Fourth Quarter 2008

January 22, 2009

Filed by A. O. Smith Corporation

pursuant to Rule 425 under the

Securities Act of 1933, as amended, and

deemed filed pursuant to Rule 14a-12

under the Securities Exchange Act of

1934, as amended.

Subject Company: A. O. Smith

Corporation

Subject Company’s Commission File

No.: 1-475

Exhibit 99.2

2

Forward Looking Statements

This

presentation

contains

statements

that

we

believe

are

“forward-looking

statements”

within

the

meaning

of

the

Private

Securities

Litigation

Reform

Act

of

1995.

Forward-looking

statements

generally

can

be

identified

by

the

use

of

words

such

as

“may,”

“will,”

“expect,”

“intend,”

“estimate,”

“anticipate,”

“believe,”

“continue,”

or

words

of

similar

meaning.

These

forward-looking

statements

are

subject

to

risks

and

uncertainties

that

could

cause

actual

results

to

differ

materially

from

those

anticipated

as

of

the

date

of

this

release.

Factors

that

could

cause

such

a

variance

include,

among

others,

the

following:

significant

volatility

in

raw

material

prices;

competitive

pressures

on

the

company’s

businesses;

inability

to

implement

pricing

actions;

negative

impact

of

future

pension

contributions

on

the

company’s

ability

to

generate

cash

flow;

instability

in

the

company’s

electric

motor

and

water

products

markets;

further

weakening

in

housing

construction;

further

weakening

in

commercial

construction;

a

further

slowdown

in

the

Chinese

economy;

expected

restructuring

savings

realized;

further

adverse

changes

in

customer

liquidity

and

general

economic

and

capital

market

conditions;

any

failures

to

realize

the

anticipated

benefits

of

the

proposed

Smith

Investment

transaction;

the

failure

of

A.

O.

Smith

or

Smith

Investment

stockholders

to

approve

the

proposed

merger;

the

outcome

of

the

proposed

transaction,

if

completed;

the

ability

to

satisfy

the

conditions

to

the

proposed

transaction;

the

impact

of

the

proposed

transaction

or

any

other

transaction

on

A.

O.

Smith’s

or

Smith

Investment’s

respective

businesses,

and

the

possibility

of

adverse

publicity

or

litigation

and

the

outcome

thereof

and

the

costs

and

expenses

associated

therewith.

Forward-looking statements included in this conference call are made only as of the date of this

presentation, and the company is under no obligation to update these statements to reflect subsequent

events or circumstances.  All subsequent written and oral forward-looking statements attributed to the

company, or persons acting on its behalf, are qualified entirely

by these cautionary statements.

This presentation contains certain non-GAAP financial measures as that term is defined by the

SEC.

Non-GAAP

financial

measures

are

generally

identified

by

“Adjusted”

(Adj.)

or

“Before

Restructuring”.

3

2008 Highlights

Sales of $2.3 billion; flat with 2007

GAAP EPS of $2.70 or $2.89 adjusted for

restructuring

Operating cash flow of $107 million

Debt to Capital ratio of 34%

China water heaters still growing strong: $185

million in sales, up 26%

Restructuring activities at motors on track; $5

million in savings realized in 2008

Merger agreement with Smith Investment

Company

2009: GAAP EPS of $2.40 to $2.60

4

2009 Challenges

Headwinds

Soft housing market throughout 2009;

recession continues

Commercial demand expected to be down

substantially

Slower growth in China

Increased pension expense

Tailwinds

Water heater pricing

Restructuring benefits

5

2008 Results

Sales

2,304.9

2,312.1

(7.2)

-0.3%

Net Earnings (GAAP)

81.9

88.2

(6.3)

-7%

EPS (reported)

2.70

$   

2.85

$   

(0.15)

$ 

-5%

Restructuring

0.19

$   

0.33

$   

(0.14)

$ 

Tax Benefit

-

(0.16)

0.16

Adjusted EPS

2.89

$   

3.02

$   

(0.13)

$ 

-4%

(in millions, except per share)

2008

2007

change

% chg.

6

Fourth Quarter Results

Sales

508.6

569.9

(61.3)

-11%

Net Earnings (GAAP)

6.6

17.0

(10.4)

-61%

EPS (reported)

0.22

$ 

0.55

$ 

(0.33)

$  

-60%

Restructuring

0.07

$ 

0.26

$ 

(0.19)

Tax Benefit

-

(0.06)

0.06

Adjusted EPS

0.29

$ 

0.75

$ 

(0.46)

$  

-61%

(in millions, except per share)

2008

2007

change

% chg.

