Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
In Billions, except Share data, unless otherwise specified | Dec. 31, 2013 | Jan. 31, 2014 | Jun. 30, 2013 |
Document and Entity Information [Abstract] | ' | ' | ' |
Entity Registrant Name | 'Xylem Inc. | ' | ' |
Entity Central Index Key | '0001524472 | ' | ' |
Document Type | '10-K | ' | ' |
Document Period End Date | 31-Dec-13 | ' | ' |
Amendment Flag | 'false | ' | ' |
Document Fiscal Year Focus | '2013 | ' | ' |
Document Fiscal Period Focus | 'FY | ' | ' |
Current Fiscal Year End Date | '--12-31 | ' | ' |
Entity Well-known Seasoned Issuer | 'Yes | ' | ' |
Entity Voluntary Filers | 'No | ' | ' |
Entity Current Reporting Status | 'Yes | ' | ' |
Entity Filer Category | 'Large Accelerated Filer | ' | ' |
Entity Public Float | ' | ' | $5 |
Entity Common Stock, Shares Outstanding | ' | 184,681,473 | ' |
Consolidated_and_Combined_Inco
Consolidated and Combined Income Statements (USD $) | 12 Months Ended | ||
In Millions, except Share data in Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Income Statement [Abstract] | ' | ' | ' |
Revenue | $3,837 | $3,791 | $3,803 |
Cost of revenue | 2,338 | 2,289 | 2,342 |
Gross profit | 1,499 | 1,502 | 1,461 |
Selling, general and administrative expenses | 986 | 914 | 877 |
Research and development expenses | 104 | 106 | 100 |
Separation costs | 4 | 22 | 87 |
Restructuring and asset impairment charges | 42 | 17 | 2 |
Operating income | 363 | 443 | 395 |
Interest expense | 55 | 55 | 17 |
Other non-operating (expense) income, net | -10 | 0 | 5 |
Income before taxes | 298 | 388 | 383 |
Income tax expense | 70 | 91 | 104 |
Net income | $228 | $297 | $279 |
Earnings per share: | ' | ' | ' |
Basic (in dollars per share) | $1.23 | $1.60 | $1.51 |
Diluted (in dollars per share) | $1.22 | $1.59 | $1.50 |
Weighted average number of shares – Basic | 185,216 | 185,784 | 185,059 |
Weighted average number of shares – Diluted | 186,038 | 186,230 | 185,324 |
Consolidated_and_Combined_Stat
Consolidated and Combined Statements of Comprehensive Income (USD $) | 12 Months Ended | |||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||
Statement of Other Comprehensive Income [Abstract] | ' | ' | ' | |||
Net income | $228 | $297 | $279 | |||
Other comprehensive income, before tax: | ' | ' | ' | |||
Foreign currency translation adjustment | 15 | 48 | -61 | |||
Net change in cash flow hedges: | ' | ' | ' | |||
Unrealized gains | 1 | [1] | 4 | [1] | 0 | [1] |
Amount of gain reclassified into net income | 0 | -3 | 0 | |||
Net change in postretirement benefit plans: | ' | ' | ' | |||
Net loss | 34 | -84 | -74 | |||
Prior service cost | 4 | -1 | 0 | |||
Amortization of prior service cost | 1 | 1 | 1 | |||
Amortization of net actuarial loss | 17 | 11 | 2 | |||
Settlement | 0 | 2 | 0 | |||
Foreign Exchange | 2 | -8 | 0 | |||
Other comprehensive income (loss), before tax | 74 | -30 | -132 | |||
Income tax expense (benefits) related to other comprehensive loss | 22 | -23 | -14 | |||
Other comprehensive income (loss), net of tax | 52 | -7 | -118 | |||
Comprehensive income | $280 | $290 | $161 | |||
[1] | Effective portion |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $533 | $504 |
Receivables, less allowances for discounts and doubtful accounts of $31 and $34 in 2013 and 2012, respectively | 817 | 776 |
Inventories, net | 475 | 443 |
Prepaid and other current assets | 143 | 110 |
Deferred income tax assets | 41 | 41 |
Total current assets | 2,009 | 1,874 |
Property, plant and equipment, net | 488 | 487 |
Goodwill | 1,718 | 1,647 |
Other intangible assets, net | 488 | 484 |
Other non-current assets | 193 | 187 |
Total assets | 4,896 | 4,679 |
Current liabilities: | ' | ' |
Accounts payable | 332 | 332 |
Accrued and other current liabilities | 479 | 443 |
Short-term borrowings and current maturities of long-term debt | 42 | 6 |
Total current liabilities | 853 | 781 |
Long-term debt | 1,199 | 1,199 |
Accrued postretirement benefits | 348 | 400 |
Deferred income tax liabilities | 191 | 173 |
Other non-current accrued liabilities | 64 | 52 |
Total liabilities | 2,655 | 2,605 |
Commitment and Contingencies (Note 19) | ' | ' |
Common Stock — par value $0.01 per share: | ' | ' |
Authorized 750.0 shares, issued 187.6 and 186.2 shares in 2013 and 2012, respectively | 2 | 2 |
Capital in excess of par value | 1,753 | 1,706 |
Retained earnings | 405 | 264 |
Treasury stock – at cost 3.0 shares and 0.5 shares in 2013 and 2012, respectively | -86 | -13 |
Accumulated other comprehensive income | 167 | 115 |
Total stockholders’ equity | 2,241 | 2,074 |
Total liabilities and stockholders’ equity | $4,896 | $4,679 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, except Share data, unless otherwise specified | ||
Statement of Financial Position [Abstract] | ' | ' |
Allowances for discounts and doubtful accounts on receivables | $31 | $34 |
Common Stock, par value (in dollars per share) | $0.01 | $0.01 |
Common Stock, shares authorized | 750,000,000 | 750,000,000 |
Common Stock, shares issued | 187,600,000 | 186,200,000 |
Treasury Stock, shares | 3,000,000 | 500,000 |
Consolidated_and_Combined_Stat1
Consolidated and Combined Statements of Cash Flows (Unaudited) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Operating Activities | ' | ' | ' |
Net income | $228 | $297 | $279 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' | ' |
Depreciation | 99 | 94 | 93 |
Amortization | 51 | 48 | 44 |
Deferred income taxes | -14 | 1 | 8 |
Share-based compensation | 27 | 22 | 13 |
Non-cash separation costs | 0 | 0 | 10 |
Restructuring and asset impairment charges, net | 42 | 17 | 2 |
Other Noncash Income | 15 | 2 | 5 |
Payments of restructuring | -35 | -9 | -7 |
Contributions to postretirement benefit plans | -43 | -46 | -16 |
Changes in assets and liabilities (net of acquisitions): | ' | ' | ' |
Changes in receivables | -47 | 2 | -61 |
Changes in inventories | -39 | 5 | -18 |
Changes in accounts payable | 4 | -4 | -9 |
Changes in accrued liabilities | 18 | -28 | 53 |
Changes in accrued taxes | 20 | -17 | 56 |
Net changes in other assets and liabilities | -2 | 12 | -3 |
Net Cash — Operating activities | 324 | 396 | 449 |
Investing Activities | ' | ' | ' |
Capital expenditures | -126 | -112 | -126 |
Proceeds from the sale of property, plant and equipment | 6 | 5 | 11 |
Acquisitions of businesses and assets, net of cash acquired | -81 | -41 | -309 |
Other, net | 2 | 1 | 1 |
Net Cash — Investing activities | -199 | -147 | -423 |
Financing Activities | ' | ' | ' |
Net transfer to former parent | 0 | -9 | -995 |
Issuance of short-term debt | 39 | 13 | 5 |
Issuance of senior notes, net of discount | 0 | 0 | 1,198 |
Principal payments of debt and capital lease obligations | -2 | -14 | -8 |
Purchase of Xylem common stock | -73 | -13 | 0 |
Proceeds from exercise of employee stock options | 22 | 24 | 1 |
Excess Tax Benefit (Tax Deficiency) from Share-based Compensation, Financing Activities | 1 | 0 | 0 |
Payments of debt issuance costs | 0 | 0 | -10 |
Dividends paid | -87 | -75 | -19 |
Net Cash — Financing activities | -100 | -74 | 172 |
Effect of exchange rate changes on cash | 4 | 11 | -11 |
Net change in cash and cash equivalents | 29 | 186 | 187 |
Cash and cash equivalents at beginning of year | 504 | 318 | ' |
Cash and cash equivalents at end of year | 533 | 504 | 318 |
Cash paid during the year for: | ' | ' | ' |
Interest | 51 | 53 | 0 |
Income taxes (net of refunds received) | $65 | $104 | $64 |
Consolidated_and_Combined_Stat2
Consolidated and Combined Statements of Changes in Stockholders' Equity (USD $) | Total | Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Treasury Stock | Parent Company Investment |
In Millions, unless otherwise specified | |||||||
Balance at Dec. 31, 2010 | $2,723 | $0 | $0 | $4 | $37 | $0 | $2,682 |
Stockholders' Equity [Roll Forward] | ' | ' | ' | ' | ' | ' | ' |
Net income | 220 | ' | ' | ' | ' | ' | 220 |
Other comprehensive loss, net | -118 | ' | ' | ' | -118 | ' | ' |
Assumption of accumulated unrealized gains (losses) on postretirement benefit plans, net of tax of $32 | -73 | ' | ' | ' | -73 | ' | ' |
Contributed currency translation adjustment | 276 | ' | ' | ' | 276 | ' | ' |
Change in parent company investment | -1,240 | ' | ' | ' | ' | ' | -1,240 |
Conversion of net investment | 0 | 2 | 1,660 | ' | ' | ' | -1,662 |
Cash dividends paid ($0.1012 per share) | -19 | ' | ' | -19 | ' | ' | ' |
Stock incentive plans and related tax benefits | 3 | ' | 3 | ' | ' | ' | ' |
Balance at Oct. 30, 2011 | ' | ' | ' | ' | ' | ' | ' |
Balance at Oct. 31, 2011 | ' | ' | ' | ' | ' | ' | ' |
Stockholders' Equity [Roll Forward] | ' | ' | ' | ' | ' | ' | ' |
Net income | 59 | ' | ' | 59 | ' | ' | ' |
Balance at Dec. 31, 2011 | 1,831 | 2 | 1,663 | 44 | 122 | 0 | 0 |
Stockholders' Equity [Roll Forward] | ' | ' | ' | ' | ' | ' | ' |
Net income | 297 | ' | ' | 297 | ' | ' | ' |
Other comprehensive loss, net | -7 | ' | ' | ' | -7 | ' | ' |
Cash dividends paid ($0.1012 per share) | -77 | ' | ' | -77 | ' | ' | ' |
Stock incentive plans and related tax benefits | 43 | ' | 43 | ' | ' | ' | ' |
Repurchase of common stock | -13 | ' | ' | ' | ' | -13 | ' |
Balance at Dec. 31, 2012 | 2,074 | 2 | 1,706 | 264 | 115 | -13 | 0 |
Stockholders' Equity [Roll Forward] | ' | ' | ' | ' | ' | ' | ' |
Net income | 228 | ' | ' | 228 | ' | ' | ' |
Other comprehensive loss, net | 52 | ' | ' | ' | 52 | ' | ' |
Cash dividends paid ($0.1012 per share) | -87 | ' | ' | -87 | ' | ' | ' |
Stock incentive plans and related tax benefits | 47 | ' | 47 | ' | ' | ' | ' |
Repurchase of common stock | -73 | ' | ' | ' | ' | -73 | ' |
Balance at Dec. 31, 2013 | $2,241 | $2 | $1,753 | $405 | $167 | ($86) | $0 |
Consolidated_and_Combined_Stat3
Consolidated and Combined Statements of Changes in Stockholders' Equity (Parenthetical) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Cash dividends paid per share | $465,600 | $0.40 | $0.10 |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 12 Months Ended | |
Dec. 31, 2013 | ||
Accounting Policies [Abstract] | ' | |
Summary of Significant Accounting Policies | ' | |
Summary of Significant Accounting Policies | ||
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 two segments, Water Infrastructure and Applied Water. The Water Infrastructure segment focuses on the transportation, treatment and testing of water, offering a range of products including water and wastewater pumps, treatment and testing equipment, and controls and systems. The Applied Water segment encompasses all the uses of water and focuses on the residential, commercial, industrial and agricultural markets. The Applied Water segment’s major products include pumps, valves, heat exchangers, controls and dispensing equipment. Xylem Inc. was incorporated in Indiana on May 4, 2011. | ||
On October 31, 2011 (the "Distribution Date"), ITT Corporation (“ITT”) completed the Spin-off (the “Spin-off”) of Xylem, formerly ITT’s water equipment and services businesses. The Spin-off was completed pursuant to the Distribution Agreement, dated as of October 25, 2011 (the “Distribution Agreement”), among ITT, Exelis Inc. (“Exelis”) and Xylem. | ||
Hereinafter, except as otherwise indicated or unless the context otherwise requires, “Xylem,” “we,” “us,” “our” and “the Company” refer to Xylem Inc. and its subsidiaries. References in the notes to the consolidated and combined financial statements to “ITT” or “parent” refers to ITT Corporation and its consolidated subsidiaries (other than Xylem Inc.). | ||
Basis of Presentation | ||
The consolidated and combined 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 intracompany transactions between our businesses have been eliminated. On and prior to the Distribution Date, our financial position and results of operations consisted of the water equipment and services businesses of ITT Corporation (“WaterCo”) and have been derived from ITT’s historical accounting records and are presented on a carve-out basis through our Distribution Date, while our financial results for Xylem post Spin-off are prepared on a stand-alone basis. As such, our Consolidated Statements of Income, Comprehensive Income and Cash Flows for the periods ended December 31, 2013 and 2012 consist of the consolidated results of Xylem on a stand-alone basis. The Consolidated and Combined Statements of Income, Comprehensive Income and Cash Flows for the twelve months ended December 31, 2011 consist of the consolidated results of Xylem on a stand-alone basis for two months of November and December and the combined results of operations of WaterCo for ten months on a carve-out basis. | ||
For periods prior to the Spin-off, our consolidated and combined financial statements include expense allocations for (i) certain corporate functions historically provided by ITT, including, but not limited to, finance, legal, information technology, human resources, communications, ethics and compliance, and shared services, (ii) employee benefits and incentives, and (iii) share-based compensation. These expenses have been allocated to us on the basis of direct usage when identifiable, with the remainder allocated on the basis of revenue, headcount or other measures. | ||
We consider the basis on which the expenses have been allocated to be a reasonable reflection of the utilization of services provided to or the benefit received by us during the periods presented. The allocations may not, however, reflect the expense we would have incurred as an independent, publicly traded company for the periods presented prior to the Distribution Date. Actual costs that may have been incurred if we had been a stand-alone company would depend on a number of factors, including the chosen organizational structure, what functions were outsourced or performed by employees and strategic decisions made in areas such as information technology and infrastructure. Subsequent to the Spin-off, we have performed these functions using our own resources or purchased services, certain of which have been provided by ITT or Exelis under the Transition Services Agreement ("TSA"). As of December 31, 2013, we have completed substantially all services under the TSA. | ||
Certain prior year amounts have been reclassified to conform to the current year presentation. | ||
Use of Estimates | ||
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 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, postretirement obligations and assets, revenue recognition, income tax contingency accruals and valuation allowances, goodwill and indefinite lived intangible impairment testing and contingent liabilities. Actual results could differ from these estimates. | ||
Consolidation Principles | ||
We consolidate companies in which we have a controlling financial interest or when Xylem is considered the primary beneficiary of a variable interest entity. We account for investments in companies over which we have the ability to exercise significant influence but do not hold a controlling financial interest under the equity method, and we record our proportionate share of income or losses in the Consolidated and Combined Income Statements. Equity method investments are reviewed for impairment when events or circumstances indicate the investment may be other than temporarily impaired. This requires significant judgment, including an assessment of the investee’s financial condition, the possibility of subsequent rounds of financing, and the investee’s historical and projected results of operations. If the actual results of operations for the investee are significantly different from projections, we may incur future charges for the impairment of these investments. | ||
Foreign Currency Translation | ||
The national currencies of our foreign companies are generally the functional currencies. Balance sheet accounts are translated at the exchange rate in effect at the end of each period; income statement accounts are translated at the average rates of exchange prevailing during the period. Gains and losses on foreign currency translations are reflected in the cumulative translation adjustments component of stockholders’ equity. Net gains or losses from foreign currency transactions are reported currently in selling, general and administrative expenses. | ||
Revenue Recognition | ||
Revenue is recognized when persuasive evidence of an arrangement exists, the price is fixed or determinable, collectability is reasonably assured and delivery has occurred or services have been rendered. For product sales, other than long-term construction-type contracts, we recognize revenue at the time title and risks and rewards of ownership pass, which is generally when products are shipped. Certain contracts with customers require delivery, installation, testing, certification or other acceptance provisions to be satisfied before revenue is recognized. We recognize revenue on product sales to channel partners, including resellers, distributors or value-added solution providers at the time of sale when the channel partners have economic substance apart from Xylem and Xylem has completed its obligations related to the sale. Revenue from the rental of equipment is recognized over the rental period. Service revenue is recognized as services are performed. | ||
For agreements that contain multiple deliverables, we recognize revenue based on the relative selling price if the deliverable has stand-alone value to the customer and, in arrangements that include a general right of return relative to the delivered element, performance of the undelivered element is considered probable and substantially in the Company’s control. The selling price for a deliverable is based on vendor-specific objective evidence of selling price (“VSOE”), if available, third-party evidence of selling price (“TPE”), if VSOE is not available, or best estimated selling price, if neither VSOE nor TPE is available. | ||
The deliverables in our arrangements with multiple elements include various products and may include related services, such as installation and start-up services. We allocate arrangement consideration based on the relative selling prices of the separate units of accounting determined in accordance with the hierarchy described above. For deliverables that are sold separately, we establish VSOE based on the price when the deliverable is sold separately. We establish TPE, generally for services, based on prices similarly situated customers pay for similar services from third-party vendors. For those deliverables for which we are unable to establish VSOE or TPE, we estimate the selling price considering various factors including market and pricing trends, geography, product customization, and profit objectives. Revenue for multiple element arrangements is recognized when the appropriate revenue recognition criteria for the individual deliverable have been satisfied. | ||
Certain businesses enter into long-term construction-type sales contracts for which revenue is recognized under the percentage-of-completion method based upon percentage of costs incurred to total estimated costs. | ||
Shipping and Handling Costs | ||
Shipping and handling costs are recorded as a component of cost of revenue. | ||
Share-Based Compensation | ||
Share-based awards issued to employees and members of the Board of Directors include non-qualified stock options, restricted stock awards and performance-based awards. Compensation costs resulting from share-based payment transactions are recognized primarily within selling, general and administrative expenses, at fair value over the requisite service period (typically three years) on a straight-line basis. The calculated compensation cost is adjusted based on an estimate of awards ultimately expected to vest. For performance-based awards, the calculated compensation cost is adjusted based on an estimate of awards ultimately expected to vest and our assessment of the probable outcome of the performance condition.The fair value of a non-qualified stock option is determined on the date of grant using a binomial lattice pricing model incorporating multiple and variable assumptions over time, including assumptions such as employee exercise patterns, stock price volatility and changes in dividends. The fair value of restricted stock awards is determined using the closing price of our common stock on date of grant. The fair value of performance-based share awards at 100% target is determined using the closing price of our common stock on date of grant. | ||
Research and Development | ||
We conduct research and development activities, which consist primarily of the development of new products, product applications, and manufacturing processes. These costs are charged to expense as incurred. | ||
Exit and Disposal Costs | ||
We periodically initiate management-approved restructuring activities to achieve cost savings through reduced operational redundancies and to position ourselves strategically in the market in response to prevailing economic conditions and associated customer demand. Costs associated with restructuring actions can include severance, infrastructure charges to vacate facilities or consolidate operations, contract termination costs and other related charges. For involuntary separation plans, a liability is recognized when it is probable and reasonably estimable. For voluntary separation plans, a liability is recognized when the employee irrevocably accepts the voluntary termination. For one-time termination benefits, such as additional severance pay or benefit payouts, and other exit costs, such as lease termination costs, the liability is measured and recognized initially at fair value in the period in which the liability is incurred, with subsequent changes to the liability recognized as adjustments in the period of change. | ||
Deferred Financing Costs | ||
Deferred financing costs represent costs incurred in conjunction with our debt financing activities and are capitalized in other assets and amortized over the life of the related financing arrangements. If the debt is retired early, the related unamortized deferred financing costs are written off in the period the debt is retired and are recorded in the results of operations under the caption “interest expense.” | ||
Income Taxes | ||
Income taxes are calculated using the asset and liability method. Deferred tax assets and liabilities are determined based on the estimated future tax effects of temporary differences between the financial statement carrying amounts and the tax bases of assets and liabilities, as measured by the current enacted tax rates. | ||
We maintain valuation allowances when it is more likely than not that all or a portion of a deferred asset will not be realized. The valuation allowance is intended in part to provide for the uncertainty regarding the ultimate utilization of our U.S. capital loss carryforwards, U.S. foreign tax credit carryovers, and foreign net operating loss carryforwards. In determining whether a valuation allowance is warranted, we consider all positive and negative evidence and all sources of taxable income such as prior earnings history, expected future earnings, carryback and carryforward periods and tax strategies to estimate if sufficient future taxable income will be generated to realize the deferred tax asset. The assessment of the adequacy of our valuation allowance is based on our estimates of taxable income by jurisdiction in which we operate and the period over which our deferred tax assets will be recoverable. In the event that actual results differ from these estimates, or we adjust these estimates in future periods for current trends or expected changes in our estimating assumptions, we may need to modify the level of valuation allowance that could materially impact our business, financial condition and results of operations. | ||
Our effective tax rate reflects the impact of certain undistributed foreign earnings for which we have not provided U.S. taxes because we plan to reinvest such earnings indefinitely outside the United States. We plan foreign earnings remittance amounts based on projected cash flow needs, as well as the working capital and long-term investment requirements of our foreign subsidiaries and our domestic operations. Based on these assumptions, we estimate the amount we will distribute to the United States and provide the U.S. federal taxes due on these amounts. Material changes in our estimates of cash, working capital and long-term investment requirements in the various jurisdictions in which we do business could impact our effective tax rate. | ||
Tax benefits are recognized for an uncertain tax position when, in management’s judgment, it is more likely than not that the position will be sustained upon examination by a taxing authority. For a tax position that meets the more-likely-than-not recognition threshold, the tax benefit is measured as the largest amount that is judged to have a greater than 50% likelihood of being realized upon ultimate settlement with a taxing authority. The liability associated with unrecognized tax benefits is adjusted periodically due to changing circumstances and when new information becomes available. Such adjustments are recognized in the period in which they are identified. The effective tax rate includes the net impact of changes in the liability for unrecognized tax benefits and subsequent adjustments as considered appropriate by management. While it is often difficult to predict the final outcome or the timing of resolution of any particular tax matter, we believe our liability for unrecognized tax benefits is adequate. We classify interest relating to unrecognized tax benefits as a component of other non-operating (expense) income, net and tax penalties as a component of income tax expense in our Consolidated and Combined Income Statements. | ||
Earnings Per Share | ||
We present two calculations of earnings per share (“EPS”). “Basic” EPS equals net income divided by weighted average shares outstanding during the period. “Diluted” EPS equals net income divided by the sum of weighted average common shares outstanding during the period plus potentially dilutive shares. Potentially dilutive common shares that are anti-dilutive are excluded from diluted EPS. | ||
Basic and Diluted EPS for all periods prior to the Spin-off reflect the number of distributed shares on the Distribution Date, or 184.6 million shares. For our 2011 year to date calculations, these shares are treated as issued and outstanding from January 1, 2011 for purposes of calculating historical basic EPS. At the time of the Spin-off, ITT stock options and restricted stock awards were converted to awards of Xylem, and therefore there were no dilutive securities outstanding for historical periods. For 2011, the Company determined our weighted average dilutive shares outstanding assuming that the date of our separation from ITT was the beginning of the period. | ||
Cash Equivalents | ||
We consider all liquid investments purchased with an original maturity of three months or less to be cash equivalents. | ||
Receivables and Allowance for Doubtful Accounts and Cash Discounts | ||
Trade receivables primarily comprise uncollected amounts owed to us from transactions with customers and are presented net of allowances for doubtful accounts and cash discounts. | ||
We determine our allowance for doubtful accounts using a combination of factors to reduce our trade receivable balances to their estimated net realizable amount. We maintain an allowance for doubtful accounts based on a variety of factors, including the length of time receivables are past due, macroeconomic trends and conditions, significant one-time events, historical experience and the financial condition of customers. We record a specific reserve for individual accounts when we become aware of specific customer circumstances, such as in the case of bankruptcy filings or deterioration in the customer’s operating results or financial position. The past due or delinquency status of a receivable is based on the contractual payment terms of the receivable. If circumstances related to the specific customer change, we adjust estimates of the recoverability of receivables as appropriate. We determine our allowance for cash discounts primarily based on historical experience with customers. | ||
Credit risk with respect to accounts receivable is generally diversified due to the large number of entities comprising our customer base and their dispersion across many different geographical regions. We perform ongoing credit evaluations of the financial condition of our third-party distributors, resellers and other customers and require collateral, such as letters of credit and bank guarantees, in certain circumstances. As of December 31, 2013 and 2012 we do not believe we have any significant concentrations of credit risk. | ||
Inventories | ||
Inventories, which include the costs of material, labor and overhead, are stated at the lower of cost or market using the first in, first out ("FIFO") method. Estimated losses from obsolete and slow-moving inventories are recorded to reduce inventory values to their estimated net realizable value. Our manufacturing operations recognize costs of sales using standard costs with full overhead absorption, which generally approximates actual cost. | ||
Property, Plant and Equipment | ||
These assets are recorded at historical cost and are depreciated using the straight-line method of depreciation over the estimated useful lives as follows: | ||
Estimated Life | ||
Buildings and improvements | 5 to 40 years | |
Machinery and equipment | 2 to 10 years | |
Furniture and fixtures | 3 to 7 years | |
Equipment held for lease or rental | 2 to 10 years | |
Leasehold improvements are depreciated over the shorter of their estimated useful life or the term of the lease. Costs related to maintenance and repairs that do not prolong the assets' useful lives are expensed as incurred. | ||
Goodwill and Intangible Assets | ||
Goodwill represents purchase consideration paid in a business combination that exceeds the values assigned to the net assets of acquired businesses. Intangible assets include customer relationships, proprietary technology, brands and trademarks, patents and other intangible assets. Intangible assets with a finite life are amortized on a straight-line basis over an estimated economic useful life which ranges from 5 to 40 years and is included in selling, general and administrative expense. Certain of our intangible assets, namely certain brands and trademarks, have an indefinite life and are not amortized. | ||
Long-Lived Asset Impairment | ||
Long-lived assets, including intangible assets with finite lives, are amortized and tested for impairment whenever events or changes in circumstances indicate their carrying value may not be recoverable. We assess the recoverability of long-lived assets based on the undiscounted future cash flow the assets are expected to generate and recognize an impairment loss when estimated undiscounted future cash flows expected to result from the use of the asset plus net proceeds expected from disposition of the asset, if any, are less than the carrying value of the asset. When an impairment is identified, we reduce the carrying amount of the asset to its estimated fair value based on a discounted cash flow approach or, when available and appropriate, to comparable market values. | ||
Goodwill and indefinite-lived intangible assets are not amortized, but rather are tested for impairment annually (or more frequently if impairment indicators arise, such as changes to the reporting unit structure, significant adverse changes in the business climate or an adverse action or assessment by a regulator). We conduct our annual impairment testing on the first day of our fourth quarter. For goodwill, the impairment test is a two-step test. In the first step, the estimated fair value of each reporting unit is compared to the carrying value of the net assets assigned to that reporting unit. If the estimated fair value of the reporting unit exceeds its carrying value, goodwill is not impaired and the second step of the impairment test is not performed. If the carrying value of the reporting unit exceeds its estimated fair value, then the second step of the impairment test is performed in order to measure the impairment loss to be recorded, if any. If the carrying value of a reporting unit’s goodwill exceeds its implied fair value, then we record an impairment loss equal to the difference. We estimate the fair value of our reporting units and indefinite-lived intangible assets using an income approach. Under the income approach, we estimate fair value based on the present value of estimated future cash flows. | ||
Product Warranties | ||
We accrue for the estimated cost of product warranties at the time revenue is recognized and record it as a component of cost of revenue. Our product warranty liability reflects our best estimate of probable liability under the terms and conditions of our product warranties offered to customers. We estimate the liability based on our standard warranty terms, the historical frequency of claims and the cost to replace or repair our products under warranty. Factors that impact our warranty liability include the number of units sold, the length of warranty term, historical and anticipated rates of warranty claims and cost per claim. We assess the adequacy of our recorded warranty liabilities quarterly and adjust amounts as necessary. | ||
Postretirement Benefit Plans | ||
The determination of defined benefit pension and postretirement plan obligations and their associated costs requires the use of actuarial computations to estimate participant plan benefits to which the employees will be entitled. The significant assumptions primarily relate to discount rates, expected long-term rates of return on plan assets, rate of future compensation increases, mortality, termination, and other factors. We develop each assumption using relevant company experience in conjunction with market-related data for each individual country in which such plans exist. All actuarial assumptions are reviewed annually with third-party consultants and adjusted as necessary. For the recognition of net periodic postretirement cost, the calculation of the expected long-term rate of return on plan assets is generally derived using a market-related value of plan assets based on average asset values at the measurement date over the last five years. Actual results that differ from our assumptions are accumulated and amortized on a straight line basis only to the extent they exceed 10% of the higher of the market-related value or the projected benefit obligation, over the estimated remaining service period of active participants, or for plans with all or substantially all inactive participants, over the average remaining life expectancy. The fair value of plan assets is determined based on market prices or estimated fair value at the measurement date. | ||
We consider changes to a plan’s benefit formula that eliminate the accrual for future service but continue to allow for future salary increases (i.e. “soft freeze”) a curtailment. | ||
Business Combinations | ||
We allocate the purchase price of acquisitions to the tangible and intangible assets acquired, liabilities assumed, and non-controlling interests in the acquiree based on their estimated fair value at the acquisition date. Changes to the acquisition date provisional fair values prior to the expiration of the measurement period, a period not to exceed 12 months from date of acquisition, are recorded as an adjustment to the associated goodwill. Changes to the acquisition date fair values after expiration of the measurement period are recorded in earnings. The excess of the acquisition price over those estimated fair values is recorded as goodwill. Acquisition-related expenses and restructuring costs, if any, are recognized separately from the business combination and are expensed as incurred. | ||
Derivative Financial Instruments | ||
We record all derivatives on the balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on whether we have elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, including forecasted transactions, are considered cash flow hedges. Derivatives may also be designated as hedges of the foreign currency exposure of a net investment in a foreign operation. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. We may enter into derivative contracts that are intended to hedge certain risks economically, even though hedge accounting does not apply or we elect not to apply hedge accounting. | ||
The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges of foreign exchange risk is recorded in other comprehensive income ("OCI") and is subsequently reclassified into either revenue or cost of revenue (hedge of sales classified into revenue and hedge of purchases classified into cost of revenue) in the period that the hedged forecasted transaction affects earnings. Any ineffective portion of the change in fair value of the derivative is recognized directly in selling, general and administrative expenses. Our policy is to de-designate cash flow hedges at the time forecasted transactions are recognized as assets or liabilities on a business unit’s balance sheet and report subsequent changes in fair value through selling, general and administrative expenses where the gain or loss due to movements in currency rates on the underlying asset or liability is revalued. If it becomes probable that the originally forecasted transaction will not occur, the gain or loss related to the hedge recorded within accumulated other comprehensive income is immediately recognized into net income. | ||
Commitments and Contingencies | ||
We record accruals for commitments and loss contingencies for those which are both probable and for which the amount can be reasonably estimated. In addition, legal fees are accrued for cases where a loss is probable and the related fees can be reasonably estimated. Significant judgment is required to determine both probability and the estimated amount of loss. We review these accruals quarterly and adjust the accruals to reflect the impact of negotiations, settlements, rulings, advice of legal counsel, and other current information. | ||
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 estimated liability is reduced to reflect the anticipated participation of other potentially responsible parties in those instances where it is probable that such parties are legally responsible and financially capable of paying their respective shares of the relevant costs. These accruals are reviewed quarterly and are adjusted as assessment and remediation efforts progress or as additional technical or legal information becomes available. Actual costs to be incurred at identified sites in future periods may vary from the estimates, given inherent uncertainties in evaluating environmental exposures. Accruals for environmental liabilities are primarily included in other non-current liabilities at undiscounted amounts and exclude claims for recoveries from insurance companies or other third parties. | ||
Concentrations of Credit Risk | ||
Financial instruments that potentially subject us to significant concentrations of credit risk consist principally of cash and cash equivalents, and accounts receivable from trade customers. We maintain cash and cash equivalents and derivative contracts with various financial institutions. These financial institutions are located in many different geographical regions, and our policy is designed to limit exposure with any one institution. As part of our cash and risk management processes, we perform periodic evaluations of the relative credit standing of the financial institutions. We have not sustained any material credit losses during the previous three years from instruments held at financial institutions. We may utilize forward contracts to protect against the effects of foreign currency fluctuations. Such contracts involve the risk of non-performance by the counterparty. Credit risk with respect to accounts receivable is generally diversified due to the large number of entities comprising our customer base and their dispersion across many different industries and geographic regions. We perform ongoing credit evaluations of the financial condition of our third-party distributors, resellers and other customers and require collateral, such as letters of credit and bank guarantees, in certain circumstances. | ||
Substantially all of the cash and cash equivalents, including foreign cash balances, at December 31, 2013 and 2012 were uninsured. Foreign cash balances at December 31, 2013 and 2012 were $423 million and $401 million, respectively. | ||
Fair Value Measurements | ||
We determine fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. We use a hierarchical structure to prioritize the inputs to valuation techniques used to measure fair value into three broad levels. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1), then to quoted market prices for similar assets or liabilities in active markets (Level 2) and gives the lowest priority to unobservable inputs (Level 3). |
Recently_Issued_Accounting_Pro
