- Revenue of $2.1 billion, up 1% on a reported and organic
basis
- Earnings per share of $0.89, up 41%; $1.11 on an adjusted
basis, up 12%
- Updated full-year revenue guidance of $8.5 billion, up
approximately 15% YoY, with organic revenue growth of ~5%
- Narrowing full-year adjusted EPS guidance to $4.22 to $4.24,
from $4.18 to $4.28
Xylem Inc. (NYSE: XYL), a leading global water technology
company that empowers customers and communities to build a more
water-secure world, today reported third-quarter results. The
Company’s total revenue was $2.1 billion, up one percent on a
reported and organic basis, and third-quarter earnings per share
were up 41 percent on a reported basis and 12 percent on an
adjusted basis. Orders grew 8 percent on a reported and organic
basis.
“The team delivered strong results in the quarter, with earnings
at the high end of guidance, and margin expansion beating our
expectations,” said Matthew Pine, Xylem’s President and CEO.
“Demand remained resilient, reflected in robust orders growth in
all segments, and a healthy book-to-bill. Moderated organic revenue
growth in the quarter was driven largely by project timing.”
“Outperformance on margin and earnings was further reinforced by
momentum in our integration of Evoqua and by initial impacts from
our broader simplification efforts,” Pine continued. “Evoqua
integration is ahead of schedule and synergy capture continues to
accelerate, giving us confidence in closing the year above target.
As a result, we are narrowing our full-year earnings guidance, with
continuing focus on sustainable, high-quality earnings and
profitable growth.”
Net income was $217 million, or $0.89 per share. Net income
margin increased 300 basis points to 10.3 percent. These results
are driven by strong operational performance. Adjusted net income
was $269 million, or $1.11 per share, which excludes the impacts of
amortization of acquired intangible assets, restructuring and
realignment costs, gain/loss from sale of businesses, special
charges, and tax-related special items.
Third-quarter adjusted earnings before interest, tax,
depreciation, and amortization (EBITDA) margin was 21.2 percent,
reflecting a year-over-year increase of 140 basis points.
Productivity savings and price drove the margin expansion,
exceeding the impact of inflation, strategic investments and
mix.
Outlook
Xylem expects full-year 2024 revenue of $8.5 billion, up
approximately 15 percent on a reported basis and up approximately 5
percent on an organic basis.
Full-year 2024 adjusted EBITDA margin is expected to be
approximately 20.5 percent. This results in adjusted earnings per
share of $4.22 to $4.24 from the previous range of $4.18 to $4.28.
Full-year free cash flow conversion to net income is expected to be
at least 120 percent.
Further 2024 planning assumptions are included in Xylem’s
third-quarter earnings materials posted at www.xylem.com/investors.
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.
Supplemental information on Xylem’s third-quarter earnings and
reconciliations for certain non-GAAP items is posted at
www.xylem.com/investors.
About Xylem
Xylem (XYL) is a Fortune 500 global water solutions company that
empowers customers and communities to build a more water-secure
world. Our 23,000 diverse employees delivered combined pro forma
revenue of $8.1 billion in 2023, optimizing water and resource
management with innovation and expertise. Join us at www.xylem.com
and Let’s Solve Water.
Forward-Looking Statements
This press release contains “forward-looking statements" within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. Generally, the words “anticipate,” “estimate,” “expect,”
“project,” “intend,” “plan,” "contemplate," "predict," “forecast,”
“likely,” “believe,” “target,” “will,” “could,” “would,” “should,”
"potential," "may" and similar expressions or their negative, may,
but are not necessary to, identify forward-looking statements. By
their nature, forward-looking statements address uncertain matters
and include any statements that: are not historical, such as
statements about our strategy, financial plans, outlook,
objectives, plans, intentions or goals (including those related to
our social, environmental and other sustainability goals); or
address possible or future results of operations or financial
performance, including statements relating to orders, revenues,
operating margins and earnings per share growth.
