SEC Filing | Xylem

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Form 8-K

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 4, 2015

XYLEM INC.

(Exact name of registrant as specified in its charter)




Indiana	001-35229	45-2080495
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)




1 International Drive Rye Brook, New York		10573
(Address of principal executive offices)		(Zip Code)

(914) 323-5700

(Registrant’s telephone number, including area code)

(Former name or former address, if changed since last report)

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))



Item 8.01	Other Events

In 2014, Xylem Inc. (the “Company”) began implementing an organizational redesign to integrate its commercial teams within geographical regions. The integration of our commercial teams creates a cross Xylem sales and marketing organization shifting from a dedicated product line organizational structure. This sales structure is largely in place in the Company’s European, Middle East, Africa and Asia regions and to a lesser extent in our other regions. While this organizational redesign did not change the Company’s reportable segments, it had implications on how the Company manages the business, the most significant of which was the shift of certain responsibilities, namely customer and market related activities, into the regional selling organizations. These changes and the related measurement system were effective in the fourth quarter 2014 and as a result, the Company will report its financial performance based on the new organizational design. Segment orders, revenue and operating income will be slightly reallocated between the Company’s two reportable segments, Applied Water and Water Infrastructure.

For information purposes and to provide investors with historical information on a basis consistent with its new reporting structure, the Company has recast certain historical amounts between the Company’s two reportable segments. This change has no impact on the Company’s historical consolidated financial position or results of operations. The recast financial information does not represent a restatement of previously issued financial statements.

Attached as Exhibit 99.1 are schedules containing financial information which has been recast to reflect historical orders, revenue and operating income for each of the Company’s operating segments for the first, second and third quarters of 2014, the first, second, third and fourth quarters of 2013, the nine months ended September 30, 2014 and the years ended December 31, 2013 and 2012.

The information contained in Exhibit 99.1 should be read in conjunction with the Company’s Annual Reports on Form 10-K for the years ended 2013 and 2012 and Quarterly Reports on Form 10-Q filed in 2014 and 2013.

The information furnished pursuant to this Item 8.01 and Exhibit 99.1 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 shall be expressly set forth by specific reference in such filing.



Item 9.01	Financial Statements and Exhibits


(d)	Exhibits.




Exhibit No.			Description

99.1			Recast segment information of Xylem Inc. (furnished pursuant to Item 8.01)

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 4, 2015	By:	/s/ Michael T. Speetzen
		Michael T. Speetzen
		Senior Vice President and Chief Financial Officer (Authorized Officer of Registrant)

EXHIBIT INDEX




Exhibit No.			Description

99.1			Recast segment information of Xylem Inc. (furnished pursuant to Item 8.01)

Exhibit 99.1

XYLEM INC.

RECAST ORDERS, REVENUE, OPERATING INCOME AND ADJUSTED OPERATING INCOME BY SEGMENT

($ MILLIONS)



			Year Ended				Year Ended				Nine Months Ended
			December 31, 2012				December 31, 2013				September 30, 2014
			As Previously Reported		As Recast		As Previously Reported		As Recast		As Previously Reported		As Recast
Orders
	Water Infrastructure		2,421		2,364		2,510		2,443		1,973		1,915
	Applied Water		1,423		1,418		1,468		1,469		1,135		1,136
	Eliminations		(62	)	—		(66	)	—		(57	)	—
		Total	3,782		3,782		3,912		3,912		3,051		3,051

Revenue
	Water Infrastructure		2,425		2,349		2,457		2,384		1,823		1,770
	Applied Water		1,424		1,442		1,444		1,453		1,105		1,104
	Eliminations		(58	)	—		(64	)	—		(54	)	—
		Total	3,791		3,791		3,837		3,837		2,874		2,874

Operating Income
	Water Infrastructure		342		334		271		263		217		217
	Applied Water		170		178		167		175		145		145
	Corp and Other		(69	)	(69	)	(75	)	(75	)	(40	)	(40	)
		Total	443		443		363		363		322		322

