What changed in this filing

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Item 1. Financial Statements

2025-02-05 compared with 2024-08-06 · 125 added, 164 removed, 492 unchanged (37% of the section changed)

3 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

June 30, September 30,

December 31, September 30,

(in millions, except share amounts)

22 unchanged sentences

60,000,000 shares authorized;

none outstanding at June 30, 2024, and September 30, 2023

none outstanding at December 31, 2024, and September 30, 2024

Common stock:

1 unchanged sentence

600,000,000 shares authorized;

155,765,042 and 155,871,932 shares outstanding at June 30, 2024, and September 30, 2023, respectively

156,563,285 and 156,227,170 shares outstanding at December 31, 2024, and September 30, 2024, respectively

Additional paid-in capital 1,194.8 1,205.2

7 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Three months ended Nine months ended

June 30, June 30,

2024 2023 2024 2023

Three months ended

(in millions, except per share amounts)

26 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Three months ended Nine months ended

June 30, June 30,

2024 2023 2024 2023

Three months ended

(in millions)

23 unchanged sentences

Balance at December 31, 2024 $ 1.6 $ 1,194.8 $ ( 330.6 ) $ ( 31.7 ) $ 834.1

Net income — — 44.3 — 44.3

Dividends declared — ( 10.0 ) — — ( 10.0 )

Stock-based compensation — 1.9 — — 1.9

Shares retained for employee taxes — ( 0.2 ) — — ( 0.2 )

Common stock issued — 1.1 — — 1.1

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

Other comprehensive loss, net of tax — — — ( 3.8 ) ( 3.8 )

Balance at March 31, 2024 $ 1.6 $ 1,214.7 $ ( 423.2 ) $ ( 38.6 ) $ 754.5

Net income — — 47.3 — 47.3

Dividends declared — ( 9.9 ) — — ( 9.9 )

Stock-based compensation — 2.5 — — 2.5

Common stock issued — 1.0 — — 1.0

Other comprehensive loss, net of tax — — — ( 3.8 ) ( 3.8 )

Balance at June 30, 2024 $ 1.6 $ 1,208.3 $ ( 375.9 ) $ ( 42.4 ) $ 791.6

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

MUELLER WATER PRODUCTS, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

stock Additional

12 unchanged sentences

Balance at December 31, 2023 $ 1.6 $ 1,231.9 $ ( 467.5 ) $ ( 34.8 ) $ 731.2

Net income — — 21.3 — 21.3

Dividends declared — ( 9.5 ) — — ( 9.5 )

Stock-based compensation — 2.4 — — 2.4

Common stock issued — 0.4 — — 0.4

Other comprehensive loss, net of tax — — — ( 1.5 ) ( 1.5 )

Balance at March 31, 2023 $ 1.6 $ 1,264.3 $ ( 523.5 ) $ ( 41.5 ) $ 700.9

Net income — — 24.5 — 24.5

Dividends declared — ( 9.6 ) — — ( 9.6 )

Stock-based compensation — 1.7 — — 1.7

Shares retained for employee taxes — ( 0.1 ) — — ( 0.1 )

Common stock issued — 0.9 — — 0.9

Other comprehensive loss, net of tax — — — ( 4.1 ) ( 4.1 )

Balance at June 30, 2023 $ 1.6 $ 1,257.2 $ ( 499.0 ) $ ( 45.6 ) $ 714.2

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

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine months ended

Three months ended

(in millions)

4 unchanged sentences

Amortization 1.8 6.9

Non-cash asset impairment 1.4 —

Loss (gain) on sale of assets 0.4 ( 3.7 )

Gain on sale of assets — ( 0.1 )

Stock-based compensation 2.5 2.6

17 unchanged sentences

Dividends paid ( 10.5 ) ( 10.0 )

Common stock repurchased under buyback program ( 10.0 ) —

Employee taxes related to stock-based compensation ( 4.0 ) ( 1.5 )

Common stock issued 1.6 0.4

Debt issuance costs ( 0.9 ) —

Payments for finance lease obligations ( 0.2 ) ( 0.2 )

5 unchanged sentences

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

Nine months ended

Three months ended

(in millions)

6 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF AND FOR THE THREE AND NINE MONTHS ENDED JUNE 30, 2024

AS OF AND FOR THE THREE MONTHS ENDED DECEMBER 31, 2024

Organization and Basis of Presentation

2 unchanged sentences

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, and pressure management and control products and solutions.

