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Document and Entity Information - shares	3 Months Ended
Document and Entity Information - shares	Mar. 31, 2018	Apr. 30, 2018
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q1
Trading Symbol	AOS
Entity Registrant Name	SMITH A O CORP
Entity Central Index Key	0000091142
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Common Class A
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		26,065,487
Common Stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		145,076,649

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Net sales	$ 788.0	$ 740.0
Cost of products sold	466.5	439.1
Gross profit	321.5	300.9
Selling, general and administrative expenses	192.9	183.2
Restructuring and impairment expenses	6.7
Interest expense	2.3	2.2
Other income	(5.8)	(4.9)
Earnings before provision for income taxes	125.4	120.4
Provision for income taxes	26.6	32.7
Net Earnings	$ 98.8	$ 87.7
Net Earnings Per Share of Common Stock	$ 0.58	$ 0.51
Diluted Net Earnings Per Share of Common Stock	0.57	0.50
Dividends Per Share of Common Stock	$ 0.18	$ 0.14

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Net earnings	$ 98.8	$ 87.7
Other comprehensive earnings
Foreign currency translation adjustments	18.4	7.3
Unrealized net gain on cash flow derivative instruments, less related income tax provision of $(0.7) in 2018 and ($0.7) in 2017	2.0	1.1
Adjustment to pension liability, less related income tax provision of $(1.1) in 2018 and $(1.7) in 2017	3.4	2.6
Comprehensive Earnings	$ 122.6	$ 98.7

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS (Parenthetical) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Unrealized net gain on cash flow derivative instruments, related income tax provision	$ (0.7)	$ (0.7)
Adjustment to pension liability, related income tax provision	$ (1.1)	$ (1.7)

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions	Mar. 31, 2018	Dec. 31, 2017
Assets
Cash and cash equivalents	$ 241.9	$ 346.6
Marketable securities	437.8	473.4
Receivables	638.8	592.7
Inventories	287.1	297.0
Other current assets	63.5	57.2
Total Current Assets	1,669.1	1,766.9
Property, plant and equipment	1,085.1	1,060.1
Less accumulated depreciation	(547.0)	(531.2)
Net property, plant and equipment	538.1	528.9
Goodwill	515.7	516.7
Other intangibles	304.7	308.7
Other assets	79.3	76.2
Total Assets	3,106.9	3,197.4
Liabilities
Trade payables	522.1	535.0
Accrued payroll and benefits	56.8	90.8
Accrued liabilities	136.6	116.0
Product warranties	44.0	44.5
Debt due within one year	7.4	7.5
Total Current Liabilities	766.9	793.8
Long-term debt	285.8	402.9
Pension liabilities	41.2	48.1
Other liabilities	304.6	307.7
Total Liabilities	1,398.5	1,552.5
Stockholders' Equity
Common Stock, value	164.5	164.5
Capital in excess of par value	491.6	486.5
Retained earnings	1,856.5	1,788.7
Accumulated other comprehensive loss	(275.7)	(299.5)
Treasury stock at cost	(659.5)	(626.5)
Total Stockholders' Equity	1,708.4	1,644.9
Total Liabilities and Stockholders' Equity	3,106.9	3,197.4
Common Class A
Stockholders' Equity
Common Stock, value	$ 131.0	$ 131.2

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Mar. 31, 2018	Dec. 31, 2017
Common Stock, par value	$ 1	$ 1
Common Stock, shares authorized	240,000,000	240,000,000
Common Stock, shares issued	164,511,159	164,468,033
Common Class A
Common Stock, par value	$ 5	$ 5
Common Stock, shares authorized	27,000,000	27,000,000
Common Stock, shares issued	26,196,433	26,239,559

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Operating Activities
Net earnings	$ 98.8	$ 87.7
Adjustments to reconcile net earnings to cash provided by (used in) operating activities:
Depreciation and amortization	17.9	16.9
Stock based compensation expense	6.5	5.9
Net changes in operating assets and liabilities:
Current assets and liabilities	(70.4)	(119.3)
Noncurrent assets and liabilities	(9.6)	(2.7)
Cash Provided by (Used in) Operating Activities	43.2	(11.5)
Investing Activities
Capital expenditures	(17.3)	(16.8)
Investments in marketable securities	(84.7)	(136.0)
Net proceeds from sale of marketable securities	136.9	134.9
Cash Provided by (Used in) Investing Activities	34.9	(17.9)
Financing Activities
Long-term debt (repaid) incurred	(117.3)	45.7
Common stock repurchases	(33.1)	(30.1)
Net (payments) proceeds from stock option activity	(1.4)	1.2
Dividends paid	(31.0)	(24.4)
Cash Used In Financing Activities	(182.8)	(7.6)
Net decrease in cash and cash equivalents	(104.7)	(37.0)
Cash and cash equivalents - beginning of period	346.6	330.4
Cash and Cash Equivalents - End of Period	$ 241.9	$ 293.4

Basis of Presentation

3 Months Ended

Mar. 31, 2018

Basis of Presentation

1.	Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (GAAP) for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Accordingly, they do not include all of the information and footnotes required for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three month period ended March 31, 2018 are not necessarily indicative of the results expected for the full year. It is suggested that the accompanying condensed consolidated financial statements be read in conjunction with the audited consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 filed with the SEC on February 16, 2018.

Recent Accounting Pronouncements

In August 2017, the Financial Accounting Standards Board (FASB) amended Accounting Standards Codification (ASC) 815, Derivatives and Hedging (issued under Accounting Standards Update (ASU) 2017-12, “Targeted Improvements to Accounting for Hedging Activities”). Under this amendment, more hedging strategies are eligible for hedge accounting treatment. ASU 2017-12 also amends the presentation and disclosure requirements regarding derivatives and hedging and changes how companies assess effectiveness. The Company adopted the amendment on January 1, 2018 and the adoption of ASU 2017-12 does not have a material impact on its consolidated balance sheets, statements of earnings or statements of cash flows.

In May 2017, the FASB amended ASC 718, Compensation - Stock Compensation (issued under ASU 2017-09, “Scope of Modification Accounting”). This amendment clarifies when changes to the terms or conditions of share-based payment awards must be accounted for as a modification. Under this amendment, modification accounting must be used if three conditions are met: the fair value changes, the vesting conditions change, or the classification of the award changes due to the changes in terms or conditions. The Company adopted the amendment on January 1, 2018 and the adoption of ASU 2017-09 does not have a material impact on its consolidated balance sheets, statements of earnings or statements of cash flows.

In March 2017, the FASB amended ASC 715, Compensation - Retirement Benefits (issued under ASU 2017-07, “Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost”). This amendment changes the way net periodic benefit cost associated with employer-sponsored defined benefit plans is presented in the statement of earnings. Under the amendment, the service cost component of net periodic benefit cost is included in the same lines in the statement of earnings as other employee compensation costs and the other components of net periodic benefit cost must be presented separately outside of income from operations. The Company adopted the amendment on January 1, 2018 and as a result reclassified $1.4 million and $1.1 million of non-service cost pension income from cost of products sold and selling, general and administrative expenses, respectively, to other income in the March 31, 2017 consolidated statement of earnings. The adoption does not have a material impact on the Company’s consolidated balance sheets, statements of earnings or statements of cash flows.

In January 2017, the FASB amended ASC 350, Intangibles - Goodwill and Other (issued under ASU 2017-04, “Simplifying the Test for Goodwill Impairment”). This amendment simplifies the test for goodwill impairment by only requiring an entity to perform an annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and recognize an impairment charge for the amount that the carrying amount exceeds the reporting unit’s fair value. Any loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The amendment requires adoption on January 1, 2020. The Company does not expect that the adoption of ASU 2017-04 will have a material impact on its consolidated balance sheets, statements of earnings or statements of cash flows.

In October 2016, the FASB amended ASC 740, Income Taxes (issued under ASU 2016-16). This amendment requires that the income tax consequences of an intra-entity transfer of an asset other than inventory be recognized when the transfer occurs. The Company adopted this amendment on January 1, 2018 and the adoption of amended ASU 2016-16 does not have a material impact on the its consolidated balance sheets, statement of earnings or statements of cash flows.

In February 2016, the FASB amended ASC 842, Leases (issued under ASU 2016-02). This amendment requires the recognition of lease assets and lease liabilities on the balance sheet for most leasing arrangements currently classified as operating leases. This amendment is effective for periods beginning January 1, 2019. The Company is in the process of completing its analysis of its lease population and does not expect the adoption of ASU 2016-02 to have a material impact on its consolidated balance sheets, statements of earnings or statements of cash flows.

