Mueller Water Products, Inc. 10-K

Item 9A. CONTROLS AND PROCEDURES Evaluation of Disclosure Controls and Procedures We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports we file or submit under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission and that such information is accumulated and communicated to our management, including the Chief Executive Officer and the Chief Financial Officer as appropriate, to allow timely decisions regarding required disclosure. Our Chief Executive Officer and Chief Financial Officer evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) as of the end of the period covered by this Annual Report. Based on this evaluation, those officers have concluded that, at September 30, 2024, our disclosure controls and procedures were effective. Changes in Internal Control over Financial Reporting There have been no changes in internal control over financial reporting during the quarter ended September 30, 2024 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 Management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act). Internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. We assessed the effectiveness of our internal control over financial reporting at September 30, 2024. In making this assessment, we used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control - Integrated Framework (2013 framework). After doing so, management concluded that, at September 30, 2024, our internal control over financial reporting was effective. The effectiveness of our internal control over financial reporting at September 30, 2024 has been audited by Ernst & Young LLP, an independent registered public accounting firm, as stated in their report which is included in this Annual Report. Item 9B. OTHER INFORMATION (a) Not applicable. (b) Rule 10b5-1 Trading Plans No officers or directors, as defined in Rule 16a-1(f) adopted, modified and/or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” as defined in Regulation S-K Item 408, during the fourth quarter of fiscal 2024. Item 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS Not applicable. 40 Table of Contents Index to Financial Statements PART III Item 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE The name and position at November 20, 2024 and age of each of our executive officers and directors at September 30, 2024 are presented below. Name Age Position Marietta Edmunds Zakas 65 Chief Executive Officer Paul McAndrew 50 President and Chief Operating Officer Steven S. Heinrichs 56 Executive Vice President, Chief Financial Officer and Chief Legal and Compliance Officer Chason A. Carroll 49 Senior Vice President, General Counsel and Corporate Secretary Scott P. Floyd 55 Senior Vice President, Sales and Marketing Todd P. Helms 57 Senior Vice President and Chief Human Resources Officer Richelle R. Feyerherm 52 Vice President, Operations Controller Suzanne G. Smith 57 Vice President and Chief Accounting Officer Stephen C. Van Arsdell 74 Non-Executive Chair of the Board of Directors Shirley C. Franklin 79 Director Christian A. Garcia 61 Director Thomas J. Hansen 75 Director Brian C. Healy 53 Director Christine Ortiz 53 Director Jeffery S. Sharritts 56 Director Brian L. Slobodow 56 Director Lydia W. Thomas 79 Director Karl Niclas Ytterdahl 59 Director Marietta Edmunds Zakas has served as our Chief Executive Officer since May 2024. She served as President and Chief Executive Officer from August 2023 to May 2024, as Executive Vice President and Chief Financial Officer from January 2018 to August 2023 and as Senior Vice President, Strategy, Corporate Development and Communications from November 2006 to December 2017. She was also the interim head of Human Resources from January 2016 to December 2017. Previously, Ms. Zakas held various positions at Russell Corporation, an athletic apparel, footwear and equipment company, culminating in her role as Corporate Vice President, Chief of Staff, Business Development and Treasurer. From 1993 to 2000, she served as Corporate Vice President, Director of Investor Relations, and Corporate Secretary for Equifax Inc. Ms. Zakas began her career as an investment banker at Morgan Stanley. 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. Ms. Zakas is a director of BlueLinx Holdings Inc. and is a former director of Atlantic Capital Bank and Atlantic Capital Bancshares. Paul McAndrew has served as our President and Chief Operating Officer since May 2024. He served as Executive Vice President and Chief Operating Officer from August 2023 to May 2024 and as Senior Vice President of Global Operations and Supply Chain from November 2022 to August 2023. Previously, Mr. McAndrew served as Vice President and General Manager of Professional Tools in the Commercial and Residential Solutions business with Emerson Electric Co. from April 2017 to November 2022. Prior to that, he held various operating roles at Kautex Textron GmbH & Co. KG from June 2002 to April 2017, culminating in his role as Vice President. Mr. McAndrew earned a Bachelor of Science degree from Cardiff University. Steven S. Heinrichs has served as our Executive Vice President, Chief Financial Officer and Chief Legal and Compliance Officer since August 2023. He served as our Executive Vice President, Chief Legal and Compliance Officer and Secretary from August 2018 to August 2023. He served as Senior Vice President, General Counsel and Secretary of Neenah, Inc. (f/k/a Neenah Paper, Inc.), which spun off from Kimberly-Clark Corporation in December 2004, from June 2004 to July 2018. Mr. Heinrichs joined Kimberly-Clark as Chief Counsel, Pulp and Paper and General Counsel for Neenah, Inc. Prior to his 41 Table of Contents Index to Financial Statements employment with Kimberly-Clark, Mr. Heinrichs served as Associate General Counsel and Assistant Secretary for Mariner Health Care, Inc., a nursing home and long-term acute care hospital company. Before joining Mariner Health Care in 2003, Mr. Heinrichs served as Associate General Counsel and Assistant Secretary for American Commercial Lines LLC, a leading inland barge and shipbuilding company from 1998 through 2003. Mr. Heinrichs engaged in the private practice of law with Skadden, Arps, Slate, Meagher and Flom LLP and Shuttleworth, Smith, McNabb and Williams PLLC from 1994 through 1998. Mr. Heinrichs earned a Master of Business Administration from the Kellogg School of Management at Northwestern University, his law degree from Tulane University, and his Bachelor of Arts degree from the University of Virginia. Chason A. Carroll has served as our Senior Vice President, General Counsel and Corporate Secretary since January 2024. He served as Vice President, General Counsel and Corporate Secretary from August 2023 to January 2024, as Vice President, Deputy General Counsel and Assistant Secretary from January 2019 to August 2023 and Senior Assistant General Counsel from March 2013 to January 2019. Prior to joining us, Mr. Carroll held various positions at Atlanticus Holdings Corporation and Motorola Inc and engaged in the private practice of law with Taylor English Duma LLP. Mr. Carroll earned a Bachelor of Electrical Engineering and a Master of Electrical Engineering from Georgia Institute of Technology and his law degree from Georgia State University. Scott P. Floyd has served as our Senior Vice President, Sales and Marketing since March 2024. He served as Senior Vice President, Water Flow Solutions from October 2021 to March 2024, as Senior Vice President, Infrastructure from June 2020 to September 2021, as Vice President and General Manager - Specialty Valves from February 2019 to May 2020, as Plant Manager of our Cleveland, Tennessee facility from October 2007 to February 2019, as Plant Manager of our Brownsville, Texas facility from March 2016 to February 2019, and as Operations Manager of our Cleveland, Tennessee facility from September 1998 to October 2007. Todd P. Helms has served as our Senior Vice President and Chief Human Resources Officer since February 2020. Previously, Mr. Helms held the position of Executive Vice President and Chief Human Resource Officer at Synovus Financial Corporation and as Senior Vice President, Human Resources at Genuine Parts Company. Mr. Helms earned a Bachelor of Science degree from King College, a Bachelor of Mechanical Engineering from Georgia Institute of Technology and a Master of Business Administration from Ohio University. Richelle R. Feyerherm has served as our Vice President, Operations Controller since November 2019. Previously, Ms. Feyerherm served as a Financial Officer of the Water Products division of Lonza Group, Ltd. from October 2011 to February 2019. Ms. Feyerherm earned her Bachelor of Science degree from the State University of New York and is a certified public accountant. Suzanne G. Smith has served as our Vice President and Chief Accounting Officer since January 2021. 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. 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. Stephen C. Van Arsdell has been a member of our Board of Directors since July 2019 and has served as our Non-Executive Chair since February 2024. Mr. Van Arsdell is a former senior partner of Deloitte LLP, where he served as Chairman and Chief Executive Officer of Deloitte & Touche LLP from 2010-2012 and as Deputy Chief Executive Officer from 2009-2010. He also served as a member of Deloitte’s board of directors from 2003-2009, during which time he held the position of Vice-Chair. Mr. 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. Mr. Van Arsdell previously served as a director of First Midwest Bancorp, Inc. from 2017 to February 2022. Mr. 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. Shirley C. Franklin has been a member of our Board of Directors since November 2010. Ms. Franklin serves as the President of Clarke-Franklin & Associates, Inc., a management consulting firm, and of Clark Lyons LLC, a business development and professional services firm. She is also a co-founder of Authenticity Partners. In addition, Ms. Franklin serves as a board member of the National Center for Civil and Human Rights and is a board member of the Paul Volcker Alliance. From 2002 to 2010, Ms. Franklin was mayor of Atlanta, Georgia. Ms. 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. Christian A. Garcia has been a member of our Board of Directors since August 2024. Prior to his appointment as a member of the Board, Mr. Garcia was a Board observer from March 2024 to August 2024. Mr. Garcia formerly served as Executive Vice President and Chief Financial Officer from 2020 to 2023 at BrandSafway, a provider of industrial services solutions to commercial, industrial, and infrastructure markets. From January 2020 to August 2020, Mr. Garcia served as the Executive 42 Table of Contents Index to Financial Statements Vice President and Chief Financial Officer of Weatherford International, a publicly listed oil services company. From 2016 to 2019, Mr. Garcia served as Executive Vice President and Chief Financial Officer of Visteon Corporation, a publicly listed provider of automotive cockpit electronics. Previously, Mr. Garcia served as acting Chief Financial Officer of Halliburton Company, where he progressed through a variety of leadership positions including Chief Accounting Officer, Treasurer and Senior Vice President of Investor Relations. Mr. Garcia has served as a Director at Tetra Technologies, Inc. since May 2023 and Bausch Health Companies Inc. since May 2024. Mr. Garcia earned a Bachelor of Science degree in business economics from the University of the Philippines and a Master of Science degree in management from Purdue University. Thomas J. Hansen has been a member of our Board of Directors since October 2011. Until 2012, Mr. 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. He joined ITW in 1980 as sales and marketing manager of the Shakeproof Industrial Products businesses. From 1998 until May 2006, Mr. Hansen served as Executive Vice President of ITW. Mr. Hansen earned a Bachelor of Science degree in marketing from Northern Illinois University and a Master of Business Administration degree from Governors State University. Brian C. Healy has been a member of our Board of Directors since February 2024. Prior to his election as a member of the Board, Mr. Healy was a Board observer from November 2023 to February 2024. Mr. Healy is a lecturer of finance at the University of Virginia McIntire School of Commerce. He previously served as Managing Director and Co-Head of Mergers and Acquisitions in the Americas at Morgan Stanley and was a member of the Investment Banking Management Committee from 2019 to 2023. Mr. Healy also held various leadership roles at Morgan Stanley, including Global Chief Operating Officer of Investment Banking and Head of Firm Strategy and Execution. He serves as a Board Member of Children’s Aid and Family Services of New Jersey. Mr. Healy earned his Bachelor of Science in Commerce from the University of Virginia and an MBA with a concentration in finance from the University of Chicago. Christine Ortiz has been a member of our Board of Directors since November 2018. Dr. Ortiz is the Morris Cohen Professor of Materials Science and Engineering at the Massachusetts Institute of Technology and Director of the MIT Technology and Policy Program. 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 Massachusetts Institute of Technology from 2010 to 2016. She is also the founder of an innovative, nonprofit, higher education educational institution, Station1. Dr. 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. Jeffery S. Sharritts has been a member of our Board of Directors since March 2021. Mr. Sharritts served as Executive Vice President and Chief Customer and Partner Officer at Cisco from May 2022 to July 2024. During his nearly 24-year tenure at Cisco, Mr. Sharritts held several executive sales roles, including 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. Mr. Sharritts earned a Bachelor of Science degree in Business Administration from The Ohio State University. Brian L. Slobodow has been a member of our Board of Directors since October 2022. Mr. Slobodow is Chief Executive Officer of Better Being Co., a manufacturer and distributor of supplements and personal care products. From 2021 to 2023, he served as an Operating Partner of Operational Resource Group, LLC and 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. Mr. 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. Lydia W. Thomas has been a member of our Board of Directors since January 2008. Dr. 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. In 2013, she was honored by the Outstanding Directors Exchange as an Outstanding Director of the Year. Dr. Thomas is also a member of the Council on Foreign Relations. 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. 