- Second quarter 2015 adjusted earnings per share (EPS) of $0.43 were
down 10 percent from the second quarter 2014, but up two percent
excluding foreign exchange headwinds; GAAP EPS were $0.41, down 13
percent year-over-year
- Second quarter 2015 revenue was $920 million, an increase of one
percent on an organic basis
- Free cash flow increased 21 percent to $64 million compared with
the second quarter 2014
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 second quarter 2015 net income of $74 million, or $0.41 per
share. Excluding restructuring and realignment charges and other special
items, adjusted net income was $78 million or $0.43 per share, down 10
percent from the comparable period in 2014, but up two percent excluding
the impact of foreign exchange translation. Second quarter revenue was
$920 million, an increase of one percent organically, reflecting
strength in the commercial and public utility end-markets. Second
quarter operating margin was 11.3 percent, down 20 basis points from the
prior year. Adjusted operating margin was 12.0 percent, flat
year-over-year excluding the 40-basis-point impact of foreign exchange
translation. This result reflects volume leverage and lower expenses
offset by inflation, the divestiture of a business and unfavorable mix.
“Xylem again delivered solid results that met our earnings expectations,
despite challenging market conditions,” said Patrick Decker, Xylem
President and Chief Executive Officer. “I’m pleased with our team’s
performance in this environment, particularly their strong execution.
This is an area on which we will continue to focus, as well as driving
our initiatives to accelerate growth and maintaining strong cost
discipline.”
Decker continued, “While we continue to manage near-term headwinds,
particularly in the industrial sector, there are signs of improving
conditions in other key end-markets. In the second quarter, we delivered
impressive growth in backlog that is shippable in 2016 and beyond – an
encouraging indicator of growing demand. These factors contribute to an
increasingly optimistic long-term outlook for our business.”
Full-year 2015 Outlook
Xylem is narrowing the range of its full-year outlook, which continues
to reflect ongoing foreign exchange fluctuations. Xylem continues to
expect full-year 2015 revenue of approximately $3.7 billion, a decrease
of six to seven percent from the full-year 2014 results. On an organic
basis, Xylem now expects to generate revenue growth of approximately one
to two percent.
Full-year 2015 adjusted operating income is now expected to be in the
range of $470 million to $483 million, resulting in adjusted earnings
per share of $1.82 to $1.87. Excluding the projected unfavorable impact
of foreign exchange translation, Xylem’s adjusted earnings per share
growth expectations are in the range of six to seven percent over the
comparable full-year 2014 results. The Company’s outlook for projected
restructuring and realignment costs of $20 million for the year is
unchanged.
Second 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.
-
Second quarter 2015 Water Infrastructure revenue was $551 million,
flat relative to the prior year period on an organic basis. Growth in
the public utility and industrial sectors in Europe and Australia was
offset primarily by declines in dewatering, particularly in the oil
and gas market.
-
Second quarter adjusted segment operating income was $69 million, down
$12 million from the prior year result, reflecting the unfavorable
impact of foreign exchange translation. Operating income for the
quarter was $65 million, down $11 million from last year. Adjusted
operating margin for the quarter decreased 30 basis points to 12.8
percent, excluding the 30-basis-point impact of foreign exchange
translation. Strengthening execution and solid cost reductions were
more than offset by inflation and unfavorable mix, as well as
increased investment in growth initiatives.
Applied Water
Xylem’s Applied Water segment consists of its portfolio of businesses in
residential and commercial building services, and industrial and
agricultural applications.
-
Second quarter 2015 revenue was $369 million, an increase of three
percent organically compared with the second quarter 2014. This
increase was driven by strong organic growth in the commercial and
industrial sectors, which resulted in double-digit growth in emerging
markets. Growth in the U.S. commercial end-market was offset by
declines in industrial water applications in the region.
-
Adjusted segment operating income was $53 million in the second
quarter, down $4 million from the comparable period last year.
Operating income was $51 million, which was $2 million lower than last
year. The impact of productivity actions, cost reductions and volume
growth helped to drive a 10-basis-point increase in the adjusted
operating margin for the segment to 14.8 percent, excluding the
40-basis-point impact of foreign exchange translation.
