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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Xylem Inc | NYSE:XYL | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
1.72 | 1.21% | 143.79 | 144.03 | 142.88 | 142.93 | 1,390,234 | 01:00:00 |
☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Indiana | 45-2080495 | |||||||
(State or other jurisdiction of incorporation or
organization)
|
(I.R.S. Employer Identification No.) |
Title of each class | Trading Symbol(s) | Name of each exchange of which registered | ||||||||||||
Common Stock, par value $0.01 per share | XYL | New York Stock Exchange | ||||||||||||
2.250% Senior Notes due 2023 | XYL23 | New York Stock Exchange |
Large accelerated filer | ☑ | Accelerated filer | ☐ | |||||||||||||||||
Non-accelerated filer | ☐ | Smaller reporting company | ☐ | |||||||||||||||||
Emerging growth company | ☐ |
ITEM |
|
|
PAGE | ||||||||
PART I – Financial Information | |||||||||||
Item 1 | - | ||||||||||
Item 2 | - | ||||||||||
Item 3 | - | ||||||||||
Item 4 | - | ||||||||||
PART II – Other Information | |||||||||||
Item 1 | - | ||||||||||
Item 1A | - | ||||||||||
Item 2 | - | ||||||||||
Item 3 | - | ||||||||||
Item 4 | - | ||||||||||
Item 5 | - | ||||||||||
Item 6 | - | ||||||||||
Three Months | Nine Months | ||||||||||||||||||||||
For the periods ended September 30, | 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||
Revenue | $ | 1,265 | $ | 1,220 | $ | 3,872 | $ | 3,503 | |||||||||||||||
Cost of revenue | 793 | 759 | 2,390 | 2,199 | |||||||||||||||||||
Gross profit | 472 | 461 | 1,482 | 1,304 | |||||||||||||||||||
Selling, general and administrative expenses | 273 | 266 | 878 | 851 | |||||||||||||||||||
Research and development expenses | 49 | 45 | 152 | 138 | |||||||||||||||||||
Restructuring and asset impairment (recoveries) charges | (2) | 19 | 7 | 69 | |||||||||||||||||||
Goodwill impairment charge | — | 58 | — | 58 | |||||||||||||||||||
Operating income | 152 | 73 | 445 | 188 | |||||||||||||||||||
Interest expense | 21 | 22 | 63 | 56 | |||||||||||||||||||
Other non-operating income (expense), net | 2 | (1) | 1 | (5) | |||||||||||||||||||
Gain from sale of business | — | — | 2 | — | |||||||||||||||||||
Income before taxes | 133 | 50 | 385 | 127 | |||||||||||||||||||
Income tax expense | 19 | 13 | 71 | 21 | |||||||||||||||||||
Net income | $ | 114 | $ | 37 | $ | 314 | $ | 106 | |||||||||||||||
Earnings per share: | |||||||||||||||||||||||
Basic | $ | 0.63 | $ | 0.20 | $ | 1.74 | $ | 0.59 | |||||||||||||||
Diluted | $ | 0.63 | $ | 0.20 | $ | 1.73 | $ | 0.58 | |||||||||||||||
Weighted average number of shares: | |||||||||||||||||||||||
Basic | 180.2 | 180.0 | 180.2 | 180.1 | |||||||||||||||||||
Diluted | 181.6 | 181.0 | 181.5 | 181.0 | |||||||||||||||||||
Three Months | Nine Months | ||||||||||||||||||||||
For the periods ended September 30, | 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||
Net income | $ | 114 | $ | 37 | $ | 314 | $ | 106 | |||||||||||||||
Other comprehensive income (loss), before tax: | |||||||||||||||||||||||
Foreign currency translation adjustment | (19) | (10) | 10 | (53) | |||||||||||||||||||
Net change in derivative hedge agreements: | |||||||||||||||||||||||
Unrealized gain (loss) | (1) | 4 | (8) | 8 | |||||||||||||||||||
Amount of loss (gain) reclassified into net income | 2 | (2) | — | 1 | |||||||||||||||||||
Net change in post-retirement benefit plans: | |||||||||||||||||||||||
Amortization of prior service credit | (1) | (1) | (2) | (3) | |||||||||||||||||||
Amortization of net actuarial loss into net income | 6 | 5 | 17 | 15 | |||||||||||||||||||
Other comprehensive income (loss), before tax | (13) | (4) | 17 | (32) | |||||||||||||||||||
Income tax expense (benefit) related to items of other comprehensive income (loss) | 11 | (17) | 26 | (10) | |||||||||||||||||||
Other comprehensive income (loss), net of tax | (24) | 13 | (9) | (22) | |||||||||||||||||||
Comprehensive income | $ | 90 | $ | 50 | $ | 305 | $ | 84 | |||||||||||||||
Less: comprehensive loss attributable to noncontrolling interests | — | — | — | (1) | |||||||||||||||||||
Comprehensive income attributable to Xylem | $ | 90 | $ | 50 | $ | 305 | $ | 85 |
September 30,
2021 |
December 31,
2020 |
||||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 1,255 | $ | 1,875 | |||||||
Receivables, less allowances for discounts, returns and credit losses of $43 and $46 in 2021 and 2020, respectively
|
973 | 923 | |||||||||
Inventories | 679 | 558 | |||||||||
Prepaid and other current assets | 150 | 167 | |||||||||
Total current assets | 3,057 | 3,523 | |||||||||
Property, plant and equipment, net | 618 | 657 | |||||||||
Goodwill | 2,816 | 2,854 | |||||||||
Other intangible assets, net | 1,037 | 1,093 | |||||||||
Other non-current assets | 623 | 623 | |||||||||
Total assets | $ | 8,151 | $ | 8,750 | |||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | 577 | $ | 569 | |||||||
Accrued and other current liabilities | 737 | 787 | |||||||||
Short-term borrowings and current maturities of long-term debt | — | 600 | |||||||||
Total current liabilities | 1,314 | 1,956 | |||||||||
Long-term debt | 2,455 | 2,484 | |||||||||
Accrued post-retirement benefits | 492 | 519 | |||||||||
Deferred income tax liabilities | 270 | 242 | |||||||||
Other non-current accrued liabilities | 518 | 573 | |||||||||
Total liabilities | 5,049 | 5,774 | |||||||||
Commitments and contingencies (Note 16) | |||||||||||
Stockholders’ equity: | |||||||||||
Common Stock – par value $0.01 per share:
|
|||||||||||
Authorized 750.0 shares, issued 195.5 shares and 194.9 shares in 2021 and 2020, respectively
|
2 | 2 | |||||||||
Capital in excess of par value | 2,077 | 2,037 | |||||||||
Retained earnings | 2,092 | 1,930 | |||||||||
Treasury stock – at cost 15.2 shares and 14.5 shares in 2021 and 2020, respectively
|
(656) | (588) | |||||||||
Accumulated other comprehensive loss | (422) | (413) | |||||||||
Total stockholders’ equity | 3,093 | 2,968 | |||||||||
Non-controlling interests | 9 | 8 | |||||||||
Total equity | 3,102 | 2,976 | |||||||||
Total liabilities and stockholders’ equity | $ | 8,151 | $ | 8,750 |
For the nine months ended September 30, | 2021 | 2020 | |||||||||
Operating Activities | |||||||||||
Net income | $ | 314 | $ | 106 | |||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation | 90 | 88 | |||||||||
Amortization | 96 | 101 | |||||||||
Share-based compensation | 25 | 19 | |||||||||
Restructuring and asset impairment charges | 7 | 69 | |||||||||
Goodwill impairment charge | — | 58 | |||||||||
