0001524472false00015244722024-02-062024-02-06
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 6, 2024
XYLEM INC.
(Exact name of registrant as specified in its charter)
Indiana001-3522945-2080495
(State or other jurisdiction
of incorporation)		(Commission
File Number)		(IRS Employer
Identification No.)
301 Water Street SE20003
WashingtonDC
(Address of principal executive offices)(Zip Code)
(202) 869-9150
(Registrant’s telephone number, including area code)
(Former name or former address, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange of which registered
Common Stock, par value $0.01 per shareXYLNew York Stock Exchange

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
☐Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.¨


Item 2.02Results of Operations and Financial Condition
On February 6, 2024, Xylem Inc. issued a press release announcing its financial results for the quarter and fiscal year ended December 31, 2023. A copy of the press release is furnished as Exhibit 99.1 to this report and is incorporated by reference herein.
This information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.
Item 9.01Financial Statements and Exhibits
(d) Exhibits.
Exhibit
   No.		Description
Press Release issued by Xylem Inc. on February 6, 2024.
104.0The cover page from Xylem Inc.'s Form 8-K, formatted in Inline XBRL (included as Exhibit 101).




SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
XYLEM INC.
Date: February 6, 2024By:/s/ William K. Grogan
William K. Grogan
Senior Vice President & Chief Financial Officer
(Authorized Officer of Registrant)




Exhibit 99.1
xylemlogoa18.jpg

Xylem Inc.
301 Water Street SE, Suite 200
Washington, DC 20003
Tel +1.202.869.9150

Contacts:MediaInvestors
Houston Spencer +1 (914) 323-5723Andrea van der Berg +1 (914) 260-8612
houston.spencer@xylem.comandrea.vanderberg@xylem.com

Xylem Reports Fourth-Quarter and Full-Year 2023 Results

Fourth-Quarter Highlights
•Orders of $2.0 billion, up 42% on a reported basis and 10% organically
•Revenue of $2.1 billion, up 41% on a reported basis and 9% organically
•Earnings per share of $1.10, up 34%; $0.99 on an adjusted basis, down 1%

Full-Year Highlights
•Revenue of $7.4 billion, up 33% on a reported basis and 12% organically
•Earnings per share of $2.79, up 42%; $3.78 on an adjusted basis, up 20%
•Initiating 2024 full-year revenue guidance of $8.4 to $8.5 billion, up 3% to 5% organically, and adjusted earnings per share range of $4.00 to $4.20

WASHINGTON, D.C., (Feb. 6, 2024) – Xylem Inc. (NYSE: XYL), a leading global water technology company dedicated to solving the world’s most challenging water issues, today reported fourth-quarter and full-year 2023 results. The Company’s total revenue of $2.1 billion surpassed prior guidance, on continued strong execution and demand. Fourth-quarter earnings exceeded Xylem’s previous guidance.

“The team delivered an outstanding fourth quarter, fueling momentum as we enter 2024,” said Matthew Pine, Xylem president and CEO. “Revenue, margin and earnings per share all exceeded expectations, driven by strong execution on healthy demand across our business. In a transformational year for Xylem, the team stayed focused on serving our customers and delivered strong results on both the top and bottom lines.”

“That discipline and focus, paired with continuing resilient underlying demand, gives us confidence in further growth and margin expansion in the year ahead. Our integration of Evoqua is ahead of schedule, and our team is taking full advantage of the breadth of our combined offering to solve even more of our customers’ water challenges.”

Net income was $266 million, or $1.10 per share. Net income margin increased 270 basis points to 12.6 percent. These results are driven by strong operational performance and non-recurring tax benefits, partially offset by higher acquisition and integration costs related to the Evoqua transaction, purchase accounting intangible amortization, special charges, and restructuring and realignment costs. Adjusted net income was $239 million, or $0.99 per share, which excludes the impacts of special charges, purchase accounting intangible amortization, and restructuring and realignment costs.

Fourth-quarter adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) margin was 19.6 percent, reflecting a year-over-year increase of 90 basis points. Productivity savings, strong


price realization and higher volume drove the margin expansion, exceeding the impact of inflation and strategic investments.

The Board of Directors of Xylem has declared a first-quarter dividend of $0.36 per share, an increase of 9 percent. The dividend is payable on March 20, 2024, to shareholders of record as of February 21, 2024.

