10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 27, 2014 Commission file number 1–6770

MUELLER INDUSTRIES, INC.

(Exact name of registrant as specified in its charter)

Delaware	25-0790410
(State or other jurisdiction	(I.R.S. Employer
of incorporation or organization)	Identification No.)

8285 Tournament Drive, Suite 150
Memphis, Tennessee	38125
(Address of principal executive offices)	(Zip Code)

(901) 753-3200

(Registrant’s telephone number, including area code)

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

 Yes x Noo

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).   Yes x Noo

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer”, “accelerated filer”, and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer   x	Accelerated filer   o
Non-accelerated filer   o	Smaller reporting company   o

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes   o     No   x

The number of shares of the Registrant’s common stock outstanding as of October 22, 2014, was 56,890,102.

MUELLER INDUSTRIES, INC.

FORM 10-Q

For the Quarterly Period Ended September 27, 2014

__________________________

As used in this report, the terms “Company,” “Mueller,” and “Registrant” mean Mueller Industries, Inc. and its consolidated subsidiaries taken as a whole, unless the context indicates otherwise.

__________________________

INDEX

		Page Number
Part I.  Financial Information
	Item 1.   – Financial Statements (Unaudited)
	a.)  Condensed Consolidated Statements of Income	3
	b.)  Condensed Consolidated Statements of Comprehensive Income	4
	c.)  Condensed Consolidated Balance Sheets	5
	d.)  Condensed Consolidated Statements of Cash Flows	6
	e.)  Notes to Condensed Consolidated Financial Statements	7
	Item 2.   – Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
	Item 3.   – Quantitative and Qualitative Disclosures About Market Risk	26
	Item 4.   – Controls and Procedures	28
Part II.  Other Information
	Item 1.   – Legal Proceedings	28
	Item 1A – Risk Factors	30
	Item 2.   – Unregistered Sales of Equity Securities and Use of Proceeds	30
	Item 6.   – Exhibits	31
Signatures		32

2

PART I. FINANCIAL INFORMATION

Item 1.  Financial Statements

MUELLER INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

	For the Quarter Ended						For the Nine Months Ended
(In thousands, except per share data)	September 27, 2014			September 28, 2013			September 27, 2014			September 28, 2013
Net sales	$	602,820		$	528,854		$	1,826,885		$	1,670,826
Cost of goods sold		521,278			456,302			1,574,830			1,440,277
Depreciation and amortization		8,952			7,882			25,651			24,364
Selling, general, and administrative expense		34,864			32,921			102,167			99,078
Gain on sale of plastic fittings manufacturing assets		—			(39,765	)		—			(39,765	)
Impairment charges		—			4,304			—			4,304
Insurance settlements		—			—			—			(106,332	)
Operating income		37,726			67,210			124,237			248,900
Interest expense		(1,430	)		(1,243	)		(3,913	)		(2,940	)
Other income, net		225			842			440			4,324
Income before income taxes		36,521			66,809			120,764			250,284
Income tax expense		(12,199	)		(26,816	)		(36,279	)		(92,015	)
Consolidated net income		24,322			39,993			84,485			158,269
Net income attributable to noncontrolling interest		(499	)		(129	)		(911	)		(1,053	)
Net income attributable to Mueller Industries, Inc.	$	23,823		$	39,864		$	83,574		$	157,216
Weighted average shares for basic earnings per share(1)		56,107			55,787			55,999			55,704
Effect of dilutive stock-based awards(1)		637			723			746			737
Adjusted weighted average shares for diluted earnings per share(1)		56,744			56,510			56,745			56,441
Basic earnings per share(1)	$	0.42		$	0.71		$	1.49		$	2.82
Diluted earnings per share(1)	$	0.42		$	0.71		$	1.47		$	2.79
Dividends per share(1)	$	0.075		$	0.0625		$	0.225		$	0.1875
See accompanying notes to condensed consolidated financial statements.

_______________________________________ 

1 Adjusted retroactively to reflect the two-for-one stock split that occurred on March 14, 2014.

3

MUELLER INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

	For the Quarter Ended								For the Nine Months Ended
(In thousands)	September 27, 2014				September 28, 2013				September 27, 2014				September 28, 2013
Consolidated net income	$	24,322			$	39,993			$	84,485			$	158,269
Other comprehensive (loss) income, net of tax:
Foreign currency translation		(6,661	)			6,738				(3,698	)			770
Net change with respect to derivative instruments and hedging activities		(174	)	(2)		531		(3)		(1,650	)	(4)		1,005		(5)
Net actuarial loss on pension and postretirement obligations		646		(6)		(186	)	(7)		490		(8)		1,975		(9)
Other, net		(1	)			22				7				105
Total other comprehensive (loss) income		(6,190	)			7,105				(4,851	)			3,855
Consolidated comprehensive income		18,132				47,098				79,634				162,124
Comprehensive income attributable to noncontrolling interest		(889	)			(186	)			(548	)			(1,613	)
Comprehensive income attributable to Mueller Industries, Inc.	$	17,243			$	46,912			$	79,086			$	160,511
See accompanying notes to condensed consolidated financial statements.

_______________________________________ 

2 Net of tax of $42

3 Net of tax of $(280)

4 Net of tax of $907

5 Net of tax of $(607)

6 Net of tax of $(232)

7 Net of tax of $(3)

8 Net of tax of $(109)

9 Net of tax of $(963)

4

MUELLER INDUSTRIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands, except share data)	September 27, 2014			December 28, 2013
Assets
Current assets:
Cash and cash equivalents	$	259,858		$	311,800
Accounts receivable, less allowance for doubtful accounts of $981 in 2014 and $2,391 in 2013		332,508			271,847
Inventories		282,493			251,716
Current deferred income taxes		8,963			8,106
Other current assets		40,356			31,248
Total current assets		924,178			874,717
Property, plant, and equipment, net		246,169			244,457
Goodwill		103,242			94,357
Other assets		54,147			34,236
Total assets	$	1,327,736		$	1,247,767
Liabilities
Current liabilities:
Current portion of debt	$	37,207		$	29,083
Accounts payable		92,342			80,897
Accrued wages and other employee costs		34,577			37,109
Other current liabilities		69,197			72,167
Total current liabilities		233,323			219,256
Long-term debt, less current portion		205,500			206,250
Pension liabilities		9,299			10,645
Postretirement benefits other than pensions		16,561			16,781
Environmental reserves		21,557			22,144
Deferred income taxes		33,342			35,975
Other noncurrent liabilities		581			849
Total liabilities		520,163			511,900
Equity
Mueller Industries, Inc. stockholders’ equity:
Preferred stock - $1.00 par value; shares authorized 5,000,000; none outstanding		—			—
Common stock - $.01 par value; shares authorized 100,000,000; issued 80,183,004; outstanding 56,885,661 in 2014 and 56,604,674(10) in 2013		802			401
Additional paid-in capital		267,361			267,142
Retained earnings		979,079			908,274
Accumulated other comprehensive loss		(15,309	)		(10,819	)
Treasury common stock, at cost		(457,371	)		(461,593	)
Total Mueller Industries, Inc. stockholders’ equity		774,562			703,405
Noncontrolling interest		33,011			32,462
Total equity		807,573			735,867
Commitments and contingencies		—			—
Total liabilities and equity	$	1,327,736		$	1,247,767
See accompanying notes to condensed consolidated financial statements.

_______________________________________ 

10 Adjusted retroactively to reflect the two-for-one stock split that occurred on March 14, 2014.

5

MUELLER INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	For the Nine Months Ended
(In thousands)	September 27, 2014			September 28, 2013
Cash flows from operating activities
Consolidated net income	$	84,485			$	158,269
Reconciliation of consolidated net income to net cash provided by operating activities:
Depreciation and amortization		25,888				24,583
Stock-based compensation expense		4,957				4,560
Insurance settlements		—				(106,332	)
Insurance proceeds – noncapital related		—				32,395
Gain on sale of plastic fittings manufacturing assets		—				(39,765	)
Gain on disposal of properties		(1,146	)			(3,316	)
Impairment charges		—				4,304
Deferred income taxes		(6,908	)			14,152
Income tax benefit from exercise of stock options		(829	)			(670	)
Changes in assets and liabilities, net of business acquired:
Receivables		(62,854	)			(38,370	)
Inventories		(14,868	)			(4,566	)
Other assets		(15,272	)			4,886
Current liabilities		(8,675	)			19,649
Other liabilities		(797	)			(297	)
Other, net		223				508
Net cash provided by operating activities		4,204				69,990
Cash flows from investing activities
Capital expenditures		(28,406	)			(33,402	)
Acquisition of business		(30,137	)			—
Insurance proceeds for property and equipment		—				29,910
Net withdrawals from (deposits into) restricted cash balances		2,507				(2,473	)
Proceeds from sales of assets		4,920				64,966
Net cash (used in) provided by investing activities		(51,116	)			59,001
Cash flows from financing activities
Dividends paid to stockholders of Mueller Industries, Inc.		(12,606	)			(10,449	)
Debt issuance cost		—				(50	)
Issuance of long-term debt, net		12,008				—
(Repayment) issuance of debt by joint venture, net		(3,170	)			4,940
Net cash used to settle stock-based awards		(887	)			(337	)
Repurchase of common stock		(58	)			—
Repayments of long-term debt		(800	)			(750	)
Income tax benefit from exercise of stock options		829				670
Net cash used in financing activities		(4,684	)			(5,976	)
Effect of exchange rate changes on cash		(346	)			228
(Decrease) increase in cash and cash equivalents		(51,942	)			123,243
Cash and cash equivalents at the beginning of the period		311,800				198,934
Cash and cash equivalents at the end of the period	$	259,858			$	322,177
See accompanying notes to condensed consolidated financial statements.

6

MUELLER INDUSTRIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

General

Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted.  Results of operations for the interim periods presented are not necessarily indicative of results which may be expected for any other interim period or for the year as a whole.  This Quarterly Report on Form 10-Q should be read in conjunction with the Company’s Annual Report on Form 10-K, including the annual financial statements incorporated therein.

The accompanying unaudited interim financial statements include all normal recurring adjustments which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented.

Note 1 – Earnings per Common Share

Basic per share amounts have been computed based on the average number of common shares outstanding.  Diluted per share amounts reflect the increase in average common shares outstanding that would result from the assumed exercise of outstanding stock options and vesting of restricted stock awards, computed using the treasury stock method.  Approximately 180 thousand stock based awards were excluded from the computation of diluted earnings per share for the quarter ended September 27, 2014 because they were antidilutive.

On February 21, 2014, the Company’s Board of Directors announced a two-for-one stock split of its common stock effected in the form of a stock dividend of one share for each outstanding share.  The record date for the stock split was March 14, 2014, and the additional shares were distributed on March 28, 2014.  Accordingly, all references to share and per share amounts presented in the Condensed Consolidated Financial Statements and this Quarterly Report on Form 10-Q have been adjusted retroactively to reflect the stock split.

Note 2 – Commitments and Contingencies

The Company is involved in certain litigation as a result of claims that arose in the ordinary course of business, which management believes will not have a material adverse effect on the Company’s financial position, results of operations, or cash flows.  The Company may also realize the benefit of certain legal claims and litigation in the future; these gain contingencies are not recognized in the Condensed Consolidated Financial Statements.

U.K. Actions Relating to the European Commission’s 2004 Copper Tube Decision and 2006 Copper Fittings Decision

In the Competition Appeal Tribunal (the CAT) in the United Kingdom, IMI plc and IMI Kynoch Limited (IMI) and Boliden AB (Boliden) were served with claims by 21 claimants, all companies within the Travis Perkins Group (TP and the TP Claimants) regarding copper tube. The TP Claimants sought follow-on damages arising out of conduct described in the European Commission’s September 3, 2004, decision regarding copper tube.  The claims purported to arise from the findings of the European Commission as set forth in that decision (Copper Tube Decision).  IMI and Boliden commenced legal proceedings against Mueller Industries, Inc., WTC Holding Company, Inc., DENO Holding Company, Inc., Mueller Europe, Limited, and DENO Acquisition EURL (the five Mueller entities), and in those proceedings claimed  a contribution for any follow-on damages.

In the High Court in the United Kingdom, IMI was also served with claims by 21 TP Claimants regarding copper fittings.  The TP Claimants are seeking follow-on damages arising out of conduct described in the European Commission’s September 20, 2006, decision regarding copper fittings.  The claims similarly purport to arise from the findings of the European Commission as set forth in that decision.  IMI commenced legal proceedings against Mueller Industries, Inc., Mueller Europe Limited, and WTC Holding Company, Inc. (the three Mueller entities), and in those proceedings claimed a contribution for any follow-on damages.

7

 As to the claims arising from the Copper Tube Decision brought in the CAT, following the CAT’s grant of approval, the case was transferred to the High Court. Mueller’s defense in response to the contribution claims brought by IMI and Boliden was served on March 15, 2013.  During the second quarter of 2014, a settlement was reached in respect of the claims against Mueller and the High Court has dismissed the claims against Mueller. The total payment made by Mueller pursuant to the settlement did not have a material impact on the Company’s financial position, results of operations, or cash flows.

As to the claims arising from the Copper Fittings Decision, Mueller's defense in response to the contribution claims brought by IMI was served on May 30, 2014.  During the third quarter of 2014, a settlement was reached in respect of the claims against Mueller and the High Court has dismissed the claims against Mueller.  The total payment made by Mueller pursuant to the settlement did not have a material impact on the Company’s financial position, results of operations, or cash flows.

Environmental

Lead Refinery Site

U.S.S. Lead Refinery, Inc. (Lead Refinery), a non-operating wholly owned subsidiary of Mining Remedial Recovery Company, has conducted corrective action and interim remedial activities and studies (collectively, Site Activities) at Lead Refinery’s East Chicago, Indiana site pursuant to the Resource Conservation and Recovery Act.  Site Activities, which began in December 1996, have been substantially concluded.  Lead Refinery is required to perform monitoring and maintenance activities with respect to Site 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 $0.1 million annually in 2013, 2012 and 2011 with respect to this site.  Approximate costs to comply with the post-closure permit, including associated general and administrative costs, are between $2.1 million and $3.9 million over the next 20 years.

On April 9, 2009, pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), the Environmental Protection Agency (EPA) added the Lead Refinery site, and properties surrounding the Lead Refinery site, to the National Priorities List (NPL).  The NPL is a list of priority sites where the EPA has determined that there has been a release or threatened release of hazardous substances that warrant investigation and, if appropriate, remedial action.  The NPL does not assign liability to any party including the owner or operator of a property placed on the NPL.  The placement of a site on the NPL does not necessarily mean that remedial action must be taken.  On July 17, 2009, Lead Refinery received a written notice from the EPA that the agency is of the view that Lead Refinery may be a potentially responsible party (PRP) under CERCLA in connection with the release or threat of release of hazardous substances including lead into properties surrounding the Lead Refinery site.  The EPA has identified two other PRPs in connection with the release or threat of release of hazardous substances into properties surrounding the Lead Refinery site. PRPs under CERCLA include current and former owners and operators of a site, persons who arranged for disposal or treatment of hazardous substances at a site, or persons who accepted hazardous substances for transport to a site.  In November 2012, the EPA adopted a remedy in connection with properties surrounding the Lead Refinery site.  The EPA has estimated that the cost to implement the November 2012 remedy will be $30.0 million.  In September 2014, the EPA announced that it had entered into a settlement with the two other PRPs whereby they will pay approximately $26.0 million to fund the cleanup of approximately 300 properties surrounding the Lead Refinery site.

The Company monitors EPA press releases and periodically communicates with the EPA to inquire of the status of the investigation and cleanup of the Lead Refinery site.  As of September 27, 2014, the EPA has not conducted an investigation of the Lead Refinery site pursuant to CERCLA, proposed remedies for the Lead Refinery site, or informed Lead Refinery that it is a PRP at the Lead Refinery site.  Until the extent of any remedial action is determined for the Lead Refinery site, the Company is unable to determine the likelihood of a material adverse outcome or the amount or range of a potential loss with respect to placement of the Lead Refinery site and adjacent properties on the NPL.  Lead Refinery lacks the financial resources needed to undertake any investigations or remedial action that may be required by the EPA pursuant to CERCLA.

8

Other

Guarantees, in the form of letters of credit, are issued by the Company generally to assure the payment of insurance deductibles and certain retiree health benefits.  The terms of the Company’s guarantees are generally one year but are renewable annually as required.  These letters are primarily backed by the Company’s revolving credit facility.  The maximum payments that the Company could be required to make under its guarantees at September 27, 2014, were $10.6 million.

Note 3 – Insurance Claims

In September 2011, a portion of the Company’s Wynne, Arkansas manufacturing operation was damaged by fire.  Certain inventories, production equipment, and building structures were extensively damaged.  During the second quarter of 2013, the Company settled the claim with its insurer for total proceeds of $127.3 million, net of the deductible of $0.5 million.  As a result of the settlement with its insurer, all proceeds received and all costs previously deferred (which were recorded as other current liabilities in prior periods) were recognized, resulting in a pre-tax gain of $106.3 million in the second quarter of 2013, or $1.17 per diluted share after tax.

Note 4 – Inventories

(In thousands)	September 27, 2014			December 28, 2013
Raw materials and supplies	$	63,438		$	54,613
Work-in-process		44,232			43,796
Finished goods		180,377			159,422
Valuation reserves		(5,554	)		(6,115	)
Inventories	$	282,493		$	251,716

Note 5 – Industry Segments

The Company’s reportable segments are Plumbing & Refrigeration and Original Equipment Manufacturers (OEM).  For disclosure purposes, as permitted under Accounting Standards Codification (ASC) 280, Segment Reporting, certain operating segments are aggregated into reportable segments.  The Plumbing & Refrigeration segment is composed of Standard Products (SPD), European Operations, and Mexican Operations.  The OEM segment is composed of Industrial Products (IPD), Engineered Products (EPD), and Jiangsu Mueller–Xingrong Copper Industries Limited (Mueller-Xingrong).  These segments are classified primarily by the markets for their products.  Performance of segments is generally evaluated by their operating income.  Intersegment transactions are generally conducted on an arms-length basis.

SPD manufactures copper tube and fittings, plastic fittings, plastic pipe, and line sets.  These products are manufactured in the U.S.  Outside the U.S., the Company’s European Operations manufacture copper tube, which is sold primarily in Europe.  SPD also imports and resells brass and plastic plumbing valves, malleable iron fittings, faucets, and plumbing specialty products.  Mexican Operations consist of pipe nipple manufacturing and import distribution businesses including product lines of malleable iron fittings and other plumbing specialties.  The European Operations also includes the import distribution of fittings, valves, and plumbing specialties primarily in the U.K. and Ireland.  The Plumbing & Refrigeration segment’s products are sold primarily to plumbing, refrigeration, and air-conditioning wholesalers, hardware wholesalers and co-ops, and building product retailers.  For the nine months ended September 27, 2014, cost of goods sold included a decrease in accruals related to import duties of $3.1 million.

9

IPD manufactures brass rod, impact extrusions, and forgings which are used in a wide variety of end products including plumbing brass, automotive components, valves, and fittings.  EPD manufactures and fabricates valves and assemblies primarily for the refrigeration, air-conditioning, and gas appliance markets and specialty copper, copper-alloy, and aluminum tubing.  Mueller-Xingrong manufactures engineered copper tube primarily for air-conditioning applications.  These products are sold primarily to original equipment manufacturers.