Gain from sale of business | (2) | — | |||||||||
Other, net | 3 | 33 | |||||||||
Payments for restructuring | (21) | (25) | |||||||||
Changes in assets and liabilities (net of acquisitions): | |||||||||||
Changes in receivables | (78) | 43 | |||||||||
Changes in inventories | (135) | (48) | |||||||||
Changes in accounts payable | 19 | (91) | |||||||||
Changes in accrued taxes | — | (5) | |||||||||
Other, net | — | 106 | |||||||||
Net Cash – Operating activities | 318 | 454 | |||||||||
Investing Activities | |||||||||||
Capital expenditures | (127) | (136) | |||||||||
Proceeds from sale of business | 2 | — | |||||||||
Proceeds from the sale of property, plant and equipment | 1 | 1 | |||||||||
Cash paid for investments | — | (200) | |||||||||
Other, net | 11 | 9 | |||||||||
Net Cash – Investing activities | (113) | (326) | |||||||||
Financing Activities | |||||||||||
Short-term debt issued, net | — | 359 | |||||||||
Short-term debt repaid | — | (600) | |||||||||
Long-term debt issued, net | — | 985 | |||||||||
Long-term debt repaid | (600) | — | |||||||||
Repurchase of common stock | (68) | (61) | |||||||||
Proceeds from exercise of employee stock options | 15 | 10 | |||||||||
Dividends paid | (152) | (142) | |||||||||
Other, net | (1) | (1) | |||||||||
Net Cash – Financing activities | (806) | 550 | |||||||||
Effect of exchange rate changes on cash | (19) | — | |||||||||
Net change in cash and cash equivalents | (620) | 678 | |||||||||
Cash and cash equivalents at beginning of year | 1,875 | 724 | |||||||||
Cash and cash equivalents at end of period | $ | 1,255 | $ | 1,402 | |||||||
Supplemental disclosure of cash flow information: | |||||||||||
Cash paid during the period for: | |||||||||||
Interest | $ | 83 | $ | 46 | |||||||
Income taxes (net of refunds received) | $ | 71 | $ | 27 |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||
(in millions) | 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||
Revenue from contracts with customers | $ | 1,214 | $ | 1,170 | $ | 3,726 | $ | 3,358 | |||||||||||||||
Lease Revenue | 51 | 50 | 146 | 145 | |||||||||||||||||||
Total | $ | 1,265 | $ | 1,220 | $ | 3,872 | $ | 3,503 |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||
(in millions) | 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||
Water Infrastructure | |||||||||||||||||||||||
Transport | $ | 390 | $ | 374 | $ | 1,173 | $ | 1,042 | |||||||||||||||
Treatment | 106 | 100 | 306 | 276 | |||||||||||||||||||
Applied Water* | |||||||||||||||||||||||
Commercial Building Services | 152 | 136 | 454 | 406 | |||||||||||||||||||
Residential Building Services | 71 | 67 | 211 | 171 | |||||||||||||||||||
Industrial Water | 177 | 161 | 542 | 462 | |||||||||||||||||||
Measurement & Control Solutions | |||||||||||||||||||||||
Water | 253 | 254 | 824 | 759 | |||||||||||||||||||
Energy | 65 | 78 | 216 | 242 | |||||||||||||||||||
Total | $ | 1,214 | $ | 1,170 | $ | 3,726 | $ | 3,358 |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||
(in millions) | 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||
Water Infrastructure | |||||||||||||||||||||||
United States | $ | 137 | $ | 142 | $ | 402 | $ | 407 | |||||||||||||||
Western Europe | 175 | 163 | 538 | 462 | |||||||||||||||||||
Emerging Markets (a) | 137 | 124 | 391 | 319 | |||||||||||||||||||
Other | 47 | 45 | 148 | 130 | |||||||||||||||||||
Applied Water | |||||||||||||||||||||||
United States | 197 | 185 | 593 | 559 | |||||||||||||||||||
Western Europe | 90 | 83 | 281 | 227 | |||||||||||||||||||
Emerging Markets (a) | 81 | 69 | 240 | 181 | |||||||||||||||||||
Other | 32 | 27 | 93 | 72 | |||||||||||||||||||
Measurement & Control Solutions | |||||||||||||||||||||||
United States | 189 | 202 | 625 | 636 | |||||||||||||||||||
Western Europe | 59 | 58 | 202 | 172 | |||||||||||||||||||
Emerging Markets (a) | 46 | 45 | 141 | 125 | |||||||||||||||||||
Other | 24 | 27 | 72 | 68 | |||||||||||||||||||
Total | $ | 1,214 | $ | 1,170 | $ | 3,726 | $ | 3,358 |
(in millions) | Contract Assets (a) | Contract Liabilities | ||||||||||||||||||
Balance at January 1, 2020 | $ | 106 | $ | 135 | ||||||||||||||||
Additions, net | 95 | 98 | ||||||||||||||||||
Revenue recognized from opening balance | — | (83) | ||||||||||||||||||
Billings transferred to accounts receivable | (89) | — | ||||||||||||||||||
Other | — | (1) | ||||||||||||||||||
Balance at September 30, 2020 | $ | 112 | $ | 149 | ||||||||||||||||
Balance at January 1, 2021 | $ | 117 | $ | 166 | ||||||||||||||||
Additions, net | 99 | 109 | ||||||||||||||||||
Revenue recognized from opening balance | — | (106) | ||||||||||||||||||
Billings transferred to accounts receivable | (85) | — | ||||||||||||||||||
Other | (1) | (2) | ||||||||||||||||||
Balance at September 30, 2021 | $ | 130 | $ | 167 |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||
(in millions) | 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||
By component: | |||||||||||||||||||||||
Severance and other charges | $ | 1 | $ | 8 | $ | 9 | $ | 31 | |||||||||||||||
Asset impairment | — | — | 1 | 17 | |||||||||||||||||||
Other restructuring charges | — | 1 | — | 1 | |||||||||||||||||||
Reversal of restructuring accruals | (3) | (1) | (4) | (1) | |||||||||||||||||||
Total restructuring charges | $ | (2) | $ | 8 | $ | 6 | $ | 48 | |||||||||||||||
Asset impairment charges | — | 11 | 1 | 21 | |||||||||||||||||||
Total restructuring and asset impairment charges | $ | (2) | $ | 19 | $ | 7 | $ | 69 | |||||||||||||||
By segment: | |||||||||||||||||||||||
Water Infrastructure | $ | — | $ | 6 | $ | 7 | $ | 14 | |||||||||||||||
Applied Water | 1 | 1 | 2 | 3 | |||||||||||||||||||
Measurement & Control Solutions | (3) | 12 | (2) | 52 | |||||||||||||||||||
(in millions) | 2021 | 2020 | ||||||||||||
Restructuring accruals - January 1 | $ | 29 | $ | 27 | ||||||||||
Restructuring charges,net | 6 | 48 | ||||||||||||
Cash payments | (21) | (25) | ||||||||||||
Asset impairment | (1) | (17) | ||||||||||||
Foreign currency and other | (2) | — | ||||||||||||
Restructuring accruals - September 30 | $ | 11 | $ | 33 | ||||||||||
By segment: | ||||||||||||||
Water Infrastructure | $ | 1 | $ | 5 | ||||||||||
Applied Water | 2 | 1 | ||||||||||||
Measurement & Control Solutions | 6 | 22 | ||||||||||||
Regional selling locations (a) | 2 | 4 | ||||||||||||
Corporate and other | — | 1 |
(in millions) | Water Infrastructure | Applied Water | Measurement & Control Solutions | Corporate | Total | |||||||||||||||||||||||||||
Actions Commenced in 2021: | ||||||||||||||||||||||||||||||||
