Xylem (XYL) Financial History

We periodically receive claims alleging infringement or misappropriation of third-party intellectual property.

We rely on numerous patents, trademarks, copyrights, trade secrets, and other intellectual property, as well as licenses to third-party intellectual property that are important to our business.

Infringement or expiration of our intellectual property rights, or allegations that we have infringed on the intellectual property rights of third parties could adversely affect us.

With global and diverse operations and increasing regulation and enforcement globally, we will continue to face legal and compliance risks.

From time to time, we are involved in legal and regulatory proceedings that are incidental to the operation of our businesses (including that of acquired or previously owned entities).

Increasing public and governmental concern regarding the environment and the effects of volatile weather and changing climate patterns has, and may continue to, result in new or increased legal and regulatory requirem…

Our operations, products and services are subject to various federal, state, and local or foreign laws and regulations designed to protect the public, employees and the environment, including those related to: emissio…

To conduct our business and operations, we collect, process, use, maintain, and move data across borders and are continuing to implement AI.

Our global operations are subject to a wide variety of U.S.

Failure to comply with business conduct laws, regulations and policies, including anti-corruption, anti-trust, trade, and data privacy and security, could have a material adverse impact on us.

Our businesses are regularly examined by various tax authorities worldwide.

Tax laws, regulations, and administrative practices in various jurisdictions may change, with or without notice, due to economic, political and other conditions.

capitalization.

We have a significant amount of goodwill and purchased intangible assets on our Consolidated Balance Sheets as a result of acquisitions.

Our businesses are impacted by short cycle and book-and-bill business to varying degrees, which may be difficult to predict, or we may have limited visibility into particularly for the business we transact through our…

Sales outside the U.S.

We are subject to increasing regulatory requirements around sustainability-related disclosures in the U.S.

We may face increased scrutiny from the investment community, regulators, media (including social media) and other stakeholders regarding our sustainability activities, goals, targets and objectives, and our methodolo…

Severe weather events and other effects of volatile weather patterns have caused, and may continue to cause, disruptions to our facilities and operations, and those of our customers and suppliers, as well as fluctuati…

The unpredictable nature, frequency, and severity of, and changes in weather events, patterns and related conditions - such as heavy flooding, prolonged droughts, wildfires, rainfall amounts and intensity, sea levels,…

Weather conditions, including the effects of changing climate patterns and related governmental or regulatory efforts to mitigate such effects, may cause volatility in our served markets and demand for our products.

New products designed for use in the U.S.

To support our growth strategy, we continue to realign and enhance our portfolio by pursuing the acquisition of companies, assets, technologies, product lines and customer channels that complement or expand our busine…

Our strategy includes acquisitions and divestitures, which we may be unable to execute successfully.

Successful implementation and execution of these actions are critical to achieving our strategy and long-range plan through cost savings, competitiveness, and growth.

We are engaged in an ongoing, multi-year effort to transform our operating model, including our businesses and supporting functions, and have initiated related restructuring and realignment actions.

Periodically, we have and may continue to initiate simplification, productivity, restructuring, and realignment actions for various reasons, including to optimize our cost structure, increase profitability, drive grow…

Defects or quality issues in the manufacture, design, software, AI capabilities, security or service of our products (including finished goods, parts or components that we source from third parties), unanticipated or…

Defects, unanticipated or improper use, or inadequate disclosures about our products could adversely affect our business, reputation and financial condition.

Our success depends to a significant extent on our ability to attract, retain and develop highly qualified employees in leadership positions, and in strategic or core areas, such as engineering, innovation, systems mo…

We may be unable to retain key leadership, engineering, technology, sales, service and other talent or attract new qualified talent with diverse backgrounds, experiences and perspectives.

Many customers require performance guarantees for effluent produced by our water treatment equipment and services.

A portion of our revenue comes from complex, multi-year projects that involve significant risks, including delays, cost overruns, scope changes, unanticipated site conditions, design and engineering issues, incorrect…

We may be unable to successfully execute large projects or meet customer timelines, budget, performance, or safety requirements.