Summarized segment information is as follows:

	For the Quarter Ended September 27, 2014
(In thousands)	Plumbing & Refrigeration Segment		OEM Segment		Corporate and Eliminations			Total
Net sales	$	357,843	$	247,883	$	(2,906	)	$	602,820
Cost of goods sold		308,927		215,225		(2,874	)		521,278
Depreciation and amortization		5,287		3,148		517			8,952
Selling, general, and administrative expense		23,473		5,533		5,858			34,864
Operating income	$	20,156	$	23,977	$	(6,407	)		37,726
Interest expense									(1,430	)
Other income, net									225
Income before income taxes								$	36,521

	For the Quarter Ended September 28, 2013
(In thousands)	Plumbing & Refrigeration Segment			OEM Segment		Corporate and Eliminations			Total
Net sales	$	301,622		$	230,396	$	(3,164	)	$	528,854
Cost of goods sold		258,035			201,399		(3,132	)		456,302
Depreciation and amortization		4,172			3,150		560			7,882
Selling, general, and administrative expense		20,736			5,779		6,406			32,921
Gain on sale of plastic fittings manufacturing assets		(39,765	)		—		—			(39,765	)
Impairment charges		4,173			131		—			4,304
Operating income	$	54,271		$	19,937	$	(6,998	)		67,210
Interest expense										(1,243	)
Other income, net										842
Income before income taxes									$	66,809

10

Segment information (continued):

	For the Nine Months Ended September 27, 2014
(In thousands)	Plumbing & Refrigeration Segment		OEM Segment		Corporate and Eliminations			Total
Net sales	$	1,093,060	$	743,322	$	(9,497	)	$	1,826,885
Cost of goods sold		934,208		650,020		(9,398	)		1,574,830
Depreciation and amortization		14,803		9,123		1,725			25,651
Selling, general, and administrative expense		67,678		15,700		18,789			102,167
Operating income	$	76,371	$	68,479	$	(20,613	)		124,237
Interest expense									(3,913	)
Other income, net									440
Income before income taxes								$	120,764

	For the Nine Months Ended September 28, 2013
(In thousands)	Plumbing & Refrigeration Segment			OEM Segment		Corporate and Eliminations			Total
Net sales	$	942,109		$	741,227	$	(12,510	)	$	1,670,826
Cost of goods sold		800,782			651,875		(12,380	)		1,440,277
Depreciation and amortization		12,861			9,854		1,649			24,364
Selling, general, and administrative expense		61,245			18,168		19,665			99,078
Gain on sale of plastic fittings manufacturing assets		(39,765	)		—		—			(39,765	)
Impairment charges		4,173			131		—			4,304
Insurance settlement		(103,895	)		—		(2,437	)		(106,332	)
Operating income	$	206,708		$	61,199	$	(19,007	)		248,900
Interest expense										(2,940	)
Other income, net										4,324
Income before income taxes									$	250,284

Note 6 – Debt

Effective May 29, 2014, the Company amended its credit agreement (the Credit Agreement) entered into on March 7, 2011 to reduce the unsecured $350.0 million revolving credit facility to $200.0 million.  The Credit Agreement also provides for a $200.0 million Term Loan Facility, which, together with the Revolving Loan Facility, mature on December 11, 2017.  

On March 21, 2014, Mueller Europe, Limited (MEL) entered into a credit agreement (the Invoice Facility) establishing a total borrowing capacity of £40.0 million, or approximately $65.9 million.  The Invoice Facility has an initial term of two years.  Borrowings outstanding under the Invoice Facility are secured by MEL’s trade account receivables denominated in British pounds.  Borrowings were approximately $11.7 million at September 27, 2014, and bear interest at the latest base-lending rate published by HSBC plus 155 basis points, which was approximately 2.05 percent at the end of the third quarter of 2014.

11

On September 23, 2013, Mueller-Xingrong entered into a credit agreement with a syndicate of four banks established a secured revolving credit facility (the JV Credit Agreement), which matured on September 24, 2014.  At the maturity date, individual draws on the JV Credit Agreement had maturity dates ranging up to nine months.  Mueller-Xingrong is in process of negotiating a new credit agreement.  Management believes that cash generated by Mueller-Xingrong’s operations and cash currently on hand will be sufficient to fund its operations in the near term.  Borrowings under the JV Credit Agreement were approximately $24.5 million and bear an interst rate at the latest base-lending rate published by the People’s Bank of China, which was 5.6 percent at September 27, 2014.

Note 7 – Employee Benefits

The Company sponsors several qualified and nonqualified pension plans and other postretirement benefit plans for certain of its employees.  The components of net periodic benefit cost are as follows:

	For the Quarter Ended						For the Nine Months Ended
(In thousands)	September 27, 2014			September 28, 2013			September 27, 2014			September 28, 2013
Pension benefits:
Service cost	$	199		$	350		$	596		$	1,051
Interest cost		2,064			2,023			6,191			6,070
Expected return on plan assets		(3,202	)		(2,845	)		(9,604	)		(8,535	)
Amortization of prior service cost		1			1			1			1
Amortization of net loss		188			984			565			2,954
Net periodic benefit (income) cost	$	(750	)	$	513		$	(2,251	)	$	1,541
Other benefits:
Service cost	$	88		$	69		$	264		$	207
Interest cost		181			155			544			467
Amortization of prior service cost (credit)		—			2			(1	)		5
Amortization of net gain		(55	)		(41	)		(164	)		(125	)
Net periodic benefit cost	$	214		$	185		$	643		$	554

Note 8 – Income Taxes

The Company’s effective tax rate for the third quarter of 2014 was 33 percent.  The difference between the effective tax rate and the amount computed using the U.S. federal statutory tax rate for the third quarter of 2014 was primarily related to the reduction for the U.S. production activities deduction of $1.0 million, which was partially offset by the provision for state income taxes, net of the federal benefit, of $0.3 million.

The Company’s effective tax rate for the third quarter of 2013 was 40 percent.  Factors that explain the difference between the effective tax rate and what would be computed using the U.S. federal statutory tax rate for the third quarter of 2013 were increases related to: (i) the impairment of goodwill of $1.8 million; (ii) increases in the valuation allowance of $1.0 million; (iii) the provision for state income taxes, net of federal benefit of $1.2 million; and (iv) the effect of foreign adjustments of $0.4 million.  These items were partially offset by the U.S. production activities deduction of $1.0 million.

The Company’s effective tax rate for the first nine months of 2014 was 30 percent.  The difference between the effective tax rate and the amount computed using the U.S. federal statutory tax rate was attributable to reductions for: (i) the U.S. production activities deduction of $3.5 million; (ii) decreases in valuation allowances of $5.7 million; and (iii) the effect of foreign tax rates lower than statutory tax rates and other foreign adjustments of $0.5 million. These items were partially offset by the provision for state income taxes, net of the federal benefit, of $2.8 million.

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The Company’s effective tax rate for the first nine months of 2013 was 37 percent.  Factors that explain the difference between the effective tax rate and what would be computed using the U.S. federal statutory tax rate for the first nine months were increases related to: (i) goodwill impairment of $1.8 million and (ii) the provision for state income taxes, net of the federal benefit, of $7.4 million.  These items were partially offset by reductions related to: (i) the effect of foreign tax rates lower than statutory tax rates and other foreign items of $1.1 million; (ii) decreases in valuation allowances of $0.4 million; and (iii) the U.S. production activities deduction of $3.9 million.

The Company released a valuation allowance of $4.8 million, or eight cents per diluted share, in the second quarter of 2014 related to certain state income tax credits.  As a result of legislative changes enacted in the second quarter, the Company now expects to be able to use such credits within the foreseeable future.

Total unrecognized tax benefits, including derecognized deferred tax assets, as of September 27, 2014 were $2.8 million.  It is reasonably possible that this amount may decrease by the full amount over the next twelve months, none of which will impact the effective tax rate.

The Company files a consolidated U.S. federal income tax return and numerous consolidated and separate-company income tax returns in many state, local, and foreign jurisdictions.  The statute of limitations is open for the Company’s federal tax return and most state income tax returns for 2011 and all subsequent years and is open for certain state and foreign returns for earlier tax years due to ongoing audits and differing statute periods.  The Internal Revenue Service has audited the 2012 federal income tax return, the results of which were immaterial to the Company’s financial position, results of operations, or cash flows.  While the Company believes that it is adequately reserved for possible future audit adjustments, the final resolution of these examinations cannot be determined with certainty and could result in final settlements that differ from current estimates.

Note 9 – Derivative Instruments and Hedging Activities

Earnings and cash flows are subject to fluctuations due to changes in commodity prices, foreign currency exchange rates, and interest rates. The Company uses derivative instruments such as commodity futures contracts, foreign currency forward contracts, and interest rate swaps to manage these exposures.

All derivatives are recognized on the Condensed Consolidated Balance Sheets at their fair value. On the date the derivative contract is entered into, it is designated as (i) a hedge of a forecasted transaction or the variability of cash flow to be paid (cash flow hedge), or (ii) a hedge of the fair value of a recognized asset or liability (fair value hedge). Changes in the fair value of a derivative that is qualified, designated and highly effective as a cash flow hedge are recorded in 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. Changes in the fair value of a derivative that is qualified, designated and highly effective as a fair value hedge, along with the gain or loss on the hedged recognized asset or liability that is attributable to the hedged risk, are recorded in current earnings.  Changes in the fair value of undesignated derivative instruments and the ineffective portion of designated derivative instruments are reported in current earnings.

The Company documents all relationships between hedging instruments and hedged items, as well as the risk-management objective and strategy for undertaking various hedge transactions. This process includes linking all derivatives that are designated as fair value hedges to specific assets and liabilities on the Condensed Consolidated Balance Sheets and linking cash flow hedges to specific forecasted transactions or variability of cash flow.

The Company also assesses, both at the hedge’s inception and on an ongoing basis, whether the designated derivatives that are used in hedging transactions are highly effective in offsetting changes in cash flow or fair values of hedged items.  When a derivative is determined not to be highly effective as a hedge or the underlying hedged transaction is no longer probable, hedge accounting is discontinued prospectively, in accordance with the derecognition criteria for hedge accounting.

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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 occasionally enters into forward fixed-price arrangements with certain customers; the risk of these arrangements is generally managed with commodity futures contracts.   These futures contracts have been designated as cash flow hedges.  

At September 27, 2014, the Company held open futures contracts to purchase approximately $18.0 million of copper over the next 15 months related to fixed price sales orders.  The fair value of those futures contracts was a $99 thousand loss position, which was determined by obtaining quoted market prices (Level 1 hierarchy as defined by ASC 820, Fair Value Measurements and Disclosures (ASC 820)). In the next twelve months, the Company will reclassify into earnings realized gains or losses of cash flow hedges. At September 27, 2014, this amount was approximately $55 thousand of deferred net losses, net of tax.

The Company may also enter into futures contracts to protect the value of inventory against market fluctuations.   These futures contracts have been designated as fair value hedges.  

At September 27, 2014, the Company held open futures contracts to sell approximately $11.4 million of copper over the next six months related to copper inventory. The fair value of those futures contracts was a $445 thousand gain position, which was determined by obtaining quoted market prices (Level 1 hierarchy as defined by ASC 820).  During the fourth quarter of 2013, the Company dedesignated previous hedges on its inventory because the hedging relationship was no longer deemed to be highly effective.  These contracts no longer qualified as hedging instruments as of December 28, 2013.

Foreign Currency Forward Contracts

During 2012 and 2013, the Company entered into certain contracts to purchase heavy machinery and equipment denominated in euros. In anticipation of entering into these contracts, the Company entered into forward contracts to purchase euros to protect itself against adverse foreign exchange rate fluctuations.  

At September 27, 2014, the Company held open forward contracts to purchase approximately 3.0 million euros over the next six months.  The fair value of these contracts, which was determined by obtaining quoted market prices (Level 1 hierarchy as defined by ASC 820), was a $68 thousand loss position recorded in other current liabilities at September 27, 2014, and an $836 thousand gain position recorded in other current assets at December 28, 2013. At September 27, 2014, there was $15 thousand of deferred losses, net of tax, included in AOCI that is expected to be reclassified into property, plant, and equipment, net, when the hedged transactions occur.

Interest Rate Swap

On February 20, 2013, the Company entered into a two-year forward-starting interest rate swap agreement with an effective date of January 12, 2015, and an underlying notional amount of $200.0 million, pursuant to which the Company receives variable interest payments based on one-month LIBOR and pays fixed interest at a rate of 1.4 percent.  Based on the Company’s current variable premium pricing on its Term Loan Facility, the all-in fixed rate on the effective date is 2.7 percent.  The interest rate swap will mature on December 11, 2017, and is structured to offset the interest rate risk associated with the Company’s floating-rate, LIBOR-based Term Loan Facility Agreement.  The swap was designated and accounted for as a cash flow hedge from inception.

The fair value of the interest rate swap is estimated based on the present value of the difference between expected cash flows calculated at the contracted interest rate and the expected cash flows at the current market interest rate using observable benchmarks for LIBOR forward rates at the end of the period (Level 2 hierarchy as defined by ASC 820).  Interest payable and receivable under the swap agreement will be accrued and recorded as an adjustment to interest expense.  The fair value of the interest rate swap was an $8 thousand gain position and was recorded in other assets at September 27, 2014.  At September 27, 2014, there was $5 thousand of deferred net gains, net of tax, included in AOCI that is expected to be reclassified into interest expense over the term of the hedged item.

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We present our derivative assets and liabilities in our Condensed Consolidated Balance Sheets on a net basis by counterparty. The following table summarizes the location and fair value of the derivative instruments and disaggregates our net derivative assets and liabilities into gross components on a contract-by-contract basis:

	Asset Derivatives							Liability Derivatives
		Fair Value							Fair Value
(In thousands)	Balance Sheet Location	Sept. 27, 2014			Dec. 28, 2013			Balance Sheet Location	Sept. 27, 2014			Dec. 28, 2013
Hedging instrument:
Commodity contracts - gains	Other current assets	$	526		$	448		Other current liabilities	$	10		$	340
Commodity contracts - losses	Other current assets		(76	)		(10	)	Other current liabilities		(115	)		(2,107	)
Foreign currency contracts	Other current assets		—			836		Other current liabilities		(68	)		—
Interest rate swap	Other assets		8			1,324		Other liabilities		—			—
Total derivatives (1)		$	458		$	2,598			$	(173	)	$	(1,767	)
(1) Does not include the impact of cash collateral received from or provided to counterparties.

The following tables summarize the effects of derivative instruments on our Condensed Consolidated Statements of Income:

		Three Months Ended						Nine Months Ended
(In thousands)	Location	Sept. 27, 2014			Sept. 28, 2013			Sept. 27, 2014			Sept. 28, 2013
Fair value hedges:
Gain (loss) on commodity contracts (qualifying)	Cost of goods sold	$	1,100		$	(846	)	$	7,371		$	4,344
(Loss) gain on hedged item - Inventory	Cost of goods sold		(922	)		1,042			(6,702	)		(3,770	)

		Three Months Ended				Nine Months Ended
(In thousands)	Location	Sept. 27, 2014		Sept. 28, 2013		Sept. 27, 2014		Sept. 28, 2013
Undesignated derivatives:
Gain on commodity contracts (nonqualifying)	Cost of goods sold	$	—	$	—	$	1,466	$	—

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The following tables summarize amounts recognized in and reclassified from AOCI during the period:

	Three Months Ended September 27, 2014
(In thousands)	(Loss) Gain Recognized in AOCI (Effective Portion), Net of Tax			Classification Gains (Losses)	(Gain) Loss Reclassified from AOCI (Effective Portion), Net of Tax
Cash flow hedges:
Commodity contracts	$	(202	)	Cost of goods sold	$	(174	)
Foreign currency contracts		(181	)	Property, plant, and   equipment, net		(46	)
Interest rate swap		430		Interest expense		—

	Three Months Ended September 28, 2013
(In thousands)	Gain (Loss) Recognized in AOCI (Effective Portion), Net of Tax			Classification Gains (Losses)	Loss (Gain) Reclassified from AOCI (Effective Portion), Net of Tax
Cash flow hedges:
Commodity contracts	$	474		Cost of goods sold	$	788
Foreign currency contracts		372		Property, plant, and  equipment, net		—
Interest rate swap		(747	)	Interest expense		—

	Nine Months Ended September 27, 2014
(In thousands)	(Loss) Gain Recognized in AOCI (Effective Portion), Net of Tax			Classification Gains (Losses)	Loss (Gain) Reclassified from AOCI (Effective Portion), Net of Tax
Cash flow hedges:
Commodity contracts	$	(634	)	Cost of goods sold	$	285
Foreign currency contracts		(184	)	Property, plant, and  equipment, net		(283	)
Interest rate swap		(837	)	Interest expense		—

	Nine Months Ended September 28, 2013
(In thousands)	(Loss) Gain Recognized in AOCI (Effective Portion), Net of Tax			Classification Gains (Losses)	Loss (Gain) Reclassified from AOCI (Effective Portion), Net of Tax
Cash flow hedges:
Commodity contracts	$	(3,056	)	Cost of goods sold	$	3,309
Foreign currency contracts		352		Property, plant, and  equipment, net		—
Interest rate swap		649		Interest expense		—

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The Company enters into futures and forward contracts that closely match the terms of the underlying transactions.  As a result, the ineffective portion of the open hedge contracts through September 27, 2014 was not material to the Condensed Consolidated Statements of Income.

The Company primarily enters into International Swaps and Derivatives Association (ISDA) master netting agreements with major financial institutions that permit the net settlement of amounts owed under their respective derivative contracts. Under these master netting agreements, net settlement generally permits the Company or the counterparty to determine the net amount payable for contracts due on the same date and in the same currency for similar types of derivative transactions. The master netting agreements generally also provide for net settlement of all outstanding contracts with a counterparty in the case of an event of default or a termination event.  The Company does not offset fair value amounts for derivative instruments and fair value amounts recognized for the right to reclaim cash collateral.  At September 27, 2014 and December 28, 2013, the Company had recorded restricted cash in other current assets of $0.5 million and $2.1 million, respectively, as collateral related to open derivative contracts under the master netting arrangements.

Note 10 – Accumulated Other Comprehensive Income

Changes in AOCI by component, net of taxes and noncontrolling interest, were as follows:

	For the Nine Months Ended September 27, 2014
(In thousands)		Cumulative Translation Adjustment			Unrealized (Losses)/Gains on Derivatives			Minimum Pension/OPEB Liability Adjustment			Unrealized Gains on Equity Investments		Total
Beginning balance		$	(462	)	$	1,546		$	(12,158	)	$	255	$	(10,819	)
Other comprehensive income (loss) before reclassifications			(3,337	)		(1,652	)		143			7		(4,839	)
Amounts reclassified from AOCI			—			2			347			—		349
Net current-period other comprehensive income			(3,337	)		(1,650	)		490			7		(4,490	)
Ending balance		$	(3,799	)	$	(104	)	$	(11,668	)	$	262	$	(15,309	)

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	For the Nine Months Ended September 28, 2013
(In thousands)		Cumulative Translation Adjustment			Unrealized (Losses)/Gains on Derivatives			Minimum Pension/OPEB Liability Adjustment			Unrealized Gains on Equity Investments		Total
Beginning balance		$	(3,033	)	$	(166	)	$	(39,527	)	$	103	$	(42,623	)
Other comprehensive income (loss) before reclassifications			211			4,314			79			105		4,709
Amounts reclassified from AOCI			—			(3,309	)		1,896			—		(1,413	)
Net current-period other comprehensive income			211			1,005			1,975			105		3,296
Ending balance		$	(2,822	)	$	839		$	(37,552	)	$	208	$	(39,327	)

Reclassification adjustments out of AOCI were as follows:

	Amount reclassified from AOCI
	For the Quarter Ended
(In thousands)	Sept. 27, 2014			Sept. 28, 2013			Affected line item
Unrealized losses/(gains) on derivatives:
Commodity contracts	$	(214	)	$	1,046		Cost of goods sold
Foreign currency contracts		(71	)		—		Property, plant, and equipment, net
		65			(258	)	Income tax benefit (expense)
		(220	)		788		Net of tax
		—			—		Noncontrolling interest
	$	(220	)	$	788		Net of tax and noncontrolling  interest
Amortization of employee benefit items:
Amortization of net loss and prior service cost	$	134		$	946		Selling, general, and administrative  expense
		(19	)		(318	)	Income tax expense
		115			628		Net of tax
		—			—		Noncontrolling interest
	$	115		$	628		Net of tax and noncontrolling  interest

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	Amount reclassified from AOCI
	For the Nine Months Ended
(In thousands)	Sept. 27, 2014			Sept. 28, 2013			Affected line item
Unrealized losses/(gains) on derivatives:
Commodity contracts	$	351		$	4,922		Cost of goods sold
Foreign currency contracts		(446	)		—		Property, plant, and equipment, net
		97			(1,613	)	Income tax benefit (expense)
		2			3,309		Net of tax
		—			—		Noncontrolling interest
	$	2		$	3,309		Net of tax and noncontrolling  interest
Amortization of employee benefit items:
Amortization of net loss and prior service cost	$	401		$	2,835		Selling, general, and administrative expense
		(54	)		(939	)	Income tax expense
		347			1,896		Net of tax
		—			—		Noncontrolling interest
	$	347		$	1,896		Net of tax and noncontrolling interest

Note 11 – Acquisitions and Dispositions

On October 18, 2013, the Company entered into a definitive agreement with KME Yorkshire Limited (Yorkshire) to acquire certain assets and assume certain liabilities of Yorkshire for purposes of acquiring its copper tube business.  Yorkshire produces European standard copper distribution tubes.  This transaction received regulatory approval in the United Kingdom on February 11, 2014 and closed on February 28, 2014.  The purchase price was approximately $30.1 million, paid in cash.  The acquisition of Yorkshire complements the Company’s existing copper tube businesses in the Plumbing and Refrigeration segment.  In 2012, Yorkshire had annual revenue of approximately $196.1 million.  During the third quarter of 2014, the purchase price allocation, including all fair value measurements, was finalized.  The fair value of the assets acquired totaled $20.7 million, consisting primarily of inventories of $17.6 million, property, plant, and equipment of $2.1 million, and other current assets of $1.0 million.  The fair value of the liabilities assumed totaled $15.6 million, consisting primarily of accounts payable and accrued expenses of $15.2 million and other current liabilities of $0.4 million.  Of the remaining purchase price, $8.1 million was allocated to tax-deductible goodwill and $16.9 million was allocated to other intangible assets such as customer lists of $11.3 million that will be amortized over approximately 19 years, non-compete agreements of $4.5 million that will be amortized over approximately three years, and trade names and licenses of $1.1 million that will be amortized over approximately ten years.  The results of operations for Yorkshire have been included in the accompanying Condensed Consolidated Financial Statements from the acquisition date.