Total expected costs | $ | 4 | $ | — | $ | — | $ | — | $ | 4 | ||||||||||||||||||||||
Costs incurred during Q1 2021 | 1 | — | — | — | 1 | |||||||||||||||||||||||||||
Costs incurred during Q2 2021 | 1 | — | — | — | 1 | |||||||||||||||||||||||||||
Costs incurred during Q3 2021 | — | — | — | — | — | |||||||||||||||||||||||||||
Total expected costs remaining | $ | 2 | $ | — | $ | — | $ | — | $ | 2 | ||||||||||||||||||||||
Actions Commenced in 2020: | ||||||||||||||||||||||||||||||||
Total expected costs | $ | 23 | $ | 7 | $ | 31 | $ | — | $ | 61 | ||||||||||||||||||||||
Costs incurred during 2020 | 19 | 4 | 30 | — | 53 | |||||||||||||||||||||||||||
Costs incurred during Q1 2021 | 2 | 1 | 1 | — | 4 | |||||||||||||||||||||||||||
Costs incurred during Q2 2021 | 2 | — | — | — | 2 | |||||||||||||||||||||||||||
Costs incurred during Q3 2021 | — | 1 | — | — | 1 | |||||||||||||||||||||||||||
Total expected costs remaining | $ | — | $ | 1 | $ | — | $ | — | $ | 1 | ||||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
Net income (in millions) | $ | 114 | $ | 37 | $ | 314 | $ | 106 | |||||||||||||||
Shares (in thousands): | |||||||||||||||||||||||
Weighted average common shares outstanding | 180,221 | 180,006 | 180,182 | 180,031 | |||||||||||||||||||
Add: Participating securities (a) | 15 | 16 | 21 | 24 | |||||||||||||||||||
Weighted average common shares outstanding — Basic | 180,236 | 180,022 | 180,203 | 180,055 | |||||||||||||||||||
Plus incremental shares from assumed conversions: (b) | |||||||||||||||||||||||
Dilutive effect of stock options | 949 | 656 | 880 | 648 | |||||||||||||||||||
Dilutive effect of restricted stock units and performance share units | 457 | 290 | 405 | 253 | |||||||||||||||||||
Weighted average common shares outstanding — Diluted | 181,642 | 180,968 | 181,488 | 180,956 | |||||||||||||||||||
Basic earnings per share | $ | 0.63 | $ | 0.20 | $ | 1.74 | $ | 0.59 | |||||||||||||||
Diluted earnings per share | $ | 0.63 | $ | 0.20 | $ | 1.73 | $ | 0.58 |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||
(in thousands) | 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||
Stock options | 1,031 | 1,699 | 1,169 | 1,611 | |||||||||||||||||||
Restricted stock units | 251 | 408 | 285 | 387 | |||||||||||||||||||
Performance share units | 315 | 334 | 338 | 311 |
(in millions) |
September 30,
2021 |
December 31,
2020 |
|||||||||
Finished goods | $ | 252 | $ | 221 | |||||||
Work in process | 62 | 49 | |||||||||
Raw materials | 365 | 288 | |||||||||
Total inventories | $ | 679 | $ | 558 |
(in millions) |
Water
Infrastructure
|
Applied Water | Measurement & Control Solutions | Total | |||||||||||||||||||||||||
Balance as of January 1, 2021 | $ | 668 | $ | 529 | $ | 1,657 | $ | 2,854 | |||||||||||||||||||||
Activity in 2021 | |||||||||||||||||||||||||||||
Foreign currency and other | (7) | (9) | (22) | (38) | |||||||||||||||||||||||||
Balance as of September 30, 2021 | $ | 661 | $ | 520 | $ | 1,635 | $ | 2,816 |
September 30, 2021 | December 31, 2020 | ||||||||||||||||||||||||||||||||||
(in millions) |
Carrying
Amount
|
Accumulated
Amortization
|
Net
Intangibles
|
Carrying
Amount
|
Accumulated
Amortization
|
Net
Intangibles
|
|||||||||||||||||||||||||||||
Customer and distributor relationships | $ | 935 | $ | (446) | $ | 489 | $ | 941 | $ | (410) | $ | 531 | |||||||||||||||||||||||
Proprietary technology and patents | 204 | (140) | 64 | 206 | (131) | 75 | |||||||||||||||||||||||||||||
Trademarks | 142 | (70) | 72 | 143 | (63) | 80 | |||||||||||||||||||||||||||||
Software | 535 | (293) | 242 | 500 | (265) | 235 | |||||||||||||||||||||||||||||
Other | 21 | (19) | 2 | 21 | (18) | 3 | |||||||||||||||||||||||||||||
Indefinite-lived intangibles | 168 | — | 168 | 169 | — | 169 | |||||||||||||||||||||||||||||
Other Intangibles | $ | 2,005 | $ | (968) | $ | 1,037 | $ | 1,980 | $ | (887) | $ | 1,093 |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||
(in millions) | 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||
Cash Flow Hedges | |||||||||||||||||||||||
Foreign Exchange Contracts | |||||||||||||||||||||||
Amount of (loss) gain recognized in OCI | $ | (1) | $ | 4 | $ | (8) | $ | 7 | |||||||||||||||
Amount of loss (gain) reclassified from OCI into revenue | 2 | (2) | 1 | — | |||||||||||||||||||
Amount of (gain) loss reclassified from OCI into cost of revenue | — | — | (1) | 2 | |||||||||||||||||||
Net Investment Hedges | |||||||||||||||||||||||
Cross-Currency Swaps | |||||||||||||||||||||||
Amount of gain (loss) recognized in OCI | $ | 27 | $ | (53) | $ | 59 | $ | (30) | |||||||||||||||
Amount of income recognized in Interest Expense | 6 | 5 | $ | 16 | $ | 14 | |||||||||||||||||
Foreign Currency Denominated Debt | |||||||||||||||||||||||
Amount of gain (loss) recognized in OCI | $ | 12 | $ | (21) | $ | 32 | $ | (26) | |||||||||||||||
(in millions) |
September 30,
2021 |
December 31,
2020 |
|||||||||
Derivatives designated as hedging instruments | |||||||||||
Assets | |||||||||||
Net Investment Hedges | |||||||||||
Other non-current assets | $ | 1 | $ | — | |||||||
Liabilities | |||||||||||
Cash Flow Hedges | |||||||||||
Other current liabilities | $ | (4) | $ | — | |||||||
Net Investment Hedges | |||||||||||
Other non-current accrued liabilities | $ | (55) | $ | (117) |
(in millions) |
September 30,
2021 |
December 31,
2020 |
|||||||||
Compensation and other employee-benefits | $ | 246 | $ | 258 | |||||||
Customer-related liabilities | 189 | 186 | |||||||||
Accrued taxes | 77 | 103 | |||||||||
Lease liabilities | 70 | 63 | |||||||||
Accrued warranty costs | 46 | 54 | |||||||||
Other accrued liabilities | 109 | 123 | |||||||||
Total accrued and other current liabilities | $ | 737 | $ | 787 |
(in millions) |
September 30,
2021 |
December 31,
2020 |
|||||||||
4.875% Senior Notes due 2021 (a) | $ | — | $ | 600 | |||||||
2.250% Senior Notes due 2023 (a) | 580 | 612 | |||||||||
3.250% Senior Notes due 2026 (a) | 500 | 500 | |||||||||
1.950% Senior Notes due 2028 (a) | 500 | 500 | |||||||||
2.250% Senior Notes due 2031 (a) | 500 | 500 | |||||||||
4.375% Senior Notes due 2046 (a) | 400 | 400 | |||||||||
Debt issuance costs and unamortized discount (b) | (25) | (28) | |||||||||
Total debt | 2,455 | 3,084 | |||||||||
Less: short-term borrowings and current maturities of long-term debt | — | 600 | |||||||||
Total long-term debt | $ | 2,455 | $ | 2,484 |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||
(in millions) | 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||