Although we believe that the expectations reflected in any of
our forward-looking statements are reasonable, actual results could
differ materially from those projected or assumed in any of our
forward-looking statements. Our future financial condition and
results of operations, as well as any forward-looking statements,
are subject to change and to inherent risks and uncertainties, many
of which are beyond our control. Important factors that could cause
our actual results, performance and achievements, or industry
results to differ materially from estimates or projections
contained in or implied by our forward-looking statements include,
among others, the following: the impact of overall industry and
general economic conditions, including industrial, governmental,
and public and private sector spending, interest rates, inflation
and related monetary policy by governments in response to
inflation, and the strength of the residential and commercial real
estate markets, on economic activity and our operations;
geopolitical events, including the ongoing and possible escalation
of the conflicts involving Russia and Ukraine, and the Middle East,
as well as regulatory, economic and other risks associated with our
global sales and operations, including those related to domestic
content requirements applicable to projects receiving governmental
funding; manufacturing and operating cost increases due to
macroeconomic conditions, including inflation, energy supply,
supply chain shortages, logistics challenges, tight labor markets,
prevailing price changes, tariffs and other factors; demand for our
products, disruption, competition or pricing pressures in the
markets we serve; cybersecurity incidents or other disruptions of
information technology systems on which we rely, or involving our
connected products and services; lack of availability or delays in
receiving parts and raw materials from our supply chain, including
electronic components (in particular, semiconductors); disruptions
in operations at our facilities or that of third parties upon which
we rely; uncertainty related to the realization of the benefits and
synergies from our acquisition of Evoqua Water Technologies Corp.;
safe and compliant treatment and handling of water, wastewater and
hazardous materials; failure to successfully execute large
projects, including with respect to meeting performance guarantees
and customers’ budgets, timelines and safety requirements; our
ability to retain and attract leadership and other diverse and key
talent, as well as competition for overall talent and labor;
defects, security, warranty and liability claims, and recalls
related to our products; uncertainty around restructuring and
realignment actions and related costs and savings; our ability to
execute strategic investments for growth, including related to
acquisitions and divestitures; availability, regulation or
interference with radio spectrum used by certain of our products;
volatility in served markets or impacts on our business and
operations due to weather conditions, including the effects of
climate change; risks related to our sustainability commitments and
related disclosures; fluctuations in foreign currency exchange
rates; difficulty predicting our financial results; risk of future
impairments to goodwill and other intangible assets; changes in our
effective tax rates or tax expenses; financial market risks related
to our pension and other defined benefit plans; failure to comply
with, or changes in, laws or regulations, including those
pertaining to our business conduct, operations, products and
services, including anti-corruption, data privacy and security,
trade, competition, the environment, climate change and health and
safety; legal, governmental or regulatory claims, investigations or
proceedings and associated contingent liabilities; matters related
to intellectual property infringement or expiration of rights; and
other factors set forth under “Item 1A. Risk Factors” in our Annual
Report on Form 10-K for the year ended December 31, 2023 ("2023
Annual Report") and in subsequent filings we make with the
Securities and Exchange Commission (“SEC”).