43 Table of Contents Index to Financial Statements Karl Niclas Ytterdahl has been a member of our Board of Directors since February 2023. Prior to his appointment as a member of the Board, Mr. Ytterdahl served as Board Observer from October 2022 to February 2023. He is an Independent Sponsor, partnering with capital investors to consolidate vehicle service sector companies, and the former Executive Chairman and Chief Operating Officer of Industrial Service Solutions (“ISS”), an industrial service provider for critical process equipment and a portfolio company of Wynnchurch Capital, a private equity firm. Prior to joining ISS, Mr. Ytterdahl was the President of Dover Vehicle Service Group and a Senior Vice President at Dover Corporation. From 2006 to 2011, Mr. Ytterdahl was Chief Procurement Officer at AES and from 2000 to 2006, he held various roles including Vice President and General Manager at Fisher Scientific and President at Fisher Scientific Switzerland. Mr. Ytterdahl began his career at the management consulting firms A.T. Kearney and Accenture. He has previously served as a director on the board of Advanced Converting Works and currently serves on the board of Euro Motorparts Group. Mr. Ytterdahl earned a Master of Science degree from Chalmers University of Technology and Master of Science degree from the MIT Sloan School of Management. Additional Information Additional information required by this item, as well as information relating to compliance with Section 16(a) of the Exchange Act, will be contained in our definitive proxy statement issued in connection with the 2025 Annual Meeting of Stockholders filed with the SEC within 120 days after September 30, 2024 and is incorporated herein by reference. Our website address is www.muellerwaterproducts.com . You may read and print our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements and any amendments to those reports via the investor relations section of our website free of charge. These reports are available on our website soon after we file them with or furnish them to the SEC. These reports should also be available through the SEC’s website at www.sec.gov . We have adopted a written code of conduct that applies to all directors, officers and employees, including a separate code that applies only to our principal executive officer and senior financial officers in accordance with Section 406 of the Sarbanes-Oxley Act of 2002 and the rules of the SEC promulgated thereunder. Our Code of Business Conduct and Ethics is filed as Exhibit 14.1 to this annual report on Form 10-K and is also available in the corporate governance section of our website. In the event that we make changes in, or provide waivers from, the provisions of this Code of Business Conduct and Ethics for which SEC disclosure is required, we will make such disclosure in the corporate governance section of our website. We have adopted corporate governance guidelines. The guidelines and the charters of our Board of Directors’ committees are available in the corporate governance section of our website. Copies of the Code of Business Conduct and Ethics, corporate governance guidelines and Board of Director committee charters are also available in print upon written request to the Corporate Secretary, Mueller Water Products, Inc., 1200 Abernathy Road N.E., Suite 1200, Atlanta, GA 30328. We have adopted an insider trading policy that governs the purchase, sale and/or other dispositions of our securities by directors, officers and employees, as well as the Company, that is reasonably designed to promote compliance with insider trading laws, rules and regulations, and the New York Stock Exchange listing standards applicable to us. A copy of our Insider Trading Policy is filed as Exhibit 19.1 to this annual report on Form 10-K. Item 11. EXECUTIVE COMPENSATION The information required by this item will be contained in our definitive proxy statement issued in connection with our 2025 Annual Meeting of Stockholders and is incorporated herein by reference. Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS Except for the information set forth below and the information set forth in “Part II, Item 5. 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 our 2025 Annual Meeting of Stockholders and is incorporated herein by reference. 44 Table of Contents Index to Financial Statements Securities Authorized for Issuance under Equity Compensation Plans We have two compensation plans under which our equity securities are authorized for issuance: (1) The Mueller Water Products, Inc. 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, 2024. Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance Equity compensation plans approved by stockholders: 2006 Plan 2,375,934 (1) $ 12.60 (2) 3,874,846 (3) ESPP 24,621 — 1,792,275 (4) Total 2,400,555 5,667,121 (1) Consists of the maximum number of shares that could be earned upon exercise or vesting of outstanding stock-based awards granted under the 2006 Plan. This includes 990,368 shares associated with share-settled performance units that may or may not be earned, depending on Company performance or stock market performance, as described in Note 10. of the Notes to the Consolidated Financial Statements. (2) Weighted-average exercise price of 931,770 options. (3) The number of securities initially available for issuance under the 2006 Plan was 20,500,000 shares. (4) The number of securities initially available for issuance under the ESPP Plan was 5,800,000 shares. Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE The information required by this item will be contained in our definitive proxy statement issued in connection with our 2025 Annual Meeting of Stockholders and is incorporated herein by reference. Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES The information required by this item will be contained in our definitive proxy statement issued in connection with our 2025 Annual Meeting of Stockholders and is incorporated herein by reference. 45 Table of Contents Index to Financial Statements PART IV Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES (a) Financial Statements Index to financial statements Page number Reports of Independent Registered Public Accounting Firm (PCAOB ID: 42 ) F-1 Consolidated Balance Sheets at September 30, 2024 and 2023 F-4 Consolidated Statements of Operations for the years ended September 30, 2024, 2023 and 2022 F-5 Consolidated Statements of Comprehensive Income for the years ended September 30, 2024, 2023 and 2022 F-6 Consolidated Statements of Equity for the years ended September 30, 2024, 2023 and 2022 F-7 Consolidated Statements of Cash Flows for the years ended September 30, 2024, 2023 and 2022 F-8 Notes to Consolidated Financial Statements for the three years ended September 30, 2024, 2023 and 2022 F-9 (b) Financial Statement Schedules The information required by Schedule II is included in the Notes to Consolidated Financial Statements. All other schedules required by Item 15(b) are not applicable or not required. (c) Exhibits Exhibit no. Document 2.1 Agreement and Plan of Merger dated as of June 17, 2005 among Mueller Water Products, Inc., Walter Industries, Inc., JW MergerCo, Inc. and DLJ Merchant Banking II, Inc., as stockholders’ representative. Incorporated by reference to Exhibit 2.1 to Mueller Water Products, Inc. Form 8-K (File no. 333-116590) filed on June 21, 2005. 2.2 Letter Agreement dated as of February 23, 2006 between Walter Industries, Inc. and Mueller Water Products, Inc. Incorporated by reference to Exhibit 10.1 to Mueller Water Products, Inc. Form 8-K (File no. 333-131521) filed on February 27, 2006. 2.3 Agreement and Plan of Merger, dated as of January 31, 2006, by and among Mueller Holding Company, Inc., Mueller Water Products, LLC and Mueller Water Products Co-Issuer, Inc. Incorporated by reference to Exhibit 2.1 Mueller Water Products, Inc. Form 8-K (File no. 333-116590) filed on February 3, 2006. 2.4 Purchase Agreement dated as of January 6, 2017, by and among OEP Pioneer LLC, OEP Pioneer (Canada) Holdings Corp., Mueller Co. LLC, Anvil International, LLC and Mueller Water Products, Inc. Incorporated by reference to Exhibit 2.1 to Mueller Water Products, Inc. Form 8-K (File no. 001-32892) filed on January 10, 2017. 3.1 Second Amended and Restated Bylaws of Mueller Water Products, Inc. Incorporated by reference to Exhibit 3.1 to Mueller Water Products, Inc. Form 8-K (File no. 001-32892) filed on May 6, 2024 . 3.2 Second Restated Certificate of Incorporation of Mueller Water Products, Inc. Incorporated by reference to Exhibit 3.2 to Mueller Water Products, Inc. Form 8-K (File no. 001-32892) filed on January 25, 2012. 4.1 Indenture, dated as of May 28, 2021, between Mueller Water Products, Inc., the Guarantors and Wells Fargo Bank, National Association, as trustee. Incorporated by reference to Exhibit 4.1 to Mueller Water Products, Inc. Form 8-K (File no.001-32892) filed on June 1, 2021. 4.3 Description of Securities registered under Section 12 of the Securities Exchange Act of 1934. Incorporated by reference to Exhibit 4.2 to Mueller Water Products, Inc. Form 10-K (File no. 001-32892) filed on November 19, 2020). 10.2 Income Tax Allocation Agreement by and among Walter Industries, Inc., the Walter Affiliates (as defined therein), Mueller Water Products, Inc. and the Mueller Affiliates (as defined therein). Incorporated by reference to Exhibit 10.2 to Mueller Water Products, Inc. Form 8-K (File no. 001-32892) filed on May 30, 2006. 10.3.1+ Mueller Water Products, Inc. Second Amended and Restated 2006 Stock Incentive Plan. Incorporated by reference to Exhibit D to Mueller Water Products, Inc. Form DEF 14A (File no. 001-32892) filed on January 15, 2016. 46 Table of Contents Index to Financial Statements Exhibit no. Document 10.4.2+ Mueller Water Products, Inc. Form of Notice of Stock Option Grant. Incorporated by reference to Exhibit 10.4.2 to Mueller Water Products, Inc. Form 10-K (File no. 001-32892) filed on November 26, 2014. 10.6.1+ Mueller Water Products, Inc. Amended and Restated 2006 Employee Stock Purchase Plan. Incorporated by reference to Exhibit C to Mueller Water Products, Inc. Form DEF 14A (File no. 001-32892) filed on January 15, 2016. 10.7+ Mueller Water Products, Inc. Directors’ Deferred Fee Plan. Incorporated by reference to Exhibit 10.7 to Mueller Water Products, Inc. 8-K (File no. 001-32892) filed on May 30, 2006. 10.8+ Form of Mueller Water Products, Inc. Director Indemnification Agreement. Incorporated by reference to Exhibit 99.2 to Mueller Water Products, Inc. 8-K (File no. 001-32892) filed on October 31, 2008. 10.9+ Executive Incentive Plan of Mueller Water Products, Inc. Incorporated by reference to Exhibit 10.6 to Mueller Water Products, Inc. 8-K (File no. 001-32892) filed on May 30, 2006. 10.10+ Mueller Water Products, Inc. Executive Deferred Compensation Plan. Incorporated by reference to Exhibit 99.3 to Mueller Water Products, Inc. 8-K (File no. 001-32892) filed on October 31, 2008. 10.11.2+ Amended and Restated Mueller Water Products, Inc. Supplemental Defined Contribution Plan, effective as of January 1, 2009. Incorporated by reference to Exhibit 10.13.2 to Mueller Water Products, Inc. Form 8-K (File no. 001-32892) filed on February 9, 2009. 10.14 Joint Litigation Agreement dated December 14, 2006 between Walter Industries, Inc. and Mueller Water Products, Inc. Incorporated by reference to Exhibit 10.3 to Mueller Water Products, Inc. Form 8-K (File no. 001-32892) filed on December 19, 2006. 10.16+ Form of Amendment to Executive Employment Agreement. Incorporated by reference to Exhibit 99.1 to Mueller Water Products, Inc. Form 8-K (File no. 001-32892) filed on February 6, 2009. 10.17.1+ Mueller Water Products, Inc. Amended and Restated 2010 Management Incentive Plan. Incorporated by reference to Exhibit B to Mueller Water Products, Inc. Form DEF 14A (File no. 001-32892) filed on January 15, 2016. 10.19 Credit Agreement, dated August 26, 2010, among Mueller Water Products, Inc. and the borrowing subsidiaries named on the signature pages thereto, each as a Borrower, certain financial institutions, as Lenders, JPMorgan Chase Bank, N.A., as Syndication Agent, Wells Fargo Bank, National Association and SunTrust Bank, as Co-Documentation Agents, Bank of America, N.A. as Administrative Agent and Banc of America Securities LLC and J.P. Morgan Securities Inc., as Joint Lead Arrangers and Joint Bookrunners. Incorporated by reference to Exhibit 10.23 to Mueller Water Products, Inc. Form 8-K (File no. 001-32892) filed on August 27, 2010. 10.19.1 First Amendment to Credit Agreement, dated December 18, 2012. Incorporated by reference to Exhibit 10.20.1 to Mueller Water Products, Inc. Form 8-K (File no. 001-32892) filed on December 19, 2012. 10.19.2 Second Amendment to Credit Agreement, dated November 25, 2014. Incorporated by reference to Exhibit 10.19.2 to Mueller Water Products, Inc. Form 10-K (File no. 001-32892) filed on November 26, 2014. 10.19.3 Third Amendment to Credit Agreement, dated July 12, 2016. Incorporated by reference to Exhibit 10.19.3 to Mueller Water Products, Inc. Form 10-Q (File no. 001-32892) filed on August 8, 2016. 10.19.4 Fourth Amendment to Credit Agreement, dated January 6, 2017. Incorporated by reference to Exhibit 10.1 to Mueller Water Products, Inc. Form 8-K (File no. 001-32892) filed on January 10, 2017. 10.19.5 Fifth Amendment to Credit Agreement, dated July 30, 2020. Incorporated by reference to Exhibit 10.1 to Mueller Water Products, Inc. Form 10-Q (File no. 001-32892) filed on August 6, 2020. 10.19.6 Sixth Amendment to Credit Agreement, dated April 5, 2023. Incorporated by reference to Exhibit 10.1 to Mueller Water Products, Inc. Form 10-Q (File no. 001-32892) filed on May 9, 2023. 10.19.7 S eventh Amendment to Credit Agreement, dated March 28, 2024. Incorporated by reference to Exhibit 10.1 to Mueller Water Products, Inc. Form 10-Q (File no. 001-32892) filed on May 7, 2024. 10.19.8 Limited Waiver Agreement to Credit Agreement, Dated December 11, 2023. Incorporated by reference to Exhibit 10.19.7 to Mueller Water Products, Inc. Form 10-K (File no. 000-32892) filed on December 14, 2023. 10.19.9 N otice of Early Termination of Waiver Period, dated February 6, 2024. Incorporated by reference to Exhibit 10.2 to Mueller Water Products, Inc. Form 10-Q (File no. 001-32892) filed on Feb r uary 9, 2024. 10.21 Purchase Agreement, dated March 7, 2012, among Mueller Water Products, Inc., Mueller Group, LLC and USP Holdings Inc. Incorporated by reference to Exhibit 2.3 to Mueller Water Products, Inc. Form 8-K (File no. 001-32892) filed on March 8, 2012. 10.29+ Employment Agreement, dated September 15, 2008, as amended, between Mueller Water Products Inc. and Marietta Edmunds Zakas. Incorporated by reference to Exhibit 10.28 to Mueller Water Products, Inc. Form 10-K (File no. 001-32892) filed on November 22, 2016. 47 Table of Contents Index to Financial Statements Exhibit no. Document 10.29.2+ Fourth Amendment, dated December 27, 2017, to Employment Agreement, dated September 15, 2008, as amended, between Mueller Water Products Inc. and Marietta Edmunds Zakas. Incorporated by reference to Exhibit 10.1 to Mueller Water Products, Inc. Form 8-K (File no. 001-32892) filed on December 28, 2017. 10.29.3+ Executive Change-in-Control Severance Agreement, dated September 30, 2019 by and between Mueller Water Products Inc. and Marietta Edmunds Zakas. Incorporated by reference to Exhibit 10.29.4 to Mueller Water Products, Inc. Form 10-K (File no. 001-32892) filed on November 19, 2020). 10.29.4+ Letter Agreement, dated August 21, 2023, by and between Mueller Water Products Inc. and Marietta Edmunds Zakas. Incorporated by reference to Exhibit 10.29.4 to Mueller Water Products, Inc. Form 10-K (File no, 000-32892) filed on December 14, 2023. 10.29.5+ Transition Grant Award Agreement, dated August 24, 2023, by and between Mueller Water Products, Inc. and Marietta Edmunds Zakas. Incorporated by reference to Exhibit 10.29.5 to Mueller Water Products , Inc. Form 10-K (File no. 000-32892) filed on December 14, 2023. 10.30+ Employment Agreement, dated January 4, 2017, by and between Mueller Water Products Inc. and John Scott Hall. Incorporated by reference to Exhibit 10.2 to Mueller Water Products, Inc. Form 8-K (File no. 001-32892) filed on January 10, 2017. 10.30.1+ Executive Change-in-Control Severance Agreement, dated September 30, 2019 by and between Mueller Water Products Inc. and J. Scott Hall. Incorporated by reference to Exhibit 10.30.3 to Mueller Water Products, Inc. Form 10-K (File no. 001-32892) filed on November 19, 2020). 10.30.2+ Transition and Separation Agreement, dated August 21, 2023, by and between Mueller Water Products, Inc. and J. Scott Hall. Incorporated by reference to Exhibit 10.30.2 to Mueller Water Products, Inc. Form 10-K (File no. 000-32892) filed on December 14, 2023. 10.31+ Employment Agreement, dated July 18, 2018, by and between Mueller Water Products Inc. and Steven S. Heinrichs. Incorporated by reference to Exhibit 10.31 to Mueller Water Products, Inc. Form 10-K (File no. 001-32892) filed on November 21, 2018. 10.31.2+ Executive Change-in-Control Severance Agreement, dated September 30, 2019 by and between Mueller Water Products and Steven S. Heinrichs. Incorporated by reference to Exhibit 10.30.2 to Mueller Water Products, Inc. Form 10-K (File no. 001-32892) filed on November 19, 2020). 10.31.3+ Letter Agreement, dated August 21, 2023, by and between Mueller Water Products, Inc. and Steven S. Heinrichs. Incorporated by reference to Exhibit 10.31.3 to Mueller Water Products, Inc. Form 10-K (File no. 000-32892) filed on December 14, 2023. 