Company: AOS
Filing Date: 2025-10-28
Form Type: 10-Q
Source: 0000091142-25-000150
Chunk: 26

Company: SMITH A O CORP
Filing Date: 2025-10-28
Form: 10-Q
Item: Part I, Item 8
Chunk 26
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 be effective. The Company recognized $1.3 million and $4.0 million of after-tax losses associated with hedges of net investments in non-U.S. subsidiaries in currency translation adjustment in other comprehensive loss in the three months ended September 30, 2025 and September 30, 2024, respectively. The Company recognized $(5.1) million of after-tax losses and $1.4 million of after-tax gains associated with hedges of net investments in non-U.S. subsidiaries in currency translation adjustment in other comprehensive loss in the nine months ended September 30, 2025 and September 30, 2024, respectively.The contractual amount of the Company’s foreign currency denominated intercompany debt that is designated as a net investment hedge was ¥1.5 billion RMB as of September 30, 2025 and December 31, 2024. The fair value of the net investment hedge was zero as of September 30, 2025 and December 31, 2024.Balance Sheet HedgesForeign Exchange ContractsThe Company historically entered into foreign exchange contracts to mitigate the foreign currency volatility relative to certain intercompany loans. These foreign exchange contracts did not qualify for hedge accounting in accordance with ASC 815 and as such were marked to market through earnings.  The fair value of the foreign exchange contracts was zero as of September 30, 2025 and December 31, 2024.The following table summarizes the contractual amounts of the Company's foreign exchange contracts that are designated as balance sheet hedges:(dollars in millions)September 30, 2025December 31, 2024BuySellBuySellCanadian dollar$— $— $— $6.4 The amounts recognized within the condensed consolidated statements of earnings related to the Company's foreign exchange contracts are set forth below.Three Months Ended September 30 (dollars in millions):Derivatives not designated as hedging instruments:Location of expense within the condensed consolidated statements of earnings20252024Foreign exchange contractsOther income, net$— $(3.6)Nine Months Ended September 30 (dollars in millions):Derivatives not designated as hedging instruments:Location of expense within the condensed consolidated statements of earnings20252024Foreign exchange contractsOther expense, net$— $2.1 

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12. Income Taxes

The Company’s effective income tax rate for the three and nine months ended September 30, 2025 was 23.2 percent and