Cover Page
Cover Page - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2020 | Feb. 19, 2021 | Jun. 30, 2020 | |
Entity Information [Line Items] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2020 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 1-35229 | ||
Entity Registrant Name | Xylem Inc. | ||
Entity Incorporation, State or Country Code | IN | ||
Entity Tax Identification Number | 45-2080495 | ||
Entity Address, Address Line One | 1 International Drive | ||
Entity Address, City or Town | Rye Brook | ||
Entity Address, State or Province | NY | ||
Entity Address, Postal Zip Code | 10573 | ||
City Area Code | 914 | ||
Local Phone Number | 323-5700 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 11.6 | ||
Entity Common Stock, Shares Outstanding | 180,358,493 | ||
Documents Incorporated by Reference | Portions of the registrant’s definitive proxy statement for its 2021 Annual Meeting of Shareowners, to be held in May 2021, are incorporated by reference into Part II and Part III of this Report. | ||
Entity Central Index Key | 0001524472 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Common Stock | |||
Entity Information [Line Items] | |||
Title of 12(b) Security | Common Stock, par value $0.01 per share | ||
Trading Symbol | XYL | ||
Security Exchange Name | NYSE | ||
Senior Notes Due 2023 | |||
Entity Information [Line Items] | |||
Title of 12(b) Security | 2.250% Senior Notes due 2023 | ||
Trading Symbol | XYL23 | ||
Security Exchange Name | NYSE |
Consolidated Income Statements
Consolidated Income Statements - USD ($) shares in Thousands, $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Statement [Abstract] | |||
Revenue | $ 4,876 | $ 5,249 | $ 5,207 |
Cost of revenue | 3,046 | 3,203 | 3,181 |
Gross profit | 1,830 | 2,046 | 2,026 |
Selling, general and administrative expenses | 1,143 | 1,158 | 1,161 |
Research and development expenses | 187 | 191 | 189 |
Restructuring and asset impairment charges | 75 | 63 | 22 |
Goodwill, Impairment Loss | 58 | 148 | 0 |
Operating income | 367 | 486 | 654 |
Interest expense | 77 | 67 | 82 |
Other non-operating (expense) income, net | (5) | (4) | 13 |
Gain on sale of businesses | 0 | 1 | 0 |
Income before taxes | 285 | 416 | 585 |
Income tax expense | 31 | 15 | 36 |
Net income | $ 254 | $ 401 | $ 549 |
Earnings per share: | |||
Basic (in dollars per share) | $ 1.41 | $ 2.23 | $ 3.05 |
Diluted (in dollars per share) | $ 1.40 | $ 2.21 | $ 3.03 |
Basic (in shares) | 180,116 | 179,987 | 179,777 |
Weighted average common shares outstanding — Diluted | 181,099 | 181,196 | 181,132 |
Dividends declared per share (in usd per share) | $ 1.04 | $ 0.96 | $ 0.84 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 254 | $ 401 | $ 549 |
Other comprehensive loss, before tax: | |||
Foreign currency translation adjustment | (23) | 28 | (85) |
Net change in derivative hedge agreements: | |||
Unrealized gain (loss) | 9 | (14) | (8) |
Amount of (gain) loss reclassified into net income | (3) | 12 | 4 |
Net change in post-retirement benefit plans: | |||
Net loss | (78) | (83) | (37) |
Prior service credit | 5 | 0 | 0 |
Amortization of prior service credit cost | (3) | (4) | (4) |
Amortization of net actuarial loss into net income | 19 | 12 | 13 |
Settlement | 0 | 9 | 1 |
Foreign currency translation adjustment | (19) | (3) | 15 |
Other comprehensive loss, before tax | (93) | (43) | (101) |
Income tax (benefit) expense related to other comprehensive loss | (54) | (5) | 10 |
Other comprehensive loss, net of tax | (39) | (38) | (111) |
Comprehensive income | 215 | 363 | 438 |
Less: comprehensive (loss) gain attributable to noncontrolling interests | (1) | 1 | (2) |
Comprehensive income | $ 216 | $ 362 | $ 440 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 1,875 | $ 724 |
Receivables, less allowances for discounts, returns and credit losses of $46 and $35 in 2020 and 2019, respectively | 923 | 1,036 |
Inventories | 558 | 539 |
Prepaid and other current assets | 167 | 151 |
Total current assets | 3,523 | 2,450 |
Property, plant and equipment, net | 657 | 658 |
Goodwill | 2,854 | 2,839 |
Other intangible assets, net | 1,093 | 1,174 |
Other non-current assets | 623 | 589 |
Total assets | 8,750 | 7,710 |
Current liabilities: | ||
Accounts payable | 569 | 597 |
Accrued and other current liabilities | 787 | 628 |
Short-term borrowings and current maturities of long-term debt | 600 | 276 |
Total current liabilities | 1,956 | 1,501 |
Long-term debt, net | 2,484 | 2,040 |
Accrued post-retirement benefits | 519 | 445 |
Deferred income tax liabilities | 242 | 310 |
Other non-current accrued liabilities | 573 | 447 |
Total liabilities | 5,774 | 4,743 |
Commitment and Contingencies (Note 20) | ||
Common stock — par value $0.01 per share: | ||
Authorized 750.0 shares, issued 194.9 and 193.9 shares in 2020 and 2019, respectively | 2 | 2 |
Capital in excess of par value | 2,037 | 1,991 |
Retained earnings | 1,930 | 1,866 |
Treasury stock – at cost 14.5 shares and 13.7 shares in 2020 and 2019, respectively | (588) | (527) |
Accumulated other comprehensive loss | (413) | (375) |
Total stockholders’ equity | 2,968 | 2,957 |
Non-controlling interest | 8 | 10 |
Total equity | 2,976 | 2,967 |
Total liabilities and stockholders’ equity | $ 8,750 | $ 7,710 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Millions, $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Allowances for discounts, returns and credit losses | $ 46 | $ 35 |
Common Stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common Stock, shares authorized | 750 | 750 |
Common Stock, shares issued | 194.9 | 193.9 |
Treasury Stock, shares | 14.5 | 13.7 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Statement of Cash Flows [Abstract] | |||
Net income | $ 254 | $ 401 | $ 549 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation | 117 | 117 | 117 |
Amortization | 134 | 140 | 144 |
Deferred income taxes | (31) | (77) | (47) |
Share-based compensation | 26 | 29 | 30 |
Restructuring and asset impairment charges | 75 | 63 | 22 |
Goodwill, Impairment Loss | 58 | 148 | 0 |
Gain from sale of businesses | 0 | (1) | 0 |
Other, net | 46 | 9 | 9 |
Payments for restructuring | (36) | (30) | (21) |
Contributions to post-retirement benefit plans | (27) | (19) | (41) |
Changes in assets and liabilities (net of acquisitions): | |||
Changes in receivables | 109 | (23) | (103) |
Changes in inventories | (5) | 47 | (97) |
Changes in accounts payable | (39) | 29 | 51 |
Changes in accrued liabilities | 101 | 15 | (6) |
Changes in accrued taxes | 20 | (13) | 0 |
Net changes in other assets and liabilities | 22 | 4 | (21) |
Net Cash — Operating activities | 824 | 839 | 586 |
Investing Activities | |||
Capital expenditures | (183) | (226) | (237) |
Acquisitions of businesses and assets, net of cash acquired | 0 | (18) | (433) |
Proceeds from sale of businesses | 0 | 0 | 22 |
Cash received from investments | 200 | 11 | 11 |
Cash paid for investments | (200) | (7) | (11) |
Proceeds from Derivative Instrument, Investing Activities | 12 | 9 | 0 |
Other, net | 2 | 0 | 5 |
Net Cash — Investing activities | (169) | (231) | (643) |
Financing Activities | |||
Short-term debt issued, net | 359 | 281 | 335 |
Short-term debt repaid, net | (640) | (254) | (52) |
Long-term debt issued, net | 985 | 0 | 1 |
Long-term debt repaid, net | 0 | 0 | (120) |
Repurchase of common stock | (61) | (40) | (59) |
Proceeds from exercise of employee stock options | 20 | 13 | 7 |
Dividends paid | (188) | (174) | (152) |
Other, net | (2) | (3) | 0 |
Net Cash — Financing activities | 473 | (177) | (40) |
Effect of exchange rate changes on cash | 23 | (3) | (21) |
Net change in cash and cash equivalents | 1,151 | 428 | (118) |
Cash and cash equivalents at beginning of year | 724 | 296 | 414 |
Cash and cash equivalents at end of year | 1,875 | 724 | 296 |
Cash paid during the year for: | |||
Interest | 77 | 77 | 78 |
Income taxes (net of refunds received) | $ 41 | $ 107 | $ 75 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Millions | Total | Cumulative Effect, Period of Adoption, Adjustment | Common Stock | Capital in Excess of Par Value | Retained Earnings | Retained EarningsCumulative Effect, Period of Adoption, Adjustment | Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss)Cumulative Effect, Period of Adoption, Adjustment | Treasury Stock | Non-Controlling Interest |
Balance at Dec. 31, 2017 | $ 2,519 | $ (3) | $ 2 | $ 1,912 | $ 1,227 | $ 14 | $ (210) | $ (17) | $ (428) | $ 16 |
Stockholders' Equity [Roll Forward] | ||||||||||
Net income | 549 | 549 | ||||||||
Other comprehensive loss, net | (111) | (109) | ||||||||
Dividends declared | (151) | (151) | ||||||||
Stock incentive plan activity | 29 | 38 | (9) | |||||||
Repurchase of common stock | (50) | (50) | ||||||||
Balance at Dec. 31, 2018 | 2,782 | 2 | 1,950 | 1,639 | (336) | (487) | 14 | |||
Stockholders' Equity [Roll Forward] | ||||||||||
Net income | 401 | 401 | ||||||||
Other comprehensive loss, net | (38) | (39) | ||||||||
Noncontrolling Interest, Decrease from Distributions to Noncontrolling Interest Holders | (3) | (3) | ||||||||
Dividends declared | (174) | (174) | ||||||||
Stock incentive plan activity | 26 | 41 | (15) | |||||||
Noncontrolling Interest, Decrease from Deconsolidation | (2) | (2) | ||||||||
Repurchase of common stock | (25) | (25) | ||||||||
Balance at Dec. 31, 2019 | 2,967 | $ (2) | 2 | 1,991 | 1,866 | $ (2) | (375) | (527) | 10 | |
Stockholders' Equity [Roll Forward] | ||||||||||
Net income | 254 | 254 | ||||||||
Other comprehensive loss, net | (39) | (38) | (1) | |||||||
Noncontrolling Interest, Decrease from Distributions to Noncontrolling Interest Holders | (1) | (1) | ||||||||
Dividends declared | (188) | (188) | ||||||||
Stock incentive plan activity | 35 | 46 | (11) | |||||||
Repurchase of common stock | (50) | (50) | ||||||||
Balance at Dec. 31, 2020 | $ 2,976 | $ 2 | $ 2,037 | $ 1,930 | $ (413) | $ (588) | $ 8 |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) - $ / shares | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Statement of Stockholders' Equity [Abstract] | |||
Cash dividends paid per share (in usd per share) | $ 1.04 | $ 0.96 | $ 0.84 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2020 | |
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 three segments, Water Infrastructure, Applied Water and Measurement & Control Solutions. See Note 22, "Segment and Geographic Data" for further segment background information. 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 (now ITT LLC), Exelis Inc., acquired by Harris Corporation, now L3Harris Technologies, Inc., on May 29, 2015, (“Exelis”) and Xylem. Xylem Inc. was incorporated in Indiana on May 4, 2011 in connection with the Spin-off. 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 financial statements to “ITT” or “former parent” refers to ITT Corporation (now ITT LLC) and its consolidated subsidiaries (other than Xylem Inc.). Basis of Presentation The consolidated 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 intercompany transactions between our businesses have been eliminated. 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, post-retirement obligations and assets, revenue recognition, income taxes, valuation of intangible assets, goodwill and indefinite-lived intangible impairment testing and contingent liabilities. Actual results could differ from these estimates. The global outbreak of the novel coronavirus ("COVID-19") disease in March 2020, declared a pandemic by the World Health Organization, has created significant global volatility, uncertainty and economic disruption. The COVID-19 pandemic also has caused increased uncertainty in estimates and assumptions affecting the consolidated financial statements. 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 under the equity method in companies over which we have the ability to exercise significant influence but do not hold a controlling financial interest, and we record our proportionate share of income or losses in the Consolidated 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 Xylem recognizes revenue in a manner that depicts the transfer of promised goods and services to customers in an amount that reflects the consideration to which it expects to be entitled for providing those goods and services. For each arrangement with a customer, we identify the contract and the associated performance obligations within the contract, determine the transaction price of that contract, allocate the transaction price to each performance obligation and recognize revenue as each performance obligation is satisfied. The satisfaction of performance obligations in a contract is based upon when the customer obtains control over the asset. Depending on the nature of the performance obligation, control transfers either at a particular point in time, or over time which determines the recognition pattern of revenue. For product sales, other than long-term construction-type contracts, we recognize revenue once control has passed at a point in time, which is generally when products are shipped. In instances where contractual terms include a provision for customer acceptance, revenue is recognized when either (i) we have previously demonstrated that the product meets the specified criteria based on either seller or customer-specified objective criteria or (ii) upon formal acceptance received from the customer where the product has not been previously demonstrated to meet customer-specified objective criteria. We recognize revenue on product sales to channel partners, including resellers, distributors or value-added solution providers, at the point in time when control is transferred which is determined based on when the risks and rewards, possession, and title have transferred to the customer, which usually occurs at the point of delivery. Revenue from performance obligations related to services is primarily recognized over time, as the performance obligations are satisfied. In these instances, the customer consumes the benefit of the service as Xylem performs. Certain businesses also enter into long-term construction-type sales contracts where revenue is recognized over time. In these instances, revenue is recognized using a measure of progress that applies an input method based on costs incurred in relation to total estimated costs. We also recognize revenue for certain of these arrangements using the output method and measure progress based on shipments of product where control has transferred to the customer. If shipping and handling activities are performed after a customer obtains control of a good, we account for the shipping and handling activities as activities to fulfill a promise to transfer a good. Shipping and handling related costs are accrued as revenue is recognized. For all contracts with customers, we determine the transaction price in the arrangement and allocate the transaction price to each performance obligation identified in the contract. Judgment is required to determine the appropriate unit of account, and we separate out the performance obligations if they are capable of being distinct and are distinct within the context of the contract. We base our allocation of the transaction price to the performance obligations on the relative stand-alone selling prices for the goods or services contained in a particular performance obligation. The stand-alone selling prices are determined first by reference to observable prices. In the event observable prices are not available, we estimate the stand-alone selling price by maximizing observable inputs and applying an adjusted market assessment approach, expected cost plus margin approach, or a residual approach in limited situations. Revenue in these instances is recognized on individual performance obligations within the same contract as they are satisfied. The transaction price is adjusted for our estimate of variable consideration which may include a right of return, discounts, rebates, penalties and retainage. To estimate variable consideration, we apply the expected value or the most likely amount method, based on whichever method most appropriately predicts the amount of consideration we expect to receive. The method applied is typically based on historical experience and known trends. We constrain the amounts of variable consideration that are included in the transaction price, to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur or when uncertainties around the variable consideration are resolved. We exclude from the measurement of the transaction price all taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected from a customer, for example sales, use, value added and some excise taxes. For all contracts with customers, payment received for our products and services may not necessarily follow the same pattern of revenue recognition to which it relates and are dictated by the terms and conditions of our contracts with customers. Payments received for product sales typically occur following delivery and the satisfaction of the performance obligations based upon the terms outlined in the contracts. Payments received for services typically occur following the services being rendered. For long-term construction-type projects, payments are typically made throughout the contract as progress is made. In limited situations, contracts with customers include financing components where payment terms exceed one year; however, we believe that the financing effects are not significant to Xylem. In addition, we apply a practical expedient and do not adjust the promised amount of consideration in a contract for the effects of significant financing components when we expect payment terms to be one year or less from the time the goods or services are transferred until ultimate payment. We offer standard warranties for our products to ensure that our products comply with agreed-upon specifications in our contracts. Standard warranties do not give rise to performance obligations and represent assurance-type warranties. In certain instances, product warranty terms are adjusted to account for the specific nature of the contract. In these instances, we assess the warranties to determine whether they represent service-type warranties, and should be accounted for as a separate performance obligation in the contract. Costs to obtain a contract include incremental costs that the Company has incurred that it expects to recover. Incremental costs only include costs that the Company would not have incurred had the contract not been obtained. Costs that would have been incurred regardless of whether or not the contract was obtained are expensed as incurred, unless they are explicitly chargeable to the customer whether or not the contract is obtained. Costs to obtain contracts are capitalized when incurred, and are then amortized in a manner that is consistent with the pattern of transfer of the related goods or services provided in the contract. The Company elects to apply the practical expedient to expense costs to obtain contracts when the associated amortization period of those costs would be one year or less. 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 include non-qualified stock options, restricted stock unit awards and performance share unit awards. Share-based awards issued to members of the Board of Directors include restricted stock unit 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 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 unit awards is determined using the closing price of our common stock on date of grant. The fair value of Return on Invested Capital ("ROIC") performance share units at 100% target is determined using the closing price of our common stock on date of grant. The fair value of Total Shareholder Return ("TSR") performance share units is calculated on the date of grant using a Monte Carlo simulation model utilizing several key assumptions, including expected Company and peer company share price volatility, correlation coefficients between peers, the risk-free rate of return, the expected dividend yield and other award design features. Research and Development We conduct research and development activities, which consist primarily of the development of new products, product applications, and manufacturing processes. To the extent these activities are related to developing software that is sold to our customers, we capitalize the applicable development costs. All other research and development 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, 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 long-term debt and amortized over the life of the related financing arrangements. If the debt is retired early, the related unamortized deferred financing costs are recorded within the results of operations under the caption “interest expense” in the period the debt is retired. Income Taxes Income taxes are calculated using the asset and liability method. 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. 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. Due to the Tax Act, we have recorded net foreign withholding taxes and state income taxes on earnings that are expected to be repatriated to the U.S. parent. We have not recorded any deferred taxes on the amounts that the Company currently does not intend to repatriate as the determination of any deferred taxes on this amount is not reasonably estimable. 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 or upon completion of the litigation process. 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 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. 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 Credit Losses and Discounts Receivables primarily comprise uncollected amounts owed to us from transactions with customers and are presented net of allowances for credit losses, returns and early payment discounts. We determine our allowance for credit losses using a combination of factors to reduce our trade receivable balances to the net amount expected to be collected. We maintain an allowance for credit losses based on a variety of factors, including the length of time receivables were past due, macro-economic trends and conditions, significant one-time events, historical experience, and current and future expectations of economic conditions. In addition, we record an allowance 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 early payment 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 evaluate 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, 2020 and 2019 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 net realizable value. 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. Leases Xylem adopted ASC 842 - Leases as of January 1, 2019. We determine if an arrangement is a lease at inception. We have recorded right of use (“ROU”) assets and liabilities for lease arrangements that are reasonably certain to extend beyond 12 months. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments under the lease. ROU assets and liabilities are recognized at lease commencement date based on the present value of lease payments over the lease term. The implicit rate within our leases is generally not determinable, and we use our incremental borrowing rate at the lease commencement date to determine the net present value of lease payments. The determination of the appropriate incremental borrowing rate requires judgment. We determine the appropriate incremental borrowing rate for each lease using our current borrowing rate, adjusted for various factors including geographic region, level of collateralization and term, to align with the term of the underlying lease. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Many of our leases are subject to payment adjustments to reflect annual changes in price indexes, such as the Consumer Price Index. While associated lease liabilities are not re-measured as a result of changes in the applicable price indexes, changes to required lease payments are treated as variable lease payments and recognized in the period in which the obligation for those payments was incurred. Leases with a lease term of 12 months or less, including renewal options that are reasonably certain to be exercised, that also do not include an option to purchase the underlying asset that is reasonably certain of exercise, are not recorded on the balance sheet. Instead, lease payments for these leases are recognized as a lease cost on a straight-line basis over the lease term. We elected the package of practical expedients, which among other things, does not require reassessment of lease classification. Additionally, we have made an accounting policy election whereby we chose not to separate non-lease components from lease components in agreements in all leases which we are the lessee. For annual periods prior to January 1, 2019, lease payments for these leases are recognized as a lease cost on a straight-line basis over the lease term. 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, software 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 1 to 25 years and is included in cost of revenue or selling, general and administrative expenses. Certain of our intangible assets, namely certain brands and trademarks, as well as FCC licenses, 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 or business climate or an adverse action or assessment by a regulator). We conduct our annual impairment testing as of the beginning of the fourth quarter. For goodwill, 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. If the carrying value of the reporting unit exceeds its estimated fair value, then an impairment charge is recognized for that excess up to the amount of recorded goodwill. We estimate the fair value of our reporting units using an income approach. We estimate the fair value of our intangible assets with indefinite lives using either the income approach or the market approach. Under the income approach, we calculate fair value based on the present value of estimated future cash flows. Under the market approach, we calculate fair value based on recent sales and selling prices of similar assets. Product Warranties For assurance-type 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 also record a warranty liability for specific matters. We assess the adequacy of our recorded warranty liabilities quarterly and adjust amounts as necessary. For service-type warranties (i.e. non-standard warranties) costs incurred to fulfill the extended or service warranty are recognized/recorded as the costs are incurred. Post-retirement Benefit Plans The determination of defined benefit pension and post-retirement 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, years of service 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 post-retirement cost, the calculation of the expected return on plan assets is generally derived by applying the expected long-term rate of return on the market-related value of plan assets. The market-related value of plan assets is 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 average 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”) to be 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. The excess of the acquisition price over those estimated fair values is recorded as goodwill. 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. 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. During the fourth quarter of 2018, we adopted new accounting guidance that eliminates the concept of ineffectiveness for cash flow and net investment hedges. Prior to this adoption, the effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges of foreign exchange risk was recorded in other comprehensive income ("OCI") and was 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 |
Recently Issued Accounting Pron
Recently Issued Accounting Pronouncements | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Recently Issued Accounting Pronouncements | 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 three segments, Water Infrastructure, Applied Water and Measurement & Control Solutions. See Note 22, "Segment and Geographic Data" for further segment background information. 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 (now ITT LLC), Exelis Inc., acquired by Harris Corporation, now L3Harris Technologies, Inc., on May 29, 2015, (“Exelis”) and Xylem. Xylem Inc. was incorporated in Indiana on May 4, 2011 in connection with the Spin-off. 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 financial statements to “ITT” or “former parent” refers to ITT Corporation (now ITT LLC) and its consolidated subsidiaries (other than Xylem Inc.). Basis of Presentation The consolidated 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 intercompany transactions between our businesses have been eliminated. 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, post-retirement obligations and assets, revenue recognition, income taxes, valuation of intangible assets, goodwill and indefinite-lived intangible impairment testing and contingent liabilities. Actual results could differ from these estimates. The global outbreak of the novel coronavirus ("COVID-19") disease in March 2020, declared a pandemic by the World Health Organization, has created significant global volatility, uncertainty and economic disruption. The COVID-19 pandemic also has caused increased uncertainty in estimates and assumptions affecting the consolidated financial statements. 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 under the equity method in companies over which we have the ability to exercise significant influence but do not hold a controlling financial interest, and we record our proportionate share of income or losses in the Consolidated 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 Xylem recognizes revenue in a manner that depicts the transfer of promised goods and services to customers in an amount that reflects the consideration to which it expects to be entitled for providing those goods and services. For each arrangement with a customer, we identify the contract and the associated performance obligations within the contract, determine the transaction price of that contract, allocate the transaction price to each performance obligation and recognize revenue as each performance obligation is satisfied. The satisfaction of performance obligations in a contract is based upon when the customer obtains control over the asset. Depending on the nature of the performance obligation, control transfers either at a particular point in time, or over time which determines the recognition pattern of revenue. For product sales, other than long-term construction-type contracts, we recognize revenue once control has passed at a point in time, which is generally when products are shipped. In instances where contractual terms include a provision for customer acceptance, revenue is recognized when either (i) we have previously demonstrated that the product meets the specified criteria based on either seller or customer-specified objective criteria or (ii) upon formal acceptance received from the customer where the product has not been previously demonstrated to meet customer-specified objective criteria. We recognize revenue on product sales to channel partners, including resellers, distributors or value-added solution providers, at the point in time when control is transferred which is determined based on when the risks and rewards, possession, and title have transferred to the customer, which usually occurs at the point of delivery. Revenue from performance obligations related to services is primarily recognized over time, as the performance obligations are satisfied. In these instances, the customer consumes the benefit of the service as Xylem performs. Certain businesses also enter into long-term construction-type sales contracts where revenue is recognized over time. In these instances, revenue is recognized using a measure of progress that applies an input method based on costs incurred in relation to total estimated costs. We also recognize revenue for certain of these arrangements using the output method and measure progress based on shipments of product where control has transferred to the customer. If shipping and handling activities are performed after a customer obtains control of a good, we account for the shipping and handling activities as activities to fulfill a promise to transfer a good. Shipping and handling related costs are accrued as revenue is recognized. For all contracts with customers, we determine the transaction price in the arrangement and allocate the transaction price to each performance obligation identified in the contract. Judgment is required to determine the appropriate unit of account, and we separate out the performance obligations if they are capable of being distinct and are distinct within the context of the contract. We base our allocation of the transaction price to the performance obligations on the relative stand-alone selling prices for the goods or services contained in a particular performance obligation. The stand-alone selling prices are determined first by reference to observable prices. In the event observable prices are not available, we estimate the stand-alone selling price by maximizing observable inputs and applying an adjusted market assessment approach, expected cost plus margin approach, or a residual approach in limited situations. Revenue in these instances is recognized on individual performance obligations within the same contract as they are satisfied. The transaction price is adjusted for our estimate of variable consideration which may include a right of return, discounts, rebates, penalties and retainage. To estimate variable consideration, we apply the expected value or the most likely amount method, based on whichever method most appropriately predicts the amount of consideration we expect to receive. The method applied is typically based on historical experience and known trends. We constrain the amounts of variable consideration that are included in the transaction price, to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur or when uncertainties around the variable consideration are resolved. We exclude from the measurement of the transaction price all taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected from a customer, for example sales, use, value added and some excise taxes. For all contracts with customers, payment received for our products and services may not necessarily follow the same pattern of revenue recognition to which it relates and are dictated by the terms and conditions of our contracts with customers. Payments received for product sales typically occur following delivery and the satisfaction of the performance obligations based upon the terms outlined in the contracts. Payments received for services typically occur following the services being rendered. For long-term construction-type projects, payments are typically made throughout the contract as progress is made. In limited situations, contracts with customers include financing components where payment terms exceed one year; however, we believe that the financing effects are not significant to Xylem. In addition, we apply a practical expedient and do not adjust the promised amount of consideration in a contract for the effects of significant financing components when we expect payment terms to be one year or less from the time the goods or services are transferred until ultimate payment. We offer standard warranties for our products to ensure that our products comply with agreed-upon specifications in our contracts. Standard warranties do not give rise to performance obligations and represent assurance-type warranties. In certain instances, product warranty terms are adjusted to account for the specific nature of the contract. In these instances, we assess the warranties to determine whether they represent service-type warranties, and should be accounted for as a separate performance obligation in the contract. Costs to obtain a contract include incremental costs that the Company has incurred that it expects to recover. Incremental costs only include costs that the Company would not have incurred had the contract not been obtained. Costs that would have been incurred regardless of whether or not the contract was obtained are expensed as incurred, unless they are explicitly chargeable to the customer whether or not the contract is obtained. Costs to obtain contracts are capitalized when incurred, and are then amortized in a manner that is consistent with the pattern of transfer of the related goods or services provided in the contract. The Company elects to apply the practical expedient to expense costs to obtain contracts when the associated amortization period of those costs would be one year or less. 