UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
x☒QUARTERLY REPORT PURSUANT TO SECTION 13 ORor 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended DecemberMarch 31, 20172024
o☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 001-32892
MUELLER WATER PRODUCTS, INC.
(Exact name of registrant as specified in its charter)

Delaware20-3547095
Delaware20-3547095
(State or other jurisdiction of(I.R.S. Employer
incorporation or organization)Identification No.)
1200 Abernathy Road N.E.
Suite 1200
Atlanta, GA 30328
(Address of principal executive offices)
(770) 206-4200
(Registrant'sRegistrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common stock, par value $0.01MWANew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x☒ No o☐
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x☒ No o☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act:
Large accelerated filer     x☒      Accelerated filer     o☐
Non-accelerated filer    o☐    Smaller reporting company o☐     Emerging growth company    ☐
(Do not check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). o☐ Yes x☒No
There were 158,754,223155,712,887 shares of common stock of the registrant outstanding at January 31, 2018.May 3, 2024.



TABLE OF CONTENTS

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Table of Contents

PART I
Item 1.FINANCIAL STATEMENTS
Item 1.     FINANCIAL STATEMENTS
MUELLER WATER PRODUCTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
 March 31,September 30,
 20242023
 (in millions, except share amounts)
Assets:
Cash and cash equivalents$179.2 $160.3 
Receivables, net of allowance for credit losses of $8.4 million and $7.3 million229.7 217.1 
Inventories, net307.3 297.9 
Other current assets32.4 31.5 
Total current assets748.6 706.8 
Property, plant and equipment, net309.1 311.7 
Intangible assets, net322.3 334.0 
Goodwill, net97.0 93.7 
Other noncurrent assets62.4 58.8 
Total assets$1,539.4 $1,505.0 
Liabilities and stockholders’ equity:
Current portion of long-term debt$0.7 $0.7 
Accounts payable96.7 102.9 
Other current liabilities114.9 115.2 
Total current liabilities212.3 218.8 
Long-term debt448.0 446.7 
Deferred income taxes64.7 73.8 
Other noncurrent liabilities59.9 54.2 
Total liabilities784.9 793.5 
Commitments and contingencies (Note 10.)
Preferred stock: par value $0.01 per share; 60,000,000 shares authorized; none outstanding at March 31, 2024, and September 30, 2023— — 
Common stock: par value $0.01 per share; 600,000,000 shares authorized; 155,681,228 and 155,871,932 shares outstanding at March 31, 2024, and September 30, 2023, respectively1.6 1.6 
Additional paid-in capital1,214.7 1,240.4 
Accumulated deficit(423.2)(481.8)
Accumulated other comprehensive loss(38.6)(48.7)
Total stockholders' equity754.5 711.5 
Total liabilities and stockholders' equity$1,539.4 $1,505.0 

The accompanying notes are an integral part of the condensed consolidated financial statements.
3
MUELLER WATER PRODUCTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)

 December 31, September 30,
 2017 2017
 (in millions, except share amounts)
Assets:   
Cash and cash equivalents$348.3
 $361.7
Receivables, net107.4
 145.3
Inventories155.2
 138.9
Other current assets26.5
 24.4
Total current assets637.4
 670.3
Property, plant and equipment, net122.3
 122.3
Intangible assets434.6
 439.3
Other noncurrent assets25.9
 26.4
Total assets$1,220.2
 $1,258.3
    
Liabilities and equity:   
Current portion of long-term debt$5.6
 $5.6
Accounts payable51.3
 82.5
Other current liabilities46.1
 53.5
Total current liabilities103.0
 141.6
Long-term debt474.3
 475.0
Deferred income taxes76.2
 115.1
Other noncurrent liabilities32.4
 37.1
Total liabilities685.9
 768.8
    
Commitments and contingencies (Note 11)   
    
Common stock: 600,000,000 shares authorized; 158,539,376 and 158,590,383 shares outstanding at December 31, 2017 and September 30, 2017, respectively1.6
 1.6
Additional paid-in capital1,482.4
 1,494.2
Accumulated deficit(900.5) (955.6)
Accumulated other comprehensive loss(50.2) (51.8)
Total Company stockholders’ equity533.3
 488.4
Noncontrolling interest1.0
 1.1
Total equity534.3
 489.5
Total liabilities and equity$1,220.2
 $1,258.3
Table of Contents

MUELLER WATER PRODUCTS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
 Three months endedSix months ended
March 31,March 31,
 2024202320242023
(in millions, except per share amounts)
Net sales$353.4 $332.9 $609.8 $647.7 
Cost of sales223.0 235.1 393.1 456.7 
Gross profit130.4 97.8 216.7 191.0 
Operating expenses:
Selling, general and administrative63.7 64.2 120.6 127.1 
Strategic reorganization and other charges (benefits)3.2 0.7 9.8 (3.0)
Total operating expenses66.9 64.9 130.4 124.1 
Operating income63.5 32.9 86.3 66.9 
Other expenses:
Pension expense other than service1.0 1.0 2.0 1.9 
Interest expense, net3.6 3.9 6.9 7.6 
Other expense— — 1.6 — 
Total other expenses, net4.6 4.9 10.5 9.5 
Income before income taxes58.9 28.0 75.8 57.4 
Income tax expense14.6 6.7 17.2 13.6 
Net income$44.3 $21.3 $58.6 $43.8 
Net income per share:
Basic$0.28 $0.14 $0.38 $0.28 
Diluted$0.28 $0.14 $0.37 $0.28 
Weighted average shares outstanding:
Basic156.0 156.3 156.0 157.9 
Diluted156.7 156.9 156.6 158.5 
Dividends declared per share$0.064 $0.061 $0.128 $0.122 

The accompanying notes are an integral part of the condensed consolidated financial statements.
4
MUELLER WATER PRODUCTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
 Three months ended
 December 31,
 2017 2016
 (in millions, except per share amounts)
Net sales$178.3
 $167.2
Cost of sales122.9
 115.4
Gross profit55.4
 51.8
Operating expenses:   
Selling, general and administrative39.8
 36.3
Gain on sale of idle property(9.0) —
Strategic reorganization and other charges3.9
 1.3
Total operating expenses34.7
 37.6
Operating income20.7
 14.2
Pension costs other than service0.2
 0.3
Interest expense, net5.2
 6.4
Income before income taxes15.3
 7.5
Income tax expense (benefit)(39.8) 2.1
Income from continuing operations55.1
 5.4
Income from discontinued operations—
 1.3
Net income$55.1
 $6.7
    
Income per basic share:   
Continuing operations$0.35
 $0.03
Discontinued operations—
 0.01
Net income$0.35
 $0.04
    
Income per diluted share:   
Continuing operations$0.34
 $0.03
Discontinued operations—
 0.01
Net income$0.34
 $0.04
    
Weighted average shares outstanding:   
Basic158.5
 161.8
Diluted160.0
 164.6
    
Dividends declared per share$0.04
 $0.03
Table of Contents

MUELLER WATER PRODUCTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)
 Three months endedSix months ended
March 31,March 31,
2024202320242023
 (in millions)
Net income$44.3 $21.3 $58.6 $43.8 
Other comprehensive income (loss), net of income tax:
Pension actuarial amortization0.6 0.6 1.2 1.2 
Foreign currency translation(4.4)(2.1)8.9 1.9 
Total other comprehensive income (loss), net of income tax(3.8)(1.5)10.1 3.1 
Comprehensive income$40.5 $19.8 $68.7 $46.9 

The accompanying notes are an integral part of the condensed consolidated financial statements.
5
MUELLER WATER PRODUCTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)
 Three months ended
 December 31,
 2017 2016
 (in millions)
Net income$55.1
 $6.7
Other comprehensive income (loss):   
Pension0.8
 1.0
Income tax effects(0.3) (0.4)
Foreign currency translation0.1
 (1.5)
Derivative fair value change1.6
 4.7
Income tax effects(0.6) (1.8)
 1.6
 2.0
Comprehensive income$56.7
 $8.7
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MUELLER WATER PRODUCTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY 
(UNAUDITED)
  Common  
stock		Additional
paid-in
capital		Accumulated
deficit		Accumulated
other
comprehensive
(loss) income		Total    
 (in millions)
Balance at September 30, 2023$1.6 $1,240.4 $(481.8)$(48.7)$711.5 
Net income— — 14.3 — 14.3 
Dividends declared— (10.0)— — (10.0)
Stock-based compensation— 2.6 — — 2.6 
Shares retained for employee taxes— (1.5)— — (1.5)
Common stock issued— 0.4 — — 0.4 
Other comprehensive income, net of tax— — — 13.9 13.9 
Balance at December 31, 2023$1.6 $1,231.9 $(467.5)$(34.8)$731.2 
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 

  Common  
stock		Additional
paid-in
capital		Accumulated
deficit		Accumulated
other
comprehensive
(loss) income		Total    
 (in millions)
Balance at September 30, 2022$1.6 $1,279.6 $(567.3)$(44.6)$669.3 
Net income— — 22.5 — 22.5 
Dividends declared— (9.5)— — (9.5)
Stock-based compensation— 1.8 — — 1.8 
Shares retained for employee taxes— (1.5)— — (1.5)
Common stock issued— 0.6 — — 0.6 
Other comprehensive income, net of tax— — — 4.6 4.6 
Balance at December 31, 2022$1.6 $1,271.0 $(544.8)$(40.0)$687.8 
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 
The accompanying notes are an integral part of the condensed consolidated financial statements.
6
MUELLER WATER PRODUCTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF EQUITY 
THREE MONTHS ENDED DECEMBER 31, 2017
(UNAUDITED)
 
