• Revenue of $2.1 billion, up 50% on a reported basis, and 10% organically
  • Earnings per share of $0.63, up 800%; adjusted earnings per share of $0.99, up 14%
  • Raising full-year revenue guidance to approximately $7.3B, up 32% from 30%, with expected organic revenue growth of 11%, up from 9% to 10%
  • Lifting full-year adjusted EPS guidance to $3.71 to $3.73, from $3.50 to $3.70

Xylem Inc. (NYSE: XYL), a leading global water technology company dedicated to solving the world’s most challenging water issues, today reported third-quarter results. The Company’s total revenue was $2.1 billion, with reported growth of 50 percent and organic growth of 10 percent, surpassing prior guidance, on strong commercial and operational execution and resilient demand. Orders were up 43 percent on a reported basis and up 3 percent organically, while backlog grew 5 percent organically to $5.2 billion, including $1.3 billion from Evoqua. Third-quarter earnings exceeded Xylem’s previous guidance.

“The team capitalized on resilient demand to deliver another quarter of robust growth and continued margin expansion, with each of our segments outperforming expectations,” said Patrick Decker, Xylem president and CEO. “In addition to healthy organic growth, we saw strong operational performance in both our legacy business and in our recent Evoqua acquisition. The combination of these two great enterprises is delivering a robust pipeline of new commercial opportunities, and integration cost synergies are well on track. The team’s performance and continuing underlying demand give us confidence in raising our full-year guidance.”

“We are in a unique position as water challenges continue to intensify – bringing a transformative platform of solutions to customers and communities around the world. I have full confidence in the team to keep building on the foundation we’ve built to deliver the full potential of our strategy, drive further durability in our business model, and continue to create distinctive value for all our stakeholders.”

Net income was $152 million, or $0.63 per share. Net income margin increased 640 basis points to 7.3 percent. These results are driven by lapping a prior-year one-time pension settlement and strong operational performance, partially offset by higher acquisition and integration costs related to the Evoqua transaction, higher purchase accounting intangible amortization, and higher restructuring and realignment costs. Adjusted net income was $240 million, or $0.99 per share, which excludes the impacts of special charges, purchase accounting intangible amortization, and restructuring and realignment costs.

Third-quarter adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) margin was 19.8 percent, reflecting a year-over-year increase of 150 basis points. Excluding Evoqua’s results, adjusted EBITDA margin was 18.9 percent, up 60 basis points over the prior year period. Strong price realization more than offset inflation and, coupled with productivity savings and higher volume, drove the margin expansion, exceeding the impact of strategic investments.

Outlook

Xylem now expects full-year 2023 revenue of approximately $7.3 billion, up approximately 32 percent on a reported basis and up approximately 11 percent on an organic basis. This represents an increase from the Company’s previous full-year guidance of 30 percent on a reported basis and 9 to 10 percent on an organic basis.

Full-year 2023 adjusted EBITDA margin is expected to be approximately 19 percent, lifted from the previous guide of approximately 18 percent. This results in adjusted earnings per share of $3.71 to $3.73, raised from the previous range of $3.50 to $3.70.

Further 2023 planning assumptions are included in Xylem’s third-quarter 2023 earnings materials posted at www.xylem.com/investors. Excluding revenue, Xylem provides guidance only on a non-GAAP basis due to the inherent difficulty in forecasting certain amounts that would be included in GAAP earnings, such as discrete tax items, without unreasonable effort.

Third Quarter Segment Results

Measurement & Control Solutions

Xylem’s Measurement & Control Solutions segment consists of its portfolio of businesses in smart metering, network technologies, advanced infrastructure analytics, and analytic instrumentation.

  • Third-quarter 2023 revenue was $440 million, up 26 percent on a reported basis and 25 percent organically, versus the prior year period. Growth was led by backlog execution in smart metering and test and measurement.
  • Third-quarter reported operating income for the segment was $27 million, compared to a $2 million loss in the same period last year. Adjusted operating income, which excludes $1 million of special charges, $6 million of restructuring and realignment costs, and $16 million of purchase accounting intangible amortization, was $50 million, a 72 percent increase versus the prior year period, which was recast to add back $17 million of non-cash purchase accounting amortization. The segment reported operating margin was 6.1 percent, up 670 basis points versus the prior year period. Adjusted operating margin of 11.4 percent increased 310 basis points over the prior year period. Adjusted EBITDA margin was 15.7 percent, up 190 basis points from the prior year period. Higher volume, strong price realization, and productivity savings exceeded the impact of inflation and strategic investments.

Water Infrastructure

Xylem’s Water Infrastructure segment, now including legacy-Evoqua’s Applied Product Technologies segment, consists of its portfolio of businesses serving clean water delivery, wastewater transport and treatment, and dewatering.

  • Third-quarter 2023 revenue was $803 million, a 40 percent increase on a reported basis and 7 percent organically, compared with the prior year period. This strong growth was driven by price realization and robust utilities and industrial demand, particularly in the U.S., and resilience in Western Europe, partially offset by a decline in Emerging Markets.
  • Third-quarter reported operating income for the segment was $128 million, a 23 percent increase versus the same period last year. Adjusted operating income, which excludes $6 million of special charges, $3 million of restructuring and realignment costs, and $15 million of purchase accounting intangible amortization, was $152 million. This represents a 41 percent increase versus the prior year period, which was recast to add back $1 million of non-cash purchase accounting amortization. Reported operating margin for the segment was 15.9 percent, down 220 basis points versus the prior year period, and adjusted operating margin was 18.9 percent, up 10 basis points versus the prior year period. Adjusted EBITDA margin was 21.2 percent, up 50 basis points versus the prior year. Excluding Evoqua, adjusted EBITDA margin was 21.5 percent, up 80 basis points on the prior year. Favorable price realization net of inflation, productivity initiatives and higher volume more than offset strategic investments.

Applied Water

Xylem’s Applied Water segment consists of its portfolio of businesses in industrial, commercial building, and residential applications.

  • Third-quarter 2023 revenue was $465 million, a 2 percent increase on a reported basis and 1 percent organically, year-over-year. Growth was driven by strong price realization, backlog execution in U.S. building solutions, and resilient industrial demand in developed markets, partially offset by softness in Emerging Markets.
  • Third-quarter reported operating income for the segment was $73 million, a 5 percent decrease versus the same period last year. Adjusted operating income, which excludes $6 million of restructuring and realignment costs, was $79 million, a 1 percent increase versus the same period last year. The segment reported operating margin was 15.7 percent, down 110 basis points versus the prior year period. Adjusted operating margin of 17.0 percent was flat to the prior year period. Adjusted EBITDA margin was 18.3 percent, up 20 basis points from the prior year. Adjusted margin expansion was driven by price realization net of inflation and productivity savings, more than offsetting volume declines and strategic investments.