Forward-looking and other statements in this press release
regarding our environmental and other sustainability plans and
goals are not an indication that these statements are necessarily
material to investors, to our business, operating results,
financial condition, outlook, or strategy, to our impacts on
sustainability matters or other parties, or are required to be
disclosed in our filings with the SEC. In addition, historical,
current, and forward-looking social, environmental and
sustainability-related statements may be based on standards for
measuring progress that are still developing, internal controls and
processes that continue to evolve, and assumptions that are subject
to change in the future. All forward-looking statements made herein
are based on information currently available to us as of the date
of this press release. We undertake 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,
2024
2023
2024
2023
Revenue from products
$
1,744
$
1,720
$
5,236
$
4,535
Revenue from services
360
356
1,070
711
Revenue
2,104
2,076
6,306
5,246
Cost of revenue from products
1,047
1,043
3,147
2,730
Cost of revenue from services
273
269
804
555
Cost of revenue
1,320
1,312
3,951
3,285
Gross profit
784
764
2,355
1,961
Selling, general and administrative
expenses
445
491
1,404
1,291
Research and development expenses
55
61
172
172
Restructuring and asset impairment
charges
4
21
37
57
Operating income
280
191
742
441
Interest expense
10
14
35
35
Other non-operating income, net
1
8
11
19
(Loss) on sale of businesses
(2
)
—
(6
)
—
Income before taxes
269
185
712
425
Income tax expense
52
33
148
82
Net income
$
217
$
152
$
564
$
343
Earnings per share:
Basic
$
0.89
$
0.63
$
2.33
$
1.64
Diluted
$
0.89
$
0.63
$
2.32
$
1.63
Weighted average number of shares:
Basic
242.9
240.9
242.5
208.9
Diluted
243.8
242.2
243.4
210.1
XYLEM INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED
BALANCE SHEETS (Unaudited) (in millions, except per share
amounts)
September 30,
2024
December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents
$
989
$
1,019
Receivables, less allowances for
discounts, returns and credit losses of $60 and $56 in 2024 and
2023, respectively
1,707
1,617
Inventories
1,091
1,018
Prepaid and other current assets
226
230
Total current assets
4,013
3,884
Property, plant and equipment, net
1,158
1,169
Goodwill
7,593
7,587
Other intangible assets, net
2,326
2,529
Other non-current assets
956
943
Total assets
$
16,046
$
16,112
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable
$
930
$
968
Accrued and other current liabilities
1,105
1,221
Short-term borrowings and current
maturities of long-term debt
17
16
Total current liabilities
2,052
2,205
Long-term debt
1,977
2,268
Accrued post-retirement benefits
332
344
Deferred income tax liabilities
535
557
Other non-current accrued liabilities
550
562
Total liabilities
5,446
5,936
Stockholders’ equity:
Common stock – par value $0.01 per
share:
Authorized 750.0 shares, issued 259.2
shares and 257.6 shares in 2024 and 2023, respectively
3
3
Capital in excess of par value
8,673
8,564
Retained earnings
2,902
2,601
Treasury stock – at cost 16.2 shares and
16.0 shares in 2024 and 2023, respectively
(753
)
(733
)
Accumulated other comprehensive loss
(232
)
(269
)
Total stockholders’ equity
10,593
10,166
Non-controlling interests
7
10
Total equity
10,600
10,176
Total liabilities and stockholders’
equity
$
16,046
$
16,112
XYLEM INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS (Unaudited) (in millions)
For the nine months ended September
30,
2024
2023
Operating Activities
Net income
$
564
$
343
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation
191
132
Amortization
229
167
Share-based compensation
43
45
Restructuring and asset impairment
charges
37
57
Loss from sale of business
6
—
Other, net
(4
)
(20
)
Payments for restructuring
(24
)
(12
)
Changes in assets and liabilities (net of
acquisitions):
Changes in receivables
(101
)
(142
)
Changes in inventories
(88
)
(41
)
Changes in accounts payable
(31
)
15
Changes in accrued and deferred taxes
(11
)
(77
)
Other, net
(123
)
(85
)
Net Cash – Operating activities
688
382
Investing Activities
Capital expenditures
(221
)
(177
)
Acquisitions of businesses, net of cash
acquired
(5
)
(476
)
Proceeds from sale of business
11
103
Proceeds from the sale of property, plant
and equipment
3
2
Cash received from investments
5
1
Cash paid for investments
(8
)
(1
)
Cash paid for equity investments
(4
)
(58
)
Cash received from interest rate swaps
—
38
Cash received from cross-currency
swaps
25
25
Other, net
1
4
Net Cash – Investing activities
(193
)
(539
)
Financing Activities
Short-term debt issued, net
—
1
Short-term debt repaid
(268
)
—
Long-term debt issued, net
—
275
Long-term debt repaid
(13
)
(155
)
Repurchase of common stock
(19
)
(10
)
Proceeds from exercise of employee stock
options
66
45
Dividends paid
(263
)
(219
)
Other, net
(23
)
(8
)
Net Cash – Financing activities
(520
)
(71
)
Effect of exchange rate changes on
cash
(5
)
(11
)
Net change in cash and cash
equivalents
(30
)
(239
)
Cash and cash equivalents at beginning of
year
1,019
944
Cash and cash equivalents at end of
period
$
989
$
705
Supplemental disclosure of cash flow
information:
Cash paid during the period for:
Interest
$
49
$
43
Income taxes (net of refunds received)
$
160
$
159
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 items
to represent the non-GAAP measures that we consider to be key
performance indicators, as well as the related reconciling items to
the most directly comparable measure calculated and presented in
accordance with GAAP. The non-GAAP measures may not be comparable
to similarly titled measures reported by other companies.
