Mueller Industries, Inc. Annual Report 2014

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FY2014 Annual Report · Mueller Industries, Inc.

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www.muellerindustries.com

2014

ANNUAL REPORT

5-YEAR REVIEW

CAPITAL STOCK INFORMATION

(Dollars in thousands except per share data)

2014

2013

2012

2011

2010

The Company’s Board of Directors declared a regular quarterly dividend on its common stock of 7.5 cents per share

SUMMARY OF OPERATIONS
Net sales
Operating income
Net income
Diluted earnings per share
Dividends per share

SIGNIFICANT YEAR-END DATA
Cash and cash equivalents
Ratio of current assets to current liabilities
Book value per share

$ 2,364,227
153,996
$
101,560
$
1.79
$
0.30
$

$ 2,158,541
270,937
$
172,600
$
3.06
$
0.25
$

$ 2,189,938
126,705
$
82,395
$
1.15
$
0.2125
$

$ 2,417,797
139,802
$
86,321
$
1.13
$
0.20
$

$ 2,059,797
136,147
$
86,171
$
1.14
$
0.20
$

352,134
4.0 to 1
13.39

311,800
4.0 to 1
12.43

198,934
2.9 to 1
9.02

514,162
4.8 to 1
11.19

394,139
4.7 to 1
10.42

BOARD OF DIRECTORS

EXECUTIVE LEADERSHIP TEAM

Gary S. Gladstein
Chairman of the Board,
Mueller Industries, Inc.
Independent Investor and Consultant

Gregory L. Christopher
Chief Executive Officer,
Mueller Industries, Inc.

Paul J. Flaherty
Advisory Board Member,
AON Risk Services, Inc.

Gennaro J. Fulvio
Member,
Fulvio & Associates, LLP

Scott J. Goldman
CEO and Co-Founder,
TextPower, Inc.

John B. Hansen
Independent Investor and Consultant

Terry Hermanson
President,
Mr. Christmas Incorporated

Harvey L. Karp
Chairman Emeritus,
Mueller Industries, Inc.

Gregory L. Christopher
Chief Executive Officer

Daniel R. Corbin
Vice President,
Corporate Manufacturing Engineering

Jeffrey A. Martin
Chief Financial Officer
and Treasurer

Mark Millerchip
Executive Director,
European Operations

Nicholas W. Moss
President,
Global and Retail Business

Douglas J. Murdock
President,
Fabricated Products

Steffen Sigloch
President,
Extruded Products

Gary C. Wilkerson
Vice President,
General Counsel and Secretary

during each quarter of 2014 and 6.25 cents per share during each quarter of 2013. Payment of dividends in the

future is dependent upon the Company’s financial condition, cash flows, capital requirements, earnings, and other factors.

The high, low, and closing prices of Mueller’s common stock on the New York Stock Exchange for each fiscal quarter of

2014 and 2013 were as follows:

2014

Fourth quarter

Third quarter

Second quarter

First quarter

2013

Fourth quarter

Third quarter

Second quarter

First quarter

High

Low

$ 34.39

$ 27.10

30.35

30.99

32.13

29.08

27.50

27.77

27.71

27.47

27.38

25.17

24.05

24.48

$ 31.64

$ 26.98

34.18

28.91

29.30

29.34

31.37

27.91

25.22

26.65

As of February 20, 2015, the number of holders of record of Mueller’s common stock was approximately 855.

On February 20, 2015, the closing price for Mueller’s common stock on the New York Stock Exchange was $34.68.

Annual Meeting

Transfer Agent, Registrar and Paying Agent

The annual meeting of stockholders will be held at the

To notify the Company of address changes, lost

Company’s headquarters at Suite 150, 8285 Tournament

certificates, dividend payments or account

Drive, Memphis, TN 38125, 10:00 a.m. local time,

consolidations, security holders should contact:

May 7, 2015

Form 10-K

The Company’s Annual Report on Form 10-K is available

on the Company’s website at www.muellerindustries.com

or upon written request:

c/o Mueller Industries, Inc.

Attention: Investor Relations

Suite 150

8285 Tournament Drive

Memphis, TN 38125

American Stock Transfer & Trust Company, LLC

Shareholder Services Department

6201 15th Avenue

Brooklyn, NY 11219

Toll Free: (800) 937-5449

Local & International: (718) 921-8124

Email: info@amstock.com

Web site: www.amstock.com

NYSE Certifications

The Company submitted an unqualified Section 12(a)

Section 302 of the Sarbanes-Oxley Act as an exhibit to

the Company’s Annual Report on Form 10-K for 2014

and 2013.

Independent Registered Public Accounting Firm

Ernst & Young LLP

Memphis, Tennessee

Market for Mueller Securities

CEO Certification to the NYSE in 2014. The Company filed

Common stock is traded on the NYSE–Symbol MLI.

with the SEC the CEO/CFO Certifications required under

To Our Shareholders:

As we reflect on this past year we can’t help but be pleased with our performance. After adjusting for the
unusual items, our net income for the fiscal year of 2014 was $103.3 million, compared to $86.4 million
in 2013. [A] This was our sixth year in a row of double-digit returns; since the Great Recession of 2008
our average annual return to shareholders has exceeded 21 percent.

Our 2014 results were bolstered by our continued growth in unit volume and operational improvement.
In 2014, we achieved 14.9 percent unit volume growth, of which our acquired businesses contributed
more than half.

Our already healthy balance sheet grew stronger in 2014 as we maintained moderate leverage and
increased our cash by $40 million to $352 million. This was accomplished while we invested almost $40
million in capital improvements; invested $57 million for a business acquisition in Europe and related
working capital funding; and increased our dividend 20 percent. Offsetting these expenditures we also
received $34 million in proceeds from business and property divestitures.

In addition to achieving these quantifiable results, our associates also made progress on a number of
major long-term initiatives that will strengthen our company in the future. Most notable highlights
include:

(cid:190) After three years of ongoing development and investment, we completed the installation of the
equipment planned for our Port Huron, Michigan rod mill modernization initiative. All of the
equipment is in place; commissioning and debugging are underway.

(cid:190) We completed the installation of our first PEX plastic pipe production facility. This initiative had
been in the planning and investment process for the past two years, and as of December, the
facility was production-ready. We received regulatory approval from the National Sanitation
Foundation in February of this year which allows us to begin to commercialize the product.
(cid:190) We successfully and fully integrated our busbar investment, having connected the drawing and
finishing equipment we acquired in 2012 with the casting and extruding capabilities of our
Belding, Michigan mill. We are now a growing participant in the worldwide markets for power
connectivity and conductivity infrastructure.

(cid:190) We made significant progress in completing the integration and rationalization of the two copper
mills we acquired in late 2013 and early 2014 – the Howell Copper Tube and Lineset business,
here in the U.S., and the Yorkshire Copper Tube business in the U.K. Both have progressed as
planned, and we expect both businesses to contribute positively in 2015.

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 27, 2014

Commission file number 1–6770

MUELLER INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction
of incorporation or organization)

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

25-0790410
(I.R.S. Employer
Identification No.)

38125
(Zip Code)

Registrant’s telephone number, including area code: (901) 753-3200

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Name of each exchange on which registered

Common Stock, $0.01 Par Value

New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes (cid:54)

Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes (cid:133)

No (cid:133)

No (cid:54)

Indicate by a 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 (cid:54)

No (cid:133)

Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Website, 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 (cid:54)

No (cid:133)

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (Section 229.405 of this chapter) is not contained herein, and will
not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or
any amendment to this Form 10-K. (cid:54)

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 (cid:54)
Non-accelerated filer (cid:133)

Accelerated filer (cid:133)
Smaller reporting company (cid:133)

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes (cid:133)

No (cid:54)

The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity
was last sold, or the average bid and asked price of such common equity, as of the last business day of the Registrant’s most recently completed second fiscal
quarter was $1,619,095,888.

The number of shares of the Registrant’s common stock outstanding as of February 20, 2015 was 56,924,463 excluding 23,258,541 treasury shares.

Portions of the following document are incorporated by reference into this Report: Registrant’s Definitive Proxy Statement for the 2015 Annual Meeting of
Stockholders, scheduled to be mailed on or about March 25, 2015 (Part III).

DOCUMENTS INCORPORATED BY REFERENCE

MUELLER INDUSTRIES, INC.

_____________________

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

____________________

TABLE OF CONTENTS

Part I

Item 1. Business
Item 1A. Risk Factors
Item 1B. Unresolved Staff Comments
Item 2. Properties
Item 3. Legal Proceedings
Item 4. Mine Safety Disclosures

Part II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer

Purchases of Equity Securities

Item 6. Selected Financial Data
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of

Operations

Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Item 8. Financial Statements and Supplementary Data
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial

Disclosure

Item 9A. Controls and Procedures
Item 9B. Other Information

Part III

Item 10. Directors, Executive Officers and Corporate Governance
Item 11. Executive Compensation
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related

Stockholder Matters

Item 13. Certain Relationships and Related Transactions, and Director Independence
Item 14. Principal Accounting Fees and Services

Part IV

Item 15. Exhibits, Financial Statement Schedules

Signatures

Index to Consolidated Financial Statements

Page

3
6
9
9
12
12

12
15

15
16
16

16
16
19

19
19

20
20
20

F-1

ITEM 1.

BUSINESS

Introduction

PART I

Mueller Industries, Inc. (the Company) is a leading manufacturer of plumbing, heating, ventilation, and
air-conditioning (HVAC), refrigeration, and industrial 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 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:

• Plumbing & Refrigeration: The Plumbing & Refrigeration segment is composed of Standard Products
(SPD), European Operations, and Mexican Operations. SPD manufactures and sells copper tube, copper and
plastic fittings, line sets, and valves in North America and sources products for import distribution in North
America. European Operations manufacture copper tube in the United Kingdom, which is sold throughout
Europe. 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 HVAC, plumbing, and refrigeration markets, to
distributors to the manufactured housing and recreational vehicle industries, and to building material
retailers.

• Original Equipment Manufacturers (OEM): The OEM segment is composed of Industrial Products (IPD),
Engineered Products (EPD), and Jiangsu Mueller–Xingrong Copper Industries Limited (Mueller-Xingrong),
the Company’s Chinese joint venture. 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,
fittings, and components; 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.

Certain administrative expenses and expenses related primarily to retiree benefits at inactive operations are combined
into the Corporate and Eliminations classification.

Financial information concerning segments and geographic information appears under “Note 15 - Industry Segments”
in the Notes to Consolidated Financial Statements, which is incorporated herein by reference.

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 our 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.

Mueller was incorporated in Delaware on October 3, 1990.

Plumbing & Refrigeration Segment

The Plumbing & Refrigeration segment includes SPD, which manufactures a broad line of copper tube in sizes
ranging from 1/8 inch to 8 inch diameter that is sold in various straight lengths and coils. We are a market leader in the
air-conditioning and refrigeration service tube markets. Additionally, we supply a variety of water tube in straight
lengths and coils used for plumbing applications in virtually every type of construction project. Lastly, SPD
manufactures copper and plastic fittings, line sets, and related components for the plumbing and heating industry that

are used in water distribution systems, heating systems, air-conditioning, and refrigeration applications, and drainage,
waste, and vent systems. A major portion of SPD’s products are ultimately used in the domestic residential and
commercial construction markets.

This segment also fabricates steel pipe nipples and resells imported brass and plastic plumbing valves, malleable iron
fittings, faucets, and plumbing specialty products to plumbing wholesalers, distributors to the manufactured housing
and recreational vehicle industries and building materials retailers.

On August 6, 2010, we expanded our existing line sets business by purchasing certain assets from Linesets, Inc., a
manufacturer of assembled line sets with operations in Phoenix, Arizona and Atlanta, Georgia.

We acquired Howell Metal Company (Howell) on October 17, 2013 and Yorkshire Copper Tube (Yorkshire) on
February 28, 2014. Howell manufactures copper tube and line sets for U.S. distribution while Yorkshire produces
European standard copper distribution tubes. These acquisitions complement our existing copper tube businesses in
the Plumbing & Refrigeration segment.

We disposed of Mueller Primaflow Limited (Primaflow), our U.K. based plumbing and heating systems import
distribution business, on November 21, 2014. This business was part of the European Operations in the Plumbing &
Refrigeration segment.

This segment markets primarily through its own sales and distribution organization, which maintains sales offices and
distribution centers throughout the United States and in Canada, Mexico, and Europe. Additionally, products are sold
and marketed through a complement of agents, which, when combined with our sales organization, provide the
Company broad geographic market representation.

The total amount of order backlog for the Plumbing & Refrigeration segment as of December 27, 2014 was not
significant.

We compete with various companies, depending on the product line. In the U.S. copper tube business, domestic
competition includes Cerro Flow Products LLC, Cambridge-Lee Industries LLC (a subsidiary of Industrias Unidas
S.A. de C.V.), and KobeWieland Copper Products LLC, as well as many actual and potential foreign competitors. In
the European copper tube business, we compete with several European-based manufacturers of copper tube as well as
other foreign-based manufacturers. In the copper fittings market, domestic competitors include Elkhart Products
Company (a subsidiary of Aalberts Industries N.V.) and NIBCO, Inc., as well as several foreign
manufacturers. Additionally, our copper tube and fittings businesses compete with a large number of manufacturers
of substitute products made from other metals and plastic. The plastic fittings competitors include NIBCO, Inc.,
Charlotte Pipe & Foundry, and other companies. Management believes that no single competitor offers such a
wide-ranging product line as Mueller and that this is a competitive advantage in some markets.

OEM Segment

The OEM segment includes IPD, which manufactures brass rod, nonferrous forgings, and impact extrusions that are
sold primarily to OEMs in the plumbing, refrigeration, fluid power, and automotive industries, as well as to other
manufacturers and distributors. We extrude brass, bronze, and copper alloy rod in sizes ranging from 3/8 inches to 4
inches in diameter. These alloys are used in applications that require a high degree of machinability, wear and
corrosion resistance, as well as electrical conductivity. IPD also manufactures brass and aluminum forgings, which
are used in a wide variety of products, including automotive components, brass fittings, industrial machinery, valve
bodies, gear blanks, and computer hardware. Lastly, IPD serves the automotive, military ordnance, aerospace, and
general manufacturing industries with cold-formed aluminum and copper impact extrusions. Typical applications for
impacts are high strength ordnance, high-conductivity electrical components, builders’ hardware, hydraulic systems,
automotive parts, and other uses where toughness must be combined with varying complexities of design and finish.

This segment also includes EPD, which manufactures and fabricates valves and custom OEM products for
refrigeration and air-conditioning, gas appliance, and barbecue grill applications. Additionally, EPD manufactures
shaped and formed tube produced to tight tolerances for baseboard heating, appliances, and medical instruments. The

total amount of order backlog for the OEM segment as of December 27, 2014 was not significant.

On December 28, 2010, we purchased certain assets from Tube Forming, L.P. (TFI). TFI had operations in
Carrolton, Texas, and Guadalupe, Mexico, where it produced precision copper return bends and crossovers, and
custom-made tube components and brazed assemblies, including manifolds and headers.

On August 16, 2012, we acquired 100 percent of the outstanding stock of Westermeyer Industries, Inc.
(Westermeyer), located in Bluffs, Illinois. Westermeyer designs, manufactures, and distributes high-pressure
components and accessories for the air-conditioning and refrigeration markets. The acquisition of Westermeyer
complements the Company’s existing refrigeration business.

IPD and EPD primarily sell directly to OEM customers. Competitors, primarily in the brass rod market, include
Chase Brass and Copper Company, a subsidiary of Global Brass and Copper Holdings, Inc., and others, both domestic
and foreign. Outside of North America, IPD and EPD sell products through various channels.

Labor Relations

At December 27, 2014, the Company employed approximately 3,850 employees, of which approximately 2,020 were
represented by various unions. Those union contracts will expire as follows:

Location
Port Huron, Michigan (Local 218 IAM)
Port Huron, Michigan (Local 44 UAW)
Port Huron, Michigan (Local 119 SPFPA)
Belding, Michigan
Brighton, Michigan
Wynne, Arkansas
Fulton, Mississippi
North Wales, Pennsylvania
Waynesboro, Tennessee

Expiration Date
May 1, 2016
July 20, 2016
April 1, 2016
September 12, 2015
July 31, 2015
June 28, 2015
October 31, 2017
July 31, 2015
November 7, 2015

The union agreements at the Company’s U.K. and Mexico operations are renewed annually. The Company expects to
renew its union contracts without material disruption of its operations.

Raw Material and Energy Availability

A substantial portion of our base metal requirements (primarily copper) is normally obtained through short-term
supply contracts with competitive pricing provisions (for cathode) and the open market (for scrap). Other raw
materials used in the production of brass, including brass scrap, zinc, tin, and lead are obtained from zinc and lead
producers, open-market dealers, and customers with brass process scrap. Raw materials used in the fabrication of
aluminum and plastic products are purchased in the open market from major producers.

Adequate supplies of raw material have historically been available to us from primary producers, metal brokers, and
scrap dealers. Sufficient energy in the form of natural gas, fuel oils, and electricity is available to operate our
production facilities. While temporary shortages of raw material and fuels may occur occasionally, to date they have
not materially hampered our operations.

Our copper tube facilities can accommodate both refined copper and certain grades of copper scrap as the primary
feedstock. The Company has commitments from refined copper producers for a portion of its metal requirements for
2015. Adequate quantities of copper are currently available. While we will continue to react to market developments,
resulting pricing volatility or supply disruptions, if any, could nonetheless adversely affect the Company.

Environmental Proceedings

Compliance with environmental laws and regulations is a matter of high priority for the Company. Mueller’s
provision for environmental matters related to all properties was $1.2 million for 2014, $1.0 million for 2013, and $3.1
million for 2012. The reserve for environmental matters was $22.7 million at December 27, 2014 and $23.6 million at
December 28, 2013. Environmental costs related to non-operating properties are classified as a component of other
income, net and costs related to operating properties are included in cost of goods sold. We do not anticipate that we
will need to make material expenditures for compliance activities related to existing environmental matters during the
2015 fiscal year, or for the next two fiscal years.

For a description of material pending environmental proceedings, see “Note 8 – Commitments and Contingencies” in
the Notes to Consolidated Financial Statements, which is incorporated herein by reference.

Other Business Factors

Our business is not materially dependent on patents, trademarks, licenses, franchises, or concessions held. In addition,
expenditures for company-sponsored research and development activities were not material during 2014, 2013, or
2012. No material portion of our business involves governmental contracts. Seasonality of the Company’s sales is
not significant.

SEC Filings

We make available through our internet website our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q,
Current Reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of
the Exchange Act as soon as reasonably practicable after we electronically file such material with, or furnish it to, the
Securities and Exchange Commission (SEC). To retrieve any of this information, you may access our internet home
page at www.muellerindustries.com, select Investors, and then select SEC Filings.

Reports filed with the SEC may also be viewed or obtained at the SEC Public Reference Room at 100 F Street, N.E.,
Washington, D.C. 20549. Information on the operation of the SEC Public Reference Room may be obtained by
calling the SEC at 1-800-SEC-0330. The SEC maintains a website that contains reports, proxy and information
statements, and other information regarding issuers that file electronically with the SEC; the website address is
www.sec.gov.

ITEM 1A.

RISK FACTORS

The Company is exposed to risk as it operates its businesses. To provide a framework to understand our operating
environment, we are providing a brief explanation of the more significant risks associated with our
businesses. Although we have tried to identify and discuss key risk factors, others could emerge in the future. These
risk factors should be considered carefully when evaluating the Company and its businesses.

Increases in costs and the availability of energy and raw materials used in our products could impact our cost
of goods sold and our distribution expenses, which could have a material adverse impact on our operating
margins.

Both the costs of raw materials used in our manufactured products (copper, brass, zinc, aluminum, and PVC and ABS
resins) and energy costs (electricity, natural gas and fuel) have been volatile during the last several years, which has
resulted in changes in production and distribution costs. For example, recent and pending climate change regulation
and initiatives on the state, regional, federal, and international levels that have focused on reducing greenhouse gas
(GHG) emissions from the energy and utility sectors may affect energy availability and costs in the near future. While
we typically attempt to pass costs through to our customers or to modify or adapt our activities to mitigate the impact
of increases, we may not be able to do so successfully. Failure to fully pass increases to our customers or to modify or
adapt our activities to mitigate the impact could have a material adverse impact on our operating

margins. Additionally, if we are for any reason unable to obtain raw materials or energy, our ability to manufacture
our products would be impacted, which could have a material adverse impact on our operating margins.

The unplanned departure of key personnel could disrupt our business.

We depend on the continued efforts of our senior management. The unplanned loss of key personnel, or the inability
to hire and retain qualified executives, could negatively impact our ability to manage our business.

Economic conditions in the housing and commercial construction industries, as well as changes in interest
rates, could have a material adverse impact on our business, financial condition, and results of operations.

Our business is sensitive to changes in general economic conditions, particularly in the housing and commercial
construction industries. Prices for our products are affected by overall supply and demand in the market for our
products and for our competitors’ products. In particular, market prices of building products historically have been
volatile and cyclical, and we may be unable to control the timing and extent of pricing changes for our
products. Prolonged periods of weak demand or excess supply in any of our businesses could negatively affect our
revenues and margins and could result in a material adverse impact on our business, financial condition, and results of
operations.

The markets that we serve, including, in particular, the housing and commercial construction industries, are
significantly affected by movements in interest rates and the availability of credit. Significantly higher interest rates
could have a material adverse effect on our business, financial condition, and results of operations. Our businesses are
also affected by a variety of other factors beyond our control, including, but not limited to, employment levels, foreign
currency exchange rates, unforeseen inflationary pressures, and consumer confidence. Since we operate in a variety
of geographic areas, our businesses are subject to the economic conditions in each such area. General economic
downturns or localized downturns in the regions where we have operations could have a material adverse effect on our
business, financial condition, and results of operations.

Although conditions improved in 2012 and continued to improve in 2013 and 2014, the deterioration of the general
economic environment has had a significant negative impact on businesses and consumers around the world since the
crisis began in 2008. In addition, the impact of the economy on the operations or liquidity of any party with which we
conduct our business, including our suppliers and customers, may adversely impact our business.

