Company: MWA
Filing Date: 2025-11-19
Form Type: 10-K
Source: 0001350593-25-000066
Chunk: 364

Company: Mueller Water Products, Inc.
Filing Date: 2025-11-19
Form: 10-K
Item: Item 7
Chunk 364
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 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 consolidated statements of operations at the time 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. Disaggregation of RevenueRefer to Note 14. for information regarding disaggregation of our revenues from contracts with customers by reportable segment and by geographical region based on customer location.  Economic factors may impact the nature, amount, timing and certainty of our revenue and cash flows.

Note 4.        Leases

Presentation of LeasesWe lease certain office, warehouse, manufacturing, distribution, and research and development facilities and equipment under operating leases.  Our leases have remaining lease terms of up to eight years.  The terms and conditions of our leases may include options to extend or terminate the lease early.  These factors are considered at lease inception or at the time of the amendment and included in the lease term when these options are reasonably certain of exercise. We determine if a contract is, or contains, a lease at inception by evaluating whether the contract conveys the right to control the use of an identified asset.  For all classes of leased assets, we have elected the practical expedient to account for any non-lease components in the contract together with the related lease component in the same unit of account. Right-of-Use (“ROU”) assets and lease liabilities are recognized in our consolidated balance sheets at the lease commencement date based on the present value of the lease payments over the lease term.  Additionally, ROU assets include any lease payments made at or before the commencement date, as well as any initial direct costs incurred, and are reduced by any lease incentives received.  As most of our operating leases do not provide an implicit rate, we apply