“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 or discontinuance 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” and
"Adjusted
Segment EBITDA" reflect the adjustments to EBITDA and segment
EBITDA, respectively, to exclude share-based compensation charges,
restructuring and realignment costs, gain or loss from sale of
businesses and special charges.
"Adjusted EBITDA
Margin" and
"Adjusted Segment EBITDA Margin" defined as
adjusted EBITDA and adjusted segment EBITDA divided by total
revenue and segment revenue, respectively.
"Adjusted
Operating Income", "Adjusted Segment Operating Income", "Adjusted
Net Income" and “Adjusted EPS” defined as operating income,
segment operating income, net income and earnings per share,
adjusted to exclude restructuring and realignment costs,
amortization of acquired intangible assets, gain or loss from sale
of businesses, special charges and tax-related special items, as
applicable.
"Adjusted Operating Margin" and
"Adjusted Segment Operating Margin" defined as adjusted
operating income and adjusted segment operating income divided by
total revenue and segment revenue, respectively.
“Free
Cash Flow” defined as net cash from operating activities, as
reported in the Statement of Cash Flows, less capital expenditures,
and "Free Cash Flow Conversion" defined as Free Cash Flows divided
by net income, excluding the gain on sale of businesses and other
non-recurring, significant non-cash impacts, such as non-cash
impairment charges and significant deferred tax items. Our
definitions of "free cash flow" and "free cash flow conversion" do
not consider certain non-discretionary cash payments, such as debt.
"Adjusted Free Cash Flow" defined as free cash flow
adjusted for significant cash items for which the corresponding
income statement impact does not occur within the same fiscal year.
“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 non-recurring costs
incurred by the Company, such as those related to acquisitions and
integrations, divestitures and non-cash impairment charges.
“Tax-related special items" defined as tax items, such as
tax return versus tax provision adjustments, tax exam impacts, tax
law change impacts, excess tax benefits/losses and other discrete
tax adjustments.
Xylem Inc. Non-GAAP Reconciliation Reported
vs. Organic and Constant Currency Orders ($ Millions)
(As
Reported - GAAP) (As Adjusted - Organic) Constant
Currency (A) (B) (C) (D) (E) = B+C+D (F) = E/A (G) = (E - C) /
A Change % Change Acquisitions /Divestitures Change % Change Orders
Orders 2024 v. 2023 2024 v. 2023 Book-to-Bill FX Impact Adj. 2024
v. 2023 Adj. 2024 v. 2023
2024
2023
Nine Months Ended September 30 Xylem Inc.
6,534
5,457
1,077
20
%
104
%
(886
)
6
197
4
%
20
%
Water Infrastructure
2,036
1,680
356
21
%
111
%
(243
)
(1
)
112
7
%
21
%
Applied Water
1,382
1,350
32
2
%
103
%
-
3
35
3
%
3
%
Measurement and Control Solutions
1,199
1,228
(29
)
(2
%)
86
%
-
(1
)
(30
)
(2
%)
(2
%)
Water Solutions and Services
1,917
1,199
718
60
%
110
%
(643
)
5
80
7
%
60
%
Quarter Ended September 30 Xylem Inc.