If these activities result in legal or environmental claims, damage or liabilities, we could incur significant costs, liabilities or reputational damage in connection with legal defense, investigation, remediation of…

Our water and wastewater treatment offerings involve unique risks and require compliance with a variety of laws and regulations, including the Clean Water Act and the Safe Drinking Water Act.

Our operations and businesses depend on our facilities and a complex and highly reactive global supply chain, including suppliers, indirect suppliers, and multi-tiered suppliers, some of which are single- or sole-sour…

Our business depends on a large and complex network of suppliers and indirect suppliers, contract manufacturers and subcontractors that perform manufacturing and customer-related services for us, commodities markets,…

Lack of or delays in availability of products, parts, raw materials, transportation, or energy from our supply chain, or supplier failures to meet requirements, could adversely affect our business.

While we maintain insurance coverage designed to address aspects of business interruption and cybersecurity risks, such coverage may not be sufficient to cover all losses or all types of claims that may arise.

We, and some third parties upon which we rely, have previously experienced cybersecurity incidents or other attempts from unauthorized parties, including criminal threat actors, nation states, or insiders (including e…

To mitigate risks, we maintain policies, standards, procedures, and technologies applicable to all employees and contractors, including: patching; passwords; network and data access; business continuity and disaster r…

customers; disrupting production, supply chain, shipments, billing, collections and customer service; disrupting data analytics or remote monitoring and control of operational systems; enabling unauthorized access, di…

We provide certain digitally enabled or internet-connected products, which may include the use of AI, such as pumps, controllers, meters, intelligent solutions, remote monitoring and condition assessment capabilities,…

We rely on information technology (“IT”), including operational technology and communication networks, to operate our manufacturing processes and equipment, enable business processes, support employee productivity, in…

Cybersecurity incidents, data breaches, or other disruptions, and software and system implementations involving our enterprise or operational information technology, connected products and services, or information tec…

As a result, we may not maintain our competitive position or market share, which could adversely affect our business, financial condition, cash flows or results of operations.

Our competitive position and future growth depend on a number of factors, including our ability to: (i) enhance and differentiate our offerings, business models and customer experience through efficiency, security, an…

We operate in highly competitive markets for our technologies, products and services.

Our manufacturing and operating costs fluctuate with volatility in the prices of commodities, parts, raw materials, energy, utilities, freight, logistics, and labor.

Inflation, tariffs, customs duties, and other manufacturing and operating cost increases or fluctuations have adversely affected, and may continue to adversely affect, our cash flows and results of operations.

Beyond the risks indicated above, our operations in emerging markets are subject to additional risks and uncertainties, including: (i) imposition of or increases in withholding or other taxes on remittances and other…

•theft, compromise, misappropriation or challenges in protecting our technology, intellectual property or data, including from cybersecurity and AI threats.

•changes to applicable U.S.

•any actual or potential threat, outbreak, uncertainty or escalation of terrorism, political instability, insurrection, war, or other armed conflicts, including between Russia and Ukraine, the U.S.

•uncertainty, volatility and impacts from the evolving global geopolitical environment involving the U.S.

•nationalism, populism, protectionism, anti-global sentiment and changes in trade protection measures, including the imposition of increased or new embargoes, tariffs and other trade barriers, import and export regula…

In 2025, 58% of our total revenue was from sales to U.S.

With sales, directly or indirectly, in approximately 150 countries, we compete across a wide range of geographies and end markets.

climate change laws and regulations, enforcement actions or litigation, discovery of previously unknown or more extensive contamination conditions, obsolescence of our products, interruption or suspension of our opera…

Given our global operations, we are subject to regulation under a wide variety of U.S.

Certain current and retired employees are covered by pension and other defined benefit plans (collectively, “post-retirement benefit plans”).

Our pension and other defined benefit plans are subject to regulatory and financial market risks.

•the valuation of our deferred tax assets and liabilities.

