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<br /> 2012 ANNUAL REPORT<br /> Overview<br /> Mueller Water Products, Inc. (NYSE:MWA) is a leading manufacturer and marketer of products and services used in the<br /> transmission, distribution and measurement of water. Our broad product portfolio includes engineered valves, fire hydrants,<br /> metering products and systems, leak detection and pipe condition assessment. We help municipalities increase operational<br /> efficiencies, improve customer service and prioritize capital spending, demonstrating why Mueller Water Products is Where<br /> Intelligence Meets Infrastructure™. The piping component systems produced by Anvil help build connections that last in<br /> commercial, industrial, mechanical, fire protection and oil & gas applications. Visit us at www.muellerwaterproducts.com.<br /> Complete Water Transmission Solutions<br /> Drinking<br /> Water Treatment Plant Gate and<br /> Water<br /> <a title="MWA-20121220-AR-DS.pdf page 1" href="http://viewer.zmags.com/publication/8c7e86eb?page=1"> 2012 ANNUAL REPORT</a> <a title="MWA-20121220-AR-DS.pdf page 2" href="http://viewer.zmags.com/publication/8c7e86eb?page=2"> Overview Mueller Water Products, Inc. (NYSE:MWA) </a> <a title="MWA-20121220-AR-DS.pdf page 3" href="http://viewer.zmags.com/publication/8c7e86eb?page=3"> LETTER FROM GREG HYLAND DECEMBER 17, 2012 TO MY F</a> <a title="MWA-20121220-AR-DS.pdf page 4" href="http://viewer.zmags.com/publication/8c7e86eb?page=4"> We continue to invest in new products and service</a> <a title="MWA-20121220-AR-DS.pdf page 5" href="http://viewer.zmags.com/publication/8c7e86eb?page=5"> UNITED STATES SEC</a> <a title="MWA-20121220-AR-DS.pdf page 6" href="http://viewer.zmags.com/publication/8c7e86eb?page=6"> Introductory Note In this Annual Rep</a> <a title="MWA-20121220-AR-DS.pdf page 7" href="http://viewer.zmags.com/publication/8c7e86eb?page=7"> TABLE OF CONTENTS Page PART I Item 1. BUSI</a> <a title="MWA-20121220-AR-DS.pdf page 8" href="http://viewer.zmags.com/publication/8c7e86eb?page=8"> [This Page Intentionally Left Blank]</a> <a title="MWA-20121220-AR-DS.pdf page 9" href="http://viewer.zmags.com/publication/8c7e86eb?page=9"> PART I Item 1. BUSINESS Our Compan</a> <a title="MWA-20121220-AR-DS.pdf page 10" href="http://viewer.zmags.com/publication/8c7e86eb?page=10"> Major products and selected brand names </a> <a title="MWA-20121220-AR-DS.pdf page 11" href="http://viewer.zmags.com/publication/8c7e86eb?page=11"> Our principal executive offices are loc</a> <a title="MWA-20121220-AR-DS.pdf page 12" href="http://viewer.zmags.com/publication/8c7e86eb?page=12"> We also produce small valves, meter bars </a> <a title="MWA-20121220-AR-DS.pdf page 13" href="http://viewer.zmags.com/publication/8c7e86eb?page=13"> · Malleable Iron Fittings and Unions. Malleabl</a> <a title="MWA-20121220-AR-DS.pdf page 14" href="http://viewer.zmags.com/publication/8c7e86eb?page=14"> business. See “Item 1A. RISK FACTORS-Our business</a> <a title="MWA-20121220-AR-DS.pdf page 15" href="http://viewer.zmags.com/publication/8c7e86eb?page=15"> Research and Development Our primary re</a> <a title="MWA-20121220-AR-DS.pdf page 16" href="http://viewer.zmags.com/publication/8c7e86eb?page=16"> Regulatory Matters The