Xylem Inc. reports second quarter 2016 earnings
-
Second quarter 2016 earnings per share (EPS) were
$0.39 , down five percent from a year ago; adjusted EPS were$0.48 , a 12-percent increase over the prior year period -
Second quarter 2016 revenue grew one percent to
$932 million ; growth was three percent in constant currency in the quarter - Reported operating margin grew 40 basis points to 11.7 percent and adjusted operating margin increased 100 basis points to 13 percent, both reflecting strong execution on productivity initiatives
“With our second quarter results, we are continuing to build a
compelling track record of growth that reflects a strong focus on
elevating our execution and driving productivity to expand margins,”
said
Full-year 2016 Outlook
Xylem reaffirmed its forecast of full-year 2016 revenue of approximately
Xylem is narrowing the range of its full-year earnings outlook, while
maintaining the same adjusted EPS mid-point. Xylem now expects to
generate full-year 2016 adjusted operating income of
Second Quarter Segment Results
Water Infrastructure
Xylem’s Water Infrastructure segment consists of its businesses serving clean water delivery, wastewater transport and treatment, dewatering and analytical instrumentation.
-
Second quarter 2016 Water Infrastructure revenue was
$566 million , up three percent over the prior year period on a reported basis and up five percent in constant currency, which includes two points of growth attributable to acquisitions. This growth reflects continued strength in the public utility end market, which was up 15 percent on a global basis in the quarter and 22 percent in the U.S. In addition, major projects in theEmerging Markets , particularly inIndia , contributed to the gains. This progress was partially offset by weakness in the industrial end market, notably the ongoing declines in oil and gas inNorth America and the global mining sector. -
Reported segment operating income was
$70 million in the second quarter, up from$65 million in the prior year. Excluding restructuring, realignment and special charges, adjusted segment operating income was$79 million , a 15-percent increase over the$69 million generated in the comparable period a year ago. Operating margin for the quarter increased 60 basis points to 12.4 percent, driven primarily by the impact of cost savings and volume leverage, which enabled the Company to continue to invest in strategic growth initiatives. In addition, these drivers more than offset cost inflation, increased restructuring and realignment charges, and acquisition costs. Similarly, strong productivity and volume growth drove a 150-basis-point expansion in the segment adjusted operating margin to 14 percent.
Applied Water
Xylem’s Applied Water segment consists of its portfolio of businesses in residential and commercial building services, and industrial and agricultural applications.
-
Second quarter 2016 revenue was
$366 million , down from$369 million in the prior year period and flat in constant currency. Segment sales inWestern Europe grew 14 percent as new product sales and channel investments helped drive share gains in the industrial and commercial end markets. This growth was offset by declines in the U.S. andChina . -
Segment operating income was
$51 million in the second quarter, flat versus second quarter 2015. Adjusted segment operating income, which excludes restructuring and realignment charges, grew year over year by$1 million to $54 million , reflecting strong productivity and cost control. Segment operating margin increased 10 basis points to 13.9 percent. A strong focus on reducing costs drove this margin expansion, which was partially offset by inflation, ongoing investment in growth initiatives and lower volume. On an adjusted basis, segment operating margin grew 40 basis points to 14.8 percent.
Supplemental information on Xylem’s second quarter earnings and reconciliations for non-GAAP items are posted at http://investors.xyleminc.com.
About Xylem
Xylem (XYL) is a leading global water technology provider, enabling
customers to transport, treat, test and efficiently use water in public
utility, residential and commercial building services, industrial and
agricultural settings. The Company does business in more than 150
countries through a number of market-leading product brands, and its
people bring broad applications expertise with a strong focus on finding
local solutions to the world’s most challenging water and wastewater
problems. Xylem is headquartered in
The name Xylem is derived from classical Greek and is the tissue that transports water in plants, highlighting the engineering efficiency of our water-centric business by linking it with the best water transportation of all – that which occurs in nature. For more information, please visit us at www.xylem.com.
Forward-Looking Statements
This press release contains information that may constitute “forward-looking statements.” Forward-looking statements by their nature address matters that are, to different degrees, uncertain. Generally, the words “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “forecast,” “believe,” “target,” “will,” “could,” “would,” “should” and similar expressions identify forward-looking statements, which generally are not historical in nature. However, the absence of these words or similar expressions does not mean that a statement is not forward-looking.
