Xylem Inc. - FORM 8-K - EX-99.2

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XYLEM INC.

Q2 2013 EARNINGS RELEASE

JULY 30, 2013

Exhibit 99.2

FORWARD-LOOKING STATEMENTS

Q2 2013 EARNINGS RELEASE

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 in 2011, 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.

Q2’13 XYLEM RESULTS

Q2 2013 EARNINGS RELEASE

* See appendix for non-GAAP reconciliations

Weak Industrial & Public Utility (Capex)

Markets, Partially Offset by U.S.

Residential & Commercial Building

Services, and Agriculture

Challenging European Market Conditions

Constant

Currency

Basis *

Volume Decline, and Unfavorable Foreign

Exchange Impacts

Partially Offset by Cost Reduction Initiatives,

and Restructuring & Realignment Actions

Lower Income, Timing of Tax Payments,

Unfavorable Working Capital

Book to Bill 1.05

Constant

Currency

Basis *

(Dollars In Millions, Except per Share Data)

Orders

$1,009

+4%

Revenue

$960

-1%

Gross Margin

38.6%

-100 bps

Operating Margin*

10.2%

-380 bps

EPS *

$0.36

Free Cash Flow *

FINANCIAL PERFORMANCE SUMMARY

Q2 2013 EARNINGS RELEASE

XYLEM GUIDANCE UPDATE

•

Reflects 1H Performance & Current Market Conditions

•

Negative Foreign Exchange Impacts

•

Acquisitions In-Line …

Includes Pollmann Pumpen

•

Executing Additional Cost Reduction Plans

•

On Track to Deliver Restructuring & Realignment Benefits

(Dollars In Millions, Except per Share Data)

* See appendix for non-GAAP reconciliations

Mid-Point Roll-Forward Revenue EPS* Notes

Previous Guidance

$3,925

$1.84

Organic Growth 0% to 1%

FX Translation

($70) ($0.09)

Stronger USD & SEK

Operations

($135) ($0.30)

Organic Growth -4% to -3%; -4 pt. Revision

Revised Guidance

$3,720 $1.45

MANAGING THROUGH A SLOW MARKET RECOVERY …

ACCELERATING COST ACTIONS

BUSINESS UPDATE

Q2 2013 EARNINGS RELEASE

FOCUSED ON DRIVING LONG-TERM STRATEGY

DELIVER CUSTOMER VALUE

•

Application Expertise Resulting in Key Treatment Project Order Wins

•

Partnering with Visenti to Provide Energy Audit in Singapore

DRIVE PROFITABLE GROWTH

•

Advancing Acquisition Strategy … Completed the Acquisition of Pollmann Pumpen

•

Vitality Index Continues to Improve … Strong Pipeline of New Product Launches

–

YSI and Ecocirc Products Recognized with Industry Awards

•

Accelerating Geographic Expansion … Strong Performance in Key Markets

IMPROVE BUSINESS SUSTAINABILITY

•

Accelerating Cost Actions … Strict Cost Control Initiatives In Place

•

Continuing to Drive Cost Savings Through Lean and Global Sourcing Initiatives

•

Focused on Business Simplification Initiatives

Q2’13 XYLEM PERFORMANCE

OPERATING INCOME*

(Dollars, In Millions)

REVENUE

Strong U.S. Performance (All End Markets)

–

Weak European Public Utility & Industrial

–

Emerging Market Project Delays Coupled

with Mining Slowdown/Disruption

–

Pricing Pressure

–

Unfavorable Foreign Exchange

Acquisitions In-line

Restructuring On Track

OI%

11.8%

-120 bps

-30 bps

-10 bps

10.2%

EPS & OP MARGIN%*

-1%

-3%

Organic

Growth

11.8%

10.2%

OI%

Q2 2013 EARNINGS RELEASE

Vs. Internal

Expectations

* See appendix for non-GAAP reconciliations

Q2'13

Expectation

Q2'13

Actual

991

960

Q2'13

Expectation

Q2'13

Actual

117

Adjusted

Q2'13

Expectation

Volume/

Price

Adjusted

Q2'13

Actual

$0.05

$0.01

$0.43

$0.36

Other

Q2’13 XYLEM PERFORMANCE

Q2 2013 EARNINGS RELEASE

OPERATING INCOME*

Q2 GROWTH

Organic

-3%

Acquisitions

Constant

Currency

-1%

(Dollars, In Millions)

-27%

ORGANIC PERFORMANCE

By End Market

By Geography

–

Industrial

–

Europe

–

Public Utility

U.S.