production and ma</a> <a title="MWA-20121220-AR-DS.pdf page 17" href="http://viewer.zmags.com/publication/8c7e86eb?page=17"> Poor economic conditions may cause states</a> <a title="MWA-20121220-AR-DS.pdf page 18" href="http://viewer.zmags.com/publication/8c7e86eb?page=18"> · entering into new markets in which we have l</a> <a title="MWA-20121220-AR-DS.pdf page 19" href="http://viewer.zmags.com/publication/8c7e86eb?page=19"> Normal operations at our key manufacturing facili</a> <a title="MWA-20121220-AR-DS.pdf page 20" href="http://viewer.zmags.com/publication/8c7e86eb?page=20"> If we do not successfully maintain and/or</a> <a title="MWA-20121220-AR-DS.pdf page 21" href="http://viewer.zmags.com/publication/8c7e86eb?page=21"> sustained, our overall liquidity could be materia</a> <a title="MWA-20121220-AR-DS.pdf page 22" href="http://viewer.zmags.com/publication/8c7e86eb?page=22"> The potential impacts of climate change</a> <a title="MWA-20121220-AR-DS.pdf page 23" href="http://viewer.zmags.com/publication/8c7e86eb?page=23"> findings to relevant governmental authorities. No</a> <a title="MWA-20121220-AR-DS.pdf page 24" href="http://viewer.zmags.com/publication/8c7e86eb?page=24"> amended, we generally will be responsible for any</a> <a title="MWA-20121220-AR-DS.pdf page 25" href="http://viewer.zmags.com/publication/8c7e86eb?page=25"> Item 3. LEGAL PROCEEDINGS W</a> <a title="MWA-20121220-AR-DS.pdf page 26" href="http://viewer.zmags.com/publication/8c7e86eb?page=26"> PART II Item 5. MARKET FOR REGISTRA</a> <a title="MWA-20121220-AR-DS.pdf page 27" href="http://viewer.zmags.com/publication/8c7e86eb?page=27"> Stock Price Performance Graph The follow</a> <a title="MWA-20121220-AR-DS.pdf page 28" href="http://viewer.zmags.com/publication/8c7e86eb?page=28"> Item 6. SELECTED FINANCIAL DATA </a> <a title="MWA-20121220-AR-DS.pdf page 29" href="http://viewer.zmags.com/publication/8c7e86eb?page=29"> Item 7. MANAGEMENT'S DISCUSSION AND </a> <a title="MWA-20121220-AR-DS.pdf page 30" href="http://viewer.zmags.com/publication/8c7e86eb?page=30"> There continues to be growing concerns ab</a> <a title="MWA-20121220-AR-DS.pdf page 31" href="http://viewer.zmags.com/publication/8c7e86eb?page=31"> Consolidated Analysis Net sales for 2012</a> <a title="MWA-20121220-AR-DS.pdf page 32" href="http://viewer.zmags.com/publication/8c7e86eb?page=32"> Excluding restructuring charges, operatin</a> <a title="MWA-20121220-AR-DS.pdf page 33" href="http://viewer.zmags.com/publication/8c7e86eb?page=33"> million of higher sales pricing. Gross margin was</a> <a title="MWA-20121220-AR-DS.pdf page 34" href="http://viewer.zmags.com/publication/8c7e86eb?page=34"> Gross profit in 2011 increased to $101.1 </a> <a title="MWA-20121220-AR-DS.pdf page 35" href="http://viewer.zmags.com/publication/8c7e86eb?page=35"> Liquidity and Capital Resources We had</a> <a title="MWA-20121220-AR-DS.pdf page 36" href="http://viewer.zmags.com/publication/8c7e86eb?page=36"> The ABL Agreement is subject to mand</a> <a title="MWA-20121220-AR-DS.pdf page 37" href="http://viewer.zmags.com/publication/8c7e86eb?page=37"> Market Risk” or synthetic leases. Therefore, we a</a> <a title="MWA-20121220-AR-DS.pdf page 38" href="http://viewer.zmags.com/publication/8c7e86eb?page=38"> Revenue Recognition