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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2019
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from             to             
Commission file number: 1-35229
Xylem Inc.
(Exact name of registrant as specified in its charter)
 
Indiana
  
45-2080495
(State or other jurisdiction of incorporation or
organization)
  
(I.R.S. Employer Identification No.)
1 International Drive, Rye Brook, NY 10573
(Address of principal executive offices) (Zip code)
(914) 323-5700
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
 
Trading Symbol(s)
 
Name of each exchange of which registered
Common Stock, par value $0.01 per share
 
XYL
 
New York Stock Exchange
2.250% Senior Notes due 2023
 
XYL23
 
New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes    No  
Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes      No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer
 
 
Accelerated filer
 
 
 
 
 
 
 
Non-accelerated filer
 
 
Smaller reporting company
 
 
 
 
 
 
 
 
 
 
 
 
Emerging growth company
 



If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     Yes      No  
As of July 26, 2019, there were 180,029,106 outstanding shares of the registrant’s common stock, par value $0.01 per share.
 



Xylem Inc.
Table of Contents
ITEM
  
  
PAGE
PART I – Financial Information
 
Item 1
-
 
 
 
 
 
 
 
 
 
 
 
Item 2
-
Item 3
-
Item 4
-
PART II – Other Information
 
Item 1
-
Item 1A
-
Item 2
-
Item 3
-
Item 4
-
Item 5
-
Item 6
-
 
 
 

2


PART I

ITEM 1.             CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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,
2019
 
2018
 
2019
 
2018
Revenue
$
1,345

 
$
1,317

 
$
2,582

 
$
2,534

Cost of revenue
819

 
798

 
1,582

 
1,555

Gross profit
526

 
519

 
1,000

 
979

Selling, general and administrative expenses
294

 
293

 
597

 
589

Research and development expenses
47

 
50

 
98

 
91

Restructuring and asset impairment charges
14

 
5

 
25

 
15

Operating income
171

 
171

 
280

 
284

Interest expense
18

 
21

 
36

 
42

Other non-operating income, net
3

 
2

 
5

 
5

Gain (loss) from sale of business

 
(2
)
 
1

 
(2
)
Income before taxes
156

 
150

 
250

 
245

Income tax expense
17

 
35

 
32

 
51

Net income
$
139

 
$
115

 
$
218

 
$
194

Earnings per share:
 
 
 
 
 
 
 
Basic
$
0.77

 
$
0.64

 
$
1.21

 
$
1.08

Diluted
$
0.77

 
$
0.64

 
$
1.20

 
$
1.07

Weighted average number of shares:
 
 
 
 
 
 
 
Basic
180.0

 
179.8

 
179.9

 
179.8

Diluted
181.2

 
181.0

 
181.1

 
181.2

See accompanying notes to condensed consolidated financial statements.


3


XYLEM INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)
(in millions)
 
 
Three Months
 
Six Months
For the period ended June 30,
2019
 
2018
 
2019
 
2018
Net income
$
139

 
$
115

 
$
218

 
$
194

Other comprehensive income, before tax:
 
 
 
 
 
 
 
Foreign currency translation adjustment
(18
)
 
(60
)
 
11

 
(52
)
Net change in derivative hedge agreements:
 
 
 
 
 
 
 
Unrealized loss

 
(9
)
 
(9
)
 
(9
)
Amount of loss (gain) reclassified into net income
2

 
(1
)
 
4

 
(2
)
Net change in postretirement benefit plans:
 
 
 
 
 
 
 
Amortization of prior service credit
(1
)
 
(1
)
 
(2
)
 
(2
)
Amortization of net actuarial loss into net income
3

 
4

 
6

 
7

Settlement/Curtailment

 

 

 
1

Other comprehensive (loss) income, before tax
(14
)
 
(67
)
 
10

 
(57
)
Income tax (benefit) expense related to items of other comprehensive income
(3
)
 
20

 
1

 
10

Other comprehensive (loss) income, net of tax
(11
)
 
(87
)
 
9

 
(67
)
Comprehensive income
$
128

 
$
28

 
$
227

 
$
127

See accompanying notes to condensed consolidated financial statements.