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

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” or “our” may also refer to the segment being discussed.

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

Our condensed 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 as well as in the disclosure of contingent assets and liabilities for the reporting periods.

5 unchanged sentences

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

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

Therefore, the results of operations for the three and nine months ended June 30, 2024 are not necessarily indicative of operating results that may be achieved for any other interim period or the full year.

Therefore, the results of operations for the three months ended December 31, 2024 are not necessarily indicative of operating results that may be achieved for any other interim period or the full year.

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.

10 unchanged sentences

We do not expect ASU 2023-07 to have a material impact on our financial statements and related disclosures.

In December 2023, the FASB issued ASU No 2023-09 “Income Taxes (Topic 740):

In December 2023, the FASB issued ASU No.

2023-09 “Income Taxes (Topic 740):

Improvements to Tax Disclosures” (“ASU 2023-09”).

5 unchanged sentences

We do not expect ASU 2023-09 to have a material impact on our financial statements and related disclosures.

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 will 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 will become 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.

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

These expenses include purchases of inventory, employee compensation, depreciation and intangible asset amortization for each income statement line item that contains those 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 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.

Status of U.S.

Securities and Exchange Commission (“SEC”) Climate Disclosure Rules

In March 2024, the SEC adopted final rules on the enhancement and standardization of climate-related disclosures, which were to become effective on a phased-in timeline in fiscal years beginning in 2025.

However, in April 2024, due to legal challenges to the rule, the SEC voluntarily stayed implementation of the final rules.

If the rules survive judicial review and are not effectively rescinded by the SEC, they will 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 would require disclosure in the notes to the financial statements of the effects of severe weather events and other natural conditions, subject to materiality thresholds.

Strategic Reorganization and Other Charges

During the nine months ended June 30, 2024, we recorded approximately $ 12.7 million in Strategic reorganization and other charges, consisting of amounts associated with our leadership transition, certain transaction-related expenses, cybersecurity incidents expense, $ 1.4 million of non-cash impairment of assets in our Water Management Solutions segment, and severance.

During the nine months ended June 30, 2023, we recorded certain amounts related to severance and transaction-related expenses partially offset by a $ 4.0 million gain, before tax, on the sale of our Aurora, Illinois facility.

The Company expects to incur certain costs related to the decommissioning and probable demolition of its legacy foundry in Decatur, Illinois, the amount of which is not estimable at this time.

During the three months ended December 31, 2024, we recorded approximately $ 1.7 million in Strategic reorganization and other charges consisting of expenses associated with our leadership transition and severance.

During the three months ended December 31, 2023, we recorded approximately $ 6.6 million in Strategic reorganization and other charges consisting of expenses associated with our leadership transition and cybersecurity incidents, as well as other transaction-related expenses.

Activity in accrued Strategic reorganization and other charges, reported as part of Other current liabilities, is presented below:

Nine months ended

Three months ended

(in millions)

Beginning balance $ 3.4 $ 6.6

Amounts accrued 12.7 0.9

Expenses incurred 1.7 6.6

Amounts paid and other adjustments, net ( 1.5 ) ( 5.4 )

21 unchanged sentences

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 were expensed as incurred and were immaterial to the financial statements.

Incremental costs to maintain the structure during the compliance period are expensed as incurred and are immaterial to the consolidated financial statements.

Revenue from Contracts with Customers

1 unchanged sentence

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 contract or arrangement with a customer.

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

4 unchanged sentences

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 (i.e., contract assets).

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 are classified as current or noncurrent based on the timing of when we expect to recognize revenue.

We include current deferred revenue and noncurrent deferred revenue within Other current liabilities and Other noncurrent liabilities, respectively, in the accompanying condensed consolidated balance sheets.

