Good morning and thank you all for standing by. This is the conference coordinator. All lines will be placed on listen-only until we are ready for the question-and-answer session of today's call. This call is also being recorded. If you have any objection, please disconnect at this time. I would now like to introduce your speaker, Ms. Martie Zakas. You may begin ma’am. Thank you.

Thank you Laurie and good morning everyone. Welcome to Mueller Water Products’ 2013 First Quarter Conference Call. We issued our press release reporting results of operations for the quarter ended December 31, 2012 yesterday afternoon. A copy of it is available on our website, muellerwaterproducts.com. Mueller Water Products had 157.5 million shares outstanding at December 31, 2012. Discussing the first quarter's results this morning are Greg Hyland, our Chairman, President and CEO and Evan Hart, our CFO. This morning's call is being recorded and webcast live on the Internet. We have also posted slides on our website to help illustrate the quarter's results, as well as to address forward-looking statements and our non-GAAP disclosure requirements. At this time, please refer to Slide Two. This slide identifies certain non-GAAP financial measures referenced in our press release, on our slides and on this call, and discloses the reasons why we believe that these measures provide useful information to investors. As required by Regulation G, reconciliations between non-GAAP and GAAP financial measures are included in the supplemental information within our press release and on our website. Slide Three, addresses our forward-looking statements. This slide includes cautionary information identifying important factors that could cause actual results to differ materially from those included in forward-looking statements, as well as specific examples of forward-looking statements. Please review Slides Two and Three in their entirety. During this call, all references to a specific year or quarter refer to our fiscal year, which ends on September 30th. All operating results discussed in these prepared remarks are from continuing operations unless specified otherwise. A replay of this morning's call will be available for 30 days after the call at 1866-470-7045. The archived webcast and the corresponding slides will be available for at least 90 days in the Investor Relations section of our website. In addition, we will furnish a copy of our prepared remarks on Form 8-K later this morning. After the prepared remarks, we will open the call to questions. I'll now turn the call over to Greg.

Thanks, Martie. Thank you for joining us today as we discuss our results for the 2013 first quarter. I will begin my remarks with a brief overview of the quarter followed by Evan’s detailed financial report which covers key drivers affecting our businesses. After that I will follow with additional comments on our recent results and our end markets as well as our outlook for the second quarter. Our consolidated performance improved again in the first quarter as demonstrated by a 13.8% increase in net sales and a 20.6% increase in adjusted operating income. Shipments of Mueller’s valves, hydrants and brass products increased in the quarter year-over-year which we believe was due to continued improvement in both the municipal and residential construction market. Net sales of Mueller Company’s newer technology product and services more than doubled in the quarter on a year-over-year basis, demonstrating the traction we believe these products and services are gaining in the marketplace. In fact, over half of the $23 million net sales increase of Mueller Company was attributable to our metering product. Although Mueller Company’s newer technology products and services negatively impacted its adjusted operating income margins in the quarter, the incremental margin from increased net sales was encouraging and we believe there is room for further improvement especially as deployment of our AMI system grow. Anvil net sales were also up year-over-year. However, as we expected, adjusted operating income was negatively impacted by higher per unit overhead cost due to lower production during the second half of 2012. Overall, results for the quarter were about as we expected and we look forward to our performance improving further over the remainder of the year as our end markets are expected to continue to recover. I will now turn the call over to Evan.

Thanks Greg and good morning everyone. I will first review the consolidated results and then discuss segment performance. Consolidated net sales for the 2013 first quarter of $245.1 million increased $29.7 million or 13.8% from the 2012 first quarter net sales of $215.4 million due to higher shipment volumes, most of which came from the Mueller Company. Consolidated gross profit was $57.1 million for the 2013 first quarter, compared to $52.8 million for the 2012 first quarter. This improvement was driven primarily by higher shipment volumes, higher sale prices and lower raw material costs partially offset by higher per unit overhead costs. Consolidated selling, general and administrative expenses as a percentage of net sales declined to 20.2% in the 2013 first quarter from 21.6% in the 2012 first quarter. Selling, general and administrative expenses were $49.5 million for the 2013 first quarter compared to $46.5 million for the 2012 first quarter. Adjusted operating income for the 2013 first quarter increased 20.6% to $7.6 million from adjusted operating income of $6.3 million for the 2012 first quarter. This increase was driven primarily by higher shipment volumes, higher sales prices and lower raw material cost. These improvements primarily at Mueller Company were partially offset by higher expected per unit overhead cost at Anvil. Adjusted EBITDA for the 2013 first quarter increased to $22.4 million from $21.3 million for the 2012 first quarter. Interest expense net decreased $2.1 million in the 2013 first quarter due to $1.4 million of non-cash cost for terminated swap contracts in 2012 and $700,000 due primarily to lower levels of total debt outstanding in 2013. Subsequent to the end of the first quarter, we announced our intention to redeem an additional 22.5 million of our 8.75% notes. The redemption date is February 22, 2013. The 2013 first quarter…