On October 17, 2013, the Company entered into a Stock Purchase Agreement with Commercial Metals Company and Howell Metal Company (Howell) providing for the purchase of all of the outstanding capital stock of Howell for approximately $55.3 million in cash, net of working capital adjustments.  Howell manufactures copper tube and line sets for U.S. distribution.  The acquisition of Howell complements the Company’s copper tube and line sets businesses, both components of the Plumbing and Refrigeration segment.   For the twelve months ended August 31, 2013, Howell’s net sales for copper tube and line sets totaled $156.3 million.  During the first quarter of 2014, the purchase price allocation, including all fair value measurements, was finalized.  The fair value of the assets acquired totaled $63.0 million, consisting primarily of receivables of $14.6 million, inventories of $27.6 million, property, plant, and equipment of $20.3 million, and other current assets of $0.5 million.  The fair value of the liabilities assumed totaled $11.4 million, consisting primarily of accounts payable and accrued expenses of $9.9 million and other current liabilities of $1.5 million.  Of the remaining purchase price, $2.3 million was allocated to other intangible assets and $1.4 million to tax-deductible goodwill.  The results of operations for Howell have been included in the accompanying Condensed Consolidated Financial Statements from the acquisition date of October 17, 2013.

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On August 9, 2013, the Company sold certain of its plastic fittings manufacturing assets located in Portage, Michigan and Ft. Pierce, Florida.  Simultaneously, the Company entered into a lease agreement with the purchaser of the assets to continue to manufacture and distribute Schedule 40 plastic fittings utilizing the Ft. Pierce assets for a period of approximately eight to 14 months (Transition Period).  The total sales price was $66.2 million, of which $61.2 million was received on August 9, 2013; the remaining $5.0 million was received during the second quarter of 2014.  This transaction resulted in a pre-tax gain of $39.8 million in the third quarter of 2013, or 81 cents per diluted share after tax.

The net book value of assets disposed in the aforementioned plastic sale transaction was $15.9 million.  For goodwill testing purposes, these assets were part of the SPD reporting unit which is a component of the Company’s Plumbing & Refrigeration operating segment.  Because these assets met the definition of a business in accordance with ASC 805 Business Combinations, $10.5 million of the SPD reporting unit’s goodwill balance was allocated to the disposal group.  The amount of goodwill allocated was based on the relative fair values of the asset group which was disposed and the portion of the SPD reporting unit which was retained.

The Company will continue to manufacture and supply plastic drain, waste, and vent (DWV) fittings.  The Company extended its third party supply agreement to complement its product offering with purchased products the Company does not competitively manufacture with its remaining assets.  This supply agreement was originally entered into after the majority of the Company’s plastic manufacturing assets were destroyed in the 2011 fire at its Wynne, Arkansas facility.  The extended supply agreement has an initial five-year term.

With the decision to cease the Company’s manufacturing operations in Portage, there was an evaluation of the remaining long-lived assets for impairment, and it was determined that the carrying value of the land and building were no longer recoverable.  An impairment charge of $3.2 million was recognized during the third quarter of 2013 to adjust the carrying value of the land and building to their estimated fair value.  The fair value estimate was determined by obtaining and evaluating recent sales data for similar assets (Level 2 hierarchy as defined by ASC 820).

Note 12 – Recently Issued Accounting Standards

In December 2011, the Financial Accounting Standards Board (FASB) issued ASU No. 2011-11, Balance Sheet (Topic 210) (ASU 2011-11). The amendments in this ASU require improved disclosure information about financial instruments and derivative instruments that are either offset or subject to an enforceable master netting arrangement or similar agreement.  Subsequently in January 2013, the FASB issued ASU 2013-01, Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities (ASU 2013-01), which clarifies the types of instruments and transactions that are subject to the offsetting disclosure requirements established by ASU 2011-11. These ASUs should be applied retrospectively for all comparative periods presented for annual periods beginning on or after January 1, 2013 and interim periods within those annual periods. The requirements of these ASUs were adopted during the first quarter of 2014 and did not have a significant impact on our disclosures.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (ASU 2014-09).  The ASU will supersede virtually all existing revenue recognition guidance under U.S. GAAP and will be effective for annual reporting periods beginning after December 15, 2016.  The fundamental principles of the new guidance are that companies should recognize revenue in a manner that reflects the timing of the transfer of services to customers and the amount of revenue recognized reflects the consideration that a company expects to receive for the goods and services provided.  The new guidance establishes a five-step approach for the recognition of revenue.  Based on our preliminary assessment, we do not anticipate that the new guidance will fundamentally change our revenue recognition policies, practices, or systems.

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Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations

General Overview

The Company is a leading manufacturer of copper, brass, plastic, and aluminum products.  The range of these products is broad:  copper tube and fittings; brass and copper alloy rod, bar, and shapes; aluminum and brass forgings; aluminum and copper impact extrusions; plastic pipe, fittings and valves; refrigeration valves and fittings; fabricated tubular products; and steel nipples.  The Company also resells imported brass and plastic plumbing valves, malleable iron fittings, faucets and plumbing specialty products.  Mueller’s operations are located throughout the United States and in Canada, Mexico, Great Britain, and China.

The Company’s businesses are aggregated into two reportable segments: the Plumbing & Refrigeration segment and the Original Equipment Manufacturers (OEM) segment.  For disclosure purposes, as permitted under Accounting Standards Codification (ASC) 280, Segment Reporting, certain operating segments are aggregated into reportable segments.  The Plumbing & Refrigeration segment is composed of Standard Products (SPD), European Operations, and Mexican Operations.  The OEM segment is composed of Industrial Products (IPD), Engineered Products (EPD), and Mueller-Xingrong.  Certain administrative expenses and expenses related primarily to retiree benefits at inactive operations are combined into the Corporate and Eliminations classification.  These reportable segments are described in more detail below.

SPD manufactures and sells copper tube, copper and plastic fittings, line sets, plastic pipe, and valves in North America and sources certain products for distribution in North America.  European Operations manufacture copper tube in Europe, which is sold throughout Europe; activities also include import distribution in the U.K. and Ireland.  Mexican Operations consist of pipe nipple manufacturing and import distribution businesses including product lines of malleable iron fittings and other plumbing specialties.  The Plumbing & Refrigeration segment sells products to wholesalers in the heating, ventilation, and air-conditioning (HVAC), plumbing, and refrigeration markets, to distributors to the manufactured housing and recreational vehicle industries, and to building material retailers.

The OEM segment manufactures and sells brass and copper alloy rod, bar, and shapes; aluminum and brass forgings; aluminum and copper impact extrusions; refrigeration valves and fittings; fabricated tubular products; and gas valves and assemblies.  Mueller–Xingrong manufactures engineered copper tube primarily for air-conditioning applications; these products are sold primarily to OEMs located in China.  The OEM segment sells its products primarily to original equipment manufacturers, many of which are in the HVAC, plumbing, and refrigeration markets.

New housing starts and commercial construction are important determinants of the Company’s sales to the HVAC, refrigeration, and plumbing markets because the principal end use of a significant portion of the Company’s products is in the construction of single and multi-family housing and commercial buildings.  Repairs and remodeling projects are also important drivers of underlying demand for these products.

The majority of the Company’s manufacturing facilities operated at below capacity during 2013 and the first nine months of 2014 due to reduced demand for the Company’s products arising from the general economic conditions in the U.S. and foreign markets that the Company serves.  These conditions have significantly affected the demand for virtually all of the Company’s core products in recent years.

Residential construction activity in 2013 and into the first nine months of 2014 has shown improvement, but remains at levels below historical averages. Continued improvement is expected, but may be tempered by continuing low labor participation rates, the pace of household formations, and tighter lending standards.  Per the U.S. Census Bureau, the September 2014 seasonally adjusted annual rate of new housing starts was 1.0 million compared with the September 2013 rate of 0.9 million.  While mortgage rates have risen in 2013 and 2014, they remain at historically low levels, as the average 30-year fixed mortgage rate was 4.24 percent for the first nine months of 2014 and 3.98 percent for the twelve months ended December 2013. 

The private non-residential construction sector, which includes offices, industrial, health care, and retail projects, began showing modest improvement in 2012 and 2013 from declines in previous years.  According to the U.S. Census Bureau, the actual (not seasonally adjusted) value of private nonresidential construction put in place was $301.4 billion in 2012 compared to $304.9 billion in 2013.  The seasonally adjusted annual value of private non-residential value of construction put in place was $333.3 billion in August 2014 compared to the August 2013 rate of $305.2 billion and the December 2013 rate of $331.4 billion.  The Company expects that most of these conditions will gradually improve, but at an irregular pace.

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Profitability of certain of the Company’s product lines depends upon the “spreads” between the costs of raw materials and the selling prices of its products.  The open market prices for copper cathode and scrap, for example, influence the selling price of copper tube, a principal product manufactured by the Company.  The Company attempts to minimize the effects on profitability from fluctuations in material costs by passing through these costs to its customers.  The Company’s earnings and cash flow are dependent upon these spreads that fluctuate based upon market conditions.

Earnings and profitability are also impacted by unit volume that is subject to market trends, such as substitute products, imports, technologies, and market share.  In core product lines, the Company intensively manages its pricing structure while attempting to maximize its profitability.  From time-to-time, this practice results in lost sales opportunities and lower volume.  For plumbing systems, plastics are the primary substitute product; these products represent an increasing share of consumption.  U.S. consumption of copper tube is still predominantly supplied by U.S. manufacturers.  For certain air-conditioning and refrigeration applications, aluminum based systems are the primary substitution threat.  The Company cannot predict the acceptance or the rate of switching that may occur.  In recent years, brass rod consumption in the U.S. has declined due to the outsourcing of many manufactured products from offshore regions.

Results of Operations

Third Quarter 2014 compared with Third Quarter 2013

During the third quarter of 2014, the Company’s net sales were $602.8 million, which compares with net sales of $528.9 million over the same period of 2013.   The $73.9 million increase was primarily attributable to higher unit sales volume in the Company’s core product lines of $70.4 million, of which approximately $64.5 million was attributable to sales recorded by Howell Metal Company (Howell), acquired in October 2013, and Yorkshire Copper Tube (Yorkshire), acquired in February 2014.  

Cost of goods sold was $521.3 million in the third quarter of 2014 compared with $456.3 million in the same period of 2013.  Consistent with the factors noted above regarding net sales, the year-over-year increase was due primarily to increased sales volume.

Depreciation and amortization increased from $7.9 million in the third quarter of 2013 to $9.0 million in the third quarter of 2014.  This is due to increased capital spending and depreciation and amortization related to businesses acquired.  Selling, general, and administrative expense increased slightly from $32.9 million in the third quarter of 2013 to $34.9 million in the third quarter of 2014; this increase was primarily due to increased employment costs of $1.2 million, primarily associated with the acquisitions of Howell and Yorkshire.  Additionally, during the third quarter of 2014, the Company recognized severance costs of $0.9 million at Yorkshire.  The Company anticipates it will incur additional rationalization costs at Yorkshire over the next six months which are not expected to be material to the Company’s financial position.

During the third quarter of 2013, the Company sold certain of its plastic fittings manufacturing assets and recognized a pre-tax gain of $39.8 million, or 41 cents per diluted share after tax.  The Company also recognized fixed asset impairment charges of $4.3 million primarily related to real property retained that was associated with the aforementioned plastic sale transaction.

 Interest expense increased to $1.4 million in the third quarter of 2014 from $1.2 million for the same period in 2013.  This was primarily related to increased borrowings by MEL and higher borrowing costs at Mueller-Xingrong to fund working capital.

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The Company’s effective tax rate for the third quarter of 2014 was 33 percent.  The difference between the effective tax rate and the amount computed using the U.S. federal statutory tax rate for the third quarter of 2014 was primarily related to the reduction for the U.S. production activities deduction of $1.0 million, which was partially offset by the provision for state income taxes, net of the federal benefit, of $0.3 million.

The Company’s effective tax rate for the third quarter of 2013 was 40 percent.  Factors that explain the difference between the effective tax rate and what would be computed using the U.S. federal statutory tax rate for the third quarter of 2013 were increases related to: (i) the impairment of goodwill of $1.8 million; (ii) increases in the valuation allowance of $1.0 million; (iii) the provision for state income taxes, net of federal benefit of $1.2 million; and (iv) the effect of foreign adjustments of $0.4 million.  These items were partially offset by the U.S. production activities deduction of $1.0 million.

Based on the items described above, consolidated net income decreased to $24.3 million in the third quarter of 2014 from $39.9 million in the third quarter of 2013.

Plumbing & Refrigeration Segment

Third quarter net sales by the Plumbing & Refrigeration segment increased to $357.8 million in 2014 from $301.6 million for the third quarter of 2013.  Of the $56.2 million increase, approximately $64.5 million was attributable to sales recorded by Howell, acquired in October 2013, and Yorkshire, acquired in February 2014, offset by lower unit sales volume in certain of the segment’s product lines and a decline in copper prices.

Cost of goods sold increased from $258.0 million in the third quarter of 2013 to $308.9 million in the same period of 2014, which was due to higher volumes.  Depreciation and amortization increased from $4.2 million in the third quarter of 2013 to $5.3 million in the third quarter of 2014.  This is due to increased capital spending and depreciation and amortization related to businesses acquired.  Selling, general, and administrative expense increased from $20.7 million in 2013 to $23.5 million in 2014 primarily due to increased employment costs, including incentive compensation, of $1.5 million, severance costs of $0.9 million at Yorkshire, and incremental selling, general, and administrative expenses associated with Howell and Yorkshire.  

During the third quarter of 2013, the segment sold certain of its plastic fittings manufacturing assets and recognized a pre-tax gain of $39.8 million.  During the same quarter, it also recognized fixed asset impairment charges of $4.2 million.  Operating income for the segment decreased $34.1 million in the third quarter of 2014 compared with the third quarter of 2013 primarily as a result of these items.

OEM Segment

The OEM segment’s third quarter net sales were $247.9 million in 2014 compared with $230.4 million in 2013.  The $17.5 million increase in net sales was primarily attributable to higher unit sales volume, offset by lower net selling prices of $6.5 million in the segment’s core product lines of brass rod, forgings, impacts, and commercial tube.  Cost of goods sold increased to $215.2 million in the third quarter of 2014 from $201.4 million in the same period of 2013, which was also due to factors consistent with those noted regarding net sales.  Depreciation and amortization remained relatively consistent for both quarters.  Selling, general, and administrative expenses were $5.5 million in the third quarter of 2014 and $5.8 million in the third quarter of 2013.  Operating income increased from $19.9 million in the third quarter of 2013 to $24.0 million in the same period of 2014, due primarily to improved margins and higher volumes.

Nine Months Ended September 27, 2014, compared with Nine Months Ended September 28, 2013

During the nine months ended September 27, 2014, the Company’s net sales were $1.83 billion, which compares with net sales of $1.67 billion over the same period of 2013.   The $156.1 million increase in net sales was primarily due to overall higher unit sales volume in the Company’s product lines of $205.6 million, of which approximately $171.4 million was attributable to sales recorded by Howell, acquired in October 2013, and Yorkshire, acquired in February 2014.   This was partially offset by a $46.3 million decrease related to lower net selling prices in the Company’s core product lines.    The Comex average copper price in the first nine months of 2014 was approximately $3.17 per pound, or six percent lower than the 2013 average of $3.36 per pound.

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Cost of goods sold was $1.57 billion in the first nine months of 2014 compared with $1.44 billion in the same period of 2013.  Consistent with the factors noted above regarding net sales, the year-over-year increase was due primarily to increased sales volume, offset by a decrease in the price of copper, the Company’s principal raw material, and a decrease in accruals related to import duties of $3.1 million.

Depreciation and amortization increased from $24.4 million in the first nine months of 2013 to $25.7 million in 2014.  This is due to increased capital spending and depreciation and amortization related to businesses acquired.  Selling, general, and administrative expenses increased to $102.2 million in the first nine months of 2014 from $99.1 million in 2013; this $3.1 million increase was primarily due to increased employment costs of $1.3 million and severance costs of $3.1 million at Yorkshire, offset by a reduction in expense related to legal matters of $1.2 million.

During the nine months ended September 28, 2013, the Company settled the insurance claim related to the September 2011 fire at its Wynne, Arkansas manufacturing operation and recognized a $106.3 million gain.  During the same period, the Company also sold certain of its plastic fittings manufacturing assets and recognized a pre-tax gain of $39.8 million, or 41 cents per diluted share after tax, and recognized fixed asset impairment charges of $4.3 million.

Interest expense increased to $3.9 million for the nine months ended September 27, 2014, from $2.9 million for the same period in 2013.  This increase was primarily due to increased borrowings by MEL and higher borrowing costs at Mueller-Xingrong to fund operations.  Other income, net totaled $0.4 million in the first nine months of 2014 compared with $4.3 million for the same period in 2013.  During 2013, the Company recognized a $3.0 million gain on the sale of non-operating property.

The Company’s effective tax rate for the first nine months of 2014 was 30 percent.  The difference between the effective tax rate and the amount computed using the U.S. federal statutory tax rate was attributable to reductions for: (i) the U.S. production activities deduction of $3.5 million; (ii) decreases in valuation allowances of $5.7 million; and (iii) the effect of foreign tax rates lower than statutory tax rates and other foreign adjustments of $0.5 million. These items were partially offset by the provision for state income taxes, net of the federal benefit, of $2.8 million.

The Company’s effective tax rate for the first nine months of 2013 was 37 percent.  Factors that explain the difference between the effective tax rate and what would be computed using the U.S. federal statutory tax rate for the first nine months were increases related to: (i) goodwill impairment of $1.8 million and (ii) the provision for state income taxes, net of the federal benefit, of $7.4 million.  These items were partially offset by reductions related to: (i) the effect of foreign tax rates lower than statutory tax rates and other foreign items of $1.1 million; (ii) decreases in valuation allowances of $0.4 million; and (iii) the U.S. production activities deduction of $3.9 million.

Plumbing & Refrigeration Segment

Net sales by the Plumbing & Refrigeration segment in the nine months ended September 27, 2014 were $1.09 billion compared to net sales of $0.94 billion in the same period of 2013.  Of the $151.0 million increase, approximately $171.4 million was attributable to sales recorded by Howell, acquired in October 2013, and Yorkshire, acquired in February 2014.   The increase was offset by lower net selling prices of $20.0 million.  

Cost of goods sold increased from $800.8 million in the first nine months of 2013 to $934.2 million in the same period of 2014, which was also due to higher volumes.  Depreciation and amortization increased from $12.9 million in the first nine months of 2013 to $14.8 million in the first nine months of 2014.  This is due to increased capital spending and depreciation and amortization related to businesses acquired.  Selling, general, and administrative expenses increased from $61.2 million in the nine months ended September 28, 2013 to $67.7 million in the same period of 2014.  The $6.5 million increase was primarily due to increased employment costs, including incentive compensation, of $2.6 million, severance costs of $3.1 million at Yorkshire, and incremental selling, general, and administrative expenses associated with Howell and Yorkshire.  This was offset by a reduction in expense related to legal matters of $1.2 million.

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During the first nine months of 2013, the segment recognized a $103.9 million gain related to the settlement of the insurance claim for the September 2011 fire at the Wynne, Arkansas manufacturing operation. It also sold certain of its plastic fittings manufacturing assets and recognized a pre-tax gain of $39.8 million, and recognized fixed asset impairment charges of $4.2 million. Operating income for the segment decreased $130.3 million in the third quarter of 2014 over the third quarter of 2013 primarily as a result of these items.