Recently Issued Accounting Pronouncements | 12 Months Ended |
Dec. 31, 2013 | |
Accounting Changes and Error Corrections [Abstract] | ' |
Recently Issued Accounting Pronouncements | ' |
Recently Issued Accounting Pronouncements | |
Pronouncements Not Yet Adopted | |
In January 2014, the Financial Accounting Standards Board (“FASB”) issued guidance related to service concession arrangements. A service concession arrangement is an arrangement between a public-sector entity grantor and an operating entity under which the operating entity operates the grantor's infrastructure (for example, airports, roads and bridges). The guidance states that service concession arrangements should not be accounted for under the guidance of Topic 840, Leases, but rather other guidance as deemed appropriate. This guidance is effective for fiscal years beginning December 15, 2014. We are currently evaluating the impact of the guidance on our financial condition and results of operations. | |
In July 2013, the FASB issued guidance on the financial statement presentation of an unrecognized tax benefit. The guidance requires that an unrecognized tax benefit or a portion of an unrecognized tax benefit, be presented as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward. If an applicable deferred tax asset is not available or a company does not expect to use the applicable deferred tax asset, the unrecognized tax benefit should be presented in an entity's financial statements as a liability and should not be combined with a deferred tax asset. This guidance is effective for fiscal years beginning after December 15, 2013. The adoption of this guidance is not expected to have a material impact on our financial condition or results of operations. | |
In March 2013, the FASB issued guidance on the release of a cumulative translation adjustment ("CTA") related to an entity's investment in a foreign entity into income. The guidance requires such CTA to be released when there has been a: (1) sale of a subsidiary or group of net assets within a foreign entity and the sale represents the substantially complete liquidation of the investment in the foreign entity, (2) loss of a controlling financial interest in an investment in a foreign entity or (3) step acquisition for a foreign entity. This guidance is effective for fiscal years beginning after December 15, 2013. The impact of the guidance on our financial condition and results of operations will depend on the occurrence and the significance of transactions that meet the criteria described above. | |
In February 2013, the FASB issued guidance related to the measurement and disclosure of obligations resulting from joint and several liability arrangements. The new guidance requires companies to measure obligations resulting from joint and several liability arrangements as the sum of (1) the amount the company agreed to pay on the basis of its arrangement among co-obligors and (2) any additional amount the company expects to pay on behalf of its co-obligors. Additionally, the new guidance requires the disclosure of a description of the joint and several arrangement and the total outstanding amount of the obligation for all joint parties. This guidance is effective for fiscal years beginning after December 15, 2013. The adoption of this guidance is not expected to have a material impact on our financial condition or results of operations. | |
Recently Adopted Pronouncements | |
In February 2013, the FASB issued guidance regarding new disclosures for items reclassified out of accumulated other comprehensive income ("AOCI"). The guidance requires entities to present information about items reclassified out of AOCI by component. Additionally, entities are required to present either on the face of the statement where net income is presented or as a separate disclosure in the notes to the financial statements, significant amounts reclassified out of AOCI by the respective line items of net income. This guidance is effective for fiscal years beginning after December 15, 2012. The adoption of this guidance did not have a material impact on our financial statement presentation and disclosures. | |
In July 2012, the FASB provided companies with the option to make an initial qualitative evaluation, based on events and circumstances, to determine the likelihood of an impairment of an indefinite-lived intangible asset. The results of this qualitative assessment determine whether it is necessary to perform the currently required quantitative comparison of the indefinite-lived intangible asset's fair value to its carrying amount. If it is more likely than not that the fair value of the intangible asset is less than its carrying amount, a company would be required to perform the quantitative assessment. This guidance is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012 with early adoption permitted. The adoption of the guidance did not have a material impact on our financial condition and results of operations. | |
In September 2011, in conjunction with the assessment of the impairment of goodwill, the FASB provided companies with the option to make an initial qualitative evaluation, based on the entity’s events and circumstances, to determine the likelihood of goodwill impairment. The results of this qualitative assessment determine whether it is necessary to perform the currently required two-step impairment test. If it is more likely than not that the fair value of a reporting unit is less than its carrying amount, a company would be required to perform the two-step impairment test. We adopted this new guidance effective January 1, 2012. The adoption of this guidance did not have a material impact on our financial condition and results of operations. | |
In June 2011, the FASB issued authoritative guidance surrounding the presentation of comprehensive income, with an objective of increasing the prominence of items reported in other comprehensive income (“OCI”). The guidance requires most entities to present items of net income and other comprehensive income either in one continuous statement, referred to as the statement of comprehensive income, or in two separate, but consecutive, statements of net income and other comprehensive income. We have adopted this guidance with retrospective application and have presented total comprehensive income in our Consolidated and Combined Statements of Comprehensive Income for all reported periods. | |
In May 2011, the FASB issued guidance intended to achieve common fair value measurements and related disclosures between U.S. GAAP and international accounting standards. The amendments primarily clarify existing fair value guidance and are not intended to change the application of existing fair value measurement guidance. However, the amendments include certain instances where a particular principle or requirement for measuring fair value or disclosing information about fair value measurements has changed. On January 1, 2012, we adopted this guidance. The adoption of the guidance did not have a material impact on our financial condition and results of operations. |
Acquisitions
Acquisitions | 12 Months Ended | ||||||
Dec. 31, 2013 | |||||||
Business Combinations [Abstract] | ' | ||||||
Acquisitions | ' | ||||||
Acquisitions | |||||||
2013 Acquisitions | |||||||
During 2013, we spent $84 million ($81 million, net of cash acquired) on acquisitions. As the acquisitions were not material, individually or in the aggregate, to results of operations, pro forma results of operations reflecting results prior to the acquisitions and certain other disclosure items have not been presented. | |||||||
MultiTrode | |||||||
On March 1, 2013 we acquired MultiTrode Pty Ltd ("MultiTrode"), a water and wastewater technology and services company based in Australia, for approximately $26 million. MultiTrode offers advanced monitoring and control technologies to municipal and private water and waste water authorities as well as industrial clients. The company had approximately 60 employees and generated revenue of approximately $13 million in its fiscal year ended June 30, 2012. | |||||||
Our consolidated financial statements include MultiTrode's results of operations prospectively from March 1, 2013 within the Water Infrastructure segment. | |||||||
PIMS | |||||||
On February 5, 2013 we acquired PIMS Group ("PIMS"), a wastewater services company based in the United Kingdom, for approximately $57 million, including a cash payment of $55 million and the assumption of certain liabilities. PIMS is a supplier of wastewater installation and maintenance services for the private sector, municipal and industrial markets. The company had approximately 220 employees and generated revenue of approximately $38 million for its fiscal year ended April 30, 2012. | |||||||
Our consolidated financial statements include PIMS' results of operations prospectively from February 5, 2013 within the Water Infrastructure segment. | |||||||
2012 Acquisitions | |||||||
Heartland and MJK | |||||||
During 2012, we spent $41 million, net of cash acquired, on two acquisitions that were not material individually or in the aggregate to our results of operations or financial position. On October 26, 2012, we acquired Heartland Pump Rental & Sales, Inc. ("Heartland"), a dewatering pump sale and rental company, for approximately $29 million. Heartland generated revenue of approximately $33 million for the fiscal year ended December 31, 2011. On July 13, 2012, we acquired MJK Automation (“MJK”) for a purchase price of approximately $12 million. MJK, which reported 2011 revenue of $11 million for the fiscal year ended June 30, 2012, is a leading manufacturer of flow and level sensors, and measurement and control technology for water and wastewater applications. Our financial statements include Heartland and MJK results of operations prospectively from October 26, 2012 and July 13, 2012, respectively, within the Water Infrastructure segment. As the acquisitions were not material to results of operations, pro forma results of operations reflecting results prior to the acquisitions and certain other disclosure items have not been presented. | |||||||
2011 Acquisitions | |||||||
YSI | |||||||
On September 1, 2011, we acquired 100% of the outstanding shares of YSI Incorporated (“YSI”) for a purchase price of $309 million, net of cash acquired. YSI, which reported 2010 revenue of $101 million, is a leading developer and manufacturer of sensors, instruments, software, and data collection platforms for environmental water monitoring. YSI employs 390 people at facilities in the United States, Europe and Asia. Our financial statements include YSI’s results of operations prospectively from September 1, 2011 within the Water Infrastructure segment; however, the acquisition was not material to results of operations and accordingly, pro forma results of operations reflecting YSI’s results prior to acquisition have not been presented. | |||||||
The purchase price for YSI was allocated to the net tangible and intangible assets acquired and liabilities assumed based on their fair values as of September 1, 2011. The excess of the purchase price over the assets acquired and liabilities assumed was recorded as goodwill. A charge in the amount of $3 million is included in selling, general and administrative expense related to acquisition-related costs. | |||||||
The following table presents the allocation of the purchase price to the assets acquired and liabilities assumed, based on their fair values (in millions): | |||||||
Purchase Price | $ | 309 | |||||
Assets acquired and liabilities assumed: | |||||||
Accounts receivable | 15 | ||||||
Inventory | 15 | ||||||
Property, plant and equipment | 9 | ||||||
Goodwill | 190 | ||||||
Intangible assets | 125 | ||||||
Other current and non-current assets | 17 | ||||||
Other current and non-current liabilities | (62 | ) | |||||
Net assets acquired | $ | 309 | |||||
Goodwill of $190 million arising from the acquisition consists largely of the planned expansion of YSI to new geographic markets, synergies and economies of scale. The goodwill related to this acquisition has been assigned to our Water Infrastructure segment and is not expected to be deductible for income tax purposes. In addition, of the $125 million that was allocated to intangible assets, $41 million was assigned to customer relationships and will be amortized on a straight line basis over the estimated useful life of 16 years; $35 million was assigned to proprietary technology and will be amortized on a straight line basis over the weighted average useful life of 16 years; and the remaining $49 million of acquired intangible assets was assigned to trademarks, which is not subject to amortization as they were determined to have indefinite useful lives. |
Restructuring_and_Asset_Impair
Restructuring and Asset Impairment Charges | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Restructuring and Related Activities [Abstract] | ' | ||||||||||||
Restructuring, Impairment, and Other Activities Disclosure | ' | ||||||||||||
Restructuring and Asset Impairment Charges | |||||||||||||
From time to time, the Company will incur costs related to restructuring actions in order to optimize our cost base and more strategically position ourselves based on the economic environment and customer demand. During 2013, the costs incurred primarily relate to the reduction in structural costs, including the elimination of headcount and consolidation of facilities within both our Water Infrastructure and Applied Water segments. The components of restructuring and asset impairment charges incurred during each of the previous three years ended are presented below. | |||||||||||||
Year Ended December 31, | |||||||||||||
(in millions) | 2013 | 2012 | 2011 | ||||||||||
By component: | |||||||||||||
Severance and other charges | $ | 38 | $ | 17 | $ | — | |||||||
Lease related charges | 2 | — | — | ||||||||||
Total restructuring charges | 40 | 17 | — | ||||||||||
Asset impairment | 2 | — | 2 | ||||||||||
Total restructuring and asset impairment charges | $ | 42 | $ | 17 | $ | 2 | |||||||
By segment: | |||||||||||||
Water Infrastructure | $ | 33 | $ | 14 | $ | — | |||||||
Applied Water | 9 | 3 | 2 | ||||||||||
Restructuring | |||||||||||||
The following table displays a rollforward of the restructuring accruals, presented on our Consolidated Balance Sheet within accrued liabilities, for the years ended December 31, 2013 and 2012. | |||||||||||||
(in millions) | 2013 | 2012 | |||||||||||
Restructuring accruals - January 1 | $ | 9 | $ | 1 | |||||||||
Restructuring charges | 40 | 17 | |||||||||||
Cash payments | (35 | ) | (9 | ) | |||||||||
Other | (1 | ) | — | ||||||||||
Restructuring accruals - December 31 | $ | 13 | $ | 9 | |||||||||
By segment: | |||||||||||||
Water Infrastructure | $ | 10 | $ | 6 | |||||||||
Applied Water | 3 | 3 | |||||||||||
The following is a rollforward of employee position eliminations associated with restructuring activities for the years ended December 31, 2013 and 2012. | |||||||||||||
2013 | 2012 | ||||||||||||
Planned reductions - January 1 | 54 | — | |||||||||||
Additional planned reductions | 513 | 189 | |||||||||||
Actual reductions | (516 | ) | (135 | ) | |||||||||
Planned reductions - December 31 | 51 | 54 | |||||||||||
Total expected costs of approximately $33 million for Water Infrastructure associated with actions that commenced during 2013 include $31 million incurred in 2013 and $2 million remaining to be incurred during 2014. Total expected costs of approximately $10 million for Applied Water include $8 million incurred in 2013 and $2 million remaining to be incurred during 2014. These costs primarily comprise severance charges. We currently expect these actions to continue through the end of 2014. | |||||||||||||
Asset Impairment Charges | |||||||||||||
During the fourth quarter of 2013 we performed our annual impairment test of our indefinite-lived intangibles assets which resulted in an impairment charge of $2 million related to trade names within our Water Infrastructure segment. Refer to Note 11, “Goodwill and Other Intangible Assets,” for additional information. |
Separation_Costs
Separation Costs | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Separation Costs [Abstract] | ' | |||||||
Separation Costs | ' | |||||||
Separation Costs | ||||||||
We had non-recurring separation costs of $4 million and $22 million, or $2 million and $16 million after tax during 2013 and 2012, respectively. The components of separation costs incurred during these periods are presented below. | ||||||||
Year Ended December 31, | ||||||||
(in millions) | 2013 | 2012 | ||||||
Rebranding and marketing costs | $ | — | $ | 8 | ||||
Advisory and professional fees | — | 7 | ||||||
Information and technology costs | 2 | 3 | ||||||
Employee retention and hiring costs | — | 1 | ||||||
Lease termination and other real estate costs | 2 | 1 | ||||||
Other | — | 2 | ||||||
Total separation costs in operating income | 4 | 22 | ||||||
Income tax benefit | (2 | ) | (6 | ) | ||||
Total separation costs, net of tax | $ | 2 | $ | 16 | ||||
Other_NonOperating_Income_Net
Other Non-Operating Income, Net | 12 Months Ended | |||||||||||
Dec. 31, 2013 | ||||||||||||
Other Non-Operating Income, Net [Abstract] | ' | |||||||||||
Other Non-Operating Income, Net | ' | |||||||||||
Other Non-Operating (Expense) Income, Net | ||||||||||||
The components of other non-operating (expense) income, net are as follows: | ||||||||||||
Year Ended December 31, | ||||||||||||
(in millions) | 2013 | 2012 | 2011 | |||||||||
Interest income | $ | 3 | $ | 4 | $ | 3 | ||||||
Income from joint ventures | 2 | 4 | 4 | |||||||||
Other expense – net (a) | (15 | ) | (8 | ) | (2 | ) | ||||||
Total other non-operating (expense) income, net | $ | (10 | ) | $ | — | $ | 5 | |||||
(a) | 2013 includes $10 million of expense incurred under the tax matters agreement with ITT. Refer to Note 7 "Income Taxes" for additional information regarding the tax matters agreement. |
Income_Taxes
Income Taxes | 12 Months Ended | |||||||||||
Dec. 31, 2013 | ||||||||||||
Income Tax Disclosure [Abstract] | ' | |||||||||||
Income Taxes | ' | |||||||||||
Income Taxes | ||||||||||||
Prior to the Spin-off, Xylem was a member of ITT’s consolidated federal and state tax returns, and therefore current and deferred tax expense has been computed for the Company on a separate return basis. Subsequent to the Spin-off, the Company files its own consolidated federal and state tax returns. | ||||||||||||
The source of pre-tax income and the components of income tax expense are as follows: | ||||||||||||
Year Ended December 31, | ||||||||||||
(in millions) | 2013 | 2012 | 2011 | |||||||||
Income components: | ||||||||||||
Domestic | $ | 49 | $ | 106 | $ | 46 | ||||||
Foreign | 249 | 282 | 337 | |||||||||
Total pre-tax income | $ | 298 | $ | 388 | $ | 383 | ||||||
Income tax expense components: | ||||||||||||
Current: | ||||||||||||
Domestic – federal | $ | 37 | $ | 27 | $ | 20 | ||||||
Domestic – state and local | 1 | 7 | 5 | |||||||||
Foreign | 46 | 56 | 71 | |||||||||
Total Current | 84 | 90 | 96 | |||||||||
Deferred: | ||||||||||||
Domestic – federal | $ | (6 | ) | $ | 10 | $ | 21 | |||||
Domestic – state and local | — | (2 | ) | 3 | ||||||||
Foreign | (8 | ) | (7 | ) | (16 | ) | ||||||
Total Deferred | (14 | ) | 1 | 8 | ||||||||
Total income tax provision | $ | 70 | $ | 91 | $ | 104 | ||||||
Effective income tax rate | 23.5 | % | 23.4 | % | 27.4 | % | ||||||
Reconciliations between taxes at the U.S. federal income tax rate and taxes at our effective income tax rate on earnings before income taxes are as follows: | ||||||||||||
Year Ended December 31, | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
Tax provision at U.S. statutory rate | 35 | % | 35 | % | 35 | % | ||||||
Increase (decrease) in tax rate resulting from: | ||||||||||||
Foreign restructurings | — | — | 1.5 | |||||||||
State income taxes | 0.7 | 1.2 | 1.3 | |||||||||
Settlements of tax examinations | — | 0.2 | (4.7 | ) | ||||||||
Valuation allowance | 39.4 | 8.9 | 4.7 | |||||||||
Tax exempt interest | (43.0 | ) | (18.2 | ) | (14.6 | ) | ||||||
Foreign tax rate differential | (4.1 | ) | (3.4 | ) | (4.6 | ) | ||||||
Repatriation of foreign earnings, net of foreign tax credits | 5.1 | 0.4 | 3.7 | |||||||||
Non-deductible separation costs | — | — | 2.6 | |||||||||
Tax incentives | (8.1 | ) | — | — | ||||||||
Other – net | (1.5 | ) | (0.7 | ) | 2.5 | |||||||
Effective income tax rate | 23.5 | % | 23.4 | % | 27.4 | % | ||||||
We operate under tax incentives, which are effective January 2013 through December 2023 and may be extended if certain additional requirements are satisfied. The tax incentives are conditional upon our meeting certain employment thresholds. The impact of these tax incentives decreased our tax provision by 8.1% in 2013. | ||||||||||||
Deferred tax assets and liabilities are determined based on temporary differences between the financial reporting and tax bases of assets and liabilities, applying enacted tax rates in effect for the year in which we expect the differences will reverse. | ||||||||||||
The following is a summary of the components of the net deferred tax assets and liabilities recognized in the Consolidated Balance Sheets: | ||||||||||||
December 31, | ||||||||||||
(in millions) | 2013 | 2012 | ||||||||||
Deferred tax assets: | ||||||||||||
Employee benefits | $ | 114 | $ | 130 | ||||||||
Accrued expenses | 20 | 17 | ||||||||||
Loss carryforward | 357 | 237 | ||||||||||
Inventory | 6 | 7 | ||||||||||
Foreign tax credit carryforwards | 17 | 18 | ||||||||||
Other | 1 | 3 | ||||||||||
$ | 515 | $ | 412 | |||||||||
Valuation allowance | (349 | ) | (229 | ) | ||||||||
Net deferred tax asset | $ | 166 | $ | 183 | ||||||||
Deferred tax liabilities: | ||||||||||||
Intangibles | $ | 180 | $ | 174 | ||||||||
Investment in foreign subsidiaries | 15 | 15 | ||||||||||
Property, plant, and equipment | 19 | 15 | ||||||||||
Other | 42 | 34 | ||||||||||
Total deferred tax liabilities | $ | 256 | $ | 238 | ||||||||
Management assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to realize existing deferred tax assets. On the basis of this evaluation, as of December 31, 2013, a valuation allowance of $349 million has been established to reduce the deferred income tax asset related to certain U.S. and foreign net operating losses and U.S. and foreign capital loss carryforwards. During 2013, the valuation allowance increased by $120 million primarily driven by losses from certain foreign operations. | ||||||||||||
Deferred taxes are classified in the Consolidated Balance Sheets as follows: | ||||||||||||
December 31, | ||||||||||||
(in millions) | 2013 | 2012 | ||||||||||
Current assets | $ | 41 | $ | 41 | ||||||||
Non-current assets | 64 | 77 | ||||||||||
Current liabilities | (4 | ) | — | |||||||||
Non-current liabilities | (191 | ) | (173 | ) | ||||||||
Total net deferred tax liabilities | $ | (90 | ) | $ | (55 | ) | ||||||
Tax attributes available to reduce future taxable income begin to expire as follows: | ||||||||||||
(in millions) | 31-Dec-13 | First Year of Expiration | ||||||||||
U.S. net operating loss | $ | 10 | 31-Dec-23 | |||||||||
State net operating loss | 48 | December 31, 2014 | ||||||||||
U.S. tax credits | 31 | December 31, 2020 | ||||||||||
Foreign net operating loss | 1,214 | December 31, 2014 | ||||||||||
The foreign tax credit for financial statement purposes differs from the amount for tax return purposes due to unrecognized tax benefits. | ||||||||||||
As of December 31, 2013, we have provided a deferred tax liability of $16 million on the excess of $84 million of financial reporting over the tax basis of investments in certain foreign subsidiaries that has not been indefinitely reinvested. However, we have not provided for deferred taxes on the excess of financial reporting over the tax basis of investments in certain foreign subsidiaries in the amount of $1.9 billion because we plan to reinvest such amounts indefinitely outside the U.S. The determination of the amount of federal and state income taxes is not practicable because of complexities of the hypothetical calculation. | ||||||||||||
Unrecognized Tax Benefits | ||||||||||||
We recognize tax benefits from uncertain tax positions only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such positions are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: | ||||||||||||
(in millions) | 2013 | 2012 | 2011 | |||||||||
Unrecognized tax benefits — January 1 | $ | 8 | $ | 5 | $ | 43 | ||||||
Additions for: | ||||||||||||
Current year tax positions | 23 | 1 | — | |||||||||
Prior year tax positions | — | 2 | — | |||||||||
Reductions for: | ||||||||||||
Assumption by ITT | — | — | (24 | ) | ||||||||
Settlements | (1 | ) | — | (14 | ) | |||||||
Unrecognized tax benefits — December 31 | $ | 30 | $ | 8 | $ | 5 | ||||||
The amount of unrecognized tax benefits at December 31, 2013, was $30 million which, if ultimately recognized, will reduce our annual effective tax rate. We do not believe that the unrecognized tax benefits will significantly change within the next twelve months. | ||||||||||||
In many cases, unrecognized tax benefits are related to tax years that remain subject to examination by the relevant taxing authorities. By virtue of previously filed separate company and consolidated tax returns with ITT, we are routinely under audit by federal, state, local and foreign taxing authorities. These audits include questioning the timing and the amount of deductions and the allocation of income among various tax jurisdictions. Income taxes payable include amounts considered sufficient to pay assessments that may result from examination of prior year returns; however, the amount paid upon resolution of issues raised may differ from the amount provided. Differences between the reserves for tax contingencies and the amounts owed by the company are recorded in the period they become known. Under the Tax Matters Agreement, as discussed below, ITT assumes all consolidated tax liabilities and related interest and penalties for the pre-spin period. The following table summarizes the earliest open tax years by major jurisdiction: | ||||||||||||
Jurisdiction | Earliest | |||||||||||
Open Year | ||||||||||||
Canada | 2008 | |||||||||||
Germany | 2005 | |||||||||||
Italy | 2008 | |||||||||||
Luxembourg | 2010 | |||||||||||
Poland | 2006 | |||||||||||
Sweden | 2008 | |||||||||||
Switzerland | 2013 | |||||||||||
United Kingdom | 2006 | |||||||||||
United States | 2009 | |||||||||||
We classify interest relating to unrecognized tax benefits as a component of other non-operating (expense) income, net and tax penalties as a component of income tax expense in our Consolidated and Combined Income Statements. The amount of interest relating to unrecognized tax benefits as of December 31, 2013 was $1 million. | ||||||||||||
Tax Matters Agreement | ||||||||||||
In connection with the Spin-off, Xylem, ITT and Exelis entered into a Tax Matters Agreement. Under the agreement, we may be obligated to make payments to ITT and Exelis under certain conditions. These conditions include a payment to ITT in the event audit settlement payments exceed amounts specified in the agreement. We also may be obligated to make payments in the event the Spin-off is determined to be taxable. | ||||||||||||
The Tax Matters Agreement governs the respective rights, responsibilities and obligations of ITT, Xylem and the other Spincos (members of the ITT group that were spun-off, including Xylem are collectively referred to as “Spincos”) with respect to taxes for periods ending on or before the Spin-off. In general, pursuant to the Tax Matters Agreement, ITT will prepare and file the tax returns that include ITT (or any of its subsidiaries) and Xylem (or any of its subsidiaries) for all taxable periods ending on or prior to, and including, October 31, 2011, with the appropriate tax authorities, and, except as otherwise set forth below, ITT will pay any taxes relating thereto to the relevant tax authority. In connection with any audit adjustments with respect to such returns, we have agreed to indemnify ITT for a portion of such tax liability to the extent it exceeds an agreed-upon threshold. | ||||||||||||
We will file all tax returns that include solely Xylem and/or its subsidiaries and any separate company tax returns for Xylem and/or its subsidiaries for all taxable periods ending on or prior to, and including, October 31, 2011, and will pay all taxes due with respect to such tax returns (including any taxes attributable to an audit adjustment with respect to such returns). In general, ITT controls all audits and administrative matters and other tax proceedings relating to the consolidated U.S. federal income tax return of the ITT group and any other tax returns for which the ITT group is responsible. | ||||||||||||
Under the Tax Matters Agreement, we have agreed not to enter into any transaction involving an acquisition (including issuance) of Xylem common stock or any other transaction (or, to the extent we have the right to prohibit it, to permit any such transaction) that could cause the Spin-off to be taxable to ITT. We have also agreed to indemnify ITT for any tax resulting from any such transactions. Generally, ITT will recognize taxable gain on the Spin-off if there are one or more acquisitions (including issuances) of our capital stock, directly or indirectly, representing 50% or more, measured by vote or value, of our then-outstanding capital stock, and the acquisitions or issuances are deemed to be part of a plan or series of related transactions that include the Spin-off. Any such shares of our common stock acquired, directly or indirectly, within two years before or after the Spin-off (with exceptions, including public trading by less-than-5% shareholders and certain compensatory stock issuances) will generally be presumed to be part of such a plan unless that presumption is rebutted. As a result, our obligations may discourage, delay or prevent a change of control of our company. | ||||||||||||
Notwithstanding the receipt of any such IRS ruling, tax opinion or officer’s certificate, generally Xylem and each other Spinco must indemnify ITT and each other Spinco for any taxes and related losses resulting from (i) any act or failure to act by such Spinco described in the covenants above, (ii) any acquisition of equity securities or assets of such Spinco or any member of its group, and (iii) any breach by such Spinco or any member of its group of any representation or covenant contained in the separation documents or the documents relating to the IRS private letter ruling or tax opinion concerning the Spin-off of such Spinco. | ||||||||||||
Under U.S. federal income tax law, ITT and the Spincos are severally liable for all of ITT’s federal income taxes attributable to periods prior to and including the year of the spin, which ended on December 31, 2011. | ||||||||||||
Thus, if ITT failed to pay the U.S. federal income taxes attributable to it under the Tax Matters Agreement for periods prior to and including the current taxable year of ITT, the Spincos would be severally liable for such taxes. In the event a Spinco is required to make a payment in respect of a Spin-off related tax liability of the ITT consolidated U.S. federal income tax return group under these rules for which such Spinco is not responsible under the Tax Matters Agreement and full indemnification cannot be obtained from the Spinco responsible for such payment under the Tax Matters Agreement, ITT will indemnify the Spinco that was required to make the payment from and against the portion of such liability for which full indemnification cannot be obtained from the Spinco responsible for such payment under the Tax Matters Agreement. | ||||||||||||
The Tax Matters Agreement also contains provisions regarding the apportionment of tax attributes of the ITT consolidated U.S. federal income tax return group, authority to make tax elections, cooperation, and other customary matters. | ||||||||||||
As of December 31, 2013, the net amount Xylem owed ITT pursuant to the Tax Matters Agreement is $4 million. |
Earnings_Per_Share
Earnings Per Share | 12 Months Ended | |||||||||||
Dec. 31, 2013 | ||||||||||||
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. | ||||||||||||
Year Ended December 31, | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
Net Income (in millions) | $ | 228 | $ | 297 | $ | 279 | ||||||
Shares (in thousands): | ||||||||||||
Weighted average common shares outstanding | 185,082 | 185,459 | 184,574 | |||||||||
Add: Participating securities (a) | 134 | 325 | 485 | |||||||||
Weighted average common shares outstanding — Basic | 185,216 | 185,784 | 185,059 | |||||||||
Plus incremental shares from assumed conversions: (b) | ||||||||||||
Dilutive effect of stock options | 264 | 213 | 202 | |||||||||
Dilutive effect of restricted stock | 558 | 233 | 63 | |||||||||
Weighted average common shares outstanding — Diluted | 186,038 | 186,230 | 185,324 | |||||||||
Basic earnings per share | $ | 1.23 | $ | 1.6 | $ | 1.51 | ||||||
Diluted earnings per share | $ | 1.22 | $ | 1.59 | $ | 1.5 | ||||||
(a) | Restricted stock awards containing rights to non-forfeitable dividends which participate in undistributed earnings with common shareholders are considered participating securities for purposes of computing earnings per share. | |||||||||||
(b) | Incremental shares from stock options, restricted stock 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 and performance share awards, reduced by the repurchase of shares with the proceeds from the assumed exercises, unrecognized compensation expense for outstanding awards and the estimated tax benefit of the assumed exercises. Performance share units will be included in the treasury stock calculation of diluted earnings per share upon achievement of underlying performance conditions. See Note 16, "Stock-Based Compensation Plans" for further detail on the performance share units. | |||||||||||
Year Ended December 31, | ||||||||||||
(in thousands) | 2013 | 2012 | 2011 | |||||||||
Stock options | 4,126 | 4,285 | 4,445 | |||||||||
Restricted shares | 703 | 870 | 788 | |||||||||
Performance shares | 80 | — | — | |||||||||
Inventories
Inventories | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Inventory Disclosure [Abstract] | ' | |||||||
Inventories | ' | |||||||
Inventories | ||||||||
December 31, | ||||||||
(in millions) | 2013 | 2012 | ||||||
Finished goods | $ | 189 | $ | 182 | ||||
Work in process | 31 | 30 | ||||||
Raw materials | 255 | 231 | ||||||
Total inventories, net | $ | 475 | $ | 443 | ||||
Property_Plant_and_Equipment
Property, Plant and Equipment | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Property, Plant and Equipment [Abstract] | ' | |||||||
Property, Plant and Equipment | ' | |||||||
Property, Plant and Equipment | ||||||||
December 31, | ||||||||
(in millions) | 2013 | 2012 | ||||||
Land, buildings and improvements | $ | 263 | $ | 255 | ||||
Machinery and equipment | 685 | 653 | ||||||
Equipment held for lease or rental | 192 | 183 | ||||||
Furniture and fixtures | 93 | 90 | ||||||
Construction work in progress | 49 | 40 | ||||||
Other | 22 | 19 | ||||||
Total property, plant and equipment, gross | 1,304 | 1,240 | ||||||
Less accumulated depreciation | 816 | 753 | ||||||
Total property, plant and equipment, net | $ | 488 | $ | 487 | ||||
Depreciation expense was $99 million, $94 million, and $93 million for 2013, 2012, and 2011, respectively. |
Goodwill_and_Other_Intangible_
Goodwill and Other Intangible Assets | 12 Months Ended | |||||||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | |||||||||||||||||||||||
Goodwill and Other Intangible Assets | ' | |||||||||||||||||||||||
Goodwill and Other Intangible Assets | ||||||||||||||||||||||||
Changes in the carrying value of goodwill by operating segment during the years ended December 31, 2013 and 2012 are as follows: | ||||||||||||||||||||||||
(in millions) | Water | Applied Water | Total | |||||||||||||||||||||
Infrastructure | ||||||||||||||||||||||||
Balance as of December 31, 2011 | $ | 1,054 | $ | 556 | $ | 1,610 | ||||||||||||||||||
Activity in 2012 | ||||||||||||||||||||||||
Acquisitions | 19 | — | 19 | |||||||||||||||||||||
Foreign currency and other | 12 | 6 | 18 | |||||||||||||||||||||
Balance as of December 31, 2012 | $ | 1,085 | $ | 562 | $ | 1,647 | ||||||||||||||||||
Activity in 2013 | ||||||||||||||||||||||||
Acquisitions | 48 | — | 48 | |||||||||||||||||||||
Foreign currency and other | 16 | 7 | 23 | |||||||||||||||||||||
Balance as of December 31, 2013 | $ | 1,149 | $ | 569 | $ | 1,718 | ||||||||||||||||||
During the fourth quarter of 2013 we performed our annual impairment assessment and determined that that the estimated fair values of our goodwill reporting units were substantially in excess of each of their carrying values with the exception of our Analytics business within our Water Infrastructure segment. While the fair value of the Analytics business initially increased over the first couple of years after acquisition, challenging economic conditions, including reduced government spending in the U.S. and sluggish growth in European markets, have led to a reduction in fair value during the past two years. Our 2013 impairment analysis indicated that the fair value of the Analytics reporting unit exceeded its carrying value by approximately 18%. The goodwill associated with the Analytics business was $439 million at December 31, 2013. However, future goodwill impairment tests could result in a charge to earnings. We will continue to evaluate goodwill on an annual basis as of the beginning of our fourth quarter and whenever events and changes in circumstances indicate there may be a potential impairment. | ||||||||||||||||||||||||
Other Intangible Assets | ||||||||||||||||||||||||
Information regarding our other intangible assets is as follows: | ||||||||||||||||||||||||
(in millions) | 31-Dec-13 | 31-Dec-12 | ||||||||||||||||||||||
Carrying | Accumulated | Net | Carrying | Accumulated | Net | |||||||||||||||||||
Amount | Amortization | Intangibles | Amount | Amortization | Intangibles | |||||||||||||||||||
Customer and distributor relationships | $ | 352 | $ | (104 | ) | $ | 248 | $ | 317 | $ | (75 | ) | $ | 242 | ||||||||||
Proprietary technology | 109 | (36 | ) | 73 | 105 | (29 | ) | 76 | ||||||||||||||||
Trademarks | 35 | (16 | ) | 19 | 33 | (14 | ) | 19 | ||||||||||||||||
Patents and other | 20 | (17 | ) | 3 | 21 | (17 | ) | 4 | ||||||||||||||||
Indefinite-lived intangibles | 145 | — | 145 | 143 | — | 143 | ||||||||||||||||||
Other intangibles | $ | 661 | $ | (173 | ) | $ | 488 | $ | 619 | $ | (135 | ) | $ | 484 | ||||||||||
Based on the results of our annual impairment tests, we recorded a $2 million impairment charge related to three trade names within our Water Infrastructure segment in the fourth quarter of 2013. The charge was calculated using an income approach, which is considered a Level 3 input for fair value measurement, and is reflected in “Restructuring and asset impairment charges” in our Consolidated and Combined Income Statements. The trade names, related to acquired businesses within our Analytics operating unit, were classified as indefinite-lived assets at time of acquisition as there was not a plan at that time to phase out the trade names. As a result of the decline in value, we have decided to phase out two of the trade names over a period of time and thus they are no longer classified as indefinite-lived assets. We determined that no impairment of the indefinite-lived intangibles existed as of the measurement date in 2012. Future impairment tests could result in a charge to earnings. We will continue to evaluate the indefinite-lived intangible assets on an annual basis as of the beginning of our fourth quarter and whenever events and changes in circumstances indicate there may be a potential impairment. | ||||||||||||||||||||||||
Customer and distributor relationships, proprietary technology, trademarks, patents and other are amortized over weighted average lives of approximately 14 years, 18 years, 16 years and 10 years, respectively. | ||||||||||||||||||||||||
Total amortization expense for intangible assets was $38 million, $34 million, and $31 million for 2013, 2012 and 2011, respectively. | ||||||||||||||||||||||||
Estimated amortization expense for each of the five succeeding years is as follows: | ||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||
2014 | $ | 36 | ||||||||||||||||||||||
2015 | 35 | |||||||||||||||||||||||
2016 | 35 | |||||||||||||||||||||||
2017 | 34 | |||||||||||||||||||||||
2018 | 34 | |||||||||||||||||||||||
Derivative_Financial_Instrumen
Derivative Financial Instruments | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
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 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 and payments. 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. | ||||||||||||||
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. | ||||||||||||||
