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): January 31, 2019
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)) |
¨ | Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.¨
Item 2.02 | Results of Operations and Financial Condition |
On January 31, 2019, Xylem Inc. issued a press release announcing its financial results for the quarter and fiscal year ended December 31, 2018. A copy of the press release is furnished as Exhibit 99.1 to this report and is incorporated by reference herein.
This information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.
Item 9.01 | Financial Statements and Exhibits |
(d) Exhibits.
Exhibit No. | Description |
99.1 | Press Release issued by Xylem Inc. on January 31, 2019. |
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: January 31, 2019 | By: | /s/ E. Mark Rajkowski | ||
E. Mark Rajkowski | ||||
Senior Vice President & Chief Financial Officer (Authorized Officer of Registrant) | ||||
EXHIBIT INDEX
Exhibit No. | Description |
Press Release issued by Xylem Inc. on January 31, 2019. | |
Exhibit 99.1
Xylem Inc.
1 International Drive, Rye Brook N.Y. 10573
Tel +1.914.323.5700 Fax +1.914.323.5752
Contacts: | Media | Investors | ||
Jenny Rider +1 (914) 323-5745 | Matt Latino +1 (914) 323-5821 | |||
Jenny.Rider@xyleminc.com | Matthew.Latino@xyleminc.com | |||
Xylem reports strong revenue, orders and earnings growth in fourth quarter 2018
• | Fourth quarter 2018 reported net income was $225 million or $1.24 per share; Adjusted net income for the quarter was $159 million or $0.88 per share, up 16 percent versus the prior year period |
• | Full-year 2018 reported net income was $549 million or $3.03 per share; Adjusted net income was $522 million or $2.88 per share, up 20 percent year-over-year |
• | Delivered $1.4 billion in revenue for the fourth quarter, up nine percent organically |
• | Fourth quarter orders of $1.4 billion were up 10 percent organically year-over-year |
• | Announces 14% increase in quarterly cash dividend |
• | Company projects full-year 2019 organic revenue growth of four to six percent, adjusted earnings per share of $3.20 to $3.40 |
RYE BROOK, N.Y., January 31, 2019 - Xylem Inc. (NYSE: XYL), a leading global water technology company dedicated to solving the world’s most challenging water issues, today reported fourth quarter 2018 net income of $225 million, or $1.24 per share. Excluding the impact of restructuring, realignment and special charges, the Company delivered adjusted net income of $159 million or $0.88 per share in the quarter, a 16-percent increase over the prior year period. Fourth quarter revenue was $1.4 billion, up 9 percent organically. Revenue for the quarter was driven by double-digit growth in the Utility and Commercial end markets along with eight percent growth in Industrial. Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) improved by 40 basis points year-over-year to 20.6 percent driven by productivity, volume leverage and price realization. Reported operating margin in the quarter was 14.0 percent and adjusted operating margin increased 10 basis points year-over-year to 15.1 percent, including a 20-basis-point impact due to purchase accounting amortization.
For the full year 2018, Xylem generated $5.2 billion in revenue, up 11 percent on a reported basis and eight percent on an organic basis. Full-year reported net income was $549 million, or $3.03 per share, a 66% increase over the prior year. Reported operating margin was 12.6 percent, up 90 basis points versus the prior year. Adjusted net income, which excludes the impact of restructuring, realignment and special charges, was $522 million, or $2.88 per share, a 20-percent increase over the prior year. Adjusted EBITDA improved by 80 basis points to 19.5 percent year-over-year. Xylem delivered a full-year 2018 adjusted operating margin of 13.7 percent, up 40 basis points versus the prior year including a 20-basis-point impact due to purchase accounting amortization.
“We continued to build strong momentum throughout 2018, generating solid revenue and orders growth across each of our business lines,” said Patrick Decker, President and Chief Executive Officer of Xylem. “With our expanded digital offerings and leveraging our extensive installed base, we delivered significant
value to our customers, and demand for our solutions grew across all of our end markets. We are well-positioned as we begin the year and focused on delivering each of our 2019 commitments and long-term financial objectives.”
Xylem announced that its Board of Directors declared a dividend in the amount of $0.24 per share, an increase of 14 percent. The dividend is payable on March 14, 2019, to shareholders of record as of February 14, 2019.
Full-year 2019 Outlook
Xylem forecasts full-year 2019 revenue in the range of $5.3 to $5.4 billion, up two to four percent. On an organic basis, Xylem’s revenue growth is anticipated to be in the range of four to six percent.
Full-year 2019 adjusted operating margin is expected to be in the range of 14.7 to 15.2 percent, resulting in adjusted earnings per share of $3.20 to $3.40. This represents an increase of 11 to 18 percent from Xylem’s 2018 adjusted results. The Company’s adjusted earnings outlook excludes projected restructuring and realignment costs of approximately $30 million for the year. 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.
Fourth Quarter Segment Results
Water Infrastructure
Xylem’s Water Infrastructure segment consists of its portfolio of businesses serving clean water delivery, wastewater transport and treatment, and dewatering.
• | Fourth quarter 2018 revenue was $609 million, up nine percent organically compared with fourth quarter 2017. This increase was driven by strong results in the Utility end market across all key geographies, including double-digit growth in the Emerging Markets. The Industrial end market was driven by healthy growth in the U.S., Latin America and Europe. |
• | Fourth quarter reported operating income for the segment was $119 million. Adjusted operating income for the segment, which excludes $7 million of restructuring and realignment and special charges, was $126 million, a 15-percent increase over the same period a year ago. Reported operating margin for the Water Infrastructure segment was 19.5 percent, up 130 basis points versus the prior year, and adjusted operating margin was up 180 basis points to 20.7 percent. Productivity gains, volume leverage and increased price realization more than offset inflation, negative currency impacts and investments. |
Applied Water
Xylem’s Applied Water segment consists of its portfolio of businesses in residential and commercial building services, and industrial applications.
• | Fourth quarter 2018 Applied Water revenue was $402 million, a 10-percent increase organically year-over-year, driven by robust growth in the Commercial end market in the U.S., as well as China and India. The Company’s business in the Industrial end market also saw healthy growth from project business activity in the U.S. |
• | Fourth quarter reported operating income for the segment was $66 million and adjusted operating income, which excludes $3 million of restructuring and realignment costs, was $69 million, a 10-percent increase over the comparable period last year. The segment reported operating margin was 16.4 percent, up 30 basis points over the prior year period. Adjusted operating margin increased 30 basis points to 17.2 percent as continued traction from price, volume and cost reductions more than offset inflation, negative currency impacts and investments. |
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.
