10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x                              QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2019

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)

Delaware	20-3547095
(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’s telephone number, including area code)

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 

(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 158,362,740 shares of common stock of the registrant outstanding at April 30, 2019, which trade under the ticker symbol MWA on the New York Stock Exchange.

PART I

Item 1. FINANCIAL STATEMENTS

MUELLER WATER PRODUCTS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
	March 31,			September 30,
	2019			2018
	(in millions, except share amounts)
Assets:
Cash and cash equivalents	$	134.3		$	347.1
Receivables, net	167.3			164.3
Inventories	205.9			156.6
Other current assets	27.6			17.5
Total current assets	535.1			685.5
Property, plant and equipment, net	176.0			150.9
Goodwill	84.5			12.1
Intangible assets	450.3			408.1
Other noncurrent assets	34.3			35.3
Total assets	$	1,280.2		$	1,291.9
Liabilities and equity:
Current portion of long-term debt	$	0.8		$	0.7
Accounts payable	69.1			90.0
Other current liabilities	104.4			76.4
Total current liabilities	174.3			167.1
Long-term debt	444.9			444.3
Deferred income taxes	84.3			79.2
Other noncurrent liabilities	27.9			36.5
Total liabilities	731.4			727.1
Commitments and contingencies (Note 12)
Common stock: 600,000,000 shares authorized; 158,249,164 and 157,332,121 shares outstanding at March 31, 2019 and September 30, 2018, respectively	1.6			1.6
Additional paid-in capital	1,433.2			1,444.5
Accumulated deficit	(860.1		)	(850.0		)
Accumulated other comprehensive loss	(27.8		)	(32.8		)
Total Company stockholders’ equity	546.9			563.3
Noncontrolling interest	1.9			1.5
Total equity	548.8			564.8
Total liabilities and equity	$	1,280.2		$	1,291.9

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

1

MUELLER WATER PRODUCTS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
	Three months ended				Six months ended
	March 31,				March 31,
	2019		2018		2019			2018
	(in millions, except per share amounts)
Net sales	$	234.0	$	233.2	$	426.8		$	411.5
Cost of sales	159.2		158.7		291.9			281.6
Gross profit	74.8		74.5		134.9			129.9
Operating expenses:
Selling, general and administrative	45.7		42.7		86.7			82.5
Gain on sale of idle property	—		—		—			(9.0		)
Strategic reorganization and other charges	6.9		1.9		10.1			5.8
Total operating expenses	52.6		44.6		96.8			79.3
Operating income	22.2		29.9		38.1			50.6
Other expenses (income):
Pension costs other than service	1.0		0.3		0.9			0.5
Interest expense, net	5.9		5.2		11.4			10.4
Walter Energy Accrual	0.5		—		37.9			—
Total other expenses	7.4		5.5		50.2			10.9
Income (loss) before income taxes	14.8		24.4		(12.1		)	39.7
Income tax expense (benefit)	3.9		14.2		(2.0		)	(25.6		)
Net income (loss)	$	10.9	$	10.2	$	(10.1	)	$	65.3
Net income (loss) per share:
Basic	$	0.07	$	0.06	$	(0.06	)	$	0.41
Diluted	$	0.07	$	0.06	$	(0.06	)	$	0.41
Weighted average shares outstanding:
Basic	158.2		158.3		157.9			158.4
Diluted	159.2		159.4		157.9			159.6
Dividends declared per share	$	0.05	$	0.05	$	0.10		$	0.09

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

2

MUELLER WATER PRODUCTS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
	Three months ended						Six months ended
	March 31,						March 31,
	2019			2018			2019			2018
	(in millions)
Net income (loss)	$	10.9		$	10.2		$	(10.1	)	$	65.3
Other comprehensive income (loss):
Pension	2.2			0.8			2.7			1.6
Income tax effects	(0.7		)	(0.2		)	(0.8		)	(0.5		)
Foreign currency translation	4.3			(0.4		)	3.1			(0.3		)
Derivative fair value change	—			2.4			—			4.0
Income tax effects	—			(0.8		)	—			(1.4		)
	5.8			1.8			5.0			3.4
Comprehensive income (loss)	$	16.7		$	12.0		$	(5.1	)	$	68.7

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

3

MUELLER WATER PRODUCTS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF EQUITY  (UNAUDITED)
	Three months ended						Six months ended
	March 31,						March 31,
	2019			2018			2019			2018
	(in millions)
Common stock
Balance, beginning of period	$	1.6		$	1.6		$	1.6		$	1.6
Change in common stock at par value	—			—			—			—
Balance, end of period	1.6			1.6			1.6			1.6
Additional paid-in-capital
Balance, beginning of period	1,440.2			1,482.4			1,444.5			1,494.2
Dividends declared	(7.9		)	(8.0		)	(15.8		)	(14.3		)
Stock repurchased under buyback program	—			(10.0		)	—			(20.0		)
Shares retained for employee taxes	(0.2		)	(0.3		)	(1.4		)	(2.1		)
Stock-based compensation	0.6			1.5			2.3			3.5
Stock issued under stock compensation plan	0.5			2.1			3.6			6.4
Balance, end of period	1,433.2			1,467.7			1,433.2			1,467.7
Accumulated deficit
Balance, beginning of period	(871.0		)	(900.5		)	(850.0		)	(955.6		)
Net income (loss)	10.9			10.2			(10.1		)	65.3
Balance, end of period	(860.1		)	(890.3		)	(860.1		)	(890.3		)
Accumulated other comprehensive income (loss)
Balance, beginning of period	(33.6		)	(50.2		)	(32.8		)	(51.8		)
Other comprehensive income (loss)	5.8			1.8			5.0			3.4
Balance, end of period	(27.8		)	(48.4		)	(27.8		)	(48.4		)
Non-controlling interest
Balance, beginning of period	1.7			1.0			1.5			1.1
Net income (loss)	0.2			0.2			0.4			0.1
Balance, end of period	1.9			1.2			1.9			1.2
Total stockholders' equity	$	548.8		$	531.8		$	548.8		$	531.8
Cash dividends declared per common share	$	0.05		$	0.05		$	0.10		$	0.09

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

4

MUELLER WATER PRODUCTS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
	Six months ended
	March 31,
	2019			2018
	(in millions)
Operating activities:
Net income (loss)	$	(10.1	)	$	65.3
Adjustments to reconcile income to net cash provided by (used in) operating activities:
Depreciation	12.6			10.1
Amortization	12.9			11.4
Stock-based compensation	2.3			3.5
Retirement plans	3.2			1.5
Deferred income taxes	(3.8		)	(38.6		)
Gain on sale of idle property	—			(9.0		)
Other, net	1.7			2.1
Changes in assets and liabilities:
Receivables	3.7			(6.8		)
Inventories	(32.2		)	(17.5		)
Other assets	(10.1		)	(2.0		)
Walter Energy Accrual	37.9			—
Other liabilities	(47.2		)	(18.4		)
Net cash provided by (used in) operating activities	(29.1		)	1.6
Investing activities:
Acquisition, net of cash received	(127.5		)	—
Capital expenditures	(30.5		)	(14.4		)
Proceeds from sales of assets	—			7.4
Net cash used in investing activities	(158.0		)	(7.0		)
Financing activities:
Dividends	(15.8		)	(14.3		)
Repayment of Krausz debt	(13.2		)	—
Employee taxes related to stock-based compensation	(1.4		)	(2.1		)
Repayment of debt	—			(2.4		)
Common stock issued	3.6			6.4
Stock repurchased under buyback program	—			(20.0		)
Other	0.1			(0.1		)
Net cash used in financing activities	(26.7		)	(32.5		)
Effect of currency exchange rate changes on cash	1.0			0.1
Net change in cash and cash equivalents	(212.8		)	(37.8		)
Cash and cash equivalents at beginning of period	347.1			361.7
Cash and cash equivalents at end of period	$	134.3		$	323.9

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

5

MUELLER WATER PRODUCTS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED MARCH 31, 2019

Note 1. Organization

Mueller Water Products, Inc., a Delaware corporation, together with its consolidated subsidiaries, operates in two business segments: Infrastructure and Technologies. Infrastructure manufactures valves for water and gas systems, including butterfly, iron gate, tapping, check, knife, plug and ball valves, as well as dry-barrel and wet-barrel fire hydrants and a broad line of pipe connection and repair products, such as clamps and couplings used to repair leaks. Technologies offers metering systems, leak detection, pipe condition assessment and other related products and services. 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.

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 income or 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 consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”), which require us to make certain estimates and assumptions that affect the reported amounts of assets, liabilities, sales and expenses and the disclosure of contingent assets and liabilities for the reporting periods. Actual results could differ from those estimates. All significant intercompany balances and transactions have been eliminated. These condensed consolidated financial statements 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, 2018. 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, 2018 was derived from audited financial statements, but it does not include all disclosures required by GAAP.

On December 3, 2018, we completed our acquisition of Krausz Development Ltd. and subsidiaries (“Krausz”). We include the financial statements of Krausz in our consolidated financial statements on a one-month lag. Beginning in the quarter ended March 31, 2019, our statements of operations and of cash flows included the results of Krausz’s operations. Refer to Note 2 for additional disclosures related to the acquisition.

HR-1, commonly 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 4.

In May 2014, the Financial Accounting Standards Board (“FASB”) issued new guidance for the recognition of revenue and requiring additional financial statement disclosures.  On October 1, 2018, we adopted the new guidance related to revenue recognition from contracts with customers. The new guidance was adopted using the modified retrospective approach and no transition adjustment was required. See Note 3 for more information regarding our adoption of ASC 606 - Revenue from Contracts with Customers.

During 2016, FASB issued Accounting Standards Update 2016-02 Leases, which will require us to recognize lease assets and lease liabilities for those leases currently referred to as operating leases. We will adopt this guidance using the modified retrospective transition method beginning in the first quarter of fiscal 2020. While we are still evaluating the impact this standard will have on our consolidated financial statements and related disclosures, we have completed our initial scoping reviews and have made progress in our assessment phase as we continue to identify necessary changes to our business processes. We also have made progress in developing the policy elections we will make upon adoption and we are using new software to meet the reporting requirements of this standard. We do not believe the impact of this standard will be material to our consolidated financial statements as a whole.

On February 15, 2019, we experienced a mass shooting event at our Henry Pratt facility in Aurora, Illinois. The event resulted in the death of five employees and injuries to one employee and six law enforcement officials. For the quarter ended March 31, 2019, we have incurred $4.3 million in expenses related to this event, which are included in strategic reorganization and other charges.

6

In 2017, we announced a strategic reorganization plan designed to accelerate our product innovation and revenue growth, through the adoption of 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 centralized to better align with business needs and generate greater efficiencies, which was essentially completed in 2018. In October 2018, we announced the move of our Middleborough, Massachusetts facility to Atlanta to consolidate our resources and accelerate product innovation through creation of a research and development center of excellence for software and electronics. Costs and expenses in the six months ended March 31, 2019 and 2018 for these plans, included in strategic reorganization and other charges, were primarily personnel-related.

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

	Six months ended
	March 31,
	2019			2018
	(in millions)
Beginning balance	$	0.9		$	3.3
Expense accrued	3.4			3.6
Payments	(2.6		)	(3.9		)
Ending balance	$	1.7		$	3.0

Note 2. Acquisitions and Divestitures

Divestiture of Burlington plant

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 in 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.

Acquisition of Krausz

On December 3, 2018, we completed our acquisition of Krausz, a manufacturer of pipe couplings, grips and clamps with operations in the United States and Israel, for $140.7 million, net of cash acquired, including the assumption and simultaneous repayment of certain debt of $13.2 million. The purchase agreement provides for customary final adjustments, including a net working capital adjustment, which we expect to occur in 2019. Annual sales for Krausz in calendar 2017 were approximately $43.0 million.

The acquisition of Krausz was financed with cash on hand. The results of Krausz, including net sales of $10.5 million, are included within our Infrastructure segment in the quarter ended March 31, 2019.

We have recognized the assets acquired and liabilities assumed at their estimated acquisition date fair values, with the excess of the purchase price over the estimated fair values of the identifiable net assets acquired recorded as goodwill. The accounting for the business combination is based on currently available information and is considered preliminary. We have retained a third party valuation specialist to assist in our estimate of the fair value of acquired intangible assets and we have not yet completed that estimate. We recorded intangible assets of $53 million based on a preliminary valuation. In addition, we are gathering information about income taxes and deferred income tax assets and liabilities, accounts receivables, inventories, property, plant, and equipment, other current assets and current liabilities based on facts that existed as of the date of the acquisition. The final accounting for the business combination may differ materially from that presented in these unaudited condensed consolidated financial statements.

7

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

Assets, net of cash:
Receivables	$	6.9
Inventories	17.0
Other current assets	0.2
Property, plant and equipment	8.4
Intangible assets	53.0
Goodwill	71.0
Liabilities(1):
Accounts payable	(5.5		)
Other current liabilities	(2.9		)
Deferred income taxes	(7.4		)
Consideration paid	$	140.7
(1) Excludes certain debt assumed and immediately repaid of $13.2 million.

The preliminary estimated goodwill above is attributable to the strategic opportunities and synergies that we expect to arise from the acquisition of Krausz and the workforce of the acquired businesses. The goodwill is nondeductible for income tax purposes. The intangible assets of $53.0 million consists of an estimated $42.0 million of finite-lived patents, customer relationship intangibles, and favorable leasehold interests, with an estimated weighted average useful life of approximately 12 years, and indefinite-lived tradename intangibles with an estimated value of $11.0 million.

Note 3.    Revenue from Contracts with Customers

We recognize revenue, in an amount that reflects the consideration we expect to be entitled to in exchange for transferring those products or providing those services, when control of the promised products or services is transferred to our customers. We account for a contract when it has approval and commitment from both parties, the rights of the parties are identified, the payment terms are identified, the contract has commercial substance and collectability of consideration is probable. We determine the appropriate revenue recognition for our contracts with customers by analyzing the type, terms and conditions of each contract or arrangement with a customer.

Disaggregation of Revenue

We disaggregate our revenue from contracts with customers by reporting unit, which are the same as our reportable segments (Note 10), and further by geographical region as we believe this best depicts how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors. Geographical region represents the location of the customer.

Contract Asset and Liability Balances

The timing of revenue recognition, billings and cash collections results in customer receivables, advance payments and billings in excess of revenue recognized. Customer receivables includes amounts billed and currently due from customers as well as unbilled amounts (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. Customer receivables are recorded at face amounts less an allowance for doubtful accounts. We maintain an allowance for doubtful accounts for estimated losses as a result of customers’ inability to make required payments. We evaluate the aging of the customer receivable balances, the financial condition of our customers, historical trends and the time outstanding of specific balances to estimate the amount of customer receivables that may not be collected in the future and record the appropriate provision.

Advance payments and billings in excess of revenue are recognized and recorded as deferred revenue, the majority of which is classified as current based on the timing when we expect to recognize revenue. We include current deferred revenue as part of our accrued expenses. Deferred revenues represent contract liabilities and are recorded when customers remit contractual cash payments in advance of us satisfying performance obligations under contractual arrangements. Contract liabilities are reversed when the performance obligation is satisfied and revenue is recognized .

8

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

	March 31,		September 30,
	2019		2018
	(in millions)
Billed receivables	$	164.6	$	165.3
Unbilled receivables	5.5		2.4
Total customer receivables	$	170.1	$	167.7
Deferred revenue	$	4.0	$	3.3

Performance Obligations

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer. Our performance obligations are satisfied at a point in time as related to sales of equipment or over time as related to our software hosting and leak detection monitoring services. Performance obligations are supported by customer contracts, which provide frameworks for the nature of the distinct products or services. We allocate the transaction price of each contract to the performance obligations on the basis of standalone selling price and recognize revenue when, or as, control of the performance obligation transfers to the customers.

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

Revenue from products and services transferred to customers at a point in time represented 99% of our revenue in the first six months of fiscal year 2019. The revenue recognized at a point in time related to the sale of our products and was recognized when the obligations of the terms of our contract were satisfied, which generally occurs upon shipment, when control of the product transfers to the customer.

Revenue from products and services transferred to customers over time represented 1% of our revenue in the first six months of fiscal year 2019.

We offer warranties to our customers in the form of assurance-type warranties, which provide assurance that the related product provided will function as intended and comply with any agreed-upon specifications. These cannot be purchased separately. There is no change to our warranty accounting as a result of the implementation of the new revenue standard and we will continue to use our current cost accrual method in accordance with GAAP.

Costs to Obtain or Fulfill a Contract

We incur certain incremental costs to obtain a contract, which primarily relate to incremental sales commissions. Our commissions are paid based on shipment rather than on order and we reserve the right to claw back any commissions in case of product returns or lost collections. As the expected benefit associated with these incremental costs is one year or less based on the nature of the product sold and benefits received, we have applied a practical expedient and therefore will not capitalize the related costs and will continue to expense them as incurred, consistent with our previous accounting treatment.

Note 4.Income Taxes

On December 22, 2017, HR-1, commonly referred to as the Tax Cuts and Jobs Act (“Act”), was enacted, which made significant revisions to federal income tax laws, including lowering the corporate income tax rate to 21% from 35% effective January 1, 2018, overhauling the taxation of income earned outside the United States and eliminating or limiting certain deductions.