Adjustments (a)
	Water Infrastructure		23		23		52		52		20		20
	Applied Water		7		7		16		16		11		11
	Corp and Other		16		16		20		20		—		—
		Total	46		46		88		88		31		31

Adjusted Operating Income
	Water Infrastructure		365		357		323		315		237		237
	Applied Water		177		185		183		191		156		156
	Corp and Other		(53	)	(53	)	(55	)	(55	)	(40	)	(40	)
		Total	489		489		451		451		353		353


(a)	Adjustments consist of restructuring and realignment costs in all years, special charges in 2013 and separation costs in 2012.

XYLEM INC.

RECAST ORDERS, REVENUE, OPERATING INCOME AND ADJUSTED OPERATING INCOME BY SEGMENT 2013 QUARTER TO DATE

($ MILLIONS)



			1Q 2013				2Q 2013				3Q 2013				4Q 2013
			As Previously Reported		As Recast		As Previously Reported		As Recast		As Previously Reported		As Recast		As Previously Reported		As Recast
Orders
	Water Infrastructure		601		583		647		629		617		601		645		630
	Applied Water		378		379		378		380		355		354		357		356
	Eliminations		(17	)	—		(16	)	—		(17	)	—		(16	)	—
		Total	962		962		1,009		1,009		955		955		986		986

Revenue
	Water Infrastructure		551		532		596		577		619		602		691		673
	Applied Water		345		347		381		383		360		363		358		360
	Eliminations		(17	)	—		(17	)	—		(14	)	—		(16	)	—
		Total	879		879		960		960		965		965		1,033		1,033

Operating Income
	Water Infrastructure		42		39		41		40		88		85		100		99
	Applied Water		40		43		45		46		40		43		42		43
	Corp and Other		(16	)	(16	)	(16	)	(16	)	(30	)	(30	)	(13	)	(13	)
		Total	66		66		70		70		98		98		129		129

Adjustments (a)
	Water Infrastructure		10		10		22		22		8		8		12		12
	Applied Water		2		2		6		6		4		4		4		4
	Corp and Other		—		—		—		—		20		20		—		—
		Total	12		12		28		28		32		32		16		16

Adjusted Operating Income
	Water Infrastructure		52		49		63		62		96		93		112		111
	Applied Water		42		45		51		52		44		47		46		47
	Corp and Other		(16	)	(16	)	(16	)	(16	)	(10	)	(10	)	(13	)	(13	)
		Total	78		78		98		98		130		130		145		145


(a)	Adjustments consist of restructuring and realignment costs and special charges.

XYLEM INC.

RECAST ORDERS, REVENUE, OPERATING INCOME AND ADJUSTED OPERATING INCOME BY SEGMENT 2014 QUARTER TO DATE

($ MILLIONS)



			1Q 2014				2Q 2014				3Q 2014
			As Previously Reported		As Recast		As Previously Reported		As Recast		As Previously Reported		As Recast
Orders
	Water Infrastructure		619		597		674		654		680		664
	Applied Water		394		396		378		377		363		363
	Eliminations		(20	)	—		(21	)	—		(16	)	—
		Total	993		993		1,031		1,031		1,027		1,027

Revenue
	Water Infrastructure		568		552		636		616		619		602
	Applied Water		355		354		388		389		362		361
	Eliminations		(17	)	—		(19	)	—		(18	)	—
		Total	906		906		1,005		1,005		963		963

Operating Income
	Water Infrastructure		46		46		77		76		94		95
	Applied Water		41		41		52		53		52		51
	Corp and Other		(11	)	(11	)	(13	)	(13	)	(16	)	(16	)
		Total	76		76		116		116		130		130

Adjustments (a)
	Water Infrastructure		12		12		5		5		3		3
	Applied Water		6		6		4		4		1		1
	Corp and Other		—		—		—		—		—		—
		Total	18		18		9		9		4		4

Adjusted Operating Income
	Water Infrastructure		58		58		82		81		97		98
	Applied Water		47		47		56		57		53		52
	Corp and Other		(11	)	(11	)	(13	)	(13	)	(16	)	(16	)
		Total	94		94		125		125		134		134


(a)	Adjustments consist of restructuring and realignment costs.