4


XYLEM INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(in millions, except per share amounts)
 
 
June 30,
2019
 
December 31,
2018
 
 
 
 
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
383

 
$
296

Receivables, less allowances for discounts and doubtful accounts of $31 and $35 in 2019 and 2018, respectively
1,096

 
1,031

Inventories
604

 
595

Prepaid and other current assets
175

 
172

Total current assets
2,258

 
2,094

Property, plant and equipment, net
661

 
656

Goodwill
2,999

 
2,976

Other intangible assets, net
1,211

 
1,232

Other non-current assets
545

 
264

Total assets
$
7,674

 
$
7,222

LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
539

 
$
586

Accrued and other current liabilities
596

 
546

Short-term borrowings and current maturities of long-term debt
402

 
257

Total current liabilities
1,537

 
1,389

Long-term debt
2,051

 
2,051

Accrued postretirement benefits
396

 
400

Deferred income tax liabilities
305

 
303

Other non-current accrued liabilities
479

 
297

Total liabilities
4,768

 
4,440

Commitments and contingencies (Note 19)

 

Stockholders’ equity:
 
 
 
Common Stock – par value $0.01 per share:
 
 
 
Authorized 750.0 shares, issued 193.8 shares and 192.9 shares in 2019 and 2018, respectively
2

 
2

Capital in excess of par value
1,975

 
1,950

Retained earnings
1,770

 
1,639

Treasury stock – at cost 13.7 shares and 13.2 shares in 2019 and 2018, respectively
(526
)
 
(487
)
Accumulated other comprehensive loss
(327
)
 
(336
)
Total stockholders’ equity
2,894

 
2,768

Non-controlling interests
12

 
14

Total equity
2,906

 
2,782

Total liabilities and stockholders’ equity
$
7,674

 
$
7,222


See accompanying notes to condensed consolidated financial statements.

5


XYLEM INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(in millions)
For the six months ended June 30,
2019
 
2018
Operating Activities
 
 
 
Net income
$
218

 
$
194

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Depreciation
58

 
58

Amortization
69

 
74

Share-based compensation
16

 
16

Restructuring and asset impairment charges
25

 
15

(Gain) loss from sale of businesses
(1
)
 
2

Other, net
4

 
(7
)
Payments for restructuring
(12
)
 
(12
)
Changes in assets and liabilities (net of acquisitions):
 
 
 
Changes in receivables
(68
)
 
(68
)
Changes in inventories
(10
)
 
(87
)
Changes in accounts payable
(23
)
 
54

Other, net
(70
)
 
(38
)
Net Cash – Operating activities
206

 
201

Investing Activities
 
 
 
Capital expenditures
(129
)
 
(111
)
Acquisitions of businesses, net of cash acquired
(18
)
 
(430
)
Proceeds from sale of business
(2
)
 

Other, net
3

 
4

Net Cash – Investing activities
(146
)
 
(537
)
Financing Activities
 
 
 
Short-term debt issued, net
257

 
437

  Short-term debt repaid
(113
)
 
(54
)
Repurchase of common stock
(39
)
 
(58
)
Proceeds from exercise of employee stock options
8

 
4

Dividends paid
(87
)
 
(76
)
Other, net
(1
)
 
(1
)
Net Cash – Financing activities
25

 
252

Effect of exchange rate changes on cash
2

 
(9
)
Net change in cash and cash equivalents
87

 
(93
)
Cash and cash equivalents at beginning of year
296

 
414

Cash and cash equivalents at end of period
$
383

 
$
321

Supplemental disclosure of cash flow information:
 
 
 
Cash paid during the period for:
 
 
 
Interest
$
45

 
$
46

Income taxes (net of refunds received)
$
74

 
$
51

See accompanying notes to condensed consolidated financial statements.

