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What changed in MUELLER INDUSTRIES INC's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of MUELLER INDUSTRIES INC's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+297 added−300 removedSource: 10-K (2024-02-28) vs 10-K (2023-02-28)

Top changes in MUELLER INDUSTRIES INC's 2023 10-K

297 paragraphs added · 300 removed · 243 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

229 edited+53 added−55 removed228 unchanged
Biggest changeThe following tables represent a disaggregation of revenue from contracts with customers, along with the reportable segment for each category: F-33 For the Year Ended December 31, 2022 (In thousands) Piping Systems Industrial Metals Climate Total Tube and fittings $ 2,211,963 $ — $ — $ 2,211,963 Brass rod and forgings — 510,865 — 510,865 OEM components and valves — 74,647 121,004 195,651 Valves and plumbing specialties 518,121 — — 518,121 Flex duct and other HVAC components — — 529,303 529,303 Other — 59,177 — 59,177 $ 2,730,084 $ 644,689 $ 650,307 $ 4,025,080 Intersegment sales (42,625) Net sales $ 3,982,455 For the Year Ended December 25, 2021 (In thousands) Piping Systems Industrial Metals Climate Total Tube and fittings $ 2,055,639 $ — $ — $ 2,055,639 Brass rod and forgings — 565,870 — 565,870 OEM components, tube & assemblies 32,557 48,572 137,564 218,693 Valves and plumbing specialties 511,834 — — 511,834 Flex duct and other HVAC components — — 357,850 357,850 Other — 88,921 — 88,921 $ 2,600,030 $ 703,363 $ 495,414 $ 3,798,807 Intersegment sales (29,462) Net sales $ 3,769,345 F-34 Disaggregation of revenue from contracts with customers (continued): For the Year Ended December 26, 2020 (In thousands) Piping Systems Industrial Metals Climate Total Tube and fittings $ 1,232,724 $ — $ — $ 1,232,724 Brass rod and forgings — 356,547 — 356,547 OEM components, tube & assemblies 56,176 42,127 138,551 236,854 Valves and plumbing specialties 294,102 — — 294,102 Flex duct and other HVAC components — — 231,580 231,580 Other — 73,485 — 73,485 $ 1,583,002 $ 472,159 $ 370,131 $ 2,425,292 Intersegment sales (27,249) Net sales $ 2,398,043 Summarized segment information is as follows: For the Year Ended December 31, 2022 (In thousands) Piping Systems Industrial Metals Climate Corporate and Eliminations Total Net sales $ 2,730,084 $ 644,689 $ 650,307 $ (42,625) $ 3,982,455 Cost of goods sold 1,943,174 543,004 416,953 (38,269) 2,864,862 Depreciation and amortization 22,193 7,647 9,174 4,717 43,731 Selling, general, and administrative expense 93,655 11,574 36,113 61,744 203,086 Gain on sale of assets — — — (6,373) (6,373) Operating income 671,062 82,464 188,067 (64,444) 877,149 Interest expense (810) Pension plan termination expense (13,100) Environmental expense (1,298) Other income, net 14,090 Income before income taxes $ 876,031 F-35 Segment information (continued): For the Year Ended December 25, 2021 (In thousands) Piping Systems Industrial Metals Climate Corporate and Eliminations Total Net sales $ 2,600,030 $ 703,363 $ 495,414 $ (29,462) $ 3,769,345 Cost of goods sold 1,996,610 605,715 367,343 (30,679) 2,938,989 Depreciation and amortization 23,384 6,929 10,379 4,698 45,390 Selling, general, and administrative expense 93,749 11,698 29,327 49,278 184,052 Gain on sale of businesses — (6,454) — (51,306) (57,760) Impairment charges — — 2,829 — 2,829 Operating income 486,287 85,475 85,536 (1,453) 655,845 Interest expense (7,709) Redemption premium (5,674) Environmental expense (5,053) Other income, net 3,730 Income before income taxes $ 641,139 For the Year Ended December 26, 2020 (In thousands) Piping Systems Industrial Metals Climate Corporate and Eliminations Total Net sales $ 1,583,002 $ 472,159 $ 370,131 $ (27,249) $ 2,398,043 Cost of goods sold 1,311,697 398,000 276,274 (19,810) 1,966,161 Depreciation and amortization 23,071 7,528 10,249 3,995 44,843 Selling, general, and administrative expense 78,744 12,566 26,806 41,367 159,483 Litigation settlement, net — — — (22,053) (22,053) Impairment charges 3,771 — — — 3,771 Operating income 165,719 54,065 56,802 (30,748) 245,838 Interest expense (19,247) Pension plan termination expense (17,835) Environmental expense (4,454) Other income, net 4,887 Income before income taxes $ 209,189 F-36 Summarized geographic information is as follows: (In thousands) 2022 2021 2020 Net sales: United States $ 2,965,053 $ 2,791,571 $ 1,765,810 United Kingdom 297,582 330,908 207,754 Canada 410,679 469,652 293,776 Asia and the Middle East 217,750 83,217 58,256 Mexico 91,391 93,997 72,447 $ 3,982,455 $ 3,769,345 $ 2,398,043 Long-lived assets: 2022 2021 2020 United States $ 266,571 $ 272,903 $ 289,508 United Kingdom 36,474 36,529 30,872 Canada 23,354 26,422 29,582 Asia and the Middle East 51,193 48,742 26,107 Mexico 2,358 966 503 $ 379,950 $ 385,562 $ 376,572 (In thousands) 2022 2021 2020 Expenditures for long-lived assets (including those resulting from business acquisitions): Piping Systems $ 20,694 $ 43,429 $ 39,209 Industrial Metals 6,905 5,744 5,968 Climate 2,611 12,428 5,521 General Corporate 7,429 3,521 448 $ 37,639 $ 65,122 $ 51,146 Segment assets: Piping Systems $ 1,088,940 $ 1,160,272 $ 977,937 Industrial Metals 160,702 173,290 152,683 Climate 279,940 250,107 258,668 General Corporate 712,817 145,267 139,280 $ 2,242,399 $ 1,728,936 $ 1,528,568 F-37 Note 4 – Cash, Cash Equivalents, and Restricted Cash (In thousands) 2022 2021 Cash & cash equivalents $ 461,018 $ 87,924 Restricted cash included within other current assets 4,176 2,349 Restricted cash included within other assets 102 103 Total cash, cash equivalents, and restricted cash $ 465,296 $ 90,376 Note 5 – Inventories (In thousands) 2022 2021 Raw materials and supplies $ 133,189 $ 130,133 Work-in-process 64,177 64,989 Finished goods 265,842 245,226 Valuation reserves (14,289) (10,104) Inventories $ 448,919 $ 430,244 Inventories valued using the LIFO method totaled $16.5 million at December 31, 2022 and $18.5 million at December 25, 2021.