Supplemental information on Xylem’s second quarter earnings and
reconciliations for non-GAAP items are posted at http://investors.xyleminc.com.
About Xylem
Xylem (XYL) is a leading global water technology provider, enabling
customers to transport, treat, test and efficiently use water in public
utility, residential and commercial building services, industrial and
agricultural settings. The Company does business in more than 150
countries through a number of market-leading product brands, and its
people bring broad applications expertise with a strong focus on finding
local solutions to the world’s most challenging water and wastewater
problems. Xylem is headquartered in Rye Brook, New York, with 2014
revenues of $3.9 billion and approximately 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 press release contains information that may constitute
“forward-looking statements" within the meaning of the Private
Securities Litigation Act of 1995. Forward-looking statements by their
nature address matters that are, to different degrees, uncertain.
Generally, the words “anticipate,” “estimate,” “expect,” “project,”
“intend,” “plan,” “forecast,” “believe,” “target,” “will,” “could,”
“would,” “should” and similar expressions identify forward-looking
statements, which generally are not historical in nature. However, the
absence of these words or similar expressions does not mean that a
statement is not forward-looking. These forward-looking statements
include statements about the capitalization of the Company, the
Company’s restructuring and realignment, future strategic plans and
other statements that describe the Company’s business strategy, outlook,
objectives, plans, intentions or goals. All statements that address
operating or financial performance, events or developments that we
expect or anticipate will occur in the future - including statements
relating to orders, revenue, operating margins and earnings per share
growth, and statements expressing general views about future operating
results - are forward-looking statements. Forward-looking statements
involve known and unknown risks, uncertainties and other important
factors that could cause actual results to differ materially from those
expressed or implied in, or reasonably inferred from, such
forward-looking statements.
Factors that could cause results to differ materially from those
anticipated include: economic, political and other risks associated with
our international operations, including military actions, economic
sanctions or trade embargoes that could affect customer markets, and
non-compliance with laws, including foreign corrupt practice laws,
export and import laws and competition laws; potential for unexpected
cancellations or delays of customer orders in our reported backlog; our
exposure to fluctuations in foreign currency exchange rates; competition
and pricing pressures in the markets we serve; the strength of housing
and related markets; weather conditions; ability to retain and attract
key members of management; our relationship with and the performance of
our channel partners; our ability to borrow or to refinance our existing
indebtedness and availability of liquidity sufficient to meet our needs;
changes in the value of goodwill or intangible assets; risks relating to
product defects, product liability and recalls; governmental
investigations; security breaches or other disruptions of our
information technology systems; litigation and contingent liabilities;
and other factors set forth under “Item 1A. Risk Factors” in our Annual
Report on Form 10-K for the year ended December 31, 2014 and with
subsequent filings we make with the Securities and Exchange Commission.
All forward-looking statements made herein are based on information
available to the Company as of the date of this press release. The
Company undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise, except as required by law.