Our deferred tax assets and liabilities are recorded at the enacted tax rates in effect when we expect to recognize the related tax expenses or benefits. These rates vary slightly from year to year but historically had been approximately 39%. With the legislation changing enacted rates taking place in the quarter ended December 31, 2017, we remeasured our deferred tax items at an average rate of approximately 25% and recorded an income tax benefit of $42.5 million.

The Act also imposed a one-time transition tax on the undistributed, non-previously taxed, post-1986 foreign “earnings and profits” (as defined by the IRS) of certain U.S.-owned corporations. Determination of our transition tax liability required us to calculate foreign earnings and profits going back to 1992 and then to assess our historical overall foreign loss position and the applicability of certain foreign tax credits. For the quarter ended March 31, 2018, we recorded a provisional transaction tax of $7.5 million for the one-time deemed repatriation tax on accumulated foreign earnings of our foreign subsidiaries. Upon further analyses of the Act and Notices and regulations issued and proposed by the U.S. Department of the Treasury and the IRS, for the quarter ended December 31, 2018 we finalized our calculations of the transition tax liability, which reduced our initial provision by $0.6 million, and is included as a component of income tax expense in the quarter. As of March 31, 2019, the remaining balance of our transition obligation is $6.4 million, which will be paid over the next seven years, as provided in the Act.

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

	Three months ended				Six months ended
	March 31,				March 31,
	2019		2018		2019		2018
U.S. federal statutory income tax rate	21.0	%	24.5	%	21.0	%	24.5	%
Adjustments to reconcile to the effective tax rate:
State income taxes, net of federal benefit	4.5		4.4		1.8		4.4
Excess tax expense (benefits) related to stock compensation	0.3		(1.1	)	2.5		(1.7	)
Domestic production activities deduction	—		(1.6	)	—		(1.6	)
Tax credits	(1.3	)	(0.9	)	2.6		(0.9	)
Global Intangible Low-taxed Income	0.5		—		(1.1	)	—
Other	1.4		2.2		(1.9	)	(0.8	)
	26.4	%	27.5	%	24.9	%	23.9	%
Walter Energy Accrual	—		—		(12.9	)	—
Transition tax	—		30.7		4.7		18.9
Remeasurement of deferred tax items	—		—		—		(107.3	)
Effective income tax rate	26.4	%	58.2	%	16.8	%	(64.5	)%

At March 31, 2019 and September 30, 2018, the gross liabilities for unrecognized income tax benefits were $3.5 million and $3.3 million, respectively.

Note 5. Borrowing Arrangements

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

	March 31,		September 30,
	2019		2018
	(in millions)
5.5% Senior Notes	$	450.0	$	450.0
ABL Agreement	—		—
Other	1.9		1.6
	451.9		451.6
Less deferred financing costs	6.2		6.6
Less current portion	0.8		0.7
Long-term debt	$	444.9	$	444.3

5.5% Senior Unsecured Notes. On June 12, 2018, we privately issued $450.0 million of 5.5% Senior Unsecured Notes (“Notes”), which mature in 2026 and bear interest at 5.5%. We capitalized $6.6 million of financing costs, which are being amortized over the term of the Notes using the effective interest method. Proceeds from the Notes along with other cash, were used to repay our Term Loan. Substantially all of our U.S. Subsidiaries guarantee the Notes, which are subordinate to borrowings under the ABL. Based on quoted market prices, the outstanding Notes had a fair value of $457.9 million at March 31, 2019.

10

ABL Agreement. At March 31, 2019, our asset based lending agreement (“ABL Agreement”) consisted of a revolving credit facility for up to $175 million of revolving credit borrowings, swing line loans and letters of credit. The ABL Agreement permits us to increase the size of the credit facility by an additional $150 million in certain circumstances subject to adequate borrowing base availability. We may borrow up to $25 million through swing line loans and we are permitted to issue up to $60 million of letters of credit.

Borrowings under the ABL Agreement bear interest at a floating rate equal to LIBOR, plus a margin ranging from 125 to 150 basis points, or a base rate, as defined in the ABL Agreement, plus a margin ranging from 25 to 50 basis points. At March 31, 2019, 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 capacity under the ABL Agreement of 25 basis points per annum. Our obligations under the ABL Agreement are secured by a first-priority perfected lien on all of our U.S. receivables and inventories, certain cash and other supporting obligations. Borrowings are not subject to any financial maintenance covenants unless excess availability is less than the greater of $17.5 million and 10% of the Loan Cap as defined in the ABL Agreement. Excess availability based on March 31, 2019 data, as reduced by outstanding letters of credit and accrued fees and expenses of $16.3 million, was $142.8 million.

Note 6. Derivative Financial Instruments

In connection with the acquisition of Singer Valve in 2017, we loaned funds to one of our Canadian subsidiaries. Although this intercompany loan has no direct effect on our consolidated financial statements, it creates exposure to currency risk for the Canadian subsidiary. To reduce this exposure, we entered into a U.S. dollar-Canadian dollar swap contract with the Canadian subsidiary and an offsetting Canadian dollar-U.S. dollar swap with a domestic bank. We have not designated these swaps as hedges and the changes in their fair values are included in earnings, where they offset the currency gains and losses associated with the intercompany loan. The values of our currency swap contracts were liabilities of $0.4 million and $0.9 million as of March 31, 2019 and September 30, 2018, respectively, and are included in other noncurrent liabilities in our Consolidated Balance Sheets.

Note 7. Retirement Plans

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

	Three months ended						Six months ended
	March 31,						March 31,
	2019			2018			2019			2018
	(in millions)
Service cost	$	0.4		$	0.4		$	0.8		$	0.9
Pension costs (benefits) other than service:
Interest cost	3.5			3.6			7.0			7.2
Expected return on plan assets	(4.0		)	(4.1		)	(8.1		)	(8.3		)
Amortization of actuarial net loss	0.5			0.8			1.0			1.6
Curtailment/special settlement loss (gain)	1.0			—			1.0			—
Pension costs (benefits) other than service	1.0			0.3			0.9			0.5
Net periodic benefit cost	$	1.4		$	0.7		$	1.7		$	1.4

The amortization of actuarial losses, net of tax, is recorded as a component of other comprehensive loss.

During the quarter ended March 31, 2019, we settled our obligations to our Canadian pension plan participants through a combination of lump-sum payments and purchases of annuities. We made a contribution to the plans of $1.0 million, which is included in pension costs other than service, to fund these settlements.

Also during the quarter ended March 31, 2019, we recorded an estimated settlement liability for exiting a multi-employer pension plan at one of our manufacturing locations, which resulted in an expense of $1.1 million that we included in strategic reorganization and other charges.

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Note 8. Stock-based Compensation Plans

We have granted various forms of stock-based compensation, including stock options, restricted stock units and performance-based restricted stock units (“PRSUs”) under our Amended and Restated 2006 Mueller Water Products, Inc. Stock Incentive Plan (the “2006 Stock Plan”).

A PRSU award represents a target number of units that may be paid out at the end of a multi-year award cycle consisting of a series of annual performance periods coinciding with our fiscal years. After we establish the financial performance targets related to PRSUs for a given performance period, typically during the first quarter of that fiscal year, we consider that portion of a PRSU award to be granted. Thus, each award consists of a grant in the year of award and grants in the designated following years. Settlements, in our common shares, will range from zero to two times the number of PRSUs granted, depending on our financial performance against the targets.

We awarded 332,875 stock-settled PRSUs in the six months ended March 31, 2019, which are scheduled to settle in 3 years.

We issued 181,065 shares and 146,061 shares of common stock during the six months ended March 31, 2019 and 2018, respectively, to settle PRSUs.

In addition to the PRSU activity, 115,298 and 259,107 restricted stock units vested during the three and six months ended March 31, 2019, respectively.

We have granted cash-settled Phantom Plan instruments under the Mueller Water Products, Inc. Phantom Plan (“Phantom Plan”). At March 31, 2019, the outstanding Phantom Plan instruments had a fair value of $10.04 per instrument and our liability for Phantom Plan instruments was $1.0 million.

We granted stock-based compensation awards under the 2006 Stock Plan, the Mueller Water Products, Inc. 2006 Employee Stock Purchase Plan and the Phantom Plan during the six months ended March 31, 2019 as follows.

	Number granted	Weighted average grant date fair value per instrument		Total grant date fair value (in millions)
Quarter ended December 31, 2018:
Restricted stock units	147,409	$	10.53	$	1.6
Employee stock purchase plan instruments	45,464	2.30		0.1
Phantom Plan awards	168,380	10.53		1.8
PRSUs: 2019 award	110,595	10.53		1.2
2018 award	49,236	10.53		0.5
2017 award	31,229	10.53		0.3
Quarter ended March 31, 2019:
Restricted stock units	76,919	9.35		0.7
Employee stock purchase plan instruments	43,139	2.50		0.1
				$	6.3

Operating income included stock-based compensation expense of $1.0 million and $1.6 million during the three months ended March 31, 2019 and 2018, respectively, and $2.7 million and $4.0 million during the six months ended March 31, 2019 and 2018, respectively. At March 31, 2019, there was approximately $8.5 million of unrecognized compensation expense related to stock-based compensation arrangements, and there were 279,024 PRSUs that have been awarded for the 2020 and 2021 performance periods, for which performance goals have not been set.

We excluded 202,245 and 289,860 of stock-based compensation instruments from the calculations of diluted earnings per share for the quarters ended March 31, 2019 and 2018, respectively, and 1,077,983 and 278,697 for the six months ended March 31, 2019 and 2018, respectively, since their inclusion would have been antidilutive.

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Note 9. Supplemental Balance Sheet Information

Selected supplemental balance sheet information is presented below.

	March 31,			September 30,
	2019			2018
	(in millions)
Inventories:
Purchased components and raw material	$	97.7		$	81.6
Work in process	46.7			37.8
Finished goods	61.5			37.2
	$	205.9		$	156.6
Other current assets:
Maintenance and repair tooling	$	3.9		$	3.5
Income taxes	8.7			1.6
Other	15.0			12.4
	$	27.6		$	17.5
Property, plant and equipment:
Land	$	5.4		$	5.4
Buildings	59.4			55.9
Machinery and equipment	330.8			311.4
Construction in progress	41.1			22.2
	436.7			394.9
Accumulated depreciation	(260.7		)	(244.0		)
	$	176.0		$	150.9
Other current liabilities:
Compensation and benefits	$	23.3		$	31.7
Customer rebates	4.5			9.7
Taxes other than income taxes	4.1			3.3
Warranty	7.9			6.0
Income taxes	0.8			7.6
Environmental	1.2			1.2
Interest	7.9			8.0
Restructuring	1.7			0.9
Walter Energy Accrual	37.9			—
Other	15.1			8.0
	$	104.4		$	76.4

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Note 10. Segment Information

Summarized financial information for our segments is presented below.

	Three months ended						Six months ended
	March 31,						March 31,
	2019			2018			2019			2018
	(in millions)
Net sales, excluding intercompany:
Infrastructure	$	214.1		$	211.1		$	386.1		$	371.2
Technologies	19.9			22.1			40.7			40.3
	$	234.0		$	233.2		$	426.8		$	411.5
Operating income (loss):
Infrastructure	$	40.1		$	44.9		$	71.0		$	73.0
Technologies	(3.6		)	(3.9		)	(7.3		)	(8.6		)
Corporate	(14.3		)	(11.1		)	(25.6		)	(13.8		)
	$	22.2		$	29.9		$	38.1		$	50.6
Depreciation and amortization:
Infrastructure	$	11.4		$	9.4		$	21.5		$	18.5
Technologies	1.9			1.5			3.9			2.9
Corporate	0.1			—			0.1			0.1
	$	13.4		$	10.9		$	25.5		$	21.5
Strategic reorganization and other charges:
Infrastructure	$	1.1		$	0.1		$	1.1		$	0.1
Technologies	—			—			—			0.1
Corporate	5.8			1.8			9.0			5.6
	$	6.9		$	1.9		$	10.1		$	5.8
Capital expenditures:
Infrastructure	$	13.0		$	4.8		$	27.8		$	11.1
Technologies	1.6			1.5			2.7			3.0
Corporate	—			0.1			—			0.3
	$	14.6		$	6.4		$	30.5		$	14.4
Infrastructure disaggregated net revenues:
Central	$	55.0		$	54.2		$	95.3		93.8
Northeast	44.9			28.9			82.8			66.8
Southeast	41.2			53.7			75.9			82.6
West	50.6			54.3			95.3			94.1
United States	191.7			191.1			349.3			337.3
Canada	15.2			16.9			25.1			27.5
Other international locations	7.2			3.1			11.7			6.4
	$	214.1		$	211.1		$	386.1		$	371.2
Technologies disaggregated net revenues:
Central	7.4			4.1			13.9			7.6
Northeast	3.4			5.4			6.8			9.4
Southeast	7.0			8.1			13.8			15.6
West	$	1.5		$	3.4		$	4.2		$	5.3
United States	19.3			21.0			38.7			37.9
Canada	0.1			0.4			0.3			0.5
Other international locations	0.5			0.7			1.7			1.9
	$	19.9		$	22.1		$	40.7		$	40.3

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Note 11. Accumulated Other Comprehensive Loss

Accumulated other comprehensive loss is presented below.

	Pension, net of tax			Foreign currency translation			Total
	(in millions)
Balance at September 30, 2018	$	(26.5	)	$	(6.3	)	$	(32.8	)
Current period other comprehensive income (loss)	1.9			3.1			$	5.0
Balance at March 31, 2019	$	(24.6	)	$	(3.2	)	$	(27.8	)

Note 12. Commitments and Contingencies

We are involved in various legal proceedings that have arisen in the normal course of operations, including the proceedings summarized below. The effect of the outcome of these matters on our financial statements cannot be predicted with certainty as any such effect depends on the amount and timing of the resolution of such matters. Other than the litigation described below, we do not believe that any of our outstanding litigation would have a material adverse effect on our business or prospects.

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 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’s remediation costs, the number and financial viability of the other PRPs (there are four other PRPs currently) and the determination of the final allocation of the costs among the PRPs. Accordingly, because the amount of such costs cannot be reasonably estimated at this time, no amounts had been accrued for this matter at March 31, 2019.

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Walter Energy. We were a member of the Walter Energy, Inc (“Walter Energy”) federal tax consolidated group, through December 14, 2006, at which time the company was spun-off from Walter Energy. Until our spin-off from Walter Energy, we joined in the filing of Walter Energy’s consolidated federal income tax return for each taxable year during which we were a member of the consolidated group. As a result, we are severally liable for the federal income tax liability, if any, of the consolidated group for each of those years. 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 that consolidated group.

In July 2015, Walter Energy filed for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy Code in the Northern District of Alabama (“Chapter 11 Case”). In February 2017, the Chapter 11 case was converted to a liquidation proceeding under Chapter 7 of the U.S. Bankruptcy Code, pursuant to which Walter Energy is now in the process of being wound down and liquidated.

The IRS has asserted that Walter Energy owes substantial amounts for prior taxable periods in which we were a member of the Walter Energy tax consolidated group (specifically, 1983-1994, 2000-2002 and 2005). On January 11, 2016, the IRS filed a proof of claim (“IRS 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 Claim was based on IRS estimates of Walter Energy’s tax liability for years 1983 through 1994, which Walter Energy disputed.  In the IRS claim, the IRS included an alternative calculation in an aggregate amount of $860.4 million, which it asserted would be appropriate in the event the alleged settlement is determined to be non-binding ($535.3 million of which the IRS claims is entitled to priority status in the Chapter 11 Case). The IRS has indicated its intent to pursue collection of amounts included in the proofs of claim from former members of the Walter Energy tax consolidated group. These liabilities are potentially significant and, if not concluded favorably, could have a material adverse effect on our business, financial condition, liquidity or results of operations.

After extensive work and discussions with the IRS, the Department of Justice, the Walter Energy bankruptcy trustee, and other involved parties and experts, the IRS has provided us with a $37.4 million calculation of the tax liability emanating from the activities of certain businesses of our former parent, Walter Energy (“Walter Tax Liability”; also see Item 3 - Legal Proceedings and Item 1A - Risk Factors in our Annual Report on Form 10-K for the fiscal year ended September 30, 2018 for additional details regarding the issues associated with the Walter Tax Liability). The IRS calculation includes interest amounts calculated through January 31, 2019 and these interest amounts will continue to accrue until the matter is finalized. Accordingly, for the quarter ended December 31, 2018, we recorded a $37.4 million accrual (“Walter Energy Accrual”) related to the Walter Tax Liability. During the quarter ended March 31, 2019, we recorded an additional accrual of $0.5 million for subsequent accrued interest. At March 31, 2019 the Walter Energy Accrual consisted of approximately $7 million in unpaid taxes and approximately $31 million of related interest.

While our previous activities and tax positions were not the source of the Walter Tax Liability, since we were a member of the Walter Energy consolidated tax group in certain historic periods, under federal law, each member of a consolidated group for U.S. federal income tax purposes can be severally liable for the federal income tax liability of each other member of the consolidated group for any year in which it was a member of the consolidated tax group. Thus, we are recording the Walter Energy Accrual due to the operation of several liability under federal law. We are continuing to work with other parties involved in this matter in an effort to negotiate a settlement with respect to the Walter Tax Liability, but there can be no assurance that we will be able to reach a resolution with the parties involved in this matter. Relatedly, we filed a proof of claim in the Ditech Financial LLC (“Ditech”) bankruptcy proceeding in the United States Bankruptcy Court for the Southern District of New York seeking contribution from Ditech for the Walter Tax Liability. We have no ability to predict the outcome of such proceeding.

