- 29% organic orders growth on broad underlying demand across
segments
- Revenue growth 16% on a reported basis, 11%
organically
- Adjusted EBITDA margin of 17.3%, up 200 basis points; net
income as a percentage of revenue of 8.4%, up 570 basis
points
- Reported net income of $113 million or $0.62 per share;
adjusted net income of $119 million or $0.66 per share
- Raises full-year organic revenue guidance to a range of 6%
to 8%, and raises mid-point of earnings per share guidance
Xylem Inc. (NYSE: XYL), a leading global water technology
company dedicated to solving the world’s most challenging water
issues, today reported second quarter 2021 revenue of $1.35
billion. Revenues grew 16 percent on a reported basis, and 11
percent organically, reflecting strong underlying demand across all
segments.
Second quarter adjusted earnings before interest, tax,
depreciation and amortization (EBITDA) margin grew 200 basis points
to 17.3 percent. The margin expansion was driven by productivity,
mix and volume leverage from strong underlying demand. Xylem
generated net income of $113 million, or $0.62 per share, and
adjusted net income of $119 million, or $0.66 per share, which
excludes the impact of restructuring, realignment and special
charges.
“Our team capitalized on robust global demand for our offerings,
driving revenues above expectations, and fuelling exceptional
growth in new orders and backlog,” said Patrick Decker, Xylem’s
president and CEO. “That commercial momentum puts us in a strong
position for the second half and beyond, as we continue to invest
in sustainable growth. We expect the team to build on continuing
market recovery, giving us confidence in lifting full-year
guidance.”
“During the quarter we also reported progress toward our 2025
sustainability goals – including moving major facilities onto
renewable energy, and helping customers recycle more than a
trillion gallons of water,” continued Decker. “The report
demonstrates the strong link between our business and
sustainability strategies. We partner with customers to provide
more resilient infrastructure, drive affordability, and create a
more sustainable water sector. That’s our purpose and our business.
As climate change drives water challenges in communities around the
world, we intend to be part of the solution.” (Download Xylem’s
2020 sustainability report.)
Updated Outlook
Xylem now expects full-year organic revenue growth to be in the
range of 6 to 8 percent, and 9 to 11 percent on a reported basis.
This represents an increase from the Company’s previous full-year
organic revenue guidance of 5 to 7 percent, and 8 to 10 percent on
a reported basis. Full-year adjusted earnings per share is now
expected to be in the range of $2.55 to $2.70. The increased
guidance reflects commercial momentum from the first half, as well
as continuing demand and price realization in the second half,
partially offset by incremental inflation and supply chain
challenges.
Second 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.
- Second quarter 2021 revenue was $569 million, up 14 percent on
a reported basis, and up 6 percent organically, compared with the
same period in 2020. Modest growth in utilities was driven by opex
demand in Western Europe and the U.S. Industrial end markets were
up double-digits driven largely by Emerging Markets mining
demand.
- Second quarter adjusted EBITDA margin was 19 percent, flat
versus the prior year period. Reported operating income for the
segment was $93 million and adjusted operating income, which
excludes $4 million of restructuring and realignment costs, was $97
million. The segment reported operating margin was 16.3 percent, up
170 basis points versus the prior year period. Adjusted operating
margin rose 80 basis points to 17 percent. Strong productivity
savings and volume offset inflation and investments.
Applied Water
Xylem’s Applied Water segment consists of its portfolio of
businesses in industrial, commercial building, and residential
applications.
- Second quarter 2021 revenue was $414 million, up 23 percent on
a reported basis, and up 18 percent organically, compared with the
same period in 2020. Growth was driven by strong demand across
industrial, residential and commercial end markets driven by broad
recovery from COVID challenges in the prior year.
- Second quarter adjusted EBITDA margin was 17.4 percent, up 200
basis points from the prior year period. Reported operating income
for the segment was $64 million and adjusted operating income,
which excludes $2 million of restructuring and realignment costs,
was $66 million. The segment reported operating margin was 15.5
percent, up 330 basis points versus the prior year period. Adjusted
operating margin rose 250 basis points to 15.9 percent. Strong
volume leverage and productivity more than offset inflation.
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.
- Second quarter 2021 revenue was $368 million, up 14 percent on
a reported basis, and up 11 percent organically, compared with the
same period in 2020. Growth was driven by volume in water
applications from large metrology contract deployments, and by
strong demand in water quality testing applications globally.
- Second quarter adjusted EBITDA margin was 13.9 percent, up 460
basis points from the prior year period. Reported operating income
for the segment was $13 million and adjusted operating income, with
no restructuring and realignment costs in the quarter, was $13
million. The segment reported operating margin was 3.5 percent, up
1780 basis points versus the prior year period. Adjusted operating
margin rose 510 basis points to 3.5 percent. Strong productivity
savings, favorable mix, and volume leverage more than offset
inflation and investments.
Supplemental information on Xylem’s second 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," “project,”
“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;
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
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; 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 of products, parts,
electronic components and raw materials from our supply chain;
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; 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
Six Months
For the period ended June 30,
2021
2020
2021
2020
Revenue
$
1,351
$
1,160
$
2,607
$
2,283
Cost of revenue
831
726
1,597
1,440
Gross profit
520
434
1,010
843
Selling, general and administrative
expenses
304
288
605
585
Research and development expenses
53
44
103
93
Restructuring and asset impairment
charges
3
48
9
50
Operating income
160
54
293
115
Interest expense
21
18
42
34
Other non-operating expense, net
(3
)
(1
)
(1
)
(4
)
Gain from sale of business
2
—
2
—
Income before taxes
138
35
252
77
Income tax expense
25
4
52
8
Net income
$
113
$
31
$
200
$
69
Earnings per share:
Basic
$
0.63
$
0.17
$
1.11
$
0.38
Diluted
$
0.62
$
0.17
$
1.10
$
0.38
Weighted average number of shares:
Basic
180.1
180.0
180.2
180.1
Diluted
181.3
180.6
181.4
181.0
XYLEM INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in millions, except per share
amounts)
June 30, 2021
December 31, 2020
ASSETS
Current assets:
Cash and cash equivalents
$
1,840
$
1,875
Receivables, less allowances for
discounts, returns and credit losses of $41 and $46 in 2021 and
2020, respectively
975
923
Inventories
642
558
Prepaid and other current assets
166
167
Total current assets
3,623
3,523
Property, plant and equipment, net
626
657
Goodwill
2,841
2,854
Other intangible assets, net
1,058
1,093
Other non-current assets
637
623
Total assets
$
8,785
$
8,750
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable
$
599
$
569
Accrued and other current liabilities
760
787
Short-term borrowings and current
maturities of long-term debt
600
600
Total current liabilities
1,959
1,956
Long-term debt
2,466
2,484
Accrued post-retirement benefits
501
519
Deferred income tax liabilities
264
242
Other non-current accrued liabilities
546
573
Total liabilities
5,736
5,774
Stockholders’ equity:
Common Stock – par value $0.01 per
share:
Authorized 750.0 shares, issued 195.3
shares and 194.9 shares in 2021 and 2020, respectively
2
2
Capital in excess of par value
2,063
2,037
Retained earnings
2,029
1,930
Treasury stock – at cost 15.2 shares and
14.5 shares in 2021 and 2020, respectively
(656
)
(588
)
Accumulated other comprehensive loss
(398
)
(413
)
Total stockholders’ equity
3,040
2,968
Non-controlling interests
9
8
Total equity
3,049
2,976
Total liabilities and stockholders’
equity
$
8,785
$
8,750
XYLEM INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS (Unaudited)
(in millions)
For the six months ended June
30,
2021
2020
Operating Activities
Net income
$
200
$
69
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation
59
58
Amortization
65
68
Share-based compensation
17
16
Restructuring and asset impairment
charges
9
50
Gain from sale of business
(2
)
—
Other, net
6
18
Payments for restructuring
(18
)
(12
)
Changes in assets and liabilities (net of
acquisitions):
Changes in receivables
(66
)
48
Changes in inventories
(89
)
(63
)
Changes in accounts payable
36
(86
)
Other, net
(11
)
13
Net Cash – Operating activities
206
179
Investing Activities
Capital expenditures
(80
)
(95
)
Proceeds from sale of business
2
—
Other, net
9
7
Net Cash – Investing activities
(69
)
(88
)
Financing Activities
Short-term debt issued, net
—
359
Short-term debt repaid
—
(422
)
Long-term debt issued, net
—
987
Repurchase of common stock
(68
)
(60
)
Proceeds from exercise of employee stock
options
9
5
Dividends paid
(102
)
(95
)
Other, net
(1
)
—
Net Cash – Financing activities
(162
)
774
Effect of exchange rate changes on
cash
(10
)
(12
)
Net change in cash and cash
equivalents
(35
)
853
Cash and cash equivalents at beginning of
year
1,875
724
Cash and cash equivalents at end of
period
$
1,840
$
1,577
Supplemental disclosure of cash flow
information:
Cash paid during the period for:
Interest
$
58
$
45
Income taxes (net of refunds received)
$
60
$
11
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
Six Months Ended June 30 Xylem Inc.
3,198
2,493
705
28%
8
(123)
590
24%
23%
Water Infrastructure
1,250
1,112
138
12%
-
(68)
70
6%
6%
Applied Water
963
698
265
38%
-
(33)
232
33%
33%
Measurement & Control Solutions
985
683
302
44%
8
(22)
288
42%
41%
Quarter Ended June 30 Xylem Inc.
1,660
1,232
428
35%
1
(74)
355
29%
29%
Water Infrastructure
639
598
41
7%
-
(41)
-
0%
0%
Applied Water
486
326
160
49%
-
(20)
140
43%
43%
Measurement & Control Solutions
535
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 Infrastructure
611
514
97
19%
-
(27)
70
14%
14%
Applied Water
477
372
105
28%
-
(13)
92
25%
25%
Measurement & Control Solutions
450
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
Six Months Ended June 30 Xylem Inc.
2,607
2,283
324
14%
5
(110)
219
10%
9%
Water Infrastructure
1,078
939
139
15%
-
(60)
79
8%
8%
Applied Water
807
675
132
20%
-
(29)
103
15%
15%
Measurement & Control Solutions
722
669
53
8%
5
(21)
37
6%
5%
Quarter Ended June 30 Xylem Inc.
1,351
1,160
191
16%
3
(66)
128
11%
11%
Water Infrastructure
569
501
68
14%
-
(36)
32
6%
6%
Applied Water
414
337
77
23%
-
(18)
59
18%
18%
Measurement & Control Solutions
368
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 Infrastructure
509
438
71
16%
-
(24)
47
11%
11%
Applied Water
393
338
55
16%
-
(11)
44
13%
13%
Measurement & Control Solutions
354
347
7
2%
2
(9)
-
0%
(1%)
Xylem Inc. Non-GAAP Reconciliation Adjusted Operating Income ($
Millions)
Q1
Q2
YTD
2021
2020
2021
2020
2021
2020
Total Revenue • Total Xylem
1,256
1,123
1,351
1,160
2,607
2,283
• Water Infrastructure
509
438
569
501
1,078
939
• Applied Water
393
338
414
337
807
675
• Measurement & Control Solutions
354
347
368
322
722
669
Operating Income (Loss) • Total Xylem
133
61
160
54
293
115
• Water Infrastructure
71
39
93
73
164
112
• Applied Water
66
47
64
41
130
88
• Measurement & Control Solutions
9
(12
)
13
(46
)
22
(58
)
• Total Segments
146
74
170
68
316
142
Operating Margin • Total Xylem
10.6%
5.4
%
11.8%
4.7
%
11.2%
5.0
%
• Water Infrastructure
13.9%
8.9
%
16.3%
14.6
%
15.2%
11.9
%
• Applied Water
16.8%
13.9
%
15.5%
12.2
%
16.1%
13.0
%
• Measurement & Control Solutions
2.5%
(3.5
%)
3.5%
(14.3
%)
3.0%
(8.7
%)
• Total Segments
11.6%
6.6
%
12.6%
5.9
%
12.1%
6.2
%
Special Charges • Total Xylem
2
-
-
11
2
11
• Water Infrastructure
-
-
-
-
-
-
• Applied Water
1
-
-
-
1
-
• Measurement & Control Solutions
-
-
-
10
-
10
• Total Segments
1
-
-
10
1
10
Restructuring & Realignment Costs • Total Xylem
8
9
6
43
14
52
• Water Infrastructure
5
5
4
8
9
13
• Applied Water
1
2
2
4
3
6
• Measurement & Control Solutions
2
2
-
31
2
33
• Total Segments
8
9
6
43
14
52
Adjusted Operating Income (Loss) • Total Xylem
143
70
166
108
309
178
• Water Infrastructure
76
44
97
81
173
125
• Applied Water
68
49
66
45
134
94
• Measurement & Control Solutions
11
(10
)
13
(5
)
24
(15
)
• Total Segments
155
83
176
121
331
204
Adjusted Operating Margin • Total Xylem
11.4%
6.2
%
12.3%
9.3
%
11.9%
7.8
%
• Water Infrastructure
14.9%
10.0
%
17.0%
16.2
%
16.0%
13.3
%
• Applied Water
17.3%
14.5
%
15.9%
13.4
%
16.6%
13.9
%
• Measurement & Control Solutions
3.1%
(2.9
%)
3.5%
(1.6
%)
3.3%
(2.2
%)
• Total Segments
12.3%
7.4
%
13.0%
10.4
%
12.7%
8.9