• | Fourth quarter 2018 Measurement & Control Solutions revenue was $375 million, up 11 percent organically versus the prior year, driven by double-digit growth in water in North America and Emerging Markets, as well as the continued deployment of large gas projects. |
• | Fourth quarter reported operating income for the segment was $23 million, and adjusted operating income, which excludes $5 million of restructuring and realignment costs and special charges, was $28 million. Measurement & Control Solutions segment reported operating margin was 6.1 percent. Adjusted operating margin of 7.5% decreased 280 basis points over the prior year period, primarily due to higher inflation and adverse sales mix from component shortages, investments and purchase accounting. |
Supplemental information on Xylem’s fourth quarter and full-year 2018 earnings and reconciliations for certain non-GAAP items is posted at www.xylem.com/investors.
About Xylem
Xylem (XYL) is a leading global water technology company committed to developing innovative technology solutions to the world’s water challenges. The Company’s products and services move, treat, analyze, monitor and return water to the environment in public utility, industrial, residential and commercial building services settings. Xylem also provides a leading portfolio of smart metering, network technologies and advanced infrastructure analytics solutions for water, electric and gas utilities. The Company’s approximately 17,000 employees bring broad applications expertise with a strong focus on identifying comprehensive, sustainable solutions. Headquartered in Rye Brook, New York, with 2018 revenue of $5.2 billion, Xylem does business in more than 150 countries through a number of market-leading product brands.
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” within the meaning of the Private Securities Litigation Act of 1995. 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. However, the absence of these words or similar expressions does not mean that a statement is not forward-looking. These forward-looking statements include any statements that are not historical in nature, including any statements about the capitalization of Xylem Inc. (the “Company”), the Company’s restructuring and realignment, future strategic plans and other statements that describe the Company’s business strategy, outlook, objectives, plans, intentions or goals. All statements that address operating or financial performance, events or developments that we expect or anticipate will occur in the future - including statements relating to orders, revenues, operating margins and earnings per share growth, and statements expressing general views about future operating results - are forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause actual results to differ materially from those expressed or implied in, or reasonably inferred from, such forward-looking statements.
Factors that could cause results to differ materially from those anticipated include: overall economic and business conditions, political and other risks associated with our international operations, including military actions, economic sanctions or trade barriers including tariffs and embargoes that could affect
customer markets, and non-compliance with laws, including foreign corrupt practice laws, export and import laws and competition laws; potential for unexpected cancellations or delays of customer orders in our reported backlog; our exposure to fluctuations in foreign currency exchange rates; competition and pricing pressures in the markets we serve; the strength of housing and related markets; weather conditions; ability to retain and attract talent and key members of management; our relationship with and the performance of our channel partners; our ability to successfully identify, complete and integrate acquisitions; our ability to borrow or to refinance our existing indebtedness and availability of liquidity sufficient to meet our needs; changes in the value of goodwill or intangible assets; risks relating to product defects, product liability and recalls; claims or investigations by governmental or regulatory bodies; security breaches or other disruptions of our information technology systems; litigation and contingent liabilities; and other factors set forth under Item 1A. Risk Factors of our Annual Report on Form 10-K for the year ended December 31, 2017 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 the Company. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
###
XYLEM INC. AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENTS (Unaudited)
(in millions, except per share data)
Year Ended December 31, | 2018 | 2017 | 2016 | ||||||||
Revenue | $ | 5,207 | $ | 4,707 | $ | 3,771 | |||||
Cost of revenue | 3,181 | 2,860 | 2,309 | ||||||||
Gross profit | 2,026 | 1,847 | 1,462 | ||||||||
Selling, general and administrative expenses | 1,161 | 1,089 | 914 | ||||||||
Research and development expenses | 189 | 181 | 110 | ||||||||
Restructuring and asset impairment charges | 22 | 25 | 30 | ||||||||
Operating income | 654 | 552 | 408 | ||||||||
Interest expense | 82 | 82 | 70 | ||||||||
Other non-operating income, net | 13 | 6 | 2 | ||||||||
(Loss)/gain on sale of businesses | — | (10 | ) | — | |||||||
Income before taxes | 585 | 466 | 340 | ||||||||
Income tax expense | 36 | 136 | 80 | ||||||||
Net income | 549 | 330 | 260 | ||||||||
Less: Net loss attributable to non-controlling interests | — | (1 | ) | — | |||||||
Net income attributable to Xylem | $ | 549 | $ | 331 | $ | 260 | |||||
Earnings per share: | |||||||||||
Basic | $ | 3.05 | $ | 1.84 | $ | 1.45 | |||||
Diluted | $ | 3.03 | $ | 1.83 | $ | 1.45 | |||||
Weighted average number of shares: | |||||||||||
Basic | 179.8 | 179.6 | 179.1 | ||||||||
Diluted | 181.1 | 180.9 | 180.0 | ||||||||
Dividends declared per share | $ | 0.8400 | $ | 0.7200 | $ | 0.6196 | |||||
XYLEM INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (Unaudited)
