 (000 omitted) (unaudited) Nine Months Ended September 30 ------------ 2000 1999 ---- ---- Operating Activities Continuing Earnings from continuing operations $ 39,091 $ 38,647 Adjustments to reconcile net earnings to net cash provided by (used in) operating activities: Depreciation 27,796 21,720 Amortization 6,352 4,444 Net change in current assets and liabilities (82) (7,551) Net change in other noncurrent assets and liabilities (2,665) (11,987) Other 1,147 508 ----------- ----------- Cash Provided by Operating Activities 71,639 45,781 Investing Activities Capital expenditures (30,114) (22,198) Other (762) (1,141) Acquisition of business - (251,361) ----------- ----------- Cash Used in Investing Activities (30,876) (274,700) ----------- ----------- Cash Flow Before Financing Activities 40,763 (228,919) Discontinued Cash Used in Discontinued Operations (9,788) (2,006) Financing Activities Debt incurred - 217,780 Debt retired (29,589) (4,629) Purchase of treasury stock - (2,745) Net proceeds from common stock and option activity 608 504 Tax benefit from exercise of stock options 402 792 Dividends paid (8,661) (8,364) ----------- ----------- Cash Provided by (Used in) Financing Activities (37,240) 203,338 ----------- ----------- Net decrease in cash and cash equivalents (6,265) (27,587) Cash and cash equivalents-beginning of period (note 2) 14,761 37,666 ----------- ----------- Cash and Cash Equivalents - End of Period $ 8,496 $ 10,079 =========== =========== See accompanying notes to unaudited condensed consolidated financial statements. 5

PART I - FINANCIAL INFORMATION - ------------------------------ ITEM 1 - FINANCIAL STATEMENTS - ----------------------------- A. O. SMITH CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2000 (unaudited) 1. Basis of Presentation The condensed consolidated financial statements presented herein are based on interim figures and are subject to audit. In the opinion of management, all adjustments consisting of normal accruals considered necessary for a fair presentation of the results of operations and of financial position have been made. The results of operations for the three and nine-month periods ended September 30, 2000 are not necessarily indicative of the results expected for the full year. The condensed consolidated balance sheet as of December 31, 1999 is derived from the audited financial statements but does not include all disclosures required by generally accepted accounting principles. Certain prior year amounts have been reclassified to conform to the 2000 presentation. 2. Statement of Cash Flows For purposes of the Consolidated Statement of Cash Flows, cash and cash equivalents include short-term investments held primarily for cash management purposes. These investments normally mature within three months from the date of acquisition. 3. Acquisition On August 2, 1999, the company acquired the assets of MagneTek, Inc.'s (MagneTek) domestic electric motor business and six wholly owned foreign subsidiaries for $244.6 million. The purchase price was allocated to the assets acquired and the liabilities assumed based upon current estimates of their respective fair values at the date of acquisition. In connection with the MagneTek acquisition, the company recorded additional purchase liabilities of $17.9 million, which included employee severance and relocation, as well as certain facility exit costs. Total costs incurred and charged against the liability to date totaled $2.5 million. 4. Discontinued Operations In the first quarter, the company decided to divest its fiberglass piping and liquid and dry bulk storage tank businesses. Net sales of these businesses were $33.4 and $96.0 million for the three- and nine-month periods ended September 30, 2000 and $30.9 and $85.7 million for the three- and nine-month periods ended September 30, 1999. The operating results of the discontinued businesses have been reported separately as discontinued operations in the accompanying financial statements. Certain expenses have been allocated to the discontinued operations, including interest expense, which was allocated based on the ratio of net assets of the discontinued businesses to the total consolidated capital of the company. 6

5. Inventories (000 omitted) Sept. 30, 2000 Dec. 31, 1999 -------------- ------------- Finished products $ 111,995 $ 99,335 Work in process 35,660 40,197 Raw materials 40,950 41,997 Supplies 889 1,322 -------- -------- 189,494 182,851 Allowance to state inventories at LIFO cost 17,947 19,408 -------- -------- $ 171,547 $ 163,443 ======== ======== 6. Long-Term Debt The company's credit agreement and term notes contain certain conditions and provisions which restrict the company's payment of dividends. Under the most restrictive of these provisions, retained earnings of $70.1 million were unrestricted as of September 30, 2000. The company renewed its $100 million credit facility, which now expires on July 27, 2001. In addition, the company has available a $250 million credit facility that expires August 2, 2004. 7. Comprehensive Earnings (Loss) The company's comprehensive earnings were $7.4 and $38.1 million for the three- and nine-month periods ended September 30, 2000 and $12.6 and $36.9 million for the three- and nine-month periods ended September 30, 1999. Comprehensive earnings, for all periods presented, were comprised of net earnings and foreign currency translation adjustments. No provisions or benefits for U.S. income taxes have been made on these foreign currency translation adjustments. 7

