QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Title of each class | Trading Symbol(s) | Name of each exchange of which registered | ||||||||||||
☑ | Accelerated filer | ☐ | ||||||||||||||||||
Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||||||||
Emerging growth company |
ITEM | PAGE | ||||||||||
PART I – Financial Information | |||||||||||
Item 1 | - | ||||||||||
Item 2 | - | ||||||||||
Item 3 | - | ||||||||||
Item 4 | - | ||||||||||
PART II – Other Information | |||||||||||
Item 1 | - | ||||||||||
Item 1A | - | ||||||||||
Item 2 | - | ||||||||||
Item 3 | - | ||||||||||
Item 4 | - | ||||||||||
Item 5 | - | ||||||||||
Item 6 | - | ||||||||||
For the three months ended March 31, | 2022 | 2021 | |||||||||
Revenue | $ | $ | |||||||||
Cost of revenue | |||||||||||
Gross profit | |||||||||||
Selling, general and administrative expenses | |||||||||||
Research and development expenses | |||||||||||
Restructuring and asset impairment charges | |||||||||||
Operating income | |||||||||||
Interest expense | |||||||||||
Other non-operating (expense) income, net | ( | ||||||||||
Gain from sale of business | |||||||||||
Income before taxes | |||||||||||
Income tax expense | |||||||||||
Net income | $ | $ | |||||||||
Earnings per share: | |||||||||||
Basic | $ | $ | |||||||||
Diluted | $ | $ | |||||||||
Weighted average number of shares: | |||||||||||
Basic | |||||||||||
Diluted | |||||||||||
For the three months ended March 31, | 2022 | 2021 | |||||||||
Net income | $ | $ | |||||||||
Other comprehensive income (loss), before tax: | |||||||||||
Foreign currency translation adjustment | ( | ||||||||||
Net change in derivative hedge agreements: | |||||||||||
Unrealized gain (loss) | ( | ( | |||||||||
Amount of loss (gain) reclassified into net income | ( | ||||||||||
Net change in post-retirement benefit plans: | |||||||||||
Amortization of prior service credit | ( | ||||||||||
Amortization of net actuarial loss into net income | |||||||||||
Other comprehensive income (loss), before tax | ( | ||||||||||
Income tax expense (benefit) related to items of other comprehensive income (loss) | |||||||||||
Other comprehensive income (loss), net of tax | ( | ( | |||||||||
Comprehensive income | $ | $ | |||||||||
March 31, 2022 | December 31, 2021 | ||||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Receivables, less allowances for discounts, returns and credit losses of $ | |||||||||||
Inventories | |||||||||||
Prepaid and other current assets | |||||||||||
Total current assets | |||||||||||
Property, plant and equipment, net | |||||||||||
Goodwill | |||||||||||
Other intangible assets, net | |||||||||||
Other non-current assets | |||||||||||
Total assets | $ | $ | |||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | $ | |||||||||
Accrued and other current liabilities | |||||||||||
Short-term borrowings and current maturities of long-term debt | |||||||||||
Total current liabilities | |||||||||||
Long-term debt | |||||||||||
Accrued post-retirement benefits | |||||||||||
Deferred income tax liabilities | |||||||||||
Other non-current accrued liabilities | |||||||||||
Total liabilities | |||||||||||
Commitments and contingencies (Note 16) | |||||||||||
Stockholders’ equity: | |||||||||||
Common Stock – par value $ | |||||||||||
Authorized | |||||||||||
Capital in excess of par value | |||||||||||
Retained earnings | |||||||||||
Treasury stock – at cost | ( | ( | |||||||||
Accumulated other comprehensive loss | ( | ( | |||||||||
Total stockholders’ equity | |||||||||||
Non-controlling interests | |||||||||||
Total equity | |||||||||||
Total liabilities and stockholders’ equity | $ | $ |
For the three months ended March 31, | 2022 | 2021 | |||||||||
Operating Activities | |||||||||||
Net income | $ | $ | |||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation | |||||||||||
Amortization | |||||||||||
Share-based compensation | |||||||||||
Restructuring and asset impairment charges | |||||||||||
Gain from sale of business | ( | ||||||||||
Other, net | |||||||||||
Payments for restructuring | ( | ( | |||||||||
Changes in assets and liabilities (net of acquisitions): | |||||||||||
Changes in receivables | ( | ( | |||||||||
Changes in inventories | ( | ( | |||||||||
Changes in accounts payable | ( | ||||||||||
Other, net | ( | ( | |||||||||
Net Cash – Operating activities | ( | ( | |||||||||
Investing Activities | |||||||||||
Capital expenditures | ( | ( | |||||||||
Proceeds from sale of business | |||||||||||
Proceeds from the sale of property, plant and equipment | |||||||||||
Cash received from investments | |||||||||||
Cash paid for investments | ( | ||||||||||
Other, net | |||||||||||
Net Cash – Investing activities | ( | ( | |||||||||
Financing Activities | |||||||||||
Repurchase of common stock | ( | ( | |||||||||
Proceeds from exercise of employee stock options | |||||||||||
Dividends paid | ( | ( | |||||||||
Other, net | ( | ||||||||||
Net Cash – Financing activities | ( | ( | |||||||||
Effect of exchange rate changes on cash | ( | ( | |||||||||
Net change in cash and cash equivalents | ( | ( | |||||||||
Cash and cash equivalents at beginning of year | |||||||||||
Cash and cash equivalents at end of period | $ | $ | |||||||||
Supplemental disclosure of cash flow information: | |||||||||||
Cash paid during the period for: | |||||||||||
Interest | $ | $ | |||||||||
Income taxes (net of refunds received) | $ | $ |
Three Months Ended | |||||||||||
March 31, | |||||||||||
(in millions) | 2022 | 2021 | |||||||||
Revenue from contracts with customers | $ | $ | |||||||||
Lease Revenue | |||||||||||
Total | $ | $ |
Three Months Ended | |||||||||||
March 31, | |||||||||||
(in millions) | 2022 | 2021 | |||||||||
Water Infrastructure | |||||||||||
Transport | $ | $ | |||||||||
Treatment | |||||||||||
Applied Water* | |||||||||||
Commercial Building Services | |||||||||||
Residential Building Services | |||||||||||
Industrial Water | |||||||||||
Measurement & Control Solutions | |||||||||||
Water | |||||||||||
Energy | |||||||||||
Total | $ | $ |
Three Months Ended | |||||||||||
March 31, | |||||||||||
(in millions) | 2022 | 2021 | |||||||||
Water Infrastructure | |||||||||||
United States | $ | $ | |||||||||
Western Europe | |||||||||||
Emerging Markets (a) | |||||||||||
Other | |||||||||||
Applied Water | |||||||||||
United States | |||||||||||
Western Europe | |||||||||||
Emerging Markets (a) | |||||||||||
Other | |||||||||||
Measurement & Control Solutions | |||||||||||
United States | |||||||||||
Western Europe | |||||||||||
Emerging Markets (a) | |||||||||||
Other | |||||||||||
Total | $ | $ |
(in millions) | Contract Assets (a) | Contract Liabilities | ||||||
Balance at January 1, 2022 | $ | $ | ||||||
Additions, net | ||||||||
Revenue recognized from opening balance | — | ( | ||||||
Billings transferred to accounts receivable | ( | |||||||
Other | ( | ( | ||||||
Balance at March 31, 2022 | $ | $ | ||||||
Balance at January 1, 2021 | $ | $ | ||||||
Additions, net | ||||||||
Revenue recognized from opening balance | — | ( | ||||||
Billings transferred to accounts receivable | ( | — | ||||||
Other | ( | |||||||
Balance at March 31, 2021 | $ | $ |
Three Months Ended | |||||||||||
March 31, | |||||||||||
(in millions) | 2022 | 2021 | |||||||||
By component: | |||||||||||
Severance and other charges | $ | $ | |||||||||
Asset impairment | |||||||||||
Total restructuring charges | $ | $ | |||||||||
Asset impairment charges | |||||||||||
Total restructuring and asset impairment charges | $ | $ | |||||||||
By segment: | |||||||||||
Water Infrastructure | $ | $ | |||||||||
Applied Water | |||||||||||
Measurement & Control Solutions | |||||||||||
(in millions) | 2022 | 2021 | ||||||||||||
Restructuring accruals - January 1 | $ | $ | ||||||||||||
Restructuring charges, net | ||||||||||||||
Cash payments | ( | ( | ||||||||||||
Asset impairment | ( | |||||||||||||
Restructuring accruals - March 31 | $ | $ | ||||||||||||
By segment: | ||||||||||||||
Water Infrastructure | $ | $ | ||||||||||||
Applied Water | ||||||||||||||
Measurement & Control Solutions | ||||||||||||||
Regional selling locations (a) | ||||||||||||||
Corporate and other |
(in millions) | Water Infrastructure | Applied Water | Measurement & Control Solutions | Corporate | Total | |||||||||||||||||||||||||||
Actions Commenced in 2021: | ||||||||||||||||||||||||||||||||
Total expected costs | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Costs incurred during 2021 | ||||||||||||||||||||||||||||||||
Costs incurred during Q1 2022 | ||||||||||||||||||||||||||||||||
Total expected costs remaining | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Three Months Ended | |||||||||||
March 31, | |||||||||||
2022 | 2021 | ||||||||||
Net income (in millions) | $ | $ | |||||||||
Shares (in thousands): | |||||||||||
Weighted average common shares outstanding | |||||||||||
Add: Participating securities (a) | |||||||||||
Weighted average common shares outstanding — Basic | |||||||||||
Plus incremental shares from assumed conversions: (b) | |||||||||||
Dilutive effect of stock options | |||||||||||
Dilutive effect of restricted stock units and performance share units | |||||||||||
Weighted average common shares outstanding — Diluted | |||||||||||
Basic earnings per share | $ | $ | |||||||||
Diluted earnings per share | $ | $ |
Three Months Ended | |||||||||||
March 31, | |||||||||||
(in thousands) | 2022 | 2021 | |||||||||
Stock options | |||||||||||
Restricted stock units | |||||||||||
Performance share units |
(in millions) | March 31, 2022 | December 31, 2021 | |||||||||
Finished goods | $ | $ | |||||||||
Work in process | |||||||||||
Raw materials | |||||||||||
Total inventories | $ | $ |
(in millions) | Water Infrastructure | Applied Water | Measurement & Control Solutions | Total | |||||||||||||||||||
Balance as of January 1, 2022 | $ | $ | $ | $ | |||||||||||||||||||
Activity in 2022 | |||||||||||||||||||||||
Foreign currency and other | ( | ( | ( | ( | |||||||||||||||||||
Balance as of March 31, 2022 | $ | $ | $ | $ |
March 31, 2022 | December 31, 2021 | ||||||||||||||||||||||||||||||||||
(in millions) | Carrying Amount | Accumulated Amortization | Net Intangibles | Carrying Amount | Accumulated Amortization | Net Intangibles | |||||||||||||||||||||||||||||
Customer and distributor relationships | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||
Proprietary technology and patents | ( | ( | |||||||||||||||||||||||||||||||||
Trademarks | ( | ( | |||||||||||||||||||||||||||||||||
Software | ( | ( | |||||||||||||||||||||||||||||||||
Other | ( | ( | |||||||||||||||||||||||||||||||||
Indefinite-lived intangibles | |||||||||||||||||||||||||||||||||||
Other Intangibles | $ | $ | ( | $ | $ | $ | ( | $ |
Three Months Ended | |||||||||||
March 31, | |||||||||||
(in millions) | 2022 | 2021 | |||||||||
Cash Flow Hedges | |||||||||||
Foreign Exchange Contracts | |||||||||||
Amount of (loss) recognized in OCI | $ | ( | $ | ( | |||||||
Amount of loss (gain) reclassified from OCI into revenue | ( | ||||||||||
Amount of (gain) reclassified from OCI into cost of revenue | ( | ||||||||||
Net Investment Hedges | |||||||||||
Cross-Currency Swaps | |||||||||||
Amount of gain recognized in OCI | $ | $ | |||||||||
Amount of income recognized in Interest Expense | |||||||||||
Foreign Currency Denominated Debt | |||||||||||
Amount of gain recognized in OCI | $ | $ | |||||||||
(in millions) | March 31, 2022 | December 31, 2021 | |||||||||
Derivatives designated as hedging instruments | |||||||||||
Assets | |||||||||||
Cash Flow Hedges | |||||||||||
Other current assets | $ | $ | |||||||||
Net Investment Hedges | |||||||||||
Other non-current assets | $ | $ | |||||||||
Liabilities | |||||||||||
Cash Flow Hedges | |||||||||||
Other current liabilities | $ | ( | $ | ( | |||||||
Net Investment Hedges | |||||||||||
Other non-current accrued liabilities | $ | ( | $ | ( |
(in millions) | March 31, 2022 | December 31, 2021 | |||||||||
Compensation and other employee-benefits | $ | $ | |||||||||
Customer-related liabilities | |||||||||||
Accrued taxes | |||||||||||
Lease liabilities | |||||||||||
Accrued warranty costs | |||||||||||
Other accrued liabilities | |||||||||||
Total accrued and other current liabilities | $ | $ |
(in millions) | March 31, 2022 | December 31, 2021 | |||||||||
2.250% Senior Notes due 2023 (a) | |||||||||||
3.250% Senior Notes due 2026 (a) | |||||||||||
1.950% Senior Notes due 2028 (a) | |||||||||||
2.250% Senior Notes due 2031 (a) | |||||||||||
4.375% Senior Notes due 2046 (a) | |||||||||||
Debt issuance costs and unamortized discount (b) | ( | ( | |||||||||
Total debt | |||||||||||
Less: short-term borrowings and current maturities of long-term debt | |||||||||||
Total long-term debt | $ | $ |
Three Months Ended | |||||||||||
March 31, | |||||||||||
(in millions) | 2022 | 2021 | |||||||||
Domestic defined benefit pension plans: | |||||||||||
Service cost | $ | $ | |||||||||
Interest cost | |||||||||||
Expected return on plan assets | ( | ( | |||||||||
Amortization of net actuarial loss | |||||||||||
Net periodic benefit cost | $ | $ | |||||||||
International defined benefit pension plans: | |||||||||||
Service cost | $ | $ | |||||||||