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Chapman v. Mueller Water Products, et al. In 2017, our warranty analyses identified that certain Technologies radio products produced prior to 2017 and installed in particularly harsh environments had been failing at higher than expected rates. During the quarter ended March 31, 2017, we conducted additional testing of these products and revised our estimates of warranty expenses. As a result, we recorded additional warranty expense of $9.8 million in the second quarter of 2017. During the quarter ended June 30, 2018, we completed a similar analysis and determined, based on this new information, that certain other Technologies products had been failing at higher-than-expected rates as well and that the average cost to repair or replace certain products under warranty was higher than previously estimated. As a result, in the third quarter of 2018, we recorded additional warranty expense of $14.1 million associated with such products. Related to the above warranty expenses, on April 11, 2019, an alleged stockholder filed a putative class action lawsuit against Mueller Water Products, Inc. and certain of our former and current officers (collectively, the “Defendants”) in the U.S. District Court for the Southern District of New York. The proposed class consists of all persons and entities that acquired our securities between May 9, 2016 and August 6, 2018 (the “Class Period”). The complaint alleges violations of the federal securities laws, including, among other things, that we made materially false and/or misleading statements and failed to disclose material adverse facts about our business, operations, and prospects during the proposed Class Period. The plaintiff seeks compensatory damages and attorneys’ fees and costs but does not specify the amount. We believe the allegations are without merit and intend to vigorously defend against the claims. However, the outcome of this legal proceeding cannot be predicted with certainty.

Mass Shooting Event at our Henry Pratt Facility in Aurora, Illinois. On February 15, 2019, we experienced a mass shooting event at our Henry Pratt facility in Aurora, Illinois, in which five employees were killed and one employee and six law enforcement officers were injured. Various workers’ compensation claims arising from the event have been made to date, and we anticipate that additional claims may be made. However, the possibility of other legal proceedings arising from this event cannot be predicted with certainty.

Indemnifications. We are a party to contracts in which it is common for us to agree to indemnify third parties for certain liabilities that arise out of or relate to the subject matter of the contract. In some cases, this indemnity extends to related liabilities arising from the negligence of the indemnified parties, but usually excludes any liabilities caused by gross negligence or willful misconduct. We cannot estimate the potential amount of future payments under these indemnities until events arise that would trigger a liability under the indemnities.

Additionally, in connection with the sale of assets and the divestiture of businesses, such as the divestitures of U.S. Pipe and Anvil, we may agree to indemnify buyers and related parties for certain losses or liabilities incurred by these parties with respect to: (i) the representations and warranties made by us to these parties in connection with the sale and (ii) liabilities related to the pre-closing operations of the assets or business sold. Indemnities related to pre-closing operations generally include certain environmental and tax liabilities and other liabilities not assumed by these parties in the transaction.

Indemnities related to the pre-closing operations of sold assets or businesses normally do not represent additional liabilities to us, but simply serve to protect these parties from potential liability associated with our obligations existing at the time of the sale. As with any liability, we have accrued for those pre-closing obligations that are considered probable and reasonably estimable. Should circumstances change, increasing the likelihood of payments related to a specific indemnity, we will accrue a liability when future payment is probable and the amount is reasonably estimable.

Other Matters. We monitor and analyze our warranty experience and costs periodically and may revise our reserves as necessary. Critical factors in our reserve 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 business or prospects.

Note 13. Subsequent Events

On April 23, 2019, our board of directors declared a dividend of $0.05 per share on our common stock, payable on or about May 20, 2019 to stockholders of record at the close of business on May 10, 2019.

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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 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. All statements that address activities, events or developments that we intend, expect, plan, project, believe or anticipate will or may occur in the future are forward-looking statements. Forward-looking statements are based on certain assumptions and assessments made by us in light of our 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, business, competitive, market and regulatory conditions and the other factors described under the section entitled “RISK FACTORS” in Item 1A. of our Annual Report on Form 10-K for the year ended September 30, 2018 and in this Quarterly Report on Form 10-Q. Undue reliance should not be placed on any forward-looking statements. The Company does not have 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, Inc (“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 Mueller Water Products, Inc. (“Mueller” or 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 in Mueller, completing our spin-off. We subsequently sold our U.S. Pipe and Anvil businesses in 2012 and 2017, respectively.

Business

We estimate approximately 60% of our 2018 net sales were for repair and replacement directly related to municipal water infrastructure spending, approximately 30% were related to residential construction activity and less than 10% were related to natural gas utilities.

We expect our two primary end markets, repair and replacement of water infrastructure, driven by municipal spending, and new water infrastructure installation, driven by residential construction, to grow in the second half of 2019. In April 2019, Blue Chip Economic Indicators forecasted no change in housing starts for calendar 2019 compared to the prior year.

Infrastructure

Infrastructure announced price increases on valves, hydrants and gas products effective in January and February 2019 for its Canadian and U.S. markets, respectively. We believe that some customers accelerated orders prior to the effective date of the price increases.

On December 3, 2018, we completed our acquisition of Krausz Development Ltd. and subsidiaries (“Krausz”), a manufacturer of pipe couplings, grips and clamps with operations in the United States and Israel, for $140.7 million, net of cash acquired, including the assumption and simultaneous repayment of certain debt of $13.2 million. The purchase agreement provides for customary final adjustments, including a net working capital adjustment, which we expect to occur in 2019. Annual sales for Krausz in calendar 2017 were approximately $43.0 million. We include financial statements of Krausz in our consolidated financial statements on a one-month lag.

Technologies

The municipal market is the key end market for Technologies. The businesses in Technologies are project-oriented and depend on customer adoption of their technology-based products and services. Mueller Systems is benefiting from its growth strategy focused on the AMI segment of the market.

18

Results of Operations

Three Months Ended March 31, 2019 Compared to Three Months Ended March 31, 2018

	Three months ended March 31, 2019
	Infrastructure		Technologies			Corporate			Total
	(in millions)
Net sales	$	214.1	$	19.9		$	—		$	234.0
Gross profit	$	71.9	$	2.9		$	—		$	74.8
Operating expenses:
Selling, general and administrative	30.7		6.5			8.5			45.7
Strategic reorganization and other charges	1.1		—			5.8			6.9
	31.8		6.5			14.3			52.6
Operating income (loss)	$	40.1	$	(3.6	)	$	(14.3	)	22.2
Non-operating expenses:
Pension costs other than service									1.0
Interest expense, net									5.9
Walter Energy Accrual									0.5
Income before income taxes									14.8
Income tax expense									3.9
Net income									$	10.9
	Three months ended March 31 2018
	Infrastructure		Technologies			Corporate			Total
	(in millions)
Net sales	$	211.1	$	22.1		$	—		$	233.2
Gross profit	$	71.4	$	3.1		$	—		$	74.5
Operating expenses:
Selling, general and administrative	26.4		7.0			9.3			42.7
Strategic reorganization and other charges	0.1		—			1.8			1.9
	26.5		7.0			11.1			44.6
Operating income (loss)	$	44.9	$	(3.9	)	$	(11.1	)	29.9
Pension costs other than service									0.3
Interest expense, net									5.2
Income before income taxes									24.4
Income tax expense									14.2
Net income									$	10.2

Consolidated Analysis

Net sales for the quarter ended March 31, 2019 increased 0.3% or $0.8 million to $234.0 million from $233.2 million driven primarily by inclusion of the net sales of Krausz, as well as higher pricing at Infrastructure, which was partially offset by lower volume at Infrastructure and Technologies.

Gross profit for the quarter ended March 31, 2019 increased $0.3 million to $74.8 million from $74.5 million in the prior year period primarily due to increased net sales and improved manufacturing performance, which were partially offset by higher material and freight costs and the effect of tariffs, as well as a $2.2 million Krausz inventory step-up amortization expense. Material costs increased nearly 3% percent year over year in the quarter. Gross margin was 32.0% for the quarter ended March 31, 2019 compared to 31.9% in the prior year period.

Selling, general and administrative expenses (“SG&A”) for the quarter ended March 31, 2019 increased to $45.7 million from $42.7 million in the prior year period due primarily to the inclusion of Krausz’s SG&A expenses. SG&A as a percentage of net sales increased to 19.5% in the quarter ended March 31, 2019 from 18.3% in the prior year period.

Strategic reorganization and other charges in the quarter ended March 31, 2019 were $6.9 million, compared to $1.9 million in the prior year period, primarily due to $4.3 million in expenses related to the Aurora tragedy.

19

Interest expense, net increased $0.7 million in the quarter ended March 31, 2019 compared to the prior year period. The components of interest expense, net are provided below.

	Three months ended
	March 31,
	2019			2018
	(in millions)
Notes	$	6.2		$	—
Term Loan	—			5.1
Interest rate swap contracts	—			0.2
Deferred financing costs amortization	0.2			0.4
ABL Agreement	0.1			0.2
Other interest expense	0.1			0.2
	6.6			6.1
Interest income	(0.7		)	(0.9		)
	$	5.9		$	5.2

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% from 35%, 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 were subject to a blended federal statutory tax rate of 24.5% throughout fiscal 2018 and are subject to a 21% rate in fiscal 2019.

For the quarter ended March 31, 2019, we reported a net income tax expense of $3.9 million, which was net of a $0.1 million benefit related to the additional accrual of $0.5 million for subsequent accrued interest related to the Walter Energy Accrual. The reconciliation between the U.S. federal statutory income tax rate and the effective tax rate is presented below.

	Three months ended
	March 31,
	2019		2018
U.S. federal statutory income tax rate	21.0	%	24.5	%
Adjustments to reconcile to the effective tax rate:
State income taxes, net of federal benefit	4.5		4.4
Valuation allowance adjustment related to stock compensation	—		—
Excess tax expense (benefits) related to stock compensation	0.3		(1.1	)
Domestic production activities deduction	—		(1.6	)
Tax credits	(1.3	)	(0.9	)
Global Intangible Low-taxed Income	0.5		—
Other	1.4		2.2
	26.4	%	27.5	%
Transition tax	—		30.7
Effective income tax rate	26.4	%	58.2	%

Segment Analysis

Infrastructure

Net sales for the quarter ended March 31, 2019 increased 1.4% to $214.1 million compared to $211.1 million in the prior year period due to the $10.5 million in net sales of Krausz and higher pricing, which were offset by lower volumes.

Gross profit for the quarter ended March 31, 2019 increased to $71.9 million from $71.4 million in the prior year period due to increased net sales and improved manufacturing performance, partially offset by higher material and freight costs and the effect of tariffs, as well as the inventory step-up amortization at Krausz of $2.2 million. Gross margin was 33.6% for the quarter ended March 31, 2019 compared to 33.8% in the prior year period.

SG&A for the quarter ended March 31, 2019 increased to $30.7 million from $26.4 million in the prior year period. This increase was primarily due to the inclusion of Krausz’s SG&A expenses. SG&A was 14.3% and 12.5% of net sales for the quarters ended March 31, 2019 and 2018, respectively.

20

Technologies

Net sales in the quarter ended March 31, 2019 decreased to $19.9 million from $22.1 million in the prior year period, driven by lower volumes at Echologics, which were partially offset by higher volumes at Metrology.

Gross profit in the quarter ended March 31, 2019 decreased to $2.9 million compared to $3.1 million in the prior year period as a result of decreased net sales. Gross margin increased to 14.6% in the quarter ended March 31, 2019 compared to 14.0% in the prior year period.

SG&A decreased to $6.5 million in the quarter ended March 31, 2019 compared to $7.0 million in the prior year period due to reduced marketing and personnel-related expenses. SG&A was 32.7% of net sales for the quarter ended March 31, 2019 compared with 31.7% of net sales in the prior year period.

Corporate

SG&A was $8.5 million in the quarter ended March 31, 2019 compared to $9.3 million in the prior year period.

Six Months Ended March 31, 2019 Compared to Six Months Ended March 31, 2018

	Six months ended March 31, 2019
	Infrastructure		Technologies			Corporate			Total
	(in millions)
Net sales	$	386.1	$	40.7		$	—		$	426.8
Gross profit	$	128.7	$	6.2		$	—		$	134.9
Operating expenses:
Selling, general and administrative	56.6		13.5			16.6			86.7
Strategic reorganization and other charges	1.1		—			9.0			10.1
	57.7		13.5			25.6			96.8
Operating income (loss)	$	71.0	$	(7.3	)	$	(25.6	)	38.1
Non-operating expenses:
Pension costs other than service									0.9
Interest expense, net									11.4
Walter Energy Accrual									37.9
Loss before income taxes									(12.1		)
Income tax expense									(2.0		)
Net loss									$	(10.1	)
	Six months ended March 31, 2018
	Infrastructure		Technologies			Corporate			Total
	(in millions)
Net sales	$	371.2	$	40.3		$	—		$	411.5
Gross profit	$	123.9	$	6.0		$	—		$	129.9
Operating expenses:
Selling, general and administrative	50.8		14.5			17.2			82.5
Gain on sale of idle property	—		—			(9.0		)	(9.0		)
Strategic reorganization and other charges	0.1		0.1			5.6			5.8
	50.9		14.6			13.8			79.3
Operating income (loss)	$	73.0	$	(8.6	)	$	(13.8	)	50.6
Pension costs other than service									0.5
Interest expense, net									10.4
Income before income taxes									39.7
Income tax benefit									(25.6		)
Net income									$	65.3

21

Consolidated Analysis

Net sales for the six months ended March 31, 2019 increased 3.7% or $15.3 million to $426.8 million from $411.5 million driven primarily by higher pricing at Infrastructure and the net sales of Krausz, which were offset by lower volume at Infrastructure.

Gross profit for the six months ended March 31, 2019 increased $5.0 million to $134.9 million from $129.9 million in the prior year period primarily due to increased net sales and improved manufacturing performance, which were partially offset by higher material and freight costs and the effect of tariffs as well as the inventory step-up amortization at Krausz of $2.2 million. Material costs increased nearly 4% percent year over year in the six months. Gross margin was 31.6% for both the six months ended March 31, 2019 and the prior year period.

Selling, general and administrative expenses (“SG&A”) for the six months ended March 31, 2019 increased to $86.7 million from $82.5 million in the prior year period due primarily to the inclusion of SG&A of Krausz, higher volume and personnel-related investments, including in engineering and research and development at Infrastructure offset by lower SG&A at Technologies and Corporate. SG&A as a percentage of net sales increased to 20.3% in the six months ended March 31, 2019 from 20.0% in the prior year period.

Interest expense, net increased $1.0 million in the six months ended March 31, 2019 compared to the prior year period. The components of interest expense, net are provided below.

	Six months ended
	March 31,
	2019			2018
	(in millions)
Notes	$	12.4		$	—
Term Loan	—			9.9
Interest rate swap contracts	—			0.6
Deferred financing costs amortization	0.6			0.9
ABL Agreement	0.3			0.4
Other interest expense	0.3			0.3
	13.6			12.1
Interest income	(2.2		)	(1.7		)
	$	11.4		$	10.4

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% from 35%, 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 were subject to a blended federal statutory tax rate of 24.5% throughout fiscal 2018 and are subject to a 21% rate in fiscal 2019.

For the six months ended March 31, 2019, we reported a net income tax benefit of $2.0 million, which was driven by a $7.7 million benefit related to the Walter Energy Accrual as well as a benefit of $0.6 million related to the finalization of the impact of the one-time transition tax. The reconciliation between the U.S. federal statutory income tax rate and the effective tax rate is presented below.

22

	Six months ended
	March 31,
	2019		2018
U.S. federal statutory income tax rate	21.0	%	24.5	%
Adjustments to reconcile to the effective tax rate:
State income taxes, net of federal benefit	1.8		4.4
Valuation allowance adjustment related to stock compensation	—		—
Excess tax expense (benefits) related to stock compensation	2.5		(1.7	)
Domestic production activities deduction	—		(1.6	)
Tax credits	2.6		(0.9	)
Global Intangible Low-taxed Income	(1.1	)	—
Other	(1.9	)	(0.8	)
	24.9	%	23.9	%
Walter Energy Accrual	(12.9	)	—
Transition tax	4.7		18.9
Remeasurement of deferred tax items	—		(107.3	)
Effective income tax rate	16.8	%	(64.5	)%

Segment Analysis

Infrastructure

Net sales for the six months ended March 31, 2019 increased 4.0% to $386.1 million compared to $371.2 million in the prior year period, primarily due to higher pricing and and $10.5 million in net sales from the acquisition of Krausz , which were offset by lower volumes.

Gross profit for the six months ended March 31, 2019 increased to $128.7 million from $123.9 million in the prior year period primarily due to increased net sales and improved manufacturing performance, partially offset by higher material and freight costs, the effect of tariffs and inventory step-up amortization expense at Krausz. Gross margin was 33.3% for the six months ended March 31, 2019 compared to 33.4% in the prior year period.