Outlook

Xylem forecasts full-year 2024 revenue of approximately $8.4 to $8.5 billion, up approximately 14 to 15 percent on a reported basis and up approximately 3 to 5 percent on an organic basis.

Full-year 2024 adjusted EBITDA margin is expected to be approximately 19.4 to 19.9 percent, an increase of 50 to 100 basis points from Xylem’s 2023 adjusted results. Full-year free cash flow conversion to net income is expected to be approximately 115 percent.

Further 2024 planning assumptions are included in Xylem’s fourth-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.

Supplemental information on Xylem’s fourth-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 challenges with innovation and expertise. Our 23,000 diverse employees delivered combined pro forma revenue of $8.1 billion in 2023. 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 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, interest rates, inflation 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 ongoing and possible escalation of the conflicts involving between Russia and


Ukraine, and the Middle East, as well as regulatory, economic and other risks associated with our global sales and operations, including those related to domestic content requirements applicable to projects receiving governmental funding; 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 connected products and services; lack of availability or delays in receiving parts and raw materials from our supply chain, including electronic components (in particular, semiconductors); disruptions in operations at our facilities or that of third parties upon which we rely; uncertainty related to the realization of the benefits and synergies from our acquisition of Evoqua; safe and compliant treatment and handling of water, wastewater and hazardous materials; failure to successfully execute large projects, including with respect to meeting performance guarantees and customers’ budgets, timelines and safety requirements; our ability to retain and attract leadership and other diverse and key talent, as well as competition for overall talent and labor; defects, security, warranty and liability claims, and recalls with respect to our products; uncertainty related to restructuring and realignment actions and related costs and savings; our ability to execute strategic investments for growth, including related to acquisitions and divestitures; availability, regulation or interference with radio spectrum used by certain of our products; volatility in served markets or impacts on our business and operations due to weather conditions, including the effects of climate change; risks related to our sustainability commitments and related disclosures; fluctuations in foreign currency exchange rates; difficulty predicting our financial results; risk of future impairments to goodwill and other intangible assets; changes in our effective tax rates or tax expenses; financial market risks related to our pension and other defined benefit plans; failure to comply with, or changes in, laws or regulations, including those pertaining to our business conduct, operations, products and services, including anti-corruption, data privacy and security, trade, competition, the environment, climate change and health and safety; legal, governmental or regulatory claims, investigations or proceedings and associated contingent liabilities; matters related to intellectual property infringement or expiration of rights; 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 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
CONSOLIDATED INCOME STATEMENTS (Unaudited)
(in millions, except per share data)
Year Ended December 31,202320222021
Revenue from products$6,291 $4,978 $4,684 
Revenue from services1,073 544 511 
Revenue7,364 5,522 5,195 
Cost of revenue from products3,817 3,002 2,831 
Cost of revenue from services830 436 389 
Cost of revenue4,647 3,438 3,220 
Gross profit2,717 2,084 1,975 
Selling, general and administrative expenses1,757 1,227 1,179 
Research and development expenses 232 206 204 
Restructuring and asset impairment charges76 29 7 
Operating income652 622 585 
Interest expense49 50 76 
U.K. pension settlement expense— 140 — 
Other non-operating income, net33 7 — 
(Loss) Gain on sale of businesses(1)1 2 
Income before taxes635 440 511 
Income tax expense26 85 84 
Net income609 355 427 
Earnings per share:
Basic$2.81 $1.97 $2.37 
Diluted$2.79 $1.96 $2.35 
Weighted average number of shares:
Basic217.0180.2180.2
Diluted218.2181.0181.5



XYLEM INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (Unaudited)
(in millions, except per share amounts)
December 31,20232022
ASSETS
Current assets:
Cash and cash equivalents$1,019 $944 
Receivables, less allowances for discounts, returns and credit losses of $56 and $50 in 2023 and 2022, respectively
1,617 1,096 
Inventories1,018 799 
Prepaid and other current assets230 173 
Total current assets3,884 3,012 
Property, plant and equipment, net1,169 630 
Goodwill7,587 2,719 
Other intangible assets, net2,529 930 
Other non-current assets943 661 
Total assets$16,112 $7,952 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable$968 $723 
Accrued and other current liabilities1,221 867 
Short-term borrowings and current maturities of long-term debt16 — 
Total current liabilities2,205 1,590 
Long-term debt, net2,268 1,880 
Accrued post-retirement benefit obligations344 286 
Deferred income tax liabilities557 222 
Other non-current accrued liabilities562 471 
Total liabilities5,936 4,449 
Stockholders’ equity:
Common stock — par value $0.01 per share:
Authorized 750.0 shares, issued 257.6 and 196.0 shares in 2023 and 2022, respectively
3 2 
Capital in excess of par value8,564 2,134 
Retained earnings2,601 2,292 
Treasury stock – at cost 16.0 shares and 15.8 shares in 2023 and 2022, respectively
(733)(708)
Accumulated other comprehensive loss(269)(226)
Total stockholders’ equity10,166 3,494 
Non-controlling interest10 9 
Total equity10,176 3,503 
Total liabilities and stockholders’ equity$16,112 $7,952 



