Where Intelligence
Meets Infrastructure
F E B R U A R Y 2 0 1 7
M U E L L E R W A T E R P R O D U C T S . C O M
Gabelli & Company
27th Annual Pump, Valve and Water
Systems Symposium
March 1, 2017
In an effort to provide investors with additional
information regarding the Company's results as
determined by GAAP, the Company also provides
non-GAAP information that management believes is
useful to investors. These non-GAAP measures have
limitations as analytical tools, and securities analysts,
investors and other interested parties should not
consider any of these non-GAAP measures in
isolation or as a substitute for analysis of the
Company's results as reported under GAAP. These
non-GAAP measures may not be comparable to
similarly titled measures used by other companies.
The Company presents adjusted income from continuing
operations, adjusted income from continuing operations per share,
adjusted operating income from continuing operations, adjusted
operating margin, adjusted EBITDA and adjusted EBITDA margin
as performance measures because management uses these
measures in evaluating the Company's underlying performance on
a consistent basis across periods and in making decisions about
operational strategies. Management also believes these measures
are frequently used by securities analysts, investors and other
interested parties in the evaluation of the Company's recurring
performance.
The Company presents net debt and net debt leverage as
performance measures because management uses them in
evaluating its capital management and the investment community
commonly uses them as measures of indebtedness. The
Company presents free cash flow because management believes
it is commonly used by the investment community to measure the
Company's ability to create liquidity.
The calculations of these non-GAAP measures and reconciliations
to GAAP results are included as an attachment to this presentation
and have been posted online at www.muellerwaterproducts.com.
NON-GAAP Financial Measures
M U E L L E R W A T E R P R O D U C T S . C O M 2M A R C H 2 0 1 7
This presentation contains certain statements that may be deemed “forward-looking statements” within the meaning of the
Private Securities Litigation Reform Act of 1995. All statements that address activities, events or developments that we intend,
expect, plan, project, believe or anticipate, should, can or may occur in the future are forward-looking statements.
Forward-looking statements are based on certain assumptions and assessments made by us in light of our experience and
perception of historical trends, current conditions and expected future developments. Examples of forward-looking statements
include, but are not limited to, statements we make regarding our expectations, beliefs, future plans and strategies, and
anticipated developments concerning our industry, business, end markets, operations and financial performance and condition.
Actual results and the timing of events may differ materially from those contemplated by the forward-looking statements due to a
number of factors, including regional, national or global political, economic, business, competitive, market and regulatory
conditions and the other factors that are described in the section entitled “RISK FACTORS” in Item 1A of our most recently filed
Annual Report on Form 10-K as updated from time to time in our filings with the Securities and Exchange Commission. Undue
reliance should not be placed on any forward-looking statements. We do not have any intention or obligation to update forward-
looking statements, except as required by law.
Forward-Looking Statements
M U E L L E R W A T E R P R O D U C T S . C O M 3M A R C H 2 0 1 7
Introduction
M U E L L E R W A T E R P R O D U C T S . C O M 4M A R C H 2 0 1 7
Repositioned Mueller Water Products as a higher-margin, pure-play water
infrastructure company
Divested Company’s Anvil division (non-core asset) for net proceeds of
approximately $250 million
Focused on further developing profitable growth channels through:
Manufacturing excellence
Organic growth
Acquisitions
Pure-play water
infrastructure company
with attractive core
markets, industry-leading
margins, strong balance
sheet and proven
leadership team –
focused on growth.
Investment Highlights
• Industry-leading adjusted
operating margins
• Improved results driven by
strong incremental operating
leverage as end markets grow
• Increased investment and
improved operating efficiencies
are needed in water
infrastructure
• Leading brands in water
infrastructure and one of the
largest installed bases of iron
gate valves and fire hydrants in
the U.S.
