Company also announces $69 million acquisition of Tideland Signal
Corporation and
a 10-percent increase in its quarterly cash
dividend
- Fourth quarter 2015 adjusted net income was $108 million or $0.60
per share; GAAP net income was $114 million or $0.63 per share
- Full-year 2015 adjusted net income was $336 million or $1.85 per
share; Full-year GAAP net income was $340 million or $1.87 per share
- Xylem delivered $994 million in fourth quarter 2015 revenue, growth
of two percent organically
- Balanced capital deployment continues with strategic acquisition of
Tideland, $50 million in share repurchases and quarterly cash dividend
increase
- Xylem projects full-year 2016 organic revenue growth of two to four
percent and adjusted earnings per share of $1.95 to $2.05
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
reported fourth quarter 2015 net income of $114 million, or $0.63 per
share. Excluding the impact of restructuring, realignment and other
special items, the Company delivered adjusted net income of $108 million
or $0.60 per share in the quarter, a three-percent increase over the
prior year period excluding foreign exchange translation impact. Fourth
quarter revenue was $994 million, up two percent organically, reflecting
continued growth in the municipal and construction markets. Fourth
quarter adjusted operating margin was flat year-over-year as continued
improvements from cost savings initiatives were offset by headwinds from
inflation as well as geographic and product mix.
For the full year 2015, Xylem generated $3.65 billion in revenue, up two
percent organically. Full-year reported net income was $340 million, or
$1.87 per share, with an operating margin of 12.3 percent. Adjusted net
income, which excludes the impact of restructuring, realignment and
other special items, was $336 million, or $1.85 per share, a
five-percent increase over the prior year excluding foreign exchange
translation impact. Xylem delivered a full-year 2015 adjusted operating
margin of 12.9 percent, flat to prior year. The Company generated $347
million in free cash flow, an increase of 17 percent versus last year,
representing a conversion of 105 percent of net income.
“We closed out 2015 with strong results, delivering on our financial
commitments, executing well in the marketplace and advancing our
long-term growth initiatives,” said Patrick Decker, President and Chief
Executive Officer of Xylem. “We made significant progress in decidedly
mixed market conditions. We are encouraged by the continuing strength we
see in the public utility sector, particularly in the U.S. and key
emerging markets where pent-up demand for water and wastewater
infrastructure helped us to generate eight-percent growth in this end
market globally in the quarter. This strength offset declines in heavy
industry, specifically oil and gas and mining, where our exposure is
limited.”
Xylem today also announced the acquisition of Tideland, a leading
producer of analytics solutions in the coastal and ocean management
sectors. Based in Texas, the business also has key locations in the
Netherlands, United Kingdom and Singapore, and provides marine
navigation and environmental monitoring systems and products to a
variety of ports and harbors, offshore energy companies, and coastal and
marine authorities.
Decker continued, “This latest acquisition adds another complementary
set of offerings to our analytics portfolio. That, in combination with
the $50 million in share repurchases in the fourth quarter and
10-percent increase in our quarterly dividend announced today,
illustrates our continued focus on executing a balanced capital
deployment strategy. As we look ahead in 2016, we remain focused on
advancing our key growth initiatives, including driving sales
excellence, increasing our research and development investment, and
accelerating business simplification to accelerate Xylem’s growth and
enhance shareholder value.”
Xylem announced that its Board of Directors declared a dividend in the
amount of $0.1549 per share, an increase of 10 percent. The dividend is
payable on March 16, 2016 to shareholders of record as of February 18,
2016.
Full-year 2016 Outlook
Xylem forecasts full-year 2016 revenue of approximately $3.7 billion,
including approximately one-percent growth from recently completed
acquisitions and projected unfavorable impacts of foreign exchange
translation. On an organic basis, Xylem’s revenue growth is anticipated
to be in the range of two to four percent.
Full-year 2016 adjusted operating income is expected to be in the range
of $493 to $515 million, resulting in adjusted earnings per share of
$1.95 to $2.05. This represents an increase of five to 11 percent from
Xylem’s 2015 adjusted results. Excluding projected unfavorable impacts
of foreign exchange translation, Xylem’s adjusted earnings per share
growth is anticipated to be in the range of eight to 13 percent. The
Company’s adjusted earnings outlook excludes projected restructuring and
realignment costs of approximately $25 million for the year.
Fourth 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.
-
Fourth quarter 2015 revenue was $629 million, up one
percent organically compared with the fourth quarter 2014, reflecting
robust growth in the public utilities sector, particularly in the U.S.
where Xylem delivered a strong double-digit increase. This strength
was partially offset by continuing declines in the oil and gas and
mining sectors.
-
Fourth quarter adjusted operating income for the segment, which
excludes $2 million of restructuring and realignment, was $110
million, a three-percent decline over the same period in 2014.
Adjusted operating margin for the Water Infrastructure segment
increased 70 basis points to 17.5 percent as cost reductions and
volume leverage more than offset inflation and unfavorable mix.
Applied Water
Xylem’s Applied Water segment consists of its portfolio of businesses in
residential and commercial building services, industrial and
agricultural applications.
-
Fourth quarter 2015 Applied Water revenue was $365 million, a
three-percent organic increase year-over-year. The Company delivered a
strong performance in the U.S. residential market as well as
industrial water market applications in the U.S. and Europe. This
strength was partially offset by declines in certain emerging markets
as well as a soft irrigation sector.
-
Fourth quarter adjusted operating income for the segment, which
excludes $2 million of restructuring and realignment costs, was $49
million, two percent lower than the comparable period last year.