OEM Segment

The OEM segment’s net sales were $743.3 million for the nine months ended September 27, 2014, compared with $741.2 million in the same period of 2013.  Of the $2.1 million increase in net sales, approximately $31.4 million was attributable to higher unit sales volume, offset by approximately $26.4 million due to lower net selling prices in the segment’s core product lines of brass rod, forgings, impacts, and commercial tube and $3.2 million due to lower sales in the segment’s other products.  Cost of goods sold decreased to $650.0 million in the first nine months of 2014 from $651.9 million in the same period of 2013, which was due primarily to factors consistent with those noted regarding net sales.  Depreciation and amortization remained relatively consistent for both periods.  Selling, general, and administrative expenses were $15.7 million in the first nine months of 2014 compared with $18.2 million in the first nine months of 2013.  The $2.5 million decrease was due primarily to lower net periodic pension and benefit costs.  Operating income increased from $61.2 million in the first nine months of 2013 to $68.5 million in the same period of 2014.

Liquidity and Capital Resources

Cash provided by operating activities during the nine months ended September 27, 2014 totaled $4.2 million, which was primarily attributable to consolidated net income of $84.5 million and depreciation and amortization of $25.9 million.  These cash increases were offset by increased receivables of $62.9 million, an increase in other assets of $15.3 million, an increase in inventories of $14.9 million, and a decrease in current liabilities of $8.7 million.  These changes are primarily due to increased sales volume in certain businesses and additional working capital needs of acquired businesses.

During the first nine months of 2014, cash used in investing activities totaled $51.1 million.  The major components of net cash used in investing activities included $30.1 million for the acquisition of Yorkshire and capital expenditures of $28.4 million, offset by $4.9 million from the sale of properties and net withdrawals from restricted cash balances of $2.5 million.

Net cash used in financing activities totaled $4.7 million, which consisted primarily of $12.6 million for payment of regular quarterly dividends to stockholders of the Company and $3.2 million for repayment of debt by Mueller-Xingrong, partially offset by $12.0 million received from the issuance of debt by MEL.

The Company has significant environmental remediation obligations.  The performance of these obligations is expected to occur over a minimum of 20 years.  Cash used for environmental remediation activities was approximately $1.4 million during the first nine months of 2014.  The Company expects to spend approximately $0.3 million for the remainder of 2014 for ongoing environmental remediation activities.  The timing of a potential payment for a $9.5 million settlement offer has not yet been determined.

Effective May 29, 2014, the Company amended its credit agreement (the Credit Agreement) entered into on March 7, 2011 to reduce the unsecured $350.0 million revolving credit facility (the Revolving Credit Facility) to $200.0 million.  The Credit Agreement also provides for a $200.0 million Term Loan Facility, which, together with the Revolving Credit Facility, both mature on December 11, 2017.  The Revolving Credit Facility backed approximately $10.6 million in letters of credit at the end of the quarter.  

Additionally, MEL’s credit agreement (the Invoice Facility, described in Note 6 of the Notes to the Condensed Consolidated Financial Statements) has a total borrowing capacity of £40.0 million, or approximately $65.0 million.  The Invoice Facility has an initial term of two years.  Borrowings outstanding under the Invoice Facility are secured by MEL’s trade account receivables denominated in British pounds.  

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On September 23, 2013, Mueller-Xingrong entered into a credit agreement with a syndicate of four banks established a secured revolving credit facility (the JV Credit Agreement), which matured on September 24, 2014.  At the maturity date, individual draws on the JV Credit Agreement had maturity dates ranging up to nine months.  Mueller-Xingrong is in process of negotiating a new credit agreement.  Management believes that cash generated by Mueller-Xingrong’s operations and cash currently on hand will be sufficient to fund its operations until such time a new credit agreement is executed, which is expected in the near term.  Borrowings under the JV Credit Agreement were approximately $24.5 million and bear an interest rate at the latest base-lending rate published by the People’s Bank of China, which was 5.6 percent at September 27, 2014.

As of September 27, 2014, the Company’s total debt was $242.7 million or 23.1 percent of its total capitalization.

Covenants contained in the Company’s financing obligations require, among other things, the maintenance of minimum levels of tangible net worth and the satisfaction of certain minimum financial ratios.  As of September 27, 2014, the Company was in compliance with all of its debt covenants.

The Company declared and paid a regular quarterly cash dividend of 7.5 cents per common share in the third quarter of 2014.  Payment of dividends in the future is dependent upon the Company’s financial condition, cash flows, capital requirements, earnings, and other factors.  

Management believes that the Credit Agreement, cash generated by operations, and currently available cash of $259.9 million will be adequate to meet the Company’s normal future capital expenditures and operational needs for the next twelve months.  The Company’s current ratio was 4.0 to 1 at September 27, 2014.

The Company’s Board of Directors has extended, until October 2015, its 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 has no obligation to repurchase any shares and may cancel, suspend, or extend the time period for the repurchase of shares at any time.  Any repurchases will be funded primarily through existing cash and cash from operations.  The Company may hold any shares repurchased in treasury or use a portion of the repurchased shares for employee benefit plans, as well as for other corporate purposes.  From its initial authorization in 1999 through September 27, 2014, the Company had repurchased approximately 4.7 million shares under this authorization.  

Other than the borrowings under the Invoice Facility described above, there have been no significant changes in the Company’s contractual cash obligations reported at December 28, 2013.

Item 3.Quantitative and Qualitative Disclosures About Market Risk

The Company is exposed to market risk from changes in raw material and energy costs, interest rates, and foreign currency exchange rates.  To reduce such risks, the Company may periodically use financial instruments.  All hedging transactions are authorized and executed pursuant to policies and procedures.  Further, the Company does not buy or sell financial instruments for trading purposes.

Cost and Availability of Raw Materials and Energy

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.  Significant increases in the cost of metal, to the extent not reflected in prices for the Company’s finished products, or the lack of availability could materially and adversely affect the Company’s business, results of operations, and financial condition.

The Company occasionally enters into future fixed-price arrangements with certain customers.  The Company may utilize futures contracts to hedge risks associated with these fixed-price arrangements.  The Company may also utilize futures contracts to manage price risk associated with inventory.  Depending on the nature of the hedge, changes in the fair value of the futures contracts will either be offset against the change in fair value of the inventory through earnings or recognized as a component of accumulated other comprehensive income (OCI) and reflected in earnings upon the sale of inventory.  Periodic value fluctuations of the contracts generally offset the value fluctuations of the underlying fixed-price transactions or inventory.  At September 27, 2014, the Company held open futures contracts to purchase approximately $18.0 million of copper through March 2015 related to fixed-price sales orders and open futures contracts to sell approximately $11.4 million of copper through March 2015 to manage the price risk associated with inventory on-hand.

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The Company may enter into futures contracts or forward fixed-price arrangements with certain vendors to manage price risk associated with natural gas purchases.  The effective portion of gains and losses with respect to these positions are deferred in stockholders’ equity as a component of accumulated OCI and reflected in earnings upon consumption of natural gas.  Periodic value fluctuations of the contracts generally offset the value fluctuations of the underlying natural gas prices.  At September 27, 2014, the Company held no open futures contracts to purchase natural gas.

Interest Rates

At September 27, 2014, the Company had variable-rate debt outstanding of $242.7 million.  At this borrowing level, a hypothetical 10 percent increase in interest rates would have had an insignificant unfavorable impact on the Company’s pretax earnings and cash flows.  The primary interest rate exposures on floating-rate debt are based on LIBOR, the base-lending rate published by the People’s Bank of China, and the base-lending rate published by HSBC.  There was no fixed rate debt outstanding as of September 27, 2014.

The Company has reduced its exposure to increases in LIBOR by entering into interest rate swap contracts. These contracts have been designated as cash flow hedges.  The fair value of these contracts has been recorded in the Condensed Consolidated Balance Sheets, and the related gains and losses on the contracts are deferred in stockholders’ equity as a component of OCI.  Deferred gains or losses on the contracts will be recognized in interest expense in the period in which the related interest payment being hedged is expensed.  The interest rate swap agreement has an effective date of January 12, 2015.

Foreign Currency Exchange Rates

Foreign currency exposures arising from transactions include firm commitments and anticipated transactions denominated in a currency other than an entity’s functional currency.  The Company and its subsidiaries generally enter into transactions denominated in their respective functional currencies.  The Company may utilize certain futures or forward contracts with financial institutions to hedge foreign currency transactional exposures.  Gains and losses with respect to these positions are deferred in stockholders’ equity as a component of accumulated OCI and reflected in earnings upon collection of receivables or payment of commitments.  At September 27, 2014, the Company had open forward contracts with a financial institution to sell approximately 1.3 million Canadian dollars, 4.2 million euros, 23.3 million Swedish kronor, and 8.9 million Norwegian kroner through January 2015.  It also held open forward contracts to buy approximately 3.0 million euros through March 2015.

The Company’s primary foreign currency exposure arises from foreign-denominated revenues and profits and their translation into U.S. dollars.  The primary currencies to which the Company is exposed include the Canadian dollar, the British pound sterling, the euro, the Mexican peso, and the Chinese renminbi.  The Company generally views as long-term its investments in foreign subsidiaries with a functional currency other than the U.S. dollar.  As a result, the Company generally does not hedge these net investments.

Cautionary Statement Regarding Forward Looking Information

Statements in this Quarterly Report on Form 10-Q that are not strictly historical may be “forward-looking” statements, which involve risks and uncertainties.  These include economic and currency conditions, continued availability of raw materials and energy, market demand, pricing, competitive and technological factors, and the availability of financing, among others, as set forth in the Company’s filings with the Securities and Exchange Commission (SEC).  The words “pro forma,” “outlook,” “estimate,” “project,” “intend,” “expect,” “believe,” “target,” and similar expressions are intended to identify forward-looking statements.  The reader should not place undue reliance on forward-looking statements, which speak only as of the date of this report.  The Company has no obligation to publicly update or revise any forward-looking statements to reflect events after the date of this report.

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Item 4.Controls and Procedures

Evaluation of Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures designed to ensure information required to be disclosed in Company reports filed under the Securities Exchange Act of 1934, as amended (the Exchange Act), is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms.  Disclosure controls and procedures are designed to provide reasonable assurance that information required to be disclosed in Company reports filed under the Exchange Act is accumulated and communicated to management, including the Company’s Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures pursuant to Rule 13a-15(e) of the Exchange Act as of September 27, 2014.  Based on that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures are effective as of September 27, 2014, to ensure that information required to be disclosed in Company reports filed under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms and (ii) accumulated and communicated to management, including the Company’s principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There were no changes in the Company’s internal control over financial reporting during the Company’s fiscal quarter ending September 27, 2014, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II.  OTHER INFORMATION

Item 1.  Legal Proceedings

General

The Company is involved in certain litigation as a result of claims that arose in the ordinary course of business.  Additionally, the Company may realize the benefit of certain legal claims and litigation in the future; these gain contingencies are not recognized in the Condensed Consolidated Financial Statements.

U.K. Actions Relating to the European Commission’s 2004 Copper Tube Decision and 2006 Copper Fittings Decision

 In the Competition Appeal Tribunal (the CAT) in the United Kingdom, IMI plc and IMI Kynoch Limited (IMI) and Boliden AB (Boliden) were served with claims by 21 claimants, all companies within the Travis Perkins Group (TP and the TP Claimants) regarding copper tube. The TP Claimants sought follow-on damages arising out of conduct described in the European Commission’s September 3, 2004, decision regarding copper tube.  The claims purported to arise from the findings of the European Commission as set forth in that decision (Copper Tube Decision).  IMI and Boliden commenced legal proceedings against Mueller Industries, Inc., WTC Holding Company, Inc., DENO Holding Company, Inc., Mueller Europe, Limited, and DENO Acquisition EURL (the five Mueller entities), and in those proceedings claimed  a contribution for any follow-on damages.

 In the High Court in the United Kingdom, IMI was also served with claims by 21 TP Claimants regarding copper fittings.  The TP Claimants are seeking follow-on damages arising out of conduct described in the European Commission’s September 20, 2006, decision regarding copper fittings.  The claims similarly purport to arise from the findings of the European Commission as set forth in that decision.  IMI commenced legal proceedings against Mueller Industries, Inc., Mueller Europe Limited, and WTC Holding Company, Inc. (the three Mueller entities), and in those proceedings claimed a contribution for any follow-on damages.

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 As to the claims arising from the Copper Tube Decision brought in the CAT, following the CAT’s grant of approval, the case was transferred to the High Court. Mueller’s defense in response to the contribution claims brought by IMI and Boliden was served on March 15, 2013.  During the second quarter of 2014, a settlement was reached in respect of the claims against Mueller and the High Court has dismissed the claims against Mueller. The total payment made by Mueller pursuant to the settlement did not have a material impact on the Company’s financial position, results of operations, or cash flows.

As to the claims arising from the Copper Fittings Decision, Mueller's defense in response to the contribution claims brought by IMI was served on May 30, 2014.  During the third quarter of 2014, a settlement was reached in respect of the claims against Mueller and the High Court has dismissed the claims against Mueller.  The total payment made by Mueller pursuant to the settlement did not have a material impact on the Company’s financial position, results of operations, or cash flows.

Environmental

Lead Refinery Site

U.S.S. Lead Refinery, Inc. (Lead Refinery), a non-operating wholly owned subsidiary of Mining Remedial Recovery Company, has conducted corrective action and interim remedial activities and studies (collectively, Site Activities) at Lead Refinery’s East Chicago, Indiana site pursuant to the Resource Conservation and Recovery Act.  Site Activities, which began in December 1996, have been substantially concluded.  Lead Refinery is required to perform monitoring and maintenance activities with respect to Site 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 $0.1 million annually in 2013, 2012 and 2011 with respect to this site.  Approximate costs to comply with the post-closure permit, including associated general and administrative costs, are between $2.1 million and $3.9 million over the next 20 years.

On April 9, 2009, pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), the Environmental Protection Agency (EPA) added the Lead Refinery site, and properties surrounding the Lead Refinery site, to the National Priorities List (NPL).  The NPL is a list of priority sites where the EPA has determined that there has been a release or threatened release of hazardous substances that warrant investigation and, if appropriate, remedial action.  The NPL does not assign liability to any party including the owner or operator of a property placed on the NPL.  The placement of a site on the NPL does not necessarily mean that remedial action must be taken.  On July 17, 2009, Lead Refinery received a written notice from the EPA that the agency is of the view that Lead Refinery may be a potentially responsible party (PRP) under CERCLA in connection with the release or threat of release of hazardous substances including lead into properties surrounding the Lead Refinery site.  The EPA has identified two other PRPs in connection with the release or threat of release of hazardous substances into properties surrounding the Lead Refinery site. PRPs under CERCLA include current and former owners and operators of a site, persons who arranged for disposal or treatment of hazardous substances at a site, or persons who accepted hazardous substances for transport to a site.  In November 2012, the EPA adopted a remedy in connection with properties surrounding the Lead Refinery site.  The EPA has estimated that the cost to implement the November 2012 remedy will be $30.0 million.  In September 2014, the EPA announced that it had entered into a settlement with the two other PRPs whereby they will pay approximately $26.0 million to fund the cleanup of approximately 300 properties surrounding the Lead Refinery site.

The Company monitors EPA press releases and periodically communicates with the EPA to inquire of the status of the investigation and cleanup of the Lead Refinery site.  As of September 27, 2014, the EPA has not conducted an investigation of the Lead Refinery site pursuant to CERCLA, proposed remedies for the Lead Refinery site, or informed Lead Refinery that it is a PRP at the Lead Refinery site.  Until the extent of any remedial action is determined for the Lead Refinery site, the Company is unable to determine the likelihood of a material adverse outcome or the amount or range of a potential loss with respect to placement of the Lead Refinery site and adjacent properties on the NPL.  Lead Refinery lacks the financial resources needed to undertake any investigations or remedial action that may be required by the EPA pursuant to CERCLA.

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Item 1A.  Risk Factors

The Company is exposed to risk as it operates its businesses.  To provide a framework to understand the operating environment of the Company, we have provided a brief explanation of the more significant risks associated with our businesses in our 2013 Annual Report on Form 10-K.  There have been no material changes in risk factors that were previously disclosed in our 2013 Annual Report on Form 10-K.

Item 2.Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities

The Company’s Board of Directors has extended, until October 2015, its 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 has no obligation to repurchase any shares and may cancel, suspend, or extend the time period for the repurchase of shares at any time.  Any repurchases will be funded primarily through existing cash and cash from operations.  The Company may hold any shares repurchased in treasury or use a portion of the repurchased shares for employee benefit plans, as well as for other corporate purposes.  From its initial authorization in 1999 through September 27, 2014, the Company had repurchased approximately 4.7 million shares under this authorization.  Below is a summary of the Company’s stock repurchases for the period ended September 27, 2014.

	(a)		(b)		(c)	(d)
	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares That May Yet Be Purchased Under the Plans or Programs
						15,287,060	(1)
June 29 – July 26, 2014	6,194	(2)	$	29.49	—
July 27  – August 23, 2014	58,015	(2)		28.43	—
August 24 – September 27, 2014	424	(2)		29.39	—
(1) Shares available to be purchased under the Company’s 20 million share repurchase authorization until October 2015. The extension of the authorization was announced on October 24, 2014.
(2) 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.

30

Item 6.Exhibits

31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.CAL	XBRL Taxonomy Extension Calculation Linkbase
101.DEF	XBRL Taxonomy Extension Definition Linkbase
101.INS	XBRL Instance Document
101.LAB	XBRL Taxonomy Extension Label Linkbase
101.PRE	XBRL Presentation Linkbase Document
101.SCH	XBRL Taxonomy Extension Schema

Items 3, 4, and 5 are not applicable and have been omitted.

31

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	MUELLER INDUSTRIES, INC.
	/s/ Jeffrey A. Martin
	Jeffrey A. Martin
October 24, 2014	Chief Financial Officer and Treasurer
Date	(Principal Financial and Accounting Officer)
	/s/ Richard W. Corman
October 24, 2014	Richard W. Corman
Date	Vice President – Controller

32

EXHIBIT INDEX
Exhibits	Description
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.CAL	XBRL Taxonomy Extension Calculation Linkbase
101.DEF	XBRL Taxonomy Extension Definition Linkbase
101.INS	XBRL Instance Document
101.LAB	XBRL Taxonomy Extension Label Linkbase
101.PRE	XBRL Presentation Linkbase Document
101.SCH	XBRL Taxonomy Extension Schema

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Gregory L Christopher, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Mueller Industries, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)), for the registrant and have:
	a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
	a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
	b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: October 24, 2014
	/s/ Gregory L. Christopher
	Gregory L. Christopher
	Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Jeffrey A. Martin, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Mueller Industries, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)), for the registrant and have:
	a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
	a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
	b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: October 24, 2014
	/s/ Jeffrey A. Martin
	Jeffrey A. Martin
	Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Mueller Industries, Inc. (the “Company”) on Form 10-Q for the period ending September 27, 2014 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Gregory L. Christopher, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
		/s/ Gregory L. Christopher
		Gregory L. Christopher
		Chief Executive Officer
		October 24, 2014




EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Mueller Industries, Inc. (the “Company”) on Form 10-Q for the period ending September 27, 2014 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Jeffrey A. Martin, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
		/s/ Jeffrey A. Martin
		Jeffrey A. Martin
		Chief Financial Officer
		October 24, 2014

XML

Derivative Instruments and Hedging Activities (Details) (USD $)					9 Months Ended
	Sep. 27, 2014 Designated as Hedging Instrument [Member]		Dec. 28, 2013 Designated as Hedging Instrument [Member]		Sep. 27, 2014 Commodity Contracts [Member] Cash Flow Hedging [Member] Long [Member]	Sep. 27, 2014 Commodity Contracts [Member] Fair Value Hedging [Member] Short [Member]	Sep. 27, 2014 Other Current Asset [Member] Commodity Contracts [Member] Designated as Hedging Instrument [Member]	Dec. 28, 2013 Other Current Asset [Member] Commodity Contracts [Member] Designated as Hedging Instrument [Member]	Sep. 27, 2014 Other Current Asset [Member] Foreign Currency Contracts [Member] Designated as Hedging Instrument [Member]	Dec. 28, 2013 Other Current Asset [Member] Foreign Currency Contracts [Member] Designated as Hedging Instrument [Member]	Sep. 27, 2014 Other Assets [Member] Interest Rate Swap [Member] Designated as Hedging Instrument [Member]	Dec. 28, 2013 Other Assets [Member] Interest Rate Swap [Member] Designated as Hedging Instrument [Member]	Sep. 27, 2014 Other Current Liabilities [Member] Commodity Contracts [Member] Designated as Hedging Instrument [Member]	Dec. 28, 2013 Other Current Liabilities [Member] Commodity Contracts [Member] Designated as Hedging Instrument [Member]	Sep. 27, 2014 Other Current Liabilities [Member] Foreign Currency Contracts [Member] Designated as Hedging Instrument [Member]	Dec. 28, 2013 Other Current Liabilities [Member] Foreign Currency Contracts [Member] Designated as Hedging Instrument [Member]	Sep. 27, 2014 Other Liabilities [Member] Interest Rate Swap [Member] Designated as Hedging Instrument [Member]	Dec. 28, 2013 Other Liabilities [Member] Interest Rate Swap [Member] Designated as Hedging Instrument [Member]
Derivatives, Fair Value [Line Items]
Open future contracts to purchase copper					$ 18,000,000	$ 11,400,000
Time period for open copper future contract purchases					15 months	6 months
Fair value of future contracts with gain (loss) position					(99,000)	445,000
Other assets: Gain positions											8,000	1,324,000
Other current assets: Gain positions							526,000	448,000	0	836,000
Other current assets: Loss positions							(76,000)	(10,000)
Other current liability: Gain positions													10,000	340,000		0
Other current liability: Loss positions													(115,000)	(2,107,000)	(68,000)
Other liabilities: Loss positions																	0	0
Assets fair value	458,000	[1]	2,598,000	[1]
Liabilities fair value	$ (173,000)	[1]	$ (1,767,000)	[1]

[1] Does not include the impact of cash collateral received from or provided to counterparties.

