Company: AOS
Filing Date: 2025-04-29
Form Type: 10-Q
Source: 0000091142-25-000075
Chunk: 22

Company: SMITH A O CORP
Filing Date: 2025-04-29
Form: 10-Q
Item: Part I, Item 8
Chunk 22
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 to be reclassified into earnings within one year. The combined fair value of the foreign currency forward contracts was an asset balance of $0.1 million as of March 31, 2025 which was recorded in Other current assets within the condensed consolidated balance sheet. The combined fair value of the foreign currency forward contracts was a liability balance of $1.4 million as of December 31, 2024 which was recorded in Accrued liabilities within the condensed consolidated balance sheet.The following table summarizes, by currency, the contractual amounts of the Company’s foreign currency forward contracts as of the dates indicated that were designated as cash flow hedges:(dollars in millions)March 31, 2025December 31, 2024BuySellBuySellCanadian dollar$— $21.7 $— $28.9 Euro10.5 — 14.0 — Mexican peso19.4 — 27.2 — Total$29.9 $21.7 $41.2 $28.9 

14

Table of Contents11. Derivative Instruments (continued)

Interest Rate SwapsThe Company is exposed to interest rate risk as a result of the Company’s floating rate borrowings. The Company entered into a forward interest rate swap agreement with an independent counterparty to hedge the variability in cash flows due to changes in Secured Overnight Financing Rate (SOFR) benchmark interest rate associated with variable rate borrowings. An interest rate swap at March 31, 2025 has a maturity date of September 30, 2029 and effectively converts the Company’s variable interest rate obligation to a fixed interest rate obligation. The interest rate swap had an aggregate notional amount of 4.2 billion rupees outstanding as of March 31, 2025 and December 31, 2024. The aggregate effective interest rate of the swap as of  March 31, 2025 was 8.25%.The fair value of the interest rate swap contract was a liability balance of $0.8 million and $0.5 million as of March 31, 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 March 31 (dollars in millions):Derivatives in ASC 815 cash flow hedging relationshipsAmount of gain (loss) recognized