(in millions, except per share amounts)
December 31, | 2018 | 2017 | |||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 296 | $ | 414 | |||
Receivables, less allowances for discounts, returns and doubtful accounts of $35 and $35 in 2018 and 2017, respectively | 1,031 | 956 | |||||
Inventories | 595 | 524 | |||||
Prepaid and other current assets | 172 | 177 | |||||
Total current assets | 2,094 | 2,071 | |||||
Property, plant and equipment, net | 656 | 643 | |||||
Goodwill | 2,976 | 2,768 | |||||
Other intangible assets, net | 1,232 | 1,168 | |||||
Other non-current assets | 264 | 210 | |||||
Total assets | $ | 7,222 | $ | 6,860 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 586 | $ | 549 | |||
Accrued and other current liabilities | 546 | 551 | |||||
Short-term borrowings and current maturities of long-term debt | 257 | — | |||||
Total current liabilities | 1,389 | 1,100 | |||||
Long-term debt, net | 2,051 | 2,200 | |||||
Accrued postretirement benefits | 400 | 442 | |||||
Deferred income tax liabilities | 303 | 252 | |||||
Other non-current accrued liabilities | 297 | 347 | |||||
Total liabilities | 4,440 | 4,341 | |||||
Stockholders’ equity: | |||||||
Common stock — par value $0.01 per share: | |||||||
Authorized 750.0 shares, issued 192.9 and 192.3 shares in 2018 and 2017, respectively | 2 | 2 | |||||
Capital in excess of par value | 1,950 | 1,912 | |||||
Retained earnings | 1,639 | 1,227 | |||||
Treasury stock – at cost 13.2 shares and 12.4 shares in 2018 and 2017, respectively | (487 | ) | (428 | ) | |||
Accumulated other comprehensive loss | (336 | ) | (210 | ) | |||
Total stockholders’ equity | 2,768 | 2,503 | |||||
Non-controlling interest | 14 | 16 | |||||
Total equity | 2,782 | 2,519 | |||||
Total liabilities and stockholders’ equity | $ | 7,222 | $ | 6,860 | |||
XYLEM INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(in millions)
Year Ended December 31, | 2018 | 2017 | 2016 | ||||||||
Operating Activities | |||||||||||
Net income | $ | 549 | $ | 330 | $ | 260 | |||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation | 117 | 109 | 87 | ||||||||
Amortization | 144 | 125 | 64 | ||||||||
Deferred income taxes | (47 | ) | (33 | ) | 14 | ||||||
Share-based compensation | 30 | 21 | 18 | ||||||||
Restructuring and asset impairment charges | 22 | 25 | 30 | ||||||||
Loss/(gain) from sale of businesses | — | 10 | — | ||||||||
Other, net | 9 | 19 | 6 | ||||||||
Payments for restructuring | (21 | ) | (28 | ) | (16 | ) | |||||
Contributions to postretirement benefit plans | (41 | ) | (33 | ) | (27 | ) | |||||
Changes in assets and liabilities (net of acquisitions): | |||||||||||
Changes in receivables | (103 | ) | (79 | ) | (6 | ) | |||||
Changes in inventories | (97 | ) | 27 | (15 | ) | ||||||
Changes in accounts payable | 51 | 50 | 61 | ||||||||
Changes in accrued liabilities | (6 | ) | 28 | 13 | |||||||
Changes in accrued taxes | — | 104 | (13 | ) | |||||||
Net changes in other assets and liabilities | (21 | ) | 11 | 21 | |||||||
Net Cash — Operating activities | 586 | 686 | 497 | ||||||||
Investing Activities | |||||||||||
Capital expenditures | (237 | ) | (170 | ) | (124 | ) | |||||
Proceeds from the sale of property, plant and equipment | — | 1 | 1 | ||||||||
Acquisitions of businesses and assets, net of cash acquired | (433 | ) | (33 | ) | (1,782 | ) | |||||
Proceeds from sale of businesses | 22 | 16 | — | ||||||||
Cash received from investments | 11 | 10 | — | ||||||||
Cash paid for investments | (11 | ) | (11 | ) | — | ||||||
Other, net | 5 | 6 | 19 | ||||||||
Net Cash — Investing activities | (643 | ) | (181 | ) | (1,886 | ) | |||||
Financing Activities | |||||||||||
Short-term debt issued | 335 | — | 274 | ||||||||
Short-term debt repaid, net | (52 | ) | (282 | ) | (80 | ) | |||||
Long-term debt issued, net | 1 | — | 1,540 | ||||||||
Long-term debt repaid | (120 | ) | — | (608 | ) | ||||||
Repurchase of common stock | (59 | ) | (25 | ) | (4 | ) | |||||
Proceeds from exercise of employee stock options | 7 | 16 | 24 | ||||||||
Excess tax benefit from share based compensation | — | — | — | ||||||||
Dividends paid | (152 | ) | (130 | ) | (112 | ) | |||||
Other, net | — | — | — | ||||||||
Net Cash — Financing activities | (40 | ) | (421 | ) | 1,034 | ||||||
Effect of exchange rate changes on cash | (21 | ) | 22 | (17 | ) | ||||||
Net change in cash and cash equivalents | (118 | ) | 106 | (372 | ) | ||||||
Cash and cash equivalents at beginning of year | 414 | 308 | 680 | ||||||||
Cash and cash equivalents at end of year | $ | 296 | $ | 414 | $ | 308 | |||||
Supplemental disclosure of cash flow information: | |||||||||||
Cash paid during the year for: | |||||||||||
Interest | $ | 78 | $ | 78 | $ | 49 | |||||
Income taxes (net of refunds received) | $ | 75 | $ | 57 | $ | 78 | |||||
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 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 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” reflects the adjustment to EBITDA to exclude share-based compensation charges, restructuring and realignment costs, Sensus acquisition related costs, gain or loss from sale of businesses and special charges.
"Adjusted Operating Income", "Adjusted Segment Operating Income", "Adjusted Net Income" and “Adjusted EPS” defined as operating income, segment operating income, adjusted net income and earnings per share, adjusted to exclude restructuring and realignment costs, Sensus acquisition related costs, gain or loss from 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 flow 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.
“Sensus Acquisition Related Costs" defined as costs incurred by the Company associated with the acquisition of Sensus that are being reported within operating income. These costs include integration costs, acquisition costs, costs related to the recognition of the backlog intangible asset amortization recorded in purchase accounting.