SG&A for the six months ended March 31, 2019 increased to $56.6 million from $50.8 million in the prior year period. This increase was primarily due to the inclusion of of Krausz’s SG&A and higher volume-related personnel expenses. SG&A was 14.7% and 13.7% of net sales for the six months ended March 31, 2019 and 2018, respectively.

Technologies

Net sales in the six months ended March 31, 2019 increased to $40.7 million from $40.3 million in the prior year period primarily driven by higher volumes at Mueller Systems.

Gross profit in the six months ended March 31, 2019 increased to $6.2 million compared to $6.0 million in the prior year period as a result of increased net sales. Gross margin was 15.2% in the six months ended March 31, 2019 compared to 14.9% in the prior year period.

SG&A decreased to $13.5 million in the six months ended March 31, 2019 compared to $14.5 million in the prior year period due to reduced marketing and personnel-related expenses. SG&A decreased to 33.2% of net sales for the six months ended March 31, 2019 from 36.0% of net sales in the prior year period.

Corporate

SG&A was $16.6 million in the six months ended March 31, 2019 compared to $17.2 million in the prior year period.

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Liquidity and Capital Resources

We had cash and cash equivalents of $134.3 million at March 31, 2019 and $142.8 million of additional borrowing capacity under our ABL Agreement, based on March 31, 2019 data. Undistributed earnings from our subsidiaries in Canada, China, and Israel are considered to be permanently invested outside the United States. At March 31, 2019, cash and cash equivalents included $5.3 million, $8.3 million and $13.5 million in Canada, China and Israel, respectively.

We expect the 2017 enacted tax law changes to benefit our liquidity through reduction in overall income tax liability and through provisions allowing election of accelerated deductibility for capital assets placed in service through December 2022. This benefit will be partially offset by payment of the transition tax discussed above. However, we are paying the transition tax over eight years beginning in January 2019.

We did not repurchase shares of our common stock during the quarter ended March 31, 2019, and have $160 million remaining on our share repurchase authorization.

The ABL Agreement and Notes contain customary representations and warranties, covenants and provisions governing an event of default.  The covenants restrict 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 from operating activities are categorized below.

	Six months ended
	March 31,
	2019			2018
	(in millions)
Collections from customers	$	375.7		$	404.1
Disbursements, other than interest and income taxes	(378.7		)	(392.7		)
Interest payments, net	(11.2		)	(9.0		)
Income tax payments, net	(14.9		)	(0.8		)
Cash provided by (used in) operating activities	$	(29.1	)	$	1.6

Collections from customers were lower during the six months ended March 31, 2019 compared to the prior year period primarily due to the timing of shipments and cash receipts.

Decreased disbursements, other than interest and income taxes, during the six months ended March 31, 2019 reflect differences in the timing of expenditures.

Capital expenditures were $30.5 million in the six months ended March 31, 2019 compared to $14.4 million in the prior year period as we accelerated investments in our manufacturing capabilities, particularly our large casting foundry. We estimate 2019 capital expenditures will be between $60 million and $65 million, although we are also evaluating possibilities for additional capital expenditures in 2019.

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, income tax payments, capital expenditures and debt service obligations as they become due through March 31, 2020. However, our ability to make these payments will depend partly upon our future operating performance, which will be affected by general economic, financial, competitive, legislative, regulatory, business and other factors beyond our control.

ABL Agreement

At March 31, 2019, the ABL Agreement consisted of a revolving credit facility for up to $175 million of revolving credit borrowings, swing line loans and letters of credit. The ABL Agreement permits us to increase the size of the credit facility by an additional $150 million in certain circumstances subject to adequate borrowing base availability. We may borrow up to $25 million through swing line loans and may have up to $60 million of letters of credit outstanding.

Borrowings under the ABL Agreement bear interest at a floating rate equal to LIBOR, plus a margin ranging from 125 to 150 basis points, or a base rate, as defined in the ABL Agreement, plus a margin ranging from 25 to 50 basis points. At March 31, 2019, 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.

24

The ABL Agreement is subject to mandatory prepayments if total outstanding borrowings under the ABL Agreement are greater than the aggregate commitments under the revolving credit facility or if we dispose of overdue accounts receivable in certain circumstances. The borrowing base under the ABL Agreement is equal to the sum of (a) 85% of the value of eligible accounts receivable and (b) the lesser of (i) 70% of the value of eligible inventories or (ii) 85% of the net orderly liquidation value of the value of eligible inventories, less certain reserves. Prepayments can be made at any time with no penalty.

Substantially all of our U.S. 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, accounts receivable, certain cash and other supporting obligations.

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 under the ABL Agreement.

5.5% Senior Unsecured Notes

On June 12, 2018, we privately issued $450.0 million of Senior Unsecured Notes (“Notes”), which mature in June 2026 and bear interest at 5.5%, paid semi-annually. Substantially, all of our U.S. subsidiaries guarantee the Notes, which are subordinate to borrowings under the ABL. Based on quoted market prices, the outstanding Notes had a fair value of $457.9 million at March 31, 2019.

An indenture securing the Notes (“Indenture”) contains customary covenants and events of default, including covenants that limit our ability to incur debt, pay dividends and make investments. We believe we were compliant with these covenants at March 31, 2019 and expect to remain in compliance through March 31, 2020.

We may redeem some or all of the Notes at any time or from time to time prior to June 15, 2021 at certain “make-whole” redemption prices (as set forth in the Indenture) and on or after June 15, 2021 at specified redemption prices (as set forth in the Indenture). Additionally, we may redeem up to 40% of the aggregate principal amount of the Notes at any time or from time to time prior to June 15, 2021 with the net proceeds of specified equity offerings at specified redemption prices (as set forth in the Indenture). Upon a change in control (as defined in the Indenture), we will be required to offer to purchase the Notes at a price equal to 101% of the outstanding principal amount of the Notes.

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

	Moody’s		Standard & Poor’s
	March 31,	September 30,	March 31,	September 30,
	2019	2018	2019	2018
Corporate credit rating	Ba2	Ba2	BB	BB
ABL Agreement	Not rated	Not rated	Not rated	Not rated
Notes	Ba3	Ba3	BB	BB
Outlook	Stable	Stable	Stable	Stable

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” or “special 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 March 31, 2019 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 March 31, 2019, we had $15.8 million of letters of credit and $30.2 million of surety bonds outstanding.

Seasonality

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

25

Item 4. CONTROLS AND PROCEDURES

During the quarter ended March 31, 2019, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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 the Chief Executive Officer and 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.

26

PART II OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

Refer to the information provided in Note 12. to the Notes to the Condensed Consolidated Financial Statements presented in Item 1 of Part I of this report.

Item 1A. RISK FACTORS

In addition to the other information set forth in this report, you should carefully consider the factors discussed in PART I, “Item 1A. RISK FACTORS” in our Annual Report, 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.

We may be subject to investigations, claims, litigation and expenses arising out of the mass shooting event we experienced at our Henry Pratt facility in Aurora, Illinois, which could adversely affect our results of operations.

On February 15, 2019, we experienced a mass shooting event at our Henry Pratt facility in Aurora, Illinois in which five employees were killed and one employee and six law enforcement officers were wounded. Investigations, claims, litigation and other proceedings related to this event may divert our management’s attention and may lead to significant expenses, including legal, settlement, security and other costs, that could have a material adverse effect on our results of operations. Although we maintain insurance coverage for many of the types of claims that could arise out of the event, there is no guarantee that our insurance will adequately cover the potential liability. If not, our results of operations, cash flows and financial condition could be materially and adversely affected. See Note 12. of the Notes to Consolidated Financial Statements.

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

During the quarter ended March 31, 2019, shares were surrendered to us to pay the tax withholding obligations of participants in connection with the lapsing of restrictions on restricted stock units, as follows.

Period	Total number of shares purchased	Average price paid per share		Total number of shares purchased as part of publicly announced plans or programs	Maximum dollar value of shares that may yet be purchased under the plans or programs
January 1-31, 2019	7,763	$	9.35	n/a	n/a
February 1-28, 2019	—	—		n/a	n/a
March 1-31, 2019	—	—		n/a	n/a
Total	7,763	$	9.35	n/a	n/a

We did not repurchase shares of our common stock during the quarter ended March 31, 2019 under our share repurchase authorization, and we have $160 million remaining under this authorization.

27

Item 6. EXHIBITS

Exhibit No.	Document
31.1*	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101*	The following financial information from the Quarterly Report on Form 10-Q for the quarter ended March 31, 2019, formatted in XBRL (Extensible Business Reporting Language), (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Operations, (iii) the Condensed Consolidated Statements of Other Comprehensive Loss, (iv) the Condensed Consolidated Statements of Stockholders' Equity, (v) the Condensed Consolidated Statements of Cash Flows, and (vi) the Notes to Condensed Consolidated Financial Statements.

*     Filed with this quarterly report

**     Management compensatory plan, contract, or arrangement

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:	May 7, 2019	By:	/s/ Michael S. Nancarrow
			Michael S. Nancarrow
			Chief Accounting Officer

28

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Scott Hall, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Mueller Water Products, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: May 7, 2019

/s/  Scott Hall

Scott Hall

Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Marietta Edmunds Zakas, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Mueller Water Products, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: May 7, 2019

/s/ Marietta Edmunds Zakas

Marietta Edmunds Zakas

Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(18 U.S.C. SECTION 1350)

In connection with the accompanying Quarterly Report on Form 10-Q of Mueller Water Products, Inc. (the “Company”) for the quarter ended March 31, 2019 (the “Report”), I, Scott Hall, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: May 7, 2019

/s/ Scott Hall

Scott Hall

Chief Executive Officer

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(18 U.S.C. SECTION 1350)

In connection with the accompanying Quarterly Report on Form 10-Q of Mueller Water Products, Inc. (the “Company”) for the quarter ended March 31, 2019 (the “Report”), I, Marietta Edmunds Zakas, Executive Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: May 7, 2019

/s/ Marietta Edmunds Zakas

Marietta Edmunds Zakas

Chief Financial Officer

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Document and Entity Information - USD ($)	6 Months Ended
	Mar. 31, 2019	Apr. 30, 2019
Document And Entity Information [Abstract]
Document Fiscal Period Focus	Q2
Document Period End Date	Mar. 31, 2019
Document Fiscal Year Focus	2019
Entity Registrant Name	Mueller Water Products, Inc.
Entity Central Index Key	0001350593
Current Fiscal Year End Date	--09-30
Entity Filer Category	Large Accelerated Filer
Document Type	10-Q
Entity Emerging Growth Company	false
Amendment Flag	false
Entity Common Stock, Shares Outstanding		158,362,740
Entity Small Business	false
Entity Public Float	$ 1,856,526,077

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Consolidated Balance Sheets - USD ($) $ in Millions	Mar. 31, 2019	Sep. 30, 2018
Assets:
Cash and cash equivalents	$ 134.3	$ 347.1
Receivables, net	167.3	164.3
Inventories	205.9	156.6
Other current assets	27.6	17.5
Total current assets	535.1	685.5
Property, plant and equipment, net	176.0	150.9
Goodwill	84.5	12.1
Identifiable intangible assets	450.3	408.1
Other noncurrent assets	34.3	35.3
Total assets	1,280.2	1,291.9
Liabilities and stockholders' equity:
Current portion of long-term debt	0.8	0.7
Accounts payable	69.1	90.0
Accrued Liabilities, Current	104.4	76.4
Total current liabilities	174.3	167.1
Long-term debt	444.9	444.3
Deferred income taxes	84.3	79.2
Other noncurrent liabilities	27.9	36.5
Total liabilities	731.4	727.1
Common Stock	1.6	1.6
Additional paid-in capital	1,433.2	1,444.5
Accumulated deficit	(860.1)	(850.0)
Accumulated Other Comprehensive Income (Loss), Net of Tax	(27.8)	(32.8)
Total stockholders' equity	546.9	563.3
Noncontrolling interest	1.9	1.5
Total equity	548.8	564.8
Total liabilities and stockholders' equity	$ 1,280.2	$ 1,291.9

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Consolidated Balance Sheets (Parenthetical) - shares	Dec. 31, 2015	Sep. 30, 2014
Statement of Financial Position [Abstract]
Series A common stock, shares authorized	600,000,000	600,000,000
Series A common stock, shares outstanding	158,249,164	157,332,121

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Consolidated Statements Of Operations - USD ($) shares in Millions, $ in Millions	3 Months Ended		6 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2019	Mar. 31, 2018
Revenues	$ 234.0	$ 233.2	$ 426.8	$ 411.5
Cost of sales	159.2	158.7	291.9	281.6
Gross profit	74.8	74.5	134.9	129.9
Operating expenses:
Selling, general and administrative	45.7	42.7	86.7	82.5
Gain on sale of idle property	0.0	0.0	0.0	(9.0)
Restructuring	6.9	1.9	10.1	5.8
Total operating expenses	52.6	44.6	96.8	79.3
Operating income	22.2	29.9	38.1	50.6
Non-operating expense:
Defined Benefit Plan, Net Periodic Benefit Cost other than Service Cost	1.0	0.3	0.9	0.5
Interest expense, net	5.9	5.2	11.4	10.4
Walter accrual	0.5	0.0	37.9	0.0
Total non-operating expenses	7.4	5.5	50.2	10.9
Income (loss) before income taxes	14.8	24.4	(12.1)	39.7
Income tax expense (benefit)	3.9	14.2	(2.0)	(25.6)
Net Income (Loss) Attributable to Parent	$ 10.9	$ 10.2	$ (10.1)	$ 65.3
Net loss per basic share:
Net income (loss) per basic share	$ 0.07	$ 0.06	$ (0.06)	$ 0.41
Net loss per diluted share:
Net income (loss) per diluted share	$ 0.07	$ 0.06	$ (0.06)	$ 0.41
Weighted average shares outstanding:
Basic, in shares	158.2	158.3	157.9	158.4
Diluted, in shares	159.2	159.4	157.9	159.6
Dividends declared per share, in dollars per share	$ 0.05	$ 0.05	$ 0.10	$ 0.09

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Consolidated Statement of Comprehensive Income Statement - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2019	Mar. 31, 2018
Net Income (Loss) Attributable to Parent	$ 10.9	$ 10.2	$ (10.1)	$ 65.3
Other comprehensive income (loss):
Minimum pension liability	2.2	0.8	2.7	1.6
Income tax effects	(0.7)	(0.2)	(0.8)	(0.5)
Foreign currency translation	4.3	(0.4)	3.1	(0.3)
Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, before Tax	0.0	2.4	0.0	4.0
Income tax effects	0.0	(0.8)	0.0	(1.4)
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent	5.8	1.8	5.0	3.4
Other Comprehensive Income (Loss), Net of Tax			5.0
Comprehensive Income (Loss), Net of Tax, Attributable to Parent	$ 16.7	$ 12.0	$ (5.1)	$ 68.7

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Consolidated Statement Of Stockholders' Equity - USD ($) $ in Millions	Total	Common stock	Accumulated deficit	Accumulated other comprehensive income (loss)	Noncontrolling Interest [Member]	Additional Paid-in Capital [Member]
Other Comprehensive Income (Loss), Net of Tax				$ 3.4
Common Stock, Dividends, Per Share, Declared	$ 0.09
Balance at Sep. 30, 2017		$ 1.6	$ (955.6)	(51.8)	$ 1.1	$ 1,494.2
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Dividends declared						14.3
Stock repurchased under buyback program						(20.0)
Stock-based compensation						3.5
Shares retained for employee taxes						2.1
Stock issued under stock compensation plans	$ 0.0					6.4
Net Income (Loss) Attributable to Parent	65.3
Net Income (Loss) Attributable to Noncontrolling Interest					(0.1)
Balance at Mar. 31, 2018	$ 531.8	1.6	(890.3)	(48.4)	1.2	1,467.7
Other Comprehensive Income (Loss), Net of Tax				1.8
Common Stock, Dividends, Per Share, Declared	$ 0.05
Balance at Dec. 31, 2017		1.6	(900.5)	(50.2)	1.0	1,482.4
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Dividends declared						8.0
Stock repurchased under buyback program						(10.0)
Stock-based compensation						1.5
Shares retained for employee taxes						0.3
Stock issued under stock compensation plans	$ 0.0					2.1
Net Income (Loss) Attributable to Parent	10.2
Net Income (Loss) Attributable to Noncontrolling Interest					(0.2)
Balance at Mar. 31, 2018	531.8	1.6	(890.3)	(48.4)	1.2	1,467.7
Common Stock, Value, Issued	1.6
Other Comprehensive Income (Loss), Net of Tax	$ 5.0			5.0
Common Stock, Dividends, Per Share, Declared	$ 0.10
Balance at Sep. 30, 2018	$ 564.8	1.6	(850.0)	(32.8)	1.5	1,444.5
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Dividends declared						15.8
Stock repurchased under buyback program						0.0
Stock-based compensation						2.3
Shares retained for employee taxes						1.4
Stock issued under stock compensation plans	0.0					3.6
Net Income (Loss) Attributable to Parent	(10.1)
Net Income (Loss) Attributable to Noncontrolling Interest					(0.4)
Balance at Mar. 31, 2019	$ 548.8	1.6	(860.1)	(27.8)	1.9	1,433.2
Other Comprehensive Income (Loss), Net of Tax				5.8
Common Stock, Dividends, Per Share, Declared	$ 0.05
Balance at Dec. 31, 2018		1.6	(871.0)	(33.6)	1.7	1,440.2
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Dividends declared						7.9
Stock repurchased under buyback program						0.0
Stock-based compensation						0.6
Shares retained for employee taxes						0.2
Stock issued under stock compensation plans	$ 0.0					0.5
Net Income (Loss) Attributable to Parent	10.9
Net Income (Loss) Attributable to Noncontrolling Interest					(0.2)
Balance at Mar. 31, 2019	548.8	$ 1.6	$ (860.1)	$ (27.8)	$ 1.9	$ 1,433.2
Common Stock, Value, Issued	$ 1.6