|
XYLEM INC. AND SUBSIDIARIES |
CONDENSED CONSOLIDATED INCOME STATEMENTS (Unaudited)
|
(in millions, except per share data)
|
|
| |
|
| |
| | Three Months | | | Six Months |
For the period ended June 30, |
| 2015 |
|
|
2014
| | | 2015 |
|
|
2014
|
Revenue
| | $ | 920 | | | |
$
|
1,005
| | | | $ | 1,757 | | | |
$
|
1,911
|
Cost of revenue
| | 572 |
| | |
617
|
| | | 1,094 |
| | |
1,181
|
Gross profit
| | 348 | | | |
388
| | | | 663 | | | |
730
|
Selling, general and administrative expenses
| | 218 | | | |
242
| | | | 424 | | | |
466
|
Research and development expenses
| | 25 | | | |
27
| | | | 48 | | | |
54
|
Restructuring charges
| | 1 |
| | |
3
|
| | | 4 |
| | |
18
|
Operating income
| | 104 | | | |
116
| | | | 187 | | | |
192
|
Interest expense
| | 14 | | | |
13
| | | | 28 | | | |
27
|
Other non-operating income, net
| | 1 | | | |
1
| | | | — | | | |
—
|
Gain from sale of businesses
| | — |
| | |
—
|
| | | 9 |
| | |
—
|
Income before taxes
| | 91 | | | |
104
| | | | 168 | | | |
165
|
Income tax expense
| | 17 |
| | |
18
|
| | | 30 |
| | |
30
|
Net income
| | $ | 74 |
| | |
$
|
86
|
| | | $ | 138 |
| | |
$
|
135
|
Earnings per share:
| | | | | | | | | | | |
Basic
| | $ | 0.41 | | | |
$
|
0.47
| | | | $ | 0.76 | | | |
$
|
0.74
|
Diluted
| | $ | 0.41 | | | |
$
|
0.47
| | | | $ | 0.76 | | | |
$
|
0.73
|
Weighted average number of shares:
| | | | | | | | | | | |
Basic
| | 181.5 | | | |
183.4
| | | | 181.8 | | | |
184.0
|
Diluted
| | 182.3 | | | |
184.5
| | | | 182.7 | | | |
185.1
|
Dividends declared per share
| | $ | 0.1408 | | | |
$
|
0.1280
| | | | $ | 0.2816 | | | |
$
|
0.2560
|
| | | | | | | | | | | | | | | | | |
|
|
XYLEM INC. AND SUBSIDIARIES |
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
|
(in millions, except per share amounts)
|
|
| |
|
| |
|
| June 30, 2015 | | |
December 31, 2014
|
| | | | |
|
ASSETS | | | | | |
Current assets:
| | | | | |
Cash and cash equivalents
| | $ | 600 | | | |
$
|
663
| |
Receivables, less allowances for discounts and doubtful accounts of
$31 and $34 in 2015 and 2014, respectively
| | 772 | | | |
771
| |
Inventories
| | 498 | | | |
486
| |
Prepaid and other current assets
| | 149 | | | |
144
| |
Deferred income tax assets
| | 37 |
| | |
38
|
|
Total current assets
| | 2,056 | | | |
2,102
| |
Property, plant and equipment, net
| | 431 | | | |
461
| |
Goodwill
| | 1,592 | | | |
1,635
| |
Other intangible assets, net
| | 442 | | | |
470
| |
Other non-current assets
| | 198 |
| | |
192
|
|
Total assets | | $ | 4,719 |
| | |
$
|
4,860
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | |
Current liabilities:
| | | | | |
Accounts payable
| | $ | 315 | | | |
$
|
338
| |
Accrued and other current liabilities
| | 441 | | | |
481
| |
Short-term borrowings and current maturities of long-term debt
| | 81 |
| | |
89
|
|
Total current liabilities
| | 837 | | | |
908
| |
Long-term debt
| | 1,196 | | | |
1,195
| |
Accrued postretirement benefits
| | 377 | | | |
388
| |
Deferred income tax liabilities
| | 152 | | | |
158
| |
Other non-current accrued liabilities
