Slide 1: Xylem Inc. Q3 2013 Earnings Release
Exhibit 99.2 XYLEM INC. Q3 2013 EARNINGS RELEASE OCTOBER 29, 2013
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS Thisdocumentcontainsinformationthat mayconstitute“forward-lookingstatements.”Forward-lookingstatementsbytheir natureaddressmattersthat are,to differentdegrees,uncertain.Generally,the words“anticipate,”“estimate,”“expect,” “project,”“intend,”“plan,”“believe,”“target”andsimi
Slide 3: Q3'13 Business Update
Q3’13 BUSINESS UPDATE Strong 3rd Quarter Performance Returnto OrganicRevenue*Growth (+1%);OrganicOrders*(+6%)…Solid Backlog OperatingMargin* of 13.5%(Up60 Bps),With StrongIncrementalPerformance EPS*$0.49 Up11%…RaisingFullYearGuidance Enhancing ShareholderReturns…DeployingCapitalintoShareRepurchases
Slide 4: Q3'13 Xylem Performance
Q3’13 XYLEM PERFORMANCE REVENUE Q3 GROWTH ORGANIC PERFORMANCE (Dollars, In Millions) Organic +1% By End Market By Geography 931 965 Industrial Europe Acquisitions +2% Public Utility U.S. Constant +4% +4% Currency Commercial Emerging Markets (Note Rounding Impacts Sum Total) Residential + Double-Digi
Slide 5: Q3'13 Xylem Performance: EPS
Q3’13 XYLEM PERFORMANCE EPS* + Organic Revenue Growth $0.49 + Strong Incremental Margins Driven by Productivity & Strict $0.44 Cost Management +11% + Restructuring Savings $0.03 + European Realignment $0.01 – Unfavorable Mix/Price $0.02 Adjusted Adjusted – Pension/1x Separation Q3'12 EPS Q3'13 EPS H
Slide 6: Q3'13 Water Infrastructure Performance
Q3’13 WATER INFRASTRUCTURE PERFORMANCE REVENUE (Organic Performance) Q3 GROWTH Transport+2%;Treatment-2%;TestFlat (Dollars, In Millions) + EuropeUp LowSingleDigits Organic +1% + TransportNorth/CentralStrength…SouthWeak 619 – Treatment…PYBiogas& UKProjectsCompare 595 Acquisitions +4% – U.S.Down1% Con
Slide 7: Q3'13 Applied Water Performance
Q3’13 APPLIED WATER PERFORMANCE REVENUE (Organic Performance) Q3 GROWTH (Dollars, In Millions) Building Svcs +1%; Ind’l Water +2%; Irrigation +2% Organic +2% + Emerging Markets Up Double-Digits 350 360 Acquisition 0% + China Exceptionally StrongIndustrial … Water Projects (Offshore O&G Fire Pump Pro
Slide 8: Xylem Financial Position
XYLEM FINANCIAL POSITION CASH DRIVERS CAPITAL SUMMARY (Dollars, In Millions) September 30, 2013 (Dollars, In Millions) 169 107 172 Cash 394 504 394 Debt 1,202 Net Debt 808 Shareholders’ Equity 2,158 Cash Operating Dividends Acquisitions Cash Net Capital 2,966 Dec. 2012 Activities & Share & Capex Sep
Slide 9: Xylem Guidance Update
XYLEM GUIDANCE UPDATE FY REVENUE Mid - Point • Internal Growth Initiatives & Improved Market Conditions 3.8B Drive Top Line Revision 3.7B - Europe Stabilizing, U.S. Stable, Emerging Markets Continue to Grow • Implied 4Q Revenue $965M; EPS* $0.51 Previous Current Guidance Outlook - Solid Backlog of $
Slide 10: 2013 Financial Guidance Summary
2013 FINANCIAL GUIDANCE SUMMARY 2013 Full Year Growth (Dollars In Millions, Except per Share Data) Financial Outlook 2013E vs. 2012 Revenue (Mid-Point) Total Growth Organic Acquisition FX Xylem Consolidated ~$3,770 ~ -1% ~ -2% 2% -1% Water Infrastructure ~$2,405 ~ -1% ~ -3% 3% -1% Applied Water ~$1,
Slide 11: Xylem 3Q Earnings Summary
XYLEM 3Q EARNINGS SUMMARY Strong rd 3 Quarter Performance Raising … 2013 Guidance Enhancing Shareholder Returns Deploying … Capital into Share Repurchases Prioritizing Initiatives & Driving Productivity Focused on Execution & Accountability to Provide for Better Visibility Identifying Actions to Dri
Slide 12: Non-GAAP Measures