XML

Earnings per Common Share (Details) In Thousands, unless otherwise specified	9 Months Ended	3 Months Ended
	Sep. 27, 2014	Sep. 27, 2014 Stock Option [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)		180
Stock split, Conversion ratio	two-for-one

XML

Commitments and Contingencies

9 Months Ended

Sep. 27, 2014

Commitments and Contingencies [Abstract]

Commitments and Contingencies

Note 2 – Commitments and Contingencies

The Company is involved in certain litigation as a result of claims that arose in the ordinary course of business, which management believes will not have a material adverse effect on the Company’s financial position, results of operations, or cash flows.  The Company may also realize the benefit of certain legal claims and litigation in the future; these gain contingencies are not recognized in the Condensed Consolidated Financial Statements.

U.K. Actions Relating to the European Commission’s 2004 Copper Tube Decision and 2006 Copper Fittings Decision

In the Competition Appeal Tribunal (the CAT) in the United Kingdom, IMI plc and IMI Kynoch Limited (IMI) and Boliden AB (Boliden) were served with claims by 21 claimants, all companies within the Travis Perkins Group (TP and the TP Claimants) regarding copper tube. The TP Claimants sought follow-on damages arising out of conduct described in the European Commission’s September 3, 2004, decision regarding copper tube.  The claims purported to arise from the findings of the European Commission as set forth in that decision (Copper Tube Decision).  IMI and Boliden commenced legal proceedings against Mueller Industries, Inc., WTC Holding Company, Inc., DENO Holding Company, Inc., Mueller Europe, Limited, and DENO Acquisition EURL (the five Mueller entities), and in those proceedings claimed  a contribution for any follow-on damages.

In the High Court in the United Kingdom, IMI was also served with claims by 21 TP Claimants regarding copper fittings.  The TP Claimants are seeking follow-on damages arising out of conduct described in the European Commission’s September 20, 2006, decision regarding copper fittings.  The claims similarly purport to arise from the findings of the European Commission as set forth in that decision.  IMI commenced legal proceedings against Mueller Industries, Inc., Mueller Europe Limited, and WTC Holding Company, Inc. (the three Mueller entities), and in those proceedings claimed a contribution for any follow-on damages.

 As to the claims arising from the Copper Tube Decision brought in the CAT, following the CAT’s grant of approval, the case was transferred to the High Court. Mueller’s defense in response to the contribution claims brought by IMI and Boliden was served on March 15, 2013.  During the second quarter of 2014, a settlement was reached in respect of the claims against Mueller and the High Court has dismissed the claims against Mueller. The total payment made by Mueller pursuant to the settlement did not have a material impact on the Company’s financial position, results of operations, or cash flows.

As to the claims arising from the Copper Fittings Decision, Mueller's defense in response to the contribution claims brought by IMI was served on May 30, 2014.  During the third quarter of 2014, a settlement was reached in respect of the claims against Mueller and the High Court has dismissed the claims against Mueller.  The total payment made by Mueller pursuant to the settlement did not have a material impact on the Company’s financial position, results of operations, or cash flows.

Environmental

Lead Refinery Site

U.S.S. Lead Refinery, Inc. (Lead Refinery), a non-operating wholly owned subsidiary of Mining Remedial Recovery Company, has conducted corrective action and interim remedial activities and studies (collectively, Site Activities) at Lead Refinery’s East Chicago, Indiana site pursuant to the Resource Conservation and Recovery Act.  Site Activities, which began in December 1996, have been substantially concluded.  Lead Refinery is required to perform monitoring and maintenance activities with respect to Site 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 $0.1 million annually in 2013, 2012 and 2011 with respect to this site.  Approximate costs to comply with the post-closure permit, including associated general and administrative costs, are between $2.1 million and $3.9 million over the next 20 years.

On April 9, 2009, pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), the Environmental Protection Agency (EPA) added the Lead Refinery site, and properties surrounding the Lead Refinery site, to the National Priorities List (NPL).  The NPL is a list of priority sites where the EPA has determined that there has been a release or threatened release of hazardous substances that warrant investigation and, if appropriate, remedial action.  The NPL does not assign liability to any party including the owner or operator of a property placed on the NPL.  The placement of a site on the NPL does not necessarily mean that remedial action must be taken.  On July 17, 2009, Lead Refinery received a written notice from the EPA that the agency is of the view that Lead Refinery may be a potentially responsible party (PRP) under CERCLA in connection with the release or threat of release of hazardous substances including lead into properties surrounding the Lead Refinery site.  The EPA has identified two other PRPs in connection with the release or threat of release of hazardous substances into properties surrounding the Lead Refinery site. PRPs under CERCLA include current and former owners and operators of a site, persons who arranged for disposal or treatment of hazardous substances at a site, or persons who accepted hazardous substances for transport to a site.  In November 2012, the EPA adopted a remedy in connection with properties surrounding the Lead Refinery site.  The EPA has estimated that the cost to implement the November 2012 remedy will be $30.0 million.  In September 2014, the EPA announced that it had entered into a settlement with the two other PRPs whereby they will pay approximately $26.0 million to fund the cleanup of approximately 300 properties surrounding the Lead Refinery site.

The Company monitors EPA press releases and periodically communicates with the EPA to inquire of the status of the investigation and cleanup of the Lead Refinery site.  As of September 27, 2014, the EPA has not conducted an investigation of the Lead Refinery site pursuant to CERCLA, proposed remedies for the Lead Refinery site, or informed Lead Refinery that it is a PRP at the Lead Refinery site.  Until the extent of any remedial action is determined for the Lead Refinery site, the Company is unable to determine the likelihood of a material adverse outcome or the amount or range of a potential loss with respect to placement of the Lead Refinery site and adjacent properties on the NPL.  Lead Refinery lacks the financial resources needed to undertake any investigations or remedial action that may be required by the EPA pursuant to CERCLA.

Other

Guarantees, in the form of letters of credit, are issued by the Company generally to assure the payment of insurance deductibles and certain retiree health benefits.  The terms of the Company’s guarantees are generally one year but are renewable annually as required.  These letters are primarily backed by the Company’s revolving credit facility.  The maximum payments that the Company could be required to make under its guarantees at September 27, 2014, were $10.6 million.

XML

Industry Segments (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 27, 2014	Sep. 28, 2013	Sep. 27, 2014	Sep. 28, 2013
Industry Segments [Abstract]
Decrease in accruals related to import duties included in cost of goods sold			$ 3,100,000
Summary of segment information [Abstract]
Net sales	602,820,000	528,854,000	1,826,885,000	1,670,826,000
Cost of goods sold	521,278,000	456,302,000	1,574,830,000	1,440,277,000
Depreciation and amortization	8,952,000	7,882,000	25,651,000	24,364,000
Selling, general, and administrative expense	34,864,000	32,921,000	102,167,000	99,078,000
Gain on sale of plastic fittings manufacturing assets	0	(39,765,000)	0	(39,765,000)
Impairment charges	0	4,304,000	0	4,304,000
Insurance settlement	0	0	0	(106,332,000)
Operating income	37,726,000	67,210,000	124,237,000	248,900,000
Interest expense	(1,430,000)	(1,243,000)	(3,913,000)	(2,940,000)
Other income, net	225,000	842,000	440,000	4,324,000
Income before income taxes	36,521,000	66,809,000	120,764,000	250,284,000
Corporate and Eliminations [Member]
Summary of segment information [Abstract]
Net sales	(2,906,000)	(3,164,000)	(9,497,000)	(12,510,000)
Cost of goods sold	(2,874,000)	(3,132,000)	(9,398,000)	(12,380,000)
Depreciation and amortization	517,000	560,000	1,725,000	1,649,000
Selling, general, and administrative expense	5,858,000	6,406,000	18,789,000	19,665,000
Gain on sale of plastic fittings manufacturing assets		0		0
Impairment charges		0		0
Insurance settlement				(2,437,000)
Operating income	(6,407,000)	(6,998,000)	(20,613,000)	(19,007,000)
Plumbing and Refrigeration Segment [Member] | Operating Segments [Member]
Summary of segment information [Abstract]
Net sales	357,843,000	301,622,000	1,093,060,000	942,109,000
Cost of goods sold	308,927,000	258,035,000	934,208,000	800,782,000
Depreciation and amortization	5,287,000	4,172,000	14,803,000	12,861,000
Selling, general, and administrative expense	23,473,000	20,736,000	67,678,000	61,245,000
Gain on sale of plastic fittings manufacturing assets		(39,765,000)		(39,765,000)
Impairment charges		4,173,000		4,173,000
Insurance settlement				(103,895,000)
Operating income	20,156,000	54,271,000	76,371,000	206,708,000
OEM Segment [Member] | Operating Segments [Member]
Summary of segment information [Abstract]
Net sales	247,883,000	230,396,000	743,322,000	741,227,000
Cost of goods sold	215,225,000	201,399,000	650,020,000	651,875,000
Depreciation and amortization	3,148,000	3,150,000	9,123,000	9,854,000
Selling, general, and administrative expense	5,533,000	5,779,000	15,700,000	18,168,000
Gain on sale of plastic fittings manufacturing assets		0		0
Impairment charges		131,000		131,000
Insurance settlement				0
Operating income	$ 23,977,000	$ 19,937,000	$ 68,479,000	$ 61,199,000

XML

Inventories (Details) (USD $) In Thousands, unless otherwise specified	Sep. 27, 2014	Dec. 28, 2013
Inventories [Abstract]
Raw materials and supplies	$ 63,438	$ 54,613
Work-in-process	44,232	43,796
Finished goods	180,377	159,422
Valuation reserves	(5,554)	(6,115)
Inventories	$ 282,493	$ 251,716

XML

Debt (Details) In Millions, unless otherwise specified	0 Months Ended		9 Months Ended	0 Months Ended	9 Months Ended	0 Months Ended	9 Months Ended
	Mar. 21, 2014 Mueller Europe Limited [Member] USD ($)	Mar. 21, 2014 Mueller Europe Limited [Member] GBP (£)	Sep. 27, 2014 Mueller Europe Limited [Member] USD ($)	Sep. 23, 2013 Mueller Xingrong Line of Credit [Member] Bank	Sep. 27, 2014 Mueller Xingrong Line of Credit [Member] USD ($)	Sep. 23, 2013 Mueller Xingrong Line of Credit [Member] Maximum [Member]	Sep. 27, 2014 Revolving Credit Facility [Member]	May 29, 2014 Revolving Credit Facility [Member] USD ($)	Mar. 29, 2014 Revolving Credit Facility [Member] USD ($)	May 29, 2014 Term Loan [Member] USD ($)
Line of Credit Facility [Line Items]
Maturity Date				Sep. 24, 2014			Dec. 11, 2017
Line of credit facility maximum borrowing capacity	$ 65.9	£ 40.0						$ 200.0	$ 350.0	$ 200.0
Initial term of the Invoice Facility	2 years	2 years
Borrowings outstanding			$ 11.7		$ 24.5
Debt instrument variable rate basis			bear interest at the latest base-lending rate published by HSBC plus 155 basis points		bear an interst rate at the latest base-lending rate published by the People’s Bank of China
Basis spread on variable rate (in hundredths)			1.55%
Debt, stated interest rate (in hundredths)			2.05%		5.60%
Number of banks in the credit agreement syndicate				4
Range of period at maturity date						9 months

XML

Employee Benefits (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 27, 2014	Sep. 28, 2013	Sep. 27, 2014	Sep. 28, 2013
Pension Benefits [Member]
Components of net periodic benefit cost [Abstract]
Service cost	$ 199	$ 350	$ 596	$ 1,051
Interest cost	2,064	2,023	6,191	6,070
Expected return on plan assets	(3,202)	(2,845)	(9,604)	(8,535)
Amortization of prior service cost (credit)	1	1	1	1
Amortization of net (gain) loss	188	984	565	2,954
Net periodic benefit (income) cost	(750)	513	(2,251)	1,541
Other Benefits [Member]
Components of net periodic benefit cost [Abstract]
Service cost	88	69	264	207
Interest cost	181	155	544	467
Amortization of prior service cost (credit)	0	2	(1)	5
Amortization of net (gain) loss	(55)	(41)	(164)	(125)
Net periodic benefit (income) cost	$ 214	$ 185	$ 643	$ 554

XML

Earnings per Common Share

9 Months Ended

Sep. 27, 2014

Earnings per Common Share [Abstract]

Earnings per Common Share

Note 1 – Earnings per Common Share

Basic per share amounts have been computed based on the average number of common shares outstanding.  Diluted per share amounts reflect the increase in average common shares outstanding that would result from the assumed exercise of outstanding stock options and vesting of restricted stock awards, computed using the treasury stock method.  Approximately 180 thousand stock based awards were excluded from the computation of diluted earnings per share for the quarter ended September 27, 2014 because they were antidilutive.

On February 21, 2014, the Company’s Board of Directors announced a two-for-one stock split of its common stock effected in the form of a stock dividend of one share for each outstanding share.  The record date for the stock split was March 14, 2014, and the additional shares were distributed on March 28, 2014.  Accordingly, all references to share and per share amounts presented in the Condensed Consolidated Financial Statements and this Quarterly Report on Form 10-Q have been adjusted retroactively to reflect the stock split.

XML

Income Taxes (Details) (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended			9 Months Ended
	Sep. 27, 2014	Jun. 28, 2014	Sep. 28, 2013	Sep. 27, 2014	Sep. 28, 2013
Income Taxes [Abstract]
Effective tax rate (in hundredths)	33.00%		40.00%	30.00%	37.00%
Reduction for U.S. production activities	$ (1.0)			$ (3.5)	$ (3.9)
Increase (decrease) in valuation allowances		(4.8)	1.0	(5.7)	(0.4)
Provision for state income taxes, net of federal benefit	0.3		1.2	2.8	7.4
Effect of foreign adjustments			0.4	(0.5)	(1.1)
Valuation allowance release effect on diluted earnings per share (in dollars per share)		$ 0.08
Unrecognized tax benefits	2.8			2.8
Impairment of goodwill			$ 1.8		$ 1.8

XML

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended				9 Months Ended
	Sep. 27, 2014		Sep. 28, 2013		Sep. 27, 2014		Sep. 28, 2013
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) [Abstract]
Net sales	$ 602,820		$ 528,854		$ 1,826,885		$ 1,670,826
Cost of goods sold	521,278		456,302		1,574,830		1,440,277
Depreciation and amortization	8,952		7,882		25,651		24,364
Selling, general, and administrative expense	34,864		32,921		102,167		99,078
Gain on sale of plastic fittings manufacturing assets	0		(39,765)		0		(39,765)
Impairment charges	0		4,304		0		4,304
Insurance settlements	0		0		0		(106,332)
Operating income	37,726		67,210		124,237		248,900
Interest expense	(1,430)		(1,243)		(3,913)		(2,940)
Other income, net	225		842		440		4,324
Income before income taxes	36,521		66,809		120,764		250,284
Income tax expense	(12,199)		(26,816)		(36,279)		(92,015)
Consolidated net income	24,322		39,993		84,485		158,269
Net income attributable to noncontrolling interest	(499)		(129)		(911)		(1,053)
Net income attributable to Mueller Industries, Inc.	$ 23,823		$ 39,864		$ 83,574		$ 157,216
Weighted average shares for basic earnings per share (in shares)	56,107	[1]	55,787	[1]	55,999	[1]	55,704	[1]
Effect of dilutive stock-based awards (in shares)	637	[1]	723	[1]	746	[1]	737	[1]
Adjusted weighted average shares for diluted earnings per share (in shares)	56,744	[1]	56,510	[1]	56,745	[1]	56,441	[1]
Basic earnings per share (in dollars per share)	$ 0.42	[1]	$ 0.71	[1]	$ 1.49	[1]	$ 2.82	[1]
Diluted earnings per share (in dollars per share)	$ 0.42	[1]	$ 0.71	[1]	$ 1.47	[1]	$ 2.79	[1]
Dividends per share (in dollars per share)	$ 0.075	[1]	$ 0.0625	[1]	$ 0.225	[1]	$ 0.1875	[1]

[1] Adjusted retroactively to reflect the two-for-one stock split that occurred on March 14, 2014.

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CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Sep. 27, 2014	Dec. 28, 2013
Current assets:
Allowance for doubtful accounts	$ 981	$ 2,391
Mueller Industries, Inc. stockholders' equity:
Preferred stock, par value (in dollars per share)	$ 1.00	$ 1.00
Preferred stock, shares authorized (in shares)	5,000,000	5,000,000
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	100,000,000	100,000,000
Common stock, shares issued (in shares)	80,183,004	80,183,004
Common stock, shares outstanding (in shares)	56,885,661	56,604,674	[1]

[1] Adjusted retroactively to reflect the two-for-one stock split that occurred on March 14, 2014.