Interest cost | |||||||||||
Expected return on plan assets | ( | ( | |||||||||
Amortization of net actuarial loss | |||||||||||
Net periodic benefit cost | $ | $ | |||||||||
Total net periodic benefit cost | $ | $ |
Common Stock | Capital in Excess of Par Value | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Stock | Non-Controlling Interest | Total | |||||||||||||||||||||||||||||||||||
Balance at January 1, 2022 | $ | $ | $ | $ | ( | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Other comprehensive loss, net | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
Dividends declared ($ | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||
Stock incentive plan activity | — | — | — | ( | — | ||||||||||||||||||||||||||||||||||||
Repurchase of common stock | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||
Balance at March 31, 2022 | $ | $ | $ | $ | ( | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||
Common Stock | Capital in Excess of Par Value | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Stock | Non-Controlling Interest | Total | |||||||||||||||||||||||||||||||||||
Balance at January 1, 2021 | $ | $ | $ | $ | ( | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||
Other | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Other comprehensive loss, net | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||
Dividends declared ($ | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||
Stock incentive plan activity | — | — | — | ( | — | ||||||||||||||||||||||||||||||||||||
Repurchase of common stock | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||
Balance at March 31, 2021 | $ | $ | $ | $ | ( | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||
Share units (in thousands) | Weighted Average Exercise Price / Share | Weighted Average Remaining Contractual Term (Years) | Aggregate Intrinsic Value (in millions) | ||||||||||||||||||||
Outstanding at January 1, 2022 | $ | ||||||||||||||||||||||
Granted | |||||||||||||||||||||||
Exercised | ( | ||||||||||||||||||||||
Forfeited and expired | ( | ||||||||||||||||||||||
Outstanding at March 31, 2022 | $ | $ | |||||||||||||||||||||
Options exercisable at March 31, 2022 | $ | $ | |||||||||||||||||||||
Vested and expected to vest as of March 31, 2022 | $ | $ |
Volatility | % | |||||||
Risk-free interest rate | % | |||||||
Dividend yield | % | |||||||
Expected term (in years) | ||||||||
Weighted-average fair value / share | $ |
Share units (in thousands) | Weighted Average Grant Date Fair Value / Share | ||||||||||
Outstanding at January 1, 2022 | $ | ||||||||||
Granted | |||||||||||
Vested | ( | ||||||||||
Forfeited | ( | ||||||||||
Outstanding at March 31, 2022 | $ |
Share units (in thousands) | Weighted Average Grant Date Fair Value / Share | ||||||||||
Outstanding at January 1, 2022 | $ | ||||||||||
Granted | |||||||||||
Forfeited (a) | ( | ||||||||||
Outstanding at March 31, 2022 | $ |
Share units (in thousands) | Weighted Average Grant Date Fair Value / Share | ||||||||||
Outstanding at January 1, 2022 | $ | ||||||||||
Granted | |||||||||||
Adjustment for Market Condition Achieved (a) | |||||||||||
Vested | ( | ||||||||||
Forfeited | ( | ||||||||||
Outstanding at March 31, 2022 | $ |
Volatility | % | |||||||
Risk-free interest rate | % | |||||||
Share units (in thousands) | Weighted Average Grant Date Fair Value / Share | ||||||||||
Outstanding at January 1, 2022 | $ | ||||||||||
Granted | |||||||||||
Outstanding at March 31, 2022 | $ |
(in millions) | Foreign Currency Translation | Post-retirement Benefit Plans | Derivative Instruments | Total | |||||||||||||||||||
Balance at January 1, 2022 | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Foreign currency translation adjustment | ( | — | — | ( | |||||||||||||||||||
Tax on foreign currency translation adjustment | ( | — | — | ( | |||||||||||||||||||
Amortization of prior service cost and net actuarial loss on post-retirement benefit plans into other non-operating income (expense), net | — | — | |||||||||||||||||||||
Income tax impact on amortization of post-retirement benefit plan items | — | ( | — | ( | |||||||||||||||||||
Unrealized loss on derivative hedge agreements | — | — | ( | ( | |||||||||||||||||||
Reclassification of unrealized gain on foreign exchange agreements into revenue | — | — | |||||||||||||||||||||
Balance at March 31, 2022 | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
(in millions) | Foreign Currency Translation | Post-retirement Benefit Plans | Derivative Instruments | Total | |||||||||||||||||||
Balance at January 1, 2021 | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||
Foreign currency translation adjustment | — | — | |||||||||||||||||||||
Tax on foreign currency translation adjustment | ( | — | — | ( | |||||||||||||||||||
Amortization of prior service cost and net actuarial loss on post-retirement benefit plans into other non-operating income (expense), net | — | — | |||||||||||||||||||||
Income tax impact on amortization of post-retirement benefit plan items | — | ( | — | ( | |||||||||||||||||||
Unrealized loss on derivative hedge agreements | — | — | ( | ( | |||||||||||||||||||
Income tax benefit on unrealized loss on derivative hedge agreements | — | — | |||||||||||||||||||||
Reclassification of unrealized gain on foreign exchange agreements into revenue | — | — | ( | ( | |||||||||||||||||||
Reclassification of unrealized gain on foreign exchange agreements into cost of revenue | — | — | ( | ( | |||||||||||||||||||
Balance at March 31, 2021 | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
(in millions) | 2022 | 2021 | |||||||||
Warranty accrual – January 1 | $ | $ | |||||||||
Net charges for product warranties in the period | |||||||||||
Settlement of warranty claims | ( | ( | |||||||||
Foreign currency and other | ( | ||||||||||
Warranty accrual - March 31 | $ | $ |
Three Months Ended | |||||||||||
March 31, | |||||||||||
(in millions) | 2022 | 2021 | |||||||||
Revenue: | |||||||||||
Water Infrastructure | $ | $ | |||||||||
Applied Water | |||||||||||
Measurement & Control Solutions | |||||||||||
Total | $ | $ | |||||||||
Operating Income (Loss): | |||||||||||
Water Infrastructure | $ | $ | |||||||||
Applied Water | |||||||||||
Measurement & Control Solutions | ( | ||||||||||
Corporate and other | ( | ( | |||||||||
Total operating income | $ | $ | |||||||||
Interest expense | $ | $ | |||||||||
Other non-operating income, net | ( | ||||||||||
Gain from sale of business | |||||||||||
Income before taxes | $ | $ | |||||||||
Depreciation and Amortization: | |||||||||||
Water Infrastructure | $ | $ | |||||||||
Applied Water | |||||||||||
Measurement & Control Solutions | |||||||||||
Regional selling locations (a) | |||||||||||
Corporate and other | |||||||||||
Total | $ | $ | |||||||||
Capital Expenditures: | |||||||||||
Water Infrastructure | $ | $ | |||||||||
Applied Water | |||||||||||
Measurement & Control Solutions | |||||||||||
Regional selling locations (b) | |||||||||||
Corporate and other | |||||||||||
Total | $ | $ |
ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
Three Months Ended | |||||||||||||||||||||||
March 31, | |||||||||||||||||||||||
(In millions, except for per share data) | 2022 | 2021 | |||||||||||||||||||||
Net income & Earnings per share | $ | 82 | $ | 0.45 | $ | 87 | $ | 0.48 | |||||||||||||||
Restructuring and realignment, net of tax of $1 and $2 | 3 | 0.03 | 6 | 0.03 | |||||||||||||||||||
Special charges, net of tax of $1 and $0 | 1 | 0.01 | 3 | 0.02 | |||||||||||||||||||
Tax-related special items | (1) | (0.01) | 6 | 0.03 | |||||||||||||||||||
Gain from sale of business, net of tax of $0 | (1) | (0.01) | — | — | |||||||||||||||||||
Adjusted net income & Adjusted earnings per share | $ | 84 | $ | 0.47 | $ | 102 | $ | 0.56 | |||||||||||||||
Three Months Ended | |||||||||||
March 31, | |||||||||||
(In millions) | 2022 | 2021 | |||||||||
Net cash provided by operating activities | $ | (81) | $ | (26) | |||||||
Capital expenditures | (49) | (39) | |||||||||
Free cash flow | $ | (130) | $ | (65) | |||||||
Net cash used in investing activities | $ | (43) | $ | (31) | |||||||
Net cash provided (used) by financing activities | $ | (106) | $ | (115) |
Three Months Ended | ||||||||||||||||||||
March 31, | ||||||||||||||||||||
(In millions) | 2022 | 2021 | Change | |||||||||||||||||
Revenue | $ | 1,272 | $ | 1,256 | 1.3 | % | ||||||||||||||
Gross profit | 467 | 490 | (4.7) | % | ||||||||||||||||
Gross margin | 36.7 | % | 39.0 | % | (230) | bp | ||||||||||||||
Total operating expenses | 356 | 357 | (0.3) | % | ||||||||||||||||
Expense to revenue ratio | 28.0 | % | 28.4 | % | (40) | bp | ||||||||||||||
Restructuring and realignment costs | 4 | 8 | (50.0) | % | ||||||||||||||||
Special charges | 1 | 2 | (50.0) | % | ||||||||||||||||
Adjusted operating expenses | 351 | 347 | 1.2 | % | ||||||||||||||||
Adjusted operating expenses to revenue ratio | 27.6 | % | 27.6 | % | — | bp | ||||||||||||||
Operating income | 111 | 133 | (16.5) | % | ||||||||||||||||
Operating margin | 8.7 | % | 10.6 | % | (190) | bp | ||||||||||||||
Interest and other non-operating expense, net | 14 | 19 | (26.3) | % | ||||||||||||||||
Gain from sale of business | 1 | — | NM | |||||||||||||||||
Income tax expense | 16 | 27 | (40.7) | % | ||||||||||||||||
Tax rate | 16.4 | % | 23.3 | % | (690) | bp | ||||||||||||||
Net income | $ | 82 | $ | 87 | (5.7) | % |
Water Infrastructure | Applied Water | Measurement & Control Solutions | Total Xylem | ||||||||||||||||||||||||||||||||
(In millions) | $ Change | % Change | $ Change | % Change | $ Change | % Change | $ Change | % Change | |||||||||||||||||||||||||||
2021 Revenue | $ | 509 | $ | 393 | $ | 354 | $ | 1,256 | |||||||||||||||||||||||||||
Organic Growth | 43 | 8.4 | % | 40 | 10.2 | % | (32) | (9.0) | % | 51 | 4.1 | % | |||||||||||||||||||||||
Divestitures | — | — | % | — | — | % | (2) | (0.6) | % | (2) | (0.2) | % | |||||||||||||||||||||||
Constant Currency | 43 | 8.4 | % | 40 | 10.2 | % | (34) | (9.6) | % | 49 | 3.9 | % | |||||||||||||||||||||||
Foreign currency translation (a) | (19) | (3.7) | % | (8) | (2.0) | % | (6) | (1.7) | % | (33) | (2.6) | % | |||||||||||||||||||||||
Total change in revenue | 24 | 4.7 | % | 32 | 8.1 | % | (40) | (11.3) | % | 16 | 1.3 | % | |||||||||||||||||||||||
2022 Revenue | $ | 533 | $ | 425 | $ | 314 | $ | 1,272 | |||||||||||||||||||||||||||
Water Infrastructure | Applied Water | Measurement & Control Solutions | Total Xylem | ||||||||||||||||||||||||||||||||
(in millions) | $ Change | % Change | $ Change | % Change | $ Change | % Change | $ Change | % Change | |||||||||||||||||||||||||||
2021 Orders | $ | 611 | $ | 477 | $ | 450 | $ | 1,538 | |||||||||||||||||||||||||||
Organic Growth | 73 | 11.9 | % | 38 | 8.0 | % | 112 | 24.9 | % | 223 | 14.5 | % | |||||||||||||||||||||||
Divestitures | — | — | % | — | — | % | (6) | (1.3) | % | (6) | (0.4) | % | |||||||||||||||||||||||
Constant Currency | 73 | 11.9 | % | 38 | 8.0 | % | 106 | 23.6 | % | 217 | 14.1 | % | |||||||||||||||||||||||
Foreign currency translation (a) | (24) | (3.9) | % | (10) | (2.1) | % | (6) | (1.3) | % | (40) | (2.6) | % | |||||||||||||||||||||||
Total change in orders | 49 | 8.0 | % | 28 | 5.9 | % | 100 | 22.2 | % | 177 | 11.5 | % | |||||||||||||||||||||||
2022 Orders | $ | 660 | $ | 505 | $ | 550 | $ | 1,715 |
Three Months Ended | ||||||||||||||||||||
March 31, | ||||||||||||||||||||
(In millions) | 2022 | 2021 | Change | |||||||||||||||||
Selling, general and administrative expenses ("SG&A") | $ | 304 | $ | 301 | 1.0 | % | ||||||||||||||
SG&A as a % of revenue | 23.9 | % | 24.0 | % | (10) | bp | ||||||||||||||
Research and development expenses ("R&D") | 52 | 50 | 4.0 | % | ||||||||||||||||
R&D as a % of revenue | 4.1 | % | 4.0 | % | 10 | bp | ||||||||||||||
Restructuring and asset impairment charges | — | 6 | — | % | ||||||||||||||||
Operating expenses | $ | 356 | $ | 357 | (0.3) | % | ||||||||||||||
Expense to revenue ratio | 28.0 | % | 28.4 | % | (40) | bp |
2022 | 2021 | |||||||||||||
Planned reductions - January 1 | 60 | 319 | ||||||||||||
Additional planned reductions | — | 57 | ||||||||||||
Actual reductions and reversals | (25) | (148) | ||||||||||||
Planned reductions - March 31 | 35 | 228 |
(in millions) | Water Infrastructure | Applied Water | Measurement & Control Solutions | Corporate | Total | |||||||||||||||||||||||||||
Actions Commenced in 2021: | ||||||||||||||||||||||||||||||||
Total expected costs | $ | 4 | $ | — | $ | 1 | $ | — | $ | 5 | ||||||||||||||||||||||
Costs incurred during 2021 | 3 | — | — | — | 3 | |||||||||||||||||||||||||||
Costs incurred during Q1 2022 | — | — | — | — | — | |||||||||||||||||||||||||||
Total expected costs remaining | $ | 1 | $ | — | $ | 1 | $ | — | $ | 2 | ||||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||
March 31, | ||||||||||||||||||||
(In millions) | 2022 | 2021 | Change | |||||||||||||||||
Water Infrastructure | ||||||||||||||||||||
Operating income | $ | 74 | $ | 71 | 4.2 | % | ||||||||||||||
Operating margin | 13.9 | % | 13.9 | % | — | bp | ||||||||||||||
Restructuring and realignment costs | 1 | 5 | (80.0) | % | ||||||||||||||||
Adjusted operating income | $ | 75 | $ | 76 | (1.3) | % | ||||||||||||||