Commercial

–

Emerging Markets

Residential

Agriculture

REVENUE

* See appendix for non-GAAP reconciliations

MODEST U.S. IMPROVEMENT OFFSET BY CONTINUED EUROPEAN MARKET WEAKNESS

Price +0.3%

FX -0.9%

Euro HQ -0.2%

Q2'12

Q2'13

966

960

Q2'12

Q2'13

135

Q2'12

Op Margin*

Volume, Mix,

& Other

Cost

Reductions &

Price

Material,

Labor,

& OH

FX/Acq

Q2'13

Op Margin*

3.7%

2.5%

1.2%

3.6%

14.0%

10.2%

Inflation

–

Mining Weakness

China, Russia

–

Project Timing/Demand

Q2’13 XYLEM PERFORMANCE

Q2 2013 EARNINGS RELEASE

* See appendix for non-GAAP reconciliations

CHALLENGING MARKET CONDITIONS CONTINUE TO IMPACT BOTTOM LINE

Volume/Other

-$0.13

Restruct. Savings

+$0.02

Tailwinds

New Product Launches & Price

Cost Reductions & Restructuring Savings

European Realignment Benefit

Headwinds

Volume (Market Conditions)

Inflation

Foreign Exchange

Adjusted

Q2'12 EPS

Core

Operations

European

Realignment

Adjusted

Q2'13 EPS

$0.49

$0.36

$0.11

$0.03

$0.01

EPS*

Q2’13 WATER INFRASTRUCTURE PERFORMANCE

Q2 2013 EARNINGS RELEASE

OPERATING INCOME*

-2%

(Dollars, In Millions)

REVENUE

* See appendix for non-GAAP reconciliations

FACING SIGNIFICANT EUROPEAN MARKET WEAKNESS & FX HEADWIND

(Organic Performance)

Transport -6%; Treatment -12%; Test -2%

–

Europe Down Mid Single Digits

–

Treatment Project Delays, Funding

Constraints and PY Biogas Compare

–

Southern Europe Continues to Decline

Partially offset by Analytics (+MSD)

–

U.S. Down Low Single Digits

–

Industrial Dewatering (Coal Mining)

–

Emerging Markets Down High Single Digits

–

Projects Timing (Latin America/Middle East)

Euro HQ -0.3%

FX -1.6%

-33%

Q2'12

Q2'13

Q2'12

Q2'13

609

596

Q2'12

Op Margin*

Volume,

Mix, & Other

Cost

Reductions

Material,

Labor,

& OH

Inflation

FX/Acq

Q2'13

Op Margin*

15.4%

10.6%

3.8%

2.5%

2.0%

3.5%

Q2 GROWTH

Organic

-6%

Acquisition

+4%

Constant

Currency

-2%

Q2’13 APPLIED WATER PERFORMANCE

Q2 2013 EARNINGS RELEASE

+2%

(Dollars, In Millions)

* See appendix for non-GAAP reconciliations

STRONG U.S. & EMERGING MARKETS PERFORMANCE

(Organic Performance)