Biggest changeThe following tables represent a disaggregation of revenue from contracts with customers, along with the reportable segment for each category: For the Year Ended December 30, 2023 (In thousands) Piping Systems Industrial Metals Climate Total Tube and fittings $ 1,926,975 $ — $ — $ 1,926,975 Brass rod and forgings — 454,246 — 454,246 OEM components and valves — 79,879 120,923 200,802 Valves and plumbing specialties 455,598 — — 455,598 Flex duct and other HVAC components — — 379,867 379,867 Other — 43,750 — 43,750 $ 2,382,573 $ 577,875 $ 500,790 $ 3,461,238 Intersegment sales (40,893) Net sales $ 3,420,345 F-34 Disaggregation of revenue from contracts with customers (continued): For the Year Ended December 31, 2022 (In thousands) Piping Systems Industrial Metals Climate Total Tube and fittings $ 2,211,963 $ — $ — $ 2,211,963 Brass rod and forgings — 510,865 — 510,865 OEM components, tube & assemblies — 74,647 121,004 195,651 Valves and plumbing specialties 518,121 — — 518,121 Flex duct and other HVAC components — — 529,303 529,303 Other — 59,177 — 59,177 $ 2,730,084 $ 644,689 $ 650,307 $ 4,025,080 Intersegment sales (42,625) Net sales $ 3,982,455 For the Year Ended December 25, 2021 (In thousands) Piping Systems Industrial Metals Climate Total Tube and fittings $ 2,055,639 $ — $ — $ 2,055,639 Brass rod and forgings — 565,870 — 565,870 OEM components, tube & assemblies 32,557 48,572 137,564 218,693 Valves and plumbing specialties 511,834 — — 511,834 Flex duct and other HVAC components — — 357,850 357,850 Other — 88,921 — 88,921 $ 2,600,030 $ 703,363 $ 495,414 $ 3,798,807 Intersegment sales (29,462) Net sales $ 3,769,345 F-35 Summarized segment information is as follows: For the Year Ended December 30, 2023 (In thousands) Piping Systems Industrial Metals Climate Corporate and Eliminations Total Net sales $ 2,382,573 $ 577,875 $ 500,790 $ (40,893) $ 3,420,345 Cost of goods sold 1,686,792 480,510 311,875 (45,666) 2,433,511 Depreciation and amortization 20,461 7,273 7,567 4,653 39,954 Selling, general, and administrative expense 99,823 13,713 28,950 65,686 208,172 Gain on sale of businesses — — — (4,137) (4,137) Impairment charges 6,258 — — — 6,258 Gain on insurance settlement — — (19,466) — (19,466) Operating income 569,239 76,379 171,864 (61,429) 756,053 Interest expense (1,221) Interest income 38,208 Realized and unrealized gains on short-term investments 41,865 Gain on extinguishment of NMTC liability 7,534 Environmental expense (825) Other income, net 3,618 Income before income taxes $ 845,232 For the Year Ended December 31, 2022 (In thousands) Piping Systems Industrial Metals Climate Corporate and Eliminations Total Net sales $ 2,730,084 $ 644,689 $ 650,307 $ (42,625) $ 3,982,455 Cost of goods sold 1,943,174 543,004 416,953 (38,269) 2,864,862 Depreciation and amortization 22,193 7,647 9,174 4,717 43,731 Selling, general, and administrative expense 93,655 11,574 36,113 61,744 203,086 Gain on sale of assets — — — (6,373) (6,373) Operating income 671,062 82,464 188,067 (64,444) 877,149 Interest expense (810) Interest income 6,457 Pension plan termination expense (13,100) Realized and unrealized gains on short-term investments 2,918 Environmental expense (1,298) Other income, net 4,715 Income before income taxes $ 876,031 F-36 Segment information (continued): For the Year Ended December 25, 2021 (In thousands) Piping Systems Industrial Metals Climate Corporate and Eliminations Total Net sales $ 2,600,030 $ 703,363 $ 495,414 $ (29,462) $ 3,769,345 Cost of goods sold 1,996,610 605,715 367,343 (30,679) 2,938,989 Depreciation and amortization 23,384 6,929 10,379 4,698 45,390 Selling, general, and administrative expense 93,749 11,698 29,327 49,278 184,052 Gain on sale of businesses — (6,454) — (51,306) (57,760) Impairment charges — — 2,829 — 2,829 Operating income 486,287 85,475 85,536 (1,453) 655,845 Interest expense (7,709) Interest income 353 Redemption premium (5,674) Environmental expense (5,053) Other income, net 3,377 Income before income taxes $ 641,139 Summarized geographic information is as follows: (In thousands) 2023 2022 2021 Net sales: United States $ 2,572,141 $ 2,965,053 $ 2,791,571 United Kingdom 270,128 297,582 330,908 Canada 339,682 410,679 469,652 Asia and the Middle East 153,816 217,750 83,217 Mexico 84,578 91,391 93,997 $ 3,420,345 $ 3,982,455 $ 3,769,345 Long-lived assets: 2023 2022 2021 United States $ 273,604 $ 266,571 $ 272,903 United Kingdom 40,045 36,474 36,529 Canada 18,152 23,354 26,422 Asia and the Middle East 50,725 51,193 48,742 Mexico 2,639 2,358 966 $ 385,165 $ 379,950 $ 385,562 F-37 (In thousands) 2023 2022 2021 Expenditures for long-lived assets (including those resulting from business acquisitions): Piping Systems $ 19,118 $ 20,694 $ 43,429 Industrial Metals 9,406 6,905 5,744 Climate 15,407 2,611 12,428 General Corporate 10,094 7,429 3,521 $ 54,025 $ 37,639 $ 65,122 (In thousands) 2023 2022 2021 Segment assets: Piping Systems $ 1,029,821 $ 1,088,940 $ 1,160,272 Industrial Metals 157,761 160,702 173,290 Climate 252,561 279,940 250,107 General Corporate 1,319,158 712,817 145,267 $ 2,759,301 $ 2,242,399 $ 1,728,936 Note 4 – Cash, Cash Equivalents, and Restricted Cash (In thousands) 2023 2022 Cash & cash equivalents $ 1,170,893 $ 461,018 Restricted cash included within other current assets 3,228 4,176 Restricted cash included within other assets 102 102 Total cash, cash equivalents, and restricted cash $ 1,174,223 $ 465,296 Note 5 – Inventories (In thousands) 2023 2022 Raw materials and supplies $ 111,843 $ 133,189 Work-in-process 61,793 64,177 Finished goods 220,629 265,842 Valuation reserves (14,017) (14,289) Inventories $ 380,248 $ 448,919 Inventories valued using the LIFO method totaled $20.2 million at December 30, 2023 and $16.5 million at December 31, 2022.
The loss on these investments for 2021 included net losses of $1.7 million for Tecumseh, partially offset by net gains of $0.8 million for the retail distribution business and a gain on fair value recognition related to our investment in Mueller Middle East of $0.7 million.
The loss of these investments for 2021 included net losses of $1.7 million for Tecumseh, partially offset by net gains of $0.8 million for the retail distribution business and a gain on fair value recognition related to our investment in Mueller Middle East of $0.7 million.
Cash Used in Financing Activities For 2022, net cash used in financing activities consisted primarily of (i) $55.8 million used for the payment of regular quarterly dividends to stockholders of the Company, (ii) $38.1 million used for the repurchase of common stock, and (iii) $7.2 million used for the payment of dividends to noncontrolling interests.
For 2022, net cash used in financing activities consisted primarily of (i) $55.8 million used for the payment of regular quarterly dividends to stockholders of the Company, (ii) $38.1 million used for the repurchase of common stock, and (iii) $7.2 million used for the payment of dividends to noncontrolling interests.
Short-Term Investments The fair value of short-term investments at December 31, 2022, consisting of U.S. treasury bills with maturities exceeding three months at the time of purchase, approximates the carrying value on that date. These treasury bills are stated at fair value and are classified as trading securities.
The fair value of short-term investments at December 31, 2022, consisting of U.S. treasury bills with maturities exceeding three months at the time of purchase, approximates the carrying value on that date. These treasury bills are stated at fair value and are classified as trading securities.
If the qualitative assessment is not conclusive, management compares the fair value of a reporting unit with its carrying amount and will recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, not to exceed the total amount of goodwill allocated to the reporting unit.
If the qualitative assessment is not conclusive, management compares the fair value of a reporting unit with its carrying amount and will recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, not to exceed the total amount of goodwill allocated to the reporting unit.
The expected return on plan assets is determined using the market value of plan assets. Differences between assumed and actual returns are amortized to the market value of assets on a straight-line basis over the average remaining service period of the plan participants using the corridor approach.
The expected return on plan assets is determined using the market value of plan assets. Differences between assumed and actual returns are amortized to the market value of assets on a straight-line basis over the average remaining service period of the plan participants using the corridor approach.
The corridor approach defers all actuarial gains and losses resulting from variances between actual results and actuarial assumptions. These unrecognized gains and losses are amortized when the net gains and losses exceed 10 percent of the greater of the market value of the plan assets or the projected benefit obligation.
The corridor approach defers all actuarial gains and losses resulting from variances between actual results and actuarial assumptions. These unrecognized gains and losses are amortized when the net gains and losses exceed 10 percent of the greater of the market value of the plan assets or the projected benefit obligation.
We determine the discount rate (which is required to be the rate at which the projected benefit obligation could be effectively settled as of the measurement date) with the assistance of actuaries, who calculate the yield available on high quality corporate bonds of a term that reflects the maturity and duration of expected benefit payments.
We determine the discount rate (which is required to be the rate at which the projected benefit obligation could be effectively settled as of the measurement date) with the assistance of actuaries, who calculate the yield available on high quality corporate bonds of a term that reflects the maturity and duration of expected benefit payments.
Each of the reportable segments is composed of certain operating segments that are aggregated primarily by the nature of products offered as follows: Piping Systems Piping Systems is composed of the following operating segments: Domestic Piping Systems Group, Great Lakes Copper, Heatlink Group, European Operations, Trading Group, Jungwoo-Mueller (the Company’s South Korean joint venture), and Mueller Middle East (our Bahraini joint venture).
