Company: AOS
Filing Date: 2025-07-24
Form Type: 10-Q
Source: 0000091142-25-000100
Chunk: 25

Company: SMITH A O CORP
Filing Date: 2025-07-24
Form: 10-Q
Item: Part I, Item 8
Chunk 25
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4. The aggregate effective interest rate of the swap as of June 30, 2025 was 8.25%.The fair value of the interest rate swap contract was a liability balance of $1.3 million and $0.5 million as of June 30, 2025 and December 31, 2024, respectively, which was recorded in Accrued liabilities within the condensed consolidated balance sheet.The effect of cash flow hedges on the condensed consolidated statement of earnings: Three Months Ended June 30 (dollars in millions):Derivatives in ASC 815 cash flow hedging relationshipsAmount of gain (loss) recognized in othercomprehensiveloss on derivativesLocation of (loss) gainreclassified fromaccumulated othercomprehensive lossinto earningsAmount of (loss) gainreclassified fromaccumulated othercomprehensiveloss into earnings2025202420252024Foreign currency contracts$0.3 $(1.3)Cost of products sold$0.1 $0.8 Interest rate swap(0.5)— Interest expense(0.1)— $(0.2)$(1.3)$— $0.8 Six Months Ended June 30 (dollars in millions):Derivatives in ASC 815 cash flow hedging relationshipsAmount of gain (loss) recognized in othercomprehensiveloss on derivativesLocation of (loss) gainreclassified fromaccumulated othercomprehensive lossinto earningsAmount of (loss) gainreclassified fromaccumulated othercomprehensiveloss into earnings2025202420252024Foreign currency contracts$1.6 $0.5 Cost of products sold$(0.1)$1.4 Interest rate swap(0.8)— Interest expense(0.1)— $0.8 $0.5 $(0.2)$1.4 

16

Table of Contents11. Derivative Instruments (continued)

Net Investment HedgesThe Company uses foreign currency denominated intercompany debt and third-party foreign currency forward contracts to hedge the exposure to a portion of the Company’s net investments in certain non-U.S. subsidiaries against the effect of exchange rate fluctuations on the translation of foreign currency balances to the U.S. dollar. For the derivative instruments that are designated and qualify as net investment hedges, gains and losses are reported in other comprehensive loss where they offset gains and losses recorded on the Company’s net investments in its non