Xylem Inc. Non-GAAP Reconciliation

Recast - Reported vs. Organic & Constant Currency Order Growth

($ 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						Change		% Change
	Orders	Orders	2014 v. 2013		2014 v. 2013		Acquisitions / Divestitures		FX Contribution		Adj. 2014 v. 2013		Adj. 2014 v. 2013
	2014	2013
Nine Months Ended September 30

Xylem Inc.	3,051	2,926	125		4	%	(3	)	(3	)	119		4	%	4	%

Water Infrastructure	1,915	1,813	102		6	%	(8	)	5		99		5	%	6	%
Applied Water	1,136	1,113	23		2	%	5		(8	)	20		2	%	1	%

Quarter Ended September 30

Xylem Inc.	1,027	955	72		8	%	5		2		79		8	%	8	%

Water Infrastructure	664	601	63		10	%	—		—		63		10	%	10	%
Applied Water	363	354	9		3	%	5		2		16		5	%	3	%

Quarter Ended June 30

Xylem Inc.	1,031	1,009	22		2	%	(1	)	(8	)	13		1	%	1	%

Water Infrastructure	654	629	25		4	%	(1	)	1		25		4	%	4	%
Applied Water	377	380	(3	)	(1	)%	—		(8	)	(11	)	(3	)%	(3	)%

Quarter Ended March 31

Xylem Inc.	993	962	31		3	%	(7	)	3		27		3	%	4	%

Water Infrastructure	597	583	14		2	%	(7	)	4		11		2	%	3	%
Applied Water	396	379	17		4	%	—		(2	)	15		4	%	4	%

Xylem Inc. Non-GAAP Reconciliation

Recast - Reported vs. Organic & Constant Currency Order Growth

($ 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						Change		% Change
	Orders	Orders	2013 v. 2012		2013 v. 2012		Acquisitions / Divestitures		FX Contribution		Adj. 2013 v. 2012		Adj. 2013 v. 2012
	2013	2012 *
Year Ended December 31

Xylem Inc.	3,912	3,782	130		3	%	(87	)	—		43		1	%	3	%

Water Infrastructure	2,443	2,364	79		3	%	(87	)	6		(2	)	—	%	4	%
Applied Water	1,469	1,418	51		4	%	—		(6	)	45		3	%	3	%

Quarter Ended December 31

Xylem Inc.	986	926	60		6	%	(16	)	(1	)	43		5	%	6	%

Water Infrastructure	630	591	39		7	%	(16	)	2		25		4	%	7	%
Applied Water	356	335	21		6	%	—		(3	)	18		5	%	5	%

Quarter Ended September 30

Xylem Inc.	955	882	73		8	%	(20	)	1		54		6	%	8	%

Water Infrastructure	601	549	52		9	%	(20	)	3		35		6	%	10	%
Applied Water	354	333	21		6	%	—		(2	)	19		6	%	6	%

Quarter Ended June 30

Xylem Inc.	1,009	970	39		4	%	(25	)	(2	)	12		1	%	4	%

Water Infrastructure	629	602	27		4	%	(25	)	(1	)	1		—	%	4	%
Applied Water	380	368	12		3	%	—		(1	)	11		3	%	3	%

Quarter Ended March 31

Xylem Inc.	962	1,004	(42	)	(4	)%	(26	)	2		(66	)	(7	)%	(4	)%

Water Infrastructure	583	622	(39	)	(6	)%	(26	)	2		(63	)	(10	)%	(6	)%
Applied Water	379	382	(3	)	(1	)%	—		—		(3	)	(1	)%	(1	)%

* 2012 quarterly orders are on the same recast basis as the full year 2012 and 2013 orders.

