Xylem Reports Third Quarter 2021 Results
Xylem Inc. (NYSE: XYL), a leading global water technology company dedicated to solving the world’s most challenging water issues, today reported third quarter 2021 revenue of $1.27 billion. Revenues grew 4 percent on a reported basis, and 2 percent organically. Strong global demand was moderated by supply constraints slowing order-to-revenue conversion.
Third quarter adjusted earnings before interest, tax, depreciation and amortization (EBITDA) margin decreased 30 basis points to 17.9 percent. Inflation and strategic investments were partially offset by productivity, price realization and cost containment. Xylem generated net income of $114 million, or $0.63 per share, and adjusted net income of $116 million, or $0.63 per share, which excludes the impact of restructuring, realignment and special charges.
“Global demand for water solutions continues to be robust, across our business,” said Patrick Decker, Xylem’s president and CEO. “The team capitalized on that broad-based underlying demand, delivering strong growth in new orders and backlog in all segments. This positions us well to achieve our 2025 growth and strategic milestones, which we outlined at our investor day, last month.”
“The team has done an outstanding job managing inflationary effects with productivity and cost discipline, delivering solid margin and earnings performance,” continued Decker. “Nevertheless, we foresee the global supply challenges continuing – particularly the chip shortages being experienced across the technology sector. While we expect strong demand to continue, nearer term supply constraints have slowed order-to-revenue conversion more than expected, leading us to moderate our view of full-year revenues and, therefore, earnings.”
Updated Outlook
Xylem now expects full-year organic revenue growth to be in the range of 3 to 4 percent, which would be approximately $5.1 to $5.2 billion on a reported basis. This represents a decrease from the Company’s previous full-year organic revenue guidance of 6 to 8 percent, or $5.3 to $5.4 billion on a reported basis. Full-year adjusted earnings per share is now expected to be in the range of $2.40 to $2.50, from $2.55 to $2.70. Full-year free cash flow conversion outlook remains unchanged at 80 to 90 percent. The revised guidance reflects the impact of increased supply chain challenges, partially offset by strong cost discipline.
Third Quarter Segment Results
Water Infrastructure
Xylem’s Water Infrastructure segment consists of its portfolio of businesses serving wastewater transport and treatment, clean water delivery, and dewatering.
Third quarter 2021 revenue was $547 million, up 4 percent on a reported basis, and up 2 percent organically, compared with the same period in 2020. Strong growth in industrial end markets from broad pandemic recovery and demand in Emerging Markets offset some softness in the utility markets due to timing delays caused by supply chain disruptions. Third quarter adjusted EBITDA margin was 21.2 percent, up 100 basis points versus the prior year period. Reported operating income for the segment was $101 million and adjusted operating income, which excludes $1 million of restructuring and realignment costs, was $102 million. The segment reported operating margin was 18.5 percent, up 150 basis points versus the prior year period. Adjusted operating margin rose 10 basis points to 18.6 percent. Strong productivity savings and price realization offset inflation and supply chain constraints.Applied Water
Xylem’s Applied Water segment consists of its portfolio of businesses in industrial, commercial building, and residential applications.
Third quarter 2021 revenue was $400 million, up 10 percent on a reported basis, and up 8 percent organically, compared with the same period in 2020. Broad reopening activity drove strong demand in industrial and commercial end markets compared to COVID-19 challenges in the prior year. Third quarter adjusted EBITDA margin was 17.0 percent, down 60 basis points from the prior year period. Reported operating income for the segment was $60 million and adjusted operating income, which excludes $2 million of restructuring and realignment costs, was $62 million. The segment reported operating margin was 15.0 percent, down 40 basis points versus the prior year period. Adjusted operating margin decreased 40 basis points to 15.5 percent. Inflation, supply chain disruption and investments more than offset productivity benefits and price realization.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 2021 revenue was $318 million, down 4 percent on a reported basis, and down 5 percent organically, compared with the same period in 2020. Soft performance in the business was driven by chip supply shortages impacting our smart metering business, partially offset by demand in water quality testing applications and pipeline assessment services businesses. Third quarter adjusted EBITDA margin was 14.2 percent, down 60 basis points from the prior year period. Reported operating income for the segment was $7 million and adjusted operating income, with $1 million restructuring and realignment income in the quarter, was $6 million. The segment reported operating margin was 2.2 percent, up 2,090 basis points versus the prior year period. Adjusted operating margin decreased 170 basis points to 1.9 percent. Volume declines from component shortages and higher inflation offset productivity and price realization.Supplemental information on Xylem’s third quarter 2021 earnings and reconciliations for certain non-GAAP items are posted at www.xylem.com/investors.