6


XYLEM INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Note 1. Background and Basis of Presentation
Background
Xylem Inc. (“Xylem” or the “Company”) is a leading equipment and service provider for water and wastewater applications with a broad portfolio of products and services addressing the full cycle of water, from collection, distribution and use to the return of water to the environment.
Xylem operates in three segments, Water Infrastructure, Applied Water and Measurement & Control Solutions. See Note 20, "Segment Information" to the condensed consolidated financial statements for further segment background information.
Except as otherwise indicated or unless the context otherwise requires, "Xylem," "we," "us," "our" and the "Company" refer to Xylem Inc. and its subsidiaries.
Basis of Presentation
The interim condensed consolidated financial statements reflect our financial position and results of operations in conformity with accounting principles generally accepted in the United States of America ("GAAP"). All intercompany transactions between our businesses have been eliminated.
The unaudited interim condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") and, in the opinion of management, reflect all adjustments (which include normal recurring adjustments) considered necessary for a fair presentation of the financial position and results of operations for the periods presented. Certain information and note disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such SEC rules. We believe that the disclosures made are adequate to make the information presented not misleading. We consistently applied the accounting policies described in our Annual Report on Form 10-K for the year ended December 31, 2018 ("2018 Annual Report") in preparing these unaudited condensed consolidated financial statements, with the exception of accounting standard updates described in Note 2. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes included in our 2018 Annual Report.
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Estimates are revised as additional information becomes available. Estimates and assumptions are used for, but not limited to, postretirement obligations and assets, revenue recognition, income tax contingency accruals and valuation allowances, goodwill and indefinite lived intangible impairment testing, contingent liabilities and lease accounting. Actual results could differ from these estimates.
Our quarterly financial periods end on the Saturday closest to the last day of the calendar quarter, except for the fourth quarter which ends on December 31. For ease of presentation, the condensed consolidated financial statements included herein are described as ending on the last day of the calendar quarter.
Note 2. Recently Issued Accounting Pronouncements
Pronouncements Not Yet Adopted
In June 2016, the FASB issued guidance amending the accounting for the impairment of financial instruments, including trade receivables. Under current guidance, credit losses are recognized when the applicable losses have a probable likelihood of occurring and this assessment is based on past events and current conditions. The amended guidance eliminates the “probable” threshold and requires an entity to use a broader range of information, including forecast information when estimating expected credit losses. Generally, this should result in a more timely recognition of credit losses. This guidance is effective for interim and annual periods beginning after December 15, 2019 with early adoption permitted for interim and annual periods beginning after December 15, 2018. The requirements of the amended guidance should be applied using a modified retrospective approach

7


except for debt securities, which require a prospective transition approach. We are evaluating the impact of the guidance on our financial condition and results of operations.
Recently Adopted Pronouncements
In August 2018, the Financial Accounting Standards Board (“FASB”) issued guidance regarding the accounting for implementation costs of a hosting arrangement that is a service contract. The guidance establishes the requirement to capitalize certain implementation costs incurred in a hosting arrangement that is a service contract, effectively aligning with the requirement to capitalize certain implementation costs incurred to develop or obtain internal-use software. This guidance is effective for interim and annual periods beginning after December 15, 2019 with early adoption permitted. The requirements of the amended guidance may be applied using either a retrospective or prospective approach. We adopted this guidance prospectively as of April 1, 2019. This guidance did not have a material impact on our financial condition and results of operations.

In February 2016, the FASB issued guidance amending the accounting for leases. Specifically, the amended guidance requires all lessees to record a lease liability at lease inception, with a corresponding right of use ("ROU") asset, except for short-term leases. Lessor accounting is not fundamentally changed. This amended guidance is effective for interim and annual periods beginning after December 15, 2018 using a modified retrospective approach. Early adoption was permitted. We adopted this guidance as of January 1, 2019 using the modified retrospective approach whereby prior comparative periods were not retrospectively restated in the condensed consolidated financial statements. The adoption of the standard resulted in the recognition of ROU assets and lease liabilities of $267 million and $265 million, respectively, as well as deferred tax assets and deferred tax liabilities of $68 million, as of January 1, 2019, the date of initial application. The guidance did not have a material impact on our Condensed Consolidated Income Statements and Statements of Cash Flow. See Note 9, "Leases" for further details.

Note 3. Acquisitions and Divestitures
2019 Acquisitions
During the three and six months ended June 30, 2019 we spent approximately $13 million and $18 million net of cash received on acquisition activity, respectively.
2018 Acquisitions and Divestitures
Pure Technologies Ltd.