Beginning in 2012, certain business units within our segments with exposure to foreign currency exchange risks have designated certain currency forward agreements as cash flow hedges of forecasted intercompany inventory purchases and sales. Listed in the table below are the outstanding foreign currency derivatives that were used to hedge foreign exchange risks as of December 31, 2013. | ||||||||||||||
(in millions; except number of instruments) | ||||||||||||||
Foreign Currency Derivative | Number of | Notional | Sell Notional Currency | Notional | Buy Notional | |||||||||
Instruments | Sold | Purchased | Currency | |||||||||||
Buy PLN/ Sell EUR forward | 22 | 24 | Euro (EUR) | 103 | Polish Zloty | |||||||||
(PLN) | ||||||||||||||
Buy HUF/ Sell EUR forward | 11 | 11 | Euro (EUR) | 3,186 | Hungarian | |||||||||
Forint (HUF) | ||||||||||||||
Buy SEK/ Sell EUR forward | 11 | 137 | Euro (EUR) | 1,233 | Swedish Krona (SEK) | |||||||||
Sell GBP/ Buy EUR forward | 11 | 22 | British Pound Sterling (GBP) | 27 | Euro (EUR) | |||||||||
The table below presents the effect of our derivative financial instruments on the Consolidated and Combined Income Statements and Statements of Comprehensive Income. | ||||||||||||||
Year Ended December 31, | ||||||||||||||
(in millions) | 2013 | 2012 | 2011 | |||||||||||
Derivatives in Cash Flow Hedges | ||||||||||||||
Foreign Exchange Contracts | ||||||||||||||
Amount of gain recognized in OCI (a) | $ | 1 | $ | 4 | $ | — | ||||||||
Amount of (gain) reclassified from OCI into revenue (a) | (2 | ) | (2 | ) | — | |||||||||
Amount of loss (gain) reclassified from OCI into cost of revenue (a) | 2 | (1 | ) | — | ||||||||||
(a) | Effective portion | |||||||||||||
As of December 31, 2013, $2 million of the net unrealized gains on cash flow hedges is expected to be reclassified into earnings in the next 12 months. Any ineffective portion of the change in fair value of a cash flow hedge is recognized immediately in selling, general and administrative expenses in the Consolidated and Combined Income Statements and, for the twelve months ended December 31, 2013 and 2012 was not material. | ||||||||||||||
The fair values of our foreign exchange contracts currently included in our hedging program were as follows: | ||||||||||||||
December 31, | ||||||||||||||
(in millions) | 2013 | 2012 | ||||||||||||
Derivatives designated as hedging instruments | ||||||||||||||
Assets | ||||||||||||||
Other current assets | $ | 1 | $ | — | ||||||||||
Accrued_and_Other_Current_Liab
Accrued and Other Current Liabilities | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Payables and Accruals [Abstract] | ' | |||||||
Accrued and Other Current Liabilities | ' | |||||||
Accrued and Other Current Liabilities | ||||||||
December 31, | ||||||||
(in millions) | 2013 | 2012 | ||||||
Compensation and other employee-benefits | $ | 215 | $ | 201 | ||||
Customer-related liabilities | 63 | 60 | ||||||
Accrued warranty costs | 36 | 40 | ||||||
Accrued income taxes | 45 | 50 | ||||||
Other accrued liabilities | 120 | 92 | ||||||
Total accrued and other current liabilities | $ | 479 | $ | 443 | ||||
Credit_Facilities_and_LongTerm
Credit Facilities and Long-Term Debt | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Debt Disclosure [Abstract] | ' | |||||||
Credit Facilities and Long-Term Debt | ' | |||||||
Credit Facilities and Long-Term Debt | ||||||||
Total debt outstanding is summarized as follows: | ||||||||
December 31, | ||||||||
(in millions) | 2013 | 2012 | ||||||
Short-term borrowings and current maturities of long-term debt | $ | 42 | $ | 6 | ||||
Long-term debt: | ||||||||
3.550% Senior Notes due 2016 (a) | 600 | 600 | ||||||
4.875% Senior Notes due 2021 (a) | 600 | 600 | ||||||
Unamortized discount (b) | (1 | ) | (1 | ) | ||||
Long-term debt | 1,199 | 1,199 | ||||||
Total debt (c) | $ | 1,241 | $ | 1,205 | ||||
(a) | The fair value of our Senior Notes (as defined below) 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 2016 (as defined below) was $635 million and $639 million as of December 31, 2013 and 2012, respectively. The fair value of our Senior Notes due 2021 (as defined below) was $629 million and $680 million as of December 31, 2013 and 2012, respectively. | |||||||
(b) | The unamortized discount is recognized as a reduction in the carrying value of the Senior Notes in the Consolidated Balance Sheets and is being amortized to interest expense in our Consolidated and Combined Income Statements over the expected remaining terms of the Senior Notes. | |||||||
Deferred Financing Costs | ||||||||
We had deferred financing costs of $7 million and $9 million as of December 31, 2013 and December 31, 2012, respectively, related to our revolving credit facility and Senior Notes. Scheduled amortization for future years, assuming no further prepayments of principal, is $2 million in 2014, $2 million in 2015, $1 million in 2016, less than $1 million in 2017, less than $1 million in 2018 and $1 million thereafter. | ||||||||
Senior Notes | ||||||||
On September 20, 2011, we issued 3.550% Senior Notes of $600 million aggregate principal amount due September 2016 (the "Senior Notes due 2016") and 4.875% Senior Notes of $600 million aggregate principal amount due October 2021 (the "Senior Notes due 2021" and together with the Senior Notes due 2016, the “Senior Notes”). | ||||||||
The Senior Notes include covenants which restrict our ability, subject to exceptions, to incur debt secured by liens and engage in sale and lease-back transactions, as well as provide for customary events of default (subject, in certain cases, to receipt of notice of default and/or customary grace and cure periods). 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. As of December 31, 2013, we were in compliance with all covenants. If a change of control triggering event (as defined in the 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 2016 is payable on March 20 and September 20 of each year. Interest on the Senior Notes due 2021 is payable on April 1 and October 1 of each year. | ||||||||
Four Year Competitive Advance and Revolving Credit Facility | ||||||||
Effective October 31, 2011, Xylem and its subsidiaries entered into a Four Year Competitive Advance and Revolving Credit Facility (the "Credit Facility") with JPMorgan Chase Bank, N.A., as administrative agent, and a syndicate of lenders. The Credit Facility provides for an aggregate principal amount of up to $600 million of (i) a competitive advance borrowing option which will be provided on an uncommitted competitive advance basis through an auction mechanism (the "competitive loans"), (ii) revolving extensions of credit (the "revolving loans") outstanding at any time and (iii) the issuance of letters of credit in a face amount not in excess of $100 million outstanding at any time. | ||||||||
At our election, the interest rate per annum applicable to the competitive advances will be based on either (i) a Eurodollar rate determined by reference to LIBOR, plus an applicable margin offered by the lender making such loans and accepted by us or (ii) a fixed percentage rate per annum specified by the lender making such loans. At our election, the interest rate per annum applicable to the revolving loans will be based on either (i) a Eurodollar rate determined by reference to LIBOR, adjusted for statutory reserve requirements, plus an applicable margin or (ii) a fluctuating rate of interest determined by reference to the greatest of (a) the prime rate of JPMorgan Chase Bank, N.A., (b) the U.S. Federal Funds effective rate plus half of 1% or (c) the Eurodollar rate determined by reference to LIBOR, adjusted for statutory reserve requirements, in each case, plus an applicable margin. | ||||||||
In accordance with the terms, we may not exceed a maximum leverage ratio of 3.50 (based on a ratio of total debt to earnings before interest, taxes, depreciation and amortization) throughout the term. As of December 31, 2013, we were in compliance with all covenants. The Credit Facility also contains limitations on, among other things, incurring debt, granting liens, and entering sale and leaseback transactions. In addition, the Credit Facility contains other terms and conditions such as customary representations and warranties, additional covenants and customary events of default. | ||||||||
As of December 31, 2013, the Credit Facility remains undrawn. | ||||||||
Research and Development Facility Agreement | ||||||||
On December 4, 2013, the Company amended and restated its Risk Sharing Finance Facility Agreement (the "R&D Facility Agreement") with The European Investment Bank (the "EIB") to add an additional borrower under the facility. The facility provides an aggregate principal amount of up to €120 million (approximately $165 million) to finance research projects and infrastructure development in the European Union. The Company's wholly-owned subsidiaries in Luxembourg, Xylem Holdings S.a.r.l. and Xylem International S.a.r.l., are the borrowers under the R&D Facility Agreement. The obligations of the borrowers under the R&D Facility Agreement are guaranteed by the Company under an Amended and Restated Deed of Guarantee, dated as of December 4, 2013, in favor of the EIB. The funds are available to finance research and development projects during the period from 2013 through 2016 at the Company's R&D facilities in Sweden, Germany, Italy, the United Kingdom, Austria, Norway and Hungary. | ||||||||
Under the R&D Facility Agreement, the borrower can draw loans with a maturity of no longer than 12 years. The R&D Facility Agreement provides for Fixed Rate loans and Floating Rate loans. The interest rate per annum applicable to Fixed Rate loans will be at a fixed percentage rate per annum specified by the EIB which includes the applicable margin. The interest rate per annum applicable to Floating Rate loans will be at the rate determined by reference to EURIBOR for loans drawn in Euros and LIBOR for loans drawn in Pounds Sterling or U.S. Dollars, plus an applicable spread specified by the EIB which includes the applicable margin. The applicable margin for both Fixed Rate loans and Floating Rate loans shall be determined by reference to the credit rating of the Company. | ||||||||
In accordance with the terms of the R&D Facility Agreement, we may not exceed a maximum leverage ratio of 3.50 (based on a ratio of total debt to earnings before interest, taxes, depreciation and amortization) throughout the term. As of December 31, 2013, we were in compliance with all covenants. The R&D Facility Agreement also contains limitations on, among other things, incurring debt, granting liens, and entering sale and leaseback transactions. In addition, the R&D Facility Agreement contains other terms and conditions such as customary representations and warranties, additional covenants and customary events of default. | ||||||||
As of December 31, 2013, $38 million was outstanding under the R&D Facility Agreement. Although the borrowing term for this arrangement is for five years, we have classified it as short-term debt on our Consolidated Balance Sheet since we intend to repay this obligation in less than one year. |
Postretirement_Benefit_Plans
Postretirement Benefit Plans | 12 Months Ended | |||||||||||||||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||||||||||||||
Compensation and Retirement Disclosure [Abstract] | ' | |||||||||||||||||||||||||||||||
Postretirement Benefit Plans | ' | |||||||||||||||||||||||||||||||
Postretirement Benefit Plans | ||||||||||||||||||||||||||||||||
Defined contribution plans – Prior to the Spin-off, employees who met certain eligibility requirements participated in various defined contribution plans administered by ITT. In connection with the Spin-off, we entered into a Benefit and Compensation Matters Agreement with ITT whereby Xylem agreed to replicate certain ITT defined contribution plans to allow for continuation of those benefits. Under this agreement, assets attributable to Xylem specific employees were transferred from ITT to our domestic and international qualified defined contribution plans. The assets transferred into Xylem were $144 million in 29 different investment options, including the Xylem Stock Fund. Xylem’s U.S. plan also provides for transition credits for eligible U.S. employees for the first five years of the plan to supplement retirement benefits in the absence of a defined benefit plan. Age plus years of eligible service greater than or equal to 60, entitles an employee to transition credits. The liability for transition credits was approximately $3 million at December 31, 2013 and 2012. | ||||||||||||||||||||||||||||||||
Xylem and certain of our subsidiaries maintain various defined contribution savings plans, which allow employees to contribute a portion of their pre-tax and/or after-tax income in accordance with specified guidelines. Several of the plans require us to match a percentage of the employee contributions up to certain limits, generally between 3.0% – 7.0% of employee base pay. Matching obligations, the majority of which were funded in cash in connection with the plans, along with transition credits and other company contributions are as follows: | ||||||||||||||||||||||||||||||||
(in millions) | Defined Contribution | |||||||||||||||||||||||||||||||
2013 | $ | 35 | ||||||||||||||||||||||||||||||
2012 | 30 | |||||||||||||||||||||||||||||||
2011 | 28 | |||||||||||||||||||||||||||||||
The Xylem Stock Fund, an investment option under the defined contribution plan in which Company employees participate is considered an Employee Stock Ownership Plan. As a result, participants in the Xylem Stock Fund may receive dividends in cash or may reinvest such dividends into the Xylem Stock Fund. Company employees held approximately 453 thousand and 528 thousand shares of Xylem Inc. common stock in the Xylem Stock Fund at December 31, 2013 and 2012, respectively. | ||||||||||||||||||||||||||||||||
Defined benefit pension plans and other postretirement plans – We historically have maintained qualified and nonqualified defined benefit retirement plans covering certain current and former employees, including hourly and union plans as well as salaried plans, which generally require up to 5 years of service to be vested and for which the benefits are determined based on years of credited service and either specified rates, final pay, or final average pay. The other postretirement benefit plans are all unfunded plans in the U.S. and Canada. | ||||||||||||||||||||||||||||||||
Prior to the Spin-off, employees who met certain eligibility requirements participated in various defined benefit pension plans and other postretirement benefit plans administered and sponsored by ITT. These plans were accounted for under a multi-employer plan and as such, we recorded expense of $49 million in 2011 to reflect our allocation of pension and other postretirement benefit costs related to shared plans. | ||||||||||||||||||||||||||||||||
Pursuant to the Benefit and Compensation Matters Agreement, the assets and liabilities of certain defined benefit plans and other post retirement benefit plans, allocable to Xylem employees, were transferred to Xylem. Assets of $337 million, projected obligation of $400 million and $105 million of other comprehensive income ($73 million net of tax) were recorded for the plans transferred by ITT. In the U.S., the new Xylem Investment Master Trust (U.S. Master Trust) was created at the time of the Spin-off and $45 million of assets were transferred from the ITT Master Trust related to the Xylem U.S. defined benefit pension plans for hourly employees. | ||||||||||||||||||||||||||||||||
Benefits accrued for Xylem specific participants under the ITT Salaried Retirement Plan ceased on October 31, 2011. As a result, a curtailment was recorded by ITT during the third quarter of 2011, of which we were allocated a charge of $1 million. As of December 31, 2011, there were no required contributions outstanding. The Company does not offer a defined benefit plan for salaried employees in the United States. | ||||||||||||||||||||||||||||||||
The ITT Industries General Pension Plan in the UK ("the UK Plan") for salaried employees was amended, effective December 31, 2011, to eliminate the crediting of future benefits relating to service. A curtailment was recorded during the quarter ended September 30, 2011. As a result the applicable plan assets and obligations were re-measured. The re-measurement included a $9 million ($6 million net of tax) increase in deferred losses within accumulated other comprehensive income and a corresponding decrease to the funded status of the plan, as well as updated asset values, and a change in the discount rate from 6.00% to 5.75%. In addition, all participants were reclassified as inactive for benefit plan purposes and actuarial gains and losses will be amortized over 27 years which represents the expected weighted-average remaining lives of plan participants. | ||||||||||||||||||||||||||||||||
During the first quarter of 2012, an annuity was purchased to wind up five pension plans in Canada. This resulted in a settlement change of $2 million. The Company has no further obligation for these plans. | ||||||||||||||||||||||||||||||||
Effective October 1, 2013, the Xylem Canada Company Pension Plan for Salaried Employees was amended to close the plan to new entrants and a soft freeze, where benefits earned to date are based on frozen service but the future average earnings will continue to be recognized. The impact of the curtailment on the Company’s financial statements was immaterial. However, the participants are now considered inactive and actuarial gains and losses will be amortized over 25 years which represents the expected weighted-average remaining lives of the plan participants. | ||||||||||||||||||||||||||||||||
Effective October 14, 2013, an amendment to one of the Company's business unit's pension plans for its hourly workers, the Xylem Standard Hourly Bargaining Unit Pension Plan, modified the benefit formula. Pension benefits for future service will be based only on years of service. The remeasurement at year end resulted in a $4 million prior service credit, which will be amortized into net periodic pension cost over approximately 11 years. | ||||||||||||||||||||||||||||||||
Amounts recognized in the Consolidated Balance Sheets for pension and other employee-related benefit plans (collectively, postretirement plans) reflect the funded status of the postretirement benefit plans. The following table provides a summary of the funded status of our postretirement plans, the presentation of such balances and a summary of amounts recorded within accumulated other comprehensive income. | ||||||||||||||||||||||||||||||||
(in millions) | 31-Dec-13 | 31-Dec-12 | ||||||||||||||||||||||||||||||
Pension | Other | Total | Pension | Other | Total | |||||||||||||||||||||||||||
Fair value of plan assets | $ | 524 | $ | — | $ | 524 | $ | 477 | $ | — | $ | 477 | ||||||||||||||||||||
Projected benefit obligation | (777 | ) | (63 | ) | (840 | ) | (790 | ) | (65 | ) | (855 | ) | ||||||||||||||||||||
Funded status | $ | (253 | ) | $ | (63 | ) | $ | (316 | ) | $ | (313 | ) | $ | (65 | ) | $ | (378 | ) | ||||||||||||||
Amounts recognized in the balance sheet | ||||||||||||||||||||||||||||||||
Other non-current assets | $ | 46 | $ | — | $ | 46 | $ | 36 | $ | — | $ | 36 | ||||||||||||||||||||
Accrued and other current liabilities | (11 | ) | (3 | ) | (14 | ) | (11 | ) | (3 | ) | (14 | ) | ||||||||||||||||||||
Accrued postretirement benefits | (288 | ) | (60 | ) | (348 | ) | (338 | ) | (62 | ) | (400 | ) | ||||||||||||||||||||
Net amount recognized | $ | (253 | ) | $ | (63 | ) | $ | (316 | ) | $ | (313 | ) | $ | (65 | ) | $ | (378 | ) | ||||||||||||||
Accumulated other comprehensive income (loss): | ||||||||||||||||||||||||||||||||
Net actuarial losses | $ | (228 | ) | $ | (20 | ) | $ | (248 | ) | $ | (277 | ) | $ | (24 | ) | $ | (301 | ) | ||||||||||||||
Prior service cost | — | — | — | (5 | ) | — | (5 | ) | ||||||||||||||||||||||||
Total | $ | (228 | ) | $ | (20 | ) | $ | (248 | ) | $ | (282 | ) | $ | (24 | ) | $ | (306 | ) | ||||||||||||||
The unrecognized amounts recorded in accumulated other comprehensive income will be subsequently recognized as expense on a straight line basis over the average remaining service period of active participants, or for plans with all or substantially all inactive participants, over the average remaining life expectancy. Actuarial gains and losses incurred in future periods and not recognized as expense in those periods will be recognized as increases or decreases in other comprehensive income, net of tax. | ||||||||||||||||||||||||||||||||
The net actuarial loss included in accumulated other comprehensive income at the end of 2013 and expected to be recognized in net periodic benefit cost during 2014 is $11 million ($8 million, net of tax). The prior service cost included in accumulated other comprehensive income to be recognized in 2014 is less than $1 million. | ||||||||||||||||||||||||||||||||
The benefit obligation, fair value of plan assets, funded status, and amounts recognized in the consolidated and combined financial statements for our defined benefit domestic and international pension plans were: | ||||||||||||||||||||||||||||||||
Domestic Plans | International Plans | |||||||||||||||||||||||||||||||
December 31, | December 31, | |||||||||||||||||||||||||||||||
(in millions) | 2013 | 2012 | 2013 | 2012 | ||||||||||||||||||||||||||||
Change in benefit obligation: | ||||||||||||||||||||||||||||||||
Benefit obligation at beginning of year | $ | 83 | $ | 71 | $ | 707 | $ | 599 | ||||||||||||||||||||||||
Service cost | 3 | 3 | 14 | 11 | ||||||||||||||||||||||||||||
Interest cost | 3 | 3 | 28 | 29 | ||||||||||||||||||||||||||||
Benefits paid | (3 | ) | (3 | ) | (32 | ) | (33 | ) | ||||||||||||||||||||||||
Actuarial (gain) loss | (8 | ) | 9 | (9 | ) | 69 | ||||||||||||||||||||||||||
Plan amendments, settlements and curtailments | (4 | ) | — | (2 | ) | — | ||||||||||||||||||||||||||
Foreign currency translation/other | — | — | (3 | ) | 32 | |||||||||||||||||||||||||||
Benefit obligation at end of year | $ | 74 | $ | 83 | $ | 703 | $ | 707 | ||||||||||||||||||||||||
Change in plan assets: | ||||||||||||||||||||||||||||||||
Fair value of plan assets at beginning of year | $ | 51 | 44 | $ | 426 | $ | 373 | |||||||||||||||||||||||||
Employer contributions | 4 | 5 | 36 | 38 | ||||||||||||||||||||||||||||
Actual return on plan assets | 6 | 5 | 42 | 37 | ||||||||||||||||||||||||||||
Benefits paid | (3 | ) | (3 | ) | (32 | ) | (33 | ) | ||||||||||||||||||||||||
Plan amendments, settlements and curtailments | — | — | (1 | ) | (1 | ) | ||||||||||||||||||||||||||
Foreign currency translation/other | — | — | (5 | ) | 12 | |||||||||||||||||||||||||||
Fair value of plan assets at end of year | $ | 58 | $ | 51 | $ | 466 | $ | 426 | ||||||||||||||||||||||||
Funded (unfunded) status of the plans | $ | (16 | ) | $ | (32 | ) | $ | (237 | ) | $ | (281 | ) | ||||||||||||||||||||
The following table provides a rollforward of the projected benefit obligation for the other postretirement employee benefit plans: | ||||||||||||||||||||||||||||||||
(in millions) | 2013 | 2012 | ||||||||||||||||||||||||||||||
Change in benefit obligation: | ||||||||||||||||||||||||||||||||
Benefit obligation at beginning of year | $ | 65 | $ | 46 | ||||||||||||||||||||||||||||
Service cost | 1 | 1 | ||||||||||||||||||||||||||||||
Interest cost | 3 | 3 | ||||||||||||||||||||||||||||||
Benefits paid | (3 | ) | (3 | ) | ||||||||||||||||||||||||||||
Actuarial (gain) loss | (2 | ) | 15 | |||||||||||||||||||||||||||||
Other | (1 | ) | 3 | |||||||||||||||||||||||||||||
Benefit Obligation at the end of year | $ | 63 | $ | 65 | ||||||||||||||||||||||||||||
The accumulated benefit obligation (“ABO”) for all the defined benefit pension plans was $741 million and $740 million at December 31, 2013 and 2012, respectively. For defined benefit pension plans in which the accumulated benefit obligation was in excess of the fair value of the plans’ assets, the projected benefit obligation (“PBO”), ABO and fair value of the plans’ assets were as follows: | ||||||||||||||||||||||||||||||||
December 31, | ||||||||||||||||||||||||||||||||
(in millions) | 2013 | 2012 | ||||||||||||||||||||||||||||||
Projected benefit obligation | $ | 404 | $ | 516 | ||||||||||||||||||||||||||||
Accumulated benefit obligation | 375 | 469 | ||||||||||||||||||||||||||||||
Fair value of plan assets | 106 | 171 | ||||||||||||||||||||||||||||||
The components of net periodic benefit cost for our defined benefit pension plans are as follows: | ||||||||||||||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||||||||||||||
(in millions) | 2013 | 2012 | 2011 | |||||||||||||||||||||||||||||
Domestic defined benefit pension plans: | ||||||||||||||||||||||||||||||||
Service cost | $ | 3 | $ | 3 | $ | 2 | ||||||||||||||||||||||||||
Interest cost | 3 | 3 | 3 | |||||||||||||||||||||||||||||
Expected return on plan assets | (4 | ) | (4 | ) | (4 | ) | ||||||||||||||||||||||||||
Amortization of prior service cost | 1 | 1 | 1 | |||||||||||||||||||||||||||||
Amortization of net actuarial loss | 2 | 2 | — | |||||||||||||||||||||||||||||
Net periodic benefit cost | $ | 5 | $ | 5 | $ | 2 | ||||||||||||||||||||||||||
International defined benefit pension plans: | ||||||||||||||||||||||||||||||||
Service cost | $ | 14 | $ | 11 | $ | 6 | ||||||||||||||||||||||||||
Interest cost | 28 | 29 | 12 | |||||||||||||||||||||||||||||
Expected return on plan assets | (31 | ) | (30 | ) | (6 | ) | ||||||||||||||||||||||||||
Amortization of net actuarial loss | 13 | 8 | 2 | |||||||||||||||||||||||||||||
Settlement and special termination benefits | — | 2 | 1 | |||||||||||||||||||||||||||||
Net periodic benefit cost | $ | 24 | $ | 20 | $ | 15 | ||||||||||||||||||||||||||
Total net periodic benefit cost | $ | 29 | $ | 25 | $ | 17 | ||||||||||||||||||||||||||
Other changes in plan assets and benefit obligations recognized in other comprehensive income, as they pertain to our defined benefit pension plans are as follows: | ||||||||||||||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||||||||||||||
(in millions) | 2013 | 2012 | 2011 | |||||||||||||||||||||||||||||
Domestic defined benefit pension plans: | ||||||||||||||||||||||||||||||||
Net (gain) loss | $ | (11 | ) | $ | 8 | $ | 14 | |||||||||||||||||||||||||
Prior service (credit) cost | (4 | ) | 1 | — | ||||||||||||||||||||||||||||
Amortization of prior service cost | (1 | ) | (1 | ) | (1 | ) | ||||||||||||||||||||||||||
Amortization of net actuarial loss | (2 | ) | (2 | ) | — | |||||||||||||||||||||||||||
Change recognized in other comprehensive income | $ | (18 | ) | $ | 6 | $ | 13 | |||||||||||||||||||||||||
International defined benefit pension plans: | ||||||||||||||||||||||||||||||||
Net (gain) loss | $ | (21 | ) | $ | 62 | $ | 57 | |||||||||||||||||||||||||
Amortization of net actuarial loss | (13 | ) | (8 | ) | (2 | ) | ||||||||||||||||||||||||||
Settlement | — | (2 | ) | — | ||||||||||||||||||||||||||||
Foreign exchange | (2 | ) | 8 | — | ||||||||||||||||||||||||||||
Change recognized in other comprehensive (income) loss (a) | $ | (36 | ) | $ | 60 | $ | 55 | |||||||||||||||||||||||||
Total recognized in other comprehensive (income) loss | $ | (54 | ) | $ | 66 | $ | 68 | |||||||||||||||||||||||||
Total recognized in comprehensive (income) loss | $ | (25 | ) | $ | 91 | $ | 85 | |||||||||||||||||||||||||
(a) | The 2011 amount excludes $97 million ($68 million net of tax) of deferred losses assumed upon Spin-off. | |||||||||||||||||||||||||||||||
The components of net periodic benefit cost for other postretirement employee benefit plans are as follows: | ||||||||||||||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||||||||||||||
(in millions) | 2013 | 2012 | 2011 | |||||||||||||||||||||||||||||
Service cost | $ | 1 | $ | 1 | $ | 1 | ||||||||||||||||||||||||||
Interest cost | 3 | 3 | 1 | |||||||||||||||||||||||||||||
Amortization of net actuarial loss | 2 | 1 | — | |||||||||||||||||||||||||||||
Net periodic benefit cost | $ | 6 | $ | 5 | $ | 2 | ||||||||||||||||||||||||||
Other changes in plan assets and benefit obligations recognized in other comprehensive income, as they pertain to other postretirement employee benefit plans are as follows: | ||||||||||||||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||||||||||||||
(in millions) | 2013 | 2012 | 2011 | |||||||||||||||||||||||||||||
Net (gain) loss | $ | (2 | ) | $ | 14 | $ | 3 | |||||||||||||||||||||||||
Amortization of net actuarial loss | (2 | ) | (1 | ) | — | |||||||||||||||||||||||||||
Change recognized in other comprehensive (income) loss (a) | $ | (4 | ) | $ | 13 | $ | 3 | |||||||||||||||||||||||||
Total recognized in comprehensive loss | $ | 2 | $ | 18 | $ | 5 | ||||||||||||||||||||||||||
(a) | The 2011 amount excludes $8 million ($5 million net of tax) of deferred losses assumed upon Spin-off. | |||||||||||||||||||||||||||||||
Assumptions | ||||||||||||||||||||||||||||||||
The following table provides the weighted-average assumptions used to determine projected benefit obligations and net periodic benefit cost, as they pertain to our pension plans. | ||||||||||||||||||||||||||||||||
2013 | 2012 | 2011 | ||||||||||||||||||||||||||||||
U.S. | Int’l | U.S. | Int’l | U.S. | Int’l | |||||||||||||||||||||||||||
Benefit Obligation Assumptions | ||||||||||||||||||||||||||||||||
Discount rate | 4.79 | % | 4.23 | % | 4.13 | % | 4.04 | % | 4.87 | % | 4.76 | % | ||||||||||||||||||||
Rate of future compensation increase | NM | 3.48 | % | 4.5 | % | 3.5 | % | 4.5 | % | 3.58 | % | |||||||||||||||||||||
Net Periodic Benefit Cost Assumptions | ||||||||||||||||||||||||||||||||
Discount rate | 4.13 | % | 4.04 | % | 4.87 | % | 4.76 | % | 5.83 | % | 5.53 | % | ||||||||||||||||||||
Expected long-term return on plan assets | 8 | % | 7.33 | % | 8 | % | 7.35 | % | 9 | % | 7.34 | % | ||||||||||||||||||||
Rate of future compensation increase | 4.5 | % | 3.5 | % | 4.5 | % | 3.58 | % | 4.5 | % | 3.37 | % | ||||||||||||||||||||
NM | Not meaningful. During 2013, an amendment to one of the Company's business unit's pension plans, the Xylem Standard Hourly Bargaining Unit Pension Plan, modified the benefit formula. Similar to all other U.S. pension plans, pension benefits for future service will be based on years of service and not impacted by future compensation increases. | |||||||||||||||||||||||||||||||
Management develops each assumption using relevant company experience in conjunction with market-related data for each individual country in which plans exist. Assumptions are reviewed annually and adjusted as necessary. | ||||||||||||||||||||||||||||||||
The expected long-term rate of return on assets reflects the expected returns for each major asset class in which the plans hold investments, the weight of each asset class in the target mix, the correlations among asset classes and their expected volatilities. The assets of the pension plans are held by a number of independent trustees, managed by several investment institutions and are accounted for separately in the Company’s pension funds. | ||||||||||||||||||||||||||||||||
Our expected return on plan assets is estimated by evaluating both historical returns and estimates of future returns. Specifically, we analyze the plans’ actual historical annual return on assets, net of fees, over the past 15, 20 and 25 years; estimate future returns based on independent estimates of asset class returns; and evaluate historical broad market returns over long-term timeframes based on our asset allocation range. For the new U.S. Master Trust, historical returns were estimated using a constructed portfolio that reflects the Company’s strategic asset allocation and the historical compound geometric returns of each asset class for the longest time period available. Based on this approach, the weighted average expected long-term rate of return on assets for all plan assets effective January 1, 2014 is estimated at 7.38%. | ||||||||||||||||||||||||||||||||
The table below provides the weighted average actual rate of return generated on plan assets during each of the years presented as compared to the weighted average expected long-term rates of return utilized in calculating the net periodic benefit costs. | ||||||||||||||||||||||||||||||||
2013 | 2012 | 2011 | ||||||||||||||||||||||||||||||
Expected long-term rate of return on plan assets | 7.4 | % | 7.42 | % | 7.52 | % | ||||||||||||||||||||||||||
Actual rate of return on plan assets | 10.17 | % | 10.09 | % | (1.40 | )% | ||||||||||||||||||||||||||
The assumed rate of future increases in the per capita cost of health care (the health care trend rate) is 7.19% for 2014, decreasing ratably to 5.00% in 2020. An increase or decrease in the health care trend rates by one percent per year would impact the aggregate annual service and interest components by less than $1 million, and impact the benefit obligation by approximately $8 million. To the extent that actual experience differs from these assumptions, the effect will be amortized over the average future service of the covered active employees. | ||||||||||||||||||||||||||||||||
The determination of the assumptions related to postretirement benefit plans are based on the provisions of the applicable accounting pronouncements, the review of various market data and discussion with our actuaries. | ||||||||||||||||||||||||||||||||
Investment Policy | ||||||||||||||||||||||||||||||||
The investment strategy for managing worldwide postretirement benefit plan assets is to seek an optimal rate of return relative to an appropriate level of risk for each plan. Investment strategies vary by plan, depending on the specific characteristics of the plan, such as plan size and design, funded status, liability profile and legal requirements. In general, the plans are managed closely to their strategic allocations. | ||||||||||||||||||||||||||||||||
The following table provides the actual asset allocations of plan assets as of December 31, 2013 and 2012, and the related asset target allocation ranges by asset category. | ||||||||||||||||||||||||||||||||
2013 | 2012 | Target | ||||||||||||||||||||||||||||||
Allocation | ||||||||||||||||||||||||||||||||
Ranges | ||||||||||||||||||||||||||||||||
Equity securities | 31.7 | % | 29.2 | % | 20-40% | |||||||||||||||||||||||||||
Fixed income | 24.7 | % | 26.4 | % | 20-50% | |||||||||||||||||||||||||||
Hedge funds | 23.5 | % | 29.4 | % | 20-60% | |||||||||||||||||||||||||||
Private equity | 4.2 | % | 5.1 | % | 0-15% | |||||||||||||||||||||||||||
Insurance contracts and other | 15.9 | % | 9.9 | % | 0-30% | |||||||||||||||||||||||||||
During the fourth quarter of 2012, the investment strategy for the plan assets within our UK Plan was adjusted with the objective of reducing risk to market and economic volatility as well as helping to maintain the fully funded status and enhance portfolio liquidity. Since at the time the UK Plan held 58% of the Company's postretirement plan assets, this change reduced the overall Company target allocations in equity securities, fixed income and private equity, while increasing the allocation to hedge funds. | ||||||||||||||||||||||||||||||||
Fair Value of Plan Assets | ||||||||||||||||||||||||||||||||
In measuring plan assets at fair value, a fair value hierarchy is applied which categorizes and prioritizes the inputs used to estimate fair value into three levels. The fair value hierarchy is based on maximizing the use of observable inputs and minimizing the use of unobservable inputs when measuring fair value. Classification within the fair value hierarchy is based on the lowest level input that is significant to the fair value measurement. The three levels of the fair value hierarchy are defined as follows: | ||||||||||||||||||||||||||||||||
• | Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. | |||||||||||||||||||||||||||||||
• | Level 2 inputs are other than quoted prices included within level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices (in non-active markets or in active markets for similar assets or liabilities), inputs other than quoted prices that are observable, and inputs that are derived principally from or corroborated by observable market data by correlation or other means. | |||||||||||||||||||||||||||||||
• | Level 3 inputs are unobservable inputs for the assets or liabilities. | |||||||||||||||||||||||||||||||
In certain instances, fair value is estimated using quoted market prices obtained from external pricing services. In obtaining such data from the pricing service, we have evaluated the methodologies used to develop the estimate of fair value in order to assess whether such valuations are representative of fair value, including net asset value (NAV). Additionally, in certain circumstances, the NAV reported by an asset manager may be adjusted when sufficient evidence indicates NAV is not representative of fair value. | ||||||||||||||||||||||||||||||||
The following is a description of the valuation methodologies and inputs used to measure fair value for major categories of investments. | ||||||||||||||||||||||||||||||||
• | Equity securities — Equities (including common and preferred shares, domestic listed and foreign listed, closed end mutual funds and exchange traded funds) are generally valued at the closing price reported on the major market on which the individual securities are traded at the measurement date. Equity securities held by the Company that are publicly traded in active markets are classified within Level 1 of the fair value hierarchy. Those equities that are held in proprietary funds pooled with other investor accounts are generally classified within Level 2 of the hierarchy. | |||||||||||||||||||||||||||||||
• | Fixed income — United States government securities are generally valued using quoted prices of securities with similar characteristics. Corporate bonds and notes are generally valued by using pricing models (e.g. discounted cash flows), quoted prices of securities with similar characteristics or broker quotes. Fixed income securities are generally classified in Level 2 of the fair value hierarchy, however, bond funds listed on active markets are classified in Level 1. | |||||||||||||||||||||||||||||||
• | Hedge funds — Hedge funds are pooled funds that employ a range of investment strategies including equity and fixed income, credit driven, macro and multi oriented strategies. The valuation of limited partnership interests in hedge funds may require significant management judgment. The NAV reported by the asset manager is adjusted when it is determined that NAV is not representative of fair value. In making such an assessment, a variety of factors is reviewed, including, but not limited to, the timeliness of NAV as reported by the asset manager and changes in general economic and market conditions subsequent to the last NAV reported by the asset manager. Depending on how these investments can be redeemed and the extent of any adjustments to NAV, hedge funds are classified within either Level 2 (redeemable within 90 days) or Level 3 (redeemable beyond 90 days) of the fair value hierarchy. | |||||||||||||||||||||||||||||||
• | Private equity — Private equity includes a diversified range of strategies, including buyout funds, distressed funds, venture and growth equity funds and mezzanine funds. The valuation of limited partnership interests in private equity funds may require significant management judgment. The NAV reported by the asset manager is adjusted when it is determined that NAV is not representative of fair value. In making such an assessment, a variety of factors is reviewed, including, but not limited to, the timeliness of NAV as reported by the asset manager and changes in general economic and market conditions subsequent to the last NAV reported by the asset manager. These funds are generally classified within Level 3 of the fair value hierarchy. | |||||||||||||||||||||||||||||||
• | Insurance contracts and other — Primarily comprised of insurance contracts and cash. Insurance contracts are valued at book value, which approximates fair value, and is calculated using the prior year balance adjusted for investment returns and cash flows. Cash and cash equivalents are held in accounts with brokers or custodians for liquidity and investment collateral. | |||||||||||||||||||||||||||||||
The following table provides the fair value of plan assets held by our pension benefit plans by asset class. | ||||||||||||||||||||||||||||||||
December 31, | ||||||||||||||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||||||||||||||
(in millions) | Total | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||
Asset Category | ||||||||||||||||||||||||||||||||
Equity securities | ||||||||||||||||||||||||||||||||
Global stock funds/securities | $ | 123 | $ | 108 | $ | 11 | $ | 4 | $ | 93 | $ | 79 | $ | 11 | $ | 3 | ||||||||||||||||
Index funds | 40 | 3 | 37 | — | 46 | 3 | 43 | — | ||||||||||||||||||||||||
Emerging markets funds | 3 | 3 | — | — | — | — | — | — | ||||||||||||||||||||||||
Fixed income | ||||||||||||||||||||||||||||||||
Corporate bonds | 95 | 40 | 48 | 7 | 100 | 32 | 59 | 9 | ||||||||||||||||||||||||