Thanks Evan. I will now elaborate on our 2013 first quarter performance in end markets and provide an outlook for our second quarter. I will begin with Mueller Company. Mueller Company performed about as we expected this quarter with stronger performance across all products and services with the exception of our Henry Pratt product line. We are pleased with the net sales growth at Mueller Company in the quarter. Shipments of domestic valve, hydrants and brass products in both dollars and units were up. We believe demand for Mueller Company’s products benefited from increased spending by municipal water system and that we saw some growth in demand from new residential construction project. Our domestic unit booking activity in the first quarter from Mueller Company’s valve, hydrant and brass product increased 8%, 10% and 15% respectively year-over-year. We also believe the distributor inventories at the end of the first quarter were flat from both previous quarter and year-over-year. Our metering product continue to make good progress with net sales and bookings more than doubling year-over-year during the quarter. These products are certainly gaining tractions as more than 50% at Mueller Company’s net sales increased in the quarter came from our meter products. During the quarter, year-over-year adjusted operating income margin at Mueller Company expanded by a 180 basis points, driven by the improved performance of our newer technology products as well as the growth of our core valve hydrant and brass products. As we look at the margins for the products manufactured at our hydrant valve and brass product facilities, we note that they expanded about 200 basis points year-over-year. The one product category that declined year-over-year is Henry Pratt valve. Henry Pratt accounts for approximately 15% of Mueller Company’s net sales. This quarter was impacted to a greater extent primarily…

Thank you. (Operator Instructions) Our first question comes from Kevin Maczka. Please state your company name. Kevin Maczka - BB&T Capital Markets: Greg, first question. So, a lot of talk about the housing churn of course, and now that you are clearly seen that and you got the business pretty configured as a two segment business, I think you said in 2012, fiscal ‘12, that was about 5% of your total revenues; so about 15 million. So it starts to double, or even triple and get to the 1.1 million or 1.5 million type of range, and I understand there is a lag there, but should we be thinking about your business, your housing business moving in lock step with that or is there something that would allow that to grow much faster, maybe in the underlying market?

Kevin, good question. As we’ve said, it's difficult for us to exactly know, on the lag and what time period. I think we are very comfortable right now and saying that inventory lots have been absorbed and we think that our estimate now that the lag is now less than 12 months. But that’s a good question, and I think we would have to wait and see. I think that we would be comfortable in saying that when we get through this lag period that we would grow in long steps. I think whether or not we will grow at a faster rate would depend on how quickly developer go in and develop raw land. I think we saw in the past cycle during the boom period that they were very aggressive and going out and developing raw land. I would expect this time around initially they would be more cautious. But as the rebound continues to gain traction, we could see even a little greater pent up demand because than that we could see them perhaps developing raw land at a faster rate. But while we sit here today, we would be more comfortable thinking of in terms that we will probably be in [long] step. Kevin Maczka - BB&T Capital Markets: Got it, and then Greg on the margin side I know we probably shouldn’t get too bogged down in any given quarter on incremental because there can be issues with absorption and things like that than we had in Q1. But can you just refresh us now that again that you are into the recovery you have done a lot of restructuring that’s in the past mostly, I have ongoing lean and productivity initiatives all the time. On the incremental margin side, as we are into the recovery, should we still be thinking about kind of 35% in Mueller and Co. and 25 in Anvil or may be are those better than that as we really get into it?

I would think on average that would be the overall improvement, Kevin that we would expect, it could be adjusted if our valve and hydrant business start growing faster; I think our incremental margin rates could be a little better. But if you look at on this quarter that when you look at the incremental improvement, we saw as we mentioned in our prepared remarks over half of our sales growth came from our newer technology in the Mueller company segments, over half our sales growth came from newer technology product which currently have negative margin. But however when you look at that on a conversion that for instance our Mueller Systems operating income improved about $2.7 million. So it will depend on the mix, but as we made that comment in our prepared remarks in the first quarter, our valve and hydrant and brass product manufacturing facilities operating margins improved 200 basis points over the prior year, and we only utilized 40% about 48% of our capacity at those facilities. Albeit, that’s up from about 42% in the first quarter of year ago. So as we go up the capacity utilization curve later as we go through our seasonal period, where we see some increased demand, we would again think that the conversion rate to be higher then that 35% to 40% range, but from an annual conversion rate, I think we are still comfortable that that’s the range. Kevin Maczka - BB&T Capital Markets: Okay, but in Anvil it sounds like near term may we are still less than that because you still got some of this high cost inventory running through in Q2?