About Xylem
Xylem (XYL) is a leading global water technology company committed to solving critical water and infrastructure challenges with innovation. Our more than 16,000 diverse employees delivered revenue of $4.88 billion in 2020. 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.
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,” “goal,” “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; 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. Additionally, many of these risks and uncertainties are, and may continue to be, amplified by the ongoing coronavirus (“COVID-19”) pandemic. 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: overall industry and economic conditions, including industrial, governmental and private sector spending and the strength of the residential and commercial real estate markets; geopolitical, regulatory, economic and other risks associated with international operations; continued uncertainty around the COVID-19 pandemic’s magnitude, duration and impacts on our business, operations, growth, and financial condition, as well as uncertainty around approved vaccines and the pace of recovery when the pandemic subsides; actual or potential other epidemics, pandemics or global health crises; availability, shortage or delays in receiving products, parts, electronic components and raw materials from our supply chain; manufacturing and operating cost increases due to inflation, prevailing price changes, tariffs and other factors; fluctuations in foreign currency exchange rates; disruption, competition and 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; availability, regulation and interference with radio spectrum used by some of our products; our ability to retain and attract senior management and other key talent; uncertainty related to restructuring and realignment actions and related charges and savings; our ability to continue strategic investments for growth; our ability to successfully identify, execute and integrate acquisitions; risks relating to products, including defects, security, warranty and liability claims, and recalls; difficulty predicting our financial results, including uncertainties due to the nature of our short- and long-cycle businesses; volatility in our results due to weather conditions, including the effects of climate change; our ability to borrow or refinance our existing indebtedness and 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, 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; and other factors set forth under “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2020 ("2020 Annual Report") and in subsequent filings we make with the Securities and Exchange Commission (“SEC”).
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 periods ended September 30,
2021
2020
2021
2020
Revenue
$
1,265
$
1,220
$
3,872
$
3,503
Cost of revenue
793
759
2,390
2,199
Gross profit
472
461
1,482
1,304
Selling, general and administrative expenses
273
266
878
851
Research and development expenses
49
45
152
138
Restructuring and asset impairment (recoveries) charges
(2
)
19
7
69
Goodwill impairment charge
—
58
—
58
Operating income
152
73
445
188
Interest expense
21
22
63
56
Other non-operating income (expense), net
2
(1
)
1
(5
)
Gain from sale of business
—
—
2
—
Income before taxes
133
50
385
127
Income tax expense
19
13
71
21
Net income
$
114
$
37
$
314
$
106
Earnings per share:
Basic
$
0.63
$
0.20
$
1.74
$
0.59
Diluted
$
0.63
$
0.20
$
1.73
$
0.58
Weighted average number of shares:
Basic
180.2
180.0
180.2
180.1
Diluted
181.6
181.0
181.5
181.0
XYLEM INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(in millions, except per share amounts)
September 30,
2021
December 31,
2020
ASSETS
Current assets:
Cash and cash equivalents
$
1,255
$
1,875
Receivables, less allowances for discounts, returns and credit losses of $43 and $46 in 2021 and 2020, respectively
973
923
Inventories
679
558
Prepaid and other current assets
150
167
Total current assets
3,057
3,523
Property, plant and equipment, net
618
657
Goodwill
2,816
2,854
Other intangible assets, net
1,037
1,093
Other non-current assets
623
623