Government bonds | 35 | 35 | — | — | 26 | 23 | 3 | — | ||||||||||||||||||||||||
Hedge funds | 123 | 9 | 95 | 19 | 140 | 44 | 76 | 20 | ||||||||||||||||||||||||
Private equity | 22 | — | — | 22 | 24 | — | — | 24 | ||||||||||||||||||||||||
Insurance contracts and other | 83 | 62 | 4 | 17 | 48 | 44 | — | 4 | ||||||||||||||||||||||||
Total | $ | 524 | $ | 260 | $ | 195 | $ | 69 | $ | 477 | $ | 225 | $ | 192 | $ | 60 | ||||||||||||||||
The following table presents a reconciliation of the beginning and ending balances of fair value measurement within our pension plans using significant unobservable inputs (Level 3). | ||||||||||||||||||||||||||||||||
(in millions) | Equity | Fixed Income | Hedge funds | Private Equity | Other | Total | ||||||||||||||||||||||||||
Securities | ||||||||||||||||||||||||||||||||
Balance, December 31, 2011 | $ | 2 | $ | — | $ | 37 | $ | 24 | $ | 4 | $ | 67 | ||||||||||||||||||||
Purchases, sales, settlements | — | 8 | 8 | (1 | ) | — | 15 | |||||||||||||||||||||||||
Unrealized loss | — | 1 | 1 | 1 | — | 3 | ||||||||||||||||||||||||||
Realized gains | 1 | — | 1 | — | — | 2 | ||||||||||||||||||||||||||
Net transfers | — | — | (25 | ) | — | — | (25 | ) | ||||||||||||||||||||||||
Currency impact | — | — | (2 | ) | — | — | (2 | ) | ||||||||||||||||||||||||
Balance, December 31, 2012 | 3 | 9 | 20 | 24 | 4 | 60 | ||||||||||||||||||||||||||
Purchases, sales, settlements | — | (3 | ) | 10 | (4 | ) | 12 | 15 | ||||||||||||||||||||||||
Unrealized gains | — | 1 | 1 | 1 | 1 | 4 | ||||||||||||||||||||||||||
Realized gains | 1 | — | — | — | — | 1 | ||||||||||||||||||||||||||
Net transfers | — | — | (12 | ) | — | — | (12 | ) | ||||||||||||||||||||||||
Currency impact | — | — | — | 1 | — | 1 | ||||||||||||||||||||||||||
Balance, December 31, 2013 | $ | 4 | $ | 7 | $ | 19 | $ | 22 | $ | 17 | $ | 69 | ||||||||||||||||||||
Contributions and Estimated Future Benefit Payments | ||||||||||||||||||||||||||||||||
Funding requirements under governmental regulations are a major consideration in making contributions to our postretirement plans. We made contributions of $43 million and $46 million to our pension and postretirement benefit plans during 2013 and 2012, respectively. We currently anticipate making contributions to our pension and postretirement benefit plans in the range of $40 million to $50 million during 2014, of which $11 million is expected to be made in the first quarter. | ||||||||||||||||||||||||||||||||
The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid as follows: | ||||||||||||||||||||||||||||||||
(in millions) | Pension | Other Benefits | ||||||||||||||||||||||||||||||
2014 | $ | 35 | $ | 3 | ||||||||||||||||||||||||||||
2015 | 36 | 3 | ||||||||||||||||||||||||||||||
2016 | 37 | 3 | ||||||||||||||||||||||||||||||
2017 | 38 | 3 | ||||||||||||||||||||||||||||||
2018 | 39 | 3 | ||||||||||||||||||||||||||||||
Years 2019 – 2023 | 222 | 20 | ||||||||||||||||||||||||||||||
StockBased_Compensation
Stock-Based Compensation | 12 Months Ended | |||||||||||
Dec. 31, 2013 | ||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | |||||||||||
Stock-Based Compensation Plans | ' | |||||||||||
Stock-Based Compensation Plans | ||||||||||||
Our stock-based compensation program is a broad-based program designed to attract and retain employees while also aligning employees’ interests with the interests of our shareholders. In addition, members of our Board of Directors participate in our stock-based compensation program in connection with their service on our board. Share-based awards issued to employees include non-qualified stock options, restricted stock awards and performance-based awards. Compensation costs resulting from share-based payment transactions are recognized primarily within selling, general and administrative expenses, at fair value over the requisite service period (typically three years) on a straight-line basis. Under the 2011 Omnibus Incentive Plan, the number of shares initially available for awards was 18 million. As of December 31, 2013, there were approximately 10 million shares of common stock available for future grants. | ||||||||||||
We measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. The calculated compensation cost is adjusted based on an estimate of awards ultimately expected to vest. The fair value of a non-qualified stock option is determined on the date of grant using a binomial lattice pricing model incorporating multiple and variable assumptions over time, including assumptions such as employee exercise patterns, stock price volatility and changes in dividends. The fair value of restricted stock and performance-based share awards are determined using the closing price on date of grant. | ||||||||||||
Total share-based compensation costs recognized for 2013, 2012 and 2011 were $27 million, $22 million, and $13 million, respectively. We recognized less than $1 million of share-based compensation costs within Restructuring and asset impairment charges during 2013, which relates to the acceleration of certain unamortized compensation expense for share-based compensation of restructured employees. A significant component of the charges in 2011 related to costs allocated to Xylem for ITT Corporate employees as well as other ITT employees not solely dedicated to Xylem. These awards and related amounts are not necessarily indicative of awards and amounts that would have been granted if we were an independent, publicly traded company for that period. | ||||||||||||
The unamortized compensation expense related to our stock options, restricted shares and performance-based shares was $6 million, $17 million and $1 million, respectively, at December 31, 2013 and is expected to be recognized over a weighted average period of 1.5, 1.7 and 2.2 years, respectively. | ||||||||||||
The amount of cash received from the exercise of stock options was $22 million for 2013 with a tax benefit of $8 million realized associated with stock option exercises and vesting of restricted stock. We classify as a financing activity the cash flows attributable to excess tax benefits arising from stock option exercises and restricted stock vestings. | ||||||||||||
Stock Option Grants | ||||||||||||
Options are awarded with a contractual term of ten years and generally vest over or at the conclusion of a three-year period and are exercisable in seven to ten-year periods, except in certain instances of death, retirement or disability. The exercise price per share is the fair market value of the underlying common stock on the date each option is granted. At December 31, 2013, there were options to purchase an aggregate of 3.5 million shares of common stock. The following is a summary of the changes in outstanding stock options for 2013: | ||||||||||||
(shares in thousands) | Shares | Weighted | Weighted Average | |||||||||
Average | Remaining | |||||||||||
Exercise | Contractual | |||||||||||
Price / Share | Term (Years) | |||||||||||
Outstanding at January 1, 2013 | 4,083 | $ | 26.46 | 6.4 | ||||||||
Granted | 817 | $ | 27.43 | 10 | ||||||||
Exercised | (850 | ) | $ | 25.01 | 3.4 | |||||||
Forfeited | (546 | ) | $ | 27.86 | 6.1 | |||||||
Outstanding at December 31, 2013 | 3,504 | $ | 26.8 | 6.4 | ||||||||
Options exercisable at December 31, 2013 | 1,994 | $ | 26.71 | 4.9 | ||||||||
Vested and non-vested expected to vest at December 31. 2013 | 3,438 | $ | 26.79 | 6.4 | ||||||||
The amount of non-vested options outstanding was 1.5 million and 2.2 million at a weighted average grant date fair value of $26.90 and $27.14 as of December 31, 2013 and January 1, 2013, respectively. The aggregate intrinsic value of the outstanding, exercisable and vested and non-vested stock options expected to vest at December 31, 2013 was $28 million, $16 million and $27 million respectively. 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 2013 was $7 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 2013. | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
Dividend yield | 1.69 | % | 1.52 | % | 1.51 | % | ||||||
Volatility | 31.1 | % | 33.4 | % | 36.3 | % | ||||||
Risk-free interest rate | 1.28 | % | 1.42 | % | 1.5 | % | ||||||
Expected term (in years) | 6.62 | 7 | 6.4 | |||||||||
Weighted-average fair value per share | $ | 7.58 | $ | 8.1 | $ | 7.88 | ||||||
Expected volatility is calculated based on an analysis of historic and implied volatility measures for a set of peer companies. 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 expected term provided above represents the weighted average of expected behavior for certain groups of employees who have historically exhibited different behavior. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of option grant. | ||||||||||||
Restricted Stock Grants | ||||||||||||
As part of the 2011 Omnibus Incentive Plan, we are authorized to issue shares of restricted stock to eligible employees and directors. Restricted shares granted to employees become fully vested upon the third anniversary of the date of grant, and certain liability-based restricted shares to international employees settle in cash. Prior to the time a restricted share becomes fully vested, the awardees cannot transfer, pledge, hypothecate or encumber such shares. Prior to the time a restricted share is fully vested, the awardees have certain rights of a stockholder and may include the right to vote and receive dividends. If an employee leaves prior to vesting, whether through resignation or termination for cause, the restricted stock and related accrued dividends are forfeited. If an employee retires or is terminated other than for cause, a pro rata portion of the restricted stock may vest in accordance with the terms of the grant agreements. Restricted shares granted to Board members become fully vested upon the date of the next annual meeting. | ||||||||||||
Our restricted stock activity was as follows for 2013: | ||||||||||||
(shares in thousands) | Shares | Weighted Average | ||||||||||
Grant Date Fair | ||||||||||||
Value Per Share | ||||||||||||
Outstanding at January 1, 2013 | 1,588 | $ | 26.92 | |||||||||
Granted | 568 | $ | 28.18 | |||||||||
Vested | (691 | ) | $ | 26.44 | ||||||||
Forfeited | (190 | ) | $ | 28.84 | ||||||||
Outstanding at December 31, 2013 | 1,275 | $ | 27.67 | |||||||||
Performance-Based Share Grants | ||||||||||||
As part of the annual March 2013 grant under the long-term incentive plan, performance-based shares were granted to all executive officers of the Company. The performance-based shares vest based upon performance by the Company over a three-year period against targets approved by the compensation committee of the Company's Board of Directors prior to the grant date. For the 2013-2015 performance period, the performance-based shares were granted at a target of 100% with actual payout contingent upon the achievement of a pre-set, three-year adjusted Return on Invested Capital and cumulative adjusted net income performance target. Compensation costs resulting from share-based payment transactions are recognized primarily within selling, general and administrative expenses, at fair value over the requisite service period (typically three years) on a straight-line basis. The calculated compensation cost is adjusted based on an estimate of awards ultimately expected to vest and our assessment of the probable outcome of the performance condition. The fair value of performance-based share awards at 100% target is determined using the closing price of our common stock on date of grant. | ||||||||||||
Our performance-based share activity was as follows for 2013: | ||||||||||||
(shares in thousands) | Shares | Weighted Average | ||||||||||
Grant Date Fair | ||||||||||||
Value Per Share | ||||||||||||
Outstanding at January 1, 2013 | — | $ | — | |||||||||
Granted | 119 | $ | 27.49 | |||||||||
Vested | — | $ | — | |||||||||
Forfeited | (67 | ) | $ | 27.49 | ||||||||
Outstanding at December 31, 2013 | 52 | $ | 27.49 | |||||||||
Accumulated_Other_Comprehensiv
Accumulated Other Comprehensive Income (Loss) | 12 Months Ended | |||||||||||||||
Dec. 31, 2013 | ||||||||||||||||
Accumulated Other Comprehensive Income [Abstract] | ' | |||||||||||||||
Accumulated Other Comprehensive Income (Loss) | ' | |||||||||||||||
Accumulated Other Comprehensive Income (Loss) | ||||||||||||||||
The following table provides the components of accumulated other comprehensive income for 2013, 2012 and 2011: | ||||||||||||||||
(in millions) | Foreign Currency Translation | Postretirement Benefit Plans | Derivative Instruments | Total | ||||||||||||
Balance at January 1, 2011 | $ | 73 | $ | (36 | ) | $ | — | $ | 37 | |||||||
Foreign currency translation adjustment | (61 | ) | (61 | ) | ||||||||||||
Contributed currency translation adjustment | 276 | 276 | ||||||||||||||
Change in postretirement benefit plans | (74 | ) | (74 | ) | ||||||||||||
Change in tax on postretirement benefit plans | 15 | 15 | ||||||||||||||
Amortization of prior service cost and net actuarial loss on postretirement benefit plans into: | ||||||||||||||||
Cost of revenue | 2 | 2 | ||||||||||||||
Selling, general and administrative expenses | 1 | 1 | ||||||||||||||
Tax on amortization of postretirement benefit plan items | (1 | ) | (1 | ) | ||||||||||||
Assumption of accumulated unrealized gains | (105 | ) | (105 | ) | ||||||||||||
Assumption of tax on accumulated unrealized gains | 32 | 32 | ||||||||||||||
Balance at December 31, 2011 | $ | 288 | $ | (166 | ) | $ | — | $ | 122 | |||||||
Foreign currency translation adjustment | 48 | 48 | ||||||||||||||
Change in postretirement benefit plans | (93 | ) | (93 | ) | ||||||||||||
Change in tax on postretirement benefit plans | 27 | 27 | ||||||||||||||
Amortization of prior service cost and net actuarial loss on postretirement benefit plans into: | ||||||||||||||||
Cost of revenue | 5 | 5 | ||||||||||||||
Selling, general and administrative expenses | 5 | 5 | ||||||||||||||
Other non-operating (expense) income, net | 4 | 4 | ||||||||||||||
Tax on amortization of postretirement benefit plan items | (4 | ) | (4 | ) | ||||||||||||
Unrealized gain on foreign exchange agreements | 4 | 4 | ||||||||||||||
Tax on unrealized gain on foreign exchange agreements | (1 | ) | (1 | ) | ||||||||||||
Reclassification of unrealized gain on foreign exchange agreements | (3 | ) | (3 | ) | ||||||||||||
Tax on reclassification of unrealized gain on foreign exchange agreements | 1 | 1 | ||||||||||||||
Balance at December 31, 2012 | $ | 336 | $ | (222 | ) | $ | 1 | $ | 115 | |||||||
(in millions) | Foreign Currency Translation | Postretirement Benefit Plans | Derivative Instruments | Total | ||||||||||||
Balance at January 1, 2013 | $ | 336 | $ | (222 | ) | $ | 1 | $ | 115 | |||||||
Foreign currency translation adjustment | 15 | 15 | ||||||||||||||
Change in postretirement benefit plans | 40 | 40 | ||||||||||||||
Change in tax on postretirement benefit plans | (17 | ) | (17 | ) | ||||||||||||
Amortization of prior service cost and net actuarial loss on postretirement benefit plans into: | ||||||||||||||||
Cost of revenue | 7 | 7 | ||||||||||||||
Selling, general and administrative expenses | 7 | 7 | ||||||||||||||
Research and development expenses | 1 | 1 | ||||||||||||||
Other non-operating (expense) income, net | 3 | 3 | ||||||||||||||
Tax on amortization of postretirement benefit plan items | (5 | ) | (5 | ) | ||||||||||||
Unrealized gains on foreign exchange agreements | 1 | 1 | ||||||||||||||
Reclassification of unrealized gain on foreign exchange agreements into revenue | (2 | ) | (2 | ) | ||||||||||||
Reclassification of unrealized loss on foreign exchange agreements into cost of revenue | 2 | 2 | ||||||||||||||
Balance at December 31, 2013 | $ | 351 | $ | (186 | ) | $ | 2 | $ | 167 | |||||||
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | |||||||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | ' | |||||||||||||||||||||||
Commitments and Contingencies | ' | |||||||||||||||||||||||
Commitments and Contingencies | ||||||||||||||||||||||||
General | ||||||||||||||||||||||||
From time to time, we are involved in legal proceedings that are incidental to the operation of our businesses, including acquisitions and divestitures, intellectual property matters, product liability and personal injury claims, employment and pension matters, government and commercial contract disputes. | ||||||||||||||||||||||||
We are currently involved in litigation relating to a purchase price dispute with the minority shareholders arising from one of our historical acquisitions. The court recently announced its decision to increase the purchase price to be paid to such minority shareholders, and both sides are appealing that decision. | ||||||||||||||||||||||||
From time to time claims may be asserted against Xylem alleging injury caused by any our products resulting from asbestos exposure. We believe there are numerous legal defenses available for such claims and would defend ourselves vigorously. Pursuant to the Distribution Agreement ("Distribution Agreement") dated October 25, 2011 among ITT, Exelis and Xylem, ITT has an obligation to indemnify, defend and hold Xylem harmless for asbestos product liability matters, including settlements, judgments, and legal defense costs associated with all pending and future claims that may arise from past sales of ITT’s legacy products. We believe ITT remains a substantial entity with sufficient financial resources to honor its obligations to us. | ||||||||||||||||||||||||
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 expect 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 $17 million and $8 million as of December 31, 2013 and 2012, respectively for these general legal matters. | ||||||||||||||||||||||||
Indemnifications | ||||||||||||||||||||||||
As part of the Spin-off, ITT, Exelis and Xylem agreed to indemnify, defend and hold harmless each of the other parties with respect to such parties’ assumed or retained liabilities under the Distribution Agreement and breaches of the Distribution Agreement or related spin agreements. ITT’s indemnification obligations include asserted and unasserted asbestos and silica liability claims that relate to the presence or alleged presence of asbestos or silica in products manufactured, repaired or sold prior to October 21, 2011, the Distribution Date, subject to limited exceptions with respect to certain employee claims, or in the structure or material of any building or facility, subject to exceptions with respect to employee claims relating to Xylem buildings or facilities. The indemnification associated with pending and future asbestos claims does not expire. Xylem has not recorded a liability for material matters for which we expect to be indemnified by ITT or Exelis through the Distribution Agreement and we are not aware of any claims or other circumstances that would give rise to material payments from us under such indemnifications. | ||||||||||||||||||||||||
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, 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 the 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 $8 million and $11 million as of December 31, 2013 and 2012, respectively, 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. In our opinion, the total amount accrued is reasonable based on existing facts and circumstances. | ||||||||||||||||||||||||
As of December 31, 2013, our estimate of reasonably possible losses in excess of amounts accrued for environmental and legal matters was approximately $26 million. | ||||||||||||||||||||||||
Operating Leases | ||||||||||||||||||||||||
We lease certain offices, manufacturing buildings, machinery, computers and other equipment. Such leases expire at various dates through 2047 and may include renewal and payment escalation clauses. We often pay maintenance, insurance and tax expense related to leased assets. Total rent expense for the three years ended December 31, 2013 was as follows: | ||||||||||||||||||||||||
(in millions) | Total | |||||||||||||||||||||||
2013 | $ | 77 | ||||||||||||||||||||||
2012 | 73 | |||||||||||||||||||||||
2011 | 64 | |||||||||||||||||||||||
At December 31, 2013, we are obligated to make minimum rental payments under operating leases which are as follows: | ||||||||||||||||||||||||
(in millions) | 2014 | 2015 | 2016 | 2017 | 2018 | Thereafter | ||||||||||||||||||
Minimum rental payments | $ | 63 | $ | 51 | $ | 39 | $ | 24 | $ | 22 | $ | 26 | ||||||||||||
Warranties | ||||||||||||||||||||||||
We warrant numerous products, the terms of which vary widely. In general, we warrant products against defect and specific non-performance. Warranty expense was $34 million, $32 million, and $35 million for 2013, 2012 and 2011, respectively. The table below provides changes in the product warranty accrual over each period. | ||||||||||||||||||||||||
(in millions) | 2013 | 2012 | ||||||||||||||||||||||
Warranty accrual – January 1 | $ | 40 | $ | 42 | ||||||||||||||||||||
Net changes for product warranties in the period | 34 | 32 | ||||||||||||||||||||||
Settlement of warranty claims | (37 | ) | (33 | ) | ||||||||||||||||||||
Other | — | (1 | ) | |||||||||||||||||||||
Warranty accrual – December 31 | $ | 37 | $ | 40 | ||||||||||||||||||||
Related_Party_Transactions_and
Related Party Transactions and Parent Company Equity | 12 Months Ended | |||
Dec. 31, 2013 | ||||
Related Party Transactions [Abstract] | ' | |||
Related Party Transactions | ' | |||
Related Party Transactions and Parent Company Investment | ||||
Transactions with Unconsolidated Affiliates | ||||
We recorded sales to unconsolidated affiliates during 2013, 2012 and 2011 totaling $15 million, $12 million and $14 million, respectively. Additionally, we purchased $20 million, $20 million and $21 million of products from unconsolidated affiliates during 2013, 2012 and 2011, respectively. | ||||
Transactions with Former Parent | ||||
Net transfers from/(to) parent are included within parent company investment on the Consolidated and Combined Statements of Changes in Stockholders’ Equity representing activity with ITT, Xylem's former parent company, prior to the Spin-off. The components of the net transfers from/(to) parent for 2011 are as follows: | ||||
Year Ended December 31, | ||||
(in millions) | 2011 | |||
Intercompany dividends | $ | (87 | ) | |
Cash pooling and general financing activities | (1,355 | ) | ||
Corporate allocations including income taxes | 182 | |||
Contribution of assets and liabilities upon Spin-off | 20 | |||
Total net transfers from/(to) parent | $ | (1,240 | ) | |
All significant intercompany transactions between us and ITT have been included in these consolidated and combined financial statements and are considered to be effectively settled for cash at the time the transaction is recorded, when the underlying transaction is to be settled in cash by ITT. The total net effect of the settlement of these intercompany transactions is reflected in the Consolidated and Combined Statements of Cash Flow as a financing activity. | ||||
During 2011, we sold inventory to other ITT business in the aggregate amount of $10 million, which is included in revenue in our consolidated and combined financial statements. In addition, we recognized cost of revenue from the inventory purchased from other ITT businesses of $10 million for 2011. | ||||
The consolidated and combined financial statements include expense allocations for certain functions provided by ITT as well as other ITT employees not solely dedicated to Xylem, including, but not limited to, general corporate expenses related to finance, legal, information technology, human resources, communications, ethics and compliance, shared services, employee benefits and incentives, and share-based compensation. These expenses have been allocated to us on the basis of direct usage when identifiable, with the remainder allocated on the basis of revenue, headcount or other measure. We were allocated $129 million, which includes $44 million of separation costs, of general corporate expenses incurred by ITT which is included within selling, general and administrative expenses in the Consolidated and Combined Income Statements for 2011. | ||||
The expense allocations have been determined on a basis that we consider to be a reasonable reflection of the utilization of services provided or the benefit received by us during the periods presented. The allocations may not, however, reflect the expense we would have incurred as an independent, publicly traded company for the periods presented. Actual costs that may have been incurred if we had been a standalone company would depend on a number of factors, including the chosen organizational structure, what functions were outsourced or performed by employees and strategic decisions made in areas such as information technology and infrastructure. |
Industry_Segment_and_Geographi
Industry Segment and Geographic Data | 12 Months Ended | |||||||||||
Dec. 31, 2013 | ||||||||||||
Segment Reporting [Abstract] | ' | |||||||||||
Segment Information | ' | |||||||||||
Industry Segment and Geographic Data | ||||||||||||
Our business is organized into two segments: Water Infrastructure and Applied Water. The Water Infrastructure segment, comprising our Water Solutions and Analytics operating units, focuses on the transportation, treatment and testing of water, offering a range of products including water and wastewater pumps, treatment and testing equipment, and controls and systems. The Applied Water segment, comprising our Residential & Commercial Water and Flow Control operating units, encompasses the uses of water and focuses on the residential, commercial, industrial and agricultural markets offering a wide range of products, including pumps, valves and heat exchangers. 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 the Spin-off transaction and 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 (see Note 1). The following tables contain financial information for each reportable segment: | ||||||||||||
Year Ended December 31, | ||||||||||||
(in millions) | 2013 | 2012 | 2011 | |||||||||
Revenue: | ||||||||||||
Water Infrastructure | $ | 2,457 | $ | 2,425 | $ | 2,416 | ||||||
Applied Water | 1,444 | 1,424 | 1,444 | |||||||||
Eliminations | (64 | ) | (58 | ) | (57 | ) | ||||||
Total | $ | 3,837 | $ | 3,791 | $ | 3,803 | ||||||
Operating income: | ||||||||||||
Water Infrastructure | $ | 271 | $ | 342 | $ | 343 | ||||||
Applied Water | 167 | 170 | 160 | |||||||||
Corporate and other | (75 | ) | (69 | ) | (108 | ) | ||||||
Total operating income | 363 | 443 | 395 | |||||||||
Other non-operating income | (10 | ) | — | 5 | ||||||||
Interest expense | 55 | 55 | 17 | |||||||||
Income before taxes | $ | 298 | $ | 388 | $ | 383 | ||||||
Depreciation and amortization: | ||||||||||||
Water Infrastructure | $ | 115 | $ | 106 | $ | 104 | ||||||
Applied Water | 28 | 29 | 31 | |||||||||
Corporate and other | 7 | 7 | 2 | |||||||||
Total | $ | 150 | $ | 142 | $ | 137 | ||||||
Capital expenditures: | ||||||||||||
Water Infrastructure | $ | 76 | $ | 79 | $ | 91 | ||||||
Applied Water | 34 | 27 | 31 | |||||||||
Corporate and other | 16 | 6 | 4 | |||||||||
Total | $ | 126 | $ | 112 | $ | 126 | ||||||
The following table illustrates revenue by product category, net of intercompany revenue. | ||||||||||||
Year Ended December 31, | ||||||||||||
(in millions) | 2013 | 2012 | 2011 | |||||||||
Pumps, accessories, parts and service | $ | 3,076 | $ | 3,054 | $ | 3,093 | ||||||
Other (a) | 761 | 737 | 710 | |||||||||
Total | $ | 3,837 | $ | 3,791 | $ | 3,803 | ||||||
(a) | Other includes treatment equipment, analytical instrumentation, heat exchangers, valves and controls. | |||||||||||
The following table contains the total assets for each reportable segment as of December 31, 2013 and 2012. | ||||||||||||
Total Assets | ||||||||||||
(in millions) | 2013 | 2012 | 2011 | |||||||||
Water Infrastructure | $ | 2,989 | $ | 2,844 | $ | 2,745 | ||||||
Applied Water | 1,340 | 1,253 | 1,241 | |||||||||
Corporate and other (a) | 567 | 582 | 414 | |||||||||
Total | $ | 4,896 | $ | 4,679 | $ | 4,400 | ||||||
(a) | Corporate and other consists of items pertaining to our corporate headquarters function, which principally consist of deferred tax assets and certain property, plant and equipment. | |||||||||||
Geographical Information | ||||||||||||
Revenue is attributed to countries based upon the location of the customer. Property, Plant & Equipment is attributed to countries based upon the location of the assets. | ||||||||||||
Revenue | ||||||||||||
Year Ended December 31, | ||||||||||||
(in millions) | 2013 | 2012 | 2011 | |||||||||
United States | $ | 1,434 | $ | 1,400 | $ | 1,363 | ||||||
Europe | 1,387 | 1,338 | 1,422 | |||||||||
Asia Pacific | 467 | 469 | 426 | |||||||||
Other | 549 | 584 | 592 | |||||||||
Total | $ | 3,837 | $ | 3,791 | $ | 3,803 | ||||||
Property, Plant & Equipment | ||||||||||||
December 31, | ||||||||||||
(in millions) | 2013 | 2012 | 2011 | |||||||||
United States | $ | 186 | $ | 183 | $ | 178 | ||||||
Europe | 225 | 219 | 209 | |||||||||
Asia Pacific | 45 | 65 | 57 | |||||||||
Other | 32 | 20 | 19 | |||||||||
Total | $ | 488 | $ | 487 | $ | 463 | ||||||
Supplemental_Information
Supplemental Information | 12 Months Ended | |||||||||||
Dec. 31, 2013 | ||||||||||||
Valuation and Qualifying Accounts [Abstract] | ' | |||||||||||
Supplemental Information | ' | |||||||||||
Supplemental Information | ||||||||||||
The table below provides changes in the allowance for doubtful accounts over each period. | ||||||||||||
(in millions) | 2013 | 2012 | 2011 | |||||||||
Balance at beginning of year | $ | 25 | $ | 29 | $ | 25 | ||||||
Additions charged to expense | 8 | 4 | 11 | |||||||||
Deductions/other | (11 | ) | (8 | ) | (7 | ) | ||||||
Balance at end of year | $ | 22 | $ | 25 | $ | 29 | ||||||
The table below provides changes in the inventory valuation over each period. | ||||||||||||
(in millions) | 2013 | 2012 | 2011 | |||||||||
Balance at beginning of year | $ | 38 | $ | 39 | $ | 33 | ||||||
Additions charged to cost of revenue | 14 | 9 | 17 | |||||||||
Deductions/other | (11 | ) | (10 | ) | (11 | ) | ||||||
Balance at end of year | $ | 41 | $ | 38 | $ | 39 | ||||||
Quarterly_Financial_Data_Unaud
Quarterly Financial Data (Unaudited) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | ' | ||||||||||||||||
Quarterly Financial Data (Unaudited) | ' | ||||||||||||||||
Quarterly Financial Data (Unaudited) | |||||||||||||||||
2013 Quarter Ended | |||||||||||||||||
(In millions, except per share amounts) | Dec. 31 | Sept. 30 | June 30 | Mar. 31 | |||||||||||||
Revenue | $ | 1,033 | $ | 965 | $ | 960 | $ | 879 | |||||||||
Gross profit | 410 | 384 | 371 | 334 | |||||||||||||
Operating income | 129 | 98 | 70 | 66 | |||||||||||||
Net income | $ | 68 | $ | 73 | $ | 46 | $ | 41 | |||||||||
Earnings per share: | |||||||||||||||||
Basic | $ | 0.37 | $ | 0.39 | $ | 0.25 | $ | 0.22 | |||||||||
Diluted | $ | 0.37 | $ | 0.39 | $ | 0.25 | $ | 0.22 | |||||||||
2012 Quarter Ended | |||||||||||||||||
(In millions, except per share amounts) | Dec. 31 | Sept. 30 | June 30 | Mar. 31 | |||||||||||||
Revenue | $ | 969 | $ | 931 | $ | 966 | $ | 925 | |||||||||
Gross profit | 382 | 374 | 383 | 363 | |||||||||||||
Operating income | 104 | 111 | 129 | 99 | |||||||||||||
Net income | $ | 73 | $ | 72 | $ | 89 | $ | 63 | |||||||||
Earnings per share: | |||||||||||||||||
Basic | $ | 0.39 | $ | 0.39 | $ | 0.48 | $ | 0.34 | |||||||||
Diluted | $ | 0.39 | $ | 0.38 | $ | 0.48 | $ | 0.34 | |||||||||
Capital_Stock_Notes
Capital Stock (Notes) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Equity [Abstract] | ' | ||||||||
Capital Stock | ' | ||||||||
Capital Stock | |||||||||
The Company has the authority to issue an aggregate of 750 million shares of Common Stock having a par value of $0.01 per share. The stockholders of Xylem common stock are entitled to receive dividends as declared by the Xylem Board of Directors. Dividends declared were $0.4656, $0.4048 and $0.1012 during 2013, 2012 and 2011, respectively. | |||||||||
The changes in common stock outstanding for the three years ended December 31 are as follows: | |||||||||
(in thousands of shares) | 2013 | 2012 | 2011 | ||||||
Beginning Balance, January 1 | 185,658 | 184,641 | — | ||||||
Conversion of net investment | — | — | 184,578 | ||||||
Stock incentive plan activity | 1,203 | 1,367 | 63 | ||||||
Repurchase of common stock | (2,304 | ) | (350 | ) | — | ||||
Ending Balance, December 31 | 184,557 | 185,658 | 184,641 | ||||||
On August 20, 2013, the Board of Directors authorized the repurchase up to $250 million in shares with no expiration date. The program's objective is to deploy our capital in a manner that benefits our shareholders and maintains our focus on growth. During 2013, we repurchased 1.7 million shares for $50 million under this program. There are up to $200 million in shares that may still be purchased under this plan. | |||||||||
On August 18, 2012, the Board of Directors authorized the repurchase of up to 2.0 million shares of common stock with no expiration date. The program's objective is to offset dilution associated with various Xylem employee stock plans by acquiring shares in the open market from time to time. We repurchased 0.6 million and 0.4 million shares for $17 million and $9 million under this program during 2013 and 2012, respectively. There are up to 1.0 million shares that may still be purchased under this plan. | |||||||||
Aside from the aforementioned repurchase programs, we repurchased 0.2 million and 0.1 million shares for $6 million and $4 million during 2013 and 2012, respectively in relation to settlement of employee tax withholding obligations due as a result of the vesting of restricted stock. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 12 Months Ended | |
Dec. 31, 2013 | ||
Accounting Policies [Abstract] | ' | |
Basis of Presentation | ' | |
Basis of Presentation | ||
The consolidated and combined 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 intracompany transactions between our businesses have been eliminated. On and prior to the Distribution Date, our financial position and results of operations consisted of the water equipment and services businesses of ITT Corporation (“WaterCo”) and have been derived from ITT’s historical accounting records and are presented on a carve-out basis through our Distribution Date, while our financial results for Xylem post Spin-off are prepared on a stand-alone basis. As such, our Consolidated Statements of Income, Comprehensive Income and Cash Flows for the periods ended December 31, 2013 and 2012 consist of the consolidated results of Xylem on a stand-alone basis. The Consolidated and Combined Statements of Income, Comprehensive Income and Cash Flows for the twelve months ended December 31, 2011 consist of the consolidated results of Xylem on a stand-alone basis for two months of November and December and the combined results of operations of WaterCo for ten months on a carve-out basis. | ||
For periods prior to the Spin-off, our consolidated and combined financial statements include expense allocations for (i) certain corporate functions historically provided by ITT, including, but not limited to, finance, legal, information technology, human resources, communications, ethics and compliance, and shared services, (ii) employee benefits and incentives, and (iii) share-based compensation. These expenses have been allocated to us on the basis of direct usage when identifiable, with the remainder allocated on the basis of revenue, headcount or other measures. | ||
We consider the basis on which the expenses have been allocated to be a reasonable reflection of the utilization of services provided to or the benefit received by us during the periods presented. The allocations may not, however, reflect the expense we would have incurred as an independent, publicly traded company for the periods presented prior to the Distribution Date. Actual costs that may have been incurred if we had been a stand-alone company would depend on a number of factors, including the chosen organizational structure, what functions were outsourced or performed by employees and strategic decisions made in areas such as information technology and infrastructure. Subsequent to the Spin-off, we have performed these functions using our own resources or purchased services, certain of which have been provided by ITT or Exelis under the Transition Services Agreement ("TSA"). As of December 31, 2013, we have completed substantially all services under the TSA. | ||
Certain prior year amounts have been reclassified to conform to the current year presentation. | ||
Use of Estimates | ' | |
Use of Estimates | ||
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 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, postretirement obligations and assets, revenue recognition, income tax contingency accruals and valuation allowances, goodwill and indefinite lived intangible impairment testing and contingent liabilities. Actual results could differ from these estimates. | ||
Consolidation Principles | ' | |
Consolidation Principles | ||
We consolidate companies in which we have a controlling financial interest or when Xylem is considered the primary beneficiary of a variable interest entity. We account for investments in companies over which we have the ability to exercise significant influence but do not hold a controlling financial interest under the equity method, and we record our proportionate share of income or losses in the Consolidated and Combined Income Statements. Equity method investments are reviewed for impairment when events or circumstances indicate the investment may be other than temporarily impaired. This requires significant judgment, including an assessment of the investee’s financial condition, the possibility of subsequent rounds of financing, and the investee’s historical and projected results of operations. If the actual results of operations for the investee are significantly different from projections, we may incur future charges for the impairment of these investments | ||
Foreign Currency Translation | ' | |
Foreign Currency Translation | ||
The national currencies of our foreign companies are generally the functional currencies. Balance sheet accounts are translated at the exchange rate in effect at the end of each period; income statement accounts are translated at the average rates of exchange prevailing during the period. Gains and losses on foreign currency translations are reflected in the cumulative translation adjustments component of stockholders’ equity. Net gains or losses from foreign currency transactions are reported currently in selling, general and administrative expenses. | ||
Revenue Recognition | ' | |
Revenue Recognition | ||
Revenue is recognized when persuasive evidence of an arrangement exists, the price is fixed or determinable, collectability is reasonably assured and delivery has occurred or services have been rendered. For product sales, other than long-term construction-type contracts, we recognize revenue at the time title and risks and rewards of ownership pass, which is generally when products are shipped. Certain contracts with customers require delivery, installation, testing, certification or other acceptance provisions to be satisfied before revenue is recognized. We recognize revenue on product sales to channel partners, including resellers, distributors or value-added solution providers at the time of sale when the channel partners have economic substance apart from Xylem and Xylem has completed its obligations related to the sale. Revenue from the rental of equipment is recognized over the rental period. Service revenue is recognized as services are performed. | ||
For agreements that contain multiple deliverables, we recognize revenue based on the relative selling price if the deliverable has stand-alone value to the customer and, in arrangements that include a general right of return relative to the delivered element, performance of the undelivered element is considered probable and substantially in the Company’s control. The selling price for a deliverable is based on vendor-specific objective evidence of selling price (“VSOE”), if available, third-party evidence of selling price (“TPE”), if VSOE is not available, or best estimated selling price, if neither VSOE nor TPE is available. | ||
The deliverables in our arrangements with multiple elements include various products and may include related services, such as installation and start-up services. We allocate arrangement consideration based on the relative selling prices of the separate units of accounting determined in accordance with the hierarchy described above. For deliverables that are sold separately, we establish VSOE based on the price when the deliverable is sold separately. We establish TPE, generally for services, based on prices similarly situated customers pay for similar services from third-party vendors. For those deliverables for which we are unable to establish VSOE or TPE, we estimate the selling price considering various factors including market and pricing trends, geography, product customization, and profit objectives. Revenue for multiple element arrangements is recognized when the appropriate revenue recognition criteria for the individual deliverable have been satisfied. | ||