In May 2014, the FASB issued ASC 606-10, Revenue from Contracts with Customers (issued under ASU 2014-09). ASU 2014-09 replaces all previously existing revenue recognition guidance. The Company adopted ASU 2014-09 on January 1, 2018 using the full retrospective method and therefore applied the standard to all contracts commencing on or after January 1, 2016. The Company recognized a net after-tax reduction to opening retained earnings of $3.9 million as of January 1, 2016 in connection with the adoption of ASU 2014-09. The adoption of ASU 2014-09 does not have a material impact on the Company’s consolidated balance sheets, statements of earnings or statements of cash flows. See Note 2 - Revenue Recognition for further discussion.

Revenue Recognition

3 Months Ended

Mar. 31, 2018

Revenue Recognition

2.	Revenue Recognition

Substantially all of the Company’s sales are from contracts with customers for the purchase of its products. Contracts and customer purchase orders are used to determine the existence of a sales contract. Shipping documents are used to verify shipment. For substantially all of its products, the Company transfers control of products to the customer at the point in time when title and risk are passed to the customer, which generally occurs upon shipment of the product. Each unit sold is considered an independent, unbundled performance obligation. The Company’s sales arrangements do not include other performance obligations that are material in the context of the contract. The nature, timing and amount of revenue for a respective performance obligation are consistent for each customer. The Company measures the sales transaction price based upon the payment terms associated with the transaction and whether the sales price is subject to refund or adjustment. Sales and value added taxes are excluded from the measurement of transaction price. The Company’s payment terms for the majority of its customers are 30 to 90 days from shipment. Additionally, certain customers in China pay prior to the shipment of products resulting in a customer deposits liability of $57.4 million and $56.0 million at March 31, 2018 and December 31, 2017, respectively. The Company assesses collectability based on the creditworthiness of the customer as determined by credit checks and analysis, as well as the customer’s payment history. The Company’s allowance for doubtful accounts was $5.8 million and $5.3 million at March 31, 2018 and December 31, 2017, respectively.

Rebates and incentives are based on pricing agreements and are tied to sales volume. The amount of revenue is reduced for variable consideration related to customer rebates which are calculated using expected values and is based on program specific factors such as expected rebate percentages based on expected volumes. In situations where the customer has the right to return eligible products, the Company reduces revenue for its estimates of expected product returns which are primarily based on an analysis of historical experience. Changes in such accruals may be required if actual sales volume differs from estimated sales volume or if future returns differ from historical experience. Shipping and handling costs billed to customers are included in net sales and the related costs are included in cost of products sold and are activities performed to fulfill the promise to transfer products.

Disaggregation of Net Sales

The Company is comprised of two reporting segments: North America and Rest of World. The Rest of World segment is primarily comprised of China, Europe and India. Both segments manufacture and market comprehensive lines of residential and commercial gas and electric water heaters, boilers and water treatment products. Both segments primarily manufacture and market in their respective regions of the world. The North America segment also manufactures and markets water system tanks. The Rest of World segment also manufactures and markets in-home air purification products in China.

As each segment manufactures and markets products in its respective region of the world, the Company has determined that geography is the primary factor in reporting its sales. The Company further disaggregates its North America segment sales by major product line as each of North America’s major product lines is sold through distinct distribution channels and these product lines may be impacted differently by certain economic factors. Within the Rest of World segment, particularly in China and India, the Company’s major customers purchase across the Company’s product lines, utilizing the same distribution channel regardless of product type. In addition, the impact of economic factors is unlikely to be differentiated by product line in the Rest of World segment.

The North America segment major product lines are defined as the following:

Water heaters The Company’s water heaters are open water heating systems that heat potable water. Typical applications for water heaters include residences, restaurants, hotels and motels, office buildings, laundries, car washes and small businesses. The Company sells residential and commercial water heater products and related parts through its wholesale distribution channel which includes more than 1,200 independent wholesale plumbing distributors. The Company also sells residential water heaters and related parts through retail and maintenance, repair and operations (MRO) channels. A significant portion of the Company’s water heater sales in the North America segment is derived from the replacement of existing products.

Boilers The Company’s boilers are closed loop water heating systems used primarily for space heating or hydronic heating. The Company’s boilers are primarily used in space heating applications in commercial settings for hospitals, schools, hotels and other large commercial buildings while residential boilers are used in homes, apartments and condominiums. The Company’s boiler distribution channel is comprised primarily of manufacturer representative firms. The Company’s boiler sales in the North America segment are derived from a combination of replacement of existing products and new construction.

Water treatment products The Company’s water treatment products range from point-of-entry water softeners and whole-home water filtration products to on-the-go filtration bottles and point-of-use carbon and reverse osmosis products. Typical applications for the Company’s water treatment products include residences, restaurants, hotels and offices. A portion of the Company’s sales of water treatment products in the North America segment is comprised of replacement filters.

The following table disaggregates the Company’s net sales by segment. As described above, the Company’s North America segment sales are further disaggregated by major product line. In addition, the Company’s Rest of World segment sales are disaggregated by China and all other Rest of World.


(dollars in millions)
	Three Months Ended March 31,
	2018			2017
North America
Water heaters and related parts	$	446.8		$	444.4
Boilers and related parts		36.9			32.6
Water treatment products		18.0			10.3

Total North America		501.7			487.3
Rest of World
China		275.8			244.2
All other Rest of World		18.0			15.3

Total Rest of World		293.8			259.5
Inter-segment sales		(7.5	)		(6.8	)

Total Net Sales	$	788.0		$	740.0

Acquisitions

3 Months Ended

Mar. 31, 2018

Acquisitions

3.	Acquisitions

On September 5, 2017, the Company acquired 100 percent of the shares of Hague Quality Water International (Hague), an Ohio-based water softener company. With the addition of Hague, the Company grew its North America water treatment product offerings. Hague is included in the Company’s North America segment for reporting purposes.

The Company paid an aggregate cash purchase price of $43.1 million, net of $4.1 million of cash acquired. In addition, the Company established a $1.5 million holdback liability to satisfy any potential obligations of the former owners of Hague, should they arise; otherwise, the amount will be paid to the former owners of Hague on September 5, 2018. The Company also agreed to make a contingent payment of up to an additional $2.0 million based on the amount by which products manufactured by or branded Hague increase over the two-year period ending June 30, 2019. In addition, the Company incurred acquisition-related costs of approximately $0.2 million.

As of the acquisition date and March 31, 2018, the Company estimated the fair value of the holdback liability and additional contingent consideration at $1.5 million and $2.0 million, respectively, and has recorded liabilities for those amounts.

The following table summarizes the allocation of fair value of the assets acquired and liabilities assumed at the date of acquisition of Hague for purposes of allocating the purchase price. The $12.8 million of acquired intangible assets was comprised of $1.1 million of trade names that are not subject to amortization and $11.7 million of customer lists being amortized over 18 years.


September 5, 2017 (dollars in millions)
Current assets, net of cash acquired	$	7.8
Property, plant and equipment		6.9
Intangible assets		12.8
Goodwill		22.2

Total assets acquired		49.7
Current liabilities		(5.6	)
Long-term liabilities		(1.0	)

Total liabilities assumed		(6.6	)

Net assets acquired	$	43.1

The acquisition was accounted for using the purchase method of accounting, and accordingly, the results of operations have been included in the Company’s consolidated financial statements from September 5, 2017, the date of acquisition.

Restructuring and Impairment Expenses

3 Months Ended

Mar. 31, 2018

Restructuring and Impairment Expenses

4.	Restructuring and Impairment Expenses

On March 21, 2018, the Company announced a move of manufacturing operations from its Renton, Washington facility to other U.S. facilities. The Company recognized $6.7 million of restructuring and impairment expenses, comprised of $4.0 million of severance and compensation related costs, lease exit costs of $2.1 million and impairment charges related to long-lived assets totaling $0.6 million, as well as a corresponding $1.7 million tax benefit related to the charges. The majority of the consolidation of operations will occur in the first half of 2018.

