What changed in this filing

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Item 1. Financial Statements

2021-05-04 compared with 2021-02-04 · 157 added, 122 removed, 420 unchanged (40% of the section changed)

3 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

December 31, September 30,

March 31, September 30,

(in millions, except share amounts)

Cash and cash equivalents $ 228.2 $ 208.9

Restricted cash 2.2 —

Receivables, net 157.4 180.8

Inventories 167.2 162.5

Receivables, net of allowance of $ 5.8 million and $ 4.8 million

Inventories, net 179.4 162.5

Other current assets 22.7 29.0

1 unchanged sentence

Property, plant and equipment, net 268.5 253.8

Goodwill 101.1 99.8

Intangible assets 397.1 408.9

Goodwill 100.7 99.8

Other noncurrent assets 55.3 51.3

12 unchanged sentences

600,000,000 shares authorized;

158,315,601 and 158,064,750 shares outstanding at December 31, 2020 and September 30, 2020, respectively 1.6 1.6

158,490,451 and 158,064,750 shares outstanding at March 31, 2021 and September 30, 2020, respectively 1.6 1.6

Additional paid-in capital 1,364.2 1,378.0

7 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Three months ended

Three months ended Six months ended

March 31, March 31,

2021 2020 2021 2020

(in millions, except per share amounts)

26 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Three months ended

Three months ended Six months ended

March 31, March 31,

2021 2020 2021 2020

(in millions)

Net income $ 20.9 $ 23.8 $ 37.6 $ 34.1

Other comprehensive income (loss):

Other comprehensive (loss) income:

Pension 0.6 0.7 1.3 1.5

1 unchanged sentence

Foreign currency translation ( 0.5 ) ( 1.6 ) 4.0 1.8

Comprehensive income $ 21.7 $ 14.3

Total other comprehensive (loss) income, net — ( 1.1 ) 5.0 2.9

Total comprehensive income $ 20.9 $ 22.7 $ 42.6 $ 37.0

The accompanying notes are an integral part of the condensed consolidated financial statements.

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

Three months ended

Three months ended Six months ended

March 31, March 31,

2021 2020 2021 2020

(in millions)

5 unchanged sentences

Dividends declared ( 8.7 ) ( 8.3 ) ( 17.4 ) ( 16.6 )

Shares repurchased under buyback program — ( 5.0 ) — ( 5.0 )

Buyout of noncontrolling interest — — — ( 3.2 )

8 unchanged sentences

Balance, end of period ( 676.7 ) ( 752.1 ) ( 676.7 ) ( 752.1 )

Accumulated other comprehensive income (loss)

Accumulated other comprehensive (loss) income

Balance, beginning of period ( 19.7 ) ( 32.0 ) ( 24.7 ) ( 36.0 )

Other comprehensive income (loss) 5.0 4.0

Other comprehensive (loss) income — ( 1.1 ) 5.0 2.9

Balance, end of period ( 19.7 ) ( 33.1 ) ( 19.7 ) ( 33.1 )

8 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three months ended

Six months ended

(in millions)

5 unchanged sentences

Stock-based compensation 3.6 2.7

Retirement plans ( 0.5 ) 0.7

Pension (benefits) costs ( 1.0 ) 1.4

Deferred income taxes 2.4 0.9

1 unchanged sentence

Changes in assets and liabilities:

Receivables 24.0 41.0

Inventories ( 4.8 ) ( 21.0 )

Receivables, net ( 2.4 ) ( 8.2 )

Inventories, net ( 19.7 ) ( 13.4 )

Other assets 1.7 5.7

4 unchanged sentences

Net cash provided by (used in) operating activities

34.1 ( 12.4 )

Investing activities:

4 unchanged sentences

Financing activities:

Dividends ( 8.7 ) ( 8.3 )

Dividends paid ( 17.4 ) ( 16.6 )

Acquisition of joint venture partner’s interest — ( 5.2 )

3 unchanged sentences

Deferred financing costs paid ( 0.5 ) —

Common stock repurchased under buyback program — ( 5.0 )

Other ( 0.5 ) 0.5

2 unchanged sentences

Effect of currency exchange rate changes on cash 1.4 ( 0.4 )

Net change in cash, cash equivalents and restricted cash 14.1 ( 39.9 )

Cash, cash equivalents and restricted cash at beginning of period 208.9 176.7

Cash, cash equivalents and restricted cash at end of period $ 223.0 $ 136.8

Net change in cash and cash equivalents 19.3 ( 65.4 )

Cash and cash equivalents at beginning of period 208.9 176.7

Cash and cash equivalents at end of period $ 228.2 $ 111.3

The accompanying notes are an integral part of the condensed consolidated financial statements.