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Consolidated Statements Of Cash Flows - USD ($) $ in Millions	6 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Net Cash Provided by (Used in) Operating Activities [Abstract]
Net Income (Loss) Attributable to Parent	$ (10.1)	$ 65.3
Adjustments to reconcile net income (loss) to income (loss) from continuing operations:
Depreciation	12.6	10.1
Amortization	12.9	11.4
Stock-based compensation expense	2.3	3.5
Deferred income taxes	(3.8)	(38.6)
Gain on sale of idle property	0.0	9.0
Retirement plans	3.2	1.5
Other, net	1.7	2.1
Changes in assets and liabilities, net of acquisitions:
Receivables	3.7	(6.8)
Inventories	(32.2)	(17.5)
Other current assets and other noncurrent assets	(10.1)	(2.0)
Walter accrual	37.9	0.0
Accounts payable and other liabilities	(47.2)	(18.4)
Net cash provided by (used in) operating activities	(29.1)	1.6
Investing activities:
Capital expenditures	(30.5)	(14.4)
Proceeds from sales of assets	0.0	7.4
Acquisition, net of cash received	(127.5)	0.0
Net cash provided by (used in) investing activities	(158.0)	(7.0)
Financing activities:
Dividends paid	(15.8)	(14.3)
Repayments of debt	0.0	(2.4)
Repayment of Krausz debt	(13.2)	0.0
Common stock issued	3.6	6.4
Shares retained for employee taxes	(1.4)	(2.1)
Other	0.1	(0.1)
Stock repurchased under buyback program	0.0	20.0
Net cash used in financing activities	(26.7)	(32.5)
Effect of currency exchange rate changes on cash	1.0	0.1
Net Cash Provided by (Used in) Discontinued Operations [Abstract]
Net change in cash and cash equivalents	(212.8)	(37.8)
Cash and cash equivalents at beginning of period	347.1	361.7
Cash and cash equivalents at end of period	$ 134.3	$ 323.9

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Organization

6 Months Ended

Mar. 31, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization

Organization

Mueller Water Products, Inc., a Delaware corporation, together with its consolidated subsidiaries, operates in two business segments: Infrastructure and Technologies. Infrastructure manufactures valves for water and gas systems, including butterfly, iron gate, tapping, check, knife, plug and ball valves, as well as dry-barrel and wet-barrel fire hydrants and a broad line of pipe connection and repair products, such as clamps and couplings used to repair leaks. Technologies offers metering systems, leak detection, pipe condition assessment and other related products and services. 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.

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 income or 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 consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”), which require us to make certain estimates and assumptions that affect the reported amounts of assets, liabilities, sales and expenses and the disclosure of contingent assets and liabilities for the reporting periods. Actual results could differ from those estimates. All significant intercompany balances and transactions have been eliminated. These condensed consolidated financial statements 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, 2018. 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, 2018 was derived from audited financial statements, but it does not include all disclosures required by GAAP.

On December 3, 2018, we completed our acquisition of Krausz Development Ltd. and subsidiaries (“Krausz”). We include the financial statements of Krausz in our consolidated financial statements on a one-month lag. Beginning in the quarter ended March 31, 2019, our statements of operations and of cash flows included the results of Krausz’s operations. Refer to Note 2 for additional disclosures related to the acquisition.

HR-1, commonly 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 4.

In May 2014, the Financial Accounting Standards Board (“FASB”) issued new guidance for the recognition of revenue and requiring additional financial statement disclosures.  On October 1, 2018, we adopted the new guidance related to revenue recognition from contracts with customers. The new guidance was adopted using the modified retrospective approach and no transition adjustment was required. See Note 3 for more information regarding our adoption of ASC 606 - Revenue from Contracts with Customers.

During 2016, FASB issued Accounting Standards Update 2016-02 Leases, which will require us to recognize lease assets and lease liabilities for those leases currently referred to as operating leases. We will adopt this guidance using the modified retrospective transition method beginning in the first quarter of fiscal 2020. While we are still evaluating the impact this standard will have on our consolidated financial statements and related disclosures, we have completed our initial scoping reviews and have made progress in our assessment phase as we continue to identify necessary changes to our business processes. We also have made progress in developing the policy elections we will make upon adoption and we are using new software to meet the reporting requirements of this standard. We do not believe the impact of this standard will be material to our consolidated financial statements as a whole.

On February 15, 2019, we experienced a mass shooting event at our Henry Pratt facility in Aurora, Illinois. The event resulted in the death of five employees and injuries to one employee and six law enforcement officials. For the quarter ended March 31, 2019, we have incurred $4.3 million in expenses related to this event, which are included in strategic reorganization and other charges.

In 2017, we announced a strategic reorganization plan designed to accelerate our product innovation and revenue growth, through the adoption of 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 centralized to better align with business needs and generate greater efficiencies, which was essentially completed in 2018. In October 2018, we announced the move of our Middleborough, Massachusetts facility to Atlanta to consolidate our resources and accelerate product innovation through creation of a research and development center of excellence for software and electronics. Costs and expenses in the six months ended March 31, 2019 and 2018 for these plans, included in strategic reorganization and other charges, were primarily personnel-related.

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

	Six months ended
	March 31,
	2019			2018
	(in millions)
Beginning balance	$	0.9		$	3.3
Expense accrued	3.4			3.6
Payments	(2.6		)	(3.9		)
Ending balance	$	1.7		$	3.0

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Acquisitions and Divestures Business Combinations (Notes)

6 Months Ended

Mar. 31, 2019

Business Combinations [Abstract]

Business Combination Disclosure [Text Block]

Acquisition of Krausz

On December 3, 2018, we completed our acquisition of Krausz, a manufacturer of pipe couplings, grips and clamps with operations in the United States and Israel, for $140.7 million, net of cash acquired, including the assumption and simultaneous repayment of certain debt of $13.2 million. The purchase agreement provides for customary final adjustments, including a net working capital adjustment, which we expect to occur in 2019. Annual sales for Krausz in calendar 2017 were approximately $43.0 million.

The acquisition of Krausz was financed with cash on hand. The results of Krausz, including net sales of $10.5 million, are included within our Infrastructure segment in the quarter ended March 31, 2019.

We have recognized the assets acquired and liabilities assumed at their estimated acquisition date fair values, with the excess of the purchase price over the estimated fair values of the identifiable net assets acquired recorded as goodwill. The accounting for the business combination is based on currently available information and is considered preliminary. We have retained a third party valuation specialist to assist in our estimate of the fair value of acquired intangible assets and we have not yet completed that estimate. We recorded intangible assets of $53 million based on a preliminary valuation. In addition, we are gathering information about income taxes and deferred income tax assets and liabilities, accounts receivables, inventories, property, plant, and equipment, other current assets and current liabilities based on facts that existed as of the date of the acquisition. The final accounting for the business combination may differ materially from that presented in these unaudited condensed consolidated financial statements.

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

Assets, net of cash:
Receivables	$	6.9
Inventories	17.0
Other current assets	0.2
Property, plant and equipment	8.4
Intangible assets	53.0
Goodwill	71.0
Liabilities(1):
Accounts payable	(5.5		)
Other current liabilities	(2.9		)
Deferred income taxes	(7.4		)
Consideration paid	$	140.7
(1) Excludes certain debt assumed and immediately repaid of $13.2 million.

The preliminary estimated goodwill above is attributable to the strategic opportunities and synergies that we expect to arise from the acquisition of Krausz and the workforce of the acquired businesses. The goodwill is nondeductible for income tax purposes. The intangible assets of $53.0 million consists of an estimated $42.0 million of finite-lived patents, customer relationship intangibles, and favorable leasehold interests, with an estimated weighted average useful life of approximately 12 years, and indefinite-lived tradename intangibles with an estimated value of $11.0 million.

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Income Taxes

6 Months Ended

Mar. 31, 2019

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

Income Taxes

On December 22, 2017, HR-1, commonly referred to as the Tax Cuts and Jobs Act (“Act”), was enacted, which made significant revisions to federal income tax laws, including lowering the corporate income tax rate to 21% from 35% effective January 1, 2018, overhauling the taxation of income earned outside the United States and eliminating or limiting certain deductions.

Our deferred tax assets and liabilities are recorded at the enacted tax rates in effect when we expect to recognize the related tax expenses or benefits. These rates vary slightly from year to year but historically had been approximately 39%. With the legislation changing enacted rates taking place in the quarter ended December 31, 2017, we remeasured our deferred tax items at an average rate of approximately 25% and recorded an income tax benefit of $42.5 million.

The Act also imposed a one-time transition tax on the undistributed, non-previously taxed, post-1986 foreign “earnings and profits” (as defined by the IRS) of certain U.S.-owned corporations. Determination of our transition tax liability required us to calculate foreign earnings and profits going back to 1992 and then to assess our historical overall foreign loss position and the applicability of certain foreign tax credits. For the quarter ended March 31, 2018, we recorded a provisional transaction tax of $7.5 million for the one-time deemed repatriation tax on accumulated foreign earnings of our foreign subsidiaries. Upon further analyses of the Act and Notices and regulations issued and proposed by the U.S. Department of the Treasury and the IRS, for the quarter ended December 31, 2018 we finalized our calculations of the transition tax liability, which reduced our initial provision by $0.6 million, and is included as a component of income tax expense in the quarter. As of March 31, 2019, the remaining balance of our transition obligation is $6.4 million, which will be paid over the next seven years, as provided in the Act.

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

	Three months ended				Six months ended
	March 31,				March 31,
	2019		2018		2019		2018
U.S. federal statutory income tax rate	21.0	%	24.5	%	21.0	%	24.5	%
Adjustments to reconcile to the effective tax rate:
State income taxes, net of federal benefit	4.5		4.4		1.8		4.4
Excess tax expense (benefits) related to stock compensation	0.3		(1.1	)	2.5		(1.7	)
Domestic production activities deduction	—		(1.6	)	—		(1.6	)
Tax credits	(1.3	)	(0.9	)	2.6		(0.9	)
Global Intangible Low-taxed Income	0.5		—		(1.1	)	—
Other	1.4		2.2		(1.9	)	(0.8	)
	26.4	%	27.5	%	24.9	%	23.9	%
Walter Energy Accrual	—		—		(12.9	)	—
Transition tax	—		30.7		4.7		18.9
Remeasurement of deferred tax items	—		—		—		(107.3	)
Effective income tax rate	26.4	%	58.2	%	16.8	%	(64.5	)%

At March 31, 2019 and September 30, 2018, the gross liabilities for unrecognized income tax benefits were $3.5 million and $3.3 million, respectively.

Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]

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

	Three months ended				Six months ended
	March 31,				March 31,
	2019		2018		2019		2018
U.S. federal statutory income tax rate	21.0	%	24.5	%	21.0	%	24.5	%
Adjustments to reconcile to the effective tax rate:
State income taxes, net of federal benefit	4.5		4.4		1.8		4.4
Excess tax expense (benefits) related to stock compensation	0.3		(1.1	)	2.5		(1.7	)
Domestic production activities deduction	—		(1.6	)	—		(1.6	)
Tax credits	(1.3	)	(0.9	)	2.6		(0.9	)
Global Intangible Low-taxed Income	0.5		—		(1.1	)	—
Other	1.4		2.2		(1.9	)	(0.8	)
	26.4	%	27.5	%	24.9	%	23.9	%
Walter Energy Accrual	—		—		(12.9	)	—
Transition tax	—		30.7		4.7		18.9
Remeasurement of deferred tax items	—		—		—		(107.3	)
Effective income tax rate	26.4	%	58.2	%	16.8	%	(64.5	)%

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Borrowing Arrangements

6 Months Ended

Mar. 31, 2019

Long-term Debt and Capital Lease Obligations [Abstract]

Borrowing Arrangements

Borrowing Arrangements

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

	March 31,		September 30,
	2019		2018
	(in millions)
5.5% Senior Notes	$	450.0	$	450.0
ABL Agreement	—		—
Other	1.9		1.6
	451.9		451.6
Less deferred financing costs	6.2		6.6
Less current portion	0.8		0.7
Long-term debt	$	444.9	$	444.3

5.5% Senior Unsecured Notes. On June 12, 2018, we privately issued $450.0 million of 5.5% Senior Unsecured Notes (“Notes”), which mature in 2026 and bear interest at 5.5%. We capitalized $6.6 million of financing costs, which are being amortized over the term of the Notes using the effective interest method. Proceeds from the Notes along with other cash, were used to repay our Term Loan. Substantially all of our U.S. Subsidiaries guarantee the Notes, which are subordinate to borrowings under the ABL. Based on quoted market prices, the outstanding Notes had a fair value of $457.9 million at March 31, 2019.

ABL Agreement. At March 31, 2019, our asset based lending agreement (“ABL Agreement”) consisted of a revolving credit facility for up to $175 million of revolving credit borrowings, swing line loans and letters of credit. The ABL Agreement permits us to increase the size of the credit facility by an additional $150 million in certain circumstances subject to adequate borrowing base availability. We may borrow up to $25 million through swing line loans and we are permitted to issue up to $60 million of letters of credit.

Borrowings under the ABL Agreement bear interest at a floating rate equal to LIBOR, plus a margin ranging from 125 to 150 basis points, or a base rate, as defined in the ABL Agreement, plus a margin ranging from 25 to 50 basis points. At March 31, 2019, 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 capacity under the ABL Agreement of 25 basis points per annum. Our obligations under the ABL Agreement are secured by a first-priority perfected lien on all of our U.S. receivables and inventories, certain cash and other supporting obligations. Borrowings are not subject to any financial maintenance covenants unless excess availability is less than the greater of $17.5 million and 10% of the Loan Cap as defined in the ABL Agreement. Excess availability based on March 31, 2019 data, as reduced by outstanding letters of credit and accrued fees and expenses of $16.3 million, was $142.8 million.

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Derivative Financial Instruments (Notes)	6 Months Ended
	Mar. 31, 2019
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Derivative Instruments and Hedging Activities Disclosure [Text Block]	Derivative Financial Instruments In connection with the acquisition of Singer Valve in 2017, we loaned funds to one of our Canadian subsidiaries. Although this intercompany loan has no direct effect on our consolidated financial statements, it creates exposure to currency risk for the Canadian subsidiary. To reduce this exposure, we entered into a U.S. dollar-Canadian dollar swap contract with the Canadian subsidiary and an offsetting Canadian dollar-U.S. dollar swap with a domestic bank. We have not designated these swaps as hedges and the changes in their fair values are included in earnings, where they offset the currency gains and losses associated with the intercompany loan. The values of our currency swap contracts were liabilities of $0.4 million and $0.9 million as of March 31, 2019 and September 30, 2018, respectively, and are included in other noncurrent liabilities in our Consolidated Balance Sheets.

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Retirement Plans

6 Months Ended

Mar. 31, 2019

Defined Benefit Plan [Abstract]

Retirement Plans

Retirement Plans

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

	Three months ended						Six months ended
	March 31,						March 31,
	2019			2018			2019			2018
	(in millions)
Service cost	$	0.4		$	0.4		$	0.8		$	0.9
Pension costs (benefits) other than service:
Interest cost	3.5			3.6			7.0			7.2
Expected return on plan assets	(4.0		)	(4.1		)	(8.1		)	(8.3		)
Amortization of actuarial net loss	0.5			0.8			1.0			1.6
Curtailment/special settlement loss (gain)	1.0			—			1.0			—
Pension costs (benefits) other than service	1.0			0.3			0.9			0.5
Net periodic benefit cost	$	1.4		$	0.7		$	1.7		$	1.4

The amortization of actuarial losses, net of tax, is recorded as a component of other comprehensive loss.

During the quarter ended March 31, 2019, we settled our obligations to our Canadian pension plan participants through a combination of lump-sum payments and purchases of annuities. We made a contribution to the plans of $1.0 million, which is included in pension costs other than service, to fund these settlements.

Also during the quarter ended March 31, 2019, we recorded an estimated settlement liability for exiting a multi-employer pension plan at one of our manufacturing locations, which resulted in an expense of $1.1 million that we included in strategic reorganization and other charges.

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Stock-based Compensation Plans

6 Months Ended

Mar. 31, 2019

Share-based Compensation [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

Stock-based Compensation Plans

We have granted various forms of stock-based compensation, including stock options, restricted stock units and performance-based restricted stock units (“PRSUs”) under our Amended and Restated 2006 Mueller Water Products, Inc. Stock Incentive Plan (the “2006 Stock Plan”).