The following table presents an analysis of the Company’s restructuring reserve as of and for three months ended March 31, 2018:


(dollars in millions)
	Severance Costs		Lease Exit Costs		Fixed Assets Impairment		Total
Balance at January 1, 2018	$	—	$	—	$	—	$	—
Restructuring expense recognized		4.0		2.1		0.6		6.7

Balance at March 31, 2018	$	4.0	$	2.1	$	0.6	$	6.7

Inventories

3 Months Ended

Mar. 31, 2018

Inventories

5.	Inventories


(dollars in millions)
	March 31, 2018			December 31, 2017
Finished products	$	134.7		$	140.4
Work in process		20.3			18.3
Raw materials		154.5			160.5

Inventories, at FIFO cost		309.5			319.2
LIFO reserve		(22.4	)		(22.2	)

Net inventory	$	287.1		$	297.0

Product Warranties

3 Months Ended

Mar. 31, 2018

Product Warranties

6.	Product Warranties

The Company offers warranties on the sales of certain of its products with terms that are consistent with the market and records an accrual for the estimated future claims. The following table presents the Company’s warranty liability activity.


(dollars in millions)
	2018			2017
Balance at January 1	$	142.4		$	140.9
Expense		11.6			12.4
Claims settled		(11.1	)		(10.7	)

Balance at March 31	$	142.9		$	142.6

Long-Term Debt

3 Months Ended

Mar. 31, 2018

Long-Term Debt

7.	Long-Term Debt

The Company has a $500 million multi-year multi-currency revolving credit agreement with a group of nine banks, which expires on December 15, 2021. The facility has an accordion provision which allows it to be increased up to $700 million if certain conditions (including lender approval) are satisfied.

Borrowings under bank credit lines and commercial paper borrowings are supported by the $500 million revolving credit agreement. As a result of the long-term nature of this facility, the Company’s commercial paper and credit line borrowings are classified as long-term debt at March 31, 2018. At its option, the Company either maintains cash balances or pays fees for bank credit and services.

Earnings per Share of Common Stock

3 Months Ended

Mar. 31, 2018

Earnings per Share of Common Stock

8.	Earnings per Share of Common Stock

The numerator for the calculation of basic and diluted earnings per share is net earnings. The following table sets forth the computation of basic and diluted weighted-average shares used in the earnings per share calculations:


	Three Months Ended March 31,
	2018		2017
Denominator for basic earnings per share - weighted average shares		171,532,008		173,380,076
Effect of dilutive stock options, restricted stock and share units		1,818,656		2,039,843

Denominator for diluted earnings per share		173,350,664		175,419,919

Stock Based Compensation

3 Months Ended

Mar. 31, 2018

Stock Based Compensation

9.	Stock Based Compensation

The Company adopted the A. O. Smith Combined Incentive Compensation Plan (the “Plan”) effective January 1, 2007. The Plan was reapproved by stockholders on April 16, 2012. The Plan is a continuation of the A. O. Smith Combined Executive Incentive Compensation Plan which was originally approved by stockholders in 2002. The number of shares available for granting of options or share units at March 31, 2018 was 2,501,851. Upon stock option exercise or share unit vesting, shares are issued from treasury stock.

Total stock based compensation expense recognized in the three months ended March 31, 2018 and 2017 was $6.5 million and $5.9 million, respectively.

Stock Options

The stock options granted in the three months ended March 31, 2018 and 2017 have three year pro rata vesting from the date of grant. Stock options are issued at exercise prices equal to the fair value of the Company’s Common Stock on the date of grant. For active employees, all options granted in 2018 and 2017 expire ten years after date of grant. The Company’s stock options are expensed ratably over the three year vesting period; however, included in stock option expense for the three months ended March 31, 2018 and 2017 was expense associated with the accelerated vesting of stock option awards for certain employees who either are retirement eligible or become retirement eligible during the vesting period. Stock based compensation expense attributable to stock options in the three months ended March 31, 2018 and 2017 was $3.2 million and $2.9 million, respectively.

Changes in option shares, all of which relate to the Company’s Common Stock, were as follows for the three months ended March 31, 2018:


	Weighted-Avg. Per Share Exercise Price		Number of Options			Average Remaining Contractual Life		Aggregate Intrinsic Value (dollars in millions)
Outstanding at January 1, 2018	$	27.73		2,263,126
Granted		61.80		348,870
Exercised		25.78		(73,775	)
Terminated		49.39		(11,600	)

Outstanding at March 31, 2018		32.39		2,526,621			7 years	$	78.8

Exercisable at March 31, 2018		24.29		1,766,015			6 years	$	69.4

The weighted-average fair value per option at the date of grant during the three months ended March 31, 2018 and 2017 using the Black-Scholes option-pricing model was $14.86 and $13.04, respectively. Assumptions were as follows:


	Three Months Ended March 31,
	2018			2017
Expected life (years)		5.7			5.7
Risk-free interest rate		2.9	%		2.4	%
Dividend yield		1.0	%		1.0	%
Expected volatility		22.1	%		26.5	%

The expected lives of options for purposes of these models are based on historical exercise behavior. The risk-free interest rates for purposes of these models are based on the U.S. Treasury yield curve in effect on the date of grant for the respective expected lives of the option. The expected dividend yields for purposes of these models are based on the dividends paid in the preceding four quarters divided by the grant date market value of the Common Stock. The expected volatility for purposes of these models are based on the historical volatility of the Common Stock.

Stock Appreciations Rights (SARs)

Certain non-U.S.-based employees were granted SARs. Each SAR award grants the employee the right to receive cash equal to the excess of the share price of the Company’s Common Stock on the date that a participant exercises such right over the grant date value of the SAR. SARs granted have three year pro rata vesting from the date of grant. SARs were issued at exercise prices equal to the fair value of the Company’s Common Stock on the date of grant and expire ten years from the date of grant. The fair value and compensation expense related to SARs are measured at each reporting period using the Black-Scholes option-pricing model, using assumptions similar to stock option awards. No SARs were granted in 2018 or 2017. As of March 31, 2018, there were 18,420 SARs outstanding and 17,464 were exercisable. In the three months ended March 31, 2018, 5,240 SARs were exercised. Stock based compensation expense attributable to SARs was minimal in the three months ended March 31, 2018 and 2017.

Restricted Stock and Share Units

Participants may also be awarded shares of restricted stock or share units under the Plan. The Company granted 96,841 and 107,755 share units under the plan in the three months ended March 31, 2018 and 2017, respectively. The share units were valued at $6.0 million and $5.4 million at the date of issuance in 2018 and 2017, respectively, based on the price of the Company’s Common Stock at the date of grant. The share units are recognized as compensation expense ratably over the three-year vesting period; however, included in share unit expense in the three months ended March 31, 2018 and 2017 was expense associated with accelerated vesting of share unit awards for certain employees who either are retirement eligible or will become retirement eligible during the vesting period. Stock based compensation expense attributable to share units of $3.3 million and $3.0 million was recognized in the three months ended March 31, 2018 and 2017, respectively. Certain non-U.S.-based employees receive the cash value of vested shares at the vesting date in lieu of shares.

A summary of share unit activity under the plan is as follows for the three months ended March 31, 2018:


	Number of Units			Weighted-Average Grant Date Value
Issued and unvested at January 1, 2018		433,290		$	34.96
Granted		96,841			61.73
Vested		(144,345	)		30.77
Forfeited		(4,320	)		41.57

Issued and unvested at March 31, 2018		381,466			42.53

Pensions

3 Months Ended

Mar. 31, 2018

Pensions

10.

Pensions

The following table presents the components of the Company’s net pension income.


(dollars in millions)
	Three Months Ended March 31,
	2018			2017
Service cost	$	0.5		$	0.4
Interest cost		7.2			7.5
Expected return on plan assets		(14.5	)		(14.4	)
Amortization of unrecognized loss		4.7			4.5
Amortization of prior service cost		(0.1	)		(0.1	)

Defined benefit plan income	$	(2.2	)	$	(2.1	)

The Company was not required to make a contribution to its U.S. pension plan in 2017 but made a voluntary $30 million contribution. The Company is not required to make a contribution and does not anticipate making a contribution in 2018.

As required under ASU 2017-07, the service cost component of net pension income was recorded in cost of products sold and selling, general and administrative expenses and the other components of net pension income were recorded in other income in the consolidated statements of earnings.

Segment Results

3 Months Ended

Mar. 31, 2018

Segment Results

11.