10.31.4+ Transition Grant Award Agreement, dated August 24, 2023, by and between Mueller Water Products, Inc. and Steven S. Heinrichs. Incorporated by reference to Exhibit 10.31.4 to Mueller Water Products, Inc. Form 10-K (File no. 000-32892) filed on December 14, 2023. 10.31.5+ L etter Ag reement, dated September 5, 2024, by and between Muel ler Water Products, Inc. and Steven S. Heinrichs. Inc orporated by reference to Exhibit 10.1 to M ueller Water Products, Inc. Form 8 -K (File no. 000-32892) filed on September 5, 2024. 10.32+ Mueller Water Products, Inc. Form of Performance Restricted Stock Unit Award Agreement (awards granted through fiscal 2022). Incorporated by reference to Exhibit 10.32 to Mueller Water Products, Inc. Form 10-K (File no. 001-32892) filed on November 19, 2021. 10.32.1+* M ueller Water Products , Inc. Form of Perfor mance Restricted Stock Unit Award Agreement - Market Units (awards granted for fiscal 2023). 10.32.2+* M ueller Water Products, Inc. Form of Performance Restricted Stock Unit Awar d Agreement - Market Units (awards granted after fiscal 2023). 10.32.3+* M ueller Water Products, Inc. Form of Performance Restricted Stoc k Unit Award Agreement - ROIC Units (awards grant ed for fiscal 2023). 10.32.4+* M ueller Water Products, Inc. Form of Perfor mance Restricted Stock Unit Award Agreement - ROIC Units (awards granted after fiscal 2023). 10.33+ Mueller Water Products, Inc. Form of Restricted Stock Unit Award Agreement (awards granted through fiscal 2023) . Incorporated by reference to Exhibit 10.33 to Mueller Water Products, Inc. Form 10-K (File no. 001-32892) filed on November 19, 2021. 10.33.1+* M ueller Water Products , Inc. Form of Restricted Stock Unit Award Agreement (awards granted after fisc al 2023). 48 Table of Contents Index to Financial Statements Exhibit no. Document 10.34+ Mueller Water Products, Inc. Form of Stock Option Grant Award Agreement (awards granted through fiscal 2023) . Incorporated by reference to Exhibit 10.34 to Mueller Water Products, Inc. Form 10-K (File no. 001-32892) filed on November 19, 2021. 10.34.1+* M ueller Water Products, Inc. Form of Stock Option Grant Award Agreement (awards granted after fiscal 2023). 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. DiSanto. Incorporated by reference to Exhibit 10.1 to Mueller Water Products, Inc. Form 8-K (File no 001-32892) filed on October 13, 2022. 10.36.1+ Letter Agreement, dated August 21, 2023, by and between Mueller Water Products, Inc. and Paul McAndrew. Incorporated by reference to Exhibit 10.36.1 to Mueller Water Products, Inc. Form 10-K (File no. 000-32892) filed on December 14, 2023. 10.36.2+ Employment Agreement, dated August 21, 2023, by and between Mueller Water Products, Inc. and Paul McAndrew. Incorporated by reference to Exhibit 10.36.2 to Mueller Water Products, Inc. Form 10-K (File no. 000-32892) filed on December 14, 2023. 10.36.3+ Transition Grant Award Agreement, dated August 24, 2023, by and between Mueller Water Products, Inc. and Paul McAndrew. Incorporated by reference to Exhibit 10.36.3 to Mueller Water Products, Inc. Form 10-K (File no. 000-32892) filed on December 14, 2023. 10.36.4+ Executive Change-in-Control Severance Agreement, dated August 21, 2023, by and between Mueller Water Products, Inc. and Paul McAndrew. Incorporated by reference to Exhibit 10.36.4 to Mueller Water Products, Inc. Form 10-K (File no. 000-32892) filed on December 14, 2023. 10.36.5+ Letter Agreement dated May 6, 2024, by and between Mueller Water Products, Inc, and Paul McAndrew. Incorporated by reference to Exhibit 10.3 to Mueller Water Products, Inc. Form 10-Q (File no. 000-32892) filed on May 7, 2024. 10.37+ M ueller Water Products, Inc. Form of Retention Award Agreement. Incorporated by reference to Exhibit 10.37 to Mueller Water Products, Inc. Form 10-K (File no. 000-32892) filed on December 14, 2023. 14.1+ Code of Business Conduct and Ethics for Mueller Water Products, Inc. Incorporated by reference to Exhibit 14.1 to Mueller Water Products, Inc. Form 10-K (File no. 000-32892) files on December 14, 2023. 19.1* Mueller Water Products, Inc. Insider Trading Policy. 21.1* Subsidiaries of Mueller Water Products, Inc. 23.1* Consent of Independent Registered Accounting Firm. 31.1* Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.2* Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32.1* Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 32.2* Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 97.1 Mueller Water Products, Inc. Incentive Compensation Recovery Policy. Incorporated by reference to Exhibit 97.1 to Mueller Water Products, Inc. Form 10-K (File no. 000-32892) filed on December 14, 2023. 101* The following financial information from the Annual Report on Form 10-K for the year ended September 30, 2024, formatted in XBRL (Extensible Business Reporting Language), (i) the Consolidated Balance Sheets , (ii) the Consolidated Statements of Operations , (iii) the Consolidated Statements of Comprehensive Income , (iv) the Consolidated Statements of Equity , (v) the Consolidated Statements of Cash Flows , and (vi) the Notes to Consolidated Financial Statements . 104* Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) + Management compensatory plan, contract or arrangement * Filed or furnished, as applicable, with this Annual Report 49 Table of Contents Index to Financial Statements SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Date: November 20, 2024 MUELLER WATER PRODUCTS, INC. By: /s/ Marietta Edmunds Zakas Name: Marietta Edmunds Zakas Title: Chief Executive Officer Pursuant to the requirements of the Securities Act of 1934, as amended, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Signature Title Date /s/ Marietta Edmunds Zakas Chief Executive Officer November 20, 2024 Marietta Edmunds Zakas /s/ Steven S. Heinrichs Chief Financial Officer and Chief Legal and Compliance Officer (Principal Financial Officer) November 20, 2024 Steven S. Heinrichs /s/ Suzanne G. Smith Vice President and Chief Accounting Officer (Principal Accounting Officer) November 20, 2024 Suzanne G. Smith /s/ Stephen C. Van Arsdell Non-Executive Chair of the Board of Directors November 20, 2024 Stephen C. Van Arsdell /s/ Shirley C. Franklin Director November 20, 2024 Shirley C. Franklin /s/ Christian A. Garcia Director November 20, 2024 Christian A. Garcia /s/ Thomas J. Hansen Director November 20, 2024 Thomas J. Hansen /s/ Brian C. Healy Director November 20, 2024 Brian C. Healy /s/ Christine Ortiz Director November 20, 2024 Christine Ortiz /s/ Jeffery S. Sharritts Director November 20, 2024 Jeffery S. Sharritts /s/ Brian L. Slobodow Director November 20, 2024 Brian L. Slobodow /s/ Lydia W. Thomas Director November 20, 2024 Lydia W. Thomas /s/ Karl Niclas Ytterdahl Director November 20, 2024 Karl Niclas Ytterdahl 50 Table of Contents Index to Financial Statements Report of Independent Registered Public Accounting Firm To the Stockholders and the Board of Directors of Mueller Water Products, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Mueller Water Products, Inc. and subsidiaries (the Company) as of September 30, 2024 and 2023, the related consolidated statements of operations, comprehensive income , equity and cash flows for each of the three years in the period ended September 30, 2024, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at September 30, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended September 30, 2024, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of September 30, 2024, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated November 20, 2024 expressed an unqualified opinion thereon. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit s . We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. 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. F- 1 Table of Contents Index to Financial Statements Valuation of Goodwill Description of the Matter At September 30, 2024 , the Company’s remaining goodwill balance was $ 80.7 million and is within the Water Management Solutions segment. As described in Note 5 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 test of the remaining goodwill and determined the reporting unit fair value 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 estimate of the reporting unit fair value using the discounted cash flow method was complex due to the significant estimation involved in determining the fair value of the reporting unit. In particular, the fair value was sensitive to certain assumptions used by management to develop the projected financial information, including the forecasted earnings before interest, depreciation and amortization (EBITDA) margins. This significant assumption is forward-looking and could be affected by future industry, market and economic conditions. 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 value of the reporting unit. This included testing controls over management’s review of the significant assumption described above. To test the estimated fair value of the reporting unit, we performed audit procedures that included, among others, assessing the methodologies used to estimate fair value, testing the significant assumption 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 management’s forecasted EBITDA margins used in the fair value estimate by comparing the assumption to historical results and available market information. We also involved our valuation specialists to evaluate the valuation methodologies utilized. In addition, we performed a sensitivity analysis on the forecasted EBITDA margins to evaluate the potential change in the fair value of the reporting unit that would result from changes in this assumption. /s/ Ernst & Young LLP We have served as the Company’s auditor since 2007. Atlanta, Georgia November 20, 2024 F- 2 Table of Contents Index to Financial Statements Report of Independent Registered Public Accounting Firm To the Stockholders and the Board of Directors of Mueller Water Products, Inc. Opinion on Internal Control over Financial Reporting We have audited Mueller Water Products, Inc. and subsidiaries’ internal control over financial reporting as of September 30, 2024, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Mueller Water Products, Inc. and subsidiaries (the Company) maintained, in all material respects, effective internal control over financial reporting as of September 30, 2024, based on the COSO criteria. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of September 30, 2024 and 2023, the related consolidated statements of operations, comprehensive income, equity and cash flows for each of the three years in the period ended September 30, 2024, and the related notes and our report dated November 20, 2024 expressed an unqualified opinion thereon. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ Ernst & Young LLP Atlanta, Georgia November 20, 2024 F- 3 Table of Contents Index to Financial Statements MUELLER WATER PRODUCTS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS September 30, 2024 2023 (in millions, except share amounts) Assets: Cash and cash equivalents $ 309.9 $ 160.3 Receivables, net of allowance for credit losses of $ 8.3 million and $ 7.3 million 208.9 217.1 Inventories, net 301.7 297.9 Other current assets 37.9 31.5 Total current assets 858.4 706.8 Property, plant and equipment, net 318.8 311.7 Intangible assets, net 309.7 334.0 Goodwill, net 80.7 93.7 Other noncurrent assets 68.3 58.8 Total assets $ 1,635.9 $ 1,505.0 Liabilities and stockholders’ equity: Current portion of long-term debt $ 0.8 $ 0.7 Accounts payable 109.9 102.9 Other current liabilities 147.3 115.2 Total current liabilities 258.0 218.8 Long-term debt 448.7 446.7 Deferred income taxes 55.4 73.8 Other noncurrent liabilities 63.7 54.2 Total liabilities 825.8 793.5 Commitments and contingencies (Note 15.) Preferred stock: par value $ 0.01 per share; 60,000,000 shares authorized, none outstanding at September 30, 2024 and 2023 — — Common stock: par value $ 0.01 per share; 600,000,000 shares authorized; 156,227,170 and 155,871,932 shares outstanding at September 30, 2024 and 2023, respectively 1.6 1.6 Additional paid-in capital 1,205.2 1,240.4 Accumulated deficit ( 365.9 ) ( 481.8 ) Accumulated other comprehensive loss ( 30.8 ) ( 48.7 ) Total stockholders’ equity 810.1 711.5 Total liabilities and stockholders’ equity $ 1,635.9 $ 1,505.0 The accompanying notes are an integral part of the consolidated financial statements. F- 4 Table of Contents Index to Financial Statements MUELLER WATER PRODUCTS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS Year ended September 30, 2024 2023 2022 (in millions, except per share amounts) Net sales $ 1,314.7 $ 1,275.7 $ 1,247.4 Cost of sales 855.7 896.2 883.1 Gross profit 459.0 379.5 364.3 Operating expenses: Selling, general and administrative 245.2 241.9 238.7 Strategic reorganization and other charges 15.8 10.2 7.2 Goodwill impairment 16.3 — 6.8 Total operating expenses 277.3 252.1 252.7 Operating income 181.7 127.4 111.6 Pension expense (benefit) other than service 4.0 3.7 ( 3.9 ) Interest expense, net 12.7 14.7 16.9 Other expense 1.6 — — Income before income taxes 163.4 109.0 98.6 Income tax expense 47.5 23.5 22.0 Net income $ 115.9 $ 85.5 $ 76.6 Net income per share: Basic $ 0.74 $ 0.55 $ 0.49 Diluted $ 0.74 $ 0.55 $ 0.48 Weighted average shares outstanding: Basic 155.9 156.3 157.4 Diluted 156.9 156.8 158.0 Dividends declared per share $ 0.256 $ 0.244 $ 0.232 The accompanying notes are an integral part of the consolidated financial statements. F- 5 Table of Contents Index to Financial Statements MUELLER WATER PRODUCTS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME Year ended September 30, 2024 2023 2022 (in millions) Net income $ 115.9 $ 85.5 $ 76.6 Other comprehensive income (loss), net of income tax: Pension actuarial amortization 8.8 7.8 ( 14.1 ) Foreign currency translation 9.1 ( 11.9 ) ( 25.5 ) Total other comprehensive income (loss) 17.9 ( 4.1 ) ( 39.6 ) Total comprehensive income $ 133.8 $ 81.4 $ 37.0 The accompanying notes are an integral part of the consolidated financial statements. F- 6 Table of Contents Index to Financial Statements MUELLER WATER PRODUCTS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EQUITY Common stock Additional paid-in capital Accumulated deficit Accumulated other comprehensive (loss) income Total (in millions) Balance at September 30, 2021 $ 1.6 $ 1,342.2 $ ( 643.9 ) $ ( 5.0 ) $ 694.9 Net income — — 76.6 — 76.6 Dividends declared — ( 36.5 ) — — ( 36.5 ) Stock-based compensation — 8.7 — — 8.7 Shares retained for employee taxes — ( 1.8 ) — — ( 1.8 ) Common stock issued — 2.0 — — 2.0 Stock repurchased under buyback program — ( 35.0 ) — — ( 35.0 ) Other comprehensive loss, net of tax — — — ( 39.6 ) ( 39.6 ) Balance at September 30, 2022 1.6 1,279.6 ( 567.3 ) ( 44.6 ) 669.3 Net income — — 85.5 — 85.5 Dividends declared — ( 38.1 ) — — ( 38.1 ) Stock-based compensation — 8.5 — — 8.5 Shares retained for employee taxes — ( 2.3 ) — — ( 2.3 ) Common stock issued — 2.7 — — 2.7 Stock repurchased under buyback program — ( 10.0 ) — — ( 10.0 ) Other comprehensive loss, net of tax — — — ( 4.1 ) ( 4.1 ) Balance at September 30, 2023 1.6 1,240.4 ( 481.8 ) ( 48.7 ) 711.5 Net income — — 115.9 — 115.9 Dividends declared — ( 39.9 ) — — ( 39.9 ) Stock-based compensation — 9.0 — — 9.0 Shares retained for employee taxes — ( 2.0 ) — — ( 2.0 ) Common stock issued — 7.7 — — 7.7 Stock repurchased under buyback program — ( 10.0 ) — — ( 10.0 ) Other comprehensive income, net of tax — — — 17.9 17.9 Balance at September 30, 2024 $ 1.6 $ 1,205.2 $ ( 365.9 ) $ ( 30.8 ) $ 810.1 The accompanying notes are an integral part of the consolidated financial statements. F- 7 Table of Contents Index to Financial Statements MUELLER WATER PRODUCTS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS Year ended September 30, 2024 2023 2022 (in millions) Operating activities: Net income $ 115.9 $ 85.5 $ 76.6 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 39.1 34.4 32.0 Amortization 27.1 28.1 28.5 Goodwill impairment 16.3 — 6.8 Non-cash asset impairment 1.8 — — Loss (gain) on sale of assets 0.5 ( 4.0 ) — Stock-based compensation 9.0 8.5 8.7 Pension cost (benefit) 4.6 4.4 ( 2.6 ) Deferred income taxes ( 21.5 ) ( 14.4 ) ( 3.5 ) Inventory reserves provision 4.5 0.4 1.6 Other, net 1.0 0.9 1.3 Changes in assets and liabilities, net of acquisitions: Receivables, net 8.4 10.9 ( 17.8 ) Inventories ( 8.0 ) ( 19.9 ) ( 98.3 ) Other assets ( 7.7 ) ( 3.3 ) 1.3 Accounts payable 6.8 ( 19.7 ) 32.2 Other current liabilities 31.7 ( 2.0 ) ( 8.5 ) Other noncurrent liabilities 9.3 ( 0.8 ) ( 6.0 ) Net cash provided by operating activities 238.8 109.0 52.3 Investing activities: Capital expenditures ( 47.4 ) ( 47.6 ) ( 54.7 ) Acquisitions, net of cash acquired — — ( 0.2 ) Proceeds from sales of assets 0.2 5.5 — Net cash used in investing activities ( 47.2 ) ( 42.1 ) ( 54.9 ) Financing activities: Dividends paid ( 39.9 ) ( 38.1 ) ( 36.5 ) Stock repurchased under buyback program ( 10.0 ) ( 10.0 ) ( 35.0 ) Employee taxes related to stock-based compensation ( 2.0 ) ( 2.3 ) ( 1.8 ) Common stock issued 7.7 2.7 2.0 Debt issuance costs ( 0.9 ) — — Payments for finance lease obligations ( 0.9 ) ( 1.1 ) ( 0.7 ) Net cash used in financing activities ( 46.0 ) ( 48.8 ) ( 72.0 ) Effect of currency exchange rate changes on cash 4.0 ( 4.3 ) ( 6.4 ) Net change in cash and cash equivalents 149.6 13.8 ( 81.0 ) Cash and cash equivalents at beginning of year 160.3 146.5 227.5 Cash and cash equivalents at end of year $ 309.9 $ 160.3 $ 146.5 Supplemental cash flow information: Cash paid for interest $ 10.0 $ 15.1 $ 19.2 Cash paid for income taxes $ 74.4 $ 37.7 $ 26.9 The accompanying notes are an integral part of the consolidated financial statements. F- 8 Table of Contents Index to Financial Statements MUELLER WATER PRODUCTS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 1. Organization Mueller Water Products, Inc., a Delaware corporation, together with its consolidated subsidiaries, operates in two business segments: Water Flow Solutions and Water Management Solutions. Water Flow Solutions’ portfolio includes iron gate valves, specialty valves and service brass products. Water Management Solutions’ portfolio includes fire hydrants, repair and installation, natural gas, metering, leak detection, as well as pressure management and control products and solutions. The “Company,” “we,” “us” and “our” refer to Mueller Water Products, Inc. and its subsidiaries. With regard to the Company’s segments, “we,” “us” and “our” may also refer to the segment being discussed. We have approximately 3,400 employees globally, of which approximately 42 % of our United States workers are covered by collective bargaining agreements. Our consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”), which require us to make certain estimates and assumptions that affect the reported amounts of assets, liabilities, sales and expenses and the disclosure of contingent assets and liabilities for the reporting periods. Actual results could differ from those estimates. All significant intercompany balances and transactions have been eliminated. Unless the context indicates otherwise, whenever we refer to a particular year, we mean our fiscal year ended or ending September 30 in that particular calendar year. New Markets Tax Credit Program. On December 22, 2020, we entered into a financing transaction with Wells Fargo Community Investment Holdings, LLC (“Wells Fargo”) related to our brass foundry construction project in Decatur, Illinois under a qualified New Markets Tax Credit program (“NMTC”). The NMTC is a federal program intended to encourage capital investment in qualified lower income communities. Under the NMTC, investors claim federal income tax credits over a period of seven years in connection with qualified investments in the equity of community development entities (“CDE”s), which are privately managed investment institutions that are certified to make qualified low-income community investments, such as in our foundry project. Under the NMTC, Wells Fargo contributed capital of $ 4.8 million to an investment fund and we loaned $ 12.2 million to the fund. Wells Fargo is entitled to the associated tax credits, which are subject to 100% recapture if we do not comply with various regulations and contractual provisions surrounding the foundry project. We have indemnified Wells Fargo for any loss or recapture of tax credits related to the transaction until the seven-year period elapses. We do not anticipate any credit recaptures will be required in connection with this arrangement. The investment fund contributed $ 16.5 million cash for a 99.99% stake in a joint venture (“Sub-CDE”) with a CDE. The Sub-CDE then loaned $ 16.2 million to us, with the use of the loan proceeds restricted to foundry project expenditures. This transaction also includes a put/call provision under which we may be obligated or entitled to repurchase Wells Fargo’s interest in the investment fund. We believe that Wells Fargo will exercise its put option in December 2027 for nominal consideration, resulting in our becoming the sole owner of the investment fund, cancelling the related loans, and recognizing an estimated gain of $ 3.9 million. We determined that the investment fund and the Sub-CDE are variable interest entities (“VIEs”) and that we are the primary beneficiary of the VIEs. The ongoing activities of the VIEs, namely collecting and remitting interest and fees and administering NMTC compliance, were contemplated in the initial design of the transaction and are not expected to significantly affect economic performance throughout the life of the VIEs. Additionally, we are obligated to deliver tax benefits and provide various other guarantees to Wells Fargo and to absorb the losses of the VIEs. Wells Fargo does not have a material interest in the underlying economics of the project. Consequently, we have included the financial statements of the VIEs in our consolidated financial statements. Intercompany transactions between us and the VIEs have been eliminated in consolidation. Wells Fargo’s contribution to the investment fund is consolidated in our financial statements within Other noncurrent liabilities as a result of its redemption features. F- 9 Table of Contents Index to Financial Statements Direct costs associated with Wells Fargo’s capital contribution were netted against the recorded proceeds, resulting in a net cash contribution of $ 3.9 million. Other direct costs associated with the transaction were capitalized and are being recognized as interest expense over the seven-year tax credit period. Incremental costs to maintain the structure during the compliance period are expensed as incurred and were immaterial to the consolidated financial statements. Note 2. Summary of Significant Accounting Policies Cash and Cash Equivalents. All highly liquid investments with maturities of 90 days or less when purchased are classified as cash equivalents. Where there is no right of offset against cash balances, outstanding checks are included in Accounts payable. Receivables, net. Receivables are amounts due from customers. To reduce credit risk, credit investigations are generally performed prior to accepting orders from new customers and, when necessary, we require letters of credit, bonds or other instruments to ensure payment. We present trade receivables net of customer discounts and an allowance for credit losses. Our consolidated statements of operations reflect the measurement of credit losses for newly recognized trade receivables, as well as the expected increases or decreases of expected credit losses that have taken place during the period. When we determine a specific trade receivable will not be collected, we charge off the uncollectible amount against the allowance. Our periodic evaluations of expected credit losses are based upon our judgments regarding prior collection experience, specific customer creditworthiness, other current conditions, and forecasts of current economic trends within the industries we serve that may affect the collectability of the reported amounts. Significantly weaker than anticipated industry or economic conditions could impact our customers’ ability to pay such that actual credit losses may be greater than the amounts provided for in this allowance. The following table summarizes information concerning our allowance for credit losses: 2024 2023 2022 (in millions) Balance at beginning of year $ 7.3 $ 5.6 $ 3.5 Provision charged to expense 2.7 1.9 2.5 Write-offs and other ( 1.7 ) ( 0.2 ) ( 0.4 ) Balance at end of year $ 8.3 $ 7.3 $ 5.6 Inventories, net. Inventories are recorded at the lower of first-in, first-out method cost or estimated net realizable value. We evaluate our inventory in terms of excess and obsolete exposures. This evaluation includes such factors as anticipated usage, inventory turnover, inventory levels and ultimate product sales value. Inventory cost includes an overhead component that is affected by levels of production and actual costs incurred. We periodically evaluate the effects of production levels and costs capitalized as part of Inventories, net. The following table summarizes information concerning our inventory valuation reserves: 2024 2023 2022 (in millions) Balance at beginning of year $ 16.8 $ 16.5 $ 14.8 Provision charged to expense 13.3 3.8 1.8 Inventory disposed ( 8.8 ) ( 2.5 ) ( 1.4 ) Other 0.1 ( 1.0 ) 1.3 Balance at end of year $ 21.4 $ 16.8 $ 16.5 Maintenance and repair supplies and tooling. Maintenance and repair supplies and tooling is included in Other current assets and Other noncurrent assets. Costs for perishable tools and maintenance items are expensed when put into service. Costs for more durable items are amortized over their estimated useful lives, ranging from 3 to 10 years. Property, Plant and Equipment, net. Property, plant and equipment is recorded at cost, less accumulated depreciation. Depreciation is recorded using the straight-line method over the estimated useful lives of the assets once the asset is ready for its intended use and placed in service. Estimated useful lives are 10 to 20 years for land improvements, 10 to 40 years for F- 10 Table of Contents Index to Financial Statements buildings and 3 to 20 years for machinery and equipment. Leasehold improvements and capitalized leases are depreciated using the straight-line method over the lesser of the useful life of the asset or the remaining lease term. Gains and losses upon disposition are reflected in operating results in the period of disposition. Direct internal and external costs to implement computer systems and software for internal use are capitalized. Capitalized costs are depreciated over the estimated useful life of the system or software, generally six years , beginning when the system or software is ready for its intended use. Liabilities are recognized at fair value for asset retirement obligations related to plant and landfill closures in the period in which they are reasonably estimable and the carrying amounts of the related long-lived assets are correspondingly adjusted. Over time, the liabilities are accreted to their estimated future values. At September 30, 2024, and 2023, asset retirement obligations were $ 4.2 million. Leases. Refer to Note 4. for information regarding our leases. Accounting for the Impairment of Long-Lived Assets. We test indefinite-lived intangible assets and goodwill for impairment annually or more frequently if events or circumstances indicate impairment is possible. We perform our annual impairment testing at September 1. We amortize finite-lived intangible assets over their respective estimated useful lives and review for impairment if events or circumstances indicate impairment is possible. Refer to Note 5. for information regarding our goodwill impairment testing. Workers’ Compensation. Our exposure to workers’ compensation claims is generally limited to $ 0.8 million per incident. Liabilities, including those related to claims incurred but not reported, are recorded principally using periodic valuations based on discounted future expected payments and using historical data combined with insurance industry data when historical data is limited. Our gross workers’ compensation liabilities were $ 10.4 million as of September 30, 2024, and we expect to recover $ 6.5 million in insurance and reimbursements which is included as a receivable in Other current assets and Other noncurrent assets. As of September 30, 2023, our gross worker’s compensation liability was $ 9.9 million and our insurance receivable was $ 4.6 million. Warranty Costs. We accrue for costs to repair and/or replace products pursuant to the terms of our assurance warranties. These costs include labor, materials, equipment, freight and reasonable overhead costs. 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 revise our warranty accruals as necessary. Factors considered 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. Activity in our accrued warranty, reported within Other current liabilities and Other noncurrent liabilities, is presented below: 2024 2023 2022 (in millions) Balance at beginning of year $ 15.7 $ 10.7 $ 9.7 Warranty expense 13.0 14.8 9.5 Warranty provision ( 5.1 ) ( 9.8 ) ( 8.5 ) Balance at end of year $ 23.6 $ 15.7 $ 10.7 Deferred Financing Costs. Costs to obtain debt are deferred and amortized to expense over the term of the underlying debt agreement. When an amendment to the underlying debt or a prepayment occurs, the remaining cost and the period over which the financing costs are amortized are reassessed. 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 such as our asset-based lending agreement (“ABL”), and in other instances, such as our NMTC transaction, are included in Other noncurrent assets consistent with the term of the instrument. Deferred financing costs of $ 4.5 million at September 30, 2024, include: $ 3.2 million related to the 4.0% Senior Unsecured Notes (“4.0% Senior Notes”), $ 1.1 million related to the ABL and $ 0.2 million related to the NMTC transaction which are amortized on a straight-line basis. These amounts are amortized over the remaining term of the respective debt using the effective interest method or on a straight-line basis. Refer to Note 7. for disclosures related to our borrowing arrangements. F- 11 Table of Contents Index to Financial Statements 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 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. We record tax benefits for positions that management believes are more likely than not of being sustained under audit based solely on the technical merits of the associated tax position. The amount of tax benefit recognized for any position that meets the more-likely-than-not threshold is the largest amount of the tax benefit that we believe is greater than 50 % likely of being realized. The Tax Cuts and Jobs Act (“Act”) subjects us to tax on global intangible low-taxed income (“GILTI”) earned by certain of our foreign subsidiaries. The Act states that we can make an accounting policy election to either recognize deferred taxes for temporary differences expected to reverse as GILTI in future years or provide for the tax expense related to GILTI in the year the tax is incurred. We have elected to recognize the tax on GILTI in the period the tax is incurred. Environmental Expenditures. We capitalize environmental expenditures that increase the life or efficiency of noncurrent assets or that reduce or prevent environmental contamination. 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 for certain environmental liabilities that existed as of August 16, 1999 under an agreement with a predecessor to Tyco. Refer to Note 15. for additional disclosures regarding our environmental liabilities. Revenue Recognition. Refer to Note 3. for disclosures regarding our revenues. Stock-based Compensation. 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 10. for more information regarding our stock-based compensation. Research and Development. Research and development costs are expensed as incurred. Advertising. Advertising costs are expensed as incurred. Translation of Foreign Currency. Foreign reporting entities are remeasured into local currencies with the effect reflected in the consolidated statements of operations. 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 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. Recently Adopted Accounting Pronouncements In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2019-12, "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes” (“ASU 2019-12”). ASU 2019-12 simplifies the accounting for income taxes by clarifying and amending existing guidance related to the recognition of franchise tax, the evaluation of a step up in the tax basis of goodwill, and the effects of enacted changes in tax laws or rates in the effective tax rate computation, among other clarifications. 