Xylem Inc. Non-GAAP Reconciliation

Recast - Reported vs. Organic & Constant Currency Revenue Growth

($ 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						Change		% Change
	Revenue	Revenue	2014 v. 2013		2014 v. 2013		Acquisitions / Divestitures		FX Contribution		Adj. 2014 v. 2013		Adj. 2014 v. 2013
	2014	2013
Nine Months Ended September 30

Xylem Inc.	2,874	2,804	70		2	%	1		(1	)	70		2	%	2	%

Water Infrastructure	1,770	1,711	59		3	%	(6	)	8		61		4	%	4	%
Applied Water	1,104	1,093	11		1	%	7		(9	)	9		1	%	—	%

Quarter Ended September 30

Xylem Inc.	963	965	(2	)	—	%	7		2		7		1	%	—	%

Water Infrastructure	602	602	—		—	%	—		1		1		—	%	—	%
Applied Water	361	363	(2	)	(1	)%	7		—		5		1	%	(1	)%

Quarter Ended June 30

Xylem Inc.	1,005	960	45		5	%	(1	)	(7	)	37		4	%	4	%

Water Infrastructure	616	577	39		7	%	(1	)	2		40		7	%	7	%
Applied Water	389	383	6		2	%	—		(7	)	(1	)	—	%	—	%

Quarter Ended March 31

Xylem Inc.	906	879	27		3	%	(5	)	4		26		3	%	4	%

Water Infrastructure	552	532	20		4	%	(5	)	5		20		4	%	5	%
Applied Water	354	347	7		2	%	—		(2	)	5		1	%	1	%

Xylem Inc. Non-GAAP Reconciliation

Recast - Reported vs. Organic & Constant Currency Revenue Growth

($ 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						Change		% Change
	Revenue	Revenue	2013 v. 2012		2013 v. 2012		Acquisitions / Divestitures		FX Contribution		Adj. 2013 v. 2012		Adj. 2013 v. 2012
	2013	2012 *
Year Ended December 31

Xylem Inc.	3,837	3,791	46		1	%	(82	)	(3	)	(39	)	(1	)%	1	%

Water Infrastructure	2,384	2,349	35		1	%	(82	)	4		(43	)	(2	)%	2	%
Applied Water	1,453	1,442	11		1	%	—		(7	)	4		—	%	—	%

Quarter Ended December 31

Xylem Inc.	1,033	969	64		7	%	(15	)	(1	)	48		5	%	7	%

Water Infrastructure	673	620	53		9	%	(15	)	2		40		6	%	9	%
Applied Water	360	349	11		3	%	—		(3	)	8		2	%	2	%

Quarter Ended September 30

Xylem Inc.	965	931	34		4	%	(21	)	—		13		1	%	4	%

Water Infrastructure	602	576	26		5	%	(21	)	3		8		1	%	5	%
Applied Water	363	355	8		2	%	—		(3	)	5		1	%	1	%

Quarter Ended June 30

Xylem Inc.	960	966	(6	)	(1	)%	(23	)	(4	)	(33	)	(3	)%	(1	)%

Water Infrastructure	577	587	(10	)	(2	)%	(23	)	(3	)	(36	)	(6	)%	(2	)%
Applied Water	383	379	4		1	%	—		(1	)	3		1	%	1	%

Quarter Ended March 31

Xylem Inc.	879	925	(46	)	(5	)%	(23	)	2		(67	)	(7	)%	(5	)%

Water Infrastructure	532	566	(34	)	(6	)%	(23	)	2		(55	)	(10	)%	(6	)%
Applied Water	347	359	(12	)	(3	)%	—		—		(12	)	(3	)%	(3	)%

* 2012 quarterly revenue is on the same recast basis as the full year 2012 and 2013 revenue.