For
the fiscal year ended December 26, 2009
|
Commission
file number 1–6770
|
Delaware
|
25-0790410
|
(State
or other jurisdiction
|
(I.R.S.
Employer
|
of
incorporation or organization)
|
Identification
No.)
|
8285
Tournament Drive, Suite 150
|
|
Memphis,
Tennessee
|
38125
|
(Address
of principal executive offices)
|
(Zip
Code)
|
Title of each class
|
Name of each exchange on which
registered
|
Common
Stock, $0.01 Par Value
|
New
York Stock Exchange
|
Large
accelerated filer S
|
Accelerated
filer £
|
Non-accelerated
filer £
|
Smaller
reporting company £
|
Page
|
|||
Part
I
|
|||
Item
1.
|
3
|
||
Item
1A.
|
9
|
||
Item
1B.
|
11
|
||
Item
2.
|
12
|
||
Item
3.
|
14
|
||
Item
4.
|
17
|
||
Part
II
|
|||
Item
5.
|
18
|
||
Item
6.
|
20
|
||
Item
7.
|
21
|
||
Item
7A.
|
21
|
||
Item
8.
|
21
|
||
Item
9.
|
21
|
||
Item
9A.
|
21
|
||
Item
9B.
|
24
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||
Part
III
|
|||
Item
10.
|
24
|
||
Item
11.
|
24
|
||
Item
12.
|
25
|
||
Item
13.
|
26
|
||
Item
14.
|
26
|
||
Part
IV
|
|||
Item
15.
|
26
|
||
28
|
|||
F-1
|
Location
|
Expiration Date
|
Port
Huron, Michigan (Local 218 I.A.M.)
|
May
1, 2010
|
Port
Huron, Michigan (Local 44 U.A.W.)
|
June
13, 2010
|
Belding,
Michigan
|
August
15, 2012
|
Wynne,
Arkansas
|
June
28, 2010
|
Fulton,
Mississippi
|
August
1, 2012
|
North
Wales, Pennsylvania
|
August
3, 2012
|
Waynesboro,
Tennessee
|
November
7, 2012
|
Jacksboro,
Tennessee
|
September
15, 2010
|
Location
|
Approximate
Property Size
|
Description
|
|||||
Plumbing & Refrigeration
Segment
|
|||||||
Fulton,
MS
|
418,000
sq. ft.
52.37
acres
|
Copper
tube mill. Facility includes casting, extruding, and finishing
equipment to produce copper tubing, including tube feedstock for the
Company’s copper fittings plants and Precision Tube
factory.
|
|||||
Fulton,
MS
|
103,000
sq. ft.
11.9
acres
|
Casting
facility. Facility includes casting equipment to produce copper
billets used in the adjoining copper tube mill.
|
|||||
Wynne,
AR
|
682,000
sq. ft.
39.2
acres
|
(1)
|
Copper
tube mill and plastic fittings plant. Facility includes
casting, extruding, and finishing equipment to produce copper tubing and
copper tube line sets, and produces DWV fittings using injection molding
equipment.
|
||||
Fulton,
MS
|
58,500
sq. ft.
15.53
acres
|
Packaging
and bar coding facility for retail channel sales.
|
|||||
Fulton,
MS
|
70,000
sq. ft.
7.68
acres
|
(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.
10
acres
|
(3)
|
Distribution
center and plastics manufacturing plant. Produces DWV fittings
using injection molding equipment and ABS plastic pipe using pipe
extruders.
|
||||
Fort
Pierce, FL
|
69,875
sq. ft.
5.60
acres
|
Plastic
fittings plant. Produces pressure fittings using injection
molding equipment.
|
|||||
Monterrey,
Mexico
|
120,000
sq. ft.
3.4
acres
|
(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 tubing.
|
|||||
(continued)
|
||||||
Location
|
Approximate
Property Size
|
Description
|
||||
OEM Segment
|
||||||
Port
Huron, MI
|
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.
|
||||
Belding,
MI
|
293,068
sq. ft.
17.64
acres
|
Brass
rod 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
|
81,500
sq. ft.
6.72
acres
|
Aluminum
and copper impacts plant. Produces made-to-order parts using
cold impact processes.
|
||||
Hartsville,
TN
|
78,000
sq. ft.
4.51
acres
|
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.
|
||||
Waynesboro,
TN
|
57,000
sq. ft.
5.0
acres
|
(4)
|
Gas
valve plant. Facility produces brass valves and assemblies for
the gas appliance industry.
|
|||
North
Wales, PA
|
174,000
sq. ft.
18.9
acres
|
Precision
Tube factory. Facility fabricates copper tubing, copper alloy
tubing, aluminum tubing, 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.
|
||||
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.
|
(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.
|
(a)
|
(b)
|
(c)
|
(d)
|
|||||||||||||||
Total Number
of Shares Purchased
|
Average
Price Paid per Share
|
Total
Number of Shares Purchased as Part of Publicly Announced Plans or
Programs
|
Maximum
Number of Shares That May Yet Be Purchased Under the Plans or
Programs
|
|||||||||||||||
7,647,030
|
(1)
|
|||||||||||||||||
September
27 – October 24, 2009
|
-
|
$
|
-
|
|||||||||||||||
October
25 – November 21, 2009
|
8,068
|
(2)
|
26.01
|
|||||||||||||||
November
22 – December 26, 2009
|
9,879
|
(2)
|
24.67
|
|||||||||||||||
(1
|
)
|
Shares
available to be purchased under the Company's 10 million share repurchase
authorization until October 2010. The extension of the
authorization was announced on October 21, 2009.
|
||||||||||||||||
(2
|
)
|
Shares
tendered to the Company by employee stock option holders in payment of
purchase price and/or withholding taxes upon exercise.
|
||||||||||||||||
High
|
Low
|
Close
|
||||||||||
2009
|
||||||||||||
Fourth
quarter
|
$ | 27.75 | $ | 22.55 | $ | 25.49 | ||||||
Third
quarter
|
25.80 | 19.48 | 24.47 | |||||||||
Second
quarter
|
24.84 | 20.01 | 21.52 | |||||||||
First
quarter
|
26.26 | 16.01 | 22.11 | |||||||||
2008
|
||||||||||||
Fourth
quarter
|
$ | 26.28 | $ | 15.69 | $ | 22.81 | ||||||
Third
quarter
|
33.33 | 24.85 | 26.83 | |||||||||
Second
quarter
|
36.73 | 28.49 | 32.29 | |||||||||
First
quarter
|
31.21 | 23.57 | 29.43 |
2004
|
2005
|
2006
|
2007
|
2008
|
2009
|
|
Mueller
Industries, Inc.
|
100
|
86
|
101
|
96
|
75
|
85
|
Dow
Jones U.S. Total Market Index
|
100
|
107
|
123
|
131
|
79
|
107
|
Dow
Jones U.S. Building Materials & Fixtures Index
|
100
|
106
|
122
|
118
|
78
|
93
|
(In
thousands, except per share data)
|
|||||||||||||||||||||||||||||
2009
|
2008
|
2007
|
2006
|
2005
|
|||||||||||||||||||||||||
For
the fiscal year: (1)
|
|||||||||||||||||||||||||||||
Net
sales
|
$
|
1,547,225
|
$
|
2,558,448
|
$
|
2,697,845
|
$
|
2,510,912
|
$
|
1,729,923
|
|||||||||||||||||||
Operating
income
|
32,220
|
(7
|
)
|
126,096
|
(5
|
)
|
191,621
|
(4
|
)
|
218,885
|
(2
|
)
|
131,758
|
||||||||||||||||
|
|||||||||||||||||||||||||||||
Net
income from continuing operations attributable to Mueller Industries,
Inc.
|
4,675
|
80,814
|
(6
|
)
|
115,475
|
148,869
|
(3
|
)
|
89,218
|
||||||||||||||||||||
Diluted
earnings per share from continuing operations
|
0.12
|
2.17
|
3.10
|
4.00
|
2.40
|
||||||||||||||||||||||||
Cash
dividends per share
|
0.40
|
0.40
|
0.40
|
0.40
|
0.40
|
||||||||||||||||||||||||
At
year-end:
|
|||||||||||||||||||||||||||||
Total
assets
|
1,180,141
|
1,182,913
|
1,449,204
|
1,268,907
|
1,116,928
|
||||||||||||||||||||||||
Long-term
debt
|
158,226
|
158,726
|
281,738
|
308,154
|
312,070
|
||||||||||||||||||||||||
(1 | ) |
|
Includes
activity of acquired businesses from the following purchase dates: (i)
Extruded, February 27, 2007, (ii) Mueller-Xingrong, December 2005, and
(iii) Brassware, August 15, 2005.