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 include non-qualified stock options, restricted stock unit awards and performance share unit awards. Share-based awards issued to members of the Board of Directors include restricted stock unit 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 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 unit awards is determined using the closing price of our common stock on date of grant. The fair value of Return on Invested Capital ("ROIC") performance share units at 100% target is determined using the closing price of our common stock on date of grant. The fair value of Total Shareholder Return ("TSR") performance share units is calculated on the date of grant using a Monte Carlo simulation model utilizing several key assumptions, including expected Company and peer company share price volatility, correlation coefficients between peers, the risk-free rate of return, the expected dividend yield and other award design features. Research and Development We conduct research and development activities, which consist primarily of the development of new products, product applications, and manufacturing processes. To the extent these activities are related to developing software that is sold to our customers, we capitalize the applicable development costs. All other research and development 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, 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 long-term debt and amortized over the life of the related financing arrangements. If the debt is retired early, the related unamortized deferred financing costs are recorded within the results of operations under the caption “interest expense” in the period the debt is retired. Income Taxes Income taxes are calculated using the asset and liability method. 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. 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. Due to the Tax Act, we have recorded net foreign withholding taxes and state income taxes on earnings that are expected to be repatriated to the U.S. parent. We have not recorded any deferred taxes on the amounts that the Company currently does not intend to repatriate as the determination of any deferred taxes on this amount is not reasonably estimable. 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 or upon completion of the litigation process. 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 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. 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 Credit Losses and Discounts Receivables primarily comprise uncollected amounts owed to us from transactions with customers and are presented net of allowances for credit losses, returns and early payment discounts. We determine our allowance for credit losses using a combination of factors to reduce our trade receivable balances to the net amount expected to be collected. We maintain an allowance for credit losses based on a variety of factors, including the length of time receivables were past due, macro-economic trends and conditions, significant one-time events, historical experience, and current and future expectations of economic conditions. In addition, we record an allowance 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 early payment 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 evaluate 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, 2020 and 2019 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 net realizable value. 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. Leases Xylem adopted ASC 842 - Leases as of January 1, 2019. We determine if an arrangement is a lease at inception. We have recorded right of use (“ROU”) assets and liabilities for lease arrangements that are reasonably certain to extend beyond 12 months. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments under the lease. ROU assets and liabilities are recognized at lease commencement date based on the present value of lease payments over the lease term. The implicit rate within our leases is generally not determinable, and we use our incremental borrowing rate at the lease commencement date to determine the net present value of lease payments. The determination of the appropriate incremental borrowing rate requires judgment. We determine the appropriate incremental borrowing rate for each lease using our current borrowing rate, adjusted for various factors including geographic region, level of collateralization and term, to align with the term of the underlying lease. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Many of our leases are subject to payment adjustments to reflect annual changes in price indexes, such as the Consumer Price Index. While associated lease liabilities are not re-measured as a result of changes in the applicable price indexes, changes to required lease payments are treated as variable lease payments and recognized in the period in which the obligation for those payments was incurred. Leases with a lease term of 12 months or less, including renewal options that are reasonably certain to be exercised, that also do not include an option to purchase the underlying asset that is reasonably certain of exercise, are not recorded on the balance sheet. Instead, lease payments for these leases are recognized as a lease cost on a straight-line basis over the lease term. We elected the package of practical expedients, which among other things, does not require reassessment of lease classification. Additionally, we have made an accounting policy election whereby we chose not to separate non-lease components from lease components in agreements in all leases which we are the lessee. For annual periods prior to January 1, 2019, lease payments for these leases are recognized as a lease cost on a straight-line basis over the lease term. 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, software 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 1 to 25 years and is included in cost of revenue or selling, general and administrative expenses. Certain of our intangible assets, namely certain brands and trademarks, as well as FCC licenses, 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 or business climate or an adverse action or assessment by a regulator). We conduct our annual impairment testing as of the beginning of the fourth quarter. For goodwill, 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. If the carrying value of the reporting unit exceeds its estimated fair value, then an impairment charge is recognized for that excess up to the amount of recorded goodwill. We estimate the fair value of our reporting units using an income approach. We estimate the fair value of our intangible assets with indefinite lives using either the income approach or the market approach. Under the income approach, we calculate fair value based on the present value of estimated future cash flows. Under the market approach, we calculate fair value based on recent sales and selling prices of similar assets. Product Warranties For assurance-type 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 also record a warranty liability for specific matters. We assess the adequacy of our recorded warranty liabilities quarterly and adjust amounts as necessary. For service-type warranties (i.e. non-standard warranties) costs incurred to fulfill the extended or service warranty are recognized/recorded as the costs are incurred. Post-retirement Benefit Plans The determination of defined benefit pension and post-retirement 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, years of service 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 post-retirement cost, the calculation of the expected return on plan assets is generally derived by applying the expected long-term rate of return on the market-related value of plan assets. The market-related value of plan assets is 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 average 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”) to be 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. The excess of the acquisition price over those estimated fair values is recorded as goodwill. 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. 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. During the fourth quarter of 2018, we adopted new accounting guidance that eliminates the concept of ineffectiveness for cash flow and net investment hedges. Prior to this adoption, the effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges of foreign exchange risk was recorded in other comprehensive income ("OCI") and was 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 |
Acquisitions and Divestitures
Acquisitions and Divestitures | 12 Months Ended |
Dec. 31, 2020 | |
Business Combinations [Abstract] | |
Acquisitions and Divestitures | Acquisitions and Divestitures 2020 Acquisitions and Divestitures We had no material acquisition or divestiture activity during the 12 months ended December 31, 2020. 2019 Acquisitions During the 12 months ended December 31, 2019 we spent approximately $18 million, net of cash received on acquisition activity. 2018 Acquisitions and Divestitures Pure Technologies Ltd. On January 31, 2018, we acquired all the issued and outstanding shares of Pure, a leader in intelligent leak detection and condition assessment solutions for water distribution networks for approximately $420 million, net of cash received. Acquisition costs of $4 million were reflected as a component of selling, general and administrative expenses in our Consolidated Income Statement for the year ended December 31, 2018. Pure’s results of operations were consolidated with the Company effective February 1, 2018 and are reflected in the Measurement & Control Solutions segment. The Pure purchase price allocation as of January 31, 2018 is shown in the following table: (in millions) Amount Cash $ 14 Receivables 23 Inventories 4 Prepaid and other current assets 2 Property, plant and equipment 22 Intangible assets 149 Other long-term assets 1 Accounts payable (3) Accrued and other current liabilities (12) Deferred income tax liabilities (25) Other non-current accrued liabilities (2) Total identifiable net assets 173 Goodwill 261 Total consideration $ 434 The fair values of Pure's assets and liabilities were determined based on estimates and assumptions which management believes are reasonable. Goodwill arising from the acquisition consists largely of synergies and economies of scale expected from combining the operations of Pure and Xylem. All of the goodwill was assigned to the Measurement & Control Solutions segment and is not deductible for tax purposes. The estimate of the fair value of Pure's identifiable intangible assets was determined primarily using the “income approach,” which requires a forecast of all of the expected future cash flows either through the use of the multi-period excess earnings method or the relief-from-royalty method. Some of the more significant assumptions inherent in the development of intangible asset values include: the amount and timing of projected future cash flows, the discount rate selected to measure the risks inherent in the future cash flows, the assessment of the intangible asset’s life cycle, as well as other factors. The following table summarizes key information underlying identifiable intangible assets related to the Pure acquisition: Category Life Amount Customer Relationships 17 - 18 years $ 84 Technology 3 - 10 years 38 Tradenames 20 years 21 Internally Developed Software 3 years 6 Total $ 149 The following table summarizes, on an unaudited pro forma basis, the condensed combined results of operations of the Company for the year ended December 31, 2018 assuming the acquisition of Pure was made on January 1, 2017: (in millions) Year Ended December 31, 2018 Revenue $5,212 Net income $546 The foregoing unaudited pro forma results are for informational purposes only and are not necessarily indicative of the actual results of operations that might have occurred had the acquisition occurred on January 1, 2017, nor are they necessarily indicative of future results. The pro forma financial information includes the impact of purchase accounting and other nonrecurring items directly attributable to the acquisition, which include: • Amortization expense of acquired intangibles • Adjustments to the depreciation of property, plant and equipment reflecting the impact of the calculated fair value of those assets in accordance with purchase accounting • Adjustments to interest expense to remove historical Pure interest costs and reflect Xylem's current debt profile • The related tax impact of the above referenced adjustments The pro forma results do not include any cost savings or operational synergies that may be generated or realized due to the acquisition of Pure. During the 11 month period ended December 31, 2018 Pure had revenue and an operating loss of $96 million and $2 million, respectively. Other Acquisition Activity During the 12 months ended December 31, 2018 we spent approximately $13 million, net of cash received on other acquisition activity. Divestiture During the third quarter we divested our Precision Die Casting business for approximately $22 million, net of cash assumed. The sale resulted in an immaterial gain, which is reflected in gain from sale of business in our Consolidated Income Statements. The business, which was part of our Measurement & Controls Solutions segment, provided aluminum die casting products primarily to customers in the automotive sector. The business reported 2017 annual revenue of approximately $32 million. |
Restructuring and Asset Impairm
Restructuring and Asset Impairment Charges | 12 Months Ended |
Dec. 31, 2020 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Asset Impairment Charges | Restructuring and Asset Impairment Charges In response to the changes in business and economic conditions arising as a result of the COVID-19 pandemic, on June 2, 2020 management committed to a restructuring plan that includes actions across our businesses and functions globally. The plan is designed to support our long-term financial resilience and simplify our operations, strengthen our competitive positioning and better serve our customers. Restructuring charges recognized as a result of this plan included reduction of headcount across all segments and asset impairments within our Measurement & Control Solutions segment. Immaterial restructuring charges incurred during the first quarter are included in the plan information presented below. During 2019 and 2018, we incurred restructuring charges primarily related to an effort to reposition our European and North American businesses to optimize our cost structure and improve our operational efficiency and effectiveness. The charges included the reduction of headcount and consolidation of facilities within our Measurement & Control Solutions and Water Infrastructure segments, as well as headcount reductions within our Applied Water segment. The following table presents the components of restructuring expense and asset impairment charges incurred during each of the previous 3 years: Year Ended December 31, (in millions) 2020 2019 2018 By component: Severance and other charges $ 36 $ 51 $ 19 Lease related charges — 1 1 Asset impairment 18 — — Other restructuring charges 1 2 1 Reversal of restructuring accruals (1) (1) (1) Total restructuring charges 54 53 20 Asset impairment charges 21 10 2 Total restructuring and asset impairment charges $ 75 $ 63 $ 22 By segment: Water Infrastructure $ 20 $ 20 $ 11 Applied Water 4 5 2 Measurement & Control Solutions 51 38 9 Restructuring The following table displays a roll-forward of the restructuring accruals, presented on our Consolidated Balance Sheets within "accrued and other current liabilities" and "other non-current accrued liabilities," for the years ended December 31, 2020 and 2019: (in millions) 2020 2019 Restructuring accruals - January 1 $ 27 $ 5 Restructuring charges 54 53 Cash payments (36) (30) Asset impairment (18) — Foreign currency and other 2 (1) Restructuring accruals - December 31 $ 29 $ 27 By segment: Water Infrastructure $ 4 $ 1 Applied Water 1 — Measurement & Control Solutions 18 19 Regional selling locations (a) 5 7 Corporate and other 1 — (a) Regional selling locations consist primarily of selling and marketing organizations that incurred restructuring expense which was allocated to the segments. The liabilities associated with restructuring expense were not allocated to the segments. The following table presents expected restructuring spend in 2020 and thereafter: (in millions) Water Infrastructure Applied Water Measurement & Control Solutions Corporate Total Actions Commenced in 2020: Total expected costs $ 26 $ 11 $ 34 $ 2 $ 73 Costs incurred during 2020 19 4 30 — 53 Total expected costs remaining $ 7 $ 7 $ 4 $ 2 $ 20 Actions Commenced in 2019: Total expected costs $ 19 $ 5 $ 27 $ — $ 51 Costs incurred during 2019 18 5 27 — 50 Costs incurred during 2020 1 — — — 1 Total expected costs remaining $ — $ — $ — $ — $ — The Water Infrastructure, Applied Water, and Measurement & Control Solutions actions commenced in 2020 consist primarily of severance charges in each of the segments and asset impairment charges in our Measurement & Control Solutions segment. These actions are expected to continue through 2021. The Water Infrastructure, Applied Water, and Measurement & Control Solutions actions commenced in 2019 consist primarily of severance charges. The actions commenced in 2019 are complete. During the second quarter of 2020, the discontinuance of a product line resulted in $17 million of asset impairments, primarily related to customer relationships, trademarks and fixed assets within our Measurement & Control Solutions segment. Asset Impairment During the third quarter of 2020, we determined that certain assets including software and proprietary technology within our Measurement & Control Solutions segment were impaired. Accordingly we recognized an impairment charge of $11 million. Refer to Note 12, "Goodwill and Other Intangible Assets," for additional information. During the second quarter of 2020, we determined that internally developed in-process software within our Measurement & Control Solutions segment was impaired as a result of actions taken to prioritize strategic investments. Accordingly we recognized an impairment charge of $10 million. Refer to Note 12, "Goodwill and Other Intangible Assets," for additional information. During the third quarter of 2019, we determined that certain assets within our Measurement & Control Solutions segment, including customer relationships, internally developed software, proprietary technology, and plant property & equipment, were impaired. Accordingly we recognized an impairment charge of $7 million. Refer to Note 12, "Goodwill and Other Intangible Assets," for additional information. During the first quarter of 2019, we determined that certain assets within our Measurement & Control Solutions segment, including a customer relationship, were impaired. Accordingly we recognized an impairment charge of $3 million. Refer to Note 12, "Goodwill and Other Intangible Assets," for additional information. |
Revenue
Revenue | 12 Months Ended |
Dec. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue Disaggregation of Revenue The following table illustrates the sources of revenue: Year Ended December 31, (in millions) 2020 2019 2018 Revenue from contracts with customers $ 4,681 $ 5,002 $ 4,963 Lease Revenue 195 247 244 Total $ 4,876 $ 5,249 $ 5,207 The following table reflects revenue from contracts with customers by application: Year Ended December 31, (in millions) 2020 2019 2018 Water Infrastructure Transport $ 1,484 $ 1,533 $ 1,535 Treatment 400 397 397 Applied Water Building Services 804 848 828 Industrial Water 630 693 706 Measurement and Control Solutions Water 689 768 692 Energy 276 337 338 Software as a Service 92 99 123 Test 306 327 344 Total $ 4,681 $ 5,002 $ 4,963 The following table reflects revenue from contracts with customers by geographical region: Year Ended December 31, (in millions) 2020 2019 2018 Water Infrastructure United States $ 558 $ 593 $ 539 Europe 751 729 758 Asia Pacific 341 358 344 Other 234 250 291 Applied Water United States 754 816 797 Europe 356 362 386 Asia Pacific 152 164 153 Other 172 199 198 Measurement and Control Solutions United States 856 972 913 Europe 266 257 273 Asia Pacific 109 118 144 Other 132 184 167 Total $ 4,681 $ 5,002 $ 4,963 Contract Balances We receive payments from customers based on a billing schedule as established in our contracts. Contract assets relate to costs incurred to perform in advance of scheduled billings. Contract liabilities relate to payments received in advance of performance under the contracts. Changes in contract assets and liabilities are due to our performance under the contract. The table below provides contract assets, contract liabilities, and significant changes in contract assets and liabilities: (in millions) Contract Assets (a) Contract Liabilities Balance at 1/1/2019 $ 96 $ 113 Additions, net 81 114 Revenue recognized from opening balance — (91) Billings transferred to accounts receivable (80) — Other 9 (1) Balance at 1/1/2020 $ 106 $ 135 Additions, net 118 120 Revenue recognized from opening balance — (93) Billings transferred to accounts receivable (110) — Other 3 4 Balance at 12/31/2020 $ 117 $ 166 (a) Excludes receivable balances which are disclosed on the balance sheet Performance obligations Delivery schedules vary from customer to customer based upon their requirements. Typically, large projects require longer lead production cycles and delays can occur from time to time. As of December 31, 2020, the aggregate amount of the transaction price allocated to performance obligations that are unsatisfied or partially unsatisfied for contracts with performance obligations, amount to $422 million. We expect to recognize the majority of revenue upon the completion of satisfying these performance obligations in the following 60 months. The Company elects to apply the practical expedient to exclude from this disclosure revenue related to performance obligations that are part of a contract whose original expected duration is less than one year. |
Other Non-Operating Income, Net
Other Non-Operating Income, Net | 12 Months Ended |
Dec. 31, 2020 | |
Other Income and Expenses [Abstract] | |
Other Non-Operating Income, Net | Other Non-Operating (Expense) Income, Net The components of other non-operating income, net are as follows: Year Ended December 31, (in millions) 2020 2019 2018 Interest income $ 7 $ 5 $ 4 Income from joint ventures 2 3 5 Other (expense) income – net (14) (12) 4 Total other non-operating (expense) income, net $ (5) $ (4) $ 13 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The source of pre-tax income and the components of income tax expense are as follows: Year Ended December 31, (in millions) 2020 2019 2018 Income (loss) components: Domestic $ (33) $ 203 $ 208 Foreign 318 213 377 Total pre-tax income $ 285 $ 416 $ 585 Income tax expense components: Current: Domestic – federal $ 24 $ 39 $ 9 Domestic – state and local 5 13 13 Foreign 33 40 61 Total Current 62 92 83 Deferred: Domestic – federal $ (21) $ 7 $ 17 Domestic – state and local (8) (1) 5 Foreign (2) (83) (69) Total Deferred (31) (77) (47) Total income tax provision $ 31 $ 15 $ 36 Effective income tax rate 10.9 % 3.7 % 6.1 % 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, 2020 2019 2018 Tax provision at U.S. statutory rate 21.0 % 21.0 % 21.0 % Increase (decrease) in tax rate resulting from: State income taxes 0.7 2.7 2.3 Uncertain tax positions (3.9) 0.4 2.6 Valuation allowance 0.5 1.2 (47.1) Tax exempt interest (4.5) (3.0) (1.4) Foreign tax rate differential (0.9) 0.7 2.9 Impact of foreign earnings, net 5.3 1.6 (1.7) Tax incentives (7.4) (9.6) (6.2) Intercompany sale of assets — — 35.5 Other – net 2.2 1.7 (0.3) Rate change (1.3) (18.1) — Goodwill impairment 2.9 7.8 — Federal R&D tax credit (1.3) (1.2) (0.8) Stock compensation (2.4) (1.5) (0.7) Effective income tax rate 10.9 % 3.7 % 6.1 % Certain prior year amounts included within the table of rate reconciliation above have been adjusted for consistency with the current year presentation. These adjustments had no effect on the reported Consolidated Balance Sheets, Consolidated Statements of Income, Comprehensive Income, Stockholders’ Equity, or Cash Flow. 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) 2020 2019 Deferred tax assets: Employee benefits $ 127 $ 106 Accrued expenses 35 26 Loss and other tax credit carryforwards 270 240 Inventory 6 6 Lease Liabilities 64 57 Other 41 3 543 438 Valuation allowance (217) (191) Net deferred tax asset $ 326 $ 247 Deferred tax liabilities: Intangibles $ 138 $ 160 Investment in foreign subsidiaries 5 7 Property, plant and equipment 77 78 Lease right-of-use assets 62 57 Other 30 29 Total deferred tax liabilities $ 312 $ 331 Management assesses all available positive and negative evidence, including prudent and feasible tax planning strategies, and estimates if sufficient future taxable income will be generated to realize existing deferred tax assets. On the basis of this evaluation, as of December 31, 2020, a valuation allowance of $217 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. A reconciliation of the change in valuation allowance on deferred tax assets is as follows: (in millions) 2020 2019 2018 Valuation allowance — January 1 $ 191 $ 234 $ 350 Change in assessment (a) 1 (2) 1 Current year operations 7 2 (271) Foreign currency and other (b) 18 (43) 154 Valuation allowance — December 31 $ 217 $ 191 $ 234 (a) Increase in assessment in 2020 is primarily attributable to loss positions in various jurisdictions. Decrease in assessment in 2019 is primarily attributable to profitability of certain jurisdictions. (b) Included in foreign currency and other in 2019 is a decrease in net operating losses due primarily to the liquidation of a foreign subsidiary for which a valuation allowance was maintained. Included in foreign currency and other in 2018 is an increase in net operating losses due to amended prior year tax returns for which a valuation allowance was recorded. Deferred taxes are classified in the Consolidated Balance Sheets as follows: December 31, (in millions) 2020 2019 Non-current assets $ 256 $ 226 Non-current liabilities (242) (310) Total net deferred tax liabilities $ 14 $ (84) Tax attributes available to reduce future taxable income begin to expire as follows: (in millions) December 31, 2020 First Year of Expiration U.S. net operating loss $ 7 December 31, 2024 State net operating loss 97 December 31, 2021 State excess interest expense 10 Indefinitely State tax credits 1 Indefinitely Foreign net operating loss 1,153 December 31, 2021 Foreign tax credits 4 December 31, 2030 The Company has provided a deferred tax liability of $7 million for net foreign withholding taxes and state income taxes on $500 million of earnings expected to be repatriated to the U.S. parent, as of December 31, 2020. The Company currently does not intend to repatriate approximately $1.6 billion taxed under the Tax Act. The amount of deferred tax that would be recorded if such amounts were repatriated is not reasonably estimable. 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 or upon the completion of the litigation process, 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 resolution. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: (in millions) 2020 2019 2018 Unrecognized tax benefits — January 1 $ 129 $ 136 $ 130 Current year tax positions — 3 — Prior year tax positions (3) (5) 7 Settlements (12) (5) (1) Unrecognized tax benefits — December 31 $ 114 $ 129 $ 136 The amount of unrecognized tax benefits at December 31, 2020 which, if ultimately recognized, will reduce our effective tax rate is $114 million. We believe that it is reasonably possible that unrecognized tax benefits will be reduced by approximately $1 million within the next 12 months as a result of the expiration of certain statute of limitations. 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 Income Statements. The amount of accrued interest relating to unrecognized tax benefits as of December 31, 2020 and 2019 was $8 million and $8 million. During 2019, Xylem’s Swedish subsidiary received a tax assessment for the 2013 tax year related to the tax treatment of an intercompany transfer of certain intellectual property that was made in connection with a reorganization of our European businesses. The assessment asserts an aggregate amount of approximately $80 million for tax, penalties and interest. Xylem filed an appeal with the Administrative Court of Stockholm. Management, in consultation with external legal advisors, believes it is more likely than not that Xylem will prevail on the proposed assessment and is vigorously defending our position through litigation. As of December 31, 2020, we have not recorded any unrecognized tax benefits related to this uncertain tax position. The following table summarizes our earliest open tax years by major jurisdiction: Jurisdiction Earliest Open Year Italy 2014 Luxembourg 2016 Sweden 2013 Germany 2012 United Kingdom 2014 United States 2017 Switzerland 2017 |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share The following is a reconciliation of the shares used in calculating basic and diluted EPS: Year Ended December 31, 2020 2019 2018 Net income (in millions) $ 254 $ 401 $ 549 Shares (in thousands): Weighted average common shares outstanding 180,094 179,958 179,750 Add: Participating securities (a) 22 29 27 Weighted average common shares outstanding — Basic 180,116 179,987 179,777 Plus incremental shares from assumed conversions: (b) Dilutive effect of stock options 671 803 876 Dilutive effect of restricted stock units and performance share units 312 406 479 Weighted average common shares outstanding — Diluted 181,099 181,196 181,132 Basic earnings per share $ 1.41 $ 2.23 $ 3.05 Diluted earnings per share $ 1.40 $ 2.21 $ 3.03 (a) Restricted stock awards containing rights to non-forfeitable dividends that participate in undistributed earnings with common shareholders are considered participating securities for purposes of computing EPS. (b) Incremental shares from stock options, restricted stock units 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 units and performance share units, reduced by the repurchase of shares with the proceeds from the assumed exercises and unrecognized compensation expense for outstanding awards. Performance share units are included in the treasury stock calculation of diluted earnings per share based upon achievement of underlying performance and market conditions at the end of the reporting period, as applicable. See Note 17, "Share-Based Compensation Plans" for further detail on the performance share units . Year Ended December 31, (in thousands) 2020 2019 2018 Stock options 1,545 1,383 1,300 Restricted stock units 362 348 333 Performance share units 305 394 465 |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories The components of total inventories are summarized as follows: December 31, (in millions) 2020 2019 Finished goods $ 221 $ 212 Work in process 49 47 Raw materials 288 280 Total inventories $ 558 $ 539 |
Property, Plant and Equipment
