Attached files
| file | filename |
|---|---|
| EX-99.1 - NEWS RELEASE - Xylem Inc. | d345872dex991.htm |
| 8-K - FORM 8-K - Xylem Inc. | d345872d8k.htm |
 Q1
2012 Earnings Release May 3, 2012
Exhibit 99.2 |
 Forward
Looking Statements 2
This document contains information that may constitute “forward-looking statements.”
Forward-looking statements by their nature address matters that are, to different degrees,
uncertain. Generally, the words “anticipate,” “estimate,” “expect,” “project,”
“intend,” “plan,” “believe,” “target” and similar expressions
identify forward-looking statements, which generally are not historical in nature. However,
the absence of these words or similar expressions does not mean that a statement is not forward-looking.
These forward-looking statements include, but are not limited to, statements about the separation
of Xylem Inc. (the “Company”) from ITT Corporation, the terms and the effect of the
separation, the nature and impact of the separation, capitalization of the Company, future
strategic plans and other statements that describe the Company’s business strategy, outlook, objectives, plans
intentions or goals, and any discussion of future operating or financial performance. All statements
that address operating performance, events or developments that we expect or anticipate will
occur in the future — including statements relating to orders, revenues, operating margins
and earnings per share growth, and statements expressing general views about future operating
results — are forward-looking statements. Caution should be taken not to place undue reliance on any such forward-looking statements
because they involve risks, uncertainties and other factors that could cause actual results to
differ materially from those expressed or implied in, or reasonably inferred from, such
statements. The Company undertakes no obligation to publicly update or revise any forward-
looking statements, whether as a result of new information, future events or otherwise, except as
required by law. In addition, forward-looking statements are subject to certain risks and
uncertainties that could cause actual results to differ materially from the Company’s
historical experience and our present expectations or projections. These risks and uncertainties include, but are
not limited to, those set forth in Item 1A of our Annual Report on Form 10-K, and those described
from time to time in subsequent reports filed with the Securities and Exchange Commission. |
 Q1’12 Financial Performance Summary
3
* See Appendix for Non-GAAP Reconciliations
Orders
> $1B
Record Milestone; Book to Bill 1.09
Revenue
$925M
+6% (Constant Currency Basis)*
Gross Margin
39.2%
+130 bps
Operating Margin *
11.2%
12.3% ex. Stand-Alone Costs; +70 bps
EPS *
$0.36
+9% Normalized Growth
Free Cash Flow *
$41M
61% Conversion …
Typical Seasonality
Solid Q1 Performance … Confident in Ability to Deliver a Strong 2012
|
 Q1’12 Performance Summary
4
Making Significant Progress on Key Focus Priorities
Advancing Our Strategic Position
•
YSI Acquisition …
EPS Accretive …
Integration Ahead of Plan, Launched Cross Branded Products
•
Recognizing Revenue Synergies Across Analytics
•
Opened New Distribution and Customer Service Center in Russia
Deploying Innovation & New Product Applications and Services
•
Bell & Gossett Awarded the PM Engineer Magazine Product of the Year Award
•
Bell & Gossett Little Red School House®
Recognized as a Certified LEED (Leading Energy and Engineering
Design) Education Provider
•
Flygt Experior -
2012 Ringier Technology Innovation Award
Continued Strong Execution
•
Deployment of Commercial Excellence ... Continued Strong Price Realization
•
Operational Initiatives Underway To Drive a More Competitive Cost Structure
|
 Geographic and End Market Q1’12 Performance
5
Performance In-Line With Expectations
Geographic Region
End Market
(% of 2011 Revenue)
+
Emerging Markets
+
Lat. Am., Asia Pac., E. Europe
-
Middle East
+
U.S.