Competitive conditions, including the impact of imports and substitute products and technologies, could have a
material adverse effect on the demand for our products as well as our margins and profitability.

The markets we serve are competitive across all product lines. Some consolidation of customers has occurred and
may continue, which could shift buying power to customers. In some cases, customers have moved production to
low-cost countries such as China, or sourced components from there, which has reduced demand in North America for
some of the products we manufacture. These conditions could have a material adverse impact on our ability to
maintain margins and profitability. The potential threat of imports and substitute products is based upon many factors,
including raw material prices, distribution costs, foreign exchange rates, production costs, and the development of
emerging technologies and applications. The end use of alternative import and/or substitute products could have a
material adverse effect on our business, financial condition, and results of operations. Likewise, the development of
new technologies and applications could result in lower demand for our products and have a material adverse effect on
our business.

Our exposure to exchange rate fluctuations on cross border transactions and the translation of local currency
results into U.S. dollars could have an adverse impact on our results of operations or financial position.

We conduct our business through subsidiaries in several different countries and export our products to many
countries. Fluctuations in currency exchange rates could have a significant impact on the competitiveness of our
products as well as the reported results of our operations, which are presented in U.S. dollars. A significant and
growing portion of our products are manufactured in or acquired from suppliers located in lower cost regions. Cross
border transactions, both with external parties and intercompany relationships, result in increased exposure to foreign
exchange fluctuations. The strengthening of the U.S. dollar could expose our U.S. based businesses to competitive

threats from lower cost producers in other countries such as China. Lastly, our sales are translated into U.S. dollars for
reporting purposes. The strengthening of the U.S. dollar could result in unfavorable translation effects when the
results of foreign operations are translated into U.S. dollars. Accordingly, significant changes in exchange rates,
particularly the British pound sterling, Mexican peso, and the Chinese renminbi, could have an adverse impact on our
results of operations or financial position.

We are subject to claims, litigation, and regulatory proceedings that could have a material adverse effect on us.

We are, from time-to-time, involved in various claims, litigation matters, and regulatory proceedings. These matters
may include contract disputes, personal injury claims, environmental claims, OSHA inspections or proceedings, other
tort claims, employment and tax matters and other litigation including class actions that arise in the ordinary course of
our business. Although we intend to defend these matters vigorously, we cannot predict with certainty the outcome or
effect of any claim or other litigation matter, and there can be no assurance as to the ultimate outcome of any litigation
or regulatory proceeding. Litigation and regulatory proceedings may have a material adverse effect on us because of
potential adverse outcomes, defense costs, the diversion of our management’s resources, availability of insurance
coverage and other factors.

A strike, other work stoppage or business interruption, or our inability to renew collective bargaining
agreements on favorable terms, could impact our cost structure and our ability to operate our facilities and
produce our products, which could have an adverse effect on our results of operations.

As of December 27, 2014, approximately 2,020 of our 3,850 employees were covered by collective bargaining or
similar agreements. If we are unable to negotiate acceptable new agreements with the unions representing our
employees upon expiration of existing contracts, we could experience strikes or other work stoppages. Strikes or
other work stoppages could cause a significant disruption of operations at our facilities, which could have an adverse
impact on us. New or renewal agreements with unions representing our employees could call for higher wages or
benefits paid to union members, which would increase our operating costs and could adversely affect our
profitability. Higher costs and/or limitations on our ability to operate our facilities and manufacture our products
resulting from increased labor costs, strikes or other work stoppages could have a material adverse effect on our results
of operations.

In addition, unexpected interruptions in our operations or those of our customers or suppliers due to such causes as
weather-related events or acts of God, such as earthquakes, could have an adverse effect on our results of
operations. For example, the Environmental Protection Agency (EPA) has found that global climate change would be
expected to increase the severity and possibly the frequency of severe weather patterns such as hurricanes. Although
the financial impact of such future events is not reasonably estimable at this time, should they occur, our operations in
certain coastal and flood-prone areas or operations of our customers and suppliers could be adversely affected. As a
result of a fire at our Wynne, Arkansas, location, our copper tube casting operations were destroyed and consequently
a significant portion of our redundant casting capacity is no longer available. If our remaining copper tube casting
operations were to become inoperable, for any reason, our domestic copper tube production could be significantly
impaired and have a material adverse effect on our results of operations.

We are subject to environmental, health, and safety laws and regulations and future compliance may have a
material adverse effect on our results of operations, financial position, or cash flows.

The nature of our operations exposes us to the risk of liabilities and claims with respect to environmental, health, and
safety matters. While we have established accruals intended to cover the cost of environmental remediation at
contaminated sites, the actual cost is difficult to determine and may exceed our estimated reserves. Further, changes
to, or more rigorous enforcement or stringent interpretation of environmental or health and safety laws could require
significant incremental costs to maintain compliance. Recent and pending climate change regulation and initiatives
on the state, regional, federal, and international levels may require certain of our facilities to reduce GHG
emissions. While not reasonably estimable at this time, this could require capital expenditures for environmental
control facilities and/or the purchase of GHG emissions credits in the coming years. In addition, with respect to
environmental matters, future claims may be asserted against us for, among other things, past acts or omissions at
locations operated by predecessor entities, or alleging damage or injury or seeking other relief in connection with
environmental matters associated with our operations. Future liabilities, claims, and compliance costs may have a

material adverse effect on us because of potential adverse outcomes, defense costs, diversion of our resources,
availability of insurance coverage, and other factors. The overall impact of these requirements on our operations
could increase our costs and diminish our ability to compete with products that are produced in countries without such
rigorous standards; the long run impact could negatively impact our results and have a material adverse effect on our
business.

ITEM 1B.

UNRESOLVED STAFF COMMENTS

None.

ITEM 2.

PROPERTIES

Information pertaining to our major operating facilities is included below. Except as noted, we own all of the principal
properties. Our plants are in satisfactory condition and are suitable for the purpose for which they were designed and
are now being used.

Location

Approximate
Property Size

Description

Plumbing & Refrigeration Segment

Fulton, MS

Wynne, AR

Fulton, MS

418,000 sq. ft.
52.37 acres

Copper tube mill. Facility includes extruding and finishing
equipment to produce copper tube, including tube feedstock for
the Company’s copper fittings plants, line sets, and Precision
Tube factory.

103,000 sq. ft.
11.9 acres

400,000 sq. ft.
39.2 acres

58,500 sq. ft.
15.53 acres

70,000 sq. ft.
7.68 acres

Casting facility. Facility includes casting equipment to produce

copper billets used in the adjoining copper tube mill.

(1) Copper tube mill. Facility includes extrusion and finishing

equipment to produce copper tube and line sets.

Packaging and bar coding facility for retail channel sales.

(2) Copper fittings plant. High-volume facility that produces copper
fittings using tube feedstock from the Company’s adjacent copper
tube mill.

Covington, TN

159,500 sq. ft.
40.88 acres

Copper fittings plant. Facility produces copper fittings using tube

feedstock from the Company’s copper tube mills.

Ontario, CA

211,000 sq. ft. (3) Plastics manufacturing plant and distribution center. Produces

DWV fittings using injection molding equipment.

Monterrey, Mexico

152,000 sq. ft. (3) Pipe nipples plant. Produces pipe nipples, cut pipe and merchant

couplings.

Bilston, England, United
Kingdom

402,500 sq. ft.
14.95 acres

Copper tube mill. Facility includes casting, extruding, and

finishing equipment to produce copper tube.

(continued)

ITEM 2.

PROPERTIES

(continued)

Location

Approximate
Property Size

Description

Phoenix, AZ

61,000 sq. ft. (3) Line sets plant. Produces standard and custom-made line sets for

HVAC markets.

Atlanta, GA

56,000 sq. ft. (3) Line sets plant. Produces standard and custom-made line sets for

HVAC markets.

New Market, VA

OEM Segment

Port Huron, MI

Belding, MI

413,120 sq. ft.
36.15 acres

Copper Tube Mill. Facility includes casting, extruding, and

finishing equipment to produce copper tube and line sets.

322,500 sq. ft.
71.5 acres

Brass rod mill. Facility includes casting, extruding, and finishing
equipment to produce brass rods and bars, in various shapes and
sizes.

293,068 sq. ft.
17.64 acres

Brass rod and copper busbar mill. Facility includes casting,
extruding, and finishing equipment to produce brass rods and
bars, in various shapes and sizes.

Port Huron, MI

127,500 sq. ft. Forgings plant. Produces brass and aluminum forgings.

Marysville, MI

Hartsville, TN

81,500 sq. ft.
6.72 acres

78,000 sq. ft.
4.51 acres

Aluminum and copper impacts plant. Produces made-to-order

parts using cold impact processes.

Refrigeration products plant. Produces products used

in
refrigeration applications such as ball valves, line valves, and
compressor valves.

Carthage, TN

67,520 sq. ft.
10.98 acres

Fabrication facility. Produces precision tubular components and

assemblies.

Gordonsville, TN

54,000 sq. ft. (3) Fabrication facility. Produces precision tubular components and

assemblies.

Waynesboro, TN

57,000 sq. ft.
5.0 acres

(4) Gas valve plant. Facility produces brass and aluminum valves

and assemblies for the gas appliance industry.

North Wales, PA

174,000 sq. ft.
18.9 acres

Precision Tube factory. Facility fabricates copper tube, copper

alloy tube, aluminum tube, and fabricated tubular products.

Brighton, MI

65,000 sq. ft. (3) Machining operation. Facility machines component parts for

supply to automotive industry.

Middletown, OH

55,000 sq. ft.
2.0 acres

Fabricating facility. Produces burner systems and manifolds for

the gas appliance industry.

(continued)

ITEM 2.

PROPERTIES

(continued)

Location

Approximate
Property Size

Description

Jintan City, Jiangsu
Province, China

322,580 sq. ft.
33.0 acres

(5) Copper tube mill. Facility includes casting, and finishing
equipment to produce engineered copper tube primarily for
OEMs.

Xinbei District,
Changzhou, China

33,940 sq. ft. (3) Refrigeration products plant. Produces products used

in
refrigeration applications such as ball valves, line valves, and
compressor valves.

Bluffs, IL

70,000 sq. ft.
10 acres

Fabrication facility. Produces products used in refrigeration
applications such as oil separators, accumulators, and heat
exchangers.

Guadalupe, MX

70,782 sq. ft. (3) Fabrication facility. Produces tubular components, assemblies,

and return bends for refrigeration and HVAC markets.

Guadalupe, MX

59,331 sq. ft. (3) Gas valve plant. Facility produces brass and aluminum valves
and assemblies for the gas appliance industry.

Farmers Branch, TX

54,000 sq. ft. (3) Fabrication facility. Produces tubular components, assemblies,

and return bends for refrigeration and HVAC markets.

In addition, we own and/or lease other properties used as distribution centers and corporate offices.

(1) Facility, or some portion thereof, is located on land leased from a local municipality, with an option to purchase

at nominal cost.

(2) Facility is leased under a long-term lease agreement, with an option to purchase at nominal cost.

(3) Facility is leased under an operating lease.

(4) Facility is leased from a local municipality for a nominal amount.

(5) Facility is located on land that is under a long-term land use rights agreement.

ITEM 3.

LEGAL PROCEEDINGS

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 Consolidated Financial Statements.

For a description of material pending legal proceedings, see “Note 8 – Commitments and Contingencies” in the Notes
to Consolidated Financial Statements, which is incorporated herein by reference.

ITEM 4.

MINE SAFETY DISCLOSURES

Not applicable.

PART II

ITEM 5.

MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER
MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Our common stock is listed on the New York Stock Exchange (NYSE) under the symbol “MLI.” As of February 20,
2015, the number of holders of record of Mueller’s common stock was approximately 855. The following table sets
forth, for the periods indicated, the high and low sales prices as reported by the NYSE and the cash dividends paid per
share of common stock.

On February 21, 2014, the Company effected a two-for-one stock split to shareholders of record as of March 14, 2014.
All share and per share information has been retroactively adjusted to reflect the stock split.

2014

Fourth quarter
Third quarter
Second quarter
First quarter

2013

Fourth quarter
Third quarter
Second quarter
First quarter

Sales Prices

High

Low

Dividend

34.39 $
30.35
30.99
32.13

27.10 $
27.71
27.47
27.38

0.0750
0.0750
0.0750
0.0750

31.64 $
29.08
27.50
27.77

26.98 $
25.17
24.05
24.48

0.0625
0.0625
0.0625
0.0625

Payment of dividends in the future is dependent upon the Company’s financial condition, cash flows, capital
requirements, earnings, and other factors.

Issuer Purchases of Equity Securities

The Company’s Board of Directors has extended, until October 2015, the 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 purchase any shares and may cancel, suspend, or extend the time
period for the purchase of shares at any time. Any purchases will be funded primarily through existing cash and cash
from operations. The Company may hold any shares purchased in treasury or use a portion of the repurchased shares
for its stock-based compensation plans, as well as for other corporate purposes. From its initial authorization in 1999

through December 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 quarter ended December 27, 2014.

(a)

(b)

Total Number
of Shares
Purchased

Average Price
Paid per Share

(d)
Maximum
Number of
Shares That
May Yet Be
Purchased
Under the Plans
or Programs
15,287,060(1)

September 28 – October 25, 2014

359(2) $

October 26 – November 22, 2014

2,384(2)

November 23 – December 27, 2014

579(2)

29.45

32.05

32.92

—

(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 purchase price and/or

withholding taxes upon exercise. In addition, includes restricted stock forfeitures.

Company Stock Performance

The following graph compares total stockholder return since December 26, 2009 to the Dow Jones U.S. Total Market
Index (Total Market Index) and the Dow Jones U.S. Building Materials & Fixtures Index (Building Materials
Index). Total return values for the Total Market Index, the Building Materials Index and the Company were
calculated based on cumulative total return values assuming reinvestment of dividends.

COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
Among Mueller Industries, Inc., the Dow Jones US Total Return Index, and
the Dow Jones US Building Materials & Fixtures Index

$300

$250

$200

$150

$100

$50

$0
12/26/09

12/25/10

12/31/11

12/29/12

12/28/13

12/27/14

Mueller Industries, Inc.
Dow Jones US Total Return
Dow Jones US Building Materials & Fixtures

*$100 invested on 12/26/09 in stock or 12/31/09 in index, including
reinvestment of dividends.

Indexes calculated on month-end basis.

Mueller Industries, Inc.
Dow Jones U.S. Total Return

Index

Dow Jones U.S. Building

2009

100.00

2010

131.64

2011

154.72

2012

200.26

2013

2014

257.35

283.15

100.00

116.65

118.22

137.52

182.86

206.53

Materials & Fixtures Index

100.00

116.70

120.39

183.24

234.92

259.74

ITEM 6.

SELECTED FINANCIAL DATA

(In thousands, except per share data)

2014

2013

2012

2011

2010

For the fiscal year: (1)

Net sales

$2,364,227 $2,158,541 $2,189,938 $2,417,797 $2,059,797

Operating income

153,996 270,937(3)

126,705(4) 139,802(5) 136,147(6)

Net income attributable to Mueller Industries,

Inc.

101,560(2) 172,600

82,395

86,321

86,171

Diluted earnings per share (8)

1.79

3.06

1.16(7)

1.13

1.14

Cash dividends per share (8)

0.30

0.25

0.2125

0.20

At year-end:

Total assets

Long-term debt

1,328,096 1,247,767 1,104,155 1,347,604 1,258,996

205,250 206,250

207,300 156,476 158,226

(1) Includes activity of acquired businesses from the following purchase dates: Yorkshire Copper Tube, February 28,

2014, Howell Metal Company, October 17, 2013, Westermeyer Industries, Inc., August 16, 2012, Tube
Forming L.P., December 28, 2010, and Linesets, Inc., August 6, 2010.

(2)

Includes $6.3 million pre-tax gain on sale of assets, reversal of valuation allowance of $5.7 million, and $7.3

million of pre-tax charges related to severance.

(3) Includes $106.3 million pre-tax gain from settlement of insurance claims, $39.8 million pre-tax gain from the sale
of the Company’s Schedule 40 pressure plastic fittings business along with the sale of certain other plastic
fittings manufacturing assets, and pre-tax impairment charges of $4.3 million primarily related to real
property associated with the aforementioned plastics sale transaction.

(4)

Includes deferred recognition of $8.0 million gain from liquidation of LIFO inventory layers, $4.1 million net

gain from settlement of litigation, $1.5 million gain from settlement of insurance claims, and severance
charges of $3.4 million.

(5) Includes $10.5 million gain from settlement of litigation.

(6) Includes $22.7 million gain from settlement of insurance claims.

(7) Includes the impact of 10.4 million shares repurchased from Leucadia National Corporation in September 2012.

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

ITEM 7.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

Management’s discussion and analysis of financial condition and results of operations is contained under the caption
“Financial Review” submitted as a separate section of this Annual Report on Form 10-K commencing on page F-2.

ITEM 7A.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Quantitative and qualitative disclosures about market risk are contained under the caption “Financial Review”
submitted as a separate section of this Annual Report on Form 10-K commencing on page F-2.

ITEM 8.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Financial Statements required by this item are contained in a separate section of this Annual Report on Form 10-K
commencing on page F-15.

ITEM 9.

None.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE

ITEM 9A.

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 December 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 December 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.

Management’s Report on Internal Control over Financial Reporting

The Company’s management is responsible for establishing and maintaining adequate internal control over financial
reporting as defined in Rules 13a-15(f) under the Securities Exchange Act of 1934. Pursuant to the rules and
regulations of the SEC, internal control over financial reporting is a process designed by, or under the supervision of,
the Company’s principal executive and principal financial officers, and effected by the Company’s Board of Directors,
management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and
the preparation of financial statements for external purposes in accordance with accounting principles generally
accepted in the United States and includes those policies and procedures that (i) pertain to the maintenance of records
that in reasonable detail accurately and fairly reflect the transactions and dispositions of the Company’s assets; (ii)
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements
in accordance with generally accepted accounting principles, and that receipts and expenditures of the issuer are being
made only in accordance with authorizations of the Company’s management and directors; and (iii) provide
reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the
Company’s assets that could have a material effect on the financial statements. Due to inherent limitations, internal
control over financial reporting may not prevent or detect misstatements. Further, because of changes in conditions,
effectiveness of internal control over financial reporting may vary over time.

The Company acquired Yorkshire Copper Tube (Yorkshire) during February 2014, and has excluded that business
from management’s assessment of internal controls. The total value of assets of Yorkshire at year-end was $41.4
million, which represents three percent of the Company’s consolidated total assets at December 27, 2014. Net sales
of Yorkshire from the date of acquisition represent four percent of the consolidated net sales of the Company for 2014,
and Yorkshire operated at a net loss for the year. Accordingly, this acquired business is not included in the scope of
this report.

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 internal control over financial reporting as of December 27,
2014 based on the control criteria established in a report entitled Internal Control—Integrated Framework, (1992
Framework) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on
such evaluation, management has concluded that our internal control over financial reporting was effective as of
December 27, 2014.

Ernst & Young LLP, the independent registered public accounting firm that audited the Company’s financial
statements included in this Annual Report on Form 10-K, has issued an attestation report on the Company’s internal
control over financial reporting, which is included herein.

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
ended December 27, 2014, that have materially affected, or are reasonably likely to materially affect, the Company’s
internal control over financial reporting.

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garding
d have

Because o
misstateme
controls m
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of its inheren
ents. Also, pro
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nt limitations,
ojections of an
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orate.

internal con
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use of changes i

ntrol over fin
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or that the degr

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prevent or
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detect
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As indicate
assessment
internal co
Mueller In
December
Our audit o
the interna

ed in the accom
t of and concl
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ndustries, Inc. a
27, 2014, and
of internal con
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mpanying Mana
lusion on the e
kshire Copper
and constituted
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d $41.4 million
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Control over F
ntrol over finan
n the 2014 co
million of total
and net loss, re
dustries, Inc. al
ube.

Financial Repo
ncial reporting
onsolidated fin
and net assets
espectively, for
lso did not incl

orting, managem
g did not inclu
nancial stateme
s, respectively
r the year then e
lude an evaluat

ment’s
ude the
ents of
, as of
ended.
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In our opin
reporting a

nion, Mueller I
as of December

Industries, Inc
r 27, 2014, bas

. maintained, i
sed on the COS

in all material
SO criteria.

respects, effec

ctive internal c

ontrol over fin

nancial

We also ha
States), the
and the rel
of the thre
unqualified

ave audited, in
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ee years in the
d opinion there

accordance wi
balance sheets
ted statements
e period ended
eon.

ith the standard
s of Mueller Ind
of income, com
d December 27

ds of the Public
dustries, Inc. a
mprehensive in
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c Company Ac
as of December
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r 27, 2014 and
es in equity and
d February 24

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December 28,
d cash flows fo
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United
, 2013,
or each
sed an

Memphis,
February 2

Tennessee
24, 2015

ITEM 9B.

OTHER INFORMATION

None.

PART III

ITEM 10.

DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE

The information required by Item 10 is contained under the captions “Ownership of Common Stock by Directors and
Executive Officers and Information about Director Nominees,” “Corporate Governance,” “Report of the Audit
Committee of the Board of Directors,” and “Section 16(a) Beneficial Ownership Compliance Reporting” in the
Company’s Proxy Statement for its 2015 Annual Meeting of Stockholders to be filed with the SEC on or about March
25, 2015, which is incorporated herein by reference.

The Company has adopted a Code of Business Conduct and Ethics that applies to its chief executive officer, chief
financial officer, and other financial executives. We have also made the Code of Business Conduct and Ethics
available on the Company’s website at www.muellerindustries.com.

ITEM 11.

EXECUTIVE COMPENSATION

The information required by Item 11 is contained under the caption “Compensation Discussion and Analysis,”
“Summary Compensation Table for 2014,” “2014 Grants of Plan Based Awards Table,” “Outstanding Equity Awards
at Fiscal 2014 Year-End,” “2014 Option Exercises and Stock Vested,” “Potential Payments Upon Termination of
Employment or Change in Control as of the End of 2014,” “2014 Director Compensation,” “Report of the
Compensation Committee of the Board of Directors on Executive Compensation” and “Corporate Governance” in the
Company’s Proxy Statement for its 2015 Annual Meeting of Stockholders to be filed with the SEC on or about March
25, 2015, which is incorporated herein by reference.