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Accumulated Other Comprehensive Income (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended				9 Months Ended
	Sep. 27, 2014		Sep. 28, 2013		Sep. 27, 2014		Sep. 28, 2013
Changes In Accumulated Other Comprehensive Income [Roll Forward]
Beginning balance					$ (10,819)		$ (42,623)
Other comprehensive income (loss) before reclassifications					(4,839)		4,709
Amounts reclassified from AOCI					349		(1,413)
Net current-period other comprehensive income					(4,490)		3,296
Ending balance	(15,309)		(39,327)		(15,309)		(39,327)
Reclassification adjustments out of AOCI [Abstract]
Cost of goods sold	(521,278)		(456,302)		(1,574,830)		(1,440,277)
Net of tax and noncontrolling interest	(174)	[1]	531	[2]	(1,650)	[3]	1,005	[4]
Selling, general, and administrative expense	(34,864)		(32,921)		(102,167)		(99,078)
Cumulative Translation Adjustment [Member]
Changes In Accumulated Other Comprehensive Income [Roll Forward]
Beginning balance					(462)		(3,033)
Other comprehensive income (loss) before reclassifications					(3,337)		211
Amounts reclassified from AOCI					0		0
Net current-period other comprehensive income					(3,337)		211
Ending balance	(3,799)		(2,822)		(3,799)		(2,822)
Unrealized Losses/(Gains) on Derivatives [Member]
Changes In Accumulated Other Comprehensive Income [Roll Forward]
Beginning balance					1,546		(166)
Other comprehensive income (loss) before reclassifications					(1,652)		4,314
Amounts reclassified from AOCI					2		(3,309)
Net current-period other comprehensive income					(1,650)		1,005
Ending balance	(104)		839		(104)		839
Unrealized Losses/(Gains) on Derivatives [Member] | Amount Reclassified from AOCI [Member]
Reclassification adjustments out of AOCI [Abstract]
Cost of goods sold	(214)		1,046		351		4,922
Property, plant and equipment, net	(71)		0		(446)		0
Income tax benefit (expense)	65		(258)		97		(1,613)
Net of tax	(220)		788		2		3,309
Noncontrolling interest	0		0		0		0
Net of tax and noncontrolling interest	(220)		788		2		3,309
Minimum Pension/OPEB Liability Adjustment [Member]
Changes In Accumulated Other Comprehensive Income [Roll Forward]
Beginning balance					(12,158)		(39,527)
Other comprehensive income (loss) before reclassifications					143		79
Amounts reclassified from AOCI					347		1,896
Net current-period other comprehensive income					490		1,975
Ending balance	(11,668)		(37,552)		(11,668)		(37,552)
Minimum Pension/OPEB Liability Adjustment [Member] | Amount Reclassified from AOCI [Member]
Reclassification adjustments out of AOCI [Abstract]
Selling, general, and administrative expense	134		946		401		2,835
Income tax expense	(19)		(318)		(54)		(939)
Net of tax	115		628		347		1,896
Noncontrolling interest	0		0		0		0
Net of tax and noncontrolling interest	115		628		347		1,896
Unrealized Gains on Equity Investments [Member]
Changes In Accumulated Other Comprehensive Income [Roll Forward]
Beginning balance					255		103
Other comprehensive income (loss) before reclassifications					7		105
Amounts reclassified from AOCI					0		0
Net current-period other comprehensive income					7		105
Ending balance	$ 262		$ 208		$ 262		$ 208

[1] Net of tax of $42

[2] Net of tax of $(280)

[3] Net of tax of $907

[4] Net of tax of $(607)

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Employee Benefits (Tables)

9 Months Ended

Sep. 27, 2014

Employee Benefits [Abstract]

Components of net periodic benefit costs

The Company sponsors several qualified and nonqualified pension plans and other postretirement benefit plans for certain of its employees.  The components of net periodic benefit cost are as follows:

	For the Quarter Ended						For the Nine Months Ended
(In thousands)	September 27, 2014			September 28, 2013			September 27, 2014			September 28, 2013
Pension benefits:
Service cost	$	199		$	350		$	596		$	1,051
Interest cost		2,064			2,023			6,191			6,070
Expected return on plan assets		(3,202	)		(2,845	)		(9,604	)		(8,535	)
Amortization of prior service cost		1			1			1			1
Amortization of net loss		188			984			565			2,954
Net periodic benefit (income) cost	$	(750	)	$	513		$	(2,251	)	$	1,541
Other benefits:
Service cost	$	88		$	69		$	264		$	207
Interest cost		181			155			544			467
Amortization of prior service cost (credit)		—			2			(1	)		5
Amortization of net gain		(55	)		(41	)		(164	)		(125	)
Net periodic benefit cost	$	214		$	185		$	643		$	554

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Acquisitions and Dispositions (Details) (USD $)	3 Months Ended		9 Months Ended		0 Months Ended	12 Months Ended	0 Months Ended				12 Months Ended
	Sep. 27, 2014	Sep. 28, 2013	Sep. 27, 2014	Sep. 28, 2013	Feb. 28, 2014 KME Yorkshire Limited [Member]	Dec. 29, 2012 KME Yorkshire Limited [Member]	Feb. 28, 2014 KME Yorkshire Limited [Member] Customer Lists [Member]	Feb. 28, 2014 KME Yorkshire Limited [Member] Non-compete agreement [Member]	Feb. 28, 2014 KME Yorkshire Limited [Member] Trade names and licenses [Member]	Oct. 17, 2013 Howell Metal Company [Member]	Aug. 31, 2013 Howell Metal Company [Member]
Business Acquisition [Line Items]
Cost of acquisition					$ 30,100,000					$ 55,300,000
Pro forma net sales						196,100,000					156,300,000
Fair value of assets acquired					20,700,000					63,000,000
Fair value of assets acquired - receivables										14,600,000
Fair value of assets acquired - inventories					17,600,000					27,600,000
Fair value of assets acquired - property, plant and equipment					2,100,000					20,300,000
Fair value of assets acquired - other current assets					1,000,000					500,000
Fair value of liabilities assumed					15,600,000					11,400,000
Fair value of liabilities assumed - accounts payable and accrued expenses					15,200,000					9,900,000
Fair value of liabilities assumed - other current liabilities					400,000					1,500,000
Remaining purchase price allocated to other intangible assets					16,900,000		11,300,000	4,500,000	1,100,000	2,300,000
Intangible assets useful life							19 years	3 years	10 years
Remaining purchase price allocated to goodwill					8,100,000					1,400,000
Total sales price of property				66,200,000
Cash proceeds from sale of property				61,200,000
Amount receivable due to sale of property				5,000,000
Pre-tax gain on sale of property	0	39,765,000	0	39,765,000
Amount of pre-diluted share after tax (in dollars per share)		$ 0.81
Extended supply agreement term				5 years
Net book value of assets disposed		15,900,000		15,900,000
Goodwill allocated to disposal group		10,500,000		10,500,000
Impairment charge recognized on fair value of disposed assets		$ 3,200,000

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Accumulated Other Comprehensive Income (Tables)

9 Months Ended

Sep. 27, 2014

Accumulated Other Comprehensive Income [Abstract]

Changes in accumulated OCI by component, net of taxes and noncontrolling interest

Changes in AOCI by component, net of taxes and noncontrolling interest, were as follows:

	For the Nine Months Ended September 27, 2014
(In thousands)		Cumulative Translation Adjustment			Unrealized (Losses)/Gains on Derivatives			Minimum Pension/OPEB Liability Adjustment			Unrealized Gains on Equity Investments		Total
Beginning balance		$	(462	)	$	1,546		$	(12,158	)	$	255	$	(10,819	)
Other comprehensive income (loss) before reclassifications			(3,337	)		(1,652	)		143			7		(4,839	)
Amounts reclassified from AOCI			—			2			347			—		349
Net current-period other comprehensive income			(3,337	)		(1,650	)		490			7		(4,490	)
Ending balance		$	(3,799	)	$	(104	)	$	(11,668	)	$	262	$	(15,309	)

	For the Nine Months Ended September 28, 2013
(In thousands)		Cumulative Translation Adjustment			Unrealized (Losses)/Gains on Derivatives			Minimum Pension/OPEB Liability Adjustment			Unrealized Gains on Equity Investments		Total
Beginning balance		$	(3,033	)	$	(166	)	$	(39,527	)	$	103	$	(42,623	)
Other comprehensive income (loss) before reclassifications			211			4,314			79			105		4,709
Amounts reclassified from AOCI			—			(3,309	)		1,896			—		(1,413	)
Net current-period other comprehensive income			211			1,005			1,975			105		3,296
Ending balance		$	(2,822	)	$	839		$	(37,552	)	$	208	$	(39,327	)

Reclassification adjustments out of accumulated OCI

Reclassification adjustments out of AOCI were as follows:

	Amount reclassified from AOCI
	For the Quarter Ended
(In thousands)	Sept. 27, 2014			Sept. 28, 2013			Affected line item
Unrealized losses/(gains) on derivatives:
Commodity contracts	$	(214	)	$	1,046		Cost of goods sold
Foreign currency contracts		(71	)		—		Property, plant, and equipment, net
		65			(258	)	Income tax benefit (expense)
		(220	)		788		Net of tax
		—			—		Noncontrolling interest
	$	(220	)	$	788		Net of tax and noncontrolling  interest
Amortization of employee benefit items:
Amortization of net loss and prior service cost	$	134		$	946		Selling, general, and administrative  expense
		(19	)		(318	)	Income tax expense
		115			628		Net of tax
		—			—		Noncontrolling interest
	$	115		$	628		Net of tax and noncontrolling  interest

	Amount reclassified from AOCI
	For the Nine Months Ended
(In thousands)	Sept. 27, 2014			Sept. 28, 2013			Affected line item
Unrealized losses/(gains) on derivatives:
Commodity contracts	$	351		$	4,922		Cost of goods sold
Foreign currency contracts		(446	)		—		Property, plant, and equipment, net
		97			(1,613	)	Income tax benefit (expense)
		2			3,309		Net of tax
		—			—		Noncontrolling interest
	$	2		$	3,309		Net of tax and noncontrolling  interest
Amortization of employee benefit items:
Amortization of net loss and prior service cost	$	401		$	2,835		Selling, general, and administrative expense
		(54	)		(939	)	Income tax expense
		347			1,896		Net of tax
		—			—		Noncontrolling interest
	$	347		$	1,896		Net of tax and noncontrolling interest

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 27, 2014	Sep. 28, 2013
Cash flows from operating activities
Consolidated net income	$ 84,485	$ 158,269
Reconciliation of consolidated net income to net cash provided by operating activities:
Depreciation and amortization	25,888	24,583
Stock-based compensation expense	4,957	4,560
Insurance settlements	0	(106,332)
Insurance proceeds - noncapital related	0	32,395
Gain on sale of plastic fittings manufacturing assets	0	(39,765)
Gain on disposal of properties	(1,146)	(3,316)
Impairment charges	0	4,304
Deferred income taxes	(6,908)	14,152
Income tax benefit from exercise of stock options	(829)	(670)
Changes in assets and liabilities, net of business acquired:
Receivables	(62,854)	(38,370)
Inventories	(14,868)	(4,566)
Other assets	(15,272)	4,886
Current liabilities	(8,675)	19,649
Other liabilities	(797)	(297)
Other, net	223	508
Net cash provided by operating activities	4,204	69,990
Cash flows from investing activities
Capital expenditures	(28,406)	(33,402)
Acquisition of business	(30,137)	0
Insurance proceeds for property and equipment	0	29,910
Net withdrawals from (deposits into) restricted cash balances	2,507	(2,473)
Proceeds from sales of assets	4,920	64,966
Net cash (used in) provided by investing activities	(51,116)	59,001
Cash flows from financing activities
Dividends paid to stockholders of Mueller Industries, Inc.	(12,606)	(10,449)
Debt issuance cost	0	(50)
Issuance of long-term debt, net	12,008	0
(Repayment) issuance of debt by joint venture, net	(3,170)	4,940
Net cash used to settle stock-based awards	(887)	(337)
Repurchase of common stock	(58)	0
Repayments of long-term debt	(800)	(750)
Income tax benefit from exercise of stock options	829	670
Net cash used in financing activities	(4,684)	(5,976)
Effect of exchange rate changes on cash	(346)	228
(Decrease) increase in cash and cash equivalents	(51,942)	123,243
Cash and cash equivalents at the beginning of the period	311,800	198,934
Cash and cash equivalents at the end of the period	$ 259,858	$ 322,177

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) (USD $) In Thousands, unless otherwise specified	3 Months Ended				9 Months Ended
	Sep. 27, 2014		Sep. 28, 2013		Sep. 27, 2014		Sep. 28, 2013
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) [Abstract]
Consolidated net income	$ 24,322		$ 39,993		$ 84,485		$ 158,269
Other comprehensive (loss) income, net of tax:
Foreign currency translation	(6,661)		6,738		(3,698)		770
Net change with respect to derivative instruments and hedging activities	(174)	[1]	531	[2]	(1,650)	[3]	1,005	[4]
Net actuarial loss on pension and postretirement obligations	646	[5]	(186)	[6]	490	[7]	1,975	[8]
Other, net	(1)		22		7		105
Total other comprehensive (loss) income	(6,190)		7,105		(4,851)		3,855
Consolidated comprehensive income	18,132		47,098		79,634		162,124
Comprehensive income attributable to noncontrolling interest	(889)		(186)		(548)		(1,613)
Comprehensive income attributable to Mueller Industries, Inc.	$ 17,243		$ 46,912		$ 79,086		$ 160,511

[1] Net of tax of $42

[2] Net of tax of $(280)

[3] Net of tax of $907

[4] Net of tax of $(607)

[5] Net of tax of $(232)

[6] Net of tax of $(3)

[7] Net of tax of $(109)

[8] Net of tax of $(963)

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Accumulated Other Comprehensive Income

9 Months Ended

Sep. 27, 2014

Accumulated Other Comprehensive Income [Abstract]

Accumulated Other Comprehensive Income

Note 10 – Accumulated Other Comprehensive Income

Changes in AOCI by component, net of taxes and noncontrolling interest, were as follows:

	For the Nine Months Ended September 27, 2014
(In thousands)		Cumulative Translation Adjustment			Unrealized (Losses)/Gains on Derivatives			Minimum Pension/OPEB Liability Adjustment			Unrealized Gains on Equity Investments		Total
Beginning balance		$	(462	)	$	1,546		$	(12,158	)	$	255	$	(10,819	)
Other comprehensive income (loss) before reclassifications			(3,337	)		(1,652	)		143			7		(4,839	)
Amounts reclassified from AOCI			—			2			347			—		349
Net current-period other comprehensive income			(3,337	)		(1,650	)		490			7		(4,490	)
Ending balance		$	(3,799	)	$	(104	)	$	(11,668	)	$	262	$	(15,309	)

	For the Nine Months Ended September 28, 2013
(In thousands)		Cumulative Translation Adjustment			Unrealized (Losses)/Gains on Derivatives			Minimum Pension/OPEB Liability Adjustment			Unrealized Gains on Equity Investments		Total
Beginning balance		$	(3,033	)	$	(166	)	$	(39,527	)	$	103	$	(42,623	)
Other comprehensive income (loss) before reclassifications			211			4,314			79			105		4,709
Amounts reclassified from AOCI			—			(3,309	)		1,896			—		(1,413	)
Net current-period other comprehensive income			211			1,005			1,975			105		3,296
Ending balance		$	(2,822	)	$	839		$	(37,552	)	$	208	$	(39,327	)

Reclassification adjustments out of AOCI were as follows:

	Amount reclassified from AOCI
	For the Quarter Ended
(In thousands)	Sept. 27, 2014			Sept. 28, 2013			Affected line item
Unrealized losses/(gains) on derivatives:
Commodity contracts	$	(214	)	$	1,046		Cost of goods sold
Foreign currency contracts		(71	)		—		Property, plant, and equipment, net
		65			(258	)	Income tax benefit (expense)
		(220	)		788		Net of tax
		—			—		Noncontrolling interest
	$	(220	)	$	788		Net of tax and noncontrolling  interest
Amortization of employee benefit items:
Amortization of net loss and prior service cost	$	134		$	946		Selling, general, and administrative  expense
		(19	)		(318	)	Income tax expense
		115			628		Net of tax
		—			—		Noncontrolling interest
	$	115		$	628		Net of tax and noncontrolling  interest

	Amount reclassified from AOCI
	For the Nine Months Ended
(In thousands)	Sept. 27, 2014			Sept. 28, 2013			Affected line item
Unrealized losses/(gains) on derivatives:
Commodity contracts	$	351		$	4,922		Cost of goods sold
Foreign currency contracts		(446	)		—		Property, plant, and equipment, net
		97			(1,613	)	Income tax benefit (expense)
		2			3,309		Net of tax
		—			—		Noncontrolling interest
	$	2		$	3,309		Net of tax and noncontrolling  interest
Amortization of employee benefit items:
Amortization of net loss and prior service cost	$	401		$	2,835		Selling, general, and administrative expense
		(54	)		(939	)	Income tax expense
		347			1,896		Net of tax
		—			—		Noncontrolling interest
	$	347		$	1,896		Net of tax and noncontrolling interest

XML

Document and Entity Information	9 Months Ended
	Sep. 27, 2014	Oct. 22, 2014
Document and Entity Information [Abstract]
Entity Registrant Name	MUELLER INDUSTRIES INC
Entity Central Index Key	0000089439
Current Fiscal Year End Date	--12-27
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	No
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		56,890,102
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q3
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 27, 2014

XML

Acquisitions and Dispositions

9 Months Ended

Sep. 27, 2014

Acquisitions and Dispositions [Abstract]

Acquisitions and Dispositions

Note 11 – Acquisitions and Dispositions

On October 18, 2013, the Company entered into a definitive agreement with KME Yorkshire Limited (Yorkshire) to acquire certain assets and assume certain liabilities of Yorkshire for purposes of acquiring its copper tube business.  Yorkshire produces European standard copper distribution tubes.  This transaction received regulatory approval in the United Kingdom on February 11, 2014 and closed on February 28, 2014.  The purchase price was approximately $30.1 million, paid in cash.  The acquisition of Yorkshire complements the Company’s existing copper tube businesses in the Plumbing and Refrigeration segment.  In 2012, Yorkshire had annual revenue of approximately $196.1 million.  During the third quarter of 2014, the purchase price allocation, including all fair value measurements, was finalized.  The fair value of the assets acquired totaled $20.7 million, consisting primarily of inventories of $17.6 million, property, plant, and equipment of $2.1 million, and other current assets of $1.0 million.  The fair value of the liabilities assumed totaled $15.6 million, consisting primarily of accounts payable and accrued expenses of $15.2 million and other current liabilities of $0.4 million.  Of the remaining purchase price, $8.1 million was allocated to tax-deductible goodwill and $16.9 million was allocated to other intangible assets such as customer lists of $11.3 million that will be amortized over approximately 19 years, non-compete agreements of $4.5 million that will be amortized over approximately three years, and trade names and licenses of $1.1 million that will be amortized over approximately ten years.  The results of operations for Yorkshire have been included in the accompanying Condensed Consolidated Financial Statements from the acquisition date.

On October 17, 2013, the Company entered into a Stock Purchase Agreement with Commercial Metals Company and Howell Metal Company (Howell) providing for the purchase of all of the outstanding capital stock of Howell for approximately $55.3 million in cash, net of working capital adjustments.  Howell manufactures copper tube and line sets for U.S. distribution.  The acquisition of Howell complements the Company’s copper tube and line sets businesses, both components of the Plumbing and Refrigeration segment.   For the twelve months ended August 31, 2013, Howell’s net sales for copper tube and line sets totaled $156.3 million.  During the first quarter of 2014, the purchase price allocation, including all fair value measurements, was finalized.  The fair value of the assets acquired totaled $63.0 million, consisting primarily of receivables of $14.6 million, inventories of $27.6 million, property, plant, and equipment of $20.3 million, and other current assets of $0.5 million.  The fair value of the liabilities assumed totaled $11.4 million, consisting primarily of accounts payable and accrued expenses of $9.9 million and other current liabilities of $1.5 million.  Of the remaining purchase price, $2.3 million was allocated to other intangible assets and $1.4 million to tax-deductible goodwill.  The results of operations for Howell have been included in the accompanying Condensed Consolidated Financial Statements from the acquisition date of October 17, 2013.

On August 9, 2013, the Company sold certain of its plastic fittings manufacturing assets located in Portage, Michigan and Ft. Pierce, Florida.  Simultaneously, the Company entered into a lease agreement with the purchaser of the assets to continue to manufacture and distribute Schedule 40 plastic fittings utilizing the Ft. Pierce assets for a period of approximately eight to 14 months (Transition Period).  The total sales price was $66.2 million, of which $61.2 million was received on August 9, 2013; the remaining $5.0 million was received during the second quarter of 2014.  This transaction resulted in a pre-tax gain of $39.8 million in the third quarter of 2013, or 81 cents per diluted share after tax.

The net book value of assets disposed in the aforementioned plastic sale transaction was $15.9 million.  For goodwill testing purposes, these assets were part of the SPD reporting unit which is a component of the Company’s Plumbing & Refrigeration operating segment.  Because these assets met the definition of a business in accordance with ASC 805 Business Combinations, $10.5 million of the SPD reporting unit’s goodwill balance was allocated to the disposal group.  The amount of goodwill allocated was based on the relative fair values of the asset group which was disposed and the portion of the SPD reporting unit which was retained.

The Company will continue to manufacture and supply plastic drain, waste, and vent (DWV) fittings.  The Company extended its third party supply agreement to complement its product offering with purchased products the Company does not competitively manufacture with its remaining assets.  This supply agreement was originally entered into after the majority of the Company’s plastic manufacturing assets were destroyed in the 2011 fire at its Wynne, Arkansas facility.  The extended supply agreement has an initial five-year term.

With the decision to cease the Company’s manufacturing operations in Portage, there was an evaluation of the remaining long-lived assets for impairment, and it was determined that the carrying value of the land and building were no longer recoverable.  An impairment charge of $3.2 million was recognized during the third quarter of 2013 to adjust the carrying value of the land and building to their estimated fair value.  The fair value estimate was determined by obtaining and evaluating recent sales data for similar assets (Level 2 hierarchy as defined by ASC 820).