Property, Plant and Equipment | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Property, Plant and Equipment The components of total property, plant and equipment, net are as follows: December 31, (in millions) 2020 2019 Land, buildings and improvements $ 369 $ 339 Machinery and equipment 941 861 Equipment held for lease or rental 241 256 Furniture and fixtures 124 118 Construction work in progress 110 104 Other 29 24 Total property, plant and equipment, gross 1,814 1,702 Less accumulated depreciation 1,157 1,044 Total property, plant and equipment, net $ 657 $ 658 Depreciation expense was $117 million, $117 million, and $117 million for 2020, 2019, and 2018, respectively. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Leases | Leases Leasing Arrangements We lease certain offices, manufacturing buildings, transportation equipment, machinery, computers and other equipment. Our most significant lease liabilities relate to real estate leases. These leases include renewal, termination or purchase options, and we have assessed these to determine whether it is reasonably certain for us to exercise any of the previously mentioned options. All periods relating to options that are reasonably certain to be exercised have been included in the lease term of the respective leases. We did not identify any events or conditions during the 12 month period ended December 31, 2020 to indicate that a reassessment or re-measurement of our existing leases was required. There also were no impairment indicators identified during the 12 month period ended December 31, 2020 that required an impairment test for the Company’s ROU assets. Our current lease liabilities of $63 million and $61 million are included in "Accrued and other current liabilities" as of December 31, 2020 and 2019, respectively. Our non-current lease liabilities of $216 million and $185 million are included in "Other non-current accrued liabilities" as of December 31, 2020 and 2019, respectively. Our ROU asset balances are included in "Other non-current assets." The net balance of our ROU assets as of December 31, 2020 and 2019 was $272 million and $241 million, respectively. These balances include an immaterial amount related to finance leases. The components of our lease cost were as follows: Year Ended December 31, (in millions) 2020 2019 Lease cost Operating lease cost $ 77 $ 76 Short-term lease cost 2 9 Variable lease cost 22 19 Total lease cost $ 101 $ 104 The supplemental cash flow information related to leases are as follows: Year Ended December 31, (in millions) 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 75 $ 73 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 64 $ 33 Information relating to the lease term and discount rate are as follows: Year Ended December 31, 2020 2019 Weighted-average remaining lease term (years) Operating leases 7 Years 6 Years Weighted-average discount rate Operating leases 2.5% 2.7% As of December 31, 2020, the maturities of operating lease liabilities were as follows: (in millions) 2021 $ 68 2022 54 2023 42 2024 32 2025 24 Thereafter 77 Total lease payments 297 Less: Imputed interest (22) Total (1) $ 275 (1) Excludes $27 million of legally binding minimum lease payments for leases signed but not yet commenced. Lease payments are expected to begin in 2021 when asset construction is complete. Disclosures related to periods prior to adoption of the New Lease Standard as reported and provided in our 2018 Annual Report. We lease certain offices, manufacturing buildings, machinery, computers and other equipment. We often pay maintenance, insurance and tax expense related to leased assets. Total rent expense for the year ended December 31, 2018 was $81 million. Lessor arrangements In addition to manufacturing and selling equipment, we also lease out equipment to customers in exchange for consideration. These arrangements are generally short term in nature and predominantly involve the rental of pumps and accessories within the Water Infrastructure segment. Rental arrangements generally do not provide the customer the right to purchase the equipment as Xylem’s strategy is to rent these items over their useful lives. Customers may be billed based on daily, weekly or monthly rates depending on the expected rental period. We assessed that these arrangements constitute a lease under ASC 842, and have recognized them as operating leases. In situations where arrangements contain both the sale of products and a leasing component, contract consideration is allocated based on relative standalone selling price. Total revenue from lease arrangements was $195 million and $247 million for the 12 month period ended December 31, 2020 and 2019, respectively. Our gross assets available for rent were $241 million and $256 million |
Leases | Leases Leasing Arrangements We lease certain offices, manufacturing buildings, transportation equipment, machinery, computers and other equipment. Our most significant lease liabilities relate to real estate leases. These leases include renewal, termination or purchase options, and we have assessed these to determine whether it is reasonably certain for us to exercise any of the previously mentioned options. All periods relating to options that are reasonably certain to be exercised have been included in the lease term of the respective leases. We did not identify any events or conditions during the 12 month period ended December 31, 2020 to indicate that a reassessment or re-measurement of our existing leases was required. There also were no impairment indicators identified during the 12 month period ended December 31, 2020 that required an impairment test for the Company’s ROU assets. Our current lease liabilities of $63 million and $61 million are included in "Accrued and other current liabilities" as of December 31, 2020 and 2019, respectively. Our non-current lease liabilities of $216 million and $185 million are included in "Other non-current accrued liabilities" as of December 31, 2020 and 2019, respectively. Our ROU asset balances are included in "Other non-current assets." The net balance of our ROU assets as of December 31, 2020 and 2019 was $272 million and $241 million, respectively. These balances include an immaterial amount related to finance leases. The components of our lease cost were as follows: Year Ended December 31, (in millions) 2020 2019 Lease cost Operating lease cost $ 77 $ 76 Short-term lease cost 2 9 Variable lease cost 22 19 Total lease cost $ 101 $ 104 The supplemental cash flow information related to leases are as follows: Year Ended December 31, (in millions) 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 75 $ 73 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 64 $ 33 Information relating to the lease term and discount rate are as follows: Year Ended December 31, 2020 2019 Weighted-average remaining lease term (years) Operating leases 7 Years 6 Years Weighted-average discount rate Operating leases 2.5% 2.7% As of December 31, 2020, the maturities of operating lease liabilities were as follows: (in millions) 2021 $ 68 2022 54 2023 42 2024 32 2025 24 Thereafter 77 Total lease payments 297 Less: Imputed interest (22) Total (1) $ 275 (1) Excludes $27 million of legally binding minimum lease payments for leases signed but not yet commenced. Lease payments are expected to begin in 2021 when asset construction is complete. Disclosures related to periods prior to adoption of the New Lease Standard as reported and provided in our 2018 Annual Report. We lease certain offices, manufacturing buildings, machinery, computers and other equipment. We often pay maintenance, insurance and tax expense related to leased assets. Total rent expense for the year ended December 31, 2018 was $81 million. Lessor arrangements In addition to manufacturing and selling equipment, we also lease out equipment to customers in exchange for consideration. These arrangements are generally short term in nature and predominantly involve the rental of pumps and accessories within the Water Infrastructure segment. Rental arrangements generally do not provide the customer the right to purchase the equipment as Xylem’s strategy is to rent these items over their useful lives. Customers may be billed based on daily, weekly or monthly rates depending on the expected rental period. We assessed that these arrangements constitute a lease under ASC 842, and have recognized them as operating leases. In situations where arrangements contain both the sale of products and a leasing component, contract consideration is allocated based on relative standalone selling price. Total revenue from lease arrangements was $195 million and $247 million for the 12 month period ended December 31, 2020 and 2019, respectively. Our gross assets available for rent were $241 million and $256 million |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets Goodwill Changes in the carrying value of goodwill by reportable segment during the years ended December 31, 2020 and 2019 are as follows: (in millions) Water Applied Water Measurement & Control Solutions Total Balance as of December 31, 2018 $ 653 $ 516 $ 1,807 $ 2,976 Activity in 2019 Acquired — — 19 19 Impairment — — (148) (148) Foreign currency and other (2) (3) (3) (8) Balance as of December 31, 2019 $ 651 $ 513 $ 1,675 $ 2,839 Activity in 2020 Impairment — — (58) (58) Foreign currency and other 17 16 40 73 Balance as of December 31, 2020 $ 668 $ 529 $ 1,657 $ 2,854 As of December 31, 2020 and 2019, goodwill included accumulated impairment losses of $206 million and $148 million, respectively, within the Measurement & Control Solutions segment. During the fourth quarter of 2020, we performed our annual impairment assessment and determined that the estimated fair values of our goodwill reporting units were in excess of each of their carrying values. 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. During the third quarter of 2020, the Company recorded a goodwill impairment charge of $58 million related to the AIA goodwill reporting unit within our Measurement & Control Solutions segment. The AIA goodwill reporting unit is comprised of our assessment services business (primarily the Pure acquisition) as well as our digital solutions business. The impairment resulted from management's updated forecast of future cash flows for the AIA businesses, which reflects significant negative volume impacts from the COVID-19 pandemic, primarily on our assessment services business. Our ongoing investment in the AIA businesses also continues to impact near term profitability. These factors drove the decrease in forecasted cash flows, and as such, the calculated fair value of the AIA goodwill reporting unit below its carrying value as of the third quarter. To determine the fair value of the AIA goodwill reporting unit, the Company used the income approach. Under the income approach, the fair value of the AIA goodwill reporting unit was based on the present value of the estimated cash flows that the goodwill reporting unit is expected to generate over its remaining life. Cash flow projections were based on management’s estimates of revenue growth rates and operating margins, taking into consideration industry and market conditions. The discount rate was based on the weighted average cost of capital appropriate for the AIA goodwill reporting unit. During the third quarter of 2019, the Company recorded a goodwill impairment charge of $148 million related to the AIA goodwill reporting unit. The impairment resulted from a downward revision of forecasted future cash flows. Factors that contributed to the revised forecast in the third quarter include lower than expected results as compared to prior forecasts, largely as a result of slower-than-expected conversion of pipeline opportunities to revenue. Additionally, we have continued to invest in the AIA platform ahead of the adoption curve, which has also impacted the near-term profitability of the business. These factors drove the decrease in forecasted cash flows, and as such, the calculated fair value of the AIA goodwill reporting unit below its carrying value as of the third quarter. To determine the fair value of the AIA goodwill reporting unit, the Company used the income approach. Other Intangible Assets Information regarding our other intangible assets is as follows: (in millions) December 31, 2020 December 31, 2019 Carrying Accumulated Net Carrying Accumulated Net Customer and distributor relationships $ 941 $ (410) $ 531 $ 945 $ (352) $ 593 Proprietary technology and patents 206 (131) 75 204 (111) 93 Trademarks 143 (63) 80 148 (52) 96 Software 500 (265) 235 428 (206) 222 Other 21 (18) 3 20 (16) 4 Indefinite-lived intangibles 169 — 169 166 — 166 Other intangibles $ 1,980 $ (887) $ 1,093 $ 1,911 $ (737) $ 1,174 We determined that no impairment of the indefinite-lived intangibles existed as of the measurement date of our impairment assessment in 2020. 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. During the third quarter of 2020, the Company assessed whether the carrying amounts of the AIA reporting unit’s long-lived assets may not be recoverable based on the updated forecast of future cash flows, and therefore impaired. Our assessment resulted in an impairment charge of $11 million, primarily related to software and proprietary technology. 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 Income Statements. During the second quarter of 2020, we recognized impairment charges of $16 million primarily related to customer relationships and trademarks due to discontinuance of a product line within our Measurement & Control Solutions segment. We also determined that internally developed in-process software within our Measurement & Control Solutions segment was impaired as a result of actions taken to prioritize strategic investments and recognized an impairment charge of $10 million. During the third quarter of 2019, the Company also assessed whether the carrying amounts of the AIA reporting unit’s long-lived assets may not be recoverable based on the revised forecasted cash flows, and therefore impaired. Our assessment resulted in an impairment charge of $7 million, primarily related to customer relationships, proprietary technology, software and property, plant and equipment. 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 Income Statements. During the first quarter of 2019, we determined that the intended use of a finite-lived customer relationship within the test application of our Measurement & Control Solutions segment had changed. Accordingly we recorded a $3 million impairment charge. The charge was also calculated using the income approach and is reflected in “Restructuring and asset impairment charges” in our Consolidated Income Statements. Customer and distributor relationships, proprietary technology and patents, trademarks, software and other are amortized over weighted average lives of approximately 14 years, 14 years, 13 years, 5 years and 4 years, respectively. Total amortization expense for intangible assets was $134 million, $140 million, and $144 million for 2020, 2019 and 2018, respectively. Estimated amortization expense for each of the five succeeding years is as follows: (in millions) 2021 $ 128 2022 121 2023 115 2024 105 2025 102 |
Accrued and Other Current Liabi
Accrued and Other Current Liabilities | 12 Months Ended |
Dec. 31, 2020 | |
Payables and Accruals [Abstract] | |
Accrued and Other Current Liabilities | Accrued and Other Current Liabilities The components of total accrued and other current liabilities are as follows: December 31, (in millions) 2020 2019 Compensation and other employee-benefits $ 258 $ 199 Customer-related liabilities 186 153 Accrued taxes 103 79 Lease liabilities 63 61 Accrued warranty costs 54 36 Other accrued liabilities 123 100 Total accrued and other current liabilities $ 787 $ 628 |
Credit Facilities and Long-Term
Credit Facilities and Long-Term Debt | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Credit Facilities and Long-Term Debt | Credit Facilities and Debt Total debt outstanding is summarized as follows: December 31, (in millions) 2020 2019 4.875% Senior Notes due 2021 (a) $ 600 $ 600 2.250% Senior Notes due 2023 (a) 612 557 3.250% Senior Notes due 2026 (a) 500 500 1.950% Senior Notes due 2028 (b) 500 — 2.250% Senior Notes due 2031 (b) 500 — 4.375% Senior Notes due 2046 (a) 400 400 Commercial paper — 276 Debt issuance costs and unamortized discount (c) (28) (17) Total debt 3,084 2,316 Less: short-term borrowings and current maturities of long-term debt 600 276 Total long-term debt $ 2,484 $ 2,040 (a) The fair value of our Senior Notes 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 2021 was $620 million and $629 million as of December 31, 2020 and 2019, respectively. The fair value of our Senior Notes due 2023 was $640 million and $591 million as of December 31, 2020 and 2019, respectively. The fair value of our Senior Notes due 2026 was $563 million and $518 million as of December 31, 2020 and 2019, respectively. The fair value of our Senior Notes due 2046 was $496 million and $431 million as of December 31, 2020 and 2019, respectively. (b) The fair value of our Senior Notes 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 2028 and 2031 was $529 million and $527 million, respectively, as of December 31, 2020. (c) The debt issuance costs and 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 Income Statements over the expected remaining terms of the Senior Notes. Senior Notes On June 26, 2020, we issued 1.950% Senior Notes of $500 million aggregate principal amount due January 2028 (the “Senior Notes due 2028”) and 2.250% Senior Notes of $500 million aggregate principal amount due January 2031 (the “Senior Notes due 2031" and, together with the Senior Notes due 2028, the “Green Bond”). The Green Bond includes covenants that restrict our ability, and the ability of our restricted subsidiaries, to incur debt secured by liens on certain property above a threshold, to engage in certain sale and leaseback transactions involving certain property above a threshold, and to consolidate or merge, or convey or transfer all or substantially all of our assets. We may redeem the Green Bond at any time, at our option, subject to certain conditions, at specified redemption prices, plus accrued and unpaid interest to the redemption date. If a change of control triggering event (as defined in the applicable Green Bond indenture) occurs, we will be required to make an offer to purchase the notes at a price equal to 101% of their principal amount plus accrued and unpaid interest to the date of repurchase. Interest on the Green Bond is payable on January 30 and July 30 of each year beginning on January 30, 2021. As of December 31, 2020, we are in compliance with all covenants for the Green Bond. On September 20, 2011, we issued 4.875% Senior Notes of $600 million aggregate principal amount due October 2021 (the "Senior Notes due 2021"). On March 11, 2016, we issued 2.250% Senior Notes of €500 million aggregate principal amount due March 2023 (the "Senior Notes due 2023"). On October 11, 2016, we issued 3.250% Senior Notes of $500 million aggregate principal amount due October 2026 (the “Senior Notes due 2026”) and 4.375% Senior Notes of $400 million aggregate principal amount due October 2046 (the “Senior Notes due 2046” and, together with the Senior Notes due 2021, the Senior Notes due 2023 and the Senior Notes due 2026, the “Senior Notes”). The Senior Notes include covenants that restrict our ability, and the ability of our restricted subsidiaries, to incur debt secured by liens on certain property above a threshold, to engage in certain sale and leaseback transactions involving certain property above a threshold, and to consolidate or merge, or convey or transfer all or substantially all of our assets. 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. We may also redeem the Senior Notes in certain other circumstances, as set forth in the applicable Senior Notes indenture. If a change of control triggering event (as defined in the applicable 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 2021 is payable on April 1 and October 1 of each year. Interest on the Senior Notes due 2023 is payable on March 11 of each year. Interest on the Senior Notes due 2026 and the Senior Notes due 2046 is payable on May 1 and November 1 of each year. As of December 31, 2020, we are in compliance with all covenants for the Senior Notes. Credit Facilities 2019 Five-Year Revolving Credit Facility On March 5, 2019, Xylem entered into a five-year revolving credit facility (the “2019 Credit Facility”) with Citibank, N.A., as Administrative Agent, and a syndicate of lenders. The 2019 Credit Facility provides for an aggregate principal amount of up to $800 million (available in U.S. Dollars and in Euros), with increases of up to $200 million for a maximum aggregate principal amount of $1 billion at the request of Xylem and with the consent of the institutions providing such increased commitments. Interest on all loans under the 2019 Credit Facility is payable either quarterly or at the expiration of any LIBOR or EURIBOR interest period applicable thereto. Borrowings accrue interest at a rate equal to, at Xylem's election, a base rate or an adjusted LIBOR or EURIBOR rate plus an applicable margin. The 2019 Credit Facility includes customary provisions for implementation of replacement rates for LIBOR-based and EURIBOR-based loans. The 2019 Credit Facility also includes a pricing grid that determines the applicable margin based on Xylem's credit rating, with a further adjustment depending on Xylem's annual Sustainalytics Environmental, Social and Governance ("ESG") score, determined based on the methodology in effect as of March 5, 2019. Xylem will also pay quarterly fees to each lender for such lender’s commitment to lend accruing on such commitment at a rate based on our credit rating, whether such commitment is used or unused, as well as a quarterly letter of credit fee accruing on the letter of credit exposure of such lender during the preceding quarter at a rate based on the credit rating of Xylem (as adjusted for the ESG score). The 2019 Credit Facility requires that Xylem maintain a consolidated total debt to consolidated EBITDA ratio (or maximum leverage ratio), which will be based on the last four fiscal quarters; and in addition contains a number of customary covenants, including limitations on the incurrence of secured debt and debt of subsidiaries, liens, sale and lease-back transactions, mergers, consolidations, liquidations, dissolutions and sales of assets. The 2019 Credit Facility also contains customary events of default. Finally, Xylem has the ability to designate subsidiaries that can borrow under the 2019 Credit Facility, subject to certain requirements and conditions set forth in the 2019 Credit Facility. On June 22, 2020, Xylem entered into Amendment No. 1 to the 2019 Credit Facility (the "Amendment") which modified the financial covenant from a test based on the maximum leverage ratio (defined as consolidated total debt to consolidated EBITDA) to a test based on the net leverage ratio (defined as consolidated total debt less unrestricted cash and cash equivalents to consolidated EBITDA). This modification is effective through the quarter ending September 30, 2021, after which the covenant will revert back to the prior maximum leverage ratio test. The Amendment also restricts stock repurchases until March 31, 2021, except for shares of common stock in an amount not to exceed the number of shares issued after the date of the Amendment, subject to customary exceptions. As of December 31, 2020, the 2019 Credit Facility was undrawn and we are in compliance with all covenants. Commercial Paper U.S. Dollar Commercial Paper Program Our U.S. Dollar commercial paper program generally serves as a means of short-term funding with a $600 million maximum issuing balance and a combined limit of $800 million inclusive of the 2019 Credit Facility. As of December 31, 2020 and 2019, none of the Company's $600 million U.S. Dollar commercial paper program was outstanding. We have the ability to continue borrowing under this program going forward in in future periods. Euro Commercial Paper Program On June 3, 2019, Xylem entered into a Euro commercial paper program with ING Bank N.V., as administrative agent, and a syndicate of dealers. The Euro commercial paper program provides for a maximum issuing balance of up to €500 million (approximately $612 million) which may be denominated in a variety of currencies. The maximum issuing balance may be increased in accordance with the Dealer Agreement. As of December 31, 2020 and 2019, $0 million and $276 million of the Company's Euro commercial paper program was outstanding, respectively. We have the ability to continue borrowing under this program going forward in future periods. |
Derivative Financial Instrument
Derivative Financial Instruments | 12 Months Ended |
Dec. 31, 2020 | |
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 we 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, cash payments, and the value of our stockholders' equity. 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 and reduce the volatility in stockholders' equity. 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. Certain business units with exposure to foreign currency exchange risks have designated certain currency forward agreements as cash flow hedges of forecasted intercompany inventory purchases and sales. Our principal currency exposures relate to the Euro, Swedish Krona, British Pound, Canadian Dollar, Polish Zloty, and Australian Dollar. We had foreign exchange contracts with purchase notional amounts totaling $0 million and $0 million as of December 31, 2020 and 2019, respectively. We entered into new foreign exchange contracts as of the first quarter of 2021. Hedges of Net Investments in Foreign Operations We are exposed to changes in foreign currencies impacting our net investments held in foreign subsidiaries. Cross-Currency Swaps Beginning in 2015, we entered into cross-currency swaps to manage our exposure to fluctuations in the Euro-U.S. Dollar exchange rate. During the second quarter of 2019 and third quarter of 2020 we entered into additional cross-currency swaps. The total notional amount of derivative instruments designated as net investment hedges was $1,249 million and $714 million as of December 31, 2020 and 2019, respectively. Foreign Currency Denominated Debt On March 11, 2016, we issued 2.250% Senior Notes of €500 million aggregate principal amount due March 2023. We designated the entirety of the outstanding balance, or $610 million and $554 million as of December 31, 2020 and 2019, respectively, net of unamortized discount, as a hedge of a net investment in certain foreign subsidiaries. The table below presents the effect of our derivative financial instruments on the Consolidated Income Statements and Consolidated Statements of Comprehensive Income: Year Ended December 31, (in millions) 2020 2019 2018 Derivatives in Cash Flow Hedges Foreign Exchange Contracts Amount of gain (loss) recognized in OCI (a) $ 9 $ (14) $ (8) Amount of (gain) loss reclassified from OCI into revenue (a) (4) 7 — Amount of loss reclassified from OCI into cost of revenue (a) 1 5 4 Derivatives in Net Investment Hedges Cross-Currency Swaps Amount of (loss) gain recognized in OCI (a) $ (103) $ 22 $ 22 Amount of income recognized in Interest Expense 19 16 2 Foreign Currency Denominated Debt Amount of (loss) gain recognized in OCI (a) $ (55) $ 13 $ 27 (a) Effective portion As of December 31, 2020, $3 million of the net gains on cash flow hedges are expected to be reclassified into earnings in the next 12 months. As of December 31, 2020, no gains or losses on the net investment hedges are expected to be reclassified into earnings over their duration. The ineffective portion of the change in fair value of a cash flow hedge was not material for 2020, 2019, and 2018. The net investment hedges did not experience any ineffectiveness in 2020, 2019 and 2018. The fair values of our derivative assets and liabilities are measured on a recurring basis using Level 2 inputs and are determined through the use of models that consider various assumptions including yield curves, time value and other measurements. The fair values of our derivative contracts currently included in our hedging program were as follows: December 31, (in millions) 2020 2019 Derivatives designated as hedging instruments Assets Net Investment Hedges Other non-current assets — 4 Liabilities Net Investment Hedges Other non-current liabilities (117) (24) The fair value of our long-term debt, due in 2023, designated as a net investment hedge was $640 million and $591 million as of December 31, 2020 and 2019, respectively. |
Postretirement Benefit Plans
Postretirement Benefit Plans | 12 Months Ended |
Dec. 31, 2020 | |
Retirement Benefits [Abstract] | |
Postretirement Benefit Plans | Post-retirement Benefit Plans Defined contribution plans – 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 eligible pay. Matching obligations, the majority of which were funded in cash in connection with the plans, and other company contributions are as follows: (in millions) Defined Contribution 2020 $ 56 2019 49 2018 39 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 267 thousand and 302 thousand shares of Xylem Inc. common stock in the Xylem Stock Fund at December 31, 2020 and 2019, respectively. Defined benefit pension plans and other post-retirement plans – We historically have maintained qualified and non-qualified 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 post-retirement benefit plans are all unfunded plans in the U.S. and Canada. During 2020 and 2019, we made several amendments to plans that had no material impact to the Company's financial statements. Amounts recognized in the Consolidated Balance Sheets for pension and other employee-related benefit plans (collectively, "Post-retirement Plans") reflect the funded status of the post-retirement benefit plans. The following table provides a summary of the funded status of our Post-retirement Plans, the presentation of such balances and a summary of amounts recorded within accumulated other comprehensive income: (in millions) December 31, 2020 December 31, 2019 Pension Other Total Pension Other Total Fair value of plan assets $ 691 $ — $ 691 $ 605 $ — $ 605 Projected benefit obligation (1,155) (44) (1,199) (959) (49) (1,008) Funded status $ (464) $ (44) $ (508) $ (354) $ (49) $ (403) Amounts recognized in the balance sheet Other non-current assets $ 27 $ — $ 27 $ 58 $ — $ 58 Accrued and other current liabilities (13) (3) (16) (13) (3) (16) Accrued post-retirement benefits (478) (41) (519) (399) (46) (445) Net amount recognized $ (464) $ (44) $ (508) $ (354) $ (49) $ (403) Accumulated other comprehensive income (loss): Net actuarial losses $ (409) $ (18) $ (427) $ (330) $ (19) $ (349) Prior service credit (3) 9 6 (3) 7 4 Total $ (412) $ (9) $ (421) $ (333) $ (12) $ (345) The unrecognized amounts recorded in accumulated other comprehensive income will be subsequently recognized as expense 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 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 Company has initiated the process for a full buy-out of its largest defined benefit plan in the U.K.. In order to prepare for a buy-out, the plan's assets were converted to cash, cash equivalents or other highly liquid assets as of the third quarter 2019. In addition, the Company completed an enhanced transfer value ("ETV") exercise for the deferred vested participants of the plan. The ETV offered the participants an enhanced lump sum to transfer their full pension rights out of the plan. Lump sum payments of $21 million were paid out of the plan assets, and the Company recorded a settlement charge of $8 million during the third quarter of 2019. Prior to the settlement accounting, the plan was re-measured as of July 31, 2019, resulting in an increase in the plan's projected benefit obligation of $37 million, an increase in plan assets of $26 million and an increase to losses in accumulated other comprehensive income of $11 million. The assumptions used to re-measure the plan were developed in the same manner as at December 31, 2018. However, due to the recent change in the investment assets, the expected rate of return on assets for this plan was changed from 7.25% to 0.70%. The discount rate used in the re-measurement was 2.00%, down from 3.00% at December 31, 2018. The Company recorded incremental net periodic benefit cost of $3 million in the third quarter and $5 million in the fourth quarter as a result of the re-measurement and the investment change. During the first quarter of 2020, the Company purchased a bulk annuity policy as a plan asset to facilitate the termination and buy-out of the plan. The bulk annuity fully insures the benefits payable to the participants of the plan until a full buy-out of the plan can be executed, which is expected to occur in 2021. As a result of the change in assets from a mix of equities and bonds to the bulk annuity, the plan's expected rate of return on assets was reduced to 1.00% at December 31, 2019. On January 27, 2020, the plan's assets of $336 million were transferred to the insurance company for the purchase of the bulk annuity contract. Included in the Company's year ended December 31, 2020 contributions is $5 million paid to meet the shortfall between the cost of the bulk annuity policy and the plan assets. The benefit obligation, fair value of plan assets, funded status, and amounts recognized in the consolidated financial statements for our defined benefit domestic and international pension plans were: Domestic Plans International Plans December 31, December 31, (in millions) 2020 2019 2020 2019 Change in benefit obligation: Benefit obligation at beginning of year $ 113 $ 99 $ 846 $ 763 Service cost 3 3 13 9 Interest cost 3 4 16 19 Benefits paid (6) (7) (34) (28) Actuarial loss (gain) 10 15 130 104 Plan amendments, settlements and curtailments — — (1) (23) Foreign currency translation/other — (1) 62 2 Benefit obligation at end of year $ 123 $ 113 $ 1,032 $ 846 Change in plan assets: Fair value of plan assets at beginning of year $ 105 97 $ 500 $ 470 Employer contributions — — 24 16 Actual return on plan assets 14 17 70 52 Benefits paid (6) (7) (34) (28) Plan amendments, settlements and curtailments — — (1) (23) Foreign currency translation/other — (2) 19 13 Fair value of plan assets at end of year $ 113 $ 105 $ 578 $ 500 Unfunded status of the plans $ (10) $ (8) $ (454) $ (346) The following table provides a roll-forward of the projected benefit obligation for the other post-retirement employee benefit plans: (in millions) 2020 2019 Change in benefit obligation: Benefit obligation at beginning of year $ 49 $ 52 Service cost — — Interest cost 2 2 Benefits paid (3) (3) Actuarial gain/(loss) 1 (2) Plan Amendment and other (5) — Benefit obligation at the end of year $ 44 $ 49 The accumulated benefit obligation (“ABO”) for all the defined benefit pension plans was $1,107 million and $919 million at December 31, 2020 and 2019, respectively. For defined benefit pension plans in which the ABO was in excess of the fair value of the plans’ assets, the projected benefit obligation, ABO and fair value of the plans’ assets were as follows: December 31, (in millions) 2020 2019 Projected benefit obligation $ 1,026 $ 562 Accumulated benefit obligation 983 526 Fair value of plan assets 535 150 The components of net periodic benefit cost for our defined benefit pension plans are as follows: Year Ended December 31, (in millions) 2020 2019 2018 Domestic defined benefit pension plans: Service cost $ 3 $ 3 $ 3 Interest cost 3 4 4 Expected return on plan assets (7) (8) (7) Amortization of net actuarial loss 3 1 2 Net periodic benefit cost $ 2 $ — $ 2 International defined benefit pension plans: Service cost $ 13 $ 9 $ 9 Interest cost 16 19 19 Expected return on plan assets (14) (27) (35) Amortization of net actuarial loss 14 9 9 Settlement — 9 1 Net periodic benefit cost $ 29 $ 19 $ 3 Total net periodic benefit cost $ 31 $ 19 $ 5 The components of net periodic benefit cost other than the service cost component are included in the line item "Other non-operating (expense) income, net" in the Consolidated Income Statements. Other changes in plan assets and benefit obligations recognized in other comprehensive loss, as they pertain to our defined benefit pension plans are as follows: Year Ended December 31, (in millions) 2020 2019 2018 Domestic defined benefit pension plans: Net (gain) loss $ 3 $ 6 $ 1 Amortization of net actuarial loss (3) (1) (2) (Gains) losses recognized in other comprehensive loss $ — $ 5 $ (1) International defined benefit pension plans: Net (gain) loss $ 74 $ 79 $ 35 Prior service credit — — 3 Amortization of net actuarial loss (14) (9) (9) Settlement — (9) (1) Foreign Exchange 19 3 (15) (Gains) losses recognized in other comprehensive loss $ 79 $ 64 $ 13 Total (gains) losses recognized in other comprehensive loss $ 79 $ 69 $ 12 Total (gains) losses recognized in comprehensive income $ 110 $ 88 $ 17 The components of net periodic benefit cost for other post-retirement employee benefit plans are as follows: Year Ended December 31, (in millions) 2020 2019 2018 Interest cost 2 2 2 Amortization of prior service credit (3) (4) (4) Amortization of net actuarial loss 2 2 2 Net periodic benefit cost $ 1 $ — $ — Other changes in benefit obligations recognized in other comprehensive loss, as they pertain to other post-retirement employee benefit plans are as follows: Year Ended December 31, (in millions) 2020 2019 2018 Net loss (gain) $ 1 $ (2) $ 1 Prior service credit (5) — (3) Amortization of prior service credit 3 4 4 Amortization of net actuarial loss (2) (2) (2) Losses (gains) recognized in other comprehensive loss $ (3) $ — $ — Total losses (gains) recognized in comprehensive income $ (2) $ — $ — 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. 