2,201
2,031
170
8
%
105
%
-
(4
)
166
8
%
8
%
Water Infrastructure
700
656
44
7
%
112
%
-
(4
)
40
6
%
6
%
Applied Water
437
422
15
4
%
98
%
-
-
15
4
%
4
%
Measurement and Control Solutions
386
343
43
13
%
84
%
-
(2
)
41
12
%
12
%
Water Solutions and Services
678
610
68
11
%
118
%
-
2
70
11
%
11
%
Quarter Ended June 30 Xylem Inc.
2,087
1,856
231
12
%
96
%
(265
)
11
(23
)
(1
%)
13
%
Water Infrastructure
690
563
127
23
%
109
%
(89
)
5
43
8
%
23
%
Applied Water
465
445
20
4
%
102
%
-
3
23
5
%
5
%
Measurement and Control Solutions
384
470
(86
)
(18
%)
80
%
-
1
(85
)
(18
%)
(18
%)
Water Solutions and Services
548
378
170
45
%
91
%
(176
)
2
(4
)
(1
%)
46
%
Quarter Ended March 31 Xylem Inc.
2,246
1,570
676
43
%
110
%
(621
)
(1
)
54
3
%
43
%
Water Infrastructure
646
461
185
40
%
113
%
(154
)
(2
)
29
6
%
40
%
Applied Water
480
483
(3
)
(1
%)
110
%
-
-
(3
)
(1
%)
(1
%)
Measurement and Control Solutions
429
415
14
3
%
93
%
-
-
14
3
%
3
%
Water Solutions and Services
691
211
480
227
%
123
%
(467
)
1
14
7
%
228
%
Xylem Inc. Non-GAAP Reconciliation Reported vs. Organic and
Constant Currency Revenue ($ Millions)
(As Reported -
GAAP) (As Adjusted - Organic) Constant Currency
(A) (B) (C) (D) (E) = B+C+D (F) = E/A (G) = (E - C) / A Change
% Change
Acquisitions /Divestitures Change % Change Revenue Revenue 2024 v.
2023
2024 v. 2023
FX Impact Adj. 2024 v. 2023 Adj. 2024 v. 2023
2024
2023
Nine Months Ended September 30 Xylem Inc.
6,306
5,246
1,060
20
%
(782
)
5
283
5
%
20
%
Water Infrastructure
1,828
1,541
287
19
%
(221
)
-
66
4
%
19
%
Applied Water
1,339
1,396
(57
)
(4
%)
-
1
(56
)
(4
%)
(4
%)
Measurement and Control Solutions
1,402
1,175
227
19
%
-
-
227
19
%
19
%
Water Solutions and Services
1,737
1,134
603
53
%
(561
)
4
46
4
%
54
%
Quarter Ended September 30 Xylem Inc.
2,104
2,076
28
1
%
-
(6
)
22
1
%
1
%
Water Infrastructure
623
612
11
2
%
-
(5
)
6
1
%
1
%
Applied Water
447
465
(18
)
(4
%)
-
(2
)
(20
)
(4
%)
(4
%)
Measurement and Control Solutions
458
413
45
11
%
-
(1
)
44
11
%
11
%
Water Solutions and Services
576
586
(10
)
(2
%)
-
2
(8
)
(1
%)
(1
%)
Quarter Ended June 30 Xylem Inc.
2,169
1,722
447
26
%
(302
)
13
158
9
%
27
%
Water Infrastructure
631
519
112
22
%
(84
)
6
34
7
%
23
%
Applied Water
456
478
(22
)
(5
%)
-
4
(18
)
(4
%)
(4
%)
Measurement and Control Solutions
482
384
98
26
%
-
2
100
26
%
26
%
Water Solutions and Services
600
341
259
76
%
(218
)
1
42
12
%
76
%
Quarter Ended March 31 Xylem Inc.