  Common  
stock
 
Additional
paid-in
capital
 
Accumulated
deficit
 
Accumulated
other
comprehensive
loss
 Non-controlling interest Total    
 (in millions)
Balance at September 30, 2017$1.6
 $1,494.2
 $(955.6) $(51.8) $1.1
 $489.5
Net income (loss)—
 —
 55.1
 —
 (0.1) 55.0
Dividends declared—
 (6.3) —
 —
 —
 (6.3)
Stock repurchased under buyback program—
 (10.0) —
 —
 —
 (10.0)
Shares retained for employee taxes—
 (1.8) —
 —
 —
 (1.8)
Stock-based compensation—
 2.0
 —
 —
 —
 2.0
Common stock issued—
 4.3
 —
 —
 —
 4.3
Other comprehensive income, net of tax—
 —
 —
 1.6
 —
 1.6
Balance at December 31, 2017$1.6
 $1,482.4
 $(900.5) $(50.2) $1.0
 $534.3
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MUELLER WATER PRODUCTS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
 Six months ended
March 31,
 20242023
 (in millions)
Operating activities:
Net income$58.6 $43.8 
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation19.2 16.3 
Amortization13.7 14.0 
Loss (gain) on sale of assets0.4 (3.7)
Stock-based compensation4.5 4.2 
Pension cost2.3 2.2 
Deferred income taxes(9.9)0.1 
Inventory reserve provision5.4 1.7 
Other, net0.3 0.6 
Changes in assets and liabilities:
Receivables, net(12.4)(0.9)
Inventories(14.6)(44.5)
Other assets(3.9)(1.9)
Accounts payable(6.3)(19.3)
Other current liabilities(0.6)(30.9)
Other noncurrent liabilities5.5 (3.9)
Net cash provided by (used in) operating activities62.2 (22.2)
Investing activities:
Capital expenditures(15.8)(20.5)
Proceeds from sale of assets0.1 5.1 
Net cash used in investing activities(15.7)(15.4)
Financing activities:
Dividends paid(20.0)(19.0)
Common stock repurchased under buyback program(10.0)— 
Employee taxes related to stock-based compensation(1.6)(1.5)
Common stock issued1.5 1.0 
Debt issuance costs(0.8)— 
Payments for finance lease obligations(0.5)(0.6)
Net cash used in financing activities(31.4)(20.1)
Effect of currency exchange rate changes on cash3.8 0.4 
Net change in cash and cash equivalents18.9 (57.3)
Cash and cash equivalents at beginning of period160.3 146.5 
Cash and cash equivalents at end of period$179.2 $89.2 
The accompanying notes are an integral part of the condensed consolidated financial statements.
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MUELLER WATER PRODUCTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
 Three months ended
 December 31,
 2017 2016
 (in millions)
Operating activities:   
Net income$55.1
 $6.7
Less income from discontinued operations—
 1.3
Income from continuing operations55.1
 5.4
Adjustments to reconcile income from continuing operations to net cash provided by (used in) operating activities:   
Depreciation4.9
 4.9
Amortization5.7
 5.4
Stock-based compensation2.0
 1.8
Retirement plans0.7
 0.8
Deferred income taxes(39.7) (2.1)
Gain on sale of idle property(9.0) —
Other, net0.7
 0.3
Changes in assets and liabilities:   
Receivables38.4
 27.4
Inventories(16.3) (12.2)
Other assets(0.8) (0.8)
Liabilities(41.2) (50.8)
Net cash provided by (used in) operating activities of continuing operations0.5
 (19.9)
Investing activities:   
Capital expenditures(6.4) (4.2)
Proceeds from sales of assets7.4
 —
Net cash provided by (used in) investing activities of continuing operations1.0
 (4.2)
Financing activities:   
Dividends(6.3) (4.8)
Employee taxes related to stock-based compensation(1.8) (2.5)
Repayments of debt(1.2) (1.3)
Common stock issued4.3
 0.4
Stock repurchased under buyback program(10.0) —
Other—
 0.1
Net cash used in financing activities of continuing operations(15.0) (8.1)
Net cash flows from discontinued operations:   
  Operating activities—
 12.4
  Investing activities—
 (2.1)
Financing activities—
 (0.1)
Net cash provided by discontinued operations—
 10.2
Effect of currency exchange rate changes on cash0.1
 (0.7)
Net change in cash and cash equivalents(13.4) (22.7)
Cash and cash equivalents at beginning of period361.7
 195.0
Cash and cash equivalents at end of period$348.3
 $172.3
 Six months ended
March 31,
 20242023
 (in millions)
Supplemental cash flow information:
Cash paid for interest, net$6.2 $8.2 
Cash paid for income taxes, net$25.4 $21.1 
The accompanying notes are an integral part of the condensed consolidated financial statements.
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MUELLER WATER PRODUCTS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF AND FOR THE THREE AND SIX MONTHS ENDED DECEMBERMARCH 31, 20172024
(UNAUDITED)
Note 1.
Organization
Note 1.Organization and Basis of Presentation
Mueller Water Products, Inc., a Delaware corporation, together with its consolidated subsidiaries, operates in two business segments: InfrastructureWater Flow Solutions and Technologies. Infrastructure manufactures valves for water and gas systems, including butterfly,Water Management Solutions. Water Flow Solutions’ portfolio includes iron gate tapping, check, knife, plugvalves, specialty valves and ball valves, as well as dry-barrelservice brass products. Water Management Solutions’ portfolio includes fire hydrants, repair and wet-barrel fire hydrants. Technologies offersinstallation, natural gas, metering, systems, leak detection, pipe condition assessment and other relatedpressure management and control products and services.solutions. The “Company,” “we,” “us” or “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.
On January 6, 2017, we sold our former Anvil segment. Amounts applicable to Anvil have been classified as discontinued operations.
Infrastructure owns a 49% ownership interest in an industrial valve joint venture. Due to substantive control features in the operating agreement, all of the joint venture's assets, liabilities and results of operations are included in our consolidated financial statements. The net loss attributable to noncontrolling interest is included in selling, general and administrative expenses. Noncontrolling interest is recorded at its carrying value, which approximates fair value.
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.
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 andas well as in 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. These condensed consolidated financial statements do not include all information required by GAAP for complete financial statements and should be read in conjunction with the consolidated financial statements included in our Annual Report on Form 10-K for the year ended September 30, 2017.2023. In our opinion, all normal and recurring adjustments that we consider necessary for a fair financial statement presentation have been made. Certain reclassifications have been made to previously reported amounts to conform to the current presentation. The condensed consolidated balance sheet data at September 30, 20172023 was derived from our audited financial statements, but does not include all disclosures required by GAAP.statements.
On October 1, 2017, we adopted Financial Accountings Standards Board Accounting Standards Update No. 2017-07, which requires us to exclude fromOur business is seasonal as a result of the impact of cold weather conditions. Net sales and operating income the components of net periodic benefit cost other than service cost. Accordingly,historically have been lowest in the Condensed Consolidated Statementthree-month periods ending December 31 and March 31 when the northern United States and most of OperationsCanada generally face weather conditions that restrict significant construction activity. Therefore, the results of operations for the three and six months ended DecemberMarch 31, 2016,2024 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 have reclassified $0.2 million from selling, general and administrative expenses and $0.1 million from cost of salesrefer to pension costs other than service.a particular year, we mean our fiscal year ended or ending September 30 in that particular calendar year.
On February 15, 2017, we acquired Singer Valve. Singer had net sales of $3.7 million in the quarter ended December 31, 2017 and is included in Infrastructure.
HR-1, formerly referred to as the Tax Cuts and Jobs Act, was enacted on December 22, 2017 and made significant revisions to federal income tax laws, including lowering the corporate income tax rate to 21% from 35%, effective January 1, 2018. The effects of these revisions are discussed in Note 3.Accounting Pronouncements Not Yet Adopted
In May 2014,November 2023, the Financial Accounting Standards Board (“FASB”) issued newAccounting Standards Update (“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 for 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 the recognition of revenuefiscal years beginning after December 15, 2023, and requiring additional financial statement disclosures.interim periods within fiscal years beginning after December 15, 2024. Upon adoption, ASU 2023-07 should be applied retrospectively to all prior periods. We plan to adopt this guidance using the modified retrospective transition method beginning in the first quarter of fiscal 2019. We have completed our initial scoping and are implementing a project plan to evaluate revenue recognition practices for each revenue stream against the new requirements, to consider changes to the terms of our sales contracts, and to design and implement processes to quantify the effects of necessary changes. This work is ongoing, but at this time, we do not expect ASU 2023-07 to have a material impact on our financial statements and related disclosures.
In December 2023, the newFASB 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 amounts 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 materiallyhave a material impact on our stockholders' equity, net sales or operating income.financial statements and related disclosures.
On September 7, 2017,
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Strategic Reorganization and Other Charges

During the six months ended March 31, 2024, we announced a strategicrecorded approximately $9.8 million in Strategic reorganization plan designed to accelerate our product innovation and revenue growth. We have adopted a matrix management structure, where business teams have line and cross-functional responsibility for managing distinct product portfolios, and engineering, operations, sales and marketing and other functions are centralizedcharges, consisting of $1.5 million of expenses related to better alignthe cybersecurity incidents, expenses associated with business needs and generate greater efficiencies. Costs and expensesour previously announced leadership transition, severance as well as certain other transaction-related expenses. During the six months ended March 31, 2023, we recorded a $4.0 million gain, before tax, on the sale of our Aurora, Illinois facility which was partially offset by certain transaction-related expenses. Activity in the quarter ended December 31, 2017 for this plan, included inaccrued strategic reorganization and other charges, were primarily personnel-related.

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Index to Financial Statements


Activity in accrued restructuring, reported as part of otherOther current liabilities, is presented below.below:
Six months ended
March 31,
20242023
(in millions)
Beginning balance$6.6 $3.3 
Amounts accrued9.8 (3.0)
Amounts (paid) received, net(9.2)0.9 
Ending balance$7.2 $1.2 
 Three months ended
 December 31, 2017
 (in millions)
Beginning balance$3.3
Expense2.3
Payments(1.4)
Ending balance$4.2
New Markets Tax Credit Program

Note 2.Discontinued Operations and Divestitures
On December 4, 2017, we sold an idle property in Burlington, New Jersey that had previously been a plant in our former U.S. Pipe segment and recorded a gain of $9.0 million on our Corporate segment. We received $7.4 million in cash, recorded net current assets of $0.8 million and conveyed plant, property and equipment with a net carrying value of $0.4 million, and the buyer assumed related environmental liabilities with a carrying value of $1.2 million.
On January 6, 2017, we sold our former Anvil segment to affiliates of One Equity Partners. The table below presents a summary of the operating results for the Anvil discontinued operations during the quarter ended December 31, 2016. These operating results do not reflect what they would have been had Anvil not been sold.
 Three months ended
 December 31, 2016
 (in millions)
Net sales$83.1
Cost of sales62.8
Gross profit20.3
Operating expenses: 
Selling, general and administrative18.3
Other charges0.2
Total operating expenses18.5
Operating income1.8
Income tax expense0.5
Income from discontinued operations$1.3
Note 3.Income Taxes
On December 22, 2017, HR-1, formerly referred2020, we entered into a financing transaction with Wells Fargo Community Investment Holdings, LLC (“Wells Fargo”) related to asour 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 Tax Cuts and Jobs Act (“Act”), was enacted, which made significant revisions toNMTC, investors claim federal income tax laws, including loweringcredits over a period of seven years in connection with qualified investments in the corporate incomeequity 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 ratecredits, which are subject to 21%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.

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

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Note 2.    Revenue from 35% effective January 1, 2018, overhaulingContracts with Customers
We recognize revenue when control of promised products or services is transferred to our customers, in amounts that reflect the taxationconsideration 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 income earned outside the United Statesparties are identified, the payment terms are identified, the contract has commercial substance and eliminatingcollectability 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 limiting certain deductions.arrangement with a customer.
Our
Disaggregation of Revenue

Refer to Note 8. 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 (i.e., 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 tax assetsrevenue and liabilities are provided atclassified as current or noncurrent based on the enacted tax rates in effecttiming of when we expect to recognize the related tax expenses or benefits. The average of these rates varies slightly from year to year but historically has been approximately 39%. With the legislation changing enacted rates taking placerevenue. 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. Refer to Note 7. for current quarter, we have remeasuredand noncurrent amounts. Deferred revenue represents contract liabilities and is recorded when customers remit cash payments in advance of our satisfaction of performance obligations pursuant to contractual arrangements. Contract liabilities are reversed when the performance obligation is satisfied and revenue is recognized. During the three and six months ended March 31, 2024, approximately $1.9 million and $4.2 million, respectively of deferred tax items at an average raterevenue was recognized into revenue that was previously included in deferred revenue. Also, during the three and six months ended March 31, 2024, $2.4 million and $3.9 million of approximately 25%. This resultedadditional deferred revenue was recorded.

The table below represents the balances of our customer receivables and deferred revenue. Deferred revenue primarily consists of monitoring, leak detection, software and hosting services.

March 31,September 30,
20242023
(in millions)
Billed receivables$233.7 $218.1 
Unbilled receivables4.4 6.3 
Gross customer receivables238.1 224.4 
Allowance for credit losses(8.4)(7.3)
Receivables, net$229.7 $217.1 
Deferred revenue$8.9 $9.2 

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Performance Obligations
A performance obligation is a promise in a provisional income tax benefitcontract to transfer a distinct good or service to the customer. Our performance obligations are satisfied at a point in time for sales of $42.6 million,equipment and products or over time for our software hosting and leak detection monitoring services. Performance obligations are supported by customer contracts, which is subject to change, if necessary, as we continue to analyze certain aspectsprovide frameworks for the nature of the Actdistinct products or services. The transaction price is adjusted for our estimate of variable consideration which may include discounts and refine our calculations. rebates. To estimate variable consideration, we apply the expected value or the most likely amount method, based on whichever method most 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 reversal in the amount of cumulative revenue recognized will not occur or when uncertainties around 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 changesthat the period between when we transfer a product or service to this amounta customer and when a customer remits payment will be one year or less.

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 material.purchased separately from our products. On limited products, we offer extended warranties which may be purchased separately.
The Act also imposes
Costs to Obtain or Fulfill a one-time transition taxContract
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.

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 undistributed, non-previously taxed, post-1986 foreign “earningsnature of the product sold and profits” (as defined bybenefits received, we have applied the IRS) of certain U.S.-owned corporations. Determination of our transition tax liability requires uspractical expedient to calculate foreign earnings and profits going back to 1992, which in many cases requires information that is not readily available, and then to assess our historical overall foreign loss position and the applicability of certain foreign tax credits. We are gathering this information and completing these calculations, but we are unable at this time to reasonably estimate our transition tax liability,expense them as incurred and therefore we havedo not recorded any amount for this tax at December 31, 2017.capitalize the related costs.