2 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED DECEMBER 31, 2020

FOR THE THREE AND SIX MONTHS ENDED MARCH 31, 2021

1 Organization and Basis of Presentation

9 unchanged sentences

Infrastructure acquired the remaining 51 % ownership interest in the business in October 2019.

We include the financial statements of Krausz Development Ltd.

and subsidiaries (“Krausz”) in our consolidated financial statements on a one-month lag.

Our consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”), which require us to make certain estimates and assumptions in recording assets, liabilities, sales and expenses and the disclosure of contingent assets and liabilities for the reporting periods.

During the three months ended March 31, 2021, we aligned the consolidation of the financial statements of Krausz Industries Development Ltd.

and subsidiaries (“Krausz”) in the Company’s consolidated financial statements, eliminating the previous inclusion of Krausz financial statements with a one-month reporting lag.

We believe this change in accounting principle is preferable as the financial statements of all of our subsidiaries are now reported on the same basis, providing the most current information available.

In accordance with applicable accounting literature, the elimination of the one-month reporting lag is considered to be a change in accounting principle.

The effect of the elimination of the reporting lag during the three and six months ended March 31, 2021 resulted in an increase of $6.0 million to net sales and an increase of $1.4 million to operating income.

We concluded that the effect of this change is not material to the balance sheets, statements of operations, statements of cash flows, net income and earnings per share and therefore have not retrospectively applied this change.

Actual results could differ from those estimates.

3 unchanged sentences

The condensed consolidated balance sheet at September 30, 2020 was derived from audited financial statements, but it does not include all disclosures required by GAAP.

Our business is seasonal as a result of cold weather conditions.

Net sales and operating income have historically been lowest in the three month periods ending December 31 and March 31 when the northern United States and all of Canada generally face weather conditions that restrict significant construction activity.

In preparing these financial statements in conformity with GAAP, we have considered and, where appropriate, reflected the effects of the COVID-19 pandemic on our operations.

5 unchanged sentences

Upon adoption, there was no material impact to our financial statements.

In November 2019, we announced the purchase of a new facility in Kimball Tennessee to support and enhance our investment in our Chattanooga large casting foundry.

In November 2019, we announced the purchase of a new facility in Kimball, Tennessee to support and enhance our investment in our Chattanooga, Tennessee large casting foundry.

As a result, we announced subsequent closures of our facilities in Hammond, Indiana and Woodland, Washington.

Expenses incurred for these closures are primarily related to personnel and inventory and are included in Strategic reorganization and other charges.

Expenses incurred for these closures were primarily related to personnel and inventory and are included in Strategic reorganization and other charges.

In March 2021, we announced the planned closures of our facilities in Aurora, Illinois and Surrey, British Columbia, Canada.

Most of the activities from these plants will be transferred to our Kimball, Tennessee facility.

We expect to substantially complete these facility closures by the third quarter of our fiscal year 2022 and expect to incur total expenses related to this restructuring of approximately $ 14.0 million, including termination benefit costs of approximately $ 4.8 million and other associated costs of $ 9.2 million.

Of the total $ 14.0 million estimated costs, approximately $ 3.6 million are expected to be non-cash charges.

Expenses incurred during the three months ended March 31, 2021 were approximately $ 3.3 million, including approximately $ 0.9 million of termination benefit costs which are included in Strategic reorganization and other charges and approximately $ 2.4 million in inventory write-downs which are included in Cost of sales.

Activity in accrued restructuring, reported as part of other current liabilities, is presented below.

Three months ended

Six months ended

(in millions)

Beginning balance $ 2.8 $ 1.7

Expenses related to personnel and other 0.2 0.4

Expenses incurred 1.0 1.6

Amounts paid ( 1.6 ) ( 2.7 )

Ending balance $ 2.2 $ 0.6

New Markets Tax Credit Program- On December 22, 2020, we entered a financing transaction with Wells Fargo Community Investment Holdings, LLC (“Wells Fargo”) related to our brass foundry construction project in Decatur, Illinois under a qualified New Markets Tax Credit program (“NMTC”).

New Markets Tax Credit Program

On December 22, 2020, we entered into a financing transaction with Wells Fargo Community Investment Holdings, LLC (“Wells Fargo”) related to our brass foundry construction project in Decatur, Illinois under a qualified New Markets Tax Credit program (“NMTC”).