|
||||||||||||||||||||||||||
(2 | ) |
|
In
2006, the Company recorded a pre-tax charge of $14.2 million to write down
inventories to the lower-of-cost-or-market.
|
||||||||||||||||||||||||||
(3 | ) |
|
Includes
the net-of-tax effect of the inventory write-down described in (2) above,
plus a $7.7 million benefit for change in estimate regarding the future
utilization of various tax incentives in 2006.
|
||||||||||||||||||||||||||
(4 | ) |
|
Includes
$10.0 million pre-tax gain from liquidation of LIFO layers plus a gain
from a copper litigation settlement of $8.9 million, less a goodwill
impairment charge of $2.8 million.
|
||||||||||||||||||||||||||
(5 | ) |
|
Includes
$14.9 million pre-tax gain from liquidation of LIFO layers less a pre-tax
charge of $4.9 million to write down inventories to the
lower-of-cost-or-market and a goodwill impairment charge of $18.0
million.
|
||||||||||||||||||||||||||
(6 | ) |
|
Includes
the net-of-tax effect of all of the items described in (5) above, plus a
provision of $15.4 million ($9.6 million after tax) related to
environmental settlements and obligations and a gain of $21.6 million
related to the early extinguishment of debt.
|
||||||||||||||||||||||||||
(7 | ) |
|
Includes
impairment charges of $29.8 million, primarily related to
goodwill.
|
/S/ Ernst & Young LLP |
Memphis,
Tennessee
|
|
February
23, 2010
|
(a)
|
(b)
|
(c)
|
||||||||||
Plan
category
|
Number
of securities to be issued upon exercise of outstanding options, warrants,
and rights
|
Weighted
average exercise price of outstanding options, warrants, and
rights
|
Number
of securities remaining available for future issuance under equity
compensation plans (excluding securities reflected in column
(a))
|
|||||||||
Equity
compensation plans approved by security holders
|
1,604 | $ | 27.56 | 992 | ||||||||
Equity
compensation plans not approved by security holders
|
— | — | — | |||||||||
Total
|
1,604 | $ | 27.56 | 992 | ||||||||
(a)
|
The
following documents are filed as part of this report:
|
|
1.
|
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.
|
|
2.
|
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.
|
|
3.
|
Exhibits:
|
|
3.1
|
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).
|
|
3.2
|
Amended
and Restated By-laws of the Registrant, adopted and effective as of July
30, 2009 (Incorporated herein by reference to Exhibit 3.1 of the
Registrant’s Current Report on Form 8 - K, dated July 30,
2009).
|
|
4.1
|
Indenture,
dated as of October 26, 2004, by and between Mueller Industries, Inc, and
SunTrust Bank, as trustee (Incorporated herein by reference to Exhibit 4.1
of the Registrant’s Current Report on Form 8-K, dated October 26,
2004).
|
|
4.2
|
Form
of 6% Subordinated Debenture due 2014 (Incorporated herein by reference to
Exhibit 4.2 of the Registrant’s Current Report on Form 8-K, dated October
26, 2004).
|
|
4.3
|
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.
|
|
10.1
|
Amended
and Restated Employment Agreement, effective as of September 17, 1997, by
and between the Registrant and Harvey L. Karp (Incorporated herein by
reference to Exhibit 10.8 of the Registrant’s Annual Report on Form 10-K,
dated March 24, 2003, for the fiscal year ended December 28,
2002).
|
|
10.2
|
Amendment,
dated June 21, 2004, to the Amended and Restated Employment Agreement
dated as of September 17, 1997, by and between the Registrant and Harvey
Karp (Incorporated herein by reference to Exhibit 10.3 of the Registrant’s
Quarterly Report on Form 10-Q, dated July 16, 2004, for the quarter ended
June 26, 2004).
|
|
10.3
|
Second
Amendment, dated February 17, 2005, to the Amended and Restated Employment
Agreement, dated as of September 17, 1997, 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 May 5,
2005).
|
|
10.4
|
Third
Amendment, dated October 25, 2007, to the Amended and Restated Employment
Agreement, dated as of September 17, 1997, by and between the Registrant
and Harvey Karp (Incorporated herein by reference to Exhibit 10.1 of the
Registrant’s Current Report on Form 8-K, dated October 25,
2007).
|
|
10.5
|
Fourth
Amendment, dated December 2, 2008, to the Amended and Restated Employment
Agreement, dated as of September 17, 1997, by and between the Registrant
and Harvey Karp (Incorporated herein by reference to Exhibit 10.5 of the
Registrant's Annual Report on Form 10-K, dated February 24, 2009, for the
fiscal year ended December 27, 2008).
|
|
10.6
|
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).
|
|
10.7
|
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).
|
|
10.8
|
Employment
Agreement, effective October 17, 2002, by and between the Registrant and
Kent A. McKee (Incorporated herein by reference to Exhibit 10.18 of the
Registrant’s Annual Report on Form 10-K, dated March 24, 2003, for the
fiscal year ended December 28, 2002).
|
|
10.9
|
Amendment
No. 1, dated December 10, 2008, to the Employment Agreement, effective
October 17, 2002, by and between the Registrant and Kent A. McKee
(Incorporated herein by reference to Exhibit 10.16 of the Registrant's
Annual Report on Form 10-K, dated February 24, 2009, for the fiscal year
ended December 27, 2008).
|
|
10.10
|
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).
|
|
10.11
|
Mueller
Industries, Inc. 1991 Incentive Stock Option Plan, as amended
(Incorporated herein by reference to Exhibit 10.6 of the Registrant’s
Annual Report on Form 10-K, dated March 24, 2003, for the fiscal year
ended December 28, 2002 and Exhibit 99.2 of the Registrant’s Current
Report on Form 8-K, dated August 31, 2004).
|
|
10.12
|
Mueller
Industries, Inc. 1994 Stock Option Plan, as amended (Incorporated herein
by reference to Exhibit 10.11 of the Registrant’s Annual Report on Form
10-K, dated March 24, 2003, for the fiscal year ended December 28, 2002
and Exhibit 99.3 of the Registrant’s Current Report on Form 8-K, dated
August 31, 2004).
|
|
10.13
|
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).
|
|
10.14
|
Mueller
Industries, Inc. 1998 Stock Option Plan, as amended (Incorporated herein
by reference to Exhibit 10.14 of the Registrant’s Annual Report on Form
10-K, dated March 24, 2003, for the fiscal year ended December 28, 2002
and Exhibit 99.4 of the Registrant’s Current Report on Form 8-K, dated
August 31, 2004).
|
|
10.15
|
Mueller
Industries, Inc. 2002 Stock Option Plan Amended and Restated as of
February 16, 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).
|
|
10.16
|
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).
|
|
10.17
|
Mueller
Industries, Inc. Annual Bonus Plan (Incorporated herein by reference to
Exhibit 10.1 of the Registrant’s Current Report on Form 8-K, dated May 5,
2005).
|
|
10.18
|
Summary
description of the Registrant’s 2010 incentive plan for certain key
employees.
|
|
10.19
|
Credit
Agreement, dated as of December 1, 2006, among the Registrant (as
Borrower) and Lasalle Bank Midwest National Association (as agent), and
certain lenders named therein (Incorporated herein by reference to Exhibit
10.1 of the Registrant’s Current Report on Form 8-K, dated December 1,
2006).
|
|
10.20
|
Equity
Joint Venture Agreement, among Mueller Streamline China, LLC, Mueller
Streamline Holding, S.L., Jiangsu Xingrong Hi-Tech Co., Ltd. and Jiangsu
Baiyang Industries Ltd. (Incorporated herein by reference to Exhibit 10.1
of the Registrant’s Current Report on Form 8-K, dated December 5,
2005).
|
|
21.0
|
Subsidiaries
of the Registrant.
|
|
23.0
|
Consent
of Independent Registered Public Accounting Firm.
|
|
31.1
|
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.
|
|
31.2
|
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
|
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.
|
|
32.2
|
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.
|
/S/
Harvey L.
Karp
|
||
Harvey
L. Karp, Chairman of the Board
|
Signature
|
Title
|
Date
|
/S/ Harvey L
Karp
|
Chairman
of the Board, and Director
|
February 23,
2010
|
Harvey
L. Karp
|
||
/S/Alexander P.
Federbush
|
Director
|
February 23,
2010
|
Alexander
P. Federbush
|
||
/S/
Paul
J. Flaherty
|
Director
|
February
23, 2010
|
Paul
J. Flaherty
|
||
/S/ Gennaro J.
Fulvio
|
Director
|
February
23, 2010
|
Gennaro
J. Fulvio
|
||
/S/ Gary S.