Each of the reportable segments is composed of certain operating segments that are aggregated primarily by the nature of products offered as follows: Piping Systems Piping Systems is composed of the following operating segments: Domestic Piping Systems Group, Great Lakes Copper, European Operations, Trading Group, Jungwoo-Mueller (the Company’s South Korean joint venture), and Mueller Middle East (our Bahraini joint venture).
Each of the reportable segments is composed of certain operating segments that are aggregated primarily by the nature of products offered as follows: • Piping Systems: The Piping Systems segment is composed of Domestic Piping Systems Group, Great Lakes Copper, Heatlink Group, European Operations, Trading Group, Jungwoo-Mueller (our South Korean joint venture), and Mueller Middle East (our Bahraini joint venture).
Each of the reportable segments is composed of certain operating segments that are aggregated primarily by the nature of products offered as follows: • Piping Systems: The Piping Systems segment is composed of Domestic Piping Systems Group, Great Lakes Copper, European Operations, Trading Group, Jungwoo-Mueller (our South Korean joint venture), and Mueller Middle East (our Bahraini joint venture).
As disclosed in “ Note 2 – Acquisitions & Dispositions ,” during July 2021 the Company sold the assets of FTP and all of the outstanding stock of STI, resulting in a gain of $46.6 million. This gain is reported within Corporate and Eliminations. The results of FTP and STI, prior to the sale, were included within the Climate segment.
As disclosed in “ Note 2 – Acquisitions & Dispositions ,” during 2021 the Company sold the assets of FTP and all of the outstanding stock of STI, resulting in a gain of $46.6 million. This gain is reported within Corporate and Eliminations. The results of FTP and STI, prior to the sale, were included within the Climate segment.
Accruals are primarily based on estimated undiscounted cost of claims, which includes incurred but not reported claims, and are classified as accrued wages and other employee costs. Pension Benefit Plans The Company sponsors several qualified and nonqualified pension benefit plans in certain foreign locations.
Accruals are primarily based on estimated undiscounted cost of claims, which includes incurred but not reported claims, and are classified as accrued wages and other employee costs. Pension Benefit Plans The Company sponsors qualified and nonqualified pension benefit plans in certain foreign locations.
At this juncture, the Company is unable to determine the likelihood of a material adverse outcome or the amount or range of a potential loss in excess of the current reserve with respect to any remedial action or litigation relating to the Lead Refinery NPL site, either at Lead Refinery’s former operating site (operable unit 2) or the adjacent F-52 residential area (operable unit 1), including, but not limited to, EPA oversight costs for which the EPA may attempt to seek reimbursement from the Company, and past costs for which other PRPs may attempt to seek contribution from the Company.
At this juncture, the Company is unable to determine the likelihood of a material adverse outcome or the amount or range of a potential loss in excess of the current reserve with respect to any remedial action or litigation relating to the Lead Refinery NPL site, either at Lead Refinery’s former operating site (operable unit 2) or the adjacent residential area (operable unit 1), including, but not limited to, EPA oversight costs for which the EPA may attempt to seek reimbursement from the Company, and past costs for which other PRPs may attempt to seek contribution from the Company.
Selling, general, and administrative expenses increased in 2022 primarily due to (i) an increase in employment costs, including incentive compensation, of $13.3 million, (ii) incremental expenses of $3.2 million associated with H&C Flex and Mueller Middle East, (iii) the absence of fees of $2.6 million received as a settlement of preexisting relationships recognized in the prior year, and (iv) higher travel and entertainment expense of $1.2 million.
The increase in selling, general, and administrative expenses in 2022 was primarily due to (i) an increase in employment costs, including incentive compensation, of $13.3 million, (ii) incremental expenses of $3.2 million associated with H&C Flex and Mueller Middle East, (iii) the absence of fees of $2.6 million received as a settlement of preexisting relationships recognized in the prior year, and (iv) higher travel and entertainment expense of $1.2 million.
These increases were partially offset by other adjustments of $0.5 million. F-5 Income tax expense was $165.9 million in 2021, representing an effective tax rate of 25.9 percent.
These increases were partially offset by other adjustments of $0.5 million. Income tax expense was $165.9 million in 2021, representing an effective tax rate of 25.9 percent.
This rate was higher than what would be computed using the U.S. statutory federal rate primarily due to (i) the provision for state and local income taxes, net of the federal benefit, of $32.2 million, (ii) the effect of foreign statutory rates different from the U.S. federal rate and other foreign adjustments of $7.4 million, and (iii) the impact of investments in unconsolidated affiliates of $0.2 million.
This rate was higher than what would be computed using the U.S. statutory federal rate primarily due to (i) the provision for state and local income taxes, net of the federal benefit, of $32.2 million, (ii) the effect of foreign statutory rates different from the U.S. federal rate and other F-5 foreign adjustments of $7.4 million, and (iii) the impact of investments in unconsolidated affiliates of $0.2 million.
In connection with the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, the Company provides the following cautionary statement identifying important economic, political, and technological factors, among others, which could cause actual results or events to differ materially from those set forth in or implied by the forward-looking statements and related assumptions.
F-15 In connection with the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, the Company provides the following cautionary statement identifying important economic, political, and technological factors, among others, which could cause actual results or events to differ materially from those set forth in or implied by the forward-looking statements and related assumptions.
See “ Note 17 – Stock-Based Compensation ” for additional information. Concentrations of Credit and Market Risk Concentrations of credit risk with respect to accounts receivable are limited due to the large number of customers comprising the Company’s customer base, and their dispersion across different geographic areas and different industries, including HVAC, plumbing, refrigeration, hardware, automotive, OEMs, and others.
See “ Note 18 – Stock-Based Compensation ” for additional information. Concentrations of Credit and Market Risk Concentrations of credit risk with respect to accounts receivable are limited due to the large number of customers comprising the Company’s customer base, and their dispersion across different geographic areas and different industries, including HVAC, plumbing, refrigeration, hardware, automotive, OEMs, and others.
Selling, general, and administrative expenses increased in 2022 as a result of (i) higher agent commissions of $4.6 million, (ii) incremental expenses associated with H&C Flex of $2.1 million, and (iii) higher employment costs, including incentive compensation, of $1.8 million. These were partially offset by the absence of expenses associated with FTP and STI of $2.4 million.
Selling, general, and administrative expenses increased in 2022 as a result of (i) higher agent commissions of $4.6 million, (ii) incremental expenses associated with H&C Flex of $2.1 million, and (iii) higher employment F-9 costs, including incentive compensation, of $1.8 million. These were partially offset by the absence of expenses associated with FTP and STI of $2.4 million.
As a result, during the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. The operating results generated by the acquired businesses are included in the Consolidated Statements of Income from their respective dates of acquisition.
As a result, during the measurement period, which may be up to one year from the acquisition date, the F-24 Company may record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. The operating results generated by the acquired businesses are included in the Consolidated Statements of Income from their respective dates of acquisition.
Changes in the fair value of a derivative that is qualified, designated, and highly effective as a cash flow hedge are recorded in stockholders’ equity within accumulated other F-27 comprehensive income (AOCI), to the extent effective, until they are reclassified to earnings in the same period or periods during which the hedged transaction affects earnings.
Changes in the fair value of a derivative that is qualified, designated, and highly effective as a cash flow hedge are recorded in stockholders’ equity within accumulated other comprehensive income (AOCI), to the extent effective, until they are reclassified to earnings in the same period or periods during which the hedged transaction affects earnings.
Mueller Middle East manufactures and sells copper coils to certain Mueller subsidiaries. Total sales to Mueller subsidiaries were approximately $48.2 million for the period in 2021 prior to consolidation. F-29 H&C Flex On December 20, 2020, the Company entered into an asset purchase agreement with Hart & Cooley LLC.
Mueller Middle East manufactures and sells copper coils to certain Mueller subsidiaries. Total sales to Mueller subsidiaries were approximately $48.2 million for the period in 2021 prior to consolidation. F-30 H&C Flex On December 20, 2020, the Company entered into an asset purchase agreement with Hart & Cooley LLC.
The Company uses derivative instruments such as commodity futures contracts, foreign currency forward contracts, and interest rate swaps to manage these exposures. F-38 Commodity Futures Contracts Copper and brass represent the largest component of the Company’s variable costs of production. The cost of these materials is subject to global market fluctuations caused by factors beyond the Company’s control.
