XML 89 R11.htm IDEA: XBRL DOCUMENT
v2.4.0.8

Income Taxes | 12 Months Ended
--- | ---
Sep. 30, 2014
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The components of income (loss) before income taxes are presented below.
| 2014 |  | 2013 |  | 2012
| (in millions)
U.S. | $ | 71.6 |  |  | $ | 41.0 |  |  | $ | (0.1 | )
Non-U.S. | 1.9 |  |  | 3.2 |  |  | 2.8 |
Income before income taxes | $ | 73.5 |  |  | $ | 44.2 |  |  | $ | 2.7 |
The cumulative amount of undistributed earnings of foreign subsidiaries for which United States income taxes have not been provided was $58.1 million at September 30, 2014. It is not currently practical to estimate the amount of unrecognized United States income taxes that might be payable on the repatriation of these earnings. Income tax expense (benefit) from continuing operations is presented below.
| 2014 |  | 2013 |  | 2012
| (in millions)
Current: |  |  |  |  |
U.S. federal | $ | 0.1 |  |  | $ | 0.6 |  |  | $ | 0.2 |
U.S. state and local | 1.6 |  |  | 0.1 |  |  | (1.0 | )
Non-U.S. | 0.7 |  |  | 0.8 |  |  | 1.1 |
| 2.4 |  |  | 1.5 |  |  | 0.3 |
Deferred: |  |  |  |  |
U.S. federal | 28.7 |  |  | 6.2 |  |  | (0.6 | )
U.S. state and local | (12.8 | ) |  | 1.3 |  |  | 9.0 |
Non-U.S. | (0.3 | ) |  | (0.2 | ) |  | (0.8 | )
| 15.6 |  |  | 7.3 |  |  | 7.6 |
Income tax expense | $ | 18.0 |  |  | $ | 8.8 |  |  | $ | 7.9 |
The allocations of current income tax expense (benefit) between continuing and discontinued operations are provided below.
| 2014 |  | 2013 |  | 2012
| Continuing operations |  | Continuing operations |  | Discontinued operations |  | Continuing operations |  | Discontinued operations
| (in millions) |  |  |  |  |  |  |  |
Expense from operations | $ | 30.1 |  |  | $ | 17.5 |  |  | $ | 2.1 |  |  | $ | 1.4 |  |  | $ | (48.7 | )
Valuation allowance-related benefit | (9.6 | ) |  | (8.5 | ) |  | (2.1 | ) |  | 6.5 |  |  | 26.7 |
Other items | (2.5 | ) |  | (0.2 | ) |  | — |  |  | — |  |  | 0.1 |
Income tax expense | $ | 18.0 |  |  | $ | 8.8 |  |  | $ | — |  |  | $ | 7.9 |  |  | $ | (21.9 | )
The reconciliation between income tax expense at the U.S. federal statutory income tax rate and reported income tax expense from continuing operations is presented below.
| 2014 |  | 2013 |  | 2012
| (in millions)
Expense at U.S. federal statutory income tax rate of 35% | $ | 25.7 |  |  | $ | 15.5 |  |  | $ | 0.9 |
Adjustments to reconcile to income tax expense: |  |  |  |  |
Federal valuation allowance | (1.2 | ) |  | (7.8 | ) |  | — |
State income taxes, net of federal benefit | 3.6 |  |  | 2.0 |  |  | (0.8 | )
State tax rate change | (2.5 | ) |  | — |  |  | — |
State valuation allowance, net of federal benefit | (8.4 | ) |  | (1.1 | ) |  | 5.9 |
Tax credits | (0.1 | ) |  | (0.6 | ) |  | (0.1 | )
Nondeductible expenses, other than compensation | 0.9 |  |  | 0.5 |  |  | 0.7 |
Foreign income taxes | (0.2 | ) |  | 0.4 |  |  | (0.3 | )
Nondeductible compensation | 0.8 |  |  | 0.2 |  |  | 1.4 |
Other | (0.6 | ) |  | (0.3 | ) |  | 0.2 |
Income tax expense | $ | 18.0 |  |  | $ | 8.8 |  |  | $ | 7.9 |
Deferred income tax balances are presented below.