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 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. 2020-04, "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting" (“ASU 2020-04”). ASU 2020-04 provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. 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; however, the standard may 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. F- 12 Table of Contents Index to Financial Statements Accounting Pronouncements Not Yet Adopted In November 2023, the FASB issued ASU No. 2023-07 “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”). ASU 2023-07 requires public business entities that disclose information on their reportable segments to provide additional information on their significant expense categories and “other segment items,” which represent the difference between segment revenue less significant segment expense and a segment’s measure of profit or loss. A description of “other segment items” is also required. Further, certain segment related disclosures that were limited to annual disclosure are now required at interim periods. Finally, public business entities are required to disclose the title and position of their Chief Operating Decision Maker (“CODM”) and explain how the CODM uses the reported measures of profit or loss to assess segment performance. This guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Upon adoption, ASU 2023-07 should be applied retrospectively to all prior periods. We do not expect ASU 2023-07 to have a material impact on our financial statement and related disclosures. In December 2023, the FASB issued ASU No. 2023-09 “ Income Taxes (Topic 740): Improvements to Tax Disclosures” (“ASU 2023-09”). ASU 2023-09 requires public business entities to disclose a tabular rate reconciliation utilizing percentages and reporting currency in specific categories with certain reconciling items at or above the specified 5% threshold to improve the transparency and comparability of disclosures. Additionally, entities are required to disclose the year-to-date amount of income taxes paid, net of refunds received, disaggregated by federal (national), state, and foreign jurisdictions. Disclosure of all individual jurisdictions where income taxes paid, net of refunds received, is 5% or more of the total is also required. This guidance is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. Upon adoption, ASU 2023-09 should be applied on a prospective basis while retrospective application is permitted. We do not expect ASU 2023-09 to have a material impact on our financial statements and related disclosures. In November 2024, the FASB issued ASU No. 2024-03 “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses” (“ASU 2024-03”). ASU 2024-03 requires public business entities to disclose disaggregated information about certain income statement expense line items. These expenses include purchases of inventory, employee compensation, depreciation and intangible asset amortization for each income statement line item that contains these expenses. Additionally, specified expenses, gains or losses that are currently required to be disclosed must now be included in the disaggregated income statement expense line item disclosures and any remaining amounts should be described qualitatively. There is also a requirement to separately disclose total selling expenses and provide a definition of those expenses. This guidance is effective for effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Upon adoption, ASU 2024-03 should be applied on a prospective basis while retrospective application is permitted. We are currently evaluating the impact ASU 2024-03 will have on our financial statements and related disclosures. Recent U.S. Securities and Exchange Commission (“SEC”) Final Rules In March 2024, the SEC issued final rules on the enhancement and standardization of climate-related disclosures. The rules require registrants to disclose certain climate-related information, including Scope 1 and Scope 2 greenhouse gas emissions and other climate-related topics, in registration statements and annual reports. Additionally, the rules require disclosure in the notes to the financial statements of the effects of severe weather events and other natural conditions, subject to materiality thresholds. The rules are effective on a phased-in timeline in fiscal years beginning in 2025. In April 2024, due to legal challenges to the rule, the SEC voluntarily stayed implementation of the final rules. We are currently evaluating the impact the rules may have on our disclosures. F- 13 Table of Contents Index to Financial Statements Note 3. Revenue from Contracts with Customers We recognize revenue when control of promised products or services is transferred to our customers, in amounts that reflect the consideration to which we expect to be entitled in exchange for those products or services. We account for a contract when it has approval and commitment from both parties, the rights of the parties are identified, the payment terms are identified, the contract has commercial substance and collectability of consideration is probable. We determine the appropriate revenue recognition for our contracts with customers by analyzing the type, terms and conditions of each customer contract or arrangement. Disaggregation of Revenue Refer to Note 14. for disaggregation of our revenues from contracts with customers by reportable segment and by geographical region, which we believe best depicts how the nature, amount, timing and certainty of our revenue and cash flows are affected by economic factors. Geographical region represents the location of the customer. Contract Asset and Liability Balances Differences in the timing of revenue recognition, billing and cash collection result in customer receivables, advance payments and billings in excess of revenue recognized. Customer receivables include amounts billed and currently due from customers as well as unbilled amounts including contract assets. Amounts are billed in accordance with contractual terms and unbilled amounts arise when the timing of billing differs from the timing of revenue recognized. Advance payments and billings in excess of revenue are recognized and recorded as deferred revenue and classified as current or noncurrent based on the timing of when we expect to recognize the related revenue. We include current deferred revenue and noncurrent deferred revenue within Other current liabilities and Other noncurrent liabilities, respectively, in the accompanying consolidated balance sheets. Refer to Note 11. for current and noncurrent amounts. Deferred revenue represents contract liabilities and is 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. Deferred revenue primarily consists of amounts related to monitoring, leak detection, software and hosting services. During fiscal year 2024, we recognized approximately $ 8.6 million of revenue that was previously deferred and we recorded approximately $ 12.2 million of additional deferred revenue. We estimate that currently deferred revenue will be recognized as follows: $ 7.1 million in 2025, $ 1.4 million in 2026, $ 1.2 million in 2027, $ 1.1 million in 2028, $ 0.6 million in 2029 and $ 1.4 million thereafter. The table below represents the balances of our customer receivables and deferred revenue: September 30, 2024 2023 (in millions) Billed receivables $ 212.7 $ 218.1 Unbilled receivables 4.5 6.3 Gross customer receivables 217.2 224.4 Allowance for credit losses ( 8.3 ) ( 7.3 ) Receivables, net $ 208.9 $ 217.1 Deferred revenue $ 12.8 $ 9.2 Performance Obligations A performance obligation is a promise in a contract to transfer a distinct good or service to a customer. Our performance obligations generally are satisfied at a point in time as related to sales of equipment and products and over time as related to our software hosting and leak detection monitoring services. Performance obligations are supported by customer contracts which provide frameworks for the nature of the distinct products or services. The transaction price is adjusted for our estimate of variable consideration which may include discounts and rebates. To estimate variable consideration, we apply the expected value or the most likely amount method, based on whichever method more appropriately predicts the amount of consideration we expect to receive. The method applied is typically based on historical experience and known trends. We constrain the amounts of variable consideration that are included in the transaction price to the extent that it is probable that a significant F- 14 Table of Contents Index to Financial Statements reversal in the amount of cumulative revenue recognized will not occur or when uncertainties regarding the variable consideration are resolved. We exclude from the measurement of the transaction price all taxes assessed by a governmental authority. We do 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 % of our revenues in fiscal years 2024, 2023, and 2022. The revenues recognized at a point in time related to the sale of our products and services are recognized when the obligations of the contract terms are satisfied, which is when the customer is able to direct the use of and obtain substantially all of the benefits from the product or service, which generally occurs upon shipment when control of the product or service transfers to the customer. Revenues from products and services transferred to customers over time represented 2 % of our revenues in fiscal years 2024, 2023, and 2022. We offer assurance warranties to our customers that the products provided will function as intended and comply with any agreed-upon specifications. These cannot be purchased separately. On limited products, we offer extended warranties which may be purchased separately. 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 to Cost of sales within our consolidated statements of operations at the time revenue is recognized. We incur certain incremental costs to obtain a contract, which primarily relate to incremental sales commissions. As the expected benefit associated with these incremental costs is generally one year or less based on the nature of the product sold and benefits received, we have applied the practical expedient to expense them as incurred and therefore do not capitalize the related costs. Our commissions are paid based on orders or shipments, and we reserve the right to claw back any commissions in the event of product returns or lost collections. Note 4. Leases Presentation of Leases We lease certain office, warehouse, manufacturing, distribution, and research and development facilities and equipment under operating leases. Our leases have remaining lease terms of up to nine years . The terms and conditions of our leases may include options to extend or early terminate the lease. These factors are considered at lease inception or at the time of the amendment and included in the lease term when these options are reasonably certain of exercise. We determine if a contract is, or contains, a lease at inception by evaluating whether the contract conveys the right to control the use of an identified asset. For all classes of leased assets, we have elected the practical expedient to account for any non-lease components in the contract together with the related lease component in the same unit of account. Right-of-Use (“ROU”) assets and lease liabilities are recognized in our consolidated balance sheets at the lease commencement date based on the present value of the lease payments over the lease term. Additionally, ROU assets include any lease payments made at or before the commencement date, as well as any initial direct costs incurred, and are reduced by any lease incentives received. As most of our operating leases do not provide an implicit rate, we apply our incremental borrowing rate to determine the present value of our remaining lease payments. Our incremental borrowing rate is determined based on information available at the lease commencement date. For all classes of leased assets, we have applied an accounting policy election to exclude short-term leases from recognition in our consolidated balance sheets. A short-term lease has a term of 12 months or less at the commencement date and does not include a purchase or extension option that is reasonably certain of exercise. We recognize short-term lease cost in our consolidated statements of operations on a straight-line basis over the lease term. Our short-term lease cost for the years ended September 30, 2024, 2023, and 2022 and short-term lease commitments at September 30, 2024, and 2023 are immaterial. F- 15 Table of Contents Index to Financial Statements We have certain lease contracts with terms and conditions that include variable payments based on changes in facts or circumstances occurring after the commencement date. These variable lease payments are recognized in our consolidated statements of operations as the obligation is incurred. At September 30, 2024, any legally-binding minimum lease payments for operating leases signed but not yet commenced, subleases, leases that impose significant restrictions or covenants, were immaterial. We did not have any related-party leases or sale-leaseback arrangements as of September 30, 2024, or September 30, 2023. The components of lease cost are presented below. Year ended September 30, 2024 2023 2022 (in millions) Operating lease cost $ 6.9 $ 6.3 $ 5.8 Finance lease cost 0.9 1.1 1.3 Total lease cost $ 7.8 $ 7.4 $ 7.1 Supplemental cash flow information related to leases is presented below. Year ended September 30, 2024 2023 (in millions) Operating cash used for operating leases $ 7.0 $ 6.4 Financing cash used for finance leases $ 0.9 $ 1.1 Supplemental information regarding our lease assets and liabilities is below. September 30, 2024 2023 (in millions) Right-of-use assets: Operating leases Other noncurrent assets $ 26.9 $ 23.6 Finance leases Plant, property and equipment 2.7 1.2 Total right-of-use assets $ 29.6 $ 24.8 Lease liabilities: Operating leases - current Other current liabilities $ 5.5 $ 4.9 Operating leases - noncurrent Other noncurrent liabilities 22.5 19.8 Finance leases - current Current portion of long-term debt 0.8 0.7 Finance leases - noncurrent Long-term debt 1.9 0.6 Total lease liabilities $ 30.7 $ 26.0 F- 16 Table of Contents Index to Financial Statements Supplemental information related to lease terms and discount rates are presented below. Year ended September 30, 2024 2023 Weighted-average remaining lease term (years): Operating leases 6.14 5.81 Finance leases 3.64 2.24 Weighted-average interest rate: Operating leases 5.48 % 5.51 % Finance leases 7.10 % 4.69 % Scheduled maturities for our lease liabilities at September 30, 2024, are as follows: Operating Leases Finance Leases (in millions) 2025 $ 6.8 $ 1.0 2026 6.3 0.8 2027 5.5 0.6 2028 3.9 0.6 2029 2.3 0.1 Thereafter 8.1 — Total lease payments 32.9 3.1 Less: imputed interest ( 4.9 ) ( 0.4 ) Present value of lease liabilities $ 28.0 $ 2.7 F- 17 Table of Contents Index to Financial Statements Note 5. Goodwill and Intangible Assets Goodwill Goodwill is tested for impairment at the reporting unit level (operating segment or one level below an operating segment) on an annual basis on September 1 of each fiscal year or more frequently 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 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, market and/or cost approaches. The income approach, which is a level 3 fair value measurement, is based on projected debt-free cash flow estimates which are discounted to the present value using discount rates that consider the timing and risk of those cash flows. The market approach is based on the guideline public company method, which uses market multiples to value our reporting units as applicable. The cost approach is based on the net aggregate value of the reporting unit’s underlying assets. We weight the approaches in a manner considering the risks of the underlying cash flows. The key assumptions used in estimating the fair value of our reporting units utilizing the income approach include management's best estimate of revenue, earnings before interest, taxes, depreciation and amortization (“EBITDA”) margin, and discount rate. The key assumptions used in estimating the fair value of our reporting units utilizing the market approach include revenue multiples, and EBITDA multiples. 