Cover Page
Cover Page - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2023 | Feb. 23, 2024 | Jun. 30, 2023 | |
Entity Information [Line Items] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2023 | ||
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 | 301 Water Street SE | ||
Entity Address, City or Town | Washington | ||
Entity Address, State or Province | DC | ||
Entity Address, Postal Zip Code | 20003 | ||
City Area Code | 202 | ||
Local Phone Number | 869-9150 | ||
Title of 12(b) Security | Common Stock, par value $0.01 per share | ||
Trading Symbol | XYL | ||
Security Exchange Name | NYSE | ||
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 | $ 26.9 | ||
Entity Common Stock, Shares Outstanding | 241,770,413 | ||
Documents Incorporated by Reference | Portions of the registrant’s definitive proxy statement for its 2024 Annual Meeting of Shareowners, to be held in May 2024, 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 | 2023 | ||
Document Fiscal Period Focus | FY | ||
Document Financial Statement Error Correction [Flag] | false |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2023 | |
Audit Information [Abstract] | |
Auditor Name | Deloitte & Touche LLP |
Auditor Location | Stamford, Connecticut |
Auditor Firm ID | 34 |
Consolidated Income Statements
Consolidated Income Statements - USD ($) shares in Thousands, $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Revenue | $ 7,364 | $ 5,522 | $ 5,195 |
Cost of revenue | 4,647 | 3,438 | 3,220 |
Gross profit | 2,717 | 2,084 | 1,975 |
Selling, general and administrative expenses | 1,757 | 1,227 | 1,179 |
Research and development expenses | 232 | 206 | 204 |
Restructuring and asset impairment charges | 76 | 29 | 7 |
Operating income | 652 | 622 | 585 |
Interest expense | 49 | 50 | 76 |
U.K. pension settlement expense | 0 | (140) | 0 |
Other non-operating income, net | 33 | 7 | 0 |
(Loss) Gain on sale of businesses | (1) | 1 | 2 |
Income before taxes | 635 | 440 | 511 |
Income tax expense | 26 | 85 | 84 |
Net income | $ 609 | $ 355 | $ 427 |
Earnings per share: | |||
Basic (in dollars per share) | $ 2.81 | $ 1.97 | $ 2.37 |
Diluted (in dollars per share) | $ 2.79 | $ 1.96 | $ 2.35 |
Basic (in shares) | 217,012 | 180,217 | 180,247 |
Weighted average common shares outstanding — Diluted | 218,180 | 180,979 | 181,526 |
Dividends declared per share (in usd per share) | $ 1.32 | $ 1.20 | $ 1.12 |
Product | |||
Revenue | $ 6,291 | $ 4,978 | $ 4,684 |
Cost of revenue | 3,817 | 3,002 | 2,831 |
Service | |||
Revenue | 1,073 | 544 | 511 |
Cost of revenue | $ 830 | $ 436 | $ 389 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 609 | $ 355 | $ 427 |
Other comprehensive income (loss), before tax: | |||
Foreign currency translation adjustment | (45) | (53) | 20 |
Net change in derivative hedge agreements: | |||
Unrealized gain (loss) | (2) | (24) | (10) |
Amount of (gain) loss reclassified into net income | 7 | 21 | 4 |
Net change in post-retirement benefit plans: | |||
Net gain (loss) | (35) | 101 | 51 |
Amortization of prior service credit | (2) | (2) | (3) |
Amortization of net actuarial (gain) loss into net income | (2) | 12 | 23 |
U.K. pension settlement | 0 | 137 | 0 |
Foreign currency translation adjustment | (2) | 39 | 11 |
Other comprehensive income (loss), before tax | (81) | 231 | 96 |
Income tax (benefit) expense related to other comprehensive loss | (38) | 86 | 54 |
Other comprehensive income (loss), net of tax | (43) | 145 | 42 |
Comprehensive income | $ 566 | $ 500 | $ 469 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 1,019 | $ 944 |
Receivables, less allowances for discounts, returns and credit losses of $56 and $50 in 2023 and 2022, respectively | 1,617 | 1,096 |
Inventories | 1,018 | 799 |
Prepaid and other current assets | 230 | 173 |
Total current assets | 3,884 | 3,012 |
Property, plant and equipment, net | 1,169 | 630 |
Goodwill | 7,587 | 2,719 |
Other intangible assets, net | 2,529 | 930 |
Other non-current assets | 943 | 661 |
Total assets | 16,112 | 7,952 |
Current liabilities: | ||
Accounts payable | 968 | 723 |
Accrued and other current liabilities | 1,221 | 867 |
Short-term borrowings and current maturities of long-term debt | 16 | 0 |
Total current liabilities | 2,205 | 1,590 |
Long-term debt, net | 2,268 | 1,880 |
Accrued post-retirement benefit obligations | 344 | 286 |
Deferred income tax liabilities | 557 | 222 |
Other non-current accrued liabilities | 562 | 471 |
Total liabilities | 5,936 | 4,449 |
Commitment and Contingencies (Note 19) | ||
Common stock — par value $0.01 per share: | ||
Authorized 750.0 shares, issued 257.6 and 196.0 shares in 2023 and 2022, respectively | 3 | 2 |
Capital in excess of par value | 8,564 | 2,134 |
Retained earnings | 2,601 | 2,292 |
Treasury stock – at cost 16.0 shares and 15.8 shares in 2023 and 2022, respectively | (733) | (708) |
Accumulated other comprehensive loss | (269) | (226) |
Total stockholders’ equity | 10,166 | 3,494 |
Non-controlling interest | 10 | 9 |
Total equity | 10,176 | 3,503 |
Total liabilities and stockholders’ equity | $ 16,112 | $ 7,952 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Millions, $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Allowances for discounts, returns and credit losses | $ 56 | $ 50 |
Common Stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common Stock, shares authorized | 750 | 750 |
Common Stock, shares issued | 257.6 | 196 |
Treasury Stock, shares | 16 | 15.8 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Operating Activities | |||
Net income | $ 609 | $ 355 | $ 427 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation | 193 | 111 | 118 |
Amortization | 243 | 125 | 127 |
Deferred income taxes | (79) | (64) | 10 |
Share-based compensation | 60 | 37 | 33 |
Restructuring and asset impairment charges | 76 | 29 | 7 |
U.K. pension settlement expense | 0 | 140 | 0 |
Loss (gain) from sale of businesses | 1 | (1) | (2) |
Other, net | 0 | (4) | 8 |
Payments for restructuring | (30) | (11) | (25) |
Contributions to post-retirement benefit plans | (25) | (19) | (29) |
Changes in assets and liabilities (net of acquisitions): | |||
Changes in receivables | (87) | (192) | (70) |
Changes in inventories | 41 | (147) | (167) |
Changes in accounts payable | 22 | 117 | 81 |
Changes in accrued liabilities | (4) | 57 | 7 |
Changes in accrued and deferred taxes | (109) | 57 | (9) |
Net changes in other assets and liabilities | (74) | 6 | 22 |
Net Cash — Operating activities | 837 | 596 | 538 |
Investing Activities | |||
Capital expenditures | (271) | (208) | (208) |
Proceeds from the sale of property, plant and equipment | 1 | 4 | 3 |
Acquisitions of businesses, net of cash acquired | (476) | 0 | 0 |
Proceeds from sale of businesses | 105 | 1 | 10 |
Cash received from investments | 1 | 5 | 0 |
Cash paid for investments | (1) | (11) | 0 |
Cash paid for equity investments | (57) | (3) | (5) |
Cash received from interest rate swaps | 38 | 0 | 0 |
Cash received from cross-currency swaps | 28 | 28 | 14 |
Settlement of currency forward agreement | 0 | (10) | 0 |
Other, net | 4 | 3 | 3 |
Net Cash — Investing activities | (628) | (191) | (183) |
Financing Activities | |||
Long-term debt issued, net | 278 | 0 | 0 |
Long-term debt repaid, net | (160) | (527) | (600) |
Repurchase of common stock | (25) | (52) | (68) |
Proceeds from exercise of employee stock options | 62 | 8 | 19 |
Dividends paid | (299) | (217) | (203) |
Other, net | (13) | (2) | (3) |
Net Cash — Financing activities | (157) | (790) | (855) |
Effect of exchange rate changes on cash | 23 | (20) | (26) |
Net change in cash and cash equivalents | 75 | (405) | (526) |
Cash and cash equivalents at beginning of year | 944 | 1,349 | 1,875 |
Cash and cash equivalents at end of year | 1,019 | 944 | 1,349 |
Cash paid during the year for: | |||
Interest | 69 | 76 | 99 |
Income taxes (net of refunds received) | $ 211 | $ 91 | $ 83 |
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 Earnings Cumulative Effect, Period of Adoption, Adjustment | Accumulated Other Comprehensive Income (Loss) | Treasury Stock, Common | Non-Controlling Interest |
Balance at Dec. 31, 2020 | $ 2,976 | $ 2 | $ 2,037 | $ 1,930 | $ (413) | $ (588) | $ 8 | ||
Stockholders' Equity [Roll Forward] | |||||||||
Net income | 427 | 427 | |||||||
Other comprehensive income, net | 42 | 42 | |||||||
Dividends declared | (203) | (203) | |||||||
Stock incentive plan activity | 44 | 52 | (8) | ||||||
Repurchase of common stock | (60) | (60) | |||||||
Balance at Dec. 31, 2021 | 3,226 | $ 355 | 2 | 2,089 | 2,154 | $ 355 | (371) | (656) | 8 |
Stockholders' Equity [Roll Forward] | |||||||||
Net income | 355 | ||||||||
Other comprehensive income, net | 145 | 145 | |||||||
Dividends declared | (217) | (217) | |||||||
Stock incentive plan activity | 39 | 45 | (6) | ||||||
Repurchase of common stock | (46) | (46) | |||||||
Balance at Dec. 31, 2022 | 3,503 | 2 | 2,134 | 2,292 | (226) | (708) | 9 | ||
Stockholders' Equity [Roll Forward] | |||||||||
Net income | 609 | 609 | |||||||
Other comprehensive income, net | (43) | (43) | |||||||
Other activity | (1) | (1) | |||||||
Dividends declared | (300) | (300) | |||||||
Stock incentive plan activity | 125 | 150 | (25) | ||||||
Repurchase of common stock | 0 | 0 | |||||||
Balance at Dec. 31, 2023 | $ 10,176 | $ 3 | $ 8,564 | $ 2,601 | $ (269) | $ (733) | $ 10 |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) - $ / shares | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Statement of Stockholders' Equity [Abstract] | |||
Cash dividends paid per share (in usd per share) | $ 1.32 | $ 1.20 | $ 1.12 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2023 | |
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 four segments, Water Infrastructure, Applied Water, Measurement and Control Solutions and Integrated Solutions and Services. See Note 21, "Segment and Geographic Data," for further segment background information. 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. Acquisition of Evoqua On May 24, 2023, Xylem completed the acquisition of Evoqua Water Technologies Corp. (“Evoqua”). Refer to Note 3, "Acquisitions and Divestitures," for additional information. 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. Certain prior year amounts have been conformed to the current year presentation. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Estimates are revised as additional information becomes available. Estimates and assumptions are used for, but not limited to, 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. 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. As a result of the Evoqua acquisition, we assessed our prior definition of service revenue and redefined service revenue for the combined company as revenue resulting from the satisfaction of performance obligations primarily related to outsourced water services, maintenance, repair, preventive and inspection services, software as a service ("SaaS") subscriptions, and spare parts sales related to these service offerings. 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 pattern of revenue recognition. 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 units and performance share units. Share-based awards issued to members of the Board of Directors include restricted stock units. Compensation costs resulting from share-based payment transactions are recognized primarily at fair value over the requisite service period (typically three years), on a straight-line basis, within selling, general and administrative expenses. The calculated compensation cost is adjusted based on an estimate of awards ultimately expected to vest. The fair value of a non-qualified stock option is determined on the date of grant using a binomial lattice pricing model incorporating multiple and variable assumptions over time, including assumptions such as employee exercise patterns, stock price volatility and changes in dividends. The fair value of restricted stock 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"), Revenue, and adjusted EBITDA performance share units at 100% target is determined using the closing price of our common stock on date of grant. 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 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 involve 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, acceleration of stock based compensation expense due to "double trigger" change in control provisions, 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. 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 the jurisdiction in which we operate and the period over which our deferred tax assets will be recoverable. If 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. 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. The determination of deferred taxes on this amount is not practicable. Tax benefits are recognized for an uncertain tax position when, based on the technical merits of the position 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 are primarily comprised of 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, 2023 and 2022 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 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 Consolidated Balance Sheets. 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. In addition to manufacturing and selling equipment, we also lease 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. Short term 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. The Company also generates revenue through the lease of its water treatment equipment and systems to customers within the Integrated Solutions and Services segment. In certain instances, the Company enters into a contract with a customer but must construct the underlying asset prior to its lease. At the time of contract inception, the Company determines if an arrangement is or contains a lease. These contracts generally contain both lease and non-lease components, including installation, maintenance, and monitoring services of the Company-owned equipment, in addition to sale of certain constructed assets. In situations where arrangements contain multiple elements, contract consideration is allocated based on relative standalone selling price. Lease components associated with underlying assets that have an alternative use are classified as operating leases with revenue recognized over time throughout the lease term. Lease components associated with underlying assets that have no alternative are classified as sales-type leases, with point in time revenue recognition at the on-set of the lease, or classified as financing transactions, with over time revenue recognition at the on-set of the construction of the underlying assets. In order for a component to be separate, the customer would be able to benefit from the right of use of the component separately or with other resources readily available to the customer and the right of the use is not highly dependent or highly interrelated with the other rights to use the other underlying assets or components. 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. 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. 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. 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 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 Consolidated Balance Sheets 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 design |
Recently Issued Accounting Pron
Recently Issued Accounting Pronouncements | 12 Months Ended |
Dec. 31, 2023 | |
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 four segments, Water Infrastructure, Applied Water, Measurement and Control Solutions and Integrated Solutions and Services. See Note 21, "Segment and Geographic Data," for further segment background information. 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. Acquisition of Evoqua On May 24, 2023, Xylem completed the acquisition of Evoqua Water Technologies Corp. (“Evoqua”). Refer to Note 3, "Acquisitions and Divestitures," for additional information. 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. Certain prior year amounts have been conformed to the current year presentation. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Estimates are revised as additional information becomes available. Estimates and assumptions are used for, but not limited to, 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. 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. As a result of the Evoqua acquisition, we assessed our prior definition of service revenue and redefined service revenue for the combined company as revenue resulting from the satisfaction of performance obligations primarily related to outsourced water services, maintenance, repair, preventive and inspection services, software as a service ("SaaS") subscriptions, and spare parts sales related to these service offerings. 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 pattern of revenue recognition. 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 units and performance share units. Share-based awards issued to members of the Board of Directors include restricted stock units. Compensation costs resulting from share-based payment transactions are recognized primarily at fair value over the requisite service period (typically three years), on a straight-line basis, within selling, general and administrative expenses. The calculated compensation cost is adjusted based on an estimate of awards ultimately expected to vest. The fair value of a non-qualified stock option is determined on the date of grant using a binomial lattice pricing model incorporating multiple and variable assumptions over time, including assumptions such as employee exercise patterns, stock price volatility and changes in dividends. The fair value of restricted stock 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"), Revenue, and adjusted EBITDA performance share units at 100% target is determined using the closing price of our common stock on date of grant. 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 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 involve 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, acceleration of stock based compensation expense due to "double trigger" change in control provisions, 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. 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 the jurisdiction in which we operate and the period over which our deferred tax assets will be recoverable. If 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. 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. The determination of deferred taxes on this amount is not practicable. Tax benefits are recognized for an uncertain tax position when, based on the technical merits of the position 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 are primarily comprised of 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, 2023 and 2022 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 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 Consolidated Balance Sheets. 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. In addition to manufacturing and selling equipment, we also lease 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. Short term 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. The Company also generates revenue through the lease of its water treatment equipment and systems to customers within the Integrated Solutions and Services segment. In certain instances, the Company enters into a contract with a customer but must construct the underlying asset prior to its lease. At the time of contract inception, the Company determines if an arrangement is or contains a lease. These contracts generally contain both lease and non-lease components, including installation, maintenance, and monitoring services of the Company-owned equipment, in addition to sale of certain constructed assets. In situations where arrangements contain multiple elements, contract consideration is allocated based on relative standalone selling price. Lease components associated with underlying assets that have an alternative use are classified as operating leases with revenue recognized over time throughout the lease term. Lease components associated with underlying assets that have no alternative are classified as sales-type leases, with point in time revenue recognition at the on-set of the lease, or classified as financing transactions, with over time revenue recognition at the on-set of the construction of the underlying assets. In order for a component to be separate, the customer would be able to benefit from the right of use of the component separately or with other resources readily available to the customer and the right of the use is not highly dependent or highly interrelated with the other rights to use the other underlying assets or components. 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. 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. 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. 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 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 Consolidated Balance Sheets 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 design |
Acquisitions and Divestitures
Acquisitions and Divestitures | 12 Months Ended |
Dec. 31, 2023 | |
Business Combinations [Abstract] | |
Acquisitions and Divestitures | Acquisitions and Divestitures Evoqua Water Technologies Corp. On May 24, 2023, the Company completed the acquisition of 100% of the issued and outstanding shares of Evoqua, a leader in providing water and wastewater treatment solutions, offering a broad portfolio of products and services to support industrial, municipal, and recreational customers, pursuant to the Agreement and Plan of Merger dated January 22, 2023 (the “Merger Agreement”). The Merger Agreement provided that Fore Merger Sub, Inc., a wholly owned subsidiary of the Company, merge with and into Evoqua, with Evoqua surviving as a wholly owned subsidiary of Xylem (the “Merger”). Under the terms and conditions of the Merger Agreement, each share of Evoqua common stock issued and outstanding immediately prior to the effective time of the Merger (other than certain excluded shares as described in the Merger Agreement) was converted into the right to receive 0.48 (the “Exchange Ratio”) of a share of the common stock of Xylem. Upon the effectiveness of the Merger, legacy Evoqua stockholders owned approximately 25% and legacy Xylem shareholders owned approximately 75% of the combined company. The purchase price for purposes of the Merger consisted of an aggregate of $6,121 million of the Company’s common stock, $160 million in replacement equity awards, and $619 million to repay certain indebtedness of Evoqua (refer to Note 15, "Credit Facilities and Debt"). Acquisition costs for the year ended December 31, 2023 of $57 million have been recorded within Selling, general and administrative expense in our Consolidated Income Statements. The acquisition-date fair value of the consideration totaled $6,900 million, which consisted of the following: (in millions) Fair Value of Purchase Consideration Xylem Common Stock issued to Evoqua stockholders (58,779,096 shares) $ 6,121 Estimated replacement equity awards 160 Payment of certain Evoqua indebtedness 619 Total $ 6,900 The Company has applied the acquisition method of accounting in accordance with ASC 805, Business Combinations (“ASC 805”) and recognized assets acquired and liabilities assumed at their fair value as of the date of acquisition, with the excess purchase consideration recorded to goodwill. As the Company finalizes the estimation of the fair value of the assets acquired and liabilities assumed, additional adjustments may be recorded during the measurement period (a period not to exceed 12 months from the acquisition date). We recorded measurement period adjustments as a result of refining certain assumptions that were based on facts and circumstances that existed as of the acquisition date, including customer attrition and discount rates, which affected the underlying cash flows in the valuation. Measurement period adjustments recorded on our Consolidated Balance Sheets at December 31, 2023 primarily include a $535 million decrease in intangible assets, a $123 million reduction in long term deferred income tax liabilities, which together with other adjustments, resulted in a corresponding $449 million increase to goodwill. As a result, we recognized a reduction of expenses of approximately $5 million related to amortization in our Consolidated Income Statements for the year ended December 31, 2023 that would have been recognized during the nine months ended September, 30, 2023 if the measurement period adjustments would have been made as of the acquisition date. The following table summarizes the preliminary acquisition date fair value of net tangible and intangible assets acquired, net of liabilities assumed from Evoqua: (in millions) Fair Value Cash and cash equivalents $ 143 Receivables (a) 432 Inventories 268 Prepaid and other current assets 78 Assets held for sale 8 Property, plant and equipment, net 508 Goodwill 4,813 Other intangible assets, net 1,772 Other non-current assets 181 Non-current assets held for sale 85 Accounts payable (210) Accrued and other current liabilities (349) Short-term borrowings and current maturities of long-term debt (166) Liabilities held for sale (1) Long-term debt (111) Other non-current accrued liabilities (120) Deferred income tax liabilities (428) Non-current liabilities held for sale (3) Total $ 6,900 (a) Including $322 million of receivables and $110 million of contract assets. The preliminary purchase price allocation is subject to further refinement and may require significant adjustments to arrive at the final purchase price allocation. The above fair values of assets acquired and liabilities assumed are preliminary and are based on the information that was available as of the reporting date. The fair values of the assets acquired and liabilities assumed were preliminarily determined using the income and cost approaches. In many cases, the determination of the fair values required estimates about discount rates, future expected cash flows and other future events that are judgmental and subject to change. The final determination of the fair value of certain assets and liabilities will be completed as soon as the necessary information becomes available but no later than one year from the acquisition date. The fair value of receivables acquired is $322 million, with the gross contractual amount being $329 million. The Company expects $7 million to be uncollectible. The amounts of revenue and net loss from continuing operations before income taxes of Evoqua since the acquisition date included in the Consolidated Income Statements for the year ended December 31, 2023 are $1,177 million and $66 million, respectively. The $4,813 million of goodwill recognized, which is not deductible for U.S. income tax purposes, is primarily attributable to synergies and economies of scale expected from combining the operations of Evoqua and Xylem, as well as the assembled workforce of Evoqua. Identifiable Intangible Assets Acquired The following table summarizes key information underlying identifiable intangible assets related to the Evoqua acquisition: (in millions) Useful Life (in years) Useful Life Weighted Average (in years) Fair Value (in millions) Trademarks 6 6.0 $ 50 Proprietary technology and patents 4 - 9 7.1 123 Customer and distributor relationships 6 - 20 17.9 1,395 Backlog 1 - 10 5.4 120 Permits 8 8.0 70 Software 1 - 13 2.3 14 Total 15.4 $ 1,772 The preliminary estimate of the fair value of Evoqua’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. The fair value measurements were primarily based on significant inputs that are not observable in the market and thus represent a Level 3 measurement of the fair value hierarchy as defined in ASC 820, Fair Value Measurements (“ASC 820”). Intangible assets consisting of the Evoqua tradename, technology, customer relationships, backlog, and permits were valued using the multi-period excess earnings method (“MEEM”), the relief from royalty (“RFR”) method, or the with and without method, which are all forms of the income approach. Intangible assets related to Evoqua software were valued using the cost approach. • Trademarks and proprietary technology intangible assets were valued using the RFR method. The RFR method of valuation suggests that in lieu of ownership, the acquirer can obtain comparable rights to use the subject asset via a license from a hypothetical third-party owner. The asset’s Fair Value is the present value of license fees avoided by owning it (i.e., the royalty savings). • Customer and distributor relationships and backlog intangible assets were valued using the MEEM method. The MEEM method of valuation is an approach where the net earnings attributable to the asset being measured are isolated from other “contributory assets” over the intangible asset’s remaining economic life. • The Permits intangible asset was valued using the with and without method. The with and without method of valuation is an approach that considers the hypothetical impact to the projected cash flows of the business if the intangible asset was not in place. • The Software intangible asset was valued using the cost approach. The cost approach method of valuation is an approach that relies on estimating the replacement or reproduction costs new of assets, along with factors of physical deterioration, based on the principle that an asset would not be purchased for a price higher than the cost to replace it with an asset of comparable utility. • Inventory was estimated using the comparative sales method, which quantifies the fair value of inventory based on the expected sales price of the subject inventory (when complete), reduced for: (i) all costs expected to be incurred in its completion and disposition efforts and (ii) a profit on those value-added completion and disposition costs. Stock-Based Compensation In connection with the Merger, each outstanding and issued option, restricted stock unit (“RSU”), performance stock unit (“PSU”) and cash-settled stock appreciation right (“SAR”) was converted into the Xylem equivalent, with outstanding PSUs being converted into Xylem RSUs. As a result, Xylem issued 2 million replacement equity options and 707 thousand RSU awards (of which 330 thousand were converted PSUs.) The portion of the fair value related to pre-combination services of $160 million was included in the purchase price, and $56 million will be recognized over the remaining service periods. As of December 31, 2023, the future unrecognized expense related to the outstanding options and RSUs was approximately $1 million and $11 million, respectively. The future unrecognized expense related to options and RSUs will be recognized over a weighted-average service period of 2 years. SARs are immaterial. Pro Forma Financial 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, 2023 and 2022, assuming the acquisition had occurred on January 1, 2022. Year Ended (in millions) 2023 2022 Revenue $ 8,146 $ 7,329 Net income $ 668 $ 256 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, 2022, nor are they necessarily indicative of future results. The unaudited pro-forma information for all periods presented includes the following adjustments, where applicable, for business combination accounting effects resulting from the acquisition: (i) amortization of the fair value step up in inventory, (ii) additional amortization expense related to finite-lived intangible assets acquired, (iii) repayment of Evoqua’s term loan and revolver and the settlement of the related interest rate swap, (iv) additional interest expense related to financing for the acquisition (refer to Note 15, "Credit Facilities and Debt"), (v) depreciation expense on property, plant and equipment, (vi) additional incremental stock-based compensation expense for the replacement of Evoqua’s outstanding equity awards with Xylem’s replacement equity awards, and (vii) the related tax effects assuming that the business combination occurred on January 1, 2022. The significant non-recurring adjustments reflected in the unaudited pro-forma consolidated information above include the reclassification of the transaction costs to the earliest period presented and the reversal of the impacts related to the settlement of the interest rate swap, each net of tax. Divestitures During the third quarter ended September 30, 2023, Xylem sold the former Evoqua hemodialysis concentrates business for approximately $12 million. |