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In addition to the deferred tax remeasurement item discussed above, our income tax benefit includes federal income tax expense on our current period earnings at a full-year blended rate
Table of 24.5%, since the rate reduction in the Act is effective on January 1, 2018. Contents
Note 3. Income Taxes

The reconciliation between the U.S. federal statutory income tax rate and the effective income tax rate is presented below.below:

Three months endedSix months ended
Three months ended
December 31,
2017 2016
March 31,March 31,
20242024202320242023
U.S. federal statutory income tax rate24.5 % 35.0 %U.S. federal statutory income tax rate21.0 %21.0 %21.0 %21.0 %
Adjustments to reconcile to the effective tax rate:   
State income taxes, net of federal benefit4.3
 3.9
Valuation allowance adjustment related to stock compensation(5.7) —
Excess tax benefits related to stock compensation(2.8) (7.6)
Domestic production activities deduction(1.6) (3.3)
State income taxes, net of federal benefit
State income taxes, net of federal benefit
Excess tax deficit related to stock-based compensation
Tax credits(0.9) (0.8)
Global Intangible Low-Taxed Income
Foreign income tax rate differential
Nondeductible compensation
Uncertain tax positions
Valuation allowances
Other0.5
 0.8
18.3 % 28.0 %
Remeasurement of deferred taxes for change in rates(278.4) —
Effective income tax rate(260.1)% 28.0 %Effective income tax rate24.8 %23.9 %22.7 %23.7 %

At DecemberMarch 31, 20172024 and September 30, 2017,2023, the gross liabilities for unrecognized income tax benefits were $3.1$4.0 million and $3.0$5.0 million, respectively.respectively, and are included in Other noncurrent liabilities.

Note 4.
Borrowing Arrangements
During the six months ended March 31, 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 March 31, 2024 related to this uncertain tax position.
Note 4. Borrowing Arrangements

The components of our long-term debt are presented below.as follows:
 March 31,September 30,
 20242023
 (in millions)
4.0% Senior Notes$450.0 $450.0 
Finance leases2.3 1.3 
Total debt452.3 451.3 
Less: deferred financing costs3.6 3.9 
Less: current portion of long-term debt0.7 0.7 
Long-term debt$448.0 $446.7 
 December 31, September 30,
 2017 2017
 (in millions)
ABL Agreement$—
 $—
Term Loan483.7
 484.8
Other1.7
 1.7
 485.4
 486.5
Less deferred financing costs5.5
 5.9
Less current portion5.6
 5.6
Long-term debt$474.3
 $475.0

ABL Agreement. At December 31, 2017, our asset basedAgreement. Our asset-based lending agreement, as amended, (“ABL Agreement”ABL”) consisted, is provided by a syndicate of banking institutions and consists of a revolving credit facility for up to $225$175.0 million in borrowings that matures the earlier of revolving credit borrowings,(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 Agreement permits us to increase the size of the credit facility by an additional $150$150.0 million in certain circumstances subject to adequate borrowing base availability. We

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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 borrow upbe extended from time to $25 million through swing linetime 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 may have up50 basis points for base rate loans when average availability is greater than 50% of the aggregate revolving commitments, and to $60175 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 $0.8 million in debt issuance costs in connection with the ABL amendment which were capitalized and will be amortized over the term of letters of credit outstanding.the ABL.

Borrowings under the ABL Agreement bear interest at a floating rate equal to LIBOR,SOFR plus aan adjustment of 10 basis points plus an applicable margin ranging from 125range of 150 to 150175 basis points, or a base rate, as defined in the ABL, Agreement, plus aan applicable margin ranging from 25range of 50 to 75 basis points. At March 31, 2024, the applicable margin for SOFR-based loans was 150 basis points and for base rate loans was 50 basis points. At December 31, 2017, the applicable rate was LIBOR plus 125 basis points.

The ABL Agreement terminates on July 13, 2021. We pay a commitment fee for any unused borrowing capacityis subject to mandatory prepayments if total outstanding borrowings under the ABL Agreementare greater than the aggregate commitments under the revolving credit facility or if we dispose of 25 basis points per annum.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 Agreement are secured by a first-priority perfected lien on all of our U.S. receivables and inventories,United States inventory, accounts receivable, certain cash balances and other supporting obligations. 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 March 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 Agreement.ABL. Excess availability based on DecemberMarch 31, 20172024 data was $162.6 million, as reduced by $12.2 million of outstanding letters of credit swap contract liabilities and $0.2 million of accrued fees and expensesexpenses.

4.0% Senior Unsecured Notes. On May 28, 2021, we privately issued $450.0 million of $19.8 million, was $96.3 million.

Term Loan. On November 25, 2014, we entered into a $500.0 million senior secured term loan (“Term Loan”). The proceeds from the Term Loan, along with other cash, were used to prepay our 7.375% Senior Subordinated Notes and 8.75%4.0% Senior Unsecured Notes (“4.0% Senior Notes”), which mature on June 15, 2029, and to satisfy and discharge our obligations under the respective indentures.
The Term Loan accruesbear interest at a floating rate equal to LIBOR, subject to a floor4.0%, paid semi-annually in June and December. We capitalized $5.5 million of 0.75%, plus 250 basis points. At December 31, 2017,financing costs which are being amortized over the weighted-averageterm of the 4.0% Senior Notes using the effective interest rate was 4.60%. We may voluntarily repay amounts borrowed under the Term Loan at any time. The principal amount of the Term Loan is required to be repaid in quarterly installments of $1.225 million, with any remaining principal due on November 25, 2021. The Term Loan is guaranteed by substantiallymethod. Substantially all of our U.S.United States subsidiaries and is secured by essentially all ofguarantee the 4.0% Senior Notes, which are subordinate to borrowings under our assets, although the ABL Agreement has a senior claim on certain collateral securing borrowings thereunder. The Term Loan is reported net of unamortized discount, which was $1.4 million at December 31, 2017.ABL. Based on quoted market prices, which is a Level 1 measurement, the outstanding Term Loan4.0% Senior Notes had a fair value of $490$407.7 million at DecemberMarch 31, 2017.2024.
The Term Loan
An indenture governing the 4.0% Senior Notes (“Indenture”) contains affirmativecustomary covenants and negative operatingevents of default, including covenants applicablethat limit our ability to usincur certain debt and our restricted subsidiaries.liens. There are no financial maintenance covenants associated with the Indenture. We believe we were compliantin compliance with these covenants at DecemberMarch 31, 20172024.

We may redeem some or all of the 4.0% Senior Notes at any time prior to June 15, 2024 at certain “make-whole” redemption prices and expecton or after June 15, 2024 at specified redemption prices. Additionally, we may redeem up to remain in compliance through December 31, 2018.
Note 5.
Derivative Financial Instruments
We are exposed to interest rate risk that we manage to some extent using derivative instruments. Under our April 2015 interest rate swap contracts, we receive interest calculated using 3-month LIBOR, subject to a floor40% of 0.75%, and pay fixed interest at 2.341%, on anthe aggregate notionalprincipal amount of $150.0 million. These swap contracts effectively fix the cash interest rate on $150.0 million4.0% Senior Notes at any time prior to June 15, 2024 with the net proceeds of our borrowings underspecified equity offerings at specified redemption prices set forth in the Term LoanIndenture. Upon a Change of Control, as defined in the Indenture, we
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could be required to offer to purchase the 4.0% Senior Notes at 4.841% from September 30, 2016 through September 30, 2021.a price equal to 101% of the outstanding principal amount if there is a Ratings Decline (as defined in the Indenture).
Note 5. Retirement Plan

We have designated our interest rate swap contracts as cash flow hedgesa defined benefit plan (“Pension Plan”) that we fund in accordance with its requirements in amounts sufficient to satisfy the minimum funding requirements of our future interest payments and elected to apply the “shortcut” method of assessing hedge effectiveness. As a result, the gains and losses on the swap contracts are reported as a component of other comprehensive loss and are reclassified into interest expense as the related interest payments are made. During the quarters ended December 31, 2017 and December 31, 2016, we included $0.4 million and $0.6 million of such interest expense in income from continuing operations, respectively.
applicable laws. The fair values of the swap contracts are presented below.
 December 31, September 30,
 2017 2017
 (in millions)
Interest rate swap contracts, designated as cash flow hedges:   
Other current liabilities$0.7
 $1.2
Other noncurrent liabilities0.2
 1.3
 $0.9
 $2.5
    
Currency swap contracts, not designated as hedges:   
Other noncurrent liabilities$1.3
 $1.3
The fair values and the classification of the fair values between current and noncurrent portions arePension Plan provides benefits based on calculated cash flows using publicly available interest rate forward rate yield curve information, butyears of service and compensation or at stated amounts due at the actual settlement dates are dependent on actual rates in effect at the settlement dates and may differ significantly from amounts shown above.for each year of service with an annual measurement date of September 30.


Note 6.
Retirement Plans
The components of net periodic benefit cost for our pension plansPension Plan are presented below.below:

Three months ended
December 31,
Three months endedThree months endedSix months ended
March 31,March 31,
2017 2016 2024202320242023
(in millions) (in millions)
Service cost$0.5
 $0.5
Pension costs other than service:   
Pension expense other than service:
Interest cost
Interest cost
Interest cost3.6
 3.6
Expected return on plan assets(4.2) (4.3)
Amortization of actuarial net loss0.8
 1.0
Pension expense other than service
Net periodic cost
0.2
 0.3
Net periodic benefit cost$0.7
 $0.8

The amortization of actuarial losses, net of income tax, is recorded as a component of otherOther comprehensive loss.income. For the three months ended March 31, 2024 and 2023, the amortization of actuarial net loss is shown net of income tax of $0.2 million and $0.3 million, respectively, in the condensed consolidated statements of comprehensive income. For the six months ended March 31, 2024 and 2023, the amortization of actuarial loss is shown net of income tax of $0.4 million and $0.6 million respectively, in the condensed consolidated statements of comprehensive income.

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Note 7.
Stock-based Compensation Plans
Note 6. Stock-based Compensation Plans

We have grantedgrant various forms of stock-based compensation, including stock options,market-based restricted stock units (“MRSUs”), restricted stock units, stock options and both cash-settled and stock-settled performance-based restricted stock units (“PRSUs”) under our Amended and Restated 2006 Mueller Water Products, Inc. Stock Incentive Plan (the “2006 Stock Plan”)., Phantom Plan instruments under our Mueller Water Products, Inc. 2012 Phantom Plan, and Employee stock purchase plan instruments under our 2006 Employee Stock Purchase Plan. Grants issued during the six months ended March 31, 2024 are as follows:
A PRSU
Number grantedWeighted average grant date fair value per instrumentTotal grant date fair value
(in millions)
Quarter ended December 31, 2023
MRSUs136,983 $18.11 $2.5 
PRSUs136,983 13.22 1.8 
Restricted stock units161,943 13.27 2.1 
Phantom Plan instruments230,523 13.22 3.0 
Non-qualified stock options457,356 3.96 1.8 
Employee stock purchase plan instruments31,139 $3.48 0.1 
Total - Quarter ended December 31, 2023$11.3 
Quarter ended March 31, 2024
Restricted stock units81,136 $15.59 $1.3 
Phantom Plan instruments2,544 15.71 — 
Employee stock purchase plan instruments35,998 $2.62 0.1 
Total - Quarter ended March 31, 20241.4 
Total - Year-to-date ended March 31, 2024$12.7 

An MRSU award represents a target number of units that may be paid out at the end of a multi-yearthree-year award cycle consistingbased on a calculation of our relative total shareholder return (“TSR”) performance as compared with the TSR of a seriesselected peer group. Settlements, in our common shares, will range from zero to two times the number of annualMRSUs granted, depending on our TSR performance periods coinciding with our fiscal years. After werelative to that of the peer group.
Compensation expense attributed to MRSUs is based on the fair value of the awards on their respective grant dates, as determined using a Monte Carlo model. For these awards, compensation expense is recognized even if the awards are not earned or vested. The assumptions used to determine the financial performance targets relatedgrant date fair value are indicated below for awards granted to PRSUs for a given performance period, typicallydate during the first quartercurrent fiscal year.

November 28, 2023
Variables used in determining grant date fair value:
Dividend yield2.00%
Risk-free rate4.50%
Expected term (in years)2.84

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 expected term represents the average period of that fiscal year, we consider that portion of a PRSU awardtime the units are expected to be granted. Thus,outstanding.

At March 31, 2024, the outstanding Phantom Plan instruments had a fair value of $16.09 per instrument and our liability for Phantom Plan instruments was $3.0 million and is included within Other current liabilities and Other noncurrent liabilities.

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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. 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
Variables used in determining grant date fair value:
Dividend yield1.94%
Risk-free rate4.33%
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 U.S. 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 granttarget number of units that may be paid out at the end of a three-year award cycle. Settlements, in the year of award and grants in the designated following years. Settlementour common shares, will range from zero to two times the number of PRSUs granted, depending on our financial performance againstrelative to the targets. As determined at

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 under the terms of award, PRSUs may settle in cash-value equivalentthe 2006 Stock Plan, if sooner) on a straight-line basis for each tranche of or directly in,each award. Fair values of restricted stock units are determined using the closing price of our common stock on the respective grant date.