ITEM 12.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Equity Compensation Plan Information

The following table discloses information regarding the securities to be issued and the securities remaining available
for issuance under the Registrant’s stock-based incentive plans as of December 27, 2014 (shares in thousands):

(a)

(b)

Number of securities
to be issued upon
exercise of
outstanding options,
warrants, and rights

Weighted average
exercise price of
outstanding options,
warrants, and rights

(c)
Number of securities
remaining available
for future issuance
under equity
compensation plans
(excluding securities
reflected in column
(a))

1,127 $

17.38

1,558(1)

—

Plan category

Equity compensation plans approved by

security holders

Equity compensation plans not approved

by security holders

Total

1,127 $

17.38

1,558

(1) Of the 1.6 million securities remaining available for issuance under the equity compensation plans, 1.5 million
are available under the Company’s 2009 and 2014 Stock Incentive Plans for issuance of restricted stock,
stock appreciation rights, or stock options. The remaining securities are available for issuance of stock
options to the Board of Directors only.

Other information required by Item 12 is contained under the captions “Principal Stockholders” and “Ownership of
Common Stock by Directors and Executive Officers and Information about Director Nominees” in the Company’s
Proxy Statement for its 2015 Annual Meeting of Stockholders to be filed with the SEC on or about March 25, 2015,
which is incorporated herein by reference.

ITEM 13.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE

The information required by Item 13 is contained under the caption “Corporate Governance” in the Company’s Proxy
Statement for its 2015 Annual Meeting of Stockholders to be filed with the SEC on or about March 25, 2015, which is
incorporated herein by reference.

ITEM 14.

PRINCIPAL ACCOUNTING FEES AND SERVICES

The information required by Item 14 is contained under the caption “Appointment of Independent Registered Public
Accounting Firm” in the Company’s Proxy Statement for its 2015 Annual Meeting of Stockholders to be filed with the
SEC on or about March 25, 2015, which is incorporated herein by reference.

ITEM 15.

EXHIBITS, FINANCIAL STATEMENT SCHEDULES

PART IV

(a)

The following documents are filed as part of this report:

Financial Statements: the financial statements, notes, and report of independent registered public
accounting firm described in Item 8 of this Annual Report on Form 10-K are contained in a separate
section of this Annual Report on Form 10-K commencing on page F-1.

Financial Statement Schedule: the financial statement schedule described in Item 8 of this report is
contained in a separate section of this Annual Report on Form 10-K commencing on page F-1.

Exhibits:
3.1

3.2

4.1

10.1

10.2

10.3

10.4

10.5

10.6

Restated Certificate of Incorporation of the Registrant dated February 8, 2007 (Incorporated
herein by reference to Exhibit 3.1 of the Registrant’s Annual Report on Form 10-K, dated
February 28, 2007, for the fiscal year ended December 30, 2006).

Amended and Restated By-laws of the Registrant, effective as of November 8, 2013
(Incorporated herein by reference to Exhibit 3.1 of the Registrant’s Current Report on
Form 8-K, dated November 8, 2013).

Certain instruments with respect to long-term debt of the Registrant have not been filed as
Exhibits to this Report since the total amount of securities authorized under any such
instruments does not exceed 10 percent of the total assets of the Registrant and its subsidiaries
on a consolidated basis. The Registrant agrees to furnish a copy of each such instrument
upon request of the SEC.

Amended and Restated Consulting Agreement, dated October 25, 2007, by and between the
Registrant and Harvey Karp (Incorporated herein by reference to Exhibit 10.2 of the
Registrant’s Current Report on Form 8-K, dated October 25, 2007).

Amendment No. 1, dated December 2, 2008, to the Amended and Restated Consulting
Agreement, dated October 25, 2007, by and between the Registrant and Harvey Karp
(Incorporated herein by reference to Exhibit 10.7 of the Registrant’s Annual Report on
Form 10-K, dated February 24, 2009, for the fiscal year ended December 27, 2008).

Letter Agreement with Harvey Karp, dated as of May 11, 2011 (Incorporated herein by
reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K, dated
May 16, 2011).

Amended and Restated Employment Agreement, effective October 30, 2008, by and between
the Registrant and Gregory L. Christopher (Incorporated herein by reference to Exhibit 10.1
of the Registrant’s Current Report on Form 8-K, dated December 26, 2008).

Amendment No. 1 to Amended and Restated Employment Agreement by and between the
Registrant and Gregory L. Christopher, dated February 14, 2013 (Incorporated by reference
to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K, dated February 14, 2013).

Mueller Industries, Inc. 1994 Non-Employee Director Stock Option Plan, as amended
(Incorporated herein by reference to Exhibit 10.12 of the Registrant’s Annual Report on
Form 10-K, dated March 24, 2003, for the fiscal year ended December 28, 2002 and
Exhibit 99.6 of the Registrant’s Current Report on Form 8-K, dated August 31, 2004).

10.7

Mueller Industries, Inc. 2002 Stock Option Plan Amended and Restated as of February 16,

10.8

10.9

10.10

10.11

10.12

2006 (Incorporated herein by reference to Exhibit 10.20 of the Registrant’s Annual Report on
Form 10-K, dated February 28, 2007, for the fiscal year ended December 30, 2006).

Mueller Industries, Inc. 2009 Stock Incentive Plan (Incorporated by reference from Appendix
I to the Company’s 2009 Definitive Proxy Statement with respect to the Company’s 2009
Annual Meeting of Stockholders, as filed with the Securities and Exchange Commission on
March 26, 2009).

Mueller Industries, Inc. 2014 Stock Incentive Plan (Incorporated by reference from Appendix
I to the Company’s 2014 Definitive Proxy Statement with respect to the Company’s 2014
Annual Meeting of Stockholders, as filed with the Securities and Exchange Commission on
March 19, 2014).

Amendment to the Mueller Industries, Inc. 2002 Stock Option Plan, dated July 11, 2011
(Incorporated herein by reference to Exhibit 10.16 of the Registrant’s Annual Report on Form
10-K, dated February 28, 2012, for the fiscal year ended December 31, 2011).

Amendment to the Mueller Industries, Inc. 2009 Stock Incentive Plan, dated July 11, 2011
(Incorporated herein by reference to Exhibit 10.17 of the Registrant’s Annual Report on Form
10-K, dated February 28, 2012, for the fiscal year ended December 31, 2011).

Mueller Industries, Inc. 2011 Annual Bonus Plan (Incorporated herein by reference to Exhibit
10.18 of the Registrant’s Annual Report on Form 10-K, dated February 28, 2012, for the
fiscal year ended December 31, 2011).

10.13

Summary description of the Registrant’s 2015 incentive plan for certain key employees.

10.14

10.15

10.16

10.17

Amended Credit Agreement, dated as of March 7, 2011, among the Registrant (as Borrower)
and Bank of America, N.A. (as agent), and certain lenders named therein, following adoption
of Amendment No. 2 dated December 11, 2012 (Incorporated herein by reference to Exhibit
10.20 of the Registrant’s Annual Report on Form 10-K, dated February 27, 2013, for the
fiscal year ended December 29, 2012).

Amendment No. 1 to Credit Agreement among the Registrant (as borrower), Bank of
America, N.A. (as agent), and certain lenders named therein dated August 12, 2011
(Incorporated herein by reference to Exhibit 10.1 of the Registrant’s Quarterly Report on
Form 10-Q, for the Quarterly period ended October 1, 2011, dated October 27, 2011).

Amendment No. 2 to Credit Agreement among the Registrant (as borrower), Bank of
America, N.A. (as agent), and certain lenders named therein dated December 11, 2012
(Incorporated herein by reference to Exhibit 10.22 of the Registrant’s Annual Report on Form
10-K, dated February 27, 2013, for the fiscal year ended December 29, 2012).

Share Purchase Agreement by and among Mueller Europe Limited and Travis Perkins PLC,
dated November 21, 2014 (Incorporated herein by reference to Exhibit 10.1 of the
Registrant’s Current Report on Form 8-K, dated November 24, 2014).

21.0

Subsidiaries of the Registrant.

23.0

Consent of Independent Registered Public Accounting Firm.

31.1

31.2

Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the
Securities Exchange Act of 1934, as amended.

Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the
Securities Exchange Act of 1934, as amended.

32.1

32.2

Certification of Chief Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.

Certification of Chief Financial Officer pursuant to 18 U.S.C. 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

Pursuant to the requirements of Section 13 or 15(d) 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, on February 24, 2015.

SIGNATURES

MUELLER INDUSTRIES, INC.

/s/ GREGORY L. CHRISTOPHER
Gregory L. Christopher, Chief Executive Officer
(Principal Executive Officer), and Director

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the
following persons on behalf of the Registrant and in the capacities and on the date indicated.

Signature

Title

Date

/s/ GARY S. GLADSTEIN
Gary S. Gladstein

Chairman of the Board, and Director

February 24, 2015

/s/ GREGORY L. CHRISTOPHER
Gregory L. Christopher

Chief Executive Officer

February 24, 2015

(Principal Executive Officer), and Director

/s/ PAUL J. FLAHERTY

Paul J. Flaherty

/s/ GENNARO J. FULVIO
Gennaro J. Fulvio

/s/ SCOTT J. GOLDMAN
Scott J. Goldman

/s/ JOHN B. HANSEN
John B. Hansen

/s/ TERRY HERMANSON
Terry Hermanson

Director

February 24, 2015

Signature and Title

Date

/s/ JEFFREY A. MARTIN
Jeffrey A. Martin
Chief Financial Officer and Treasurer
(Principal Financial and Accounting
Officer)

/s/ RICHARD W. CORMAN
Richard W. Corman
Vice President – Controller

February 24, 2015

MUELLER INDUSTRIES, INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Financial Review

Consolidated Statements of Income
for the years ended December 27, 2014, December 28, 2013, and December 29, 2012

Consolidated Statements of Comprehensive Income
for the years ended December 27, 2014, December 28, 2013, and December 29, 2012

Consolidated Balance Sheets
as of December 27, 2014 and December 28, 2013

Consolidated Statements of Cash Flows
for the years ended December 27, 2014, December 28, 2013, and December 29, 2012

Consolidated Statements of Changes in Equity
for the years ended December 27, 2014, December 28, 2013, and December 29, 2012

Notes to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm

F- 2

F- 15

F- 16

F- 17

F- 18

F- 19

F- 21

F- 55

FINANCIAL STATEMENT SCHEDULE

Schedule for the years ended December 27, 2014, December 28, 2013, and December 29, 2012

Valuation and Qualifying Accounts (Schedule II)

F- 56

F-1

FINANCIAL REVIEW

The Financial Review section of our Annual Report on Form 10-K consists of the following: Management’s
Discussion and Analysis of Results of Operations and Financial Condition (MD&A), the Consolidated Financial
Statements, and Other Financial Information, all of which include information about our significant accounting
policies, practices, and the transactions that impact our financial results. The following MD&A describes the
principal factors affecting the results of operations, liquidity and capital resources, contractual cash obligations and the
critical accounting estimates of the Company. The discussion in the Financial Review section should be read in
conjunction with the other sections of this Annual Report, particularly “Item 1: Business” and our other detailed
discussion of risk factors included in this MD&A.

OVERVIEW

We are a leading manufacturer of plumbing, HVAC, refrigeration, and industrial 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 fittings and valves; refrigeration valves and fittings; fabricated tubular
products; and steel nipples. We also resell 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:

• Plumbing & Refrigeration: The Plumbing & Refrigeration segment is composed of SPD, European
Operations, and Mexican Operations. SPD manufactures and sells copper tube, copper and plastic fittings,
line sets, and valves in North America and sources products for import distribution in North
America. European Operations manufacture copper tube in the United Kingdom, which is sold throughout
Europe. 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 HVAC, plumbing, and refrigeration markets, to
distributors to the manufactured housing and recreational vehicle industries, and to building material
retailers.

• OEM: The OEM segment is composed of IPD, EPD, and Mueller-Xingrong, the Company’s Chinese joint
venture. 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.

Residential construction in 2014 and 2013 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, higher interest rates, and tighter lending standards. Per the U.S. Census Bureau, actual
housing starts in the U.S. were 1.0 million in 2014, which compares to 925 thousand in 2013 and 781 thousand in
2012. While mortgage rates have risen in 2014 and 2013, they remain at historically low levels, as the average 30-year
fixed mortgage rate was approximately 4.17 percent in 2014 and 3.98 percent in 2013.

The private nonresidential construction sector, which includes offices, industrial, health care and retail projects, began
showing modest improvement in 2014, 2013, and 2012 after declines in previous years. According to the U.S. Census
Bureau, at December 2014, the seasonally adjusted annual rate of private nonresidential value of construction put in
place was $349.0 billion compared to $331.4 billion at December 2013. The actual private nonresidential value of

F-2

construction put in place was $337.0 billion in 2014, $304.9 billion in 2013, and $301.4 billion in 2012. The
Company expects that most of these conditions will continue to gradually improve.

Profitability of certain of the Company’s product lines depends upon the “spreads” between the cost of raw material
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 volumes that are subject to market trends, such as substitute
products, imports, technologies, and market share. In its 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

Consolidated Results

The following table compares summary operating results for 2014, 2013, and 2012:

(In thousands)

2014

2013

2012

Percent Change
2014 vs. 2013 2013 vs. 2012

Net sales
Operating income
Net income

$ 2,364,227 $ 2,158,541 $ 2,189,938
126,705
82,395

153,996 270,937
101,560 172,600

9.5%

(43.2)
(41.2)

(1.4)%

113.8
109.5

The increase in net sales in 2014 was primarily due to (i) incremental sales of $91.7 million contributed by Yorkshire,
acquired in February 2014, (ii) $109.1 million of sales contributed by Howell, acquired in October 2013, (iii) an
increase in unit sales in the Company’s other core product lines of $49.9 million, and (iv) an increase in net sales of
$20.3 million from the Company’s non-core product lines. These increases were offset by lower selling prices of
$65.4 million in the Company’s core products.

The decrease in net sales in 2013 was primarily due to lower net selling prices in the Company’s core product lines of
$58.6 million and lower unit sales volume in the OEM segment of $12.7 million. This was partially offset by an
increase in unit sales volume due to $14.3 million of sales recorded by Howell, and $11.1 million of sales recorded by
Westermeyer, acquired in August 2012.

Net selling prices generally fluctuate with changes in raw material costs. Changes in raw material costs are generally
passed through to customers by adjustments to selling prices. The following graph shows the Comex average copper
price per pound by quarter for the most recent three-year period:

F-3

Average Copper Price per Pound

$3.90

$3.70

$3.50

$3.30

$3.10

$2.90

Q1
2012

Q2
2012

Q3
2012

Q4
2012

Q1
2013

Q2
2013

Q3
2013

Q4
2013

Q1
2014

Q2
2014

Q3
2014

Q4
2014

Comex

The following tables compare operating expenses as dollar amounts and as a percent of net sales for 2014, 2013, and
2012:

(In thousands)

2014

2013

2012

Cost of goods sold
Depreciation and amortization
Selling, general, and administrative expense
Insurance settlements
Gain on sale of assets
Impairment charges
Litigation settlements
Severance

$2,043,719
33,735
131,740

$1,862,089
32,394
134,914
(106,332)
(39,765)

—

(6,259)

—
—
7,296

4,304
—
—

$1,904,463
31,495
129,456
(1,500)
—
—
(4,050)
3,369

Operating expenses

$2,210,231

$1,887,604

$2,063,233

Cost of goods sold
Depreciation and amortization
Selling, general, and administrative expense
Insurance settlements
Gain on sale of assets
Impairment charges
Litigation settlements
Severance

Percent of Net Sales
2013

2014

2012

86.4%
1.4
5.6
—

(0.3)

—
—
0.3

86.3 %
1.5
6.3
(4.9 )
(1.8 )
0.2
—
—

87.0%
1.4
5.9
(0.1)
—
—
(0.2)
0.2

Operating expenses

93.4%

87.6 %

94.2%

The increase in cost of goods sold in 2014 was primarily due to the increase in sales volume. The decrease in 2013 as
compared to 2012 was largely related to the decrease in the price of copper, the Company’s principal raw material.
This was offset by the recognition of a gain from LIFO liquidation that resulted in a reduction of approximately $8.0
million to cost of sales in 2012. Depreciation and amortization increased in 2014 as a result of depreciation and
amortization of businesses acquired. The increase in 2013 was related to an increase in capital spending in 2012 and
2013. Selling, general, and administrative expenses decreased in 2014 primarily as a result of a decrease in legal fees
of $4.8 million and lower net periodic pension costs of $5.0 million, offset by incremental costs associated with
Howell and Yorkshire. The increase in 2013 was related to increased legal fees of $3.0 million, increased bad debt
expense of $1.0 million, and increased software purchases of $0.7 million.

F-4

During 2014, our operating results were positively impacted by a net gain of $6.3 million recorded for the sale of our
plastic pipe manufacturing assets, the land and building in Portage, Michigan, and our United Kingdom based import
distribution business. This was offset by $7.3 million in severance charges related to the reorganization of Yorkshire.

Operating income increased in 2013 primarily as a result of the $106.3 million gain recognized in the settlement of our
insurance claim related to the September 2011 fire at the Wynne, Arkansas manufacturing operation. In addition, we
sold certain of our 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.

During 2012, our operating results were positively impacted by a net gain of $4.1 million recorded upon receipt of
payment related to the October 2012 settlement of a lawsuit against Xiamen Lota International Co., Ltd. We also
settled the business interruption portion of our insurance claim related to the July 2009 explosion at the copper tube
facility in Fulton, Mississippi and recorded a $1.5 million gain. The gain was offset by $3.4 million in severance
charges.

Interest expense increased $1.8 million in 2014 due to increased borrowings by MEL and higher borrowing costs at
Mueller-Xingrong to fund working capital. The decrease of $2.9 million in 2013 was related to the redemption of the
6% Subordinated Debentures during the second quarter of 2012. In addition, during 2013 the Company capitalized
interest expense related to certain capital projects. Other expense, net, was $0.2 million in 2014 and other income,
net, was $4.5 million in 2013. The income in 2013 resulted primarily from a $3.0 million gain on the sale of a
non-operating property.

Income tax expense was $45.5 million in 2014, for an effective tax rate of 31 percent. This rate was lower than what
would be computed using the U.S. statutory federal rate primarily due to decreases in valuation allowances of $5.7
million; the U.S. production activities deduction benefit of $4.0 million; and the effect of lower foreign tax rates and
other foreign adjustments of $1.1 million. These decreases were partially offset by state tax expense (net of federal
benefit) of $3.3 million and $1.2 million of other adjustments.

Income tax expense was $98.1 million in 2013, for an effective rate of 36 percent. This rate was higher than what
would be computed using the U.S. statutory federal rate primarily due to state tax expense, net of federal benefit, of
$6.4 million, and the impact of goodwill disposition of $1.8 million. These increases were partially offset by the U.S.
production activities deduction benefit of $4.4 million and the effect of lower foreign tax rates and other foreign
adjustments of $1.0 million.

Income tax expense was $36.7 million in 2012, for an effective rate of 30 percent. This rate was lower than what
would be computed using the U.S. statutory federal rate primarily due to the U.S. production activities deduction
benefit of $3.0 million, effect of lower foreign tax rates and other foreign adjustments of $2.6 million, and reductions
in tax contingencies of $3.2 million. These decreases were partially offset by state tax expense, net of federal benefit,
of $3.2 million.

Plumbing & Refrigeration Segment

The following table compares summary operating results for 2014, 2013, and 2012 for the businesses comprising our
Plumbing & Refrigeration segment:

(In thousands)

2014

2013

2012

Percent Change
2014 vs. 2013 2013 vs. 2012

Net sales
Operating income

$ 1,416,701 $ 1,225,306 $ 1,238,230
87,014

93,230 219,146

15.6%

(57.5)

(1.0)%

151.9

The increase in net sales in 2014 was primarily due to (i) incremental sales of $91.7 million contributed by Yorkshire,
(ii) $109.1 million of sales contributed by Howell, and (iii) an increase in net sales of $23.2 million from the segment’s
non-core product lines. The decrease in net sales in 2013 was primarily due to lower net selling prices in the
segment’s core product lines of $38.7 million. This was partially offset by an increase in unit sales volume due to
$14.3 million of sales recorded by Howell and $12.4 million in the segment’s other core product lines.

F-5

The following tables compare operating expenses as dollar amounts and as a percent of net sales for 2014, 2013, and
2012:

(In thousands)

2014

2013

2012

Cost of goods sold
Depreciation and amortization
Selling, general, and administrative expense
Insurance settlements
Gain on sale of assets
Impairment charges
Severance

19,613
87,539

$1,215,282 $1,043,059 $1,060,755
16,513
75,448
(1,500)
—
—
—

17,117
85,471
(103,895)
(39,765)

4,173
—

(6,259)

7,296

—

Operating expenses

$1,323,471

$1,006,160

$1,151,216

Cost of goods sold
Depreciation and amortization
Selling, general, and administrative expense
Insurance settlements
Gain on sale of assets
Impairment charges
Severance

Percent of Net Sales
2013

2014

2012

85.8%
1.4
6.2
—

(0.4)

—
0.5

85.1 %
1.4
7.0
(8.5 )
(3.2 )
0.3
—

85.7%
1.3
6.1
(0.1)
—
—
—

Operating expenses

93.5%

82.1 %

93.0%

The increase in cost of goods sold in 2014 was primarily due to the increase in net sales, while the decrease in 2013
was largely related to the decrease in the price of copper, the Company’s principal raw material. The decrease in
2013 was offset by the recognition of a gain from LIFO liquidation that resulted in a reduction of approximately $8.0
million to cost of sales in 2012. Depreciation and amortization increased in 2014 as a result of depreciation and
amortization of businesses acquired. The increase in 2013 was related to an increase in capital spending in 2012 and
2013. Selling, general, and administrative expenses increased in 2014 primarily as a result of higher employment
costs, including incentive compensation, of $2.8 million and incremental costs associated with Howell and Yorkshire.
This was offset by a reduction in expense related to legal matters of $3.0 million. The increase in 2013 was due to
higher employment costs, including incentive compensation, of $5.4 million, an increase in legal fees of $1.3 million,
and an increase in bad debt expense of $1.0 million.