2,033
1,448
585
40
%
(480
)
(2
)
103
7
%
40
%
Water Infrastructure
574
410
164
40
%
(137
)
(1
)
26
6
%
40
%
Applied Water
436
453
(17
)
(4
%)
-
(1
)
(18
)
(4
%)
(4
%)
Measurement and Control Solutions
462
378
84
22
%
-
(1
)
83
22
%
22
%
Water Solutions and Services
561
207
354
171
%
(343
)
1
12
6
%
171
%
Xylem Inc. Non-GAAP Reconciliation Adjusted Diluted EPS ($
Millions, except per share amounts)
Q3 2024 Q3
2023 As Reported Adjustments Adjusted
As Reported Adjustments Adjusted
Total Revenue
2,104
-
2,104
2,076
-
2,076
Operating Income
280
70
a
350
191
124
a
315
Operating Margin
13.3
%
16.6
%
9.2
%
15.2
%
Interest Expense
(10
)
-
(10
)
(14
)
-
(14
)
Other Non-Operating Income (Expense)
1
-
1
8
-
8
Gain/(Loss) From Sale of Business
(2
)
2
b
-
-
-
-
Income before Taxes
269
72
341
185
124
309
Provision for Income Taxes
(52
)
(20
)
c
(72
)
(33
)
(36
)
c
(69
)
Net Income
217
52
269
152
88
240
Diluted Shares
243.8
243.8
242.2
242.2
Diluted EPS
$
0.89
$
0.22
$
1.11
$
0.63
$
0.36
$
0.99
Q3 YTD 2024 Q3 YTD 2023
As Reported Adjustments Adjusted
As Reported Adjustments Adjusted
Total Revenue
6,306
-
6,306
5,246
-
5,246
Operating Income
742
254
a
996
441
318
a
759
Operating Margin
11.8
%
15.8
%
8.4
%
14.5
%
Interest Expense
(35
)
-
(35
)
(35
)
-
(35
)
Other Non-Operating Income (Expense)
11
-
11
19
-
19
Gain/(Loss) From Sale of Business
(6
)
6
b
-
-
-
-
Income before Taxes
712
260
972
425
318
743
Provision for Income Taxes
(148
)
(70
)
c
(218
)
(82
)
(75
)
c
(157
)
Net Income
564
190
754
343
243
586
Diluted Shares
243.4
243.4
210.1
210.1
Diluted EPS
$
2.32
$
0.78
$
3.10
$
1.63
$
1.16
$
2.79
a
Quarter-to-date:
Restructuring & realignment
costs: 2024 - $11 million and 2023 - $34 million
Special charges: 2024 - $6
million of acquisition & integration cost and $1 million of
other special charges; 2023 - $23 million of acquisition &
integration related costs and $1 million of asset impairment
charges
Purchase accounting intangible
amortization: 2024 - $52 million and 2023 - $66 million
Year-to-date:
Restructuring & realignment
costs: 2024 - $55 million and 2023 - $82 million
Special charges: 2024 - $31
million of acquisition & integration related costs, $4 million
of other special charges and $1 million of asset impairment
charges; 2023 - $107 million of acquisition & integration
related costs, $6 million of other special charges and $3 million
of intangible asset impairment charges
Purchase Accounting Intangible
Amortization: 2024 - $163 million and 2023 - $120 million
b
Gain/Loss from sale of business
as per income statement for all periods presented
c
Quarter-to-date: 2024 -
Net tax impact on pre-tax adjustments (note a and b) of $17 million
and other tax special items of $3 million; 2023 - Net tax impact on
pre-tax adjustments (note a) of $28 million and other tax special
items of $8 million
Year-to-date: 2024 - Net
tax impact on pre-tax adjustments (note a and b) of $59 million and
other tax special items of $11 million; 2023 - Net tax impact on