2020 2019 2018 U.S. Int’l U.S. Int’l U.S. Int’l Benefit Obligation Assumptions Discount rate 2.50 % 1.06 % 3.25 % 1.80 % 4.50 % 2.60 % Rate of future compensation increase NM 2.79 % NM 2.94 % NM 2.92 % Net Periodic Benefit Cost Assumptions Discount rate 3.25 % 1.80 % 4.50 % 2.60 % 3.75 % 2.43 % Expected long-term return on plan assets 6.50 % 2.82 % 7.75 % 6.96 % 8.00 % 7.23 % Rate of future compensation increase NM 2.94 % NM 2.92 % NM 2.93 % NM Not meaningful. The pension benefits for future service for all the U.S. pension plans are 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 increase in the projected benefit obligations of defined benefit pension plans in 2020 was primarily due to a decrease in the discount rate in 2020 as compared to 2019. The increase in the projected benefit obligations of our qualified defined benefit pension plans in 2019 was primarily due to a decrease in the discount rate in 2019 as compared to 2018. 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; we estimate future returns based on independent estimates of asset class returns; and we evaluate historical broad market returns over long-term timeframes based on our asset allocation range. For the U.S. Master Trust which has existed since 2011, 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 for all of our plan assets to be used in determining net periodic benefit costs for 2021 is estimated at 3.24%. The table below provides the weighted average actual rate of return generated on all of our 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. 2020 2019 2018 Expected long-term rate of return on plan assets 3.46 % 7.09 % 7.34 % Actual rate of return (loss) on plan assets 14.06 % 12.59 % (3.85) % Investment Policy The investment strategy for managing worldwide post-retirement 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. During 2019, the Company updated its investment policy for the Xylem U.K. Pension Plan (the "U.K. Plan"), its largest defined benefit plan in the U.K., to prepare for a full buy-out as discussed above. The following table provides the actual asset allocations of plan assets as of December 31, 2020 and 2019, and the related asset target allocation ranges by asset category: 2020 2019 Target Equity securities 20.8 % 18.6 % 15-60% Fixed income 22.9 % 31.7 % 10-50% Hedge funds 0.1 % 2.0 % 0-25% Private equity — % — % 0-20% Cash, insurance contracts and other 56.2 % 47.7 % 0-60% Fair Value of Plan Assets In measuring plan assets at fair value, the fair value hierarchy is applied which categorizes and prioritizes the inputs used to estimate fair value into three levels. See Note 1 "Summary of Significant Accounting Policies" for further detail on fair value hierarchy. 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 NAV. 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 and closed end mutual 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 and mutual funds 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 and collective trust funds measured at fair value using the NAV per share practical expedient are not classified in the fair value hierarchy. • Fixed income — Government securities are generally valued using quoted prices of securities with similar characteristics. Corporate bonds are generally valued by using pricing models, quoted prices of securities with similar characteristics or broker quotes and are classified in Level 2. Fixed income securities held in proprietary funds pooled with other investor accounts and collective trust funds measured at fair value using the NAV per share practical expedient are not classified in the fair value hierarchy. Hedging instruments are collateralized daily with either cash or government bonds, have daily liquidity and pricing based on observable inputs from over-the-counter markets, and are classified as Level 2. • 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. Generally, hedge funds are valued using the NAV reported by the asset manager, and are 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. All of the hedge funds held have lockups and/or gates. Hedge funds have unfunded commitments of $0 million and $0 million at December 31, 2020 and 2019, respectively. • Insurance contracts and other — Primarily comprised of insurance contracts held by foreign plans. Insurance contracts are valued on an insurer pricing basis calculated at purchase price adjusted for changes in discount rates and other actuarial assumptions or contract value, which approximates fair value. Insurance contracts are generally classified as Level 3. • Cash — Cash and cash equivalents are held in accounts with brokers or custodians for liquidity and investment collateral and are classified as Level 1. The following table provides the fair value of plan assets held by our pension benefit plans by asset class: 2020 2019 (in millions) Level 1 Level 2 Level 3 NAV Practical Expedient Total Level 1 Level 2 Level 3 NAV Practical Expedient Total Equity securities Global stock funds/securities $ 38 $ 66 $ — $ 14 $ 118 $ 90 $ — $ — $ 13 $ 103 Diversified growth and income funds — — — 26 26 — — — 9 9 Fixed income Corporate bonds 1 97 — 7 105 86 — — 5 91 Government bonds — 19 — 28 47 35 — — 27 62 Hedging instruments — 6 — — 6 4 35 — — 39 Hedge funds — — — 1 1 — — — 12 12 Insurance contracts and other — 384 — 384 — 13 3 16 Cash & cash equivalents 4 — — — 4 273 — — — 273 Total plan assets subject to leveling $ 43 $ 188 $ 384 $ 76 $ 691 $ 488 $ 35 $ 13 $ 69 $ 605 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) Insurance Contracts and Other Balance, December 31, 2018 $ 12 Purchases, sales, settlements, net 1 Currency impact — Balance, December 31, 2019 $ 13 Purchases, sales, settlements, net 314 Actual return on plan assets 44 Currency impact 13 Balance, December 31, 2020 $ 384 Contributions and Estimated Future Benefit Payments Funding requirements under governmental regulations are a significant consideration in making contributions to our post-retirement plans. We made contributions of $27 million and $19 million to our pension and post-retirement defined benefit plans during 2020 and 2019, respectively. We currently anticipate making contributions to our pension and post-retirement defined benefit plans in the range of $19 million to $27 million during 2021, of which approximately $6 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 2021 $ 38 $ 3 2022 39 3 2023 40 3 2024 40 3 2025 42 3 Years 2026 - 2030 220 12 |
Share-Based Compensation Plans
Share-Based Compensation Plans | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Share-Based Compensation Plans | Share-Based Compensation Plans Our share-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 share-based compensation program in connection with their service on our board. Share-based awards issued to employees include non-qualified stock options, restricted stock unit awards and performance share unit awards. Under the 2011 Omnibus Incentive Plan, the number of shares initially available for awards was 18 million. As of December 31, 2020, there were approximately 5 million shares of common stock available for future grants. Total share-based compensation costs recognized for 2020, 2019 and 2018 were $26 million, $29 million, and $30 million, respectively. The unamortized compensation expense at December 31, 2020 related to our stock options, restricted share units and performance share units was $7 million, $21 million and $6 million, respectively, and is expected to be recognized over a weighted average period of 1.9, 1.8 and 1.8 years, respectively. The amount of cash received from the exercise of stock options was $20 million for 2020 with a tax benefit of $13 million realized associated with stock option exercises and vesting of restricted stock units. We classify as an operating activity the cash flows attributable to excess tax benefits arising from stock option exercises and restricted stock unit vestings. Stock Option Grants Options are awarded with a contractual term of 10 years and generally vest over a 3-year period and are exercisable within the contractual term, 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, 2020, there were options to purchase an aggregate of 2.0 million shares of common stock. The following is a summary of the changes in outstanding stock options for 2020: Share units (in thousands) Weighted Weighted Average Aggregate Intrinsic Value (in millions) Outstanding at January 1, 2020 2,040 $ 48.56 6.3 Granted 571 74.60 Exercised (521) 39.42 Forfeited and expired (129) 77.52 Outstanding at December 31, 2020 1,961 $ 56.66 6.4 $ 89 Options exercisable at December 31, 2020 1,227 $ 46.29 4.9 $ 68 Vested and non-vested expected to vest as of December 31, 2020 1,896 $ 56.08 6.3 $ 87 The amount of non-vested options outstanding was 0.7 million, 0.6 million and 0.7 million at a weighted average grant date share price of $74.00, $69.30 and $58.00 as of December 31, 2020, 2019 and 2018, 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 2020, 2019 and 2018 was $20 million, $15 million and $9 million, respectively. 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 used for 2020, 2019, and 2018: 2020 2019 2018 Dividend yield 1.42 % 1.30 % 1.12 % Volatility 24.16 % 24.10 % 23.41 % Risk-free interest rate 0.83 % 2.55 % 2.76 % Expected term (in years) 5.8 5.4 5.1 Weighted-average fair value per option $ 14.84 $ 17.04 $ 17.80 Expected volatility is calculated based on an analysis of historic volatility measures for Xylem. 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 risk-free rate is based on the U.S. Treasury yield curve in effect at the time of option grant. Restricted Stock Unit Grants Restricted stock units granted to employees vest over a three-year period. 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 do not have certain rights of a stockholder, such as the right to vote and receive dividends; however, dividends accrue during the vesting period and are paid upon vesting. If an employee leaves prior to vesting, whether through resignation or termination for cause, the restricted stock unit and related accrued dividends are forfeited. If an employee retires, a pro-rata portion of the restricted stock unit may vest in accordance with the terms of the grant agreements. Restricted stock units granted to Board members become fully vested upon the day prior to the next annual meeting. The fair value of the restricted stock unit awards is determined using the closing price of our common stock on date of grant. The following is a summary of the changes in outstanding restricted stock units for 2020: Share Units (in thousands) Weighted Average Outstanding at January 1, 2020 512 $ 68.95 Granted 340 75.58 Vested (252) 63.91 Forfeited (63) 76.23 Outstanding at December 31, 2020 537 $ 74.62 Performance Share Units Performance share units granted under the long-term incentive plan vest based upon performance by the Company over a 3-year period against targets approved by the Leadership Development & Compensation Committee of the Company's Board of Directors prior to the grant date. For the performance periods, the performance share units were granted at a target of 100% with actual payout contingent upon the achievement of a pre-set, 3-year adjusted ROIC and cumulative adjusted net income performance target for ROIC performance share units and a relative TSR performance for TSR performance share units. The calculated compensation cost for ROIC performance share units is adjusted based on an estimate of awards ultimately expected to vest and our assessment of the probable outcome of the performance condition. ROIC Performance Share Unit Grants The fair value of the ROIC performance share unit awards is determined using the closing price of our common stock on date of grant. The following is a summary of the changes in outstanding ROIC performance share units for 2020: Share units (in thousands) Weighted Average Outstanding at January 1, 2020 225 $ 64.51 Granted 82 78.90 Adjustment for Performance Condition Achieved (a) — — Vested (89) 49.15 Forfeited (36) 76.67 Outstanding at December 31, 2020 182 $ 76.12 (a) Represents an increase in the number of original ROIC performance share units awarded based on the final performance criteria achievement at the end of the performance period of such awards. TSR Performance Share Unit Grants The following is a summary of the changes in outstanding TSR performance share units for 2020: Share units (in thousands) Weighted Average Outstanding at January 1, 2020 225 $ 75.80 Granted 82 102.05 Adjustment for Performance Condition Achieved (a) 35 47.81 Vested (124) 47.81 Forfeited (36) 92.03 Outstanding at December 31, 2020 182 $ 96.98 (a) Represents an increase in the number of original TSR performance share units awarded based on the final market condition achievement at the end of the performance period of such awards. The fair value of TSR performance share units were calculated on the date of grant using a Monte Carlo simulation model utilizing several key assumptions, including expected Company and peer company share price volatility, correlation coefficients between peers, the risk-free rate of return, the expected dividend yield and other award design features. The following are weighted-average key assumptions for 2020 grants. Volatility 22.6 % Risk-free interest rate 1.08 % |
Capital Stock
Capital Stock | 12 Months Ended |
Dec. 31, 2020 | |
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 $1.04, $0.96 and $0.84 during 2020, 2019 and 2018, respectively. The changes in shares of common stock outstanding for the three years ended December 31 are as follows: (share units in thousands) 2020 2019 2018 Beginning Balance, January 1 180,140 179,724 179,862 Stock incentive plan net activity 986 952 672 Repurchase of common stock (772) (536) (810) Ending Balance, December 31 180,354 180,140 179,724 For the years ended December 31, 2020 and December 31, 2019 the Company repurchased 0.8 million shares of common stock for $61 million and repurchased 0.5 million shares of common stock for $40 million, respectively. Repurchases include both share repurchase programs approved by the Board of Directors and repurchases in relation to settlement of employee income tax withholding obligations due as a result of the vesting of restricted stock units. The detail of repurchases by each program are as follows: On August 24, 2015, our Board of Directors authorized the repurchase of up to $500 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. For the year ended December 31, 2020 we repurchased 0.7 million shares for $50 million. For the year ended December 31, 2019 we repurchased 0.3 million shares for $25 million. There are up to $288 million in shares that may still be purchased under this plan as of December 31, 2020. Aside from the aforementioned repurchase programs, we repurchased 0.1 million and 0.2 million shares for $11 million and $15 million during 2020 and 2019, respectively, in relation to settlement of employee income tax withholding obligations due as a result of the vesting of restricted stock units. These repurchases are included in the stock incentive plan net activity in the above table. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 12 Months Ended |
Dec. 31, 2020 | |
Accumulated Other Comprehensive Income [Abstract] | |
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss The following table provides the components of accumulated other comprehensive loss for 2020, 2019 and 2018: (in millions) Foreign Currency Translation Post-retirement Benefit Plans Derivative Instruments Total Balance at January 1, 2018 $ (15) $ (198) $ 3 $ (210) Cumulative effect of change in accounting principle (11) (6) (17) Foreign currency translation adjustment (83) (83) Income tax impact on foreign currency translation adjustment (12) (12) Changes in post-retirement benefit plans (36) (36) Foreign currency translation adjustment for post-retirement benefit plans 15 15 Income tax expense on changes in post-retirement benefit plans 5 5 Amortization of prior service cost and net actuarial loss on post-retirement benefit plans into other non-operating income (expense), net 9 9 Income tax impact on amortization of post-retirement benefit plan items (3) (3) Unrealized loss on derivative hedge agreements (8) (8) Reclassification of unrealized (gain) loss on foreign exchange agreements into cost of revenue 4 4 Balance at December 31, 2018 $ (121) $ (214) $ (1) $ (336) Foreign currency translation adjustment 27 27 Income tax impact on foreign currency translation adjustment (9) — (9) Changes in post-retirement benefit plans (83) (83) Settlement charge released into other non-operating income (expense), net 9 9 Foreign currency translation adjustment for post-retirement benefit plans (3) (3) Income tax expense on changes in post-retirement benefit plans, including settlement 16 16 Amortization of prior service cost and net actuarial loss on post-retirement benefit plans into other non-operating income (expense), net 8 8 Income tax impact on amortization of post-retirement benefit plan items (2) (2) Unrealized loss on derivative hedge agreements (14) (14) Reclassification of unrealized loss on foreign exchange agreements into revenue 7 7 Reclassification of unrealized loss on foreign exchange agreements into cost of revenue 5 5 Balance at December 31, 2019 $ (103) $ (269) $ (3) $ (375) Foreign currency translation adjustment (22) (22) Income tax impact on foreign currency translation adjustment 39 39 Changes in post-retirement benefit plans (73) (73) (in millions) Foreign Currency Translation Post-retirement Benefit Plans Derivative Instruments Total Foreign currency translation adjustment for post-retirement benefit plans (19) (19) Income tax expense on changes in post-retirement benefit plans 18 18 Amortization of prior service cost and net actuarial loss on post-retirement benefit plans into other non-operating income (expense), net 16 16 Income tax impact on amortization of post-retirement benefit plan items (3) (3) Unrealized gain on derivative hedge agreements 9 9 Reclassification of unrealized gain on foreign exchange agreements into revenue (4) (4) Reclassification of unrealized loss on foreign exchange agreements into cost of revenue 1 1 Balance at December 31, 2020 $ (86) $ (330) $ 3 $ (413) |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal Proceedings From time to time, we are involved in legal and regulatory proceedings that are incidental to the operation of our businesses (or the business operations of previously-owned entities). These proceedings may seek remedies relating to matters including environmental, tax, intellectual property, acquisitions or divestitures, product liability, property damage, personal injury, privacy, employment, labor and pension, government contract issues and commercial or contractual disputes. From time to time, claims may be asserted against Xylem alleging injury caused by any of 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 among ITT Corporation (now ITT LLC), Exelis (acquired by Harris Corporation, now L3Harris Technologies, Inc.) and Xylem, ITT Corporation (now ITT LLC) 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 Corporation (now ITT LLC) remains a substantial entity with sufficient financial resources to honor its obligations to us. See Note 7 "Income Taxes" of our consolidated financial statements for a description of a pending tax litigation matter. 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 believe it is reasonably possible 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 $6 million and $5 million as of December 31, 2020 and 2019, respectively, for these general legal matters. Indemnifications As part of our 2011 spin-off from our former parent, ITT Corporation (now ITT LLC), Exelis Inc. (acquired by Harris Corporation, now L3Harris Technologies, Inc.) and Xylem will 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 LLC'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 31, 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 the former parent or Exelis Inc. 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. Guarantees We obtain certain stand-by letters of credit, bank guarantees, surety bonds and insurance letters of credit from third-party financial institutions in the ordinary course of business when required under contracts or to satisfy insurance related requirements. As of December 31, 2020 and December 31, 2019, the amount of surety bonds, bank guarantees, insurance letters of credit and stand-by letters of credit was $378 million and $340 million, respectively. 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 or for which we are responsible under the Distribution Agreement, 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 our 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 $3 million as of December 31, 2020 and 2019 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. We believe the total amount accrued is reasonable based on existing facts and circumstances. 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 $57 million, $25 million, and $20 million for 2020, 2019 and 2018, respectively. The table below provides changes in the combined current and non-current product warranty accruals over each period. (in millions) 2020 2019 2018 Warranty accrual – January 1 $ 41 $ 60 $ 82 Net charges for product warranties in the period 57 25 20 Settlement of warranty claims (34) (42) (42) Foreign currency and other 1 (2) — Warranty accrual – December 31 $ 65 $ 41 $ 60 |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions Sales to and purchases from unconsolidated entities for 2020, 2019 and 2018 are as follows: (in millions) 2020 2019 2018 Sales to unconsolidated affiliates $ 10 $ 10 $ 10 Purchases from unconsolidated affiliates 16 22 22 |
Segment and Geographic Data
Segment and Geographic Data | 12 Months Ended |
Dec. 31, 2020 | |
Segment Reporting Information [Line Items] | |
Segment and Geographic Data | Segment and Geographic Data Our business has three reportable segments: Water Infrastructure, Applied Water and Measurement & Control Solutions. When determining the reportable segments, the Company aggregated operating segments based on their similar economic and operating characteristics. The Water Infrastructure segment focuses on the transportation and treatment of water, offering a range of products including water, wastewater and storm water pumps, treatment equipment, and controls and systems. The Applied Water segment serves many of the primary uses of water and focuses on the residential, commercial and industrial markets. The Applied Water segment's major products include pumps, valves, heat exchangers, controls and dispensing equipment. The Measurement & Control Solutions segment focuses on developing advanced technology solutions that enable intelligent use and conservation of critical water and energy resources as well as analytical instrumentation used in the testing of water. The Measurement & Control Solutions segment's major products include smart metering, networked communications, measurement and control technologies, critical infrastructure technologies, software and services including cloud-based analytics, remote monitoring and data management, leak detection and pressure monitoring solutions and testing equipment. Additionally, we have Regional selling locations, which consist primarily of selling and marketing organizations and related support services, that offer products and services across our reportable segments. 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 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, "Summary of Significant Accounting Policies"). The following tables contain financial information for each reportable segment: Year Ended December 31, (in millions) 2020 2019 2018 Revenue: Water Infrastructure $ 2,079 $ 2,177 $ 2,176 Applied Water 1,434 1,541 1,534 Measurement & Control Solutions 1,363 1,531 1,497 Total $ 4,876 $ 5,249 $ 5,207 Operating income: Water Infrastructure $ 318 $ 365 $ 359 Applied Water 205 241 236 Measurement & Control Solutions (106) (67) 118 Corporate and other (50) (53) (59) Total operating income 367 486 654 Interest expense 77 67 82 Other non-operating (expense) income, net (5) (4) 13 Gain on sale of businesses — 1 — Income before taxes $ 285 $ 416 $ 585 Depreciation and amortization: Water Infrastructure $ 57 $ 61 $ 66 Applied Water 24 24 22 Measurement & Control Solutions 142 144 144 Regional selling locations (a) 20 18 20 Corporate and other 8 10 9 Total $ 251 $ 257 $ 261 Capital expenditures: Water Infrastructure $ 48 $ 79 $ 84 Applied Water 18 19 28 Measurement & Control Solutions 90 100 101 Regional selling locations (b) 22 19 16 Corporate and other 5 9 8 Total $ 183 $ 226 $ 237 (a) Depreciation and amortization expense incurred by the Regional selling locations was included in an overall allocation of Regional selling location costs to the segments; however, a certain portion of that expense was not specifically identified to a segment. That expense is captured in this Regional selling location line. (b) Represents capital expenditures incurred by the Regional selling locations not allocated to the segments. The following table illustrates revenue by product category, net of intercompany revenue: Year Ended December 31, (in millions) 2020 2019 2018 Pumps, accessories, parts and service $ 3,120 $ 3,324 $ 3,322 Other (a) 1,756 1,925 1,885 Total $ 4,876 $ 5,249 $ 5,207 (a) Other includes treatment equipment, analytical instrumentation, heat exchangers, valves, controls and smart meters. The following table contains the total assets for each reportable segment as of December 31, 2020, 2019 and 2018: Total Assets (in millions) 2020 2019 2018 Water Infrastructure $ 1,255 $ 1,268 $ 1,233 Applied Water 1,005 1,016 1,051 Measurement & Control Solutions 3,345 3,497 3,576 Regional selling locations (a) 1,413 1,375 1,181 Corporate and other (b) 1,732 554 181 Total $ 8,750 $ 7,710 $ 7,222 (a) The Regional selling locations have assets that consist primarily of cash, accounts receivable and inventory which are not allocated to the segments. (b) Corporate and other consists of items pertaining to our corporate headquarters function, which principally consist of cash and pension assets. 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) 2020 2019 2018 United States $ 2,297 $ 2,554 $ 2,424 Europe 1,407 1,380 1,449 Asia Pacific 618 659 660 Other 554 656 674 Total $ 4,876 $ 5,249 $ 5,207 Property, Plant & Equipment December 31, (in millions) 2020 2019 2018 United States $ 253 $ 274 $ 281 Europe 277 249 250 Asia Pacific 64 67 66 Other 63 68 59 Total $ 657 $ 658 $ 656 |
Valuation and Qualifying Accoun
Valuation and Qualifying Accounts | 12 Months Ended |
Dec. 31, 2020 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |
Valuation and Qualifying Accounts | Valuation and Qualifying Accounts The table below provides changes in the allowance for credit losses over each period: (in millions) 2020 2019 2018 Balance at beginning of year $ 25 $ 25 $ 25 Additions charged to expense 25 3 5 Deductions/other (12) (3) (5) Balance at end of year $ 38 $ 25 $ 25 |
Quarterly Financial Data (Unaud
Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2020 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Data (Unaudited) | Quarterly Financial Data (Unaudited) Our quarterly financial periods end on the Saturday closest to the last day of the calendar quarter, except for the fourth quarter which ends on December 31. 2020 Quarter Ended (in millions, except per share amounts) Dec. 31 Sept. 30 (a) June 30 Mar. 31 Revenue $ 1,373 $ 1,220 $ 1,160 $ 1,123 Gross profit 526 461 434 409 Operating income 179 73 54 61 Net income $ 148 $ 37 $ 31 $ 38 Earnings per share: Basic $ 0.82 $ 0.20 $ 0.17 $ 0.21 Diluted $ 0.82 $ 0.20 $ 0.17 $ 0.21 2019 Quarter Ended (in millions, except per share amounts) Dec. 31 Sept. 30 (b) June 30 Mar. 31 Revenue $ 1,371 $ 1,296 $ 1,345 $ 1,237 Gross profit 537 509 526 474 Operating income 195 11 171 109 Net income $ 118 $ 65 $ 139 $ 79 Earnings per share: Basic $ 0.66 $ 0.36 $ 0.77 $ 0.44 Diluted $ 0.65 $ 0.36 $ 0.77 $ 0.43 (a) The amounts shown for the quarter ended September 30, 2020 include a goodwill impairment charge of $58 million related to the AIA goodwill reporting unit. Refer to Note 12 to the consolidated financial statements for further information regarding goodwill. (b) The amounts shown for the quarter ended September 30, 2019 include a goodwill impairment charge of $148 million related to the AIA goodwill reporting unit. Refer to Note 12 to the consolidated financial statements for further information regarding goodwill. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The consolidated 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 intercompany transactions between our businesses have been eliminated. |
