What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2022-11-18 compared with 2021-11-19 · 312 added, 327 removed, 1489 unchanged (30% of the section changed)

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Changes in Internal Control over Financial Reporting

During the quarter ended September 30, 2021, we continued our multi-year implementation of upgrades to our enterprise resource planning (“ERP”) system.

Aside from the above, there were no changes in internal control over financial reporting during the quarter ended September 30, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

There have been no changes in internal control over financial reporting during the quarter ended September 30, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Management’s Report on Internal Control over Financial Reporting

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DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The name, age at November 18, 2021 and position of each of our executive officers and directors at September 30, 2021 are presented below.

The name and position at November 18, 2022 and age of each of our executive officers and directors at September 30, 2022 are presented below.

Name Age Position

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Cofield 63 Senior Vice President, Operations & Supply Chain

Floyd 52 Senior Vice President, Infrastructure

Helms 54 Senior Vice President, Chief Human Resource Officer

Floyd 53 Senior Vice President, Water Flow Solutions

Helms 55 Senior Vice President and Chief Human Resources Officer

Mize 46 Senior Vice President, Sales and Marketing

Kenji Takeuchi 49 Senior Vice President, Technology Solutions

Kenji Takeuchi 50 Senior Vice President, Water Management Solutions

Feyerherm 51 Vice President, Operations Controller

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Hansen 73 Director

Kolb 85 Director

Christine Ortiz 52 Director

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Sharritts 54 Director

Slobodow 54 Director

Thomas 77 Director

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Hall earned his Bachelor of Commerce degree from Memorial University of Newfoundland and a Master of Business Administration from the University of Western Ontario Ivey School of Business.

Hall is a director of Altra Industrial Motion, Inc.

Heinrichs has served as our Executive Vice President, Chief Legal and Compliance Officer and Secretary since August 2018.

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She earned a Bachelor of Arts degree with honors from Randolph-Macon Woman’s College (now known as Randolph College), a Master of Business Administration degree from the University of Virginia Darden School of Business and a Juris Doctor from the University of Virginia School of Law.

Zakas is a director of Atlantic Capital Bank and Atlantic Capital Bancshares.

Zakas is a director of BlueLinx Holdings Inc.

and is a former director of Atlantic Capital Bank and Atlantic Capital Bancshares.

Cofield has served as our Senior Vice President, Operations & Supply Chain since January 2018.

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Previously, Mr.

Mize served as Senior Audit Supervisor of Archer Daniels Midland from May 1998 to September 2004.

Mize earned a Bachelor of Science degree from Illinois State University and a Master of Business Administration from Millikin University.

Mize worked in accounting and finance for Archer Daniels Midland from May 1998 to September 2004.

Mize earned a Bachelor of Science degree in Accounting from Illinois State University and a Master of Business Administration from Millikin University.

Kenji Takeuchi has served as our Senior Vice President, Water Management Solutions since October 2021.

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Previously, Ms.

Smith served as Chief Accounting Officer for ModivCare Inc, from February 2019 through November 2020 and for Cumulus Media from May 2017 through February 2019 and served as Vice President and Corporate Controller for EmployBridge Holdings from 2015 to 2017.

Smith served as Chief Accounting Officer for ModivCare Inc., from February 2019 through November 2020 and for Cumulus Media from May 2017 through February 2019.

Ms Smith is a certified public accountant, and she earned a Bachelor of Science degree from The Ohio State University and a Master of Business Administration from Georgia State University.

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(formerly Walter Industries’ Homes Business), a mortgage portfolio owner and mortgage originator and servicer, from 2009 through December 2015, and he served as its Chief Executive Officer from 2009 to October 2015.

O’Brien has been President and Chief Executive Officer of Brier Patch Capital and Management, Inc., a real estate management and investment firm, since 2004.

O’Brien served as President and Chief Executive Officer of Brier Patch Capital and Management, Inc., a real estate management and investment firm, from 2004 to 2009.

He served in various executive capacities at Pulte Homes, Inc., a home building company, for 21 years, retiring as President and Chief Executive Officer in 2003.

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Franklin has been a member of our Board of Directors since November 2010.

Franklin serves as the President of Clarke Franklin Associates, a management consulting firm.

Franklin serves as the President of Clarke-Franklin & Associates, Inc., a management consulting firm, and is a co-founder of Authenticity Partners.

In addition, Ms.

Franklin serves as Chair of the board of directors of the National Center for Civil and Human Rights and is a board member of the Paul Volcker Alliance, both non-profit organizations dedicated to public service missions.

Franklin also serves as a board member on CDC Foundation and several other non-profit organizations including CF Foundation, Atlanta Regional Commission on Homelessness, National Alliance for Public Charter Schools, and Purpose Built Schools Atlanta.

From 2002 to 2010, Ms.

Franklin was mayor of Atlanta, Georgia.

Franklin earned a Bachelor of Arts degree in sociology from Howard University and a Master’s degree in sociology from the University of Pennsylvania.

Franklin earned a Bachelor of Arts degree in sociology from Howard University and a Master of Arts degree in sociology from the University of Pennsylvania.

Hansen has been a member of our Board of Directors since October 2011.

Until 2012, Mr.

Hansen served as Vice Chairman of Illinois Tool Works Inc.

Hansen served as the Executive Vice President and Vice Chairman of Illinois Tool Works Inc.

(“ITW”), a manufacturer of fasteners and components, consumable systems and a variety of specialty products and equipment.

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Hansen earned a Bachelor of Science degree in marketing from Northern Illinois University and a Master of Business Administration degree from Governors State University.

Kolb has been a member of our Board of Directors since April 2006.

From 1986 to 1998, Mr.

Kolb served as a Vice Chairman of Deloitte LLP, a registered public accounting firm.

Kolb earned a Bachelor of Science degree in accountancy with highest honors from the University of Illinois and Master of Business Administration degree in finance from DePaul University.

Kolb is a certified public accountant.

Christine Ortiz has been a member of our Board of Directors since November 2018.

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The author of more than 200 scholarly publications, she has supervised research projects across multiple academic disciplines, received 30 national and international honors, including the Presidential Early Career Award in Science and Engineering awarded to her by President George W.

Bush, and served as the Dean for Graduate Education at MIT from 2010 to 2016.

She is also the founder of an innovative, nonprofit, post-secondary educational institution, Station1.

Ortiz earned a Bachelor of Science degree from Rensselaer Polytechnic Institute and a Master of Science degree and a Doctor of Philosophy degree from Cornell University, each in the field of materials science and engineering.

Bush, and served as the Dean for Graduate Education at Massachusetts Institute of Technology from 2010 to 2016.

She is also the founder of an innovative, nonprofit, higher education educational institution, Station1.

Ortiz has served as a director of Enovis Corporation since 2022.

She earned a Bachelor of Science degree from Rensselaer Polytechnic Institute and a Master of Science degree and a Doctor of Philosophy degree from Cornell University, each in the field of materials science and engineering.

Rethore has been a member of our Board of Directors since April 2006.

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Sharritts has been a member of our Board of Directors since March 2021.

Sharritts is the Senior Vice President of the Americas at Cisco.

Sharritts has previously served as its Senior Vice President, U.S.

Sharritts is the Executive Vice President and Chief Customer and Partner Officer at Cisco.

During his 22-year tenure at Cisco, Mr.

Sharritts has held several executive sales roles, most recently Senior Vice President of the Americas from 2018 to 2022 and Senior Vice President, U.S.

Commercial Sales from 2014 to 2018.

Mr Sharritts holds Advisory Board Member positions with the Georgia Chamber of Commerce and Metro Atlanta Chamber of Commerce.

Sharritts holds Advisory Board Member positions with the Georgia Chamber of Commerce and Metro Atlanta Chamber of Commerce.

Sharritts earned a Bachelor of Science degree in Business Administration from The Ohio State University.

Slobodow has been a member of our Board of Directors since October 2022.

Slobodow is an Operating Partner of Operational Resource Group, LLC (“ORG”), whose clients include a leading middle-market private equity firm.

From 2015 to 2020, he served as an Operating Executive at Golden Gate Capital, where, between 2007 and 2015, he also held senior leadership positions in multiple former portfolio companies.

Prior to joining Golden Gate Capital, Mr.

Slobodow held multiple leadership positions within Johnson & Johnson Consumer Products from 2003 to 2007 and was a Principal at A.T.

Kearney from 2000 to 2003.

Slobodow holds a Bachelor of Science degree in Industrial and Manufacturing Engineering and a Master of Business Administration degree from the Massachusetts Institute of Technology Sloan School of Management.

Thomas has been a member of our Board of Directors since January 2008.

Thomas served as President and Chief Executive Officer of Noblis, Inc., a public interest scientific research, technology and strategy company, from 1996 to 2007.

She was previously with The MITRE Corporation, Center for Environment, Resources and Space, serving as Senior Vice President and General Manager from 1992 to 1996, Vice President from 1989 to 1992 and Technical Director from 1982 to 1989.

She was previously with The MITRE Corporation, Center for Environment, Resources and Space, serving as Senior Vice

Index to Financial Statements

President and General Manager from 1992 to 1996, Vice President from 1989 to 1992 and Technical Director from 1982 to 1989.