On January 31, 2018, we acquired all the issued and outstanding shares of Pure Technologies Ltd. (“Pure”), a leader in intelligent leak detection and condition assessment solutions for water distribution networks for approximately $420 million, net of cash received. Acquisition costs of $4 million were reflected as a component of selling, general and administrative expenses in our Condensed Consolidated Income Statement for the year ended December 31, 2018.

Pure’s results of operations were consolidated with the Company effective February 1, 2018 and are reflected in the Measurement & Control Solutions segment.


8


The Pure purchase price allocation as of January 31, 2018 is shown in the following table:

(in millions)
Amount
Cash
$
14

Receivables
23

Inventories
4

Prepaid and other current assets
2

Property, plant and equipment
22

Intangible assets
149

Other long-term assets
1

Accounts payable
(3
)
Accrued and other current liabilities
(12
)
Deferred income tax liabilities
(25
)
Other non-current accrued liabilities
(2
)
Total identifiable net assets
173

 
 
Goodwill
261

   Total consideration
$
434



The fair values of Pure's assets and liabilities were determined based on estimates and assumptions which management believes are reasonable.

Goodwill arising from the acquisition consists largely of synergies and economies of scale expected from combining the operations of Pure and Xylem. All of the goodwill was assigned to the Measurement & Control Solutions segment and is not deductible for tax purposes.

The estimate of the fair value of Pure identifiable intangible assets was determined primarily using the “income approach,” which requires a forecast of all of the expected future cash flows either through the use of the multi-period excess earnings method or the relief-from-royalty method. Some of the more significant assumptions inherent in the development of intangible asset values include: the amount and timing of projected future cash flows, the discount rate selected to measure the risks inherent in the future cash flows, the assessment of the intangible asset’s life cycle, as well as other factors. The following table summarizes key information underlying identifiable intangible assets related to the Pure acquisition:

Category
 
Life
 
Amount (in millions)
Customer Relationships
 
17 - 18 years
 
$
84

Technology
 
3 - 10 years
 
38

Tradenames
 
20 years
 
21

Internally Developed Software
 
3 years
 
6

Total
 
 
 
$
149



The following table summarizes, on an unaudited pro forma basis, the condensed combined results of operations of the Company for the three and six month periods ended June 30, 2018 assuming the acquisition of Pure was made on January 1, 2017:
 
(in millions)
Three Months Ended June 30, 2018
Six Months Ended June 30, 2018
 
 
Revenue
N/A
$
2,539

 
Net income
N/A
$
191



9



The foregoing unaudited pro forma results are for informational purposes only and are not necessarily indicative of the actual results of operations that might have occurred had the acquisition occurred on January 1, 2017, nor are they necessarily indicative of future results. The pro forma financial information includes the impact of purchase accounting and other nonrecurring items directly attributable to the acquisition, which include:

Amortization expense of acquired intangibles
Adjustments to the depreciation of property, plant and equipment reflecting the impact of the calculated fair value of those assets in accordance with purchase accounting
Adjustments to interest expense to remove historical Pure interest costs and reflect Xylem's current debt profile
The related tax impact of the above referenced adjustments

The pro forma results do not include any cost savings or operational synergies that may be generated or realized due to the acquisition of Pure.

During the three months ended June 30, 2018 Pure had revenue and operating income of $26 million and less than $1 million, respectively. During the five months ended June 30, 2018 Pure had revenue and an operating loss of $42 million and $2 million, respectively.

Other Acquisition Activity

During the three months ended June 30, 2018 we had no acquisition activity. During the six months ended June 30, 2018 we spent approximately $10 million net of cash received on other acquisition activity.