XYLEM INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(in millions)
Year Ended December 31,202320222021
Operating Activities
Net income$609 $355 $427 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation193 111 118 
Amortization243 125 127 
Deferred income taxes(79)(64)10 
Share-based compensation60 37 33 
Restructuring and asset impairment charges76 29 7 
U.K. pension settlement expense— 140 — 
Loss (gain) from sale of businesses1 (1)(2)
Other, net— (4)8 
Payments for restructuring(30)(11)(25)
Contributions to post-retirement benefit plans(25)(19)(29)
Changes in assets and liabilities (net of acquisitions):
Changes in receivables(87)(192)(70)
Changes in inventories41 (147)(167)
Changes in accounts payable22 117 81 
Changes in accrued liabilities(4)57 7 
Changes in accrued and deferred taxes(109)57 (9)
Net changes in other assets and liabilities(74)6 22 
Net Cash — Operating activities837 596 538 
Investing Activities
Capital expenditures(271)(208)(208)
Proceeds from the sale of property, plant and equipment1 4 3 
Acquisitions of businesses, net of cash acquired(476)— — 
Proceeds from sale of businesses105 1 10 
Cash received from investments1 5 — 
Cash paid for investments(1)(11)— 
Cash paid for equity investments(57)(3)(5)
Cash received from interest rate swaps38 — — 
Cash received from cross-currency swaps28 28 14 
Settlement of currency forward agreement— (10)— 
Other, net4 3 3 
Net Cash — Investing activities(628)(191)(183)
Financing Activities
Long-term debt issued, net278 — — 
Long-term debt repaid, net(160)(527)(600)
Repurchase of common stock(25)(52)(68)
Issuance of common stock— — — 
Proceeds from exercise of employee stock options62 8 19 
Dividends paid(299)(217)(203)
Other, net(13)(2)(3)
Net Cash — Financing activities(157)(790)(855)
Effect of exchange rate changes on cash23 (20)(26)
Net change in cash and cash equivalents75 (405)(526)
Cash and cash equivalents at beginning of year944 1,349 1,875 
Cash and cash equivalents at end of year$1,019 $944 $1,349 
Supplemental disclosure of cash flow information:
Cash paid during the year for:
Interest$69 $76 $99 
Income taxes (net of refunds received)$211 $91 $83 


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.
“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
OrdersOrders
Change
2023 v. 2022
% Change 2023 v. 2022
Acquisitions/
Divestitures		FX
Impact
Change
Adj.
2023 v. 2022
% Change
Adj. 2023 v. 2022
20232022
Year Ended December 31
Xylem Inc.7,501 6,257 1,244 20 %(1,220)41 65 1 %21 %
Water Infrastructure3,060 2,607 453 17 %(352)23 124 5 %18 %
Applied Water1,770 1,794 (24)(1)%— 18 (6)0 %0 %
Measurement and Control Solutions1,803 1,856 (53)(3)%— — (53)(3)%(3)%
Integrated Solutions and Services868 — 868 N/A(868)— — N/AN/A
Quarter Ended December 31
Xylem Inc.2,044 1,439 605 42 %(451)(17)137 10 %41 %
Water Infrastructure820 622 198 32 %(130)(9)59 9 %30 %
Applied Water420 400 20 5 %— (2)18 5 %5 %
Measurement and Control Solutions483 417 66 16 %— (6)60 14 %14 %
Integrated Solutions and Services321 — 321 N/A(321)— — N/AN/A
Quarter Ended September 30
Xylem Inc.2,031 1,419 612 43 %(547)(18)47 3 %42 %
Water Infrastructure850 594 256 43 %(163)(10)83 14 %41 %
Applied Water422 409 13 3 %— (4)9 2 %2 %
Measurement and Control Solutions375 416 (41)(10)%— (4)(45)(11)%(11)%
Integrated Solutions and Services384 — 384 N/A(384)— — N/AN/A
Quarter Ended June 30
Xylem Inc.1,856 1,684 172 10 %(222)23 (27)(2)%12 %
Water Infrastructure751 731 20 3 %(59)13 (26)(4)%5 %
Applied Water445 480 (35)(7)%— 6 (29)(6)%(6)%
Measurement and Control Solutions497 473 24 5 %— 4 28 6 %6 %
Integrated Solutions and Services163 — 163 N/A(163)— — N/AN/A