A PRSU award represents a target number of units that may be paid out at the end of a multi-year award cycle consisting of a series of annual performance periods coinciding with our fiscal years. After we establish the financial performance targets related to PRSUs for a given performance period, typically during the first quarter of that fiscal year, we consider that portion of a PRSU award to be granted. Thus, each award consists of a grant in the year of award and grants in the designated following years. Settlements, in our common shares, will range from zero to two times the number of PRSUs granted, depending on our financial performance against the targets.

We awarded 332,875 stock-settled PRSUs in the six months ended March 31, 2019, which are scheduled to settle in 3 years.

We issued 181,065 shares and 146,061 shares of common stock during the six months ended March 31, 2019 and 2018, respectively, to settle PRSUs.

In addition to the PRSU activity, 115,298 and 259,107 restricted stock units vested during the three and six months ended March 31, 2019, respectively.

We have granted cash-settled Phantom Plan instruments under the Mueller Water Products, Inc. Phantom Plan (“Phantom Plan”). At March 31, 2019, the outstanding Phantom Plan instruments had a fair value of $10.04 per instrument and our liability for Phantom Plan instruments was $1.0 million.

We granted stock-based compensation awards under the 2006 Stock Plan, the Mueller Water Products, Inc. 2006 Employee Stock Purchase Plan and the Phantom Plan during the six months ended March 31, 2019 as follows.

	Number granted	Weighted average grant date fair value per instrument		Total grant date fair value (in millions)
Quarter ended December 31, 2018:
Restricted stock units	147,409	$	10.53	$	1.6
Employee stock purchase plan instruments	45,464	2.30		0.1
Phantom Plan awards	168,380	10.53		1.8
PRSUs: 2019 award	110,595	10.53		1.2
2018 award	49,236	10.53		0.5
2017 award	31,229	10.53		0.3
Quarter ended March 31, 2019:
Restricted stock units	76,919	9.35		0.7
Employee stock purchase plan instruments	43,139	2.50		0.1
				$	6.3

Operating income included stock-based compensation expense of $1.0 million and $1.6 million during the three months ended March 31, 2019 and 2018, respectively, and $2.7 million and $4.0 million during the six months ended March 31, 2019 and 2018, respectively. At March 31, 2019, there was approximately $8.5 million of unrecognized compensation expense related to stock-based compensation arrangements, and there were 279,024 PRSUs that have been awarded for the 2020 and 2021 performance periods, for which performance goals have not been set.

We excluded 202,245 and 289,860 of stock-based compensation instruments from the calculations of diluted earnings per share for the quarters ended March 31, 2019 and 2018, respectively, and 1,077,983 and 278,697 for the six months ended March 31, 2019 and 2018, respectively, since their inclusion would have been antidilutive.

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Supplemental Balance Sheet Information

6 Months Ended

Mar. 31, 2019

Balance Sheet Related Disclosures [Abstract]

Supplemental Balance Sheet Information

Selected supplemental balance sheet information is presented below.

	March 31,			September 30,
	2019			2018
	(in millions)
Inventories:
Purchased components and raw material	$	97.7		$	81.6
Work in process	46.7			37.8
Finished goods	61.5			37.2
	$	205.9		$	156.6
Other current assets:
Maintenance and repair tooling	$	3.9		$	3.5
Income taxes	8.7			1.6
Other	15.0			12.4
	$	27.6		$	17.5
Property, plant and equipment:
Land	$	5.4		$	5.4
Buildings	59.4			55.9
Machinery and equipment	330.8			311.4
Construction in progress	41.1			22.2
	436.7			394.9
Accumulated depreciation	(260.7		)	(244.0		)
	$	176.0		$	150.9
Other current liabilities:
Compensation and benefits	$	23.3		$	31.7
Customer rebates	4.5			9.7
Taxes other than income taxes	4.1			3.3
Warranty	7.9			6.0
Income taxes	0.8			7.6
Environmental	1.2			1.2
Interest	7.9			8.0
Restructuring	1.7			0.9
Walter Energy Accrual	37.9			—
Other	15.1			8.0
	$	104.4		$	76.4

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Accumulated Other Comprehensive Loss

6 Months Ended

Mar. 31, 2019

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block]

Accumulated other comprehensive loss is presented below.

	Pension, net of tax			Foreign currency translation			Total
	(in millions)
Balance at September 30, 2018	$	(26.5	)	$	(6.3	)	$	(32.8	)
Current period other comprehensive income (loss)	1.9			3.1			$	5.0
Balance at March 31, 2019	$	(24.6	)	$	(3.2	)	$	(27.8	)

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Segment Information

6 Months Ended

Mar. 31, 2019

Segment Reporting, Measurement Disclosures [Abstract]

Segment Reporting Disclosure [Text Block]

Segment Information

Summarized financial information for our segments is presented below.

	Three months ended						Six months ended
	March 31,						March 31,
	2019			2018			2019			2018
	(in millions)
Net sales, excluding intercompany:
Infrastructure	$	214.1		$	211.1		$	386.1		$	371.2
Technologies	19.9			22.1			40.7			40.3
	$	234.0		$	233.2		$	426.8		$	411.5
Operating income (loss):
Infrastructure	$	40.1		$	44.9		$	71.0		$	73.0
Technologies	(3.6		)	(3.9		)	(7.3		)	(8.6		)
Corporate	(14.3		)	(11.1		)	(25.6		)	(13.8		)
	$	22.2		$	29.9		$	38.1		$	50.6
Depreciation and amortization:
Infrastructure	$	11.4		$	9.4		$	21.5		$	18.5
Technologies	1.9			1.5			3.9			2.9
Corporate	0.1			—			0.1			0.1
	$	13.4		$	10.9		$	25.5		$	21.5
Strategic reorganization and other charges:
Infrastructure	$	1.1		$	0.1		$	1.1		$	0.1
Technologies	—			—			—			0.1
Corporate	5.8			1.8			9.0			5.6
	$	6.9		$	1.9		$	10.1		$	5.8
Capital expenditures:
Infrastructure	$	13.0		$	4.8		$	27.8		$	11.1
Technologies	1.6			1.5			2.7			3.0
Corporate	—			0.1			—			0.3
	$	14.6		$	6.4		$	30.5		$	14.4
Infrastructure disaggregated net revenues:
Central	$	55.0		$	54.2		$	95.3		93.8
Northeast	44.9			28.9			82.8			66.8
Southeast	41.2			53.7			75.9			82.6
West	50.6			54.3			95.3			94.1
United States	191.7			191.1			349.3			337.3
Canada	15.2			16.9			25.1			27.5
Other international locations	7.2			3.1			11.7			6.4
	$	214.1		$	211.1		$	386.1		$	371.2
Technologies disaggregated net revenues:
Central	7.4			4.1			13.9			7.6
Northeast	3.4			5.4			6.8			9.4
Southeast	7.0			8.1			13.8			15.6
West	$	1.5		$	3.4		$	4.2		$	5.3
United States	19.3			21.0			38.7			37.9
Canada	0.1			0.4			0.3			0.5
Other international locations	0.5			0.7			1.7			1.9
	$	19.9		$	22.1		$	40.7		$	40.3

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Commitments and Contingencies

6 Months Ended

Mar. 31, 2019

Commitments and Contingencies Disclosure [Abstract]

Commitments And Contingencies

Commitments and Contingencies

We are involved in various legal proceedings that have arisen in the normal course of operations, including the proceedings summarized below. The effect of the outcome of these matters on our financial statements cannot be predicted with certainty as any such effect depends on the amount and timing of the resolution of such matters. Other than the litigation described below, we do not believe that any of our outstanding litigation would have a material adverse effect on our business or prospects.

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 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’s remediation costs, the number and financial viability of the other PRPs (there are four other PRPs currently) and the determination of the final allocation of the costs among the PRPs. Accordingly, because the amount of such costs cannot be reasonably estimated at this time, no amounts had been accrued for this matter at March 31, 2019.

Walter Energy. We were a member of the Walter Energy, Inc (“Walter Energy”) federal tax consolidated group, through December 14, 2006, at which time the company was spun-off from Walter Energy. Until our spin-off from Walter Energy, we joined in the filing of Walter Energy’s consolidated federal income tax return for each taxable year during which we were a member of the consolidated group. As a result, we are severally liable for the federal income tax liability, if any, of the consolidated group for each of those years. 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 that consolidated group.

In July 2015, Walter Energy filed for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy Code in the Northern District of Alabama (“Chapter 11 Case”). In February 2017, the Chapter 11 case was converted to a liquidation proceeding under Chapter 7 of the U.S. Bankruptcy Code, pursuant to which Walter Energy is now in the process of being wound down and liquidated.

The IRS has asserted that Walter Energy owes substantial amounts for prior taxable periods in which we were a member of the Walter Energy tax consolidated group (specifically, 1983-1994, 2000-2002 and 2005). On January 11, 2016, the IRS filed a proof of claim (“IRS 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 Claim was based on IRS estimates of Walter Energy’s tax liability for years 1983 through 1994, which Walter Energy disputed.  In the IRS claim, the IRS included an alternative calculation in an aggregate amount of $860.4 million, which it asserted would be appropriate in the event the alleged settlement is determined to be non-binding ($535.3 million of which the IRS claims is entitled to priority status in the Chapter 11 Case). The IRS has indicated its intent to pursue collection of amounts included in the proofs of claim from former members of the Walter Energy tax consolidated group. These liabilities are potentially significant and, if not concluded favorably, could have a material adverse effect on our business, financial condition, liquidity or results of operations.

After extensive work and discussions with the IRS, the Department of Justice, the Walter Energy bankruptcy trustee, and other involved parties and experts, the IRS has provided us with a $37.4 million calculation of the tax liability emanating from the activities of certain businesses of our former parent, Walter Energy (“Walter Tax Liability”; also see Item 3 - Legal Proceedings and Item 1A - Risk Factors in our Annual Report on Form 10-K for the fiscal year ended September 30, 2018 for additional details regarding the issues associated with the Walter Tax Liability). The IRS calculation includes interest amounts calculated through January 31, 2019 and these interest amounts will continue to accrue until the matter is finalized. Accordingly, for the quarter ended December 31, 2018, we recorded a $37.4 million accrual (“Walter Energy Accrual”) related to the Walter Tax Liability. During the quarter ended March 31, 2019, we recorded an additional accrual of $0.5 million for subsequent accrued interest. At March 31, 2019 the Walter Energy Accrual consisted of approximately $7 million in unpaid taxes and approximately $31 million of related interest.

While our previous activities and tax positions were not the source of the Walter Tax Liability, since we were a member of the Walter Energy consolidated tax group in certain historic periods, under federal law, each member of a consolidated group for U.S. federal income tax purposes can be severally liable for the federal income tax liability of each other member of the consolidated group for any year in which it was a member of the consolidated tax group. Thus, we are recording the Walter Energy Accrual due to the operation of several liability under federal law. We are continuing to work with other parties involved in this matter in an effort to negotiate a settlement with respect to the Walter Tax Liability, but there can be no assurance that we will be able to reach a resolution with the parties involved in this matter. Relatedly, we filed a proof of claim in the Ditech Financial LLC (“Ditech”) bankruptcy proceeding in the United States Bankruptcy Court for the Southern District of New York seeking contribution from Ditech for the Walter Tax Liability. We have no ability to predict the outcome of such proceeding.

Chapman v. Mueller Water Products, et al. In 2017, our warranty analyses identified that certain Technologies radio products produced prior to 2017 and installed in particularly harsh environments had been failing at higher than expected rates. During the quarter ended March 31, 2017, we conducted additional testing of these products and revised our estimates of warranty expenses. As a result, we recorded additional warranty expense of $9.8 million in the second quarter of 2017. During the quarter ended June 30, 2018, we completed a similar analysis and determined, based on this new information, that certain other Technologies products had been failing at higher-than-expected rates as well and that the average cost to repair or replace certain products under warranty was higher than previously estimated. As a result, in the third quarter of 2018, we recorded additional warranty expense of $14.1 million associated with such products. Related to the above warranty expenses, on April 11, 2019, an alleged stockholder filed a putative class action lawsuit against Mueller Water Products, Inc. and certain of our former and current officers (collectively, the “Defendants”) in the U.S. District Court for the Southern District of New York. The proposed class consists of all persons and entities that acquired our securities between May 9, 2016 and August 6, 2018 (the “Class Period”). The complaint alleges violations of the federal securities laws, including, among other things, that we made materially false and/or misleading statements and failed to disclose material adverse facts about our business, operations, and prospects during the proposed Class Period. The plaintiff seeks compensatory damages and attorneys’ fees and costs but does not specify the amount. We believe the allegations are without merit and intend to vigorously defend against the claims. However, the outcome of this legal proceeding cannot be predicted with certainty.

Mass Shooting Event at our Henry Pratt Facility in Aurora, Illinois. On February 15, 2019, we experienced a mass shooting event at our Henry Pratt facility in Aurora, Illinois, in which five employees were killed and one employee and six law enforcement officers were injured. Various workers’ compensation claims arising from the event have been made to date, and we anticipate that additional claims may be made. However, the possibility of other legal proceedings arising from this event cannot be predicted with certainty.

Indemnifications. We are a party to contracts in which it is common for us to agree to indemnify third parties for certain liabilities that arise out of or relate to the subject matter of the contract. In some cases, this indemnity extends to related liabilities arising from the negligence of the indemnified parties, but usually excludes any liabilities caused by gross negligence or willful misconduct. We cannot estimate the potential amount of future payments under these indemnities until events arise that would trigger a liability under the indemnities.

Additionally, in connection with the sale of assets and the divestiture of businesses, such as the divestitures of U.S. Pipe and Anvil, we may agree to indemnify buyers and related parties for certain losses or liabilities incurred by these parties with respect to: (i) the representations and warranties made by us to these parties in connection with the sale and (ii) liabilities related to the pre-closing operations of the assets or business sold. Indemnities related to pre-closing operations generally include certain environmental and tax liabilities and other liabilities not assumed by these parties in the transaction.

Indemnities related to the pre-closing operations of sold assets or businesses normally do not represent additional liabilities to us, but simply serve to protect these parties from potential liability associated with our obligations existing at the time of the sale. As with any liability, we have accrued for those pre-closing obligations that are considered probable and reasonably estimable. Should circumstances change, increasing the likelihood of payments related to a specific indemnity, we will accrue a liability when future payment is probable and the amount is reasonably estimable.

Other Matters. We monitor and analyze our warranty experience and costs periodically and may revise our reserves as necessary. Critical factors in our reserve 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 business or prospects.

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Subsequent Events	6 Months Ended
	Mar. 31, 2019
Subsequent Events [Abstract]
Subsequent Events	Subsequent Events On April 23, 2019, our board of directors declared a dividend of $0.05 per share on our common stock, payable on or about May 20, 2019 to stockholders of record at the close of business on May 10, 2019.

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Revenue from Contracts with Customers (Notes)

6 Months Ended

Mar. 31, 2019

Revenue from Contracts with Customers [Abstract]

Revenue from Contract with Customer [Text Block]

    Revenue from Contracts with Customers

We recognize revenue, in an amount that reflects the consideration we expect to be entitled to in exchange for transferring those products or providing those services, when control of the promised products or services is transferred to our customers. We account for a contract when it has approval and commitment from both parties, the rights of the parties are identified, the payment terms are identified, the contract has commercial substance and collectability of consideration is probable. We determine the appropriate revenue recognition for our contracts with customers by analyzing the type, terms and conditions of each contract or arrangement with a customer.

Disaggregation of Revenue

We disaggregate our revenue from contracts with customers by reporting unit, which are the same as our reportable segments (Note 10), and further by geographical region as we believe this best depicts how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors. Geographical region represents the location of the customer.

Contract Asset and Liability Balances

The timing of revenue recognition, billings and cash collections results in customer receivables, advance payments and billings in excess of revenue recognized. Customer receivables includes amounts billed and currently due from customers as well as unbilled amounts (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. Customer receivables are recorded at face amounts less an allowance for doubtful accounts. We maintain an allowance for doubtful accounts for estimated losses as a result of customers’ inability to make required payments. We evaluate the aging of the customer receivable balances, the financial condition of our customers, historical trends and the time outstanding of specific balances to estimate the amount of customer receivables that may not be collected in the future and record the appropriate provision.

Advance payments and billings in excess of revenue are recognized and recorded as deferred revenue, the majority of which is classified as current based on the timing when we expect to recognize revenue. We include current deferred revenue as part of our accrued expenses. Deferred revenues represent contract liabilities and are recorded when customers remit contractual cash payments in advance of us satisfying performance obligations under contractual arrangements. Contract liabilities are reversed when the performance obligation is satisfied and revenue is recognized .

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

	March 31,		September 30,
	2019		2018
	(in millions)
Billed receivables	$	164.6	$	165.3
Unbilled receivables	5.5		2.4
Total customer receivables	$	170.1	$	167.7
Deferred revenue	$	4.0	$	3.3

Performance Obligations

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer. Our performance obligations are satisfied at a point in time as related to sales of equipment or over time as related to our software hosting and leak detection monitoring services. Performance obligations are supported by customer contracts, which provide frameworks for the nature of the distinct products or services. We allocate the transaction price of each contract to the performance obligations on the basis of standalone selling price and recognize revenue when, or as, control of the performance obligation transfers to the customers.