Note 4. Revenue
Disaggregation of Revenue
The following table illustrates the sources of revenue:
 
Three Months Ended
 
Six Months Ended
 
June 30,
 
June 30,
(in millions)
2019
 
2018
 
2019
 
2018
Revenue from contracts with customers
$
1,281

 
$
1,258

 
$
2,459

 
$
2,420

Lease Revenue
64

 
59

 
123

 
114

Total
$
1,345


$
1,317

 
$
2,582

 
$
2,534


10


The following table reflects revenue from contracts with customers by application:
 
Three Months Ended
 
Six Months Ended
 
June 30,
 
June 30,
(in millions)
2019
 
2018
 
2019
 
2018
Water Infrastructure
 
 
 
 
 
 
 
     Transport
$
396

 
$
387

 
$
742

 
$
734

     Treatment
101

 
100

 
178

 
178

 
 
 
 
 
 
 
 
Applied Water
 
 
 
 
 
 
 
     Building Services
216

 
206

 
429

 
400

     Industrial Water
178

 
182

 
344

 
354

 
 
 
 
 
 
 
 
Measurement and Control Solutions
 
 
 
 
 
 
 
     Water
195

 
175

 
394

 
347

     Energy
85

 
84

 
158

 
164

     Software as a Service/Other
25

 
35

 
49

 
69

     Test
85

 
89

 
165

 
174

 
 
 
 
 
 
 
 
Total
$
1,281


$
1,258

 
$
2,459


$
2,420

The following table reflects revenue from contracts with customers by geographical region:
 
Three Months Ended
 
Six Months Ended
 
June 30,
 
June 30,
(in millions)
2019
 
2018
 
2019
 
2018
Water Infrastructure
 
 
 
 
 
 
 
     United States
$
160

 
$
135

 
$
293

 
$
248

     Europe
179

 
191

 
339

 
368

     Emerging Markets & Other
158

 
161

 
288

 
296

 
 
 
 
 
 
 
 
Applied Water
 
 
 
 
 
 
 
     United States
212

 
198

 
413

 
386

     Europe
92

 
100

 
186

 
198

     Emerging Markets & Other
90

 
90

 
174

 
170

 
 
 
 
 
 
 
 
Measurement and Control Solutions
 
 
 
 
 
 
 
     United States
252

 
230

 
488

 
436

     Europe
64

 
71

 
136

 
155

     Emerging Markets & Other
74

 
82

 
142

 
163

 
 
 
 
 
 
 
 
Total
$
1,281


$
1,258

 
$
2,459


$
2,420




11


Contract Balances
We receive payments from customers based on a billing schedule as established in our contracts. Contract assets relate to costs incurred to perform in advance of scheduled billings. Contract liabilities relate to payments received in advance of performance under the contracts. Changes in contract assets and liabilities are due to our performance under the contract.
The table below provides contract assets, contract liabilities, and significant changes in contract assets and liabilities:
(in millions)
Contract Assets (a)
Contract Liabilities
Balance at January 1, 2018
$
89

$
107

  Additions, net
51

86

  Revenue recognized from opening balance

(74
)
  Billings
(54
)

  Other
(3
)
(5
)
Balance at June 30, 2018
$
83

$
114

 
 
 
Balance at January 1, 2019
$
96

$
113

  Additions, net
55

84

  Revenue recognized from opening balance

(66
)
  Billings
(50
)

  Other
10


Balance at June 30, 2019
$
111

$
131

(a)
Excludes receivable balances which are disclosed on the balance sheet

Performance obligations
Delivery schedules vary from customer to customer based upon their requirements. Typically, large projects require longer lead production cycles and delays can occur from time to time. As of June 30, 2019, the aggregate amount of the transaction price allocated to performance obligations that are unsatisfied or partially unsatisfied for contracts with performance obligations, amount to $340 million. We expect to recognize the majority of revenue upon the completion of satisfying these performance obligations in the following 60 months. The Company elects to apply the practical expedient to exclude from this disclosure revenue related to performance obligations that are part of a contract whose original expected duration is less than one year.
Note 5. Restructuring Charges
From time to time, the Company will incur costs related to restructuring actions in order to optimize our cost base and more strategically position ourselves based on the economic environment and customer demand. During the three and six months ended June 30, 2019, we recognized restructuring charges of $14 million and $22 million, respectively. We incurred these charges primarily as a continuation of our efforts to reposition our European and North American businesses to optimize our cost structure and improve our operational efficiency and effectiveness. The charges included the reduction of headcount and consolidation of facilities within our Measurement & Control Solutions and Water Infrastructure segments, as well as headcount reductions within our Applied Water segment.
During the three and six months ended June 30, 2018, we recognized restructuring charges of $5 million and $15 million, respectively. We incurred these charges primarily as a continuation of our efforts to reposition our European and North American businesses to optimize our cost structure and improve our operational efficiency and effectiveness. The charges included the reduction of headcount and consolidation of facilities within our Measurement & Control Solutions and Water Infrastructure segments, as well as headcount reductions within our Applied Water segment.