Certain businesses enter into long-term construction-type sales contracts for which revenue is recognized under the percentage-of-completion method based upon percentage of costs incurred to total estimated costs. | ||
Shipping and Handling Costs | ' | |
Shipping and Handling Costs | ||
Shipping and handling costs are recorded as a component of cost of revenue. | ||
Share-based Compensation | ' | |
Share-Based Compensation | ||
Share-based awards issued to employees and members of the Board of Directors include non-qualified stock options, restricted stock awards and performance-based awards. Compensation costs resulting from share-based payment transactions are recognized primarily within selling, general and administrative expenses, at fair value over the requisite service period (typically three years) on a straight-line basis. The calculated compensation cost is adjusted based on an estimate of awards ultimately expected to vest. For performance-based awards, the calculated compensation cost is adjusted based on an estimate of awards ultimately expected to vest and our assessment of the probable outcome of the performance condition.The fair value of a non-qualified stock option is determined on the date of grant using a binomial lattice pricing model incorporating multiple and variable assumptions over time, including assumptions such as employee exercise patterns, stock price volatility and changes in dividends. The fair value of restricted stock awards is determined using the closing price of our common stock on date of grant. The fair value of performance-based share awards at 100% target is determined using the closing price of our common stock on date of grant. | ||
Research and Development | ' | |
Research and Development | ||
We conduct research and development activities, which consist primarily of the development of new products, product applications, and manufacturing processes. These costs are charged to expense as incurred. | ||
Exit and Disposal Costs | ' | |
Exit and Disposal Costs | ||
We periodically initiate management-approved restructuring activities to achieve cost savings through reduced operational redundancies and to position ourselves strategically in the market in response to prevailing economic conditions and associated customer demand. Costs associated with restructuring actions can include severance, infrastructure charges to vacate facilities or consolidate operations, contract termination costs and other related charges. For involuntary separation plans, a liability is recognized when it is probable and reasonably estimable. For voluntary separation plans, a liability is recognized when the employee irrevocably accepts the voluntary termination. For one-time termination benefits, such as additional severance pay or benefit payouts, and other exit costs, such as lease termination costs, the liability is measured and recognized initially at fair value in the period in which the liability is incurred, with subsequent changes to the liability recognized as adjustments in the period of change. | ||
Deferred Financing Costs | ' | |
Deferred Financing Costs | ||
Deferred financing costs represent costs incurred in conjunction with our debt financing activities and are capitalized in other assets and amortized over the life of the related financing arrangements. If the debt is retired early, the related unamortized deferred financing costs are written off in the period the debt is retired and are recorded in the results of operations under the caption “interest expense.” | ||
Income Taxes | ' | |
Income Taxes | ||
Income taxes are calculated using the asset and liability method. Deferred tax assets and liabilities are determined based on the estimated future tax effects of temporary differences between the financial statement carrying amounts and the tax bases of assets and liabilities, as measured by the current enacted tax rates. | ||
We maintain valuation allowances when it is more likely than not that all or a portion of a deferred asset will not be realized. The valuation allowance is intended in part to provide for the uncertainty regarding the ultimate utilization of our U.S. capital loss carryforwards, U.S. foreign tax credit carryovers, and foreign net operating loss carryforwards. In determining whether a valuation allowance is warranted, we consider all positive and negative evidence and all sources of taxable income such as prior earnings history, expected future earnings, carryback and carryforward periods and tax strategies to estimate if sufficient future taxable income will be generated to realize the deferred tax asset. The assessment of the adequacy of our valuation allowance is based on our estimates of taxable income by jurisdiction in which we operate and the period over which our deferred tax assets will be recoverable. In the event that actual results differ from these estimates, or we adjust these estimates in future periods for current trends or expected changes in our estimating assumptions, we may need to modify the level of valuation allowance that could materially impact our business, financial condition and results of operations. | ||
Our effective tax rate reflects the impact of certain undistributed foreign earnings for which we have not provided U.S. taxes because we plan to reinvest such earnings indefinitely outside the United States. We plan foreign earnings remittance amounts based on projected cash flow needs, as well as the working capital and long-term investment requirements of our foreign subsidiaries and our domestic operations. Based on these assumptions, we estimate the amount we will distribute to the United States and provide the U.S. federal taxes due on these amounts. Material changes in our estimates of cash, working capital and long-term investment requirements in the various jurisdictions in which we do business could impact our effective tax rate. | ||
Tax benefits are recognized for an uncertain tax position when, in management’s judgment, it is more likely than not that the position will be sustained upon examination by a taxing authority. For a tax position that meets the more-likely-than-not recognition threshold, the tax benefit is measured as the largest amount that is judged to have a greater than 50% likelihood of being realized upon ultimate settlement with a taxing authority. The liability associated with unrecognized tax benefits is adjusted periodically due to changing circumstances and when new information becomes available. Such adjustments are recognized in the period in which they are identified. The effective tax rate includes the net impact of changes in the liability for unrecognized tax benefits and subsequent adjustments as considered appropriate by management. While it is often difficult to predict the final outcome or the timing of resolution of any particular tax matter, we believe our liability for unrecognized tax benefits is adequate. We classify interest relating to unrecognized tax benefits as a component of other non-operating (expense) income, net and tax penalties as a component of income tax expense in our Consolidated and Combined Income Statements. | ||
Earnings Per Share | ' | |
Earnings Per Share | ||
We present two calculations of earnings per share (“EPS”). “Basic” EPS equals net income divided by weighted average shares outstanding during the period. “Diluted” EPS equals net income divided by the sum of weighted average common shares outstanding during the period plus potentially dilutive shares. Potentially dilutive common shares that are anti-dilutive are excluded from diluted EPS. | ||
Basic and Diluted EPS for all periods prior to the Spin-off reflect the number of distributed shares on the Distribution Date, or 184.6 million shares. For our 2011 year to date calculations, these shares are treated as issued and outstanding from January 1, 2011 for purposes of calculating historical basic EPS. At the time of the Spin-off, ITT stock options and restricted stock awards were converted to awards of Xylem, and therefore there were no dilutive securities outstanding for historical periods. For 2011, the Company determined our weighted average dilutive shares outstanding assuming that the date of our separation from ITT was the beginning of the period. | ||
Cash Equivalents | ' | |
Cash Equivalents | ||
We consider all liquid investments purchased with an original maturity of three months or less to be cash equivalents. | ||
Receivables and Allowance for Doubtful Accounts and Cash Discounts | ' | |
Receivables and Allowance for Doubtful Accounts and Cash Discounts | ||
Trade receivables primarily comprise uncollected amounts owed to us from transactions with customers and are presented net of allowances for doubtful accounts and cash discounts. | ||
We determine our allowance for doubtful accounts using a combination of factors to reduce our trade receivable balances to their estimated net realizable amount. We maintain an allowance for doubtful accounts based on a variety of factors, including the length of time receivables are past due, macroeconomic trends and conditions, significant one-time events, historical experience and the financial condition of customers. We record a specific reserve for individual accounts when we become aware of specific customer circumstances, such as in the case of bankruptcy filings or deterioration in the customer’s operating results or financial position. The past due or delinquency status of a receivable is based on the contractual payment terms of the receivable. If circumstances related to the specific customer change, we adjust estimates of the recoverability of receivables as appropriate. We determine our allowance for cash discounts primarily based on historical experience with customers. | ||
Credit risk with respect to accounts receivable is generally diversified due to the large number of entities comprising our customer base and their dispersion across many different geographical regions. We perform ongoing credit evaluations of the financial condition of our third-party distributors, resellers and other customers and require collateral, such as letters of credit and bank guarantees, in certain circumstances. As of December 31, 2013 and 2012 we do not believe we have any significant concentrations of credit risk. | ||
Inventories | ' | |
Inventories | ||
Inventories, which include the costs of material, labor and overhead, are stated at the lower of cost or market using the first in, first out ("FIFO") method. Estimated losses from obsolete and slow-moving inventories are recorded to reduce inventory values to their estimated net realizable value. Our manufacturing operations recognize costs of sales using standard costs with full overhead absorption, which generally approximates actual cost. | ||
Property, Plant and Equipment | ' | |
Property, Plant and Equipment | ||
These assets are recorded at historical cost and are depreciated using the straight-line method of depreciation over the estimated useful lives as follows: | ||
Estimated Life | ||
Buildings and improvements | 5 to 40 years | |
Machinery and equipment | 2 to 10 years | |
Furniture and fixtures | 3 to 7 years | |
Equipment held for lease or rental | 2 to 10 years | |
Leasehold improvements are depreciated over the shorter of their estimated useful life or the term of the lease. Costs related to maintenance and repairs that do not prolong the assets' useful lives are expensed as incurred. | ||
Long-Lived Asset Impairment | ' | |
Long-Lived Asset Impairment | ||
Long-lived assets, including intangible assets with finite lives, are amortized and tested for impairment whenever events or changes in circumstances indicate their carrying value may not be recoverable. We assess the recoverability of long-lived assets based on the undiscounted future cash flow the assets are expected to generate and recognize an impairment loss when estimated undiscounted future cash flows expected to result from the use of the asset plus net proceeds expected from disposition of the asset, if any, are less than the carrying value of the asset. When an impairment is identified, we reduce the carrying amount of the asset to its estimated fair value based on a discounted cash flow approach or, when available and appropriate, to comparable market values. | ||
Goodwill and indefinite-lived intangible assets are not amortized, but rather are tested for impairment annually (or more frequently if impairment indicators arise, such as changes to the reporting unit structure, significant adverse changes in the business climate or an adverse action or assessment by a regulator). We conduct our annual impairment testing on the first day of our fourth quarter. For goodwill, the impairment test is a two-step test. In the first step, the estimated fair value of each reporting unit is compared to the carrying value of the net assets assigned to that reporting unit. If the estimated fair value of the reporting unit exceeds its carrying value, goodwill is not impaired and the second step of the impairment test is not performed. If the carrying value of the reporting unit exceeds its estimated fair value, then the second step of the impairment test is performed in order to measure the impairment loss to be recorded, if any. If the carrying value of a reporting unit’s goodwill exceeds its implied fair value, then we record an impairment loss equal to the difference. We estimate the fair value of our reporting units and indefinite-lived intangible assets using an income approach. Under the income approach, we estimate fair value based on the present value of estimated future cash flows. | ||
Product Warranties | ' | |
Product Warranties | ||
We accrue for the estimated cost of product warranties at the time revenue is recognized and record it as a component of cost of revenue. Our product warranty liability reflects our best estimate of probable liability under the terms and conditions of our product warranties offered to customers. We estimate the liability based on our standard warranty terms, the historical frequency of claims and the cost to replace or repair our products under warranty. Factors that impact our warranty liability include the number of units sold, the length of warranty term, historical and anticipated rates of warranty claims and cost per claim. We assess the adequacy of our recorded warranty liabilities quarterly and adjust amounts as necessary. | ||
Postretirement Benefit Plans | ' | |
Postretirement Benefit Plans | ||
The determination of defined benefit pension and postretirement plan obligations and their associated costs requires the use of actuarial computations to estimate participant plan benefits to which the employees will be entitled. The significant assumptions primarily relate to discount rates, expected long-term rates of return on plan assets, rate of future compensation increases, mortality, termination, and other factors. We develop each assumption using relevant company experience in conjunction with market-related data for each individual country in which such plans exist. All actuarial assumptions are reviewed annually with third-party consultants and adjusted as necessary. For the recognition of net periodic postretirement cost, the calculation of the expected long-term rate of return on plan assets is generally derived using a market-related value of plan assets based on average asset values at the measurement date over the last five years. Actual results that differ from our assumptions are accumulated and amortized on a straight line basis only to the extent they exceed 10% of the higher of the market-related value or the projected benefit obligation, over the estimated remaining service period of active participants, or for plans with all or substantially all inactive participants, over the average remaining life expectancy. The fair value of plan assets is determined based on market prices or estimated fair value at the measurement date. | ||
We consider changes to a plan’s benefit formula that eliminate the accrual for future service but continue to allow for future salary increases (i.e. “soft freeze”) a curtailment. | ||
Business Combinations | ' | |
Business Combinations | ||
We allocate the purchase price of acquisitions to the tangible and intangible assets acquired, liabilities assumed, and non-controlling interests in the acquiree based on their estimated fair value at the acquisition date. Changes to the acquisition date provisional fair values prior to the expiration of the measurement period, a period not to exceed 12 months from date of acquisition, are recorded as an adjustment to the associated goodwill. Changes to the acquisition date fair values after expiration of the measurement period are recorded in earnings. The excess of the acquisition price over those estimated fair values is recorded as goodwill. Acquisition-related expenses and restructuring costs, if any, are recognized separately from the business combination and are expensed as incurred. | ||
Derivative Financial Instruments | ' | |
Derivative Financial Instruments | ||
We record all derivatives on the balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on whether we have elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, including forecasted transactions, are considered cash flow hedges. Derivatives may also be designated as hedges of the foreign currency exposure of a net investment in a foreign operation. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. We may enter into derivative contracts that are intended to hedge certain risks economically, even though hedge accounting does not apply or we elect not to apply hedge accounting. | ||
The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges of foreign exchange risk is recorded in other comprehensive income ("OCI") and is subsequently reclassified into either revenue or cost of revenue (hedge of sales classified into revenue and hedge of purchases classified into cost of revenue) in the period that the hedged forecasted transaction affects earnings. Any ineffective portion of the change in fair value of the derivative is recognized directly in selling, general and administrative expenses. Our policy is to de-designate cash flow hedges at the time forecasted transactions are recognized as assets or liabilities on a business unit’s balance sheet and report subsequent changes in fair value through selling, general and administrative expenses where the gain or loss due to movements in currency rates on the underlying asset or liability is revalued. If it becomes probable that the originally forecasted transaction will not occur, the gain or loss related to the hedge recorded within accumulated other comprehensive income is immediately recognized into net income. | ||
Commitments and Contingencies | ' | |
Commitments and Contingencies | ||
We record accruals for commitments and loss contingencies for those which are both probable and for which the amount can be reasonably estimated. In addition, legal fees are accrued for cases where a loss is probable and the related fees can be reasonably estimated. Significant judgment is required to determine both probability and the estimated amount of loss. We review these accruals quarterly and adjust the accruals to reflect the impact of negotiations, settlements, rulings, advice of legal counsel, and other current information. | ||
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 estimated liability is reduced to reflect the anticipated participation of other potentially responsible parties in those instances where it is probable that such parties are legally responsible and financially capable of paying their respective shares of the relevant costs. These accruals are reviewed quarterly and are adjusted as assessment and remediation efforts progress or as additional technical or legal information becomes available. Actual costs to be incurred at identified sites in future periods may vary from the estimates, given inherent uncertainties in evaluating environmental exposures. Accruals for environmental liabilities are primarily included in other non-current liabilities at undiscounted amounts and exclude claims for recoveries from insurance companies or other third parties. | ||
Concentrations of Credit Risk | ' | |
Concentrations of Credit Risk | ||
Financial instruments that potentially subject us to significant concentrations of credit risk consist principally of cash and cash equivalents, and accounts receivable from trade customers. We maintain cash and cash equivalents and derivative contracts with various financial institutions. These financial institutions are located in many different geographical regions, and our policy is designed to limit exposure with any one institution. As part of our cash and risk management processes, we perform periodic evaluations of the relative credit standing of the financial institutions. We have not sustained any material credit losses during the previous three years from instruments held at financial institutions. We may utilize forward contracts to protect against the effects of foreign currency fluctuations. Such contracts involve the risk of non-performance by the counterparty. Credit risk with respect to accounts receivable is generally diversified due to the large number of entities comprising our customer base and their dispersion across many different industries and geographic regions. We perform ongoing credit evaluations of the financial condition of our third-party distributors, resellers and other customers and require collateral, such as letters of credit and bank guarantees, in certain circumstances. | ||
Substantially all of the cash and cash equivalents, including foreign cash balances, at December 31, 2013 and 2012 were uninsured. Foreign cash balances at December 31, 2013 and 2012 were $423 million and $401 million, respectively. | ||
Fair Value Measurements | ' | |
Fair Value Measurements | ||
We determine fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. We use a hierarchical structure to prioritize the inputs to valuation techniques used to measure fair value into three broad levels. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1), then to quoted market prices for similar assets or liabilities in active markets (Level 2) and gives the lowest priority to unobservable inputs (Level 3). |
Recently_Issued_Accounting_Pro1
Recently Issued Accounting Pronouncements Recently Issued Accounting Pronouncements (Policies) | 12 Months Ended |
Dec. 31, 2013 | |
Accounting Policies [Abstract] | ' |
New Accounting Pronouncements, Policy | ' |
Pronouncements Not Yet Adopted | |
In January 2014, the Financial Accounting Standards Board (“FASB”) issued guidance related to service concession arrangements. A service concession arrangement is an arrangement between a public-sector entity grantor and an operating entity under which the operating entity operates the grantor's infrastructure (for example, airports, roads and bridges). The guidance states that service concession arrangements should not be accounted for under the guidance of Topic 840, Leases, but rather other guidance as deemed appropriate. This guidance is effective for fiscal years beginning December 15, 2014. We are currently evaluating the impact of the guidance on our financial condition and results of operations. | |
In July 2013, the FASB issued guidance on the financial statement presentation of an unrecognized tax benefit. The guidance requires that an unrecognized tax benefit or a portion of an unrecognized tax benefit, be presented as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward. If an applicable deferred tax asset is not available or a company does not expect to use the applicable deferred tax asset, the unrecognized tax benefit should be presented in an entity's financial statements as a liability and should not be combined with a deferred tax asset. This guidance is effective for fiscal years beginning after December 15, 2013. The adoption of this guidance is not expected to have a material impact on our financial condition or results of operations. | |
In March 2013, the FASB issued guidance on the release of a cumulative translation adjustment ("CTA") related to an entity's investment in a foreign entity into income. The guidance requires such CTA to be released when there has been a: (1) sale of a subsidiary or group of net assets within a foreign entity and the sale represents the substantially complete liquidation of the investment in the foreign entity, (2) loss of a controlling financial interest in an investment in a foreign entity or (3) step acquisition for a foreign entity. This guidance is effective for fiscal years beginning after December 15, 2013. The impact of the guidance on our financial condition and results of operations will depend on the occurrence and the significance of transactions that meet the criteria described above. | |
In February 2013, the FASB issued guidance related to the measurement and disclosure of obligations resulting from joint and several liability arrangements. The new guidance requires companies to measure obligations resulting from joint and several liability arrangements as the sum of (1) the amount the company agreed to pay on the basis of its arrangement among co-obligors and (2) any additional amount the company expects to pay on behalf of its co-obligors. Additionally, the new guidance requires the disclosure of a description of the joint and several arrangement and the total outstanding amount of the obligation for all joint parties. This guidance is effective for fiscal years beginning after December 15, 2013. The adoption of this guidance is not expected to have a material impact on our financial condition or results of operations. | |
Recently Adopted Pronouncements | |
In February 2013, the FASB issued guidance regarding new disclosures for items reclassified out of accumulated other comprehensive income ("AOCI"). The guidance requires entities to present information about items reclassified out of AOCI by component. Additionally, entities are required to present either on the face of the statement where net income is presented or as a separate disclosure in the notes to the financial statements, significant amounts reclassified out of AOCI by the respective line items of net income. This guidance is effective for fiscal years beginning after December 15, 2012. The adoption of this guidance did not have a material impact on our financial statement presentation and disclosures. | |
In July 2012, the FASB provided companies with the option to make an initial qualitative evaluation, based on events and circumstances, to determine the likelihood of an impairment of an indefinite-lived intangible asset. The results of this qualitative assessment determine whether it is necessary to perform the currently required quantitative comparison of the indefinite-lived intangible asset's fair value to its carrying amount. If it is more likely than not that the fair value of the intangible asset is less than its carrying amount, a company would be required to perform the quantitative assessment. This guidance is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012 with early adoption permitted. The adoption of the guidance did not have a material impact on our financial condition and results of operations. | |
In September 2011, in conjunction with the assessment of the impairment of goodwill, the FASB provided companies with the option to make an initial qualitative evaluation, based on the entity’s events and circumstances, to determine the likelihood of goodwill impairment. The results of this qualitative assessment determine whether it is necessary to perform the currently required two-step impairment test. If it is more likely than not that the fair value of a reporting unit is less than its carrying amount, a company would be required to perform the two-step impairment test. We adopted this new guidance effective January 1, 2012. The adoption of this guidance did not have a material impact on our financial condition and results of operations. | |
In June 2011, the FASB issued authoritative guidance surrounding the presentation of comprehensive income, with an objective of increasing the prominence of items reported in other comprehensive income (“OCI”). The guidance requires most entities to present items of net income and other comprehensive income either in one continuous statement, referred to as the statement of comprehensive income, or in two separate, but consecutive, statements of net income and other comprehensive income. We have adopted this guidance with retrospective application and have presented total comprehensive income in our Consolidated and Combined Statements of Comprehensive Income for all reported periods. | |
In May 2011, the FASB issued guidance intended to achieve common fair value measurements and related disclosures between U.S. GAAP and international accounting standards. The amendments primarily clarify existing fair value guidance and are not intended to change the application of existing fair value measurement guidance. However, the amendments include certain instances where a particular principle or requirement for measuring fair value or disclosing information about fair value measurements has changed. On January 1, 2012, we adopted this guidance. The adoption of the guidance did not have a material impact on our financial condition and results of operations. |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Accounting Policies [Abstract] | ' | |||||||
Property, Plant and Equipment | ' | |||||||
Estimated Life | ||||||||
Buildings and improvements | 5 to 40 years | |||||||
Machinery and equipment | 2 to 10 years | |||||||
Furniture and fixtures | 3 to 7 years | |||||||
Equipment held for lease or rental | 2 to 10 years | |||||||
December 31, | ||||||||
(in millions) | 2013 | 2012 | ||||||
Land, buildings and improvements | $ | 263 | $ | 255 | ||||
Machinery and equipment | 685 | 653 | ||||||
Equipment held for lease or rental | 192 | 183 | ||||||
Furniture and fixtures | 93 | 90 | ||||||
Construction work in progress | 49 | 40 | ||||||
Other | 22 | 19 | ||||||
Total property, plant and equipment, gross | 1,304 | 1,240 | ||||||
Less accumulated depreciation | 816 | 753 | ||||||
Total property, plant and equipment, net | $ | 488 | $ | 487 | ||||
Acquisitions_Acquisitions_Tabl
Acquisitions Acquisitions (Tables) (YSI Corporation) | 12 Months Ended | ||||||
Dec. 31, 2013 | |||||||
YSI Corporation | ' | ||||||
Business Acquisition [Line Items] | ' | ||||||
Allocation of Purchase Price | ' | ||||||
The following table presents the allocation of the purchase price to the assets acquired and liabilities assumed, based on their fair values (in millions): | |||||||
Purchase Price | $ | 309 | |||||
Assets acquired and liabilities assumed: | |||||||
Accounts receivable | 15 | ||||||
Inventory | 15 | ||||||
Property, plant and equipment | 9 | ||||||
Goodwill | 190 | ||||||
Intangible assets | 125 | ||||||
Other current and non-current assets | 17 | ||||||
Other current and non-current liabilities | (62 | ) | |||||
Net assets acquired | $ | 309 | |||||
Restructuring_and_Asset_Impair1
Restructuring and Asset Impairment Charges (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Restructuring and Related Activities [Abstract] | ' | ||||||||||||
Components of restructuring and asset impairment charges | ' | ||||||||||||
The components of restructuring and asset impairment charges incurred during each of the previous three years ended are presented below. | |||||||||||||
Year Ended December 31, | |||||||||||||
(in millions) | 2013 | 2012 | 2011 | ||||||||||
By component: | |||||||||||||
Severance and other charges | $ | 38 | $ | 17 | $ | — | |||||||
Lease related charges | 2 | — | — | ||||||||||
Total restructuring charges | 40 | 17 | — | ||||||||||
Asset impairment | 2 | — | 2 | ||||||||||
Total restructuring and asset impairment charges | $ | 42 | $ | 17 | $ | 2 | |||||||
By segment: | |||||||||||||
Water Infrastructure | $ | 33 | $ | 14 | $ | — | |||||||
Applied Water | 9 | 3 | 2 | ||||||||||
Restructuring accruals | ' | ||||||||||||
The following table displays a rollforward of the restructuring accruals, presented on our Consolidated Balance Sheet within accrued liabilities, for the years ended December 31, 2013 and 2012. | |||||||||||||
(in millions) | 2013 | 2012 | |||||||||||
Restructuring accruals - January 1 | $ | 9 | $ | 1 | |||||||||
Restructuring charges | 40 | 17 | |||||||||||
Cash payments | (35 | ) | (9 | ) | |||||||||
Other | (1 | ) | — | ||||||||||
Restructuring accruals - December 31 | $ | 13 | $ | 9 | |||||||||
By segment: | |||||||||||||
Water Infrastructure | $ | 10 | $ | 6 | |||||||||
Applied Water | 3 | 3 | |||||||||||
Planned employee reductions associatied with restructuring | ' | ||||||||||||
The following is a rollforward of employee position eliminations associated with restructuring activities for the years ended December 31, 2013 and 2012. | |||||||||||||
2013 | 2012 | ||||||||||||
Planned reductions - January 1 | 54 | — | |||||||||||
Additional planned reductions | 513 | 189 | |||||||||||
Actual reductions | (516 | ) | (135 | ) | |||||||||
Planned reductions - December 31 | 51 | 54 | |||||||||||
Separation_Costs_Tables
Separation Costs (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Separation Costs [Abstract] | ' | |||||||
Non-recurring separation costs incurred | ' | |||||||
The components of separation costs incurred during these periods are presented below. | ||||||||
Year Ended December 31, | ||||||||
(in millions) | 2013 | 2012 | ||||||
Rebranding and marketing costs | $ | — | $ | 8 | ||||
Advisory and professional fees | — | 7 | ||||||
Information and technology costs | 2 | 3 | ||||||
Employee retention and hiring costs | — | 1 | ||||||
Lease termination and other real estate costs | 2 | 1 | ||||||
Other | — | 2 | ||||||
Total separation costs in operating income | 4 | 22 | ||||||
Income tax benefit | (2 | ) | (6 | ) | ||||
Total separation costs, net of tax | $ | 2 | $ | 16 | ||||
Other_NonOperating_Income_Net_
Other Non-Operating Income, Net Other Non-Operating Income, Net (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2013 | ||||||||||||
Other Income and Expenses [Abstract] | ' | |||||||||||
Components of Other Non-Operating Income, Net | ' | |||||||||||
The components of other non-operating (expense) income, net are as follows: | ||||||||||||
Year Ended December 31, | ||||||||||||
(in millions) | 2013 | 2012 | 2011 | |||||||||
Interest income | $ | 3 | $ | 4 | $ | 3 | ||||||
Income from joint ventures | 2 | 4 | 4 | |||||||||
Other expense – net (a) | (15 | ) | (8 | ) | (2 | ) | ||||||
Total other non-operating (expense) income, net | $ | (10 | ) | $ | — | $ | 5 | |||||
(a) | 2013 includes $10 million of expense incurred under the tax matters agreement with ITT. Refer to Note 7 "Income Taxes" for additional information regarding the tax matters agreement. |
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2013 | ||||||||||||
Income Tax Disclosure [Abstract] | ' | |||||||||||
Source of pre-tax income and components of income tax expense | ' | |||||||||||
The source of pre-tax income and the components of income tax expense are as follows: | ||||||||||||
Year Ended December 31, | ||||||||||||
(in millions) | 2013 | 2012 | 2011 | |||||||||
Income components: | ||||||||||||
Domestic | $ | 49 | $ | 106 | $ | 46 | ||||||
Foreign | 249 | 282 | 337 | |||||||||
Total pre-tax income | $ | 298 | $ | 388 | $ | 383 | ||||||
Income tax expense components: | ||||||||||||
Current: | ||||||||||||
Domestic – federal | $ | 37 | $ | 27 | $ | 20 | ||||||
Domestic – state and local | 1 | 7 | 5 | |||||||||
Foreign | 46 | 56 | 71 | |||||||||
Total Current | 84 | 90 | 96 | |||||||||
Deferred: | ||||||||||||
Domestic – federal | $ | (6 | ) | $ | 10 | $ | 21 | |||||
Domestic – state and local | — | (2 | ) | 3 | ||||||||
Foreign | (8 | ) | (7 | ) | (16 | ) | ||||||
Total Deferred | (14 | ) | 1 | 8 | ||||||||
Total income tax provision | $ | 70 | $ | 91 | $ | 104 | ||||||
Effective income tax rate | 23.5 | % | 23.4 | % | 27.4 | % | ||||||
Schedule of effective income tax rate reconciliation | ' | |||||||||||
Reconciliations between taxes at the U.S. federal income tax rate and taxes at our effective income tax rate on earnings before income taxes are as follows: | ||||||||||||
Year Ended December 31, | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
Tax provision at U.S. statutory rate | 35 | % | 35 | % | 35 | % | ||||||
Increase (decrease) in tax rate resulting from: | ||||||||||||
Foreign restructurings | — | — | 1.5 | |||||||||
State income taxes | 0.7 | 1.2 | 1.3 | |||||||||
Settlements of tax examinations | — | 0.2 | (4.7 | ) | ||||||||
Valuation allowance | 39.4 | 8.9 | 4.7 | |||||||||
Tax exempt interest | (43.0 | ) | (18.2 | ) | (14.6 | ) | ||||||
Foreign tax rate differential | (4.1 | ) | (3.4 | ) | (4.6 | ) | ||||||
Repatriation of foreign earnings, net of foreign tax credits | 5.1 | 0.4 | 3.7 | |||||||||
Non-deductible separation costs | — | — | 2.6 | |||||||||
Tax incentives | (8.1 | ) | — | — | ||||||||
Other – net | (1.5 | ) | (0.7 | ) | 2.5 | |||||||
Effective income tax rate | 23.5 | % | 23.4 | % | 27.4 | % | ||||||
Components of net deferred tax assets and liabilities | ' | |||||||||||
The following is a summary of the components of the net deferred tax assets and liabilities recognized in the Consolidated Balance Sheets: | ||||||||||||
December 31, | ||||||||||||
(in millions) | 2013 | 2012 | ||||||||||
Deferred tax assets: | ||||||||||||
Employee benefits | $ | 114 | $ | 130 | ||||||||
Accrued expenses | 20 | 17 | ||||||||||
Loss carryforward | 357 | 237 | ||||||||||
Inventory | 6 | 7 | ||||||||||
Foreign tax credit carryforwards | 17 | 18 | ||||||||||
Other | 1 | 3 | ||||||||||
$ | 515 | $ | 412 | |||||||||
Valuation allowance | (349 | ) | (229 | ) | ||||||||
Net deferred tax asset | $ | 166 | $ | 183 | ||||||||
Deferred tax liabilities: | ||||||||||||
Intangibles | $ | 180 | $ | 174 | ||||||||
Investment in foreign subsidiaries | 15 | 15 | ||||||||||
Property, plant, and equipment | 19 | 15 | ||||||||||
Other | 42 | 34 | ||||||||||
Total deferred tax liabilities | $ | 256 | $ | 238 | ||||||||
Deferred taxes classification | ' | |||||||||||
Deferred taxes are classified in the Consolidated Balance Sheets as follows: | ||||||||||||
December 31, | ||||||||||||
(in millions) | 2013 | 2012 | ||||||||||
Current assets | $ | 41 | $ | 41 | ||||||||
Non-current assets | 64 | 77 | ||||||||||
Current liabilities | (4 | ) | — | |||||||||
Non-current liabilities | (191 | ) | (173 | ) | ||||||||
Total net deferred tax liabilities | $ | (90 | ) | $ | (55 | ) | ||||||
Tax attributes available to reduce future taxable income | ' | |||||||||||
Tax attributes available to reduce future taxable income begin to expire as follows: | ||||||||||||
(in millions) | 31-Dec-13 | First Year of Expiration | ||||||||||
U.S. net operating loss | $ | 10 | 31-Dec-23 | |||||||||
State net operating loss | 48 | December 31, 2014 | ||||||||||
U.S. tax credits | 31 | December 31, 2020 | ||||||||||
Foreign net operating loss | 1,214 | December 31, 2014 | ||||||||||
Reconciliation of the beginning and ending amount of unrecognized tax benefits | ' | |||||||||||
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: | ||||||||||||
(in millions) | 2013 | 2012 | 2011 | |||||||||
Unrecognized tax benefits — January 1 | $ | 8 | $ | 5 | $ | 43 | ||||||
Additions for: | ||||||||||||
Current year tax positions | 23 | 1 | — | |||||||||
Prior year tax positions | — | 2 | — | |||||||||
Reductions for: | ||||||||||||
Assumption by ITT | — | — | (24 | ) | ||||||||
Settlements | (1 | ) | — | (14 | ) | |||||||
Unrecognized tax benefits — December 31 | $ | 30 | $ | 8 | $ | 5 | ||||||
Earliest open tax years by major jurisdiction | ' | |||||||||||
The following table summarizes the earliest open tax years by major jurisdiction: | ||||||||||||
Jurisdiction | Earliest | |||||||||||
Open Year | ||||||||||||
Canada | 2008 | |||||||||||
Germany | 2005 | |||||||||||
Italy | 2008 | |||||||||||
Luxembourg | 2010 | |||||||||||
Poland | 2006 | |||||||||||
Sweden | 2008 | |||||||||||
Switzerland | 2013 | |||||||||||
United Kingdom | 2006 | |||||||||||
United States | 2009 |
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2013 | ||||||||||||
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. | ||||||||||||
Year Ended December 31, | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
Net Income (in millions) | $ | 228 | $ | 297 | $ | 279 | ||||||
Shares (in thousands): | ||||||||||||
Weighted average common shares outstanding | 185,082 | 185,459 | 184,574 | |||||||||
Add: Participating securities (a) | 134 | 325 | 485 | |||||||||
Weighted average common shares outstanding — Basic | 185,216 | 185,784 | 185,059 | |||||||||
Plus incremental shares from assumed conversions: (b) | ||||||||||||
Dilutive effect of stock options | 264 | 213 | 202 | |||||||||
Dilutive effect of restricted stock | 558 | 233 | 63 | |||||||||
