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United States securities and exchange commission logo
August 22, 2022
Sandra Rowland
Chief Financial Officer
Xylem Inc.
1 International Drive
Rye Brook, NY 10573
Re: Xylem Inc.
Form 10-K for the
Year Ended December 31, 2021
Filed February 25,
2022
Form 8-K furnished
August 2, 2022
File No. 001-35229
Dear Ms. Rowland:
We have reviewed your August 15, 2022 response to our comment
letter and have the
following comments. In some of our comments, we may ask you to provide
us with information
so we may better understand your disclosure.
Please respond to these comments within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comments apply to your facts and circumstances, please tell us why in
your response.
After reviewing your response to these comments, we may have
additional
comments. Unless we note otherwise, our references to prior comments are
to comments in our
August 1, 2022 letter.
Form 10-K for the Year Ended December 31, 2021
Management's Discussion and Analysis of Financial Condition and Results
of Operations
Key Performance Indicators and Non-GAAP Measures, page 36
1. We note from your
response to prior comment 3 that the special charges in fiscal 2020
are comprised of
goodwill and asset impairment charges, net of tax. Please revise to
include any income tax
adjustments as a separate line item in your non-GAAP
reconciliation and
explain how the tax impact is calculated. Refer to Question 102.11 of
the non-GAAP C&DIs.
Sandra Rowland
Xylem Inc.
August 22, 2022
Page 2
Results of Operations, page 39
2. We note your response to prior comment 6 and we continue to believe that
your results of
operations discussion should be significantly enhanced to provide a
quantified discussion
of the factors impacting your GAAP operating income. In this regard,
operating income
increased $218 million during fiscal 2021, which you appear to attribute
to a $132 million
decrease in special charges and restructuring and realignment costs.
Similarly, operating
income decreased $146 million during the second quarter of fiscal 2022 of
which you
attribute $3 million to increased special changes and realignment costs.
Your reference to
other qualitative factors impacting your adjusted operating income does
not provide
sufficient information regarding how your GAAP operating income has been
impacted by
factors such as productivity, restructuring initiatives, favorable volume
and price
realization or by offsetting factors such as cost inflation or strategic
initiatives. Please
revise both here and in your segment discussion and avoid using terms
such as "primarily"
or "partially offset." This comment also applies to your response to
prior comment 4.
Form 8-K furnished on August 2, 2022
Exhibit 99.1, page 1
3. We note your proposed revised disclosures in response to prior comment 7.
Please further
revise your discussion of the net income margin to include the basis
point change in such
measure, similar to that of your adjusted EBITDA margin. Please provide
us with the
proposed revised disclosures that you intend to include in future
earnings releases in
response to this matter as well as the segment discussion addressed in
our prior comment.
In addition, we note that you added adjusted EBITDA margin and the
increase in such
measure to your highlighted bullet points in your recent Form 8-K
earnings release.
Please confirm that to the extent you highlight any non-GAAP measures,
you will also
highlight the comparable GAAP measure with greater prominence. Refer to
Question
102.10 of the non-GAAP C&DIs.
You may contact David Edgar, Senior Staff Accountant, at (202) 551-3459
or Kathleen
Collins, Accounting Branch Chief, at (202) 551-3499 if you have questions.
Sincerely,
FirstName LastNameSandra Rowland
Division of
Corporation Finance
Comapany NameXylem Inc.
Office of
Technology
August 22, 2022 Page 2
cc: Dorothy Capers
FirstName LastName