Segment Results

The Company is comprised of two reporting segments: North America and Rest of World. The Rest of World segment is primarily comprised of China, Europe and India. Both segments manufacture and market comprehensive lines of residential and commercial gas, and electric water heaters, boilers and water treatment products. Both segments primarily manufacture and market in their respective regions of the world. The North America segment also manufactures and markets water system tanks. The Rest of World segment also manufactures and markets in-home air purification products in China.

The following table presents the Company’s segment results:


(dollars in millions)
	Three Months Ended March 31,
	2018			2017
Net sales
North America	$	501.7		$	487.3
Rest of World		293.8			259.5
Inter-segment sales		(7.5	)		(6.8	)

	$	788.0		$	740.0

Segment earnings
North America ⁽¹⁾	$	106.0		$	104.2
Rest of World		36.1			32.5
Inter-segment earnings elimination		(0.1	)		(0.1	)

		142.0			136.6
Corporate expenses		(14.3	)		(14.0	)
Interest expense		(2.3	)		(2.2	)

Earnings before income taxes		125.4			120.4
Provision for income taxes		26.6			32.7

Net earnings	$	98.8		$	87.7

⁽¹⁾ includes restructuring and impairment expenses of:	$	6.7		$	—

Fair Value Measurements

3 Months Ended

Mar. 31, 2018

Fair Value Measurements

12.

Fair Value Measurements

ASC 820, Fair Value Measurements, among other things, defines fair value, establishes a consistent framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring basis or nonrecurring basis. ASC 820 clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, ASC 820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: (Level 1) observable inputs such as quoted prices in active markets; (Level 2) inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and (Level 3) unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

Assets and liabilities measured at fair value are based on the market approach which are prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities.

The following table presents assets measured at fair value on a recurring basis.


(dollars in millions)
Fair Value Measurement Using	March 31, 2018		December 31, 2017
Quoted prices in active markets for identical assets (Level 1)	$	434.9	$	475.1

There were no changes in the Company’s valuation techniques used to measure fair values on a recurring basis during the three months ended March 31, 2018.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Derivative Instruments

3 Months Ended

Mar. 31, 2018

Derivative Instruments

13.

Derivative Instruments

ASC 815 Derivatives and Hedging, as amended, requires that all derivative instruments be recorded on the balance sheet at fair value and establishes criteria for designation and effectiveness of the hedging relationships. The accounting for changes in the fair value of a derivative instrument depends on whether it has been designated and qualifies as a part of a hedging relationship and, further, on the type of hedging relationship. For those derivative instruments that are designated and qualify as hedging instruments, the Company must designate the hedging instrument, based upon the exposure hedged, as a fair value hedge, a cash flow hedge, or a hedge of a net investment in a foreign operation.

The Company utilizes certain derivative instruments to enhance its ability to manage currency exposure as well as raw materials price risk. Derivative instruments are entered into for periods consistent with the related underlying exposures and do not constitute positions independent of those exposures. The Company does not enter into contracts for speculative purposes. The contracts are executed with major financial institutions with no credit loss anticipated for failure of the counterparties to perform.

Cash Flow Hedges

With the exception of its net investment hedges, the Company designates that all of its hedging instruments are cash flow hedges. For derivative instruments that are designated and qualify as a cash flow hedge (i.e., hedging the exposure to variability in expected future cash flows that is attributable to a particular risk), gains or losses on the derivative instrument are reported as a component of other comprehensive loss, net of tax, and are reclassified into earnings in the same line item associated with the forecasted transaction and in the same period or periods during which the hedged transaction affects earnings.

Foreign Currency Forward Contracts

The Company is exposed to foreign currency exchange risk as a result of transactions in currencies other than the functional currency of certain subsidiaries. The Company utilizes foreign currency forward purchase and sale contracts to manage the volatility associated with foreign currency purchases, sales and certain intercompany transactions in the normal course of business. Principal currencies for which the Company utilizes foreign currency forward contracts include the British pound, Canadian dollar, Euro and Mexican peso.

Gains and losses on these instruments are recorded in accumulated other comprehensive loss, net of tax, until the underlying transaction is recorded in earnings. When the hedged item is realized, gains or losses are reclassified from accumulated other comprehensive loss to the consolidated statement of earnings. The assessment of effectiveness for forward contracts is based on changes in the forward rates. These hedges have been determined to be effective.

The majority of the amounts in accumulated other comprehensive loss for cash flow hedges are expected to be reclassified into earnings within one year.

The following table summarizes, by currency, the contractual amounts of the Company’s foreign currency forward contracts that are designated as cash flow hedges.


(dollars in millions)
	March 31,
	2018				2017
	Buy		Sell		Buy		Sell
British pound	$	—	$	0.9	$	—	$	0.9
Canadian dollar		—		36.6		—		58.8
Euro		23.0		2.5		19.1		1.4
Mexican peso		16.1		—		13.7		—

Total	$	39.1	$	40.0	$	32.8	$	61.1

Commodity Futures Contracts

In addition to entering into supply arrangements in the normal course of business, the Company also enters into futures contracts to fix the cost of certain raw material purchases, principally steel, with the objective of minimizing changes in cost due to market price fluctuations. The hedging strategy for achieving this objective is to purchase steel futures contracts on the New York Metals Exchange (NYMEX) and copper futures contracts on the open market of the London Metals Exchange (LME) or over the counter contracts based on the LME.

With NYMEX, the Company is required to make cash deposits on unrealized losses on steel derivative contracts.

The after-tax gains and losses of the contracts as of March 31, 2018 were recorded in accumulated other comprehensive loss and will be reclassified into cost of products sold in the period in which the underlying transaction is recorded in earnings. The after-tax gains and losses on the contracts will be reclassified within one year. The Company has no commodities futures contracts outstanding as of March 31, 2018.

Net Investment Hedges

The Company enters into certain foreign currency forward contracts to hedge the exposure to a portion of the Company’s net investments in certain non-U.S. subsidiaries against the effect of exchange rate fluctuations on the translation of foreign currency balances to the U.S. dollar. For the derivative instruments that are designated and qualify as net investment hedges, gains and losses are reported in other comprehensive loss where they offset gains and losses recorded on the Company’s net investments in its non-U.S. subsidiaries. These hedges are determined to be effective. The Company recognized $4.2 million of after-tax losses associated with hedges of a net investment in non-U.S. subsidiaries in currency translation adjustment in other comprehensive loss in the three months ended March 31, 2018. The contractual amount of the Company’s foreign currency forward contracts that are designated as net investment hedges is $237.5 million as of March 31, 2018.

The following tables present the impact of derivative contracts on the Company’s financial statements.

Fair value of derivatives designated as hedging instruments under ASC 815:


(dollars in millions)
	Balance Sheet Location	March 31, 2018			December 31, 2017
Foreign currency contracts	Other current assets	$	1.3		$	0.2
	Accrued liabilities		(4.2	)		(1.8	)
Commodities contracts	Other current assets		0.3			0.2
	Accrued liabilities		—			—

Total derivatives designated as hedging instruments		$	(2.6	)	$	(1.4	)

The effect of derivatives instruments on the condensed consolidated statement of earnings:

Three Months Ended March 31 (dollars in millions):


Derivatives in ASC 815 cash flow hedging relationships	Amount of gain (loss) recognized in other comprehensive loss on derivative				Location of gain (loss) reclassified from accumulated other comprehensive loss into earnings		Amount of gain (loss) reclassified from accumulated other comprehensive loss into earnings
	2018		2017				2018		2017
Foreign currency contracts	$	2.8	$	1.1		Cost of products sold	$	—	$	—
Commodities contracts		0.1		—		Cost of products sold		—		(0.5	)

	$	2.9	$	1.1			$	—	$	(0.5	)

Income Taxes

3 Months Ended

Mar. 31, 2018

Income Taxes

14.

Income Taxes

The effective income tax rate for the three months ended March 31, 2018 was 21.2 percent compared to 27.2 percent for the three months ended March 31, 2017. The Company estimates that its annual effective income tax rate for the full year 2018 will be approximately 22 percent. The lower effective income tax rate for the three months ended March 31, 2018 compared to the effective income tax rate for the three months ended March 31, 2017 was primarily due to lower federal income taxes related to the U.S. Tax Cuts & Jobs Act (U.S. Tax Reform) which were partially offset by lower income tax benefits from settled stock based compensation awards.