During 2014, operating results were positively impacted by a net gain of $6.3 million recorded for the sale of our
plastic pipe manufacturing assets, the land and building in Portage, Michigan, and our United Kingdom based import
distribution business. This was offset by $7.3 million in severance charges related to the reorganization of Yorkshire.

Operating income increased in 2013 primarily as a result of the $103.9 million gain recognized in the settlement of our
insurance claim related to the September 2011 fire at the Wynne, Arkansas manufacturing operation. In addition, we
sold certain of our plastic fittings manufacturing assets and recognized a pre-tax gain of $39.8 million and recognized
fixed asset impairment charges of $4.2 million.

In 2012, we settled the business interruption portion of our insurance claim related to the July 2009 explosion at our
copper tube facility in Fulton, Mississippi and recorded a $1.5 million gain.

F-6

OEM Segment

The following table compares summary operating results for 2014, 2013, and 2012 for the businesses comprising our
OEM segment:

(In thousands)

2014

2013

2012

2014 vs. 2013

2013 vs. 2012

Percent Change

Net sales
Operating income

$ 959,914 $ 947,784 $ 974,606
67,087

85,714 76,631

1.3%

11.9

(2.8)%
14.2

The increase in net sales in 2014 was primarily due to an increase in unit sales volume of $46.2 million, offset by a
decrease of $31.4 million due to lower net selling prices in the segment’s core product lines of brass rod, forgings, and
commercial tube. The decrease in net sales in 2013 was primarily due to lower net selling prices of $18.6 million and
a decrease in unit sales volume of $12.7 million in the segment’s core product lines. This was partially offset by an
increase in unit sales volume due to $11.1 million of sales recorded by Westermeyer.

The following tables compare operating expenses as dollar amounts and as a percent of net sales for 2014, 2013, and
2012:

(In thousands)

2014

2013

2012

Cost of goods sold
Depreciation and amortization
Selling, general, and administrative expense
Impairment charges

$ 840,823 $ 833,518 $ 866,404
13,435
27,680
—

13,025
24,479
131

11,919
21,458
—

Operating expenses

$ 874,200

$ 871,153

$ 907,519

Cost of goods sold
Depreciation and amortization
Selling, general, and administrative expense
Impairment charges

Percent of Net Sales
2013

2014

2012

87.6%
1.2
2.2
—

87.9 %
1.4
2.6
—

88.9%
1.4
2.8
—

Operating expenses

91.0%

91.9 %

93.1%

The increase in cost of goods sold in 2014 and the decrease in 2013 were related to factors consistent with those noted
regarding changes in net sales. Depreciation and amortization decreased in 2014 and 2013 as a result of several fixed
assets becoming fully depreciated. Selling, general, and administrative expenses decreased in 2014 primarily as a
result of lower net periodic pension costs of $3.5 million. The decrease in 2013 was due to lower employment costs,
including incentive compensation, of $1.0 million and losses on fixed asset impairments recorded in 2012.

F-7

LIQUIDITY AND CAPITAL RESOURCES

The following table presents selected financial information and statistics for 2014, 2013, and 2012:

(In thousands)

2014

2013

2012

Cash and cash equivalents
Property, plant, and equipment, net
Total debt
Working capital, net of cash and current debt

Cash provided by operating activities
Cash used in investing activities
Cash used in financing activities

$ 352,134 $ 311,800 $ 198,934
244,457 233,263
235,333 234,870
317,134
372,744

245,910
241,444
387,204

90,605
(38,424)
(10,551)

128,513

108,297
(16,376)
(13,643) (408,648)

(2,985)

Management believes that cash provided by operations, funds available under the credit agreement, and cash on hand
of $352.1 million will be adequate to meet the Company’s normal future capital expenditure and operational
needs. Our current ratio (current assets divided by current liabilities) was 4.0 to 1 as of December 27, 2014.

As of December 27, 2014, $91.6 million of our cash and cash equivalents were held by foreign subsidiaries. The
Company expects to repatriate $2.2 million of this cash and has accrued deferred tax on these earnings. All other
earnings of the foreign subsidiaries are considered to be permanently reinvested, and it is not practicable to compute
the potential deferred tax liability associated with these undistributed foreign earnings. The Company believes that
cash held domestically, funds available through the credit agreement, and cash generated from U.S. based operations
will be adequate to meet the future needs of the U.S. based operations.

The Company has significant environmental remediation obligations expected to occur over future years.
Approximately $2.2 million was spent during 2014 for environmental matters. As of December 27, 2014, the
Company expects to spend $0.7 million in 2015, $0.8 million in 2016, $0.7 million in 2017, $0.7 million in 2018, $0.8
million in 2019, and $9.4 million thereafter for ongoing projects. The timing of a potential payment for a $9.5 million
settlement offer related to the Southeast Kansas Sites has not yet been determined.

Cash used to fund pension and other postretirement benefit obligations was $4.4 million in 2014 and $2.8 million in
2013.

Our Board of Directors declared a regular quarterly dividend of 7.5 cents per share for each quarter of fiscal 2014 and
6.25 cents per share on our common stock for each fiscal quarter of 2013. Payment of dividends in the future is
dependent upon the Company’s financial condition, cash flows, capital requirements, and other factors.

Fluctuations in the cost of copper and other raw materials affect the Company’s liquidity. Changes in material costs
directly impact components of working capital, primarily inventories and accounts receivable. The price of copper
has fluctuated significantly and averaged approximately $3.12 in 2014, $3.34 in 2013, and $3.61 in 2012.

Cash Provided by Operating Activities

During 2014, cash provided by operating activities was primarily attributable to consolidated net income of $102.5
million and depreciation and amortization of $34.1 million. These cash increases were offset by increased
receivables of $21.4 million, an increase in other assets of $23.7 million, and a decrease in other liabilities of $2.2
million. These changes were primarily due to increased sales volume in certain businesses and additional working
capital needs of acquired businesses.

During 2013, the primary components of cash provided by operating activities were consolidated net income of
$173.3 million, partially offset by the gain related to the settlement of the insurance claim for the September 2011 fire
in Wynne, Arkansas of $106.3 million and the $39.8 million gain on the sale of the plastic fittings manufacturing
assets. There were also increases due to the non-capital related insurance proceeds of $32.4 million, changes in
working capital, and non-cash adjustments primarily consisting of depreciation and amortization of $30.9 million and

F-8

deferred income taxes of $19.2 million. Major changes in working capital included a $19.4 million decrease in trade
accounts receivable and a $14.1 million decrease in current liabilities. Changes in the components of working capital
are heavily driven by the changes in raw material prices, primarily copper.

Cash Used in Investing Activities

The major components of net cash used in investing activities in 2014 included $30.1 million for the acquisition of
Yorkshire, capital expenditures of $39.2 million, and deposits into restricted cash of $2.9 million. These decreases
were partially offset by $33.8 million proceeds from the sales of assets.

The major components of net cash used in investing activities in 2013 included $55.3 million for the acquisition of
Howell and $41.3 million used for capital expenditures. These decreases were partially offset by $65.1 million for
proceeds from the sale of assets, including certain plastic fittings manufacturing assets, and $29.9 million for
insurance proceeds for property and equipment related to the fire at our Wynne, Arkansas manufacturing operation.

Cash Used in Financing Activities

For 2014, net cash used in financing activities consisted primarily of $16.8 million for payment of regular quarterly
dividends to stockholders of the Company, offset by $7.3 million received for the issuance of debt by
Mueller-Xingrong.

For 2013, net cash used in financing activities totaled $13.6 million, which consisted primarily of $13.9 million for
payment of regular quarterly dividends to stockholders of the Company.

Property, Plant, and Equipment, net

The Company’s capital expenditures were $39.2 million during 2014 and related primarily to upgrading equipment
and implementing new manufacturing technologies in our copper tube and brass rod mills. We anticipate investing
approximately $35 million to $40 million for capital expenditures during 2015.

Long-Term Debt

Additionally, MEL’s credit agreement (the Invoice Facility, described in Note 7 of the Notes to the Consolidated
Financial Statements) has a total borrowing capacity of £40.0 million, or approximately $62.2 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. MEL did not have any borrowings outstanding under the
Invoice Facility at December 27, 2014.

On September 23, 2013, Mueller-Xingrong entered into 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. Borrowings under the JV Credit Agreement bear an interest rate at the
latest base-lending rate published by the People’s Bank of China, which was 5.6 percent at December 27, 2014. On
February 2, 2015, Mueller-Xingrong entered into a new secured revolving credit agreement with a total borrowing
capacity of RMB 230 million (or approximately $37.1 million). In addition, Mueller-Xingrong occasionally finances
working capital through various accounts receivable and bank draft discount arrangements. Total borrowings at
Mueller-Xingrong were $35.2 million at December 27, 2014.

As of December 27, 2014, the Company’s total debt was $241.4 million or 23.3 percent of its total capitalization.

F-9

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 December 27,
2014, the Company was in compliance with all of its debt covenants.

Share Repurchase Program

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 stock-based compensation plans, as well as for other corporate purposes. From its initial authorization in
1999 through December 27, 2014, the Company had repurchased approximately 4.7 million shares under this
authorization.

CONTRACTUAL CASH OBLIGATIONS

The following table presents payments due by the Company under contractual obligations with minimum firm
commitments as of December 27, 2014:

(In millions)

Total

2015

2016-2017 2018-2019 Thereafter

Payments Due by Year

Total debt
Consulting agreement (1)
Operating leases
Heavy machinery and equipment

commitments

Purchase commitments (2)
Interest payments (3)

241.4 $
2.7
15.3

1.5
603.7
16.6

36.2 $
1.3
6.2

1.5
603.7
5.5

202.0 $
1.4
6.6

—
—
11.0

2.0 $
—
2.5

—
—
0.1

Total contractual cash obligations

881.2 $

654.4 $

221.0 $

4.6 $

1.2
—
—

—
—
—

1.2

(1) See Note 8 to Consolidated Financial Statements.

(2) The Company has contractual supply commitments for raw materials totaling $565.2 million at year-end prices;
these contracts contain variable pricing based on Comex and the London Metals Exchange. These
commitments are for purchases of raw materials that are expected to be consumed in the ordinary course of
business.

(3) These payments represent interest on variable rate debt based on rates in effect at December 27, 2014. The
Company has entered into an interest rate swap, effective January 12, 2015, which will fix the interest rate
associated with the majority of its variable rate debt.

The above obligations will be satisfied with existing cash, funds available under the credit agreement, and cash
generated by operations. The Company has no off-balance sheet financing arrangements except for the operating
leases identified above.

MARKET RISKS

The Company is exposed to market risks 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. Hedging
transactions are authorized and executed pursuant to policies and procedures. Further, the Company does not buy or
sell financial instruments for trading purposes. A discussion of the Company’s accounting for derivative instruments

F-10

and hedging activities is included in “Note 1 - Summary of Significant Accounting Policies” in the Notes to
Consolidated Financial Statements.

Cost and Availability of Raw Materials and Energy

Raw materials, primarily 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 our
control. Significant increases in the cost of metal, to the extent not reflected in prices for our 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 forward fixed-price arrangements with certain customers. We may utilize
futures contracts to hedge risks associated with these forward fixed-price arrangements. We 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 (AOCI) 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 year-end, the Company held open futures contracts to purchase
approximately $23.7 million of copper over the next 12 months related to fixed-price sales orders and to sell
approximately $1.6 million of copper over the next three months related to copper inventory.

We 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 futures positions are
deferred in equity as a component of AOCI and reflected in earnings upon consumption of natural gas. Periodic value
fluctuations of the futures contracts generally offset the value fluctuations of the underlying natural gas prices. There
were no open futures contracts to purchase natural gas at December 27, 2014.

Interest Rates

The Company had variable-rate debt outstanding of $241.4 million at December 27, 2014 and $235.3 million at
December 28, 2013. At these borrowing levels, a hypothetical 10 percent increase in interest rates would have had an
insignificant unfavorable impact on the Company’s pre-tax 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 December 27, 2014 or
December 28, 2013.

We have reduced our 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 Consolidated
Balance Sheets, and the related gains and losses on the contracts are deferred in stockholders’ equity as a component
of AOCI. 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. We 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 equity as a component of AOCI and reflected in earnings upon collection of
receivables or payment of commitments. At December 27, 2014, the Company had open forward contracts with a
financial institution to sell approximately 0.6 million Canadian dollars, 5.1 million euros, 25.8 million Swedish
kronor, and 6.8 million Norwegian kroner through December 2015. It also held open futures contracts to buy
approximately 1.5 million euros through March 2015.

F-11

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 we are 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, we generally do
not hedge these net investments. The net investment in foreign subsidiaries translated into U.S. dollars using the
year-end exchange rates was $185.6 million at December 27, 2014 and $174.8 million at December 28, 2013. The
potential loss in value of the Company’s net investment in foreign subsidiaries resulting from a hypothetical 10
percent adverse change in quoted foreign currency exchange rates at December 27, 2014 and December 28, 2013
amounted to $18.6 million and $17.5 million, respectively. This change would be reflected in the foreign currency
translation component of AOCI in the equity section of our Consolidated Balance Sheets until the foreign subsidiaries
are sold or otherwise disposed.

The Company has significant investments in foreign operations whose functional currency is the British pound
sterling and the Mexican peso. During 2014, the value of the Mexican peso decreased approximately 11 percent and
the British pound decreased approximately six percent relative to the U.S. dollar, respectively. The resulting foreign
currency translation losses were recorded as a component of AOCI.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The Company’s Consolidated Financial Statements are prepared in accordance with accounting principles generally
accepted in the United States. Application of these principles requires the Company to make estimates, assumptions,
and judgments that affect the amounts reported in the Consolidated Financial Statements. Management believes the
most complex and sensitive judgments, because of their significance to the Consolidated Financial Statements, result
primarily from the need to make estimates about the effects of matters which are inherently uncertain. The accounting
policies and estimates that are most critical to aid in understanding and evaluating the results of operations and
financial position of the Company include the following:

Inventory Valuation

The Company’s inventories are valued at the lower-of-cost-or-market. The material component of its U.S. copper
tube and copper fittings inventories is valued on a last-in, first-out (LIFO) basis. Other manufactured inventories,
including the non-material components of U.S. copper tube and copper fittings, are valued on a first-in, first-out
(FIFO) basis. Certain inventories purchased for resale are valued on an average cost basis. Elements of cost in
finished goods inventory in addition to the cost of material include depreciation, amortization, utilities, consumable
production supplies, maintenance, production wages, and transportation costs.

The market price of copper cathode and scrap are subject to volatility. During periods when open market prices
decline below net realizable value, the Company may need to provide an allowance to reduce the carrying value of its
inventory. In addition, certain items in inventory may be considered obsolete and, as such, the Company may
establish an allowance to reduce the carrying value of those items to their net realizable value. Changes in these
estimates related to the value of inventory, if any, may result in a materially adverse impact on our reported financial
position or results of operations. The Company recognizes the impact of any changes in estimates, assumptions, and
judgments in income in the period in which it is determined.

Goodwill

F-12

reporting unit had been purchased on that date. If the implied fair value of goodwill is less than the carrying value, an
impairment charge is recorded. Inputs to that model include various estimates, including cash flow projections and
assumptions. Some of the inputs are highly subjective and are affected by changes in business conditions and other
factors. Changes in any of the inputs could have an effect on future tests and result in material impairment charges.

The Company has three reporting units with goodwill. Two of these reporting units are included in the Plumbing &
Refrigeration segment, and one is included in the OEM segment.

Income Taxes

Deferred income tax assets and liabilities are recognized when differences arise between the treatment of certain items
for financial statement and tax purposes. Realization of certain components of deferred tax assets is dependent upon
the occurrence of future events. The Company records valuation allowances to reduce its deferred tax assets to the
amount it believes is more likely than not to be realized. These valuation allowances can be impacted by changes in
tax laws, changes to statutory tax rates, and future taxable income levels and are based on the Company’s judgment,
estimates, and assumptions. In the event the Company were to determine that it would not be able to realize all or a
portion of the net deferred tax assets in the future, the Company would increase the valuation allowance through a
charge to income tax expense in the period that such determination is made. Conversely, if the Company were to
determine that it would be able to realize its deferred tax assets in the future, in excess of the net carrying amounts, the
Company would decrease the recorded valuation allowance through a decrease to income tax expense in the period
that such determination is made.

The Company provides for uncertain tax positions and the related interest and penalties, if any, based upon
management’s assessment of whether a tax benefit is more likely than not to be sustained upon examination by tax
authorities. Tax benefits for uncertain tax positions that are recognized in the financial statements are measured as the
largest amount of benefit, determined on a cumulative probability basis, that is more likely than not to be realized upon
ultimate settlement. To the extent the Company prevails in matters for which a liability for an uncertain tax position is
established or is required to pay amounts in excess of the liability, its effective tax rate in a given financial statement
period may be affected.

Environmental Reserves

The Company recognizes an environmental liability when it is probable the liability exists and the amount is
reasonably estimable. We estimate the duration and extent of our remediation obligations based upon reports of
outside consultants; internal analyses of cleanup costs, and ongoing monitoring costs; communications with
regulatory agencies; and changes in environmental law. If we were to determine that our estimates of the duration or
extent of our environmental obligations were no longer accurate, we would adjust our environmental liabilities
accordingly in the period that such determination is made. Estimated future expenditures for environmental
remediation are not discounted to their present value. Accrued environmental liabilities are not reduced by potential
insurance reimbursements.

Environmental expenses that relate to ongoing operations are included as a component of cost of goods
sold. Environmental expenses related to non-operating properties are included in other income, net in the
Consolidated Statements of Income.

Allowance for Doubtful Accounts

The Company provides an allowance for receivables that may not be fully collected. In circumstances where we are
aware of a customer’s inability to meet their financial obligations (e.g., bankruptcy filings or substantial downgrading
of credit ratings), we record an allowance for doubtful accounts against amounts due to reduce the net recognized
receivable to the amount we believe most likely will be collected. For all other customers, we recognize an allowance
for doubtful accounts based on our historical collection experience. If circumstances change (e.g., greater than
expected defaults or an unexpected material change in a major customer’s ability to meet their financial obligations),
our estimate of the recoverability of amounts due could be changed by a material amount.

F-13

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

This Annual Report contains various forward-looking statements and includes assumptions concerning the
Company’s operations, future results, and prospects. These forward-looking statements are based on current
expectations and are subject to risk and uncertainties. In connection with the “safe harbor” provisions of the Private
Securities Litigation Reform Act of 1995, the Company provides the following cautionary statement identifying
important economic, political, and technological factors, among others, which could cause actual results or events to
differ materially from those set forth in or implied by the forward-looking statements and related assumptions.

In addition to those factors discussed under “Risk Factors” in this Annual Report on Form 10-K, such factors include:
(i) the current and projected future business environment, including interest rates and capital and consumer spending;
(ii) the domestic housing and commercial construction industry environment; (iii) availability and price fluctuations in
commodities (including copper, natural gas, and other raw materials, including crude oil that indirectly affects plastic
resins); (iv) competitive factors and competitor responses to the Company’s initiatives; (v) stability of government
laws and regulations, including taxes; (vi) availability of financing; and (vii) continuation of the environment to make
acquisitions, domestic and foreign, including regulatory requirements and market values of candidates.

F-14

MUELLER INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF INCOME
Years Ended December 27, 2014, December 28, 2013, and December 29, 2012

(In thousands, except per share data)

2014

2013

2012

Net sales

$2,364,227 $2,158,541 $2,189,938

Cost of goods sold
Depreciation and amortization
Selling, general, and administrative expense
Insurance settlements
Gain on sale of assets
Impairment charges
Litigation settlements
Severance

Operating income

Interest expense
Other (expense) income, net

Income before income taxes

Income tax expense

Consolidated net income

32,394

33,735
131,740

2,043,719 1,862,089 1,904,463
31,495
134,914 129,456
(1,500)
—
—
(4,050)
3,369

— (106,332)
(39,765)
4,304

(6,259)
—
—
7,296

—
—

153,996

270,937 126,705

(5,740)
(243)

(3,990)
4,451

(6,890)
539

148,013

271,398 120,354

(45,479)

(98,109)

(36,681)

102,534

173,289

83,673

Less net income attributable to noncontrolling interest

(974)

(689)

(1,278)

Net income attributable to Mueller Industries, Inc.

$ 101,560 $ 172,600 $

82,395

Weighted average shares for basic earnings per share
Effect of dilutive stock-based awards

56,042
726

55,742
742

70,664
828

Adjusted weighted average shares for diluted earnings per share

56,768

56,484

71,492

Basic earnings per share

Diluted earnings per share

Dividends per share

1.81 $

3.10 $

1.17

1.79 $

3.06 $

1.15

0.3000 $

0.2500 $

0.2125

See accompanying notes to consolidated financial statements.

F-15

MUELLER INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Years Ended December 27, 2014, December 28, 2013, and December 29, 2012

(In thousands)

2014

2013

2012

Consolidated net income

$ 102,534 $ 173,289 $

83,673

Other comprehensive (loss) income, net of tax:

Foreign currency translation
Net change with respect to derivative instruments and hedging

activities(1)

Net actuarial (loss) gain on pension and postretirement

obligations(2)

Other, net

(6,766)

3,285

8,070

(2,499)

1,713

255

(23,006)
15

27,369
151

(847)
14

Total other comprehensive (loss) income

(32,256)

32,518

7,492

Comprehensive income
Less comprehensive income attributable to noncontrolling interest

70,278
(822)

205,807
(1,404)

91,165
(1,984)

Comprehensive income attributable to Mueller Industries, Inc.

69,456 $ 204,403 $

89,181

See accompanying notes to consolidated financial statements.