Advance payments and billings in excess of revenue are recognized and recorded as deferred revenue and are classified as Other current liabilities or Other noncurrent liabilities in the accompanying condensed consolidated balance sheets based on the timing of when we expect to recognize revenue.

Refer to Note 7.

3 unchanged sentences

Deferred revenue primarily consists of amounts related to monitoring, leak detection, software and hosting services.

During the three and nine months ended June 30, 2024, approximately $ 0.8 million and $ 5.0 million, respectively of deferred revenue was recognized into revenue that was previously included in deferred revenue.

During the three and nine months ended June 30, 2024, approximately $ 3.0 million and $ 6.9 million of additional deferred revenue was recorded.

In each of the three months ended December 31, 2024 and 2023, we recognized approximately $ 2.3 million of revenue that was previously deferred.

Additionally, during the three months ended December 31, 2024 and 2023, we recorded approximately $ 2.1 million and $ 1.5 million, respectively, of additional deferred revenue.

We estimate that noncurrent deferred revenue will be recognized as follows:

$ 1.1 million in 2026, $ 1.3 million in 2027, $ 1.2 million in 2028, $ 0.7 million in 2029, $ 0.5 million in 2030 and $ 0.8 million thereafter.

The table below represents the balances of our customer receivables and deferred revenue:

June 30, September 30,

December 31, September 30,

(in millions)

7 unchanged sentences

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer.

Our performance obligations are satisfied at a point in time for sales of equipment and products or over time for our software hosting and leak detection monitoring services.

Our performance obligations are generally satisfied at a point in time for sales of equipment and products or over time for 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.

2 unchanged sentences

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 reversal in the amount of cumulative revenue recognized will not occur or when uncertainties around the variable consideration are resolved.

We include estimated variable consideration in the transaction price only to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur in future periods when the uncertainty associated with the variable consideration is subsequently resolved.

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

1 unchanged sentence

Revenue for the sale of our products is recognized when the obligations of the terms of our contract are satisfied, which is when the customer is able to direct the use of and obtain substantially all of the benefits from the product, which generally occurs upon shipment when control of the product transfers to the customer.

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

These warranties cannot be purchased separately from our products.

We offer assurance warranties to our customers that the products provided will function as intended and comply with any agreed-upon specifications.

These warranties 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 of a product are accounted for as fulfillment costs and are expensed to Cost of sales within our condensed consolidated statement of operations at the time the related revenue is recognized.

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 condensed consolidated statement of operations at the time the revenue is recognized.

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

Our sales commissions are paid based on a combination of orders and shipments, and we reserve the right to claw back any commissions in case of product returns, cancellations or lost collections.

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

The reconciliation between the U.S.

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

Three months ended Nine months ended

June 30, June 30,

2024 2023 2024 2023

Three months ended

federal statutory income tax rate 21.0 % 21.0 %

1 unchanged sentence

State income taxes, net of federal benefit 3.9 3.0

Excess tax deficit related to stock-based compensation — — — 0.2

Excess tax (benefit) deficit related to stock-based compensation ( 3.5 ) 0.8

Tax credits ( 1.3 ) ( 2.7 )

6 unchanged sentences

Effective income tax rate 22.9 % 15.4 %

At June 30, 2024 and September 30, 2023, the gross liabilities for unrecognized income tax benefits were $ 4.1 million and $ 5.0 million, respectively, and are included in Other noncurrent liabilities.

During the nine months ended June 30, 2024, we recorded $ 1.6 million in income tax benefits due to the release of an uncertain tax position that expired on December 31, 2023.

No income tax benefits or expenses were recorded during the three months ended June 30, 2024 related to this uncertain tax position.

At December 31, 2024 and September 30, 2024, the gross liabilities for unrecognized income tax benefits were $ 3.4 million and $ 3.0 million, respectively, and are included in Other noncurrent liabilities.

During the three months ended December 31, 2023, we recorded $ 1.6 million in income tax benefits due to the release of an uncertain tax position that expired on December 31, 2023.

During the three months ended December 31, 2024 and 2023, there were no material changes to other uncertain tax positions.

