Company: MWA
Filing Date: 2025-05-06
Form Type: 10-Q
Source: 0001350593-25-000029
Chunk: 58

Company: Mueller Water Products, Inc.
Filing Date: 2025-05-06
Form: 10-Q
Item: Part I, Item 8
Chunk 58
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 amount method based on whichever method most appropriately predicts the amount of consideration we expect to receive.  The method applied is typically based on historical experience and known trends.  We include estimated variable consideration in the transaction price only to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur in future periods when the uncertainty associated with the variable consideration is subsequently resolved.  We exclude from the measurement of the transaction price all taxes assessed by a governmental authority.  We do not adjust the transaction price of a contract for the effects of a significant financing component if, at the inception of the contract, we expect that the period between when we transfer a product or service to a customer and when a customer remits payment will be one year or less.Revenue for the sale of our products is recognized when the obligations of the terms of our contract are satisfied, which is when the customer is able to direct the use of and obtain substantially all of the benefits from the product, which generally occurs upon shipment when control of the product transfers to the customer.We offer assurance warranties to our customers that the products provided will function as intended and comply with any agreed-upon specifications.  These warranties cannot be purchased separately.  On limited products, we offer extended warranties, which may be purchased separately.Costs to Obtain or Fulfill a ContractShipping and handling costs associated with freight activities after the customer has obtained control are accounted for as fulfillment costs and are expensed to Cost of sales within our condensed consolidated statement of operations at the time the revenue is recognized.

We incur certain incremental costs to obtain a contract, which primarily relate to incremental sales commissions.  As the expected benefit associated with these incremental costs is generally one year or less based on the nature of the product sold and benefits received, we have applied the practical expedient to expense them as incurred and therefore do not capitalize the related costs.  Our sales commissions are paid based on orders or shipments, and we reserve the right to claw back any commissions in the event of product returns, cancellations or lost collections.  

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Note 3. Income Taxes 

The reconciliation between the U.S. federal statutory income tax rate and the effective income tax rate is presented below: Three months endedSix months endedMarch 31,March 31,2025202420252024U.S. federal statutory income tax rate21.0 %21.0 %21.0 %21.0 %Adjustments to reconcile to the effective tax rate:State income taxes, net of federal benefit3.