(1) Net of taxes of $1,362 in 2014, $(962) in 2013, and $(162) in 2012

(2) Net of taxes of $10,180 in 2014, $(15,015) in 2013, and $94 in 2012

F-16

MUELLER INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
As of December 27, 2014 and December 28, 2013

(In thousands, except share data)
Assets
Current assets:

2014

2013

Cash and cash equivalents
Accounts receivable, less allowance for doubtful accounts of $666 in 2014 and

$ 352,134 $ 311,800

$2,391 in 2013

Inventories
Other current assets

Total current assets

Property, plant, and equipment, net
Goodwill, net
Other assets

Total Assets

Liabilities
Current liabilities:

Current portion of debt
Accounts payable
Accrued wages and other employee costs
Other current liabilities

Total current liabilities

Long-term debt, less current portion
Pension liabilities
Postretirement benefits other than pensions
Environmental reserves
Deferred income taxes
Other noncurrent liabilities

Total liabilities

Equity
Mueller Industries, Inc. stockholders’ equity:

275,065 271,847
256,585 251,716
39,354

57,429

941,213 874,717

245,910 244,457
94,357
102,909
34,236
38,064

$1,328,096 $1,247,767

36,194 $
100,735
41,595
59,545

29,083
80,897
37,109
72,167

238,069 219,256

205,250 206,250
10,645
20,070
16,781
21,486
22,144
21,842
35,975
24,556
849
1,389

532,662 511,900

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 56,901,445 in 2014 and 56,604,674 in 2013

Additional paid-in capital
Retained earnings
Accumulated other comprehensive loss
Treasury common stock, at cost

Total Mueller Industries, Inc. stockholders’ equity

—

802

401
268,575 267,142
992,798 908,274
(10,819)
(42,923 )
(457,102 ) (461,593)

762,150 703,405
32,462
33,284

795,434 735,867

—

$1,328,096 $1,247,767

Noncontrolling interest

Total equity

Commitments and contingencies

Total Liabilities and Equity

See accompanying notes to consolidated financial statements.

F-17

MUELLER INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended December 27, 2014, December 28, 2013, and December 29, 2012

(In thousands)
Operating activities:
Consolidated net income
Reconciliation of net income to net cash provided by operating activities:

2014

2013

2012

$ 102,534 $ 173,289 $

Depreciation
Amortization of intangibles
Amortization of debt issuance costs
Stock-based compensation expense
Insurance settlements
(Gain) loss on disposal of assets
Insurance proceeds – noncapital related
Impairment charges
Income tax benefit from exercise of stock options
Deferred income taxes
(Recovery of) provision for doubtful accounts receivable
Changes in assets and liabilities, net of businesses acquired and sold:

30,205
3,530
341
6,265
—

(5,405)

—
—
(837)
(6,495)
(500)

30,946
1,448
299
5,704
(106,332)
(42,300)
32,395
4,304
(719)
19,213
(273)

83,673

30,326
1,169
438
6,136
(1,500)
1,411
14,250
—
(2,528)
(1,284)
837

Receivables
Inventories
Other assets
Current liabilities
Other liabilities
Other, net

Net cash provided by operating activities

Investing activities:
Proceeds from sale of assets, net of cash transferred
Acquisition of businesses, net of cash acquired
Capital expenditures
Insurance proceeds
Net (deposits into) withdrawals from restricted cash balances

Net cash used in investing activities

Financing activities:
Dividends paid to stockholders of Mueller Industries, Inc.
Repurchase of common stock
Repayments of long-term debt
Issuance (repayment) of debt by joint venture, net
Issuance of long-term debt
Net cash used to settle stock-based awards
Income tax benefit from exercise of stock options
Debt issuance costs

Net cash used in financing activities

Effect of exchange rate changes on cash

Increase (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the year

(21,432)
1,381
(23,652)
5,849
(2,223)
1,044

19,383
5,963
562
(14,139)
(1,935)
705

(23,690)
(4,834)
(14,985)
8,368
9,345
1,165

90,605

128,513 108,297

33,788
(30,137)
(39,173)
—
(2,902)

65,147
(55,276)
(41,349)
29,910
(1,417)

517
(11,561)
(56,825)
42,250
9,243

(38,424)

(2,985)

(16,376)

(16,819)
—
(1,050)
7,258
—
(777)
837
—

(13,941)

(14,891)
— (427,446)
(1,000) (149,176)
(14,429)
857
— 200,000
(4,181)
2,528
(1,053)

(228)
719
(50)

(10,551)

(13,643) (408,648)

(1,296)

981

1,499

40,334
311,800

112,866 (315,228)
198,934 514,162

Cash and cash equivalents at the end of the year

$ 352,134 $ 311,800 $ 198,934

See accompanying notes to consolidated financial statements.

F-18

MUELLER INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Years Ended December 27, 2014, December 28, 2013, and December 29, 2012

(In thousands)
Common stock:
Balance at beginning of year
Issuance of shares under

two-for-one stock split

2014

2013

2012

Amount

80,183 $

401

80,183 $

401

80,183 $

401

—

401

—

Balance at end of year

80,183 $

802

80,183 $

401

80,183 $

401

Additional paid-in capital:
Balance at beginning of year
Issuance of shares under

incentive stock option
plans

Stock-based compensation

expense

Income tax benefit from

exercise of stock options

Issuance of shares under

two-for-one stock split
Issuance of restricted stock

$ 267,142

$ 267,826

$ 266,936

(1,646)

6,265

837

(401)

(3,622)

(1,205)

5,704

719

—
(5,902)

(4,303)

6,136

2,528

—
(3,471)

Balance at end of year

$ 268,575

$ 267,142

$ 267,826

Retained earnings:
Balance at beginning of year
Net income attributable to

Mueller Industries, Inc.
Dividends paid or payable to
stockholders of Mueller
Industries, Inc.

$ 908,274

$ 749,777

$ 682,380

101,560

172,600

82,395

(17,036)

(14,103)

(14,998)

Balance at end of year

$ 992,798

$ 908,274

$ 749,777

Accumulated other
comprehensive (loss) income:
Balance at beginning of year
Total other comprehensive

(loss) income attributable
to Mueller Industries, Inc.

$ (10,819)

$ (42,623)

$ (49,409)

(32,104)

31,804

6,786

Balance at end of year

$ (42,923)

$ (10,819)

$ (42,623)

F-19

MUELLER INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(continued)
Years Ended December 27, 2014, December 28, 2013, and December 29, 2012

(In thousands)
Treasury stock:
Balance at beginning of year
Issuance of shares under

incentive stock option
plans

Repurchase of common stock
Issuance of restricted stock

2014

2013

2012

Amount

23,578 $ (461,593)

23,984 $ (468,473)

3,710 $ (44,620)

(208)
107
(195)

4,504
(3,832)
3,819

(244)
140
(302)

4,716
(3,738)
5,902

(1,152)
20,881
21,710 (448,205)
3,471

(284)

Balance at end of year

23,282 $ (457,102)

23,578 $ (461,593)

23,984 $ (468,473)

Noncontrolling interest:
Balance at beginning of year
Net income attributable to
noncontrolling interest
Foreign currency translation

32,462

31,058

29,074

974
(152)

689
715

1,278
706

Balance at end of year

33,284

32,462

31,058

See accompanying notes to consolidated financial statements.

F-20

Notes to Consolidated Financial Statements

Note 1 – Summary of Significant Accounting Policies

Nature of Operations

The principal business of Mueller Industries, Inc. is the manufacture and sale of copper tube and fittings; line sets;
brass and copper alloy rod, bar, and shapes; aluminum and brass forgings; aluminum and copper impact extrusions;
plastic 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. The Company markets its products to the HVAC, plumbing, refrigeration, hardware, and other
industries. Mueller’s operations are located throughout the United States and in Canada, Mexico, Great Britain, and
China.

Fiscal Years

The Company’s fiscal year consists of 52 weeks ending on the last Saturday of December. These dates were
December 27, 2014, December 28, 2013, and December 29, 2012.

Principles of Consolidation

The Consolidated Financial Statements include the accounts of Mueller Industries, Inc. and its majority owned
subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. The
noncontrolling interest represents a separate private ownership of 49.5 percent of Mueller-Xingrong.

Common Stock Split

On February 21, 2014, the Company 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 Consolidated Financial Statements and this Annual Report on Form 10-K have been adjusted
retroactively to reflect the stock split.

Revenue Recognition

Revenue is recognized when title and risk of loss pass to the customer, provided collection is determined to be
probable and no significant obligations remain for the Company. Estimates for future rebates on certain product lines
and product returns are recognized in the period in which the revenue is recorded. The cost of shipping product to
customers is expensed as incurred as a component of cost of goods sold.

Cash Equivalents

Temporary investments with original maturities of three months or less are considered to be cash equivalents. These
investments are stated at cost. At December 27, 2014 and December 28, 2013, temporary investments consisted of
money market mutual funds, commercial paper, bank repurchase agreements, and U.S. and foreign government
securities totaling $144.9 million and $179.2 million, respectively. Included in other current assets is restricted cash
of $8.1 million and $5.2 million at December 27, 2014 and December 28, 2013, respectively. These amounts
represent required deposits into brokerage accounts that facilitate the Company’s hedging activities and deposits that
secure certain short-term notes issued under Mueller-Xingrong’s credit facility.

Allowance for Doubtful Accounts

The Company provides an allowance for receivables that may not be fully collected. In circumstances where the
Company is aware of a customer’s inability to meet their financial obligations (e.g., bankruptcy filings or substantial
downgrading of credit ratings), it records an allowance for doubtful accounts against amounts due to reduce the net
recognized receivable to the amount it believes most likely will be collected. For all other customers, the Company

F-21

recognizes an allowance for doubtful accounts based on its historical collection experience. If circumstances change
(e.g., greater than expected defaults or an unexpected material change in a major customer’s ability to meet their
financial obligations), the Company could change its estimate of the recoverability of amounts due by a material
amount.

Inventories

The Company’s inventories are valued at the lower-of-cost-or-market. The material component of its U.S. copper
tube and copper fittings inventories is valued on a LIFO basis. Other manufactured inventories, including the
non-material components of U.S. copper tube and copper fittings, are valued on a FIFO basis. Certain inventories
purchased for resale are valued on an average cost basis. Elements of cost in finished goods inventory in addition to
the cost of material include depreciation, amortization, utilities, maintenance, production wages, and transportation
costs.

The market price of copper cathode and scrap is subject to volatility. During periods when open market prices decline
below net book value, the Company may need to provide an allowance to reduce the carrying value of its inventory. In
addition, certain items in inventory may be considered obsolete and, as such, the Company may establish an allowance
to reduce the carrying value of those items to their net realizable value. Changes in these estimates related to the value
of inventory, if any, may result in a materially adverse impact on the Company’s reported financial position or results
of operations. The Company recognizes the impact of any changes in estimates, assumptions, and judgments in
income in the period in which it is determined. See “Note 3 – Inventories” for additional information.

Property, Plant, and Equipment

Property, plant, and equipment are stated at cost. Depreciation of buildings, machinery, and equipment is provided on
the straight-line method over the estimated useful lives ranging from 20 to 40 years for buildings and five to 20 years
for machinery and equipment. Leasehold improvements are amortized over the lesser of their useful life or the
remaining lease term. Repairs and maintenance are expensed as incurred. See “Note 5 – Property, Plant, and
Equipment, Net” for additional information.

Goodwill

Goodwill represents cost in excess of fair values assigned to the underlying net assets of acquired
businesses. Goodwill is subject to impairment testing, which is performed by the Company as of the first day of the
fourth quarter of each fiscal year, unless circumstances dictate more frequent testing. For testing purposes, the
Company defines reporting units as components of its operating segments; components of a segment having similar
economic characteristics are combined. The annual impairment test is a two-step process. The first step is the
estimation of fair value of reporting units that have goodwill. If this estimate indicates that impairment potentially
exists, the second step is performed. Step two, used to measure the amount of goodwill impairment loss, compares the
implied fair value of goodwill to the carrying value. In step two the Company is required to allocate the fair value of
each reporting unit, as determined in step one, to the fair value of the reporting unit’s assets and liabilities, including
unrecognized intangible assets and corporate allocation where applicable, in a hypothetical purchase price allocation
as if the reporting unit had been purchased on that date. If the implied fair value of goodwill is less than the carrying
value, an impairment charge is recorded. The reporting units with significant recorded goodwill include Standard
Products (SPD), Mueller Europe, Limited (MEL), and Westermeyer. SPD and MEL are included in the Plumbing &
Refrigeration segment, and Westermeyer is included in the OEM segment. There can be no assurance that additional
goodwill impairment will not occur in the future.

Because there are no observable inputs available, the Company estimates fair value of reporting units based on a
combination of the market approach and income approach (Level 3 hierarchy as defined by Accounting Standards
Codification (ASC) 820, Fair Value Measurements and Disclosures (ASC 820)). The market approach measures the
fair value of a business through the analysis of publicly traded companies or recent sales of similar businesses. The
income approach uses a discounted cash flow model to estimate the fair value of reporting units based on expected
cash flows (adjusted for capital investment required to support operations) and a terminal value. This cash flow
stream is discounted to its present value to arrive at a fair value for each reporting unit. Future earnings are estimated
using the Company’s most recent annual projections, applying a growth rate to future periods. Those projections are

F-22

directly impacted by the condition of the markets in which the Company’s businesses participate. The discount rate
selected for the reporting units is generally based on rates of return available for comparable companies at the date of
valuation. See “Note 6 – Goodwill, Net” for additional information.

Self-Insurance Accruals

The Company is primarily self-insured for workers’ compensation claims and benefits paid under certain employee
health care programs. Accruals are primarily based on estimated undiscounted cost of claims, which includes incurred
but not reported claims, and are classified as accrued wages and other employee costs.

Benefit Plans

The Company sponsors several qualified and nonqualified pension and other postretirement benefit plans in the U.S.
and certain foreign locations. The Company recognizes the overfunded or underfunded status of the plans as an asset
or liability in the Consolidated Balance Sheet with changes in the funded status recorded through comprehensive
income in the year in which those changes occur. The obligations for these plans are actuarially determined and
affected by assumptions, including discount rates, expected long-term return on plan assets for defined benefit pension
plans, and certain employee-related factors, such as retirement age and mortality. The Company evaluates its
assumptions periodically and makes adjustments as necessary.

The expected return on plan assets is determined using the market value of plan assets. Differences between assumed
and actual returns are amortized to the market value of assets on a straight-line basis over the average remaining
service period of the plan participants using the corridor approach. The corridor approach defers all actuarial gains
and losses resulting from variances between actual results and actuarial assumptions. These unrecognized gains and
losses are amortized when the net gains and losses exceed 10 percent of the greater of the market value of the plan
assets or the projected benefit obligation. The amount in excess of the corridor is amortized over the average
remaining service period of the plan participants. For 2014, the average remaining service period for the pension
plans was nine years. See “Note 13 –Benefit Plans” for additional information.

Environmental Reserves and Environmental Expenses

The Company recognizes an environmental liability when it is probable the liability exists and the amount is
reasonably estimable. The Company estimates the duration and extent of its remediation obligations based upon
reports of outside consultants; internal analyses of cleanup costs and ongoing monitoring costs; communications with
regulatory agencies; and changes in environmental law. If the Company were to determine that its estimates of the
duration or extent of its environmental obligations were no longer accurate, it would adjust environmental liabilities
accordingly in the period that such determination is made. Estimated future expenditures for environmental
remediation are not discounted to their present value. Accrued environmental liabilities are not reduced by potential
insurance reimbursements.

Earnings Per Share

Basic earnings per share is computed based on the weighted average number of common shares outstanding. Diluted
earnings per share reflects the increase in weighted average common shares outstanding that would result from the
assumed exercise of outstanding stock options and vesting of restricted stock awards calculated using the treasury
stock method. Approximately 180 thousand stock-based awards were excluded from the computation of diluted
earnings per share for the year ended December 27, 2014 because they were antidilutive.

Income Taxes

F-23

the occurrence of future events. The Company records valuation allowances to reduce its deferred tax assets to the
amount it believes is more likely than not to be realized. These valuation allowances can be impacted by changes in
tax laws, changes to statutory tax rates, and future taxable income levels and are based on the Company’s judgment,
estimates, and assumptions regarding those future events. In the event the Company was to determine that it would
not be able to realize all or a portion of the net deferred tax assets in the future, it would increase the valuation
allowance through a charge to income tax expense in the period that such determination is made. Conversely, if it
were to determine that it would be able to realize its deferred tax assets in the future, in excess of the net carrying
amounts, the Company would decrease the recorded valuation allowance through a decrease to income tax expense in
the period that such determination is made.

The Company provides for uncertain tax positions and the related interest and penalties, if any, based upon
management’s assessment of whether a tax benefit is more likely than not to be sustained upon examination by tax
authorities. Tax benefits for uncertain tax positions that are recognized in the financial statements are measured as the
largest amount of benefit, determined on a cumulative probability basis, that is more likely than not to be realized upon
ultimate settlement. To the extent the Company prevails in matters for which a liability for an uncertain tax position is
established or is required to pay amounts in excess of the liability, the Company’s effective tax rate in a given financial
statement period may be affected.

These estimates are highly subjective and could be affected by changes in business conditions and other
factors. Changes in any of these factors could have a material impact on future income tax expense. See “Note 9 –
Income Taxes” for additional information.

Taxes Collected from Customers and Remitted to Governmental Authorities

Taxes assessed by a governmental authority that are directly imposed on a revenue producing transaction between the
Company and its customers, primarily value added taxes in foreign jurisdictions, are accounted for on a net (excluded
from revenues and costs) basis.

Stock-Based Compensation

The Company has in effect stock incentive plans under which stock-based awards have been granted to certain
employees and members of its Board of Directors. Stock-based compensation expense is recognized in the
Consolidated Statements of Income as a component of selling, general, and administrative expense based on the grant
date fair value of the awards. See “Note 11 – Stock-Based Compensation” for additional information.

Concentrations of Credit and Market Risk

Concentrations of credit risk with respect to accounts receivable are limited due to the large number of customers
comprising the Company’s customer base, and their dispersion across different geographic areas and different
industries, including HVAC, plumbing, refrigeration, hardware, automotive, OEMs, and others.

The Company minimizes its exposure to base metal price fluctuations through various strategies. Generally, it prices
an equivalent amount of copper raw material, under flexible pricing arrangements it maintains with its suppliers, at the
time it determines the selling price of finished products to its customers.

Derivative Instruments and Hedging Activities

The Company may utilize futures contracts to manage the volatility related to purchases of copper through cash flow
hedges. It may also utilize futures contracts to protect the value of the copper inventory on hand and firm
commitments to purchase copper through fair value hedges. The Company may elect to utilize futures contracts as
economic hedges that do not qualify for hedge accounting in accordance with ASC 815, Derivatives and Hedging
(ASC 815). In addition, the Company may use foreign currency forward contracts to reduce the risk from exchange
rate fluctuations on future purchases and intercompany transactions denominated in foreign currencies.

All derivatives are recognized in the 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

F-24

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 in the 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.

The Company primarily executes derivative contracts with major financial institutions. These counterparties expose
the Company to credit risk in the event of non-performance. The amount of such exposure is limited to the fair value
of the contract plus the unpaid portion of amounts due to the Company pursuant to terms of the derivative instruments,
if any. If a downgrade in the credit rating of these counterparties occurs, management believes that this exposure is
mitigated by provisions in the derivative arrangements which allow for the legal right of offset of any amounts due to
the Company from the counterparties with any amounts payable to the counterparties by the Company. As a result,
management considers the risk of loss from counterparty default to be minimal. See “Note 14 – Derivative
Instruments and Hedging Activities” for additional information.

Fair Value of Financial Instruments

The carrying amounts for cash and cash equivalents, accounts receivable, and accounts payable approximate fair value
due to the short-term maturity of these instruments.

The fair value of long-term debt at December 27, 2014 approximates the carrying value on that date. The estimated
fair values were determined based on quoted market prices and the current rates offered for debt with similar terms and
maturities. The fair value of long-term debt is classified as Level 2 within the fair value hierarchy. This
classification is defined as a fair value determined using market-based inputs other than quoted prices that are
observable for the liability, either directly or indirectly. Outstanding borrowings have variable interest rates that
re-price frequently at current market rates.

Foreign Currency Translation

For foreign subsidiaries in which the functional currency is other than the U.S. dollar, balance sheet accounts are
translated at exchange rates in effect at the end of the year and income statement accounts are translated at average
exchange rates for the year. Translation gains and losses are included in equity as a component of OCI. Included in
the Consolidated Statements of Income were transaction gains of $0.1 million in 2014, losses of $0.1 million in 2013,
and losses of $0.3 million in 2012.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United
States (U.S. GAAP) requires management to make estimates, assumptions, and judgments that affect the amounts
reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

F-25

Recently Issued Accounting Standards

In April 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No,
2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity (ASU
2014-08). The ASU significantly changed the criteria for reporting a discontinued operation and added disclosure
requirements for discontinued operations and other disposal transactions. It is effective for annual reporting periods
beginning after December 15, 2014 and is applied prospectively. The Company has elected early adoption of ASU
2014-08 effective September 28, 2014. The new guidance did not have a significant impact on the Company’s
Consolidated Financial Statements or related 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. The
Company is in the process of evaluating the impact of ASU 2014-09 on its Consolidated Financial Statements.

Note 2 – Acquisitions and Dispositions

Acquisitions

On October 18, 2013, the Company entered into a definitive agreement with KME Yorkshire Limited to acquire
certain assets and assume certain liabilities of its copper tube business. Yorkshire Copper Tube (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 &
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.

The Company recognized approximately $7.3 million of severance costs related to the reorganization of Yorkshire
during 2014 and expects to recognize an additional $2.7 million of expense in 2015.

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 & 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 $1.3 million to tax-deductible goodwill.

On August 16, 2012, the Company acquired 100 percent of the outstanding stock of Westermeyer Industries, Inc.
(Westermeyer) for approximately $11.6 million in cash. Westermeyer, located in Bluffs, Illinois, designs,
manufactures, and distributes high-pressure components and accessories for the air-conditioning and refrigeration
markets. The acquisition of Westermeyer complements the Company’s existing refrigeration business, a component

F-26

of the OEM segment. The fair value of the assets acquired totaled $7.5 million, consisting of receivables of $2.0
million, inventories of $1.9 million, and property, plant, and equipment of $3.6 million. These assets were partially
offset by current liabilities of approximately $1.0 million. Of the remaining purchase price, $2.3 million was allocated
to tax-deductible goodwill and $2.7 million to other intangible assets.

