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“Our team delivered solid results this quarter, with project deliveries
driving better than expected performance,” said
Decker continued, “We are executing a balanced capital deployment
strategy. During the quarter, we opportunistically repurchased
During the third quarter 2015, Xylem repurchased 2.3 million shares of
common stock under its stock repurchase programs. As of
Full-year 2015 Outlook
Xylem continues to expect full-year 2015 revenue of approximately
Expectations for full-year 2015 adjusted earnings per share continue to
be in the range of
Third 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.
Applied Water
Xylem’s Applied Water segment consists of its portfolio of businesses in residential and commercial building services, and industrial and agricultural applications.
Supplemental information on Xylem’s third 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" 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, 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 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, revenue, 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: economic, political and other risks associated with
our international operations, including military actions, economic
sanctions or trade 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
key members of management; our relationship with and the performance of
our channel partners; 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; governmental
investigations; security breaches or other disruptions of our
information technology systems; litigation and contingent liabilities;
and other factors set forth under “Item 1A. Risk Factors” in our Annual
Report on Form 10-K for the year ended December 31, 2014 and with
subsequent filings we make with the
All forward-looking statements made herein are based on information available to the Company as of the date of this press release. 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 CONDENSED CONSOLIDATED INCOME STATEMENTS (Unaudited) (in millions, except per share data) |
||||||||||||||||||||||||
Three Months | Nine Months | |||||||||||||||||||||||
For the periods ended September 30, | 2015 | 2014 | 2015 | 2014 | ||||||||||||||||||||
Revenue | $ | 902 | $ | 963 | $ | 2,659 | $ | 2,874 | ||||||||||||||||
Cost of revenue | 551 | 587 | 1,645 | 1,768 | ||||||||||||||||||||
Gross profit | 351 | 376 | 1,014 | 1,106 | ||||||||||||||||||||
Selling, general and administrative expenses | 207 | 222 | 631 | 688 | ||||||||||||||||||||
Research and development expenses | 23 | 24 | 71 | 78 | ||||||||||||||||||||
Restructuring charges | 1 | — | 5 | 18 | ||||||||||||||||||||
Operating income | 120 | 130 | 307 | 322 | ||||||||||||||||||||
Interest expense | 13 | 14 | 41 | 41 | ||||||||||||||||||||
Other non-operating income, net | — | 1 | — | 1 | ||||||||||||||||||||
Gain from sale of businesses | — | 11 | 9 | 11 | ||||||||||||||||||||
Income before taxes | 107 | 128 | 275 | 293 | ||||||||||||||||||||
Income tax expense | 19 | 22 | 49 | 52 | ||||||||||||||||||||
Net income | $ | 88 | $ | 106 | $ | 226 | $ | 241 | ||||||||||||||||
Earnings per share: | ||||||||||||||||||||||||
Basic | $ | 0.48 | $ | 0.58 | $ | 1.25 | $ | 1.31 | ||||||||||||||||
Diluted | $ | 0.48 | $ | 0.58 | $ | 1.24 | $ | 1.31 | ||||||||||||||||
Weighted average number of shares: | ||||||||||||||||||||||||
Basic | 180.8 | 182.2 | 181.5 | 183.4 | ||||||||||||||||||||
Diluted | 181.6 | 183.4 | 182.3 | 184.6 | ||||||||||||||||||||