Integrated Solutions & Services

Xylem’s Integrated Solutions & Services segment consists of its portfolio of businesses providing water treatment systems and solutions, with an extensive service branch network and fleet of mobile assets.

  • Third-quarter 2023 revenue was $368 million.
  • Third-quarter reported operating loss for the segment was $3 million. Adjusted operating income was $49 million, which excludes $9 million of special charges, $8 million of restructuring and realignment costs, and $35 million of purchase accounting intangible amortization. The segment reported operating margin was (0.8) percent. Adjusted operating margin was 13.3 percent. Adjusted EBITDA margin was 22.6 percent, reflecting strong margin performance driven by effective price-cost discipline and volume conversion.

Supplemental information on Xylem’s third-quarter 2023 earnings and reconciliations for certain non-GAAP items is posted at www.xylem.com/investors.

About Xylem

Xylem (XYL) is a leading global water technology company committed to solving the world’s critical water, wastewater, and water-related challenges through technology, innovation, and expertise. Our more than 22,000 diverse employees delivered combined pro forma revenue of $7.3 billion in 2022. We are creating a more sustainable world by enabling our customers to optimize water and resource management and helping communities in more than 150 countries become water-secure. Join us in the effort at www.xylem.com and Let’s Solve Water.

Forward-Looking Statements

This press release contains “forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Generally, the words “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” "contemplate," "predict," “forecast,” “likely,” “believe,” “target,” “will,” “could,” “would,” “should,” "potential," "may" and similar expressions or their negative, may, but are not necessary to, identify forward-looking statements. By their nature, forward-looking statements address uncertain matters and include any statements that: are not historical, such as statements about our strategy, financial plans, outlook, objectives, plans, intentions or goals (including those related to our social, environmental and other sustainability goals); or address possible or future results of operations or financial performance, including statements relating to orders, revenues, operating margins and earnings per share growth.

Although we believe that the expectations reflected in any of our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of our forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and to inherent risks and uncertainties, many of which are beyond our control. Important factors that could cause our actual results, performance and achievements, or industry results to differ materially from estimates or projections contained in or implied by our forward-looking statements include, among others, the following: the impact of overall industry and general economic conditions, including industrial, governmental, and public and private sector spending, inflation, interest rates and related monetary policy by governments in response to inflation, and the strength of the residential and commercial real estate markets, on economic activity and our operations; geopolitical events, including the wars between Russia and Ukraine and between Israel and Hamas, and regulatory, economic and other risks associated with our global sales and operations, including with respect to domestic content requirements applicable to projects with governmental funding; actual or potential epidemics, pandemics or global health crises; availability, shortage or delays in receiving electronic components (in particular, semiconductors), parts and raw materials from our supply chain; manufacturing and operating cost increases due to macroeconomic conditions, including inflation, energy supply, supply chain shortages, logistics challenges, tight labor markets, prevailing price changes, tariffs and other factors; demand for our products, disruption, competition or pricing pressures in the markets we serve; cybersecurity incidents or other disruptions of information technology systems on which we rely or involving our products; disruptions in operations at our facilities or that of third parties upon which we rely; failure to successfully execute large projects, including with respect to meeting performance guarantees and customers’ safety requirements; our ability to retain and attract senior management and other diverse and key talent, as well as competition for overall talent and labor; difficulty predicting our financial results; defects, security, warranty and liability claims, and recalls with respect to products; safe and compliant handling of wastewater and hazardous materials; availability, regulation or interference with radio spectrum used by certain of our products; uncertainty related to restructuring and realignment actions and related costs and savings; our ability to continue strategic investments for growth; our ability to successfully identify, execute and integrate acquisitions; volatility in served markets or impacts on our business and operations due to weather conditions, including the effects of climate change; fluctuations in foreign currency exchange rates; our ability to borrow or refinance our existing indebtedness, and uncertainty around the availability of liquidity sufficient to meet our needs; risk of future impairments to goodwill and other intangible assets; failure to comply with, or changes in, laws or regulations, including those pertaining to anti-corruption, data privacy and security, export and import, our products, competition, and the environment and climate change; changes in our effective tax rates or tax expenses; legal, governmental or regulatory claims, investigations or proceedings and associated contingent liabilities; risks related to the acquisition of Evoqua, including related to our ability to retain and hire key personnel, the realization of expected benefits and synergies, the need to incur additional or unexpected costs, charges or expenses associated with the integration of the combined companies, delays or challenges with the integration, potential adverse reactions or changes to relationships with customers, suppliers, distributors and other business partners, competitive responses to the acquisition, actual or potential litigation and associated costs and expenses, and impacts to our share price and dilution of shareholders’ ownership; and other factors set forth under “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2022 ("2022 Annual Report") and in subsequent filings we make with the Securities and Exchange Commission (“SEC”).

Forward-looking and other statements in this press release regarding our environmental and other sustainability plans and goals are not an indication that these statements are necessarily material to investors or are required to be disclosed in our filings with the SEC. In addition, historical, current, and forward-looking social, environmental and sustainability-related statements may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve, and assumptions that are subject to change in the future. All forward-looking statements made herein are based on information currently available to us as of the date of this press release. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

 

XYLEM INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED INCOME STATEMENTS (Unaudited)

(in millions, except per share data)

 

 

Three Months

 

Nine Months

For the period ended September 30,

2023

 

2022

 

2023

 

2022

Revenue from products

$

1,720

 

$

1,243

 

$

4,535

 

$

3,625

Revenue from services

 

356

 

 

137

 

 

711

 

 

391

Revenue

 

2,076

 

 

1,380

 

 

5,246

 

 

4,016

Cost of revenue from products

 

1,043

 

 

740

 

 

2,730

 

 

2,160

Cost of revenue from services

 

269

 

 

116

 

 

555

 

 

345

Cost of revenue

 

1,312

 

 

856

 

 

3,285

 

 

2,505

Gross profit

 

764

 

 

524

 

 

1,961

 

 

1,511

Selling, general and administrative expenses

 

491

 

 

294

 

 

1,291

 

 

912

Research and development expenses

 

61

 

 

47

 

 

172

 

 

152

Restructuring and asset impairment charges

 

21

 