In 2013, she was honored by the Outstanding Directors Exchange as an Outstanding Director of the Year.

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She earned a Bachelor of Science degree in zoology from Howard University, a Master of Science degree in microbiology from American University and a Doctor of Philosophy degree in cytology from Howard University.

Index to Financial Statements

Tokarz has been a member of our Board of Directors since April 2006.

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(formerly Conseco, Inc.), an insurance provider, and as a director of Walter Investment Management Corp.

Tokarz has served as a director of the Tokarz Group, LLC, an investment company, since 2002 and of MVC Capital, Inc., a registered investment company, since 2003.

Tokarz has served as the Chairman of the Board of the Tokarz Group, LLC, an investment company, since 2002 and the Chairman of MVC Capital, Inc., a registered investment company, since 2003.

He assumed the role of vice chair of Shield T3, LLC in 2020.

In 2007, he was honored by the Outstanding Directors Exchange as an Outstanding Director of the Year.

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He also served as a member of Deloitte’s board of directors from 2003-2009, during which time he held the position of Vice Chairman.

Van Arsdell has served as a member of the board of directors of First Midwest Bancorp, Inc.

since 2017 and has been a member of the audit committee of Brown Brothers Harriman since 2015.

Van Arsdell earned both a Bachelor of Science degree in Accounting and a Masters of Accounting Science degree from the University of Illinois.

Van Arsdell has served as a member of the board of directors of Old National Bancorp since February 2022 and has been a member of the audit committee of Brown Brothers Harriman since 2015.

Van Arsdell previously served as a director of First Midwest Bancorp, Inc.

from 2017 to February 2022.

Van Arsdell earned both a Bachelor of Science degree in Accounting and a Master of Accounting Science degree from the University of Illinois.

He is a certified public accountant.

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The information required by this item will be contained in our definitive proxy statement issued in connection with the 2023 Annual Meeting of Stockholders and is incorporated herein by reference.

Index to Financial Statements

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

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MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES,” the information required by this item will be contained in our definitive proxy statement issued in connection with the 2023 Annual Meeting of Stockholders and is incorporated herein by reference.

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Securities Authorized for Issuance under Equity Compensation Plans

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(1) The Mueller Water Products, Inc.

2006 Employee Stock Purchase Plan (“ESPP”) was approved by our sole stockholder in May 2006 and amended by our stockholders in February 2016.

The Mueller Water Products, Inc.

2006 Stock Incentive Plan (“2006 Plan”) was approved by our sole stockholder in May 2006 and amended by our stockholders in January 2008, January 2009 and January 2012.

2006 Employee Stock Purchase Plan (“ESPP”), as amended;

and (2) The Mueller Water Products, Inc.

2006 Stock Incentive Plan (“2006 Plan”), as amended.

The following table sets forth certain information relating to these equity compensation plans at September 30, 2022.

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Reports of Independent Registered Public Accounting Firm F-1

Reports of Independent Registered Public Accounting Firm (PCAOB ID:

Consolidated Balance Sheets at September 30, 2022 and 2021 F-4

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001-32892) filed on May 30, 2006.

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10.8* Form of Mueller Water Products, Inc.

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001-32892) filed on October 31, 2008.

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10.9* Executive Incentive Plan of Mueller Water Products, Inc.

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Form of Performance Restricted Stock Unit Award Agreement .

Incorporated by reference to Exhibit 10.32 to Mueller Water Products, Inc.

Form 10-K (File No.

001-32892) filed November 19, 2021.

10.33 * Mueller Water Products, Inc.

Form of Restricted Stock Unit Award Agreement .

Incorporated by reference to Exhibit 10.3 3 to Mueller Water Products, Inc.

Form 10-K (File No.

001-32892) filed November 19, 2021.

10.34 * Mueller Water Products, Inc.

Form of Stock Option Grant Award Agreement .

Incorporated by reference to Exhibit 10.3 4 to Mueller Water Products, Inc.

Form 10-K (File No.

001-32892) filed November 19, 2021.

Index to Financial Statements

10.35 Cooperation Agreement dated October 11, 2022, among Mueller Water Products, Inc.

and Ancora Catalyst Institutional, LP;

Ancora Merlin Institutional, LP;

Ancora Catalyst, LP;

Ancora Merlin, LP;

Ancora Alternatives LLC;

Ancora Advisors, LLC;

Ancora Family Wealth Advisors, LLC;

The Ancora Group LLC;

Inverness Holdings LL;

Ancora Holdings Group, LLC and Frederick D.

Incorporated by reference to Exhibit 10.1 to Mueller Water Products, Inc.

Form 8-K (File no 001-32892) filed October 13, 2022.

14.1* Code of Business Conduct and Ethics for Mueller Water Products, Inc.

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00132892) filed on February 7, 2014.

Index to Financial Statements

21.1** Subsidiaries of Mueller Water Products, Inc.

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Hansen Director November 18, 2022

Kolb Director November 18, 2021

/s/ Christine Ortiz Director November 18, 2022

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Sharritts Director November 18, 2022

Slobodow Director November 18, 2022

Director November 18, 2022

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We believe that our audits provide a reasonable basis for our opinion.

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Critical Audit Matter

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The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosure to which it relates.

Valuation of Goodwill - Krausz Industries Reporting Unit

Description of the Matter As described in Note 6 to the consolidated financial statements, goodwill is tested at the reporting unit level on an annual basis 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.

As of September 1, 2021, the Company performed a quantitative assessment of the $91.2 million in goodwill of the Krausz Industries (“Krausz”) reporting unit.

The Company determined the fair value of the Krausz reporting unit using valuation techniques including the discounted cash flow method, a form of the income approach, and the guideline public company method, a form of the market approach.

Auditing management’s impairment test over the Krausz reporting unit goodwill using the discounted cash flow method involved especially subjective judgments due to the significant estimation uncertainty in determining the fair value of the reporting unit.

In particular, the fair value estimate was sensitive to significant assumptions such as forecasted revenues, EBITDA margins and the discount rate.

Index to Financial Statements

Valuation of Goodwill

Description of the Matter At September 30, 2022, the Company’s goodwill was $ 98.6 million.

As described in Note 6 to the consolidated financial statements, goodwill is tested at the reporting unit level on an annual basis 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 Company performed its annual impairment tests of goodwill and determined the fair values of its reporting units using the discounted cash flow method, a form of the income approach, and the guideline public company method, a form of the market approach.

Auditing management’s estimates of reporting unit fair values using the discounted cash flow method involved especially subjective judgments due to the significant estimation uncertainty in determining the fair values of the reporting units.

In particular, the fair value estimates were sensitive to significant assumptions such as forecasted revenues, EBITDA margins and discount rates.

These significant assumptions are forward-looking and could be affected by future industry, market and economic conditions.

How We Addressed the Matter in Our Audit We tested the Company’s controls over review of the fair value of the Krausz reporting unit.

This included testing controls over management’s review of the valuation model and the significant assumptions described above.

To test the estimated fair value of the Krausz reporting unit, we performed audit procedures that included, among others, assessing the methodologies used to estimate fair value, testing the significant assumptions used to develop the fair value estimate, and testing the underlying data used by the Company in its analysis for completeness and accuracy.

For example, we evaluated the reasonableness of management’s forecasted revenues and EBITDA margins used in the fair value estimates by comparing those assumptions to the historical results of Krausz and current industry, market and economic forecasts.

We also involved our valuation specialists to evaluate the valuation methodologies and the reasonableness of the discount rate.

As part of this evaluation, we compared the discount rate to market data.

In addition, we performed a sensitivity analysis on the significant assumptions to evaluate the potential change in the fair value of the reporting unit that would result from the changes in assumptions.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of the Company’s controls over review of the fair values of the reporting units.

This included testing controls over management’s review of the significant assumptions described above.

To test the estimated fair values of the reporting units, we performed audit procedures that included, among others, assessing the methodologies used to estimate fair values, testing the significant assumptions used to develop the fair value estimates, and testing the underlying data used by the Company in its analysis for completeness and accuracy.

For example, we evaluated management’s forecasted revenues and EBITDA margins used in the fair value estimates by comparing those assumptions to historical results and current industry, market and economic forecasts.

We also involved our valuation specialists to evaluate the valuation methodologies and the discount rates.

As part of this evaluation, we compared the discount rates to market data.

In addition, we performed a sensitivity analysis on the significant assumptions to evaluate the potential change in the fair values of the reporting units that would result from changes in the assumptions.

/s/ Ernst & Young LLP

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Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors of Mueller Water Products, Inc.

To the Stockholders and the Board of Directors of Mueller Water Products, Inc.