• Transformed Company by
divesting Anvil, acquiring and
developing new technologies,
and improving processes
• Strengthened Company’s
balance sheet through Anvil
sale, debt restructuring, debt
pay down and ongoing focus
on free cash flow
• Leveraging Mueller brand and
relationships to expand
intelligent water technology
offerings
M U E L L E R W A T E R P R O D U C T S . C O M 5M A R C H 2 0 1 7
Core Business & Attractive End Markets
M U E L L E R W A T E R P R O D U C T S . C O M
FY2016 NET SALES: $801 MILLION
PORTFOLIO
Fire Hydrants Valves Metering Systems
Leak Detection and
Pipe Condition
Assessment
60%
Repair and replacement
of municipal water
distribution and
treatment systems
30%
Residential
construction
10%
Natural gas
utilities
100%
Municipal spending
6M A R C H 2 0 1 7
Brass
Business Performance: Long-Term Targets
M U E L L E R W A T E R P R O D U C T S . C O M
TOP-LINE GROWTH
• Mueller Co. growth >5%
• Mueller Technologies >15%
EARNINGS LEVERAGE
• Mueller Co. adjusted EBITDA margins >30%
• Mueller Technologies adjusted EBITDA margins 20%
OTHER
• Reduce working capital as a percentage of net sales
7M A R C H 2 0 1 7
Broad Product Portfolio Across Key Markets
M U E L L E R W A T E R P R O D U C T S . C O M 8
Note: All amounts shown are LTM ended December 31, 2016
(1) Mueller Co. adjusted operating income and adjusted EBITDA exclude other charges
totaling $3.0 million. Mueller Technologies adjusted operating loss and adjusted EBITDA
exclude other charges totaling $0.9 million.
Net Sales
Adjusted Operating
Income(Loss)(1)
Depreciation &
Amortization
Adjusted EBITDA(1)
Product and Services
Portfolio
$ 717.3
164.5
34.8
199.3
Fire Hydrants
Iron Gate Valves
Butterfly, Ball & Plug
Valves
Metering Systems
Leak Detection and
Pipe Condition
Assessment
(4.2)
4.9
(9.1)
$ 87.4
$ in millions
159.9
40.2
119.7
$ 804.7
Water Infrastructure
M A R C H 2 0 1 7
Intelligent Water Technology™
Mueller Water Products provides
products and offers services
used in the transmission,
distribution and measurement of
safe, clean drinking water and in
water treatment facilities. These
products and services help
utilities actively diagnose,
monitor and control the delivery
of safe, clean drinking water.
M U E L L E R W A T E R P R O D U C T S . C O M 9M A R C H 2 0 1 7
Water Infrastructure Landscape
M U E L L E R W A T E R P R O D U C T S . C O M 1 0
#1 PRODUCTPOSITION #1 PRODUCTPOSITION #1
PRODUCT
POSITION #2 PRODUCTPOSITION
Company estimates based on internal analysis and information from trade associations and distributor networks, where available.
M A R C H 2 0 1 7
Near-Term Tenets
Manufacturing / Operational
Excellence
Increase equipment efficiency
Capital expenditures with shorter-term
payback
Drive toward continuous margin
expansion
M U E L L E R W A T E R P R O D U C T S . C O M 1 1
Organic Growth /
Reinvestment
End market
New product development
Enhanced products
Acquisitions
Water industry
Identify areas of interest
Pursue acquisition opportunities
– Channel
– Geography
– Technology
– Breadth
M A R C H 2 0 1 7
Why Invest in MWA
M U E L L E R W A T E R P R O D U C T S . C O M 1 2
Water industry has fundamentally strong
long-term dynamics
• Driven by need for new and upgraded
infrastructure
• Limited number of suppliers to end markets
• Increasing public awareness of the importance of
water infrastructure
Strong operating leverage as end markets grow
• Recovery of residential construction market
• Increased municipal spending
• Operational excellence initiatives
Strong competitive position
• Leading brand positions with large installed base
• Leading municipal specification positions
• Comprehensive distribution network and strong