 

15

 

 

57

 

 

22

Operating income

 

191

 

 

168

 

 

441

 

 

425

Interest expense

 

14

 

 

12

 

 

35

 

 

37

U.K. pension settlement expense

 

 

 

140

 

 

 

 

140

Other non-operating income, net

 

8

 

 

1

 

 

19

 

 

2

Gain from sale of business

 

 

 

 

 

 

 

1

Income before taxes

 

185

 

 

17

 

 

425

 

 

251

Income tax expense

 

33

 

 

5

 

 

82

 

 

45

Net income

$

152

 

$

12

 

$

343

 

$

206

Earnings per share:

 

 

 

 

 

 

 

Basic

$

0.63

 

$

0.07

 

$

1.64

 

$

1.14

Diluted

$

0.63

 

$

0.07

 

$

1.63

 

$

1.14

Weighted average number of shares:

 

 

 

 

 

 

 

Basic

 

240.9

 

 

180.2

 

 

208.9

 

 

180.2

Diluted

 

242.2

 

 

180.9

 

 

210.1

 

 

180.9

 

XYLEM INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

(in millions, except per share amounts)

 

 

September 30, 2023

 

December 31, 2022

 

 

 

 

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

705

 

 

$

944

 

Receivables, less allowances for discounts, returns and credit losses of $55 and $50 in 2023 and 2022, respectively

 

1,653

 

 

 

1,096

 

Inventories

 

1,080

 

 

 

799

 

Prepaid and other current assets

 

213

 

 

 

173

 

Total current assets

 

3,651

 

 

 

3,012

 

Property, plant and equipment, net

 

1,132

 

 

 

630

 

Goodwill

 

7,149

 

 

 

2,719

 

Other intangible assets, net

 

3,039

 

 

 

930

 

Other non-current assets

 

934

 

 

 

661

 

Total assets

$

15,905

 

 

$

7,952

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

943

 

 

$

723

 

Accrued and other current liabilities

 

1,160

 

 

 

867

 

Short-term borrowings and current maturities of long-term debt

 

17

 

 

 

 

Total current liabilities

 

2,120

 

 

 

1,590

 

Long-term debt

 

2,253

 

 

 

1,880

 

Accrued post-retirement benefits

 

281

 

 

 

286

 

Deferred income tax liabilities

 

724

 

 

 

222

 

Other non-current accrued liabilities

 

586

 

 

 

471

 

Total liabilities

 

5,964

 

 

 

4,449

 

 

 

 

 

Stockholders’ equity:

 

 

 

Common stock – par value $0.01 per share:

 

 

 

Authorized 750.0 shares, issued 256.7 shares and 196.0 shares in 2023 and 2022, respectively

 

3

 

 

 

2

 

Capital in excess of par value

 

8,529

 

 

 

2,134

 

Retained earnings

 

2,416

 

 

 

2,292

 

Treasury stock – at cost 15.9 shares and 15.8 shares in 2023 and 2022, respectively

 

(718

)

 

 

(708

)

Accumulated other comprehensive loss

 

(300

)

 

 

(226

)

Total stockholders’ equity

 

9,930

 

 

 

3,494

 

Non-controlling interests

 

11

 

 

 

9

 

Total equity

 

9,941

 

 

 

3,503

 

Total liabilities and stockholders’ equity

$

15,905

 

 

$

7,952

 

 

XYLEM INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in millions)

 

For the nine months ended September 30,

2023

 

2022

Operating Activities

 

 

 

Net income

$

343

 

 

$

206

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

Depreciation

 

132

 

 

 

83

 

Amortization

 

167

 

 

 

93

 

Share-based compensation

 

45

 

 

 

28

 

Restructuring and asset impairment charges

 

57

 

 

 

22

 

U.K. pension settlement expense

 

 

 

 

140

 

Gain from sale of business

 

 

 

 

(1

)

Other, net

 

(20

)

 

 

(9

)

Payments for restructuring

 

(12

)

 

 

(7

)

Changes in assets and liabilities (net of acquisitions):

 

 

 

Changes in receivables

 

(142

)

 

 

(145

)

Changes in inventories

 

(41

)

 

 

(214

)

Changes in accounts payable

 

15

 

 

 

47

 

Changes in accrued and deferred taxes

 

(77

)

 

 

(12

)

Other, net

 

(85

)

 

 

3

 

Net Cash – Operating activities

 

382

 

 

 

234

 

Investing Activities

 

 

 

Capital expenditures

 

(177

)

 

 

(148

)

Acquisitions of businesses, net of cash acquired

 

(476

)

 

 

 

Proceeds from sale of business

 

103

 

 

 

1

 

Proceeds from the sale of property, plant and equipment

 

2

 

 

 

3

 

Cash received from investments

 

1

 

 

 

5

 

Cash paid for investments

 

(1

)

 

 

(9

)

Cash paid for equity investments

 

(58

)

 

 

(2

)

Cash received from interest rate swaps

 

38

 

 

 

 

Cash received from cross-currency swaps

 

25

 

 

 

24

 

Other, net

 

4

 

 

 

3

 

Net Cash – Investing activities

 

(539

)

 

 

(123

)

Financing Activities

 

 

 

Short-term debt issued, net

 

1

 

 

 

 

Long-term debt issued, net

 

275

 

 

 

 

Long-term debt repaid

 

(155

)

 

 

 

Repurchase of common stock

 

(10

)

 

 

(52

)

Proceeds from exercise of employee stock options

 

45

 

 

 

6

 

Dividends paid

 

(219

)

 

 

(163

)

Other, net

 

(8

)

 

 

(1

)

Net Cash – Financing activities

 

(71

)

 

 

(210

)

Effect of exchange rate changes on cash

 

(11

)

 

 

(64

)

Net change in cash and cash equivalents

 

(239

)

 

 

(163

)

Cash and cash equivalents at beginning of year

 

944

 

 

 

1,349

 

Cash and cash equivalents at end of period

$

705

 

 

$

1,186

 

Supplemental disclosure of cash flow information:

 

 

 

Cash paid during the period for:

 

 

 

Interest

$

43

 

 

$

67

 

Income taxes (net of refunds received)

$

159

 

 

$

57

 

