Company: AOS
Filing Date: 2025-07-24
Form Type: 10-Q
Source: 0000091142-25-000100
Chunk: 45

Company: SMITH A O CORP
Filing Date: 2025-07-24
Form: 10-Q
Item: Part I, Item 2
Chunk 45
---
2025 increased $2.8 million compared to the second quarter of 2024. SG&A expenses increased $3.2 million in the first six months of 2025 compared to the prior year. The increase in SG&A expenses in the second quarter and first six months of 2025 compared to the prior year periods was primarily due to higher employee costs from management incentives and higher selling expenses to support our sales initiatives. 

Interest expense in the second quarter of 2025 was $4.6 million compared to $1.8 million in the same period last year.  Interest expense in the first six months of 2025 was $7.5 million compared to $2.8 million in the same period the previous year. The increase in interest expense in the second quarter and first six months of 2025 was primarily due to higher debt levels.

Other income, net was $0.4 million in the second quarter of 2025 compared to $0.9 million in the second quarter of 2024. Other income, net was $1.6 million in the first six months of 2025 compared to $2.1 million in the same period last year. The decrease in Other income, net in the second quarter and first six months of 2025 was primarily due to lower interest income.

Our effective income tax rate for the three and six months ended June 30, 2025 was 24.5 percent. The effective income tax rate for the three and six months ended June 30, 2024 was 24.4 percent and 23.9 percent, respectively. The change in the effective income tax rate for the three and six months ended June 30, 2025 compared to the effective income tax rate for the three and six months ended June 30, 2024 was primarily due to the geographical earnings mix. We estimate that our annual effective income tax rate for the full year of 2025 will be approximately 24 to 24.5 percent.

21

North America Segment

(dollars in millions)Three Months EndedJune 30,Six Months EndedJune 30,2025202420252024Net Sales$779.0 $790.7 $1,527.7 $1,557.0 Segment Earnings198.1 198.4 383.3 397.1 Segment margin25.4 %25.1 %25.1 %25.5 %

Sales in our