We recognize revenue</a> <a title="MWA-20121220-AR-DS.pdf page 39" href="http://viewer.zmags.com/publication/8c7e86eb?page=39"> estimate of probability-weighted undiscounted fut</a> <a title="MWA-20121220-AR-DS.pdf page 40" href="http://viewer.zmags.com/publication/8c7e86eb?page=40"> currencies. Net sales and expenses of non-U.S. su</a> <a title="MWA-20121220-AR-DS.pdf page 41" href="http://viewer.zmags.com/publication/8c7e86eb?page=41"> Changes in Internal Control over Financial Report</a> <a title="MWA-20121220-AR-DS.pdf page 42" href="http://viewer.zmags.com/publication/8c7e86eb?page=42"> PART III Item 10. DIRECTORS, EXECUTIV</a> <a title="MWA-20121220-AR-DS.pdf page 43" href="http://viewer.zmags.com/publication/8c7e86eb?page=43"> 2002 to 2006. Mr. Hart earned a Bachelor of Scien</a> <a title="MWA-20121220-AR-DS.pdf page 44" href="http://viewer.zmags.com/publication/8c7e86eb?page=44"> Joseph B. Leonard has been a member of </a> <a title="MWA-20121220-AR-DS.pdf page 45" href="http://viewer.zmags.com/publication/8c7e86eb?page=45"> We have adopted a written code of conduct</a> <a title="MWA-20121220-AR-DS.pdf page 46" href="http://viewer.zmags.com/publication/8c7e86eb?page=46"> Item 13. CERTAIN RELATIONSHIPS AND REL</a> <a title="MWA-20121220-AR-DS.pdf page 47" href="http://viewer.zmags.com/publication/8c7e86eb?page=47"> Exhibit no. </a> <a title="MWA-20121220-AR-DS.pdf page 48" href="http://viewer.zmags.com/publication/8c7e86eb?page=48"> Exhibit no. </a> <a title="MWA-20121220-AR-DS.pdf page 49" href="http://viewer.zmags.com/publication/8c7e86eb?page=49"> Exhibit no. </a> <a title="MWA-20121220-AR-DS.pdf page 50" href="http://viewer.zmags.com/publication/8c7e86eb?page=50"> SIGNATURES Pursuant to the require</a> <a title="MWA-20121220-AR-DS.pdf page 51" href="http://viewer.zmags.com/publication/8c7e86eb?page=51"> Report of Independent Registered Public Accountin</a> <a title="MWA-20121220-AR-DS.pdf page 52" href="http://viewer.zmags.com/publication/8c7e86eb?page=52"> Report of Independent Registered Public Accountin</a> <a title="MWA-20121220-AR-DS.pdf page 53" href="http://viewer.zmags.com/publication/8c7e86eb?page=53"> MUELLER WATER PRODUCTS, INC. AND SUBSIDIARIES </a> <a title="MWA-20121220-AR-DS.pdf page 54" href="http://viewer.zmags.com/publication/8c7e86eb?page=54"> </a> <a title="MWA-20121220-AR-DS.pdf page 55" href="http://viewer.zmags.com/publication/8c7e86eb?page=55"> MUELLER WATER PRODUCTS, INC. AND SUBSIDIA</a> <a title="MWA-20121220-AR-DS.pdf page 56" href="http://viewer.zmags.com/publication/8c7e86eb?page=56"> MUELLER WATER PRODUCTS, INC. AND SUBSIDIARIES </a> <a title="MWA-20121220-AR-DS.pdf page 57" href="http://viewer.zmags.com/publication/8c7e86eb?page=57"> MUELLER WATER PRODUCTS, INC. AND SUBSIDIARIES N</a> <a title="MWA-20121220-AR-DS.pdf page 58" href="http://viewer.zmags.com/publication/8c7e86eb?page=58"> The following table summarizes information concer</a> <a title="MWA-20121220-AR-DS.pdf page 59" href="http://viewer.zmags.com/publication/8c7e86eb?page=59"> Workers Compensation-Our exposure to work</a> <a title="MWA-20121220-AR-DS.pdf page 60" href="http://viewer.zmags.com/publication/8c7e86eb?page=60"> component of accumulated other comprehensive loss</a> <a title="MWA-20121220-AR-DS.pdf page 