Stockholders' Equity

12 Months Ended

Dec. 31, 2022

Equity [Abstract]

Stockholders' Equity

Stockholders’ Equity

The Company’s authorized capital consists of three million shares of Preferred Stock $1 par value, 27 million shares of Class A Common Stock $5 par value, and 240 million shares of Common Stock $1 par value. The Common Stock has equal dividend rights with Class A Common Stock and is entitled, as a class, to elect one-third of the Board of Directors and has 1/10th vote per share on all other matters. Class A Common Stock is convertible to Common Stock on a one for one basis.

There were 68,785 shares during 2022, 64,072 shares during 2021 and 12,372 shares during 2020, of Class A Common Stock converted into Common Stock. Regular dividends paid on the A. O. Smith Corporation Class A Common Stock and Common Stock amounted to $1.14, $1.06 and $0.98 per share in 2022, 2021 and 2020, respectively.

In 2022, the Board of Directors approved adding 3,500,000 shares of Common Stock to an existing discretionary share repurchase authority. Under the share repurchase program, the Common Stock may be purchased through a combination of Rule 10b5-1 automatic trading plan and discretionary purchases in accordance with applicable securities laws. The number of shares purchased and the timing of the purchases will depend on a number of factors, including share price, trading volume and general market conditions, as well as working capital requirements, general business conditions and other factors, including alternative investment opportunities. The stock repurchase authorization remains effective until terminated by the Company's Board of Directors which may occur at any time, subject to the parameters of any Rule 10b5-1 automatic trading

plan that we may then have in effect. In 2022, the Company repurchased 6,647,895 shares at an average price of $60.70 per share and at a total cost of $403.5 million. As of December 31, 2022, there were 378,462 shares remaining on the existing repurchase authorization. In 2021, the Company repurchased 5,087,467 shares at a cost of $366.5 million. In 2020, the Company repurchased 1,348,391 shares at a cost of $56.7 million.

At December 31, 2022, a total of 130,380 and 39,398,135 shares of Class A Common Stock and Common Stock, respectively, were held as treasury stock. At December 31, 2021, a total of 130,380 and 32,924,647 shares of Class A Common Stock and Common Stock, respectively, were held as treasury stock.

Changes to accumulated other comprehensive loss by component are as follows:

(dollars in millions)	Years ended December 31,
	2022		2021
Cumulative foreign currency translation
Balance at beginning of period	$	(44.7)	$	(48.1)
Other comprehensive (loss) gain before reclassifications	(39.4)		3.4
Balance at end of period	(84.1)		(44.7)
Unrealized net gain (loss) on cash flow derivatives
Balance at beginning of period	0.6		0.6
Other comprehensive gain (loss) before reclassifications	7.4		(0.6)
Realized (gains) losses on derivatives reclassified to cost of products sold (net of tax provision (benefit) of $1.0 and $(0.2) in 2022 and 2021, respectively)(1)	(3.1)		0.6
Balance at end of period	4.9		0.6
Pension liability
Balance at beginning of period	(287.3)		(273.7)
Other comprehensive gain (loss) before reclassifications	19.8		(28.6)
Amounts reclassified from accumulated other comprehensive loss(1)	264.3		15.0
Balance at end of period	(3.2)		(287.3)
Total accumulated other comprehensive loss, end of period	$	(82.4)	$	(331.4)

(1)Amounts reclassified from accumulated other comprehensive loss:

Realized (gains) losses on derivatives reclassified to cost of products sold	$	(4.1)		$	0.8
Tax provision (benefit)	1.0			(0.2)
Reclassification net of tax	$	(3.1)		$	0.6
Amortization of pension items:
Actuarial losses	$	437.2	(2)	$	20.3	(2)
Prior year service cost	(0.4)		(2)	(0.4)		(2)
	436.8			19.9
Tax benefit	(172.5)			(4.9)
Reclassification net of tax	$	264.3		$	15.0

(2)These accumulated other comprehensive loss components are included in the computation of net periodic benefit cost. See Note 13, “Pensions and Other Post-retirement Benefits” for additional details.