Opinion on Internal Control over Financial Reporting

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Selling, general and administrative 238.7 218.8 198.4

Gain on sale of idle property — — ( 2.4 )

Strategic reorganization and other charges 7.2 8.0 13.0

Goodwill impairment 6.8 — —

Total operating expenses 252.7 226.8 211.4

Operating income 111.6 131.7 116.8

Pension (benefit) cost other than service ( 3.3 ) ( 3.0 ) 0.4

Pension benefit other than service ( 3.9 ) ( 3.3 ) ( 3.0 )

Interest expense, net 16.9 23.4 25.5

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Net income $ 76.6 $ 70.4 $ 72.0

Other comprehensive income (loss):

Other comprehensive (loss) income:

Pension ( 18.8 ) 14.1 4.4

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Foreign currency translation ( 25.5 ) 9.2 8.0

Total other comprehensive income (loss) 19.7 11.3 ( 3.2 )

Total other comprehensive (loss) income ( 39.6 ) 19.7 11.3

Total comprehensive income $ 37.0 $ 90.1 $ 83.3

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

Acquisition of joint venture partner’s interest — ( 2.5 ) — — ( 2.2 ) ( 4.7 )

Other comprehensive loss, net of tax — — — 11.3 — 11.3

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Dividends declared — ( 34.8 ) — — — ( 34.8 )

Cumulative effect of accounting change (Note 2.) — — ( 0.1 ) — — ( 0.1 )

Stock-based compensation — 8.1 — — — 8.1

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Stock repurchased under buyback program — ( 10.0 ) — — — ( 10.0 )

Acquisition of joint venture partner’s interest — ( 2.5 ) — — ( 2.2 ) ( 4.7 )

Other comprehensive income, net of tax — — — 19.7 — 19.7

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Dividends declared — ( 36.5 ) — — — ( 36.5 )

Cumulative effect of accounting change (Note 2.) — — ( 0.1 ) — — ( 0.1 )

Stock-based compensation — 8.7 — — — 8.7

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Amortization 28.5 28.2 28.2

Goodwill impairment 6.8 — —

Loss on early extinguishment of debt — 16.7 —

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Inventory reserves provision 1.6 3.1 4.3

Gain on disposal of assets — — ( 2.5 )

Other, net 1.3 1.3 3.7

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Other current liabilities ( 8.5 ) 37.5 6.6

Pension obligations, related to contributions — — ( 0.7 )

Other noncurrent liabilities ( 6.0 ) 2.5 1.9

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Stock repurchased under buyback program ( 35.0 ) ( 10.0 ) ( 5.0 )

Repayment of Krausz debt — — ( 13.2 )

Other ( 0.4 ) 0.4 0.4

Financing leases ( 0.7 ) ( 0.4 ) 0.4

Net cash used in financing activities ( 72.0 ) ( 58.8 ) ( 41.4 )

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Cash and cash equivalents at beginning of year 227.5 208.9 176.7

Cash and cash equivalents at end of year $ 146.5 $ 227.5 $ 208.9

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

Index to Financial Statements

Cash and cash equivalents at end of year $ 227.5 $ 208.9 $ 176.7

Supplemental cash flow information:

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Mueller Water Products, Inc., a Delaware corporation, together with its consolidated subsidiaries, operates in two business segments:

Infrastructure and Technologies.

Infrastructure manufactures valves for water and gas systems, including butterfly, iron gate, tapping, check, knife, plug, automatic control and ball valves, as well as dry-barrel and wet-barrel fire hydrants and pipe repair products.

Technologies offers metering systems, leak detection, pipe condition assessment and other products and services for the water infrastructure industry.

Water Flow Solutions and Water Management Solutions.

These segments are based on a management reorganization that became effective October 1, 2021;

prior period information has been recast to conform to the current presentation.

Water Flow Solutions’ product portfolio includes iron gate valves, specialty valves and service brass products.

Water Management Solutions’ product and service portfolio includes fire hydrants, repair and installation, natural gas, metering, leak detection, pressure control and monitoring services.

The “Company,” “we,” “us” or “our” refer to Mueller Water Products, Inc.

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With regard to the Company’s segments, “we,” “us” or “our” may also refer to the segment being discussed.

We sold our Anvil segment on January 6, 2017 and our U.S.

Pipe segment on April 1, 2012.

We have approximately 3,600 employees globally, of which 64% of our hourly workers are covered by collective bargaining agreements.

In July 2014, Infrastructure acquired a 49 % ownership in an industrial valve joint-venture for $ 1.7 million.

In July 2014, we acquired a 49 % ownership in an industrial valve joint-venture for $ 1.7 million.

As a result of substantive control features in the joint-venture agreement, all of the joint venture’s assets, liabilities and results of operations were included in our consolidated financial statements.

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Noncontrolling interest was recorded at its carrying value, which approximated fair value.

Infrastructure acquired the remaining 51% noncontrolling interest on October 3, 2019.

We acquired the remaining 51 % noncontrolling interest on October 3, 2019.

On December 3, 2018, we completed our acquisition of Krausz Industries Development Ltd.

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During our 2020 and 2019 fiscal years, we included the financial statements of Krausz on a one-month lag.

Refer to Note 5.

for additional disclosures.

During the three months ended March 31, 2021, we aligned the consolidation of the financial statements of Krausz in the Company’s consolidated financial statements, eliminating the previous inclusion of Krausz financial statements with a one-month reporting lag.

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The consolidated balance sheet at September 30, 2021 includes the preliminary estimated fair values of the net assets of i2O.

The Company is still reviewing the impact of taxes and certain other items.

The accounting for this business combination became final during the three months ended March 31, 2022.

The results of i2O’s operations and cash flows for the period subsequent to the acquisition are included in the consolidated statement of operations and consolidated statement of cash flows, respectively.

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Over time, the liabilities are accreted to their estimated future values.

At September 30, 2021 and 2020, asset retirement obligations were $ 3.8 million.

At September 30, 2022 and 2021, asset retirement obligations were $ 3.6 million and $ 3.8 million, respectively.

Refer to Note 4.

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Refer to Note 6.

for information regarding our impairment testing.

for information regarding our goodwill impairment testing.

Workers’ Compensation.

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Our gross workers’ compensation liabilities were $ 11.1 million as of September 30, 2022, and we expect to recover $ 5.9 million in insurance which is included as a receivable in Other current assets and Other noncurrent assets as of September 30, 2022.

As of September 30, 2020, our net worker’s compensation liability was $ 6.2 million.

As of September 30, 2021, our gross worker’s compensation liability was $ 10.5 million and our insurance receivable was 3.5 million.

Warranty Costs.

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We accrue for the estimated cost of product warranties at the time of sale if such costs are determined to be probable and reasonably estimable at that time.

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

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

Critical factors in our accrual 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.

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Deferred Financing Costs.

Costs to finance debt are charged to expense over the lives of the debt agreements.

Debt issuance costs to obtain debt are deferred and charged to expense over the life of the underlying debt agreement.

Remaining costs and the future period over which financing costs would be charged to expense are reassessed when amendments to the related financing agreements or prepayments occur.

Deferred financing costs are offset against the underlying long-term debt in the accompanying consolidated balance sheets.

Deferred financing costs under agreements that do not have outstanding debt and in other instances, such as our ABL Agreement and with regard to our NMTC transaction, are included in Other noncurrent assets consistent with the life of the instrument.

Deferred financing costs under agreements that do not have outstanding debt and in other instances, such as our ABL and with regard to our N MTC transaction, are included in Other noncurrent assets consistent with the life of the instrument.

Deferred financing costs of $ 5.6 million at September 30, 2022 are scheduled to amortize as follows:

$ 1.0 million related to the ABL Agreement and $0.3 million related to the NMTC transaction which are amortized on a straight-line basis and;

$ 0.7 million related to the ABL, $ 0.3 million related to the NMTC transaction which are amortized on a straight-line basis and;

$ 4.6 million related to the 4.0% Senior Unsecured Notes (“4.0% Senior Notes”) which is amortized using the effective interest rate method.

All such amortization will be over the remaining term of the respective debt.

These amounts are amortized over the remaining term of the respective debt.

Refer to Note 8.

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We manage U.S.

dollar - Canadian dollar exchange rate risk related to an intercompany loan with swap contracts, which we have not designated as hedges.

As a result, the changes in the fair value of these contracts are reported currently in earnings.

The values of our currency swap contracts were liabilities of $ 1.1 million and $ 0.2 million as of September 30, 2021 and 2020, respectively, and are included in Other current liabilities and Other noncurrent liabilities, respectively, in our consolidated balance sheets.

The currency swap contracts expire in February 2022.

dollar - Canadian dollar exchange rate risk related to intercompany loans with swap contracts from time to time without designating these swap contracts as a hedge.

As a result, the changes in the fair value of these contracts have been reported in earnings.

As of September 30, 2021, we had a $ 1.1 million liability in Other current liabilities in our consolidated balance sheets related to such a hedge.

These currency swap contracts expired in February 2022, and we did not have any liabilities related to currency swap contracts as of September 30, 2022.

Income Taxes.

Deferred tax liabilities and deferred tax assets are recognized for the expected future tax consequences of events that have been included in the financial statements or tax returns.

Such liabilities and assets are determined based on the differences between the financial statement basis and the tax basis of assets and liabilities, using tax rates in effect for the years in which the differences are expected to reverse.

Such assets and liabilities are determined based on the differences between the financial statement basis and the tax basis of assets and liabilities, using tax rates in effect for the years in which the differences are expected to reverse.

A valuation allowance is provided when, based upon the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

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

We are indemnified under an agreement with a predecessor to Tyco for certain environmental liabilities that existed at August 16, 1999.

We are indemnified for certain environmental liabilities under an agreement with a predecessor to Tyco that existed at August 16, 1999.

Refer to Note 17.

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Compensation expense for stock-based awards granted to employees and directors is based on the fair value at the grant dates for our stock-settled share awards and is based on the fair value at each reporting date for our cash-settled share awards.

Stock-based compensation expense is included within Selling, general and administrative expense within our consolidated statements of operations.

Refer to Note 12.

for more information regarding our stock-based compensation.

Stock-based compensation expense is included within Selling, general and administrative expenses.

Research and Development.

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Translation of Foreign Currency.

Assets and liabilities of our businesses whose functional currencies are not denominated in the United States dollar are translated into United States dollars using currency exchange rates at the balance sheet date.

Revenues and expenses are translated at average currency exchange rates during the period.

Foreign currency translation gains

Foreign reporting entities are remeasured into local currencies with the effect reflected in the consolidated statements of operations.

Index to Financial Statements

and losses are reported as a component of accumulated other comprehensive income (loss).

Revenues and expenses are translated at average currency exchange rates during the period.

Foreign currency translation gains and losses are reported as a component of accumulated other comprehensive income (loss).

Gains and losses resulting from foreign currency transactions are included in earnings as incurred.

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We have completed historical and forward-looking analyses for receivables and adopted this guidance effective October 1, 2020.

Upon adoption, there was an immaterial impact of $0.1 million to our retained earnings.

Accounting Pronouncements Not Yet Adopted

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

In December 2019, the FASB issued Accounting Standards Update (“ASU”) No.

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ASU 2019-12 is effective for public business entities for fiscal years beginning after December 15, 2020, including interim periods within that fiscal year, with early adoption permitted.

We will adopt this standard on October 1, 2021 and it is not expected to have a material impact on our financial statements.

We adopted this standard on October 1, 2021 and there was no material impact to our financial statements.

In March 2020, the FASB issued ASU No.

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The amendments apply only to contracts and hedging relationships that reference the London Inter Bank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued due to reference rate reform.

ASU 2020-04 is effective from March 12, 2020, but can be adopted prospectively from a date within an interim period subsequent to March 12, 2020.

We are currently evaluating our contracts and the optional expedients provided by ASU 2020-04.

We will adopt this standard on October 1, 2021 and it is not expected to have a material impact on our financial statements.

ASU 2020-04 is effective from March 12, 2020;

however, can be adopted prospectively from a date within an interim period subsequent to March 12, 2020.

We adopted this standard on October 1, 2021, and there was no material impact to our financial statements.

Accounting Pronouncements Not Yet Adopted

ASU 2022-03 Fair Value Measurement (Topic 820):

Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions:

The FASB issued this update in June 2022, to (1) clarify the guidance in Topic 820 on the fair value measurement of an equity security that is subject to a contractual sale restriction;

and (2) to require specific disclosures related to such an equity security.

This guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years, with early adoption permitted.

Management does not expect that changes required by the new standard will have a material impact on our financial statements and related disclosures.

Revenue from Contracts with Customers

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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.

We include current deferred revenue within Other current liabilities in the accompanying consolidated balance sheets.

We include current deferred revenue

Index to Financial Statements

within Other current liabilities in the accompanying consolidated balance sheets.

Deferred revenues represent contract liabilities and are recorded when customers remit cash payments in advance of our satisfaction of performance obligations under contractual arrangements.

Contract liabilities are reversed when the performance obligation is satisfied and revenue is recognized.

Index to Financial Statements

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

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Unbilled receivables 3.1 2.3

Total customer receivables, gross $ 219.3 $ 185.6

Gross customer receivables $ 233.6 $ 215.7

Allowance for credit losses ( 5.6 ) ( 3.5 )

Receivables, net $ 228.0 $ 212.2

Deferred revenues $ 8.1 $ 5.4

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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 control of the performance obligation transfers to the customer.

The transaction price is adjusted for our estimate of variable consideration which may include discounts, and rebates.

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We exclude from the measurement of the transaction price all taxes assessed by a governmental authority.

We classify shipping and handling costs, such as freight to our customers’ destinations, as a component of cost of goods sold.

We have elected to use the practical expedient to not adjust the transaction price of a contract for the effects of a significant financing component if, at the inception of the contract, we expect that the period between when we transfer a product or service to a customer and when a customer remits payment will be one year or less.

Revenues from products and services transferred to customers at a point in time represented 98 % , 99 % and 98 % of our revenues in the years ended September 30, 2021, 2020 and 2019, respectively.

The revenues recognized at a point in time related to the sale of our products are recognized when the obligations of the terms of our contract are satisfied, which generally occurs upon shipment when control of the product transfers to the customer.

Revenues from products and services transferred to customers over time represented 2 %, 1 % and 2 % of our revenues in the years ended September 30, 2021, 2020 and 2019, respectively.

Revenues from products and services transferred to customers at a point in time represente d 98 % in the fiscal years 2022 and 2021, and 99 % of our revenues in the fiscal year 2020.

The revenues recognized at a point in time related to the sale of our products are recognized when the obligations of the terms of our contract are satisfied, which is when the customer is able to direct the use of and obtain substantially all of the benefits from the product, which generally occurs upon shipment when control of the product transfers to the customer.

Revenues from products and services transferred to customers over time represented 2 % of our revenues in the fiscal years 2022, and 2021, and 1 % of our revenues in the fiscal year 2020.

We offer warranties to our customers in the form of assurance-type warranties, which provide assurance that the products provided will function as intended and comply with any agreed-upon specifications.

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Costs to Obtain or Fulfill a Contract

Shipping and handling costs associated with freight activities after the customer has obtained control are accounted for as fulfillment costs and are expensed and accrued at the time revenue is recognized, as a component of cost of sales.

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

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Present value of lease liabilities $ 26.8 $ 1.6

Acquisition of Krausz

On December 3, 2018, we completed our acquisition of the outstanding equity of Krausz, a manufacturer of pipe couplings, grips and clamps with operations in the United States and Israel, for $ 140.7 million, net of cash acquired, including the assumption and simultaneous repayment of certain debt of $ 13.2 million.

The acquisition of Krausz was financed with cash on hand.

We believe that the Krausz product line is complementary to our existing Infrastructure products and will improve our positioning in the pipe repair market.

We have recognized the assets acquired and liabilities assumed at their estimated acquisition date fair values, with the excess of the purchase price over the estimated fair values of the identifiable net assets acquired recorded as goodwill.

During 2020, we reduced property, plant and equipment by $ 0.3 million, which resulted in an increase to goodwill of $ 0.3 million.

The accounting for the business combination is considered final.

The results of Krausz, including net sales of $ 37.2 million for 2019, are included within our Infrastructure segment for all periods following the acquisition date.

The goodwill below is attributable to the strategic opportunities and synergies that we expect to arise from the acquisition of Krausz and the value of its workforce and is nondeductible for income tax purposes.

Identified intangible assets consist of patents, customer relationships and favorable leasehold interests with an estimated weighted-average useful life of approximately 12 years and trade names with an indefinite life.

Values of intangible assets were determined using a discounted cash flow method.

Index to Financial Statements

The following is a summary of the estimated fair values of the net assets acquired (in millions):

Assets, net of cash:

Receivables $ 6.9

Inventories 17.0

Other current assets 0.2

Property, plant and equipment 8.1

Other non-current assets 1.7

Identified intangible assets:

Customer relationships 8.7

Trade names 4.6

Favorable leasehold interests 2.3

Goodwill 80.4

Accounts payable ( 5.5 )

Other current liabilities ( 2.9 )

Deferred income taxes ( 11.2 )

Other non-current liabilities ( 1.7 )

Consideration paid 140.7

Repayment of Krausz debt ( 13.2 )

Consideration paid included in net cash used in investing activities $ 127.5

Acquisition of i2O Water Ltd

On June 14, 2021, we acquired all of the outstanding capital stock of i2O Water Ltd for $ 19.7 million, net of cash acquired.

The purchase agreement provides for customary final adjustments, including a net working capital adjustment, which we expect to occur during the calendar year 2021.

The purchase agreement provided for customary final adjustments, including a net working capital adjustment that was completed during the three months ended December 31, 2021, resulting in a purchase price of $ 19.5 million.

The accounting for the business combination is considered to be preliminary.

We are still reviewing the impact of taxes and other certain items.

The results of i2O are included within our Technologies segment.

The accounting for the business combination is considered to be final.

The results of i2O are included in our Water Management Solutions segment.

The goodwill below is attributable to the strategic opportunities and synergies that we expect to arise from the acquisition of i2O and the value of its workforce.

The goodwill is nondeductible for income tax purposes.

Goodwill is nondeductible for income tax purposes.

Identified intangible assets consist of customer relationships, non-compete agreements and developed technology with an estimated weighted-average useful life of approximately 12 years and trade names with an indefinite life.