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) (Parenthetical) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 27, 2014	Sep. 28, 2013	Sep. 27, 2014	Sep. 28, 2013
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) [Abstract]
Net change with respect to derivative instruments and hedging activities, tax	$ 42	$ (280)	$ 907	$ (607)
Net actuarial loss on pension and postretirement obligations, tax	$ (232)	$ (3)	$ (109)	$ (963)

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Industry Segments

9 Months Ended

Sep. 27, 2014

Industry Segments [Abstract]

Industry Segments

Note 5 – Industry Segments

The Company’s reportable segments are Plumbing & Refrigeration and Original Equipment Manufacturers (OEM).  For disclosure purposes, as permitted under Accounting Standards Codification (ASC) 280, Segment Reporting, certain operating segments are aggregated into reportable segments.  The Plumbing & Refrigeration segment is composed of Standard Products (SPD), European Operations, and Mexican Operations.  The OEM segment is composed of Industrial Products (IPD), Engineered Products (EPD), and Jiangsu Mueller–Xingrong Copper Industries Limited (Mueller-Xingrong).  These segments are classified primarily by the markets for their products.  Performance of segments is generally evaluated by their operating income.  Intersegment transactions are generally conducted on an arms-length basis.

SPD manufactures copper tube and fittings, plastic fittings, plastic pipe, and line sets.  These products are manufactured in the U.S.  Outside the U.S., the Company’s European Operations manufacture copper tube, which is sold primarily in Europe.  SPD also imports and resells brass and plastic plumbing valves, malleable iron fittings, faucets, and plumbing specialty products.  Mexican Operations consist of pipe nipple manufacturing and import distribution businesses including product lines of malleable iron fittings and other plumbing specialties.  The European Operations also includes the import distribution of fittings, valves, and plumbing specialties primarily in the U.K. and Ireland.  The Plumbing & Refrigeration segment’s products are sold primarily to plumbing, refrigeration, and air-conditioning wholesalers, hardware wholesalers and co-ops, and building product retailers.  For the nine months ended September 27, 2014, cost of goods sold included a decrease in accruals related to import duties of $3.1 million.

IPD manufactures brass rod, impact extrusions, and forgings which are used in a wide variety of end products including plumbing brass, automotive components, valves, and fittings.  EPD manufactures and fabricates valves and assemblies primarily for the refrigeration, air-conditioning, and gas appliance markets and specialty copper, copper-alloy, and aluminum tubing.  Mueller-Xingrong manufactures engineered copper tube primarily for air-conditioning applications.  These products are sold primarily to original equipment manufacturers.

Summarized segment information is as follows:

	For the Quarter Ended September 27, 2014
(In thousands)	Plumbing & Refrigeration Segment		OEM Segment		Corporate and Eliminations			Total
Net sales	$	357,843	$	247,883	$	(2,906	)	$	602,820
Cost of goods sold		308,927		215,225		(2,874	)		521,278
Depreciation and amortization		5,287		3,148		517			8,952
Selling, general, and administrative expense		23,473		5,533		5,858			34,864
Operating income	$	20,156	$	23,977	$	(6,407	)		37,726
Interest expense									(1,430	)
Other income, net									225
Income before income taxes								$	36,521

	For the Quarter Ended September 28, 2013
(In thousands)	Plumbing & Refrigeration Segment			OEM Segment		Corporate and Eliminations			Total
Net sales	$	301,622		$	230,396	$	(3,164	)	$	528,854
Cost of goods sold		258,035			201,399		(3,132	)		456,302
Depreciation and amortization		4,172			3,150		560			7,882
Selling, general, and administrative expense		20,736			5,779		6,406			32,921
Gain on sale of plastic fittings manufacturing assets		(39,765	)		—		—			(39,765	)
Impairment charges		4,173			131		—			4,304
Operating income	$	54,271		$	19,937	$	(6,998	)		67,210
Interest expense										(1,243	)
Other income, net										842
Income before income taxes									$	66,809

	For the Nine Months Ended September 27, 2014
(In thousands)	Plumbing & Refrigeration Segment		OEM Segment		Corporate and Eliminations			Total
Net sales	$	1,093,060	$	743,322	$	(9,497	)	$	1,826,885
Cost of goods sold		934,208		650,020		(9,398	)		1,574,830
Depreciation and amortization		14,803		9,123		1,725			25,651
Selling, general, and administrative expense		67,678		15,700		18,789			102,167
Operating income	$	76,371	$	68,479	$	(20,613	)		124,237
Interest expense									(3,913	)
Other income, net									440
Income before income taxes								$	120,764

	For the Nine Months Ended September 28, 2013
(In thousands)	Plumbing & Refrigeration Segment			OEM Segment		Corporate and Eliminations			Total
Net sales	$	942,109		$	741,227	$	(12,510	)	$	1,670,826
Cost of goods sold		800,782			651,875		(12,380	)		1,440,277
Depreciation and amortization		12,861			9,854		1,649			24,364
Selling, general, and administrative expense		61,245			18,168		19,665			99,078
Gain on sale of plastic fittings manufacturing assets		(39,765	)		—		—			(39,765	)
Impairment charges		4,173			131		—			4,304
Insurance settlement		(103,895	)		—		(2,437	)		(106,332	)
Operating income	$	206,708		$	61,199	$	(19,007	)		248,900
Interest expense										(2,940	)
Other income, net										4,324
Income before income taxes									$	250,284

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Inventories

9 Months Ended

Sep. 27, 2014

Inventories [Abstract]

Inventories

Note 4 – Inventories

(In thousands)	September 27, 2014			December 28, 2013
Raw materials and supplies	$	63,438		$	54,613
Work-in-process		44,232			43,796
Finished goods		180,377			159,422
Valuation reserves		(5,554	)		(6,115	)
Inventories	$	282,493		$	251,716

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Derivative Instruments and Hedging Activities (Tables)

9 Months Ended

Sep. 27, 2014

Derivative Instruments and Hedging Activities [Abstract]

Derivative instruments designated as cash flow hedges reflected in the financial statements

The following table summarizes the location and fair value of the derivative instruments and disaggregates our net derivative assets and liabilities into gross components on a contract-by-contract basis:

	Asset Derivatives							Liability Derivatives
		Fair Value							Fair Value
(In thousands)	Balance Sheet Location	Sept. 27, 2014			Dec. 28, 2013			Balance Sheet Location	Sept. 27, 2014			Dec. 28, 2013
Hedging instrument:
Commodity contracts - gains	Other current assets	$	526		$	448		Other current liabilities	$	10		$	340
Commodity contracts - losses	Other current assets		(76	)		(10	)	Other current liabilities		(115	)		(2,107	)
Foreign currency contracts	Other current assets		—			836		Other current liabilities		(68	)		—
Interest rate swap	Other assets		8			1,324		Other liabilities		—			—
Total derivatives (1)		$	458		$	2,598			$	(173	)	$	(1,767	)
(1) Does not include the impact of cash collateral received from or provided to counterparties.

Schedule of fair value hedges

The following tables summarize the effects of derivative instruments on our Condensed Consolidated Statements of Income:

		Three Months Ended						Nine Months Ended
(In thousands)	Location	Sept. 27, 2014			Sept. 28, 2013			Sept. 27, 2014			Sept. 28, 2013
Fair value hedges:
Gain (loss) on commodity contracts (qualifying)	Cost of goods sold	$	1,100		$	(846	)	$	7,371		$	4,344
(Loss) gain on hedged item - Inventory	Cost of goods sold		(922	)		1,042			(6,702	)		(3,770	)

		Three Months Ended				Nine Months Ended
(In thousands)	Location	Sept. 27, 2014		Sept. 28, 2013		Sept. 27, 2014		Sept. 28, 2013
Undesignated derivatives:
Gain on commodity contracts (nonqualifying)	Cost of goods sold	$	—	$	—	$	1,466	$	—

Summary of activities related to derivative instruments classified as cash flow hedges

The following tables summarize amounts recognized in and reclassified from AOCI during the period:

	Three Months Ended September 27, 2014
(In thousands)	(Loss) Gain Recognized in AOCI (Effective Portion), Net of Tax			Classification Gains (Losses)	(Gain) Loss Reclassified from AOCI (Effective Portion), Net of Tax
Cash flow hedges:
Commodity contracts	$	(202	)	Cost of goods sold	$	(174	)
Foreign currency contracts		(181	)	Property, plant, and   equipment, net		(46	)
Interest rate swap		430		Interest expense		—

	Three Months Ended September 28, 2013
(In thousands)	Gain (Loss) Recognized in AOCI (Effective Portion), Net of Tax			Classification Gains (Losses)	Loss (Gain) Reclassified from AOCI (Effective Portion), Net of Tax
Cash flow hedges:
Commodity contracts	$	474		Cost of goods sold	$	788
Foreign currency contracts		372		Property, plant, and  equipment, net		—
Interest rate swap		(747	)	Interest expense		—

	Nine Months Ended September 27, 2014
(In thousands)	(Loss) Gain Recognized in AOCI (Effective Portion), Net of Tax			Classification Gains (Losses)	Loss (Gain) Reclassified from AOCI (Effective Portion), Net of Tax
Cash flow hedges:
Commodity contracts	$	(634	)	Cost of goods sold	$	285
Foreign currency contracts		(184	)	Property, plant, and  equipment, net		(283	)
Interest rate swap		(837	)	Interest expense		—

	Nine Months Ended September 28, 2013
(In thousands)	(Loss) Gain Recognized in AOCI (Effective Portion), Net of Tax			Classification Gains (Losses)	Loss (Gain) Reclassified from AOCI (Effective Portion), Net of Tax
Cash flow hedges:
Commodity contracts	$	(3,056	)	Cost of goods sold	$	3,309
Foreign currency contracts		352		Property, plant, and  equipment, net		—
Interest rate swap		649		Interest expense		—

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Recently Issued Accounting Standards

9 Months Ended

Sep. 27, 2014

Recently Issued Accounting Standards [Abstract]

Recently Issued Accounting Standards

Note 12 – Recently Issued Accounting Standards

In December 2011, the Financial Accounting Standards Board (FASB) issued ASU No. 2011-11, Balance Sheet (Topic 210) (ASU 2011-11). The amendments in this ASU require improved disclosure information about financial instruments and derivative instruments that are either offset or subject to an enforceable master netting arrangement or similar agreement.  Subsequently in January 2013, the FASB issued ASU 2013-01, Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities (ASU 2013-01), which clarifies the types of instruments and transactions that are subject to the offsetting disclosure requirements established by ASU 2011-11. These ASUs should be applied retrospectively for all comparative periods presented for annual periods beginning on or after January 1, 2013 and interim periods within those annual periods. The requirements of these ASUs were adopted during the first quarter of 2014 and did not have a significant impact on our disclosures.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (ASU 2014-09).  The ASU will supersede virtually all existing revenue recognition guidance under U.S. GAAP and will be effective for annual reporting periods beginning after December 15, 2016.  The fundamental principles of the new guidance are that companies should recognize revenue in a manner that reflects the timing of the transfer of services to customers and the amount of revenue recognized reflects the consideration that a company expects to receive for the goods and services provided.  The new guidance establishes a five-step approach for the recognition of revenue.  Based on our preliminary assessment, we do not anticipate that the new guidance will fundamentally change our revenue recognition policies, practices, or systems.

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Income Taxes

9 Months Ended

Sep. 27, 2014

Income Taxes [Abstract]

Income Taxes

Note 8 – Income Taxes

The Company’s effective tax rate for the third quarter of 2014 was 33 percent.  The difference between the effective tax rate and the amount computed using the U.S. federal statutory tax rate for the third quarter of 2014 was primarily related to the reduction for the U.S. production activities deduction of $1.0 million, which was partially offset by the provision for state income taxes, net of the federal benefit, of $0.3 million.

The Company’s effective tax rate for the third quarter of 2013 was 40 percent.  Factors that explain the difference between the effective tax rate and what would be computed using the U.S. federal statutory tax rate for the third quarter of 2013 were increases related to: (i) the impairment of goodwill of $1.8 million; (ii) increases in the valuation allowance of $1.0 million; (iii) the provision for state income taxes, net of federal benefit of $1.2 million; and (iv) the effect of foreign adjustments of $0.4 million.  These items were partially offset by the U.S. production activities deduction of $1.0 million.

The Company’s effective tax rate for the first nine months of 2014 was 30 percent.  The difference between the effective tax rate and the amount computed using the U.S. federal statutory tax rate was attributable to reductions for: (i) the U.S. production activities deduction of $3.5 million; (ii) decreases in valuation allowances of $5.7 million; and (iii) the effect of foreign tax rates lower than statutory tax rates and other foreign adjustments of $0.5 million. These items were partially offset by the provision for state income taxes, net of the federal benefit, of $2.8 million.

The Company’s effective tax rate for the first nine months of 2013 was 37 percent.  Factors that explain the difference between the effective tax rate and what would be computed using the U.S. federal statutory tax rate for the first nine months were increases related to: (i) goodwill impairment of $1.8 million and (ii) the provision for state income taxes, net of the federal benefit, of $7.4 million.  These items were partially offset by reductions related to: (i) the effect of foreign tax rates lower than statutory tax rates and other foreign items of $1.1 million; (ii) decreases in valuation allowances of $0.4 million; and (iii) the U.S. production activities deduction of $3.9 million.

The Company released a valuation allowance of $4.8 million, or eight cents per diluted share, in the second quarter of 2014 related to certain state income tax credits.  As a result of legislative changes enacted in the second quarter, the Company now expects to be able to use such credits within the foreseeable future.

Total unrecognized tax benefits, including derecognized deferred tax assets, as of September 27, 2014 were $2.8 million.  It is reasonably possible that this amount may decrease by the full amount over the next twelve months, none of which will impact the effective tax rate.

The Company files a consolidated U.S. federal income tax return and numerous consolidated and separate-company income tax returns in many state, local, and foreign jurisdictions.  The statute of limitations is open for the Company’s federal tax return and most state income tax returns for 2011 and all subsequent years and is open for certain state and foreign returns for earlier tax years due to ongoing audits and differing statute periods.  The Internal Revenue Service has audited the 2012 federal income tax return, the results of which were immaterial to the Company’s financial position, results of operations, or cash flows.  While the Company believes that it is adequately reserved for possible future audit adjustments, the final resolution of these examinations cannot be determined with certainty and could result in final settlements that differ from current estimates.

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Debt

9 Months Ended

Sep. 27, 2014

Debt [Abstract]

Debt

Note 6 – Debt

Effective May 29, 2014, the Company amended its credit agreement (the Credit Agreement) entered into on March 7, 2011 to reduce the unsecured $350.0 million revolving credit facility to $200.0 million.  The Credit Agreement also provides for a $200.0 million Term Loan Facility, which, together with the Revolving Loan Facility, mature on December 11, 2017.  

On March 21, 2014, Mueller Europe, Limited (MEL) entered into a credit agreement (the Invoice Facility) establishing a total borrowing capacity of £40.0 million, or approximately $65.9 million.  The Invoice Facility has an initial term of two years.  Borrowings outstanding under the Invoice Facility are secured by MEL’s trade account receivables denominated in British pounds.  Borrowings were approximately $11.7 million at September 27, 2014, and bear interest at the latest base-lending rate published by HSBC plus 155 basis points, which was approximately 2.05 percent at the end of the third quarter of 2014.

On September 23, 2013, Mueller-Xingrong entered into a credit agreement with a syndicate of four banks established a secured revolving credit facility (the JV Credit Agreement), which matured on September 24, 2014.  At the maturity date, individual draws on the JV Credit Agreement had maturity dates ranging up to nine months.  Mueller-Xingrong is in process of negotiating a new credit agreement.  Management believes that cash generated by Mueller-Xingrong’s operations and cash currently on hand will be sufficient to fund its operations in the near term.  Borrowings under the JV Credit Agreement were approximately $24.5 million and bear an interst rate at the latest base-lending rate published by the People’s Bank of China, which was 5.6 percent at September 27, 2014.

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Employee Benefits

9 Months Ended

Sep. 27, 2014

Employee Benefits [Abstract]

Employee Benefits

Note 7 – Employee Benefits

The Company sponsors several qualified and nonqualified pension plans and other postretirement benefit plans for certain of its employees.  The components of net periodic benefit cost are as follows:

	For the Quarter Ended						For the Nine Months Ended
(In thousands)	September 27, 2014			September 28, 2013			September 27, 2014			September 28, 2013
Pension benefits:
Service cost	$	199		$	350		$	596		$	1,051
Interest cost		2,064			2,023			6,191			6,070
Expected return on plan assets		(3,202	)		(2,845	)		(9,604	)		(8,535	)
Amortization of prior service cost		1			1			1			1
Amortization of net loss		188			984			565			2,954
Net periodic benefit (income) cost	$	(750	)	$	513		$	(2,251	)	$	1,541
Other benefits:
Service cost	$	88		$	69		$	264		$	207
Interest cost		181			155			544			467
Amortization of prior service cost (credit)		—			2			(1	)		5
Amortization of net gain		(55	)		(41	)		(164	)		(125	)
Net periodic benefit cost	$	214		$	185		$	643		$	554

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Derivative Instruments and Hedging Activities

9 Months Ended

Sep. 27, 2014

Derivative Instruments and Hedging Activities [Abstract]

Derivative Instruments and Hedging Activities

Note 9 – Derivative Instruments and Hedging Activities

Earnings and cash flows are subject to fluctuations due to changes in commodity prices, foreign currency exchange rates, and interest rates. The Company uses derivative instruments such as commodity futures contracts, foreign currency forward contracts, and interest rate swaps to manage these exposures.

All derivatives are recognized on the Condensed Consolidated Balance Sheets at their fair value. On the date the derivative contract is entered into, it is designated as (i) a hedge of a forecasted transaction or the variability of cash flow to be paid (cash flow hedge), or (ii) a hedge of the fair value of a recognized asset or liability (fair value hedge). Changes in the fair value of a derivative that is qualified, designated and highly effective as a cash flow hedge are recorded in 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. Changes in the fair value of a derivative that is qualified, designated and highly effective as a fair value hedge, along with the gain or loss on the hedged recognized asset or liability that is attributable to the hedged risk, are recorded in current earnings.  Changes in the fair value of undesignated derivative instruments and the ineffective portion of designated derivative instruments are reported in current earnings.

The Company documents all relationships between hedging instruments and hedged items, as well as the risk-management objective and strategy for undertaking various hedge transactions. This process includes linking all derivatives that are designated as fair value hedges to specific assets and liabilities on the Condensed Consolidated Balance Sheets and linking cash flow hedges to specific forecasted transactions or variability of cash flow.

The Company also assesses, both at the hedge’s inception and on an ongoing basis, whether the designated derivatives that are used in hedging transactions are highly effective in offsetting changes in cash flow or fair values of hedged items.  When a derivative is determined not to be highly effective as a hedge or the underlying hedged transaction is no longer probable, hedge accounting is discontinued prospectively, in accordance with the derecognition criteria for hedge accounting.

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 occasionally enters into forward fixed-price arrangements with certain customers; the risk of these arrangements is generally managed with commodity futures contracts.   These futures contracts have been designated as cash flow hedges.  

At September 27, 2014, the Company held open futures contracts to purchase approximately $18.0 million of copper over the next 15 months related to fixed price sales orders.  The fair value of those futures contracts was a $99 thousand loss position, which was determined by obtaining quoted market prices (Level 1 hierarchy as defined by ASC 820, Fair Value Measurements and Disclosures (ASC 820)). In the next twelve months, the Company will reclassify into earnings realized gains or losses of cash flow hedges. At September 27, 2014, this amount was approximately $55 thousand of deferred net losses, net of tax.

The Company may also enter into futures contracts to protect the value of inventory against market fluctuations.   These futures contracts have been designated as fair value hedges.  

At September 27, 2014, the Company held open futures contracts to sell approximately $11.4 million of copper over the next six months related to copper inventory. The fair value of those futures contracts was a $445 thousand gain position, which was determined by obtaining quoted market prices (Level 1 hierarchy as defined by ASC 820).  During the fourth quarter of 2013, the Company dedesignated previous hedges on its inventory because the hedging relationship was no longer deemed to be highly effective.  These contracts no longer qualified as hedging instruments as of December 28, 2013.

Foreign Currency Forward Contracts

During 2012 and 2013, the Company entered into certain contracts to purchase heavy machinery and equipment denominated in euros. In anticipation of entering into these contracts, the Company entered into forward contracts to purchase euros to protect itself against adverse foreign exchange rate fluctuations.  