Adjusted operating margin | 14.1 | % | 14.9 | % | (80) | bp | ||||||||||||||
Applied Water | ||||||||||||||||||||
Operating income | $ | 59 | $ | 66 | (10.6) | % | ||||||||||||||
Operating margin | 13.9 | % | 16.8 | % | (290) | bp | ||||||||||||||
Restructuring and realignment costs | 1 | 1 | — | % | ||||||||||||||||
Special charges | — | 1 | — | % | ||||||||||||||||
Adjusted operating income | $ | 60 | $ | 68 | (11.8) | % | ||||||||||||||
Adjusted operating margin | 14.1 | % | 17.3 | % | (320) | bp | ||||||||||||||
Measurement & Control Solutions | ||||||||||||||||||||
Operating income (loss) | $ | (10) | $ | 9 | (211.1) | % | ||||||||||||||
Operating margin | (3.2) | % | 2.5 | % | (570) | bp | ||||||||||||||
Restructuring and realignment costs | 2 | 2 | — | % | ||||||||||||||||
Special charges | — | — | NM | |||||||||||||||||
Adjusted operating income (loss) | $ | (8) | $ | 11 | (172.7) | % | ||||||||||||||
Adjusted operating margin | (2.5) | % | 3.1 | % | (560) | bp | ||||||||||||||
Corporate and other | ||||||||||||||||||||
Operating loss | $ | (12) | $ | (13) | 7.7 | % | ||||||||||||||
Special charges | 1 | 1 | — | % | ||||||||||||||||
Adjusted operating loss | $ | (11) | $ | (12) | (8.3) | % | ||||||||||||||
Total Xylem | ||||||||||||||||||||
Operating income | $ | 111 | $ | 133 | (16.5) | % | ||||||||||||||
Operating margin | 8.7 | % | 10.6 | % | (190) | bp | ||||||||||||||
Restructuring and realignment costs | 4 | 8 | (50.0) | % | ||||||||||||||||
Special charges | 1 | 2 | (50.0) | % | ||||||||||||||||
Adjusted operating income | $ | 116 | $ | 143 | (18.9) | % | ||||||||||||||
Adjusted operating margin | 9.1 | % | 11.4 | % | (230) | bp |
Three Months Ended | |||||||||||||||||
March 31, 2022 | |||||||||||||||||
Net Income | $ | 82 | |||||||||||||||
Net Income margin | 6.4 | % | |||||||||||||||
Depreciation | 28 | ||||||||||||||||
Amortization | 30 | ||||||||||||||||
Interest expense, net | 11 | ||||||||||||||||
Income tax expense | 16 | ||||||||||||||||
EBITDA | $167 | ||||||||||||||||
Water Infrastructure | Applied Water | Measurement & Control Solutions | Other* | Total | |||||||||||||
EBITDA | $83 | $63 | $25 | $(4) | $167 | ||||||||||||
Restructuring and realignment | 1 | 1 | 2 | 0 | 4 | ||||||||||||
Share-based compensation | 1 | 1 | 1 | 6 | 9 | ||||||||||||
Special charges | 0 | 0 | 0 | 2 | 2 | ||||||||||||
(Gain) loss from sale of business | 0 | 0 | (1) | 0 | (1) | ||||||||||||
Adjusted EBITDA | $85 | $65 | $27 | $4 | $181 | ||||||||||||
Adjusted EBITDA margin | 15.9 | % | 15.3 | % | 8.6 | % | NM | 14.2 | % | ||||||||
* Other includes Regional selling locations, corporate and other items. |
Three Months Ended | |||||||||||||||||
March 31, 2021 | |||||||||||||||||
Net Income | $87 | ||||||||||||||||
Net Income margin | 6.9 | % | |||||||||||||||
Depreciation | 30 | ||||||||||||||||
Amortization | 32 | ||||||||||||||||
Interest expense, net | 19 | ||||||||||||||||
Income tax expense | 27 | ||||||||||||||||
EBITDA | $195 | ||||||||||||||||
Water Infrastructure | Applied Water | Measurement & Control Solutions | Other* | Total | |||||||||||||
EBITDA | $82 | $72 | $44 | $(3) | $195 | ||||||||||||
Restructuring and realignment | 5 | 1 | 2 | 0 | 8 | ||||||||||||
Share-based compensation | 1 | 1 | 1 | 6 | 9 | ||||||||||||
Special charges | 0 | 1 | 0 | 2 | 3 | ||||||||||||
(Gain) loss from sale of business | 0 | 0 | 0 | 0 | 0 | ||||||||||||
Adjusted EBITDA | $88 | $75 | $47 | $5 | $215 | ||||||||||||
Adjusted EBITDA margin | 17.3 | % | 19.1 | % | 13.3 | % | NM | 17.1 | % | ||||||||
* Other includes Regional selling locations, corporate and other items. |
2022 versus 2021 | |||||||||||||||||
Water Infrastructure | Applied Water | Measurement & Control Solutions | Other* | Total | |||||||||||||
EBITDA | $1 | $(9) | $(19) | $(1) | $(28) | ||||||||||||
Restructuring and realignment | (4) | 0 | 0 | 0 | (4) | ||||||||||||
Share-based compensation | 0 | 0 | 0 | 0 | 0 | ||||||||||||
Special charges | 0 | (1) | 0 | 0 | (1) | ||||||||||||
(Gain) loss from sale of business | 0 | 0 | (1) | 0 | (1) | ||||||||||||
Adjusted EBITDA | $(3) | $(10) | $(20) | $(1) | $(34) | ||||||||||||
Adjusted EBITDA margin | (1.4) | % | (3.8) | % | (4.7) | % | NM | (2.9) | % | ||||||||
* Other includes Regional selling locations, corporate and other items. | |||||||||||||||||
Three Months Ended | |||||||||||||||||
March 31, | |||||||||||||||||
(In millions) | 2022 | 2021 | Change | ||||||||||||||
Operating activities | $ | (81) | $ | (26) | $ | (55) | |||||||||||
Investing activities | (43) | (31) | (12) | ||||||||||||||
Financing activities | (106) | (115) | 9 | ||||||||||||||
Foreign exchange (a) | (2) | (15) | 13 | ||||||||||||||
Total | $ | (232) | $ | (187) | $ | (45) |
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS) PERIOD | TOTAL NUMBER OF SHARES PURCHASED | AVERAGE PRICE PAID PER SHARE (a) | TOTAL NUMBER OF SHARES PURCHASED AS PART OF PUBLICLY ANNOUNCED PLANS OR PROGRAMS (b) | APPROXIMATE DOLLAR VALUE OF SHARES THAT MAY YET BE PURCHASED UNDER THE PLANS OR PROGRAMS (b) | ||||||||||||||||||||||
1/1/22 - 1/31/22 | — | — | — | $228 | ||||||||||||||||||||||
2/1/22 - 2/28/22 | 0.5 | 91.23 | 0.5 | $182 | ||||||||||||||||||||||
3/1/22 - 3/31/22 | — | — | — | $182 |
Exhibit Number | Description | Location | |||||||||
Fourth Amended and Restated Articles of Incorporation of Xylem Inc. | Incorporated by reference to Exhibit 3.1 of Xylem Inc.’s Form 8-K filed on May 15, 2017 (CIK No. 1524472, File No. 1-35229). | ||||||||||
Fourth Amended and Restated By-laws of Xylem Inc. | Incorporated by reference to Exhibit 3.2 of Xylem Inc.’s Form 8-K filed on May 15, 2017 (CIK No. 1524472, File No. 1-35229). | ||||||||||
Form of 2011 Omnibus Incentive Plan Performance Share Unit Agreement (2022). | Filed herewith. | ||||||||||
Form of 2011 Omnibus Incentive Plan Restricted Stock Unit Agreement (2022). | Filed herewith. | ||||||||||
Certification pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | Filed herewith. | ||||||||||
Certification pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | Filed herewith. | ||||||||||
Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | This Exhibit is intended to be furnished in accordance with Regulation S-K Item 601(b) (32) (ii) and shall not be deemed to be filed for purposes of Section 18 of the Securities Exchange Act of 1934 or incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except as shall be expressly set forth by specific reference. | ||||||||||
Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | This Exhibit is intended to be furnished in accordance with Regulation S-K Item 601(b) (32) (ii) and shall not be deemed to be filed for purposes of Section 18 of the Securities Exchange Act of 1934 or incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except as shall be expressly set forth by specific reference. | ||||||||||
101.0 | The following materials from Xylem Inc.’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2022, formatted in Inline Extensible Business Reporting Language (Inline XBRL): (i) Condensed Consolidated Income Statements, (ii) Condensed Consolidated Statements of Comprehensive Income, (iii) Condensed Consolidated Balance Sheets, (iv) Condensed Consolidated Statements of Cash Flows and (v) Notes to Condensed Consolidated Financial Statements | The instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document. | |||||||||
104.0 | The cover page from Xylem Inc.'s Quarterly Report on Form 10-Q for the period ended March 31, 2022 formatted in Inline XBRL and contained in Exhibit 101.0. |
XYLEM INC. | ||||||||
(Registrant) | ||||||||
/s/ Geri McShane | ||||||||
Geri McShane | ||||||||
Vice President, Controller and Chief Accounting Officer | ||||||||
/s/ Patrick K. Decker | |||||
Patrick K. Decker President and Chief Executive Officer |
/s/ Sandra E. Rowland | |||||
Sandra E. Rowland Senior Vice President and Chief Financial Officer |
/s/ Patrick K. Decker | |||||
Patrick K. Decker | |||||
President and Chief Executive Officer | |||||
May 4, 2022 |
/s/ Sandra E. Rowland | |||||
Sandra E. Rowland | |||||
Senior Vice President and Chief Financial Officer | |||||
May 4, 2022 |
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Condensed Consolidated Income Statements (Unaudited) - USD ($) shares in Thousands, $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Income Statement [Abstract] | ||
Revenues | $ 1,272 | $ 1,256 |
Cost of revenue | 805 | 766 |
Gross profit | 467 | 490 |
Selling, general and administrative expenses | 304 | 301 |
Research and development expenses | 52 | 50 |
Restructuring and asset impairment charges | 0 | 6 |
Operating income | 111 | 133 |
Interest expense | 13 | 21 |
Other non-operating (expense) income, net | (1) | 2 |
Gain from sale of business | 1 | 0 |
Income before taxes | 98 | 114 |
Income tax expense | 16 | 27 |
Net income | $ 82 | $ 87 |
Earnings per share: | ||
Basic (usd per share) | $ 0.45 | $ 0.49 |
Diluted (usd per share) | $ 0.45 | $ 0.48 |
Weighted average number of shares: | ||
Basic (in shares) | 180,231 | 180,267 |
Diluted (in shares) | 181,021 | 181,474 |
Condensed Consolidated Statements of Comprehensive (Loss) Income (Unaudited) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 82 | $ 87 |
Other comprehensive income (loss), before tax: | ||
Foreign currency translation adjustment | (3) | 10 |
Net change in derivative hedge agreements: | ||
Unrealized gain (loss) | (6) | (11) |
Amount of loss (gain) reclassified into net income | 2 | (3) |
Net change in post-retirement benefit plans: | ||
Amortization of prior service credit | 0 | (1) |
Amortization of net actuarial loss into net income | 4 | 6 |
Other comprehensive income (loss), before tax | (3) | 1 |
Income tax expense (benefit) related to items of other comprehensive income (loss) | 3 | 14 |
Other comprehensive income (loss), net of tax | (6) | (13) |
Comprehensive income | $ 76 | $ 74 |
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Millions |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Allowances for discounts, returns and credit losses | $ 37 | $ 44 |
Common Stock, par value | $ 0.01 | $ 0.01 |
Common Stock, shares authorized | 750,000,000.0 | 750,000,000.0 |
Common Stock, shares issued | 195,900,000 | 195,600,000 |
Treasury Stock, shares | 15,800,000 | 15,200,000 |
Restructuring Charges |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring Charges | Restructuring and Asset Impairment Charges Restructuring From time to time, the Company will incur costs related to restructuring actions in order to optimize our cost base and more strategically position itself. During the three months ended March 31, 2022, we incurred restructuring charges that were less than $1 million. During the three months ended March 31, 2021, we recognized restructuring charges of $5 million of which $4 million relates to actions previously announced in 2020 arising as a result of the COVID-19 pandemic. These charges included reduction of headcount across all segments and asset impairments within our Measurement & Control Solutions segment. The following table presents the components of restructuring expense and asset impairment charges:
The following table displays a roll-forward of the restructuring accruals, presented on our Condensed Consolidated Balance Sheets within "Accrued and other current liabilities" and "Other non-current accrued liabilities", for the three months ended March 31, 2022 and 2021:
(a)Regional selling locations consist primarily of selling and marketing organizations and related support services that incurred restructuring expense that was allocated to the segments. The liabilities associated with restructuring expense were not allocated to the segments. The following table presents expected restructuring spend in 2022 and thereafter:
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Background and Basis of Presentation |
3 Months Ended |
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Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Background and Basis of Presentation | 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 17, "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 statement 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, 2021 ("2021 Annual Report") in preparing these unaudited condensed consolidated financial statements. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes included in our 2021 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 condensed consolidated 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, post-retirement obligations and assets, revenue recognition, income taxes, valuation of intangible assets, goodwill and indefinite-lived intangible impairment testing and contingent liabilities. Actual results could differ from these estimates. The global outbreak of the novel coronavirus ("COVID-19") disease in March 2020, declared a pandemic by the World Health Organization, has created significant global volatility, uncertainty and macroeconomic disruption. The COVID-19 pandemic also has caused increased uncertainty in estimates and assumptions affecting the condensed consolidated financial statements. 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.