Dividends declared per share | $ | 0.1408 | $ | 0.1280 | $ | 0.4224 | $ | 0.3840 | ||||||||||||||||
XYLEM INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (in millions, except per share amounts) |
|||||||||||||
September 30, 2015 |
December 31, 2014 |
||||||||||||
ASSETS | |||||||||||||
Current assets: | |||||||||||||
Cash and cash equivalents | $ | 611 | $ | 663 | |||||||||
Receivables, less allowances for discounts and doubtful accounts of $29 and $34 in 2015 and 2014, respectively |
762 | 771 | |||||||||||
Inventories | 477 | 486 | |||||||||||
Prepaid and other current assets | 132 | 144 | |||||||||||
Deferred income tax assets | 35 | 38 | |||||||||||
Total current assets | 2,017 | 2,102 | |||||||||||
Property, plant and equipment, net | 418 | 461 | |||||||||||
Goodwill | 1,584 | 1,635 | |||||||||||
Other intangible assets, net | 434 | 470 | |||||||||||
Other non-current assets | 192 | 192 | |||||||||||
Total assets | $ | 4,645 | $ | 4,860 | |||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||||
Current liabilities: | |||||||||||||
Accounts payable | $ | 314 | $ | 338 | |||||||||
Accrued and other current liabilities | 422 | 481 | |||||||||||
Short-term borrowings and current maturities of long-term debt | 79 | 89 | |||||||||||
Total current liabilities | 815 | 908 | |||||||||||
Long-term debt | 1,196 | 1,195 | |||||||||||
Accrued postretirement benefits | 374 | 388 | |||||||||||
Deferred income tax liabilities | 141 | 158 | |||||||||||
Other non-current accrued liabilities | 76 | 84 | |||||||||||
Total liabilities | 2,602 | 2,733 | |||||||||||
Stockholders’ equity: | |||||||||||||
Common Stock – par value $0.01 per share: | |||||||||||||
Authorized 750.0 shares, issued 189.8 shares and 188.9 shares in 2015 and 2014, respectively | 2 | 2 | |||||||||||
Capital in excess of par value | 1,822 | 1,796 | |||||||||||
Retained earnings | 796 | 648 | |||||||||||
Treasury stock – at cost 10.4 shares and 6.6 shares in 2015 and 2014, respectively | (348 | ) | (220 | ) | |||||||||
Accumulated other comprehensive loss | (229 | ) | (99 | ) | |||||||||
Total stockholders’ equity | 2,043 | 2,127 | |||||||||||
Total liabilities and stockholders’ equity | $ | 4,645 | $ | 4,860 | |||||||||
XYLEM INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in millions) |
|||||||||||||
For the nine months ended September 30, | 2015 | 2014 | |||||||||||
Operating Activities | |||||||||||||
Net income | $ | 226 | $ | 241 | |||||||||
Adjustments to reconcile net income to net cash provided by operating activities: |
|||||||||||||
Depreciation | 69 | 70 | |||||||||||
Amortization | 33 | 37 | |||||||||||
Share-based compensation | 11 | 14 | |||||||||||
Restructuring charges | 5 | 18 | |||||||||||
Gain from sale of businesses | (9 | ) | (11 | ) | |||||||||
Other, net | 10 | (2 | ) | ||||||||||
Payments for restructuring | (11 | ) | (20 | ) | |||||||||
Changes in assets and liabilities (net of acquisitions): | |||||||||||||
Changes in receivables | (32 | ) | (40 | ) | |||||||||
Changes in inventories | (15 | ) | (62 | ) | |||||||||
Changes in accounts payable | 6 | (2 | ) | ||||||||||
Other, net | (33 | ) | 10 | ||||||||||
Net Cash – Operating activities | 260 | 253 | |||||||||||
Investing Activities | |||||||||||||
Capital expenditures | (78 | ) | (77 | ) | |||||||||
Proceeds from sale of businesses | 1 | 30 | |||||||||||
Proceeds from the sale of property, plant and equipment | 1 | 2 | |||||||||||
Other, net | 2 | — | |||||||||||
Net Cash – Investing activities | (74 | ) | (45 | ) | |||||||||
Financing Activities | |||||||||||||