%
Xylem Inc. Non-GAAP Reconciliation Adjusted Diluted EPS ($
Millions, except per share amounts)
Q2 2021
Q2 2020
As
Reported
Adjustments
Adjusted
As
Reported
Adjustments
Adjusted
Total Revenue
1,351
-
1,351
1,160
-
1,160
Operating Income
160
6
a
166
54
54
a
108
Operating Margin
11.8
%
12.3
%
4.7
%
9.3
%
Interest Expense
(21
)
-
(21
)
(18
)
-
(18
)
Other Non-Operating Income (Expense)
(3
)
3
b
-
(1
)
2
b
1
Gain/(Loss) From Sale of Business
2
(2
)
-
-
-
-
Income before Taxes
138
7
145
35
56
91
Provision for Income Taxes
(25
)
(1
)
c
(26
)
(4
)
(14
)
c
(18
)
Net Income Attributable to Xylem
113
6
119
31
42
73
Diluted Shares
181.3
181.3
180.6
180.6
Diluted EPS
$
0.62
$
0.04
$
0.66
$
0.17
$
0.23
$
0.40
Year-over-year currency translation impact on current year
diluted EPS
$
0.05
$
-
$
0.05
Diluted EPS at Constant Currency
$
0.57
$
0.04
$
0.61
Q2 YTD 2021
Q2 YTD 2020
As
Reported
Adjustments
Adjusted
As
Reported
Adjustments
Adjusted
Total Revenue
2,607
-
2,607
2,283
-
2,283
Operating Income
293
16
a
309
115
63
a
178
Operating Margin
11.2
%
11.9
%
5.0
%
7.8
%
Interest Expense
(42
)
-
(42
)
(34
)
-
(34
)
Other Non-Operating Income (Expense)
(1
)
4
b
3
(4
)
3
b
(1
)
Gain/(Loss) From Sale of Business
2
(2
)
-
-
-
-
Income before Taxes
252
18
270
77
66
143
Provision for Income Taxes
(52
)
3
c
(49
)
(8
)
(20
)
c
(28
)
Net Income Attributable to Xylem
200
21
221
69
46
115
Diluted Shares
181.4
181.4
181.0
181.0
Diluted EPS
$
1.10
$
0.13
$
1.23
$
0.38
$
0.25
$
0.63
Year-over-year currency translation impact on current year
diluted EPS
$
0.09
$
0.02
$
0.11
Diluted EPS at Constant Currency
$
1.01
$
0.11
$
1.12
a Quarter-to-date: Restructuring & realignment costs of $6
million in 2021 and $43 million in 2020, as well as special charges
of $11 million ($10 million of intangible asset impairment and $1
million of other charges) in 2020. Year-to-date: Restructuring
& realignment costs of $14 million and $52 million in 2021 and
2020, respectively; special charges of $2 million ($1 million of
intangible asset impairment charges and $1 million of other
charges) and $11 million of special charges in 2020 ($10 million of
intangible asset impairment charges and $1 million of other
charges). b Quarter-to-date: Special non-operating charges consist
of $3 million in 2021 and $2 million in 2020, of 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 $4
million in 2021 and $3 million in 2020, of 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 $10 million in 2020; and $1 million
of tax on special tax items in 2021 and $3 million of tax on
special tax items in 2020; $1 million positive adjustment in 2021
from tax related special charges and $1 million of negative
adjustment from tax related special benefits in 2020, respectively.
Year-to-date: Net tax impact on restructuring & realignment
costs of $3 million and $12 million in 2021 and 2020, respectively;
$1 million and $3 million of tax impact on special charges in 2021
and 2020, respectively; and $7 million of positive adjustment from
tax related special charges in 2021 and $5 million of negative
adjustment from tax related special benefits in 2020, respectively.