“Special charges" defined as costs incurred by the Company, such as acquisition and integration related costs not included in "Sensus Acquisition Related Costs", non-cash impairment charges, due diligence costs 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 | ||||||||||||||||||||
Orders | Orders | Change 2018 v. 2017 | % Change 2018 v. 2017 | Acquisitions/ Divestitures | FX Impact | Change Adj. 2018 v. 2017 | % Change Adj. 2018 v. 2017 | |||||||||||||||||||
2018 | 2017 | |||||||||||||||||||||||||
Year Ended December 31 | ||||||||||||||||||||||||||
Xylem Inc. | 5,437 | 4,868 | 569 | 12 | % | (88 | ) | (27 | ) | 454 | 9 | % | 11 | % | ||||||||||||
Water Infrastructure | 2,255 | 2,112 | 143 | 7 | % | — | (3 | ) | 140 | 7 | % | 7 | % | |||||||||||||
Applied Water | 1,557 | 1,476 | 81 | 5 | % | 12 | (10 | ) | 83 | 6 | % | 5 | % | |||||||||||||
Measurement & Control Solutions | 1,625 | 1,280 | 345 | 27 | % | (100 | ) | (14 | ) | 231 | 18 | % | 26 | % | ||||||||||||
Quarter Ended December 31 | ||||||||||||||||||||||||||
Xylem Inc. | 1,383 | 1,270 | 113 | 9 | % | (19 | ) | 35 | 129 | 10 | % | 12 | % | |||||||||||||
Water Infrastructure | 584 | 566 | 18 | 3 | % | — | 22 | 40 | 7 | % | 7 | % | ||||||||||||||
Applied Water | 395 | 373 | 22 | 6 | % | — | 8 | 30 | 8 | % | 8 | % | ||||||||||||||
Measurement & Control Solutions | 404 | 331 | 73 | 22 | % | (19 | ) | 5 | 59 | 18 | % | 24 | % | |||||||||||||
Quarter Ended September 30 | ||||||||||||||||||||||||||
Xylem Inc. | 1,356 | 1,249 | 107 | 9 | % | (27 | ) | 24 | 104 | 8 | % | 10 | % | |||||||||||||
Water Infrastructure | 537 | 558 | (21 | ) | -4 | % | — | 17 | (4 | ) | -1 | % | -1 | % | ||||||||||||
Applied Water | 377 | 374 | 3 | 1 | % | 2 | 5 | 10 | 3 | % | 2 | % | ||||||||||||||
Measurement & Control Solutions | 442 | 317 | 125 | 39 | % | (29 | ) | 2 | 98 | 31 | % | 40 | % | |||||||||||||
Quarter Ended June 30 | ||||||||||||||||||||||||||
Xylem Inc. | 1,378 | 1,212 | 166 | 14 | % | (34 | ) | (30 | ) | 102 | 8 | % | 11 | % | ||||||||||||
Water Infrastructure | 580 | 521 | 59 | 11 | % | — | (14 | ) | 45 | 9 | % | 9 | % | |||||||||||||
Applied Water | 401 | 375 | 26 | 7 | % | 4 | (9 | ) | 21 | 6 | % | 5 | % | |||||||||||||
Measurement & Control Solutions | 397 | 316 | 81 | 26 | % | (38 | ) | (7 | ) | 36 | 11 | % | 23 | % | ||||||||||||
Quarter Ended March 31 | ||||||||||||||||||||||||||
Xylem Inc. | 1,320 | 1,137 | 183 | 16 | % | (8 | ) | (56 | ) | 119 | 10 | % | 11 | % | ||||||||||||
Water Infrastructure | 554 | 467 | 87 | 19 | % | — | (28 | ) | 59 | 13 | % | 13 | % | |||||||||||||
Applied Water | 384 | 354 | 30 | 8 | % | 6 | (14 | ) | 22 | 6 | % | 5 | % | |||||||||||||
Measurement & Control Solutions | 382 | 316 | 66 | 21 | % | (14 | ) | (14 | ) | 38 | 12 | % | 16 | % | ||||||||||||
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 | ||||||||||||||||||||
Revenue | Revenue | Change 2018 v. 2017 | % Change 2018 v. 2017 | Acquisitions / Divestitures | FX Impact | Change Adj. 2018 v. 2017 | % Change Adj. 2018 v. 2017 | |||||||||||||||||||
2018 | 2017 | |||||||||||||||||||||||||
Year Ended December 31 | ||||||||||||||||||||||||||
Xylem Inc. | 5,207 | 4,707 | 500 | 11 | % | (87 | ) | (23 | ) | 390 | 8 | % | 10 | % | ||||||||||||
Water Infrastructure | 2,176 | 2,004 | 172 | 9 | % | — | 4 | 176 | 9 | % | 9 | % | ||||||||||||||
Applied Water | 1,534 | 1,421 | 113 | 8 | % | 10 | (10 | ) | 113 | 8 | % | 7 | % | |||||||||||||
Measurement & Control Solutions | 1,497 | 1,282 | 215 | 17 | % | (97 | ) | (17 | ) | 101 | 8 | % | 15 | % | ||||||||||||
Quarter Ended December 31 | ||||||||||||||||||||||||||
Xylem Inc. | 1,386 | 1,277 | 109 | 9 | % | (24 | ) | 36 | 121 | 9 | % | 11 | % | |||||||||||||
Water Infrastructure | 609 | 583 | 26 | 4 | % | — | 24 | 50 | 9 | % | 9 | % | ||||||||||||||
Applied Water | 402 | 373 | 29 | 8 | % | — | 8 | 37 | 10 | % | 10 | % | ||||||||||||||
Measurement & Control Solutions | 375 | 321 | 54 | 17 | % | (24 | ) | 4 | 34 | 11 | % | 18 | % | |||||||||||||
Quarter Ended September 30 | ||||||||||||||||||||||||||
Xylem Inc. | 1,287 | 1,195 | 92 | 8 | % | (22 | ) | 24 | 94 | 8 | % | 10 | % | |||||||||||||
Water Infrastructure | 541 | 520 | 21 | 4 | % | — | 18 | 39 | 8 | % | 8 | % | ||||||||||||||
Applied Water | 378 | 354 | 24 | 7 | % | 2 | 4 | 30 | 8 | % | 8 | % | ||||||||||||||
Measurement & Control Solutions | 368 | 321 | 47 | 15 | % | (24 | ) | 2 | 25 | 8 | % | 15 | % | |||||||||||||
Quarter Ended June 30 | ||||||||||||||||||||||||||
Xylem Inc. | 1,317 | 1,164 | 153 | 13 | % | (26 | ) | (29 | ) | 98 | 8 | % | 11 | % | ||||||||||||
Water Infrastructure | 546 | 482 | 64 | 13 | % | — | (13 | ) | 51 | 11 | % | 11 | % | |||||||||||||