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, post-retirement obligations and assets, revenue recognition, income taxes, valuation of intangible assets, goodwill and indefinite-lived intangible impairment testing and contingent liabilities. Actual results could differ from these estimates. The global outbreak of the novel coronavirus ("COVID-19") disease in March 2020, declared a pandemic by the World Health Organization, has created significant global volatility, uncertainty and economic disruption. The COVID-19 pandemic also has caused increased uncertainty in estimates and assumptions affecting the consolidated financial statements. 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 under the equity method in companies over which we have the ability to exercise significant influence but do not hold a controlling financial interest, and we record our proportionate share of income or losses in the Consolidated 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 Xylem recognizes revenue in a manner that depicts the transfer of promised goods and services to customers in an amount that reflects the consideration to which it expects to be entitled for providing those goods and services. For each arrangement with a customer, we identify the contract and the associated performance obligations within the contract, determine the transaction price of that contract, allocate the transaction price to each performance obligation and recognize revenue as each performance obligation is satisfied. The satisfaction of performance obligations in a contract is based upon when the customer obtains control over the asset. Depending on the nature of the performance obligation, control transfers either at a particular point in time, or over time which determines the recognition pattern of revenue. For product sales, other than long-term construction-type contracts, we recognize revenue once control has passed at a point in time, which is generally when products are shipped. In instances where contractual terms include a provision for customer acceptance, revenue is recognized when either (i) we have previously demonstrated that the product meets the specified criteria based on either seller or customer-specified objective criteria or (ii) upon formal acceptance received from the customer where the product has not been previously demonstrated to meet customer-specified objective criteria. We recognize revenue on product sales to channel partners, including resellers, distributors or value-added solution providers, at the point in time when control is transferred which is determined based on when the risks and rewards, possession, and title have transferred to the customer, which usually occurs at the point of delivery. Revenue from performance obligations related to services is primarily recognized over time, as the performance obligations are satisfied. In these instances, the customer consumes the benefit of the service as Xylem performs. Certain businesses also enter into long-term construction-type sales contracts where revenue is recognized over time. In these instances, revenue is recognized using a measure of progress that applies an input method based on costs incurred in relation to total estimated costs. We also recognize revenue for certain of these arrangements using the output method and measure progress based on shipments of product where control has transferred to the customer. If shipping and handling activities are performed after a customer obtains control of a good, we account for the shipping and handling activities as activities to fulfill a promise to transfer a good. Shipping and handling related costs are accrued as revenue is recognized. For all contracts with customers, we determine the transaction price in the arrangement and allocate the transaction price to each performance obligation identified in the contract. Judgment is required to determine the appropriate unit of account, and we separate out the performance obligations if they are capable of being distinct and are distinct within the context of the contract. We base our allocation of the transaction price to the performance obligations on the relative stand-alone selling prices for the goods or services contained in a particular performance obligation. The stand-alone selling prices are determined first by reference to observable prices. In the event observable prices are not available, we estimate the stand-alone selling price by maximizing observable inputs and applying an adjusted market assessment approach, expected cost plus margin approach, or a residual approach in limited situations. Revenue in these instances is recognized on individual performance obligations within the same contract as they are satisfied. The transaction price is adjusted for our estimate of variable consideration which may include a right of return, discounts, rebates, penalties and retainage. To estimate variable consideration, we apply the expected value or the most likely amount method, based on whichever method most appropriately predicts the amount of consideration we expect to receive. The method applied is typically based on historical experience and known trends. We constrain the amounts of variable consideration that are included in the transaction price, to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur or when uncertainties around the variable consideration are resolved. We exclude from the measurement of the transaction price all taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected from a customer, for example sales, use, value added and some excise taxes. For all contracts with customers, payment received for our products and services may not necessarily follow the same pattern of revenue recognition to which it relates and are dictated by the terms and conditions of our contracts with customers. Payments received for product sales typically occur following delivery and the satisfaction of the performance obligations based upon the terms outlined in the contracts. Payments received for services typically occur following the services being rendered. For long-term construction-type projects, payments are typically made throughout the contract as progress is made. In limited situations, contracts with customers include financing components where payment terms exceed one year; however, we believe that the financing effects are not significant to Xylem. In addition, we apply a practical expedient and do not adjust the promised amount of consideration in a contract for the effects of significant financing components when we expect payment terms to be one year or less from the time the goods or services are transferred until ultimate payment. We offer standard warranties for our products to ensure that our products comply with agreed-upon specifications in our contracts. Standard warranties do not give rise to performance obligations and represent assurance-type warranties. In certain instances, product warranty terms are adjusted to account for the specific nature of the contract. In these instances, we assess the warranties to determine whether they represent service-type warranties, and should be accounted for as a separate performance obligation in the contract. Costs to obtain a contract include incremental costs that the Company has incurred that it expects to recover. Incremental costs only include costs that the Company would not have incurred had the contract not been obtained. Costs that would have been incurred regardless of whether or not the contract was obtained are expensed as incurred, unless they are explicitly chargeable to the customer whether or not the contract is obtained. Costs to obtain contracts are capitalized when incurred, and are then amortized in a manner that is consistent with the pattern of transfer of the related goods or services provided in the contract. The Company elects to apply the practical expedient to expense costs to obtain contracts when the associated amortization period of those costs would be one year or less. |
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 include non-qualified stock options, restricted stock unit awards and performance share unit awards. Share-based awards issued to members of the Board of Directors include restricted stock unit 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 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 unit awards is determined using the closing price of our common stock on date of grant. The fair value of Return on Invested Capital ("ROIC") performance share units at 100% target is determined using the closing price of our common stock on date of grant. The fair value of Total Shareholder Return ("TSR") performance share units is calculated on the date of grant using a Monte Carlo simulation model utilizing several key assumptions, including expected Company and peer company share price volatility, correlation coefficients between peers, the risk-free rate of return, the expected dividend yield and other award design features. |
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. To the extent these activities are related to developing software that is sold to our customers, we capitalize the applicable development costs. All other research and development 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, 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 long-term debt and amortized over the life of the related financing arrangements. If the debt is retired early, the related unamortized deferred financing costs are recorded within the results of operations under the caption “interest expense” in the period the debt is retired. |
Income Taxes | Income Taxes Income taxes are calculated using the asset and liability method. 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. 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. Due to the Tax Act, we have recorded net foreign withholding taxes and state income taxes on earnings that are expected to be repatriated to the U.S. parent. We have not recorded any deferred taxes on the amounts that the Company currently does not intend to repatriate as the determination of any deferred taxes on this amount is not reasonably estimable. 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 or upon completion of the litigation process. 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 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. |
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 Discounts | Receivables and Allowance for Credit Losses and Discounts Receivables primarily comprise uncollected amounts owed to us from transactions with customers and are presented net of allowances for credit losses, returns and early payment discounts. We determine our allowance for credit losses using a combination of factors to reduce our trade receivable balances to the net amount expected to be collected. We maintain an allowance for credit losses based on a variety of factors, including the length of time receivables were past due, macro-economic trends and conditions, significant one-time events, historical experience, and current and future expectations of economic conditions. In addition, we record an allowance 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 early payment 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 evaluate 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, 2020 and 2019 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 net realizable value. 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. |
Leases | Leases Xylem adopted ASC 842 - Leases as of January 1, 2019. We determine if an arrangement is a lease at inception. We have recorded right of use (“ROU”) assets and liabilities for lease arrangements that are reasonably certain to extend beyond 12 months. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments under the lease. ROU assets and liabilities are recognized at lease commencement date based on the present value of lease payments over the lease term. The implicit rate within our leases is generally not determinable, and we use our incremental borrowing rate at the lease commencement date to determine the net present value of lease payments. The determination of the appropriate incremental borrowing rate requires judgment. We determine the appropriate incremental borrowing rate for each lease using our current borrowing rate, adjusted for various factors including geographic region, level of collateralization and term, to align with the term of the underlying lease. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Many of our leases are subject to payment adjustments to reflect annual changes in price indexes, such as the Consumer Price Index. While associated lease liabilities are not re-measured as a result of changes in the applicable price indexes, changes to required lease payments are treated as variable lease payments and recognized in the period in which the obligation for those payments was incurred. Leases with a lease term of 12 months or less, including renewal options that are reasonably certain to be exercised, that also do not include an option to purchase the underlying asset that is reasonably certain of exercise, are not recorded on the balance sheet. Instead, lease payments for these leases are recognized as a lease cost on a straight-line basis over the lease term. We elected the package of practical expedients, which among other things, does not require reassessment of lease classification. Additionally, we have made an accounting policy election whereby we chose not to separate non-lease components from lease components in agreements in all leases which we are the lessee. For annual periods prior to January 1, 2019, lease payments for these leases are recognized as a lease cost on a straight-line basis over the lease term. |
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, software 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 1 to 25 years and is included in cost of revenue or selling, general and administrative expenses. Certain of our intangible assets, namely certain brands and trademarks, as well as FCC licenses, have an indefinite life and are not amortized. |
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 or business climate or an adverse action or assessment by a regulator). We conduct our annual impairment testing as of the beginning of the fourth quarter. For goodwill, 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. If the carrying value of the reporting unit exceeds its estimated fair value, then an impairment charge is recognized for that excess up to the amount of recorded goodwill. We estimate the fair value of our reporting units using an income approach. We estimate the fair value of our intangible assets with indefinite lives using either the income approach or the market approach. Under the income approach, we calculate fair value based on the present value of estimated future cash flows. Under the market approach, we calculate fair value based on recent sales and selling prices of similar assets. |
Product Warranties | Product Warranties For assurance-type 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 also record a warranty liability for specific matters. We assess the adequacy of our recorded warranty liabilities quarterly and adjust amounts as necessary. For service-type warranties (i.e. non-standard warranties) costs incurred to fulfill the extended or service warranty are recognized/recorded as the costs are incurred. |
Postretirement Benefit Plans | Post-retirement Benefit Plans The determination of defined benefit pension and post-retirement 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, years of service 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 post-retirement cost, the calculation of the expected return on plan assets is generally derived by applying the expected long-term rate of return on the market-related value of plan assets. The market-related value of plan assets is 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 average 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”) to be 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. The excess of the acquisition price over those estimated fair values is recorded as goodwill. 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. 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. During the fourth quarter of 2018, we adopted new accounting guidance that eliminates the concept of ineffectiveness for cash flow and net investment hedges. Prior to this adoption, the effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges of foreign exchange risk was recorded in other comprehensive income ("OCI") and was 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 was recognized directly in selling, general and administrative expenses. Our policy was 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 became probable that the originally forecasted transaction would not occur, the gain or loss related to the hedge recorded within accumulated other comprehensive income ("AOCI") was immediately recognized into net income. Prior to the adoption of the new guidance, changes in the fair value of derivatives designated and that qualify as net investment hedges of foreign exchange risk were recorded in OCI. Amounts in AOCI were reclassified into earnings at the time the hedged net investment is sold or substantially liquidated. Effectiveness of derivatives designated as net investment hedges was assessed using the forward method. Subsequent to adopting the new hedge guidance, changes in the fair value of derivatives designated and that qualify as cash flow hedges of foreign exchange risk are recorded in OCI and are 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. 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 AOCI is immediately recognized into net income. Subsequent to adopting the new hedge guidance, effectiveness of derivatives designated as net investment hedges is assessed using the spot method. The changes in the fair value of these derivatives due to movements in spot exchange rates are recorded in OCI. Amounts in AOCI are reclassified into earnings at the time the hedged net investment is sold or substantially liquidated. Furthermore, we recognize interest income based on the interest rate differential embedded in the derivative instrument. |
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. |
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 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. 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. Certain investments which measure fair value using the net asset value (“NAV”) per share practical expedient are not classified within the fair value hierarchy and are separately disclosed. |
Pronouncements Not Yet Adopted | Recently Adopted Pronouncements In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update 2016-13, "Financial Instruments-Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments," amending the accounting for the impairment of financial instruments, including trade receivables. Under previous guidance, credit losses were recognized when the applicable losses had a probable likelihood of occurring and this assessment was based on past events and current conditions. The amended current guidance eliminates the “probable” threshold and requires an entity to use a broader range of information, including forecast information when estimating expected credit losses. Generally, this should result in a more timely recognition of credit losses. This guidance became effective for interim and annual periods beginning after December 15, 2019 with early adoption permitted for interim and annual periods beginning after December 15, 2018. The requirements of the amended guidance should be applied using a modified retrospective approach except for debt securities, which require a prospective transition approach. We adopted this guidance as of January 1, 2020. The adoption of this guidance did not have a material impact on our financial condition and results of operations. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
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 The components of total property, plant and equipment, net are as follows: December 31, (in millions) 2020 2019 Land, buildings and improvements $ 369 $ 339 Machinery and equipment 941 861 Equipment held for lease or rental 241 256 Furniture and fixtures 124 118 Construction work in progress 110 104 Other 29 24 Total property, plant and equipment, gross 1,814 1,702 Less accumulated depreciation 1,157 1,044 Total property, plant and equipment, net $ 657 $ 658 |
Acquisitions and Divestitures (
Acquisitions and Divestitures (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Business Combinations [Abstract] | |
Purchase Price Allocation | The Pure purchase price allocation as of January 31, 2018 is shown in the following table: (in millions) Amount Cash $ 14 Receivables 23 Inventories 4 Prepaid and other current assets 2 Property, plant and equipment 22 Intangible assets 149 Other long-term assets 1 Accounts payable (3) Accrued and other current liabilities (12) Deferred income tax liabilities (25) Other non-current accrued liabilities (2) Total identifiable net assets 173 Goodwill 261 Total consideration $ 434 |
Summary of Intangible Assets Acquired | The following table summarizes key information underlying identifiable intangible assets related to the Pure acquisition: Category Life Amount Customer Relationships 17 - 18 years $ 84 Technology 3 - 10 years 38 Tradenames 20 years 21 Internally Developed Software 3 years 6 Total $ 149 |
Pro Forma Information | The following table summarizes, on an unaudited pro forma basis, the condensed combined results of operations of the Company for the year ended December 31, 2018 assuming the acquisition of Pure was made on January 1, 2017: (in millions) Year Ended December 31, 2018 Revenue $5,212 Net income $546 |
Restructuring and Asset Impai_2
Restructuring and Asset Impairment Charges (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Restructuring and Related Activities [Abstract] | |
Components of restructuring and asset impairment charges | components of restructuring expense and asset impairment charges incurred during each of the previous 3 years: Year Ended December 31, (in millions) 2020 2019 2018 By component: Severance and other charges $ 36 $ 51 $ 19 Lease related charges — 1 1 Asset impairment 18 — — Other restructuring charges 1 2 1 Reversal of restructuring accruals (1) (1) (1) Total restructuring charges 54 53 20 Asset impairment charges 21 10 2 Total restructuring and asset impairment charges $ 75 $ 63 $ 22 By segment: Water Infrastructure $ 20 $ 20 $ 11 Applied Water 4 5 2 Measurement & Control Solutions 51 38 9 |
Restructuring accruals | The following table displays a roll-forward of the restructuring accruals, presented on our Consolidated Balance Sheets within "accrued and other current liabilities" and "other non-current accrued liabilities," for the years ended December 31, 2020 and 2019: (in millions) 2020 2019 Restructuring accruals - January 1 $ 27 $ 5 Restructuring charges 54 53 Cash payments (36) (30) Asset impairment (18) — Foreign currency and other 2 (1) Restructuring accruals - December 31 $ 29 $ 27 By segment: Water Infrastructure $ 4 $ 1 Applied Water 1 — Measurement & Control Solutions 18 19 Regional selling locations (a) 5 7 Corporate and other 1 — (a) Regional selling locations consist primarily of selling and marketing organizations that incurred restructuring expense which was allocated to the segments. The liabilities associated with restructuring expense were not allocated to the segments. The following table presents expected restructuring spend in 2020 and thereafter: (in millions) Water Infrastructure Applied Water Measurement & Control Solutions Corporate Total Actions Commenced in 2020: Total expected costs $ 26 $ 11 $ 34 $ 2 $ 73 Costs incurred during 2020 19 4 30 — 53 Total expected costs remaining $ 7 $ 7 $ 4 $ 2 $ 20 Actions Commenced in 2019: Total expected costs $ 19 $ 5 $ 27 $ — $ 51 Costs incurred during 2019 18 5 27 — 50 Costs incurred during 2020 1 — — — 1 Total expected costs remaining $ — $ — $ — $ — $ — |
Revenue (Tables)
Revenue (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following table illustrates the sources of revenue: Year Ended December 31, (in millions) 2020 2019 2018 Revenue from contracts with customers $ 4,681 $ 5,002 $ 4,963 Lease Revenue 195 247 244 Total $ 4,876 $ 5,249 $ 5,207 The following table reflects revenue from contracts with customers by application: Year Ended December 31, (in millions) 2020 2019 2018 Water Infrastructure Transport $ 1,484 $ 1,533 $ 1,535 Treatment 400 397 397 Applied Water Building Services 804 848 828 Industrial Water 630 693 706 Measurement and Control Solutions Water 689 768 692 Energy 276 337 338 Software as a Service 92 99 123 Test 306 327 344 Total $ 4,681 $ 5,002 $ 4,963 The following table reflects revenue from contracts with customers by geographical region: Year Ended December 31, (in millions) 2020 2019 2018 Water Infrastructure United States $ 558 $ 593 $ 539 Europe 751 729 758 Asia Pacific 341 358 344 Other 234 250 291 Applied Water United States 754 816 797 Europe 356 362 386 Asia Pacific 152 164 153 Other 172 199 198 Measurement and Control Solutions United States 856 972 913 Europe 266 257 273 Asia Pacific 109 118 144 Other 132 184 167 Total $ 4,681 $ 5,002 $ 4,963 |
Contract with Customer, Asset and Liability | The table below provides contract assets, contract liabilities, and significant changes in contract assets and liabilities: (in millions) Contract Assets (a) Contract Liabilities Balance at 1/1/2019 $ 96 $ 113 Additions, net 81 114 Revenue recognized from opening balance — (91) Billings transferred to accounts receivable (80) — Other 9 (1) Balance at 1/1/2020 $ 106 $ 135 Additions, net 118 120 Revenue recognized from opening balance — (93) Billings transferred to accounts receivable (110) — Other 3 4 Balance at 12/31/2020 $ 117 $ 166 (a) Excludes receivable balances which are disclosed on the balance sheet |
Other Non-Operating Income, N_2
Other Non-Operating Income, Net (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Other Income and Expenses [Abstract] | |
Components of Other Non-Operating Income, Net | The components of other non-operating income, net are as follows: Year Ended December 31, (in millions) 2020 2019 2018 Interest income $ 7 $ 5 $ 4 Income from joint ventures 2 3 5 Other (expense) income – net (14) (12) 4 Total other non-operating (expense) income, net $ (5) $ (4) $ 13 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
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) 2020 2019 2018 Income (loss) components: Domestic $ (33) $ 203 $ 208 Foreign 318 213 377 Total pre-tax income $ 285 $ 416 $ 585 Income tax expense components: Current: Domestic – federal $ 24 $ 39 $ 9 Domestic – state and local 5 13 13 Foreign 33 40 61 Total Current 62 92 83 Deferred: Domestic – federal $ (21) $ 7 $ 17 Domestic – state and local (8) (1) 5 Foreign (2) (83) (69) Total Deferred (31) (77) (47) Total income tax provision $ 31 $ 15 $ 36 Effective income tax rate 10.9 % 3.7 % 6.1 % |
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, 2020 2019 2018 Tax provision at U.S. statutory rate 21.0 % 21.0 % 21.0 % Increase (decrease) in tax rate resulting from: State income taxes 0.7 2.7 2.3 Uncertain tax positions (3.9) 0.4 2.6 Valuation allowance 0.5 1.2 (47.1) Tax exempt interest (4.5) (3.0) (1.4) Foreign tax rate differential (0.9) 0.7 2.9 Impact of foreign earnings, net 5.3 1.6 (1.7) Tax incentives (7.4) (9.6) (6.2) Intercompany sale of assets — — 35.5 Other – net 2.2 1.7 (0.3) Rate change (1.3) (18.1) — Goodwill impairment 2.9 7.8 — Federal R&D tax credit (1.3) (1.2) (0.8) Stock compensation (2.4) (1.5) (0.7) Effective income tax rate 10.9 % 3.7 % 6.1 % |
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) 2020 2019 Deferred tax assets: Employee benefits $ 127 $ 106 Accrued expenses 35 26 Loss and other tax credit carryforwards 270 240 Inventory 6 6 Lease Liabilities 64 57 Other 41 3 543 438 Valuation allowance (217) (191) Net deferred tax asset $ 326 $ 247 Deferred tax liabilities: Intangibles $ 138 $ 160 Investment in foreign subsidiaries 5 7 Property, plant and equipment 77 78 Lease right-of-use assets 62 57 Other 30 29 Total deferred tax liabilities $ 312 $ 331 |
Reconciliation of Deferred Tax Asset Valuation Allowance | A reconciliation of the change in valuation allowance on deferred tax assets is as follows: (in millions) 2020 2019 2018 Valuation allowance — January 1 $ 191 $ 234 $ 350 Change in assessment (a) 1 (2) 1 Current year operations 7 2 (271) Foreign currency and other (b) 18 (43) 154 Valuation allowance — December 31 $ 217 $ 191 $ 234 (a) Increase in assessment in 2020 is primarily attributable to loss positions in various jurisdictions. Decrease in assessment in 2019 is primarily attributable to profitability of certain jurisdictions. |
Deferred taxes classification | Deferred taxes are classified in the Consolidated Balance Sheets as follows: December 31, (in millions) 2020 2019 Non-current assets $ 256 $ 226 Non-current liabilities (242) (310) Total net deferred tax liabilities $ 14 $ (84) |
Tax attributes available to reduce future taxable income | Tax attributes available to reduce future taxable income begin to expire as follows: (in millions) December 31, 2020 First Year of Expiration U.S. net operating loss $ 7 December 31, 2024 State net operating loss 97 December 31, 2021 State excess interest expense 10 Indefinitely State tax credits 1 Indefinitely Foreign net operating loss 1,153 December 31, 2021 Foreign tax credits 4 December 31, 2030 |
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) 2020 2019 2018 Unrecognized tax benefits — January 1 $ 129 $ 136 $ 130 Current year tax positions — 3 — Prior year tax positions (3) (5) 7 Settlements (12) (5) (1) Unrecognized tax benefits — December 31 $ 114 $ 129 $ 136 |
Earliest open tax years by major jurisdiction | The following table summarizes our earliest open tax years by major jurisdiction: Jurisdiction Earliest Open Year Italy 2014 Luxembourg 2016 Sweden 2013 Germany 2012 United Kingdom 2014 United States 2017 Switzerland 2017 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
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 EPS: Year Ended December 31, 2020 2019 2018 Net income (in millions) $ 254 $ 401 $ 549 Shares (in thousands): Weighted average common shares outstanding 180,094 179,958 179,750 Add: Participating securities (a) 22 29 27 Weighted average common shares outstanding — Basic 180,116 179,987 179,777 Plus incremental shares from assumed conversions: (b) Dilutive effect of stock options 671 803 876 Dilutive effect of restricted stock units and performance share units 312 406 479 Weighted average common shares outstanding — Diluted 181,099 181,196 181,132 Basic earnings per share $ 1.41 $ 2.23 $ 3.05 Diluted earnings per share $ 1.40 $ 2.21 $ 3.03 (a) Restricted stock awards containing rights to non-forfeitable dividends that participate in undistributed earnings with common shareholders are considered participating securities for purposes of computing EPS. |
Incremental shares from stock options and restricted stock | Year Ended December 31, (in thousands) 2020 2019 2018 Stock options 1,545 1,383 1,300 Restricted stock units 362 348 333 Performance share units 305 394 465 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Inventories | The components of total inventories are summarized as follows: December 31, (in millions) 2020 2019 Finished goods $ 221 $ 212 Work in process 49 47 Raw materials 288 280 Total inventories $ 558 $ 539 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
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 The components of total property, plant and equipment, net are as follows: December 31, (in millions) 2020 2019 Land, buildings and improvements $ 369 $ 339 Machinery and equipment 941 861 Equipment held for lease or rental 241 256 Furniture and fixtures 124 118 Construction work in progress 110 104 Other 29 24 Total property, plant and equipment, gross 1,814 1,702 Less accumulated depreciation 1,157 1,044 Total property, plant and equipment, net $ 657 $ 658 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Lease, Cost | The components of our lease cost were as follows: Year Ended December 31, (in millions) 2020 2019 Lease cost Operating lease cost $ 77 $ 76 Short-term lease cost 2 9 Variable lease cost 22 19 Total lease cost $ 101 $ 104 |
Assets and Liabilities, Leases | The supplemental cash flow information related to leases are as follows: Year Ended December 31, (in millions) 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 75 $ 73 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 64 $ 33 Information relating to the lease term and discount rate are as follows: Year Ended December 31, 2020 2019 Weighted-average remaining lease term (years) Operating leases 7 Years 6 Years Weighted-average discount rate Operating leases 2.5% 2.7% |
Lessee, Operating Lease, Liability, Maturity | As of December 31, 2020, the maturities of operating lease liabilities were as follows: (in millions) 2021 $ 68 2022 54 2023 42 2024 32 2025 24 Thereafter 77 Total lease payments 297 Less: Imputed interest (22) Total (1) $ 275 (1) Excludes $27 million of legally binding minimum lease payments for leases signed but not yet commenced. Lease payments are expected to begin in 2021 when asset construction is complete. |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Changes in the carrying value of goodwill by operating segment | Changes in the carrying value of goodwill by reportable segment during the years ended December 31, 2020 and 2019 are as follows: (in millions) Water Applied Water Measurement & Control Solutions Total Balance as of December 31, 2018 $ 653 $ 516 $ 1,807 $ 2,976 Activity in 2019 Acquired — — 19 19 Impairment — — (148) (148) Foreign currency and other (2) (3) (3) (8) Balance as of December 31, 2019 $ 651 $ 513 $ 1,675 $ 2,839 Activity in 2020 Impairment — — (58) (58) Foreign currency and other 17 16 40 73 Balance as of December 31, 2020 $ 668 $ 529 $ 1,657 $ 2,854 |
Other Intangible Assets | Information regarding our other intangible assets is as follows: (in millions) December 31, 2020 December 31, 2019 Carrying Accumulated Net Carrying Accumulated Net Customer and distributor relationships $ 941 $ (410) $ 531 $ 945 $ (352) $ 593 Proprietary technology and patents 206 (131) 75 204 (111) 93 Trademarks 143 (63) 80 148 (52) 96 Software 500 (265) 235 428 (206) 222 Other 21 (18) 3 20 (16) 4 Indefinite-lived intangibles 169 — 169 166 — 166 Other intangibles $ 1,980 $ (887) $ 1,093 $ 1,911 $ (737) $ 1,174 |
Estimated Amortization Expense | Estimated amortization expense for each of the five succeeding years is as follows: (in millions) 2021 $ 128 2022 121 2023 115 2024 105 2025 102 |
Accrued and Other Current Lia_2
Accrued and Other Current Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Payables and Accruals [Abstract] | |
Accrued and Other Current Liabilities | December 31, (in millions) 2020 2019 Compensation and other employee-benefits $ 258 $ 199 Customer-related liabilities 186 153 Accrued taxes 103 79 Lease liabilities 63 61 Accrued warranty costs 54 36 Other accrued liabilities 123 100 Total accrued and other current liabilities $ 787 $ 628 |
Credit Facilities and Long-Te_2
Credit Facilities and Long-Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Credit Facilities and Long-Term Debt | Total debt outstanding is summarized as follows: December 31, (in millions) 2020 2019 4.875% Senior Notes due 2021 (a) $ 600 $ 600 2.250% Senior Notes due 2023 (a) 612 557 3.250% Senior Notes due 2026 (a) 500 500 1.950% Senior Notes due 2028 (b) 500 — 2.250% Senior Notes due 2031 (b) 500 — 4.375% Senior Notes due 2046 (a) 400 400 Commercial paper — 276 Debt issuance costs and unamortized discount (c) (28) (17) Total debt 3,084 2,316 Less: short-term borrowings and current maturities of long-term debt 600 276 Total long-term debt $ 2,484 $ 2,040 (a) The fair value of our Senior Notes 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 2021 was $620 million and $629 million as of December 31, 2020 and 2019, respectively. The fair value of our Senior Notes due 2023 was $640 million and $591 million as of December 31, 2020 and 2019, respectively. The fair value of our Senior Notes due 2026 was $563 million and $518 million as of December 31, 2020 and 2019, respectively. The fair value of our Senior Notes due 2046 was $496 million and $431 million as of December 31, 2020 and 2019, respectively. (b) The fair value of our Senior Notes 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 2028 and 2031 was $529 million and $527 million, respectively, as of December 31, 2020. (c) The debt issuance costs and 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 Income Statements over the expected remaining terms of the Senior Notes. |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Effect of derivative financial instruments | The table below presents the effect of our derivative financial instruments on the Consolidated Income Statements and Consolidated Statements of Comprehensive Income: Year Ended December 31, (in millions) 2020 2019 2018 Derivatives in Cash Flow Hedges Foreign Exchange Contracts Amount of gain (loss) recognized in OCI (a) $ 9 $ (14) $ (8) Amount of (gain) loss reclassified from OCI into revenue (a) (4) 7 — Amount of loss reclassified from OCI into cost of revenue (a) 1 5 4 Derivatives in Net Investment Hedges Cross-Currency Swaps Amount of (loss) gain recognized in OCI (a) $ (103) $ 22 $ 22 Amount of income recognized in Interest Expense 19 16 2 Foreign Currency Denominated Debt Amount of (loss) gain recognized in OCI (a) $ (55) $ 13 $ 27 (a) Effective portion |
