Slide 1: Q4 2012 Earnings Release
Exhibit 99.2 Q4 2012 Earnings Release February 7, 2013
Slide 2: Forward Looking Statements
Forward Looking Statements 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,”
Slide 3: Business Update
Business Update Q4’12 Financial Highlights • Orders: $926 Million; up 3% (Constant Currency*) Advancing Our Strategic Position • Revenue: $969 Million, down 3% • PIMS Group Acquisition Enhances Global Aftermarket & Services Business • Gross Margin: 39.4%, up 150 bps • MJK & Heartland Pump Integratio
Slide 4: PIMS Group Strategic Rationale
Acquisition Overview PIMS Group Overview - Purchase Price $57M - ‘12 Rev $38M Strategic Rationale - 220 Employees - Installation & - Enhances Global AM&S Maintenance Services - Municipal, Industrial & - Accelerates Expansion into Private Sectors Contract Services - 24/7 Support >10K Sites - Increase
Slide 5: Q4'12 Xylem Performance
Q4’12 Xylem Performance Revenue (Dollars, In Millions) Q4 Growth Organic Performance Organic -3% By End Market By Geography 1,003 969 Acquisition 0% Industrial Europe Public Utility U.S. Constant Currency -3% -3% Commercial Emerging Markets FX 0% Residential Q4'11 Q4'12 Total -3% Agriculture Operati
Slide 6: Q4'12 Xylem Performance
Q4’12 Xylem Performance Q4’12 EPS * Operational Performance: Core Operations $0.08 +21% Normalized Acquisitions $ - EPS Performance $ - FX Translation Operating Tax Rate $ - $0.08 $0.47 $0.39 $0.39 $0.28 $0.11 $0.08 Stand-Alone ($0.01) Separation Costs ($0.03) Separation Costs $0.10 Restruct. & Real
Slide 7: Q4'12 Water Infrastructure Performance
Q4’12 Water Infrastructure Performance Revenue (Organic Performance) Q4 Growth Transport -5% (Dollars, In Millions) Organic -7% Public Utility … Weak Capital Project Market Industrial Dewatering Down … U.S. Drought & Lower Acquisition +2% Demand for Fracking Applications 679 637 Disaster Recovery fo
Slide 8: Q4'12 Applied Water Performance
Q4’12 Applied Water Performance Revenue (Organic Performance) Q4 Growth • Building Services 2% (Dollars, In Millions) + U.S. Residential & Commercial Organic +4% + Super Storm Sandy Acquisition -% – Europe/Middle East Market Weakness 346 336 • Industrial Water +6% Constant Currency +4% + Favorable A
Slide 9: 2012 Xylem Financial Position
2012 Xylem Financial Position Free Cash Flow * Working Capital as % Revenue ** (Dollars, In Millions) • Free Cash Flow Growth • Higher Cash Taxes 1.0% 0.2% 388 22.5% 312 • Full Year of Interest 21.7% • Stand-Alone Costs 2011 2012 • Capex > 1 reinvestment ratio FCF% 111% 100% 2011 FX Operations 2012
Slide 10: 2013 Guidance
2013 Guidance
Slide 11: 2013 Key Focus Areas
2013 Key Focus Areas Deliver Drive Improve Customer Growth Business Value Initiatives Sustainability • Customer • Deploy Innovative • Cost Structure Excellence Solutions Optimization • Xylem Total Care • Invest in Growth • Business • Application Platforms Simplification Expertise • Accelerate • Oper
Slide 12: Revenue Profile
Revenue Profile TTM Revenues As Reported • European Crisis • U.S. Industrial Slows • Fiscal Cliff / Super Storm Sandy ------------ Public Utility Large Capital Project Delays ------------ 2011 2012 2013 • Total Growth +19% • Organic Revenue Flat • 1Q - Down MSD • Organic Revenue +7% • Weak End Marke
Slide 13: End Markets
End Markets Projected ‘13 XYL Growth Industrial Flat to Up Low Single • U.S. Slight 2H Improvement (~ 43% of ’12 Revenue) Digit • Europe Challenged Public Utility • Stable OPEX Market Flat (~ 35% of ’12 Revenue) • No Change in Capital Projects Commercial Flat to Up Low Single • U.S. Flat Through 3Q
Slide 14: 2013 Financial Guidance Summary
2013 Financial Guidance Summary 2013 Full Year Growth Financial Outlook 2013E vs. 2012 Revenue (Mid-Point) Total Growth Organic Acquisition FX Xylem Consolidated ~$3,915M ~3 - 4% 0 - 1% 2% 1% Water Infrastructure ~$2,530M ~4 - 5% 0 - 1% 3% 1% Applied Water ~$1,450M ~1 - 2% 0 - 1% 0% 1% Segment Margi
Slide 15: 2013 Guidance
2013 Guidance EPS* & Operating Margin * (Guidance Mid-Point) $0.03 $1.85 $0.07 $1.77 $0.02 $- Higher Pension Net EPS Costs $(0.02) Benefit Driven by Tax Rate Reduction Adjusted Remaining FX/Acq Core European Adjusted FY’12 EPS 1xSpin Costs Operations Realignment FY’13 EPS OI% 12.9% (10) bps (40) bps
Slide 16: Summary
Summary 2012 Performance • Advanced Our Strategic Position • Deployed Innovative New Products & Services • Delivered Strong Financial Performance Despite Macro Challenges Looking Ahead to 2013 • Investing for Long-Term Growth • Restructuring & Realignment Actions Improve Competitive Position & Incre