Quarter Ended March 31
Xylem Inc.1,570 1,715 (145)(8)%— 53 (92)(5)%(5)%
Water Infrastructure639 660 (21)(3)%— 29 8 1 %1 %
Applied Water483 505 (22)(4)%— 18 (4)(1)%(1)%
Measurement and Control Solutions448 550 (102)(19)%— 6 (96)(17)%(17)%
Integrated Solutions and Services— — — N/A— — — N/AN/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
RevenueRevenue
Change
2023 v. 2022
% Change 2023 v. 2022
Acquisitions/
Divestitures		FX
Impact
Change
Adj.
2023 v. 2022
% Change
Adj. 2023 v. 2022
20232022
Year Ended December 31
Xylem Inc.7,364 5,522 1,842 33 %(1,177)25 690 12 %34 %
Water Infrastructure2,967 2,364 603 26 %(362)14 255 11 %26 %
Applied Water1,853 1,767 86 5 %— 10 96 5 %5 %
Measurement and Control Solutions1,729 1,391 338 24 %— 1 339 24 %24 %
Integrated Solutions and Services815 — 815 N/A(815)— — N/AN/A
Quarter Ended December 31
Xylem Inc.2,118 1,506 612 41 %(459)(17)136 9 %40 %
Water Infrastructure871 668 203 30 %(137)(9)57 9 %29 %
Applied Water457 455 2 0 %— (4)(2)0 %0 %
Measurement and Control Solutions468 383 85 22 %— (4)81 21 %21 %
Integrated Solutions and Services322 — 322 N/A(322)— — N/AN/A
Quarter Ended September 30
Xylem Inc.2,076 1,380 696 50 %(540)(22)134 10 %49 %
Water Infrastructure803 574 229 40 %(172)(14)43 7 %37 %
Applied Water465 458 7 2 %— (3)4 1 %1 %
Measurement and Control Solutions440 348 92 26 %— (5)87 25 %25 %
Integrated Solutions and Services368 — 368 N/A(368)— — N/AN/A