Schedule of Foreign Exchange Contracts, Statement of Financial Position | The fair values of our derivative contracts currently included in our hedging program were as follows: December 31, (in millions) 2020 2019 Derivatives designated as hedging instruments Assets Net Investment Hedges Other non-current assets — 4 Liabilities Net Investment Hedges Other non-current liabilities (117) (24) The fair value of our long-term debt, due in 2023, designated as a net investment hedge was $640 million and $591 million as of December 31, 2020 and 2019, respectively. |
Postretirement Benefit Plans (T
Postretirement Benefit Plans (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Retirement Benefits [Abstract] | |
Defined benefit contributions by employer | Matching obligations, the majority of which were funded in cash in connection with the plans, and other company contributions are as follows: (in millions) Defined Contribution 2020 $ 56 2019 49 2018 39 |
Summary of amounts recorded within accumulated other comprehensive income | The following table provides a summary of the funded status of our Post-retirement Plans, the presentation of such balances and a summary of amounts recorded within accumulated other comprehensive income: (in millions) December 31, 2020 December 31, 2019 Pension Other Total Pension Other Total Fair value of plan assets $ 691 $ — $ 691 $ 605 $ — $ 605 Projected benefit obligation (1,155) (44) (1,199) (959) (49) (1,008) Funded status $ (464) $ (44) $ (508) $ (354) $ (49) $ (403) Amounts recognized in the balance sheet Other non-current assets $ 27 $ — $ 27 $ 58 $ — $ 58 Accrued and other current liabilities (13) (3) (16) (13) (3) (16) Accrued post-retirement benefits (478) (41) (519) (399) (46) (445) Net amount recognized $ (464) $ (44) $ (508) $ (354) $ (49) $ (403) Accumulated other comprehensive income (loss): Net actuarial losses $ (409) $ (18) $ (427) $ (330) $ (19) $ (349) Prior service credit (3) 9 6 (3) 7 4 Total $ (412) $ (9) $ (421) $ (333) $ (12) $ (345) |
Schedule of Net Benefit Costs | The components of net periodic benefit cost for our defined benefit pension plans are as follows: Year Ended December 31, (in millions) 2020 2019 2018 Domestic defined benefit pension plans: Service cost $ 3 $ 3 $ 3 Interest cost 3 4 4 Expected return on plan assets (7) (8) (7) Amortization of net actuarial loss 3 1 2 Net periodic benefit cost $ 2 $ — $ 2 International defined benefit pension plans: Service cost $ 13 $ 9 $ 9 Interest cost 16 19 19 Expected return on plan assets (14) (27) (35) Amortization of net actuarial loss 14 9 9 Settlement — 9 1 Net periodic benefit cost $ 29 $ 19 $ 3 Total net periodic benefit cost $ 31 $ 19 $ 5 The components of net periodic benefit cost for other post-retirement employee benefit plans are as follows: Year Ended December 31, (in millions) 2020 2019 2018 Interest cost 2 2 2 Amortization of prior service credit (3) (4) (4) Amortization of net actuarial loss 2 2 2 Net periodic benefit cost $ 1 $ — $ — |
Schedule of Changes in Accumulated Postemployment Benefit Obligations | Other changes in benefit obligations recognized in other comprehensive loss, as they pertain to other post-retirement employee benefit plans are as follows: Year Ended December 31, (in millions) 2020 2019 2018 Net loss (gain) $ 1 $ (2) $ 1 Prior service credit (5) — (3) Amortization of prior service credit 3 4 4 Amortization of net actuarial loss (2) (2) (2) Losses (gains) recognized in other comprehensive loss $ (3) $ — $ — Total losses (gains) recognized in comprehensive income $ (2) $ — $ — |
Summary of the funded status of postretirement plans | The benefit obligation, fair value of plan assets, funded status, and amounts recognized in the consolidated financial statements for our defined benefit domestic and international pension plans were: Domestic Plans International Plans December 31, December 31, (in millions) 2020 2019 2020 2019 Change in benefit obligation: Benefit obligation at beginning of year $ 113 $ 99 $ 846 $ 763 Service cost 3 3 13 9 Interest cost 3 4 16 19 Benefits paid (6) (7) (34) (28) Actuarial loss (gain) 10 15 130 104 Plan amendments, settlements and curtailments — — (1) (23) Foreign currency translation/other — (1) 62 2 Benefit obligation at end of year $ 123 $ 113 $ 1,032 $ 846 Change in plan assets: Fair value of plan assets at beginning of year $ 105 97 $ 500 $ 470 Employer contributions — — 24 16 Actual return on plan assets 14 17 70 52 Benefits paid (6) (7) (34) (28) Plan amendments, settlements and curtailments — — (1) (23) Foreign currency translation/other — (2) 19 13 Fair value of plan assets at end of year $ 113 $ 105 $ 578 $ 500 Unfunded status of the plans $ (10) $ (8) $ (454) $ (346) |
Projected benefit obligations | The following table provides a roll-forward of the projected benefit obligation for the other post-retirement employee benefit plans: (in millions) 2020 2019 Change in benefit obligation: Benefit obligation at beginning of year $ 49 $ 52 Service cost — — Interest cost 2 2 Benefits paid (3) (3) Actuarial gain/(loss) 1 (2) Plan Amendment and other (5) — Benefit obligation at the end of year $ 44 $ 49 |
Accumulated benefit obligation and fair value of the plans' assets | For defined benefit pension plans in which the ABO was in excess of the fair value of the plans’ assets, the projected benefit obligation, ABO and fair value of the plans’ assets were as follows: December 31, (in millions) 2020 2019 Projected benefit obligation $ 1,026 $ 562 Accumulated benefit obligation 983 526 Fair value of plan assets 535 150 |
Components of net periodic benefit cost and other amounts recognized in other comprehensive income | Other changes in plan assets and benefit obligations recognized in other comprehensive loss, as they pertain to our defined benefit pension plans are as follows: Year Ended December 31, (in millions) 2020 2019 2018 Domestic defined benefit pension plans: Net (gain) loss $ 3 $ 6 $ 1 Amortization of net actuarial loss (3) (1) (2) (Gains) losses recognized in other comprehensive loss $ — $ 5 $ (1) International defined benefit pension plans: Net (gain) loss $ 74 $ 79 $ 35 Prior service credit — — 3 Amortization of net actuarial loss (14) (9) (9) Settlement — (9) (1) Foreign Exchange 19 3 (15) (Gains) losses recognized in other comprehensive loss $ 79 $ 64 $ 13 Total (gains) losses recognized in other comprehensive loss $ 79 $ 69 $ 12 Total (gains) losses recognized in comprehensive income $ 110 $ 88 $ 17 |
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. 2020 2019 2018 U.S. Int’l U.S. Int’l U.S. Int’l Benefit Obligation Assumptions Discount rate 2.50 % 1.06 % 3.25 % 1.80 % 4.50 % 2.60 % Rate of future compensation increase NM 2.79 % NM 2.94 % NM 2.92 % Net Periodic Benefit Cost Assumptions Discount rate 3.25 % 1.80 % 4.50 % 2.60 % 3.75 % 2.43 % Expected long-term return on plan assets 6.50 % 2.82 % 7.75 % 6.96 % 8.00 % 7.23 % Rate of future compensation increase NM 2.94 % NM 2.92 % NM 2.93 % NM Not meaningful. The pension benefits for future service for all the U.S. pension plans are based on years of service and not impacted by future compensation increases. |
Actual plan returns | The table below provides the weighted average actual rate of return generated on all of our 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. 2020 2019 2018 Expected long-term rate of return on plan assets 3.46 % 7.09 % 7.34 % Actual rate of return (loss) on plan assets 14.06 % 12.59 % (3.85) % |
Allocation of plan assets | The following table provides the actual asset allocations of plan assets as of December 31, 2020 and 2019, and the related asset target allocation ranges by asset category: 2020 2019 Target Equity securities 20.8 % 18.6 % 15-60% Fixed income 22.9 % 31.7 % 10-50% Hedge funds 0.1 % 2.0 % 0-25% Private equity — % — % 0-20% Cash, insurance contracts and other 56.2 % 47.7 % 0-60% The following table provides the fair value of plan assets held by our pension benefit plans by asset class: 2020 2019 (in millions) Level 1 Level 2 Level 3 NAV Practical Expedient Total Level 1 Level 2 Level 3 NAV Practical Expedient Total Equity securities Global stock funds/securities $ 38 $ 66 $ — $ 14 $ 118 $ 90 $ — $ — $ 13 $ 103 Diversified growth and income funds — — — 26 26 — — — 9 9 Fixed income Corporate bonds 1 97 — 7 105 86 — — 5 91 Government bonds — 19 — 28 47 35 — — 27 62 Hedging instruments — 6 — — 6 4 35 — — 39 Hedge funds — — — 1 1 — — — 12 12 Insurance contracts and other — 384 — 384 — 13 3 16 Cash & cash equivalents 4 — — — 4 273 — — — 273 Total plan assets subject to leveling $ 43 $ 188 $ 384 $ 76 $ 691 $ 488 $ 35 $ 13 $ 69 $ 605 |
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) Insurance Contracts and Other Balance, December 31, 2018 $ 12 Purchases, sales, settlements, net 1 Currency impact — Balance, December 31, 2019 $ 13 Purchases, sales, settlements, net 314 Actual return on plan assets 44 Currency impact 13 Balance, December 31, 2020 $ 384 |
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 2021 $ 38 $ 3 2022 39 3 2023 40 3 2024 40 3 2025 42 3 Years 2026 - 2030 220 12 |
Share-Based Compensation Plans
Share-Based Compensation Plans (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Summary of the changes in outstanding stock options | The following is a summary of the changes in outstanding stock options for 2020: Share units (in thousands) Weighted Weighted Average Aggregate Intrinsic Value (in millions) Outstanding at January 1, 2020 2,040 $ 48.56 6.3 Granted 571 74.60 Exercised (521) 39.42 Forfeited and expired (129) 77.52 Outstanding at December 31, 2020 1,961 $ 56.66 6.4 $ 89 Options exercisable at December 31, 2020 1,227 $ 46.29 4.9 $ 68 Vested and non-vested expected to vest as of December 31, 2020 1,896 $ 56.08 6.3 $ 87 |
Weighted-average assumptions | The following are weighted-average assumptions used for 2020, 2019, and 2018: 2020 2019 2018 Dividend yield 1.42 % 1.30 % 1.12 % Volatility 24.16 % 24.10 % 23.41 % Risk-free interest rate 0.83 % 2.55 % 2.76 % Expected term (in years) 5.8 5.4 5.1 Weighted-average fair value per option $ 14.84 $ 17.04 $ 17.80 |
Summary of restricted stock activity | restricted stock units for 2020: Share Units (in thousands) Weighted Average Outstanding at January 1, 2020 512 $ 68.95 Granted 340 75.58 Vested (252) 63.91 Forfeited (63) 76.23 Outstanding at December 31, 2020 537 $ 74.62 |
Schedule of Share-based Compensation, Performance-Based Units Award Activity | ROIC performance share units for 2020: Share units (in thousands) Weighted Average Outstanding at January 1, 2020 225 $ 64.51 Granted 82 78.90 Adjustment for Performance Condition Achieved (a) — — Vested (89) 49.15 Forfeited (36) 76.67 Outstanding at December 31, 2020 182 $ 76.12 (a) Represents an increase in the number of original ROIC performance share units awarded based on the final performance criteria achievement at the end of the performance period of such awards. TSR Performance Share Unit Grants The following is a summary of the changes in outstanding TSR performance share units for 2020: Share units (in thousands) Weighted Average Outstanding at January 1, 2020 225 $ 75.80 Granted 82 102.05 Adjustment for Performance Condition Achieved (a) 35 47.81 Vested (124) 47.81 Forfeited (36) 92.03 Outstanding at December 31, 2020 182 $ 96.98 |
Fair value assumptions for performance-based awards | The following are weighted-average key assumptions for 2020 grants. Volatility 22.6 % Risk-free interest rate 1.08 % |
Capital Stock (Tables)
Capital Stock (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Schedule of Common Stock Outstanding Roll Forward | The changes in shares of common stock outstanding for the three years ended December 31 are as follows: (share units in thousands) 2020 2019 2018 Beginning Balance, January 1 180,140 179,724 179,862 Stock incentive plan net activity 986 952 672 Repurchase of common stock (772) (536) (810) Ending Balance, December 31 180,354 180,140 179,724 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accumulated Other Comprehensive Income [Abstract] | |
Components of Accumulated Other Comprehensive Loss | The following table provides the components of accumulated other comprehensive loss for 2020, 2019 and 2018: (in millions) Foreign Currency Translation Post-retirement Benefit Plans Derivative Instruments Total Balance at January 1, 2018 $ (15) $ (198) $ 3 $ (210) Cumulative effect of change in accounting principle (11) (6) (17) Foreign currency translation adjustment (83) (83) Income tax impact on foreign currency translation adjustment (12) (12) Changes in post-retirement benefit plans (36) (36) Foreign currency translation adjustment for post-retirement benefit plans 15 15 Income tax expense on changes in post-retirement benefit plans 5 5 Amortization of prior service cost and net actuarial loss on post-retirement benefit plans into other non-operating income (expense), net 9 9 Income tax impact on amortization of post-retirement benefit plan items (3) (3) Unrealized loss on derivative hedge agreements (8) (8) Reclassification of unrealized (gain) loss on foreign exchange agreements into cost of revenue 4 4 Balance at December 31, 2018 $ (121) $ (214) $ (1) $ (336) Foreign currency translation adjustment 27 27 Income tax impact on foreign currency translation adjustment (9) — (9) Changes in post-retirement benefit plans (83) (83) Settlement charge released into other non-operating income (expense), net 9 9 Foreign currency translation adjustment for post-retirement benefit plans (3) (3) Income tax expense on changes in post-retirement benefit plans, including settlement 16 16 Amortization of prior service cost and net actuarial loss on post-retirement benefit plans into other non-operating income (expense), net 8 8 Income tax impact on amortization of post-retirement benefit plan items (2) (2) Unrealized loss on derivative hedge agreements (14) (14) Reclassification of unrealized loss on foreign exchange agreements into revenue 7 7 Reclassification of unrealized loss on foreign exchange agreements into cost of revenue 5 5 Balance at December 31, 2019 $ (103) $ (269) $ (3) $ (375) Foreign currency translation adjustment (22) (22) Income tax impact on foreign currency translation adjustment 39 39 Changes in post-retirement benefit plans (73) (73) (in millions) Foreign Currency Translation Post-retirement Benefit Plans Derivative Instruments Total Foreign currency translation adjustment for post-retirement benefit plans (19) (19) Income tax expense on changes in post-retirement benefit plans 18 18 Amortization of prior service cost and net actuarial loss on post-retirement benefit plans into other non-operating income (expense), net 16 16 Income tax impact on amortization of post-retirement benefit plan items (3) (3) Unrealized gain on derivative hedge agreements 9 9 Reclassification of unrealized gain on foreign exchange agreements into revenue (4) (4) Reclassification of unrealized loss on foreign exchange agreements into cost of revenue 1 1 Balance at December 31, 2020 $ (86) $ (330) $ 3 $ (413) |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Changes in product warranty accrual | The table below provides changes in the combined current and non-current product warranty accruals over each period. (in millions) 2020 2019 2018 Warranty accrual – January 1 $ 41 $ 60 $ 82 Net charges for product warranties in the period 57 25 20 Settlement of warranty claims (34) (42) (42) Foreign currency and other 1 (2) — Warranty accrual – December 31 $ 65 $ 41 $ 60 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions | Sales to and purchases from unconsolidated entities for 2020, 2019 and 2018 are as follows: (in millions) 2020 2019 2018 Sales to unconsolidated affiliates $ 10 $ 10 $ 10 Purchases from unconsolidated affiliates 16 22 22 |
Segment and Geographic Data (Ta
Segment and Geographic Data (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
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, "Summary of Significant Accounting Policies"). The following tables contain financial information for each reportable segment: Year Ended December 31, (in millions) 2020 2019 2018 Revenue: Water Infrastructure $ 2,079 $ 2,177 $ 2,176 Applied Water 1,434 1,541 1,534 Measurement & Control Solutions 1,363 1,531 1,497 Total $ 4,876 $ 5,249 $ 5,207 Operating income: Water Infrastructure $ 318 $ 365 $ 359 Applied Water 205 241 236 Measurement & Control Solutions (106) (67) 118 Corporate and other (50) (53) (59) Total operating income 367 486 654 Interest expense 77 67 82 Other non-operating (expense) income, net (5) (4) 13 Gain on sale of businesses — 1 — Income before taxes $ 285 $ 416 $ 585 Depreciation and amortization: Water Infrastructure $ 57 $ 61 $ 66 Applied Water 24 24 22 Measurement & Control Solutions 142 144 144 Regional selling locations (a) 20 18 20 Corporate and other 8 10 9 Total $ 251 $ 257 $ 261 Capital expenditures: Water Infrastructure $ 48 $ 79 $ 84 Applied Water 18 19 28 Measurement & Control Solutions 90 100 101 Regional selling locations (b) 22 19 16 Corporate and other 5 9 8 Total $ 183 $ 226 $ 237 (a) Depreciation and amortization expense incurred by the Regional selling locations was included in an overall allocation of Regional selling location costs to the segments; however, a certain portion of that expense was not specifically identified to a segment. That expense is captured in this Regional selling location line. (b) Represents capital expenditures incurred by the Regional selling locations not allocated to the segments. |
Revenue by product category | The following table illustrates revenue by product category, net of intercompany revenue: Year Ended December 31, (in millions) 2020 2019 2018 Pumps, accessories, parts and service $ 3,120 $ 3,324 $ 3,322 Other (a) 1,756 1,925 1,885 Total $ 4,876 $ 5,249 $ 5,207 (a) Other includes treatment equipment, analytical instrumentation, heat exchangers, valves, controls and smart meters. |
Total assets for each reportable segment | The following table contains the total assets for each reportable segment as of December 31, 2020, 2019 and 2018: Total Assets (in millions) 2020 2019 2018 Water Infrastructure $ 1,255 $ 1,268 $ 1,233 Applied Water 1,005 1,016 1,051 Measurement & Control Solutions 3,345 3,497 3,576 Regional selling locations (a) 1,413 1,375 1,181 Corporate and other (b) 1,732 554 181 Total $ 8,750 $ 7,710 $ 7,222 (a) The Regional selling locations have assets that consist primarily of cash, accounts receivable and inventory which are not allocated to the segments. |
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) 2020 2019 2018 United States $ 2,297 $ 2,554 $ 2,424 Europe 1,407 1,380 1,449 Asia Pacific 618 659 660 Other 554 656 674 Total $ 4,876 $ 5,249 $ 5,207 Property, Plant & Equipment December 31, (in millions) 2020 2019 2018 United States $ 253 $ 274 $ 281 Europe 277 249 250 Asia Pacific 64 67 66 Other 63 68 59 Total $ 657 $ 658 $ 656 |
Valuation and Qualifying Acco_2
Valuation and Qualifying Accounts (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |
Schedule of Valuation and Qualifying Accounts | The table below provides changes in the allowance for credit losses over each period: (in millions) 2020 2019 2018 Balance at beginning of year $ 25 $ 25 $ 25 Additions charged to expense 25 3 5 Deductions/other (12) (3) (5) Balance at end of year $ 38 $ 25 $ 25 |
Quarterly Financial Data (Una_2
Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Data (Unaudited) | Our quarterly financial periods end on the Saturday closest to the last day of the calendar quarter, except for the fourth quarter which ends on December 31. 2020 Quarter Ended (in millions, except per share amounts) Dec. 31 Sept. 30 (a) June 30 Mar. 31 Revenue $ 1,373 $ 1,220 $ 1,160 $ 1,123 Gross profit 526 461 434 409 Operating income 179 73 54 61 Net income $ 148 $ 37 $ 31 $ 38 Earnings per share: Basic $ 0.82 $ 0.20 $ 0.17 $ 0.21 Diluted $ 0.82 $ 0.20 $ 0.17 $ 0.21 2019 Quarter Ended (in millions, except per share amounts) Dec. 31 Sept. 30 (b) June 30 Mar. 31 Revenue $ 1,371 $ 1,296 $ 1,345 $ 1,237 Gross profit 537 509 526 474 Operating income 195 11 171 109 Net income $ 118 $ 65 $ 139 $ 79 Earnings per share: Basic $ 0.66 $ 0.36 $ 0.77 $ 0.44 Diluted $ 0.65 $ 0.36 $ 0.77 $ 0.43 (a) The amounts shown for the quarter ended September 30, 2020 include a goodwill impairment charge of $58 million related to the AIA goodwill reporting unit. Refer to Note 12 to the consolidated financial statements for further information regarding goodwill. (b) The amounts shown for the quarter ended September 30, 2019 include a goodwill impairment charge of $148 million related to the AIA goodwill reporting unit. Refer to Note 12 to the consolidated financial statements for further information regarding goodwill. |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Property, Plant and Equipment, Useful Lives) (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Building and improvements | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment estimated useful lives | 5 years |
Building and improvements | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment estimated useful lives | 40 years |
Machinery and equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment estimated useful lives | 2 years |
Machinery and equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment estimated useful lives | 10 years |
Furniture and fixtures | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment estimated useful lives | 3 years |
Furniture and fixtures | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment estimated useful lives | 7 years |
Equipment held for lease or rental | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment estimated useful lives | 2 years |
Equipment held for lease or rental | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment estimated useful lives | 10 years |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details Textual) $ in Millions | 12 Months Ended | |
Dec. 31, 2020USD ($)Segment | Dec. 31, 2019USD ($) | |
Operating segments | Segment | 3 | |
Requisite service period | 3 years | |
Minimum | ||
Intangible assets estimated economic useful lives | 1 year | |
Maximum | ||
Intangible assets estimated economic useful lives | 25 years | |
Foreign Currency | ||
Cash | $ | $ 635 | $ 510 |
Acquisitions and Divestitures_2
Acquisitions and Divestitures (Details Textual) - USD ($) $ in Millions | Jan. 31, 2018 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Business Acquisition [Line Items] | ||||||
Cash payment to acquire business, net of cash acquired | $ 0 | $ 18 | $ 433 | |||
Proceeds from divestiture of businesses | 0 | $ 0 | $ 22 | |||
Precision Die Casting | ||||||
Business Acquisition [Line Items] | ||||||
Revenue | $ 32 | |||||
Pure | ||||||
Business Acquisition [Line Items] | ||||||
Cash payment to acquire business, net of cash acquired | $ 420 | |||||
Acquisition costs | $ 4 | |||||
Revenue | 96 | |||||
Net income | 2 | |||||
Revenue | 5,212 | |||||
Other Acquisitions | ||||||
Business Acquisition [Line Items] | ||||||
Cash payment to acquire business, net of cash acquired | $ 13 | |||||
Disposals | Precision Die Casting | ||||||
Business Acquisition [Line Items] | ||||||
Proceeds from divestiture of businesses | $ 22 |
Acquisitions and Divestitures_3
Acquisitions and Divestitures (Summary of Assets Acquired and Liabilities Assumed) (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Jan. 31, 2018 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 2,854 | $ 2,839 | $ 2,976 | |
Pure | ||||
Business Acquisition [Line Items] | ||||
Cash | $ 14 | |||
Receivables | 23 | |||
Inventories | 4 | |||
Prepaid and other current assets | 2 | |||
Property, plant and equipment | 22 | |||
Intangible assets | 149 | |||
Other long-term assets | 1 | |||
Accounts payable | (3) | |||
Accrued and other current liabilities | (12) | |||
Deferred income tax liabilities | (25) | |||
Other non-current accrued liabilities | (2) | |||
Total identifiable net assets | 173 | |||
Goodwill | 261 | |||
Total consideration | $ 434 |
Acquisitions and Divestitures_4
Acquisitions and Divestitures (Summary of Intangible Assets Acquired) (Details) - Pure $ in Millions | Jan. 31, 2018USD ($) |
Business Acquisition [Line Items] | |
Intangible assets | $ 149 |
Customer Relationships | |
Business Acquisition [Line Items] | |
Intangible assets | 84 |
Technology | |
Business Acquisition [Line Items] | |
Intangible assets | 38 |
Tradenames | |
Business Acquisition [Line Items] | |
Intangible assets | 21 |
Software Development | |
Business Acquisition [Line Items] | |
Intangible assets | $ 6 |
Minimum | Customer Relationships | |
Business Acquisition [Line Items] | |
Life | 17 years |
Minimum | Technology | |
Business Acquisition [Line Items] | |
Life | 3 years |
Maximum | Customer Relationships | |
Business Acquisition [Line Items] | |
Life | 18 years |
Maximum | Technology | |
Business Acquisition [Line Items] | |
Life | 10 years |
Acquisitions and Divestitures_5
Acquisitions and Divestitures (Summary of Pro Forma Information) (Details) - Pure $ in Millions | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Business Acquisition [Line Items] | |
Revenue | $ 5,212 |
Net income | $ 546 |
Restructuring and Asset Impai_3
Restructuring and Asset Impairment Charges (Components of Restructuring Charges and Segment Allocation) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||
Sep. 30, 2020 | Jun. 30, 2020 | Sep. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Restructuring Cost and Reserve [Line Items] | |||||||
Severance and other charges | $ 36 | $ 51 | $ 19 | ||||
Lease related charges | 0 | 1 | 1 | ||||
Asset impairment | 18 | 0 | 0 | ||||
Other restructuring charges | 1 | 2 | 1 | ||||
Reversal of restructuring accruals | (1) | (1) | (1) | ||||
Total restructuring charges | 54 | 53 | 20 | ||||
Asset impairment charges | 21 | 10 | 2 | ||||
Total restructuring and asset impairment charges | 75 | 63 | 22 | ||||
Water Infrastructure | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring and asset impairment charges | 20 | 20 | 11 | ||||
Applied Water | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring and asset impairment charges | 4 | 5 | 2 | ||||
Measurement & Control Solutions | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Asset impairment charges | $ 11 | $ 10 | $ 7 | $ 3 | |||
Restructuring and asset impairment charges | $ 51 | $ 38 | $ 9 |
Restructuring and Asset Impai_4
Restructuring and Asset Impairment Charges (Restructuring Reserve Rollforward) (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | ||
Restructuring Reserve [Roll Forward] | ||||
Restructuring accruals | $ 27 | $ 5 | ||
Severance and other | 54 | 53 | $ 20 | |
Cash payments | (36) | (30) | (21) | |
Asset impairment | (18) | 0 | 0 | |
Foreign currency and other | 2 | (1) | ||
Restructuring accruals | 29 | 27 | $ 5 | |
Water Infrastructure | ||||
Restructuring Reserve [Roll Forward] | ||||
Restructuring accruals | 1 | |||
Restructuring accruals | 4 | 1 | ||
Applied Water | ||||
Restructuring Reserve [Roll Forward] | ||||
Restructuring accruals | 0 | |||
Restructuring accruals | 1 | 0 | ||
Measurement & Control Solutions | ||||
Restructuring Reserve [Roll Forward] | ||||
Restructuring accruals | 19 | |||
Restructuring accruals | 18 | 19 | ||
Regional Selling Locations | ||||
Restructuring Reserve [Roll Forward] | ||||
Restructuring accruals | [1] | 7 | ||
Restructuring accruals | [1] | 5 | 7 | |
Corporate and other | ||||
Restructuring Reserve [Roll Forward] | ||||
Restructuring accruals | 0 | |||
Restructuring accruals | $ 1 | $ 0 | ||
[1] | Regional selling locations consist primarily of selling and marketing organizations that incurred restructuring expense which was allocated to the segments. The liabilities associated with restructuring expense were not allocated to the segments. |
Restructuring and Asset Impai_5
Restructuring and Asset Impairment Charges - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||
Sep. 30, 2020 | Jun. 30, 2020 | Sep. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Restructuring Cost and Reserve [Line Items] | |||||||
Asset impairment charges | $ 21 | $ 10 | $ 2 | ||||
Asset impairment | 18 | 0 | $ 0 | ||||
Measurement & Control Solutions | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Asset impairment charges | $ 11 | $ 10 | $ 7 | $ 3 | |||
2016 Restructuring Plan | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Expected restructuring costs | 51 | ||||||
Incurred restructuring costs | $ 1 | $ 50 | |||||
2020 Restructuring Plan | Measurement & Control Solutions | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Asset impairment | $ 17 |
Restructuring and Asset Impai_6
Restructuring and Asset Impairment Charges - Estimated Restructuring Costs (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
2017 Restructuring Plan | ||
Restructuring Cost and Reserve [Line Items] | ||
Expected restructuring costs | $ 73 | |
Incurred restructuring costs | 53 | |
Expected costs remaining | 20 | |
2016 Restructuring Plan | ||
Restructuring Cost and Reserve [Line Items] | ||
Expected restructuring costs | 51 | |
Incurred restructuring costs | 1 | $ 50 |
Expected costs remaining | 0 | |
Corporate | 2017 Restructuring Plan | ||
Restructuring Cost and Reserve [Line Items] | ||
Expected restructuring costs | 2 | |
Incurred restructuring costs | 0 | |
Expected costs remaining | 2 | |
Corporate | 2016 Restructuring Plan | ||
Restructuring Cost and Reserve [Line Items] | ||
Expected restructuring costs | 0 | |
Incurred restructuring costs | 0 | 0 |
Expected costs remaining | 0 | |
Operating Segments | Water Infrastructure | 2017 Restructuring Plan | ||
Restructuring Cost and Reserve [Line Items] | ||
Expected restructuring costs | 26 | |
Incurred restructuring costs | 19 | |
Expected costs remaining | 7 | |
Operating Segments | Water Infrastructure | 2016 Restructuring Plan | ||
Restructuring Cost and Reserve [Line Items] | ||
Expected restructuring costs | 19 | |
Incurred restructuring costs | 1 | 18 |
Expected costs remaining | 0 | |
Operating Segments | Applied Water | 2017 Restructuring Plan | ||
Restructuring Cost and Reserve [Line Items] | ||
Expected restructuring costs | 11 | |
Incurred restructuring costs | 4 | |
Expected costs remaining | 7 | |
Operating Segments | Applied Water | 2016 Restructuring Plan | ||
Restructuring Cost and Reserve [Line Items] | ||
Expected restructuring costs | 5 | |
Incurred restructuring costs | 0 | 5 |
Expected costs remaining | 0 | |
Operating Segments | Measurement & Control Solutions | 2017 Restructuring Plan | ||
Restructuring Cost and Reserve [Line Items] | ||
Expected restructuring costs | 34 | |
Incurred restructuring costs | 30 | |
Expected costs remaining | 4 | |
Operating Segments | Measurement & Control Solutions | 2016 Restructuring Plan | ||
Restructuring Cost and Reserve [Line Items] | ||
Expected restructuring costs | 27 | |
Incurred restructuring costs | 0 | $ 27 |
Expected costs remaining | $ 0 |
Revenue (Details)
Revenue (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Change in Contract with Customer, Asset [Abstract] | ||
Beginning balance | $ 106 | $ 96 |
Additions, net | 118 | 81 |
Billings transferred to accounts receivable | (110) | 80 |
Other | 3 | 9 |
Ending balance | 117 | 106 |
Change in Contract with Customer, Liability [Abstract] | ||
Beginning balance | 135 | 113 |
Additions, net | 120 | 114 |
Revenue recognized from opening balance | (93) | (91) |
Other | 4 | (1) |
Ending balance | $ 166 | $ 135 |
Revenue - Disaggregation of Rev
Revenue - Disaggregation of Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue from contracts with customers | $ 4,681 | $ 5,002 | $ 4,963 | ||||||||
Other | 195 | 247 | 244 | ||||||||
Total | $ 1,373 | $ 1,220 | $ 1,160 | $ 1,123 | $ 1,371 | $ 1,296 | $ 1,345 | $ 1,237 | 4,876 | 5,249 | 5,207 |
United States | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total | 2,297 | 2,554 | 2,424 | ||||||||
Europe | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total | 1,407 | 1,380 | 1,449 | ||||||||
Water Infrastructure | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total | 2,079 | 2,177 | 2,176 | ||||||||
Water Infrastructure | United States | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue from contracts with customers | 558 | 593 | 539 | ||||||||
Water Infrastructure | Europe | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue from contracts with customers | 751 | 729 | 758 | ||||||||
Water Infrastructure | Emerging Markets & Other | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue from contracts with customers | 341 | 358 | 344 | ||||||||
Water Infrastructure | Other | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue from contracts with customers | 234 | 250 | 291 | ||||||||
Water Infrastructure | Transport | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue from contracts with customers | 1,484 | 1,533 | 1,535 | ||||||||
Water Infrastructure | Treatment | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue from contracts with customers | 400 | 397 | 397 | ||||||||
Applied Water | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total | 1,434 | 1,541 | 1,534 | ||||||||
Applied Water | United States | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue from contracts with customers | 754 | 816 | 797 | ||||||||
Applied Water | Europe | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue from contracts with customers | 356 | 362 | 386 | ||||||||
Applied Water | Emerging Markets & Other | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue from contracts with customers | 152 | 164 | 153 | ||||||||
Applied Water | Other | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue from contracts with customers | 172 | 199 | 198 | ||||||||
Applied Water | Commercial Building Services | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue from contracts with customers | 804 | 848 | 828 | ||||||||
Applied Water | Industrial Water | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue from contracts with customers | 630 | 693 | 706 | ||||||||
Measurement & Control Solutions | United States | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue from contracts with customers | 856 | 972 | 913 | ||||||||
Measurement & Control Solutions | Europe | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue from contracts with customers | 266 | 257 | 273 | ||||||||
Measurement & Control Solutions | Emerging Markets & Other | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue from contracts with customers | 109 | 118 | 144 | ||||||||