Domestic defined benefit pension plans: | |||||||||||||||||||||||
Service cost | $ | 1 | $ | — | $ | 2 | $ | 2 | |||||||||||||||
Interest cost | — | 1 | 2 | 3 | |||||||||||||||||||
Expected return on plan assets | (2) | (1) | (5) | (5) | |||||||||||||||||||
Amortization of net actuarial loss | 1 | — | 3 | 2 | |||||||||||||||||||
Net periodic benefit cost | $ | — | $ | — | $ | 2 | $ | 2 | |||||||||||||||
International defined benefit pension plans: | |||||||||||||||||||||||
Service cost | $ | 4 | $ | 3 | $ | 11 | $ | 9 | |||||||||||||||
Interest cost | 2 | 3 | 8 | 11 | |||||||||||||||||||
Expected return on plan assets | (3) | (4) | (10) | (10) | |||||||||||||||||||
Amortization of net actuarial loss | 5 | 4 | 13 | 10 | |||||||||||||||||||
Net periodic benefit cost | $ | 8 | $ | 6 | $ | 22 | $ | 20 | |||||||||||||||
Total net periodic benefit cost | $ | 8 | $ | 6 | $ | 24 | $ | 22 |
Common
Stock |
Capital in Excess of Par Value |
Retained
Earnings |
Accumulated Other
Comprehensive Loss |
Treasury Stock | Non-Controlling Interest | Total | |||||||||||||||||||||||||||||||||||
Balance at January 1, 2021 | $ | 2 | $ | 2,037 | $ | 1,930 | $ | (413) | $ | (588) | $ | 8 | $ | 2,976 | |||||||||||||||||||||||||||
Other | — | — | — | — | — | 1 | 1 | ||||||||||||||||||||||||||||||||||
Net income | — | — | 87 | — | — | — | 87 | ||||||||||||||||||||||||||||||||||
Other comprehensive loss, net | — | — | — | (13) | — | — | (13) | ||||||||||||||||||||||||||||||||||
Dividends declared ($0.28 per share)
|
— | — | (50) | — | — | — | (50) | ||||||||||||||||||||||||||||||||||
Stock incentive plan activity | — | 12 | — | — | (7) | — | 5 | ||||||||||||||||||||||||||||||||||
Repurchase of common stock | — | — | — | — | (60) | — | (60) | ||||||||||||||||||||||||||||||||||
Balance at March 31, 2021 | $ | 2 | $ | 2,049 | $ | 1,967 | $ | (426) | $ | (655) | $ | 9 | $ | 2,946 | |||||||||||||||||||||||||||
Net income | — | — | 113 | — | — | — | 113 | ||||||||||||||||||||||||||||||||||
Other comprehensive income, net | — | — | — | 28 | — | — | 28 | ||||||||||||||||||||||||||||||||||
Dividends declared ($0.28 per share)
|
— | — | (51) | — | — | — | (51) | ||||||||||||||||||||||||||||||||||
Stock incentive plan activity | — | 14 | — | — | (1) | — | 13 | ||||||||||||||||||||||||||||||||||
Balance at June 30, 2021 | $ | 2 | $ | 2,063 | $ | 2,029 | $ | (398) | $ | (656) | $ | 9 | $ | 3,049 | |||||||||||||||||||||||||||
Net income | — | — | 114 | — | — | — | 114 | ||||||||||||||||||||||||||||||||||
Other comprehensive loss, net | — | — | — | (24) | — | — | (24) | ||||||||||||||||||||||||||||||||||
Dividends declared ($0.28 per share)
|
— | — | (51) | — | — | — | (51) | ||||||||||||||||||||||||||||||||||
Stock incentive plan activity | — | 14 | — | — | — | — | 14 | ||||||||||||||||||||||||||||||||||
Balance at September 30, 2021 | $ | 2 | $ | 2,077 | $ | 2,092 | $ | (422) | $ | (656) | $ | 9 | $ | 3,102 |
Common
Stock |
Capital in Excess of Par Value |
Retained
Earnings |
Accumulated Other
Comprehensive Loss |
Treasury Stock | Non-Controlling Interest | Total | |||||||||||||||||||||||||||||||||||
Balance at January 1, 2020 | $ | 2 | $ | 1,991 | $ | 1,866 | $ | (375) | $ | (527) | $ | 10 | $ | 2,967 | |||||||||||||||||||||||||||
Cumulative effect of change in accounting principle | — | — | (2) | — | — | — | (2) | ||||||||||||||||||||||||||||||||||
Net income | — | — | 38 | — | — | — | 38 | ||||||||||||||||||||||||||||||||||
Other comprehensive loss, net | — | — | — | (86) | — | (1) | (87) | ||||||||||||||||||||||||||||||||||
Dividends declared ($0.26 per share)
|
— | — | (48) | — | — | — | (48) | ||||||||||||||||||||||||||||||||||
Stock incentive plan activity | — | 13 | — | — | (10) | — | 3 | ||||||||||||||||||||||||||||||||||
Repurchase of common stock | — | — | — | — | (50) | — | (50) | ||||||||||||||||||||||||||||||||||
Balance at March 31, 2020 | $ | 2 | $ | 2,004 | $ | 1,854 | $ | (461) | $ | (587) | $ | 9 | $ | 2,821 | |||||||||||||||||||||||||||
Net income | — | — | 31 | — | — | — | 31 | ||||||||||||||||||||||||||||||||||
Other comprehensive income, net | — | — | — | 52 | — | — | 52 | ||||||||||||||||||||||||||||||||||
Dividends declared ($0.26 per share)
|
— | — | (47) | — | — | — | (47) | ||||||||||||||||||||||||||||||||||
Stock incentive plan activity | — | 8 | — | — | — | — | 8 | ||||||||||||||||||||||||||||||||||
Balance at June 30, 2020 | $ | 2 | $ | 2,012 | $ | 1,838 | $ | (409) | $ | (587) | $ | 9 | $ | 2,865 | |||||||||||||||||||||||||||
Net income | — | — | 37 | — | — | — | 37 | ||||||||||||||||||||||||||||||||||
Other comprehensive income, net | — | — | — | 13 | — | — | 13 | ||||||||||||||||||||||||||||||||||
Distribution to minority stockholders | — | — | — | — | — | (1) | (1) | ||||||||||||||||||||||||||||||||||
Dividends declared ($0.26 per share)
|
— | — | (47) | — | — | — | (47) | ||||||||||||||||||||||||||||||||||
Stock incentive plan activity | — | 9 | — | — | (1) | — | 8 | ||||||||||||||||||||||||||||||||||
Balance at September 30, 2020 | $ | 2 | $ | 2,021 | $ | 1,828 | $ | (396) | $ | (588) | $ | 8 | $ | 2,875 |
Share units
(in thousands)
|
Weighted
Average
Exercise
Price / Share
|
Weighted Average
Remaining
Contractual
Term (Years)
|
Aggregate Intrinsic Value (in millions)
|
||||||||||||||||||||
Outstanding at January 1, 2021 | 1,961 | $ | 56.66 | 6.4 | |||||||||||||||||||
Granted | 262 | 102.61 | |||||||||||||||||||||
Exercised | (264) | 54.82 | |||||||||||||||||||||
Forfeited and expired | (24) | 84.39 | |||||||||||||||||||||
Outstanding at September 30, 2021 | 1,935 | $ | 62.63 | 6.2 | $ | 113 | |||||||||||||||||
Options exercisable at September 30, 2021 | 1,280 | $ | 51.49 | 4.8 | $ | 89 | |||||||||||||||||
Vested and expected to vest as of September 30, 2021 | 1,872 | $ | 61.89 | 6.1 | $ | 111 |
Volatility | 26.29 | % | ||||||
Risk-free interest rate | 0.86 | % | ||||||
Dividend yield | 1.10 | % | ||||||
Expected term (in years) | 5.7 | |||||||
Weighted-average fair value / share | $ | 23.26 |
Share units
(in thousands)
|
Weighted
Average Grant Date Fair Value / Share |
||||||||||
Outstanding at January 1, 2021 | 537 | $ | 74.62 | ||||||||
Granted | 230 | 105.77 | |||||||||
Vested | (249) | 74.59 | |||||||||
Forfeited | (25) | 87.02 | |||||||||
Outstanding at September 30, 2021 | 493 | $ | 88.42 |
Share units
(in thousands)
|
Weighted
Average Grant Date Fair Value / Share |
||||||||||||||||||||||
Outstanding at January 1, 2021 | 182 | $ | 76.12 | ||||||||||||||||||||
Granted | 61 | 102.69 | |||||||||||||||||||||