Restructuring and Asset Impairm
Restructuring and Asset Impairment Charges | 12 Months Ended |
Dec. 31, 2023 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Asset Impairment Charges | Restructuring and Asset Impairment Charges From time to time, the Company will incur costs related to restructuring actions in order to optimize our cost base and more strategically position itself. During 2023 we incurred restructuring costs of $72 million. We incurred these charges primarily as a result of our acquisition of Evoqua. Approximately $27 million of the charges related to stock-based compensation expense due to acceleration clauses in Evoqua's equity compensation agreements. Approximately $15 million of the charges represented the reduction of headcount related to the integration of Evoqua. Additionally, during 2023 we incurred $30 million of charges related to our efforts to reposition our businesses to optimize our cost structure, improve our operational efficiency and effectiveness, strengthen our competitive positioning and better serve our customers. The charges were incurred across all of our segments. During 2022, we incurred restructuring charges of $15 million. We incurred these charges primarily as a continuation of our efforts 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 across the Water Infrastructure, Applied Water and Measurement and Control Solutions segments. 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 was designed to support our long-term financial resilience and simplify our operations, strengthen our competitive positioning and better serve our customers. As a result of this action, during 2021, we recognized restructuring charges of $4 million and $2 million in our Water Infrastructure and Applied Water segments, respectively. These charges included reduction of headcount across both segments. Other, less significant, restructuring actions taken in 2021 resulted in $3 million of charges during 2021 and are included in the information presented below. The following table presents the components of restructuring expense and asset impairment charges incurred during each of the previous three years: Year Ended December 31, (in millions) 2023 2022 2021 By component: Severance and other charges $ 70 $ 15 $ 10 Asset impairment 3 — 1 Other restructuring charges — — 1 Reversal of restructuring accruals (1) — (6) Total restructuring costs 72 15 6 Asset impairment charges 4 14 1 Total restructuring and asset impairment charges $ 76 $ 29 $ 7 By segment: Water Infrastructure $ 15 $ 6 $ 8 Applied Water 7 4 2 Measurement and Control Solutions 15 19 (3) Integrated Solutions and Services 4 — — Corporate and Other 35 — — 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, 2023 and 2022: (in millions) 2023 2022 Restructuring accruals - January 1 $ 10 $ 7 Restructuring costs 72 15 Cash payments (30) (11) Asset impairment (3) — Stock based compensation included within AOCL (27) — Foreign currency and other 2 (1) Restructuring accruals - December 31 $ 24 $ 10 By segment: Water Infrastructure $ 3 $ 1 Applied Water 1 — Measurement and Control Solutions 8 3 Integrated Solutions and Services 1 — Regional selling locations (a) 7 4 Corporate and other 4 2 (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 the total costs expected to be incurred, the amount incurred in the period, and the cumulative costs incurred to date for our 2021, 2022 and 2023 restructuring actions: (in millions) Water Infrastructure Applied Water Measurement and Control Solutions Integrated Solutions and Services Corporate Total Actions Commenced in 2023: Total expected costs $ 18 $ 16 $ 12 $ 7 $ 34 $ 87 Costs incurred during 2023 15 6 11 4 35 71 Total expected costs remaining $ 3 $ 10 $ 1 $ 3 $ (1) $ 16 Actions Commenced in 2022: Total expected costs $ 6 $ 5 $ 4 $ — $ — $ 15 Costs incurred during 2022 6 4 4 — — 14 Costs incurred during 2023 — 1 — — — 1 Total expected costs remaining $ — $ — $ — $ — $ — $ — Actions Commenced in 2021: Total expected costs $ 3 $ — $ — $ — $ — $ 3 Costs incurred during 2021 3 — — — — $ 3 Costs incurred during 2022 — — — — — $ — Costs incurred during 2023 — — — — — $ — Total expected costs remaining $ — $ — $ — $ — $ — $ — During 2022, we also incurred charges of $1 million within the Measurement and Control Solutions segment, related to actions commenced prior to 2020. During 2021, we recorded a reduction of $3 million within the Measurement and Control Solutions segment, related to actions commenced prior to 2020. The Water Infrastructure, Applied Water, Measurement and Control Solutions, Integrated Solutions and Services and Corporate actions commenced in 2023 consist primarily of severance charges. The actions are expected to continue through the end of 2024. The Water Infrastructure, Applied Water and Measurement and Control Solutions actions commenced in 2022 consist primarily of severance charges. The actions commenced in 2022 are complete. The Water Infrastructure actions commenced in 2021 consist primarily of severance charges. The actions commenced in 2021 are complete. Asset Impairment During the first and fourth quarters of 2023, we determined that internally developed in-process software within our Measurement and Control Solutions segment was impaired as a result of actions taken to prioritize strategic investments and we therefore recognized an impairment charge of $2 million and $1 million, respectively. Refer to Note 12, "Goodwill and Other Intangible Assets," for additional information. During the third quarter of 2023, we recognized a $1 million impairment charge for certain fixed assets within our Measurement and Control Solutions segment. During the third quarter of 2022, we determined that certain assets including software and customer relationships within our Measurement and Control Solutions segment were impaired. Accordingly, we recognized an impairment charge of $14 million. Refer to Note 12,"Goodwill and Other Intangible Assets," for additional information. |
Revenue
Revenue | 12 Months Ended |
Dec. 31, 2023 | |
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) 2023 2022 2021 Revenue from contracts with customers $ 6,963 $ 5,294 $ 4,998 Lease Revenue 401 228 197 Total $ 7,364 $ 5,522 $ 5,195 The following table reflects revenue from contracts with customers by application: Year Ended December 31, (in millions) 2023 2022 2021 Water Infrastructure Transport $ 1,889 $ 1,715 $ 1,619 Treatment 795 421 431 Applied Water Building Solutions 1,025 965 877 Industrial Water 828 802 736 Measurement and Control Solutions Water 1,354 1,126 1,055 Energy 375 265 280 Integrated Solutions and Services 697 — — Total $ 6,963 $ 5,294 $ 4,998 The following table reflects revenue from contracts with customers by geographical region: Year Ended December 31, (in millions) 2023 2022 2021 Water Infrastructure United States $ 934 $ 664 $ 556 Western Europe 911 757 753 Emerging Markets (a) 581 495 537 Other 258 220 204 Applied Water United States 970 914 804 Western Europe 401 380 370 Emerging Markets (a) 342 349 324 Other 140 124 115 Measurement and Control Solutions United States 1,122 857 796 Western Europe 290 240 256 Emerging Markets (a) 203 198 189 Other 114 96 94 Integrated Solutions and Services United States 646 — — Western Europe 8 — — Emerging Markets (a) 9 — — Other 34 — — Total $ 6,963 $ 5,294 $ 4,998 (a) Emerging Markets includes results from the following regions: Eastern Europe, the Middle East and Africa, Latin America and Asia Pacific (excluding Japan, Australia and New Zealand, which are presented in "Other") 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 1/1/2022 $ 125 $ 164 Additions, net 115 137 Revenue recognized from opening balance — (109) Billings transferred to accounts receivable (82) — Other (7) (9) Balance at 1/1/2023 $ 151 $ 183 Opening balance from the acquisition of Evoqua 110 107 Additions, net 121 162 Revenue recognized from opening balance — (128) Billings transferred to accounts receivable (126) — Other 7 (9) Balance at 12/31/2023 $ 263 $ 315 (a) Excludes receivable balances that are disclosed on the Consolidated Balance Sheet s 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, 2023, the aggregate amount of the transaction price allocated to performance obligations that are unsatisfied or partially unsatisfied for contracts with performance obligations, amount to $914 million, of which $414 million was obtained through the Evoqua acquisition. 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, 2023 | |
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) 2023 2022 2021 Interest income $ 28 $ 16 $ 7 Income from equity method investments — — 9 Other (expense) income – net 5 (9) (16) Total other non-operating (expense) income, net $ 33 $ 7 $ — |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2023 | |
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) 2023 2022 2021 Income (loss) components: Domestic $ 123 $ 90 $ 45 Foreign 512 350 466 Total pre-tax income $ 635 $ 440 $ 511 Income tax expense components: Current: Domestic – federal $ (4) $ 77 $ 16 Domestic – state and local 23 16 5 Foreign 86 56 53 Total Current 105 149 74 Deferred: Domestic – federal $ (49) $ (43) $ (2) Domestic – state and local (8) (12) — Foreign (22) (9) 12 Total Deferred (79) (64) 10 Total income tax provision $ 26 $ 85 $ 84 Effective income tax rate 4.1 % 19.2 % 16.3 % 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, 2023 2022 2021 Tax provision at U.S. statutory rate 21.0 % 21.0 % 21.0 % Increase (decrease) in tax rate resulting from: State income taxes 1.7 1.2 0.8 Uncertain tax positions (9.9) (1.2) (0.1) Net interest deductions — (1.8) (2.4) U.S. tax on foreign earnings 2.5 2.7 2.2 Tax incentives (2.6) (4.4) (5.5) Valuation allowance (5.8) 0.1 0.9 Rate change (2.0) (0.6) 0.9 Federal R&D tax credit (0.5) (0.7) (0.7) Stock compensation (0.6) 0.1 (0.6) U.S. foreign derived intangible income tax benefit (0.7) (1.3) (0.6) Tax on distribution of foreign earnings — 2.4 (0.2) Non-deductible compensation 1.2 0.7 0.5 Other tax credits (1.8) — — Other – net 1.6 1.0 0.1 Effective income tax rate 4.1 % 19.2 % 16.3 % 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) 2023 2022 Deferred tax assets: Employee benefits $ 79 $ 58 Accrued expenses 49 36 Loss and other tax credit carryforwards 241 245 R&D capitalization 40 32 Inventory 5 5 Lease Liabilities 79 68 Hedging instruments 8 — Other 12 7 513 451 Valuation allowance (179) (204) Net deferred tax asset $ 334 $ 247 Deferred tax liabilities: Intangibles $ 500 $ 155 Investment in foreign subsidiaries 11 5 Property, plant and equipment 131 65 Lease right-of-use assets 78 67 Hedging Instruments — 20 Other — 11 Total deferred tax liabilities $ 720 $ 323 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, 2023, a valuation allowance of $179 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) 2023 2022 2021 Valuation allowance — January 1 $ 204 $ 201 $ 217 Change in assessment (a) (47) 1 — Current year operations 12 3 4 Other comprehensive income 1 — (4) Foreign currency and other (b) 5 (1) (16) Acquisitions 4 — — Valuation allowance — December 31 $ 179 $ 204 $ 201 (a) Decrease in valuation allowance in 2023 is primarily attributable to changes in realization on deferred tax assets in various foreign jurisdictions. (b) Decrease in valuation allowance in 2021 is primarily attributable to foreign exchange movement impacting foreign balances. Deferred taxes are classified in the Consolidated Balance Sheets as follows: December 31, (in millions) 2023 2022 Non-current assets $ 171 $ 146 Non-current liabilities (557) (222) Total net deferred tax liabilities $ (386) $ (76) Tax attributes available to reduce future taxable income begin to expire as follows: (in millions) December 31, 2023 First Year of Expiration U.S. net operating loss $ 4 December 31, 2025 State net operating loss 88 December 31, 2026 U.S. tax credits 12 December 31, 2032 State excess interest expense 21 Indefinite State tax credits — Indefinite Foreign net operating loss 901 December 31, 2024 Foreign tax credits 5 December 31, 2030 As of December 31, 2023, the Company has provided a deferred tax liability of $6 million for net foreign withholding taxes and state income taxes on $463 million of foreign earnings expected to be repatriated to the U.S. parent as deemed necessary in the future. 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) 2023 2022 2021 Unrecognized tax benefits — January 1 $ 102 $ 111 $ 114 Gross Increases - Current year tax positions 2 — — Gross Increases - Prior year tax positions 4 3 — Gross Decreases - Prior year tax positions (75) (8) (1) Acquisitions 2 — — Settlements — (1) — Lapse of Statute of Limitations — (2) (1) Currency Translation Adjustment — (1) (1) Unrecognized tax benefits — December 31 $ 35 $ 102 $ 111 The amount of unrecognized tax benefits at December 31, 2023 which, if ultimately recognized, will reduce our effective tax rate is $35 million. Changes in tax laws, regulations, administrative practices, principles, and interpretations may impact our unrecognized tax benefits. The timing of the resolution of income tax controversies is highly uncertain, and the amounts ultimately paid, if any, upon resolution of the issues raised by the taxing authorities may differ from the amounts accrued. It is reasonably possible that within the next twelve months we will receive additional assessments by various tax authorities or possibly reach resolution of income tax controversies in one or more jurisdictions. These assessments or settlements could result in changes to our unrecognized tax benefits related to positions on prior years’ tax filings. The actual amount of any change could vary significantly depending on the ultimate timing and nature of any settlements. We cannot currently provide an estimate of the range of possible outcomes. We believe that it is reasonably possible that unrecognized tax benefits will be reduced by approximately $2 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, 2023 and 2022 was $5 million and $9 million, respectively for both December 31, 2023 and 2022. 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. Xylem filed an appeal with the Administrative Court of Växjö, which rendered a decision adverse to Xylem in June 2022 for SEK824 million (approximately $82 million USD), consisting of the full tax assessment amount plus penalties and interest. Xylem has appealed this decision with the intermediate appellate court, the Administrative Court of Appeal (the “Court”). At this time, management, in consultation with external legal advisors, continues to believe it is more likely than not that Xylem will prevail on the proposed assessment and will continue to vigorously defend our position through the appellate process. Both parties will have the ability to seek appeal of the Court’s decision to the Supreme Administrative Court of Sweden. There can be no assurance that the final determination by the authorities will not be materially different than our position. As of December 31, 2023, 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 2017 Luxembourg 2019 Sweden 2013 Germany 2016 United Kingdom 2016 United States 2017 Switzerland 2019 |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2023 | |
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, 2023 2022 2021 Net income (in millions) $ 609 $ 355 $ 427 Shares (in thousands): Weighted average common shares outstanding 216,982 180,189 180,225 Add: Participating securities (a) 30 28 22 Weighted average common shares outstanding — Basic 217,012 180,217 180,247 Plus incremental shares from assumed conversions: (b) Dilutive effect of stock options 768 549 871 Dilutive effect of restricted stock units and performance share units 400 213 408 Weighted average common shares outstanding — Diluted 218,180 180,979 181,526 Basic earnings per share $ 2.81 $ 1.97 $ 2.37 Diluted earnings per share $ 2.79 $ 1.96 $ 2.35 (a) Restricted stock units 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) 2023 2022 2021 Stock options 1,703 1,453 1,132 Restricted stock units 566 353 271 Performance share units 289 284 330 |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2023 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories The components of total inventories are summarized as follows: December 31, (in millions) 2023 2022 Finished goods $ 355 $ 286 Work in process 102 58 Raw materials 561 455 Total inventories $ 1,018 $ 799 |
Property, Plant and Equipment
Property, Plant and Equipment | 12 Months Ended |
Dec. 31, 2023 | |
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) 2023 2022 Land, buildings and improvements $ 480 $ 360 Machinery and equipment 1,124 896 Equipment held for lease or rental 456 263 Furniture and fixtures 143 124 Construction work in progress 217 106 Other 47 38 Total property, plant and equipment, gross 2,467 1,787 Less accumulated depreciation 1,298 1,157 Total property, plant and equipment, net $ 1,169 $ 630 Depreciation expense related to property, plant and equipment was $177 million, $111 million, and $118 million for 2023, 2022, and 2021, respectively. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2023 | |
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, 2023 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, 2023 that required an impairment test for the Company’s ROU assets. Our current operating lease liabilities of $84 million and $65 million are included in "accrued and other current liabilities" as of December 31, 2023 and 2022, respectively . Other non-current accrued liabilities other non-current assets Our current finance lease liabilities of $22 million and $4 million are included in a ccrued and other current liabilities other non-current accrued liabilities other non-current assets Year Ended December 31, (in millions) 2023 2022 2021 Lease cost Finance lease cost: Depreciation of ROU assets $ 16 $ 3 $ 1 Interest on lease liabilities 2 1 — Operating lease cost 96 83 84 Short-term lease cost 4 2 2 Variable lease cost 23 21 23 Total lease cost $ 141 $ 110 $ 110 The supplemental cash flow information related to leases are as follows: Year Ended December 31, (in millions) 2023 2022 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from finance leases $ 2 $ — $ — Operating cash flows from operating leases $ 92 $ 82 $ 83 Financing cash flows from finance leases $ 14 $ 3 $ 1 Right-of-use assets obtained in exchange for lease obligations: Finance leases $ 34 $ 24 $ 5 Operating leases $ 74 $ 94 $ 109 Information relating to the lease term and discount rate are as follows: Year Ended December 31, 2023 2022 Weighted-average remaining lease term (years) Operating leases 6 Years 7 Years Finance leases 5 Years 7 Years Weighted-average discount rate Operating leases 3.2% 2.3% Finance leases 4.2% 2.7% As of December 31, 2023, the maturities of finance lease liabilities were as follows: (in millions) 2024 $ 22 2025 23 2026 19 2027 14 2028 8 Thereafter 8 Total lease payments 94 Less: Imputed interest (8) Total $ 86 As of December 31, 2023, the maturities of operating lease liabilities were as follows: (in millions) 2024 $ 89 2025 78 2026 63 2027 49 2028 37 Thereafter 68 Total lease payments 384 Less: Imputed interest (30) Total $ 354 Lessor arrangements Our gross assets available for rent were $457 million and $263 million as of December 31, 2023 and 2022, respectively. The accumulated amortization related to our gross assets was $203 million and $161 million as of December 31, 2023 and 2022, respectively. Depreciation expense for these assets was $58 million, $27 million and $24 million for the 12 month period ended December 31, 2023, 2022 and 2021, respectively. The components of our lease revenue are as follows: Year Ended December 31, (in millions) 2023 2022 2021 Lease revenue: operating leases $395 $228 $197 Lease revenue: sales-type leases 6 — — Total lease revenue $401 $228 $197 As of December 31, 2023, future minimum lease payments under operating leases are as follows: (in millions) 2024 $ 122 2025 74 2026 59 2027 50 2028 34 Thereafter 172 Future minimum lease payments $ 511 At December 31, 2023, the Company had current and long-term lease receivables of $5 million and $57 million, respectively, recorded in Prepaid and other current assets and Other non-current assets, respectively, in the Consolidated Balance Sheets related to sales-type leases. As of December 31, 2023, maturities of sales type lease receivables are as follows: (in millions) 2024 $ 5 2025 5 2026 5 2027 5 2028 4 Thereafter 38 Future minimum lease payments $ 62 |
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, 2023 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, 2023 that required an impairment test for the Company’s ROU assets. Our current operating lease liabilities of $84 million and $65 million are included in "accrued and other current liabilities" as of December 31, 2023 and 2022, respectively . Other non-current accrued liabilities other non-current assets Our current finance lease liabilities of $22 million and $4 million are included in a ccrued and other current liabilities other non-current accrued liabilities other non-current assets Year Ended December 31, (in millions) 2023 2022 2021 Lease cost Finance lease cost: Depreciation of ROU assets $ 16 $ 3 $ 1 Interest on lease liabilities 2 1 — Operating lease cost 96 83 84 Short-term lease cost 4 2 2 Variable lease cost 23 21 23 Total lease cost $ 141 $ 110 $ 110 The supplemental cash flow information related to leases are as follows: Year Ended December 31, (in millions) 2023 2022 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from finance leases $ 2 $ — $ — Operating cash flows from operating leases $ 92 $ 82 $ 83 Financing cash flows from finance leases $ 14 $ 3 $ 1 Right-of-use assets obtained in exchange for lease obligations: Finance leases $ 34 $ 24 $ 5 Operating leases $ 74 $ 94 $ 109 Information relating to the lease term and discount rate are as follows: Year Ended December 31, 2023 2022 Weighted-average remaining lease term (years) Operating leases 6 Years 7 Years Finance leases 5 Years 7 Years Weighted-average discount rate Operating leases 3.2% 2.3% Finance leases 4.2% 2.7% As of December 31, 2023, the maturities of finance lease liabilities were as follows: (in millions) 2024 $ 22 2025 23 2026 19 2027 14 2028 8 Thereafter 8 Total lease payments 94 Less: Imputed interest (8) Total $ 86 As of December 31, 2023, the maturities of operating lease liabilities were as follows: (in millions) 2024 $ 89 2025 78 2026 63 2027 49 2028 37 Thereafter 68 Total lease payments 384 Less: Imputed interest (30) Total $ 354 Lessor arrangements Our gross assets available for rent were $457 million and $263 million as of December 31, 2023 and 2022, respectively. The accumulated amortization related to our gross assets was $203 million and $161 million as of December 31, 2023 and 2022, respectively. Depreciation expense for these assets was $58 million, $27 million and $24 million for the 12 month period ended December 31, 2023, 2022 and 2021, respectively. The components of our lease revenue are as follows: Year Ended December 31, (in millions) 2023 2022 2021 Lease revenue: operating leases $395 $228 $197 Lease revenue: sales-type leases 6 — — Total lease revenue $401 $228 $197 As of December 31, 2023, future minimum lease payments under operating leases are as follows: (in millions) 2024 $ 122 2025 74 2026 59 2027 50 2028 34 Thereafter 172 Future minimum lease payments $ 511 At December 31, 2023, the Company had current and long-term lease receivables of $5 million and $57 million, respectively, recorded in Prepaid and other current assets and Other non-current assets, respectively, in the Consolidated Balance Sheets related to sales-type leases. As of December 31, 2023, maturities of sales type lease receivables are as follows: (in millions) 2024 $ 5 2025 5 2026 5 2027 5 2028 4 Thereafter 38 Future minimum lease payments $ 62 |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets Changes in the carrying value of goodwill by reportable segment during the years ended December 31, 2023 and 2022 are as follows: (in millions) Water Applied Water Measurement and Control Solutions Integrated Solutions and Services Total Balance as of December 31, 2021 $ 656 $ 515 $ 1,621 $ — $ 2,792 Activity in 2022 Foreign currency and other (18) (13) (42) — (73) Balance as of December 31, 2022 $ 638 $ 502 $ 1,579 $ — $ 2,719 Activity in 2023 Acquisitions 1,779 385 141 2,508 4,813 Foreign currency and other 17 8 19 11 55 Balance as of December 31, 2023 $ 2,434 $ 895 $ 1,739 $ 2,519 $ 7,587 As of December 31, 2023 and 2022, goodwill included accumulated impairment losses $206 million, within the Measurement and Control Solutions segment. The Company has applied the acquisition method of accounting in accordance with ASC 805 and recognized assets acquired and liabilities assumed of Evoqua at their fair value as of the date of acquisition, with the excess purchase consideration recorded to goodwill. We have preliminarily allocated goodwill to segments of the Company that are expected to benefit from the synergies of the acquisition. As the Company finalizes the estimation of the fair value of the assets acquired and liabilities assumed, additional adjustments to the amount of goodwill allocated to each segment may be necessary. During the fourth quarter of 2023, 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. Other Intangible Assets Information regarding our other intangible assets is as follows: December 31, 2023 December 31, 2022 (in millions) Carrying Accumulated Net Carrying Accumulated Net Customer and distributor relationships $ 2,172 $ (475) $ 1,697 $ 784 $ (371) $ 413 Proprietary technology and patents 292 (141) 151 165 (118) 47 Trademarks 188 (96) 92 137 (80) 57 Software 598 (335) 263 514 (268) 246 Other 201 (41) 160 5 (3) 2 Indefinite-lived intangibles 166 — 166 165 — 165 Other intangibles $ 3,617 $ (1,088) $ 2,529 $ 1,770 $ (840) $ 930 We determined that no material impairment of the indefinite-lived intangibles existed as of the measurement date of our impairment assessment in 2023. 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 2023, the Company assessed whether the carrying amounts of long-lived assets in the Measurement and Control Solutions segment may not be recoverable based on the updated forecast of future cash flows, and therefore impaired. Our assessment resulted in an impairment charge of $3 million, primarily related to software. 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 2022, the Company assessed whether the carrying amounts of long-lived assets in the Measurement and Control Solutions segment may not be recoverable based on the updated forecast of future cash flows, and therefore impaired. Our assessment resulted in an impairment charge of $14 million, primarily related to software and customer relationships. 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. Customer and distributor relationships, proprietary technology and patents, trademarks, software and other are amortized over weighted average lives of approximately 16 years, 12 years, 11 years, 6 years and 4 years, respectively. Total amortization expense for intangible assets was $243 million, $125 million, and $127 million for 2023, 2022 and 2021, respectively. Estimated amortization expense for each of the five succeeding years is as follows: (in millions) 2024 $ 312 2025 282 2026 252 2027 226 2028 206 |