Total assets
$
8,151
$
8,750
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable
$
577
$
569
Accrued and other current liabilities
737
787
Short-term borrowings and current maturities of long-term debt
—
600
Total current liabilities
1,314
1,956
Long-term debt
2,455
2,484
Accrued post-retirement benefits
492
519
Deferred income tax liabilities
270
242
Other non-current accrued liabilities
518
573
Total liabilities
5,049
5,774
Stockholders’ equity:
Common Stock – par value $0.01 per share:
Authorized 750.0 shares, issued 195.5 shares and 194.9 shares in 2021 and 2020, respectively
2
2
Capital in excess of par value
2,077
2,037
Retained earnings
2,092
1,930
Treasury stock – at cost 15.2 shares and 14.5 shares in 2021 and 2020, respectively
(656
)
(588
)
Accumulated other comprehensive loss
(422
)
(413
)
Total stockholders’ equity
3,093
2,968
Non-controlling interests
9
8
Total equity
3,102
2,976
Total liabilities and stockholders’ equity
$
8,151
$
8,750
XYLEM INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(in millions)
For the nine months ended September 30,
2021
2020
Operating Activities
Net income
$
314
$
106
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation
90
88
Amortization
96
101
Share-based compensation
25
19
Restructuring and asset impairment charges
7
69
Goodwill impairment charge
—
58
Gain from sale of business
(2
)
—
Other, net
3
33
Payments for restructuring
(21
)
(25
)
Changes in assets and liabilities (net of acquisitions):
Changes in receivables
(78
)
43
Changes in inventories
(135
)
(48
)
Changes in accounts payable
19
(91
)
Changes in accrued taxes
—
(5
)
Other, net
—
106
Net Cash – Operating activities
318
454
Investing Activities
Capital expenditures
(127
)
(136
)
Proceeds from sale of business
2
—
Proceeds from the sale of property, plant and equipment
1
1
Cash paid for investments
—
(200
)
Other, net
11
9
Net Cash – Investing activities
(113
)
(326
)
Financing Activities
Short-term debt issued, net
—
359
Short-term debt repaid
—
(600
)
Long-term debt issued, net
—
985
Long-term debt repaid
(600
)
—
Repurchase of common stock
(68
)
(61
)
Proceeds from exercise of employee stock options
15
10
Dividends paid
(152
)
(142
)
Other, net
(1
)
(1
)
Net Cash – Financing activities
(806
)
550
Effect of exchange rate changes on cash
(19
)
—
Net change in cash and cash equivalents
(620
)
678
Cash and cash equivalents at beginning of year
1,875
724
Cash and cash equivalents at end of period
$
1,255
$
1,402
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest
$
83
$
46
Income taxes (net of refunds received)
$
71
$
27
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" reflects 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, 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, 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 pension costs. “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
2021 v. 2020
2021 v. 2020
FX Impact
Adj. 2021 v. 2020
Adj. 2021 v. 2020
2021
2020
Nine Months Ended September 30 Xylem Inc.
4,716
3,739
977
26%
10
(147
)
840
22
%
22%
Water Infrastructure1,873
1,670
203
12%
-
(80
)
123
7
%
7%
Applied Water1,409
1,073
336
31%
-
(40
)
296
28
%
28%
Measurement & Control Solutions1,434
996
438
44%
10
(27
)
421
42
%
41%
Quarter Ended September 30 Xylem Inc.1,518
1,246
272
22%
2
(24
)
250
20
%
20%
Water Infrastructure623
558
65
12%
-
(12
)
53
9
%
9%
Applied Water446
375
71
19%
-
(7
)
64
17
%
17%
Measurement & Control Solutions449
313
136
43%
2
(5
)
133
42
%
42%
Quarter Ended June 30 Xylem Inc.1,660
1,232
428
35%
1
(74
)
355
29
%
29%
Water Infrastructure639
598
41
7%
-
(41
)
-
0
%
0%
Applied Water486
326
160
49%
-
(20
)
140
43
%
43%
Measurement & Control Solutions535
308
227
74%
1
(13
)
215
70
%
69%
Quarter Ended March 31 Xylem Inc.1,538
1,261
277
22%
7
(49
)
235
19
%
18%
Water Infrastructure611
514
97
19%
-
(27
)
70
14
%
14%
Applied Water477
372
105
28%
-
(13
)
92
25
%
25%
Measurement & Control Solutions450
375
75
20%
7
(9
)
73
19
%
18%
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
2021 v. 2020
2021 v. 2020
FX Impact
Adj. 2021 v. 2020
Adj. 2021 v. 2020
2021
2020
Nine Months Ended September 30 Xylem Inc.