Forfeited (a) | (66) | 76.13 | |||||||||||||||||||||
Outstanding at September 30, 2021 | 177 | $ | 84.85 |
Share units
(in thousands)
|
Weighted
Average Grant Date Fair Value / Share |
||||||||||||||||||||||
Outstanding at January 1, 2021 | 182 | $ | 96.98 | ||||||||||||||||||||
Granted | 61 | 117.56 | |||||||||||||||||||||
Adjustment for Market Condition Achieved (a) | 35 | 98.79 | |||||||||||||||||||||
Vested | (93) | 98.79 | |||||||||||||||||||||
Forfeited | (8) | 103.10 | |||||||||||||||||||||
Outstanding at September 30, 2021 | 177 | $ | 102.98 |
Volatility | 33.5 | % | ||||||
Risk-free interest rate | 0.24 | % | ||||||
(in millions) | Foreign Currency Translation | Post-retirement Benefit Plans | Derivative Instruments | Total | |||||||||||||||||||
Balance at January 1, 2021 | $ | (86) | $ | (330) | $ | 3 | $ | (413) | |||||||||||||||
Foreign currency translation adjustment | 10 | — | — | 10 | |||||||||||||||||||
Tax on foreign currency translation adjustment | (14) | — | — | (14) | |||||||||||||||||||
Amortization of prior service cost and net actuarial loss on post-retirement benefit plans into other non-operating income (expense), net | — | 5 | — | 5 | |||||||||||||||||||
Income tax impact on amortization of post-retirement benefit plan items | — | (1) | — | (1) | |||||||||||||||||||
Unrealized loss on derivative hedge agreements | — | — | (11) | (11) | |||||||||||||||||||
Income tax benefit on unrealized loss on derivative hedge agreements | — | — | 1 | 1 | |||||||||||||||||||
Reclassification of unrealized gain on foreign exchange agreements into revenue | — | — | (2) | (2) | |||||||||||||||||||
Reclassification of unrealized gain on foreign exchange agreements into cost of revenue | — | — | (1) | (1) | |||||||||||||||||||
Balance at March 31, 2021 | $ | (90) | $ | (326) | $ | (10) | $ | (426) | |||||||||||||||
Foreign currency translation adjustment | 19 | — | — | 19 | |||||||||||||||||||
Tax on foreign currency translation adjustment | 1 | — | — | 1 | |||||||||||||||||||
Amortization of prior service cost and net actuarial loss on post-retirement benefit plans into other non-operating income (expense), net | — | 5 | — | 5 | |||||||||||||||||||
Income tax impact on amortization of post-retirement benefit plan items | — | (2) | — | (2) | |||||||||||||||||||
Unrealized gain on derivative hedge agreements | — | — | 4 | 4 | |||||||||||||||||||
Reclassification of unrealized loss on foreign exchange agreements into revenue | — | — | 1 | 1 | |||||||||||||||||||
Balance at June 30, 2021 | $ | (70) | $ | (323) | $ | (5) | $ | (398) | |||||||||||||||
Foreign currency translation adjustment | (19) | — | — | (19) | |||||||||||||||||||
Tax on foreign currency translation adjustment | (10) | — | — | (10) | |||||||||||||||||||
Amortization of prior service cost and net actuarial loss on post-retirement benefit plans into other non-operating income (expense), net | — | 5 | — | 5 | |||||||||||||||||||
Income tax impact on amortization of post-retirement benefit plan items | — | (1) | — | (1) | |||||||||||||||||||
Unrealized gain on derivative hedge agreements | — | — | (1) | (1) | |||||||||||||||||||
Reclassification of unrealized gain on foreign exchange agreements into revenue | — | — | 2 | 2 | |||||||||||||||||||
Balance at September 30, 2021 | $ | (99) | $ | (319) | $ | (4) | $ | (422) |
(in millions) | Foreign Currency Translation | Post-retirement Benefit Plans | Derivative Instruments | Total | |||||||||||||||||||
Balance at January 1, 2020 | $ | (103) | $ | (269) | $ | (3) | $ | (375) | |||||||||||||||
Foreign currency translation adjustment | (77) | — | — | (77) | |||||||||||||||||||
Tax on foreign currency translation adjustment | (13) | — | — | (13) | |||||||||||||||||||
Amortization of prior service cost and net actuarial loss on post-retirement benefit plans into other non-operating income (expense), net | — | 4 | — | 4 | |||||||||||||||||||
Income tax impact on amortization of post-retirement benefit plan items | — | (1) | — | (1) | |||||||||||||||||||
Unrealized loss on derivative hedge agreements | — | — | (2) | (2) | |||||||||||||||||||
Reclassification of unrealized loss on foreign exchange agreements into revenue | — | — | 2 | 2 | |||||||||||||||||||
Reclassification of unrealized loss on foreign exchange agreements into cost of revenue | — | — | 1 | 1 | |||||||||||||||||||
Balance at March 31, 2020 | $ | (193) | $ | (266) | $ | (2) | $ | (461) | |||||||||||||||
Foreign currency translation adjustment | 35 | — | — | 35 | |||||||||||||||||||
Tax on foreign currency translation adjustment | 9 | — | — | 9 | |||||||||||||||||||
Amortization of prior service cost and net actuarial loss on post-retirement benefit plans into other non-operating income (expense), net | — | 4 | — | 4 | |||||||||||||||||||
Income tax impact on amortization of post-retirement benefit plan items | — | (1) | — | (1) | |||||||||||||||||||
Unrealized gain on derivative hedge agreements | — | — | 6 | 6 | |||||||||||||||||||
Income tax benefit on unrealized gain on derivative hedge agreements | — | — | (1) | (1) | |||||||||||||||||||
Reclassification of unrealized gain on foreign exchange agreements into revenue | — | — | (1) | (1) | |||||||||||||||||||
Reclassification of unrealized loss on foreign exchange agreements into cost of revenue | — | — | 1 | 1 | |||||||||||||||||||
Balance at June 30, 2020 | $ | (149) | $ | (263) | $ | 3 | $ | (409) | |||||||||||||||
Foreign currency translation adjustment | (10) | — | — | (10) | |||||||||||||||||||
Tax on foreign currency translation adjustment | 18 | — | — | 18 | |||||||||||||||||||
Amortization of prior service cost and net actuarial loss on post-retirement benefit plans into other non-operating income (expense), net | — | 4 | — | 4 | |||||||||||||||||||
Income tax impact on amortization of post-retirement benefit plan items | — | (1) | — | (1) | |||||||||||||||||||
Unrealized gain on derivative hedge agreements | — | — | 4 | 4 | |||||||||||||||||||
Reclassification of unrealized gain on foreign exchange agreements into revenue | — | — | (2) | (2) | |||||||||||||||||||
Balance at September 30, 2020 | $ | (141) | $ | (260) | $ | 5 | $ | (396) |
(in millions) | 2021 | 2020 | |||||||||
Warranty accrual – January 1 | $ | 65 | $ | 41 | |||||||
Net charges for product warranties in the period | 23 | 44 | |||||||||
Settlement of warranty claims | (25) | (24) | |||||||||
Foreign currency and other | (1) | 1 | |||||||||
Warranty accrual - September 30 | $ | 62 | $ | 62 |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||