The NMTC is a federal program intended to encourage capital investment in qualified lower income communities.

2 unchanged sentences

Wells Fargo is entitled to the associated tax credits, which are subject to 100% recapture if we do not comply with various regulations and contractual provisions surrounding the foundry project.

We have indemnified Wells Fargo for any loss or recapture of tax credits related to the transaction until the seven-year period elapses.

We have indemnified Wells Fargo for any loss or recapture of tax credits related to the transaction until the seven-year period lapses.

We do not anticipate any credit recaptures will be required in connection with this arrangement.

1 unchanged sentence

T he Sub-CDE then loaned $ 16.2 million to us, with the use of the loan proceeds restricted to foundry project expenditures.

At December 31, 2020, $ 2.2 million of these restricted proceeds remained, and the restriction on this cash lapsed in January 2021.

This transaction also includes a put/call provision under which we may be obligated or entitled to repurchase Wells Fargo’s interest in the investment fund.

6 unchanged sentences

Intercompany transactions between us and the VIEs have been eliminated in consolidation.

Wells Fargo’s contribution to the investment fund is consolidated in our financial statements as an Other noncurrent liability due to its redemption features.

Direct costs associated with Wells Fargo’s capital contribution have been netted against the recorded proceeds, resulting in a net cash contribution of $ 3.9 million.

Other direct costs incurred associated with executing the transaction were capitalized and will be recognized as interest expense over the seven-year tax credit period.

Wells Fargo’s contribution to the investment fund is included in our financial statements within Other noncurrent liabilities as a result of its redemption features.

Direct costs associated with Wells Fargo’s capital contribution have been netted against the recorded proceeds, resulting in a net cash contribution to us of $ 3.9 million.

Other direct costs incurred associated with executing the transaction were

capitalized and will be recognized as interest expense over the seven-year tax credit period.

Incremental costs to maintain the structure during the compliance period will be expensed as incurred.

8 unchanged sentences

The timing of revenue recognition, billings and cash collections results in customer receivables, customer advance payments and billings in excess of revenue recognized.

Customer receivables include amounts billed and currently due from customers as well as unbilled amounts (contract assets).

Customer receivables include amounts billed and currently due from customers as well as unbilled amounts.

Amounts are billed in accordance with contractual terms and unbilled amounts arise when the timing of billing differs from the timing of revenue recognized.

Customer advance payments and billings in excess of revenue are recognized and recorded as deferred revenue, the majority of which is classified as current based on the timing when we expect to recognize revenue.

Customer advance payments and billings in excess of revenue are recognized and recorded as deferred revenue, the majority of which is classified as current, based on the timing of when we expect to recognize revenue.

We reverse these contract liabilities and recognize revenue when we satisfy the related performance obligations.

We include current deferred revenue in Other current liabilities.

We include current deferred revenue within Other current liabilities.

The table below represents the balances of our customer receivables and deferred revenues.

December 31, September 30,

March 31, September 30,

(in millions)

6 unchanged sentences

Performance obligations are supported by customer contracts which provide frameworks for the nature of the distinct products or services.

We allocate the transaction price of each contract to the performance obligations on the basis of standalone selling price and recognize revenue when, or as, control of the performance obligation transfers to the customers.

Most of our performance obligations are satisfied at a “point in time” for sales of equipment and for provision of one-time services, and we generally recognize such revenue when goods are shipped or when the services are provided.

2 unchanged sentences

Such warranties generally cannot be purchased separately.

We accrue our expected cost of warranty at the time of sale.

We accrue our expected warranty obligations at the time of sale.

Costs to Obtain or Fulfill a Contract

We incur certain incremental costs to obtain a contract, which primarily relate to incremental sales commissions.

We incur certain incremental costs to obtain a contract, which primarily relate to sales commissions.

Our commissions are paid based on either orders or shipments, and we reserve the right to claw back any commission in the event of product returns or lost collections.

1 unchanged sentence

The reconciliation between the U.S.

federal statutory income tax rate and the effective tax rate is presented below.

Three months ended

federal statutory income tax rate and the effective income tax rate is presented below.

Three months ended Six months ended

March 31, March 31,

2021 2020 2021 2020

federal statutory income tax rate 21.0 % 21.0 % 21.0 % 21.0 %

7 unchanged sentences

Other 2.1 — 1.7 0.4

25.8 % 23.1 %

Walter Energy accrual — ( 0.3 )

Effective income tax rate 25.6 % 22.2 % 25.7 % 22.5 %

At December 31, 2020 and September 30, 2020, the gross liabilities for unrecognized income tax benefits were $ 4.6 million and $ 4.5 million, respectively, and are reflected in Other noncurrent liabilities.

