Segment Information

9 Months Ended

Sep. 30, 2023

Segment Reporting [Abstract]

Segment Information

Segment Information

Our business has four reportable segments: Water Infrastructure, Applied Water, Measurement & Control Solutions and Integrated Solutions & Services. 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 a range of highly differentiated and scalable products and technologies with product offerings in the filtration and separation, disinfection, wastewater solutions, anode and electrochlorination technology, and aquatics technologies and solutions spaces. The Applied Water segment serves many of the primary uses of water and focuses on the residential, commercial and industrial markets. The Applied Water segment's major products include pumps, valves, heat exchangers, controls and dispensing equipment. The Measurement & Control Solutions segment focuses on developing advanced technology solutions that enable intelligent use and conservation of critical water and energy resources as well as analytical instrumentation used in the testing of water. The Measurement & Control Solutions segment's major products include smart metering, networked communications, measurement and control technologies, critical infrastructure technologies, software and services including cloud-based analytics, remote monitoring and data management, leak detection and pressure monitoring solutions and testing equipment. As a result of the Evoqua acquisition, Xylem has a new segment for Integrated Solutions and Services. This 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. Key offerings within this segment also 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 section of Note 1 in the 2022 Annual Report. The following table contains financial information for each reportable segment:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in millions)	2023		2022		2023		2022
Revenue:
Water Infrastructure	$	803	$	574	$	2,096	$	1,696
Applied Water	465		458		1,396		1,312
Measurement & Control Solutions	440		348		1,261		1,008
Integrated Solutions & Services	368		—		493		—
Total	$	2,076	$	1,380	$	5,246	$	4,016
Operating Income (Loss):
Water Infrastructure	$	128	$	104	$	304	$	286
Applied Water	73		77		240		197
Measurement & Control Solutions	27		(2)		73		(17)
Integrated Solutions & Services	(3)		—		(10)		—
Corporate and other	(34)		(11)		(166)		(41)
Total operating income	$	191	$	168	$	441	$	425
Interest expense	$	14	$	12	$	35	$	37
U.K. pension settlement expense	—		140		—		140
Other non-operating income, net	8		1		19		2
Gain from sale of business	—		—		—		1
Income before taxes	$	185	$	17	$	425	$	251
Depreciation and Amortization:
Water Infrastructure	$	30	$	12	$	68	$	39
Applied Water	6		4		16		14
Measurement & Control Solutions	34		35		103		103
Integrated Solutions & Services	66		—		86		—
Regional selling locations (a)	7		5		18		14
Corporate and other	4		2		8		6
Total	$	147	$	58	$	299	$	176
Capital Expenditures:
Water Infrastructure	$	22	$	19	$	54	$	49
Applied Water	9		6		24		14
Measurement & Control Solutions	18		19		50		61
Integrated Solutions & Services	19		—		25		—
Regional selling locations (b)	4		5		15		15
Corporate and other	2		4		9		9
Total	$	74	$	53	$	177	$	148

(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.