The Company uses derivative instruments such as commodity futures contracts, foreign currency forward contracts, and interest rate swaps to manage these exposures. Commodity Futures Contracts Copper and brass represent the largest component of the Company’s variable costs of production. The cost of these materials is subject to global market fluctuations caused by factors beyond the Company’s control.
These uses of cash were partially offset by the issuance of debt under our Credit Agreement of $190.0 million. Liquidity and Outlook We believe that cash provided by operations, funds available under the Credit Agreement, and cash on hand will be adequate to meet our liquidity needs, including working capital, capital expenditures, and debt payment obligations.
These uses of cash were partially offset by the issuance of debt under our Credit Agreement of $595.0 million. Liquidity and Outlook We believe that cash provided by operations, funds available under the Credit Agreement, and cash on hand will be adequate to meet our liquidity needs, including working capital, capital expenditures, and debt payment obligations.
If the Company were to determine that its estimates of the duration or extent of its environmental obligations were no longer accurate, it would adjust environmental liabilities accordingly in the period that such determination is made. Estimated future expenditures for environmental remediation are not discounted to their present value.
If the Company were to determine that its estimates of the duration or extent of its environmental obligations were no longer accurate, it would adjust environmental liabilities accordingly F-27 in the period that such determination is made. Estimated future expenditures for environmental remediation are not discounted to their present value.
The Company includes interest and penalties related to income tax matters as a component of income tax expense, none of which was material in 2022, 2021, and 2020. During 2021, the Internal Revenue Service completed its audit of the Company’s 2015 and 2017 tax returns, the results of which were immaterial to the Consolidated Financial Statements.
The Company includes interest and penalties related to income tax matters as a component of income tax expense, none of which was material in 2023, 2022, and 2021. During 2021, the Internal Revenue Service completed its audit of the Company’s 2015 and 2017 tax returns, the results of which were immaterial to the Consolidated Financial Statements.
We identify reporting units by evaluating components of our operating segments and combining those components with similar economic characteristics. Reporting units with significant recorded goodwill include Domestic Piping Systems, B&K LLC, Great Lakes, Heatlink Group, European Operations, Jungwoo-Mueller, Mueller Middle East, Westermeyer, and Flex Duct.
We identify reporting units by evaluating components of our operating segments and combining those components with similar economic characteristics. Reporting units with significant recorded goodwill include Domestic Piping Systems, B&K LLC, Great Lakes, European Operations, Jungwoo-Mueller, Mueller Middle East, Westermeyer, and Flex Duct.
These increases were partially offset by (i) lower unit sales volume of $172.3 million in the segment’s core product lines, primarily non-U.S. copper tube, and (ii) a decrease in sales of $10.9 million as a result of the disposition of Die-Mold.
These increases were partially offset by (i) lower unit F-6 sales volume of $172.3 million in the segment’s core product lines, primarily non-U.S. copper tube, and (ii) a decrease in sales of $10.9 million as a result of the disposition of Die-Mold.
In the period it becomes probable that the minimum threshold specified in the award will be achieved, the Company recognizes expense for the proportionate share of the total fair value of the performance stock awards related to the vesting period that has F-57 already lapsed for the shares expected to vest and be released.
In the period it becomes probable that the minimum threshold specified in the award will be achieved, the Company recognizes expense for the proportionate share of the total fair value of the performance stock awards related to the vesting period that has already lapsed for the shares expected to vest and be released.
Changes in these estimates related to the value of inventory, if any, may result in a materially adverse impact on the Company’s reported financial position or results of operations. The Company recognizes the impact of any changes in estimates, assumptions, and judgments in income in the period in which it is determined.
Changes in these estimates related to the value of inventory, if any, F-25 may result in a materially adverse impact on the Company’s reported financial position or results of operations. The Company recognizes the impact of any changes in estimates, assumptions, and judgments in income in the period in which it is determined.
The Company minimizes its exposure to base metal price fluctuations through various strategies. Generally, it prices an equivalent amount of copper raw material, under flexible pricing arrangements it maintains with its suppliers, at the time it determines the selling price of finished products to its customers.
F-28 The Company minimizes its exposure to base metal price fluctuations through various strategies. Generally, it prices an equivalent amount of copper raw material, under flexible pricing arrangements it maintains with its suppliers, at the time it determines the selling price of finished products to its customers.
The income on these investments for 2022 included net gains of $5.2 million for Tecumseh and net gains of $4.9 million for the retail distribution business. During 2021, we recognized losses of $0.2 million on our investments in unconsolidated affiliates, net of foreign tax, compared to losses of $10.2 million in 2020.
During 2022, we recognized income of $10.1 million on our investments in unconsolidated affiliates, net of foreign tax, compared to losses of $0.2 million in 2021. The income on these investments for 2022 included net gains of $5.2 million for Tecumseh and net gains of $4.9 million for the retail distribution business.
Environmental expenses that relate to ongoing operations are included as a component of cost of goods sold. Environmental expenses related to non-operating properties are presented below operating income in the Consolidated Statements of Income. See “ Note 14 – Commitments and Contingencies ” for additional information.
Environmental expenses that relate to ongoing operations are included as a component of cost of goods sold. Environmental expenses related to non-operating properties are presented below operating income in the Consolidated Statements of Income. See “ Note 15 – Commitments and Contingencies ” for additional information.
F-23 Amounts included in restricted cash relate to required deposits in brokerage accounts that facilitate the Company’s hedging activities as well as imprest funds for the Company’s self-insured workers’ compensation program. See “ Note 4 – Cash, Cash Equivalents, and Restricted Cash ” for additional information.
Amounts included in restricted cash relate to required deposits in brokerage accounts that facilitate the Company’s hedging activities as well as imprest funds for the Company’s self-insured workers’ compensation program. See “ Note 4 – Cash, Cash Equivalents, and Restricted Cash ” for additional information.
F-56 Note 17 – Stock-Based Compensation The Company has in effect stock incentive plans under which stock-based awards have been granted to certain employees and members of its Board of Directors. Under these existing plans, the Company may grant stock options, restricted stock awards, and performance stock awards.
F-56 Note 18 – Stock-Based Compensation The Company has in effect stock incentive plans under which stock-based awards have been granted to certain employees and members of its Board of Directors. Under these existing plans, the Company may grant stock options, restricted stock awards, and performance stock awards.
As disclosed in Notes 1 and 13 to the consolidated financial statements, the Company recognizes the overfunded or underfunded status of the plans as an asset or liability in the consolidated balance sheets with changes in the funded status recorded through comprehensive income in the year in which those changes occur.
As disclosed in Notes 1 and 14 to the consolidated financial statements, the Company recognizes the overfunded or underfunded status of the plans as an asset or liability in the consolidated balance sheets with changes in the funded status recorded through comprehensive income in the year in which those changes occur.
These estimates are highly subjective and could be affected by changes in business conditions and other factors. Changes in any of these factors could have a material impact on future income tax expense. See “ Note 15 – Income Taxes ” for additional information.
These estimates are highly subjective and could be affected by changes in business conditions and other factors. Changes in any of these factors could have a material impact on future income tax expense. See “ Note 16 – Income Taxes ” for additional information.
During that time, implementation of BMP further reduced impacts of acid rock drainage; however, full compliance has not been achieved. The QCB is presently F-51 renewing MRRC’s discharge permit and will concurrently issue a new order.
During that time, implementation of BMP further reduced impacts of acid rock drainage; however, full compliance has not been achieved. The QCB is presently renewing MRRC’s discharge permit and will concurrently issue a new order.
Participants direct the investment of their account balances by allocating among a range of asset classes including mutual funds (equity, fixed income, and balanced funds) and money market funds. The plans do not allow direct investment in securities issued by the Company.
Participants direct the investment of their account balances by allocating among a range of asset classes including mutual funds (equity, fixed income, and balanced funds) and money market funds. The plans do not allow direct investment in securities issued by the Company. U. K.
Approximate costs to comply with the post-closure permit, including associated general and administrative costs, are estimated at between $1.6 million and $2.4 million over the next 14 years. The Company has recorded a reserve at the low end of this range. On April 9, 2009, pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), the U.S.
Approximate costs to comply with the post-closure permit, including associated general and administrative costs, are estimated at between $1.6 million and $2.2 million over the next 13 years. The Company has recorded a reserve at the low end of this range. On April 9, 2009, pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), the U.S.