end-user relationships
• Low-cost manufacturing operations using lost
foam process for valves and hydrants
• Proven leadership team
Leveraging strengths with emerging trends
• Intelligent Water TechnologyTM solutions
• Proprietary fixed leak detection offerings - both
domestically and internationally
• Smart metering
• Strategic acquisitions / partnerships
M A R C H 2 0 1 7
Significant
Market
Opportunities
Market Driver: Housing Starts
M U E L L E R W A T E R P R O D U C T S . C O M 1 4
Source: U.S. Census Bureau
Forecast: Blue Chip Economic Indicators, December 2016
Homebuilders’ confidence is one driver of housing starts, and confidence could increase due to
improving job growth in a key demographic for household formation: Millennials
NAHB Housing Market Index - National (1987 – December 2016)
Seasonally Adjusted Annualized
Historical Housing Starts (1959 –2016)
Seasonally Adjusted Annualized
Rates-Units in 000’s
Source: NAHB, December 2016
M A R C H 2 0 1 7
Bottom of prior
cycle
1959 to 2015:
Average 1,443
April 2009 – lowest
starts (499) since
Census Bureau
began keeping record
in 1959
2017 Blue Chip
Consensus
forecast of 1,260
The Market Opportunity is Significant & Growing
M U E L L E R W A T E R P R O D U C T S . C O M 1 5
Repair & Replacement Market
(1) ASCE: 2013 Report Card for America’s Infrastructure
(2) The EPA Clean Water and Drinking Water Infrastructure Gap Analysis 2002
(3) EPA 2013 Drinking Water Needs Survey and Assessment
Future Drinking Water Infrastructure
Expenditure Needs3
• Valves and fire hydrants are typically replaced at the same
time as pipes
• ASCE graded drinking water infrastructure a D(1)
• At least 40 cities under consent decrees: Atlanta, Baltimore, Washington,
D.C., Suburban Washington, D.C. (WSSC), New Orleans
M A R C H 2 0 1 7
(2)
Funding Water Infrastructure Repair
M U E L L E R W A T E R P R O D U C T S . C O M 1 6
Historical Water Rates Compared to
Other Utilities(1)
CPI Utilities
(NSA 1982-1984 = 100)
Utility Sources of Funding
• Majority of utilities have service connection fees and/or
capital recovery charges, with median fees of about $5,800(3)
• CPI for water and sewerage maintenance increased
4.2% for 12 months ended December 2016 (1)
• 90% funded at local level(4)
• Drinking Water State Revolving Fund: $800 million in FY
2016
• WIFIA: $17 million with the economic impact of $2 billion
M A R C H 2 0 1 7
(1) Bureau of Labor Statistics
(2) 2016 Strategic Directions: U.S. Water Industry – Black & Veatch
(3) American Water Works Association 2014 Water and Wastewater Rate Survey
(4) EPA Clean Water and Drinking Water Infrastructure
Bringing Intelligence to Water Infrastructure
M U E L L E R W A T E R P R O D U C T S . C O M 1 7
Water Conservation Customer Service Focus
• Awareness/education
• Ongoing monitoring
• Sustainability
• 22.5% of U.S. experiencing
drought conditions(1)
• 240,000 water main breaks
per year(2)
Non-Revenue Water
• Up to 30% of treated water is
lost or unaccounted for in the
water system(3)
• Growing number of states
requiring water loss audits(4)
(1) U.S. Drought Monitor February 2017
(2) EPA Aging Water Infrastructure Research Program
(3) Navigant Research
(4) National Resource Defense Council
M A R C H 2 0 1 7
“Smart metering is a highly successful way of accurately
identifying water loss.” – Black & Veatch 2016 Strategic Directions
in the U.S. Water Industry
Bringing Intelligence to Water Infrastructure
M U E L L E R W A T E R P R O D U C T S . C O M 1 8
• Longer-range AMI systems
• Remote Disconnect
Meter (RDM)
• Leak detection
• Consumer portal
A smart utility is a subset of a smart city and the
Mi.Net System is the backbone and platform for a
smart water network.