  Xylem Inc. Non-GAAP Measures     Management reviews key performance indicators including revenue, gross margins, segment operating income and margins, orders growth, working capital and backlog, among others. In addition, we consider certain non-GAAP (or "adjusted") measures to be useful to management and investors evaluating our operating performance for the periods presented, and to provide a tool for evaluating our ongoing operations, liquidity and management of assets. This information can assist investors in assessing our financial performance and measures our ability to generate capital for deployment among competing strategic alternatives and initiatives, including but not limited to, dividends, acquisitions, share repurchases and debt repayment. Excluding revenue, Xylem provides guidance only on a non-GAAP basis due to the inherent difficulty in forecasting certain amounts that would be included in GAAP earnings, such as discrete tax items, without unreasonable effort. These adjusted metrics are consistent with how management views our business and are used to make financial, operating and planning decisions. These metrics, however, are not measures of financial performance under GAAP and should not be considered a substitute for revenue, operating income, net income, earnings per share (basic and diluted) or net cash from operating activities as determined in accordance with GAAP. We consider the following items to represent the non-GAAP measures we consider to be key performance indicators, as well as the related reconciling items to the most directly comparable measure calculated and presented in accordance with GAAP. The non-GAAP measures may not be comparable to similarly titled measures reported by other companies.   “Organic revenue" and "Organic orders” defined as revenue and orders, respectively, excluding the impact of fluctuations in foreign currency translation and contributions from acquisitions and divestitures. Divestitures include sales or discontinuance of insignificant portions of our business that did not meet the criteria for classification as a discontinued operation. The period-over-period change resulting from foreign currency translation impacts is determined by translating current period and prior period activity using the same currency conversion rate.   “Constant currency” defined as financial results adjusted for foreign currency translation impacts by translating current period and prior period activity using the same currency conversion rate. This approach is used for countries whose functional currency is not the U.S. dollar.   “EBITDA” defined as earnings before interest, taxes, depreciation and amortization expense. “Adjusted EBITDA” and "Adjusted Segment EBITDA" reflect the adjustments to EBITDA and segment EBITDA, respectively, to exclude share-based compensation charges, restructuring and realignment costs, gain or loss from sale of businesses and special charges.   "Adjusted EBITDA Margin" and "Adjusted Segment EBITDA Margin" defined as adjusted EBITDA and adjusted segment EBITDA divided by total revenue and segment revenue, respectively.   "Adjusted Operating Income", "Adjusted Segment Operating Income", "Adjusted Net Income" and “Adjusted EPS” defined as operating income, segment operating income, net income and earnings per share, adjusted to exclude restructuring and realignment costs, amortization of acquired intangible assets, gain or loss from sale of businesses, special charges and tax-related special items, as applicable.   "Adjusted Operating Margin" and "Adjusted Segment Operating Margin" defined as adjusted operating income and adjusted segment operating income divided by total revenue and segment revenue, respectively.   “Free Cash Flow” defined as net cash from operating activities, as reported in the Statement of Cash Flows, less capital expenditures, and "Free Cash Flow Conversion" defined as Free Cash Flows divided by net income, excluding the gain on sale of businesses and other non-recurring, significant non-cash impacts, such as non-cash impairment charges and significant deferred tax items. Our definitions of "free cash flow" and "free cash flow conversion" do not consider certain non-discretionary cash payments, such as debt.   "Adjusted Free Cash Flow" defined as free cash flow adjusted for significant cash items for which the corresponding income statement impact does not occur within the same fiscal year.   “Realignment costs” defined as costs not included in restructuring costs that are incurred as part of actions taken to reposition our business, including items such as professional fees, severance, relocation, travel, facility set-up and other costs.   “Special charges" defined as costs incurred by the Company, such as acquisition and integration related costs, non-cash impairment charges and both operating and non-operating adjustments for costs related to the UK pension plan buyout.   “Tax-related special items" defined as tax items, such as tax return versus tax provision adjustments, tax exam impacts, tax law change impacts, excess tax benefits/losses and other discrete tax adjustments.   Xylem Inc. Non-GAAP Reconciliation Reported vs. Organic & Constant Currency Orders ($ Millions)     (As Reported - GAAP) (As Adjusted - Organic) Constant Currency

 

 

(A)

 

(B)

 

 

 

(C)

 

(D)

 

(E) = B+C+D

 

(F) = E/A

 

(G) = (E - C) / A

 

 

 

 

Change

 

% Change

 

Acquisitions / Divestitures

 

 

 

Change

 

% Change

 

 

Orders

 

Orders

 

2023 v. 2022

 

2023 v. 2022

 

 

FX Impact

 

Adj. 2023 v. 2022

 

Adj. 2023 v. 2022

 

 

2023

 

2022

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30 Xylem Inc.

5,457

4,818

639

 

13

%

(769

)

58

 

(72

)

(1

%)

14

%

Water Infrastructure

2,240

1,985

255

 

13

%

(222

)

32

 

65

 

3

%

14

%

Applied Water

1,350

1,394

(44

)

(3

%)

-

 

20

 

(24

)

(2

%)

(2

%)

Measurement & Control Solutions

1,320

1,439

(119

)

(8

%)

-

 

6

 

(113

)

(8

%)

(8

%)

Integrated Solutions & Services

547

-

547

 

N/A 

(547

)

-

 

-

 

N/A 

N/A 

    Quarter Ended September 30 Xylem Inc.

2,031

1,419

612

 

43

%

(547

)

(18

)

47

 

3

%

42

%

Water Infrastructure

850

594

256

 

43

%

(163

)

(10

)

83

 

14

%

41

%

Applied Water

422

409

13

 

3

%

-

 

(4

)

9

 

2

%

2

%

Measurement & Control Solutions

375

416

(41

)

(10

%)

-

 

(4

)

(45

)

(11

%)

(11

%)

Integrated Solutions & Services

384

-

384

 

N/A 

(384

)

-

 

-

 

N/A 

N/A 

    Quarter Ended June 30 Xylem Inc.

1,856

1,684

172

 

10

%

(222

)

23

 

(27

)

(2

%)

12

%

Water Infrastructure

751

731

20

 

3

%

(59

)

13

 

(26

)

(4

%)

5

%

Applied Water

445

480

(35

)

(7

%)

-

 

6

 

(29

)

(6

%)

(6

%)

Measurement & Control Solutions

497

473

24

 

5

%

-

 

4

 

28

 

6

%

6

%

Integrated Solutions & Services

163

-

163

 

N/A 

(163

)

-

 

-

 

N/A 

N/A 

    Quarter Ended March 31 Xylem Inc.