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Revenue |
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Revenue from Contract with Customer [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue | Revenue Disaggregation of Revenue The following table illustrates the sources of revenue:
The following table reflects revenue from contracts with customers by application.
*Items in the prior year footnote disclosures for Applied Water were reclassified to conform to the current classification. The following table reflects revenue from contracts with customers by geographical region.
(a)Emerging Markets includes results from the following regions: Eastern Europe, the Middle East and Africa, Latin America and Asia Pacific (excluding Japan, Australia and New Zealand, which are presented in "Other") 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:
(a)Excludes receivable balances, which are disclosed on the Condensed Consolidated Balance Sheets 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 March 31, 2022, the aggregate amount of the transaction price allocated to performance obligations that are unsatisfied or partially unsatisfied for contracts with performance obligations, amount to $379 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.
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Income Taxes |
3 Months Ended |
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Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Our quarterly provision for income taxes is measured using an estimated annual effective tax rate, adjusted for discrete items within periods presented. The comparison of our effective tax rate between periods is significantly impacted by the level and mix of earnings and losses by tax jurisdiction and discrete items. The income tax provision for the three months ended March 31, 2022 was $16 million resulting in an effective tax rate of 16.4%, compared to a $27 million expense resulting in an effective tax rate of 23.3% for the same period in 2021. The effective tax rate for the three-month period ended March 31, 2022 was lower than the U.S. federal statutory rate primarily due to favorable earnings mix and tax settlement benefits, partially offset by the Global Intangible Low Taxed Income ("GILTI") inclusion. Unrecognized Tax Benefits During 2019, Xylem’s Swedish subsidiary received a tax assessment for the 2013 tax year related to the tax treatment of an intercompany transfer of certain intellectual property that was made in connection with a reorganization of our European businesses. The assessment asserts an aggregate amount of approximately $80 million for tax, penalties and interest. Xylem filed an appeal with the Administrative Court of Stockholm. Management, in consultation with external legal advisors, believes it is more likely than not that Xylem will prevail on the proposed assessment and is vigorously defending our position through litigation; however, there can be no assurance that any final determination by the authorities will not be materially different than our position. As of March 31, 2022, we have not recorded any unrecognized tax benefits related to this uncertain tax position.
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Earnings Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | Earnings Per Share The following is a reconciliation of the shares used in calculating basic and diluted net earnings per share:
(a)Restricted stock unit awards containing rights to non-forfeitable dividends that participate in undistributed earnings with common stockholders are considered participating securities for purposes of computing earnings per share. (b)Incremental shares from stock options, restricted stock units and performance share units are computed by the treasury stock method. The weighted average shares listed below were not included in the computation of diluted earnings per share because to do so would have been anti-dilutive for the periods presented or were otherwise excluded under the treasury stock method. The treasury stock method calculates dilution assuming the exercise of all in-the-money options and vesting of restricted stock units and performance share units, reduced by the repurchase of shares with the proceeds from the assumed exercises and unrecognized compensation expense for outstanding awards. Performance share units will be included in the treasury stock calculation of diluted earnings per share upon achievement of underlying performance or market conditions at the end of the reporting period. See Note 13, "Share-Based Compensation Plans", to the condensed consolidated financial statements for further detail on the performance share units.
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Inventories |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | InventoriesThe components of total inventories are summarized as follows:
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Goodwill and Other Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets Goodwill Changes in the carrying value of goodwill by reportable segment for the three months ended March 31, 2022 are as follows:
Other Intangible Assets Information regarding our other intangible assets is as follows: Amortization expense related to finite-lived intangible assets was $30 million and $32 million for the three-month periods ended March 31, 2022 and 2021, respectively.
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Derivative Financial Instruments |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Financial Instruments | Derivative Financial Instruments Risk Management Objective of Using Derivatives We are exposed to certain risks arising from both our business operations and economic conditions, and we principally manage our exposures to these risks through management of our core business activities. Certain of our foreign operations expose us to fluctuations of foreign interest rates and exchange rates that may impact revenue, expenses, cash receipts, cash payments, and the value of our stockholders' equity. We enter into derivative financial instruments to protect the value or fix the amount of certain cash flows in terms of the functional currency of the business unit with that exposure and also reduce the volatility in stockholders' equity. Cash Flow Hedges of Foreign Exchange Risk We are exposed to fluctuations in various foreign currencies against our functional currencies. We use foreign currency derivatives, including currency forward agreements, to manage our exposure to fluctuations in the various exchange rates. Currency forward agreements involve fixing the foreign currency exchange rate for delivery of a specified amount of foreign currency on a specified date. Certain business units with exposure to foreign currency exchange risks have designated certain currency forward agreements as cash flow hedges of forecasted intercompany inventory purchases and sales. Our principal currency exposures relate to the Euro, Swedish Krona, British Pound, Canadian Dollar, Polish Zloty and Australian Dollar. We had foreign exchange contracts with purchased notional amounts totaling $457 million and $301 million as of March 31, 2022 and December 31, 2021, respectively. As of March 31, 2022, our most significant foreign currency derivatives included contracts to sell U.S. Dollar and purchase Euro, purchase Swedish Krona and sell Euro, sell British Pound and purchase Euro, sell Canadian Dollar and purchase Euro, purchase U.S. Dollar and sell Canadian Dollar, sell Australian Dollar and purchase Euro, and to purchase Polish Zloty and sell Euro. The purchased notional amounts associated with these currency derivatives are $186 million, $140 million, $49 million, $23 million, $22 million, $20 million and $17 million, respectively. As of December 31, 2021 the purchased notional amounts associated with these currency derivatives are $130 million, $88 million, $31 million, $14 million, $14 million, $13 million and $11 million, respectively. Hedges of Net Investments in Foreign Operations We are exposed to changes in foreign currencies impacting our net investments held in foreign subsidiaries. Cross-Currency Swaps Beginning in 2015, we entered into cross-currency swaps to manage our exposure to fluctuations in the Euro-U.S. Dollar exchange rate. During the second quarter of 2019 and third quarter of 2020 we entered into additional cross-currency swaps. The total notional amount of derivative instruments designated as net investment hedges was $1,135 million and $1,151 million as of March 31, 2022 and December 31, 2021, respectively. Foreign Currency Denominated Debt On March 11, 2016, we issued 2.250% Senior Notes of €500 million aggregate principal amount due March 2023. We designated the entirety of the outstanding balance, or $556 million and $563 million as of March 31, 2022 and December 31, 2021, respectively, net of unamortized discount, as a hedge of a net investment in certain foreign subsidiaries. The table below presents the effect of our derivative financial instruments on the Condensed Consolidated Income Statements and Statements of Comprehensive Income:
As of March 31, 2022, $7 million of net losses on cash flow hedges are expected to be reclassified into earnings in the next 12 months. As of March 31, 2022, no gains or losses on the net investment hedges are expected to be reclassified into earnings over their duration. The fair values of our derivative assets and liabilities are measured on a recurring basis using Level 2 inputs and are determined through the use of models that consider various assumptions including yield curves, time value and other measurements. The fair values of our derivative contracts currently included in our hedging program were as follows:
The fair value of our long-term debt, due in 2023, designated as a net investment hedge was $564 million and $577 million as of March 31, 2022 and December 31, 2021, respectively.
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Accrued and Other Current Liabilities |
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Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued and Other Current Liabilities | Accrued and Other Current LiabilitiesThe components of total accrued and other current liabilities are as follows:
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Credit Facilities and Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Credit Facilities and Debt | Credit Facilities and Debt Total debt outstanding is summarized as follows:
(a)The fair value of our Senior Notes was determined using quoted prices in active markets for identical securities, which are considered Level 1 inputs. The fair value of our Senior Notes due 2023 was $564 million and $577 million as of March 31, 2022 and December 31, 2021, respectively. The fair value of our Senior Notes due 2026 was $499 million and $537 million as of March 31, 2022 and December 31, 2021 respectively. The fair value of our Senior Notes due 2028 was $463 million and $497 million as of March 31, 2022 and December 31, 2021, respectively. The fair value of our Senior Notes due 2031 was $454 million and $496 million as of March 31, 2022 and December 31, 2021, respectively. The fair value of our Senior Notes due 2046 was $413 million and $481 million as of March 31, 2022 and December 31, 2021, respectively. (b)The debt issuance costs and unamortized discount are recognized as a reduction in the carrying value of the Senior Notes in the Condensed Consolidated Balance Sheets and are being amortized to interest expense in our Condensed Consolidated Income Statements over the expected remaining terms of the Senior Notes. Senior Notes On June 26, 2020, we issued 1.950% Senior Notes of $500 million aggregate principal amount due January 2028 (the “Senior Notes due 2028”) and 2.250% Senior Notes of $500 million aggregate principal amount due January 2031 (the “Senior Notes due 2031" and, together with the Senior Notes due 2028, the “Green Bond”). The Green Bond includes covenants that restrict our ability, and the ability of our restricted subsidiaries, to incur debt secured by liens on certain property above a threshold, to engage in certain sale and leaseback transactions involving certain property above a threshold, and to consolidate or merge, or convey or transfer all or substantially all of our assets. We may redeem the Green Bond at any time, at our option, subject to certain conditions, at specified redemption prices, plus accrued and unpaid interest to the redemption date. If a change of control triggering event (as defined in the applicable Green Bond indenture) occurs, we will be required to make an offer to purchase the notes at a price equal to 101% of their principal amount plus accrued and unpaid interest to the date of repurchase. Interest on the Green Bond is payable on January 30 and July 30 of each year. As of March 31, 2022, we are in compliance with all covenants for the Green Bond. On March 11, 2016, we issued 2.250% Senior Notes of €500 million aggregate principal amount due March 2023 (the "Senior Notes due 2023"). On October 11, 2016, we issued 3.250% Senior Notes of $500 million aggregate principal amount due October 2026 (the “Senior Notes due 2026”) and 4.375% Senior Notes of $400 million aggregate principal amount due October 2046 (the “Senior Notes due 2046” and, together with the Senior Notes due 2021, the Senior Notes due 2023 and the Senior Notes due 2026, the “Senior Notes”). The Senior Notes include covenants that restrict our ability, and the ability of our restricted subsidiaries, to incur debt secured by liens on certain property above a threshold, to engage in certain sale and leaseback transactions involving certain property above a threshold, and to consolidate or merge, or convey or transfer all or substantially all of our assets. We may redeem the Senior Notes, as applicable, in whole or in part, at any time at a redemption price equal to the principal amount of the Senior Notes to be redeemed, plus a make-whole premium. We may also redeem the Senior Notes in certain other circumstances, as set forth in the applicable Senior Notes indenture. If a change of control triggering event (as defined in the applicable Senior Notes indenture) occurs, we will be required to make an offer to purchase the Senior Notes at a price equal to 101% of their principal amount plus accrued and unpaid interest to the date of repurchase. Interest on the Senior Notes due 2021 is payable on April 1 and October 1 of each year. Interest on the Senior Notes due 2023 is payable on March 11 of each year. Interest on the Senior Notes due 2026 and the Senior Notes due 2046 is payable on May 1 and November 1 of each year. As of March 31, 2022, we are in compliance with all covenants for the Senior Notes. Credit Facilities 2019 Five-Year Revolving Credit Facility On March 5, 2019, Xylem entered into a Five-Year Revolving Credit Facility (the “2019 Credit Facility”) with Citibank, N.A., as Administrative Agent, and a syndicate of lenders. The 2019 Credit Facility provides for an aggregate principal amount of up to $800 million (available in U.S. Dollars and in Euros), with increases of up to $200 million for a maximum aggregate principal amount of $1 billion at the request of Xylem and with the consent of the institutions providing such increased commitments. Interest on all loans under the 2019 Credit Facility is payable either quarterly or at the expiration of any LIBOR or EURIBOR interest period applicable thereto. Borrowings accrue interest at a rate equal to, at Xylem's election, a base rate or an adjusted LIBOR or EURIBOR rate plus an applicable margin. The 2019 Credit Facility includes customary provisions for implementation of replacement rates for LIBOR-based and EURIBOR-based loans. The 2019 Credit Facility also includes a pricing grid that determines the applicable margin based on Xylem's credit rating, with a further adjustment depending on Xylem's annual Sustainalytics Environmental, Social and Governance ("ESG") score, determined based on the methodology in effect as of March 5, 2019. Xylem will also pay quarterly fees to each lender for such lender’s commitment to lend accruing on such commitment at a rate based on our credit rating, whether such commitment is used or unused, as well as a quarterly letter of credit fee accruing on the letter of credit exposure of such lender during the preceding quarter at a rate based on the credit rating of Xylem (as adjusted for the ESG score). The 2019 Credit Facility requires that Xylem maintain a consolidated total debt to consolidated EBITDA ratio (or maximum leverage ratio), which will be based on the last four fiscal quarters; and in addition contains a number of customary covenants, including limitations on the incurrence of secured debt and debt of subsidiaries, liens, sale and lease-back transactions, mergers, consolidations, liquidations, dissolutions and sales of assets. The 2019 Credit Facility also contains customary events of default. Finally, Xylem has the ability to designate subsidiaries that can borrow under the 2019 Credit Facility, subject to certain requirements and conditions set forth in the 2019 Credit Facility. As of March 31, 2022, the 2019 Credit Facility was undrawn and we are in compliance with all revolver covenants. Commercial Paper U.S. Dollar Commercial Paper Program Our U.S. Dollar commercial paper program generally serves as a means of short-term funding with a $600 million maximum issuing balance and a combined limit of $800 million inclusive of the 2019 Credit Facility. As of March 31, 2022 and December 31, 2021, none of the Company's $600 million U.S. Dollar commercial paper program was outstanding. We have the ability to continue borrowing under this program going forward in future periods. Euro Commercial Paper Program On June 3, 2019, Xylem entered into a Euro commercial paper program with ING Bank N.V., as administrative agent, and a syndicate of dealers. The Euro commercial paper program provides for a maximum issuing balance of up to €500 million (approximately $557 million) which may be denominated in a variety of currencies. The maximum issuing balance may be increased in accordance with the Dealer Agreement. As of March 31, 2022 and December 31, 2021, none of the Company's Euro commercial paper program was outstanding. We have the ability to continue borrowing under this program going forward in future periods.