Building Svcs +3%; Ind’l Water -2%; Irrigation +10%

Strong U.S. Performance, Up Mid Single Digits

Residential & Ag up Double-Digits

Improving Commercial Market

–

Partially Offset by Slow Industrial Market

EM Markets Up High Single Digits

Russia & China Maintain Double-Digit Pace

–

So. European Market Continues to Decline

Price +0.7%

Q2 GROWTH

REVENUE

OPERATING INCOME*

Q2'12

Q2'13

373

381

Organic

+1%

Acquisition

Constant

Currency

+1%

Q2'12

Q2'13

-2%

Q2'12

Op Margin*

Volume, Mix,

& Other

Cost

Reductions &

Price

Material,

Labor,

& OH

Inflation

Q2'13

Op Margin*

13.9%

13.4%

1.7%

2.4%

3.6%

Q2 2013 EARNINGS RELEASE

XYLEM FINANCIAL POSITION

Free Cash Flow *

•

Free Cash Flow Decline

•

Lower Income

•

Timing of Tax Payments

•

Unfavorable Working

Capital

•

Capex > 1 Reinvest. Ratio

Capital Summary/Liquidity

•

Strong Cash Position

•

No Significant Debt Maturities Until ‘16

•

1.4x Net Debt/Adj. TTM EBITDA

•

$600M Revolving Credit Facility -

Unutilized

•

Access to Commercial Paper -

Unutilized

Working Capital as % Revenue **

FCF%

54%

June 30, 2013

Cash

360

Debt

1,204

Net Debt

844

Shareholders’

Equity

2,052

Net Capital

2,896

Net Debt to Net Capital

29%

(Dollars, In Millions)

* See Appendix for Non-GAAP Reconciliations

** (AR+INV-AP-Customer Advances) / Revenue (Adjusted for Acquisitions)

Q2'12

YTD

Q2'13

YTD

Q2'12

Operations

Q2'13

1.1%

0.1%

23.1%

24.3%

Q2 2013 EARNINGS RELEASE

GUIDANCE UPDATE

EPS*

(Mid-Point Roll-Forward)

Previous Guidance

$1.84

Operations

$(0.30)

Foreign Exchange

$(0.09)

Current Guidance

$1.45

Reflecting Significant Headwinds

–

Europe Weaker Than Expected

–

Slow U.S. Industrial Market

–

Emerging Markets Weakness

–

Significant FX Headwind

Partially offset by Additional Cost Actions

Revenue (Mid-Point Roll-Forward)

Previous Guidance

$3,925

Volume/Price

(135)

Foreign Exchange

(70)

Current Guidance

$3,720

End Market

Performance

Outlook

FY’13 vs. PY

1H’13

vs. PY

Current Outlook

FY’13 vs. PY

Industrial

(43% of Revenue)

Flat to Up

Low Single Digits

Down High

Single Digits

Down Mid

Single Digits

Public Utility

(35% of Revenue)

Flat

Down High

Single Digits

Down Mid

Single Digits

Commercial

(11% of Revenue)

Flat to Up

Low Single Digits

Down Low

Single Digits

Flat to Up Low

Single Digits

Residential

(8% of Revenue)

Flat to Up

Low Single Digits

Up Low

Single Digits

Up Low

Single Digits

Agriculture

(3% of Revenue)

Flat

Up High

Single Digits

Up Mid

Single Digits

(Dollars, In Millions)

* See appendix for non-GAAP reconciliations

Q2 2013 EARNINGS RELEASE

2H PLANNING ASSUMPTIONS

Modest U.S. Market Improvement

•

Continued Strength in Residential & Commercial

•

Mixed Industrial End Market Dynamics

•

Stable Public Utility Opex/Capex Delays

Emerging Markets Improvement

Europe Remains Challenged

–

Mining Weakness (CAN/AUS)

+2%

Sequential

Growth

Sequential Volume Growth

Acquisitions (1H Burdened w/Purchase Price Acctg)

2H Incremental Restructuring Savings

Cost Containment/Acceleration of Cost Reductions

–

Foreign Exchange Headwind

–

Investment to Support New Product Launches

OI% 9.6%

11.8%

10.7%

OPERATING INCOME*

(Dollars, In Millions)

REVENUE

* See appendix for non-GAAP reconciliations

(Dollars, In Millions)

1H'13

Actual

2H'13

Guidance

FY'13

Guidance

1,839

1,881

3,720

1H'13

Actual

2H'13

Guidance

FY'13

Guidance

176

398

222

(Mid-Point Guidance)

Q2 2013 EARNINGS RELEASE

2013 FINANCIAL GUIDANCE SUMMARY

* See appendix for non-GAAP reconciliations

2013 Full Year

Financial Outlook

Growth

2013E vs. 2012

Revenue

(Mid-Point)