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

Revenue from products and services transferred to customers at a point in time represented 99% of our revenue in the first six months of fiscal year 2019. The revenue recognized at a point in time related to the sale of our products and was recognized when the obligations of the terms of our contract were satisfied, which generally occurs upon shipment, when control of the product transfers to the customer.

Revenue from products and services transferred to customers over time represented 1% of our revenue in the first six months of fiscal year 2019.

We offer warranties to our customers in the form of assurance-type warranties, which provide assurance that the related product provided will function as intended and comply with any agreed-upon specifications. These cannot be purchased separately. There is no change to our warranty accounting as a result of the implementation of the new revenue standard and we will continue to use our current cost accrual method in accordance with GAAP.

Costs to Obtain or Fulfill a Contract

We incur certain incremental costs to obtain a contract, which primarily relate to incremental sales commissions. Our commissions are paid based on shipment rather than on order and we reserve the right to claw back any commissions in case of product returns or lost collections. As the expected benefit associated with these incremental costs is one year or less based on the nature of the product sold and benefits received, we have applied a practical expedient and therefore will not capitalize the related costs and will continue to expense them as incurred, consistent with our previous accounting treatment.

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Organization Restructuring Rollforward (Tables)

6 Months Ended

Mar. 31, 2019

Restructuring Cost and Reserve [Line Items]

Restructuring and Related Costs [Table Text Block]

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

	Six months ended
	March 31,
	2019			2018
	(in millions)
Beginning balance	$	0.9		$	3.3
Expense accrued	3.4			3.6
Payments	(2.6		)	(3.9		)
Ending balance	$	1.7		$	3.0

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Acquisitions and Divestures Acquisitions (Tables)

6 Months Ended

Mar. 31, 2019

Business Acquisition [Line Items]

Schedule of Business Acquisitions, by Acquisition [Table Text Block]

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

Assets, net of cash:
Receivables	$	6.9
Inventories	17.0
Other current assets	0.2
Property, plant and equipment	8.4
Intangible assets	53.0
Goodwill	71.0
Liabilities(1):
Accounts payable	(5.5		)
Other current liabilities	(2.9		)
Deferred income taxes	(7.4		)
Consideration paid	$	140.7
(1) Excludes certain debt assumed and immediately repaid of $13.2 million.

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Income Taxes Rate Reconciliation (Tables)

6 Months Ended

Mar. 31, 2019

Income Tax Disclosure [Abstract]

Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]

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

	Three months ended				Six months ended
	March 31,				March 31,
	2019		2018		2019		2018
U.S. federal statutory income tax rate	21.0	%	24.5	%	21.0	%	24.5	%
Adjustments to reconcile to the effective tax rate:
State income taxes, net of federal benefit	4.5		4.4		1.8		4.4
Excess tax expense (benefits) related to stock compensation	0.3		(1.1	)	2.5		(1.7	)
Domestic production activities deduction	—		(1.6	)	—		(1.6	)
Tax credits	(1.3	)	(0.9	)	2.6		(0.9	)
Global Intangible Low-taxed Income	0.5		—		(1.1	)	—
Other	1.4		2.2		(1.9	)	(0.8	)
	26.4	%	27.5	%	24.9	%	23.9	%
Walter Energy Accrual	—		—		(12.9	)	—
Transition tax	—		30.7		4.7		18.9
Remeasurement of deferred tax items	—		—		—		(107.3	)
Effective income tax rate	26.4	%	58.2	%	16.8	%	(64.5	)%

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Borrowing Arrangements (Tables)

6 Months Ended

Mar. 31, 2019

Long-term Debt and Capital Lease Obligations [Abstract]

Components of Long-Term Debt

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

	March 31,		September 30,
	2019		2018
	(in millions)
5.5% Senior Notes	$	450.0	$	450.0
ABL Agreement	—		—
Other	1.9		1.6
	451.9		451.6
Less deferred financing costs	6.2		6.6
Less current portion	0.8		0.7
Long-term debt	$	444.9	$	444.3

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Retirement Plans (Tables)

6 Months Ended

Mar. 31, 2019

Defined Benefit Plan [Abstract]

Schedule of Net Periodic Benefit Cost

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

	Three months ended						Six months ended
	March 31,						March 31,
	2019			2018			2019			2018
	(in millions)
Service cost	$	0.4		$	0.4		$	0.8		$	0.9
Pension costs (benefits) other than service:
Interest cost	3.5			3.6			7.0			7.2
Expected return on plan assets	(4.0		)	(4.1		)	(8.1		)	(8.3		)
Amortization of actuarial net loss	0.5			0.8			1.0			1.6
Curtailment/special settlement loss (gain)	1.0			—			1.0			—
Pension costs (benefits) other than service	1.0			0.3			0.9			0.5
Net periodic benefit cost	$	1.4		$	0.7		$	1.7		$	1.4

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Stock-based Compensation Plans (Tables)

6 Months Ended

Mar. 31, 2019

Share-based Compensation [Abstract]

Share-based Compensation, Activity [Table Text Block]

	Number granted	Weighted average grant date fair value per instrument		Total grant date fair value (in millions)
Quarter ended December 31, 2018:
Restricted stock units	147,409	$	10.53	$	1.6
Employee stock purchase plan instruments	45,464	2.30		0.1
Phantom Plan awards	168,380	10.53		1.8
PRSUs: 2019 award	110,595	10.53		1.2
2018 award	49,236	10.53		0.5
2017 award	31,229	10.53		0.3
Quarter ended March 31, 2019:
Restricted stock units	76,919	9.35		0.7
Employee stock purchase plan instruments	43,139	2.50		0.1
				$	6.3

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Supplemental Balance Sheet Information (Tables)

6 Months Ended

Mar. 31, 2019

Balance Sheet Related Disclosures [Abstract]

Schedule Of Selected Supplemental Balance Sheet Information [Table Text Block]

ental balance sheet information is presented below.

	March 31,			September 30,
	2019			2018
	(in millions)
Inventories:
Purchased components and raw material	$	97.7		$	81.6
Work in process	46.7			37.8
Finished goods	61.5			37.2
	$	205.9		$	156.6
Other current assets:
Maintenance and repair tooling	$	3.9		$	3.5
Income taxes	8.7			1.6
Other	15.0			12.4
	$	27.6		$	17.5
Property, plant and equipment:
Land	$	5.4		$	5.4
Buildings	59.4			55.9
Machinery and equipment	330.8			311.4
Construction in progress	41.1			22.2
	436.7			394.9
Accumulated depreciation	(260.7		)	(244.0		)
	$	176.0		$	150.9
Other current liabilities:
Compensation and benefits	$	23.3		$	31.7
Customer rebates	4.5			9.7
Taxes other than income taxes	4.1			3.3
Warranty	7.9			6.0
Income taxes	0.8			7.6
Environmental	1.2			1.2
Interest	7.9			8.0
Restructuring	1.7			0.9
Walter Energy Accrual	37.9			—
Other	15.1			8.0
	$	104.4		$	76.4

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Accumulated Other Comprehensive Loss (Tables)

6 Months Ended

Mar. 31, 2019

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

Schedule Of Accumulated Other Comprehensive Loss

Accumulated other comprehensive loss is presented below.

	Pension, net of tax			Foreign currency translation			Total
	(in millions)
Balance at September 30, 2018	$	(26.5	)	$	(6.3	)	$	(32.8	)
Current period other comprehensive income (loss)	1.9			3.1			$	5.0
Balance at March 31, 2019	$	(24.6	)	$	(3.2	)	$	(27.8	)

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Segment Information (Tables)

6 Months Ended

Mar. 31, 2019

Segment Reporting, Measurement Disclosures [Abstract]

Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas

Schedule Of Selected Supplemental Balance Sheet Information

Summarized financial information for our segments is presented below.

	Three months ended						Six months ended
	March 31,						March 31,
	2019			2018			2019			2018
	(in millions)
Net sales, excluding intercompany:
Infrastructure	$	214.1		$	211.1		$	386.1		$	371.2
Technologies	19.9			22.1			40.7			40.3
	$	234.0		$	233.2		$	426.8		$	411.5
Operating income (loss):
Infrastructure	$	40.1		$	44.9		$	71.0		$	73.0
Technologies	(3.6		)	(3.9		)	(7.3		)	(8.6		)
Corporate	(14.3		)	(11.1		)	(25.6		)	(13.8		)
	$	22.2		$	29.9		$	38.1		$	50.6
Depreciation and amortization:
Infrastructure	$	11.4		$	9.4		$	21.5		$	18.5
Technologies	1.9			1.5			3.9			2.9
Corporate	0.1			—			0.1			0.1
	$	13.4		$	10.9		$	25.5		$	21.5
Strategic reorganization and other charges:
Infrastructure	$	1.1		$	0.1		$	1.1		$	0.1
Technologies	—			—			—			0.1
Corporate	5.8			1.8			9.0			5.6
	$	6.9		$	1.9		$	10.1		$	5.8
Capital expenditures:
Infrastructure	$	13.0		$	4.8		$	27.8		$	11.1
Technologies	1.6			1.5			2.7			3.0
Corporate	—			0.1			—			0.3
	$	14.6		$	6.4		$	30.5		$	14.4
Infrastructure disaggregated net revenues:
Central	$	55.0		$	54.2		$	95.3		93.8
Northeast	44.9			28.9			82.8			66.8
Southeast	41.2			53.7			75.9			82.6
West	50.6			54.3			95.3			94.1
United States	191.7			191.1			349.3			337.3
Canada	15.2			16.9			25.1			27.5
Other international locations	7.2			3.1			11.7			6.4
	$	214.1		$	211.1		$	386.1		$	371.2
Technologies disaggregated net revenues:
Central	7.4			4.1			13.9			7.6
Northeast	3.4			5.4			6.8			9.4
Southeast	7.0			8.1			13.8			15.6
West	$	1.5		$	3.4		$	4.2		$	5.3
United States	19.3			21.0			38.7			37.9
Canada	0.1			0.4			0.3			0.5
Other international locations	0.5			0.7			1.7			1.9
	$	19.9		$	22.1		$	40.7		$	40.3

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Revenue from Contracts with Customers (Tables)

6 Months Ended

Mar. 31, 2019

Accounts, Notes, Loans and Financing Receivable [Line Items]

Schedule of Financing Receivables, Minimum Payments [Table Text Block]

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

	March 31,		September 30,
	2019		2018
	(in millions)
Billed receivables	$	164.6	$	165.3
Unbilled receivables	5.5		2.4
Total customer receivables	$	170.1	$	167.7
Deferred revenue	$	4.0	$	3.3

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Organization (Details) $ in Millions		3 Months Ended		6 Months Ended		12 Months Ended
	Jul. 31, 2014	Mar. 31, 2019 USD ($)	Mar. 31, 2018 USD ($)	Mar. 31, 2019 USD ($)	Mar. 31, 2018 USD ($)	Sep. 30, 2019 USD ($)	Sep. 30, 2017
Segment Reporting Information [Line Items]
Beginning balance				$ 0.9	$ 3.3	$ 0.9
Restructuring		$ 6.9	$ 1.9	10.1	5.8
Payments				$ 2.6	3.9
Number of Reportable Segments				2,000,000
Variable Interest Entity, Qualitative or Quantitative Information, Ownership Percentage	49.00%
Defined Benefit Plan, Net Periodic Benefit Cost other than Service Cost		$ 1.0	$ 0.3	$ 0.9	$ 0.5
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent		21.00%	24.50%	21.00%	24.50%		35.00%
Mueller Co. [Member]
Segment Reporting Information [Line Items]
Restructuring		$ 1.1	$ 0.1	$ 1.1	$ 0.1
Scenario, Forecast [Member]
Segment Reporting Information [Line Items]
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent						21.00%

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Organization Restructuring (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2019	Mar. 31, 2018
Restructuring Cost and Reserve [Line Items]
Beginning balance			$ 0.9	$ 3.3
Restructuring	$ 6.9	$ 1.9	10.1	5.8
Payments			(2.6)	(3.9)
Mueller One Project [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring			$ 3.4	$ 3.6

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Acquisitions and Divestures (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2017
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Gain on sale of idle property	$ 0.0	$ 0.0	$ 0.0	$ 9.0
Restructuring	$ 6.9	$ 1.9	$ 10.1	5.8
Disposal Group, Including Discontinued Operation, Property, Plant and Equipment, Noncurrent			Divestiture of Burlington plantOn 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 in 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.
Repayment of Krausz debt			$ (13.2)	$ 0.0
Cash [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Disposal Group, Including Discontinued Operation, Consideration					$ 7.4
Prepaid Expenses and Other Current Assets [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Disposal Group, Including Discontinued Operation, Prepaid and Other Assets					0.8
Property, Plant and Equipment [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Disposal Group, Including Discontinued Operation, Property, Plant and Equipment					0.4
Environmental Remediation [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Disposal Group, Including Discontinued Operation, Consideration					$ 1.2

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Acquisitions and Divestures (Schedule of Disposal Groups, Including Discontinued Operations) (Details) - USD ($) $ in Millions	6 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2017
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Repayment of Krausz debt	$ (13.2)	$ 0.0
Prepaid Expenses and Other Current Assets [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Disposal Group, Including Discontinued Operation, Prepaid and Other Assets			$ 0.8
Property, Plant and Equipment [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Disposal Group, Including Discontinued Operation, Property, Plant and Equipment			$ (0.4)

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Acquisitions and Divestures Acquisition (Details) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Mar. 31, 2019
Business Acquisition [Line Items]
Business Combination, Provisional Information, Initial Accounting Incomplete, Adjustment, Intangibles			$ 53.0
Business Combination, Consideration Transferred	$ 140.7
Business Acquisition, Revenue Reported by Acquired Entity for Last Annual Period		$ 43.0
Receivables	6.9
Inventories	17.0
Other current assets	0.2
Property, plant and equipment	8.4
Intangible assets	53.0
Goodwill	71.0
Accounts payable	(5.5)
Other current liabilities	(2.9)
Deferred income taxes	(7.4)
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles			42.0
Indefinite-lived Intangible Assets Acquired			$ 11.0
Business Combination, Consideration Transferred	$ 140.7

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Income Taxes (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended			6 Months Ended		12 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2017	Mar. 31, 2019	Mar. 31, 2018	Sep. 30, 2017	Dec. 31, 2018	Sep. 30, 2018
Income Tax Disclosure [Abstract]
Unrecognized Tax Benefits	$ 3.5			$ 3.5				$ 3.3
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent	21.00%	24.50%		21.00%	24.50%	35.00%
Weighted Average Deferred Income Tax Provision Rate			25.00%			39.00%
Transition Tax Expense	$ 6.4	$ 7.5		$ 6.4	$ 7.5
Transition Tax True-up							$ 0.6

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Income Taxes Income Tax Rate Reconciliation (Details)	3 Months Ended		6 Months Ended		12 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2019	Mar. 31, 2018	Sep. 30, 2017
Effective Income Tax Rate Reconciliation, Percent [Abstract]
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent	21.00%	24.50%	21.00%	24.50%	35.00%
Adjustments to reconcile to the effective tax rate:
State income taxes, net of federal benefit	4.50%	4.40%	1.80%	4.40%
Tax benefits from stock compensation	0.30%	1.10%	(2.50%)	1.70%
U.S. manufacturing deduction	0.00%	(1.60%)	0.00%	(1.60%)
Tax credits	(1.30%)	(0.90%)	2.60%	(0.90%)
Effective Income Tax Rate Reconciliation, GILTI, percent	0.50%	0.00%	(1.10%)	0.00%
Other	1.40%	2.20%	(1.90%)	0.80%
Walter Energy accrual	0.00%	0.00%	(12.90%)	0.00%
Effective Income Tax Rate Reconciliation, Transition Tax	0.00%	30.70%	4.70%	18.90%
Change in rate for deferred taxes	0.00%	0.00%	0.00%	(107.30%)
Effective income tax rate	26.40%	58.20%	16.80%	(64.50%)

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Borrowing Arrangements (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended	6 Months Ended
	Jun. 30, 2018	Mar. 31, 2019	Sep. 30, 2018	Jun. 12, 2018	Mar. 31, 2018	Sep. 30, 2017
Cash and cash equivalents		$ 134.3	$ 347.1		$ 323.9	$ 361.7
Domestic Line of Credit [Member]
Revolving credit facility amount		(175.0)
Potential increase size of the credit facility by an additional amount		$ 150.0
Line of Credit Facility, Interest Rate at Period End		12500.00%
Agreement termination date		Jul. 13, 2021
Aggregate commitments availability		$ 17.5
Aggregate commitments availability, percentage		10.00%
Outstanding letter of credit accrued fees and expenses		$ 16.3
Excess availability reduced by outstanding borrowings, outstanding letters of credit and accrued fees and expenses		142.8
Unsecured Debt [Member]
Long-term Debt, Gross				$ 450.0
Future maturities of outstanding borrowings
Payments of Debt Issuance Costs	$ 6.6
Swing Line Loans [Member]
Revolving credit facility amount		(25.0)
Letters Of Credit Outstanding [Member]
Revolving credit facility amount		$ (60.0)
Bonds [Member]
Debt Instrument, Interest Rate, Effective Percentage		5.50%
Future maturities of outstanding borrowings
Financial Liabilities Fair Value Disclosure		$ 457.9
Minimum [Member] | Domestic Line of Credit [Member]
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage		2500.00%
London Interbank Offered Rate (LIBOR) [Member] | Minimum [Member] | Long-term Debt [Member]
Debt Instrument, Basis Spread on Variable Rate		2500.00%
London Interbank Offered Rate (LIBOR) [Member] | Minimum [Member] | Domestic Line of Credit [Member]
Debt Instrument, Basis Spread on Variable Rate		12500.00%
London Interbank Offered Rate (LIBOR) [Member] | Maximum [Member] | Domestic Line of Credit [Member]
Debt Instrument, Basis Spread on Variable Rate		15000.00%
Base Rate [Member] | Maximum [Member] | Domestic Line of Credit [Member]
Debt Instrument, Basis Spread on Variable Rate		5000.00%

