Company: MWA
Filing Date: 2025-05-06
Form Type: 10-Q
Source: 0001350593-25-000029
Chunk: 97

Company: Mueller Water Products, Inc.
Filing Date: 2025-05-06
Form: 10-Q
Item: Part II, Item 8
Chunk 97
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 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.

11

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.Disaggregation of RevenueRefer to Note 8. for disaggregation of our revenues from contracts with customers by reportable segment and by geographical region, which we believe best depicts how the nature, amount, timing and certainty of our revenue and cash flows are affected by economic factors.  Geographical region represents the location of the customer.Contract Asset and Liability BalancesDifferences in the timing of revenue recognition, billing and cash collection result in customer receivables, advance payments and billings in excess of revenue recognized.  Customer receivables include amounts billed and currently due from customers as well as unbilled amounts including contract assets.  Amounts are billed in accordance with contractual terms and unbilled amounts arise when the timing of billing differs from the timing of revenue recognized.Advance payments and billings in excess of revenue are recognized and recorded as deferred revenue and are classified as Other current liabilities or Other noncurrent liabilities in the accompanying condensed consolidated balance sheets based on the timing of when we expect to recognize revenue.  Refer to Note 7. for current and noncurrent amounts.  Deferred revenue represents contract liabilities and is recorded when customers remit cash