=
Europe
+
Industrial
(~40%)
=
Public
Utility
(~36%)
+
Commercial
(~12%)
-
Residential
(~9%)
-
Agriculture
(~3%) |
 6
See appendix for non-GAAP reconciliations
* Excludes non-recurring separation costs of $5M and $3M in Q1 2012 and Q1 2011,
respectively Q1 Performance Drivers
+
Industrial & Commercial Strength
+
YSI Acquisition Adds 4%
=
Public Utility Stable
–
Residential Market Headwind
+
Building Backlog …
Record Orders $1B
(Dollars, In Millions)
(Dollars, In Millions)
Q1 Growth
Q1 Growth
Organic
+2%
FX
-2%
Acquisition
+4%
Total
Total
+4%
+4%
Cost Reductions
+2.7%
Price
+1.5%
Acquisitions
+0.5%
Vol/Mix/Invest
-
1.8%
Delivered
Mid-Single
Digit
Top
Line
Growth
…
Solid
Operating
Performance
890
925
+4%
103
104
+1%
Incremental Margin ~18%
Incremental Margin ~18%
(Ex. FX & Stand Alone Costs)
(Ex. FX & Stand Alone Costs)
Operating Income *
Operating Income *
Revenue
Revenue |
 Q1’12 EPS *
Q1’12 Xylem Performance
7
9% Normalized EPS Growth
Interest
($0.06)
Stand-Alone
($0.04)
Separation Costs $0.01
* See Appendix for Non-GAAP Reconciliations
Operational Performance:
+
Base Business / –
Investments
+
YSI Acquisition …
EPS Accretive
–
Operating Tax Rate
Spin Related:
–
Interest Expense
–
Stand-Alone Costs
–
Separation Costs
9%
9%
Normalized
Normalized
EPS Growth
EPS Growth
Q1'11
GAAP EPS
Adjustments
Normalized
Q1'11 EPS
Operational
Performance
Adjusted
Q1'12 EPS
Separation
Costs
Q1'12
GAAP EPS
$0.42
$0.33
$0.36
$0.34
$0.03
$0.09
$0.02 |
 Q1’12 Water Infrastructure Performance
8
Significant Margin Expansion Driven by Strategic Acquisitions & Initiatives
See appendix for non-GAAP reconciliations
* Excludes Q1 2012 non-recurring separation costs of $2M
+6%
(Dollars, In Millions)
(Dollars, In Millions)
+20%
Incremental Margin ~26%
(Ex. FX & Stand Alone Costs)
Q1 Organic Growth Drivers
•
Transport +3%
+
Global Industrial …
Dewatering Strong
=
Public Utility Flat
•
Treatment -3%
–
Developed Markets Soft …
Project Timing
+
Double-Digit Emerging Markets Growth
•
Test -2% (Excludes YSI,
Double-Digit Growth)
–
Exceptionally Strong Q1’11
Cost Reductions
+2.7%
Price
+0.9%
Acquisitions
+0.6%
Vol/Mix/Invest
-
0.7%
Operating Income *
Revenue
Q1 Growth
Q1 Growth
Organic
+2%
FX
-2%
Acquisition
+6%
Q1'11
Q1'12
551
Q1'11
Q1'12
64
Q1'11
Op Margin
Operations
FX
Inflation
Q1'12
Op Margin
Before
Stand-
Alone*
Stand-
Alone
Q1'12
Op Margin*
11.6%
13.4%
13.2%
2.4%
0.2%
3.5%
0.7%
77
584
Total
Total
+6%
+6% |
 Q1’12 Applied Water Performance
9
Results As Expected …
Confident in Delivering Operational Improvement
Flat
See appendix for non-GAAP reconciliations
* Excludes Q1 2012 non-recurring separation costs of $1M
(Dollars, In Millions)
(Dollars, In Millions)
-11%
•
Building Services +2%
+
Commercial Market Share Gains
–
Residential Weakness …
Europe & Warm US Winter
–
Emerging Markets Down …
Middle East Instability
•
Industrial Water +2%
+
General Industrial and Food & Beverage Strength
–
Leisure Marine
•
Irrigation -4%
=
Continued Strength in US …
Strong Q1’11
Cost Reductions
+2.5%
Price
+2.6%
Vol/Mix/Invest
-
3.1%
Unfavorable Mix
•
Marine Down …
Q2’12 Improvement Opportunity
•
Warm US Winter Drove Lower High Margin Business
Revenue
Operating Income *
Q1 Growth
Q1 Growth
Organic
+1%
FX
-1%
Acquisition
-
Total
Total
Flat
Flat
Q1'11
Q1'12
355
Q1'11
Q1'12
46
Q1'11
Op Margin
Operations
FX
Inflation
Q1'12
Op Margin
Before
Stand-Alone*
Stand-
Alone
Q1'12
Op Margin*
13.0%
12.1%
11.5%
0.1%
2.8%
0.6%
2.0%
41
355 |
 Xylem
Financial Position 10
•