Applied Water | 388 | 361 | 27 | 7 | % | 3 | (8 | ) | 22 | 6 | % | 5 | % | |||||||||||||
Measurement & Control Solutions | 383 | 321 | 62 | 19 | % | (29 | ) | (8 | ) | 25 | 8 | % | 17 | % | ||||||||||||
Quarter Ended March 31 | ||||||||||||||||||||||||||
Xylem Inc. | 1,217 | 1,071 | 146 | 14 | % | (15 | ) | (54 | ) | 77 | 7 | % | 9 | % | ||||||||||||
Water Infrastructure | 480 | 419 | 61 | 15 | % | — | (25 | ) | 36 | 9 | % | 9 | % | |||||||||||||
Applied Water | 366 | 333 | 33 | 10 | % | 5 | (14 | ) | 24 | 7 | % | 6 | % | |||||||||||||
Measurement & Control Solutions | 371 | 319 | 52 | 16 | % | (20 | ) | (15 | ) | 17 | 5 | % | 12 | % | ||||||||||||
Xylem Inc. Non-GAAP Reconciliation
Adjusted Operating Income
($ Millions)
Q1 | Q2 | Q3 | Q4 | YTD | ||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | |||||||||||||||
Total Revenue | ||||||||||||||||||||||||
• Total Xylem | 1,217 | 1,071 | 1,317 | 1,164 | 1,287 | 1,195 | 1,386 | 1,277 | 5,207 | 4,707 | ||||||||||||||
• Water Infrastructure | 480 | 419 | 546 | 482 | 541 | 520 | 609 | 583 | 2,176 | 2,004 | ||||||||||||||
• Applied Water | 366 | 333 | 388 | 361 | 378 | 354 | 402 | 373 | 1,534 | 1,421 | ||||||||||||||
• Measurement & Control Solutions | 371 | 319 | 383 | 321 | 368 | 321 | 375 | 321 | 1,497 | 1,282 | ||||||||||||||
Operating Income | ||||||||||||||||||||||||
• Total Xylem | 113 | 86 | 171 | 137 | 176 | 152 | 194 | 177 | 654 | 552 | ||||||||||||||
• Water Infrastructure | 49 | 41 | 92 | 74 | 99 | 91 | 119 | 106 | 359 | 312 | ||||||||||||||
• Applied Water | 50 | 36 | 61 | 48 | 59 | 50 | 66 | 60 | 236 | 194 | ||||||||||||||
• Measurement & Control Solutions | 33 | 25 | 31 | 29 | 31 | 27 | 23 | 29 | 118 | 110 | ||||||||||||||
• Total Segments | 132 | 102 | 184 | 151 | 189 | 168 | 208 | 195 | 713 | 616 | ||||||||||||||
Operating Margin | ||||||||||||||||||||||||
• Total Xylem | 9.3 | % | 8.0 | % | 13.0 | % | 11.8 | % | 13.7 | % | 12.7 | % | 14.0 | % | 13.9 | % | 12.6 | % | 11.7 | % | ||||
• Water Infrastructure | 10.2 | % | 9.8 | % | 16.8 | % | 15.4 | % | 18.3 | % | 17.5 | % | 19.5 | % | 18.2 | % | 16.5 | % | 15.6 | % | ||||
• Applied Water | 13.7 | % | 10.8 | % | 15.7 | % | 13.3 | % | 15.6 | % | 14.1 | % | 16.4 | % | 16.1 | % | 15.4 | % | 13.7 | % | ||||
• Measurement & Control Solutions | 8.9 | % | 7.8 | % | 8.1 | % | 9.0 | % | 8.4 | % | 8.4 | % | 6.1 | % | 9.0 | % | 7.9 | % | 8.6 | % | ||||
• Total Segments | 10.8 | % | 9.5 | % | 14.0 | % | 13.0 | % | 14.7 | % | 14.1 | % | 15.0 | % | 15.3 | % | 13.7 | % | 13.1 | % | ||||
Sensus Acquisition Related Costs | ||||||||||||||||||||||||
• Total Xylem | — | 10 | — | 4 | — | 5 | — | 3 | — | 22 | ||||||||||||||
• Water Infrastructure | — | — | — | — | — | — | — | — | — | — | ||||||||||||||
• Applied Water | — | — | — | — | — | — | — | — | — | — | ||||||||||||||
• Measurement & Control Solutions | — | 6 | — | 3 | — | 4 | — | 2 | — | 15 | ||||||||||||||
• Total Segments | — | 6 | — | 3 | — | 4 | — | 2 | — | 15 | ||||||||||||||
Special Charges | ||||||||||||||||||||||||
• Total Xylem | 6 | 5 | 1 | — | 1 | 3 | 4 | 3 | 12 | 11 | ||||||||||||||
• Water Infrastructure | — | — | — | — | — | — | 2 | — | 2 | — | ||||||||||||||
• Applied Water | — | 5 | — | — | — | — | — | — | — | 5 | ||||||||||||||
• Measurement & Control Solutions | 2 | — | 1 | — | — | — | 2 | — | 5 | — | ||||||||||||||
• Total Segments | 2 | 5 | 1 | — | — | — | 4 | — | 7 | 5 | ||||||||||||||
Restructuring & Realignment Costs | ||||||||||||||||||||||||
• Total Xylem | 16 | 11 | 10 | 12 | 11 | 9 | 11 | 9 | 48 | 41 | ||||||||||||||
• Water Infrastructure | 5 | 4 | 5 | 5 | 5 | 3 | 5 | 4 | 20 | 16 | ||||||||||||||
• Applied Water | 3 | 4 | 2 | 5 | 2 | 5 | 3 | 3 | 10 | 17 | ||||||||||||||
• Measurement & Control Solutions | 8 | 3 | 3 | 2 | 4 | 1 | 3 | 2 | 18 | 8 | ||||||||||||||
• Total Segments | 16 | 11 | 10 | 12 | 11 | 9 | 11 | 9 | 48 | 41 | ||||||||||||||
Adjusted Operating Income | ||||||||||||||||||||||||
• Total Xylem | 135 | 112 | 182 | 153 | 188 | 169 | 209 | 192 | 714 | 626 | ||||||||||||||
• Water Infrastructure | 54 | 45 | 97 | 79 | 104 | 94 | 126 | 110 | 381 | 328 | ||||||||||||||
• Applied Water | 53 | 45 | 63 | 53 | 61 | 55 | 69 | 63 | 246 | 216 | ||||||||||||||
• Measurement & Control Solutions | 43 | 34 | 35 | 34 | 35 | 32 | 28 | 33 | 141 | 133 | ||||||||||||||
• Total Segments | 150 | 124 | 195 | 166 | 200 | 181 | 223 | 206 | 768 | 677 | ||||||||||||||
Adjusted Operating Margin | ||||||||||||||||||||||||
• Total Xylem | 11.1 | % | 10.5 | % | 13.8 | % | 13.1 | % | 14.6 | % | 14.1 | % | 15.1 | % | 15.0 | % | 13.7 | % | 13.3 | % | ||||
• Water Infrastructure | 11.3 | % | 10.7 | % | 17.8 | % | 16.4 | % | 19.2 | % | 18.1 | % | 20.7 | % | 18.9 | % | 17.5 | % | 16.4 | % | ||||