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. We performed our annual impairment testing at September 1, 2024. The results of the testing indicated that the carrying value of a reporting unit within Water Management Solutions exceeded the fair value primarily due to lower forecasted revenues and profitability based on a change in the forecasted product portfolio. Such change occurred in the fourth quarter of 2024. As a result, we recognized an impairment charge of $ 16.3 million during the fiscal year ended September 30, 2024. Indefinite-lived Intangible Assets Indefinite-lived intangible assets are tested for impairment on an annual basis on September 1 of each fiscal year or more frequently if events or circumstances indicate that it is more likely than not that the asset is impaired. We test our trade name indefinite-lived intangible assets for impairment using a “royalty savings method”, which is an income approach using a variation of the discounted cash flow method. This method estimates a fair value by calculating an estimated discounted future cash flow stream from the hypothetical licensing of the indefinite-lived intangible assets. If the estimated fair value exceeds the carrying value, no impairment is indicated. If the estimated fair value is less than the carrying value, impairment is indicated. This analysis is dependent on management’s best estimates of future revenue and the selection of reasonable discount rates and hypothetical royalty rates. We performed our annual impairment testing at September 1, 2024 and recorded an impairment charge of $ 0.4 million related to trade names within Water Management Solutions. The impairment was primarily as a result of lower forecasted cash flow streams from a lower hypothetical royalty rate and a change in the forecasted revenues from the product portfolio associated with certain trade names. Intangible Assets 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 six-year estimated useful life of the software, beginning when the software is ready for its intended use. At September 30, 2024, the remaining weighted-average amortization period for this software was 4.2 years. Amortization expense related to such software assets was $ 2.6 million in 2024 and $ 2.9 million in 2023 and 2022. Amortization expense for each of the next five years is expected to be $ 2.3 million in 2025, $ 1.9 million in 2026, $ 1.5 million in 2027, $ 1.1 million in 2028, and $ 0.7 million in 2029. At September 30, 2024, the remaining weighted-average amortization period for business combination-related finite-lived customer relationships and technology intangible assets were 7.3 years and 7.1 years, respectively. Amortization expense related to these assets was $ 24.9 million, $ 25.2 million and $ 25.5 million for 2024, 2023 and 2022, respectively. Amortization expense for each of the next five years is scheduled to be $ 5.3 million in 2025, $ 5.0 million in 2026, $ 4.8 million in 2027 and 2028 and $ 4.0 million in 2029. F- 18 Table of Contents Index to Financial Statements Intangible assets are presented below. September 30, 2024 2023 (in millions) Capitalized internal-use software: Cost $ 40.1 $ 38.1 Accumulated amortization ( 32.4 ) ( 29.7 ) Capitalized internal-use software, net $ 7.7 $ 8.4 Business combination-related: Cost: Finite-lived intangible assets: Technology $ 118.6 $ 119.6 Customer relationships and other 371.5 371.5 Indefinite-lived intangible assets: Trade names and trademarks 272.5 272.6 $ 762.6 $ 763.7 Accumulated amortization: Technology $ ( 97.9 ) $ ( 95.3 ) Customer relationships and other ( 362.7 ) ( 342.8 ) ( 460.6 ) ( 438.1 ) Business combination-related intangible assets, net 302.0 325.6 Intangible assets, net $ 309.7 $ 334.0 Goodwill As of September 30, 2024 , 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, 2024, and 2023 were as follows, in millions: Balance at September 30, 2022: Goodwill $ 822.7 Accumulated impairment ( 724.1 ) Net goodwill 98.6 2023 Activity: Change in foreign currency exchange rates ( 4.9 ) Balance at September 30, 2023: Goodwill 817.8 Accumulated impairment ( 724.1 ) Net goodwill 93.7 2024 Activity: Goodwill impairment ( 16.3 ) Change in foreign currency exchange rates 3.3 Balance at September 30, 2024: Goodwill 821.1 Accumulated impairment ( 740.4 ) Net goodwill $ 80.7 F- 19 Table of Contents Index to Financial Statements Note 6. Income Taxes The components of income before income taxes are presented below. 2024 2023 2022 (in millions) U.S. $ 176.1 $ 83.2 $ 81.6 Non-U.S. ( 12.7 ) 25.8 17.0 Income before income taxes $ 163.4 $ 109.0 $ 98.6 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, 2024, the remaining balance of our transition obligation is $ 3.1 million, which will be paid in full by January 2026, as provided in the Act. Other than for Krausz’s investment in its United States subsidiary and other anticipated distributions which result cumulatively in immaterial income tax, we have not recorded income taxes for unrepatriated foreign earnings that may be subject to withholding tax or any outside cost basis differences inherent in our foreign subsidiaries, as these amounts continue to be indefinitely reinvested in foreign operations. We have a foreign tax credit carryforward of $ 4.7 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 Water Products, Inc. are closed for years prior to our fiscal year 2021. 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 business. Our state income tax returns are generally closed for years prior to our fiscal year 2021, except with regard to our state net operating loss carryforwards. Our Canadian income tax returns are generally closed for years prior to our fiscal year 2017. We do not have any material unpaid assessments . The components of income tax expense are as follows: 2024 2023 2022 (in millions) Current: U.S. federal $ 53.4 $ 28.4 $ 19.5 U.S. state and local 14.8 6.0 4.3 Non-U.S. 0.8 3.5 1.7 Total current income tax expense 69.0 37.9 25.5 Deferred: U.S. federal ( 20.7 ) ( 11.2 ) ( 3.4 ) U.S. state and local ( 1.1 ) ( 3.3 ) ( 0.9 ) Non-U.S. 0.3 0.1 0.8 Total deferred income tax benefit ( 21.5 ) ( 14.4 ) ( 3.5 ) Income tax expense $ 47.5 $ 23.5 $ 22.0 F- 20 Table of Contents Index to Financial Statements The reconciliation between income tax expense at the United States federal statutory income tax rate and reported income tax expense is presented below. 2024 2023 2022 (in millions) Expense at U.S. federal statutory income tax rate $ 34.3 $ 22.9 $ 20.7 Adjustments to reconcile to income tax expense: State income taxes, net of federal benefit 9.6 1.5 2.6 Uncertain tax positions ( 2.3 ) 0.5 — Nondeductible compensation 2.1 1.8 0.9 Nondeductible expenses, other than compensation 0.6 0.9 0.8 Valuation allowances 3.0 ( 0.6 ) 1.0 Basis difference in foreign investment 0.1 0.1 0.1 Foreign income taxes ( 0.8 ) ( 2.0 ) ( 1.5 ) Excess tax (benefit) deficit related to stock compensation ( 0.6 ) 0.3 ( 0.1 ) Tax credits ( 3.3 ) ( 3.5 ) ( 2.3 ) Goodwill impairment 1.9 — — Other 2.9 1.6 ( 0.2 ) Income tax expense $ 47.5 $ 23.5 $ 22.0 The following table summarizes information concerning our gross unrecognized tax benefits. 2024 2023 (in millions) Balance at beginning of year $ 5.0 $ 4.7 Increase related to current year positions 0.8 1.0 Decrease as a result of statute of limitations lapse ( 2.8 ) ( 0.6 ) Foreign currency exchange losses — ( 0.1 ) Balance at end of year $ 3.0 $ 5.0 Substantially all unrecognized tax benefits would, if recognized, impact the effective tax rate. We recognize interest related to uncertain tax positions as interest expense and recognize any penalties incurred as a component of Selling, general and administrative expense within our consolidated statements of operations. At September 30, 2024, and 2023, we had $ 0.4 million and $ 0.8 million, respectively, of accrued interest expense related to unrecognized tax benefits. F- 21 Table of Contents Index to Financial Statements Deferred income tax balances are presented below. September 30, 2024 2023 (in millions) Deferred income tax assets: Accrued expenses $ 19.3 $ 10.8 Lease liabilities 7.5 6.4 Inventories 5.0 7.2 State net operating losses 1.9 1.9 Net operating losses and credit carryovers 15.9 16.2 Stock-based compensation 4.3 3.9 Section 174 research and development capitalization 23.1 15.6 Other 5.3 4.4 Total deferred income tax assets 82.3 66.4 Valuation allowance ( 18.0 ) ( 15.1 ) Total deferred income tax assets, net of valuation allowance 64.3 51.3 Deferred income tax liabilities: Intangible assets 68.2 74.5 Lease assets 6.7 5.9 Basis difference in foreign investment 6.0 5.9 Pension 3.0 1.3 Property, plant and equipment 34.7 36.6 Other 1.1 0.9 Total deferred income tax liabilities 119.7 125.1 Net deferred income tax liabilities $ 55.4 $ 73.8 We evaluate the need for a valuation allowance against our deferred tax assets each quarter considering results to date, projections of taxable income, tax planning strategies and reversing taxable temporary differences. Our state net operating loss carryforwards, which expire between our fiscal years 2025 and 2027, remain available to offset future taxable earnings; however, we currently do not expect full utilization of certain state net operating loss carryforwards before their expiration. Consequently, we have recorded a valuation allowance against the deferred tax asset which is reflected in the table above. Note 7. Borrowing Arrangements The components of our long-term debt are as follows: September 30, 2024 2023 (in millions) 4.0% Senior Notes $ 450.0 $ 450.0 Finance leases 2.7 1.3 Total debt 452.7 451.3 Less deferred financing costs 3.2 3.9 Less current portion of long-term debt 0.8 0.7 Long-term debt $ 448.7 $ 446.7 The scheduled maturities of all borrowings outstanding at September 30, 2024, are $ 0.8 million in 2025, $ 0.7 million in 2026, $ 0.6 million in 2027, $ 0.5 million in 2028, and $ 450.1 million in 2029. F- 22 Table of Contents Index to Financial Statements ABL Agreement . Our asset-based lending agreement, as amended, (“ABL”) is provided by a syndicate of banking institutions and consists of a revolving credit facility for up to $ 175.0 million in borrowing capacity that matures the earlier of (a) March 16, 2029, which is ninety-one days prior to the stated maturity date of our 4.0 % Senior Notes if the Notes are still outstanding on that date or (b) March 28, 2029. The ABL includes the ability to borrow up to $ 25.0 million of swing line loans and up to $ 60.0 million of letters of credit. The ABL permits us to increase the size of the credit facility by an additional $ 150.0 million in certain circumstances subject to adequate borrowing base availability. In December 2023, we obtained a waiver under our ABL (“ABL Waiver”) to provide for additional time associated with certain reporting requirements that were delayed as a result of the cybersecurity incident announced on October 28, 2023. Under the ABL Waiver, the maximum aggregate amount of borrowings and other credit extensions under the ABL was limited to $ 50.0 million at any time outstanding until all of the required reports were delivered. During our first fiscal quarter of 2024, we delivered the required reports, and on February 6, 2024, the ABL Waiver was terminated. Accordingly, we are no longer subject to any additional restrictions or borrowing limitations under the ABL, including the $ 50.0 million temporary limit on credit extensions. On March 28, 2024, we amended our ABL to, among other things, (i) extend the maturity date from July 29, 2025 to the earlier of (a) March 28, 2029 and (b) 91 days prior to the stated maturity date of the Company’s 4.0 % Senior Notes due June 15, 2029 (as may be extended from time to time in accordance with the Indenture governing the notes) if the 4.0 % Senior Notes are then outstanding, (ii) decrease the grid-based interest rate margins by approximately 50 basis points to 150 basis points for Secured Overnight Financing Rate (“SOFR”) loans and 50 basis points for base rate loans when average availability is greater than 50 % of the aggregate revolving commitments, and to 175 basis points for SOFR loans and 75 basis points for base rate loans, when average availability is less than or equal to 50 % of the aggregate revolving credit commitments and (iii) replace the previously fixed 37.5 basis point unused commitment fee with a grid-based, quarterly unused commitment fee equal to (a) 37.5 basis points if average daily outstanding credit extensions for such quarter under the ABL (“Total Outstandings”) are less than or equal to 50 % of the aggregate revolving credit commitments or (b) 25.0 basis points if Total Outstandings for such quarter are greater than or equal to 50 % of the aggregate revolving credit commitments. We incurred approximately $ 0.9 million in debt issuance costs in connection with the ABL amendment which were capitalized and will be amortized over the term of the ABL. Borrowings under the ABL bear interest at a floating rate equal to SOFR plus an adjustment of 10 basis points and an applicable margin range of 150 to 175 basis points, or a base rate, as defined in the ABL, plus an applicable margin range of 50 to 75 basis points. At September 30, 2024, the applicable margin was 150 basis points for SOFR-based loans, and 50 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 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 assets. The ABL includes a commitment fee for any unused borrowing capacity of 37.5 basis points per annum when the unused capacity is above 50% of the credit commitments, with a step down to 25.0 basis points per annum when unused capacity is less than or equal to 50% of the credit commitments. At September 30, 2024, the commitment fee was 37.5 basis points. 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, 2024 data was $ 162.6 million, as reduced by $ 12.2 million of outstanding letters of credit and $ 0.2 million of accrued fees and expenses. 4.0 % Senior Unsecured Notes. On May 28, 2021, we privately issued $ 450.0 million of 4.0 % Senior Notes, which mature on June 15, 2029 and bear interest at 4.0 %, paid semi-annually in June and December. We capitalized $ 5.5 million of financing costs, which are being amortized over the term of the 4.0 % Senior Notes using the effective interest method. Proceeds from the 4.0 % Senior Notes, along with cash on hand were used to redeem our previously existing notes. 