Gladstein
|
Director
|
February
23, 2010
|
Gary
S. Gladstein
|
||
/S/ Scott J.
Goldman
|
Director
|
February
23, 2010
|
Scott
J. Goldman
|
||
/S/ Terry
Hermanson
|
Director
|
February
23, 2010
|
Terry
Hermanson
|
Signature and Title
|
Date
|
|
/S/ Gregory L. Christopher
|
February
23, 2010
|
|
Gregory
L. Christopher
|
||
Chief
Executive Officer
|
||
(Principal
Executive Officer)
|
||
/S/ Kent A.
McKee
|
February
23, 2010
|
|
Kent
A. McKee
|
||
Executive
Vice President and Chief Financial Officer
|
||
(Principal
Financial and Accounting Officer)
|
||
/S/ Richard W.
Corman
|
February
23, 2010
|
|
Richard
W. Corman
|
||
Vice
President – Controller
|
F-
2
|
|
F-
12
|
|
F-
13
|
|
F-
14
|
|
F-
15
|
|
F-
17
|
|
F-
47
|
|
Schedule
for the years ended December 26, 2009, December 27, 2008, and December 29,
2007
|
|
F-
48
|
|
Payments
Due by Year
|
|||||||||||||||||||||
(In
millions)
|
Total
|
2010
|
2011-2012
|
2013-2014
|
Thereafter
|
||||||||||||||||
Debt
|
$
|
182.6
|
$
|
24.3
|
$
|
1.8
|
$
|
150.2
|
$
|
6.3
|
|||||||||||
Interest
on fixed rate debt
|
44.5
|
8.9
|
17.8
|
17.8
|
—
|
||||||||||||||||
Consulting
Agreement (1)
|
6.7
|
1.3
|
2.7
|
2.0
|
0.7
|
||||||||||||||||
Operating
leases
|
31.6
|
6.3
|
9.6
|
5.9
|
9.8
|
||||||||||||||||
Purchase
commitments (2)
|
130.0
|
130.0
|
—
|
—
|
—
|
||||||||||||||||
Total
contractual cash obligations
|
$
|
395.4
|
$
|
170.8
|
$
|
31.9
|
$
|
175.9
|
$
|
16.8
|
|||||||||||
(1)
|
See
Note 10 to Consolidated Financial Statements. For the purposes
of this disclosure, the Company assumed the Consulting Agreement is
effective immediately.
|
||||||||||||||||||||
(2)
|
Purchase
commitments included $7.4 million of open fixed price purchases of raw
materials. Additionally, the Company has contractual supply
commitments for raw materials totaling $116.2 million at year end prices;
these contracts contain variable pricing based on Comex and the London
Metals Exchange (LME). These commitments are for purchases of
raw materials that are expected to be consumed in the ordinary course of
business.
|
||||||||||||||||||||
(In
thousands, except per share data)
|
2009
|
2008
|
2007
|
|||||||||
Net
sales
|
$
|
1,547,225
|
$
|
2,558,448
|
$
|
2,697,845
|
||||||
Cost
of goods sold
|
1,327,022
|
2,233,123
|
2,324,924
|
|||||||||
Depreciation
and amortization
|
41,568
|
44,345
|
44,153
|
|||||||||
Selling,
general, and administrative expense
|
116,660
|
136,884
|
143,284
|
|||||||||
Copper
litigation settlement
|
—
|
—
|
(8,893
|
)
|
||||||||
Impairment
charges
|
29,755
|
18,000
|
2,756
|
|||||||||
Operating
income
|
32,220
|
126,096
|
191,621
|
|||||||||
Interest
expense
|
(9,963
|
)
|
(19,050
|
)
|
(22,071
|
)
|
||||||
Other
income, net
|
872
|
13,896
|
14,313
|
|||||||||
Income
before income taxes
|
23,129
|
120,942
|
183,863
|
|||||||||
Income
tax expense
|
(17,792
|
)
|
(38,332
|
)
|
(67,806
|
)
|
||||||
Consolidated
net income
|
5,337
|
82,610
|
116,057
|
|||||||||
Less
net income attributable to noncontrolling interest
|
(662
|
)
|
(1,796
|
)
|
(582
|
)
|
||||||
Net
income attributable to Mueller Industries, Inc.
|
$
|
4,675
|
$
|
80,814
|
$
|
115,475
|
||||||
Weighted
average shares for basic earnings per share
|
37,336
|
37,123
|
37,060
|
|||||||||
Effect
of dilutive stock-based awards
|
88
|
186
|
163
|
|||||||||
Adjusted
weighted average shares for diluted earnings per share
|
37,424
|
37,309
|
37,223
|
|||||||||
Basic
earnings per share
|
$
|
0.13
|
$
|
2.18
|
$
|
3.12
|
||||||
Diluted
earnings per share
|
$
|
0.12
|
$
|
2.17
|
$
|
3.10
|
||||||
Dividends
per share
|
$
|
0.40
|
$
|
0.40
|
$
|
0.40
|
||||||
See
accompanying notes to consolidated financial statements.
|
(In
thousands, except share data)
|
2009
|
2008
|
||||||
Assets
|
||||||||
Current
assets:
|
||||||||
Cash
and cash equivalents
|
$
|
346,001
|
$
|
278,860
|
||||
Accounts receivable, less allowance for doubtful accounts of $5,947 in
2009 and $6,690 in 2008
|
228,739
|
219,035
|
||||||
Inventories
|
191,262
|
210,609
|
||||||
Current
deferred income taxes
|
18,491
|
17,212
|
||||||
Other
current assets
|
24,350
|
29,110
|
||||||
Total
current assets
|
808,843
|
754,826
|
||||||
Property,
plant, and equipment, net
|
250,395
|
276,927
|
||||||
Goodwill
|
102,250
|
129,186
|
||||||
Other
assets
|
18,653
|
21,974
|
||||||
Total
Assets
|
$
|
1,180,141
|
$
|
1,182,913
|
||||
Liabilities
|
||||||||
Current
liabilities:
|
||||||||
Current
portion of debt
|
$
|
24,325
|
$
|
24,184
|
||||
Accounts
payable
|
73,837
|
63,732
|
||||||
Accrued
wages and other employee costs
|
24,829
|
35,079
|
||||||
Other
current liabilities
|
60,379
|
78,589
|
||||||
Total
current liabilities
|
183,370
|
201,584
|
||||||
Long-term
debt, less current portion
|
158,226
|
158,726
|
||||||
Pension
liabilities
|
20,715
|
13,903
|
||||||
Postretirement
benefits other than pensions
|
23,605
|
24,549
|
||||||
Environmental
reserves
|
23,268
|
23,248
|
||||||
Deferred
income taxes
|
31,128
|
33,940
|
||||||
Other
noncurrent liabilities
|
887
|
1,698
|
||||||
Total
liabilities
|
441,199
|
457,648
|
||||||
Equity
|
||||||||
Mueller
Industries, Inc. stockholders' equity:
|
||||||||
Preferred
stock - $1.00 par value; shares authorized 5,000,000; none
outstanding
|
—
|
—
|
||||||
Common stock - $.01 par value; shares authorized 100,000,000; issued
40,091,502; outstanding 37,649,584 in 2009 and 37,143,163 in
2008
|
401
|
401
|
||||||
Additional
paid-in capital
|
262,166
|
262,378
|
||||||
Retained
earnings
|
540,218
|
550,501
|
||||||
Accumulated
other comprehensive loss
|
(36,104
|
)
|
(48,113
|
)
|
||||
Treasury
common stock, at cost
|
(53,514
|
)
|
(64,484
|
)
|
||||
Total
Mueller Industries, Inc. stockholders' equity
|
713,167
|
700,683
|
||||||
Noncontrolling
interest
|
25,775
|
24,582
|
||||||
Total
equity
|
738,942
|
725,265
|
||||||
Commitments
and contingencies
|
—
|
—
|
||||||
Total
Liabilities and Equity
|
$
|
1,180,141
|
$
|
1,182,913
|
||||
See
accompanying notes to consolidated financial statements.
|
(In
thousands)
|
2009
|
2008
|
2007
|
|||||||||
Operating
activities:
|
||||||||||||
Net
income attributable to Mueller Industries, Inc.