• Fixed transmission and distribution
main leak detection / monitoring
• Condition assessment
Smart Metering Leak Detection and Pipe
Condition Assessment
M A R C H 2 0 1 7
Remote Disconnect Meter
Mueller Systems Network Operations Center
Using Existing Infrastructure
Providing data analytics to manage water assets
Where Intelligence Meets Infrastructure
M U E L L E R W A T E R P R O D U C T S . C O M 1 9M A R C H 2 0 1 7
LEAK DETECTION
• Identifying leaks on
transmission and
distribution mains
FIRE PROTECTION
• Dependable fire protection
that stands the test of time
ENSURING RELIABILITY
• Industry-leading 350 psi
resilient wedge gate valve
• All-ductile iron
COMMUNICATING
CRITICAL DATA
• Monitor water usage
• Remotely manage water
system
• Enhance customer service
PRESSURE
MONITORING
• Active monitoring of water
distribution system pressure
Your Infrastructure
is Speaking.
Are You Listening?
Actions &
Business
Results
Management Actions / Initiatives
M U E L L E R W A T E R P R O D U C T S . C O M 2 1
• Divested Anvil and U.S. Pipe
• Implemented Lean Six Sigma
and other manufacturing
improvements:
• Increased production
capacity without footprint
expansion
• Lowered labor costs
• Reduced manufacturing footprint
• Generated free cash flow of
approximately $80 million in
FY2016– history of strong
free cash flow generation
• Reduced debt by more than
$600 million from September
30, 2008 through December
31, 2016
Reduce costs and improve
operating leverage
Manage working capital and
capital expenditures to
generate free cash flow
Pursue strategic growth
opportunities by leveraging the
Mueller brand
• Acquired leak detection and pipe
condition assessment technologies
• Developed fixed leak detection
technology capabilities
• Acquired and invested in AMI
technology
• Enhanced Smart Water offering with
remote disconnect meter, integrated
leak detection and longer-range
communications capabilities
M A R C H 2 0 1 7
Q1 2017 CONSOLIDATED NON-GAAP RESULTS
M U E L L E R W A T E R P R O D U C T S . C O M 2 2M A R C H 2 0 1 7
■ We delivered a solid quarter with 3 percent
overall top line growth and 25 percent
adjusted operating income from continuing
operations improvement
■ Adjusted operating income increased $3.0
million to $15.2 million compared with $12.2
million last year
■ Mueller Co. improved its operating
performance by $2.2 million, or 9.2 percent,
and Mueller Technologies improved by $1.1
million, or about 33 percent
■ Adjusted EBITDA increased to $25.5 million
compared with $21.8 million in the prior year
■ Adjusted income from continuing operations
per share for the quarter was $0.04 versus
$0.03 a year ago
First Quarter 2017 2016
Net sales $ 167.2 $ 163.1
Adj. operating income from
continuing operations $ 15.2 $ 12.2
Adj. operating margin 9.1 % 7.5%
Adj. income from cont. ops. per share $ 0.04 $ 0.03
Adj. EBITDA $ 25.5 $ 21.8
Adj. EBITDA margin 15.3 % 13.4%
1Q17 results exclude other charges totaling $1.3 million, $0.9 million net of tax
1Q16 results exclude other charges totaling $0.8 million, $0.6 million net of tax
$ in millions except per share amounts
Q1 2017 ended December 31, 2016
Debt Structure
M U E L L E R W A T E R P R O D U C T S . C O M 2 3
■ Net debt near zero after the sale of Anvil, net debt leverage
down from a peak of more than 6x
■ No significant required principal payments on outstanding debt
before November 2021
■ No financial maintenance covenants with excess availability at
the greater of $17.5 million or 10.0% of facility amount
• $91.5 million of excess availability as of December 31, 2016
(excluding Anvil)
Debt Maturity (at 12/31/2016)
$ in millions
Debt Structure at December 31, 2016
$225 million
ABL Agreement
Expires July 2021
$500 million
Term Loan B
LIBOR* + 250 bps
due November 2021
* Subject to a floor of 75 bps
M A R C H 2 0 1 7
Capital Management
M U E L L E R W A T E R P R O D U C T S . C O M 2 4M A R C H
■ Acquisitions
• Singer Valve
■ Share Repurchases
• Authorized to repurchase up to $250
million
• Announced $50 million accelerated
share repurchase program on
February 3, 2017
■ Dividends
• Increased quarterly dividend 33% to $0.04 per
share
■ Growth Opportunities
■ Debt Reduction
• Near zero net debt
Supplemental
Data
SEGMENT RESULTS AND RECONCILIATION
OF GAAP TO NON-GAAP PERFORMANCE MEASURES
M U E L L E R W A T E R P R O D U C T S . C O M 2 6M A R C H 2 0 1 7
Quarter ended December 31, 2016
Mueller Co.