Quarter Ended June 30
Xylem Inc.1,722 1,364 358 26 %(178)19 199 15 %28 %
Water Infrastructure704 589 115 20 %(53)12 74 13 %22 %
Applied Water478 429 49 11 %— 4 53 12 %12 %
Measurement and Control Solutions415 346 69 20 %— 3 72 21 %21 %
Integrated Solutions and Services125 — 125 N/A(125)— — N/AN/A
Quarter Ended March 31
Xylem Inc.1,448 1,272 176 14 %— 45 221 17 %17 %
Water Infrastructure589 533 56 11 %— 25 81 15 %15 %
Applied Water453 425 28 7 %— 13 41 10 %10 %
Measurement and Control Solutions406 314 92 29 %— 7 99 32 %32 %
Integrated Solutions and Services— — — N/A— — — N/AN/A
Xylem Inc. Non-GAAP Reconciliation
Adjusted Operating Income
($ Millions)
Q1Q2Q3Q4YTD
2023
2022(1)
2023
2022(1)
2023
2022(1)
2023
2022(1)
2023
2022(1)
Total Revenue
• Total Xylem1,448 1,272 1,722 1,364 2,076 1,380 2,118 1,506 7,364 5,522 
• Water Infrastructure589 533 704 589 803 574 871 668 2,967 2,364 
• Applied Water453 425 478 429 465 458 457 455 1,853 1,767 
• Measurement and Control Solutions406 314 415 346 440 348 468 383 1,729 1,391 
• Integrated Solutions and Services— — 125 — 368 — 322 — 815 — 
Operating Income
• Total Xylem131 111 119 146 191 168 211 197 652 622 
• Water Infrastructure70 74 106 108 128 104 115 132 419 418 
• Applied Water83 59 84 61 73 77 70 61 310 258 
• Measurement and Control Solutions20 (10)26 (5)27 (2)40 19 113 2 
• Integrated Solutions and Services— — (7)— (3)— 18 — 8 — 
• Corporate/Other(42)(12)(90)(18)(34)(11)(32)(15)(198)(56)
Operating Margin
• Total Xylem9.0 %8.7 %6.9 %10.7 %9.2 %12.2 %10.0 %13.1 %8.9 %11.3 %
• Water Infrastructure11.9 %13.9 %15.1 %18.3 %15.9 %18.1 %13.2 %19.8 %14.1 %17.7 %
• Applied Water18.3 %13.9 %17.6 %14.2 %15.7 %16.8 %15.3 %13.4 %16.7 %14.6 %
• Measurement and Control Solutions4.9 %(3.2)%6.3 %(1.4)%6.1 %(0.6)%8.5 %5.0 %6.5 %0.1 %
• Integrated Solutions and ServicesN/AN/A(5.6)%N/A(0.8)%N/A5.6 %N/A1.0 %N/A
• Corporate/OtherN/AN/AN/AN/AN/AN/AN/AN/AN/AN/A
Special Charges
• Total Xylem25 1 67 1 24 13 22 1 138 16 
• Water Infrastructure— — 12 — 6 — 11 — 29 — 
• Applied Water— — — — — — — — — — 
• Measurement and Control Solutions2 — — 1 1 12 1 1 4 14 
• Integrated Solutions and Services— — 7 — 9 — 5 — 21 — 
• Corporate/Other23 1 48 — 8 1 5 — 84 2 


Restructuring & Realignment Costs
• Total Xylem11 4 37 8 34 6 24 16 106 34 
• Water Infrastructure3 1 3 3 3 3 13 4 22 11 
• Applied Water3 1 2 2 6 1 3 9 14 13 
• Measurement and Control Solutions5 2 3 3 6 2 6 3 20 10 
• Integrated Solutions and Services— — 7 — 8 — — — 15 — 
• Corporate/Other— — 22 — 11 — 2 — 35 — 
Purchase Accounting Intangible Amortization Adjustment
• Total Xylem18 18 36 18 66 18 56 18 176 72 
• Water Infrastructure1 1 8 1 15 1 25 1 49 4 
• Applied Water— — — — — — — — — — 
• Measurement and Control Solutions17 17 17 17 16 17 16 17 66 68 
• Integrated Solutions and Services— — 11 — 35 — 15 — 61 — 
• Corporate/Other— — — — — — — — — — 
Adjusted Operating Income
• Total Xylem185 134 259 173 315 205 313 232 1,072 744 
• Water Infrastructure74 76 129 112 152 108 164 137 519 433 
• Applied Water86 60 86 63 79 78 73 70 324 271 
• Measurement and Control Solutions44 9 46 16 50 29 63 40 203 94 
• Integrated Solutions and Services— — 18 — 49 — 38 — 105 — 
• Corporate/Other(19)(11)(20)(18)(15)(10)(25)(15)(79)(54)
Adjusted Operating Margin
• Total Xylem12.8 %10.5 %15.0 %12.7 %15.2 %14.9 %14.8 %15.4 %14.6 %13.5 %
• Water Infrastructure12.6 %14.3 %18.3 %19.0 %18.9 %18.8 %18.8 %20.5 %17.5 %18.3 %
• Applied Water19.0 %14.1 %18.0 %14.7 %17.0 %17.0 %16.0 %15.4 %17.5 %15.3 %
• Measurement and Control Solutions10.8 %2.9 %11.1 %4.6 %11.4 %8.3 %13.5 %10.4 %11.7 %6.8 %
• Integrated Solutions and ServicesN/AN/A14.4 %N/A13.3 %N/A11.8 %N/A12.9 %N/A
• Corporate/OtherN/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
(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)
Q4 2023
Q4 2022(1)
As ReportedAdjustmentsAdjustedAs ReportedAdjustmentsAdjusted
Total Revenue2,118 — 2,118 1,506 — 1,506 
Operating Income211 102  a 313 197 35  a 232 
Operating Margin10.0 % 14.8 %13.1 %15.4 %
Interest Expense(14)— (14)(13)— (13)
Other Non-Operating Income (Expense)14 — 14 5 — b5 
Gain/(Loss) from sale of businesses(1)1 — — — — 
Income before Taxes210 103 313 189 35 224 
Provision for Income Taxes56 (130) c (74)(40)(2) c (42)
Net Income attributable to Xylem266 (27)239 149 33 182 
Diluted Shares242.5 242.5 181.3 181.3 
Diluted EPS$1.10 $(0.11)$0.99 $0.82 $0.18 $1.00 
Year-over-year currency translation impact on current year diluted EPS$0.02 $— $0.02 
Diluted EPS at Constant Currency$1.08 $(0.11)$0.97 