1,570

1,715

(145

)

(8

%)

-

 

53

 

(92

)

(5

%)

(5

%)

Water Infrastructure

639

660

(21

)

(3

%)

-

 

29

 

8

 

1

%

1

%

Applied Water

483

505

(22

)

(4

%)

-

 

18

 

(4

)

(1

%)

(1

%)

Measurement & Control Solutions

448

550

(102

)

(19

%)

-

 

6

 

(96

)

(17

%)

(17

%)

Integrated Solutions & Services

-

-

-

 

N/A 

-

 

-

 

-

 

N/A 

N/A 

  Xylem Inc. Non-GAAP Reconciliation Reported vs. Organic & Constant Currency Revenue ($ Millions)    

(As Reported - GAAP)

 

(As Adjusted - Organic)

 

Constant Currency

 

 

(A)

 

(B)

 

 

 

(C)

 

(D)

 

(E) = B+C+D

 

(F) = E/A

 

(G) = (E - C) / A

 

 

 

 

Change

 

% Change

 

Acquisitions / Divestitures

 

 

 

Change

 

% Change

 

 

Revenue

 

Revenue

 

2023 v. 2022

 

2023 v. 2022

 

 

FX Impact

 

Adj. 2023 v. 2022

 

Adj. 2023 v. 2022

 

 

2023

 

2022

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30 Xylem Inc.

5,246

4,016

1,230

31

%

(718

)

42

 

554

14

%

32

%

Water Infrastructure

2,096

1,696

400

24

%

(225

)

23

 

198

12

%

25

%

Applied Water

1,396

1,312

84

6

%

-

 

14

 

98

7

%

7

%

Measurement & Control Solutions

1,261

1,008

253

25

%

-

 

5

 

258

26

%

26

%

Integrated Solutions & Services

493

-

493

N/A 

(493

)

-

 

-

N/A 

N/A 

    Quarter Ended September 30 Xylem Inc.

2,076

1,380

696

50

%

(540

)

(22

)

134

10

%

49

%

Water Infrastructure

803

574

229

40

%

(172

)

(14

)

43

7

%

37

%

Applied Water

465

458

7

2

%

-

 

(3

)

4

1

%

1

%

Measurement & Control Solutions

440

348

92

26

%

-

 

(5

)

87

25

%

25

%

Integrated Solutions & Services

368

-

368

N/A 

(368

)

-

 

-

N/A 

N/A 

    Quarter Ended June 30 Xylem Inc.

1,722

1,364

358

26

%

(178

)

19

 

199

15

%

28

%

Water Infrastructure

704

589

115

20

%

(53

)

12

 

74

13

%

22

%

Applied Water

478

429

49

11

%

-

 

4

 

53

12

%

12

%

Measurement & Control Solutions

415

346

69

20

%

-

 

3

 

72

21

%

21

%

Integrated Solutions & Services

125

-

125

N/A 

(125

)

-

 

-

N/A 

N/A 

    Quarter Ended March 31 Xylem Inc.

1,448

1,272

176

14

%

-

 

45

 

221

17

%

17

%

Water Infrastructure

589

533

56

11

%

-

 

25

 

81

15

%

15

%

Applied Water

453

425

28

7

%

-

 

13

 

41

10

%

10

%

Measurement & Control Solutions

406

314

92

29

%

-

 

7

 

99

32

%

32

%

Integrated Solutions & Services

-

-

-

N/A 

-

 

-

 

-

N/A 

N/A 

  Xylem Inc. Non-GAAP Reconciliation Adjusted Operating Income ($ Millions)        

Q1

 

Q2

 

Q3

 

YTD

2023

2022 (1)

 

2023

2022 (1)

 

2023

2022 (1)

 

2023

2022 (1)

Total Revenue • Total Xylem

1,448

 

1,272

 

1,722

 

1,364

 

2,076

 

1,380

 

5,246

 

4,016

 

• Water Infrastructure

589

 

533

 

704

 

589

 

803

 

574

 

2,096

 

1,696

 

• Applied Water

453

 

425

 

478

 

429

 

465

 

458

 

1,396

 

1,312

 

• Measurement & Control Solutions

406

 

314

 

415

 

346

 

440

 

348

 

1,261

 

1,008

 

• Integrated Solutions & Services

-

 

-

 

125

 

-

 

368

 

-

 

493

 

-

 

• Corporate/ Other

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

    Operating Income (Loss) • Total Xylem

131

 

111

 

119

 

146

 

191

 

168

 

441

 

425

 

• Water Infrastructure

70

 

74

 

106

 

108

 

128

 

104

 

304

 

286

 

• Applied Water

83

 

59

 

84

 

61

 

73

 

77

 

240

 

197

 

• Measurement & Control Solutions

20

 

(10

)

26

 

(5

)

27

 

(2

)

73

 

(17

)

• Integrated Solutions & Services

-

 

-

 

(7

)

-

 

(3

)

-

 

(10

)

-

 

• Corporate/ Other

(42

)

(12

)

(90

)

(18

)

(34

)

(11

)

(166

)

(41

)

    Operating Margin • Total Xylem

9.0

%

8.7

%

6.9

%

10.7

%

9.2

%

12.2

%

8.4

%

10.6

%

• Water Infrastructure

11.9

%

13.9

%

15.1

%

18.3

%

15.9

%

18.1

%

14.5

%

16.9

%

• Applied Water

18.3

%

13.9

%

17.6

%

14.2

%

15.7

%

16.8

%

17.2

%

15.0

%

• Measurement & Control Solutions

4.9

%

(3.2

%)

6.3

%

(1.4

%)

6.1

%

(0.6

%)

5.8

%

(1.7

%)

• Integrated Solutions & Services

N/A

 

N/A

 

(5.6

%)

N/A

 

(0.8

%)

N/A

 

(2.0

%)

N/A

 

• Corporate/ Other

(2.9

%)

9.7

%

(5.2

%)

12.0

%

(1.6

%)

13.0

%

(3.2

%)

(1.0

%)

    Special Charges • Total Xylem

25

 

1

 

67

 

1

 

24

 

13

 

116

 

15

 

• Water Infrastructure

-

 

-

 

12

 

-

 

6

 

-

 

18

 

-

 

• Applied Water

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

• Measurement & Control Solutions

2

 

-

 

-

 

1

 

1

 

12

 

3

 

13

 

• Integrated Solutions & Services

-

 

-

 

7

 

-

 

9

 

-

 

16

 

-

 

• Corporate/ Other

23

 

1

 

48

 

-

 

8

 

1

 

79

 

2

 

    Restructuring & Realignment Costs • Total Xylem

11

 

4

 

37

 

8

 

34

 

6

 

82

 

18

 