61" href="http://viewer.zmags.com/publication/8c7e86eb?page=61"> The change in the carrying amount of goodwill in </a> <a title="MWA-20121220-AR-DS.pdf page 62" href="http://viewer.zmags.com/publication/8c7e86eb?page=62"> The table below represents a summary of t</a> <a title="MWA-20121220-AR-DS.pdf page 63" href="http://viewer.zmags.com/publication/8c7e86eb?page=63"> Income tax expense (benefit) is presented below. </a> <a title="MWA-20121220-AR-DS.pdf page 64" href="http://viewer.zmags.com/publication/8c7e86eb?page=64"> Deferred income tax assets (liabilities) are pres</a> <a title="MWA-20121220-AR-DS.pdf page 65" href="http://viewer.zmags.com/publication/8c7e86eb?page=65"> The components of income tax expense (benefit) fo</a> <a title="MWA-20121220-AR-DS.pdf page 66" href="http://viewer.zmags.com/publication/8c7e86eb?page=66"> deferred tax assets to zero. Accordingly, we reco</a> <a title="MWA-20121220-AR-DS.pdf page 67" href="http://viewer.zmags.com/publication/8c7e86eb?page=67"> $60 million of letters of credit outstanding. We </a> <a title="MWA-20121220-AR-DS.pdf page 68" href="http://viewer.zmags.com/publication/8c7e86eb?page=68"> interest rate or foreign currency contracts have </a> <a title="MWA-20121220-AR-DS.pdf page 69" href="http://viewer.zmags.com/publication/8c7e86eb?page=69"> Note 10. Retirement Plans We</a> <a title="MWA-20121220-AR-DS.pdf page 70" href="http://viewer.zmags.com/publication/8c7e86eb?page=70"> The components of net periodic benefit cost (gain</a> <a title="MWA-20121220-AR-DS.pdf page 71" href="http://viewer.zmags.com/publication/8c7e86eb?page=71"> Pension and other postretirement benefits</a> <a title="MWA-20121220-AR-DS.pdf page 72" href="http://viewer.zmags.com/publication/8c7e86eb?page=72"> A summary of key assumptions for our pension and </a> <a title="MWA-20121220-AR-DS.pdf page 73" href="http://viewer.zmags.com/publication/8c7e86eb?page=73"> We maintain a single trust to hold the as</a> <a title="MWA-20121220-AR-DS.pdf page 74" href="http://viewer.zmags.com/publication/8c7e86eb?page=74"> September 30, 2011 Level 1 Level 2 </a> <a title="MWA-20121220-AR-DS.pdf page 75" href="http://viewer.zmags.com/publication/8c7e86eb?page=75"> Note 12. Stock-based Compensation Plan</a> <a title="MWA-20121220-AR-DS.pdf page 76" href="http://viewer.zmags.com/publication/8c7e86eb?page=76"> Restricted stock unit activity under the 2006 Pla</a> <a title="MWA-20121220-AR-DS.pdf page 77" href="http://viewer.zmags.com/publication/8c7e86eb?page=77"> Under the ESPP, employees purchased 339,2</a> <a title="MWA-20121220-AR-DS.pdf page 78" href="http://viewer.zmags.com/publication/8c7e86eb?page=78"> Note 13. Supplemental Balance Sheet In</a> <a title="MWA-20121220-AR-DS.pdf page 79" href="http://viewer.zmags.com/publication/8c7e86eb?page=79"> Note 14. Supplemental Statement of Ope</a> <a title="MWA-20121220-AR-DS.pdf page 80" href="http://viewer.zmags.com/publication/8c7e86eb?page=80"> metering, leak detection, pipe condition assessme</a> <a title="MWA-20121220-AR-DS.pdf page 81" href="http://viewer.zmags.com/publication/8c7e86eb?page=81"> Summarized financial information for our segments</a> <a title="MWA-20121220-AR-DS.pdf page 82" href="http://viewer.zmags.com/publication/8c7e86eb?page=82"> with respect to