Accrued and Other Current Liabi
Accrued and Other Current Liabilities | 12 Months Ended |
Dec. 31, 2023 | |
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) 2023 2022 Compensation and other employee-benefits $ 403 $ 285 Customer-related liabilities 370 210 Accrued taxes 170 186 Lease liabilities 106 69 Accrued warranty costs 45 37 Other accrued liabilities 127 80 Total accrued and other current liabilities $ 1,221 $ 867 |
Credit Facilities and Long-Term
Credit Facilities and Long-Term Debt | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
Credit Facilities and Long-Term Debt | Credit Facilities and Debt Total debt outstanding is summarized as follows: December 31, (in millions) 2023 2022 3.250% Senior Notes due 2026 (a) 500 500 1.950% Senior Notes due 2028 (a) 500 500 2.250% Senior Notes due 2031 (a) 500 500 4.375% Senior Notes due 2046 (a) 400 400 Equipment Financing due 2024 to 2032 123 — Term loan 278 — Debt issuance costs and unamortized discount (b) (17) (20) Total debt $ 2,284 $ 1,880 Less: short-term borrowings and current maturities of long-term debt 16 — Total long-term debt $ 2,268 $ 1,880 (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 2026 was $482 million and $470 million as of December 31, 2023 and 2022, respectively. The fair value of our Senior Notes due 2028 was $453 million and $430 million as of December 31, 2023 and 2022 respectively. The fair value of our Senior Notes due 2031 was $429 million and $406 million as of December 31, 2023 and 2022 respectively. The fair value of our Senior Notes due 2046 was $349 million and $333 million as of December 31, 2023 and 2022, respectively. (b) 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. As of December 31, 2023, we are in compliance with all covenants for the Green Bond. 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 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, 2023, we are in compliance with all covenants for the Senior Notes. On December 12th, 2022 our Senior Notes due 2023 were settled with cash on hand for a total of $527 million. 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. On March 1, 2023, Xylem terminated the 2019 Credit Facility among the Company, certain lenders and Citibank, N.A. as Administrative Agent as a result of signing the 2023 Five-Year Revolving Credit Facility. 2023 Five-Year Revolving Credit Facility On March 1, 2023, Xylem entered into a five-year revolving credit facility (the "2023 Credit Facility") with Citibank, N.A., as Administrative Agent, and a syndicate of lenders. The 2023 Credit Facility provides for an aggregate principal amount of up to $1 billion (available in U.S. Dollars and in Euros), with increases of up to $300 million for a maximum aggregate principal amount of $1.3 billion at the request of Xylem and with the consent of the institutions providing such increased commitments. Interest on all loans under the 2023 Credit Facility is payable either quarterly or at the expiration of any Term SOFR or EURIBOR interest period applicable thereto. Borrowings accrue interest at a rate equal to, at Xylem's election, a base rate or an adjusted Term SOFR or EURIBOR rate plus an applicable margin. The 2023 Credit Facility includes customary provisions for implementation of replacement rates for Term SOFR-based and EURIBOR-based loans. The 2023 Credit Facility also includes a pricing grid that determines the applicable margin based on Xylem's credit rating, with a further adjustment based on Xylem's achievement of certain Environmental, Social and Governance ("ESG") key performance indicators. 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 Xylem's 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 with a further adjustment based on Xylem's achievement of certain ESG key performance indicators. The 2023 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. In accordance with the terms of the agreement to the 2023 Credit Facility, Xylem may not exceed a maximum leverage ratio of 4.00 to 1.00 for a period of four consecutive fiscal quarters beginning with the fiscal quarter during which a material acquisition is consummated and a maximum leverage ratio of 3.50 to 1.00 thereafter for a minimum of four fiscal quarters before another material acquisition is consummated. In addition, the 2023 Credit Facility 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 2023 Credit Facility also contains customary events of default. Finally, Xylem has the ability to designate subsidiaries that can borrow under the 2023 Credit Facility, subject to certain requirements and conditions set forth in the 2023 Credit Facility. As of December 31, 2023, the 2023 Credit Facility was undrawn, and we are in compliance with all revolver covenants. The 2023 Credit Facility has availability of $1 billion, comprised of the $1 billion aggregate principal as of December 31, 2023. Term Loan Facility On May 9, 2023, the Company’s subsidiary, Xylem Europe GmbH (the “borrower”) entered into a 24 month €250 million (approximately $278 million) term loan facility (the “Term Facility”) the terms of which are set forth in a term loan agreement, among the borrower, the Company, as parent guarantor and ING Bank. The Company has entered into a parent guarantee in favor of ING Bank also dated May 9, 2023 to secure all present and future obligations of the borrower under the Term Loan Agreement. The net cash proceeds were used to repay a portion of Evoqua’s indebtedness pursuant to the Merger Agreement. Equipment Financings As a result of the Evoqua acquisition, the Company has secured financing agreements that require providing a security interest in specified equipment and, in some cases, the underlying contract and related receivables. As of December 31, 2023, the gross and net amounts of those assets are included on the Consolidated Balance Sheets as follows: December 31, 2023 (in millions) Gross Net Property, plant, and equipment, net $ 75 $ 71 Receivables, net 1 1 Prepaid and other current assets 5 5 Other non-current assets 58 57 $ 139 $ 134 During the year ended December 31, 2023, the Company entered into the following equipment financings: Date entered Due Interest Rate at December 31, 2023 Principal Amount December 20, 2023 July 31, 2032 6.320 % 2 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 $1 billion inclusive of the 2023 Credit Facility. As of December 31, 2023 and 2022, none of the Company's $600 million U.S. Dollar commercial paper program was outstanding, respectively. The net cash proceeds from issuance of commercial paper were used to repay a portion of Evoqua’s indebtedness pursuant to the Merger Agreement. We have the ability to continue borrowing under this program going forward 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 $556 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, 2023 and 2022, none of the Company's Euro commercial paper program was outstanding. We have the ability to continue borrowing under this program going forward in future periods. Receivables Securitization Program On April 1, 2021, Evoqua Finance LLC (“Evoqua Finance”), now an indirect wholly-owned subsidiary of the Company, entered into an accounts receivable securitization program (the “Receivables Securitization Program”) consisting of, among other agreements, (i) a Receivables Financing Agreement (as amended, the “Receivables Financing Agreement”) among Evoqua Finance, as the borrower, the lenders from time to time party thereto (the “Receivables Financing Lenders”), PNC Bank, National Association ("PNC"), as administrative agent, EWT LLC, as initial servicer, and PNC Capital Markets LLC, as structuring agent, pursuant to which the lenders have made available to Evoqua Finance a receivables finance facility in an amount up to $150 million, (ii) a Sale and Contribution Agreement (as amended, the “Sale and Contribution Agreement”) among Evoqua Finance, as purchaser, EWT LLC, as initial servicer and as an originator, and Neptune Benson, Inc., an indirectly wholly-owned subsidiary of the Company, as an originator (together with EWT LLC, the “Originators”), and (iii) a Performance Guaranty of Xylem Inc. dated as of May 24, 2023 (the “Performance Guaranty”) in favor of PNC and for the benefit of PNC and the other secured parties under the Receivables Financing Agreement that replaced the performance guaranty of EWT Holdings II Corp. and EWT Holdings III Corp dated as of April 1, 2021. The Receivables Securitization Program contains certain customary representations, warranties, affirmative covenants, and negative covenants, subject to certain cure periods in some cases, including the eligibility of the receivables being sold by the Originators and securing the loans made by the Receivables Financing Lenders, as well as customary reserve requirements, events of default, termination events, and servicer defaults. On July 20, 2023, the Receivables Financing Agreement, the Sale and Contribution Agreement and the Performance Guaranty and the other transaction documents under the Receivables Financing Program were terminated and all outstanding obligations for principal, interest, and fees under the agreement were paid in full. |
Derivative Financial Instrument
Derivative Financial Instruments | 12 Months Ended |
Dec. 31, 2023 | |
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. As a result of Evoqua terminating their interest rate swaps prior to the Company completing the acquisition, the Company received $38 million in proceeds during the second quarter of 2023 from the termination of the interest rate swaps. 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, Chinese Yuan, Australian Dollar, and Polish Zloty. We had foreign exchange contracts with purchase notional amounts totaling $29 million and $255 million as of December 31, 2023 and 2022, respectively. As of December 31, 2023, our most significant foreign currency derivatives included contracts to purchase U.S. Dollar and sell Chinese Yuan and purchase Canadian Dollar and sell U.S. Dollar. The purchased notional amounts associated with these currency derivatives are $19 million and $10 million, respectively. As of December 31, 2022, our most significant foreign currency derivatives included contracts to sell U.S. Dollar and purchase Euro, purchase Swedish Krona and sell Euro, sell British Pound and purchase Euro, purchase U.S. Dollar and sell Canadian Dollar, purchase Polish Zloty and sell Euro, sell Canadian Dollar and purchase Euro and to sell Australian Dollar and purchase Euro. The purchased notional amounts associated with these currency derivatives were $105 million,$73 million, $29 million, $13 million, $13 million, $13 million and $9 million, respectively. 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, third quarter of 2020, and second quarter of 2022 we entered into additional cross-currency swaps. The total notional amount of derivative instruments designated as net investment hedges was and $1,691 million and $1,616 million as of December 31, 2023 and 2022, respectively. Foreign Currency Denominated Debt On March 11, 2016, we issued 2.250% Senior Notes of €500 million aggregate principal amount due March 2023. On December 12, 2022, our Senior Notes due March 2023 were settled with cash on hand for a total of $527 million. Previously, the entirety of the outstanding balance of the 2.250% Senior Notes was designated as a hedge of a net investment in certain foreign subsidiaries. On June 2, 2022, we de-designated the entirety of the outstanding balance of the €500 million 2.250% Senior Notes, or $533 million from the net investment hedge relationship. Fair Value Hedges of Foreign Exchange Risk The de-designation of our 2.250% Senior Notes of €500 million resulted in exposure to fluctuations in the Euro-U.S. Dollar exchange rate. We use currency forward agreements to manage our exposure to fluctuations in the Euro-U.S. Dollar exchange rate. Currency forward agreements involve fixing the foreign currency exchange rate for delivery of a specified amount of foreign currency on a specified date. On June 2, 2022, we entered into a currency forward agreement with a total notional amount of €500 million, designating the agreement as a fair value hedge of our Euro denominated notes. On December 12, 2022 the currency forward agreement matured. The effectiveness of derivatives designated as fair value 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 Selling, general and administrative expenses. Changes in the fair value of the 2.250% Senior Notes of €500 million related to spot exchange rates are also recorded in Selling, general and administrative expenses. Changes in the spot-forward differential and counterparty non-performance risk of the derivatives are excluded from the assessment of hedge effectiveness and will be recognized in AOCL. Amounts in AOCL are recognized in earnings, specifically Interest expense, using a systematic and rational method over the life of the hedging instrument. 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) 2023 2022 2021 Derivatives in Cash Flow Hedges Foreign Exchange Contracts Amount of gain (loss) recognized in OCI/L $ (2) $ (24) $ (10) Amount of loss reclassified from OCI/L into revenue 3 19 4 Amount of loss reclassified from OCI/L into cost of revenue 4 2 — Derivatives in Net Investment Hedges Cross-Currency Swaps Amount of (loss) gain recognized in OCI/L $ (121) $ 94 $ 94 Amount of income recognized in Interest Expense 30 29 21 Foreign Currency Denominated Debt Amount of (loss) gain recognized in OCI/L $ — $ 31 $ 48 Fair Value Hedges Foreign Exchange Contracts Amount of (loss) recognized in Selling, general and administrative expenses $ — $ (7) $ — Amount recognized in Interest expense — (3) — As of December 31, 2023, $1 million of the net losses on cash flow hedges are expected to be reclassified into earnings in the next 12 months. As of December 31, 2023, no gains or losses on the net investment hedges are expected to be reclassified into earnings over their duration. 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) 2023 2022 Derivatives designated as hedging instruments Assets Net Investment Hedges Other non-current assets $ 9 $ 79 Liabilities Net Investment Hedges Other non-current liabilities (54) (6) |
Postretirement Benefit Plans
Postretirement Benefit Plans | 12 Months Ended |
Dec. 31, 2023 | |
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 2023 $ 74 2022 53 2021 60 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 231 thousand and 245 thousand shares of Xylem Inc. common stock in the Xylem Stock Fund at December 31, 2023 and 2022, 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 2023 and 2022, no plan amendments had a material impact to the Company's financial statements. The Company initiated the process for a full buy-out of its largest defined benefit plan in the U.K. in 2019. 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 buyout was completed in September 2022, at which point the remaining benefit obligations were transferred to the insurer and we were relieved of any further obligation. As a result, we recorded a pension settlement charge of £123 million (approximately $140 million), primarily consisting of unrecognized actuarial losses. 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 AOCL: (in millions) December 31, 2023 December 31, 2022 Pension Other Total Pension Other Total Fair value of plan assets $ 296 $ — $ 296 $ 246 $ — $ 246 Projected benefit obligation (582) (31) (613) (482) (31) (513) Funded status $ (286) $ (31) $ (317) $ (236) $ (31) $ (267) Amounts recognized in the Consolidated Balance Sheets Other non-current assets $ 43 $ — $ 43 $ 34 $ — $ 34 Accrued and other current liabilities (13) (3) (16) (12) (3) (15) Accrued post-retirement benefit obligations (316) (28) (344) (258) (28) (286) Net amount recognized $ (286) $ (31) $ (317) $ (236) $ (31) $ (267) Accumulated other comprehensive loss: Net actuarial losses $ (88) $ (7) $ (95) $ (50) $ (6) $ (56) Prior service credit (2) 2 — (1) 4 3 Total $ (90) $ (5) $ (95) $ (51) $ (2) $ (53) The unrecognized amounts recorded in AOCL 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 initially be recognized as increases or decreases in other comprehensive income, net of tax. 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) 2023 2022 2023 2022 Change in benefit obligation: Benefit obligation at beginning of year $ 92 $ 117 $ 390 $ 926 Service cost 2 3 7 12 Interest cost 5 3 16 13 Benefits paid (8) (7) (18) (29) Actuarial loss (gain) (a) 6 (24) 36 (241) Plan amendments, settlements and curtailments (b) 2 — (2) (202) Acquisitions — — 31 — Foreign currency translation and other — — 23 (89) Benefit obligation at end of year $ 99 $ 92 $ 483 $ 390 Change in plan assets: Fair value of plan assets at beginning of year $ 80 $ 108 $ 166 $ 571 Employer contributions 5 — 17 16 Actual return on plan assets 9 (21) 16 (133) Benefits paid (8) (7) (18) (29) Plan amendments, settlements and curtailments — — (1) (202) Acquisitions — — 22 — Foreign currency translation and other — — 8 (57) Fair value of plan assets at end of year $ 86 $ 80 $ 210 $ 166 Unfunded status of the plans $ (13) $ (12) $ (273) $ (224) (a) Actuarial losses for our qualified defined benefit pension plans in 2023 primarily reflect a decrease in the discount rate in 2023 as compared to 2022, which increased benefit obligations. (b) Qualified defined benefit pension plan settlements in 2022 predominantly related to the transfer of gross benefit obligations and related plan assets to an insurance company upon completion of the U.K. pension buy-out as described above. The following table provides a roll-forward of the projected benefit obligation for the other post-retirement employee benefit plans: (in millions) 2023 2022 Change in benefit obligation: Benefit obligation at beginning of year $ 31 $ 42 Interest cost 2 1 Benefits paid (3) (3) Actuarial gain 1 (9) Benefit obligation at the end of year $ 31 $ 31 The accumulated benefit obligation (“ABO”) for all the defined benefit pension plans was $551 million and $460 million at December 31, 2023 and 2022, 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) 2023 2022 Projected benefit obligation $ 474 $ 391 Accumulated benefit obligation 448 372 Fair value of plan assets 146 121 The components of net periodic benefit cost for our defined benefit pension plans are as follows: Year Ended December 31, (in millions) 2023 2022 2021 Domestic defined benefit pension plans: Service cost $ 2 $ 3 $ 3 Interest cost 5 3 3 Expected return on plan assets (6) (6) (7) Amortization of net actuarial loss — 3 4 Net periodic benefit cost $ 1 $ 3 $ 3 International defined benefit pension plans: Service cost $ 7 $ 12 $ 14 Interest cost 16 13 11 Expected return on plan assets (11) (13) (14) Amortization of net actuarial (gain) loss (2) 10 17 U.K. pension settlement expense — 140 — Net periodic benefit cost $ 10 $ 162 $ 28 Total net periodic benefit cost $ 11 $ 165 $ 31 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 income (loss), as they pertain to our defined benefit pension plans are as follows: Year Ended December 31, (in millions) 2023 2022 2021 Domestic defined benefit pension plans: Net (gain) loss $ 3 $ 3 $ — Amortization of net actuarial gain (loss) — (3) (4) (Gains) losses recognized in other comprehensive income (loss) $ 3 $ — $ (4) International defined benefit pension plans: Net (gain) loss $ 31 $ (95) $ (51) Amortization of net actuarial gain (loss) 2 (8) (17) U.K. pension settlement expense — (137) — Foreign Exchange 2 (39) (11) (Gains) losses recognized in other comprehensive income (loss) $ 35 $ (279) $ (79) Total (gains) losses recognized in other comprehensive income (loss) $ 38 $ (279) $ (83) Total (gains) losses recognized in comprehensive income $ 49 $ (114) $ (52) The components of net periodic benefit cost for other post-retirement employee benefit plans are as follows: Year Ended December 31, (in millions) 2023 2022 2021 Interest cost 2 1 1 Amortization of prior service credit (2) (2) (2) Amortization of net actuarial loss — 1 2 Net periodic benefit cost $ — $ — $ 1 Other changes in benefit obligations recognized in other comprehensive income (loss), as they pertain to other post-retirement employee benefit plans are as follows: Year Ended December 31, (in millions) 2023 2022 2021 Net loss (gain) $ 1 $ (9) $ — Prior service credit — — — Amortization of prior service credit 2 2 3 Amortization of net actuarial loss — (1) (2) Losses (gains) recognized in other comprehensive income (loss) $ 3 $ (8) $ 1 Total losses (gains) recognized in comprehensive income $ 3 $ (8) $ 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. 2023 2022 2021 U.S. Int’l U.S. Int’l U.S. Int’l Benefit Obligation Assumptions Discount rate 5.00 % 3.55 % 5.25 % 4.13 % 3.00 % 1.55 % Rate of future compensation increase NM 2.87 % NM 2.79 % NM 2.84 % Net Periodic Benefit Cost Assumptions Discount rate 5.25 % 4.13 % 3.00 % 1.55 % 2.50 % 1.06 % Expected long-term return on plan assets 6.00 % 5.85 % 5.50 % 2.79 % 6.50 % 2.60 % Rate of future compensation increase NM 2.79 % NM 2.84 % NM 2.79 % 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 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 2024 is estimated at 5.84%. 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. The following table provides the actual asset allocations of plan assets as of December 31, 2023 and 2022, and the related asset target allocation ranges by asset category: 2023 2022 Target Equity securities 43.9 % 47.1 % 35-75% Fixed income 42.9 % 43.9 % 45-60% Cash, insurance contracts and other 13.2 % 9.0 % 0-15% 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. • 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, available on demand, 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: 2023 2022 (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 $ 43 $ 56 $ — $ 13 $ 112 $ 37 $ 51 $ — $ 9 $ 97 Diversified growth and income funds — — — 18 18 — — — 19 19 Fixed income Corporate bonds 1 64 — 12 77 1 67 — 5 73 Government bonds — 22 — 23 45 — 13 — 18 31 Hedging instruments — 5 — — 5 — 4 — — 4 Insurance contracts and other — — 26 6 32 — — 20 — 20 Cash and cash equivalents 7 — — — 7 2 — — — 2 Total plan assets subject to leveling $ 51 $ 147 $ 26 $ 72 $ 296 $ 40 $ 135 $ 20 $ 51 $ 246 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, 2021 $ 368 Purchases, sales, settlements, net (210) Actual return on plan assets (99) Currency impact (39) Balance, December 31, 2022 20 Purchases, sales, settlements, net 5 Actual return on plan assets — Currency impact 1 Balance, December 31, 2023 $ 26 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 $25 million and $19 million to our post-retirement plans during 2023 and 2022, respectively. We currently anticipate making contributions to our post-retirement plans in the range of $31 million to $37 million during 2024, of which approximately $8 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 2024 $ 30 $ 3 2025 30 3 2026 31 3 2027 32 3 2028 33 3 Years 2029 - 2033 166 11 |
Share-Based Compensation Plans
Share-Based Compensation Plans | 12 Months Ended |
Dec. 31, 2023 | |
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 units and performance share units. Under the 2011 Omnibus Incentive Plan, the number of shares initially available for awards was 18 million. On November 18, 2022, there were an additional 3.2 million of shares registered for issuance under this plan, which do not increase the total pool of 18 million. On May 24, 2023, there were an additional 2.7 million shares registered for issuance. As of December 31, 2023, there were approximately 5.6 million shares of common stock available for future awards. Total share-based compensation expense recognized for 2023, 2022 and 2021 was $60 million, $37 million, and $33 million, respectively. The unamortized compensation expense at December 31, 2023 related to our stock options, restricted share units and performance share units was $8 million, $42 million and $15 million, respectively, and is expected to be recognized over a weighted average period of 1.6, 1.7 and 1.9 years, respectively. See Note 5, "Restructuring and Asset Impairment Charges" of our consolidated financial statements for discussion of certain restructuring charges related to stock-based compensation expense. The amount of cash received from the exercise of stock options was $62 million, $8 million and $19 million for 2023, 2022 and 2021 with a tax benefit of $12 million, $3 million and $6 million, respectively, 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, generally vest over a three-year period and are exercisable within the contractual term, except in certain instances of termination due to death, retirement, disability and other limited circumstances in accordance with the terms of the grant agreements. The exercise price per share is the fair market value of the underlying common stock on the date each option is awarded. At December 31, 2023, there were options to purchase an aggregate of 2.1 million shares of common stock. The following is a summary of the changes in outstanding stock options for 2023 (granted amounts include options issued in conjunction with the Evoqua acquisition): Share units (in thousands) Weighted Weighted Average Aggregate Intrinsic Value (in millions) Outstanding at January 1, 2023 1,935 $ 67.55 5.9 Granted 2,153 38.13 Exercised (1,930) 32.40 Forfeited and expired (31) 85.46 Other 23 73.16 Outstanding at December 31, 2023 2,150 $ 69.34 5.9 $ 97 Options exercisable at December 31, 2023 1,577 $ 62.39 5.0 $ 82 Vested and non-vested expected to vest as of December 31, 2023 2,107 $ 68.82 5.6 $ 96 The amount of non-vested options outstanding was 0.6 million, 0.6 million and 0.7 million at a weighted average grant date share price of $88.48, $87.62 and $84.66 as of December 31, 2023, 2022 and 2021, 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 2023, 2022 and 2021 was $140 million, $4 million and $27 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 2023, 2022, and 2021 (excluding the valuation of options granted in conjunction with the Evoqua acquisition): 2023 2022 2021 Dividend yield 1.31 % 1.37 % 1.10 % Volatility 27.30 % 26.25 % 26.29 % Risk-free interest rate 4.25 % 1.74 % 0.86 % Expected term (in years) 5.4 5.6 5.7 Weighted-average fair value per option $ 29.06 $ 20.38 $ 23.26 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. 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 awarded to employees vest over a three-year period. Prior to the time a restricted stock unit becomes fully vested, the awardees cannot transfer, pledge or encumber such units. Prior to the time a restricted stock unit 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 prior to vesting, a pro-rata portion of the restricted stock unit may vest in accordance with the terms of the applicable grant agreements. Restricted stock units awarded to member of our Board 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 2023 (granted amounts include options issued in conjunction with the Evoqua acquisition): Share Units (in thousands) Weighted Average Outstanding at January 1, 2023 553 $ 88.88 Granted 1,049 103.08 Vested (699) 38.29 Forfeited (41) 51.52 Outstanding at December 31, 2023 862 $ 98.49 Performance Share Units Performance share units awarded under the long-term incentive plan vest based upon performance by the Company over a three-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 awarded at a target of 100% with actual payout contingent upon the achievement of a pre-set, three-year adjusted ROIC performance target for ROIC performance share units, a pre-set third year revenue target for Revenue performance share units and a relative TSR performance for TSR performance share units. The calculated compensation cost for ROIC and Revenue 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 and Adjusted EBITDA Performance Share Unit Grants As approved by the Leadership Development & Compensation Committee of the Company's Board of Directors, for the 2023-2025 performance period, the completion of the acquisition of Evoqua transitioned one of the performance share unit metrics from a pre-set, three-year adjusted Return on Invested Capital ("ROIC") performance target to a pre-set, third-year adjusted earnings before interest, taxes, depreciation and amortization expense (“EBITDA”) performance target for the combined company. The fair value of the adjusted EBITDA 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 and EBITDA performance share units for 2023: Share units (in thousands) Weighted Average Outstanding at January 1, 2023 146 $ 88.78 Granted 36 100.69 Forfeited (a) (68) 82.40 Outstanding at December 31, 2023 114 $ 97.70 (a) Includes adjusted ROIC performance share unit awards forfeited during the period as a result of the final performance condition not being achieved on vest date. Revenue Performance Share Unit Grants The fair value of the Revenue performance share unit awards is determined using the closing price of our common stock on date of grant. The following is a summary of our Revenue performance share unit grants for 2023: Share units (in thousands) Weighted Outstanding at January 1, 2023 32 $ 86.77 Granted 36 100.69 Forfeited (2) 91.12 Outstanding at December 31, 2023 66 $ 94.19 TSR Performance Share Unit Grants The following is a summary of the changes in outstanding TSR performance share units for 2023: Share units (in thousands) Weighted Average Outstanding at January 1, 2023 178 $ 100.67 Granted 72 108.54 Adjustment for Market Condition Achieved (a) 40 102.55 Vested (102) 102.55 Forfeited (8) 100.99 Outstanding at December 31, 2023 180 $ 103.52 (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 2023 grants. 2023 2022 2021 Volatility 35.9 % 33.3 % 33.5 % Risk-free interest rate 4.66 % 1.44 % 0.24 % |
Capital Stock
Capital Stock | 12 Months Ended |
Dec. 31, 2023 | |
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 $1.32, $1.20 and $1.12 during 2023, 2022 and 2021, respectively. The changes in shares of common stock outstanding for the three years ended December 31 are as follows: (share units in thousands) 2023 2022 2021 Beginning Balance, January 1 180,253 180,392 180,354 Shares issued for the Evoqua acquisition (a) 58,779 — — Stock incentive plan net activity 2,730 437 716 Repurchase of common stock (258) (576) (678) Ending Balance, December 31 241,504 180,253 180,392 (a) See Note 3. "Acquisitions and Divestitures" of our consolidated financial statements for further information. For the years ended December 31, 2023 and December 31, 2022 the Company repurchased 0.3 million shares of common stock for $25 million and repurchased 0.6 million shares of common stock for $52 million, respectively. Repurchases include both share repurchase programs approved by the Board of Directors and repurchases in relation to settlement of employee 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 stockholders and maintains our focus on growth. For the year ended December 31, 2023, there were no shares repurchased under the program. For the year ended December 31, 2022, we repurchased 0.5 million shares for $46 million. There are up to $182 million in shares that may still be purchased under this plan as of December 31, 2023. Aside from the aforementioned repurchase programs, we repurchased approximately 0.3 million and 0.1 million shares for $25 million and $6 million during 2023 and 2022, 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, 2023 | |
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 2023, 2022 and 2021: (in millions) Foreign Currency Translation Post-retirement Benefit Plans Derivative Instruments Total Balance at January 1, 2021 $ (86) $ (330) $ 3 $ (413) Foreign currency translation adjustment 20 20 Income tax impact on foreign currency translation adjustment (35) (35) Changes in post-retirement benefit plans 51 51 Foreign currency translation adjustment for post-retirement benefit plans 11 11 Income tax expense on changes in post-retirement benefit plans, including settlement (15) (15) Amortization of prior service cost and net actuarial loss on post-retirement benefit plans into other non-operating income (expense), net 20 20 Income tax impact on amortization of post-retirement benefit plan items (5) (5) Unrealized loss on derivative hedge agreements (10) (10) Reclassification of unrealized loss on foreign exchange agreements into revenue 1 1 Reclassification of unrealized (gain) loss on foreign exchange agreements into cost of revenue 4 4 Balance at December 31, 2021 $ (101) $ (268) $ (2) $ (371) Foreign currency translation adjustment (53) (53) Income tax impact on foreign currency translation adjustment (26) (26) Changes in post-retirement benefit plans 101 101 U.K. pension settlement 137 137 Foreign currency translation adjustment for post-retirement benefit plans 39 39 Income tax expense on changes in post-retirement benefit plans (58) (58) Amortization of prior service cost and net actuarial loss on post-retirement benefit plans into other non-operating income (expense), net 10 10 Income tax impact on amortization of post-retirement benefit plan items (2) (2) Unrealized loss on derivative hedge agreements (24) (24) Tax on unrealized loss on derivative hedge agreements — — Reclassification of unrealized loss on foreign exchange agreements into revenue 19 19 Reclassification of unrealized loss on foreign exchange agreements into cost of revenue 2 2 (in millions) Foreign Currency Translation Post-retirement Benefit Plans Derivative Instruments Total Balance at December 31, 2022 $ (180) $ (41) $ (5) $ (226) Foreign currency translation adjustment (45) (45) Income tax impact on foreign currency translation adjustment 29 29 Changes in post-retirement benefit plans (35) (35) Foreign currency translation adjustment for post-retirement benefit plans (2) (2) Income tax expense on changes in post-retirement benefit plans, including settlement 9 9 Amortization of prior service cost and net actuarial gain on post-retirement benefit plans into other non-operating income (expense), net (4) (4) Income tax impact on amortization of post-retirement benefit plan items 1 1 Unrealized loss on derivative hedge agreements (2) (2) Tax on unrealized loss on derivative hedge agreements (1) (1) Reclassification of unrealized loss on foreign exchange agreements into revenue 3 3 Reclassification of unrealized loss on foreign exchange agreements into cost of revenue 4 4 Balance at December 31, 2023 $ (196) $ (72) $ (1) $ (269) |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2023 | |
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 investigations or contract issues and commercial or contractual disputes. 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 $18 million and $5 million as of December 31, 2023 and 2022, respectively, for these general legal matters. 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, 2023 and 2022, the amount of surety bonds, bank guarantees, insurance letters of credit and stand-by letters of credit was $729 million and $451 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 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 $4 million as of both December 31, 2023 and 2022, respectively, for environmental matters. It is difficult to estimate the final costs of investigation and remediation due to various factors, including incomplete information regarding particular sites and other potentially responsible parties, uncertainty regarding the extent of investigation or remediation and our share, if any, of liability for such conditions, the selection of alternative remedial approaches, and changes in environmental standards and regulatory requirements. 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 defects and specific non-performance. Warranty expense was $29 million, $24 million, and $27 million for 2023, 2022 and 2021, respectively. The table below provides changes in the combined current and non-current product warranty accruals over each period. (in millions) 2023 2022 2021 Warranty accrual – January 1 $ 54 $ 57 $ 65 Net charges for product warranties in the period 29 24 27 Net Evoqua additions from acquisition 10 — — Settlement of warranty claims (32) (25) (32) Foreign currency and other 2 (2) (3) Warranty accrual – December 31 $ 63 $ 54 $ 57 |
Segment and Geographic Data
Segment and Geographic Data | 12 Months Ended |
Dec. 31, 2023 | |
Segment Reporting [Abstract] | |
Segment and Geographic Data | Segment and Geographic Data Our business has four reportable segments: Water Infrastructure, Applied Water, Measurement and Control Solutions and Integrated Solutions and Services. 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 Water Infrastructure segment also includes Applied Product Technologies ("APT") from the Evoqua acquisition. APT provides highly-differentiated and scalable products that can be used stand-alone or as components in integrated solutions to a diverse set of system integrators and end-users. Key offerings include filtration and separation, disinfection, wastewater treatment, and anodes used across municipal, industrial and aquatics markets . 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 and 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 and 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. The Integrated Solutions and Services segment provides tailored services and solutions in collaboration with the customers backed by life‑cycle services including on‑demand water, outsourced water, recycle / reuse, and emergency response service alternatives to improve operational reliability, performance, and environmental compliance. The Integrated Solutions and Services segment's major products include equipment systems for industrial needs (influent water, boiler feed water, ultrahigh purity, process water, wastewater treatment and recycle / reuse), full-scale outsourcing of operations and maintenance, and municipal services, including odor and corrosion control services. 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) 2023 2022 2021 Revenue: Water Infrastructure $ 2,967 $ 2,364 $ 2,247 Applied Water 1,853 1,767 1,613 Measurement and Control Solutions 1,729 1,391 1,335 Integrated Solutions and Services 815 — — Total $ 7,364 $ 5,522 $ 5,195 Operating income: Water Infrastructure $ 419 $ 418 $ 387 Applied Water 310 258 240 Measurement and Control Solutions 113 2 12 Integrated Solutions and Services 8 — — Corporate and other (198) (56) (54) Total operating income 652 622 585 Interest expense 49 50 76 U.K. pension settlement expense — 140 — Other non-operating income, net 33 7 — Gain/(loss) on sale of businesses (1) 1 2 Income before taxes $ 635 $ 440 $ 511 Depreciation and amortization: Water Infrastructure $ 110 $ 53 $ 51 Applied Water 21 19 22 Measurement and Control Solutions 139 137 145 Integrated Solutions and Services 130 — — Regional selling locations (a) 25 19 20 Corporate and other 11 8 7 Total $ 436 $ 236 $ 245 Capital expenditures: Water Infrastructure $ 83 $ 71 $ 74 Applied Water 32 21 22 Measurement and Control Solutions 68 77 79 Integrated Solutions and Services 48 — — Regional selling locations (b) 20 23 25 Corporate and other 20 16 8 Total $ 271 $ 208 $ 208 (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. 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) 2023 2022 2021 United States $ 3,956 $ 2,573 $ 2,280 Western Europe 1,655 1,411 1,414 Emerging Markets 1,182 1,074 1,066 Other 571 464 435 Total $ 7,364 $ 5,522 $ 5,195 Property, Plant & Equipment December 31, (in millions) 2023 2022 2021 United States $ 725 $ 239 $ 251 Western Europe 268 227 231 Emerging Markets 141 133 132 Other 35 31 30 Total $ 1,169 $ 630 $ 644 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent EventsOn December 13, 2023, the Company announced a change to its reportable segments effective January 1, 2024. As a result, for financial statement periods ending after January 1, 2024, the Company will report the financial position and results of operations of its Integrated Solutions and Services segment together with the dewatering business, currently within our Water Infrastructure segment, and the assessment services business, currently within our Measurement and Control Solutions segment, in a new segment that will be referred to as Water Solutions and Services. The Company’s Water Infrastructure reportable segment will no longer include the results of the dewatering business, and the Company’s Measurement and Control Solutions reportable segment will no longer include the results of the assessment services business. The Company's Applied Water reportable segment will remain unchanged. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Pay vs Performance Disclosure | |||
Net income | $ 609 | $ 355 | $ 427 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Dec. 31, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
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. Certain prior year amounts have been conformed to the current year presentation. |
Use of Estimates | Use of 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. As a result of the Evoqua acquisition, we assessed our prior definition of service revenue and redefined service revenue for the combined company as revenue resulting from the satisfaction of performance obligations primarily related to outsourced water services, maintenance, repair, preventive and inspection services, software as a service ("SaaS") subscriptions, and spare parts sales related to these service offerings. 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 pattern of revenue recognition. 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 units and performance share units. Share-based awards issued to members of the Board of Directors include restricted stock units. Compensation costs resulting from share-based payment transactions are recognized primarily at fair value over the requisite service period (typically three years), on a straight-line basis, within selling, general and administrative expenses. The calculated compensation cost is adjusted based on an estimate of awards ultimately expected to vest. The fair value of a non-qualified stock option is determined on the date of grant using a binomial lattice pricing model incorporating multiple and variable assumptions over time, including assumptions such as employee exercise patterns, stock price volatility and changes in dividends. The fair value of restricted stock 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"), Revenue, and adjusted EBITDA performance share units at 100% target is determined using the closing price of our common stock on date of grant. 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 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 involve 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, acceleration of stock based compensation expense due to "double trigger" change in control provisions, 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. 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 the jurisdiction in which we operate and the period over which our deferred tax assets will be recoverable. If 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. 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. The determination of deferred taxes on this amount is not practicable. Tax benefits are recognized for an uncertain tax position when, based on the technical merits of the position 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 are primarily comprised of 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, 2023 and 2022 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 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 Consolidated Balance Sheets. 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. In addition to manufacturing and selling equipment, we also lease 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. Short term 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. The Company also generates revenue through the lease of its water treatment equipment and systems to customers within the Integrated Solutions and Services segment. In certain instances, the Company enters into a contract with a customer but must construct the underlying asset prior to its lease. At the time of contract inception, the Company determines if an arrangement is or contains a lease. These contracts generally contain both lease and non-lease components, including installation, maintenance, and monitoring services of the Company-owned equipment, in addition to sale of certain constructed assets. In situations where arrangements contain multiple elements, contract consideration is allocated based on relative standalone selling price. Lease components associated with underlying assets that have an alternative use are classified as operating leases with revenue recognized over time throughout the lease term. Lease components associated with underlying assets that have no alternative are classified as sales-type leases, with point in time revenue recognition at the on-set of the lease, or classified as financing transactions, with over time revenue recognition at the on-set of the construction of the underlying assets. In order for a component to be separate, the customer would be able to benefit from the right of use of the component separately or with other resources readily available to the customer and the right of the use is not highly dependent or highly interrelated with the other rights to use the other underlying assets or components. |
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. 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. |
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. |
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 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 Consolidated Balance Sheets 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. Changes in the fair value of derivatives designated and that qualify as cash flow hedges of foreign exchange risk are recorded in Other Comprehensive Income (Loss) ("OCI/L") 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 Accumulated Other Comprehensive Loss ("AOCL") is immediately recognized into net income. 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/L. Amounts in AOCL 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. |
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, derivative contracts 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 | Pronouncements Not Yet Adopted In November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2023-07, "Segment Reporting (Topic 280) Improvements to Reportable Segment Disclosures." This guidance requires disclosure information about significant segment expenses. The standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The standard is required to be applied on a retrospective basis to all periods presented in the consolidated financial statements. The Company is currently evaluating the impacts of the guidance on our disclosures in future periods. In December 2023, the FASB issued ASU No. 2023-09, Improvements to Income Tax Disclosures . The ASU is intended to improve income tax disclosure requirements, primarily through additional disclosures about a reporting entity’s effective tax rate reconciliations as well as information on income taxes paid. The standard is effective for fiscal years beginning after December 15, 2024, and interim periods within fiscal years beginning after December 15, 2025, with early adoption permitted. The amendments are required to be applied on a prospective basis, with the option to apply retrospectively to all prior periods presented in the consolidated financial statements. The Company is currently evaluating the method of adoption and the impacts of the guidance on our disclosures in future periods. Recently Adopted Pronouncements In September 2022, the FASB issued ASU 2022-04, " Liabilities-Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations. " This guidance requires disclosure of the key terms of outstanding supplier finance programs and a rollforward of the related obligations. The new standard does not affect the recognition, measurement, or financial statement presentation of supplier finance program obligations. The ASU became effective January 1, 2023, except for the rollforward requirement, which becomes effective January 1, 2024. The disclosures related to our adoption of the standard are included below: The Company facilitates the opportunity for suppliers to participate in voluntary supply chain financing programs with third-party financial institutions. Xylem agrees on commercial terms, including payment terms, with suppliers regardless of program participation. The company does not determine the terms or conditions of the arrangement between suppliers and the third-party financial institutions. Participating suppliers are paid directly by the third-party financial institution. Xylem pays the third-party financial institution the stated amount of confirmed invoices from its designated suppliers at the original invoice amount on the original maturity dates of the invoices, ranging from 45-180 days. Xylem does not pay fees related to these programs. Xylem or the third-party financial institutions may terminate the agreements upon at least 30 days’ notice. As of December 31, 2023, the total outstanding balance under these programs is $176 million presented on our Consolidated Balance Sheets within "Accounts payable." In October 2021, the FASB issued ASU No. 2021-08, “ Business Combinations (Topic 805) - Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. ” This guidance requires an acquirer to apply the guidance in ASC 606, Revenue from Contracts with Customers, to recognize and measure contract assets and contract liabilities in a business combination, rather than using fair value. The ASU is effective for fiscal years beginning after December 15, 2022 and we adopted this guidance as of January 1, 2023. The guidance will be applied prospectively to business combinations after the adoption. The adoption of this guidance did not have a material impact on our financial condition or results of operations. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
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) 2023 2022 Land, buildings and improvements $ 480 $ 360 Machinery and equipment 1,124 896 Equipment held for lease or rental 456 263 Furniture and fixtures 143 124 Construction work in progress 217 106 Other 47 38 Total property, plant and equipment, gross 2,467 1,787 Less accumulated depreciation 1,298 1,157 Total property, plant and equipment, net $ 1,169 $ 630 |
Acquisitions and Divestitures (
Acquisitions and Divestitures (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Business Combinations [Abstract] | |
Purchase Price Allocation | The following table summarizes the preliminary acquisition date fair value of net tangible and intangible assets acquired, net of liabilities assumed from Evoqua: (in millions) Fair Value Cash and cash equivalents $ 143 Receivables (a) 432 Inventories 268 Prepaid and other current assets 78 Assets held for sale 8 Property, plant and equipment, net 508 Goodwill 4,813 Other intangible assets, net 1,772 Other non-current assets 181 Non-current assets held for sale 85 Accounts payable (210) Accrued and other current liabilities (349) Short-term borrowings and current maturities of long-term debt (166) Liabilities held for sale (1) Long-term debt (111) Other non-current accrued liabilities (120) Deferred income tax liabilities (428) Non-current liabilities held for sale (3) Total $ 6,900 (a) Including $322 million of receivables and $110 million of contract assets. |
Summary of Intangible Assets Acquired | The following table summarizes key information underlying identifiable intangible assets related to the Evoqua acquisition: (in millions) Useful Life (in years) Useful Life Weighted Average (in years) Fair Value (in millions) Trademarks 6 6.0 $ 50 Proprietary technology and patents 4 - 9 7.1 123 Customer and distributor relationships 6 - 20 17.9 1,395 Backlog 1 - 10 5.4 120 Permits 8 8.0 70 Software 1 - 13 2.3 14 Total 15.4 $ 1,772 |
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, 2023 and 2022, assuming the acquisition had occurred on January 1, 2022. Year Ended (in millions) 2023 2022 Revenue $ 8,146 $ 7,329 Net income $ 668 $ 256 |
Business Combination, Separately Recognized Transactions | The acquisition-date fair value of the consideration totaled $6,900 million, which consisted of the following: (in millions) Fair Value of Purchase Consideration Xylem Common Stock issued to Evoqua stockholders (58,779,096 shares) $ 6,121 Estimated replacement equity awards 160 Payment of certain Evoqua indebtedness 619 Total $ 6,900 |
Restructuring and Asset Impai_2
Restructuring and Asset Impairment Charges (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Restructuring and Related Activities [Abstract] | |
Components of restructuring and asset impairment charges | The following table presents the components of restructuring expense and asset impairment charges incurred during each of the previous three years: Year Ended December 31, (in millions) 2023 2022 2021 By component: Severance and other charges $ 70 $ 15 $ 10 Asset impairment 3 — 1 Other restructuring charges — — 1 Reversal of restructuring accruals (1) — (6) Total restructuring costs 72 15 6 Asset impairment charges 4 14 1 Total restructuring and asset impairment charges $ 76 $ 29 $ 7 By segment: Water Infrastructure $ 15 $ 6 $ 8 Applied Water 7 4 2 Measurement and Control Solutions 15 19 (3) Integrated Solutions and Services 4 — — Corporate and Other 35 — — |
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, 2023 and 2022: (in millions) 2023 2022 Restructuring accruals - January 1 $ 10 $ 7 Restructuring costs 72 15 Cash payments (30) (11) Asset impairment (3) — Stock based compensation included within AOCL (27) — Foreign currency and other 2 (1) Restructuring accruals - December 31 $ 24 $ 10 By segment: Water Infrastructure $ 3 $ 1 Applied Water 1 — Measurement and Control Solutions 8 3 Integrated Solutions and Services 1 — Regional selling locations (a) 7 4 Corporate and other 4 2 (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 the total costs expected to be incurred, the amount incurred in the period, and the cumulative costs incurred to date for our 2021, 2022 and 2023 restructuring actions: (in millions) Water Infrastructure Applied Water Measurement and Control Solutions Integrated Solutions and Services Corporate Total Actions Commenced in 2023: Total expected costs $ 18 $ 16 $ 12 $ 7 $ 34 $ 87 Costs incurred during 2023 15 6 11 4 35 71 Total expected costs remaining $ 3 $ 10 $ 1 $ 3 $ (1) $ 16 Actions Commenced in 2022: Total expected costs $ 6 $ 5 $ 4 $ — $ — $ 15 Costs incurred during 2022 6 4 4 — — 14 Costs incurred during 2023 — 1 — — — 1 Total expected costs remaining $ — $ — $ — $ — $ — $ — Actions Commenced in 2021: Total expected costs $ 3 $ — $ — $ — $ — $ 3 Costs incurred during 2021 3 — — — — $ 3 Costs incurred during 2022 — — — — — $ — Costs incurred during 2023 — — — — — $ — Total expected costs remaining $ — $ — $ — $ — $ — $ — |
Revenue (Tables)
Revenue (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following table illustrates the sources of revenue: Year Ended December 31, (in millions) 2023 2022 2021 Revenue from contracts with customers $ 6,963 $ 5,294 $ 4,998 Lease Revenue 401 228 197 Total $ 7,364 $ 5,522 $ 5,195 The following table reflects revenue from contracts with customers by application: Year Ended December 31, (in millions) 2023 2022 2021 Water Infrastructure Transport $ 1,889 $ 1,715 $ 1,619 Treatment 795 421 431 Applied Water Building Solutions 1,025 965 877 Industrial Water 828 802 736 Measurement and Control Solutions Water 1,354 1,126 1,055 Energy 375 265 280 Integrated Solutions and Services 697 — — Total $ 6,963 $ 5,294 $ 4,998 The following table reflects revenue from contracts with customers by geographical region: Year Ended December 31, (in millions) 2023 2022 2021 Water Infrastructure United States $ 934 $ 664 $ 556 Western Europe 911 757 753 Emerging Markets (a) 581 495 537 Other 258 220 204 Applied Water United States 970 914 804 Western Europe 401 380 370 Emerging Markets (a) 342 349 324 Other 140 124 115 Measurement and Control Solutions United States 1,122 857 796 Western Europe 290 240 256 Emerging Markets (a) 203 198 189 Other 114 96 94 Integrated Solutions and Services United States 646 — — Western Europe 8 — — Emerging Markets (a) 9 — — Other 34 — — Total $ 6,963 $ 5,294 $ 4,998 (a) Emerging Markets includes results from the following regions: Eastern Europe, the Middle East and Africa, Latin America and Asia Pacific (excluding Japan, Australia and New Zealand, which are presented in "Other") |
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 1/1/2022 $ 125 $ 164 Additions, net 115 137 Revenue recognized from opening balance — (109) Billings transferred to accounts receivable (82) — Other (7) (9) Balance at 1/1/2023 $ 151 $ 183 Opening balance from the acquisition of Evoqua 110 107 Additions, net 121 162 Revenue recognized from opening balance — (128) Billings transferred to accounts receivable (126) — Other 7 (9) Balance at 12/31/2023 $ 263 $ 315 (a) Excludes receivable balances that are disclosed on the Consolidated Balance Sheet s |
Other Non-Operating Income, N_2
Other Non-Operating Income, Net (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
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) 2023 2022 2021 Interest income $ 28 $ 16 $ 7 Income from equity method investments — — 9 Other (expense) income – net 5 (9) (16) Total other non-operating (expense) income, net $ 33 $ 7 $ — |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
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) 2023 2022 2021 Income (loss) components: Domestic $ 123 $ 90 $ 45 Foreign 512 350 466 Total pre-tax income $ 635 $ 440 $ 511 Income tax expense components: Current: Domestic – federal $ (4) $ 77 $ 16 Domestic – state and local 23 16 5 Foreign 86 56 53 Total Current 105 149 74 Deferred: Domestic – federal $ (49) $ (43) $ (2) Domestic – state and local (8) (12) — Foreign (22) (9) 12 Total Deferred (79) (64) 10 Total income tax provision $ 26 $ 85 $ 84 Effective income tax rate 4.1 % 19.2 % 16.3 % |
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, 2023 2022 2021 Tax provision at U.S. statutory rate 21.0 % 21.0 % 21.0 % Increase (decrease) in tax rate resulting from: State income taxes 1.7 1.2 0.8 Uncertain tax positions (9.9) (1.2) (0.1) Net interest deductions — (1.8) (2.4) U.S. tax on foreign earnings 2.5 2.7 2.2 Tax incentives (2.6) (4.4) (5.5) Valuation allowance (5.8) 0.1 0.9 Rate change (2.0) (0.6) 0.9 Federal R&D tax credit (0.5) (0.7) (0.7) Stock compensation (0.6) 0.1 (0.6) U.S. foreign derived intangible income tax benefit (0.7) (1.3) (0.6) Tax on distribution of foreign earnings — 2.4 (0.2) Non-deductible compensation 1.2 0.7 0.5 Other tax credits (1.8) — — Other – net 1.6 1.0 0.1 Effective income tax rate 4.1 % 19.2 % 16.3 % |
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) 2023 2022 Deferred tax assets: Employee benefits $ 79 $ 58 Accrued expenses 49 36 Loss and other tax credit carryforwards 241 245 R&D capitalization 40 32 Inventory 5 5 Lease Liabilities 79 68 Hedging instruments 8 — Other 12 7 513 451 Valuation allowance (179) (204) Net deferred tax asset $ 334 $ 247 Deferred tax liabilities: Intangibles $ 500 $ 155 Investment in foreign subsidiaries 11 5 Property, plant and equipment 131 65 Lease right-of-use assets 78 67 Hedging Instruments — 20 Other — 11 Total deferred tax liabilities $ 720 $ 323 |
Reconciliation of Deferred Tax Asset Valuation Allowance | A reconciliation of the change in valuation allowance on deferred tax assets is as follows: (in millions) 2023 2022 2021 Valuation allowance — January 1 $ 204 $ 201 $ 217 Change in assessment (a) (47) 1 — Current year operations 12 3 4 Other comprehensive income 1 — (4) Foreign currency and other (b) 5 (1) (16) Acquisitions 4 — — Valuation allowance — December 31 $ 179 $ 204 $ 201 (a) Decrease in valuation allowance in 2023 is primarily attributable to changes in realization on deferred tax assets in various foreign jurisdictions. (b) Decrease in valuation allowance in 2021 is primarily attributable to foreign exchange movement impacting foreign balances. |
Deferred taxes classification | Deferred taxes are classified in the Consolidated Balance Sheets as follows: December 31, (in millions) 2023 2022 Non-current assets $ 171 $ 146 Non-current liabilities (557) (222) Total net deferred tax liabilities $ (386) $ (76) |
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, 2023 First Year of Expiration U.S. net operating loss $ 4 December 31, 2025 State net operating loss 88 December 31, 2026 U.S. tax credits 12 December 31, 2032 State excess interest expense 21 Indefinite State tax credits — Indefinite Foreign net operating loss 901 December 31, 2024 Foreign tax credits 5 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) 2023 2022 2021 Unrecognized tax benefits — January 1 $ 102 $ 111 $ 114 Gross Increases - Current year tax positions 2 — — Gross Increases - Prior year tax positions 4 3 — Gross Decreases - Prior year tax positions (75) (8) (1) Acquisitions 2 — — Settlements — (1) — Lapse of Statute of Limitations — (2) (1) Currency Translation Adjustment — (1) (1) Unrecognized tax benefits — December 31 $ 35 $ 102 $ 111 |
Earliest open tax years by major jurisdiction | The following table summarizes our earliest open tax years by major jurisdiction: Jurisdiction Earliest Open Year Italy 2017 Luxembourg 2019 Sweden 2013 Germany 2016 United Kingdom 2016 United States 2017 Switzerland 2019 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
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, 2023 2022 2021 Net income (in millions) $ 609 $ 355 $ 427 Shares (in thousands): Weighted average common shares outstanding 216,982 180,189 180,225 Add: Participating securities (a) 30 28 22 Weighted average common shares outstanding — Basic 217,012 180,217 180,247 Plus incremental shares from assumed conversions: (b) Dilutive effect of stock options 768 549 871 Dilutive effect of restricted stock units and performance share units 400 213 408 Weighted average common shares outstanding — Diluted 218,180 180,979 181,526 Basic earnings per share $ 2.81 $ 1.97 $ 2.37 Diluted earnings per share $ 2.79 $ 1.96 $ 2.35 (a) Restricted stock units 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. |
Incremental shares from stock options and restricted stock | Year Ended December 31, (in thousands) 2023 2022 2021 Stock options 1,703 1,453 1,132 Restricted stock units 566 353 271 Performance share units 289 284 330 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Inventory Disclosure [Abstract] | |
Inventories | The components of total inventories are summarized as follows: December 31, (in millions) 2023 2022 Finished goods $ 355 $ 286 Work in process 102 58 Raw materials 561 455 Total inventories $ 1,018 $ 799 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
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) 2023 2022 Land, buildings and improvements $ 480 $ 360 Machinery and equipment 1,124 896 Equipment held for lease or rental 456 263 Furniture and fixtures 143 124 Construction work in progress 217 106 Other 47 38 Total property, plant and equipment, gross 2,467 1,787 Less accumulated depreciation 1,298 1,157 Total property, plant and equipment, net $ 1,169 $ 630 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
Lease, Cost | Year Ended December 31, (in millions) 2023 2022 2021 Lease cost Finance lease cost: Depreciation of ROU assets $ 16 $ 3 $ 1 Interest on lease liabilities 2 1 — Operating lease cost 96 83 84 Short-term lease cost 4 2 2 Variable lease cost 23 21 23 Total lease cost $ 141 $ 110 $ 110 |
Assets and Liabilities, Leases | The supplemental cash flow information related to leases are as follows: Year Ended December 31, (in millions) 2023 2022 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from finance leases $ 2 $ — $ — Operating cash flows from operating leases $ 92 $ 82 $ 83 Financing cash flows from finance leases $ 14 $ 3 $ 1 Right-of-use assets obtained in exchange for lease obligations: Finance leases $ 34 $ 24 $ 5 Operating leases $ 74 $ 94 $ 109 Information relating to the lease term and discount rate are as follows: Year Ended December 31, 2023 2022 Weighted-average remaining lease term (years) Operating leases 6 Years 7 Years Finance leases 5 Years 7 Years Weighted-average discount rate Operating leases 3.2% 2.3% Finance leases 4.2% 2.7% |
Lessee, Operating Lease, Liability, Maturity | As of December 31, 2023, the maturities of operating lease liabilities were as follows: (in millions) 2024 $ 89 2025 78 2026 63 2027 49 2028 37 Thereafter 68 Total lease payments 384 Less: Imputed interest (30) Total $ 354 |
Finance Lease, Liability, to be Paid, Maturity | As of December 31, 2023, the maturities of finance lease liabilities were as follows: (in millions) 2024 $ 22 2025 23 2026 19 2027 14 2028 8 Thereafter 8 Total lease payments 94 Less: Imputed interest (8) Total $ 86 |
Operating Lease, Lease Income | The components of our lease revenue are as follows: Year Ended December 31, (in millions) 2023 2022 2021 Lease revenue: operating leases $395 $228 $197 Lease revenue: sales-type leases 6 — — Total lease revenue $401 $228 $197 |
Sales-type Lease, Lease Income | The components of our lease revenue are as follows: Year Ended December 31, (in millions) 2023 2022 2021 Lease revenue: operating leases $395 $228 $197 Lease revenue: sales-type leases 6 — — Total lease revenue $401 $228 $197 |
Lessor, Operating Lease, Payment to be Received, Maturity | As of December 31, 2023, future minimum lease payments under operating leases are as follows: (in millions) 2024 $ 122 2025 74 2026 59 2027 50 2028 34 Thereafter 172 Future minimum lease payments $ 511 |
Sales-Type and Direct Financing Leases, Payment to be Received, Maturity | As of December 31, 2023, maturities of sales type lease receivables are as follows: (in millions) 2024 $ 5 2025 5 2026 5 2027 5 2028 4 Thereafter 38 Future minimum lease payments $ 62 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
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, 2023 and 2022 are as follows: (in millions) Water Applied Water Measurement and Control Solutions Integrated Solutions and Services Total Balance as of December 31, 2021 $ 656 $ 515 $ 1,621 $ — $ 2,792 Activity in 2022 Foreign currency and other (18) (13) (42) — (73) Balance as of December 31, 2022 $ 638 $ 502 $ 1,579 $ — $ 2,719 Activity in 2023 Acquisitions 1,779 385 141 2,508 4,813 Foreign currency and other 17 8 19 11 55 Balance as of December 31, 2023 $ 2,434 $ 895 $ 1,739 $ 2,519 $ 7,587 |
Schedule of Intangible Assets and Goodwill | Information regarding our other intangible assets is as follows: December 31, 2023 December 31, 2022 (in millions) Carrying Accumulated Net Carrying Accumulated Net Customer and distributor relationships $ 2,172 $ (475) $ 1,697 $ 784 $ (371) $ 413 Proprietary technology and patents 292 (141) 151 165 (118) 47 Trademarks 188 (96) 92 137 (80) 57 Software 598 (335) 263 514 (268) 246 Other 201 (41) 160 5 (3) 2 Indefinite-lived intangibles 166 — 166 165 — 165 Other intangibles $ 3,617 $ (1,088) $ 2,529 $ 1,770 $ (840) $ 930 |
Estimated Amortization Expense | Estimated amortization expense for each of the five succeeding years is as follows: (in millions) 2024 $ 312 2025 282 2026 252 2027 226 2028 206 |
Accrued and Other Current Lia_2
Accrued and Other Current Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Payables and Accruals [Abstract] | |
Accrued and Other Current Liabilities | December 31, (in millions) 2023 2022 Compensation and other employee-benefits $ 403 $ 285 Customer-related liabilities 370 210 Accrued taxes 170 186 Lease liabilities 106 69 Accrued warranty costs 45 37 Other accrued liabilities 127 80 Total accrued and other current liabilities $ 1,221 $ 867 |
Credit Facilities and Long-Te_2
Credit Facilities and Long-Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Credit Facilities and Long-Term Debt | Total debt outstanding is summarized as follows: December 31, (in millions) 2023 2022 3.250% Senior Notes due 2026 (a) 500 500 1.950% Senior Notes due 2028 (a) 500 500 2.250% Senior Notes due 2031 (a) 500 500 4.375% Senior Notes due 2046 (a) 400 400 Equipment Financing due 2024 to 2032 123 — Term loan 278 — Debt issuance costs and unamortized discount (b) (17) (20) Total debt $ 2,284 $ 1,880 Less: short-term borrowings and current maturities of long-term debt 16 — Total long-term debt $ 2,268 $ 1,880 (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 2026 was $482 million and $470 million as of December 31, 2023 and 2022, respectively. The fair value of our Senior Notes due 2028 was $453 million and $430 million as of December 31, 2023 and 2022 respectively. The fair value of our Senior Notes due 2031 was $429 million and $406 million as of December 31, 2023 and 2022 respectively. The fair value of our Senior Notes due 2046 was $349 million and $333 million as of December 31, 2023 and 2022, respectively. (b) 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. |
Schedule of Debt | During the year ended December 31, 2023, the Company entered into the following equipment financings: Date entered Due Interest Rate at December 31, 2023 Principal Amount December 20, 2023 July 31, 2032 6.320 % 2 |
Schedule of Other Assets | As of December 31, 2023, the gross and net amounts of those assets are included on the Consolidated Balance Sheets as follows: December 31, 2023 (in millions) Gross Net Property, plant, and equipment, net $ 75 $ 71 Receivables, net 1 1 Prepaid and other current assets 5 5 Other non-current assets 58 57 $ 139 $ 134 |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
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) 2023 2022 2021 Derivatives in Cash Flow Hedges Foreign Exchange Contracts Amount of gain (loss) recognized in OCI/L $ (2) $ (24) $ (10) Amount of loss reclassified from OCI/L into revenue 3 19 4 Amount of loss reclassified from OCI/L into cost of revenue 4 2 — Derivatives in Net Investment Hedges Cross-Currency Swaps Amount of (loss) gain recognized in OCI/L $ (121) $ 94 $ 94 Amount of income recognized in Interest Expense 30 29 21 Foreign Currency Denominated Debt Amount of (loss) gain recognized in OCI/L $ — $ 31 $ 48 Fair Value Hedges Foreign Exchange Contracts Amount of (loss) recognized in Selling, general and administrative expenses $ — $ (7) $ — Amount recognized in Interest expense — (3) — |
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) 2023 2022 Derivatives designated as hedging instruments Assets Net Investment Hedges Other non-current assets $ 9 $ 79 Liabilities Net Investment Hedges Other non-current liabilities (54) (6) |
Postretirement Benefit Plans (T
Postretirement Benefit Plans (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
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 2023 $ 74 2022 53 2021 60 |
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 AOCL: (in millions) December 31, 2023 December 31, 2022 Pension Other Total Pension Other Total Fair value of plan assets $ 296 $ — $ 296 $ 246 $ — $ 246 Projected benefit obligation (582) (31) (613) (482) (31) (513) Funded status $ (286) $ (31) $ (317) $ (236) $ (31) $ (267) Amounts recognized in the Consolidated Balance Sheets Other non-current assets $ 43 $ — $ 43 $ 34 $ — $ 34 Accrued and other current liabilities (13) (3) (16) (12) (3) (15) Accrued post-retirement benefit obligations (316) (28) (344) (258) (28) (286) Net amount recognized $ (286) $ (31) $ (317) $ (236) $ (31) $ (267) Accumulated other comprehensive loss: Net actuarial losses $ (88) $ (7) $ (95) $ (50) $ (6) $ (56) Prior service credit (2) 2 — (1) 4 3 Total $ (90) $ (5) $ (95) $ (51) $ (2) $ (53) |
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) 2023 2022 2021 Domestic defined benefit pension plans: Service cost $ 2 $ 3 $ 3 Interest cost 5 3 3 Expected return on plan assets (6) (6) (7) Amortization of net actuarial loss — 3 4 Net periodic benefit cost $ 1 $ 3 $ 3 International defined benefit pension plans: Service cost $ 7 $ 12 $ 14 Interest cost 16 13 11 Expected return on plan assets (11) (13) (14) Amortization of net actuarial (gain) loss (2) 10 17 U.K. pension settlement expense — 140 — Net periodic benefit cost $ 10 $ 162 $ 28 Total net periodic benefit cost $ 11 $ 165 $ 31 The components of net periodic benefit cost for other post-retirement employee benefit plans are as follows: Year Ended December 31, (in millions) 2023 2022 2021 Interest cost 2 1 1 Amortization of prior service credit (2) (2) (2) Amortization of net actuarial loss — 1 2 Net periodic benefit cost $ — $ — $ 1 |
Schedule of Changes in Accumulated Postemployment Benefit Obligations | Other changes in benefit obligations recognized in other comprehensive income (loss), as they pertain to other post-retirement employee benefit plans are as follows: Year Ended December 31, (in millions) 2023 2022 2021 Net loss (gain) $ 1 $ (9) $ — Prior service credit — — — Amortization of prior service credit 2 2 3 Amortization of net actuarial loss — (1) (2) Losses (gains) recognized in other comprehensive income (loss) $ 3 $ (8) $ 1 Total losses (gains) recognized in comprehensive income $ 3 $ (8) $ 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) 2023 2022 2023 2022 Change in benefit obligation: Benefit obligation at beginning of year $ 92 $ 117 $ 390 $ 926 Service cost 2 3 7 12 Interest cost 5 3 16 13 Benefits paid (8) (7) (18) (29) Actuarial loss (gain) (a) 6 (24) 36 (241) Plan amendments, settlements and curtailments (b) 2 — (2) (202) Acquisitions — — 31 — Foreign currency translation and other — — 23 (89) Benefit obligation at end of year $ 99 $ 92 $ 483 $ 390 Change in plan assets: Fair value of plan assets at beginning of year $ 80 $ 108 $ 166 $ 571 Employer contributions 5 — 17 16 Actual return on plan assets 9 (21) 16 (133) Benefits paid (8) (7) (18) (29) Plan amendments, settlements and curtailments — — (1) (202) Acquisitions — — 22 — Foreign currency translation and other — — 8 (57) Fair value of plan assets at end of year $ 86 $ 80 $ 210 $ 166 Unfunded status of the plans $ (13) $ (12) $ (273) $ (224) (a) Actuarial losses for our qualified defined benefit pension plans in 2023 primarily reflect a decrease in the discount rate in 2023 as compared to 2022, which increased benefit obligations. (b) Qualified defined benefit pension plan settlements in 2022 predominantly related to the transfer of gross benefit obligations and related plan assets to an insurance company upon completion of the U.K. pension buy-out as described above. |
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) 2023 2022 Change in benefit obligation: Benefit obligation at beginning of year $ 31 $ 42 Interest cost 2 1 Benefits paid (3) (3) Actuarial gain 1 (9) Benefit obligation at the end of year $ 31 $ 31 |
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) 2023 2022 Projected benefit obligation $ 474 $ 391 Accumulated benefit obligation 448 372 Fair value of plan assets 146 121 |
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 income (loss), as they pertain to our defined benefit pension plans are as follows: Year Ended December 31, (in millions) 2023 2022 2021 Domestic defined benefit pension plans: Net (gain) loss $ 3 $ 3 $ — Amortization of net actuarial gain (loss) — (3) (4) (Gains) losses recognized in other comprehensive income (loss) $ 3 $ — $ (4) International defined benefit pension plans: Net (gain) loss $ 31 $ (95) $ (51) Amortization of net actuarial gain (loss) 2 (8) (17) U.K. pension settlement expense — (137) — Foreign Exchange 2 (39) (11) (Gains) losses recognized in other comprehensive income (loss) $ 35 $ (279) $ (79) Total (gains) losses recognized in other comprehensive income (loss) $ 38 $ (279) $ (83) Total (gains) losses recognized in comprehensive income $ 49 $ (114) $ (52) |
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. 2023 2022 2021 U.S. Int’l U.S. Int’l U.S. Int’l Benefit Obligation Assumptions Discount rate 5.00 % 3.55 % 5.25 % 4.13 % 3.00 % 1.55 % Rate of future compensation increase NM 2.87 % NM 2.79 % NM 2.84 % Net Periodic Benefit Cost Assumptions Discount rate 5.25 % 4.13 % 3.00 % 1.55 % 2.50 % 1.06 % Expected long-term return on plan assets 6.00 % 5.85 % 5.50 % 2.79 % 6.50 % 2.60 % Rate of future compensation increase NM 2.79 % NM 2.84 % NM 2.79 % 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. |
Allocation of plan assets | The following table provides the actual asset allocations of plan assets as of December 31, 2023 and 2022, and the related asset target allocation ranges by asset category: 2023 2022 Target Equity securities 43.9 % 47.1 % 35-75% Fixed income 42.9 % 43.9 % 45-60% Cash, insurance contracts and other 13.2 % 9.0 % 0-15% The following table provides the fair value of plan assets held by our pension benefit plans by asset class: 2023 2022 (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 $ 43 $ 56 $ — $ 13 $ 112 $ 37 $ 51 $ — $ 9 $ 97 Diversified growth and income funds — — — 18 18 — — — 19 19 Fixed income Corporate bonds 1 64 — 12 77 1 67 — 5 73 Government bonds — 22 — 23 45 — 13 — 18 31 Hedging instruments — 5 — — 5 — 4 — — 4 Insurance contracts and other — — 26 6 32 — — 20 — 20 Cash and cash equivalents 7 — — — 7 2 — — — 2 Total plan assets subject to leveling $ 51 $ 147 $ 26 $ 72 $ 296 $ 40 $ 135 $ 20 $ 51 $ 246 |
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, 2021 $ 368 Purchases, sales, settlements, net (210) Actual return on plan assets (99) Currency impact (39) Balance, December 31, 2022 20 Purchases, sales, settlements, net 5 Actual return on plan assets — Currency impact 1 Balance, December 31, 2023 $ 26 |
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 2024 $ 30 $ 3 2025 30 3 2026 31 3 2027 32 3 2028 33 3 Years 2029 - 2033 166 11 |
Share-Based Compensation Plans
Share-Based Compensation Plans (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
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 2023 (granted amounts include options issued in conjunction with the Evoqua acquisition): Share units (in thousands) Weighted Weighted Average Aggregate Intrinsic Value (in millions) Outstanding at January 1, 2023 1,935 $ 67.55 5.9 Granted 2,153 38.13 Exercised (1,930) 32.40 Forfeited and expired (31) 85.46 Other 23 73.16 Outstanding at December 31, 2023 2,150 $ 69.34 5.9 $ 97 Options exercisable at December 31, 2023 1,577 $ 62.39 5.0 $ 82 Vested and non-vested expected to vest as of December 31, 2023 2,107 $ 68.82 5.6 $ 96 |
Weighted-average assumptions | The following are weighted-average assumptions used for 2023, 2022, and 2021 (excluding the valuation of options granted in conjunction with the Evoqua acquisition): 2023 2022 2021 Dividend yield 1.31 % 1.37 % 1.10 % Volatility 27.30 % 26.25 % 26.29 % Risk-free interest rate 4.25 % 1.74 % 0.86 % Expected term (in years) 5.4 5.6 5.7 Weighted-average fair value per option $ 29.06 $ 20.38 $ 23.26 |
Summary of restricted stock activity | restricted stock units for 2023 (granted amounts include options issued in conjunction with the Evoqua acquisition): Share Units (in thousands) Weighted Average Outstanding at January 1, 2023 553 $ 88.88 Granted 1,049 103.08 Vested (699) 38.29 Forfeited (41) 51.52 Outstanding at December 31, 2023 862 $ 98.49 |
Schedule of Share-based Compensation, Performance-Based Units Award Activity | The following is a summary of the changes in outstanding ROIC and EBITDA performance share units for 2023: Share units (in thousands) Weighted Average Outstanding at January 1, 2023 146 $ 88.78 Granted 36 100.69 Forfeited (a) (68) 82.40 Outstanding at December 31, 2023 114 $ 97.70 (a) Includes adjusted ROIC performance share unit awards forfeited during the period as a result of the final performance condition not being achieved on vest date. Revenue Performance Share Unit Grants The fair value of the Revenue performance share unit awards is determined using the closing price of our common stock on date of grant. The following is a summary of our Revenue performance share unit grants for 2023: Share units (in thousands) Weighted Outstanding at January 1, 2023 32 $ 86.77 Granted 36 100.69 Forfeited (2) 91.12 Outstanding at December 31, 2023 66 $ 94.19 TSR Performance Share Unit Grants The following is a summary of the changes in outstanding TSR performance share units for 2023: Share units (in thousands) Weighted Average Outstanding at January 1, 2023 178 $ 100.67 Granted 72 108.54 Adjustment for Market Condition Achieved (a) 40 102.55 Vested (102) 102.55 Forfeited (8) 100.99 Outstanding at December 31, 2023 180 $ 103.52 |
Fair value assumptions for performance-based awards | The following are weighted-average key assumptions for 2023 grants. 2023 2022 2021 Volatility 35.9 % 33.3 % 33.5 % Risk-free interest rate 4.66 % 1.44 % 0.24 % |
Capital Stock (Tables)
Capital Stock (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
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) 2023 2022 2021 Beginning Balance, January 1 180,253 180,392 180,354 Shares issued for the Evoqua acquisition (a) 58,779 — — Stock incentive plan net activity 2,730 437 716 Repurchase of common stock (258) (576) (678) Ending Balance, December 31 241,504 180,253 180,392 (a) See Note 3. "Acquisitions and Divestitures" of our consolidated financial statements for further information. |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Accumulated Other Comprehensive Income [Abstract] | |
Components of Accumulated Other Comprehensive Loss | The following table provides the components of accumulated other comprehensive loss for 2023, 2022 and 2021: (in millions) Foreign Currency Translation Post-retirement Benefit Plans Derivative Instruments Total Balance at January 1, 2021 $ (86) $ (330) $ 3 $ (413) Foreign currency translation adjustment 20 20 Income tax impact on foreign currency translation adjustment (35) (35) Changes in post-retirement benefit plans 51 51 Foreign currency translation adjustment for post-retirement benefit plans 11 11 Income tax expense on changes in post-retirement benefit plans, including settlement (15) (15) Amortization of prior service cost and net actuarial loss on post-retirement benefit plans into other non-operating income (expense), net 20 20 Income tax impact on amortization of post-retirement benefit plan items (5) (5) Unrealized loss on derivative hedge agreements (10) (10) Reclassification of unrealized loss on foreign exchange agreements into revenue 1 1 Reclassification of unrealized (gain) loss on foreign exchange agreements into cost of revenue 4 4 Balance at December 31, 2021 $ (101) $ (268) $ (2) $ (371) Foreign currency translation adjustment (53) (53) Income tax impact on foreign currency translation adjustment (26) (26) Changes in post-retirement benefit plans 101 101 U.K. pension settlement 137 137 Foreign currency translation adjustment for post-retirement benefit plans 39 39 Income tax expense on changes in post-retirement benefit plans (58) (58) Amortization of prior service cost and net actuarial loss on post-retirement benefit plans into other non-operating income (expense), net 10 10 Income tax impact on amortization of post-retirement benefit plan items (2) (2) Unrealized loss on derivative hedge agreements (24) (24) Tax on unrealized loss on derivative hedge agreements — — Reclassification of unrealized loss on foreign exchange agreements into revenue 19 19 Reclassification of unrealized loss on foreign exchange agreements into cost of revenue 2 2 (in millions) Foreign Currency Translation Post-retirement Benefit Plans Derivative Instruments Total Balance at December 31, 2022 $ (180) $ (41) $ (5) $ (226) Foreign currency translation adjustment (45) (45) Income tax impact on foreign currency translation adjustment 29 29 Changes in post-retirement benefit plans (35) (35) Foreign currency translation adjustment for post-retirement benefit plans (2) (2) Income tax expense on changes in post-retirement benefit plans, including settlement 9 9 Amortization of prior service cost and net actuarial gain on post-retirement benefit plans into other non-operating income (expense), net (4) (4) Income tax impact on amortization of post-retirement benefit plan items 1 1 Unrealized loss on derivative hedge agreements (2) (2) Tax on unrealized loss on derivative hedge agreements (1) (1) Reclassification of unrealized loss on foreign exchange agreements into revenue 3 3 Reclassification of unrealized loss on foreign exchange agreements into cost of revenue 4 4 Balance at December 31, 2023 $ (196) $ (72) $ (1) $ (269) |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
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) 2023 2022 2021 Warranty accrual – January 1 $ 54 $ 57 $ 65 Net charges for product warranties in the period 29 24 27 Net Evoqua additions from acquisition 10 — — Settlement of warranty claims (32) (25) (32) Foreign currency and other 2 (2) (3) Warranty accrual – December 31 $ 63 $ 54 $ 57 |
Segment and Geographic Data (Ta
Segment and Geographic Data (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
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) 2023 2022 2021 Revenue: Water Infrastructure $ 2,967 $ 2,364 $ 2,247 Applied Water 1,853 1,767 1,613 Measurement and Control Solutions 1,729 1,391 1,335 Integrated Solutions and Services 815 — — Total $ 7,364 $ 5,522 $ 5,195 Operating income: Water Infrastructure $ 419 $ 418 $ 387 Applied Water 310 258 240 Measurement and Control Solutions 113 2 12 Integrated Solutions and Services 8 — — Corporate and other (198) (56) (54) Total operating income 652 622 585 Interest expense 49 50 76 U.K. pension settlement expense — 140 — Other non-operating income, net 33 7 — Gain/(loss) on sale of businesses (1) 1 2 Income before taxes $ 635 $ 440 $ 511 Depreciation and amortization: Water Infrastructure $ 110 $ 53 $ 51 Applied Water 21 19 22 Measurement and Control Solutions 139 137 145 Integrated Solutions and Services 130 — — Regional selling locations (a) 25 19 20 Corporate and other 11 8 7 Total $ 436 $ 236 $ 245 Capital expenditures: Water Infrastructure $ 83 $ 71 $ 74 Applied Water 32 21 22 Measurement and Control Solutions 68 77 79 Integrated Solutions and Services 48 — — Regional selling locations (b) 20 23 25 Corporate and other 20 16 8 Total $ 271 $ 208 $ 208 (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. |
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) 2023 2022 2021 United States $ 3,956 $ 2,573 $ 2,280 Western Europe 1,655 1,411 1,414 Emerging Markets 1,182 1,074 1,066 Other 571 464 435 Total $ 7,364 $ 5,522 $ 5,195 Property, Plant & Equipment December 31, (in millions) 2023 2022 2021 United States $ 725 $ 239 $ 251 Western Europe 268 227 231 Emerging Markets 141 133 132 Other 35 31 30 Total $ 1,169 $ 630 $ 644 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Property, Plant and Equipment, Useful Lives) (Details) | Dec. 31, 2023 |
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, 2023 USD ($) Segment | Dec. 31, 2022 USD ($) | |
Operating segments | Segment | 4 | |
Requisite service period | 3 years | |
ROIC Performance Share Unit Grants | ||
Performance-based share grants, percent of target on date of grant | 100% | |
Minimum | ||
Intangible assets estimated economic useful lives | 1 year | |
Maximum | ||
Intangible assets estimated economic useful lives | 25 years | |
Foreign Currency | ||
Cash | $ | $ 955 | $ 813 |
Recently Issued Accounting Stan
Recently Issued Accounting Standards (Details Textual) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Total | $ 354 | ||
Right of use asset | 348 | $ 285 | |
Operating Income (Loss) | $ 652 | $ 622 | $ 585 |
Purchase Obligation, Supplier Finance Program, Termination Notice Required | 30 days | ||
Purchase Obligation | $ 176 | ||
Maximum | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Purchase Obligation, Supplier Finance Program, Payment Terms Of Invoice | 180 days | ||
Minimum | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Purchase Obligation, Supplier Finance Program, Payment Terms Of Invoice | 45 days |
Acquisitions and Divestitures_2
Acquisitions and Divestitures (Details Textual) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||||
Jun. 15, 2023 | May 24, 2023 | Sep. 30, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Business Acquisition [Line Items] | ||||||