3,872
3,503
369
11%
7
(130
)
246
7
%
7%
Water Infrastructure1,625
1,463
162
11%
-
(70
)
92
6
%
6%
Applied Water1,207
1,039
168
16%
-
(36
)
132
13
%
13%
Measurement & Control Solutions1,040
1,001
39
4%
7
(24
)
22
2
%
1%
Quarter Ended September 30 Xylem Inc.1,265
1,220
45
4%
2
(20
)
27
2
%
2%
Water Infrastructure547
524
23
4%
-
(10
)
13
2
%
2%
Applied Water400
364
36
10%
-
(7
)
29
8
%
8%
Measurement & Control Solutions318
332
(14
)
(4%)
2
(3
)
(15
)
(5
%)
(5%)
Quarter Ended June 30 Xylem Inc.1,351
1,160
191
16%
3
(66
)
128
11
%
11%
Water Infrastructure569
501
68
14%
-
(36
)
32
6
%
6%
Applied Water414
337
77
23%
-
(18
)
59
18
%
18%
Measurement & Control Solutions368
322
46
14%
3
(12
)
37
11
%
11%
Quarter Ended March 31 Xylem Inc.1,256
1,123
133
12%
2
(44
)
91
8
%
8%
Water Infrastructure509
438
71
16%
-
(24
)
47
11
%
11%
Applied Water393
338
55
16%
-
(11
)
44
13
%
13%
Measurement & Control Solutions354
347
7
2%
2
(9
)
-
0
%
(1%)
Xylem Inc. Non-GAAP Reconciliation Adjusted Operating Income ($ Millions)
Q1
Q2
Q3
YTD
2021
2020
2021
2020
2021
2020
2021
2020
Total Revenue • Total Xylem1,256
1,123
1,351
1,160
1,265
1,220
3,872
3,503
• Water Infrastructure
509
438
569
501
547
524
1,625
1,463
• Applied Water
393
338
414
337
400
364
1,207
1,039
• Measurement & Control Solutions
354
347
368
322
318
332
1,040
1,001
Operating Income (Loss) • Total Xylem
133
61
160
54
152
73
445
188
• Water Infrastructure
71
39
93
73
101
89
265
201
• Applied Water
66
47
64
41
60
56
190
144
• Measurement & Control Solutions
9
(12
)
13
(46
)
7
(62
)
29
(120
)
• Total Segments146
74
170
68
168
83
484
225
Operating Margin • Total Xylem
10.6
%
5.4
%
11.8
%
4.7
%
12.0
%
6.0
%
11.5
%
5.4
%
• Water Infrastructure13.9
%
8.9
%
16.3
%
14.6
%
18.5
%
17.0
%
16.3
%
13.7
%
• Applied Water16.8
%
13.9
%
15.5
%
12.2
%
15.0
%
15.4
%
15.7
%
13.9
%
• Measurement & Control Solutions2.5
%
(3.5
%)
3.5
%
(14.3
%)
2.2
%
(18.7
%)
2.8
%
(12.0
%)
• Total Segments11.6
%
6.6
%
12.6
%
5.9
%
13.3
%
6.8
%
12.5
%
6.4
%
Special Charges • Total Xylem2
-
-
11
1
70
3
81
• Water Infrastructure
-
-
-
-
-
-
-
-
• Applied Water
1
-
-
-
-
-
1
-
• Measurement & Control Solutions
-
-
-
10
-
69
-
79
• Total Segments
1
-
-
10
-
69
1
79
Restructuring & Realignment Costs • Total Xylem
8
9
6
43
2
15
16
67
• Water Infrastructure
5
5
4
8
1
8
10
21
• Applied Water
1
2
2
4
2
2
5
8
• Measurement & Control Solutions
2
2
-
31
(1
)
5
1
38
• Total Segments
8
9
6
43
2
15
16
67
Adjusted Operating Income (Loss) • Total Xylem
143
70
166
108
155
158
464
336
• Water Infrastructure
76
44
97
81
102
97
275
222
• Applied Water
68
49
66
45
62
58
196
152
• Measurement & Control Solutions
11
(10
)
13
(5
)
6
12
30
(3
)
• Total Segments155
83
176
121
170
167
501
371
Adjusted Operating Margin • Total Xylem
11.4
%
6.2
%
12.3
%
9.3
%
12.3
%
13.0
%
12.0
%
9.6
%
• Water Infrastructure14.9
%
10.0
%
17.0
%
16.2
%
18.6
%
18.5
%
16.9
%
15.2
%
• Applied Water17.3
%
14.5
%
15.9
%
13.4
%
15.5
%
15.9
%
16.2
%
14.6
%
• Measurement & Control Solutions3.1
%
(2.9
%)
3.5
%
(1.6
%)
1.9
%
3.6
%
2.9
%
(0.3
%)
• Total Segments12.3
%
7.4
%
13.0
%
10.4
%
13.4
%
13.7
%
12.9
%
10.6
%
Xylem Inc. Non-GAAP Reconciliation Adjusted Diluted EPS ($ Millions, except per share amounts)Q3 2021
Q3 2020
As Reported
Adjustments
Adjusted
As Reported
Adjustments
Adjusted
Total Revenue
1,265
-
1,265
1,220
-
1,220
Operating Income
152
3
a
155
73
85
a
158
Operating Margin
12.0
%
12.3
%
6.0
%
13.0
%
Interest Expense
(21
)
-
(21
)
(22
)
-
(22
)
Other Non-Operating Income (Expense)
2
1
b
3
(1
)
1
b
-
Gain/(Loss) From Sale of Business
-
-
-
-
-
-
Income before Taxes
133
4
137
50
86
136
Provision for Income Taxes
(19
)
(2
)
c
(21
)
(13
)
(9
)
c
(22
)
Net Income Attributable to Xylem
114
2
116
37
77
114
Diluted Shares
181.6
181.6
181.0
181.0
Diluted EPS
$
0.63
$
-
$
0.63
$
0.20
$
0.42
$
0.62
Year-over-year currency translation impact on current year diluted EPS
$
0.01
$
(0.01
)
$
-
Diluted EPS at Constant Currency
$
0.62
$
0.01
$
0.63
Q3 YTD 2021
Q3 YTD 2020
As Reported
Adjustments
Adjusted
As Reported
Adjustments
Adjusted
Total Revenue
3,872
-
3,872
3,503
-
3,503
Operating Income
445
19
a
464
188
148
a
336
Operating Margin
11.5
%
12.0
%
5.4
%
9.6
%
Interest Expense
(63
)
-
(63
)
(56
)
-
(56
)
Other Non-Operating Income (Expense)
1
5
b
6
(5
)
4
b
(1
)
Gain/(Loss) From Sale of Business
2
(2
)
-
-
-
-
Income before Taxes
385
22
407
127
152
279
Provision for Income Taxes
(71
)
1
c
(70
)
(21
)
(29
)
c
(50
)
Net Income Attributable to Xylem
314
23
337
106
123
229
Diluted Shares
181.5
181.5
181.0
181.0
Diluted EPS
$
1.73
$
0.13
$
1.86
$
0.58
$
0.67
$
1.25
Year-over-year currency translation impact on current year diluted EPS
$
0.10
$
0.01
$
0.11
Diluted EPS at Constant Currency
$
1.63
$
0.12
$
1.75
a
Quarter-to-date: Restructuring & realignment costs of $2 million in 2021 and $15 million in 2020, as well as special charges of $1 million in 2021 and $70 million ($69 million of intangible asset and goodwill impairment and $1 million of other charges) in 2020.
Year-to-date: Restructuring & realignment costs of $16 million and $67 million in 2021 and 2020, respectively; special charges of $3 million ($1 million of intangible asset impairment charges and $2 million of other charges) and $81 million of special charges in 2020 ($79 million of intangible asset and goodwill impairment charges and $2 million of other charges).
b
Quarter-to-date: Special non-operating charges consist of $1 million, in each of 2021 and 2020, for pension costs related to the UK pension plan that is going to be part of a buyout.
Year-to-date: Special non-operating charges consist of $5 million in 2021 and $4 million in 2020, for pension costs related to the UK pension plan that is going to be part of a buyout.
c
Quarter-to-date: Net tax impact on restructuring & realignment costs of $1 million in 2021 and $3 million in 2020; and $1 million of negative adjustment from tax related special benefits in 2021 and $6 million net tax impact on special charges in 2020.
Year-to-date: Net tax impact on restructuring & realignment costs of $4 million and $15 million in 2021 and 2020, respectively; $1 million and $9 million of net tax impact on special charges in 2021 and 2020, respectively; and $6 million of positive adjustment from tax related special charges in 2021 and $5 million of negative adjustment from tax related special benefits in 2020, respectively.