Weighted average common shares outstanding — Diluted | 186,038 | 186,230 | 185,324 | |||||||||
Basic earnings per share | $ | 1.23 | $ | 1.6 | $ | 1.51 | ||||||
Diluted earnings per share | $ | 1.22 | $ | 1.59 | $ | 1.5 | ||||||
(a) | Restricted stock awards containing rights to non-forfeitable dividends which participate in undistributed earnings with common shareholders are considered participating securities for purposes of computing earnings per share. | |||||||||||
(b) | Incremental shares from stock options, restricted stock 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 and performance share awards, reduced by the repurchase of shares with the proceeds from the assumed exercises, unrecognized compensation expense for outstanding awards and the estimated tax benefit of the assumed exercises. Performance share units will be included in the treasury stock calculation of diluted earnings per share upon achievement of underlying performance conditions. See Note 16, "Stock-Based Compensation Plans" for further detail on the performance share units. | |||||||||||
Incremental shares from stock options and restricted stock | ' | |||||||||||
Year Ended December 31, | ||||||||||||
(in thousands) | 2013 | 2012 | 2011 | |||||||||
Stock options | 4,126 | 4,285 | 4,445 | |||||||||
Restricted shares | 703 | 870 | 788 | |||||||||
Performance shares | 80 | — | — | |||||||||
Inventories_Tables
Inventories (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Inventory Disclosure [Abstract] | ' | |||||||
Inventories | ' | |||||||
December 31, | ||||||||
(in millions) | 2013 | 2012 | ||||||
Finished goods | $ | 189 | $ | 182 | ||||
Work in process | 31 | 30 | ||||||
Raw materials | 255 | 231 | ||||||
Total inventories, net | $ | 475 | $ | 443 | ||||
Property_Plant_and_Equipment_T
Property, Plant and Equipment (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Property, Plant and Equipment [Abstract] | ' | |||||||
Property, Plant and Equipment | ' | |||||||
Estimated Life | ||||||||
Buildings and improvements | 5 to 40 years | |||||||
Machinery and equipment | 2 to 10 years | |||||||
Furniture and fixtures | 3 to 7 years | |||||||
Equipment held for lease or rental | 2 to 10 years | |||||||
December 31, | ||||||||
(in millions) | 2013 | 2012 | ||||||
Land, buildings and improvements | $ | 263 | $ | 255 | ||||
Machinery and equipment | 685 | 653 | ||||||
Equipment held for lease or rental | 192 | 183 | ||||||
Furniture and fixtures | 93 | 90 | ||||||
Construction work in progress | 49 | 40 | ||||||
Other | 22 | 19 | ||||||
Total property, plant and equipment, gross | 1,304 | 1,240 | ||||||
Less accumulated depreciation | 816 | 753 | ||||||
Total property, plant and equipment, net | $ | 488 | $ | 487 | ||||
Goodwill_and_Other_Intangible_1
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended | |||||||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | |||||||||||||||||||||||
Changes in the carrying value of goodwill by operating segment | ' | |||||||||||||||||||||||
Changes in the carrying value of goodwill by operating segment during the years ended December 31, 2013 and 2012 are as follows: | ||||||||||||||||||||||||
(in millions) | Water | Applied Water | Total | |||||||||||||||||||||
Infrastructure | ||||||||||||||||||||||||
Balance as of December 31, 2011 | $ | 1,054 | $ | 556 | $ | 1,610 | ||||||||||||||||||
Activity in 2012 | ||||||||||||||||||||||||
Acquisitions | 19 | — | 19 | |||||||||||||||||||||
Foreign currency and other | 12 | 6 | 18 | |||||||||||||||||||||
Balance as of December 31, 2012 | $ | 1,085 | $ | 562 | $ | 1,647 | ||||||||||||||||||
Activity in 2013 | ||||||||||||||||||||||||
Acquisitions | 48 | — | 48 | |||||||||||||||||||||
Foreign currency and other | 16 | 7 | 23 | |||||||||||||||||||||
Balance as of December 31, 2013 | $ | 1,149 | $ | 569 | $ | 1,718 | ||||||||||||||||||
Other Intangible Assets | ' | |||||||||||||||||||||||
Information regarding our other intangible assets is as follows: | ||||||||||||||||||||||||
(in millions) | 31-Dec-13 | 31-Dec-12 | ||||||||||||||||||||||
Carrying | Accumulated | Net | Carrying | Accumulated | Net | |||||||||||||||||||
Amount | Amortization | Intangibles | Amount | Amortization | Intangibles | |||||||||||||||||||
Customer and distributor relationships | $ | 352 | $ | (104 | ) | $ | 248 | $ | 317 | $ | (75 | ) | $ | 242 | ||||||||||
Proprietary technology | 109 | (36 | ) | 73 | 105 | (29 | ) | 76 | ||||||||||||||||
Trademarks | 35 | (16 | ) | 19 | 33 | (14 | ) | 19 | ||||||||||||||||
Patents and other | 20 | (17 | ) | 3 | 21 | (17 | ) | 4 | ||||||||||||||||
Indefinite-lived intangibles | 145 | — | 145 | 143 | — | 143 | ||||||||||||||||||
Other intangibles | $ | 661 | $ | (173 | ) | $ | 488 | $ | 619 | $ | (135 | ) | $ | 484 | ||||||||||
Estimated Amortization Expense | ' | |||||||||||||||||||||||
Estimated amortization expense for each of the five succeeding years is as follows: | ||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||
2014 | $ | 36 | ||||||||||||||||||||||
2015 | 35 | |||||||||||||||||||||||
2016 | 35 | |||||||||||||||||||||||
2017 | 34 | |||||||||||||||||||||||
2018 | 34 | |||||||||||||||||||||||
Derivative_Financial_Instrumen1
Derivative Financial Instruments (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ' | |||||||||||||
Schedule of Derivative Instruments [Table Text Block] | ' | |||||||||||||
Listed in the table below are the outstanding foreign currency derivatives that were used to hedge foreign exchange risks as of December 31, 2013. | ||||||||||||||
(in millions; except number of instruments) | ||||||||||||||
Foreign Currency Derivative | Number of | Notional | Sell Notional Currency | Notional | Buy Notional | |||||||||
Instruments | Sold | Purchased | Currency | |||||||||||
Buy PLN/ Sell EUR forward | 22 | 24 | Euro (EUR) | 103 | Polish Zloty | |||||||||
(PLN) | ||||||||||||||
Buy HUF/ Sell EUR forward | 11 | 11 | Euro (EUR) | 3,186 | Hungarian | |||||||||
Forint (HUF) | ||||||||||||||
Buy SEK/ Sell EUR forward | 11 | 137 | Euro (EUR) | 1,233 | Swedish Krona (SEK) | |||||||||
Sell GBP/ Buy EUR forward | 11 | 22 | British Pound Sterling (GBP) | 27 | Euro (EUR) | |||||||||
Derivative Instruments and Hedging Activities Disclosure [Text Block] | ' | |||||||||||||
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 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 and payments. 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. | ||||||||||||||
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. | ||||||||||||||
Beginning in 2012, certain business units within our segments with exposure to foreign currency exchange risks have designated certain currency forward agreements as cash flow hedges of forecasted intercompany inventory purchases and sales. Listed in the table below are the outstanding foreign currency derivatives that were used to hedge foreign exchange risks as of December 31, 2013. | ||||||||||||||
(in millions; except number of instruments) | ||||||||||||||
Foreign Currency Derivative | Number of | Notional | Sell Notional Currency | Notional | Buy Notional | |||||||||
Instruments | Sold | Purchased | Currency | |||||||||||
Buy PLN/ Sell EUR forward | 22 | 24 | Euro (EUR) | 103 | Polish Zloty | |||||||||
(PLN) | ||||||||||||||
Buy HUF/ Sell EUR forward | 11 | 11 | Euro (EUR) | 3,186 | Hungarian | |||||||||
Forint (HUF) | ||||||||||||||
Buy SEK/ Sell EUR forward | 11 | 137 | Euro (EUR) | 1,233 | Swedish Krona (SEK) | |||||||||
Sell GBP/ Buy EUR forward | 11 | 22 | British Pound Sterling (GBP) | 27 | Euro (EUR) | |||||||||
The table below presents the effect of our derivative financial instruments on the Consolidated and Combined Income Statements and Statements of Comprehensive Income. | ||||||||||||||
Year Ended December 31, | ||||||||||||||
(in millions) | 2013 | 2012 | 2011 | |||||||||||
Derivatives in Cash Flow Hedges | ||||||||||||||
Foreign Exchange Contracts | ||||||||||||||
Amount of gain recognized in OCI (a) | $ | 1 | $ | 4 | $ | — | ||||||||
Amount of (gain) reclassified from OCI into revenue (a) | (2 | ) | (2 | ) | — | |||||||||
Amount of loss (gain) reclassified from OCI into cost of revenue (a) | 2 | (1 | ) | — | ||||||||||
(a) | Effective portion | |||||||||||||
As of December 31, 2013, $2 million of the net unrealized gains on cash flow hedges is expected to be reclassified into earnings in the next 12 months. Any ineffective portion of the change in fair value of a cash flow hedge is recognized immediately in selling, general and administrative expenses in the Consolidated and Combined Income Statements and, for the twelve months ended December 31, 2013 and 2012 was not material. | ||||||||||||||
The fair values of our foreign exchange contracts currently included in our hedging program were as follows: | ||||||||||||||
December 31, | ||||||||||||||
(in millions) | 2013 | 2012 | ||||||||||||
Derivatives designated as hedging instruments | ||||||||||||||
Assets | ||||||||||||||
Other current assets | $ | 1 | $ | — | ||||||||||
Schedule of Foreign Exchange Contracts, Statement of Financial Position [Table Text Block] | ' | |||||||||||||
The fair values of our foreign exchange contracts currently included in our hedging program were as follows: | ||||||||||||||
December 31, | ||||||||||||||
(in millions) | 2013 | 2012 | ||||||||||||
Derivatives designated as hedging instruments | ||||||||||||||
Assets | ||||||||||||||
Other current assets | $ | 1 | $ | — | ||||||||||
Effect of derivative financial instruments | ' | |||||||||||||
The table below presents the effect of our derivative financial instruments on the Consolidated and Combined Income Statements and Statements of Comprehensive Income. | ||||||||||||||
Year Ended December 31, | ||||||||||||||
(in millions) | 2013 | 2012 | 2011 | |||||||||||
Derivatives in Cash Flow Hedges | ||||||||||||||
Foreign Exchange Contracts | ||||||||||||||
Amount of gain recognized in OCI (a) | $ | 1 | $ | 4 | $ | — | ||||||||
Amount of (gain) reclassified from OCI into revenue (a) | (2 | ) | (2 | ) | — | |||||||||
Amount of loss (gain) reclassified from OCI into cost of revenue (a) | 2 | (1 | ) | — | ||||||||||
(a) | Effective portion |
Accrued_and_Other_Current_Liab1
Accrued and Other Current Liabilities (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Payables and Accruals [Abstract] | ' | |||||||
Accrued and Other Current Liabilities | ' | |||||||
December 31, | ||||||||
(in millions) | 2013 | 2012 | ||||||
Compensation and other employee-benefits | $ | 215 | $ | 201 | ||||
Customer-related liabilities | 63 | 60 | ||||||
Accrued warranty costs | 36 | 40 | ||||||
Accrued income taxes | 45 | 50 | ||||||
Other accrued liabilities | 120 | 92 | ||||||
Total accrued and other current liabilities | $ | 479 | $ | 443 | ||||
Credit_Facilities_and_LongTerm1
Credit Facilities and Long-Term Debt (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Debt Disclosure [Abstract] | ' | |||||||
Schedule of Credit Facilities and Long-Term Debt | ' | |||||||
Total debt outstanding is summarized as follows: | ||||||||
December 31, | ||||||||
(in millions) | 2013 | 2012 | ||||||
Short-term borrowings and current maturities of long-term debt | $ | 42 | $ | 6 | ||||
Long-term debt: | ||||||||
3.550% Senior Notes due 2016 (a) | 600 | 600 | ||||||
4.875% Senior Notes due 2021 (a) | 600 | 600 | ||||||
Unamortized discount (b) | (1 | ) | (1 | ) | ||||
Long-term debt | 1,199 | 1,199 | ||||||
Total debt (c) | $ | 1,241 | $ | 1,205 | ||||
(a) | The fair value of our Senior Notes (as defined below) 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 2016 (as defined below) was $635 million and $639 million as of December 31, 2013 and 2012, respectively. The fair value of our Senior Notes due 2021 (as defined below) was $629 million and $680 million as of December 31, 2013 and 2012, respectively. | |||||||
(b) | The unamortized discount is recognized as a reduction in the carrying value of the Senior Notes in the Consolidated Balance Sheets and is being amortized to interest expense in our Consolidated and Combined Income Statements over the expected remaining terms of the Senior Notes. |
Postretirement_Benefit_Plans_T
Postretirement Benefit Plans (Tables) | 12 Months Ended | |||||||||||||||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||||||||||||||
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block | ' | |||||||||||||||||||||||||||||||
Schedule of Net Benefit Costs | ' | |||||||||||||||||||||||||||||||
The components of net periodic benefit cost for other postretirement employee benefit plans are as follows: | ||||||||||||||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||||||||||||||
(in millions) | 2013 | 2012 | 2011 | |||||||||||||||||||||||||||||
Service cost | $ | 1 | $ | 1 | $ | 1 | ||||||||||||||||||||||||||
Interest cost | 3 | 3 | 1 | |||||||||||||||||||||||||||||
Amortization of net actuarial loss | 2 | 1 | — | |||||||||||||||||||||||||||||
Net periodic benefit cost | $ | 6 | $ | 5 | $ | 2 | ||||||||||||||||||||||||||
Schedule of Changes in Accumulated Postemployment Benefit Obligations | ' | |||||||||||||||||||||||||||||||
Other changes in plan assets and benefit obligations recognized in other comprehensive income, as they pertain to other postretirement employee benefit plans are as follows: | ||||||||||||||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||||||||||||||
(in millions) | 2013 | 2012 | 2011 | |||||||||||||||||||||||||||||
Net (gain) loss | $ | (2 | ) | $ | 14 | $ | 3 | |||||||||||||||||||||||||
Amortization of net actuarial loss | (2 | ) | (1 | ) | — | |||||||||||||||||||||||||||
Change recognized in other comprehensive (income) loss (a) | $ | (4 | ) | $ | 13 | $ | 3 | |||||||||||||||||||||||||
Total recognized in comprehensive loss | $ | 2 | $ | 18 | $ | 5 | ||||||||||||||||||||||||||
Defined benefit contributions by employer | ' | |||||||||||||||||||||||||||||||
Matching obligations, the majority of which were funded in cash in connection with the plans, along with transition credits and other company contributions are as follows: | ||||||||||||||||||||||||||||||||
(in millions) | Defined Contribution | |||||||||||||||||||||||||||||||
2013 | $ | 35 | ||||||||||||||||||||||||||||||
2012 | 30 | |||||||||||||||||||||||||||||||
2011 | 28 | |||||||||||||||||||||||||||||||
Summary of amounts recorded within accumulated other comprehensive income | ' | |||||||||||||||||||||||||||||||
The following table provides a summary of the funded status of our postretirement plans, the presentation of such balances and a summary of amounts recorded within accumulated other comprehensive income. | ||||||||||||||||||||||||||||||||
(in millions) | 31-Dec-13 | 31-Dec-12 | ||||||||||||||||||||||||||||||
Pension | Other | Total | Pension | Other | Total | |||||||||||||||||||||||||||
Fair value of plan assets | $ | 524 | $ | — | $ | 524 | $ | 477 | $ | — | $ | 477 | ||||||||||||||||||||
Projected benefit obligation | (777 | ) | (63 | ) | (840 | ) | (790 | ) | (65 | ) | (855 | ) | ||||||||||||||||||||
Funded status | $ | (253 | ) | $ | (63 | ) | $ | (316 | ) | $ | (313 | ) | $ | (65 | ) | $ | (378 | ) | ||||||||||||||
Amounts recognized in the balance sheet | ||||||||||||||||||||||||||||||||
Other non-current assets | $ | 46 | $ | — | $ | 46 | $ | 36 | $ | — | $ | 36 | ||||||||||||||||||||
Accrued and other current liabilities | (11 | ) | (3 | ) | (14 | ) | (11 | ) | (3 | ) | (14 | ) | ||||||||||||||||||||
Accrued postretirement benefits | (288 | ) | (60 | ) | (348 | ) | (338 | ) | (62 | ) | (400 | ) | ||||||||||||||||||||
Net amount recognized | $ | (253 | ) | $ | (63 | ) | $ | (316 | ) | $ | (313 | ) | $ | (65 | ) | $ | (378 | ) | ||||||||||||||
Accumulated other comprehensive income (loss): | ||||||||||||||||||||||||||||||||
Net actuarial losses | $ | (228 | ) | $ | (20 | ) | $ | (248 | ) | $ | (277 | ) | $ | (24 | ) | $ | (301 | ) | ||||||||||||||
Prior service cost | — | — | — | (5 | ) | — | (5 | ) | ||||||||||||||||||||||||
Total | $ | (228 | ) | $ | (20 | ) | $ | (248 | ) | $ | (282 | ) | $ | (24 | ) | $ | (306 | ) | ||||||||||||||
Summary of the funded status of postretirement plans | ' | |||||||||||||||||||||||||||||||
The benefit obligation, fair value of plan assets, funded status, and amounts recognized in the consolidated and combined financial statements for our defined benefit domestic and international pension plans were: | ||||||||||||||||||||||||||||||||
Domestic Plans | International Plans | |||||||||||||||||||||||||||||||
December 31, | December 31, | |||||||||||||||||||||||||||||||
(in millions) | 2013 | 2012 | 2013 | 2012 | ||||||||||||||||||||||||||||
Change in benefit obligation: | ||||||||||||||||||||||||||||||||
Benefit obligation at beginning of year | $ | 83 | $ | 71 | $ | 707 | $ | 599 | ||||||||||||||||||||||||
Service cost | 3 | 3 | 14 | 11 | ||||||||||||||||||||||||||||
Interest cost | 3 | 3 | 28 | 29 | ||||||||||||||||||||||||||||
Benefits paid | (3 | ) | (3 | ) | (32 | ) | (33 | ) | ||||||||||||||||||||||||
Actuarial (gain) loss | (8 | ) | 9 | (9 | ) | 69 | ||||||||||||||||||||||||||
Plan amendments, settlements and curtailments | (4 | ) | — | (2 | ) | — | ||||||||||||||||||||||||||
Foreign currency translation/other | — | — | (3 | ) | 32 | |||||||||||||||||||||||||||
Benefit obligation at end of year | $ | 74 | $ | 83 | $ | 703 | $ | 707 | ||||||||||||||||||||||||
Change in plan assets: | ||||||||||||||||||||||||||||||||
Fair value of plan assets at beginning of year | $ | 51 | 44 | $ | 426 | $ | 373 | |||||||||||||||||||||||||
Employer contributions | 4 | 5 | 36 | 38 | ||||||||||||||||||||||||||||
Actual return on plan assets | 6 | 5 | 42 | 37 | ||||||||||||||||||||||||||||
Benefits paid | (3 | ) | (3 | ) | (32 | ) | (33 | ) | ||||||||||||||||||||||||
Plan amendments, settlements and curtailments | — | — | (1 | ) | (1 | ) | ||||||||||||||||||||||||||
Foreign currency translation/other | — | — | (5 | ) | 12 | |||||||||||||||||||||||||||
Fair value of plan assets at end of year | $ | 58 | $ | 51 | $ | 466 | $ | 426 | ||||||||||||||||||||||||
Funded (unfunded) status of the plans | $ | (16 | ) | $ | (32 | ) | $ | (237 | ) | $ | (281 | ) | ||||||||||||||||||||
Accumulated benefit obligation and fair value of the plans' assets | ' | |||||||||||||||||||||||||||||||
For defined benefit pension plans in which the accumulated benefit obligation was in excess of the fair value of the plans’ assets, the projected benefit obligation (“PBO”), ABO and fair value of the plans’ assets were as follows: | ||||||||||||||||||||||||||||||||
December 31, | ||||||||||||||||||||||||||||||||
(in millions) | 2013 | 2012 | ||||||||||||||||||||||||||||||
Projected benefit obligation | $ | 404 | $ | 516 | ||||||||||||||||||||||||||||
Accumulated benefit obligation | 375 | 469 | ||||||||||||||||||||||||||||||
Fair value of plan assets | 106 | 171 | ||||||||||||||||||||||||||||||
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: | ||||||||||||||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||||||||||||||
(in millions) | 2013 | 2012 | 2011 | |||||||||||||||||||||||||||||
Domestic defined benefit pension plans: | ||||||||||||||||||||||||||||||||
Service cost | $ | 3 | $ | 3 | $ | 2 | ||||||||||||||||||||||||||
Interest cost | 3 | 3 | 3 | |||||||||||||||||||||||||||||
Expected return on plan assets | (4 | ) | (4 | ) | (4 | ) | ||||||||||||||||||||||||||
Amortization of prior service cost | 1 | 1 | 1 | |||||||||||||||||||||||||||||
Amortization of net actuarial loss | 2 | 2 | — | |||||||||||||||||||||||||||||
Net periodic benefit cost | $ | 5 | $ | 5 | $ | 2 | ||||||||||||||||||||||||||
International defined benefit pension plans: | ||||||||||||||||||||||||||||||||
Service cost | $ | 14 | $ | 11 | $ | 6 | ||||||||||||||||||||||||||
Interest cost | 28 | 29 | 12 | |||||||||||||||||||||||||||||
Expected return on plan assets | (31 | ) | (30 | ) | (6 | ) | ||||||||||||||||||||||||||
Amortization of net actuarial loss | 13 | 8 | 2 | |||||||||||||||||||||||||||||
Settlement and special termination benefits | — | 2 | 1 | |||||||||||||||||||||||||||||
Net periodic benefit cost | $ | 24 | $ | 20 | $ | 15 | ||||||||||||||||||||||||||
Total net periodic benefit cost | $ | 29 | $ | 25 | $ | 17 | ||||||||||||||||||||||||||
Other changes in plan assets and benefit obligations recognized in other comprehensive income, as they pertain to our defined benefit pension plans are as follows: | ||||||||||||||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||||||||||||||
(in millions) | 2013 | 2012 | 2011 | |||||||||||||||||||||||||||||
Domestic defined benefit pension plans: | ||||||||||||||||||||||||||||||||
Net (gain) loss | $ | (11 | ) | $ | 8 | $ | 14 | |||||||||||||||||||||||||
Prior service (credit) cost | (4 | ) | 1 | — | ||||||||||||||||||||||||||||
Amortization of prior service cost | (1 | ) | (1 | ) | (1 | ) | ||||||||||||||||||||||||||
Amortization of net actuarial loss | (2 | ) | (2 | ) | — | |||||||||||||||||||||||||||
Change recognized in other comprehensive income | $ | (18 | ) | $ | 6 | $ | 13 | |||||||||||||||||||||||||
International defined benefit pension plans: | ||||||||||||||||||||||||||||||||
Net (gain) loss | $ | (21 | ) | $ | 62 | $ | 57 | |||||||||||||||||||||||||
Amortization of net actuarial loss | (13 | ) | (8 | ) | (2 | ) | ||||||||||||||||||||||||||
Settlement | — | (2 | ) | — | ||||||||||||||||||||||||||||
Foreign exchange | (2 | ) | 8 | — | ||||||||||||||||||||||||||||
Change recognized in other comprehensive (income) loss (a) | $ | (36 | ) | $ | 60 | $ | 55 | |||||||||||||||||||||||||
Total recognized in other comprehensive (income) loss | $ | (54 | ) | $ | 66 | $ | 68 | |||||||||||||||||||||||||
Total recognized in comprehensive (income) loss | $ | (25 | ) | $ | 91 | $ | 85 | |||||||||||||||||||||||||
(a) | The 2011 amount excludes $97 million ($68 million net of tax) of deferred losses assumed upon Spin-off. | |||||||||||||||||||||||||||||||
The components of net periodic benefit cost for other postretirement employee benefit plans are as follows: | ||||||||||||||||||||||||||||||||
Weighted-average assumptions used to determine projected benefit obligations and net periodic benefit cost | ' | |||||||||||||||||||||||||||||||
The following table provides the weighted-average assumptions used to determine projected benefit obligations and net periodic benefit cost, as they pertain to our pension plans. | ||||||||||||||||||||||||||||||||
2013 | 2012 | 2011 | ||||||||||||||||||||||||||||||
U.S. | Int’l | U.S. | Int’l | U.S. | Int’l | |||||||||||||||||||||||||||
Benefit Obligation Assumptions | ||||||||||||||||||||||||||||||||
Discount rate | 4.79 | % | 4.23 | % | 4.13 | % | 4.04 | % | 4.87 | % | 4.76 | % | ||||||||||||||||||||
Rate of future compensation increase | NM | 3.48 | % | 4.5 | % | 3.5 | % | 4.5 | % | 3.58 | % | |||||||||||||||||||||
Net Periodic Benefit Cost Assumptions | ||||||||||||||||||||||||||||||||
Discount rate | 4.13 | % | 4.04 | % | 4.87 | % | 4.76 | % | 5.83 | % | 5.53 | % | ||||||||||||||||||||
Expected long-term return on plan assets | 8 | % | 7.33 | % | 8 | % | 7.35 | % | 9 | % | 7.34 | % | ||||||||||||||||||||
Rate of future compensation increase | 4.5 | % | 3.5 | % | 4.5 | % | 3.58 | % | 4.5 | % | 3.37 | % | ||||||||||||||||||||
Actual plan returns | ' | |||||||||||||||||||||||||||||||
The table below provides the weighted average actual rate of return generated on plan assets during each of the years presented as compared to the weighted average expected long-term rates of return utilized in calculating the net periodic benefit costs. | ||||||||||||||||||||||||||||||||
2013 | 2012 | 2011 | ||||||||||||||||||||||||||||||
Expected long-term rate of return on plan assets | 7.4 | % | 7.42 | % | 7.52 | % | ||||||||||||||||||||||||||
Actual rate of return on plan assets | 10.17 | % | 10.09 | % | (1.40 | )% | ||||||||||||||||||||||||||
Allocation of plan assets | ' | |||||||||||||||||||||||||||||||
The following table provides the fair value of plan assets held by our pension benefit plans by asset class. | ||||||||||||||||||||||||||||||||
December 31, | ||||||||||||||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||||||||||||||
(in millions) | Total | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||
Asset Category | ||||||||||||||||||||||||||||||||
Equity securities | ||||||||||||||||||||||||||||||||
Global stock funds/securities | $ | 123 | $ | 108 | $ | 11 | $ | 4 | $ | 93 | $ | 79 | $ | 11 | $ | 3 | ||||||||||||||||
Index funds | 40 | 3 | 37 | — | 46 | 3 | 43 | — | ||||||||||||||||||||||||
Emerging markets funds | 3 | 3 | — | — | — | — | — | — | ||||||||||||||||||||||||
Fixed income | ||||||||||||||||||||||||||||||||
Corporate bonds | 95 | 40 | 48 | 7 | 100 | 32 | 59 | 9 | ||||||||||||||||||||||||
Government bonds | 35 | 35 | — | — | 26 | 23 | 3 | — | ||||||||||||||||||||||||
Hedge funds | 123 | 9 | 95 | 19 | 140 | 44 | 76 | 20 | ||||||||||||||||||||||||
Private equity | 22 | — | — | 22 | 24 | — | — | 24 | ||||||||||||||||||||||||
Insurance contracts and other | 83 | 62 | 4 | 17 | 48 | 44 | — | 4 | ||||||||||||||||||||||||
Total | $ | 524 | $ | 260 | $ | 195 | $ | 69 | $ | 477 | $ | 225 | $ | 192 | $ | 60 | ||||||||||||||||
The following table provides the actual asset allocations of plan assets as of December 31, 2013 and 2012, and the related asset target allocation ranges by asset category. | ||||||||||||||||||||||||||||||||
2013 | 2012 | Target | ||||||||||||||||||||||||||||||
Allocation | ||||||||||||||||||||||||||||||||
Ranges | ||||||||||||||||||||||||||||||||
Equity securities | 31.7 | % | 29.2 | % | 20-40% | |||||||||||||||||||||||||||
Fixed income | 24.7 | % | 26.4 | % | 20-50% | |||||||||||||||||||||||||||
Hedge funds | 23.5 | % | 29.4 | % | 20-60% | |||||||||||||||||||||||||||
Private equity | 4.2 | % | 5.1 | % | 0-15% | |||||||||||||||||||||||||||
Insurance contracts and other | 15.9 | % | 9.9 | % | 0-30% | |||||||||||||||||||||||||||
Reconciliation of the beginning and ending balances of fair value measurements with pension plans using significant unobservable inputs (level 3) | ' | |||||||||||||||||||||||||||||||
The following table presents a reconciliation of the beginning and ending balances of fair value measurement within our pension plans using significant unobservable inputs (Level 3). | ||||||||||||||||||||||||||||||||
(in millions) | Equity | Fixed Income | Hedge funds | Private Equity | Other | Total | ||||||||||||||||||||||||||
Securities | ||||||||||||||||||||||||||||||||
Balance, December 31, 2011 | $ | 2 | $ | — | $ | 37 | $ | 24 | $ | 4 | $ | 67 | ||||||||||||||||||||
Purchases, sales, settlements | — | 8 | 8 | (1 | ) | — | 15 | |||||||||||||||||||||||||
Unrealized loss | — | 1 | 1 | 1 | — | 3 | ||||||||||||||||||||||||||
Realized gains | 1 | — | 1 | — | — | 2 | ||||||||||||||||||||||||||
Net transfers | — | — | (25 | ) | — | — | (25 | ) | ||||||||||||||||||||||||
Currency impact | — | — | (2 | ) | — | — | (2 | ) | ||||||||||||||||||||||||
Balance, December 31, 2012 | 3 | 9 | 20 | 24 | 4 | 60 | ||||||||||||||||||||||||||
Purchases, sales, settlements | — | (3 | ) | 10 | (4 | ) | 12 | 15 | ||||||||||||||||||||||||
Unrealized gains | — | 1 | 1 | 1 | 1 | 4 | ||||||||||||||||||||||||||
Realized gains | 1 | — | — | — | — | 1 | ||||||||||||||||||||||||||
Net transfers | — | — | (12 | ) | — | — | (12 | ) | ||||||||||||||||||||||||
Currency impact | — | — | — | 1 | — | 1 | ||||||||||||||||||||||||||
Balance, December 31, 2013 | $ | 4 | $ | 7 | $ | 19 | $ | 22 | $ | 17 | $ | 69 | ||||||||||||||||||||
Expected benefit payments | ' | |||||||||||||||||||||||||||||||
The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid as follows: | ||||||||||||||||||||||||||||||||
(in millions) | Pension | Other Benefits | ||||||||||||||||||||||||||||||
2014 | $ | 35 | $ | 3 | ||||||||||||||||||||||||||||
2015 | 36 | 3 | ||||||||||||||||||||||||||||||
2016 | 37 | 3 | ||||||||||||||||||||||||||||||
2017 | 38 | 3 | ||||||||||||||||||||||||||||||
2018 | 39 | 3 | ||||||||||||||||||||||||||||||
Years 2019 – 2023 | 222 | 20 | ||||||||||||||||||||||||||||||
Other postretirement benefit plans | ' | |||||||||||||||||||||||||||||||
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block | ' | |||||||||||||||||||||||||||||||
Projected benefit obligations | ' | |||||||||||||||||||||||||||||||
The following table provides a rollforward of the projected benefit obligation for the other postretirement employee benefit plans: | ||||||||||||||||||||||||||||||||
(in millions) | 2013 | 2012 | ||||||||||||||||||||||||||||||
Change in benefit obligation: | ||||||||||||||||||||||||||||||||
Benefit obligation at beginning of year | $ | 65 | $ | 46 | ||||||||||||||||||||||||||||
Service cost | 1 | 1 | ||||||||||||||||||||||||||||||
Interest cost | 3 | 3 | ||||||||||||||||||||||||||||||
Benefits paid | (3 | ) | (3 | ) | ||||||||||||||||||||||||||||
Actuarial (gain) loss | (2 | ) | 15 | |||||||||||||||||||||||||||||
Other | (1 | ) | 3 | |||||||||||||||||||||||||||||
Benefit Obligation at the end of year | $ | 63 | $ | 65 | ||||||||||||||||||||||||||||
StockBased_Compensation_Tables
Stock-Based Compensation (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2013 | ||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | |||||||||||
Summary of the changes in outstanding stock options | ' | |||||||||||
The following is a summary of the changes in outstanding stock options for 2013: | ||||||||||||
(shares in thousands) | Shares | Weighted | Weighted Average | |||||||||
Average | Remaining | |||||||||||
Exercise | Contractual | |||||||||||
Price / Share | Term (Years) | |||||||||||
Outstanding at January 1, 2013 | 4,083 | $ | 26.46 | 6.4 | ||||||||
Granted | 817 | $ | 27.43 | 10 | ||||||||
Exercised | (850 | ) | $ | 25.01 | 3.4 | |||||||
Forfeited | (546 | ) | $ | 27.86 | 6.1 | |||||||
Outstanding at December 31, 2013 | 3,504 | $ | 26.8 | 6.4 | ||||||||
Options exercisable at December 31, 2013 | 1,994 | $ | 26.71 | 4.9 | ||||||||
Vested and non-vested expected to vest at December 31. 2013 | 3,438 | $ | 26.79 | 6.4 | ||||||||
Weighted-average assumptions | ' | |||||||||||
The following are weighted-average assumptions for 2013. | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
Dividend yield | 1.69 | % | 1.52 | % | 1.51 | % | ||||||
Volatility | 31.1 | % | 33.4 | % | 36.3 | % | ||||||
Risk-free interest rate | 1.28 | % | 1.42 | % | 1.5 | % | ||||||
Expected term (in years) | 6.62 | 7 | 6.4 | |||||||||
Weighted-average fair value per share | $ | 7.58 | $ | 8.1 | $ | 7.88 | ||||||
Summary of restricted stock activity | ' | |||||||||||
Our restricted stock activity was as follows for 2013: | ||||||||||||
(shares in thousands) | Shares | Weighted Average | ||||||||||
Grant Date Fair | ||||||||||||
Value Per Share | ||||||||||||
Outstanding at January 1, 2013 | 1,588 | $ | 26.92 | |||||||||
Granted | 568 | $ | 28.18 | |||||||||
Vested | (691 | ) | $ | 26.44 | ||||||||
Forfeited | (190 | ) | $ | 28.84 | ||||||||
Outstanding at December 31, 2013 | 1,275 | $ | 27.67 | |||||||||
Schedule of Share-based Compensation, Performance-Based Units Award Activity | ' | |||||||||||
Our performance-based share activity was as follows for 2013: | ||||||||||||
(shares in thousands) | Shares | Weighted Average | ||||||||||
Grant Date Fair | ||||||||||||
Value Per Share | ||||||||||||
Outstanding at January 1, 2013 | — | $ | — | |||||||||
Granted | 119 | $ | 27.49 | |||||||||
Vested | — | $ | — | |||||||||
Forfeited | (67 | ) | $ | 27.49 | ||||||||
Outstanding at December 31, 2013 | 52 | $ | 27.49 | |||||||||
Accumulated_Other_Comprehensiv1
Accumulated Other Comprehensive Income (Loss) (Tables) | 12 Months Ended | |||||||||||||||
Dec. 31, 2013 | ||||||||||||||||
Accumulated Other Comprehensive Income [Abstract] | ' | |||||||||||||||
Components of Accumulated Other Comprehensive Income | ' | |||||||||||||||
The following table provides the components of accumulated other comprehensive income for 2013, 2012 and 2011: | ||||||||||||||||
(in millions) | Foreign Currency Translation | Postretirement Benefit Plans | Derivative Instruments | Total | ||||||||||||
Balance at January 1, 2011 | $ | 73 | $ | (36 | ) | $ | — | $ | 37 | |||||||
Foreign currency translation adjustment | (61 | ) | (61 | ) | ||||||||||||
Contributed currency translation adjustment | 276 | 276 | ||||||||||||||
Change in postretirement benefit plans | (74 | ) | (74 | ) | ||||||||||||
Change in tax on postretirement benefit plans | 15 | 15 | ||||||||||||||
Amortization of prior service cost and net actuarial loss on postretirement benefit plans into: | ||||||||||||||||
Cost of revenue | 2 | 2 | ||||||||||||||
Selling, general and administrative expenses | 1 | 1 | ||||||||||||||
Tax on amortization of postretirement benefit plan items | (1 | ) | (1 | ) | ||||||||||||
Assumption of accumulated unrealized gains | (105 | ) | (105 | ) | ||||||||||||
Assumption of tax on accumulated unrealized gains | 32 | 32 | ||||||||||||||
Balance at December 31, 2011 | $ | 288 | $ | (166 | ) | $ | — | $ | 122 | |||||||
Foreign currency translation adjustment | 48 | 48 | ||||||||||||||
Change in postretirement benefit plans | (93 | ) | (93 | ) | ||||||||||||
Change in tax on postretirement benefit plans | 27 | 27 | ||||||||||||||
Amortization of prior service cost and net actuarial loss on postretirement benefit plans into: | ||||||||||||||||
Cost of revenue | 5 | 5 | ||||||||||||||
Selling, general and administrative expenses | 5 | 5 | ||||||||||||||
Other non-operating (expense) income, net | 4 | 4 | ||||||||||||||
Tax on amortization of postretirement benefit plan items | (4 | ) | (4 | ) | ||||||||||||
Unrealized gain on foreign exchange agreements | 4 | 4 | ||||||||||||||
Tax on unrealized gain on foreign exchange agreements | (1 | ) | (1 | ) | ||||||||||||
Reclassification of unrealized gain on foreign exchange agreements | (3 | ) | (3 | ) | ||||||||||||
Tax on reclassification of unrealized gain on foreign exchange agreements | 1 | 1 | ||||||||||||||
Balance at December 31, 2012 | $ | 336 | $ | (222 | ) | $ | 1 | $ | 115 | |||||||
(in millions) | Foreign Currency Translation | Postretirement Benefit Plans | Derivative Instruments | Total | ||||||||||||
Balance at January 1, 2013 | $ | 336 | $ | (222 | ) | $ | 1 | $ | 115 | |||||||
Foreign currency translation adjustment | 15 | 15 | ||||||||||||||
Change in postretirement benefit plans | 40 | 40 | ||||||||||||||
Change in tax on postretirement benefit plans | (17 | ) | (17 | ) | ||||||||||||
Amortization of prior service cost and net actuarial loss on postretirement benefit plans into: | ||||||||||||||||
Cost of revenue | 7 | 7 | ||||||||||||||
Selling, general and administrative expenses | 7 | 7 | ||||||||||||||
Research and development expenses | 1 | 1 | ||||||||||||||
Other non-operating (expense) income, net | 3 | 3 | ||||||||||||||
Tax on amortization of postretirement benefit plan items | (5 | ) | (5 | ) | ||||||||||||
Unrealized gains on foreign exchange agreements | 1 | 1 | ||||||||||||||
Reclassification of unrealized gain on foreign exchange agreements into revenue | (2 | ) | (2 | ) | ||||||||||||
Reclassification of unrealized loss on foreign exchange agreements into cost of revenue | 2 | 2 | ||||||||||||||
Balance at December 31, 2013 | $ | 351 | $ | (186 | ) | $ | 2 | $ | 167 | |||||||
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | |||||||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | ' | |||||||||||||||||||||||
Total rent expense under operating leases | ' | |||||||||||||||||||||||
Total rent expense for the three years ended December 31, 2013 was as follows: | ||||||||||||||||||||||||
(in millions) | Total | |||||||||||||||||||||||
2013 | $ | 77 | ||||||||||||||||||||||
2012 | 73 | |||||||||||||||||||||||
2011 | 64 | |||||||||||||||||||||||
Minimum rental payments under operating leases | ' | |||||||||||||||||||||||
At December 31, 2013, we are obligated to make minimum rental payments under operating leases which are as follows: | ||||||||||||||||||||||||
(in millions) | 2014 | 2015 | 2016 | 2017 | 2018 | Thereafter | ||||||||||||||||||
Minimum rental payments | $ | 63 | $ | 51 | $ | 39 | $ | 24 | $ | 22 | $ | 26 | ||||||||||||
Changes in product warranty accrual | ' | |||||||||||||||||||||||
The table below provides changes in the product warranty accrual over each period. | ||||||||||||||||||||||||
(in millions) | 2013 | 2012 | ||||||||||||||||||||||
Warranty accrual – January 1 | $ | 40 | $ | 42 | ||||||||||||||||||||
Net changes for product warranties in the period | 34 | 32 | ||||||||||||||||||||||
Settlement of warranty claims | (37 | ) | (33 | ) | ||||||||||||||||||||
Other | — | (1 | ) | |||||||||||||||||||||
Warranty accrual – December 31 | $ | 37 | $ | 40 | ||||||||||||||||||||
Related_Party_Transactions_and1
Related Party Transactions and Parent Company Equity (Tables) | 12 Months Ended | |||
Dec. 31, 2013 | ||||
Related Party Transactions [Abstract] | ' | |||
Schedule of Related Party Transactions | ' | |||
The components of the net transfers from/(to) parent for 2011 are as follows: | ||||
Year Ended December 31, | ||||
(in millions) | 2011 | |||
Intercompany dividends | $ | (87 | ) | |
Cash pooling and general financing activities | (1,355 | ) | ||
Corporate allocations including income taxes | 182 | |||
Contribution of assets and liabilities upon Spin-off | 20 | |||
Total net transfers from/(to) parent | $ | (1,240 | ) |
Industry_Segment_and_Geographi1
Industry Segment and Geographic Data (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2013 | ||||||||||||
Segment Reporting [Abstract] | ' | |||||||||||
Financial information for each reportable segment | ' | |||||||||||
The accounting policies of each segment are the same as those described in the summary of significant accounting policies (see Note 1). The following tables contain financial information for each reportable segment: | ||||||||||||
Year Ended December 31, | ||||||||||||
(in millions) | 2013 | 2012 | 2011 | |||||||||
Revenue: | ||||||||||||
Water Infrastructure | $ | 2,457 | $ | 2,425 | $ | 2,416 | ||||||
Applied Water | 1,444 | 1,424 | 1,444 | |||||||||
Eliminations | (64 | ) | (58 | ) | (57 | ) | ||||||
Total | $ | 3,837 | $ | 3,791 | $ | 3,803 | ||||||
Operating income: | ||||||||||||
Water Infrastructure | $ | 271 | $ | 342 | $ | 343 | ||||||
Applied Water | 167 | 170 | 160 | |||||||||
Corporate and other | (75 | ) | (69 | ) | (108 | ) | ||||||
Total operating income | 363 | 443 | 395 | |||||||||
Other non-operating income | (10 | ) | — | 5 | ||||||||
Interest expense | 55 | 55 | 17 | |||||||||
Income before taxes | $ | 298 | $ | 388 | $ | 383 | ||||||
Depreciation and amortization: | ||||||||||||
Water Infrastructure | $ | 115 | $ | 106 | $ | 104 | ||||||
Applied Water | 28 | 29 | 31 | |||||||||
Corporate and other | 7 | 7 | 2 | |||||||||
Total | $ | 150 | $ | 142 | $ | 137 | ||||||
Capital expenditures: | ||||||||||||
Water Infrastructure | $ | 76 | $ | 79 | $ | 91 | ||||||
Applied Water | 34 | 27 | 31 | |||||||||
Corporate and other | 16 | 6 | 4 | |||||||||
Total | $ | 126 | $ | 112 | $ | 126 | ||||||
Revenue by product category | ' | |||||||||||
The following table illustrates revenue by product category, net of intercompany revenue. | ||||||||||||
Year Ended December 31, | ||||||||||||
(in millions) | 2013 | 2012 | 2011 | |||||||||
Pumps, accessories, parts and service | $ | 3,076 | $ | 3,054 | $ | 3,093 | ||||||
Other (a) | 761 | 737 | 710 | |||||||||
Total | $ | 3,837 | $ | 3,791 | $ | 3,803 | ||||||
Total assets for each reportable segment | ' | |||||||||||
The following table contains the total assets for each reportable segment as of December 31, 2013 and 2012. | ||||||||||||
Total Assets | ||||||||||||
(in millions) | 2013 | 2012 | 2011 | |||||||||
Water Infrastructure | $ | 2,989 | $ | 2,844 | $ | 2,745 | ||||||
Applied Water | 1,340 | 1,253 | 1,241 | |||||||||
Corporate and other (a) | 567 | 582 | 414 | |||||||||
Total | $ | 4,896 | $ | 4,679 | $ | 4,400 | ||||||
Revenues and Property, Plant and Equipment by geographic location | ' | |||||||||||
Revenue is attributed to countries based upon the location of the customer. Property, Plant & Equipment is attributed to countries based upon the location of the assets. | ||||||||||||
Revenue | ||||||||||||
Year Ended December 31, | ||||||||||||
(in millions) | 2013 | 2012 | 2011 | |||||||||
United States | $ | 1,434 | $ | 1,400 | $ | 1,363 | ||||||
Europe | 1,387 | 1,338 | 1,422 | |||||||||
Asia Pacific | 467 | 469 | 426 | |||||||||
Other | 549 | 584 | 592 | |||||||||
Total | $ | 3,837 | $ | 3,791 | $ | 3,803 | ||||||
Property, Plant & Equipment | ||||||||||||
December 31, | ||||||||||||
(in millions) | 2013 | 2012 | 2011 | |||||||||
United States | $ | 186 | $ | 183 | $ | 178 | ||||||
Europe | 225 | 219 | 209 | |||||||||
Asia Pacific | 45 | 65 | 57 | |||||||||
Other | 32 | 20 | 19 | |||||||||
Total | $ | 488 | $ | 487 | $ | 463 | ||||||
Supplemental_Information_Table
Supplemental Information (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2013 | ||||||||||||
Valuation and Qualifying Accounts [Abstract] | ' | |||||||||||
Schedule of Valuation and Qualifying Accounts | ' | |||||||||||
The table below provides changes in the allowance for doubtful accounts over each period. | ||||||||||||
(in millions) | 2013 | 2012 | 2011 | |||||||||
Balance at beginning of year | $ | 25 | $ | 29 | $ | 25 | ||||||