The Company has certain vehicle leases that are financing; however, these leases are deemed immaterial for disclosure. See “ Note 8 – Leases ” for additional information. F-24 Property, Plant, and Equipment Property, plant, and equipment is stated at cost less accumulated depreciation.
The Company has certain vehicle leases that are financing; however, these leases are deemed immaterial for disclosure. See “ Note 8 – Leases ” for additional information. Property, Plant, and Equipment Property, plant, and equipment is stated at cost less accumulated depreciation.
Bonita Peak Mining District Following an August 2015 spill from the Gold King Mine into the Animas River near Silverton, Colorado, the EPA listed the Bonita Peak Mining District on the NPL. Said listing was finalized in September 2016.
F-52 Bonita Peak Mining District Following an August 2015 spill from the Gold King Mine into the Animas River near Silverton, Colorado, the EPA listed the Bonita Peak Mining District on the NPL. Said listing was finalized in September 2016.
Performance stock awards are vested and released at the end of the performance period if the predefined performance criteria are achieved. For all performance stock awards, in the event the certified results equal the predefined performance criteria, the Company will grant the number of shares equal to the target award.
Performance stock awards are vested and released at the end of the performance period if the predefined performance criteria are achieved. F-57 For all performance stock awards, in the event the certified results equal the predefined performance criteria, the Company will grant the number of shares equal to the target award.
The Company records its proportionate share of the investees’ net income or loss one month in arrears as income (loss) from unconsolidated affiliates in the Consolidated Statements of Income. The Company’s proportionate share of the investees’ other comprehensive income (loss), net of income taxes, is recorded in the Consolidated Statements of Comprehensive Income and Consolidated Statements of Changes in Equity.
The Company records its proportionate share of the investee’s net income or loss one month in arrears as income (loss) from unconsolidated affiliates in the Consolidated Statements of Income. The Company’s proportionate share of the investee’s other comprehensive income (loss), net of income taxes, is recorded in the Consolidated Statements of Comprehensive Income and Consolidated Statements of Changes in Equity.
At December 31, 2022, the premium was 112.5 basis points for Eurocurrency Rate loans and 12.5 basis points for Base Rate loans. Additionally, a commitment fee is payable quarterly on the total commitment less any outstanding loans or issued letters of credit, and varies from 15.0 to 30.0 basis points based upon the Company’s debt to total capitalization ratio.
At December 30, 2023, the premium was 112.5 basis points for Eurocurrency Rate loans and 12.5 basis points for Base Rate loans. Additionally, a commitment fee is payable quarterly on the total commitment less any outstanding loans or issued letters of credit, and varies from 15.0 to 30.0 basis points based upon the Company’s debt to total capitalization ratio.
Non-operating Properties Southeast Kansas Sites The Kansas Department of Health and Environment (KDHE) has contacted the Company regarding environmental contamination at three former smelter sites in Kansas (Altoona, East La Harpe, and Lanyon).
F-50 Non-operating Properties Southeast Kansas Sites The Kansas Department of Health and Environment (KDHE) has contacted the Company regarding environmental contamination at three former smelter sites in Kansas (Altoona, East La Harpe, and Lanyon).
Harris Co., Inc. and Lincoln Electric Holdings, Inc., pursuant to which the Company sold the assets of Fabricated Tube Products (FTP) and all of the outstanding stock of STI for approximately $75.7 million.
Harris Co., Inc. and Lincoln Electric Holdings, Inc., pursuant to which the Company sold the assets of Fabricated Tube Products (FTP) and all of the outstanding stock of STI F-32 for approximately $75.7 million.
Unallocated expenses include general corporate expenses, plus certain charges or credits not included in segment activity. During 2022, 2021, and 2020, no single customer exceeded 10 percent of worldwide sales.
Unallocated expenses include general corporate expenses, plus certain charges or credits not included in segment activity. During 2023, 2022, and 2021, no single customer exceeded 10 percent of worldwide sales.
With the exception of the Turbotec reporting unit, there were no impairment charges resulting from the 2022, 2021, or 2020 annual impairment tests as the estimated fair value of each of the reporting units exceeded its carrying value.
With the exception of the Turbotec reporting unit, there were no impairment charges resulting from the 2023, 2022, or 2021 annual impairment tests as the estimated fair value of each of the reporting units exceeded its carrying value.
F-22 Notes to Consolidated Financial Statements Note 1 – Summary of Significant Accounting Policies Nature of Operations The principal business of Mueller Industries, Inc. is the manufacture and sale of copper tube and fittings; line sets; PEX plastic tube and fittings; steel nipples; brass rod, bar, and shapes; aluminum and brass forgings; aluminum impact extrusions; compressed gas valves; refrigeration valves and fittings; pressure vessels; coaxial heat exchangers; and insulated flexible duct systems.
F-23 Notes to Consolidated Financial Statements Note 1 – Summary of Significant Accounting Policies Nature of Operations The principal business of Mueller Industries, Inc. is the manufacture and sale of copper tube and fittings; line sets; steel nipples; brass rod, bar, and shapes; aluminum and brass forgings; aluminum impact extrusions; compressed gas valves; refrigeration valves and fittings; pressure vessels; coaxial heat exchangers; and insulated flexible duct systems.
Changes in forecasted operating results and other assumptions could materially affect these estimates. We evaluated each reporting unit during the fourth quarters of 2022 and 2021, as applicable.
Changes in forecasted operating results and other assumptions could materially affect these estimates. We evaluated each reporting unit during the fourth quarters of 2023 and 2022, as applicable.
Under the equity method of accounting, this investment is stated at initial cost and is adjusted for subsequent additional investments and the Company’s proportionate share of earnings or losses and distributions.
Under F-26 the equity method of accounting, this investment is stated at initial cost and is adjusted for subsequent additional investments and the Company’s proportionate share of earnings or losses and distributions.
It is expected that the new 10-year permit will include an order requiring continued implementation of BMP through 2033 to address residual discharges of acid rock drainage.
It is expected that the new 10-year permit will include an order requiring continued implementation of BMP through 2034 to address residual discharges of acid rock drainage.
The statute of limitations is open for the Company’s federal tax return for 2019 and all subsequent years, and some state and foreign returns are also open for some earlier tax years due to differing statute periods.
The statute of limitations is open for the Company’s federal tax return for 2020 and all subsequent years, and some state and foreign returns are also open for some earlier tax years due to differing statute periods.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 28, 2023 expressed an unqualified opinion thereon.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 30, 2023, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 28, 2024 expressed an unqualified opinion thereon.
See “ Note 13 – Benefit Plans ” for additional information. Environmental Reserves and Environmental Expenses The Company recognizes an environmental liability when it is probable the liability exists and the amount is reasonably estimable.
See “ Note 14 – Benefit Plans ” for additional information. Environmental Reserves and Environmental Expenses The Company recognizes an environmental liability when it is probable the liability exists and the amount is reasonably estimable.
The weighted average of key assumptions used in determining the fair value of options granted and a discussion of the methodology used to develop each assumption are as follows: 2022 2021 2020 Fair value of stock options on grant date N/A $ 15.6 $ 6.81 Expected term N/A 7.9 years 7.9 years Expected price volatility N/A 33.6 % 31.9 % Risk-free interest rate N/A 1.3 % 0.6 % Dividend yield N/A 1.1 % 1.7 % Expected term – This is the period of time estimated based on historical experience over which the options granted are expected to remain outstanding.
The weighted average of key assumptions used in determining the fair value of options granted and a discussion of the methodology used to develop each assumption are as follows: 2023 2022 2021 Fair value of stock options on grant date N/A N/A $ 15.6 Expected term N/A N/A 7.9 years Expected price volatility N/A N/A 33.6 % Risk-free interest rate N/A N/A 1.3 % Dividend yield N/A N/A 1.1 % Expected term – This is the period of time estimated based on historical experience over which the options granted are expected to remain outstanding.
F-58 Note 18 – Accumulated Other Comprehensive Income (Loss) AOCI includes certain foreign currency translation adjustments from those subsidiaries not using the U.S. dollar as their functional currency, net deferred gains and losses on certain derivative instruments accounted for as cash flow hedges, adjustments to pension and other post-employment benefit liabilities, and other comprehensive income attributable to unconsolidated affiliates.
Note 19 – Accumulated Other Comprehensive Income (Loss) AOCI includes certain foreign currency translation adjustments from those subsidiaries not using the U.S. dollar as their functional currency, net deferred gains and losses on certain derivative instruments accounted for as cash flow hedges, adjustments to pension and other post-employment benefit liabilities, and other comprehensive income attributable to unconsolidated affiliates.