Goodwill | $ 7,587 | $ 2,719 | $ 2,792 | |||
Proceeds from sale of businesses | 105 | $ 1 | $ 10 | |||
Disposal Group, Not Discontinued Operations | Evoqua Hemodialysis Concentrates Business | ||||||
Business Acquisition [Line Items] | ||||||
Proceeds from sale of businesses | $ 12 | |||||
Disposal Group, Not Discontinued Operations | Evoqua Carbon Reactivation And Slurry Operations | ||||||
Business Acquisition [Line Items] | ||||||
Proceeds from sale of businesses | $ 91 | |||||
Evoqua Acquisition | ||||||
Business Acquisition [Line Items] | ||||||
Business Acquisition, Percentage of Voting Interests Acquired | 100% | |||||
Business Combination, Consideration Transferred, Equity Interests Issued and Issuable, Entity Shares Issued Per Acquiree Share | 0.48 | |||||
Xylem Common Stock issued to Evoqua stockholders (58,779,096 shares) | $ 6,121 | |||||
Estimated replacement equity awards | 160 | |||||
Payment of certain Evoqua indebtedness | 619 | |||||
Acquisition costs | 57 | |||||
Business Combination, Provisional Information, Initial Accounting Incomplete, Adjustment, Intangibles | 535 | |||||
Business Combination, Provisional Information, Initial Accounting Incomplete, Adjustment, Deferred Tax Liabilities | 123 | |||||
Goodwill, Purchase Accounting Adjustments | 449 | |||||
Business Combination, Provisional Information, Initial Accounting Incomplete, Adjustment, Amortization | 5 | |||||
Accounts Receivable, after Allowance for Credit Loss | 322 | |||||
Accounts Receivable, before Allowance for Credit Loss | 329 | |||||
Accounts Receivable, Allowance for Credit Loss | 7 | |||||
Revenue | 1,177 | |||||
Net income | 66 | |||||
Goodwill | 4,813 | |||||
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount | $ 56 | |||||
Evoqua Acquisition | Equity Option | ||||||
Business Acquisition [Line Items] | ||||||
Stock Issued During Period, Shares, Acquisitions | 2,000,000 | |||||
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount | $ 1 | |||||
Evoqua Acquisition | Stock Appreciation Rights (SARs) | ||||||
Business Acquisition [Line Items] | ||||||
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition | 2 years | |||||
Evoqua Acquisition | Legacy Evoqua Stockholders | ||||||
Business Acquisition [Line Items] | ||||||
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | 25% | |||||
Evoqua Acquisition | Legacy Xylem Stockholders | ||||||
Business Acquisition [Line Items] | ||||||
Subsidiary, Ownership Percentage, Parent | 75% |
Acquisitions and Divestitures_3
Acquisitions and Divestitures (Preliminary allocation of Consideration Paid) (Details) - Evoqua Acquisition $ in Millions | May 24, 2023 USD ($) |
Business Acquisition [Line Items] | |
Xylem Common Stock issued to Evoqua stockholders (58,779,096 shares) | $ 6,121 |
Estimated replacement equity awards | 160 |
Payment of certain Evoqua indebtedness | 619 |
Total | $ 6,900 |
Acquisitions and Divestitures_4
Acquisitions and Divestitures (Summary of Assets Acquired and Liabilities Assumed) (Details) - USD ($) $ in Millions | Dec. 31, 2023 | May 24, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 7,587 | $ 2,719 | $ 2,792 | |
Evoqua Acquisition | ||||
Business Acquisition [Line Items] | ||||
Cash and cash equivalents | $ 143 | |||
Receivables | 432 | |||
Inventories | 268 | |||
Prepaid and other current assets | 78 | |||
Assets held for sale | 8 | |||
Property, plant and equipment, net | 508 | |||
Goodwill | 4,813 | |||
Other intangible assets, net | 1,772 | |||
Other non-current assets | 181 | |||
Non-current assets held for sale | 85 | |||
Accounts payable | (210) | |||
Accrued and other current liabilities | (349) | |||
Short-term borrowings and current maturities of long-term debt | (166) | |||
Liabilities held for sale | (1) | |||
Long-term debt | (111) | |||
Other non-current accrued liabilities | (120) | |||
Deferred income tax liabilities | (428) | |||
Non-current liabilities held for sale | (3) | |||
Total identifiable net assets | 6,900 | |||
Accounts Receivable, after Allowance for Credit Loss | 322 | |||
Contract assets | $ 110 |
Acquisitions and Divestitures_5
Acquisitions and Divestitures (Summary of Intangible Assets Acquired) (Details) - Evoqua Acquisition $ in Millions | May 24, 2023 USD ($) |
Business Acquisition [Line Items] | |
Useful Life Weighted Average (in years) | 15 years 4 months 24 days |
Fair Value (in millions) | $ 1,772 |
Trademarks | |
Business Acquisition [Line Items] | |
Useful Life (in years) | 6 years |
Useful Life Weighted Average (in years) | 6 years |
Fair Value (in millions) | $ 50 |
Proprietary technology and patents | |
Business Acquisition [Line Items] | |
Useful Life Weighted Average (in years) | 7 years 1 month 6 days |
Fair Value (in millions) | $ 123 |
Customer and distributor relationships | |
Business Acquisition [Line Items] | |
Useful Life Weighted Average (in years) | 17 years 10 months 24 days |
Fair Value (in millions) | $ 1,395 |
Backlog | |
Business Acquisition [Line Items] | |
Useful Life Weighted Average (in years) | 5 years 4 months 24 days |
Fair Value (in millions) | $ 120 |
Permits | |
Business Acquisition [Line Items] | |
Useful Life (in years) | 8 years |
Useful Life Weighted Average (in years) | 8 years |
Fair Value (in millions) | $ 70 |
Software | |
Business Acquisition [Line Items] | |
Useful Life Weighted Average (in years) | 2 years 3 months 18 days |
Fair Value (in millions) | $ 14 |
Minimum | Proprietary technology and patents | |
Business Acquisition [Line Items] | |
Useful Life (in years) | 4 years |
Minimum | Customer and distributor relationships | |
Business Acquisition [Line Items] | |
Useful Life (in years) | 6 years |
Minimum | Backlog | |
Business Acquisition [Line Items] | |
Useful Life (in years) | 1 year |
Minimum | Software | |
Business Acquisition [Line Items] | |
Useful Life (in years) | 1 year |
Maximum | Proprietary technology and patents | |
Business Acquisition [Line Items] | |
Useful Life (in years) | 9 years |
Maximum | Customer and distributor relationships | |
Business Acquisition [Line Items] | |
Useful Life (in years) | 20 years |
Maximum | Backlog | |
Business Acquisition [Line Items] | |
Useful Life (in years) | 10 years |
Maximum | Software | |
Business Acquisition [Line Items] | |
Useful Life (in years) | 13 years |
Acquisitions and Divestitures_6
Acquisitions and Divestitures (Summary of Pro Forma Information) (Details) - Evoqua Acquisition - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Business Acquisition [Line Items] | ||
Revenue | $ 8,146 | $ 7,329 |
Net income | $ 668 | $ 256 |
Restructuring and Asset Impai_3
Restructuring and Asset Impairment Charges (Components of Restructuring Charges and Segment Allocation) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Restructuring Cost and Reserve [Line Items] | |||
Severance and other charges | $ 70 | $ 15 | $ 10 |
Asset impairment | 3 | 0 | 1 |
Other restructuring charges | 0 | 0 | 1 |
Reversal of restructuring accruals | (1) | 0 | (6) |
Total restructuring costs | 72 | 15 | 6 |
Asset impairment charges | 4 | 14 | 1 |
Total restructuring and asset impairment charges | 76 | 29 | 7 |
Water Infrastructure | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring and asset impairment charges | 15 | 6 | 8 |
Applied Water | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring and asset impairment charges | 7 | 4 | 2 |
Measurement and Control Solutions | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring and asset impairment charges | 15 | 19 | (3) |
Corporate and other | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring and asset impairment charges | 35 | 0 | 0 |
Integrated Solutions & Services | Operating Segments | |||
Restructuring Cost and Reserve [Line Items] | |||
Total restructuring costs | $ 4 | $ 0 | $ 0 |
Restructuring and Asset Impai_4
Restructuring and Asset Impairment Charges (Restructuring Reserve Rollforward) (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | ||
Restructuring Reserve [Roll Forward] | ||||
Restructuring accruals | $ 10 | $ 7 | ||
Restructuring costs | 72 | 15 | $ 6 | |
Cash payments | (30) | (11) | (25) | |
Asset impairment | (3) | 0 | (1) | |
Stock based compensation included within AOCL | (27) | 0 | ||
Foreign currency and other | 2 | (1) | ||
Restructuring accruals | 24 | 10 | 7 | |
Water Infrastructure | ||||
Restructuring Reserve [Roll Forward] | ||||
Restructuring accruals | 1 | |||
Restructuring accruals | 3 | 1 | ||
Applied Water | ||||
Restructuring Reserve [Roll Forward] | ||||
Restructuring accruals | 0 | |||
Restructuring accruals | 1 | 0 | ||
Measurement and Control Solutions | ||||
Restructuring Reserve [Roll Forward] | ||||
Restructuring accruals | 3 | |||
Restructuring accruals | 8 | 3 | ||
Regional Selling Locations | ||||
Restructuring Reserve [Roll Forward] | ||||
Restructuring accruals | [1] | 4 | ||
Restructuring accruals | [1] | 7 | 4 | |
Corporate and other | ||||
Restructuring Reserve [Roll Forward] | ||||
Restructuring accruals | 2 | |||
Restructuring accruals | 4 | 2 | ||
Integrated Solutions & Services | Operating Segments | ||||
Restructuring Reserve [Roll Forward] | ||||
Restructuring accruals | 0 | |||
Restructuring costs | 4 | 0 | $ 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 | |||||
Dec. 31, 2023 | Sep. 30, 2023 | Mar. 31, 2023 | Mar. 31, 2021 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Restructuring Cost and Reserve [Line Items] | |||||||
Asset impairment charges | $ 4 | $ 14 | $ 1 | ||||
Asset impairment | 3 | 0 | 1 | ||||
Restructuring Charges | 72 | 15 | 6 | ||||
Impairment of Intangible Assets (Excluding Goodwill) | $ 1 | $ 2 | |||||
Tangible Asset Impairment Charges | $ 1 | ||||||
Patents | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Impairment of Intangible Assets (Excluding Goodwill) | $ 1 | ||||||
Measurement and Control Solutions | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Impairment charge on intangible assets | 14 | ||||||
Measurement and Control Solutions | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Impairment charge on intangible assets | 14 | ||||||
2016 Restructuring Plan | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Expected restructuring costs | 15 | 15 | |||||
Incurred restructuring costs | 1 | 14 | |||||
2016 Restructuring Plan | Water Infrastructure | Operating Segments | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Expected restructuring costs | 6 | 6 | |||||
Incurred restructuring costs | 0 | 6 | |||||
2016 Restructuring Plan | Applied Water | Operating Segments | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Expected restructuring costs | 5 | 5 | |||||
Incurred restructuring costs | 1 | 4 | |||||
2016 Restructuring Plan | Measurement and Control Solutions | Operating Segments | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Expected restructuring costs | 4 | 4 | |||||
Incurred restructuring costs | 0 | 4 | |||||
2020 Restructuring Plan | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring Costs | 3 | ||||||
2020 Restructuring Plan | Water Infrastructure | Reduction Of Headcount | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring Costs | 4 | ||||||
2020 Restructuring Plan | Applied Water | Reduction Of Headcount | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring Costs | 2 | ||||||
Two Thousand Twenty Restructuring Plan | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring Charges | 15 | ||||||
Two Thousand Twenty Restructuring Plan | Maximum | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Incurred restructuring costs | 72 | ||||||
Two Thousand Twenty Restructuring Plan | Share-Based Payment Arrangement | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Incurred restructuring costs | 27 | ||||||
Two Thousand Twenty Restructuring Plan | Employee Severance | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Incurred restructuring costs | 15 | ||||||
Two Thousand Twenty Restructuring Plan | Other Restructuring | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Incurred restructuring costs | 30 | ||||||
2015 Restructuring Plan | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Expected restructuring costs | 3 | 3 | |||||
Incurred restructuring costs | 0 | 0 | 3 | ||||
2015 Restructuring Plan | Water Infrastructure | Operating Segments | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Expected restructuring costs | 3 | 3 | |||||
Incurred restructuring costs | 0 | 0 | 3 | ||||
2015 Restructuring Plan | Applied Water | Operating Segments | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Expected restructuring costs | 0 | 0 | |||||
Incurred restructuring costs | 0 | 0 | 0 | ||||
2015 Restructuring Plan | Measurement and Control Solutions | Operating Segments | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Expected restructuring costs | $ 0 | 0 | |||||
Incurred restructuring costs | $ 0 | 0 | 0 | ||||
Restructuring Actions Commenced Prior to 2020 | Measurement and Control Solutions | Operating Segments | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Incurred restructuring costs | $ 1 | $ 3 |
Restructuring and Asset Impai_6
Restructuring and Asset Impairment Charges - Estimated Restructuring Costs (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Restructuring Cost and Reserve [Line Items] | |||
Restructuring, Incurred Cost, Statement of Income or Comprehensive Income [Extensible Enumeration] | Restructuring and asset impairment charges | ||
2017 Restructuring Plan | |||
Restructuring Cost and Reserve [Line Items] | |||
Expected restructuring costs | $ 87 | ||
Incurred restructuring costs | 71 | ||
Expected costs remaining | 16 | ||
2016 Restructuring Plan | |||
Restructuring Cost and Reserve [Line Items] | |||
Expected restructuring costs | 15 | ||
Incurred restructuring costs | 1 | $ 14 | |
Expected costs remaining | 0 | ||
2015 Restructuring Plan | |||
Restructuring Cost and Reserve [Line Items] | |||
Expected restructuring costs | 3 | ||
Incurred restructuring costs | 0 | 0 | $ 3 |
Expected costs remaining | 0 | ||
Corporate | 2017 Restructuring Plan | |||
Restructuring Cost and Reserve [Line Items] | |||
Expected restructuring costs | 34 | ||
Incurred restructuring costs | 35 | ||
Expected costs remaining | (1) | ||
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 | 18 | ||
Incurred restructuring costs | 15 | ||
Expected costs remaining | 3 | ||
Operating Segments | Water Infrastructure | 2016 Restructuring Plan | |||
Restructuring Cost and Reserve [Line Items] | |||
Expected restructuring costs | 6 | ||
Incurred restructuring costs | 0 | 6 | |
Expected costs remaining | 0 | ||
Operating Segments | Water Infrastructure | 2015 Restructuring Plan | |||
Restructuring Cost and Reserve [Line Items] | |||
Expected restructuring costs | 3 | ||
Incurred restructuring costs | 0 | 0 | 3 |
Expected costs remaining | 0 | ||
Operating Segments | Applied Water | 2017 Restructuring Plan | |||
Restructuring Cost and Reserve [Line Items] | |||
Expected restructuring costs | 16 | ||
Incurred restructuring costs | 6 | ||
Expected costs remaining | 10 | ||
Operating Segments | Applied Water | 2016 Restructuring Plan | |||
Restructuring Cost and Reserve [Line Items] | |||
Expected restructuring costs | 5 | ||
Incurred restructuring costs | 1 | 4 | |
Expected costs remaining | 0 | ||
Operating Segments | Applied Water | 2015 Restructuring Plan | |||
Restructuring Cost and Reserve [Line Items] | |||
Expected restructuring costs | 0 | ||
Incurred restructuring costs | 0 | 0 | 0 |
Expected costs remaining | 0 | ||
Operating Segments | Measurement and Control Solutions | 2017 Restructuring Plan | |||
Restructuring Cost and Reserve [Line Items] | |||
Expected restructuring costs | 12 | ||
Incurred restructuring costs | 11 | ||
Expected costs remaining | 1 | ||
Operating Segments | Measurement and Control Solutions | 2016 Restructuring Plan | |||
Restructuring Cost and Reserve [Line Items] | |||
Expected restructuring costs | 4 | ||
Incurred restructuring costs | 0 | 4 | |
Expected costs remaining | 0 | ||
Operating Segments | Measurement and Control Solutions | 2015 Restructuring Plan | |||
Restructuring Cost and Reserve [Line Items] | |||
Expected restructuring costs | 0 | ||
Incurred restructuring costs | 0 | 0 | 0 |
Expected costs remaining | 0 | ||
Operating Segments | Integrated Solutions and Services | 2017 Restructuring Plan | |||
Restructuring Cost and Reserve [Line Items] | |||
Expected restructuring costs | 7 | ||
Incurred restructuring costs | 4 | ||
Expected costs remaining | 3 | ||
Operating Segments | Integrated Solutions and Services | 2016 Restructuring Plan | |||
Restructuring Cost and Reserve [Line Items] | |||
Expected restructuring costs | 0 | ||
Incurred restructuring costs | 0 | 0 | |
Expected costs remaining | 0 | ||
Operating Segments | Integrated Solutions and Services | 2015 Restructuring Plan | |||
Restructuring Cost and Reserve [Line Items] | |||
Expected restructuring costs | 0 | ||
Incurred restructuring costs | 0 | 0 | 0 |
Expected costs remaining | 0 | ||
Corporate | 2015 Restructuring Plan | |||
Restructuring Cost and Reserve [Line Items] | |||
Expected restructuring costs | 0 | ||
Incurred restructuring costs | 0 | $ 0 | $ 0 |
Expected costs remaining | $ 0 |
Revenue (Details)
Revenue (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Change in Contract with Customer, Asset [Abstract] | ||
Beginning balance | $ 151 | $ 125 |
Additions, net | 121 | 115 |
Billings transferred to accounts receivable | (126) | 82 |
Other | 7 | (7) |
Ending balance | 263 | 151 |
Change in Contract with Customer, Liability [Abstract] | ||
Beginning balance | 183 | 164 |
Additions, net | 162 | 137 |
Revenue recognized from opening balance | (128) | (109) |
Other | (9) | (9) |
Ending balance | 315 | $ 183 |
Contract With Customer, Asset, Business Acquisitions | 110 | |
Contract With Customer, Liability, Business Acquisitions | $ 107 |
Revenue - Disaggregation of Rev
Revenue - Disaggregation of Revenue (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Disaggregation of Revenue [Line Items] | |||
Revenue from contracts with customers | $ 6,963 | $ 5,294 | $ 4,998 |
Other | 401 | 228 | 197 |
Total | 7,364 | 5,522 | 5,195 |
United States | |||
Disaggregation of Revenue [Line Items] | |||
Total | 3,956 | 2,573 | 2,280 |
Europe | |||
Disaggregation of Revenue [Line Items] | |||
Total | 1,655 | 1,411 | 1,414 |
Water Infrastructure | |||
Disaggregation of Revenue [Line Items] | |||
Total | 2,967 | 2,364 | 2,247 |
Water Infrastructure | United States | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from contracts with customers | 934 | 664 | 556 |
Water Infrastructure | Europe | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from contracts with customers | 911 | 757 | 753 |
Water Infrastructure | Emerging Markets & Other | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from contracts with customers | 581 | 495 | 537 |
Water Infrastructure | Other | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from contracts with customers | 258 | 220 | 204 |
Water Infrastructure | Transport | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from contracts with customers | 1,889 | 1,715 | 1,619 |
Water Infrastructure | Treatment | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from contracts with customers | 795 | 421 | 431 |
Applied Water | |||
Disaggregation of Revenue [Line Items] | |||
Total | 1,853 | 1,767 | 1,613 |
Applied Water | United States | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from contracts with customers | 970 | 914 | 804 |
Applied Water | Europe | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from contracts with customers | 401 | 380 | 370 |
Applied Water | Emerging Markets & Other | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from contracts with customers | 342 | 349 | 324 |
Applied Water | Other | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from contracts with customers | 140 | 124 | 115 |
Applied Water | Commercial Building Services | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from contracts with customers | 1,025 | 965 | 877 |
Applied Water | Industrial Water | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from contracts with customers | 828 | 802 | 736 |
Measurement and Control Solutions | United States | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from contracts with customers | 1,122 | 857 | 796 |
Measurement and Control Solutions | Europe | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from contracts with customers | 290 | 240 | 256 |
Measurement and Control Solutions | Emerging Markets & Other | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from contracts with customers | 203 | 198 | 189 |
Measurement and Control Solutions | Other | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from contracts with customers | 114 | 96 | 94 |
Measurement and Control Solutions | Water | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from contracts with customers | 1,354 | 1,126 | 1,055 |
Measurement and Control Solutions | Electric | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from contracts with customers | 375 | 265 | 280 |
Integrated Solutions & Services | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from contracts with customers | 697 | 0 | 0 |
Integrated Solutions & Services | United States | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from contracts with customers | 646 | 0 | 0 |
Integrated Solutions & Services | Other | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from contracts with customers | 34 | 0 | 0 |
Integrated Solutions & Services | Western Europe | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from contracts with customers | 8 | 0 | 0 |
Integrated Solutions & Services | Emerging Markets | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from contracts with customers | $ 9 | $ 0 | $ 0 |
Revenue (Narrative) (Details)
Revenue (Narrative) (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligation | $ 914 |
Evoqua Acquisition | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Contract with Customer, Liability, Increase (Decrease) for Contract Acquired in Business Combination | $ 414 |
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, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Other Income and Expenses [Abstract] | |||
Interest income | $ 28 | $ 16 | $ 7 |
Income from equity method investments | 0 | 0 | 9 |
Other income (expense) - net | 5 | (9) | (16) |
Total other non-operating (expense) income, net | $ 33 | $ 7 | $ 0 |
Income Taxes (Components of Inc
Income Taxes (Components of Income Tax Expense) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income (loss) components: | |||
Domestic | $ 123 | $ 90 | $ 45 |
Foreign | 512 | 350 | 466 |
Income before taxes | 635 | 440 | 511 |
Current: | |||
Domestic – federal | (4) | 77 | 16 |
Domestic – state and local | 23 | 16 | 5 |
Foreign | 86 | 56 | 53 |
Total Current | 105 | 149 | 74 |
Deferred: | |||
Domestic – federal | (49) | (43) | (2) |
Domestic – state and local | (8) | (12) | 0 |
Foreign | (22) | (9) | 12 |
Total Deferred | (79) | (64) | 10 |
Total income tax provision | $ 26 | $ 85 | $ 84 |
Effective income tax rate | 4.10% | 19.20% | 16.30% |
Income Taxes (Income Tax Rate R
Income Taxes (Income Tax Rate Reconciliation) (Details) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |||
Tax provision at U.S. statutory rate | 21% | 21% | 21% |
State income taxes | 1.70% | 1.20% | 0.80% |
Uncertain tax positions | (9.90%) | (1.20%) | (0.10%) |
U.S. tax on foreign earnings | (0.70%) | (1.30%) | (0.60%) |
Effective Income Tax Rate Reconciliation, Change in Deferred Tax Assets Valuation Allowance, Percent | (5.80%) | 0.10% | 0.90% |
Effective Income Tax Rate Reconciliation, Tax Exempt Income, Percent | 0% | 1.80% | 2.40% |
Effective Income Tax Rate Reconciliation, Repatriation of Foreign Earnings, Percent | 0% | 2.40% | (0.20%) |
Effective Income Tax Rate Reconciliation, Nondeductible Expense, Percent | 1.20% | 0.70% | 0.50% |
Effective Income Tax Rate Reconciliation, Foreign Income Tax Rate Differential, Percent | 2.50% | 2.70% | 2.20% |
Effective Income Tax Rate Reconciliation, Reversal of Repatriation of Foreign Earnings, Percent | 2.60% | 4.40% | 5.50% |
Effective Income Tax Rate Reconciliation, Other Adjustments, Percent | 1.60% | 1% | 0.10% |
Effective Income Tax Rate Reconciliation, Change in Enacted Tax Rate, Percent | (2.00%) | (0.60%) | 0.90% |
Effective Income Tax Rate Reconciliation, Nondeductible Expense, Research and Development, Percent | (0.50%) | (0.70%) | (0.70%) |
Effective Income Tax Rate Reconciliation, Tax Expense (Benefit), Share-Based Payment Arrangement, Percent | 0.60% | (0.10%) | 0.60% |
Effective Income Tax Rate Reconciliation, Tax Credit, Percent | (1.80%) | 0% | 0% |
Effective income tax rate | 4.10% | 19.20% | 16.30% |
Income Taxes (Components of Def
Income Taxes (Components of Deferred Tax Assets and Liabilities) (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Deferred tax assets: | ||
Employee benefits | $ 79 | $ 58 |
Accrued expenses | 49 | 36 |
Loss and other tax credit carryforwards | 241 | 245 |
R&D capitalization | 40 | 32 |
Inventory | 5 | 5 |
Lease Liabilities | 79 | 68 |
Hedging instruments | 8 | 0 |
Other | 12 | 7 |
Total deferred tax assets | 513 | 451 |
Valuation allowance | (179) | (204) |
Net deferred tax asset | 334 | 247 |
Deferred tax liabilities: | ||
Intangibles | 500 | 155 |
Investment in foreign subsidiaries | 11 | 5 |
Property, plant and equipment | 131 | 65 |
Lease right-of-use assets | 78 | 67 |
Deferred Tax Liabilities, Derivatives | 0 | 20 |
Other | 0 | 11 |
Total deferred tax liabilities | $ 720 | $ 323 |
Income Taxes (Reconciliation of
Income Taxes (Reconciliation of Valuation Allowance of Deferred Tax Assets) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Acquisitions | $ 4 | $ 0 | $ 0 |
Valuation Allowance of Deferred Tax Assets | |||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
SEC Schedule, 12-09, Valuation Allowances and Reserves, Amount, Beginning Balance | 204 | 201 | 217 |
Change in assessment (a) | (47) | 1 | 0 |
Current year operations | 12 | 3 | 4 |
Other comprehensive income | 1 | 0 | (4) |
Foreign currency and other | 5 | (1) | (16) |
SEC Schedule, 12-09, Valuation Allowances and Reserves, Amount, Ending Balance | $ 179 | $ 204 | $ 201 |
Income Taxes (Classification of
Income Taxes (Classification of Unrecognized Tax Benefits) (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Income Tax Disclosure [Abstract] | ||
Non-current assets | $ 171 | $ 146 |
Non-current liabilities | (557) | (222) |
Total net deferred tax liabilities | $ (386) | $ (76) |
Income Taxes (Summary of Operat
Income Taxes (Summary of Operating Losses and Tax Credits) (Details) $ in Millions | Dec. 31, 2023 USD ($) |
United States | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss | $ 4 |
Tax credits | 12 |
State | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss | 88 |
Tax credits | 0 |
Foreign | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss | 901 |
Tax credits | 5 |
Excess Interest Expense | State | |
Operating Loss Carryforwards [Line Items] | |
Tax credits | $ 21 |
Income Taxes (Summary of Unreco
Income Taxes (Summary of Unrecognized Tax Benefits) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Unrecognized tax benefits — January 1 | $ 102 | $ 111 | $ 114 |
Gross Increases - Current year tax positions | 2 | 0 | 0 |
Gross Increases - Prior year tax positions | 4 | 3 | 0 |
Gross Decreases - Prior year tax positions | (75) | (8) | (1) |
Unrecognized Tax Benefits, Increase Resulting from Acquisition | 2 | 0 | 0 |
Settlements | 0 | (1) | 0 |
Lapse of Statute of Limitations | 0 | (2) | (1) |
Currency Translation Adjustment | 0 | (1) | (1) |
Unrecognized tax benefits — December 31 | $ 35 | $ 102 | $ 111 |
Income Taxes (Details Textual)
Income Taxes (Details Textual) kr in Millions, $ in Millions | 1 Months Ended | 12 Months Ended | ||||
Jun. 30, 2022 USD ($) | Jun. 30, 2022 SEK (kr) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Income Tax Contingency [Line Items] | ||||||
Valuation allowance | $ 179 | $ 204 | ||||
Total income tax provision | $ 26 | $ 85 | $ 84 | |||
Effective income tax rate | 4.10% | 19.20% | 16.30% | |||
Unrecognized tax benefits | $ 35 | $ 102 | $ 111 | $ 114 | ||
Lapse of Statute of Limitations | 0 | 2 | $ 1 | |||
Interest accrued for unrecognized tax benefits | 5 | $ 9 | ||||
Decrease in Unrecognized Tax Benefits is Reasonably Possible | 2 | |||||
Foreign | ||||||
Income Tax Contingency [Line Items] | ||||||
Deferred tax liability | 6 | |||||
Foreign | Swiss Federal Tax Administration (FTA) | Tax Year 2013 | ||||||
Income Tax Contingency [Line Items] | ||||||
Estimated loss | $ 82 | kr 824 | ||||
State | ||||||
Income Tax Contingency [Line Items] | ||||||
Deferred tax liability | $ 463 |
Earnings Per Share (Calculation
Earnings Per Share (Calculation of EPS) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Basic and diluted net earnings per share: | |||
Net income (in usd) | $ 609 | $ 355 | $ 427 |
Net income | $ 609 | $ 355 | $ 427 |
Shares | |||
Weighted average common shares outstanding | 216,982 | 180,189 | 180,225 |
Add: Participating securities | 30 | 28 | 22 |
Weighted average common shares outstanding — Basic | 217,012 | 180,217 | 180,247 |
Plus incremental shares from assumed conversions: | |||
Weighted average common shares outstanding — Diluted | 218,180 | 180,979 | 181,526 |
Basic earnings per share (in usd per share) | $ 2.81 | $ 1.97 | $ 2.37 |
Diluted earnings per share (in usd per share) | $ 2.79 | $ 1.96 | $ 2.35 |
Stock Options | |||
Plus incremental shares from assumed conversions: | |||
Dilutive effect of common shares | 768 | 549 | 871 |
Restricted Stock | |||
Plus incremental shares from assumed conversions: | |||
Dilutive effect of common shares | 400 | 213 | 408 |
Earnings Per Share (Summary of
Earnings Per Share (Summary of Antidilutive Securities) (Details) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Stock Options | |||
Incremental shares from stock options and restricted stock: | |||
Antidilutive securities | 1,703 | 1,453 | 1,132 |
Restricted Stock | |||
Incremental shares from stock options and restricted stock: | |||
Antidilutive securities | 566 | 353 | 271 |
Performance Based Shares | |||
Incremental shares from stock options and restricted stock: | |||
Antidilutive securities | 289 | 284 | 330 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Inventories | ||
Finished goods | $ 355 | $ 286 |
Work in process | 102 | 58 |
Raw materials | 561 | 455 |
Total inventories | $ 1,018 | $ 799 |
Property, Plant and Equipment_2
Property, Plant and Equipment (Components of Property, Plant and Equipment) (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment | ||
Property, plant and equipment, gross | $ 2,467 | $ 1,787 |
Less accumulated depreciation | 1,298 | 1,157 |
Total property, plant and equipment, net | 1,169 | 630 |
Land, buildings and improvements | ||
Property, Plant and Equipment | ||
Property, plant and equipment, gross | 480 | 360 |
Machinery and equipment | ||
Property, Plant and Equipment | ||
Property, plant and equipment, gross | 1,124 | 896 |
Furniture and fixtures | ||
Property, Plant and Equipment | ||
Property, plant and equipment, gross | 143 | 124 |
Construction work in progress | ||
Property, Plant and Equipment | ||
Property, plant and equipment, gross | 217 | 106 |
Other | ||
Property, Plant and Equipment | ||
Property, plant and equipment, gross | 47 | 38 |
Equipment Held For Lease or Rental | ||
Property, Plant and Equipment | ||
Property, plant and equipment, gross | $ 456 | $ 263 |
Property, Plant and Equipment_3
Property, Plant and Equipment (Details Textual) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation, Excluding Lessor Asset under Operating Lease | $ 177 | $ 111 | $ 118 |
Leases (Textuals) (Details)
Leases (Textuals) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Lessor, Lease, Description [Line Items] | |||
Operating liability, current | $ 84 | $ 65 | |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Accrued Liabilities, Current | Accrued Liabilities, Current | |
Operating liability, noncurrent | $ 272 | $ 228 | |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Other Accrued Liabilities, Noncurrent | Other Accrued Liabilities, Noncurrent | |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Other Assets, Noncurrent | Other Assets, Noncurrent | |
Right-of-use assets | $ 348 | $ 285 | |
Revenue from lease arrangements | 401 | 228 | $ 197 |
Assets subject to rental | 457 | 263 | |
Assets subject to rental, accumulated amortization | 203 | 161 | |
Depreciation, Lessor Asset under Operating Lease | 58 | 27 | $ 24 |
Finance Lease, Liability, Current | 22 | 4 | |
Finance Lease, Liability, Noncurrent | 64 | 21 | |
Finance Lease, Right-of-Use Asset, after Accumulated Amortization | $ 85 | $ 25 | |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Accrued Liabilities, Current | Accrued Liabilities, Current | |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Other Accrued Liabilities, Noncurrent | Other Accrued Liabilities, Noncurrent | |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Other Assets, Noncurrent | Other Assets, Noncurrent | |
Sales-Type Lease, Net Investment in Lease, Excluding Accrued Interest, after Allowance for Credit Loss, Current | $ 5 | ||
Leasing Arrangement | |||
Lessor, Lease, Description [Line Items] | |||
Sales-Type Lease, Net Investment in Lease, Allowance for Credit Loss, Excluding Accrued Interest, Noncurrent | $ 57 |
Leases (Lease Costs) (Details)
Leases (Lease Costs) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Leases [Abstract] | |||
Operating lease cost | $ 96 | $ 83 | $ 84 |
Short-term lease cost | 4 | 2 | 2 |
Variable lease cost | 23 | 21 | 23 |
Total lease cost | 141 | 110 | 110 |
Finance Lease, Interest Expense | 2 | 1 | 0 |
Finance Lease, Right-of-Use Asset, Amortization | $ 16 | $ 3 | $ 1 |
Leases (Supplemental Lease Info
Leases (Supplemental Lease Information) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Leases [Abstract] | |||
Operating cash flows from operating leases | $ 92 | $ 82 | $ 83 |
Finance Lease, Principal Payments | 14 | 3 | 1 |
Right-of-Use Asset Obtained in Exchange for Finance Lease Liability | 34 | 24 | 5 |
Operating leases | $ 74 | $ 94 | 109 |
Operating leases | 6 years | 7 years | |
Finance Lease, Weighted Average Remaining Lease Term | 5 years | 7 years | |
Operating leases | 3.20% | 2.30% | |
Finance Lease, Weighted Average Discount Rate, Percent | 4.20% | 2.70% | |
Finance Lease, Interest Payment on Liability | $ 2 | $ 0 | $ 0 |
Leases (Maturities) (Details)
Leases (Maturities) (Details) $ in Millions | Dec. 31, 2023 USD ($) |
Leases [Abstract] | |
2024 | $ 89 |
2025 | 78 |
2026 | 63 |
2027 | 49 |
2028 | 37 |
Thereafter | 68 |
Total lease payments | 384 |
Less: Imputed interest | (30) |
Total | $ 354 |
Leases (Details)
Leases (Details) $ in Millions | Dec. 31, 2023 USD ($) |
Leases [Abstract] | |
2024 | $ 22 |
2025 | 23 |
2026 | 19 |
2027 | 14 |
2028 | 8 |
Thereafter | 8 |
Total lease payments | 94 |
Less: Imputed interest | (8) |
Total | $ 86 |
Leases (Details)_2
Leases (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Leases [Abstract] | |||
Operating Lease, Lease Income | $ 395 | $ 228 | $ 197 |
Sales-type Lease, Lease Income | 6 | 0 | 0 |
Revenue from lease arrangements | $ 401 | $ 228 | $ 197 |
Operating Lease, Lease Income, Statement of Income or Comprehensive Income [Extensible Enumeration] | Revenue |
Leases (Details)_2_3
Leases (Details) $ in Millions | Dec. 31, 2023 USD ($) |
Leases [Abstract] | |
Lessor, Operating Lease, Payment to be Received, Year One | $ 122 |
Lessor, Operating Lease, Payment to be Received, Year Two | 74 |
Lessor, Operating Lease, Payment to be Received, Year Three | 59 |
Lessor, Operating Lease, Payment to be Received, Year Four | 50 |
Lessor, Operating Lease, Payment to be Received, Year Five | 34 |
Lessor, Operating Lease, Payment to be Received, after Year Five | 172 |
Lessor, Operating Lease, Payment to be Received | $ 511 |
Leases (Details)_2_3_4
Leases (Details) $ in Millions | Dec. 31, 2023 USD ($) |
Leases [Abstract] | |
Sales-Type and Direct Financing Leases, Payment to be Received, Year One | $ 5 |
Sales-Type and Direct Financing Leases, Payment to be Received, Year Two | 5 |
Sales-Type and Direct Financing Leases, Payment to be Received, Year Three | 5 |
Sales-Type and Direct Financing Leases, Payment to be Received, Year Four | 5 |
Sales-Type and Direct Financing Leases, Payment to be Received, Year Five | 4 |
Sales-Type and Direct Financing Leases, Payment to be Received, after Year Five | 38 |
Sales-Type and Direct Financing Leases, Payment to be Received | $ 62 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets (Rollforward of Goodwill) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Changes in the carrying value of goodwill by operating segment | ||
Beginning Balance | $ 2,719 | $ 2,792 |
Foreign currency and other | 55 | (73) |
Acquisitions | 4,813 | |
Ending Balance | 7,587 | 2,719 |
Water Infrastructure | ||
Changes in the carrying value of goodwill by operating segment | ||
Beginning Balance | 638 | 656 |
Foreign currency and other | 17 | (18) |
Acquisitions | 1,779 | |
Ending Balance | 2,434 | 638 |
Applied Water | ||
Changes in the carrying value of goodwill by operating segment | ||
Beginning Balance | 502 | 515 |
Foreign currency and other | 8 | (13) |
Acquisitions | (385) | |
Ending Balance | 895 | 502 |
Measurement and Control Solutions | ||
Changes in the carrying value of goodwill by operating segment | ||
Beginning Balance | 1,579 | 1,621 |
Foreign currency and other | 19 | (42) |
Acquisitions | 141 | |
Ending Balance | 1,739 | 1,579 |
Integrated Solutions and Services | ||
Changes in the carrying value of goodwill by operating segment | ||
Beginning Balance | 0 | 0 |
Foreign currency and other | 11 | 0 |
Acquisitions | 2,508 | |
Ending Balance | $ 2,519 | $ 0 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets (Details Textual) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Goodwill and Other Intangible Assets (Textual) [Abstract] | |||
Amortization expense related to finite-lived intangible assets | $ 243 | $ 125 | $ 127 |
Accumulated impairment loss | $ 206 | ||
Customer and Distributor Relationships | |||
Goodwill and Other Intangible Assets (Textual) [Abstract] | |||
Finite-Lived Intangible Asset, Useful Life | 16 years | ||
Internally Developed Network Software | |||
Goodwill and Other Intangible Assets (Textual) [Abstract] | |||
Finite-Lived Intangible Asset, Useful Life | 6 years | ||
Proprietary Technology | |||
Goodwill and Other Intangible Assets (Textual) [Abstract] | |||
Finite-Lived Intangible Asset, Useful Life | 12 years | ||
Trademarks | |||
Goodwill and Other Intangible Assets (Textual) [Abstract] | |||
Finite-Lived Intangible Asset, Useful Life | 11 years | ||
Other | |||
Goodwill and Other Intangible Assets (Textual) [Abstract] | |||
Finite-Lived Intangible Asset, Useful Life | 4 years | ||
Measurement and Control Solutions | |||
Goodwill and Other Intangible Assets (Textual) [Abstract] | |||
Impairment charge on intangible assets | $ 14 |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets (Summary of Other Intangible Assets) (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Goodwill and Other Intangible Assets | ||
Accumulated Amortization | $ (1,088) | $ (840) |
Indefinite-lived intangibles | 166 | 165 |
Intangible Assets Gross, Carrying Amount | 3,617 | 1,770 |
Intangible Assets, Net Intangibles | 2,529 | 930 |
Customer and Distributor Relationships | ||
Goodwill and Other Intangible Assets | ||
Carrying Amount | 2,172 | 784 |
Accumulated Amortization | (475) | (371) |
Net Intangibles | $ 1,697 | 413 |
Finite-Lived Intangible Asset, Useful Life | 16 years | |
Proprietary Technology | ||
Goodwill and Other Intangible Assets | ||
Carrying Amount | $ 292 | 165 |
Accumulated Amortization | (141) | (118) |
Net Intangibles | $ 151 | 47 |
Finite-Lived Intangible Asset, Useful Life | 12 years | |
Trademarks | ||
Goodwill and Other Intangible Assets | ||
Carrying Amount | $ 188 | 137 |
Accumulated Amortization | (96) | (80) |
Net Intangibles | $ 92 | 57 |
Finite-Lived Intangible Asset, Useful Life | 11 years | |
Internally Developed Network Software | ||
Goodwill and Other Intangible Assets | ||
Carrying Amount | $ 598 | 514 |
Accumulated Amortization | (335) | (268) |
Net Intangibles | $ 263 | 246 |
Finite-Lived Intangible Asset, Useful Life | 6 years | |
Other | ||
Goodwill and Other Intangible Assets | ||
Carrying Amount | $ 201 | 5 |
Accumulated Amortization | (41) | (3) |
Net Intangibles | $ 160 | $ 2 |
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, 2023 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2019 | $ 312 |
2020 | 282 |
2021 | 252 |
2022 | 226 |
2023 | $ 206 |
Accrued and Other Current Lia_3
Accrued and Other Current Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Accrued and Other Current Liabilities | ||
Compensation and other employee-benefits | $ 403 | $ 285 |
Customer-related liabilities | 370 | 210 |
Accrued taxes | 170 | 186 |
Lease liabilities | 106 | 69 |
Accrued warranty costs | 45 | 37 |
Other accrued liabilities | 127 | 80 |
Total accrued and other current liabilities | $ 1,221 | $ 867 |
Credit Facilities and Long-Te_3
Credit Facilities and Long-Term Debt (Summary of Debt Outstanding) (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 20, 2023 | Dec. 31, 2022 | Jun. 26, 2020 | Oct. 11, 2016 |
Credit Facilities and Long-Term Debt : | |||||
Debt issuance costs and unamortized discount | $ (17) | $ (20) | |||
Total debt | 2,284 | 1,880 | |||
Less: short-term borrowings and current maturities of long-term debt | 16 | 0 | |||
Long-term debt, net | $ 2,268 | 1,880 | |||
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 | $ 482 | 470 | |||
Senior Notes Due Twenty Twenty Eight | |||||
Credit Facilities and Long-Term Debt : | |||||
Interest rate | 1.95% | 1.95% | |||
Outstanding balances | $ 500 | 500 | |||
Senior Notes Due Twenty Thirty One | |||||
Credit Facilities and Long-Term Debt : | |||||
Interest rate | 2.25% | 2.25% | |||
Outstanding balances | $ 500 | 500 | |||
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 | 349 | 333 | |||
Term loan | |||||
Credit Facilities and Long-Term Debt : | |||||
Outstanding balances | 278 | 0 | |||
Equipment Financing | Secured Debt | |||||
Credit Facilities and Long-Term Debt : | |||||
Interest rate | 6.32% | ||||
Outstanding balances | 123 | 0 | |||
Level 1 | Senior Notes Due Twenty Twenty Eight | |||||
Credit Facilities and Long-Term Debt : | |||||
Debt fair value | 453 | 430 | |||
Level 1 | Senior Notes Due Twenty Thirty One | |||||
Credit Facilities and Long-Term Debt : | |||||
Debt fair value | $ 429 | $ 406 |
Credit Facilities and Long-Te_4
Credit Facilities and Long-Term Debt (Details Textual) | 12 Months Ended | |||||||||||||||
Mar. 01, 2023 USD ($) Rate | Dec. 12, 2022 USD ($) | Mar. 05, 2019 USD ($) | Sep. 20, 2011 | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | May 24, 2023 USD ($) | May 09, 2023 USD ($) | May 09, 2023 EUR (€) | Jun. 02, 2022 USD ($) | Jun. 26, 2020 USD ($) | Jun. 03, 2019 USD ($) | Jun. 03, 2019 EUR (€) | Oct. 11, 2016 USD ($) | Mar. 11, 2016 EUR (€) | |
Debt Instrument | ||||||||||||||||
Senior notes issued | $ 500,000,000 | |||||||||||||||
U.K. pension settlement expense | $ 0 | $ 140,000,000 | $ 0 | |||||||||||||
Loan, Securitized or Asset-Backed Financing Arrangement, Principal Outstanding | $ 150,000,000 | |||||||||||||||
Senior Notes | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Redemption price percentage | 101% | |||||||||||||||
3.250% Senior Notes Due 2026 | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Fair value of senior notes due | $ 482,000,000 | 470,000,000 | ||||||||||||||
Interest on notes due | 3.25% | 3.25% | ||||||||||||||
Senior notes issued | $ 500,000,000 | |||||||||||||||
Outstanding balances | $ 500,000,000 | 500,000,000 | ||||||||||||||
2.250% Senior Notes Due 2023 | Senior Notes | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Interest on notes due | 2.25% | |||||||||||||||
Senior notes issued | $ 533,000,000 | € 500,000,000 | ||||||||||||||
4.375% Senior Notes Due 2046 | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Fair value of senior notes due | $ 349,000,000 | 333,000,000 | ||||||||||||||
Interest on notes due | 4.375% | 4.375% | ||||||||||||||
Senior notes issued | $ 400,000,000 | |||||||||||||||
Repayments of senior notes due | $ 527,000,000 | |||||||||||||||
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 | $ 556,000,000 | € 500,000,000 | ||||||||||||||
Senior Notes Due Twenty Twenty Eight | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Interest on notes due | 1.95% | 1.95% | ||||||||||||||
Outstanding balances | $ 500,000,000 | 500,000,000 | ||||||||||||||
Senior Notes Due Twenty Thirty One | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Interest on notes due | 2.25% | 2.25% | ||||||||||||||
Outstanding balances | $ 500,000,000 | 500,000,000 | ||||||||||||||
Green Bond | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Debt Instrument, Redemption Price, Percentage In Occurrence Of Triggering Event | 101% | |||||||||||||||
Twenty Twenty Three Credit Facility | Revolving Credit Facility | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Debt instrument aggregate principal amount | $ 1,000,000,000 | |||||||||||||||
Five Year Revolving Credit Facility 2023 | Revolving Credit Facility | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Increase in borrowing capacity | $ 300,000,000 | |||||||||||||||
Maximum increase in borrowing capacity | $ 1,300,000,000 | |||||||||||||||
Term of debt | 5 years | |||||||||||||||
Debt instrument aggregate principal amount | $ 1,000,000,000 | $ 1,000,000,000 | ||||||||||||||
Debt Instrument, Covenant, Maximum Leverage Ratio, Four Consecutive Quarters After Material Acquisition | Rate | 400% | |||||||||||||||
Debt Instrument, Covenant, Maximum Leverage Ratio, Four Consecutive Quarters Before Additional Material Acquisition | Rate | 350% | |||||||||||||||
Line of Credit Facility, Current Borrowing Capacity | $ 1,000,000,000 | |||||||||||||||
ING Bank Term Loan Facility | Line of Credit | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Senior notes issued | $ 278,000,000 | € 250,000,000 | ||||||||||||||
Level 2 | Senior Notes Due Twenty Twenty Eight | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Fair value of senior notes due | 453,000,000 | 430,000,000 | ||||||||||||||
Level 2 | Senior Notes Due Twenty Thirty One | ||||||||||||||||
Debt Instrument | ||||||||||||||||
Fair value of senior notes due | $ 429,000,000 | $ 406,000,000 |
Credit Facilities and Long-Te_5
Credit Facilities and Long-Term Debt (Details) - USD ($) $ in Millions | Dec. 31, 2023 | May 24, 2023 | Dec. 31, 2022 |
Line of Credit Facility [Line Items] | |||
Property, Plant and Equipment, Gross | $ 2,467 | $ 1,787 | |
Prepaid Expense and Other Assets, Current | 230 | 173 | |
Property, Plant and Equipment, Net | 1,169 | 630 | |
Other Assets, Noncurrent | 943 | 661 | |
Assets | 16,112 | $ 7,952 | |
Evoqua Acquisition | |||
Line of Credit Facility [Line Items] | |||
Accounts Receivable, before Allowance for Credit Loss | $ 329 | ||
Accounts Receivable, after Allowance for Credit Loss | $ 322 | ||
Evoqua Acquisition | Asset Pledged as Collateral | Equipment Financing | |||
Line of Credit Facility [Line Items] | |||
Property, Plant and Equipment, Gross | 75 | ||
Accounts Receivable, before Allowance for Credit Loss | 1 | ||
Prepaid Expense and Other Assets, Current | 5 | ||
Other Noncurrent Assets, Before Depreciation | 58 | ||
Assets Before Depreciation | 139 | ||
Property, Plant and Equipment, Net | 71 | ||
Accounts Receivable, after Allowance for Credit Loss | 1 | ||
Other Assets, Noncurrent | 57 | ||
Assets | $ 134 |
Credit Facilities and Long-Te_6
Credit Facilities and Long-Term Debt (Details) - Secured Debt - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 20, 2023 | Dec. 31, 2022 |
Equipment Financing | |||
Debt Instrument | |||
Long-term Debt, Gross | $ 123 | $ 0 | |
Interest rate | 6.32% | ||
Six Point Two Seven Zero Equipment Financing, Due July 2032 | |||
Debt Instrument | |||
Long-term Debt, Gross | $ 2 |
Derivative Financial Instrume_3
Derivative Financial Instruments (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Derivative [Line Items] | |||
Amount of gain (loss) recognized in OCI | $ 2 | $ 24 | $ 10 |
Selling, General and Administrative Expense | (1,757) | (1,227) | (1,179) |
Amount of (gain) loss reclassified from OCI into revenue | (7,364) | (5,522) | (5,195) |
Designated as Hedging Instrument | Other non-current assets | |||
Derivative [Line Items] | |||
Assets | 9 | 79 | |
Designated as Hedging Instrument | Other non-current liabilities | |||
Derivative [Line Items] | |||
Liabilities | (54) | (6) | |
Foreign Exchange Contract | |||
Derivative [Line Items] | |||
Notional amount | 29 | 255 | |
Other Comprehensive Income (Loss) | Cross Currency Swaps | |||
Derivative [Line Items] | |||
Amount of gain (loss) recognized in OCI | (121) | 94 | 94 |
Other Comprehensive Income (Loss) | Foreign Currency Denominated Debt | |||
Derivative [Line Items] | |||
Amount of gain (loss) recognized in OCI | 0 | 31 | 48 |
Other Comprehensive Income (Loss) | Foreign Exchange Contract | |||
Derivative [Line Items] | |||
Amount of gain (loss) recognized in OCI | (2) | (24) | (10) |
Selling, General and Administrative Expense | 0 | (7) | 0 |
Interest Income (Expense), Net | 0 | (3) | 0 |
Reclassification out of Accumulated Other Comprehensive Income [Member] | Foreign Exchange Contract | |||
Derivative [Line Items] | |||
Amount of (gain) loss reclassified from OCI into revenue | 3 | 19 | 4 |
Amount of (gain) loss reclassified from OCI into cost of revenue | 4 | 2 | 0 |
Interest Expense | Cross Currency Swaps | |||
Derivative [Line Items] | |||
Amount of gain (loss) recognized in OCI | $ 30 | $ 29 | $ 21 |
Derivative Financial Instrume_4
Derivative Financial Instruments (Details Textual) | Dec. 12, 2022 USD ($) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Jun. 02, 2022 USD ($) | Jun. 26, 2020 USD ($) | Mar. 11, 2016 EUR (€) |
Derivative [Line Items] | ||||||
Net unrealized gains on cash flow hedges | $ 1,000,000 | |||||
Face amount | $ 500,000,000 | |||||
Foreign Exchange Contract | ||||||
Derivative [Line Items] | ||||||
Notional amount | 29,000,000 | $ 255,000,000 | ||||
Foreign Exchange Contract | Contract To Sell U.S. Dollar and Purchase Euro | ||||||
Derivative [Line Items] | ||||||
Notional amount | 19,000,000 | 105,000,000 | ||||
Foreign Exchange Contract | Contract To Purchase Swedish Krona and Sell Euro | ||||||
Derivative [Line Items] | ||||||
Notional amount | 73,000,000 | |||||
Foreign Exchange Contract | Contract To Sell British Pound and Purchase Euro | ||||||
Derivative [Line Items] | ||||||
Notional amount | 29,000,000 | |||||
Foreign Exchange Contract | Contract To Purchase U.S. Dollar and Sell Canadian Dollar | ||||||
Derivative [Line Items] | ||||||
Notional amount | 13,000,000 | |||||
Foreign Exchange Contract | Contract To Sell Canadian Dollar and Purchase Euro | ||||||
Derivative [Line Items] | ||||||
Notional amount | 13,000,000 | |||||
Foreign Exchange Contract | Contract To Purchase Polish Zloty And Sell Euro | ||||||
Derivative [Line Items] | ||||||
Notional amount | 13,000,000 | |||||
Foreign Exchange Contract | Contract To Sell Australian Dollar And Purchase Euro | ||||||
Derivative [Line Items] | ||||||
Notional amount | 10,000,000 | 9,000,000 | ||||
Cross Currency Swap | ||||||
Derivative [Line Items] | ||||||
Notional amount | $ 1,691,000,000 | $ 1,616,000,000 | ||||
Senior Notes Due 2023 | Senior Notes | ||||||
Derivative [Line Items] | ||||||
Interest rate | 2.25% | |||||
Face amount | $ 533,000,000 | € 500,000,000 | ||||
Repayments of Debt | $ 527,000,000 |
Derivative Financial Instrume_5
Derivative Financial Instruments - Fair Value of Foreign Exchange Contracts (Details) - Designated as Hedging Instrument - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Other non-current assets | ||
Derivatives, Fair Value [Line Items] | ||
Assets | $ 9 | $ 79 |
Other non-current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Liabilities | $ (54) | $ (6) |
Postretirement Benefit Plans (S
Postretirement Benefit Plans (Summary of Contributions by Year) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Retirement Benefits [Abstract] | |||
Defined Contribution | $ 74 | $ 53 | $ 60 |
Postretirement Benefit Plans _2
Postretirement Benefit Plans (Summary of Plan Assets, Benefit Obligation and Funded Status) (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | $ 296 | $ 246 | |
Projected benefit obligation | (613) | (513) | |
Unfunded status of the plans | (317) | (267) | |
Amounts recognized in the balance sheet | |||
Other non-current assets | 43 | 34 | |
Accrued and other current liabilities | (16) | (15) | |
Accrued post-retirement benefit obligations | (344) | (286) | |
Net amount recognized | (317) | (267) | |
Accumulated other comprehensive income: | |||
Net actuarial losses | (95) | (56) | |
Prior service credit | 0 | 3 | |
Total | (95) | (53) | |
Pension | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 296 | 246 | |
Projected benefit obligation | (582) | (482) | |
Unfunded status of the plans | (286) | (236) | |
Amounts recognized in the balance sheet | |||
Other non-current assets | 43 | 34 | |
Accrued and other current liabilities | (13) | (12) | |
Accrued post-retirement benefit obligations | (316) | (258) | |
Net amount recognized | (286) | (236) | |
Accumulated other comprehensive income: | |||
Net actuarial losses | (88) | (50) | |
Prior service credit | (2) | (1) | |
Total | (90) | (51) | |
Other Benefits | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 0 | 0 | |
Projected benefit obligation | (31) | (31) | $ (42) |
Unfunded status of the plans | (31) | (31) | |
Amounts recognized in the balance sheet | |||
Other non-current assets | 0 | 0 | |
Accrued and other current liabilities | (3) | (3) | |
Accrued post-retirement benefit obligations | (28) | (28) | |
Net amount recognized | (31) | (31) | |
Accumulated other comprehensive income: | |||
Net actuarial losses | (7) | (6) | |
Prior service credit | 2 | 4 | |
Total | (5) | (2) | |
Level 1 | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 51 | 40 | |
Level 2 | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 147 | 135 | |
Level 3 | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 26 | 20 | $ 368 |
NAV Practical Expedient | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | $ 72 | $ 51 |
Postretirement Benefit Plans _3
Postretirement Benefit Plans (Summary of Amounts Recognized in Financial Statements) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Change in benefit obligation: | |||
Benefit obligation at beginning of year | $ 513 | ||
Benefit obligation at end of year | 613 | $ 513 | |
Change in plan assets: | |||
Beginning Balance | 246 | ||
Ending Balance | 296 | 246 | |
Unfunded status of the plans | (317) | (267) | |
United States | |||
Change in benefit obligation: | |||
Benefit obligation at beginning of year | 92 | 117 | |
Service cost | 2 | 3 | $ 3 |
Interest cost | 5 | 3 | 3 |
Benefits paid | (8) | (7) | |
Actuarial loss (gain) (a) | 6 | (24) | |
Plan amendments, settlements and curtailments (b) | 2 | 0 | |
Acquisitions | 0 | 0 | |
Foreign currency translation and other | 0 | 0 | |
Benefit obligation at end of year | 99 | 92 | 117 |
Change in plan assets: | |||
Beginning Balance | 80 | 108 | |
Employer contributions | 5 | 0 | |
Actual return on plan assets | 9 | (21) | |
Benefits paid | (8) | (7) | |
Plan amendments, settlements and curtailments | 0 | 0 | |
Acquisitions | 0 | 0 | |
Foreign currency translation and other | 0 | 0 | |
Ending Balance | 86 | 80 | 108 |
Unfunded status of the plans | (13) | (12) | |
International defined benefit pension plans | |||
Change in benefit obligation: | |||
Benefit obligation at beginning of year | 390 | 926 | |
Service cost | 7 | 12 | 14 |
Interest cost | 16 | 13 | 11 |
Benefits paid | (18) | (29) | |
Actuarial loss (gain) (a) | 36 | (241) | |
Plan amendments, settlements and curtailments (b) | (2) | (202) | |
Acquisitions | 31 | 0 | |
Foreign currency translation and other | 23 | (89) | |
Benefit obligation at end of year | 483 | 390 | 926 |
Change in plan assets: | |||
Beginning Balance | 166 | 571 | |
Employer contributions | 17 | 16 | |
Actual return on plan assets | 16 | (133) | |
Benefits paid | (18) | (29) | |
Plan amendments, settlements and curtailments | (1) | (202) | |
Acquisitions | 22 | 0 | |
Foreign currency translation and other | 8 | (57) | |
Ending Balance | 210 | 166 | $ 571 |
Unfunded status of the plans | $ (273) | $ (224) |
Postretirement Benefit Plans (R
Postretirement Benefit Plans (Rollforward of Obligation) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Change in benefit obligation: | |||
Benefit obligation at beginning of year | $ 513 | ||
Benefit obligation at end of year | 613 | $ 513 | |
Other postretirement benefit plans | |||
Change in benefit obligation: | |||
Benefit obligation at beginning of year | 31 | 42 | |
Interest cost | 2 | 1 | $ 1 |
Benefits paid | (3) | (3) | |
Actuarial gain | 1 | (9) | |
Benefit obligation at end of year | $ 31 | $ 31 | $ 42 |
Postretirement Benefit Plans _4
Postretirement Benefit Plans (Summary of Status of Plans) (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Retirement Benefits [Abstract] | ||
Projected benefit obligation | $ 474 | $ 391 |
Accumulated benefit obligation | 448 | 372 |
Fair value of plan assets | $ 146 | $ 121 |
Postretirement Benefit Plans (C
Postretirement Benefit Plans (Components of Pension Plans) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Other changes in plan assets and benefit obligations recognized in other comprehensive income | |||
Net loss | $ 35 | $ (101) | $ (51) |
Settlement | 0 | (137) | 0 |
Total recognized in comprehensive income | 3 | (8) | 2 |
Defined benefit pension plans | |||
Net periodic benefit cost: | |||
Net periodic benefit cost | 11 | 165 | 31 |
Other changes in plan assets and benefit obligations recognized in other comprehensive income | |||
Change recognized in other comprehensive income | 38 | (279) | (83) |
Total recognized in comprehensive income | 49 | (114) | (52) |
United States | |||
Net periodic benefit cost: | |||
Service cost | 2 | 3 | 3 |
Interest cost | 5 | 3 | 3 |
Expected return on plan assets | (6) | (6) | (7) |
Amortization of net actuarial loss | 0 | 3 | 4 |
Net periodic benefit cost | 1 | 3 | 3 |
Other changes in plan assets and benefit obligations recognized in other comprehensive income | |||
Net loss | 3 | 3 | 0 |
Amortization of net actuarial loss | 0 | (3) | (4) |
Change recognized in other comprehensive income | 3 | 0 | (4) |
International defined benefit pension plans | |||
Net periodic benefit cost: | |||
Service cost | 7 | 12 | 14 |
Interest cost | 16 | 13 | 11 |
Expected return on plan assets | (11) | (13) | (14) |
Amortization of net actuarial loss | (2) | 10 | 17 |
U.K. pension settlement expense | 0 | 140 | 0 |
Net periodic benefit cost | 10 | 162 | 28 |
Other changes in plan assets and benefit obligations recognized in other comprehensive income | |||
Net loss | 31 | (95) | (51) |
Amortization of net actuarial loss | 2 | (8) | (17) |
Settlement | 0 | (137) | 0 |
Foreign Exchange | 2 | (39) | (11) |
Change recognized in other comprehensive income | $ 35 | $ (279) | $ (79) |