At March 31, 2021 and September 30, 2020, the gross liabilities for unrecognized income tax benefits were $ 4.7 million and $ 4.5 million, respectively, and are reflected within Other noncurrent liabilities.

Borrowing Arrangements

The components of our long-term debt are presented below.

December 31, September 30,

March 31, September 30,

(in millions)

9 unchanged sentences

Substantially all of our U.S.

subsidiaries guarantee the Notes, which are subordinate to borrowings under the ABL.

Based on quoted market prices, the outstanding Notes had a fair value of $ 466.3 million at December 31, 2020.

subsidiaries guarantee the Notes, which are subordinate to borrowings under our asset-based lending agreement (“ABL Agreement”).

Based on quoted market prices, which is a Level 1 measurement, the outstanding Notes had a fair value of $ 465.8 million as of March 31, 2021 and September 30, 2020.

An indenture securing the Notes (“Indenture”) contains customary covenants and events of default, including covenants that limit our ability to incur certain debt and liens, pay dividends and make investments.

There are no financial maintenance covenants associated with the Indenture.

We believe we were in compliance with these covenants at March 31, 2021.

We may redeem some or all of the Notes at any time or from time to time prior to June 15, 2021 at certain “make-whole” redemption prices (as set forth in the Indenture) and on or after June 15, 2021 at specified redemption prices (as set forth in the Indenture).

Additionally, we may redeem up to 40% of the aggregate principal amount of the Notes at any time or from time to time prior to June 15, 2021 with the net proceeds of specified equity offerings at specified redemption prices (as set forth in the

Upon a change in control (as defined in the Indenture), we would be required to offer to purchase the Notes at a price equal to 101% of the outstanding principal amount of the Notes.

ABL Agreement .

Our asset based lending agreement (“ABL Agreement”) consists of a revolving credit facility for up to $ 175.0 million of revolving credit borrowings, swing line loans and letters of credit.

Our ABL Agreement consists of a $ 175.0 million revolving credit facility that includes up to $ 25.0 million in swing line loans and up to $ 60.0 million of letters of credit.

The ABL Agreement permits us to increase the size of the credit facility by an additional $ 150.0 million in certain circumstances subject to adequate borrowing base availability.

We may borrow up to $ 25.0 million through swing line loans and we are permitted to issue up to $ 60.0 million of letters of credit.

Borrowings under the ABL Agreement bear interest at a floating rate equal to LIBOR, plus an applicable margin ranging from 200 to 225 basis points, or a base rate, as defined in the ABL Agreement, plus an applicable margin ranging from 100 to 125 basis points.

At December 31, 2020, the applicable rate was LIBOR plus 200 basis points.

The ABL Agreement terminates on July 29, 2025 and provides for a commitment fee for any unused borrowing capacity of 37.5 basis points per annum.

Borrowings under the ABL Agreement bear interest at a floating rate equal to the London Inter-Bank Offered Rate (“LIBOR”), plus an applicable margin ranging from 200 to 225 basis points, or a base rate, as defined in the ABL Agreement, plus an applicable margin ranging from 100 to 125 basis points.

At March 31, 2021, the applicable rate was LIBOR plus 200 basis points.

The ABL Agreement is subject to mandatory prepayments if total outstanding borrowings under the ABL Agreement are greater than the aggregate commitments under the revolving credit facility or if we dispose of overdue accounts receivable in certain circumstances.

The borrowing base under the ABL Agreement is equal to the sum of (a) 85% of the value of eligible accounts receivable and (b) the lesser of (i) 70% of the value of eligible inventories or (ii) 85% of the net orderly liquidation value of eligible inventories, less certain reserves.

Prepayments may be made at any time with no penalty.

The ABL Agreement terminates on July 29, 2025 and includes a commitment fee for any unused borrowing capacity of 37.5 basis points per annum.

Our obligations under the ABL Agreement are secured by a first-priority perfected lien on all of our U.S.

1 unchanged sentence

Borrowings are not subject to any financial maintenance covenants unless excess availability is less than the greater of $ 17.5 million and 10 % of the Loan Cap as defined in the ABL Agreement.

Excess availability based on December 31, 2020 data, as reduced by outstanding letters of credit and accrued fees and expenses of $ 15.0 million, was $ 113.4 million.