|
$
|
4,675
|
$
|
80,814
|
$
|
115,475
|
||||||
Reconciliation
of net income attributable to Mueller Industries, Inc. to net cash
provided by operating activities:
|
||||||||||||
Depreciation
|
40,867
|
43,666
|
43,605
|
|||||||||
Amortization
of intangibles
|
701
|
679
|
548
|
|||||||||
Amortization
of Subordinated Debenture costs
|
190
|
539
|
324
|
|||||||||
Stock-based
compensation expense
|
2,633
|
2,915
|
2,737
|
|||||||||
Income
tax benefit from exercise of stock options
|
(203
|
)
|
(92
|
)
|
(73
|
)
|
||||||
Impairment
charges
|
29,755
|
18,000
|
2,756
|
|||||||||
Deferred
income taxes
|
(2,554
|
)
|
(4,465
|
)
|
3,094
|
|||||||
Provision
for doubtful accounts receivable
|
506
|
2,654
|
(177
|
)
|
||||||||
Net
income attributable to noncontrolling interest
|
662
|
1,796
|
582
|
|||||||||
Gain
on early retirement of debt
|
(128
|
)
|
(21,575
|
)
|
—
|
|||||||
Loss
(gain) on disposal of properties
|
683
|
598
|
(2,468
|
)
|
||||||||
Changes
in assets and liabilities, net of business acquired:
|
||||||||||||
Receivables
|
(6,988
|
)
|
89,051
|
(7,937
|
)
|
|||||||
Inventories
|
22,699
|
44,591
|
20,411
|
|||||||||
Other
assets
|
(505
|
)
|
(3,027
|
)
|
(4,120
|
)
|
||||||
Current
liabilities
|
(13,823
|
)
|
(84,584
|
)
|
12,704
|
|||||||
Other
liabilities
|
(1,808
|
)
|
12,741
|
1,809
|
||||||||
Other,
net
|
26
|
1,459
|
(2,063
|
)
|
||||||||
Net
cash provided by operating activities
|
77,388
|
185,760
|
187,207
|
|||||||||
Investing
activities:
|
||||||||||||
Capital
expenditures
|
(13,942
|
)
|
(22,261
|
)
|
(29,870
|
)
|
||||||
Acquisition
of businesses, net of cash received
|
—
|
—
|
(32,243
|
)
|
||||||||
Proceeds
from sales of properties and equity investment
|
611
|
81
|
3,809
|
|||||||||
Net
withdrawals from (deposits into) restricted cash balances
|
7,013
|
(10,945
|
)
|
(4,194
|
)
|
|||||||
Net
cash used in investing activities
|
(6,318
|
)
|
(33,125
|
)
|
(62,498
|
)
|
||||||
Financing
activities:
|
||||||||||||
Repayments
of long-term debt
|
(370
|
)
|
(126,877
|
)
|
(18,765
|
)
|
||||||
Dividends
paid to stockholders of Mueller Industries, Inc.
|
(14,944
|
)
|
(14,847
|
)
|
(14,825
|
)
|
||||||
Dividends
paid to noncontrolling interests
|
(1,449
|
)
|
—
|
(1,363
|
)
|
|||||||
Issuance
(repayment) of debt by joint venture, net
|
131
|
(25,564
|
)
|
16,635
|
||||||||
Acquisition
of treasury stock
|
(870
|
)
|
(32
|
)
|
(54
|
)
|
||||||
Issuance
of shares under incentive stock option plans from treasury
|
9,145
|
1,167
|
1,124
|
|||||||||
Income
tax benefit from exercise of stock options
|
203
|
92
|
73
|
|||||||||
Net
cash used in financing activities
|
(8,154
|
)
|
(166,061
|
)
|
(17,175
|
)
|
||||||
Effect
of exchange rate changes on cash
|
4,225
|
(16,332
|
)
|
613
|
||||||||
Increase
(decrease) in cash and cash equivalents
|
67,141
|
(29,758
|
)
|
108,147
|
||||||||
Cash
and cash equivalents at the beginning of the year
|
278,860
|
308,618
|
200,471
|
|||||||||
Cash
and cash equivalents at the end of the year
|
$
|
346,001
|
$
|
278,860
|
$
|
308,618
|
||||||
For
supplemental disclosures of cash flow information, see Notes 1, 5, 7, and
14.
|
||||||||||||
See
accompanying notes to consolidated financial statements.
|
2009
|
2008
|
2007
|
||||||||||||||||||||||
(In
thousands)
|
Shares
|
Amount
|
Shares
|
Amount
|
Shares
|
Amount
|
||||||||||||||||||
Common
stock:
|
||||||||||||||||||||||||
Balance
at beginning of year
|
40,092
|
$
|
401
|
40,092
|
$
|
401
|
40,092
|
$
|
401
|
|||||||||||||||
Balance
at end of year
|
40,092
|
$
|
401
|
40,092
|
$
|
401
|
40,092
|
$
|
401
|
|||||||||||||||
Additional
paid-in capital:
|
||||||||||||||||||||||||
Balance
at beginning of year
|
$
|
262,378
|
$
|
259,611
|
$
|
256,906
|
||||||||||||||||||
Issuance
of shares under incentive stock option plans
|
(1,295
|
)
|
(240
|
)
|
(105
|
)
|
||||||||||||||||||
Stock-based
compensation expense
|
2,633
|
2,915
|
2,737
|
|||||||||||||||||||||
Income
tax benefit from exercise of stock options
|
203
|
92
|
73
|
|||||||||||||||||||||
Write-off
of excess tax benefits arising from the exercise of stock
options
|
(353
|
)
|
—
|
—
|
||||||||||||||||||||
Issuance
of restricted stock
|
(1,400
|
)
|
—
|
—
|
||||||||||||||||||||
Balance
at end of year
|
$
|
262,166
|
$
|
262,378
|
$
|
259,611
|
||||||||||||||||||
Retained
earnings:
|
||||||||||||||||||||||||
Balance
at beginning of year
|
$
|
550,501
|
$
|
484,534
|
$
|
386,038
|
||||||||||||||||||
Adjustment
to retained earnings due to the adoption of the provisions for uncertain
tax positions codified in ASC 740
|
—
|
—
|
(2,154
|
)
|
||||||||||||||||||||
Net
income attributable to Mueller Industries, Inc.
|
4,675
|
80,814
|
115,475
|
|||||||||||||||||||||
Dividends
paid or payable to stockholders of Mueller Industries,
Inc.
|
(14,958
|
)
|
(14,847
|
)
|
(14,825
|
)
|
||||||||||||||||||
Balance
at end of year
|
$
|
540,218
|
$
|
550,501
|
$
|
484,534
|
||||||||||||||||||
Accumulated
other comprehensive (loss) income:
|
||||||||||||||||||||||||
Foreign
currency translation
|
$
|
13,278
|
$
|
(51,701
|
)
|
$
|
4,606
|
|||||||||||||||||
Net
change with respect to derivative instruments and hedging activities, net
of tax of $(1,794), $1,347, and $(166)
|
4,097
|
(3,819
|
)
|
285
|
||||||||||||||||||||
Net
actuarial (loss) gain on pension and postretirement obligations, net of
tax of $2,138, $14,867 and $(7,116)
|
(5,655
|
)
|
(26,542
|
)
|
14,170
|
|||||||||||||||||||
Other,
net
|
289
|
2,141
|
244
|
|||||||||||||||||||||
Total
other comprehensive income (loss) attributable to Mueller Industries,
Inc.
|
12,009
|
(79,921
|
)
|
19,305
|
||||||||||||||||||||
Balance
at beginning of year
|
(48,113
|
)
|
31,808
|
12,503
|
||||||||||||||||||||
Balance
at end of year
|
$
|
(36,104
|
)
|
$
|
(48,113
|
)
|
$
|
31,808
|
||||||||||||||||
|
2009
|
2008
|
2007
|
||||||||||||||||||||||
(In
thousands)
|
Shares
|
Amount
|
Shares
|
Amount
|
Shares
|
Amount
|
||||||||||||||||||
Treasury
stock:
|
||||||||||||||||||||||||
Balance
at beginning of year
|
2,949
|
$
|
(64,484
|
)
|
3,012
|
$
|
(65,859
|
)
|
3,067
|
$
|
(67,034
|
)
|
||||||||||||
Issuance
of shares under incentive stock option plans
|
(477
|
)
|
10,440
|
(65
|
)
|
1,407
|
(57
|
)
|
1,229
|
|||||||||||||||
Repurchase
of common stock
|
34
|
(870
|
)
|
2
|
(32
|
)
|
2
|
(54
|
)
|
|||||||||||||||
Issuance
of restricted stock
|
(64
|
)
|
1,400
|
—
|
—
|
—
|
—
|
|||||||||||||||||
Balance
at end of year
|
2,442
|
$
|
(53,514
|
)
|
2,949
|
$
|
(64,484
|
)
|
3,012
|
$
|
(65,859
|
)
|
||||||||||||
|
||||||||||||||||||||||||
Noncontrolling
interest:
|
||||||||||||||||||||||||
Balance
at beginning of year
|
$
|
24,582
|
$
|
22,765
|
$
|
22,300
|
||||||||||||||||||
Net
income attributable to noncontrolling interest
|
662
|
1,796
|
582
|
|||||||||||||||||||||
Sale
of noncontrolling interests
|
—
|
—
|
(77
|
)
|
||||||||||||||||||||
Dividends
paid to noncontrolling interests
|
(1,449
|
)
|
—
|
(1,363
|
)
|
|||||||||||||||||||
Net
change with respect to derivative instruments and hedging activities, net
of tax of $(279) and $279
|
1,952
|
(1,952
|
)
|
—
|
||||||||||||||||||||
Foreign
currency translation
|
28
|
1,973
|
1,323
|
|||||||||||||||||||||
Balance
at end of year
|
$
|
25,775
|
$
|
24,582
|
$
|
22,765
|
||||||||||||||||||
Comprehensive
income:
|
||||||||||||||||||||||||
Consolidated
net income
|
$
|
5,337
|
$
|
82,610
|
$
|
116,057
|
||||||||||||||||||
Consolidated
other comprehensive income (loss)
|
13,989
|
(79,900
|
)
|
20,628
|
||||||||||||||||||||
Consolidated
comprehensive income
|
19,326
|
2,710
|
136,685
|
|||||||||||||||||||||
Less:
comprehensive income attributable to noncontrolling
interest
|
(2,642
|
)
|
(1,817
|
)
|
(1,905
|
)
|
||||||||||||||||||
Comprehensive
income attributable to Mueller Industries, Inc.