• Water Infrastructure

3

 

1

 

3

 

3

 

3

 

3

 

9

 

7

 

• Applied Water

3

 

1

 

2

 

2

 

6

 

1

 

11

 

4

 

• Measurement & Control Solutions

5

 

2

 

3

 

3

 

6

 

2

 

14

 

7

 

• Integrated Solutions & Services

-

 

-

 

7

 

-

 

8

 

-

 

15

 

-

 

• Corporate/ Other

-

 

-

 

22

 

-

 

11

 

-

 

33

 

-

 

    Purchase Accounting Intangible Amortization Adjustment • Total Xylem

18

 

18

 

36

 

18

 

66

 

18

 

120

 

54

 

• Water Infrastructure

1

 

1

 

8

 

1

 

15

 

1

 

24

 

3

 

• Applied Water

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

• Measurement & Control Solutions

17

 

17

 

17

 

17

 

16

 

17

 

50

 

51

 

• Integrated Solutions & Services

-

 

-

 

11

 

-

 

35

 

-

 

46

 

-

 

• Corporate/ Other

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

 

    Adjusted Operating Income (Loss) • Total Xylem

185

 

134

 

259

 

173

 

315

 

205

 

759

 

512

 

• Water Infrastructure

74

 

76

 

129

 

112

 

152

 

108

 

355

 

296

 

• Applied Water

86

 

60

 

86

 

63

 

79

 

78

 

251

 

201

 

• Measurement & Control Solutions

44

 

9

 

46

 

16

 

50

 

29

 

140

 

54

 

• Integrated Solutions & Services

-

 

-

 

18

 

-

 

49

 

-

 

67

 

-

 

• Corporate/ Other

(19

)

(11

)

(20

)

(18

)

(15

)

(10

)

(54

)

(39

)

    Adjusted Operating Margin • Total Xylem

12.8

%

10.5

%

15.0

%

12.7

%

15.2

%

14.9

%

14.5

%

12.7

%

• Water Infrastructure

12.6

%

14.3

%

18.3

%

19.0

%

18.9

%

18.8

%

16.9

%

17.5

%

• Applied Water

19.0

%

14.1

%

18.0

%

14.7

%

17.0

%

17.0

%

18.0

%

15.3

%

• Measurement & Control Solutions

10.8

%

2.9

%

11.1

%

4.6

%

11.4

%

8.3

%

11.1

%

5.4

%

• Integrated Solutions & Services

N/A

 

N/A

 

14.4

%

N/A

 

13.3

%

N/A

 

13.6

%

N/A

 

• Corporate/ Other

(1.3

%)

(0.9

%)

(1.2

%)

(1.3

%)

(0.7

%)

(0.7

%)

(1.0

%)

(1.0

%)

    (1) 2022 amounts have been recast to adjust for historical purchase accounting intangible amortization.   Xylem Inc. Non-GAAP Reconciliation Adjusted Diluted EPS ($ Millions, except per share amounts)     Q3 2023 Q3 2022 (1) As Reported Adjustments Adjusted As Reported Adjustments Adjusted Total Revenue

2,076

 

-

 

2,076

 

1,380

 

-

 

1,380

 

Operating Income

191

 

124

 

a

315

 

168

 

37

 

a

205

 

Operating Margin

9.2

%

15.2

%

12.2

%

14.9

%

Interest Expense

(14

)

-

 

(14

)

(12

)

-

 

(12

)

Other Non-Operating Income (Expense)

8

 

-

 

8

 

1

 

1

 

b

2

 

UK Pension Buyout Settlement

-

 

-

 

-

 

(140

)

140

 

-

 

Gain/(Loss) From Sale of Business

-

 

-

 

-

 

-

 

-

 

-

 

Income before Taxes

185

 

124

 

309

 

17

 

178

 

195

 

Provision for Income Taxes

(33

)

(36

)

c

(69

)

(5

)

(33

)

c

(38

)

Net Income

152

 

88

 

240

 

12

 

145

 

157

 

Diluted Shares

242.2

 

242.2

 

180.9

 

180.9

 

Diluted EPS

$0.63

 

$0.36

 

$0.99

 

$0.07

 

$0.80

 

$0.87

 

    Year-over-year currency translation impact on current year diluted EPS ($0.03

)

$0.00

 

($0.03

)

Diluted EPS at Constant Currency

$0.60

 

$0.36

 

$0.96

 

            Q3 YTD 2023 Q3 YTD 2022 (1) As Reported Adjustments Adjusted As Reported Adjustments Adjusted Total Revenue

5,246

 

-

 

5,246

 

4,016

 

4,016

 

Operating Income

441

 

318

 

a

759

 

425

 

87

 

a

512

 

Operating Margin

8.4

%

14.5

%

10.6

%

12.7

%

Interest Expense

(35

)

-

 

(35

)

(37

)

-

 

(37

)

Other Non-Operating Income (Expense)

19

 

-

 

19

 

2

 

4

 

b

6

 

UK Pension Buyout Settlement

-

 

-

 

-

 

(140

)

140

 

-

 

Gain/(Loss) From Sale of Business

-

 

-

 

-

 

1

 

(1

)

-

 

Income before Taxes

425

 

318

 

743

 

251

 

230

 

481

 

Provision for Income Taxes

(82

)

(75

)

c

(157

)

(45

)

(48

)

c

(93

)

Net Income

343

 

243

 

586

 

206

 

182

 

388

 

Diluted Shares

210.1

 

210.1

 

180.9

 

180.9

 

Diluted EPS

$1.63

 

$1.16

 

$2.79

 

$1.14

 

$1.01

 

$2.15

 

    Year-over-year currency translation impact on current year diluted EPS

$0.00

 

$0.00

 

$0.00

 

Diluted EPS at Constant Currency

$1.63

 

$1.16

 

$2.79

 

