Company: AOS
Filing Date: 2025-10-28
Form Type: 10-Q
Source: 0000091142-25-000150
Chunk: 16

Company: SMITH A O CORP
Filing Date: 2025-10-28
Form: 10-Q
Item: Part I, Item 8
Chunk 16
---
1 

5. Product Warranties

The Company offers warranties on the sales of certain of its products with terms that are consistent with the market and records an accrual for the estimated future claims. The following table presents the Company’s warranty liability activity:(dollars in millions)Three Months EndedSeptember 30,20252024Balance at July 1,$201.1 $187.6 Expense18.2 16.0 Claims settled(15.8)(16.4)Balance at September 30,$203.5 $187.2 (dollars in millions)Nine Months EndedSeptember 30,20252024Balance at January 1,$190.4 $188.1 Expense61.0 58.5 Acquired obligations(1)1.1 — Claims settled(49.0)(59.4)Balance at September 30,$203.5 $187.2 (1)  Refer to Note 3 for additional information regarding the acquisition of Pureit

6. Debt

In 2024, the Company renewed and amended its $500 million multi-year, multi-currency revolving credit agreement with a new expiration date of August 23, 2029. The facility has an accordion provision that allows it to be increased up to $1 billion if certain conditions (including lender approval) are satisfied. Borrowings under the Company's bank credit lines and commercial paper borrowings are supported by a $500 million revolving credit agreement. As a result of the long-term nature of this facility, the Company’s commercial paper and credit line borrowings are classified as long-term debt at September 30, 2025.  At its option, the Company either maintains cash balances or pays fees for bank credit and services. The facility requires the Company to maintain two financial covenants, a leverage ratio test and an interest coverage test. The Company was in compliance with the covenants as of September 30, 2025.

10

7. 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 EndedSeptember 30,Nine Months EndedSeptember 30,2025202420252024Denominator for basic earnings per share - weighted average shares139,953,331 145,577,396 141,707,680 146,404,181