(Repayment) issuance of short-term debt | (3 | ) | 2 | ||||||||||
Repurchase of common stock | (128 | ) | (132 | ) | |||||||||
Proceeds from exercise of employee stock options | 14 | 17 | |||||||||||
Dividends paid | (77 | ) | (71 | ) | |||||||||
Other, net | — | 2 | |||||||||||
Net Cash – Financing activities | (194 | ) | (182 | ) | |||||||||
Effect of exchange rate changes on cash | (44 | ) | (30 | ) | |||||||||
Net change in cash and cash equivalents | (52 | ) | (4 | ) | |||||||||
Cash and cash equivalents at beginning of year | 663 | 533 | |||||||||||
Cash and cash equivalents at end of period | $ | 611 | $ | 529 | |||||||||
Supplemental disclosure of cash flow information: | |||||||||||||
Cash paid during the period for: | |||||||||||||
Interest | $ | 37 | $ | 36 | |||||||||
Income taxes (net of refunds received) | $ | 57 | $ | 69 | |||||||||
Xylem Inc. Non-GAAP Measures |
Management views 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 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. 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 operations 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 portions of our business that did not meet the criteria for classification as a discontinued operation or insignificant portions of our business that we did not classify as a discontinued operation. The period-over-period change resulting from foreign currency fluctuations assumes no change in exchange rates from the prior period. |
“Constant currency” defined as financial results adjusted for 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 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 legal and professional fees, associated with the Korea matters, as well as costs incurred for the contractual indemnification of tax obligations to ITT. |
“Tax-related special items" defined as tax items, such as tax return versus tax provision adjustments, tax exam impacts, tax law change impacts 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 2015 v. 2014 |
% Change 2015 v. 2014 |
Acquisitions / Divestitures |
FX Contribution |
Change Adj. 2015 v. 2014 |
% Change Adj. 2015 v. 2014 |
|||||||||||||||||||||||||||||||
2015 | 2014 | |||||||||||||||||||||||||||||||||||||
Nine Months Ended September 30 |
||||||||||||||||||||||||||||||||||||||
Xylem Inc. | 2,798 | 3,051 | (253 | ) | -8 | % | 10 | 257 | 14 | 0 | % | 0 | % | |||||||||||||||||||||||||
Water Infrastructure | 1,737 | 1,915 | (178 | ) | -9 | % | - | 192 | 14 | 1 | % | 1 | % | |||||||||||||||||||||||||
Applied Water | 1,061 | 1,136 | (75 | ) | -7 | % | 10 | 65 | - | 0 | % | -1 | % | |||||||||||||||||||||||||
Quarter Ended September 30 |
||||||||||||||||||||||||||||||||||||||
Xylem Inc. | 939 | 1,027 | (88 | ) | -9 | % | - | 88 | - | 0 | % | 0 | % | |||||||||||||||||||||||||
Water Infrastructure | 590 | 664 | (74 | ) | -11 | % | - | 68 | (6 | ) | -1 | % | -1 | % | ||||||||||||||||||||||||
Applied Water | 349 | 363 | (14 | ) | -4 | % | - | 20 | 6 | 2 | % | 2 | % | |||||||||||||||||||||||||
Quarter Ended June 30 |
||||||||||||||||||||||||||||||||||||||
Xylem Inc. | 944 | 1,031 | (87 | ) | -8 | % | 5 | 92 | 10 | 1 | % | 0 | % | |||||||||||||||||||||||||
Water Infrastructure | 585 | 654 | (69 | ) | -11 | % | - | 69 | - | 0 | % | 0 | % | |||||||||||||||||||||||||
Applied Water | 359 | 377 | (18 | ) | -5 | % | 5 | 24 | 11 | 3 | % | 2 | % | |||||||||||||||||||||||||
Quarter Ended March 31 |
||||||||||||||||||||||||||||||||||||||
Xylem Inc. | 915 | 993 | (78 | ) | -8 | % | 5 | 77 | 4 | 0 | % | 0 | % | |||||||||||||||||||||||||