| | 77 |
| | |
84
|
|
Total liabilities | | 2,639 |
| | |
2,733
|
|
Commitments and contingencies (Note 17)
| | | | | |
Stockholders’ equity:
| | | | | |
Common Stock – par value $0.01 per share:
| | | | | |
Authorized 750.0 shares, issued 189.6 shares and 188.9 shares in
2015 and 2014, respectively
| | 2 | | | |
2
| |
Capital in excess of par value
| | 1,815 | | | |
1,796
| |
Retained earnings
| | 734 | | | |
648
| |
Treasury stock – at cost 8.1 shares and 6.6 shares in 2015 and 2014,
respectively
| | (273 | ) | | |
(220
|
)
|
Accumulated other comprehensive loss
| | (198 | ) | | |
(99
|
)
|
Total stockholders’ equity | | 2,080 |
| | |
2,127
|
|
Total liabilities and stockholders’ equity | | $ | 4,719 |
| | |
$
|
4,860
|
|
| | | | | | | | |
|
|
XYLEM INC. AND SUBSIDIARIES |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
|
(in millions)
|
|
|
| |
|
| |
For the six months ended June 30, |
|
| 2015 | | |
2014
|
Operating Activities | | | | | | |
Net income
| | | $ | 138 | | | |
$
|
135
| |
Adjustments to reconcile net income to net cash provided by
operating activities:
| | | | | | |
Depreciation
| | | 47 | | | |
47
| |
Amortization
| | | 22 | | | |
25
| |
Share-based compensation
| | | 8 | | | |
9
| |
Restructuring charges
| | | 4 | | | |
18
| |
Gain from sale of businesses
| | | (9 | ) | | |
—
| |
Other, net
| | | 3 | | | |
(1
|
)
|
Payments for restructuring
| | | (9 | ) | | |
(17
|
)
|
Changes in assets and liabilities (net of acquisitions):
| | | | | | |
Changes in receivables
| | | (28 | ) | | |
(32
|
)
|
Changes in inventories
| | | (27 | ) | | |
(53
|
)
|
Changes in accounts payable
| | | 3 | | | |
2
| |
Other, net
| | | (29 | ) | | |
(35
|
)
|
Net Cash – Operating activities | | | 123 |
| | |
98
|
|
Investing Activities | | | | | | |
Capital expenditures
| | | (57 | ) | | |
(48
|
)
|
Proceeds from sale of businesses
| | | 1 | | | |
—
| |
Proceeds from the sale of property, plant and equipment
| | | — | | | |
1
| |
Other, net
| | | 3 |
| | |
—
|
|
Net Cash – Investing activities | | | (53 | ) | | |
(47
|
)
|
Financing Activities | | | | | | |
(Repayment) issuance of short-term debt
| | | (2 | ) | | |
1
| |
Repurchase of common stock
| | | (53 | ) | | |
(102
|
)
|
Proceeds from exercise of employee stock options
| | | 9 | | | |
17
| |
Dividends paid
| | | (51 | ) | | |
(47
|
)
|
Other, net
| | | 1 |
| | |
1
|
|
Net Cash – Financing activities | | | (96 | ) | | |
(130
|
)
|
Effect of exchange rate changes on cash | | | (37 | ) | | |
(4
|
)
|
Net change in cash and cash equivalents
| | | (63 | ) | | |
(83
|
)
|
Cash and cash equivalents at beginning of year
| | | 663 |
| | |
533
|
|
Cash and cash equivalents at end of period | | | $ | 600 |
| | |
$
|
450
|
|
Supplemental disclosure of cash flow information: | | | | | | |
Cash paid during the period for:
| | | | | | |
Interest
| | | $ | 26 | | | |
$
|
26
| |
Income taxes (net of refunds received)
| | | $ | 42 | | | |
$
|
50
| |
| | | | | | | | | |
|
|
|
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.