•the resolution of tax issues arising from tax examinations by various tax authorities; and

•the statutory tax rates and tax laws in jurisdictions in which we conduct business;

•the geographic mix of jurisdictions in which profits are earned and taxed;

We sell our products in approximately 150 countries and 43% of our revenue was generated outside the U.S.

stakeholders have increasingly expressed or pursued opposing views, legal and investment expectations around sustainability initiatives, including the enactment or proposal of “anti-ESG” legislation, executive orders…

In support of our strategy, we have and will continue to establish goals, targets, and other objectives related to sustainability matters, including science-based targets aligned to limiting global temperature increas…

Our sustainability commitments, goals, targets, objectives and initiatives, and our public statements and disclosures regarding them or in response to mandatory reporting standards, expose us to numerous risks.

In addition, certain of our products, services and solutions assist our customers in meeting increasingly stringent scarcity, efficiency, environmental and safety requirements, including via U.S.

of products.

A significant portion of the offerings in our Measurement and Control Solutions segment use radio spectrum that is subject to government regulation.

or inefficiencies during transitional periods.

performance by our employees include, among other things, delays in or suspension of site access to service or timely deliver our products.

Many of our customers also have safety performance requirements that we must meet to be allowed access to their sites to perform our services, install our products and execute projects.

Furthermore, our Water Solutions and Services segment engages in business activities including manufacturing, waste recycling and treatment processes that involve the use, treatment, storage, transfer, handling and/or…

longer to realize, may not be fully realized, or may cost more than expected, which could materially and adversely affect our business, results of operations or financial condition, as well as adversely impact our sha…

On May 24, 2023, we completed the acquisition of Evoqua.

We may not realize some or all the expected benefits and synergies from our acquisition of Evoqua.

Parts, components and raw materials commonly used in our products include motors, fabricated parts, castings, magnets, bearings, seals, batteries, PCBs and electronic components, including semiconductors, as well as c…

Although we maintain a cybersecurity program that we believe is reasonably designed to protect our information technology, products and services, because the timing, nature and modes of cybersecurity attacks and incid…

We provide certain digitally enabled or internet-connected products, such as pumps, controllers, meters and other equipment, digital (or intelligent) solutions, and other remote monitoring and condition assessment cap…

We have significant operations and direct and indirect suppliers located in China, which have been in the past, or could in the future be, adversely affected by: i) China’s evolving laws, regulations and policies, inc…

•shocks to the global financial system, including due to the outbreak or threat of war, armed conflict, other geopolitical conflicts, terrorism or global health crises, the effects of climate change, or other idiosync…

•changes in tax laws and potential negative consequences from the interpretation, application and enforcement by governmental authorities of tax laws and policies, as well as changes in other laws, regulations and pol…

We have sales in approximately 150 countries and 42% of our revenue was generated outside the U.S.

is no guarantee that they will be achieved or maintained.

In support of our strategy, we have and will continue to establish goals, targets, and other objectives related to sustainability matters.

Sustainability-related laws, regulations, targets and objectives, and stakeholder expectations expose us to numerous risks.

Some of our products, services and solutions enable our customers to meet increasingly stringent scarcity, efficiency, environmental and safety requirements, including laws limiting greenhouse gas (“GHG”) emissions, o…

the 900MHz range.

A significant portion of the offerings in our Measurement and Control Solutions segment use radio spectrum that is subject to government regulation.

security, or service may result in significant costs, reduced profitability, and negative publicity and reputational harm, reducing demand for our products and materially affecting our business, financial condition an…

Many customers require us to meet safety standards to be allowed access to their sites, perform services, install products, and execute projects.

Resource Conservation and Recovery Act ("RCRA") and the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA"), we could be strictly, jointly and severally liable for releases of regulated su…

Our Water Solutions and Services segment engages in manufacturing, waste recycling, and treatment processes involving the use, treatment, storage, transfer, handling and/or disposal of hazardous and non-hazardous mate…

requirements; weather emergencies and the effects of volatile weather patterns; public health crises; and threatened or actual terrorism, armed conflict or war.

Parts, components and raw materials commonly used in our products include motors, fabricated parts, castings, magnets, bearings, seals, batteries, PCBs and electronic components, including semiconductors, as well as c…