Applied Water segment adjusted operating margin declined 10 basis
points to 13.4 percent due to unfavorable foreign exchange translation
impact. Excluding the unfavorable impact of foreign exchange
translation, adjusted operating margin increased 10 basis points as
cost reductions and volume leverage more than offset inflation as well
as unfavorable mix and other cost increases.
Supplemental information on Xylem’s fourth quarter and full-year 2015
earnings and reconciliations for certain non-GAAP items is posted at
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 2015
revenue of $3.7 billion and approximately 12,500 employees worldwide.
Xylem was named to the Dow Jones Sustainability Index, North America for
the last four years for advancing sustainable business practices and
solutions worldwide, and the Company has satisfied the requirements to
be a constituent of the FTSE4Good Index Series each year since 2013.
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.xyleminc.com.
Forward-Looking Statements
This press release 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,” “forecast,” “believe,” “target,” “will,” “could,” “would,”
“should” and similar expressions identify forward-looking statements,
which generally are not historical in nature. However, the absence of
these words or similar expressions does not mean that a statement is not
forward-looking.
These forward-looking statements include statements about the
capitalization of 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. All statements that address
operating or financial performance, events or developments that we
expect or anticipate will occur in the future – including statements
relating to orders, revenues, operating margins and earnings per share
growth, and statements expressing general views about future operating
results – are forward-looking statements. Forward-looking statements
involve known and unknown risks, uncertainties and other important
factors that could cause actual results to differ materially from those
expressed or implied in, or reasonably inferred from, such
forward-looking statements.
Factors that could cause results to differ materially from those
anticipated include: economic, political and other risks associated with
our international operations, including military actions, economic
sanctions or trade embargoes that could affect customer markets, and
non-compliance with laws, including foreign corrupt practice laws,
export and import laws and competition laws; potential for unexpected
cancellations or delays of customer orders in our reported backlog; our
exposure to fluctuations in foreign currency exchange rates; competition
and pricing pressures in the markets we serve; the strength of housing
and related markets; ability to retain and attract key members of
management; our relationship with and the performance of our channel
partners; our ability to successfully identify, complete and integrate
acquisitions; our ability to borrow or to refinance our existing
indebtedness and availability of liquidity sufficient to meet our needs;
changes in the value of goodwill or intangible assets; risks relating to
product defects, product liability and recalls; governmental
investigations; security breaches or other disruptions of our
information technology systems; litigation and contingent liabilities;
and other factors set forth 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.
All forward-looking statements made herein are based on information
currently available to the Company. The Company undertakes no obligation
to publicly update or revise any forward-looking statements, whether as
a result of new information, future events or otherwise, except as
required by law.
|
XYLEM INC. AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENTS (Unaudited)
(In Millions, except per share data)
|
|
Year Ended December 31,
|
| 2015 |
|
2014
|
|
2013
|
Revenue
|
| $ | 3,653 | | |
$
|
3,916
| | |
$
|
3,837
| |
Cost of revenue
| | 2,249 |
| |
2,403
|
| |
2,338
|
|
Gross profit
| | 1,404 | | |
1,513
| | |
1,499
| |
Selling, general and administrative expenses
| | 854 | | |
920
| | |
990
| |
Research and development expenses
| | 95 | | |
104
| | |
104
| |
Restructuring and asset impairment charges
| | 6 |
| |
26
|
| |
42
|
|
Operating income
| | 449 | | |
463
| | |
363
| |
Interest expense
| | 55 | | |
54
| | |
55
| |
Other non-operating income (expense), net
| | — | | |
1
| | |
(10
|
)
|
Gain from sale of business
| | 9 |
| |
11
|
| |
—
|
|
Income before taxes
| | 403 | | |
421
| | |
298
| |
Income tax expense
| | 63 |
| |
84
|
| |
70
|
|
Net income
| | $ | 340 |
| |
$
|
337
|
| |
$
|
228
|
|
Earnings per share:
| | | | | | | | | |
Basic
| | $ | 1.88 | | |
$
|
1.84
| | |
$
|
1.23
| |
Diluted
| | $ | 1.87 | | |
$
|
1.83
| | |
$
|
1.22
| |
Weighted average number of shares:
| | | | | | | | | |
Basic
| | 180.9 | | |
183.1
| | |
185.2
| |
Diluted
| | 181.7 | | |
184.2
| | |
186.0
| |
Dividends declared per share
| | $ | 0.5632 | | |
$
|
0.5120
| | |
$
|
0.4656
| |
| | | | | | | | | | | |
|
|
XYLEM INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (Unaudited)
(In Millions, except per share amounts)
|
|
December 31,
|
| 2015 |
|
2014
|
ASSETS |
| | | |
Current assets:
| | | | |
Cash and cash equivalents
| | $ | 680 | | |
$
|
663
| |
Receivables, less allowances for discounts and doubtful accounts
of $33 and $34 in 2015 and 2014, respectively
| | 749 | | |
771
| |
Inventories
| | 433 | | |
486
| |
Prepaid and other current assets
| | 143 |
| |
144
|
|
Total current assets
| | 2,005 | | |
2,064
| |
Property, plant and equipment, net
| | 439 | | |
461
| |
Goodwill
| | 1,584 | | |
1,635
| |
Other intangible assets, net
| | 435 | | |
470
| |
Other non-current assets
| | 194 |
| |
203
|
|
Total assets | | $ | 4,657 |
| |
$
|
4,833
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | |
Current liabilities:
| | | | |
Accounts payable
| | $ | 338 | | |
$
|
338
| |
Accrued and other current liabilities
| | 407 | | |
476
| |
Short-term borrowings and current maturities of long-term debt
| | 78 |
| |
89
|
|
Total current liabilities
| | 823 | | |
903
| |
Long-term debt
| | 1,196 | | |
1,195
| |
Accrued postretirement benefits
| | 335 | | |
388
| |
Deferred income tax liabilities
| | 118 | | |
136
| |
Other non-current accrued liabilities
| | 101 |
| |
84
|
|
Total liabilities | | 2,573 |
| |
2,706
|
|
| | | |
|
Stockholders’ equity:
| | | | |
Common Stock — par value $0.01 per share:
| | | | |
Authorized 750.0 shares, issued 190.2 and 188.9 shares in 2015 and
2014, respectively
| | 2 | | |
2
| |
Capital in excess of par value
| | 1,834 | | |
1,796
| |
Retained earnings
| | 885 | | |
648
| |
Treasury stock – at cost 11.8 shares and 6.6 shares in 2015 and
2014, respectively
| | (399 | ) | |
(220
|
)
|
Accumulated other comprehensive loss
| | (238 | ) | |
(99
|
)
|
Total stockholders’ equity | | 2,084 |
| |
2,127
|
|
Total liabilities and stockholders’ equity | | $ | 4,657 |
| |
$
|
4,833
|
|
| | | | | | | |
|
|
XYLEM INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In Millions)
|
|
Year Ended December 31,
|
| 2015 |
|
2014
|
|
2013
|
Operating Activities |
| | | | | |
Net income
| | $ | 340 | | |
$
|
337
| | |
$
|
228
| |
Adjustments to reconcile net income to net cash provided by operating
activities:
| | | | | | |
Depreciation
| | 88 | | |
95
| | |
99
| |
Amortization
| | 45 | | |
47
| | |
51
| |
Deferred income taxes
| | (9 | ) | |
(29
|
)
| |
(14
|
)
|
Share-based compensation
| | 15 | | |
18
| | |
27
| |
Restructuring and asset impairment charges, net
| | 6 | | |
26
| | |
42
| |
Gain from sale of businesses
| | (9 | ) | |
(11
|
)
| |
—
| |
Other, net
| | 12 | | |
2
| | |
15
| |
Payments for restructuring
| | (14 | ) | |
(26
|
)
| |
(35
|
)
|
Contributions to postretirement benefit plans
| | (25 | ) | |
(35
|
)
| |
(43
|
)
|
Changes in assets and liabilities (net of acquisitions):
| | | | | | |
Changes in receivables
| | (24 | ) | |
(37
|
)
| |
(47
|
)
|
Changes in inventories
| | 23 | | |
(49
|
)
| |
(39
|
)
|
Changes in accounts payable
| | 20 | | |
17
| | |
4
| |
Changes in accrued liabilities
| | (11 | ) | |
3
| | |
18
| |
Changes in accrued taxes
| | (3 | ) | |
25
| | |
20
| |
Net changes in other assets and liabilities
|
| 10 |
| |
33
|
| |
(2
|
)
|
Net Cash — Operating activities |
| 464 |
| |
416
|
| |
324
|
|
Investing Activities | | | | | | |
Capital expenditures
| | (117 | ) | |
(119
|
)
| |
(126
|
)
|
Proceeds from the sale of property, plant and equipment
| | — | | |
2
| | |
6
| |
Acquisitions of businesses and assets, net of cash acquired
| | (18 | ) | |
—
| | |
(81
|
)
|
Proceeds from sale of business
| | 1 | | |
30
| | |
—
| |
Other, net
|
| 2 |
| |
1
|
| |
2
|
|
Net Cash — Investing activities |
| (132 | ) | |
(86
|
)
| |
(199
|
)
|
Financing Activities | | | | | | |
(Repayment) issuance of short-term debt
| | (3 | ) | |
52
| | |
39
| |
Principal payments of debt and capital lease obligations
| | — | | |
—
| | |
(2
|
)
|
Repurchase of common stock
| | (179 | ) | |
(134
|
)
| |
(73
|
)
|
Proceeds from exercise of employee stock options
| | 21 | | |
26
| | |
22
| |
Excess tax benefit from share based compensation
| | 2 | | |
2
| | |
1
| |
Dividends paid
| | (102 | ) | |
(94
|
)
| |
(87
|
)
|
Other, net
|
| (1 | ) | |
1
|
| |
—
|
|
Net Cash — Financing activities |
| (262 | ) | |
(147
|
)
| |
(100
|
)
|
Effect of exchange rate changes on cash |
| (53 | ) | |
(53
|
)
| |
4
|
|
Net change in cash and cash equivalents
| | 17 | | |
130
| | |
29
| |
Cash and cash equivalents at beginning of year
|
| 663 |
| |
533
|
| |
504
|
|
Cash and cash equivalents at end of year |
| $ | 680 |
| |
$
|
663
|
| |
$
|
533
|
|
Supplemental disclosure of cash flow information:
| | | | | | |
Cash paid during the year for:
| | | | | | |
Interest
| | $ | 52 | | |
$
|
51
| | |
$
|
51
| |
Income taxes (net of refunds received)
| | $ | 75 | | |
$
|
81
| | |
$
|
65
| |
| | | | | | | | | | | |
|
|
Xylem Inc. Non-GAAP Measures
|
|
Management views key performance indicators including revenue, gross
margins, segment operating income and margins, orders growth, free
cash flow, working capital, and backlog, among others. In addition,
we consider certain measures to be useful to management and
investors evaluating our operating performance for the periods
presented, and provide a tool for evaluating our ongoing operations,
liquidity and management of assets. This information can assist
investors in assessing our financial performance and measures our
ability to generate capital for deployment among competing strategic
alternatives and initiatives. These metrics, however, are not
measures of financial performance under GAAP and should not be
considered a substitute for revenue, operating income, net income,
earnings per share (basic and diluted) or net cash from operations
as determined in accordance with GAAP. We consider the following
non-GAAP measures, which may not be comparable to similarly titled
measures reported by other companies, to be key performance
indicators:
|
|
“Organic revenue" and "Organic orders” defined as
revenue and orders, respectively, excluding the impact of
fluctuations in foreign currency translation and contributions
from acquisitions and divestitures. Divestitures include sales of
portions of our business that did not meet the criteria for
classification as a discontinued operation or insignificant
portions of our business that we did not classify as a
discontinued operation. The period-over-period change resulting
from foreign currency fluctuations assumes no change in exchange
rates from the prior period.
|
|
“Constant currency” defined as financial results adjusted for
currency translation impacts by translating current period and prior
period activity using the same currency conversion rate. This
approach is used for countries whose functional currency is not the
U.S. dollar.
|
|
“EBITDA” defined as earnings before interest, taxes,
depreciation, amortization expense, and share-based compensation. “Adjusted
EBITDA” reflects the adjustment to EBITDA to exclude
restructuring and realignment costs, gain on sale of business and
special charges.
|
|
"Adjusted Operating Income", "Adjusted Segment Operating Income",
and “Adjusted EPS” defined as operating income, segment
operating income and earnings per share, adjusted to exclude
restructuring and realignment costs, gain on sale of businesses,
special charges and tax-related special items, as applicable.
|
|
“Free Cash Flow” defined as net cash from operating
activities, as reported in the Statement of Cash Flow, less capital
expenditures as well as adjustments for other significant items that
impact current results which management believes are not related to
our ongoing operations and performance. Our definition of free cash
flows does not consider non-discretionary cash payments, such as
debt.
|
|
“Realignment costs” defined as costs not included in
restructuring costs that are incurred as part of actions taken to
reposition our business, including items such as professional fees,
severance, relocation, travel, facility set-up and other costs.
|
|
“Special charges" defined as costs incurred by the Company,
such as legal and professional fees, associated with the Korea
matters, as well as costs incurred for the contractual
indemnification of tax obligations to ITT.
|
|
“Tax-related special items" defined as tax items, such as tax
return versus tax provision adjustments, tax exam impacts, tax law
change impacts and other discrete tax adjustments.
|
|
|
Xylem Inc. Non-GAAP Reconciliation
|
Reported vs. Organic & Constant Currency Orders
|
($ Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| | (As Reported - GAAP) | | (As Adjusted - Organic) | | Constant Currency |
| | |
|
(A)
|
|
(B)
|
| | |
(C)
|
|
(D)
|
|
(E) = B+C+D
|
|
(F) = E/A
| |
(G) = (E-C)/A
|
| | | | | | | | | | | | | | | | | |
|
| | | | | |
Change
| |
% Change
| |
| |
Change
| |
% Change
| | |
| |
Orders
| |
Orders
| |
2015 v. 2014
| |
2015 v. 2014
| |
Acquisitions/ Divestitures
| |
FX Contribution
| |
Adj. 2015 v. 2014
| |
Adj. 2015 v. 2014
| | |
| |
2015
| |
2014
| | | | | | | | | | | | | | |
Year Ended December
31 | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
|
Xylem Inc. | |
3,711
| |
4,021
| |
(310
|
)
| |
-8
|
%
| |
9
| | |
320
| |
19
| | |
0
|
%
| |
0
|
%
|
| | | | | | | | | | | | | | | | | |
|
Water Infrastructure
| |
2,296
| |
2,511
| |
(215
|
)
| |
-9
|
%
| |
(1
|
)
| |
240
| |
24
| | |
1
|
%
| |
1
|
%
|
Applied Water
| |
1,415
| |
1,510
| |
(95
|
)
| |
-6
|
%
| |
10
| | |
80
| |
(5
|
)
| |
0
|
%
| |
-1
|
%
|
| | | | | | | | | | | | | | | | | |
|
Quarter Ended December
31 | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
|
Xylem Inc. | |
913
| |
970
| |
(57
|
)
| |
-6
|
%
| |
(1
|
)
| |
63
| |
5
| | |
1
|
%
| |
1
|
%
|
| | | | | | | | | | | | | | | | | |
|
Water Infrastructure
| |
559
| |
596
| |
(37
|
)
| |
-6
|
%
| |
(1
|
)
| |
48
| |
10
| | |
2
|
%
| |
2
|
%
|
Applied Water
| |
354
| |
374
| |
(20
|
)
| |
-5
|
%
| |
-
| | |
15
| |
(5
|
)
| |
-1
|
%
| |
-1
|
%
|
| | | | | | | | | | | | | | | | | |
|
Quarter Ended September
30 | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
|
Xylem Inc. | |
939
| |
1,027
| |
(88
|
)
| |
-9
|
%
| |
-
| | |
88
| |
-
| | |
0
|
%
| |
0
|
%
|
| | | | | | | | | | | | | | | | | |
|
Water Infrastructure
| |
590
| |
664
| |
(74
|
)
| |
-11
|
%
| |
-
| | |
68
| |
(6
|
)
| |
-1
|
%
| |
-1
|
%
|
Applied Water
| |
349
| |
363
| |
(14
|
)
| |
-4
|
%
| |
-
| | |
20
| |
6
| | |
2
|
%
| |
2
|
%
|
| | | | | | | | | | | | | | | | | |
|
Quarter Ended June
30 | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
|
Xylem Inc. | |
944
| |
1,031
| |
(87
|
)
| |
-8
|
%
| |
5
| | |
92
| |
10
| | |
1
|
%
| |
0
|
%
|
| | | | | | | | | | | | | | | | | |
|
Water Infrastructure
| |
585
| |
654
| |
(69
|
)
| |
-11
|
%
| |
-
| | |
69
| |
-
| | |
0
|
%
| |
0
|
%
|
Applied Water
| |
359
| |
377
| |
(18
|
)
| |
-5
|
%
| |
5
| | |
24
| |
11
| | |
3
|
%
| |
2
|
%
|
| | | | | | | | | | | | | | | | | |
|
Quarter Ended March
31 | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
|
Xylem Inc. | |
915
| |
993
| |
(78
|
)
| |
-8
|
%
| |
5
| | |
77
| |
4
| | |
0
|
%
| |
0
|
%
|
| | | | | | | | | | | | | | | | | |
|
Water Infrastructure
| |
562
| |
597
| |
(35
|
)
| |
-6
|
%
| |
-
| | |
55
| |
20
| | |
3
|
%
| |
3
|
%
|
Applied Water
| |
353
| |
396
| |
(43
|
)
| |
-11
|
%
| |
5
| | |
21
| |
(17
|
)
| |
-4
|
%
| |
-6
|
%
|
|
Xylem Inc. Non-GAAP Reconciliation
|
Reported vs. Organic & Constant Currency Revenue
|
($ Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| | (As Reported - GAAP) | | (As Adjusted - Organic) | | Constant Currency |
| | |
|
(A)
|
|
(B)
|
| | |
(C)
|
|
(D)
|
|
(E) = B+C+D
|
|
(F) = E/A
| |
(G) = (E-C)/A
|
| | | | | | | | | | | | | | | | | |
|
| | | | | |
Change
| |
% Change
| |
| | | |
Change
| |
% Change
| | |
| |
Revenue
| |
Revenue
| |
2015 v. 2014
| |
2015 v. 2014
| |
Acquisitions/ Divestitures
| |
FX Contribution
| |
Adj. 2015 v. 2014
| |
Adj. 2015 v. 2014
| | |
| |
2015
| |
2014
| | | | | | | | | | | | | | |
Year Ended December
31 | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
|
Xylem Inc. | |
3,653
| |
3,916
| |
(263
|
)
| |
-7
|
%
| |
10
| | |
313
| |
60
| |
2
|
%
| |
1
|
%
|
| | | | | | | | | | | | | | | | | |
|
Water Infrastructure
| |
2,231
| |
2,442
| |
(211
|
)
| |
-9
|
%
| |
(1
|
)
| |
234
| |
22
| |
1
|
%
| |
1
|
%
|
Applied Water
| |
1,422
| |
1,474
| |
(52
|
)
| |
-4
|
%
| |
11
| | |
79
| |
38
| |
3
|
%
| |
2
|
%
|
| | | | | | | | | | | | | | | | | |
|
Quarter Ended December
31 | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
|
Xylem Inc. | |
994
| |
1,042
| |
(48
|
)
| |
-5
|
%
| |
(1
|
)
| |
70
| |
21
| |
2
|
%
| |
2
|
%
|
| | | | | | | | | | | | | | | | | |
|
Water Infrastructure
| |
629
| |
672
| |
(43
|
)
| |
-6
|
%
| |
(1
|
)
| |
54
| |
10
| |
1
|
%
| |
2
|
%
|
Applied Water
| |
365
| |
370
| |
(5
|
)
| |
-1
|
%
| |
-
| | |
16
| |
11
| |
3
|
%
| |
3
|
%
|
| | | | | | | | | | | | | | | | | |
|
Quarter Ended September
30 | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
|
Xylem Inc. | |
902
| |
963
| |
(61
|
)
| |
-6
|
%
| |
-
| | |
81
| |
20
| |
2
|
%
| |
2
|
%
|
| | | | | | | | | | | | | | | | | |
|
Water Infrastructure
| |
551
| |
602
| |
(51
|
)
| |
-8
|
%
| |
-
| | |
61
| |
10
| |
2
|
%
| |
2
|
%
|
Applied Water
| |
351
| |
361
| |
(10
|
)
| |
-3
|
%
| |
-
| | |
20
| |
10
| |
3
|
%
| |
3
|
%
|
| | | | | | | | | | | | | | | | | |
|
Quarter Ended June
30 | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
|
Xylem Inc. | |
920
| |
1,005
| |
(85
|
)
| |
-8
|
%
| |
6
| | |
89
| |
10
| |
1
|
%
| |
0
|
%
|
| | | | | | | | | | | | | | | | | |
|
Water Infrastructure
| |
551
| |
616
| |
(65
|
)
| |
-11
|
%
| |
-
| | |
65
| |
-
| |
0
|
%
| |
0
|
%
|
Applied Water
| |
369
| |
389
| |
(20
|
)
| |
-5
|
%
| |
6
| | |
24
| |
10
| |
3
|
%
| |
1
|
%
|
| | | | | | | | | | | | | | | | | |
|
Quarter Ended March
31 | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
|
Xylem Inc. | |
837
| |
906
| |
(69
|
)
| |
-8
|
%
| |
5
| | |
73
| |
9
| |
1
|
%
| |
0
|
%
|
| | | | | | | | | | | | | | | | | |
|
Water Infrastructure
| |
500
| |
552
| |
(52
|
)
| |
-9
|
%
| |
-
| | |
54
| |
2
| |
0
|
%
| |
0
|
%
|
Applied Water
| |
337
| |
354
| |
(17
|
)
| |
-5
|
%
| |
5
| | |
19
| |
7
| |
2
|
%
| |
1
|
%
|
| | | | | | | | | | | | | | | | | | | | | | |
|
|
Xylem Inc. Non-GAAP Reconciliation
|
Adjusted Operating Income
|
($ Millions)
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| | | Q1 | | Q2 | | Q3 | | Q4 | | YTD |
| | | 2015 |
| 2014 | | 2015 |
| 2014 | | 2015 |
| 2014 | | 2015 |
| 2014 | | 2015 |
| 2014 |
|
Total Revenue
| | | | | | | | | | | | | | | | | | | | |
|
• Total Xylem
| |
837
| | |
906
| | |
920
| | |
1,005
| | |
902
| | |
963
| | |
994
| | |
1,042
| | |
3,653
| | |
3,916
| |
|
• Water Infrastructure
| |
500
| | |
552
| | |
551
| | |
616
| |
|
551
| | |
602
| |
|
629
| | |
672
| | |
2,231
| | |
2,442
| |
|
• Applied Water
| |
337
| | |
354
| | |
369
| | |
389
| |
|
351
| | |
361
| |
|
365
| | |
370
| | |
1,422
| | |
1,474
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income
| | | | | | | | | | | | | | | | | | | | |
|
• Total Xylem
| |
83
| | |
76
| | |
104
| | |
116
| | |
120
| | |
130
| | |
142
| | |
141
| | |
449
| | |
463
| |
|
• Water Infrastructure
| |
47
| | |
46
| | |
65
| | |
76
| |
|
83
| | |
95
| |
|
108
| | |
104
| | |
303
| | |
321
| |
|
• Applied Water
| |
46
| | |
41
| | |
51
| | |
53
| |
|
46
| | |
51
| |
|
47
| | |
48
| | |
190
| | |
193
| |
|
• Total Segments
| |
93
| | |
87
| | |
116
| | |
129
| | |
129
| | |
146
| | |
155
| | |
152
| | |
493
| | |
514
| |
| | | | | | | | | | | | | | | | | | | | |
|
|
Operating Margin
| | | | | | | | | | | | | | | | | | | | |
|
• Total Xylem
| |
9.9
|
%
| |
8.4
|
%
| |
11.3
|
%
| |
11.5
|
%
| |
13.3
|
%
| |
13.5
|
%
| |
14.3
|
%
| |
13.5
|
%
| |
12.3
|
%
| |
11.8
|
%
|
|
• Water Infrastructure
| |
9.4
|
%
| |
8.3
|
%
| |
11.8
|
%
| |
12.3
|
%
| |
15.1
|
%
| |
15.8
|
%
| |
17.2
|
%
| |
15.5
|
%
| |
13.6
|
%
| |
13.1
|
%
|
|
• Applied Water
| |
13.6
|
%
| |
11.6
|
%
| |
13.8
|
%
| |
13.6
|
%
| |
13.1
|
%
| |
14.1
|
%
| |
12.9
|
%
| |
13.0
|
%
| |
13.4
|
%
| |
13.1
|
%
|
|
• Total Segments
|
|
11.1
|
%
|
|
9.6
|
%
|
|
12.6
|
%
|
|
12.8
|
%
|
|
14.3
|
%
|
|
15.2
|
%
|
|
15.6
|
%
|
|
14.6
|
%
|
|
13.5
|
%
|
|
13.1
|
%
|
| | | | | | | | | | | | | | | | | | | | |
|
|
Special Charges
| | | | | | | | | | | | | | | | | | | | |
|
• Total Xylem
| |
1
| | |
-
| | |
-
| | |
-
| | |
-
| | |
-
| | |
-
| | |
-
| | |
1
| | |
-
| |
|
• Water Infrastructure
| |
1
| | |
-
| | |
-
| | |
-
| | |
-
| | |
-
| | |
-
| | |
-
| | |
1
| | |
-
| |
|
• Applied Water
| |
-
| | |
-
| | |
-
| | |
-
| | |
-
| | |
-
| | |
-
| | |
-
| | |
-
| | |
-
| |
|
• Total Segments
| |
1
| | |
-
| | |
-
| | |
-
| | |
-
| | |
-
| | |
-
| | |
-
| | |
1
| | |
-
| |
| | | | | | | | | | | | | | | | | | | | |
|
|
Restructuring & Realignment Costs
| | | | | | | | | | | | | | | | | | | | |
|
• Total Xylem
| |
6
| | |
18
| | |
6
| | |
9
| | |
4
| | |
4
| | |
4
| | |
12
| | |
20
| | |
43
| |
|
• Water Infrastructure
| |
5
| | |
12
| | |
4
| | |
5
| | |
2
| | |
3
| | |
2
| | |
9
| | |
13
| | |
29
| |
|
• Applied Water
| |
1
| | |
6
| | |
2
| | |
4
| | |
2
| | |
1
| | |
2
| | |
2
| | |
7
| | |
13
| |
|
• Total Segments
| |
6
| | |
18
| | |
6
| | |
9
| | |
4
| | |
4
| | |
4
| | |
11
| | |
20
| | |
42
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Operating Income*
| | | | | | | | | | | | | | | | | | | | |
|
• Total Xylem
| |
90
| | |
94
| | |
110
| | |
125
| | |
124
| | |
134
| | |
146
| | |
153
| | |
470
| | |
506
| |
|
• Water Infrastructure
| |
53
| | |
58
| | |
69
| | |
81
| |
|
85
| | |
98
| |
|
110
| | |
113
| | |
317
| | |
350
| |
|
• Applied Water
| |
47
| | |
47
| | |
53
| | |
57
| |
|
48
| | |
52
| |
|
49
| | |
50
| | |
197
| | |
206
| |
|
• Total Segments
| |
100
| | |
105
| | |
122
| | |
138
| | |
133
| | |
150
| | |
159
| | |
163
| | |
514
| | |
556
| |
| | | | | | | | | | | | | | | | | | | | |
|
|
Adjusted Operating Margin*
| | | | | | | | | | | | | | | | | | | | |
|
• Total Xylem
| |
10.8
|
%
| |
10.4
|
%
| |
12.0
|
%
| |
12.4
|
%
| |
13.7
|
%
| |
13.9
|
%
| |
14.7
|
%
| |
14.7
|
%
| |
12.9
|
%
| |
12.9
|
%
|
|
• Water Infrastructure
| |
10.6
|
%
| |
10.5
|
%
| |
12.5
|
%
| |
13.1
|
%
| |
15.4
|
%
| |
16.3
|
%
| |
17.5
|
%
| |
16.8
|
%
| |
14.2
|
%
| |
14.3
|
%
|
|
• Applied Water
| |
13.9
|
%
| |
13.3
|
%
| |
14.4
|
%
| |
14.7
|
%
| |
13.7
|
%
| |
14.4
|
%
| |
13.4
|
%
| |
13.5
|
%
| |
13.9
|
%
| |
14.0
|
%
|
|
• Total Segments
|
|
11.9
|
%
|
|
11.6
|
%
|
|
13.3
|
%
|
|
13.7
|
%
|
|
14.7
|
%
|
|
15.6
|
%
|
|
16.0
|
%
|
|
15.6
|
%
|
|
14.1
|
%
|
|
14.2
|
%
|
|
|
|
*Adjusted Operating Income excludes restructuring & realignment
costs and special charges.
|
|
Xylem Inc. Non-GAAP Reconciliation
|
Adjusted Diluted EPS
|
($ Millions, except per share amounts)
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| | | | Q4 2014 | | Q4 2015 |
| | | | As Reported |
| Adjustments | | Adjusted | | | As Reported |
| Adjustments | | Adjusted |
| |
Total Revenue
| | |
1,042
| | | | | |
1,042
| | | | |
994
| | | | | |
994
| |
| |
Operating Income
| | |
141
| | | |
12
| |
a
| |
153
| | | | |
142
| | | |
4
| |
a
| |
146
| |
| |
Operating Margin
| | | 13.5 | % | | | | | 14.7 | % | | | | 14.3 | % | | | | | 14.7 | % |
| |
Interest Expense
| | |
(13
|
)
| | | | |
(13
|
)
| | | |
(14
|
)
| | | | |
(14
|
)
|
| |
Other Non-Operating Income (Expense)
| | |
-
| | | | | |
-
| | | | |
-
| | | | | |
-
| |
| |
Gain from sale of business
| |
|
-
|
| |
| |
|
-
|
| | |
|
-
|
| |
| |
|
-
|
|
| |
Income before Taxes
| | |
128
| | | |
12
| | | |
140
| | | | |
128
| | | |
4
| | | |
132
| |
| |
Provision for Income Taxes
| |
|
(32
|
)
| |
|
6
|
|
c
|
|
(26
|
)
| | |
|
(14
|
)
| |
|
(10
|
)
|
c
|
|
(24
|
)
|
| |
Net Income
| |
|
96
|
| |
|
18
|
| |
|
114
|
| | |
|
114
|
| |
|
(6
|
)
| |
|
108
|
|
| |
Diluted Shares
|
|
|
183.3
|
|
|
|
|
|
183.4
|
|
|
|
|
180.0
|
|
|
|
|
|
180.0
|
|
| | Diluted EPS |
| $ | 0.52 |
|
| $ | 0.10 |
|
| $ | 0.62 |
|
|
| $ | 0.63 |
|
| $ | (0.03 | ) |
| $ | 0.60 |
|
| | | | | | | | | | | | | | |
|
| |
Year-over-year currency translation impact on current year
diluted EPS
|
|
|
|
$
|
(0.05
|
)
|
|
$
|
0.01
|
|
|
$
|
(0.04
|
)
|
| | Diluted EPS at Constant Currency |
|
|
|
|
|
|
|
| $ | 0.68 |
|
| $ | (1.32 | ) |
| $ | 0.64 |
|
| | | | | | | | | | | | | | |
|
| | | |
|
|
|
|
|
| |
|
|
|
|
|
| | | | Q4 YTD 2014 | | Q4 YTD 2015 |
| | | | As Reported | | Adjustments | | Adjusted | | | As Reported | | Adjustments | | Adjusted |
| |
Total Revenue
| | |
3,916
| | | | | |
3,916
| | | | |
3,653
| | | | | |
3,653
| |
| |
Operating Income
| | |
463
| | | |
43
| |
a
| |
506
| | | | |
449
| | | |
21
| |
a
| |
470
| |
| |
Operating Margin
| | | 11.8 | % | | | | | 12.9 | % | | | | 12.3 | % | | | | | 12.9 | % |
| |
Interest Expense
| | |
(54
|
)
| | | | |
(54
|
)
| | | |
(55
|
)
| | | | |
(55
|
)
|
| |
Other Non-Operating Income (Expense)
| | |
1
| | | | | |
1
| | | | |
-
| | | |
4
| |
b
| |
4
| |
| |
Gain from sale of businesses
| |
|
11
|
| |
|
(11
|
)
| |
|
-
|
| | |
|
9
|
| |
|
(9
|
)
| |
|
0
|
|
| |
Income before Taxes
| | |
421
| | | |
32
| | | |
453
| | | | |
403
| | | |
16
| | | |
419
| |
| |
Provision for Income Taxes
| |
|
(84
|
)
| |
|
(7
|
)
|
c
|
|
(91
|
)
| | |
|
(63
|
)
| |
|
(20
|
)
|
c
|
|
(83
|
)
|
| |
Net Income
| |
|
337
|
| |
|
25
|
| |
|
362
|
| | |
|
340
|
| |
|
(4
|
)
| |
|
336
|
|
| |
Diluted Shares
|
|
|
184.2
|
|
|
|
|
|
184.2
|
|
|
|
|
181.7
|
|
|
|
|
|
181.7
|
|
| | Diluted EPS |
| $ | 1.83 |
|
| $ | 0.14 |
|
| $ | 1.97 |
|
|
| $ | 1.87 |
|
| $ | (0.02 | ) |
| $ | 1.85 |
|
| | | | | | | | | | | | | | |
|
| |
Year-over-year currency translation impact on current year
diluted EPS
|
|
|
|
$
|
(0.22
|
)
|
|
$
|
-
|
|
|
$
|
(0.22
|
)
|
| | Diluted EPS at Constant Currency |
|
|
|
|
|
|
|
| $ | 2.09 |
|
| $ | (0.02 | ) |
| $ | 2.07 |
|
| | | | | | | | | | | | | | |
|
a
| |
Restructuring & realignment costs in 2014 and 2015 and special
charges in 2015
|
b
| |
Special charges
|
c
| |
Net tax impact of restructuring & realignment costs and special
charges, and tax-related special items
|
| |
|
|
Xylem Inc. Non-GAAP Reconciliation
|
Net Cash - Operating Activities vs. Free Cash Flow
|
($ Millions)
|
|
|
|
Q1
|
|
Q2
|
|
Q3
|
|
Q4
|
|
Year Ended
|
| |
|
2015
|
|
|
|
2014
|
| |
|
2015
|
|
|
|
2014
|
| |
|
2015
|
|
|
|
2014
|
| |
|
2015
|
|
|
|
2014
|
| |
|
2015
|
|
|
|
2014
|
|
| | | | | | | | | | | | | | | | | | | |
|
Net Cash - Operating Activities | |
$
|
39
| | |
$
|
22
| | |
$
|
84
| | |
$
|
76
| | |
$
|
137
| | |
$
|
155
| | |
$
|
204
| | |
$
|
163
| | |
$
|
464
| | |
$
|
416
| |
| | | | | | | | | | | | | | | | | | | |
|
Capital Expenditures
| | |
(37
|
)
| | |
(25
|
)
| | |
(20
|
)
| | |
(23
|
)
| | |
(21
|
)
| | |
(29
|
)
| | |
(39
|
)
| | |
(42
|
)
| | |
(117
|
)
| | |
(119
|
)
|
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
|
Free Cash Flow | |
$
|
2
|
| |
$
|
(3
|
)
| |
$
|
64
|
| |
$
|
53
|
| |
$
|
116
|
| |
$
|
126
|
| |
$
|
165
|
| |
$
|
121
|
| |
$
|
347
|
| |
$
|
297
|
|
| | | | | | | | | | | | | | | | | | | |
|
Net Income
| | |
64
| | | |
49
| | | |
74
| | | |
86
| | | |
88
| | | |
106
| | | |
114
| | | |
96
| | | |
340
| | | |
337
| |
| | | | | | | | | | | | | | | | | | | |
|
Gain from sale of businesses
| |
|
9
|
| |
|
-
|
| |
|
-
|
| |
|
-
|
| |
|
-
|
| |
|
11
|
| |
|
-
|
| |
|
-
|
| |
|
9
|
| |
|
11
|
|
| | | | | | | | | | | | | | | | | | | |
|
Net Income, excluding gain on sale of businesses | |
$
|
55
|
| |
$
|
49
|
| |
$
|
74
|
| |
$
|
86
|
| |
$
|
88
|
| |
$
|
95
|
| |
$
|
114
|
| |
$
|
96
|
| |
$
|
331
|
| |
$
|
326
|
|
| | | | | | | | | | | | | | | | | | | |
|
Free Cash Flow Conversion | |
|
4
|
%
| |
|
-6
|
%
| |
|
86
|
%
| |
|
62
|
%
| |
|
132
|
%
| |
|
133
|
%
| |
|
145
|
%
| |
|
126
|
%
| |
|
105
|
%
| |
|
91
|
%
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20160204005693/en/
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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