Mueller
Technologies Corporate Consolidated
(dollars in millions, except per share amounts)
Net sales $ 146.3 $ 20.9 $ — $ 167.2
Gross profit $ 47.5 $ 4.2 $ — $ 51.7
Selling, general and administrative expenses 21.3 6.4 8.8 36.5
Other charges 0.1 — 1.2 1.3
Operating income (loss) from continuing operations $ 26.1 $ (2.2) $ (10.0) 13.9
Interest expense, net 6.4
Income tax expense 2.1
Income from continuing operations $ 5.4
Income from continuing operations per diluted share $ 0.03
Capital expenditures $ 3.0 $ 1.1 $ 0.1 $ 4.2
Operating margin 17.8% (10.5)% 8.3%
Reconciliation of Non-GAAP performance measures to GAAP performance
measures:
Income from continuing operations $ 5.4
Other charges 1.3
Income tax benefit of adjusting items (0.4)
Adjusted income from continuing operations $ 6.3
Weighted average diluted shares outstanding 164.6
Adjusted income from continuing operations per share $ 0.04
SEGMENT RESULTS AND RECONCILIATION
OF GAAP TO NON-GAAP PERFORMANCE MEASURES
M U E L L E R W A T E R P R O D U C T S . C O M 2 7M A R C H 2 0 1 7
Quarter ended December 31, 2016
Mueller Co.
Mueller
Technologies Corporate
Consolidate
d
(dollars in millions, except per share amounts)
Net income $ 6.7
Less income from discontinued operations (1.3)
Interest expense, net (1) 6.4
Income tax expense (1) 2.1
Operating income (loss) from continuing operations $ 26.1 $ (2.2) $ (10.0) 13.9
Other charges 0.1 — 1.2 1.3
Adjusted operating income (loss) from continuing operations 26.2 (2.2) (8.8) 15.2
Depreciation and amortization 9.0 1.2 0.1 10.3
Adjusted EBITDA $ 35.2 $ (1.0) $ (8.7) $ 25.5
Adjusted operating margin 17.9% (10.5)% 9.1%
Adjusted EBITDA margin 24.1% (4.8)% 15.3%
Adjusted EBITDA $ 35.2 $ (1.0) $ (8.7) $ 25.5
Three prior quarters' adjusted EBITDA 164.1 (3.2) (26.5) 134.4
Trailing twelve months' adjusted EBITDA $ 199.3 $ (4.2) $ (35.2) $ 159.9
Reconciliation of net debt to total debt (end of period):
Current portion of long-term debt $ 5.6
Long-term debt 478.0
Total debt 483.6
Less cash and cash equivalents 172.3
Net debt $ 311.3
Net debt leverage (net debt divided by trailing twelve months' adjusted
EBITDA) 1.9x
Reconciliation of free cash flow to net cash used in operating activities
of continuing operations:
Net cash used in operating activities of continuing operations $ (19.9)
Less capital expenditures (4.2)
Free cash flow $ (24.1)
SEGMENT RESULTS AND RECONCILIATION
OF GAAP TO NON-GAAP PERFORMANCE MEASURES
M U E L L E R W A T E R P R O D U C T S . C O M 2 8M A R C H 2 0 1 7
Quarter ended December 31, 2015
Mueller Co.