Measurement & Control Solutions | Other | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue from contracts with customers | 132 | 184 | 167 | ||||||||
Measurement & Control Solutions | Water | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue from contracts with customers | 689 | 768 | 692 | ||||||||
Measurement & Control Solutions | Electric | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue from contracts with customers | 276 | 337 | 338 | ||||||||
Measurement & Control Solutions | Software and Services/Other | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue from contracts with customers | 92 | 99 | 123 | ||||||||
Measurement & Control Solutions | Test | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue from contracts with customers | $ 306 | $ 327 | $ 344 |
Revenue (Narrative) (Details)
Revenue (Narrative) (Details) $ in Millions | Dec. 31, 2020USD ($) |
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligation | $ 422 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Expected timing of recognition | 60 months |
Other Non-Operating Income, N_3
Other Non-Operating Income, Net (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Other Income and Expenses [Abstract] | |||
Interest income | $ 7 | $ 5 | $ 4 |
Income from joint ventures | 2 | 3 | 5 |
Other income (expense) - net | (14) | (12) | 4 |
Total other non-operating (expense) income, net | $ (5) | $ (4) | $ 13 |
Income Taxes (Components of Inc
Income Taxes (Components of Income Tax Expense) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income (loss) components: | |||
Domestic | $ (33) | $ 203 | $ 208 |
Foreign | 318 | 213 | 377 |
Income before taxes | 285 | 416 | 585 |
Current: | |||
Domestic – federal | 24 | 39 | 9 |
Domestic – state and local | 5 | 13 | 13 |
Foreign | 33 | 40 | 61 |
Total Current | 62 | 92 | 83 |
Deferred: | |||
Domestic – federal | (21) | 7 | 17 |
Domestic – state and local | (8) | (1) | 5 |
Foreign | (2) | (83) | (69) |
Total Deferred | (31) | (77) | (47) |
Total income tax provision | $ 31 | $ 15 | $ 36 |
Effective income tax rate | 10.90% | 3.70% | 6.10% |
Income Taxes (Income Tax Rate R
Income Taxes (Income Tax Rate Reconciliation) (Details) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |||
Tax provision at U.S. statutory rate | 21.00% | 21.00% | 21.00% |
State income taxes | 0.70% | 2.70% | 2.30% |
Uncertain tax positions | (3.90%) | 0.40% | 2.60% |
Valuation allowance | 0.50% | 1.20% | (47.10%) |
Tax exempt interest | (4.50%) | (3.00%) | (1.40%) |
Foreign tax rate differential | (0.90%) | 0.70% | 2.90% |
Impact of foreign earnings, net | 5.30% | 1.60% | (1.70%) |
Tax incentives | (7.40%) | (9.60%) | (6.20%) |
Intercompany sale of assets | 0.00% | 0.00% | 35.50% |
Other – net | 2.20% | 1.70% | (0.30%) |
Rate change | (1.30%) | (18.10%) | 0.00% |
Goodwill impairment | 2.90% | 7.80% | 0.00% |
Federal R&D tax credit | (1.30%) | (1.20%) | (0.80%) |
Stock compensation | (2.40%) | (1.50%) | (0.70%) |
Effective income tax rate | 10.90% | 3.70% | 6.10% |
Income Taxes (Components of Def
Income Taxes (Components of Deferred Tax Assets and Liabilities) (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred tax assets: | ||
Employee benefits | $ 127 | $ 106 |
Accrued expenses | 35 | 26 |
Loss and other tax credit carryforwards | 270 | 240 |
Inventory | 6 | 6 |
Lease Liabilities | 64 | 57 |
Other | 41 | 3 |
Total deferred tax assets | 543 | 438 |
Valuation allowance | (217) | (191) |
Net deferred tax asset | 326 | 247 |
Deferred tax liabilities: | ||
Intangibles | 138 | 160 |
Investment in foreign subsidiaries | 5 | 7 |
Property, plant and equipment | 77 | 78 |
Lease right-of-use assets | 62 | 57 |
Other | 30 | 29 |
Total deferred tax liabilities | $ 312 | $ 331 |
Income Taxes (Reconciliation of
Income Taxes (Reconciliation of Valuation Allowance of Deferred Tax Assets) (Details) - Valuation Allowance of Deferred Tax Assets - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at beginning of year | $ 191 | $ 234 | $ 350 |
Change in assessment (a) | 1 | (2) | 1 |
Current year operations | 7 | 2 | (271) |
Foreign currency and other | 18 | (43) | 154 |
Balance at end of year | $ 217 | $ 191 | $ 234 |
Income Taxes (Classification of
Income Taxes (Classification of Unrecognized Tax Benefits) (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Income Tax Disclosure [Abstract] | ||
Non-current assets | $ 256 | $ 226 |
Non-current liabilities | (242) | (310) |
Deferred Tax Assets, Net | $ 14 | |
Total net deferred tax liabilities | $ 84 |
Income Taxes (Summary of Operat
Income Taxes (Summary of Operating Losses and Tax Credits) (Details) $ in Millions | Dec. 31, 2020USD ($) |
United States | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss | $ 7 |
State | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss | 97 |
Tax credits | 1 |
Foreign | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss | 1,153 |
Tax credits | 4 |
Excess Interest Expense | State | |
Operating Loss Carryforwards [Line Items] | |
Tax credits | $ 10 |
Income Taxes (Summary of Unreco
Income Taxes (Summary of Unrecognized Tax Benefits) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Unrecognized tax benefits — January 1 | $ 129 | $ 136 | $ 130 |
Current year tax positions | 0 | 3 | 0 |
Prior year tax positions | 7 | ||
Prior year tax positions | (3) | (5) | |
Settlements | (12) | (5) | (1) |
Unrecognized tax benefits — December 31 | $ 114 | $ 129 | $ 136 |
Income Taxes (Details Textual)
Income Taxes (Details Textual) - USD ($) $ in Millions | 12 Months Ended | ||||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Contingency [Line Items] | |||||
Valuation allowance | $ 217 | $ 191 | |||
Reinvestments in foreign operations | 1,600 | ||||
Total income tax provision | $ 31 | $ 15 | $ 36 | ||
Effective income tax rate | 10.90% | 3.70% | 6.10% | ||
Unrecognized tax benefits | $ 114 | $ 129 | $ 136 | $ 130 | |
Interest accrued for unrecognized tax benefits | 8 | $ 8 | |||
Foreign | |||||
Income Tax Contingency [Line Items] | |||||
Deferred tax liability | 7 | ||||
State | |||||
Income Tax Contingency [Line Items] | |||||
Deferred tax liability | $ 500 | ||||
Forecast | |||||
Income Tax Contingency [Line Items] | |||||
Unrecognized tax benefits, reduction due to lapse of statute of limitations | $ 1 |
Earnings Per Share (Calculation
Earnings Per Share (Calculation of EPS) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Basic and diluted net earnings per share: | |||||||||||
Net income (in usd) | $ 148 | $ 37 | $ 31 | $ 38 | $ 118 | $ 65 | $ 139 | $ 79 | $ 254 | $ 401 | $ 549 |
Net income | $ 254 | $ 401 | $ 549 | ||||||||
Shares | |||||||||||
Weighted average common shares outstanding | 180,094 | 179,958 | 179,750 | ||||||||
Add: Participating securities | 22 | 29 | 27 | ||||||||
Weighted average common shares outstanding — Basic | 180,116 | 179,987 | 179,777 | ||||||||
Plus incremental shares from assumed conversions: | |||||||||||
Weighted average common shares outstanding — Diluted | 181,099 | 181,196 | 181,132 | ||||||||
Basic earnings per share (in usd per share) | $ 0.82 | $ 0.20 | $ 0.17 | $ 0.21 | $ 0.66 | $ 0.36 | $ 0.77 | $ 0.44 | $ 1.41 | $ 2.23 | $ 3.05 |
Diluted earnings per share (in usd per share) | $ 0.82 | $ 0.20 | $ 0.17 | $ 0.21 | $ 0.65 | $ 0.36 | $ 0.77 | $ 0.43 | $ 1.40 | $ 2.21 | $ 3.03 |
Stock Options | |||||||||||
Plus incremental shares from assumed conversions: | |||||||||||
Dilutive effect of common shares | 671 | 803 | 876 | ||||||||
Restricted Stock | |||||||||||
Plus incremental shares from assumed conversions: | |||||||||||
Dilutive effect of common shares | 312 | 406 | 479 |
Earnings Per Share (Summary of
Earnings Per Share (Summary of Antidilutive Securities) (Details) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Stock Options | |||
Incremental shares from stock options and restricted stock: | |||
Antidilutive securities | 1,545 | 1,383 | 1,300 |
Restricted Stock | |||
Incremental shares from stock options and restricted stock: | |||
Antidilutive securities | 362 | 348 | 333 |
Performance Based Shares | |||
Incremental shares from stock options and restricted stock: | |||
Antidilutive securities | 305 | 394 | 465 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Inventories | ||
Finished goods | $ 221 | $ 212 |
Work in process | 49 | 47 |
Raw materials | 288 | 280 |
Total inventories | $ 558 | $ 539 |
Property, Plant and Equipment_2
Property, Plant and Equipment (Components of Property, Plant and Equipment) (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment | ||
Property, plant and equipment, gross | $ 1,814 | $ 1,702 |
Less accumulated depreciation | 1,157 | 1,044 |
Total property, plant and equipment, net | 657 | 658 |
Land, buildings and improvements | ||
Property, Plant and Equipment | ||
Property, plant and equipment, gross | 369 | 339 |
Machinery and equipment | ||
Property, Plant and Equipment | ||
Property, plant and equipment, gross | 941 | 861 |
Equipment held for lease or rental | ||
Property, Plant and Equipment | ||
Property, plant and equipment, gross | 241 | 256 |
Furniture and fixtures | ||
Property, Plant and Equipment | ||
Property, plant and equipment, gross | 124 | 118 |
Construction work in progress | ||
Property, Plant and Equipment | ||
Property, plant and equipment, gross | 110 | 104 |
Other | ||
Property, Plant and Equipment | ||
Property, plant and equipment, gross | $ 29 | $ 24 |
Property, Plant and Equipment_3
Property, Plant and Equipment (Details Textual) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation expense | $ 117 | $ 117 | $ 117 |
Leases (Textuals) (Details)
Leases (Textuals) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Lessor, Lease, Description [Line Items] | |||
Operating liability, current | $ 63 | $ 61 | |
Operating liability, noncurrent | 216 | 185 | |
Right-of-use assets | 272 | 241 | |
Revenue from lease arrangements | 195 | 247 | |
Assets subject to rental | 241 | 256 | |
Assets subject to rental, accumulated amortization | 159 | 166 | |
Operating Leases, Rent Expense | $ 81 | ||
Depreciation | $ 117 | $ 117 | $ 117 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | us-gaap:AccruedLiabilitiesCurrent | us-gaap:AccruedLiabilitiesCurrent | |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | us-gaap:OtherAccruedLiabilitiesNoncurrent | us-gaap:OtherAccruedLiabilitiesNoncurrent | |
Leased Assets | |||
Lessor, Lease, Description [Line Items] | |||
Depreciation | $ 25 | $ 28 |
Leases (Lease Costs) (Details)
Leases (Lease Costs) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Leases [Abstract] | ||
Operating lease cost | $ 77 | $ 76 |
Short-term lease cost | 2 | 9 |
Variable lease cost | 22 | 19 |
Total lease cost | $ 101 | $ 104 |
Leases (Supplemental Lease Info
Leases (Supplemental Lease Information) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Leases [Abstract] | ||
Operating cash flows from operating leases | $ 75 | $ 73 |
Operating leases | $ 64 | $ 33 |
Operating leases | 7 years | 6 years |
Operating leases | 2.50% | 2.70% |
Leases (Lease Maturities) (Deta
Leases (Lease Maturities) (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Operating Leases | |
2020 | $ 68 |
2021 | 54 |
2022 | 42 |
2023 | 32 |
2024 | 24 |
Thereafter | 77 |
Total lease payments | 297 |
Less: Imputed interest | (22) |
Total | 275 |
Lease payments not yet commenced | $ 27 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets (Rollforward of Goodwill) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Changes in the carrying value of goodwill by operating segment | |||||
Beginning Balance | $ 2,839 | $ 2,976 | |||
Goodwill acquired | 19 | ||||
Goodwill, Impairment Loss | $ (58) | $ (148) | (58) | (148) | $ 0 |
Foreign currency and other | 73 | (8) | |||
Ending Balance | 2,854 | 2,839 | 2,976 | ||
Water Infrastructure | |||||
Changes in the carrying value of goodwill by operating segment | |||||
Beginning Balance | 651 | 653 | |||
Goodwill acquired | 0 | ||||
Goodwill, Impairment Loss | 0 | 0 | |||
Foreign currency and other | 17 | (2) | |||
Ending Balance | 668 | 651 | 653 | ||
Applied Water | |||||
Changes in the carrying value of goodwill by operating segment | |||||
Beginning Balance | 513 | 516 | |||
Goodwill acquired | 0 | ||||
Goodwill, Impairment Loss | 0 | 0 | |||
Foreign currency and other | 16 | (3) | |||
Ending Balance | 529 | 513 | 516 | ||
Measurement & Control Solutions | |||||
Changes in the carrying value of goodwill by operating segment | |||||
Beginning Balance | 1,675 | 1,807 | |||
Goodwill acquired | 19 | ||||
Goodwill, Impairment Loss | $ (58) | (58) | (148) | ||
Foreign currency and other | 40 | (3) | |||
Ending Balance | $ 1,657 | $ 1,675 | $ 1,807 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets (Details Textual) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Sep. 30, 2020 | Jun. 30, 2020 | Sep. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Goodwill and Other Intangible Assets (Textual) [Abstract] | ||||||||
Goodwill, Impairment Loss | $ 58 | $ 148 | $ 58 | $ 148 | $ 0 | |||
Amortization expense related to finite-lived intangible assets | 134 | 140 | $ 144 | |||||
Accumulated impairment loss | $ 206 | 148 | ||||||
Customer and Distributor Relationships | ||||||||
Goodwill and Other Intangible Assets (Textual) [Abstract] | ||||||||
Finite-Lived Intangible Asset, Useful Life | 14 years | |||||||
Internally Developed Network Software | ||||||||
Goodwill and Other Intangible Assets (Textual) [Abstract] | ||||||||
Finite-Lived Intangible Asset, Useful Life | 5 years | |||||||
Proprietary Technology | ||||||||
Goodwill and Other Intangible Assets (Textual) [Abstract] | ||||||||
Finite-Lived Intangible Asset, Useful Life | 14 years | |||||||
Trademarks | ||||||||
Goodwill and Other Intangible Assets (Textual) [Abstract] | ||||||||
Finite-Lived Intangible Asset, Useful Life | 13 years | |||||||
Other | ||||||||
Goodwill and Other Intangible Assets (Textual) [Abstract] | ||||||||
Finite-Lived Intangible Asset, Useful Life | 4 years | |||||||
Water Infrastructure | ||||||||
Goodwill and Other Intangible Assets (Textual) [Abstract] | ||||||||
Goodwill, Impairment Loss | $ 0 | 0 | ||||||
Measurement & Control Solutions | ||||||||
Goodwill and Other Intangible Assets (Textual) [Abstract] | ||||||||
Goodwill, Impairment Loss | 58 | $ 58 | $ 148 | |||||
Impairment of Intangible Assets, Finite-lived | $ 11 | $ 16 | $ 7 | |||||
Measurement & Control Solutions | Customer and Distributor Relationships | ||||||||
Goodwill and Other Intangible Assets (Textual) [Abstract] | ||||||||
Impairment of Intangible Assets, Finite-lived | $ 3 | |||||||
Measurement & Control Solutions | Internally Developed Network Software | ||||||||
Goodwill and Other Intangible Assets (Textual) [Abstract] | ||||||||
Impairment of Intangible Assets, Finite-lived | $ 10 |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets (Summary of Other Intangible Assets) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Goodwill and Other Intangible Assets | ||
Accumulated Amortization | $ (887) | $ (737) |
Indefinite-lived intangibles | 169 | 166 |
Intangible Assets Gross, Carrying Amount | 1,980 | 1,911 |
Intangible Assets, Net Intangibles | 1,093 | 1,174 |
Customer and Distributor Relationships | ||
Goodwill and Other Intangible Assets | ||
Carrying Amount | 941 | 945 |
Accumulated Amortization | (410) | (352) |
Net Intangibles | $ 531 | 593 |
Finite-Lived Intangible Asset, Useful Life | 14 years | |
Proprietary Technology | ||
Goodwill and Other Intangible Assets | ||
Carrying Amount | $ 206 | 204 |
Accumulated Amortization | (131) | (111) |
Net Intangibles | $ 75 | 93 |
Finite-Lived Intangible Asset, Useful Life | 14 years | |
Trademarks | ||
Goodwill and Other Intangible Assets | ||
Carrying Amount | $ 143 | 148 |
Accumulated Amortization | (63) | (52) |
Net Intangibles | $ 80 | 96 |
Finite-Lived Intangible Asset, Useful Life | 13 years | |
Internally Developed Network Software | ||
Goodwill and Other Intangible Assets | ||
Carrying Amount | $ 500 | 428 |
Accumulated Amortization | (265) | (206) |
Net Intangibles | $ 235 | 222 |
Finite-Lived Intangible Asset, Useful Life | 5 years | |
Other | ||
Goodwill and Other Intangible Assets | ||
Carrying Amount | $ 21 | 20 |
Accumulated Amortization | (18) | (16) |
Net Intangibles | $ 3 | $ 4 |
Finite-Lived Intangible Asset, Useful Life | 4 years |
Goodwill and Other Intangible_6
Goodwill and Other Intangible Assets (Estimated Amortization Expense) (Details) $ in Millions | Dec. 31, 2020USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2019 | $ 128 |
2020 | 121 |
2021 | 115 |
2022 | 105 |
2023 | $ 102 |
Accrued and Other Current Lia_3
Accrued and Other Current Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Accrued and Other Current Liabilities | ||
Compensation and other employee-benefits | $ 258 | $ 199 |
Customer-related liabilities | 186 | 153 |
Accrued taxes | 103 | 79 |
Lease liabilities | 63 | 61 |
Accrued warranty costs | 54 | 36 |
Other accrued liabilities | 123 | 100 |
Total accrued and other current liabilities | $ 787 | $ 628 |
Credit Facilities and Long-Te_3
Credit Facilities and Long-Term Debt (Summary of Debt Outstanding) (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Jun. 26, 2020 | Dec. 31, 2019 | Oct. 11, 2016 | Sep. 20, 2011 |
Credit Facilities and Long-Term Debt : | |||||
Debt issuance costs and unamortized discount | $ (28) | $ (17) | |||
Total debt | 3,084 | 2,316 | |||
Less: short-term borrowings and current maturities of long-term debt | 600 | 276 | |||
Long-term debt, net | $ 2,484 | 2,040 | |||
4.875% Senior Notes Due 2021 | |||||
Credit Facilities and Long-Term Debt : | |||||
Interest rate | 4.875% | 4.875% | |||
Outstanding balances | $ 600 | 600 | |||
2.250% Senior Notes Due 2023 | |||||
Credit Facilities and Long-Term Debt : | |||||
Interest rate | 2.25% | ||||
Outstanding balances | $ 612 | 557 | |||
Debt fair value | $ 640 | 591 | |||
3.250% Senior Notes Due 2026 | |||||
Credit Facilities and Long-Term Debt : | |||||
Interest rate | 3.25% | 3.25% | |||
Outstanding balances | $ 500 | 500 | |||
Debt fair value | $ 563 | 518 | |||
Senior Notes Due Twenty Twenty Eight | |||||
Credit Facilities and Long-Term Debt : | |||||
Interest rate | 1.95% | 1.95% | |||
Outstanding balances | $ 500 | 0 | |||
Senior Notes Due Twenty Thirty One | |||||
Credit Facilities and Long-Term Debt : | |||||
Interest rate | 2.25% | 2.25% | |||
Outstanding balances | $ 500 | 0 | |||
4.375% Senior Notes Due 2046 | |||||
Credit Facilities and Long-Term Debt : | |||||
Interest rate | 4.375% | 4.375% | |||
Outstanding balances | $ 400 | 400 | |||
Debt fair value | 496 | 431 | |||
Commercial paper | |||||
Credit Facilities and Long-Term Debt : | |||||
Outstanding balances | 0 | 276 | |||
Level 1 | 4.875% Senior Notes Due 2021 | |||||
Credit Facilities and Long-Term Debt : | |||||
Debt fair value | 620 | $ 629 | |||
Level 1 | Senior Notes Due Twenty Twenty Eight | |||||
Credit Facilities and Long-Term Debt : | |||||
Debt fair value | 529 | ||||
Level 1 | Senior Notes Due Twenty Thirty One | |||||
Credit Facilities and Long-Term Debt : | |||||
Debt fair value | $ 527 |
Credit Facilities and Long-Te_4
Credit Facilities and Long-Term Debt (Details Textual) | Mar. 05, 2019USD ($) | Sep. 20, 2011USD ($) | Dec. 31, 2020USD ($) | Jun. 26, 2020USD ($) | Dec. 31, 2019USD ($) | Jun. 03, 2019USD ($) | Jun. 03, 2019EUR (€) | Oct. 11, 2016USD ($) | Mar. 11, 2016EUR (€) |
Debt Instrument | |||||||||
Senior notes issued | $ 500,000,000 | ||||||||
Senior Notes | |||||||||
Debt Instrument | |||||||||
Redemption price percentage | 101.00% | ||||||||
Commercial paper | |||||||||
Debt Instrument | |||||||||
Outstanding balances | $ 0 | $ 276,000,000 | |||||||
3.250% Senior Notes Due 2026 | |||||||||
Debt Instrument | |||||||||
Fair value of senior notes due | $ 563,000,000 | 518,000,000 | |||||||
Interest on notes due | 3.25% | 3.25% | |||||||
Senior notes issued | $ 500,000,000 | ||||||||
Outstanding balances | $ 500,000,000 | 500,000,000 | |||||||
4.875% Senior Notes Due 2021 | |||||||||
Debt Instrument | |||||||||
Interest on notes due | 4.875% | 4.875% | |||||||
Senior notes issued | $ 600,000,000 | ||||||||
Outstanding balances | $ 600,000,000 | 600,000,000 | |||||||
2.250% Senior Notes Due 2023 | |||||||||
Debt Instrument | |||||||||
Fair value of senior notes due | $ 640,000,000 | 591,000,000 | |||||||
Interest on notes due | 2.25% | ||||||||
Outstanding balances | $ 612,000,000 | 557,000,000 | |||||||
2.250% Senior Notes Due 2023 | Senior Notes | |||||||||
Debt Instrument | |||||||||
Interest on notes due | 2.25% | ||||||||
Senior notes issued | € | € 500,000,000 | ||||||||
4.375% Senior Notes Due 2046 | |||||||||
Debt Instrument | |||||||||
Fair value of senior notes due | $ 496,000,000 | 431,000,000 | |||||||
Interest on notes due | 4.375% | 4.375% | |||||||
Senior notes issued | $ 400,000,000 | ||||||||
Outstanding balances | $ 400,000,000 | 400,000,000 | |||||||
Five Year Revolving Credit Facility 2019 [Member] | Revolving Credit Facility | |||||||||
Debt Instrument | |||||||||
Increase in borrowing capacity | $ 200,000,000 | ||||||||
Maximum increase in borrowing capacity | $ 1,000,000,000 | ||||||||
Term of debt | 5 years | ||||||||
Debt instrument aggregate principal amount | $ 800,000,000 | ||||||||
US Dollar Commercial Paper Program [Member] | |||||||||
Debt Instrument | |||||||||
Senior notes issued | 600,000,000 | ||||||||
Euro Commercial Paper Program [Member] | |||||||||
Debt Instrument | |||||||||
Senior notes issued | $ 612,000,000 | € 500,000,000 | |||||||
Commercial paper | $ 0 | $ 276,000,000 | |||||||
Senior Notes Due Twenty Twenty Eight | |||||||||
Debt Instrument | |||||||||
Interest on notes due | 1.95% | 1.95% | |||||||
Outstanding balances | $ 500,000,000 | 0 | |||||||
Senior Notes Due Twenty Thirty One | |||||||||
Debt Instrument | |||||||||
Interest on notes due | 2.25% | 2.25% | |||||||
Outstanding balances | $ 500,000,000 | 0 | |||||||
Level 2 | 4.875% Senior Notes Due 2021 | |||||||||
Debt Instrument | |||||||||
Fair value of senior notes due | 620,000,000 | $ 629,000,000 | |||||||
Level 2 | Senior Notes Due Twenty Twenty Eight | |||||||||
Debt Instrument | |||||||||
Fair value of senior notes due | 529,000,000 | ||||||||
Level 2 | Senior Notes Due Twenty Thirty One | |||||||||
Debt Instrument | |||||||||
Fair value of senior notes due | $ 527,000,000 |
Derivative Financial Instrume_3
Derivative Financial Instruments (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Derivative [Line Items] | |||||||||||
Amount of (gain) loss reclassified from OCI into revenue | $ (1,373) | $ (1,220) | $ (1,160) | $ (1,123) | $ (1,371) | $ (1,296) | $ (1,345) | $ (1,237) | $ (4,876) | $ (5,249) | $ (5,207) |
Other Comprehensive Income (Loss) | Foreign Exchange Contract | |||||||||||
Derivative [Line Items] | |||||||||||
Amount of gain (loss) recognized in OCI | 9 | (14) | (8) | ||||||||
Other Comprehensive Income (Loss) | Cross Currency Swaps | |||||||||||
Derivative [Line Items] | |||||||||||
Amount of gain (loss) recognized in OCI | (103) | 22 | 22 | ||||||||
Other Comprehensive Income (Loss) | Foreign Currency Denominated Debt | |||||||||||
Derivative [Line Items] | |||||||||||
Amount of gain (loss) recognized in OCI | (55) | 13 | 27 | ||||||||
Reclassification out of Accumulated Other Comprehensive Income [Member] | Foreign Exchange Contract | |||||||||||
Derivative [Line Items] | |||||||||||
Amount of (gain) loss reclassified from OCI into revenue | (4) | 7 | 0 | ||||||||
Amount of (gain) loss reclassified from OCI into cost of revenue | 1 | 5 | 4 | ||||||||
Interest Expense | Cross Currency Swaps | |||||||||||
Derivative [Line Items] | |||||||||||
Amount of gain (loss) recognized in OCI | $ 19 | $ 16 | $ 2 |
Derivative Financial Instrume_4
Derivative Financial Instruments (Details Textual) | Dec. 31, 2020USD ($) | Jun. 26, 2020USD ($) | Dec. 31, 2019USD ($) | Mar. 11, 2016EUR (€) |
Derivative [Line Items] | ||||
Net unrealized gains on cash flow hedges | $ 3,000,000 | |||
Face amount | $ 500,000,000 | |||
Foreign Exchange Contract | ||||
Derivative [Line Items] | ||||
Notional amount | 0 | $ 0 | ||
Cross Currency Swap | ||||
Derivative [Line Items] | ||||
Notional amount | $ 1,249,000,000 | 714,000,000 | ||
Senior Notes Due 2023 | ||||
Derivative [Line Items] | ||||
Interest rate | 2.25% | |||
Debt fair value | $ 640,000,000 | 591,000,000 | ||
Senior Notes Due 2023 | Senior Notes | ||||
Derivative [Line Items] | ||||
Interest rate | 2.25% | |||
Face amount | € | € 500,000,000 | |||
Designated as Hedging Instrument | Long-term Debt | ||||
Derivative [Line Items] | ||||
Derivative, fair value | $ 610,000,000 | $ 554,000,000 |
Derivative Financial Instrume_5
Derivative Financial Instruments - Fair Value of Foreign Exchange Contracts (Details) - Designated as Hedging Instrument - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Other Noncurrent Assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Assets | $ 0 | $ 4 |
Other non-current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Liabilities | $ (117) | $ (24) |
Postretirement Benefit Plans (S
Postretirement Benefit Plans (Summary of Contributions by Year) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Retirement Benefits [Abstract] | |||
Defined Contribution | $ 56 | $ 49 | $ 39 |
Postretirement Benefit Plans _2
Postretirement Benefit Plans (Summary of Plan Assets, Benefit Obligation and Funded Status) (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | $ 691 | $ 605 | |
Projected benefit obligation | (1,199) | (1,008) | |
Unfunded status of the plans | (508) | (403) | |
Amounts recognized in the balance sheet | |||
Other non-current assets | 27 | 58 | |
Accrued and other current liabilities | (16) | (16) | |
Accrued post-retirement benefits | (519) | (445) | |
Net amount recognized | (508) | (403) | |
Accumulated other comprehensive income: | |||
Net actuarial losses | (427) | (349) | |
Prior service credit | 6 | 4 | |
Total | (421) | (345) | |
Pension | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 691 | 605 | |
Projected benefit obligation | (1,155) | (959) | |
Unfunded status of the plans | (464) | (354) | |
Amounts recognized in the balance sheet | |||
Other non-current assets | 27 | 58 | |
Accrued and other current liabilities | (13) | (13) | |
Accrued post-retirement benefits | (478) | (399) | |
Net amount recognized | (464) | (354) | |
Accumulated other comprehensive income: | |||
Net actuarial losses | (409) | (330) | |
Prior service credit | (3) | (3) | |
Total | (412) | (333) | |
Other Benefits | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 0 | 0 | |
Projected benefit obligation | (44) | (49) | $ (52) |
Unfunded status of the plans | (44) | (49) | |
Amounts recognized in the balance sheet | |||
Other non-current assets | 0 | 0 | |
Accrued and other current liabilities | (3) | (3) | |
Accrued post-retirement benefits | (41) | (46) | |
Net amount recognized | (44) | (49) | |
Accumulated other comprehensive income: | |||
Net actuarial losses | (18) | (19) | |
Prior service credit | 9 | 7 | |
Total | (9) | (12) | |
Global stock funds/securities | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 118 | 103 | |
Diversified growth and income funds | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 26 | 9 | |
Corporate bonds | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 105 | 91 | |
Government bonds | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 47 | 62 | |
Hedging instruments | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 6 | 39 | |
Hedge funds | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 1 | 12 | |
Insurance contracts and other | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 384 | 16 | |
Level 1 | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 43 | 488 | |
Level 1 | Global stock funds/securities | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 38 | 90 | |
Level 1 | Corporate bonds | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 1 | 86 | |
Level 1 | Government bonds | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 0 | 35 | |
Level 1 | Hedging instruments | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 0 | 4 | |
Level 1 | Insurance contracts and other | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | |||
Level 2 | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 188 | 35 | |
Level 2 | Global stock funds/securities | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 66 | 0 | |
Level 2 | Corporate bonds | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 97 | 0 | |
Level 2 | Government bonds | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 19 | 0 | |
Level 2 | Hedging instruments | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 6 | 35 | |
Level 2 | Insurance contracts and other | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 0 | 0 | |
Level 3 | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 384 | 13 | |
Level 3 | Global stock funds/securities | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 0 | 0 | |
Level 3 | Corporate bonds | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 0 | 0 | |
Level 3 | Government bonds | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 0 | 0 | |
Level 3 | Insurance contracts and other | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 384 | 13 | |
NAV Practical Expedient | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 76 | 69 | |
NAV Practical Expedient | Global stock funds/securities | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 14 | 13 | |
NAV Practical Expedient | Diversified growth and income funds | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 26 | 9 | |
NAV Practical Expedient | Corporate bonds | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 7 | 5 | |
NAV Practical Expedient | Government bonds | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 28 | 27 | |
NAV Practical Expedient | Hedge funds | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | $ 1 | 12 | |
NAV Practical Expedient | Insurance contracts and other | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | $ 3 |
Postretirement Benefit Plans _3
Postretirement Benefit Plans (Summary of Amounts Recognized in Financial Statements) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Change in benefit obligation: | |||
Benefit obligation at beginning of year | $ 1,008 | ||
Benefit obligation at end of year | 1,199 | $ 1,008 | |
Change in plan assets: | |||
Beginning Balance | 605 | ||
Ending Balance | 691 | 605 | |
Unfunded status of the plans | (508) | (403) | |
United States | |||
Change in benefit obligation: | |||
Benefit obligation at beginning of year | 113 | 99 | |
Service cost | 3 | 3 | $ 3 |
Interest cost | 3 | 4 | 4 |
Benefits paid | (6) | (7) | |
Actuarial loss (gain) | 10 | 15 | |
Plan amendments, settlements and curtailments | 0 | 0 | |
Foreign currency translation/other | 0 | (1) | |
Benefit obligation at end of year | 123 | 113 | 99 |
Change in plan assets: | |||
Beginning Balance | 105 | 97 | |
Employer contributions | 0 | 0 | |
Actual return on plan assets | 14 | 17 | |
Benefits paid | (6) | (7) | |
Plan amendments, settlements and curtailments | 0 | 0 | |
Foreign currency translation/other | 0 | (2) | |
Ending Balance | 113 | 105 | 97 |
Unfunded status of the plans | (10) | (8) | |
International defined benefit pension plans | |||
Change in benefit obligation: | |||
Benefit obligation at beginning of year | 846 | 763 | |
Service cost | 13 | 9 | 9 |
Interest cost | 16 | 19 | 19 |
Benefits paid | (34) | (28) | |
Actuarial loss (gain) | 130 | 104 | |
Plan amendments, settlements and curtailments | (1) | (23) | |
Foreign currency translation/other | 62 | 2 | |
Benefit obligation at end of year | 1,032 | 846 | 763 |
Change in plan assets: | |||
Beginning Balance | 500 | 470 | |
Employer contributions | 24 | 16 | |
Actual return on plan assets | 70 | 52 | |
Benefits paid | (34) | (28) | |
Plan amendments, settlements and curtailments | (1) | (23) | |
Foreign currency translation/other | 19 | 13 | |
Ending Balance | 578 | 500 | $ 470 |
Unfunded status of the plans | $ (454) | $ (346) |
Postretirement Benefit Plans (R
Postretirement Benefit Plans (Rollforward of Obligation) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Change in benefit obligation: | |||
Benefit obligation at beginning of year | $ 1,008 | ||
Benefit obligation at end of year | 1,199 | $ 1,008 | |
Other postretirement benefit plans | |||
Change in benefit obligation: | |||
Benefit obligation at beginning of year | 49 | 52 | |
Service cost | 0 | ||
Interest cost | 2 | 2 | $ 2 |
Benefits paid | (3) | (3) | |
Actuarial gain/(loss) | 1 | (2) | |
Plan Amendment and other | (5) | 0 | |
Benefit obligation at end of year | $ 44 | $ 49 | $ 52 |
Postretirement Benefit Plans _4
Postretirement Benefit Plans (Summary of Status of Plans) (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Retirement Benefits [Abstract] | ||
Projected benefit obligation | $ 1,026 | $ 562 |
Accumulated benefit obligation | 983 | 526 |
Fair value of plan assets | $ 535 | $ 150 |
Postretirement Benefit Plans (C
Postretirement Benefit Plans (Components of Pension Plans) (Details) - USD ($) $ in Millions | Jul. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Other changes in plan assets and benefit obligations recognized in other comprehensive income | ||||
Net loss | $ 78 | $ 83 | $ 37 | |
Prior service cost | 5 | 0 | 0 | |
Settlement | 0 | (9) | (1) | |
Total recognized in comprehensive income | (2) | 0 | 0 | |
Defined benefit pension plans | ||||
Net periodic benefit cost: | ||||
Net periodic benefit cost | 31 | 19 | 5 | |
Other changes in plan assets and benefit obligations recognized in other comprehensive income | ||||
Change recognized in other comprehensive income | 79 | 69 | 12 | |
Total recognized in comprehensive income | 110 | 88 | 17 | |
United States | ||||
Net periodic benefit cost: | ||||
Service cost | 3 | 3 | 3 | |
Interest cost | 3 | 4 | 4 | |
Expected return on plan assets | (7) | (8) | (7) | |
Amortization of net actuarial loss | 3 | 1 | 2 | |
Net periodic benefit cost | 2 | 0 | 2 | |
Other changes in plan assets and benefit obligations recognized in other comprehensive income | ||||
Net loss | 3 | 6 | 1 | |
Amortization of net actuarial loss | (3) | (1) | (2) | |
Change recognized in other comprehensive income | 0 | 5 | (1) | |
International defined benefit pension plans | ||||
Net periodic benefit cost: | ||||
Service cost | 13 | 9 | 9 | |
Interest cost | 16 | 19 | 19 | |
Expected return on plan assets | (14) | (27) | (35) | |
Amortization of net actuarial loss | 14 | 9 | 9 | |
Settlement | 0 | 9 | 1 | |
Net periodic benefit cost | 29 | 19 | 3 | |
Other changes in plan assets and benefit obligations recognized in other comprehensive income | ||||