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Post-retirement Benefit Plans |
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Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Post-retirement Benefit Plans | Post-retirement Benefit Plans The components of net periodic benefit cost for our defined benefit pension plans are as follows:
The components of net periodic benefit cost, other than the service cost component, are included in the line item "Other non-operating expense, net" in the Condensed Consolidated Income Statements. The total net periodic benefit cost for other post-retirement employee benefit plans was less than $1 million, including net credits recognized into other comprehensive income of less than $1 million, for both the three months ended March 31, 2022 and 2021, respectively. We contributed $5 million and $6 million to our defined benefit plans during the three months ended March 31, 2022 and 2021, respectively. Additional contributions ranging between approximately $11 million and $19 million are expected to be made during the remainder of 2022. During the first quarter of 2020, the Company purchased a bulk annuity policy with an insurance company for its largest defined benefit plan in the U.K., as a plan asset, to facilitate the termination and buy-out of the plan. The bulk annuity fully insures the benefits payable to the participants of the plan until a full buy-out of the plan can be executed, which is expected to occur in mid-2022.
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Equity |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity | Equity The following table shows the changes in stockholders' equity for the three months ended March 31, 2022:
The following table shows the changes in stockholders' equity for the three months ended March 31, 2021:
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Share-Based Compensation Plans |
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Share-based Payment Arrangement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Compensation Plans | Share-Based Compensation Plans Share-based compensation expense was $9 million during both the three months ended March 31, 2022 and 2021. The unrecognized compensation expense related to our stock options, restricted stock units and performance share units was $10 million, $38 million and $20 million, respectively, at March 31, 2022 and is expected to be recognized over a weighted average period of 2.2, 2.3 and 2.6 years, respectively. The amount of cash received from the exercise of stock options was $1 million and $3 million for the three months ended March 31, 2022 and 2021, respectively. Stock Option Grants The following is a summary of the changes in outstanding stock options for the three months ended March 31, 2022:
The total intrinsic value of options exercised (which is the amount by which the stock price exceeded the exercise price of the options on the date of exercise) during the three months ended March 31, 2022 was $0.6 million. Stock Option Fair Value The fair value of each option grant was estimated on the date of grant using the binomial lattice pricing model which incorporates multiple and variable assumptions over time, including assumptions such as employee exercise patterns, stock price volatility and changes in dividends. The following are weighted-average assumptions for 2022 grants:
Expected volatility is calculated based on an analysis of historic volatility measures for Xylem. We use historical data to estimate option exercise and employee termination behavior within the valuation model. Employee groups and option characteristics are considered separately for valuation purposes. The expected term represents an estimate of the period of time options are expected to remain outstanding. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of option grant. Restricted Stock Unit Grants The following is a summary of restricted stock unit activity for the three months ended March 31, 2022. The fair value of the restricted share unit awards is determined using the closing price of our common stock on date of grant:
ROIC Performance Share Unit Grants The following is a summary of Return on Invested Capital ("ROIC") performance share unit grants for the three months ended March 31, 2022. The fair value of the ROIC performance share units is equal to the closing share price on the date of the grant:
(a) Includes ROIC performance share unit awards forfeited during the period as a result of the final performance condition not being achieved on vest date. TSR Performance Share Unit Grants The following is a summary of our Total Shareholder Return ("TSR") performance share unit grants for the three months ended March 31, 2022:
(a) Represents an increase in the number of original TSR performance share units awarded based on the final market condition achievement at the end of the performance period of such awards. The fair value of TSR performance share units was calculated on the date of grant using a Monte Carlo simulation model utilizing several key assumptions, including expected Company and peer company share price volatility, correlation coefficients between peers, the risk-free rate of return, the expected dividend yield and other award design features. The following are weighted-average assumptions for 2022 grants:
Revenue Performance Share Unit Grants The following is a summary of our Revenue performance share unit grants for the three months ended March 31, 2022:
The fair value of the Revenue performance share unit awards is determined using the closing price of our common stock on date of grant. The shares will vest contingent upon the achievement of a pre-set, three-year Revenue target.
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Capital Stock |
3 Months Ended |
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Mar. 31, 2022 | |
Equity [Abstract] | |
Capital Stock | Capital Stock For the three months ended March 31, 2022 and March 31, 2021, the Company repurchased less than 0.6 million shares of common stock for $51 million and approximately 0.7 million shares of common stock for $67 million, respectively. Repurchases include both share repurchase programs approved by the Board of Directors and repurchases in relation to settlement of employee tax withholding obligations due as a result of the vesting of restricted stock units. The details of repurchases by each program are as follows: On August 24, 2015, our Board of Directors authorized the repurchase of up to $500 million in shares with no expiration date. The program's objective is to deploy our capital in a manner that benefits our stockholders and maintains our focus on growth. There were approximately 0.5 million shares repurchased for $45 million under the program for the three months ended March 31, 2022. For the three months ended March 31, 2021, we repurchased approximately 0.6 million shares for $60 million. There are up to $182 million in shares that may still be purchased under this plan as of March 31, 2022. Aside from the aforementioned repurchase program, we repurchased approximately 0.1 million shares and approximately 0.1 million shares for $6 million and $7 million for the three months ended March 31, 2022 and 2021, respectively, in relation to settlement of employee tax withholding obligations due as a result of the vesting of restricted stock units.
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Accumulated Other Comprehensive Income (Loss) |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Loss The following table provides the components of accumulated other comprehensive loss for the three months ended March 31, 2022:
The following table provides the components of accumulated other comprehensive loss for the three months ended March 31, 2021:
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Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies | Commitments and Contingencies Legal Proceedings From time to time, we are involved in legal and regulatory proceedings that are incidental to the operation of our businesses (or the business operations of previously-owned entities). These proceedings may seek remedies relating to matters including environmental, tax, intellectual property, acquisitions or divestitures, product liability, property damage, personal injury, privacy, employment, labor and pension, government contract issues and commercial or contractual disputes. See Note 4, "Income Taxes", of our condensed consolidated financial statements for a description of a pending tax litigation matter. Although the ultimate outcome of any legal matter cannot be predicted with certainty, based on present information, including our assessment of the merits of the particular claims, we do not believe it is reasonably possible that any asserted or unasserted legal claims or proceedings, individually or in aggregate, will have a material adverse effect on our results of operations, or financial condition. We have estimated and accrued $4 million as of March 31, 2022 and December 31, 2021 for these general legal matters. Guarantees We obtain certain stand-by letters of credit, bank guarantees, surety bonds and insurance letters of credit from third-party financial institutions in the ordinary course of business when required under contracts or to satisfy insurance-related requirements. As of March 31, 2022 and December 31, 2021, the amount of surety bonds, bank guarantees, insurance letters of credit, stand-by letters of credit as well as revenue and customs guarantees was $431 million and $415 million, respectively. Environmental In the ordinary course of business, we are subject to federal, state, local, and foreign environmental laws and regulations. We are responsible, or are alleged to be responsible, for ongoing environmental investigation and remediation of sites in various countries. These sites are in various stages of investigation and/or remediation and in many of these proceedings our liability is considered de minimis. We have received notification from the U.S. Environmental Protection Agency, and from similar state and foreign environmental agencies, that a number of sites formerly or currently owned and/or operated by Xylem or for which we are responsible, and other properties or water supplies that may be or have been impacted from those operations, contain disposed or recycled materials or wastes and require environmental investigation and/or remediation. These sites include instances where we have been identified as a potentially responsible party under federal and state environmental laws and regulations. Accruals for environmental matters are recorded on a site-by-site basis when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated, based on current law and existing technologies. Our accrued liabilities for these environmental matters represent our best estimates related to the investigation and remediation of environmental media such as water, soil, soil vapor, air and structures, as well as related legal fees. These estimates, and related accruals, are reviewed quarterly and updated for progress of investigation and remediation efforts and changes in facts and legal circumstances. Liabilities for these environmental expenditures are recorded on an undiscounted basis. We have estimated and accrued $4 million and $3 million as of March 31, 2022 and December 31, 2021 for environmental matters. It is difficult to estimate the final costs of investigation and remediation due to various factors, including incomplete information regarding particular sites and other potentially responsible parties, uncertainty regarding the extent of investigation or remediation and our share, if any, of liability for such conditions, the selection of alternative remedial approaches, and changes in environmental standards and regulatory requirements. We believe the total amount accrued is reasonable based on existing facts and circumstances. Warranties We warrant numerous products, the terms of which vary widely. In general, we warrant products against defect and specific non-performance. The table below provides changes in the combined current and non-current product warranty accruals over each period:
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Segment Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | Segment Information Our business has three reportable segments: Water Infrastructure, Applied Water and Measurement & Control Solutions. The Water Infrastructure segment focuses on the transportation and treatment of water, offering a range of products including water, wastewater and storm water pumps, treatment equipment, and controls and systems. The Applied Water segment serves many of the primary uses of water and focuses on the residential, commercial and industrial markets. The Applied Water segment's major products include pumps, valves, heat exchangers, controls and dispensing equipment. The Measurement & Control Solutions segment focuses on developing advanced technology solutions that enable intelligent use and conservation of critical water and energy resources as well as analytical instrumentation used in the testing of water. The Measurement & Control Solutions segment's major products include smart metering, networked communications, measurement and control technologies, critical infrastructure technologies, software and services including cloud-based analytics, remote monitoring and data management, leak detection and pressure monitoring solutions and testing equipment. Additionally, we have Regional selling locations, which consist primarily of selling and marketing organizations and related support services, that offer products and services across our reportable segments. Corporate and other consists of corporate office expenses including compensation, benefits, occupancy, depreciation, and other administrative costs, as well as charges related to certain matters, such as environmental matters, that are managed at a corporate level and are not included in the business segments in evaluating performance or allocating resources. The accounting policies of each segment are the same as those described in the Summary of Significant Accounting Policies section of Note 1 in the 2021 Annual Report. The following table contains financial information for each reportable segment:
(a)Depreciation and amortization expense incurred by the Regional selling locations was included in an overall allocation of Regional selling location costs to the segments; however, a certain portion of that expense was not specifically identified to a segment. That expense is captured in this Regional selling location line. (b)Represents capital expenditures incurred by the Regional selling locations not allocated to the segments.
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Background and Basis of Presentation (Policies) |
3 Months Ended |
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Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | 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 statement 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, 2021 ("2021 Annual Report") in preparing these unaudited condensed consolidated financial statements. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes included in our 2021 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 condensed consolidated 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, post-retirement obligations and assets, revenue recognition, income taxes, valuation of intangible assets, goodwill and indefinite-lived intangible impairment testing and contingent liabilities. Actual results could differ from these estimates. The global outbreak of the novel coronavirus ("COVID-19") disease in March 2020, declared a pandemic by the World Health Organization, has created significant global volatility, uncertainty and macroeconomic disruption. The COVID-19 pandemic also has caused increased uncertainty in estimates and assumptions affecting the condensed consolidated financial statements. 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.
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Revenue (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue | The following table illustrates the sources of revenue:
The following table reflects revenue from contracts with customers by application.
*Items in the prior year footnote disclosures for Applied Water were reclassified to conform to the current classification. The following table reflects revenue from contracts with customers by geographical region.
(a)Emerging Markets includes results from the following regions: Eastern Europe, the Middle East and Africa, Latin America and Asia Pacific (excluding Japan, Australia and New Zealand, which are presented in "Other")
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Contract with Customer, Asset and Liability | The table below provides contract assets, contract liabilities, and significant changes in contract assets and liabilities:
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Restructuring Charges (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of restructuring and asset impairment charges | The following table presents the components of restructuring expense and asset impairment charges:
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Restructuring Accruals | The following table displays a roll-forward of the restructuring accruals, presented on our Condensed Consolidated Balance Sheets within "Accrued and other current liabilities" and "Other non-current accrued liabilities", for the three months ended March 31, 2022 and 2021:
(a)Regional selling locations consist primarily of selling and marketing organizations and related support services that incurred restructuring expense that was allocated to the segments. The liabilities associated with restructuring expense were not allocated to the segments.