8. Earnings per Share of Common Stock The numerator for the calculation of basic and diluted earnings per share is net earnings. The following table sets forth the computation of basic and diluted weighted-average shares used in the earnings per share calculations: Three Months Ended Nine Months Ended Sept. 30 Sept. 30 ---------------------------- --------------------------- 2000 1999 2000 1999 ---------------------------- --------------------------- Denominator for basic earnings per share - weighted-average shares 23,371,624 23,189,535 23,365,685 23,188,520 Effect of dilutive stock options 254,276 655,900 320,586 582,825 ---------- ---------- ---------- ---------- Denominator for diluted earnings per share 23,625,900 23,845,435 23,686,271 23,771,345 ========== ========== ========== ========== 9. Operations by Segment (000 omitted) Three Months Ended Nine Months Ended Sept. 30 Sept. 30 ---------------------------- --------------------------- 2000 1999 2000 1999 ---------------------------- --------------------------- Net Sales Electric Motor Technologies $ 206,567 $ 211,609 $ 702,688 $ 516,148 Water Systems Technologies 75,018 75,797 245,221 236,536 ---------- ---------- ---------- ---------- Net Sales $ 281,585 $ 287,406 $ 947,909 $ 752,684 ========== ========== =========== ========== Earnings before Interest and Taxes Electric Motor Technologies $ 15,643 $ 20,331 $ 70,202 $ 59,845 Water Systems Technologies 7,086 7,313 25,536 24,496 ---------- ---------- ---------- ---------- Total Segments 22,729 27,644 95,738 84,341 General Corporate and Research and Development Expenses (5,748) (5,787) (18,391) (17,870) Interest Expense - Net (5,507) (3,368) (16,267) (6,833) ---------- ---------- ---------- ---------- Earnings before Income Taxes 11,474 18,489 61,080 59,638 Provision for Income Taxes (4,131) (6,011) (21,989) (20,991) ---------- ---------- ---------- ---------- Earnings from Continuing Operations $ 7,343 $ 12,478 $ 39,091 $ 38,647 ========== ========== =========== ========== Intersegment sales, which are immaterial, have been excluded from segment revenues. 8

PART I - FINANCIAL INFORMATION - ------------------------------ ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL - ---------------------------------------------------------- CONDITION AND RESULTS OF OPERATIONS ----------------------------------- RESULTS OF OPERATIONS - --------------------- FIRST NINE MONTHS OF 2000 COMPARED TO 1999 - ------------------------------------------ Sales in the third quarter of 2000 were $281.6 million or 2% less than last year's third quarter sales of $287.4 million. When compared with the same quarter in the prior year, the third quarter 2000 sales included the beneficial impact of an additional month of sales from the MagneTek motor acquisition. Excluding the acquisition, sales were 9% lower than the third quarter of 1999 as a result of softer HVAC market conditions. Sales for the first nine months of 2000 were $947.9 million or almost 26% higher than the $752.7 million of sales in the same period last year. The year to date increase in sales reflects an additional seven months of sales associated with the MagneTek acquisition when compared with 1999. Third quarter earnings from continuing operations were $7.3 million or $5.2 million lower than last year's third quarter earnings of $12.5 million. Continuing earnings for the first nine months of 2000 were $39.1 million or $.5 million higher than earnings of $38.6 million in the same period last year. On a diluted per share basis, third quarter continuing earnings declined from $.52 in 1999 to $.31 in 2000. Continuing earnings per share for the first nine months of 2000 were $1.65 compared with $1.63 in the same period last year. Earnings for the third quarter reflect the adverse impact of declining sales volume on cost absorption. The first nine months of 2000 reflect the additional seven months earnings associated with the MagneTek acquisition offset by increased interest expense. The gross profit margin for the third quarter declined from 19% in 1999 to 17.2% in 2000. The year to date gross profit margin in 2000 was 19.3% compared with 19.9% in the same period in 1999. The lower margins in both the third quarter and first nine months of 2000 resulted from the inclusion of the MagneTek motors business, as well as less favorable cost absorption associated with declining volume. Third quarter sales of Electric Motor Technologies were $206.6 million or $5 million lower than the third quarter of 1999 sales of $211.6 million. Year to date sales for this segment were $702.7 million, an increase of $186.6 million over sales of $516.1 million in the same period last year. Excluding sales associated with the August 2, 1999 motor business acquisition, total motor sales declined approximately 13% compared with the third quarter of 1999. Sales in both the third quarter and first nine months have been adversely impacted by a reduction in demand from heating and air conditioning industry customers confronted with record levels of finished product inventory. Third quarter operating profits of Electric Motor Technologies declined from $20.3 million in 1999 to $15.6 million in 2000. On a year to date basis, earnings increased $10.4 million from $59.8 million in 1999 to $70.2 million in 2000. The lower third quarter earnings resulted from lower sales and production volumes and associated cost absorption. Year to date earnings reflect margin earned on the additional sales volume from the motor business acquisition and a $2.3 9