|
$
|
16,684
|
$
|
893
|
$
|
134,780
|
||||||||||||||||||
See
accompanying notes to consolidated financial statements.
|
(In
thousands)
|
2009
|
2008
|
||||||
Raw
materials and supplies
|
$
|
32,593
|
$
|
57,536
|
||||
Work-in-process
|
37,923
|
39,018
|
||||||
Finished
goods
|
126,184
|
122,756
|
||||||
Valuation
reserves
|
(5,438
|
)
|
(8,701
|
)
|
||||
Inventories
|
$
|
191,262
|
$
|
210,609
|
||||
(In
thousands)
|
2009
|
2008
|
||||||
Land
and land improvements
|
$
|
12,492
|
$
|
12,569
|
||||
Buildings
|
112,677
|
110,541
|
||||||
Machinery
and equipment
|
577,595
|
563,984
|
||||||
Construction
in progress
|
2,643
|
4,678
|
||||||
705,407
|
691,772
|
|||||||
Less
accumulated depreciation
|
(455,012
|
)
|
(414,845
|
)
|
||||
Property,
plant, and equipment, net
|
$
|
250,395
|
$
|
276,927
|
||||
(In
thousands)
|
Plumbing
& Refrigeration Segment
|
OEM
Segment
|
Total
|
|||||||||
Balance
at December 29, 2007:
|
||||||||||||
Goodwill
|
$
|
146,048
|
$
|
9,971
|
$
|
156,019
|
||||||
Accumulated
impairment
|
(2,756
|
)
|
—
|
(2,756
|
)
|
|||||||
143,292
|
9,971
|
153,263
|
||||||||||
Foreign
currency translation adjustment
|
(6,077
|
)
|
—
|
(6,077
|
)
|
|||||||
Impairment
charge
|
(18,000
|
)
|
—
|
(18,000
|
)
|
|||||||
Balance
at December 27, 2008:
|
||||||||||||
Goodwill
|
139,971
|
9,971
|
149,942
|
|||||||||
Accumulated
impairment
|
(20,756
|
)
|
—
|
(20,756
|
)
|
|||||||
119,215
|
9,971
|
129,186
|
||||||||||
Foreign
currency translation adjustment
|
1,713
|
—
|
1,713
|
|||||||||
Impairment
charge
|
(18,678
|
)
|
(9,971
|
)
|
(28,649
|
)
|
||||||
Balance
at December 26, 2009:
|
||||||||||||
Goodwill
|
141,684
|
9,971
|
151,655
|
|||||||||
Accumulated
impairment
|
(39,434
|
)
|
(9,971
|
)
|
(49,405
|
)
|
||||||
$
|
102,250
|
$
|
—
|
$
|
102,250
|
(In
thousands)
|
2009
|
2008
|
||||||
6%
Subordinated Debentures, due 2014
|
$
|
148,176
|
$
|
148,676
|
||||
2001
Series IRB’s with interest at 3.08%, due 2011 through 2021
|
10,000
|
10,000
|
||||||
Mueller-Xingrong
line of credit with interest at 3.96%, due 2010
|
24,325
|
24,184
|
||||||
Other
|
50
|
50
|
||||||
182,551
|
182,910
|
|||||||
Less
current portion of debt
|
(24,325
|
)
|
(24,184
|
)
|
||||
Long-term
debt
|
$
|
158,226
|
$
|
158,726
|
||||
(In
thousands)
|
2009
|
2008
|
||||||
Cumulative
foreign currency translation adjustment
|
$
|
(8,503
|
)
|
$
|
(21,781
|
)
|
||
Unrecognized
prior service cost, net of income tax
|
(214
|
)
|
(408
|
)
|
||||
Unrecognized
actuarial net loss, net of income tax
|
(27,686
|
)
|
(22,101
|
)
|
||||
Unrecognized
derivative gains (losses), net of income tax
|
190
|
(3,907
|
)
|
|||||
Unrealized
gain on marketable securities, net of income tax
|
109
|
84
|
||||||
Accumulated
other comprehensive loss
|
$
|
(36,104
|
)
|
$
|
(48,113
|
)
|
||
(In
thousands)
|
2009
|
2008
|
2007
|
|||||||||
Domestic
|
$
|
36,478
|
$
|
131,472
|
$
|
168,936
|
||||||
Foreign
|
(13,349
|
)
|
(10,530
|
)
|
14,927
|
|||||||
Income
before income taxes
|
$
|
23,129
|
$
|
120,942
|
$
|
183,863
|
||||||
(In
thousands)
|
2009
|
2008
|
2007
|
|||||||||
Current
tax expense (benefit):
|
||||||||||||
Federal
|
$
|
14,834
|
$
|
40,743
|
$
|
62,215
|
||||||
Foreign
|
3,248
|
3,356
|
3,735
|
|||||||||
State
and local
|
2,264
|
(1,302
|
)
|
(1,238
|
)
|
|||||||
Current
tax expense
|
20,346
|
42,797
|
64,712
|
|||||||||
Deferred
tax (benefit) expense:
|
||||||||||||
Federal
|
(4,321
|
)
|
(3,686
|
)
|
2,379
|
|||||||
Foreign
|
3,893
|
(3,204
|
)
|
7,061
|
||||||||
State
and local
|
(2,126
|
)
|
2,425
|
(6,346
|
)
|
|||||||
Deferred
tax (benefit) expense
|
(2,554
|
)
|
(4,465
|
)
|
3,094
|
|||||||
Income
tax expense
|
$
|
17,792
|
$
|
38,332
|
$
|
67,806
|
||||||
(In
thousands)
|
2009
|
2008
|
2007
|
|||||||||
Expected
income tax expense
|
$
|
8,095
|
$
|
41,701
|
$
|
64,148
|
||||||
State
and local income tax, net of federal benefit
|
2,844
|
3,920
|
6,497
|
|||||||||
Effect
of foreign statutory rate different from U.S. and other foreign
adjustments
|
435
|
(1,015
|
)
|
603
|
||||||||
Valuation
allowance changes
|
52
|
(246
|
)
|
(1,920
|
)
|
|||||||
Adjustment
for the correction of prior year tax provision
|
—
|
—
|
2,239
|
|||||||||
U.S.