Q4 YTD 2023
Q4 YTD 2022(1)
As ReportedAdjustmentsAdjustedAs ReportedAdjustmentsAdjusted
Total Revenue7,364 — 7,364 5,522 — 5,522 
Operating Income652 420  a 1,072 622 122  a 744 
Operating Margin8.9 %14.6 %11.3 %13.5 %
Interest Expense(49)— (49)(50)— (50)
Other Non-Operating Income (Expense)33 — 33 7 4  b 11 
U.K. Pension Buyout Settlement— — — (140)140 — 
Gain/(Loss) from sale of businesses(1)1 — 1 (1)— 
Income before Taxes635 421 1,056 440 265 705 
Provision for Income Taxes(26)(205)c(231)(85)(50) c (135)
Net Income attributable to Xylem609 216 825 355 215 570 
Diluted Shares218.2 218.2 181.0 181.0 
Diluted EPS$2.79 $0.99 $3.78 $1.96 $1.19 $3.15 
Year-over-year currency translation impact on current year diluted EPS$0.02 $— $0.02 
Diluted EPS at Constant Currency$2.77 $0.99 $3.76 
(1) 2022 amounts have been recast to adjust for historical purchase accounting intangible amortization.
aQuarter-to-date:
Restructuring & realignment costs: 2023 - $24 million and 2022 - $16 million
Special charges: 2023 - $19 million of acquisition & integration cost, $1 million of asset impairment and $2 million of other special charges; 2022 - $1 million of asset impairment charges
Purchase accounting intangible amortization: 2023 - $56 million and 2022 - $18 million
Year-to-date:
Restructuring & realignment costs: 2023 - $106 million and 2022 - $34 million
Special charges: 2023 - $126 million of acquisition & integration related costs, $8 million of other special charges and $4 million of asset impairment charges; 2022 - $14 million of asset impairment charges and $2 million UK pension plan charges
Purchase accounting intangible amortization: 2023 - $176 million and 2022 - $72 million
bQuarter-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 $0 million and $4 million, respectively
cQuarter-to-date: 2023 - Net tax impact on pre-tax adjustments (note a) of $23 million and other tax special items of $107 million; 2022 - Net tax impact on pre-tax adjustments (notes a and b) of $7 million and other tax related special items of $(5) million
Year-to-date: 2023 - Net tax impact on pre-tax adjustments (note a) of $90 million and other tax special items of $115 million; 2022 - Net tax impact on pre-tax adjustments (notes a and b) of $51 million and other tax related special items of $(1) million


Xylem Inc. Non-GAAP Reconciliation
Net Cash - Operating Activities vs. Free Cash Flow
($ Millions)
Q1Q2Q3Q4Year Ended
2023202220232022202320222023202220232022
Net Cash - Operating Activities$(19)$(81)$28 $113 $373 $202 $455 $362 $837 $596 
Capital Expenditures - PP&E(33)(31)(42)(30)(57)(37)(76)(41)(208)(139)
Capital Expenditures - Software(16)(18)(12)(16)(17)(16)(18)(19)(63)(69)
Capital Expenditures(49)(49)(54)(46)(74)(53)(94)(60)(271)(208)
Cash paid in excess of tax provision for R&D law change adoption33 — — — — — — — 33 — 
Free Cash Flow$(35)$(130)$(26)$67 $299 $149 $361 $302 $599 $388 
Cash paid by Xylem for Evoqua's pre-close transaction costs— — 70 — — — — — 70 — 
Cash paid for Idrica distribution agreement— — 60 — — — — — 60 — 
Adjusted Free Cash Flow$(35)$(130)$104 $67 $299 $149 $361 $302 $729 $388 
Net Income99 82 92 112 152 12 266 149 609 355 
Gain/(Loss) from sale of businesses— 1 — — — — (1)— (1)1 
Restructuring Charges - non-cash stock acceleration— — (14)— (11)— (2)— (27)— 
Significant non-cash tax benefit/(charge)— — — — — — 70 — 70 — 
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)— (5)— (25)— 
Special Charges - non-cash impairment (2)— — (1)(1)(12)(1)(1)(4)(14)
Net Income, excluding gain/(loss) on sale of businesses and non-cash restructuring and special charges$101 $81 $121 $113 $169 $141 $205 $150 $596 $485 
Operating Cash Flow Conversion(19)%(99)%30 %101 %245 %1,683 %171 %243 %137 %168 %
Free Cash Flow Conversion(35)%(160)%86 %59 %177 %106 %176 %201 %122 %80 %