million favorable adjustment to the vacation accrual recorded in the second quarter as a result of a change in the company's vacation policy for certain employees. As part of the overall plan to integrate MagneTek and improve operating margin, Electric Motor Technologies continues to move production to its lower cost facilities. Consistent with this strategy, this segment recently announced that it would be closing three motor manufacturing facilities within the next nine months. Third quarter sales for Water Systems Technologies were $75 million in 2000, slightly lower than 1999 third quarter sales of $75.8 million. A softening in the housing market contributed to an 8% decline in sales of residential product and offset higher sales in the company's Chinese water heater operation. Sales for the first nine months of 2000 were $245.2 million or $8.7 million higher than the same period in 1999 reflecting higher volume for the China operation. Water Systems Technologies 2000 third quarter earnings were $.2 million lower than the third quarter of 1999 due to the decline in residential volume. Year to date earnings exceeded those of the same period last year primarily as a result of lower losses in China. Selling, general, and administrative (SG&A) expense in the third quarter was $1.7 million less than the same period last year due to lower selling expenses and lower accruals for incentive plans. On a year to date basis, SG&A increased $19.1 million over last year due to the motors acquisition. Relative to sales, year to date SG&A was consistent in 1999 and 2000. Net interest expense for the third quarter and first nine months of 2000 exceeded that of the comparable periods in 1999 by $2.1 million and $9.4 million, respectively. The increased financing cost was due to the debt incurred with the MagneTek acquisition and higher interest rates. Other expense in the third quarter of 2000 was $.3 million higher than the same period in 1999 due to the recognition of an additional month of goodwill amortization associated with the August 2, 1999 motors business acquisition. Other expense for the first nine months of 2000 was $2.6 million higher than the same period last year due primarily to increased goodwill amortization. The effective tax rate for the third quarter of 2000 was 36% compared with 32.5% in the third quarter of 1999. 1999 benefited from recognition of tax credits associated with the resolution of the company's research and development tax credit claim. The company's effective tax rate for the first nine months of 2000 was 36% and compared with 35.2% in 1999 which reflected the aforementioned tax credit. In the first quarter, the company announced its intent to exit the fiberglass pipe and storage tank markets and accordingly, Smith Fiberglass Company and A. O. Smith Engineered Storage Products Company have been classified as discontinued operations in the accompanying financial statements. Sales for these discontinued operations were $33.4 million in the third quarter of 2000 and compared with 30.9 million in the same quarter last year. Year to date sales for 2000 and 1999 were $96 million and 85.7 million, respectively. The after-tax profits in 2000 for Engineered Storage Products Company were $1.5 million in the third quarter and $3.1 million in the first nine months of 2000, compared with $1.1 million and $2.3 million in the same periods in 10

1999. Fiscal 1999 discontinued after-tax operating losses of $.1 million and $1 million for the three and nine month periods included both discontinued businesses. The after-tax results for Smith Fiberglass Products Company for the three and nine months ended September 30, 2000 were breakeven and $1 million loss, respectively. Fiscal 2000 Smith Fiberglass losses have been charged to the disposition reserves established at December 31, 1999. At September 30, 2000, the company believes such reserves are adequate and expects its divestitures to be completed in the fourth quarter of 2000. Outlook The company recently disclosed that it expects the fourth quarter to be extremely difficult as its customers significantly reduce production levels to lower their inventories. As a result, the company expects to experience weak sales and excess manufacturing costs. Fourth quarter earnings are expected to range between $.05 and $.15 per share. Given current market conditions, the company expects sales and earnings during the first and second quarters of 2001 to fall short of the record results generated during the first two quarters of the current year. Once customers' surplus inventories have been eliminated, sales and earnings comparisons are expected to improve as the year progresses. For the full year, the company expects 2001 earnings to exceed 2000 results. Liquidity & Capital Resources The company's working capital to support continuing operations was $211.4 million at September 30, 2000 compared with the $209.8 million at December 31, 1999. Increases to inventories as a result of weaker HVAC markets and a reduction in the income tax liability were offset by increases to accounts payable. Cash provided by continuing operations for the year-to-date period ended September 30, 2000 was $40.8 million compared with $22.4 million during the same period one year ago. Improved working capital was the most significant factor in the increase in cash flow. The company expects cash flow from continuing operations for the year to be $45 to $50 million. Capital expenditures during the first nine months of 2000 were $30.1 million compared with $22.2 million through September 30, 1999. All of the capital spending increase was related to higher spending in the motor business due to the MagneTek motor acquisition. The company projects total capital spending in 2000 to be higher than in 1999, but expects such capital expenditures to be covered by cash flow from operations. The company's long-term debt decreased $29.6 million in the first nine months of 2000. The company's leverage as measured by the ratio of total debt to total capitalization was 42% at the end of the third quarter compared with 46% at the end of last year. In connection with the MagneTek acquisition in August 1999, additional purchase liabilities of $17.9 million were recorded, which included employee severance and relocation, as well as certain facility exit costs. Costs incurred and charged against the purchase liabilities totaled $2.5 million to date. 11

