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

Company: SMITH A O CORP
Filing Date: 2025-10-28
Form: 10-Q
Item: Part I, Item 8
Chunk 25
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30, 2025 was 8.25%.The fair value of the interest rate swap contract was a liability balance of $1.1 million and $0.5 million as of September 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 September 30 (dollars in millions):Derivatives in ASC 815 cash flow hedging relationshipsAmount of gain (loss) recognized in othercomprehensiveloss on derivativesLocation of gain (loss)reclassified fromaccumulated othercomprehensive lossinto earningsAmount of gain (loss)reclassified fromaccumulated othercomprehensiveloss into earnings2025202420252024Foreign currency contracts$2.0 $(0.8)Cost of products sold$0.7 $0.5 Interest rate swap0.2 — Interest expense(0.2)— $2.2 $(0.8)$0.5 $0.5 Nine Months Ended September 30 (dollars in millions):Derivatives in ASC 815 cash flow hedging relationshipsAmount of gain (loss) recognized in othercomprehensiveloss on derivativesLocation of gain (loss)reclassified fromaccumulated othercomprehensive lossinto earningsAmount of gain (loss)reclassified fromaccumulated othercomprehensiveloss into earnings2025202420252024Foreign currency contracts$3.6 $(0.3)Cost of products sold$0.6 $1.9 Interest rate swap(0.6)— Interest expense(0.3)— $3.0 $(0.3)$0.3 $1.9 

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-U.S. subsidiaries. These hedges are determined to