Excess availability based on March 31, 2021 data was $ 154.4 million as reduced by outstanding letters of credit of $ 13.8 million and accrued fees and expenses of $ 1.6 million .

Derivative Financial Instruments

6 unchanged sentences

We have not designated these swaps as hedges and we include the changes in their fair values in earnings to offset the currency gains and losses associated with the intercompany loan.

The values of our currency swap contracts were liabilities of $ 1.1 million and $ 0.2 million at December 31, 2020 and September 30, 2020, respectively, and are included in Other noncurrent liabilities.

The currency swap contracts expire in February 2022.

The values of our currency swap contracts were liabilities of $ 1.4 million and $ 0.2 million at March 31, 2021 and September 30, 2020, respectively, and are included in Other current liabilities and Other noncurrent liabilities, respectively.

Retirement Plans

The components of net periodic benefit cost for our pension plans are presented below.

Three months ended

Three months ended Six months ended

March 31, March 31,

2021 2020 2021 2020

(in millions)

10 unchanged sentences

Stock Incentive Plan (the “2006 Stock Plan”), Phantom Plan instruments under our Mueller Water Products, Inc.

2012 Phantom Plan, and Employee stock purchase plan instruments under our 2006 Employee Stock Purchase Plan during the three months ended December 31, 2020 as follows.

Number granted Weighted average grant date fair value per instrument Total grant date fair value

2012 Phantom Plan, and Employee stock purchase plan instruments under our 2006 Employee Stock Purchase Plan.

Grants during the six months ended March 31, 2021 are as follows.

Units granted Weighted average grant date fair value per instrument Total grant date fair value

(in millions)

7 unchanged sentences

Employee stock purchase plan instruments 40,286 1.92 0.1

Quarter ended March 31, 2021

MRSUs 4,187 $ 14.26 $ 0.1

Phantom Plan instruments 1,254 11.94 —

Restricted stock units 82,565 12.81 1.1

Non-qualified stock options 8,115 3.08 —

Employee stock purchase plan instruments 35,325 2.24 0.1

An MRSU award represents a target number of units that may be paid out at the end of a three-year award cycle based on a calculation of our relative total shareholder return (“TSR”) performance as compared with a selected peer group's TSR.

Settlements, in our common shares, will range from zero to two times the number of MRSUs granted, depending on our TSR performance relative to that of the peer group.

Compensation expense attributed to MRSUs is based on the fair value of the awards on their respective grant dates, as determined using a Monte Carlo model.

Compensation expense attributable to MRSUs is based on the fair value of the awards on their respective grant dates, as determined using a Monte Carlo model.

The assumptions used to determine the grant date fair value are indicated below.

December 2, 2020

January 27, 2021 December 2, 2020

Variables used in determining grant date fair value:

6 unchanged sentences

The expected term represents the average period of time the units are expected to be outstanding.

At December 31, 2020, the outstanding Phantom Plan instruments had a fair value of $ 12.38 per instrument and our liability for Phantom Plan instruments was $ 1.3 million and is included within current and noncurrent liabilities.

At March 31, 2021, the outstanding Phantom Plan instruments had a fair value of $ 13.89 per instrument and our liability for Phantom Plan instruments was $ 2.0 million and is included within Other current liabilities and Other noncurrent liabilities.

Stock options generally vest on each anniversary date of the original grant ratably over three years.

1 unchanged sentence

The assumptions used to determine the grant date fair value are indicated below.

December 2, 2020

January 27, 2021 December 2, 2020

Dividend yield 2.01 % 2.01 %

9 unchanged sentences

Settlements, in our common shares, will range from zero to two times the number of PRSUs granted, depending on our financial performance relative to the targets.

We issued 103,058 shares of common stock during the three months ended December 31, 2020 to settle PRSUs during the period.

Additionally, we issued 125,576 and 63,433 shares of common stock to settle restricted stock units vested and stock options exercised, respectively, during the three months ended December 31, 2020.

Operating income included stock-based compensation expense of $ 2.5 million and $ 1.9 million during the three months ended December 31, 2020 and 2019, respectively.

At December 31, 2020, there was approximately $ 14.1 million of unrecognized compensation expense related to stock-based compensation arrangements and there were 204,520 PRSUs that have been awarded for the 2021 and 2022 performance periods for which performance goal achievement cannot yet be determined.

We excluded 258,522 and 108,976 stock-based compensation instruments from the calculations of diluted earnings per share for the three months ended December 31, 2020 and 2019, respectively, since their inclusion would have been antidilutive.

We did not issue any shares of common stock during the three months ended March 31, 2021.