As of March 31, 2018, the Company had $6.2 million of unrecognized tax benefits of which $0.6 million would affect its effective income tax rate if recognized. The Company recognizes potential interest and penalties related to unrecognized tax benefits as a component of income tax expense.

The Company’s U.S. federal income tax returns for 2015-2017 are subject to audit. The Company is subject to state and local income tax audits for tax years 2001-2017. The Company is subject to non-U.S. income tax examinations for years 2009-2017.

U.S. Tax Reform was enacted on December 22, 2017 and significantly changed U.S. corporate income tax laws. Among other things, U.S. Tax Reform reduced the U.S. corporate income tax rate to 21 percent commencing on January 1, 2018, implemented a territorial tax system and levied a one-time mandatory tax on undistributed earnings of foreign subsidiaries of U.S. companies. In 2017, the Company recognized $81.8 million of provisional income tax expense primarily related to the one-time mandatory tax on undistributed foreign earnings. As permitted under the SEC Staff Accounting Bulletin 118, the Company continues to evaluate its calculations associated with the U.S. Tax Reform. The ultimate impact of U.S. Tax Reform may differ from the provisional amounts recorded in 2017 due to future changes in interpretation of the guidance issued. No adjustments were recorded in the three months ended March 31, 2018.

For tax years beginning after December 31, 2017, U.S. Tax Reform subjects U.S. shareholders to tax on Global Intangible Low-Taxed Income (GILTI) earned by certain foreign subsidiaries. The FASB Staff Q&A, Topic 740, No. 5, Accounting for GILTI, states than an entity can make an accounting policy election to either recognize deferred taxes for temporary basis differences expected to reverse as GILTI in future years or provide for the tax expense related to GILTI in the year the tax is incurred as a period expense only. Given the complexity of the GILTI provisions, the Company is still evaluating the effects of the GILTI provisions and has not yet determined an accounting policy. At March 31, 2018, the Company has included GILTI related to current year earnings only in its estimated annual effective tax rate and has not provided additional GILTI on deferred items.

Changes in Accumulated Other Comprehensive Loss by Component

3 Months Ended

Mar. 31, 2018

Changes in Accumulated Other Comprehensive Loss by Component

15.

Changes in Accumulated Other Comprehensive Loss by Component

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


(dollars in millions)
	Three Months Ended March 31,
	2018			2017
Cumulative foreign currency translation
Balance at beginning of period	$	(26.5	)	$	(79.2	)
Other comprehensive income before reclassifications		18.4			7.3

Balance at end of period		(8.1	)		(71.9	)

Unrealized net gain on cash flow derivatives
Balance at beginning of period		(0.9	)		0.2
Other comprehensive income before reclassifications		2.0			0.8
Realized gains on derivatives reclassified to cost of products sold (net of income tax provision of $- and $(0.2) in 2018 and 2017, respectively)		—			0.3

Balance at end of period		1.1			1.3

Pension liability
Balance at beginning of period		(272.1	)		(284.2	)
Amounts reclassified from accumulated other comprehensive loss: ⁽¹⁾		3.4			2.6

Balance at end of period		(268.7	)		(281.6	)

Accumulated other comprehensive loss, end of period	$	(275.7	)	$	(352.2	)

⁽¹⁾

Amortization of pension items:


Actuarial losses	$	4.7	⁽²⁾	$	4.5	⁽²⁾
Prior year service cost		(0.1	)⁽²⁾		(0.1	)⁽²⁾

		4.6			4.4
Income tax benefit		(1.2	)		(1.8	)

Reclassification net of income tax benefit	$	3.4		$	2.6

⁽²⁾

These accumulated other comprehensive loss components are included in the computation of net periodic pension cost. See Note 10 - Pensions for additional details

Basis of Presentation (Policies)

3 Months Ended

Mar. 31, 2018

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In May 2014, the FASB issued ASC 606-10, Revenue from Contracts with Customers (issued under ASU 2014-09). ASU 2014-09 replaces all previously existing revenue recognition guidance. The Company adopted ASU2014-09 on January 1, 2018 using the full retrospective method and therefore applied the standard to all contracts commencing on or after January 1, 2016. The Company recognized a net after-tax reduction to opening retained earnings of $3.9 million as of January 1, 2016 in connection with the adoption of ASU 2014-09. The adoption of ASU 2014-09 does not have a material impact on the Company’s consolidated balance sheets, statements of earnings or statements of cash flows. See Note 2 - Revenue Recognition for further discussion.

Revenue Recognition (Tables)

3 Months Ended

Mar. 31, 2018

Segment Sales Disaggregated by Major Product Line

In addition, the Company’s Rest of World segment sales are disaggregated by China and all other Rest of World.


(dollars in millions)
	Three Months Ended March 31,
	2018			2017
North America
Water heaters and related parts	$	446.8		$	444.4
Boilers and related parts		36.9			32.6
Water treatment products		18.0			10.3

Total North America		501.7			487.3
Rest of World
China		275.8			244.2
All other Rest of World		18.0			15.3

Total Rest of World		293.8			259.5
Inter-segment sales		(7.5	)		(6.8	)

Total Net Sales	$	788.0		$	740.0

Acquisitions (Tables)

3 Months Ended

Mar. 31, 2018

Hague

Summary of Preliminary Allocation of Fair Value of Assets Acquired and Liabilities Assumed at Date of Acquisition


September 5, 2017 (dollars in millions)
Current assets, net of cash acquired	$	7.8
Property, plant and equipment		6.9
Intangible assets		12.8
Goodwill		22.2

Total assets acquired		49.7
Current liabilities		(5.6	)
Long-term liabilities		(1.0	)

Total liabilities assumed		(6.6	)

Net assets acquired	$	43.1

Restructuring and Impairment Expenses (Tables)

3 Months Ended

Mar. 31, 2018

Analysis of Company's Restructuring Reserve

The following table presents an analysis of the Company’s restructuring reserve as of and for three months ended March 31, 2018:


(dollars in millions)
	Severance Costs		Lease Exit Costs		Fixed Assets Impairment		Total
Balance at January 1, 2018	$	—	$	—	$	—	$	—
Restructuring expense recognized		4.0		2.1		0.6		6.7

Balance at March 31, 2018	$	4.0	$	2.1	$	0.6	$	6.7

Inventories (Tables)

3 Months Ended

Mar. 31, 2018

Schedule of Inventories


(dollars in millions)
	March 31, 2018			December 31, 2017
Finished products	$	134.7		$	140.4
Work in process		20.3			18.3
Raw materials		154.5			160.5

Inventories, at FIFO cost		309.5			319.2
LIFO reserve		(22.4	)		(22.2	)

Net inventory	$	287.1		$	297.0

Product Warranties (Tables)

3 Months Ended

Mar. 31, 2018

Schedule of Product Warranty Liability Activity

The following table presents the Company’s warranty liability activity.


(dollars in millions)
	2018			2017
Balance at January 1	$	142.4		$	140.9
Expense		11.6			12.4
Claims settled		(11.1	)		(10.7	)

Balance at March 31	$	142.9		$	142.6

Earnings per Share of Common Stock (Tables)

3 Months Ended

Mar. 31, 2018

Schedule of Computation of Basic and Diluted Weighted Average Shares Used in EPS Calculations

The following table sets forth the computation of basic and diluted weighted-average shares used in the earnings per share calculations:


	Three Months Ended March 31,
	2018		2017
Denominator for basic earnings per share - weighted average shares		171,532,008		173,380,076
Effect of dilutive stock options, restricted stock and share units		1,818,656		2,039,843

Denominator for diluted earnings per share		173,350,664		175,419,919

Stock Based Compensation (Tables)

3 Months Ended

Mar. 31, 2018

Schedule of Changes in Option Shares

Changes in option shares, all of which relate to the Company’s Common Stock, were as follows for the three months ended March 31, 2018:


	Weighted-Avg. Per Share Exercise Price		Number of Options			Average Remaining Contractual Life		Aggregate Intrinsic Value (dollars in millions)
Outstanding at January 1, 2018	$	27.73		2,263,126
Granted		61.80		348,870
Exercised		25.78		(73,775	)
Terminated		49.39		(11,600	)

Outstanding at March 31, 2018		32.39		2,526,621			7 years	$	78.8

Exercisable at March 31, 2018		24.29		1,766,015			6 years	$	69.4

Schedule of Weighted Average Fair Value per Option at Date of Grant


	Three Months Ended March 31,
	2018			2017
Expected life (years)		5.7			5.7
Risk-free interest rate		2.9	%		2.4	%
Dividend yield		1.0	%		1.0	%
Expected volatility		22.1	%		26.5	%

Schedule of Share Unit Activity Under Plan

A summary of share unit activity under the plan is as follows for the three months ended March 31, 2018:


	Number of Units			Weighted-Average Grant Date Value
Issued and unvested at January 1, 2018		433,290		$	34.96
Granted		96,841			61.73
Vested		(144,345	)		30.77
Forfeited		(4,320	)		41.57

Issued and unvested at March 31, 2018		381,466			42.53

Pensions (Tables)

3 Months Ended

Mar. 31, 2018

Schedule of Components of Net Pension Income

The following table presents the components of the Company’s net pension income.