Xylem Inc. Non-GAAP Reconciliation Net Cash - Operating Activities
vs. Free Cash Flow ($ Millions)
Q1
Q2
Year-to-Date
2021
2020
2021
2020
2021
2020
Net Cash - Operating Activities
$(26
)
$(2
)
$232
$181
$206
$179
Capital Expenditures - PP&E
(22
)
(32
)
(25
)
(24
)
(47
)
(56
)
Capital Expenditures - Software
(17
)
(19
)
(16
)
(20
)
(33
)
(39
)
Capital Expenditures
(39
)
(51
)
(41
)
(44
)
(80
)
(95
)
Free Cash Flow
$(65
)
$(53
)
$191
$137
$126
$84
Net Income
87
38
113
31
200
69
Gain/(Loss) from sale of business
-
-
2
-
2
-
Restructuring & Realignment Charges - non-cash
impairment
(1
)
-
-
(17
)
(1
)
(17
)
Special Charges - non-cash impairment
(1
)
-
-
(10
)
(1
)
(10
)
Net Income, excluding gain on sale of businesses, non-cash
impairment charges and significant deferred tax items
$89
$38
$111
$58
$200
$96
Operating Cash Flow Conversion
(30
%)
(5
%)
205
%
584
%
103
%
259
%
Free Cash Flow Conversion
(73
%)
(139
%)
172
%
236
%
63
%
88
%
Xylem Inc. Non-GAAP Reconciliation EBITDA and Adjusted
EBITDA by Quarter ($ Millions)
2021
Q1
Q2
Q3
Q4
Total
Net Income
87
113
200
Income Tax Expense
27
25
52
Interest Expense (Income), net
19
19
38
Depreciation
30
29
59
Amortization
32
33
65
EBITDA
195
219
-
-
414
Share-based Compensation
9
8
17
Restructuring & Realignment
8
6
14
Loss/(Gain) from sale of business
-
(2
)
(2
)
Special Charges
3
3
6
Adjusted EBITDA
215
234
-
-
449
Revenue
1,256
1,351
2,607
Adjusted EBITDA Margin
17.1
%
17.3
%
17.2
%
2020
Q1
Q2
Q3
Q4
Total
Net Income
38
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 Income
70
92
162
Interest Expense (Income), net
(1
)
(1
)
(2
)
Depreciation
11
11
22
Amortization
2
2
4
EBITDA
82
104
-
-
186
Share-based Compensation
1
-
1
Restructuring & Realignment
5
4
9
Adjusted EBITDA
88
108
-
-
196
Revenue
509
569
1,078
Adjusted EBITDA Margin
17.3
%
19.0
%
18.2
%
2020
Q1
Q2
Q3
Q4
Total
Pre-Tax Income
37
71
85
116
309
Interest Expense (Income), net
-
(1
)
-
-
(1
)
Depreciation
11
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 Water
2021
Q1
Q2
Q3
Q4
Total
Pre-Tax Income
66
65
131
Interest Expense (Income), net
-
-
-
Depreciation
5
5
10
Amortization
1
1
2
EBITDA
72
71
-
-
143
Share-based Compensation
1
1
2
Restructuring & Realignment
1
2
3
Loss/(Gain) from sale of business
(2
)
(2
)
Special Charges
1
-
1
Adjusted EBITDA
75
72
-
-
147
Revenue
393
414
807
Adjusted EBITDA Margin
19.1
%
17.4
%
18.2
%
2020
Q1
Q2
Q3
Q4
Total
Pre-Tax Income
47
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 Solutions
2021
Q1
Q2
Q3
Q4
Total
Pre-Tax Income
16
12
28
Interest Expense (Income), net
-
-
-
Depreciation
9
10
19
Amortization
27
27
54
EBITDA
52
49
-
-
101
Share-based Compensation
1
2
3
Restructuring & Realignment
2
-
2
Adjusted EBITDA
55
51
-
-
106
Revenue
354
368
722
Adjusted EBITDA Margin
15.5
%
13.9
%
14.7
%
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
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210803005526/en/
Media Houston Spencer +1 (914) 323-5723
houston.spencer@xylem.com
Investors Matt Latino +1 (914) 323-5821
matthew.latino@xylem.com
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