We issued 103,058 shares of common stock during the six months ended March 31, 2021 to settle PRSUs during the period.

Additionally, we issued 93,973 and 219,549 shares of common stock to settle restricted stock units vested and issued 45,517 and 108,950 shares of common stock to settle stock options exercised during the three and six months ended March 31, 2021, respectively.

Operating income included stock-based compensation expense of $ 2.5 million and $ 1.3 million during the three months ended March 31, 2021 and 2020, respectively, and $ 5.0 million and $ 3.2 million during the six months ended March 31, 2021 and 2020, respectively.

At March 31, 2021, there was approximately $ 13.2 million of unrecognized compensation expense related to stock-based compensation arrangements and there were 199,994 PRSUs that have been awarded for the 2021 and 2022 performance periods for which performance goal achievement cannot yet be determined.

We excluded 664,082 and 267,697 stock-based compensation instruments from the calculations of diluted earnings per share for the three months ended March 31, 2021 and 2020, respectively, and 447,086 and 184,296 for the six months ended March 31, 2021 and 2020, respectively, since their inclusion would have been antidilutive.

Supplemental Balance Sheet Information

Selected supplemental asset information is presented below.

December 31, September 30,

March 31, September 30,

(in millions)

Cash, cash equivalents and restricted cash:

Cash, cash equivalents $ 220.8 $ 208.9

Restricted cash 2.2 —

$ 223.0 $ 208.9

Inventories, net:

Purchased components and raw material $ 94.0 $ 87.3

1 unchanged sentence

Finished goods 51.1 42.8

$ 167.2 $ 162.5

Total inventories, net $ 179.4 $ 162.5

Other current assets:

4 unchanged sentences

Other 2.8 0.4

$ 30.3 $ 29.0

Property, plant and equipment:

Total other current assets $ 22.7 $ 29.0

Property, plant and equipment, net:

Land $ 6.1 $ 6.2

2 unchanged sentences

Construction in progress 68.4 57.4

Total property, plant and equipment 579.0 550.3

Accumulated depreciation ( 310.5 ) ( 296.5 )

$ 261.4 $ 253.8

Total property, plant and equipment, net $ 268.5 $ 253.8

Other noncurrent assets:

Operating lease right-of-use asset $ 25.2 $ 25.6

Operating lease right-of-use assets $ 24.7 $ 25.6

Maintenance and repair supplies and tooling 18.7 17.5

Workers compensation reimbursement receivable 2.0 2.1

Pension asset 2.0 0.9

Pension assets 3.1 0.9

Note receivable 1.8 1.8

1 unchanged sentence

Other 3.5 2.1

$ 53.3 $ 51.3

Total other noncurrent assets $ 55.3 $ 51.3

Selected supplemental liability information is presented below.

December 31, September 30,

March 31, September 30,

(in millions)

2 unchanged sentences

Customer rebates 6.6 9.6

Warranty 6.5 7.2

Warranty accrual 4.8 7.2

Deferred revenues 4.1 5.6

2 unchanged sentences

Operating lease liabilities 3.9 4.0

Accrued settlements 3.8 0.2

Workers compensation accrual 2.9 2.7

CARES Act payroll tax liabilities 3.1 —

Restructuring 1.9 2.8

Environmental 1.2 1.2

Interest 1.1 7.3

Income taxes 0.2 0.2

Restructuring liabilities 2.2 2.8

Environmental liabilities 1.2 1.2

Interest payable 7.3 7.3

Income taxes payable 1.8 0.2

Other 7.7 5.0

$ 77.0 $ 86.6

Total other current liabilities $ 84.5 $ 86.6

Other noncurrent liabilities:

Operating lease liabilities $ 22.5 $ 23.3

Warranty 6.8 7.2

Transition tax 5.2 5.2

Warranty accrual 7.8 7.2

Transition tax liability 4.7 5.2

Unrecognized income tax benefits 4.7 4.5

NMTC liability 3.9 —

Workers compensation 3.8 3.8

Workers compensation accrual 3.7 3.8

Asset retirement obligation 3.6 3.5

2 unchanged sentences

Other 2.8 3.0

$ 60.2 $ 56.3

Total other noncurrent liabilities $ 59.3 $ 56.3

Goodwill is tested for impairment at the reporting unit level (operating segment or one level below an operating segment) on an annual basis each September 1 st and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value.

The following table summarizes information concerning our goodwill balance for the three months ended December 31, 2020, in millions.

The following table summarizes information concerning our goodwill balance for the six months ended March 31, 2021, in millions.