|
|
|
|
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) = B+C+D
|
|
(F) = E/A
| |
(G) = (E - C) / A
|
| | | | |
| |
| |
| | | |
| |
| | |
|
Orders
| |
Orders
| |
Change 2015 v. 2014
| |
% Change 2015 v. 2014
| |
Acquisitions / Divestitures
| |
FX Contribution
| |
Change Adj. 2015 v. 2014
| |
% Change Adj. 2015 v. 2014
| | |
|
2015
| |
2014
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
|
Six Months Ended June 30 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
|
Xylem Inc. |
1,859
| |
2,024
| |
(165)
| |
-8%
| |
10
| |
169
| |
14
| |
1%
| |
0%
|
| | | | | | | | | | | | | | | | |
|
Water Infrastructure
|
1,147
| |
1,251
| |
(104)
| |
-8%
| |
-
| |
124
| |
20
| |
2%
| |
2%
|
Applied Water
|
712
| |
773
| |
(61)
| |
-8%
| |
10
| |
45
| |
(6)
| |
-1%
| |
-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%
| |
-
| |
56
| |
21
| |
4%
| |
4%
|
Applied Water
|
353
| |
396
| |
(43)
| |
-11%
| |
5
| |
21
| |
(17)
| |
-4%
| |
-6%
|
| | | | | | | | | | | | | | | | |
|
|
Xylem Inc. Non-GAAP Reconciliation |
Reported vs. Organic & Constant Currency Revenue
|
($ Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (As Reported - GAAP) | | (As Adjusted - Organic) | | Constant Currency |
| |
|
(A)
|
|
(B)
|
| | |
(C)
|
|
(D)
|
|
(E) = B+C+D
|
|
(F) = E/A
| |
(G) = (E - C) / A
|
| | | | | | | | | | | | | | | | |
|
|
Revenue
| |
Revenue
| |
Change 2015 v. 2014
| |
% Change 2015 v. 2014
| |
Acquisitions / Divestitures
| |
FX Contribution
| |
Change Adj. 2015 v. 2014
| |
% Change Adj. 2015 v. 2014
| | |
|
2015
| |
2014
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
|
Six Months Ended June 30 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
|
Xylem Inc. |
1,757
| |
1,911
| |
(154)
| |
-8%
| |
11
| |
162
| |
19
| |
1%
| |
0%
|
| | | | | | | | | | | | | | | | |
|
Water Infrastructure
|
1,051
| |
1,168
| |
(117)
| |
-10%
| |
-
| |
119
| |
2
| |
0%
| |
0%
|
Applied Water
|
706
| |
743
| |
(37)
| |
-5%
| |
11
| |
43
| |
17
| |
2%
| |
1%
|
| | | | | | | | | | | | | | | | |
|
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 | | YTD |
| | 2015 | 2014 | | 2015 | 2014 | | 2015 | 2014 |
|
Total Revenue
| | | | | | | | |
|
• Total Xylem
|
837
|
906
| |
920
|
1,005
| |
1,757
|
1,911
|
|
• Water Infrastructure
|
500
|
552
| |
551
|
616
|
|
1,051
|
1,168
|
|
• Applied Water
|
337
|
354
| |
369
|
389
|
|
706
|
743
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income
| | | | | | | | |
|
• Total Xylem
|
83
|
76
| |
104
|
116
| |
187
|
192
|
|
• Water Infrastructure
|
47
|
46
| |
65
|
76
|
|
112
|
122
|
|
• Applied Water
|
46
|
41
| |
51
|
53
|
|
97
|
94
|
|
• Total Segments
|
93
|
87
| |
116
|
129
| |
209
|
216
|
| | | | | | | | |
|
|
Operating Margin
| | | | | | | | |
|
• Total Xylem
|
9.9%
|
8.4%
| |
11.3%
|
11.5%
| |
10.6%
|
10.0%
|
|
• Water Infrastructure
|
9.4%
|
8.3%
| |
11.8%
|
12.3%
| |
10.7%
|
10.4%
|
|
• Applied Water
|
13.6%
|
11.6%
| |
13.8%
|
13.6%
| |
13.7%
|
12.7%
|
|
• Total Segments
|
11.1%
|
9.6%
|
|
12.6%
|
12.8%
|
|
11.9%
|
11.3%
|
| | | | | | | | |
|
|
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
| |
12
|
27
|
|
• Water Infrastructure
|
5
|
12
| |
4
|
5
| |
9
|
17
|
|
• Applied Water
|
1
|
6
| |
2
|
4
| |
3
|
10
|
|
• Total Segments
|
6
|
18
| |
6
|
9
| |
12
|
27
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Operating Income*
| | | | | | | | |
|
• Total Xylem
|
90
|
94
| |
110
|
125
| |
200
|
219
|
|
• Water Infrastructure
|
53
|
58
| |
69
|
81
|
|
122
|
139
|
|
• Applied Water
|
47
|
47
| |
53
|
57
|
|
100
|
104
|
|
• Total Segments
|
100
|
105
| |
122
|
138
| |
222
|
243
|
| | | | | | | | |
|
|
Adjusted Operating Margin*
| | | | | | | | |
|
• Total Xylem
|
10.8%
|
10.4%
| |
12.0%
|
12.4%
| |
11.4%
|
11.5%
|
|
• Water Infrastructure
|
10.6%
|
10.5%
| |
12.5%
|
13.1%
| |
11.6%
|
11.9%
|
|
• Applied Water
|
13.9%
|
13.3%
| |
14.4%
|
14.7%
| |
14.2%
|
14.0%
|
|
• Total Segments
|
11.9%
|
11.6%
|
|
13.3%
|
13.7%
|
|
12.6%
|
12.7%
|
| | | | | | | | |
|
| | | | | | | | |
|
|
*Adjusted Operating Income excludes restructuring & realignment
costs and special charges.