| September 30,
| 2014 |  | 2013
| (in millions)
Deferred income tax assets: |  |  |
Inventory reserves | $ | 15.2 |  |  | $ | 17.2 |
Accrued expenses | 15.3 |  |  | 17.2 |
Pension and other postretirement benefits | 20.3 |  |  | 2.4 |
Stock-based compensation | 10.7 |  |  | 9.1 |
State net operating losses | 10.3 |  |  | 13.4 |
Federal net operating losses and credit carryovers | 6.8 |  |  | 37.4 |
Other | 1.9 |  |  | 1.6 |
| 80.5 |  |  | 98.3 |
Valuation allowance | (0.7 | ) |  | (10.3 | )
Total deferred income tax assets, net of valuation allowance | 79.8 |  |  | 88.0 |
Deferred income tax liabilities: |  |  |
Intangible assets | 190.1 |  |  | 199.8 |
Other | 1.5 |  |  | 3.0 |
Total deferred income tax liabilities | 191.6 |  |  | 202.8 |
Net deferred income tax liabilities | $ | 111.8 |  |  | $ | 114.8 |
We reevaluate the need for a valuation allowance against the U.S. deferred tax assets each quarter, considering results to date, projections of taxable income, tax planning strategies and reversing taxable temporary differences. After inclusion of the tax effect of the loss on the sale of U.S. Pipe in 2012, our net reversing deferred tax credits were insufficient to fully support our deferred tax assets, which include net operating loss carryforwards, and we concluded that a valuation allowance was necessary to reduce our U.S. net reversing deferred tax assets to zero. Accordingly, we recorded income tax expense in 2012 to establish valuation allowances related to deferred tax assets. We allocated a portion of the valuation allowance charge relating to these deferred tax assets at September 30, 2011 to continuing operations, with the remaining valuation allowances charged against minimum pension liability in accumulated other comprehensive loss and to discontinued operations. In the 2014 fourth quarter, we credited to income almost all of the deferred tax valuation allowance based on our expectation of future taxable income. The allocations of the valuation allowance charge among continuing operations, discontinued operations, and accumulated other comprehensive loss are presented below.
| 2014 |  | 2013
| (in millions)
Balance at beginning of year | $ | 10.3 |  |  | $ | 49.2 |
Decrease allocated to continuing operations | (9.6 | ) |  | (8.5 | )
Decrease allocated to discontinued operations | — |  |  | (2.1 | )
Decrease allocated to accumulated other comprehensive loss | — |  |  | (27.8 | )
Expired items | — |  |  | (0.5 | )
Balance at end of year | $ | 0.7 |  |  | $ | 10.3 |
Notwithstanding the valuation allowance, our federal and state net operating loss carryforwards remain available to offset future taxable earnings. Our state net operating losses expire between 2015 and 2033. Our federal net operating losses expire between 2031 and 2032. The following table summarizes information concerning our gross unrecognized tax benefits.
| 2014 |  | 2013
| (in millions)
Balance at beginning of year | $ | 3.7 |  |  | $ | 4.3 |
Increases related to prior year positions | — |  |  | 0.5 |
Decreases due to lapse in statute of limitations | (1.0 | ) |  | (1.1 | )
Balance at end of year | $ | 2.7 |  |  | $ | 3.7 |
Substantially all unrecognized tax benefits would, if recognized, impact the effective tax rate. We recognize interest related to uncertain tax positions as interest expense and recognize any penalties incurred as a component of selling, general and administrative expenses. At September 30, 2014 and 2013, we had $0.7 million and $0.9 million, respectively, of accrued interest expense related to unrecognized tax benefits. We expect to settle certain state income tax audits within the next 12 months and believe it is reasonably possible that these audit settlements will reduce the gross unrecognized tax benefits by $0.8 million. The federal income tax returns for Mueller Co. and Anvil are closed for years prior to 2005 and for Mueller Water Products, Inc. for 2007 and 2008. Our 2009 return is closed except to the extent net operating losses from that year are utilized in later years. U.S. Pipe is subject to statute extension agreements that may be applicable to Walter Energy, and we remain liable for any tax related to U.S. Pipe pursuant to the terms of our sale of that segment. See Note 16. During 2012, the IRS completed its audit of our income tax returns filed for 2010, 2009, 2008 and 2007. The IRS audit resulted in zero additional tax liability. Our state income tax returns are generally closed for years prior to 2007, except to the extent of our state net operating loss carryforwards. Our Canadian income tax returns are generally closed for years prior to 2007. We are currently under audit by several states at various levels of completion. We do not have any material unpaid assessments.

X
- Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration