- Third quarter 2014 adjusted net income was $97 million or $0.53 per
share, up 8 percent over third quarter 2013; GAAP net income was $106
million or $0.58 per share, up 49 percent
- Third quarter orders exceeded $1 billion, growing 8 percent
year-over-year and outpacing third quarter revenue of $963 million
- Strong operational performance drove a 40 basis-point improvement
in third quarter 2014 adjusted operating margin to 13.9 percent; up
330 basis points to 13.5 percent on a GAAP basis
- Company narrows guidance range for 2014 full-year adjusted earnings
per share to $1.92 to $1.98; GAAP earnings per share of $1.79 to $1.88
Company Website:
http://www.xyleminc.com
RYE BROOK, N.Y. -- (Business Wire)
Xylem Inc. (NYSE:XYL), a leading global water technology company
dedicated to solving the world’s most challenging water issues, today
announced third quarter 2014 net income of $106 million, or $0.58 per
share. Excluding the gain on the sale of a business, impact of
restructuring and realignment costs and other special charges, adjusted
net income was $97 million or $0.53 per share, an increase of 4 cents or
8 percent from the comparable period in 2013. Third quarter revenue was
$963 million, up 1 percent organically, reflecting strength in the U.S.
and emerging markets, which was partially offset by weaker market
conditions in Europe. Third quarter adjusted operating margin improved
40 basis points, driven by increased operating efficiencies and ongoing
cost-reduction initiatives.
“We are continuing on a strong path and are on track to deliver on our
full-year commitments. We generated strong order growth this quarter and
further expanded our operating margin to a third quarter record
performance,” said Patrick Decker, president and chief executive officer
of Xylem. “We continued to see strength in emerging markets that, among
other big wins, included a nearly $20 million order for customized
column pumps as part of a hydropower dam in the Mekong River in Laos and
a $7 million win in India that is part of a large project to divert
excess flood water from the Narmada River.”
Decker continued, “As we look ahead to 2015, we intend to further focus
on the growing strength we see in key developing markets, while
improving operational execution across the Company. We are continuing to
evolve our organization to ensure we have the right capabilities to
solve our customers’ most challenging water issues in order to drive
further growth and deliver greater shareholder value.”
Full-year 2014 Outlook
Xylem narrowed its EPS guidance, and now expects to deliver adjusted EPS
of $1.92 to $1.98, reflecting 15 to 19-percent growth over its 2013
results. Full-year 2014 adjusted net income now is expected to be in the
range of $355 to $365 million. Revenue is expected to be approximately
$4 billion for 2014, up 2 percent versus the prior year. The Company
anticipates that restructuring and realignment costs will range from $40
to $50 million for the year.
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.
-
The Company delivered third quarter 2014 revenue of $619 million, up 1
percent organically compared with the prior year period, with growth
driven by strength in U.S. water, wastewater and dewatering transport
applications, and continued strength in Xylem’s test platform. This
growth was partially offset by weaker European market conditions and
year-over-year timing in public utility treatment projects.
-
Third quarter adjusted segment operating income increased 1 percent
year-over-year to $97 million. Adjusted operating margin for the
quarter increased 20 basis points to 15.7 percent, primarily driven by
the impact of significant cost reductions and higher volume, which was
partially offset by unfavorable mix and price.
Applied Water
Xylem’s Applied Water segment consists of its portfolio of businesses in
residential and commercial building services, and industrial and
agricultural applications.
-
Third quarter 2014 revenue was $362 million, up 1 percent organically
compared with the third quarter 2013. This result reflects growth
across all U.S. end markets and applications, as well as continued
strength in China. Partially offsetting these gains was weakness in
the Company’s Southern and Eastern European markets, and Latin America.
-
Third quarter adjusted segment operating income grew 20 percent to $53
million versus the comparable period last year. Adjusted operating
margin grew 240 basis points to 14.6 percent, primarily driven by the
impact of cost reduction actions and modest price realization.
Supplemental information on Xylem’s third quarter earnings and
reconciliations for certain 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 Rye Brook, New York, with 2013
revenues of $3.8 billion and more than 12,500 employees worldwide. Xylem
was named to the Dow Jones Sustainability Index for the last three years
for advancing sustainable business practices and solutions worldwide.
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 document contains information that may constitute “forward-looking
statements.” Forward-looking statements by their nature address matters
that are, to different degrees, uncertain. Generally, the words
“anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,”
“believe,” “target” 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, but are not limited to,
statements about the capitalization of Xylem Inc. (the “Company”), the
Company’s restructuring and realignment, future strategic plans and
other statements that describe the Company’s business strategy, outlook,
objectives, plans, intentions or goals, and any discussion of future
operating or financial performance. All statements that address
operating performance, events or developments that we expect or
anticipate will occur in the future -- including statements relating to
orders, revenues, operating margins and earnings per share growth, and
statements expressing general views about future operating results --
are forward-looking statements.
Caution should be taken not to place undue reliance on any such
forward-looking statements because they involve risks, uncertainties and
other factors that could cause actual results to differ materially from
those expressed or implied in, or reasonably inferred from such
statements. 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. In
addition, forward-looking statements are subject to certain risks and
uncertainties that could cause actual results to differ materially from
the Company’s historical experience and our present expectations or
projections. These risks and uncertainties include, but are not limited
to, those set forth in Item 1A of our Annual Report on Form 10-K for the
year ended December 31, 2013, and those described from time to time in
subsequent reports filed with the Securities and Exchange Commission.
|
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, |
| 2014 |
|
2013
| | 2014 |
|
2013
|
Revenue
| | $ | 963 | | |
$
|
965
| | | $ | 2,874 | | |
$
|
2,804
| |
Cost of revenue
| | 587 |
| |
581
|
| | 1,768 |
| |
1,715
|
|
Gross profit
| | 376 | | |
384
| | | 1,106 | | |
1,089
| |
Selling, general and administrative expenses
| | 222 | | |
257
| | | 688 | | |
747
| |
Research and development expenses
| | 24 | | |
24
| | | 78 | | |
78
| |
Restructuring charges
| | — |
| |
5
|
| | 18 |
| |
30
|
|
Operating income
| | 130 | | |
98
| | | 322 | | |
234
| |
Interest expense
| | 14 | | |
14
| | | 41 | | |
41
| |
Other non-operating income (expense), net
| | 1 | | |
(1
|
)
| | 1 | | |
(2
|
)
|
Gain from sale of business
| | 11 |
| |
—
|
| | 11 |
| |
—
|
|
Income before taxes
| | 128 | | |
83
| | | 293 | | |
191
| |
Income tax expense
| | 22 |
| |
10
|
| | 52 |
| |
31
|
|
Net income
| | $ | 106 |
| |
$
|
73
|
| | $ | 241 |
| |
$
|
160
|
|
Earnings per share:
| | | | | | | | | | | | |
Basic
| | $ | 0.58 | | |
$
|
0.39
| | | $ | 1.31 | | |
$
|
0.86
| |
Diluted
| | $ | 0.58 | | |
$
|
0.39
| | | $ | 1.31 | | |
$
|
0.86
| |
Weighted average number of shares:
| | | | | | | | | | | | |
Basic
| | 182.2 | | |
185.2
| | | 183.4 | | |
185.5
| |
Diluted
| | 183.4 | | |
186.0
| | | 184.6 | | |
186.2
| |
Dividends declared per share
| | $ | 0.1280 | | |
$
|
0.1164
| | | $ | 0.3840 | | |
$
|
0.3492
| |
| | | | | | | | | | | | | | | |
|
|
XYLEM INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions, except per share amounts)
|
|
| |
| |
|
| September 30, 2014 | |
December 31, 2013
|
| |
(Unaudited)
| | | |
ASSETS | | | | | | |
Current assets:
| | | | | | |
Cash and cash equivalents
| | $ | 529 | | |
$
|
533
| |
Receivables, less allowances for discounts and doubtful accounts of
$30 and $31 in 2014 and 2013, respectively
| | 804 | | |
817
| |
Inventories, net
| | 516 | | |
475
| |
Prepaid and other current assets
| | 141 | | |
143
| |
Deferred income tax assets
| | 35 |
| |
41
|
|
Total current assets
| | 2,025 | | |
2,009
| |
Property, plant and equipment, net
| | 454 | | |
488
| |
Goodwill
| | 1,667 | | |
1,718
| |
Other intangible assets, net
| | 448 | | |
488
| |
Other non-current assets
| | 220 |
| |
193
|
|
Total assets | | $ | 4,814 |
| |
$
|
4,896
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | |
Current liabilities:
| | | | | | |
Accounts payable
| | $ | 314 | | |
$
|
332
| |
Accrued and other current liabilities
| | 495 | | |
479
| |
Short-term borrowings and current maturities of long-term debt
| | 41 |
| |
42
|
|
Total current liabilities
| | 850 | | |
853
| |
Long-term debt
| | 1,199 | | |
1,199
| |
Accrued postretirement benefits
| | 319 | | |
348
| |
Deferred income tax liabilities
| | 183 | | |
191
| |
Other non-current accrued liabilities
| | 70 |
| |
64
|
|
Total liabilities | | 2,621 |
| |
2,655
|
|
Commitments and contingencies (Note 17)
| | | | | | |
Stockholders’ equity:
| | | | | | |
Common Stock – par value $0.01 per share:
| | | | | | |
Authorized 750.0 shares, issued 188.4 shares and 187.6 shares in
2014 and 2013, respectively
| | 2 | | |
2
| |
Capital in excess of par value
| | 1,785 | | |
1,753
| |
Retained earnings
| | 575 | | |
405
| |
Treasury stock – at cost 6.5 shares and 3.0 shares in 2014 and 2013,
respectively
| | (218 | ) | |
(86
|
)
|
Accumulated other comprehensive income
| | 49 |
| |
167
|
|
Total stockholders’ equity | | 2,193 |
| |
2,241
|
|
Total liabilities and stockholders’ equity | | $ | 4,814 |
| |
$
|
4,896
|
|
| | | | | | | |
|
|
XYLEM INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(in millions)
|
|
| | |
| | |
For the nine months ended September 30, |
| 2014 | |
2013
|
Operating Activities | | | | | | |
Net income
| | $ | 241 | | |
$
|
160
| |
Adjustments to reconcile net income to net cash provided by
operating activities:
| | | | | | |
Depreciation
| | 70 | | |
72
| |
Amortization
| | 37 | | |
38
| |
Share-based compensation
| | 14 | | |
21
| |
Restructuring charges
| | 18 | | |
30
| |
Gain from sale of businesses
| | (11 | ) | |
—
| |
Other, net
| | (2 | ) | |
11
| |
Payments for restructuring
| | (20 | ) | |
(24
|
)
|
Changes in assets and liabilities (net of acquisitions):
| | | | | | |
Changes in receivables
| | (40 | ) | |
(71
|
)
|
Changes in inventories
| | (62 | ) | |
(59
|
)
|
Changes in accounts payable
| | (2 | ) | |
4
| |
Other, net
| | 10 |
| |
(19
|
)
|
Net Cash – Operating activities | | 253 |
| |
163
|
|
Investing Activities | | | | | | |
Capital expenditures
| | (77 | ) | |
(91
|
)
|
Acquisitions of businesses and assets, net of cash acquired
| | — | | |
(81
|
)
|
Proceeds from sale of business
| | 30 | | |
—
| |
Proceeds from the sale of property, plant and equipment
| | 2 |
| |
7
|
|
Net Cash – Investing activities | | (45 | ) | |
(165
|
)
|
Financing Activities | | | | | | |
Issuance of short-term debt
| | 2 | | |
—
| |
Principal payments of debt and capital lease obligations
| | — | | |
(2
|
)
|
Repurchase of common stock
| | (132 | ) | |
(44
|
)
|
Proceeds from exercise of employee stock options
| | 17 | | |
2
| |
Dividends paid
| | (71 | ) | |
(65
|
)
|
Excess tax benefit from share based compensation
| | 1 | | |
—
| |
Other, net
| | 1 |
| |
—
|
|
Net Cash – Financing activities | | (182 | ) | |
(109
|
)
|
Effect of exchange rate changes on cash | | (30 | ) | |
1
|
|
Net change in cash and cash equivalents
| | (4 | ) | |
(110
|
)
|
Cash and cash equivalents at beginning of year
| | 533 |
| |
504
|
|
Cash and cash equivalents at end of period | | $ | 529 |
| |
$
|
394
|
|
Supplemental disclosure of cash flow information: | | | | | | |
Cash paid during the period for:
| | | | | | |
Interest
| | $ | 36 | | |
$
|
37
| |
Income taxes (net of refunds received)
| | $ | 69 | | |
$
|
61
| |
| | | | | | | |
|
| | | | | | | |
|
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 foreign
currency fluctuations, intercompany transactions, 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 non-recurring
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 non-recurring restructuring
and realignment costs, gain on sale of business, 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 non-recurring costs not included
in restructuring costs that are incurred as part of actions taken to
reposition our business, including items such as professional fees,
relocation, travel and other costs.
“Special charges” defined as costs incurred by the Company
associated with the settlement of legal proceedings with Xylem Group LLC
and certain costs incurred for the change in chief executive officer
made during the third quarter of 2013, as well as costs incurred in the
fourth quarter of 2013 for the contractual indemnification of federal
tax obligations to ITT and costs associated with a legal judgment
arising from a historical acquisition matter.
|
Xylem Inc. Non-GAAP Reconciliation
|
Reported vs. Organic & Constant Currency Order Growth
|
($ Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (As Reported - GAAP) | | (As Adjusted - Organic) | | Constant Currency |
| |
|
(A)
|
|
(B)
|
| | |
(C)
|
|
(D)
|
|
(E)
|
|
(F) = B+C+D+E
|
|
(G) = F/A
| |
(H) = (F - C) / A
|
| | | | | | | | | | | | | | | | | | |
|
| | | | |
Change
| |
% Change
| |
Acquisitions /
| | | | | |
Change
| |
% Change
| | |
|
Orders
| |
Orders
| |
2014 v. 2013
| |
2014 v. 2013
| |
Divestitures
| |
FX Contribution
| |
Eliminations
| |
Adj. 2014 v. 2013
| |
Adj. 2014 v. 2013
| | |
|
2014
| |
2013
| | | | | | | | | | | | | | | | |
Nine Months Ended September 30 | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
|
Xylem Inc. |
3,051
| |
2,926
| |
125
| |
4
|
%
| |
(3
|
)
| |
(3
|
)
| |
-
| | |
119
| | |
4
|
%
| |
4
|
%
|
| | | | | | | | | | | | | | | | | | |
|
Water Infrastructure
|
1,973
| |
1,865
| |
108
| |
6
|
%
| |
(8
|
)
| |
7
| | |
3
| | |
110
| | |
6
|
%
| |
6
|
%
|
Applied Water
|
1,135
| |
1,111
| |
24
| |
2
|
%
| |
5
| | |
(11
|
)
| |
(9
|
)
| |
9
| | |
1
|
%
| |
0
|
%
|
| | | | | | | | | | | | | | | | | | |
|
Quarter Ended September 30 | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
|
Xylem Inc. |
1,027
| |
955
| |
72
| |
8
|
%
| |
5
| | |
2
| | |
-
| | |
79
| | |
8
|
%
| |
8
|
%
|
| | | | | | | | | | | | | | | | | | |
|
Water Infrastructure
|
680
| |
617
| |
63
| |
10
|
%
| |
-
| | |
4
| | |
1
| | |
68
| | |
11
|
%
| |
11
|
%
|
Applied Water
|
363
| |
355
| |
8
| |
2
|
%
| |
5
| | |
(2
|
)
| |
-
| | |
11
| | |
3
|
%
| |
2
|
%
|
| | | | | | | | | | | | | | | | | | |
|
Quarter Ended June 30 | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
|
Xylem Inc. |
1,031
| |
1,009
| |
22
| |
2
|
%
| |
(1
|
)
| |
(8
|
)
| |
-
| | |
13
| | |
1
|
%
| |
1
|
%
|
| | | | | | | | | | | | | | | | | | |
|
Water Infrastructure
|
674
| |
647
| |
27
| |
4
|
%
| |
(1
|
)
| |
(3
|
)
| |
-
| | |
23
| | |
4
|
%
| |
4
|
%
|
Applied Water
|
378
| |
378
| |
-
| |
0
|
%
| |
-
| | |
(5
|
)
| |
(6
|
)
| |
(11
|
)
| |
-3
|
%
| |
-3
|
%
|
| | | | | | | | | | | | | | | | | | |
|
Quarter Ended March 31 | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
|
Xylem Inc. |
993
| |
962
| |
31
| |
3
|
%
| |
(7
|
)
| |
3
| | |
-
| | |
27
| | |
3
|
%
| |
4
|
%
|
| | | | | | | | | | | | | | | | | | |
|
Water Infrastructure
|
619
| |
601
| |
18
| |
3
|
%
| |
(7
|
)
| |
6
| | |
2
| | |
19
| | |
3
|
%
| |
4
|
%
|
Applied Water
|
394
| |
378
| |
16
| |
4
|
%
| |
-
| | |
(4
|
)
| |
(3
|
)
| |
9
| | |
2
|
%
| |
2
|
%
|
| | | | | | | | | | | | | | | | | | |
|
Note: Due to rounding the sum of segment amounts may not agree to
Xylem totals.
|
| | | | | | | | | | | | |
|
|
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)
|
|
(F) = B+C+D+E
|
|
(G) = F/A
| |
(H) = (F - C) / A
|
| | | | | | | | | | | | | | | | | | |
|
| | | | |
Change
| |
% Change
| |
Acquisitions /
| | | | | |
Change
| |
% Change
| | |
|
Revenue
| |
Revenue
| |
2014 v. 2013
| |
2014 v. 2013
| |
Divestitures
| |
FX Contribution
| |
Eliminations
| |
Adj. 2014 v. 2013
| |
Adj. 2014 v. 2013
| | |
|
2014
| |
2013
| | | | | | | | | | | | | | | | |
Nine Months Ended September 30 | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
|
Xylem Inc. |
2,874
| |
2,804
| |
70
| | |
2
|
%
| |
1
| | |
(1
|
)
| |
-
| | |
70
| | |
2
|
%
| |
2
|
%
|
| | | | | | | | | | | | | | | | | | |
|
Water Infrastructure
|
1,823
| |
1,766
| |
57
| | |
3
|
%
| |
(6
|
)
| |
9
| | |
3
| | |
63
| | |
4
|
%
| |
4
|
%
|
Applied Water
|
1,105
| |
1,086
| |
19
| | |
2
|
%
| |
7
| | |
(11
|
)
| |
(7
|
)
| |
8
| | |
1
|
%
| |
0
|
%
|
| | | | | | | | | | | | | | | | | | |
|
Quarter Ended September 30 | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
|
Xylem Inc. |
963
| |
965
| |
(2
|
)
| |
0
|
%
| |
7
| | |
2
| | |
-
| | |
7
| | |
1
|
%
| |
0
|
%
|
| | | | | | | | | | | | | | | | | | |
|
Water Infrastructure
|
619
| |
619
| |
-
| | |
0
|
%
| |
-
| | |
4
| | |
-
| | |
4
| | |
1
|
%
| |
1
|
%
|
Applied Water
|
362
| |
360
| |
2
| | |
1
|
%
| |
7
| | |
(2
|
)
| |
(3
|
)
| |
4
| | |
1
|
%
| |
-1
|
%
|
| | | | | | | | | | | | | | | | | | |
|
Quarter Ended June 30 | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
|
Xylem Inc. |
1,005
| |
960
| |
45
| | |
5
|
%
| |
(1
|
)
| |
(7
|
)
| |
-
| | |
37
| | |
4
|
%
| |
4
|
%
|
| | | | | | | | | | | | | | | | | | |
|
Water Infrastructure
|
636
| |
596
| |
40
| | |
7
|
%
| |
(1
|
)
| |
(2
|
)
| |
2
| | |
39
| | |
7
|
%
| |
7
|
%
|
Applied Water
|
388
| |
381
| |
7
| | |
2
|
%
| |
-
| | |
(6
|
)
| |
(3
|
)
| |
(2
|
)
| |
-1
|
%
| |
-1
|
%
|
| | | | | | | | | | | | | | | | | | |
|
Quarter Ended March 31 | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
|
Xylem Inc. |
906
| |
879
| |
27
| | |
3
|
%
| |
(5
|
)
| |
4
| | |
-
| | |
26
| | |
3
|
%
| |
4
|
%
|
| | | | | | | | | | | | | | | | | | |
|
Water Infrastructure
|
568
| |
551
| |
17
| | |
3
|
%
| |
(5
|
)
| |
7
| | |
1
| | |
20
| | |
4
|
%
| |
5
|
%
|
Applied Water
|
355
| |
345
| |
10
| | |
3
|
%
| |
-
| | |
(3
|
)
| |
(1
|
)
| |
6
| | |
2
|
%
| |
2
|
%
|
| | | | | | | | | | | | | | | | | | |
|
Note: Due to rounding the sum of segment amounts may not agree to
Xylem totals.
|
|
|
Xylem Inc. Non-GAAP Reconciliation
|
Adjusted Operating Income
|
($ Millions)
|
|
|
|
|
|
|
|
|
|
| | Q3 | | YTD |
| | 2014 |
| 2013 | | 2014 |
| 2013 |
Total Revenue
| | | | | | | | |
• Total Xylem
| |
963
| |
965
| |
2,874
| |
2,804
|
• Water Infrastructure
|
|
619
| |
619
|
|
1,823
| |
1,766
|
• Applied Water
|
|
362
| |
360
|
|
1,105
| |
1,086
|
|
|
|
|
|
|
|
|
|
Operating Income
| | | | | | | | |
• Total Xylem
| |
130
| |
98
| |
322
| |
234
|
• Water Infrastructure
|
|
94
| |
88
|
|
217
| |
171
|
• Applied Water
|
|
52
| |
40
|
|
145
| |
125
|
• Total Segments
| |
146
| |
128
| |
362
| |
296
|
| | | | | | | |
|
Operating Margin
| | | | | | | | |
• Total Xylem
| |
13.5%
| |
10.2%
| |
11.2%
| |
8.3%
|
• Water Infrastructure
| |
15.2%
| |
14.2%
| |
11.9%
| |
9.7%
|
• Applied Water
| |
14.4%
| |
11.1%
| |
13.1%
| |
11.5%
|
• Total Segments
|
|
15.2%
|
|
13.3%
|
|
12.6%
|
|
10.6%
|
| | | | | | | |
|
Special Charges
| | | | | | | | |
• Total Xylem
| |
-
| |
20
| |
-
| |
20
|
| | | | | | | |
|
Restructuring & Realignment Costs
| | | | | | | | |
• Total Xylem
| |
4
| |
12
| |
31
| |
52
|
• Water Infrastructure
| |
3
| |
8
| |
20
| |
40
|
• Applied Water
| |
1
| |
4
| |
11
| |
12
|
• Total Segments
| |
4
| |
12
| |
31
| |
52
|
|
|
|
|
|
|
|
|
|
Adjusted Operating Income*
| | | | | | | | |
• Total Xylem
| |
134
| |
130
| |
353
| |
306
|
• Water Infrastructure
|
|
97
| |
96
|
|
237
| |
211
|
• Applied Water
|
|
53
| |
44
|
|
156
| |
137
|
• Total Segments
| |
150
| |
140
| |
393
| |
348
|
| | | | | | | |
|
Adjusted Operating Margin*
| | | | | | | | |
• Total Xylem
| |
13.9%
| |
13.5%
| |
12.3%
| |
10.9%
|
• Water Infrastructure
| |
15.7%
| |
15.5%
| |
13.0%
| |
11.9%
|
• Applied Water
| |
14.6%
| |
12.2%
| |
14.1%
| |
12.6%
|
• Total Segments
|
|
15.6%
|
|
14.5%
|
|
13.7%
|
|
12.4%
|
| | | | | | | |
|
*Adjusted Operating Income excludes restructuring & realignment
costs and special charges.