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Expected Restructuring Costs | The following table presents expected restructuring spend in 2022 and thereafter:
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Earnings Per Share (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basic and diluted net earnings per share | The following is a reconciliation of the shares used in calculating basic and diluted net earnings per share:
(a)Restricted stock unit awards containing rights to non-forfeitable dividends that participate in undistributed earnings with common stockholders are considered participating securities for purposes of computing earnings per share. (b)Incremental shares from stock options, restricted stock units and performance share units are computed by the treasury stock method. The weighted average shares listed below were not included in the computation of diluted earnings per share because to do so would have been anti-dilutive for the periods presented or were otherwise excluded under the treasury stock method. The treasury stock method calculates dilution assuming the exercise of all in-the-money options and vesting of restricted stock units and performance share units, reduced by the repurchase of shares with the proceeds from the assumed exercises and unrecognized compensation expense for outstanding awards. Performance share units will be included in the treasury stock calculation of diluted earnings per share upon achievement of underlying performance or market conditions at the end of the reporting period. See Note 13, "Share-Based Compensation Plans", to the condensed consolidated financial statements for further detail on the performance share units.
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Inventories (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories |
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Goodwill and Other Intangible Assets (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in the carrying value of goodwill by operating segment | Changes in the carrying value of goodwill by reportable segment for the three months ended March 31, 2022 are as follows:
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Other Intangible Assets | Information regarding our other intangible assets is as follows:
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Derivative Financial Instruments (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Effect of derivative financial instruments | The table below presents the effect of our derivative financial instruments on the Condensed Consolidated Income Statements and Statements of Comprehensive Income:
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Fair values of foreign exchange contracts | The fair values of our derivative contracts currently included in our hedging program were as follows:
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Accrued and Other Current Liabilities (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued and Other Current Liabilities | The components of total accrued and other current liabilities are as follows:
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Credit Facilities and Debt (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Credit Facilities and Long-Term Debt | Total debt outstanding is summarized as follows:
(a)The fair value of our Senior Notes was determined using quoted prices in active markets for identical securities, which are considered Level 1 inputs. The fair value of our Senior Notes due 2023 was $564 million and $577 million as of March 31, 2022 and December 31, 2021, respectively. The fair value of our Senior Notes due 2026 was $499 million and $537 million as of March 31, 2022 and December 31, 2021 respectively. The fair value of our Senior Notes due 2028 was $463 million and $497 million as of March 31, 2022 and December 31, 2021, respectively. The fair value of our Senior Notes due 2031 was $454 million and $496 million as of March 31, 2022 and December 31, 2021, respectively. The fair value of our Senior Notes due 2046 was $413 million and $481 million as of March 31, 2022 and December 31, 2021, respectively. (b)The debt issuance costs and unamortized discount are recognized as a reduction in the carrying value of the Senior Notes in the Condensed Consolidated Balance Sheets and are being amortized to interest expense in our Condensed Consolidated Income Statements over the expected remaining terms of the Senior Notes.
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Post-retirement Benefit Plans (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of net periodic benefit cost and other amounts recognized in other comprehensive income | The components of net periodic benefit cost for our defined benefit pension plans are as follows:
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Equity (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Stockholders Equity | The following table shows the changes in stockholders' equity for the three months ended March 31, 2022:
The following table shows the changes in stockholders' equity for the three months ended March 31, 2021:
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Share-Based Compensation Plans (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of restricted stock activity | The following is a summary of restricted stock unit activity for the three months ended March 31, 2022. The fair value of the restricted share unit awards is determined using the closing price of our common stock on date of grant:
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Summary of performance based share grants | The following is a summary of Return on Invested Capital ("ROIC") performance share unit grants for the three months ended March 31, 2022. The fair value of the ROIC performance share units is equal to the closing share price on the date of the grant:
(a) Includes ROIC performance share unit awards forfeited during the period as a result of the final performance condition not being achieved on vest date. TSR Performance Share Unit Grants The following is a summary of our Total Shareholder Return ("TSR") performance share unit grants for the three months ended March 31, 2022:
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Summary of the changes in outstanding stock options | The following is a summary of the changes in outstanding stock options for the three months ended March 31, 2022:
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Stock option valuation assumptions | The following are weighted-average assumptions for 2022 grants:
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Performance-based shares valuation assumptions | The fair value of TSR performance share units was calculated on the date of grant using a Monte Carlo simulation model utilizing several key assumptions, including expected Company and peer company share price volatility, correlation coefficients between peers, the risk-free rate of return, the expected dividend yield and other award design features. The following are weighted-average assumptions for 2022 grants:
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Share-based Payment Arrangement, Outstanding Award, Activity, Excluding Option | The following is a summary of our Revenue performance share unit grants for the three months ended March 31, 2022:
The fair value of the Revenue performance share unit awards is determined using the closing price of our common stock on date of grant. The shares will vest contingent upon the achievement of a pre-set, three-year Revenue target.
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Accumulated Other Comprehensive Income (Loss) (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accumulated Other Comprehensive Income (Loss) | The following table provides the components of accumulated other comprehensive loss for the three months ended March 31, 2022:
The following table provides the components of accumulated other comprehensive loss for the three months ended March 31, 2021:
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Commitments and Contingencies (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in product warranty accrual | We warrant numerous products, the terms of which vary widely. In general, we warrant products against defect and specific non-performance. The table below provides changes in the combined current and non-current product warranty accruals over each period:
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Segment Information (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial information for each reportable segment | Additionally, we have Regional selling locations, which consist primarily of selling and marketing organizations and related support services, that offer products and services across our reportable segments. Corporate and other consists of corporate office expenses including compensation, benefits, occupancy, depreciation, and other administrative costs, as well as charges related to certain matters, such as environmental matters, that are managed at a corporate level and are not included in the business segments in evaluating performance or allocating resources. The accounting policies of each segment are the same as those described in the Summary of Significant Accounting Policies section of Note 1 in the 2021 Annual Report. The following table contains financial information for each reportable segment:
(a)Depreciation and amortization expense incurred by the Regional selling locations was included in an overall allocation of Regional selling location costs to the segments; however, a certain portion of that expense was not specifically identified to a segment. That expense is captured in this Regional selling location line. (b)Represents capital expenditures incurred by the Regional selling locations not allocated to the segments.
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Background and Basis of Presentation (Details) |
3 Months Ended |
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Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Number of operating segment | 3 |
Revenue (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
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Change in Contract with Customer, Asset [Abstract] | ||
Beginning balance | $ 125 | $ 117 |
Additions, net | 34 | 43 |
Billings transferred to accounts receivable | (39) | (50) |
Other | (2) | (1) |
Ending balance | 118 | 109 |
Change in Contract with Customer, Liability [Abstract] | ||
Beginning balance | 164 | 166 |
Additions, net | 62 | 67 |
Revenue recognized from opening balance | (50) | (71) |
Other | (1) | 0 |
Ending balance | $ 175 | $ 162 |
Revenue (Narrative) (Details) $ in Millions |
Mar. 31, 2022
USD ($)
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Revenue from Contract with Customer [Abstract] | |
Remaining performance obligation | $ 379 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-04-01 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |
Expected timing of recognition | 60 months |
Restructuring Charges (Textuals) (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | |
---|---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
Dec. 31, 2021 |
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Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | $ 0 | $ 5 | |
Asset impairment | 0 | 1 | |
Asset impairment charges | 0 | 1 | |
Measurement & Control Solutions | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | 0 | 1 | |
2020 Plan | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring cost incurred | 0 | $ 3 | |
Operating Segments | 2020 Plan | Measurement & Control Solutions | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring cost incurred | 0 | $ 0 | |
Restructuring, COVID-19 | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | $ 4 | ||
Maximum | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring cost incurred | $ 1 |
Restructuring Charges (Restructuring Charges) (Details) - USD ($) $ in Millions |
3 Months Ended | |
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Mar. 31, 2022 |
Mar. 31, 2021 |
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Restructuring Cost and Impairment Charge | ||
Severance and other charges | $ 0 | $ 4 |
Asset impairment | 0 | 1 |
Restructuring charges | 0 | 5 |
Asset impairment charges | 0 | 1 |
Total restructuring and asset impairment charges | 0 | 6 |
Water Infrastructure | ||
Restructuring Cost and Impairment Charge | ||
Restructuring charges | 0 | 4 |
Applied Water | ||
Restructuring Cost and Impairment Charge | ||
Restructuring charges | 0 | 1 |
Measurement & Control Solutions | ||
Restructuring Cost and Impairment Charge | ||
Restructuring charges | $ 0 | $ 1 |
Restructuring Charges (Estimated Restructuring Costs) (Details) - 2020 Plan - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended |
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Mar. 31, 2022 |
Dec. 31, 2021 |
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Restructuring Cost and Reserve [Line Items] | ||
Total expected costs | $ 5 | |
Restructuring costs incurred during period | $ 0 | 3 |
Total expected costs remaining | 2 | |
Operating Segments | Water Infrastructure | ||
Restructuring Cost and Reserve [Line Items] | ||
Total expected costs | 4 | |
Restructuring costs incurred during period | 0 | 3 |
Total expected costs remaining | 1 | |
Operating Segments | Applied Water | ||
Restructuring Cost and Reserve [Line Items] | ||
Total expected costs | 0 | |
Restructuring costs incurred during period | 0 | 0 |
Total expected costs remaining | 0 | |
Operating Segments | Measurement & Control Solutions | ||
Restructuring Cost and Reserve [Line Items] | ||
Total expected costs | 1 | |
Restructuring costs incurred during period | 0 | 0 |
Total expected costs remaining | 1 | |
Corporate | ||
Restructuring Cost and Reserve [Line Items] | ||
Total expected costs | 0 | |
Restructuring costs incurred during period | $ 0 | 0 |
Total expected costs remaining | $ 0 |
Income Taxes (Textuals) (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | |
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Mar. 31, 2022 |
Mar. 31, 2021 |
Dec. 31, 2021 |
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Income Tax Disclosure [Abstract] | |||
Income tax provision | $ 16 | $ 27 | |
Effective tax rate | 16.40% | 23.30% | |
Assessment for tax, penalties and interest | $ 80 |
Earnings Per Share (Calculations for EPS) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions |
3 Months Ended | |||||
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Mar. 31, 2022 |
Mar. 31, 2021 |