Yeah, I think in Q2 that should be, that will flow through in Q2 and then will be back to what we see in market demand and as we said I think when we look at Q2 for Anvil, we do expect to see a little softer demand from primarily from the oil and gas market, but I want to point out that in 2012 that group, that we saw some very nice year-over-year growth rate in 2012. So what we are seeing is really a slow down of growth from what was a nice spike in 2012, and as we look at it today, we think towards the second half of our fiscal year that we should start seeing some increased spending in the oil and gas market. So I think as we look at it now we think that's more of one quarter issue for Anvil and we expect to see in the third and fourth quarters if the oil and gas market improves as I think the analysts are now are expecting that we should see that pick up in the second half of the year. Kevin Maczka - BB&T Capital Markets: And just finally from me Greg, what would trigger that in the second half, what for your business not oil and gas, but for your oil and gas business what would trigger that that would make second half so much better than first?

Increased production and so certainly we follow what's happening to the rig count and the expectation of the rig count growing which is increased production, our products go on tank farm, different tanks and so that the storage equipment that will typically grow as production grows.

Our next question comes from Ryan Connors [Janney Montgomery Scott]. Please state your company name?

Yes, the comments were really on year-over-year and we would naturally on the seasonality of the business, we would expect to be an increase in the second quarter. We did have on January 23rd a price increase on our valves and the hydrants as we had in most previous years. So what we typically see Ryan is distributors pulling orders forward ahead of that price increase and that's probably the biggest contributor to our uptick sequentially in second quarter versus first quarter, but my comments in the prepared section were on a year-over-year basis.

Okay. And then I just want to talk a little bit kind of structurally about the Mueller Co. business lines and obviously you made a decision to exit type and my perception of that it was in part at least due to conclusion that the industry supply and demand dynamics were not to your liking there. So can you talk at all about, can you talk about being a 48% capacity utilization today on the valve and hydrants side, do you have a feel for where the broader industry is today whether its at or below where you all are and how you feel about the general capacity situation of that industry right now and go kind of dovetailing into the prior question on incremental margin opportunity?

Yes; I would think that they were all probably about the same capacity utilization rate and when I say 48% its important to point out that was in the first quarter and certainly because of this, this is the first quarter is our down season. If you look at last year, we were about on the valves and the hydrant plant we were about 40% capacity utilization and we were pretty close to 60% capacity utilization for the full-year. So as we go through the year, we will expect to see that capacity utilization increase and based on our outlook today, which is consistent with the outlook that we provided in the first quarter, we do expect to see greater demand in 2013, so we would expect on an annual basis to certainly be above that 60% capacity utilization. So I do think that given today the level of demand, there is some excess capacity. That being said, I think we're operating, we would expect in 2013 to be operating at significantly higher capacity rates than we did in 2009 and 2011, but so as we go out that capacity, I think it goes back to Kevin’s earlier question, when we see growth in demand for our product and lots that with residential construction, we think we can clearly see gain to 70% to 75% capacity utilization and again we think as we increase our capacity utilization that we will convert that and see margin grow. When we look again and I mentioned this earlier in our first quarter, at our plants we manufacture our valves, hydrants and brass products on a year-over-year basis we were up 200 basis points in margin. Certainly, what helps that margin improvement was some increased capacity utilization as well as higher pricing and lower raw material cost. But yes, I think that we expect to see our overall capacity utilization to be above the 60% on an annual basis, about 60% rate that we were in 2012 and as that capacity utilization increases, obviously we expect to see that lower per unit overhead cost which will improve our margins.

Okay, Greg and then one other question on the system side. Congratulations there on the success you have been having. It’s pretty impressive. Can you talk about the levers that you are having success in pulling in order to grow that side of the business particularly on the metering side, obviously, that’s a fairly mature market, so, can you just discuss your marketing strategy and how you are managing to make headway against some of the larger incumbent players that obviously have pretty good relationships in installed bases and pretty decent offerings in their own rate?