Additions charged to expense | 8 | 4 | 11 | |||||||||
Deductions/other | (11 | ) | (8 | ) | (7 | ) | ||||||
Balance at end of year | $ | 22 | $ | 25 | $ | 29 | ||||||
The table below provides changes in the inventory valuation over each period. | ||||||||||||
(in millions) | 2013 | 2012 | 2011 | |||||||||
Balance at beginning of year | $ | 38 | $ | 39 | $ | 33 | ||||||
Additions charged to cost of revenue | 14 | 9 | 17 | |||||||||
Deductions/other | (11 | ) | (10 | ) | (11 | ) | ||||||
Balance at end of year | $ | 41 | $ | 38 | $ | 39 | ||||||
Quarterly_Financial_Data_Table
Quarterly Financial Data (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | ' | ||||||||||||||||
Quarterly Financial Data (Unaudited) | ' | ||||||||||||||||
2013 Quarter Ended | |||||||||||||||||
(In millions, except per share amounts) | Dec. 31 | Sept. 30 | June 30 | Mar. 31 | |||||||||||||
Revenue | $ | 1,033 | $ | 965 | $ | 960 | $ | 879 | |||||||||
Gross profit | 410 | 384 | 371 | 334 | |||||||||||||
Operating income | 129 | 98 | 70 | 66 | |||||||||||||
Net income | $ | 68 | $ | 73 | $ | 46 | $ | 41 | |||||||||
Earnings per share: | |||||||||||||||||
Basic | $ | 0.37 | $ | 0.39 | $ | 0.25 | $ | 0.22 | |||||||||
Diluted | $ | 0.37 | $ | 0.39 | $ | 0.25 | $ | 0.22 | |||||||||
2012 Quarter Ended | |||||||||||||||||
(In millions, except per share amounts) | Dec. 31 | Sept. 30 | June 30 | Mar. 31 | |||||||||||||
Revenue | $ | 969 | $ | 931 | $ | 966 | $ | 925 | |||||||||
Gross profit | 382 | 374 | 383 | 363 | |||||||||||||
Operating income | 104 | 111 | 129 | 99 | |||||||||||||
Net income | $ | 73 | $ | 72 | $ | 89 | $ | 63 | |||||||||
Earnings per share: | |||||||||||||||||
Basic | $ | 0.39 | $ | 0.39 | $ | 0.48 | $ | 0.34 | |||||||||
Diluted | $ | 0.39 | $ | 0.38 | $ | 0.48 | $ | 0.34 | |||||||||
Capital_Stock_Tables
Capital Stock (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Equity [Abstract] | ' | ||||||||
Schedule of Common Stock Outstanding Roll Forward | ' | ||||||||
The changes in common stock outstanding for the three years ended December 31 are as follows: | |||||||||
(in thousands of shares) | 2013 | 2012 | 2011 | ||||||
Beginning Balance, January 1 | 185,658 | 184,641 | — | ||||||
Conversion of net investment | — | — | 184,578 | ||||||
Stock incentive plan activity | 1,203 | 1,367 | 63 | ||||||
Repurchase of common stock | (2,304 | ) | (350 | ) | — | ||||
Ending Balance, December 31 | 184,557 | 185,658 | 184,641 | ||||||
Summary_of_Significant_Account3
Summary of Significant Accounting Policies (Details Textual) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Oct. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, except Share data, unless otherwise specified | Minimum [Member] | Maximum [Member] | Foreign Currency [Member] | Foreign Currency [Member] | |||
Number of distributed shares | 187,600,000 | 186,200,000 | 184,600,000 | ' | ' | ' | ' |
Intangible assets estimated economic useful lives | ' | ' | ' | '5 years | '40 years | ' | ' |
Cash | ' | ' | ' | ' | ' | $423 | $401 |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies (Property, Plant and Equipment, Useful Lives) (Details) | 12 Months Ended |
Dec. 31, 2013 | |
Building and improvements | Minimum [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Property, plant and equipment estimated useful lives | '5 years |
Building and improvements | Maximum [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Property, plant and equipment estimated useful lives | '40 years |
Machinery and equipment | Minimum [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Property, plant and equipment estimated useful lives | '2 years |
Machinery and equipment | Maximum [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Property, plant and equipment estimated useful lives | '10 years |
Furniture and fixtures | Minimum [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Property, plant and equipment estimated useful lives | '3 years |
Furniture and fixtures | Maximum [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Property, plant and equipment estimated useful lives | '7 years |
Equipment held for lease or rental | Minimum [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Property, plant and equipment estimated useful lives | '2 years |
Equipment held for lease or rental | Maximum [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Property, plant and equipment estimated useful lives | '10 years |
Acquisitions_Details
Acquisitions (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Sep. 01, 2011 |
In Millions, unless otherwise specified | YSI Corporation | |||
Business Acquisition [Line Items] | ' | ' | ' | ' |
Purchase Price | ' | ' | ' | $309 |
Assets acquired and liabilities assumed: | ' | ' | ' | ' |
Accounts receivable | ' | ' | ' | 15 |
Inventory | ' | ' | ' | 15 |
Property, plant and equipment | ' | ' | ' | 9 |
Goodwill | 1,718 | 1,647 | 1,610 | 190 |
Intangible assets | ' | ' | ' | 125 |
Other current and non-current assets | ' | ' | ' | 17 |
Other current and non-current liabilities | ' | ' | ' | -62 |
Net assets acquired | ' | ' | ' | $309 |
Acquisitions_Details_1
Acquisitions (Details 1) (USD $) | 2 Months Ended | 3 Months Ended | 10 Months Ended | 12 Months Ended | |||||||||
In Millions, unless otherwise specified | Dec. 31, 2011 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Oct. 30, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenue | ' | $1,033 | $965 | $960 | $879 | $969 | $931 | $966 | $925 | ' | $3,837 | $3,791 | $3,803 |
Net income | 59 | 68 | 73 | 46 | 41 | 73 | 72 | 89 | 63 | 220 | 228 | 297 | 279 |
Depreciation and amortization | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -150 | -142 | -137 |
Income tax provision | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $70 | $91 | $104 |
Acquisitions_Details_Textual
Acquisitions (Details Textual) (USD $) | 12 Months Ended | 0 Months Ended | 12 Months Ended | 12 Months Ended | 12 Months Ended | 12 Months Ended | 12 Months Ended | ||||||||||||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Jun. 30, 2012 | Dec. 31, 2011 | Mar. 01, 2013 | Jun. 30, 2012 | Feb. 05, 2013 | Apr. 30, 2012 | Dec. 31, 2011 | Oct. 26, 2012 | Jun. 30, 2012 | Jul. 13, 2012 | Dec. 31, 2012 | Dec. 31, 2010 | Dec. 31, 2013 | Sep. 01, 2011 | Sep. 01, 2011 | Dec. 31, 2012 | Sep. 01, 2011 | Dec. 31, 2012 | Sep. 01, 2011 |
company | MultiTrode Pty Ltd | MultiTrode Pty Ltd | PIMS Group | PIMS Group | Heartland Pump Rental and Sales Inc | Heartland Pump Rental and Sales Inc | MJK Automation | MJK Automation | YSI Corporation | YSI Corporation | YSI Corporation | YSI Corporation | YSI Corporation | YSI Corporation | YSI Corporation | YSI Corporation | YSI Corporation | ||||
Employees | Employees | Employees | Trademarks | Customer Relationships | Customer Relationships | Proprietary Technology | Proprietary Technology | ||||||||||||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash payment to acquire business | $84 | ' | ' | ' | ' | ' | $57 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total spent on business acquisitions | 81 | 41 | ' | 309 | ' | ' | 55 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Purchase Price | ' | ' | ' | ' | 26 | ' | ' | ' | ' | 29 | ' | 12 | ' | ' | ' | 309 | ' | ' | ' | ' | ' |
Number of employees | ' | ' | ' | ' | ' | 60 | ' | 220 | ' | ' | ' | ' | ' | ' | 390 | ' | ' | ' | ' | ' | ' |
Revenue from acquired entity | ' | ' | 13 | ' | ' | ' | ' | 38 | 33 | ' | 11 | ' | ' | 101 | ' | ' | ' | ' | ' | ' | ' |
Number of acquisitions | ' | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Transaction costs | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3 | ' | ' | ' | ' | ' | ' | ' | ' |
Goodwill | 1,718 | 1,647 | ' | 1,610 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 190 | ' | ' | ' | ' | ' |
Intangible assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 125 | ' | ' | ' | ' | ' |
Finite lived intangible assets acquired | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 41 | ' | 35 |
Finite lived intangible assets acquired, weighted average useful life | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '16 years | ' | '16 years | ' |
Indefinite lived intangible assets acquired | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $49 | ' | ' | ' | ' |
Restructuring_and_Asset_Impair2
Restructuring and Asset Impairment Charges (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Restructuring Cost and Reserve [Line Items] | ' | ' | ' |
Severance and other charges | $38 | $17 | $0 |
Business Exit Costs | 2 | 0 | 0 |
Total net restructuring charges | 40 | 17 | 0 |
Asset impairment | 2 | 0 | 2 |
Restructuring and asset impairments charges, net | 42 | 17 | 2 |
Water Infrastructure | ' | ' | ' |
Restructuring Cost and Reserve [Line Items] | ' | ' | ' |
Restructuring and asset impairments charges, net | 33 | 14 | 0 |
Applied Water | ' | ' | ' |
Restructuring Cost and Reserve [Line Items] | ' | ' | ' |
Restructuring and asset impairments charges, net | $9 | $3 | $2 |
Restructuring_and_Asset_Impair3
Restructuring and Asset Impairment Charges (Details 1) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Restructuring Reserve [Roll Forward] | ' | ' | ' |
Restructuring accruals | $9 | $1 | ' |
Severance and other | 40 | 17 | 0 |
Cash payments | -35 | -9 | ' |
Other | -1 | 0 | ' |
Restructuring accruals | 13 | 9 | 1 |
Water Infrastructure | ' | ' | ' |
Restructuring Reserve [Roll Forward] | ' | ' | ' |
Restructuring accruals | 10 | 6 | ' |
Applied Water | ' | ' | ' |
Restructuring Reserve [Roll Forward] | ' | ' | ' |
Restructuring accruals | $3 | $3 | ' |
Restructuring_and_Asset_Impair4
Restructuring and Asset Impairment Charges (Details 2) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Employees | Employees | |
Restructuring and Related Cost, Number of Positions Eliminated [Roll Forward] | ' | ' |
Planned reductions, January 1 | 54 | 0 |
Additional planned reductions | 513 | 189 |
Actual reductions | -516 | -135 |
Planned reductions, December 31 | 51 | 54 |
Restructuring_and_Asset_Impair5
Restructuring and Asset Impairment Charges Restructuring and Asset Impairment Charges (Textual Details) (USD $) | 12 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2013 |
Water Infrastructure [Member] | ' |
Restructuring Cost and Reserve [Line Items] | ' |
Restructuring and Related Cost, Expected Cost | $33 |
Restructuring and Related Cost, Cost Incurred to Date | 31 |
Restructuring and Related Cost, Expected Cost Remaining | 2 |
Applied Water [Member] | ' |
Restructuring Cost and Reserve [Line Items] | ' |
Restructuring and Related Cost, Expected Cost | 10 |
Restructuring and Related Cost, Cost Incurred to Date | 8 |
Restructuring and Related Cost, Expected Cost Remaining | 2 |
Trade Names | Water Infrastructure [Member] | ' |
Restructuring Cost and Reserve [Line Items] | ' |
Impairment of Intangible Assets, Finite-lived | $2 |
Separation_Costs_Details
Separation Costs (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Separation Costs [Abstract] | ' | ' | ' |
Rebranding and marketing costs | $0 | $8 | ' |
Advisory fees and other | 0 | 7 | ' |
Information and technology costs | 2 | 3 | ' |
Employee Retention And Hiring Costs | 0 | 1 | ' |
Lease termination and other real estate costs | 2 | 1 | ' |
Other | 0 | 2 | ' |
Total separation costs in operating income | 4 | 22 | 87 |
Income tax (benefit) expense | -2 | -6 | ' |
Total separation costs, net of tax | $2 | $16 | ' |
Other_NonOperating_Income_Net_1
Other Non-Operating Income, Net Other Non-Operating Income, Net (Details) (USD $) | 12 Months Ended | |||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||
Component of Operating Other Cost and Expense [Line Items] | ' | ' | ' | |||
Income tax expense | $70 | $91 | $104 | |||
Interest and dividend income | 3 | 4 | 3 | |||
Income from joint ventures | 2 | 4 | 4 | |||
Other income (expense) - net | -15 | [1] | -8 | [1] | -2 | [1] |
Other non-operating income, net | -10 | 0 | 5 | |||
ITT [Member] | ' | ' | ' | |||
Component of Operating Other Cost and Expense [Line Items] | ' | ' | ' | |||
Income Tax Expense (Benefit), Pursuant to Related Party Agreement | $10 | ' | ' | |||
[1] | 2013 includes $10 million of expense incurred under the tax matters agreement with ITT. Refer to Note 7 "Income Taxes" for additional information regarding the tax matters agreement. |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Income components: | ' | ' | ' |
Domestic | $49 | $106 | $46 |
Foreign | 249 | 282 | 337 |
Income before taxes | 298 | 388 | 383 |
Current: | ' | ' | ' |
Domestic - federal | 37 | 27 | 20 |
Domestic - state and local | 1 | 7 | 5 |
Foreign | 46 | 56 | 71 |
Total Current | 84 | 90 | 96 |
Deferred: | ' | ' | ' |
Domestic - federal | -6 | 10 | 21 |
Domestic - state and local | 0 | -2 | 3 |
Foreign | -8 | -7 | -16 |
Total Deferred | -14 | 1 | 8 |
Income tax provision | $70 | $91 | $104 |
Effective tax rate | 23.50% | 23.40% | 27.40% |
Income_Taxes_Details_1
Income Taxes (Details 1) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Income Tax Disclosure [Abstract] | ' | ' | ' |
Tax provision at U.S. statutory rate | 35.00% | 35.00% | 35.00% |
Foreign restructurings | 0.00% | 0.00% | 1.50% |
State income taxes | 0.70% | 1.20% | 1.30% |
Settlements of tax examinations | 0.00% | 0.20% | -4.70% |
Valuation allowance | 39.40% | 8.90% | 4.70% |
Tax exempt interest | -43.00% | -18.20% | -14.60% |
Foreign tax rate differential | -4.10% | -3.40% | -4.60% |
Repatriation of foreign earnings, net of foreign tax credits | 5.10% | 0.40% | 3.70% |
Non-deductible separation costs | 0.00% | 0.00% | 2.60% |
Effective Income Tax Rate Reconciliation, Tax Credits, Other | -8.10% | 0.00% | 0.00% |
Other - net | -1.50% | -0.70% | 2.50% |
Provision for income taxes | 23.50% | 23.40% | 27.40% |
Income_Taxes_Details_2
Income Taxes (Details 2) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Deferred tax assets: | ' | ' |
Employee benefits | $114 | $130 |
Accrued expenses | 20 | 17 |
Loss carryforward | 357 | 237 |
Inventory | 6 | 7 |
Foreign tax credit carryforwards | 17 | 18 |
Other | 1 | 3 |
Total deferred tax assets | 515 | 412 |
Valuation allowance | -349 | -229 |
Net deferred tax asset | 166 | 183 |
Deferred tax liabilities: | ' | ' |
Intangibles | 180 | 174 |
Investment in foreign subsidiaries | 15 | 15 |
Property, plant, and equipment | 19 | 15 |
Other | 42 | 34 |
Total deferred tax liabilities | $256 | $238 |
Income_Taxes_Details_3
Income Taxes (Details 3) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Income Tax Disclosure [Abstract] | ' | ' |
Current assets | $41 | $41 |
Non-current assets | 64 | 77 |
Current liabilities | -4 | 0 |
Non-current liabilities | -191 | -173 |
Total deferred taxes | ($90) | ($55) |
Income_Taxes_Details_4
Income Taxes (Details 4) (USD $) | 12 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2013 |
United States | ' |
Operating Loss Carryforwards [Line Items] | ' |
Net operating loss | $10 |
Net operating loss, expiration date | 'December 31, 2023 |
Tax credits | 31 |
Tax credit, expiration date | 31-Dec-20 |
State | ' |
Operating Loss Carryforwards [Line Items] | ' |
Net operating loss | 48 |
Net operating loss, expiration date | 'December 31, 2014 |
Foreign | ' |
Operating Loss Carryforwards [Line Items] | ' |
Net operating loss | $1,214 |
Net operating loss, expiration date | 'December 31, 2014 |
Income_Taxes_Details_5
Income Taxes (Details 5) (USD $) | 12 Months Ended | |||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2009 |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ' | ' | ' | ' |
Unrecognized tax benefits - January 1 | $8 | $5 | ' | $43 |
Additions for current year tax positions | 23 | 1 | 0 | ' |
Prior year tax positions | 0 | 2 | 0 | ' |
Reductions for assumptions by ITT | 0 | 0 | -24 | ' |
Reductions for settlements | -1 | 0 | -14 | ' |
Unrecognized tax benefits - December 31 | $30 | $8 | $5 | $43 |
Income_Taxes_Details_6
Income Taxes (Details 6) | 12 Months Ended |
Dec. 31, 2013 | |
Canada | ' |
Income Tax Contingency [Line Items] | ' |
Open tax year | '2008 |
Germany | ' |
Income Tax Contingency [Line Items] | ' |
Open tax year | '2005 |
Italy | ' |
Income Tax Contingency [Line Items] | ' |
Open tax year | '2008 |
Luxembourg | ' |
Income Tax Contingency [Line Items] | ' |
Open tax year | '2010 |
Poland | ' |
Income Tax Contingency [Line Items] | ' |
Open tax year | '2006 |
Sweden | ' |
Income Tax Contingency [Line Items] | ' |
Open tax year | '2008 |
Switzerland | ' |
Income Tax Contingency [Line Items] | ' |
Open tax year | '2013 |
United Kingdom | ' |
Income Tax Contingency [Line Items] | ' |
Open tax year | '2006 |
United States | ' |
Income Tax Contingency [Line Items] | ' |
Open tax year | '2009 |
Income_Taxes_Details_Textual
Income Taxes (Details Textual) (USD $) | 12 Months Ended | |||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2009 | |
Income Taxes (Textual) [Abstract] | ' | ' | ' | ' |
Income Tax Credits and Adjustments, Reduction of Tax Provision, Percent | 8.10% | ' | ' | ' |
Valuation allowance | $349,000,000 | $229,000,000 | ' | ' |
Deferred tax liability | 256,000,000 | 238,000,000 | ' | ' |
Income tax provision | 70,000,000 | 91,000,000 | 104,000,000 | ' |
Effective tax rate | 23.50% | 23.40% | 27.40% | ' |
Unrecognized tax benefits | 30,000,000 | 8,000,000 | 5,000,000 | 43,000,000 |
Interest accrued for unrecognized tax benefits | 1,000,000 | ' | ' | ' |
Investment in foreign subsidiaries | ' | ' | ' | ' |
Income Taxes (Textual) [Abstract] | ' | ' | ' | ' |
Deferred tax liability | 16,000,000 | ' | ' | ' |
Excess of financial reporting over the tax basis of investments not reinvested | 84,000,000 | ' | ' | ' |
Excess of financial reporting over the tax basis of investments to be reinvested | 1,900,000,000 | ' | ' | ' |
Foreign Operating Losses | ' | ' | ' | ' |
Income Taxes (Textual) [Abstract] | ' | ' | ' | ' |
Change in valuation allowance | 120,000,000 | ' | ' | ' |
ITT [Member] | ' | ' | ' | ' |
Income Taxes (Textual) [Abstract] | ' | ' | ' | ' |
Income Taxes, Amount Owed to Related Party, Pursuant to Agreement | $4,000,000 | ' | ' | ' |
Earnings_Per_Share_Details
Earnings Per Share (Details) (USD $) | 2 Months Ended | 3 Months Ended | 10 Months Ended | 12 Months Ended | ||||||||||||
In Millions, except Share data in Thousands, unless otherwise specified | Dec. 31, 2011 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Oct. 30, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||
Basic and diluted net earnings per share: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Net income | $59 | $68 | $73 | $46 | $41 | $73 | $72 | $89 | $63 | $220 | $228 | $297 | $279 | |||
Shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Weighted average common shares outstanding | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 185,082 | 185,459 | 184,574 | |||
Add: Participating securities | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 134 | [1] | 325 | [1] | 485 | [1] |
Weighted average common shares outstanding - Basic | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 185,216 | 185,784 | 185,059 | |||
Plus incremental shares from assumed conversions: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Weighted average number of shares – Diluted | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 186,038 | 186,230 | 185,324 | |||
Basic earnings per share | ' | $0.37 | $0.39 | $0.25 | $0.22 | $0.39 | $0.39 | $0.48 | $0.34 | ' | $1.23 | $1.60 | $1.51 | |||
Diluted earnings per share | ' | $0.37 | $0.39 | $0.25 | $0.22 | $0.39 | $0.38 | $0.48 | $0.34 | ' | $1.22 | $1.59 | $1.50 | |||
Stock Options | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Plus incremental shares from assumed conversions: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Dilutive effect of common shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 264 | [2] | 213 | [2] | 202 | [2] |
Restricted Stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Plus incremental shares from assumed conversions: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Dilutive effect of common shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 558 | [2] | 233 | [2] | 63 | [2] |
[1] | Restricted stock awards containing rights to non-forfeitable dividends which participate in undistributed earnings with common shareholders are considered participating securities for purposes of computing earnings per share. | |||||||||||||||
[2] | Incremental shares from stock options, restricted stock 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 and performance share awards, reduced by the repurchase of shares with the proceeds from the assumed exercises, unrecognized compensation expense for outstanding awards and the estimated tax benefit of the assumed exercises. Performance share units will be included in the treasury stock calculation of diluted earnings per share upon achievement of underlying performance conditions. See Note 16, "Stock-Based Compensation Plans" for further detail on the performance share units. |
Earnings_Per_Share_Details_1
Earnings Per Share (Details 1) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Stock Options | ' | ' | ' |
Incremental shares from stock options and restricted stock: | ' | ' | ' |
Stock Options/ Restricted Shares | 4,126 | 4,285 | 4,445 |
Restricted Stock | ' | ' | ' |
Incremental shares from stock options and restricted stock: | ' | ' | ' |
Stock Options/ Restricted Shares | 703 | 870 | 788 |
Performance Based Shares | ' | ' | ' |
Incremental shares from stock options and restricted stock: | ' | ' | ' |
Stock Options/ Restricted Shares | 80 | 0 | 0 |
Inventories_Details
Inventories (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Inventories | ' | ' |
Finished goods | $189 | $182 |
Work in process | 31 | 30 |
Raw materials | 255 | 231 |
Total inventories, net | $475 | $443 |
Property_Plant_and_Equipment_D
Property, Plant and Equipment (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Property, Plant and Equipment | ' | ' |
Property, plant and equipment, gross | $1,304 | $1,240 |
Less accumulated depreciation | 816 | 753 |
Total property, plant and equipment, net | 488 | 487 |
Land, buildings and improvements | ' | ' |
Property, Plant and Equipment | ' | ' |
Property, plant and equipment, gross | 263 | 255 |
Machinery and equipment | ' | ' |
Property, Plant and Equipment | ' | ' |
Property, plant and equipment, gross | 685 | 653 |
Equipment held for lease or rental | ' | ' |
Property, Plant and Equipment | ' | ' |
Property, plant and equipment, gross | 192 | 183 |
Furniture and fixtures | ' | ' |
Property, Plant and Equipment | ' | ' |
Property, plant and equipment, gross | 93 | 90 |
Construction work in progress | ' | ' |
Property, Plant and Equipment | ' | ' |
Property, plant and equipment, gross | 49 | 40 |
Other | ' | ' |
Property, Plant and Equipment | ' | ' |
Property, plant and equipment, gross | $22 | $19 |
Property_Plant_and_Equipment_D1
Property, Plant and Equipment (Details Textual) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Property Plant And Equipment (Textual) [Abstract] | ' | ' | ' |
Depreciation expense | $99 | $94 | $93 |
Goodwill_and_Other_Intangible_2
Goodwill and Other Intangible Assets (Details) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Changes in the carrying value of goodwill by operating segment | ' | ' |
Beginning Balance | $1,647 | $1,610 |
Goodwill Acquired | 48 | 19 |
Foreign currency and other | 23 | 18 |
Ending Balance | 1,718 | 1,647 |
Water Infrastructure | ' | ' |
Changes in the carrying value of goodwill by operating segment | ' | ' |
Beginning Balance | 1,085 | 1,054 |
Goodwill Acquired | 48 | 19 |
Foreign currency and other | 16 | 12 |
Ending Balance | 1,149 | 1,085 |
Applied Water | ' | ' |
Changes in the carrying value of goodwill by operating segment | ' | ' |
Beginning Balance | 562 | 556 |
Goodwill Acquired | 0 | 0 |
Foreign currency and other | 7 | 6 |
Ending Balance | $569 | $562 |
Goodwill_and_Other_Intangible_3
Goodwill and Other Intangible Assets (Details 1) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Goodwill and Other Intangible Assets | ' | ' |
Accumulated Amortization | ($173) | ($135) |
Indefinite-lived intangibles | 145 | 143 |
Intangible Assets Gross, Carrying Amount | 661 | 619 |
Intangible Assets, Net Intangibles | 488 | 484 |
Customer and distributor relationships | ' | ' |
Goodwill and Other Intangible Assets | ' | ' |
Carrying Amount | 352 | 317 |
Accumulated Amortization | -104 | -75 |
Net Intangibles | 248 | 242 |
Finite-Lived Intangible Asset, Useful Life | '14 years | ' |
Proprietary technology | ' | ' |
Goodwill and Other Intangible Assets | ' | ' |
Carrying Amount | 109 | 105 |
Accumulated Amortization | -36 | -29 |
Net Intangibles | 73 | 76 |
Finite-Lived Intangible Asset, Useful Life | '18 years | ' |
Trademarks | ' | ' |
Goodwill and Other Intangible Assets | ' | ' |
Carrying Amount | 35 | 33 |
Accumulated Amortization | -16 | -14 |
Net Intangibles | 19 | 19 |
Finite-Lived Intangible Asset, Useful Life | '16 years | ' |
Patents and other | ' | ' |
Goodwill and Other Intangible Assets | ' | ' |
Carrying Amount | 20 | 21 |
Accumulated Amortization | -17 | -17 |
Net Intangibles | $3 | $4 |
Finite-Lived Intangible Asset, Useful Life | '10 years | ' |
Goodwill_and_Other_Intangible_4
Goodwill and Other Intangible Assets (Estimated Amortization Expense) (Details) (USD $) | Dec. 31, 2013 |
In Millions, unless otherwise specified | |
Goodwill and Intangible Assets Disclosure [Abstract] | ' |
2014 | $36 |
2015 | 35 |
2016 | 35 |
2017 | 34 |
2018 | $34 |
Goodwill_and_Other_Intangible_5
Goodwill and Other Intangible Assets (Details Textual) (USD $) | 12 Months Ended | 3 Months Ended | |||||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 |
Proprietary Technology [Member] | Water Infrastructure [Member] | Water Infrastructure [Member] | Water Infrastructure [Member] | Analytics | Trade Names | ||||
Water Infrastructure [Member] | Water Infrastructure [Member] | ||||||||
Goodwill [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Impairment of Intangible Assets (Excluding Goodwill) | ' | ' | ' | ' | ' | ' | ' | ' | $2 |
Goodwill, Percentage of Fair Value in Excess of Carrying Amount | ' | ' | ' | ' | 18.00% | ' | ' | ' | ' |
Goodwill and Other Intangible Assets (Textual) [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Goodwill arising from acquisition | 1,718 | 1,647 | 1,610 | ' | 1,149 | 1,085 | 1,054 | 439 | ' |
Impairment of the indefinite-lived intangibles | ' | 0 | ' | ' | ' | ' | ' | ' | ' |
Finite-Lived Intangible Asset, Useful Life | ' | ' | ' | '18 years | ' | ' | ' | ' | ' |
Amortization expense related to finite-lived intangible assets | $38 | $34 | $31 | ' | ' | ' | ' | ' | ' |
Derivative_Financial_Instrumen2
Derivative Financial Instruments (Details) (USD $) | 12 Months Ended | |||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||
Derivative Financial Instruments | ' | ' | ' | |||
Amount of gain (loss) recognized in OCI on derivative | $1 | [1] | $4 | [1] | $0 | [1] |
Amount of (gain) loss reclassified from OCI into revenue | -2 | [1] | -2 | [1] | 0 | [1] |
Amount of (gain) loss reclassified from OCI into cost of revenue | $2 | [1] | ($1) | [1] | $0 | [1] |
[1] | Effective portion |
Derivative_Financial_Instrumen3
Derivative Financial Instruments (Details Textual) (USD $) | Dec. 31, 2013 |
In Millions, unless otherwise specified | |
Derivative Financial Instruments (Textual) [Abstract] | ' |
Net unrealized gains on cash flow hedges | $2 |
Derivative_Financial_Instrumen4
Derivative Financial Instruments Derivative Financial Instruments - Outstanding Foreign Currency Derivative Instruments (Details) | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 |
In Millions, unless otherwise specified | Buy PLN Sell EUR Forward | Buy PLN Sell EUR Forward | Buy HUF Sell EUR Forward | Buy HUF Sell EUR Forward | Sell Cad Buy SEK Forward | Sell Cad Buy SEK Forward | Sell EUR Buy SEK Forward | Sell EUR Buy SEK Forward |
EUR (€) | PLN | EUR (€) | HUF | CAD | SEK | EUR (€) | SEK | |
Instruments | Instruments | Instruments | Instruments | |||||
Derivative [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
Number of Instruments | 22 | 22 | 11 | 11 | 11 | 11 | 11 | 11 |
Notional Sold | € 24 | ' | € 11 | ' | 137 | ' | € 22 | ' |
Notional Purchased | ' | 103 | ' | 3,186 | ' | 1,233 | ' | 27 |
Derivative_Financial_Instrumen5
Derivative Financial Instruments Derivative Financial Instruments - Fair Value of Foreign Exchange Contracts (Details) (Designated as Hedging Instrument, Other Assets, USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Designated as Hedging Instrument | Other Assets | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Other current assets | $1,000,000 | $0 |
Accrued_and_Other_Current_Liab2
Accrued and Other Current Liabilities (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Accrued and Other Current Liabilities | ' | ' |
Compensation and other employee-benefits | $215 | $201 |
Customer-related liabilities | 63 | 60 |
Product Warranty Accrual, Current | 36 | 40 |
Accrued income taxes | 45 | 50 |
Deferred income tax liability | 4 | 0 |
Other accrued liabilities | 120 | 92 |
Total accrued and other current liabilities | $479 | $443 |
Credit_Facilities_and_LongTerm2
Credit Facilities and Long-Term Debt (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | ||
In Millions, unless otherwise specified | ||||
Credit Facilities and Long-Term Debt : | ' | ' | ||
Short-term borrowings and current maturities of long-term debt | $42 | $6 | ||
Unamortized discount | -1 | [1] | -1 | [1] |
Long-term debt | 1,199 | 1,199 | ||
Total debt | 1,241 | 1,205 | ||
Senior Notes Due 2016, 3.550% | ' | ' | ||
Credit Facilities and Long-Term Debt : | ' | ' | ||
Senior Notes Due | 600 | [2] | 600 | [2] |
Senior Notes Due 2021, 4.875% | ' | ' | ||
Credit Facilities and Long-Term Debt : | ' | ' | ||
Senior Notes Due | $600 | [2] | $600 | [2] |
[1] | The unamortized discount is recognized as a reduction in the carrying value of the Senior Notes in the Consolidated Balance Sheets and is being amortized to interest expense in our Consolidated and Combined Income Statements over the expected remaining terms of the Senior Notes. | |||
[2] | The fair value of our Senior Notes (as defined below) 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 2016 (as defined below) was $635 million and $639 million as of December 31, 2013 and 2012, respectively. The fair value of our Senior Notes due 2021 (as defined below) was $629 million and $680 million as of December 31, 2013 and 2012, respectively. |
Credit_Facilities_and_LongTerm3
Credit Facilities and Long-Term Debt (Details Textual) | 12 Months Ended | 12 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Sep. 20, 2011 | Sep. 20, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | |
USD ($) | USD ($) | USD ($) | Letter of Credit | Revolving Credit Facility | Risk Sharing Finance Facility Agreement [Member] | Risk Sharing Finance Facility Agreement [Member] | Revolving Credit Facility and Senior Notes [Member] | Revolving Credit Facility and Senior Notes [Member] | Senior Notes | Senior Notes Due 2016, 3.550% | Senior Notes Due 2021, 4.875% | Level 2 | Level 2 | Level 2 | Level 2 | |
USD ($) | USD ($) | USD ($) | EUR (€) | USD ($) | USD ($) | USD ($) | USD ($) | Senior Notes Due 2016, 3.550% | Senior Notes Due 2016, 3.550% | Senior Notes Due 2021, 4.875% | Senior Notes Due 2021, 4.875% | |||||
USD ($) | USD ($) | USD ($) | USD ($) | |||||||||||||
Credit Facilities and Long-Term Debt [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fair value of senior notes due | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $635,000,000 | $639,000,000 | $629,000,000 | $680,000,000 |
Deferred financing costs | ' | ' | ' | ' | ' | ' | ' | 7,000,000 | 9,000,000 | ' | ' | ' | ' | ' | ' | ' |
Deferred financing costs expected amortization 2014 | ' | ' | ' | ' | ' | ' | ' | 2,000,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Deferred financing costs expected amortization 2015 | ' | ' | ' | ' | ' | ' | ' | 2,000,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Deferred financing costs expected amortization 2016 | ' | ' | ' | ' | ' | ' | ' | 1,000,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Deferred financing costs expected amortization 2017 | ' | ' | ' | ' | ' | ' | ' | 1,000,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Deferred financing costs expected amortization 2018 (less than $1million) | ' | ' | ' | ' | ' | ' | ' | 1,000,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Deferred financing costs expected amortzation thereafter | ' | ' | ' | ' | ' | ' | ' | 1,000,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Interest on notes due | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3.55% | 4.88% | ' | ' | ' | ' |
Senior notes issued | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 600,000,000 | 600,000,000 | ' | ' | ' | ' |
Gross proceeds from notes issue | 0 | 0 | 1,198,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Redemption price percentage | ' | ' | ' | ' | ' | ' | ' | ' | ' | 101.00% | ' | ' | ' | ' | ' | ' |
Debt instrument aggregate principal amount | ' | ' | ' | 100,000,000 | 600,000,000 | 165,000,000 | 120,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest rate per annum, effective rate | ' | ' | ' | ' | 0.50% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maximum leverage ratio | ' | ' | ' | ' | 3.5 | 3.5 | 3.5 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Line of Credit Facility, Amount Outstanding | ' | ' | ' | ' | ' | $38,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Postretirement_Benefit_Plans_D
Postretirement Benefit Plans (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Compensation and Retirement Disclosure [Abstract] | ' | ' | ' |
Employer Contribution to defined benefit Plan | $35 | $30 | $28 |
Postretirement_Benefit_Plans_D1
Postretirement Benefit Plans (Details 1) (USD $) | Dec. 31, 2013 | Oct. 14, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
In Millions, unless otherwise specified | Pension | Pension | Other Benefits | Other Benefits | Other Benefits | |||
Defined Benefit Plan Disclosure | ' | ' | ' | ' | ' | ' | ' | ' |
Fair value of plan assets | $524 | ' | $477 | $524 | $477 | $0 | $0 | ' |
Projected benefit obligation | -840 | ' | -855 | -777 | -790 | -63 | -65 | -46 |
Funded (unfunded) status of the plans | -316 | ' | -378 | -253 | -313 | -63 | -65 | ' |
Amounts recognized in the balance sheet | ' | ' | ' | ' | ' | ' | ' | ' |
Other non-current assets | 46 | ' | 36 | 46 | 36 | 0 | 0 | ' |
Accrued and other current liabilities | -14 | ' | -14 | -11 | -11 | -3 | -3 | ' |
Accrued postretirement benefits | -348 | ' | -400 | -288 | -338 | -60 | -62 | ' |
Net amount recognized | -316 | ' | -378 | -253 | -313 | -63 | -65 | ' |
Accumulated other comprehensive income: | ' | ' | ' | ' | ' | ' | ' | ' |
Net actuarial losses | -248 | ' | -301 | -228 | -277 | -20 | -24 | ' |
Prior service cost | 0 | -4 | -5 | 0 | -5 | 0 | 0 | ' |
Total | ($248) | ' | ($306) | ($228) | ($282) | ($20) | ($24) | ' |
Postretirement_Benefit_Plans_D2
Postretirement Benefit Plans (Details 2) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Change in benefit obligation: | ' | ' | ' |
Benefit obligation at end of year | $840 | $855 | ' |
Change in plan assets: | ' | ' | ' |
Ending Balance | 524 | 477 | ' |
Funded (unfunded) status of the plans | -316 | -378 | ' |
Domestic defined benefit pension plans | ' | ' | ' |
Defined Benefit Plan Disclosure | ' | ' | ' |
Defined Benefit Plan, Net Increase (Decrease) in Plan Assets related to Plan Amendments, Settlements and Curtailments | 0 | 0 | ' |
Change in benefit obligation: | ' | ' | ' |
Benefit obligation at beginning of year | 83 | 71 | ' |
Service cost | 3 | 3 | 2 |
Interest cost | 3 | 3 | 3 |
Benefits paid | -3 | -3 | ' |
Actuarial loss (gain) | -8 | 9 | ' |
Defined Benefit Plan, Net Increase (Decrease) in Obligation related to Plan Amendments, Settlements and Curtailments | -4 | 0 | ' |
Foreign currency translation/other | 0 | 0 | ' |
Benefit obligation at end of year | 74 | 83 | 71 |
Change in plan assets: | ' | ' | ' |
Beginning Balance | 51 | 44 | ' |
Employer contributions | 4 | 5 | ' |
Actual return on plan assets | 6 | 5 | ' |
Benefits paid | -3 | -3 | ' |
Foreign currency translation/Other | 0 | 0 | ' |
Ending Balance | 58 | 51 | 44 |
Funded (unfunded) status of the plans | -16 | -32 | ' |
International defined benefit pension plans | ' | ' | ' |
Defined Benefit Plan Disclosure | ' | ' | ' |
Defined Benefit Plan, Net Increase (Decrease) in Plan Assets related to Plan Amendments, Settlements and Curtailments | -1 | -1 | ' |
Change in benefit obligation: | ' | ' | ' |
Benefit obligation at beginning of year | 707 | 599 | ' |
Service cost | 14 | 11 | 6 |
Interest cost | 28 | 29 | 12 |
Benefits paid | -32 | -33 | ' |
Actuarial loss (gain) | -9 | 69 | ' |
Defined Benefit Plan, Net Increase (Decrease) in Obligation related to Plan Amendments, Settlements and Curtailments | -2 | 0 | ' |
Foreign currency translation/other | -3 | 32 | ' |
Benefit obligation at end of year | 703 | 707 | 599 |
Change in plan assets: | ' | ' | ' |
Beginning Balance | 426 | 373 | ' |
Employer contributions | 36 | 38 | ' |
Actual return on plan assets | 42 | 37 | ' |
Benefits paid | -32 | -33 | ' |
Foreign currency translation/Other | -5 | 12 | ' |
Ending Balance | 466 | 426 | 373 |
Funded (unfunded) status of the plans | ($237) | ($281) | ' |
Postretirement_Benefit_Plans_D3
Postretirement Benefit Plans (Details 3) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Defined Benefit Plan Disclosure | ' | ' | ' |
Benefit obligation at end of year | $840 | $855 | ' |
Other postretirement benefit plans | ' | ' | ' |
Defined Benefit Plan Disclosure | ' | ' | ' |
Benefit obligation at beginning of year | 65 | 46 | ' |
Service cost | 1 | 1 | 1 |
Interest cost | 3 | 3 | 1 |
Actuarial loss | -2 | 15 | ' |
Benefits paid | -3 | -3 | ' |
Other | -1 | 3 | ' |
Benefit obligation at end of year | $63 | $65 | $46 |
Postretirement_Benefit_Plans_D4
Postretirement Benefit Plans (Details 4) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Compensation and Retirement Disclosure [Abstract] | ' | ' |
Projected benefit obligation | $404 | $516 |
Accumulated benefit obligation | 375 | 469 |
Fair value of plan assets | $106 | $171 |
Postretirement_Benefit_Plans_D5
Postretirement Benefit Plans (Details 5) (USD $) | 12 Months Ended | |||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||
Other changes in plan assets and benefit obligations recognized in other comprehensive income | ' | ' | ' | |||
Net loss | $34 | ($84) | ($74) | |||
Prior service cost | -4 | 1 | 0 | |||
Amortization of prior service cost | -1 | -1 | -1 | |||
Settlement | 0 | -2 | 0 | |||
Total recognized in comprehensive income | 2 | 18 | 5 | |||
Domestic defined benefit pension plans | ' | ' | ' | |||
Net periodic benefit cost: | ' | ' | ' | |||
Service cost | 3 | 3 | 2 | |||
Interest cost | 3 | 3 | 3 | |||
Expected return on plan assets | -4 | -4 | -4 | |||
Amortization of prior service cost | 1 | 1 | 1 | |||
Amortization of net actuarial loss | 2 | 2 | 0 | |||
Net periodic benefit cost | 5 | 5 | 2 | |||
Other changes in plan assets and benefit obligations recognized in other comprehensive income | ' | ' | ' | |||
Net loss | 11 | -8 | -14 | |||
Prior service cost | -4 | 1 | 0 | |||
Amortization of prior service cost | -1 | -1 | -1 | |||
Amortization of net actuarial loss | -2 | -2 | 0 | |||
Change recognized in other comprehensive income | -18 | 6 | 13 | |||
International defined benefit pension plans | ' | ' | ' | |||
Net periodic benefit cost: | ' | ' | ' | |||
Service cost | 14 | 11 | 6 | |||
Interest cost | 28 | 29 | 12 | |||
Expected return on plan assets | -31 | -30 | -6 | |||
Amortization of net actuarial loss | 13 | 8 | 2 | |||
Settlement | 0 | -2 | -1 | |||
Net periodic benefit cost | 24 | 20 | 15 | |||
Other changes in plan assets and benefit obligations recognized in other comprehensive income | ' | ' | ' | |||
Net loss | 21 | -62 | -57 | |||
Amortization of net actuarial loss | -13 | -8 | -2 | |||
Settlement | 0 | -2 | 0 | |||
Foreign Exchange | -2 | 8 | 0 | |||
Change recognized in other comprehensive income | -36 | [1] | 60 | [1] | 55 | [1] |
Adjustment of other comprehensive income due to curtailment of the defined benefit plan, before tax | ' | ' | 97 | |||
Adjustment of other comprehensive income due to curtailment of the defined benefit plan, net of tax | ' | ' | 68 | |||
Defined benefit pension plans | ' | ' | ' | |||
Net periodic benefit cost: | ' | ' | ' | |||
Net periodic benefit cost | 29 | 25 | 17 | |||
Other changes in plan assets and benefit obligations recognized in other comprehensive income | ' | ' | ' | |||
Change recognized in other comprehensive income | -54 | 66 | 68 | |||
Total recognized in comprehensive income | -25 | 91 | 85 | |||
Other postretirement benefit plans | ' | ' | ' | |||
Net periodic benefit cost: | ' | ' | ' | |||
Service cost | 1 | 1 | 1 | |||
Interest cost | 3 | 3 | 1 | |||
Amortization of net actuarial loss | 2 | 1 | 0 | |||
Net periodic benefit cost | 6 | 5 | 2 | |||
Other changes in plan assets and benefit obligations recognized in other comprehensive income | ' | ' | ' | |||
Net loss | 2 | -14 | -3 | |||
Amortization of net actuarial loss | -2 | -1 | 0 | |||