|
|
|
| | | |
|
Xylem Inc. Non-GAAP Reconciliation |
Adjusted Diluted EPS
|
($ Millions, except per share amounts)
|
| | |
| | | | |
| |
| | | |
| | | | | | | | | | | | |
|
| | | | | | | | | | | | |
|
| | | | | | | | | | | | |
|
| |
|
|
|
|
|
| |
|
|
|
|
|
| | Q2 2014 | | Q2 2015 |
| | As Reported |
| Adjustments |
| Adjusted | | | As Reported |
| Adjustments |
| Adjusted |
|
Total Revenue
| |
1,005
| | | | | |
1,005
| | | | |
920
| | | | | |
920
| |
|
Operating Income
| |
116
| | | |
9
| |
a
| |
125
| | | | |
104
| | | |
6
| |
a
| |
110
| |
|
Operating Margin
| | 11.5 | % | | | | | 12.4 | % | | | | 11.3 | % | | | | | 12.0 | % |
|
Interest Expense
| |
(13
|
)
| | | | |
(13
|
)
| | | |
(14
|
)
| | | | |
(14
|
)
|
|
Other Non-Operating Income (Expense)
|
|
1
|
| |
| |
|
1
|
| | |
|
1
|
| |
|
1
|
|
b
|
|
2
|
|
|
Income before Taxes
| |
104
| | | |
9
| | | |
113
| | | | |
91
| | | |
7
| | | |
98
| |
|
Provision for Income Taxes
|
|
(18
|
)
| |
|
(7
|
)
|
c
|
|
(25
|
)
| | |
|
(17
|
)
| |
|
(3
|
)
|
c
|
|
(20
|
)
|
|
Net Income
|
|
86
|
| |
|
2
|
| |
|
88
|
| | |
|
74
|
| |
|
4
|
| |
|
78
|
|
|
Diluted Shares
|
|
184.5
|
|
|
|
|
|
184.5
|
|
|
|
|
182.3
|
|
|
|
|
|
182.3
|
|
| Diluted EPS | $ | 0.47 |
|
| $ | 0.01 |
|
| $ | 0.48 |
|
|
| $ | 0.41 |
|
| $ | 0.02 |
|
| $ | 0.43 |
|
| | | | | | | | | | | | |
|
|
Currency translation impact on current year diluted EPS
|
|
|
|
|
|
|
$
|
(0.06
|
)
|
|
|
|
$
|
(0.06
|
)
|
| Diluted EPS at Constant Currency |
|
|
|
|
|
|
| $ | 0.47 |
|
|
|
| $ | 0.49 |
|
| | | | | | | | | | | | |
|
| | | | | | | | | | | | |
|
| | | | | | | | | | | | |
|
| | | | | | | | | | | | |
|
| |
|
|
|
|
|
| |
|
|
|
|
|
| | Q2 YTD 2014 | | Q2 YTD 2015 |
| | As Reported |
| Adjustments |
| Adjusted | | | As Reported |
| Adjustments |
| Adjusted |
|
Total Revenue
| |
1,911
| | | | | |
1,911
| | | | |
1,757
| | | | | |
1,757
| |
|
Operating Income
| |
192
| | | |
27
| |
a
| |
219
| | | | |
187
| | | |
13
| |
a
| |
200
| |
|
Operating Margin
| | 10.0 | % | | | | | 11.5 | % | | | | 10.6 | % | | | | | 11.4 | % |
|
Interest Expense
| |
(27
|
)
| | | | |
(27
|
)
| | | |
(28
|
)
| | | | |
(28
|
)
|
|
Other Non-Operating Income (Expense)
| |
-
| | | | | |
-
| | | | |
-
| | | |
2
| |
b
| |
2
| |
|
Gain from sale of businesses
|
|
-
|
| |
| |
|
-
|
| | |
|
9
|
| |
|
(9
|
)
| |
|
0
|
|
|
Income before Taxes
| |
165
| | | |
27
| | | |