production activities deduction
|
(700
|
)
|
(2,275
|
)
|
(3,150
|
)
|
||||||
Gain
on early retirement of debt
|
(45
|
)
|
(7,551
|
)
|
—
|
|||||||
Goodwill
impairment
|
8,728
|
6,321
|
966
|
|||||||||
Tax
contingency changes
|
(973
|
)
|
(1,740
|
)
|
(1,449
|
)
|
||||||
Other,
net
|
(644
|
)
|
(783
|
)
|
(128
|
)
|
||||||
Income
tax expense
|
$
|
17,792
|
$
|
38,332
|
$
|
67,806
|
||||||
(In
thousands)
|
2009
|
2008
|
||||||
Beginning
balance
|
$
|
9,546
|
$
|
12,232
|
||||
Increases
related to prior year tax positions
|
4,824
|
1,356
|
||||||
Increases
related to current year tax positions
|
842
|
77
|
||||||
Decreases
related to prior year tax positions
|
(420
|
)
|
(2,677
|
)
|
||||
Decreases
related to settlements with taxing authorities
|
(226
|
)
|
(476
|
)
|
||||
Decreases
due to lapses in the statute of limitations
|
(3,284
|
)
|
(966
|
)
|
||||
Ending
balance
|
$
|
11,282
|
$
|
9,546
|
||||
(In
thousands)
|
2009
|
2008
|
||||||
Deferred
tax assets:
|
||||||||
Accounts
receivable
|
$
|
2,165
|
$
|
2,622
|
||||
Inventories
|
5,283
|
5,290
|
||||||
OPEB
and accrued items
|
14,126
|
14,816
|
||||||
Pension
|
13,753
|
13,438
|
||||||
Other
reserves
|
13,670
|
13,364
|
||||||
Interest
|
—
|
2,272
|
||||||
Federal
and foreign tax attributes
|
9,010
|
11,030
|
||||||
State
tax attributes, net of federal benefit
|
32,864
|
32,956
|
||||||
Other
|
2,105
|
1,902
|
||||||
Total
deferred tax assets
|
92,976
|
97,690
|
||||||
Less
valuation allowance
|
(33,812
|
)
|
(32,624
|
)
|
||||
Deferred
tax assets, net of valuation allowance
|
59,164
|
65,066
|
||||||
Deferred
tax liabilities:
|
||||||||
Property,
plant, and equipment
|
52,139
|
58,617
|
||||||
Foreign
withholding tax
|
606
|
1,652
|
||||||
Pension
|
8,357
|
7,855
|
||||||
Other
|
720
|
1,276
|
||||||
Total
deferred tax liabilities
|
61,822
|
69,400
|
||||||
Net
deferred tax liability
|
$
|
2,658
|
$
|
4,334
|
||||
(In
thousands)
|
Pension
Benefits
|
Other
Benefits
|
||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Change
in benefit obligation:
|
||||||||||||||||
Obligation
at beginning of year
|
$
|
146,505
|
$
|
180,231
|
$
|
21,969
|
$
|
19,438
|
||||||||
Service cost
|
865
|
1,783
|
235
|
310
|
||||||||||||
Interest
cost
|
8,907
|
11,472
|
1,824
|
1,379
|
||||||||||||
Participant
contributions
|
73
|
454
|
—
|
—
|
||||||||||||
Actuarial
loss (gain)
|
15,745
|
(19,254
|
)
|
(1,492
|
)
|
2,314
|
||||||||||
Benefit
payments
|
(12,281
|
)
|
(10,119
|
)
|
(1,152
|
)
|
(1,348
|
)
|
||||||||
Effect
of curtailments and settlements
|
—
|
—
|
(54
|
)
|
103
|
|||||||||||
Foreign
currency translation adjustment
|
4,830
|
(18,062
|
)
|
51
|
(227
|
)
|
||||||||||
Obligation
at end of year
|
164,644
|
146,505
|
21,381
|
21,969
|
||||||||||||
Change
in fair value of plan assets:
|
||||||||||||||||
Fair
value of plan assets at beginning of year
|
135,624
|
199,062
|
—
|
—
|
||||||||||||
Actual
return on plan assets
|
17,634
|
(42,933
|
)
|
—
|
—
|
|||||||||||
Employer contributions
|
3,244
|
2,387
|
1,152
|
1,348
|
||||||||||||
Participant contributions
|
73
|
454
|
—
|
—
|
||||||||||||
Benefit payments
|
(12,281
|
)
|
(10,119
|
)
|
(1,152
|
)
|
(1,348
|
)
|
||||||||
Foreign currency translation adjustment
|
3,409
|
(13,227
|
)
|
—
|
—
|
|||||||||||
Fair
value of plan assets at end of year
|
147,703
|
135,624
|
—
|
—
|
||||||||||||
Underfunded
status at end of year
|
$
|
(16,941
|
)
|
$
|
(10,881
|
)
|
$
|
(21,381
|
)
|
$
|
(21,969
|
)
|
||||
(In
thousands)
|
Pension
Benefits
|
Other
Benefits
|
||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Unrecognized
net actuarial loss
|
$
|
38,565
|
$
|
29,265
|
$
|
2,472
|
$
|
4,117
|
||||||||
Unrecognized
prior service cost
|
298
|
604
|
42
|
44
|
||||||||||||
(In
thousands)
|
Pension
Benefits
|
Other
Benefits
|
||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Long-term
asset
|
$
|
3,772
|
$
|
2,820
|
$
|
—
|
$
|
—
|
||||||||
Current
liability
|
—
|
—
|
(1,423
|
)
|
(1,452
|
)
|
||||||||||
Long-term
liability
|
(20,713
|
)
|
(13,701
|
)
|
(19,958
|
)
|
(20,517
|
)
|
||||||||
Total
underfunded status
|
$
|
(16,941
|
)
|
$
|
(10,881
|
)
|
$
|
(21,381
|
)
|
$
|
(21,969
|
)
|
||||
(In
thousands)
|
2009
|
2008
|
2007
|
|||||||||
Pension
benefits:
|
||||||||||||
Service
cost
|
$
|
865
|
$
|
1,783
|
$
|
2,410
|
||||||
Interest
cost
|
8,907
|
11,472
|
9,775
|
|||||||||
Expected
return on plan assets
|
(10,732
|
)
|
(16,844
|
)
|
(13,672
|
)
|
||||||
Amortization
of prior service cost
|
305
|
332
|
311
|
|||||||||
Amortization
of net loss (gain)
|
833
|
(399
|
)
|
622
|
||||||||
Effect
of curtailment and settlements
|
—
|
—
|
59
|
|||||||||
Net
periodic benefit cost (income)
|
$
|
178
|
$
|
(3,656
|
)
|
$
|
(495
|
)
|
||||
Other
benefits:
|
||||||||||||
Service
cost
|
$
|
235
|
$
|
310
|
$
|
1,897
|
||||||
Interest
cost
|
1,824
|
1,379
|
1,129
|
|||||||||
Amortization
of prior service cost
|
2
|
3
|
2
|
|||||||||
Amortization
of net loss
|
156
|
222
|
175
|
|||||||||
Effect
of curtailments and settlements
|
28
|
100
|
(194
|
)
|
||||||||
Net
periodic benefit cost
|
$
|
2,245
|
$
|
2,014
|
$
|
3,009
|
||||||
Pension
Benefits
|
Other
Benefits
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Discount
rate
|
5.77
|
% |
6.44
|
% |
6.08
|
% |
6.24
|
% | ||||||||
Expected
long-term return on plan assets
|
8.04
|
% |
8.12
|
% |
N/A
|
N/A
|
||||||||||
Rate
of compensation increases
|
N/A
|
2.75
|
% |
5.04
|
% |
5.04
|
% | |||||||||
Rate
of inflation
|
3.75
|
% |
N/A
|
N/A
|
N/A
|
|||||||||||
Pension
Benefits
|
Other
Benefits
|
|||||||||||||||||||||||
2009
|
2008
|
2007
|
2009
|
2008
|
2007
|
|||||||||||||||||||
Discount
rate
|
6.44 | % | 6.18 | % | 5.40 | % | 6.24 | % | 6.21 | % | 5.75 | % | ||||||||||||
Expected
long-term return on plan assets
|
8.12 | % | 8.01 | % | 7.83 | % | N/A | N/A | N/A | |||||||||||||||
Rate
of compensation increases
|
2.75 | % | 4.43 | % | 4.00 | % | 5.04 | % | 5.04 | % | N/A | |||||||||||||
Pension
Plan Assets
|
||||||||
Asset
category
|
2009
|
2008
|
||||||
Equity
securities (includes equity mutual funds)
|
59 | % | 49 | % | ||||
Fixed
income securities (includes fixed income mutual funds)
|
4 | 3 | ||||||
Cash
and equivalents (includes money market funds)
|
27 | 38 | ||||||
Alternative
investments
|
10 | 10 | ||||||
Total
|
100 | % | 100 | % | ||||
(In
thousands)
|
Fair
Value Measurements at December 26, 2009
|
|||||||||||||||
Level
1
|
Level
2
|
Level
3
|
Total
|
|||||||||||||
Cash
and money market funds
|
$
|
39,522
|
$
|
—
|
$
|
—
|
$
|
39,522
|
||||||||
Common
stock (a)
|
50,611
|
—
|
—
|
50,611
|
||||||||||||
Mutual
funds (b)
|
42,998
|
—
|
—
|
42,998
|
||||||||||||
Limited
partnerships
|
—
|
—
|
14,572
|
14,572
|
||||||||||||
Total
|
$
|
133,131
|
$
|
—
|
$
|
14,572
|
$
|
147,703
|
||||||||
(a)
|
Approximately
80 percent of common stock represents investments in U.S. companies
primarily in the health care, utilities, financials, consumer staples,
industrials, information technology, and telecommunications
sectors. All investments in common stock are listed on U.S.