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Basic and diluted net earnings per share: | ||||||
Net income attributable to Xylem (in usd) | $ 82 | $ 87 | ||||
Shares | ||||||
Weighted average common shares outstanding | 180,205 | 180,252 | ||||
Add: Participating securities | [1] | 26 | 15 | |||
Weighted average common shares outstanding — Basic | 180,231 | 180,267 | ||||
Plus incremental shares from assumed conversions: | ||||||
Weighted average common shares outstanding — Diluted | 181,021 | 181,474 | ||||
Basic earnings per share (usd per share) | $ 0.45 | $ 0.49 | ||||
Diluted earnings per share (usd per share) | $ 0.45 | $ 0.48 | ||||
Stock Options | ||||||
Plus incremental shares from assumed conversions: | ||||||
Dilutive effect of common shares | [2] | 587 | 794 | |||
Restricted Stock | ||||||
Plus incremental shares from assumed conversions: | ||||||
Dilutive effect of common shares | [2] | 203 | 413 | |||
|
Earnings Per Share (Summary of Antidilutive Securities) (Details) - shares shares in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Stock Options | ||
Incremental shares from stock options and restricted stock: | ||
Antidilutive securities (in shares) | 1,335 | 1,249 |
Restricted Stock | ||
Incremental shares from stock options and restricted stock: | ||
Antidilutive securities (in shares) | 330 | 285 |
Performance Based Shares | ||
Incremental shares from stock options and restricted stock: | ||
Antidilutive securities (in shares) | 233 | 352 |
Inventories (Details) - USD ($) $ in Millions |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Inventories | ||
Finished goods | $ 282 | $ 236 |
Work in process | 71 | 58 |
Raw materials | 451 | 406 |
Total inventories | $ 804 | $ 700 |
Goodwill and Other Intangible Assets (Goodwill Rollforward) (Details) $ in Millions |
3 Months Ended |
---|---|
Mar. 31, 2022
USD ($)
| |
Changes in the carrying value of goodwill by operating segment | |
Balance as of January 1, 2022 | $ 2,792 |
Foreign currency and other | (10) |
Balance as of March 31, 2022 | 2,782 |
Water Infrastructure | |
Changes in the carrying value of goodwill by operating segment | |
Balance as of January 1, 2022 | 656 |
Foreign currency and other | (3) |
Balance as of March 31, 2022 | 653 |
Applied Water | |
Changes in the carrying value of goodwill by operating segment | |
Balance as of January 1, 2022 | 515 |
Foreign currency and other | (2) |
Balance as of March 31, 2022 | 513 |
Measurement & Control Solutions | |
Changes in the carrying value of goodwill by operating segment | |
Balance as of January 1, 2022 | 1,621 |
Foreign currency and other | (5) |
Balance as of March 31, 2022 | $ 1,616 |
Goodwill and Other Intangible Assets (Summary of Intangible Assets) (Details) - USD ($) $ in Millions |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
Dec. 31, 2021 |
|
Goodwill and Other Intangible Assets | |||
Accumulated Amortization | $ (1,019) | $ (991) | |
Intangible Assets Gross, Carrying Amount | 2,021 | 2,007 | |
Intangible Assets, Net Intangibles | 1,002 | 1,016 | |
Amortization | 30 | $ 32 | |
Customer and distributor relationships | |||
Goodwill and Other Intangible Assets | |||
Carrying Amount | 927 | 929 | |
Accumulated Amortization | (468) | (456) | |
Net Intangibles | 459 | 473 | |
Proprietary technology and patents | |||
Goodwill and Other Intangible Assets | |||
Carrying Amount | 201 | 201 | |
Accumulated Amortization | (144) | (142) | |
Net Intangibles | 57 | 59 | |
Trademarks | |||
Goodwill and Other Intangible Assets | |||
Carrying Amount | 141 | 141 | |
Accumulated Amortization | (75) | (72) | |
Net Intangibles | 66 | 69 | |
Software | |||
Goodwill and Other Intangible Assets | |||
Carrying Amount | 564 | 548 | |
Accumulated Amortization | (314) | (303) | |
Net Intangibles | 250 | 245 | |
Other | |||
Goodwill and Other Intangible Assets | |||
Carrying Amount | 21 | 21 | |
Accumulated Amortization | (18) | (18) | |
Net Intangibles | 3 | 3 | |
Indefinite-lived intangibles | |||
Goodwill and Other Intangible Assets | |||
Accumulated Amortization | 0 | 0 | |
Indefinite-lived intangibles | $ 167 | $ 167 |
Goodwill and Other Intangible Assets (Details Textual) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Finite-Lived Intangible Assets | ||
Amortization expense related to finite-lived intangible assets | $ 30 | $ 32 |
Derivative Financial Instruments (Effect of Deriative Instruments on Income Statement and Statement of Comprehensive Income) (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Derivative Financial Instruments | ||
Amount of gain (loss) recognized in OCI | $ 6 | $ 11 |
Amount of gain reclassified from OCI into revenue | (1,272) | (1,256) |
Reclassification out of Accumulated Other Comprehensive Income | Foreign Exchange Contract | ||
Derivative Financial Instruments | ||
Amount of gain reclassified from OCI into revenue | 2 | (2) |
Amount of (gain) loss reclassified from OCI into cost of revenue | 0 | (1) |
Cash Flow Hedging [Member] | Foreign Exchange Contract | ||
Derivative Financial Instruments | ||
Amount of gain (loss) recognized in OCI | (6) | (11) |
Cash Flow Hedging [Member] | Cross Currency Swaps | ||
Derivative Financial Instruments | ||
Amount of gain (loss) recognized in OCI | 1 | 30 |
Cash Flow Hedging [Member] | Foreign Currency Denominated Debt | ||
Derivative Financial Instruments | ||
Amount of gain (loss) recognized in OCI | 8 | 26 |
Interest Expense | Cross Currency Swaps | ||
Derivative Financial Instruments | ||
Amount of gain (loss) recognized in OCI | $ 6 | $ 5 |
Derivative Financial Instruments (Balance Sheet Location of Derivative Instruments) (Details) - Derivatives designated as hedging instruments - USD ($) $ in Millions |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Other current assets | ||
Derivatives, Fair Value | ||
Assets | $ 1 | $ 0 |
Other non-current assets | ||
Derivatives, Fair Value | ||
Assets | 5 | 8 |
Other current liabilities | ||
Derivatives, Fair Value | ||
Liabilities | (6) | (1) |
Other non-current accrued liabilities | ||
Derivatives, Fair Value | ||
Liabilities | $ (22) | $ (26) |
Derivative Financial Instruments (Details Textual) $ in Millions |
Mar. 31, 2022
USD ($)
|
Dec. 31, 2021
USD ($)
|
Mar. 11, 2016
USD ($)
|
Mar. 11, 2016
EUR (€)
|
---|---|---|---|---|
Derivative [Line Items] | ||||
Net losses expected to be reclassified in next 12 months | $ 7 | |||
Foreign Exchange Contract | ||||
Derivative [Line Items] | ||||
Notional amount | 457 | $ 301 | ||
Derivatives designated as hedging instruments | Sell USD Buy EUR | ||||
Derivative [Line Items] | ||||
Notional amount | 186 | 130 | ||
Derivatives designated as hedging instruments | Buy KR Sell EUR | ||||
Derivative [Line Items] | ||||
Notional amount | 140 | 88 | ||
Derivatives designated as hedging instruments | Sell GBP Buy EUR | ||||
Derivative [Line Items] | ||||
Notional amount | 49 | 31 | ||
Derivatives designated as hedging instruments | Sell CDN Buy EUR | ||||
Derivative [Line Items] | ||||
Notional amount | 23 | 14 | ||
Derivatives designated as hedging instruments | Buy USD Sell CDN | ||||
Derivative [Line Items] | ||||
Notional amount | 22 | 14 | ||
Derivatives designated as hedging instruments | Sell ASD Buy Euro | ||||
Derivative [Line Items] | ||||
Notional amount | 20 | 13 | ||
Derivatives designated as hedging instruments | Buy PLN Sell EUR | ||||
Derivative [Line Items] | ||||
Notional amount | 17 | 11 | ||
Derivatives designated as hedging instruments | Cross Currency Swaps | ||||
Derivative [Line Items] | ||||
Notional amount | 1,135 | 1,151 | ||
Long-term debt | Derivatives designated as hedging instruments | ||||
Derivative [Line Items] | ||||
Net Investment Hedges | 556 | 563 | ||
Senior Notes Due 2023, 2.250% | ||||
Derivative [Line Items] | ||||
Long-term Debt, Fair Value | $ 564 | $ 577 | ||
Senior Notes Due 2023, 2.250% | Senior Notes | ||||
Derivative [Line Items] | ||||
Interest on notes due | 2.25% | 2.25% | ||
Face amount | $ 500 | € 500,000,000 |
Accrued and Other Current Liabilities (Details) - USD ($) $ in Millions |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Accrued and Other Current Liabilities | ||
Compensation and other employee-benefits | $ 216 | $ 273 |
Customer-related liabilities | 197 | 186 |
Accrued taxes | 89 | 86 |
Lease liabilities | 73 | 69 |
Accrued warranty costs | 38 | 40 |
Other accrued liabilities | 100 | 98 |
Total accrued and other current liabilities | $ 713 | $ 752 |
Credit Facilities and Debt (Summary of Debt Outstanding) (Details) - USD ($) $ in Millions |
Mar. 31, 2022 |
Dec. 31, 2021 |
||||
---|---|---|---|---|---|---|
Credit Facilities and Long-Term Debt : | ||||||
Debt issuance costs and unamortized discount | [1] | $ (24) | $ (24) | |||
Total debt | 2,433 | 2,440 | ||||
Less: short-term borrowings and current maturities of long-term debt | 555 | 0 | ||||
Long-term debt | 1,878 | 2,440 | ||||
Senior Notes Due 2023, 2.250% | ||||||
Credit Facilities and Long-Term Debt : | ||||||
Senior Notes Due | [2] | 557 | 564 | |||
Long-term Debt, Fair Value | 564 | 577 | ||||
Senior Notes due 2026 | ||||||
Credit Facilities and Long-Term Debt : | ||||||
Senior Notes Due | [2] | 500 | 500 | |||
Long-term Debt, Fair Value | 499 | 537 | ||||
Senior Notes Due Twenty Twenty Eight | ||||||
Credit Facilities and Long-Term Debt : | ||||||
Senior Notes Due | 500 | 500 | ||||
Long-term Debt, Fair Value | 463 | 497 | ||||
Senior Notes Due Twenty Thirty One | ||||||
Credit Facilities and Long-Term Debt : | ||||||
Senior Notes Due | 500 | 500 | ||||
Long-term Debt, Fair Value | 454 | 496 | ||||
Senior Notes due 2046 | ||||||
Credit Facilities and Long-Term Debt : | ||||||
Senior Notes Due | [2] | 400 | 400 | |||
Long-term Debt, Fair Value | $ 413 | $ 481 | ||||
|
Credit Facilities and Debt (Textuals) (Details) |
3 Months Ended | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 26, 2020
USD ($)
|
Sep. 20, 2011 |
Mar. 31, 2022
USD ($)
|
Dec. 31, 2021
USD ($)
|
Jun. 03, 2019
EUR (€)
|
Mar. 05, 2019
USD ($)
|
Jan. 26, 2018
USD ($)
|
Oct. 11, 2016
USD ($)
|
Mar. 11, 2016
USD ($)
|
Mar. 11, 2016
EUR (€)
|
|||
Senior Notes | ||||||||||||
Debt Instrument | ||||||||||||
Redemption price percentage | 101.00% | |||||||||||
Line of Credit [Member] | ||||||||||||
Debt Instrument | ||||||||||||
Face amount | $ 557,000,000 | |||||||||||
Senior Notes Due 2023, 2.250% | ||||||||||||
Debt Instrument | ||||||||||||
Fair value of senior notes due | $ 564,000,000 | $ 577,000,000 | ||||||||||
Senior Notes Due | [1] | 557,000,000 | 564,000,000 | |||||||||
Senior Notes Due 2023, 2.250% | Senior Notes | ||||||||||||
Debt Instrument | ||||||||||||
Interest rate | 2.25% | 2.25% | ||||||||||
Face amount | $ 500,000,000 | € 500,000,000 | ||||||||||
Senior Notes due 2026 | ||||||||||||
Debt Instrument | ||||||||||||
Fair value of senior notes due | 499,000,000 | 537,000,000 | ||||||||||
Interest rate | 3.25% | |||||||||||
Senior Notes Due | [1] | 500,000,000 | 500,000,000 | |||||||||
Face amount | $ 500,000,000 | |||||||||||
Senior Notes due 2046 | ||||||||||||
Debt Instrument | ||||||||||||
Fair value of senior notes due | 413,000,000 | 481,000,000 | ||||||||||
Interest rate | 4.375% | |||||||||||
Senior Notes Due | [1] | $ 400,000,000 | 400,000,000 | |||||||||
Face amount | $ 400,000,000 | |||||||||||
2019 Five-Year Revolving Credit Facility | Revolving Credit Facility | ||||||||||||
Debt Instrument | ||||||||||||
Term of debt | 5 years | |||||||||||
Debt instrument aggregate principal amount | $ 800,000,000 | |||||||||||
Permitted increases in Credit Facility borrowing base | 200,000,000 | |||||||||||
Maximum permitted increases in Credit Facility borrowing base | $ 1,000,000,000 | |||||||||||
US Dollar Commercial Paper Program | ||||||||||||
Debt Instrument | ||||||||||||
Face amount | $ 600,000,000 | |||||||||||
Euro Commercial Paper Program | ||||||||||||
Debt Instrument | ||||||||||||
Face amount | € | € 500,000,000 | |||||||||||
Senior Notes Due Twenty Twenty Eight | ||||||||||||
Debt Instrument | ||||||||||||
Fair value of senior notes due | 463,000,000 | 497,000,000 | ||||||||||
Interest rate | 1.95% | |||||||||||
Senior Notes Due | 500,000,000 | 500,000,000 | ||||||||||
Face amount | $ 500,000,000 | |||||||||||
Senior Notes Due Twenty Thirty One | ||||||||||||
Debt Instrument | ||||||||||||
Fair value of senior notes due | 454,000,000 | 496,000,000 | ||||||||||
Interest rate | 2.25% | |||||||||||
Senior Notes Due | $ 500,000,000 | $ 500,000,000 | ||||||||||
Face amount | $ 500,000,000 | |||||||||||
Green Bond | Senior Notes | ||||||||||||
Debt Instrument | ||||||||||||
Redemption price percentage | 101.00% | |||||||||||
|
Post-retirement Benefit Plans (Summary of Net Periodic Benefit Cost) (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Net periodic benefit cost: | ||
Net periodic benefit cost | $ 7 | $ 8 |
Domestic defined benefit pension plans | ||
Net periodic benefit cost: | ||
Service cost | 1 | 1 |
Interest cost | 1 | 1 |
Expected return on plan assets | (2) | (2) |
Amortization of net actuarial loss | 1 | 1 |
Net periodic benefit cost | 1 | 1 |
International defined benefit pension plans | ||
Net periodic benefit cost: | ||
Service cost | 3 | 4 |
Interest cost | 4 | 3 |
Expected return on plan assets | (4) | (4) |
Amortization of net actuarial loss | 3 | 4 |
Net periodic benefit cost | $ 6 | $ 7 |
Post-retirement Benefit Plans (Textuals) (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block | ||
Employer contribution to defined benefit plan | $ 5 | $ 6 |
Minimum | ||
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block | ||
Additional contributions | 11 | |
Maximum | ||
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block | ||
Other postretirement benefit expense | 1 | 1 |
Amortization of net actuarial loss | 1 | 1 |
Additional contributions | 19 | |
Foreign Plan [Member] | ||
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block | ||
Amortization of net actuarial loss | $ 3 | $ 4 |
Equity - Summary of Shareholders' Equity (Details) - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2022 |
Sep. 30, 2021 |
Mar. 31, 2021 |
|
Dividends declared per share (usd per share) | $ 0.30 | $ 0.28 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Beginning balance | $ 3,226 | $ 2,976 | |
Other | (1) | ||
Net income | 82 | 87 | |
Other comprehensive income (loss), net | (6) | (13) | |
Dividends declared | (55) | (50) | |
Stock incentive plan activity | 4 | 5 | |
Repurchase of common stock | (45) | (60) | |
Ending balance | 3,206 | 2,946 | |
Common Stock | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Beginning balance | 2 | 2 | |
Ending balance | 2 | 2 | |