Free Cash Flow $41M
•
Typical Seasonality
•
Impact of Stand-Alone Costs & Interest
•
Working Capital Investment
•
Increased Capex for Growth Initiatives
•
Capex > 1 Reinvestment Ratio
•
Strong Cash Position
•
No Significant Debt Maturities Until 2016
•
31% Net Debt to Net Capital
•
1.3x Net Debt/Adj. TTM EBITDA
•
$600M Revolving Credit Facility Undrawn
•
Access to Commercial Paper
FCF%
68%
61%
W/C%**
24.1%
23.1%
March 31, 2012
Cash
347
Debt
1,206
Net Debt
859
Shareholders’
Equity
1,949
Net Capital
2,808
Net Debt to Net Capital
31%
(Dollars, In Millions)
(Dollars, In Millions)
(Dollars, In Millions)
* See Appendix for Non-GAAP Reconciliations
** (AR+INV-AP)/ TTM Revenue (Adjusted for Acquisitions)
Free Cash Flow *
Free Cash Flow *
Working Capital
Working Capital
Capital Summary/Liquidity
Capital Summary/Liquidity
Strong
Cash
Flow
…
Healthy
Balance
Sheet
...
Providing
Flexibility
54
41
843
897 |
 2012 Guidance |
 2012
Financial Guidance Summary 12
2012 Full Year
Financial Outlook
Growth
2012E vs. 2011
Total Revenue
$3.9B -
$4.0B
4% -
6% (Organic)
Water Infrastructure
$2.5B -
$2.6B
5% -
7% (Organic)
Applied Water
$1.4B -
$1.5B
2% -
6% (Organic)
Segment Margin*
14.5% -
15.0%
+50 to +100 bps
Operating Margin*
12.7% -
13.3%
Flat to +60 bps (incl. incremental
stand-alone costs $25M-$30M)
EPS *
$1.80 -
$1.95
-7% to +1% on Adjusted Basis
+8% to +17% on Normalized Basis
Free Cash Flow Conversion
95%
Excluding one-time separation costs
* See Appendix for Non-GAAP Reconciliations
Solid
Q1’12
Performance
…
Affirming
Full
Year
Guidance |
 2012
Xylem Performance 13
Affirming 2012 EPS Outlook
Illustration of Mid Point Guidance
•
Operational performance $0.21, includes YSI contribution, FX and
tax headwind
•
Projected structural tax rate ~25%
•
Nine months incremental interest expense normalization
•
Full year impact of stand alone costs …
in line with expectations
* See Appendix for Non-GAAP Reconciliations
Includes
unfavorable tax
rate change of 1%
13%
13%
Normalized
Normalized
EPS Growth
EPS Growth
2012 EPS * Outlook
Adjusted
FY'11 EPS
Incremental
Interest
Expense
Incremental
Stand-
Alone Costs
Normalized
FY'11 EPS
Operational
Performance
Adjusted
FY'12 EPS
$1.93
$1.66
$1.87
$0.16
$0.11
$0.21 |
 Key
Takeaways 14
•
Solid
Q1
Performance
…
As
Expected
•
End Market Conditions Consistent with 2012 Guidance
Assumptions
•
YSI …
Further Demonstrates Inorganic Growth Capabilities, and
Our Ability to Acquire & Effectively Integrate
•
Strong Financial Position & Strong Cash Flow Generation
•
Confident in Ability to Deliver a Strong 2012 |
 Appendix |
 2012
Revenue Outlook 16
Strong
Underlying
Growth
…
FX
Shift
from
Tailwind
to
Headwind
Xylem
Xylem
Xylem
3.9 -
4.0
(Dollars, In Billions)
2011
2012
Comments
Organic
Growth
7%
4-6%
-
1H’12 tough compare vs. strong 1H’11
-
2H’12 stronger than 1H
FX
(Translation)
4%
(3)%
~65% international revenues
Top foreign currencies:
Euro, CAD, AUD, GBP, SEK
Acquisition
8%
2%
2012 represents YSI
2011 represents incremental Godwin,
Nova, OI Analytics and YSI
Total Growth
19%
3-5%
Quarterly
Revenue Profile
(% of FY Revenue)
Q1
Q2
Q3
Q4
2009-2011
Composite
22%
25%
25%
28%
3.8
2011
2012 Outlook |
 2012
Margin Outlook 17
Solid Margin Performance …
On Track to Meet Long Term Objective
Includes Stand-Alone
Costs of ~70 bps
Includes Stand-Alone
Costs of ~10 bps
Op Margin Expansion (Ex. Stand Alone Costs) **
Op Margin Expansion (Ex. Stand Alone Costs) **
•
Segment Op Margin 14.5% -
15.0%
•
Comm’l & Oper’l Excellence Initiatives