|
|
|
Xylem Inc. Non-GAAP Reconciliation Adjusted Diluted EPS ($
Millions, except per share amounts)
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| | Q3 2013 | | Q3 2014 |
| | As Reported |
| Adjustments | | Adjusted | | | As Reported |
| Adjustments | | Adjusted |
|
Total Revenue
|
965
| | | | |
965
| | | |
963
| | | | |
963
| |
|
Operating Income
|
98
| | |
32
| |
a
|
130
| | | |
130
| | |
4
| |
c
|
134
| |
|
Operating Margin
| 10.2 | % | | | | 13.5 | % | | | 13.5 | % | | | | 13.9 | % |
|
Interest Expense
|
(14
|
)
| | | |
(14
|
)
| | |
(14
|
)
| | | |
(14
|
)
|
|
Other Non-Operating Income (Expense)
|
(1
|
)
| | | |
(1
|
)
| | |
1
| | | | |
1
| |
|
Gain on sale of business
|
-
|
| |
| |
-
|
| | |
11
|
| |
(11
|
)
| |
-
|
|
|
Income before Taxes
|
83
| | |
32
| | |
115
| | | |
128
| | |
(7
|
)
| |
121
| |
|
Provision for Income Taxes
|
(10
|
)
| |
(13
|
)
|
b
|
(23
|
)
| | |
(22
|
)
| |
(2
|
)
|
b
|
(24
|
)
|
|
Net Income
|
73
|
| |
19
|
| |
92
|
| | |
106
|
| |
(9
|
)
| |
97
|
|
|
Diluted Shares
|
186.0
|
|
|
|
|
186.0
|
|
|
|
183.4
|
|
|
|
|
183.4
|
|
| Diluted EPS | $ 0.39 |
|
| $ 0.10 |
|
| $ 0.49 |
|
|
| $ 0.58 |
|
| $ (0.05 | ) |
| $ 0.53 |
|
| | | | | | | | | | | | |
|
| | | | | | | | | | | | |
|
| |
|
|
|
|
|
| |
|
|
|
|
|
| | Q3 YTD 2013 | | Q3 YTD 2014 |
| | As Reported | | Adjustments | | Adjusted | | | As Reported | | Adjustments | | Adjusted |
|
Total Revenue
|
2,804
| | | | |
2,804
| | | |
2,874
| | | | |
2,874
| |
|
Operating Income
|
234
| | |
72
| |
a
|
306
| | | |
322
| | |
31
| |
c
|
353
| |
|
Operating Margin
| 8.3 | % | | | | 10.9 | % | | | 11.2 | % | | | | 12.3 | % |
|
Interest Expense
|
(41
|
)
| | | |
(41
|
)
| | |
(41
|
)
| | | |
(41
|
)
|
|
Other Non-Operating Income (Expense)
|
(2
|
)
| | | |
(2
|
)
| | |
1
| | | | |
1
| |
|
Gain on sale of business
|
-
|
| |
| |
-
|
| | |
11
|
| |
(11
|
)
| |
-
|
|
|
Income before Taxes
|
191
| | |
72
| | |
263
| | | |
293
| | |
20
| | |
313
| |
|
Provision for Income Taxes
|
(31
|
)
| |
(24
|
)
|
b
|
(55
|
)
| | |
(52
|
)
| |
(13
|
)
|
b
|
(65
|
)
|
|
Net Income
|
160
|
| |
48
|
| |
208
|
| | |
241
|
| |
7
|
| |
248
|
|
|
Diluted Shares
|
186.2
|
|
|
|
|
186.2
|
|
|
|
184.6
|
|
|
|
|
184.6
|
|
| Diluted EPS | $ 0.86 |
|
| $ 0.26 |
|
| $ 1.12 |
|
|
| $ 1.31 |
|
| $ 0.04 |
|
| $ 1.35 |
|
| | | | | | | | | | | | |
|
a
|
Restructuring & realignment costs and special charges
|
b
|
Net tax impact of restructuring & realignment costs, special charges
and special tax items
|
c
|
Restructuring & realignment costs
|
|
|
|
Xylem Inc. Non-GAAP Reconciliation
|
Net Cash - Operating Activities vs. Free Cash Flow
|
($ Millions)
|
|
| |
| |
| |
Nine Months Ended
|
| |
|
2014
|
| |
|
2013
|
|
| | | |
|
Net Cash - Operating Activities | |
$
|
253
| | |
$
|
163
| |
| | | |
|
Capital Expenditures
| | |
(77
|
)
| | |
(91
|
)
|
| |
| |
|
Free Cash Flow | |
$
|
176
|
| |
$
|
72
|
|
| | | |
|
Net Income
| | |
241
| | | |
160
| |
| | | |
|
Gain on Sale of Business
| |
|
11
|
| |
|
-
|
|
| | | |
|
Net Income, excluding gain on sale of business | |
$
|
230
|
| |
$
|
160
|
|
| | | |
|
Free Cash Flow Conversion | |
|
77
|
%
| |
|
45
|
%
|
Contacts:
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
Source: Xylem Inc.
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