(1) 2022 amounts have been recast to adjust for historical purchase accounting intangible amortization.    a Quarter-to-date: Restructuring & realignment costs: 2023 - $34 million and 2022 - $6 million Special charges: 2023 - $23 million of acquisition & integration cost and $1 million of asset impairment; 2022 - $12 million of asset impairment charges and $1 million UK pension plan charges Purchase accounting intangible amortization: 2023 - $66 million and 2022 - $18 million Year-to-date: Restructuring & realignment costs: 2023 - $82 million and 2022 - $18 million Special charges: 2023 - $107 million of acquisition & integration related costs, $6 million of other special charges and $3 million of asset impairment charges; 2022 - $13 million of asset impairment charges and $2 million UK pension plan charges Purchase accounting intangible amortization: 2023 - $120 million and 2022 - $54 million b Quarter-to-date and Year-to-date: 2022 - Special non-operating charges consist of charges related to the UK pension plan exited as part of a buy-out of $1 million and $4 million, respectively c Quarter-to-date: 2023 - Net tax impact on pre-tax adjustments (note a) of $28 million and other tax special items of $8 million; 2022 - Net tax impact on pre-tax adjustments (notes a and b) of $31 million and other tax related special items of $2 million Year-to-date: 2023 - Net tax impact on pre-tax adjustments (note a) of $67 million and other tax special items of $8 million; 2022 - Net tax impact on pre-tax adjustments (notes a and b) of $44 million and other tax related special items of $4 million     Xylem Inc. Non-GAAP Reconciliation Net Cash - Operating Activities vs. Free Cash Flow ($ Millions)    

Q1

 

Q2

 

Q3

 

Year-to-Date

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2023

 

2022

 

2023

 

2022

 

2023

 

2022

 

2023

 

2022

    Net Cash - Operating Activities

($19

)

($81

)

$28

 

$113

 

$373

 

$202

 

$382

 

$234

 

  Capital Expenditures - PP&E

(33

)

(31

)

(42

)

(30

)

(57

)

(37

)

(132

)

(98

)

Capital Expenditures - Software

(16

)

(18

)

(12

)

(16

)

(17

)

(16

)

(45

)

(50

)

Capital Expenditures

(49

)

(49

)

(54

)

(46

)

(74

)

(53

)

(177

)

(148

)

    Cash paid in excess of tax provision for R&D law change adoption

33

 

-

 

-

 

-

 

-

 

-

 

33

 

-

 

        Free Cash Flow

($35

)

($130

)

($26

)

$67

 

$299

 

$149

 

$238

 

$86

 

    Cash paid by Xylem for Evoqua's pre-close transaction costs

-

 

-

 

70

 

-

 

-

 

-

 

70

 

-

 

Cash paid for Idrica distribution agreement

-

 

-

 

60

 

-

 

-

 

-

 

60

 

-

 

    Adjusted Free Cash Flow

($35

)

($130

)

$104

 

$67

 

$299

 

$149

 

$368

 

$86

 

    Net Income

$99

 

$82

 

$92

 

$112

 

$152

 

$12

 

$343

 

$206

 

 

-

 

Gain/(Loss) from sale of business

-

 

1

 

-

 

-

 

-

 

-

 

-

 

1

 

 

-

 

Restructuring Charges - non-cash stock acceleration

-

 

-

 

(14

)

-

 

(11

)

-

 

(25

)

-

 

    U.K. pension buyout settlement - non-cash release from AOCI

-

 

-

 

-

 

-

 

-

 

(140

)

-

 

(140

)

    U.K. pension buyout settlement - non-cash tax release from AOCI

-

 

-

 

-

 

-

 

-

 

23

 

-

 

23

 

    Special Charges - Inventory step-up

-

 

-

 

(15

)

-

 

(5

)

(20

)

-

 

    Special Charges - non-cash impairment

(2

)

-

 

-

 

(1

)

(1

)

(12

)

(3

)

(13

)

    Net Income, excluding gain on sale of businesses and non-cash restructuring and special charges

$101

 

$81

 

$121

 

$113

 

$169

 

$141

 

$391

 

$335

 

    Operating Cash Flow Conversion

-19

%

-99

%

30

%

101

%

245

%

1683

%

111

%

114

%

    Free Cash Flow Conversion

-35

%

-160

%

86

%

59

%

177

%

106

%

94

%

26

%

  Xylem Inc. Non-GAAP Reconciliation EBITDA and Adjusted EBITDA by Quarter ($ Millions)        

2023

  Q1 Q2 Q3 Q4 Total     Net Income

99

 

92

 

152

 

343

 

Net Income margin

6.8

%

5.3

%

7.3

%

6.5

%

Depreciation

28

 

41

 

63

 

132

 

Amortization

32

 

51

 

84

 

167

 

Interest Expense (Income), net

2

 

5

 

6

 

13

 

Income Tax Expense

27

 

22

 

33

 

82

 

EBITDA

188

 

211

 

338

 

737

 

Share-based Compensation

12

 

15

 

18

 

45

 

Restructuring & Realignment

11

 

36

 

33

 

80

 

Special Charges

25

 

67

 

22

 

114

 

Adjusted EBITDA

236

 

329

 

411

 

-

 

976

 

Revenue

1,448

 

1,722

 

2,076

 

5,246

 

Adjusted EBITDA Margin

16.3

%

19.1

%

19.8

%

18.6

%

   

2022

  Q1 Q2 Q3 Q4 Total     Net Income

82

 

112

 

12

 

149

 

355

 

Net Income margin

6.4

%

8.2

%

0.9

%

9.9

%

6.4

%

Depreciation

28

 

28

 

27

 

28

 

111

 

Amortization

30

 

32

 

31

 

32

 

125

 

Interest Expense (Income), net

11

 

10

 

7

 

6

 

34

 

Income Tax Expense

16

 

24

 

5

 

40

 

85

 

EBITDA

167

 

206

 

82

 

255

 

710

 

Share-based Compensation

9

 

9

 

10

 

9

 

37

 

Restructuring & Realignment

4

 

8

 

6

 

16

 

34

 

U.K. Pension Settlement

-

 

-

 

140

 

-

 

140

 

Special Charges

2

 

3

 

14

 

1

 

20

 

Loss/(Gain) from sale of business

(1

)

-

 

-

 

-

 

(1

)

Adjusted EBITDA

181

 

226

 

252

 

281

 

940

 

Revenue

1,272

 

1,364

 

1,380

 

1,506

 

5,522

 

Adjusted EBITDA Margin

14.2

%

16.6

%

18.3

%

18.7

%

17.0

%

  Xylem Inc. Non-GAAP Reconciliation EBITDA and Adjusted EBITDA by Quarter ($ Millions) Water Infrastucture    

2023

Q1 Q2 Q3 Q4 Total     Operating Income

70

 

106

 

128

 

304

 

Operating Margin

11.9

%

15.1

%

15.9

%

14.5

%

Depreciation

12

 

14

 

14

 

40

 

Amortization

2

 

10

 

16

 

28

 

Other non-operating expense, excluding interest income

-

 

1

 

-

 

1

 

EBITDA

84

 

131

 

158

 

-

 

373

 