Values of intangible assets were determined using a discounted cash flow method.

Index to Financial Statements

The following is a summary of the preliminary estimated fair values of the net assets acquired (in millions):

The following is a summary of the fair values of the net assets acquired (in millions):

Assets, net of cash:

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Fair value of net assets acquired, net of cash $ 19.5

Index to Financial Statements

Intangible Assets and Goodwill

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.

We completed our annual impairment tests of intangible assets and goodwill as of September 1, 2021, and determined th ere were no impairments.

Our goodwill primarily relates to the Krausz reporting unit which was $ 91.2 million as of September 1, 2021.

We performed the annual impairment testing at September 1, 2022 and recognized a $ 6.8 million goodwill impairment charge related to a reporting unit within our Water Flow Solutions segment as the carrying value exceeded its fair value primarily due to an increase in the discount rate.

The carrying value of the reporting unit, including goodwill, is compared with the estimated fair value of the reporting unit as determined utilizing a combination of the income and market approaches.

The income approach, which involved significant unobservable inputs (Level 3 inputs), is based on projected debt-free cash flow which is discounted to the present value using discount rates that consider the timing and risk of the cash flows.

The market approach is based on the guideline public company method, which uses market multiples to value our reporting units.

The Company weights the income and market approaches in a manner considering the risks of the underlying cash flows.

The key assumptions used in estimating the fair value of the Company's reporting units utilizing the income approach include management's best estimate of revenue, EBITDA margin, and discount rate, and accordingly, a change in market conditions or other factors could have a material effect on the estimated values.

There are inherent uncertainties related to the assumptions used and to management's application of these assumptions.

Intangible Assets

Direct internal and external costs to develop software licensed by Technologies’ customers are capitalized and amortized over the 6 -year estimated useful life of the software, beginning when the software is ready for its intended use.

Direct internal and external costs to develop software used in the provision of services to customers by Water Management Solutions are capitalized and amortized over the 6 -year estimated useful life of the software, beginning when the software is ready for its intended use.

At September 30, 2022, the remaining weighted-average amortization period for this software was 3.6 years.

Amortization expense related to such software assets was $ 3.3 million in each of our 2021, 2020 and 2019 fiscal years.

Amortization expense for each of the next five years is scheduled to be $ 3.5 million in 2022, $ 2.7 million in 2023, $ 2.1 million in 2024, $ 1.1 million in 2025 and $ 0.5 million in 2026.

At September 30, 2021, the remaining weighted-average amortization period for business combination-related finite-lived customer relationships and technology intangible assets were 4.4 years and 4.5 years, respectively.

Amortization expense related to such software assets was $ 2.9 million in 2022 , and $3.3 million in each of fiscal years 2021 and 2020.

Amortization expense for each of the next five years is expected to be $ 3.1 million in 2023, $ 2.5 million in 2024, $ 1.5 million in 2025, $ 0.9 million in 2026, and $ 0.5 million in 2027.

At September 30, 2022, the remaining weighted-average amortization period for business combination-related finite-lived customer relationships and technology intangible assets wer e 3.3 years and 8.5 years, respectively.

Amortization expense related to these assets was $ 25.5 million , $ 25.2 million and $ 24.9 million for 2022, 2021 and 2020, respectively.

Amortization expense for each of the next five years is scheduled to be $ 25.1 million in 2023, $ 24.6 million in 2024, $ 5.6 million in 2025, $ 4.9 million in 2026 and $ 4.7 million in 2027.

Index to Financial Statements

Intangible assets are presented below.

Index to Financial Statements

September 30,

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Intangible assets, net $ 361.2 $ 392.5

Our goodwill balance by reportable segment is as follows:

(i) Infrastructure balance of $ 103.0 million and (ii) Technologies balance of $ 12.1 million.

Changes in the carrying amount of goodwill were as follows:

September 30,

We recognized a $ 6.8 million goodwill impairment charge related to a reporting unit within our Water Flow Solutions segment in our fiscal year 2022.

As of September 30, 2022, o ur remaining goodwill balance is within our Water Management Solutions segment.

Changes in the carrying amount of goodwill for the years ended September 30, 2022 and 2021 were as follows:

Balance at September 30, 2020:

(in millions)

Balance at beginning of year $ 99.8 $ 95.7

Acquisition of Krausz — 0.3

Goodwill $ 817.1

Accumulated impairment ( 717.3 )

Net goodwill 99.8

2021 Activity:

Acquisition of i2O Water Ltd 12.1

Change in foreign currency exchange rates 3.2

Balance at end of year $ 115.1 $ 99.8

Balance at September 30, 2021:

Goodwill 832.4

Accumulated impairment ( 717.3 )

Net goodwill 115.1

2022 Activity:

Goodwill impairment ( 6.8 )

Change in foreign currency exchange rates ( 9.7 )

Balance at September 30, 2022:

Goodwill 822.7

Accumulated impairment ( 724.1 )

Net goodwill $ 98.6

Index to Financial Statements

The components of income before income taxes are presented below.

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Income before income taxes $ 98.6 $ 94.9 $ 94.1

Index to Financial Statements

The Tax Cuts and Jobs Act (the “Act”) imposed a one-time transition tax on the undistributed, previously untaxed, post-1986 foreign “earnings and profits” (as defined by the IRS) of certain United States-owned corporations.

The Tax Cuts and Jobs Act (the “Act”) imposed a one-time transition tax on the undistributed, previously untaxed, post-1986 foreign “earnings and profits” as defined by the Internal Revenue Services (“IRS”) of certain United States-owned corporations.

At September 30, 2022, the remaining balance of our transition obligation is $ 4.1 million , which will be paid annually through January 2026, as provided in the Act.

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We have a foreign tax credit carryforward of $ 4.5 million , for which we have recorded a valuation allowance as we do not expect to utilize it prior to expiration.

The federal income tax returns for Mueller Co.

are closed for years prior to 2005 and for Mueller Water Products, Inc.

for 2007 and 2008.

Our 2009 through 2016 returns are closed except to the extent net operating losses from those years have been utilized on subsequent years’ returns.

We also remain liable for any taxes related to U.S.

The federal income tax returns for Mueller Water Products, Inc.

are closed for years prior to 2018.

We remain liable for any taxes related to U.S.

Pipe income for periods prior to 2012 pursuant to the terms of the sale agreement with the purchaser of the segment.

Our state income tax returns are generally closed for years prior to 2017, except to the extent of our state net operating loss carryforwards.

Our state income tax returns are generally closed for years prior to 2018, except with regard to our state net operating loss carryforwards.

Our Canadian income tax returns are generally closed for years prior to 2015.

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Expense at U.S.

federal statutory income tax rates of 21%, 21%, and 24.5%, respectively $ 19.9 $ 19.8 $ 17.2

federal statutory income tax rate $ 20.7 $ 19.9 $ 19.8

Adjustments to reconcile to income tax expense:

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Foreign income taxes ( 1.5 ) ( 1.7 ) ( 0.5 )

Federal transition tax — — ( 0.6 )

Excess tax benefits related to stock compensation ( 0.1 ) ( 0.2 ) ( 0.5 )

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Increase related to current year positions 0.7 0.6

Decrease related to current year positions ( 0.4 ) —

Decrease as a result of statute of limitations lapse ( 0.3 ) ( 0.3 )

Foreign currency exchange losses ( 0.1 ) —

Balance at end of year $ 4.7 $ 4.8

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4.0% Senior Notes $ 450.0 $ 450.0

5.5% Senior Notes — 450.0

ABL Agreement — —

Other 2.2 2.5

Finance leases 1.6 2.2

Total debt 451.6 452.2

Less deferred financing costs ( 4.7 ) ( 5.3 )

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Long-term debt $ 446.1 $ 445.9

The scheduled maturities of all borrowings outstanding at September 30, 2021 for each of the following years are $ 1.0 million in 2022, $ 0.7 million in 2023, $ 0.3 million in 2024, $ 0.1 million in 2025 and $ 0.1 million in 2026.

The scheduled maturities of all borrowings outstanding at September 30, 2022 for each of the following years are $ 0.8 million in 2023, $ 0.5 million in 2024, $ 0.3 million in 2025, $ 0 million in 2026 and $ 450.0 million thereafter.

Index to Financial Statements

ABL Agreement .

Our ABL Agreement consists of a revolving credit facility for up to $ 175 million that includes up to $ 25 million through swing line loans and may have up to $ 60 million of letters of credit.

The ABL Agreement permits us to increase the size of the credit facility by an additional $ 150 million in certain circumstances subject to adequate borrowing base availability.

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

At September 30, 2021 the applicable margin 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 inventory or (ii) 85% of the net orderly liquidation value of the value of eligible inventory, less certain reserves.

Our ABL Agreement, as amended, (“ABL”) is provided by a consortium of banking institutions and consists of a revolving credit facility for up to $ 175 million in borrowings that expires on July 29, 2025.

Included in the ABL is the ability to borrow up to $ 25 million of swing line loans and up to $ 60 million of letters of credit.