NON-GAAP MEASURES Management views key performance indicators including revenue, gross margins, segment operating income and margins, orders growth, free cash flow, working capital, and backlog, among others. In addition, we consider certain measures to be useful to management and investors evaluati
Slide 13: Non-GAAP Reconciliation: Organic & Constant Currency Revenue Growth
NON-GAAP RECONCILIATION: ORGANIC & CONSTANT CURRENCY REVENUE GROWTH Reported vs. Organic & Constant Currency Revenue ($ Millions) (As Reported GAAP) - (As AdjustedOrganic) - Constant Currency (A) (B) (C) (D) (E) (F) = B+C+D+E (G) = F/A (H) = (F C) - /A Change % Change Acquisitions / Change % Change
Slide 14: Non-GAAP Reconciliation: Organic & Constant Currency Order Growth
NON-GAAP RECONCILIATION: ORGANIC & CONSTANT CURRENCY ORDER GROWTH Reported vs. Organic & Constant Currency Order Growth ($ Millions) (As Reported GAAP) - (As AdjustedOrganic) - Constant Currency (A) (B) (C) (D) (E) (F) = B+C+D+E (G) = F/A (H) = (F C) - /A Change % Change Acquisitions / Change % Chan
Slide 15: Non-GAAP Reconciliation: Adjusted Diluted EPS
NON-GAAP RECONCILIATION: ADJUSTED DILUTED EPS ($ Millions, except per share amounts) Q3 2012 Q3 2013 As Reported Adjustments Adjusted As Reported Adjustments Adjusted Total Revenue 931 931 965 965 Operating Income 111 9 a 120 98 32 c 130 Operating Margin 11.9% 12.9% 10.2% 13.5% Interest Expense (14)
Slide 16: Non-GAAP Reconciliation: Adj. Operating Income and Margin
NON-GAAP RECONCILIATION: ADJ. OPERATING INCOME AND MARGIN ($ Millions) Q3 Q3 YTD '13 '12 '13 '12 Total Revenue • Total Xylem 965 931 2,804 2,822 • Water Infrastructure 619 595 1,766 1,788 • Applied Water 360 350 1,086 1,078 Operating Income • Total Xylem 98 111 234 339 • Water Infrastructure 88 85 1
Slide 17: Non-GAAP Reconciliation: Free Cash Flow
NON-GAAP RECONCILIATION: FREE CASH FLOW Net Cash - Operating Activities vs. Free Cash Flow ($ Millions) Nine Months Ended 2013 2012 Net Cash - Operating Activities $ 163 $ 230 Capital Expenditures (91) (81) Free Cash Flow, including separation costs 72 149 Cash Paid for Separation Costs (incl. Capex
Slide 18: Non-GAAP Reconciliation: Xylem EBITDA & Adj. EBITDA
NON-GAAP RECONCILIATION: XYLEM EBITDA & ADJ. EBITDA EBITDA and Adjusted EBITDA by Quarter ($ Millions) 2013 Q1 Q2 Q3 Q4 Total Pre-Tax Income 51 57 83 191 Interest Expense (Income), net 12 13 14 39 Depreciation 25 24 23 72 Amortization 12 13 13 38 Stock Compensation 6 6 9 21 EBITDA 106 113 142 361 Re
Slide 19: Non-GAAP Reconciliation: Water Infrastructure EBITDA & Adj. EBITDA
NON-GAAP RECONCILIATION: WATER INFRASTRUCTURE EBITDA & ADJ. EBITDA ($ Millions) 2013 Q1 Q2 Q3 Q4 Total Pre-Tax Income 42 43 87 172 Interest Expense (Income), net - (1) - (1) Depreciation 19 17 16 52 Amortization 9 11 11 31 Stock Compensation 1 1 1 3 EBITDA 71 71 115 257 Restructuring & Realignment 1
Slide 20: Non-GAAP Reconciliation: Applied Water EBITDA & Adj. EBITDA
NON-GAAP RECONCILIATION: APPLIED WATER EBITDA & ADJ. EBITDA ($ Millions) 2013 Q1 Q2 Q3 Q4 Total Pre-Tax Income 40 45 40 125 Interest, net - - - - Depreciation 6 5 6 17 Amortization 2 1 1 4 Stock Compensation 1 - 1 2 EBITDA 49 51 48 148 Restructuring & Realignment 2 6 4 12 Adjusted EBITDA 51 57 52 16
Slide 21: Non-GAAP Reconciliation: Guidance
NON-GAAP RECONCILIATION: GUIDANCE 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 3,770 3,770 Segment Operating Income 512 30 a 542 425 73 c 498
Slide 22: Non-GAAP Reconciliation: Adjusted Operating Income
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 3,770 Operating Income 315 276 388 395 443 347 Operating Margin 9.6% 9.7% 12.1% 10.4% 11.7% 9.2% Restructuring, Realignment & Special Charges 41 31