At September 27, 2014, the Company held open forward contracts to purchase approximately 3.0 million euros over the next six months.  The fair value of these contracts, which was determined by obtaining quoted market prices (Level 1 hierarchy as defined by ASC 820), was a $68 thousand loss position recorded in other current liabilities at September 27, 2014, and an $836 thousand gain position recorded in other current assets at December 28, 2013. At September 27, 2014, there was $15 thousand of deferred losses, net of tax, included in AOCI that is expected to be reclassified into property, plant, and equipment, net, when the hedged transactions occur.

Interest Rate Swap

On February 20, 2013, the Company entered into a two-year forward-starting interest rate swap agreement with an effective date of January 12, 2015, and an underlying notional amount of $200.0 million, pursuant to which the Company receives variable interest payments based on one-month LIBOR and pays fixed interest at a rate of 1.4 percent.  Based on the Company’s current variable premium pricing on its Term Loan Facility, the all-in fixed rate on the effective date is 2.7 percent.  The interest rate swap will mature on December 11, 2017, and is structured to offset the interest rate risk associated with the Company’s floating-rate, LIBOR-based Term Loan Facility Agreement.  The swap was designated and accounted for as a cash flow hedge from inception.

The fair value of the interest rate swap is estimated based on the present value of the difference between expected cash flows calculated at the contracted interest rate and the expected cash flows at the current market interest rate using observable benchmarks for LIBOR forward rates at the end of the period (Level 2 hierarchy as defined by ASC 820).  Interest payable and receivable under the swap agreement will be accrued and recorded as an adjustment to interest expense.  The fair value of the interest rate swap was an $8 thousand gain position and was recorded in other assets at September 27, 2014.  At September 27, 2014, there was $5 thousand of deferred net gains, net of tax, included in AOCI that is expected to be reclassified into interest expense over the term of the hedged item.

We present our derivative assets and liabilities in our Condensed Consolidated Balance Sheets on a net basis by counterparty. The following table summarizes the location and fair value of the derivative instruments and disaggregates our net derivative assets and liabilities into gross components on a contract-by-contract basis:

	Asset Derivatives							Liability Derivatives
		Fair Value							Fair Value
(In thousands)	Balance Sheet Location	Sept. 27, 2014			Dec. 28, 2013			Balance Sheet Location	Sept. 27, 2014			Dec. 28, 2013
Hedging instrument:
Commodity contracts - gains	Other current assets	$	526		$	448		Other current liabilities	$	10		$	340
Commodity contracts - losses	Other current assets		(76	)		(10	)	Other current liabilities		(115	)		(2,107	)
Foreign currency contracts	Other current assets		—			836		Other current liabilities		(68	)		—
Interest rate swap	Other assets		8			1,324		Other liabilities		—			—
Total derivatives (1)		$	458		$	2,598			$	(173	)	$	(1,767	)
(1) Does not include the impact of cash collateral received from or provided to counterparties.

The following tables summarize the effects of derivative instruments on our Condensed Consolidated Statements of Income:

		Three Months Ended						Nine Months Ended
(In thousands)	Location	Sept. 27, 2014			Sept. 28, 2013			Sept. 27, 2014			Sept. 28, 2013
Fair value hedges:
Gain (loss) on commodity contracts (qualifying)	Cost of goods sold	$	1,100		$	(846	)	$	7,371		$	4,344
(Loss) gain on hedged item - Inventory	Cost of goods sold		(922	)		1,042			(6,702	)		(3,770	)

		Three Months Ended				Nine Months Ended
(In thousands)	Location	Sept. 27, 2014		Sept. 28, 2013		Sept. 27, 2014		Sept. 28, 2013
Undesignated derivatives:
Gain on commodity contracts (nonqualifying)	Cost of goods sold	$	—	$	—	$	1,466	$	—

The following tables summarize amounts recognized in and reclassified from AOCI during the period:

	Three Months Ended September 27, 2014
(In thousands)	(Loss) Gain Recognized in AOCI (Effective Portion), Net of Tax			Classification Gains (Losses)	(Gain) Loss Reclassified from AOCI (Effective Portion), Net of Tax
Cash flow hedges:
Commodity contracts	$	(202	)	Cost of goods sold	$	(174	)
Foreign currency contracts		(181	)	Property, plant, and   equipment, net		(46	)
Interest rate swap		430		Interest expense		—

	Three Months Ended September 28, 2013
(In thousands)	Gain (Loss) Recognized in AOCI (Effective Portion), Net of Tax			Classification Gains (Losses)	Loss (Gain) Reclassified from AOCI (Effective Portion), Net of Tax
Cash flow hedges:
Commodity contracts	$	474		Cost of goods sold	$	788
Foreign currency contracts		372		Property, plant, and  equipment, net		—
Interest rate swap		(747	)	Interest expense		—

	Nine Months Ended September 27, 2014
(In thousands)	(Loss) Gain Recognized in AOCI (Effective Portion), Net of Tax			Classification Gains (Losses)	Loss (Gain) Reclassified from AOCI (Effective Portion), Net of Tax
Cash flow hedges:
Commodity contracts	$	(634	)	Cost of goods sold	$	285
Foreign currency contracts		(184	)	Property, plant, and  equipment, net		(283	)
Interest rate swap		(837	)	Interest expense		—

	Nine Months Ended September 28, 2013
(In thousands)	(Loss) Gain Recognized in AOCI (Effective Portion), Net of Tax			Classification Gains (Losses)	Loss (Gain) Reclassified from AOCI (Effective Portion), Net of Tax
Cash flow hedges:
Commodity contracts	$	(3,056	)	Cost of goods sold	$	3,309
Foreign currency contracts		352		Property, plant, and  equipment, net		—
Interest rate swap		649		Interest expense		—

The Company enters into futures and forward contracts that closely match the terms of the underlying transactions.  As a result, the ineffective portion of the open hedge contracts through September 27, 2014 was not material to the Condensed Consolidated Statements of Income.

The Company primarily enters into International Swaps and Derivatives Association (ISDA) master netting agreements with major financial institutions that permit the net settlement of amounts owed under their respective derivative contracts. Under these master netting agreements, net settlement generally permits the Company or the counterparty to determine the net amount payable for contracts due on the same date and in the same currency for similar types of derivative transactions. The master netting agreements generally also provide for net settlement of all outstanding contracts with a counterparty in the case of an event of default or a termination event.  The Company does not offset fair value amounts for derivative instruments and fair value amounts recognized for the right to reclaim cash collateral.  At September 27, 2014 and December 28, 2013, the Company had recorded restricted cash in other current assets of $0.5 million and $2.1 million, respectively, as collateral related to open derivative contracts under the master netting arrangements.

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Derivative Instruments and Hedging Activities Part 2 (Details)				3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended				3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended		0 Months Ended	9 Months Ended	3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended
	Sep. 27, 2014 USD ($)	Dec. 28, 2013 USD ($)	Sep. 27, 2014 Commodity Contracts [Member] USD ($)	Sep. 27, 2014 Commodity Contracts [Member] Not Designated as Hedging Instrument [Member] Cost of Goods Sold [Member] USD ($)	Sep. 28, 2013 Commodity Contracts [Member] Not Designated as Hedging Instrument [Member] Cost of Goods Sold [Member] USD ($)	Sep. 27, 2014 Commodity Contracts [Member] Not Designated as Hedging Instrument [Member] Cost of Goods Sold [Member] USD ($)	Sep. 28, 2013 Commodity Contracts [Member] Not Designated as Hedging Instrument [Member] Cost of Goods Sold [Member] USD ($)	Sep. 27, 2014 Commodity Contracts [Member] Cash Flow Hedging [Member] USD ($)	Sep. 28, 2013 Commodity Contracts [Member] Cash Flow Hedging [Member] USD ($)	Sep. 27, 2014 Commodity Contracts [Member] Cash Flow Hedging [Member] USD ($)	Sep. 28, 2013 Commodity Contracts [Member] Cash Flow Hedging [Member] USD ($)	Sep. 27, 2014 Commodity Contracts [Member] Cash Flow Hedging [Member] Cost of Goods Sold [Member] USD ($)	Sep. 28, 2013 Commodity Contracts [Member] Cash Flow Hedging [Member] Cost of Goods Sold [Member] USD ($)	Sep. 27, 2014 Commodity Contracts [Member] Cash Flow Hedging [Member] Cost of Goods Sold [Member] USD ($)	Sep. 28, 2013 Commodity Contracts [Member] Cash Flow Hedging [Member] Cost of Goods Sold [Member] USD ($)	Sep. 27, 2014 Commodity Contracts [Member] Fair Value Hedging [Member] Cost of Goods Sold [Member] USD ($)	Sep. 28, 2013 Commodity Contracts [Member] Fair Value Hedging [Member] Cost of Goods Sold [Member] USD ($)	Sep. 27, 2014 Commodity Contracts [Member] Fair Value Hedging [Member] Cost of Goods Sold [Member] USD ($)	Sep. 28, 2013 Commodity Contracts [Member] Fair Value Hedging [Member] Cost of Goods Sold [Member] USD ($)	Sep. 27, 2014 Foreign Currency Contracts [Member] USD ($)	Sep. 27, 2014 Foreign Currency Contracts [Member] EUR (€)	Sep. 27, 2014 Foreign Currency Contracts [Member] Cash Flow Hedging [Member] USD ($)	Sep. 28, 2013 Foreign Currency Contracts [Member] Cash Flow Hedging [Member] USD ($)	Sep. 27, 2014 Foreign Currency Contracts [Member] Cash Flow Hedging [Member] USD ($)	Sep. 28, 2013 Foreign Currency Contracts [Member] Cash Flow Hedging [Member] USD ($)	Sep. 27, 2014 Foreign Currency Contracts [Member] Cash Flow Hedging [Member] Property, plant, and equipment, net [Member] USD ($)	Sep. 28, 2013 Foreign Currency Contracts [Member] Cash Flow Hedging [Member] Property, plant, and equipment, net [Member] USD ($)	Sep. 27, 2014 Foreign Currency Contracts [Member] Cash Flow Hedging [Member] Property, plant, and equipment, net [Member] USD ($)	Sep. 28, 2013 Foreign Currency Contracts [Member] Cash Flow Hedging [Member] Property, plant, and equipment, net [Member] USD ($)	Sep. 27, 2014 Inventory [Member] Fair Value Hedging [Member] Cost of Goods Sold [Member] USD ($)	Sep. 28, 2013 Inventory [Member] Fair Value Hedging [Member] Cost of Goods Sold [Member] USD ($)	Sep. 27, 2014 Inventory [Member] Fair Value Hedging [Member] Cost of Goods Sold [Member] USD ($)	Sep. 28, 2013 Inventory [Member] Fair Value Hedging [Member] Cost of Goods Sold [Member] USD ($)	Feb. 20, 2013 Interest Rate Swap [Member] USD ($)	Sep. 27, 2014 Interest Rate Swap [Member] USD ($)	Sep. 27, 2014 Interest Rate Swap [Member] Cash Flow Hedging [Member] USD ($)	Sep. 28, 2013 Interest Rate Swap [Member] Cash Flow Hedging [Member] USD ($)	Sep. 27, 2014 Interest Rate Swap [Member] Cash Flow Hedging [Member] USD ($)	Sep. 28, 2013 Interest Rate Swap [Member] Cash Flow Hedging [Member] USD ($)	Sep. 27, 2014 Interest Rate Swap [Member] Cash Flow Hedging [Member] Interest Expense [Member] USD ($)	Sep. 28, 2013 Interest Rate Swap [Member] Cash Flow Hedging [Member] Interest Expense [Member] USD ($)	Sep. 27, 2014 Interest Rate Swap [Member] Cash Flow Hedging [Member] Interest Expense [Member] USD ($)	Sep. 28, 2013 Interest Rate Swap [Member] Cash Flow Hedging [Member] Interest Expense [Member] USD ($)
Derivative Instruments, Gain (Loss) [Line Items]
(Loss) Gain Recognized in AOCI (Effective Portion), Net of Tax								$ (202,000)	$ 474,000	$ (634,000)	$ (3,056,000)											$ (181,000)	$ 372,000	$ (184,000)	$ 352,000											$ 430,000	$ (747,000)	$ (837,000)	$ 649,000
(Gain) Loss Reclassified from AOCI (Effective Portion), Net of Tax												(174,000)	788,000	285,000	3,309,000											(46,000)	0	(283,000)	0											0	0	0	0
Gain (loss) on the derivatives in designated and qualifying fair value hedges																1,100,000	(846,000)	7,371,000	4,344,000											(922,000)	1,042,000	(6,702,000)	(3,770,000)
Gain (loss) on undesignated derivatives				0	0	1,466,000	0
Notional amount																					3,000,000													200,000,000
Time period for open forward contracts to purchase																				6 months	6 months
Period of interest rate swap																																		2 years
Interest rate swap, fixed interest rate (in hundredths)																																		1.40%
Term loan facility, all-in fixed interest rate (in hundredths)																																		2.70%
Interest rate swap maturity date																																			Dec. 11, 2017
Deferred net gains (losses), net of tax, included in AOCI			(55,000)																	(15,000)															5,000
Offsetting Assets [Line Items]
Restricted cash in other current assets as collateral related to open derivative contracts	$ 500,000	$ 2,100,000

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Industry Segments (Tables)

9 Months Ended

Sep. 27, 2014

Industry Segments [Abstract]

Summary of segment information

Summarized segment information is as follows:

	For the Quarter Ended September 27, 2014
(In thousands)	Plumbing & Refrigeration Segment		OEM Segment		Corporate and Eliminations			Total
Net sales	$	357,843	$	247,883	$	(2,906	)	$	602,820
Cost of goods sold		308,927		215,225		(2,874	)		521,278
Depreciation and amortization		5,287		3,148		517			8,952
Selling, general, and administrative expense		23,473		5,533		5,858			34,864
Operating income	$	20,156	$	23,977	$	(6,407	)		37,726
Interest expense									(1,430	)
Other income, net									225
Income before income taxes								$	36,521

	For the Quarter Ended September 28, 2013
(In thousands)	Plumbing & Refrigeration Segment			OEM Segment		Corporate and Eliminations			Total
Net sales	$	301,622		$	230,396	$	(3,164	)	$	528,854
Cost of goods sold		258,035			201,399		(3,132	)		456,302
Depreciation and amortization		4,172			3,150		560			7,882
Selling, general, and administrative expense		20,736			5,779		6,406			32,921
Gain on sale of plastic fittings manufacturing assets		(39,765	)		—		—			(39,765	)
Impairment charges		4,173			131		—			4,304
Operating income	$	54,271		$	19,937	$	(6,998	)		67,210
Interest expense										(1,243	)
Other income, net										842
Income before income taxes									$	66,809

	For the Nine Months Ended September 27, 2014
(In thousands)	Plumbing & Refrigeration Segment		OEM Segment		Corporate and Eliminations			Total
Net sales	$	1,093,060	$	743,322	$	(9,497	)	$	1,826,885
Cost of goods sold		934,208		650,020		(9,398	)		1,574,830
Depreciation and amortization		14,803		9,123		1,725			25,651
Selling, general, and administrative expense		67,678		15,700		18,789			102,167
Operating income	$	76,371	$	68,479	$	(20,613	)		124,237
Interest expense									(3,913	)
Other income, net									440
Income before income taxes								$	120,764

	For the Nine Months Ended September 28, 2013
(In thousands)	Plumbing & Refrigeration Segment			OEM Segment		Corporate and Eliminations			Total
Net sales	$	942,109		$	741,227	$	(12,510	)	$	1,670,826
Cost of goods sold		800,782			651,875		(12,380	)		1,440,277
Depreciation and amortization		12,861			9,854		1,649			24,364
Selling, general, and administrative expense		61,245			18,168		19,665			99,078
Gain on sale of plastic fittings manufacturing assets		(39,765	)		—		—			(39,765	)
Impairment charges		4,173			131		—			4,304
Insurance settlement		(103,895	)		—		(2,437	)		(106,332	)
Operating income	$	206,708		$	61,199	$	(19,007	)		248,900
Interest expense										(2,940	)
Other income, net										4,324
Income before income taxes									$	250,284

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Commitments and Contingencies (Details) (USD $) In Millions, unless otherwise specified	9 Months Ended	12 Months Ended
	Sep. 27, 2014 Property Party	Dec. 28, 2013	Dec. 29, 2012	Dec. 31, 2011
Commitments and Contingencies [Abstract]
Number of entities that received letters from counsel regarding copper tube	5
Number of claimants for copper tube	21
Number of entities that received letters from counsel regarding copper fittings	3
Number of claimants for copper fittings	21
Other [Abstract]
Term of guarantees	1 year
Payments required to be made under guarantees, maximum	$ 10.6
Non-Operating Properties [Member] | Lead Refinery Site [Member]
Site Contingency [Line Items]
Environmental expense		0.1	0.1	0.1
Mitigation estimates minimum	2.1
Mitigation estimates maximum	3.9
Estimated number of years until mitigation resolution	20 years
Number of parties involved in settlement negotiations	2
Lead Refinery Site [Abstract]
EPA's estimated cost of site remediation			30.0
EPA's settlement with other PRPs for the site remediation	$ 26.0
Number of properties to be cleanup by settlement	300

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CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (USD $) In Thousands, unless otherwise specified	Sep. 27, 2014	Dec. 28, 2013
Current assets:
Cash and cash equivalents	$ 259,858	$ 311,800
Accounts receivable, less allowance for doubtful accounts of $981 in 2014 and $2,391 in 2013	332,508	271,847
Inventories	282,493	251,716
Current deferred income taxes	8,963	8,106
Other current assets	40,356	31,248
Total current assets	924,178	874,717
Property, plant, and equipment, net	246,169	244,457
Goodwill	103,242	94,357
Other assets	54,147	34,236
Total assets	1,327,736	1,247,767
Current liabilities:
Current portion of debt	37,207	29,083
Accounts payable	92,342	80,897
Accrued wages and other employee costs	34,577	37,109
Other current liabilities	69,197	72,167
Total current liabilities	233,323	219,256
Long-term debt, less current portion	205,500	206,250
Pension liabilities	9,299	10,645
Postretirement benefits other than pensions	16,561	16,781
Environmental reserves	21,557	22,144
Deferred income taxes	33,342	35,975
Other noncurrent liabilities	581	849
Total liabilities	520,163	511,900
Mueller Industries, Inc. stockholders' equity:
Preferred stock - $1.00 par value; shares authorized 5,000,000; none outstanding	0	0
Common stock - $.01 par value; shares authorized 100,000,000; issued 80,183,004; outstanding 56,885,661 in 2014 and 56,604,674(10) in 2013	802	401
Additional paid-in capital	267,361	267,142
Retained earnings	979,079	908,274
Accumulated other comprehensive loss	(15,309)	(10,819)
Treasury common stock, at cost	(457,371)	(461,593)
Total Mueller Industries, Inc. stockholders' equity	774,562	703,405
Noncontrolling interest	33,011	32,462
Total equity	807,573	735,867
Commitments and contingencies
Total liabilities and equity	$ 1,327,736	$ 1,247,767

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Insurance Claims

9 Months Ended

Sep. 27, 2014

Insurance Claims [Abstract]

Insurance Claims

Note 3 – Insurance Claims

In September 2011, a portion of the Company’s Wynne, Arkansas manufacturing operation was damaged by fire.  Certain inventories, production equipment, and building structures were extensively damaged.  During the second quarter of 2013, the Company settled the claim with its insurer for total proceeds of $127.3 million, net of the deductible of $0.5 million.  As a result of the settlement with its insurer, all proceeds received and all costs previously deferred (which were recorded as other current liabilities in prior periods) were recognized, resulting in a pre-tax gain of $106.3 million in the second quarter of 2013, or $1.17 per diluted share after tax.

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Insurance Claims (Details) (USD $)	3 Months Ended		9 Months Ended		3 Months Ended
	Sep. 27, 2014	Sep. 28, 2013	Sep. 27, 2014	Sep. 28, 2013	Jun. 29, 2013 Wynne Arkansas Manufacturing Operation [Member]
Business Interruption Loss [Line Items]
Proceeds from settlement of insurance claim					$ 127,300,000
Deductible for insurance claim					500,000
Pre-tax gain on insurance settlement	$ 0	$ 0	$ 0	$ 106,332,000	$ 106,300,000
Gain per diluted share, after tax (in dollars per share)					$ 1.17

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Inventories (Tables)

9 Months Ended

Sep. 27, 2014

Inventories [Abstract]

Inventories

(In thousands)	September 27, 2014			December 28, 2013
Raw materials and supplies	$	63,438		$	54,613
Work-in-process		44,232			43,796
Finished goods		180,377			159,422
Valuation reserves		(5,554	)		(6,115	)
Inventories	$	282,493		$	251,716