The weighted average assumptions used in the measurement of the Company’s benefit obligations are as follows: Pension Benefits Other Benefits 2022 2021 2022 2021 Discount rate 4.80 % 1.90 % 6.08 % 3.73 % Expected long-term return on plan assets 5.51 % 4.96 % N/A N/A Rate of compensation increases N/A N/A 5.00 % 5.00 % Rate of inflation 3.30 % 3.70 % N/A N/A F-47 The weighted average assumptions used in the measurement of the Company’s net periodic benefit cost are as follows: Pension Benefits Other Benefits 2022 2021 2020 2022 2021 2020 Discount rate 1.90 % 1.40 % 1.93 % 3.73 % 2.92 % 3.70 % Expected long-term return on plan assets 4.96 % 4.69 % 3.84 % N/A N/A N/A Rate of compensation increases N/A N/A N/A 5.00 % 5.00 % 5.00 % Rate of inflation 3.70 % 3.20 % 3.20 % N/A N/A N/A The Company’s Mexican postretirement plans use the rate of compensation increase in the benefit formulas.
The weighted average assumptions used in the measurement of the Company’s benefit obligations are as follows: Pension Benefits Other Benefits 2023 2022 2023 2022 Discount rate 4.40 % 4.80 % 5.96 % 6.08 % Expected long-term return on plan assets 4.30 % 5.51 % N/A N/A Rate of compensation increases N/A N/A 5.00 % 5.00 % Rate of inflation 3.20 % 3.30 % N/A N/A The weighted average assumptions used in the measurement of the Company’s net periodic benefit cost are as follows: Pension Benefits Other Benefits 2023 2022 2021 2023 2022 2021 Discount rate 4.80 % 1.90 % 1.40 % 6.08 % 3.73 % 2.92 % Expected long-term return on plan assets 5.51 % 4.96 % 4.69 % N/A N/A N/A Rate of compensation increases N/A N/A N/A 5.00 % 5.00 % 5.00 % Rate of inflation 3.30 % 3.70 % 3.20 % N/A N/A N/A The Company’s Mexican postretirement plans use the rate of compensation increase in the benefit formulas.
(the Company) as of December 31, 2022 and December 25, 2021, the related consolidated statements of income, comprehensive income, changes in equity and cash flows for each of the three years in the period ended December 31, 2022, and the related notes and financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”).
(the Company) as of December 30, 2023 and December 31, 2022, the related consolidated statements of income, comprehensive income, changes in equity and cash flows for each of the three years in the period ended December 30, 2023, and the related notes and financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”).
In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2022 and December 25, 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022, in conformity with U.S. generally accepted accounting principles.
In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 30, 2023 and December 31, 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 30, 2023, in conformity with U.S. generally accepted accounting principles.
Fiscal Years The Company’s fiscal year ends on the last Saturday of December and consisted of 53 weeks in 2022 and 52 weeks in 2021 and 2020. These dates were December 31, 2022, December 25, 2021, and December 26, 2020. Basis of Presentation The Consolidated Financial Statements include the accounts of Mueller Industries, Inc. and its majority-owned subsidiaries.
Fiscal Years The Company’s fiscal year ends on the last Saturday of December and consisted of 52 weeks in 2023, 53 weeks in 2022, and 52 weeks in 2021. These dates were December 30, 2023, December 31, 2022, and December 25, 2021. Basis of Presentation The Consolidated Financial Statements include the accounts of Mueller Industries, Inc. and its majority-owned subsidiaries.
The fair value of long-term debt at December 31, 2022 approximates the carrying value on that date. The estimated fair values were determined based on quoted market prices and the current rates offered for debt with similar terms and maturities. The fair value of long-term debt is classified as level 2 within the fair value hierarchy.
The fair value of long-term debt at December 30, 2023 approximates the carrying value on that date. The estimated fair values were determined based on quoted market prices and the current rates offered for debt with similar terms and maturities. The fair value of long-term debt is classified as level 2 within the fair value hierarchy.
There were no borrowings outstanding under the Credit Agreement as of December 31, 2022 or December 25, 2021. Borrowings under the Revolving Credit Facility bear interest, at the Company’s option, at the Eurocurrency Rate which is determined by the underlying currency of the Credit Extension or the Base Rate as defined by the Credit Agreement, plus a variable premium.
There were no borrowings outstanding under the Credit Agreement as of December 30, 2023 or December 31, 2022. Borrowings under the Revolving Credit Facility bear interest, at the Company’s option, at the Eurocurrency Rate which is determined by the underlying currency of the Credit Extension or the Base Rate as defined by the Credit Agreement, plus a variable premium.
At December 31, 2022 and December 25, 2021, the Company had recorded restricted cash in other current assets of $4.0 million and $2.0 million, respectively, as collateral related to open derivative contracts under the master netting arrangements. Note 8 – Leases The Company leases certain facilities, vehicles, and equipment which expire on various dates through 2041.
At December 30, 2023 and December 31, 2022, the Company had recorded restricted cash in other current assets of $3.2 million and $4.0 million, respectively, as collateral related to open derivative contracts under the master netting arrangements. Note 8 – Leases The Company leases certain facilities, vehicles, and equipment which expire on various dates through 2041.
On December 16, 2011, MCTP entered into an amended Administrative Order by Consent to prepare and implement a revised RWP regarding final remediation for the Site. The remediation system was activated in February 2014. Costs to implement the work plans, including associated general and administrative costs, are estimated to approximate $0.5 million to $0.7 million over the next three years.
On December 16, 2011, MCTP entered into an amended Administrative Order by Consent to prepare and implement a revised RWP regarding final remediation for the Site. The remediation system was activated in February 2014. Costs to implement the work plans, including associated general and administrative costs, are estimated to approximate $0.4 million over the next two years.
The Company presents its derivative assets and liabilities in the Consolidated Balance Sheets on a net basis by counterparty.
F-39 The Company presents its derivative assets and liabilities in the Consolidated Balance Sheets on a net basis by counterparty.
We have served as the Company’s auditor since 1991. Memphis, Tennessee February 28, 2023 F-62 MUELLER INDUSTRIES, INC.
We have served as the Company’s auditor since 1991. Memphis, Tennessee February 28, 2024 F-62 MUELLER INDUSTRIES, INC.
The components of net periodic benefit cost (income) other than the service cost component are included in other income, net in the Consolidated Statements of Income.
F-47 The components of net periodic benefit cost (income) other than the service cost component are included in other income, net in the Consolidated Statements of Income.
Compensation expense for the Company’s matching contribution to the 401(k) plans was $4.9 million in 2022, $4.5 million in 2021, and $4.0 million in 2020. The Company match is a cash contribution.
Compensation expense for the Company’s matching contribution to the 401(k) plans was $4.9 million in 2023, $4.9 million in 2022, and $4.5 million in 2021. The Company match is a cash contribution.
Periodic value fluctuations of the futures contracts generally offset the value fluctuations of the underlying natural gas prices. There were no open futures contracts to purchase natural gas at December 31, 2022. Interest Rates The C ompany had no variable-rate debt outstanding at December 31, 2022 and December 25, 2021.
Periodic value fluctuations of the futures contracts generally offset the value fluctuations of the underlying natural gas prices. There were no open futures contracts to purchase natural gas at December 30, 2023. Interest Rates The C ompany had no variable-rate debt outstanding at December 30, 2023 and December 31, 2022.
There were no borrowings outstanding under the Credit Agreement at December 31, 2022. Jungwoo-Mueller has several secured revolving credit arrangements with a total borrowing capacity of KRW 20.0 billion (or approximately $15.0 million). Borrowings are secured by the real property and equipment of Jungwoo-Mueller. There were no borrowings outstanding at Jungwoo-Mueller as of December 31, 2022.
There were no borrowings outstanding under the Credit Agreement at December 30, 2023. Jungwoo-Mueller has several secured revolving credit arrangements with a total borrowing capacity of KRW 20.0 billion (or approximately $15.3 million). Borrowings are secured by the real property and equipment of Jungwoo-Mueller. There were no borrowings outstanding at Jungwoo-Mueller as of December 30, 2023.
Recently Issued Accounting Standards In June 2022, the FASB issued ASU No. 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions.
In June 2022, the FASB issued ASU No. 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions.