These forward-looking statements include statements about the
capitalization of
XYLEM INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED INCOME STATEMENTS (Unaudited) (in millions, except per share data) |
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Three Months | Six Months | ||||||||||||||
For the period ended June 30, | 2016 | 2015 | 2016 | 2015 | |||||||||||
Revenue | $ | 932 | $ | 920 | $ | 1,779 | $ | 1,757 | |||||||
Cost of revenue | 563 | 572 | 1,081 | 1,094 | |||||||||||
Gross profit | 369 | 348 | 698 | 663 | |||||||||||
Selling, general and administrative expenses | 227 | 218 | 446 | 424 | |||||||||||
Research and development expenses | 27 | 25 | 52 | 48 | |||||||||||
Restructuring charges | 6 | 1 | 12 | 4 | |||||||||||
Operating income | 109 | 104 | 188 | 187 | |||||||||||
Interest expense | 20 | 14 | 34 | 28 | |||||||||||
Other non-operating income, net | 1 | 1 | 1 | — | |||||||||||
Gain from sale of businesses | — | — | — | 9 | |||||||||||
Income before taxes | 90 | 91 | 155 | 168 | |||||||||||
Income tax expense | 19 | 17 | 18 | 30 | |||||||||||
Net income | $ | 71 | $ | 74 | $ | 137 | $ | 138 | |||||||
Earnings per share: | |||||||||||||||
Basic | $ | 0.39 | $ | 0.41 | $ | 0.77 | $ | 0.76 | |||||||
Diluted | $ | 0.39 | $ | 0.41 | $ | 0.76 | $ | 0.76 | |||||||
Weighted average number of shares: | |||||||||||||||
Basic | 179.1 | 181.5 | 178.8 | 181.8 | |||||||||||
Diluted | 179.9 | 182.3 | 179.6 | 182.7 | |||||||||||
Dividends declared per share | $ | 0.1549 | $ | 0.1408 | $ | 0.3098 | $ | 0.2816 |
XYLEM INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (in millions, except per share amounts) |
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June 30, |
December 31, 2015 |
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ASSETS | |||||||||
Current assets: | |||||||||
Cash and cash equivalents | $ | 586 | $ | 680 | |||||
Receivables, less allowances for discounts and doubtful accounts of $26 and $33 in 2016 and 2015, respectively | 784 | 749 | |||||||
Inventories | 483 | 433 | |||||||
Prepaid and other current assets | 154 | 143 | |||||||
Total current assets | 2,007 | 2,005 | |||||||
Property, plant and equipment, net | 438 | 439 | |||||||
Goodwill | 1,616 | 1,584 | |||||||
Other intangible assets, net | 453 | 435 | |||||||
Other non-current assets | 180 | 194 | |||||||
Total assets | $ | 4,694 | $ | 4,657 | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||
Current liabilities: | |||||||||
Accounts payable | $ | 339 | $ | 338 | |||||
Accrued and other current liabilities | 390 | 407 | |||||||
Short-term borrowings and current maturities of long-term debt | 91 | 78 | |||||||
Total current liabilities | 820 | 823 | |||||||
Long-term debt | 1,143 | 1,196 | |||||||
Accrued postretirement benefits | 336 | 335 | |||||||
Deferred income tax liabilities | 117 | 118 | |||||||
Other non-current accrued liabilities | 104 | 101 | |||||||
Total liabilities | 2,520 | 2,573 | |||||||
Stockholders’ equity: | |||||||||
Common Stock – par value $0.01 per share: | |||||||||
Authorized 750.0 shares, issued 191.1 shares and 190.2 shares in 2016 and 2015, respectively | 2 | 2 | |||||||
Capital in excess of par value | 1,860 | 1,834 | |||||||
Retained earnings | 966 | 885 | |||||||
Treasury stock – at cost 11.9 shares and 11.8 shares in 2016 and 2015, respectively | (402 | ) | (399 | ) | |||||
Accumulated other comprehensive loss | (252 | ) | (238 | ) | |||||
Total stockholders’ equity | 2,174 | 2,084 | |||||||
Total liabilities and stockholders’ equity | $ | 4,694 | $ | 4,657 |
XYLEM INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in millions) |