stock exchanges.
|
|
(b)
|
Approximately
41 percent of mutual funds are actively managed
funds. Additionally, 10 percent of the mutual funds' assets
are invested in U.S. equities, 76 percent in non-U.S. equities, and
14 percent in non-U.S. fixed income securities.
|
(In
thousands)
|
||||
Limited
Partnerships
|
||||
Balance,
December 27, 2008
|
$
|
13,873
|
||
Net
appreciation in fair value
|
699
|
|||
Balance,
December 26, 2009
|
$
|
14,572
|
||
(In
thousands)
|
Pension
Benefits
|
Other
Benefits
|
||||||
2010
|
$
|
9,724
|
$
|
1,444
|
||||
2011
|
9,740
|
1,403
|
||||||
2012
|
10,233
|
1,417
|
||||||
2013
|
10,295
|
1,424
|
||||||
2014
|
10,405
|
1,439
|
||||||
2015-2019
|
51,777
|
4,907
|
||||||
Total
|
$
|
102,174
|
$
|
12,034
|
||||
(In
thousands)
|
2009
|
2008
|
2007
|
|||||||||
Interest
income
|
$
|
1,080
|
$
|
7,294
|
$
|
11,281
|
||||||
Gain
on early retirement of debt
|
128
|
21,575
|
—
|
|||||||||
(Loss)
gain on disposal of properties, net
|
(683
|
)
|
(598
|
)
|
2,468
|
|||||||
Environmental
expense, non-operating properties
|
(644
|
)
|
(15,432
|
)
|
(698
|
)
|
||||||
Other
|
991
|
1,057
|
1,262
|
|||||||||
Other
income, net
|
$
|
872
|
$
|
13,896
|
$
|
14,313
|
||||||
2009
|
2008
|
2007
|
||||||||||
Expected
term
|
6.3
years
|
6.2
years
|
6.4
years
|
|||||||||
Expected
price volatility
|
0.334 | 0.266 | 0.241 | |||||||||
Risk-free
interest rate
|
3.3 | % | 3.7 | % | 4.7 | % | ||||||
Dividend
yield
|
1.7 | % | 1.5 | % | 1.1 | % |
(Shares
in thousands)
|
Options
|
Weighted
Average Exercise Price
|
||||||
Outstanding
at December 30, 2006
|
1,712
|
$
|
24.56
|
|||||
Granted
|
364
|
36.77
|
||||||
Exercised
|
(56
|
)
|
19.95
|
|||||
Cancelled
|
(17
|
)
|
31.89
|
|||||
Outstanding
at December 29, 2007
|
2,003
|
26.85
|
||||||
Granted
|
466
|
27.03
|
||||||
Exercised
|
(64
|
)
|
18.12
|
|||||
Cancelled
|
(321
|
)
|
31.60
|
|||||
Outstanding
at December 27, 2008
|
2,084
|
26.43
|
||||||
Granted
|
226
|
23.79
|
||||||
Exercised
|
(477
|
)
|
19.16
|
|||||
Cancelled
|
(80
|
)
|
28.42
|
|||||
Expired
|
(149
|
)
|
32.50
|
|||||
Outstanding
at December 26, 2009
|
1,604
|
27.56
|
December
26, 2009
|
||||||
Location
|
Fair
value
|
|||||
(In
thousands)
|
||||||
Commodity
contracts
|
Other
current assets:
|
Gain
positions
|
$ | 374 |
Gain
(Loss) Recognized in Accumulated OCI (Effective Portion), Net of
Tax
|
||||
For
the Year Ended
|
||||
|
December
26, 2009
|
|||
(In
thousands)
|
||||
Commodity
contracts (1)
|
$
|
4,083
|
||
(1)
Includes $0.9 million attributable to noncontrolling
interest.
|
(Gain)
Loss Reclassified from Accumulated OCI into Income (Effective Portion),
Net of Tax
|
|||||
For
the Year Ended
|
|||||
|
Location
|
December
26, 2009
|
|||
(In
thousands)
|
|||||
Commodity
contracts
|
Cost
of goods sold
|
$
|
1,966
|
||
Derivatives
in Fair Value Hedging Relationships
|
Location
of Gain (Loss) Recognized in income on Derivative
|
Amount
of Gain (Loss) recognized in Income on Derivative
|
|||
2009
|
|||||
(In thousands) | |||||
Commodity
contracts (inventory)
|
Cost
of goods sold
|
$
|
(573
|
)
|
|
Commodity
contracts (firm
commitment)
|
Cost
of goods sold
|
(191
|
)
|
Hedged
Items in Fair Value Hedge Relationship
|
Location
of Gain (Loss) in Income on Related Hedged Item
|
Amount
of Gain (Loss) recognized in Income on Related Hedged
Item
|
|||
2009
|
|||||
(In thousands) | |||||
Inventory
|
Cost
of goods sold
|
$
|
590
|
||
Firm
commitment
|
Cost
of goods sold
|
191
|
(In
thousands)
|
2009
|
2008
|
2007
|
|||||||||
Tube
and fittings
|
$
|
686,102
|
$
|
1,138,590
|
$
|
1,288,968
|
||||||
Brass
rod and forgings
|
418,376
|
788,843
|
733,325
|
|||||||||
OEM
components, tube & assemblies
|
213,905
|
328,868
|
339,227
|
|||||||||
Valves
and plumbing specialties
|
198,333
|
245,110
|
266,649
|
|||||||||
Other
|
30,509
|
57,037
|
69,676
|
|||||||||
$
|
1,547,225
|
$
|
2,558,448
|
$
|
2,697,845
|
|||||||
(In
thousands)
|
2009
|
2008
|
2007
|
|||||||||
Net
sales:
|
||||||||||||
United
States
|
$
|
1,208,757
|
$
|
2,027,339
|
$
|
2,105,801
|
||||||
United
Kingdom
|
173,223
|
272,715
|
336,133
|
|||||||||
Other
|
165,245
|
258,394
|
255,911
|
|||||||||
$
|
1,547,225
|
$
|
2,558,448
|
$
|
2,697,845
|
|||||||
Long-lived
assets:
|
||||||||||||
United
States
|
$
|
309,986
|
$
|
346,192
|
$
|
375,061
|
||||||
United
Kingdom
|
27,312
|
44,794
|
67,705
|
|||||||||
Other
|
34,000
|
37,101
|
66,091
|
|||||||||
$
|
371,298
|
$
|
428,087
|
$
|
508,857
|
|||||||
(In
thousands)
|
For
the Year Ended December 26, 2009
|
|||||||||||||||
Plumbing
& Refrigeration Segment
|
OEM
Segment
|
Corporate
and Eliminations
|
Total
|
|||||||||||||
Net
sales
|
$
|
892,071
|
$
|
664,088
|
$
|
(8,934
|
)
|
$
|
1,547,225
|
|||||||
Cost
of goods sold
|
744,880
|
590,361
|
(8,219
|
)
|
1,327,022
|
|||||||||||
Depreciation
and amortization
|
26,289
|
14,208
|
1,071
|
41,568
|
||||||||||||
Selling,
general, and administrative expense
|
74,397
|
20,501
|
21,762
|
116,660
|
||||||||||||
Impairment
charge
|
19,462
|
10,293
|
—
|
29,755
|
||||||||||||
Operating
income
|
27,043
|
28,725
|
(23,548
|
)
|
32,220
|
|||||||||||
Interest
expense
|
(9,963
|
)
|
||||||||||||||
Other
income, net
|
872
|
|||||||||||||||
Income
before income taxes
|
$
|
23,129
|
||||||||||||||
(In
thousands)
|
For
the Year Ended December 27, 2008
|
|||||||||||||||
Plumbing
& Refrigeration Segment
|
OEM
Segment
|
Corporate
and Eliminations
|
Total
|
|||||||||||||
Net
sales
|
$
|
1,400,682
|
$
|
1,176,892
|
$
|
(19,126
|
)
|
$
|
2,558,448
|
|||||||
Cost
of goods sold
|
1,157,896
|
1,093,504
|
(18,277
|
)
|
2,233,123
|
|||||||||||
Depreciation
and amortization
|
28,751
|
14,489
|
1,105
|
44,345
|
||||||||||||
Selling,
general, and administrative expense
|
89,250
|
23,621
|
24,013
|
136,884
|
||||||||||||
Impairment
charge
|
18,000
|
—
|
—
|
18,000
|
||||||||||||
Operating
income
|
106,785
|
45,278
|
(25,967
|
)
|
126,096
|
|||||||||||
Interest
expense
|
(19,050
|
)
|
||||||||||||||
Other
income, net
|
13,896
|
|||||||||||||||
Income
before income taxes
|
$
|
120,942
|
||||||||||||||
(In
thousands)
|
For
the Year Ended December 29, 2007
|
|||||||||||||||
Plumbing
& Refrigeration Segment
|
OEM
Segment
|
Corporate