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Borrowing Arrangements (Components Of Long-Term Debt) (Details) - USD ($) $ in Millions	Mar. 31, 2019	Sep. 30, 2018
Debt instrument	$ 451.9	$ 451.6
Deferred financing costs	6.2	6.6
Current portion of long-term debt	0.8	0.7
Long-term debt	444.9	444.3
Domestic Line of Credit [Member]
Debt instrument	0.0	0.0
Unsecured Debt [Member]
5.5% Senior Notes	450.0	450.0
Other [Member]
Debt instrument	$ 1.9	$ 1.6

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Derivative Financial Instruments (Details) - USD ($) $ in Millions	Mar. 31, 2019	Sep. 30, 2018
Foreign Exchange Contract [Member]
Derivative [Line Items]
Other noncurrent liabilities	$ 0.4	$ 0.9

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Retirement Plans (Narrative) (Details) $ in Millions	6 Months Ended
	Mar. 31, 2019 USD ($)
Decrease in accumulated other comprehensive loss net of tax	$ 1.9

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Retirement Plans (Net Periodic Benefit Cost) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2019	Mar. 31, 2018
Payment for Pension and Other Postretirement Benefits	$ 1.0
Defined Benefit Plan, Service Cost	0.4	$ 0.4	$ 0.8	$ 0.9
Defined Benefit Plan, Interest Cost	3.5	3.6	7.0	7.2
Defined Benefit Plan, Expected Return (Loss) on Plan Assets	(4.0)	(4.1)	(8.1)	(8.3)
Amortization of actuarial net loss	0.5	0.8	1.0	1.6
Curtailment/special settlement loss (gain)	1.0	0.0	1.0	0.0
Defined Benefit Plan, Net Periodic Benefit Cost other than Service Cost	1.0	0.3	0.9	0.5
Net periodic benefit cost	1.4	$ 0.7	1.7	$ 1.4
Multiemployer Plans, Withdrawal Obligation	$ 1.1		$ 1.1

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Stock-based Compensation Plans (Narrative) (Details) $ / shares in Units, $ in Millions	3 Months Ended		6 Months Ended
	Mar. 31, 2019 USD ($) $ / shares shares	Mar. 31, 2018 USD ($) shares	Mar. 31, 2019 USD ($) $ / shares shares	Mar. 31, 2018 USD ($) shares	Dec. 31, 2018 USD ($)
Allocated Share-based Compensation Expense | $	$ 1.0	$ 1.6	$ 2.7	$ 4.0
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized | $	$ 8.5		$ 8.5
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	202,245	289,860	1,077,983	278,697
Phantom Share Units (PSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instrument Other than Option, Nonvested, Intrinsic Value | $ / shares	$ 10.04		$ 10.04
Share-based compensation liability | $					$ 1.0
Performance Shares [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period			181,065	146,061
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period			332,875
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period			3 years
Share-based compensation, units awarded but not yet granted	279,024		279,024
Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period			115,298
Minimum [Member] | Performance Shares [Member]
Performance Factor			0
Maximum [Member] | Performance Shares [Member]
Performance Factor			2

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Stock-based Compensation Plans Grants Table (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended		6 Months Ended
	Mar. 31, 2019	Dec. 31, 2018	Mar. 31, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock Granted, Value, Share-based Compensation, Gross			$ 6.3
Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted, shares	76,919	147,409
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value	$ 9.35	$ 10.53
Stock Granted, Value, Share-based Compensation, Gross	$ 0.7	$ 1.6
Employee Stock Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted, shares	43,139
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value	$ 2.50
Stock Granted, Value, Share-based Compensation, Gross	$ 0.1
Employee Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted, shares		45,464
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value		$ 2.30
Stock Granted, Value, Share-based Compensation, Gross		$ 0.1
Phantom Share Units (PSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted, shares		168,380
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value		$ 10.53
Stock Granted, Value, Share-based Compensation, Gross		$ 1.8
Share-based Compensation Award, Tranche One [Member] | Performance Shares [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted, shares		110,595
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value		$ 10.53
Stock Granted, Value, Share-based Compensation, Gross		$ 1.2
Share-based Compensation Award, Tranche Two [Member] | Performance Shares [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted, shares		49,236
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value		$ 10.53
Stock Granted, Value, Share-based Compensation, Gross		$ 0.5
Share-based Compensation Award, Tranche Three [Member] | Performance Shares [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted, shares		31,229
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value		$ 10.53
Stock Granted, Value, Share-based Compensation, Gross		$ 0.3

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Supplemental Balance Sheet Information (Schedule Of Selected Supplemental Balance Sheet Information) (Details) - USD ($) $ in Millions	Mar. 31, 2019	Sep. 30, 2018	Mar. 31, 2018	Sep. 30, 2017
Accrued Liabilities, Current	$ 104.4	$ 76.4
Inventories:
Purchased components and raw material	97.7	81.6
Work in process	46.7	37.8
Finished goods	61.5	37.2
Inventories, net	205.9	156.6
Maintenance and repair tooling	3.9	3.5
Income taxes	8.7	1.6
Other	15.0	12.4
Other	27.6	17.5
Property, plant and equipment:
Land	5.4	5.4
Buildings	59.4	55.9
Machinery and equipment	330.8	311.4
Construction in progress	41.1	22.2
Property, plant and equipment, gross	436.7	394.9
Accumulated depreciation	(260.7)	(244.0)
Property, plant and equipment net	176.0	150.9
Other current liabilities:
Compensation and benefits	23.3	31.7
Customer rebates	4.5	9.7
Interest	7.9	8.0
Taxes other than income taxes	4.1	3.3
Warranty	7.9	6.0
Environmental	1.2	1.2
Income taxes	0.8	7.6
Restructuring	1.7	0.9	$ 3.0	$ 3.3
Walter accrual	37.9	0.0
Other Liabilities, Current	$ 15.1	$ 8.0

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Accumulated Other Comprehensive Loss (Schedule Of Accumulated Other Comprehensive Loss) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2019	Mar. 31, 2018	Sep. 30, 2018
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract]
Accumulated Other Comprehensive (Income) Loss, Defined Benefit Plan, after Tax			$ (26.5)
Accumulated Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Net of Tax			(6.3)
Accumulated Other Comprehensive Income (Loss), Net of Tax	$ (27.8)		(27.8)		$ (32.8)
Minimum pension liability, net of tax			1.9
Foreign currency translation	4.3	$ (0.4)	3.1	$ (0.3)
Other Comprehensive Income (Loss), Net of Tax			5.0
Accumulated Other Comprehensive (Income) Loss, Defined Benefit Plan, after Tax	(24.6)		(24.6)
Accumulated Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Net of Tax	(3.2)		(3.2)
Accumulated Other Comprehensive Income (Loss), Net of Tax	$ (27.8)		$ (27.8)

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Segment Information (Narrative) (Details)	6 Months Ended
	Mar. 31, 2019
Segment Reporting Information [Line Items]
Number of Reportable Segments	2,000,000

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Segment Information (Schedule Of Selected Supplemental Balance Sheet Information) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2019	Mar. 31, 2018	Sep. 30, 2018
Segment Reporting Information [Line Items]
Revenues	$ 234.0	$ 233.2	$ 426.8	$ 411.5
Operating income	22.2	29.9	38.1	50.6
Depreciation and amortization	13.4	10.9	25.5	21.5
Restructuring	6.9	1.9	10.1	5.8
Payments to Acquire Productive Assets	14.6	6.4	30.5	14.4
Total assets	1,280.2		1,280.2		$ 1,291.9
Intangible intangible assets, net	450.3		450.3		$ 408.1
Mueller Co. [Member]
Segment Reporting Information [Line Items]
Revenues	214.1	211.1	386.1	371.2
Operating income	40.1	44.9	71.0	73.0
Depreciation and amortization	11.4	9.4	21.5	18.5
Restructuring	1.1	0.1	1.1	0.1
Payments to Acquire Productive Assets	13.0	4.8	27.8	11.1
Mueller Co. [Member] | Central Region [Member]
Segment Reporting Information [Line Items]
Revenues	55.0	54.2	95.3	93.8
Mueller Co. [Member] | Northeast Region [Member] [Member]
Segment Reporting Information [Line Items]
Revenues	44.9	28.9	82.8	66.8
Mueller Co. [Member] | Southeast Region [Member]
Segment Reporting Information [Line Items]
Revenues	41.2	53.7	75.9	82.6
Mueller Co. [Member] | Western Region [Member]
Segment Reporting Information [Line Items]
Revenues	50.6	54.3	95.3	94.1
Mueller Co. [Member] | UNITED STATES
Segment Reporting Information [Line Items]
Revenues	191.7	191.1	349.3	337.3
Mueller Co. [Member] | CANADA
Segment Reporting Information [Line Items]
Revenues	15.2	16.9	25.1	27.5
Mueller Co. [Member] | Other International Locations [Member]
Segment Reporting Information [Line Items]
Revenues	7.2	3.1	11.7	6.4
Mueller Technologies [Member]
Segment Reporting Information [Line Items]
Revenues	19.9	22.1	40.7	40.3
Operating income	(3.6)	(3.9)	(7.3)	(8.6)
Depreciation and amortization	1.9	1.5	3.9	2.9
Restructuring	0.0	0.0	0.0	0.1
Payments to Acquire Productive Assets	1.6	1.5	2.7	3.0
Mueller Technologies [Member] | Central Region [Member]
Segment Reporting Information [Line Items]
Revenues	7.4	4.1	13.9	7.6
Mueller Technologies [Member] | Northeast Region [Member] [Member]
Segment Reporting Information [Line Items]
Revenues	3.4	5.4	6.8	9.4
Mueller Technologies [Member] | Southeast Region [Member]
Segment Reporting Information [Line Items]
Revenues	7.0	8.1	13.8	15.6
Mueller Technologies [Member] | Western Region [Member]
Segment Reporting Information [Line Items]
Revenues	1.5	3.4	4.2	5.3
Mueller Technologies [Member] | UNITED STATES
Segment Reporting Information [Line Items]
Revenues	19.3	21.0	38.7	37.9
Mueller Technologies [Member] | CANADA
Segment Reporting Information [Line Items]
Revenues	0.1	0.4	0.3	0.5
Mueller Technologies [Member] | Other International Locations [Member]
Segment Reporting Information [Line Items]
Revenues	0.5	0.7	1.7	1.9
Corporate [Member]
Segment Reporting Information [Line Items]
Operating income	(14.3)	(11.1)	(25.6)	(13.8)
Depreciation and amortization	0.1	0.0	0.1	0.1
Restructuring	5.8	1.8	9.0	5.6
Payments to Acquire Productive Assets	$ 0.0	$ 0.1	$ 0.0	$ 0.3

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Commitments and Contingencies (Details) $ in Millions, $ in Millions	3 Months Ended			12 Months Ended
	Mar. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2018 CAD ($)	Sep. 30, 2018 USD ($)	Sep. 30, 2017 USD ($)	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)
Loss Contingency, Damages Sought, Value			$ 10.0
Income Tax Examination, Estimate of Possible Loss		$ 37.4
Income Tax Examination, Penalties Accrued		37.4
Income Tax Examination, Interest Expense	$ 0.5
Taxes Payable		$ 7.0
Income Tax Examination, Penalties and Interest Expense	$ 31.0
IRS-Walter Energy Claim 1 [Member]
Loss Contingency, Estimate of Possible Loss							$ 554.3
IRS-Walter Energy Claim 1 Priority [Member]
Loss Contingency, Estimate of Possible Loss						$ 229.1
IRS-Walter Energy Claim 2 [Member]
Loss Contingency, Estimate of Possible Loss						860.4
IRS-Walter Energy Claim 2 Priority [Member]
Loss Contingency, Estimate of Possible Loss						$ 535.3
Product Concentration Risk [Member]
Operating Leases
Product Warranty Expense				$ 14.1	$ 9.8

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Subsequent Events (Details) - $ / shares				3 Months Ended		6 Months Ended
	May 20, 2019	May 10, 2019	Apr. 23, 2019	Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2019	Mar. 31, 2018
Subsequent Event [Line Items]
Dividends declared per share, in dollars per share				$ 0.05	$ 0.05	$ 0.10	$ 0.09
Subsequent Event [Member]
Subsequent Event [Line Items]
Dividends Payable, Date Declared			Apr. 23, 2019
Dividends declared per share, in dollars per share			$ 0.05
Dividends Payable, Date to be Paid	May 20, 2019
Dividends Payable, Date of Record		May 10, 2019

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Revenue from Contracts with Customers (Details) - USD ($)
$ in Millions

6 Months Ended

Mar. 31, 2019

Sep. 30, 2018

Revenue from External Customer [Line Items]

Revenue from Contract with Customer [Text Block]

    Revenue from Contracts with Customers

We recognize revenue, in an amount that reflects the consideration we expect to be entitled to in exchange for transferring those products or providing those services, when control of the promised products or services is transferred to our customers. We account for a contract when it has approval and commitment from both parties, the rights of the parties are identified, the payment terms are identified, the contract has commercial substance and collectability of consideration is probable. We determine the appropriate revenue recognition for our contracts with customers by analyzing the type, terms and conditions of each contract or arrangement with a customer.

Disaggregation of Revenue

We disaggregate our revenue from contracts with customers by reporting unit, which are the same as our reportable segments (Note 10), and further by geographical region as we believe this best depicts how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors. Geographical region represents the location of the customer.

Contract Asset and Liability Balances

The timing of revenue recognition, billings and cash collections results in customer receivables, advance payments and billings in excess of revenue recognized. Customer receivables includes amounts billed and currently due from customers as well as unbilled amounts (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. Customer receivables are recorded at face amounts less an allowance for doubtful accounts. We maintain an allowance for doubtful accounts for estimated losses as a result of customers’ inability to make required payments. We evaluate the aging of the customer receivable balances, the financial condition of our customers, historical trends and the time outstanding of specific balances to estimate the amount of customer receivables that may not be collected in the future and record the appropriate provision.

Advance payments and billings in excess of revenue are recognized and recorded as deferred revenue, the majority of which is classified as current based on the timing when we expect to recognize revenue. We include current deferred revenue as part of our accrued expenses. Deferred revenues represent contract liabilities and are recorded when customers remit contractual cash payments in advance of us satisfying performance obligations under contractual arrangements. Contract liabilities are reversed when the performance obligation is satisfied and revenue is recognized .

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

	March 31,		September 30,
	2019		2018
	(in millions)
Billed receivables	$	164.6	$	165.3
Unbilled receivables	5.5		2.4
Total customer receivables	$	170.1	$	167.7
Deferred revenue	$	4.0	$	3.3

Performance Obligations

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer. Our performance obligations are satisfied at a point in time as related to sales of equipment or over time as related to our software hosting and leak detection monitoring services. Performance obligations are supported by customer contracts, which provide frameworks for the nature of the distinct products or services. We allocate the transaction price of each contract to the performance obligations on the basis of standalone selling price and recognize revenue when, or as, control of the performance obligation transfers to the customers.

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

Revenue from products and services transferred to customers at a point in time represented 99% of our revenue in the first six months of fiscal year 2019. The revenue recognized at a point in time related to the sale of our products and was recognized when the obligations of the terms of our contract were satisfied, which generally occurs upon shipment, when control of the product transfers to the customer.

Revenue from products and services transferred to customers over time represented 1% of our revenue in the first six months of fiscal year 2019.

We offer warranties to our customers in the form of assurance-type warranties, which provide assurance that the related product provided will function as intended and comply with any agreed-upon specifications. These cannot be purchased separately. There is no change to our warranty accounting as a result of the implementation of the new revenue standard and we will continue to use our current cost accrual method in accordance with GAAP.

Costs to Obtain or Fulfill a Contract

We incur certain incremental costs to obtain a contract, which primarily relate to incremental sales commissions. Our commissions are paid based on shipment rather than on order and we reserve the right to claw back any commissions in case of product returns or lost collections. As the expected benefit associated with these incremental costs is one year or less based on the nature of the product sold and benefits received, we have applied a practical expedient and therefore will not capitalize the related costs and will continue to expense them as incurred, consistent with our previous accounting treatment.

Billed Contracts Receivable

$ 164.6

$ 165.3

Deferred Revenue

4.0

3.3

Unbilled receivables

5.5

2.4

Total customer receivables

$ 170.1

$ 167.7

Transferred at Point in Time [Member]

Revenue from External Customer [Line Items]

Percent of Revenue by Recognition Timing

99.00%

Transferred over Time [Member]

Revenue from External Customer [Line Items]

Percent of Revenue by Recognition Timing

1.00%