Capital in Excess of Par Value | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Beginning balance | 2,089 | 2,037 | |
Stock incentive plan activity | 10 | 12 | |
Ending balance | 2,099 | 2,049 | |
Retained Earnings | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Beginning balance | 2,154 | 1,930 | |
Other | 0 | ||
Net income | 82 | 87 | |
Dividends declared | (55) | (50) | |
Ending balance | 2,181 | 1,967 | |
Accumulated Other Comprehensive Loss | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Beginning balance | (371) | (413) | |
Other comprehensive income (loss), net | (6) | (13) | |
Ending balance | (377) | (426) | |
Treasury Stock | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Beginning balance | (656) | (588) | |
Stock incentive plan activity | (6) | (7) | |
Repurchase of common stock | (45) | (60) | |
Ending balance | (707) | (655) | |
Non-Controlling Interest | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Beginning balance | 8 | 8 | |
Other | (1) | ||
Other comprehensive income (loss), net | 0 | ||
Ending balance | $ 8 | $ 9 |
Share-Based Compensation Plans (Textuals) (Details) - USD ($) shares in Thousands, $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Share-based Compensation Arrangement by Share-based Payment Award | ||
Share-based compensation | $ 9.0 | $ 9.0 |
Shares Awarded (in shares) | 306 | |
Stock-Based Compensation Plans (Textual) [Abstract] | ||
Proceeds from exercise of employee stock options | $ 1.0 | $ 3.0 |
Total intrinsic value of options exercised | 0.6 | |
Stock Options | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
Unamortized compensation expense | $ 10.0 | |
Weighted average period | 2 years 2 months 12 days | |
Restricted Stock | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
Unamortized compensation expense | $ 38.0 | |
Weighted average period | 2 years 3 months 18 days | |
Shares Awarded (in shares) | 292 | |
Performance Based Shares | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
Unamortized compensation expense | $ 20.0 | |
Weighted average period | 2 years 7 months 6 days |
Share-Based Compensation Plans (Summary of Stock Options Grant) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions |
3 Months Ended | 12 Months Ended |
---|---|---|
Mar. 31, 2022 |
Dec. 31, 2021 |
|
Summary of the changes in outstanding stock options | ||
Outstanding, beginning of period (in shares) | 1,827 | |
Granted (in shares) | 306 | |
Exercised (in shares) | (12) | |
Forfeited (in shares) | (7) | |
Outstanding, end of period (in shares) | 2,114 | 1,827 |
Options exercisable, ending of period (in shares) | 1,425 | |
Vested and expected, end of period (in shares) | 2,022 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | ||
Outstanding, beginning of period (in usd per share) | $ 64.12 | |
Granted (in usd per share) | 86.76 | |
Exercised (in usd per share) | 42.35 | |
Forfeited (in usd per share) | 88.93 | |
Outstanding, end of period (in usd per share) | 67.44 | $ 64.12 |
Options exercisable, end of period (in usd per share) | 58.69 | |
Vested and expected, end of period (in usd per share) | $ 66.52 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Weighted Average Remaining Contractual Term [Roll Forward] | ||
Outstanding, weighted average remaining contractual term | 6 years 6 months | 6 years 1 month 6 days |
Aggregate intrinsic value, outstanding | $ 44 | $ 102 |
Options exercisable, end of period | 5 years 2 months 12 days | |
Aggregate intrinsic value, exercisable | $ 41 | |
Vested and expected to vest, end of period | 6 years 3 months 18 days | |
Aggregate intrinsic value, vested and expected to vest | $ 44 |
Share-Based Compensation Plans (Stock Option Fair Value Assumptions) (Details) - Stock Options |
3 Months Ended |
---|---|
Mar. 31, 2022
$ / shares
| |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Volatility | 26.20% |
Risk-free interest rate | 1.59% |
Dividend yield | 1.38% |
Expected term (in years) | 5 years 7 months 6 days |
Weighted-average fair value / share (in usd per share) | $ 19.86 |
Share-Based Compensation Plans (Summary of Restricted Stock Unit Grants) (Details) shares in Thousands |
3 Months Ended |
---|---|
Mar. 31, 2022
$ / shares
shares
| |
Restricted Stock | |
Shares | |
Outstanding, beginning of period (in shares) | shares | 484 |
Granted (in shares) | shares | 292 |
Vested (in shares) | shares | (179) |
Forfeited (in shares) | shares | (12) |
Outstanding, end of period (in shares) | shares | 585 |
Weighted Average Grant Date Fair Value Per Share | |
Outstanding, beginning of period (in usd per share) | $ / shares | $ 88.47 |
Granted (in usd per share) | $ / shares | 86.76 |
Vested (in usd per share) | $ / shares | 85.77 |
Forfeited (in usd per share) | $ / shares | 90.74 |
Outstanding, end of period (in usd per share) | $ / shares | $ 88.41 |
REV Performance Shares | |
Shares | |
Outstanding, beginning of period (in shares) | shares | 0 |
Granted (in shares) | shares | 35 |
Outstanding, end of period (in shares) | shares | 35 |
Weighted Average Grant Date Fair Value Per Share | |
Outstanding, beginning of period (in usd per share) | $ / shares | $ 0 |
Granted (in usd per share) | $ / shares | 86.76 |
Outstanding, end of period (in usd per share) | $ / shares | $ 86.76 |
Share-Based Compensation Plans Share-Based Compensation Plans (Summary of ROIC Performance Share Unit Grants) (Details) - Return on Invested Capital Performance-Based Shares [Member] - Performance Based Shares shares in Thousands |
3 Months Ended |
---|---|
Mar. 31, 2022
$ / shares
shares
| |
Summary of performance share activity | |
Outstanding, beginning of period (in shares) | shares | 177 |
Granted (in shares) | shares | 35 |
Forfeited (in shares) | shares | (55) |
Outstanding, end of period (in shares) | shares | 157 |
Weighted Average Grant Date Fair Value Per Share | |
Outstanding, beginning of period (in usd per share) | $ / shares | $ 84.84 |
Granted (in usd per share) | $ / shares | 86.76 |
Forfeited (in usd per share) | $ / shares | 74.54 |
Outstanding, end of period (in usd per share) | $ / shares | $ 88.90 |
Share-Based Compensation Plans (Summary of Performance-Based Share Grants) (Details) - Total Shareholder Return Performance-Based Shares - Performance Based Shares shares in Thousands |
3 Months Ended |
---|---|
Mar. 31, 2022
$ / shares
shares
| |
Summary of performance share activity | |
Outstanding, beginning of period (in shares) | shares | 177 |
Granted (in shares) | shares | 70 |
Adjustment for Condition Achieved (in shares) | shares | 22 |
Vested (in shares) | shares | (75) |
Forfeited (in shares) | shares | (2) |
Outstanding, end of period (in shares) | shares | 192 |
Weighted Average Grant Date Fair Value Per Share | |
Outstanding, beginning of period (in usd per share) | $ / shares | $ 102.96 |
Granted (in usd per share) | $ / shares | 71.14 |
Adjustment for Condition Achieved (in usd per share) | $ / shares | 89.62 |
Vested (in usd per share) | $ / shares | 89.62 |
Forfeited (in usd per share) | $ / shares | 85.01 |
Outstanding, end of period (in usd per share) | $ / shares | $ 100.73 |
Share-Based Compensation Plans (TSR Performance-Based Shares Fair Value Assumptions) (Details) - Total Shareholder Return Performance-Based Shares - Performance Based Shares shares in Thousands |
3 Months Ended |
---|---|
Mar. 31, 2022
$ / shares
shares
| |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period | shares | (2) |
Volatility | 33.30% |
Risk-free interest rate | 1.44% |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeitures, Weighted Average Grant Date Fair Value | $ / shares | $ 85.01 |
Share-Based Compensation Plans - Summary of REV Performance Share Unit Grants (Details) - REV Performance Shares shares in Thousands |
3 Months Ended |
---|---|
Mar. 31, 2022
$ / shares
shares
| |
Shares | |
Outstanding, beginning of period (in shares) | shares | 0 |
Shares Awarded (in shares) | shares | 35 |
Outstanding, end of period (in shares) | shares | 35 |
Weighted Average Grant Date Fair Value Per Share | |
Outstanding, beginning of period (in usd per share) | $ / shares | $ 0 |
Granted (in usd per share) | $ / shares | 86.76 |
Outstanding, end of period (in usd per share) | $ / shares | $ 86.76 |
Capital Stock (Textuals) (Details) - USD ($) $ in Millions |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
Aug. 24, 2015 |
|
Equity, Class of Treasury Stock [Line Items] | |||
Shares repurchased (less than $1 million) | $ 45 | $ 60 | |
Share Repurchase Programs | |||
Equity, Class of Treasury Stock [Line Items] | |||
Shares repurchased (in shares - less than 0.1 million) | 600,000 | 700,000 | |
Shares repurchased (less than $1 million) | $ 51 | $ 67 | |
2015 Stock Repurchase Program | |||
Equity, Class of Treasury Stock [Line Items] | |||
Stock repurchase program, authorized amount | $ 500 | ||
Shares repurchased (in shares - less than 0.1 million) | 500,000 | 600,000 | |
Shares repurchased (less than $1 million) | $ 45 | $ 60 | |
Remaining authorized amount of repurchase | $ 182 | ||
Settlement of Employee Tax Withholding Obligations | |||
Equity, Class of Treasury Stock [Line Items] | |||
Shares repurchased (in shares - less than 0.1 million) | 100,000 | 100,000 | |
Shares repurchased (less than $1 million) | $ 6 | $ 7 |
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions |
3 Months Ended | |||
---|---|---|---|---|
Mar. 31, 2022 |
Sep. 30, 2021 |
Mar. 31, 2021 |
Sep. 30, 2020 |
|
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Beginning balance | $ (371) | |||
Foreign currency translation adjustment | (3) | $ 10 | ||
Ending balance | (377) | |||
Foreign Currency Translation | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Beginning balance | (101) | (86) | ||
Foreign currency translation adjustment | $ (3) | $ 10 | ||
Tax on foreign currency translation adjustment | (2) | (14) | ||
Ending balance | (106) | (90) | ||
Post-retirement Benefit Plans | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Beginning balance | (268) | (330) | ||
Income tax impact on amortization of post-retirement benefit plan items | (1) | (1) | ||
Ending balance | (265) | (326) | ||
Derivative Instruments | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Beginning balance | (2) | 3 | ||
Unrealized gain (loss) on derivative hedge agreements | (6) | (11) | ||
Income tax benefit on unrealized loss on derivative hedge agreements | 1 | |||
Ending balance | (6) | (10) | ||
Total | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Beginning balance | $ (371) | $ (413) | ||
Foreign currency translation adjustment | (3) | 10 | ||
Tax on foreign currency translation adjustment | (2) | (14) | ||
Income tax impact on amortization of post-retirement benefit plan items | (1) | (1) | ||
Unrealized gain (loss) on derivative hedge agreements | (6) | (11) | ||
Income tax benefit on unrealized loss on derivative hedge agreements | 1 | |||
Ending balance | (377) | (426) | ||
Other non-operating income | Post-retirement Benefit Plans | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Amortization of prior service cost and net actuarial loss on post-retirement benefit plans into other non-operating income (expense), net | 4 | 5 | ||
Other non-operating income | Total | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Amortization of prior service cost and net actuarial loss on post-retirement benefit plans into other non-operating income (expense), net | 4 | 5 | ||
Revenue | Derivative Instruments | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Reclassification of unrealized gain (loss) on foreign exchange agreements | 2 | (2) | ||
Revenue | Total | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Reclassification of unrealized gain (loss) on foreign exchange agreements | $ 2 | (2) | ||
Cost of Revenue | Derivative Instruments | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Reclassification of unrealized gain (loss) on foreign exchange agreements | (1) | |||
Cost of Revenue | Total | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Reclassification of unrealized gain (loss) on foreign exchange agreements | $ (1) |
Commitments and Contingencies (Summary of Warranties) (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Warranties | ||
Warranty accrual – January 1 | $ 57 | $ 65 |
Net charges for product warranties in the period | 5 | 8 |
Settlement of warranty claims | (6) | (9) |
Foreign currency and other | 0 | 2 |
Warranty accrual - March 31 | $ 56 | $ 62 |
Commitments and Contingencies (Details Textual) - USD ($) $ in Millions |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Commitments and Contingencies Disclosure [Abstract] | ||
Loss Contingency Accrual | $ 4 | |
Guarantee amounts | $ 431 | 415 |
Estimated environmental matters | $ 4 | $ 4 |
Segment Information (Summary of Operations by Segment) (Details) - USD ($) $ in Millions |
3 Months Ended | |||||
---|---|---|---|---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|||||
Financial information for each reportable segment | ||||||
Revenues | $ 1,272 | $ 1,256 | ||||
Operating income | 111 | 133 | ||||
Interest Expense | 13 | 21 | ||||
Other Nonoperating Income (Expense) | (1) | 2 | ||||
Gain from sale of business | 1 | 0 | ||||
Income before taxes | 98 | 114 | ||||
Depreciation and amortization | 58 | 62 | ||||
Capital expenditures | 49 | 39 | ||||
Water Infrastructure | ||||||
Financial information for each reportable segment | ||||||
Revenues | 533 | 509 | ||||
Operating income | 74 | 71 | ||||
Depreciation and amortization | 13 | 13 | ||||
Capital expenditures | 17 | 11 | ||||
Applied Water | ||||||
Financial information for each reportable segment | ||||||
Revenues | 425 | 393 | ||||
Operating income | 59 | 66 | ||||
Depreciation and amortization | 5 | 6 | ||||
Capital expenditures | 4 | 4 | ||||
Measurement & Control Solutions | ||||||
Financial information for each reportable segment | ||||||
Revenues | 314 | 354 | ||||
Operating income | (10) | 9 | ||||
Depreciation and amortization | 34 | 36 | ||||
Capital expenditures | 21 | 21 | ||||
Regional Selling Locations | ||||||
Financial information for each reportable segment | ||||||
Depreciation and amortization | [1] | 4 | 5 | |||
Capital expenditures | [2] | 5 | 3 | |||
Corporate and other | ||||||
Financial information for each reportable segment | ||||||
Operating income | (12) | (13) | ||||
Depreciation and amortization | 2 | 2 | ||||
Capital expenditures | $ 2 | $ 0 | ||||
|
Segment Information (Textuals) (Details) |
3 Months Ended |
---|---|
Mar. 31, 2022
Segment
| |
Segment Information (Textual) [Abstract] | |
Number of reportable segments | 3 |
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