Company: AOS
Filing Date: 2025-06-30
Form Type: 11-K
Source: 0000091142-25-000086
Chunk: 9

Company: SMITH A O CORP
Filing Date: 2025-06-30
Form: 11-K
Chunk 9
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 2024 and 2023, forfeited non-vested accounts totaled $1,220,682 and $744,811, respectively. These accounts will be used to reduce future employer contributions or future administrative expenses of the Plan. During 2024 forfeitures were used to reduce $20,500 of administration fees and $742,750 of employer contributions. During 2023 forfeitures were used to reduce $19,574 of administration fees and $873,040 of employer contributions.

#### Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP) requires management to make estimates and assumptions that affect the reported amounts in the financial statements. Actual results could differ from those estimates.

#### Investment Valuation
U.S. GAAP provides the framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). The three levels of the fair value hierarchy under U.S. GAAP are described as follows:

#### Level 1
– Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Plan has the ability to access.

#### Level 2
– Inputs to the valuation methodology include quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in inactive markets; inputs other than quoted prices that are observable for the asset or liability; inputs that are derived principally from or corroborated by observable market data by correlation or other means.

If the asset or liability has a specified (contractual) term, the level 2 input must be observable for substantially the full term of the asset or liability.

#### Level 3
– Inputs to the valuation methodology are unobservable and significant to the fair value measurement.

The asset or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.

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1. Description of Plan and Significant Accounting Policies (continued)

Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs.

Purchases and sales of investments are recorded on a trade date basis. Dividend income is recorded on the ex-dividend date. Interest income is