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 $ 430.2 million as of September 30, 2024. F- 23 Table of Contents Index to Financial Statements An indenture governing the 4.0 % Senior Notes (“Indenture”) contains customary covenants and events of default, including covenants that limit our ability to incur certain debt and liens. There are no financial maintenance covenants associated with the Indenture. We believe we were in compliance with these covenants at September 30, 2024. We may redeem some or all of the 4.0 % Senior Notes at any time after June 15, 2024, at specified redemption prices. Upon a Change of Control as defined in the Indenture, we could be required to offer to purchase the 4.0 % Senior Notes at a price equal to 101 % of the outstanding principal amount if there is a Ratings Decline (as defined in the Indenture). Note 8. Retirement Plans Defined Benefit Plans. We have a defined benefit plan (“Pension Plan”) that we fund in accordance with its requirements and, where applicable, in amounts sufficient to satisfy the minimum funding requirements of applicable laws. The Pension Plan provides benefits based on years of service and compensation or at stated amounts for each year of service with an annual measurement date of September 30. A summary of key assumptions for the valuations of our Pension Plan is as follows: September 30, 2024 2023 2022 Weighted average used to determine benefit obligations: Discount rate 5.07 % 6.29 % 5.79 % Weighted average used to determine net periodic cost: Discount rate 6.29 % 5.79 % 3.01 % Expected return on plan assets 5.75 % 5.75 % 4.50 % The discount rate for determining the present value of pension obligations was selected using a “bond settlement” approach, which constructs a hypothetical bond portfolio that could be purchased such that the coupon payments and maturity values could be used to satisfy the projected benefit payments. The discount rate is the equivalent rate that results in the present value of the projected benefit payments equaling the market value of this bond portfolio. Only high quality (AA graded or higher), non-callable corporate bonds are included in this bond portfolio. We rely on the Pension Plan’s actuaries to assist in the development of the discount rate model. The expected return on plan assets is determined with the assistance of the Pension Plan’s actuaries and investment consultants. Expected return on plan assets was developed using forward-looking returns over a time horizon of approximately 20 years for major asset classes along with projected risk and historical correlations. F- 24 Table of Contents Index to Financial Statements Amounts recognized for the Pension Plan are presented below. September 30, 2024 2023 (in millions) Projected benefit obligations: Beginning of year $ 233.2 $ 251.2 Service cost 0.6 0.8 Interest cost 13.9 13.9 Actuarial loss/(gain) 22.2 ( 10.4 ) Benefits paid ( 22.0 ) ( 22.3 ) Accumulated benefit obligations at end of year $ 247.9 $ 233.2 Plan assets: Beginning of year $ 239.8 $ 251.8 Actual return on plan assets 43.6 10.3 Benefits paid ( 22.0 ) ( 22.3 ) Fair value of plan assets at end of year $ 261.4 $ 239.8 Prepaid benefit cost at end of year: Funded status $ 13.5 $ 6.6 Recognized on balance sheet: Other noncurrent assets $ 13.5 $ 6.6 Recognized in accumulated other comprehensive income (loss), before tax: Net actuarial loss $ 56.6 $ 68.2 The components of net periodic cost (benefit) for our Pension Plan are presented below. 2024 2023 2022 (in millions) Service cost $ 0.6 $ 0.8 $ 1.3 Components of net periodic cost (benefit) excluded from operating income: Interest cost 13.9 13.9 9.8 Expected return on plan assets ( 13.0 ) ( 13.9 ) ( 15.4 ) Amortization of actuarial net loss 3.1 3.7 1.7 Pension expense (benefit) other than service 4.0 3.7 ( 3.9 ) Net periodic cost (benefit) $ 4.6 $ 4.5 $ ( 2.6 ) Pension Plan activity in accumulated other comprehensive loss, before tax, in 2024 is presented below, in millions. Balance at beginning of year $ 68.2 Actuarial loss ( 8.4 ) Prior year actuarial loss amortization to net periodic cost ( 3.2 ) Balance at end of year $ 56.6 F- 25 Table of Contents 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 the inactive participants. Actuarial gains and losses are amortized using a corridor approach. The gain/loss corridor is equal to 10 % of the greater of the benefit obligation and the market-related value of assets. Gains and losses in excess of the corridor are generally amortized over the average remaining lifetime of the plan participants. We expect to amortize $ 0.5 million of unrecognized loss into net periodic expense from accumulated other comprehensive loss in 2025. Strategic asset allocations, tactical range at September 30, 2024 and actual asset allocations are as follows: Strategic asset allocation Actual asset allocations at September 30, Tactical range 2024 2023 2022 Fixed income investments 70 % 67 % - 73 % 69 % 70 % 70 % Equity investments 30 27 % - 33 % 30 29 29 Cash — 0 % - 5 % 1 1 1 100 % 100 % 100 % 100 % 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 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. F- 26 Table of Contents Index to Financial Statements The assets of the Pension Plan by level within the fair value hierarchy are as follows: September 30, 2024 Level 1 Level 2 Total (in millions) Fixed income $ 131.8 $ 49.8 $ 181.6 Equity: Large cap index funds 39.1 — 39.1 International stocks: International funds 38.9 — 38.9 Total equity 78.0 — 78.0 Cash and cash equivalents 1.8 — 1.8 Total Plan assets $ 211.6 $ 49.8 $ 261.4 September 30, 2023 Level 1 Level 2 Total (in millions) Fixed income $ 121.1 $ 45.6 $ 166.7 Equity: Large cap index funds 35.6 — 35.6 International stocks: International funds 35.6 — 35.6 Total equity 71.2 — 71.2 Cash and cash equivalents 1.9 — 1.9 Total Plan assets $ 194.2 $ 45.6 $ 239.8 Our estimated future pension benefit payments are presented below (in millions): 2025 $ 22.6 2026 22.3 2027 21.9 2028 21.4 2029 20.8 2030-2034 94.1 Total $ 203.1 Defined Contribution Retirement Plans. Certain of our employees participate in a defined contribution 401(k) plan or similar plan outside of the United States. We make matching contributions as a function of employee contributions. We expensed our matching contributions of $ 9.1 million, $ 8.2 million and $ 7.3 million during 2024, 2023 and 2022, respectively. F- 27 Table of Contents Index to Financial Statements Note 9. Capital Stock Common stock share activity is presented below. Shares outstanding at September 30, 2021 157,955,433 Vesting of restricted stock units, net of shares withheld for taxes 195,156 Exercise of stock options 36,731 Exercise of employee stock purchase plan instruments 150,909 Settlement of performance-based restricted stock units, net of shares withheld for taxes 160,163 Stock repurchased under buyback program ( 2,654,254 ) Shares outstanding at September 30, 2022 155,844,138 Vesting of restricted stock units, net of shares withheld for taxes 256,724 Exercise of stock options 110,989 Exercise of employee stock purchase plan instruments 181,483 Settlement of performance-based restricted stock units, net of shares withheld for taxes 193,428 Stock repurchased under buyback program ( 714,830 ) Shares outstanding at September 30, 2023 155,871,932 Vesting of restricted stock units, net of shares withheld for taxes 207,986 Exercise of stock options 517,839 Exercise of employee stock purchase plan instruments 129,356 Settlement of performance-based restricted stock units, net of shares withheld for taxes 136,846 Stock repurchased under buyback program ( 636,789 ) Shares outstanding at September 30, 2024 156,227,170 The Company has authorized 60.0 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, 2024. Note 10. Stock-based Compensation Plans Stock-based compensation expense was $ 14.1 million, $ 11.1 million and $ 9.9 million in the years 2024, 2023 and 2022 and is recorded primarily within Selling, general and administrative costs within our consolidated statements of operations. We excluded 270,547 , 779,150 and 790,759 stock-based instruments from the calculation of diluted earnings per share for 2024, 2023 and 2022, respectively, because the effect of including them would have been antidilutive. At September 30, 2024, there was approximately $ 10.1 million of unrecognized compensation expense related to stock-based awards not yet vested. We expect to recognize this expense over a weighted average life of approximately 1.5 years. The Mueller Water Products, Inc. 2006 Stock Incentive Plan (“2006 Plan”) authorizes an aggregate of 20,500,000 shares of common stock that may be granted through the issuance of stock-based awards. Any awards canceled are available for reissuance. Generally, all of our employees and members of our Board of Directors are eligible to participate in the 2006 Plan. At September 30, 2024, 3,874,846 shares of common stock were available for future grants of awards under the 2006 Plan. This total assumes that the maximum number of shares will be earned for awards for which the final number of shares to be earned has not yet been determined. An award granted under the 2006 Plan vests at such times and in such installments as set by the Compensation and Human Resources Committee of our Board of Directors (“Compensation Committee”), but no award will be exercisable after the 10 -year anniversary of the date on which it is granted. Management expects some instruments will be forfeited prior to vesting. Grants to members of our Board of Directors are expected to vest fully. Based on historical forfeitures, we expect certain grants to employees to be forfeited at an annual rate of 2 %. F- 28 Table of Contents Index to Financial Statements Restricted Stock Units. Depending on the specific terms of each award, restricted stock units generally vest ratably over the life of the award, usually three years , on each anniversary date of the original grant. Compensation expense for restricted stock units is recognized between the grant date and the vesting date (or the date on which a participant becomes retirement-eligible, if sooner) on a straight-line basis for each tranche of each award. Fair values of restricted stock units are determined using the closing price of our common stock on the respective grant date. Restricted stock unit activity under the 2006 Plan is summarized below. Restricted stock units Weighted average grant date fair value per unit Weighted average remaining contractual term (years) Aggregate intrinsic value (millions) Outstanding at September 30, 2021 396,097 $ 11.78 0.8 Granted 223,379 13.41 Vested ( 251,981 ) 11.81 $ 2.8 Cancelled ( 8,763 ) 11.87 Outstanding at September 30, 2022 358,732 12.77 0.7 Granted 625,518 12.78 Vested ( 301,864 ) 12.83 $ 7.3 Cancelled ( 109,103 ) 12.00 Outstanding at September 30, 2023 573,283 12.88 0.9 Granted 301,908 14.91 Vested ( 367,315 ) 12.99 $ 9.8 Cancelled ( 54,080 ) 12.85 Outstanding at September 30, 2024 453,796 $ 14.15 0.9 Performance-Based Awards. Our performance-based awards consist of performance-based restricted stock units (“PRSUs”). PRSUs represent a target number of units that may be paid out at the end of a multi-year award cycle consisting of annual performance periods coinciding with our fiscal years. As determined at the date of award, PRSUs may settle in cash-value equivalent of, or directly in, shares of our common stock. Settlement will range from zero to two times the number of PRSUs granted, depending on our financial performance against predetermined targets. The grant date for each year’s performance period is set when the Compensation Committee establishes performance goals for the period, normally within 90 days of the beginning of each performance period. At the end of the performance period, the Compensation Committee confirms performance against the applicable performance targets. PRSUs do not convey voting rights or earn dividends. PRSUs vest on the last day of an award cycle, unless vested sooner as a result of a “Change of Control” of the Company, or the death, disability or retirement of a participant. We recognize compensation expense for stock-settled PRSUs starting on the first day of the applicable performance period and ending on the respective vesting dates. We base the recognized compensation expense upon the number of units awarded for each performance period, the closing price of our common stock on the grant date and the estimated performance factor. In 2024, no shares vested related to PRSUs. In 2023 and 2022, 163,999 and 240,412 shares, respectively, vested related to PRSUs. F- 29 Table of Contents Index to Financial Statements Stock-settled PRSUs activity under the 2006 Plan is summarized below: Award date Settlement year Performance period Grant date per unit fair value Units awarded Units forfeited Net units Performance factor Shares earned November 28, 2017 2021 2018 $ 12.50 57,092 — 57,092 1.357 77,474 2019 $ 10.53 57,092 ( 4,793 ) 52,299 0.645 33,733 2020 $ 11.26 57,104 ( 21,679 ) 35,425 0.909 32,202 November 27, 2018 2022 2019 $ 10.53 110,954 ( 8,751 ) 102,203 0.645 65,921 2020 $ 11.26 110,954 ( 13,182 ) 97,772 0.909 88,875 2021 $ 11.86 110,967 ( 28,478 ) 82,489 1.161 95,770 December 3, 2019 2023 2020 $ 11.26 69,988 ( 2,391 ) 67,597 0.909 61,446 2021 $ 11.86 69,989 ( 9,614 ) 60,375 1.161 70,096 2022 $ 13.81 69,988 ( 9,614 ) 60,374 0.700 42,262 November 29, 2022 2026 2023-2025 $ 11.41 166,284 ( 92,550 ) 73,734 — — November 28, 2023 2027 2024-2026 $ 13.22 136,983 ( 28,308 ) 108,675 — — Market-Based Awards. Our market-based awards consist of market-based restricted stock units (“MRSUs”). MRSUs represent a target number of units that may be paid out at the end of a three-fiscal year award cycle based on a calculation of our relative total shareholder return (“TSR”) performance as compared with the TSR of a selected peer group. Settlements in our common shares will range from zero to two times the number of MRSUs granted, depending on our TSR performance ranking within the peer group. The fair values of MRSUs are fixed at the date of grant and the related expense is recognized ratably over the vesting period, which is roughly three years from the date of grant. The table below provides information regarding MRSU awards, which were valued using Monte Carlo simulations on the grant date: November 28, 2023 November 29, 2022 November 30, 2021 Fair value at grant date $ 18.11 $ 15.08 $ 15.76 Units granted 136,983 166,284 230,089 Variables used in determining grant date fair value: Dividend yield 2.00 % 2.20 % 1.70 % Risk-free rate 4.50 % 4.20 % 0.76 % Expected term (in years) 2.84 2.83 2.83 Stock Options. Stock options generally vest on each anniversary date of the original grant ratably over three years. Compensation expense attributed to stock options is based on the fair value of the awards on their respective grant dates, as determined using a Black-Scholes model. F- 30 Table of Contents Index to Financial Statements The assumptions used to determine the grant date fair value are indicated below for grants issued during our 2024 fiscal year: November 28, 2023 Variables used in determining grant date fair value: Dividend yield 1.94 % Risk-free rate 4.33 % Expected term (in years) 6.00 The expected dividend yield is based on our estimated annual dividend and our stock price history at the grant date. The risk-free interest rate is based on the United States Treasury zero-coupon yield in effect at the grant date with a term equal to the expected term. The expected term represents the average period of time the options are expected to be outstanding. Stock option activity under the 2006 Plan is summarized below: Options Weighted average exercise price per option Weighted average remaining contractual term (years) Aggregate intrinsic value (millions) Outstanding at September 30, 2021 599,799 $ 10.67 7.8 $ 2.7 Granted 457,482 13.64 Exercised ( 36,731 ) 5.67 0.2 Cancelled ( 7,257 ) Outstanding at September 30, 2022 1,013,293 12.19 7.7 $ 0.3 Granted 573,279 11.41 Exercised ( 131,989 ) 9.59 0.4 Cancelled ( 327,115 ) Outstanding at September 30, 2023 1,127,468 12.10 7.8 $ 1.0 Granted 457,356 13.22 Exercised ( 517,839 ) 12.05 5.0 Cancelled ( 135,215 ) Outstanding at September 30, 2024 931,770 $ 12.60 7.9 $ 8.5 Exercisable at September 30, 2024 322,467 $ 12.31 6.4 $ 3.0 Stock option exercise prices are equal to the closing price of our common stock on the relevant grant date. The ranges of exercise prices for stock options outstanding at September 30, 2024 are summarized below: Exercise price Outstanding Options Weighted average exercise price Weighted average remaining contractual term (years) Exercisable options Weighted average exercise price $ 5.00 - $ 9.99 21,582 $ 9.97 0.3 21,582 $ 9.97 $ 10.00 - $ 14.99 910,188 $ 12.66 8.1 300,885 $ 12.47 931,770 $ 12.60 322,467 $ 12.31 F- 31 Table of Contents Index to Financial Statements Employee Stock Purchase Plan. The Mueller Water Products, Inc. 2006 Employee Stock Purchase Plan (“ESPP”) authorizes the sale of up to 5,800,000 shares of our common stock to employees. Generally, all full-time, active employees are eligible to participate in the ESPP, subject to certain restrictions. 