Borrowing Arrangements

The components of our long-term debt are as follows:

June 30, September 30,

December 31, September 30,

(in millions)

6 unchanged sentences

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 borrowings 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.

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 plus 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 June 30, 2024, the applicable margin for SOFR-based loans was 150 basis points and for base rate loans was 50 basis points.

Borrowings under the ABL bear interest at a floating rate equal to Secured Overnight Financing Rate (“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 December 31, 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.

1 unchanged sentence

Prepayments can be made at any time without penalty.

The ABL allows for payments such as cash dividends on our common stock up to certain thresholds.

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

1 unchanged sentence

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 June 30, 2024, the commitment fee was 37.5 basis points.

At December 31, 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 June 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.

Excess availability based on December 31, 2024 data was $ 163.0 million, as reduced by $ 11.8 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 Unsecured Notes (“ 4.0 % Senior Notes”), which mature on June 15, 2029, and bear interest at 4.0 %, paid semi-annually in June and December.

On May 28, 2021, we privately issued $ 450.0 million of 4.0 % Unsecured Senior Notes (“ 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 $ 411.3 million at June 30, 2024.

Based on quoted market prices, which is a Level 1 measurement, the outstanding 4.0 % Senior Notes had a fair value of $ 416.8 million at December 31, 2024.

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 June 30, 2024.

We believe we were in compliance with these covenants at December 31, 2024.

We may redeem some or all of the 4.0 % Senior Notes at any time after June 15, 2024, at specified redemption prices.

1 unchanged sentence

Retirement Plan

We have a defined benefit plan (“Pension Plan”) that we fund in accordance with its requirements in amounts sufficient to satisfy the minimum funding requirements of applicable laws.

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.

The components of net periodic cost for our Pension Plan are presented below:

Three months ended Nine months ended

June 30, June 30,

2024 2023 2024 2023

Three months ended

(in millions)

7 unchanged sentences

The amortization of actuarial losses, net of income tax, is recorded as a component of Other comprehensive income.

For each of the three months ended June 30, 2024 and 2023, the amortization of actuarial net loss is shown net of income tax of $ 0.2 million in the condensed consolidated statements of comprehensive income.

For the nine months ended June 30, 2024 and 2023, the amortization of actuarial loss is shown net of income tax of $ 0.6 million and $ 0.8 million respectively, in the condensed consolidated statements of comprehensive income.

For each of the three months ended December 31, 2024 and 2023, the amortization of actuarial net loss is shown net of income tax of $ 0.2 million in the condensed consolidated statements of comprehensive income.

Stock-based Compensation Plans

2 unchanged sentences

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

Grants issued during the nine months ended June 30, 2024 are as follows:

Grants issued during the three months ended December 31, 2024 are as follows:

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

7 unchanged sentences

Employee stock purchase plan instruments 24,621 $ 3.86 0.1

Total - Quarter ended December 31, 2023 $ 11.3

Quarter ended March 31, 2024

Restricted stock units 81,136 $ 15.59 $ 1.3

Phantom Plan instruments 2,544 15.71 —

Employee stock purchase plan instruments 35,998 $ 2.62 0.1

Total - Quarter ended March 31, 2024 1.4

Quarter ended June 30, 2024

Restricted stock units 55,572 $ 18.44 $ 1.0

Phantom Plan instruments 3,183 15.70 —

Employee stock purchase plan instruments 31,659 $ 3.01 0.1

Total - Quarter ended June 30, 2024 1.1

Total - Year to date ended June 30, 2024 $ 13.8

Total - Year-to-date ended December 31, 2024 $ 11.3

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

3 unchanged sentences

The assumptions used to determine the grant date fair value are indicated below for awards granted to date during the current fiscal year.

November 28, 2023

December 3, 2024

Variables used in determining grant date fair value:

3 unchanged sentences

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 U.S.

Treasury zero-coupon yield in effect at the grant date with a term equal to the expected term.

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 units are expected to be outstanding.