• Applied Water | 14.5 | % | 13.5 | % | 16.2 | % | 14.7 | % | 16.1 | % | 15.5 | % | 17.2 | % | 16.9 | % | 16.0 | % | 15.2 | % | ||||
• Measurement & Control Solutions | 11.6 | % | 10.7 | % | 9.1 | % | 10.6 | % | 9.5 | % | 10.0 | % | 7.5 | % | 10.3 | % | 9.4 | % | 10.4 | % | ||||
• Total Segments | 12.3 | % | 11.6 | % | 14.8 | % | 14.3 | % | 15.5 | % | 15.1 | % | 16.1 | % | 16.1 | % | 14.7 | % | 14.4 | % | ||||
Note: 2017 amounts have been restated in accordance with the adoption of the new guidance on presentation of net periodic benefit costs. | ||||
Xylem Inc. Non-GAAP Reconciliation
Adjusted Diluted EPS
($ Millions, except per share amounts)
Q4 2018 | Q4 2017 | ||||||||||||||||||||||
As Reported | Adjustments | Adjusted | As Reported | Adjustments | Adjusted | ||||||||||||||||||
Total Revenue | 1,386 | — | 1,386 | 1,277 | — | 1,277 | |||||||||||||||||
Operating Income | 194 | 15 | a | 209 | 177 | 15 | a | 192 | |||||||||||||||
Operating Margin | 14.0 | % | 15.1 | % | 13.9 | % | 15.0 | % | |||||||||||||||
Interest Expense | (19 | ) | — | (19 | ) | (20 | ) | — | (20 | ) | |||||||||||||
Other Non-Operating Income (Expense) | 4 | 1 | 5 | (1 | ) | 2 | c | 1 | |||||||||||||||
Gain/(Loss) from sale of businesses | — | — | — | (14 | ) | 14 | — | ||||||||||||||||
Income before Taxes | 179 | 16 | 195 | 142 | 31 | 173 | |||||||||||||||||
Provision for Income Taxes | 46 | (82 | ) | b | (36 | ) | (72 | ) | 36 | b | (36 | ) | |||||||||||
Income attributable to minority interest | — | — | — | 1 | (1 | ) | d | — | |||||||||||||||
Net Income attributable to Xylem | 225 | (66 | ) | 159 | 71 | 66 | 137 | ||||||||||||||||
Diluted Shares | 181.0 | 181.0 | 181.3 | 181.3 | |||||||||||||||||||
Diluted EPS | $ | 1.24 | $ | (0.36 | ) | $ | 0.88 | $ | 0.38 | $ | 0.38 | $ | 0.76 | ||||||||||
Year-over-year currency translation impact on current year diluted EPS | $ | (0.02 | ) | — | $ | (0.02 | ) | ||||
Diluted EPS at Constant Currency | $ | 1.26 | $ | (0.36 | ) | $ | 0.9 | ||||
Q4 YTD 2018 | Q4 YTD 2017 | ||||||||||||||||||||||
As Reported | Adjustments | Adjusted | As Reported | Adjustments | Adjusted | ||||||||||||||||||
Total Revenue | 5,207 | — | 5,207 | 4,707 | — | 4,707 | |||||||||||||||||
Operating Income | 654 | 60 | a | 714 | 552 | 74 | a | 626 | |||||||||||||||
Operating Margin | 12.6 | % | 13.7 | % | 11.7 | % | 13.3 | % | |||||||||||||||
Interest Expense | (82 | ) | — | (82 | ) | (82 | ) | — | (82 | ) | |||||||||||||
Other Non-Operating Income (Expense) | 13 | 1 | 14 | 6 | 2 | c | 8 | ||||||||||||||||
Gain/(Loss) from sale of businesses | — | — | — | (10 | ) | 10 | — | ||||||||||||||||
Income before Taxes | 585 | 61 | 646 | 466 | 86 | 552 | |||||||||||||||||
Provision for Income Taxes | (36 | ) | (88 | ) | b | (124 | ) | (136 | ) | 17 | b | (119 | ) | ||||||||||
Income attributable to minority interest | — | — | — | 1 | (1 | ) | d | — | |||||||||||||||
Net Income attributable to Xylem | 549 | (27 | ) | 522 | 331 | 102 | 433 | ||||||||||||||||
Diluted Shares | 181.1 | 181.1 | 180.9 | 180.9 | |||||||||||||||||||
Diluted EPS | $ | 3.03 | $ | (0.15 | ) | $ | 2.88 | $ | 1.83 | $ | 0.57 | $ | 2.40 | ||||||||||
Year-over-year currency translation impact on current year diluted EPS | $ | 0.05 | — | $ | 0.05 | ||||||
Diluted EPS at Constant Currency | $ | 2.98 | $ | (0.15 | ) | $ | 2.83 | ||||
Note: 2017 amounts have been restated in accordance with the adoption of the new guidance on presentation of net periodic benefit costs. | ||||
a | QTD: Restructuring & realignment costs of $11 million and $9 million in 2018 and 2017, respectively; special charges of $4 million in 2018 ($2 million of acquisition related costs and $2 million of asset impairment) and $3 million of acquisition related costs in 2017; and $3 million of Sensus acquisition related costs in 2017. |
YTD: Restructuring & realignment costs of $48 million and $41 million in 2018 and 2017, respectively; special charges of $12 million in 2018 ($10 million acquisition of related costs and $2 million of asset impairment) and $11 million n 2017 ($5 million of asset impairment, $3 million of due diligence costs and $3 of other acquisition costs); and 2017 Sensus acquisition related costs of $22 million. | |
b | QTD: Net tax impact on restructuring & realignment costs of $2 million in both 2018 and 2017; net tax impact on special charges of $0 million and $1 million in 2018 and 2017, respectively; net tax impact on 2017 Sensus acquisition related costs of $1 million; and tax-related special items of $80 million of expense and $40 million of benefit in 2018 and 2017, respectively. |
YTD: Net tax impact on restructuring & realignment costs of $12 million and $13 million in 2018 and 2017, respectively; net tax impact on special charges of $1 million and $4 million in 2018 and 2017, respectively; net tax impact of $8 million on 2017 Sensus acquisition related costs; net tax impact of $2 million benefit on the gain from sale of business in 2017; and tax-related special items of $75 million of expense and $40 million of benefit in 2018 and 2017, respectively. | |
c | Special charges of a write-down of investment in joint venture of $2 million in the fourth quarter of 2017. |
d | Special item consisting of minority interest income attributable to the loss on a joint venture held for sale in the fourth quarter of 2017. |
Xylem Inc. Non-GAAP Reconciliation
Net Cash - Operating Activities vs. Free Cash Flow
($ Millions)
Q1 | Q2 | Q3 | Q4 | Year Ended | |||||||||||||||||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | ||||||||||||||||||||||||||||||
Net Cash - Operating Activities | $ | 63 | $ | 52 | $ | 138 | $ | 99 | $ | 187 | $ | 228 | $ | 198 | $ | 307 | $ | 586 | $ | 686 | |||||||||||||||||||
Capital Expenditures | (61 | ) | (43 | ) | (50 | ) | (34 | ) | (60 | ) | (42 | ) | (66 | ) | (51 | ) | (237 | ) | (170 | ) | |||||||||||||||||||
Free Cash Flow | $ | 2 | $ | 9 | $ | 88 | $ | 65 | $ | 127 | $ | 186 | $ | 132 | $ | 256 | $ | 349 | $ | 516 | |||||||||||||||||||
Cash paid for Sensus acquisition related costs | (1 | ) | (17 | ) | — | (5 | ) | — | (1 | ) | — | (5 | ) | (1 | ) | (28 | ) | ||||||||||||||||||||||
Free Cash Flow, excluding Sensus Acquisition Related Costs | $ | 3 | $ | 26 | $ | 88 | $ | 70 | $ | 127 | $ | 187 | $ | 132 | $ | 261 | $ | 350 | $ | 544 | |||||||||||||||||||
Net Income | 79 | 56 | 115 | 100 | 130 | 104 | 225 | 70 | 549 | 330 | |||||||||||||||||||||||||||||
Gain/(Loss) from sale of businesses | — | 5 | (2 | ) | — | 2 | (1 | ) | — | (14 | ) | — | (10 | ) | |||||||||||||||||||||||||
Special Charges - non-cash impairment | — | (5 | ) | — | — | — | — | (2 | ) | (2 | ) | (2 | ) | (7 | ) | ||||||||||||||||||||||||
Sensus acquisition related costs | — | (10 | ) | — | (4 | ) | — | (5 | ) | — | (3 | ) | — | (22 | ) | ||||||||||||||||||||||||
Net Income, excluding gain on sale of businesses, non-cash impairment charges and Sensus Acquisition Related Costs | $ | 79 | $ | 66 | $ | 117 | $ | 104 | $ | 128 | $ | 110 | $ | 227 | $ | 89 | $ | 551 | $ | 369 | |||||||||||||||||||
Free Cash Flow Conversion | 4 | % | 39 | % | 75 | % | 67 | % | 99 | % | 170 | % | 58 | % | 293 | % | 64 | % | 147 | % | |||||||||||||||||||
Xylem Inc. Non-GAAP Reconciliation
EBITDA and Adjusted EBITDA by Quarter
($ Millions)
2018 | ||||||||||||||
Q1 | Q2 | Q3 | Q4 | Total | ||||||||||
Net Income | 79 | 115 | 130 | 225 | 549 | |||||||||
Income Tax Expense | 16 | 35 | 31 | (46 | ) | 36 | ||||||||
Interest Expense (Income), net | 20 | 20 | 20 | 18 | 78 | |||||||||
Depreciation | 29 | 29 | 29 | 30 | 117 | |||||||||
Amortization | 38 | 36 | 34 | 36 | 144 | |||||||||
EBITDA | 182 | 235 | 244 | 263 | 924 | |||||||||
Share-based Compensation | 9 | 7 | 7 | 7 | 30 | |||||||||
Restructuring & Realignment | 16 | 9 | 11 | 11 | 47 | |||||||||
Loss/(Gain) from sale of business | — | 2 | (2 | ) | — | — | ||||||||
Special Charges | 6 | 1 | 1 | 4 | 12 | |||||||||
Adjusted EBITDA | 213 | 254 | 261 | 285 | 1,013 | |||||||||
Revenue | 1,217 | 1,317 | 1,287 | 1,386 | 5,207 | |||||||||
Adjusted EBITDA Margin | 17.5 | % | 19.3 | % | 20.3 | % | 20.6 | % | 19.5 | % | ||||
2017 | ||||||||||||||
Q1 | Q2 | Q3 | Q4 | Total | ||||||||||
Net Income | 56 | 100 | 104 | 70 | 330 | |||||||||
Income Tax Expense | 14 | 21 | 27 | 74 | 136 | |||||||||
Interest Expense (Income), net | 20 | 20 | 20 | 19 | 79 | |||||||||
Depreciation | 28 | 27 | 28 | 26 | 109 | |||||||||
Amortization | 31 | 30 | 30 | 34 | 125 | |||||||||
EBITDA | 149 | 198 | 209 | 223 | 779 | |||||||||
Share-based Compensation | 6 | 5 | 5 | 5 | 21 | |||||||||
Restructuring & Realignment | 11 | 12 | 9 | 9 | 41 | |||||||||
Loss/(Gain) from sale of business | (5 | ) | — | 1 | 14 | 10 | ||||||||
Sensus Acquisition Related Costs | 7 | 2 | 3 | 2 | 14 | |||||||||
Special Charges | 5 | — | 3 | 5 | 13 | |||||||||
Adjusted EBITDA | 173 | 217 | 230 | 258 | 878 | |||||||||
Revenue | 1,071 | 1,164 | 1,195 | 1,277 | 4,707 | |||||||||
Adjusted EBITDA Margin | 16.2 | % | 18.6 | % | 19.2 | % | 20.2 | % | 18.7 | % | ||||
Xylem Inc. Non-GAAP Reconciliation
EBITDA and Adjusted EBITDA by Quarter
Water Infrastructure
($ Millions)
2018 | ||||||||||||||
Q1 | Q2 | Q3 | Q4 | Total | ||||||||||
Pre-Tax Income | 47 | 90 | 98 | 117 | 352 | |||||||||
Interest Expense (Income), net | — | (1 | ) | (1 | ) | — | (2 | ) | ||||||
Depreciation | 12 | 11 | 12 | 11 | 46 | |||||||||
Amortization | 5 | 5 | 5 | 5 | 20 | |||||||||
EBITDA | 64 | 105 | 114 | 133 | 416 | |||||||||
Share-based Compensation | 1 | — | 1 | — | 2 | |||||||||
Restructuring & Realignment | 5 | 5 | 5 | 5 | 20 | |||||||||
Special Charges | — | 2 | 2 | |||||||||||
Adjusted EBITDA | 70 | 110 | 120 | 140 | 440 | |||||||||
Revenue | 480 | 546 | 541 | 609 | 2,176 | |||||||||
Adjusted EBITDA Margin | 14.6 | % | 20.1 | % | 22.2 | % | 23.0 | % | 20.2 | % | ||||
2017 | ||||||||||||||
Q1 | Q2 | Q3 | Q4 | Total | ||||||||||
Pre-Tax Income | 39 | 73 | 90 | 105 | 307 | |||||||||
Interest Expense (Income), net | — | — | (1 | ) | (1 | ) | (2 | ) | ||||||
Depreciation | 11 | 11 | 12 | 11 | 45 | |||||||||
Amortization | 5 | 4 | 5 | 5 | 19 | |||||||||
EBITDA | 55 | 88 | 106 | 120 | 369 | |||||||||
Share-based Compensation | 1 | — | — | 1 | 2 | |||||||||
Restructuring & Realignment | 4 | 5 | 3 | 4 | 16 | |||||||||
Adjusted EBITDA | 60 | 93 | 109 | 125 | 387 | |||||||||
Revenue | 419 | 482 | 520 | 583 | 2,004 | |||||||||
Adjusted EBITDA Margin | 14.3 | % | 19.3 | % | 21.0 | % | 21.4 | % | 19.3 | % | ||||
Note: 2017 amounts have been restated in accordance with the adoption of the new guidance on presentation of net periodic benefit costs. | ||||
Xylem Inc. Non-GAAP Reconciliation
EBITDA and Adjusted EBITDA by Quarter
Applied Water
($ Millions)
2018 | ||||||||||||||
Q1 | Q2 | Q3 | Q4 | Total | ||||||||||
Pre-Tax Income | 50 | 61 | 60 | 66 | 237 | |||||||||
Interest Expense (Income), net | — | — | — | — | — | |||||||||
Depreciation | 5 | 5 | 5 | 5 | 20 | |||||||||
Amortization | — | 1 | 1 | — | 2 | |||||||||
EBITDA | 55 | 67 | 66 | 71 | 259 | |||||||||
Share-based Compensation | 1 | 1 | — | 1 | 3 | |||||||||
Restructuring & Realignment | 3 | 2 | 2 | 3 | 10 | |||||||||
Adjusted EBITDA | 59 | 70 | 68 | 75 | 272 | |||||||||
Revenue | 366 | 388 | 378 | 402 | 1,534 | |||||||||
Adjusted EBITDA Margin | 16.1 | % | 18.0 | % | 18.0 | % | 18.7 | % | 17.7 | % | ||||
2017 | ||||||||||||||
Q1 | Q2 | Q3 | Q4 | Total | ||||||||||
Pre-Tax Income | 40 | 49 | 49 | 62 | 200 | |||||||||
Interest Expense (Income), net | — | — | — | — | — | |||||||||
Depreciation | 5 | 5 | 5 | 5 | 20 | |||||||||
Amortization | 1 | 1 | 1 | — | 3 | |||||||||
EBITDA | 46 | 55 | 55 | 67 | 223 | |||||||||
Share-based Compensation | — | 1 | 1 | — | 2 | |||||||||
Restructuring & Realignment | 4 | 5 | 5 | 3 | 17 | |||||||||
Loss/(Gain) from sale of business | (5 | ) | — | 1 | (2 | ) | (6 | ) | ||||||
Special Charges | 5 | — | — | — | 5 | |||||||||
Adjusted EBITDA | 50 | 61 | 62 | 68 | 241 | |||||||||
Revenue | 333 | 361 | 354 | 373 | 1,421 | |||||||||
Adjusted EBITDA Margin | 15.0 | % | 16.9 | % | 17.5 | % | 18.2 | % | 17.0 | % | ||||
Note: 2017 amounts have been restated in accordance with the adoption of the new guidance on presentation of net periodic benefit costs. | ||||
Xylem Inc. Non-GAAP Reconciliation
EBITDA and Adjusted EBITDA by Quarter
Measurement & Control Solutions
($ Millions)
2018 | ||||||||||||||
Q1 | Q2 | Q3 | Q4 | Total | ||||||||||
Pre-Tax Income | 33 | 28 | 33 | 23 | 117 | |||||||||
Interest Expense (Income), net | — | — | — | (1 | ) | (1 | ) | |||||||
Depreciation | 8 | 9 | 8 | 10 | 35 | |||||||||
Amortization | 29 | 27 | 26 | 27 | 109 | |||||||||
EBITDA | 70 | 64 | 67 | 59 | 260 | |||||||||
Share-based Compensation | 1 | 1 | 1 | 1 | 4 | |||||||||
Restructuring & Realignment | 8 | 3 | 4 | 3 | 18 | |||||||||
Loss/(Gain) from sale of business | — | 2 | (2 | ) | — | — | ||||||||
Special Charges | 2 | 1 | — | 2 | 5 | |||||||||
Adjusted EBITDA | 81 | 71 | 70 | 65 | 287 | |||||||||
Revenue | 371 | 383 | 368 | 375 | 1,497 | |||||||||
Adjusted EBITDA Margin | 21.8 | % | 18.5 | % | 19.0 | % | 17.3 | % | 19.2 | % | ||||
2017 | ||||||||||||||
Q1 | Q2 | Q3 | Q4 | Total | ||||||||||
Pre-Tax Income | 24 | 30 | 26 | 11 | 91 | |||||||||
Interest Expense (Income), net | — | — | — | (1 | ) | (1 | ) | |||||||
Depreciation | 8 | 8 | 7 | 7 | 30 | |||||||||
Amortization | 23 | 22 | 22 | 25 | 92 | |||||||||
EBITDA | 55 | 60 | 55 | 42 | 212 | |||||||||
Share-based Compensation | — | 1 | — | 1 | 2 | |||||||||
Restructuring & Realignment | 3 | 2 | 1 | 2 | 8 | |||||||||
Loss from sale of business | — | — | — | 16 | 16 | |||||||||
Sensus Acquisition Related Costs | 3 | 1 | 2 | 1 | 7 | |||||||||
Special Charges | — | — | — | 2 | 2 | |||||||||
Adjusted EBITDA | 61 | 64 | 58 | 64 | 247 | |||||||||
Revenue | 319 | 321 | 321 | 321 | 1,282 | |||||||||
Adjusted EBITDA Margin | 19.1 | % | 19.9 | % | 18.1 | % | 19.9 | % | 19.3 | % | ||||
Note: 2017 amounts have been restated in accordance with the adoption of the new guidance on presentation of net periodic benefit costs. | ||||