•
Acquisition margin accretive
•
Organic growth investments
•
Inflation ~3%
•
Operating Margin 12.7% -
13.3%
•
Includes stand-alone costs ~$25M-$30M
Segment Margin *
Segment Margin *
Operating Margin *
Operating Margin *
12.7% -
13.3%
See appendix for non-GAAP reconciliations
*Excludes non-recurring separation costs of $87M and $15M-$20M for 2011 and
2012, respectively ** Adjusted for non recurring separation costs and stand
alone costs 9.6%
14.5% -15.0%
14.0%
2012
Outlook
2011
2012
Outlook
2011
12.7%
9.7%
12.1%
12.8%
13.7%
2011
2010
2009
2008
2012
Midpoint
Driving Consistent
Improvements
…
On
Track to Meet Long
Term Objective |
 Quarterly Financial Performance
18
($M, Except
EPS)
Q1’10
Q2’10
Q3’10
Q4’10
FY’10
Q1’11
Q2’11
Q3’11
Q4’11
FY’11
Q1’12
Revenue
686
775
806
935
3,202
890
971
939
1,003
3,803
925
COGS
431
484
497
576
1,988
553
592
574
623
2,342
562
Gross Profit
255
291
309
359
1,214
337
379
365
380
1,461
363
SG&A
164
170
183
220
737
210
219
215
233
877
231
R&D
18
17
18
21
74
24
26
23
27
100
28
Separation Costs
-
-
-
-
-
3
18
46
20
87
5
Restructuring &
Asset Impairment
Charges, net
4
3
1
7
15
-
-
2
-
2
-
Op Income
69
101
107
111
388
100
116
79
100
395
99
Interest Expense
-
-
-
-
-
-
1
1
15
17
14
Other Non-Op
-2
-1
3
-
-
1
-
4
-
5
(1)
Income before Tax
67
100
110
111
388
101
115
82
85
383
84
Tax
11
15
19
14
59
23
43
5
33
104
21
Net Income
56
85
91
97
329
78
72
77
52
279
63
EPS –
Diluted *
$0.30
$0.46
$0.49
$0.53
$1.78
$0.42
$0.39
$0.42
$0.28
$1.50
$0.34
* On October 31, 2011, Xylem Inc. completed the spin-off through a
tax-free stock dividend to ITT Corporation’s shareholders. ITT
Corporation shareholders received one share of our common stock for each share of
ITT common stock. As a result on October 31, 2011, we
had
184.6
million
shares
of
common
stock
outstanding
and
this
share
amount
is
being
utilized
to
calculate
earnings
per
share
for
all
periods presented prior to the spin-off. |
 Non-GAAP Measures
19
Management views key performance indicators including revenue, gross margins, segment operating income
and margins, orders growth, free cash flow, working capital, and backlog, among others. In
addition, we consider certain measures to be useful to management and investors evaluating our
operating performance for the periods presented, and provide a tool for evaluating our ongoing operations, liquidity and
management of assets. This information can assist investors in assessing our financial performance and
measures our ability to generate capital for deployment among competing strategic alternatives
and initiatives. These metrics, however, are not measures of financial performance under GAAP
and should not be considered a substitute for revenues, operating income, net income, earnings per share (basic and diluted) or net cash
from operations as determined in accordance with GAAP. We consider the following non- GAAP measures, which may not be comparable to similarly
titled measures reported by other companies, to be key performance indicators: “Organic
revenue" and "Organic orders” transactions, and contributions from
acquisitions and divestitures. Divestitures include sales of portions of our business that did not meet the
criteria for classification as a discontinued operation or insignificant portions of our business that
we did not classify as a discontinued operation. The
period-over-period change resulting from foreign currency fluctuations assumes no change in exchange rates from the prior period.