At its October 10, 2000 meeting, A. O. Smith's Board of Directors declared a regular cash dividend of $.13 per share on its common stock (Class A Common and Common). The dividend is payable on November 15, 2000 to shareholders of record October 31, 2000. ITEM 3. - QUANTITATIVE AND QUALITATIVE DISCLOSURE OF MARKET RISK - ---------------------------------------------------------------- As is more fully described in the company's annual report on Form 10-K for the year ended December 31, 1999, the company is exposed to various types of market risks, primarily currency and certain commodities. The company monitors its risks in such areas on a continuous basis and, generally enters into futures contracts to minimize such exposures for periods of less than one year. The company does not engage in speculation in its derivatives strategies. It is important to note that gains and losses from the company's futures contract activities are offset by changes in the underlying costs of the transactions being hedged. Forward Looking Statements Certain statements in this report are "forward-looking statements." These forward-looking statements can generally be identified as such because the context of the statement will include words such as the company "believes," "anticipates," "estimates," "expects," "projects," or words of similar import. Although the company believes that its expectations are based upon reasonable assumptions within the bounds of its knowledge of its business, there can be no assurance that the results expressed in forward-looking statements will be realized. Although a significant portion of the company's sales are derived from the replacement of previously installed product, and such sales are therefore less volatile, numerous factors may affect actual results and cause results to differ materially from those expressed in forward-looking statements made by, or on behalf of, the company. The company considers most important among such factors, the stability in its electric motor and water products markets, the timely and proper integration of the MagneTek motors acquisition, and the implementation of associated cost reduction programs. All subsequent written and oral forward-looking statements attributable to the company, or persons acting on its behalf, are expressly qualified in their entirety by these cautionary statements. 12

PART II - OTHER INFORMATION - --------------------------- ITEM 1 - LEGAL PROCEEDINGS - -------------------------- There have been no material changes in the legal and environmental matters previously reported in Part 1, Item 3 and Note 12 of the Notes to Consolidated Financial Statements in the company's Form 10-K Report for the year ended December, 1999 and in Part 2, Item 1 in the quarterly reports on Form 10-Q for the quarter ended June 30, 2000, all of which are incorporated herein by reference. ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS - ------------------------------------------------------------ None. ITEM 5 - OTHER INFORMATION - -------------------------- The Board of Directors elected, effective August 6, 2000, Kenneth W. Krueger senior vice president and chief financial officer of the Corporation. Mr. Glen R. Bomberger, who resigned as chief financial officer, continues as executive vice president of the Corporation. ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K - ----------------------------------------- None. 13

SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has authorized this report to be signed on its behalf by the undersigned. A. O. SMITH CORPORATION October 20, 2000 /s/ John J. Kita ---------------- John J. Kita Vice President, Treasurer and Controller October 20, 2000 /s/ Kenneth W. Krueger ---------------------- Kenneth W. Krueger Senior Vice President and Chief Financial Officer 14

INDEX TO EXHIBITS ----------------- Exhibit Number Description - ------ ----------- (27) Financial Data Schedule (27-1) Restated Financial Data Schedule 15

5 1,000 9-MOS DEC-31-2000 SEP-30-2000 8,496 0 189,777 (2,886) 171,547 411,198 541,323 260,113 1,091,978 178,260 321,662 0 0 67,441 394,410 1,091,978 947,909 947,909 765,167 765,167 7,680 0 16,759 61,080 21,989 39,091 1,917 0 0 41,008 1.76 1.73

5 1,000 9-MOS DEC-31-1999 SEP-30-1999 10,079 0 207,586 (4,513) 150,439 395,141 511,787 227,935 1,064,456 182,172 344,354 0 0 67,445 361,053 1,064,456 752,684 752,684 602,566 602,566 5,031 0 7,851 59,638 20,991 38,647 (964) 0 0 37,683 1.63 1.59