These acquisitions were accounted for using the acquisition method of accounting. Therefore, the results of
operations of the acquired businesses were included in the Company’s Consolidated Financial Statements from their
respective acquisition dates. The purchase price for these acquisitions, which was financed by available cash
balances, has been allocated to the assets and liabilities of the acquired businesses based on their respective fair market
values.

Dispositions

On November 21, 2014, the Company entered into a Share Purchase Agreement with Travis Perkins PLC to sell all of
the outstanding capital stock of Mueller Primaflow Limited (Primaflow), the Company’s United Kingdom based
plumbing and heating systems import distribution business, for approximately $24.9 million. Primaflow, which
serves markets in the United Kingdom and Ireland, was included in the Plumbing & Refrigeration segment and
reported net sales of $57.5 million and after-tax net income of $4.4 million for the 2014 fiscal year. The carrying
value of the assets disposed totaled $25.3 million, consisting primarily of accounts receivable and inventories. The
carrying value of the liabilities disposed totaled $7.1 million, consisting primarily of accounts payable and other
current liabilities. In addition, the Company recognized a cumulative translation loss of $6.0 million. The net gain
on the sale of this business was immaterial to the Consolidated Financial Statements.

During November 2014, the Company sold its ABS plastic pipe manufacturing assets. These assets had a carrying
value of approximately $1.9 million and were part of the SPD reporting unit, which is a component of the Plumbing &
Refrigeration segment. The sales price was $6.0 million, which resulted in a pre-tax gain of $4.1 million.

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 41 cents per diluted share after
tax.

The net book value of the plastic fittings manufacturing assets disposed 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 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 has continued to manufacture and supply plastic drain, waste, and vent (DWV) fittings, and extended its
third party supply agreement to complement its product offering with purchased products it does not manufacture with
the 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.

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 values 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 values 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).
During March 2014, the land and building in Portage were sold for $4.7 million, resulting in a pre-tax gain of $1.4
million.

F-27

Note 3 – Inventories

(In thousands)

Raw materials and supplies
Work-in-process
Finished goods
Valuation reserves

Inventories

2014

2013

53,586 $
39,707

54,613
43,796
168,481 159,422
(6,115)

(5,189)

$ 256,585 $ 251,716

Inventories valued using the LIFO method totaled $25.9 million at December 27, 2014 and $34.9 million at December
28, 2013. At December 27, 2014 and December 28, 2013, the approximate FIFO cost of such inventories was $104.8
million and $117.9 million, respectively. Additionally, the Company valued certain inventories purchased for resale
on an average cost basis. The value of those inventories was $47.7 million at December 27, 2014 and $54.7 million at
December 28, 2013.

During 2011, inventory quantities valued using the LIFO method declined which resulted in liquidation of LIFO
inventory layers. This liquidation resulted from intercompany sales; therefore, the gain from the LIFO liquidation of
approximately $8.0 million was deferred. During the first quarter of 2012, the Company sold this inventory to third
parties and recognized the gain. This recognition resulted in a reduction of approximately $8.0 million to cost of
sales, or seven cents per diluted share after tax for 2012.

At the end of 2014 and 2013, the FIFO value of inventory consigned to others was $4.3 million.

Note 4 – Consolidated Financial Statement Details

Other Current Liabilities

Included in other current liabilities were accrued discounts and allowances of $45.3 million at December 27, 2014 and
$43.2 million at December 28, 2013.

Other (Expense) Income, Net

(In thousands)

Gain on the sale of non-operating property
Interest income
Environmental expense, non-operating properties
Other

2014

2013

2012

— $
573
(822)
6

3,000 $
906
(823)
1,368

—
847
(1,128)
820

Other (expense) income, net

(243) $

4,451 $

539

F-28

Note 5 – Property, Plant, and Equipment, Net

(In thousands)

Land and land improvements
Buildings
Machinery and equipment
Construction in progress

Less accumulated depreciation

Property, plant, and equipment, net

Note 6 – Goodwill and Other Intangible Assets

Goodwill

The changes in the carrying amount of goodwill were as follows:

2014

2013

12,198 $

13,153
120,035 132,331
561,093 561,005
25,691
44,787

738,113 732,180
(492,203) (487,723)

$ 245,910 $ 244,457

(In thousands)

Balance at December 29, 2012:
Goodwill
Accumulated impairment and amortization

Additions
Disposition
Balance at December 28, 2013:
Goodwill
Accumulated impairment and amortization

Additions(1)
Currency translation
Balance at December 27, 2014:
Goodwill
Accumulated impairment and amortization

Plumbing &
Refrigeration
Segment

OEM Segment

Total

141,684 $
(39,434)

12,300 $
(9,971)

153,984
(49,405)

102,250

2,329

104,579

310
(10,532)

131,462
(39,434)

—
—

310
(10,532)

12,300
(9,971)

143,762
(49,405)

92,028

2,329

94,357

9,123
(571)

—
—

9,123
(571)

140,014
(39,434)

12,300
(9,971)

152,314
(49,405)

Goodwill, net

100,580 $

2,329 $

102,909

(1) Includes finalization of the purchase price allocation adjustment for Howell of $1.0 million

In 2013, the Company acquired Howell. Of the $55.3 million purchase price, $1.3 million was allocated to goodwill.
In 2014, the Company acquired Yorkshire. Of the $30.1 million purchase price, $8.1 million was allocated to
goodwill.

F-29

As discussed in Note 2, $10.5 million of goodwill relating to the SPD reporting unit was disposed of in 2013 in
conjunction with the sale of a business.

There were no impairment charges resulting from the 2014, 2013, or 2012 impairment tests, as the estimated fair value
of the reporting units exceeded the carrying value.

Other Intangible Assets

The gross and net book value of other intangible assets included in other assets was $7.8 million and $5.5 million,
respectively, at December 28, 2013. The carrying amount of intangible assets at December 27, 2014 was as follows:

(In thousands)

Customer relationships
Non-compete agreements
Patents and technology
Trade names and licenses
Other

Estimated
Useful Life

Gross Carrying
Amount

Accumulated
Amortization

Net Carrying
Amount

20 years $
3-5 years
10 years
3 years
2-5 years

11,852 $
4,495
6,852
1,670
877

(526) $
(1,307 )
(4,744 )
(252 )
(453 )

11,326
3,188
2,108
1,418
424

Other intangible assets

25,746 $

(7,282) $

18,464

With the acquisition of Howell in 2013, $2.3 million of the purchase price was allocated to other intangible assets
relating to trade names and customer relationships. During 2014, the purchase price allocation, including fair value
adjustments, was finalized. With the acquisition of Yorkshire in 2014, $16.9 million of the purchase price was
allocated to other intangible assets. This included customer relationships, non-compete agreements, and trade names
and licenses. The remaining change was related to currency translation.

Amortization expense for intangible assets was $3.2 million in 2014, $0.9 million in 2013, and $0.7 million in 2012.
Future amortization expense is estimated as follows:

(In thousands)

2015
2016
2017
2018
2019
Thereafter

Expected amortization expense

Amount

3,412
2,519
1,334
1,079
1,011
9,109

18,464

F-30

Note 7 – Debt

(In thousands)

Term Loan Facility with interest at 1.53%, due 2017
Mueller-Xingrong credit facility with interest at 5.60%, due 2015
2001 Series IRB’s with interest at 1.13%, due through 2021
Other

Less current portion of debt

Long-term debt

2014

2013

$ 200,000 $ 200,000
28,033
7,250
50

29,968
6,250
5,226

241,444 235,333
(29,083)
(36,194)

$ 205,250 $ 206,250

Effective May 29, 2014, the Company elected to modify 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. Borrowings under the Credit Agreement bear interest, at the Company’s option, at
LIBOR or Base Rate as defined by the Credit Agreement, plus a variable premium. LIBOR advances may be based
upon the one, three, or six-month LIBOR. The variable premium is based upon the Company’s debt to total
capitalization ratio, and can range from 112.5 to 162.5 basis points for LIBOR based loans and 12.5 to 62.5 basis
points for Base Rate loans. At December 27, 2014, the premium was 137.5 basis points for LIBOR loans and 37.5
basis points for Base Rate loans. Additionally, a facility fee is payable quarterly on the total commitment and varies
from 25.0 to 37.5 basis points based upon the Company’s debt to total capitalization ratio. Availability of funds under
the Revolving Credit Facility is reduced by the amount of certain outstanding letters of credit, which are used to secure
the Company’s payment of insurance deductibles and certain retiree health benefits, totaling approximately $10.5
million at December 27, 2014. Terms of the letters of credit are generally one year but are renewable annually. There
were no borrowings outstanding on the Revolving Credit Facility at the end of 2014.

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 $62.2 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 which totaled $57.9 million at December 27, 2014. There were no
borrowings outstanding at the end of 2014.

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. At December 27, 2014,
the Company was in compliance with all debt covenants.

F-31

Aggregate annual maturities of the Company’s debt are as follows:

(In thousands)

2015
2016
2017
2018
2019
Thereafter

Long-term debt

Amount

36,194
1,000
201,000
1,000
1,000
1,250

$ 241,444

Net interest expense consisted of the following:

(In thousands)

Interest expense
Capitalized interest

2014

2013

2012

6,393 $
(653)

5,147 $
(1,157)

6,890
—

5,740 $

3,990 $

6,890

Interest paid in 2014, 2013, and 2012 was $5.7 million, $4.9 million, and $8.4 million, respectively.

Note 8 – Commitments and Contingencies

Environmental

The Company is subject to environmental standards imposed by federal, state, local, and foreign environmental laws
and regulations. For all properties, the Company has provided and charged to expense $1.2 million in 2014, $1.0
million in 2013, and $3.1 million in 2012 for pending environmental matters. Environmental costs related to
non-operating properties are classified as a component of other income, net and costs related to operating properties
are classified as cost of goods sold. Environmental reserves totaled $22.7 million at December 27, 2014 and $23.6
million at December 28, 2013. As of December 27, 2014, the Company expects to spend $0.7 million in 2015, $0.8
million in 2016, $0.7 million in 2017, $0.7 million in 2018, $0.8 million in 2019, and $9.4 million thereafter for
ongoing projects. The timing of a potential payment for a $9.5 million settlement offer related to the Southeast Kansas
Sites has not yet been determined.

Non-operating Properties

Southeast Kansas Sites

The Kansas Department of Health and Environment (KDHE) has contacted the Company regarding environmental
contamination at three former smelter sites in Kansas (Altoona, Iola and East La Harpe). While the Company
believes that legally it is not a successor to the companies that operated these smelter sites, it is discussing possible
settlement with KDHE and other potentially responsible parties (PRP) in order to avoid litigation. In 2008, the
Company established a reserve of $9.5 million for this matter. Another PRP has conducted a site investigation of the
Altoona site under a consent decree with KDHE. The Company and two other PRPs have conducted a site study
evaluation of the East La Harpe site under KDHE supervision, and are now discussing sharing the costs of a possible
cleanup. The EPA is in the early stages of study and remediation in the vicinity of the Iola site, which it added to the
National Priority List (NPL) in May, 2013 as the “Former United Zinc & Associated Smelters” site. 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.

F-32

Shasta Area Mine Sites

Mining Remedial Recovery Company (MRRC), a wholly owned subsidiary, owns certain inactive mines in Shasta
County, California. MRRC has continued a program, begun in the late 1980s, of sealing mine portals with concrete
plugs in mine adits, which were discharging water. The sealing program achieved significant reductions in the metal
load in discharges from these adits; however, additional reductions are required pursuant to an order issued by the
California Regional Water Quality Control Board (QCB). In response to a 1996 Order issued by the QCB, MRRC
completed a feasibility study in 1997 describing measures designed to mitigate the effects of acid rock drainage. In
December 1998, the QCB modified the 1996 order extending MRRC’s time to comply with water quality
standards. In September 2002, the QCB adopted a new order requiring MRRC to adopt Best Management Practices
(BMP) to control discharges of acid mine drainage. That order extended the time to comply with water quality
standards until September 2007. During that time, implementation of BMP further reduced impacts of acid rock
drainage; however, full compliance has not been achieved. The QCB is presently renewing MRRC’s discharge
permit and will concurrently issue a new order. It is expected that the new ten-year permit will include an order
requiring continued implementation of BMP through 2025 to address residual discharges of acid rock drainage. At
this site, MRRC spent approximately $1.7 million from 2012 through 2014 and estimates that it will spend between
approximately $10.5 million and $13.0 million over the next 20 years.

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 2014, 2013 and 2012 with respect to this site. Approximate costs to comply with the post-closure
permit, including associated general and administrative costs, are between $1.9 million and $3.6 million over the next
20 years.

On April 9, 2009, pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act
(CERCLA), the EPA added the Lead Refinery site, and properties surrounding the Lead Refinery site, to the NPL. 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 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. In
November 2012, the EPA adopted a remedy in connection with properties surrounding the Lead Refinery site. 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 EPA has not contacted Lead Refinery regarding settlement of the agency’s potential claims related to the
properties surrounding the Lead Refinery site.

As of December 27, 2014, the EPA has not conducted an investigation of the Lead Refinery site, proposed remedies
for the Lead Refinery site, or informed Lead Refinery that it is a PRP at 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.

F-33

Operating Properties

Mueller Copper Tube Products, Inc.

In 1999, Mueller Copper Tube Products, Inc. (MCTP), a wholly owned subsidiary, commenced a cleanup and
remediation of soil and groundwater at its Wynne, Arkansas plant. MCTP is currently removing trichloroethylene, a
cleaning solvent formerly used by MCTP, from the soil and groundwater. On August 30, 2000, MCTP received
approval of its Final Comprehensive Investigation Report and Storm Water Drainage Investigation Report addressing
the treatment of soils and groundwater from the Arkansas Department of Environmental Quality (ADEQ). The
Company established a reserve for this project in connection with the acquisition of MCTP in 1998. Effective
November 17, 2008, MCTP entered into a Settlement Agreement and Administrative Order by Consent to submit a
Supplemental Investigation Work Plan (SIWP) and subsequent Final Remediation Work Plan for the site. By letter
dated January 20, 2010, ADEQ approved the SIWP as submitted, with changes acceptable to the Company. On
December 16, 2011, MCTP entered into an amended Administrative Order by Consent to prepare and implement a
revised Remediation Work Plan regarding final remediation for the Site. Construction and installation of the
remediation system is under way. The remediation system was activated in February 2014. Costs to implement the
work plans, including associated general and administrative costs, are approximately $0.8 million to $1.3 million over
the next ten years.

United States Department of Commerce Antidumping Review

On December 23, 2009, the DOC initiated an antidumping administrative review of the antidumping duty order
covering circular welded non-alloy steel pipe and tube from Mexico for the November 1, 2008 through October 31,
2009 period of review. The DOC selected Mueller Comercial as a respondent in the review. On June 21, 2011, the
DOC published the final results of the review and assigned Mueller Comercial an antidumping duty rate of 19.8
percent. On August 22, 2011, the Company appealed the final results to the CIT. On December 21, 2012, the CIT
issued a decision upholding the Department’s final results in part. The CIT issued its final judgment on May 2,
2013. On May 6, 2013, the Company appealed the CIT decision to the U.S. Court of Appeals for the Federal Circuit
(Federal Circuit). On May 29, 2014, the Federal Circuit issued its decision vacating the CIT’s decision and
remanding the case back to DOC to reconsider the Company’s rate. The Company and the United States have reached
an agreement to settle the appeal. The Company anticipates that certain of its subsidiaries will incur antidumping
duties on subject imports made during the period of review and, as such, established a reserve of approximately $1.1
million for this matter.

Subsequent to October 31, 2009, Mueller Comercial did not ship subject merchandise to the United States. Therefore,
there is zero antidumping duty liability for periods of review after October 31, 2009.

Leases

The Company leases certain facilities, vehicles, and equipment under operating leases expiring on various dates
through 2019. The lease payments under these agreements aggregate to approximately $6.2 million in 2015, $3.9
million in 2016, $2.6 million in 2017, $2.1 million in 2018, and $0.4 million in 2019. Total lease expense amounted to
$9.8 million in 2014, $9.1 million in 2013, and $8.5 million in 2012.

Consulting Agreement

During 2004, the Company entered into a consulting and non-compete agreement (the Consulting Agreement) with
Mr. Harvey L. Karp, at that time Chairman of the Board. The Consulting Agreement provides for post-employment
services to be provided by Mr. Karp for a six-year period. During the first four years of the Consulting Agreement, an
annual fee equal to two-thirds of the executive’s Final Base Compensation (as defined in the Consulting Agreement) is
payable. During the final two years, the annual fee is set at one-third of the executive’s Final Base
Compensation. During the term of the Consulting Agreement, Mr. Karp agrees not to engage in Competitive Activity
(as defined in the Consulting Agreement) and is entitled to receive certain other benefits from the Company.

F-34

On November 3, 2011, Mr. Karp notified the Company that he would resign as Chairman of the Company and as a
member of the Board of Directors of the Company effective as of December 31, 2011. Following his resignation, on
January 1, 2012, the Consulting Agreement commenced. Based upon the value of the non-compete provisions of the
Consulting Agreement, the Company expenses the value of the Consulting Agreement over its term. The maximum
amount payable under the remaining term of the Consulting Agreement is $2.7 million.

Other

In July 2009, there was an explosion at the Company’s copper tube facility in Fulton, Mississippi, resulting in damage
to certain production equipment. In 2010, the Company recorded a gain of $1.5 million related to the property damage
claim. In 2012, the Company settled the business interruption portion of this claim and recognized a $1.5 million gain.

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 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 2013, or $1.17 per diluted share after tax. The Company received proceeds of $62.3 million and $55.0
million in 2013 and 2012, respectively.

In October 2012, the Company settled a lawsuit against a former supplier. In connection with the settlement, the
Company received a $5.8 million cash payment which is recorded in the Consolidated Statement of Income net of
legal costs.

Additionally, 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. It may also realize the benefit of certain legal claims and litigation in the future;
these gain contingencies are not recognized in the Consolidated Financial Statements.

Note 9 – Income Taxes

The components of income before income taxes were taxed under the following jurisdictions:

(In thousands)

Domestic
Foreign

2014

2013

2012

$ 135,445 $ 262,220 $ 105,945
14,409

12,568

9,178

Income before income taxes

$ 148,013 $ 271,398 $ 120,354

F-35

Income tax expense consists of the following:

(In thousands)

Current tax expense:

Federal
Foreign
State and local

Current tax expense

Deferred tax (benefit) expense:

Federal
Foreign
State and local

2014

2013

2012

45,723 $
2,346
3,905

69,565 $
2,608
6,723

33,152
1,764
3,049

51,974

78,896

37,965

(2,469)
890
(4,916)

17,694
(376)
1,895

570
(2,015)
161

Deferred tax (benefit) expense

(6,495)

19,213

(1,284)

Income tax expense

45,479 $

98,109 $

36,681

No provision is made for U.S. income taxes applicable to undistributed earnings of foreign subsidiaries that are
indefinitely reinvested in foreign operations. It is not practicable to compute the potential deferred tax liability
associated with these undistributed foreign earnings. The Company has approximately $75.0 million of undistributed
foreign earnings for which it has not recorded deferred tax liabilities.

The difference between the reported income tax expense and a tax determined by applying the applicable U.S. federal
statutory income tax rate to income before income taxes is reconciled as follows:

(In thousands)

2014

2013

2012

Expected income tax expense
State and local income tax, net of federal benefit
Effect of foreign statutory rate different from U.S. and other foreign

51,805 $
3,355

94,989 $
6,405

42,124
3,178

adjustments

Valuation allowance changes
U.S. production activities deduction
Goodwill disposition
Tax contingency changes
Other, net

(1,094)
(5,732)
(4,025)
—
—
1,170

(1,026)
—
(4,445)
1,790
(140)
536

(2,637)
(1,224)
(2,975)
—
(3,224)
1,439

Income tax expense

45,479 $

98,109 $

36,681

During 2014, the Company released a valuation allowance of $5.7 million, or ten cents per diluted share, related to
certain state income tax credits. As a result of legislative changes enacted in 2014, the Company now expects to be
able to use such credits within the foreseeable future. During 2012, the Company released a valuation allowance of
$1.2 million, or two cents per diluted share, due to the expectation that certain state tax attributes would be utilized.

F-36

The following summarizes the activity related to the Company’s unrecognized tax benefits:

(In thousands)

Beginning balance
Increases related to prior year tax positions
Increases related to current year tax positions
Decreases related to prior year tax positions
Decreases related to settlements with taxing authorities
Decreases due to lapses in the statute of limitations

Ending balance

2014

2013

2,828 $
—
—
(2,828)
—
—

3,259
—
—
—
(431)
—

— $

2,828

The $2.8 million reduction of unrecognized tax benefits in 2014 had no impact on the effective tax rate. The
Company includes interest and penalties related to income tax matters as a component of income tax expense. The
net reduction to income tax expense related to penalties and interest was immaterial in 2014, 2013, and 2012.

The Internal Revenue Service completed its audit of the Company’s 2012 tax return during 2014, the result of which
was immaterial to the Consolidated Financial Statements. The Company is currently under audit in various other
jurisdictions.

The statute of limitations is still open for the Company’s federal tax return and most state income tax returns for 2011
and all subsequent years. The statutes of limitations for certain state and foreign returns are also open for some earlier
tax years due to differing statute periods. While the Company believes that it is adequately reserved for possible audit
adjustments, the final resolution of these examinations cannot be determined with certainty and could result in final
settlements that differ from current estimates.