Total Growth

Organic

Acquisition

Xylem Consolidated

~$3,720

-2 % to -1%

-4%

-3%

-1%

Water Infrastructure

~$2,350

-4% to -3%

-7% to -6% 4% -1%

Applied Water

~$1,440

0% to +2% 0% to +2%

0% 0%

Segment Margin *

12.1% to 12.6%

-220 bps to

-170 bps

Operating

Margin *

10.4%

to 10.9%

-250 bps to

200 bps

EPS *

$1.40 to $1.50

$1.45 Mid Point

Free Cash Flow Conversion

~90%

Restructuring Pmts, Realignment Capex, & 1x Spin Capex

Guidance

Assumptions:

Operating

Tax Rate

~21%

1H’13 Rate: ~22%; 2H’13

Rate: ~20%

Count

~186.4

Share Repurchase Program Maintains Current Share Count

Items

Excluded from EPS:

Restructuring &

Realignment Costs

~$60 to $80

(Dollars

Millions,

Except

per

Data)

‘13 Net Cost Savings $13 to $15; Realignment Cost $20-$30

Q2 2013 EARNINGS RELEASE

SUMMARY

•

Recalibrated

Projections

Based

Half

Performance,

Current Economic Environment and End Market Outlook

•

Significant Cost Reduction and Restructuring Actions

Underway

•

Maintaining Sharp Focus on Delivering Customer Value

Through New Product Launches

•

Driving Businesses to Achieve Higher Performance

•

Continuing to Transition Organization

Q2 2013 EARNINGS RELEASE

NON-GAAP MEASURES

Management views key performance indicators including revenue, gross margins, segment operating income and margins, orders growth, free cash flow,

working capital, and backlog, among others. In addition, we consider certain measures to be useful to management and investors evaluating our operating

performance for the periods presented, and provide a tool for evaluating our ongoing operations, liquidity and management of assets. This information can

assist investors in assessing our financial performance and measures our ability to generate capital for deployment among competing strategic alternatives

and initiatives. These metrics, however, are not measures of financial performance under GAAP and should not be considered a substitute for revenue,

operating income, net income, earnings per share (basic and diluted) or net cash from operations as determined in accordance with GAAP. We consider the

following non-GAAP measures, which may not be comparable to similarly titled measures reported by other companies, to be key performance indicators:

“Organic revenue" and "Organic orders”

defined as revenue and orders, respectively, excluding the impact of foreign currency fluctuations, intercompany

transactions,

and

contributions

from

acquisitions

and

divestitures.

Divestitures

include

sales

portions

our

business

that

did

not

meet

the

criteria

for

classification as a discontinued operation or insignificant portions of our business that we did not classify as a discontinued operation. The period-over-

period change resulting from foreign currency fluctuations assumes no change in exchange rates from the prior period.

“Constant currency”

defined as financial results adjusted for currency translation impacts by translating current period and prior period activity using the

same currency conversion rate. This approach is used for countries whose functional currency is not the U.S. dollar.

“EBITDA”

defined as earnings before interest, taxes, depreciation, amortization expense, and share-based compensation. “Adjusted EBITDA”

reflects the

adjustment to EBITDA to exclude for non-recurring separation costs associated with the Xylem spin-off from ITT Corporation as well

as non-recurring restructuring and realignment costs.

"Adjusted Operating Income,”

"Adjusted Segment Operating Income,”

and “Adjusted EPS”

defined as operating income and earnings per share, adjusted to

exclude non-recurring separation costs associated with the Xylem spin-off from ITT Corporation, non-recurring restructuring and

realignment costs and tax-related special items.

“Normalized EPS”

defined as adjusted earnings per share, as well as adjustments to reflect the incremental current period amount of interest expense and

stand-alone costs in the prior comparable period.

“Free Cash Flow”

defined as net cash from operating activities, as reported in the Statement of Cash Flow, less capital expenditures as well as adjustments

for other significant items that impact current results which management believes are not related to our ongoing operations and performance. Our

definition of free cash flows does not consider non-discretionary cash payments, such as debt.