Employee stock purchase plan instruments are shares of our common stock.
We awarded 171,288 stock-settled PRSUs in the quarter ended December 31, 2017 scheduled to settle in three years.
We issued 146,061 shares and 263,410 shares of common stock during the quarters ended December 31, 2017 and 2016, respectively, to settle PRSUs.
In addition to the PRSU activity, 213,532 restricted stock units vested during the quarter ended December 31, 2017.
We have granted cash-settled Phantom Plan instrumentspurchased by employees under the Mueller Water Products, Inc. Phantom Plan (“Phantom Plan”). At December 31, 2017, the outstanding Phantom Plan instruments had a fair value of $12.53 per instrument and our liability for Phantom Plan instruments was $1.2 million.
We granted stock-based compensation awards under the 2006 Stock Plan, the Mueller Water Products Inc. 2006 Employee Stock Purchase Plan (“ESPP”). 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 Phantom Planemployee. 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 six months ended March 31, 2024; no shares of common stock were issued to settle PRSUs during the three months ended DecemberMarch 31, 2017 as follows.2024. Additionally, we issued 112,654 and 259,414 shares of common stock to settle restricted stock units vested during the three and six months ended March 31, 2024, respectively. Finally, we issued 66,968 and 70,550 shares of common stock to settle stock options exercised during the three and six months ended March 31, 2024, respectively. Common shares totaling 9,952 and 119,913 were surrendered to us to pay the applicable tax withholding obligations of equity award participants for the three and six months ended March 31, 2024, respectively.

  Number granted Weighted average grant date fair value per instrument 
Total grant date fair value
(in millions)
Restricted stock units 171,288
 $12.41
 $2.1
Employee stock purchase plan instruments 35,099
 2.28
 0.1
Phantom Plan awards 160,672
 12.41
 2.0
PRSUs: 2018 award 57,092
 12.41
 0.7
2017 award 71,070
 12.41
 0.9
2016 award 71,072
 12.41
 0.9
      $6.7

Income from continuing operationsOperating income included stock-based compensation expense of $2.4$3.0 million and $2.7$3.4 million during the three months ended DecemberMarch 31, 20172024 and 2016,2023, respectively. Operating income included stock-based compensation of $6.4 million and $6.2 million during the six months ended March 31, 2024 and 2023, respectively. At DecemberMarch 31, 2017,2024, there was approximately $8.9$14.2 million of unrecognized compensation expense related to stock-based compensation arrangements, and 185,270 PRSUs that have been awarded for the 2019 and 2020 performance periods, for which performance goals have not been set.will be expensed through December 2026.

We excluded 70,996603,417 and 323,010 of998,607 stock-based compensation instruments from the calculations of diluted earnings per share in the three months ended March 31, 2024 and 2023, respectively, and 659,148 and 1,269,484 for the quarterssix months ended DecemberMarch 31, 20172024 and 2016,2023, respectively, since their inclusion would have been antidilutive.
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Note 8.
Note 7. Supplemental Balance Sheet Information
Selected supplemental balance sheetasset information is presented below.below:
 March 31,September 30,
 20242023
 (in millions)
Inventories:
Purchased components and raw materials$172.6 $176.9 
Work in process, net66.8 60.0 
Finished goods, net67.9 61.0 
Inventories, net$307.3 $297.9 
Other current assets:
Prepaid expenses$17.4 $17.8 
Non-trade receivables1.6 1.7 
Maintenance and repair supplies and tooling5.2 4.1 
Income taxes0.8 0.8 
Workers' compensation reimbursement receivable2.0 2.2 
Other current assets5.4 4.9 
Total other current assets$32.4 $31.5 
Property, plant and equipment:
Land$6.4 $6.4 
Buildings120.6 117.2 
Machinery and equipment529.0 525.8 
Construction in progress43.7 36.9 
Total property, plant and equipment699.7 686.3 
Accumulated depreciation(390.6)(374.6)
Property, plant and equipment, net$309.1 $311.7 
Other noncurrent assets:
Operating lease right-of-use assets$28.2 $23.6 
Maintenance and repair supplies and tooling20.7 21.1 
Workers' compensation reimbursement receivable3.3 2.4 
Pension asset5.8 6.6 
Note receivable1.8 1.8 
Deferred financing fees1.4 0.7 
Other noncurrent assets1.2 2.6 
Total other noncurrent assets$62.4 $58.8 
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 December 31, September 30,
 2017 2017
 (in millions)
Inventories:   
Purchased components and raw material$74.3
 $67.7
Work in process37.8
 35.6
Finished goods43.1
 35.6
 $155.2
 $138.9
    
Other current assets:   
Maintenance and repair tooling$3.2
 $3.3
Income taxes11.9
 10.9
Other11.4
 10.2
 $26.5
 $24.4
    
Property, plant and equipment:   
Land$5.5
 $5.6
Buildings51.4
 53.4
Machinery and equipment270.0
 266.7
Construction in progress25.2
 24.7
 352.1
 350.4
Accumulated depreciation(229.8) (228.1)
 $122.3
 $122.3
Other current liabilities:   
Compensation and benefits$18.2
 $26.9
Customer rebates8.1
 6.5
Taxes other than income taxes2.4
 3.2
Warranty3.7
 3.5
Income taxes0.8
 0.9
Environmental1.2
 1.3
Interest0.7
 0.6
Restructuring4.2
 3.3
Other6.8
 7.3
 $46.1
 $53.5
Selected supplemental liability information is presented below:
 March 31,September 30,
 20242023
 (in millions)
Other current liabilities:
Compensation and benefits$36.6 $33.8 
Customer rebates14.3 14.6 
Income taxes payable13.2 8.5 
Warranty accrual9.3 8.6 
Deferred revenue3.9 9.2 
Returned goods accrual6.9 6.7 
Taxes other than income taxes0.5 2.0 
Operating lease liabilities5.2 4.9 
Workers' compensation accrual4.0 4.0 
Strategic reorganization and other charges liabilities7.2 6.6 
Interest payable5.3 5.3 
Other current liabilities8.5 11.0 
Total other current liabilities$114.9 $115.2 
Other noncurrent liabilities:
Operating lease liabilities$24.1 $19.8 
Warranty accrual5.7 7.1 
Transition tax liability1.6 3.1 
Uncertain tax position liability4.0 5.0 
NMTC liability3.9 3.9 
Workers' compensation accrual6.0 5.9 
Asset retirement obligation4.2 4.2 
Deferred revenue5.0 — 
Deferred development grant2.5 2.5 
Other noncurrent liabilities2.9 2.7 
Total other noncurrent liabilities$59.9 $54.2 


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

Note 9.Balance at September 30, 2023:
Segment Information
Goodwill$817.8 
Accumulated impairment(724.1)
Goodwill, net93.7 
Activity during the six months ended March 31, 2024:
Change in foreign currency exchange rates3.3 
Balance at March 31, 2024$97.0 

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Note 8. Segment Information

We have two reportable 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, and pressure management and control products and solutions. Summarized financial information for our segments is presented below.below:

Three months endedSix months ended
March 31,March 31,
2024202320242023
 (in millions)
Net revenue, excluding intercompany:
Water Flow Solutions$205.8 $157.2 $347.1 $322.8 
Water Management Solutions147.6 175.7 262.7 324.9 
$353.4 $332.9 $609.8 $647.7 
Operating income (loss):
Water Flow Solutions$52.6 $15.2 $79.8 $39.4 
Water Management Solutions29.0 31.7 44.1 51.3 
Corporate(18.1)(14.0)(37.6)(23.8)
$63.5 $32.9 $86.3 $66.9 
Depreciation and amortization:
Water Flow Solutions$9.8 $7.8 $19.1 $15.5 
Water Management Solutions6.7 7.7 13.7 14.7 
Corporate— — 0.1 0.1 
$16.5 $15.5 $32.9 $30.3 
Strategic reorganization and other charges (benefits):
Water Flow Solutions$— $— $0.2 $— 
Water Management Solutions— 0.2 — 0.2 
Corporate3.2 0.5 9.6 (3.2)
$3.2 $0.7 $9.8 $(3.0)
Capital expenditures:
Water Flow Solutions$6.0 $7.8 $9.9 $15.6 
Water Management Solutions4.1 2.8 5.9 4.9 
Corporate— — — — 
$10.1 $10.6 $15.8 $20.5 
Water Flow Solutions disaggregated revenue:
Central$55.0 $44.0 $93.5 $88.0 
Northeast37.4 30.4 65.7 61.7 
Southeast53.2 28.6 90.3 62.0 
West48.3 36.4 78.9 85.6 
United States193.9 139.4 328.4 297.3 
Canada9.3 15.0 14.1 19.4 
Other international locations2.6 2.8 4.6 6.1 
$205.8 $157.2 $347.1 $322.8 
Water Management Solutions disaggregated revenue:
Central$41.4 $44.3 $70.6 $85.8 
Northeast32.7 40.6 59.5 71.8 
Southeast37.1 39.4 65.5 72.7 
West23.8 32.7 43.8 61.8 
United States135.0 157.0 239.4 292.1 
Canada7.4 12.6 13.1 19.9 
Other international locations5.2 6.1 10.2 12.9 
$147.6 $175.7 $262.7 $324.9 
20
 Three months ended
 December 31,
 2017 2016
 (in millions)
Net sales, excluding intercompany:   
Infrastructure$160.1
 $146.3
Technologies18.2
 20.9
 $178.3
 $167.2
Intercompany sales:   
Infrastructure$—
 $1.1
Technologies—
 —
 $—
 $1.1
Operating income (loss):   
Infrastructure$28.1
 $26.2
Technologies(4.7) (2.2)
Corporate(2.7) (9.8)
 $20.7
 $14.2
Depreciation and amortization:   
Infrastructure$9.1
 $9.0
Technologies1.4
 1.2
Corporate0.1
 0.1
 $10.6
 $10.3
Strategic reorganization and other charges:   
Infrastructure$—
 $0.1
Technologies0.1
 —
Corporate3.8
 1.2
 $3.9
 $1.3
Capital expenditures:   
Infrastructure$4.8
 $3.0
Technologies1.5
 1.1
Corporate0.1
 0.1
 $6.4
 $4.2
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Note 9. Accumulated Other Comprehensive Income (Loss)
Note 10.
Accumulated Other Comprehensive Loss
Accumulated other comprehensive lossincome (loss) is presented below.as follows:

  Pension actuarial amortization,
net of income tax		Foreign currency translation,
net of income tax		Total
(in millions)
Balance at September 30, 2023$(28.5)$(20.2)$(48.7)
Current period other comprehensive income1.2 8.9 10.1 
Balance at March 31, 2024$(27.3)$(11.3)$(38.6)

For the six months ended March 31, 2024, pension actuarial amortization included in the condensed consolidated statements of comprehensive income as a component of pension expense other than service was $1.6 million, net of income tax of $0.4 million. Refer to Note 5. Retirement Plans for further information. For the six months ended March 31, 2024, foreign currency translation included in the condensed consolidated statements of comprehensive income was $8.9 million, net of no income tax.