Yeah and there is no question that I think the leading meter manufacturers in this market are very strong and have very good products and have very good customer relations. What we are seeing our growth is certainly our concept, our AMI technology on the two-way mesh technology. There are certain applications where the two-way mesh technology is a much better selection in some of the alternative choices. I think that certainly helps us even when we are selling AMR, the utilities that we are talking to like our AMI and like that we can offer that them the ability to start with AMR then do eventually convert to our AMI systems, that’s certainly I think number one. Number two, we are finding some municipality utilities that like our composite meter and like the fact that we have metal threads on the composite meter and that is a [patented] design. Number three, that as we talk to some utilities, they like the fact that we are working on try to incorporate lead detection into the AMI system that was one of the drivers several years ago, we are acquiring the lead detection. One, there is the market for lead detection but I think all of this that are in the market today are in the early stages of developing demand for lead detection. But two, what we saw was an opportunity to merge the lead detection technology into our AMI systems and while we are still on the development phase, we have been able to expose some of our ideas to some of our customers and some of the end users and they find that future potential to be very attractive. So I think that, and then I think [Ryan] probably the fourth contributor is that, I think we are solving some, are providing some solutions to end users especially when I am talking about AMI systems by being able to incorporate our existing products into the solution. We talked a several months, 18 months ago. We introduced [putting] the receiver for an AMI system in a hydrant. So these are assets that the end user already owns and then we believe that there is other future functionality by having that receiver in the hydrant but that end user will be able to benefit from. So as I said, I don't to leave, we certainly have the long way to go, but I believe that there are end users who are positively responding to some of the technology we have but also I think that some of the technology that we are working on developing, that can be a incorporated in that meter system in the future even though we are taking a hit on the bottom line with those investments and as we pointed those out in previous calls on product development and so on. So that was a very long winded answer and hopefully I addressed your question.

Our next question comes from Jerry Revich [Goldman Sachs]. Please state your company name.

Greg or Evan you mentioned it looks like raw material to be neutral this year, can you just talk about how much pricing was up in the first quarter in each of the businesses and just give us an update on the typical Mueller Co. price increase which I think generally takes in Jan 1?

Yeah, Jerry we said that we actually look now we think on a full year basis that we think our raw materials will be down slightly for the year and we did have a benefit in both Mueller and Anvil from lower raw material costs year-over-year. We also in both businesses did see positive pricing on a year-over-year basis. So it was as you recall that last year especially on valves and hydrants, we had a price increase in early February. So we are getting on a year-over-year basis the benefit of that price increase that we implemented in February last year. I just mentioned that we had another price increase on the January 23 on valves and hydrants and we won't see any benefit in the second quarter from that price increase or very little if any because of the pull forward that our distributors that just to beat that price increase gave us orders in advance of that price increase. But when we ship those in the second quarter and early third quarter, we think we will start seeing the benefits of this price increase in the third quarter and fourth quarter. So on a year-over-year basis both businesses we continue to see a positive contribution from pricing in addition to slightly lower raw material costs.

And thanks for the color again and extent of the price increases on a weighted average across the portfolio, can you help us get a sense?

Yeah, we had, if you look at the Mueller business, we had about 7%, we had a 7% price increase on about 50% of our volume.

That's perfect. Evan, I am wondering if you…

Yeah, Jerry and I do want to point out and I have discussed it many times in the past that, we typically expect to realize I would say 50% to 60% of that price increase.

Okay, great. And just a clarification Evan on the prior comments on Mueller System profitability or Mueller Co. profitability on the base business, so your total Mueller Co. EBIT was up $2.7 million and I guess if Mueller Co. legacy business had 200 basis points better margins that accounts for all of the $2.7 million profit improvement which I think implies Mueller Systems losses were about equal in the first quarter of this year to the first quarter of last year on more than double the sales level. So I am wondering if you could just calibrate that for us or just clarify the…