(in millions) | 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||
Revenue: | |||||||||||||||||||||||
Water Infrastructure | $ | 547 | $ | 524 | $ | 1,625 | $ | 1,463 | |||||||||||||||
Applied Water | 400 | 364 | 1,207 | 1,039 | |||||||||||||||||||
Measurement & Control Solutions | 318 | 332 | 1,040 | 1,001 | |||||||||||||||||||
Total | $ | 1,265 | $ | 1,220 | $ | 3,872 | $ | 3,503 | |||||||||||||||
Operating Income (Loss): | |||||||||||||||||||||||
Water Infrastructure | $ | 101 | $ | 89 | $ | 265 | $ | 201 | |||||||||||||||
Applied Water | 60 | 56 | 190 | 144 | |||||||||||||||||||
Measurement & Control Solutions | 7 | (62) | 29 | (120) | |||||||||||||||||||
Corporate and other | (16) | (10) | (39) | (37) | |||||||||||||||||||
Total operating income | $ | 152 | $ | 73 | $ | 445 | $ | 188 | |||||||||||||||
Interest expense | $ | 21 | $ | 22 | $ | 63 | $ | 56 | |||||||||||||||
Other non-operating income (expense), net | 2 | (1) | 1 | (5) | |||||||||||||||||||
Gain from sale of business | — | — | 2 | — | |||||||||||||||||||
Income before taxes | $ | 133 | $ | 50 | $ | 385 | $ | 127 | |||||||||||||||
Depreciation and Amortization: | |||||||||||||||||||||||
Water Infrastructure | $ | 12 | $ | 13 | $ | 38 | $ | 44 | |||||||||||||||
Applied Water | 5 | 7 | 17 | 18 | |||||||||||||||||||
Measurement & Control Solutions | 38 | 36 | 111 | 106 | |||||||||||||||||||
Regional selling locations (a) | 6 | 4 | 15 | 15 | |||||||||||||||||||
Corporate and other | 1 | 3 | 5 | 6 | |||||||||||||||||||
Total | $ | 62 | $ | 63 | $ | 186 | $ | 189 | |||||||||||||||
Capital Expenditures: | |||||||||||||||||||||||
Water Infrastructure | $ | 18 | $ | 9 | $ | 42 | $ | 27 | |||||||||||||||
Applied Water | 4 | 4 | 11 | 16 | |||||||||||||||||||
Measurement & Control Solutions | 19 | 22 | 60 | 73 | |||||||||||||||||||
Regional selling locations (b) | 4 | 6 | 12 | 18 | |||||||||||||||||||
Corporate and other | 2 | — | 2 | 2 | |||||||||||||||||||
Total | $ | 47 | $ | 41 | $ | 127 | $ | 136 |
ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||||||||||||||||||||||||||
(In millions, except for per share data) | 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||||||||||||||||||||||
Net income & Earnings per share | $ | 114 | $ | 0.63 | $ | 37 | $ | 0.20 | $ | 314 | $ | 1.73 | $ | 106 | $ | 0.58 | |||||||||||||||||||||||||||||||
Restructuring and realignment, net of tax of $1 and $4 for 2021 and $3 and $15 for 2020 | 1 | — | 12 | 0.06 | 12 | 0.07 | 52 | 0.28 | |||||||||||||||||||||||||||||||||||||||
Special charges, net of tax of $0 and $1 for 2021 and $6 and $9 for 2020 | 2 | 0.01 | 65 | 0.36 | 7 | 0.04 | 76 | 0.42 | |||||||||||||||||||||||||||||||||||||||
Tax-related special items | (1) | (0.01) | — | — | 6 | 0.03 | (5) | (0.03) | |||||||||||||||||||||||||||||||||||||||
Gain from sale of business, net of tax of $0 for 2021 | — | — | — | — | (2) | (0.01) | — | — | |||||||||||||||||||||||||||||||||||||||
Adjusted net income & Adjusted earnings per share | $ | 116 | $ | 0.63 | $ | 114 | $ | 0.62 | $ | 337 | $ | 1.86 | $ | 229 | $ | 1.25 | |||||||||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||
(in millions) | 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||
Net Income | $ | 114 | $ | 37 | $ | 314 | $ | 106 | |||||||||||||||
Income tax expense | 19 | 13 | 71 | 21 | |||||||||||||||||||
Interest expense, net | 20 | 20 | 58 | 50 | |||||||||||||||||||
Depreciation | 31 | 30 | 90 | 88 | |||||||||||||||||||
Amortization | 31 | 33 | 96 | 101 | |||||||||||||||||||
EBITDA | $ | 215 | $ | 133 | $ | 629 | $ | 366 | |||||||||||||||
EBITDA Margin | 17.0 | % | 10.9 | % | 16.2 | % | 10.5 | % | |||||||||||||||
Share-based compensation | $ | 8 | $ | 3 | $ | 25 | $ | 19 | |||||||||||||||
Restructuring and realignment | 2 | 15 | 16 | 67 | |||||||||||||||||||
Special charges | 2 | 71 | 8 | 85 | |||||||||||||||||||
Gain from sale of business | — | — | (2) | — | |||||||||||||||||||
Adjusted EBITDA | $ | 227 | $ | 222 | $ | 676 | $ | 537 | |||||||||||||||
Adjusted EBITDA Margin | 17.9 | % | 18.2 | % | 17.5 | % | 15.3 | % |
Nine Months Ended | |||||||||||
September 30, | |||||||||||
(In millions) | 2021 | 2020 | |||||||||
Net cash provided by operating activities | $ | 318 | $ | 454 | |||||||
Capital expenditures | (127) | (136) | |||||||||
Free cash flow | $ | 191 | $ | 318 | |||||||
Net cash used by investing activities | $ | (113) | $ | (326) | |||||||
Net cash (used) provided by financing activities | $ | (806) | $ | 550 |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||||||||||||||||||||
(In millions) | 2021 | 2020 | Change | 2021 | 2020 | Change | |||||||||||||||||||||||||||||||||||
Revenue | $ | 1,265 | $ | 1,220 | 3.7 | % | $ | 3,872 | $ | 3,503 | 10.5 | % | |||||||||||||||||||||||||||||
Gross profit | 472 | 461 | 2.4 | % | 1,482 | 1,304 | 13.7 | % | |||||||||||||||||||||||||||||||||
Gross margin | 37.3 | % | 37.8 | % | (50) | bp | 38.3 | % | 37.2 | % | 110 | bp | |||||||||||||||||||||||||||||
Total operating expenses | 320 | 388 | (17.5) | % | 1,037 | 1,116 | (7.1) | % | |||||||||||||||||||||||||||||||||
Expense to revenue ratio | 25.3 | % | 31.8 | % | (650) | bp | 26.8 | % | 31.9 | % | (510) | bp | |||||||||||||||||||||||||||||
Restructuring and realignment costs | 2 | 15 | (86.7) | % | 16 | 67 | (76.1) | % | |||||||||||||||||||||||||||||||||
Special charges | 1 | 70 | (98.6) | % | 3 | 81 | (96.3) | % | |||||||||||||||||||||||||||||||||
Adjusted operating expenses | 317 | 303 | 4.6 | % | 1,018 | 968 | 5.2 | % | |||||||||||||||||||||||||||||||||
Adjusted operating expenses to revenue ratio | 25.1 | % | 24.8 | % | 30 | bp | 26.3 | % | 27.6 | % | (130) | bp | |||||||||||||||||||||||||||||
Operating income | 152 | 73 | 108.2 | % | 445 | 188 | 136.7 | % | |||||||||||||||||||||||||||||||||
Operating margin | 12.0 | % | 6.0 | % | 600 | bp | 11.5 | % | 5.4 | % | 610 | bp | |||||||||||||||||||||||||||||
Interest and other non-operating expense, net | 19 | 23 | (17.4) | % | 62 | 61 | 1.6 | % | |||||||||||||||||||||||||||||||||
Gain from sale of business | — | — | NM | 2 | — | NM | |||||||||||||||||||||||||||||||||||
Income tax expense | 19 | 13 | 46.2 | % | 71 | 21 | 238.1 | % | |||||||||||||||||||||||||||||||||
Tax rate | 13.9 | % | 26.2 | % | (1,230) | bp | 18.3 | % | 16.6 | % | 170 | bp | |||||||||||||||||||||||||||||
Net income | $ | 114 | $ | 37 | 208.1 | % | $ | 314 | $ | 106 | 196.2 | % |
Water Infrastructure | Applied Water | Measurement & Control Solutions | Total Xylem | ||||||||||||||||||||||||||||||||||||||||||||