Note 10. Commitments and Contingencies
   Pension, net of tax Foreign currency translation Derivative instruments, net of tax Total
  
Balance at September 30, 2017$(47.0) $(3.3) $(1.5) $(51.8)
Current period other comprehensive income (loss)0.5
 0.1
 1.0
 1.6
Balance at December 31, 2017$(46.5) $(3.2) $(0.5) $(50.2)


Note 11.
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 materialmaterially adverse effect on our businessfinancial position, results of operations, cash flows or prospects.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 does not cover liabilities to the extent caused by us or the operation of our businesses after August 1999, nor does it cover liabilities arising with respect to businesses or sites acquired after August 1999. Since 2007, Tyco has engaged in multiple corporate restructurings, split-offs and divestitures. While none of these transactions directly affects the indemnification obligations of the Tyco indemnitors under the 1999 acquisition agreement, the result of such transactions is that the assets of, and control over, such Tyco indemnitors has changed. Should any of these Tyco indemnitors become financially unable or fail to comply with the terms of the indemnity, we may be responsible for such obligations or liabilities.
On July 13, 2010, Rohcan Investments Limited, the former owner of property leased by Mueller Canada Ltd. and located in Milton, Ontario, filed suit against Mueller Canada Ltd. and its directors seeking C$10.0 million in damages arising from the defendants’ alleged environmental contamination of the property and breach of lease. Mueller Canada Ltd. leased the property from 1988 through 2008. We are pursuing indemnification from a former owner for certain potential liabilities that are alleged in this lawsuit, and we have accrued for other liabilities not covered by indemnification.  On December 7, 2011, the Court denied the plaintiff’s motion for summary judgment.
The purchaser of U.S. Pipe has been identified as a “potentially responsible party” (“PRP”) under the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”) 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 EPA’sthe 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. Accordingly, becauseSince the amountamounts of such costs cannot be reasonably estimated at this time, no amounts hadhave been accrued for this matter at December 31, 2017.
Walter Energy. Each member of the Walter Energy consolidated group, which included us through December 14, 2006, is jointly and severally liable for the federal income tax liability of each other member of the consolidated group for any year in which it is a member of the group at any time during such year. Accordingly, we could be liable in the event any such federal income tax liability is incurred, and not discharged, by any other member of the Walter Energy consolidated group for any period during which we were included in the Walter Energy consolidated group.
Walter Energy effectively controlled all of our tax decisions for periods during which we were a member of the Walter Energy consolidated group for federal income tax purposes and certain combined, consolidated or unitary state and local income tax groups. Under the terms of an income tax allocation agreement between us and Walter Energy, dated May 26, 2006, we generally compute our tax liability on a stand-alone basis, but Walter Energy has sole authority to respond to and conduct all tax proceedings (including tax audits) relating to our federal income and combined state tax returns, to file all such tax returns on our behalf and to determine the amount of our liability to (or entitlement to payment from) Walter Energy for such previous periods.
As described further below, the IRS is currently alleging that Walter Energy owes substantial amounts for prior taxable periods (specifically, 1983-1994, 2000-2002 and 2005). As a matter of law, we are jointly and severally liable for any final tax determination, which means we would be liable in the event Walter Energy is unable to pay any amounts owed.

In July 2015, Walter Energy filed a petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code before the Bankruptcy Court for the Northern District of Alabama (“Chapter 11 Case”). During the pendency of the Chapter 11 Case, we monitored the proceeding to determine whether we could be liable for all or a portion of this federal income tax liability if it is incurred, and not discharged, for any period during which we were included in the Walter Energy consolidated group. On January 11, 2016, the IRS filed a proof of claim in the Chapter 11 Case, alleging that Walter Energy owes taxes, interest and penalties for the years 1983-1994, 2000-2002 and 2005 in an aggregate amount of $554.3 million ($229.1 million of which the IRS claims is entitled to priority status in the Chapter 11 Case).  The IRS asserts that its claim is based on an alleged settlement of Walter Energy’s tax liability for the 1983-1995 taxable periods in connection with Walter Energy’s prior bankruptcy proceeding in the United States Bankruptcy Court for the Middle District of Florida.  In the proof of claim, the IRS included an alternative calculation in the event the alleged settlement of the prior bankruptcy court is found to be non-binding, which provides for a claim by the IRS in an aggregate amount of $860.4 million ($535.3 million of which the IRS claims is entitled to priority status in the Chapter 11 Case).
According to a quarterly report on Form 10-Q filed by Walter Energy with the SEC on November 5, 2015 (“Walter November 2015 Filing”), at September 30, 2015, Walter Energy had $33.0 million of accruals for unrecognized tax benefits in connection with the matters subject to the IRS claims. In the Walter November 2015 Filing, Walter Energy stated it believed it had sufficient accruals to address any claims, including interest and penalties, and did not believe that any potential difference between any final settlements and amounts accrued would have a material effect on Walter Energy’s financial position, but such potential difference could be material to its results of operations in a future reporting period.
According to a Form 8-K filed by Walter Energy with the SEC on April 1, 2016 (“Walter April 2016 Filing”), on March 31, 2016, Walter Energy closed on the sale of substantially all of Walter Energy’s Alabama assets pursuant to the provisions of Sections 105, 363 and 365 of the Bankruptcy Code.  The Walter April 2016 Filing further stated that Walter Energy would have no further material business operations after April 1, 2016 and Walter Energy was evaluating its options with respect to the wind down of its remaining assets.  The asset sale did not impact the IRS’ proof of claim filed in the bankruptcy cases and the proof of claim, as well as the alleged tax liability thereunder, remain unresolved.2024.
On February 2, 2017, at the request of Walter Energy, the Bankruptcy Court for the Northern District of Alabama signed an order converting the Chapter 11 Case to a liquidation proceeding under Chapter 7 of the U.S. Bankruptcy Code, pursuant to which Walter Energy will be wound-down and liquidated (“Chapter 7 Case”). In its objection contesting such conversion, the IRS indicated its intent to pursue collection of amounts included in the Proof of Claim from former members of the Walter Energy consolidated group.
We cannot predict whether or to what extent we may become liable for the tax-related amounts of the Walter Energy consolidated group asserted in the IRS’ proof of claim filed in the bankruptcy cases, in part, because: (i) the amounts owed by the Walter Energy consolidated group for certain of the taxable periods from 1980 through 2006 remain unresolved; (ii) it is unclear what priority, if any, the IRS will receive in the Chapter 7 Case with respect to its claims against Walter Energy, and whether and to what extent funds will be available in the Chapter 7 Case to pay priority tax claims.  We also intend to vigorously assert any and all available defenses against any liability we may have as a member of the Walter Energy consolidated group.  However, we cannot currently estimate our liability, if any, relating to the tax-related liabilities of Walter Energy’s consolidated tax group for tax years prior to 2007, and such liability could have a material adverse effect on our business, financial condition, liquidity or results of operations.
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.
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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, weWe 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. 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.
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. We provide for costs relating to these matters when a loss is probable and the amount is reasonably estimable. Administrative costs related to these matters are expensed as incurred. The effect of the outcome of these matters on our future financial statements cannot be predicted with certainty as any such effect depends on the amount and timing of the resolution of such matters. 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 businessfinancial position, results of operations, cash flows or prospects.liquidity.
Note 12.
Note 11. Subsequent Events
On January 24, 2018,April 23, 2024, our boardBoard of directorsDirectors declared a dividend of $0.05$0.064 per share on our common stock, payable on or about FebruaryMay 20, 20182024 to stockholders of record at the close of business on February 9, 2018.May 10, 2024.




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Item 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Item 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the unaudited condensed consolidated financial statements and related notes thereto that appear elsewhere in this report. This report contains certain statements that may be deemed “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. federal securities laws. All statements that address activities, events or developments that we intend, expect, plan, project, believethe Company intends, expects, plans, projects, believes or anticipateanticipates will or may occur in the future are forward-looking statements.statements, including, without limitation, statements regarding outlooks, projections, forecasts, expectations, commitments, trend descriptions and the ability to capitalize on trends, value creation, Board of Directors and committee composition plans, long-term strategies and the execution or acceleration thereof, operational improvements, inventory positions, the benefits of capital investments, financial or operating performance including improving sales growth and driving increased margins, capital allocation and growth strategy plans, the Company’s product portfolio positioning and the demand for the Company’s products. Forward-looking statements are based on certain assumptions and assessments made by usthe Company in light of ourthe Company’s experience and perception of historical trends, current conditions and expected future developments.

Actual results and the timing of events may differ materially from those contemplated by the forward-looking statements due to a number of factors, including, regional, national or global political, economic,without limitation, legal, reputational, audit and financial risks resulting from previously reported cybersecurity incidents and possible future cybersecurity incidents, the effectiveness of the Company’s business competitive, market and regulatory conditionscontinuity plans related thereto, and the Company’s ability to recover under its cybersecurity insurance policies; logistical challenges and supply chain disruptions, geopolitical conditions, including the Israel-Hamas war, public health crises, or other events; inventory and in-stock positions of our distributors and end customers; an inability to realize the anticipated benefits from our operational initiatives, including our large capital investments in Chattanooga and Kimball, Tennessee, and Decatur, Illinois, plant closures, and reorganization and related strategic realignment activities; an inability to attract or retain a skilled and diverse workforce, including executive officers, increased competition related to the workforce and labor markets; an inability to protect the Company’s information systems against further service interruption, misappropriation of data or breaches of security; failure to comply with personal data protection and privacy laws; cyclical and changing demand in core markets such as municipal spending, residential construction, and natural gas distribution; government monetary or fiscal policies; the impact of adverse weather conditions; the impact of manufacturing and product performance; the impact of wage, commodity and materials price inflation; foreign exchange rate fluctuations; the impact of higher interest rates; the impact of warranty charges and claims, and related accommodations; the strength of our brands and reputation; an inability to successfully resolve significant legal proceedings or government investigations; compliance with environmental, trade and anti-corruption laws and regulations; climate change and legal or regulatory responses thereto; changing regulatory, trade and tariff conditions; the failure to integrate and/or realize any of the anticipated benefits of acquisitions or divestitures; an inability to achieve some or all of our Environmental, Social and Governance goals; and other factors that are described underin the section entitled “RISK FACTORS” in Item 1A.1A of our annual reportthe Company’s most recent Annual Report on Form 10-K forand later filings on Form 10-Q, as applicable.

Forward-looking statements do not guarantee future performance and are only as of the year ended September 30, 2017 (“Annual Report”).date they are made. The Company undertakes no duty to update its forward-looking statements except as required by law. Undue reliance should not be placed on any forward-looking statements. The Company does not haveYou are advised to review any intention or obligation to update forward-looking statements, except as required by law.
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. We manage our businesses and report operations through two business segments, Infrastructure and Technologies, based largely on the products sold and the customers served.
Overview
Organization
On October 3, 2005, Walter Energy acquired all outstanding shares of capital stock representing the Mueller Co. and Anvil businesses and contributed them to its U.S. Pipe business to form the Company. In June 2006, we completed an initial public offering of 28,750,000 shares of Series A common stock and in December 2006, Walter Energy distributed to its shareholders all of its equity interests infurther disclosures the Company consisting of all ofmakes on related subjects in subsequent Forms 10-K, 10-Q, 8-K and other reports filed with the Company’s outstanding shares of Series B common stock. On January 28, 2009, each share of Series B common stock was converted into one share of Series A common stockU.S. Securities and the Series A designation was discontinued.Exchange Commission.
On January 6, 2017, we sold our former Anvil segment. Amounts applicable to Anvil have been classified as discontinued operations.
Overview
Business
We expecthave two reportable segments: Water Flow Solutions and Water Management Solutions. Water Flow Solutions’ portfolio includes iron gate valves, specialty valves and service brass products. Water Flow Solutions represented 50% of our two primary end markets,fiscal 2023 net sales. 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 represented 50% of our fiscal 2023 net sales.

Approximately 60% to 65% of our 2023 net sales were associated with the repair and replacement of water infrastructure driven by municipal spending and new water infrastructure installation driven by residential construction to grow in 2018. We expect the residential construction market to grow faster than municipal spending.
Infrastructure
We estimate approximately 60% of Infrastructure’s 2017 net sales were for repair and replacement directly related to municipal water infrastructure, spending, approximately 25% to 30% were related to residential construction activity and approximately 5% to 10% of net sales were related to natural gas utilities.utilities and industrial applications.
Infrastructure
In October 2023, the Israel-Hamas war caused a temporary shutdown of our facility in Ariel, Israel. While we have reopened the facility, the war has caused supply interruptions and may hinder our ability to acquire the necessary materials we
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need to make our products. Supply disruptions from lack of access to materials have adversely impacted, and continue to adversely impact, our ability to produce and deliver our products from our facility in Ariel, Israel. Additionally, production at this facility has been adversely impacted by limited labor availability in the region. We have made investments in recruiting and training new team members, expanding our suppliers and expediting product shipments to increase production levels and meet customer delivery times.

As announced on October 28, 2023, we identified a cybersecurity incident impacting certain internal operations and information technology systems. We believe we have contained and eliminated the unauthorized access and activity. All of our facilities are fully operational and have returned to normalized operations.