Xylem Inc. Non-GAAP Reconciliation
EBITDA and Adjusted EBITDA by Quarter
($ Millions)
2023
Q1Q2Q3Q4Total
Net Income99 92 152 266 609 
Net Income Margin6.8 %5.3 %7.3 %12.6 %8.3 %
Depreciation28 41 63 61 193 
Amortization32 51 84 76 243 
Interest Expense (Income), net2 5 6 8 21 
Income Tax Expense27 22 33 (56)26 
EBITDA188 211 338 355 1,092 
Share-based Compensation12 15 18 15 60 
Restructuring & Realignment11 36 33 23 103 
Special Charges25 67 22 22 136 
Loss/(Gain) from sale of business— — — 1 1 
Adjusted EBITDA236 329 411 416 1,392 
Revenue 1,448 1,722 2,076 2,118 7,364 
Adjusted EBITDA Margin16.3 %19.1 %19.8 %19.6 %18.9 %
2022
Q1Q2Q3Q4Total
Net Income82 112 12 149 355 
Net Income Margin6.4 %8.2 %0.9 %9.9 %6.4 %
Depreciation28 28 27 28 111 
Amortization30 32 31 32 125 
Interest Expense (Income), net11 10 7 6 34 
Income Tax Expense 16 24 5 40 85 
EBITDA167 206 82 255 710 
Share-based Compensation9 9 10 9 37 
Restructuring & Realignment4 8 6 16 34 
U.K. Pension Settlement— — 140 — 140 
Special Charges2 3 14 1 20 
Loss/(gain) from sale of business(1)— — — (1)
Adjusted EBITDA181 226 252 281 940 
Revenue 1,272 1,364 1,380 1,506 5,522 
Adjusted EBITDA Margin14.2 %16.6 %18.3 %18.7 %17.0 %



Xylem Inc. Non-GAAP Reconciliation
EBITDA and Adjusted EBITDA by Quarter
Water Infrastructure
($ Millions)
2023
Q1Q2Q3Q4Total
Operating Income70 106 128 115 419 
Operating Margin11.9 %15.1 %15.9 %13.2 %14.1 %
Depreciation12 14 14 15 55 
Amortization2 10 16 27 55 
Other non-operating expense, excluding interest income— 1 — 2 3 
EBITDA84 131 158 159 532 
Share-based Compensation2 5 3 5 15 
Restructuring & Realignment3 3 3 13 22 
Special Charges— 12 6 11 29 
Adjusted EBITDA89 151 170 188 598 
Revenue589 704 803 871 2,967 
Adjusted EBITDA Margin15.1 %21.4 %21.2 %21.6 %20.2 %
2022
Q1Q2Q3Q4Total
Operating Income74 108 104 132 418 
Operating Margin13.9 %18.3 %18.1 %19.8 %17.7 %
Depreciation11 11 11 11 44 
Amortization2 3 1 3 9 
Other non-operating expense, excluding interest(4)1 — (1)(4)
EBITDA83 123 116 145 467 
Share-based Compensation1 — — 1 2 
Restructuring & Realignment1 3 3 4 11 
Adjusted EBITDA85 126 119 150 480 
Revenue533 589 574 668 2,364 
Adjusted EBITDA Margin15.9 %21.4 %20.7 %22.5 %20.3 %



