Profitable growth is essential for A. O. Smith’s future. To achieve profitable growth, we must provide: 

• New, efficient, high-quality and differentiated products for our customers 
• Greater opportunity for individual advancement and improved job security 
• Growth in investment value for our stockholders in a socially responsible manner 

Not only will we seek an above-average return on stockholders’ investment, but we will also grow in a planned way so that: 

• Our business units will have individualized growth rates that complement each other and produce a company that grows faster than the U.S. economy 
• The capital requirements of growth will be supported by funds generated by our above-average return on investment and by external sources, such as borrowing and equity