“Realignment costs”

defined as non-recurring costs not included in restructuring costs that are incurred as part of actions taken to reposition our business,

including items such as professional fees, relocation, travel and other costs.

Q2 2013 EARNINGS RELEASE

NON-GAAP RECONCILIATION:

ORGANIC & CONSTANT CURRENCY REVENUE GROWTH

Constant Currency

(A)

(B)

(C)

(D)

(E)

(F) = B+C+D+E

(G) = F/A

(H)

Change

% Change

Change

% Change

Revenue

2013 v. 2012

FX Contribution

Eliminations

Adj. 2013 v. 2012

2013

2012

Six Months Ended June 30

Xylem Inc.

1,839

1,891

(52)

-3%

(46)

(2)

(100)

-5%

-3%

Water infrastructure

1,147

1,193

(46)

-4%

(46)

(1)

(93)

-8%

-4%

Applied Water

726

728

(2)

(1)

(4)

(7)

-1%

Quarter Ended June 30

Xylem Inc.

960

966

(6)

-1%

(23)

(4)

(33)

-3%

-1%

Water infrastructure

596

609

(13)

-2%

(23)

(2)

(38)

-6%

-2%

Applied Water

381

373

(1)

(2)

Quarter Ended March 31

Xylem Inc.

879

925

(46)

-5%

(23)

(67)

-7%

-5%

Water infrastructure

551

584

(33)

-6%

(23)

(55)

-9%

-5%

Applied Water

345

355

(10)

-3%

(2)

(12)

-3%

Note: Due to rounding the sum of segment amounts may not agree to Xylem totals.

Acquisitions /

Divestitures

Xylem Inc. Non-GAAP Reconciliation

Reported vs. Organic & Constant Currency Revenue

($ Millions)

(As Reported -

GAAP)

(As Adjusted -

Organic)

Q2 2013 EARNINGS RELEASE

NON-GAAP RECONCILIATION:

ORGANIC & CONSTANT CURRENCY ORDER GROWTH

Constant Currency

(A)

(B)

(C)

(D)

(E)

(F) = B+C+D+E

(G) = F/A

(H) = (F -

C) / A

Change

% Change

Change

% Change

Orders

2013 v. 2012

FX Contribution

Eliminations

Adj. 2013 v. 2012

2013

2012

Six Months Ended June 30

Xylem Inc.

1,971

1,974

(3)

(51)

(54)

-3%

Water infrastructure

1,248

1,255

(7)

-1%

(51)

(57)

-5%

Applied Water

756

752

(1)

Quarter Ended June 30

Xylem Inc.

1,009

970

(25)

(2)

Water infrastructure

647

617

(25)

(1)

Applied Water

378

370

(1)

Quarter Ended March 31

Xylem Inc.

962

1,004

(42)

-4%

(26)

(66)

-7%

-4%

Water infrastructure

601

638

(37)

-6%

(26)

(61)

-10%

-5%

Applied Water

378

382

(4)

-1%

(1)

(5)

-1%

Note: Due to rounding the sum of segment amounts may not agree to Xylem totals.

Acquisitions /

Divestitures

Xylem Inc. Non-GAAP Reconciliation

Reported vs. Organic & Constant Currency Order Growth

($ Millions)

(As Reported -

GAAP)

(As Adjusted -

Organic)

Q2 2013 EARNINGS RELEASE

NON-GAAP RECONCILIATION:

ADJUSTED DILUTED EPS

Q2 2012

Q2 2013

As Reported

Adjustments

Adjusted

As Reported

Adjustments

Adjusted

Total Revenue

966

960

Operating Income

129

135

Operating Margin

13.4%

14.0%

7.3%

10.2%

Interest Expense

(13)

(14)

Other Non-Operating Income (Expense)

(1)

Income before Taxes

115

121

Provision for Income Taxes

(26)

(3)

(29)

(11)

(8)

(19)

Net Income

Diluted Shares

186.2

186.1

Diluted EPS

0.48

0.01

0.49

0.25

0.11

0.36

Q2 YTD 2012

Q2 YTD 2013

As Reprted

Ajustments

Adjusted

As Reported

Adjustents

Adjusted

Total Revenue

1,891

1,839

Operating Income

228

239

136

176

Operating Margin

12.1%

12.6%

7.4%

9.6%

Interest Expense

(27)