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For the six months ended June 30, |
2016 |
2015 |
|||||||
Operating Activities | |||||||||
Net income | $ | 137 | $ | 138 | |||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||
Depreciation | 41 | 47 | |||||||
Amortization | 24 | 22 | |||||||
Share-based compensation | 10 | 8 | |||||||
Restructuring charges | 12 | 4 | |||||||
Gain from sale of businesses | — | (9 | ) | ||||||
Other, net | 8 | 3 | |||||||
Payments for restructuring | (6 | ) | (9 | ) | |||||
Changes in assets and liabilities (net of acquisitions): | |||||||||
Changes in receivables | (19 | ) | (28 | ) | |||||
Changes in inventories | (39 | ) | (27 | ) | |||||
Changes in accounts payable | 9 | 3 | |||||||
Other, net | (52 | ) | (29 | ) | |||||
Net Cash – Operating activities | 125 | 123 | |||||||
Investing Activities | |||||||||
Capital expenditures | (62 | ) | (57 | ) | |||||
Acquisition of business, net of cash acquired | (70 | ) | — | ||||||
Proceeds from sale of businesses | — | 1 | |||||||
Other, net | 5 | 3 | |||||||
Net Cash – Investing activities | (127 | ) | (53 | ) | |||||
Financing Activities | |||||||||
Short-term debt issued | 89 | — | |||||||
Short-term debt repaid | (77 | ) | (2 | ) | |||||
Long-term debt issued | 540 | — | |||||||
Long-term debt repaid | (608 | ) | — | ||||||
Repurchase of common stock | (3 | ) | (53 | ) | |||||
Proceeds from exercise of employee stock options | 16 | 9 | |||||||
Dividends paid | (56 | ) | (51 | ) | |||||
Other, net | 1 | 1 | |||||||
Net Cash – Financing activities | (98 | ) | (96 | ) | |||||
Effect of exchange rate changes on cash | 6 | (37 | ) | ||||||
Net change in cash and cash equivalents | (94 | ) | (63 | ) | |||||
Cash and cash equivalents at beginning of year | 680 | 663 | |||||||
Cash and cash equivalents at end of period | $ | 586 | $ | 600 | |||||
Supplemental disclosure of cash flow information: | |||||||||
Cash paid during the period for: | |||||||||
Interest | $ | 34 | $ | 26 | |||||
Income taxes (net of refunds received) | $ | 49 | $ | 42 |
Xylem Inc. Non-GAAP Measures |
Management reviews key performance indicators including revenue, gross margins, segment operating income and margins, orders growth, free cash flow, 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 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. However, other than with respect to total revenue, we only provide guidance on a non-GAAP basis and do not provide reconciliations of such forward-looking measures to GAAP due to the inherent difficulty in forecasting certain amounts that would be included in GAAP earnings, such as, integration and acquisition-related costs, special charges and tax related special items. 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 non-GAAP measures, which may not be comparable to similarly titled measures reported by other companies, to be key performance indicators: |
“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 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 assumes no change in exchange rates from the prior period. |
“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, amortization expense, and share-based compensation. “Adjusted EBITDA” reflects the adjustment to EBITDA to exclude restructuring and realignment costs, gain on sale of business and special charges. |
"Adjusted Operating Income", "Adjusted Segment Operating Income", and “Adjusted EPS” defined as operating income, segment operating income and earnings per share, adjusted to exclude restructuring and realignment costs, gain on sale of businesses, special charges and tax-related special items, as applicable. |