The cybersecurity incident consisted of unauthorized access and deployment of ransomware by a third party to a portion of our internal information system infrastructure. The incident caused temporary disruptions and limitations of access to portions of our business applications supporting aspects of our operations including shipping, receiving and payment functions. Operational delays and investigation and remediation costs in connection with the incident adversely impacted our results for the first quarter of 2024; however, on a fiscal year-to-date basis, there was no impact to our consolidated net sales. We have restored the impacted applications and systems. As reported on November 29, 2023, we identified a separate cybersecurity incident, which primarily related to a system that was at the end of its useful life and was already in the process of being replaced in the ordinary course of business and the replacement of this system was concluded during our second quarter.
In the first quarter of fiscal 2024, we incurred approximately $1.5 million of expenses related to the cybersecurity incidents. We continue to analyze and remediate the impacts of the cybersecurity incidents, including making enhancements to our cybersecurity processes and analyzing the data accessed, exfiltrated or otherwise impacted in connection with the cybersecurity incidents.
Although we believe that our channel and customer inventory levels normalized during the first quarter of 2024, the external operating environment remains uncertain. We expect to continue to face challenges emanating from the higher interest rate environment, the Israel-Hamas war and labor inflation and availability. From a comparable perspective, in fiscal year 2023, we benefited from fulfilling an elevated backlog for certain products, which has now become more normalized as we have reduced short-cycle backlog across our portfolio, particularly with regard to iron gate valve and hydrant products. For fiscal year 2024, we anticipate that consolidated net sales will be flat to down two percent as compared with fiscal year 2023. We anticipate stable demand in the municipal repair and replacement end market driven by the aging water infrastructure despite budgetary pressures on municipalities. Additionally, we anticipate that new residential construction activity will stabilize relative to the challenges we experienced in fiscal 2023 where Census data indicates that total housing starts decreased 12.9% compared to 2022. In April 2024, Blue Chip Economic Indicators forecasted a 0.7% increase in housing starts for the calendar year 2024 as compared to the calendar year 2023. Finally, we anticipate that high interest rates will continue to negatively impact new lot and land development, depending on the geography.

For the remainder of fiscal 2024, we anticipate that inflation will continue to modestly impact manufacturing costs, primarily due to wage inflation but also raw materials and purchased parts. Inventory for the first half of fiscal 2024 experienced approximately 0.1% deflation. We expect external challenges to persist during the balance of fiscal year 2024. We will continue to monitor the market and economic conditions impacting our business and take appropriate actions to address inflationary and other cost pressures such as price increases, on valves, hydrantscost containment measures and gas products effective in February 2018 for its U.S. and Canadian markets. We believe that some customers may accelerate orders prior to the effective datesupplier management, among other things.



24
Table of the price increases.Contents
Technologies
The municipal market is the key end market for Technologies. These businesses are project-oriented and depend on customer adoption of their technology-based products and services. Mueller Systems is benefiting from its recent introduction of new, longer-range radio capabilities, and its growth strategy is focused on the AMI segment of the market. Mueller Systems’ 2018 first quarter AMI backlog was lower at December 31, 2017 than at December 31, 2016. Echologics had a greater number of projects under contract at at December 31, 2017 than at December 31, 2016.

Results of Operations

Three Months Ended DecemberMarch 31, 20172024 Compared to Three Months Ended DecemberMarch 31, 20162023

 Three months ended March 31, 2024
 Water Flow SolutionsWater Management SolutionsCorporate  Total    
 (in millions)
Net sales$205.8 $147.6 $— $353.4 
Gross profit$77.2 $53.2 $— $130.4 
Operating expenses:
Selling, general and administrative24.6 24.2 14.9 63.7 
Strategic reorganization and other charges— — 3.2 3.2 
Total operating expenses24.6 24.2 18.1 66.9 
Operating income (loss)$52.6 $29.0 $(18.1)63.5 
Non-operating expenses:
Pension expense other than service1.0 
Interest expense, net3.6 
Income before income taxes58.9 
Income tax expense14.6 
Net income$44.3 
 Three months ended March 31, 2023
 Water Flow SolutionsWater Management SolutionsCorporateTotal
 (in millions)
Net sales$157.2 $175.7 $— $332.9 
Gross profit$37.2 $60.6 $— $97.8 
Operating expenses:
Selling, general and administrative22.0 28.7 13.5 64.2 
Strategic reorganization and other charges— 0.2 0.5 0.7 
Total operating expenses22.0 28.9 14.0 64.9 
Operating income (loss)$15.2 $31.7 $(14.0)32.9 
Non-operating expenses:
Pension benefit other than service1.0 
Interest expense, net3.9 
Income before income taxes28.0 
Income tax expense6.7 
Net income$21.3 

25
 Three months ended December 31, 2017
 Infrastructure Technologies Corporate   Total    
 (in millions)
Net sales$160.1
 $18.2
 $—
 $178.3
Gross profit$52.5
 $2.9
 $—
 $55.4
Operating expenses:       
Selling, general and administrative24.4
 7.5
 7.9
 39.8
Gain on sale of idle property—
 —
 (9.0) (9.0)
Strategic reorganization and other charges—
 0.1
 3.8
 3.9
 24.4
 7.6
 2.7
 34.7
Operating income (loss)$28.1
 $(4.7) $(2.7) 20.7
Pension costs other than service      0.2
Interest expense, net      5.2
Income before income taxes      15.3
Income tax benefit      (39.8)
Income from continuing operations      $55.1
        
 Three months ended December 31, 2016
 Infrastructure Technologies Corporate Total
 (in millions)
Net sales$146.3
 $20.9
 $—
 $167.2
Gross profit$47.6
 $4.2
 $—
 $51.8
Operating expenses:       
Selling, general and administrative21.3
 6.4
 8.6
 36.3
Other charges0.1
 —
 1.2
 1.3
 21.4
 6.4
 9.8
 37.6
Operating income (loss)$26.2
 $(2.2) $(9.8) 14.2
Pension costs other than service      0.3
Interest expense, net      6.4
Income before income taxes      7.5
Income tax expense      2.1
Income from continuing operations      $5.4
Table of Contents
Consolidated Analysis
Net sales forin the quarterthree months ended DecemberMarch 31, 2017 increased $11.12024 were $353.4 million to $178.3 million from $167.2 million due primarily to increased shipment volumes, including the addition of Singer Valve, and improved pricing at Infrastructure, which were partially offset by volume decline at Technologies.
Gross profit for the quarter ended December 31, 2017 increased $3.6 million to $55.4 million from $51.8as compared with $332.9 million in the prior year period, an increase of $20.5 million or 6.2%, primarily due toas a result of higher pricing across most product lines and overall increased shipment volumes, improved pricingvolumes.

Gross profit in the three months ended March 31, 2024 was $130.4 million as compared with $97.8 million in the prior year period, an increase of $32.6 million or 33.3%, primarily as a result of an increase in both favorable manufacturing performance and Infrastructure's improved operating efficiencies and other manufacturing cost savings,pricing. These increases were partially offset by increased material costs.Cost of sales inflation of approximately 2% while inflation impacted Gross profit by approximately 3%. As a result, Gross margin increased to 31.1% forwas 36.9% in the quarterthree months ended DecemberMarch 31, 20172024 as compared to 31.0%with 29.4% in the prior year period.

Selling, general and administrative expenses (“SG&A”&A”) forin the quarterthree months ended DecemberMarch 31, 2017 increased to $39.82024 were $63.7 million from $36.3as compared with $64.2 million in the prior year period, a decrease of $0.5 million or 0.8%, primarily due primarily to the acquisition of Singer Valve during the second quarter of last yeara decrease in salary and higher personnel-related expenses.benefit expense associated with our restructuring activities, as well as lower third-party fees, and engineering materials, partially offset by approximately 3% inflation, an increase in bad debt expense and incentives. SG&A as a percentage of net sales was 22.3%18.0% and 19.3% for the three months ended March 31, 2024 and March 31, 2023, respectively.

Strategic reorganization and other charges in the quarterthree months ended DecemberMarch 31, 20172024 were $3.2 million and 21.7%primarily consisted of expenses associated with our previously announced leadership transition, severance and certain transaction-related expenses. Strategic reorganization and other charges for the three months ended March 31, 2023 were $0.7 million and primarily consisted of severance and certain transaction-related expenses.

Net interest expense in the three months ended March 31, 2024 was $3.6 million as compared with $3.9 million in the prior year period.

Interest expense, net declined $1.2period, a decrease of $0.3 million in the quarter ended December 31, 2017 comparedor 7.7%, primarily due to the prior year period.higher interest income as a result of higher interest rates, partially offset by lower capitalized interest. The components of net interest expense net are provided below.below:

Three months ended
March 31,
20242023
 (in millions)
4.0% Senior Notes$4.5 $4.5 
Deferred financing costs amortization0.2 0.3 
ABL Agreement0.3 0.2 
Capitalized interest— (0.8)
Other interest expense0.1 0.2 
Total interest expense5.1 4.4 
Interest income(1.5)(0.5)
Interest expense, net$3.6 $3.9 

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Table of Contents
 Three months ended
 December 31,
 2017 2016
 (in millions)
Term Loan$4.8
 $5.1
Interest rate swap contracts0.4
 0.6
Deferred financing costs amortization0.5
 0.4
ABL Agreement0.2
 0.2
Other interest expense0.1
 0.2
 6.0
 6.5
Interest income(0.8) (0.1)
 $5.2
 $6.4
On December 22, 2017, tax legislation was enacted that made significant revisions to federal income tax laws, including lowering the corporate income tax rate to 21 percent from 35 percent, overhauling the taxation of income earned outside the United States and eliminating or limiting certain deductions. Since the effective date of the tax rate change was January 1, 2018, we are subject to a blended federal statutory tax rate of 24.5 percent throughout fiscal 2018.
For the quarter ended December 31, 2017, we reported a net income tax benefit of $39.8 million, which was driven by a benefit of $42.6 million related to remeasurement of our net deferred income tax liabilities using the enacted tax rates in effect when we expect to recognize the related tax expenses or benefits. Other than this remeasurement benefit, income tax expense was $2.8 million, or 18.3 percent of income before income taxes. For the 2017 first quarter, income tax expense was 28.0 percent of income before income taxes. The reconciliation between the U.S. federal statutory income tax rate and the effective income tax rate is presented below.below:

Three months ended
Three months ended
December 31,
2017 2016
March 31,March 31,
202420242023
U.S. federal statutory income tax rate24.5 % 35.0 %U.S. federal statutory income tax rate21.0 %21.0 %
Adjustments to reconcile to the effective tax rate:   
State income taxes, net of federal benefit4.3
 3.9
Valuation allowance adjustment related to stock compensation(5.7) —
Excess tax benefits related to stock compensation(2.8) (7.6)
Domestic production activities deduction(1.6) (3.3)
State income taxes, net of federal benefit
State income taxes, net of federal benefit
Tax credits(0.9) (0.8)
Tax credits
Tax credits
Global Intangible Low-Taxed Income
Foreign income tax rate differential
Nondeductible compensation
Uncertain tax positions
Other0.5
 0.8
18.3 % 28.0 %
Remeasurement of deferred taxes for change in rates(278.4)% — %
Other
Other
Effective income tax rate(260.1)% 28.0 %Effective income tax rate24.8 %23.9 %
Also under this legislation, we are subject to a one-time transition tax on undistributed foreign earnings, but the amount of this tax is not reasonably estimable at this time. Accordingly, no provision for this tax has been recorded, but will be recorded later in 2018.
Segment Analysis
Infrastructure
Water Flow Solutions

Net sales forin the quarterthree months ended DecemberMarch 31, 2017 increased 9.4% to $160.12024 were $205.8 million as compared to $146.3with $157.2 million in the prior year period, an increase of $48.6 million or 30.9%, primarily due toas a result of higher shipment volumes the addition of Singer Valve and favorable pricing.higher pricing across most product lines.

Gross profit forin the quarterthree months ended DecemberMarch 31, 2017 increased to $52.52024 was $77.2 million from $47.6as compared with $37.2 million in the prior year period, due to increased shipmentan increase of $40.0 million or 107.5%. This increase was primarily a result of higher volumes improved operatingacross most product lines, favorable manufacturing performance driven by overhead, material and labor efficiencies, as well as higher pricing. Additionally, inflation negatively impacted Cost of sales by approximately 2% and other manufacturing cost savings.Gross profit by approximately 4%. As a result, Gross margin increased to 32.8% forwas 37.5% in the quarterthree months ended DecemberMarch 31, 2017 compared to 32.5%2024 and 23.7% in the prior year period.


SG&A forin the quarterthree months ended DecemberMarch 31, 20172024 was $24.6 million as compared with $22.0 million in the prior year period, an increase of $2.6 million or 11.8%, primarily as a result of higher incentives, inflation of approximately 3%, as well as increased travel expenses partially offset by lower salary and benefit expense associated with our restructuring activities, and third-party fees. SG&A as a percentage of net sales was 12.0% and 14.0% in the three months ended March 31, 2024 and 2023, respectively.

Water Management Solutions

Net sales in the three months ended March 31, 2024 were $147.6 million as compared with $175.7 million in the prior year period, a decrease of $28.1 million or 16.0%, as a result of lower volumes across most products lines partially offset by higher pricing across most product lines. Net sales were impacted nominally by the Israel-Hamas war.