and Eliminations
|
Total
|
|||||||||||||
Net
sales
|
$
|
1,572,565
|
$
|
1,144,302
|
$
|
(19,022
|
)
|
$
|
2,697,845
|
|||||||
Cost
of goods sold
|
1,274,989
|
1,069,890
|
(19,955
|
)
|
2,324,924
|
|||||||||||
Depreciation
and amortization
|
29,777
|
13,271
|
1,105
|
44,153
|
||||||||||||
Selling,
general, and administrative expense
|
95,569
|
22,926
|
24,789
|
143,284
|
||||||||||||
Copper
litigation settlement
|
(8,893
|
)
|
—
|
—
|
(8,893
|
)
|
||||||||||
Impairment
charge
|
2,756
|
—
|
—
|
2,756
|
||||||||||||
Operating
income
|
178,367
|
38,215
|
(24,961
|
)
|
191,621
|
|||||||||||
Interest
expense
|
(22,071
|
)
|
||||||||||||||
Other
income, net
|
14,313
|
|||||||||||||||
Income
before income taxes
|
$
|
183,863
|
||||||||||||||
(In
thousands)
|
2009
|
2008
|
2007 |
|
|||||||
Expenditures
for long-lived assets (including business acquisitions):
|
|||||||||||
Plumbing
& Refrigeration
|
$
|
7,876
|
$
|
15,770
|
$
|
22,229
|
|
||||
OEM
|
6,066
|
6,440
|
39,884
|
|
|||||||
$
|
13,942
|
$
|
22,210
|
$
|
62,113
|
|
|||||
Segment
assets:
|
|||||||||||
Plumbing
& Refrigeration
|
$
|
542,834
|
$
|
621,430
|
$
|
771,206
|
|
||||
OEM
|
284,480
|
300,969
|
364,154
|
|
|||||||
General
corporate
|
352,827
|
260,514
|
313,844
|
|
|||||||
$
|
1,180,141
|
$
|
1,182,913
|
$
|
1,449,204
|
|
First
|
Second
|
Third
|
Fourth
|
||||||||||||||
(In thousands, except per share
data)
|
Quarter
|
Quarter
|
Quarter
|
Quarter
|
|||||||||||||
2009
|
|||||||||||||||||
Net
sales
|
$
|
326,558
|
$
|
367,800
|
$
|
419,800
|
$
|
432,977
|
|||||||||
Gross
profit (1)
|
39,175
|
54,447
|
65,851
|
60,730
|
|||||||||||||
Consolidated
net (loss) income
|
(2,510
|
)
|
6,167
|
18,812
|
(17,132
|
)
|
(2)
|
||||||||||
Net
(loss) income attributable to Mueller Industries, Inc.
|
(2,492
|
)
|
6,028
|
18,666
|
(17,527
|
)
|
|||||||||||
Basic
earnings per share
|
(0.07
|
)
|
0.16
|
0.50
|
(0.47
|
)
|
|||||||||||
Diluted
earnings per share
|
(0.07
|
)
|
0.16
|
0.50
|
(0.47
|
)
|
|||||||||||
Dividends
per share
|
0.10
|
0.10
|
0.10
|
0.10
|
|||||||||||||
2008
|
|||||||||||||||||
Net
sales
|
$
|
704,108
|
$
|
753,471
|
$
|
665,496
|
$
|
435,373
|
|||||||||
Gross
profit (1)
|
92,311
|
92,262
|
77,027
|
63,725
|
(3)
|
||||||||||||
Consolidated
net income
|
27,907
|
28,024
|
18,925
|
7,754
|
(4)
|
||||||||||||
Net
income attributable to Mueller Industries, Inc.
|
27,355
|
27,014
|
18,671
|
7,774
|
|||||||||||||
Basic
earnings per share
|
0.74
|
0.73
|
0.50
|
0.21
|
|||||||||||||
Diluted
earnings per share
|
0.73
|
0.72
|
0.50
|
0.21
|
|||||||||||||
Dividends
per share
|
0.10
|
0.10
|
0.10
|
0.10
|
|||||||||||||
(1)
Gross profit is net sales less cost of goods sold, which excludes
depreciation and amortization.
|
|||||||||||||||||
(2)
Fourth quarter of 2009 includes impairment charges, primarily goodwill, of
$27.9 million after tax.
|
|||||||||||||||||
(3)
Fourth quarter of 2008 includes an adjustment to write down inventories to
the lower-of-cost-or-market of $4.9 million, and a gain of $14.9 million
resulting from the liquidation of LIFO layers.
|
|||||||||||||||||
(4)
Fourth quarter of 2008 includes the net-of-tax effect of both of the items
described in (3) above, plus a gain of $19.1 million related to the early
extinguishment of debt, environmental provisions of $15.0 million ($9.4
million after tax pertaining to estimated environmental settlements and
obligations, and a goodwill impairment charge of $18.0
million.
|
/S/ Ernst & Young LLP |
Memphis,
Tennessee
|
|
February
23, 2010
|
(In
thousands)
|
Additions
|
|||||||||||||||||||
Balance
at beginning of year
|
Charged
to costs and expenses
|
Other
additions
|
Deductions
|
Balance
at end of year
|
||||||||||||||||
|
||||||||||||||||||||
2009
|
||||||||||||||||||||
Allowance
for doubtful accounts
|
$
|
6,690
|
$
|
506
|
$
|
85
|
(1
|
)
|
$
|
1,334
|
$
|
5,947
|
||||||||
Environmental
reserves
|
$
|
23,248
|
$
|
1,087
|
$
|
5
|
$
|
1,072
|
|
$
|
23,268
|
|||||||||
Valuation
allowance for deferred tax assets
|
$
|
32,624
|
$
|
52
|
$
|
1,136
|
(2
|
)
|
$
|
—
|
$
|
33,812
|
||||||||
2008
|
||||||||||||||||||||
Allowance
for doubtful accounts
|
$
|
5,015
|
$
|
2,654
|
$
|
14
|
(1
|
)
|
$
|
993
|
$
|
6,690
|
||||||||
Environmental
reserves
|
$
|
8,897
|
$
|
15,432
|
$
|
—
|
|
$
|
1,081
|
|
$
|
23,248
|
||||||||
|
|
|||||||||||||||||||
Valuation
allowance for deferred tax assets
|
$
|
22,980
|
$
|
(246
|
)
|
$
|
12,943
|
(2
|
)
|
$
|
3,053
|
(4
|
)
|
$
|
32,624
|
|||||
2007
|
||||||||||||||||||||
Allowance
for doubtful accounts
|
$
|
6,806
|
$
|
(177
|
)
|
$
|
1,117
|
(1
|
)
|
$
|
2,731
|
$
|
5,015
|
|||||||
|
||||||||||||||||||||
Environmental
reserves
|
$
|
8,907
|
$
|
698
|
$
|
100
|
(3
|
)
|
$
|
808
|
$
|
8,897
|
||||||||
Valuation
allowance for deferred tax assets
|
$
|
24,900
|
$
|
(1,920
|
)
|
$
|
—
|
$
|
—
|
$
|
22,980
|
|||||||||
(1)
Other consists primarily of the opening balance related to the acquisition
of Extruded Metals, Inc. for 2007, and bad debt recoveries as well as the
effect of fluctuating foreign currency exchange rates in all years
presented.
|
||||||||||||||||||||
(2)
Other includes the additions to valuation allowances during 2009 and 2008
in which previously unrecorded gross deferred tax assets and valuation
allowances were recognized.
|
||||||||||||||||||||
(3)
Other includes the opening balance related to the acquisition of Extruded
Metals, Inc. in 2007.
|
||||||||||||||||||||
(4)
Deductions include foreign currency translation adjustments and reductions
to valuation allowances relating to certain tax attributes in which the
carryforward period had expired.
|
||||||||||||||||||||
Exhibits
|
Description
|
|||
10.18
|
Summary
description of the Registrant’s 2010 incentive plan for certain key
employees.
|
|||
21.0
|
Subsidiaries
of the Registrant.
|
|||
23.0
|
Consent
of Independent Registered Public Accounting Firm.
|
|||
31.1
|
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.
|
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31.2
|
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
|
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.
|
|||
32.2
|
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.
|