Jerry, this is Greg. Let me take that for you. When we talked about the 200 basis points improvement in margin that was on I would say our core valve, hydrant and brass products, the products that come out of those manufacturing facility. We did mentioned that the performance that our Henry Pratt product line roll up under Mueller, negatively impacted results due largely to the mix of products sold this quarter as compared to the first quarter of 2012. Our Butterfly, primarily butterfly valves and plug valves under Henry Pratt brand name, they generally account for about 15% of Mueller Company’s revenue. Our operating income on those products were down about $2.5 million year-over-year; I would say on relatively similar sales. This is the product line where we would expect to realize operating income margins anywhere between 11% and 13% and we just barely broke even this quarter on these group of products. We had a few contributing items to the performance. First, as we mentioned, a weak mix of products. There is a margin difference between our large diameter butterfly valve installed transmission pipeline versus our small diameter butterfly valve which were installed in distribution pipeline. Our mix this quarter was heavily skewed to smaller diameter butterfly valve. So in addition we had a concentration of event that happened to fall in this quarter that also impacted operating income. For instance allow the distributor returns on valve. We replaced some valves that were installed. Several other items, I would say that these are normal business items, but I think unusually concentrated in one quarter. All in all, these events, I would not call these events significant but given there are first quarter of Mueller company can be as weak as seasonally, the impacts are a little more pronounced. So Pratt performance this quarter, I think, matched to the expansion in the rest of the Mueller Company. So we did have an expansion on our valve hydrants and bass product. We did have an expansion of our Mueller Systems. We had a $2.5 million negative hit on a year-over-year basis from our practices, but however when we look at the Pratt, our Pratt products we are still confident that for the full year we will have margins in the 11% to 13% range. So sorry if there was any confusion on those components, the valve and hydrant’s up 200 basis points year-over-year; Mueller Systems for instance 2.7 million up year-over-year. That 2.7 million was essentially offset by the 2.5 million erosion on a year-over-year basis that we saw at our Pratt butterfly valves.

Our next question comes from (inaudible) please state your company name.

Good morning it’s Deutsche Bank. I was just wondering if you guys could comment a little bit on the capital structure I know that you have an ability to take out another 10% of your 8.75% notes at 103 in 2013 and your [7.38] are callable now, but the call price drops in June. Would you guys consider redoing the majority of the cap structure considering how strong the bank debt market is or what are your thoughts with regards that?

Yeah we did just announce redemption for that 10% feature of the $22.5 million of the 8.75% senior notes and that’s effective February 22, and that will give us about another $2 million in annualized interest savings. As well you are correct the we have $65 million restricted payment basket for the subordinated notes which we can repurchase at 103, 168 beginning June 1 of this year, and again I would say that we continue to evaluate other deleveraging opportunities as well as the capital structure and look at various scenarios in terms of refinancing and certainly as we look at that there are many factors that come into play in the analysis and we would certainly communicate that, if we were going to make any changes in the long term capital structure, but certainly we evaluate greats in other factors, in terms of looking at the [trounces] there.

And then with regard to acquisitions, clearly the housing markets seems to be a tailwind for you guys and the rig count, I guess is quite telling, but there is still some opportunities out there. Have you guys looked at any acquisitions, is that something that's core to the business with the free cash flow you’ll generate in ‘13?

I think that, thanks for that question. And certainly it does look like versus where we have been for the last several years our markets could be come a tailwind rather than a headwind. Our focus has been and I think we still continue to be reducing our leverage. We are down, our leverage in the first quarter was 4.3 times probably by a lot of measurements still high, but for those of you who have been following us for a quite sometime, that’s been a significant reduction. If we see a good strategic fit, I think we would evaluate it. Certainly interested in expanding in water infrastructure and particularly interested in emerging technology within the water infrastructures. So residing that made sense to enhance our technology, our market position on Mueller systems, which is our metering business or our leak detection. I think we would look at that. We’ve also long expressed our interest in expanding internationally, but I’d say overall we are still focused on improving our leverage. We think that that should come down pretty nicely in the next 12 to 18 months, but so we would consider acquisitions we believe they are value enhancing but I would not say that we are on the acquisition trail. Our focus still remains bringing down our leverage.

And our last question comes from (inaudible).

Yeah, I guess most of my questions have been asked but on the municipal end market activity you are seeing how much and I know its difficult to given where you are between the distributors. But how much are you seeing on new projects which municipality might be developing via pipelines, instrument plants versus sort of a normal repair, replace and projects for existing infrastructure in place.

Yeah, Bret that is a good question. It’s tough for us. I would say that still a majority of the majority of what we are seeing is still replacing existing, though we are seeing we saw last year actually a little bit of a pick up in our gate valve demand going into new transmission lines and that should this year we should see the demand follow on for appointing new distribution lines off those new transmission lines. So I think that right now that we are seeing probably still a majority of our business repair, I would say replace existing. But I think we are also seeing signs that new projects could be picking up momentum but right now it will be really hard for us to quantify that. Well hearing no more questions that concludes today’s call, and want to thank you all for your continued interest in Mueller Water products and for joining us this morning.

Thank you that does conclude today’s conference call. Thank you all for joining. You may disconnect at this time.