Gross profit in the three months ended March 31, 2024 was $53.2 million as compared with $60.6 million in the prior year period, a decrease of $7.4 million or 12.2%. The decrease was primarily a result of lower volumes across most product lines and impacts of the Israel-Hamas war, partially offset by favorable manufacturing performance driven by material efficiencies and lower supply chain costs and higher pricing. Gross margin was 36.0% in the three months ended March 31, 2024 as compared with 34.5% in the prior year period.

SG&A in the three months ended March 31, 2024 was $24.2 million as compared with $28.7 million in the prior year period, a decrease of $4.5 million or 15.7%, primarily due to $24.4lower salary and benefit expense associated with our restructuring activities, third-party fees and engineering material expenses, which were partially offset by increased costs related to incentives as well as approximately 4% inflation and increased bad debt expense. SG&A as a percentage of net sales was 16.4% and 16.3% in the three months ended March 31, 2024 and 2023, respectively.

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Corporate

SG&A in the three months ended March 31, 2024 was $14.9 million from $21.3as compared with $13.5 million in the prior year period, an increase of $1.4 million or 10.4%, primarily as a result of higher incentive costs and third-party fees, as well as approximately 3% inflation.

Six Months Ended March 31, 2024 Compared to Six Months Ended March 31, 2023

 Six months ended March 31, 2024
 Water Flow SolutionsWater Management SolutionsCorporate  Total    
 (in millions)
Net sales$347.1 $262.7 $— $609.8 
Gross profit$123.8 $92.9 $— $216.7 
Operating expenses:
Selling, general and administrative43.8 48.8 28.0 120.6 
Strategic reorganization and other charges0.2 — 9.6 9.8 
Total operating expenses44.0 48.8 37.6 130.4 
Operating income (loss)$79.8 $44.1 $(37.6)86.3 
Non-operating expenses:
Pension expense other than service2.0 
Interest expense, net6.9 
Other expense1.6 
Income before income taxes75.8 
Income tax expense17.2 
Net income$58.6 
 Six months ended March 31, 2023
 Water Flow SolutionsWater Management SolutionsCorporateTotal
 (in millions)
Net sales$322.8 $324.9 $— $647.7 
Gross profit$83.8 $107.2 $— $191.0 
Operating expenses:
Selling, general and administrative44.4 55.7 27.0 127.1 
Strategic reorganization and other charges (benefits)— 0.2 (3.2)(3.0)
Total operating expenses44.4 55.9 23.8 124.1 
Operating income (loss)$39.4 $51.3 $(23.8)66.9 
Non-operating expenses:
Pension benefit other than service1.9 
Interest expense, net7.6 
Income before income taxes57.4 
Income tax expense13.6 
Net income$43.8 

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Consolidated Analysis

Net sales in the six months ended March 31, 2024 were $609.8 million as compared with $647.7 million in the prior year period. SG&A was 15.2% and 14.6%a decrease of $37.9 million or 5.9%, primarily as a result of a decrease in net sales for the quarters ended December 31, 2017 and 2016, respectively. These increases in SG&A were primarily due tovolumes partially offset by higher personnel-related expenses and the additional SG&A of Singer Valve.pricing across most product lines.
Technologies
Net salesGross profit in the quartersix months ended DecemberMarch 31, 2017 declined to $18.22024 was $216.7 million from $20.9as compared with $191.0 million in the prior year period, an increase of $25.7 million or 13.5%, primarily dueas a result of higher pricing and favorable manufacturing performance related to lower AMI shipment volumes,labor, overhead, material and logistic efficiencies, partially offset by overall lower volumes. As a result, Gross margin increased leak detection sales.
Gross profit600 basis points to 35.5% in the quartersix months ended DecemberMarch 31, 2017 was $2.9 million2024 as compared to $4.2 millionwith 29.5% in the prior year period. Gross margin declined to 15.9%

Selling, general and administrative expenses (“SG&A”) in the quartersix months ended DecemberMarch 31, 20172024 were $120.6 million as compared to 20.1% in the prior year period. These declines were primarily due to lower shipment volumes.
SG&A increased to $7.5 million in the quarter ended December 31, 2017 compared to $6.4with $127.1 million in the prior year period, a decrease of $6.5 million or 5.1%, primarily due to personnel-related expenses.a decrease in salary and benefit expense associated with our restructuring activities, third-party fees, commission, and engineering materials expense, partially offset by higher costs associated with approximately 3% inflation, the impact of foreign currency fluctuation and higher incentives. SG&A increased to 41.2%as a percentage of net sales was 19.8% and 19.6% for the quartersix months ended DecemberMarch 31, 2017 from 30.6% of net sales2024 and March 31, 2023, respectively.

Strategic reorganization and other charges in the prior year period.six months ended March 31, 2024 were $9.8 million, primarily consisting of expenses associated with our previously announced leadership transition, approximately $1.5 million of expenses related to the cybersecurity incidents, severance, and certain transaction-related expenses. Strategic reorganization and other charges for the six months ended March 31, 2023 were a benefit of $3.0 million, which primarily consisted of a $4.0 million gain, before tax, on the sale of our Aurora, Illinois facility, which was partially offset by certain transaction-related expenses.
Corporate
SG&A was $7.9 millionNet interest expense in the quartersix months ended DecemberMarch 31, 20172024 was $6.9 million as compared to $8.6with $7.6 million in the prior year period.period, a decrease of $0.7 million or 9.2%, primarily due to higher interest income as a result of higher interest rates, partially offset by lower capitalized interest. The components of net interest expense are provided below:

Six months ended
March 31,
20242023
 (in millions)
4.0% Senior Notes$9.0 $9.0 
Deferred financing costs amortization0.5 0.6 
ABL Agreement0.5 0.4 
Capitalized interest(0.1)(1.5)
Other interest expense0.3 0.3 
Total interest expense10.2 8.8 
Interest income(3.3)(1.2)
Interest expense, net$6.9 $7.6 

Other expense in the six months ended March 31, 2024 was $1.6 million from the release of an indemnification receivable related to an expired uncertain tax position. There was no Other expense in the six months ended March 31, 2023.

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The reconciliation between the U.S. federal statutory income tax rate and the effective income tax rate is presented below:

 Six months ended
March 31,
20242023
U.S. federal statutory income tax rate21.0 %21.0 %
Adjustments to reconcile to the effective tax rate:
State income taxes, net of federal benefit3.4 3.4 
Excess tax deficit related to stock-based compensation0.1 0.3 
Tax credits(2.1)(1.5)
Global Intangible Low-Taxed Income0.2 0.8 
Foreign income tax rate differential(0.8)(1.6)
Nondeductible compensation1.0 0.6 
Uncertain tax positions(1.6)— 
Valuation allowances— (0.2)
Other1.5 0.9 
Effective income tax rate22.7 %23.7 %


During the six months ended March 31, 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.

Segment Analysis

Water Flow Solutions

Net sales in the six months ended March 31, 2024 were $347.1 million as compared with $322.8 million in the prior year period, an increase of $24.3 million or 7.5%, primarily as a result of higher pricing and higher volumes across most product lines.

Gross profit in the six months ended March 31, 2024 was $123.8 million as compared with $83.8 million in the prior year period, an increase of $40.0 million or 47.7%. Gross margin was 35.7% in the six months ended March 31, 2024 and 26.0% in the prior year period. This increase was primarily a result of higher pricing across most product lines, favorable manufacturing performance driven by material, labor, overhead, and logistic efficiencies, and higher volumes across most product lines. Additionally, Cost of sales and Gross profit were negatively impacted by approximately 1% inflation.

SG&A in the six months ended March 31, 2024 was $43.8 million as compared with $44.4 million in the prior year period, a decrease of $0.6 million or 1.4%, primarily as a result of lower salary and benefit expense associated with our restructuring activities, and third-party fees, partially offset by approximately 3% inflation and increased incentives. SG&A as a percentage of net sales was 12.6% and 13.8% in the six months ended March 31, 2024 and 2023, respectively.

Water Management Solutions

Net sales in the six months ended March 31, 2024 were $262.7 million as compared with $324.9 million in the prior year period, a decrease of $62.2 million or 19.1%, primarily as a result of lower volumes across most product lines partially offset by higher pricing across most product lines.

Gross profit in the six months ended March 31, 2024 was $92.9 million as compared with $107.2 million in the prior year period, a decrease of $14.3 million or 13.3%. This decrease was primarily a result of lower volumes, offset by pricing and favorable manufacturing performance. Gross margin was 35.4% in the six months ended March 31, 2024 and 33.0% in the prior year period. Additionally, Cost of sales and Gross margin were impacted approximately 1% by deflation.
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SG&A in the six months ended March 31, 2024 was $48.8 million as compared with $55.7 million in the prior year period, a decrease of $6.9 million or 12.4%, primarily due to lower salary and benefit expense associated with our restructuring activities, third-party fees, and engineering materials expense, partially offset by unfavorable foreign currency fluctuation, and higher costs associated with approximately 4% inflation and increased incentives. SG&A as a percentage of net sales was 18.6% and 17.1% in the six months ended March 31, 2024 and 2023, respectively.

Corporate

SG&A in the six months ended March 31, 2024 was $28.0 million as compared with $27.0 million in the prior year period, an increase of $1.0 million or 3.7%, primarily as a result of higher costs associated with approximately 3% inflation, increased incentives, higher third-party fees and unfavorable foreign currency fluctuation, partially offset by lower salary and benefit expense associated with our restructuring activities, and lower travel expense.

Liquidity and Capital Resources
We had cash and cash equivalents on hand of $348.3$179.2 million at DecemberMarch 31, 20172024 and $96.3$162.6 million of additional borrowing capacity under our ABL Agreement based on DecemberMarch 31, 2017 data, which, along with cash generated by operations, would be our source of incremental liquidity. Undistributed earnings from our subsidiaries in Canada and China are considered to be permanently invested outside the United States.2024 data. At DecemberMarch 31, 2017,2024, cash and cash equivalents included $12.1$76.2 million, $1.7 million and $7.2$9.0 million in Israel, Canada, and China, respectively.
We expect the recently enacted tax law changesdeclared a quarterly dividend of $0.064 per share on April 23, 2024, payable on or about May 20, 2024 to benefit our liquidity through reductionstockholders of record as of May 10, 2024, which will result in overall income tax liability and through provisions allowing immediate deductibility for capital assets placed in service in the next five years. This benefit will be partially offset by payment of the transition tax discussed above. However, the transition tax may be paid over eight years, and we do not expect any payments to have a material liquidity impact in any particular year.an estimated $10.0 million cash outlay.
We repurchased shares$10.0 million of our outstanding common stock for $10 million during the quartersix months ended DecemberMarch 31, 2017,2024 under our publicly announced share repurchase program, and as of March 31, 2024, we had $180$80.0 million remaining onunder our share repurchase authorization at that date.authorization.
The ABL Agreement and Term Loan4.0% Senior Notes contain customary representations and warranties, covenants and provisions governing an event of default.  TheThese covenants restrictlimit our ability to engage in certain specified activities, including but not limited to the payment of dividends and the redemption of our common stock.
Cash flows fromNet cash provided by operating activities was $62.2 million during the six months ended March 31, 2024 as compared with net cash used in operating activities of continuing operations are categorized below.
 Three months ended
 December 31,
 2017 2016
 (in millions)
Collections from customers$216.1
 $194.6
Disbursements, other than interest and income taxes(211.3) (203.5)
Interest payments, net(4.4) (5.6)
Income tax refunds (payments), net0.1
 (5.4)
Cash provided by (used in) operating activities$0.5
 $(19.9)
Collections from customers were higher during the three months ended December 31, 2017 compared to the prior year period primarily due to the timing of cash receipts and net sales growth.
Increased disbursements, other than interest and income taxes, during the three months ended December 31, 2017 reflect higher purchasing activity, higher costs for raw materials, and differences in the timing of expenditures.
Income tax payments were lower during the three months ended December 31, 2017 compared to the prior year period because we began the current year quarter with U.S. federal income taxes prepaid.