At June 30, 2024, the outstanding Phantom Plan instruments had a fair value of $ 17.92 per instrument and our liability for Phantom Plan instruments was $ 4.1 million and is included within Other current liabilities for amounts related to instruments scheduled to vest in twelve months or less and Other noncurrent liabilities for amounts related to instruments scheduled to vest beyond twelve months.

Stock options generally vest ratably over three years on each anniversary date.

Compensation expense attributed to stock options is based on the fair value of the awards on their respective grant dates, using a Black-Scholes model.

At December 31, 2024, the outstanding Phantom Plan instruments had a fair value of $ 22.50 per instrument and our accrued liability for Phantom Plan instruments was $ 2.9 million and is included within Other current liabilities for amounts related to instruments scheduled to vest in twelve months or less and Other noncurrent liabilities for amounts related to instruments scheduled to vest beyond twelve months.

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

The assumptions used to determine the grant date fair value are indicated below for awards granted to date during the current fiscal year.

November 28, 2023

December 3, 2024

Variables used in determining grant date fair value:

3 unchanged sentences

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 U.S.

Treasury zero-coupon yield in effect at the grant date with a term equal to the expected term.

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.

A PRSU award consists of a target number of units that may be paid out at the end of a three-year award cycle.

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

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

Restricted stock units generally vest ratably over the life of the award, usually three years , on each anniversary date of the original grant.

4 unchanged sentences

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 excess payroll withholdings are returned to the employee.

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

The price for the 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.

We issued 168,897 shares of common stock to settle PRSUs vested during the nine months ended June 30, 2024;

no shares of common stock were issued to settle PRSUs during the three months ended June 30, 2024.

Additionally, we issued 696 and 260,110 shares of common stock to settle restricted stock units vested during the three and nine months ended June 30, 2024, respectively.

Finally, we issued 51,708 and 122,258 shares of common stock to settle stock options exercised during the three and nine months ended June 30, 2024, respectively.

Common shares totaling 249 and 120,162 were surrendered to us to pay the applicable tax withholding obligations of equity award participants for the three and nine months ended June 30, 2024, respectively.

Operating income included stock-based compensation expense of $ 3.7 million and $ 2.7 million during the three months ended June 30, 2024 and 2023, respectively.

Operating income included stock-based compensation of $ 10.1 million and $ 8.8 million during the nine months ended June 30, 2024 and 2023, respectively.

At June 30, 2024, there was approximately $ 12.3 million of unrecognized compensation expense related to stock-based compensation arrangements, which will be expensed through May 2027.

We excluded 24,636 and 249,933 stock-based compensation instruments from the calculations of diluted earnings per share in the three months ended June 30, 2024 and 2023, respectively, and 520,420 and 1,156,428 for the nine months ended June 30, 2024 and 2023, respectively, since their inclusion would have been antidilutive.

We issued 260,727 shares of common stock to settle PRSUs vested during the three months ended December 31, 2024.

Additionally, we issued 112,597 shares of common stock to settle restricted stock units vested during the three months ended

December 31, 2024.

Finally, we issued 94,877 shares of common stock to settle stock options exercised during the three months ended December 31, 2024.

Common shares totaling 156,060 were surrendered to us to pay the applicable tax withholding obligations of equity award participants for the three months ended December 31, 2024.

Operating income included stock-based compensation expense of $ 3.9 million and $ 3.4 million during the three months ended December 31, 2024 and 2023, respectively.

At December 31, 2024, there was approximately $ 16.9 million of unrecognized compensation expense related to stock-based compensation arrangements, which will be expensed through December 2027.

We excluded 133,543 and 712,164 stock-based compensation instruments from the calculations of diluted earnings per share in the three months ended December 31, 2024 and 2023, respectively, since their inclusion would have been antidilutive.