The ABL permits us to increase the size of the credit facility by an additional $ 150 million in certain circumstances subject to adequate borrowing base availability.

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

At September 30, 2022, the applicable margin was 200 basis points for LIBOR-based loans, and 100 basis points for base rate loans.

The ABL is subject to mandatory prepayments if total outstanding borrowings under the ABL 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 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 inventory or (ii) 85% of the net orderly liquidation value of eligible inventory, less certain reserves.

Prepayments can be made at any time without penalty.

Substantially all of our United States subsidiaries are borrowers under the ABL Agreement and are jointly and severally liable for any outstanding borrowings.

Our obligations under the ABL Agreement are secured by a first-priority perfected lien on all of our United States inventory, accounts receivable, certain cash and other supporting obligations.

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.

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.

Substantially all of our United States subsidiaries are borrowers under the ABL and are jointly and severally liable for outstanding borrowings.

Our obligations under the ABL are secured by a first-priority perfected lien on all of our United States inventory, accounts receivable, certain cash balances and other supporting obligations.

The ABL includes a commitment fee for any unused borrowing capacity of 37.5 basis points per annum.

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.

Excess availability based on September 30, 2022 data was $ 160.7 million, as reduced by $ 14.1 million of outstanding letters of credit and $ 0.2 million of accrued fees and expenses.

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Proceeds from the 4.0% Senior Notes, along with cash on hand were used to redeem our previously existing 5.5% Senior Notes.

Substantially all of our United States subsidiaries guarantee the 4.0% Senior Notes, which are subordinate to borrowings under our ABL Agreement.

Substantially all of our United States subsidiaries guarantee the 4.0% Senior Notes, which are subordinate to borrowings under our ABL.

Based on quoted market prices, which is a Level 1 measurement, the outstanding 4.0% Senior Notes had a fair value of $ 382.1 million as of September 30, 2022.

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We believe we were in compliance with these covenants at September 30, 2022.

As set forth in the Indenture, we may redeem some or all of the 4.0% Senior Notes at any time or from time to time prior to June 15, 2024 at certain “make-whole” redemption prices and on or after June 15, 2024 at specified redemption prices.

Additionally, we may redeem up to 40% of the aggregate principal amount of the 4.0% Senior Notes at any time or from time to time prior to June 15, 2024 with the net proceeds of specified equity offerings at specified redemption prices.

Upon a change of control, we would be required to offer to purchase the 4.0% Senior Notes at a price equal to 101% of the outstanding principal amount of the 4.0% Senior Notes.

As set forth in the Indenture, we may redeem some or all of the 4.0% Senior Notes at any time prior to June 15, 2024 at certain “make-whole” redemption prices and on or after June 15, 2024, at specified redemption prices.

Additionally, we may redeem up to 40% of the aggregate principal amount of the 4.0% Senior Notes at any time prior to June 15, 2024 with the net proceeds of specified equity offerings at specified redemption prices as set forth in the Indenture.

Upon a change of control as defined in the Indenture, we would be required to offer to purchase the 4.0% Senior Notes at a price equal to 101% of the outstanding principal amount.

5.5% Senior Unsecured Notes.

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We called the 5.5% Senior Notes effective June 17, 2021 and redeemed the 5.5% Senior Notes with the proceeds from the 4.0% Senior Notes and cash on hand.

As a result, we incurred $ 16.7 million in loss on extinguishment of debt, comprised of a $ 12.4 million call premium and a $ 4.3 million write-off of the remaining deferred debt issuance costs.

As a result, we incurred $ 16.7 million in loss on early extinguishment of debt, comprised of a $ 12.4 million call premium and a $ 4.3 million write-off of the remaining deferred debt issuance costs.

Index to Financial Statements

Derivative Financial Instruments

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Although this intercompany loan has no direct effect on our consolidated financial statements, it creates exposure to currency risk for the Canadian subsidiary.

To reduce this exposure, we entered into a United States dollar-Canadian dollar swap contract with the Canadian subsidiary and an offsetting Canadian dollar-United States dollar swap with a domestic bank.

We have not designated these swaps as hedges and the changes in their fair value are included in earnings, where they offset the currency gains and losses associated with the intercompany loan.

Index to Financial Statements

The currency swap contracts expire in February 2022.

As a result, the changes in the fair value of these contracts have been reported in earnings.

As of September 30, 2021, we had a $ 1.1 million liability in Other current liabilities in our consolidated balance sheets related to such a hedge.

These currency swap contracts expired in February 2022.

As a result, we did not have any liabilities related to currency swap contracts as of September 30, 2022.

Retirement Plans

Defined Benefit Plans.

We have had various pension plans (“Pension Plans”), which we funded in accordance with their requirements and, where applicable, in amounts sufficient to satisfy the minimum funding requirements of applicable laws.

The Pension Plans provided benefits based on years of service and compensation or at stated amounts for each year of service.

The annual measurement date for all Pension Plans was September 30.

After September 30, 2019, our only remaining defined benefit plan was our United States Pension Plan (“Plan”).

During 2019, we settled our obligations to our Canadian pension plan participants through a combination of lump-sum payments and purchases of annuities.

We made a net contribution to the plans of $ 0.7 million, which was included in pension costs other than service, to fund these settlements.

As a result, we no longer have any plan assets or obligation in connection with any Canadian defined benefit pension plan.

During 2018, under terms of a negotiated labor contract, a group of our collectively bargained employees are no longer accruing benefits under a multi-employer pension plan.

The affected employees are now participants in our defined contribution retirement plan with an employer match and one-time contribution of $ 0.4 million, which vested through 2020.

During 2019, we recorded and paid an estimated settlement liability for exiting this plan, which resulted in an expense of $ 1.1 million, which we included in Strategic reorganization and other charges.

As a result, we no longer have any plan assets or obligation in connection with any multi-employer pension plan.

A summary of key assumptions for the valuations of our Pension Plans is as follows

We have had various pension plans that we funded in accordance with their requirements and, where applicable, in amounts sufficient to satisfy the minimum funding requirements of applicable laws.

Our pension plans provide benefits based on years of service and compensation or at stated amounts for each year of service with an annual measurement date as of September 30.

After September 30, 2019, our only remaining defined benefit plan is our United States Pension Plan (“Pension Plan”).

A summary of key assumptions for the valuations of our Pension Plan is as follows:

September 30,

2022 2021 2020

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Only high quality (AA graded or higher), non-callable corporate bonds are included in this bond portfolio.

We rely on the Pension Plans’ actuaries to assist in the development of the discount rate model.

The expected returns on plan assets were determined with the assistance of the Pension Plans’ actuaries and investment consultants.

We rely on the Pension Plan’s actuaries to assist in the development of the discount rate model.

The expected returns on plan assets are determined with the assistance of the Pension Plan’s actuaries and investment consultants.

Expected returns on plan assets were developed using forward looking returns over a time horizon of 10 to 15 years for major asset classes along with projected risk and historical correlations.

Index to Financial Statements

Amounts recognized for Pension Plans are presented below.

Amounts recognized for the Pension Plan are presented below.

September 30,

(in millions)

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Benefits paid ( 22.7 ) ( 23.3 )

End of year $ 336.8 $ 359.5

Accumulated benefit obligations at end of year $ 251.2 $ 336.8

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Actual return on plan assets ( 79.0 ) 16.4

Employer contributions — 0.1

Benefits paid ( 22.7 ) ( 23.3 )

End of year $ 353.5 $ 360.4

Fair value of plan assets at end of year $ 251.8 $ 353.5

Accrued benefit cost at end of year:

5 unchanged sentences

$ 78.7 $ 59.9

The components of net periodic benefit cost for our Pension Plans are presented below.

The components of net periodic (benefit) cost for our Pension Plan are presented below.

2022 2021 2020

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Amortization of actuarial net loss 1.7 2.5 2.8

Pension settlement — — 0.7

Other — — ( 0.1 )

Pension (benefit) cost other than service ( 3.3 ) ( 3.0 ) 0.4

Net periodic benefit (benefit) cost $ ( 1.8 ) $ ( 1.5 ) $ 2.0

Index to Financial Statements

P lan activity in accumulated other comprehensive loss, before tax, in 2021 is presented below, in millions.

Pension benefit other than service ( 3.9 ) ( 3.3 ) ( 3.0 )

Net periodic benefit $ ( 2.6 ) $ ( 1.8 ) $ ( 1.5 )

Pension P lan activity in accumulated other comprehensive loss, before tax, in 2022 is presented below, in millions.

Balance at beginning of year $ 59.9

Actuarial gain ( 11.6 )

Actuarial loss 20.5

Prior year actuarial loss amortization to net periodic cost ( 1.7 )

Balance at end of year $ 78.7

We amortize amounts in accumulated other comprehensive loss representing unrecognized prior year service cost and unrecognized loss related to the Pension Plans over the weighted average life expectancy of their inactive participants.

Index to Financial Statements

We amortize amounts in accumulated other comprehensive loss representing unrecognized prior year service cost and unrecognized loss related to the Pension Plan over the weighted average life expectancy of their inactive participants.

Actuarial gains and losses are amortized using a corridor approach.