“Free Cash Flow” defined as net cash from operating activities, as reported in the Statement of Cash Flow, less capital expenditures as well as adjustments for other significant items that impact current results which management believes are not related to our ongoing operations and performance. Our definition of free cash flows does 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 interest expense related to the early extinguishment of debt during Q2 2016, initial acquisition related costs, costs incurred for the contractual indemnification of tax obligations to ITT and other special non-operating items. |
“Tax-related special items" defined as tax items, such as tax return versus tax provision adjustments, tax exam impacts, tax law change impacts, significant reserves for cash repatriation, 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 / |
Change | % Change | ||||||||||||||||||||||||
Orders | Orders | 2016 v. 2015 | 2016 v. 2015 |
Divestitures |
FX Contribution | Adj. 2016 v. 2015 | Adj. 2016 v. 2015 | |||||||||||||||||||||
2016 | 2015 | |||||||||||||||||||||||||||
Six Months Ended June 30 |
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Xylem Inc. | 1,811 | 1,859 | (48 | ) | -3 | % | (14 | ) | 44 | (18 | ) | -1 | % | 0 | % | |||||||||||||
Water Infrastructure | 1,096 | 1,147 | (51 | ) | -4 | % | (14 | ) | 35 | (30 | ) | -3 | % | -1 | % | |||||||||||||
Applied Water | 715 | 712 | 3 | 0 | % | - | 9 | 12 | 2 | % | 2 | % | ||||||||||||||||
Quarter Ended June 30 |
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Xylem Inc. | 923 | 944 | (21 | ) | -2 | % | (9 | ) | 13 | (17 | ) | -2 | % | -1 | % | |||||||||||||
Water Infrastructure | 562 | 585 | (23 | ) | -4 | % | (9 | ) | 11 | (21 | ) | -4 | % | -2 | % | |||||||||||||
Applied Water | 361 | 359 | 2 | 1 | % | - | 2 | 4 | 1 | % | 1 | % | ||||||||||||||||
Quarter Ended March 31 |
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Xylem Inc. | 888 | 915 | (27 | ) | -3 | % | (5 | ) | 31 | (1 | ) | 0 | % | 0 | % | |||||||||||||
Water Infrastructure | 534 | 562 | (28 | ) | -5 | % | (5 | ) | 24 | (9 | ) | -2 | % | -1 | % | |||||||||||||
Applied Water | 354 | 353 | 1 | 0 | % | - | 7 | 8 | 2 | % | 2 | % |
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 / |
Change | % Change | ||||||||||||||||||||||||
Revenue | Revenue | 2016 v. 2015 | 2016 v. 2015 |
Divestitures |
FX Contribution | Adj. 2016 v. 2015 | Adj. 2016 v. 2015 | |||||||||||||||||||||
2016 | 2015 | |||||||||||||||||||||||||||
Six Months Ended June 30 |
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Xylem Inc. | 1,779 | 1,757 | 22 | 1 | % | (17 | ) | 40 | 45 | 3 | % | 4 | % | |||||||||||||||
Water Infrastructure | 1,080 | 1,051 | 29 | 3 | % | (17 | ) | 32 | 44 | 4 | % | 6 | % | |||||||||||||||
Applied Water | 699 | 706 | (7 | ) | -1 | % | - | 8 | 1 | 0 | % | 0 | % | |||||||||||||||
Quarter Ended June 30 |
||||||||||||||||||||||||||||
Xylem Inc. | 932 | 920 | 12 | 1 | % | (11 | ) | 13 | 14 | 2 | % | 3 | % | |||||||||||||||
Water Infrastructure | 566 | 551 | 15 | 3 | % | (11 | ) | 11 | 15 | 3 | % | 5 | % | |||||||||||||||
Applied Water | 366 | 369 | (3 | ) | -1 | % | - | 2 | (1 | ) | 0 | % | 0 | % | ||||||||||||||
Quarter Ended March 31 |
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Xylem Inc. | 847 | 837 | 10 | 1 | % | (6 | ) | 27 | 31 | 4 | % | 4 | % | |||||||||||||||
Water Infrastructure | 514 | 500 | 14 | 3 | % | (6 | ) | 21 | 29 | 6 | % | 7 | % | |||||||||||||||
Applied Water | 333 | 337 | (4 | ) | -1 | % | - | 6 | 2 | 1 | % | 1 | % |
Xylem Inc. Non-GAAP Reconciliation | ||||||||||||||||