(dollars in millions)
	Three Months Ended March 31,
	2018			2017
Service cost	$	0.5		$	0.4
Interest cost		7.2			7.5
Expected return on plan assets		(14.5	)		(14.4	)
Amortization of unrecognized loss		4.7			4.5
Amortization of prior service cost		(0.1	)		(0.1	)

Defined benefit plan income	$	(2.2	)	$	(2.1	)

Segment Results (Tables)

3 Months Ended

Mar. 31, 2018

Schedule of Earnings

The following table presents the Company’s segment results:


(dollars in millions)
	Three Months Ended March 31,
	2018			2017
Net sales
North America	$	501.7		$	487.3
Rest of World		293.8			259.5
Inter-segment sales		(7.5	)		(6.8	)

	$	788.0		$	740.0

Segment earnings
North America ⁽¹⁾	$	106.0		$	104.2
Rest of World		36.1			32.5
Inter-segment earnings elimination		(0.1	)		(0.1	)

		142.0			136.6
Corporate expenses		(14.3	)		(14.0	)
Interest expense		(2.3	)		(2.2	)

Earnings before income taxes		125.4			120.4
Provision for income taxes		26.6			32.7

Net earnings	$	98.8		$	87.7

⁽¹⁾ includes restructuring and impairment expenses of:	$	6.7		$	—

Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2018

Schedule of Assets Measured at Fair Value on Recurring Basis

The following table presents assets measured at fair value on a recurring basis.


(dollars in millions)
Fair Value Measurement Using	March 31, 2018		December 31, 2017
Quoted prices in active markets for identical assets (Level 1)	$	434.9	$	475.1

Derivative Instruments (Tables)

3 Months Ended

Mar. 31, 2018

Schedule of Effect of Derivatives Instruments on Condensed Consolidated Statement of Earnings

The effect of derivatives instruments on the condensed consolidated statement of earnings:

Three Months Ended March 31 (dollars in millions):


Derivatives in ASC 815 cash flow hedging relationships	Amount of gain (loss) recognized in other comprehensive loss on derivative				Location of gain (loss) reclassified from accumulated other comprehensive loss into earnings		Amount of gain (loss) reclassified from accumulated other comprehensive loss into earnings
	2018		2017				2018		2017
Foreign currency contracts	$	2.8	$	1.1		Cost of products sold	$	—	$	—
Commodities contracts		0.1		—		Cost of products sold		—		(0.5	)

	$	2.9	$	1.1			$	—	$	(0.5	)

Designated as Hedging Instrument

Schedule of Summary by Currency of Foreign Currency Forward Contracts

The following table summarizes, by currency, the contractual amounts of the Company’s foreign currency forward contracts that are designated as cash flow hedges.


(dollars in millions)
	March 31,
	2018				2017
	Buy		Sell		Buy		Sell
British pound	$	—	$	0.9	$	—	$	0.9
Canadian dollar		—		36.6		—		58.8
Euro		23.0		2.5		19.1		1.4
Mexican peso		16.1		—		13.7		—

Total	$	39.1	$	40.0	$	32.8	$	61.1

Schedule of Impact of Cash Flow Hedges on Company's Financial Statements

The following tables present the impact of derivative contracts on the Company’s financial statements.

Fair value of derivatives designated as hedging instruments under ASC 815:


(dollars in millions)
	Balance Sheet Location	March 31, 2018			December 31, 2017
Foreign currency contracts	Other current assets	$	1.3		$	0.2
	Accrued liabilities		(4.2	)		(1.8	)
Commodities contracts	Other current assets		0.3			0.2
	Accrued liabilities		—			—

Total derivatives designated as hedging instruments		$	(2.6	)	$	(1.4	)

Changes in Accumulated Other Comprehensive Loss by Component (Tables)

3 Months Ended

Mar. 31, 2018

Changes to Accumulated Other Comprehensive Loss by Component

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


(dollars in millions)
	Three Months Ended March 31,
	2018			2017
Cumulative foreign currency translation
Balance at beginning of period	$	(26.5	)	$	(79.2	)
Other comprehensive income before reclassifications		18.4			7.3

Balance at end of period		(8.1	)		(71.9	)

Unrealized net gain on cash flow derivatives
Balance at beginning of period		(0.9	)		0.2
Other comprehensive income before reclassifications		2.0			0.8
Realized gains on derivatives reclassified to cost of products sold (net of income tax provision of $- and $(0.2) in 2018 and 2017, respectively)		—			0.3

Balance at end of period		1.1			1.3

Pension liability
Balance at beginning of period		(272.1	)		(284.2	)
Amounts reclassified from accumulated other comprehensive loss: ⁽¹⁾		3.4			2.6

Balance at end of period		(268.7	)		(281.6	)

Accumulated other comprehensive loss, end of period	$	(275.7	)	$	(352.2	)

⁽¹⁾

Amortization of pension items:


Actuarial losses	$	4.7	⁽²⁾	$	4.5	⁽²⁾
Prior year service cost		(0.1	)⁽²⁾		(0.1	)⁽²⁾

		4.6			4.4
Income tax benefit		(1.2	)		(1.8	)

Reclassification net of income tax benefit	$	3.4		$	2.6

⁽²⁾

These accumulated other comprehensive loss components are included in the computation of net periodic pension cost. See Note 10 - Pensions for additional details

Basis of Presentation - Additional Information (Detail) $ in Millions	Jan. 01, 2018 USD ($)
Retained Earnings \| Accounting Standards Update 2014-09
Net after tax reduction to opening retained earnings	$ 3.9
Cost of Products Sold \| Accounting Standards Update 2017-07
Reclassified amounts of non-service cost pension income on adoption of amendment	1.4
Selling, General and Administrative Expenses \| Accounting Standards Update 2017-07
Reclassified amounts of non-service cost pension income on adoption of amendment	$ 1.1

Revenue Recognition - Additional Information (Detail) $ in Millions	3 Months Ended
	Mar. 31, 2018 USD ($) Segment Distributor	Dec. 31, 2017 USD ($)
Customer deposits liability	$ 57.4	$ 56.0
Allowance for doubtful accounts	$ 5.8	$ 5.3
Number of reportable segments \| Segment	2
Water Heaters \| North America
Number of wholesale distributors \| Distributor	1,200

Segment Sales Disaggregated by Major Product Line (Detail) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Net sales	$ 788.0	$ 740.0
Inter-segment
Net sales	(7.5)	(6.8)
North America \| Operating Segments
Net sales	501.7	487.3
North America \| Operating Segments \| Water Heaters and Related Parts
Net sales	446.8	444.4
North America \| Operating Segments \| Boilers and Related Parts
Net sales	36.9	32.6
North America \| Operating Segments \| Water Treatment Products
Net sales	18.0	10.3
Rest of World \| Operating Segments
Net sales	293.8	259.5
Rest of World \| Operating Segments \| China
Net sales	275.8	244.2
Rest of World \| Operating Segments \| All Other Rest of World
Net sales	$ 18.0	$ 15.3

Acquisitions - Additional Information (Detail) - Hague - USD ($) $ in Millions	Sep. 05, 2017	Mar. 31, 2018
Business Acquisition [Line Items]
Percentage of ownership interest acquired	100.00%
Aggregate cash purchase price, net of cash acquired	$ 43.1
Cash acquired from business acquisition	4.1
Contingent consideration and holdback	$ 1.5	$ 2.0
Contingent consideration, conditions measurement period	2 years
Acquisition-related costs	$ 0.2
Acquired intangible assets	12.8
Maximum
Business Acquisition [Line Items]
Contingent consideration and holdback	2.0
Trade Names
Business Acquisition [Line Items]
Acquired intangible assets, not subject to amortization	1.1
Customer Lists
Business Acquisition [Line Items]
Acquired intangible assets, subject to amortization	$ 11.7
Acquired intangible assets, amortization period, in years	18 years