Although the Site Activities have been substantially concluded, Lead Refinery is required to perform monitoring and maintenance-related activities pursuant to a post-closure permit issued by the Indiana Department of Environmental Management effective as of March 2, 2013. Lead Refinery spent approximately $0.4 million from 2020 through 2022 with respect to this site.
Although the Site Activities have been substantially concluded, Lead Refinery is required to perform monitoring and maintenance-related activities pursuant to a post-closure permit issued by the Indiana Department of Environmental Management effective as of March 2, 2013. Lead Refinery spent approximately $0.6 million from 2021 through 2023 with respect to this site.
The annual assumed rate of increase in the per capita cost of covered benefits (i.e., health care cost trend rate) is assumed to range from 4.7 to 7.2 percent for 2023, gradually decrease to 4.1 percent through 2040, and remain at that level thereafter.
The annual assumed rate of increase in the per capita cost of covered benefits (i.e., health care cost trend rate) is assumed to range from 4.9 to 8.2 percent for 2024, gradually decrease to 4.1 percent through 2040, and remain at that level thereafter.
Changes in material costs directly impact components of working capital, primarily inventories, accounts receivable, and accounts payable. The price of copper has fluctuated significantly and averaged approximately $4.01 in 2022, $4.24 in 2021, and $2.80 in 2020. We have significant environmental remediation obligations which we expect to pay over future years.
Changes in material costs directly impact components of working capital, primarily inventories, accounts receivable, and accounts payable. The price of copper has fluctuated significantly and averaged approximately $3.86 in 2023, $4.01 in 2022, and $4.24 in 2021. We have significant environmental remediation obligations which we expect to pay over future years.
The amount in excess of the corridor is amortized over the average remaining service period of the plan participants. For 2022, the average remaining service period for the pension plans was 11.5 years.
The amount in excess of the corridor is amortized over the average remaining service period of the plan participants. For 2023, the average remaining service period for the pension plans was 11 years.
In the next 12 months, the Company will reclassify into earnings realized gains or losses relating to cash flow hedges. At December 31, 2022, this amount was approximately $1.3 million of deferred net gains, net of tax. The Company may also enter into futures contracts to protect the value of inventory against market fluctuations.
In the next 12 months, the Company will reclassify into earnings realized gains or losses relating to cash flow hedges. At December 30, 2023, this amount was approximately $0.1 million of deferred net gains, net of tax. The Company may also enter into futures contracts to protect the value of inventory against market fluctuations.
Interest expense decreased in 2022 primarily as a result of the redemption of our Subordinated Debentures during the second quarter of 2021 and there being no borrowings outstanding under the Credit Agreement during 2022. The decrease in 2021 was primarily a result of the redemption of our Subordinated Debentures during the second quarter of 2021.
The decrease in 2022 was primarily a result of the redemption of our Subordinated Debentures during the second quarter of 2021 and there being no borrowings outstanding under the Credit Agreement during 2022.
Cash used to fund pension and other postretirement benefit obligations was $0.5 million in 2022 and $0.6 million in 2021. We anticipate making contributions of approximately $1.1 million to these plans in 2023.
Cash used to fund pension and other postretirement benefit obligations was $0.7 million in 2023 and $0.5 million in 2022. We anticipate making contributions of approximately $1.0 million to these plans in 2024.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

1 edited+0 added−0 removed46 unchanged
Biggest changeWe depend on the continued efforts of our senior management. The unplanned loss of key personnel, or the inability to hire and retain qualified executives, could negatively impact our ability to manage our business.
Biggest changeWe depend on the continued efforts of our senior management. The unplanned loss of key personnel, or the inability to hire and retain qualified executives, could negatively impact our ability to manage our business. ITEM 1B. UNRESOLVED STAFF COMMENTS None.

Item 2. Properties

Properties — owned and leased real estate

4 edited+0 added−0 removed0 unchanged
Biggest changeThomas, Ontario, Canada 73,124 Distribution Leased Shelby, OH 61,750 Distribution Leased Atlanta, GA 60,293 Distribution Leased Dallas, TX 55,585 Distribution Leased Ontario, CA 54,209 Distribution Leased Jacksonville, FL 48,000 Distribution Leased Calgary, Alberta, Canada 22,084 Distribution Leased Calgary, Alberta, Canada 21,117 Manufacturing Leased Calgary, Alberta, Canada 6,600 Manufacturing Leased Industrial Metals Segment Port Huron, MI 450,000 Manufacturing Owned New Market, VA 413,120 Manufacturing & Distribution Owned Belding, MI 293,068 Manufacturing Owned Brooklyn, OH 163,200 Manufacturing Leased Marysville, MI 81,500 Manufacturing Owned Brighton, MI 65,000 Machining Leased Climate Segment Plainville, GA 313,835 Manufacturing & Distribution Owned Fort Worth, TX 266,485 Manufacturing Owned 10 Location of Facility Building Space (Sq.
Biggest changeThomas, Ontario, Canada 73,124 Distribution Leased Shelby, OH 61,750 Distribution Leased Ontario, CA 54,209 Distribution Leased Jacksonville, FL 48,000 Distribution Leased Al Hidd, Kingdom of Bahrain 22,500 Manufacturing & Distribution Owned Industrial Metals Segment Port Huron, MI 450,000 Manufacturing Owned New Market, VA 413,120 Manufacturing & Distribution Owned Brooklyn, OH 163,200 Manufacturing Leased Marysville, MI 81,500 Manufacturing Owned Brighton, MI 65,000 Machining Leased Climate Segment Plainville, GA 313,835 Manufacturing & Distribution Owned Fort Worth, TX 266,485 Manufacturing Owned Cartersville, GA 260,924 Manufacturing Owned Phoenix, AZ 250,250 Manufacturing & Distribution Owned Olive Branch, MS 205,264 Manufacturing & Distribution Owned Tampa, FL 202,614 Manufacturing & Distribution Owned Crawsfordville, IN 153,600 Manufacturing & Distribution Owned Fort Worth, TX 153,374 Manufacturing Owned Vineland, NJ 136,000 Manufacturing & Distribution Owned Sanger, CA 127,390 Manufacturing & Distribution Leased Sacramento, CA 121,240 Manufacturing & Distribution Owned Bluffs, IL 107,000 Manufacturing Owned 11 Location of Facility Building Space (Sq.
ITEM 2. PROPERTIES Information pertaining to our major operating facilities is included below. Except as noted, we own all of the principal properties. In addition, we own and/or lease other properties used as distribution centers and corporate offices. Our plants are in satisfactory condition and are suitable for the purpose for which they were designed and are now being used.
ITEM 2. PROPERTIES Information pertaining to our major operating facilities is included below. Except as noted, we own all of the principal properties. Our plants are in satisfactory condition and are suitable for the purpose for which they were designed and are now being used. Location of Facility Building Space (Sq.
Ft.) Primary Use Owned or Leased Piping Systems Segment Fulton, MS 778,065 Manufacturing, Packaging, & Distribution Owned Bilston, England 402,500 Manufacturing Owned Wynne, AR 400,000 Manufacturing & Distribution Owned Yangju City, Gyeonggi Province, South Korea 343,909 Manufacturing Owned Cedar City, UT 260,000 Manufacturing & Distribution Owned Woodbridge, NJ 247,000 Distribution Leased Olive Branch, MS 205,264 Manufacturing & Distribution Owned London, Ontario, Canada 200,400 Manufacturing Owned Al Hidd, Kingdom of Bahrain 186,162 Manufacturing Owned Wynne, AR 180,000 Distribution Owned Covington, TN 176,000 Manufacturing Owned North Wales, PA 174,000 Manufacturing Owned Monterrey, Mexico 152,000 Manufacturing & Distribution Leased Monterrey, Mexico 132,000 Manufacturing Leased Sanger, CA 127,390 Manufacturing & Distribution Leased Ennis, TX 109,700 Distribution Leased University Park, IL 90,100 Distribution Leased Ansonia, CT 89,396 Manufacturing & Distribution Owned Kansas City, MO 85,000 Distribution Leased St.
Ft.) Primary Use Owned or Leased Piping Systems Segment Fulton, MS 778,065 Manufacturing, Packaging, & Distribution Owned Bilston, England 402,500 Manufacturing Owned Wynne, AR 400,000 Manufacturing & Distribution Owned Yangju City, Gyeonggi Province, South Korea 343,909 Manufacturing Owned Woodbridge, NJ 247,000 Distribution Leased London, Ontario, Canada 200,400 Manufacturing Owned Wynne, AR 180,000 Distribution Owned Covington, TN 159,500 Manufacturing Owned Monterrey, Mexico 152,000 Manufacturing & Distribution Leased Monterrey, Mexico 132,000 Manufacturing Leased Ennis, TX 109,700 Distribution Leased University Park, IL 90,100 Distribution Leased Ansonia, CT 89,396 Manufacturing & Distribution Owned Kansas City, MO 85,000 Distribution Leased St.