Postretirement Benefit Plans (A
Postretirement Benefit Plans (Amounts Recognized in OCI) (Details) - Other Benefits - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Defined Benefit Plan Disclosure | |||
Interest cost | $ 2 | $ 1 | $ 1 |
Defined Benefit Plan, Amortization of Prior Service Cost (Credit) | 2 | 2 | 2 |
Amortization of net actuarial loss | 0 | 1 | 2 |
Net periodic benefit cost | $ 0 | $ 0 | $ 1 |
Postretirement Benefit Plans _5
Postretirement Benefit Plans (Components of Net Periodic Benefit Cost) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Defined Benefit Plan Disclosure | |||
Net loss | $ 35 | $ (101) | $ (51) |
Total recognized in comprehensive income | 3 | (8) | 2 |
Other Benefits | |||
Defined Benefit Plan Disclosure | |||
Net loss | 1 | (9) | 0 |
Defined Benefit Plan, Prior Service Credit | 0 | 0 | 0 |
Amortization of prior service credit | 2 | 2 | 3 |
Amortization of net actuarial loss | 0 | (1) | (2) |
Change recognized in other comprehensive loss | $ 3 | $ (8) | $ 1 |
Postretirement Benefit Plans (D
Postretirement Benefit Plans (Discount Rates) (Details) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Net Periodic Benefit Cost Assumptions | |||
Defined Benefit Plan, Assumptions Used Calculating Net Periodic Benefit Cost, Expected Long-Term Rate of Return on Plan Assets | 5.84% | ||
United States | |||
Benefit Obligation Assumptions | |||
Discount rate | 5% | 5.25% | 3% |
Net Periodic Benefit Cost Assumptions | |||
Discount rate | 5.25% | 3% | 2.50% |
Defined Benefit Plan, Assumptions Used Calculating Net Periodic Benefit Cost, Expected Long-Term Rate of Return on Plan Assets | 6% | 5.50% | 6.50% |
International | |||
Benefit Obligation Assumptions | |||
Discount rate | 3.55% | 4.13% | 1.55% |
Rate of future compensation increase | 2.87% | 2.79% | 2.84% |
Net Periodic Benefit Cost Assumptions | |||
Discount rate | 4.13% | 1.55% | 1.06% |
Defined Benefit Plan, Assumptions Used Calculating Net Periodic Benefit Cost, Expected Long-Term Rate of Return on Plan Assets | 5.85% | 2.79% | 2.60% |
Rate of future compensation increase | 2.79% | 2.84% | 2.79% |
Postretirement Benefit Plans (V
Postretirement Benefit Plans (Valuation Assumptions) (Details) | 12 Months Ended |
Dec. 31, 2023 | |
Retirement Benefits [Abstract] | |
Defined Benefit Plan, Assumptions Used Calculating Net Periodic Benefit Cost, Expected Long-Term Rate of Return on Plan Assets | 5.84% |
Postretirement Benefit Plans _6
Postretirement Benefit Plans (Target Allocations) (Details) | Dec. 31, 2023 | Dec. 31, 2022 |
Equity securities | ||
Defined Benefit Plan Disclosure | ||
Actual allocation of plan assets | 43.90% | 47.10% |
Fixed income | ||
Defined Benefit Plan Disclosure | ||
Actual allocation of plan assets | 42.90% | 43.90% |
Cash and other | ||
Defined Benefit Plan Disclosure | ||
Actual allocation of plan assets | 13.20% | 9% |
Minimum | Equity securities | ||
Defined Benefit Plan Disclosure | ||
Target allocation percentages | 35% | |
Minimum | Fixed income | ||
Defined Benefit Plan Disclosure | ||
Target allocation percentages | 45% | |
Minimum | Cash and other | ||
Defined Benefit Plan Disclosure | ||
Target allocation percentages | 0% | |
Maximum | Equity securities | ||
Defined Benefit Plan Disclosure | ||
Target allocation percentages | 75% | |
Maximum | Fixed income | ||
Defined Benefit Plan Disclosure | ||
Target allocation percentages | 60% | |
Maximum | Cash and other | ||
Defined Benefit Plan Disclosure | ||
Target allocation percentages | 15% |
Postretirement Benefit Plans (F
Postretirement Benefit Plans (Fair Value of Plan Assets) (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | $ 296 | $ 246 | |
Level 1 | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 51 | 40 | |
Level 2 | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 147 | 135 | |
Level 3 | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 26 | 20 | $ 368 |
NAV Practical Expedient | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 72 | 51 | |
Global stock funds/securities | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 112 | 97 | |
Global stock funds/securities | Level 1 | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 43 | 37 | |
Global stock funds/securities | Level 2 | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 56 | 51 | |
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 | 13 | 9 | |
Diversified growth and income funds | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 18 | 19 | |
Diversified growth and income funds | Level 1 | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 0 | 0 | |
Diversified growth and income funds | Level 2 | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 0 | 0 | |
Diversified growth and income funds | Level 3 | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 0 | 0 | |
Diversified growth and income funds | NAV Practical Expedient | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 18 | 19 | |
Corporate bonds | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 77 | 73 | |
Corporate bonds | Level 1 | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 1 | 1 | |
Corporate bonds | Level 2 | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 64 | 67 | |
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 | 12 | 5 | |
Government bonds | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 45 | 31 | |
Government bonds | Level 1 | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 0 | 0 | |
Government bonds | Level 2 | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 22 | 13 | |
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 | 23 | 18 | |
Hedging instruments | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 5 | 4 | |
Hedging instruments | Level 1 | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 0 | 0 | |
Hedging instruments | Level 2 | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 5 | 4 | |
Hedging instruments | Level 3 | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 0 | 0 | |
Hedging instruments | NAV Practical Expedient | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 0 | 0 | |
Insurance contracts and other | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 32 | 20 | |
Insurance contracts and other | Level 1 | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 0 | 0 | |
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 | 26 | 20 | |
Insurance contracts and other | NAV Practical Expedient | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 6 | 0 | |
Cash and cash equivalents | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 7 | 2 | |
Cash and cash equivalents | Level 1 | |||
Defined Benefit Plan Disclosure | |||
Fair value of plan assets | 7 | 2 | |
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 | |
Cash and cash equivalents | NAV Practical Expedient | |||
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, 2023 | Dec. 31, 2022 | |
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ||
Beginning Balance | $ 246 | |
Ending Balance | 296 | $ 246 |
Level 3 | ||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ||
Beginning Balance | 20 | 368 |
Purchases, sales, settlements | 5 | (210) |
Actual return on plan assets | 0 | (99) |
Impact on currency | 1 | (39) |
Ending Balance | $ 26 | $ 20 |
Postretirement Benefit Plans _8
Postretirement Benefit Plans (Future Benefit Payments) (Details) $ in Millions | Dec. 31, 2023 USD ($) |
Pension | |
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block | |
2018 | $ 30 |
2019 | 30 |
2020 | 31 |
2021 | 32 |
2022 | 33 |
Years 2022-2026 | 166 |
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 | $ 11 |
Postretirement Benefit Plans _9
Postretirement Benefit Plans (Details Textual) shares in Thousands, £ in Millions | 1 Months Ended | 12 Months Ended | |||
Sep. 30, 2022 USD ($) | Sep. 30, 2022 GBP (£) | Dec. 31, 2023 USD ($) shares | Dec. 31, 2022 USD ($) shares | Dec. 31, 2021 USD ($) | |
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 | shares | 231 | 245 | |||
Charge resulting from curtailment or settlement recorded | $ 0 | $ 137,000,000 | $ 0 | ||
Prior service credit | 0 | (3,000,000) | |||
Accumulated benefit obligation | 551,000,000 | 460,000,000 | |||
Estimated pension plan contributions during the next fiscal quarter | 8,000,000 | ||||
Net gain (loss) | $ (35,000,000) | 101,000,000 | 51,000,000 | ||
Defined Benefit Plan, Assumptions Used Calculating Net Periodic Benefit Cost, Expected Long-Term Rate of Return on Plan Assets | 5.84% | ||||
Fair value of plan assets | $ 296,000,000 | 246,000,000 | |||
U.K. pension settlement expense | 0 | (140,000,000) | 0 | ||
Pension | |||||
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block | |||||
Prior service credit | 2,000,000 | 1,000,000 | |||
Employer Contribution to defined benefit Plan | 25,000,000 | ||||
Fair value of plan assets | 296,000,000 | 246,000,000 | |||
Other Benefits | |||||
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block | |||||
Prior service credit | (2,000,000) | (4,000,000) | |||
Net actuarial losses, before tax | 0 | (1,000,000) | (2,000,000) | ||
Prior service credit, before tax | (2,000,000) | (2,000,000) | (2,000,000) | ||
Employer Contribution to defined benefit Plan | 19,000,000 | ||||
Net gain (loss) | (1,000,000) | 9,000,000 | 0 | ||
Fair value of plan assets | $ 0 | 0 | |||
Minimum | |||||
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block | |||||
Employer matching contribution | 3% | ||||
Estimated pension plan contributions during next fiscal year | $ 31,000,000 | ||||
Maximum | |||||
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block | |||||
Employer matching contribution | 7% | ||||
Estimated pension plan contributions during next fiscal year | $ 37,000,000 | ||||
Cash and cash equivalents | |||||
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block | |||||
Fair value of plan assets | 7,000,000 | 2,000,000 | |||
International defined benefit pension plans | |||||
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block | |||||
Charge resulting from curtailment or settlement recorded | 0 | 137,000,000 | 0 | ||
Net actuarial losses, before tax | 2,000,000 | (10,000,000) | (17,000,000) | ||
Employer Contribution to defined benefit Plan | 17,000,000 | 16,000,000 | |||
Net gain (loss) | $ (31,000,000) | $ 95,000,000 | $ 51,000,000 | ||
Defined Benefit Plan, Assumptions Used Calculating Net Periodic Benefit Cost, Expected Long-Term Rate of Return on Plan Assets | 5.85% | 2.79% | 2.60% | ||
Discount rate | 3.55% | 4.13% | 1.55% | ||
Fair value of plan assets | $ 210,000,000 | $ 166,000,000 | $ 571,000,000 | ||
Discount rate | 4.13% | 1.55% | 1.06% | ||
UNITED KINGDOM | |||||
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block | |||||
U.K. pension settlement expense | $ 140,000,000 | £ 123 |
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, 2023 | Dec. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Stock Options Outstanding, Beginning | 1,935 | |
Stock options, Granted | 2,153 | |
Stock options, Exercised | (1,930) | |
Stock options, Forfeited | (31) | |
Stock Options Outstanding, Ending | 2,150 | 1,935 |
Options exercisable, Shares | 1,577 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | ||
Weighted Average Exercise Price, Outstanding, Beginning | $ 67.55 | |
Weighted Average Exercise Price / Share, Granted | 38.13 | |
Weighted Average Exercise Price / Share, Exercised | 32.40 | |
Weighted Average Exercise Price / Share, Forfeited | 85.46 | |
Weighted Average Exercise Price, Outstanding, Ending | 69.34 | $ 67.55 |
Options exercisable, Weighted Average Exercise Price | $ 62.39 | |
Weighted Average Remaining Contractual Term, Outstanding | 5 years 10 months 24 days | 5 years 10 months 24 days |
Aggregate intrinsic value of outstanding stock options | $ 97 | |
Weighed average remaining contractual term, Options exercisable | 5 years | |
Aggregate intrinsic value of exercisable stock options | $ 82 | |
Vested and non-vested expected to vest as of December 31, 2023 | 2,107 | |
Vested and non-vested expected to vest as of December 31, 2023 | $ 68.82 | |
Vested and non-vested expected to vest as of December 31, 2023 | 5 years 7 months 6 days | |
Aggregate intrinsic value, vested and expected to vest | $ 96 | |
Share Based Compensation Arrangement By Share Based Payment Award, Other Changes In Stock Option Activity, Number Of Shares | 23 | |
Share Based Compensation Arrangement By Share Based Payment Award, Weighted Average Exercise Price, Other Changes To Option Activity | $ 73.16 |
Share-Based Compensation Plan_3
Share-Based Compensation Plans (Fair Value Assumptions) (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share-Based Payment Arrangement [Abstract] | |||
Dividend yield | 1.31% | 1.37% | 1.10% |
Volatility | 27.30% | 26.25% | 26.29% |
Risk-free interest rate | 4.25% | 1.74% | 0.86% |
Expected term (in years) | 5 years 4 months 24 days | 5 years 7 months 6 days | 5 years 8 months 12 days |
Weighted-average fair value / share | $ 29.06 | $ 20.38 | $ 23.26 |
Share-Based Compensation Plan_4
Share-Based Compensation Plans (Restricted Stock Unit Activity) (Details) shares in Thousands | 12 Months Ended |
Dec. 31, 2023 $ / shares shares | |
Summary of restricted stock activity | |
Restricted Stock, Granted | shares | 36 |
Forfeited | shares | (2) |
Weighted Average Grant Date Fair Value / Share | |
Weighted Average Grant Date Fair Value, Outstanding Beginning Balance (in shares) | $ 86.77 |
Weighted Average Grant Date Fair Value, Granted (in shares) | 100.69 |
Weighted Average Grant Date Fair Value, Forfeited (in shares) | 91.12 |
Weighted Average Grant Date Fair Value, Outstanding Ending Balance (in shares) | $ 94.19 |
Restricted Stock | |
Summary of restricted stock activity | |
Outstanding Shares, Beginning | shares | 553 |
Restricted Stock, Granted | shares | 1,049 |
Vested | shares | (699) |
Forfeited | shares | (41) |
Outstanding Shares, Ending | shares | 862 |
Weighted Average Grant Date Fair Value / Share | |
Weighted Average Grant Date Fair Value, Outstanding Beginning Balance (in shares) | $ 88.88 |
Weighted Average Grant Date Fair Value, Granted (in shares) | 103.08 |
Weighted Average Grant Date Fair Value, Vested | 38.29 |
Weighted Average Grant Date Fair Value, Forfeited (in shares) | 51.52 |
Weighted Average Grant Date Fair Value, Outstanding Ending Balance (in shares) | $ 98.49 |
Share-Based Compensation Plan_5
Share-Based Compensation Plans (Performance Share Activity) (Details) shares in Thousands | 12 Months Ended |
Dec. 31, 2023 $ / shares shares | |
Summary of Performance-based shares activity | |
Granted (in shares) | shares | 36 |
Forfeited | shares | (2) |
Weighted Average Grant Date Fair Value / Share | |
Weighted Average Grant Date Fair Value, Outstanding Beginning Balance (in shares) | $ 86.77 |
Weighted Average Grant Date Fair Value, Granted (in shares) | 100.69 |
Weighted Average Grant Date Fair Value, Forfeited (in shares) | 91.12 |
Weighted Average Grant Date Fair Value, Outstanding Ending Balance (in shares) | $ 94.19 |
ROIC Performance Share Unit Grants | Performance Based Shares | |
Summary of Performance-based shares activity | |
Outstanding Shares, Beginning | shares | 146 |
Granted (in shares) | shares | 36 |
Forfeited | shares | (68) |
Outstanding Shares, Ending | shares | 114 |
Weighted Average Grant Date Fair Value / Share | |
Weighted Average Grant Date Fair Value, Outstanding Beginning Balance (in shares) | $ 88.78 |
Weighted Average Grant Date Fair Value, Granted (in shares) | 100.69 |
Weighted Average Grant Date Fair Value, Forfeited (in shares) | 82.40 |
Weighted Average Grant Date Fair Value, Outstanding Ending Balance (in shares) | $ 97.70 |
TSR Performance Share Unit Grants | Performance Based Shares | |
Summary of Performance-based shares activity | |
Outstanding Shares, Beginning | shares | 178 |
Granted (in shares) | shares | 72 |
Vested | shares | (102) |
Forfeited | shares | (8) |
Outstanding Shares, Ending | shares | 180 |
Weighted Average Grant Date Fair Value / Share | |
Weighted Average Grant Date Fair Value, Outstanding Beginning Balance (in shares) | $ 100.67 |
Weighted Average Grant Date Fair Value, Granted (in shares) | 108.54 |
Weighted Average Grant Date Fair Value, Vested | 102.55 |
Weighted Average Grant Date Fair Value, Forfeited (in shares) | 100.99 |
Weighted Average Grant Date Fair Value, Outstanding Ending Balance (in shares) | $ 103.52 |
Share-based Compensation Arrangement By Share-based Payment Award, Equity Instruments Other Than Options, Adjustments In Period | shares | 40 |
Share-based Compensation Arrangement By Share-based Payment Award, Equity Instruments Other Than Options, Adjustments In Period, Weighted Average Grant Date Fair Value | $ 102.55 |
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, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | May 24, 2023 | Nov. 18, 2022 | Oct. 31, 2011 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share-based compensation | $ 60 | $ 37 | $ 33 | |||
Proceeds from exercise of employee stock options | 62 | 8 | 19 | |||
Tax benefit from the exercise of stock options | $ 12 | $ 3 | $ 6 | |||
Shares awarded | 2,153 | |||||
Shares awarded | 36 | |||||
Shares outstanding | 2,150 | 1,935 | ||||
Non-vested options outstanding | 600 | 600 | 700 | |||
Weighted average grant date fair value | $ 88.48 | $ 87.62 | $ 84.66 | |||
Aggregate intrinsic value of outstanding stock options | $ 97 | |||||
Aggregate intrinsic value of exercisable stock options | 82 | |||||
Total intrinsic value of options exercised | 140 | $ 4 | $ 27 | |||
Stock Options | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Unamortized compensation expense | $ 8 | |||||
Weighted average period | 1 year 7 months 6 days | |||||
Restricted Stock | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Unamortized compensation expense | $ 42 | |||||
Weighted average period | 1 year 8 months 12 days | |||||
Shares awarded | 1,049 | |||||
Performance Based Shares | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Unamortized compensation expense | $ 15 | |||||
Weighted average period | 1 year 10 months 24 days | |||||
Requisite service periods | 3 years | |||||
Target payout percentage | 100% | |||||
2011 Omnibus Incentive Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Shares initially available for awards | 18,000 | |||||
Additional shares registered for issuance | 2,700 | 3,200 | ||||
Shares available for future grant | 5,600 |
Share-Based Compensation Plan_7
Share-Based Compensation Plans (TSR Fair Value Assumptions) (Details) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk-free interest rate | 4.25% | 1.74% | 0.86% |
Dividend yield | 1.31% | 1.37% | 1.10% |
TSR Performance Share Unit Grants | Performance Based Shares | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Volatility | 35.90% | 33.30% | 33.50% |
Risk-free interest rate | 4.66% | 1.44% | 0.24% |
Share-Based Compensation Plan_8
Share-Based Compensation Plans - Revenue Performance Share Units (Details) shares in Thousands | 12 Months Ended |
Dec. 31, 2023 $ / shares shares | |
Summary of Performance-based shares activity | |
Outstanding (in shares) | shares | 32 |
Granted (in shares) | shares | 36 |
Forfeited (in shares) | shares | (2) |
Outstanding (in shares) | shares | 66 |
Weighted Average Grant Date Fair Value / Share | |
Weighted Average Grant Date Fair Value, Outstanding Beginning Balance (in shares) | $ / shares | $ 86.77 |
Weighted Average Grant Date Fair Value, Granted (in shares) | $ / shares | 100.69 |
Weighted Average Grant Date Fair Value, Forfeited (in shares) | $ / shares | 91.12 |
Weighted Average Grant Date Fair Value, Outstanding Ending Balance (in shares) | $ / shares | $ 94.19 |
Capital Stock (Details Textual)
Capital Stock (Details Textual) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | 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) | $ 1.32 | $ 1.20 | $ 1.12 | |
Shares repurchased | 258 | 576 | 678 | |
Shares repurchased, value | $ 25 | $ 52 | ||
2015 Stock Repurchase Program | ||||
Class of Stock [Line Items] | ||||
Authorized amount | $ 500 | |||
Shares repurchased | 500 | |||
Shares repurchased, value | $ 46 | |||
Remaining authorized repurchase amount | $ 182 | |||
Settlement of Employee Tax Withholding Obligations | ||||
Class of Stock [Line Items] | ||||
Shares repurchased | 300 | 100 | ||
Shares repurchased, value | $ 25 | $ 6 |
Capital Stock (Changes in Commo
Capital Stock (Changes in Common Stock Outstanding) (Details) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Class of Stock [Line Items] | |||
Beginning Balance, January 1 | 180,253 | 180,392 | 180,354 |
Stock incentive plan net activity | 2,730 | 437 | 716 |
Repurchase of common stock | (258) | (576) | (678) |
Ending Balance, December 31 | 241,504 | 180,253 | 180,392 |
Evoqua Acquisition | |||
Class of Stock [Line Items] | |||
Shares issued for the Evoqua acquisition | 58,779 | 0 | 0 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||
Beginning Balance | $ (226) | ||
Foreign currency translation adjustment | (45) | $ (53) | $ 20 |
Amortization of prior service credit | (2) | (2) | (3) |
Foreign currency translation adjustment for post-retirement benefit plans | (2) | 39 | 11 |
Amortization of prior service cost and net actuarial loss on post-retirement benefit plans into other non-operating income (expense), net | 2 | (12) | (23) |
Ending Balance | (269) | (226) | |
Accumulated Other Comprehensive Income (Loss) | |||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||
Beginning Balance | (226) | (371) | (413) |
Foreign currency translation adjustment | (45) | (53) | 20 |
Income tax impact on foreign currency translation adjustment | (29) | 26 | 35 |
Amortization of prior service credit | (35) | 101 | 51 |
Foreign currency translation adjustment for post-retirement benefit plans | (2) | 39 | 11 |
Income tax expense on changes in post-retirement benefit plans, including settlement | 9 | (58) | (15) |
Income tax impact on amortization of post-retirement benefit plan items | 1 | (2) | (5) |
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), Reclassification, before Tax | (2) | ||
Unrealized loss on derivative hedge agreements | (24) | (10) | |
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), after Reclassification, Tax, Parent | 1 | 0 | |
Ending Balance | (269) | (226) | (371) |
Foreign Currency Translation | |||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||
Beginning Balance | (180) | (101) | (86) |
Foreign currency translation adjustment | (45) | (53) | 20 |
Income tax impact on foreign currency translation adjustment | (29) | 26 | 35 |
Ending Balance | (196) | (180) | (101) |
Postretirement Benefit Plans | |||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||
Beginning Balance | (41) | (268) | (330) |
Amortization of prior service credit | (35) | 101 | 51 |
Other Comprehensive Income (Loss), Defined Benefit Plan, Settlement and Curtailment Gain (Loss), after Tax | 137 | ||
Foreign currency translation adjustment for post-retirement benefit plans | (2) | 39 | 11 |
Income tax expense on changes in post-retirement benefit plans, including settlement | 9 | (58) | (15) |
Income tax impact on amortization of post-retirement benefit plan items | 1 | (2) | (5) |
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), Reclassification, before Tax | (2) | ||
Unrealized loss on derivative hedge agreements | (24) | (10) | |
Ending Balance | (72) | (41) | (268) |
Derivative Instruments | |||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||
Beginning Balance | (5) | (2) | 3 |
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), after Reclassification, Tax, Parent | 1 | 0 | |
Ending Balance | (1) | (5) | (2) |
Nonoperating Income (Expense) | Accumulated Other Comprehensive Income (Loss) | |||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||
Amortization of prior service cost and net actuarial loss on post-retirement benefit plans into other non-operating income (expense), net | (4) | 10 | 20 |
Nonoperating Income (Expense) | Postretirement Benefit Plans | |||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||
Amortization of prior service cost and net actuarial loss on post-retirement benefit plans into other non-operating income (expense), net | (4) | 10 | 20 |
Revenue | Accumulated Other Comprehensive Income (Loss) | |||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||
Reclassification of unrealized loss on foreign exchange agreements into revenue | (1) | ||
Revenue | Derivative Instruments | |||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||
Reclassification of unrealized loss on foreign exchange agreements into revenue | (3) | (19) | (1) |
Cost of Revenue | Postretirement Benefit Plans | |||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||
Other Comprehensive Income (Loss), Defined Benefit Plan, Settlement and Curtailment Gain (Loss), after Tax | $ 2 | ||
Cost of Revenue | Derivative Instruments | |||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||
Reclassification of unrealized loss on foreign exchange agreements into revenue | $ (4) | $ (4) |
Commitments and Contingencies_2
Commitments and Contingencies (Rollforward of Warranties) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Warranties | |||
Warranty accrual – January 1 | $ 54 | $ 57 | $ 65 |
Net charges for product warranties in the period | 29 | 24 | 27 |
Net Evoqua additions from acquisition | 10 | 0 | 0 |
Settlement of warranty claims | (32) | (25) | (32) |
Foreign currency and other | 2 | (2) | (3) |
Warranty accrual – December 31 | $ 63 | $ 54 | $ 57 |
Commitments and Contingencies_3
Commitments and Contingencies (Details Textual) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |||
Loss contingency accrued | $ 18 | $ 5 | |
Guarantee amounts | 729 | 451 | |
Estimated environmental matters | 4 | ||
Warranty expense | $ 29 | $ 24 | $ 27 |
Segment and Geographic Data (Su
Segment and Geographic Data (Summary of Operating Results by Segment) (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 USD ($) Segment | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Segment Reporting Information [Line Items] | |||
Number of Reportable Segments | Segment | 4 | ||
Financial information for each reportable segment | |||
Revenue | $ 7,364 | $ 5,522 | $ 5,195 |
Operating income | 652 | 622 | 585 |
Interest Expense | 49 | 50 | 76 |
U.K. pension settlement expense | 0 | 140 | 0 |
Other non-operating income, net | 33 | 7 | 0 |
(Loss) Gain on sale of businesses | (1) | 1 | 2 |
Income before taxes | 635 | 440 | 511 |
Depreciation and amortization | 436 | 236 | 245 |
Capital expenditures | 271 | 208 | 208 |
Water Infrastructure | |||
Financial information for each reportable segment | |||
Revenue | 2,967 | 2,364 | 2,247 |
Operating income | 419 | 418 | 387 |
Depreciation and amortization | 110 | 53 | 51 |
Capital expenditures | 83 | 71 | 74 |
Applied Water | |||
Financial information for each reportable segment | |||
Revenue | 1,853 | 1,767 | 1,613 |
Operating income | 310 | 258 | 240 |
Depreciation and amortization | 21 | 19 | 22 |
Capital expenditures | 32 | 21 | 22 |
Measurement and Control Solutions | |||
Financial information for each reportable segment | |||
Revenue | 1,729 | 1,391 | 1,335 |
Operating income | 113 | 2 | 12 |
Depreciation and amortization | 139 | 137 | 145 |
Capital expenditures | 68 | 77 | 79 |
Regional Selling Locations | |||
Financial information for each reportable segment | |||
Depreciation and amortization | 25 | 19 | 20 |
Capital expenditures | 20 | 23 | 25 |
Corporate and other | |||
Financial information for each reportable segment | |||
Operating income | (198) | (56) | (54) |
Depreciation and amortization | 11 | 8 | 7 |
Capital expenditures | 20 | 16 | 8 |
Integrated Solutions & Services | Operating Segments | |||
Financial information for each reportable segment | |||
Revenue | 815 | 0 | 0 |
Operating income | 8 | 0 | 0 |
Depreciation and amortization | 130 | 0 | 0 |
Capital expenditures | $ 48 | $ 0 | $ 0 |
Segment and Geographic Data (_2
Segment and Geographic Data (Summary of Revenue and Property, Plant and Equipment by Geographical Location) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenue | $ 7,364 | $ 5,522 | $ 5,195 |
Property, plant and equipment | 1,169 | 630 | 644 |
United States | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenue | 3,956 | 2,573 | 2,280 |
Property, plant and equipment | 725 | 239 | 251 |
Europe | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenue | 1,655 | 1,411 | 1,414 |
Property, plant and equipment | 268 | 227 | 231 |
Asia Pacific | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenue | 1,182 | 1,074 | 1,066 |
Property, plant and equipment | 141 | 133 | 132 |
Other | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenue | 571 | 464 | 435 |
Property, plant and equipment | $ 35 | $ 31 | $ 30 |
Uncategorized Items - xyl-20231
Label | Element | Value |
Stockholders' Equity, Other | us-gaap_StockholdersEquityOther | $ 1,000,000 |
Stock Issued During Period, Value, New Issues | us-gaap_StockIssuedDuringPeriodValueNewIssues | 6,121,000,000 |
Shares Issued, Value, Share-Based Payment Arrangement, after Forfeiture | us-gaap_StockIssuedDuringPeriodValueShareBasedCompensation | 160,000,000 |
Common Stock [Member] | ||
Stock Issued During Period, Value, New Issues | us-gaap_StockIssuedDuringPeriodValueNewIssues | 1,000,000 |
Noncontrolling Interest [Member] | ||
Stockholders' Equity, Other | us-gaap_StockholdersEquityOther | 1,000,000 |
Additional Paid-in Capital [Member] | ||
Stock Issued During Period, Value, New Issues | us-gaap_StockIssuedDuringPeriodValueNewIssues | 6,120,000,000 |
Shares Issued, Value, Share-Based Payment Arrangement, after Forfeiture | us-gaap_StockIssuedDuringPeriodValueShareBasedCompensation | $ 160,000,000 |