(In millions) | $ Change | % Change | $ Change | % Change | $ Change | % Change | $ Change | % Change | |||||||||||||||||||||||||||||||||||||||
2020 Revenue | $ | 524 | $ | 364 | $ | 332 | $ | 1,220 | |||||||||||||||||||||||||||||||||||||||
Organic Growth | 13 | 2.5 | % | 29 | 8.0 | % | (15) | (4.5) | % | 27 | 2.2 | % | |||||||||||||||||||||||||||||||||||
Divestitures | — | — | % | — | — | % | (2) | (0.6) | % | (2) | (0.2) | % | |||||||||||||||||||||||||||||||||||
Constant Currency | 13 | 2.5 | % | 29 | 8.0 | % | (17) | (5.1) | % | 25 | 2.0 | % | |||||||||||||||||||||||||||||||||||
Foreign currency translation (a) | 10 | 1.9 | % | 7 | 1.9 | % | 3 | 0.9 | % | 20 | 1.7 | % | |||||||||||||||||||||||||||||||||||
Total change in revenue | 23 | 4.4 | % | 36 | 9.9 | % | (14) | (4.2) | % | 45 | 3.7 | % | |||||||||||||||||||||||||||||||||||
2021 Revenue | $ | 547 | $ | 400 | $ | 318 | $ | 1,265 | |||||||||||||||||||||||||||||||||||||||
Water Infrastructure | Applied Water | Measurement & Control Solutions | Total Xylem | ||||||||||||||||||||||||||||||||
(In millions) | $ Change | % Change | $ Change | % Change | $ Change | % Change | $ Change | % Change | |||||||||||||||||||||||||||
2020 Revenue | $ | 1,463 | $ | 1,039 | $ | 1,001 | $ | 3,503 | |||||||||||||||||||||||||||
Organic Growth | 92 | 6.3 | % | 132 | 12.7 | % | 22 | 2.2 | % | 246 | 7.0 | % | |||||||||||||||||||||||
Divestitures | — | — | % | — | — | % | (7) | (0.7) | % | (7) | (0.2) | % | |||||||||||||||||||||||
Constant Currency | 92 | 6.3 | % | 132 | 12.7 | % | 15 | 1.5 | % | 239 | 6.8 | % | |||||||||||||||||||||||
Foreign currency translation (a) | 70 | 4.8 | % | 36 | 3.5 | % | 24 | 2.4 | % | 130 | 3.7 | % | |||||||||||||||||||||||
Total change in revenue | 162 | 11.1 | % | 168 | 16.2 | % | 39 | 3.9 | % | 369 | 10.5 | % | |||||||||||||||||||||||
2021 Revenue | $ | 1,625 | $ | 1,207 | $ | 1,040 | $ | 3,872 |
Water Infrastructure | Applied Water | Measurement & Control Solutions | Total Xylem | ||||||||||||||||||||||||||||||||
(in millions) | $ Change | % Change | $ Change | % Change | $ Change | % Change | $ Change | % Change | |||||||||||||||||||||||||||
2020 Orders | $ | 558 | $ | 375 | $ | 313 | $ | 1,246 | |||||||||||||||||||||||||||
Organic Growth | 53 | 9.5 | % | 64 | 17.1 | % | 133 | 42.5 | % | 250 | 20.1 | % | |||||||||||||||||||||||
Divestitures | — | — | % | — | — | % | (2) | (0.6) | % | (2) | (0.2) | % | |||||||||||||||||||||||
Constant Currency | 53 | 9.5 | % | 64 | 17.1 | % | 131 | 41.9 | % | 248 | 19.9 | % | |||||||||||||||||||||||
Foreign currency translation (a) | 12 | 2.2 | % | 7 | 1.9 | % | 5 | 1.6 | % | 24 | 1.9 | % | |||||||||||||||||||||||
Total change in orders | 65 | 11.6 | % | 71 | 18.9 | % | 136 | 43.5 | % | 272 | 21.8 | % | |||||||||||||||||||||||
2021 Orders | $ | 623 | $ | 446 | $ | 449 | $ | 1,518 |
Water Infrastructure | Applied Water | Measurement & Control Solutions | Total Xylem | ||||||||||||||||||||||||||||||||
(in millions) | $ Change | % Change | $ Change | % Change | $ Change | % Change | $ Change | % Change | |||||||||||||||||||||||||||
2020 Orders | $ | 1,670 | $ | 1,073 | $ | 996 | $ | 3,739 | |||||||||||||||||||||||||||
Organic Growth | 123 | 7.4 | % | 296 | 27.6 | % | 421 | 42.3 | % | 840 | 22.5 | % | |||||||||||||||||||||||
Divestitures | — | — | % | — | — | % | (10) | (1.0) | % | (10) | (0.3) | % | |||||||||||||||||||||||
Constant Currency | 123 | 7.4 | % | 296 | 27.6 | % | 411 | 41.3 | % | 830 | 22.2 | % | |||||||||||||||||||||||
Foreign currency translation (a) | 80 | 4.8 | % | 40 | 3.7 | % | 27 | 2.7 | % | 147 | 3.9 | % | |||||||||||||||||||||||
Total change in orders | 203 | 12.2 | % | 336 | 31.3 | % | 438 | 44.0 | % | 977 | 26.1 | % | |||||||||||||||||||||||
2021 Orders | $ | 1,873 | $ | 1,409 | $ | 1,434 | $ | 4,716 |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||||||||||||||||||||
(In millions) | 2021 | 2020 | Change | 2021 | 2020 | Change | |||||||||||||||||||||||||||||||||||
Selling, general and administrative expenses ("SG&A") | $ | 273 | $ | 266 | 2.6 | % | $ | 878 | $ | 851 | 3.2 | % | |||||||||||||||||||||||||||||
SG&A as a % of revenue | 21.6 | % | 21.8 | % | (20) | bp | 22.7 | % | 24.3 | % | (160) | bp | |||||||||||||||||||||||||||||
Research and development expenses ("R&D") | 49 | 45 | 8.9 | % | 152 | 138 | 10.1 | % | |||||||||||||||||||||||||||||||||
R&D as a % of revenue | 3.9 | % | 3.7 | % | 20 | bp | 3.9 | % | 3.9 | % | — | bp | |||||||||||||||||||||||||||||
Restructuring and asset impairment charges | (2) | 19 | (110.5) | % | 7 | 69 | (89.9) | % | |||||||||||||||||||||||||||||||||
Goodwill impairment charge | — | 58 | — | % | — | 58 | — | % | |||||||||||||||||||||||||||||||||
Operating expenses | $ | 320 | $ | 388 | (17.5) | % | $ | 1,037 | $ | 1,116 | (7.1) | % | |||||||||||||||||||||||||||||
Expense to revenue ratio | 25.3 | % | 31.8 | % | (650) | bp | 26.8 | % | 31.9 | % | (510) | bp |
2021 | 2020 | |||||||||||||
Planned reductions - January 1 | 319 | 196 | ||||||||||||
Additional planned reductions | 73 | 670 | ||||||||||||
Actual reductions and reversals | (234) | (604) | ||||||||||||
Planned reductions - September 30 | 158 | 262 |
(in millions) | Water Infrastructure | Applied Water | Measurement & Control Solutions | Corporate | Total | |||||||||||||||||||||||||||
Actions Commenced in 2021: | ||||||||||||||||||||||||||||||||
Total expected costs | $ | 4 | $ | — | $ | — | $ | — | $ | 4 | ||||||||||||||||||||||
Costs incurred during Q1 2021 | 1 | — | — | — | 1 | |||||||||||||||||||||||||||
Costs incurred during Q2 2021 | 1 | — | — | — | 1 | |||||||||||||||||||||||||||
Costs incurred during Q3 2021 | — | — | — | — | — | |||||||||||||||||||||||||||
Total expected costs remaining | $ | 2 | $ | — | $ | — | $ | — | $ | 2 | ||||||||||||||||||||||
Actions Commenced in 2020: | ||||||||||||||||||||||||||||||||
Total expected costs | $ | 23 | $ | 7 | $ | 31 | $ | — | $ | 61 | ||||||||||||||||||||||
Costs incurred during 2020 | 19 | 4 | 30 | — | 53 | |||||||||||||||||||||||||||
Costs incurred during Q1 2021 | 2 | 1 | 1 | — | 4 | |||||||||||||||||||||||||||
Costs incurred during Q2 2021 | 2 | — | — | — | 2 | |||||||||||||||||||||||||||
Costs incurred during Q3 2021 | — | 1 | — | — | 1 | |||||||||||||||||||||||||||
Total expected costs remaining | $ | — | $ | 1 | $ | — | $ | — | $ | 1 | ||||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||||||||||||||||||||
(In millions) | 2021 | 2020 | Change | 2021 | 2020 | Change | |||||||||||||||||||||||||||||||||||