Share-based Compensation

2

 

5

 

3

 

10

 

Restructuring & Realignment

3

 

3

 

3

 

9

 

Special Charges

-

 

12

 

6

 

18

 

Adjusted EBITDA

89

 

151

 

170

 

-

 

410

 

Revenue

589

 

704

 

803

 

2,096

 

Adjusted EBITDA Margin

15.1

%

21.4

%

21.2

%

19.6

%

   

2022

  Q1 Q2 Q3 Q4 Total     Operating Income

74

 

108

 

104

 

132

 

418

 

Operating Margin

13.9

%

18.3

%

18.1

%

19.8

%

17.7

%

Depreciation

11

 

11

 

11

 

11

 

44

 

Amortization

2

 

3

 

1

 

3

 

9

 

Other non-operating expense, excluding interest income

(4

)

1

 

-

 

(1

)

(4

)

EBITDA

83

 

123

 

116

 

145

 

467

 

Share-based Compensation

1

 

-

 

-

 

1

 

2

 

Restructuring & Realignment

1

 

3

 

3

 

4

 

11

 

Adjusted EBITDA

85

 

126

 

119

 

150

 

480

 

Revenue

533

 

589

 

574

 

668

 

2,364

 

Adjusted EBITDA Margin

15.9

%

21.4

%

20.7

%

22.5

%

20.3

%

  Xylem Inc. Non-GAAP Reconciliation EBITDA and Adjusted EBITDA by Quarter ($ Millions) Applied Water    

2023

  Q1 Q2 Q3 Q4 Total     Operating Income

83

 

84

 

73

 

240

 

Operating Margin

18.3

%

17.6

%

15.7

%

17.2

%

Depreciation

5

 

4

 

6

 

15

 

Amortization

-

 

1

 

-

 

1

 

Other non-operating expense, excluding interest income

(1

)

-

 

-

 

(1

)

EBITDA

87

 

89

 

79

 

-

 

255

 

Share-based Compensation

1

 

-

 

1

 

2

 

Restructuring & Realignment

3

 

2

 

5

 

10

 

Special Charges

-

 

-

 

-

 

-

 

Adjusted EBITDA

91

 

91

 

85

 

-

 

267

 

Revenue

453

 

478

 

465

 

1,396

 

Adjusted EBITDA Margin

20.1

%

19.0

%

18.3

%

19.1

%

    

2022

Q1 Q2 Q3 Q4 Total     Operating Income

59

 

61

 

77

 

61

 

258

 

Operating Margin

13.9

%

14.2

%

15.7

%

13.4

%

14.6

%

Depreciation

5

 

4

 

4

 

4

 

17

 

Amortization

-

 

1

 

-

 

1

 

2

 

Other non-operating expense, excluding interest income

(1

)

-

 

(1

)

-

 

(2

)

EBITDA

63

 

66

 

80

 

66

 

275

 

Share-based Compensation

1

 

1

 

2

 

-

 

4

 

Restructuring & Realignment

1

 

2

 

1

 

9

 

13

 

Adjusted EBITDA

65

 

69

 

83

 

75

 

292

 

Revenue

425

 

429

 

458

 

455

 

1,767

 

Adjusted EBITDA Margin

15.3

%

16.1

%

18.1

%

16.5

%

16.5

%

  Xylem Inc. Non-GAAP Reconciliation EBITDA and Adjusted EBITDA by Quarter ($ Millions) Measurement & Control Solutions    

2023

  Q1 Q2 Q3 Q4 Total     Operating Income

20

 

26

 

27

 

73

 

Operating Margin

4.9

%

6.3

%

6.1

%

5.8

%

Depreciation

7

 

9

 

8

 

24

 

Amortization

27

 

26

 

26

 

79

 

Other non-operating expense, excluding interest income

-

 

-

 

(1

)

(1

)

EBITDA

54

 

61

 

60

 

-

 

175

 

Share-based Compensation

2

 

2

 

2

 

6

 

Restructuring & Realignment

5

 

2

 

6

 

13

 

Special Charges

2

 

-

 

1

 

3

 

Adjusted EBITDA

63

 

65

 

69

 

-

 

197

 

Revenue

406

 

415

 

440

 

1,261

 

Adjusted EBITDA Margin

15.5

%

15.7

%

15.7

%

15.6

%

   

2022

Q1 Q2 Q3 Q4 Total     Operating Income

(10

)

(5

)

(2

)

19

 

2

 

Operating Margin

-3.2

%

-1.4

%

-0.6

%

5.0

%

0.1

%

(Loss)/Gain from sale of business

1

 

-

 

-

 

-

 

1

 

Depreciation

9

 

8

 

8

 

8

 

33

 

Amortization

25

 

26

 

27

 

26

 

104

 

Other non-operating expense, excluding interest income

-

 

(1

)

(1

)

-

 

(2

)

EBITDA

25

 

28

 

32

 

53

 

138

 

Share-based Compensation

1

 

2

 

2

 

1

 

6

 

Restructuring & Realignment

2

 

3

 

2

 

3

 

10

 

Special Charges

-

 

1

 

12

 

1

 

14

 

Loss/(Gain) from sale of business

(1

)

-

 

-

 

-

 

(1

)

Adjusted EBITDA

27

 

34

 

48

 

58

 

167

 

Revenue

314

 

346

 

348

 

383

 

1,391

 

Adjusted EBITDA Margin

8.6

%

9.8

%

13.8

%

15.1

%

12.0

%

   Xylem Inc. Non-GAAP Reconciliation EBITDA and Adjusted EBITDA by Quarter ($ Millions) Integrated Solutions & Services    

2023

Q1 Q2 Q3 Q4 Total   Operating Income

-

(7

)

(3

)

(10

)

Operating Margin

0.0

%

-5.6

%

-0.8

%

-2.0

%

Depreciation

-

8

 

30

 

38

 

Amortization

-

12

 

36

 

48

 

EBITDA

-

13

 

63

 

-

76

 

Share-based Compensation

-

3

 

3

 

6

 

Restructuring & Realignment

-

7

 

8

 

15

 

Special Charges

-

7

 

9

 

16

 

Adjusted EBITDA

-

30

 

83

 

-

113

 

Revenue

-

125

 

368

 

493

 

Adjusted EBITDA Margin

24.0

%

22.6

%

22.9

%

 

Media Houston Spencer +1 (914) 323-5723 houston.spencer@xylem.com

Investors Andrea van der Berg +1 (914) 260-8612 andrea.vanderberg@xylem.com

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