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Gains and losses in excess of the corridor are generally amortized over the average remaining lifetime of the plan participants.

We expect to amortize $ 1.7 million of unrecognized loss into net periodic benefit cost from accumulated other comprehensive loss in 2022.

We expect to amortiz e $ 3.7 million of unrecognized loss into net periodic expense from accumulated other comprehensive loss in 2023.

S trategic asset allocations, tactical range at September 30, 2022 and actual asset allocations are as follows:

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100 % 100 % 100 % 100 %

Assets of the Plan are allocated to various investments to attain diversification and reasonable risk-adjusted returns while also managing the exposure to asset and liability volatility.

Assets of the Pension Plan are allocated to various investments to attain diversification and reasonable risk-adjusted returns while also managing the exposure to asset and liability volatility.

These ranges are targets and deviations may occur from time to time as a result of market fluctuations.

Portfolio assets are typically rebalanced to the allocation targets at least annually.

The assets of the Plan are primarily invested in investment trusts valued at net asset value, which in turn hold fixed income and equity investments.

The valuation methodologies used to measure the assets of the Plan at fair value are:

• Fixed income fund investments held by the investment trusts are valued using the closing price reported in the active market in which the investment is traded or based on yields currently available on comparable securities of issuers with similar credit ratings;

• Equity investments held by the investment trusts are valued using the closing price reported on the active market when reliable market quotations are readily available.

When market quotations are not readily available, these assets are valued by a method the trustees believe accurately reflects fair value;

The assets of the Pension Plan are primarily invested in mutual funds and investment trusts valued at net asset value, which in turn hold fixed income and equity investments.

The valuation methodologies used to measure the assets of the Pension Plan at fair value are:

• Mutual funds are valued at the closing price reported on the active market;

• Fixed income fund investments held by the investment trusts are valued using the closing price reported in the active market in which the investment is traded.

When market quotations are not readily available, these assets are valued by a method the trustees believe accurately reflects fair value.

Index to Financial Statements

15 unchanged sentences

Large cap index funds 52.1 — 52.1

Mid cap index funds — 13.5 13.5

Small cap growth funds — 12.7 12.7

International stocks:

Mutual funds 7.4 — 7.4

International funds 52.5 — 52.5

29 unchanged sentences

Shares outstanding at September 30, 2022 155,844,138

The Company has authorized 20.0 million shares of $ 0.01 par value preferred stock.

The preferred stock may be issued in one or more series and with such designations and preferences for each series as shall be stated in the resolutions providing for the designation and issue of each such series adopted by the Board of Directors of the Company.

The Board of Directors is authorized by the Company's articles of incorporation to determine the voting, dividend, redemption and liquidation preferences pertaining to each such series.

No shares of preferred stock have been issued by the Company as of September 30, 2022.

Stock-based Compensation Plans

The effect of stock-based compensation on our consolidated statements of operations is presented below.

Such amounts are included within selling, general, and administrative costs.

2022 2021 2020

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We expect to recognize this expense over a weighted average life of approximately 1.5 years.

Index to Financial Statements

The Mueller Water Products, Inc.

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Based on historical forfeitures, we expect grants to others to be forfeited at an annual rate of 2 %.

Index to Financial Statements

Restricted Stock Units.

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The table below provides information regarding MRSU awards, which were valued using Monte Carlo simulations on the grant date.

January 27, 2021 December 2, 2020 February 24, 2020 January 28, 2020 December 3, 2019

November 30, 2021 January 27, 2021 December 2, 2020 February 24, 2020 January 28, 2020 December 3, 2019

Fair value at grant date $ 15.76 $ 14.26 $ 15.39 $ 18.17 $ 16.76 $ 14.94

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The assumptions used to determine the grant date fair value are indicated below for grants issued during our 2022 fiscal year.

January 27, 2021 December 2, 2020

November 30, 2021

Variables used in determining grant date fair value:

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Outstanding at September 30, 2020 328,099 $ 6.11 2.3 $ 1.4

Granted 431,520 11.86

Exercised ( 151,399 ) 4.09 1.7

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1,013,293 $ 12.19 7.7 278,569 $ 10.12

599,799 $ 10.67 7.8 176,700 $ 7.83

Employee Stock Purchase Plan.

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Employee purchases are funded through payroll deductions, and any excess payroll withholdings are returned to the employee.

The price for shares purchased under the ESPP is 85 % of the lower of the closing price on the first day or the last day of the offering period.

At September 30, 2021, 2,254,023 shares were available for issuance under the ESPP.

The price for shares purchased under the ESPP is 85 % of

Index to Financial Statements

the lower of the closing price on the first day or the last day of the offering period.

At September 30, 2022, 2,103,114 shares were available for issuance under the ESPP.

Phantom Plan.

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The CARES Act is a relief package intended to assist in many aspects of the American economy through direct secured loans and deferrals of the employer portion of social security taxes through the end of calendar year 2020, with 50% of the deferral due December 31, 2021 and the remainder due December 31, 2022.

For the fiscal year ended September 30, 2021, we have elected to defer these obligations, which are approximately $7.2 million as shown above.

For the fiscal year ended September 30, 2022 and September 30, 2021, we have elected to defer these obligations, which are approximately $ 4.4 million and $ 7.2 million, respectively, as shown above.

Index to Financial Statements

Supplemental Statement of Operations Information

Between November 2019 and March 2021, we announced the purchase and closure of several facilities.

Between November 2019 a nd March 2021, we announced the purchase and closure of several facilities.

We purchased a new facility in Kimball, Tennessee, to support and enhance our investment in our Chattanooga, Tennessee large casting foundry and closed our facilities in Hammond, Indiana and Woodland, Washington.

We also announced the planned closures of our facilities in Aurora, Illinois and Surrey, British Columbia, Canada.

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

We expect to substantially complete the Aurora and Surrey facility closures by the third quarter of 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 years ended September 30, 2021 and September 30, 2020 were approximately $ 5.6 million and $ 2.5 million, respectively.

The $ 5.6 million incurred during fiscal 2021 included approximately $ 3.2 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.

On June 15, 2021, we experienced a mass shooting tragedy at our Mueller Co.

facility in Albertville, Alabama.

The event resulted in the deaths of two employees and injuries to two employees.

For the year ended September 30, 2021, we incurred expenses of $ 2.1 million related to this tragedy, which are included in Strategic reorganization and other charges.

These amounts are net of anticipated insurance recoveries.

We also completed the closures of our facilities in Aurora, Illinois and Surrey, British Columbia, Canada during our fiscal year 2022.

The majority of the activities from these plants were transferred to our Kimball, Tennessee facility.

We incurred $ 1.5 million and $ 5.6 million of expenses, respectively, for the years ended September 30, 2022, and 2021, as a result of these plant closures.

Additionally, fiscal year 2022 included Strategic reorganization and other charges related to the Albertville tragedy and certain transaction-related costs.

Fiscal year 2021 included Strategic reorganization and other charges related to the Albertville tragedy, and certain transaction costs, partially offset by a one-time settlement gain in connection with an indemnification from a previously owned property.

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

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Other interest expense 0.3 0.3 0.3

23.8 26.6 23.3

Total interest expense 17.6 23.8 26.6

Interest income ( 0.7 ) ( 0.4 ) ( 1.1 )

$ 23.4 $ 25.5 $ 19.8

Net interest expense $ 16.9 $ 23.4 $ 25.5

Index to Financial Statements

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Balance at September 30, 2021 $ 17.2 $ ( 22.2 ) $ ( 5.0 )

Other comprehensive income before reclassifications 9.2 8.6 17.8

Amounts reclassified out of accumulated other comprehensive loss — 1.9 1.9

Other comprehensive income 9.2 10.5 19.7

Current period other comprehensive income ( 25.5 ) ( 14.1 ) ( 39.6 )

Balance at September 30, 2022 $ ( 8.3 ) $ ( 36.3 ) $ ( 44.6 )

Segment Information

Our operations consist of two reportable segments:

Infrastructure and Technologies.

These segments are organized primarily based on products sold and customers served and are consistent with how the segments are managed, how resources are allocated and how information is used by the chief operating decision maker.

Infrastructure manufactures valves for water and gas systems including butterfly, iron gate, tapping, check, knife, plug, automatic control and ball valves and dry-barrel and wet-barrel fire hydrants and pipe repair products.

Technologies offers metering, leak detection, pipe condition assessment and other products and services for the water infrastructure industry.

We adopted a new management structure effective October 1, 2021 which resulted in a change to our reportable segments.

Prior period information has been recast to conform to the current presentation.

The recasting has no effect on our previously reported consolidated balance sheets, consolidated statements of operations, or consolidated statements of cash flows.

The two newly named business units and reportable segments are Water Flow Solutions and Water Management Solutions.

Water Flow Solutions’ product portfolio includes iron gate valves, specialty valves and service brass products.

Water Management Solutions’ product and service portfolio includes fire hydrants, repair and installation, natural gas, metering, leak detection, pressure control and software products.

Segment results are not reflective of their results on a stand-alone basis.

Intersegment sales and transfers are made at selling prices generally intended to cover costs.