Adjusted Operating Income | ||||||||||||||||
($ Millions) | ||||||||||||||||
Q1 | Q2 | YTD | ||||||||||||||
2016 |
2015 |
2016 |
2015 |
2016 |
2015 |
|||||||||||
Total Revenue | ||||||||||||||||
• Total Xylem | 847 | 837 | 932 | 920 | 1,779 | 1,757 | ||||||||||
• Water Infrastructure | 514 | 500 | 566 | 551 | 1,080 | 1,051 | ||||||||||
• Applied Water | 333 | 337 | 366 | 369 | 699 | 706 | ||||||||||
Operating Income | ||||||||||||||||
• Total Xylem | 79 | 83 | 109 | 104 | 188 | 187 | ||||||||||
• Water Infrastructure | 54 | 47 | 70 | 65 | 124 | 112 | ||||||||||
• Applied Water | 39 | 46 | 51 | 51 | 90 | 97 | ||||||||||
• Total Segments | 93 | 93 | 121 | 116 | 214 | 209 | ||||||||||
Operating Margin | ||||||||||||||||
• Total Xylem | 9.3% | 9.9% | 11.7% | 11.3% | 10.6% | 10.6% | ||||||||||
• Water Infrastructure | 10.5% | 9.4% | 12.4% | 11.8% | 11.5% | 10.7% | ||||||||||
• Applied Water | 11.7% | 13.6% | 13.9% | 13.8% | 12.9% | 13.7% | ||||||||||
• Total Segments | 11.0% | 11.1% | 13.0% | 12.6% | 12.0% | 11.9% | ||||||||||
Special Charges | ||||||||||||||||
• Total Xylem | 4 | 1 | 1 | - | 5 | 1 | ||||||||||
• Water Infrastructure | 4 | 1 | 1 | - | 5 | 1 | ||||||||||
• Applied Water | - | - | - | - | - | - | ||||||||||
• Total Segments | 4 | 1 | 1 | - | 5 | 1 | ||||||||||
Restructuring & Realignment Costs | ||||||||||||||||
• Total Xylem | 9 | 6 | 11 | 6 | 20 | 12 | ||||||||||
• Water Infrastructure | 4 | 5 | 8 | 4 | 12 | 9 | ||||||||||
• Applied Water | 3 | 1 | 3 | 2 | 6 | 3 | ||||||||||
• Total Segments | 7 | 6 | 11 | 6 | 18 | 12 | ||||||||||
Adjusted Operating Income* | ||||||||||||||||
• Total Xylem | 92 | 90 | 121 | 110 | 213 | 200 | ||||||||||
• Water Infrastructure | 62 | 53 | 79 | 69 | 141 | 122 | ||||||||||
• Applied Water | 42 | 47 | 54 | 53 | 96 | 100 | ||||||||||
• Total Segments | 104 | 100 | 133 | 122 | 237 | 222 | ||||||||||
Adjusted Operating Margin* | ||||||||||||||||
• Total Xylem | 10.9% | 10.8% | 13.0% | 12.0% | 12.0% | 11.4% | ||||||||||
• Water Infrastructure | 12.1% | 10.6% | 14.0% | 12.5% | 13.1% | 11.6% | ||||||||||
• Applied Water | 12.6% | 13.9% | 14.8% | 14.4% | 13.7% | 14.2% | ||||||||||
• Total Segments | 12.3% | 11.9% | 14.3% | 13.3% | 13.3% | 12.6% |
*Adjusted Operating Income excludes restructuring & realignment costs and special charges, which consisted of initial acquisition costs and other acquisition related charges in 2016 and other special non-operating items in 2015. |
Xylem Inc. Non-GAAP Reconciliation | |||||||||||||||||||||||||||||
Adjusted Diluted EPS | |||||||||||||||||||||||||||||
($ Millions, except per share amounts) | |||||||||||||||||||||||||||||
Q2 2016 | Q2 2015 | ||||||||||||||||||||||||||||
As Reported |
Adjustments |
Adjusted |
As Reported |
Adjustments |
Adjusted |
||||||||||||||||||||||||
Total Revenue | 932 | 932 | 920 | 920 | |||||||||||||||||||||||||
Operating Income | 109 | 12 | a | 121 | 104 | 6 | a | 110 | |||||||||||||||||||||
Operating Margin | 11.7 | % | 13.0 | % | 11.3 | % | 12.0 | % | |||||||||||||||||||||
Interest Expense | (20 | ) | 8 | b | (12 | ) | (14 | ) | (14 | ) | |||||||||||||||||||
Other Non-Operating Income (Expense) | 1 | 1 | 1 | 1 | b | 2 | |||||||||||||||||||||||
Income before Taxes | 90 | 20 | 110 | 91 | 7 | 98 | |||||||||||||||||||||||
Provision for Income Taxes | (19 | ) | (4 | ) | c | (23 | ) | (17 | ) | (3 | ) | c | (20 | ) | |||||||||||||||
Net Income | 71 | 16 | 87 | 74 | 4 | 78 | |||||||||||||||||||||||
Diluted Shares | 179.9 | 179.9 | 182.3 | 182.3 | |||||||||||||||||||||||||
Diluted EPS | $ | 0.39 | $ | 0.09 | $ | 0.48 | $ | 0.41 | $ | 0.02 | $ | 0.43 | |||||||||||||||||