Slide 17: Appendix
Appendix
Slide 18: Quarterly Financial Performance
Quarterly Financial Performance ($M, Except FY’10 Q1’11 Q2’11 Q3’11 Q4’11 FY’11 Q1’12 Q2’12 Q3’12 Q4’12 FY’12 EPS) Revenue 3,202 890 971 939 1,003 3,803 925 966 931 969 3,791 COGS 1,988 553 592 574 623 2,342 562 583 557 587 2,289 Gross Profit 1,214 337 379 365 380 1,461 363 383 374 382 1,502 SG&A 73
Slide 19: Non-GAAP Measures
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 evaluati
Slide 20: Organic & Constant Currency Revenue Growth
Non-GAAP Reconciliation: Organic & Constant Currency Revenue Growth Xylem Inc. Non-GAAP Reconciliation Reported vs. Organic & Constant Currency Revenue ($ Millions) (As ReportedGAAP) - (As AdjustedOrganic) - Constant Currency (A) (B) (C) (D) (E) (F) = B+C+D+E (G) = F/A (H) = (B + D) / A Change % Cha
Slide 21: Organic & Constant Currency Order Growth
Non-GAAP Reconciliation: Organic & Constant Currency Order Growth Xylem Inc. Non-GAAP Reconciliation Reported vs. Organic & Constant Currency Order Growth ($ Millions) (As ReportedGAAP) - (As AdjustedOrganic) - Constant Currency (A) (B) (C) (D) (E) (F) = B+C+D+E (G) = F/A (H) = (B + D) / A Change %
Slide 22: Adjusted Diluted EPS
Non-GAAP Reconciliation: Adjusted Diluted EPS Xylem Inc. Non-GAAP Reconciliation Adjusted Diluted EPS 2012 and 2011 ($ Millions, except per share amounts) Q1 2012 Q2 2012 Q3 2012 Q4 2012 YTD 2012 Net Income 63 89 72 73 297 Separation Costs, Net of Tax 4 4 3 5 16 Restructuring & Realignment, Net of T
Slide 23: Normalized and Adjusted EPS
Non-GAAP Reconciliation: Normalized and Adjusted EPS Xylem Inc. Non-GAAP Reconciliation Normalized and Adjusted Diluted EPS ($ Millions, except per share amounts) Q4 2011 Q4 2012 As Reported Adjustments Adjusted Adjustments Normalized As Reported Adjustments Adjusted Total Revenue 1,003 1,003 1,003
Slide 24: Operating Income
Non-GAAP Reconciliation: Operating Income Xylem Inc. Non-GAAP Reconciliation Adjusted Operating Income ($ Millions) Q4 YTD '12 '11 '12 '11 Total Revenue • Total Xylem 969 1,003 3,791 3,803 • Water Infrastructure 637 679 2,425 2,416 • Applied Water 346 336 1,424 1,444 Operating Income • Total Xylem 1
Slide 25: Free Cash Flow
Non-GAAP Reconciliation: Free Cash Flow Xylem Inc. Non-GAAP Reconciliation Net Cash - Operating Activities vs. Free Cash Flow Years Ended December 31, 2012 and 2011 ($ Millions) Year Ended 2012 2011 Net Cash - Operating Activities 396 449 Capital Expenditures (112) (126) Free Cash Flow, including se
Slide 26: Xylem EBITDA & Adj. EBITDA
Non-GAAP Reconciliation: Xylem EBITDA & Adj. EBITDA Xylem Inc. Non-GAAP Reconciliation EBITDA and Adjusted EBITDA by Quarter Total Xylem ($ Millions) 2012 Q1 Q2 Q3 Q4 YTD Income Before Taxes 84 115 100 89 388 Interest Expense (Income), net 13 13 12 13 51 Depreciation 23 21 24 26 94 Amortization 11 1
Slide 27: Water Infrastructure EBITDA & Adj. EBITDA
Non-GAAP Reconciliation: Water Infrastructure EBITDA & Adj. EBITDA Xylem Inc. Non-GAAP Reconciliation EBITDA and Adjusted EBITDA by Quarter Water Infrastructure ($ Millions) 2012 Q1 Q2 Q3 Q4 YTD Income Before Taxes 75 93 86 88 342 Interest Expense (Income), net - - (1) - (1) Depreciation 16 15 17 20
Slide 28: Applied Water EBITDA & Adj. EBITDA
Non-GAAP Reconciliation: Applied Water EBITDA & Adj. EBITDA Xylem Inc. Non-GAAP Reconciliation EBITDA and Adjusted EBITDA by Quarter Applied Water ($ Millions) 2012 Q1 Q2 Q3 Q4 YTD Income Before Taxes 40 52 43 35 170 Interest Expense (Income), net - - - - - Depreciation 6 6 6 5 23 Amortization 1 1 1
Slide 29: Guidance
Non-GAAP Reconciliation: Guidance Xylem Inc. Non-GAAP Reconciliation Guidance ($ Millions, except per share amounts) Illustration of Mid Point Guidance 2013 Guidance FY '12 FY '13 As Reported Adjustments Adjusted As Projected Adjustments Adjusted Total Revenue 3,791 3,791 3,915 3,915 Segment Operati
Slide 30: Adj. Operating Income & Margin
Non-GAAP Reconciliation: Adj. Operating Income & Margin Xylem Inc. Non-GAAP Reconciliation Adjusted Operating Income ($ Millions) Mid Point Guidance 2008 2009 2010 2011 2012 2013E Revenue 3,291 2,849 3,202 3,803 3,791 3,915 Operating Income 315 276 388 395 443 428 Operating Margin 9.6% 9.7% 12.1% 10
Slide 31: Investor Relations Contacts
NYSE: XYL You may scan the QR code for direct access to the Xylem IR app for iPad® Phil De Sousa, Investor Relations Officer mobile devices. (914) 323-5930 Janice Tedesco, Investor Relations Coordinator (914) 323-5931 Apple and iPad are registered trademarks http://investors.xyleminc.com of Apple In