Capital expenditures were $6.4 million in the three months ended December 31, 2017 compared to $4.2$22.2 million in the prior year period. We estimate 2018The increase in net operating cash flow was primarily driven by higher net income and improvements in working capital compared with the prior year period, including a reduction in Inventory purchases as well as a lesser impact of Accounts payable and Other current liabilities.
Capital expenditures were $15.8 million in the six months ended March 31, 2024 as compared with $20.5 million in the prior year period. Capital expenditures decreased primarily as a result of lower expenditures associated with the new Decatur foundry as compared with the prior year period. For the fiscal year 2024, we have provided guidance that our capital expenditures willare expected to be between $40$40.0 million and $48 million, although we are also evaluating possibilities for additional capital expenditures in 2018.$45.0 million.
We anticipate that our existing cash, cash equivalents and borrowing capacity combined with our expected operating cash flows will be sufficient to meet our anticipated operating expenses,needs, income tax payments, capital expenditures and debt service obligations as they become due through December 31, 2018.the twelve months from the date of this filing. However, our ability to make these payments will depend partly uponlargely on our future operating performance, which willmay be affected by general economic, financial, competitive, legislative, regulatory, business and other factors beyond our control.

ABL Agreement
At December 31, 2017, theOur ABL Agreement consistedis provided by a syndicate of banking institutions and consists of a revolving credit facility for up to $225$175.0 million in borrowings that matures the earlier of revolving credit borrowings,(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 Agreement permits us to increase the size of the credit facility by an additional $150$150.0 million in certain circumstances subject to adequate borrowing base availability. We

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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 borrow upbe extended from time to $25 million through swing linetime 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 may have up50 basis points for base rate loans when average availability is greater than 50% of the aggregate revolving commitments, and to $60175 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 $0.8 million in debt issuance costs in connection with the ABL amendment which were capitalized and will be amortized over the term of letters of credit outstanding.the ABL.

Borrowings under the ABL Agreement bear interest at a floating rate equal to LIBOR,SOFR plus aan adjustment of 10 basis points plus an applicable margin ranging from 125range of 150 to 150175 basis points, or a base rate, as defined in the ABL, Agreement, plus aan applicable margin ranging from 25range of 50 to 75 basis points. At March 31, 2024, the applicable margin for SOFR-based loans was 150 basis points and for base rate loans was 50 basis points. At December 31, 2017, the applicable LIBOR-based margin was 125 basis points.

The ABL Agreement terminates on July 13, 2021. We pay a commitment fee for any unused borrowing capacity under the ABL Agreement of 25 basis points per annum.
The ABL Agreement is subject to mandatory prepayments if total outstanding borrowings under the ABL Agreement are greater than the aggregate commitments under the revolving credit facility or if we dispose of overdue accounts receivable in certain circumstances. The borrowing base under the ABL Agreement is equal to the sum of (a) 85% of the value of eligible accounts receivable and (b) the lesser of (i) 70% of the value of eligible inventoriesinventory or (ii) 85% of the net orderly liquidation value of the value of eligible inventories,inventory, less certain reserves. Prepayments can be made at any time with nowithout penalty.

Substantially all of our U.S.United States subsidiaries are borrowers under the ABL Agreement and are jointly and severally liable for any outstanding borrowings. Our obligations under the ABL Agreement are secured by a first-priority perfected lien on all of our U.S. inventories,United States inventory, accounts receivable, certain cash balances and other supporting obligations.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 March 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 March 31, 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 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. 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. 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 ABL Agreement.outstanding 4.0% Senior Notes had a fair value of $407.7 million at March 31, 2024.
Term Loan
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 March 31, 2024.

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We had $485.1 million face value outstanding undermay redeem some or all of the Term Loan at December 31, 2017. Term Loan borrowings accrue interest at a floating rate equal to LIBOR, subject to a floor of 0.75%, plus 250 basis points. We may voluntarily repay amounts borrowed under the Term Loan4.0% Senior Notes at any time. Thetime prior to June 15, 2024 at certain “make-whole” redemption prices and on or after June 15, 2024 at specified redemption prices. Additionally, we may redeem up to 40% of the aggregate principal amount of the Term Loan is4.0% Senior Notes at any time prior to June 15, 2024 with the net proceeds of specified equity offerings at specified redemption prices as set forth in the Indenture. Upon a Change of Control, as defined in the Indenture, we could be required to be repaidoffer 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 quarterly installments of $1.225 million. The Term Loan matures on November 25, 2021. The Term Loan is guaranteed by substantially all of our U.S. subsidiaries and secured by essentially all of our assets, although the ABL Agreement has a senior claim on certain collateral securing borrowings thereunder.Indenture).

Our corporate credit rating and the credit rating for our debt and outlook are presented below.below:

Moody’s  Standard & Poor’s
Moody’s   Standard & Poor's
December 31, September 30, December 31, September 30,
2017 2017 2017 2017
March 31,March 31,September 30,March 31,September 30,
20242024202320242023
Corporate credit ratingBa3 Ba3 BB- BB-Corporate credit ratingBa1Ba1BB
ABL AgreementNot rated Not rated Not rated Not ratedABL AgreementNot ratedNot rated
Term LoanBa3 Ba3 BB BB
4.0% Senior Notes4.0% Senior NotesBa1Ba1BB
OutlookStable Stable Stable StableOutlookStableStable


These ratings are not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time by the assigning rating agencies.

Material Cash Requirements

We enter into a variety of contractual obligations as part of our normal operations in addition to capital expenditures. As of March 31, 2024, we had (i) debt obligations related to our $450.0 million 4.0% Senior Notes which mature in 2029 and include annual cash interest payments of $18.0 million in 2024 through 2029, (ii) cumulative cash obligations of $36.6 million for operating leases through 2033 and $2.3 million for finance leases through 2028, and (iii) purchase obligations for raw materials and other parts of approximately $105.3 million which we expect to incur during the next 12 months and $0.9 million beyond March 31, 2025. Additionally, we may continue to invest to strengthen our systems, cybersecurity training, policies, programs, response plans and other similar measures. We expect to fund these cash requirements from cash on hand and cash generated from operations.

Off-Balance Sheet Arrangements
We do not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as “structured finance”finance” or “special purpose”purpose” entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. In addition, at DecemberMarch 31, 20172024, we did not have any undisclosed borrowings, debt, derivative contracts or synthetic leases. Therefore, we were not exposed to any financing, liquidity, market or credit risk that could have arisen had we engaged in such relationships.

We use letters of credit and surety bonds in the ordinary course of business to ensure the performance of contractual obligations. At DecemberMarch 31, 2017,2024, we had $17.5$12.2 million of letters of credit and $35.6$13.7 million of surety bonds outstanding.

Seasonality

Our business is dependent upon the construction industry, which is seasonal due toas a result of the impact of cold weather conditions. Net sales and operating income historically have historically been lowest in the quarterlythree-month periods ending December 31 and March 31 when the northern United States and allmost of Canada generally face weather conditions that restrict significant construction activity.

Critical Accounting Estimates

The preparation of financial statements in accordance with GAAP requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosure of contingent assets and liabilities. These estimates are based upon experience and on various other assumptions we believe to be reasonable under the circumstances. Actual results may differ from these estimates. We consider an accounting estimate to be critical if changes in the estimate that are reasonably likely to occur over time or the use of reasonably different estimates could have a material impact on our financial condition or results of operations. Our critical accounting estimates can be found in the “Critical Accounting Estimates” section
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in Management’s Discussion and Analysis of Financial Condition and Results of Operations included in the Company’s 2023 Annual Report on Form 10-K. There have been no changes in the Company’s determination of critical accounting estimates since September 30, 2023.

Item 4.CONTROLS AND PROCEDURES
During the quarter ended December 31, 2017, there wereItem 4.    CONTROLS AND PROCEDURES

There have been no changes in our internal control over financial reporting thatwhich have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.reporting during the quarter ended March 31, 2024.

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 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 our Chief Financial Officer have concluded, based on an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended) by our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, that such disclosure controls and procedures were effective as of the end of the period covered by this report.

Our management, including theour Chief Executive Officer and our Chief Financial Officer, does not expect that our disclosure controls can prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. There are inherent limitations in all control systems, including the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of one or more persons. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and, while our disclosure controls and procedures are designed to be effective under circumstances where they should reasonably be expected to operate effectively, there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Because of the inherent limitations in any control system, misstatements due to error or fraud may occur and not be detected.
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PART II OTHER INFORMATION
Item 1.LEGAL PROCEEDINGS
Item 1.    LEGAL PROCEEDINGS

Refer to the information provided in Note 11.10. to the Notes to the Condensed Consolidated Financial Statements presented in Item 11. of Part I of this report.

Item 1A.
Item 1A.     RISK FACTORS
Recent changes in U.S. tax law may have a significant impact on our Company

On December 22, 2017, HR-1, formerly referred to as the Tax Cuts and Jobs Act, (“Act”) was signed into law, significantly impacting several sections of the Internal Revenue Code. The Act, among other things, reduces the corporate tax rate to 21% from 35%, limits the deductibility of interest expense and executive compensation and implements a modified territorial tax system which includes a one-time transition tax on deemed repatriated earnings of foreign subsidiaries. The Act requires complex computations to be performed that were not previously required in U.S. tax law, judgments to be made in interpretation of the provisions of the Act and estimates in calculations, and the preparation and analysis of information not previously relevant or regularly produced. We are continuing to examine the impact of the Act, including certain provisions that will become applicable to us in fiscal year 2019 related to base erosion anti-abuse tax (“BEAT”), global intangible low-taxed income (“GILTI”), and other provisions that could adversely affect our effective tax rate in the future. The U.S. Treasury Department, the IRS, and other standard-setting bodies could interpret or issue guidance on how provisions of the Act will be applied or otherwise administered that is different from our interpretation. Furthermore, because there may be additional state income tax implications, we will continue to monitor changes in state and local tax laws to determine if state and local taxing authorities intend to conform or deviate from changes to U.S. federal tax legislation as a result of the Act.


In addition to the risk factor above and other information set forth in this report, you should carefully consider the factors discussed in PART I, “Item 1A. RISK FACTORS” in our 2023 Annual Report on Form 10-K, each of which could materially affect our business, financial condition or operating results. These described risks are not the only risks facing us. Additional risks and uncertainties not known to us or that we deem to be immaterial also may materially adversely affect our business, financial condition or operating results.

Item 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
DuringItem 2.    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

In 2015, we announced the quarter ended December 31,authorization of a stock repurchase program for up to $50.0 million of our common stock. The program does not commit us to a particular timing or quantity of purchases, and we may suspend or discontinue the program at any time. In 2017, we announced an increase to the authorized amount of this program to $250.0 million.

We repurchased 636,789 shares of our common stock including shares repurchasedduring the three months ended March 31, 2024 pursuant to this authorization, and as of March 31, 2024, we had $80.0 million remaining under our existing share repurchase authorization andauthorization.

During the three months ended March 31, 2024, 9,952 shares were surrendered to us to pay the tax withholding obligations of participants in connection with the lapsingvesting of restrictions on restricted stock units,equity awards.

PeriodTotal number of shares purchasedAverage price paid per shareTotal number of shares purchased as part of publicly announced plans or programsMaximum dollar value of shares that may yet be purchased under the plans or programs (in millions)
January 1-31, 2024— $— — $90.0 
February 1-29, 2024646,741 15.68 636,789 80.0 
March 1-31, 2024— — — $80.0 
Total646,741 $15.68 636,789 

Item 5.     OTHER INFORMATION

(c) No officers or directors, as follows.defined in Rule 16a-1(f), adopted, modified 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 second quarter of fiscal 2024.
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Period Total number of shares purchased Average price paid per share Total number of shares purchased as part of publically announced plans or programs 
Maximum dollar value of shares that may yet be purchased under the plans or programs
 (in millions)
October 1-31, 2017 —
 $—
 —
 $—
November 1-30, 2017 845,390
 12.15
 823,739
 —
December 1-31, 2017 122,753
 12.35
 —
 —
Total 968,143
 $12.17
 823,739
 $—
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Item 6.EXHIBITS
Item 6. EXHIBITS
Exhibit No.Document
3.1

10.20.5**10.1*
10.2

10.22.2*10.3+*

10.29.2**
Fourth Amendment to Employment Agreement, dated December 27, 2017, 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.Paul McAndrew.

10.29.3**31.1*

10.30.2**
Amendment to Executive Change -In-Control Severance Agreement, dated December 12, 2017, by and between Mueller Water Products and J. Scott Hall. Incorporated by reference to Exhibit 10.1 to Mueller Water Products, Inc. Form 8-K (File No. 001-32892) filed on December 13, 2017.

31.1*
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.2002.
31.2*
32.1*
32.2*
101*
104*Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).
*     Filed with this quarterly report
**+    Management compensatory plan, contract or arrangement
*     Filed or furnished with this quarterly report

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
MUELLER WATER PRODUCTS, INC.
Date:February 8, 2018May 7, 2024By:/s/ Michael S. NancarrowSuzanne G. Smith
Michael S. NancarrowSuzanne G. Smith
Chief Accounting Officer


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