“Constant currency”
conversion rate.
This approach is used for countries where the functional currency is the local currency.
“EBITDA” defined
adjustment to EBITDA to exclude for one-time separation costs
associated with the Xylem spin-off from ITT Corporation.
“Operating Income *” and “Adjusted EPS”
with the Xylem spin-off from ITT Corporation and tax- related special items. “Normalized EPS”
tax- related special items, as well as an adjustment to reflect
the incremental current period amount of interest expense and stand alone costs in the prior
comparable period. “Free Cash Flow”
other significant items that impact current results which management believes are not related to our
ongoing operations and performance. Our definition of free cash flows does not consider non-discretionary cash payments, such as debt.
as
revenue
and
orders,
respectively,
excluding
the
impact
of
foreign
currency
fluctuations,
intercompany
defined
as
financial
results
adjusted
for
currency
by
translating
current
period
and
prior
period
activity
using
the
same
currency
as
earnings
before
interest,
taxes,
depreciation,
amortization
expense,
and
share
-based
compensation.
“Adjusted
EBITDA”
reflects
the
defined as operating income and earnings per share, adjusted to exclude one-time separation costs associated
as
earnings
per
share,
adjusted
to
exclude
one
-time
separation
costs
associated
with
the
Xylem
spin-off
from
ITT
Corporation
and
defined as net cash from operating activities, as reported in the Statement of
Cash Flow, less capital expenditures as well as adjustments for
defined
defined |
 Non-GAAP Reconciliation:
Organic & Constant Currency Revenue / Order Growth
20
Constant Currency
(A)
(B)
(C)
(D)
(E)
(F) = B+C+D+E
(G) = F/A
(H) = (B + D) / A
Orders
Change
% Change
Change
% Change
Orders
Orders
2012 v. 2011
2012 v. 2011
FX Contribution
Eliminations
Adj. 2012 v. 2011
Adj. 2012 v. 2011
2012
2011
Quarter Ended March 31, 2012
Xylem Inc.
1,004
978
26
2.7%
(37)
18
-
7
0.7%
4.5%
Water infrastructure
638
612
26
4.2%
(37)
13
-
2
0.3%
6.4%
Applied Water
382
381
1
0.3%
-
5
(1)
5
1.3%
1.6%
Revenue
Change
% Change
Change
% Change
Revenue
Revenue
2012 v. 2011
2012 v. 2011
FX Contribution
Eliminations
Adj. 2012 v. 2011
Adj. 2012 v. 2011
2012
2011
Quarter Ended March 31, 2012
Xylem Inc.
