Company: MWA
Filing Date: 2025-08-05
Form Type: 10-Q
Source: 0001350593-25-000043
Chunk: 99

Company: Mueller Water Products, Inc.
Filing Date: 2025-08-05
Form: 10-Q
Item: Part II, Item 8
Chunk 99
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 various other guarantees to Wells Fargo and to absorb the losses of the VIEs.  Wells Fargo does not have a material interest in the underlying economics of the project.  Consequently, we have included the financial statements of the VIEs in our consolidated financial statements.

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Intercompany transactions between us and the VIEs have been eliminated in consolidation.  Wells Fargo’s contribution to the investment fund is consolidated in our financial statements within Other noncurrent liabilities as a result of its redemption features.Direct costs associated with Wells Fargo’s capital contribution were netted against the recorded proceeds, resulting in a net cash contribution of $3.9 million.  Other direct costs associated with the transaction were capitalized and are being recognized as interest expense over the seven-year tax credit period.  Incremental costs to maintain the structure during the compliance period are expensed as incurred and are immaterial to the consolidated financial statements.

Note 2.    Revenue from Contracts with Customers

We recognize revenue when control of promised products or services is transferred to our customers, in amounts that reflect the consideration to which we expect to be entitled in exchange for those products or services.  We account for a contract when it has approval and commitment from both parties, the rights of the parties are identified, the payment terms are identified, the contract has commercial substance and collectability of consideration is probable.  We determine the appropriate revenue recognition for our contracts with customers by analyzing the type, terms and conditions of each customer contract or arrangement.The table below represents the balances of our customer receivables and deferred revenue:June 30,September 30, 20252024(in millions)Billed receivables$205.3 $212.7 Unbilled receivables5.4 4.5 Gross customer receivables210.7 217.2 Allowance for credit losses(5.3)(8.3)Receivables, net$205.4 $208.9 Deferred revenue$11.3 $12.8 Allowance for Credit LossesOur condensed consolidated statements of operations include the expected credit losses either arising or changing during the period for our receivables.  In the period in which we determine a receivable will not be collected, in whole or in part, we charge off the uncollectible amount against the allowance.  Our judgments of expected credit losses are based on prior collection experience, customer credit creditworthiness, other current conditions and forecasts of economic trends which may affect the