Xylem Inc. Non-GAAP Reconciliation EBITDA and Adjusted EBITDA by Quarter ($ Millions)2021
Q1
Q2
Q3
Q4
Total
Net Income87
113
114
314
Income Tax Expense
27
25
19
71
Interest Expense (Income), net
19
19
20
58
Depreciation
30
29
31
90
Amortization
32
33
31
96
EBITDA
195
219
215
-
629
Share-based Compensation
9
8
8
25
Restructuring & Realignment
8
6
2
16
Loss/(Gain) from sale of business
-
(2
)
-
(2
)
Special Charges3
3
2
8
Adjusted EBITDA
215
234
227
-
676
Revenue
1,256
1,351
1,265
3,872
Adjusted EBITDA Margin
17.1
%
17.3
%
17.9
%
17.5
%
2020
Q1
Q2
Q3
Q4
Total
Net Income38
31
37
148
254
Income Tax Expense
4
4
13
10
31
Interest Expense (Income), net
14
16
20
20
70
Depreciation
29
29
30
29
117
Amortization
35
33
33
33
134
EBITDA
120
113
133
240
606
Share-based Compensation
8
8
3
7
26
Restructuring & Realignment
9
43
15
10
77
Special Charges
1
13
71
1
86
Adjusted EBITDA
138
177
222
258
795
Revenue
1,123
1,160
1,220
1,373
4,876
Adjusted EBITDA Margin
12.3
%
15.3
%
18.2
%
18.8
%
16.3
%
Xylem Inc. Non-GAAP Reconciliation EBITDA and Adjusted EBITDA by Quarter ($ Millions) Water Infrastructure
2021
Q1
Q2
Q3
Q4
Total
Pre-Tax Income70
92
102
264
Interest Expense (Income), net
(1
)
(1
)
-
(2
)
Depreciation11
11
11
33
Amortization
2
2
1
5
EBITDA
82
104
114
-
300
Share-based Compensation
1
-
1
2
Restructuring & Realignment
5
4
1
10
Adjusted EBITDA
88
108
116
-
312
Revenue
509
569
547
1,625
Adjusted EBITDA Margin
17.3
%
19.0
%
21.2
%
19.2
%
2020
Q1
Q2
Q3
Q4
Total
Pre-Tax Income37
71
85
116
309
Interest Expense (Income), net
-
(1
)
-
-
(1
)
Depreciation11
11
11
11
44
Amortization
4
5
2
2
13
EBITDA
52
86
98
129
365
Share-based Compensation
-
1
-
1
2
Restructuring & Realignment
5
8
8
7
28
Adjusted EBITDA
57
95
106
137
395
Revenue
438
501
524
616
2,079
Adjusted EBITDA Margin
13.0
%
19.0
%
20.2
%
22.2
%
19.0
%
Xylem Inc. Non-GAAP Reconciliation EBITDA and Adjusted EBITDA by Quarter ($ Millions) Applied Water2021
Q1
Q2
Q3
Q4
Total
Pre-Tax Income66
65
60
191
Interest Expense (Income), net
-
-
-
-
Depreciation
5
5
5
15
Amortization
1
1
-
2
EBITDA
72
71
65
-
208
Share-based Compensation
1
1
1
3
Restructuring & Realignment
1
2
2
5
Loss/(Gain) from sale of business
-
(2
)
-
(2
)
Special Charges1
-
-
1
Adjusted EBITDA
75
72
68
-
215
Revenue
393
414
400
1,207
Adjusted EBITDA Margin
19.1
%
17.4
%
17.0
%
17.8
%
2020
Q1
Q2
Q3
Q4
Total
Pre-Tax Income47
42
55
60
204
Interest Expense (Income), net
-
-
-
-
-
Depreciation
5
5
6
5
21
Amortization
1
-
1
1
3
EBITDA
53
47
62
66
228
Share-based Compensation
1
1
-
1
3
Restructuring & Realignment
2
4
2
1
9
Adjusted EBITDA
56
52
64
68
240
Revenue
338
337
364
395
1,434
Adjusted EBITDA Margin
16.6
%
15.4
%
17.6
%
17.2
%
16.7
%
Xylem Inc. Non-GAAP Reconciliation EBITDA and Adjusted EBITDA by Quarter ($ Millions) Measurement & Control Solutions2021
Q1
Q2
Q3
Q4
Total
Pre-Tax Income16
12
7
35
Interest Expense (Income), net
-
-
-
-
Depreciation
9
10
11
30
Amortization
27
27
27
81
EBITDA
52
49
45
-
146
Share-based Compensation
1
2
1
4
Restructuring & Realignment
2
-
(1
)
1
Adjusted EBITDA
55
51
45
-
151
Revenue
354
368
318
1,040
Adjusted EBITDA Margin
15.5
%
13.9
%
14.2
%
14.5
%
2020
Q1
Q2
Q3
Q4
Total
Pre-Tax (Loss) Income(13
)
(46
)
(62
)
14
(107
)
Interest Expense (Income), net-
-
-
-
-
Depreciation
9
8
9
9
35
Amortization
27
26
27
27
107
EBITDA
23
(12
)
(26
)
50
35
Share-based Compensation
2
1
1
1
5
Restructuring & Realignment
2
31
5
2
40
Special Charges
-
10
69
-
79
Adjusted EBITDA
27
30
49
53
159
Revenue
347
322
332
362
1,363
Adjusted EBITDA Margin
7.8
%
9.3
%
14.8
%
14.6
%
11.7
%
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