pre-tax adjustments (note a) of $67 million and other tax special
items of $8 million
Xylem Inc. Non-GAAP Reconciliation Net Cash - Operating
Activities vs. Free Cash Flow ($ Millions)
Q1
Q2
Q3
Year-to-Date
2024
2023
2024
2023
2024
2023
2024
2023
Net Cash - Operating Activities
$89
($19
)
$288
$28
$311
$373
$688
$382
Capital Expenditures - PPE
(59
)
(33
)
(59
)
(42
)
(60
)
(57
)
(178
)
(132
)
Capital Expenditures - Software
(15
)
(16
)
(14
)
(12
)
(14
)
(17
)
(43
)
(45
)
Capital Expenditures
(74
)
(49
)
(73
)
(54
)
(74
)
(74
)
(221
)
(177
)
Free Cash Flow
$15
($68
)
$215
($26
)
$237
$299
$467
$205
Cash paid in excess of tax provision for R&D law
change adoption
-
33
-
-
-
-
-
33
Cash paid by Xylem for Evoqua's pre-close transaction costs
-
-
-
70
-
-
-
70
Cash paid for Idrica distribution agreement
-
-
-
60
-
-
-
60
Adjusted Free Cash Flow
$15
($35
)
$215
$104
$237
$299
$467
$368
Net Income
$153
$99
$194
$92
$217
$152
$564
$343
Gain/(Loss) from sale of business
(5
)
-
1
-
(2
)
-
(6
)
-
Restructuring Charges - non-cash stock acceleration and
asset impairment
(2
)
-
(16
)
(14
)
(3
)
(11
)
(21
)
(25
)
Special Charges - Inventory step-up
-
-
-
(15
)
-
(5
)
-
(20
)
Special Charges - non-cash impairment
(1
)
(2
)
-
-
-
(1
)
(1
)
(3
)
Net Income, excluding gain/(loss) on sale of businesses,
non-cash restructuring and special charges
$161
$101
$209
$121
$222
$169
$592
$391
Operating Cash Flow Conversion
58
%
(19
%)
148
%
30
%
143
%
245
%
122
%
111
%
Free Cash Flow Conversion
9
%
(35
%)
103
%
86
%
107
%
177
%
79
%
94
%
Xylem Inc. Non-GAAP Reconciliation EBITDA and Adjusted
EBITDA by Quarter ($ Millions)
2024
Q1 Q2 Q3 Q4 Total Net Income
153
194
217
564
Net Income margin
7.5
%
8.9
%
10.3
%
8.9
%
Depreciation
61
62
68
191
Amortization
73
83
73
229
Interest Expense (Income), net
7
6
5
18
Income Tax Expense
43
53
52
148
EBITDA
337
398
415
-
1,150
Share-based Compensation
18
13
12
43
Restructuring & Realignment
15
29
11
55
Special Charges
16
13
7
36
Loss/(Gain) from sale of business
5
(1
)
2
6
Adjusted EBITDA
391
452
447
-
1,290
Revenue
2,033
2,169
2,104
6,306
Adjusted EBITDA Margin
19.2
%
20.8
%
21.2
%
20.5
%
2023
Q1 Q2 Q3 Q4 Total Net Income
99
92
152
266
609
Net Income margin
6.8
%
5.3
%
7.3
%
12.6
%
8.3
%
Depreciation
28
41
63
61
193
Amortization
32
51
84
76
243
Interest Expense (Income), net
2
5
6
8
21
Income Tax Expense
27
22
33
(56
)
26
EBITDA
188
211
338
355
1,092
Share-based Compensation
12
15
18
15
60
Restructuring & Realignment
11
36
33
23
103
Special Charges
25
67
22
22
136
Loss/(Gain) from sale of business
-
-
-
1
1
Adjusted EBITDA
236
329
411
416
1,392
Revenue
1,448
1,722
2,076
2,118
7,364
Adjusted EBITDA Margin
16.3
%
19.1
%
19.8
%
19.6
%
18.9
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241030450000/en/
Media Houston Spencer +1 (914) 240-3046
Houston.Spencer@xylem.com
Investors Keith Buettner +1 (724) 772-1531
Keith.Buettner@xylem.com
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