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax
liabilities are presented below:

(In thousands)

Deferred tax assets:
Inventories
Other postretirement benefits and accrued items
Pension
Other reserves
Federal and foreign tax attributes
State tax attributes, net of federal benefit
Share-based compensation

Total deferred tax assets
Less valuation allowance

Deferred tax assets, net of valuation allowance

Deferred tax liabilities:

Property, plant, and equipment
Pension
Other

Total deferred tax liabilities

Net deferred tax liability

F-37

2014

2013

12,815 $
14,550
4,792
10,262
6,451
22,928
3,016

11,136
13,548
—
12,931
5,913
24,663
2,486

74,814
(17,119)

70,677
(22,544)

57,695

48,133

57,089
—
1,721

60,425
4,507
2,209

58,810

67,141

(1,115) $ (19,008)

As of December 27, 2014, after consideration of the federal impact, the Company had state income tax credit
carryforwards of $4.1 million, all of which expire by 2017, and other state income tax credit carryforwards of $11.1
million with unlimited lives. The Company had state net operating loss (NOL) carryforwards with potential tax
benefits of $7.8 million expiring between 2017 and 2029. The state tax credit and NOL carryforwards are offset by
valuation allowances totaling $11.8 million.

As of December 27, 2014, the Company had federal and foreign tax attributes with potential tax benefits of $6.4
million, of which $4.5 million has an unlimited life and $1.9 million expire from 2015 to 2019. These attributes were
offset by valuation allowances of $3.4 million.

The change in the valuation allowance was primarily related to the release of the $5.7 million valuation allowance
related to the state income tax credits as a result of 2014 legislative changes. The remainder of the change had no
material impact on the effective tax rate.

Income taxes paid were approximately $47.3 million in 2014, $80.1 million in 2013, and $38.4 million in 2012.

Note 10 – Equity

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 purchase any shares and may cancel, suspend, or extend the time
period for the purchase of shares at any time. Any purchases will be funded primarily through existing cash and cash
from operations. The Company may hold any shares purchased in treasury or use a portion of the repurchased shares
for its stock-based compensation plans, as well as for other corporate purposes. From its initial authorization in 1999
through December 27, 2014, the Company had repurchased approximately 4.7 million shares under this authorization.

The Company entered into an agreement with Leucadia National Corporation (Leucadia) pursuant to which the
Company repurchased from Leucadia 20.8 million shares of the Company’s common stock on September 24, 2012 at
a total cost of $427.3 million. The Company’s repurchase transaction with Leucadia was completed outside of the
repurchase authorization previously approved by the Board of Directors.

Note 11 – Stock-Based Compensation

The Company has in effect stock incentive plans under which stock-based awards have been granted to certain
employees and members of its Board of Directors. Under these existing plans, the Company may grant options to
purchase shares of common stock at prices not less than the fair market value of the stock on the date of grant, as well
as restricted stock awards. Generally, the awards vest annually over a five-year period beginning one year from the
date of grant. Any unexercised options expire after not more than ten years.

In May 2014, the Company’s stockholders approved the 2014 Incentive Plan (2014 Plan). The 2014 Plan authorizes
the award of stock-based incentives to employees and non-employee directors. Awards include options to purchase
stock at specified prices during specified time periods, restricted stock, restricted stock units, stock appreciation rights,
and performance awards, including cash awards. The 2014 Plan reserved 1.5 million shares of common stock which
may be issued or transferred upon the exercise of options.

During the years ended December 27, 2014, December 28, 2013, and December 29, 2012, the Company recognized
stock-based compensation, as a component of selling, general, and administrative expense, in its Consolidated
Statements of Income of $6.3 million, $5.7 million, and $4.0 million, respectively. The tax benefit from exercise
of share-based awards was $0.8 million in 2014, $0.7 million in 2013, and $2.6 million in 2012.

On October 26, 2012, the Company’s Chief Financial Officer (CFO) resigned. In connection with the resignation, on
November 7, 2012, the Company entered into a separation agreement with its former CFO. Included in the
separation agreement were provisions to allow (i) continued vesting of options to purchase shares of the Company’s
common stock and unvested shares of restricted stock previously granted and (ii) continued exercisability of vested

F-38

options through the later of the original expiration date or October 30, 2015 without regard to service. This
modification to remove the service condition resulted in the recognition of $2.1 million of compensation cost on the
modification date which is included in severance expense in the 2012 Consolidated Statement of Income.

Stock Options

The fair value of each option is estimated as a single award and amortized into compensation expense on a straight-line
or accrual basis over its vesting period based on its vesting schedule. The weighted average grant-date fair value of
options granted during 2014, 2013, and 2012 was $9.00, $8.77, and $7.45, respectively.

The Company estimates the fair value of all stock option awards as of the grant date by applying the
Black-Scholes-Merton option pricing model. The use of this valuation model in the determination of compensation
expense involves certain assumptions that are judgmental and/or highly sensitive including the expected life of the
option, stock price volatility, risk-free interest rate, and dividend yield. Additionally, forfeitures are estimated at the
time of valuation and reduce expense ratably over the vesting period. The forfeiture rate, which is adjusted
periodically based on actual forfeitures, was 16.4 percent in 2014 and 16.5 percent in 2012. Due to the nature of the
awards granted in 2013, a forfeiture rate was not considered necessary. The weighted average of key assumptions
used in determining the fair value of options granted and a discussion of the methodology used to develop each
assumption are as follows:

2014

2013

2012

Expected term
Expected price volatility
Risk-free interest rate
Dividend yield

5.6 years 5.9 years 6.5 years
37.5%
0.7%
0.9%

39.7%
0.7%
0.9%

34.3%
1.7%
1.0%

Expected term – This is the period of time estimated based on historical experience over which the options granted are
expected to remain outstanding. An increase in the expected term will increase compensation expense.

Expected price volatility – This is a measure of the amount by which a price has fluctuated or is expected to
fluctuate. The Company uses actual historical changes in the market value of its stock to calculate the volatility
assumption. Daily market value changes from the date of grant over a past period representative of the expected term
of the options are used. An increase in the expected price volatility rate will increase compensation expense.

Risk-free interest rate – This is the U.S. Treasury rate for the week of the grant, having a term representative of the
expected term of the options. An increase in the risk-free rate will increase compensation expense.

Dividend yield – This rate is the annual dividends per share as a percentage of the Company’s stock price. An increase
in the dividend yield will decrease compensation expense.

The total intrinsic value of options exercised was $3.5 million, $2.9 million, and $12.1 million in 2014, 2013, and
2012, respectively. The total fair value of options that vested was $1.0 million, $1.1 million, and $1.7 million in
2014, 2013, and 2012, respectively.

At December 27, 2014, the aggregate intrinsic value of all outstanding options was $18.2 million with a weighted
average remaining contractual term of 5.1 years. Of the outstanding options, 795 thousand are currently exercisable
with an aggregate intrinsic value of $15.1 million, a weighted average exercise price of $15.07, and a weighted
average remaining contractual term of 4.0 years.

The total compensation expense not yet recognized related to unvested options at December 27, 2014 was $1.4 million
with an average expense recognition period of 3.0 years.

F-39

Restricted Stock Awards

The fair value of each restricted stock award equals the fair value of the Company’s stock on the grant date and is
amortized into compensation expense on a straight-line or accrual basis over its vesting period based on its vesting
schedule. The weighted average grant-date fair value of awards granted during 2014, 2013, and 2012 was $28.80,
$28.32, and $21.42, respectively.

The aggregate intrinsic value of outstanding and unvested awards was $24.7 million at December 27, 2014. Total
compensation expense for restricted stock awards not yet recognized was $13.3 million with an average expense
recognition period of 3.6 years. The total fair value of awards that vested was $4.2 million, $1.8 million, and $1.7
million in 2014, 2013, and 2012, respectively.

The Company generally issues treasury shares when options are exercised or restricted stock awards are granted. A
summary of the activity and related information follows:

Stock Options

Restricted Stock
Awards

(Shares in thousands)

Weighted
Average
Exercise
Price

Weighted
Average
Grant
Date Fair
Value

Outstanding at December 28, 2013

Granted
Exercised
Forfeited

Outstanding at December 27, 2014

1,177 $
202
(231)
(21)

1,127

14.67
28.79
13.20
21.22

17.38

732 $
197
(200)
(2)

21.75
28.80
21.00
28.28

727

25.21

Approximately 1.6 million shares were available for future stock incentive awards at December 27, 2014.

Note 12 – Accumulated Other Comprehensive Income (Loss)

AOCI includes certain foreign currency translation adjustments from those subsidiaries not using the U.S. dollar as
their functional currency, net deferred gains and losses on certain derivative instruments accounted for as cash flow
hedges, adjustments to pension and OPEB liabilities, and unrealized gains and losses on marketable securities
classified as available-for-sale.

F-40

The following table provides changes in AOCI by component, net of taxes and noncontrolling interest (amounts in
parentheses indicate debits to AOCI):

(In thousands)

Unrealized
(Losses)/
Gains on

Minimum
Pension/
OPEB
Liability

Unrealized
Gains on
Equity

Derivatives

Adjustment

Investments

Total

Cumulative
Translation
Adjustment

Balance at December 29, 2012

(3,032) $

(167) $

(39,527) $

103 $

(42,623)

Other comprehensive income

(loss) before
reclassifications

Amounts reclassified from AOCI

2,570
—

(2,102)
3,815

24,851
2,518

152
—

25,471
6,333

Balance at December 28, 2013

(462)

1,546

(12,158)

255

(10,819)

Other comprehensive income

(loss) before
reclassifications

Amounts reclassified from AOCI

(12,613)
5,999

(2,766)
267

(23,475)
469

15
—

(38,839)
6,735

Balance at December 27, 2014

(7,076) $

(953) $

(35,164) $

270 $

(42,923)

F-41

Reclassification adjustments out of AOCI were as follows:

(In thousands)

2014

2013

2012

Affected Line Item

Amount reclassified from AOCI

Unrealized losses on derivatives:

Commodity contracts
Foreign currency contracts

328 $
—
(61)

5,618 $
54
(1,857)

763 Cost of goods sold
— Depreciation expense

(294) Income tax expense

267
—

3,815
—

469 Net of tax
— Noncontrolling interest

267

3,815

469

noncontrolling interest

Net of tax and

Amortization of net loss and prior service

cost on employee benefit plans

541
$
(72)

3,844
$
(1,326)

3,809
(1,308) Income tax expense

and administrative expense

Selling, general,

469
—

2,518
—

2,501 Net of tax

— Noncontrolling interest

469

2,518

2,501

interest

Net of tax and noncontrolling

Loss recognized upon sale of business

5,999 $
—

5,999
—

— $
—

—
—

— Gain on sale of assets
— Income tax benefit

— Net of tax
— Noncontrolling interest

5,999 $

— $

—

noncontrolling interest

Net of tax and

F-42

Note 13 – Benefit Plans

Pension and Other Postretirement Plans

The Company sponsors several qualified and nonqualified pension plans and other postretirement benefit plans for
certain employees. The following tables provide a reconciliation of the changes in the plans’ benefit obligations and
the fair value of the plans’ assets for 2014 and 2013, and a statement of the plans’ aggregate funded status:

(In thousands)
Change in benefit obligation:

Obligation at beginning of year
Service cost
Interest cost
Actuarial loss (gain)
Benefit payments
Foreign currency translation adjustment

Pension Benefits
2013
2014

Other Benefits

2014

2013

$ 184,058 $ 196,167 $
948
7,774
(11,635)
(10,668)
1,472

973
8,590
30,138
(11,064)
(4,957)

15,381 $
348
685
4,272
(1,142)
(237)

18,096
413
647
(2,554)
(1,211)
(10)

Obligation at end of year

207,738

184,058

19,307

15,381

Change in fair value of plan assets:

Fair value of plan assets at beginning of year
Actual return on plan assets
Employer contributions
Benefit payments
Foreign currency translation adjustment

188,870
12,716
3,275
(11,064)
(3,781)

160,980
35,578
1,551
(10,668)
1,429

—
—
1,142
(1,142)
—

—
—
1,211
(1,211)
—

Fair value of plan assets at end of year

190,016

188,870

—

(Underfunded) funded status at end of year

$ (17,722) $

4,812 $ (19,307) $ (15,381)

The following represents amounts recognized in AOCI (before the effect of income taxes):

(In thousands)

Pension Benefits
2013
2014

Other Benefits

2014

2013

Unrecognized net actuarial loss (gain)
Unrecognized prior service cost

49,830 $
—

21,128 $
1

473 $
14

(4,016)
20

The Company sponsors one pension plan in the U.K. which comprised 40 percent of the above benefit obligation at
December 27, 2014 and December 28, 2013, and 34 percent of the above plan assets at December 27, 2014 and
December 28, 2013, respectively.

As of December 27, 2014, $2.9 million of the actuarial net loss will, through amortization, be recognized as
components of net periodic benefit cost in 2015.

The aggregate status of all overfunded plans is recognized as an asset and the aggregate status of all underfunded plans
is recognized as a liability in the Consolidated Balance Sheets. The amounts recognized as a liability are classified as
current or long-term on a plan-by-plan basis. Liabilities are classified as current to the extent the actuarial present
value of benefits payable within the next 12 months exceeds the fair value of plan assets, with all remaining amounts
being classified as long-term. As of December 27, 2014 and December 28, 2013, the total funded status of the plans
recognized in the Consolidated Balance Sheets was as follows:

F-43

(In thousands)

Long-term asset
Current liability
Long-term liability

Pension Benefits
2013
2014

Other Benefits

2014

2013

2,348 $
—
(20,070)

15,457 $
—
(10,645)

— $
(1,251)
(18,056)

—
(1,033)
(14,348)

Total (underfunded) funded status

$ (17,722) $

4,812 $ (19,307) $ (15,381)

The components of net periodic benefit cost are as follows:

(In thousands)
Pension benefits:
Service cost
Interest cost
Expected return on plan assets
Amortization of prior service cost
Amortization of net loss

2014

2013

2012

973 $
8,590
(13,669)
1
752

948 $
7,774
(11,059)
1
4,005

884
8,472
(10,263)
1
3,883

Net periodic benefit (income) cost

(3,353) $

1,669 $

2,977

Other benefits:

Service cost
Interest cost
Amortization of prior service cost (credit)
Amortization of net gain

348 $
685
6
(218)

413 $
647
(2)
(160)

380
635
(2)
(73)

Net periodic benefit cost

821 $

898 $

940

The weighted average assumptions used in the measurement of the Company’s benefit obligations are as follows:

Discount rate
Expected long-term return on plan assets
Rate of compensation increases
Rate of inflation

Pension Benefits
2013
2014

Other Benefits

2014

2013

4.03%
5.58%
N/A
3.10%

4.82%
7.40%
N/A
3.40%

4.33%
N/A
5.00%
N/A

4.89%
N/A
5.50%
N/A

The weighted average assumptions used in the measurement of the Company’s net periodic benefit cost are as follows:

2014

Pension Benefits
2013

2012

2014

Other Benefits
2013

2012

Discount rate
Expected long-term return on

plan assets

Rate of compensation increases
Rate of inflation

4.82%

4.13%

4.80%

4.89%

4.06%

4.97%

7.40%
N/A
3.40%

7.15%
N/A
2.70%

7.11%
N/A
3.00%

N/A
5.50%
N/A

N/A
5.04%
N/A

The Company’s Mexican postretirement plans use the rate of compensation increase in the benefit formulas. Past
service on the U.K. pension plan will be adjusted for the effects of inflation. All other pension and postretirement
plans use benefit formulas based on length of service.

F-44

The annual assumed rate of increase in the per capita cost of covered benefits (i.e., health care cost trend rate) is
assumed to range from 7.0 to 9.0 percent for 2015, gradually decrease to 4.5 percent through 2022, and remain at that
level thereafter. The health care cost trend rate assumption could have a significant effect on the amounts reported.
For example, increasing the assumed health care cost trend rates by one percentage point would increase the
accumulated postretirement benefit obligation by $2.0 million and the service and interest cost components of net
periodic postretirement benefit costs by $0.1 million for 2015. Decreasing the assumed health care cost trend rates by
one percentage point in each year would decrease the accumulated postretirement benefit obligation and the service
and interest cost components of net periodic postretirement benefit costs for 2015 by $1.7 million and $0.1 million,
respectively.

Pension Assets

The weighted average asset allocation of the Company’s pension fund assets are as follows:

Asset category

Equity securities (includes equity mutual funds)
Fixed income securities (includes fixed income mutual funds)
Cash and equivalents (includes money market funds)
Alternative investments

Total

Pension Plan Assets

2014

2013

49%
4
44
3

86%
4
7
3

100%

At December 27, 2014, the long-term target allocation, by asset category, of assets of its defined benefit pension plans
was: (i) fixed income securities – at least 60 percent; (ii) equity securities, including equity index funds – not more
than 30 percent; and (iii) alternative investments – not more than 5 percent.

The pension plan obligations are long-term and, accordingly, the plan assets are invested for the long-term. Plan
assets are monitored periodically. Based upon results, investment managers and/or asset classes are redeployed when
considered necessary. None of the plans’ assets are expected to be returned to the Company during the next fiscal
year. The assets of the plans do not include investments in securities issued by the Company.

The estimated rates of return on plan assets are the expected future long-term rates of earnings on plan assets and are
forward-looking assumptions that materially affect pension cost. Establishing the expected future rates of return on
pension assets is a judgmental matter. The Company reviews the expected long-term rates of return on an annual
basis and revises as appropriate. The expected long-term rate of return on plan assets was 5.58 percent for 2014 and
7.40 percent in 2013. For 2014, the Company lowered its expected return assumption, as it refined its asset and
liability management strategy. In lowering this assumption, management considered the historical returns,
investment strategy, and target composition of each plan’s portfolio.

The Company’s investments for its pension plans are reported at fair value. The following methods and assumptions
were used to estimate the fair value of the Company’s plan asset investments:

Cash and money market funds – Valued at cost, which approximates fair value.

Common stock – Valued at the closing price reported on the active market on which the individual securities are
traded.

Mutual funds – Valued at the net asset value of shares held by the plans at December 27, 2014 and December 28, 2013,
respectively, based upon quoted market prices.

Limited partnerships – Limited partnerships include investments in various Cayman Island multi-strategy hedge
funds. The plans’ investments in limited partnerships are valued at the estimated fair value of the class shares owned
by the plans based upon the equity in the estimated fair value of those shares. The estimated fair values of the limited

F-45

partnerships are determined by the investment managers. In determining fair value, the investment managers of the
limited partnerships utilize the estimated net asset valuations of the underlying investment entities. The
underlying investment entities value securities and other financial instruments on a mark-to-market or estimated fair
value basis. The estimated fair value is determined by the investment managers based upon, among other things, the
type of investments, purchase price, marketability, current financial condition, operating results, and other
information. The estimated fair values of substantially all of the investments of the underlying investment entities,
which may include securities for which prices are not readily available, are determined by the investment managers or
management of the respective underlying investment entities and may not reflect amounts that could be realized upon
immediate sale. Accordingly, the estimated fair values may differ significantly from the values that would have been
used had a ready market existed for these investments.

The following table sets forth by level, within the fair value hierarchy, the assets of the plans at fair value:

(In thousands)

Cash and money market funds
Common stock (1)
Mutual funds (2)
Limited partnerships

Fair Value Measurements at December 27, 2014
Level 1 Level 2 Level 3 Total

84,377 $
26,105
11,397
—

— $
—
63,067
—

— $
—
—
5,070

84,377
26,105
74,464
5,070

Total

$ 121,879 $

63,067 $

5,070 $ 190,016

(In thousands)

Cash and money market funds
Common stock (3)
Mutual funds (4)
Limited partnerships

Fair Value Measurements at December 28, 2013
Level 1 Level 2 Level 3 Total

13,992 $
79,497
27,166
—

— $
—
63,435
—

— $
—
—
4,780

13,992
79,497
90,601
4,780

Total

$ 120,655 $

63,435 $

4,780 $ 188,870

(1) Approximately 51 percent of common stock represents investments in U.S. companies primarily in the
health care, utilities, financials, consumer staples, industrials, and information technology
sectors. All investments in common stock are listed on U.S. stock exchanges.

(2) Approximately 40 percent of mutual funds are actively managed funds and approximately 60 percent of
mutual funds are index funds. Additionally, 23 percent of the mutual funds’ assets are invested in U.S.
equities, 67 percent in non-U.S. equities, and 10 percent in non-U.S. fixed income securities.

(3) Approximately 84 percent of common stock represents investments in U.S. companies primarily in the
health care, utilities, financials, consumer staples, industrials, and information technology
sectors. All investments in common stock are listed on U.S. stock exchanges.

(4) Approximately 32 percent of mutual funds are actively managed funds and approximately 68 percent of
mutual funds are index funds. Additionally, 33 percent of the mutual funds’ assets are invested in U.S.
equities, 58 percent in non-U.S. equities, and 9 percent in non-U.S. fixed income securities.

The table below reflects the changes in the assets of the plan measured at fair value on a recurring basis using
significant unobservable inputs (Level 3 hierarchy as defined by ASC 820, Fair Value Measurements and Disclosures
(ASC 820)) during the year ended December 27, 2014:

F-46

(In thousands)

Balance, December 28, 2013
Redemptions
Subscriptions
Net appreciation in fair value

Balance, December 27, 2014

Contributions and Benefit Payments

Limited
Partnerships

4,780
(401)
401
290

5,070

The Company expects to contribute approximately $1.5 million to its pension plans and $1.3 million to its other
postretirement benefit plans in 2015. The Company expects future benefits to be paid from the plans as follows:

(In thousands)

2015
2016
2017
2018
2019
2020-2024

Total

Multiemployer Plan

Pension
Benefits

Other
Benefits

11,303 $
11,492
11,671
11,878
12,116
64,358

1,251
1,137
1,133
1,203
1,171
6,488

$ 122,818 $

12,383

The Company contributes to the IAM National Pension Fund, National Pension Plan (IAM Plan), a multiemployer
defined benefit plan. Participation in the IAM Plan was negotiated under the terms of two collective bargaining
agreements in Port Huron, Michigan, the Local 218 IAM and Local 44 UAW that expire on May 1, 2016 and July 20,
2016, respectively. The Employer Identification Number for this plan is 51-6031295.

The risks of participating in multiemployer plans are different from single-employer plans in the following
aspects: (i) Assets contributed to the multiemployer plan by one employer may be used to provide benefits to
employees of other participating employers; (ii) if a participating employer stops contributing to the plan, the
underfunded obligations of the plan may be borne by the remaining participating employers; (iii) if the Company
chooses to stop participating in the plan, the Company may be required to pay the plan an amount based on the
underfunded status of the plan, referred to as a withdrawal liability.