925
890
35
3.9%
(34)
14
-
15
1.7%
5.5%
Water infrastructure
584
551
33
6.0%
(34)
10
1
10
1.8%
7.8%
Applied Water
355
355
-
0.0%
-
5
-
5
1.4%
1.4%
Note: Due to rounding and intersegment eliminations the sum of segment amounts may not agree to
Xylem totals. Acquisitions /
Divestitures
Acquisitions /
Divestitures
Xylem Inc. Non-GAAP Reconciliation
Reported vs. Organic & Constant Currency Revenue / Order Growth
($ Millions)
(As reported -
GAAP)
(As Adjusted -
Organic) |
  Non-GAAP Reconciliation: Adjusted Diluted EPS
21
Q1 2012
Q1 2011
Net Income
63
78
Separation costs, net of tax
4
2
Adjusted Net Income before Special Tax Items
67
80
Special Tax Items
-
-
Adjusted Net Income
67
80
Diluted Earnings per Share
$0.34
$0.42
Separation costs per Share
$0.02
$0.01
Adjusted diluted EPS before Special Tax Items
$0.36
$0.43
Special Tax Items per Share
$0.00
$0.00
Adjusted diluted EPS
$0.36
$0.43
Adjusted Diluted EPS
For The Three Months Ended 2012 & 2011
($ Millions, except per share amounts)
Xylem Inc. Non-GAAP Reconciliation |
 Non-GAAP Reconciliation: Normalized EPS
22
Q1 2011
Q1 2012
As Reported
Adjustments
Adjusted
Adjustments
Normalized
As Reported
Adjustments
Adjusted
Total Revenue
890
890
890
925
925
Operating Income
100
3
a
103
(10)
c
93
99
5
a
104
Operating Margin
11.2%
11.6%
10.4%
10.7%
11.2%
Interest Expense
-
-
(13)
d
(13)
(14)
(14)
Other Non-Operating Income (Expense)
1
1
1
(1)
(1)
Income before Taxes
101
3
104
(23)
81
84
5
89
Provision for Income Taxes
(23)
(1)
b
(24)
5
e
(19)
(21)
(1)
b
(22)
Net Income
78
2
80
(18)
62
63
4
67
Diluted Shares
184.6
184.6
185.9
185.9
Diluted EPS
0.42
$
0.01
$
0.43
$
(0.10)
$
0.33
$
0.34
$
0.02
$
0.36
$
a
One time separation costs
b
Tax impact of one time separation costs
c
Incremental stand alone costs incurred in 2012
d
Incremental interest expense on long-term debt incurred in 2012
e
Tax impact of incremental interest expense and stand alone costs incurred in 2012
Xylem Inc. Non-GAAP Reconciliation
Normalized and Adjusted Diluted EPS
($ Millions, except per share amounts) |
 23
Non-GAAP Reconciliation: Segment Operating Income
Adjusted Segment Operating Income
Q1
'12
'11
Total Revenue
• Water Infrastructue
584
551
• Applied Water
355
355
Operating Income
• Water Infrastructue
75
64
• Applied Water
40
46
Separation Costs
• Water Infrastructue
2
-
• Applied Water
1
-
Adjusted Operating Income*
• Water Infrastructue
77
64
• Applied Water
41
46
Operating Margin
• Water Infrastructue
12.8%
11.6%
• Applied Water
11.3%
13.0%
Adjusted Operating Margin*
• Water Infrastructue
13.2%
11.6%
• Applied Water
11.5%
13.0%
*Adjusted Operating Income excludes non-recurring separation costs
Xylem Inc. Non-GAAP Reconciliation
Segment Operating Income
($ Millions) |
  Non-GAAP Reconciliation: Free Cash Flow
24
2012
2011
Net Cash - Operating Activities
61
71
Capital Expenditures
(31)
(19)
Free Cash Flow, including separation costs
30
52
Separation Costs (Cash Paid incl. Capex)
11
2
Free Cash Flow, excluding separation costs
41
54
Net Income
63
78
Separation Costs, net of tax
4
2
Adjusted Net Income
67
80
Free Cash Flow Conversion
61%
68%
Xylem Inc. Non-GAAP Reconciliation
Net Cash - Operating Activities vs. Free Cash Flow
For The Three Months Ended 2012 & 2011
($ Millions)
Three Months Ended |
 25
Non-GAAP Reconciliation: Xylem EBITDA & Adj. EBITDA
2012
Q1
Q1
Q2
Q3
Q4
Total
Pre-Tax Net Income
84
101
115
82
85
383
Interest, net
13
-
-
1
16
17
Depreciation