Water Infrastructure | 562 | 597 | (35 | ) | -6 | % | - | 55 | 20 | 3 | % | 3 | % | |||||||||||||||||||||||||
Applied Water | 353 | 396 | (43 | ) | -11 | % | 5 | 21 | (17 | ) | -4 | % | -6 | % | ||||||||||||||||||||||||
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 2015 v. 2014 |
% Change 2015 v. 2014 |
Acquisitions / Divestitures |
FX Contribution |
Change Adj. 2015 v. 2014 |
% Change Adj. 2015 v. 2014 |
|||||||||||||||||||||||||||||||||
2015 | 2014 | |||||||||||||||||||||||||||||||||||||||
Nine Months Ended September 30 |
||||||||||||||||||||||||||||||||||||||||
Xylem Inc. | 2,659 | 2,874 | (215 | ) | -7 | % | 11 | 243 | 39 | 1 | % | 1 | % | |||||||||||||||||||||||||||
Water Infrastructure | 1,602 | 1,770 | (168 | ) | -9 | % | - | 180 | 12 | 1 | % | 1 | % | |||||||||||||||||||||||||||
Applied Water | 1,057 | 1,104 | (47 | ) | -4 | % | 11 | 63 | 27 | 2 | % | 1 | % | |||||||||||||||||||||||||||
Quarter Ended September 30 |
||||||||||||||||||||||||||||||||||||||||
Xylem Inc. | 902 | 963 | (61 | ) | -6 | % | - | 81 | 20 | 2 | % | 2 | % | |||||||||||||||||||||||||||
Water Infrastructure | 551 | 602 | (51 | ) | -8 | % | - | 61 | 10 | 2 | % | 2 | % | |||||||||||||||||||||||||||
Applied Water | 351 | 361 | (10 | ) | -3 | % | - | 20 | 10 | 3 | % | 3 | % | |||||||||||||||||||||||||||
Quarter Ended June 30 |
||||||||||||||||||||||||||||||||||||||||
Xylem Inc. | 920 | 1,005 | (85 | ) | -8 | % | 6 | 89 | 10 | 1 | % | 0 | % | |||||||||||||||||||||||||||
Water Infrastructure | 551 | 616 | (65 | ) | -11 | % | - | 65 | - | 0 | % | 0 | % | |||||||||||||||||||||||||||
Applied Water | 369 | 389 | (20 | ) | -5 | % | 6 | 24 | 10 | 3 | % | 1 | % | |||||||||||||||||||||||||||
Quarter Ended March 31 |
||||||||||||||||||||||||||||||||||||||||
Xylem Inc. | 837 | 906 | (69 | ) | -8 | % | 5 | 73 | 9 | 1 | % | 0 | % | |||||||||||||||||||||||||||
Water Infrastructure | 500 | 552 | (52 | ) | -9 | % | - | 54 | 2 | 0 | % | 0 | % | |||||||||||||||||||||||||||
Applied Water | 337 | 354 | (17 | ) | -5 | % | 5 | 19 | 7 | 2 | % | 1 | % | |||||||||||||||||||||||||||
Xylem Inc. Non-GAAP Reconciliation | |||||||||||||||||||||||||||||||||||||
Adjusted Operating Income | |||||||||||||||||||||||||||||||||||||
($ Millions) | |||||||||||||||||||||||||||||||||||||
Q1 | Q2 | Q3 | YTD | ||||||||||||||||||||||||||||||||||
` |
2015 |
2014 |
2015 |
2014 |
2015 |
2014 |
2015 |
2014 |
|||||||||||||||||||||||||||||
Total Revenue | |||||||||||||||||||||||||||||||||||||
• Total Xylem | 837 | 906 | 920 | 1,005 | 902 | 963 | 2,659 | 2,874 | |||||||||||||||||||||||||||||
• Water Infrastructure | 500 | 552 | 551 | 616 |
|
551 | 602 |
|
1,602 | 1,770 | |||||||||||||||||||||||||||
• Applied Water | 337 | 354 | 369 | 389 |
|
351 | 361 |
|
1,057 | 1,104 | |||||||||||||||||||||||||||
Operating Income | |||||||||||||||||||||||||||||||||||||
• Total Xylem | 83 | 76 | 104 | 116 | 120 | 130 | 307 | 322 | |||||||||||||||||||||||||||||
• Water Infrastructure | 47 | 46 | 65 | 76 |
|
83 | 95 |
|
195 | 217 | |||||||||||||||||||||||||||
• Applied Water | 46 | 41 | 51 | 53 |
|
46 | 51 |
|
143 | 145 | |||||||||||||||||||||||||||
• Total Segments | 93 | 87 | 116 | 129 | 129 | 146 | 338 | 362 | |||||||||||||||||||||||||||||
Operating Margin | |||||||||||||||||||||||||||||||||||||
• Total Xylem | 9.9 | % | 8.4 | % | 11.3 | % | 11.5 | % | 13.3 | % | 13.5 | % | 11.5 | % | 11.2 | % | |||||||||||||||||||||
• Water Infrastructure | 9.4 | % | 8.3 | % | 11.8 | % | 12.3 | % | 15.1 | % | 15.8 | % | 12.2 | % | 12.3 | % | |||||||||||||||||||||
• Applied Water | 13.6 | % | 11.6 | % | 13.8 | % | 13.6 | % | 13.1 | % | 14.1 | % | 13.5 | % | 13.1 | % | |||||||||||||||||||||
• Total Segments | 11.1 | % | 9.6 | % | 12.6 | % | 12.8 | % | 14.3 | % | 15.2 | % | 12.7 | % | 12.6 | % | |||||||||||||||||||||
Special Charges | |||||||||||||||||||||||||||||||||||||
• Total Xylem | 1 | - | - | - | - | - | 1 | - | |||||||||||||||||||||||||||||
• Water Infrastructure | 1 | - | - | - | - | - | 1 | - | |||||||||||||||||||||||||||||
• Applied Water | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||
• Total Segments | 1 | - | - | - | - | - | 1 | - | |||||||||||||||||||||||||||||
Restructuring & Realignment Costs | |||||||||||||||||||||||||||||||||||||
• Total Xylem | 6 | 18 | 6 | 9 | 4 | 4 | 16 | 31 | |||||||||||||||||||||||||||||
• Water Infrastructure | 5 | 12 | 4 | 5 | 2 | 3 | 11 | 20 | |||||||||||||||||||||||||||||
• Applied Water | 1 | 6 | 2 | 4 | 2 | 1 | 5 | 11 | |||||||||||||||||||||||||||||
• Total Segments | 6 | 18 | 6 | 9 | 4 | 4 | 16 | 31 | |||||||||||||||||||||||||||||
Adjusted Operating Income* | |||||||||||||||||||||||||||||||||||||
• Total Xylem | 90 | 94 | 110 | 125 | 124 | 134 | 324 | 353 | |||||||||||||||||||||||||||||
• Water Infrastructure | 53 | 58 | 69 | 81 |
|
85 | 98 |
|
207 | 237 | |||||||||||||||||||||||||||
• Applied Water | 47 | 47 | 53 | 57 |
|
48 | 52 |
|
148 | 156 | |||||||||||||||||||||||||||
• Total Segments | 100 | 105 | 122 | 138 | 133 | 150 | 355 | 393 | |||||||||||||||||||||||||||||
Adjusted Operating Margin* | |||||||||||||||||||||||||||||||||||||
• Total Xylem | 10.8 | % | 10.4 | % | 12.0 | % | 12.4 | % | 13.7 | % | 13.9 | % | 12.2 | % | 12.3 | % | |||||||||||||||||||||
• Water Infrastructure | 10.6 | % | 10.5 | % | 12.5 | % | 13.1 | % | 15.4 | % | 16.3 | % | 12.9 | % | 13.4 | % | |||||||||||||||||||||
• Applied Water | 13.9 | % | 13.3 | % | 14.4 | % | 14.7 | % | 13.7 | % | 14.4 | % | 14.0 | % | 14.1 | % | |||||||||||||||||||||
• Total Segments | 11.9 | % | 11.6 | % | 13.3 | % | 13.7 | % | 14.7 | % | 15.6 | % | 13.4 | % | 13.7 | % | |||||||||||||||||||||
*Adjusted Operating Income excludes restructuring & realignment costs and special charges. |
|||||||||||||||||||||||||||||||||||||
Xylem Inc. Non-GAAP Reconciliation | |||||||||||||||||||||||||||||||||||||||
Adjusted Diluted EPS | |||||||||||||||||||||||||||||||||||||||
($ Millions, except per share amounts) | |||||||||||||||||||||||||||||||||||||||
Q3 2014 | Q3 2015 | ||||||||||||||||||||||||||||||||||||||
As Reported | Adjustments | Adjusted | As Reported | Adjustments | Adjusted | ||||||||||||||||||||||||||||||||||
Total Revenue | 963 | 963 | 902 | 902 | |||||||||||||||||||||||||||||||||||
Operating Income | 130 | 4 | a | 134 | 120 | 4 | a | 124 | |||||||||||||||||||||||||||||||
Operating Margin | 13.5 | % | 13.9 | % | 13.3 | % | 13.7 | % | |||||||||||||||||||||||||||||||
Interest Expense | (14 | ) | (14 | ) | (13 | ) | (13 | ) | |||||||||||||||||||||||||||||||
Other Non-Operating Income (Expense) | 1 | 1 | - | 2 | b | 2 | |||||||||||||||||||||||||||||||||
Gain from sale of business | 11 | (11 | ) | - | - | - | - | ||||||||||||||||||||||||||||||||
Income before Taxes | 128 | (7 | ) | 121 | 107 | 6 | 113 | ||||||||||||||||||||||||||||||||
Provision for Income Taxes | (22 | ) | (2 | ) | c | (24 | ) | (19 | ) | (4 | ) | c | (23 | ) | |||||||||||||||||||||||||
Net Income | 106 | (9 | ) | 97 | 88 | 2 | 90 | ||||||||||||||||||||||||||||||||
Diluted Shares | 183.4 | 183.4 | 181.6 | 181.6 | |||||||||||||||||||||||||||||||||||
Diluted EPS | $ | 0.58 | $ | (0.05 | ) | $ | 0.53 | $ | 0.48 | $ | 0.01 | $ | 0.49 | ||||||||||||||||||||||||||