Q2 YTD 2016 | Q2 YTD 2015 | ||||||||||||||||||||||||||||
As Reported |
Adjustments |
Adjusted |
As Reported |
Adjustments |
Adjusted |
||||||||||||||||||||||||
Total Revenue | 1,779 | 1,779 | 1,757 | 1,757 | |||||||||||||||||||||||||
Operating Income | 188 | 25 | a | 213 | 187 | 13 | a | 200 | |||||||||||||||||||||
Operating Margin | 10.6 | % | 12.0 | % | 10.6 | % | 11.4 | % | |||||||||||||||||||||
Interest Expense | (34 | ) | 8 | b | (26 | ) | (28 | ) | (28 | ) | |||||||||||||||||||
Other Non-Operating Income (Expense) | 1 | 1 | - | 2 | b | 2 | |||||||||||||||||||||||
Gain from sale of businesses | - | - | 9 | (9 | ) | - | |||||||||||||||||||||||
Income before Taxes | 155 | 33 | 188 | 168 | 6 | 174 | |||||||||||||||||||||||
Provision for Income Taxes | (18 | ) | (21 | ) | c | (39 | ) | (30 | ) | (6 | ) | c | (36 | ) | |||||||||||||||
Net Income | 137 | 12 | 149 | 138 | - | 138 | |||||||||||||||||||||||
Diluted Shares | 179.6 | 179.6 | 182.7 | 182.7 | |||||||||||||||||||||||||
Diluted EPS | $ | 0.76 | $ | 0.07 | $ | 0.83 | $ | 0.76 | $ | - | $ | 0.76 |
a | Restructuring & realignment costs of $11 million and $6 million in the second quarter of 2016 and 2015, respectively, and special charges of $1 million of initial acquisition costs in the second quarter of 2016. Restructuring & realignment costs of $20 million and $12 million in the first half of 2016 and 2015, respectively, and special charges of $5 million of initial acquisition costs and $1 million of other special charges in the first half of 2016 and 2015, respectively. | ||
b | Special charges consisting of $8 million of costs related to the early extinguishment of debt for the second quarter and first half of 2016, and $1 million and $2 million of other special charges for the second quarter and first half of 2015, respectively. | ||
c | Net tax impact on restructuring & realignment costs of $3 million and $1 million and on special charges of $4 million and $0 million, and tax-related special items of $3 million of benefit and $2 million of expense for the second quarter of 2016 and 2015, respectively. Net tax impact on restructuring & realignment costs of $5 million and $3 million and on special charges of $5 million and $0 million, and tax-related special charges of $11 million and $3 million for the first half of 2016 and 2015, respectively. |
Xylem Inc. Non-GAAP Reconciliation | ||||||||||||||||||||||||||||
Net Cash - Operating Activities vs. Free Cash Flow | ||||||||||||||||||||||||||||
($ Millions) | ||||||||||||||||||||||||||||
Q1 | Q2 | Six Months Ended | ||||||||||||||||||||||||||
2016 | 2015 | 2016 | 2015 | 2016 | 2015 | |||||||||||||||||||||||
Net Cash - Operating Activities | $ | 41 | $ | 39 | $ | 84 | $ | 84 | $ | 125 | $ | 123 | ||||||||||||||||
Capital Expenditures | (37 | ) | (37 | ) | (25 | ) | (20 | ) | (62 | ) | (57 | ) | ||||||||||||||||
Free Cash Flow | $ | 4 | $ | 2 | $ | 59 | $ | 64 | $ | 63 | $ | 66 | ||||||||||||||||
Net Income | 66 | 64 | 71 | 74 | 137 | 138 | ||||||||||||||||||||||
Gain from sale of businesses | - | 9 | - | - | - | 9 | ||||||||||||||||||||||
Special Charges - Interest | - | - | (8 | ) | - | (8 | ) | - | ||||||||||||||||||||
Net Income, excluding gain on sale of businesses and |
$ | 66 | $ | 55 | $ | 79 | $ | 74 | $ | 145 | $ | 129 | ||||||||||||||||
Free Cash Flow Conversion | 6 | % | 4 | % | 75 | % | 86 | % | 43 | % | 51 | % |
View source version on businesswire.com: http://www.businesswire.com/news/home/20160802005938/en/
Source:
Xylem Inc.
Media
Kelly McAndrew, +1 914-323-5969
Kelly.McAndrew@xyleminc.com
or
Investors
Phil
DeSousa, +1 914-323-5930
Phil.DeSousa@xyleminc.com