Balance at September 30, 2020 $ 99.8

Effects of changes in foreign currency exchange rates 0.9

Balance at December 31, 2020 $ 101.1

Balance at March 31, 2021 $ 100.7

Segment Information

Summarized financial information for our segments is presented below.

Net sales and operating income associated with certain products have been reclassified as Technologies segment items to confirm to the current period presentation.

Three months ended

Net sales and operating income associated with certain products have been reclassified as Technologies segment items to conform to the current period presentation.

Three months ended Six months ended

March 31, March 31,

2021 2020 2021 2020

(in millions)

13 unchanged sentences

$ 14.7 $ 14.3 $ 29.4 $ 28.3

Strategic reorganization and other charges:

Strategic reorganization and other (credits) charges:

Infrastructure $ ( 0.7 ) $ 0.4 $ ( 0.6 ) $ 0.4

1 unchanged sentence

Corporate 1.5 0.5 2.8 2.9

$ 0.8 $ 0.9 $ 2.2 $ 3.3

Capital expenditures:

16 unchanged sentences

Southeast 6.5 5.4 13.9 11.4

West 3.0 3.1 8.0 5.1

United States 19.5 16.7 40.3 35.8

8 unchanged sentences

Current period other comprehensive income 1.0 4.0 5.0

Balance at December 31, 2020 $ ( 32.2 ) $ 12.5 $ ( 19.7 )

Balance at March 31, 2021 $ ( 31.7 ) $ 12.0 $ ( 19.7 )

Commitments and Contingencies

2 unchanged sentences

Administrative costs related to these matters are expensed as incurred.

The effect of the outcome of these matters on our financial statements cannot be predicted with certainty as any such effect depends on the amount and timing of the resolution of such matters.

The effect of the outcome of these matters on our financial statements cannot be predicted with certainty as any such effect depends on the amount and timing of the resolution of such matters, unless otherwise indicated below.

Other than the litigation described below, we do not believe that any of our outstanding litigation would have a material adverse effect on our business or prospects.

2 unchanged sentences

We accrue for environmental expenses resulting from existing conditions that relate to past operations when the costs are probable and reasonably estimable.

In the acquisition agreement pursuant to which a predecessor to Tyco International plc, now Johnson Controls International plc (“Tyco”), sold our businesses to a previous owner in August 1999, Tyco agreed to indemnify us and our affiliates, among other things, for all “Excluded Liabilities.” Excluded Liabilities include, among other things, substantially all liabilities relating to the time prior to August 1999, including environmental liabilities.

In the acquisition agreement pursuant to which a predecessor to Tyco International plc, now Johnson Controls International plc (“JCI”), sold our businesses to a previous owner in August 1999, JCI agreed to indemnify us and our affiliates, among other things, for all “Excluded Liabilities.” Excluded Liabilities include, among other things, substantially all liabilities relating to the time prior to August 1999, including environmental liabilities.

The indemnity survives indefinitely.

Tyco’s indemnity does not cover liabilities to the extent caused by us or the operation of our businesses after August 1999, nor does it cover liabilities arising with respect to businesses or sites acquired after August 1999.

Since 2007, Tyco has engaged in multiple corporate restructurings, split-offs and divestitures.

While none of these transactions directly affects the indemnification obligations of the Tyco indemnitors under the 1999 acquisition agreement, the result of such transactions is that the assets of, and control over, such Tyco indemnitors has changed.

Should any of these Tyco indemnitors become financially unable or fail to comply with the terms of the indemnity, we may be responsible for such obligations or liabilities.

On July 13, 2010, Rohcan Investments Limited, the former owner of property leased by Mueller Canada Ltd.

JCI’s indemnity does not cover liabilities to the extent caused by us or the operation of our businesses after August 1999, nor does it cover liabilities arising with respect to businesses or sites acquired after August 1999.

Since 2007, JCI has engaged in multiple corporate restructurings, split-offs and divestitures.

While none of these transactions directly affects the indemnification obligations of the JCI indemnitors under the 1999 acquisition agreement, the result of such transactions is that the assets of, and control over, such JCI indemnitors has changed.

Should any of these JCI indemnitors become financially unable or fail to comply with the terms of the indemnity, we may be responsible for such obligations or liabilities.

On July 13, 2010, Rohcan Investments Limited, the former owner of a property leased by Mueller Canada Ltd.

and located in Milton, Ontario, filed suit against Mueller Canada Ltd.

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On December 7, 2011, the Court denied the plaintiff’s motion for summary judgment.