Currency translation impact on current year diluted EPS | $ | (0.06 | ) | $ | (0.06 | ) | |||||||||||||||||||||||||||||||||
Diluted EPS at Constant Currency | $ | 0.54 | $ | 0.55 | |||||||||||||||||||||||||||||||||||
Q3 YTD 2014 | Q3 YTD 2015 | ||||||||||||||||||||||||||||||||||||||
As Reported | Adjustments | Adjusted | As Reported | Adjustments | Adjusted | ||||||||||||||||||||||||||||||||||
Total Revenue | 2,874 | 2,874 | 2,659 | 2,659 | |||||||||||||||||||||||||||||||||||
Operating Income | 322 | 31 | a | 353 | 307 | 17 | a | 324 | |||||||||||||||||||||||||||||||
Operating Margin | 11.2 | % | 12.3 | % | 11.5 | % | 12.2 | % | |||||||||||||||||||||||||||||||
Interest Expense | (41 | ) | (41 | ) | (41 | ) | (41 | ) | |||||||||||||||||||||||||||||||
Other Non-Operating Income (Expense) | 1 | 1 | - | 4 | b | 4 | |||||||||||||||||||||||||||||||||
Gain from sale of businesses | 11 | (11 | ) | - | 9 | (9 | ) | 0 | |||||||||||||||||||||||||||||||
Income before Taxes | 293 | 20 | 313 | 275 | 12 | 287 | |||||||||||||||||||||||||||||||||
Provision for Income Taxes | (52 | ) | (13 | ) | c | (65 | ) | (49 | ) | (10 | ) | c | (59 | ) | |||||||||||||||||||||||||
Net Income | 241 | 7 | 248 | 226 | 2 | 228 | |||||||||||||||||||||||||||||||||
Diluted Shares | 184.6 | 184.6 | 182.3 | 182.3 | |||||||||||||||||||||||||||||||||||
Diluted EPS | $ | 1.31 | $ | 0.04 | $ | 1.35 | $ | 1.24 | $ | 0.01 | $ | 1.25 | |||||||||||||||||||||||||||
Currency translation impact on current year diluted EPS | $ | (0.17 | ) | $ | (0.17 | ) | |||||||||||||||||||||||||||||||||
Diluted EPS at Constant Currency | $ | 1.41 | $ | 1.42 | |||||||||||||||||||||||||||||||||||
a | Restructuring & realignment costs in 2014 and 2015 and special charges in 2015 | ||||||||||||||||||||||||||||||||||||||
b | Special charges | ||||||||||||||||||||||||||||||||||||||
c | Net tax impact of restructuring & realignment costs and special charges, and tax-related special items | ||||||||||||||||||||||||||||||||||||||
Xylem Inc. Non-GAAP Reconciliation | ||||||||||||||||||||||||||||||||||||||||||||||||||
Net Cash - Operating Activities vs. Free Cash Flow | ||||||||||||||||||||||||||||||||||||||||||||||||||
($ Millions) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Q1 | Q2 | Q3 | Nine Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||
2015 | 2014 | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 | |||||||||||||||||||||||||||||||||||||||||||
Net Cash - Operating Activities | $ | 39 | $ | 22 | $ | 84 | $ | 76 | $ | 137 | $ | 155 | $ | 260 | $ | 253 | ||||||||||||||||||||||||||||||||||
Capital Expenditures | (37 | ) | (25 | ) | (20 | ) | (23 | ) | (21 | ) | (29 | ) | (78 | ) | (77 | ) | ||||||||||||||||||||||||||||||||||
Free Cash Flow | $ | 2 | $ | (3 | ) | $ | 64 | $ | 53 | $ | 116 | $ | 126 | $ | 182 | $ | 176 | |||||||||||||||||||||||||||||||||
Net Income | 64 | 49 | 74 | 86 | 88 | 106 | 226 | 241 | ||||||||||||||||||||||||||||||||||||||||||
Gain from sale of businesses | 9 | - | - | - | - | 11 | 9 | 11 | ||||||||||||||||||||||||||||||||||||||||||
Net Income, excluding gain on sale of businesses | $ | 55 | $ | 49 | $ | 74 | $ | 86 | $ | 88 | $ | 95 | $ | 217 | $ | 230 | ||||||||||||||||||||||||||||||||||
Free Cash Flow Conversion | 4 | % | -6 | % | 86 | % | 62 | % | 132 | % | 133 | % | 84 | % | 77 | % | ||||||||||||||||||||||||||||||||||
View source version on businesswire.com: http://www.businesswire.com/news/home/20151029005454/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
Xylem