Ft.) Primary Use Owned or Leased Cartersville, GA 260,924 Manufacturing Owned Phoenix, AZ 250,250 Manufacturing & Distribution Owned Tampa, FL 202,614 Manufacturing & Distribution Owned Crawsfordville, IN 153,600 Manufacturing & Distribution Owned Fort Worth, TX 153,374 Manufacturing Owned Vineland, NJ 136,000 Manufacturing & Distribution Owned Guadalupe, Mexico 130,110 Manufacturing Leased Sacramento, CA 121,240 Manufacturing & Distribution Owned Bluffs, IL 107,000 Manufacturing Owned Fort Worth, TX 103,125 Manufacturing & Distribution Owned Hickory, NC 100,000 Manufacturing Owned Hartsville, TN 92,000 Manufacturing Owned Houston, TX 72,000 Manufacturing & Distribution Owned Monterrey, MX 65,000 Manufacturing & Distribution Leased Baltimore, MD 62,500 Manufacturing & Distribution Owned Springdale, AR 57,600 Manufacturing & Distribution Owned Hartsville, TN 45,000 Distribution Leased Lawrenceville, GA 42,000 Manufacturing Leased Xinbei District, Changzhou, China 33,940 Manufacturing Leased Kansas City, MO 30,500 Manufacturing Leased Ansonia, CT 24,000 Manufacturing Leased Hartsville, TN 4,000 Warehouse Leased
Ft.) Primary Use Owned or Leased Fort Worth, TX 103,125 Manufacturing & Distribution Owned Hickory, NC 100,000 Manufacturing Owned Hartsville, TN 92,000 Manufacturing Owned Houston, TX 72,000 Manufacturing & Distribution Owned Monterrey, Mexico 65,000 Manufacturing & Distribution Leased Baltimore, MD 62,500 Manufacturing & Distribution Owned Springdale, AR 57,600 Manufacturing & Distribution Owned Hartsville, TN 45,000 Distribution Leased Lawrenceville, GA 42,000 Manufacturing Leased Xinbei District, Changzhou, China 33,940 Manufacturing Leased Kansas City, MO 30,500 Manufacturing Leased Ansonia, CT 24,000 Manufacturing Leased Hartsville, TN 4,000 Distribution Leased

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeFor a description of material pending legal proceedings, see “ Note 14 – Commitments and Contingencies ” in the Notes to Consolidated Financial Statements, which is incorporated herein by reference. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 11 PART II
Biggest changeFor a description of material pending legal proceedings, see “ Note 15 – Commitments and Contingencies ” in the Notes to Consolidated Financial Statements, which is incorporated herein by reference. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 12 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeTotal return values for the Total Return Index, the Building Materials Index and the Company were calculated based on cumulative total return values assuming reinvestment of (i) regular quarterly dividends paid by the Company, (ii) the cash paid by the Company in conjunction with the special dividend and (iii) the proceeds of an assumed sale at par of the Debentures paid by the Company in connection with the special dividend. 2017 2018 2019 2020 2021 2022 Mueller Industries, Inc. 100.00 67.04 92.16 102.81 174.23 178.57 Dow Jones U.S.
Biggest changeBuilding Materials & Fixtures Index (Building Materials Index). Total return values for the Total Return Index, the Building Materials Index and the Company were calculated based on cumulative total return values assuming reinvestment of regular quarterly dividends paid by the Company. 2018 2019 2020 2021 2022 2023 Mueller Industries, Inc. 100.00 137.48 153.37 259.90 266.38 432.45 Dow Jones U.S.
Issuer Purchases of Equity Securities The Company’s Board of Directors has extended, until July 2023, the authorization to repurchase up to 20 million shares of the Company’s common stock through open market transactions or through privately negotiated transactions. The Company may cancel, suspend, or extend the time period for the purchase of shares at any time.
Issuer Purchases of Equity Securities The Company’s Board of Directors has extended, until July 2024, the authorization to repurchase up to 40 million shares of the Company’s common stock through open market transactions or through privately negotiated transactions. The Company may cancel, suspend, or extend the time period for the purchase of shares at any time.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock is listed on the New York Stock Exchange (NYSE) under the symbol “MLI.” As of February 23, 2023, the number of holders of record of Mueller’s common stock was 585.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock is listed on the New York Stock Exchange (NYSE) under the symbol “MLI.” As of February 22, 2024, the number of holders of record of Mueller’s common stock was 550.
During fiscal 2021, we paid a quarterly cash dividend of $0.13 per share of common stock. During fiscal 2022, we paid a quarterly cash dividend of $0.25 per share of common stock. Payment of dividends in the future is dependent upon the Company’s financial condition, cash flows, capital requirements, earnings, and other factors.
During fiscal year 2022, we paid a quarterly cash dividend of $0.125 per share of common stock. During fiscal year 2023, we paid a quarterly cash dividend of $0.15 per share of common stock. Payment of dividends in the future is dependent upon the Company’s financial condition, cash flows, capital requirements, earnings, and other factors.
From its initial authorization in 1999 through December 31, 2022, the Company has repurchased approximately 7.2 million shares under this authorization. Below is a summary of the Company’s stock repurchases for the quarter ended December 31, 2022.
From its initial authorization in 1999 through December 30, 2023, the Company has repurchased approximately 15.0 million shares under this authorization. Below is a summary of the Company’s stock repurchases for the quarter ended December 30, 2023.
(2) Shares available to be purchased under the Company’s 20 million share repurchase authorization until July 2023. The extension of the authorization was announced on October 19, 2022. 12 Company Stock Performance The following graph compares total stockholder return since December 30, 2017 to the Dow Jones U.S. Total Return Index (Total Return Index) and the Dow Jones U.S.
(2) Shares available to be purchased under the Company’s 40 million share repurchase authorization until July 2024. The extension of the authorization was announced on October 25, 2023. 13 Company Stock Performance The following graph compares total stockholder return since December 28, 2018 to th e Dow Jones U.S. Total Return Index (Total Return Index) and the Dow Jones U.S.
(a) Total Number of Shares Purchased (1) (b) Average Price Paid per Share (c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (d) Maximum Number of Shares That May Yet Be Purchased Under the Plans or Programs (2) September 25, 2022 – October 29, 2022 2,098 61.72 — 12,759,795 October 30, 2022 – November 26, 2022 — — — 12,759,795 November 27, 2022 – December 31, 2022 527 61.27 — 12,759,795 Total 2,625 — (1) Includes shares tendered to the Company by holders of stock-based awards in payment of the purchase price and/or withholding taxes upon exercise and/or vesting.
(a) Total Number of Shares Purchased (1) (b) Average Price Paid per Share (c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (d) Maximum Number of Shares That May Yet Be Purchased Under the Plans or Programs (2) October 1, 2023 – October 28, 2023 — $ — — 25,003,808 October 29, 2023 – November 25, 2023 939 41.25 — 25,003,808 November 26, 2023 – December 30, 2023 6,473 43.60 — 25,003,808 Total 7,412 — (1) Includes shares tendered to the Company by holders of stock-based awards in payment of the purchase price and/or withholding taxes upon exercise and/or vesting.
Removed
Building Materials & Fixtures Index (Building Materials Index).
Added
Total Return Index 100.00 131.15 157.90 199.74 160.99 203.70 Dow Jones U.S. Building Materials & Fixtures Index 100.00 146.33 181.57 271.79 197.32 276.98 14 ITEM 6. RESERVED
Removed
Total Return Index 100.00 95.03 124.62 150.05 189.81 152.98 Dow Jones U.S. Building Materials & Fixtures Index 100.00 79.24 115.95 143.87 215.35 156.35 13 ITEM 6. RESERVED

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest changeItem 6. Reserved 14 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 14 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 14 Item 8. Financial Statements and Supplementary Data 14 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 14 Item 9A. Controls and Procedures 15
Biggest changeItem 6. Reserved 15 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 15 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 15 Item 8. Financial Statements and Supplementary Data 15 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 15 Item 9A. Controls and Procedures 16 Item 9B.

Other MLI 10-K year-over-year comparisons