Summary of Preliminary Allocation of Fair Value of Assets Acquired and Liabilities Assumed at Date of Acquisition (Detail) - USD ($) $ in Millions	Mar. 31, 2018	Dec. 31, 2017	Sep. 05, 2017
Business Acquisition [Line Items]
Goodwill	$ 515.7	$ 516.7
Hague
Business Acquisition [Line Items]
Current assets, net of cash acquired			$ 7.8
Property, plant and equipment			6.9
Intangible assets			12.8
Goodwill			22.2
Total assets acquired			49.7
Current liabilities			(5.6)
Long-term liabilities			(1.0)
Total liabilities assumed			(6.6)
Net assets acquired			$ 43.1

Restructuring and Impairment Expenses - Additional Information (Detail) - USD ($) $ in Millions		3 Months Ended
	Mar. 21, 2018	Mar. 31, 2018	Mar. 31, 2017
Restructuring expense recognized	$ 6.7	$ 6.7
Severance costs	4.0
Lease exit cost	2.1
Impairment of long-lived assets	0.6
Income tax expense (benefit)		$ 26.6	$ 32.7
Restructuring and Impairment Charges
Income tax expense (benefit)	$ 1.7

Analysis of Company's Restructuring Reserve (Detail) - USD ($) $ in Millions		3 Months Ended
	Mar. 21, 2018	Mar. 31, 2018
Restructuring expense recognized	$ 6.7	$ 6.7
Ending balance		6.7
Severance Costs
Restructuring expense recognized		4.0
Ending balance		4.0
Lease Exit Costs
Restructuring expense recognized		2.1
Ending balance		2.1
Fixed Assets Impairment
Restructuring expense recognized		0.6
Ending balance		$ 0.6

Schedule of Inventories (Detail) - USD ($) $ in Millions	Mar. 31, 2018	Dec. 31, 2017
Inventories
Finished products	$ 134.7	$ 140.4
Work in process	20.3	18.3
Raw materials	154.5	160.5
Inventories, at FIFO cost	309.5	319.2
LIFO reserve	(22.4)	(22.2)
Net inventory	$ 287.1	$ 297.0

Company's Warranty Liability Activity (Detail) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Product Warranties
Balance at beginning of year	$ 142.4	$ 140.9
Expense	11.6	12.4
Claims settled	(11.1)	(10.7)
Balance at end of year	$ 142.9	$ 142.6

Long-Term Debt - Additional Information (Detail)	3 Months Ended
Long-Term Debt - Additional Information (Detail)	Mar. 31, 2018 USD ($) lender
Debt Instrument [Line Items]
Multi-currency revolving credit agreement	$ 500,000,000
Number of banks involved in multi-year multi-currency revolving credit agreement \| lender	9
Revolving credit facility, expiration date	Dec. 15, 2021
Multi-currency revolving credit agreement, maximum amount	$ 700,000,000

Schedule of Computation of Basic and Diluted Weighted-Average Shares Used in Earnings per Share Calculations (Detail) - shares	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Earnings Per Share Of Common Stock
Denominator for basic earnings per share - weighted average shares	171,532,008	173,380,076
Effect of dilutive stock options, restricted stock and share units	1,818,656	2,039,843
Denominator for diluted earnings per share	173,350,664	175,419,919

Stock Based Compensation - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock based compensation cost recognized	$ 6.5	$ 5.9
Stock option compensation expense recognized	$ 3.2	$ 2.9
Weighted-average fair value per option at the date of grant	$ 14.86	$ 13.04
Number of Options, outstanding	2,526,621		2,263,126
Number of options, exercisable at end of period	1,766,015
Number of options, exercised	73,775
Employee Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period	3 years	3 years
Award expiration period	10 years	10 years
Stock Appreciation Rights (SARs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period	3 years
Award expiration period	10 years
Number of Options, outstanding	18,420
Number of options, exercisable at end of period	17,464
Number of Options, granted	0	0
Number of options, exercised	5,240
Restricted Stock And Share Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period	3 years	3 years
Number of Units - Granted	96,841	107,755
Value of share units at the date of issuance	$ 6.0	$ 5.4
Share based compensation expense attributable to share units	$ 3.3	$ 3.0
A.O. Smith Combined Compensation Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares available for granting of options, restricted stock or share units	2,501,851

Changes in Option Awards All of Which Related to Common Stock (Detail) $ / shares in Units, $ in Millions	3 Months Ended
	Mar. 31, 2018 USD ($) $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted-Average Per Share Exercise Price, beginning period \| $ / shares	$ 27.73
Weighted-Average Per Share Exercise Price - Granted \| $ / shares	61.80
Weighted-Average Per Share Exercise Price - Exercised \| $ / shares	25.78
Weighted-Average Per Share Exercise Price - Terminated \| $ / shares	49.39
Weighted-Average Per Share Exercise Price, ending period \| $ / shares	32.39
Weighted-Average Per Share Exercise Price, Exercisable \| $ / shares	$ 24.29
Number of Options Outstanding, Beginning Balance \| shares	2,263,126
Number of Options, Granted \| shares	348,870
Number of Options, Exercised \| shares	(73,775)
Number of options, Terminated \| shares	(11,600)
Number of Options Outstanding, Ending Balance \| shares	2,526,621
Number of options, exercisable at end of period \| shares	1,766,015
Average Remaining Contractual Life, Outstanding at End of Period, Years	7 years
Average Remaining Contractual Life, Exercisable at End of Period, Years	6 years
Aggregate Intrinsic Value, Outstanding at End of Period \| $	$ 78.8
Aggregate Intrinsic Value, Exercisable at End of Period \| $	$ 69.4

Schedule of Weighted-Average Fair Value per Option at Date of Grant (Detail)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Stock Based Compensation [Abstract]
Expected life (years)	5 years 8 months 12 days	5 years 8 months 12 days
Risk-free interest rate	2.90%	2.40%
Dividend yield	1.00%	1.00%
Expected volatility	22.10%	26.50%

Summary of Share Unit Activity Under Plan (Detail) - Restricted Stock And Share Units - $ / shares	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Units Issued and unvested, Beginning of Period	433,290
Number of Units - Granted	96,841	107,755
Number of Units - Vested	(144,345)
Number of Units - Forfeited	(4,320)
Number of Units Issued and unvested, End of Period	381,466
Weighted-Average Grant Date Value, Beginning of Period	$ 34.96
Weighted-Average Grant Date Value - Granted	61.73
Weighted-Average Grant Date Value - Vested	30.77
Weighted-Average Grant Date Value - Forfeited	41.57
Weighted-Average Grant Date Value, End of Period	$ 42.53

Components of Company's Net Pension Income (Detail) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Pensions [Abstract]
Service cost	$ 0.5	$ 0.4
Interest cost	7.2	7.5
Expected return on plan assets	(14.5)	(14.4)
Amortization of unrecognized loss	4.7	4.5
Amortization of prior service cost	(0.1)	(0.1)
Defined benefit plan income	$ (2.2)	$ (2.1)

Pensions - Additional Information (Detail) $ in Millions	3 Months Ended
Pensions - Additional Information (Detail) $ in Millions	Mar. 31, 2018 USD ($)
Pension and Other Postretirement Benefits Disclosure [Line Items]
Voluntary pension contribution	$ 30

Segment Results - Additional Information (Detail)	3 Months Ended
Segment Results - Additional Information (Detail)	Mar. 31, 2018 Segment
Segment Reporting Information [Line Items]
Number of reporting segments	2

Schedule of Earnings (Detail) - USD ($)
$ in Millions

3 Months Ended

Mar. 31, 2018

Mar. 31, 2017

Segment Reporting Information [Line Items]

Net sales

$ 788.0

$ 740.0

Segment earnings

142.0

136.6

Other income (expense)

5.8

4.9

Interest expense

(2.3)

(2.2)

Earnings before provision for income taxes

125.4

120.4

Provision for income taxes

26.6

32.7

Net earnings

98.8

87.7

Inter-segment

Segment Reporting Information [Line Items]

Net sales

(7.5)

(6.8)

Segment earnings

(0.1)

Corporate

Segment Reporting Information [Line Items]

Other income (expense)

(14.3)

(14.0)

