Segment Information

12 Months Ended

Sep. 30, 2017

Segment Reporting Disclosure [Text Block]

Segment Information

Our operations consist of two business segments: Infrastructure (previously referred to as “Mueller Co.”) and Technologies (previously referred to as “Mueller Technologies”). These segments are organized primarily based on products sold and customers served and are consistent with how the segments are managed, how resources are allocated and how information is used by the chief operating decision maker. Infrastructure manufactures valves for water and gas systems including butterfly, iron gate, tapping, check, knife, plug, automatic control and ball valves and dry-barrel and wet-barrel fire hydrants. Technologies offers metering, leak detection, pipe condition assessment and other products and services for the water infrastructure industry.

Segment results are not reflective of their results on a stand-alone basis. Intersegment sales and transfers are made at selling prices generally intended to cover costs. Infrastructure personnel provide certain administrative services, including management of accounts payable and accounts receivable, without any allocation of cost to Technologies. We do not believe the costs of such administrative services are material to the segments’ results. The determination of segment results excludes certain corporate expenses designated as Corporate because they are not directly attributable to segment operations. Interest expense, loss on early extinguishment of debt and income taxes are not allocated to the segments. Corporate expenses include those costs incurred by our corporate function, such as accounting, treasury, risk management, human resources, legal, tax and other administrative functions and also costs associated with assets and liabilities retained following the sales of U.S. Pipe and Anvil. Corporate assets principally consist of our cash, Anvil assets held for sale at September 30, 2017 and certain real property previously owned by U.S. Pipe and Anvil. Business segment assets consist primarily of receivables, inventories, property, plant and equipment, intangible assets and other noncurrent assets.

Geographical area information is presented below.



	United States		Canada		Other		Total
	(in millions)
Net sales:
2018	$	812.2	$	71.7	$	32.1	$	916.0
2017	732.0		62.3		31.7		826.0
2016	716.5		57.1		27.0		800.6
Property, plant and equipment, net:
September 30, 2018	$	144.8	$	3.4	$	2.7	$	150.9
September 30, 2017	116.1		3.0		3.2		122.3

Approximately 54% of our 2018 gross sales were to our 10 largest customers, and approximately 34% of our 2018 gross sales were to our two largest customers, Ferguson Enterprises, Inc. (“Ferguson Enterprises”) and Core & Main LP. (“Core & Main)”). Sales to Ferguson Enterprises comprised approximately 19%, 18% and 17% of our total gross sales during 2018, 2017 and 2016, respectively. In 2018, Ferguson Enterprises accounted for approximately 18% and 28% of gross sales for Infrastructure and Technologies, respectively. Receivables from Ferguson Enterprises totaled $29.7 million and $20.0 million at September 30, 2018 and 2017, respectively. Sales to Core & Main comprised approximately 15%, 16% and 16% of our total gross sales during 2018, 2017, and 2016, respectively. In 2018, Core & Main accounted for approximately 17% of gross sales for Infrastructure. Receivables from Core & Main totaled $31.7 million and $27.3 million at September 30, 2018 and 2017, respectively.

Summarized financial information for our segments is presented below.



	Infrastructure		Technologies			Corporate			Total
	(in millions)
Net sales, excluding intercompany:
2018	$	818.8	$	97.2		$	—		$	916.0
2017	739.9		86.1			—			826.0
2016	715.7		84.9			—			800.6
Intercompany sales:
2018	$	—	$	—		$	—		$	—
2017	—		—			—			—
2016	5.8		—			—			5.8
Operating income (loss):
2018	$	180.1	$	(24.4	)	$	(34.0	)	$	121.7
2017	163.8		(20.3		)	(41.4		)	102.1
2016	162.5		(11.1		)	(39.2		)	112.2
Depreciation and amortization:
2018	$	37.4	$	6.1		$	0.2		$	43.7
2017	36.3		5.2			0.4			41.9
2016	34.2		4.8			0.5			39.5
Total pension settlement and other charges:
2018	$	0.1	$	0.1		$	10.3		$	10.5
2017	2.7		0.7			7.0			10.4
2016	1.0		0.9			5.8			7.7
Capital expenditures:
2018	$	47.3	$	8.3		$	0.1		$	55.7
2017	28.5		11.4			0.7			40.6
2016	24.3		7.0			0.2			31.5
Total assets:
September 30, 2018	$	843.9	$	87.1		$	360.9		$	1,291.9
September 30, 2017	792.6		88.4			377.3			1,258.3
Intangible assets, net:
September 30, 2018	$	396.9	$	23.3		$	—		$	420.2
September 30, 2017	417.2		22.1			—			439.3