12


The following table presents the components of restructuring expense and asset impairment charges:
 
Three Months Ended
 
Six Months Ended
 
June 30,
 
June 30,
(in millions)
2019
 
2018
 
2019
 
2018
By component:
 
 
 
 
 
 
 
Severance and other charges
$
13

 
$
5

 
$
20

 
$
14

Lease related charges

 

 
1

 
1

Other restructuring charges
1

 

 
1

 

Total restructuring charges
$
14

 
$
5

 
$
22

 
$
15

Asset impairment

 

 
3

 

Total restructuring and asset impairment charges
$
14

 
$
5

 
$
25

 
$
15

 
 
 
 
 
 
 
 
By segment:
 
 
 
 
 
 
 
Water Infrastructure
$
7

 
$
3

 
$
11

 
$
6

Applied Water
2

 

 
2

 
1

Measurement & Control Solutions
5

 
2

 
12

 
8


The following table displays a rollforward of the restructuring accruals, presented on our Condensed Consolidated Balance Sheets within accrued and other current liabilities, for the six months ended June 30, 2019 and 2018:
(in millions)
 
2019
 
2018
Restructuring accruals - January 1
 
$
5

 
$
7

Restructuring charges
 
22

 
15

Cash payments
 
(12
)
 
(12
)
Foreign currency and other
 
(1
)
 

Restructuring accruals - June 30
 
$
14

 
$
10

 
 
 
 
 
By segment:
 
 
 
 
Water Infrastructure
 
$
4

 
$
2

Applied Water
 
2

 
1

Measurement & Control Solutions
 
5

 
4

Regional selling locations (a)
 
3

 
2

Corporate and other
 

 
1


(a)
Regional selling locations consist primarily of selling and marketing organizations that incurred restructuring expense which was allocated to the segments. The liabilities associated with restructuring expense were not allocated to the segments.
The following is a rollforward for the six months ended June 30, 2019 and 2018 of employee position eliminations associated with restructuring activities:
 
 
2019
 
2018
Planned reductions - January 1
 
69

 
47

Additional planned reductions
 
350

 
155

Actual reductions and reversals
 
(298
)
 
(103
)
Planned reductions - June 30
 
121

 
99



13


The following table presents expected restructuring spend for actions commenced as of June 30, 2019:
<
(in millions)
 
Water Infrastructure
 
Applied Water
 
Measurement & Control Solutions
 
Corporate
 
Total
Actions Commenced in 2019:
 
 
 
 
 
 
 
 
 
 
Total expected costs
 
$
17


$
4


$
8


$

 
$
29

Costs incurred during Q1 2019
 
3




3



 
6

Costs incurred during Q2 2019
 
7


2


5



 
14

Total expected costs remaining
 
$
7


$
2


$


$


$
9

 
 
 
 
 
 
 
 
 
 
 
Actions Commenced in 2018:
 
 
 
 
 
 
 
 
 
 
Total expected costs
 
$
8


$
1


$
7


$

 
$
16

Costs incurred during 2018
 
7


1


7



 
15

Costs incurred during Q1 2019
 
1







 
1

Costs incurred during Q2 2019
 







 

Total expected costs remaining
 
$


$


$


$


$

 
 
 
 
 
 
 
 
 
 
 
Actions Commenced in 2017:
 
 
 
 
 
 
 
 
 
 
Total expected costs
 
$
16

 
$
8

 
$
4

 
$

 
$
28

Costs incurred during 2017
 
5

 
4

 
2

 

 
11

Costs incurred during 2018
 
2

 
1

 
1

 

 
4

Costs incurred during Q1 2019
 

 

 
1

 

 
1

Costs incurred during Q2 2019
 

 

 

 

 

Total expected costs remaining