Xylem Inc. Non-GAAP Reconciliation
EBITDA and Adjusted EBITDA by Quarter
Applied Water
($ Millions)
2023
Q1Q2Q3Q4Total
Operating Income83 84 73 70 310 
Operating Margin18.3 %17.6 %15.7 %15.3 %16.7 %
Depreciation5 4 6 4 19 
Amortization— 1 — 1 2 
Other non-operating expense, excluding interest income(1)— — (1)(2)
EBITDA87 89 79 74 329 
Share-based Compensation1 — 1 2 4 
Restructuring & Realignment3 2 5 3 13 
Adjusted EBITDA91 91 85 79 346 
Revenue453 478 465 457 1,853 
Adjusted EBITDA Margin20.1 %19.0 %18.3 %17.3 %18.7 %
2022
Q1Q2Q3Q4Total
Operating Income59 61 77 61 258 
Operating Margin13.9 %14.2 %16.8 %13.4 %14.6 %
Depreciation5 4 4 4 17 
Amortization— 1 — 1 2 
Other non-operating expense, excluding interest income(1)— (1)— (2)
EBITDA63 66 80 66 275 
Share-based Compensation1 1 2 — 4 
Restructuring & Realignment1 2 1 9 13 
Adjusted EBITDA65 69 83 75 292 
Revenue425 429 458 455 1,767 
Adjusted EBITDA Margin15.3 %16.1 %18.1 %16.5 %16.5 %



Xylem Inc. Non-GAAP Reconciliation
EBITDA and Adjusted EBITDA by Quarter
Measurement and Control Solutions
($ Millions)
2023
Q1Q2Q3Q4Total
Operating Income20 26 27 40 113 
Operating Margin4.9 %6.3 %6.1 %8.5 %6.5 %
Depreciation7 9 8 8 32 
Amortization27 26 26 28 107 
Other non-operating expense, excluding interest income— — (1)(3)(4)
EBITDA54 61 60 73 248 
Share-based Compensation2 2 2 1 7 
Restructuring & Realignment5 2 6 5 18 
Special Charges2 — 1 1 4 
Loss/(Gain) from sale of business— — — 1 1 
Adjusted EBITDA63 65 69 81 278 
Revenue406 415 440 468 1,729 
Adjusted EBITDA Margin15.5 %15.7 %15.7 %17.3 %16.1 %
2022
Q1Q2Q3Q4Total
Operating Income(10)(5)(2)19 2 
Operating Margin(3.2)%(1.4)%(0.6)%5.0 %0.1 %
Loss/(Gain) from sale of business1 — — — 1 
Depreciation9 8 8 8 33 
Amortization25 26 27 26 104 
Other non-operating expense, excluding interest income— (1)(1)— (2)
EBITDA25 28 32 53 138 
Share-based Compensation1 2 2 1 6 
Restructuring & Realignment2 3 2 3 10 
Special Charges— 1 12 1 14 
Loss/(Gain) from sale of business(1)— — — (1)
Adjusted EBITDA27 34 48 58 167 
Revenue314 346 348 383 1,391 
Adjusted EBITDA Margin8.6 %9.8 %13.8 %15.1 %12.0 %















Xylem Inc. Non-GAAP Reconciliation
EBITDA and Adjusted EBITDA by Quarter
Integrated Solutions and Services
($ Millions)
2023
Q1Q2Q3Q4Total
Operating Income— (7)(3)18 8 
Operating MarginN/A(5.6)%(0.8)%5.6 %1.0 %
Depreciation— 8 30 27 65 
Amortization— 12 36 17 65 
EBITDA— 13 63 62 138 
Share-based Compensation— 3 3 1 7 
Restructuring & Realignment— 7 8 — 15 
Special Charges— 7 9 5 21 
Adjusted EBITDA— 30 83 68 181 
Revenue— 125 368 322 815 
Adjusted EBITDA MarginN/A24.0 %22.6 %21.1 %22.2 %

v3.24.0.1
Cover Page
Feb. 06, 2024
Cover [Abstract]  
Document Type 8-K
Document Period End Date Feb. 06, 2024
Entity Registrant Name XYLEM INC.
Entity Incorporation, State or Country Code IN
Entity File Number 001-35229
Entity Tax Identification Number 45-2080495
Entity Address, Address Line One 301 Water Street SE
Entity Address, City or Town Washington
Entity Address, State or Province DC
Entity Address, Postal Zip Code 20003
City Area Code 202
Local Phone Number 869-9150
Title of 12(b) Security Common Stock, par value $0.01 per share
Trading Symbol XYL
Security Exchange Name NYSE
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Entity Emerging Growth Company false
Entity Central Index Key 0001524472
Amendment Flag false
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