Supplemental Balance Sheet Information

Selected supplemental asset information is presented below:

June 30, September 30,

December 31, September 30,

(in millions)

Inventories, net:

Purchased components and raw materials $ 166.1 $ 163.6

29 unchanged sentences

Selected supplemental liability information is presented below:

June 30, September 30,

December 31, September 30,

(in millions)

9 unchanged sentences

Workers' compensation accrual 4.5 4.6

Strategic reorganization and other charges liabilities 4.1 6.6

Restructuring liabilities 3.6 3.4

Interest payable 0.8 5.3

14 unchanged sentences

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 following table summarizes information concerning our goodwill, all of which is within our Water Management Solutions segment, during the nine months ended June 30, 2024, in millions:

The following table summarizes information concerning our goodwill, all of which is within our Water Management Solutions segment, during the three months ended December 31, 2024, in millions:

Balance at September 30, 2024:

2 unchanged sentences

Goodwill, net 80.7

Activity during the nine months ended June 30, 2024:

Activity during the three months ended December 31, 2024:

Change in foreign currency exchange rates 0.8

Balance at June 30, 2024

Balance at December 31, 2024

Segment Information

1 unchanged sentence

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, and pressure management and control products and solutions.

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.

Summarized financial information for our segments is presented below:

Three months ended Nine months ended

June 30, June 30,

2024 2023 2024 2023

Three months ended

(in millions)

13 unchanged sentences

$ 11.1 $ 16.4

Strategic reorganization and other charges (benefits):

Strategic reorganization and other charges:

Water Flow Solutions $ — $ 0.2

1 unchanged sentence

Corporate 1.4 6.4

$ 2.9 $ 3.9 $ 12.7 $ 0.9

Capital expenditures:

2 unchanged sentences

Corporate — —

$ 12.2 $ 11.9 $ 28.0 $ 32.4

Water Flow Solutions disaggregated revenue:

23 unchanged sentences

Balance at September 30, 2024 $ ( 19.7 ) $ ( 11.1 ) $ ( 30.8 )

Current period other comprehensive income 1.8 4.5 6.3

Balance at June 30, 2024 $ ( 26.7 ) $ ( 15.7 ) $ ( 42.4 )

For the nine months ended June 30, 2024, pension actuarial amortization included in the condensed consolidated statements of comprehensive income as a component of pension expense other than service was $ 2.4 million, net of income tax of $ 0.6 million.

Current period other comprehensive income (loss) 0.4 ( 1.3 ) ( 0.9 )

Balance at December 31, 2024 $ ( 19.3 ) $ ( 12.4 ) $ ( 31.7 )

For the three months ended December 31, 2024, pension actuarial amortization included in the condensed consolidated statements of comprehensive income as a component of pension expense other than service was $ 0.6 million, net of income tax of $ 0.2 million.

Refer to Note 5.

Retirement Plans for further information.

For the nine months ended June 30, 2024, foreign currency translation included in the condensed consolidated statements of comprehensive income was $ 4.5 million, net of no income tax.

For the three months ended December 31, 2024, foreign currency translation included in the condensed consolidated statements of comprehensive income was $ 1.3 million net of no income tax.

Commitments and Contingencies

20 unchanged sentences

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 June 30, 2024.

Indemnifications .

Since the amounts of such costs cannot be reasonably estimated at this time, no amounts have been accrued for this matter at December 31, 2024.

On October 4, 2024, we delivered to the U.S.

Customs and Border Protections (“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 to our U.S.

importer 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.

Indemnification .

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.

6 unchanged sentences

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.

We have accrued for those pre-closing obligations that are considered probable and reasonably estimable.

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 offer warranties on many of our products, including products related to our metrology business line, which carry an extended warranty in many instances.

Our products are often utilized in harsh environmental conditions and are exposed to water and other exogenous factors such as flooding and other environmental conditions that are beyond our control.

We periodically monitor and analyze our warranty experience and costs.

Accordingly, should specific events or issues occur, additional warranty accruals may also be made relating to those issues or events.

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.

2 unchanged sentences

Subsequent Events

On July 24, 2024 , our Board of Directors declared a dividend of $ 0.064 per share on our common stock, payable on or about August 20, 2024 to stockholders of record at the close of business on August 9, 2024 .

On January 23, 2025 , our Board of Directors declared a dividend of $ 0.067 per share on our common stock, payable on or about February 21, 2025 , to stockholders of record at the close of business on February 10, 2025 .

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

What changed 10-Q

Item 1. Financial Statements