Water Infrastructure | |||||||||||||||||||||||||||||||||||||||||
Operating income | $ | 101 | $ | 89 | 13.5 | % | $ | 265 | $ | 201 | 31.8 | % | |||||||||||||||||||||||||||||
Operating margin | 18.5 | % | 17.0 | % | 150 | bp | 16.3 | % | 13.7 | % | 260 | bp | |||||||||||||||||||||||||||||
Restructuring and realignment costs | 1 | 8 | (87.5) | % | 10 | 21 | (52.4) | % | |||||||||||||||||||||||||||||||||
Adjusted operating income | $ | 102 | $ | 97 | 5.2 | % | $ | 275 | $ | 222 | 23.9 | % | |||||||||||||||||||||||||||||
Adjusted operating margin | 18.6 | % | 18.5 | % | 10 | bp | 16.9 | % | 15.2 | % | 170 | bp | |||||||||||||||||||||||||||||
Applied Water | |||||||||||||||||||||||||||||||||||||||||
Operating income | $ | 60 | $ | 56 | 7.1 | % | $ | 190 | $ | 144 | 31.9 | % | |||||||||||||||||||||||||||||
Operating margin | 15.0 | % | 15.4 | % | (40) | bp | 15.7 | % | 13.9 | % | 180 | bp | |||||||||||||||||||||||||||||
Restructuring and realignment costs | 2 | 2 | — | % | 5 | 8 | (37.5) | % | |||||||||||||||||||||||||||||||||
Special charges | — | — | — | % | 1 | — | NM | ||||||||||||||||||||||||||||||||||
Adjusted operating income | $ | 62 | $ | 58 | 6.9 | % | $ | 196 | $ | 152 | 28.9 | % | |||||||||||||||||||||||||||||
Adjusted operating margin | 15.5 | % | 15.9 | % | (40) | bp | 16.2 | % | 14.6 | % | 160 | bp | |||||||||||||||||||||||||||||
Measurement & Control Solutions | |||||||||||||||||||||||||||||||||||||||||
Operating income (loss) | $ | 7 | $ | (62) | 111.3 | % | $ | 29 | $ | (120) | 124.2 | % | |||||||||||||||||||||||||||||
Operating margin | 2.2 | % | (18.7) | % | 2,090 | bp | 2.8 | % | (12.0) | % | 1,480 | bp | |||||||||||||||||||||||||||||
Restructuring and realignment costs | (1) | 5 | 120.0 | % | 1 | 38 | (97.4) | % | |||||||||||||||||||||||||||||||||
Special charges | — | 69 | NM | — | 79 | NM | |||||||||||||||||||||||||||||||||||
Adjusted operating income (loss) | $ | 6 | $ | 12 | 50.0 | % | $ | 30 | $ | (3) | 1,100.0 | % | |||||||||||||||||||||||||||||
Adjusted operating margin | 1.9 | % | 3.6 | % | (170) | bp | 2.9 | % | (0.3) | % | 320 | bp | |||||||||||||||||||||||||||||
Corporate and other | |||||||||||||||||||||||||||||||||||||||||
Operating loss | $ | (16) | $ | (10) | 60.0 | % | $ | (39) | $ | (37) | 5.4 | % | |||||||||||||||||||||||||||||
Special charges | 1 | 1 | — | % | 2 | 2 | — | % | |||||||||||||||||||||||||||||||||
Adjusted operating loss | $ | (15) | $ | (9) | 66.7 | % | $ | (37) | $ | (35) | 5.7 | % | |||||||||||||||||||||||||||||
Total Xylem | |||||||||||||||||||||||||||||||||||||||||
Operating income | $ | 152 | $ | 73 | 108.2 | % | $ | 445 | $ | 188 | 136.7 | % | |||||||||||||||||||||||||||||
Operating margin | 12.0 | % | 6.0 | % | 600 | bp | 11.5 | % | 5.4 | % | 610 | bp | |||||||||||||||||||||||||||||
Restructuring and realignment costs | 2 | 15 | (86.7) | % | 16 | 67 | (76.1) | % | |||||||||||||||||||||||||||||||||
Special charges | 1 | 70 | (98.6) | % | 3 | 81 | (96.3) | % | |||||||||||||||||||||||||||||||||
Adjusted operating income | $ | 155 | $ | 158 | (1.9) | % | $ | 464 | $ | 336 | 38.1 | % | |||||||||||||||||||||||||||||
Adjusted operating margin | 12.3 | % | 13.0 | % | (70) | bp | 12.0 | % | 9.6 | % | 240 | bp |
Nine Months Ended | |||||||||||||||||
September 30, | |||||||||||||||||
(In millions) | 2021 | 2020 | Change | ||||||||||||||
Operating activities | $ | 318 | $ | 454 | $ | (136) | |||||||||||
Investing activities | (113) | (326) | 213 | ||||||||||||||
Financing activities | (806) | 550 | (1,356) | ||||||||||||||
Foreign exchange (a) | (19) | — | (19) | ||||||||||||||
Total | $ | (620) | $ | 678 | $ | (1,298) |
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
PERIOD |
TOTAL NUMBER OF SHARES PURCHASED | AVERAGE PRICE PAID PER SHARE (a) | TOTAL NUMBER OF SHARES PURCHASED AS PART OF PUBLICLY ANNOUNCED PLANS OR PROGRAMS (b) | APPROXIMATE DOLLAR VALUE OF SHARES THAT MAY YET BE PURCHASED UNDER THE PLANS OR PROGRAMS (b) | ||||||||||||||||||||||
7/1/21 - 7/31/21 | — | — | — | $228 | ||||||||||||||||||||||
8/1/21 - 8/31/21 | — | — | — | $228 | ||||||||||||||||||||||
9/1/21 - 9/30/21 | — | — | — | $228 |
Exhibit
Number
|
Description | Location | |||||||||
Fourth Amended and Restated Articles of Incorporation of Xylem Inc. | Incorporated by reference to Exhibit 3.1 of Xylem Inc.’s Form 8-K filed on May 15, 2017 (CIK No. 1524472, File No. 1-35229). | ||||||||||
Fourth Amended and Restated By-laws of Xylem Inc. | Incorporated by reference to Exhibit 3.2 of Xylem Inc.’s Form 8-K filed on May 15, 2017 (CIK No. 1524472, File No. 1-35229). | ||||||||||
Certification pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | Filed herewith. | ||||||||||
Certification pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | Filed herewith. | ||||||||||
Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | This Exhibit is intended to be furnished in accordance with Regulation S-K Item 601(b) (32) (ii) and shall not be deemed to be filed for purposes of Section 18 of the Securities Exchange Act of 1934 or incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except as shall be expressly set forth by specific reference. | ||||||||||
Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | This Exhibit is intended to be furnished in accordance with Regulation S-K Item 601(b) (32) (ii) and shall not be deemed to be filed for purposes of Section 18 of the Securities Exchange Act of 1934 or incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except as shall be expressly set forth by specific reference. | ||||||||||
101.0 |
The following materials from Xylem Inc.’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2021, formatted in Inline Extensible Business Reporting Language (Inline XBRL): (i) Condensed Consolidated Income Statements, (ii) Condensed Consolidated Statements of Comprehensive Income, (iii) Condensed Consolidated Balance Sheets, (iv) Condensed Consolidated Statements of Cash Flows and (v) Notes to Condensed Consolidated Financial Statements
|
The instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document.
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104.0 | The cover page from Xylem Inc.'s Quarterly Report on Form 10-Q for the period ended September 30, 2021 formatted in Inline XBRL and contained in Exhibit 101.0. |
XYLEM INC. | ||||||||
(Registrant) | ||||||||
/s/ Geri McShane | ||||||||
Geri McShane | ||||||||
Vice President, Controller and Chief Accounting Officer | ||||||||
1 Year Xylem Chart |
1 Month Xylem Chart |
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