Mueller
Technologies Corporate Consolidated
(dollars in millions, except per share amounts)
Net sales $ 144.7 $ 18.4 $ — $ 163.1
Gross profit $ 44.0 $ 3.6 $ — $ 47.6
Selling, general and administrative expenses 20.0 6.9 8.5 35.4
Other charges 0.2 0.5 0.1 0.8
Operating income (loss) $ 23.8 $ (3.8) $ (8.6) 11.4
Interest expense, net 6.1
Income tax expense 1.3
Income from continuing operations $ 4.0
Income from continuing operations per diluted share $ 0.02
Capital expenditures $ 3.6 $ 1.0 $ 0.1 $ 4.7
Operating margin 16.4% (20.7)% 7.0%
Reconciliation of Non-GAAP performance measures to GAAP performance
measures:
Income from continuing operations $ 4.0
Other charges 0.8
Income tax benefit of adjusting items (0.2)
Adjusted income from continuing operations $ 4.6
Weighted average diluted shares outstanding 163.2
Adjusted income from continuing operations per share $ 0.03
SEGMENT RESULTS AND RECONCILIATION
OF GAAP TO NON-GAAP PERFORMANCE MEASURES
M U E L L E R W A T E R P R O D U C T S . C O M 2 9M A R C H 2 0 1 7
Quarter ended December 31, 2015
Mueller Co.
Mueller
Technologies Corporate
Consolidate
d
(dollars in millions, except per share amounts)
Net income $ 6.2
Less income from discontinued operations (2.2)
Interest expense, net (1) 6.1
Income tax expense (1) 1.3
Operating income (loss) from continuing operations $ 23.8 $ (3.8) $ (8.6) 11.4
Other charges 0.2 0.5 0.1 0.8
Adjusted operating income (loss) from continuing operations 24.0 (3.3) (8.5) 12.2
Depreciation and amortization 8.4 1.1 0.1 9.6
Adjusted EBITDA $ 32.4 $ (2.2) $ (8.4) $ 21.8
Adjusted operating margin 16.6% (17.9)% 7.5%
Adjusted EBITDA margin 22.4% (12.0)% 13.4%
(1) We do not allocate interest or income taxes to our segments.
Adjusted EBITDA $ 32.4 $ (2.2) $ (8.4) $ 21.8
Three prior quarters' adjusted EBITDA 153.9 (6.6) (23.0) 124.3
Trailing twelve months' adjusted EBITDA $ 186.3 $ (8.8) $ (31.4) $ 146.1
Reconciliation of net debt to total debt (end of period):
Current portion of long-term debt $ 5.7
Long-term debt 481.5
Total debt 487.2
Less cash and cash equivalents 104.5
Net debt $ 382.7
Net debt leverage (net debt divided by trailing twelve months' adjusted
EBITDA) 2.6x
Reconciliation of free cash flow to net cash provided by operating
activities of continuing operations:
Net cash used in operating activities of continuing operations $ (8.3)
Less capital expenditures (4.7)
Free cash flow $ (13.0)
3 0
HISTORY OF STRONG FINANCIAL PERFORMANCE
Net Sales
Adjusted
EBITDA(1) and
Adjusted EBITDA
Margin
(1) Mueller Co. adjusted EBITDA excludes purchase accounting adjustments of $52.9 in 2006, goodwill and
other impairment charges of $818.7 in 2009 and other charges of $0.1 in 2010, $1.4 in 2011, $2.5 in 2012, $1.5
in 2013, $2.1 in 2014, $8.4 in 2015 and $3.0 in 2016.
Note: Mueller Co.
2002-2012 net sales
and adjusted EBITDA
include Mueller
Technologies in
these years
($ in millions)
$5
09
$5
36 $
61
8
$6
64
$8
04
$7
56
$7
18
$5
47 $6
13
$6
06 $6
52
$6
32 $6
79
$7
02
$7
16
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
$131 $139
$167
$190
$248
$207
$179
$101
$131
$103 $106
$140
$167
$184 $197
25.7% 25.9% 27.0%
28.6% 30.8% 27.3%
24.9%
18.5%
21.3%
17.0% 16.2%
22.2%
24.5%
26.2% 27.5%
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
Fiscal year ended September 30
M U E L L E R W A T E R P R O D U C T S . C O M M A R C H 2 0 1 7
Questions