Change recognized in other comprehensive loss | -4 | [2] | 13 | [2] | 3 | [2] |
Adjustment of other comprehensive income due to curtailment of the defined benefit plan, before tax | ' | ' | 8 | |||
Adjustment of other comprehensive income due to curtailment of the defined benefit plan, net of tax | ' | ' | $5 | |||
[1] | The 2011 amount excludes $97 million ($68 million net of tax) of deferred losses assumed upon Spin-off. | |||||
[2] | The 2011 amount excludes $8 million ($5 million net of tax) of deferred losses assumed upon Spin-off. |
Postretirement_Benefit_Plans_P
Postretirement Benefit Plans Postretirement Benefit Plans (Details 6) (Other Benefits, USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Other Benefits | ' | ' | ' |
Defined Benefit Plan Disclosure | ' | ' | ' |
Service cost | $1 | $1 | $1 |
Interest cost | 3 | 3 | 1 |
Amortization of net actuarial loss | 2 | 1 | 0 |
Net periodic benefit cost | $6 | $5 | $2 |
Postretirement_Benefit_Plans_P1
Postretirement Benefit Plans Postretirement Benefit Plans (Details 7) (USD $) | 12 Months Ended | |||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||
Defined Benefit Plan Disclosure | ' | ' | ' | |||
Net loss | ($34) | $84 | $74 | |||
Total recognized in comprehensive income | 2 | 18 | 5 | |||
Other Benefits | ' | ' | ' | |||
Defined Benefit Plan Disclosure | ' | ' | ' | |||
Net loss | -2 | 14 | 3 | |||
Amortization of net actuarial loss | -2 | -1 | 0 | |||
Change recognized in other comprehensive loss | -4 | [1] | 13 | [1] | 3 | [1] |
Adjustment of other comprehensive income due to curtailment of the defined benefit plan, before tax | ' | ' | 8 | |||
Adjustment of other comprehensive income due to curtailment of the defined benefit plan, net of tax | ' | ' | $5 | |||
[1] | The 2011 amount excludes $8 million ($5 million net of tax) of deferred losses assumed upon Spin-off. |
Postretirement_Benefit_Plans_D6
Postretirement Benefit Plans (Details 8) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Net Periodic Benefit Cost Assumptions | ' | ' | ' |
Expected long-term return on plan assets | 7.40% | 7.42% | 7.52% |
United States | ' | ' | ' |
Benefit Obligation Assumptions | ' | ' | ' |
Discount rate | 4.79% | 4.13% | 4.87% |
Rate of future compensation increase | ' | 4.50% | 4.50% |
Net Periodic Benefit Cost Assumptions | ' | ' | ' |
Discount rate | 4.13% | 4.87% | 5.83% |
Expected long-term return on plan assets | 8.00% | 8.00% | 9.00% |
Rate of future compensation increase | 4.50% | 4.50% | 4.50% |
International | ' | ' | ' |
Benefit Obligation Assumptions | ' | ' | ' |
Discount rate | 4.23% | 4.04% | 4.76% |
Rate of future compensation increase | 3.48% | 3.50% | 3.58% |
Net Periodic Benefit Cost Assumptions | ' | ' | ' |
Discount rate | 4.04% | 4.76% | 5.53% |
Expected long-term return on plan assets | 7.33% | 7.35% | 7.34% |
Rate of future compensation increase | 3.50% | 3.58% | 3.37% |
Postretirement_Benefit_Plans_D7
Postretirement Benefit Plans (Details 9) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Compensation and Retirement Disclosure [Abstract] | ' | ' | ' |
Expected long-term return on plan assets | 7.40% | 7.42% | 7.52% |
Actual rate of return on plan assets | 10.17% | 10.09% | -1.40% |
Postretirement_Benefit_Plans_D8
Postretirement Benefit Plans (Details 10) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Equity securities | ' | ' |
Defined Benefit Plan Disclosure | ' | ' |
Actual allocation of plan assets | 31.70% | 29.20% |
Minimum target allocation | 20.00% | ' |
Maximum target allocation | 40.00% | ' |
Fixed income | ' | ' |
Defined Benefit Plan Disclosure | ' | ' |
Actual allocation of plan assets | 24.70% | 26.40% |
Minimum target allocation | 20.00% | ' |
Maximum target allocation | 50.00% | ' |
Hedge funds | ' | ' |
Defined Benefit Plan Disclosure | ' | ' |
Actual allocation of plan assets | 23.50% | 29.40% |
Minimum target allocation | 20.00% | ' |
Maximum target allocation | 60.00% | ' |
Private equity | ' | ' |
Defined Benefit Plan Disclosure | ' | ' |
Actual allocation of plan assets | 4.20% | 5.10% |
Minimum target allocation | 0.00% | ' |
Maximum target allocation | 15.00% | ' |
Cash and other | ' | ' |
Defined Benefit Plan Disclosure | ' | ' |
Actual allocation of plan assets | 15.90% | 9.90% |
Minimum target allocation | 0.00% | ' |
Maximum target allocation | 30.00% | ' |
Postretirement_Benefit_Plans_D9
Postretirement Benefit Plans (Details 11) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
In Millions, unless otherwise specified | |||
Defined Benefit Plan Disclosure | ' | ' | ' |
Fair value of plan assets | $524 | $477 | ' |
Level 1 | ' | ' | ' |
Defined Benefit Plan Disclosure | ' | ' | ' |
Fair value of plan assets | 260 | 225 | ' |
Level 2 | ' | ' | ' |
Defined Benefit Plan Disclosure | ' | ' | ' |
Fair value of plan assets | 195 | 192 | ' |
Level 3 | ' | ' | ' |
Defined Benefit Plan Disclosure | ' | ' | ' |
Fair value of plan assets | 69 | 60 | 67 |
Global stock funds/securities | ' | ' | ' |
Defined Benefit Plan Disclosure | ' | ' | ' |
Fair value of plan assets | 123 | 93 | ' |
Global stock funds/securities | Level 1 | ' | ' | ' |
Defined Benefit Plan Disclosure | ' | ' | ' |
Fair value of plan assets | 108 | 79 | ' |
Global stock funds/securities | Level 2 | ' | ' | ' |
Defined Benefit Plan Disclosure | ' | ' | ' |
Fair value of plan assets | 11 | 11 | ' |
Global stock funds/securities | Level 3 | ' | ' | ' |
Defined Benefit Plan Disclosure | ' | ' | ' |
Fair value of plan assets | 4 | 3 | ' |
Index funds | ' | ' | ' |
Defined Benefit Plan Disclosure | ' | ' | ' |
Fair value of plan assets | 40 | 46 | ' |
Index funds | Level 1 | ' | ' | ' |
Defined Benefit Plan Disclosure | ' | ' | ' |
Fair value of plan assets | 3 | 3 | ' |
Index funds | Level 2 | ' | ' | ' |
Defined Benefit Plan Disclosure | ' | ' | ' |
Fair value of plan assets | 37 | 43 | ' |
Index funds | Level 3 | ' | ' | ' |
Defined Benefit Plan Disclosure | ' | ' | ' |
Fair value of plan assets | 0 | 0 | ' |
Emerging markets funds | ' | ' | ' |
Defined Benefit Plan Disclosure | ' | ' | ' |
Fair value of plan assets | 3 | 0 | ' |
Emerging markets funds | Level 1 | ' | ' | ' |
Defined Benefit Plan Disclosure | ' | ' | ' |
Fair value of plan assets | 3 | 0 | ' |
Emerging markets funds | Level 2 | ' | ' | ' |
Defined Benefit Plan Disclosure | ' | ' | ' |
Fair value of plan assets | 0 | 0 | ' |
Emerging markets funds | Level 3 | ' | ' | ' |
Defined Benefit Plan Disclosure | ' | ' | ' |
Fair value of plan assets | 0 | 0 | ' |
Corporate bonds | ' | ' | ' |
Defined Benefit Plan Disclosure | ' | ' | ' |
Fair value of plan assets | 95 | 100 | ' |
Corporate bonds | Level 1 | ' | ' | ' |
Defined Benefit Plan Disclosure | ' | ' | ' |
Fair value of plan assets | 40 | 32 | ' |
Corporate bonds | Level 2 | ' | ' | ' |
Defined Benefit Plan Disclosure | ' | ' | ' |
Fair value of plan assets | 48 | 59 | ' |
Corporate bonds | Level 3 | ' | ' | ' |
Defined Benefit Plan Disclosure | ' | ' | ' |
Fair value of plan assets | 7 | 9 | ' |
Government bonds | ' | ' | ' |
Defined Benefit Plan Disclosure | ' | ' | ' |
Fair value of plan assets | 35 | 26 | ' |
Government bonds | Level 1 | ' | ' | ' |
Defined Benefit Plan Disclosure | ' | ' | ' |
Fair value of plan assets | 35 | 23 | ' |
Government bonds | Level 2 | ' | ' | ' |
Defined Benefit Plan Disclosure | ' | ' | ' |
Fair value of plan assets | 0 | 3 | ' |
Government bonds | Level 3 | ' | ' | ' |
Defined Benefit Plan Disclosure | ' | ' | ' |
Fair value of plan assets | 0 | 0 | ' |
Absolute return | ' | ' | ' |
Defined Benefit Plan Disclosure | ' | ' | ' |
Fair value of plan assets | 123 | 140 | ' |
Absolute return | Level 1 | ' | ' | ' |
Defined Benefit Plan Disclosure | ' | ' | ' |
Fair value of plan assets | 9 | 44 | ' |
Absolute return | Level 2 | ' | ' | ' |
Defined Benefit Plan Disclosure | ' | ' | ' |
Fair value of plan assets | 95 | 76 | ' |
Absolute return | Level 3 | ' | ' | ' |
Defined Benefit Plan Disclosure | ' | ' | ' |
Fair value of plan assets | 19 | 20 | 37 |
Private equity | ' | ' | ' |
Defined Benefit Plan Disclosure | ' | ' | ' |
Fair value of plan assets | 22 | 24 | ' |
Private equity | Level 1 | ' | ' | ' |
Defined Benefit Plan Disclosure | ' | ' | ' |
Fair value of plan assets | 0 | 0 | ' |
Private equity | Level 2 | ' | ' | ' |
Defined Benefit Plan Disclosure | ' | ' | ' |
Fair value of plan assets | 0 | 0 | ' |
Private equity | Level 3 | ' | ' | ' |
Defined Benefit Plan Disclosure | ' | ' | ' |
Fair value of plan assets | 22 | 24 | 24 |
Insurance contracts and other | ' | ' | ' |
Defined Benefit Plan Disclosure | ' | ' | ' |
Fair value of plan assets | 83 | 48 | ' |
Insurance contracts and other | Level 1 | ' | ' | ' |
Defined Benefit Plan Disclosure | ' | ' | ' |
Fair value of plan assets | 62 | 44 | ' |
Insurance contracts and other | Level 2 | ' | ' | ' |
Defined Benefit Plan Disclosure | ' | ' | ' |
Fair value of plan assets | 4 | 0 | ' |
Insurance contracts and other | Level 3 | ' | ' | ' |
Defined Benefit Plan Disclosure | ' | ' | ' |
Fair value of plan assets | $17 | $4 | ' |
Recovered_Sheet1
Postretirement Benefit Plans (Details 12) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ' | ' |
Ending Balance | $524 | $477 |
Level 3 | ' | ' |
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ' | ' |
Beginning Balance | 60 | 67 |
Purchases, sales, settlements | 15 | 15 |
Unrealized gains/(losses) | -4 | 3 |
Realized gains | 1 | 2 |
Net transfers | -12 | 25 |
Impact on currency | 1 | -2 |
Ending Balance | 69 | 60 |
Equity securities | Level 3 | ' | ' |
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ' | ' |
Beginning Balance | 3 | 2 |
Purchases, sales, settlements | 0 | 0 |
Unrealized gains/(losses) | 0 | 0 |
Realized gains | 1 | 1 |
Net transfers | 0 | 0 |
Impact on currency | 0 | 0 |
Ending Balance | 4 | 3 |
Fixed income | Level 3 | ' | ' |
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ' | ' |
Beginning Balance | 9 | 0 |
Purchases, sales, settlements | -3 | 8 |
Unrealized gains/(losses) | -1 | 1 |
Realized gains | 0 | 0 |
Net transfers | 0 | 0 |
Impact on currency | 0 | 0 |
Ending Balance | 7 | 9 |
Absolute return | ' | ' |
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ' | ' |
Ending Balance | 123 | 140 |
Absolute return | Level 3 | ' | ' |
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ' | ' |
Beginning Balance | 20 | 37 |
Purchases, sales, settlements | 10 | 8 |
Unrealized gains/(losses) | -1 | 1 |
Realized gains | 0 | 1 |
Net transfers | -12 | 25 |
Impact on currency | 0 | -2 |
Ending Balance | 19 | 20 |
Private equity | ' | ' |
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ' | ' |
Ending Balance | 22 | 24 |
Private equity | Level 3 | ' | ' |
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ' | ' |
Beginning Balance | 24 | 24 |
Purchases, sales, settlements | -4 | -1 |
Unrealized gains/(losses) | -1 | 1 |
Realized gains | 0 | 0 |
Net transfers | 0 | 0 |
Impact on currency | 1 | 0 |
Ending Balance | 22 | 24 |
Other | Level 3 | ' | ' |
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ' | ' |
Beginning Balance | 4 | 4 |
Purchases, sales, settlements | 12 | 0 |
Unrealized gains/(losses) | -1 | 0 |
Realized gains | 0 | 0 |
Net transfers | 0 | 0 |
Impact on currency | 0 | 0 |
Ending Balance | $17 | $4 |
Recovered_Sheet2
Postretirement Benefit Plans (Details 13) (USD $) | Dec. 31, 2013 |
In Millions, unless otherwise specified | |
Pension | ' |
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block | ' |
2014 | $35 |
2015 | 36 |
2016 | 37 |
2017 | 38 |
2018 | 39 |
Years 2019-2023 | 222 |
Other Benefits | ' |
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block | ' |
2014 | 3 |
2015 | 3 |
2016 | 3 |
2017 | 3 |
2018 | 3 |
Years 2019-2023 | $20 |
Recovered_Sheet3
Postretirement Benefit Plans (Details Textual) (USD $) | 12 Months Ended | 12 Months Ended | 12 Months Ended | 3 Months Ended | 12 Months Ended | 3 Months Ended | 12 Months Ended | 12 Months Ended | 12 Months Ended | |||||||||||||||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Oct. 14, 2013 | Oct. 31, 2011 | Dec. 31, 2011 | Dec. 31, 2011 | Oct. 31, 2011 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2011 | Jun. 30, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 |
investment | Xylem U.S. Defined Benefit Pension Plans for Hourly Employees | ITT Spin Off Defined Contibution Plans | ITT Spin Off Defined Contibution Plans | ITT Salaried Retirement Plan | International defined benefit pension plans | International defined benefit pension plans | International defined benefit pension plans | International defined benefit pension plans | International defined benefit pension plans | ITT Industries General Pension Plan | ITT Industries General Pension Plan | ITT Industries General Pension Plan | Pension | Pension | Other Benefits | Other Benefits | Other Benefits | Minimum | Maximum | |||||
Canada | Canada | |||||||||||||||||||||||
plan | ||||||||||||||||||||||||
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Defined Benefit Plan, Percentage of Assets Owned by Plan | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 58.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Assets transferred to defined contribution plan | ' | ' | ' | ' | ' | ' | $144 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Assets received from Spin-off | ' | ' | ' | ' | ' | 45 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of investment options | ' | ' | ' | ' | 29 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of years eligible employees can receive transition credits | '5 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Minimum age plus years of service to be eligible to receive transition credits | 60 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Liability for transition credits | 3 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Employer matching contribution | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3.00% | 7.00% |
Number of shares held by employees in Employee Stock Ownership Plan | 453,000 | 528 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Pension and other postretirement benefit costs | ' | ' | 49 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fair value of plan assets | 524 | 477 | ' | ' | ' | ' | ' | 337 | ' | 466 | 426 | 373 | ' | ' | ' | ' | ' | 524 | 477 | 0 | ' | 0 | ' | ' |
Projected benefit obligation | 840 | 855 | ' | ' | ' | ' | ' | 400 | ' | 703 | 707 | 599 | ' | ' | ' | ' | ' | 777 | 790 | 65 | 46 | 63 | ' | ' |
Other comprehensive (loss), before tax | 74 | -30 | -132 | ' | ' | ' | 105 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Comprehensive income, net of tax | 280 | 290 | 161 | ' | ' | ' | 73 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Charge resulting from curtailment or settlement recorded | 0 | 2 | 0 | ' | ' | ' | ' | ' | 1 | 0 | 2 | 0 | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of international pension plans | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Adjustment of other comprehensive income due to curtailment of the defined benefit plan, before tax | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 97 | ' | ' | ' | 9 | ' | ' | ' | ' | 8 | ' | ' | ' |
Adjustment of other comprehensive income due to curtailment of the defined benefit plan, net of tax | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 68 | ' | ' | ' | 6 | ' | ' | ' | ' | 5 | ' | ' | ' |
Discount rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5.75% | 6.00% | ' | ' | ' | ' | ' | ' | ' |
Weighted Average Remaining Lives of Plan Participants | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '25 years | ' | '27 years | ' | ' | ' | ' | ' | ' | ' | ' |
Prior service cost expected to be recognized next fiscal year | 1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net actuarial losses expected to be recognized next fiscal year | -11 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net actuarial losses, net of tax | 8 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Accumulated benefit obligation | 741 | 740 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Expected long-term return on plan assets | 7.38% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Assumed rate of health care costs increases, next fiscal year | 7.19% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Ultimate assumed average annual health care cost increases | 5.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Description of health care cost assumptions | 'The assumed rate of future increases in the per capita cost of health care (the health care trend rate) is 7.19% for 2014, decreasing ratably to 5.00% in 2020. | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Year that assumed average health care cost increase is reached | '2020 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Effect of increase in health care trends by one percent per year on annual service interest (less than $1 million) | 1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Effect of decrease in health care trends by one percent per year on annual service interest (less than $1 million) | 1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Effect of increase in health care trends by one percent per year on benefit obligation | 8 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Effect of decrease in health care trends by one percent per year on benefit obligation | 8 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Employer Contribution to defined benefit Plan | ' | ' | ' | ' | ' | ' | ' | ' | ' | 36 | 38 | ' | ' | ' | ' | ' | ' | 43 | ' | 46 | ' | ' | ' | ' |
Estimated pension plan contributions during next fiscal year | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 40 | 50 |
Estimated pension plan contributions during the next fiscal quarter | 11 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Prior service cost | $0 | $5 | ' | $4 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0 | $5 | $0 | ' | $0 | ' | ' |
Defined Benefit Plan, Amortization Period of Prior Service Cost (Credit) | '11 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
StockBased_Compensation_Detail
Stock-Based Compensation (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Share-based compensation expense | ' | ' | ' |
Allocated Share-based Compensation Expense | $27 | $22 | $13 |
StockBased_Compensation_Detail1
Stock-Based Compensation (Details 1) (USD $) | 12 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ' | ' |
Stock Options Outstanding at December 31, 2011 | 4,083 | ' |
Stock options, Granted | 817 | ' |
Stock options, Exercised | -850 | ' |
Stock options, Forfeited | -546 | ' |
Stock Options Outstanding at December 31, 2012 | 3,504 | 4,083 |
Options exercisable, Shares | 1,994 | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | ' | ' |
Weighted Average Exercise Price, Outstanding at December 31, 2011 | $26.46 | ' |
Weighted Average Exercise Price / Share, Granted | $27.43 | ' |
Weighted Average Exercise Price / Share, Exercised | $25.01 | ' |
Weighted Average Exercise Price / Share, Forfeited | $27.86 | ' |
Weighted Average Exercise Price, Outstanding at December 31, 2012 | $26.80 | $26.46 |
Options exercisable, Weighted Average Exercise Price | $26.71 | ' |
Weighted Average Remaining Contractual Term, Outstanding | '6 years 4 months 24 days | '6 years 4 months 24 days |
Weighted Average Remaining Contractual Term, Options Granted | '10 years | ' |
Weighted Average Remaining Contractual Term, Options Exercised | '3 years 4 months 24 days | ' |
Weighted Average Remaining Contractual Term, Options Forfeited | '6 years 1 month 6 days | ' |
Weighed average remaining contractual term, Options exercisable | '4 years 10 months 24 days | ' |
StockBased_Compensation_Detail2
Stock-Based Compensation (Details 2) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Weighted-average assumptions for annual March 2012 grants | ' | ' | ' |
Dividend yield | 1.69% | 1.52% | 1.51% |
Volatility | 31.10% | 33.40% | 36.30% |
Risk-free interest rate | 1.28% | 1.42% | 1.50% |
Expected term (in years) | '6 years 7 months 13 days | '7 years | '6 years 4 months 24 days |
Weighted-average fair value / share | $7.58 | $8,100,000 | $7,880,000 |
StockBased_Compensation_Detail3
Stock-Based Compensation (Details 3) (Restricted Stock, USD $) | 12 Months Ended |
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2013 |
Restricted Stock | ' |
Summary of restricted stock activity | ' |
Outstanding Shares at January 1, 2013 | 1,588 |
Restricted Stock, Granted | 568 |
Vested | -691 |
Forfeited | -190 |
Outstanding Shares at December 31, 2013 | 1,275 |
Weighted Average Grant Date Fair Value, Outstanding at January 1, 2013 | $26.92 |
Weighted Average Grant Date Fair Value, Granted | $28.18 |
Weighted Average Grant Date Fair Value, Vested | $26.44 |
Weighted Average Grant Date Fair Value, Forfeited | $28.84 |
Weighted Average Grant Date Fair Value, Outstanding at Decemeber 31, 2013 | $27.67 |
StockBased_Compensation_Detail4
Stock-Based Compensation (Details 4) (Performance Based Shares, USD $) | 12 Months Ended |
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2013 |
Performance Based Shares | ' |
Summary of Performance-based shares activity | ' |
Outstanding Shares at January 1, 2013 | 0 |
Performance-based Shares, Granted | 119 |
Vested | 0 |
Forfeited | -67 |
Outstanding Shares at December 31, 2013 | 52 |
Weighted Average Grant Date Fair Value, Outstanding at January 1, 2013 | $0 |
Weighted Average Grant Date Fair Value, Granted | $27.49 |
Weighted Average Grant Date Fair Value, Vested | $0 |
Weighted Average Grant Date Fair Value, Forfeited | $27.49 |
Weighted Average Grant Date Fair Value, Outstanding at Decemeber 31, 2013 | $27.49 |
StockBased_Compensation_Detail5
Stock-Based Compensation (Details Textual) (USD $) | 12 Months Ended | 12 Months Ended | ||||||
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Oct. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 |
2011 Omnibus Incentive Plan | 2011 Omnibus Incentive Plan | Stock Options | Restricted Stock | Performance Based Shares | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ' | ' | ' | ' | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Number of Shares | 1.5 | 2.2 | ' | ' | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Outstanding, Weighted Average Grant Date Fair Value | $26.90 | $27.14 | ' | ' | ' | ' | ' | ' |
Share-based Compensation by Share Based Payment Award, Options, Nonvested, Outstanding, Aggregate Intrinsic Value | $27 | ' | ' | ' | ' | ' | ' | ' |
Requisite service periods | '3 years | ' | ' | '3 years | ' | ' | ' | ' |
Shares initially available for awards | ' | ' | ' | ' | 18 | ' | ' | ' |
Shares available for future grant | ' | ' | ' | 10 | ' | ' | ' | ' |
Unamortized compensation expense | ' | ' | ' | ' | ' | 6 | 17 | 1 |
Weighted average period | ' | ' | ' | ' | ' | '1 year 6 months | '1 year 8 months 12 days | '2 years 2 months 12 days |
Amount of cash received from the exercise of stock options | 22 | ' | ' | ' | ' | ' | ' | ' |
Tax benefit from the exercise of stock options | 8 | ' | ' | ' | ' | ' | ' | ' |
Share-based compensation | 27 | 22 | 13 | ' | ' | ' | ' | ' |
Share-based Compensation, Costs Related to Restructuring and Asset Impairment Charges (Less than $1 million) | 1 | ' | ' | ' | ' | ' | ' | ' |
Aggregate intrinsic value of outstanding stock options | 28 | ' | ' | ' | ' | ' | ' | ' |
Aggregate intrinsic value of exercisable stock options | 16 | ' | ' | ' | ' | ' | ' | ' |
Total intrinsic value of options exercised | $7 | ' | ' | ' | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Target Payout Percentage | 100.00% | ' | ' | ' | ' | ' | ' | ' |
Accumulated_Other_Comprehensiv2
Accumulated Other Comprehensive Income (Loss) (Details) (USD $) | 10 Months Ended | 12 Months Ended | 12 Months Ended | ||||||||||||||||||||||||||||||||||
In Millions, unless otherwise specified | Oct. 30, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2010 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | |||
Foreign Currency Translation | Foreign Currency Translation | Foreign Currency Translation | Postretirement Benefit Plans | Postretirement Benefit Plans | Postretirement Benefit Plans | Derivative Instruments | Derivative Instruments | Derivative Instruments | Cost of Revenue | Cost of Revenue | Cost of Revenue | Cost of Revenue | Cost of Revenue | Cost of Revenue | Cost of Revenue | Selling, General and Administrative Expenses | Selling, General and Administrative Expenses | Selling, General and Administrative Expenses | Selling, General and Administrative Expenses | Selling, General and Administrative Expenses | Selling, General and Administrative Expenses | Research and Development Expense | Research and Development Expense | Other Non-Operating Expense | Other Non-Operating Expense | Other Non-Operating Expense | Other Non-Operating Expense | Revenue | Revenue | ||||||||
Postretirement Benefit Plans | Postretirement Benefit Plans | Postretirement Benefit Plans | Derivative Instruments | Postretirement Benefit Plans | Postretirement Benefit Plans | Postretirement Benefit Plans | Postretirement Benefit Plans | Postretirement Benefit Plans | Postretirement Benefit Plans | Derivative Instruments | |||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Beginning Balance | $37 | $115 | $122 | $37 | $336 | $288 | $73 | ($222) | ($166) | ($36) | $1 | $0 | $0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Foreign currency translation adjustment | ' | 15 | 48 | -61 | 15 | 48 | -61 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Contributed currency translation adjustment | 276 | ' | ' | 276 | ' | ' | 276 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Other Comprehensive Income (Loss), Amortization Adjustment from AOCI, Pension and Other Postretirement Benefit Plans, for Net Prior Service (Cost) Credit, Before Tax | ' | 40 | -93 | -74 | ' | ' | ' | 40 | -93 | -74 | ' | ' | ' | 7 | 5 | 2 | 7 | 5 | 2 | ' | 7 | 5 | 1 | 7 | 5 | 1 | 1 | 1 | 3 | 4 | 3 | 4 | ' | ' | |||
Change in postretirement benefit plans | ' | 34 | -84 | -74 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Change in tax on postretirement benefit plans | ' | -17 | 27 | 15 | ' | ' | ' | -17 | 27 | 15 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Tax on amortization of postretirement benefit plan items | ' | -5 | -4 | -1 | ' | ' | ' | -5 | -4 | -1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Assumption of accumulated unrealized gains | ' | ' | ' | -105 | ' | ' | ' | ' | ' | -105 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Assumption of tax on accumulated unrealized gains | ' | ' | ' | 32 | ' | ' | ' | ' | ' | 32 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Unrealized gains | ' | 1 | [1] | 4 | [1] | 0 | [1] | ' | ' | ' | ' | ' | ' | 1 | 4 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Tax on unrealized gain on foreign exchange agreements | ' | ' | -1 | ' | ' | ' | ' | ' | ' | ' | ' | -1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Reclassification of unrealized gain on foreign exchange agreements | ' | 0 | -3 | 0 | ' | ' | ' | ' | ' | ' | ' | -3 | ' | 2 | ' | ' | ' | ' | ' | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -2 | -2 | |||
Tax on reclassification of unrealized gain on foreign exchange agreements | ' | ' | 1 | ' | ' | ' | ' | ' | ' | ' | ' | 1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Ending Balance | ' | $167 | $115 | $122 | $351 | $336 | $288 | ($186) | ($222) | ($166) | $2 | $1 | $0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Goodwill and Intangible Assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Goodwill and Intangible Assets | |||||||||||||||||||||||||||||||||||||
Goodwill represents purchase consideration paid in a business combination that exceeds the values assigned to the net assets of acquired businesses. Intangible assets include customer relationships, proprietary technology, brands and trademarks, patents and other intangible assets. Intangible assets with a finite life are amortized on a straight-line basis over an estimated economic useful life which ranges from 5 to 40 years and is included in selling, general and administrative expense. Certain of our intangible assets, namely certain brands and trademarks, have an indefinite life and are not amortized | |||||||||||||||||||||||||||||||||||||
[1] | Effective portion |
Commitments_and_Contingencies_1
Commitments and Contingencies (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Commitments and Contingencies Disclosure [Abstract] | ' | ' | ' |
Total rent expense | $77 | $73 | $64 |
Commitments_and_Contingencies_2
Commitments and Contingencies (Details1) (USD $) | Dec. 31, 2013 |
In Millions, unless otherwise specified | |
Minimum rental payments under operating leases | ' |
2014 | $63 |
2015 | 51 |
2016 | 39 |
2017 | 24 |
2018 | 22 |
Thereafter | $26 |
Commitments_and_Contingencies_3
Commitments and Contingencies (Details 2) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Warranties | ' | ' |
Warranty accrual - January 1 | $40 | $42 |
Net changes for product warranties in the period | 34 | 32 |
Settlement of warranty claims | -37 | -33 |
Other | 0 | -1 |
Warranty accrual - December 31 | $37 | $40 |
Commitments_and_Contingencies_4
Commitments and Contingencies (Details Textual) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Commitments and Contingencies Disclosure [Abstract] | ' | ' | ' |
Loss Contingency Accrual, at Carrying Value | $17 | $8 | ' |
Estimated environmental matters | 8 | 11 | ' |
Warranty expense | 34 | 32 | 35 |
Accrual for Environmental Loss Contingencies, Estimated Losses in Excess of Amounts Accrued | $26 | ' | ' |
Related_Party_Transactions_and2
Related Party Transactions and Parent Company Equity (Details) (ITT [Member], USD $) | 3 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2012 |
ITT [Member] | ' |
Related Party Transaction | ' |
Intercompany dividends | ($87) |
Cash pooling and general financing activities | -1,355 |
Corporate allocations including income taxes | 182 |
Contribution of assets and liabilities upon spin-off | 20 |
Total net transfers from/(to) parent | ($1,240) |
Related_Party_Transactions_and3
Related Party Transactions and Parent Company Equity (Details 1) (USD $) | 12 Months Ended | |||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
Stockholders' equity | $2,241 | $2,074 | $1,831 | $2,723 |
2010 comprehensive income | 15 | 48 | -61 | ' |
Accumulated Other Comprehensive Income (Loss) | ' | ' | ' | ' |
Stockholders' equity | 167 | 115 | 122 | 37 |
Parent Company Investment | ' | ' | ' | ' |
Stockholders' equity | $0 | $0 | $0 | $2,682 |
Related_Party_Transactions_and4
Related Party Transactions and Parent Company Equity (Details Textual) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Related Party Transaction | ' | ' | ' |
Sales to related parties | ' | ' | $10 |
Purchases from related parties | ' | ' | 10 |
Selling, general and administrative expenses | 986 | 914 | 877 |
Separation costs | ' | ' | 44 |
Affiliates | ' | ' | ' |
Related Party Transaction | ' | ' | ' |
Sales to related parties | 15 | 12 | 14 |
Purchases from related parties | 20 | 20 | 21 |
ITT | ' | ' | ' |
Related Party Transaction | ' | ' | ' |
Selling, general and administrative expenses | ' | ' | $129 |
Industry_Segment_and_Geographi2
Industry Segment and Geographic Data (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Financial information for each reportable segment | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenue | $1,033 | $965 | $960 | $879 | $969 | $931 | $966 | $925 | $3,837 | $3,791 | $3,803 |
Operating income | 129 | 98 | 70 | 66 | 104 | 111 | 129 | 99 | 363 | 443 | 395 |
Other non-operating (expense) income, net | ' | ' | ' | ' | ' | ' | ' | ' | -10 | 0 | 5 |
Interest Expense | ' | ' | ' | ' | ' | ' | ' | ' | 55 | 55 | 17 |
Income before taxes | ' | ' | ' | ' | ' | ' | ' | ' | 298 | 388 | 383 |
Depreciation and amortization | ' | ' | ' | ' | ' | ' | ' | ' | 150 | 142 | 137 |
Capital expenditures | ' | ' | ' | ' | ' | ' | ' | ' | 126 | 112 | 126 |
Water Infrastructure | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Financial information for each reportable segment | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenue | ' | ' | ' | ' | ' | ' | ' | ' | 2,457 | 2,425 | 2,416 |
Operating income | ' | ' | ' | ' | ' | ' | ' | ' | 271 | 342 | 343 |
Depreciation and amortization | ' | ' | ' | ' | ' | ' | ' | ' | 115 | 106 | 104 |
Capital expenditures | ' | ' | ' | ' | ' | ' | ' | ' | 76 | 79 | 91 |
Applied Water | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Financial information for each reportable segment | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenue | ' | ' | ' | ' | ' | ' | ' | ' | 1,444 | 1,424 | 1,444 |
Operating income | ' | ' | ' | ' | ' | ' | ' | ' | 167 | 170 | 160 |
Depreciation and amortization | ' | ' | ' | ' | ' | ' | ' | ' | 28 | 29 | 31 |
Capital expenditures | ' | ' | ' | ' | ' | ' | ' | ' | 34 | 27 | 31 |
Eliminations | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Financial information for each reportable segment | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenue | ' | ' | ' | ' | ' | ' | ' | ' | -64 | -58 | -57 |
Corporate and other | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Financial information for each reportable segment | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Operating income | ' | ' | ' | ' | ' | ' | ' | ' | -75 | -69 | -108 |
Depreciation and amortization | ' | ' | ' | ' | ' | ' | ' | ' | 7 | 7 | 2 |
Capital expenditures | ' | ' | ' | ' | ' | ' | ' | ' | $16 | $6 | $4 |
Industry_Segment_and_Geographi3
Industry Segment and Geographic Data (Details 1) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||
Revenue from External Customer [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Revenue | $1,033 | $965 | $960 | $879 | $969 | $931 | $966 | $925 | $3,837 | $3,791 | $3,803 | |||
Pumps, accessories, parts and service | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Revenue from External Customer [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Revenue | ' | ' | ' | ' | ' | ' | ' | ' | 3,076 | 3,054 | 3,093 | |||
Other | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Revenue from External Customer [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Revenue | ' | ' | ' | ' | ' | ' | ' | ' | $761 | [1] | $737 | [1] | $710 | [1] |
[1] | Other includes treatment equipment, analytical instrumentation, heat exchangers, valves and controls. |
Industry_Segment_and_Geographi4
Industry Segment and Geographic Data (Details 2) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||
In Millions, unless otherwise specified | ||||||
Total assets for each reportable segment | ' | ' | ' | |||
Total assets | $4,896 | $4,679 | $4,400 | |||
Water Infrastructure | ' | ' | ' | |||
Total assets for each reportable segment | ' | ' | ' | |||
Total assets | 2,989 | 2,844 | 2,745 | |||
Applied Water | ' | ' | ' | |||
Total assets for each reportable segment | ' | ' | ' | |||
Total assets | 1,340 | 1,253 | 1,241 | |||
Corporate and other | ' | ' | ' | |||
Total assets for each reportable segment | ' | ' | ' | |||
Total assets | $567 | [1] | $582 | [1] | $414 | [1] |
[1] | Corporate and other consists of items pertaining to our corporate headquarters function, which principally consist of deferred tax assets and certain property, plant and equipment. |
Industry_Segment_and_Geographi5
Industry Segment and Geographic Data Industry Segment and Geographic Data (Details 3) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenue | $1,033 | $965 | $960 | $879 | $969 | $931 | $966 | $925 | $3,837 | $3,791 | $3,803 |
Property, plant and equipment | 488 | ' | ' | ' | 487 | ' | ' | ' | 488 | 487 | 463 |
United States | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenues from External Customers and Long-Lived Assets [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenue | ' | ' | ' | ' | ' | ' | ' | ' | 1,434 | 1,400 | 1,363 |
Property, plant and equipment | 186 | ' | ' | ' | 183 | ' | ' | ' | 186 | 183 | 178 |
Europe | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenues from External Customers and Long-Lived Assets [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenue | ' | ' | ' | ' | ' | ' | ' | ' | 1,387 | 1,338 | 1,422 |
Property, plant and equipment | 225 | ' | ' | ' | 219 | ' | ' | ' | 225 | 219 | 209 |
Asia Pacific | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenues from External Customers and Long-Lived Assets [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenue | ' | ' | ' | ' | ' | ' | ' | ' | 467 | 469 | 426 |
Property, plant and equipment | 45 | ' | ' | ' | 65 | ' | ' | ' | 45 | 65 | 57 |
Other | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenues from External Customers and Long-Lived Assets [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenue | ' | ' | ' | ' | ' | ' | ' | ' | 549 | 584 | 592 |
Property, plant and equipment | $32 | ' | ' | ' | $20 | ' | ' | ' | $32 | $20 | $19 |
Industry_Segment_and_Geographi6
Industry Segment and Geographic Data (Details Textual) | 12 Months Ended |
Dec. 31, 2013 | |
Segment | |
Segment Information (Textual) [Abstract] | ' |
Number of Business Segments | 2 |
Subsequent_Event_Details
Subsequent Event (Details) (USD $) | 12 Months Ended | 0 Months Ended | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2013 | Jun. 30, 2012 | Feb. 05, 2013 | Apr. 30, 2012 |
PIMS Group | PIMS Group | |||
Employees | ||||
Subsequent Event (Textual) [Abstract] | ' | ' | ' | ' |
Cash payment to acquire business | $84 | ' | $57 | ' |
Number of employees | ' | ' | ' | 220 |
Revenue from acquired entity | ' | $13 | ' | $38 |
Supplemental_Information_Detai
Supplemental Information (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Allowance for Doubtful Accounts | ' | ' | ' |
Movement in Valuation Allowances and Reserves [Roll Forward] | ' | ' | ' |
Balance at beginning of year | $25 | $29 | $25 |
Additions charged to expense | 8 | 4 | 11 |
Deductions/other | 11 | 8 | 7 |
Balance at end of year | 22 | 25 | 29 |
Inventory Valuation | ' | ' | ' |
Movement in Valuation Allowances and Reserves [Roll Forward] | ' | ' | ' |
Balance at beginning of year | 38 | 39 | 33 |
Additions charged to expense | 14 | 9 | 17 |
Deductions/other | 11 | 10 | 11 |
Balance at end of year | $41 | $38 | $39 |
Quarterly_Financial_Data_Detai
Quarterly Financial Data (Details) (USD $) | 2 Months Ended | 3 Months Ended | 10 Months Ended | 12 Months Ended | |||||||||
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2011 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Oct. 30, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Quarterly Financial Information Disclosure [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenue | ' | $1,033 | $965 | $960 | $879 | $969 | $931 | $966 | $925 | ' | $3,837 | $3,791 | $3,803 |
Gross Profit | ' | 410 | 384 | 371 | 334 | 382 | 374 | 383 | 363 | ' | 1,499 | 1,502 | 1,461 |
Operating income | ' | 129 | 98 | 70 | 66 | 104 | 111 | 129 | 99 | ' | 363 | 443 | 395 |
Net income | $59 | $68 | $73 | $46 | $41 | $73 | $72 | $89 | $63 | $220 | $228 | $297 | $279 |
Basic (in dollars per share) | ' | $0.37 | $0.39 | $0.25 | $0.22 | $0.39 | $0.39 | $0.48 | $0.34 | ' | $1.23 | $1.60 | $1.51 |
Diluted (in dollars per share) | ' | $0.37 | $0.39 | $0.25 | $0.22 | $0.39 | $0.38 | $0.48 | $0.34 | ' | $1.22 | $1.59 | $1.50 |
Capital_Stock_Details
Capital Stock (Details) (USD $) | 12 Months Ended | 0 Months Ended | 12 Months Ended | 12 Months Ended | ||||||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Aug. 20, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Aug. 18, 2012 | Dec. 31, 2013 | Dec. 31, 2012 |
2013 Stock Repurchase Program | 2013 Stock Repurchase Program | 2012 Stock Repurchase Program | 2012 Stock Repurchase Program | 2012 Stock Repurchase Program | Settlement of Employee Tax Withholding Obligations | Settlement of Employee Tax Withholding Obligations | ||||
Class of Stock [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common Stock, Shares Authorized | 750,000,000 | 750,000,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Common Stock, Par or Stated Value Per Share | $0.01 | $0.01 | ' | ' | ' | ' | ' | ' | ' | ' |
Common Stock, Dividends, Per Share, Declared | $0.47 | $0.40 | $0.10 | ' | ' | ' | ' | ' | ' | ' |
Stock Repurchase Program, Authorized Amount | ' | ' | ' | $250 | ' | ' | ' | ' | ' | ' |
Treasury Stock, Shares, Acquired | 2,304,000 | 350,000 | 0 | ' | 1,700,000 | 600,000 | 400,000 | ' | 200,000 | 100,000 |
Treasury Stock, Value, Acquired, Cost Method | 73 | 13 | ' | ' | 50 | 17 | 9 | ' | 6 | 4 |
Stock Repurchase Program, Remaining Authorized Repurchase Amount | ' | ' | ' | ' | $200 | ' | ' | ' | ' | ' |
Stock Repurchase Program, Number of Shares Authorized to be Repurchased | ' | ' | ' | ' | ' | 1,000,000 | ' | 2,000,000 | ' | ' |
Capital_Stock_Changes_in_Commo
Capital Stock Changes in Common Stock Outstanding (Details) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Changes in Common Stock Outstanding [Roll Forward] | ' | ' | ' |
Beginning Balance, January 1 | 185,658 | 184,641 | 0 |
Conversion of net investment | 0 | 0 | 184,578 |
Stock incentive plan activity | 1,203 | 1,367 | 63 |
Repurchase of common stock | -2,304 | -350 | 0 |
Ending Balance, December 31 | 184,557 | 185,658 | 184,641 |