The purchaser of U.S.

Pipe has been identified as a “potentially responsible party” (“PRP”) under the Comprehensive Environmental Response, Compensation and Liability Act in connection with a former manufacturing facility operated by U.S.

Pipe, which was sold in 2012, has been identified as a “potentially responsible party” (“PRP”) under the Comprehensive Environmental Response, Compensation and Liability Act in connection with a former manufacturing facility operated by U.S.

Pipe that was in the vicinity of a proposed Superfund site located in North Birmingham, Alabama.

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Accordingly, the purchaser tendered the matter to us for indemnification, which we accepted.

Ultimate liability for the site will depend on many factors that have not yet been determined, including the determination of EPA’s remediation costs, the number and financial viability of the other PRPs (there are four other PRPs currently) and the determination of the final allocation of the costs among the PRPs.

Since the amounts of such costs cannot be reasonably estimated at this time, no amounts have been accrued for this matter at December 31, 2020.

Ultimate liability for the site will depend on many factors that have not yet been determined, including the determination of the Environmental Protection Agency’s remediation costs, the number and financial viability of the other PRPs (there are four other PRPs currently) and the determination of the final allocation of the costs among the PRPs.

Since the amounts of such costs cannot be reasonably estimated at this time, no amounts have been accrued for this matter at March 31, 2021.

Walter Energy .

On November 18, 2019, we paid approximately $ 22.2 million to the IRS in final settlement of a tax dispute related to our former parent company, Walter Energy, Inc.

On November 18, 2019, we paid approximately $ 22.2 million to the Internal Revenue Service in final settlement of a tax dispute related to our former parent company, Walter Energy, Inc.

The COVID-19 Pandemic.

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and global economies.

We have taken and continue to counter such disruption and work to protect the safety of our production workers as essential workers at our various manufacturing plants, distribution centers and R&D centers.

We are uncertain of the potential full magnitude or duration of the business and economic impacts from the unprecedented public health effort to contain and combat the spread of COVID-19, and while the extent to which the pandemic affects our results will depend on future developments, the outbreak could result in material effects to our future financial position, results of operations, cash flows and liquidity.

Mass Shooting Event at our Henry Pratt Facility in Aurora, Illinois.

On February 15, 2019, we experienced a mass shooting event at our Henry Pratt facility in Aurora, Illinois, in which five employees were killed and one employee and six law enforcement officers were injured.

Various workers’ compensation claims arising from the event have been made to date, and we anticipate that additional claims may be made, and that liability under such claims, if any, is not expected to have a material adverse effect on our results of operations or cash flows.

However, the possibility of other legal proceedings, and any related effects, arising from this event cannot be predicted with certainty.

We have taken action and continue to counter such disruption and work to protect the safety of our production workers as essential workers at our various manufacturing plants, distribution centers and research and development centers.

We are uncertain of the potential magnitude or duration of the business and economic impacts from the unprecedented public health effort to contain and combat the spread of COVID-19, and while the extent to which the pandemic affects our results will depend on future developments, the outbreak could result in material effects to our future financial position, results of operations, cash flows and liquidity.

Indemnifications .

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We cannot estimate the potential amount of future payments under these indemnities until events arise that would trigger a liability under the indemnities.

Additionally, in connection with the sale of assets and the divestiture of businesses, such as the divestitures of U.S.

Additionally, in connection with the divestitures of the subsidiaries, U.S.

Pipe and Anvil, we may agree to indemnify buyers and related parties for certain losses or liabilities incurred by these parties with respect to:

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Other Matters.

We monitor and analyze our warranty experience and costs periodically and may revise our accruals as necessary.

We monitor and analyze our warranty experience and costs periodically and revise our accruals as necessary.

Critical factors in our analyses include warranty terms, specific claim situations, general incurred and projected failure rates, the nature of product failures, product and labor costs, and general business conditions.

We are party to a number of lawsuits arising in the ordinary course of business, including product liability cases for products manufactured by us or third parties.

While the results of litigation cannot be predicted with certainty, we believe that the final outcome of such other litigation is not likely to have a materially adverse effect on our business or prospects.

Subsequent Events

On January 27, 2021 , our Board of Directors declared a dividend of $ 0.0550 per share on our common stock, payable on February 22, 2021 to stockholders of record at the close of business on February 10, 2021 .

On April 23, 2021 , our Board of Directors declared a dividend of $ 0.0550 per share on our common stock, payable on or about May 20, 2021 to stockholders of record at the close of business on May 10, 2021 .

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements