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Acquisitions and Divestitures (Tables)

9 Months Ended

Sep. 30, 2023

Business Combinations [Abstract]

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

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			266
Prepaid and other current assets			74
Assets held for sale			8
Property, plant and equipment, net			511
Goodwill			4,442
Other intangible assets, net			2,245
Other non-current assets			192
Non-current assets held for sale			85
Accounts payable			(210)
Accrued and other current liabilities			(347)
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			(124)
Deferred income tax liabilities			(536)
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)			Fair Value (in millions)
Trademarks			6			$	60
Proprietary technology and patents			4 - 9			128
Customer and distributor relationships			7 - 17			1,875
Backlog			1 - 8			90
Permits			8			65
Software			1 - 13			27
Total						$	2,245

Pro Forma Information

The amounts of revenue and net loss from continuing operations before income taxes of Evoqua since the acquisition date included in the Consolidated Income Statement are as follows:

(in millions)			Three months ended September 30, 2023						Nine months ended September 30, 2023
Revenue			$	540					$	718
Loss before taxes			$	14					$	63

The following table summarizes, on an unaudited pro forma basis, the condensed combined results of operations of the Company for the three and nine months ended September 30, 2023 and 2022, assuming the acquisition had occurred on January 1, 2022.

			(Unaudited) Three Months Ended September 30,									(Unaudited) Nine Months Ended September 30,
(in millions)			2023						2022			2023						2022
Revenue			$	2,076					$	1,885		$	6,025					$	5,387
Net income			$	180					$	28		$	358					$	102

X

- Definition

Tabular disclosure of pro forma results of operations for a material business acquisition or series of individually immaterial business acquisitions that are material in the aggregate.

+ References

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-Name Accounting Standards Codification
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