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, 2024, 1,792,275 shares were available for issuance under the ESPP. Phantom Plan. Under the Mueller Water Products, Inc. Phantom Plan adopted in 2012 (“Phantom Plan”), we have awarded “phantom units” to certain non-officer employees. A phantom unit settles in cash equal to the price of one share of our common stock on the vesting date. Phantom units generally vest ratably over three years on each anniversary date of the original grant. We recognize compensation expense for phantom units on a straight-line basis for each tranche of each award based on the closing price of our common stock at each balance sheet date. The outstanding phantom units had a fair value of $ 21.70 per unit at September 30, 2024 and our accrued liability for such units was $ 6.0 million. Phantom Plan activity is summarized below: Phantom Plan units Weighted average grant date fair value per unit Weighted average remaining contractual term (years) Aggregate intrinsic value (millions) Outstanding at September 30, 2021 344,844 $ 11.51 0.9 Granted 203,834 13.60 Vested ( 162,969 ) $ 1.6 Cancelled ( 46,578 ) 12.39 Outstanding at September 30, 2022 339,131 12.74 1.1 Granted 294,063 11.53 Vested ( 156,012 ) $ 1.9 Cancelled ( 120,515 ) 12.22 Outstanding at September 30, 2023 356,667 12.09 1.0 Granted 236,250 13.28 Vested ( 156,585 ) $ 1.9 Cancelled ( 20,952 ) 12.53 Outstanding at September 30, 2024 415,380 $ 12.71 0.9 F- 32 Table of Contents Index to Financial Statements Note 11. Supplemental Balance Sheet Information Selected supplemental asset information is presented below. September 30, 2024 2023 (in millions) Inventories, net: Purchased components and raw materials $ 163.6 $ 176.9 Work in process 65.8 60.0 Finished goods 72.3 61.0 Total inventories, net $ 301.7 $ 297.9 Other current assets: Prepaid expenses $ 17.2 $ 17.8 Non-trade receivables 3.4 1.7 Income taxes 0.8 0.8 Maintenance and repair supplies and tooling 5.4 4.1 Workers’ compensation reimbursement receivable 2.4 2.2 Goods to be returned 4.2 3.9 Other current assets 4.5 1.0 Total other current assets $ 37.9 $ 31.5 Property, plant and equipment, net: Land $ 6.5 $ 6.4 Buildings 126.6 117.2 Machinery and equipment 550.4 525.8 Construction in progress 45.2 36.9 Total property, plant and equipment $ 728.7 $ 686.3 Accumulated depreciation ( 409.9 ) ( 374.6 ) Total property, plant and equipment, net $ 318.8 $ 311.7 Other noncurrent assets: Operating lease right-of-use assets $ 26.9 $ 23.6 Maintenance and repair supplies and tooling 20.3 21.1 Workers’ compensation reimbursement receivable 4.1 2.4 Note receivable 1.8 1.8 Pension asset 13.5 6.6 Deferred financing fees 1.3 0.7 Other noncurrent assets 0.4 2.6 Total noncurrent assets $ 68.3 $ 58.8 F- 33 Table of Contents Index to Financial Statements Selected supplemental liability information is presented below. September 30, 2024 2023 (in millions) Other current liabilities: Compensation and benefits $ 58.3 $ 33.8 Customer rebates 16.9 14.6 Interest payable 5.3 5.3 Warranty accrual 13.3 8.6 Deferred revenue 7.1 9.2 Returned goods accrual 7.3 6.7 Operating lease liabilities 5.5 4.9 Taxes other than income taxes 3.5 2.0 Restructuring liabilities 3.4 6.6 Income taxes payable 5.6 8.5 Workers’ compensation accrual 4.6 4.0 Other current liabilities 16.5 11.0 Total current liabilities $ 147.3 $ 115.2 Other noncurrent liabilities: Operating lease liabilities $ 22.5 $ 19.8 Warranty accrual 10.3 7.1 Deferred revenue 5.7 — Transition tax liability 1.7 3.1 Uncertain tax position liability 3.0 5.0 Workers' compensation accrual 5.8 5.9 NMTC liability 3.9 3.9 Asset retirement obligation 4.2 4.2 Deferred development grant 2.5 2.5 Other noncurrent liabilities 4.1 2.7 Total noncurrent liabilities $ 63.7 $ 54.2 Note 12. Supplemental Statement of Operations Information In the year ended September 30, 2024, we incurred $ 15.8 million of Strategic reorganization and other charges primarily related to the leadership transition, certain transaction-related expenses, non-cash asset impairment, cybersecurity incidents expense, and severance. Fiscal year 2023 included Strategic reorganization and other charges of approximately $ 10.2 million, primarily related to the leadership transition, severance and certain transaction-related expenses. During fiscal year 2022, we incurred $ 7.2 million of Strategic reorganization and other charges including $1.5 million associated with the closure of our facilities in Aurora, Illinois and Surrey, British Columbia, Canada as well as expenses associated with the Albertville tragedy and certain transaction-related costs. F- 34 Table of Contents Index to Financial Statements Activity in accrued restructuring, reported as part of other current liabilities, is presented below. 2024 2023 2022 (in millions) Beginning balance $ 6.6 $ 3.3 $ 3.1 Expenses incurred 15.8 10.2 7.2 Amounts paid and other adjustments, net ( 19.0 ) ( 6.9 ) ( 7.0 ) Ending balance $ 3.4 $ 6.6 $ 3.3 Selected supplemental statement of operations information is presented below. 2024 2023 2022 (in millions) Included in selling, general and administrative expenses: Research and development $ 20.5 $ 25.9 $ 24.5 Advertising $ 5.8 $ 4.7 $ 5.5 Interest expense, net: 4.0% Senior Notes $ 18.0 $ 18.0 $ 18.0 Deferred financing costs amortization 1.0 1.0 1.0 ABL Agreement 0.9 0.9 0.9 Capitalized interest ( 0.1 ) ( 1.6 ) ( 2.6 ) Other interest expense 1.7 0.1 0.3 Total interest expense 21.5 18.4 17.6 Interest income ( 8.8 ) ( 3.7 ) ( 0.7 ) Net interest expense $ 12.7 $ 14.7 $ 16.9 Note 13. Accumulated Other Comprehensive Income (Loss) Accumulated other comprehensive income (loss) is as follows: Foreign currency translation, net of income tax Pension liability, net of income tax Total (in millions) Balance at September 30, 2023 $ ( 20.2 ) $ ( 28.5 ) $ ( 48.7 ) Current period other comprehensive income 9.1 8.8 17.9 Balance at September 30, 2024 $ ( 11.1 ) $ ( 19.7 ) $ ( 30.8 ) For the year end September 30, 2024, pension liability included in the consolidated statements of comprehensive income was $ 11.6 million, net of income tax of $ 2.8 million. For the year ended September 30, 2024, foreign currency translation included in the consolidated statements of comprehensive income was $ 9.1 million, net of no income tax. F- 35 Table of Contents Index to Financial Statements Note 14. Segment Information Our business units and reportable segments are Water Flow Solutions and Water Management Solutions. Water Flow Solutions’ portfolio includes iron gate valves, specialty valves and service brass products. Water Management Solutions’ portfolio includes fire hydrants, repair and installation, natural gas, metering, leak detection, as well as pressure management and control products and solutions. 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. The determination of segment results excludes certain expenses designated as Corporate because they are not directly attributable to segment operations. Items such as interest expense, loss on early extinguishment of debt, pension expense or benefit, 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. Corporate assets principally consist of our cash, operating lease assets, and certain real property previously owned by U.S. Pipe and Anvil. Business segment assets primarily consist of inventories, property, plant and equipment, and intangible assets. The Company has two significant customers that comprise greater than 10% of gross sales. One customer comprised 20 %, 18 %, and 21 % of consolidated revenues for the fiscal years ended September 30, 2024, 2023, and 2022, respectively. The Company had outstanding Accounts receivable from this customer of $ 59.1 million and $ 46.4 million as of September 30, 2024 and 2023, respectively. Another customer comprised 18 % of consolidated revenues for the fiscal years ended September 30, 2024 and 2023 and 20 % of consolidated revenues for the fiscal year ended September 30, 2022. The Company had outstanding Accounts receivable from this customer of $ 36.9 million and $ 37.7 million as of September 30, 2024 and 2023, respectively. The Company reports revenue for these customers in both reportable segments, Water Flow Solutions and Water Management Solutions. Geographical area information is presented below. United States Israel Other Total (in millions) Property, plant and equipment, net: September 30, 2024 $ 302.8 $ 11.9 $ 4.1 $ 318.8 September 30, 2023 $ 295.6 $ 11.9 $ 4.2 $ 311.7 F- 36 Table of Contents Index to Financial Statements Year ended September 30, 2024 2023 2022 (in millions) Water Flow Solutions disaggregated net revenue: Central $ 196.8 $ 176.0 $ 190.9 Northeast 139.2 130.6 125.3 Southeast 181.6 118.4 154.3 West 185.5 160.9 182.8 United States $ 703.1 $ 585.9 $ 653.3 Canada 42.2 36.2 55.0 Other international locations 10.2 12.3 5.8 $ 755.5 $ 634.4 $ 714.1 Water Management Solutions disaggregated net revenue: Central $ 149.4 $ 169.2 $ 142.9 Northeast 120.3 151.2 115.1 Southeast 132.4 137.4 109.4 West 103.6 119.0 102.9 United States $ 505.7 $ 576.8 $ 470.3 Canada 33.3 38.3 39.2 Other international locations 20.2 26.2 23.8 $ 559.2 $ 641.3 $ 533.3 F- 37 Table of Contents Index to Financial Statements Summarized financial information for our segments is presented below. Water Flow Solutions Water Management Solutions Corporate Total (in millions) Net revenue: 2024 $ 755.5 $ 559.2 $ — $ 1,314.7 2023 634.4 641.3 — 1,275.7 2022 $ 714.1 $ 533.3 $ — $ 1,247.4 Operating income (loss): 2024 $ 179.2 $ 74.0 $ ( 71.5 ) $ 181.7 2023 79.6 106.0 ( 58.2 ) 127.4 2022 $ 118.3 $ 48.7 $ ( 55.4 ) $ 111.6 Depreciation and amortization: 2024 $ 38.3 $ 27.7 $ 0.2 $ 66.2 2023 32.8 29.5 0.2 62.5 2022 $ 30.0 $ 30.3 $ 0.2 $ 60.5 Strategic reorganization and other charges: 2024 $ 0.2 $ 1.8 $ 13.8 $ 15.8 2023 — 1.7 8.5 10.2 2022 $ 0.2 $ 0.4 $ 6.6 $ 7.2 Capital expenditures: 2024 $ 31.1 $ 16.3 $ — $ 47.4 2023 33.4 14.2 — 47.6 2022 $ 43.4 $ 11.3 $ — $ 54.7 Intangible assets, net and goodwill September 30, 2024 $ 264.9 $ 125.5 $ — $ 390.4 September 30, 2023 $ 283.8 $ 143.9 $ — $ 427.7 Inventories, net: September 30, 2024 $ 187.3 $ 114.4 $ — $ 301.7 September 30, 2023 $ 173.8 $ 124.1 $ — $ 297.9 Note 15. Commitments and Contingencies We are involved in various legal proceedings that have arisen in the normal course of operations, including the proceedings summarized below. 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. We are subject to a wide variety of laws and regulations concerning the protection of the environment, both with respect to the operations at many of our properties and with respect to remediating environmental conditions that may exist at our own or other properties. We accrue for environmental expenses resulting from existing conditions that relate to past operations when the costs are probable and reasonably estimable. In the acquisition agreement pursuant to which a predecessor to Tyco International plc, now Johnson Controls International plc (“Tyco”), sold our businesses to a previous owner in August 1999, Tyco agreed to indemnify us and our affiliates, among other things, for all “Excluded Liabilities.” Excluded Liabilities include, among other things, substantially all liabilities relating to the time prior to August 1999, including environmental liabilities. The indemnity survives indefinitely. Tyco’s indemnity F- 38 Table of Contents Index to Financial Statements does not cover liabilities to the extent caused by us or the operation of our businesses after August 1999, nor does it cover liabilities arising with respect to businesses or sites acquired after August 1999. Since 2007, Tyco has engaged in multiple corporate restructurings, split-offs and divestitures. While none of these transactions directly affects the indemnification obligations of the Tyco indemnitors under the 1999 acquisition agreement, the result of such transactions is that the assets of, and control over, such Tyco indemnitors has changed. Should any of these Tyco indemnitors become financially unable or fail to comply with the terms of the indemnity, we may be responsible for such obligations or liabilities. The purchaser of U.S. Pipe has been identified as a “potentially responsible party” (“PRP”) under the Comprehensive Environmental Response, Compensation and Liability Act in connection with a former manufacturing facility operated by U.S. Pipe that was in the vicinity of a proposed Superfund site located in North Birmingham, Alabama. Under the terms of the acquisition agreement relating to our sale of U.S. Pipe, we agreed to indemnify the purchaser for certain environmental liabilities, including those arising out of the former manufacturing site in North Birmingham. 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 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, 2024. CBP Matter. On October 4, 2024, we delivered to U.S. Customs and Border Protection (“CBP”) a prior disclosure letter to correct information reported at the time of entry under United States laws and customs regulations with respect to the origin of certain products that were supplied by a manufacturer in Canada but that we subsequently determined had not been substantially transformed in Canada, resulting in the underpayment of certain duties to CBP. We identified the entry discrepancies related to our U.S. import of such products and provided the information to CBP. We expensed $ 9.1 million in 2024 consisting of the duties believed to be owed for all relevant periods and expected interest on such amount. Because the matter remains under review by CBP, it is possible that the actual amount of duties and interest owed for these discrepancies may be higher than the amount remitted or CBP may assess additional fines, penalties or enact other measures. Cybersecurity Incident Putative Class Action. In connection with the cybersecurity incident initially reported on October 28, 2023, the Company was named as a defendant in a putative class action lawsuit captioned David Kok v. Mueller Water Products, Inc., filed on August 30, 2024 in the U.S. District Court for the Northern District of Georgia, Atlanta Division, Case No. 1:24-cv-03894-SCJ. The plaintiff seeks to represent a class of all Company current and former employees whose personally identifying information was allegedly compromised by the incident. The lawsuit asserts various common law tort, contract and state statutory claims, seeks monetary damages, injunctive and declaratory relief, costs and attorneys’ fees and other related relief. We believe the allegations are without merit and intend to vigorously defend against the claims; however, the outcome of this legal proceeding cannot be predicted with certainty. Indemnifications . We are a party to contracts in which it is common for us to agree to indemnify third parties for certain liabilities that arise out of or relate to the subject matter of the contract. In some cases, this indemnity extends to related liabilities arising from the negligence of the indemnified parties, but usually excludes any liabilities caused by gross negligence or willful misconduct. We cannot estimate the potential amount of future payments under these indemnities until events arise that would trigger a liability under the indemnities. Additionally, in connection with the sale of assets and the divestiture of businesses, such as the divestitures of U.S. Pipe and Anvil, we may agree to indemnify buyers and related parties for certain losses or liabilities incurred by these parties with respect to: (i) the representations and warranties made by us to these parties in connection with the sale and (ii) liabilities related to the pre-closing operations of the assets or business sold. Indemnities related to pre-closing operations generally include certain environmental and tax liabilities and other liabilities not assumed by these parties in the transaction. 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. As with any liability, we have accrued for those pre-closing obligations that are considered probable and reasonably estimable. Should circumstances change, increasing the likelihood of payments related to a specific indemnity, we will accrue a liability when future payment is probable and the amount is reasonably estimable. Other Matters. We monitor and analyze our warranty experience and costs periodically and may revise our accruals as necessary. Factors considered 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. F- 39 Table of Contents Index to Financial Statements 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. Note 16. Subsequent Events Dividend Declaration On October 22, 2024, our Board of Directors declared a dividend of $ 0.067 per share on our common stock, payable on or about November 20, 2024, to stockholders of record at the close of business on November 8, 2024. F- 40