Net loss | 74 | 79 | 35 | |
Prior service cost | 0 | 0 | (3) | |
Amortization of net actuarial loss | (14) | (9) | (9) | |
Settlement | 0 | (9) | (1) | |
Foreign Exchange | 19 | 3 | (15) | |
Change recognized in other comprehensive income | $ 79 | $ 64 | $ 13 | |
International defined benefit pension plans | Defined benefit pension plans | ||||
Other changes in plan assets and benefit obligations recognized in other comprehensive income | ||||
Net loss | $ (11) |
Postretirement Benefit Plans (A
Postretirement Benefit Plans (Amounts Recognized in OCI) (Details) - Other Benefits - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Defined Benefit Plan Disclosure | |||
Service cost | $ 0 | ||
Interest cost | 2 | $ 2 | $ 2 |
Defined Benefit Plan, Amortization of Prior Service Cost (Credit) | 3 | 4 | 4 |
Amortization of net actuarial loss | 2 | 2 | 2 |
Net periodic benefit cost | $ 1 | $ 0 | $ 0 |
Postretirement Benefit Plans _5
Postretirement Benefit Plans (Components of Net Periodic Benefit Cost) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Defined Benefit Plan Disclosure | |||
Net loss | $ 78 | $ 83 | $ 37 |
Total recognized in comprehensive income | (2) | 0 | 0 |
Other Benefits | |||
Defined Benefit Plan Disclosure | |||
Net loss | 1 | (2) | 1 |
Defined Benefit Plan, Prior Service Credit | (5) | 0 | (3) |
Amortization of prior service credit | 3 | 4 | 4 |
Amortization of net actuarial loss | (2) | (2) | (2) |
Change recognized in other comprehensive loss | $ (3) | $ 0 | $ 0 |
Postretirement Benefit Plans (D
Postretirement Benefit Plans (Discount Rates) (Details) | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Net Periodic Benefit Cost Assumptions | |||||
Discount rate | 2.00% | 3.00% | |||
Expected long-term rate of return on plan assets | 1.00% | 3.46% | 7.09% | 7.34% | |
United States | |||||
Benefit Obligation Assumptions | |||||
Discount rate | 2.50% | 3.25% | 4.50% | ||
Net Periodic Benefit Cost Assumptions | |||||
Discount rate | 3.25% | 4.50% | 3.75% | ||
Expected long-term rate of return on plan assets | 6.50% | 7.75% | 8.00% | ||
International | |||||
Benefit Obligation Assumptions | |||||
Discount rate | 1.06% | 1.80% | 2.60% | ||
Rate of future compensation increase | 2.79% | 2.94% | 2.92% | ||
Net Periodic Benefit Cost Assumptions | |||||
Discount rate | 1.80% | 2.60% | 2.43% | ||
Expected long-term rate of return on plan assets | 2.82% | 6.96% | 7.23% | ||
Rate of future compensation increase | 2.94% | 2.92% | 2.93% |
Postretirement Benefit Plans (V
Postretirement Benefit Plans (Valuation Assumptions) (Details) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Retirement Benefits [Abstract] | ||||
Expected long-term rate of return on plan assets | 1.00% | 3.46% | 7.09% | 7.34% |
Actual rate of return (loss) on plan assets | 14.06% | 12.59% | (3.85%) |
Postretirement Benefit Plans _6
Postretirement Benefit Plans (Target Allocations) (Details) | Dec. 31, 2020 | Dec. 31, 2019 |
Equity securities | ||
Defined Benefit Plan Disclosure | ||
Actual allocation of plan assets | 20.80% | 18.60% |
Fixed income | ||
Defined Benefit Plan Disclosure | ||
Actual allocation of plan assets | 22.90% | 31.70% |
Hedge funds | ||
Defined Benefit Plan Disclosure | ||
Actual allocation of plan assets | 0.10% | 2.00% |
Private equity | ||
Defined Benefit Plan Disclosure | ||
Actual allocation of plan assets | 0.00% | 0.00% |
Cash and other | ||
Defined Benefit Plan Disclosure | ||
Actual allocation of plan assets | 56.20% | 47.70% |
Minimum | Equity securities | ||
Defined Benefit Plan Disclosure | ||
Target allocation percentages | 15.00% | |
Minimum | Fixed income | ||
Defined Benefit Plan Disclosure | ||
Target allocation percentages | 10.00% | |
Minimum | Hedge funds | ||
Defined Benefit Plan Disclosure | ||
Target allocation percentages | 0.00% | |
Minimum | Private equity | ||
Defined Benefit Plan Disclosure | ||
Target allocation percentages | 0.00% | |
Minimum | Cash and other | ||
Defined Benefit Plan Disclosure | ||
Target allocation percentages | 0.00% | |
Maximum | Equity securities | ||
Defined Benefit Plan Disclosure | ||
Target allocation percentages | 60.00% | |
Maximum | Fixed income | ||
Defined Benefit Plan Disclosure | ||
Target allocation percentages | 50.00% | |
Maximum | Hedge funds | ||
Defined Benefit Plan Disclosure | ||
Target allocation percentages | 25.00% | |
Maximum | Private equity | ||
Defined Benefit Plan Disclosure | ||
Target allocation percentages | 20.00% | |
Maximum | Cash and other | ||
Defined Benefit Plan Disclosure | ||
Target allocation percentages | 60.00% |
Postretirement Benefit Plans (F
Postretirement Benefit Plans (Fair Value of Plan Assets) (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Defined Benefit Plan Disclosure | ||
Fair value of plan assets | $ 691 | $ 605 |
Level 1 | ||
Defined Benefit Plan Disclosure | ||
Fair value of plan assets | 43 | 488 |
Level 2 | ||
Defined Benefit Plan Disclosure | ||
Fair value of plan assets | 188 | 35 |
Level 3 | ||
Defined Benefit Plan Disclosure | ||
Fair value of plan assets | 384 | 13 |
NAV Practical Expedient | ||
Defined Benefit Plan Disclosure | ||
Fair value of plan assets | 76 | 69 |
Global stock funds/securities | ||
Defined Benefit Plan Disclosure | ||
Fair value of plan assets | 118 | 103 |
Global stock funds/securities | Level 1 | ||
Defined Benefit Plan Disclosure | ||
Fair value of plan assets | 38 | 90 |
Global stock funds/securities | Level 2 | ||
Defined Benefit Plan Disclosure | ||
Fair value of plan assets | 66 | 0 |
Global stock funds/securities | Level 3 | ||
Defined Benefit Plan Disclosure | ||
Fair value of plan assets | 0 | 0 |
Global stock funds/securities | NAV Practical Expedient | ||
Defined Benefit Plan Disclosure | ||
Fair value of plan assets | 14 | 13 |
Diversified growth and income funds | ||
Defined Benefit Plan Disclosure | ||
Fair value of plan assets | $ 26 | $ 9 |
Defined Benefit Plan, Plan Assets, Fair Value by Hierarchy and NAV [Extensible List] | us-gaap:FairValueMeasuredAtNetAssetValuePerShareMember | us-gaap:FairValueMeasuredAtNetAssetValuePerShareMember |
Diversified growth and income funds | NAV Practical Expedient | ||
Defined Benefit Plan Disclosure | ||
Fair value of plan assets | $ 26 | $ 9 |
Corporate bonds | ||
Defined Benefit Plan Disclosure | ||
Fair value of plan assets | 105 | 91 |
Corporate bonds | Level 1 | ||
Defined Benefit Plan Disclosure | ||
Fair value of plan assets | 1 | 86 |
Corporate bonds | Level 2 | ||
Defined Benefit Plan Disclosure | ||
Fair value of plan assets | 97 | 0 |
Corporate bonds | Level 3 | ||
Defined Benefit Plan Disclosure | ||
Fair value of plan assets | 0 | 0 |
Corporate bonds | NAV Practical Expedient | ||
Defined Benefit Plan Disclosure | ||
Fair value of plan assets | 7 | 5 |
Government bonds | ||
Defined Benefit Plan Disclosure | ||
Fair value of plan assets | 47 | 62 |
Government bonds | Level 1 | ||
Defined Benefit Plan Disclosure | ||
Fair value of plan assets | 0 | 35 |
Government bonds | Level 2 | ||
Defined Benefit Plan Disclosure | ||
Fair value of plan assets | 19 | 0 |
Government bonds | Level 3 | ||
Defined Benefit Plan Disclosure | ||
Fair value of plan assets | 0 | 0 |
Government bonds | NAV Practical Expedient | ||
Defined Benefit Plan Disclosure | ||
Fair value of plan assets | 28 | 27 |
Hedging instruments | ||
Defined Benefit Plan Disclosure | ||
Fair value of plan assets | 6 | 39 |
Hedging instruments | Level 1 | ||
Defined Benefit Plan Disclosure | ||
Fair value of plan assets | 0 | 4 |
Hedging instruments | Level 2 | ||
Defined Benefit Plan Disclosure | ||
Fair value of plan assets | 6 | 35 |
Hedge funds | ||
Defined Benefit Plan Disclosure | ||
Fair value of plan assets | $ 1 | $ 12 |
Defined Benefit Plan, Plan Assets, Fair Value by Hierarchy and NAV [Extensible List] | us-gaap:FairValueMeasuredAtNetAssetValuePerShareMember | us-gaap:FairValueMeasuredAtNetAssetValuePerShareMember |
Hedge funds | NAV Practical Expedient | ||
Defined Benefit Plan Disclosure | ||
Fair value of plan assets | $ 1 | $ 12 |
Insurance contracts and other | ||
Defined Benefit Plan Disclosure | ||
Fair value of plan assets | 384 | 16 |
Insurance contracts and other | Level 1 | ||
Defined Benefit Plan Disclosure | ||
Fair value of plan assets | ||
Insurance contracts and other | Level 2 | ||
Defined Benefit Plan Disclosure | ||
Fair value of plan assets | 0 | 0 |
Insurance contracts and other | Level 3 | ||
Defined Benefit Plan Disclosure | ||
Fair value of plan assets | 384 | 13 |
Insurance contracts and other | NAV Practical Expedient | ||
Defined Benefit Plan Disclosure | ||
Fair value of plan assets | 3 | |
Cash and cash equivalents | ||
Defined Benefit Plan Disclosure | ||
Fair value of plan assets | 4 | 273 |
Cash and cash equivalents | Level 1 | ||
Defined Benefit Plan Disclosure | ||
Fair value of plan assets | 4 | 273 |
Cash and cash equivalents | Level 2 | ||
Defined Benefit Plan Disclosure | ||
Fair value of plan assets | 0 | 0 |
Cash and cash equivalents | Level 3 | ||
Defined Benefit Plan Disclosure | ||
Fair value of plan assets | $ 0 | $ 0 |
Postretirement Benefit Plans _7
Postretirement Benefit Plans (Rollforward of Fair Value Measurements) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ||
Beginning Balance | $ 605 | |
Ending Balance | 691 | $ 605 |
Level 3 | ||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ||
Beginning Balance | 13 | |
Ending Balance | 384 | 13 |
Hedge funds | ||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ||
Beginning Balance | 12 | |
Ending Balance | 1 | 12 |
Other | Level 3 | ||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ||
Beginning Balance | 13 | 12 |
Purchases, sales, settlements | 314 | 1 |
Actual return on plan assets | 44 | |
Impact on currency | 13 | 0 |
Ending Balance | $ 384 | $ 13 |
Postretirement Benefit Plans _8
Postretirement Benefit Plans (Future Benefit Payments) (Details) $ in Millions | Dec. 31, 2020USD ($) |
Pension | |
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block | |
2018 | $ 38 |
2019 | 39 |
2020 | 40 |
2021 | 40 |
2022 | 42 |
Years 2022-2026 | 220 |
Other Benefits | |
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block | |
2018 | 3 |
2019 | 3 |
2020 | 3 |
2021 | 3 |
2022 | 3 |
Years 2022-2026 | $ 12 |
Postretirement Benefit Plans _9
Postretirement Benefit Plans (Details Textual) - USD ($) shares in Thousands | Jan. 27, 2020 | Jul. 31, 2019 | Mar. 31, 2020 | Sep. 30, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block | ||||||||||
Number of years eligible employees can receive transition credits | 5 years | |||||||||
Number of shares held by employees in Employee Stock Ownership Plan | 267 | 302 | ||||||||
Charge resulting from curtailment or settlement recorded | $ 0 | $ 9,000,000 | $ 1,000,000 | |||||||
Prior service credit | (6,000,000) | (4,000,000) | ||||||||
Accumulated benefit obligation | $ 1,107,000,000 | 919,000,000 | ||||||||
Expected long-term return on plan assets | 3.24% | |||||||||
Estimated pension plan contributions during the next fiscal quarter | $ 6,000,000 | |||||||||
Payments for settlements | 5,000,000 | |||||||||
Net loss | $ (78,000,000) | $ (83,000,000) | $ (37,000,000) | |||||||
Expected long-term rate of return on plan assets | 1.00% | 3.46% | 7.09% | 7.34% | ||||||
Fair value of plan assets | $ 691,000,000 | $ 605,000,000 | ||||||||
Defined Benefit Plan, Plan Assets, Increase (Decrease) for Assets Transferred to (from) Plan | $ 336,000,000 | |||||||||
Defined Benefit Plan, Assumptions Used Calculating Net Periodic Benefit Cost, Change Due to Subsequent Interim Measurement, Weighted-Average Expected Long-term Rate of Return on Plan Assets | 0.70% | 7.25% | ||||||||
Discount rate | 2.00% | 3.00% | ||||||||
Defined Benefit Plan, Incremental Net Periodic Benefit Cost (Expense) | $ 5,000,000 | $ 3,000,000 | ||||||||
Pension | ||||||||||
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block | ||||||||||
Prior service credit | 3,000,000 | 3,000,000 | ||||||||
Employer Contribution to defined benefit Plan | 27,000,000 | |||||||||
Fair value of plan assets | 691,000,000 | 605,000,000 | ||||||||
Other Benefits | ||||||||||
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block | ||||||||||
Prior service credit | (9,000,000) | (7,000,000) | ||||||||
Net actuarial losses, before tax | (2,000,000) | (2,000,000) | $ (2,000,000) | |||||||
Prior service credit, before tax | (3,000,000) | (4,000,000) | (4,000,000) | |||||||
Employer Contribution to defined benefit Plan | 19,000,000 | |||||||||
Net loss | (1,000,000) | 2,000,000 | (1,000,000) | |||||||
Fair value of plan assets | $ 0 | 0 | ||||||||
Minimum | ||||||||||
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block | ||||||||||
Employer matching contribution | 3.00% | |||||||||
Estimated pension plan contributions during next fiscal year | $ 19,000,000 | |||||||||
Maximum | ||||||||||
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block | ||||||||||
Employer matching contribution | 7.00% | |||||||||
Estimated pension plan contributions during next fiscal year | $ 27,000,000 | |||||||||
Cash and cash equivalents | ||||||||||
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block | ||||||||||
Fair value of plan assets | 4,000,000 | 273,000,000 | ||||||||
Hedge funds | ||||||||||
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block | ||||||||||
Unfunded commitments | 0 | 0 | ||||||||
Fair value of plan assets | 1,000,000 | 12,000,000 | ||||||||
International defined benefit pension plans | ||||||||||
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block | ||||||||||
Charge resulting from curtailment or settlement recorded | 0 | 9,000,000 | 1,000,000 | |||||||
Net actuarial losses, before tax | (14,000,000) | (9,000,000) | (9,000,000) | |||||||
Employer Contribution to defined benefit Plan | 24,000,000 | 16,000,000 | ||||||||
Net loss | $ (74,000,000) | $ (79,000,000) | $ (35,000,000) | |||||||
Expected long-term rate of return on plan assets | 2.82% | 6.96% | 7.23% | |||||||
Discount rate | 2.60% | 1.06% | 1.80% | 2.60% | ||||||
Fair value of plan assets | $ 470,000,000 | $ 578,000,000 | $ 500,000,000 | $ 470,000,000 | ||||||
Discount rate | 1.80% | 2.60% | 2.43% | |||||||
International defined benefit pension plans | Pension | ||||||||||
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block | ||||||||||
Payments for settlements | $ 21,000,000 | |||||||||
Settlement charge released into other non-operating income (expense), net | $ 8,000,000 | |||||||||
Decrease from settlement | $ 37,000,000 | |||||||||
Remeasurement due to settlement | 26,000,000 | |||||||||
Net loss | $ 11,000,000 |
Share-Based Compensation Plan_2
Share-Based Compensation Plans (Stock Option Activity) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Stock Options Outstanding, Beginning | 2,040 | |
Stock options, Granted | 571 | |
Stock options, Exercised | (521) | |
Stock options, Forfeited | (129) | |
Stock Options Outstanding, Ending | 1,961 | 2,040 |
Options exercisable, Shares | 1,227 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | ||
Weighted Average Exercise Price, Outstanding, Beginning | $ 48.56 | |
Weighted Average Exercise Price / Share, Granted | 74.60 | |
Weighted Average Exercise Price / Share, Exercised | 39.42 | |
Weighted Average Exercise Price / Share, Forfeited | 77.52 | |
Weighted Average Exercise Price, Outstanding, Ending | 56.66 | $ 48.56 |
Options exercisable, Weighted Average Exercise Price | $ 46.29 | |
Weighted Average Remaining Contractual Term, Outstanding | 6 years 4 months 24 days | 6 years 3 months 18 days |
Aggregate intrinsic value of outstanding stock options | $ 89 | |
Weighed average remaining contractual term, Options exercisable | 4 years 10 months 24 days | |
Aggregate intrinsic value of exercisable stock options | $ 68 | |
Vested and non-vested expected to vest as of December 31, 2020 | 1,896 | |
Vested and non-vested expected to vest as of December 31, 2020 | $ 56.08 | |
Vested and non-vested expected to vest as of December 31, 2020 | 6 years 3 months 18 days | |
Aggregate intrinsic value, vested and expected to vest | $ 87 |
Share-Based Compensation Plan_3
Share-Based Compensation Plans (Fair Value Assumptions) (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Payment Arrangement [Abstract] | |||
Dividend yield | 1.42% | 1.30% | 1.12% |
Volatility | 24.16% | 24.10% | 23.41% |
Risk-free interest rate | 0.83% | 2.55% | 2.76% |
Expected term (in years) | 5 years 9 months 18 days | 5 years 4 months 24 days | 5 years 1 month 6 days |
Weighted-average fair value / share | $ 14.84 | $ 17.04 | $ 17.80 |
Share-Based Compensation Plan_4
Share-Based Compensation Plans (Restricted Stock Unit Activity) (Details) - Restricted Stock shares in Thousands | 12 Months Ended |
Dec. 31, 2020$ / sharesshares | |
Summary of restricted stock activity | |
Outstanding Shares, Beginning | shares | 512 |
Restricted Stock, Granted | shares | 340 |
Vested | shares | (252) |
Forfeited | shares | (63) |
Outstanding Shares, Ending | shares | 537 |
Weighted Average Grant Date Fair Value / Share | |
Weighted Average Grant Date Fair Value, Outstanding at January 1, 2016 | $ / shares | $ 68.95 |
Weighted Average Grant Date Fair Value, Granted | $ / shares | 75.58 |
Weighted Average Grant Date Fair Value, Vested | $ / shares | 63.91 |
Weighted Average Grant Date Fair Value, Forfeited | $ / shares | 76.23 |
Weighted Average Grant Date Fair Value, Outstanding at December 31, 2016 | $ / shares | $ 74.62 |
Share-Based Compensation Plan_5
Share-Based Compensation Plans (Performance Share Activity) (Details) - Performance Based Shares shares in Thousands | 12 Months Ended |
Dec. 31, 2020$ / sharesshares | |
Summary of Performance-based shares activity | |
Vested | shares | (89) |
Weighted Average Grant Date Fair Value / Share | |
Weighted Average Grant Date Fair Value, Vested | $ / shares | $ 49.15 |
ROIC Performance Share Unit Grants | |
Summary of Performance-based shares activity | |
Outstanding Shares, Beginning | shares | 225 |
Granted | shares | 82 |
Forfeited | shares | (36) |
Outstanding Shares, Ending | shares | 182 |
Weighted Average Grant Date Fair Value / Share | |
Weighted Average Grant Date Fair Value, Outstanding at January 1, 2016 | $ / shares | $ 64.51 |
Weighted Average Grant Date Fair Value, Granted | $ / shares | 78.90 |
Weighted Average Grant Date Fair Value, Forfeited | $ / shares | 76.67 |
Weighted Average Grant Date Fair Value, Outstanding at December 31, 2016 | $ / shares | $ 76.12 |
Share-based Compensation Arrangement By Share-based Payment Award, Equity Instruments Other Than Options, Adjustments In Period | shares | 0 |
Share-based Compensation Arrangement By Share-based Payment Award, Equity Instruments Other Than Options, Adjustments In Period, Weighted Average Grant Date Fair Value | $ / shares | $ 0 |
TSR Performance Share Unit Grants | |
Summary of Performance-based shares activity | |
Outstanding Shares, Beginning | shares | 225 |
Granted | shares | 82 |
Vested | shares | (124) |
Forfeited | shares | (36) |
Outstanding Shares, Ending | shares | 182 |
Weighted Average Grant Date Fair Value / Share | |
Weighted Average Grant Date Fair Value, Outstanding at January 1, 2016 | $ / shares | $ 75.80 |
Weighted Average Grant Date Fair Value, Granted | $ / shares | 102.05 |
Weighted Average Grant Date Fair Value, Vested | $ / shares | 47.81 |
Weighted Average Grant Date Fair Value, Forfeited | $ / shares | 92.03 |
Weighted Average Grant Date Fair Value, Outstanding at December 31, 2016 | $ / shares | $ 96.98 |
Share-based Compensation Arrangement By Share-based Payment Award, Equity Instruments Other Than Options, Adjustments In Period | shares | 35 |
Share-based Compensation Arrangement By Share-based Payment Award, Equity Instruments Other Than Options, Adjustments In Period, Weighted Average Grant Date Fair Value | $ / shares | $ 47.81 |
Share-Based Compensation Plan_6
Share-Based Compensation Plans (Details Textual) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Oct. 31, 2011 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation | $ 26 | $ 29 | $ 30 | |
Proceeds from exercise of employee stock options | 20 | $ 13 | $ 7 | |
Tax benefit from the exercise of stock options | $ 13 | |||
Shares awarded | 571 | |||
Shares outstanding | 1,961 | 2,040 | ||
Non-vested options outstanding | 700 | 600 | 700 | |
Weighted average grant date fair value | $ 74 | $ 69.30 | $ 58 | |
Aggregate intrinsic value of outstanding stock options | $ 89 | |||
Aggregate intrinsic value of exercisable stock options | 68 | |||
Total intrinsic value of options exercised | 20 | $ 15 | $ 9 | |
Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unamortized compensation expense | $ 7 | |||
Weighted average period | 1 year 10 months 24 days | |||
Restricted Stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unamortized compensation expense | $ 21 | |||
Weighted average period | 1 year 9 months 18 days | |||
Shares awarded | 340 | |||
Performance Based Shares | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unamortized compensation expense | $ 6 | |||
Weighted average period | 1 year 9 months 18 days | |||
Requisite service periods | 3 years | |||
Target payout percentage | 100.00% | |||
2011 Omnibus Incentive Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares initially available for awards | 18,000 | |||
Shares available for future grant | 5,000 |
Share-Based Compensation Plan_7
Share-Based Compensation Plans (TSR Fair Value Assumptions) (Details) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk-free interest rate | 0.83% | 2.55% | 2.76% |
Dividend yield | 1.42% | 1.30% | 1.12% |
TSR Performance Share Unit Grants | Performance Based Shares | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Volatility | 22.60% | ||
Risk-free interest rate | 1.08% |
Capital Stock (Details Textual)
Capital Stock (Details Textual) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Aug. 24, 2015 | |
Class of Stock [Line Items] | ||||
Common Stock, shares authorized | 750,000 | 750,000 | ||
Common Stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | ||
Dividends declared per share (in usd per share) | $ 1.04 | $ 0.96 | $ 0.84 | |
Shares repurchased | 772 | 536 | 810 | |
Shares repurchased, value | $ 61 | $ 40 | ||
2015 Stock Repurchase Program | ||||
Class of Stock [Line Items] | ||||
Authorized amount | $ 500 | |||
Shares repurchased | 700 | 300 | ||
Shares repurchased, value | $ 50 | $ 25 | ||
Remaining authorized repurchase amount | $ 288 | |||
Settlement of Employee Tax Withholding Obligations | ||||
Class of Stock [Line Items] | ||||
Shares repurchased | 100 | 200 | ||
Shares repurchased, value | $ 11 | $ 15 |
Capital Stock (Changes in Commo
Capital Stock (Changes in Common Stock Outstanding) (Details) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Changes in Common Stock Outstanding [Roll Forward] | |||
Beginning Balance, January 1 | 180,140 | 179,724 | 179,862 |
Stock incentive plan net activity | 986 | 952 | 672 |
Repurchase of common stock | (772) | (536) | (810) |
Ending Balance, December 31 | 180,354 | 180,140 | 179,724 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||
Beginning Balance | $ (375) | ||
Foreign currency translation adjustment | (23) | $ 28 | $ (85) |
Amortization of prior service credit cost | (3) | (4) | (4) |
Income tax expense on changes in post-retirement benefit plans | (19) | (3) | 15 |
Unrealized gain (loss) | 9 | (14) | (8) |
Reclassification of unrealized gain on derivative hedge agreements into revenue | (3) | 12 | 4 |
Ending Balance | (413) | (375) | |
Accumulated Other Comprehensive Income (Loss) | |||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||
Beginning Balance | (375) | (336) | (210) |
Foreign currency translation adjustment | (22) | 27 | (83) |
Income tax impact on foreign currency translation adjustment | 39 | 9 | (12) |
Amortization of prior service credit cost | (73) | (83) | (36) |
Settlement charge released into other non-operating income (expense), net | 9 | ||
Income tax expense on changes in postretirement benefit plans | 15 | ||
Income tax expense on changes in post-retirement benefit plans | (19) | (3) | 5 |
Income tax expense on changes in post-retirement benefit plans | 18 | 16 | |
Income tax impact on amortization of postretirement benefit plan items | (3) | (2) | (3) |
Unrealized gain (loss) | (8) | ||
Ending Balance | (413) | (375) | (336) |
Accumulated Other Comprehensive Income (Loss) | Cumulative Effect, Period of Adoption, Adjustment | |||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||
Beginning Balance | (17) | ||
Foreign Currency Translation | |||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||
Beginning Balance | (103) | (121) | (15) |
Foreign currency translation adjustment | (22) | 27 | (83) |
Income tax impact on foreign currency translation adjustment | 39 | 9 | (12) |
Ending Balance | (86) | (103) | (121) |
Foreign Currency Translation | Cumulative Effect, Period of Adoption, Adjustment | |||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||
Beginning Balance | (11) | ||
Postretirement Benefit Plans | |||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||
Beginning Balance | (269) | (214) | (198) |
Amortization of prior service credit cost | (73) | (83) | (36) |
Settlement charge released into other non-operating income (expense), net | 9 | ||
Income tax expense on changes in postretirement benefit plans | 15 | ||
Income tax expense on changes in post-retirement benefit plans | (19) | (3) | 5 |
Income tax expense on changes in post-retirement benefit plans | 18 | 16 | |
Income tax impact on amortization of postretirement benefit plan items | (3) | (2) | (3) |
Ending Balance | (330) | (269) | (214) |
Postretirement Benefit Plans | Cumulative Effect, Period of Adoption, Adjustment | |||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||
Beginning Balance | (6) | ||
Derivative Instruments | |||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||
Beginning Balance | (3) | (1) | 3 |
Unrealized gain (loss) | 9 | (14) | (8) |
Ending Balance | 3 | (3) | (1) |
Nonoperating Income (Expense) | Accumulated Other Comprehensive Income (Loss) | |||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||
Income tax impact on amortization of postretirement benefit plan items | 16 | 8 | 9 |
Nonoperating Income (Expense) | Postretirement Benefit Plans | |||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||
Income tax impact on amortization of postretirement benefit plan items | 16 | 8 | 9 |
Cost of Revenue | Accumulated Other Comprehensive Income (Loss) | |||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||
Unrealized gain (loss) | 4 | ||
Reclassification of unrealized gain on derivative hedge agreements into revenue | 1 | 5 | |
Cost of Revenue | Derivative Instruments | |||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||
Unrealized gain (loss) | $ 4 | ||
Reclassification of unrealized gain on derivative hedge agreements into revenue | 1 | 5 | |
Revenue | Accumulated Other Comprehensive Income (Loss) | |||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||
Reclassification of unrealized gain on derivative hedge agreements into revenue | (4) | 7 | |
Revenue | Derivative Instruments | |||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||
Reclassification of unrealized gain on derivative hedge agreements into revenue | $ (4) | 7 | |
Cross Currency Swaps | Foreign Currency Translation | |||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||
Reclassification of unrealized gain on derivative hedge agreements into revenue |
Commitments and Contingencies_2
Commitments and Contingencies (Rent Expense) (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |
Rent expense | $ 81 |
Commitments and Contingencies_3
Commitments and Contingencies (Rollforward of Warranties) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Warranties | |||
Warranty accrual – January 1 | $ 41 | $ 60 | $ 82 |
Net charges for product warranties in the period | 57 | 25 | 20 |
Settlement of warranty claims | (34) | (42) | (42) |
Foreign currency and other | 1 | (2) | 0 |
Warranty accrual – December 31 | $ 65 | $ 41 | $ 60 |
Commitments and Contingencies_4
Commitments and Contingencies (Details Textual) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |||
Loss contingency accrued | $ 6 | $ 5 | |
Guarantee amounts | 378 | 340 | |
Estimated environmental matters | 3 | 3 | |
Warranty expense | $ 57 | $ 25 | $ 20 |
Related Party Transactions (Det
Related Party Transactions (Details) - Affiliated Entity - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Related Party Transaction [Line Items] | |||
Sales to unconsolidated affiliates | $ 10 | $ 10 | $ 10 |
Purchases from unconsolidated affiliates | $ 16 | $ 22 | $ 22 |
Segment and Geographic Data (Su
Segment and Geographic Data (Summary of Operating Results by Segment) (Details) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020USD ($) | Sep. 30, 2020USD ($) | Jun. 30, 2020USD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2020USD ($)Segment | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | |
Segment Reporting Information [Line Items] | |||||||||||
Number of Reportable Segments | Segment | 3 | ||||||||||
Financial information for each reportable segment | |||||||||||
Revenue | $ 1,373 | $ 1,220 | $ 1,160 | $ 1,123 | $ 1,371 | $ 1,296 | $ 1,345 | $ 1,237 | $ 4,876 | $ 5,249 | $ 5,207 |
Operating income | $ 179 | $ 73 | $ 54 | $ 61 | $ 195 | $ 11 | $ 171 | $ 109 | 367 | 486 | 654 |
Other non-operating (expense) income, net | (5) | (4) | 13 | ||||||||
Gain on sale of businesses | 0 | 1 | 0 | ||||||||
Interest Expense | 77 | 67 | 82 | ||||||||
Income before taxes | 285 | 416 | 585 | ||||||||
Depreciation and amortization | 251 | 257 | 261 | ||||||||
Capital expenditures | 183 | 226 | 237 | ||||||||
Water Infrastructure | |||||||||||
Financial information for each reportable segment | |||||||||||
Revenue | 2,079 | 2,177 | 2,176 | ||||||||
Operating income | 318 | 365 | 359 | ||||||||
Depreciation and amortization | 57 | 61 | 66 | ||||||||
Capital expenditures | 48 | 79 | 84 | ||||||||
Applied Water | |||||||||||
Financial information for each reportable segment | |||||||||||
Revenue | 1,434 | 1,541 | 1,534 | ||||||||
Operating income | 205 | 241 | 236 | ||||||||
Depreciation and amortization | 24 | 24 | 22 | ||||||||
Capital expenditures | 18 | 19 | 28 | ||||||||
Measurement & Control Solutions | |||||||||||
Financial information for each reportable segment | |||||||||||
Revenue | 1,363 | 1,531 | 1,497 | ||||||||
Operating income | (106) | (67) | 118 | ||||||||
Depreciation and amortization | 142 | 144 | 144 | ||||||||
Capital expenditures | 90 | 100 | 101 | ||||||||
Regional Selling Locations | |||||||||||
Financial information for each reportable segment | |||||||||||
Depreciation and amortization | 20 | 18 | 20 | ||||||||
Capital expenditures | 22 | 19 | 16 | ||||||||
Corporate and other | |||||||||||
Financial information for each reportable segment | |||||||||||
Operating income | (50) | (53) | (59) | ||||||||
Depreciation and amortization | 8 | 10 | 9 | ||||||||
Capital expenditures | $ 5 | $ 9 | $ 8 |
Segment and Geographic Data (Re
Segment and Geographic Data (Revenue by Segment) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Revenue from External Customer [Line Items] | |||||||||||
Revenue | $ 1,373 | $ 1,220 | $ 1,160 | $ 1,123 | $ 1,371 | $ 1,296 | $ 1,345 | $ 1,237 | $ 4,876 | $ 5,249 | $ 5,207 |
Pumps, accessories, parts and service | |||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Revenue | 3,120 | 3,324 | 3,322 | ||||||||
Other | |||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Revenue | $ 1,756 | $ 1,925 | $ 1,885 |
Segment and Geographic Data (As
Segment and Geographic Data (Assets by Segment (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Total assets for each reportable segment | |||
Total assets | $ 8,750 | $ 7,710 | $ 7,222 |
Water Infrastructure | |||
Total assets for each reportable segment | |||
Total assets | 1,255 | 1,268 | 1,233 |
Applied Water | |||
Total assets for each reportable segment | |||
Total assets | 1,005 | 1,016 | 1,051 |
Measurement & Control Solutions | |||
Total assets for each reportable segment | |||
Total assets | 3,345 | 3,497 | 3,576 |
Regional Selling Locations | |||
Total assets for each reportable segment | |||
Total assets | 1,413 | 1,375 | 1,181 |
Corporate and other | |||
Total assets for each reportable segment | |||
Total assets | $ 1,732 | $ 554 | $ 181 |
Segment and Geographic Data (_2
Segment and Geographic Data (Summary of Revenue and Property, Plant and Equipment by Geographical Location) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenue | $ 1,373 | $ 1,220 | $ 1,160 | $ 1,123 | $ 1,371 | $ 1,296 | $ 1,345 | $ 1,237 | $ 4,876 | $ 5,249 | $ 5,207 |
Property, plant and equipment | 657 | 658 | 657 | 658 | 656 | ||||||
United States | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenue | 2,297 | 2,554 | 2,424 | ||||||||
Property, plant and equipment | 253 | 274 | 253 | 274 | 281 | ||||||
Europe | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenue | 1,407 | 1,380 | 1,449 | ||||||||
Property, plant and equipment | 277 | 249 | 277 | 249 | 250 | ||||||
Asia Pacific | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenue | 618 | 659 | 660 | ||||||||
Property, plant and equipment | 64 | 67 | 64 | 67 | 66 | ||||||
Other | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenue | 554 | 656 | 674 | ||||||||
Property, plant and equipment | $ 63 | $ 68 | $ 63 | $ 68 | $ 59 |
Valuation and Qualifying Acco_3
Valuation and Qualifying Accounts (Details) - Allowance for Doubtful Accounts - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at beginning of year | $ 25 | $ 25 | $ 25 |
Additions charged to expense | 25 | 3 | 5 |
Deductions/other | (12) | (3) | (5) |
Balance at end of year | $ 38 | $ 25 | $ 25 |
Quarterly Financial Data (Una_3
Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Revenue | $ 1,373 | $ 1,220 | $ 1,160 | $ 1,123 | $ 1,371 | $ 1,296 | $ 1,345 | $ 1,237 | $ 4,876 | $ 5,249 | $ 5,207 |
Gross Profit | 526 | 461 | 434 | 409 | 537 | 509 | 526 | 474 | 1,830 | 2,046 | 2,026 |
Operating income | 179 | 73 | 54 | 61 | 195 | 11 | 171 | 109 | 367 | 486 | 654 |
Net income | $ 148 | $ 37 | $ 31 | $ 38 | $ 118 | $ 65 | $ 139 | $ 79 | $ 254 | $ 401 | $ 549 |
Basic (in dollars per share) | $ 0.82 | $ 0.20 | $ 0.17 | $ 0.21 | $ 0.66 | $ 0.36 | $ 0.77 | $ 0.44 | $ 1.41 | $ 2.23 | $ 3.05 |
Diluted (in dollars per share) | $ 0.82 | $ 0.20 | $ 0.17 | $ 0.21 | $ 0.65 | $ 0.36 | $ 0.77 | $ 0.43 | $ 1.40 | $ 2.21 | $ 3.03 |
Goodwill, Impairment Loss | $ 58 | $ 148 | $ 58 | $ 148 | $ 0 |