The Company makes contributions to the IAM Plan trusts that cover certain union employees; contributions by
employees are not permitted. Contributions to the IAM Plan were $1.0 million in 2014, $0.9 million in 2013, and $1.0
million in 2012. The Company’s contributions are less than five percent of total employer contributions made to the
IAM Plan indicated in the most recently filed Form 5500.

Under the Pension Protection Act of 2006, the IAM Plan’s actuary must certify the plan’s zone status annually. Plans
in the red zone are generally less than 65 percent funded, plans in the yellow zone are less than 80 percent funded, and
plans in the green zone are at least 80 percent funded. If a plan is determined to be in endangered status, red zone or
yellow zone, the plan’s trustees must develop a formal plan of corrective action, a Financial Improvement Plan and/or
a Rehabilitation Plan. For 2014 and 2013 the IAM Plan was determined to have green zone status; therefore, no
formal plan of corrective action is either pending or has been implemented.

F-47

401(k) Plans

The Company sponsors voluntary employee savings plans that qualify under Section 401(k) of the Internal Revenue
Code of 1986. Compensation expense for the Company’s matching contribution to the 401(k) plans was $4.1 million
in 2014, $3.2 million in 2013, and $2.9 million in 2012. The Company match is a cash contribution. Participants
direct the investment of their account balances by allocating among a range of asset classes including mutual funds
(equity, fixed income, and balanced funds), and money market funds. The plans do not allow direct investment in
securities issued by the Company.

UMWA Benefit Plans

In October 1992, the Coal Industry Retiree Health Benefit Act of 1992 (the Act) was enacted. The Act mandates a
method of providing for postretirement benefits to the United Mine Workers of America (UMWA) current and retired
employees, including some retirees who were never employed by the Company. In October 1993, beneficiaries were
assigned to the Company and the Company began its mandated contributions to the UMWA Combined Benefit Fund,
a multiemployer trust. Beginning in 1994, the Company was required to make contributions for assigned beneficiaries
under an additional multiemployer trust created by the Act, the UMWA 1992 Benefit Plan. The ultimate amount of
the Company’s liability under the Act will vary due to factors which include, among other things, the validity,
interpretation, and regulation of the Act, its joint and several obligation, the number of valid beneficiaries assigned,
and the extent to which funding for this obligation will be satisfied by transfers of excess assets from the 1950 UMWA
pension plan and transfers from the Abandoned Mine Reclamation Fund. Contributions to the plan were $249
thousand, $290 thousand, and $315 thousand for the years ended December 27, 2014, December 28, 2013, and
December 29, 2012, respectively.

Note 14 – Derivative Instruments and Hedging Activities

The Company’s 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.

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 December 27, 2014, the Company held open futures contracts to purchase approximately $23.7 million of copper
over the next 12 months related to fixed price sales orders. The fair value of those futures contracts was an $809
thousand loss position, which was determined by obtaining quoted market prices (Level 1 hierarchy as defined by
ASC 820). In the next twelve months, the Company will reclassify into earnings realized gains or losses relating to
cash flow hedges. At December 27, 2014, this amount was approximately $538 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 December 27, 2014, the Company held open futures contracts to sell approximately $1.6 million of copper over the
next three months related to copper inventory. The fair value of those futures contracts was an $87 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.

F-48

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 against adverse foreign exchange rate fluctuations.

At December 27, 2014, the Company held open forward contracts to purchase approximately 1.5 million euros over
the next three months. The fair value of these contracts, which was determined by obtaining quoted market prices
(Level 1 hierarchy as defined by ASC 820), was an $81 thousand loss position recorded in other current liabilities at
December 27, 2014, and an $836 thousand gain position recorded in other current assets at December 28, 2013. At
December 27, 2014, there was $157 thousand of deferred gains, net of tax, included in AOCI that is expected to be
reclassified into depreciation expense over the useful life of the heavy machinery and equipment.

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 a $927 thousand loss position recorded in other liabilities
at December 27, 2014, and a $1.3 million gain position recorded in other assets at December 28, 2013. At December
27, 2014, there was $601 thousand of deferred losses, net of tax, included in AOCI that is expected to be reclassified
into interest expense over the term of the hedged item.

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

Asset Derivatives

Liability Derivatives

Fair Value

Balance Sheet
Location

2014

2013

Balance Sheet
Location

2014

2013

(In thousands)
Hedging
instrument:
Commodity

contracts -
gains
Commodity

contracts -
losses

Foreign currency
contracts

Other current
assets

Other current
assets
Other current
assets

99 $

Other current
liabilities

448

15 $

340

(4)

—
—

Other current
liabilities
Other current
liabilities

(10)

836

1,324 Other liabilities

(832)

(2,107)

(81)
(927)

—
—

Interest rate swap Other assets

Total derivatives (1)

95 $

2,598

(1,825) $

(1,767)

(1) Does not include the impact of cash collateral provided to counterparties.

F-49

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

(In thousands)
Fair value hedges:
Gain on commodity contracts (qualifying)
Loss on hedged item - Inventory

Location

2014

2013

Cost of goods sold $
Cost of goods sold

6,783 $
(5,958)

5,115
(4,827)

Undesignated derivatives:
Gain (loss) on commodity contracts (nonqualifying)

Cost of goods sold $

1,466 $

(611)

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

Year Ended December 27, 2014

(Loss) Gain
Recognized in AOCI
(Effective Portion), Net
of Tax

Classification Gains
(Losses)

Loss (Gain)
Reclassified from AOCI
(Effective Portion), Net
of Tax

(In thousands)
Cash flow hedges:

Commodity contracts
$
Foreign currency contracts
Interest rate swap

(1,088) Cost of goods sold

(275) Depreciation expense

(1,435) Interest expense

267
—
—

Year Ended December 28, 2013

(Loss) Gain
Recognized in AOCI
(Effective Portion), Net
of Tax

Classification Gains
(Losses)

Loss (Gain)
Reclassified from AOCI
(Effective Portion), Net
of Tax

(In thousands)

Cash flow hedges:
Commodity contracts
$
Foreign currency contracts
Interest rate swap

(3,337) Cost of goods sold

401 Depreciation expense
834 Interest expense

3,781
34
—

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 December 27, 2014 was not
material to the 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 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 December 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.

F-50

Note 15 – Industry Segments

The Company’s reportable segments are Plumbing & Refrigeration and OEM. For disclosure purposes, as permitted
under 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. 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, and line sets. SPD also imports and resells brass and
plastic plumbing valves, malleable iron fittings, faucets, and plumbing specialty products. These products are
manufactured in the U.S. Outside the U.S., the Company’s European Operations manufacture copper tube, which is
sold in Europe. 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’s products are sold primarily to plumbing, refrigeration, and air-conditioning wholesalers, hardware
wholesalers and co-ops, and building product retailers.

IPD manufactures brass rod, impact extrusions, and forgings as well as a variety of end products including plumbing
brass, automotive components, valves, and fittings. EPD manufactures and fabricates valves and assemblies for the
refrigeration, air-conditioning, gas appliance, and barbecue grill markets and specialty copper, copper-alloy, and
aluminum
for air-conditioning
applications. These products are sold primarily to OEM customers.

tube. Mueller-Xingrong manufactures engineered copper

tube primarily

Summarized product line, geographic, and segment information is shown in the following tables. Geographic sales
data indicates the location from which products are shipped. Unallocated expenses include general corporate
expenses, plus certain charges or credits not included in segment activity.

During 2014, 2013, and 2012, no single customer exceeded 10 percent of worldwide sales.

Net Sales by Major Product Line:

(In thousands)

2014

2013

2012

Tube and fittings
Brass rod and forgings
OEM components, tube & assemblies
Valves and plumbing specialties
Other

Geographic Information:

(In thousands)

Net sales:

United States
United Kingdom
Other

$1,143,164 $ 972,107 $ 986,825
553,896 583,940
337,772 335,461
239,822 231,278
52,434

556,985
345,991
262,504
55,583

54,944

$2,364,227 $2,158,541 $2,189,938

2014

2013

2012

$1,752,548 $1,676,385 $1,696,589
229,659 234,684
252,497 258,665

326,832
284,847

$2,364,227 $2,158,541 $2,189,938

F-51

(In thousands)

Long-lived assets:
United States
United Kingdom
Other

2014

2013

2012

$ 322,178 $ 325,667 $ 306,023
23,496
27,442

22,159
25,224

43,064
21,641

Net assets of foreign operations at December 27, 2014 included $112.6 million in the United Kingdom, $50.4 million
in Mexico, $45.7 million in Luxembourg, and $23.9 million in China.

$ 386,883 $ 373,050 $ 356,961

Segment Information:

(In thousands)

Net sales

For the Year Ended December 27, 2014

Plumbing &
Refrigeration
Segment

OEM
Segment

Corporate
and

Eliminations Total

1,416,701 $ 959,914 $

(12,388) $2,364,227

Cost of goods sold
Depreciation and amortization
Selling, general, and administrative expense
Gain on sale of assets
Severance

1,215,282 840,823
11,919
21,458
—
—

19,613
87,539
(6,259)
7,296

(12,386) 2,043,719
2,203
33,735
22,743 131,740
(6,259)
7,296

—
—

Operating income

93,230

85,714

(24,948)

153,996

Interest expense
Other expense, net

Income before income taxes

(5,740)
(243)

$ 148,013

F-52

(In thousands)

Net sales

For the Year Ended December 28, 2013

Plumbing &
Refrigeration
Segment

OEM
Segment

Corporate
and

Eliminations Total

1,225,306 $ 947,784 $

(14,549) $2,158,541

Cost of goods sold
Depreciation and amortization
Selling, general, and administrative expense
Insurance settlement
Gain on sale of plastic fittings manufacturing assets
Impairment charges

1,043,059 833,518
13,025
24,479
—
—
131

17,117
85,471
(103,895)
(39,765)
4,173

(14,488) 1,862,089
2,252
32,394
24,964 134,914
(2,437) (106,332)
(39,765)
4,304

—
—

Operating income

219,146

76,631

(24,840) 270,937

Interest expense
Other income, net

Income before income taxes

(In thousands)

Net sales

(3,990)
4,451

$ 271,398

For the Year Ended December 29, 2012

Plumbing &
Refrigeration
Segment

OEM
Segment

Corporate
and

Eliminations Total

1,238,230 $ 974,606 $

(22,898) $2,189,938

Cost of goods sold
Depreciation and amortization
Selling, general, and administrative expense
Litigation settlement
Insurance settlement
Severance

1,060,755 866,404
13,435
27,680
—
—
—

16,513
75,448
—
(1,500)
—

(22,696) 1,904,463
1,547
31,495
26,328 129,456
(4,050)
(4,050)
(1,500)
—
3,369
3,369

Operating income

87,014

67,087

(27,396) 126,705

Interest expense
Other expense, net

Income before income taxes

(6,890)
539

$ 120,354

F-53

(In thousands)

2014

2013

2012

Expenditures for long-lived assets (including business acquisitions):

Plumbing & Refrigeration
OEM
General corporate

Segment assets:

Plumbing & Refrigeration
OEM
General corporate

55,098 $
10,788
400

47,222 $
14,845
3,253

24,030
24,137
17,290

66,286 $

65,320 $

65,457

$ 664,784 $ 625,371 $ 531,429
305,052 290,058
317,344 282,668

313,245
350,067

$1,328,096 $1,247,767 $ 1,104,155

Note 16 – Quarterly Financial Information (Unaudited) (6)

(In thousands, except per share data)

2014
Net sales
Gross profit (1)
Consolidated net income (5)
Net income attributable to Mueller Industries, Inc.
Basic earnings per share
Diluted earnings per share
Dividends per share

2013
Net sales
Gross profit (1)
Consolidated net income
Net income attributable to Mueller Industries, Inc.
Basic earnings per share
Diluted earnings per share
Dividends per share

First
Quarter

Second
Quarter

Third
Quarter

Fourth
Quarter

$ 574,374 $ 649,691 $ 602,820
81,542
24,322
23,823
0.42
0.42
0.075

78,597
24,954
24,706
0.44
0.44
0.075

91,916
35,209
35,045
0.63
0.62
0.075

$ 537,342
68,453
18,049 (2)
17,987
0.32
0.32
0.075

$ 559,690 $ 582,282 $ 528,854
72,552

76,840
26,434
26,202
0.47
0.46
0.0625

81,157
91,842(3) 39,993(4)
91,150
1.64
1.62
0.0625

39,864
0.71
0.71
0.0625

$ 487,715
65,903
15,020
15,384
0.28
0.27
0.0625

(1) Gross profit is net sales less cost of goods sold, which excludes depreciation and amortization.

(2) Includes $4.8 million pre-tax gain on sale of assets and $4.2 million of pre-tax charges related to severance.

(3) Includes $106.3 million pre-tax gain from settlement of insurance claims.

(4) Includes $39.8 million pre-tax gain on sale of manufacturing assets and pre-tax impairment charges of $4.3
million primarily related to real property associated with the aforementioned plastics sale transaction.

(5) Includes income earned by Howell, acquired during Q4 2013, and losses incurred by Yorkshire, acquired

during Q1 2014.

(6) The sum of quarterly amounts may not equal the annual amounts reported due to rounding. In addition, the
earnings per share amounts are computed independently for each quarter while the full year is based on the
weighted average shares outstanding.

F-54

Report of

Independent

Registered Pu

ublic Accounti

ing Firm

The Board

d of Directors a

and Stockholde

ers of Mueller I

.
Industries, Inc.

We have a
and Decem
and cash f
financial s
responsibil
and schedu

audited the acco
mber 28, 2013,
flows for each
statement sche
lity of the Com
ule based on ou

ompanying con
and the related
of the three y
edule listed in
mpany’s manage
ur audits.

nsolidated bala
d consolidated s
years in the pe
the Index at
ement. Our res

ance sheets of M
statements of in
eriod ended D
Item 15(a). T
ponsibility is to

Mueller Indust
ncome, compre
ecember 27, 2
These financial
o express an op

tries, Inc. as of
ehensive incom
2014. Our audi
l statements a
pinion on these

f December 27
me, changes in
its also includ
and schedule a
e financial state

7, 2014
equity
ded the
are the
ements

We condu
(United St
whether th
evidence s
accounting
statement p

cted our audit
tates). Those s
he financial sta
supporting the
g principles use
presentation. W

ts in accordanc
standards requi
atements are fr
amounts and
ed and significa
We believe that

ce with the sta
ire that we pla
free of materia
disclosures in
ant estimates m
t our audits pro

andards of the
an and perform
al misstatement
the financial s
made by manag
ovide a reasona

e Public Comp
m the audit to
t. An audit in
statements. An
gement, as wel
able basis for o

pany Accounti
obtain reasona
cludes examin
n audit also in
l as evaluating
our opinion.

ing Oversight
able assurance
ning, on a test
ncludes assessin
g the overall fin

Board
about
basis,
ng the
nancial

In our opin
financial p
results of i
conformity
schedule, w
respects th

nion, the finan
position of Mu
its operations
y with U.S. gen
when considere
he information

ncial statement
ueller Industrie
and its cash fl
nerally accepte
ed in relation to
set forth therei

ts referred to a
s, Inc. at Dece
lows for each
ed accounting p
o the basic fina
in.

above present
ember 27, 201
of the three ye
principles. Als
ancial statemen

fairly, in all m
4 and Decemb
ears in the per
so, in our opin
nts taken as a w

material respec
ber 28, 2013, a
riod ended De
nion, the related
whole, presents

cts, the consol
and the consol
ecember 27, 20
d financial stat
s fairly in all m

lidated
lidated
014, in
tement
material

We also ha
States), Mu
established
Treadway
thereon.

ave audited, in
ueller Industrie
d in Internal Co
Commission (

accordance wi
es, Inc.’s intern
ontrol – Integra
1992 Framewo

ith the standard
nal control ove
ated Framewor
ork) and our re

ds of the Public
r financial repo
rk issued by th
eport dated Feb

c Company Ac
orting as of De
he Committee o
bruary 24, 2015

ccounting Ove
ecember 27, 20
of Sponsoring
5 expressed an

rsight Board (U
014, based on c
Organizations
n unqualified o

United
criteria
of the
opinion

Memphis,
February 2

Tennessee
24, 2015

F-55

MUELLER INDUSTRIES, INC.
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
Years Ended December 27, 2014, December 28, 2013, and December 29, 2012

Additions

(In thousands)

of year

Balance at Charged to
beginning costs and Other

Balance
at end
expenses additions Deductions of year

2014
Allowance for doubtful accounts

Environmental reserves

2,391 $

(500) $

18 (1) $

1,243 $

666

23,637 $

1,187 $

— $

2,163 $

22,661

Valuation allowance for deferred tax assets $

22,544 $

(5,630) $

2,282 $

2,077 $

17,119

2013
Allowance for doubtful accounts

Environmental reserves

1,644 $

273 $

812 (1) $

338 $

2,391

24,635 $

986 $

— $

1,984 $

23,637

Valuation allowance for deferred tax assets $

30,394 $

332 $

— $

8,182 $

22,544

2012
Allowance for doubtful accounts

Environmental reserves

1,564 $

867 $

109 (1) $

896 $

1,644

22,892 $

3,056 $

— $

1,313 $

24,635

Valuation allowance for deferred tax assets $

29,705 $

(1,224) $

1,913 $

— $

30,394

(1) Other consists primarily of bad debt recoveries as well as the effect of fluctuating foreign currency exchange

rates in all years presented.

F-56

THIS PAGE INTENTIONALLY LEFT BLANK

5-YEAR REVIEW

SUMMARY OF OPERATIONS

Net sales

Operating income

Net income

Diluted earnings per share

Dividends per share

SIGNIFICANT YEAR-END DATA

(Dollars in thousands except per share data)

2014

2013

2012

2011

2010

$ 2,364,227

$ 2,158,541

$ 2,189,938

$ 2,417,797

$ 2,059,797

153,996

101,560

1.79

0.30

270,937

172,600

3.06

0.25

126,705

82,395

1.15

0.2125

139,802

86,321

1.13

0.20

136,147

86,171

1.14

0.20

Cash and cash equivalents

352,134

311,800

198,934

514,162

394,139

Ratio of current assets to current liabilities

4.0 to 1

2.9 to 1

4.8 to 1

4.7 to 1

Book value per share

13.39

12.43

9.02

11.19

10.42

BOARD OF DIRECTORS

EXECUTIVE LEADERSHIP TEAM

Gary S. Gladstein

Chairman of the Board,

Mueller Industries, Inc.

Independent Investor and Consultant

Gregory L. Christopher

Chief Executive Officer,

Mueller Industries, Inc.

Paul J. Flaherty

Advisory Board Member,

AON Risk Services, Inc.

Gennaro J. Fulvio

Member,

Fulvio & Associates, LLP

Scott J. Goldman

CEO and Co-Founder,

TextPower, Inc.

John B. Hansen

Independent Investor and Consultant

Terry Hermanson

President,

Mr. Christmas Incorporated

Harvey L. Karp

Chairman Emeritus,

Mueller Industries, Inc.

Corporate Manufacturing Engineering

Gregory L. Christopher

Chief Executive Officer

Daniel R. Corbin

Vice President,

Jeffrey A. Martin

Chief Financial Officer

and Treasurer

Mark Millerchip

Executive Director,

European Operations

Nicholas W. Moss

President,

Global and Retail Business

Douglas J. Murdock

President,

Fabricated Products

Steffen Sigloch

President,

Extruded Products

Gary C. Wilkerson

Vice President,

General Counsel and Secretary

CAPITAL STOCK INFORMATION

The Company’s Board of Directors declared a regular quarterly dividend on its common stock of 7.5 cents per share
during each quarter of 2014 and 6.25 cents per share during each quarter of 2013. Payment of dividends in the
future is dependent upon the Company’s financial condition, cash flows, capital requirements, earnings, and other factors.

The high, low, and closing prices of Mueller’s common stock on the New York Stock Exchange for each fiscal quarter of
2014 and 2013 were as follows:

2014
Fourth quarter
Third quarter
Second quarter
First quarter

2013
Fourth quarter
Third quarter
Second quarter
First quarter

High

Low

$ 34.39
30.35
30.99
32.13

$ 27.10
27.71
27.47
27.38

$ 31.64
29.08
27.50
27.77

$ 26.98
25.17
24.05
24.48

34.18
28.91
29.30
29.34

31.37
27.91
25.22
26.65

As of February 20, 2015, the number of holders of record of Mueller’s common stock was approximately 855.
On February 20, 2015, the closing price for Mueller’s common stock on the New York Stock Exchange was $34.68.

Annual Meeting
The annual meeting of stockholders will be held at the
Company’s headquarters at Suite 150, 8285 Tournament
Drive, Memphis, TN 38125, 10:00 a.m. local time,
May 7, 2015

Form 10-K
The Company’s Annual Report on Form 10-K is available
on the Company’s website at www.muellerindustries.com
or upon written request:

c/o Mueller Industries, Inc.
Attention: Investor Relations
Suite 150
8285 Tournament Drive
Memphis, TN 38125

Market for Mueller Securities
Common stock is traded on the NYSE–Symbol MLI.

Transfer Agent, Registrar and Paying Agent
To notify the Company of address changes, lost
certificates, dividend payments or account
consolidations, security holders should contact:

American Stock Transfer & Trust Company, LLC
Shareholder Services Department
6201 15th Avenue
Brooklyn, NY 11219

Toll Free: (800) 937-5449
Local & International: (718) 921-8124
Email: info@amstock.com
Web site: www.amstock.com

NYSE Certifications
The Company submitted an unqualified Section 12(a)
CEO Certification to the NYSE in 2014. The Company filed
with the SEC the CEO/CFO Certifications required under
Section 302 of the Sarbanes-Oxley Act as an exhibit to
the Company’s Annual Report on Form 10-K for 2014
and 2013.

Independent Registered Public Accounting Firm
Ernst & Young LLP
Memphis, Tennessee

www.muellerindustries.com

2014

ANNUAL REPORT