businesses or sites acquired afte</a> <a title="MWA-20121220-AR-DS.pdf page 83" href="http://viewer.zmags.com/publication/8c7e86eb?page=83"> or its shareholders if such taxes result from cer</a> <a title="MWA-20121220-AR-DS.pdf page 84" href="http://viewer.zmags.com/publication/8c7e86eb?page=84"> Note 20. Quarterly Consolidated Financ</a> <a title="MWA-20121220-AR-DS.pdf page 85" href="http://viewer.zmags.com/publication/8c7e86eb?page=85"> Note 21. Consolidating Guarantor and N</a> <a title="MWA-20121220-AR-DS.pdf page 86" href="http://viewer.zmags.com/publication/8c7e86eb?page=86"> Mueller Water Products, Inc. and Subsidiaries </a> <a title="MWA-20121220-AR-DS.pdf page 87" href="http://viewer.zmags.com/publication/8c7e86eb?page=87"> Mueller Water Products, Inc. and Subsidiaries </a> <a title="MWA-20121220-AR-DS.pdf page 88" href="http://viewer.zmags.com/publication/8c7e86eb?page=88"> Mueller Water Pro</a> <a title="MWA-20121220-AR-DS.pdf page 89" href="http://viewer.zmags.com/publication/8c7e86eb?page=89"> Mueller Water Pro</a> <a title="MWA-20121220-AR-DS.pdf page 90" href="http://viewer.zmags.com/publication/8c7e86eb?page=90"> Mueller Water Pro</a> <a title="MWA-20121220-AR-DS.pdf page 91" href="http://viewer.zmags.com/publication/8c7e86eb?page=91"> Mueller Water Products, Inc. and Subsidiaries </a> <a title="MWA-20121220-AR-DS.pdf page 92" href="http://viewer.zmags.com/publication/8c7e86eb?page=92"> Mueller Water Products, Inc. and Subsidiaries </a> <a title="MWA-20121220-AR-DS.pdf page 93" href="http://viewer.zmags.com/publication/8c7e86eb?page=93"> Mueller Water Products, Inc. and Subsidiaries </a> <a title="MWA-20121220-AR-DS.pdf page 94" href="http://viewer.zmags.com/publication/8c7e86eb?page=94"> Note 22. Corrections to Previously Rep</a> <a title="MWA-20121220-AR-DS.pdf page 95" href="http://viewer.zmags.com/publication/8c7e86eb?page=95"> These errors also affect the presentation</a> <a title="MWA-20121220-AR-DS.pdf page 96" href="http://viewer.zmags.com/publication/8c7e86eb?page=96"> Exhibit 12.1 COMPUTATION OF RATIO OF EARNINGS T</a> <a title="MWA-20121220-AR-DS.pdf page 97" href="http://viewer.zmags.com/publication/8c7e86eb?page=97"> Exhibit 21.1 S</a> <a title="MWA-20121220-AR-DS.pdf page 98" href="http://viewer.zmags.com/publication/8c7e86eb?page=98"> Exhibit 23.1 CONSENT OF INDEPENDENT REGISTERED </a> <a title="MWA-20121220-AR-DS.pdf page 99" href="http://viewer.zmags.com/publication/8c7e86eb?page=99"> Exhibit 31.1 CERTIFICATION PURSUANT TO SECTION 3</a> <a title="MWA-20121220-AR-DS.pdf page 100" href="http://viewer.zmags.com/publication/8c7e86eb?page=100"> Exhibit 31.2 CERTIFICATION PURSUANT TO SECTION 3</a> <a title="MWA-20121220-AR-DS.pdf page 101" href="http://viewer.zmags.com/publication/8c7e86eb?page=101"> Exhibit 32.1 CERTIFICATION PURSUANT TO SECTION 9</a> <a title="MWA-20121220-AR-DS.pdf page 102" href="http://viewer.zmags.com/publication/8c7e86eb?page=102"> Exhibit 32.2 CERTIFICATION PURSUANT TO SECTION 9</a> <a title="MWA-20121220-AR-DS.pdf page 103" href="http://viewer.zmags.com/publication/8c7e86eb?page=103"> Board of Directors Gregory E. Hyland Chairman,</a> <a title="MWA-20121220-AR-DS.pdf page 104" href="http://viewer.zmags.com/publication/8c7e86eb?page=104"> A DIVISION OF MUELLER CO. </a>