7

Water Products

1,451.3

1,423.1

28.2

2%

Electrical Products

858.1

894.0

(35.9)

-4%

Intersegment

(4.5)

(5.0)

0.5

Total Sales

2,304.9

2,312.1

(7.2)

-0.3%

2008 Segment Sales

2008

2007

change

% chg.

(in millions)

8

Water Products

346.2

379.0

(32.8)

-9%

Electrical Products

163.2

192.4

(29.2)

-15%

Intersegment

(0.8)

(1.5)

0.7

Total Sales

508.6

569.9

(61.3)

-11%

Q4 08 Segment Sales

2008

2007

change

% chg.

(in millions)

9

Water Products

134.7

150.0

(15.3)

-10%

Electrical Products

39.1

23.1

16.0

EPC Restructuring

8.7

22.8

(14.1)

  EPC - adjusted O.P.

47.8

45.9

1.9

4%

Corporate

(44.7)

(46.3)

1.6

Total operating profit

137.8

149.6

(11.8)

-8%

Margin

Water Products

9.3%

10.5%

Electrical Products*

5.6%

5.1%

* adjusted for restructuring

2008 Operating Profit

2008

2007

change

% chg.

(in millions, except percentages)

10

Water Products

29.5

45.1

(15.6)

-35%

Electrical Products

(5.2)

(18.0)

12.8

EPC Restructuring

2.9

21.2

(18.3)

  EPC - adjusted O.P.

(2.3)

3.2

(5.5)

Corporate

(10.7)

(12.6)

1.9

Total operating profit

16.5

35.7

(19.2)

-54%

Margin

Water Products

8.5%

11.9%

Electrical Products*

-1.4%

1.6%

* adjusted for restructuring

Q4 08 Operating Profit

2008

2007

change

% chg.

(in millions, except percentages)

11

Operating Cash Flow of

$107M

Cash cycle days of 66

vs. 57 last year

8 more inventory days

D&A $66M vs. CAPX

$66M

Debt/Capital 34%

Expect operating cash

flow of $150 million in

2009

107

191

0.0

40.0

80.0

120.0

160.0

200.0

Operating Cash Flow

12/31/08

12/31/07

2009 Outlook

13

14

Replacement

72%

China

10%

New Construction

18%

New Construction

22%

China

18%

Replacement

60%

Water Products

Electrical Products

But exposure to economic slowdown is limited

15

Water Heaters

Strong Replacement Markets

0

40,000

80,000

120,000

160,000

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

0

2,000

4,000

6,000

8,000

10,000

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

New Construction

Replacement

Residential (N.A.)

Commercial (N.A.)

16

Outlook

Volume declines, particularly higher margin

commercial business

Higher pension expense at approximately $10

million

Water heater pricing

China growth

Water Heaters

–

2008 sales increase to $185 M

–

Sales projected to be up mid-teens in 2009

Commercial hermetic motor business

–

2009 sales projected to grow

Restructuring benefits

17

$1.50

$1.75

$2.00

$2.25

$2.50

$2.75

$3.00

2008

2009 Forecast

2009 Forecast

$2.70

$2.40 -

$2.60

18

In connection with the proposed transaction between A. O. Smith and SICO, the parties

intend to file a registration statement on Form S-4 with the SEC containing a joint proxy

statement/prospectus.  Such documents, however, are not currently available.  The joint

proxy statement/prospectus will be mailed to stockholders of A. O. Smith and SICO. 

INVESTORS ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS

REGARDING THE PROPOSED TRANSACTION WHEN IT BECOMES AVAILABLE,

BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION.  Investors will be able to

obtain

a

free

copy

of

the

joint

proxy

statement/prospectus

filed

by

A.

O.

Smith,

without

charge, at the SEC’s

website (http://www.sec.gov) once such documents are filed with

the SEC.  It will also be available on A.

O. Smith’s website (http://www.aosmith.com) by

clicking on A.

O. Smith Corporation, Investor Relations and then SEC filings.  Copies of

the joint proxy statement/prospectus can also be obtained, without charge, once they are

filed with the SEC, by directing a request to A. O. Smith Corporation, Attention: Investor

Relations, 11270 West Park Place, Milwaukee, Wisconsin 53224.

A. O. Smith, SICO and their respective directors, executive officers and other employees

may be deemed to be participants in the solicitation of proxies from the stockholders of A.

O. Smith and SICO in connection with the proposed transaction. Information about the

directors and executive officers of A. O. Smith and SICO and their respective interests in

the proposed transaction will be available in the joint proxy statement/prospectus.