North America | Operating Segments

Segment Reporting Information [Line Items]

Net sales

501.7

487.3

Segment earnings

^[1]

106.0

104.2

Rest of World | Operating Segments

Segment Reporting Information [Line Items]

Net sales

293.8

259.5

Segment earnings

$ 36.1

$ 32.5

[1]	includes restructuring and impairment expenses of: $ 6.7 $ -

Schedule of Earnings (Parenthetical) (Detail) - USD ($) $ in Millions		3 Months Ended
	Mar. 21, 2018	Mar. 31, 2018
Segment Reporting Information [Line Items]
Restructuring expense recognized	$ 6.7	$ 6.7

Assets Measured at Fair Value on Recurring Basis (Detail) - USD ($) $ in Millions	Mar. 31, 2018	Dec. 31, 2017
Quoted Prices In Active Markets For Identical Assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value on recurring basis	$ 434.9	$ 475.1

Schedule of Summary by Currency of Foreign Currency Forward Contracts (Detail) - Foreign currency forward contracts - USD ($)	Mar. 31, 2018	Mar. 31, 2017
Buy
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Contractual amounts of foreign currency forward contracts	$ 39,100,000	$ 32,800,000
Buy \| Euro
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Contractual amounts of foreign currency forward contracts	23,000,000	19,100,000
Buy \| Mexican peso
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Contractual amounts of foreign currency forward contracts	16,100,000	13,700,000
Sell
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Contractual amounts of foreign currency forward contracts	40,000,000	61,100,000
Sell \| British pound
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Contractual amounts of foreign currency forward contracts	900,000	900,000
Sell \| Canadian dollar
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Contractual amounts of foreign currency forward contracts	36,600,000	58,800,000
Sell \| Euro
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Contractual amounts of foreign currency forward contracts	$ 2,500,000	$ 1,400,000

Derivative Instruments - Additional Information (Detail) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Trading Activity, Gains and Losses, Net [Line Items]
Derivative instruments, loss recognized in other comprehensive income (loss)	$ 18,400,000	$ 7,300,000
Net Investment Hedging \| Non-US
Trading Activity, Gains and Losses, Net [Line Items]
Contractual amounts of foreign currency forward contracts	237,500,000
Derivative instruments, loss recognized in other comprehensive income (loss)	$ 4,200,000
Commodity Futures Contracts
Trading Activity, Gains and Losses, Net [Line Items]
Reclassification period for effective portion of contract, in years	1 year
Contractual amounts of foreign currency forward contracts	$ 0

Impact of Derivative Contracts on Company's Financial Statements (Detail) - Designated as Hedging Instrument - USD ($) $ in Millions	Mar. 31, 2018	Dec. 31, 2017
Derivatives, Fair Value [Line Items]
Fair value of derivative instruments, total	$ (2.6)	$ (1.4)
Foreign Currency Contracts \| Other Current Assets
Derivatives, Fair Value [Line Items]
Fair value of derivative instruments, assets	1.3	0.2
Foreign Currency Contracts \| Accrued Liabilities
Derivatives, Fair Value [Line Items]
Fair value of derivative instruments, liabilities	(4.2)	(1.8)
Commodities Contracts \| Other Current Assets
Derivatives, Fair Value [Line Items]
Fair value of derivative instruments, assets	$ 0.3	$ 0.2

Schedule of Effect of Derivatives Instruments on Consolidated Statement of Earnings (Detail) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Derivative [Line Items]
Amount of gain (loss) recognized in other comprehensive loss on derivative	$ 2.9	$ 1.1
Amount of gain (loss) reclassified from accumulated other comprehensive loss into earnings		(0.5)
Foreign Currency Contracts
Derivative [Line Items]
Amount of gain (loss) recognized in other comprehensive loss on derivative	2.8	1.1
Commodities Contracts
Derivative [Line Items]
Amount of gain (loss) recognized in other comprehensive loss on derivative	$ 0.1
Commodities Contracts \| Cost Of Products Sold
Derivative [Line Items]
Amount of gain (loss) reclassified from accumulated other comprehensive loss into earnings		$ (0.5)

Income Taxes - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended		12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Income Tax Contingency [Line Items]
Effective tax rates	21.20%	27.20%
Unrecognized tax benefits	$ 6.2
Unrecognized tax benefits that would affect the effective tax rate, if recognized	$ 0.6
Effective income tax rate reconciliation, tax cuts and jobs act, percent	21.00%
Tax cuts and jobs act, transition tax for accumulated foreign earnings, income tax expense				$ 81.8
Scenario, Forecast
Income Tax Contingency [Line Items]
Effective tax rates			22.00%
Earliest Tax Year \| U.S. federal
Income Tax Contingency [Line Items]
Income tax examinations, years under examination	2015
Latest Tax Year \| U.S. federal
Income Tax Contingency [Line Items]
Income tax examinations, years under examination	2017
State and local \| Earliest Tax Year
Income Tax Contingency [Line Items]
Income tax examinations, years under examination	2001
State and local \| Latest Tax Year
Income Tax Contingency [Line Items]
Income tax examinations, years under examination	2017
Non-U.S. \| Earliest Tax Year
Income Tax Contingency [Line Items]
Income tax examinations, years under examination	2009
Non-U.S. \| Latest Tax Year
Income Tax Contingency [Line Items]
Income tax examinations, years under examination	2017

Changes in Accumulated Other Comprehensive Loss by Component (Detail) - USD ($)
$ in Millions

3 Months Ended

Mar. 31, 2018

Mar. 31, 2017

Accumulated Other Comprehensive Income (Loss) [Line Items]

Beginning balance

$ 1,644.9

Ending balance

1,708.4

Cumulative foreign currency translation

Accumulated Other Comprehensive Income (Loss) [Line Items]

Beginning balance

(26.5)

$ (79.2)

Other comprehensive income before reclassifications

18.4

7.3

Ending balance

(8.1)

(71.9)

Unrealized net gain on cash flow derivatives

Accumulated Other Comprehensive Income (Loss) [Line Items]

Beginning balance

(0.9)

0.2

Other comprehensive income before reclassifications

2.0

0.8

Realized gains on derivatives reclassified to cost of products sold (net of income tax provision of $- and $(0.2) in 2018 and 2017, respectively)

0.3

Ending balance

1.1

1.3

Pension liability

Accumulated Other Comprehensive Income (Loss) [Line Items]

Beginning balance

(272.1)

(284.2)

Amounts reclassified from accumulated other comprehensive loss

^[1]

3.4

2.6

Ending balance

(268.7)

(281.6)

Accumulated Other Comprehensive Loss

Accumulated Other Comprehensive Income (Loss) [Line Items]

Ending balance

$ (275.7)

$ (352.2)

[1]	Amortization of pension items: Actuarial losses $ 4.7 (2) $ 4.5 (2) Prior year service cost (0.1 )(2) (0.1 )(2) 4.6 4.4 Income tax benefit (1.2 ) (1.8 ) Reclassification net of income tax benefit $ 3.4 $ 2.6

Changes in Accumulated Other Comprehensive Loss by Component (Parenthetical) (Detail) - USD ($)
$ in Millions

3 Months Ended

Mar. 31, 2018

Mar. 31, 2017

Unrealized net gain on cash flow derivatives

Accumulated Other Comprehensive Income (Loss) [Line Items]

Realized (gains) losses on derivatives reclassified to cost of products sold, tax provision

$ (0.2)

Pension liability

Accumulated Other Comprehensive Income (Loss) [Line Items]

Reclassification, before income tax benefit

$ 4.6

4.4

Income tax benefit

(1.2)

(1.8)

Reclassification net of income tax benefit

^[1]

3.4

2.6

Actuarial losses

Accumulated Other Comprehensive Income (Loss) [Line Items]

Reclassification, before income tax benefit

^[2]

4.7

4.5

Prior year service cost

Accumulated Other Comprehensive Income (Loss) [Line Items]

Reclassification, before income tax benefit

^[2]

$ (0.1)

[1]	Amortization of pension items: Actuarial losses $ 4.7 (2) $ 4.5 (2) Prior year service cost (0.1 )(2) (0.1 )(2) 4.6 4.4 Income tax benefit (1.2 ) (1.8 ) Reclassification net of income tax benefit $ 3.4 $ 2.6
[2]	These accumulated other comprehensive loss components are included in the computation of net periodic pension cost. See Note 10 - Pensions for additional details