192
| | | | |
168
| | | |
6
| | | |
174
| |
|
Provision for Income Taxes
|
|
(30
|
)
| |
|
(11
|
)
|
c
|
|
(41
|
)
| | |
|
(30
|
)
| |
|
(6
|
)
|
c
|
|
(36
|
)
|
|
Net Income
|
|
135
|
| |
|
16
|
| |
|
151
|
| | |
|
138
|
| |
|
0
|
| |
|
138
|
|
|
Diluted Shares
|
|
185.1
|
|
|
|
|
|
185.1
|
|
|
|
|
182.7
|
|
|
|
|
|
182.7
|
|
| Diluted EPS | $ | 0.73 |
|
| $ | 0.09 |
|
| $ | 0.82 |
|
|
| $ | 0.76 |
|
| $ | - |
|
| $ | 0.76 |
|
| | | | | | | | | | | | |
|
|
Currency translation impact on current year diluted EPS
|
|
|
|
|
|
|
$
|
(0.11
|
)
|
|
|
|
$
|
(0.11
|
)
|
| Diluted EPS at Constant Currency |
|
|
|
|
|
|
| $ | 0.87 |
|
|
|
| $ | 0.87 |
|
| | | | | | | | | | | | |
|
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 special tax items
|
|
|
|
|
Xylem Inc. Non-GAAP Reconciliation |
Net Cash - Operating Activities vs. Free Cash Flow
|
($ Millions)
|
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
| | | | | | | | | | | | | | | | | |
|
| | |
Q1
| | |
Q2
| | |
Six Months Ended
|
| | |
2015
|
| | |
2014
|
| | |
2015
|
| | |
2014
|
| | |
2015
|
| | |
2014
|
|
| | | | | | | | | | | | | | | | | |
|
Net Cash - Operating Activities | | |
$
|
39
| | | |
$
|
22
| | | |
$
|
84
| | | |
$
|
76
| | | |
$
|
123
| | | |
$
|
98
| |
| | | | | | | | | | | | | | | | | |
|
Capital Expenditures
| | | |
(37
|
)
| | | |
(25
|
)
| | | |
(20
|
)
| | | |
(23
|
)
| | | |
(57
|
)
| | | |
(48
|
)
|
| | |
| | |
| | |
| | |
| | |
| | |
|
Free Cash Flow | | |
$
|
2
|
| | |
$
|
(3
|
)
| | |
$
|
64
|
| | |
$
|
53
|
| | |
$
|
66
|
| | |
$
|
50
|
|
| | | | | | | | | | | | | | | | | |
|
Net Income
| | | |
64
| | | | |
49
| | | | |
74
| | | | |
86
| | | | |
138
| | | | |
135
| |
| | | | | | | | | | | | | | | | | |
|
Gain from sale of businesses
| | |
|
9
|
| | |
|
-
|
| | |
|
-
|
| | |
|
-
|
| | |
|
9
|
| | |
|
-
|
|
| | | | | | | | | | | | | | | | | |
|
Net Income, excluding gain on sale of businesses | |
$
|
55
|
| | |
$
|
49
|
| | |
$
|
74
|
| | |
$
|
86
|
| | |
$
|
129
|
| | |
$
|
135
|
|
| | | | | | | | | | | | | | | | | |
|
Free Cash Flow Conversion | | |
|
4
|
%
| | |
|
-6
|
%
| | |
|
86
|
%
| | |
|
62
|
%
| | |
|
51
|
%
| | |
|
37
|
%
|
| | | | | | | | | | | | | | | | | |
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20150730005696/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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