Infrastructure personnel provide certain administrative services, including management of accounts payable and accounts receivable, without any allocation of cost to Technologies.

We do not believe the costs of such administrative services are material to the segment’s results.

The determination of segment results excludes certain expenses designated as Corporate because they are not directly attributable to segment operations.

Interest expense, loss on early extinguishment of debt and income taxes are not allocated to the segments.

Corporate expenses include those costs incurred by our corporate function, such as accounting, treasury, risk management, human resources, legal, tax and other administrative functions and also costs associated with assets and liabilities retained following the sales of U.S.

Pipe and Anvil.

Corporate expenses include those costs incurred by our corporate function, such as accounting, treasury, risk management, human resources, legal, tax and other administrative functions.

Corporate assets principally consist of our cash, operating lease assets, and certain real property previously owned by U.S.

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Business segment assets consist primarily of receivables, inventories, property, plant and equipment, intangible assets and other noncurrent assets.

Our largest customers are Ferguson and Core & Main.

Information regarding concentrations of our net sales and accounts receivable is presented below.

2021 2020 2019

Percentage of gross revenue:

10 largest customers 58 % 53 % 53 %

2 largest customers 37 % 34 % 34 %

Ferguson percentage of gross revenue:

Consolidated 19 % 17 % 18 %

Infrastructure 18 % 16 % 17 %

Technologies 33 % 22 % 30 %

Core & Main percentage of gross revenue:

Consolidated 18 % 17 % 16 %

Infrastructure 20 % 19 % 18 %

Index to Financial Statements

September 30,

(in millions)

Customer receivables:

Core & Main $ 48.1 $ 37.1

Ferguson 32.1 26.1

The Company has two significant customers that comprise greater than 10% of our gross sales.

One customer comprised 21%, 18%, and 17% of consolidated revenues for the fiscal years ended September 30, 2022, 2021, and 2020, respectively.

The Company has outstanding accounts receivable from this customer of $ 52.1 million and $ 48.1 million as of September 30, 2022 and 2021, respectively.

Another customer comprised 20 %, 19 %, and 17 % of consolidated revenues for the fiscal years ended September 30, 2022, 2021, and 2020, respectively.

The Company has outstanding accounts receivable from this customer of $ 38.6 million and $ 32.1 million as of September 30, 2022 and 2021, respectively.

The Company reports revenue for these customers in both reportable segments, Water Flow Sol utions and Water Management Solutions.

Geographical area information is presented below.

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September 30, 2021 263.9 13.8 5.7 283.4

Index to Financial Statements

September 30,

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(in millions)

Infrastructure disaggregated net revenues:

Water Flow Solutions disaggregated net revenues:

Central $ 190.9 $ 155.1 $ 133.6

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$ 714.1 $ 617.8 $ 532.2

Technologies disaggregated net revenues:

Water Management Solutions disaggregated net revenues:

Central $ 142.9 $ 125.6 $ 107.3

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United States $ 470.3 $ 431.4 $ 377.5

Canada and other international locations 4.7 4.5 5.0

Canada 39.2 38.1 33.4

Other international locations 23.8 23.7 21.0

$ 533.3 $ 493.2 $ 431.9

Index to Financial Statements

Summarized financial information for our segments is presented below.

Infrastructure Technologies Corporate Total

Index to Financial Statements

Solutions Water Management

Solutions Corporate Total

(in millions)

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We are involved in various legal proceedings that have arisen in the normal course of operations, including the proceedings summarized below.

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 and potential insurance coverage.

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.

We provide for costs relating to these matters when a loss is probable and the amount is reasonably estimable.

Legal and 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.

Other than the litigation described below, we do not believe that any of our outstanding litigation would have a materially adverse effect on our financial position, results of operations, cash flows or liquidity.

Environmental.

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

Under the terms of the acquisition agreement relating to the August 1999 sale by Tyco of businesses which make up certain of the companies within Mueller Water Products, Inc., we are indemnified by certain Tyco entities for, among other things, 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 (“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.

The indemnity survives indefinitely.

1 unchanged sentence

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

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,

Index to Financial Statements

over, such Tyco indemnitors has changed.

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.

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

and located in Milton, Ontario, filed suit in the Ontario Superior Court of Justice against Mueller Canada Ltd.

and its directors seeking C$ 10.0 million in damages arising from the defendants’ alleged environmental contamination of the property and breach of lease.

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The purchaser of U.S.

Pipe has been identified as a “potentially responsible party” (“PRP”) under the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”) in connection with a former manufacturing facility operated by 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 that was in the vicinity of a proposed Superfund site located in North Birmingham, Alabama.

2 unchanged sentences

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.

Accordingly, because the amount of such costs cannot be reasonably estimated at this time, no amounts had been accrued for this matter at September 30, 2021.

Walter Energy .

We were a member of the Walter Energy, Inc (“Walter Energy”) federal tax consolidated group through December 14, 2006, at which time the Company was spun-off from Walter Energy.

Accordingly, we were jointly and severally liable for the federal income tax liability, if any, of the consolidated group for each of those years.

As a result of a proof of claim filed by the IRS against Walter Energy in its 2015 bankruptcy case, we paid $ 22.2 million, including additional accrued interest, to the IRS in final settlement of this tax dispute.

All appeal periods have expired, and our liabilities with respect to the Walter Tax Liability have been fully resolved.

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 September 30, 2022.

The COVID-19 Pandemic.

The pandemic has caused, and is likely to continue to cause, severe economic, market and other disruptions to the United States and global economies.

As a result of the pandemic, we experienced adverse business conditions during the year, including significant costs to mitigate the pandemic effects.

During the course of the pandemic, we have taken steps, as reasonably necessary, to maximize liquidity by limiting cash expenditures, including furloughing significant numbers of our employees, implementing temporary shutdowns of our manufacturing facilities or portions of our manufacturing facilities, implementing temporary salary reductions for our senior leadership team, deferral of capital expenditures, reduced fees for our Board of Directors and aggressively reducing general and administrative spending.

We will continue to take steps as necessary.

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 Mueller Co.

Facility in Albertville, Alabama .

On June 15, 2021, we experienced a mass shooting event at our Mueller Co.

facility in Albertville, Alabama, in which two employees were killed and two employees 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.

The pandemic has caused, and is likely to continue to cause, severe economic, market and other disruptions to the U.S.

and global economies.

We have taken action and continue to counter such disruption, and work to protect the safety of our employees.

While the extent to which the pandemic affects our results will depend on future developments, the pandemic could result in material effects to our future financial position, results of operations, cash flows and liquidity.

Mass Shooting Event at our Facility in Albertville, Alabama .

On June 15, 2021, we exp erienced a mass shooting event at our facility in Albertville, Alabama.

Various claims arising from the event have been filed to date, some of which have been resolved, and we anticipate that additional claims may be made.

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 outcome of outstanding and potential claims, legal proceedings and related effects arising from this event cannot be predicted with certainty.

Indemnifications .

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Indemnities related to pre-closing operations generally include certain environmental and tax liabilities and other liabilities not assumed by these parties in the transaction.

Index to Financial Statements

Indemnities related to the pre-closing operations of sold assets or businesses normally do not represent additional liabilities to us, but simply serve to protect these parties from potential liability associated with our obligations existing at the time of the sale.

2 unchanged sentences

Other Matters.

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

Critical factors in our reserve analyses include warranty terms, specific claim situations, 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 other 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 material adverse effect on our business or prospects.

We monitor and analyze our warranty experience and costs periodically and may 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 financial position, results of operations, cash flows or liquidity.

Index to Financial Statements

Subsequent Events

On October 22, 2021 , our Board of Directors declared a dividend of $ 0.0580 per share on our common stock, a 5.5% increase from the prior quarter, payable on or about November 22, 2021 to stockholders of record at the close of business on November 10, 2021 .

Additionally, we announced a new management structure effective October 1, 2021.

The new structure is designed to increase revenue growth, drive operational excellence, accelerate new product development and enhance profitability.

We anticipate the reorganization will strengthen the alignment of products, solutions and services with customer needs, accelerate new product introductions and improve product life cycle management.

The two newly named business units are Water Flow Solutions and Water Management Solutions.

• Water Flow Solutions’ product portfolio includes iron gate valves, specialty valves and service brass products.

Net sales of products in the Water Flow Solutions business unit were approximately 60% of fiscal 2021 consolidated net sales.

• Water Management Solutions’ product and service portfolio includes fire hydrants, repair and installation, natural gas, metering, leak detection, pressure control and software products.

Net sales of products in the Water Management Solutions business unit were approximately 40% of fiscal 2021 consolidated net sales.

Dividend Declaration.

On October 21, 2022 , our Board of Directors declared a dividend of $ 0.061 per share on our common stock, payable on or about November 21, 2022 to stockholders of record at the close of business on November 10, 2022 .

Collective Bargaining Agreement Extension.

On October 29, 2022, we successfully negotiated a collective bargaining agreement with the United Steelworkers in our Chattanooga, Tennessee facility.

The agreement expires October 29, 2025.

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-K

Item 9A. Controls and Procedures