23
22
25
25
21
93
Amortization
11
11
10
11
12
44
Stock
Compensation 5
3
2
2
6
13
EBITDA
136
137
152
121
140
550
Separation Costs
5
3
18
46
20
87
Adjusted
EBITDA 141
140
170
167
160
637
Revenues
925
890
971
939
1,003
3,803
Adjusted EBITDA Margin
15.2%
15.7%
17.5%
17.8%
16.0%
16.7%
2011
Xylem Inc. Non-GAAP Reconciliation
EBITDA and Adjusted EBITDA by Quarter
Total Xylem
($ Millions) |
 26
Non-GAAP Reconciliation: Water Infrastructure EBITDA & Adj. EBITDA
2012
Q1
Q1
Q2
Q3
Q4
Total
Pre-Tax Net Income
75
65
93
88
99
345
Interest, net
-
-
-
(1)
-
(1)
Depreciation
16
16
19
19
14
68
Amortization
10
9
9
9
9
36
Stock
Compensation 1
-
-
1
1
2
EBITDA
102
90
121
116
123
450
Separation Costs
2
-
2
8
6
16
Adjusted
EBITDA 104
90
123
124
129
466
Revenues
584
551
602
584
679
2,416
Adjusted EBITDA Margin
17.8%
16.3%
20.4%
21.2%
19.0%
19.3%
2011
Xylem Inc. Non-GAAP Reconciliation
EBITDA and Adjusted EBITDA by Quarter
Water Infrastructure
($ Millions) |
 27
Non-GAAP Reconciliation: Applied Water EBITDA & Adj. EBITDA
2012
Q1
Q1
Q2
Q3
Q4
Total
Pre-Tax Net Income
40
46
51
37
25
159
Interest, net
-
-
-
-
-
-
Depreciation
6
6
6
6
7
25
Amortization
1
2
1
2
1
6
Stock Compensation
1
-
-
1
1
2
EBITDA
48
54
58
46
34
192
Separation Costs
1
-
-
9
4
13
Adjusted
EBITDA 49
54
58
55
38
205
Revenues
355
355
385
368
336
1,444
Adjusted EBITDA Margin
13.8%
15.2%
15.1%
14.9%
11.3%
14.2%
2011
Xylem Inc. Non-GAAP Reconciliation
EBITDA and Adjusted EBITDA by Quarter
Applied Water
($ Millions) |
 Non-GAAP Reconciliation: Guidance
28
Illustration of Mid Point Guidance
2012 Guidance
FY '11
FY '12
As Reported
Adjustments
Adjusted
Adjustments
Normalized
As Reported
Adjustments
Adjusted
Total Revenue
3,803
3,803
3,803
3,950
3,950
Segment Operating Income
503
29
a
532
(8)
d
524
577
8
h
585
Segment Operating Margin
13.2%
14.0%
13.8%
14.6%
14.8%
Corporate Expense
108
(58)
b
50
20
e
70
81
(10)
h
71
Operating Income
395
87
482
(28)
454
496
18
514
Operating Margin
10.4%
12.7%
11.9%
12.6%
13.0%
Interest Expense
(17)
(17)
(39)
f
(56)
(51)
(51)
Other Non-Operating Income (Expense)
5
5
5
-
-
Income before Taxes
383
87
470
(67)
403
445
18
463
Provision for Income Taxes
(104)
(7)
c
(111)
16
g
(95)
(111)
(5)
i
(116)
Net Income
279
80
359
(51)
308
334
13
347
Diluted Shares (j)
185.3
185.3
185.9
185.9
Diluted EPS
1.50
$
0.43
$
1.93
$
(0.27)
$
1.66
1.80
0.07
1.87
a
One time separation costs incurred at the segment level
b
One time separation costs incurred at the corporate level
c
Net tax impact of above items, plus the addition of 2011 special tax items
d
Incremental stand alone costs to be incurred in 2012 at the segment level ($8M)
e
Incremental stand alone costs to be incurred in 2012 at the corporate level ($20M)
f
Incremental interest expense on long-term debt to be incurred in 2012
g
Tax impact of incremental interest expense and stand alone costs to be incurred in 2012
h
Expected one time separation costs of $8M and $10M to be incurred at the segments and
headquarters, respectively. i
Tax impact of one time separation costs expected to be incurred in 2012.
j
Full year 2012 diluted shares outstanding are based on diluted shares outstanding for quarter
ended March 31, 2012 ($ Millions, except per share amounts)
Guidance
Xylem Inc. Non-GAAP Reconciliation |
 29
NYSE: XYL
http://investors.xyleminc.com
Phil De Sousa, Investor Relations Officer
(914) 323-5930
Janice Tedesco, Investor Relations Coordinator
(914) 323-5931 |