Other Non-Operating Income (Expense)

(2)

(1)

Income before Taxes

199

210

108

148

Provision for Income Taxes

(47)

(4)

(51)

(21)

(11)

(32)

Net Income

152

159

116

Diluted Shares

186.1

186.3

Diluted EPS

0.82

0.03

0.85

0.47

0.15

0.62

One time separation costs

Net tax impact of separation costs and special tax items

Restructuring & realignment costs

Net tax impact of restructuring & realignment costs and special tax items

Xylem Inc. Non-GAAP Reconciliation

Adjusted Diluted EPS

($ Millions, except per share amounts)

Q2 2013 EARNINGS RELEASE

NON-GAAP RECONCILIATION:

ADJUSTED OPERATING INCOME

Q2 YTD

'13

'12

'13

'12

Total Revenue

•

Total Xylem

960

966

1,839

1,891

•

Water Infrastructure

596

609

1,147

1,193

•

Applied Water

381

373

726

728

Operating Income

•

Total Xylem

129

136

228

•

Water Infrastructure

167

•

Applied Water

Operating Margin

•

Total Xylem

7.3%

13.4%

7.4%

12.1%

•

Water Infrastructure

6.9%

15.2%

7.2%

14.0%

•

Applied Water

11.8%

13.9%

11.7%

12.6%

Separation Costs

•

Total Xylem

•

Water Infrastructure

•

Applied Water

Restructuring & Realignment Costs

•

Total Xylem

•

Water Infrastructure

•

Applied Water

Adjusted Operating Income*

•

Total Xylem

135

176

239

•

Water Infrastructure

115

170

•

Applied Water

Adjusted Operating Margin*

•

Total Xylem

10.2%

14.0%

9.6%

12.6%

•

Water Infrastructure

10.6%

15.4%

10.0%

14.2%

•

Applied Water

13.4%

13.9%

12.8%

*Adjusted Operating Income excludes restructuring

& realignment costs in 2013 and excludes non-

recurring separation costs in 2012.

Xylem Inc. Non-GAAP Reconciliation

Adjusted Operating Income

($ Millions)

Q2 2013 EARNINGS RELEASE

NON-GAAP RECONCILIATION:

FREE CASH FLOW

2013

2012

Net Cash - Operating Activities

125

Capital Expenditures

(60)

(57)

Free Cash Flow, including separation costs

Cash Paid for Separation Costs (incl. Capex)

Free Cash Flow, excluding separation costs*

Net Income

152

Separation Costs, net of tax (incl. tax friction)

Net Income, excluding separation costs*

160

Free Cash Flow Conversion

54%

* Separation costs are not excluded in 2013

Xylem Inc. Non-GAAP Reconciliation

Net Cash - Operating Activities vs. Free Cash Flow

($ Millions)

Six Months Ended

Q2 2013 EARNINGS RELEASE

NON-GAAP RECONCILIATION:

XYLEM EBITDA & ADJ. EBITDA

Total

Pre-Tax Income

108

Interest Expense (Income), net

Depreciation

Amortization

Stock Compensation

EBITDA

106

113

219

Restructuring & Realignment

Adjusted EBITDA

118

141

259

Revenue

879

960

1,839

Adjusted EBITDA Margin

13.4%

14.7%

14.1%

Total

Pre-Tax Income

115

100

388

Interest Expense (Income), net

Depreciation

Amortization

Stock Compensation

EBITDA

136

166

154

147

603

Separation Costs

Restructuring & Realignment

Adjusted EBITDA

141

172

163

173

649

Revenue

925

966

931

969

3,791

Adjusted EBITDA Margin

15.2%

17.8%

17.5%

17.9%

17.1%

Xylem Inc. Non-GAAP Reconciliation

EBITDA and Adjusted EBITDA by Quarter

($ Millions)

2013

2012

Q2 2013 EARNINGS RELEASE

NON-GAAP RECONCILIATION:

WATER INFRASTRUCTURE EBITDA & ADJ. EBITDA

Total

Pre-Tax Income

Interest Expense (Income), net

(1)

Depreciation

Amortization

Stock Compensation

EBITDA

142

Restructuring & Realignment

Adjusted EBITDA

174

Revenue

551

596

1,147

Adjusted EBITDA Margin

14.7%

15.6%

15.2%

Total

Pre-Tax Income

342

Interest Expense (Income), net

(1)

Depreciation

Amortization

Stock Compensation

EBITDA

102

118

115

118

453

Separation Costs

Restructuring & Realignment

Adjusted EBITDA

104

119

134

476

Revenue

584

609

595

637

2,425

Adjusted EBITDA Margin

17.8%

19.5%

20.0%

21.0%

19.6%

2012

Xylem Inc. Non-GAAP Reconciliation

EBITDA and Adjusted EBITDA by Quarter

Water Infrastructure

($ Millions)

2013

Q2 2013 EARNINGS RELEASE

NON-GAAP RECONCILIATION:

APPLIED WATER EBITDA & ADJ. EBITDA

Total

Pre-Tax Income

Interest, net

Depreciation

Amortization

Stock Compensation

EBITDA

100

Restructuring & Realignment

Adjusted EBITDA

108

Revenue

345

381

726

Adjusted EBITDA Margin

14.8%

15.0%

14.9%

Total

Pre-Tax Income

170

Interest, net

Depreciation

Amortization

Stock Compensation

(1)

EBITDA

200

Separation Costs

Restructuring & Realignment

Adjusted EBITDA

207

Revenue

355

373

350

346

1,424

Adjusted EBITDA Margin

13.8%

15.8%

15.1%

13.3%

14.5%

2012

Xylem Inc. Non-GAAP Reconciliation

EBITDA and Adjusted EBITDA by Quarter

Applied Water

($ Millions)

2013

Q2 2013 EARNINGS RELEASE

NON-GAAP RECONCILIATION:

GUIDANCE

Illustration of Mid Point Guidance

2013 Guidance

FY '12

FY '13

As Reported

Adjustments

Adjusted

As Projected

Adjustments

Adjusted

Total Revenue

3,791

3,720

Segment Operating Income

512

542

391

461

Segment Operating Margin

13.5%

14.3%

10.5%

12.4%

Corporate Expense

(16)

Operating Income

443

489

328

398

Operating Margin

11.7%

12.9%

8.8%

10.7%

Interest Expense

(55)

Other Non-Operating Income (Expense)

(2)

Income before Taxes

388

434

271

341

Provision for Income Taxes

(91)

(13)

(104)

(50)

(22)

(72)

Net Income

297

330

221

269

Diluted Shares

186.2

186.4

Diluted EPS

1.59

0.18

1.77

1.19

0.27

1.45

One time separation, restructuring and realignment costs incurred at the segment level

One time separation, restructuring and realignment costs incurred at the corporate level

Restructuring and realignment costs incurred at the segment level

Net tax impact of above items, plus the addition of special tax items

Xylem Inc. Non-GAAP Reconciliation

Guidance

($ Millions, except per share amounts)

Q2 2013 EARNINGS RELEASE

NON-GAAP RECONCILIATION:

ADJ. OPERATING INCOME AND MARGIN

Mid Point Guidance

2008

2009

2010

2011

2012

2013E

Revenue

3,291

2,849

3,202

3,803

3,791

3,720

Operating Income

315

276

388

395

443

328

Operating Margin

9.6%

9.7%

12.1%

10.4%

11.7%

8.8%

Restructuring & Realignment

Separation Costs*

Adjusted Operating Income

356

307

403

482

489

398

Adjusted Operating Margin

10.8%

12.6%

12.7%

12.9%

10.7%

Stand-alone Costs

Adj. Operating Income, excl. Stand-alone Costs

356

307

403

487

517

398

Adjusted Operating Margin, excl. Stand-alone Costs

10.8%

12.6%

12.8%

13.6%

10.7%

Xylem Inc. Non-GAAP Reconciliation

Adjusted Operating Income

($ Millions)

* 2013 separation costs are not excluded from adjusted operating income.

Attached files

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Xylem Inc. Reports